EXHIBIT 4.1
CONFORMED COPY
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Rockford Corporation, Issuer
BNY WESTERN TRUST COMPANY,
as Trustee
INDENTURE
Dated as of June 10, 2004
4.5% Convertible Senior Subordinated Secured Notes due 2009
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CROSS-REFERENCE TABLE*
Provisions of Trust Indenture Act of 1939 and Indenture, dated as of June
10, 2004, between Rockford Corporation and BNY Western Trust Company, as
Trustee, providing for the 4.5% Convertible Senior Subordinated Secured Notes
due 2009:
Section of the Act Section of Indenture
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310(a)(1) and (2)...................................... 8.9
310(a)(3) and (4)...................................... N.A.**
310(b)................................................. 8.8 and 8.10(b) and (d)
310(c)................................................. N.A.
311(a)................................................. 8.13
311(b)................................................. 8.13
311(c)................................................. N.A.
312(a)................................................. 6.1 and 6.2(a)
312(b)................................................. 6.2(b)
312(c)................................................. 6.2(c)
313(a)................................................. 6.3(a)
313(b)(1).............................................. N.A.
313(b)(2).............................................. 6.3(a)
313(c)................................................. 6.3(a)
313(d)................................................. 6.3(b)
314(a)................................................. 6.4
314(b)................................................. 17.4
314(c)(1) and (2)...................................... 18.5
314(c)(3).............................................. 17.6.
314(d)................................................. N.A.
314(e)................................................. 18.5
314(f)................................................. N.A.
315(a), (c) and (d).................................... 8.1
315(b)................................................. 7.8
315(e)................................................. 7.9
316(a)(1).............................................. 7.7
316(a)(2).............................................. Not required
316(a) (last sentence)................................. 9.4
316(b)................................................. 11.2
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* This Cross-Reference Table shall not, for any purpose, be deemed a part of
this Indenture.
** N.A. means Not Applicable.
TABLE OF CONTENTS
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ARTICLE I DEFINITIONS...................................................................................... 1
Section 1.1 Definitions..................................................................... 1
Section 1.2 Other Definitions............................................................... 10
ARTICLE II ISSUE, DESCRIPTION, EXECUTION, REGISTRATION AND EXCHANGE OF NOTES............................... 11
Section 2.1 Designation, Amount and Issue of Notes.......................................... 11
Section 2.2 Form of Notes................................................................... 11
Section 2.3 Date and Denomination of Notes; Payments of Interest............................ 12
Section 2.4 Execution of Notes.............................................................. 13
Section 2.5 Exchange and Registration of Transfer of Notes; Restrictions on Transfer........ 14
Section 2.6 Mutilated, Destroyed, Lost or Stolen Notes...................................... 27
Section 2.7 Temporary Notes................................................................. 28
Section 2.8 Cancellation of Notes Paid, Etc................................................. 29
Section 2.9 CUSIP Numbers................................................................... 29
ARTICLE III OPTIONAL REDEMPTION OF NOTES................................................................... 29
Section 3.1 Redemption Price................................................................ 29
Section 3.2 Notice of Redemption; Selection of Notes........................................ 30
Section 3.3 Payment of Notes Called for Redemption.......................................... 31
Section 3.4 Conversion Arrangement on Call for Redemption................................... 32
ARTICLE IV SUBORDINATION................................................................................... 33
Section 4.1 Subordination to Senior Indebtedness............................................ 33
Section 4.2 No Payment if Default in Senior Indebtedness.................................... 34
Section 4.3 Payment upon Dissolution, Etc................................................... 35
Section 4.4 Payments on Notes............................................................... 36
Section 4.5 Certain Conversions Deemed Payment.............................................. 36
Section 4.6 Subrogation..................................................................... 36
Section 4.7 Rights of Holders Unimpaired.................................................... 37
Section 4.8 Holders of Senior Indebtedness.................................................. 37
Section 4.9 Trustee Not Fiduciary for Holders of Senior Indebtedness........................ 37
Section 4.10 Rights of Trustee as Holder of Senior Indebtedness; Preservation of Trustee's
Rights.......................................................................... 37
ARTICLE V PARTICULAR COVENANTS OF THE COMPANY.............................................................. 38
Section 5.1 Payment of Principal, Premium and Interest...................................... 38
Section 5.2 Maintenance of Office or Agency................................................. 39
Section 5.3 Appointments to Fill Vacancies in Trustee's Office.............................. 39
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Section 5.4 Provisions as to Paying Agent................................................... 40
Section 5.5 Existence....................................................................... 41
Section 5.6 Information Requirement......................................................... 41
Section 5.7 Stay, Extension and Usury Laws.................................................. 41
Section 5.8 Compliance Certificate.......................................................... 41
Section 5.9 Further Instruments and Acts.................................................... 42
ARTICLE VI NOTEHOLDERS' LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE................................... 42
Section 6.1 Noteholders Lists............................................................... 42
Section 6.2 Preservation and Disclosure of Lists............................................ 42
Section 6.3 Reports by Trustee.............................................................. 43
Section 6.4 Reports by Company.............................................................. 43
ARTICLE VII DEFAULTS AND REMEDIES.......................................................................... 44
Section 7.1 Events of Default............................................................... 44
Section 7.2 Payments of Notes on Default; Suit Therefor..................................... 47
Section 7.3 Application of Monies Collected by Trustee...................................... 49
Section 7.4 Proceedings by Noteholder....................................................... 50
Section 7.5 Proceedings by Trustee.......................................................... 50
Section 7.6 Remedies Cumulative and Continuing.............................................. 51
Section 7.7 Direction of Proceedings and Waiver of Defaults by Majority of Noteholders...... 51
Section 7.8 Notice of Defaults.............................................................. 51
Section 7.9 Undertaking to Pay Costs........................................................ 52
Section 7.10 Delay or Omission Not Waiver.................................................... 52
ARTICLE VIII CONCERNING THE TRUSTEE........................................................................ 52
Section 8.1 Duties and Responsibilities of Trustee.......................................... 52
Section 8.2 Reliance on Documents, Opinions, Etc............................................ 54
Section 8.3 No Responsibility for Recitals, Etc............................................. 55
Section 8.4 Trustee, Paying Agents, Conversion Agents or Note Registrar May Own Notes....... 55
Section 8.5 Monies to be Held in Trust...................................................... 56
Section 8.6 Compensation and Expenses of Trustee............................................ 56
Section 8.7 Officer's Certificate as Evidence............................................... 57
Section 8.8 Conflicting Interests of Trustee................................................ 57
Section 8.9 Eligibility of Trustee.......................................................... 57
Section 8.10 Resignation or Removal of Trustee............................................... 57
Section 8.11 Acceptance by Successor Trustee................................................. 59
Section 8.12 Succession by Merger, Etc....................................................... 59
Section 8.13 Limitation on Rights of Trustee as Creditor..................................... 60
ARTICLE IX CONCERNING THE NOTEHOLDERS...................................................................... 60
Section 9.1 Action by Noteholders........................................................... 60
Section 9.2 Proof of Execution by Noteholders............................................... 60
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Section 9.3 Who Are Deemed Absolute Owners.................................................. 61
Section 9.4 Company-Owned Notes Disregarded................................................. 61
Section 9.5 Revocation of Consents; Future Holders Bound.................................... 61
ARTICLE X NOTEHOLDERS' MEETINGS............................................................................ 62
Section 10.1 Purpose of Meetings............................................................. 62
Section 10.2 Call of Meetings by Trustee..................................................... 62
Section 10.3 Call of Meetings by Company or Noteholders...................................... 63
Section 10.4 Qualifications for Voting....................................................... 63
Section 10.5 Regulations..................................................................... 63
Section 10.6 Voting.......................................................................... 64
Section 10.7 No Delay of Rights by Meeting................................................... 64
ARTICLE XI AMENDMENTS; SUPPLEMENTAL INDENTURES............................................................. 64
Section 11.1 Amendments; Supplemental Indentures without Consent of Noteholders.............. 64
Section 11.2 Amendments; Supplemental Indentures with Consent of Noteholders................. 66
Section 11.3 Effect of Amendments and Supplemental Indentures................................ 67
Section 11.4 Notation on Notes............................................................... 67
Section 11.5 Evidence of Compliance of Amendment or Supplemental Indenture to be Furnished to
Trustee......................................................................... 67
ARTICLE XII CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE.............................................. 68
Section 12.1 Company May Consolidate, Etc.................................................... 68
Section 12.2 Successor Entity to be Substituted.............................................. 68
Section 12.3 Opinion of Counsel to be Given Trustee.......................................... 69
ARTICLE XIII SATISFACTION AND DISCHARGE OF INDENTURE....................................................... 69
Section 13.1 Discharge of Indenture.......................................................... 69
Section 13.2 Deposited Monies to be Held in Trust by Trustee................................. 70
Section 13.3 Paying Agent to Repay Monies Held............................................... 70
Section 13.4 Return of Unclaimed Monies...................................................... 70
Section 13.5 Reinstatement................................................................... 71
ARTICLE XIV NO RECOURSE AGAINST OTHERS..................................................................... 71
Section 14.1 Indenture and Notes Solely Corporate Obligations................................ 71
ARTICLE XV CONVERSION OF NOTES............................................................................. 71
Section 15.1 Right to Convert................................................................ 71
Section 15.2 Exercise of Conversion Privilege; Issuance of Common Stock on Conversion........ 72
Section 15.3 Company Right to Force Automatic Conversion..................................... 74
Section 15.4 Cash Payments in Lieu of Fractional Shares...................................... 76
Section 15.5 Conversion Price................................................................ 76
Section 15.6 Adjustment of Conversion Price.................................................. 76
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Section 15.7 Effect of Reclassification, Consolidation, Merger or Sale....................... 83
Section 15.8 Taxes on Shares Issued.......................................................... 84
Section 15.9 Reservation of Shares; Shares to be Fully Paid; Listing of Common Stock......... 84
Section 15.10 Responsibility of Trustee....................................................... 86
Section 15.11 Notice to Holders Prior to Certain Actions...................................... 86
ARTICLE XVI REPURCHASE UPON A REPURCHASE EVENT............................................................. 87
Section 16.1 Repurchase Right................................................................ 87
Section 16.2 Notices; Method of Exercising Repurchase Right, Etc............................. 88
Section 16.3 Certain Definitions............................................................. 90
ARTICLE XVII COLLATERAL AND SECURITY DOCUMENTS............................................................. 91
Section 17.1 Collateral and Security Documents............................................... 91
Section 17.2 Application of Proceeds of Collateral........................................... 91
Section 17.3 Possession, Use and Release of Collateral....................................... 92
Section 17.4 Opinion of Counsel.............................................................. 93
Section 17.5 Further Assurances.............................................................. 93
Section 17.6 Trust Indenture Act Requirements................................................ 93
Section 17.7 Suits to Protect Collateral..................................................... 94
Section 17.8 Purchaser Protected............................................................. 94
Section 17.9 Powers Exerciseable by Receiver or Trustee...................................... 94
Section 17.10 Release upon Termination of Company's Obligations............................... 94
Section 17.11 Limitation on Duty of Trustee in Respect of Collateral.......................... 95
Section 17.12 Authorization of Trustee........................................................ 95
ARTICLE XVIII MISCELLANEOUS PROVISIONS..................................................................... 96
Section 18.1 Provisions Binding on Company's Successors...................................... 96
Section 18.2 Official Acts by Successor Corporation.......................................... 96
Section 18.3 Addresses for Notices, Etc...................................................... 96
Section 18.4 Governing Law................................................................... 97
Section 18.5 Evidence of Compliance with Conditions Precedent; Certificates to Trustee....... 98
Section 18.6 Legal Holidays.................................................................. 98
Section 18.7 Trust Indenture Act............................................................. 98
Section 18.8 Benefits of Indenture........................................................... 99
Section 18.9 Table of Contents, Headings, Etc................................................ 99
Section 18.10 Authenticating Agent............................................................ 99
Section 18.11 Execution in Counterparts....................................................... 100
Section 18.12 No Adverse Interpretation of Other Agreements................................... 100
EXHIBIT A Form of 4.5% Convertible Senior Subordinated Secured Note due 2009
EXHIBIT B Form of Conversion Notice
EXHIBIT C Form of Option to Elect Repayment Upon a Repurchase Event
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EXHIBIT D Form of Certificate of Transfer
EXHIBIT E Form of Certificate of Exchange
EXHIBIT F Form of Transfer Letter of Representations
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INDENTURE dated as of June 10, 2004 between Rockford Corporation, an
Arizona corporation (hereinafter sometimes called the "Company", as more fully
set forth in Section 1.1), and BNY Western Trust Company, a California banking
corporation, as trustee (hereinafter sometimes called the "Trustee", as more
fully set forth in Section 1.1).
W I T N E S S E T H:
WHEREAS, for its lawful corporate purposes, the Company has duly
authorized the issue of its 4.5% Convertible Senior Subordinated Secured Notes
due 2009 (hereinafter sometimes called the "Notes"), in an aggregate principal
amount not to exceed Twelve Million, Five Hundred Thousand United States Dollars
($12,500,000) and to provide the terms and conditions upon which the Notes are
to be authenticated, issued and delivered, the Company has duly authorized the
execution and delivery of this Indenture; and
WHEREAS, the Notes, the certificate of authentication to be borne by the
Notes, a form of assignment, a form of option to elect repayment upon a
Repurchase Event, and a form of conversion notice and transfer to be borne by
the Notes are to be substantially in the forms hereinafter provided for; and
WHEREAS, all acts and things necessary to make the Notes, when executed by
the Company and authenticated and delivered by the Trustee or a duly authorized
authenticating agent, as provided in this Indenture, the valid, binding and
legal obligations of the Company, and to make this Indenture a valid agreement
of the Company according to its terms, have been done and performed, and the
execution of this Indenture and the issue hereunder of the Notes have in all
respects been duly authorized.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
That in order to declare the terms and conditions upon which the Notes
are, and are to be, authenticated, issued and delivered, and in consideration of
the premises and of the purchase and acceptance of the Notes by the holders
thereof, the Company covenants and agrees with the Trustee for the equal and
proportionate benefit of the respective holders from time to time of the Notes
(except as otherwise provided below), as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Definitions
144A Global Note: The term "144A Global Note" means the Global Note
substantially in the form of Exhibit A hereto bearing the Global Note Legend and
the Private Placement Legend and deposited with or on behalf of, and registered
in the name of, the Depositary or its nominee that will be issued in a
denomination equal to the outstanding principal amount of the Notes sold in
reliance on Rule 144A.
Affiliate: The term "Affiliate" of any specified Person shall mean any
other person directly or indirectly controlling or controlled by or under direct
or indirect common control with such specified Person. For the purposes of this
definition, "control," when used with respect to any specified Person means the
power to direct or cause the direction of the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
Applicable Procedures: The term "Applicable Procedures" shall mean, with
respect to any transfer or exchange of beneficial ownership interests in a
Global Note, the rules and procedures of the Depositary that are applicable to
such transfer or exchange.
AII: The term "AII" shall mean Audio Innovations, Inc., a wholly-owned
Subsidiary of the Company.
Board of Directors: The term "Board of Directors" shall mean the Board of
Directors of the Company or a committee of such Board of Directors duly
authorized to act for it hereunder (to the extent permitted by applicable law).
Board Resolution: The term "Board Resolution" means a copy of a resolution
certified by the Secretary or an Assistant Secretary of the Company to have been
duly adopted by the Board of Directors, and to be in full force and effect on
the date of such certification, and delivered to the Trustee.
Business Day: The term "Business Day" means each Monday, Tuesday,
Wednesday, Thursday and Friday which is not a day on which the banking
institutions in Los Angeles and the City of New York or the city in which the
Corporate Trust Office is located are authorized or obligated by law or
executive order to close or be closed.
Close of business: The term "close of business" means 5 p.m. (New York
City time).
Collateral: The term "Collateral" has the meaning set forth in the
Security Agreement.
Collateral Agent: The term "Collateral Agent" means the Trustee in its
capacity as Collateral Agent under the Security Agreement, together with any
other successor collateral agent.
Commission: The term "Commission" shall mean the Securities and Exchange
Commission.
Common Stock: The term "Common Stock" shall mean 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, which is not subject to redemption by the Company and
which entitles the holder thereof to vote generally for the election of
directors. Subject to the provisions of Section 15.6, however, shares issuable
on conversion of 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
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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: The term "Company" shall mean Rockford Corporation, an Arizona
corporation, and subject to the provisions of Article XII, shall include its
successors and assigns.
Conversion Shares: The term "Conversion Shares" means all shares of Common
Stock into which the Notes are convertible pursuant to Article XV of this
Indenture.
Corporate Trust Office: The term "Corporate Trust Office," or other
similar term, shall mean the office of the Trustee at which at any particular
time its corporate trust business shall be principally administered, which
office is, at the date as of which this Indenture is dated, located at 000 X.
Xxxxxx Xxxxxx - Xxxxx 000, Xxx Xxxxxxx, XX 00000.
Custodian: The term "Custodian" shall mean the Trustee, as custodian with
respect to the Notes in global form, or any successor entity thereto.
Default: The term "default" shall mean any event that is, or after notice
or passage of time, or both, would be, an Event of Default.
Definitive Note: The term "Definitive Note" shall mean a certificated Note
registered in the name of the holder thereof and issued in accordance with
Section 2.5, substantially in the form of Exhibit A hereto except that such Note
shall not bear the Global Note Legend and shall not have the "Schedule of
Exchanges of Interests in the Global Note" attached thereto.
Depositary: The term "Depositary" shall mean, with respect to the Notes
issuable or issued in whole or in part in global form, The Depository Trust
Company, its nominees, and their respective successors.
Designated Senior Debt: The term "Designated Senior Debt" shall mean (i)
any Senior Indebtedness consisting of indebtedness for borrowed money which, at
the time of determination, has an aggregate principal amount of at least Two
Million United States Dollars. ($2,000,000) if the instrument creating or
evidencing the same or the assumption or guarantee thereof (or related
agreements or documents to which the Company or any Subsidiary 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 the holders of
such Senior Indebtedness to exercise the rights of holders of Designated Senior
Debt) and (ii) the Senior Facility. If any payment made to any holder of any
Designated Senior Debt with respect to such Designated Senior Debt is rescinded
or must otherwise be returned by such holder upon the insolvency, bankruptcy or
reorganization of the Company or any Subsidiary or otherwise, the reinstated
indebtedness of the Company or
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such subsidiary arising as a result of such rescission or return shall
constitute Designated Senior Debt effective as of the date of such rescission or
return.
EBITDA: The term "EBITDA" shall mean for any fiscal period, as applicable,
of the Company, the sum of operating income of the Company and its Subsidiaries
on a consolidated basis, excluding any non-recurring or special items, plus
depreciation and amortization expense deducted therefrom, all as determined in
accordance with GAAP as calculated by the Company's chief financial officer
consistent with the information presented in the financial statements of the
Company filed with the Commission pursuant to Section 13 or 15(d) of the
Exchange Act, or provided to the Trustee in accordance with Section 6.4(b)
hereof.
Equity Interests: The term "Equity Interests" shall mean capital stock or
warrants, options or other rights to subscribe for, acquire or receive capital
stock (but excluding any debt security which is convertible into, or
exchangeable for, capital stock).
Event of Default: The term "Event of Default" shall mean any event
specified in Section 7.1, continued for the period of time, if any, and after
the giving of notice, if any, therein designated.
Exchange Act: The term "Exchange Act" means the Securities Exchange Act of
1934, as amended, and the rules and regulations promulgated thereunder.
First Priority Lien Obligations: The term "First Priority Lien
Obligations" means the (i) the indebtedness and other obligations under the
Senior Facility and (ii) any obligations under any other agreements evidencing
Senior Indebtedness secured by a first priority Lien on any assets or properties
of the Company and its Subsidiaries. First Priority Lien Obligations shall
include all interest accrued or accruing (or which would, absent the
commencement of an Insolvency or Liquidation Proceeding, accrue) after the
commencement of an Insolvency or Liquidation Proceeding in accordance with and
at the rate specified in the Senior Facility or other First Priority Lien
Obligation whether or not the claim for such interest is allowed as a claim in
such Insolvency or Liquidation Proceeding. To the extent any payment with
respect to the First Priority Lien Obligations (whether by or on behalf of any
borrower, as proceeds of security, enforcement of any right of setoff or
otherwise) is declared to be fraudulent or preferential in any respect, set
aside or required to be paid to a debtor in possession, trustee, receiver or
similar Person, the obligation or part thereof originally intended to be
satisfied shall be deemed to be reinstated and outstanding as if such payment
had not occurred.
First Priority Liens: The term "First Priority Liens" means all Liens that
secure the First Priority Lien Obligations.
GAAP: The term "GAAP" means generally accepted accounting principles in
the United States as in effect on the date of this Indenture, applied on a
consistent basis.
Global Notes: The term "Global Notes" shall mean, individually and
collectively, each of the Restricted Global Notes and the Unrestricted Global
Notes, issued in accordance with Section 2.2, 2.5(c)(iv) or 2.5(e)(ii).
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Global Note Legend: The term "Global Note Legend" shall mean the legend
set forth in Section 2.5(h)(iii), which is required to be placed on all Global
Notes issued under this Indenture.
IAI Global Note: The term "IAI Global Note" shall mean the Global Note
substantially in the form of Exhibit A hereto bearing the Global Note Legend and
the Private Placement Legend and deposited with or on behalf of and registered
in the name of the Depositary or its nominee that shall be issued in a
denomination equal to the outstanding principal amount of the Notes held by
Institutional Accredited Investors or Individual Accredited Investors.
Indenture: The term "Indenture" shall mean this instrument as originally
executed or, if amended or supplemented as herein provided, as so amended or
supplemented.
Individual Accredited Investor: The term "Individual Accredited Investor"
shall mean an individual "accredited investor" as defined in Rule 501(a) (5) or
(6) of Regulation D under the Securities Act.
Indirect Participant: The term "Indirect Participant" shall mean a Person
who holds a beneficial interest in a Global Note through a Participant.
Institutional Accredited Investor: The term "Institutional Accredited
Investor" shall mean an institutional "accredited investor" as such term is
defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act or any
entity in which all of the equity owners are accredited investors within the
meaning of Rule 501(a)(1), (2), (3), (5), (6) or (7) under the Securities Act.
Intercreditor Agreement: The term "Intercreditor Agreement" means that
certain Intercreditor Agreement, dated June 10, 2004, among the Company, AII,
the Collateral Agent and the Senior Agent.
Junior Facility: The term "Junior Facility" shall mean that certain Loan
and Security Agreement dated March 29, 2004, among the Company, Audio
Innovations, Inc., and Hilco Capital LP.
Junior Liens: The term "Junior Liens" means the Liens on the Collateral
granted by the Company and AII to secure the payment and performance of all or
any Obligations, and all replacements, renewals and other modifications of such
Liens.
Lien: The term "Lien" means, with respect to any asset, any mortgage, deed
of trust, deed to secure debt, lien, pledge, charge, security interest or
encumbrance of any kind in respect of such asset, whether or not filed, recorded
or otherwise perfected under applicable law (including any conditional sale or
other title retention agreement or any lease in the nature thereof); provided
that in no event shall an operating lease be deemed to constitute a Lien.
Liquidated Damages: The term "Liquidated Damages" means all liquidated
damages then owing pursuant to Section 2(f) of the Registration Rights Agreement
and Section 15.2.
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Note or Notes: The terms "Note" or "Notes" shall mean any Note or Notes,
as the case may be, authenticated and delivered under this Indenture.
Noteholder or holder: The terms "Noteholder" or "holder" as applied to any
Note, or other similar terms (but excluding the term "beneficial holder"), shall
mean any Person in whose name at the time a particular Note is registered on the
Note Register.
Obligations: The term "Obligations" shall have the meaning assigned
thereto in the Security Agreement.
Officer's Certificate: The term "Officer's Certificate", when used with
respect to the Company, shall mean a certificate signed by one of the President,
the Chief Executive Officer, Chief Financial Officer, Executive or Senior Vice
President or any Vice President, that is delivered to the Trustee. Each such
certificate shall include the statements provided for in Section 18.5 if and to
the extent required by the provisions of such Section.
Opinion of Counsel: The term "Opinion of Counsel" shall mean an opinion in
writing signed by legal counsel, who may be an employee of or counsel to the
Company, which is delivered to the Trustee. Each such opinion shall include the
statements provided for in Section 18.5 if and to the extent required by the
provisions of such Section.
Outstanding: The term "outstanding," when used with reference to Notes,
shall, subject to the provisions of Section 9.4, mean, as of any particular
time, all Notes authenticated and delivered by the Trustee under this Indenture,
except:
(a) Notes theretofore canceled by the Trustee or delivered to the
Trustee for cancellation;
(b) Notes, or portions thereof, for the payment, or redemption of
which monies in the necessary amount shall have been deposited in trust
with the Trustee or with any paying agent (other than the Company) or
shall have been set aside and segregated in trust by the Company (if the
Company shall act as its own paying agent); provided that if such Notes
are to be redeemed, as the case may be, prior to the maturity thereof,
notice of such redemption shall have been given as provided in Section
3.2, or provision satisfactory to the Trustee shall have been made for
giving such notice;
(c) Notes paid pursuant to Section 2.6 and Notes in lieu of which,
or in substitution for which, other Notes shall have been authenticated
and delivered pursuant to the terms of Section 2.6 unless proof
satisfactory to the Trustee is presented that any such Notes are held by
bona fide holders in due course; and
(d) Notes converted into Common Stock pursuant to Article XV and
Notes deemed not outstanding pursuant to Section 3.2.
Participant: The term "Participant" shall mean, with respect to the
Depositary, a Person who has an account with the Depositary.
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Person: The term "Person" shall mean an individual, a corporation, a
limited liability company, an association, a partnership, a joint venture, a
joint stock company, a trust, an unincorporated organization or a government or
an agency or a political subdivision thereof.
Predecessor Note: The term "Predecessor Note" of any particular Note shall
mean every previous Note evidencing all or a portion of the same debt as that
evidenced by such particular Note; and, for the purposes of this definition, any
Note authenticated and delivered under Section 2.6 in lieu of a lost, destroyed
or stolen Note shall be deemed to evidence the same debt as the lost, destroyed
or stolen Note that it replaces.
Private Placement Legend: The term "Private Placement Legend" shall mean
the legend set forth in Section 2.5(h)(i) to be placed on all Notes issued under
this Indenture except where otherwise permitted by the provisions of this
Indenture.
QIB: The term "QIB" shall mean a "qualified institutional buyer" as
defined in Rule 144A.
Registration Rights Agreement: The term "Registration Rights Agreement"
means that certain Registration Rights Agreement, dated as of June 10, 2004,
among the Company, Xxxxx Xxxxxxx & Co. and the Buyers as defined therein, as
such agreement may be amended from time to time.
Representative: The term "Representative" shall mean (a) the indenture
trustee or other trustee, agent or representative for holders of Senior
Indebtedness or (b) with respect to any Senior Indebtedness that does not have
any trustee, agent or other representative, (i) in the case of such Senior
Indebtedness issued pursuant to an agreement providing for voting arrangements
as among the holders or owners of such Senior Indebtedness, any holder or owner
of such Senior Indebtedness acting with the consent of the required persons
necessary to bind such holders or owners of such Senior Indebtedness and (ii) in
the case of all other such Senior Indebtedness, the holder or owner of such
Senior Indebtedness.
Responsible Officer: The term "Responsible Officer" shall mean, when used
with respect to the Trustee, any officer within the corporate trust department
of the Trustee, including any vice president, assistant vice president,
assistant treasurer, trust officer or any other officer of the Trustee who
customarily performs functions similar to those performed by the Persons who at
the time shall be such officers, respectively, or to whom any corporate trust
matter is referred because of such person's knowledge of and familiarity with
the particular subject and who shall have direct responsibility for the
administration of this Indenture.
Restricted Definitive Note: The term "Restricted Definitive Note" means a
Definitive Note bearing the Private Placement Legend.
Restricted Global Note: The term "Restricted Global Note" shall mean a
permanent Global Note substantially in the form of Exhibit A attached hereto
that bears the Global Note Legend and that has the "Schedule of Exchanges of
Interests in the Global Note" attached thereto, and that is deposited with or on
behalf of and registered in the name of the Depositary, representing a series of
Notes that bear the Private Placement Legend.
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Rule 144: The term "Rule 144" shall mean Rule 144 promulgated under the
Securities Act.
Rule 144A: The term "Rule 144A" shall mean Rule 144A promulgated under the
Securities Act.
Second Priority Lien: The term "Second Priority Lien" shall mean the
Junior Liens and Liens that secure obligations under any other agreements
evidencing indebtedness secured by a second priority Lien on any assets or
properties of the Company.
Securities Act: The term "Securities Act" means the Securities Act of
1933, as amended, and the rules and regulations promulgated thereunder.
Securities Purchase Agreement: The term "Securities Purchase Agreement"
means that certain Securities Purchase Agreement, dated as of June 10, 2004,
among the Company and the parties listed on the Schedule of Buyers attached
thereto as Exhibit A, as such agreement may be amended from time to time.
Security Agreement: The term "Security Agreement" means that certain
Security Agreement, dated as of June 10, 2004, among the Company, AII and the
Collateral Agent, granting, among other things, a second priority Lien on the
Collateral described therein in favor of the Collateral Agent for the benefit of
the Trustee and Noteholders, as amended, modified, restated, supplemented or
replaced from time to time.
Security Documents: The term "Security Documents" means, collectively, the
Security Agreement, the Intercreditor Agreement and all other security
agreements, pledges, collateral assignments or other instruments evidencing or
creating any Security Interests in favor of the Collateral Agent, for the
benefit of the Trustee and the Noteholders, in all or any portion of the
Collateral, in each case, as amended, modified, restated, supplemented or
replaced from time to time.
Security Interests: The term "Security Interests" means the Liens on the
Collateral created by the Security Documents in favor of the Collateral Agent
for the benefit of the Trustee and the Noteholders.
Senior Agent: The term "Senior Agent" shall mean Congress Financial
Corporation (Western), in its capacity as collateral agent for the Senior
Facility, together with any other successor collateral agent.
Senior Facility: The term "Senior Facility" means the senior credit
facility under that certain Loan and Security Agreement dated March 29, 2004,
among the Company, Audio Innovations, Inc., Senior Agent and the lenders named
therein, together with the documents now or hereafter related thereto (including
without limitation, any guarantee agreements and any security documents), in
each case as such agreements may be amended (including any amendment and
restatement thereof), supplemented or otherwise modified from time to time,
including any agreement extending the maturity of, refinancing, replacing,
increasing the amount of, or otherwise restructuring all or any portion of the
indebtedness under such agreement or any
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successor or replacement agreement and whether by the same or any other agent,
lender or group of lenders (or other institutions).
Senior Liens: The term "Senior Liens" means the Liens on the Collateral
granted by the Company or AII to secure the payment of any First Priority Lien
Obligations, and all replacements, renewals and other modifications of such
Liens.
Shelf Registration Statement: The term "Shelf Registration Statement"
means the Shelf Registration Statement contemplated by the Registration Rights
Agreement.
Subsidiary: The term "Subsidiary" means a Person more than 50% of the
outstanding voting stock or Equity Interests of which is owned, directly or
indirectly, by the Company or by one or more other Subsidiaries, or by the
Company and one or more other Subsidiaries. For the purposes of this definition,
"voting stock" means stock which ordinarily has voting power for the election of
directors, whether at all times or only so long as no senior class of stock has
such voting power by reason of any contingency.
Transaction Documents: The term "Transaction Documents" shall mean the
Securities Purchase Agreement, the Registration Rights Agreement, the Notes, the
Warrants, the Warrant Agent Agreement, the Indenture, the Security Documents and
each of the other agreements entered into by the parties thereto in connection
with the transactions contemplated by the Securities Purchase Agreement.
Trust Indenture Act: The term "Trust Indenture Act" shall mean the Trust
Indenture Act of 1939, as amended, as it was in force at the date of execution
of this Indenture, except as provided in Sections 11.3 and 15.7; provided,
however, that in the event the Trust Indenture Act of 1939 is amended after the
date hereof, the term "Trust Indenture Act" shall mean, to the extent required
by such amendment, the Trust Indenture Act of 1939 as so amended.
Trustee: The term "Trustee" shall mean BNY Western Trust Company and its
successors and any corporation resulting from or surviving any consolidation or
merger to which it or its successors may be a party and any successor trustee at
the time serving as successor trustee hereunder.
Unrestricted Global Note: The term "Unrestricted Global Note" shall mean a
permanent Global Note substantially in the form of Exhibit A attached hereto
that bears the Global Note Legend and that has the "Schedule of Exchanges of
Interests in the Global Note" attached thereto, and that is deposited with or on
behalf of and registered in the name of the Depositary, representing a series of
Notes that do not bear and are not required to bear the Private Placement
Legend.
Unrestricted Definitive Note: The term "Unrestricted Definitive Note"
shall mean one or more Definitive Notes that do not bear and are not required to
bear the Private Placement Legend.
Warrants: The term "Warrants" shall mean the warrants to purchase shares
of Common Stock issued pursuant to the Securities Purchase Agreement and all
warrants issued in exchange, transfer or replacement thereof.
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Section 1.2 Other Definitions
Defined in
Term Section
---- ----------
"Additional Conversion Payment" 15.1
"Additional Repurchase Payment".......................................... 16.1
"Additional Securities".................................................. 15.6(d)
"Agent Members".......................................................... 2.2(b)
"Authentication Order"................................................... 2.1
"Automatic Conversion Date".............................................. 15.3
"Change in Control"...................................................... 16.3(e)
"Closing Price".......................................................... 15.6(e)(1)
"Company Conversion Provisional Payment"................................. 15.3
"Company Notice"......................................................... 16.2(a)
"Continuing Director".................................................... 16.3(c)
"Conversion Date"........................................................ 15.2
"Conversion Notice"...................................................... 15.2
"Conversion Price"....................................................... 15.5
"Current Market Price"................................................... 15.6(e)(2)
"fair market value"...................................................... 15.6(e)(4)
"Interest Payment Date".................................................. 2.3
"non-electing share"..................................................... 15.7
"Note Register".......................................................... 2.5(a)
"Note Registrar"......................................................... 2.5(a)
"Payment Blockage Notice"................................................ 4.2
"Payment Blockage Period"................................................ 4.2
"Payment Default"........................................................ 4.2
"Proceeding"............................................................. 4.3(a)
"record date"............................................................ 2.3
"Record Date"............................................................ 15.6(e)(4)
"Reference Period"....................................................... 15.6(d)
"Repurchase date"........................................................ 16.1
"Repurchase Event"....................................................... 16.3(d)
"Repurchase Price"....................................................... 16.1
"Restricted Securities".................................................. 2.5(h)(i)
"Senior Indebtedness".................................................... 4.1
"Statutory Exchange"..................................................... 15.7
"Termination of Trading"................................................. 16.3(f)
"Trading Day"............................................................ 15.6(e)(5)
"Trigger Event".......................................................... 15.6(d)
"Vice President"......................................................... 2.1
"Voting Stock"........................................................... 16.3(e)
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Section 1.3 Rules of Construction
All other terms used in this Indenture, which are defined in the Trust
Indenture Act or which are by reference therein defined in the Securities Act
(except as herein otherwise expressly provided or unless the context otherwise
requires) shall have the meanings assigned to such terms in the Trust Indenture
Act and in the Securities Act as in force at the date of the execution of this
Indenture. The words "herein," "hereof," "hereunder," and words of similar
import refer to this Indenture as a whole and not to any particular Article,
Section or other subdivision. The terms defined in this Article I include the
plural as well as the singular.
ARTICLE II
ISSUE, DESCRIPTION, EXECUTION, REGISTRATION AND EXCHANGE OF NOTES
Section 2.1 Designation, Amount and Issue of Notes
The Notes shall be designated as "4.5% Convertible Senior Subordinated
Secured Notes due 2009." Notes not to exceed the aggregate principal amount of
Twelve Million, Five Hundred Thousand United States Dollars ($12,500,000) upon
the execution of this Indenture, or (except pursuant to Sections 2.5, 2.6, 3.3,
15.2 and 16.2) from time to time thereafter, may be executed by the Company and
delivered to the Trustee for authentication, and the Trustee shall thereupon
authenticate and deliver said Notes upon the written order of the Company (the
"Authentication Order"), signed by the Company's (a) President, Chief Executive
Officer, Executive or Senior Vice President or any Vice President (whether or
not designated by a number or numbers or word or words added before or after the
title, a "Vice President") and (b) Chief Financial Officer, Treasurer or
Assistant Treasurer or its Secretary or any Assistant Secretary, without any
further action by the Company hereunder.
Section 2.2 Form of Notes
(a) Notes issued in global form shall be substantially in the form
of Exhibit A attached hereto (including the Global Note Legend thereon and
the "Schedule of Exchanges of Interests in the Global Note" attached
thereto), which is incorporated in and made a part of this Indenture.
Notes issued in definitive form shall be substantially in the form of
Exhibit A attached hereto (but without the Global Note Legend thereon and
without the "Schedule of Exchanges of Interests in the Global Note"
attached thereto). Each Global Note shall represent such of the
outstanding Notes as shall be specified therein and each shall provide
that it shall represent the aggregate principal amount of outstanding
Notes from time to time endorsed thereon and that the aggregate principal
amount of outstanding Notes represented thereby may from time to time be
reduced or increased, as appropriate, to reflect purchases, conversions
and redemptions. Any endorsement of a Global Note to reflect the amount of
any decrease or increase in the aggregate principal amount of outstanding
Notes represented thereby shall be made by the Trustee or the Custodian,
at the direction of the Trustee, in accordance with instructions given by
the holder thereof as required by Section 2.5.
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The Trustee's certificate of authentication to be borne by such
Notes shall be substantially in the form set forth in Exhibit A.
Any of the Notes may have such letters, numbers or other marks of
identification and such notations, legends and endorsements as the
officers executing the same may approve (execution thereof to be
conclusive evidence of such approval) and as are not inconsistent with the
provisions of this Indenture, or as may be required to comply with any law
or with any rule or regulation made pursuant thereto or with any rule or
regulation of any securities exchange or automated quotation system on
which the Notes may be listed or designated for issuance, or to conform to
usage.
The terms and provisions contained in the form of Note attached as
Exhibit A hereto shall constitute, and are hereby expressly made, a part
of this Indenture and to the extent applicable, the Company and the
Trustee, by their execution and delivery of this Indenture, expressly
agree to such terms and provisions and to be bound thereby.
(b) Members of, or Participants in, the Depositary ("Agent Members")
shall have no rights under this Indenture with respect to any Global Note
held on their behalf by the Depositary or under any Global Note, and the
Depositary (including, for this purpose, its nominee) may be treated by
the Company, the Trustee and any agent of the Company or the Trustee as
the absolute owner and holder of such Global Note for all purposes
whatsoever. Notwithstanding the foregoing, nothing herein shall (i)
prevent the Company, the Trustee or any agent of the Company or the
Trustee from giving effect to any written certification, proxy or other
authorization furnished by the Depositary or (ii) impair, as between the
Depositary and its Agent Members, the operation of customary practices
governing the exercise of the rights of a holder of any Note.
Date and Denomination of Notes; Payments of Interest
The Notes shall be issuable in registered form without coupons in
denominations of One Thousand United States Dollars ($1,000) principal amount
and integral multiples thereof. Every Note shall be dated the date of its
authentication, and shall bear interest on the principal sum outstanding from
time to time under the Note, at the rate per annum specified in the title of the
form of Note attached as Exhibit A hereto, accrued from the date of issuance of
the Note and payable semi-annually on June 15 and December 15 of each year
(each, an "Interest Payment Date"), commencing December 15, 2004, as specified
on the face of the form of Note attached as Exhibit A hereto.
Interest on the Notes shall be deemed to have commenced accruing on June
10, 2004.
The Person in whose name any Note, or portion thereof (or its Predecessor
Note) is registered at the close of business on any record date with respect to
any Interest Payment Date (including any Note that is converted after the record
date and on or before the Interest Payment Date) shall be entitled to receive
the interest payable on such Interest Payment Date notwithstanding the
cancellation of such Note upon any transfer, exchange or conversion subsequent
to the record date and on or prior to such Interest Payment Date; provided that,
in the case of any Note, or portion thereof, called for redemption or converted
pursuant to Article III or
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Article XV on a redemption date or conversion date, as applicable, or
repurchased by the Company pursuant to Article XVI on a repurchase date, during
the period from the close of business on the record date to the close of
business on the Business Day next preceding the following Interest Payment Date,
interest shall not be paid to the Person in whose name the Note, or portion
thereof, is registered on the close of business on such record date, and the
Company shall have no obligation to pay interest on such Note or portion thereof
except to the extent required to be paid upon such redemption, conversion or
repurchase in accordance with Article III, Article XV or Article XVI. Interest
may, at the option of the Company, be paid by check mailed to the address of
such Person on the Note Register; provided that, with respect to any holder of
Notes with an aggregate principal amount equal to or in excess of Five Hundred
Thousand United States Dollars ($500,000), interest on such holder's Notes shall
be paid by wire transfer in immediately available funds to any bank located in
the United States in accordance with the wire transfer instruction supplied by
such holder from time to time to the Trustee and paying agent (if different from
Trustee) at least five (5) Business Days prior to the applicable record date.
The term "record date" with respect to any Interest Payment Date shall mean the
4th day of the month in which the Interest Payment Date shall occur, whether or
not such date is a Business Day. Interest on the Notes shall be computed on the
basis of a 360-day year comprised of twelve 30-day months. Any accrued and
unpaid interest which is not paid within five (5) Business Days of the Interest
Payment Date on which such payment of interest was due shall bear interest at
the rate of 12% per annum from such Interest Payment Date until the same is paid
in full (or, if less, the maximum interest rate then permitted by applicable
law) (the "Default Interest").
If the Company defaults in a payment of interest on the Notes, it shall
pay the defaulted interest in any lawful manner plus, to the extent lawful, the
Default Interest, to the Persons who are holders on a subsequent special record
date. The Company shall promptly notify the Trustee in writing of the amount of
defaulted interest proposed to be paid on each Note and the date of the proposed
payment. The Company shall fix or cause to be fixed each such special record
date and payment date, provided that no such special record date shall be less
than ten (10) days prior to the related payment date for such defaulted
interest. At least fifteen (15) days before the special record date, the Company
(or, upon the written request of the Company, the Trustee in the name and at the
expense of the Company) shall mail or cause to be mailed to holders a notice
that states the special record date, the related payment date and the amount of
such interest to be paid.
Section 2.3 Execution of Notes
The Notes shall be signed in the name and on behalf of the Company by the
facsimile signature of its President, its Chief Executive Officer, or any of its
Vice Presidents, and attested by the facsimile signature of its Chief Financial
Officer, Treasurer or its Assistant Treasurer, or Secretary or any of its
Assistant Secretaries (which may be printed, engraved or otherwise reproduced
thereon, by facsimile or otherwise). Only such Notes as shall bear thereon a
certificate of authentication substantially in the form set forth on the form of
Note attached as Exhibit A hereto, manually executed by the Trustee (or an
authenticating agent appointed by the Trustee as provided by Section 18.10),
shall be entitled to the benefits of this Indenture or be valid or obligatory
for any purpose. Such certificate by the Trustee (or such authenticating
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agent) upon any Note executed by the Company shall be conclusive evidence that
the Note so authenticated has been duly authenticated and delivered hereunder
and that the holder thereof is entitled to the benefits of this Indenture.
In case any officer of the Company who shall have signed any of the Notes
shall cease to be such officer before the Notes so signed shall have been
authenticated and delivered by the Trustee, or disposed of by the Company, such
Notes nevertheless may be authenticated and delivered or disposed of as though
the person who signed such Notes had not ceased to be such officer of the
Company; and any Note may be signed on behalf of the Company by such persons as,
at the actual date of the execution of such Note, shall be the proper officers
of the Company, although at the date of the execution of this Indenture any such
person was not such an officer.
Section 2.4 Exchange and Registration of Transfer of Notes; Restrictions
on Transfer
(a) Note Register. The Company shall cause to be kept at the
Corporate Trust Office a register (the register maintained in such office
and in any other office or agency of the Company designated pursuant to
Section 5.2 being herein sometimes collectively referred to as the "Note
Register") in which, subject to such reasonable regulations as it may
prescribe, the Company shall provide for the registration of Notes and of
transfers of Notes. Such register shall be in written form or in any form
capable of being converted into written form within a reasonable period of
time. The Trustee is hereby appointed "Note Registrar" for the purpose of
registering Notes and transfers of Notes as herein provided. The Company
may appoint one or more co-registrars in accordance with Section 5.2.
(b) Transfer and Exchange of Global Notes. A Global Note may not be
transferred as a whole except by the Depositary to a nominee of the
Depositary, by a nominee of the Depositary to the Depositary or to another
nominee of the Depositary, or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary. All Global
Notes will be exchanged by the Company for Definitive Notes if (i) the
Company delivers to the Trustee notice from the Depositary that it is
unwilling or unable to continue to act as Depositary or that it is no
longer a clearing agency registered under the Exchange Act and, in either
case, a successor Depositary is not appointed by the Company within 120
days after the date of such notice from the Depositary or (ii) the Company
in its sole discretion determines that the Global Notes (in whole but not
in part) should be exchanged for Definitive Notes and delivers a written
notice to such effect to the Trustee. Upon the occurrence of either of the
preceding events in (i) or (ii) above, Definitive Notes shall be issued in
such names as the Depositary shall instruct the Trustee. Global Notes also
may be exchanged or replaced, in whole or in part, as provided in Sections
2.6 and 2.7. Every Note authenticated and delivered in exchange for, or in
lieu of, a Global Note or any portion thereof, pursuant to this Section
2.5(b) or Section 2.6 or 2.7, shall be authenticated and delivered in the
form of, and shall be, a Global Note. A Global Note may not be exchanged
for another Note other than as provided in this Section 2.5(b), however,
beneficial interests in a Global Note may be transferred and exchanged as
provided in Section 2.5(c) or (d).
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(c) Transfer and Exchange of Beneficial Interests in the Global
Notes. The transfer and exchange of beneficial interests in the Global
Notes shall be effected through the Depositary, in accordance with the
provisions of this Indenture and the Applicable Procedures. Beneficial
interests in the Restricted Global Notes shall be subject to restrictions
on transfer comparable to those set forth herein to the extent required by
the Securities Act. Transfers of beneficial interests in the Global Notes
also shall require compliance with either subparagraph (i) or (ii) below,
as applicable, as well as one or more of the other following
subparagraphs, as applicable:
(i) Transfer of Beneficial Interests in the Same Global Note.
Beneficial interests in any Restricted Global Note may be
transferred to Persons who take delivery thereof in the form of a
beneficial interest in the same Restricted Global Note in accordance
with the transfer restrictions set forth in the Private Placement
Legend. Beneficial interests in any Unrestricted Global Note may be
transferred to Persons who take delivery thereof in the form of a
beneficial interest in an Unrestricted Global Note. No written
orders or instructions shall be required to be delivered to the Note
Registrar to effect the transfers described in this Section
2.5(c)(i).
(ii) All Other Transfers and Exchanges of Beneficial Interests
in Global Notes. In connection with all transfers and exchanges of
beneficial interests that are not subject to Section 2.5(c)(i)
above, the transferor of such beneficial interest must deliver to
the Note Registrar either (A) (1) a written order from a Participant
or an Indirect Participant given to the Depositary in accordance
with the Applicable Procedures directing the Depositary to credit or
cause to be credited a beneficial interest in another Global Note in
an amount equal to the beneficial interest to be transferred or
exchanged and (2) instructions given in accordance with the
Applicable Procedures containing information regarding the
Participant account to be credited with such increase or (B) (1) a
written order from a Participant or an Indirect Participant given to
the Depositary in accordance with the Applicable Procedures
directing the Depositary to cause to be issued a Definitive Note in
an amount equal to the beneficial interest to be transferred or
exchanged and (2) instructions given by the Depositary to the Note
Registrar containing information regarding the Person in whose name
such Definitive Note shall be registered to effect the transfer or
exchange referred to in (1) above. Upon satisfaction of all of the
requirements for transfer or exchange of beneficial interests in
Global Notes contained in this Indenture and the Notes or otherwise
applicable under the Securities Act, the Trustee shall adjust the
principal amount of the relevant Global Note(s) pursuant to Section
2.5(l).
(iii) Transfer of Beneficial Interests to Another Restricted
Global Note. A beneficial interest in any Restricted Global Note may
be transferred to a Person who takes delivery thereof in the form of
a beneficial interest in another Restricted Global Note if the
transfer complies with the requirements of Section 2.5(c)(ii) above
and the Note Registrar receives the following:
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(A) if the transferee will take delivery in the form of
a beneficial interest in the 144A Global Note, then the
transferor must deliver a certificate in the form of Exhibit D
hereto, including the certifications in item (1) thereof; and
(B) if the transferee will take delivery in the form of
a beneficial interest in the IAI Global Note, then the
transferor must deliver a certificate in the form of Exhibit D
hereto, including the certifications and certificates and
Opinion of Counsel required by item (2) thereof, if
applicable.
(iv) Transfer of Beneficial Interests in a Restricted Global
Note for Beneficial Interests in the Unrestricted Global Note. A
beneficial interest in any Restricted Global Note may be transferred
to a Person who takes delivery thereof in the form of a beneficial
interest in an Unrestricted Global Note if the transfer complies
with the requirements of Section 2.5(c)(ii) above and
(A) such transfer is effected pursuant to a registration
statement filed in accordance with the Registration Rights
Agreement; or
(B) the Note Registrar receives the following:
(1) if the holder of such beneficial interest in a
Restricted Global Note proposes to exchange such
beneficial interest for a beneficial interest in an
Unrestricted Global Note, a certificate from such holder
in the form of Exhibit E hereto, including the
certifications in item (1)(a) thereof; or
(2) if the holder of such beneficial interest in a
Restricted Global Note proposes to transfer such
beneficial interest to a Person who shall take delivery
thereof in the form of a beneficial interest in an
Unrestricted Global Note, a certificate from such holder
in the form of Exhibit D hereto, including the
certifications in item (3) thereof;
and, in each such case set forth in this subparagraph (B), if
the Note Registrar so requests or if the Applicable Procedures
so require, an Opinion of Counsel in form reasonably
acceptable to the Note Registrar to the effect that such
exchange or transfer is in compliance with the Securities Act
and that the restrictions on transfer contained herein and in
the Private Placement Legend are no longer required in order
to maintain compliance with the Securities Act.
If any such transfer is effected pursuant to subparagraph (B)
above at a time when an Unrestricted Global Note has not yet been
issued, the Company shall issue and, upon receipt of an
Authentication Order in accordance with Section 2.1, the Trustee
shall authenticate one or more Unrestricted Global Notes
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in an aggregate principal amount equal to the aggregate principal
amount of beneficial interests transferred pursuant to subparagraph
(B) above.
Beneficial interests in an Unrestricted Global Note cannot be
exchanged for, or transferred to Persons who take delivery thereof
in the form of, a beneficial interest in a Restricted Global Note.
(d) Transfer or Exchange of Beneficial Interests for
Definitive Notes.
(i) Beneficial Interests in Restricted Global Notes to
Restricted Definitive Notes. If any holder of a beneficial interest
in a Restricted Global Note proposes to exchange such beneficial
interest for a Restricted Definitive Note or to transfer such
beneficial interest to a Person who takes delivery thereof in the
form of a Restricted Definitive Note, then, upon receipt by the Note
Registrar of the following documentation:
(A) if the holder of such beneficial interest in a
Restricted Global Note proposes to exchange such beneficial
interest for a Restricted Definitive Note, a certificate from
such holder in the form of Exhibit E hereto, including the
certifications in item (2)(a) thereof;
(B) if such beneficial interest is being transferred to
a QIB in accordance with Rule 144A under the Securities Act, a
certificate to the effect set forth in Exhibit D hereto,
including the certifications in item (1) thereof;
(C) if such beneficial interest is being transferred
pursuant to an exemption from the registration requirements of
the Securities Act in accordance with Rule 144 under the
Securities Act, a certificate to the effect set forth in
Exhibit D hereto, including the certifications in item (2)(a)
thereof;
(D) if such beneficial interest is being transferred to
an Institutional Accredited Investor in reliance on an
exemption from the registration requirements of the Securities
Act other than those listed in subparagraphs (B) and (C)
above, a certificate to the effect set forth in Exhibit D
hereto, including the certifications, certificates and Opinion
of Counsel required by item (2) thereof, if applicable;
(E) if such beneficial interest is being transferred to
the Company or any of its Subsidiaries, a certificate to the
effect set forth in Exhibit D hereto, including the
certifications in item (2)(b) thereof; or
(F) if such beneficial interest is being transferred
pursuant to an effective registration statement under the
Securities Act, a certificate to the effect set forth in
Exhibit D hereto, including the certifications in item (2)(c)
thereof;
-17-
the Trustee shall cause the aggregate principal amount of the applicable
Global Note to be reduced accordingly pursuant to Section 2.5(l), and the
Company shall execute and the Trustee shall authenticate and deliver to
the Person designated in the instructions a Definitive Note in the
appropriate principal amount. Any Definitive Note issued in exchange for a
beneficial interest in a Restricted Global Note pursuant to this Section
2.5(d) shall be registered in such name or names and in such authorized
denomination or denominations as the holder of such beneficial interest
shall instruct the Note Registrar through instructions from the Depositary
and the Participant or Indirect Participant. The Trustee shall deliver
such Definitive Notes to the Persons in whose names such Notes are so
registered. Any Definitive Note issued in exchange for a beneficial
interest in a Restricted Global Note pursuant to this Section 2.5(d)(i)
shall bear the Private Placement Legend and shall be subject to all
restrictions on transfer contained therein.
(ii) Beneficial Interests in Restricted Global Notes to
Unrestricted Definitive Notes. A holder of a beneficial interest in
a Restricted Global Note may exchange such beneficial interest for
an Unrestricted Definitive Note or may transfer such beneficial
interest to a Person who takes delivery thereof in the form of an
Unrestricted Definitive Note only if:
(A) such transfer is effected pursuant to a registration
statement filed in accordance with the Registration Rights
Agreement; or
(B) the Note Registrar receives the following:
(1) if the holder of such beneficial interest in a
Restricted Global Notes proposes to exchange such
beneficial interest for an Unrestricted Definitive Note,
a certificate from such holder in the form of Exhibit E
hereto, including the certifications in item (1)(b)
thereof; or
(2) if the holder of such beneficial interest in a
Restricted Global Notes proposes to transfer such
beneficial interest to a Person who shall take delivery
thereof in the form of an Unrestricted Definitive Note,
a certificate from such holder in the form of Exhibit D
hereto, including the certifications in item (3)
thereof;
and, in each such case set forth in this subparagraph (B), if the
Note Registrar so requests or if the Applicable Procedures so
require, an Opinion of Counsel in form reasonably acceptable to the
Note Registrar to the effect that such exchange or transfer is in
compliance with the Securities Act and that the restrictions on
transfer contained herein and in the Private Placement Legend are no
longer required in order to maintain compliance with the Securities
Act.
(iii) Beneficial Interests in Unrestricted Global Notes to
Unrestricted Definitive Notes. If any holder of a beneficial
interest in an Unrestricted Global
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Note proposes to exchange such beneficial interest for an
Unrestricted Definitive Note or to transfer such beneficial interest
to a Person who takes delivery thereof in the form of an
Unrestricted Definitive Note, then, upon satisfaction of the
conditions set forth in Section 2.5(c)(ii), the Trustee shall cause
the aggregate principal amount of the applicable Global Note to be
reduced accordingly pursuant to Section 2.5(l), and the Company
shall execute and the Trustee shall authenticate and deliver to the
Person designated in the instructions an Unrestricted Definitive
Note in the appropriate principal amount. Any Definitive Note issued
in exchange for a beneficial interest pursuant to this Section
2.5(d)(iii) shall be registered in such name or names and in such
authorized denomination or denominations as the holder of such
beneficial interest shall instruct the Note Registrar through
instructions from the Depositary and the Participant or Indirect
Participant. The Trustee shall deliver such Unrestricted Definitive
Notes to the Persons in whose names such Notes are so registered.
Any Unrestricted Definitive Note issued in exchange for a beneficial
interest pursuant to this Section 2.5(d)(iii) shall not bear the
Private Placement Legend.
(e) Transfer and Exchange of Definitive Notes for Beneficial
Interests.
(i) Restricted Definitive Notes to Beneficial Interests in
Restricted Global Notes. If any holder of a Restricted Definitive
Note proposes to exchange such Note for a beneficial interest in a
Restricted Global Note or to transfer such Restricted Definitive
Notes to a Person who takes delivery thereof in the form of a
beneficial interest in a Restricted Global Note, then, upon receipt
by the Note Registrar of the following documentation:
(A) if the holder of such Restricted Definitive Note
proposes to exchange such Note for a beneficial interest in a
Restricted Global Note, a certificate from such holder in the
form of Exhibit E hereto, including the certifications in item
(2)(b) thereof;
(B) if such Restricted Definitive Note is being
transferred to a QIB in accordance with Rule 144A under the
Securities Act, a certificate to the effect set forth in
Exhibit D hereto, including the certifications in item (1)
thereof;
(C) if such Restricted Definitive Note is being
transferred pursuant to an exemption from the registration
requirements of the Securities Act in accordance with Rule 144
under the Securities Act, a certificate to the effect set
forth in Exhibit D hereto, including the certifications in
item (2)(a) thereof;
(D) if such Restricted Definitive Note is being
transferred to an Institutional Accredited Investor in
reliance on an exemption from the registration requirements of
the Securities Act other than those listed in subparagraphs
(B) and (C) above, a certificate to the effect set forth in
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Exhibit D hereto, including the certifications, certificates
and Opinion of Counsel required by item (2) thereof, if
applicable;
(E) if such Restricted Definitive Note is being
transferred to the Company or any of its Subsidiaries, a
certificate to the effect set forth in Exhibit D hereto,
including the certifications in item (2)(b) thereof; or
(F) if such Restricted Definitive Note is being
transferred pursuant to an effective registration statement
under the Securities Act, a certificate to the effect set
forth in Exhibit D hereto, including the certifications in
item (2)(c) thereof;
the Trustee shall cancel the Restricted Definitive Note, increase or
cause to be increased the aggregate principal amount of, in the case
of clause (A) above, the appropriate Restricted Global Note, in the
case of clause (B) above, the 144A Global Note, and in all other
cases, the IAI Global Note.
(ii) Restricted Definitive Notes to Beneficial Interests in
Unrestricted Global Notes. A holder of a Restricted Definitive Note
may exchange such Note for a beneficial interest in an Unrestricted
Global Note or transfer such Restricted Definitive Note to a Person
who takes delivery thereof in the form of a beneficial interest in
an Unrestricted Global Note only if:
(A) such transfer is effected pursuant to a registration
statement filed in accordance with the Registration Rights
Agreement; or
(B) the Note Registrar receives the following:
(1) if the holder of such Restricted Definitive
Notes proposes to exchange such Notes for a beneficial
interest in the Unrestricted Global Note, a certificate
from such holder in the form of Exhibit E hereto,
including the certifications in item (1)(c) thereof; or
(2) if the holder of such Restricted Definitive
Notes proposes to transfer such Notes to a Person who
shall take delivery thereof in the form of a beneficial
interest in the Unrestricted Global Note, a certificate
from such holder in the form of Exhibit D hereto,
including the certifications in item (3) thereof;
and, in each such case set forth in this subparagraph (B), if the
Note Registrar so requests or if the Applicable Procedures so
require, an Opinion of Counsel in form reasonably acceptable to the
Note Registrar to the effect that such exchange or transfer is in
compliance with the Securities Act and that the restrictions on
transfer contained herein and in the Private Placement Legend are no
longer required in order to maintain compliance with the Securities
Act.
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Upon satisfaction of the conditions of any of the subparagraphs in
this Section 2.5(e)(ii), the Trustee shall cancel the Restricted
Definitive Notes and increase or cause to be increased the aggregate
principal amount of the Unrestricted Global Note.
(iii) Unrestricted Definitive Notes to Beneficial Interests in
Unrestricted Global Notes. A holder of an Unrestricted Definitive
Note may exchange such Note for a beneficial interest in an
Unrestricted Global Note or transfer such Unrestricted Definitive
Notes to a Person who takes delivery thereof in the form of a
beneficial interest in an Unrestricted Global Note at any time. Upon
receipt of a request for such an exchange or transfer, the Trustee
shall cancel the applicable Unrestricted Definitive Note and
increase or cause to be increased the aggregate principal amount of
one of the Unrestricted Global Notes.
If any such exchange or transfer from an Unrestricted
Definitive Note to a beneficial interest is effected pursuant to
subparagraphs (ii)(A), (ii)(B) or (iii) above at a time when an
Unrestricted Global Note has not yet been issued, the Company shall
issue and, upon receipt of an Authentication Order in accordance
with Section 2.1, the Trustee shall authenticate one or more
Unrestricted Global Notes in an aggregate principal amount equal to
the principal amount of Unrestricted Definitive Notes so
transferred.
(f) Transfer and Exchange of Definitive Notes for Definitive Notes.
Upon request by a holder of Definitive Notes and such holder's compliance
with the provisions of this Section 2.5(f), the Note Registrar shall
register the transfer or exchange of Definitive Notes. Prior to such
registration of transfer or exchange, the requesting holder shall present
or surrender to the Note Registrar the Definitive Notes duly endorsed or
accompanied by a written instruction of transfer in form satisfactory to
the Note Registrar duly executed by such holder or by its attorney, duly
authorized in writing. In addition, the requesting holder shall provide
any additional certifications, documents and information, as applicable,
required pursuant to the following provisions of this Section 2.5(f).
(i) Restricted Definitive Notes to Restricted Definitive
Notes. Any Restricted Definitive Note may be transferred to and
registered in the name of Persons who take delivery thereof in the
form of a Restricted Definitive Note if the Note Registrar receives
the following:
(A) if the transfer will be made pursuant to Rule 144A
under the Securities Act, then the transferor must deliver a
certificate in the form of Exhibit D hereto, including the
certifications in item (1) thereof; and
(B) if the transfer will be made pursuant to any other
exemption from the registration requirements of the Securities
Act, then the transferor must deliver a certificate in the
form of Exhibit D hereto, including the
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certifications, certificates and Opinion of Counsel required
by item (2) thereof, if applicable.
(ii) Restricted Definitive Notes to Unrestricted Definitive
Notes. Any Restricted Definitive Note may be exchanged by the holder
thereof for an Unrestricted Definitive Note or transferred to a
Person or Persons who take delivery thereof in the form of an
Unrestricted Definitive Note if:
(A) any such transfer is effected pursuant to a
registration statement filed in accordance with the
Registration Rights Agreement; or
(B) the Note Registrar receives the following:
(1) if the holder of such Restricted Definitive
Notes proposes to exchange such Notes for an
Unrestricted Definitive Note, a certificate from such
holder in the form of Exhibit E hereto, including the
certifications in item (1)(d) thereof; or
(2) if the holder of such Restricted Definitive
Notes proposes to transfer such Notes to a Person who
shall take delivery thereof in the form of an
Unrestricted Definitive Note, a certificate from such
holder in the form of Exhibit D hereto, including the
certifications in item (3) thereof;
and, in each such case set forth in this subparagraph (B), if
the Note Registrar so requests, an Opinion of Counsel in form
reasonably acceptable to the Company to the effect that such
exchange or transfer is in compliance with the Securities Act
and that the restrictions on transfer contained herein and in
the Private Placement Legend are no longer required in order
to maintain compliance with the Securities Act.
(iii) Unrestricted Definitive Notes to Unrestricted Definitive
Notes. A holder of Unrestricted Definitive Notes may transfer such
Notes to a Person who takes delivery thereof in the form of an
Unrestricted Definitive Note. Upon receipt of a request to register
such a transfer, the Note Registrar shall register the Unrestricted
Definitive Notes pursuant to the instructions from the holder
thereof.
(g) General Provisions Relating to Transfers and Exchanges.
Upon surrender for registration of transfer of any Note to the Note
Registrar or any co-registrar, and satisfaction of the requirements for
such transfer set forth in this Section 2.5, the Company shall execute,
and the Trustee shall authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Notes of any
authorized denominations and of a like aggregate principal amount and
bearing such restrictive legends as may be required by this Indenture.
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No service charge shall be charged to the Noteholder for any
exchange or registration of transfer of Notes, but the Company may require
payment of a sum sufficient to cover any tax, assessments or other
governmental charges that may be imposed in connection therewith.
None of the Company, the Trustee, the Note Registrar or any
co-registrar shall be required to exchange or register a transfer of (a)
any Notes for a period of fifteen (15) days next preceding the mailing of
the notice of redemption or (b) any Notes called for redemption or, if a
portion of any Note is selected or called for redemption, such portion
thereof selected or called for redemption or (c) any Notes surrendered for
conversion or, if a portion of any Note is surrendered for conversion,
such portion thereof surrendered for conversion or (d) any Notes, or a
portion of any Note, surrendered for repurchase (and not withdrawn) in
connection with a Repurchase Event.
All Notes issued upon any transfer or exchange of 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 Notes surrendered upon such registration of transfer
or exchange.
Prior to due presentment for the registration of a transfer of any
Note, the Trustee, any agent and the Company may deem and treat the Person
in whose name any Note is registered as the absolute owner of such Note
for the purpose of receiving payment of principal of and interest on such
Notes and for all other purposes, and none of the Trustee, any agent or
the Company shall be affected by notice to the contrary.
The Trustee shall authenticate Global Notes and Definitive Notes in
accordance with the provisions of Section 2.1.
(h) Legends.
(i) Private Placement Legend on the Notes. Every Note that
bears or is required under this Section 2.5(h)(i) to bear the legend
set forth in this Section 2.5(h)(i) (together with any Common Stock
issued upon conversion of the Notes and required to bear the legend
set forth in Section 2.5(h)(ii), collectively, the "Restricted
Securities") shall be subject to the restrictions on transfer set
forth in this Section 2.5(h)(i) (including the legend set forth
below), unless such restrictions on transfer shall be waived by
written consent of the Company, and the holder of each such
Restricted Security, by such holder's acceptance thereof, agrees to
be bound by all such restrictions on transfer. As used in Sections
2.5(h)(i) and 2.5(h)(ii), the term "transfer" encompasses any sale,
transfer or other disposition (excluding any pledge unless or until
any foreclosure on such pledge) whatsoever of any Restricted
Security.
Subject to Section 5 of the Securities Purchase Agreement,
until two (2) years after the original issuance date of any Note,
any certificate evidencing such Note (and all securities issued in
exchange therefor or substitution thereof, other
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than Common Stock, if any, issued upon conversion thereof which
shall bear the legend set forth in Section 2.5(h)(ii), if
applicable) shall bear a legend in substantially the following form
(unless such Note has been transferred pursuant to a registration
statement that has been declared effective under the Securities Act
(and which continues to be effective at the time of such transfer),
or the Note has been transferred pursuant to the exemption from
registration provided by Rule 144 under the Securities Act, or
unless otherwise agreed by the Company in writing, with notice
thereof to the Trustee):
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT") OR APPLICABLE STATE SECURITIES LAWS. THIS SECURITY
MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES
UNDER THE SECURITIES ACT OR APPLICABLE STATE SECURITIES LAWS OR AN
EXEMPTION THEREFROM. THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH
A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY THIS SECURITY.
The Company may, but is not obligated to, instruct the Trustee
to place the following legend on any Note held by or transferred to
an "affiliate" (as defined in Rule 501(b) of Regulation D under the
Securities Act):
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE HELD BY A PERSON
WHO MAY BE DEEMED TO BE AN AFFILIATE OF THE ISSUER FOR PURPOSES OF
RULE 144 PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"), AND MAY BE SOLD ONLY IN COMPLIANCE WITH RULE
144, PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OR PURSUANT TO A VALID EXEMPTION FROM REGISTRATION
UNDER THE SECURITIES ACT. THE SECURITIES MAY BE PLEDGED IN
CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY
THE SECURITIES.
Any Note (or security issued in exchange or substitution
therefor) as to which such restrictions on transfer shall have
expired in accordance with their terms may, upon surrender of such
Note for exchange to the Note Registrar in accordance with the
provisions of this Section 2.5, be exchanged for a new Note or
Notes, of like tenor and aggregate principal amount, which shall not
bear the restrictive legend required by this Section 2.5(h)(i).
(ii) Private Placement Legend on Stock Certificate. Until two
(2) years after the original issuance date of any Note, any stock
certificate representing Common Stock issued upon conversion of such
Note shall bear a legend in substantially the following form (unless
such Common Stock has been
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transferred pursuant to a registration statement that has been
declared effective under the Securities Act (and which continues to
be effective at the time of such transfer), or the Notes from which
such Common Stock was converted were transferred pursuant to a
registration statement that has been declared effective under the
Securities Act and which was effective at the time of such transfer,
or the Common Stock has been transferred pursuant to an exemption
from registration provided by Rule 144 under the Securities Act, or
unless otherwise agreed by the Company in writing with written
notice thereof to the Trustee and any transfer agent for the Common
Stock):
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT") OR APPLICABLE STATE SECURITIES LAWS. THE
SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR
ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR
THE SECURITIES UNDER THE SECURITIES ACT OR APPLICABLE STATE
SECURITIES LAWS OR AN EXEMPTION THEREFROM. THE SECURITIES MAY BE
PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN
SECURED BY THE SECURITIES.
The Company may, but is not obligated to, instruct the
transfer agent for the Company's Common Stock to place the following
legend on any certificate evidencing shares of Common Stock held by
or transferred to an "affiliate" (as defined in Rule 501(b) of
Regulation D under the Securities Act) of the Company:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE HELD BY A PERSON
WHO MAY BE DEEMED TO BE AN AFFILIATE OF THE ISSUER FOR PURPOSES OF
RULE 144 PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"), AND MAY BE SOLD ONLY IN COMPLIANCE WITH RULE
144, PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OR PURSUANT TO A VALID EXEMPTION FROM REGISTRATION
UNDER THE SECURITIES ACT. THE SECURITIES MAY BE PLEDGED IN
CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY
THE SECURITIES.
Any such Common Stock as to which such restrictions on
transfer shall have expired in accordance with their terms may, upon
surrender of the certificates representing such shares of Common
Stock for exchange in accordance with the procedures of the transfer
agent for the Common Stock, be exchanged for a new certificate or
certificates for a like aggregate number of shares of Common Stock,
which shall not bear the restrictive legend required by this Section
2.5(h)(ii).
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(iii) Global Note Legend. Each Global Note shall bear a
legend in substantially the following form:
THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE
INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE
BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO
ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY
MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION
2.6 OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE EXCHANGED IN
WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.5(b) OF THE INDENTURE,
(III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR
CANCELLATION PURSUANT TO SECTION 2.8 OF THE INDENTURE AND (IV) THIS
GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE
PRIOR WRITTEN CONSENT OF THE COMPANY.
(i) Resale of Notes Purchased by the Company or an Affiliate. Any
Note or Common Stock issued upon the conversion or exchange of a Note
that, prior to the expiration of the holding period applicable to sales
thereof under Rule 144(k) under the Securities Act (or any successor
rule), is purchased or owned by the Company or any Affiliate thereof may
not be resold by the Company or such Affiliate unless registered under the
Securities Act or resold pursuant to an exemption from the registration
requirements of the Securities Act in a transaction that results in such
Notes or Common Stock, as the case may be, no longer being "restricted
securities" (as defined under Rule 144).
(j) Changes in Law. Notwithstanding any provision of Section 2.5 to
the contrary, in the event Rule 144(k) as promulgated under the Securities
Act (or any successor rule) is amended to change the two-year period under
Rule 144(k) (or the corresponding period under any successor rule), from
and after receipt by the Trustee of the Officer's Certificate and Opinion
of Counsel provided for in this Section 2.5(j), (i) each reference in
Section 2.5(h)(i) to "two (2) years" shall be deemed for all purposes
hereof to be references to such changed period, (ii) each reference in
Section 2.5(h)(ii) to "two (2) years" shall be deemed for all purposes
hereof to be references to such changed period and (iii) all corresponding
references in the Notes shall be deemed for all purposes hereof to be
references to such changed period, provided that such changes shall not
become effective if they are otherwise prohibited by, or would otherwise
cause a violation of, the then-applicable federal securities laws. As soon
as practicable after the Company has knowledge of the effectiveness of any
such amendment to change the two-year period under Rule 144(k) (or the
corresponding period under any successor rule), unless such changes would
otherwise be prohibited by, or would otherwise cause a violation of, the
then-applicable securities law, the Company shall provide to the Trustee
an Officer's Certificate and Opinion of Counsel informing the Trustee of
the effectiveness of such amendment and the effectiveness of the foregoing
changes to Sections 2.5(h)(i) and 2.5(h)(ii) and the Notes. The provisions
of this Section 2.5(j) will
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not be effective until such time as the Opinion of Counsel and Officer's
Certificate have been received by the Trustee hereunder. This Section
2.5(j) shall apply to successive amendments to Rule 144(k) (or any
successor rule) changing the holding period thereunder.
(k) Limitation on Trustee's Duties. The Trustee shall have no
obligation or duty to monitor, determine or inquire as to compliance with
any restrictions on transfer imposed under this Indenture or under
applicable law with respect to any transfer of any interest in any Note
other than to require delivery of such certificates and other
documentation or evidence as are expressly required by, and to do so if
and when expressly required by the terms of, this Indenture, and to
examine the same to determine substantial compliance as to form with the
express requirements hereof.
(l) Cancellation and/or Adjustment of Global Notes. At such time as
all beneficial interests in a particular Global Note have been exchanged
for Definitive Notes or a particular Global Note has been redeemed,
repurchased or canceled in whole and not in part, each such Global Note
shall be returned to or retained and canceled by the Trustee in accordance
with Section 2.8. At any time prior to such cancellation, if any
beneficial interest in a Global Note is exchanged for or transferred to a
Person who will take delivery thereof in the form of a beneficial interest
in another Global Note or for Definitive Notes, the principal amount of
Notes represented by such Global Note shall be reduced accordingly and an
endorsement shall be made on such Global Note by the Trustee or by the
Depositary at the direction of the Trustee to reflect such reduction; and
if the beneficial interest is being exchanged for or transferred to a
Person who will take delivery thereof in the form of a beneficial interest
in another Global Note, such other Global Note shall be increased
accordingly and an endorsement shall be made on such Global Note by the
Trustee or by the Depositary at the direction of the Trustee to reflect
such increase.
Section 2.5 Mutilated, Destroyed, Lost or Stolen Notes
In case any Note shall become mutilated or be destroyed, lost or stolen,
the Company in its discretion may execute, and upon its request the Trustee or
an authenticating agent appointed by the Trustee shall authenticate and deliver,
a new Note, bearing a number not contemporaneously outstanding, in exchange and
substitution for the mutilated Note, or in lieu of and in substitution for the
Note so destroyed, lost or stolen. In every case the applicant for a substituted
Note shall furnish to the Company, to the Trustee and, if applicable, to such
authenticating agent such security or indemnity as required by them to save each
of them harmless for any loss, liability, cost or expense caused by or connected
with such substitution, and, in every case of destruction, loss or theft, the
applicant shall also furnish to the Company, to the Trustee and, if applicable,
to such authenticating agent evidence to their reasonable satisfaction of the
destruction, loss or theft of such Note and of the ownership thereof.
The Trustee or such authenticating agent may authenticate any such
substituted 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 reasonably require. Upon the issuance of any
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substituted Note, the Company may require the payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in relation
thereto and any other expenses connected therewith. Once any substitute Note has
been issued pursuant to this Section 2.6, the original Note being replaced by
such substitute Note shall automatically be deemed canceled. In case any Note
which has matured or is about to mature or has been called for redemption or is
about to be converted into Common Stock shall become mutilated or be destroyed,
lost or stolen, the Company may, instead of issuing a substitute 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 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 such authenticating agent such
security or indemnity as will 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 reasonably
satisfactory to the Company, the Trustee and, if applicable, any paying agent or
conversion agent of the destruction, loss or theft of such Note and of the
ownership thereof.
Every substitute Note issued pursuant to the provisions of this Section
2.6 by virtue of the fact that any Note is destroyed, lost or stolen shall
constitute an additional contractual obligation of the Company, whether or not
the destroyed, lost or stolen Note shall be found at any time, and shall be
entitled to all the benefits of (but shall be subject to all the limitations set
forth in) this Indenture equally and proportionately with any and all other
Notes duly issued hereunder. To the extent permitted by law, all Notes shall be
held and owned upon the express condition that the foregoing provisions are
exclusive with respect to the replacement or payment or conversion of mutilated,
destroyed, lost or stolen Notes and shall preclude any and all other rights or
remedies notwithstanding any law or statute existing or hereafter enacted to the
contrary with respect to the replacement or payment or conversion of negotiable
instruments or other securities without their surrender.
Section 2.6 Temporary Notes
Pending the preparation of definitive Notes, the Company may execute and
the Trustee or an authenticating agent appointed by the Trustee shall, upon
written request of the Company, authenticate and deliver temporary Notes
(printed or lithographed). Temporary Notes shall be issuable in any authorized
denomination, and substantially in the form of the Global Notes or the
Definitive Notes, as the case may be, but with such omissions, insertions and
variations as may be appropriate for temporary Notes, all as may be determined
by the Company. Every such temporary Note shall be executed by the Company and
authenticated by the Trustee or such authenticating agent upon the same
conditions and in substantially the same manner, and with the same effect, as
the Definitive Notes or Global Notes. Without unreasonable delay the Company
will execute and deliver to the Trustee or such authenticating agent Definitive
Notes and Global Notes and thereupon any or all temporary Notes may be
surrendered in exchange for the applicable replacement Note, at each office or
agency maintained by the Company pursuant to Section 5.2 and the Trustee or such
authenticating agent shall authenticate and deliver in exchange for such
temporary Notes an equal aggregate principal amount of Definitive Notes or
Global Notes, as the case may be. Such exchange shall be made by the Company at
its own expense and without any charge therefor. Until so exchanged, the
temporary Notes shall in all
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respects be entitled to the same benefits and subject to the same limitations
under this Indenture as Definitive Notes or Global Notes, as the case may be,
authenticated and delivered hereunder.
Section 2.7 Cancellation of Notes Paid, Etc.
All Notes surrendered for the purpose of payment, redemption, repurchase,
conversion, exchange or registration of transfer, shall, if surrendered to the
Company or any paying agent or any Note Registrar or any conversion agent, be
surrendered to the Trustee and promptly canceled by it, or, if surrendered to
the Trustee, shall be promptly canceled by it, and no Notes shall be issued in
lieu thereof except as expressly permitted by any of the provisions of this
Indenture. Upon written instructions of the Company, the Trustee shall dispose
of canceled Notes in accordance with its customary procedures. If the Company
shall acquire any of the Notes, such acquisition shall not operate as a
redemption or satisfaction of the indebtedness represented by such Notes unless
and until the same are delivered to the Trustee for cancellation.
Section 2.8 CUSIP Numbers
The Company in issuing the Notes shall use "CUSIP" numbers and the Trustee
shall use "CUSIP" numbers in notices of redemption as a convenience to holders;
provided that any such notice may state that no representation is made as to the
correctness of such numbers either as printed on the Notes or as contained in
any notice of a redemption and that reliance may be placed only on the other
identification numbers printed on the Notes, and any such redemption shall not
be affected by any defect in or omission of such numbers. The Company will
promptly notify the Trustee of any change in the "CUSIP" numbers.
Section 2.10 Calculation of Original Issue Discount
The Company shall file with the Trustee promptly at the end of each
calendar year (i) a written notice specifying the amount of original issue
discount (including daily rates and accrual periods) accrued on the Notes as of
the end of such year and (ii) such other specific information relating to such
original issue discount as may then be relevant under the Internal Revenue Code
of 1986, as amended from time to time.
ARTICLE III
OPTIONAL REDEMPTION OF NOTES
Section 3.1 Redemption Price
From and after June 10, 2007, the Company may, at its option, redeem all
or any part of the Notes, upon notice as set forth in Section 3.2, and the
Company shall pay each holder of Notes redeemed a redemption price equal to the
principal amount of such Notes, plus accrued and unpaid interest thereon, if
any, to, but excluding, the date of redemption; provided that, to the extent
that the Shelf Registration Statement is required by the terms of the
Registration Rights Agreement to remain effective as of the date that notice of
redemption is provided in accordance with Section 3.2, the Shelf Registration
Statement is effective and available during
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the 30 day period prior to the giving of such notice and at all times from the
date of such notice until the redemption date.
Section 3.2 Notice of Redemption; Selection of Notes
In case the Company shall desire to exercise the right to redeem all or,
as the case may be, any part of the Notes pursuant to Section 3.1, it shall fix
a date for redemption, and it, or at its request (which must be received by the
Trustee at least ten (10) Business Days prior to the date the Trustee is
requested to give notice as described below unless a shorter period is agreed to
by the Trustee), the Trustee in the name of and at the expense of the Company,
shall mail or cause to be mailed a notice of such redemption at least thirty
(30) and not more than ninety (90) days prior to the date fixed for redemption
to the holders of Notes so to be redeemed as a whole or in part at their last
addresses as the same appear on the Note Register (provided that if the Company
shall give such notice, it shall also give such notice, and notice of the
aggregate amount of Notes to be redeemed, to the Trustee). Such notice shall be
irrevocable. Notice shall be mailed by first class mail. The notice if mailed in
the manner herein provided shall be conclusively presumed to have been duly
given, whether or not the holder receives such notice. In any case, failure to
give such notice by mail or any defect in the notice to the holder of any Note
designated for redemption as a whole or in part shall not affect the validity of
the proceedings for the redemption of any other Note.
Each such notice of redemption shall specify the aggregate principal
amount of Notes to be redeemed, the "CUSIP" number or numbers of such Notes, the
date fixed for redemption, the redemption price at which Notes are to be
redeemed, the place or places of payment, that payment will be made upon
presentation and surrender of such Notes, that interest accrued to, but
excluding, the date fixed for redemption will be paid as specified in said
notice, and that on and after said date interest thereon or on the portion
thereof to be redeemed will cease to accrue. Such notice shall also state the
current Conversion Price and the date on which the right to convert such Notes
or portions thereof into Common Stock will expire, which shall be the close of
business on the redemption date. If fewer than all the Notes are to be redeemed,
the notice of redemption shall identify the Notes to be redeemed. In case any
Note is to be redeemed in part only, the notice of redemption shall state the
portion of the principal amount thereof to be redeemed and shall state that on
and after the date fixed for redemption, upon surrender of such Note, a new Note
or Notes in principal amount equal to the unredeemed portion thereof will be
issued.
On or prior to the redemption date specified in the notice of redemption
given as provided in this Section, the Company will deposit with the Trustee or
with one or more paying agents (or, if the Company is acting as its own paying
agent, set aside, segregate and hold in trust as provided in Section 5.4) an
amount of money sufficient to redeem on the redemption date all the Notes (or
portions thereof) so called for redemption (other than those theretofore
surrendered for conversion into Common Stock) at the appropriate redemption
price, together with accrued interest to, but excluding, the date fixed for
redemption; provided that if such payment is made on the redemption date it must
be received by the Trustee or paying agent, as the case may be, by 1:00 p.m. New
York City time, on such date. If any Note called for redemption is converted
pursuant hereto, any money deposited with the Trustee or any paying agent or so
segregated and
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held in trust for the redemption of such Note shall be paid to the Company upon
its request, or, if then held by the Company shall be discharged from such
trust.
If fewer than all the Notes are to be redeemed, the Company will give the
Trustee written notice in the form of an Officer's Certificate not fewer than
forty-five (45) days (or such shorter period of time as may be acceptable to the
Trustee) prior to the redemption date as to the aggregate principal amount of
Notes to be redeemed, and the Company, or at its request, the Trustee in the
name of and at the expense of the Company, shall give the holders at least
thirty (30) days' notice in advance of the date fixed for redemption as to the
aggregate principal amount of Notes to be redeemed. If fewer than all the Notes
are to be redeemed, the Trustee shall select the Notes or portions thereof to be
redeemed (in principal amounts of One Thousand United States Dollars ($1,000) or
integral multiples thereof), on a pro rata basis or by lot. If any Note selected
for partial redemption is converted in part after such selection, the converted
portion of such Note shall be deemed (so far as is possible) to be the portion
to be selected for redemption. The Notes (or portions thereof) so selected shall
be deemed duly selected for redemption for all purposes hereof, notwithstanding
that any such Note is converted as a whole or in part before the mailing of the
notice of redemption.
Upon any redemption of less than all Notes, the Company and the Trustee
may (but need not) treat as outstanding any Notes surrendered for conversion
during the period of fifteen (15) days next preceding the mailing of a notice of
redemption and may (but need not) treat as not outstanding any Note
authenticated and delivered during such period in exchange for the unconverted
portion of any Note converted in part during such period.
Section 3.3 Payment of Notes Called for Redemption
If notice of redemption has been given as above provided, the Notes or
portion of Notes with respect to which such notice has been given shall, unless
converted into Common Stock pursuant to the terms hereof, become due and payable
on the date and at the place or places stated in such notice at the applicable
redemption price, and interest accrued to, but excluding, the date fixed for
redemption, and on and after said date (unless the Company shall default in the
payment of such Notes at the redemption price and interest accrued to, but
excluding, said date) interest on the Notes or portion of Notes so called for
redemption shall cease to accrue and such Notes shall cease at the close of
business on the date fixed for redemption to be convertible into Common Stock
and, except as provided in Sections 8.5 and 13.4, to be entitled to any benefit
or security under this Indenture, and the holders thereof shall have no right in
respect of such Notes except the right to receive the redemption price thereof
and unpaid interest to, but excluding, the date fixed for redemption. On
presentation and surrender of such Notes at a place of payment specified in said
notice, the said Notes or the specified portions thereof to be redeemed shall be
paid and redeemed by the Company at the applicable redemption price and interest
accrued thereon to, but excluding, the date fixed for redemption; provided that,
if the applicable redemption date is an Interest Payment Date, the semi-annual
payment of interest becoming due on such date shall be payable to the holders of
such Notes registered as such on the relevant record date subject to the terms
and provisions of Section 2.3.
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Upon presentation of any Note redeemed in part only, the Company shall
execute and the Trustee shall authenticate and deliver to the holder thereof, at
the expense of the Company, a new Note or Notes, of authorized denominations, in
principal amount equal to the unredeemed portion of the Notes so presented.
Notwithstanding the foregoing, the Trustee shall not redeem any Notes or
mail any notice of optional redemption during the continuance of a default in
payment of interest or premium on the Notes or of any Event of Default of which,
in the case of any Event of Default other than under Section 7.1(a), a
Responsible Officer of the Trustee has actual knowledge. If any Note called for
redemption shall not be so paid upon surrender thereof for redemption, the
principal and premium, if any, shall, until paid or duly provided for, bear
interest from the date fixed for redemption at the rate borne by the Note and
such Note shall remain convertible into Common Stock until the principal and
premium, if any, shall have been paid or duly provided for.
Section 3.4 Conversion Arrangement on Call for Redemption
In connection with any redemption of Notes, the Company may arrange for
the purchase and conversion of any Notes not converted prior to the expiration
of such conversion right by an agreement with one or more investment bankers or
other purchasers to purchase such Notes by paying to the Trustee in trust for
the Noteholders, on or before the date fixed for redemption, an amount not less
than the applicable redemption price and interest accrued to the date fixed for
redemption, of such Notes. Notwithstanding anything to the contrary contained in
this Article III, the obligation of the Company to pay the redemption price of
such Notes and interest accrued to, but excluding, the date fixed for
redemption, shall be deemed to be satisfied and discharged to the extent such
amount is so paid by such purchasers to such Noteholders. If such an agreement
is entered into, a copy of which, certified as true and correct by the Secretary
or Assistant Secretary of the Company will be filed with the Trustee prior to
the date fixed for redemption, any 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 XV) 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
Notes shall be deemed to have been extended through such time), subject to
payment of the above amount as aforesaid. At the written 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 Notes. Without the Trustee's prior written consent, no arrangement
between the Company and such purchasers for the purchase and conversion of any
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 Notes between the
Company and such purchasers, 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.
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ARTICLE IV
SUBORDINATION
Section 4.1 Subordination to Senior Indebtedness
The Company covenants and agrees, and each holder of a Note, by his or her
acceptance thereof, likewise covenants and agrees, that all Notes shall be
issued subject to the provisions of this Article IV and to the extent and in the
manner hereinafter set forth in this Article IV, the indebtedness represented by
the Notes and the payment of the principal amount, Conversion Price, and
interest thereon, Company Conversion Provisional Payment, Additional Conversion
Payment, redemption price for Notes called for redemption in accordance with
Section 3.2, the Repurchase Price and Additional Repurchase Payment, if any,
with respect to Notes submitted for repurchase in accordance with Section 16.1,
liquidated damages, fees, expenses or any other amounts in respect of each and
all of the Notes are hereby expressly made subordinate and junior and subject in
right of payment to the prior payment in full in cash of all Senior Indebtedness
of the Company now outstanding or hereinafter incurred. "Senior Indebtedness"
means the principal of, and premium, if any, and interest on, reimbursement
obligations, fees, costs and expenses in connection with and other amounts
accrued or due on or in connection with (i) all indebtedness of the Company for
monies borrowed, including, without limitation, (x) commercial paper and
accounts receivable sold or assigned by the Company, and (y) indebtedness
secured by a mortgage, security interest or other lien on an asset, that is (A)
existing on such asset at the time of its acquisition, or (B) given to secure
all or part of the purchase price of such asset, (ii) all obligations of the
Company evidenced by any notes, debentures, bonds or other instruments issued to
banks, trust companies, insurance companies, other financial institutions and
other entities that in the ordinary course of business make loans, (iii) all
obligations of the Company under any interest or currency swap agreements,
hedging agreements, cap, floor and collar agreements, spot and forward contracts
and other similar agreements, (iv) obligations in respect of letters of credit,
bank guarantees and bankers acceptances, (v) obligations of the Company as
lessee under leases of personal property (whether or not required to be
capitalized under GAAP), (vi) obligations secured by a mortgage, pledge,
security interest, lien or encumbrance affecting title to any of the Company's
assets, whether or not the Company is directly liable or has guaranteed such
obligations, (vii) obligations consisting of the balance of the deferred or
unpaid purchase price of assets, (viii) principal of, and interest on any
indebtedness or obligations of others of the kinds described in (i) through
(vii) above assumed or guaranteed in any manner by the Company, and (ix)
deferrals, renewals, increases, extensions, refinancings and refundings of, or
amendments, modifications, restatements or supplements to, any such indebtedness
or obligations described in (i) through (vii) above, in each case unless the
instrument creating or evidencing the same or pursuant to which the same is
outstanding expressly provides that the same is not senior in right of payment
to the Notes. Senior Indebtedness includes, with respect to the foregoing,
interest accruing on or after the filing of any petition in any bankruptcy or
similar proceeding or for reorganization relating to the Company, whether or not
post-filing interest is allowed in such proceeding. Notwithstanding the
foregoing, "Senior Indebtedness" with respect to any Note shall not include (a)
indebtedness of the Company evidenced by the other Notes, which shall rank
equally and ratably with such Note, (b) indebtedness of the Company to any
Subsidiary of the Company other than indebtedness
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arising by reason of guarantees by the Company of indebtedness of any such
subsidiary to a Person that is not such a Subsidiary, (c) any liability for
Federal, state, local or other taxes owed or owing by the Company, (d) any
accounts payable or other liability to trade creditors arising in the ordinary
course of business (including guarantees thereof or instruments evidencing such
liabilities), (e) any indebtedness or obligation of the Company (and any accrued
and unpaid interest in respect thereof) that by its terms is subordinate or
junior in right of payment to any other indebtedness or obligation of the
Company or (f) any obligation with respect to any shares, interest, rights to
purchase, warrants, options, participations or other equivalents of, or
interests in, the equity of the Company or any Subsidiary or Affiliate,
including any preferred stock or other preferred equity. For purposes of this
Section 4.1, all references to indebtedness or obligations of the Company shall
be deemed to include any such indebtedness or obligations of the Subsidiaries.
Section 4.2 No Payment if Default in Senior Indebtedness
No payment on account of principal of, premium, if any, or interest on the
Notes (including, but not limited to, the redemption price for Notes called for
redemption in accordance with Section 3.2, the Repurchase Price and Additional
Repurchase Payment, if any, with respect to Notes submitted for repurchase in
accordance with Section 16.1, the Conversion Price, the Company Conversion
Provisional Payment, Additional Conversion Payment and any other payment payable
with respect to the Notes pursuant to the provisions of this Indenture) shall be
made, and no Notes shall be redeemed or purchased directly or indirectly by the
Company (or any of its Subsidiaries), if at the time of such payment or purchase
or immediately after giving effect thereto, (i) a default in the payment of
principal, premium, if any, interest, rent or other obligations in respect of
any Senior Indebtedness occurs and is continuing (or, in the case of Senior
Indebtedness for which there is a period of grace, in the event of such a
default that continues beyond the period of grace, if any, specified in the
instrument or lease evidencing such Senior Indebtedness) (a "Payment Default"),
unless and until such Payment Default shall have been cured or waived or shall
have ceased to exist or (ii) the Company shall have received notice (a "Payment
Blockage Notice") from the holder or holders of Designated Senior Debt or their
Representative that there exists under such Designated Senior Debt a default,
which shall not have been cured or waived, permitting the holder or holders
thereof to declare such Designated Senior Debt due and payable, but only for the
period (the "Payment Blockage Period") commencing on the date of receipt of the
Payment Blockage Notice and ending on the earlier of (a) the date such default
shall have been cured or waived, or (b) the 180th day immediately following the
Company's receipt of such Payment Blockage Notice.
The Company shall resume payments on and distributions in respect of the
Notes, including any past scheduled payments of the principal of (and premium,
if any) and interest on such Notes to which the holders of the Notes would have
been entitled but for the provisions of this Section 4.2 in the case of a
Payment Default, on the date upon which such Payment Default is cured or waived
or ceases to exist. In addition, notwithstanding clauses (i) and (ii), unless
the holders of Designated Senior Debt shall have accelerated the maturity of
such Designated Senior Debt or there is a Payment Default, the Company shall
resume payments on the Note after the end of each Payment Blockage Period. Not
more than one Payment Blockage Notice may be
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given in any consecutive 360-day period, irrespective of the number of defaults
with respect to Designated Senior Debt during such period.
Section 4.3 Payment upon Dissolution, Etc.
(a) In the event of any bankruptcy, insolvency, reorganization,
receivership, composition, assignment for benefit of creditors or other
similar proceeding initiated by or against the Company or any dissolution
or winding up or total or partial liquidation or reorganization of the
Company (being hereinafter referred to as a "Proceeding"), each holder of
a Note, by his or her acceptance thereof, agrees that such holder shall,
upon request of a holder of Senior Indebtedness, and at such holder's own
expense take all reasonable actions (including but not limited to the
execution and filing of documents and the giving of testimony in any
Proceeding, whether or not such testimony could have been compelled by
process) necessary to prove the full amount of all their claims in any
Proceeding, and the Noteholders shall not waive any claim in any
Proceeding without the written consent of such holder. If the Trustee or
the holder of a Note does not file a proper proof of claim or proof of
debt in the form required in any proceeding referred to in this paragraph
(a) of Section 4.3 at least thirty (30) days before the expiration of the
time to file such claim, the holders of any Senior Indebtedness or their
Representatives are hereby authorized to file an appropriate claim for and
on behalf of the holders of the Notes.
(b) The Trustee and the holders of the Notes shall retain the right
to vote and otherwise act with respect to the claims under their Notes
(including, without limitation, the right to vote to accept or reject any
plan of partial or complete liquidation, reorganization, arrangement,
composition or extension); provided that the Trustee or any holder of the
Notes shall not vote with respect to any such plan or take any other
action in any way so as to (i) contest the validity of any Senior Facility
or any collateral therefor or guaranties thereof, (ii) contest the
relative rights and duties of any of the lenders under or the
Representatives of the Senior Facility established in any instruments or
agreement creating or evidencing the Senior Facility with respect to any
of such collateral or guaranties, or (iii) contest the Trustee's and the
holders' obligations and agreements set forth in this Section 4.3.
(c) Upon payment or distribution to creditors in a Proceeding of
assets of the Company of any kind or character, whether in cash, property
or securities, all principal and interest due upon any Senior Indebtedness
shall first be paid in full before any holders of the Notes shall be
entitled to receive or, if received, to retain any payment or distribution
on account of the Notes, and upon any such Proceeding, any payment or
distribution of assets of the Company of any kind or character, whether in
cash, property or securities, to which any holders of the Notes would be
entitled except for the provisions of this Article IV shall be paid by the
Company or by any receiver, trustee in bankruptcy, liquidating trustee,
agent or other Person making such payment or distribution, or by any
holders of the Notes who shall have received such payment or distribution,
directly to the holders of the Senior Indebtedness (pro rata to each such
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holder on the basis of the respective amounts of such Senior Indebtedness
held by such holder) or their Representatives to the extent necessary to
pay all such Senior Indebtedness in full after giving effect to any
concurrent payment or distribution to or for the holders of such Senior
Indebtedness, before any payment or distribution is made to any holders of
the Notes.
Section 4.4 Payments on Notes
Subject to Section 4.3, the Company may make regularly scheduled payments
of the principal of, and any interest or premium on, the Notes, if at the time
of payment, and immediately after giving effect thereto, (i) there exists no
Payment Default or Payment Blockage Period and (ii) the Company is permitted to
make payments under Section 4.3.
Section 4.5 Certain Conversions Deemed Payment
For the purposes of this Article IV only (a) the issuance and delivery of
junior securities upon conversion of Notes in accordance with Article XV shall
not be deemed to constitute a payment of distribution on account of the
principal of or interest on Notes or on account of the purchase or other
acquisition of Notes, and (b) the payment, issuance or delivery of cash (except
in satisfaction of fractional shares pursuant to Section 15.3), property or
securities (other than junior securities) upon conversion of a Note shall be
deemed to constitute payment on account of the principal of such Note. For the
purposes of this Section 4.5, the term "junior securities" means (i) shares of
any stock of any class of the Company, or (ii) securities of the Company which
are subordinated in right of payment to all Senior Indebtedness which may be
outstanding at the time of issuance or delivery of such securities to
substantially the same extent as, or to a greater extent than, the Notes are so
subordinated as provided in this Article IV. Nothing contained in this Article
IV or elsewhere in this Indenture or in the Notes is intended to or shall
impair, as among the Company, its creditors other than holders of Senior
Indebtedness and the holders, the right, which is absolute and unconditional, of
the holder of any Note to convert such Note in accordance with Article XV.
Section 4.6 Subrogation
Subject to payment in full in cash of all Senior Indebtedness, the rights
of the holders of the Notes (together with the holders of any other indebtedness
of the Company that is subordinated in right of payment to payment in full of
all Senior Indebtedness, that is not subordinated in right of payment to the
Notes, and that by its terms grants such right of subrogation to the holders
thereof) shall be subrogated to the rights of the holders of Senior Indebtedness
to receive payments or distributions of the assets of the Company made on such
Senior Indebtedness until all principal and interest on the Notes shall be paid
in full; and for purposes of such subrogation, no payments or distributions to
the holders of Senior Indebtedness of any cash, property or securities to which
any holders of the Notes would be entitled except for the subordination
provisions of this Article IV shall, as between the holders of the Notes and the
Company and/or its creditors other than the holders of the Senior Indebtedness,
be deemed to be a payment on account of the Senior Indebtedness.
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Section 4.7 Rights of Holders Unimpaired
The provisions of this Article IV are and are intended solely for the
purposes of defining the relative rights of the holders of the Notes and the
holders of Senior Indebtedness and nothing in this Article IV shall impair, as
between the Company and any holders of the Notes, the obligation of the Company,
which is unconditional and absolute, to pay to the holders of the Notes the
principal thereof (and premium, if any) and interest thereon, in accordance with
the terms of the Notes.
Section 4.8 Holders of Senior Indebtedness
These provisions regarding subordination will constitute a continuing
offer to all Persons who, in reliance upon such provisions, become holders of,
or continue to hold, Senior Indebtedness; such provisions are made for the
benefit of the holders of Senior Indebtedness, and such holders are hereby made
obligees under such provisions to the same extent as if they were named therein,
and they or any of them may proceed to enforce such subordination and no
amendment or modification of the provisions contained herein shall diminish the
rights of such holders unless such holders have agreed in writing thereto. The
holders of Senior Indebtedness may, at any time and from time to time, without
the consent of or notice to any of the Noteholders, without incurring
responsibility to the Noteholders and without impairing or releasing the
subordination provisions of this Article IV, (i) increase the amount of, change
the manner, terms or place of payment of, or renew or alter, any Senior
Indebtedness, or otherwise amend, modify, restate or supplement the same, (ii)
sell, exchange or release any collateral mortgaged, pledged or otherwise
securing the Senior Indebtedness, (iii) release any Person liable in any manner
for the Senior Indebtedness and (iv) exercise or refrain from exercising any
rights against the Company or any other Person.
Section 4.9 Trustee Not Fiduciary for Holders of Senior Indebtedness
The Trustee shall not be deemed to owe any fiduciary duty to the holders
of Senior Indebtedness and shall not be liable to any such holders if the
Trustee shall in good faith mistakenly pay over or distribute to holders of
Notes or to the Company or to any other person cash, property or securities to
which any holders of Senior Indebtedness shall be entitled by virtue of this
Article IV or otherwise. With respect to the holders of Senior Indebtedness, no
implied covenants or obligations with respect to holders of Senior Indebtedness
shall be read into this Indenture against the Trustee.
Section 4.10 Rights of Trustee as Holder of Senior Indebtedness;
Preservation of Trustee's Rights
The Trustee in its individual capacity shall be entitled to all the rights
set forth in this Article IV with respect to any Senior Indebtedness which may
at any time be held by it, to the same extent as any other holder of Senior
Indebtedness, and nothing in this Indenture shall deprive the Trustee of any of
its rights as such holder.
Nothing in this Article shall apply to claims of, or payments to, the
Trustee under or pursuant to Section 8.6.
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Section 4.11 Proceeds Held in Trust
In the event that notwithstanding the foregoing, any payment or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities (including, without limitation, by way of setoff or
otherwise) prohibited by the provisions of Section 4.2 or Section 4.3 shall be
received by the Trustee of the holders of the Notes before all Senior
Indebtedness is paid in full in cash, such payment or distribution shall be held
in trust for the benefit of and shall be paid over or delivered to the holders
of Senior Indebtedness or their Representative or Representatives, as their
respective interests may appear, as calculated by the Company, for application
to, or to be held as collateral for, the payment of any Senior Indebtedness
remaining unpaid to the extent necessary to pay all Senior Indebtedness in full
after giving effect to any concurrent payment or distribution to or for the
holders of such Senior Indebtedness.
Section 4.12 Blockage of Remedies.
During any Payment Default or any Payment Blockage Period, if an Event of
Default has occurred under this Indenture, neither the Trustee nor any of the
holders of the Notes will commence or join with any creditor of the Company or
any of its Subsidiaries in asserting or commencing any proceedings to collect or
enforce its rights hereunder or take any action to foreclose or realize upon the
indebtedness hereunder for a period beginning on the date of such Event of
Default and ending on the first to occur of (i) of the date that is 180 days
following the date of such Event of Default or (ii) the date such Payment
Default is cured, waived or ceases to exist or the date such Payment Blockage
Period ends, as the case may be.
Section 4.13 Prior Notice of Acceleration.
The holders of the Notes agree, solely for the benefit of the lenders
under the Senior Facility, not to declare the unpaid principal amount of any
Note to be due and payable pursuant to Section 7.1 unless the Representative of
the Senior Facility shall have received not less than five (5) Business Days'
prior written notice from the Company, the Trustee or any holder of the Notes of
such declaration of acceleration. The Company, forthwith upon receipt of any
such declaration of acceleration, shall send a copy thereof to the
Representative of the Senior Facility.
ARTICLE V
PARTICULAR COVENANTS OF THE COMPANY
Section 5.1 Payment of Principal, Premium and Interest
The Company covenants and agrees that it will duly and punctually pay or
cause to be paid the principal of and premium, if any, and interest on each of
the Notes at the places, at the respective times and in the manner provided
herein and in the Notes. Liquidated Damages paid pursuant to Section 15.2, if
any, shall be paid within ten (10) Business Days of the date from which such
liquidated damages accrued pursuant to Section 15.2. Liquidated Damages on the
Notes paid pursuant to Section 2(f) of the Registration Rights Agreement, if
any, shall be paid at the times and in the manner provided therein. Each
installment of interest on the Notes due on
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any semi-annual Interest Payment Date may be paid by mailing checks for the
interest payable to or upon the written order of the holders of Notes entitled
thereto as they shall appear on the Note Register, provided that, with respect
to any holder of Notes with an aggregate principal amount equal to or in excess
of Five Hundred Thousand United States Dollars ($500,000), interest on such
holder's Notes shall be paid by wire transfer in immediately available funds in
accordance with the wire transfer instructions supplied by such holder from time
to time to the Trustee and paying agent (if different from Trustee) at least
five (5) Business Days prior to the applicable record date.
Section 5.2 Maintenance of Office or Agency
The Company will maintain in Los Angeles, California, an office or agency
where the Notes may be presented for registration of transfer or exchange or for
presentation for payment or for conversion, redemption or repurchase and where
notices and demands to or upon the Company in respect of the Notes and this
Indenture may be served, which may be the Corporate Trust Office of the Trustee.
The Company will give prompt written notice to the Trustee of the location, and
any change in the location, of such office or agency not designated or appointed
by the Trustee. If at any time the Company shall fail to maintain any such
required office or agency or shall fail to furnish the Trustee with the address
thereof, such presentations, surrenders, notices and demands may be made or
served at the Corporate Trust Office of the Trustee.
The Company may also from time to time designate one or more other offices
or agencies where the Notes may be presented or surrendered for any or all such
purposes and may from time to time rescind such designations; provided that no
such designation or rescission shall in any manner relieve the Company of its
obligation to maintain an office or agency in Los Angeles, California, for such
purposes. The Company will give prompt written notice to the Trustee of any such
designation or rescission and of any change in the location of any such other
office or agency.
The Company hereby initially designates the Trustee as paying agent, Note
Registrar, Custodian and conversion agent and the office or agency of the
Trustee in Los Angeles, California (which initially shall be BNY Western Trust
Company, located at 000 X. Xxxxxx Xxxxxx - Xxxxx 000, Xxx Xxxxxxx, XX 00000,
Attention: Corporate Trust Administration, as one such office or agency of the
Company for each of the aforesaid purposes.
So long as the Trustee is the Note Registrar, the Trustee agrees to mail,
or cause to be mailed, the notices set forth in Section 8.10(a) and the third
paragraph of Section 8.11.
Appointments to Fill Vacancies in Trustee's Office
The Company, whenever necessary to avoid or fill a vacancy in the office
of Trustee, will appoint, in the manner provided in Section 8.10, a Trustee, so
that there shall at all times be a Trustee hereunder.
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Section 5.3 Provisions as to Paying Agent
(a) If the Company shall appoint a paying agent other than the
Trustee or if the Trustee shall appoint such a paying agent, it will cause
such paying agent to execute and deliver to the Trustee an instrument in
which such agent shall agree with the Trustee, subject to the provisions
of this Section 5.4:
(1) that it will hold all sums held by it as such agent for
the payment of the principal of and premium, if any, or interest
(including Liquidated Damages, if any) on the Notes (whether such
sums have been paid to it by the Company or by any other Person) in
trust for the benefit of the holders of the Notes;
(2) that it will give the Trustee notice of any failure by the
Company (or by any other Person) to make any payment of the
principal of and premium, if any, or interest (including Liquidated
Damages, if any) on the Notes when the same shall be due and
payable; and
(3) that at any time during the continuance of an Event of
Default, upon request of the Trustee, it will forthwith pay to the
Trustee all sums so held in trust.
The Company shall, on or before each due date of the principal of,
premium, if any, or interest on the Notes, deposit with the paying agent a
sum sufficient to pay such principal, premium, if any, or interest, and
(unless such paying agent is the Trustee) the Company will promptly notify
the Trustee of any failure to take such action, provided that if such
deposit is made on the due date, such deposit must be received by the
paying agent by 10:00 a.m., New York City time, on such date.
(b) If the Company shall act as its own paying agent, it will, on or
before each due date of the principal of, premium, if any, or interest
(including Liquidated Damages, if any) on the Notes, set aside, segregate
and hold in trust for the benefit of the holders of the Notes a sum
sufficient to pay such principal, premium, if any, or interest (including
Liquidated Damages, if any) so becoming due and will notify the Trustee of
any failure to take such action and of any failure by the Company (or any
other Person) to make any payment of the principal of, premium, if any, or
interest (including Liquidated Damages, if any) on the Notes when the same
shall become due and payable.
(c) Anything in this Section 5.4 to the contrary notwithstanding,
the Company may, at any time, for the purpose of obtaining a satisfaction
and discharge of this Indenture, or for any other reason, pay or cause to
be paid to the Trustee all sums held in trust by the Company or any paying
agent hereunder as required by this Section 5.4, such sums to be held by
the Trustee upon the trusts herein contained and upon such payment by the
Company or any paying agent to the Trustee, the Company or such paying
agent shall be released from all further liability with respect to such
sums.
(d) Anything in this Section 5.4 to the contrary notwithstanding,
the agreement to hold sums in trust as provided in this Section 5.4 is
subject to Sections 13.3 and 13.4.
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Section 5.4 Existence
Subject to Article XII, the Company will do or cause to be done all things
necessary to preserve and keep in full force and effect its corporate existence.
Section 5.5 Information Requirement
Within the period prior to the expiration of the holding period applicable
to sales thereof under Rule 144(k) under the Securities Act (or any successor
provision), the Company covenants and agrees that it shall, during any period in
which it is not subject to Section 13 or 15(d) under the Exchange Act, make
available to any holder or beneficial holder of Notes or any Common Stock issued
upon conversion thereof, in each case which continue to be Restricted
Securities, in connection with any sale thereof and any prospective purchaser of
Notes or such Common Stock from such holder or beneficial holder, the
information required pursuant to Rule 144A(d)(4) under the Securities Act upon
the request of any holder or beneficial holder of the Notes or such Common Stock
and it will take such further action as any holder or beneficial holder of such
Notes or such Common Stock may reasonably request in connection with
qualification of such sale for exemption from registration under Rule 144A.
Section 5.6 Stay, Extension and Usury Laws
The Company covenants (to the extent that it may lawfully do so) that it
shall not at any time insist upon, plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay, extension or usury law or other law
that would prohibit or forgive the Company from paying all or any portion of the
principal of or interest on the Notes as contemplated herein, wherever enacted,
now or at any time hereafter in force, or which may affect the covenants or the
performance of this Indenture; and the Company (to the extent it may lawfully do
so) hereby expressly waives all benefit or advantage of any such law, and
covenants that it will not, by resort to any such law, hinder, delay or impede
the execution of any 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 5.7 Compliance Certificate
The Company shall deliver to the Trustee within one hundred twenty (120)
days after the end of each fiscal year of the Company (beginning with the fiscal
year ending on December 31, 2004) an Officer's Certificate, signed by the
principal executive, principal financial officer or principal accounting officer
of the Company, stating whether or not to the best of such person's knowledge
the signers know of any default or Event of Default that occurred during such
period. Such Officer's Certificate shall describe in reasonable detail the
default or Event of Default, if any, and its status.
The Company shall deliver to the Trustee, as soon as possible and in any
event within three (3) Business Days after the Company becomes aware of the
occurrence of any Event of Default or an event which, with notice or the lapse
of time or both, would constitute an Event of Default, an Officer's Certificate
setting forth the details of such Event of Default or default and the action
which the Company proposes to take with respect thereto.
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Section 5.8 Further Instruments and Acts
Upon request of the Trustee, the Company will execute and deliver such
further instruments and do such further acts as may be reasonably necessary or
proper to carry out more effectively the purposes of this Indenture.
.
ARTICLE VI
NOTEHOLDERS' LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE
Section 6.1 Noteholders Lists
The Company covenants and agrees that it will furnish or cause to be
furnished to the Trustee, semi-annually, not more than fifteen (15) days after
each June 1 and December 1 in each year beginning with December 1, 2004 and at
such other times as the Trustee may request in writing, within thirty (30) days
after receipt by the Company of any such request (or such lesser time as the
Trustee may reasonably request in order to enable it to timely provide any
notice to be provided by it hereunder), a list in such form as the Trustee may
reasonably require of the names and addresses of the holders of Notes as of a
date not more than fifteen (15) days (or such other date as the Trustee may
reasonably request in order to so provide any such notices) prior to the time
such information is furnished, except that no such list need be furnished so
long as the Trustee is acting as Note Registrar.
Section 6.2 Preservation and Disclosure of Lists
(a) The Trustee shall preserve, in as current a form as is
reasonably practicable, all information as to the names and addresses of the
holders of Notes contained in the most recent list furnished to it as provided
in Section 6.1 or maintained by the Trustee in its capacity as Note Registrar,
if so acting. The Trustee may destroy any list furnished to it as provided in
Section 6.1 upon receipt of a new list so furnished.
(b) The rights of Noteholders to communicate with other holders of
Notes with respect to their rights under this Indenture or under the Notes and
the corresponding rights and duties of the Trustee, shall be as provided by the
Trust Indenture Act.
(c) Every Noteholder, by receiving and holding the same, agrees with
the Company and the Trustee that neither the Company nor the Trustee nor any
agent of either of them shall be held accountable by reason of any disclosure of
information as to names and addresses of holders of Notes made pursuant to the
Trust Indenture Act.
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Section 6.3 Reports by Trustee
(a) After this Indenture has been qualified under the Trust
Indenture Act, the Trustee shall transmit to holders of Notes such reports
concerning the Trustee and its actions under this Indenture as may be required
pursuant to the Trust Indenture Act at the times and in the manner provided
pursuant thereto. If required by Section 313(a) of the Trust Indenture Act, the
Trustee shall, within sixty (60) days after each May 15 following the date of
this Indenture deliver to holders a brief report, dated as of such May 15 which
complies with the provisions of such Section 313(a).
(b) A copy of such report shall, at the time of such transmission to
holders of Notes, be filed by the Trustee with each stock exchange and automated
quotation system upon which the Notes are listed, if any, and with the Company.
The Company will promptly notify the Trustee as soon as practicable when the
Notes are listed on any stock exchange or automated quotation system and when
any such listing is discontinued.
Section 6.4 Reports by Company
(a) After this Indenture has been qualified under the Trust
Indenture Act, the Company shall file with the Trustee and the Commission, and
transmit to holders of Notes, such information, documents and other reports and
such summaries thereof, as may be required pursuant to the Trust Indenture Act
at the times and in the manner provided pursuant to such Act; provided that any
such information, documents or reports required to be filed with the Commission
pursuant to Section 13 or 15(d) of the Exchange Act shall be filed with the
Trustee within fifteen (15) days after the same is so required to be filed with
the Commission.
(b) During any period in which the Company is not subject to Section
13 or 15(d) under the Exchange Act, the Company will deliver to the Trustee (a)
as soon as available and in any event within ninety (90) days after the end of
each fiscal year of the Company (i) a consolidated balance sheet of the Company
and its Subsidiaries as of the end of such fiscal year and the related
consolidated statements of operations, shareholders' equity and cash flows for
such fiscal year, all reported on by an independent public accountant of
nationally recognized standing and (ii) a report containing a management's
discussion and analysis of the financial condition and results of operations and
a description of the business and properties of the Company and (b) as soon as
available and in any event within forty-five (45) days after the end of each of
the first three quarters of each fiscal year of the Company (i) an unaudited
consolidated balance sheet of the Company and its Subsidiaries as of the end of
such fiscal quarter and the related consolidated statements of operations,
shareholders' equity and cash flows for such fiscal quarter and (ii) a report
containing a management's discussion and analysis of the financial condition and
results of operations of the Company for such quarter; provided that the
foregoing statements and reports shall not be required for any fiscal year or
quarter, as the case may be, with respect to which the Company files or expects
to file with the Trustee an annual report or quarterly report, as the case may
be, pursuant to the preceding paragraph of this Section 6.4. Delivery of such
reports, information and documents to the Trustee is for informational purposes
only and the Trustee's receipt of such shall not constitute constructive notice
of any information contained therein or determinable from information contained
therein,
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including the Company's compliance with any of its covenants hereunder (as to
which the Trustee is entitled to rely exclusively on Officer's Certificates).
ARTICLE VII
DEFAULTS AND REMEDIES
Section 7.1 Events of Default
In case one or more of the following Events of Default (whatever the
reason for such Event of Default and whether it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body) shall have occurred and be continuing:
(a) the Company shall default in the payment when due of (i) any
installment of interest or Liquidated Damages as provided in Section 15.2
upon any of the Notes, and such default shall continue for thirty (30)
calendar days after the due date thereof, (ii) the principal of and
premium (including, without limitation, the Additional Conversion Payment
or Company Conversion Provisional Payment), if any, on any of the Notes
either at maturity or in connection with any conversion, redemption, by
declaration or otherwise, or (iii) the Repurchase Price and Additional
Repurchase Amount, if any, in respect of any Note on the repurchase date
therefor in accordance with the provisions of Article XVI; or
(b) failure on the part of the Company duly to observe or perform
any other of the covenants on the part of the Company in the Notes or in
this Indenture (other than default in performance of a covenant that is
specifically dealt with elsewhere in this Section) including, without
limitation, (i) failure by the Company to deliver shares of Common Stock
required to be delivered upon conversion of a Note in accordance with
Article XV within thirty (30) Business Days of such Conversion Date, or
(ii) failure on the part of the Company to provide a written notice of a
Repurchase Event in accordance with Section 16.2, and the continuance of
such failure for a period of thirty (30) days after the date on which
written notice of such failure, requiring the Company to remedy the same,
shall have been given to the Company by the Trustee, or to the Company and
a Responsible Officer of the Trustee by the holders of not less than 20%
in aggregate principal amount of the outstanding Notes at the time
outstanding determined in accordance with Section 9.4; or
(c) failure on the part of the Company or any Subsidiary to make any
payment at maturity, including any applicable grace period, in respect of
indebtedness of, or guaranteed or assumed by, the Company or any
Subsidiary, in a principal amount then outstanding in excess of Two
Million United States Dollars ($2,000,000), and the continuance of such
failure for a period of fifteen (15) days after there shall have been
given, by registered or certified mail, to the Company by the Trustee
(provided, however, that the Trustee will not be deemed to have knowledge
of such nonpayment unless either
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(1) a Responsible Officer of the Trustee has actual knowledge of such
nonpayment or (2) the Trustee has received written notice thereof from the
Company, from any holder of the Notes, from the holder of any such
indebtedness or from the trustee under the agreement or instrument
relating to such indebtedness) or to the Company and a Responsible Officer
of the Trustee by the holders of not less than 20% in aggregate principal
amount of the Notes then outstanding, a written notice specifying such
default and requiring the Company to cause such default to be cured or
waived and stating that such notice is a "Notice of Default" hereunder; or
(d) default on the part of the Company or any Subsidiary with
respect to any Indebtedness of, or guaranteed or assumed by, the Company
or any Subsidiary, which default results in the acceleration of
indebtedness in a principal amount then outstanding in excess of Two
Million United States Dollars ($2,000,000), and such indebtedness shall
not have been discharged or such acceleration shall not have been
rescinded or annulled for a period of fifteen (15) days after there shall
have been given, by registered or certified mail, to the Company by the
Trustee (provided, however, that the Trustee will not be deemed to have
knowledge of such default unless either (1) a Responsible Officer of the
Trustee has actual knowledge of such default or (2) the Trustee has
received written notice thereof from the Company, from any holder of the
Notes, from the holder of any such Indebtedness or from the trustee under
the agreement or instrument relating to such Indebtedness) or to the
Company and a Responsible Officer of the Trustee by the holders of not
less than 20% in aggregate principal amount of the Notes then outstanding,
a written notice specifying such default and requiring the Company to
cause such indebtedness to be discharged or cause such default to be cured
or waived or such acceleration to be rescinded or annulled and stating
that such notice is a "Notice of Default" hereunder; provided, however,
that for a period of five (5) Business Days following the Closing Date (as
defined in the Securities Purchase Agreement), this section shall not
apply with respect to the default under the Junior Facility (and related
cross default under the Senior Facility) as disclosed in the Securities
Purchase Agreement that is one of the Transaction Documents; or
(e) the Company or any Subsidiary shall commence a voluntary case or
other proceeding seeking liquidation, reorganization or other relief with
respect to itself or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect or seeking the appointment of a
trustee, receiver, liquidator, custodian or other similar official of it
or any substantial part of its property, or shall consent to any such
relief or to the appointment of or taking possession by any such official
in an involuntary case or other proceeding commenced against it, or shall
make a general assignment for the benefit of creditors, or shall fail
generally to pay its debts as they become due; or
(f) an involuntary case or other proceeding shall be commenced
against the Company or any Subsidiary seeking liquidation, reorganization
or other relief with respect to it or its debts under any bankruptcy,
insolvency or other similar law now or hereafter in effect or seeking the
appointment of a trustee, receiver, liquidator, custodian or other similar
official of it or any substantial part of its property, and such
involuntary
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case or other proceeding shall remain undismissed and unstayed for a
period of sixty (60) consecutive days; or
(g) any of the representations or warranties made by the Company
herein or in the Transaction Documents shall be false or misleading in any
material respect at the time made and such condition (to the extent
capable of being cured) shall continue uncured for a period of ten (10)
Business Days after there shall have been given, by registered or
certified mail, to the Company and a Responsible Officer of the Trustee by
the holders of not less than 20% in aggregate principal amount of the
Notes then outstanding, a written notice specifying such default and
requiring the Company to cause such default to be cured or waived and
stating that such notice is a "Notice of Default" hereunder; or
(h) the Company shall fail to duly observe or perform any of the
covenants on the part of the Company in the Transaction Documents (other
than the Notes and this Indenture), and such failure shall continue for
thirty (30) days after there shall have been given, by registered or
certified mail, to the Company and a Responsible Officer of the Trustee by
the holders of not less than 20% in aggregate principal amount of the
Notes then outstanding, a written notice specifying such default and
requiring the Company to cause such default to be cured or waived and
stating that such notice is a "Notice of Default" hereunder; or
(i) unless all the Collateral has been released from the Second
Priority Liens in accordance with the provisions of the Security
Documents, default by the Company or AII In the performance of the
Security Documents, or the occurrence of any event, which adversely
affects the enforceability, validity, perfection or priority of the Second
Priority Lien on a material portion of the Collateral granted to the
Collateral Agent for the benefit of the Trustee and the Holders, the
repudiation or disaffirmation by the Company or AII of its material
obligations under the Security Documents or the determination in a
judicial proceeding that the Security Documents are unenforceable or
invalid against the Company or AII for any reason with respect to a
material portion of the Collateral (which default, repudiation,
disaffirmation or determination is not rescinded, stayed or waived by the
Persons having such authority pursuant to the Security Documents or
otherwise cured within 60 days after there shall have been given, by
registered or certified mail, to the Company by the Trustee or to the
Company and the Trustee by the holders of not less than 20% in aggregate
principal amount of the Notes then outstanding, a written notice
specifying such occurrence and requiring the Company to cause such default
to be cured or waived and stating that such notice is a "Notice of
Default" hereunder.
then, and in each and every such case (other than an Event of Default specified
in Section 7.1(e) or (f) with respect to the Company), unless the principal of
all of the Notes shall have already become due and payable, and unless the Event
of Default shall have been waived in writing in accordance with the provisions
of Section 7.7, either the Trustee or the holders of not less than 20% in
aggregate principal amount of the Notes then outstanding hereunder determined in
accordance with Section 9.4, by notice in writing to the Company (and to the
Trustee if given by Noteholders), may declare the principal of and premium, if
any, on all the Notes and the interest accrued thereon (including Liquidated
Damages to the extent accrued and unpaid) to be due and
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payable immediately, and upon any such declaration the same shall become and
shall be immediately due and payable, anything in this Indenture or in the Notes
contained to the contrary notwithstanding. If an Event of Default specified in
Section 7.1(e) or (f) occurs and is continuing with respect to the Company, the
principal of all the Notes and the interest accrued thereon (including
Liquidated Damages to the extent accrued and unpaid) shall be immediately due
and payable. In addition to the foregoing, upon an Event of Default, the rate of
interest on the Notes shall, be increased by five percent (5%) per annum (i.e.,
from 4.5% to 9.5% per annum), or if less, increased to the maximum interest rate
then permitted by applicable law. Any such interest which is not paid when due
shall, to the maximum extent permitted by law, accrue interest until paid at the
rate from time to time applicable to the interest on the Notes. Notwithstanding
the foregoing if, at any time after the principal of the Notes shall have been
so declared due and payable, and before any judgment or decree for the payment
of the monies due shall have been obtained or entered as hereinafter provided,
the Company shall pay or shall deposit with the Trustee a sum sufficient to pay
all matured installments of interest upon all Notes and the principal of and
premium, if any, on any and all Notes which shall have become due otherwise than
by acceleration (with interest on overdue installments of interest (to the
extent that payment of such interest is enforceable under applicable law) and on
such principal and premium, if any, at the rate borne by the Notes, to the date
of such payment or deposit) and amounts due to the Trustee pursuant to Section
8.6, and if any and all defaults under this Indenture, other than the nonpayment
of principal of and premium, if any, and accrued interest on Notes which shall
have become due by acceleration, shall have been cured or waived pursuant to
Section 7.7, then and in every such case the holders of a majority in aggregate
principal amount of the Notes then outstanding, by written notice to the Company
and to the Trustee, may waive all defaults or Events of Default and rescind and
annul such acceleration and its consequences; but no such waiver or rescission
and annulment shall extend to or shall affect any subsequent default or Event of
Default, or shall impair any right consequent thereon. The Company shall notify
the Responsible Officer of the Trustee, within three (3) Business Days of
becoming aware thereof, of any default or Event of Default and shall deliver to
the Trustee a statement specifying such default or Event of Default and the
action the Company has taken, is taking or proposes to take with respect
thereto.
In case the Trustee shall have proceeded to enforce any right under this
Indenture and such proceedings shall have been discontinued or abandoned because
of such waiver or rescission and annulment or for any other reason or shall have
been determined adversely to the Trustee, then and in every such case the
Company, the holders of Notes, and the Trustee shall be restored respectively to
their several positions and rights hereunder, and all rights, remedies and
powers of the Company, the holders of Notes, and the Trustee shall continue as
though no such proceeding had been instituted.
Section 7.2 Payments of Notes on Default; Suit Therefor
The Company covenants that (a) in case default shall be made in the
payment by the Company of any installment of interest upon any of the Notes as
and when the same shall become due and payable, and such default shall have
continued for a period of thirty (30) days, or (b) in case default shall be made
in the payment of the principal of or premium, if any, on any of the Notes as
and when the same shall have become due and payable, whether at maturity of
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the Notes or in connection with any redemption or repurchase, by declaration
under this Indenture or otherwise, then, upon demand of the Trustee, the Company
will pay to the Trustee, for the benefit of the holders of the Notes, the whole
amount that then shall have become due and payable on all such Notes for
principal and premium, if any, or interest, or both, as the case may be, with
interest upon the overdue principal and premium, if any, and (to the extent that
payment of such interest is enforceable under applicable law) upon the overdue
installments of interest at the rate borne by the Notes; and, in addition
thereto, such further amount as shall be sufficient to cover the costs and
expenses of collection, including reasonable compensation to the Trustee, its
agents, attorneys and counsel, and any expenses or liabilities incurred by the
Trustee hereunder other than through its negligence or bad faith. Until such
demand by the Trustee, the Company may pay the principal of and premium, if any,
and interest on the Notes to the registered holders, whether or not the Notes
are overdue.
In case the Company shall fail forthwith to pay such amounts upon such
demand, the Trustee, in its own name and as trustee of an express trust, shall
be entitled and empowered to institute any actions or proceedings at law or in
equity for the collection of the sums so due and unpaid, and may prosecute any
such action or proceeding to judgment or final decree, and may enforce any such
judgment or final decree against the Company or any other obligor on the Notes
and collect in the manner provided by law out of the property of the Company or
any other obligor on the Notes wherever situated the monies adjudged or decreed
to be payable.
In case there shall be pending proceedings for the bankruptcy or for the
reorganization of the Company or any other obligor on the Notes under Title 11
of the United States Code, or any other applicable law, or in case a receiver,
assignee or trustee in bankruptcy or reorganization, liquidator, sequestrator or
similar official shall have been appointed for or taken possession of the
Company or such other obligor, the property of the Company or such other
obligor, the Trustee, irrespective of whether the principal of the Notes shall
then be due and payable as therein expressed or by declaration or otherwise and
irrespective of whether the Trustee shall have made any demand pursuant to the
provisions of this Section 7.2, shall be entitled and empowered, by intervention
in such proceedings or otherwise, to file and prove a claim or claims for the
whole amount of principal, premium, if any, and interest (including Liquidated
Damages, if any) owing and unpaid in respect of the Notes, and, in case of any
judicial proceedings, to file such proofs of claim and other papers or documents
and to take such other actions as it may deem necessary or advisable in order to
have the claims of the Trustee and of the Noteholders allowed in such judicial
proceedings relative to the Company or any other obligor on the Notes, its or
their creditors, or its or their property, and to collect and receive any monies
or other property payable or deliverable on any such claims, and to distribute
the same after the deduction of any amounts due the Trustee under Section 8.6;
and any receiver, assignee or trustee in bankruptcy or reorganization,
liquidator, custodian or similar official is hereby authorized by each of the
Noteholders to make such payments to the Trustee, and, in the event that the
Trustee shall consent to the making of such payments directly to the
Noteholders, to pay to the Trustee any amount due it for reasonable
compensation, expenses, advances and disbursements, including agents and counsel
fees incurred by it up to the date of such distribution. To the extent that such
payment of reasonable compensation, expenses, advances and disbursements out of
the estate in any such proceedings shall be denied for any reason, payment of
the same shall be secured by a lien on, and shall be paid out of, any and all
distributions, dividends, monies,
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securities and other property which the holders of the Notes may be entitled to
receive in such proceedings, whether in liquidation or under any plan of
reorganization or arrangement or otherwise.
All rights of action and of asserting claims under this Indenture, or
under any of the Notes, may be enforced by the Trustee without the possession of
any of the Notes, or the production thereof on any trial or other proceeding
relative thereto, and any such suit or proceeding instituted by the Trustee
shall be brought in its own name as trustee of an express trust, and any
recovery of judgment shall, after provision for the payment of the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, be for the ratable benefit of the holders of the Notes.
In any proceedings brought by the Trustee (and in any proceedings
involving the interpretation of any provision of this Indenture to which the
Trustee shall be a party) the Trustee shall be held to represent all the holders
of the Notes, and it shall not be necessary to make any holders of the Notes
parties to any such proceedings.
Section 7.3 Application of Monies Collected by Trustee
Any monies collected by the Trustee pursuant to this Article VII shall be
applied in the following order, at the date or dates fixed by the Trustee for
the distribution of such monies, upon presentation of the several Notes, and
stamping thereon the payment, if only partially paid, and upon surrender
thereof, if fully paid:
First: To the payment of all amounts due the Trustee under Section
8.6;
Second: To the payment of all Senior Indebtedness to the extent
required by Article IV;
Third: In case the principal of the outstanding Notes shall not have
become due and be unpaid, to the payment of interest on the Notes in
default in the order of the maturity of the installments of such interest,
with interest (to the extent that such interest has been collected by the
Trustee) upon the overdue installments of interest at the rate borne by
the Notes, such payments to be made ratably to the Persons entitled
thereto;
Fourth: In case the principal of the outstanding Notes shall have
become due, by declaration or otherwise, and be unpaid, to the payment of
the whole amount then owing and unpaid upon the Notes for principal and
premium, if any, and interest, with interest on the overdue principal and
premium, if any, and (to the extent that such interest has been collected
by the Trustee) upon overdue installments of interest at the rate borne by
the Notes; and in case such monies shall be insufficient to pay in full
the whole amounts so due and unpaid upon the Notes, then to the payment of
such principal and premium, if any, and interest without preference or
priority of principal and premium, if any, over interest, or of interest
over principal and premium, if any, or of any installment of interest over
any other installment of interest, or of any Note over any other Note,
ratably to the aggregate of such principal and premium, if any, and
accrued and unpaid interest; and
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Fifth: To the payment of the remainder, if any, to the Company.
Section 7.4 Proceedings by Noteholder
Subject to the last two paragraphs of this Section 7.4, no holder of any
Note shall have any right by virtue of or by availing of any provision of this
Indenture to institute any suit, action or proceeding in equity or at law upon
or under or with respect to this Indenture, or for the appointment of a
receiver, trustee, liquidator, custodian or other similar official, or for any
other remedy hereunder, unless such holder previously shall have given to the
Trustee written notice of an Event of Default and of the continuance thereof, as
hereinbefore provided, and unless also the holders of not less than 20% in
aggregate principal amount of the Notes then outstanding shall have made written
request upon the Trustee to institute such action, suit or proceeding in its own
name as Trustee hereunder and shall have offered to the Trustee such indemnity
as may be reasonably satisfactory to the Trustee against the costs, expenses and
liabilities to be incurred therein or thereby, and the Trustee for sixty (60)
days after its receipt of such notice, request and offer of indemnity, shall
have neglected or refused to institute any such action, suit or proceeding and
no direction inconsistent with such written request shall have been given to the
Trustee pursuant to Section 7.7; it being understood and intended, and being
expressly covenanted by the taker and holder of every Note with every other
taker and holder and the Trustee, that no one or more holders of Notes shall
have any right in any manner whatever by virtue of or by availing of any
provision of this Indenture to affect, disturb or prejudice the rights of any
other holder of Notes, or to obtain or seek to obtain priority over or
preference to any other such holder, or to enforce any right under this
Indenture, except in the manner herein provided and for the equal, ratable and
common benefit of all holders of Notes (except as otherwise provided herein).
For the protection and enforcement of this Section 7.4, each and every
Noteholder and the Trustee shall be entitled to such relief as can be given
either at law or in equity.
Notwithstanding any other provision of this Indenture and any provision of
any Note, the right of any holder of any Note to receive payment of the
principal of and premium, if any, and interest (including Liquidated Damages to
the extent accrued but unpaid) on such Note, on or after the respective due
dates expressed in such Note, or to institute suit for the enforcement of any
such payment on or after such respective dates against the Company shall not be
impaired or affected without the consent of such holder.
Anything in this Indenture or the Notes to the contrary notwithstanding,
the holder of any Note, without the consent of either the Trustee or the holder
of any other Note, in his own behalf and for his own benefit, may enforce, and
may institute and maintain any proceeding suitable to enforce, such holder's
rights of conversion as provided herein.
Section 7.5 Proceedings by Trustee
If an Event of Default occurs and is continuing, the Trustee may in its
discretion proceed to protect and enforce the rights vested in it by this
Indenture by such appropriate judicial proceedings as the Trustee shall deem
most effectual to protect and enforce any of such rights, either by suit in
equity or by action at law or by proceeding in bankruptcy or otherwise, whether
for the specific enforcement of any covenant or agreement contained in this
Indenture or in aid of
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the exercise of any power granted in this Indenture, or to enforce any other
legal or equitable right vested in the Trustee by this Indenture or by law.
Section 7.6 Remedies Cumulative and Continuing
Except as provided in the last paragraph of Section 2.6, all powers and
remedies given by this Article VII to the Trustee or to the Noteholders shall,
to the extent permitted by law, be deemed cumulative and not exclusive of any
thereof or of any other powers and remedies available to the Trustee or the
holders of the Notes, by judicial proceedings or otherwise, to enforce the
performance or observance of the covenants and agreements contained in this
Indenture, and no delay or omission of the Trustee or of any holder of any of
the Notes to exercise any right or power accruing upon any default or Event of
Default occurring and continuing as aforesaid shall impair any such right or
power, or shall be construed to be a waiver of any such default or any
acquiescence therein; and, subject to the provisions of Section 7.4, every power
and remedy given by this Article VII or by law to the Trustee or to the
Noteholders may be exercised from time to time, and as often as shall be deemed
expedient, by the Trustee or by the Noteholders.
Section 7.7 Direction of Proceedings and Waiver of Defaults by Majority of
Noteholders
The holders of a majority in aggregate principal amount of the Notes at
the time outstanding determined in accordance with Section 9.4 shall have the
right to direct the time, method, and place of conducting any proceeding for any
remedy available to the Trustee or exercising any trust or power conferred on
the Trustee; provided, however, that (a) such direction shall not be in conflict
with any rule of law or with this Indenture, and (b) the Trustee may take any
other action deemed proper by the Trustee which is not inconsistent with such
direction. The holders of not less than a majority in aggregate principal amount
of the Notes at the time outstanding determined in accordance with Section 9.4
may on behalf of the holders of all of the Notes waive any past default or Event
of Default hereunder and its consequences except (i) a default in the payment of
interest or premium, if any, on, or the principal of, the Notes when due, (ii) a
failure by the Company to convert any Notes into Common Stock or (iii) a default
in respect of a covenant or provisions hereof which under Article XI cannot be
modified or amended without the consent of all affected holders of Notes then
outstanding. Upon any such waiver the Company, the Trustee and the holders of
the Notes shall be restored to their former positions and rights hereunder; said
default or Event of Default shall for all purposes of the Notes and this
Indenture be deemed to have been cured and to be not continuing; but no such
waiver shall extend to any subsequent or other default or Event of Default or
impair any right consequent thereon.
Section 7.8 Notice of Defaults
The Trustee shall, within ninety (90) days after the Trustee obtains
knowledge of the occurrence of a default, mail to all Noteholders, as the names
and addresses of such holders appear upon the Note Register, notice of all
defaults actually known to a Responsible Officer, unless such defaults shall
have been cured or waived before the giving of such notice; and
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provided that, except in the case of default in the payment of the principal of,
or premium, if any, or interest (including Liquidated Damages to the extent
accrued but unpaid) on any of the Notes, including without limiting the
generality of the foregoing any default in the payment of any Repurchase Price
or in the payment of any amount due in connection with any redemption of Notes,
then in any such event the Trustee shall be protected in withholding such notice
if and so long as a trust committee of directors and/or Responsible Officers of
the Trustee in good faith determine that the withholding of such notice is in
the interests of the Noteholders.
Section 7.9 Undertaking to Pay Costs
All parties to this Indenture agree, and each holder of any Note by his
acceptance thereof shall be deemed to have agreed, that any court may, in its
discretion, require, in any suit for the enforcement of any right or remedy
under this Indenture, or in any suit against the Trustee for any action taken or
omitted by it as Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees and
expenses, against any party litigant in such suit, having due regard to the
merits and good faith of the claims or defenses made by such party litigant;
provided that the provisions of this Section 7.9 shall not apply to any suit
instituted by the Trustee, to any suit instituted by any Noteholder, or group of
Noteholders, holding in the aggregate more than 20% in principal amount of the
Notes at the time outstanding determined in accordance with Section 9.4, or to
any suit instituted by any Noteholder for the enforcement of the payment of the
principal of or premium, if any, or interest (including Liquidated Damages to
the extent accrued but unpaid) on any Note (including, but not limited to, the
redemption price or Repurchase Price with respect to the Notes being redeemed or
repurchased as provided in this Indenture) on or after the due date expressed in
such Note or to any suit for the enforcement of the right to convert any Note in
accordance with the provisions of Article XV.
Section 7.10 Delay or Omission Not Waiver
No delay or omission of the Trustee or of any holder of any Note to
exercise any right or remedy accruing upon any Event of Default shall impair any
such right or remedy or constitute a waiver of any such Event of Default or any
acquiescence therein. Every right and remedy given by this Article VII or by law
to the Trustee or to the holders of Notes may be exercised from time to time,
and as often as may be deemed expedient, by the Trustee or by the holders of
Notes, as the case may be.
ARTICLE VIII
CONCERNING THE TRUSTEE
Section 8.1 Duties and Responsibilities of Trustee
The Trustee, prior to the occurrence of an Event of Default and after the
curing or waiver of all Events of Default that may have occurred, undertakes to
perform such duties and only such duties as are specifically set forth in this
Indenture and the Trust Indenture Act. In case an Event of Default has occurred
(which has not been cured or waived) the Trustee shall exercise such of
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the rights and powers vested in it by this Indenture, and use the same degree of
care and skill in their exercise, as a prudent person would exercise or use
under the circumstances in the conduct of such person's own affairs.
No provision of this Indenture shall be construed to relieve the Trustee
from liability for its own negligent action, its own negligent failure to act or
its own willful misconduct, except that
(a) prior to the occurrence of an Event of Default and after the
curing or waiving of all Events of Default that may have occurred:
(1) the duties and obligations of the Trustee shall be
determined solely by the Trust Indenture Act and the express
provisions of this Indenture, and the Trustee shall not be liable
except for the performance of such duties and obligations as are
specifically set forth in this Indenture and no implied covenants or
obligations shall be read into this Indenture and the Trust
Indenture Act against the Trustee; and
(2) in the absence of bad faith or willful misconduct on the
part of the Trustee, the Trustee may conclusively rely, as to the
truth of the statements and the correctness of the opinions
expressed therein, upon any certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture;
provided, however, in the case of any such certificates or opinions
that by any provisions hereof are specifically required to be
furnished to the Trustee, the Trustee shall be under a duty to
examine the same to determine whether or not they conform to the
requirements of this Indenture;
(b) the Trustee shall not be liable for any error of judgment made
in good faith by a Responsible Officer or Officers of the Trustee, unless
it shall be proved that the Trustee was negligent in ascertaining the
pertinent facts;
(c) the Trustee shall not be liable to any Noteholder with respect
to any action taken or omitted to be taken by it in good faith in
accordance with the direction of the holders of not less than a majority
in principal amount of the Notes at the time outstanding determined as
provided in Section 9.4 relating to the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee, under this
Indenture; and
(d) whether or not therein provided, every provision of this
Indenture relating to the conduct or affecting the liability of, or
affording protection to, the Trustee shall be subject to the provisions of
this Section.
None of the provisions contained in this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur personal financial
liability in the performance of any of its duties or in the exercise of any of
its rights or powers, if there is reasonable ground for believing that the
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.
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Section 8.2 Reliance on Documents, Opinions, Etc.
Except as otherwise provided in Section 8.1:
(a) the Trustee may conclusively rely and shall be protected in
acting upon any resolution, certificate, statement, instrument, opinion,
report, notice, request, consent, order, bond, note, coupon or other paper
or document believed by it in good faith to be genuine and to have been
signed or presented by the proper party or parties;
(b) any request, direction, order or demand of the Company mentioned
herein shall be sufficiently evidenced by an Officer's Certificate (unless
other evidence in respect thereof be herein specifically prescribed) and
any resolution of the Board of Directors may be evidenced to the Trustee
by a copy thereof certified by the Secretary or an Assistant Secretary of
the Company;
(c) the Trustee may consult with counsel of its selection, and any
advice of such counsel or Opinion of Counsel as to matters of law shall be
full and complete authorization and protection in respect of any action
taken or omitted by it hereunder in good faith and in accordance with such
advice or Opinion of Counsel if such counsel was selected with due care;
(d) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request, order or
direction of any of the Noteholders pursuant to the provisions of this
Indenture, unless such Noteholders shall have offered to the Trustee
security or indemnity reasonably satisfactory to it against the costs,
expenses and liabilities which may be incurred therein or thereby;
(e) the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture or other paper or document, but the Trustee, in its
reasonable discretion, may make such further inquiry or investigation into
such facts or matters as it may see fit, and, if the Trustee shall
determine to make such further inquiry or investigation, it shall be
entitled to examine the books, records and premises of the Company,
personally or by agent or attorney; provided, however, that if the payment
within a reasonable time to the Trustee of the costs, expenses or
liabilities likely to be incurred by it in the making of such
investigation is, in the opinion of the Trustee, not reasonably assured to
the Trustee by the security afforded to it by the terms of this Indenture,
the Trustee may require indemnity reasonably satisfactory to the Trustee
from the Noteholders against such expenses or liability as a condition to
so proceeding; 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 repaid by the Company upon demand;
(f) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder or under the Security Documents either
directly or by or through agents
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or attorneys and the Trustee shall not be responsible for any misconduct
or negligence on the part of any agent or attorney appointed by it with
due care hereunder;
(g) the Trustee shall not be liable for any action taken, suffered,
or omitted to be taken by it in good faith and reasonably believed by it
to be authorized or within the discretion or rights or powers conferred
upon it by this Indenture;
(h) the Trustee shall not be deemed to have notice of any default or
Event of Default unless a Responsible Officer of the Trustee has actual
knowledge thereof or unless written notice of any event which is in fact
such a default or Event of Default is received by the Trustee at the
Corporate Trust Office of the Trustee, and such notice references the
Notes and this Indenture;
(i) the rights, privileges, protections, immunities and benefits
given to the Trustee, including, without limitation, its right to be
indemnified, are extended to, and shall be enforceable by, the Trustee in
each of its capacities hereunder, and to each agent, custodian and other
Person employed to act hereunder; and
(j) the Trustee may request that the Company deliver an Officer's
Certificate setting forth the names of individuals and/or titles of
officers authorized at such time to take specified actions pursuant to
this Indenture, which Officer's Certificate may be signed by any person
authorized to sign an Officer's Certificate, including any person
specified as so authorized in any such certificate previously delivered
and not superseded.
In no event shall the Trustee be liable for any consequential loss or damage of
any kind whatsoever (including but not limited to lost profits), even if the
Trustee has been advised of the likelihood of such loss or damage and regardless
of the form of action.
Section 8.3 No Responsibility for Recitals, Etc.
The recitals contained herein and in the Notes (except in the Trustee's
certificate of authentication) shall be taken as the statements of the Company,
and the Trustee assumes no responsibility for the correctness of the same. The
Trustee makes no representations as to the validity or sufficiency of this
Indenture or of the Notes. The Trustee shall not be accountable for the use or
application by the Company of any Notes or the proceeds of any Notes
authenticated and delivered by the Trustee in conformity with the provisions of
this Indenture.
Section 8.4 Trustee, Paying Agents, Conversion Agents or Note Registrar
May Own Notes
The Trustee, any paying agent, any conversion agent or Note Registrar, in
its individual or any other capacity, may become the owner or pledgee of Notes
with the same rights it would have if it were not Trustee, paying agent,
conversion agent or Note Registrar.
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Section 8.5 Monies to be Held in Trust
Subject to the provisions of Section 13.4, all monies received by the
Trustee shall, until used or applied as herein provided, be held in trust for
the purposes for which they were received. Money held by the Trustee in trust
hereunder need not be segregated from other funds except to the extent required
by law. The Trustee shall be under no liability for interest on any money
received by it hereunder except as may be agreed in writing from time to time by
the Company and the Trustee.
Section 8.6 Compensation and Expenses of Trustee
The Company covenants and agrees to pay to the Trustee from time to time,
and the Trustee shall be entitled to, such compensation as the Company and the
Trustee shall from time to time agree in writing for all services rendered by it
hereunder in any capacity (which shall not be limited by any provision of law in
regard to the compensation of a trustee of an express trust), and the Company
will pay or reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances reasonably incurred or made by the Trustee in
accordance with any of the provisions of this Indenture (including the
reasonable compensation and the expenses and disbursements of its agents and
counsel and of all Persons not regularly in its employ) except any such expense,
disbursement or advance as may arise from its negligence, willful misconduct or
bad faith. The Company also covenants to indemnify the Trustee or any
predecessor Trustee in any capacity under this Indenture and its agents and any
authenticating agent for, and to hold them harmless against, any and all loss,
damages, claims, liability or expense, including taxes (other than those based
upon, measured by or determined by the income of the Trustee), incurred without
negligence, willful misconduct or bad faith on the part of the Trustee or such
agent or authenticating agent, as the case may be, and arising out of or in
connection with the acceptance or administration of this trust or in any other
capacity hereunder, including the costs and expenses of defending themselves
against any claim (whether asserted by the Company, a holder or any other
Person) of liability in the premises. The obligations of the Company under this
Section 8.6 to compensate or indemnify the Trustee and to pay or reimburse the
Trustee for expenses, disbursements and advances shall be secured by a lien upon
all property and funds held or collected by the Trustee as such, except, subject
to the effect of Sections 4.3 and 7.5, funds held in trust herewith for the
benefit of the holders of particular Notes prior to the date of the accrual of
such unpaid compensation or indemnifiable claim. The obligation of the Company
under this Section 8.6 shall survive the satisfaction and discharge of this
Indenture and the resignation or removal of the Trustee. The indemnification
provided in this Section 8.6 shall extend to the officers, directors, agents and
employees of the Trustee.
When the Trustee and its agents and any authenticating agent incur
expenses or render services after an Event of Default specified in Section
7.1(e) or (f) occurs, the expenses and the compensation for the services are
intended to constitute expenses of administration under any bankruptcy,
insolvency or similar laws.
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Section 8.7 Officer's Certificate as Evidence
Except as otherwise provided in Section 8.1, whenever in the
administration of the provisions of this Indenture the Trustee shall deem it
necessary or desirable that a matter be proved or established prior to taking or
omitting any action hereunder, such matter (unless other evidence in respect
thereof be herein specifically prescribed) may, in the absence of negligence,
willful misconduct or bad faith on the part of the Trustee, be deemed to be
conclusively proved and established by an Officer's Certificate delivered to the
Trustee, and such Officer's Certificate, in the absence of negligence, willful
misconduct or bad faith on the part of the Trustee, shall be full warrant to the
Trustee for any action taken or omitted by it under the provisions of this
Indenture upon the faith thereof.
Section 8.8 Conflicting Interests of Trustee
If the Trustee has or shall acquire a conflicting interest within the
meaning of the Trust Indenture Act, the Trustee shall either eliminate such
interest or resign, to the extent and in the manner provided by, and subject to
the provisions of, the Trust Indenture Act and this Indenture.
Section 8.9 Eligibility of Trustee
There shall at all times be a Trustee hereunder that shall be a Person
that is eligible pursuant to the Trust Indenture Act to act as such and has a
combined capital and surplus (together with its corporate parent) of at least
Fifty Million United States Dollars ($50,000,000). If such Person publishes
reports of condition at least annually, pursuant to law or to the requirements
of any supervising or examining authority, then for the purposes of this Section
8.9, the combined capital and surplus of such Person shall be deemed to be its
combined capital and surplus as set forth in its most recent report of condition
so published. If at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section 8.9, it shall resign immediately
in the manner and with the effect hereinafter specified in this Article VIII.
Section 8.10 Resignation or Removal of Trustee
(a) The Trustee may at any time resign by giving written notice of
such resignation to the Company and by mailing notice thereof to the
holders of Notes at their addresses as they shall appear on the Note
Register. Upon receiving such notice of resignation, the Company shall
promptly appoint a successor trustee by written instrument, in duplicate,
executed by order of the Board of Directors, one copy of which instrument
shall be delivered to the resigning Trustee and one copy to the successor
trustee. If no successor trustee shall have been so appointed and have
accepted appointment sixty (60) days after the mailing of such notice of
resignation to the Noteholders, the resigning Trustee may, at the expense
of the Company, petition any court of competent jurisdiction for the
appointment of a successor trustee, or any Noteholder who has been a bona
fide holder of a Note or Notes for at least six months may, subject to the
provisions of Section 7.9, on behalf of himself and all others similarly
situated, petition any such court for the appointment of a successor
trustee. Such court
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may thereupon, after such notice, if any, as it may deem proper and
prescribe, appoint a successor trustee.
(b) In case at any time any of the following shall occur:
(1) the Trustee shall fail to comply with Section 8.8 within a
reasonable time after written request therefor by the Company or by
any Noteholder who has been a bona fide holder of a Note or Notes
for at least six months, or
(2) the Trustee shall cease to be eligible in accordance with
the provisions of Section 8.9 and shall fail to resign after written
request therefor by the Company or by any such Noteholder, or
(3) the Trustee shall become incapable of acting, or shall be
adjudged a bankrupt or insolvent, or a receiver of the Trustee or of
its property shall be appointed, or any public officer shall take
charge or control of the Trustee or of its property or affairs for
the purpose of rehabilitation, conservation or liquidation,
then, in any such case, the Company may by a Board Resolution remove the
Trustee and appoint a successor trustee by written instrument, in
duplicate, executed by order of the Board of Directors, one copy of which
instrument shall be delivered to the Trustee so removed and one copy to
the successor trustee, or, subject to the provisions of Section 7.9, any
Noteholder who has been a bona fide holder of a Note or Notes for at least
six months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the removal of the
Trustee and the appointment of a successor trustee. Such court may
thereupon, after such notice, if any, as it may deem proper and prescribe,
remove the Trustee and appoint a successor trustee.
(c) The holders of a majority in aggregate principal amount of the
Notes at the time outstanding may at any time remove the Trustee and
nominate a successor trustee which shall be deemed appointed as successor
trustee unless within ten (10) days after notice to the Company of such
nomination the Company objects thereto, in which case the Trustee so
removed or any Noteholder, upon the terms and conditions and otherwise as
in Section 8.10(a) provided, may, at the expense of the Company, petition
any court of competent jurisdiction for an appointment of a successor
trustee.
(d) Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section 8.10
shall become effective upon acceptance of appointment by the successor
trustee as provided in Section 8.11.
(e) If an instrument of acceptance by a successor Trustee shall not
have been delivered to the Trustee within thirty (30) days after the
giving of such notice of removal, the Trustee being removed may petition,
at the expense of the Company, any court of competent jurisdiction for the
appointment of a successor Trustee with respect to the Securities of such
series.
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Section 8.11 Acceptance by Successor Trustee
Any successor trustee appointed as provided in Section 8.10 shall execute,
acknowledge and deliver to the Company and to its predecessor trustee an
instrument accepting such appointment hereunder, and thereupon the resignation
or removal of the predecessor trustee shall become effective and such successor
trustee, without any further act, deed or conveyance, shall become vested with
all the rights, powers, duties and obligations of its predecessor hereunder,
with like effect as if originally named as trustee herein; but, nevertheless, on
the written request of the Company or of the successor trustee, the trustee
ceasing to act shall, upon payment of any amounts then due it pursuant to the
provisions of Section 8.6, execute and deliver an instrument transferring to
such successor trustee all the rights and powers of the trustee so ceasing to
act. Upon request of any such successor trustee, the Company shall execute any
and all instruments in writing for more fully and certainly vesting in and
confirming to such successor trustee all such rights and powers. Any trustee
ceasing to act shall, nevertheless, retain a lien upon all property and funds
held or collected by such trustee as such, except for funds held in trust for
the benefit of holders of particular Notes, to secure any amounts then due it
pursuant to the provisions of Section 8.6.
No successor trustee shall accept appointment as provided in this Section
8.11 unless at the time of such acceptance such successor trustee shall be
qualified under the provisions of Section 8.8 and be eligible under the
provisions of Section 8.9.
Upon acceptance of appointment by a successor trustee as provided in this
Section 8.11, the Company shall mail or cause to be mailed notice of the
succession of such trustee hereunder to the holders of Notes at their addresses
as they shall appear on the Note Register. If the Company fails to mail such
notice within ten (10) days after acceptance of appointment by the successor
trustee, the successor trustee shall cause such notice to be mailed at the
expense of the Company.
Section 8.12 Succession by Merger, Etc.
Any corporation or other entity into which the Trustee may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Trustee shall be a
party, or any corporation or other entity succeeding to all or substantially all
of the corporate trust business of the Trustee (including the trust created by
this Indenture), shall be the successor to the Trustee hereunder without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, provided that in the case of any corporation succeeding to all
or substantially all of the corporate trust business of the Trustee such
corporation shall be qualified under the provisions of Section 8.8 and eligible
under the provisions of Section 8.9.
In case at the time such successor to the Trustee shall succeed to the
trusts created by this Indenture, any of the Notes shall have been authenticated
but not delivered, any such successor to the Trustee may adopt the certificate
of authentication of any predecessor trustee or authenticating agent appointed
by such predecessor trustee, and deliver such Notes so authenticated; and in
case at that time any of the Notes shall not have been authenticated, any
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successor to the Trustee or an authenticating agent appointed by such successor
trustee may authenticate such Notes either in the name of any predecessor
trustee hereunder or in the name of the successor trustee; and in all such cases
such certificates shall have the full force which it is anywhere in the Notes or
in this Indenture provided that the certificate of the Trustee shall have;
provided, however, that the right to adopt the certificate of authentication of
any predecessor Trustee or to authenticate Notes in the name of any predecessor
Trustee shall apply only to its successor or successors by merger, conversion or
consolidation.
Section 8.13 Limitation on Rights of Trustee as Creditor
If and when the Trustee shall be or become a creditor of the Company (or
any other obligor upon the Notes), the Trustee shall be subject to the
provisions of the Trust Indenture Act regarding the collection of the claims
against the Company (or any such other obligor).
ARTICLE IX
CONCERNING THE NOTEHOLDERS
Section 9.1 Action by Noteholders
Whenever in this Indenture it is provided that the holders of a specified
percentage in aggregate principal amount of the Notes may take any action
(including the making of any demand or request, the giving of any notice,
consent or waiver or the taking of any other action), the fact that at the time
of taking any such action, the holders of such specified percentage have joined
therein may be evidenced (a) by any instrument or any number of instruments of
similar tenor executed by Noteholders in person or by agent or proxy appointed
in writing, or (b) by the record of the holders of Notes voting in favor thereof
at any meeting of Noteholders duly called and held in accordance with the
provisions of Article X, or (c) by a combination of such instrument or
instruments and any such record of such a meeting of Noteholders. Whenever the
Company or the Trustee solicits the taking of any action by the holders of the
Notes, the Company or the Trustee may fix in advance of such solicitation, a
date as the record date for determining holders entitled to take such action.
The record date shall be not more than fifteen (15) days prior to the date of
commencement of solicitation of such action.
Section 9.2 Proof of Execution by Noteholders
Subject to the provisions of Sections 8.1, 8.2 and 10.5, proof of the
execution of any instrument by a Noteholder or his agent or proxy shall be
sufficient if made in accordance with such reasonable rules and regulations as
may be prescribed by the Trustee or in such manner as shall be satisfactory to
the Trustee. The holding of Notes shall be proved by the Note Register or by a
certificate of the Note Registrar. The record of any Noteholders' meeting shall
be proved in the manner provided in Section 10.6.
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Section 9.3 Who Are Deemed Absolute Owners
The Company, the Trustee, any authenticating agent, any paying agent, any
conversion agent and any Note Registrar may deem the Person in whose name such
Note shall be registered upon the Note Register to be, and may treat him as, the
absolute owner of such Note (whether or not such Note shall be overdue and
notwithstanding any notation of ownership or other writing thereon) for the
purpose of receiving payment of or on account of the principal of, premium, if
any, and interest (including Liquidated Damages to the extent accrued but
unpaid) on such Note, for conversion of such Note and for all other purposes;
and neither the Company nor the Trustee nor any authenticating agent nor any
paying agent nor any conversion agent nor any Note Registrar shall be affected
by any notice to the contrary. All such payments so made to any holder for the
time being, or upon his order, shall be valid, and, to the extent of the sum or
sums so paid, effectual to satisfy and discharge the liability for monies
payable upon any such Note.
Section 9.4 Company-Owned Notes Disregarded
In determining whether the holders of the requisite aggregate principal
amount of Notes have concurred in any direction, consent, waiver or other action
under this Indenture, Notes that are owned by the Company or any other obligor
on the Notes or by any Person directly or indirectly controlling or controlled
by or under direct or indirect common control with the Company or any other
obligor on the Notes shall be disregarded and deemed not to be outstanding for
the purpose of any such determination; provided that for the purposes of
determining whether the Trustee shall be protected in relying on any such
direction, consent, waiver or other action only Notes which a Responsible
Officer actually knows are so owned shall be so disregarded. Notes so owned
which have been pledged in good faith may be regarded as outstanding for the
purposes of this Section 9.4 if the pledgee shall establish to the satisfaction
of the Trustee the pledgee's right to vote such Notes and that the pledgee is
not the Company, any other obligor on the Notes or a Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with the Company or any such other obligor. In the case of a dispute as
to such right, any decision by the Trustee taken upon the advice of counsel
shall be full protection to the Trustee. Upon request of the Trustee, the
Company shall furnish to the Trustee promptly an Officer's Certificate listing
and identifying all Notes, if any, known by the Company to be owned or held by
or for the account of any of the above described Persons; and, subject to
Section 8.1, the Trustee shall be entitled to accept such Officer's Certificate
as conclusive evidence of the facts therein set forth and of the fact that all
Notes listed therein are not outstanding for the purpose of any such
determination.
Section 9.5 Revocation of Consents; Future Holders Bound
At any time prior to (but not after) the evidencing to the Trustee, as
provided in Section 9.1, of the taking of any action by the holders of the
percentage in aggregate principal amount of the Notes specified in this
Indenture in connection with such action, any holder of a Note which is shown by
the evidence to be included in the Notes the holders of which have consented to
such action may, by filing written notice with the Trustee at its Corporate
Trust Office and upon proof of holding as provided in Section 9.2, revoke such
action so far as concerns such Note. Except as aforesaid, any such action taken
by the holder of any Note shall
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be conclusive and binding upon such holder and upon all future holders and
owners of such Note and of any Notes issued in exchange or substitution
therefor, irrespective of whether any notation in regard thereto is made upon
such Note or any Note issued in exchange or substitution therefor.
ARTICLE X
NOTEHOLDERS' MEETINGS
Section 10.1 Purpose of Meetings
A meeting of Noteholders may be called at any time and from time to time
pursuant to the provisions of this Article X for any of the following purposes:
(1) to give any notice to the Company or to the Trustee or to give
any directions to the Trustee permitted under this Indenture, or to
consent to the waiving of any default or Event of Default hereunder and
its consequences, or to take any other action authorized to be taken by
Noteholders pursuant to any of the provisions of Article VII;
(2) to remove the Trustee and nominate a successor trustee pursuant
to the provisions of Article VIII;
(3) to consent to the execution of an indenture or indentures
supplemental hereto pursuant to the provisions of Section 11.2;
(4) to take any other action authorized to be taken by or on behalf
of the holders of any specified aggregate principal amount of the Notes
under any other provision of this Indenture or under applicable law; or
(5) to take any other action authorized by this Indenture or under
applicable law.
Section 10.2 Call of Meetings by Trustee
The Trustee may at any time call a meeting of Noteholders to take any
action specified in Section 10.1, to be held at such time and at such place as
the Trustee shall determine. Notice of every meeting of the Noteholders, setting
forth the time and the place of such meeting and in general terms the action
proposed to be taken at such meeting and the establishment of any record date
pursuant to Section 9.1, shall be mailed to holders of Notes at their addresses
as they shall appear on the Note Register. Such notice shall also be mailed to
the Company. Such notices shall be mailed not less than twenty (20) nor more
than ninety (90) days prior to the date fixed for the meeting.
Any meeting of Noteholders shall be valid without notice if the holders of
all Notes then outstanding are present in person or by proxy or if notice is
waived before or after the meeting by the holders of all Notes outstanding, and
if the Company and the Trustee are either present by duly authorized
representatives or have, before or after the meeting, waived notice.
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Section 10.3 Call of Meetings by Company or Noteholders
In case at any time the Company, pursuant to a resolution of its Board of
Directors, or the holders of at least 10% in aggregate principal amount of the
Notes then outstanding, shall have requested the Trustee to call a meeting of
Noteholders, by written request setting forth in reasonable detail the action
proposed to be taken at the meeting, and the Trustee shall not have mailed the
notice of such meeting within twenty (20) days after receipt of such request,
then the Company or such Noteholders may determine the time and the place for
such meeting and may call such meeting to take any action authorized in Section
10.1, by mailing notice thereof as provided in Section 10.2.
Section 10.4 Qualifications for Voting
To be entitled to vote at any meeting of Noteholders a Person shall (a) be
a holder of one or more Notes on the record date pertaining to such meeting or
(b) be a Person appointed by an instrument in writing as proxy by a holder of
one or more Notes. The only Persons who shall be entitled to be present or to
speak at any meeting of Noteholders shall be the Persons entitled to vote at
such meeting and their counsel and any representatives of the Trustee and its
counsel and any representatives of the Company and its counsel.
Section 10.5 Regulations
Notwithstanding any other provisions of this Indenture, the Trustee may
make such reasonable regulations as it may deem advisable for any meeting of
Noteholders, in regard to proof of the holding of Notes and of the appointment
of proxies, and in regard to the appointment and duties of inspectors of votes,
the submission and examination of proxies, certificates and other evidence of
the right to vote, and such other matters concerning the conduct of the meeting
as it shall think fit.
The Trustee shall, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called by the
Company or by Noteholders as provided in Section 10.3, in which case the Company
or the Noteholders calling the meeting, as the case may be, shall in like manner
appoint a temporary chairman. A permanent chairman and a permanent secretary of
the meeting shall be elected by vote of the holders of a majority in principal
amount of the Notes represented at the meeting and entitled to vote at the
meeting.
Subject to the provisions of Section 9.4, at any meeting each Noteholder
or proxyholder shall be entitled to one vote for each One Thousand United States
Dollars ($1,000) principal amount of Notes held or represented by such
Noteholder; provided, however, that no vote shall be cast or counted at any
meeting in respect of any Note challenged as not outstanding and ruled by the
chairman of the meeting to be not outstanding. The chairman of the meeting shall
have no right to vote other than by virtue of Notes held by him or instruments
in writing as aforesaid duly designating him as the proxy to vote on behalf of
other Noteholders. Any meeting of Noteholders duly called pursuant to the
provisions of Section 10.2 or 10.3 may be adjourned from time to time by the
holders of a majority of the aggregate principal amount of Notes
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represented at the meeting, whether or not constituting a quorum, and the
meeting may be held as so adjourned without further notice.
Section 10.6 Voting
The vote upon any resolution submitted to any meeting of Noteholders shall
be by written ballot on which shall be subscribed the signatures of the holders
of Notes or of their representatives by proxy and the principal amount of the
Notes held or represented by them. The permanent chairman of the meeting shall
appoint two inspectors of votes who shall count all votes cast at the meeting
for or against any resolution and who shall make and file with the secretary of
the meeting their verified written reports in duplicate of all votes cast at the
meeting. A record in duplicate of the proceedings of each meeting of Noteholders
shall be prepared by the secretary of the meeting and there shall be attached to
said record the original reports of the inspectors of votes on any vote by
ballot taken thereat and affidavits by one or more persons having knowledge of
the facts setting forth a copy of the notice of the meeting and showing that
said notice was mailed as provided in Section 10.2. The record shall show the
principal amount of the Notes voting in favor of or against any resolution. The
record shall be signed and verified by the affidavits of the permanent chairman
and secretary of the meeting and one of the duplicates shall be delivered to the
Company and the other to the Trustee to be preserved by the Trustee, the latter
to have attached thereto the ballots voted at the meeting.
Any record so signed and verified shall be conclusive evidence of the
matters therein stated.
Section 10.7 No Delay of Rights by Meeting
Nothing contained in this Article X shall be deemed or construed to
authorize or permit, by reason of any call of a meeting of Noteholders or any
rights expressly or implicitly conferred hereunder to make such call, any
hindrance or delay in the exercise of any right or rights conferred upon or
reserved to the Trustee or to the Noteholders under any of the provisions of
this Indenture or of the Notes.
ARTICLE XI
AMENDMENTS; SUPPLEMENTAL INDENTURES
Section 11.1 Amendments; Supplemental Indentures without Consent of
Noteholders
The Company, when authorized by the resolutions of the Board of Directors,
and the Trustee may from time to time and at any time amend or supplement this
Indenture and the Security Documents or the Notes without notice to or the
consent of any Holder for one or more of the following purposes:
(a) to make provision with respect to the conversion rights of the
holders of Notes pursuant to the requirements of Section 15.6;
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(b) to convey, transfer, assign, mortgage or pledge to the Trustee
as security for the Notes, any property or assets;
(c) to evidence the succession of another corporation, limited
liability company, partnership or trust to the Company, or successive
successions, and the assumption by the successor corporation, limited
liability company, partnership or trust of the covenants, agreements and
obligations of the Company pursuant to Article XII;
(d) to add to the covenants of the Company such further covenants,
restrictions or conditions as the Board of Directors and the Trustee shall
consider to be for the benefit of the holders of Notes, including without
limitation any reduction of the Conversion Price, and to make the
occurrence, or the occurrence and continuance, of a default in any such
additional covenants, restrictions or conditions a default or an Event of
Default permitting the enforcement of all or any of the several remedies
provided in this Indenture as herein set forth; provided, however, that in
respect of any such additional covenant, restriction or condition such
supplemental indenture may provide for a particular period of grace after
default (which period may be shorter or longer than that allowed in the
case of other defaults) or may provide for an immediate enforcement upon
such default or may limit the remedies available to the Trustee upon such
default;
(e) to provide for the issuance under this Indenture of Notes in
coupon form (including Notes registrable as to principal only) and to
provide for exchangeability of such Notes with the Notes issued hereunder
in fully registered form and to make all appropriate changes for such
purpose;
(f) to cure any ambiguity or to correct or supplement any provision
contained herein or in any supplemental indenture which may be defective
or inconsistent with any other provision contained herein or in any
supplemental indenture, or to make such other provisions in regard to
matters or questions arising under this Indenture which shall not
adversely affect the interests of the holders of the Notes;
(g) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Notes; or
(h) to modify, eliminate or add to the provisions of this Indenture
to such extent as shall be necessary to effect the qualifications of this
Indenture under the Trust Indenture Act, or under any similar federal
statute hereafter enacted.
(i) add any additional assets as Collateral; or
(j) release Collateral from the Liens under this Indenture and the
Security Documents when permitted or required by this Indenture or the
Security Documents and to otherwise give effect to Section 17.3.
The Trustee is hereby authorized to join with the Company in the
execution of any such supplemental indenture, to make any further appropriate
agreements and stipulations which may be therein contained and to accept the
conveyance, transfer and assignment of any property
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thereunder; provided, however, the Trustee shall not be obligated to and may, in
its discretion, enter into any supplemental indenture that affects the Trustee's
own rights, duties or immunities under this Indenture or otherwise.
Any amendment or supplemental indenture authorized by the provisions of
this Section 11.1 may be executed by the Company and the Trustee without the
consent of the holders of any of the Notes at the time outstanding,
notwithstanding any of the provisions of Section 11.2.
Section 11.2 Amendments; Supplemental Indentures with Consent of
Noteholders
With the consent (evidenced as provided in Article IX) of the holders of
not less than a majority in aggregate principal amount of the Notes at the time
outstanding (determined in accordance with Section 9.4), the Company, when
authorized by the resolutions of the Board of Directors, and the Trustee may
from time to time and at any time amend or supplement, the Notes, the Security
Documents or this Indenture for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Indenture or
any supplemental indenture or of modifying in any manner the rights of the
holders of the Notes; provided, however, that no such amendment or supplemental
indenture shall (i) extend the fixed maturity of any Note, or reduce the rate or
extend the time of payment of interest thereon, or reduce the principal amount
thereof or premium, if any, thereon, or reduce any amount payable on redemption
or repurchase thereof, impair, or change in any respect adverse to the holder of
Notes, the obligation of the Company to repurchase any Note at the option of the
holder upon the happening of a Repurchase Event, or impair or adversely affect
the right of any Noteholder to institute suit for the payment thereof, or change
the currency in which the Notes are payable, or impair or change in any respect
adverse to the Noteholders the right to convert the Notes into Common Stock
subject to the terms set forth herein, including Section 15.6, without the
consent of the holder of each Note so affected, or (ii) reduce the aforesaid
percentage of Notes, the holders of which are required to consent to any such
supplemental indenture, or modify this paragraph, without the consent of the
holders of all Notes then outstanding; provided, further, however, that any
amendment or supplemental indenture that disproportionately affects the rights
of a Noteholder or a class of Noteholder shall require the prior consent of such
Noteholder or the prior consent of Noteholders holding a majority of the
principal amount of Notes then held by such class, as applicable.
Upon the request of the Company, accompanied by a copy of the resolutions
of the Board of Directors certified by its Secretary or Assistant Secretary
authorizing the execution of any such amendment or supplemental indenture, and
upon the filing with the Trustee of evidence of the consent of Noteholders as
aforesaid, the Trustee shall join with the Company in the execution of such
amendment or supplemental indenture unless such amendment or supplemental
indenture affects the Trustee's own rights, duties or immunities under this
Indenture or otherwise, in which case the Trustee may in is discretion, but
shall not be obligated to, enter into such amendment or supplemental indenture.
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It shall not be necessary for the consent of the Noteholders under this
Section 11.2 to approve the particular form of any proposed amendment or
supplemental indenture, but it shall be sufficient if such consent shall approve
the substance thereof.
Section 11.3 Effect of Amendments and Supplemental Indentures
Any amendment or supplemental indenture executed pursuant to the
provisions of this Article XI shall comply with the Trust Indenture Act, as then
in effect; provided that this Section 11.3 shall not require such amendment or
supplemental indenture or the Trustee to be qualified under the Trust Indenture
Act prior to the time such qualification is in fact required under the terms of
the Trust Indenture Act or the Indenture has been qualified under the Trust
Indenture Act, nor shall it constitute any admission or acknowledgement by any
party to such amendment or supplemental indenture that any such qualification is
required prior to the time such qualification is in fact required under the
terms of the Trust Indenture Act or the Indenture has been qualified under the
Trust Indenture Act. Upon the execution of any amendment or supplemental
indenture pursuant to the provisions of this Article XI, this Indenture shall be
and be deemed to be modified and amended in accordance therewith and the
respective rights, limitation of rights, obligations, duties and immunities
under this Indenture of the Trustee, the Company and the holders of Notes shall
thereafter be determined, exercised and enforced hereunder subject in all
respects to such modifications and amendments and all the terms and conditions
of any such supplemental indenture shall be and be deemed to be part of the
terms and conditions of this Indenture for any and all purposes.
Section 11.4 Notation on Notes
Notes authenticated and delivered after the execution of any amendment or
supplemental indenture pursuant to the provisions of this Article XI may bear a
notation in form approved by the Trustee as to any matter provided for in such
amendment or supplemental indenture. If the Company or the Trustee shall so
determine, new Notes so modified as to conform, in the opinion of the Trustee
and the Board of Directors, to any modification of this Indenture contained in
any such amendment or supplemental indenture may, at the Company's expense, be
prepared and executed by the Company, authenticated by the Trustee (or an
authenticating agent duly appointed by the Trustee pursuant to Section 18.10)
and delivered in exchange for the Notes then outstanding, upon surrender of such
Notes then outstanding.
Section 11.5 Evidence of Compliance of Amendment or Supplemental Indenture
to be Furnished to Trustee
The Trustee, subject to the provisions of Sections 8.1 and 8.2, shall
receive an Officer's Certificate and an Opinion of Counsel as conclusive
evidence that any amendment or supplemental indenture executed pursuant hereto
complies with the requirements of this Article XI.
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ARTICLE XII
CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE
Section 12.1 Company May Consolidate, Etc.
The Company shall not, directly or indirectly, consolidate with or merge
with or into any other Person or sell, lease, convey or transfer all or
substantially all its assets, whether in a single transaction or a series of
related transactions, to any Person or group of affiliated Persons unless:
(a) either (i) in the case of a merger or consolidation that does
not involve a transfer of all or substantially all of the Company's
properties and assets, the Company is the surviving entity or (ii) in case
the Company shall consolidate with or merge into another Person or sell,
lease, convey or transfer all or substantially all of its properties and
assets, whether in a single transaction or a series of related
transactions, to any Person, the Person formed by such consolidation or
into which the Company is merged, or the Person which acquires by sale,
conveyance or transfer, or which leases the properties and assets of the
Company substantially as an entirety, shall be a corporation, limited
liability company, partnership or trust, shall be organized and validly
existing under the laws of the United States of America, any state thereof
or the District of Columbia and shall expressly assume, by an indenture
supplemental hereto, executed and delivered to the Trustee, in form
satisfactory to the Trustee, the due and punctual payment of the principal
of, premium, if any, and interest (including Liquidated Damages, if any)
on all of the Notes as applicable, and the performance or observance of
every covenant of this Indenture and the Security Documents on the part of
the Company to be performed or observed and shall have provided for the
applicable conversion rights set forth in Section 15.6 and the repurchase
rights set forth in Article XVI;
(b) immediately after giving effect to such transaction, no Event of
Default, and no event that after notice or lapse of time or both, would
become an Event of Default, shall have happened and be continuing; and
(c) the Company has delivered to the Trustee an Officer's
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 complies with this Article XII and that all
conditions precedent herein provided for relating to such transaction have
been complied with, together with any documents required under Article IX.
Section 12.2 Successor Entity to be Substituted
In case of any such consolidation, merger, sale, conveyance or lease in
accordance with Section 12.1, and, where required in accordance with Section
12.1(a) upon the assumption by the successor entity, by supplemental indenture,
executed and delivered to the Trustee and satisfactory in form to the Trustee,
of the due and punctual payment of the principal of and premium, if any, and
interest (including Liquidated Damages, if any) on all of the Notes and the
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due and punctual performance of all of the covenants and conditions of this
Indenture to be performed by the Company, such successor entity shall succeed to
and be substituted for the Company, with the same effect as if it had been named
herein as the party of the first part. Such successor entity thereupon may cause
to be signed, and may issue either in its own name or in the name of Rockford
Corporation any or all of the Notes issuable hereunder which theretofore shall
not have been signed by the Company and delivered to the Trustee; and, upon the
order of such successor entity instead of the Company and subject to all the
terms, conditions and limitations in this Indenture prescribed, the Trustee
shall authenticate and shall deliver, or cause to be authenticated and
delivered, any Notes which previously shall have been signed and delivered by
the officers of the Company to the Trustee for authentication, and any Notes
which such successor entity thereafter shall cause to be signed and delivered to
the Trustee for that purpose. All the Notes so issued shall in all respects have
the same legal rank and benefit under this Indenture as the Notes theretofore or
thereafter issued in accordance with the terms of this Indenture as though all
of such Notes had been issued at the date of the execution hereof. In the event
of any such consolidation, merger, sale, conveyance or lease, the Person named
as the "Company" in the first paragraph of this Indenture or any successor which
shall thereafter have become such in the manner prescribed in this Article XII
may be dissolved, wound up and liquidated at any time thereafter and such Person
shall be released from its liabilities as obligor and maker of the Notes and
from its obligations under this Indenture.
In case of any such consolidation, merger, sale, conveyance or lease, such
changes in phraseology and form (but not in substance) may be made in the Notes
thereafter to be issued as may be appropriate.
Section 12.3 Opinion of Counsel to be Given Trustee
The Trustee, subject to Sections 8.1 and 8.2, shall receive an Officer's
Certificate and an Opinion of Counsel as conclusive evidence that any such
consolidation, merger, sale, conveyance or lease and any such assumption
complies with the provisions of this Article XII.
ARTICLE XIII
SATISFACTION AND DISCHARGE OF INDENTURE
Section 13.1 Discharge of Indenture
When (a) the Company shall deliver to the Trustee for cancellation all
Notes theretofore authenticated (other than any Notes that have been destroyed,
lost or stolen and in lieu of or in substitution for which other Notes shall
have been authenticated and delivered) and not theretofore canceled, or (b) all
the Notes not theretofore canceled or delivered to the Trustee for cancellation
shall have become due and payable, or are by their terms to become due and
payable within one year or are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice of redemption,
and the Company shall deposit with the Trustee, in trust, funds sufficient to
pay at maturity or upon redemption of all of the Notes (other than any Notes
which shall have been mutilated, destroyed, lost or stolen and in lieu
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of or in substitution for which other Notes shall have been authenticated and
delivered) not theretofore canceled or delivered to the Trustee for
cancellation, including principal and premium, if any, and interest (including
Liquidated Damages, if any) 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 shall
also pay or cause to be paid all other sums payable hereunder by the Company,
then this Indenture shall cease to be of further effect (except as to (i)
remaining rights of registration of transfer, substitution and exchange and
conversion of Notes, (ii) rights hereunder of Noteholders to receive payments of
principal of and premium, if any, and interest on, the Notes and the other
rights, duties and obligations of Noteholders, as beneficiaries hereof with
respect to the amounts, if any, so deposited with the Trustee and (iii) the
rights, obligations and immunities of the Trustee hereunder), and the Trustee,
on demand of the Company accompanied by an Officer's Certificate and an Opinion
of Counsel as required by Section 18.5 and at the cost and expense of the
Company, shall execute proper instruments acknowledging satisfaction of and
discharging this Indenture; the Company, however, hereby agreeing 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 Notes.
Section 13.2 Deposited Monies to be Held in Trust by Trustee
Subject to Section 13.4, all monies deposited with the Trustee pursuant to
Section 13.1 shall be held in trust and applied by it to the payment, either
directly or through any paying agent (including the Company if acting as its own
paying agent), to the holders of the particular 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 13.3 Paying Agent to Repay Monies Held
Upon the satisfaction and discharge of this Indenture, all monies then
held by any paying agent of the Notes (other than the Trustee) shall, upon
demand of the Company, be repaid to it or paid to the Trustee, and thereupon
such paying agent shall be released from all further liability with respect to
such monies.
Section 13.4 Return of Unclaimed Monies
Subject to the requirements of applicable law, any monies deposited with
or paid to the Trustee for payment of the principal of, premium, if any, or
interest on Notes and not applied but remaining unclaimed by the holders of
Notes for two (2) years after the date upon which the principal of, premium, if
any, or interest (including Liquidated Damages, if any) on such Notes, as the
case may be, shall have become due and payable, shall be repaid to the Company
by the Trustee on written demand and all liability of the Trustee shall
thereupon cease with respect to such monies; and the holder of any of the Notes
shall thereafter look only to the Company for any payment which such holder may
be entitled to collect unless an applicable abandoned property law designates
another Person.
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Section 13.5 Reinstatement
If (i) the Trustee or the paying agent is unable to apply any money in
accordance with Section 13.2 by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application and (ii) the holders of at least a majority in principal amount of
the then outstanding Notes so request by written notice to the Trustee, the
Company's obligations under this Indenture and the Notes shall be revived and
reinstated as though no deposit had occurred pursuant to Section 13.1 until such
time as the Trustee or the paying agent is permitted to apply all such money in
accordance with Section 13.2; provided, however, that if the Company makes any
payment of interest on or principal of any Note following the reinstatement of
its obligations, the Company shall be subrogated to the rights of the holders of
such Notes to receive such payment from the money held by the Trustee or paying
agent.
ARTICLE XIV
NO RECOURSE AGAINST OTHERS
Section 14.1 Indenture and Notes Solely Corporate Obligations
No direct or indirect partner, employee, incorporator, shareholder,
director or officer, as such, past, present or future of the Company or any
successor corporation or any Subsidiary or any of the Company's Affiliates,
shall have any personal liability in respect of the obligations of the Company
under the Notes or this Indenture by reason of his, her or its status as such
partner, employee, incorporator, shareholder, director or officer. Each
Noteholder by accepting a Note waives and releases all such liability. Such
waiver and release are part of the consideration for the issuance of the Notes.
ARTICLE XV
CONVERSION OF NOTES
Section 15.1 Right to Convert
Subject to and upon compliance with the provisions of this Indenture, the
holder of any Note shall have the right, at the holder's option, at any time
following the date of original issuance of the Notes and prior to the close of
business on June 10, 2009 (except that, with respect to any Note or portion of a
Note that shall be called for redemption, such right shall terminate, except as
provided in the fifth paragraph of Section 15.2 and Section 3.4, at the close of
business on the last Business Day prior to the date fixed for redemption of such
Note or portion of a Note unless the Company shall default in payment due upon
redemption thereof), to convert the principal amount of any such Note, or any
portion of such principal amount which is One Thousand United States Dollars
($1,000) or an integral multiple thereof, into that number of fully paid and
non-assessable shares of Common Stock (as such shares shall then be constituted)
obtained by dividing the principal amount of the Note or portion thereof
surrendered for
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conversion by the Conversion Price in effect at such time, by surrender of the
Note so to be converted in whole or in part in the manner provided in Section
15.2. If a Conversion Notice (as defined below) is delivered prior to June 10,
2007 and within ninety (90) days following a Repurchase Event, the Company shall
make an additional payment in cash to each holder of Notes with respect to the
Notes converted, in an amount equal to $135 per each One Thousand United States
Dollars ($1,000) principal amount of the Note (the "Additional Conversion
Payment"), less the amount of any interest actually paid on the Note prior to
the repurchase date (and, if the Note is converted between a record date and the
next Interest Payment Date, less interest payable on each One Thousand United
States Dollars ($1,000) principal amount of the Note on such next Interest
Payment Date). A holder of Notes is not entitled to any rights of a holder of
Common Stock until such holder has converted his Notes to Common Stock, and only
to the extent such Notes are deemed to have been converted to Common Stock under
this Article XV. A Note with respect to which a holder has delivered a notice in
accordance with Section 16.2 regarding such holder's election to require the
Company to repurchase such holder's Notes following the occurrence of a
Repurchase Event may be converted in accordance with this Article XV only if
such holder withdraws such repurchase notice by delivering a written notice of
withdrawal to the Company prior to the close of business on the last Business
Day prior to the day fixed for repurchase.
Section 15.2 Exercise of Conversion Privilege; Issuance of Common Stock on
Conversion
In order to exercise the conversion privilege with respect to any
Definitive Note, the holder of such Definitive Note then registered on the books
of the Company shall (i) deliver a written notice, in the form of the conversion
notice attached hereto as Exhibit B, or a facsimile thereof (the "Conversion
Notice"), to the Trustee, the Company (with a copy to the Company's legal
counsel) and the transfer agent at Equiserve Trust Company, N.A., 0 Xxxxx Xxxxx
Xxxxxx, 00xx Xxxxx, Xxxxxxx, Xxxxxxxx 00000, telephone (000) 000-0000, facsimile
(000) 000-0000, Attention: Xxxxxx Xxxxxxxx, of such holder's election to
convert, which notice shall specify that all of such Note shall be converted or
the portion thereof to be converted (which shall be One Thousand United States
Dollars ($1,000) or an integral multiple thereof) and the name or names (with
address) in which the shares of Common Stock which shall be issuable on such
conversion shall be issued, (ii) if such Note or portion thereof is surrendered
for conversion during the period from the close of business on the Business Day
preceding the record date for any Interest Payment Date through the close of
business on the Business Day next preceding such Interest Payment Date, pay by
wire transfer of immediately available funds or other method acceptable to the
Company, an amount equal to the interest otherwise payable on such Interest
Payment Date on the principal amount being converted (unless such Note or
portion thereof being converted shall have been called for redemption pursuant
to a redemption notice mailed to the Noteholders in accordance with Section 3.2
or shall have become due prior to such Interest Payment Date as a result of a
Repurchase Event); provided, however, that no such payment need be made if there
shall exist at the time of conversion a default in the payment of interest on
the Notes, (iii) pay by wire transfer of immediately available funds or other
method acceptable to the Company the transfer taxes, if any, required pursuant
to Section 15.7, and (iv) surrender the Definitive Note to be converted in whole
or in part to a common carrier for overnight delivery to the Company as soon as
practicable following such date (or an indemnification undertaking or other form
of
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security reasonably satisfactory to the Company with respect to the Definitive
Note in the case of its loss, theft or destruction). Anything herein to the
contrary notwithstanding, in the case of Global Securities, conversion notices
may be delivered and a Participant's interest in a Global Note may be
surrendered for conversion in accordance with the Applicable Procedures as in
effect from time to time. Each Note surrendered for conversion shall, unless the
shares issuable on conversion are to be issued in the same name as the
registration of such Note, be duly endorsed by, or be accompanied by instruments
of transfer (including a broker's letter regarding compliance with the
prospectus delivery requirement, if applicable) in form satisfactory to the
Company duly executed by, the holder or his duly authorized attorney.
The Company shall use its best efforts to, within three (3) Business Days
after the Conversion Date (as defined below) with respect to any Note, subject
to compliance with any restrictions on transfer if shares issuable on conversion
are to be issued in a name other than that of the Noteholder (as if such
transfer were a transfer of the Note or Notes (or portion thereof) so converted)
(a)(i) in the case of a public resale of the Common Stock issuable upon such
conversion, at the holder's request, credit such aggregate number of shares of
Common Stock to which the holder shall be entitled to the holder's or its
designee's balance account with The Depository Trust Company through its Deposit
Withdrawal Agent Commission system or (ii) issue and deliver to the address as
specified in the Conversion Notice, a certificate, registered in the name of the
holder or its designee, for the number of full shares of Common Stock to which
the holder shall be entitled upon such conversion, and (b) deliver to such
holder 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 15.4
and the Additional Conversion Payment, if any (which payment, if any, shall be
paid no later than five (5) Business Days after the Conversion Date). In case
any Note of a denomination greater than One Thousand United States Dollars
($1,000) shall be surrendered for partial conversion, and subject to Section
2.3, the Company shall execute and the Trustee shall authenticate and deliver to
the holder of the Note so surrendered, without charge to him, a new Note or
Notes in authorized denominations in an aggregate principal amount equal to the
unconverted portion of the surrendered Note.
Subject to Article IV, if the Company shall not have delivered the number
of shares of Common Stock issued upon conversion of Notes by any holder within
five (5) Business Days after the Conversion Date with respect to such Notes, the
Company shall pay Liquidated Damages to such holder at the rate of one-half
percent (0.5%) per month of the outstanding principal amount of Notes so
converted by such holder.
The conversion shall be deemed to have been effected as to any such Note
(or portion thereof) on the date on which the requirements set forth above in
this Section 15.2 have been satisfied as to such Note (or portion thereof) (such
date, the "Conversion Date"), and the Person in whose name any shares of Common
Stock shall be issuable upon such conversion shall be deemed to have become on
the Conversion Date the holder of record of the shares represented thereby;
provided, however, that any such surrender on any date when the stock transfer
books of the Company shall be closed shall constitute the Person in whose name
the certificates are to be issued as the record holder thereof for all purposes
on the next succeeding day on which such stock transfer books are open, but such
conversion shall be at the Conversion Price in effect on the date upon which
such Note shall be surrendered. For purposes of determining satisfaction of
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the requirement set forth above with respect to the Conversion Date for any
Note, any facsimile required to be sent shall be deemed to have been sent on a
given day if such facsimile was received before 1:00 p.m., New York City time,
on such date, to the number listed above (unless a different number is specified
in a notice filed with the Trustee and mailed by the Trustee, at the Company's
expense, to each holder of the Notes at such holder's address appearing in the
Note Register, as provided for in Section 2.5 of this Indenture) and a
confirmation of transmission of such facsimile is obtained.
The Company shall pay in cash, on any Note or portion thereof surrendered
for conversion during the period from the close of business on any Interest
Payment Date to which interest has been fully paid through the close of business
on the Business Day preceding the record date for the next such Interest Payment
Date, accrued and unpaid interest, if any, on the Note or portion thereof
surrendered for conversion to, but excluding, the date of conversion, and
Liquidated Damages, if any. Subject to Article IV, any such payment of interest
shall be made with respect to such Note within ten (10) Business Days after the
Conversion Date. Notwithstanding the foregoing, any Note or portion thereof
surrendered for conversion during the period from the close of business on the
record date for any Interest Payment Date through the close of business on the
Business Day next preceding such Interest Payment Date shall (unless such Note
or portion thereof being converted shall have been called for redemption
pursuant to a redemption notice mailed to the Noteholders in accordance with
Section 3.2 or shall have become due prior to such Interest Payment Date as a
result of a Repurchase Event) be accompanied by payment, in immediately
available funds or other funds acceptable to the Company, of an amount equal to
the interest otherwise payable on such Interest Payment Date on the principal
amount being converted; provided, however, that no such payment need be made if
there shall exist at the time of conversion a default in the payment of interest
on the Notes. Nothing in this Section 15.2 shall affect the right of a holder in
whose name any Note is registered at the close of business on a record date to
receive the interest payable on such Note on the related Interest Payment Date
in accordance with the terms of this Indenture and the Note. Except as provided
in this Section 15.2, no adjustment shall be made for interest accrued on any
Note converted or for dividends on any shares issued upon the conversion of such
Note as provided in this Article.
Section 15.3 Company Right to Force Automatic Conversion
The Company may, at its option, automatically convert all or a portion of
the Notes (an "Automatic Conversion") at any time prior to June 10, 2007 if the
Closing Price (as defined in Section 15.6(e)) per share of the Common Stock has
exceeded two hundred and twenty five percent (225%) of the Conversion Price then
in effect for at least fifteen (15) Trading Days within a period of twenty (20)
consecutive Trading Days ending five (5) Trading Days prior to the date the
Automatic Conversion Notice (defined below) specifying the date (the "Automatic
Conversion Date") on which an Automatic Conversion will become effective is sent
to all holders of Notes, provided that either (x) a registration statement
covering the resale of the Conversion Shares is effective and available for use
from the date of the Automatic Conversion Notice (as defined below) through and
including the earlier of the Automatic Conversion Date or the last date on which
the registration statement is required to be kept effective under the terms of
the Registration Rights Agreement, or (y) the Conversion Shares issuable upon
the Automatic
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Conversion may be sold pursuant to Rule 144 under the Securities Act. Subject to
Article IV, if the Automatic Conversion Date is prior to June 10, 2007, the
Company shall make an additional payment in cash to each holder of Notes with
respect to the Notes converted, in an amount equal to $135 per each One Thousand
United States Dollars ($1,000) principal amount of the Note (the "Company
Conversion Provisional Payment"), less the amount of any interest actually paid
on the Note prior to the Automatic Conversion Date (and, if the Note is
converted between a record date and the next Interest Payment Date, less
interest payable on each One Thousand United States Dollars ($1,000) principal
amount of the Note on such next Interest Payment Date).
Unless the Company shall have theretofore called for redemption all of the
Notes then outstanding, if the Company elects to convert all or a portion of the
Notes pursuant to this Section 15.3, the Company, or at its request (which must
be received by the Trustee at least five (5) Business Days prior to the date the
Trustee is requested to give notice as described below unless a shorter period
is agreed to by the Trustee), the Trustee in the name of and at the expense of
the Company, shall mail or cause to be mailed a notice (the "Automatic
Conversion Notice") of the Automatic Conversion not more than thirty (30) days
but not less than five (5) days before the Automatic Conversion Date to such
holders at their last addresses as they shall appear upon the Notes Register.
Such notice shall be irrevocable. Notice shall be mailed by first class mail.
Any notice that is mailed in the manner herein provided shall be conclusively
presumed to have been duly given, whether or not the registered holder receives
the notice. In any case, failure to duly give such notice to the holder of any
Notes designated for redemption in whole or in part, or any defect in the
notice, shall not affect the validity of the proceedings for the automatic
conversion of any other Notes.
Each Automatic Conversion Notice shall state:
(a) The Automatic Conversion Date,
(b) the CUSIP number(s) of the Note(s) to be automatically
converted,
(c) The place or places where such Notes are to be surrendered for
conversion, and
(d) The Conversion Price then in effect.
In case the Notes are to be converted in part only, the Automatic
Conversion Notice shall state the portion of the principal amount thereof to be
converted and shall state that on and after the Automatic Conversion Date, upon
surrender of such Note, a new Note or Notes in principal amount equal to the
unconverted portion thereof will be issued.
If any of the foregoing provisions or other provisions of this Section are
inconsistent with applicable law, such law shall govern.
In the event of an Automatic Conversion, the Company shall issue and
deliver a certificate or certificates for the number of full shares of Common
Stock issuable upon conversion of the Notes or, at the holder's request, credit
such aggregate number of shares of Common Stock to which the holder shall be
entitled to the holder's balance account with the
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Depositary through its Deposit Withdrawal Agent Commission system, along with
(i) any cash in respect of any fractional shares of Common Stock otherwise
issuable upon conversion (as provided in Section 15.4), and (ii) the Company
Conversion Provisional Payment, if any, for payment to the holder as promptly
after the Automatic Conversion Date as practicable in accordance with the
provisions of this Section 15.3.
All Notes subject to the Automatic Conversion shall be delivered to the
Company to be canceled. Failure to deliver such Notes shall not affect their
automatic cancellation.
Section 15.4 Cash Payments in Lieu of Fractional Shares
No fractional shares of Common Stock or scrip representing fractional
shares shall be issued upon conversion of Notes. If more than one Note shall be
surrendered for conversion at one time by the same holder, the number of full
shares which shall be issuable upon conversion thereof shall be computed on the
basis of the aggregate principal amount of the 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
Note or Notes, the Company shall calculate and pay a cash adjustment in lieu of
such fractional share at the current market value thereof to the holder of
Notes. For purposes of this Section 15.4, the current market value of a share of
Common Stock shall be the Closing Price (determined as provided in Section
15.6(e)) on the first Trading Day immediately preceding the day on which the
Notes (or specified portions thereof) are deemed to have been converted.
Section 15.5 Conversion Price
The conversion price shall be as specified in the form of Note (herein
called the "Conversion Price") attached as Exhibit A hereto, subject to
adjustment as provided in this Article XV.
Section 15.6 Adjustment of Conversion Price
The Conversion Price shall be adjusted from time to time by the Company as
follows:
(a) In case 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 (i) 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 15.6(e)) fixed
for such determination and (ii) 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 in the Conversion Price 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 15.6(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.
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(b) In case 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, in case 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) In case the Company shall issue rights or warrants to all
holders of its outstanding shares of Common Stock entitling them to
subscribe for or purchase shares of Common Stock at a price per share less
than the Current Market Price (as defined in Section 15.6(e)) 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 (i) the numerator shall be the sum
of the number of shares of Common Stock outstanding at the close of
business on the Record Date plus the number of shares that the aggregate
offering price of the total number of shares so offered for subscription
or purchase would purchase at such Current Market Price, and of which (ii)
the denominator shall be the sum of the number of shares of Common Stock
outstanding at the close of business on the Record Date plus the total
number of additional shares of Common Stock so offered for subscription or
purchase. Such adjustment shall become effective immediately after the
opening of business on the day following the Record Date fixed for
determination of 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 the Conversion
Price that would then be in effect had the adjustments made upon the
issuance of such rights or warrants been made on the basis of delivery of
only the number of shares of Common Stock actually delivered. In the event
that such rights or warrants are not so issued, the Conversion Price shall
again be adjusted to be the Conversion Price that would then be in effect
if such date fixed for the determination of shareholders entitled to
receive such rights or warrants had not been fixed. In determining whether
any rights or warrants entitle the holders to subscribe for or purchase
shares of Common Stock at less than such 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, the value of such consideration, if other than cash,
to be determined in good faith by the Board of Directors.
(d) In case 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
15.6(a) applies) or evidences of its indebtedness or other assets
(including securities, but excluding (1) any rights or warrants referred
to in Section 15.6(c) and (2) dividends and distributions paid exclusively
in cash
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(except as set forth in Section 15.6(e), (the foregoing hereinafter in
this Section 15.6(d) called the "Additional Securities")), unless the
Company elects to reserve such Additional Securities for distribution to
the Noteholders upon conversion of the Notes so that any such holder
converting Notes will receive upon such conversion, in addition to the
shares of Common Stock to which such holder is entitled, the amount and
kind of such Additional Securities which such holder would have received
if such holder had converted its Notes into Common Stock immediately prior
to the Record Date (as defined in Section 15.6(e)) for such distribution
of the Additional 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 with respect to such distribution by
a fraction of which (i) the numerator shall be the Current Market Price
(determined as provided in Section 15.6(e)) on such date less the fair
market value (as determined in good faith by the Board of Directors, whose
determination shall be conclusive and described in a Board Resolution) on
such date of the portion of the Additional Securities so distributed
applicable to one share of Common Stock and (ii) 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 Additional 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 Noteholder shall
have the right to receive upon conversion of a Note (or any portion
thereof) the amount of Common Stock such holder would have received had
such holder converted such Note (or portion thereof) immediately prior to
such Record Date. In the event that 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
15.6(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 (the "Reference
Period") used in computing the Current Market Price pursuant to Section
15.6(e) to the extent possible, unless the Board of Directors in a Board
Resolution determines in good faith that determining the fair market value
during the Reference Period would not be in the best interest of the
Noteholder.
In the event that the Company implements a new shareholder rights
plan, such rights plan shall provide that upon conversion of the Notes the
holders will receive, in addition to the Common Stock issuable upon such
conversion, the rights issued under such rights plan as if the holders had
converted the Notes prior to implementing the rights plan and
notwithstanding the occurrence of an event causing such rights to separate
from the Common Stock at or prior to the time of conversion. Any
distribution of rights or warrants pursuant to a shareholder rights plan
complying with the requirements set forth in the immediately preceding
sentence of this paragraph shall not constitute a distribution of rights
or warrants for the purposes of this Section 15.6(d).
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Rights or warrants distributed by the Company to all holders of
Common Stock entitling the holders thereof to subscribe for or purchase
shares of the Company's capital stock (either initially or under certain
circumstances), which rights or warrants, until the occurrence of a
specified event or events ("Trigger Event"): (i) are deemed to be
transferred with such shares of Common Stock; (ii) are not exercisable;
and (iii) are also issued in respect of future issuances of Common Stock,
shall be deemed not to have been distributed for purposes of this Section
15.6(d) (and no adjustment to the Conversion Price under this Section
15.6(d) will be required) until the occurrence of the earliest Trigger
Event. If such right or warrant is subject to subsequent events, upon the
occurrence of which such right or warrant shall become exercisable to
purchase different securities, evidences of indebtedness or other assets
or entitles the holder to purchase a different number or amount of the
foregoing or to purchase any of the foregoing at a different purchase
price, then the occurrence of each such event shall be deemed to be the
date of issuance and record date with respect to a new right or warrant
(and a termination or expiration of the existing right or warrant 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 or other event (of the type described in the preceding
sentence) with respect thereto, that resulted in an adjustment to the
Conversion Price under this Section 15.6(d), (1) in the case of any such
rights or warrants that 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 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 all of which
shall have expired or been terminated without exercise, the Conversion
Price shall be readjusted as if such rights and warrants had never been
issued.
For purposes of this Section 15.6(d) and Sections 15.6(a) and (c),
any dividend or distribution to which this Section 15.6(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 15.6(a)
or 15.6(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 15.6(c) applies (and any Conversion
Price reduction required by this Section 15.6(d) with respect to such
dividend or distribution shall then be made) immediately followed by (2) a
dividend or distribution of such shares of Common Stock or such rights or
warrants (and any further Conversion Price reduction required by Sections
15.6(a) and (c) with respect to such dividend or distribution shall then
be made, except (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"
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within the meaning of Section 15.6(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 15.6(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 15.6(a).
In case the Company shall, by dividend or otherwise, distribute to
all holders of its Common Stock cash (excluding any cash that is
distributed upon a merger or consolidation to which Section 15.7 applies
or as part of a distribution referred to in Section 15.6), then
immediately after the close of business on the Record Date for the
distribution, 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) such
combined amount 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 date; provided, however, that in the event
the portion of the cash so distributed applicable to one (1) share of
Common Stock is equal to or greater than the Current Market Price of the
Common Stock on the Record Date, in lieu of the foregoing adjustment,
adequate provision shall be made so that each holder shall have the right
to receive upon conversion of a Note (or any portion thereof) the amount
of cash such holder would have received had such holder converted such
Note (or portion thereof) immediately prior to such Record Date. In the
event that such dividend or distribution is not so paid or made, the
Conversion Price shall again be adjusted to be the Conversion Price that
would then be in effect if such dividend or distribution had not been
declared.
(e) For purposes of this Section 15.6, the following terms shall
have the meaning indicated:
(1) "Closing Price" with respect to any securities on any day
shall mean the closing sale price regular way on such day or, in
case no such sale takes place on such day, the average of the
reported closing bid and asked prices, regular way, 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
national security 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 closing bid and
asked 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 Board Resolution.
(2) "Current Market Price" shall mean the average of the daily
Closing Prices per share of Common Stock for the ten (10)
consecutive Trading Days
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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 Section
15.6(a), (b), (c) or (d) occurs during such ten (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 15.6(a), (b), (c) or (d) 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 in good faith by the
Company's Board of Directors in a manner consistent with any
determination of such value for purposes of Section 15.6(d), whose
determination shall be conclusive and described in a Board
Resolution) of the evidences of indebtedness, shares of capital
stock or assets being distributed applicable to one share of Common
Stock as of the close of business on the day before such "ex" date.
For purposes of this paragraph, the term "ex" date, (1) when used
with respect to any issuance or distribution, means the first date
on which the Common Stock trades regular way on the relevant
exchange or in the relevant market from which the Closing Price was
obtained without the right to receive such issuance or distribution
and (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.
Notwithstanding the foregoing, whenever successive adjustments to
the Conversion Price are called for pursuant to this Section 15.6,
such adjustments shall be made to the Current Market Price as may be
necessary or appropriate to effectuate the intent of this Section
15.6 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
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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 security exchange, a day on which the New York
Stock Exchange or such other national security exchange, as
applicable, 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 trading or quoted, a Business Day.
(f) The Company may make such reductions in the Conversion Price, in
addition to those required by Sections 15.6(a), (b), (c) or (d), 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.
(g) To the extent permitted by applicable law, the Company from time
to time may reduce the Conversion Price by any amount for any period of
time if the period is at least twenty (20) days, the reduction is
irrevocable during the period and the Board of Directors shall have made a
determination that such reduction would be in the best interests of the
Company, which determination shall be conclusive and described in a Board
Resolution. Whenever the Conversion Price is reduced pursuant to the
preceding sentence, the Company shall mail to the holder of each Note at
his last address appearing on the Note Register provided for in Section
2.5 a notice of the reduction at least five (5) days prior to the date the
reduced Conversion Price takes effect, and such notice shall state the
reduced Conversion Price and the period during which it will be in effect.
(h) No adjustment in the Conversion Price shall be required under
this Section 15.6 unless such adjustment would require an increase or
decrease of at least one percent (1%) in such price; provided, however,
that any adjustments which by reason of this Section 15.6 (h) are not
required to be made shall be carried forward and taken into account in any
subsequent adjustment. All calculations under this Article XV shall be
made by the Company and shall be made to the nearest cent or to the
nearest one hundredth of a share, as the case may be. No adjustment need
be made for a change in the par value or no par value of the Common Stock.
(i) Subject to Section 15.6(f), whenever the Conversion Price is
adjusted as provided in this Section 15.6, the Company shall promptly file
with the Trustee and any conversion agent other than the Trustee an
Officer's 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 the holder of each Note at his last address appearing
on the Note Register provided for in Section 2.5, within twenty
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(20) days of the effective date of such adjustment. Failure to deliver
such notice shall not effect the legality or validity of any such
adjustment.
(j) In any case in which this Section 15.6 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 (i)
issuing to the holder of any 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 and (ii) paying to such holder any amount
in cash in lieu of any fraction pursuant to Section 15.4.
(k) For purposes of this Section 15.6, the number of shares of
Common Stock at any time outstanding shall not include shares held in the
treasury of the Company but shall include shares issuable in respect of
scrip certificates issued in lieu of fractions of shares of Common Stock.
The Company will not pay any dividend or make any distribution on shares
of Common Stock held in the treasury of the Company.
Section 15.7 Effect of Reclassification, Consolidation, Merger or Sale
Subject to the provisions of Article XVI, if any of the following events
occur, namely (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 Person 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 (other than as a result of a
change in name, a change in par value or a change in the jurisdiction of
incorporation), (iii) any statutory exchange as a result of which holders of
Common Stock generally shall be entitled to receive stock, securities or other
property or assets (including cash) with respect to or in exchange for such
Common Stock (such transaction, a "Statutory Exchange"), or (iv) any sale or
conveyance of the properties and assets of the Company as, or substantially as,
an entirety to any other Person as a result of which holders of Common Stock
shall be entitled to receive stock, securities or other property or assets
(including cash) with respect to or in exchange for such Common Stock, then the
Company or the successor or purchasing Person, as the case may be, shall execute
with the Trustee a supplemental indenture (which shall comply with the Trust
Indenture Act as in force at the date of execution of such supplemental
indenture if such supplemental indenture is then required to so comply)
providing that such Note 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,
Statutory Exchange, sale or conveyance by a holder of a number of shares of
Common Stock issuable upon conversion of such Notes (assuming, for such
purposes, a sufficient number of authorized shares of Common Stock available to
convert all such Notes) immediately prior to such reclassification, change,
consolidation, merger, combination, Statutory Exchange, sale or conveyance
assuming such holder of Common Stock did not exercise his rights of election, if
any, that holders of Common Stock who were entitled to vote or consent to such
transaction had as to the kind or amount of
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securities, cash or other property receivable upon such consolidation, merger,
combination, Statutory Exchange, sale or conveyance (provided that, if the kind
or amount of securities, cash or other property receivable upon such
consolidation, merger, combination, Statutory Exchange, sale or conveyance is
not the same for each share of Common Stock in respect of which such rights of
election shall not have been exercised ("non-electing share"), then for the
purposes of this Section 15.7 the kind and amount of securities, cash or other
property receivable upon such consolidation, merger, combination, Statutory
Exchange, sale or conveyance for each non-electing share shall be deemed to be
the kind and amount so receivable per share by a plurality of the non-electing
shares). Such supplemental indenture shall provide for adjustments which shall
be as nearly equivalent as may be practicable to the adjustments provided for in
this Article XV. If, in the case of any such reclassification, change,
consolidation, merger, combination, Statutory Exchange, sale or conveyance, the
stock or other securities and assets receivable thereupon by a holder of shares
of Common Stock include 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, Statutory
Exchange, 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 Notes as the Company's Board of
Directors shall reasonably consider necessary by reason of the foregoing,
including to the extent practicable the provisions providing for the repurchase
rights set forth in Article XVI herein.
The Company shall cause notice of the execution of such supplemental
indenture to be mailed to each holder of Notes, at his address appearing on the
Note Register provided for in Section 2.5 of this Indenture, within twenty (20)
days after execution thereof. Failure to deliver such notice shall not affect
the legality or validity of such supplemental indenture.
The above provisions of this Section 15.7 shall similarly apply to
successive reclassifications, changes, consolidations, mergers, combinations,
sales and conveyances.
If this Section 15.7 applies to any event or occurrence, Section 15.6
shall not apply.
Section 15.8 Taxes on Shares Issued
The issue of stock certificates on conversions of Notes shall be made
without charge to the converting Noteholder 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 Note converted, and the Company
shall not be required to issue or deliver any such stock certificate unless and
until the Person or Persons requesting the issue thereof shall have paid to the
Company the amount of such tax or shall have established to the satisfaction of
the Company that such tax has been paid.
Section 15.9 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, reserved for the
purpose of issuance, no less than one
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hundred five percent (105%) of the number of shares of Common Stock needed to
provide for the issuance of Common Stock upon conversion of all of the Notes and
upon exercise of all the Warrants without regard to any limitations on
conversions or exercise.
The Company will not, by amendment of its articles of incorporation or
through any reorganization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities, or any other voluntary action, avoid
or seek to avoid the observance or performance of any of the terms to be
observed or performed by it hereunder. Without limiting the generality of the
foregoing, the Company (i) will not increase the par value of any shares of
Common Stock issuable upon conversion of the Notes above the Conversion Price
then in effect, (ii) will take all such actions as may be necessary or
appropriate in order that the Company may validly and legally issue fully paid
and non-assessable shares of Common Stock upon conversion of the Notes and (iii)
will not take any action which results in any adjustment of the Conversion Price
if the total number of shares of Common Stock issuable after the conversion of
all of the Notes and exercise of all of the Warrants would exceed the total
number of shares of Common Stock then authorized by the Company's articles of
incorporation and available for the purpose of issue upon such exercise.
The Company covenants that all shares of Common Stock issued upon
conversion of 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 is obligated to register the Notes and the shares of Common
Stock issuable upon conversion of the Notes for resale under the Securities Act
pursuant to the Registration Rights Agreement. The Notes and the shares of
Common Stock issuable upon conversion of the Notes shall constitute Registrable
Securities (as such term is defined in the Registration Rights Agreement). Each
holder of Notes shall be entitled to all of the benefits afforded to a holder of
Registrable Securities under the Registration Rights Agreement and such holder,
by its acceptance of a Note, agrees and shall agree to be bound by and to comply
with the terms and conditions of the Registration Rights Agreement applicable to
such holder as a holder of such Registrable Securities.
The Company shall use commercially reasonable efforts to promptly secure
the listing of the shares of Common Stock issuable upon conversion of a Note
upon each national securities exchange and automated quotation system, if any,
upon which shares of Common Stock are then listed (subject to official notice of
issuance upon conversion of such Note) and shall use commercially reasonable
efforts to maintain, so long as any other shares of Common Stock shall be so
listed, such listing of all shares of Common Stock from time to time issuable
upon the conversion of all then outstanding Notes; and the Company shall use
commercially reasonable efforts to list on each national securities exchange or
automated quotation system, as the case may be, and shall maintain such listing
of, any other shares of capital stock of the Company issuable upon conversion of
the Notes if and so long as any shares of the same class shall be listed on such
national securities exchange or automated quotation system. The Company shall
pay all fees and expenses in connection with satisfying its obligations under
this Section 15.9.
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Section 15.10 Responsibility of Trustee
The Trustee and any other conversion agent shall not at any time be under
any duty or responsibility to any holder of 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 and any other
conversion agent shall not be accountable with respect to the validity or value
(or the kind or amount) of any shares of Common Stock, or of any securities or
property, which may at any time be issued or delivered upon the conversion of
any Note; and the Trustee and any other conversion agent make no representations
with respect thereto. Subject to the provisions of Section 8.1, neither the
Trustee nor any conversion agent shall be responsible for any failure of the
Company to issue, transfer or deliver any shares of Common Stock or stock
certificates or other securities or property or cash upon the surrender of any
Note for the purpose of conversion or to comply with any of the duties,
responsibilities or covenants of the Company contained in this Article. Without
limiting the generality of the foregoing, neither the Trustee nor any conversion
agent shall be under any responsibility to determine whether a supplemental
indenture need be entered into under Section 15.7 or the correctness of any
provisions contained in any supplemental indenture entered into pursuant to such
section relating either to the kind or amount of shares of stock or securities
or property (including cash) receivable by Noteholders upon the conversion of
their Notes after any event referred to in such Section 15.7 or to any
adjustment to be made with respect thereto, but, subject to the provisions of
Section 8.1, may accept as conclusive evidence of the correctness of any such
provisions, and shall be protected in relying upon, the Officer's Certificate
(which the Company shall be obligated to file with the Trustee prior to the
execution of any such supplemental indenture) with respect thereto.
Section 15.11 Notice to Holders Prior to Certain Actions
In case:
(a) the Company shall declare a dividend (or any other distribution)
on its Common Stock; or
(b) the Company shall authorize the granting to the holders of its
Common Stock of rights or warrants to subscribe for or purchase any share
of any class or any other rights or warrants; or
(c) of any reclassification of the Common Stock of the Company
(other than a subdivision or combination of its outstanding Common Stock,
or a change in par value, or from par value to no par value, or from no
par value to par value), or of any consolidation or merger to which the
Company is a party and for which approval of any shareholders of the
Company is required, or of the sale or transfer of all or substantially
all of the assets of the Company; or
(d) of the voluntary or involuntary dissolution, liquidation or
winding-up of the Company;
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the Company shall cause to be filed with the Trustee and to be mailed to each
holder of Notes at his address appearing on the Note Register, provided for in
Section 2.5 of this Indenture, as promptly as possible but in any event at least
fifteen (15) days prior to the applicable date hereinafter specified, a notice
stating (x) the date on which a record is to be taken for the purpose of such
dividend, distribution or rights or warrants, or, if a record is not to be
taken, the date as of which the holders of Common Stock of record to be entitled
to such dividend, distribution or rights are to be determined, or (y) the date
on which such reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding-up is expected to become effective or occur,
and the date as of which it is expected that holders of Common Stock of record
shall be entitled to exchange their Common Stock for securities or other
property deliverable upon such reclassification, consolidation, merger, sale,
transfer, dissolution, liquidation or winding-up. Failure to give such notice,
or any defect therein, shall not affect the legality or validity of such
dividend, distribution, reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding-up.
Section 15.12 Holder Not Deemed a Shareholder
Except as otherwise specifically provided herein, prior to a Noteholder's
receipt of Common Stock upon conversion of a Note, the Noteholder shall not be
entitled, as such, to any rights of a shareholder of the Company, including,
without limitation, the right to vote or to consent to any action of the
shareholders of the Company, to receive dividends or other distributions, to
exercise any preemptive right or to receive dividends or other distributions, or
to receive any notice of meetings of shareholders of the Company, and shall not
be entitled to receive any notice of any proceedings of the Company. In
addition, nothing contained in this Indenture shall be construed as imposing any
liabilities on such holder to purchase any securities (upon conversion of a Note
or otherwise) or as a shareholder of the Company, whether such liabilities are
asserted by the Company or by creditors of the Company.
ARTICLE XVI
REPURCHASE UPON A REPURCHASE EVENT
Section 16.1 Repurchase Right
If, at any time prior to June 10, 2009 there shall occur a Repurchase
Event (as defined in Section 16.3), then each holder shall have the right, at
such holder's option, to require the Company to repurchase all of such holder's
Notes, or any portion thereof (in principal amounts of One Thousand United
States Dollars ($1,000) or integral multiples thereof), on the date (the
"repurchase date") that is forty (40) calendar days after the date of the
Company Notice (as defined in Section 16.2(a) below) of such Repurchase Event
(or, if such 40th day is not a Business Day, the next succeeding Business Day).
If the Repurchase Event occurs (i) prior to or on June 10, 2006, such repurchase
shall be made in cash at a price equal to one hundred and fifteen percent (115%)
of the principal amount of Notes such holder elects to require the Company to
repurchase, (ii) after June 10, 2006 but prior to or on June 10, 2008, such
repurchase shall be made in cash at a price equal to 110% of the principal
amount of Notes such holder
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elects to require the Company to repurchase and (iii) after June 10, 2008, but
prior to or on June 10, 2009, such repurchase shall be made in cash at a price
equal to 105% of the principal amount of Notes such holder elects to require the
Company to repurchase, together, in each case, with accrued interest, if any, to
the applicable repurchase date (the "Repurchase Price"). If the repurchase date
is prior to June 10, 2007, the Company shall make an additional payment in cash
to each holder of Notes with respect to the Notes repurchased, in an amount
equal to $135 per each One Thousand United States Dollars ($1,000) principal
amount of the Note (the "Additional Repurchase Payment"), less the amount of any
interest actually paid on the Note prior to the repurchase date (and, if the
Note is repurchased between a record date and the next Interest Payment Date,
less interest payable on each One Thousand United States Dollars ($1,000)
principal amount of the Note on such next Interest Payment Date).
Notwithstanding anything in this Article XVI to the contrary, if a redemption
date pursuant to Article III shall occur prior to any repurchase date
established pursuant to a Company Notice under Section 16.2, provided that the
Company shall have deposited or set aside an amount of money sufficient to
redeem such Notes as set forth in Section 3.2 on or before such repurchase date,
all such Notes shall be redeemed pursuant to Article III and the repurchase
rights hereunder shall have no effect.
Section 16.2 Notices; Method of Exercising Repurchase Right, Etc.
(a) Unless the Company shall have theretofore called for redemption
all of the outstanding Notes and deposited or set aside an amount of money
sufficient to redeem such Notes on the redemption date as set forth in
Section 3.2, on or before the tenth (10th) calendar day following the
occurrence of a Repurchase Event, the Company or, at the written request
of the Company, the Trustee, shall mail to all holders of record of the
Notes a notice (the "Company Notice") in the form as prepared by the
Company of the occurrence of the Repurchase Event and of the repurchase
right set forth herein arising as a result thereof. The Company shall also
deliver a copy of such notice of a repurchase right to the Trustee. The
Company Notice shall contain the following information:
(1) a brief description of the Repurchase Event;
(2) the repurchase date;
(3) the CUSIP number(s) of the Note(s) subject to the
repurchase right;
(4) the date by which the repurchase right must be exercised;
(5) the last date by which the election to require repurchase,
if submitted, must be revoked;
(6) the Repurchase Price and the Additional Repurchase Amount,
if any;
(7) a description of the procedure which a holder must follow
to exercise a repurchase right; and
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(8) the Conversion Price then in effect, the date on which the
right to convert the principal amount of the Notes to be repurchased
will terminate and the place or places where Notes may be
surrendered for conversion.
No failure of the Company to give the foregoing notices or defect therein
shall limit any holder's right to exercise a repurchase right or affect the
validity of the proceedings for the repurchase of Notes.
If any of the foregoing provisions are inconsistent with applicable law,
such law shall govern.
(b) To exercise a repurchase right, a holder shall deliver to the
Trustee on or before the close of business on the thirty-fifth (35th) day
after the Company Notice was mailed (i) written notice to the Company (or
agent designated by the Company for such purpose) of the holder's exercise
of such right in substantially the form attached hereto as Exhibit C (the
"Repurchase Notice"), which Repurchase Notice shall set forth the name of
the holder, the principal amount of the Notes to be repurchased, a
statement that an election to exercise the repurchase right is being made
thereby, and (ii) the Notes with respect to which the repurchase right is
being exercised, duly endorsed for transfer to the Company. Election of
repurchase by a holder shall be revocable at any time prior to, but
excluding, the repurchase date, by delivering written notice to that
effect to the Trustee prior to the close of business on the Business Day
prior to the repurchase date.
(c) If the Company fails to repurchase on the repurchase date any
Notes (or portions thereof) as to which the repurchase right has been
properly exercised, then the principal of such Notes shall, until paid,
bear interest to the extent permitted by applicable law from the
repurchase date at the rate borne by the Note and each such Note shall be
convertible into Common Stock in accordance with this Indenture (without
giving effect to Section 16.2(b)) until the principal of such Note shall
have been paid or duly provided for.
(d) Any Note that is to be repurchased only in part shall be
surrendered to the Trustee duly endorsed for transfer to the Company and
accompanied by appropriate evidence of genuineness and authority
satisfactory to the Company and the Trustee duly executed by, the holder
thereof (or his attorney duly authorized in writing), and the Company
shall execute, and the Trustee shall authenticate and deliver to the
holder of such Note without service charge, a new Note or Notes,
containing identical terms and conditions, of any authorized denomination
as requested by such holder in aggregate principal amount equal to and in
exchange for the unrepurchased portion of the principal of the Note so
surrendered.
(e) On or prior to 1:00 p.m., New York City time on the Repurchase
Date, the Company shall deposit with the Trustee or with a paying agent
(or, if the Company is acting as its own paying agent, segregate and hold
in trust as provided in Section 5.4) the Repurchase Price and Additional
Repurchase Amount, if any, in cash for payment to the holder on the
repurchase date.
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(f) If the Company is unable to repurchase on the repurchase date
all of the Notes (or portions thereof) as to which the repurchase right
has been properly exercised, the aggregate amount of Notes the Company may
repurchase shall be allocated pro rata among each Note (or portion
thereof) surrendered for repurchase, based on the principal amount of such
Note, in proportion to the aggregate amount of Notes surrendered for
repurchase.
(g) All Notes delivered for repurchase shall be delivered to the
Trustee to be canceled in accordance with the provisions of Section 2.8.
Section 16.3 Certain Definitions
For purposes of this Article XVI:
(a) The term "beneficial owner" shall be determined in accordance
with Rule 13d-3 and 13d-5, as in effect on the date of the original
execution of this Indenture, promulgated by the Commission pursuant to the
Exchange Act.
(b) The term "person" or "group" shall include any syndicate or
group which would be deemed to be a "person" under Section 13(e) and 14(d)
of the Exchange Act as in effect on the date of the original execution of
this Indenture.
(c) The term "Continuing Director" means at any date a member of the
Company's Board of Directors (i) who was a member of such board on the
date of the Securities Purchase Agreement or (ii) who was nominated or
elected by at least a majority of the directors who were Continuing
Directors at the time of such nomination or election or whose election to
the Company's Board of Directors was recommended or endorsed by at least a
majority of the directors who were Continuing Directors at the time of
such nomination or election or such lesser number comprising a majority of
a nominating committee if authority for such nominations or elections has
been delegated to a nominating committee whose authority and composition
have been approved by at least a majority of the directors who were
Continuing Directors at the time such committee was formed. (Under this
definition, if the Board of Directors of the Company as of the date of
this Indenture were to approve a new director or directors and then
resign, no Change in Control would occur even though all of the current
members of the Board of Directors would thereafter cease to be in office).
(d) The term "Repurchase Event" means a Change in Control or a
Termination of Trading.
(e) A "Change in Control" shall be deemed to have occurred when (i)
any "person" or "group" (as such terms are used in Sections 13(e) and
14(d) of the Exchange Act) is or becomes the beneficial owner of shares
representing more than 50% of the combined voting power of the then
outstanding securities entitled to vote generally in elections of
directors of the Company (the "Voting Stock"); (ii) approval by the
shareholders of the Company of any plan or proposal for the liquidation,
dissolution or winding up of the Company; (iii) the Company (A)
consolidates with or merges into any
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other corporation 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 into other assets or securities 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 corporation resulting from such
transaction in substantially the same proportion as their ownership of the
Voting Stock immediately before such transaction, or (B) conveys,
transfers or leases all or substantially all of its assets to any Person
(other than a wholly-owned subsidiary as a result of which the Company
becomes a holding company); or (iv) any time Continuing Directors do not
constitute a majority of the Board of Directors of the Company (or, if
applicable, a successor corporation to the Company); provided that a
Change in Control shall not be deemed to have occurred if at least ninety
percent (90%) of the consideration (excluding cash payments for fractional
shares) in the transaction or transactions constituting the Change in
Control consists of (and the capital stock into which the Notes would be
convertible consists of) shares of capital stock 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.
(f) A "Termination of Trading" shall have occurred if the Common
Stock of Rockford shall not be authorized for quotation or listing on The
New York Stock Exchange, Inc. (the "NYSE"), the American Stock Exchange,
Inc. ("AMEX") or The Nasdaq National Market or SmallCap Market ("NASDAQ").
ARTICLE XVII
COLLATERAL AND SECURITY DOCUMENTS
Collateral and Security Documents.
In order to secure the due and punctual payment of the Notes, the Company
and AII have entered into the Security Agreement and the other Security
Documents to create the Junior Liens on the Collateral in accordance with the
terms thereof. Pursuant to the provisions of the Security Agreement, the other
Security Documents and this Indenture, the rights and remedies of the Trustee
and the Holders of the Notes in the Collateral shall be subordinate and subject
to the rights and remedies of the holders of the Senior Liens in accordance with
the terms of the Security Agreement and the other Security Documents.
(a) Each Holder of a Note, by accepting such Note, agrees to all the
terms and provisions of the Security Agreement and the other Security
Documents.
(b) The Collateral Agent is hereby authorized and directed to enter
into the Security Documents, and to execute such agreements as
attorney-in-fact on behalf of the holders, and take any and all actions
required or permitted by the terms hereof and thereof.
Application of Proceeds of Collateral.
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Upon any realization upon the Collateral by the Collateral Agent, the
proceeds thereof shall be applied in accordance with the terms of the Security
Documents and the terms hereof.
Possession, Use and Release of Collateral.
(c) Unless an Event of Default shall have occurred and be
continuing, subject to the terms of the Security Documents, the Company
and AII will have the right to remain in possession and retain exclusive
control of the Collateral securing the Notes (other than any cash,
securities, obligations and cash equivalents constituting part of the
Collateral and deposited with the Collateral Agent in accordance with the
provisions of the Security Documents and other than as set forth in the
Security Documents), to freely operate the Collateral and to collect,
invest and dispose of any income thereon.
(d) Each holder, by accepting such Note, acknowledges that (i) so
long as any First Priority Lien Obligations (or any commitments or letters
of credit in respect thereof) are outstanding, the holders of First
Priority Lien Obligations shall have the exclusive right and authority to
determine the release, sale, or other disposition with respect to the
Collateral, and (ii) the Trustee or holders will not be entitled to take
any action whatsoever with respect to the Collateral and the holders of
the First Priority Lien Obligations may, without the consent of the
holders or the Trustee, take, or cause to be taken, actions with respect
to the Collateral (including the release of the Senior Liens on the
Collateral). If at any time or from time to time Collateral that also
secures the First Priority Lien Obligations is released or otherwise
disposed of pursuant to the terms of the relevant governing documents, as
applicable, such Collateral securing the Notes shall be automatically
released or disposed of; provided, however, that if an Event of Default
under this Indenture exists as of the date on which the First Priority
Lien Obligations are repaid in full, the Collateral securing the Notes
shall not be released until such Event of Default and all other Events of
Default shall have been cured or otherwise waived except to the extent
such Collateral was disposed of in order to repay the First Priority Lien
Obligations. Each holder of a Note, by accepting such Note, directs the
Collateral Agent to take such actions as directed by the holders of the
First Priority Lien Obligations in accordance with this Section 17.3.
(e) At such time as (i) the First Priority Lien Obligations have
been paid in full in cash in accordance with the terms thereof, and all
commitments and letters of credit thereunder have been terminated, or (ii)
the holders of the First Priority Lien Obligations have released their
Senior Liens on all or any portion of the Collateral, the Junior Liens on
the Collateral shall also be automatically released to the same extent;
provided, however, that (x) in the case of clause (i) of this sentence, if
an Event of Default under this Indenture exists as of the date on which
the First Priority Lien Obligations are repaid in full or terminated as
described in clause (i), the Junior Liens on the Collateral shall not be
released except to the extent the Collateral or any portion thereof was
disposed of in order to repay the First Priority Lien Obligations secured
by the Collateral, and thereafter, the Trustee (acting at the direction of
the holders of a majority of outstanding principal amount of Notes) shall
have the right to direct the Collateral Agent to foreclose upon the
Collateral (but in such event, the Junior Liens shall be released when
such Event of
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Default and all other Events of Default under this Indenture cease to
exist), or (y) in the case of clause (ii) of this sentence, if the First
Priority Lien Obligations (or any portion thereof) are thereafter secured
by assets that would constitute Collateral, the Notes shall then be
secured by a Junior Lien on such Collateral, to the same extent provided
pursuant to the Security Documents as then in effect immediately prior to
the release of the Liens on the Collateral. If the Company subsequently
enters into a new Senior Facility or other First Priority Lien Obligations
that are secured by assets of the Company and/or its Subsidiaries of the
type constituting Collateral, then the Notes shall be secured at such time
by a Junior Lien on the collateral securing such First Priority Lien
Obligations (to the extent such assets are of the type that constitute
Collateral) to the same extent (in all material respects) as then in
effect immediately prior to the release of the Liens on the Collateral.
(f) Notwithstanding the provisions set forth in this Section 17.3,
the Company and its Subsidiaries may, without any release or consent by
the Collateral Agent or the Trustee, perform a number of activities in the
ordinary course in respect of the Collateral to the extent permitted
pursuant to the Security Documents and this Indenture.
Opinion of Counsel
So long as the Security Documents have not been terminated in accordance
with the terms thereof, the Company shall deliver to the Trustee, so long as
such delivery is required by Section 314(b) of the TIA, on the Closing Date and
thereafter, at least annually, within 30 days of June 1 of each year (commencing
with June 1, 2004), an Opinion of Counsel either stating that in the opinion of
such counsel, such action has been taken with respect to the recording, filing,
rerecording and refiling of this Indenture or any Security Document as is
necessary to maintain the Security Interests, and reciting the details of such
action, or stating that in the opinion of such counsel, no such action is
necessary to maintain such Security Interests.
Further Assurances
Upon the reasonable request of the Collateral Agent, the Company and AII
shall, each at its own expense, make, execute, endorse, acknowledge, file and/or
deliver to the Collateral Agent from time to time such lists, descriptions and
designations of its Collateral, warehouse receipts, receipts in the nature of
warehouse receipts, bills of lading, documents of title, vouchers, invoices,
schedules, confirmatory assignments, conveyances, financing statements, transfer
endorsements, powers of attorney, certificates, reports and other assurances or
instruments and take such further steps relating to the Collateral and other
property or rights covered by the Security Interests, as are reasonably
necessary to perfect, preserve or protect the Collateral Agent's Security
Interest in the Collateral.
Trust Indenture Act Requirements
The release of any Collateral from the Junior Lien of any of the Security
Documents or the release of, in whole or in part, the Junior Liens created by
any of the Security Documents, will not be deemed to impair the Security
Interests in contravention of the provisions hereof if and to the extent the
Collateral or Junior Liens are released pursuant to the applicable Security
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Documents and pursuant to the terms hereof. Each holder of the Notes
acknowledges that a release of Collateral or Liens strictly in accordance with
the terms of the Security Documents and the terms hereof will not be deemed for
any purpose to be an impairment of the Security Documents or otherwise contrary
to the terms of this Indenture. So long as any First Priority Lien Obligations
are outstanding, the Company and the Guarantor shall comply with TIA Section
314(d) relating to the release of property or securities from the Junior Lien
hereof but only to the extent required by the TIA.
Suits to Protect Collateral
The Trustee shall have the authority to direct the Collateral Agent to
institute and to maintain such suits and proceedings as the Trustee may deem
expedient to prevent any impairment of the Collateral by any acts that may be
unlawful or in violation of any of the Security Documents or this Indenture, and
such suits and proceedings as the Trustee may deem expedient to preserve or
protect its interests and the interests of the holders of the Notes in the
Collateral (including suits or proceedings to restrain the enforcement of or
compliance with any legislative or other governmental enactment, rule or order
that may be unconstitutional or otherwise invalid if the enforcement of, or
compliance with, such enactment, rule or order would impair the Security
Interests or be prejudicial to the interests of the holders of the Notes).
Purchaser Protected
In no event shall any purchaser in good faith or other transferee of any
property purported to be released hereunder be bound to ascertain the authority
of the Trustee to direct the Collateral Agent to execute the release or to
inquire as to the satisfaction of any conditions required by the provisions
hereof for the exercise of such authority or to see to the application of any
consideration given by such purchaser or other transferee; nor shall any
purchaser or other transferee of any property or rights permitted to be sold by
this Article XVII, be under obligation to ascertain or inquire into the
authority of the Company or AII, as applicable, to make any such sale or other
transfer.
Powers Exercisable by Receiver or Trustee
In case the Collateral shall be in the possession of a receiver or
trustee, lawfully appointed, the powers conferred in this Article XVII upon the
Company or AII, as applicable, with respect to the release, sale or other
disposition of such property may be exercised by such receiver or trustee, and
an instrument signed by such receiver or trustee shall be deemed the equivalent
of any similar instrument of the Company or AII, as applicable, or of any
officer or officers thereof required by the provisions of this Article XVII.
Release upon Termination of Company's Obligations
In the event that the Company delivers an Officers' Certificate and
Opinion of Counsel certifying that (a) its obligations under this Indenture have
been satisfied and discharged by complying with the provisions of Article XIII,
or (b) the Company's average monthly EBITDA for any twelve consecutive months
commencing with the month ending June 30, 2004 has been positive, the Trustee
shall (i) execute, deliver and authorize such releases, termination
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statements and other instruments (in recordable form, where appropriate) as the
Company or AII, as applicable, may reasonably request to evidence the
termination of the Security Interests created by the Security Documents and (ii)
not be deemed to hold the Security Interests for its benefit and the benefit of
the holders of the Notes.
Limitation on Duty of Trustee in Respect of Collateral
(g) Beyond the exercise of reasonable care in the custody
thereof, the Trustee shall have no duty under this Indenture as to
any Collateral in its possession or control or in the possession or
control of any agent or bailee or any income thereon or as to
preservation of rights against prior parties or any other rights
pertaining thereto and the Trustee shall not be responsible for
filing any financing or continuation statements or recording any
documents or instruments in any public office at any time or times
or otherwise perfecting or maintaining the perfection of any
security interest in the Collateral. The Trustee shall be deemed to
have exercised reasonable care in the custody of the Collateral in
its possession if the Collateral is accorded treatment substantially
equal to that which it accords its own property and shall not be
liable or responsible for any loss or diminution in the value of any
of the Collateral, by reason of the act or omission of any carrier,
forwarding agency or other agent or bailee selected by the Trustee
in good faith.
(h) The Trustee shall not be responsible for the existence,
genuineness or value of any of the Collateral or for the validity,
perfection, priority or enforceability of the Liens in any of the
Collateral, whether impaired by operation of law or by reason of any
action or omission to act on its part hereunder, except to the
extent such action or omission constitutes gross negligence, bad
faith or willful misconduct on the part of the Trustee, for the
validity or sufficiency of the Collateral or any agreement or
assignment contained therein, for the validity of the title of the
Company to the Collateral, for insuring the Collateral or for the
payment of taxes, charges, assessments or Liens upon the Collateral
or otherwise as to the maintenance of the Collateral. The Trustee
shall have no duty to ascertain or inquire as to the performance or
observance of any of the terms of this Indenture or the Security
Documents by the Company or the Collateral Agent.
Authorization of Trustee
The Trustee is hereby authorized to enter into, or cause any co-collateral
agent to enter into, any Security Document or any other document necessary or
appropriate in connection with any such Security Document. The Trustee shall
have no duty to act outside of the United States in respect of any Collateral
located in any jurisdiction other than the United States ("Foreign Collateral")
but shall to the extent required to create Liens on the Foreign Collateral, or
on part thereof, for the benefit of the holders and at the specific request of
the Issuer, appoint for and on behalf of the holders one of more co-collateral
agents to act on behalf of the holders with respect to such Foreign Collateral.
Intercreditor Agreement Controls
Notwithstanding anything herein to the contrary, the Lien and security
interest granted to the Trustee pursuant to this Indenture and the exercise of
any right or remedy by the Trustee
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hereunder are subject to the provisions of the Intercreditor Agreement. In the
event of any conflict between the terms of the Intercreditor Agreement and this
Indenture, the terms of the Intercreditor Agreement will govern.
ARTICLE XVIII
MISCELLANEOUS PROVISIONS
Section 18.1 Provisions Binding on Company's Successors
All the covenants, stipulations, promises and agreements of the Company
contained in this Indenture shall bind its successors and assigns whether so
expressed or not.
Section 18.2 Official Acts by Successor Corporation
Any act or proceeding by any provision of this Indenture authorized or
required to be done or performed by any board, committee or officer of the
Company shall and may be done and performed with like force and effect by the
like board, committee or officer of any corporation that shall at the time be
the lawful sole successor of the Company.
Section 18.3 Addresses for Notices, Etc.
Any notice or demand which by any provision of this Indenture is required
or permitted to be given or served by the Trustee or by the holders of Notes on
the Company and any notice, direction, request or demand hereunder to or upon
the Trustee or to or upon any Noteholder shall be deemed to have been
sufficiently given or made, for all purposes (i) upon receipt, when delivered
personally; (ii) upon receipt, when sent by facsimile (evidence by mechanically
or electronically generated receipt by the sender's facsimile machine); or (iii)
one (1) Business Day after deposit with a nationally recognized overnight
delivery service, in each case properly addressed to the party to receive the
same. The addresses and facsimile numbers of such communications shall be:
If to the Company:
Rockford Corporation
000 Xxxxx Xxxxxxxx Xxxxx
Xxxxx, Xxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Mr. W. Xxxx Xxxxxx
President and Chief Executive Officer
If to the Trustee:
BNY Western Trust Company
000 X. Xxxxxx Xxxxxx - Xxxxx 000
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Xxx Xxxxxxx, XX 00000
Attention: Corporate Trust Administration
Facsimile: 000-000-0000
If to a Noteholder:
At the address and facsimile number of such Noteholder,
as set forth on the Note Register, which shall initially
include the information set forth in the Securities
Purchase Agreement regarding notices.
The Trustee, by notice to the Company, may designate additional or
different addresses for subsequent notices or communications. The Trustee shall
use reasonable commercial efforts to provide any notice of default, notice of
redemption and notice of conversion to each holder by facsimile, if and to the
extent such holder's facsimile number is set forth in the Note Register.
Failure to give a notice or communication to a Noteholder or any defect in
it shall not affect its sufficiency with respect to other Noteholders. If a
notice or communication is given or made in the manner provided above, it is
duly given or made, whether or not the addressee receives it.
Section 18.4 Governing Law; Jurisdiction; Jury Trial
This Indenture and each Note shall be deemed to be a contract made under
the laws of the State of California and for all purposes shall be construed in
accordance with the internal laws of the State of California without giving
effect to any choice of law or conflict of law provision or rule (whether of the
State of California or any other jurisdictions) that would cause the application
of the laws of any jurisdictions other than the State of California. Each party
hereby irrevocably submits to the non-exclusive jurisdiction of the state and
federal courts sitting in the City of Los Angeles, for the adjudication of any
dispute hereunder or in connection herewith or with any transaction contemplated
hereby or discussed herein, and hereby irrevocably waives, and agrees not to
assert in any suit, action or proceeding, any claim that it is not personally
subject to the jurisdiction of any such court, that such suit, action or
proceeding is brought in an inconvenient forum or that the venue of such suit,
action or proceeding is improper. Each party hereby irrevocably waives personal
service of process and consents to process being served in any such suit, action
or proceeding by mailing a copy thereof to such party at the address for such
notices to it under this Indenture and agrees that such service shall constitute
good and sufficient service of process and notice thereof. Nothing contained
herein shall be deemed to limit in any way any right to serve process in any
manner permitted by law. If any provision of this Indenture shall be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect the validity or enforceability of the remainder of this Indenture in that
jurisdiction or the validity or enforceability of any provision of this
Indenture in any other jurisdiction. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY
RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION
OF ANY DISPUTE HEREUNDER OR IN CONNECTION
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HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED
HEREBY.
Section 18.5 Evidence of Compliance with Conditions Precedent;
Certificates to Trustee
Upon any application or demand by the Company to the Trustee to take any
action under any of the provisions of this Indenture, the Company shall furnish
to the Trustee an Officer's Certificate stating that in the opinion of the
person executing such Officer's Certificate all conditions precedent, if any,
provided for in this Indenture relating to the proposed action have been
satisfied, and an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent have been satisfied.
Each certificate or opinion provided for by or on behalf of the Company in
this Indenture and delivered to the Trustee with respect to compliance with a
condition or covenant provided for in this Indenture shall include (1) a
statement that the person making such certificate or opinion has read such
covenant or condition; (2) a brief statement as to the nature and scope of the
examination or investigation upon which the statement or opinion contained in
such certificate or opinion is based; (3) a statement that, in the opinion of
such person, he has made such examination or investigation as is necessary to
enable him to express an informed opinion as to whether or not such covenant or
condition has been complied with; and (4) a statement as to whether or not, in
the opinion of such person, such condition or covenant has been satisfied or
waived.
Section 18.6 Legal Holidays
In any case where the date of maturity of interest on or principal of the
Notes or the date fixed for redemption of any Note will not be a Business Day,
then payment of such interest on or principal of the Notes need not be made on
such date, but may be made on the next succeeding Business Day with the same
force and effect as if made on the date of maturity or the date fixed for
redemption, and no interest shall accrue for the period from and after such
date.
Section 18.7 Trust Indenture Act
This Indenture is hereby made subject to, and shall be governed by, the
provisions of the Trust Indenture Act required to be part of and to govern
indentures qualified under the Trust Indenture Act; provided, however, that this
Section 18.7 shall not require that this Indenture or the Trustee be qualified
under the Trust Indenture Act prior to the time such qualification is in fact
required under the terms of the Trust Indenture Act, nor shall it constitute any
admission or acknowledgment by any party hereto that any such qualification is
required prior to the time such qualification is in fact required under the
terms of the Trust Indenture Act. If any provision hereof limits, qualifies or
conflicts with another provision hereof that is required to be included in an
indenture qualified under the Trust Indenture Act, such required provision shall
control.
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Section 18.8 Benefits of Indenture
Nothing in this Indenture or in the Notes, expressed or implied, shall
give to any Person, other than the parties hereto, any paying agent, any
authenticating agent, any Note Registrar and their successors hereunder, the
holders of Notes and the holders of Senior Indebtedness, any benefit or any
legal or equitable right, remedy or claim under this Indenture.
Section 18.9 Table of Contents, Headings, Etc.
The table of contents and the titles and headings of the articles and
sections of this Indenture have been inserted for convenience of reference only,
are not to be considered a part hereof, and shall in no way modify or restrict
any of the terms or provisions hereof.
Section 18.10 Authenticating Agent
The Trustee may appoint an authenticating agent which shall be authorized
to act on its behalf and subject to its direction in the authentication and
delivery of Notes in connection with the original issuance thereof and transfers
and exchanges of Notes hereunder, including under Sections 2.4, 2.5, 2.6, 2.7
and 3.3, as fully for all intents and purposes as though the authenticating
agent had been expressly authorized by this Indenture and those Sections to
authenticate and deliver Notes. For all purposes of this Indenture, the
authentication and delivery of Notes by the authenticating agent shall be deemed
to be authentication and delivery of such Notes "by the Trustee" and a
certificate of authentication executed on behalf of the Trustee by an
authenticating agent shall be deemed to satisfy any requirement hereunder or in
the Notes for the Trustee's certificate of authentication. Such authenticating
agent shall at all times be a Person eligible to serve as trustee hereunder
pursuant to Section 8.9.
Any corporation into which any authenticating agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, consolidation or conversion to which any authenticating agent
shall be a party, or any corporation succeeding to all or substantially all of
the corporate trust business of any authenticating agent, shall be the successor
of the authenticating agent hereunder, if such successor corporation is
otherwise eligible under this Section, without the execution or filing of any
paper or any further act on the part of the parties hereto or the authenticating
agent or such successor corporation.
Any authenticating agent may at any time resign by giving written notice
of resignation to the Trustee and to the Company. The Trustee may at any time
terminate the agency of any authenticating agent by giving written notice of
termination to such authenticating agent and to the Company. Upon receiving such
a notice of resignation or upon such a termination, or in case at any time any
authenticating agent shall cease to be eligible under this Section, the Trustee
shall promptly appoint a successor authenticating agent (which may be the
Trustee), shall give written notice of such appointment to the Company and shall
mail notice of such appointment to all holders of Notes as the names and
addresses of such holders appear on the Note Register.
The Company agrees to pay to the authenticating agent from time to time
reasonable compensation for its services.
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The provisions of Sections 8.2, 8.3, 8.4, 9.3 and this Section 18.10 shall
be applicable to any authenticating agent.
Section 18.11 Execution in Counterparts
This Indenture may be executed in any number of counterparts, each of
which shall be an original, but such counterparts shall together constitute but
one and the same instrument.
Section 18.12 No Adverse Interpretation of Other Agreements
This Indenture may not be used to interpret another indenture, loan or
debt agreement of the Company or any Subsidiary of the Company. Any such
indenture, loan or debt agreement may not be used to interpret this Indenture.
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IN WITNESS WHEREOF, all of the parties hereto have caused this Indenture
to be duly signed as of the date first written above.
ROCKFORD CORPORATION
By: /s/ W. Xxxx Xxxxxx
-------------------------------
Name: W. Xxxx Xxxxxx
Title: Chief Executive Officer
Attest:
/s/ Xxxxx X. Xxxxxxx
------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Chief Financial Officer
BNY WESTERN TRUST COMPANY
as Trustee
By: /s/ Xxxxx X. XxXxxxxx
-------------------------------
Name: Xxxxx X. XxXxxxxx
Title: V.P. & Bus. Group Mgr.
[SIGNATURE PAGE TO INDENTURE]
EXHIBIT A
FORM OF 4.5% CONVERTIBLE SENIOR SUBORDINATED SECURED NOTE DUE 2009
----------------------------------
ROCKFORD CORPORATION
[FORM OF FACE OF NOTE]
[THE FOLLOWING PARAGRAPH SHALL APPEAR ON THE FACE OF EACH RESTRICTED NOTE.]
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR APPLICABLE
STATE SECURITIES LAWS. THIS SECURITY MAY NOT BE OFFERED FOR SALE, SOLD,
TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
FOR THE SECURITIES UNDER THE SECURITIES ACT OR APPLICABLE STATE SECURITIES LAWS
OR AN EXEMPTION THEREFROM. THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A
BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY THIS SECURITY.
[THE COMPANY MAY, BUT IS NOT OBLIGATED TO, INSTRUCT THE TRUSTEE TO PLACE THE
FOLLOWING PARAGRAPH ON THE FACE OF EACH NOTE HELD BY OR TRANSFERRED TO AN
"AFFILIATE" (AS DEFINED IN RULE 501(B) OF REGULATION D UNDER THE SECURITIES ACT)
OF THE COMPANY:]
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE HELD BY A PERSON WHO MAY BE
DEEMED TO BE AN AFFILIATE OF THE ISSUER FOR PURPOSES OF RULE 144 PROMULGATED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND MAY BE
SOLD ONLY IN COMPLIANCE WITH RULE 144, PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO A VALID EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT. THE SECURITIES MAY BE PLEDGED IN
CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY THE
SECURITIES.
[THE FOLLOWING PARAGRAPH SHALL APPEAR ON THE FACE OF EACH GLOBAL NOTE.]
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THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL
OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES
EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED
PURSUANT TO SECTION 2.6 OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE EXCHANGED
IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.5(b) OF THE INDENTURE, (III) THIS
GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION
2.8 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR
DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY.
ROCKFORD CORPORATION
4.5% Convertible Senior Subordinated Secured Note due 2009
THIS NOTE WAS ISSUED WITH "ORIGINAL ISSUE DISCOUNT" FOR U.S. FEDERAL INCOME TAX
PURPOSES. ROCKFORD CORPORATION WILL PROMPTLY MAKE AVAILABLE TO THE HOLDER HEREOF
INFORMATION REGARDING THE ISSUE DATE, ISSUE PRICE, YIELD TO MATURITY, AMOUNT OF
ORIGINAL ISSUE DISCOUNT AND, AS APPROPRIATE, THE COMPARABLE YIELD AND PROJECTED
PAYMENT SCHEDULE OF THIS NOTE, UPON THE WRITTEN REQUEST OF SUCH HOLDER DIRECTED
TO ROCKFORD CORPORATION AT 000 XXXXX XXXXXXXX XXXXX, XXXXX, XXXXXXX 00000,
ATTN.: CHIEF FINANCIAL OFFICER.
No. _____ $_______________
CUSIP No. 00000XXX0
Rockford Corporation, a corporation duly organized and validly existing
under the laws of the State of Arizona (herein called the "Company", which term
includes any successor corporation under the Indenture referred to on the
reverse hereof), for value received hereby promises to pay to
____________________, or registered assigns, the principal sum of ___________
United States Dollars on June 10, 2009 and to pay interest on said principal sum
semi-annually on June 15 and December 15 of each year (each, an "Interest
Payment Date"), commencing December 15, 2004, at the rate per annum specified in
the title of this Note, accrued from June 10, 2004. The interest so payable on
any June 15 or December 15 will be paid to the person in whose name this Note,
or portion thereof (or one or more Predecessor Notes) is registered at the close
of business on the
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record date, which shall be the 4th day of the month in which the Interest
Payment Date shall occur, whether or not such date is a Business Day; provided
that any such interest not punctually paid or duly provided for shall be payable
as provided in the Indenture. Payment of the principal of and interest accrued
on this Note (including Liquidated Damages, if any) shall be made at the office
or agency of the Company maintained for that purpose, which shall be the
Corporate Trust Office of the Trustee, or at any other office or agency
permitted by the Indenture, in such lawful money of the United States of America
as at the time of payment shall be legal tender for the payment of public and
private debts; provided further, however, that, with respect to any holder of
Notes with an aggregate principal amount equal to or in excess of Five Hundred
Thousand United States Dollars ($500,000), interest on such holder's Notes shall
be paid by wire transfer in immediately available funds in accordance with the
written wire transfer instruction supplied by such holder from time to time to
the Trustee and paying agent (if different from the Trustee) at least five (5)
Business Days prior to the applicable record date.
Reference is made to the further provisions of this Note set forth on the
reverse hereof, including, without limitation, provisions giving a holder of
this Note the right to convert this Note into Common Stock of the Company on the
terms and subject to the limitations referred to on the reverse hereof and as
more fully specified in the Indenture. Such further provisions shall for all
purposes have the same effect as though fully set forth at this place.
This Note shall be deemed to be a contract made under the laws of the
State of New York, and for all purposes shall be construed in accordance with
and governed by the laws of said State.
This Note shall not be valid or become obligatory for any purpose until
the certificate of authentication hereon shall have been manually signed by the
Trustee or a duly authorized authenticating agent under the Indenture.
A-3
IN WITNESS WHEREOF, the Company has caused this Note to be duly executed.
ROCKFORD CORPORATION
-------------------------
[Name, Title]
Attest:
-------------------------------------
[Name, Title]
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
BNY Western Trust Company,
as Trustee, certifies that this is one of the Notes described
in the within-named Indenture.
Dated:
By:
-------------------------------------
Authorized Signatory
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[FORM OF REVERSE OF NOTE]
ROCKFORD CORPORATION
4.5% Convertible Senior Subordinated Secured Note due 2009
This Note is one of a duly authorized issue of Notes of the Company,
designated as its 4.5% Convertible Senior Subordinated Secured Notes due 2009
(herein called the "Notes"), limited to the aggregate principal amount of Twelve
Million, Five Hundred Thousand United States Dollars, ($12,500,000) all issued
or to be issued under and pursuant to an Indenture dated as of June10, 2004
(herein called the "Indenture"), between the Company and BNY Western Trust
Company (herein called the "Trustee"), to which the Indenture and all indentures
supplemental thereto reference is hereby made for a description of the rights,
limitations of rights, obligations, duties and immunities thereunder of the
Trustee, the Company and the holders of the Notes. All capitalized terms used
herein without definition shall have the meaning set forth in the Indenture.
In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal of, premium, if any, and accrued
interest on all Notes may be declared, and upon said declaration shall become,
due and payable, in the manner, with the effect and subject to the conditions
provided in the Indenture. Liquidated damages paid pursuant to Section 15.2 of
the Indenture, if any, shall be paid within ten (10) Business Days of the date
from which such liquidated damages accrued pursuant to Section 15.2. Liquidated
Damages on the Notes paid pursuant to Section 2(f) of the Registration Rights
Agreement, if any, shall be paid at the times and in the manner provided
therein.
The Indenture contains provisions permitting the Company and the Trustee
in certain limited circumstances, without the consent of the holders of the
Notes, and in other circumstances, with the consent of the holders of not less
than a majority in aggregate principal amount of the Notes at the time
outstanding, evidenced as in the Indenture provided, to execute amendments to
the Indenture or supplemental indentures adding any provisions to or changing in
any manner or eliminating any of the provisions of the Indenture or of any
supplemental indenture or modifying in any manner the rights of the holders of
the Notes; provided, however, that no such amendment or supplemental indenture
shall (i) extend the fixed maturity of any Note, or reduce the rate or extend
the time of payment of interest thereon, or reduce the principal amount thereof
or premium, if any, thereon, or reduce any amount payable on redemption or
repurchase thereof, impair, or change in any respect adverse to the holder of
Notes, the obligation of the Company to repurchase any Note at the option of the
holder upon the happening of a Repurchase Event, or impair or adversely affect
the right of any Noteholder to institute suit for the payment thereof, or change
the currency in which the Notes are payable, or impair or change in any respect
adverse to the Noteholders the right to convert the Notes into Common Stock
subject to the terms set forth herein, including Section 15.7, without the
consent of the holder of each Note so affected, or (ii) reduce the aforesaid
percentage of Notes, the
A-5
holders of which are required to consent to any such supplemental indenture,
without the consent of the holders of all Notes then outstanding.
It is also provided in the Indenture that the holders of not less than a
majority in aggregate principal amount of the Notes at the time outstanding may
on behalf of the holders of all of the Notes waive any past default or Event of
Default under the Indenture and its consequences except (i) a default in the
payment of interest or premium, if any, on, or the principal of, the Notes when
due, (ii) a failure by the Company to convert any Notes into Common Stock or
(iii) a default in respect of a covenant or provisions of the Indenture which
under Article XI thereof cannot be modified or amended without the consent of
the holders of all Notes then outstanding. Any such consent or waiver by a
holder of this Note (unless revoked as provided in the Indenture) shall be
conclusive and binding upon such holder and upon all future holders and owners
of this Note and any Notes which may be issued in exchange or substitution
hereof, irrespective of whether any notation thereof is made upon this Note or
such other Notes.
The payment of principal of, premium, if any, and interest on the Notes
will be subordinated in right of payment to the prior payment in full of Senior
Indebtedness as set forth in Article IV of the Indenture.
Interest on the Notes shall be computed on the basis of a 360-day year
comprised of twelve 30-day months.
The Notes are issuable in registered form without coupons in denominations
of One Thousand United States Dollars ($1,000) principal amount and integral
multiples thereof. At the office of Trustee or the Company referred to on the
face hereof, and in the manner and subject to the limitations provided in the
Indenture, without payment of any service charge but with payment of a sum
sufficient to cover any tax, assessments or other governmental charges that may
be imposed in connection with any registration or exchange of Notes, Notes may
be exchanged for a like aggregate principal amount of Notes of other authorized
denominations.
(1) From and after June 10, 2007, the Company may, at its option, redeem
all or any part of the Notes, upon notice as set forth in the Indenture, and the
Company shall pay each holder of Notes redeemed a redemption price equal to the
principal amount of such Notes, plus accrued and unpaid interest thereon, if
any, to, but excluding, the date of redemption.
If such notice of redemption has been given as provided in the Indenture,
the Notes or portion of Notes called for redemption shall, unless converted into
Common Stock pursuant to the terms of the Indenture, become due and payable on
the date and at the place or places stated in such notice at the applicable
redemption price and interest accrued to, but excluding, the date fixed for
redemption, and on and after such date (unless the Company shall default in the
payment of such Notes at the redemption price and interest accrued to, but
excluding, said date) interest on the Notes or portion of Notes so called for
redemption shall cease to accrue and such Notes shall cease after the close of
business on the Business Day next preceding the date fixed for redemption to be
convertible into Common Stock and, except as provided in Sections 8.5 and 13.4
of the Indenture, to be entitled to any benefit or security under the Indenture,
and the holders of such Notes shall have no right in respect of such Notes
except the right to receive the redemption price and unpaid interest to,
A-6
but excluding, the date fixed for redemption. On presentation and surrender of
such Notes at a place of payment specified in such notice, such Notes or the
specified portions thereof to be redeemed shall be paid and redeemed by the
Company at the applicable redemption price and interest accrued thereon to, but
excluding, the date fixed for redemption; provided that, if the applicable
redemption date is an Interest Payment Date, then the semi-annual payment of
interest becoming due on such date shall be payable to the holders of such Notes
registered as such on the relevant record date subject to the terms and
provisions of Section 2.3 of the Indenture.
The Notes are not subject to redemption through the operation of any
sinking fund.
Upon the occurrence of a "Repurchase Event," the Noteholder has the right,
at such holder's option, to require the Company to repurchase all or any portion
of such holder's Notes or any portion thereof (in the principal amounts of One
Thousand United States Dollars ($1,000) or integral multiples thereof) on the
40th calendar day (or, if such 40th day is not a Business Day, the next
succeeding Business Day) after notice of such Repurchase Event at a price equal
to (i) 115% of the principal amount of Notes such holder elects to require the
Company to repurchase, if the Repurchase Event occurs prior to or on June 10,
2006, (ii) 110% of the principal amount of Notes such holder elects to require
the Company to repurchase, if the Repurchase Event occurs after June 10, 2006
but prior to or on June10, 2008 and (iii) 105% of the principal amount of the
Notes such holder elects to require the Company to repurchase if the Repurchase
Event occurs after June 10, 2008, but prior to or on June 10, 2009, together, in
each case, with accrued interest to the date fixed for repurchase; provided that
if such repurchase date is an Interest Payment Date, then the semi-annual
payment of interest becoming due on such date shall be payable to the holders of
such Notes registered as such on the relevant record date subject to the terms
and provisions of Section 2.3 of the Indenture. If the repurchase date is prior
to June 10, 2007, the Company shall make an additional payment in cash to each
holder of Notes with respect to the Notes repurchased, in an amount equal to
$135 per each One Thousand United States Dollars ($1,000) principal amount of
the Note, less the amount of any interest actually paid on the Note prior to the
repurchase date (and, if the Note is repurchased between a record date and the
next Interest Payment Date, less interest payable on each One Thousand United
States Dollars ($1,000) principal amount of the Note on such next Interest
Payment Date). The Company or, at the written request of the Company, the
Trustee shall mail to all holders of record of the Notes a notice of the
occurrence of a Repurchase Event and of the repurchase right arising as a result
thereof on or before the fifth (5th) Business Day after the occurrence of such
Repurchase Event. If a redemption date pursuant to Article III of the Indenture
shall occur prior to any repurchase date established pursuant to a Company
Notice under Section 16.2 of the Indenture, provided that the Company shall have
deposited or set aside an amount of money sufficient to redeem such Notes as set
forth in Section 3.2 of the Indenture on or before such repurchase date, all
such Notes shall be redeemed pursuant to Article III of the Indenture and the
repurchase rights under Article XVI of the Indenture shall have no effect.
Subject to the provisions of the Indenture, the holder hereof has the
right, at its option, at any time following the date of original issuance of the
Notes and prior to the close of business on June 10, 2009 (except that, with
respect to any Note or portion of a Note that shall be called for redemption,
such right shall terminate, except as otherwise provided in the Indenture, at
the close of business on the Business Day next preceding the date fixed for
redemption unless the Company shall default in payment due upon redemption), to
convert the principal hereof or any portion of such
A-7
principal which is One Thousand United States Dollars ($1,000) or an integral
multiple thereof, into that number of fully paid and non-assessable shares of
the Company's Common Stock, as said shares shall be constituted at the date of
conversion, obtained by dividing the principal amount of this Note or portion
thereof to be converted by the conversion price of $5.29 or such conversion
price as adjusted from time to time as provided in the Indenture, upon surrender
of this Note, together with a conversion notice as provided in the Indenture and
this Note, to the Company at the office or agency of the Company maintained for
that purpose, which shall be the Corporate Trust Office of the Trustee, or at
any other office or agency permitted by the Indenture, and, unless the shares
issuable on conversion are to be issued in the same name as this Note, duly
endorsed by, or accompanied by instruments of transfer in form satisfactory to
the Company duly executed by, the holder or by his duly authorized attorney. If
a conversion notice is delivered prior to June 10, 2007 and within ninety (90)
days following a Repurchase Event, the Company shall make an additional payment
in cash to each holder of Notes with respect to the Notes converted, in an
amount equal to $135 per each One Thousand United States Dollars ($1,000)
principal amount of the Note (the "Additional Conversion Payment"), less the
amount of any interest actually paid on the Note prior to the repurchase date
(and, if the Note is converted between a record date and the next Interest
Payment Date, less interest payable on each One Thousand United States Dollars
($1,000) principal amount of the Note on such next Interest Payment Date). The
Company shall pay in cash, on this Note or portion thereof surrendered for
conversion during the period from the close of business on any Interest Payment
Date to which interest has been fully paid through the close of business on the
Business Day preceding the record date for the next such Interest Payment Date,
accrued and unpaid interest, if any, to, but excluding, the date of conversion.
Any such payment of interest shall be made with ten (10) Business Days after the
Conversion Date. Notwithstanding the foregoing, if this Note shall be
surrendered for conversion during the period from the close of business on any
record date for any Interest Payment Date through the close of business on the
Business Day next preceding such Interest Payment Date, the holder (unless the
Note or the portion thereof being converted shall have been called for
redemption pursuant to a redemption notice mailed to the Noteholders in
accordance with Section 3.2 of the Indenture or shall have become due prior to
such Interest Payment Date as a result of a Repurchase Event) must, at the time
of conversion of the Note, pay by wire transfer of immediately available funds
or other funds acceptable to the Company, 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 shall
exist at the time of conversion a default in the payment of interest on the
Notes. No fractional shares of Common Stock will be issued upon any conversion,
but an adjustment in cash will be paid to the holder, as provided in the
Indenture, in respect of any fraction of a share which would otherwise be
issuable upon the surrender of any Note or Notes for conversion.
The Company may, at its option, automatically convert all or a portion of
the Notes (an "Automatic Conversion") at any time prior toJune 10, 2007 if the
Closing Price (as defined in the Indenture) per share of the Common Stock has
exceeded two hundred and twenty five percent (225%) of the Conversion Price then
in effect for at least fifteen (15) Trading Days within a period of twenty (20)
consecutive Trading Days ending five (5) Trading Days prior to the date the
Company gives to all holders of Notes a notice specifying the date on which an
Automatic Conversion will become effective, provided that either (x) a
registration statement covering the resale of the Conversion Shares is effective
and available for use from the date of the notice of Automatic Conversion
through and including the earlier of the date on which the Automatic
A-8
Conversion becomes effective or the last date on which the registration
statement is required to be kept effective under the terms of the Registration
Rights Agreement, or (y) the shares of Common Stock issuable upon the Automatic
Conversion may be sold pursuant to Rule 144 under the Securities Act. If the
effective date of an Automatic Conversion is prior to June 10, 2007, the Company
shall make an additional payment in cash to each holder of Notes with respect to
the Notes converted, in an amount equal to $135 per each One Thousand United
States Dollars ($1,000) principal amount of the Note (the "Company Conversion
Provisional Payment"), less the amount of any interest actually paid on the Note
prior to the effective date of the Automatic Conversion (and, if the Note is
converted between a record date and the next Interest Payment Date, less
interest payable on each One Thousand United States Dollars ($1,000) principal
amount of the Note on such next Interest Payment Date).
Unless the Company shall have theretofore called for redemption all of the
Notes then outstanding, if the Company elects to convert all or a portion of the
Notes pursuant to its Automatic Conversion right, the Company, or at its request
(which must be received by the Trustee at least five (5) Business Days prior to
the date the Trustee is requested to give notice as described below unless a
shorter period is agreed to by the Trustee), the Trustee in the name of and at
the expense of the Company, shall mail or cause to be mailed a notice of the
Automatic Conversion not more than thirty (30) days but not less than five (5)
days before the date of effectiveness of the Automatic Conversion as set forth
in the Indenture. In case the Notes are to be converted in part only, the notice
shall state the portion of the principal amount thereof to be converted and
shall state that on and after the effective date of the Automatic Conversion,
upon surrender of such Note, a new Note or Notes in principal amount equal to
the unconverted portion thereof will be issued.
In connection with any redemption of Notes, the Company may arrange for
the purchase and conversion of any Notes not converted prior to the expiration
of such conversion right by an agreement with one or more investment bankers or
other purchasers to purchase such Notes by paying to the Trustee in trust for
the Noteholders, on or before the date fixed for redemption, an amount not less
than the applicable redemption price and interest accrued to the date fixed for
redemption, of such Notes.
[INCLUDE EITHER OF THE FOLLOWING PARAGRAPHS ONLY BASED UPON HOLDER'S
ELECTION UNDER SECTION 2(k) OF THE SECURITIES PURCHASE AGREEMENT] [Conversion
Limitation. The holder hereby agrees that in no event will it convert any of the
Notes in excess of the number of such Notes upon the conversion of which (x) the
number of shares of Common Stock beneficially owned by such holder (other than
the shares which would otherwise be deemed beneficially owned except for being
subject to a limitation on conversion analogous to the limitation contained in
this paragraph) plus (y) the number of shares of Common Stock issuable upon the
conversion of such Notes would be equal to or exceed 9.99% of the number of
shares of Common Stock then issued and outstanding (after giving effect to such
conversion), it being the intent of the Company and the holder that the holder
not be deemed at any time to have the power to vote or dispose of greater than
9.99% of the number of shares of Common Stock issued and outstanding. As used
herein, beneficial ownership shall be determined in accordance with Section
13(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act").
To the extent that the limitation contained in this paragraph applies (and
without limiting any rights the Company may otherwise have), the Company may
rely on the holder's determination of whether the Notes are
A-9
convertible pursuant to the terms hereof, the Company having no obligation
whatsoever to verify or confirm the accuracy of such determination, and the
submission of the Conversion Notice by the holder shall be deemed to be the
holder's representation that the Notes specified therein are convertible
pursuant to the terms hereof. Nothing contained herein shall be deemed to
restrict the right of a holder to convert the Notes at such time as the
conversion thereof will not violate the provisions of this paragraph.]
[Each holder hereby agrees that in no event will it convert any of the
Notes in excess of the number of such Notes upon the conversion of which (x) the
number of shares of Common Stock beneficially owned by such holder
(other than the shares which would otherwise be deemed beneficially owned except
for being subject to a limitation on conversion analogous to the limitation
contained in this paragraph) plus (y) the number of shares of Common Stock
issuable upon the conversion of such Notes, would be equal to or exceed 4.99% of
the number of shares of Common Stock then issued and outstanding (after giving
effect to such conversion), it being the intent of the Company and the holder
that the holder not be deemed at any time to have the power to vote or dispose
of greater than 4.99% of the number of shares of Common Stock issued and
outstanding. As used herein, beneficial ownership shall be determined in
accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"). To the extent that the limitation contained in this
paragraph applies (and without limiting any rights the Company may otherwise
have), the Company may rely on the holder's determination of whether the Notes
are convertible pursuant to the terms hereof, the Company having no obligation
whatsoever to verify or confirm the accuracy of such determination, and the
submission of the Conversion Notice by the holder shall be deemed to be the
holder's representation that the Notes specified therein are convertible
pursuant to the terms hereof. Nothing contained herein shall be deemed to
restrict the right of a holder to convert the Notes at such time as the
conversion thereof will not violate the provisions of this paragraph. ]
Upon due presentment for registration of transfer of this Note and any
other documents as may be required to be delivered by the Indenture at the
office or agency of the Company which shall be the Corporate Trust Office of the
Trustee, or at any other office or agency permitted by the Indenture, a new Note
or Notes of authorized denominations for an equal aggregate principal amount
will be issued to the transferee in exchange thereof, subject to the
requirements and limitations provided in the Indenture, without charge except
for any tax or other governmental charge imposed in connection therewith.
The Company, the Trustee, any authenticating agent, any paying agent, any
conversion agent and any Note Registrar may deem and treat a registered holder
hereof as the absolute owner of this Note (whether or not this Note shall be
overdue and notwithstanding any notation of ownership or other writing hereon),
for the purpose of receiving payment hereof (including Liquidated Damages to the
extent accrued but unpaid), or on account hereof, for the conversion hereof and
for all other purposes; and neither the Company nor the Trustee nor any other
authenticating agent nor any paying agent nor any other conversion agent nor any
Note Registrar shall be affected by any notice to the contrary. All such
payments so made to, or upon the order of, such registered holder for the time
being shall be valid, and, to the extent of the sum or sums so paid, effectual
to satisfy and discharge the liability for monies payable on this Note.
A-10
No direct or indirect partner, employee, incorporator, stockholder,
director or officer, as such, past, present or future of the Company or any
successor corporation or any Subsidiary or any of the Company's Affiliates,
shall have any personal liability in respect of the obligations of the Company
under this Note by reason of his, her or its status as such partner, employee,
incorporator, stockholder, director or officer. The holder hereof by accepting
this Note waives and releases all such liability. Such waiver and release are
part of the consideration for the issuance of this Note.
A-11
ABBREVIATIONS
The following abbreviations, when used in the inscription of the face of
this Note, shall be construed as though they were written out in full according
to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT -
_____________________________ Custodian
(Cust)
TEN ENT - as tenants by the entireties _____________________________
(Minor)
JT TEN - as joint tenants with right
of survivorship and not as tenants Uniform Gifts to Minors Act ___________
in common
(State)
Additional abbreviations may also be used though not in the above list.
A-12
SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE
The following exchanges of a part of this Global Note for an interest in another
Global Note or for a Definitive Note, or exchanges of a part of another Global
Note or Definitive Note for an interest in this Global Note, have been made:
Amount of decrease Amount of increase Principal Amount Signature of authorized
Date of Exchange in Principal Amount of in Principal Amount of of this Global Note officer of Trustee
this Global Note this Global Note following such decrease or Note Custodian
(or increase)
A-13
EXHIBIT B
[FORM OF CONVERSION NOTICE]
Rockford Corporation
000 Xxxxx Xxxxxxxx Xxxxx
Xxxxx, Xxxxxxx 00000
Attention: Chief Financial Officer
BNY Western Trust Company
000 X. Xxxxxx Xxxxxx - Xxxxx 000
Xxx Xxxxxxx, XX 00000
Attention: Corporate Trust Administration
Fax: 000-000-0000
The undersigned registered owner of this Note hereby irrevocably exercises
the option to convert this Note, or the portion hereof (which is One Thousand
United States Dollars ($1,000) principal amount or an integral multiple thereof)
below designated, into shares of Common Stock in accordance with the terms of
the Indenture referred to in this Note, and directs that the shares issuable and
deliverable upon such conversion, together with any check in payment for
fractional shares and any 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 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 accompanies this Note.
If you want the shares issuable on conversion of this Note credited to
your balance account with The Depositary Trust Company through its Deposit
Withdrawal Agent Commission system, check the box: [ ]
Dated: __________________________
--------------------------------
--------------------------------
Signature(s)
---------------------------------
Signature Guarantee
Signature(s) must be guaranteed by
an eligible Guarantor Institution
(banks, stock brokers, savings and loan
associations and credit unions) with
membership in an
B-1
approved signature guarantee medallion
program pursuant to Securities and
Exchange Commission Rule 17Ad-15 if
shares of Common Stock are to be issued,
or Notes to be delivered, other than to
and in the name of the registered
holder.
B-2
Fill in for registration of shares
if to be issued, and Notes if to be
delivered, other than to and in the name
of the registered holder:
---------------------------------
(Name)
---------------------------------
(Street Address)
---------------------------------
(City, State and Zip Code)
Please print name and address
Principal amount to be converted (if less \
than all): $______,000
-------------------------------------------
Social Security or Other Taxpayer
Identification Number
B-3
EXHIBIT C
[FORM OF OPTION TO ELECT REPAYMENT
UPON A REPURCHASE EVENT]
Rockford Corporation
000 Xxxxx Xxxxxxxx Xxxxx
Xxxxx, Xxxxxxx 00000
Attention: Chief Financial Officer
BNY Western Trust Company
000 X. Xxxxxx Xxxxxx - Xxxxx 000
Xxx Xxxxxxx, XX 00000
Attention: Corporate Trust Administration
Fax: 000-000-0000
The undersigned registered owner of this Note hereby acknowledges receipt
of a notice from Rockford Corporation (the "Company") as to the occurrence of a
Repurchase Event with respect to the Company and requests and instructs the
Company to repay the entire principal amount of this Note, or the portion
thereof (which is One Thousand United States Dollars ($1,000) principal amount
or an integral multiple thereof) below designated, in accordance with the terms
of the Indenture referred to in this Note, together with accrued interest
(including Liquidated Damages, if any) to, but excluding, such date, to the
registered holder hereof.
Dated: ________________________
---------------------------------------
---------------------------------------
Signature(s)
---------------------------------------
Social Security or Other Taxpayer
Identification Number
Principal amount to be repaid (if less
than all): $______,000
NOTICE: The above signatures of the
holder(s) hereof must correspond with
the name as written upon the face of the
Note in
C-1
every particular without alteration or
enlargement or any change whatever.
C-2
EXHIBIT D
FORM OF CERTIFICATE OF TRANSFER
Rockford Corporation
000 Xxxxx Xxxxxxxx Xxxxx
Xxxxx, Xxxxxxx 00000
Attention: Chief Financial Officer
BNY Western Trust Company
000 X. Xxxxxx Xxxxxx - Xxxxx 000
Xxx Xxxxxxx, XX 00000
Attention: Corporate Trust Administration
Fax: 000-000-0000
Re: 4.5% Convertible Senior Subordinated Secured Notes due 2009
Reference is hereby made to the Indenture, dated as of June 10, 2004 (the
"Indenture"), among Rockford Corporation, as issuer (the "Company"), and BNY
Western Trust Company (the "Trustee"). Capitalized terms used but not defined
herein shall have the meanings given to them in the Indenture.
___________________, (the "Transferor") owns and proposes to transfer the
Note[s] or interest in such Note[s] specified in Annex A hereto, in the
principal amount of $___________ in such Note[s] or interests (the "Transfer"),
to ___________________________ (the "Transferee"), as further specified in Annex
A hereto. In connection with the Transfer, the Transferor hereby certifies that:
[CHECK ALL THAT APPLY]
1. CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN THE
144A GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO RULE 144A.
The Transfer is being effected pursuant to and in accordance with Rule
144A under the United States Securities Act of 1933, as amended (the "Securities
Act"), and, accordingly, the Transferor hereby further certifies that the
beneficial interest or Definitive Note is being transferred to a Person that the
Transferor reasonably believed and believes is purchasing the beneficial
interest or Definitive Note for its own account, or for one or more accounts
with respect to which such Person exercises sole investment discretion, and such
Person and each such account is a "qualified institutional buyer" within the
meaning of Rule 144A in a transaction meeting the requirements of Rule 144A and
such Transfer is in compliance with any applicable blue sky securities laws of
any state of the United States. Upon consummation of the proposed Transfer in
accordance with the
D-1
terms of the Indenture, the transferred beneficial interest or Definitive Note
will be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the 144A Global Note and/or the Definitive Note and
in the Indenture and the Securities Act.
2. CHECK AND COMPLETE IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL
INTEREST IN THE IAI GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO ANY PROVISION
OF THE SECURITIES ACT OTHER THAN RULE 144A OR RULE 144.
The Transfer is being effected in compliance with the transfer
restrictions applicable to beneficial interests in Restricted Global Notes and
Restricted Definitive Notes and pursuant to and in accordance with the
Securities Act and any applicable blue sky securities laws of any state of the
United States, and accordingly the Transferor hereby further certifies that
(check one):
(a) such Transfer is being effected pursuant to and in accordance
with Rule 144 under the Securities Act;
or
(b) such Transfer is being effected to the Company or a subsidiary
thereof;
or
(c) such Transfer is being effected pursuant to an effective
registration statement under the Securities Act and in compliance with the
prospectus delivery requirements of the Securities Act;
or
(d) such Transfer is being effected to an Institutional Accredited
Investor and pursuant to an exemption from the registration requirements
of the Securities Act other than Rule 144A or Rule 144, and the Transferor
hereby further certifies that it has not engaged in any general
solicitation within the meaning of Regulation D under the Securities Act
and the Transfer complies with the transfer restrictions applicable to
beneficial interests in a Restricted Global Note or Restricted Definitive
Notes and the requirements of the exemption claimed, which certification
is supported by (1) a certificate executed by the Transferee in the form
of Exhibit F to the Indenture and (2) an Opinion of Counsel provided by
the Transferor or the Transferee (a copy of which the Transferor has
attached to this certification), to the effect that such Transfer is in
compliance with the Securities Act. Upon consummation of the proposed
transfer in accordance with the terms of the Indenture, the transferred
beneficial interest or Definitive Note will be subject to the restrictions
on transfer enumerated in the Private Placement Legend printed on the IAI
Global Note and/or the Definitive Notes and in the Indenture and the
Securities Act.
3. CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN THE
UNRESTRICTED GLOBAL NOTE OR OF AN UNRESTRICTED DEFINITIVE NOTE.
(a) CHECK IF TRANSFER IS PURSUANT TO RULE 144. (i) The Transfer is
being effected pursuant to and in accordance with Rule 144 under the
Securities Act and in compliance with the transfer restrictions contained
in the Indenture and any applicable blue sky securities laws of any state
of the United States and (ii) the restrictions on transfer
D-2
contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act. Upon
consummation of the proposed Transfer in accordance with the terms of the
Indenture, the transferred beneficial interest or Definitive Note will no
longer be subject to the restrictions on transfer enumerated in the
Private Placement Legend printed on the Restricted Global Notes, on
Restricted Definitive Notes and in the Indenture.
(b) CHECK IF TRANSFER IS PURSUANT TO OTHER EXEMPTION. (i) The
Transfer is being effected pursuant to and in compliance with an exemption
from the registration requirements of the Securities Act other than Rule
144, and in compliance with the transfer restrictions contained in the
Indenture and any applicable blue sky securities laws of any State of the
United States and (ii) the restrictions on transfer contained in the
Indenture and the Private Placement Legend are not required in order to
maintain compliance with the Securities Act. Upon consummation of the
proposed Transfer in accordance with the terms of the Indenture, the
transferred beneficial interest or Definitive Note will not be subject to
the restrictions on transfer enumerated in the Private Placement Legend
printed on the Restricted Global Notes or Restricted Definitive Notes and
in the Indenture.
This certificate and the statements contained herein are made for
your benefit and the benefit of the Company.
----------------------------------------
[Insert Name of Transferor]
By:
-------------------------------------
Name:
Title:
Dated: _______________________
----------------------------------------
Signature Guarantee
Signature(s) must be guaranteed by
an eligible Guarantor Institution
(banks, stock brokers, 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 of Common Stock are to
be issued, or Notes to be delivered,
other than to and in the name of the
registered holder.
D-3
ANNEX A TO CERTIFICATE OF TRANSFER
1. The Transferor owns and proposes to transfer the following:
[CHECK ONE OF (a) OR (b)]
(a) a beneficial interest in the:
(i) 144A Global Note (CUSIP _________), or
(ii) IAI Global Note (CUSIP _________); or
(b) a Restricted Definitive Note.
2. After the Transfer the Transferee will hold:
[CHECK ONE]
(a) a beneficial interest in the:
(i) 144A Global Note (CUSIP _________), or
(ii) IAI Global Note (CUSIP _________); or
(iii) Unrestricted Global Note (CUSIP _________); or
(b) a Restricted Definitive Note; or
(c) an Unrestricted Definitive Note,
in accordance with the terms of the Indenture.
D-4
EXHIBIT E
FORM OF CERTIFICATE OF EXCHANGE
Rockford Corporation
000 Xxxxx Xxxxxxxx Xxxxx
Xxxxx, Xxxxxxx 00000
Attention: Chief Financial Officer
BNY Western Trust Company
000 X. Xxxxxx Xxxxxx - Xxxxx 000
Xxx Xxxxxxx, XX 00000
Attention: Corporate Trust Administration
Fax: 000-000-0000
Re: 4.5% Convertible Senior Subordinated Secured Notes due 2009
(CUSIP 00000XXX0])
Reference is hereby made to the Indenture, dated as of June 10, 2004 (the
"Indenture"), among Rockford Corporation, as issuer (the "Company"), and BNY
Western Trust Company (the "Trustee"). Capitalized terms used but not defined
herein shall have the meanings given to them in the Indenture.
__________________________, (the "Owner") owns and proposes to exchange
the Note[s] or interest in such Note[s] specified herein, in the principal
amount of $____________ in such Note[s] or interests (the "Exchange"). In
connection with the Exchange, the Owner hereby certifies that:
1. EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN A
RESTRICTED GLOBAL NOTE FOR UNRESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS
IN AN UNRESTRICTED GLOBAL NOTE.
(a) CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED
GLOBAL NOTE TO BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In
connection with the Exchange of the Owner's beneficial interest in a
Restricted Global Note for a beneficial interest in an Unrestricted Global
Note in an equal principal amount, the Owner hereby certifies (i) the
beneficial interest is being acquired for the Owner's own account without
transfer, (ii) such Exchange has been effected in compliance with the
transfer restrictions applicable to the Global Notes and pursuant to and
in accordance with the United States Securities Act of 1933, as amended
(the "Securities Act"), (iii) the restrictions on transfer contained in
the Indenture and the Private Placement Legend are not required in order
to maintain compliance with the Securities Act and (iv) the beneficial
interest in an Unrestricted Global Note is being acquired in compliance
with any applicable blue sky securities laws of any state of the United
States.
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(b) CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED
GLOBAL NOTE TO UNRESTRICTED DEFINITIVE NOTE. In connection with the
Exchange of the Owner's beneficial interest in a Restricted Global Note
for an Unrestricted Definitive Note, the Owner hereby certifies (i) the
Definitive Note is being acquired for the Owner's own account without
transfer, (ii) such Exchange has been effected in compliance with the
transfer restrictions applicable to the Restricted Global Notes and
pursuant to and in accordance with the Securities Act, (iii) the
restrictions on transfer contained in the Indenture and the Private
Placement Legend are not required in order to maintain compliance with the
Securities Act and (iv) the Definitive Note is being acquired in
compliance with any applicable blue sky securities laws of any state of
the United States.
(c) CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO
BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In connection with the
Owner's Exchange of a Restricted Definitive Note for a beneficial interest
in an Unrestricted Global Note, the Owner hereby certifies (i) the
beneficial interest is being acquired for the Owner's own account without
transfer, (ii) such Exchange has been effected in compliance with the
transfer restrictions applicable to Restricted Definitive Notes and
pursuant to and in accordance with the Securities Act, (iii) the
restrictions on transfer contained in the Indenture and the Private
Placement Legend are not required in order to maintain compliance with the
Securities Act and (iv) the beneficial interest is being acquired in
compliance with any applicable blue sky securities laws of any state of
the United States.
(d) CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO
UNRESTRICTED DEFINITIVE NOTE. In connection with the Owner's Exchange of a
Restricted Definitive Note for an Unrestricted Definitive Note, the Owner
hereby certifies (i) the Unrestricted Definitive Note is being acquired
for the Owner's own account without transfer, (ii) such Exchange has been
effected in compliance with the transfer restrictions applicable to
Restricted Definitive Notes and pursuant to and in accordance with the
Securities Act, (iii) the restrictions on transfer contained in the
Indenture and the Private Placement Legend are not required in order to
maintain compliance with the Securities Act and (iv) the Unrestricted
Definitive Note is being acquired in compliance with any applicable blue
sky securities laws of any state of the United States.
2. EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN
RESTRICTED GLOBAL NOTES FOR RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS
IN RESTRICTED GLOBAL NOTES.
(a) CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED
GLOBAL NOTE TO RESTRICTED DEFINITIVE NOTE. In connection with the Exchange
of the Owner's beneficial interest in a Restricted Global Note for a
Restricted Definitive Note with an equal principal amount, the Owner
hereby certifies that the Restricted Definitive Note is being acquired for
the Owner's own account without transfer. Upon consummation of the
proposed Exchange in accordance with the terms of the Indenture, the
Restricted Definitive Note issued will continue to be subject to the
restrictions on transfer enumerated in the Private Placement Legend
printed on the Restricted Definitive Note and in the Indenture and the
Securities Act.
(b) CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO
BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE. In connection with the
Exchange of the Owner's
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Restricted Definitive Note for a beneficial interest in the [CHECK ONE]
144A Global Note, IAI Global Note with an equal principal amount, the
Owner hereby certifies (i) the beneficial interest is being acquired for
the Owner's own account without transfer and (ii) such Exchange has been
effected in compliance with the transfer restrictions applicable to the
Restricted Global Notes and pursuant to and in accordance with the
Securities Act, and in compliance with any applicable blue sky securities
laws of any state of the United States. Upon consummation of the proposed
Exchange in accordance with the terms of the Indenture, the beneficial
interest issued will be subject to the restrictions on transfer enumerated
in the Private Placement Legend printed on the relevant Restricted Global
Note and in the Indenture and the Securities Act.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company.
----------------------------------------
[Insert Name of Transferor]
By:
-------------------------------------
Name:
Title:
Dated: ______________________
----------------------------------------
Signature Guarantee
Signature(s) must be guaranteed by
an eligible Guarantor Institution
(banks, stock brokers, 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 of Common Stock are to
be issued, or Notes to be delivered,
other than to and in the name of the
registered holder.
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EXHIBIT F
FORM OF TRANSFER LETTER OF REPRESENTATIONS
(TO BE DELIVERED BY HOLDER
UPON CERTAIN TRANSFERS OF NOTES WITHOUT
EFFECTIVE REGISTRATION STATEMENT)
We are delivering this letter in connection with the sale or transfer to
us of Notes (as defined in the Indenture, dated as of June 10, 2004, between
Rockford Corporation, an Arizona corporation (the "Company") and BNY Western
Trust Company, a California banking corporation (the "Trustee")) other than
pursuant to a registration statement that has been declared effective under the
Securities Act of 1933, as amended (the "Securities Act").
We hereby confirm that:
(i) we are an "accredited investor" within the meaning of Rule
501(a)(1),(2), (3), (5), (6), (7) or (8) under the Securities Act;
(ii) any purchase or receipt of the Notes by us will be for investment
purposes and for our own account, not as a nominee or agent;
(iii) we have such knowledge and experience in financial and business
matters that we are capable of evaluating the merits and risks of
purchasing or receiving the Notes;
(iv) we do not have need for liquidity in our investment in the Notes, we
have the ability to bear the economic risks of our investment in the
Notes for an indefinite period of time and we are able to afford the
complete loss of our investment in the Notes;
(v) we are not acquiring the Notes with a view to any distribution
thereof in a transaction that would violate the Securities Act or
the securities laws of any State of the United States or any other
applicable jurisdiction, and we have no present intention of
selling, granting any participation in, or otherwise distributing
the same;
(vi) we have had access to such information regarding the Company
necessary in order for us to make an informed decision and any such
information which we have requested have been made available for us
or our attorney, accountant, or advisor; and
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(vii) we or our attorney, accountant, or advisor have had a reasonable
opportunity to ask questions of and receive answers from a person or
persons acting on behalf of the Company concerning the business,
management and financial affairs of the Company and the terms and
conditions of the acquisition by us of the Notes and all such
questions have been answered to our full satisfaction, and we have
acquired sufficient information about the Company to make an
informed and knowledgeable decision to acquire the Notes.
We understand that the Notes have not been registered under the Securities
Act, and we agree, on our own behalf and on behalf of each account for which we
acquire any Notes, that such Notes may be offered, resold, pledged or otherwise
transferred only (i) in accordance with an exemption from the registration
requirements of the Securities Act, (ii) to the Company or (iii) pursuant to an
effective registration statement, and, in each case, in accordance with any
applicable securities laws of any State of the United States or any other
applicable jurisdiction. We agree that we will furnish the Company and the
Trustee an opinion of counsel, if the Company so requests, that the foregoing
restrictions on transfer have been complied with. We understand that the Trustee
will not be required to accept for registration of transfer any Notes, except
upon presentation of evidence satisfactory to the Company, including an opinion
of counsel if the Company so requests, that the foregoing restrictions on
transfer have been complied with.
We acknowledge that the Company and others will rely upon our
confirmations, acknowledgements and agreements set forth herein, and we agree to
notify you promptly in writing if any of our representations or warranties
herein ceases to be accurate and complete.
------------------------------------------
(Name)
By:
----------------------------------------
Name:
Title:
Address:
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