EXHIBIT 4.1
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WILD OATS MARKETS, INC.
TO
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
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INDENTURE
Dated as of
June 1, 2004
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3.25% CONVERTIBLE SENIOR DEBENTURES DUE 2034
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CROSS-REFERENCE TABLE*
Trust Indenture Act Section Indenture Section
--------------------------- -----------------
Section 310(a)(1).................................................................................8.09
(a)(2).................................................................................8.09
(a)(3).................................................................................N.A.
(a)(4).................................................................................N.A.
(a)(5).................................................................................N.A.
(b)....................................................................................8.08
(c)....................................................................................N.A.
Section 311(a)....................................................................................8.13
(b)....................................................................................8.13
(c)....................................................................................N.A.
Section 312(a)..............................................................................6.01; 6.02
(b)....................................................................................N.A.
(c)....................................................................................N.A.
Section 313(a)....................................................................................6.03
(b)....................................................................................N.A.
(c)....................................................................................6.03
(d)....................................................................................6.03
Section 314(a)....................................................................................6.04
(b)....................................................................................N.A.
(c)(1)................................................................................16.05
(c)(2)................................................................................16.05
(c)(3).................................................................................N.A.
(d)....................................................................................N.A.
(e)...................................................................................16.05
(f)....................................................................................N.A.
Section 315(a)..............................................................................8.01; 8.02
(b)....................................................................................7.08
(c)....................................................................................7.06
(d)..............................................................................8.01; 8.06
(e)....................................................................................7.09
Section 316(a)(1).................................................................................7.07
(a)(2)................................................................................11.02
(b)....................................................................................N.A.
(c)....................................................................................9.01
Section 317(a)(1).................................................................................7.02
(a)(2).................................................................................7.02
(b)....................................................................................5.04
Section 318(a)...................................................................................16.08
N.A. means not applicable.
* This Cross-Reference Table shall not, for any purpose, be deemed to be part
of this Indenture.
TABLE OF CONTENTS
PAGE
ARTICLE 1
DEFINITIONS
Section 1.01. Definitions...............................................................................1
ARTICLE 2
ISSUE, DESCRIPTION, EXECUTION, REGISTRATION
AND EXCHANGE OF DEBENTURES
Section 2.01. Designation Amount and Issue of Debentures...............................................11
Section 2.02. Form of Debentures.......................................................................11
Section 2.03. Date and Denomination of Debentures; Payments of Interest................................12
Section 2.04. Execution of Debentures..................................................................13
Section 2.05. Exchange and Registration of Transfer of Debentures; Restrictions on Transfer............14
Section 2.06. Mutilated, Destroyed, Lost or Stolen Debentures..........................................21
Section 2.07. Temporary Debentures.....................................................................22
Section 2.08. Cancellation of Debentures...............................................................22
Section 2.09. CUSIP Numbers............................................................................22
Section 2.10. Ranking..................................................................................23
ARTICLE 3
REDEMPTION AND REPURCHASE OF DEBENTURES
Section 3.01. Company's Right to Redeem................................................................23
Section 3.02. Notice of Optional Redemption; Selection of Debentures...................................23
Section 3.03. Payment of Debentures Called for Redemption by the Company...............................25
Section 3.04. [Reserved]...............................................................................25
Section 3.05. Repurchase of Debentures by the Company at Option of Holders upon a Fundamental Change...25
Section 3.06. Repurchase of Debentures by the Company at Option of Holders on Specified Dates..........28
Section 3.07. [Reserved]...............................................................................30
Section 3.08. Conditions and Procedures for Repurchase at Option of Holders............................30
ARTICLE 4
CONTINGENT INTEREST
Section 4.01. Contingent Interest......................................................................33
Section 4.02. Payment of Contingent Interest...........................................................33
Section 4.03. Contingent Interest Notification.........................................................33
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ARTICLE 5
PARTICULAR COVENANTS OF THE COMPANY
Section 5.01. Payment of Principal and Interest........................................................34
Section 5.02. Maintenance of Office or Agency..........................................................34
Section 5.03. Appointments to Fill Vacancies in Trustee's Office.......................................34
Section 5.04. Provisions as to Paying Agent............................................................34
Section 5.05. Existence................................................................................35
Section 5.06. Rule 144A Information Requirement........................................................36
Section 5.07. Stay, Extension and Usury Laws...........................................................36
Section 5.08. Compliance Certificate...................................................................36
Section 5.09. Additional Amounts Notice................................................................37
Section 5.10. Contingent Debt Tax Treatment............................................................37
Section 5.11. Calculation of Original Issue Discount...................................................37
ARTICLE 6
DEBENTUREHOLDERS' LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE
Section 6.01. Debentureholders' Lists..................................................................37
Section 6.02. Preservation and Disclosure of Lists.....................................................38
Section 6.03. Reports by Trustee.......................................................................38
Section 6.04. Reports by Company.......................................................................38
ARTICLE 7
REMEDIES OF THE TRUSTEE AND DEBENTUREHOLDERS ON AN EVENT OF DEFAULT
Section 7.01. Events of Default........................................................................39
Section 7.02. Payments of Debentures on Default; Suit Therefor.........................................41
Section 7.03. Application of Monies Collected by Trustee...............................................42
Section 7.04. Proceedings by Debentureholder...........................................................43
Section 7.05. Proceedings by Trustee...................................................................44
Section 7.06. Remedies Cumulative and Continuing.......................................................44
Section 7.07. Direction of Proceedings and Waiver of Defaults by Majority of Debentureholders..........44
Section 7.08. Notice of Defaults.......................................................................45
Section 7.09. Undertaking to Pay Costs.................................................................45
ARTICLE 8
THE TRUSTEE
Section 8.01. Duties and Responsibilities of Trustee...................................................46
Section 8.02. Reliance on Documents, Opinions, Etc.....................................................47
Section 8.03. No Responsibility for Recitals, Etc......................................................48
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Section 8.04. Trustee, Paying Agents, Bid Solicitation Agents, Conversion Agents or Registrar May
Own Debentures ........................................................................49
Section 8.05. Monies to Be Held in Trust...............................................................49
Section 8.06. Compensation and Expenses of Trustee.....................................................49
Section 8.07. Officers' Certificate as Evidence........................................................50
Section 8.08. Conflicting Interests of Trustee.........................................................50
Section 8.09. Eligibility of Trustee...................................................................50
Section 8.10. Resignation or Removal of Trustee........................................................50
Section 8.11. Acceptance by Successor Trustee..........................................................51
Section 8.12. Succession by Merger.....................................................................52
Section 8.13. Preferential Collection of Claims........................................................52
ARTICLE 9
THE DEBENTUREHOLDERS
Section 9.01. Action by Debentureholders...............................................................52
Section 9.02. Proof of Execution by Debentureholders...................................................53
Section 9.03. Who Are Deemed Absolute Owners...........................................................53
Section 9.04. Company-Owned Debentures Disregarded.....................................................53
Section 9.05. Revocation of Consents; Future Holders Bound.............................................54
ARTICLE 10
MEETINGS OF DEBENTUREHOLDERS
Section 10.01. Purpose of Meetings......................................................................54
Section 10.02. Call of Meetings by Trustee..............................................................54
Section 10.03. Call of Meetings by Company or Debentureholders..........................................55
Section 10.04. Qualifications for Voting................................................................55
Section 10.05. Regulations..............................................................................55
Section 10.06. Voting...................................................................................56
Section 10.07. No Delay of Rights by Meeting............................................................56
ARTICLE 11
SUPPLEMENTAL INDENTURES
Section 11.01. Supplemental Indentures Without Consent of Debentureholders..............................56
Section 11.02. Supplemental Indenture with Consent of Debentureholders..................................58
Section 11.03. Effect of Supplemental Indenture.........................................................58
Section 11.04. Notation on Debentures...................................................................59
Section 11.05. Evidence of Compliance of Supplemental Indenture to Be Furnished to Trustee..............59
ARTICLE 12
CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE
Section 12.01. Company May Consolidate on Certain Terms.................................................59
Section 12.02. Successor to Be Substituted..............................................................60
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Section 12.03. Opinion of Counsel to Be Given Trustee...................................................60
ARTICLE 13
SATISFACTION AND DISCHARGE OF INDENTURE
Section 13.01. Discharge of Indenture...................................................................60
Section 13.02. Paying Agent to Repay Monies Held........................................................61
Section 13.03. Return of Unclaimed Monies...............................................................61
ARTICLE 14
IMMUNITY OF INCORPORATORS, SHAREHOLDERS, OFFICERS AND DIRECTORS
Section 14.01. Indenture and Debentures Solely Corporate Obligations....................................61
ARTICLE 15
CONVERSION OF DEBENTURES
Section 15.01. Right to Convert.........................................................................62
Section 15.02. Exercise of Conversion Privilege; Issuance of Common Stock on Conversion;
No Adjustment for Interest or Dividends...............................................64
Section 15.03. Payment upon Conversion; Cash Payments in Lieu of Fractional Shares......................66
Section 15.04. Conversion Rate..........................................................................68
Section 15.05. Adjustment of Conversion Rate............................................................68
Section 15.06. Effect of Reclassification, Consolidation, Merger or Sale................................75
Section 15.07. Taxes on Shares Issued...................................................................76
Section 15.08. Reservation of Shares, Shares to Be Fully Paid; Compliance with Governmental
Requirements; Listing of Common Stock.................................................76
Section 15.09. Responsibility of Trustee................................................................77
Section 15.10. Notice to Holders Prior to Certain Actions...............................................77
Section 15.11. Shareholders.............................................................................78
ARTICLE 16
MISCELLANEOUS PROVISIONS
Section 16.01. Provisions Binding on Company's Successors...............................................78
Section 16.02. Official Acts by Successor Corporation...................................................78
Section 16.03. Addresses for Notices, Etc...............................................................78
Section 16.04. Governing Law............................................................................79
Section 16.05. Evidence of Compliance with Conditions Precedent; Certificates to Trustee................79
Section 16.06. Legal Holidays...........................................................................79
Section 16.07. Company Responsible for Making Calculations..............................................80
Section 16.08. Trust Indenture Act......................................................................80
Section 16.09. No Security Interest Created.............................................................80
Section 16.10. Benefits of Indenture....................................................................80
Section 16.11. Table of Contents, Headings, Etc.........................................................80
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Section 16.12. Authenticating Agent.....................................................................81
Section 16.13. Execution in Counterparts................................................................81
Section 16.14. Severability.............................................................................82
Exhibit A Form of Debenture.......................................................................A-1
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INDENTURE
INDENTURE dated as of June 1, 2004 between Wild Oats Markets, Inc., a
Delaware corporation (hereinafter called the "COMPANY"), having its principal
office at 0000 Xxxxxxxx Xxxx, Xxxxxxx, Xxxxxxxx 00000, and U.S. Bank National
Association, as trustee hereunder (hereinafter called the "TRUSTEE").
WITNESSETH:
WHEREAS, for its lawful corporate purposes, the Company has duly
authorized the issue of its 3.25% Convertible Senior Debentures due 2034
(hereinafter called the "DEBENTURES"), in an aggregate principal amount not to
exceed $115,000,000, and, to provide the terms and conditions upon which the
Debentures are to be authenticated, issued and delivered, the Company has duly
authorized the execution and delivery of this Indenture; and
WHEREAS, the Debentures, the certificate of authentication to be borne
by the Debentures, a form of assignment, a form of fundamental change
repurchase election, a form of Company repurchase election and a form of
conversion notice to be borne by the Debentures are to be substantially in the
forms hereinafter provided for; and
WHEREAS, all acts and things necessary to make the Debentures, when
executed by the Company and authenticated and delivered by the Trustee or a
duly authorized authenticating agent, as in this Indenture provided, the valid,
binding and legal obligations of the Company, and to constitute this Indenture
a valid agreement according to its terms, have been done and performed, and the
execution of this Indenture and the issue hereunder of the Debentures have in
all respects been duly authorized,
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
That in order to declare the terms and conditions upon which the
Debentures are, and are to be, authenticated, issued and delivered, and in
consideration of the premises and of the purchase and acceptance of the
Debentures by the holders thereof, the Company covenants and agrees with the
Trustee for the equal and proportionate benefit of the respective holders from
time to time of the Debentures (except as otherwise provided below), as
follows:
ARTICLE 1.
DEFINITIONS
Section 1.01. Definitions. The terms defined in this Section 1.01
(except as herein otherwise expressly provided or unless the context otherwise
requires) for all purposes of this Indenture and of any indenture supplemental
hereto shall have the respective meanings specified in this Section 1.01. All
other terms used in this Indenture that are defined in the Trust Indenture Act
or that are by reference therein defined in the Securities Act (except as herein
otherwise expressly provided or unless the context otherwise requires) shall
have the meanings assigned to such terms in the Trust Indenture Act and in the
Securities Act as in force at the date of the execution of this Indenture. The
words "herein", "hereof", "hereunder" and words of similar import
refer to this Indenture as a whole and not to any particular Article, Section or
other subdivision. The terms defined in this Article include the plural as well
as the singular.
"ADDITIONAL AMOUNTS" has the meaning specified for "Additional
Amounts" in Section 2(e) of the Registration Rights Agreement.
"ADDITIONAL AMOUNTS NOTICE" has the meaning specified in Section 5.09.
"ADJUSTMENT EVENT" has the meaning specified in Section 15.05(1).
"AFFILIATE" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"CONTROL", when used with respect to any specified Person means the power to
direct or cause the direction of the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise, and the terms "CONTROLLING" and "CONTROLLED" have
meanings correlative to the foregoing.
"AGENT MEMBERS" has the meaning specified in Section 2.05(b).
"APPLICABLE FIVE-DAY TRADING PERIOD" means, with respect to any
Interest Period as to which Contingent Interest may be payable, the five
Trading Days immediately preceding the first day of such Interest Period.
"BID SOLICITATION AGENT" means such Person (other than any Affiliate
of the Company) as the Company may designate as Bid Solicitation Agent from
time to time, and shall initially mean the Trustee.
"BOARD OF DIRECTORS" means the Board of Directors of the Company or a
committee of such Board duly authorized to act for it hereunder.
"BUSINESS DAY" means any day, other than a Saturday or Sunday, that is
neither a legal holiday nor a day on which commercial banks are authorized or
required by law, regulation or executive order to close in The City of New
York.
"CAPITAL STOCK" of any Person means any and all shares (including
ordinary shares or American Depositary Shares), interests, participations or
other equivalents however designated of corporate stock or other equity
participations, including partnership interests, whether general or limited, of
such Person and any rights (other than debt securities convertible or
exchangeable into an equity interest), warrants or options to acquire an equity
interest in such Person.
"CASH AMOUNT" has the meaning specified in Section 15.03(a).
"CASH-BUY OUT" has the meaning specified in Section 3.05(d).
"CASH SETTLEMENT AVERAGING PERIOD" has the meaning specified in
Section 15.03(a).
"CASH SETTLEMENT NOTICE PERIOD" has the meaning specified in Section
15.03(a).
2
"CLOSING TRADING PRICE" with respect to calculating the Make-Whole
Premium on any date of determination, means the average of the secondary market
bid quotations per Debenture obtained by the Trustee for $2 million aggregate
principal amount of the Debentures at approximately 4:00 p.m., New York City
time, on such determination date from two independent nationally recognized
securities dealers selected by the Company, which may include one or more of
the Initial Purchasers; provided that if at least two such bids cannot
reasonably be obtained by the Bid Solicitation Agent, but one such bid can
reasonably be obtained by the Trustee, this one bid will be used. If the
Trustee cannot reasonably obtain at least one bid for $2 million aggregate
principal amount of Debentures from a nationally recognized securities dealer,
or in the reasonable judgment of the Company the bid quotations are not
indicative of the secondary market value of the Debentures, then the Closing
Trading Price of the Debentures will be deemed to be the product of (x) the
average of the closing prices of the Common Stock for the five trading days
immediately prior to the public announcement of the Cash Buy-Out (as defined in
Section 3.05(d) and (y) the applicable Conversion Rate.
"COMMISSION" means the Securities and Exchange Commission, as from
time to time constituted under the Exchange Act, or, if at any time after the
execution of this Indenture such Commission is not existing and performing the
duties now assigned to it under the Trust Indenture Act, then the body
performing such duties at such time.
"COMMON STOCK" means any stock of any class of the Company which has
no preference in respect of dividends or of amounts payable in the event of any
voluntary or involuntary liquidation, dissolution or winding up of the Company
and which is not subject to redemption by the Company. Subject to the
provisions of Section 15.06, however, shares issuable on conversion of
Debentures shall include only shares of the class designated as common stock of
the Company at the date of this Indenture (namely, the Common Stock, $0.001 par
value) or shares of any class or classes resulting from any reclassification or
reclassifications thereof and which have no preference in respect of dividends
or of amounts payable in the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Company and which are not subject to
redemption by the Company; provided that if at any time there shall be more
than one such resulting class, the shares of each such class then so issuable
on conversion shall be substantially in the proportion which the total number
of shares of such class resulting from all such reclassifications bears to the
total number of shares of all such classes resulting from all such
reclassifications.
"COMPANY" means the corporation named as the "Company" in the first
paragraph of this Indenture, and, subject to the provisions of Article 12 and
Section 15.06, shall include its successors and assigns.
"COMPANY REPURCHASE DATE" has the meaning specified in Section
3.06(a).
"COMPANY REPURCHASE ELECTION" has the meaning specified in Section
3.06(c).
"COMPANY REPURCHASE NOTICE" has the meaning specified in Section
3.06(b).
"COMPANY REPURCHASE PRICE" has the meaning specified in Section
3.06(a).
"CONTINGENT INTEREST" has the meaning specified in Section 4.01.
3
"CONTINUING DIRECTOR" means a director who was a member of the Board
of Directors on the date of this Indenture or who becomes a director subsequent
to such date and whose election, appointment or nomination for election by the
shareholders of the Company is duly approved by a majority of the continuing
directors on the Board of Directors at the time of such approval, either by a
specific vote or by approval of the proxy statement issued by the Company on
behalf of the entire Board of Directors in which such individual is named as
nominee for director.
"CONVERSION AGENT" means the Trustee or such other office or agency
designated by the Company where Debentures may be presented for conversion.
"CONVERSION DATE" has the meaning specified in Section 15.02.
"CONVERSION PRICE" as of any day means $1,000 divided by the
Conversion Rate as of such date and rounded to the nearest cent. The Conversion
Price shall initially be $17.70 per share of Common Stock.
"CONVERSION RATE" has the meaning specified in Section 15.04.
"CONVERSION RETRACTION PERIOD" has the meaning specified in Section
15.03(a).
"CORPORATE TRUST OFFICE" or other similar term, means the designated
office of the Trustee at which at any particular time its corporate trust
business as it relates to this Indenture shall be principally administered,
which office is, at the date as of which this Indenture is dated, located at
000 00xx Xxxxxx, Xxxxx 000, Xxxxxx, Xxxxxxxx 00000, or at any other address as
the Trustee may designate from time to time by notice to the holders.
"CURRENT MARKET PRICE" means the average of the Last Reported Sale
Price per share of Common Stock for the twenty (20) Trading Day period ending
on the applicable date of determination (if the applicable date of
determination is a Trading Day or, if not, then on the last Trading Day prior
to the applicable date of determination), appropriately adjusted to take into
account the occurrence, during the period commencing on the first of the
Trading Days during the twenty (20) Trading Day period and ending on the
applicable date of determination, of any event that would result in an
adjustment of the Conversion Rate under this Indenture.
"CUSTODIAN" means U.S. Bank National Association, as custodian with
respect to the Debentures in global form, or any successor entity thereto.
"DEBENTURE" or "DEBENTURES" means any Debenture or Debentures, as the
case may be, authenticated and delivered under this Indenture, including any
Global Debenture.
"DEBENTURE REGISTER" has the meaning specified in Section 2.05.
"DEBENTURE REGISTRAR" has the meaning specified in Section 2.05.
"DEBENTUREHOLDER" or "HOLDER" as applied to any Debenture, or other
similar terms (but excluding the term "beneficial holder"), means any Person in
whose name at the time a particular Debenture is registered on the Debenture
Registrar's books.
4
"DEFAULT" means any event that is, or after notice or passage of time,
or both, would be, an Event of Default.
"DEFAULTED INTEREST" has the meaning specified in Section 2.03.
"DEPOSITARY" means the clearing agency registered under the Exchange
Act that is designated to act as the Depositary for the Global Debentures. The
Depository Trust Company shall be the initial Depositary, until a successor
shall have been appointed and become such pursuant to the applicable provisions
of this Indenture, and thereafter, "Depositary" shall mean or include such
successor.
"EVENT OF DEFAULT" means any event specified in Section 7.01 as an
Event of Default.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder, as in effect from time to
time.
"EX-DIVIDEND DATE" means, with respect to any issuance or distribution
on shares of Common Stock, the first date upon which a sale of the Common Stock
does not automatically transfer the right to receive such issuance or
distribution from the seller of the Common Stock to the buyer.
"EXPIRATION TIME" has the meaning specified in Section 15.05(e).
"FINAL NOTICE DATE" has the meaning specified in Section 15.03(a).
"FUNDAMENTAL CHANGE" means the occurrence of any of the following:
(i) a "person" or "group" within the meaning of Section
13(d) of the Exchange Act other than the Company, its subsidiaries or
its or their employee benefit plans, files a Schedule TO or any other
schedule, form or report under the Exchange Act disclosing that such
person or group has become the direct or indirect ultimate "beneficial
owner," as defined in Rule 13d-3 under the Exchange Act, of more than
50% of the total voting power of all shares of the Company's capital
stock that are entitled to vote generally in the election of
directors;
(ii) consummation of any share exchange, consolidation or
merger of the Company or any sale, lease or other transfer in one
transaction or a series of transactions of all or substantially all of
the consolidated assets of the Company and its subsidiaries, taken as
a whole, to any person other than the Company or one or more of its
subsidiaries pursuant to which the Common Stock will be converted into
cash, securities or other property; provided, however, that a
transaction where the holders of the Company's voting capital stock
immediately prior to such transaction have, directly or indirectly,
more than 50% of the aggregate voting power of all shares of capital
stock of the continuing or surviving corporation or transferee
entitled to vote generally in the election of directors immediately
after such event shall not be a Fundamental Change;
(iii) Continuing Directors cease to constitute at least a
majority of the Board of Directors;
5
(iv) the shareholders of the Company approve any plan or
proposal for the liquidation or dissolution of the Company; or
(v) the Common Stock or other common stock into which the
Debentures are convertible is neither listed for trading on a U.S.
national securities exchange nor approved for trading on the Nasdaq
Stock Market or another established automated over the-counter trading
market in the United States.
A Fundamental Change will not be deemed to have occurred in respect of
any of the foregoing, however, if either:
(i) the Last Reported Sale Price of the Common Stock for any
five (5) Trading Days within the ten (10) consecutive Trading Days
ending immediately before the later of the Fundamental Change or the
public announcement thereof, equals or exceeds 105% of the Conversion
Price of the Debentures immediately before the Fundamental Change or
the public announcement thereof, or
(ii) at least 90% of the consideration, excluding cash
payments for fractional shares, in the transaction or transactions
constituting the Fundamental Change consists of shares of capital
stock traded on a national securities exchange or quoted on the Nasdaq
Stock Market or which will be so traded or quoted when issued or
exchanged in connection with a Fundamental Change (these securities
being referred to as "PUBLICLY TRADED SECURITIES") and as a result of
this transaction or transactions the Debentures become convertible
into such publicly traded securities, excluding cash payments for
fractional shares.
"FUNDAMENTAL CHANGE REPURCHASE DATE" has the meaning specified in
Section 3.05(a).
"FUNDAMENTAL CHANGE REPURCHASE ELECTION" has the meaning specified in
Section 3.05(c)(i).
"FUNDAMENTAL CHANGE REPURCHASE NOTICE" has the meaning specified in
Section 3.05(b).
"FUNDAMENTAL CHANGE REPURCHASE PRICE" has the meaning provided in
Section 3.05(a).
"GLOBAL DEBENTURE" has the meaning specified in Section 2.02.
"INDENTURE" means this instrument as originally executed or, if
amended or supplemented as herein provided, as so amended or supplemented.
"INITIAL PURCHASERS" means each of X.X. Xxxxxx Securities Inc., Banc of
America Securities LLC and Xxxxx Fargo Securities, LLC (each, an "INITIAL
PURCHASER").
"INTEREST" means, when used with reference to the Debentures, any
interest payable under the terms of the Debentures, including Contingent
Interest, if any, and Additional Amounts, if any, payable under the terms of
the Registration Rights Agreement.
6
"INTEREST PAYMENT DATE" means May 15 and November 15 of each year,
commencing November 15, 2004.
"INTEREST PERIOD" means any six-month period from May 15 to November
14 or from November 15 to May 14 commencing on or after November 15, 2004 and
ending before May 15, 2011.
"LAST REPORTED SALE PRICE" of the Common Stock on any date means the
closing sale price per share (or if no closing sale price is reported, the
average of the bid and asked prices or, if more than one in either case, the
average of the average bid and the average asked prices) on that date as
reported in composite transactions for the principal U.S. securities exchange
on which the Common Stock is traded or, if the Common Stock is not listed on a
U.S. national or regional securities exchange, as reported by the Nasdaq Stock
Market. If the Common Stock is not listed for trading on a U.S. national or
regional securities exchange and not reported by the Nasdaq Stock Market on the
relevant date, the "Last Reported Sale Price" will be the last quoted bid price
for the Common Stock in the over-the-counter market on the relevant date as
reported by the National Quotation Bureau Incorporated or similar organization.
If the Common Stock is not so quoted, the "Last Reported Sale Price" will be
the average of the mid-point of the last bid and asked prices for the Common
Stock on the relevant date quoted by each of at least three nationally
recognized independent investment banking firms selected by the Company for
this purpose.
"MAKE-WHOLE PREMIUM" has the meaning specified in Section 3.05(d).
"MARKET PRICE" means, with respect to any Repurchase Date or other
date of determination, the average of the Last Reported Sale Price of the
Common Stock for the twenty (20) consecutive Trading Days ending on the third
Business Day prior to the applicable Repurchase Date or date of determination
(or, if such third Business Day prior to the applicable Repurchase Date or date
of determination is not a Trading Day, then ending on the last Trading Day
prior to such third Business Day), appropriately adjusted to take into account
the occurrence, during the period commencing on the first Trading Day during
the period of twenty (20) consecutive Trading Days and ending on the Repurchase
Date or date of determination, as applicable, of any event described in Section
15.05 or Section 15.06.
"NON-ELECTING SHARE" has the meaning specified in Section 15.06.
"OFFICERS' CERTIFICATE", when used with respect to the Company, means
a certificate signed by any two of the Chairman of the Board, the Chief
Executive Officer, the Chief Operating Officer, the President, the Chief
Financial Officer, any Vice President (whether or not designated by a number or
numbers or word or words added before or after the title "Vice President"), the
Treasurer or the Secretary of the Company; provided that the Officers'
Certificate delivered on the date hereof pursuant to Section 16.05 may be
signed by any one of the foregoing.
"OPINION OF COUNSEL" means an opinion in writing signed by legal
counsel, who may be an employee of or counsel to the Company, or other counsel
reasonably acceptable to the Trustee.
7
"ORIGINAL ISSUE DATE" means June 1, 2004.
"OUTSTANDING", when used with reference to Debentures and subject to
the provisions of Section 9.04, means, as of any particular time, all
Debentures authenticated and delivered by the Trustee under this Indenture,
except:
(a) Debentures theretofore canceled by the Trustee or
delivered to the Trustee for cancellation;
(b) Debentures, or portions thereof, (i) for the redemption
of which monies in the necessary amount shall have been deposited in
trust with the Trustee or with any Paying Agent (other than the
Company) or (ii) which shall have been otherwise defeased in
accordance with Article 13;
(c) Debentures in lieu of which, or in substitution for which,
other Debentures shall have been authenticated and delivered pursuant
to the terms of Section 2.06; and
(d) Debentures converted into Common Stock, cash or a
combination of cash and Common Stock pursuant to Article 15 and
Debentures deemed not outstanding pursuant to Article 3.
"PAYING AGENT" means the Trustee or such other office or agency
designated by the Company where Debentures may be presented for payment.
"PERSON" means a corporation, an association, a partnership, a limited
liability company, an individual, a joint venture, a joint stock company, a
trust, an unincorporated organization or a government or an agency or a
political subdivision thereof.
"PORTAL MARKET" means The Portal Market operated by NASD, Inc. or any
successor thereto.
"PREDECESSOR DEBENTURE" of any particular Debenture means every
previous Debenture evidencing all or a portion of the same debt as that
evidenced by such particular Debenture, and, for the purposes of this
definition, any Debenture authenticated and delivered under Section 2.06 in
lieu of a lost, destroyed or stolen Debenture shall be deemed to evidence the
same debt as the lost, destroyed or stolen Debenture that it replaces.
"PURCHASED SHARES" has the meaning specified in Section 15.05(e).
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"REDEMPTION DATE" has the meaning specified in Section 3.02(a).
"REDEMPTION NOTICE" has the meaning specified in Section 3.02(a).
"REDEMPTION PRICE" has the meaning specified in Section 3.01.
8
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights
Agreement, dated as of June 1, 2004, among the Company and the Initial
Purchasers, as amended from time to time in accordance with its terms.
"REGULAR RECORD DATE" means, with respect to each Interest Payment
Date, the close of business on the May 1 or November 1 next preceding such
Interest Payment Date (whether or not a Business Day).
"REPURCHASE DATE" means the Fundamental Change Repurchase Date or the
Company Repurchase Date, as applicable.
"REPURCHASE ELECTION" means the Fundamental Change Repurchase Election
or the Company Repurchase Election, as applicable.
"REPURCHASE PRICE" means the Fundamental Change Repurchase Price or
the Company Repurchase Price, as applicable.
"RESPONSIBLE OFFICER" means, when used with respect to the Trustee,
any officer of the Trustee within the Institutional Trust Services -
Conventional Debt Unit (or any successor unit, department or division of the
Trustee) located at the Corporate Trust Office of the Trustee who has direct
responsibility for the administration of this Indenture and, for the purposes
of Sections 7.08 and 8.01(b), also means any other officer or person performing
similar functions to whom any corporate trust matter is referred because of
such person's knowledge of any familiarity with the particular subject.
"RESTRICTED SECURITIES" has the meaning specified in Section 2.05(c).
"RULE 144A" means Rule 144A as promulgated under the Securities Act.
"SECURITIES ACT" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder, as in effect from time to time.
"SPECIAL RECORD DATE" has the meaning specified in Section 2.03.
"SPIN-OFF" has the meaning specified in Section 15.05(c).
"SPIN-OFF MARKET PRICE" per share of Common Stock of the Company or
the capital stock of, or similar equity interests in, a subsidiary or other
business unit of the Company on any day means the average of the daily Last
Reported Sale Price for the ten (10) consecutive Trading Days commencing on and
including the fifth Trading Day after the Ex-Dividend Date with respect to the
issuance or distribution requiring such computation.
"STATED MATURITY" means May 15, 2034.
"STOCK RECORD DATE" means, with respect to any dividend, distribution
or other transaction or event in which the holders of Common Stock have the
right to receive any cash, securities or other property or in which the Common
Stock (or other applicable security) is exchanged for or converted into any
combination of cash, securities or other property, the date fixed for
determination
9
of shareholders entitled to receive such cash, securities or other property
(whether such date is fixed by the Board of Directors or by statute, contract or
otherwise).
"SUBSIDIARY" means, with respect to any Person, (i) any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of capital stock or other equity interest entitled (without
regard to the occurrence of any contingency) to vote in the election of
directors, managers or trustees thereof is at the time owned or controlled,
directly or indirectly, by such Person or one or more of the other subsidiaries
of that Person (or a combination thereof) and (ii) any partnership (a) the sole
general partner or managing general partner of which is such Person or a
subsidiary of such Person or (b) the only general partners of which are such
Person or one or more subsidiaries of such Person (or any combination thereof).
"TAX ORIGINAL ISSUE DISCOUNT" means the amount of ordinary interest
income on a Debenture that must be accrued as original issue discount for
United States Federal income tax purposes pursuant to U.S. Treasury Regulation
Section 1.1275-4.
"TRADING DAY" means (a) if the applicable security is listed, admitted
for trading or quoted on the New York Stock Exchange, the Nasdaq Stock Market
or another U.S. national or regional securities exchange, a day on which the
New York Stock Exchange, the Nasdaq Stock Market or such other national or
regional securities exchange, as the case may be, is open for business or (b)
if the applicable security is not so listed, admitted for trading or quoted,
any Business Day.
"TRADING PRICE" means, as of any date of determination, the average of
the secondary market bid quotations per $1,000 principal amount of Debentures
obtained by the Bid Solicitation Agent for $2 million aggregate principal
amount of Debentures at approximately 4:00 p.m., New York City time, on such
determination date from two nationally recognized securities dealers (none of
which shall be an Affiliate of the Company), which may include one or more of
the Initial Purchasers, in The City of New York (or such other place that may
be determined from time to time by the Company) selected by the Company;
provided, however, if (a) at least two such bids are not obtained by the Bid
Solicitation Agent or (b) in the Company's reasonable judgment, the bid
quotations are not indicative of the secondary market value of the Debentures
as of such determination date, then the Trading Price per $1,000 principal
amount of the Debentures for such determination date shall equal (1) the
Conversion Rate as of such determination date multiplied by (2) the average
Last Reported Sale Price of the Common Stock on the five (5) Trading Days
ending on such determination date appropriately adjusted to take into account
the occurrence, during the period commencing on the first of such Trading Days
during such five (5) Trading Day period and ending on such determination date,
of any event described in Section 15.05 or Section 15.06. The Bid Solicitation
Agent shall solicit bids from securities dealers that the Company believes to
be willing to bid for Debentures.
"TRUST INDENTURE ACT" means the Trust Indenture Act of 1939, as
amended, as it was in force at the date of this Indenture, except as provided
in Sections 11.03 and 15.06; provided that if the Trust Indenture Act of 1939
is amended after the date hereof, the term "Trust Indenture Act" shall mean, to
the extent required by such amendment, the Trust Indenture Act of 1939 as so
amended.
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"TRUSTEE" means U.S. Bank National Association and its successors and
any corporation resulting from or surviving any consolidation or merger to
which it or its successors may be a party and any successor trustee at the time
serving as successor trustee hereunder.
ARTICLE 2
ISSUE, DESCRIPTION, EXECUTION, REGISTRATION
AND EXCHANGE OF DEBENTURES
Section 2.01. Designation Amount and Issue of Debentures. The
Debentures shall be designated as "3.25% Convertible Senior Debentures due
2034". Debentures not to exceed the aggregate principal amount of $115,000,000
(except pursuant to Sections 2.05, 2.06, 3.05, 3.06 and 15.02 hereof) upon the
execution of this Indenture, or from time to time thereafter, may be executed by
the Company and delivered to the Trustee for authentication, and the Trustee
shall thereupon authenticate and deliver said Debentures to or upon the written
order of the Company, signed by its Chief Executive Officer, its President, its
Chief Operating Officer or any Vice President (whether or not designated by a
number or numbers or word or words added before or after the title "Vice
President"), without any further action by the Company hereunder.
Section 2.02. Form of Debentures. The Debentures and the Trustee's
certificate of authentication to be borne by such Debentures shall be
substantially in the form set forth in Exhibit A. The terms and provisions
contained in the form of Debenture attached as Exhibit A hereto shall
constitute, and are hereby expressly made, a part of this Indenture and, to the
extent applicable, the Company and the Trustee, by their execution and delivery
of this Indenture, expressly agree to such terms and provisions and to be bound
thereby.
Any of the Debentures may have such letters, numbers or other marks of
identification and such notations, legends, endorsements or changes as the
officers executing the same may approve (execution thereof to be conclusive
evidence of such approval) and as are not inconsistent with the provisions of
this Indenture, or as may be required by the Custodian, the Depositary or by
the National Association of Securities Dealers, Inc. in order for the
Debentures to be tradable on The Portal Market or as may be required for the
Debentures to be tradable on any other market developed for trading of
securities pursuant to Rule 144A or as may be required to comply with any
applicable law or with any rule or regulation made pursuant thereto or with any
rule or regulation of any securities exchange or automated quotation system on
which the Debentures may be listed, or to conform to usage, or to indicate any
special limitations or restrictions to which any particular Debentures are
subject.
So long as the Debentures are eligible for book-entry settlement with
the Depositary, or unless otherwise required by law, or otherwise contemplated
by Section 2.05(a), all of the Debentures will be represented by one or more
Debentures in global form registered in the name of the Depositary or the
nominee of the Depositary (a "GLOBAL DEBENTURE"). The transfer and exchange of
beneficial interests in any such Global Debenture shall be effected through the
Depositary in accordance with this Indenture and the applicable procedures of
the Depositary. Except as provided in Section 2.05(a), beneficial holders of a
Global Debenture will not receive or be entitled to receive physical delivery
of certificates in definitive form and will not be considered holders of such
Global Debenture.
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Any Global Debenture shall represent such of the outstanding
Debentures as shall be specified therein and shall provide that it shall
represent the aggregate amount of outstanding Debentures from time to time
endorsed thereon and that the aggregate amount of outstanding Debentures
represented thereby may from time to time be increased or reduced to reflect
redemptions, repurchases, conversions, transfers or exchanges permitted hereby.
Any endorsement of a Global Debenture to reflect the amount of any increase or
decrease in the amount of outstanding Debentures represented thereby shall be
made by the Trustee or the Custodian, at the direction of the Trustee, in such
manner and upon instructions given by the holder of such Debentures in
accordance with this Indenture. Payment of principal of and Interest on any
Global Debenture shall be made to the holder of such Debenture.
Section 2.03. Date and Denomination of Debentures; Payments of
Interest. The Debentures shall be issuable in fully registered form without
interest coupons in denominations of $1,000 principal amount and integral
multiples thereof. Each Debenture shall be dated the date of its authentication
and shall bear interest from the date specified on the face of the form of
Debenture attached as Exhibit A hereto. Interest on the Debentures shall be
computed on the basis of a 360-day year comprised of twelve 30-day months.
The Person in whose name any Debenture (or its Predecessor Debenture)
is registered on the Debenture Register at the close of business on the Regular
Record Date with respect to an Interest Payment Date shall be entitled to
receive the Interest payable on such Interest Payment Date, except that the
Interest payable upon redemption or repurchase will be payable to the Person to
whom principal is payable pursuant to such redemption or repurchase (unless the
Redemption Date or the Repurchase Date, as the case may be, is an Interest
Payment Date, in which case the semi-annual payment of interest becoming due on
such date shall be payable to the holders of such Debentures registered as such
on the applicable Regular Record Date). Notwithstanding the foregoing, if any
Debenture (or portion thereof) is converted into Common Stock during the period
after a Regular Record Date to, but excluding, the next succeeding Interest
Payment Date and such Debenture (or portion thereof) has been called or
tendered for redemption on a Redemption Date which occurs during such period,
the Company shall not be required to pay interest on such Interest Payment Date
in respect of any such Debenture (or portion thereof), except as provided in
Section 15.02. Interest shall be payable at the office of the Company
maintained by the Company for such purposes in the Borough of Manhattan, The
City of New York, which shall initially be an office or agency of the Trustee.
The Company shall pay Interest (i) on any Debentures in certificated form by
check mailed to the address of the Person entitled thereto as it appears in the
Debenture Register (or upon written notice, by wire transfer in immediately
available funds, if such Person is entitled to Interest on Debentures with an
aggregate principal amount in excess of $2,000,000) or (ii) on any Global
Debenture by wire transfer of immediately available funds to the account of the
Depositary or its nominee.
Any Interest on any Debenture which is payable, but is not punctually
paid or duly provided for, on any May 15 or November 15 (herein called
"DEFAULTED INTEREST") shall forthwith cease to be payable to the
Debentureholder on the relevant Regular Record Date by virtue of his having
been such Debentureholder, and such Defaulted Interest shall be paid by the
Company, at its election in each case, as provided in clause (1) or (2) below:
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(1) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Debentures (or their
respective Predecessor Debentures) are registered at the close of
business on a "SPECIAL RECORD DATE" for the payment of such Defaulted
Interest, which shall be the date fixed in the following manner. The
Company shall notify the Trustee in writing of the amount of Defaulted
Interest proposed to be paid on each Debenture and the date of the
proposed payment (which shall be not less than twenty-five (25) days
after the receipt by the Trustee of such notice, unless the Trustee
shall consent to an earlier date), and at the same time the Company
shall deposit with the Trustee an amount of money equal to the
aggregate amount to be paid in respect of such Defaulted Interest or
shall make arrangements satisfactory to the Trustee for such deposit on
or prior to the date of the proposed payment, such money when deposited
to be held in trust for the benefit of the Persons entitled to such
Defaulted Interest as in this clause provided. Thereupon the Trustee
shall fix a Special Record Date for the payment of such Defaulted
Interest which shall be not more than fifteen (15) days and not less
than ten (10) days prior to the date of the proposed payment, and not
less than ten (10) days after the receipt by the Trustee of the notice
of the proposed payment. The Trustee shall promptly notify the Company
of such Special Record Date and, in the name and at the expense of the
Company, shall cause notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor to be mailed, first-class
postage prepaid, to each holder at his address as it appears in the
Debenture Register, not less than ten (10) days prior to such Special
Record Date. Notice of the proposed payment of such Defaulted Interest
and the Special Record Date therefor having been so mailed, such
Defaulted Interest shall be paid to the Persons in whose names the
Debentures (or their respective Predecessor Debentures) are registered
at the close of business on such Special Record Date and shall no
longer be payable pursuant to the following clause (2) of this Section
2.03.
(2) The Company may make payment of any Defaulted Interest in
any other lawful manner not inconsistent with the requirements of any
securities exchange or automated quotation system on which the
Debentures may be listed or designated for issuance, and upon such
notice as may be required by such exchange or automated quotation
system, if, after notice given by the Company to the Trustee of the
proposed payment pursuant to this clause, such manner of payment shall
be deemed practicable by the Trustee.
Section 2.04. Execution of Debentures. The Debentures shall be signed
in the name and on behalf of the Company by the manual or facsimile signature of
its Chief Executive Officer, President, Chief Operating Officer or any Vice
President (whether or not designated by a number or numbers or word or words
added before or after the title "Vice President"). Only such Debentures as shall
bear thereon a certificate of authentication substantially in the form set forth
on the form of Debenture attached as Exhibit A hereto, manually executed by the
Trustee (or an authenticating agent appointed by the Trustee as provided by
Section 16.12, shall be entitled to the benefits of this Indenture or be valid
or obligatory for any purpose. Such certificate by the Trustee (or such an
authenticating agent) upon any Debenture executed by the Company shall be
conclusive evidence that the Debenture so authenticated has been duly
authenticated and delivered hereunder and that the holder is entitled to the
benefits of this Indenture.
13
In case any officer of the Company who shall have signed any of the
Debentures shall cease to be such officer before the Debentures so signed shall
have been authenticated and delivered by the Trustee, or disposed of by the
Company, such Debentures nevertheless may be authenticated and delivered or
disposed of as though the person who signed such Debentures had not ceased to
be such officer of the Company, and any Debenture may be signed on behalf of
the Company by such persons as, at the actual date of the execution of such
Debenture, shall be the proper officers of the Company, although at the date of
the execution of this Indenture any such person was not such an officer.
Section 2.05. Exchange and Registration of Transfer of Debentures;
Restrictions on Transfer. (a) The Company shall cause to be kept at the
Corporate Trust Office a register (the register maintained in such office and in
any other office or agency of the Company designated pursuant to Section 5.02
being herein sometimes collectively referred to as the "DEBENTURE REGISTER") in
which, subject to such reasonable regulations as it may prescribe, the Company
shall provide for the registration of Debentures and of transfers of Debentures.
The Debenture Register shall be in written form or in any form capable of being
converted into written form within a reasonably prompt period of time. The
Trustee is hereby appointed "DEBENTURE REGISTRAR" for the purpose of registering
Debentures and transfers of Debentures as herein provided. The Company may
appoint one or more co-registrars in accordance with Section 5.02.
Upon surrender for registration of transfer of any Debenture to the
Debenture Registrar or any co-registrar, and satisfaction of the requirements
for such transfer set forth in this Section 2.05, the Company shall execute,
and the Trustee shall authenticate and deliver, in the name of the designated
transferee or transferees, one or more new Debentures of any authorized
denominations and of a like aggregate principal amount and bearing such
restrictive legends as may be required by this Indenture.
Debentures may be exchanged for other Debentures of any authorized
denominations and of a like aggregate principal amount, upon surrender of the
Debentures to be exchanged at any such office or agency maintained by the
Company pursuant to Section 5.02. Whenever any Debentures are so surrendered
for exchange, the Company shall execute, and the Trustee shall authenticate and
deliver, the Debentures which the Debentureholder making the exchange is
entitled to receive bearing registration numbers not contemporaneously
outstanding.
All Debentures issued upon any registration of transfer or exchange of
Debentures shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Debentures
surrendered upon such registration of transfer or exchange.
All Debentures presented or surrendered for registration of transfer
or for exchange, redemption, repurchase or conversion shall (if so required by
the Company or the Debenture Registrar) be duly endorsed, or be accompanied by
a written instrument or instruments of transfer in form satisfactory to the
Company, duly executed by the Debentureholder thereof or his attorney duly
authorized in writing.
No service charge shall be made to any holder for any registration of,
transfer or exchange of Debentures, but the Company may require payment by the
holder of a sum sufficient
14
to cover any tax, assessment or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Debentures.
Neither the Company nor the Trustee nor any Debenture Registrar shall
be required to exchange or register a transfer of (a) any Debentures for a
period of fifteen (15) days next preceding any selection of Debentures to be
redeemed, (b) any Debentures or portions thereof called for redemption pursuant
to Section 3.01, (c) any Debentures or portions thereof surrendered for
conversion pursuant to Article 15, (d) any Debentures or portions thereof
tendered for repurchase (and not withdrawn) pursuant to Section 3.05 or (e) any
Debentures or portions thereof tendered for repurchase (and not withdrawn)
pursuant to Section 3.06.
(b) The following provisions shall apply only to Global Debentures:
(i) Each Global Debenture authenticated under this Indenture
shall be registered in the name of the Depositary or a nominee thereof
and delivered to the Depositary or a nominee thereof or Custodian
therefor, and each such Global Debenture shall constitute a single
Debenture for all purposes of this Indenture.
(ii) Notwithstanding any other provision in this Indenture, no
Global Debenture may be exchanged in whole or in part for Debentures
registered, and no transfer of a Global Debenture in whole or in part
may be registered, in the name of any Person other than the Depositary
or a nominee thereof unless (A) the Depositary (i) has notified the
Company that it is unwilling or unable to continue as Depositary for
such Global Debenture and a successor depositary has not been appointed
by the Company within ninety (90) days or (ii) has ceased to be a
clearing agency registered under the Exchange Act, (B) an Event of
Default has occurred and is continuing, (C) the Company, in its sole
discretion, notifies the Trustee in writing that it no longer wishes to
have all the Debentures represented by Global Debentures or (D) any
beneficial holder reasonably requests such exchange on terms acceptable
to the Company, the Trustee and the Depositary, which in the case of
the Trustee may include, in the Trustee's sole discretion, among other
things, the requirement that (i) the Trustee and any Debenture
Registrar receive (a) from the Company or the Depositary a written
order, in either case requesting such exchange, and an Opinion of
Counsel (which upon receipt thereof the Trustee and such Debenture
Registrar shall be fully protected in relying on) to the effect that
(x) all securities laws in connection with such exchange have been
complied with and (y) such exchange is otherwise authorized or
permitted by this Indenture; and (b) from such beneficial holder (x) an
affidavit as to its beneficial ownership interest in such Global
Debenture and/or (y) an indemnity, reasonably satisfactory to the
Trustee and such Debenture Registrar, against any loss, liability or
expense to the Trustee and such Debenture Registrar to the extent that
the Trustee or Debenture Registrar acts upon such order, affidavit
and/or indemnity; and (ii) such exchange can be accomplished in a
manner that is practicable and not inconsistent with the rules of any
applicable Depositary or securities exchange upon which the Debentures
may be listed for trading. Any Global Debenture exchanged pursuant to
clause (A) or (B) above shall be so exchanged in whole and not in part
and any Global Debenture exchanged pursuant to clause (C) or (D) above
may be exchanged in whole or from time to time in part as directed by
the Company. Any Debenture issued in exchange for a Global Debenture or
any portion thereof shall be a Global Debenture; provided that any
15
such Debenture so issued that is registered in the name of a Person
other than the Depositary or a nominee thereof shall not be a Global
Debenture.
(iii) Securities issued in exchange for a Global Debenture or
any portion thereof pursuant to clause (ii) above shall be issued in
definitive, fully registered form, without interest coupons, shall have
an aggregate principal amount equal to that of such Global Debenture or
portion thereof to be so exchanged, shall be registered in such names
and be in such authorized denominations as the Depositary shall
designate and shall bear any legends required hereunder. Any Global
Debenture to be exchanged in whole shall be surrendered by the
Depositary to the Trustee, as Debenture Registrar. With regard to any
Global Debenture to be exchanged in part, either such Global Debenture
shall be so surrendered for exchange or, if the Trustee is acting as
Custodian for the Depositary or its nominee with respect to such Global
Debenture, the principal amount thereof shall be reduced, by an amount
equal to the portion thereof to be so exchanged, by means of an
appropriate adjustment made on the records of the Trustee. Upon any
such surrender or adjustment, the Trustee shall authenticate and make
available for delivery the Debenture issuable on such exchange to or
upon the written order of the Depositary or an authorized
representative thereof.
(iv) In the event of the occurrence of any of the events
specified in clause (ii) above, the Company will promptly make
available to the Trustee a reasonable supply of certificated Debentures
in definitive, fully registered form, without interest coupons.
(v) Neither any members of, or participants in, the Depositary
("AGENT MEMBERS") nor any other Persons on whose behalf Agent Members
may act shall have any rights under this Indenture with respect to any
Global Debenture registered in the name of the Depositary or any
nominee thereof, and the Depositary or such nominee, as the case may
be, may be treated by the Company, the Trustee and any agent of the
Company or the Trustee as the absolute owner and holder of such Global
Debenture for all purposes whatsoever. Notwithstanding the foregoing,
nothing herein shall prevent the Company, the Trustee or any agent of
the Company or the Trustee from giving effect to any written
certification, proxy or other authorization furnished by the Depositary
or such nominee, as the case may be, or impair, as between the
Depositary, its Agent Members and any other Person on whose behalf an
Agent Member may act, the operation of customary practices of such
Persons governing the exercise of the rights of a beneficial holder of
any Debenture.
(vi) At such time as all interests in a Global Debenture have
been redeemed, repurchased, converted, canceled or exchanged for
Debentures in certificated form, such Global Debenture shall, upon
receipt thereof, be canceled by the Trustee in accordance with standing
procedures and instructions existing between the Depositary and the
Custodian. At any time prior to such cancellation, if any interest in a
Global Debenture is redeemed, repurchased, converted, canceled or
exchanged for Debentures in certificated form, the principal amount of
such Global Debenture shall, in accordance with the standing procedures
and instructions existing between the Depositary and the Custodian, be
appropriately reduced, and an endorsement shall be made on such Global
Debenture, by the Trustee or the Custodian, at the direction of the
Trustee, to reflect such reduction.
16
(c) Every Debenture that bears or is required under this Section
2.05(c) to bear the legend set forth in this Section 2.05(c) (together with any
Common Stock issued upon conversion of the Debentures and required to bear the
legend set forth in Section 2.05(d), collectively, the "RESTRICTED SECURITIES")
shall be subject to the restrictions on transfer set forth in this Section
2.05(c) (including those set forth in the legend below) unless such restrictions
on transfer shall be waived by written consent of the Company, and the holder of
each such Restricted Security, by such holder's acceptance thereof, agrees to be
bound by all such restrictions on transfer. As used in Sections 2.05(c) and
2.05(d), the term "TRANSFER" encompasses any sale, pledge, loan, transfer or
other disposition whatsoever of any Restricted Security or any interest therein.
Until the expiration of the holding period applicable to sales thereof
under Rule 144(k) under the Securities Act (or any successor provision), any
certificate evidencing such Debenture (and all securities issued in exchange
therefor or substitution thereof, other than Common Stock, if any, issued upon
conversion thereof, which shall bear the legend set forth in Section 2.05(d),
if applicable) shall bear a legend in substantially the following form, unless
such Debenture has been sold pursuant to a registration statement that has been
declared effective under the Securities Act (and which continues to be
effective at the time of such transfer) or pursuant to Rule 144 under the
Securities Act or any similar provision then in force, or unless otherwise
agreed by the Company in writing, with written notice thereof to the Trustee:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS
OF ANY STATE OR OTHER JURISDICTION. NEITHER THIS SECURITY NOR ANY
INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED,
TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT
FROM, OR NOT SUBJECT TO, SUCH REGISTRATION. THE HOLDER OF THIS
SECURITY, BY ITS ACCEPTANCE HEREOF, (1) REPRESENTS THAT IT IS A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT ("RULE 144A")); (2) AGREES ON ITS OWN BEHALF AND ON
BEHALF OF ANY INVESTOR ACCOUNT FOR WHICH IT HAS PURCHASED SECURITIES,
TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY OR ANY COMMON STOCK
ISSUABLE UPON CONVERSION OF SUCH SECURITY, PRIOR TO THE EXPIRATION OF
THE HOLDING PERIOD APPLICABLE TO SALES OF THIS SECURITY UNDER RULE
144(k) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION), ONLY (A)
TO WILD OATS MARKETS, INC. (THE "ISSUER"), (B) PURSUANT TO A
REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE
SECURITIES ACT (AND WHICH CONTINUES TO BE EFFECTIVE AT THE TIME OF
SUCH TRANSFER), (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR
RESALE PURSUANT TO RULE 144A, IN COMPLIANCE WITH RULE 144A TO A PERSON
IT REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER THAT
PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING
MADE IN RELIANCE ON RULE 144A OR (D) PURSUANT TO ANOTHER AVAILABLE
EXEMPTION
17
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO
THE ISSUER'S AND THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR
TRANSFER PURSUANT TO CLAUSE (D) TO REQUIRE THE DELIVERY OF AN OPINION
OF COUNSEL, CERTIFICATION AND/ OR OTHER INFORMATION SATISFACTORY TO
EACH OF THEM; AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO
WHOM THIS SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT
OF THIS LEGEND. THIS LEGEND WILL BE REMOVED UPON THE EARLIER OF THE
TRANSFER OF THIS SECURITY PURSUANT TO CLAUSE 2(B) ABOVE OR UPON ANY
TRANSFER OF THIS SECURITY UNDER RULE 144 UNDER THE SECURITIES ACT (OR
ANY SUCCESSOR PROVISION).
FOR PURPOSES OF SECTIONS 1272, 1273 AND 1275 OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED, THIS DEBENTURE IS BEING ISSUED WITH
ORIGINAL ISSUE DISCOUNT. THE ISSUE PRICE OF EACH DEBENTURE IS $1,000
PER $1,000 OF PRINCIPAL AMOUNT, AND THE ISSUE DATE IS JUNE 1, 2004. IN
ADDITION, THIS DEBENTURE IS SUBJECT TO UNITED STATES FEDERAL INCOME
TAX REGULATIONS GOVERNING CONTINGENT PAYMENT DEBT INSTRUMENTS. FOR
PURPOSES OF SECTIONS 1272, 1273 AND 1275 OF THE INTERNAL REVENUE CODE,
THE COMPARABLE YIELD OF THIS DEBENTURE IS 8.25%, COMPOUNDED
SEMIANNUALLY (WHICH WILL BE TREATED AS THE YIELD TO MATURITY FOR
UNITED STATES FEDERAL INCOME TAX PURPOSES).
THE ISSUER AGREES, AND BY ACCEPTING A BENEFICIAL OWNERSHIP
INTEREST IN THIS DEBENTURE EACH HOLDER AND ANY BENEFICIAL OWNER OF
THIS DEBENTURE WILL BE DEEMED TO HAVE AGREED, FOR UNITED STATES
FEDERAL INCOME TAX PURPOSES (1) TO TREAT THIS DEBENTURE AS A DEBT
INSTRUMENT THAT IS SUBJECT TO TREAS. REG. SEC. 1.1275-4 (THE
"CONTINGENT PAYMENT REGULATIONS"), (2) TO TREAT THE FAIR MARKET VALUE
OF ANY COMMON STOCK RECEIVED UPON ANY CONVERSION OF THIS DEBENTURE OR
UPON A PURCHASE OF THIS DEBENTURE AT THE HOLDER'S OPTION AS A
CONTINGENT PAYMENT FOR PURPOSES OF THE CONTINGENT PAYMENT REGULATIONS,
AND (3) TO ACCRUE INTEREST WITH RESPECT TO THE DEBENTURE AS ORIGINAL
ISSUE DISCOUNT FOR UNITED STATES FEDERAL INCOME TAX PURPOSES ACCORDING
TO THE "NONCONTINGENT BOND METHOD," SET FORTH IN THE CONTINGENT
PAYMENT REGULATIONS, AND TO BE BOUND BY THE ISSUER'S DETERMINATION OF
THE "COMPARABLE YIELD" AND "PROJECTED PAYMENT SCHEDULE," WITHIN THE
MEANING OF THE CONTINGENT PAYMENT REGULATIONS, WITH RESPECT TO THIS
DEBENTURE. THE ISSUER AGREES TO PROVIDE PROMPTLY TO THE HOLDER OF THIS
DEBENTURE, UPON WRITTEN REQUEST, THE ISSUE PRICE, AMOUNT OF ORIGINAL
ISSUE DISCOUNT, ISSUE DATE, YIELD TO MATURITY, COMPARABLE YIELD AND
PROJECTED PAYMENT SCHEDULE. ANY SUCH WRITTEN REQUEST SHOULD BE SENT TO
THE ISSUER AT THE FOLLOWING ADDRESS: WILD OATS MARKETS,
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INC., 0000 XXXXXXXX XXXX, XXXXXXX, XXXXXXXX 00000, ATTN: GENERAL
COUNSEL.
THE HOLDER OF THIS SECURITY IS ENTITLED TO THE BENEFITS OF A
REGISTRATION RIGHTS AGREEMENT DATED JUNE 1, 2004 AND, BY ITS
ACCEPTANCE HEREOF, AGREES TO BE BOUND BY AND TO COMPLY WITH THE
PROVISIONS OF SUCH REGISTRATION RIGHTS AGREEMENT.
Any Debenture (or security issued in exchange or substitution
therefor) as to which such restrictions on transfer shall have expired in
accordance with their terms or as to conditions for removal of the foregoing
legend set forth therein have been satisfied may, upon surrender of such
Debenture for exchange to the Debenture Registrar in accordance with the
provisions of this Section 2.05, be exchanged for a new Debenture or
Debentures, of like tenor and aggregate principal amount, which shall not bear
the restrictive legend required by this Section 2.05(c). If the Restricted
Security surrendered for exchange is represented by a Global Debenture bearing
the legend set forth in this Section 2.05(c), the principal amount of the
legended Global Debenture shall be reduced by the appropriate principal amount
and the principal amount of a Global Debenture without the legend set forth in
this Section 2.05(c) shall be increased by an equal principal amount. If a
Global Debenture without the legend set forth in this Section 2.05(c) is not
then outstanding, the Company shall execute and the Trustee shall authenticate
and deliver an unlegended Global Debenture to the Depositary.
(d) Until the expiration of the holding period applicable to sales
thereof under Rule 144(k) under the Securities Act (or any successor provision),
any stock certificate representing Common Stock issued upon conversion of any
Debenture shall bear a legend in substantially the following form, unless such
Common Stock has been sold pursuant to a registration statement that has been
declared effective under the Securities Act (and which continues to be effective
at the time of such transfer) or pursuant to Rule 144 under the Securities Act
or any similar provision then in force, or such Common Stock has been issued
upon conversion of Debentures that have been transferred pursuant to a
registration statement that has been declared effective under the Securities Act
or pursuant to Rule 144 under the Securities Act or any similar provision then
in force, or unless otherwise agreed by the Company in writing with written
notice thereof to the transfer agent:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS
OF ANY STATE OR OTHER JURISDICTION. NEITHER THIS SECURITY NOR ANY
INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED,
TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT
FROM, OR NOT SUBJECT TO, SUCH REGISTRATION. THE HOLDER OF THIS
SECURITY, BY ITS ACCEPTANCE HEREOF, (1) REPRESENTS THAT IT IS A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT ("RULE 144A")); (2) AGREES ON ITS OWN BEHALF AND ON
BEHALF OF ANY INVESTOR ACCOUNT FOR WHICH IT HAS PURCHASED SECURITIES,
TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE
EXPIRATION OF
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THE HOLDING PERIOD APPLICABLE TO SALES OF THIS SECURITY UNDER RULE
144(k) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION), ONLY (A)
TO WILD OATS MARKETS, INC. (THE "ISSUER"), (B) PURSUANT TO A
REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE
SECURITIES ACT (AND WHICH CONTINUES TO BE EFFECTIVE AT THE TIME OF SUCH
TRANSFER), (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE
PURSUANT TO RULE 144A, IN COMPLIANCE WITH RULE 144A TO A PERSON IT
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER THAT PURCHASES
FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL
BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN
RELIANCE ON RULE 144A OR (D) PURSUANT TO ANOTHER AVAILABLE EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO
THE ISSUER'S AND THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR
TRANSFER PURSUANT TO CLAUSE (D) TO REQUIRE THE DELIVERY OF AN OPINION
OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH
OF THEM; AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM
THIS SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF
THIS LEGEND. THIS LEGEND WILL BE REMOVED UPON THE EARLIER OF THE
TRANSFER OF THIS SECURITY PURSUANT TO CLAUSE 2(B) ABOVE OR UPON ANY
TRANSFER OF THIS SECURITY UNDER RULE 144 UNDER THE SECURITIES ACT (OR
ANY SUCCESSOR PROVISION).
THE HOLDER OF THIS SECURITY IS ENTITLED TO THE BENEFITS OF A
REGISTRATION RIGHTS AGREEMENT DATED JUNE 1, 2004 AND, BY ITS
ACCEPTANCE HEREOF, AGREES TO BE BOUND BY AND TO COMPLY WITH THE
PROVISIONS OF SUCH REGISTRATION RIGHTS AGREEMENT.
Any such Common Stock as to which such restrictions on transfer shall
have expired in accordance with their terms or as to which the conditions for
removal of the foregoing legend set forth therein have been satisfied may, upon
surrender of the certificates representing such shares of Common Stock for
exchange in accordance with the procedures of the transfer agent for the Common
Stock, be exchanged for a new certificate or certificates for a like number of
shares of Common Stock, which shall not bear the restrictive legend required by
this Section 2.05(d).
(e) Any Debenture or Common Stock issued upon the conversion of a
Debenture that, prior to the expiration of the holding period applicable to
sales thereof under Rule 144(k) under the Securities Act (or any successor
provision), is purchased or owned by the Company or any Affiliate thereof may
not be resold by the Company or such Affiliate unless registered under the
Securities Act or resold pursuant to an exemption from the registration
requirements of the Securities Act in a transaction which results in such
Debentures or Common Stock, as the case may be, no longer being "restricted
securities" (as defined under Rule 144).
The Trustee shall have no obligation or duty to monitor, determine or
inquire as to compliance with any restrictions on transfer imposed under this
Indenture or under applicable law with respect to any transfer of any interest
in any Debenture (including any transfers between or
20
among Agent Members or beneficial holders of interests in any Global Debenture)
other than to require delivery of such certificates and other documentation or
evidence as are expressly required by, and to do so if and when expressly
required by, the terms of this Indenture, and to examine the same to determine
substantial compliance as to form with the express requirements hereof.
Section 2.06. Mutilated, Destroyed, Lost or Stolen Debentures. In case
any Debenture shall become mutilated or be destroyed, lost or stolen, the
Company in its discretion may execute, and upon its written request the Trustee
or an authenticating agent appointed by the Trustee shall authenticate and make
available for delivery, a new Debenture, bearing a number not contemporaneously
outstanding, in exchange and substitution for the mutilated Debenture, or in
lieu of and in substitution for the Debenture so destroyed, lost or stolen. In
every case, the applicant for a substituted Debenture shall furnish to the
Company, to the Trustee and, if applicable, to such authenticating agent such
security or indemnity as may be required by them to save each of them harmless
for any loss, liability, cost or expense caused by or connected with such
substitution, and, in every case of destruction, loss or theft, the applicant
shall also furnish to the Company, to the Trustee and, if applicable, to such
authenticating agent evidence to their satisfaction of the destruction, loss or
theft of such Debenture and of the ownership thereof.
Following receipt by the Trustee or such authenticating agent, as the
case may be, of satisfactory security or indemnity and evidence, as described
in the preceding paragraph, the Trustee or such authenticating agent may
authenticate any such substituted Debenture and make available for delivery
such Debenture. Upon the issuance of any substituted Debenture, the Company may
require the payment by the holder of a sum sufficient to cover any tax,
assessment or other governmental charge that may be imposed in relation thereto
and any other expenses connected therewith. In case any Debenture which has
matured or is about to mature or has been called for redemption or has been
tendered for repurchase upon a Fundamental Change (and not withdrawn) or has
been surrendered for repurchase on a Repurchase Date (and not withdrawn) or is
to be converted into Common Stock shall become mutilated or be destroyed, lost
or stolen, the Company may, instead of issuing a substitute Debenture, pay or
authorize the payment of or convert or authorize the conversion of the same
(without surrender thereof except in the case of a mutilated Debenture), as the
case may be, if the applicant for such payment or conversion shall furnish to
the Company, to the Trustee and, if applicable, to such authenticating agent
such security or indemnity as may be required by them to save each of them
harmless from any loss, liability, cost or expense caused by or in connection
with such substitution, and, in every case of destruction, loss or theft, the
applicant shall also furnish to the Company, the Trustee and, if applicable,
any Paying Agent or Conversion Agent evidence to their satisfaction of the
destruction, loss or theft of such Debenture and of the ownership thereof.
Every substitute Debenture issued pursuant to the provisions of this
Section 2.06 by virtue of the fact that any Debenture is destroyed, lost or
stolen shall constitute an additional contractual obligation of the Company,
whether or not the destroyed, lost or stolen Debenture shall be found at any
time, and shall be entitled to all the benefits of (but shall be subject to all
the limitations set forth in) this Indenture equally and proportionately with
any and all other Debentures duly issued hereunder. To the extent permitted by
law, all Debentures shall be held and owned upon the express condition that the
foregoing provisions are exclusive with respect to the replacement or payment
or conversion or redemption or repurchase of mutilated, destroyed, lost
21
or stolen Debentures and shall preclude any and all other rights or remedies
notwithstanding any law or statute existing or hereafter enacted to the contrary
with respect to the replacement or payment or conversion or redemption or
repurchase of negotiable instruments or other securities without their
surrender.
Section 2.07. Temporary Debentures. Pending the preparation of
Debentures in certificated form, the Company may execute and the Trustee or an
authenticating agent appointed by the Trustee shall, upon the written request of
the Company, authenticate and deliver temporary Debentures (printed or
lithographed). Temporary Debentures shall be issuable in any authorized
denomination, and substantially in the form of the Debentures in certificated
form, but with such omissions, insertions and variations as may be appropriate
for temporary Debentures, all as may be determined by the Company. Every such
temporary Debenture shall be executed by the Company and authenticated by the
Trustee or such authenticating agent upon the same conditions and in
substantially the same manner, and with the same effect, as the Debentures in
certificated form. Without unreasonable delay, the Company will execute and
deliver to the Trustee or such authenticating agent Debentures in certificated
form and thereupon any or all temporary Debentures may be surrendered in
exchange therefor, at each office or agency maintained by the Company pursuant
to Section 5.02 and the Trustee or such authenticating agent shall authenticate
and make available for delivery in exchange for such temporary Debentures an
equal aggregate principal amount of Debentures in certificated form. Such
exchange shall be made by the Company at its own expense and without any charge
therefor. Until so exchanged, the temporary Debentures shall in all respects be
entitled to the same benefits and subject to the same limitations under this
Indenture as Debentures in certificated form authenticated and delivered
hereunder.
Section 2.08. Cancellation of Debentures. All Debentures surrendered
for the purpose of payment, redemption, repurchase, conversion, exchange or
registration of transfer shall, if surrendered to the Company or any Paying
Agent or any Debenture Registrar or any Conversion Agent, be surrendered to the
Trustee and promptly canceled by it, or, if surrendered to the Trustee, shall be
promptly canceled by it, and no Debentures shall be issued in lieu thereof
except as expressly permitted by any of the provisions of this Indenture. The
Trustee shall dispose of such canceled Debentures in accordance with its
customary procedures. If the Company shall acquire any of the Debentures, such
acquisition shall not operate as a redemption, repurchase or satisfaction of the
indebtedness represented by such Debentures unless and until the same are
delivered to the Trustee for cancellation.
Section 2.09. CUSIP Numbers. The Company in issuing the Debentures may
use "CUSIP" or "ISIN" numbers and/or similar numbers (if then generally in use),
and, if so, the Trustee shall use "CUSIP" and/or "ISIN" numbers in notices of
redemption as a convenience to Debentureholders; provided that any such notice
may state that no representation is made as to the correctness of such numbers
either as printed on the Debentures or as contained in any notice of a
redemption and that reliance may be placed only on the other identification
numbers printed on the Debentures, and any such redemption shall not be affected
by any defect in or omission of such numbers. The Company will promptly notify
the Trustee of any change in the "CUSIP" and/or similar numbers.
22
Section 2.10. Ranking. The indebtedness of the Company arising under or
in connection with this Indenture and every outstanding Debenture issued under
this Indenture from time to time constitutes and will constitute a senior
unsecured general obligation of the Company, ranking equally with other existing
and future senior unsecured Indebtedness of the Company and ranking senior in
right of payment to any future Indebtedness of the Company that is expressly
made subordinate to the Debentures by the terms of such Indebtedness. For
purposes of this Section 2.10 only, "INDEBTEDNESS" means, without duplication,
the principal or face amount of (i) all obligations for borrowed money, (ii) all
obligations evidenced by debentures, notes or other similar instruments, (iii)
all obligations in respect of letters of credit or bankers acceptances or
similar instruments (or reimbursement obligations with respect thereto), (iv)
all obligations to pay the deferred purchase price of property or services, (v)
all obligations as lessee which are capitalized in accordance with generally
accepted accounting principles, and (vi) all Indebtedness of others guaranteed
by the Company or for which the Company is legally responsible or liable
(whether by agreement to purchase indebtedness of, or to supply funds or to
invest in, others).
ARTICLE 3
REDEMPTION AND REPURCHASE OF DEBENTURES
Section 3.01. Company's Right to Redeem. Prior to May 20, 2011, the
Debentures will not be redeemable at the Company's option. At any time on or
after May 20, 2011 and prior to Stated Maturity, the Company, at its option, may
redeem the Debentures, in whole or in part, in accordance with the provisions of
Section 3.02, Section 3.03 and Section 3.04 on the Redemption Date for a
redemption price (the "REDEMPTION PRICE") in cash equal to 100% of the principal
amount of the Debentures to be redeemed together in each case with accrued and
unpaid Interest on the Debentures redeemed to but excluding the Redemption Date.
Section 3.02. Notice of Optional Redemption; Selection of Debentures.
(a) In case the Company shall desire to exercise the right to redeem all or, as
the case may be, any part of the Debentures pursuant to Section 3.01, it shall
fix a date for redemption (the "REDEMPTION DATE") and it or, at its written
request received by the Trustee not fewer than forty-five (45) days prior (or
such a shorter period of time as may be acceptable to the Trustee) to the
Redemption Date, the Trustee in the name of and at the expense of the Company,
shall mail or cause to be mailed a notice of such redemption (a "REDEMPTION
NOTICE") not fewer than thirty (30) nor more than sixty (60) days prior to the
Redemption Date to each holder of Debentures so to be redeemed as a whole or in
part at its last address as the same appears on the Debenture Register; provided
that if the Company shall give such notice, it shall also give written notice of
the Redemption Date to the Trustee. Such mailing shall be by first class mail.
The notice, if mailed in the manner herein provided, shall be conclusively
presumed to have been duly given, whether or not the holder receives such
notice. In any case, failure to give such notice by mail or any defect in the
notice to the holder of any Debenture designated for redemption as a whole or in
part shall not affect the validity of the proceedings for the redemption of any
other Debenture. Concurrently with the mailing of any such Redemption Notice,
the Company shall issue a press release announcing such redemption, the form and
content of which press release shall be determined by the Company in its sole
discretion. The failure to issue any such press release or any defect therein
shall not affect the validity of the Redemption Notice or any of the proceedings
for the redemption of any Debenture called for redemption.
23
(b) Each such Redemption Notice shall specify the aggregate principal
amount of Debentures to be redeemed, the CUSIP, ISIN or similar number or
numbers of the Debentures being redeemed, the Redemption Date (which shall be a
Business Day), the Redemption Price at which Debentures are to be redeemed, the
place or places of payment, that payment will be made upon presentation and
surrender of such Debentures, that Interest accrued to the Redemption Date will
be paid as specified in said notice, and that on and after said date Interest
thereon or on the portion thereof to be redeemed will cease to accrue. Such
notice shall also state the current Conversion Rate and the date on which the
right to convert such Debentures or portions thereof into Common Stock will
expire. If fewer than all the Debentures are to be redeemed, the Redemption
Notice shall identify the Debentures to be redeemed (including CUSIP, ISIN or
similar numbers, if any). In case any Debenture is to be redeemed in part only,
the Redemption Notice shall state the portion of the principal amount thereof
to be redeemed and shall state that, on and after the Redemption Date, upon
surrender of such Debenture, a new Debenture or Debentures in principal amount
equal to the unredeemed portion thereof will be issued.
(c) On or prior to the Redemption Date specified in the Redemption
Notice given as provided in this Section 3.02, the Company will deposit with
the Trustee or with one or more Paying Agents (or, if the Company is acting as
its own Paying Agent, set aside, segregate and hold in trust as provided in
Section 5.04) an amount of money in immediately available funds sufficient to
redeem on the Redemption Date all the Debentures (or portions thereof) so
called for redemption (other than those theretofore surrendered for conversion
into Common Stock) at the appropriate Redemption Price; provided that if such
payment is made on the Redemption Date it must be received by the Trustee or
Paying Agent, as the case may be, by 10:00 a.m., New York City time, on such
date. The Company shall be entitled to retain any interest, yield or gain on
amounts deposited with the Trustee or any Paying Agent pursuant to this Section
3.02 in excess of amounts required hereunder to pay the Redemption Price and
accrued interest to, but excluding, the Redemption Date. Subject to the last
sentence of Section 8.05, if any Debenture called for redemption is converted
pursuant hereto prior to such Redemption Date, any money deposited with the
Trustee or any Paying Agent or so segregated and held in trust for the
redemption of such Debenture shall be paid to the Company upon its written
request, or, if then held by the Company, shall be discharged from such trust.
Whenever any Debentures are to be redeemed, the Company will give the Trustee
written notice in the form of an Officers' Certificate not fewer than
forty-five (45) days (or such shorter period of time as may be acceptable to
the Trustee) prior to the Redemption Date as to the aggregate principal amount
of Debentures to be redeemed.
(d) If less than all of the outstanding Debentures are to be redeemed,
the Trustee shall select the Debentures or portions thereof of the Global
Debenture or the Debentures in certificated form to be redeemed (in principal
amounts of $1,000 or integral multiples thereof) by lot, on a pro rata basis or
by another method the Trustee deems fair and appropriate. If any Debenture
selected for partial redemption is submitted for conversion in part after such
selection, the portion of such Debenture submitted for conversion shall be
deemed (so far as may be possible) to be from the portion selected for
redemption. The Debentures (or portions thereof) so selected shall be deemed
duly selected for redemption for all purposes hereof, notwithstanding that any
such Debenture is submitted for conversion in part before the mailing of the
Redemption Notice.
24
Upon any redemption of less than all of the outstanding Debentures,
the Company and the Trustee may (but need not), solely for purposes of
determining the pro rata allocation among such Debentures as are unconverted
and outstanding at the time of redemption, treat as outstanding any Debentures
surrendered for conversion during the period of fifteen (15) days next
preceding the mailing of a Redemption Notice and may (but need not) treat as
outstanding any Debenture authenticated and delivered during such period in
exchange for the unconverted portion of any Debenture converted in part during
such period.
Section 3.03. Payment of Debentures Called for Redemption by the
Company. If notice of redemption has been given as provided in Section 3.02, the
Debentures or portion of Debentures with respect to which such notice has been
given shall, unless converted into Common Stock pursuant to the terms hereof,
become due and payable on the Redemption Date and at the place or places stated
in such notice at the applicable Redemption Price, and on and after the
Redemption Date (unless the Company shall default in the payment of such
Debentures at the Redemption Price) Interest on the Debentures or portion of
Debentures so called for redemption shall cease to accrue and, after the close
of business on the second Business Day immediately preceding the Redemption Date
(unless the Company shall default in the payment of such Debentures at the
Redemption Price) such Debentures shall cease to be convertible into Common
Stock and, except as provided in Section 8.05, to be entitled to any benefit or
security under this Indenture, and the holders thereof shall have no right in
respect of such Debentures except the right to receive the Redemption Price
thereof. On presentation and surrender of such Debentures at a place of payment
in said notice specified, the said Debentures or the specified portions thereof
shall be paid and redeemed by the Company at the applicable Redemption Price;
provided that if the applicable Redemption Date is an Interest Payment Date, the
Interest payable on such Interest Payment Date shall be paid on such Interest
Payment Date to the holders of record of such Debentures on the applicable
record date instead of the holders surrendering such Debentures for redemption
on such date.
Upon presentation of any Debenture redeemed in part only, the Company
shall execute and the Trustee shall authenticate and make available for
delivery to the holder thereof, at the expense of the Company, a new Debenture
or Debentures, of authorized denominations, in principal amount equal to the
unredeemed portion of the Debentures so presented.
Notwithstanding the foregoing, the Trustee shall not redeem any
Debentures or mail any Redemption Notice during the continuance of a default in
payment of Interest on the Debentures. If any Debenture called for redemption
shall not be so paid upon surrender thereof for redemption, the principal
shall, until paid or duly provided for, continue to bear interest at the rate
borne by the Debenture, compounded semiannually, and such Debenture shall
remain convertible into Common Stock until the principal and Interest shall
have been paid or duly provided for. The Company will notify all of the holders
if the Company redeems any of the Debentures.
Section 3.04. [Reserved].
Section 3.05. Repurchase of Debentures by the Company at Option of
Holders upon a Fundamental Change. (a) If a Fundamental Change shall occur at
any time prior to Stated Maturity, each holder shall have the right, at such
holder's option, to require the Company to repurchase for cash any or all of
such holder's Debentures, or any portion of the principal amount
25
thereof that is equal to $1,000 or an integral multiple of $1,000, on the date
specified in the Fundamental Change Repurchase Notice, which date shall be no
more than thirty (30) days after the date of the Fundamental Change Repurchase
Notice (subject to extension to comply with applicable law) (the "FUNDAMENTAL
CHANGE REPURCHASE DATE"). The Company shall repurchase such Debentures at a
price (the "FUNDAMENTAL CHANGE REPURCHASE PRICE") equal to 100% of the principal
amount thereof plus any accrued and unpaid Interest to but excluding the
Fundamental Change Repurchase Date.
(b) On or before the thirtieth (30th) day after the occurrence of a
Fundamental Change, the Company, or at its written request the Trustee in the
name of and at the expense of the Company (which request must be received by
the Trustee at least five (5) Business Days prior to the date the Trustee is
requested to give notice as described below, unless the Trustee shall agree to
a shorter period), shall mail or cause to be mailed, by first class mail, to
all holders of record on such date a notice (the "FUNDAMENTAL CHANGE REPURCHASE
NOTICE") of the occurrence of such Fundamental Change and of the repurchase
right at the option of the holders arising as a result thereof to each holder
of Debentures at its last address as the same appears on the Debenture
Register; provided that if the Company shall give such notice, it shall also
give written notice of the Fundamental Change to the Trustee and Paying Agent,
if other than the Trustee, at such time as it is mailed to Debentureholders.
Such notice, if mailed in the manner herein provided, shall be conclusively
presumed to have been duly given, whether or not the holder receives such
notice. Each Fundamental Change Repurchase Notice shall state, among other
things:
(i) the events causing the Fundamental Change;
(ii) the date of the Fundamental Change;
(iii) the last date on which a holder may exercise the
repurchase right;
(iv) the Fundamental Change Repurchase Price, excluding accrued
and unpaid Interest, the applicable Conversion Rate at the time of such
notice (and any applicable adjustments to the Conversion Rate) and, to
the extent known at the time of such notice, the amount of Interest
that will be payable with respect to the Debentures on the Fundamental
Change Repurchase Date;
(v) the Fundamental Change Repurchase Date;
(vi) the name and address of the Paying Agent and the Conversion
Agent;
(vii) that Debentures as to which a Fundamental Change
Repurchase Election has been given by the holder may be converted only
if the election has been withdrawn by the holder in accordance with the
terms of this Indenture; provided that the Debentures are otherwise
convertible in accordance with Section 15.01;
(viii) that the holder shall have the right to withdraw any
Debentures surrendered prior to the close of business on the Business
Day immediately preceding the Fundamental
26
Change Repurchase Date (or any such later time as may be required by
applicable law);
(ix) a description of the procedures which a Debentureholder
must follow to exercise such repurchase right or to withdraw any
surrendered Debentures;
(x) the CUSIP, ISIN or similar number or numbers of the
Debentures (if then generally in use); and
(xi) briefly, the conversion rights of the Debentures and
whether, at the time of such notice, the Debentures are eligible for
conversion.
No failure of the Company to give the foregoing notices and no defect
therein shall limit the Debentureholders' repurchase rights or affect the
validity of the proceedings for the repurchase of the Debentures pursuant to
this Section 3.05.
(c) Debentures shall be repurchased pursuant to this Section 3.05 at
the option of the holder upon:
(i) delivery to the Trustee (or other Paying Agent appointed
by the Company) by a holder of a duly completed notice (a "FUNDAMENTAL
CHANGE REPURCHASE ELECTION") in the form set forth on the reverse of
the Debenture at any time prior to the close of business on the
Business Day immediately preceding the Fundamental Change Repurchase
Date (subject to extension to comply with applicable law) stating:
(A) if certificated, the certificate numbers of the
Debentures that the holder shall deliver to be repurchased;
(B) the portion of the principal amount of the
Debentures that the holder shall deliver to be repurchased, which
portion must be $1,000 or an integral multiple thereof; and
(C) that such Debentures shall be repurchased as of
the Fundamental Change Repurchase Date pursuant to the terms and
conditions specified in the Debentures and in the Indenture; and
(ii) delivery or book-entry transfer of the Debentures to the
Trustee (or other Paying Agent appointed by the Company) simultaneously
with or at any time after delivery of the Fundamental Change Repurchase
Election (together with all necessary endorsements) at the Corporate
Trust Office of the Trustee (or other Paying Agent appointed by the
Company) in the Borough of Manhattan, such delivery or transfer being a
condition to receipt by the holder of the Fundamental Change Repurchase
Price therefor; provided that such Fundamental Change Repurchase Price
shall be so paid pursuant to this Section 3.05 only if the Debentures
so delivered or transferred to the Trustee (or other Paying Agent
appointed by the Company) shall conform in all respects to the
description thereof in the related Fundamental Change Repurchase
Election. All questions as to the validity, eligibility (including time
of receipt) and acceptance of any Debenture
27
for repurchase shall be determined by the Company, whose determination
shall be final and binding absent manifest error.
If the Debentures are not in certificated form, holders must provide
notice of their election in accordance with the appropriate procedures of the
Depositary.
(d) Without limiting the foregoing,
(i) if a Fundamental Change occurs and all of the
consideration consists of cash (a "CASH-BUY-OUT"), then,
notwithstanding whether the holder of any Debentures make a Fundamental
Change Repurchase Election, the Company will pay, to each holder of
record on the date of the Fundamental Change, a make-whole-premium (a
"MAKE-WHOLE-PREMIUM").
(ii) The Make-Whole Premium per Debenture will equal the
excess, if any, of (a) the average of the Closing Trading Prices of a
Debenture for the five (5) trading days immediately prior to the public
announcement of the Cash Buy-Out, less (b) the greater of: (i) $1,000
and (ii) the product of (x) the average of the closing prices of the
Common Stock for the five (5) trading days immediately prior to the
public announcement of the Cash Buy-Out and (y) the applicable
Conversion Rate.
(iii) The Make-Whole Premium so calculated shall be payable in
cash or shares of Common Stock or a combination thereof at the
Company's option.
(iv) Notice of any Make-Whole Premium shall be included in
the Fundamental Change Repurchase Notice described in clause (b) above
and such notice shall include the Make-Whole Premium amount and
procedure for delivery by the Company of such Make-Whole Premium.
Section 3.06. Repurchase of Debentures by the Company at Option of
Holders on Specified Dates. (a) On each of May 15, 2011, May 15, 2014 and May
15, 2024 (each, a "COMPANY REPURCHASE DATE"), each holder shall have the right,
at such holder's option, to require the Company to repurchase for cash all of
such holder's Debentures, or any portion of the principal amount thereof that is
an integral multiple of $1,000. The Company shall repurchase such Debentures at
a price (the "COMPANY REPURCHASE PRICE") equal to 100% of the principal amount
thereof plus any accrued and unpaid Interest to but excluding the Company
Repurchase Date.
(b) On or before the twentieth (20th) day prior to each Company
Repurchase Date, the Company, or at its written request the Trustee in the name
of and at the expense of the Company (which request must be received by the
Trustee at least five (5) Business Days prior to the date the Trustee is
requested to give notice as described below, unless the Trustee shall agree to a
shorter period), shall mail or cause to be mailed, by first class mail, on such
date a notice (the "COMPANY REPURCHASE NOTICE") to each holder of record of
Debentures at its last address as the same appears on the Debenture Register,
and to beneficial owners as required by applicable law; provided that if the
Company shall give such notice, it shall also give written notice to the Trustee
and Paying Agent, if other than the Trustee, at such time as it is mailed to
Debentureholders.
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Such notice, if mailed in the manner herein provided, shall be conclusively
presumed to have been duly given, whether or not the holder receives such
notice. Each Company Repurchase Notice shall state, among other things:
(i) the Company Repurchase Price, excluding accrued and unpaid
Interest, the applicable Conversion Rate at the time of such notice
(and any applicable adjustments to the Conversion Rate) and, to the
extent known at the time of such notice, the amount of Interest that
will be payable with respect to the Debentures on the Company
Repurchase Date;
(ii) the Company Repurchase Date;
(iii) the last date on which a holder may exercise the
repurchase right;
(iv) the name and address of the Paying Agent and the Conversion
Agent;
(v) that Debentures as to which a Company Repurchase Election
has been given by the holder may be converted only if the election has
been withdrawn by the holder in accordance with the terms of this
Indenture; provided that the Debentures are otherwise convertible in
accordance with Section 15.01;
(vi) that the holder shall have the right to withdraw any
Debentures surrendered prior to the close of business on the Business
Day immediately preceding the Company Repurchase Date (or any such
later time as may be required by applicable law);
(vii) a description of the procedures which a Debenture holder
must follow to exercise such repurchase right or to withdraw any
surrendered Debentures;
(viii) the CUSIP, ISIN or similar number or numbers of the
Debentures (if then generally in use);
(ix) if certificated, the certificate numbers of the Debentures
to be repurchased by the Company;
(x) the portion f the principal amount of Debentures to be
repurchased by the Company, which portion must be $1,000 or an integral
multiple thereof;
(xi) briefly, the conversion rights of the Debentures and
whether, at the time of such notice, the Debentures are eligible for
conversion; and
(xii) that the Debentures are to be repurchased by the Company
pursuant to the applicable provisions of the Debentures and this
Indenture.
No failure of the Company to give the foregoing notices and no defect
therein shall limit the Debenture holders' repurchase rights or affect the
validity of the proceedings for the repurchase of the Debentures pursuant to
this Section 3.06.
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(c) Debentures shall be repurchased pursuant to this Section 3.06 at
the option of the holder upon:
(i) delivery to the Trustee (or other Paying Agent appointed
by the Company) by a holder of a duly completed notice (a "COMPANY
REPURCHASE ELECTION") in the form set forth on the reverse of the
Debenture at any time from the opening of business on the 20th Business
Day preceding the Company Repurchase Date until the close of business
on the Business Day immediately preceding the Company Repurchase Date
stating:
(A) if certificated, the certificate numbers of the
Debentures that the holder shall deliver to be repurchased;
(B) the portion of the principal amount of the
Debentures that the holder shall deliver to be repurchased,
which portion must be $1,000 or an integral multiple thereof;
and
(C) that such Debentures shall be repurchased as of
the Company Repurchase Date pursuant to the terms and conditions
specified in the Debentures and in the Indenture; and
(ii) delivery or book-entry transfer of the Debentures to the
Trustee (or other Paying Agent appointed by the Company) simultaneously
with or at any time after delivery of the Company Repurchase Election
(together with all necessary endorsements) at the Corporate Trust
Office of the Trustee (or other Paying Agent appointed by the Company)
in the Borough of Manhattan, such delivery or transfer being a
condition to receipt by the holder of the Company Repurchase Price
therefor; provided that such Company Repurchase Price shall be so paid
pursuant to this Section 3.06 only if the Debentures so delivered or
transferred to the Trustee (or other Paying Agent appointed by the
Company) shall conform in all respects to the description thereof in
the related Company Repurchase Election. All questions as to the
validity, eligibility (including time of receipt) and acceptance of any
Debenture for repurchase shall be determined by the Company, whose
determination shall be final and binding absent manifest error.
If the Debentures are not in certificated form, holders must provide
notice of their election in accordance with the appropriate procedures of the
Depositary.
Section 3.07. [Reserved].
Section 3.08. Conditions and Procedures for Repurchase at Option of
Holders. (a) The Company shall repurchase from the holder thereof, pursuant to
Section 3.05 or Section 3.06, a portion of a Debenture, if the principal amount
of such portion is $1,000 or a whole multiple of $1,000. Provisions of this
Indenture that apply to the repurchase of all of a Debenture also apply to the
repurchase of such portion of such Debenture. Upon presentation of any Debenture
repurchased in part only, the Company shall execute and the Trustee shall
authenticate and make available for delivery to the holder thereof, at the
expense of the Company, a new Debenture or Debentures, of any authorized
denomination, in aggregate principal amount equal to the portion of the
Debentures presented not repurchased.
30
(b) On or prior to a Repurchase Date, the Company will deposit with
the Trustee or with one or more Paying Agents (or, if the Company is acting as
its own Paying Agent, set aside, segregate and hold in trust as provided in
Section 5.04) an amount of money sufficient to repurchase on the Repurchase Date
all the Debentures or portions thereof to be repurchased on such date at the
Repurchase Price; provided that if such deposit is made on the Repurchase Date
it must be received by the Trustee or Paying Agent, as the case may be, by 10:00
a.m., New York City time, on such date.
If the Trustee or other Paying Agent appointed by the Company, or the
Company or an Affiliate of the Company, if it or such Affiliate is acting as
the Paying Agent, holds money sufficient to pay the aggregate Repurchase Price
of all the Debentures or portions thereof that are to be repurchased on the
Repurchase Date, then, on the Business Day following such date, (i) such
Debentures will cease to be outstanding, (ii) Interest on such Debentures will
cease to accrue (whether or not book-entry transfer of the Debentures has been
made or the Debentures have been delivered to the Trustee or Paying Agent) and
(iii) all other rights of the holders of such Debentures will terminate (other
than the right to receive the Repurchase Price upon transfer or delivery of the
Debentures).
(c) Upon receipt by the Trustee (or other Paying Agent appointed by
the Company) of a Repurchase Election, the holder of the Debenture in respect of
which such Repurchase Election was given shall (unless such notice is validly
withdrawn) thereafter be entitled to receive solely the Repurchase Price with
respect to such Debenture. Such Repurchase Price shall be paid to such holder,
subject to receipt of funds and/or Debentures by the Trustee (or other Paying
Agent appointed by the Company), promptly (but in no event more than five (5)
Business Days) following the later of (x) the Repurchase Date with respect to
such Debenture (provided the holder has satisfied the conditions in Section
3.05(c) or Section 3.06(c), as applicable) and (y) the time of book-entry
transfer or delivery of such Debenture to the Trustee (or other Paying Agent
appointed by the Company) by the holder thereof in the manner required by
Section 3.05(c) or Section 3.06(c), as applicable. Debentures in respect of
which a Repurchase Election has been given by the holder thereof may not be
converted pursuant to Article 15 hereof on or after the date of the delivery of
such Repurchase Election unless such notice has first been validly withdrawn.
(d) Notwithstanding anything herein to the contrary, any holder
delivering to the office of the Trustee (or other Paying Agent appointed by the
Company) a Repurchase Election shall have the right to withdraw such election,
in whole or in part, at any time prior to the close of business on the Business
Day preceding the Repurchase Date (or any such later time as may be required by
applicable law) by delivery of a written notice of withdrawal to the Trustee (or
other Paying Agent appointed by the Company) specifying:
(i) the principal amount of the Debenture with respect to
which such notice of withdrawal is being submitted,
(ii) the certificate number, if any, of the Debenture in
respect of which such notice of withdrawal is being submitted, or the
appropriate Depositary information if the Debenture in respect of which
such notice of withdrawal is being submitted is represented by a Global
Debenture, and
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(iii) the principal amount, if any, of such Debenture which
remains subject to the original Repurchase Election and which has been
or will be delivered for repurchase by the Company.
If the Debentures are not in certificated form, holders must provide
notice of their withdrawal in accordance with the appropriate procedures of the
Depositary.
The Trustee (or other Paying Agent appointed by the Company) shall
promptly notify the Company of the receipt by it of any Repurchase Election or
written notice of withdrawal thereof.
(e) The Company will comply with the provisions of Rule 13e-4 and
any other tender offer rules under the Exchange Act to the extent then
applicable in connection with the repurchase rights of the holders of Debentures
in the event of a Fundamental Change or on any Company Repurchase Date. If then
required by applicable rules, the Company will file a Schedule TO or any other
schedule required in connection with any offer by the Company to repurchase
Debentures.
(f) There shall be no repurchase of any Debentures pursuant to
Section 3.05 or Section 3.06 if there has occurred at any time prior to, and is
continuing on, the Repurchase Date an Event of Default (other than an Event of
Default that is cured by the payment of the Repurchase Price with respect to
such Debentures). The Paying Agent will promptly return to the respective
holders thereof any Debentures (x) with respect to which a Repurchase Election
has been withdrawn in compliance with this Indenture, or (y) held by it during
the continuance of an Event of Default (other than a default in the payment of
the Repurchase Price with respect to such Debentures) in which case, upon such
return, the Repurchase Election with respect thereto shall be deemed to have
been withdrawn.
(g) The Trustee (or other Paying Agent appointed by the Company)
shall return to the Company any cash that remains unclaimed as provided in
Section 13.03, together with interest, if any, thereon, held by them for the
payment of the Repurchase Price; provided that to the extent that the aggregate
amount of cash deposited by the Company pursuant to Section 3.08(b) exceeds the
aggregate Repurchase Price of the Debentures or portions thereof which the
Company is obligated to purchase as of the Repurchase Date then, unless
otherwise agreed in writing with the Company, promptly after the Business Day
following the Repurchase Date, the Trustee shall return any such excess to the
Company together with interest, if any, thereon.
(h) In the case of a reclassification, change, consolidation,
merger, binding share exchange, combination, sale or conveyance to which Section
15.06 applies, in which the Common Stock of the Company is changed or exchanged
as a result into the right to receive cash, securities or other property, which
includes shares of Common Stock of the Company or shares of common stock of
another Person that are, or upon issuance will be, traded on a United States
national securities exchange or approved for trading on an established automated
over-the-counter trading market in the United States and such shares constitute
at the time such change or exchange becomes effective in excess of 50% of the
aggregate fair market value of such cash, securities or other property (as
determined by the Company, which determination shall be conclusive and binding),
then the Person formed by such consolidation or resulting from such merger or
which acquires such assets, as the case may be, shall execute and deliver to the
Trustee a supplemental indenture (accompanied by an Opinion of Counsel that such
supplemental
32
indenture complies with the Trust Indenture Act as in force at the date of
execution of such supplemental indenture) modifying the provisions of this
Indenture relating to the right of holders of the Debentures to cause the
Company to repurchase the Debentures following a Fundamental Change, including
without limitation the applicable provisions of this Article 3 and the
definition of Fundamental Change, as appropriate, as determined in good faith by
the Company (which determination shall be conclusive and binding), to make such
provisions apply to such other Person if different from the Company (in lieu of
the Company).
ARTICLE 4
CONTINGENT INTEREST
Section 4.01. Contingent Interest. Additional interest ("CONTINGENT
INTEREST") will accrue on each Debenture during the Interest Period commencing
on May 20, 2011 and ending November 14, 2011, if the average Trading Price of
the Debentures during the Applicable Five-Day Trading Period immediately
preceding such Interest Period equals or exceeds 125% of the principal amount of
the Debentures. Thereafter, Contingent Interest will accrue on each Debenture
during an Interest Period if the average Trading Price of the Debentures during
the Applicable Five Day Trading Period immediately preceding Interest Period
equals or exceeds 125% of the principal amount of the Debentures. If Contingent
Interest accrues during an Interest Period pursuant to the preceding sentence,
the amount of Contingent Interest payable with respect to such Interest Period
per $1,000 principal amount of Debentures shall equal 0.25% of the average
Trading Price during the Applicable Five-Day Trading Period with respect to such
Interest Period.
The Trustee's sole responsibility pursuant to this Section 4.01 shall
be to obtain the bids for determining the Trading Price of the Debentures for
each Trading Day during the Applicable Five-Day Trading Period and to provide
such information to the Company, to the extent that the Trustee is then the Bid
Solicitation Agent. The Company shall determine the Trading Price and whether
holders are entitled to receive Contingent Interest, and if so, provide notice
pursuant to Section 4.03. Notwithstanding any term contained in this Indenture
or any other document to the contrary, the Trustee shall have no
responsibilities, duties or obligations for or with respect to (i) determining
whether the Company must pay Contingent Interest or (ii) determining the amount
of Contingent Interest, if any, payable by the Company.
Section 4.02. Payment of Contingent Interest. Contingent Interest for
any Interest Period shall be paid on the immediately succeeding Interest Payment
Date to the Person in whose name any Debenture (or its Predecessor Debenture) is
registered on the Debenture Register at the close of business on the
corresponding Regular Record Date. Contingent Interest due under this Article 4
shall be treated for all purposes of this Indenture like any other interest
accruing on the Debentures.
Section 4.03. Contingent Interest Notification.(a) (a) As soon as
practicable following the first Business Day of an Interest Period for which
Contingent Interest will be payable pursuant to Section 4.01, the Company shall
issue a press release stating that Contingent Interest will be paid on the
Debentures and identifying the Interest Period and publish the information on
its Web site on the World Wide Web.
33
(b) On any Interest Payment Date on which Contingent Interest is
payable pursuant to this Article 4, the Company shall deliver notice to the
Trustee, issue a press release stating the amount of such Contingent Interest
and setting the forth the manner in which such amount was calculated and publish
such information on its Web site on the World Wide Web.
ARTICLE 5
PARTICULAR COVENANTS OF THE COMPANY
Section 5.01. Payment of Principal and Interest. The Company covenants
and agrees that it will duly and punctually pay or cause to be paid the
principal of (including any Redemption Price or Repurchase Price pursuant to
Article 3) and Interest on each of the Debentures at the places, at the
respective times and in the manner provided herein and in the Debentures.
Section 5.02. Maintenance of Office or Agency. The Company will
maintain an office or agency in the Borough of Manhattan, The City of New York,
where the Debentures may be surrendered for registration of transfer or exchange
or for presentation for payment or for conversion, redemption or repurchase and
where notices and demands to or upon the Company in respect of the Debentures
and this Indenture may be served. The Company will give prompt written notice to
the Trustee of the location, and any change in the location, of such office or
agency not designated or appointed by the Trustee. If at any time the Company
shall fail to maintain any such required office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the Corporate Trust Office.
The Company may also from time to time designate co-registrars and one
or more offices or agencies where the Debentures may be presented or
surrendered for any or all such purposes and may from time to time rescind such
designations. The Company will give prompt written notice of any such
designation or rescission and of any change in the location of any such other
office or agency.
The Company hereby initially designates the Trustee as Paying Agent,
Debenture Registrar, Custodian, Bid Solicitation Agent and Conversion Agent,
and each of the Corporate Trust Office and the office of agency of the Trustee
in the Borough of Manhattan shall be considered as one such office or agency of
the Company for each of the aforesaid purposes.
So long as the Trustee is the Debenture Registrar, the Trustee agrees
to mail, or cause to be mailed, the notices set forth in Section 8.10(a) and
the third paragraph of Section 8.11. If co-registrars have been appointed in
accordance with this Section, the Trustee shall mail such notices only to the
Company and the holders of Debentures it can identify from its records.
Section 5.03. Appointments to Fill Vacancies in Trustee's Office. The
Company, whenever necessary to avoid or fill a vacancy in the office of Trustee,
will appoint, in the manner provided in Section 8.10, a Trustee, so that there
shall at all times be a Trustee hereunder.
Section 5.04. Provisions as to Paying Agent. (a) If the Company shall
appoint a Paying Agent other than the Trustee, or if the Trustee shall appoint
such a Paying Agent, the Company
34
will cause such Paying Agent to execute and deliver to the Trustee an instrument
in which such Paying Agent shall agree with the Trustee, subject to the
provisions of this Section 5.04:
(1) that it will hold all sums held by it as such agent for
the payment of the principal of or Interest on the Debentures (whether
such sums have been paid to it by the Company or by any other obligor
on the Debentures) in trust for the benefit of the holders of the
Debentures;
(2) that it will give the Trustee notice of any failure by
the Company (or by any other obligor on the Debentures) to make any
payment of the principal of or Interest on the Debentures when the same
shall be due and payable; and
(3) that at any time during the continuance of an Event of
Default, upon request of the Trustee, it will forthwith pay to the
Trustee all sums so held in trust.
The Company shall, on or before each due date of the principal of or
Interest on the Debentures, deposit with the Paying Agent a sum (in funds which
are immediately available on the due date for such payment) sufficient to pay
such principal or Interest, and (unless such Paying Agent is the Trustee) the
Company will promptly notify the Trustee of any failure to take such action;
provided that if such deposit is made on the due date, such deposit shall be
received by the Paying Agent by 10:00 a.m., New York City time, on such date.
(b) If the Company shall act as its own Paying Agent, it will, on or
before each due date of the principal of or Interest on the Debentures, set
aside, segregate and hold in trust for the benefit of the holders of the
Debentures a sum sufficient to pay such principal or Interest so becoming due
and will promptly notify the Trustee of any failure to take such action and of
any failure by the Company (or any other obligor under the Debentures) to make
any payment of the principal of or Interest on the Debentures when the same
shall become due and payable.
(c) Anything in this Section 5.04 to the contrary notwithstanding,
the Company may, at any time, for the purpose of obtaining a satisfaction and
discharge of this Indenture, or for any other reason, pay or cause to be paid to
the Trustee all sums held in trust by the Company or any Paying Agent hereunder
as required by this Section 5.04, such sums to be held by the Trustee upon the
trusts herein contained and upon such payment by the Company or any Paying Agent
to the Trustee, the Company or such Paying Agent shall be released from all
further liability with respect to such sums.
(d) Anything in this Section 5.04 to the contrary notwithstanding,
the agreement to hold sums in trust as provided in this Section 5.04 is subject
to Sections 13.02 and 13.03.
The Trustee shall not be responsible for the actions of any other
Paying Agents (including the Company if acting as its own Paying Agent) and
shall have no control of any funds held by such other Paying Agents.
Section 5.05. Existence. Subject to Article 12, the Company will do or
cause to be done all things necessary to preserve and keep in full force and
effect its existence and rights (charter and statutory); provided that the
Company shall not be required to preserve any such
35
right if the Company shall determine that the preservation thereof is no longer
desirable in the conduct of the business of the Company and that the loss
thereof is not disadvantageous in any material respect to the Debentureholders.
Section 5.06. Rule 144A Information Requirement. Within the period
prior to the expiration of the holding period applicable to sales thereof under
Rule 144(k) under the Securities Act (or any successor provision), the Company
covenants and agrees that it shall, during any period in which it is not subject
to Section 13 or 15(d) under the Exchange Act, make available to any holder or
beneficial holder of Debentures or any Common Stock issued upon conversion
thereof which continues to be Restricted Securities in connection with any sale
thereof and any prospective purchaser of Debentures or such Common Stock
designated by such holder or beneficial holder, the information required
pursuant to Rule 144A(d)(4) under the Securities Act upon the request of any
holder or beneficial holder of the Debentures or such Common Stock and it will
take such further action as any holder or beneficial holder of such Debentures
or such Common Stock may reasonably request, all to the extent required from
time to time to enable such holder or beneficial holder to sell its Debentures
or Common Stock without registration under the Securities Act within the
limitation of the exemption provided by Rule 144A, as such Rule may be amended
from time to time. Upon the request of any holder or any beneficial holder of
the Debentures or such Common Stock, the Company will deliver to such holder a
written statement as to whether it has complied with such requirements.
Section 5.07. Stay, Extension and Usury Laws. The Company covenants
(to the extent that it may lawfully do so) that it shall not at any time insist
upon, plead, or in any manner whatsoever claim or take the benefit or advantage
of, any stay, extension or usury law or other law which would prohibit or
forgive the Company from paying all or any portion of the principal of or
Interest on the Debentures as contemplated herein, wherever enacted, now or at
any time hereafter in force, or which may affect the covenants or the
performance of this Indenture and the Company (to the extent it may lawfully do
so) hereby expressly waives all benefit or advantage of any such law, and
covenants that it will not, by resort to any such law, hinder, delay or impede
the execution of any power herein granted to the Trustee, but will suffer and
permit the execution of every such power as though no such law had been enacted.
Section 5.08. Compliance Certificate. The Company shall deliver to the
Trustee, within one hundred twenty (120) days after the end of each fiscal year
of the Company (which fiscal year of the Company is presently the 52 or 53-week
period ending on the Saturday closest to December 31), a certificate signed by
either the principal executive officer, principal financial officer or principal
accounting officer of the Company, stating whether or not to the best knowledge
of the signer thereof the Company is in default in the performance and
observance of any of the terms, provisions and conditions of this Indenture
(without regard to any period of grace or requirement of notice provided
hereunder) and, if the Company shall be in default, specifying all such defaults
and the nature and the status thereof of which the signer may have knowledge.
The Company will deliver to the Trustee, promptly upon becoming aware
of (i) any default in the performance or observance of any covenant, agreement
or condition contained in this Indenture, or (ii) any Event of Default, an
Officers' Certificate specifying with particularity such default or Event of
Default and further stating what action the Company has taken, is taking or
proposes to take with respect thereto.
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Any notice required to be given under this Section 5.08 shall be
delivered to a Responsible Officer of the Trustee at its Corporate Trust
Office.
Section 5.09. Additional Amounts Notice. In the event that the Company
is required to pay Additional Amounts to holders of Debentures pursuant to the
Registration Rights Agreement, the Company will provide written notice
("ADDITIONAL AMOUNTS NOTICE") to the Trustee of its obligation to pay Additional
Amounts no later than fifteen (15) days prior to the proposed payment date for
the Additional Amounts, and the Additional Amounts Notice shall set forth the
amount of Additional Amounts to be paid by the Company on such payment date. The
Trustee shall not at any time be under any duty or responsibility to any holder
of Debentures to determine the Additional Amounts, or with respect to the
nature, extent or calculation of the amount of Additional Amounts when made, or
with respect to the method employed in such calculation of the Additional
Amounts.
Section 5.10. Contingent Debt Tax Treatment. The Company agrees and,
by acceptance of a Debenture, each beneficial holder of a Debenture will be
deemed to have agreed to treat the Debentures as indebtedness of the Company for
U.S. federal income tax purposes that is subject to the regulations governing
contingent payment debt instruments and to be bound (in the absence of an
administrative determination or judicial ruling to the contrary) by the
Company's determination of the comparable yield and projected payment schedule
within the meaning of the regulations governing contingent payment debt
instruments. A holder of Debentures may obtain the amount of original issue
discount, issue date, yield to maturity, comparable yield and projected payment
schedule for the Debentures, determined by the Company pursuant to Treas. Reg.
Sec. 1.1275-4, by submitting a written request for it to the Company at the
following address: Wild Oats Markets, Inc., 0000 Xxxxxxxx Xxxx, Xxxxxxx Xxxxxxxx
00000, Attention: General Counsel.
Section 5.11. Calculation of Original Issue Discount. The Company shall
file with the Trustee promptly at the end of each calendar year (i) a written
notice specifying the amount of Tax Original Issue Discount (including daily
rates and accrual periods) accrued on outstanding Debentures as of the end of
such year and (ii) such other specific information relating to such Tax Original
Issue Discount as may then be required under the Internal Revenue Code of 1986,
as amended from time to time, or the Treasury regulations promulgated
thereunder.
ARTICLE 6
DEBENTUREHOLDERS' LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE
Section 6.01. Debentureholders' Lists. The Company covenants and
agrees that it will furnish or cause to be furnished to the Trustee,
semiannually, not more than fifteen (15) days after each May 1 and November 1 in
each year, beginning with November 1, 2004, and at such other times as the
Trustee may request in writing, within thirty (30) days after receipt by the
Company of any such request (or such lesser time as the Trustee may reasonably
request in order to enable it to timely provide any notice to be provided by it
hereunder), a list in such form as the Trustee may reasonably require of the
names and addresses of the holders of Debentures as of a date not more than
fifteen (15) days (or such other date as the Trustee may reasonably request in
order to so provide any such notices) prior to the time such information is
furnished, except that
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no such list need be furnished by the Company to the Trustee so long as the
Trustee is acting as the sole Debenture Registrar.
Section 6.02. Preservation and Disclosure of Lists. (a) The Trustee
shall preserve, in as current a form as is reasonably practicable, all
information as to the names and addresses of the holders of Debentures contained
in the most recent list furnished to it as provided in Section 6.01 or
maintained by the Trustee in its capacity as Debenture Registrar or co-registrar
in respect of the Debentures, if so acting. The Trustee may destroy any list
furnished to it as provided in Section 6.01 upon receipt of a new list so
furnished.
(b) The rights of Debentureholders to communicate with other holders
of Debentures with respect to their rights under this Indenture or under the
Debentures, and the corresponding rights and duties of the Trustee, shall be as
provided by the Trust Indenture Act.
(c) Every Debentureholder, by receiving and holding the same, agrees
with the Company and the Trustee that neither the Company nor the Trustee nor
any agent of either of them shall be held accountable by reason of any
disclosure of information as to names and addresses of holders of Debentures
made pursuant to the Trust Indenture Act.
Section 6.03. Reports by Trustee. (a) Within sixty (60) days after May
15 of each year, commencing with the year 2005, the Trustee shall transmit to
holders of Debentures such reports dated as of May 15 of the year in which such
reports are made concerning the Trustee and its actions under this Indenture as
may be required pursuant to the Trust Indenture Act at the times and in the
manner provided pursuant thereto. In the event that no events have occurred
under the applicable sections of the Trust Indenture Act, the Trustee shall be
under no duty or obligation to provide such reports.
(b) A copy of such report shall, at the time of such transmission to
holders of Debentures, be filed by the Trustee with each stock exchange and
automated quotation system upon which the Debentures are listed and with the
Company. The Company will promptly notify the Trustee in writing when the
Debentures are listed on any stock exchange or automated quotation system or
delisted therefrom.
Section 6.04. Reports by Company. The Company shall file with the
Trustee (and the Commission if at any time after the Indenture becomes qualified
under the Trust Indenture Act), and transmit to holders of Debentures, such
information, documents and other reports and such summaries thereof as may be
required pursuant to the Trust Indenture Act at the times and in the manner
provided pursuant to such Act, whether or not the Debentures are governed by
such Act; provided that any such information, documents or reports required to
be filed with the Commission pursuant to Section 13 or 15(d) of the Exchange Act
shall be filed with the Trustee within fifteen (15) days after the same are so
required to be filed with the Commission. Delivery of such reports, information
and documents to the Trustee is for informational purposes only and the
Trustee's receipt of such shall not constitute constructive notice of any
information contained therein or determinable from information contained
therein, including the Company's compliance with any of its covenants hereunder
(as to which the Trustee is entitled to rely exclusively on Officers'
Certificates).
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ARTICLE 7
REMEDIES OF THE TRUSTEE AND DEBENTUREHOLDERS ON AN EVENT OF DEFAULT
Section 7.01. Events of Default. In case one or more of the following
events (each, an "EVENT OF DEFAULT") (whatever the reason for such Event of
Default and whether it shall be voluntary or involuntary or be effected by
operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body) shall
have occurred and be continuing:
(a) default in the payment of the principal of any of the
Debentures as and when the same shall become due and payable either at
Stated Maturity or in connection with any redemption or repurchase, in
each case pursuant to Article 3, or otherwise; or
(b) default in the payment of any installment of Interest
upon any of the Debentures as and when the same shall become due and
payable, and continuance of such default for a period of thirty (30)
days; or
(c) failure to provide notice of the occurrence of a
Fundamental Change on a timely basis as required by Section 3.05; or
(d) default in the Company's obligation to convert the
Debentures into Common Stock, cash or a combination of cash and Common
Stock upon the exercise of a holder's rights pursuant to Article 15 and
continuation of such default for a period of ten (10) days; or
(e) default in the Company's obligation to repurchase the
Debentures at the option of a holder upon a Fundamental Change pursuant
to Section 3.05 or on specified dates pursuant to Section 3.06; or
(f) default in the Company's obligation to redeem the
Debentures after it has exercised its option to redeem; or
(g) failure on the part of the Company duly to observe or
perform any other of the covenants or agreements on the part of the
Company in the Debentures or in this Indenture (other than a covenant
or agreement a default in whose performance or whose breach is
elsewhere in this Section 7.01 specifically dealt with) continued for a
period of sixty (60) days after the date on which written notice of
such failure, requiring the Company to remedy the same, shall have been
given to the Company by the Trustee, or to the Company and a
Responsible Officer of the Trustee by the holders of at least
twenty-five percent (25%) in aggregate principal amount of the
Debentures at the time outstanding determined in accordance with
Section 9.04; or
(h) default with respect to the Company's or any of its
Subsidiaries' indebtedness having a principal amount then outstanding,
individually or in the aggregate, of at least $15.0 million, whether
such indebtedness now exists or is hereafter incurred, which default or
defaults:
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(i) shall have resulted in such indebtedness
becoming or being declared due and payable prior to the date
on which it would otherwise have become due and payable; or
(ii) shall constitute the failure to pay such
indebtedness at the final stated maturity thereof (after
expiration of any applicable grace period); or
(i) rendering of any final judgment or judgments for the
payment of money in excess of $15.0 million against the Company that is
not discharged for any period of sixty (60) consecutive days during
which a stay of enforcement shall not be in effect; or
(j) commencement by the Company of a voluntary case or
other proceeding seeking liquidation, reorganization or other relief
with respect to the Company or its debts under any bankruptcy,
insolvency or other similar law now or hereafter in effect or seeking
the appointment of a trustee, receiver, liquidator, custodian or other
similar official of the Company or any substantial part of the property
of the Company, or consent by the Company to any such relief or to the
appointment of or taking possession by any such official in an
involuntary case or other proceeding commenced against the Company, or
general assignment by the Company for the benefit of creditors, or
failure of the Company generally to pay its debts as they become due;
or
(k) commencement of an involuntary case or other
proceeding against the Company seeking liquidation, reorganization or
other relief with respect to the Company or its debts under any
bankruptcy, insolvency or other similar law now or hereafter in effect
or seeking the appointment of a trustee, receiver, liquidator,
custodian or other similar official of the Company or any substantial
part of the property of the Company, and such involuntary case or
other proceeding shall remain undismissed and unstayed for a period of
sixty (60) consecutive days;
then, and in each and every such case (other than an Event of Default specified
in Section 7.01(j) or 7.01(k)), unless the principal of all of the Debentures
shall have already become due and payable, either the Trustee or the holders of
not less than twenty-five percent (25%) in aggregate principal amount of the
Debentures then outstanding hereunder determined in accordance with Section
9.04, by notice in writing to the Company (and to the Trustee if given by
Debentureholders), may declare the principal of all the Debentures and the
Interest accrued thereon to be due and payable immediately, and upon any such
declaration the same shall become and shall be immediately due and payable,
anything in this Indenture or in the Debentures contained to the contrary
notwithstanding. If an Event of Default specified in Section 7.01(j) or 7.01(k)
occurs, the principal of all the Debentures and the Interest accrued thereon
shall be immediately and automatically due and payable without necessity of
further action. This provision, however, is subject to the conditions that if,
at any time after the principal of the Debentures shall have been so declared
due and payable, and before any judgment or decree for the payment of the
monies due shall have been obtained or entered as hereinafter provided, the
Company shall pay or shall deposit with the Trustee a sum sufficient to pay all
matured installments of Interest upon all Debentures and the principal of any
and all Debentures which shall have become due otherwise than by acceleration
(with interest on overdue installments of Interest (to the extent that payment
of such interest is enforceable under applicable law) and on such principal at
the rate borne by
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the Debentures, to the date of such payment or deposit) and amounts due to the
Trustee pursuant to Section 8.06, and if any and all defaults under this
Indenture, other than the nonpayment of principal of and accrued Interest on
Debentures which shall have become due by acceleration, shall have been cured or
waived pursuant to Section 7.07, then and in every such case the holders of a
majority in aggregate principal amount of the Debentures then outstanding, by
written notice to the Company and to the Trustee, may waive all defaults or
Events of Default and rescind and annul such declaration and its consequences;
but no such waiver or rescission and annulment shall extend to or shall affect
any subsequent default or Event of Default, or shall impair any right consequent
thereon. The Company shall notify in writing a Responsible Officer of the
Trustee, promptly upon becoming aware thereof, of any Event of Default.
In case the Trustee shall have proceeded to enforce any right under
this Indenture and such proceedings shall have been discontinued or abandoned
because of such waiver or rescission and annulment or for any other reason or
shall have been determined adversely to the Trustee, then and in every such
case the Company, the holders of Debentures, and the Trustee shall be restored
respectively to their several positions and rights hereunder, and all rights,
remedies and powers of the Company, the holders of Debentures, and the Trustee
shall continue as though no such proceeding had been taken.
Section 7.02. Payments of Debentures on Default; Suit Therefor. The
Company covenants that (a) in case default shall be made in the payment of any
installment of Interest upon any of the Debentures as and when the same shall
become due and payable, and such default shall have continued for a period of
thirty (30) days, or (b) in case default shall be made in the payment of the
principal of any of the Debentures as and when the same shall have become due
and payable, whether at maturity of the Debentures or in connection with any
redemption, repurchase, acceleration, declaration or otherwise, then, upon
demand of the Trustee, the Company will pay to the Trustee, for the benefit of
the holders of the Debentures, the whole amount that then shall have become due
and payable on all such Debentures for principal or Interest, as the case may
be, with interest upon the overdue principal and (to the extent that payment of
such interest is enforceable under applicable law) upon the overdue installments
of Interest at the rate borne by the Debentures, and, in addition thereto, such
further amount as shall be sufficient to cover the costs and expenses of
collection, including reasonable compensation to the Trustee, its agents,
attorneys and counsel, and all other amounts due the Trustee under Section 8.06.
Until such demand by the Trustee, the Company may pay the principal of and
Interest on the Debentures to the registered holders, whether or not the
Debentures 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
Debentures and collect in the manner provided by law out of the property of the
Company or any other obligor on the Debentures wherever situated the monies
adjudged or decreed to be payable.
In case there shall be pending proceedings for the bankruptcy or for
the reorganization of the Company or any other obligor on the Debentures under
Title 11 of the United States Code, or any other applicable law, or in case a
receiver, assignee or trustee in bankruptcy or reorganization,
41
liquidator, sequestrator or similar official shall have been appointed for or
taken possession of the Company or such other obligor, the property of the
Company or such other obligor, or in the case of any other judicial proceedings
relative to the Company or such other obligor upon the Debentures, or to the
creditors or property of the Company or such other obligor, the Trustee,
irrespective of whether the principal of the Debentures shall then be due and
payable as therein expressed or by declaration or otherwise and irrespective of
whether the Trustee shall have made any demand pursuant to the provisions of
this Section 7.02, shall be entitled and empowered, by intervention in such
proceedings or otherwise, to file and prove a claim or claims for the whole
amount of principal and Interest owing and unpaid in respect of the Debentures,
and, in case of any judicial proceedings, to file such proofs of claim and other
papers or documents as may be necessary or advisable in order to have the claims
of the Trustee and of the Debentureholders allowed in such judicial proceedings
relative to the Company or any other obligor on the Debentures, its or their
creditors, or its or their property, and to collect and receive any monies or
other property payable or deliverable on any such claims, and to distribute the
same after the deduction of any amounts due the Trustee under Section 8.06, and
to take any other action with respect to such claims, including participating as
a member of any official committee of creditors, as it reasonably deems
necessary or advisable, and, unless prohibited by law or applicable regulations,
and any receiver, assignee or trustee in bankruptcy or reorganization,
liquidator, custodian or similar official is hereby authorized by each of the
Debentureholders to make such payments to the Trustee, and, in the event that
the Trustee shall consent to the making of such payments directly to the
Debentureholders, to pay to the Trustee any amount due it for reasonable
compensation, expenses, advances and disbursements, including counsel fees and
expenses incurred by it up to the date of such distribution. To the extent that
such payment of reasonable compensation, expenses, advances and disbursements
out of the estate in any such proceedings shall be denied for any reason,
payment of the same shall be secured by a lien on, and shall be paid out of, any
and all distributions, dividends, monies, securities and other property which
the holders of the Debentures may be entitled to receive in such proceedings,
whether in liquidation or under any plan of reorganization or arrangement or
otherwise.
All rights of action and of asserting claims under this Indenture, or
under any of the Debentures, may be enforced by the Trustee without the
possession of any of the Debentures, or the production thereof at any trial or
other proceeding relative thereto, and any such suit or proceeding instituted
by the Trustee shall be brought in its own name as trustee of an express trust,
and any recovery of judgment shall, after provision for the payment of the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel, be for the ratable benefit of the holders of the
Debentures.
In any proceedings brought by the Trustee (and in any proceedings
involving the interpretation of any provision of this Indenture to which the
Trustee shall be a party) the Trustee shall be held to represent all the
holders of the Debentures, and it shall not be necessary to make any holders of
the Debentures parties to any such proceedings.
Section 7.03. Application of Monies Collected by Trustee. Any monies
or other property collected by the Trustee pursuant to this Article 7, or any
monies or other property otherwise distributable in respect of the Company's
obligations under this Indenture, shall be applied in the order following, at
the date or dates fixed by the Trustee for the distribution of such monies,
42
upon presentation of the several Debentures, and stamping thereon the payment,
if only partially paid, and upon surrender thereof, if fully paid:
FIRST: To the payment of all amounts due the Trustee
(including any predecessor Trustee) under Section 8.06;
SECOND: In case the principal of the outstanding Debentures
shall not have become due and be unpaid, to the payment of Interest on
the Debentures in default in the order of the maturity of the
installments of such Interest, with interest (to the extent that such
interest has been collected by the Trustee) upon the overdue
installments of Interest at the rate borne by the Debentures, such
payments to be made ratably to the Persons entitled thereto;
THIRD: In case the principal of the outstanding Debentures
shall have become due, by declaration or otherwise, and be unpaid, to
the payment of the whole amount then owing and unpaid upon the
Debentures for principal and Interest, with interest on the overdue
principal and (to the extent that such interest has been collected by
the Trustee) upon overdue installments of Interest at the rate borne
by the Debentures, and in case such monies shall be insufficient to
pay in full the whole amounts so due and unpaid upon the Debentures,
then to the payment of such principal and Interest without preference
or priority of principal over Interest, or of Interest over principal,
or of any installment of Interest over any other installment of
Interest, or of any Debenture over any other Debenture, ratably to the
aggregate of such principal and accrued and unpaid Interest; and
FOURTH: To the payment of the remainder, if any, to the
Company or any other Person lawfully entitled thereto.
Section 7.04. Proceedings by Debentureholder. No holder of any
Debenture shall have any right by virtue of or by reference to any provision of
this Indenture to institute any suit, action or proceeding in equity or at law
upon or under or with respect to this Indenture, or for the appointment of a
receiver, trustee, liquidator, custodian or other similar official, or for any
other remedy hereunder, unless such holder previously shall have given to the
Trustee written notice of an Event of Default and of the continuance thereof, as
hereinbefore provided, and unless also the holders of not less than twenty-five
percent (25%) in aggregate principal amount of the Debentures then outstanding
shall have made written request upon the Trustee to institute such action, suit
or proceeding in its own name as Trustee hereunder and shall have offered to the
Trustee such reasonable security or indemnity as it may require against the
costs, expenses and liabilities to be incurred therein or thereby, and the
Trustee for sixty (60) days after its receipt of such notice, request and offer
of indemnity, shall have neglected or refused to institute any such action, suit
or proceeding and no direction inconsistent with such written request shall have
been given to the Trustee pursuant to Section 7.07; it being understood and
intended, and being expressly covenanted by the taker and holder of every
Debenture with every other taker and holder and the Trustee, that no one or more
holders of Debentures shall have any right in any manner whatever by virtue of
or by reference to any provision of this Indenture to affect, disturb or
prejudice the rights of any other holder of Debentures, or to obtain or seek to
obtain priority over or preference to any other such holder, or to enforce any
right under this Indenture, except in the manner herein provided and for the
equal, ratable and common benefit of all holders of Debentures (except
43
as otherwise provided herein). For the protection and enforcement of this
Section 7.04, each and every Debentureholder and the Trustee shall be entitled
to such relief as can be given either at law or in equity.
Notwithstanding any other provision of this Indenture and any
provision of any Debenture, the right of any holder of any Debenture to receive
payment of the principal of (including any Redemption Price or Repurchase Price
pursuant to Article 3) and accrued Interest on such Debenture on or after the
respective due dates expressed in such Debenture, or to institute suit for the
enforcement of any such payment on or after such respective dates against the
Company, shall not be impaired or affected without the consent of such holder.
Anything in this Indenture or the Debentures to the contrary
notwithstanding, the holder of any Debenture, without the consent of either the
Trustee or the holder of any other Debenture, in its own behalf and for its own
benefit, may enforce, and may institute and maintain any proceeding suitable to
enforce, its rights of conversion as provided herein.
Section 7.05. Proceedings by Trustee. In case of an Event of Default,
the Trustee may, in its discretion, proceed to protect and enforce the rights
vested in it by this Indenture by such appropriate judicial proceedings as are
necessary to protect and enforce any of such rights, either by suit in equity or
by action at law or by proceeding in bankruptcy or otherwise, whether for the
specific enforcement of any covenant or agreement contained in this Indenture or
in aid of the exercise of any power granted in this Indenture, or to enforce any
other legal or equitable right vested in the Trustee by this Indenture or by
law.
Section 7.06. Remedies Cumulative and Continuing. Except as provided
in Section 2.06, all powers and remedies given by this Article 7 to the Trustee
or to the Debentureholders shall, to the extent permitted by law, be deemed
cumulative and not exclusive of any thereof or of any other powers and remedies
available to the Trustee or the holders of the Debentures, by judicial
proceedings or otherwise, to enforce the performance or observance of the
covenants and agreements contained in this Indenture, and no delay or omission
of the Trustee or of any holder of any of the Debentures to exercise any right
or power accruing upon any default or Event of Default occurring and continuing
as aforesaid shall impair any such right or power, or shall be construed to be a
waiver of any such default or any acquiescence therein, and, subject to the
provisions of Section 7.04, every power and remedy given by this Article 7 or by
law to the Trustee or to the Debentureholders may be exercised from time to
time, and as often as shall be deemed expedient, by the Trustee or by the
Debentureholders.
Section 7.07. Direction of Proceedings and Waiver of Defaults by
Majority of Debentureholders. Upon provision of indemnity reasonably
satisfactory to the Trustee, the holders of a majority in aggregate principal
amount of the Debentures at the time outstanding determined in accordance with
Section 9.04 shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or exercising
any trust or power conferred on the Trustee; provided that (a) such direction
shall not be in conflict with any rule of law or with this Indenture, (b) the
Trustee may take any other action which is not inconsistent with such direction
and (c) the Trustee may decline to take any action that would benefit some
Debentureholders to the detriment of other Debentureholders. The holders of a
majority in aggregate principal amount of the Debentures at the time outstanding
determined in accordance
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with Section 9.04 may, on behalf of the holders of all of the Debentures, waive
any past default or Event of Default hereunder and its consequences except (i) a
default in the payment of Interest on, or the principal of, the Debentures, (ii)
a failure by the Company to convert any Debentures into Common Stock, cash or a
combination of cash and Common Stock of the Company, (iii) a default in the
payment of the Redemption Price pursuant to Section 3.03, (iv) a default in the
payment of the Fundamental Change Repurchase Price pursuant to Section 3.05 or
Company Repurchase Price pursuant to Section 3.06 or (v) a default in respect of
a covenant or provision hereof which under Article 11 cannot be modified or
amended without the consent of the holders of each or all Debentures then
outstanding or affected thereby. Upon any such waiver, the Company, the Trustee
and the holders of the Debentures shall be restored to their former positions
and rights hereunder; but no such waiver shall extend to any subsequent or other
default or Event of Default or impair any right consequent thereon. Whenever any
default or Event of Default hereunder shall have been waived as permitted by
this Section 7.07, said default or Event of Default shall for all purposes of
the Debentures and this Indenture be deemed to have been cured and to be not
continuing; but no such waiver shall extend to any subsequent or other default
or Event of Default or impair any right consequent thereon.
Section 7.08. Notice of Defaults. The Trustee shall, within ninety
(90) days after a Responsible Officer of the Trustee has knowledge of the
occurrence of a default, mail to all Debentureholders, as the names and
addresses of such holders appear upon the Debenture Register, notice of all
defaults known to a Responsible Officer, unless such defaults shall have been
cured or waived before the giving of such notice; provided that except in the
case of default in the payment of the principal of or Interest on any of the
Debentures, the Trustee shall be protected in withholding such notice if and so
long as a trust committee of directors and/or Responsible Officers of the
Trustee in good faith determines that the withholding of such notice is in the
interests of the Debentureholders. For the purpose of this Section 7.08, the
term "DEFAULT" means any event which is, or after notice or lapse of time or
both would become, an Event of Default.
Section 7.09. Undertaking to Pay Costs. All parties to this Indenture
agree, and each holder of any Debenture by its acceptance thereof shall be
deemed to have agreed, that any court may, in its discretion, require, in any
suit for the enforcement of any right or remedy under this Indenture, or in any
suit against the Trustee for any action taken or omitted by it as Trustee, the
filing by any party litigant in such suit of an undertaking to pay the costs of
such suit and that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees and expenses, against any party litigant in
such suit, having due regard to the merits and good faith of the claims or
defenses made by such party litigant; provided that the provisions of this
Section 7.09 (to the extent permitted by law) shall not apply to any suit
instituted by the Trustee, to any suit instituted by any Debentureholder, or
group of Debentureholders, holding in the aggregate more than ten percent in
principal amount of the Debentures at the time outstanding determined in
accordance with Section 9.04, or to any suit instituted by any Debentureholder
for the enforcement of the payment of the principal of or Interest on any
Debenture on or after the due date expressed in such Debenture or to any suit
for the enforcement of the right to convert any Debenture in accordance with the
provisions of Article 15.
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ARTICLE 8
THE TRUSTEE
Duties and Responsibilities of Trustee. The Trustee, prior to the
occurrence of an Event of Default and after the curing of all Events of Default
which may have occurred, undertakes to perform such duties and only such duties
as are specifically set forth in this Indenture. In case an Event of Default has
occurred (which has not been cured or waived), the Trustee shall exercise such
of the rights and powers vested in it by this Indenture, and use the same degree
of care and skill in their exercise, as a prudent person would exercise or use
under the circumstances in the conduct of such person's own affairs.
No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own willful misconduct, except that:
(a) prior to the occurrence of an Event of Default and
after the curing or waiving of all Events of Default which may have
occurred:
(i) the duties and obligations of the Trustee
shall be determined solely by the express provisions of this
Indenture and the Trust Indenture Act, and the Trustee shall
not be liable except for the performance of such duties and
obligations as are specifically set forth in this Indenture
and no implied covenants or obligations shall be read into
this Indenture and the Trust Indenture Act against the
Trustee; and
(ii) in the absence of bad faith on the part of
the Trustee, the Trustee may conclusively rely as to the truth
of the statements and the correctness of the opinions
expressed therein, upon any certificates or opinions furnished
to the Trustee and conforming to the requirements of this
Indenture; but, in the case of any such certificates or
opinions which by any provisions hereof are specifically
required to be furnished to the Trustee, the Trustee shall be
under a duty to examine the same to determine whether or not
they conform to the requirements of this Indenture;
(b) the Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer or Officers of the
Trustee, unless the Trustee was negligent in ascertaining the pertinent
facts;
(c) the Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance
with the written direction of the holders of not less than a majority
in principal amount of the Debentures at the time outstanding
determined as provided in Section 9.04 relating to the time, method and
place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred upon the Trustee,
under this Indenture;
(d) the Trustee shall not be liable in respect of any
payment (as to the correctness of amount, entitlement to receive or any
other matters relating to payment) or notice
46
effected by the Company or any Paying Agent or any records maintained
by any co-registrar with respect to the Debentures; and
(e) if any party fails to deliver a notice relating to an
event the fact of which, pursuant to this Indenture, requires notice to
be sent to the Trustee, the Trustee may conclusively rely on its
failure to receive such notice as reason to act as if no such event
occurred.
The Trustee shall not be deemed to have knowledge or notice of any
default (as defined in Section 7.08) or Event of Default hereunder unless a
Responsible Officer of the Trustee shall have received at the Corporate Trust
Office written notice of such default or Event of Default from the Company or
the holders of at least 10% in aggregate principal amount of the Debentures and
such notice refers to such default or Event of Default, the Debentures and the
Indenture.
None of the provisions contained in this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur personal financial
liability in the performance of any of its duties or in the exercise of any of
its rights or powers, if there is reasonable ground for believing that the
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.
Whether or not therein provided, every provision of this Indenture
relating to the conduct or affecting the liability of, or affording protection
to, the Trustee shall be subject to the provisions of this Section 8.01.
Section 8.02. Reliance on Documents, Opinions, Etc. Except as
otherwise provided in Section 8.01:
(a) the Trustee may conclusively rely and shall be
protected in acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, bond,
debenture, note, coupon or other paper or document (whether in its
original or facsimile form) believed by it in good faith to be genuine
and to have been signed or presented by the proper party or parties;
(b) any request, direction, order or demand of the
Company mentioned herein shall be sufficiently evidenced by an
Officers' Certificate (unless other evidence in respect thereof be
herein specifically prescribed); and any resolution of the Board of
Directors may be evidenced to the Trustee by a copy thereof certified
by the Secretary or an Assistant Secretary of the Company;
(c) the Trustee may consult with counsel of its own
selection and any advice or Opinion of Counsel shall be full and
complete authorization and protection in respect of any action taken or
omitted by it hereunder in good faith and in accordance with such
advice or Opinion of Counsel;
(d) the Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Indenture at the
request, order or direction of any of the
47
Debentureholders pursuant to the provisions of this Indenture, unless
such Debentureholders shall have offered to the Trustee reasonable
security or indemnity satisfactory to it against the costs, expenses
and liabilities which may be incurred therein or thereby;
(e) the Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture or other paper or document,
but the Trustee may make such further inquiry or investigation into
such facts or matters as it may see fit, and, if the Trustee shall
determine to make such further inquiry or investigation, it shall be
entitled to examine the books, records and premises of the Company,
personally or by agent or attorney;
(f) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys and the Trustee shall not be responsible
for any misconduct or negligence on the part of any agent or attorney
appointed by it with due care hereunder;
(g) the Trustee shall not be liable for any action taken,
suffered or omitted to be taken by it in good faith and reasonably
believed by it to be authorized or within the discretion or rights or
powers conferred upon it by this Indenture;
(h) the rights, privileges, protections, immunities and
benefits given to the Trustee, including, without limitation, its right
to be indemnified, are extended to, and shall be enforceable by, the
Trustee in each of its capacities hereunder, and each agent, custodian
and other Person employed to act hereunder;
(i) the Trustee may request that the Company deliver an
Officers' Certificate setting forth the names of individuals and/or
titles of officers authorized at such time to take specified actions
pursuant to this Indenture, which Officers' Certificate may be signed
by any person authorized to sign an Officers' Certificate, including
any person specified as so authorized in any such certificate
previously delivered and not superseded; and
(j) before the Trustee acts or refrains from acting, it
may require an Officers' Certificate or an Opinion of Counsel. The
Trustee shall not be liable for any action which it takes or omits to
take in good faith in reliance on the Officers' Certificate or Opinion
of Counsel.
Section 8.03. No Responsibility for Recitals, Etc. The recitals
contained herein and in the Debentures (except in the Trustee's certificate of
authentication) shall be taken as the statements of the Company, and the Trustee
assumes no responsibility for the correctness of the same. The Trustee makes no
representations as to the validity or sufficiency of this Indenture or of the
Debentures. The Trustee shall not be accountable for the use or application by
the Company of any Debentures or the proceeds of any Debentures authenticated
and delivered by the Trustee in conformity with the provisions of this
Indenture.
48
Section 8.04. Trustee, Paying Agents, Bid Solicitation Agents,
Conversion Agents or Registrar May Own Debentures. The Trustee, any Paying
Agent, any Bid Solicitation Agent, any Conversion Agent or any Debenture
Registrar, in its individual or any other capacity, may become the owner or
pledgee of Debentures with the same rights it would have if it were not Trustee,
Paying Agent, Bid Solicitation Agent, Conversion Agent or Debenture Registrar.
Section 8.05. Monies to Be Held in Trust. Subject to the provisions
of Section 13.03, all monies received by the Trustee shall, until used or
applied as herein provided, be held in trust for the purposes for which they
were received. Money held by the Trustee in trust hereunder need not be
segregated from other funds except to the extent required by law. The Trustee
shall be under no liability for interest on any money received by it hereunder
except as may be agreed in writing from time to time by the Company and the
Trustee.
Section 8.06. Compensation and Expenses of Trustee. The Company
covenants and agrees to pay to the Trustee from time to time, and the Trustee
shall be entitled to, such compensation for all services rendered by it
hereunder in any capacity (which shall not be limited by any provision of law in
regard to the compensation of a trustee of an express trust) as mutually agreed
to from time to time in writing between the Company and the Trustee, and the
Company will pay or reimburse the Trustee upon its request for all reasonable
expenses, disbursements and advances reasonably incurred or made by the Trustee
in accordance with any of the provisions of this Indenture (including the
reasonable compensation and the expenses and disbursements of its counsel and of
all Persons not regularly in its employ) except any such expense, disbursement
or advance as may arise from its negligence, willful misconduct or bad faith.
The Company also covenants to indemnify the Trustee and any predecessor Trustee
(or any officer, director or employee of the Trustee), in any capacity under
this Indenture and its agents and any authenticating agent for, and to hold them
harmless against, any and all loss, liability, damage, claim or expense
including taxes (other than taxes based on the income of the Trustee) incurred
without negligence, willful misconduct or bad faith on the part of the Trustee
or such officers, directors, employees and agent or authenticating agent, as the
case may be, and arising out of or in connection with the acceptance or
administration of this trust or in any other capacity hereunder, including the
costs and expenses (including reasonable attorneys' fees and expenses) of
defending themselves against any claim (whether asserted by the Company, any
holder or any other Person) of liability in connection with the exercise or
performance of any of its powers or duties hereunder. The obligations of the
Company under this Section 8.06 to compensate or indemnify the Trustee and to
pay or reimburse the Trustee for expenses (including reasonable attorneys' fees
and expenses), disbursements and advances shall be secured by a lien prior to
that of the Debentures upon all property and funds held or collected by the
Trustee as such, except funds held in trust for the benefit of the holders of
particular Debentures. The obligation of the Company under this Section shall
survive the resignation or removal of the Trustee and the satisfaction and
discharge or termination of this Indenture.
When the Trustee and its agents and any authenticating agent incur
expenses or render services after an Event of Default specified in Section
7.01(j) or Section 7.01(k) with respect to the Company occurs, the expenses
(including reasonable attorneys' fees and expenses) and the compensation for the
services are intended to constitute expenses of administration under any
bankruptcy, insolvency or similar laws.
49
Section 8.07. Officers' Certificate as Evidence. Except as
otherwise provided in Section 8.01, whenever in the administration of the
provisions of this Indenture the Trustee shall deem it necessary or desirable
that a matter be proved or established prior to taking or omitting any action
hereunder, such matter (unless other evidence in respect thereof be herein
specifically prescribed) may, in the absence of bad faith or willful misconduct
on the part of the Trustee, be deemed to be conclusively proved and established
by an Officers' Certificate delivered to the Trustee.
Section 8.08. Conflicting Interests of Trustee. If the Trustee has
or shall acquire a conflicting interest within the meaning of the Trust
Indenture Act, the Trustee shall either eliminate such interest or resign, to
the extent and in the manner provided by, and subject to the provisions of, the
Trust Indenture Act and this Indenture.
Section 8.09. Eligibility of Trustee. There shall at all times be a
Trustee hereunder which shall be a Person that is eligible pursuant to the Trust
Indenture Act to act as such and has a combined capital and surplus of at least
$50,000,000 (or if such Person is a member of a bank holding company system, its
bank holding company shall have a combined capital and surplus of at least
$50,000,000). If such Person publishes reports of condition at least annually,
pursuant to law or to the requirements of any supervising or examining
authority, then for the purposes of this Section the combined capital and
surplus of such Person shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time
the Trustee shall cease to be eligible in accordance with the provisions of this
Section 8.09, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article.
Section 8.10. Resignation or Removal of Trustee. (a) The Trustee
may at any time resign by giving written notice of such resignation to the
Company and to the holders of Debentures. Upon receiving such notice of
resignation, the Company shall promptly appoint a successor trustee by written
instrument, in duplicate, executed by order of the Board of Directors, one copy
of which instrument shall be delivered to the resigning Trustee and one copy to
the successor trustee. If no successor trustee shall have been so appointed and
have accepted appointment sixty (60) days after the mailing of such notice of
resignation to the Debentureholders, the resigning Trustee may, upon ten (10)
Business Days' notice to the Company and the Debentureholders, appoint a
successor identified in such notice or may petition, at the expense of the
Company, any court of competent jurisdiction for the appointment of a successor
trustee, or if any Debentureholder who has been a bona fide holder of a
Debenture or Debentures for at least six (6) months may, subject to the
provisions of Section 7.09, on behalf of himself and all others similarly
situated, petition any such court for the appointment of a successor trustee.
Such court may thereupon, after such notice, if any, as it may deem proper and
prescribe, appoint a successor trustee.
(b) In case at any time any of the following shall occur:
(i) the Trustee shall fail to comply with Section 8.08
after written request therefor by the Company or by any Debentureholder
who has been a bona fide holder of a Debenture or Debentures for at
least six (6) months; or
50
(ii) the Trustee shall cease to be eligible in accordance
with the provisions of Section 8.09 and shall fail to resign after
written request therefor by the Company or by any such Debentureholder;
or
(iii) the Trustee shall become incapable of acting, or
shall be adjudged a bankrupt or insolvent, or a receiver of the Trustee
or of its property shall be appointed, or any public officer shall take
charge or control of the Trustee or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation,
then, in any such case, the Company may remove the Trustee and appoint a
successor trustee by written instrument, in duplicate, executed by order of the
Board of Directors, one copy of which instrument shall be delivered to the
Trustee so removed and one copy to the successor trustee, or, subject to the
provisions of Section 7.09, any Debentureholder who has been a bona fide holder
of a Debenture or Debentures for at least six (6) months may, on behalf of
himself and all others similarly situated, petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
trustee; provided that if no successor trustee shall have been appointed and
have accepted appointment sixty (60) days after either the Company or the
Debentureholders have removed the Trustee, or the Trustee resigns, the Trustee
so removed may petition, at the expense of the Company, any court of competent
jurisdiction for an appointment 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
Debentures at the time outstanding may at any time remove the Trustee and
nominate a successor trustee which shall be deemed appointed as successor
trustee unless, within ten (10) days after notice to the Company of such
nomination, the Company objects thereto, in which case the Trustee so removed or
any Debentureholder, or if such Trustee so removed or any Debentureholder fails
to act, the Company, upon the terms and conditions and otherwise as in Section
8.10(a) provided, may petition any court of competent jurisdiction for an
appointment of a successor trustee.
(d) Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section 8.10 shall
become effective upon acceptance of appointment by the successor trustee as
provided in Section 8.11.
Section 8.11. Acceptance by Successor Trustee. Any successor
trustee appointed as provided in Section 8.10 shall execute, acknowledge and
deliver to the Company and to its predecessor trustee an instrument accepting
such appointment hereunder, and thereupon the resignation or removal of the
predecessor trustee shall become effective and such successor trustee, without
any further act, deed or conveyance, shall become vested with all the rights,
powers, duties and obligations of its predecessor hereunder, with like effect as
if originally named as trustee herein; but, nevertheless, on the written request
of the Company or of the successor trustee, the trustee ceasing to act shall,
upon payment of any amount then due it pursuant to the provisions of Section
8.06, execute and deliver an instrument transferring to such successor trustee
all the rights and powers of the trustee so ceasing to act. Upon request of any
such successor trustee, the Company shall execute any and all instruments in
writing for more fully and certainly vesting in and confirming to such successor
trustee all such rights and powers. Any trustee ceasing to act shall,
nevertheless, retain a lien upon all property and funds held or collected by
such trustee
51
as such, except for funds held in trust for the benefit of holders of particular
Debentures, to secure any amounts then due it pursuant to the provisions of
Section 8.06.
No successor trustee shall accept appointment as provided in this
Section 8.11 unless, at the time of such acceptance, such successor trustee
shall be qualified under the provisions of Section 8.08 and be eligible under
the provisions of Section 8.09.
Upon acceptance of appointment by a successor trustee as provided in
this Section 8.11, the Company (or the former trustee, at the written direction
of the Company) shall mail or cause to be mailed notice of the succession of
such trustee hereunder to the holders of Debentures at their addresses as they
shall appear on the Debenture Register. If the Company fails to mail such notice
within ten (10) days after acceptance of appointment by the successor trustee,
the successor trustee shall cause such notice to be mailed at the expense of the
Company.
Section 8.12. Succession by Merger. Any Person into which the
Trustee may be merged or converted or with which it may be consolidated, or any
Person resulting from any merger, conversion or consolidation to which the
Trustee shall be a party, or any Person succeeding to all or substantially all
of the corporate trust business of the Trustee (including any trust created by
this Indenture), shall be the successor to the Trustee hereunder without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, provided that in the case of any Person succeeding to all or
substantially all of the corporate trust business of the Trustee, such Person
shall be qualified under the provisions of Section 8.08 and eligible under the
provisions of Section 8.09.
In case at the time such successor to the Trustee shall succeed to the
trusts created by this Indenture, any of the Debentures shall have been
authenticated but not delivered, any such successor to the Trustee may adopt the
certificate of authentication of any predecessor trustee or authenticating agent
appointed by such predecessor trustee, and deliver such Debentures so
authenticated; and in case at that time any of the Debentures shall not have
been authenticated, any successor to the Trustee or any authenticating agent
appointed by such successor trustee may authenticate such Debentures in the name
of the successor trustee; and in all such cases such certificates shall have the
full force that is provided in the Debentures or in this Indenture; provided
that the right to adopt the certificate of authentication of any predecessor
Trustee or authenticate Debentures in the name of any predecessor Trustee shall
apply only to its successor or successors by merger, conversion or
consolidation.
Section 8.13. Preferential Collection of Claims. If and when the
Trustee shall be or become a creditor of the Company (or any other obligor upon
the Debentures), the Trustee shall be subject to the provisions of the Trust
Indenture Act regarding the collection of the claims against the Company (or any
such other obligor).
ARTICLE 9
THE DEBENTUREHOLDERS
Section 9.01. Action by Debentureholders. Whenever in this
Indenture it is provided that the holders of a specified percentage in aggregate
principal amount of the Debentures may take any action (including the making of
any demand or request, the giving of any notice,
52
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 Debentureholders in person or by agent or proxy
appointed in writing, or (b) by the record of the holders of Debentures voting
in favor thereof at any meeting of Debentureholders duly called and held in
accordance with the provisions of Article 10, or (c) by a combination of such
instrument or instruments and any such record of such a meeting of
Debentureholders. Whenever the Company or the Trustee solicits the taking of any
action by the holders of the Debentures, the Company or the Trustee may fix in
advance of such solicitation, a date as the record date for determining holders
entitled to take such action. The record date shall be not more than fifteen
(15) days prior to the date of commencement of solicitation of such action.
Section 9.02. Proof of Execution by Debentureholders. Subject to
the provisions of Sections 8.01, 8.02 and 10.05, proof of the execution of any
instrument by a Debentureholder or its agent or proxy shall be sufficient if
made in accordance with such reasonable rules and regulations as may be
prescribed by the Trustee or in such manner as shall be satisfactory to the
Trustee. The holding of Debentures shall be proved by the registry of such
Debentures or by a certificate of the Debenture Registrar.
The record of any Debentureholders' meeting shall be proved in the
manner provided in Section 10.06.
Section 9.03. Who Are Deemed Absolute Owners. The Company, the
Trustee, any Paying Agent, any Conversion Agent and any Debenture Registrar may
deem the Person in whose name any Debenture shall be registered upon the
Debenture Register to be, and may treat it as, the absolute owner of such
Debenture (whether or not such Debenture shall be overdue and notwithstanding
any notation of ownership or other writing thereon made by any Person other than
the Company or any Debenture Registrar) for the purpose of receiving payment of
or on account of the principal of and Interest on such Debenture, for conversion
of such Debenture and for all other purposes; and neither the Company nor the
Trustee nor any Paying Agent nor any Conversion Agent nor any Debenture
Registrar shall be affected by any notice to the contrary. All such payments so
made to any holder for the time being, or upon his order, shall be valid, and,
to the extent of the sum or sums so paid, effectual to satisfy and discharge the
liability for monies payable upon any such Debenture.
Section 9.04. Company-Owned Debentures Disregarded. In determining
whether the holders of the requisite aggregate principal amount of Debentures
have concurred in any direction, consent, waiver or other action under this
Indenture, Debentures which are owned by the Company or any other obligor on the
Debentures or any Affiliate of the Company or any other obligor on the
Debentures shall be disregarded and deemed not to be outstanding for the purpose
of any such determination; provided that for the purposes of determining whether
the Trustee shall be protected in relying on any such direction, consent, waiver
or other action, only Debentures which a Responsible Officer knows are so owned
shall be so disregarded. Debentures so owned which have been pledged in good
faith may be regarded as outstanding for the purposes of this Section 9.04 if
the pledgee shall establish to the satisfaction of the Trustee the pledgee's
right to vote such Debentures and that the pledgee is not the Company, any other
obligor on the Debentures or any Affiliate of the Company or any such other
obligor. In the case of a dispute as
53
to such right, any decision by the Trustee taken upon the advice of counsel
shall be full protection to the Trustee. Upon request of the Trustee, the
Company shall furnish to the Trustee promptly an Officers' Certificate listing
and identifying all Debentures, if any, known by the Company to be owned or held
by or for the account of any of the above described Persons, and, subject to
Section 8.01, the Trustee shall be entitled to accept such Officers' Certificate
as conclusive evidence of the facts therein set forth and of the fact that all
Debentures not listed therein are outstanding for the purpose of any such
determination.
Section 9.05. Revocation of Consents; Future Holders Bound. At any
time prior to (but not after) the evidencing to the Trustee, as provided in
Section 9.01, of the taking of any action by the holders of the percentage in
aggregate principal amount of the Debentures specified in this Indenture in
connection with such action, any holder of a Debenture which is shown by the
evidence to be included in the Debentures the holders of which have consented to
such action may, by filing written notice with the Trustee at its Corporate
Trust Office and upon proof of holding as provided in Section 9.02, revoke such
action so far as concerns such Debenture. Except as aforesaid, any such action
taken by the holder of any Debenture shall be conclusive and binding upon such
holder and upon all future holders and owners of such Debenture and of any
Debentures issued in exchange or substitution therefor, irrespective of whether
any notation in regard thereto is made upon such Debenture or any Debenture
issued in exchange or substitution therefor.
ARTICLE 10
MEETINGS OF DEBENTUREHOLDERS
Section 10.01. Purpose of Meetings. A meeting of Debentureholders
may be called at any time and from time to time pursuant to the provisions of
this Article 10 for any of the following purposes:
(1) to give any notice to the Company or to the Trustee
or to give any directions to the Trustee permitted under this
Indenture, or to consent to the waiving of any default or Event of
Default hereunder and its consequences, or to take any other action
authorized to be taken by Debentureholders pursuant to any of the
provisions of Article 7;
(2) to remove the Trustee and nominate a successor
trustee pursuant to the provisions of Article 8;
(3) to consent to the execution of an indenture or
indentures supplemental hereto pursuant to the provisions of Section
11.02; or
(4) to take any other action authorized to be taken by or
on behalf of the holders of any specified aggregate principal amount of
the Debentures under any other provision of this Indenture or under
applicable law.
Section 10.02. Call of Meetings by Trustee. The Trustee may at any
time call a meeting of Debentureholders to take any action specified in Section
10.01, to be held at such time and at such place as the Trustee shall determine.
Notice of every meeting of the Debentureholders, setting forth the time and the
place of such meeting and in general terms the action proposed to
54
be taken at such meeting and the establishment of any record date pursuant to
Section 9.01, shall be mailed to holders of Debentures at their addresses as
they shall appear on the Debenture Register. Such notice shall also be mailed to
the Company. Such notices shall be mailed not less than twenty (20) nor more
than ninety (90) days prior to the date fixed for the meeting.
Any meeting of Debentureholders shall be valid without notice if the
holders of all Debentures then outstanding are present in person or by proxy or
if notice is waived before or after the meeting by the holders of all Debentures
outstanding, and if the Company and the Trustee are either present by duly
authorized representatives or have, before or after the meeting, waived notice.
Section 10.03. Call of Meetings by Company or Debentureholders. In
case at any time the Company, pursuant to a resolution of its Board of
Directors, or the holders of at least ten percent (10%) in aggregate principal
amount of the Debentures then outstanding, shall have requested the Trustee to
call a meeting of Debentureholders, by written request setting forth in
reasonable detail the action proposed to be taken at the meeting, and the
Trustee shall not have mailed the notice of such meeting within twenty (20) days
after receipt of such request, then the Company or such Debentureholders may
determine the time and the place for such meeting and may call such meeting to
take any action authorized in Section 10.01, by mailing notice thereof as
provided in Section 10.02.
Section 10.04. Qualifications for Voting. To be entitled to vote at
any meeting of Debentureholders a person shall (a) be a holder of one or more
Debentures on the record date pertaining to such meeting or (b) be a person
appointed by an instrument in writing as proxy by a holder of one or more
Debentures on the record date pertaining to such meeting. The only persons who
shall be entitled to be present or to speak at any meeting of Debentureholders
shall be the persons entitled to vote at such meeting and their counsel and any
representatives of the Trustee and its counsel and any representatives of the
Company and its counsel.
Section 10.05. Regulations. Notwithstanding any other provisions of
this Indenture, the Trustee may make such reasonable regulations as it may deem
advisable for any meeting of Debentureholders, in regard to proof of the holding
of Debentures and of the appointment of proxies, and in regard to the
appointment and duties of inspectors of votes, the submission and examination of
proxies, certificates and other evidence of the right to vote, and such other
matters concerning the conduct of the meeting as it shall think fit.
The Trustee shall, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called by the
Company or by Debentureholders as provided in Section 10.03, in which case the
Company or the Debentureholders calling the meeting, as the case may be, shall
in like manner appoint a temporary chairman. A permanent chairman and a
permanent secretary of the meeting shall be elected by vote of the holders of a
majority in principal amount of the Debentures represented at the meeting and
entitled to vote at the meeting.
Subject to the provisions of Section 9.04, at any meeting each
Debentureholder or proxyholder shall be entitled to one vote for each $1,000
principal amount of Debentures held or represented by him; provided that no vote
shall be cast or counted at any meeting in respect of any
55
Debenture challenged as not outstanding and ruled by the chairman of the meeting
to be not outstanding. The chairman of the meeting shall have no right to vote
other than by virtue of Debentures held by him or instruments in writing as
aforesaid duly designating him as the proxy to vote on behalf of other
Debentureholders. Any meeting of Debentureholders duly called pursuant to the
provisions of Section 10.02 or 10.03 may be adjourned from time to time by the
holders of a majority of the aggregate principal amount of Debentures
represented at the meeting, whether or not constituting a quorum, and the
meeting may be held as so adjourned without further notice.
Section 10.06. Voting. The vote upon any resolution submitted to any
meeting of Debentureholders shall be by written ballot on which shall be
subscribed the signatures of the holders of Debentures or of their
representatives by proxy and the outstanding principal amount of the Debentures
held or represented by them. The permanent chairman of the meeting shall appoint
two inspectors of votes who shall count all votes cast at the meeting for or
against any resolution and who shall make and file with the secretary of the
meeting their verified written reports in duplicate of all votes cast at the
meeting. A record in duplicate of the proceedings of each meeting of
Debentureholders shall be prepared by the secretary of the meeting and there
shall be attached to said record the original reports of the inspectors of votes
on any vote by ballot taken thereat and affidavits by one or more persons having
knowledge of the facts setting forth a copy of the notice of the meeting and
showing that said notice was mailed as provided in Section 10.02. The record
shall show the principal amount of the Debentures voting in favor of or against
any resolution. The record shall be signed and verified by the affidavits of the
permanent chairman and secretary of the meeting and one of the duplicates shall
be delivered to the Company and the other to the Trustee to be preserved by the
Trustee, the latter to have attached thereto the ballots voted at the meeting.
Any record so signed and verified shall be conclusive evidence of the
matters therein stated.
Section 10.07. No Delay of Rights by Meeting. Nothing contained in
this Article 10 shall be deemed or construed to authorize or permit, by reason
of any call of a meeting of Debentureholders or any rights expressly or
impliedly conferred hereunder to make such call, any hindrance or delay in the
exercise of any right or rights conferred upon or reserved to the Trustee or to
the Debentureholders under any of the provisions of this Indenture or of the
Debentures.
ARTICLE 11
SUPPLEMENTAL INDENTURES
Section 11.01. Supplemental Indentures Without Consent of
Debentureholders. The Company, when authorized by the resolutions of the Board
of Directors, and the Trustee may, from time to time, and at any time enter into
an indenture or indentures supplemental hereto for one or more of the following
purposes:
(a) to make provision with respect to the conversion
rights of the holders of Debentures pursuant to the requirements of
Section 15.06 or the repurchase obligations of the Company pursuant to
the requirements of Section 3.08(h);
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(b) to convey, transfer, assign, mortgage or pledge to
the Trustee as security for the Debentures, any property or assets;
(c) to evidence the assumption by a successor Person of
the obligations of the Company pursuant to Article 12;
(d) to add to the covenants of the Company such further
covenants for the benefit of the holders of Debentures, and to make the
occurrence, or the occurrence and continuance, of a default in any such
additional covenants a default or an Event of Default permitting the
enforcement of all or any of the several remedies provided in this
Indenture as herein set forth; provided that in respect of any such
additional covenant such supplemental indenture may provide for a
particular period of grace after default (which period may be shorter
or longer than that allowed in the case of other defaults) or may
provide for an immediate enforcement upon such default or may limit the
remedies available to the Trustee upon such default;
(e) to establish the forms or terms of the Debentures;
(f) to cure any ambiguity or correct any error in this
Indenture, so long as such action will not adversely affect the
interests of holders; provided that any such amendment made solely to
conform the provisions of this Indenture to the description of the
Debentures in the offering memorandum relating to the Debentures will
be deemed not to adversely affect the interests of holders;
(g) to evidence the acceptance of appointment hereunder
by a successor Trustee with respect to the Debentures;
(h) to modify, eliminate or add to the provisions of this
Indenture to such extent as shall be necessary to qualify or maintain
the qualification of this Indenture under the Trust Indenture Act, or
under any similar federal statute hereafter enacted; or
(i) make other changes to the Indenture or forms or terms
of the Debentures; provided no such change individually or in the
aggregate with all other such changes has or will have a material
adverse effect on the interests of the Debentureholders.
Upon the written request of the Company, accompanied by a copy of the
resolutions of the Board of Directors certified by its Secretary or Assistant
Secretary authorizing the execution of any supplemental indenture, the Trustee
is hereby authorized to join with the Company in the execution of any such
supplemental indenture, to make any further appropriate agreements and
stipulations that may be therein contained and to accept the conveyance,
transfer and assignment of any property thereunder, but the Trustee shall not be
obligated to, but may in its discretion, enter into any supplemental indenture
that affects the Trustee's own rights, duties or immunities under this Indenture
or otherwise.
Any supplemental indenture authorized by the provisions of this Section
11.01 may be executed by the Company and the Trustee without the consent of the
holders of any of the Debentures at the time outstanding, notwithstanding any of
the provisions of Section 11.02.
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Notwithstanding any other provision of the Indenture or the Debentures,
the Registration Rights Agreement and the obligation to pay Additional Amounts
thereunder may be amended, modified or waived in accordance with the provisions
of the Registration Rights Agreement.
Section 11.02. Supplemental Indenture with Consent of
Debentureholders. With the consent (evidenced as provided in Article 9) of the
holders of at least a majority in aggregate principal amount of the Debentures
at the time outstanding, the Company, when authorized by the resolutions of the
Board of Directors, and the Trustee may, from time to time and at any time,
enter into an indenture or indentures supplemental hereto for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or any supplemental indenture or of modifying in
any manner the rights of the holders of the Debentures; provided that no such
supplemental indenture shall (i) extend the Stated Maturity of any Debenture, or
reduce the rate or extend the time for payment of Interest thereon, or reduce
the principal amount thereof, or reduce any amount payable on redemption or
repurchase thereof, or impair the right of any Debentureholder to institute suit
for the payment thereof, or make the principal thereof or Interest thereon
payable in any coin or currency other than that provided in the Debentures, or
affect the obligation of the Company to redeem any Debenture on a Redemption
Date in a manner adverse to the holders of Debentures, or affect the obligation
of the Company to repurchase any Debenture upon the happening of a Fundamental
Change in a manner adverse to the holders of Debentures, or affect the
obligation of the Company to repurchase any Debenture on a Company Repurchase
Date in a manner adverse to the holders of Debentures, or impair the right to
convert the Debentures into Common Stock subject to the terms set forth herein,
including Section 15.06, or reduce the number of shares of Common Stock, the
amount of cash or the amount of other property receivable upon conversion, in
each case, without the consent of the holder of each Debenture so affected, or
modify any of the provisions of this Section 11.02 or Section 7.07, except to
increase any such percentage or to provide that certain other provisions of this
Indenture cannot be modified or waived without the consent of the holder of each
Debenture so affected, or change any obligation of the Company to maintain an
office or agency in the places and for the purposes set forth in Section 5.02,
or reduce the quorum or voting requirements set forth in Article 10 or (ii)
reduce the aforesaid percentage of Debentures, the holders of which are required
to consent to any such supplemental indenture, without the consent of the
holders of all Debentures then outstanding.
Upon the written request of the Company, accompanied by a copy of the
resolutions of the Board of Directors certified by its Secretary or Assistant
Secretary authorizing the execution of any such supplemental indenture, and upon
the filing with the Trustee of evidence of the consent of Debentureholders as
aforesaid, the Trustee shall join with the Company in the execution of such
supplemental indenture unless such supplemental indenture affects the Trustee's
own rights, duties or immunities under this Indenture or otherwise, in which
case the Trustee may in its discretion, but shall not be obligated to, enter
into such supplemental indenture.
It shall not be necessary for the consent of the Debentureholders under
this Section 11.02 to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such consent shall approve the
substance thereof.
Section 11.03. Effect of Supplemental Indenture. Any supplemental
indenture executed pursuant to the provisions of this Article 11 shall comply
with the Trust Indenture Act, as
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then in effect; provided that this Section 11.03 shall not require such
supplemental indenture or the Trustee to be qualified under the Trust Indenture
Act prior to the time such qualification is in fact required under the terms of
the Trust Indenture Act or the Indenture has been qualified under the Trust
Indenture Act, nor shall it constitute any admission or acknowledgment by any
party to such supplemental indenture that any such qualification is required
prior to the time such qualification is in fact required under the terms of the
Trust Indenture Act or the Indenture has been qualified under the Trust
Indenture Act. Upon the execution of any supplemental indenture pursuant to the
provisions of this Article 11, this Indenture shall be and be deemed to be
modified and amended in accordance therewith and the respective rights,
limitation of rights, obligations, duties and immunities under this Indenture of
the Trustee, the Company and the holders of Debentures shall thereafter be
determined, exercised and enforced hereunder, subject in all respects to such
modifications and amendments and all the terms and conditions of any such
supplemental indenture shall be and be deemed to be part of the terms and
conditions of this Indenture for any and all purposes.
Section 11.04. Notation on Debentures. Debentures authenticated and
delivered after the execution of any supplemental indenture pursuant to the
provisions of this Article 11 may bear a notation in form approved by the
Trustee as to any matter provided for in such supplemental indenture. If the
Company or the Trustee shall so determine, new Debentures so modified as to
conform, in the opinion of the Trustee and the Board of Directors, to any
modification of this Indenture contained in any such supplemental indenture may,
at the Company's expense, be prepared and executed by the Company, authenticated
by the Trustee (or an authenticating agent duly appointed by the Trustee
pursuant to Section 16.11) and delivered in exchange for the Debentures then
outstanding, upon surrender of such Debentures then outstanding.
Section 11.05. Evidence of Compliance of Supplemental Indenture to
Be Furnished to Trustee. Prior to entering into any supplemental indenture, the
Trustee shall be provided with an Officers' Certificate and an Opinion of
Counsel as conclusive evidence that any supplemental indenture executed pursuant
hereto complies with the requirements of this Article 11 and is otherwise
authorized or permitted by this Indenture.
ARTICLE 12
CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE
Section 12.01. Company May Consolidate on Certain Terms. Subject to the
provisions of Section 12.02, the Company shall not consolidate with or merge
with or into any other Person or Persons (whether or not affiliated with the
Company), nor shall the Company or its successor or successors be a party or
parties to successive consolidations or mergers, nor shall the Company sell,
convey, transfer or lease the property and assets of the Company substantially
as an entirety, to any other Person (whether or not affiliated with the
Company), unless: (i) the Company is the surviving Person, or the resulting,
surviving or transferee Person, if other than the Company, is organized and
existing under the laws of the United States of America, any state thereof or
the District of Columbia; (ii) upon any such consolidation, merger, sale,
conveyance, transfer or lease, the due and punctual payment of the principal of
and Interest on all of the Debentures, according to their tenor and the due and
punctual performance and observance of all of the covenants and conditions of
this Indenture to be performed by the Company, shall be expressly assumed, by
supplemental indenture satisfactory in form to the Trustee, executed and
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delivered to the Trustee by the Person (if other than the Company) formed by
such consolidation, or into which the Company shall have been merged, or by the
Person that shall have acquired or leased such property, and such supplemental
indenture shall provide for the applicable conversion rights set forth in
Section 15.06; and (iii) immediately after giving effect to the transaction
described above, no Event of Default, and no event which, after notice or
passage of time or both, would become an Event of Default, shall have happened
and be continuing.
Section 12.02. Successor to Be Substituted. In case of any such
consolidation, merger, sale, conveyance, transfer or lease and upon the
assumption by the successor Person, by supplemental indenture, executed and
delivered to the Trustee and satisfactory in form to the Trustee, of the due and
punctual payment of the principal of and Interest on all of the Debentures and
the due and punctual performance of all of the covenants and conditions of this
Indenture to be performed by the Company, such successor Person shall succeed to
and be substituted for the Company, with the same effect as if it had been named
herein as the party of this first part. Such successor Person thereupon may
cause to be signed, and may issue either in its own name or in the name of Wild
Oats Markets, Inc. any or all of the Debentures, issuable hereunder that
theretofore shall not have been signed by the Company and delivered to the
Trustee; and, upon the order of such successor Person instead of the Company and
subject to all the terms, conditions and limitations in this Indenture
prescribed, the Trustee shall authenticate and shall deliver, or cause to be
authenticated and delivered, any Debentures that previously shall have been
signed and delivered by the officers of the Company to the Trustee for
authentication, and any Debentures that such successor Person thereafter shall
cause to be signed and delivered to the Trustee for that purpose. All the
Debentures so issued shall in all respects have the same legal rank and benefit
under this Indenture as the Debentures theretofore or thereafter issued in
accordance with the terms of this Indenture as though all of such Debentures had
been issued at the date of the execution hereof. In the event of any such
consolidation, merger, sale, conveyance, transfer or lease, the Person named as
the "Company" in the first paragraph of this Indenture or any successor that
shall thereafter have become such in the manner prescribed in this Article 12
may be dissolved, wound up and liquidated at any time thereafter and such Person
shall be released from its liabilities as obligor and maker of the Debentures
and from its obligations under this Indenture.
In case of any such consolidation, merger, sale, conveyance, transfer
or lease, such changes in phraseology and form (but not in substance) may be
made in the Debentures thereafter to be issued as may be appropriate.
Section 12.03. Opinion of Counsel to Be Given Trustee. The Trustee
shall receive an Officers' Certificate and an Opinion of Counsel as conclusive
evidence that any such consolidation, merger, sale, conveyance, transfer or
lease and any such assumption complies with the provisions of this Article 12.
ARTICLE 13
SATISFACTION AND DISCHARGE OF INDENTURE
Section 13.01. Discharge of Indenture. When (a) the Company shall
deliver to the Trustee for cancellation all Debentures theretofore authenticated
(other than any Debentures that have been destroyed, lost or stolen and in lieu
of or in substitution for which other Debentures shall have been authenticated
and delivered) and not theretofore canceled, or (b) all the
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Debentures not theretofore canceled or delivered to the Trustee for cancellation
shall have become due and payable and the Company shall deposit with the Trustee
or with one or more Paying Agents (or, if the Company is acting as its own
Paying Agent, set aside, segregate and hold in trust as provided in Section
5.04), in trust, funds sufficient to pay all amounts due and owing on Debentures
(other than any Debentures that shall have been mutilated, destroyed, lost or
stolen and in lieu of or in substitution for which other Debentures shall have
been authenticated and delivered) not theretofore canceled or delivered to the
Trustee for cancellation, and if in either case the Company shall also pay or
cause to be paid all other sums payable hereunder by the Company, then this
Indenture shall cease to be of further effect (except as to (1) remaining rights
of registration of transfer, substitution and exchange and conversion of
Debentures, (2) rights hereunder of Debentureholders to receive payments of
principal of and Interest on the Debentures and the other rights, duties and
obligations of Debentureholders, as beneficiaries hereof with respect to the
amounts, if any, so deposited with the Trustee and (3) the rights, obligations
and immunities of the Trustee hereunder, including those pursuant to Section
8.06), and the Trustee, on written demand of the Company accompanied by an
Officers' Certificate and an Opinion of Counsel as required by Section 16.05 and
at the cost and expense of the Company, shall execute proper instruments
acknowledging satisfaction of and discharging this Indenture; the Company,
however, hereby agrees to reimburse the Trustee for any costs or expenses
thereafter reasonably and properly incurred by the Trustee and to compensate the
Trustee for any services thereafter reasonably and properly rendered by the
Trustee in connection with this Indenture or the Debentures.
Section 13.02. Paying Agent to Repay Monies Held. Upon the
satisfaction and discharge of this Indenture, all monies then held by any Paying
Agent of the Debentures (other than the Trustee) shall, upon written request of
the Company, be repaid to it or paid to the Trustee, and thereupon such Paying
Agent shall be released from all further liability with respect to such monies.
Section 13.03. Return of Unclaimed Monies. Subject to the
requirements of applicable law, any monies deposited with or paid to the Trustee
for payment of the principal of or Interest on Debentures and not applied but
remaining unclaimed by the holders of Debentures for two years after the date
upon which the principal of or Interest on such Debentures, as the case may be,
shall have become due and payable, shall be repaid to the Company by the Trustee
on demand and all liability of the Trustee shall thereupon cease with respect to
such monies; and the holder of any of the Debentures shall thereafter look only
to the Company for any payment that such holder may be entitled to collect
unless an applicable abandoned property law designates another Person.
ARTICLE 14
IMMUNITY OF INCORPORATORS, SHAREHOLDERS, OFFICERS AND DIRECTORS
Section 14.01. Indenture and Debentures Solely Corporate
Obligations. No recourse for the payment of the principal of or Interest on any
Debenture, or for any claim based thereon or otherwise in respect thereof, and
no recourse under or upon any obligation, covenant or agreement of the Company
in this Indenture or in any supplemental indenture or in any Debenture, or
because of the creation of any indebtedness represented thereby, shall be had
against any incorporator, shareholder, employee, agent, officer, director or
subsidiary, as such, past, present or future, of the Company or of any successor
corporation, either directly or through the
61
Company or any successor corporation, whether by virtue of any constitution,
statute or rule of law, or by the enforcement of any assessment or penalty or
otherwise; it being expressly understood that all such liability is hereby
expressly waived and released as a condition of, and as a consideration for, the
execution of this Indenture and the issue of the Debentures.
ARTICLE 15
CONVERSION OF DEBENTURES
Section 15.01. Right to Convert. (a) Subject to and upon compliance
with the provisions of this Indenture, prior to May 15, 2034, the holder of any
Debenture shall have the right, at such holder's option, to convert the
principal amount of the Debenture, or any portion of such principal amount which
is an integral multiple of $1,000, into fully paid and non-assessable shares of
Common Stock (as such shares shall then be constituted) at the Conversion Rate
in effect at such time, by surrender of the Debenture so to be converted in
whole or in part, together with any required funds, under the circumstances
described in this Section 15.01 and in the manner provided in Section 15.02. The
Debentures shall be convertible only during the following periods upon the
occurrence of one of the following events:
(i) (A) during any calendar quarter commencing after the
quarter ended June 30, 2004 and before March 31, 2029 (and only during
such calendar quarter) if the Last Reported Sale Price for the Common
Stock for at least twenty (20) Trading Days during the period of thirty
(30) consecutive Trading Days ending on the last Trading Day of the
previous calendar quarter is greater than or equal to 130% of the
Conversion Price on such last Trading Day and (B) at any time on or
after April 1, 2029 if the Last Reported Sale Price for the Common
Stock on any date on or after March 31, 2029 is greater than or equal
to 130% of the Conversion Price;
(ii) in the event that the Company calls any or all of the
Debentures for redemption, at any time prior to the close of business
on the second Business Day immediately preceding the Redemption Date
(unless the Company fails to pay the Redemption Price); provided that
only those Debentures that are called for redemption may be converted
following such an event;
(iii) during the five (5) Business Day period after any
five (5) consecutive Trading Day period in which the Trading Price per
Debenture, as determined following a request by a holder in accordance
with the procedures described below, for each day of that period is
less than 98% of the product of the Conversion Rate and the Last
Reported Sale Price of the Common Stock for each day during such
period; provided that if, on the date of any conversion pursuant to
this Section 15.01(a)(iii) that is on or after May 15, 2029, the Last
Reported Sale Price of the Common Stock is greater than the Conversion
Price but less than 130% of the Conversion Price, then holders of
Debentures surrendered for conversion will receive, in lieu of Common
Stock based on the Conversion Rate, an amount in cash equal to the
principal amount of the Debentures converted, plus accrued and unpaid
Interest, to the Conversion Date;
(iv) as provided in Section (b) of this Section 15.01; or
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(v) (A) if the Company obtains a credit rating for the
Debentures from both Xxxxx'x Investors Service, Inc. ("MOODY'S") and
Standard & Poor's Ratings Services ("STANDARD & POOR'S"), then at any
time when (1) the long-term credit rating assigned to the Debentures by
Moody's or Standard & Poor's is two or more levels below the credit
rating initially assigned to the Debentures; (2) both Moody's and
Standard & Poor's have discontinued, withdrawn or suspended their
ratings with respect to the Debentures; or (3) either Moody's or
Standard & Poor's has discontinued, withdrawn or suspended its rating
with respect to the Debentures and the remaining rating is two or more
levels below the credit rating initially assigned to the Debentures
(references to Moody's and Standard & Poor's include any successors to
those entities); or
(B) if the Company obtains a credit rating for the
Debentures from only one of Moody's and Standard & Poor's, then at any
time when (1) the long-term credit rating assigned to the Debentures by
such rating agency two or more levels below the credit rating initially
assigned to the Debentures; or (2) such rating agency has discontinued,
withdrawn or suspended its rating of the Debentures;
provided, however, that nothing in this Indenture shall obligate the Company to
obtain a credit rating for the Debentures and the provisions of this clause (v)
shall only apply with respect to any credit rating that the Company shall have
requested from Moody's or Standard & Poor's.
In connection with any conversion pursuant to Section 15.01(a)(iii),
the Trustee shall have no obligation to obtain the bids necessary for the
Company to determine the Trading Price of the Debentures unless the Company has
requested it to do so, and the Company shall have no obligation to make such
request unless a holder provides the Company with reasonable evidence that the
Trading Price per Debenture is less than 98% of the product of the Last Reported
Sale Price of the Common Stock and the Conversion Rate. At such time, the
Company will instruct the Trustee to obtain the bids (in the manner described in
the definition of Trading Price) beginning on the next Trading Day and on each
successive Trading Day until the Trading Price per Debenture is greater than or
equal to 98% of the product of the Last Reported Sale Price of the Common Stock
and the Conversion Rate.
The Company or its designated agent shall determine on a daily basis
during the time period specified in Section 15.01(a)(i) and 15.01(a)(iii)
whether the Debentures shall be convertible as a result of the occurrence of an
event specified in clause (i) or (iii) above and, if the Debentures shall be so
convertible, the Company shall promptly deliver to the Trustee (or other
Conversion Agent appointed by the Company) written notice thereof. Whenever the
Debentures shall become convertible pursuant to this Section 15.01, the Company
or, at the Company's request, the Trustee in the name and at the expense of the
Company, shall notify the holders of the event triggering such convertibility in
the manner provided in Section 16.03, and the Company shall also publicly
announce such information by publication on the Company's Web site or through
such other public medium as it may use at such time. Any notice so given shall
be conclusively presumed to have been duly given, whether or not the holder
receives such notice.
The Trustee shall be entitled at its sole discretion to consult with
the Company and to request the assistance of the Company in connection with the
Trustee's duties and obligations pursuant to Section 15.01(a) hereof, and the
Company agrees, if requested by the Trustee, to
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cooperate with, and provide assistance to, the Trustee in carrying out its
duties under this Section 15.01; provided, however, that nothing herein shall be
construed to relieve the Trustee of its duties pursuant to Section 15.01(a)
hereof.
(b) In addition, if:
(i) (A) the Company distributes to all holders of Common
Stock rights or warrants entitling them to subscribe for or purchase
(for a period expiring within 45 days of the date of the distribution)
shares of Common Stock at less than the Last Reported Sale Price of the
Common Stock on the Trading Day immediately preceding the declaration
date of the distribution, or (B) the Company distributes to all holders
of Common Stock assets, debt securities or rights to purchase
securities of the Company, which distribution has a per share value as
determined by the Board of Directors and set forth in a Board
Resolution exceeding 5% of the Last Reported Sale Price of the Common
Stock on the Trading Day immediately preceding the declaration date for
such distribution, then, in either case, the Debentures may be
surrendered for conversion at any time on and after the date that the
Company gives notice to the holders of such distribution, which shall
be not less than 20 Business Days prior to the Ex-Dividend Date for
such distribution, until the earlier of the close of business on the
Business Day immediately preceding, but not including, the Ex-Dividend
Date or the date the Company publicly announces that such distribution
will not take place; provided that no holder may exercise this right to
convert if the holder will otherwise participate in such distribution
without conversion; and
(ii) the Company consolidates with or merges with or into
another Person or is a party to a binding share exchange, in each case
pursuant to which the Common Stock is converted into cash or property
other than securities, then the Debentures may be surrendered for
conversion at any time from and after the date which is fifteen (15)
days prior to the anticipated effective date of the transaction until
and including the date which is fifteen (15) days after the actual
effective date of the transaction. The Board of Directors shall
determine the anticipated effective date of the transaction, and such
determination shall be conclusive and binding on the holders and shall
be publicly announced by the Company by publication on its Web site or
through such other public medium as it may use at that time not later
than two (2) Business Days prior to such 15th day.
(c) A Debenture in respect of which a holder is electing to
exercise its option to require repurchase upon a Fundamental Change pursuant to
Section 3.05 or repurchase pursuant to Section 3.06 may be converted only if
such holder withdraws its election in accordance with Section 3.08(d). A holder
of Debentures is not entitled to any rights of a holder of Common Stock until
such holder has converted his Debentures to Common Stock, and only to the extent
such Debentures are deemed to have been converted to Common Stock under this
Article 15.
Section 15.02. Exercise of Conversion Privilege; Issuance of Common
Stock on Conversion; No Adjustment for Interest or Dividends. In order to
exercise the conversion privilege with respect to any Debenture in certificated
form, the Company must receive at the office or agency of the Company maintained
for that purpose or, at the option of such holder, the Corporate Trust Office,
such Debenture with the original or facsimile of the form entitled "Form of
Conversion Notice" on the reverse thereof, duly completed and manually signed,
together with
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such Debentures duly endorsed for transfer, accompanied by the funds, if any,
required by this Section 15.02. Such notice shall also state the name or names
(with address or addresses) in which the certificate or certificates for shares
of Common Stock which shall be issuable on such conversion shall be issued, and
shall be accompanied by transfer or similar taxes, if required pursuant to
Section 15.07.
In order to exercise the conversion privilege with respect to any
interest in a Global Debenture, the beneficial holder must complete, or cause to
be completed, the appropriate instruction form for conversion pursuant to the
Depositary's book-entry conversion program, deliver, or cause to be delivered,
by book-entry delivery an interest in such Global Debenture, furnish appropriate
endorsements and transfer documents if required by the Company or the Trustee or
Conversion Agent, and pay the funds, if any, required by this Section 15.02 and
any transfer taxes if required pursuant to Section 15.07.
As promptly as practicable after satisfaction of the requirements for
conversion set forth above, subject to compliance with any restrictions on
transfer if shares issuable on conversion are to be issued in a name other than
that of the Debentureholder (as if such transfer were a transfer of the
Debenture or Debentures (or portion thereof) so converted), the Company shall
issue and shall deliver to such Debentureholder at the office or agency
maintained by the Company for such purpose pursuant to Section 5.02, a
certificate or certificates for the number of full shares of Common Stock
issuable upon the conversion of such Debenture or portion thereof as determined
by the Company in accordance with the provisions of this Article 15 and a check
or cash in respect of any fractional interest in respect of a share of Common
Stock arising upon such conversion, calculated by the Company as provided in
Section 15.03. In case any Debenture of a denomination greater than $1,000 shall
be surrendered for partial conversion, and subject to Section 2.03, the Company
shall execute and the Trustee shall authenticate and deliver to the holder of
the Debenture so surrendered, without charge to him, a new Debenture or
Debentures in authorized denominations in an aggregate principal amount equal to
the unconverted portion of the surrendered Debenture.
Each conversion shall be deemed to have been effected as to any such
Debenture (or portion thereof) on the date on which the requirements set forth
above in this Section 15.02 have been satisfied as to such Debenture (or portion
thereof) (such date, the "CONVERSION DATE"), and the Person in whose name any
certificate or certificates for shares of Common Stock shall be issuable upon
such conversion shall be deemed to have become on said date the holder of record
of the shares represented thereby; provided that any such surrender on any date
when the stock transfer books of the Company shall be closed shall constitute
the Person in whose name the certificates are to be issued as the record holder
thereof for all purposes on the next succeeding day on which such stock transfer
books are open, but such conversion shall be at the Conversion Rate in effect on
the date upon which such Debenture shall be surrendered.
Any Debenture or portion thereof surrendered for conversion during the
period from the close of business on any Regular Record Date to the opening of
business on the immediately following Interest Payment Date shall be accompanied
by payment, in immediately available funds or other funds acceptable to the
Company, of an amount equal to the Interest otherwise payable on such Interest
Payment Date on the principal amount being converted; provided that no such
payment need be made (1) if the Company has specified a Redemption Date that is
after a
65
Regular Record Date and prior to the next Interest Payment Date, (2) if the
Company has specified a Repurchase Date following a Fundamental Change that is
after a Regular Record Date and on or prior to the next Interest Payment Date or
(3) to the extent of any overdue Interest, if any overdue Interest exists at the
time of conversion with respect to such Debenture. Except as provided above in
this Section 15.02, no payment or other adjustment shall be made for Interest
accrued on any Debenture converted or for dividends on any shares issued upon
the conversion of such Debenture as provided in this Article 15.
Upon the conversion of an interest in a Global Debenture, the Trustee
(or other Conversion Agent appointed by the Company), or the Custodian at the
direction of the Trustee (or other Conversion Agent appointed by the Company),
shall make a notation on such Global Debenture as to the reduction in the
principal amount represented thereby. The Company shall notify the Trustee in
writing of any conversions of Debentures effected through any Conversion Agent
other than the Trustee.
Upon the conversion of a Debenture, that portion of the accrued but
unpaid Interest with respect to the converted Debenture shall not be cancelled,
extinguished or forfeited, but rather shall be deemed to be paid in full to the
holder thereof through delivery of the Common Stock (together with the cash
payment, if any in lieu of fractional shares) in exchange for the Debenture
being converted pursuant to the provisions hereof; and the fair market value of
such shares of Common Stock (together with any such cash payment in lieu of
fractional shares) shall be treated as issued, to the extent thereof, first in
exchange for and in satisfaction of the Company's obligation to pay the
principal amount of the converted Debenture and the accrued but unpaid Interest,
and the balance, if any, of such fair market value of such Common Stock (and any
such cash payment) shall be treated as issued in exchange for and in
satisfaction of the right to convert the Debenture being converted pursuant to
the provisions hereof.
Section 15.03. Payment upon Conversion; Cash Payments in Lieu of
Fractional Shares. (a) In the event that the Company receives notice of
conversion on or prior to the day that is twenty (20) days prior to Stated
Maturity or, with respect to Debentures being redeemed, the applicable
Redemption Date (the "FINAL NOTICE DATE"), the following procedures will apply:
If the Company chooses to satisfy all or any portion of the Company's
obligation (the "CONVERSION OBLIGATION") in cash, the Company will notify the
holder through the Trustee of the dollar amount to be satisfied in cash (which
must be expressed either as 100% of the Conversion Obligation or as a fixed
dollar amount) at any time on or before the date that is two Business Days
following receipt of the notice of conversion ("CASH SETTLEMENT NOTICE PERIOD").
If the Company timely elects to pay cash for any portion of the shares otherwise
issuable to such holder, the conversion notice may be retracted by the holder at
any time during the two Business Day period beginning on the day after the final
day of the Cash Settlement Notice Period ("CONVERSION RETRACTION PERIOD"); no
such retraction can be made (and a conversion notice shall be irrevocable) if
the Company does not elect to deliver cash in lieu of shares (other than cash in
lieu of fractional shares). If the conversion notice has not been retracted,
then settlement (in cash and/or shares) will occur on the Business Day following
the final day of the ten (10) Trading Day period beginning on the day after the
final day of the Conversion Retraction Period. Settlement amounts will be
computed as follows:
66
(i) If the Company elects to satisfy the entire
Conversion Obligation in shares, the Company will deliver to holders
surrendering Debentures for conversion a number of shares equal to (1)
the aggregate original principal amount of Debentures to be converted
divided by 1,000 multiplied by (2) the Conversion Rate.
(ii) If the Company elects to satisfy the entire
Conversion Obligation in cash, the Company will deliver to holders
surrendering Debentures for conversion cash in an amount equal to the
product of:
(A) a number equal to (1) the aggregate original
principal amount of Debentures to be converted divided by
1,000 multiplied by (2) the Conversion Rate and
(B) the average of the Last Reported Sale Prices
of the Common Stock for the ten (10) consecutive Trading Days
immediately following the date of the Company's notice of its
election to deliver cash (the "CASH SETTLEMENT AVERAGING
PERIOD").
(C) If the Company elects to satisfy in cash a
fixed portion of the Conversion Obligation other than the
entire obligation, or a percentage of the Conversion
Obligation other than 100%, the Company will deliver to
holders surrendering Debentures for conversion such cash
amount ("CASH AMOUNT") and a number of shares equal to the
excess, if any, of the number of shares equal to (i) the
aggregate original principal amount of Debentures to be
converted divided by 1,000, multiplied by (ii) the Conversion
Rate, over the number of shares equal to the sum, for each day
of the Cash Settlement Averaging Period, of (x) 10% of the
Cash Amount, divided by (y) the Last Reported Sale Price of
the Common Stock. In addition, the Company will pay cash for
all fractional shares of Common Stock as described above.
(b) In the event that the Company receives notice of conversion
after the Final Notice Date, the Company will not send individual notices of its
election to satisfy all or any portion of the Conversion Obligation in cash.
Instead, if the Company chooses to satisfy all or any portion of the Conversion
Obligation in cash, the Company will send a single notice to the Trustee of the
dollar amount to be satisfied in cash (which must be expressed either as 100% of
the Conversion Obligation or as a fixed dollar amount) at any time on or before
the Final Notice Date. Settlement amounts will be computed and settlement dates
will be determined in the same manner as set forth under Section 15.03(a) above
except that the "Cash Settlement Averaging Period" shall be the five consecutive
Trading Days ending on the third Trading Day prior to the Conversion Date.
Settlement (in cash and/or shares) will occur on the Business Day following the
final day of such Cash Settlement Averaging Period.
(c) No fractional shares of Common Stock or scrip certificates
representing fractional shares shall be issued upon conversion of Debentures. If
more than one Debenture shall be surrendered for conversion at one time by the
same holder, the number of full shares that shall be issuable upon conversion
shall be computed on the basis of the aggregate principal amount of the
Debentures (or specified portions thereof to the extent permitted hereby) so
surrendered. If any
67
fractional share of stock would be issuable upon the conversion of any Debenture
or Debentures, the Company shall make an adjustment and payment therefor in cash
to the holder of Debentures at the Last Reported Sale Price on the last Trading
Day immediately preceding the day on which the Debentures (or specified portions
thereof) are deemed to have been converted.
(d) Notwithstanding anything to the contrary in this Indenture, at
any time prior to Stated Maturity, the Company may irrevocably elect, in its
sole discretion without the consent of the holders of the Debentures, by notice
to the Trustee and the holders of the Debentures to satisfy in cash 100% of the
principal amount of the Debentures converted after the date of such election.
After making such an election, the Company still may satisfy the remainder of
the Conversion Obligation to the extent it exceeds the principal amount in cash
or Common Stock or a combination of cash and Common Stock. If the Company
chooses to satisfy all or a portion of the remainder of the Conversion
Obligation in cash, the Company will provide notice of such election in the same
manner as set forth above under either clause (a) or (b), whichever is
applicable. If the Company chooses to satisfy all of the remainder of the
Conversion Obligation in Common Stock, notice of the election to deliver cash
for the principal amount will be deemed to have been provided on the last date
of the Cash Settlement Notice Period and the notice of conversion will not be
retractable. Settlement amounts will be computed and settlement dates will be
determined in the same manner as set forth above under clause (a) or (b), as
applicable.
Section 15.04. Conversion Rate. Each $1,000 principal amount of the
Debentures shall be convertible into the number of shares of Common Stock
specified in the form of Debenture (herein called the "CONVERSION RATE")
attached as Exhibit A hereto (initially 56.5099 shares), subject to adjustment
as provided in this Article 15.
Section 15.05. Adjustment of Conversion Rate. The Conversion Rate
shall be adjusted from time to time by the Company as follows:
(a) If the Company issues shares of Common Stock as a
dividend or distribution on shares of the Common Stock, or effects a
share split or share combination, the Conversion Rate will be adjusted
based on the following formula:
OS'
CR' = CR(0) x ----
OS(0)
where
CR(0) = the Conversion Rate in effect immediately prior to
such event
CR' = the Conversion Rate in effect immediately after such
event
OS(0) = the number of shares of Common Stock outstanding
immediately prior to such event
OS' = the number of shares of Common Stock outstanding
immediately after such event.
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Such adjustment shall become effective immediately after the opening of
business on the Business Day following the date fixed for such
determination. The Company will not pay any dividend or make any
distribution on shares of Common Stock held in treasury by the Company.
If any dividend or distribution of the type described in this Section
15.05(a) is declared but not so paid or made, the Conversion Rate shall
again be adjusted to the Conversion Rate that would then be in effect
if such dividend or distribution had not been declared.
(b) If the Company issues to all or substantially all
holders of its Common Stock any rights or warrants entitling them for a
period of not more than 45 days to subscribe for or purchase shares of
Common Stock, or securities convertible into shares of Common Stock, at
a price per share or a conversion price per share less than the sale
price of shares of Common Stock on the Business Day immediately
preceding the time of announcement of such issuance, the Conversion
Rate will be adjusted based on the following formula (provided that the
Conversion Rate will be readjusted to the extent that such rights or
warrants are not exercised prior to their expiration):
OS(0) + X
CR' = CR(0) x ----------
OS(0) + Y
where
CR(0) = the Conversion Rate in effect immediately prior to
such event
CR' = the Conversion Rate in effect immediately after such
event
OS(0) = the number of shares of Common Stock outstanding
immediately prior to such event
X = the total number of shares of Common Stock issuable
pursuant to such rights
Y = the number of shares of Common Stock equal to the
aggregate price payable to exercise such rights
divided by the average of the Last Reported Sale
Prices of Common Stock for the ten consecutive
Trading Days prior to the Business Day immediately
preceding the Record Date for the issuance of such
rights.
Such adjustment shall be successively made whenever any such rights or
warrants are issued and shall become effective immediately after the
opening of business on the Business Day following the date fixed for
such determination. The Company shall not issue any such rights,
options or warrants in respect of shares of Common Stock held in
treasury by the Company. To the extent that shares of Common Stock are
not delivered after the expiration of such rights or warrants, the
Conversion Rate shall be readjusted to the Conversion Rate that would
then be in effect had the adjustments made upon the issuance of such
rights or warrants been made on the basis of delivery of only the
number of shares of Common Stock actually delivered. If such rights or
warrants are not so issued,
69
the Conversion Rate shall again be adjusted to be the Conversion Rate
that would then be in effect if such date fixed for the determination
of shareholders entitled to receive such rights or warrants had not
been fixed.
In determining whether any rights or warrants entitle the holders to
subscribe for or purchase shares of Common Stock at less than such
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 by the Company for such rights or warrants and
any amount payable on exercise or conversion thereof, the value of such
consideration, if other than cash, to be determined by the Board of
Directors.
(c) If the Company distributes shares of its capital
stock, evidences of its indebtedness or other assets or property of the
Company to all or substantially all holders of the Common Stock,
excluding:
(i) dividends, distributions and rights or
warrants referred to in clause (a) or (b) above; and
(ii) dividends or distributions paid exclusively
in cash;
then the Conversion Rate will be adjusted based on the following
formula:
SP(0)
CR' = CR(0) x -----------
SP(0) - FMV
where
CR(0) = the Conversion Rate in effect immediately prior to
such distribution
CR' = the Conversion Rate in effect immediately after such
distribution
SP(0) = the average of the Last Reported Sale Prices of the
Common Stock for the ten days prior to the Business
Day immediately preceding the record date for such
distribution
FMV = the fair market value (as determined on the
Ex-Dividend Date by the Board of Directors) of the
shares of capital stock, evidences of indebtedness,
assets or property distributed with respect to each
outstanding share of Common Stock on the Record Date
for such distribution.
Such adjustment shall become effective immediately prior to the opening
of business on the Business Day following the date fixed for the
determination of shareholders entitled to receive such distribution.
With respect to an adjustment pursuant to this clause (c) where there
has been a payment of a dividend or other distribution on the Common
Stock or shares of capital stock of any class or series, or similar
equity interest, of or relating to a subsidiary or other business
70
unit (a "SPIN-OFF") the Conversion Rate in effect immediately before
the close of business on the Record Date fixed for determination of
shareholders entitled to receive the distribution will be increased
based on the following formula:
FMV(0) + MP(0)
CR' = CR(0) x --------------
MP(0)
where
CR(0) = the Conversion Rate in effect immediately prior to
such distribution
CR' = the Conversion Rate in effect immediately after such
distribution
FMV(0) = the average of the Last Reported Sale Prices of the
capital stock or similar equity interest distributed
to holders of Common Stock applicable to one share of
Common Stock over the first 10 Trading Days after the
effective date of the Spin-Off
MP(0) = the average of the Last Reported Sale Prices of
Common Stock over the first 10 consecutive Trading
Days after the effective date of the Spin-Off.
Such adjustment shall occur on the tenth Trading Day from, and
including, the effective date of the Spin-Off.
(d) If the Company makes any cash dividend or
distribution during any quarterly fiscal period to all or substantially
all holders of Common Stock, the Conversion Rate will be adjusted based
on the following formula:
SP(0)
CR' = CR(0) x ---------
SP(0) - C
where
CR(0) = the Conversion Rate in effect immediately prior to
the Ex-Dividend Date for such distribution
CR' = the Conversion Rate in effect immediately after the
Record Date for such distribution
SP(0) = the average of the Last Reported Sale Prices of the
Common Stock for the ten consecutive Trading Days
prior to the Business Day immediately preceding the
Ex-Dividend Date of such distribution
C = the amount in cash per share the Company distributes
to holders of Common Stock.
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Such adjustment shall become effective immediately after the close of
business on the date for such determination.
(e) If the Company or any of its Subsidiaries purchases
shares of the Common Stock pursuant to a tender or exchange offer which
involves an aggregate per share consideration that exceeds the Last
Reported Sale Price of the Common Stock on the Trading Day next
succeeding the last date on which tenders or exchanges may be made
pursuant to such tender or exchange offer, the Conversion Rate will be
increased based on the following formula:
AC + (SP'x OS')
CR' = CR(0) x --------------
OS(0) x SP'
where
CR(0) = the Conversion Rate in effect on the date such tender
offer expires
CR' = the Conversion Rate in effect on the day next
succeeding the date such tender offer expires
AC = the aggregate value of all cash and any other
consideration (as determined by the Board of
Directors) paid or payable for shares purchased in
such tender offer
OS(0) = the number of shares of Common Stock outstanding
immediately prior to the date such tender offer
expires
OS' = the number of shares of Common Stock outstanding
immediately after the date such tender offer expires
SP' = the average of the Last Reported Sale Prices of
Common Stock for the ten consecutive trading days
commencing on the Trading Day next succeeding the
date such tender offer expires.
If the Company is obligated to purchase shares pursuant to any such
tender or exchange offer, but the Company is permanently prevented by
applicable law from effecting any such purchases or all such purchases
are rescinded, the Conversion Rate shall again be adjusted to be the
Conversion Rate that would then be in effect if such tender or exchange
offer had not been made.
If, however, the application of the foregoing formula would result in a
decrease in the Conversion Rate, no adjustment to the Conversion Rate
will be made.
Except as stated herein, the Company will not adjust the Conversion
Rate for the issuance of shares of Common Stock or any securities
convertible into or exchangeable for shares of Common Stock or the
right to purchase shares of Common Stock or such convertible or
exchangeable securities.
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(f) [Reserved]
(g) Notwithstanding the foregoing provisions of this
Section 15.05, no adjustment shall be made thereunder, nor shall an
adjustment be made to the ability of a Holder of a Debenture to
convert, for any distribution described therein if the Holder will
otherwise participate in the distribution without conversion of such
Holder's Debentures.
(h) The Company may (but is not required to) make such
increases in the Conversion Rate, in addition to those required by
clauses (a) through (e) of this Section 15.05 as the Board of Directors
considers to be advisable to avoid or diminish any income tax to
holders of Common Stock or rights to purchase Common Stock in
connection with a dividend or distribution of shares (or rights to
acquire shares) or any similar event treated as such for income tax
purposes.
To the extent permitted by applicable law and the Nasdaq
Marketplace Rules, the Company from time to time may increase the
Conversion Rate by any amount for any period of at least twenty (20)
days if the Board of Directors shall have made a determination that
such increase would be in the best interests of the Company, which
determination shall be conclusive. Whenever the Conversion Rate is
increased pursuant to the preceding sentence, the Company shall mail to
holders of record of the Debentures a notice of the increase at least
fifteen (15) days prior to the date the increased Conversion Rate takes
effect, and such notice shall state the increased Conversion Rate and
the period during which it will be in effect.
(i) No adjustment to the Conversion Rate need be made:
(i) upon the issuance of any shares of Common
Stock pursuant to any present or future plan providing for the
reinvestment of dividends or interest payable on securities of
the Company and the investment of additional optional amounts
in shares of Common Stock under any plan;
(ii) upon the issuance of any shares of Common
Stock or options or rights to purchase those shares pursuant
to any present or future employee, director or consultant
benefit plan or program of or assumed by the Company or any of
its Subsidiaries;
(iii) upon the issuance of any shares of Common
Stock pursuant to any option, warrant, right, or exercisable,
exchangeable or convertible security not described in (ii)
above and outstanding as of the date the Debentures were first
issued;
(iv) for a change in the par value of the Common
Stock; or
(v) for accrued and unpaid Interest.
To the extent the Debentures become convertible into cash,
assets or property (other than capital stock of the Company or
securities to which Section 15.06 applies), no
73
adjustment shall be made thereafter as to the cash, assets or property.
Interest shall not accrue on such cash, assets or property.
(j) All calculations under this Article 15 shall be made
by the Company and shall be made to the nearest cent or to the nearest
one-ten thousandth (1/10,000) of a share, as the case may be.
(k) Whenever the Conversion Rate is adjusted as herein
provided, the Company shall promptly file with the Trustee and any
Conversion Agent other than the Trustee an Officers' Certificate
setting forth the Conversion Rate after such adjustment and setting
forth a brief statement of the facts requiring such adjustment. Unless
and until a Responsible Officer of the Trustee shall have received such
Officers' Certificate, the Trustee shall not be deemed to have
knowledge of any adjustment of the Conversion Rate and may assume that
the last Conversion Rate of which it has knowledge is still in effect.
Promptly after delivery of such certificate, the Company shall prepare
a notice of such adjustment of the Conversion Rate setting forth the
adjusted Conversion Rate and the date on which each adjustment becomes
effective and shall mail such notice of such adjustment of the
Conversion Rate to the holder of each Debenture at his last address
appearing on the Debenture Register provided for in Section 2.05 of
this Indenture, within twenty (20) days after execution thereof.
Failure to deliver such notice shall not affect the legality or
validity of any such adjustment.
(l) In any case in which this Section 15.05 provides that
an adjustment shall become effective immediately after (1) a record
date or Stock Record Date for an event, (2) the date fixed for the
determination of shareholders entitled to receive a dividend or
distribution pursuant to Section 15.05(a), (3) a date fixed for the
determination of shareholders entitled to receive rights or warrants
pursuant to Section 15.05(b) or (4) the Expiration Time for any tender
or exchange offer pursuant to Section 15.05(e), the Company may elect
to defer until the occurrence of the applicable Adjustment Event (as
hereinafter defined) (x) issuing to the holder of any Debenture
converted after such determination date and before the occurrence of
such Adjustment Event, the additional shares of Common Stock or other
securities issuable upon such conversion by reason of the adjustment
required by such Adjustment Event over and above the Common Stock
issuable upon such conversion before giving effect to such adjustment
and (y) paying to such holder any amount in cash in lieu of any
fraction pursuant to Section 15.03. For purposes of this Section
15.05(l), the term "ADJUSTMENT EVENT" shall mean:
(i) in any case referred to in clause (1)
hereof, the occurrence of such event,
(ii) in any case referred to in clause (2)
hereof, the date any such dividend or distribution is paid or
made,
(iii) in any case referred to in clause (3)
hereof, the date of expiration of such rights or warrants, and
74
(iv) in any case referred to in clause (4)
hereof, the date a sale or exchange of Common Stock pursuant
to such tender or exchange offer is consummated and becomes
irrevocable.
(m) For purposes of this Section 15.05, the number of
shares of Common Stock at any time outstanding shall not include shares
held in the treasury of the Company but shall include shares issuable
in respect of scrip certificates issued in lieu of fractions of shares
of Common Stock. The Company will not pay any dividend or make any
distribution on shares of Common Stock held in the treasury of the
Company.
Section 15.06. Effect of Reclassification, Consolidation, Merger or
Sale. If any of the following events occur, namely (i) any reclassification or
change of the outstanding shares of Common Stock (other than a subdivision or
combination to which Section 15.05(c) applies), (ii) any consolidation, merger,
binding share exchange or combination of the Company with another Person as a
result of which holders of Common Stock shall be entitled to receive cash,
securities or other property with respect to or in exchange for such Common
Stock, or (iii) any sale or conveyance of all or substantially all of the
properties and assets of the Company to any other Person as a result of which
holders of Common Stock shall be entitled to receive cash, securities or other
property with respect to or in exchange for such Common Stock, then the Company
or the successor or purchasing Person, as the case may be, shall execute with
the Trustee a supplemental indenture (which shall comply with the Trust
Indenture Act as in force at the date of execution of such supplemental
indenture) providing that each Debenture shall be convertible into the kind and
amount of cash, securities or other property receivable upon such
reclassification, change, consolidation, merger, binding share exchange,
combination, sale or conveyance by a holder of a number of shares of Common
Stock issuable upon conversion of such Debentures (assuming, for such purposes,
a sufficient number of authorized shares of Common Stock are available to
convert all such Debentures) immediately prior to such reclassification, change,
consolidation, merger, binding share exchange, combination, sale or conveyance
assuming such holder of Common Stock did not exercise his rights of election, if
any, as to the kind or amount of cash, securities or other property receivable
upon such reclassification, change, consolidation, merger, binding share
exchange, combination, sale or conveyance (provided that, if the kind or amount
of cash, securities or other property receivable upon such reclassification,
change, consolidation, merger, binding share exchange, combination, sale or
conveyance is not the same for each share of Common Stock in respect of which
such rights of election shall not have been exercised ("NON-ELECTING SHARE"),
then for the purposes of this Section 15.06 the kind and amount of cash,
securities or other property receivable upon such reclassification, change,
consolidation, merger, binding share exchange, combination, sale or conveyance
for each non-electing share shall be deemed to be the kind and amount so
receivable per share by a plurality of the non-electing shares). Such
supplemental indenture shall provide for adjustments which shall be as nearly
equivalent as may be practicable to the adjustments provided for in this Article
15.
The Company shall cause notice of the execution of such supplemental
indenture to be mailed to each holder of Debentures, at its address appearing on
the Debenture Register provided for in Section 2.05 of this Indenture, within
twenty (20) days after execution thereof. Failure to deliver such notice shall
not affect the legality or validity of such supplemental indenture.
75
The above provisions of this Section shall similarly apply to
successive reclassifications, changes, consolidations, mergers, binding share
exchanges, combinations, sales and conveyances.
If this Section 15.06 applies to any event or occurrence, Section 15.05
shall not apply.
Section 15.07. Taxes on Shares Issued. The issue of stock
certificates on conversions of Debentures shall be made without charge to the
converting Debentureholder for any documentary, stamp or similar issue or
transfer tax in respect of the issue thereof. The Company shall not, however, be
required to pay any such tax which may be payable in respect of any transfer
involved in the issue and delivery of stock in any name other than that of the
holder of any Debenture converted, and the Company shall not be required to
issue or deliver any such stock certificate unless and until the Person or
Persons requesting the issue thereof shall have paid to the Company the amount
of such tax or shall have established to the satisfaction of the Company that
such tax has been paid.
Section 15.08. Reservation of Shares, Shares to Be Fully Paid;
Compliance with Governmental Requirements; Listing of Common Stock. The Company
shall provide, free from preemptive rights, out of its authorized but unissued
shares or shares held in treasury, sufficient shares of Common Stock to provide
for the conversion of the Debentures from time to time as such Debentures are
presented for conversion.
Before taking any action which would cause an adjustment increasing the
Conversion Rate to an amount that would cause the Conversion Price to be reduced
below the then par value, if any, of the shares of Common Stock issuable upon
conversion of the Debentures, the Company will take all corporate action which
may, in the opinion of its counsel, be necessary in order that the Company may
validly and legally issue shares of such Common Stock at such adjusted
Conversion Rate.
The Company covenants that all shares of Common Stock which may be
issued upon conversion of Debentures will upon issue be fully paid and
non-assessable by the Company and free from all taxes, liens and charges with
respect to the issue thereof.
The Company covenants that, if any shares of Common Stock to be
provided for the purpose of conversion of Debentures hereunder require
registration with or approval of any governmental authority under any federal or
state law before such shares may be validly issued upon conversion, the Company
will in good faith and as expeditiously as possible, to the extent then
permitted by the rules and interpretations of the Commission (or any successor
thereto), endeavor to secure such registration or approval, as the case may be.
The Company further covenants that, if at any time the Common Stock
shall be listed on the New York Stock Exchange, Nasdaq Stock Market or any other
national securities exchange or automated quotation system, the Company will, if
permitted by the rules of such exchange or automated quotation system, list and
keep listed, so long as the Common Stock shall be so listed on such exchange or
automated quotation system, all Common Stock issuable upon conversion of the
Debentures; provided that if the rules of such exchange or automated quotation
system permit the Company to defer the listing of such Common Stock until the
first conversion of the
76
Debentures into Common Stock in accordance with the provisions of this
Indenture, the Company covenants to list such Common Stock issuable upon
conversion of the Debentures in accordance with the requirements of such
exchange or automated quotation system at such time.
Section 15.09. Responsibility of Trustee. The Trustee and any other
Conversion Agent shall not at any time be under any duty or responsibility to
the Company or any holder of Debentures to determine the Conversion Rate or
whether any facts exist which may require any adjustment of the Conversion Rate,
or with respect to the nature or extent or calculation of any such adjustment
when made, or with respect to the method employed, or herein or in any
supplemental indenture provided to be employed, in making the same. The Trustee
and any other Conversion Agent shall not be accountable with respect to the
validity or value (or the kind or amount) of any shares of Common Stock, or of
any securities or property, which may at any time be issued or delivered upon
the conversion of any Debenture; and the Trustee and any other Conversion Agent
make no representations with respect thereto. Neither the Trustee nor any
Conversion Agent shall be responsible for any failure of the Company to issue,
transfer or deliver any shares of Common Stock or stock certificates or other
securities or property or cash upon the surrender of any Debenture for the
purpose of conversion or to comply with any of the duties, responsibilities or
covenants of the Company contained in this Article 15. Without limiting the
generality of the foregoing, neither the Trustee nor any Conversion Agent shall
be under any responsibility to determine the correctness of any provisions
contained in any supplemental indenture entered into pursuant to Section 15.06
relating either to the kind or amount of shares of stock or securities or
property (including cash) receivable by Debentureholders upon the conversion of
their Debentures after any event referred to in such Section 15.06 or to any
adjustment to be made with respect thereto, but, subject to the provisions of
Section 8.01, may accept as conclusive evidence of the correctness of any such
provisions, and shall be protected in relying upon, the Officers' Certificate
(which the Company shall be obligated to file with the Trustee prior to the
execution of any such supplemental indenture) with respect thereto.
Section 15.10. Notice to Holders Prior to Certain Actions. In case:
(a) the Company shall declare a dividend (or any other
distribution) on its Common Stock that would require an adjustment in
the Conversion Rate pursuant to Section 15.05; or
(b) the Company shall authorize the granting to the
holders of all or substantially all of its Common Stock of rights or
warrants to subscribe for or purchase any share of any class or any
other rights or warrants; or
(c) of any reclassification or reorganization of the
Common Stock of the Company (other than a subdivision or combination of
its outstanding Common Stock, or a change in par value, or from par
value to no par value, or from no par value to par value), or of any
consolidation or merger to which the Company is a 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;
77
the Company shall cause to be filed with the Trustee and to be mailed to each
holder of Debentures at his address appearing on the Debenture Register provided
for in Section 2.05 of this Indenture, as promptly as possible but in any event
at least ten (10) days prior to the applicable date hereinafter specified, a
notice stating (x) the date on which a record is to be taken for the purpose of
such dividend, distribution or rights or warrants, or, if a record is not to be
taken, the date as of which the holders of Common Stock of record to be entitled
to such dividend, distribution or rights are to be determined, or (y) the date
on which such reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding up is expected to become effective or occur,
and the date as of which it is expected that holders of Common Stock of record
shall be entitled to exchange their Common Stock for securities or other
property deliverable upon such reclassification, consolidation, merger, sale,
transfer, dissolution, liquidation or winding up. Failure to give such notice,
or any defect therein, shall not affect the legality or validity of such
dividend, distribution, reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding up.
Section 15.11. Shareholders. If the rights provided for in the
Company's existing rights plan or any amended or future rights plan adopted by
the Company have separated from the shares of Common Stock in accordance with
the provisions of the applicable shareholder rights agreement so that the
holders of the Debentures would not be entitled to receive any rights in respect
of Common Stock issuable upon conversion of the Debentures, the conversion rate
will be adjusted as if the Company distributed to all holders of Common Stock
shares of the Company's capital stock, evidences of indebtedness or assets
(including securities but excluding rights or warrants to purchase Common Stock
issued to all holders of Common Stock, Common Stock issued as a dividend or
distribution on Common Stock and cash distributions), subject to readjustment
upon the subsequent expiration, termination or redemption of the rights. In lieu
of any such adjustment, the Company may amend such applicable shareholder rights
agreement to provide that upon conversion of the debentures the holders will
receive, in addition to the Common Stock issuable upon such conversion, the
rights which would have attached to such Common Stock if the rights had not
become separated from the Common Stock under such applicable shareholder rights
agreement.
ARTICLE 16
MISCELLANEOUS PROVISIONS
Section 16.01. Provisions Binding on Company's Successors. All the
covenants, stipulations, promises and agreements by the Company contained in
this Indenture shall bind its successors and assigns whether so expressed or
not.
Section 16.02. Official Acts by Successor Corporation. Any act or
proceeding by any provision of this Indenture authorized or required to be done
or performed by any board, committee or officer of the Company shall and may be
done and performed with like force and effect by the like board, committee or
officer of any Person that shall at the time be the lawful sole successor of the
Company.
Section 16.03. Addresses for Notices, Etc. Any request, notice or
demand which by any provision of this Indenture is required or permitted to be
given or served by the Trustee or by the holders of Debentures on the Company
shall be deemed to have been sufficiently given or
78
made, for all purposes, if delivered by messenger or overnight carrier, given or
served by being deposited postage prepaid by registered or certified mail in a
post office letter box or sent by telecopier transmission addressed as follows:
to Wild Oats Markets, Inc., 0000 Xxxxxxxx Xxxx, Xxxxxxx, Xxxxxxxx 00000,
Telecopier No.: (000) 000-0000, Attention: General Counsel. Any notice,
direction, request or demand hereunder to or upon the Trustee shall be deemed to
have been sufficiently given or made, for all purposes, if delivered by
messenger or overnight carrier, given or served by being deposited, postage
prepaid, by registered or certified mail in a post office letter box or sent by
telecopier transmission addressed as follows: U.S. Bank National Association,
000 00xx Xxxxxx, Xxxxx 000, Xxxxxx, Xxxxxxxx 00000, Telecopier No.: (303)
585-6865, Attention: Corporate Trust Services; provided, however, that the
Trustee shall not be deemed to have received notice until such notice is
actually received.
The Company or the Trustee, by notice to the other, may designate
additional or different addresses for subsequent notices or communications.
Any notice or communication mailed to a Debentureholder shall be mailed
to him by first class mail, postage prepaid, at his address as it appears on the
Debenture Register and shall be sufficiently given to him if so mailed within
the time prescribed.
Failure to mail a notice or communication to a Debentureholder or any
defect in it shall not affect its sufficiency with respect to other
Debentureholders. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it.
Section 16.04. Governing Law. This Indenture and each Debenture
shall be deemed to be a contract made under the laws of the State of New York,
and for all purposes shall be construed in accordance with the laws of the State
of New York (including Section 5-1401 of the New York General Obligations Law or
any successor to such statute).
Section 16.05. Evidence of Compliance with Conditions Precedent;
Certificates to Trustee. Upon any application, request or demand by the Company
to the Trustee to take any action under any of the provisions of this Indenture,
the Company shall furnish to the Trustee an Officers' Certificate stating that
all conditions precedent, if any, provided for in this Indenture relating to the
proposed action have been complied with, and an Opinion of Counsel stating that,
in the opinion of such counsel, all such conditions precedent have been complied
with.
Each certificate or opinion provided for in this Indenture and
delivered to the Trustee with respect to compliance with a condition or covenant
provided for in this Indenture shall include: (1) a statement that the person
making such certificate or opinion has read such covenant or condition; (2) a
brief statement as to the nature and scope of the examination or investigation
upon which the statement or opinion contained in such certificate or opinion is
based; (3) a statement that, in the opinion of such person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and (4) a statement as to whether or not, in the opinion of such
person, such condition or covenant has been complied with.
Section 16.06. Legal Holidays. In any case in which the date of
maturity of Interest on or principal of the Debentures or the Redemption Date of
any Debenture or any Repurchase Date
79
with respect to any Debenture will not be a Business Day, then payment of such
Interest on or principal of the Debentures need not be made on such date, but
may be made on the next succeeding Business Day with the same force and effect
as if made on the date of maturity or the Redemption Date or the Repurchase
Date, as the case may be, and no interest shall accrue for the period from and
after such date.
Section 16.07. Company Responsible for Making Calculations. The
Company will be responsible for making all calculations called for under this
Indenture. These calculations include, but are not limited to, determination of
the Current Market Price, Last Reported Sale Price, Market Price, Spin-Off
Market Price, Trading Price and Closing Trading Price, the amount of accrued
Interest (including any Contingent Interest and Additional Amounts) payable on
the Debentures and the Conversion Rate of the Debentures. The Company will make
these calculations in good faith and, absent manifest error, these calculations
will be final and binding on the Debentureholders. Promptly after the
calculation thereof, the Company will provide to each of the Trustee and the
Conversion Agent an Officers' Certificate setting forth a schedule of its
calculations, and each of the Trustee and the Conversion Agent is entitled to
conclusively rely upon the accuracy of such calculations without independent
verification. The Trustee will forward the Company's calculations to any Holder
upon the written request of such Holder.
Section 16.08. Trust Indenture Act. This Indenture is hereby made
subject to, and shall be governed by, the provisions of the Trust Indenture Act
required to be part of and to govern indentures qualified under the Trust
Indenture Act; provided that unless otherwise required by law, notwithstanding
the foregoing, this Indenture and the Debentures issued hereunder shall not be
subject to the provisions of subsections (a)(1), (a)(2) and (a)(3) of Section
314 of the Trust Indenture Act as now in effect or as hereafter amended or
modified; provided further that this Section 16.08 shall not require this
Indenture or the Trustee to be qualified under the Trust Indenture Act prior to
the time such qualification is in fact required under the terms of the Trust
Indenture Act, nor shall it constitute any admission or acknowledgment by any
party to the Indenture that any such qualification is required prior to the time
such qualification is in fact required under the terms of the Trust Indenture
Act. If any provision hereof limits, qualifies or conflicts with another
provision hereof which is required to be included in an indenture qualified
under the Trust Indenture Act, such required provision shall control.
Section 16.09. No Security Interest Created. Except as provided in
Section 8.06, nothing in this Indenture or in the Debentures, expressed or
implied, shall be construed to constitute a security interest under the Uniform
Commercial Code or similar legislation, as now or hereafter enacted and in
effect, in any jurisdiction in which property of the Company or its subsidiaries
is located.
Section 16.10. Benefits of Indenture. Nothing in this Indenture or
in the Debentures, express or implied, shall give to any Person, other than the
parties hereto, any Paying Agent, any authenticating agent, any Debenture
Registrar and their successors hereunder and the holders of Debentures, any
benefit or any legal or equitable right, remedy or claim under this Indenture.
Section 16.11. Table of Contents, Headings, Etc. The table of
contents and the titles and headings of the Articles and Sections of this
Indenture have been inserted for convenience of
80
reference only, are not to be considered a part hereof, and shall in no way
modify or restrict any of the terms or provisions hereof.
Section 16.12. Authenticating Agent. The Trustee may appoint an
authenticating agent that shall be authorized to act on its behalf, and subject
to its direction, in the authentication and delivery of Debentures in connection
with the original issuance thereof and transfers and exchanges of Debentures
hereunder, including under Sections 2.04, 2.05, 2.06, 2.07, 3.02 and 3.08, as
fully to all intents and purposes as though the authenticating agent had been
expressly authorized by this Indenture and those Sections to authenticate and
deliver Debentures. For all purposes of this Indenture, the authentication and
delivery of Debentures by the authenticating agent shall be deemed to be
authentication and delivery of such Debentures "by the Trustee" and a
certificate of authentication executed on behalf of the Trustee by an
authenticating agent shall be deemed to satisfy any requirement hereunder or in
the Debentures for the Trustee's certificate of authentication. Such
authenticating agent shall at all times be a Person eligible to serve as trustee
hereunder pursuant to Section 8.09.
Any corporation into which any authenticating agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, consolidation or conversion to which any authenticating agent
shall be a party, or any corporation succeeding to the corporate trust business
of any authenticating agent, shall be the successor of the authenticating agent
hereunder, if such successor corporation is otherwise eligible under this
Section 16.12, without the execution or filing of any paper or any further act
on the part of the parties hereto or the authenticating agent or such successor
corporation.
Any authenticating agent may at any time resign by giving written
notice of resignation to the Trustee and to the Company. The Trustee may at any
time terminate the agency of any authenticating agent by giving written notice
of termination to such authenticating agent and to the Company. Upon receiving
such a notice of resignation or upon such a termination, or in case at any time
any authenticating agent shall cease to be eligible under this Section, the
Trustee shall either promptly appoint a successor authenticating agent or itself
assume the duties and obligations of the former authenticating agent under this
Indenture and, upon such appointment of a successor authenticating agent, if
made, shall give written notice of such appointment of a successor
authenticating agent to the Company and shall mail notice of such appointment of
a successor authenticating agent to all holders of Debentures as the names and
addresses of such holders appear on the Debenture Register.
The Company agrees to pay to the authenticating agent from time to time
such reasonable compensation for its services as shall be agreed upon in writing
between the Company and the authenticating agent.
The provisions of Sections 8.02, 8.03, 8.04 and 9.03 and this Section
16.12 shall be applicable to any authenticating agent.
Section 16.13. Execution in Counterparts. This Indenture may be
executed in any number of counterparts, each of which shall be an original, but
such counterparts shall together constitute but one and the same instrument.
81
Section 16.14. Severability. In case any provision in this Indenture
or in the Debentures shall be invalid, illegal or unenforceable, then (to the
extent permitted by law) the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
U.S. Bank National Association hereby accepts the trusts in this
Indenture declared and provided, upon the terms and conditions herein above set
forth.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
82
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed.
WILD OATS MARKETS, INC.
By: /s/ Xxxxx X. Xxxxx
---------------------------------
Name: Xxxxx X. Xxxxx
Title: VP Legal
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By: Xxxx Xxxxxx
---------------------------------
Name: Xxxx Xxxxxx
Title: AVP
EXHIBIT A
[Include only for Global Debentures:]
[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY (55 XXXXX XXXXXX, XXX XXXX, XXX XXXX) (THE
"DEPOSITARY", WHICH TERM INCLUDES ANY SUCCESSOR DEPOSITARY FOR THE CERTIFICATES)
TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH
OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY (AND
ANY PAYMENT HEREIN IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY), ANY TRANSFER, PLEDGE, OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH
AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
[Include only for Debentures that are Restricted Securities:]
[THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE OR
OTHER JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION
HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR
OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH
TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION. THE HOLDER OF
THIS SECURITY, BY ITS ACCEPTANCE HEREOF, (1) REPRESENTS THAT IT IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT ("RULE
144A")); (2) AGREES ON ITS OWN BEHALF AND ON BEHALF OF ANY INVESTOR ACCOUNT FOR
WHICH IT HAS PURCHASED SECURITIES, TO OFFER, SELL OR OTHERWISE TRANSFER SUCH
SECURITY OR ANY COMMON STOCK ISSUABLE UPON CONVERSION OF SUCH SECURITY, PRIOR TO
THE EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THIS SECURITY UNDER
RULE 144(k) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION), ONLY (A) TO
WILD OATS MARKETS, INC. (THE "ISSUER"), (B) PURSUANT TO A REGISTRATION STATEMENT
THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT (AND WHICH CONTINUES
TO BE EFFECTIVE AT THE TIME OF SUCH TRANSFER), (C) FOR SO LONG AS THE SECURITIES
ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, IN COMPLIANCE WITH RULE 144A TO A
PERSON IT REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER THAT PURCHASES
FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO
WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A OR
(D) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT, SUBJECT TO THE ISSUER'S AND THE TRUSTEE'S RIGHT PRIOR TO
ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (D) TO REQUIRE THE DELIVERY
OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY
A-1
TO EACH OF THEM; AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS
SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.
THIS LEGEND WILL BE REMOVED UPON THE EARLIER OF THE TRANSFER OF THIS SECURITY
PURSUANT TO CLAUSE 2(B) ABOVE OR UPON ANY TRANSFER OF THIS SECURITY UNDER RULE
144 UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION).]
FOR PURPOSES OF SECTIONS 1272, 1273 AND 1275 OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED, THIS DEBENTURE IS BEING ISSUED WITH ORIGINAL ISSUE
DISCOUNT. THE ISSUE PRICE OF EACH DEBENTURE IS $1,000 PER $1,000 OF PRINCIPAL
AMOUNT, AND THE ISSUE DATE IS JUNE 1, 2004. IN ADDITION, THIS DEBENTURE IS
SUBJECT TO UNITED STATES FEDERAL INCOME TAX REGULATIONS GOVERNING CONTINGENT
PAYMENT DEBT INSTRUMENTS. FOR PURPOSES OF SECTIONS 1272, 1273 AND 1275 OF THE
INTERNAL REVENUE CODE, THE COMPARABLE YIELD OF THIS DEBENTURE IS 8.25%,
COMPOUNDED SEMIANNUALLY (WHICH WILL BE TREATED AS THE YIELD TO MATURITY FOR
UNITED STATES FEDERAL INCOME TAX PURPOSES).
THE ISSUER AGREES, AND BY ACCEPTING A BENEFICIAL OWNERSHIP INTEREST IN
THIS DEBENTURE EACH HOLDER AND ANY BENEFICIAL OWNER OF THIS DEBENTURE WILL BE
DEEMED TO HAVE AGREED, FOR UNITED STATES FEDERAL INCOME TAX PURPOSES (1) TO
TREAT THIS DEBENTURE AS A DEBT INSTRUMENT THAT IS SUBJECT TO TREAS. REG. SEC.
1.1275-4 (THE "CONTINGENT PAYMENT REGULATIONS"), (2) TO TREAT THE FAIR MARKET
VALUE OF ANY COMMON STOCK RECEIVED UPON ANY CONVERSION OF THIS DEBENTURE OR UPON
A PURCHASE OF THIS DEBENTURE AT THE HOLDER'S OPTION AS A CONTINGENT PAYMENT FOR
PURPOSES OF THE CONTINGENT PAYMENT REGULATIONS, AND (3) TO ACCRUE INTEREST WITH
RESPECT TO THE DEBENTURE AS ORIGINAL ISSUE DISCOUNT FOR UNITED STATES FEDERAL
INCOME TAX PURPOSES ACCORDING TO THE "NONCONTINGENT BOND METHOD," SET FORTH IN
THE CONTINGENT PAYMENT REGULATIONS, AND TO BE BOUND BY THE ISSUER'S
DETERMINATION OF THE "COMPARABLE YIELD" AND "PROJECTED PAYMENT SCHEDULE," WITHIN
THE MEANING OF THE CONTINGENT PAYMENT REGULATIONS, WITH RESPECT TO THIS
DEBENTURE. THE ISSUER AGREES TO PROVIDE PROMPTLY TO THE HOLDER OF THIS
DEBENTURE, UPON WRITTEN REQUEST, THE ISSUE PRICE, AMOUNT OF TAX ORIGINAL ISSUE
DISCOUNT, ISSUE DATE, YIELD TO MATURITY, COMPARABLE YIELD AND PROJECTED PAYMENT
SCHEDULE. ANY SUCH WRITTEN REQUEST SHOULD BE SENT TO THE ISSUER AT THE FOLLOWING
ADDRESS: WILD OATS MARKETS, INC., 0000 XXXXXXXX XXXX, XXXXXXX, XXXXXXXX 00000,
ATTN: GENERAL COUNSEL.
THE HOLDER OF THIS SECURITY IS ENTITLED TO THE BENEFITS OF A
REGISTRATION RIGHTS AGREEMENT DATED JUNE 1, 2004 AND, BY ITS ACCEPTANCE HEREOF,
AGREES TO BE BOUND BY AND TO COMPLY WITH THE PROVISIONS OF SUCH REGISTRATION
RIGHTS AGREEMENT.
A-2
WILD OATS MARKETS, INC.
3.25% CONVERTIBLE SENIOR DEBENTURE DUE 2034
CUSIP: [ ]
No. ___ $[ ]
Wild Oats Markets, Inc., a corporation duly organized and validly
existing under the laws of the State of Delaware (herein called the "COMPANY",
which term includes any successor corporation under the Indenture referred to on
the reverse hereof), for value received hereby promises to pay to CEDE & CO. or
its registered assigns, the principal sum set forth on Schedule I hereto on May
15, 2034 at the office or agency of the Company maintained for that purpose in
accordance with the terms of the Indenture, in such coin or currency of the
United States of America as at the time of payment shall be legal tender for the
payment of public and private debts, and to pay regular interest, semiannually
on May 15 and November 15 of each year, commencing November 15, 2004 and ending
on May 15, 2011, on said principal sum at said office or agency, in like coin or
currency, at the rate per annum of 3.25%, from the May 15 or November 15, as the
case may be, next preceding the date of this Debenture to which interest has
been paid or duly provided for, unless the date hereof is a date to which
interest has been paid or duly provided for, in which case from the date of this
Debenture, or unless no interest has been paid or duly provided for on the
Debentures, in which case from June 1, 2004 until payment of said principal sum
has been made or duly provided for. Notwithstanding the foregoing, if the date
hereof is after any May 1 or November 1, as the case may be, and before the
following May 15 or November 15, this Debenture shall bear interest from such
May 15 or November 15; provided that if the Company shall default in the payment
of interest due on such May 15 or November 15, then this Debenture shall bear
interest from the next preceding May 15 or November 15 to which interest has
been paid or duly provided for; and provided further that if no interest has
been paid or duly provided for on this Debenture, then this Debenture shall bear
interest from June 1, 2004. After May 15, 2011, Wild Oats Markets, Inc. will not
pay regular interest on the Debentures. Contingent Interest, if any, will accrue
for any six-month Interest Period and be payable to holders of this Debenture on
the applicable Interest Payment Date to the person in whose name this Debenture
is registered on the corresponding record date. Except as otherwise provided in
the Indenture, the interest payable on the Debenture pursuant to the Indenture
on any May 15 or November 15 will be paid to the Person entitled thereto as it
appears in the Debenture Register at the close of business on the Regular Record
Date, which shall be the May 1 or November 1 (whether or not a Business Day)
next preceding such May 15 or November 15, as provided in the Indenture;
provided that any such interest not punctually paid or duly provided for shall
be payable as provided in the Indenture. The Company shall pay interest (i) on
any Debentures in certificated form by check mailed to the address of the Person
entitled thereto as it appears in the Debenture Register (or, upon written
notice, by wire transfer in immediately available funds, if such Person is
entitled to interest on Debentures with an aggregate principal amount in excess
of $2,000,000) or (ii) on any Global Debenture by wire transfer of immediately
available funds to the account of the Depositary or its nominee.
A-3
The Company promises to pay interest on overdue principal and (to the
extent that payment of such interest is enforceable under applicable law)
Interest at the rate of 3.25%, per annum, compounded semi-annually.
Reference is made to the further provisions of this Debenture set forth
on the reverse hereof, including, without limitation, provisions giving the
holder of this Debenture the right to convert this Debenture into Common Stock
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 Debenture shall be deemed to be a contract made under the laws of
the State of New York, and for all purposes shall be construed in accordance
with and governed by the laws of the State of New York (including Section 5-1401
of the New York General Obligations Law or any successor to such statute).
This Debenture shall not be valid or become obligatory for any purpose
until the certificate of authentication hereon shall have been manually signed
by the Trustee or a duly authorized authenticating agent under the Indenture.
IN WITNESS WHEREOF, the Company has caused this Debenture to be duly
executed.
WILD OATS MARKETS, INC.
By:
--------------------------------
[Date of authentication]
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Debentures described in the within-named Indenture.
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By:
---------------------------------
Authorized Signatory
or
A-4
By:
-----------------------------------------------
As Authenticating Agent
(if different from Trustee)
By:
-----------------------------------------
Authorized Signatory
A-5
FORM OF REVERSE OF DEBENTURE
WILD OATS MARKETS, INC.
3.25% CONVERTIBLE SENIOR DEBENTURE DUE 2034
This Debenture is one of a duly authorized issue of Debentures of the
Company, designated as its 3.25% Convertible Senior Debentures due 2034 (herein
called the "DEBENTURES"), limited in aggregate principal amount to $115,000,000,
issued and to be issued under and pursuant to an Indenture dated as of June 1,
2004 (herein called the "INDENTURE"), between the Company and U.S. Bank National
Association, as trustee (herein called the "TRUSTEE"), to which Indenture and
all indentures supplemental thereto reference is hereby made for a description
of the rights, limitations of rights, obligations, duties and immunities
thereunder of the Trustee, the Company and the holders of the Debentures.
In case an Event of Default shall have occurred and be continuing, the
principal of and accrued Interest on all Debentures may be declared by either
the Trustee or the holders of not less than 25% in aggregate principal amount of
the Debentures then outstanding, and upon said declaration shall become, due and
payable, in the manner, with the effect and subject to the conditions provided
in the Indenture.
The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the holders of at least a majority in aggregate
principal amount of the Debentures at the time outstanding, to execute
supplemental indentures adding any provisions to or changing in any manner or
eliminating any of the provisions of the Indenture or of any supplemental
indenture or modifying in any manner the rights of the holders of the
Debentures; provided that no such supplemental indenture shall (i) extend the
Stated Maturity of any Debenture, or reduce the rate or extend the time of
payment of Interest thereon, or reduce the principal amount thereof or reduce
any amount payable upon redemption or repurchase thereof, or impair the right of
any Debenture holder to institute suit for the payment thereof, or make the
principal thereof or Interest thereon payable in any coin or currency other than
that provided in the Debentures, or change the obligation of the Company to
redeem any Debenture on a Redemption Date in a manner adverse to the holders, or
change the obligation of the Company to repurchase any Debenture upon a
Fundamental Change in a manner adverse to the holder of the Debentures, or
change the obligation of the Company to repurchase any Debenture on a Company
Repurchase Date in a manner adverse to the holder of the Debentures, or impair
the right to convert the Debentures into Common Stock subject to the terms set
forth in the Indenture, including Section 15.06 thereof, or reduce the number of
shares of Common Stock, the amount of cash or the amount of other property
receivable upon conversion, in each case without the consent of the holder of
each Debenture so affected, or modify any of the provisions of Section 11.02 or
Section 7.07 thereof, except to increase any such percentage or to provide that
certain other provisions of the Indenture cannot be modified or waived without
the consent of the holder of each Debenture so affected, or change any
obligation of the Company to maintain an office or agency in the places and for
the purposes set forth in Section 5.02 thereof, or reduce the quorum or voting
requirements set forth in Article 10 or (ii) reduce the aforesaid percentage of
Debentures, the holders of which are required to consent to any such
supplemental indenture, without the consent of the holders of all Debentures
then outstanding. Subject to the provisions of the Indenture, the holders of a
A-6
majority in aggregate principal amount of the Debentures at the time outstanding
may on behalf of the holders of all of the Debentures waive any past default or
Event of Default under the Indenture and its consequences except (A) a default
in the payment of Interest on or the principal of any of the Debentures, (B) a
failure by the Company to convert any Debentures into Common Stock, cash or a
combination of cash and Common Stock of the Company, (C) a default in the
payment of the Redemption Price pursuant to Article 3 of the Indenture, (D) a
default in the payment of the Company Repurchase Price or Fundamental Change
Repurchase Price pursuant to Article 3 of the Indenture, or (E) a default in
respect of a covenant or provision of the Indenture which under Article 11 of
the Indenture cannot be modified or amended without the consent of the holders
of each or all Debentures then outstanding or affected thereby. Any such consent
or waiver by the holder of this Debenture (unless revoked as provided in the
Indenture) shall be conclusive and binding upon such holder and upon all future
holders and owners of this Debenture and any Debentures which may be issued in
exchange or substitution hereof, irrespective of whether or not any notation
thereof is made upon this Debenture or such other Debentures.
No reference herein to the Indenture and no provision of this Debenture
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of and Interest on this
Debenture at the place, at the respective times, at the rate and in the coin or
currency herein prescribed.
Interest on the Debentures shall be computed on the basis of a 360-day
year of twelve 30-day months.
The Debentures are issuable in fully registered form, without interest
coupons, in denominations of $1,000 principal amount and any multiple of $1,000.
At the office or agency of the Company referred to on the face hereof, and in
the manner and subject to the limitations provided in the Indenture, without
payment of any service charge but with payment of a sum sufficient to cover any
tax, assessment or other governmental charge that may be imposed in connection
with any registration or exchange of Debentures, Debentures may be exchanged for
a like aggregate principal amount of Debentures of any other authorized
denominations.
At any time on or after May 20, 2011 and prior to maturity, the
Debentures may be redeemed at the option of the Company, in whole or in part, in
cash upon mailing a notice of such redemption not less than 30 days but not more
than 60 days before the Redemption Date to the holders of Debentures at their
last registered addresses, all as provided in the Indenture, at a Redemption
Price equal to 100% of the principal amount of debentures being redeemed plus
accrued and unpaid Interest to, but excluding, the Redemption Date; provided
that if the applicable Redemption Date is an Interest Payment Date, the Interest
payable on such Interest Payment Date shall be paid on such Interest Payment
Date to the holders of record of such Debentures on the applicable record date
instead of the holders surrendering such Debentures for redemption on such date.
In no event will any Debenture be redeemable at the option of the
Company before May 20, 2011.
The Company may not give notice of any redemption of the Debentures if
a default in the payment of Interest on the Debentures has occurred and is
continuing.
A-7
The Debentures are not subject to redemption through the operation of
any sinking fund.
If a Fundamental Change occurs at any time prior to maturity of the
Debentures, this Debenture will be redeemable on a Fundamental Change Repurchase
Date, specified by the Company, which shall be no later than 30 days after
notice thereof, at the option of the holder of this Debenture at a Fundamental
Change Repurchase Price equal to 100% of the principal amount thereof, together
with accrued Interest to (but excluding) the Fundamental Change Repurchase Date.
The Company shall mail to all holders of record of the Debentures a notice of
the occurrence of a Fundamental Change and of the repurchase right arising as a
result thereof on or before the 30th day after the occurrence of such
Fundamental Change. For a Debenture to be so repurchased at the option of the
holder, the Company must receive at the office or agency of the Company
maintained for that purpose in accordance with the terms of the Indenture, such
Debenture with the form entitled "Form of Fundamental Change Repurchase
Election" on the reverse thereof duly completed, together with such Debenture,
duly endorsed for transfer at any time prior to the close of business on the
Business Day immediately preceding the Fundamental Change Repurchase Date.
If a Fundamental Change occurs and is a Cash-Buy-Out, then,
notwithstanding whether the holder of any Debentures makes a Fundamental Change
Repurchase Election, the Company shall pay to each holder of record on the date
of the Fundamental Change, a Make-Whole-Premium as described in the Indenture,
which may be paid in cash or shares of Common Stock, or a combination thereof,
at the Company's option.
Subject to the terms and conditions of the Indenture, the Company shall
become obligated to repurchase, at the option of the holder, all or any portion
of the Debentures held by such holder on May 15, 2011, May 15, 2014 and May 15,
2024 in integral multiples of $1,000 at a Company Repurchase Price of 100% of
the principal amount, plus any accrued and unpaid Interest on such Debenture to
but excluding the Company Repurchase Date. To exercise such right, a holder
shall deliver to the Company such Debenture with the form entitled "Form of
Company Repurchase Election" on the reverse thereof duly completed, together
with the Debenture, duly endorsed for transfer, at any time from the opening of
business on the date that is 20 Business Days prior to such Company Repurchase
Date until the close of business on the Business Day immediately preceding the
Company Repurchase Date, and shall deliver the Debentures to the Trustee (or
other Paying Agent appointed by the Company) as set forth in the Indenture.
The Company Repurchase Price to be paid on any of May 15, 2011, May 15,
2014 and May 15, 2024 and the Fundamental Change Repurchase Price to be paid on
any Fundamental Change Repurchase Date shall be paid in cash, subject to the
terms and conditions of the Indenture.
Holders have the right to withdraw any Repurchase Election by
delivering to the Trustee (or other Paying Agent appointed by the Company) a
written notice of withdrawal up to the close of business on the Business Day
immediately preceding the Repurchase Date, all as provided in the Indenture.
If money sufficient to pay the Repurchase Price with respect to all
Debentures or portions thereof to be repurchased as of any Repurchase Date is
deposited with the Trustee (or other
A-8
Paying Agent appointed by the Company), then on and after such Repurchase Date,
Interest will cease to accrue on such Debentures (or portions thereof), and the
holder thereof shall have no other rights as such other than the right to
receive the Repurchase Price upon surrender of such Debenture.
Subject to the occurrence of certain events and in compliance with the
provisions of the Indenture, prior to the Stated Maturity of the Debentures, the
holder hereof has the right, at its option, to convert each $1,000 principal
amount of the Debentures into 56.5099 shares of the Company's Common Stock (a
Conversion Price of approximately $17.70 per share), as such shares shall be
constituted at the date of conversion and subject to adjustment from time to
time as provided in the Indenture, upon surrender of this Debenture with the
form entitled "Form of Conversion Notice" on the reverse hereof duly completed,
to the Company at the office or agency of the Company maintained for that
purpose in accordance with the terms of the Indenture, or at the option of such
holder, the Corporate Trust Office, and, unless the shares issuable on
conversion are to be issued in the same name as this Debenture, duly endorsed
by, or accompanied by instruments of transfer in form satisfactory to the
Company duly executed by, the holder or by his duly authorized attorney. The
Company will notify the holder thereof of any event triggering the right to
convert the Debentures as specified above in accordance with the Indenture.
If the Company (i) is a party to a consolidation, merger, statutory
share exchange or combination, (ii) reclassifies the Common Stock, or (iii)
sells or conveys its properties and assets substantially as an entirety to any
Person, the right to convert a Security into shares of Common Stock may be
changed into a right to convert it into the kind or amount of cash, securities
or other property receivable upon such event, in each case in accordance with
the Indenture.
No adjustment in respect of Interest on any Debenture converted or
dividends on any shares issued upon conversion of such Debenture will be made
upon any conversion except as set forth in the next sentence. If this Debenture
(or portion hereof) is surrendered for conversion during the period from the
close of business on any record date for the payment of Interest to the opening
of business on the immediately following Interest Payment Date, this Debenture
(or portion hereof being converted) must be accompanied by payment, in
immediately available funds or other funds acceptable to the Company, of an
amount equal to the Interest otherwise payable on such Interest Payment Date on
the principal amount being converted; provided that no such payment shall be
required (1) if the Company has specified a Redemption Date that is after a
record date and prior to the next Interest Payment Date, (2) if the Company has
specified a Repurchase Date following a Fundamental Change that is after a
record date and on or prior to the next Interest Payment Date or (3) to the
extent of any overdue Interest, if any overdue Interest exists at the time of
conversion with respect to such Debenture.
No fractional shares will be issued upon any conversion, but an
adjustment and payment in cash will be made, as provided in the Indenture, in
respect of any fraction of a share which would otherwise be issuable upon the
surrender of any Debenture or Debentures for conversion.
A Debenture in respect of which a holder is exercising its right to
require repurchase upon a Fundamental Change or repurchase on a Repurchase Date
may be converted only if such holder withdraws its election to exercise such
right in accordance with the terms of the Indenture.
A-9
Upon due presentment for registration of transfer of this Debenture at
the office or agency of the Company maintained for that purpose in accordance
with the terms of the Indenture, a new Debenture or Debentures of authorized
denominations for an equal aggregate principal amount will be issued to the
transferee in exchange thereof, subject to the limitations provided in the
Indenture, without charge except for any tax, assessment or other governmental
charge imposed in connection therewith.
The Company, the Trustee, any authenticating agent, any Paying Agent,
any Conversion Agent and any Debenture Registrar may deem and treat the
registered holder hereof as the absolute owner of this Debenture (whether or not
this Debenture shall be overdue and notwithstanding any notation of ownership or
other writing hereon made by anyone other than the Company or any Debenture
Registrar) for the purpose of receiving payment hereof, or on account hereof,
for the conversion hereof and for all other purposes, and neither the Company
nor the Trustee nor any other authenticating agent nor any Paying Agent nor
other Conversion Agent nor any Debenture Registrar shall be affected by any
notice to the contrary. All payments made to or upon the order of such
registered holder shall, to the extent of the sum or sums paid, satisfy and
discharge liability for monies payable on this Debenture.
No recourse for the payment of the principal of or Interest on this
Debenture, or for any claim based hereon or otherwise in respect hereof, and no
recourse under or upon any obligation, covenant or agreement of the Company in
the Indenture or any supplemental indenture or in any Debenture, or because of
the creation of any indebtedness represented thereby, shall be had against any
incorporator, shareholder, employee, agent, officer or director or subsidiary,
as such, past, present or future, of the Company or of any successor
corporation, either directly or through the Company or any successor
corporation, whether by virtue of any constitution, statute or rule of law or by
the enforcement of any assessment or penalty or otherwise, all such liability
being, by acceptance hereof and as part of the consideration for the issue
hereof, expressly waived and released.
The Company agrees, and by acceptance of a Debenture, each beneficial
holder of a Debenture will be deemed to have agreed to treat the Debentures as
indebtedness of the Company for U.S. federal income tax purposes that are
subject to the regulations governing contingent payment debt instruments and to
be bound (in the absence of an administrative determination or judicial ruling
to the contrary) by the Company's determination of the comparable yield and
projected payment schedule within the meaning of the regulations governing
contingent payment debt instruments. A holder of Debentures may obtain the issue
price, the amount of original issue discount, issue date, yield to maturity,
comparable yield and projected payment schedule for the Debentures, determined
by the Company pursuant to Treas. Reg. Sec. 1.1275-4, by submitting a written
request for it to the Company at the following address: Wild Oats Markets, Inc.,
0000 Xxxxxxxx Xxxx, Xxxxxxx, Xxxxxxxx 00000, Attention: General Counsel.
Terms used in this Debenture and defined in the Indenture are used
herein as therein defined.
A-10
ABBREVIATIONS
The following abbreviations, when used in the inscription of the face
of this Debenture, shall be construed as though they were written out in full
according to applicable laws or regulations.
TEN COM - as tenants in common
TEN ENT - as tenant by the entireties
JT TEN - as joint tenants with right of
survivorship and not as tenants in common
UNIF GIFT MIN ACT -___ Custodian ___
(Cust) (Minor)
under Uniform Gifts to Minors Act
____________________________
(State)
Additional abbreviations may also be used though not in the above list.
A-11
FORM OF
CONVERSION NOTICE
TO: WILD OATS MARKETS, INC.
U.S. BANK NATIONAL ASSOCIATION
The undersigned registered owner of this Debenture hereby irrevocably
exercises the option to convert this Debenture, or the portion thereof (which is
$1,000 or a multiple thereof) below designated, into shares of Common Stock of
Wild Oats Markets, Inc. and/or cash in accordance with the terms of the
Indenture referred to in this Debenture, and directs that the shares issuable
and deliverable and/or cash payable upon such conversion, together with any
check in payment for fractional shares and any Debentures representing any
unconverted principal amount hereof, be issued and delivered to the registered
holder hereof unless a different name has been indicated below. Capitalized
terms used herein but not defined shall have the meanings ascribed to such terms
in the Indenture. If shares, any portion of this Debenture not converted or a
check for cash payable are to be issued in the name of a person other than the
undersigned, the undersigned will provide the appropriate information below and
pay all transfer taxes payable with respect thereto. Any amount required to be
paid by the undersigned on account of Interest, including Contingent Interest
and Additional Amounts, if any, accompanies this Debenture.
Dated:
---------------------
------------------------------
------------------------------
Signature(s)
A-12
Signature(s) must be guaranteed by an
"eligible guarantor institution" meeting the
requirements of the Debenture Registrar,
which requirements include membership or
participation in the Security Transfer Agent
Medallion Program ("STAMP") or such other
"signature guarantee program" as may be
determined by the Debenture Registrar in
addition to, or in substitution for, STAMP,
all in accordance with the Securities
Exchange Act of 1934, as amended.
-------------------------------------------
Signature Guarantee
Fill in the registration of shares of Common Stock if to be issued, and
Debentures if to be delivered, other than to and in the name of the registered
holder:
------------------------------------
(Name)
------------------------------------
(Street Address)
------------------------------------
(City, State and Zip Code)
------------------------------------
Please print name and address
Principal amount to be converted
(if less than all):
$
-----------------------------------
Social Security or Other Taxpayer
Identification Number:
------------------------------------
A-13
FORM OF
FUNDAMENTAL CHANGE REPURCHASE ELECTION
TO: WILD OATS MARKETS, INC.
U.S. BANK NATIONAL ASSOCIATION
The undersigned registered owner of this Debenture hereby irrevocably
acknowledges receipt of a notice from Wild Oats Markets, Inc. (the "COMPANY") as
to the occurrence of a Fundamental Change with respect to the Company and
requests and instructs the Company to repurchase the entire principal amount of
this Debenture, or the portion thereof (which is $1,000 or a multiple thereof)
below designated, in accordance with the terms of the Indenture referred to in
this Debenture at the price of 100% of such entire principal amount or portion
thereof, together with accrued Interest to, but excluding, the Fundamental
Change Repurchase Date, to the registered holder hereof. Capitalized terms used
herein but not defined shall have the meanings ascribed to such terms in the
Indenture.
Dated:
---------------------
------------------------------
------------------------------
Signature(s)
NOTICE: The above signatures of the holder(s) hereof must correspond with the
name as written upon the face of the Debenture in every particular without
alteration or enlargement or any change whatever.
Debenture Certificate Number (if applicable):
Principal amount to be repurchased (if less than all):
Social Security or Other Taxpayer Identification Number:
A-14
FORM OF
COMPANY REPURCHASE ELECTION
TO: WILD OATS MARKETS, INC.
U.S. BANK NATIONAL ASSOCIATION
The undersigned registered owner of this Debenture hereby irrevocably
acknowledges receipt of a notice from Wild Oats Markets, Inc. (the "COMPANY")
regarding the right of holders to elect to require the Company to repurchase the
Debentures and requests and instructs the Company to repay the entire principal
amount of this Debenture, or the portion thereof (which is $1,000 or an integral
multiple thereof) below designated, in accordance with the terms of the
Indenture at the price of 100% of such entire principal amount or portion
thereof, together with accrued Interest to, but excluding, the Company
Repurchase Date, to the registered holder hereof. Capitalized terms used herein
but not defined shall have the meanings ascribed to such terms in the Indenture.
The Debentures shall be repurchased by the Company as of the Company Repurchase
Date pursuant to the terms and conditions specified in the Indenture.
Dated:
---------------------
------------------------------
------------------------------
Signature(s)
NOTICE: The above signatures of the holder(s) hereof must correspond with the
name as written upon the face of the Debenture in every particular without
alteration or enlargement or any change whatever.
Debenture Certificate Number (if applicable):
Principal amount to be repurchased (if less than all):
Social Security or Other Taxpayer Identification Number:
A-15
ASSIGNMENT
For value received ______________________________hereby sell(s)
assign(s) and transfer(s) unto ___________________________________ (Please
insert social security or other Taxpayer Identification Number of assignee) the
within Debenture, and hereby irrevocably constitutes and appoints
______________________________________ attorney to transfer said Debenture on
the books of the Company, with full power of substitution in the premises.
In connection with any transfer of the Debenture prior to the
expiration of the holding period applicable to sales thereof under Rule 144(k)
under the Securities Act (or any successor provision) (other than any transfer
pursuant to a registration statement that has been declared effective under the
Securities Act), the undersigned confirms that such Debenture is being
transferred:
[ ] To Wild Oats Markets, Inc. or a subsidiary thereof; or
To a "qualified institutional buyer" in compliance with Rule
[ ] 144A under the Securities Act of 1933, as amended; or
[ ] Pursuant to and in compliance with Rule 144 under the
Securities Act of 1933, as amended; or
[ ] Pursuant to a Registration Statement which has been declared
effective under the Securities Act of 1933, as amended, and
which continues to be effective at the time of transfer;
and unless the Debenture has been transferred to Wild Oats Markets, Inc. or a
subsidiary thereof, the undersigned confirms that such Debenture is not being
transferred to an "affiliate" of the Company as defined in Rule 144 under the
Securities Act of 1933, as amended.
Unless one of the boxes is checked, the Trustee will refuse to register
any of the Debentures evidenced by this certificate in the name of any person
other than the registered holder thereof.
Dated:
---------------------
------------------------------
------------------------------
Signature(s)
A-16
Signature(s) must be guaranteed by an
"eligible guarantor institution" meeting the
requirements of the Debenture Registrar,
which requirements include membership or
participation in the Security Transfer Agent
Medallion Program ("STAMP") or such other
"signature guarantee program" as may be
determined by the Debenture Registrar in
addition to, or in substitution for, STAMP,
al in accordance with the Securities
Exchange Act of 1934, as amended.
-------------------------------------------
Signature Guarantee
NOTICE: The signature on the Conversion Notice, the Fundamental Change
Repurchase Election, the Company Repurchase Election or the Assignment must
correspond with the name as written upon the face of the Debenture in every
particular without alteration or enlargement or any change whatever.
A-17
Schedule I
[Include Schedule I only for a Global Debenture]
WILD OATS MARKETS, INC.
3.25% Convertible Senior Debenture due 2034
No. _______
AUTHORIZED SIGNATURE
NOTATION EXPLAINING OF TRUSTEE
DATE PRINCIPAL AMOUNT PRINCIPAL AMOUNT RECORDED OR CUSTODIAN
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A-18
