Exhibit 10.87
EXECUTION COPY
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HEADWATERS INCORPORATED,
To
XXXXX FARGO BANK,
NATIONAL ASSOCIATION
as Trustee
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INDENTURE
Dated as of June 1, 2004
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2-7/8% Convertible Senior Subordinated Notes due 2016
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TABLE OF CONTENTS
Page
ARTICLE 1
DEFINITIONS
Section 1.01. Definitions......................................................1
ARTICLE 2
ISSUE, DESCRIPTION, EXECUTION, REGISTRATION AND EXCHANGE OF NOTES
Section 2.01. Designation Amount and Issue of Notes............................9
Section 2.02. Form of Notes...................................................10
Section 2.03. Date and Denomination of Notes; Payments of Interest............11
Section 2.04. Execution of Notes..............................................12
Section 2.05. Exchange and Registration of Transfer of Notes; Restrictions
on Transfer...................................................13
Section 2.06. Mutilated, Destroyed, Lost or Stolen Notes......................18
Section 2.07. Temporary Notes.................................................19
Section 2.08. Cancellation of Notes...........................................20
Section 2.09. CUSIP Numbers...................................................20
ARTICLE 3
REDEMPTION AND REPURCHASE OF NOTES
Section 3.01. Redemption of Notes.............................................20
Section 3.02. Notice of Redemption; Selection of Notes........................23
Section 3.03. Payment of Notes Called for Redemption by the Company...........24
Section 3.04. Conversion Arrangement on Call for Redemption...................25
Section 3.05. Repurchase at Option of Holders upon a Designated Event.........25
Section 3.06. Repurchase of Notes by the Company at Option of the Holder......29
Section 3.07. Company Repurchase Notice.......................................30
Section 3.08. Effect of Repurchase Notice.....................................31
Section 3.09. Deposit of Repurchase Price.....................................32
Section 3.10. Notes Repurchased in Part.......................................32
Section 3.11. Repayment to the Company........................................32
ARTICLE 4
CONTINGENT INTEREST
Section 4.01. Contingent Interest.............................................32
Section 4.02. Payment of Contingent Interest..................................33
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Section 4.03. Contingent Interest Notification................................33
ARTICLE 5
PARTICULAR COVENANTS OF THE COMPANY
Section 5.01. Payment of Principal and Interest...............................33
Section 5.02. Maintenance of Office or Agency.................................33
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. Maintenance of Properties.......................................35
Section 5.07. Payment of Taxes and Other Claims...............................36
Section 5.08. Rule 144A Information Requirement...............................36
Section 5.09. Stay, Extension and Usury Laws..................................36
Section 5.10. Compliance Certificate..........................................37
Section 5.11. Additional Interest Notice......................................37
Section 5.12. Contingent Debt Tax Treatment...................................37
Section 5.13. Calculation of Original Issue Discount..........................37
ARTICLE 6
NOTEHOLDERS' LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE
Section 6.01. Noteholders' Lists..............................................38
Section 6.02. Preservation and Disclosure of Lists............................38
Section 6.03. Reports by Trustee..............................................39
Section 6.04. Reports by Company..............................................39
ARTICLE 7
REMEDIES OF THE TRUSTEE AND NOTEHOLDERS ON AN EVENT OF DEFAULT
Section 7.01. Events of Default...............................................39
Section 7.02. Payments of Notes on Default; Suit Therefor.....................41
Section 7.03. Application of Monies Collected by Trustee......................43
Section 7.04. Proceedings by Noteholder.......................................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 Noteholders.......................................45
Section 7.08. Notice of Default...............................................45
Section 7.09. Undertaking to Pay Costs........................................45
ARTICLE 8
THE TRUSTEE
Section 8.01. Duties and Responsibilities of Trustee..........................46
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Section 8.02. Reliance on Documents, Opinions, Etc............................47
Section 8.03. No Responsibility for Recitals, Etc.............................49
Section 8.04. Trustee, Paying Agents, Conversion Agents or Registrar
May Own Notes.................................................49
Section 8.05. Monies to Be Held in Trust......................................49
Section 8.06. Compensation and Expenses of Trustee............................49
Section 8.07. Officer's 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.................................52
Section 8.12. Succession by Merger............................................52
Section 8.13. Preferential Collection of Claims...............................53
Section 8.14. Trustee's Application for Instructions from the Company.........53
ARTICLE 9
THE NOTEHOLDERS
Section 9.01. Action by Noteholders...........................................53
Section 9.02. Proof of Execution by Noteholders...............................54
Section 9.03. Who Are Deemed Absolute Owners..................................54
Section 9.04. Company-owned Notes Disregarded.................................54
Section 9.05. Revocation of Consents; Future Holders Bound....................55
ARTICLE 10
MEETINGS OF NOTEHOLDERS
Section 10.01. Purpose of Meetings............................................55
Section 10.02. Call of Meetings by Trustee....................................55
Section 10.03. Call of Meetings by Company or Noteholders.....................56
Section 10.04. Qualifications for Voting......................................56
Section 10.05. Regulations....................................................56
Section 10.06. Voting.........................................................57
Section 10.07. No Delay of Rights by Meeting..................................57
ARTICLE 11
SUPPLEMENTAL INDENTURES
Section 11.01. Supplemental Indentures Without Consent of Noteholders.........58
Section 11.02. Supplemental Indenture with Consent of Noteholders.............59
Section 11.03. Effect of Supplemental Indenture...............................60
Section 11.04. Notation on Notes..............................................60
Section 11.05. Evidence of Compliance of Supplemental Indenture to Be
Furnished to Trustee.........................................61
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ARTICLE 12
CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE
Section 12.01. Company May Consolidate on Certain Terms.......................61
Section 12.02. Successor to Be Substituted....................................61
Section 12.03. Opinion of Counsel to Be Given to Trustee......................62
ARTICLE 13
SATISFACTION AND DISCHARGE OF INDENTURE
Section 13.01. Discharge of Indenture.........................................62
Section 13.02. Deposited Monies to Be Held in Trust by Trustee................63
Section 13.03. Paying Agent to Repay Monies Held..............................63
Section 13.04. Return of Unclaimed Monies.....................................63
Section 13.05. Reinstatement..................................................64
ARTICLE 14
IMMUNITY OF INCORPORATORS, SHAREHOLDERS, OFFICERS AND DIRECTORS
Section 14.01. Indenture and Notes Solely Corporate Obligations...............64
ARTICLE 15
CONVERSION OF NOTES
Section 15.01. Right to Convert...............................................64
Section 15.02. Exercise of Conversion Privilege; Issuance of Common
Stock on Conversion; No Adjustment for Interest
or Dividends.................................................67
Section 15.03. Cash Payments in Lieu of Fractional Shares.....................69
Section 15.04. Conversion Rate................................................69
Section 15.05. Adjustment of Conversion Rate..................................69
Section 15.06. Effect of Reclassification, Consolidation, Merger or Sale......78
Section 15.07. Taxes on Shares Issued.........................................79
Section 15.08. Reservation of Shares; Shares to Be Fully Paid; Compliance
with Governmental Requirements; Listing of Common Stock......79
Section 15.09. Responsibility of Trustee......................................80
Section 15.10. Notice to Holders Prior to Certain Actions.....................80
Section 15.11. Shareholder Rights Plans.......................................81
ARTICLE 16
SUBORDINATION
Section 16.01. Agreement to Subordinate.......................................81
Section 16.02. Liquidation, Dissolution, Bankruptcy...........................82
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Section 16.03. Default on Senior Indebtedness.................................82
Section 16.04. Acceleration of Payment of Notes...............................83
Section 16.05. When Distribution Must Be Paid Over............................83
Section 16.06. Subrogation....................................................83
Section 16.07. Relative Rights................................................84
Section 16.08. Subordination May Not Be Impaired by Company...................84
Section 16.09. Rights of Trustee and Paying Agent.............................84
Section 16.10. Distribution or Notice to Representative.......................85
Section 16.11. Article 16 Not to Prevent Events of Default or Limit
Right to Accelerate..........................................85
Section 16.12. Trust Monies Not Subordinated..................................85
Section 16.13. Trustee Entitled to Rely.......................................85
Section 16.14. Trustee to Effectuate Subordination............................85
Section 16.15. Trustee Not Fiduciary for Holders of Senior Indebtedness.......85
Section 16.16. Reliance by Noteholders of Senior Indebtedness on
Subordination Provisions.....................................86
ARTICLE 17
MISCELLANEOUS PROVISIONS
Section 17.01. Provisions Binding on Company's Successors.....................86
Section 17.02. Official Acts by Successor Corporation.........................86
Section 17.03. Addresses for Notices, Etc.....................................86
Section 17.04. Governing Law..................................................87
Section 17.05. Evidence of Compliance with Conditions Precedent;
Certificates to Trustee......................................87
Section 17.06. Legal Holidays.................................................87
Section 17.07. Trust Indenture Act............................................87
Section 17.08. No Security Interest Created...................................88
Section 17.09. Benefits of Indenture..........................................88
Section 17.10. Table of Contents, Headings, Etc...............................88
Section 17.11. Authenticating Agent...........................................88
Section 17.12. Execution in Counterparts......................................88
Section 17.13. Severability...................................................89
Exhibit A - FORM OF NOTE
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INDENTURE
INDENTURE dated as of June 1, 2004, between HEADWATERS INCORPORATED, a
Delaware corporation (hereinafter called the "Company"), having its principal
office at 00000 Xxxxx Xxxxxxxxxx Xxxxxxx, Xxxxx 000, Xxxxx Xxxxxx, XX 00000, and
Xxxxx Fargo Bank, National Association, a national banking association, as
trustee hereunder (hereinafter called the "Trustee").
WITNESSETH:
WHEREAS, for its lawful corporate purposes, the Company has duly
authorized the issue of its 2-7/8% Convertible Senior Subordinated Notes due
2016 (hereinafter called the "Notes"), in an aggregate principal amount not to
exceed $172,500,000 and, to provide the terms and conditions upon which the
Notes are to be authenticated, issued and delivered, the Company has duly
authorized the execution and delivery of this Indenture; and
WHEREAS, the Notes, the certificate of authentication to be borne by
the Notes, a form of assignment, a form of Designated Event Repurchase Notice, a
form of Repurchase Notice and a form of Conversion Notice to be borne by the
Notes are to be substantially in the forms hereinafter provided for; and
WHEREAS, all acts and things necessary to make the Notes, when executed
by the Company and authenticated and delivered by the Trustee or a duly
authorized authenticating agent, as 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 Notes have in all
respects been duly authorized,
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
That in order to declare the terms and conditions upon which the Notes
are, and are to be, authenticated, issued and delivered, and in consideration of
the premises and of the purchase and acceptance of the Notes by the holders
thereof, the Company covenants and agrees with the Trustee for the equal and
proportionate benefit of the respective holders from time to time of the Notes
(except as otherwise provided below), as follows:
ARTICLE 1
DEFINITIONS
Section 1.01. Definitions.
The terms defined in this Section 1.01 (except as herein otherwise
expressly provided or unless the context otherwise requires) for all purposes of
this Indenture and of any indenture supplemental hereto shall have the
respective meanings specified in this Section 1.01. All other terms used in this
Indenture that are defined in the Trust Indenture Act or which are by reference
therein defined in the Securities Act (except as herein otherwise expressly
provided or unless the context otherwise requires) shall have the meanings
assigned to such terms in the Trust Indenture Act and in the Securities Act as
in force at the date of the execution of this Indenture. The words "herein",
"hereof", "hereunder" and words of similar import refer to this Indenture as a
whole and not to any particular Article, Section or other subdivision. The terms
defined in this Article include the plural as well as the singular.
"Additional Interest" has the meaning specified for "Additional
Interest Amount" in Section 2(e) of the Registration Rights Agreement.
"Additional Interest Notice" has the meaning specified in Section 5.12.
"Adjustment Event" has the meaning specified in Section 15.05(k).
"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).
"Bankruptcy Law" means Title 11, U.S. Code or any similar federal or
state law for the relief of debtors.
"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 except a Saturday, Sunday or legal holiday
on which banking institutions in The City of New York are authorized or
obligated by law, regulation or executive order to close.
"Calendar Quarter" means, with respect to the Company, the first,
second, third and fourth quarter of any fiscal year ending on March 31, June 30,
September 30 and December 31, respectively.
"Closing Sale Price" of the shares of Common Stock on any date means
the closing sale price per share (or, if no closing sale price is reported, the
average of the closing bid and ask prices or, if more than one in either case,
the average of the average closing bid and the average closing ask prices) on
such date as reported in composite transactions for the principal United States
securities exchange on which shares of Common Stock are traded or, if the shares
of Common Stock are not listed on a United States national or regional
securities exchange, as reported by the Nasdaq Stock Market or by the National
Quotation Bureau Incorporated. In the absence of such quotations, the Company
shall be entitled to determine the Closing Sale Price on the basis it considers
appropriate. The Closing Sale Price shall be determined without reference to
extended or after-hours trading.
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"Commission" means the Securities and Exchange Commission, as from time
to time constituted, created 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 Notes shall include
only shares of the class designated as common stock of the Company at the date
of this Indenture (namely, the Common Stock, par value $0.01) 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 Notice" has the meaning specified in Section
3.07(b).
"Company Repurchase Notice Date" has the meaning specified in Section
3.07(b).
"Contingent Interest" has the meaning specified in Section 4.01.
"Conversion Date" has the meaning specified in Section 15.02.
"Conversion Notice" has the meaning specified in Section 15.02.
"Conversion Price" as of any day will equal $1,000 divided by the
Conversion Rate as of such date.
"Conversion Rate" has the meaning specified in Section 15.04.
"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 administered, which office is,
at the date as of which this Indenture is dated, located at Sixth & Marquette;
X0000-000 Xxxxxxxxxxx, XX 00000.
"Credit Agreement" means the credit agreement dated March 31, 2004
among the Company, the Lenders, the Issuer (both, as defined therein) and Bank
One, N.A. acting as administrative agent, as amended, restated, supplemental,
waived, replaced, whether or not upon termination, and whether with the original
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Lenders or otherwise, refinanced, restructured or refinancing thereof (including
amendments that increase the principal amount thereof).
"Current Market Price" has the meaning specified in Section 15.05(g).
"Custodian" means Xxxxx Fargo Bank, National Association, as custodian
with respect to the Notes in global form, or any successor entity thereto.
"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 Notes. 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.
"Designated Event" shall mean any Fundamental Change or a Termination
of Trading.
"Designated Event Expiration Time" has the meaning specified in Section
3.05(b).
"Designated Event Notice" has the meaning specified in Section 3.05(b).
"Designated Event Repurchase Date" has the meaning specified in Section
3.05(a).
"Designated Event Repurchase Notice" has the meaning specified in
Section 3.05(a).
"Designated Senior Indebtedness" of the Company means (a) the Credit
Agreement and (b) any other Senior Indebtedness of the Company that, at the date
of determination, has an aggregate principal amount outstanding of, or under
which, at the date of determination, the holders thereof are committed to lend
up to, at least $25,000,000 and is specifically designated by the Company in the
instrument evidencing or governing such Senior Indebtedness as "Designated
Senior Indebtedness" for purposes of this Indenture.
"Determination Date" has the meaning specified in Section 15.05(k).
"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 Time" has the meaning specified in Section 15.01(b).
"Expiration Time" has the meaning specified in Section 15.05(f).
"Fair Market Value" has the meaning specified in Section 15.05(g)(ii).
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"Fundamental Change" means the occurrence of any transaction or event
(whether by means of an exchange offer, liquidation, tender offer,
consolidation, merger, combination, reclassification, recapitalization or
otherwise) in connection with which all or substantially all of the Common Stock
shall be exchanged for, converted into, acquired for or constitutes solely the
right to receive, consideration which is not all or substantially all common
stock, depositary receipts, ordinary shares or other certificates representing
common equity interests that are (or, upon consummation of or immediately
following such transaction or event, will be) listed on a United States national
securities exchange or approved (or, upon consummation of or immediately
following such transaction or event, will be approved) for quotation on the
Nasdaq National Market or any similar United States system of automated
dissemination of quotations of securities prices.
"Global Note" has the meaning specified in Section 2.02.
"Indebtedness" means, with respect to any Person on any date of
determination, without duplication, the principal or face amount of (i) all
obligations for borrowed money, (ii) all obligations evidenced by notes, bonds
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, except any such balance that constitutes
an accrued expense or trade payable, (v) all obligations as lessee which are
capitalized in accordance with generally accepted accounting principles, (vi)
representing any amounts owing in respect to foreign exchange and interest rate,
commodity or other hedging agreements, and (vii) all Indebtedness of others
guaranteed by such Person or any of its Subsidiaries or for which such Person or
any of its Subsidiaries is legally responsible or liable (whether by agreement
to purchase indebtedness of, or to supply funds or to invest in, others).
"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 Xxxxxx Xxxxxxx & Co. Incorporated,
X.X. Xxxxxx Securities Inc., Xxxxx, Xxxxxxxx & Xxxx, Inc., RBC Capital Markets
Corporation and Xxxxxxxx Inc. (each an "Initial Purchaser").
"Interest" means, when used with reference to the Notes, any interest
payable under the terms of the Notes, including Contingent Interest, if any, and
Additional Interest, if any, payable under the terms of the Registration Rights
Agreement.
"Make Whole Payment" means, with respect to each $1,000 principal
amount of Notes, a payment in cash, Common Stock or a combination thereof equal
to the present value of all remaining scheduled payments of Interest on the
Notes to be redeemed through June 1, 2011. Present value will be computed using
a discount rate equal to the Treasury Yield.
"Measurement Period" has the meaning specified in Section 15.01(a).
"Non-electing share" has the meaning specified in Section 15.06.
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"Note" or "Notes" means any Note or Notes, as the case may be,
authenticated and delivered under this Indenture, including any Global Note.
"Noteholder" or "holder" as applied to any Note, or other similar terms
(but excluding the term "Beneficial Holder"), means any Person in whose name at
the time a particular Note is registered on the Note Registrar's books.
"Note Register" has the meaning specified in Section 2.05.
"Note Registrar" has the meaning specified in Section 2.05.
"Notice Date" means the date of mailing of the notice of redemption
pursuant to Section 3.02.
"Officer" means, with respect to the Company, its Chairman of the
Board, the Chief Executive Officer, the President 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") and the Treasurer or any Assistant Treasurer, or the
Secretary or Assistant Secretary of the Company.
"Officer's Certificate", when used with respect to the Company, means a
certificate signed by an Officer thereof.
"Opinion of Counsel" means an opinion in writing signed by legal
counsel, who may be an employee of or counsel to the Company.
"Outstanding", when used with reference to Notes and subject to the
provisions of Section 9.04, means, as of any particular time, all Notes
authenticated and delivered by the Trustee under this Indenture, except:
(a) Notes theretofore canceled by the Trustee or delivered to
the Trustee for cancellation;
(b) Notes, or portions thereof, (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 discharged in accordance with
Article 13;
(c) Notes in lieu of which, or in substitution for which,
other Notes shall have been authenticated and delivered pursuant to the
terms of Section 2.06; and
(d) Notes converted into Common Stock pursuant to Article 15
and Notes deemed not outstanding pursuant to Article 3.
"Permitted Junior Securities" means (i) equity interests in the Company
or (ii) debt securities that are subordinated to all Senior Indebtedness and any
debt securities issued in exchange for Senior Indebtedness to the same extent
as, or to a greater extent than, the Notes are subordinated to Senior
Indebtedness under this Indenture.
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"Person" means a corporation, an association, a partnership, a limited
liability company, an individual, a joint venture, a joint stock company, a
trust, an unincorporated organization or a government or an agency or a
political subdivision thereof.
"Portal Market" means The Portal Market operated by the National
Association of Securities Dealers, Inc. or any successor thereto.
"Predecessor Note" of any particular Note means every previous Note
evidencing all or a portion of the same debt as that evidenced by such
particular Note, and, for the purposes of this definition, any Note
authenticated and delivered under Section 2.06 in exchange for a mutilated Note
or in lieu of a lost, destroyed or stolen Note shall be deemed to evidence the
same debt as the mutilated lost, destroyed or stolen Note that it replaces.
"Purchased Shares" has the meaning specified in Section 15.05(f)(i).
"Record Date" has the meaning specified in Section 15.05(g)(iii).
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of June 1, 2004, between the Company and the Initial
Purchasers, as amended from time to time in accordance with its terms.
"Repurchase Date" has the meaning specified in Section 3.06.
"Repurchase Notice" has the meaning specified in Section 3.06.
"Responsible Officer" shall mean, when used with respect to the
Trustee, any officer within the corporate trust department of the Trustee with
direct responsibility for the administration of this Indenture, and also means,
with respect to a particular corporate trust matter, any other officer to whom
such matter is referred because of such person's knowledge or 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" has the meaning specified in Section 15.05(d).
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder, as in effect from time to time.
"Senior Indebtedness" means (i) all Indebtedness of the Company
outstanding under the Credit Agreement and all Hedging Obligations with respect
to secured obligations thereunder, including interest, fees, expenses, amounts
payable under reimbursement obligations in connection with letters of credit and
interest accruing after, or which would accrue but for the filing of a petition
initiating any proceeding pursuant to Bankruptcy Law at the rate specified in
the Credit Agreement, whether or not a claim for such interest would be
allowed), (ii) any other Indebtedness of the Company, whether outstanding on the
date of the Indenture or thereafter created, incurred, assumed, guaranteed or in
effect guaranteed by the Company (including all deferrals, renewals, extensions
7
or refundings of, or amendments, modifications or supplements to the foregoing)
and (iii) all Obligations with respect to the items listed in the preceding
clauses (i) and (ii); provided, however, that Senior Indebtedness does not
include: (a) Indebtedness evidenced by the Notes; (b) Indebtedness of the
Company to any Subsidiary of the Company, except to the extent such Indebtedness
is pledged by such Subsidiary as security for any Senior Indebtedness of such
Subsidiary; (c) any liability for federal, state, foreign, local or other taxes
owed or owing by the Company; (d) accounts payable or other liabilities of the
Company to trade creditors arising in the ordinary course of business, and (e)
any Indebtedness in which the instrument creating or evidencing the same or the
assumption or guarantee thereof expressly provides that such Indebtedness is
pari passu with, or is subordinated to, the Notes.
"Senior Subordinated Indebtedness" of the Company means the Notes and
any other Indebtedness of the Company that specifically provides that such
Indebtedness is to rank pari passu with the Notes in right of payment and is not
subordinated by its terms in right of payment to any Indebtedness or other
obligation of the Company which is not Senior Indebtedness.
"Significant Subsidiary" means, as of any date of determination, a
Subsidiary of the Company that would constitute a "significant subsidiary" as
such term is defined under Rule 1-02(w) of Regulation S-X of the Commission as
in effect on the date of this Indenture.
"Subordinated Indebtedness" means any Indebtedness of the Company
(whether outstanding on the date of this Indenture or thereafter Incurred) that
is subordinate or junior in right of payment to the Notes pursuant to a written
agreement.
"Subsidiary" means, with respect to any Person, (i) any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of capital stock or other equity interest entitled (without
regard to the occurrence of any contingency) to vote in the election of
directors, managers or trustees thereof is at the time owned or controlled,
directly or indirectly, by such Person or one or more of the other subsidiaries
of that Person (or a combination thereof) and (ii) any partnership (a) the sole
general partner or managing general partner of which is such Person or a
subsidiary of such Person or (b) the only general partners of which are such
Person or of one or more subsidiaries of such Person (or any combination
thereof).
"Tax Original Issue Discount" means the amount of ordinary interest
income on a Note that must be accrued as original issue discount for United
States federal income tax purposes pursuant to United States Treasury Regulation
section 1.1275-4 or any successor provision.
"Termination of Trading" will be deemed to have occurred if the Common
Stock (or other common stock, depositary receipts, ordinary shares or other
certificates representing common equity interests into which the Notes are then
convertible) is neither listed for trading on a United States national
securities exchange nor approved for trading on the Nasdaq National Market.
"Trading Day" has the meaning specified in Section 15.05(g).
"Trading Price" means, on any date, the average of the secondary market
bid quotations per $1,000 principal amount of Notes obtained by the Trustee for
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$10,000,000 principal amount of Notes at approximately 3:30 p.m., New York City
time, on such date from three independent nationally recognized securities
dealers selected by the Company; provided that if at least three such bids
cannot reasonably be obtained by the Trustee, but two bids are obtained, then
the average of the two such bids shall be used, and if only one such bid can
reasonably be obtained by the Trustee, that one bid shall be used ; provided
further that if the Trustee cannot reasonably obtain at least one bid for
$10,000,000 principal amount of Notes from a nationally recognized securities
dealer, then the Trading Price per $1,000 principal amount of Notes on such date
shall be deemed to be less than 98% of the product of (a) the number of shares
of Common Stock issuable upon conversion of $1,000 principal amount of Notes and
(b) the Closing Sale Price on such date.
"Treasury Yield" means the yield to maturity at the time of computation
of United States Treasury securities with a constant maturity (as compiled and
published in the most recent Federal Reserve Statistical Release H.15 (519) that
has become publicly available at least two business days prior to the redemption
date (or, if such Statistical Release is no longer published, any publicly
available source for similar market data)) most nearly equal to the then
remaining term to June 1, 2011; provided, however, that if the then remaining
term to June 1, 2011 is not equal to the constant maturity of a United States
Treasury security for which a weekly average yield is given, the Treasury Yield
shall be obtained by linear interpolation (calculated to the nearest one-twelfth
of a year) from the weekly average yields of United States Treasury securities
for which such yields are given, except that if the then remaining term to June
1, 2011 is less than one year, the weekly average yield on actually traded
United States Treasury securities adjusted to a constant maturity of one year
shall be used.
"Trigger Event" has the meaning specified in Section 15.05(d).
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended, as it was in force at the date of this Indenture, except as provided in
Sections 11.03 and 15.06; provided that if the Trust Indenture Act of 1939 is
amended after the date hereof, the term "Trust Indenture Act" shall mean, to the
extent required by such amendment, the Trust Indenture Act of 1939 as so
amended.
"Trustee" means Well Fargo 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 NOTES
Section 2.01. Designation Amount and Issue of Notes.
The Notes shall be designated as "2-7/8% Convertible Senior
Subordinated Notes due 2016". Notes not to exceed the aggregate principal amount
of $172,500,000 (except pursuant to Sections 2.05, 2.06, 3.03, 3.05, 3.06, 3.10
and 16.02 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
Notes to or upon the written order of the Company, signed by its Chairman of the
9
Board, Chief Executive Officer, President 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"), the Treasurer or any Assistant Treasurer or the
Secretary or Assistant Secretary, without any further action by the Company
hereunder.
Section 2.02. Form of Notes.
The Notes and the Trustee's certificate of authentication to be borne
by such Notes shall be substantially in the form set forth in Exhibit A. The
terms and provisions contained in the form of Note attached as Exhibit A hereto
shall constitute, and are hereby expressly made, a part of this Indenture and,
to the extent applicable, the Company and the Trustee, by their execution and
delivery of this Indenture, expressly agree to such terms and provisions and to
be bound thereby.
Any of the Notes 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 Notes to be
tradable on The Portal Market or as may be required for the Notes 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 Notes may be
listed, or to conform to usage, or to indicate any special limitations or
restrictions to which any particular Notes are subject.
So long as the Notes 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 Notes will be represented by one or more Notes in
global form registered in the name of the Depositary or the nominee of the
Depositary (a "Global Note"). The transfer and exchange of beneficial interests
in any such Global Note 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 owners of a Global Note shall not be
entitled to have certificates registered in their names, will not receive or be
entitled to receive physical delivery of certificates in definitive form and
will not be considered holders of such Global Note.
Any Global Note shall represent such of the outstanding Notes as shall
be specified therein and shall provide that it shall represent the aggregate
amount of outstanding Notes from time to time endorsed thereon and that the
aggregate amount of outstanding Notes 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 Note to
reflect the amount of any increase or decrease in the amount of outstanding
Notes 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 Notes in accordance with this Indenture. Payment of principal of
and Interest on any Global Note shall be made to the holder of such Note.
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Section 2.03. Date and Denomination of Notes; Payments of Interest.
The Notes shall be issuable in registered form without coupons in
denominations of $1,000 principal amount and integral multiples thereof. Each
Note shall be dated the date of its authentication and shall bear Interest from
the date specified on the face of the form of Note attached as Exhibit A hereto.
Interest on the Notes shall be computed on the basis of a 360-day year comprised
of twelve 30-day months.
The Person in whose name any Note (or its Predecessor Note) is
registered on the Note Register at the close of business on any record date with
respect to any 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, falls after a record date and on or
prior to the corresponding interest payment date, in which case accrued and
unpaid Interest to, but excluding, such redemption date or repurchase date shall
be payable on such interest payment date to the holders of such Notes registered
as such on the applicable record date).
Notwithstanding the foregoing, if any Note (or portion thereof) is
converted into Common Stock during the period after a record date for the
payment of Interest to, but excluding, the next succeeding interest payment date
and such Note (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
Note (or portion thereof). Interest shall be payable at the office of the
Company maintained by the Company for such purposes in the Borough of Manhattan,
City of New York, which shall initially be an office or agency of the Trustee.
The Company shall pay Interest (i) on any Notes in certificated form by (x)
check mailed to the address of the Person entitled thereto as it appears in the
Note Register (or upon written notice, by wire transfer in immediately available
funds, if such Person is entitled to Interest on aggregate principal in excess
of $2 million) or (y) by transfer to an account maintained by such person in the
United States or (ii) on any Global Note by wire transfer of immediately
available funds to the account of the Depositary or its nominee. The term
"record date" with respect to any interest payment date shall mean the May 15 or
November 15 preceding the applicable June 1 or December 1 interest payment date,
respectively.
Any Interest on any Note which is payable, but is not punctually paid
or duly provided for, on any June 1 or December 1 (herein called "Defaulted
Interest") shall forthwith cease to be payable to the Noteholder on the relevant
record date by virtue of his having been such Noteholder, and such Defaulted
Interest shall be paid by the Company, at its election in each case, as provided
in clause (1) or (2) below:
(a) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Notes (or their respective
Predecessor Notes) are registered at the close of business on a special
record date for the payment of such Defaulted Interest, which shall be
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
Note 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
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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
such holder's address as it appears in the Note 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 Notes (or their respective Predecessor
Notes) 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.
(a) 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 Notes
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 Notes.
The Notes shall be signed in the name and on behalf of the Company by
the manual or facsimile signature of its Chairman of the Board, Chief Executive
Officer, President 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")
and attested by the manual or facsimile signature of its Secretary or any of its
Assistant Secretaries or its Treasurer or any of its Assistant Treasurers (which
may be printed, engraved or otherwise reproduced thereon, by facsimile or
otherwise). Only such Notes as shall bear thereon a certificate of
authentication substantially in the form set forth on the form of Note attached
as Exhibit A hereto, manually executed by the Trustee (or an authenticating
agent appointed by the Trustee as provided by Section 17.12), 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 Note
executed by the Company shall be conclusive evidence that the Note so
authenticated has been duly authenticated and delivered hereunder and that the
holder is entitled to the benefits of this Indenture.
In case any officer of the Company who shall have signed any of the
Notes shall cease to be such officer before the Notes so signed shall have been
authenticated and delivered by the Trustee, or disposed of by the Company, such
Notes nevertheless may be authenticated and delivered or disposed of as though
the person who signed such Notes had not ceased to be such officer of the
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Company, and any Note may be signed on behalf of the Company by such persons as,
at the actual date of the execution of such Note, shall be the proper officers
of the Company, although at the date of the execution of this Indenture any such
person was not such an officer.
Section 2.05. Exchange and Registration of Transfer of Notes; 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 "Note Register") in which, subject to such
reasonable regulations as it may prescribe, the Company shall provide for the
registration of Notes and of transfers of Notes. The Note 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 "Note
Registrar" for the purpose of registering Notes and transfers of Notes as herein
provided. The Company may appoint one or more co-registrars in accordance with
Section 5.02.
Upon surrender for registration of transfer of any Note to the Note
Registrar or any co-registrar, and satisfaction of the requirements for such
transfer set forth in this Section 2.05, the Company shall execute, and the
Trustee shall authenticate and deliver, in the name of the designated transferee
or transferees, one or more new Notes of any authorized denominations and of a
like aggregate principal amount and bearing such restrictive legends as may be
required by this Indenture.
Notes may be exchanged for other Notes of any authorized denominations
and of a like aggregate principal amount, upon surrender of the Notes to be
exchanged at any such office or agency maintained by the Company pursuant to
Section 5.02. Whenever any Notes are so surrendered for exchange, the Company
shall execute, and the Trustee shall authenticate and deliver, the Notes which
the Noteholder making the exchange is entitled to receive bearing registration
numbers not contemporaneously outstanding.
All Notes issued upon any registration of transfer or exchange of Notes
shall be the valid obligations of the Company, evidencing the same debt, and
entitled to the same benefits under this Indenture, as the Notes surrendered
upon such registration of transfer or exchange.
All Notes presented or surrendered for registration of transfer or for
exchange, redemption, repurchase or conversion shall (if so required by the
Company or the Note Registrar) be duly endorsed, or be accompanied by a written
instrument or instruments of transfer in form satisfactory to the Company, and
the Notes shall be duly executed by the Noteholder 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 Notes, but the Company may require payment by the holder
of a sum sufficient to cover any tax, assessment or other governmental charge
that may be imposed in connection with any registration of transfer or exchange
of Notes.
Neither the Company nor the Trustee nor any Note Registrar shall be
required to exchange or register a transfer of (a) any Notes for a period of
fifteen (15) days next preceding any selection of Notes to be redeemed, (b) any
Notes or portions thereof called for redemption pursuant to Section 3.02, (c)
any Notes or portions thereof surrendered for conversion pursuant to Article 15,
13
(d) any Notes or portions thereof tendered for repurchase (and not withdrawn)
pursuant to Section 3.05 or (e) any Notes or portions thereof tendered for
repurchase (and not withdrawn) pursuant to Section 3.06.
(b) The following provisions shall apply only to Global Notes:
(i) Each Global Note authenticated under this Indenture shall
be registered in the name of the Depositary or a nominee thereof and
delivered to such Depositary or a nominee thereof or Custodian
therefor, and each such Global Note shall constitute a single Note for
all purposes of this Indenture.
(ii) Notwithstanding any other provision in this Indenture, no
Global Note may be exchanged in whole or in part for Notes registered,
and no transfer of a Global Note 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 Note
and a successor depositary has not been appointed by the Company within
ninety days or (ii) has ceased to be a clearing agency registered under
the Exchange Act and a successor depositary has not been appointed by
the Company within ninety days, (B) an Event of Default has occurred
and the maturity of the Notes shall have been accelerated in accordance
with Section 7.01 and any Noteholder shall have given written notice to
the Company requesting the issuance of definitive Notes or (C) the
Company, in its sole discretion, notifies the Trustee in writing that
it no longer wishes to have all the Notes represented by Global Notes.
Any Global Note exchanged pursuant to clause (A) or (B) above shall be
so exchanged in whole and not in part and any Global Note exchanged
pursuant to clause (C) above may be exchanged in whole or from time to
time in part as directed by the Company. Any Note issued in exchange
for a Global Note or any portion thereof shall be a Global Note;
provided that any such Note so issued that is registered in the name of
a Person other than the Depositary or a nominee thereof shall not be a
Global Note.
(iii) Securities issued in exchange for a Global Note 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 Note 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
Note to be exchanged in whole shall be surrendered by the Depositary to
the Trustee, as Note Registrar. With regard to any Global Note to be
exchanged in part, either such Global Note 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 Note, 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 Note
issuable on such exchange to or upon the written order of the
Depositary or an authorized representative thereof.
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(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 Notes 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 Note 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 Note 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 among 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 holder of any Note.
(vi) At such time as all interests in a Global Note have been
redeemed, repurchased, converted, canceled or exchanged for Notes in
certificated form, such Global Note 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 Note is
redeemed, repurchased, converted, canceled or exchanged for Notes in
certificated form, the principal amount of such Global Note 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 Note, by the Trustee or the
Custodian, at the direction of the Trustee, to reflect such reduction.
(c) Every Note 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 Notes 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 Noteholder's acceptance thereof, agrees
to be bound by all such restrictions on transfer. As used in this Section
2.05(c), 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 Note (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
Note 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:
15
THE NOTE EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR
ANY STATE SECURITIES LAWS, AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION
HEREOF, THE HOLDER (1) REPRESENTS THAT IT IS A "QUALIFIED INSTITUTIONAL
BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) (OR ANY
SUCCESSOR PROVISIONS); (2) AGREES THAT IT WILL NOT, PRIOR TO EXPIRATION
OF THE HOLDING PERIOD APPLICABLE TO SALES OF THE NOTE EVIDENCED HEREBY
UNDER RULE 144(k) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR
PROVISION), RESELL OR OTHERWISE TRANSFER THIS NOTE OR THE COMMON STOCK
ISSUABLE UPON CONVERSION OF THIS NOTE EXCEPT (A) TO HEADWATERS
INCORPORATED OR ANY SUBSIDIARY THEREOF, (B) TO A QUALIFIED
INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES
ACT, (C) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE
144 UNDER THE SECURITIES ACT (IF AVAILABLE), OR (D) PURSUANT TO A
REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE
SECURITIES ACT (AND WHICH CONTINUES TO BE EFFECTIVE AT THE TIME OF SUCH
TRANSFER); (3) PRIOR TO SUCH TRANSFER (OTHER THAN A TRANSFER PURSUANT
TO CLAUSE 2(D) ABOVE), IT WILL FURNISH TO XXXXX FARGO BANK, NATIONAL
ASSOCIATION, AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS APPLICABLE), SUCH
CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS THE TRUSTEE MAY
REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT
TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT; AND (4) AGREES THAT IT
WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. THIS LEGEND WILL BE REMOVED
UPON THE EARLIER OF THE TRANSFER OF THIS NOTE PURSUANT TO CLAUSE 2(D)
ABOVE OR UPON ANY TRANSFER OF THIS NOTE UNDER RULE 144(k) UNDER THE
SECURITIES ACT (OR ANY SUCCESSOR PROVISION). THE INDENTURE CONTAINS A
PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF
THIS NOTE IN VIOLATION OF THE FOREGOING RESTRICTION.
Any Note (or security issued in exchange or substitution therefor) as
to which such restrictions on transfer shall have expired in accordance with
their terms or as to conditions for removal of the foregoing legend set forth
therein have been satisfied may, upon surrender of such Note for exchange to the
Note Registrar in accordance with the provisions of this Section 2.05, be
exchanged for a new Note or Notes, of like tenor and aggregate principal amount,
which shall not bear the restrictive legend required by this Section 2.05(c). If
the Restricted Security surrendered for exchange is represented by a Global Note
bearing the legend set forth in this Section 2.05(c), the principal amount of
the legended Global Note shall be reduced by the appropriate principal amount
and the principal amount of a Global Note without the legend set forth in this
Section 2.05(c) shall be increased by an equal principal amount. If a Global
16
Note 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 Note 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
Note 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 Notes 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:
THE COMMON STOCK EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), OR ANY STATE SECURITIES LAWS, AND, ACCORDINGLY, MAY NOT BE
OFFERED OR SOLD EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. THE
HOLDER HEREOF AGREES THAT UNTIL THE EXPIRATION OF THE HOLDING PERIOD
APPLICABLE TO SALES OF THE COMMON STOCK EVIDENCED HEREBY UNDER RULE
144(k) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION); (1) IT
WILL NOT RESELL OR OTHERWISE TRANSFER THE COMMON STOCK EVIDENCED HEREBY
EXCEPT (A) TO HEADWATERS INCORPORATED OR TO ANY SUBSIDIARY THEREOF, (B)
TO A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) IN COMPLIANCE WITH RULE 144A, (C) PURSUANT TO THE
EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES
ACT (IF AVAILABLE), OR (D) PURSUANT TO A REGISTRATION STATEMENT WHICH
HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT (AND WHICH
CONTINUES TO BE EFFECTIVE AT THE TIME OF SUCH TRANSFER); (2) PRIOR TO
SUCH TRANSFER (OTHER THAN A TRANSFER PURSUANT TO CLAUSE 1(D) ABOVE), IT
WILL FURNISH TO Equiserve Trust Company, N.A., AS TRANSFER AGENT (OR A
SUCCESSOR TRANSFER AGENT, AS APPLICABLE), SUCH CERTIFICATIONS, LEGAL
OPINIONS OR OTHER INFORMATION AS SUCH TRANSFER AGENT MAY REASONABLY
REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT; AND (3) IT WILL DELIVER TO EACH
PERSON TO WHOM THE COMMON STOCK EVIDENCED HEREBY IS TRANSFERRED (OTHER
THAN A TRANSFER PURSUANT TO CLAUSE 1(D) ABOVE) A NOTICE SUBSTANTIALLY
TO THE EFFECT OF THIS LEGEND. THIS LEGEND WILL BE REMOVED UPON THE
EARLIER OF THE TRANSFER OF THE COMMON STOCK EVIDENCED HEREBY PURSUANT
17
TO CLAUSE 1(D) ABOVE OR UPON ANY TRANSFER OF THE COMMON STOCK EVIDENCED
HEREBY AFTER THE EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES
OF THE SECURITY EVIDENCED HEREBY UNDER RULE 144(k) UNDER THE SECURITIES
ACT (OR ANY SUCCESSOR PROVISION).
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 Note or Common Stock issued upon the conversion of a Note that,
prior to the expiration of the holding period applicable to sales thereof under
Rule 144(k) under the Securities Act (or any successor 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 Notes or Common Stock, as the case
may be, no longer being "Restricted Securities" (as defined under Rule 144).
(f) The Company and the Trustee shall have no responsibility or
obligation to any Agent Members or any other Person with respect to the accuracy
of the books or records, or the acts or omissions, of the Depositary or its
nominee or of any participant or member thereof, with respect to any ownership
interest in the Notes or with respect to the delivery to any Agent Member or
other Person (other than the Depositary) of any notice (including any notice of
redemption) or the payment of any amount, under or with respect to such Notes.
All notices and communications to be given to the Noteholder and all payments to
be made to Noteholders under the Notes shall be given or made only to or upon
the order of the registered Noteholders (which shall be the Depositary or its
nominee in the case of a Global Note). The rights of beneficial owners in any
Global Note shall be exercised only through the Depositary subject to the
customary procedures of the Depositary. The Trustee may rely and shall be fully
protected in relying upon information furnished by the Depositary with respect
to its Agent Members.
The Trustee shall have no obligation or duty to monitor, determine or
inquire as to compliance with any restrictions on transfer imposed under this
Indenture or under applicable law with respect to any transfer of any interest
in any Note (including any transfers between or among Agent Members in any
Global Note) other than to require delivery of such certificates and other
documentation or evidence as are expressly required by, and to do so if and when
expressly required by, the terms of this Indenture, and to examine the same to
determine substantial compliance as to form with the express requirements
hereof.
Section 2.06. Mutilated, Destroyed, Lost or Stolen Notes.
In case any Note shall become mutilated or be destroyed, lost or
stolen, the Company in its discretion may execute, and upon its written request
the Trustee or an authenticating agent appointed by the Trustee shall
authenticate and make available for delivery, a new Note, bearing a number not
contemporaneously outstanding, in exchange and substitution for the mutilated
Note, or in lieu of and in substitution for the Note so destroyed, lost or
stolen. In every case, the applicant for a substituted Note shall furnish to the
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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 Note 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 Note and make available for delivery such
Note. Upon the issuance of any substituted Note, 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 Note which has matured or is about to
mature or has been called for redemption or has been tendered for repurchase
upon a Designated Event (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 Note, pay or authorize the payment of or
convert or authorize the conversion of the same (without surrender thereof
except in the case of a mutilated Note), as the case may be, if the applicant
for such payment or conversion shall furnish to the Company, to the Trustee and,
if applicable, to such authenticating agent such security or indemnity as may be
required by them to save each of them harmless for 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 Note and of the
ownership thereof.
Every substitute Note issued pursuant to the provisions of this Section
2.06 by virtue of the fact that any Note is destroyed, lost or stolen shall
constitute an additional contractual obligation of the Company, whether or not
the destroyed, lost or stolen Note shall be found at any time, and shall be
entitled to all the benefits of (but shall be subject to all the limitations set
forth in) this Indenture equally and proportionately with any and all other
Notes duly issued hereunder. To the extent permitted by law, all Notes shall be
held and owned upon the express condition that the foregoing provisions are
exclusive with respect to the replacement or payment or conversion or redemption
or repurchase of mutilated, destroyed, lost or stolen Notes and shall preclude
any and all other rights or remedies notwithstanding any law or statute existing
or hereafter enacted to the contrary with respect to the replacement or payment
or conversion or redemption or repurchase of negotiable instruments or other
securities without their surrender.
Section 2.07. Temporary Notes.
Pending the preparation of Notes 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 Notes (printed or lithographed). Temporary Notes shall be issuable in
any authorized denomination, and substantially in the form of the Notes in
certificated form, but with such omissions, insertions and variations as may be
appropriate for temporary Notes, all as may be determined by the Company. Every
such temporary Note shall be executed by the Company and authenticated by the
Trustee or such authenticating agent upon the same conditions and in
substantially the same manner, and with the same effect, as the Notes in
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certificated form. Without unreasonable delay, the Company will execute and
deliver to the Trustee or such authenticating agent Notes in certificated form
and thereupon any or all temporary Notes 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 Notes an equal aggregate
principal amount of Notes 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 Notes shall in all respects be entitled to the same
benefits and subject to the same limitations under this Indenture as Notes in
certificated form authenticated and delivered hereunder.
Section 2.08. Cancellation of Notes.
All Notes surrendered for the purpose of payment, redemption,
repurchase, conversion, exchange or registration of transfer shall, if
surrendered to the Company or any paying agent or any Note Registrar or any
conversion agent, be surrendered to the Trustee and promptly canceled by it, or,
if surrendered to the Trustee, shall be promptly canceled by it, and no Notes
shall be issued in lieu thereof except as expressly permitted by any of the
provisions of this Indenture. The Trustee shall dispose of such canceled Notes
in accordance with its customary procedures. If the Company shall acquire any of
the Notes, such acquisition shall not operate as a redemption, repurchase or
satisfaction of the indebtedness represented by such Notes unless and until the
same are delivered to the Trustee for cancellation.
Section 2.09. CUSIP Numbers.
The Company in issuing the Notes may use CUSIP numbers (if then
generally in use), and, if so, the Trustee shall use CUSIP numbers in notices of
redemption or repurchases as a convenience to Noteholders; provided that any
such notice may state that no representation is made as to the correctness of
such numbers either as printed on the Notes or as contained in any notice of a
redemption or a repurchase and that reliance may be placed only on the other
identification numbers printed on the Notes, and any such redemption or
repurchase shall not be affected by any defect in or omission of such numbers.
The Company will promptly notify the Trustee of any change in the CUSIP numbers.
ARTICLE 3
REDEMPTION AND REPURCHASE OF NOTES
Section 3.01. Redemption of Notes.
(a) The Company may not redeem any Notes prior to June 1, 2007. On or
after June 1, 2007 and prior to June 4, 2011 the Notes may be redeemed at the
option of the Company, in whole or in part at any time and from time to time,
subject to the conditions specified in paragraphs 7 and 8 of the Notes and upon
notice as set forth in Section 3.02, at a cash redemption price equal to 100% of
the principal amount of the Notes being redeemed, together with accrued and
unpaid Interest, if any, to, but excluding, the date fixed for redemption plus
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the Make Whole Payment; provided that if the redemption date falls after a
record date and on or prior to the corresponding interest payment date, then
accrued and unpaid Interest, if any, to, but excluding, the date fixed for
redemption shall be paid on such interest payment date to the holders of record
of such Notes on the applicable record date instead of the holders surrendering
such Notes for redemption on such date.
(b) The Make Whole Payment, if any, shall be paid on all Notes being
redeemed by the Company on a Redemption Date on or after June 1, 2007 and prior
to June 4, 2011, including any Notes that may have been converted after the date
of the notice of redemption and prior to such Redemption Date.
(c) The Company may elect to pay the Make Whole Payment or any portion
thereof (A) in cash or, (B) subject to the fulfillment by the Company of the
conditions set forth in Section 3.01 (e), by delivering the number of shares of
Common Stock equal to (i) the Make Whole Payment (or any portion thereof that
the Company elects to pay in shares of Common Stock) divided by (ii) 97.5% of
the average of the Trading Price per share of Common Stock for the five
consecutive Trading Days immediately preceding and including the third Trading
Day prior to the Redemption Date.
(d) Any issuance of shares of Common Stock in respect of the Make Whole
Payment shall be deemed to have been effected immediately prior to the close of
business on the Redemption Date and the Person or Persons in whose name or names
any stock certificate or stock certificates representing shares of Common Stock
shall be issuable upon such redemption shall be deemed to have become on the
Redemption Date the holder or holders of record of the shares represented
thereby; provided, however, that any surrender for redemption on a date when the
stock transfer books of the Company shall be closed shall constitute the Person
or Persons in whose name or names the stock certificate or stock certificates
representing such shares are to be issued as the holder or holders of record of
the shares represented thereby for all purposes at the opening of business on
the next succeeding day on which such stock transfer books are open. No payment
or adjustment shall be made for dividends or distributions on any Common Stock
declared prior to the Redemption Date.
(e) No fractions of shares of Common Stock shall be issued upon payment
of the Make Whole Payment. Instead of any fractional share of Common Stock that
would otherwise be issued, the Company shall pay a cash adjustment in respect of
such fraction (calculated to the nearest one-100th of a share) in an amount
equal to the same fraction of the Trading Price of the Common Stock as of the
Trading Day preceding the Redemption Date.
(f) Any issuance and delivery of stock certificates representing shares
of Common Stock on payment of the Make Whole Payment shall be made without
charge to the Holder of Notes being redeemed or for any tax or duty in respect
of the issuance or delivery of such stock certificates or the Notes represented
thereby; provided, however, that the Company shall not be required to pay any
tax or duty which may be payable in respect of (i) income of the Holder or (ii)
any transfer involved in the issuance or delivery of stock certificates
representing shares of Common Stock in a name other than that of the Holder of
the Notes being redeemed, and no such issuance or delivery shall be made unless
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the Persons requesting such issuance or delivery has paid to the Company the
amount of any such tax or duty or has established, to the satisfaction of the
Company, that such tax or duty has been paid.
(g) Conditions to the Company's Election to Pay the Make Whole Payment
in Common Stock.
The Company may, at its option, pay the Make Whole Payment payable to
Holders pursuant to Section 3.01(b) upon redemption of the Notes, in shares of
Common Stock, if the following conditions are satisfied:
(A) The shares of Common Stock to be so issued:
(1) shall not require registration under any federal securities law
before such shares may be freely transferable without being subject to any
transfer restrictions under the Securities Act upon redemption or if such
registration is required, such registration shall be completed and shall become
effective prior to the Redemption Date; and
(2) shall not require registration with, or approval of, any
governmental authority under any state law or any other federal law before
shares may be validly issued or delivered upon redemption or if such
registration is required or such approval must be obtained, such registration
shall be completed or such approval shall be obtained prior to the Redemption
Date.
(B) The shares of Common Stock to be listed upon redemption of Notes
hereunder are, or shall have been, approved for listing on the Nasdaq National
Market or the New York Stock Exchange or listed on another national securities
exchange, in any case, prior to the Redemption Date.
(C) All shares of Common Stock which may be issued upon redemption of
Notes will be issued out of the Company's authorized but unissued Common Stock
and will, upon issue, be duly and validly issued and fully paid and
nonassessable and free of any preemptive or similar rights.
(D) If any of the conditions set forth in clauses (a) through (c) of
this Section 3.01(g) are not satisfied in accordance with the terms thereof, the
Make Whole Payment shall be paid by the Company only in cash.
(h) At any time on or after June 4, 2011 and prior to maturity, the
Notes may be redeemed at the option of the Company, in whole or in part at any
time and from time to time, upon notice as set forth in Section 3.02, at a cash
redemption price equal to 100% of the principal amount of the Notes being
redeemed, together with accrued and unpaid Interest, if any, to, but excluding,
the date fixed for redemption; provided that if the redemption date falls after
a record date and on or prior to the corresponding interest payment date, then
accrued and unpaid Interest, if any, to, but excluding, the date fixed for
redemption shall be paid on such interest payment date to the holders of record
of such Notes on the applicable record date instead of the holders surrendering
such Notes for redemption on such date.
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Section 3.02. Notice of Redemption; Selection of Notes.
In case the Company shall desire to exercise the right to redeem all
or, as the case may be, any part of the Notes pursuant to Section 3.01, it shall
fix a date for redemption and it or, at its written request received by the
Trustee not fewer than forty-five (45) days prior (or such shorter period of
time as may be acceptable to the Trustee) to the date fixed for redemption, 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 not fewer than twenty (20) nor more than
sixty (60) days prior to the redemption date to each holder of Notes so to be
redeemed as a whole or in part at its last address as the same appears on the
Note 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 Note designated for
redemption as a whole or in part shall not affect the validity of the
proceedings for the redemption of any other Note. Concurrently with the mailing
of any such notice of redemption, 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 Note
called for redemption.
Each such notice of redemption shall specify the aggregate principal
amount of Notes to be redeemed, the CUSIP number or numbers of the Notes being
redeemed, the date fixed for redemption (which shall be a Business Day), the
redemption price at which Notes are to be redeemed, the place or places of
payment, that payment will be made upon presentation and surrender of such
Notes, that Interest accrued to the date fixed for redemption will be paid as
specified in said notice, and that on and after said date Interest thereon or on
the portion thereof to be redeemed will cease to accrue. Such notice shall also
state the current Conversion Rate and the date on which the right to convert
such Notes or portions thereof into Common Stock will expire. If fewer than all
the Notes are to be redeemed, the notice of redemption shall identify the Notes
to be redeemed (including CUSIP numbers, if any). In case any Note is to be
redeemed in part only, the notice of redemption shall state the portion of the
principal amount thereof to be redeemed and shall state that, on and after the
redemption date, upon surrender of such Note, a new Note or Notes in principal
amount equal to the unredeemed portion thereof will be issued.
On or prior to the redemption date specified in the notice of
redemption given as provided in this Section 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 Notes (or portions thereof) so called for
redemption (other than those theretofore surrendered for conversion into Common
Stock) at the appropriate redemption price, together with accrued Interest to,
but excluding, the redemption date; 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
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required hereunder to pay the redemption price and accrued Interest to, but
excluding, the redemption date. If any Note 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 Note 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 Notes are to be redeemed, the Company will give the Trustee written notice
in the form of an Officer's Certificate not fewer than forty-five (45) days (or
such shorter period of time as may be acceptable to the Trustee) prior to the
redemption date as to the aggregate principal amount of Notes to be redeemed.
If less than all of the outstanding Notes are to be redeemed, the
Trustee shall select the Notes or portions thereof of the Global Note or the
Notes in certificated form to be redeemed (in principal amounts of $1,000 or
multiples thereof) by lot, on a pro rata basis or by another method the Trustee
deems fair and appropriate. If any Note selected for partial redemption is
submitted for conversion in part after such selection, the portion of such Note
submitted for conversion shall be deemed (so far as may be possible) to be the
portion to be selected for redemption. The Notes (or portions thereof) so
selected shall be deemed duly selected for redemption for all purposes hereof,
notwithstanding that any such Note is submitted for conversion in part before
the mailing of the notice of redemption.
Upon any redemption of less than all of the outstanding Notes, the
Company and the Trustee may (but need not), solely for purposes of determining
the pro rata allocation among such Notes as are unconverted and outstanding at
the time of redemption, treat as outstanding any Notes surrendered for
conversion during the period of fifteen (15) days next preceding the mailing of
a notice of redemption and may (but need not) treat as outstanding any Note
authenticated and delivered during such period in exchange for the unconverted
portion of any Note converted in part during such period.
Section 3.03. Payment of Notes Called for Redemption by the Company.
If notice of redemption has been given as provided in Section 3.02, the
Notes or portion of Notes with respect to which such notice has been given
shall, unless converted into Common Stock pursuant to the terms hereof, become
due and payable on the date fixed for redemption and at the place or places
stated in such notice at the applicable redemption price, together with Interest
accrued to (but excluding) the redemption date, and on and after said date
(unless the Company shall default in the payment of such Notes at the redemption
price, together with Interest accrued to said date) Interest on the Notes or
portion of Notes so called for redemption shall cease to accrue and, after the
close of business on the Business Day immediately preceding the redemption date
(unless the Company shall default in the payment of such Notes at the redemption
price, together with Interest accrued to said date) such Notes shall cease to be
convertible into Common Stock and, except as provided in Section 8.05 and
Section 13.04, to be entitled to any benefit or security under this Indenture,
and the holders thereof shall have no right in respect of such Notes except the
right to receive the redemption price thereof and unpaid Interest to (but
excluding) the redemption date. On presentation and surrender of such Notes at a
place of payment in said notice specified, the said Notes or the specified
portions thereof shall be paid and redeemed by the Company at the applicable
24
redemption price, together with Interest accrued thereon to, but excluding, the
redemption date; provided that if the redemption date falls after a record date
and on or prior the corresponding interest payment date, then accrued and unpaid
Interest, if any, to, but excluding, the date fixed for redemption shall be paid
on such interest payment date to the holders of record of such Notes on the
applicable record date instead of the holders surrendering such Notes for
redemption on such date.
Upon presentation of any Note 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 Note or Notes, of
authorized denominations, in principal amount equal to the unredeemed portion of
the Notes so presented.
Notwithstanding the foregoing, the Trustee shall not redeem any Notes
or mail any notice of redemption during the continuance of a default in payment
of Interest on the Notes. If any Note called for redemption shall not be so paid
upon surrender thereof for redemption, the principal shall, until paid or duly
provided for, bear interest from the redemption date at a rate equal to 1% per
annum plus the rate borne by the Note and such Note shall remain convertible
into Common Stock until the principal and Interest shall have been paid or duly
provided for.
Section 3.04. Conversion Arrangement on Call for Redemption.
In connection with any redemption of Notes, the Company may arrange for
the purchase and conversion of any Notes by an agreement with one or more
investment banks or other purchasers to purchase such Notes by paying to the
Trustee in trust for the Noteholders, on or before the date fixed for
redemption, an amount not less than the applicable redemption price, together
with Interest accrued to, but excluding, the date fixed for redemption, of such
Notes. Notwithstanding anything to the contrary contained in this Article 3, the
obligation of the Company to pay the redemption price of such Notes, together
with Interest accrued to, but excluding, the date fixed for redemption, shall be
deemed to be satisfied and discharged to the extent such amount is so paid by
such purchasers. If such an agreement is entered into, a copy of which will be
filed with the Trustee prior to the date fixed for redemption, any Notes not
duly surrendered for conversion by the holders thereof may, at the option of the
Company, be deemed, to the fullest extent permitted by law, acquired by such
purchasers from such holders and (notwithstanding anything to the contrary
contained in Article 15) surrendered by such purchasers for conversion, all as
of immediately prior to the close of business on the date fixed for redemption
(and the right to convert any such Notes shall be extended through such time),
subject to payment of the above amount as aforesaid. At the direction of the
Company, the Trustee shall hold and dispose of any such amount paid to it in the
same manner as it would monies deposited with it by the Company for the
redemption of Notes. Without the Trustee's prior written consent, no arrangement
between the Company and such purchasers for the purchase and conversion of any
Notes shall increase or otherwise affect any of the powers, duties,
responsibilities or obligations of the Trustee as set forth in this Indenture.
Section 3.05. Repurchase at Option of Holders upon a Designated Event.
(a) If there shall occur a Designated Event at any time prior to
maturity of the Notes, then each Noteholder shall have the right, at such
holder's option, to require the Company to repurchase all of such holder's
Notes, or any portion thereof that is an integral multiple of $1,000 principal
amount, on the date (the "Designated Event Repurchase Date") specified by the
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Company that is thirty (30) days after the date of the Designated Event Notice
(as defined in Section 3.05(b)) of such Designated Event at a cash repurchase
price equal to 100% of the principal amount thereof, together with accrued
Interest, if any, to, but excluding, the Designated Event Repurchase Date;
provided that if such Designated Event Repurchase Date falls after a record date
and on or prior the corresponding interest payment date, then accrued and unpaid
Interest, if any, to, but excluding the Designated Event Repurchase Date shall
be paid on such interest payment date to the holders of record of the Notes on
the applicable record date instead of the holders surrendering the Notes for
repurchase on such date. Repurchases of Notes under this Section 3.05 shall be
made, at the option of the holder thereof, upon:
(i) delivery to the Trustee (or other paying agent appointed
by the Company) by a holder of a duly completed notice (the "Designated
Event Repurchase Notice") in the form set forth on the reverse of the
Note prior to the close of business on the Designated Event Expiration
Time; and
(ii) delivery or book-entry transfer of the Notes to the
Trustee (or other paying agent appointed by the Company) at any time
after delivery of the Designated Event Repurchase Notice (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 as provided in Section 5.02, such delivery being a
condition to receipt by the holder of the repurchase price therefor;
provided that such repurchase price shall be so paid pursuant to this
Section 3.05 only if the Note so delivered to the Trustee (or other
paying agent appointed by the Company) shall conform in all respects to
the description thereof in the related Designated Event Repurchase
Notice.
The Company shall purchase from the holder thereof, pursuant to this
Section 3.05, a portion of a Note, only 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 purchase of all of a Note also apply to the purchase of such portion of
such Note.
Any purchase by the Company contemplated pursuant to the provisions of
this Section 3.05 shall be consummated by the delivery of the consideration to
be received by the holder promptly following the later of the Designated Event
Repurchase Date and the time of the book-entry transfer or delivery of the Note.
Notwithstanding anything herein to the contrary, any holder delivering
to the Trustee (or other paying agent appointed by the Company) the Designated
Event Repurchase Notice contemplated by this Section 3.05 shall have the right
to withdraw such Designated Event Repurchase Notice at any time prior to the
close of business on the Designated Event Expiration Time by delivery of a
written notice of withdrawal to the Trustee (or other paying agent appointed by
the Company) in accordance with Section 3.05(c) below.
The Trustee (or other paying agent appointed by the Company) shall
promptly notify the Company of the receipt by it of any Designated Event
Repurchase Notice or written notice of withdrawal thereof.
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(b) On or before the fifteenth day after the occurrence of a Designated
Event, the Company or at its written request (which must be received by the
Trustee at least five (5) Business Days prior to the date the Trustee is
requested to give notice as described below, unless the Trustee shall agree in
writing to a shorter period), the Trustee, in the name of and at the expense of
the Company, shall mail or cause to be mailed to all holders of record on the
date of the Designated Event a notice (the "Designated Event Notice") of the
occurrence of such Designated Event and of the repurchase right at the option of
the holders arising as a result thereof. Such notice shall be mailed in the
manner and with the effect set forth in the first paragraph of Section 3.02
(without regard for the time limits set forth therein). If the Company shall
give such notice, the Company shall also deliver a copy of the Designated Event
Notice to the Trustee at such time as it is mailed to Noteholders. Concurrently
with the mailing of any Designated Event Notice, the Company shall issue a press
release announcing such Designated Event referred to in the Designated Event
Notice, 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 Designated Event Notice
or any proceedings for the repurchase of any Note which any Noteholder may elect
to have the Company repurchase as provided in this Section 3.05.
Each Designated Event Notice shall specify the circumstances
constituting the Designated Event, the Designated Event Repurchase Date, the
price at which the Company shall be obligated to repurchase Notes, that the
holder must exercise the repurchase right on or prior to the close of business
on the Business Day immediately preceding the Designated Event Repurchase Date
(the "Designated Event Expiration Time"), that the holder shall have the right
to withdraw any Notes surrendered prior to the Designated Event Expiration Time,
a description of the procedure which a Noteholder must follow to exercise such
repurchase right and to withdraw any surrendered Notes, the place or places
where the holder is to surrender such holder's Notes, the amount of Interest
accrued on each Note to the Designated Event Repurchase Date and the CUSIP
number or numbers of the Notes (if then generally in use) and include a form of
Designated Event Repurchase Notice.
No failure of the Company to give the foregoing notices and no defect
therein shall limit the Noteholders' repurchase rights or affect the validity of
the proceedings for the repurchase of the Notes pursuant to this Section 3.05.
(c) A Designated Event Repurchase Notice may be withdrawn by means of a
written notice of withdrawal delivered to the office of the Trustee (or other
paying agent appointed by the Company) in accordance with the Designated Event
Repurchase Notice at any time prior to the Designated Event Expiration Time,
specifying:
(i) the certificate number, if any, of the Note in respect of
which such notice of withdrawal is being submitted, or the appropriate
Depositary information if the Note in respect of which such notice of
withdrawal is being submitted is represented by a Global Note,
(ii) the principal amount of the Note with respect to which
such notice of withdrawal is being submitted, and
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(iii) the principal amount, if any, of such Note which remains
subject to the original Designated Event Repurchase Notice and which
has been or will be delivered for purchase by the Company.
(d) On or prior to the Designated Event Repurchase Date, the Company
will deposit with the Trustee (or other paying agent appointed by the Company 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 Designated Event Repurchase Date all the Notes to be
repurchased on such date at the appropriate repurchase price, together with
accrued Interest to, but excluding, the Designated Event Repurchase Date;
provided that if such payment is made on the Designated Event 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. Subject to receipt of funds and/or Notes
by the Trustee (or other paying agent appointed by the Company), payment for
Notes surrendered for repurchase (and not withdrawn) prior to the Designated
Event Expiration Time will be made promptly (but in no event more than five (5)
Business Days) following the later of (x) the Designated Event Repurchase Date
with respect to such Note (provided the holder has satisfied the conditions in
Section 3.05) and (y) the time of delivery of such Note to the Trustee (or other
paying agent appointed by the Company) by the holder thereof in the manner
required by Section 3.05) by mailing checks for the amount payable to the
holders of such Notes entitled thereto as they shall appear in the Note
Register.
If the Trustee (or other paying agent appointed by the Company) holds
money sufficient to repurchase on the Designated Event Repurchase Date all the
Notes or portions thereof that are to be purchased as of the Designated Event
Repurchase Date, then on or after the Designated Event Repurchase Date (i) the
Notes will cease to be outstanding, (ii) Interest on the Notes will cease to
accrue, and (iii) all other rights of the holders of such Notes will terminate,
whether or not book-entry transfer of the Notes has been made or the Notes have
been delivered to the Trustee or paying agent, other than the right to receive
the repurchase price upon delivery of the Notes.
(e) In the case of a reclassification, change, consolidation, merger,
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 stock, securities or other property or assets (including cash), 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 stock, securities or other property or
assets (including cash) (as determined by the Company, which determination shall
be conclusive and binding), then the Person formed by such consolidation or
resulting from such merger or which acquires such assets, as the case may be,
shall execute and deliver to the Trustee a supplemental indenture (accompanied
by an Opinion of Counsel that such supplemental indenture complies with the
Trust Indenture Act as in force at the date of execution of such supplemental
indenture) modifying the provisions of this Indenture relating to the right of
holders of the Notes to cause the Company to repurchase the Notes following a
Designated Event, including without limitation the applicable provisions of this
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Section 3.05 and the definitions of Common Stock and Designated Event, 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 and the common stock issued by such Person
(in lieu of the Company and the Common Stock of the Company).
(f) The Company will comply with the provisions of Rule 13e-4 and any
other tender offer rules under the Exchange Act (including, without limitation,
filing a Schedule TO or other schedule) to the extent then applicable in
connection with the repurchase rights of the holders of Notes in the event of a
Designated Event.
Section 3.06. Repurchase of Notes by the Company at Option of the Holder.
Unless the Company has elected to redeem all of the Notes in accordance
with Section 3.01, Notes shall be purchased by the Company pursuant to the terms
of the Notes at the option of the holder thereof on June 1, 2011 (the
"Repurchase Date"), for cash, at a repurchase price of 100% of the principal
amount, plus any accrued and unpaid Interest to, but excluding, the Repurchase
Date, subject to the provisions of Section 3.07(a); provided that no Notes may
be repurchased by the Company pursuant to this Section 3.06 if the principal
amount of the Notes has been accelerated and such acceleration has not been
rescinded on or prior to the Repurchase Date. Repurchases of Notes under this
Section 3.06 shall be made, at the option of the holder thereof, upon:
(a) delivery to the Trustee (or other paying agent appointed
by the Company) by a holder of a duly completed notice (the "Repurchase
Notice") in the form set forth on the reverse of the Note during the
period beginning at any time from the opening of business on the date
that is 20 Business Days prior to the Repurchase Date until the close
of business on the date that is two Business Days prior to the
Repurchase Date; and
(b) delivery or book-entry transfer of the Notes to the
Trustee (or other paying agent appointed by the Company) at any time
after delivery of the Repurchase Notice (together with all necessary
endorsements) at the Corporate Trust Office or any other office of the
Trustee (or other paying agent appointed by the Company) in the Borough
of Manhattan as provided in Section 5.02, such delivery being a
condition to receipt by the holder of the repurchase price therefor;
provided that such repurchase price shall be so paid pursuant to this
Section 3.06 only if the Note so delivered to the Trustee (or other
paying agent appointed by the Company) shall conform in all respects to
the description thereof in the related Repurchase Notice.
The Company shall purchase from the holder thereof, pursuant to this
Section 3.06, a portion of a Note, only 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 purchase of all of a Note also apply to the purchase of such portion of
such Note.
Any purchase by the Company contemplated pursuant to the provisions of
this Section 3.06 shall be consummated by the delivery of the consideration to
be received by the holder promptly following the later of the Repurchase Date
and the time of the book-entry transfer or delivery of the Note.
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Notwithstanding anything herein to the contrary, any holder delivering
to the Trustee (or other paying agent appointed by the Company) a Repurchase
Notice contemplated by this Section 3.06 shall have the right to withdraw such
Repurchase Notice at any time prior to the close of business on the Business Day
immediately preceding the Repurchase Date by delivery of a written notice of
withdrawal to the Trustee (or other paying agent appointed by the Company) in
accordance with Section 3.08. The Company is not obligated under this Section
3.06 to repurchase notes listed in such written notice of withdrawal.
The Trustee (or other paying agent appointed by the Company) shall
promptly notify the Company of the receipt by it of any Repurchase Notice or
written notice of withdrawal thereof.
Section 3.07. Company Repurchase Notice.
(a) The Notes to be repurchased on any Repurchase Date pursuant to
Section 3.06 will be paid for in cash.
Unless the Company has elected to redeem all of the Notes in accordance
with Section 3.01, at least three Business Days before the Company Repurchase
Notice Date, the Company shall deliver an Officer's Certificate to the Trustee
specifying:
(i) the information required by Section 3.07(b) in the Company
Repurchase Notice, and
(ii) whether the Company desires the Trustee to give the
Company Repurchase Notice required by Section 3.07(b).
(b) Unless the Company has elected to redeem all of the Notes in
accordance with Section 3.01, in connection with any repurchase of Notes, the
Company shall, no less than 20 Business Days prior to the Repurchase Date (the
"Company Repurchase Notice Date"), give notice to holders at their addresses
shown in the Note Register setting forth information specified in this Section
3.07(b) (the "Company Repurchase Notice"). The Company will also give notice to
beneficial owners as required by applicable law.
The Company Repurchase Notice shall:
(a) state the repurchase price and the Repurchase Date to which the
Company Repurchase Notice relates;
(a) include a form of Repurchase Notice;
(a) state the name and address of the Trustee (or other paying agent
appointed by the Company);
(a) state that Notes must be surrendered to the Trustee (or other
paying agent appointed by the Company) to collect the repurchase price;
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(a) if the Notes are then convertible, state that Notes as to which a
Repurchase Notice has been given may be converted only if the Repurchase Notice
is withdrawn in accordance with the terms of this Indenture; and
(a) state the CUSIP number of the Notes.
The Company Repurchase Notice may be given by the Company or, at the
Company's request, the Trustee shall give such Company Repurchase Notice in the
Company's name and at the Company's expense.
(c) The Company will comply with the provisions of Rule 13e-4 and any
other tender offer rules under the Exchange Act (including, without limitation,
filing a Schedule TO or other schedule) to the extent then applicable in
connection with the repurchase rights of the holders of Notes.
Section 3.08. Effect of Repurchase Notice.
Upon receipt by the Trustee (or other paying agent appointed by the
Company) of the Repurchase Notice specified in Section 3.06, the holder of the
Note in respect of which such Repurchase Notice was given shall (unless such
Repurchase Notice is validly withdrawn) thereafter be entitled to receive solely
the repurchase price with respect to such Note. Such repurchase price shall be
paid to such holder, subject to receipt of funds and/or Notes by the Trustee (or
other paying agent appointed by the Company), promptly following the later of
(x) the Repurchase Date with respect to such Note (provided the holder has
satisfied the conditions in Section 3.06) and (y) the time of delivery of such
Note to the Trustee (or other paying agent appointed by the Company) by the
holder thereof in the manner required by Section 3.06. Notes in respect of which
a Repurchase Notice 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 Notice unless such Repurchase Notice has first been validly
withdrawn.
A Repurchase Notice may be withdrawn by means of a written notice of
withdrawal delivered to the office of the Trustee (or other paying agent
appointed by the Company) in accordance with the Repurchase Notice at any time
prior to the close of business on the Business Day immediately preceding the
Repurchase Date, specifying:
(a) the certificate number, if any, of the Note in respect of which
such notice of withdrawal is being submitted, or the appropriate Depositary
information if the Note in respect of which such notice of withdrawal is being
submitted is represented by a Global Note,
(b) the principal amount of the Note with respect to which such notice
of withdrawal is being submitted, and
(c) the principal amount, if any, of such Note which remains subject to
the original Repurchase Notice and which has been or will be delivered for
repurchase by the Company.
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Section 3.09. Deposit of Repurchase Price.
(a) Prior to 10:00 a.m. (New York City Time) on the Repurchase Date,
the Company shall deposit with the Trustee (or other paying agent appointed by
the Company; or, if the Company or a Subsidiary or an Affiliate of either of
them is acting as the paying agent, shall segregate and hold in trust as
provided in Section 5.04) an amount of cash (in immediately available funds if
deposited on such Business Day), sufficient to pay the aggregate repurchase
price of all the Notes or portions thereof that are to be purchased as of the
Repurchase Date.
(b) If the Trustee or other paying agent appointed by the Company, or
the Company or a Subsidiary or Affiliate of either of them, if such entity is
acting as the paying agent, holds cash sufficient to pay the aggregate
repurchase price of all the Notes, or portions thereof that are to be
repurchased as of the Repurchase Date, on or after the Repurchase Date (i) the
Notes will cease to be outstanding, (ii) Interest on the Notes will cease to
accrue, and (iii) all other rights of the holders of such Notes will terminate,
whether or not book-entry transfer of the Notes has been made or the Notes have
been delivered to the Trustee or paying agent, other than the right to receive
the repurchase price upon delivery of the Notes.
Section 3.10. Notes Repurchased in Part.
Upon presentation of any Note repurchased pursuant to Section 3.05 or
3.06, as the case may be, only in part, 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 Note or Notes, of any authorized
denomination, in aggregate principal amount equal to the unrepurchased portion
of the Notes presented.
Section 3.11. Repayment to the Company.
The Trustee (or other paying agent appointed by the Company) shall
return to the Company any cash or money that remains unclaimed as provided in
Section 13.04, together with interest, if any, thereon, held by them for the
payment of the repurchase price pursuant to Section 3.05 or 3.06, as the case
may be; provided that to the extent that the aggregate amount of cash or money
deposited by the Company pursuant to Section 3.05(d) or Section 3.09, as the
case may be, exceeds the aggregate repurchase price of the Notes or portions
thereof which the Company is obligated to purchase as of the Designated Event
Repurchase Date or the Repurchase Date, as the case may be, then, unless
otherwise agreed in writing with the Company, promptly after the Business Day
following the Designated Event Repurchase Date or the Repurchase Date, as the
case may be, the Trustee shall return any such excess to the Company together
with interest, if any, thereon.
ARTICLE 4
CONTINGENT INTEREST
Section 4.01. Contingent Interest.
Beginning with the six-month interest period commencing June 1, 2011,
the Company will pay contingent interest ("Contingent Interest") to the
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Noteholders for any six-month interest period if the Trading Price for each of
the five Trading Days immediately preceding the first day of the applicable
six-month interest period equals or exceeds 120% of the principal amount of the
Notes. For any six-month interest period when Contingent Interest is payable,
the Contingent Interest payable on each $1,000 principal amount of Note shall
equal 0.40% of the average Trading Price for $1,000 principal amount of Notes
during the five Trading Day measuring period immediately preceding the first day
of applicable six-month interest period used to determine whether Contingent
Interest must be paid.
The Trustee's sole responsibility pursuant to this Section 4.01 hereof
shall be to obtain the Trading Price of the Notes for each of the five Trading
Days immediately preceding the first day of the applicable six-month interest
period and to provide such information to the Company. The Company shall
determine 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 six-month interest period shall be paid on
the applicable interest payment date to the Person in whose name any Note (or
its Predecessor Note) is registered on the Note Register at the corresponding
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 Notes.
Section 4.03. Contingent Interest Notification.
By the first Business Day of a six-month interest period for which
Contingent Interest will be paid, the Company will disseminate a press release
through Business Wire stating that Contingent Interest will be paid on the Notes
and identifying such six-month interest period as the six-month interest period
for which such Contingent Interest will be paid.
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 the redemption price upon
redemption or the repurchase price upon repurchase, in each case pursuant to
Article 3) and Interest, on each of the Notes at the places, at the respective
times and in the manner provided herein and in the Notes.
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 Notes 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
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the Company in respect of the Notes 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 or the corporate trust office of the Trustee in The
Borough of Manhattan which office is located at Xxxxx Fargo Corporate Trust, x/x
Xxx Xxxxxxxxxx Xxxxx Xxxxxxx, 0xx Xxxxx, TADS Dept., 00 Xxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000.
The Company may also from time to time designate co-registrars and one
or more offices or agencies where the Notes may be presented or surrendered for
any or all such purposes and may from time to time rescind such designations.
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,
Note Registrar, Custodian 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 Note Registrar, the Trustee agrees to
mail, or cause to be mailed, the notices set forth in Section 8.10(a) and the
third paragraph of Section 8.11. 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 Notes 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 will cause such
paying agent to execute and deliver to the Trustee an instrument in which such
agent shall agree with the Trustee, subject to the provisions of this Section
5.04:
(a) that it will hold all sums held by it as such agent for
the payment of the principal of or Interest on the Notes (whether such
sums have been paid to it by the Company or by any other obligor on the
Notes) in trust for the benefit of the holders of the Notes;
(a) that it will give the Trustee notice of any failure by the
Company (or by any other obligor on the Notes) to make any payment of
the principal of or Interest on the Notes when the same shall be due
and payable; and
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(a) 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 or
Interest on the Notes, 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 Notes, set aside,
segregate and hold in trust for the benefit of the holders of the Notes 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 Notes) to make any payment of the
principal of or Interest on the Notes 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 13.03 and 13.04.
The Trustee shall not be responsible for the actions of any other
paying agents (including the Company if acting as its own paying agent) and
shall have no control of any funds held by such other paying agents.
Section 5.05. Existence.
Subject to Article 12, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect its existence and
rights (charter and statutory); provided that the Company shall not be required
to preserve any such right if the Company shall determine that the preservation
thereof is no longer desirable in the conduct of the business of the Company and
that the loss thereof is not disadvantageous in any material respect to the
Noteholders.
Section 5.06. Maintenance of Properties.
The Company will cause all properties used or useful in the conduct of
its business or the business of any Significant Subsidiary to be maintained and
kept in good condition, repair and working order and supplied with all necessary
equipment and will cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the judgment of
the Company may be necessary so that the business carried on in connection
therewith may be properly and advantageously conducted at all times; provided
that nothing in this Section shall prevent the Company from discontinuing the
35
operation or maintenance of any of such properties if such discontinuance is, in
the judgment of the Company, desirable in the conduct of its business or the
business of any subsidiary and not disadvantageous in any material respect to
the Noteholders.
Section 5.07. Payment of Taxes and Other Claims.
The Company will pay or discharge, or cause to be paid or discharged,
before the same may become delinquent, (i) all taxes, assessments and
governmental charges levied or imposed upon the Company or any Significant
Subsidiary or upon the income, profits or property of the Company or any
Significant Subsidiary, (ii) all claims for labor, materials and supplies which,
if unpaid, might by law become a lien or charge upon the property of the Company
or any Significant Subsidiary and (iii) all stamp taxes and other duties, if
any, which may be imposed by the United States or any political subdivision
thereof or therein in connection with the issuance, transfer, exchange,
conversion, redemption or repurchase of any Notes or with respect to this
Indenture; provided that, in the case of clauses (i) and (ii), the Company shall
not be required to pay or discharge or cause to be paid or discharged any such
tax, assessment, charge or claim (A) if the failure to do so will not, in the
aggregate, have a material adverse impact on the Company, or (B) if the amount,
applicability or validity is being contested in good faith by appropriate
proceedings.
Section 5.08. 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 Notes or any Common Stock
issued upon conversion thereof which continue to be Restricted Securities in
connection with any sale thereof and any prospective purchaser of Notes 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 Notes or such Common Stock and it will
take such further action as any holder or beneficial holder of such Notes or
such Common Stock may reasonably request, all to the extent required from time
to time to enable such holder or beneficial holder to sell its Notes 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 Notes or such
Common Stock, the Company will deliver to such holder a written statement as to
whether it has complied with such requirements.
Section 5.09. 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 Notes as contemplated herein, wherever
enacted, now or at any time hereafter in force, or which may affect the
36
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 5.10. 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, 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, forthwith 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
Officer's Certificate specifying with particularity such Default or Event of
Default and further stating what action the Company has taken, is taking or
proposes to take with respect thereto.
Any notice required to be given under this Section 5.10 shall be
delivered to a Responsible Officer of the Trustee at its Corporate Trust Office.
Section 5.11. Limitation on Senior Subordinated Indebtedness.
The Company will not incur any Indebtedness that is subordinate in
right of payment to any Senior Indebtedness of the Company unless such
Indebtedness is pari passu with, or subordinated in right of payment to, the
Notes.
Section 5.12. Additional Interest Notice.
In the event that the Company is required to pay Additional Interest to
holders of Notes pursuant to the Registration Rights Agreement, the Company will
provide written notice ("Additional Interest Notice") to the Trustee of the
Company's obligation to pay Additional Interest no later than fifteen (15) days
prior to the proposed payment date for the Additional Interest, and the
Additional Interest Notice shall set forth the amount of Additional Interest 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 Notes to determine the
Additional Interest, or with respect to the nature, extent or calculation of the
amount of Additional Interest when made, or with respect to the method employed
in such calculation of the Additional Interest.
Section 5.13. Contingent Debt Tax Treatment.
The Company agrees, and by acceptance of a beneficial interest in a
Note each holder and any beneficial owner of a Note shall be deemed to have
agreed to treat the Note as indebtedness of the Company for United States
federal income tax purposes that is subject to Treasury Regulation Section
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1.1275-4 or any successor provision (the "contingent payment regulations") 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 the projected payment schedule within the meaning of the contingent payment
regulations. A holder of Notes may obtain the issue price, amount of Tax
Original Issue Discount, issue date, yield to maturity, comparable yield and
projected payment schedule for the Notes, determined by the Company pursuant to
the contingent payment regulations, by submitting a written request for it to
the Company at the following address: Headwaters Incorporated, 00000 Xxxxx
Xxxxxxxxxx Xxxxxxx, Xxxxx 000, Xxxxx Xxxxxx, XX 00000, Attention: Xxxxxx X.
Xxxxxxxx, General Counsel.
Section 5.14. 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
Notes 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
NOTEHOLDERS' LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE
Section 6.01. Noteholders' 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 January 1 and July 1 in each year beginning with July 1, 2004, and at such
other times as the Trustee may request in writing, within thirty (30) days after
receipt by the Company of any such request (or such lesser time as the Trustee
may reasonably request in order to enable it to timely provide any notice to be
provided by it hereunder), a list in such form as the Trustee may reasonably
require of the names and addresses of the holders of Notes as of a date not more
than fifteen (15) days (or such other date as the Trustee may reasonably request
in order to so provide any such notices) prior to the time such information is
furnished, except that no such list need be furnished by the Company to the
Trustee so long as the Trustee is acting as the sole Note 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
Notes contained in the most recent list furnished to it as provided in Section
6.01 or maintained by the Trustee in its capacity as Note Registrar or
co-registrar in respect of the Notes, 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 Noteholders to communicate with other holders of
Notes with respect to their rights under this Indenture or under the Notes, and
the corresponding rights and duties of the Trustee, shall be as provided by the
Trust Indenture Act.
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(c) Every Noteholder, by receiving and holding the same, agrees with
the Company and the Trustee that neither the Company nor the Trustee nor any
agent of either of them shall be held accountable by reason of any disclosure of
information as to names and addresses of holders of Notes made pursuant to the
Trust Indenture Act.
Section 6.03. Reports by Trustee.
(a) Within sixty (60) days after August 1 of each year commencing with
the year 2004, the Trustee shall transmit to holders of Notes such reports dated
as of August 1 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 Notes, be filed by the Trustee with each stock exchange and automated
quotation system upon which the Notes are listed (if applicable) and with the
Company. The Company will promptly notify the Trustee in writing when the Notes
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 Notes, such information, documents and other reports and
such summaries thereof, as may be required pursuant to the Trust Indenture Act
at the times and in the manner provided pursuant to such Act, whether or not the
Notes are governed by such Act; provided that any such information, documents or
reports required to be filed with the Commission pursuant to Section 13 or 15(d)
of the Exchange Act shall be filed with the Trustee within fifteen (15) days
after the same is so required to be filed with the Commission. Delivery of such
reports, information and documents to the Trustee is for informational purposes
only and the Trustee's receipt of such shall not constitute constructive notice
of any information contained therein or determinable from information contained
therein, including the Company's compliance with any of its covenants hereunder
(as to which the Trustee is entitled to rely exclusively on an Officer's
Certificates).
ARTICLE 7
REMEDIES OF THE TRUSTEE AND NOTEHOLDERS ON AN EVENT OF DEFAULT
Section 7.01. Events of Default.
In case one or more of the following Events of Default (whatever the
reason for such Event of Default and whether it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body) shall have occurred and be continuing:
(a) default in the payment of any installment of Interest upon
any of the Notes as and when the same shall become due and payable,
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whether or not such payment shall be prohibited by Article 16, and
continuance of such default for a period of thirty (30) days; or
(b) default in the payment of the principal of any of the
Notes as and when the same shall become due and payable either at
maturity or in connection with any redemption, repurchase or otherwise,
in each case pursuant to Article 3, by acceleration or otherwise,
whether or not such payment shall be prohibited by Article 16; or
(c) default in the Company's obligation to provide a
Designated Event Notice upon a Designated Event as provided in Section
3.05; or
(d) 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 Notes 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 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 Notes at the time outstanding
determined in accordance with Section 9.04; or
(e) the Company shall commence 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 shall consent to any such relief or to the appointment of or taking
possession by any such official in an involuntary case or other
proceeding commenced against the Company, or shall make a general
assignment for the benefit of creditors, or shall fail generally to pay
its debts as they become due; or
(f) an involuntary case or other proceeding shall be commenced
against the Company 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(e) or 7.01(f)), unless the principal of all of the Notes 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 Notes
then outstanding hereunder determined in accordance with Section 9.04, by notice
in writing to the Company (and to the Trustee if given by Noteholders), may
declare the principal of all the Notes, 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 Notes
contained to the contrary notwithstanding. If an Event of Default specified in
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Section 7.01(e) or 7.01(f) occurs, the principal of all the Notes 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 Notes shall have been
so declared due and payable, and before any judgment or decree for the payment
of the monies due shall have been obtained or entered as hereinafter provided,
the Company shall pay or shall deposit with the Trustee a sum sufficient to pay
all matured installments of Interest upon all Notes and the principal of any and
all Notes which shall have become due otherwise than by acceleration (with
interest on overdue installments of Interest (to the extent that payment of such
interest is enforceable under applicable law) and on such principal at the rate
borne by the Notes, to the date of such payment or deposit) and amounts due to
the Trustee pursuant to Section 8.06, and if any and all defaults under this
Indenture, other than the nonpayment of principal of and accrued Interest on
Notes 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 Notes then outstanding, by written
notice to the Company and to the Trustee, may waive all Defaults or Events of
Default and rescind and annul such 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 Notes, and the Trustee shall be restored
respectively to their several positions and rights hereunder, and all rights,
remedies and powers of the Company, the holders of Notes, and the Trustee shall
continue as though no such proceeding had been taken.
Section 7.02. Payments of Notes 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 Notes as and when the
same shall become due and payable, and such default shall have continued for a
period of thirty (30) days, or (b) in case default shall be made in the payment
of the principal of any of the Notes as and when the same shall have become due
and payable, whether at maturity of the Notes or in connection with any
redemption, by or under this Indenture declaration or otherwise, then, upon
demand of the Trustee, the Company will pay to the Trustee, for the benefit of
the holders of the Notes, the whole amount that then shall have become due and
payable on all such Notes for principal 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 Notes, plus 1% 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 Notes to the registered holders, whether or not the Notes are
overdue.
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In case the Company shall fail forthwith to pay such amounts upon such
demand, the Trustee, in its own name and as trustee of an express trust, shall
be entitled and empowered to institute any actions or proceedings at law or in
equity for the collection of the sums so due and unpaid, and may prosecute any
such action or proceeding to judgment or final decree, and may enforce any such
judgment or final decree against the Company or any other obligor on the Notes
and collect in the manner provided by law out of the property of the Company or
any other obligor on the Notes wherever situated the monies adjudged or decreed
to be payable.
In case there shall be pending proceedings for the bankruptcy or for
the reorganization of the Company or any other obligor on the Notes under Title
11 of the United States Code, or any other applicable law, or in case a
receiver, assignee or trustee in bankruptcy or reorganization, liquidator,
sequestrator or similar official shall have been appointed for or taken
possession of the Company or such other obligor, the property of the Company or
such other obligor, or in the case of any other judicial proceedings relative to
the Company or such other obligor upon the Notes, or to the creditors or
property of the Company or such other obligor, the Trustee, irrespective of
whether the principal of the Notes shall then be due and payable as therein
expressed or by declaration or otherwise and irrespective of whether the Trustee
shall have made any demand pursuant to the provisions of this Section 7.02,
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 Notes, 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 Noteholders allowed in such judicial proceedings relative to the Company
or any other obligor on the Notes, its or their creditors, or its or their
property, and to collect and receive any monies or other property payable or
deliverable on any such claims, and to distribute the same after the deduction
of any amounts due the Trustee under Section 8.06, 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 Noteholders to make such payments
to the Trustee, and, in the event that the Trustee shall consent to the making
of such payments directly to the Noteholders, to pay to the Trustee any amount
due it for reasonable compensation, expenses, advances and disbursements,
including 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 Notes may be entitled to
receive in such proceedings, whether in liquidation or under any plan of
reorganization or arrangement or otherwise.
All rights of action and of asserting claims under this Indenture, or
under any of the Notes, may be enforced by the Trustee without the possession of
any of the Notes, or the production thereof 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 Notes.
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In any proceedings brought by the Trustee (and in any proceedings
involving the interpretation of any provision of this Indenture to which the
Trustee shall be a party) the Trustee shall be held to represent all the holders
of the Notes, and it shall not be necessary to make any holders of the Notes
parties to any such proceedings.
Section 7.03. Application of Monies Collected by Trustee.
Any monies or property collected by the Trustee pursuant to this
Article 7 shall be applied in the order following, at the date or dates fixed by
the Trustee for the distribution of such monies or property, upon presentation
of the several Notes and either (i) stamping thereon the payment, if only
partially paid, or (ii) upon surrender thereof, if fully paid.
FIRST: To the payment of all amounts due the Trustee under
Section 8.06;
SECOND: To holders of Senior Indebtedness of the Company to
the extent required by Article 16;
THIRD: In case the principal of the outstanding Notes shall
not have become due and be unpaid, to the payment of Interest on the
Notes in default in the order of the maturity of the installments of
such Interest, with interest (to the extent that such interest has been
collected by the Trustee) upon the overdue installments of Interest at
the rate borne by the Notes, such payments to be made ratably to the
Persons entitled thereto;
FOURTH: In case the principal of the outstanding Notes shall
have become due, by declaration or otherwise, and be unpaid to the
payment of the whole amount then owing and unpaid upon the Notes for
principal and 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 Notes, and in
case such monies shall be insufficient to pay in full the whole amounts
so due and unpaid upon the Notes, then to the payment of such principal
and 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 Note over any other Note,
ratably to the aggregate of such principal and accrued and unpaid
Interest; and
FIFTH: To the payment of the remainder, if any, to the
Company.
Section 7.04. Proceedings by Noteholder.
No holder of any Note 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
Notes then outstanding shall have made written request upon the Trustee to
institute such action, suit or proceeding in its own name as Trustee hereunder
and shall have offered to the Trustee such 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
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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 Note with every other taker and holder and the
Trustee, that no one or more holders of Notes shall have any right in any manner
whatever by virtue of or by reference to any provision of this Indenture to
affect, disturb or prejudice the rights of any other holder of Notes, or to
obtain or seek to obtain priority over or preference to any other such holder,
or to enforce any right under this Indenture, except in the manner herein
provided and for the equal, ratable and common benefit of all holders of Notes
(except as otherwise provided herein). For the protection and enforcement of
this Section 7.04 each and every Noteholder and the Trustee shall be entitled to
such relief as can be given either at law or in equity.
Notwithstanding any other provision of this Indenture and any provision
of any Note, the right of any holder of any Note to receive payment of the
principal of (including the redemption price upon redemption pursuant to Article
7) and accrued Interest on such Note, on or after the respective due dates
expressed in such Note or in the event of redemption, or to institute suit for
the enforcement of any such payment on or after such respective dates against
the Company shall not be impaired or affected without the consent of such
holder.
Anything in this Indenture or the Notes to the contrary
notwithstanding, the holder of any Note, without the consent of either the
Trustee or the holder of any other Note, in 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 Noteholders shall, to the extent
permitted by law, be deemed cumulative and not exclusive of any thereof or of
any other powers and remedies available to the Trustee or the holders of the
Notes, by judicial proceedings or otherwise, to enforce the performance or
observance of the covenants and agreements contained in this Indenture, and no
delay or omission of the Trustee or of any holder of any of the Notes to
exercise any right or power accruing upon any Default or Event of Default
occurring and continuing as aforesaid shall impair any such right or power, or
shall be construed to be a waiver of any such default or any acquiescence
therein, and, subject to the provisions of Section 7.04, every power and remedy
44
given by this Article 7 or by law to the Trustee or to the Noteholders may be
exercised from time to time, and as often as shall be deemed expedient, by the
Trustee or by the Noteholders.
Section 7.07. Direction of Proceedings and Waiver of Defaults by Majority of
Noteholders.
The holders of a majority in aggregate principal amount of the Notes at
the time outstanding determined in accordance with Section 9.04 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, (c) the Trustee may decline to
take any action that would benefit some Noteholder to the detriment of other
Noteholders and (d) the Trustee may decline to take any action that would
involve the Trustee in personal liability. The holders of a majority in
aggregate principal amount of the Notes at the time outstanding determined in
accordance with Section 9.04 may, on behalf of the holders of all of the Notes,
waive any past Default or Event of Default hereunder and its consequences except
(i) a default in the payment of Interest on, or the principal of, the Notes,
(ii) a failure by the Company to convert any Notes into Common Stock, (iii) a
default in the payment of the redemption price pursuant to Article 3, (iv) a
default in the payment of the repurchase price pursuant to Article 3 or (v) a
default in respect of a covenant or provisions hereof which under Article 11
cannot be modified or amended without the consent of the holders of each or all
of the Notes then outstanding or affected thereby. Upon any such waiver, the
Company, the Trustee and the holders of the Notes 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 Notes and this Indenture be deemed to have been cured
and to be not continuing; but no such waiver shall extend to any subsequent or
other Default or Event of Default or impair any right consequent thereon.
Section 7.08. Notice of Default.
The Trustee shall, within ninety (90) days after a Responsible Officer
of the Trustee has actual knowledge of the occurrence of a default, mail to all
Noteholders, as the names and addresses of such holders appear upon the Note
Register, notice of all defaults 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 Notes, 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 Noteholders.
Section 7.09. Undertaking to Pay Costs.
All parties to this Indenture agree, and each holder of any Note by his
acceptance thereof shall be deemed to have agreed, that any court may, in its
discretion, require, in any suit for the enforcement of any right or remedy
under this Indenture, or in any suit against the Trustee for any action taken or
omitted by it as Trustee, the filing by any party litigant in such suit of an
45
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 Noteholder, or group of Noteholders, holding in the aggregate
more than ten percent in principal amount of the Notes at the time outstanding
determined in accordance with Section 9.04, or to any suit instituted by any
Noteholder for the enforcement of the payment of the principal of or Interest on
any Note on or after the due date expressed in such Note or to any suit for the
enforcement of the right to convert any Note in accordance with the provisions
of Article 15.
ARTICLE 8
THE TRUSTEE
Section 8.01. Duties and Responsibilities of Trustee.
The Trustee, prior to the occurrence of an Event of Default and after
the curing of all Events of Default which may have occurred, undertakes to
perform such duties and only such duties as are specifically set forth in this
Indenture. In case an Event of Default has occurred (which has not been cured or
waived), the Trustee shall exercise such of the rights and powers vested in it
by this Indenture, and use the same degree of care and skill in their exercise,
as a prudent person would exercise or use under the circumstances in the conduct
of such person's own affairs.
No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own willful misconduct, except that:
(a) prior to the occurrence of an Event of Default and after
the curing or waiving of all Events of Default which may have occurred:
(i) the duties and obligations of the Trustee shall
be determined solely by the express provisions of this
Indenture and the Trust Indenture Act, and the Trustee shall
not be liable except for the performance of such duties and
obligations as are specifically set forth in this Indenture
and no implied covenants, duties or obligations shall be read
into this Indenture and the Trust Indenture Act against the
Trustee; and
(ii) in the absence of bad faith and willful
misconduct on the part of the Trustee, the Trustee may
conclusively rely as to the truth of the statements and the
correctness of the opinions expressed therein, upon any
certificates or opinions furnished to the Trustee and
conforming to the requirements of this Indenture; but, in the
case of any such certificates or opinions which by any
provisions hereof are specifically required to be furnished to
46
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 but need not confirm or
investigate the accuracy of mathematical calculations or other
facts stated therein;
(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 Notes 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) 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;
(e) the Trustee shall not be liable in respect of any payment
(as to the correctness of amount, entitlement to receive or any other
matters relating to payment) or notice effected by the Company or any
paying agent or any records maintained by any co-registrar with respect
to the Notes;
(f) 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; and
(g) the Trustee shall not be deemed to have knowledge of any
Event of Default hereunder unless it shall have been notified in
writing of such Event of Default by the Company or the holders of at
least 10% in aggregate principal amount of the Notes.
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.
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;
47
(b) any request, direction, order or demand of the Company
mentioned herein shall be sufficiently evidenced by an Officer's
Certificate (unless other evidence in respect thereof be herein
specifically prescribed); and any resolution of the Board of Directors
may be evidenced to the Trustee by a copy thereof certified by the
Secretary or an Assistant Secretary of the Company;
(c) the Trustee may consult with counsel of its 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 Noteholders pursuant to the provisions
of this Indenture, unless such Noteholders 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 at the expense of the Company, and shall incur no
liability of any kind by reason of such inquiry or investigation;
(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
Officer's Certificate setting forth the names of individuals and/or
titles of officers authorized at such time to take specified actions
pursuant to this Indenture, which Officer's Certificate may be signed
by any person authorized to sign an Officer's Certificate, including
any person specified as so authorized in any such certificate
previously delivered and not superseded; and
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(j) any permissive right or authority granted to the Trustee
shall not be construed as a mandatory duty.
Section 8.03. No Responsibility for Recitals, Etc.
The recitals contained herein and in the Notes (except in the Trustee's
certificate of authentication) shall be taken as the statements of the Company,
and the Trustee assumes no responsibility for the correctness of the same. The
Trustee makes no representations as to the validity or sufficiency of this
Indenture or of the Notes. The Trustee shall not be accountable for the use or
application by the Company of any Notes or the proceeds of any Notes
authenticated and delivered by the Trustee in conformity with the provisions of
this Indenture.
Section 8.04. Trustee, Paying Agents, Conversion Agents or Registrar May Own
Notes.
The Trustee, any paying agent, any conversion agent or Note Registrar,
in its individual or any other capacity, may become the owner or pledgee of
Notes with the same rights it would have if it were not Trustee, paying agent,
conversion agent or Note Registrar.
Section 8.05. Monies to Be Held in Trust.
Subject to the provisions of Section 13.04, 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 shall be determined to have been caused by
its own negligence or willful misconduct. 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, bad faith or
willful misconduct 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 of defending
themselves against any claim (whether asserted by the Company, any holder or any
other Person) of liability in the premises. The obligations of the Company under
49
this Section 8.06 to compensate or indemnify the Trustee and to pay or reimburse
the Trustee for expenses, disbursements and advances shall be secured by a lien
prior to that of the Notes 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 Notes. The obligation of the Company under this Section shall survive
the satisfaction and discharge 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(e) or (f) with respect to the Company occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any bankruptcy, insolvency or similar laws.
Section 8.07. Officer's 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 Officer's 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 (i) eliminate such
interest within 90 days, (ii) apply to the Commission for permission to continue
as trustee or (iii) resign, in each case 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 Notes. 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
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appointed and have accepted appointment sixty (60) days after the mailing of
such notice of resignation to the Noteholders, the resigning Trustee may, upon
ten (10) Business Days' notice to the Company and the Noteholders, petition, at
the expense of the Company, any court of competent jurisdiction for the
appointment of a successor trustee, or, any Noteholder who has been a bona fide
holder of a Note or Notes for at least six (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 Noteholder who has
been a bona fide holder of a Note or Notes for at least six (6) months;
or
(ii) the Trustee shall cease to be eligible in accordance with
the provisions of Section 8.09 and shall fail to resign after written
request therefor by the Company or by any such Noteholder; 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 Noteholder who has been a bona fide holder of a
Note or Notes 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 such Noteholder has removed the
Trustee, or the Trustee resigns, the Trustee so removed may petition, at the
expense of the Company, any court of competent jurisdiction for an appointment
of a successor trustee. Such court may thereupon, after such notice, if any, as
it may deem proper and prescribe, remove the Trustee and appoint a successor
trustee.
(c) The holders of a majority in aggregate principal amount of the
Notes at the time outstanding may at any time remove the Trustee and nominate a
successor trustee which shall be deemed appointed as successor trustee unless,
within ten (10) days after notice to the Company of such nomination, the Company
objects thereto, in which case the Trustee so removed or any Noteholder, or, if
such Trustee so removed or any Noteholder 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.
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(d) Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section 8.10 shall
become effective upon acceptance of appointment by the successor trustee as
provided in Section 8.11.
(e) Notwithstanding the replacement of the Trustee pursuant to this
Section, the Company's obligations under Section 8.06 shall continue for the
benefit of the retiring Trustee.
Section 8.11. Acceptance by Successor Trustee.
Any successor trustee appointed as provided in Section 8.10 shall
execute, acknowledge and deliver to the Company and to its predecessor trustee
an instrument accepting such appointment hereunder, and thereupon the
resignation or removal of the predecessor trustee shall become effective and
such successor trustee, without any further act, deed or conveyance, shall
become vested with all the rights, powers, duties and obligations of its
predecessor hereunder, with like effect as if originally named as trustee
herein; but, nevertheless, on the written request of the Company or of the
successor trustee, the trustee ceasing to act shall, upon payment of any amount
then due it pursuant to the provisions of Section 8.06, execute and deliver an
instrument transferring to such successor trustee all the rights and powers of
the trustee so ceasing to act. Upon request of any such successor trustee, the
Company shall execute any and all instruments in writing for more fully and
certainly vesting in and confirming to such successor trustee all such rights
and powers. Any trustee ceasing to act shall, nevertheless, retain a lien upon
all property and funds held or collected by such trustee as such, except for
funds held in trust for the benefit of holders of particular Notes, 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 Notes at their addresses as they shall
appear on the Note Register. If the Company fails to mail such notice within ten
(10) days after acceptance of appointment by the successor trustee, the
successor trustee shall cause such notice to be mailed at the expense of the
Company.
Section 8.12. Succession by Merger.
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation 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 corporation succeeding to all or substantially all of the
corporate trust business of the Trustee, such corporation shall be qualified
under the provisions of Section 8.08 and eligible under the provisions of
Section 8.09.
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In any case where at the time such successor to the Trustee shall
succeed to the trusts created by this Indenture, any of the Notes shall have
been authenticated but not delivered, any such successor to the Trustee may
adopt the certificate of authentication of any predecessor trustee or
authenticating agent appointed by such predecessor trustee, and deliver such
Notes so authenticated; and in case at that time any of the Notes shall not have
been authenticated, any successor to the Trustee or any authenticating agent
appointed by such successor trustee may authenticate such Notes in the name of
the successor trustee; and in all such cases such certificates shall have the
full force that is provided in the Notes or in this Indenture; provided that the
right to adopt the certificate of authentication of any predecessor Trustee or
to authenticate Notes in the name of any predecessor Trustee shall apply only to
its successor or successors by merger, conversion or consolidation.
Section 8.13. Preferential Collection of Claims.
If and when the Trustee shall be or become a creditor of the Company
(or any other obligor upon the Notes), the Trustee shall be subject to the
provisions of the Trust Indenture Act regarding the collection of the claims
against the Company (or any such other obligor).
Section 8.14. Trustee's Application for Instructions from the Company.
Any application by the Trustee for written instructions from the
Company (other than with regard to any action proposed to be taken or omitted to
be taken by the Trustee that affects the rights of the holders of the Notes
under this Indenture) may, at the option of the Trustee, set forth in writing
any action proposed to be taken or omitted by the Trustee under this Indenture
and the date on and/or after which such action shall be taken or such omission
shall be effective. The Trustee shall not be liable for any action taken by, or
omission of, the Trustee in accordance with a proposal included in such
application on or after the date specified in such application (which date shall
not be less than three (3) Business Days after the date any officer of the
Company actually receives such application, unless any such officer shall have
consented in writing to any earlier date) unless prior to taking any such action
(or the effective date in the case of an omission), the Trustee shall have
received written instructions in response to such application specifying the
action to be taken or omitted.
ARTICLE 9
THE NOTEHOLDERS
Section 9.01. Action by Noteholders.
Whenever in this Indenture it is provided that the holders of a
specified percentage in aggregate principal amount of the Notes may take any
action (including the making of any demand or request, the giving of any notice,
consent or waiver or the taking of any other action), the fact that, at the time
of taking any such action, the holders of such specified percentage have joined
therein may be evidenced (a) by any instrument or any number of instruments of
similar tenor executed by Noteholders in person or by agent or proxy appointed
in writing, or (b) by the record of the holders of Notes voting in favor thereof
at any meeting of Noteholders duly called and held in accordance with the
provisions of Article 10, or (c) by a combination of such instrument or
53
instruments and any such record of such a meeting of Noteholders. Whenever the
Company or the Trustee solicits the taking of any action by the Noteholders, 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 Noteholders.
Subject to the provisions of Sections 8.01, 8.02 and 10.05, proof of
the execution of any instrument by a Noteholder 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 Notes shall be proved by the registry of such Notes
or by a certificate of the Note Registrar.
The record of any Noteholders' 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 Note Registrar may deem the Person in whose name such Note shall be
registered upon the Note Register to be, and may treat it as, the absolute owner
of such Note (whether or not such Note shall be overdue and notwithstanding any
notation of ownership or other writing thereon made by any Person other than the
Company or any Note Registrar) for the purpose of receiving payment of or on
account of the principal of and Interest on such Note, for conversion of such
Note and for all other purposes; and neither the Company nor the Trustee nor any
paying agent nor any conversion agent nor any Note Registrar shall be affected
by any notice to the contrary. All such payments so made to any holder for the
time being, or upon such holder's order, shall be valid and, to the extent of
the sum or sums so paid, effectual to satisfy and discharge the liability for
monies payable upon any such Note.
Section 9.04. Company-owned Notes Disregarded.
In determining whether the holders of the requisite aggregate principal
amount of Notes have concurred in any direction, consent, waiver or other action
under this Indenture, Notes which are owned by the Company or any other obligor
on the Notes or any Affiliate of the Company or any other obligor on the Notes
shall be disregarded and deemed not to be outstanding for the purpose of any
such determination; provided that, for the purposes of determining whether the
Trustee shall be protected in relying on any such direction, consent, waiver or
other action, only Notes which a Responsible Officer knows are so owned shall be
so disregarded. Notes so owned which have been pledged in good faith may be
regarded as outstanding for the purposes of this Section 9.04 if the pledgee
shall establish to the satisfaction of the Trustee the pledgee's right to vote
such Notes and that the pledgee is not the Company, any other obligor on the
Notes or any Affiliate of the Company or any such other obligor. In the case of
a dispute as to such right, any decision by the Trustee taken upon the advice of
counsel shall be full protection to the Trustee. Upon request of the Trustee,
54
the Company shall furnish to the Trustee promptly an Officer's Certificate
listing and identifying all Notes, if any, known by the Company to be owned or
held by or for the account of any of the above described Persons, and, subject
to Section 8.01, the Trustee shall be entitled to accept such Officer's
Certificate as conclusive evidence of the facts therein set forth and of the
fact that all Notes 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 Notes specified in this
Indenture in connection with such action, any holder of a Note which is shown by
the evidence to be included in the Notes the holders of which have consented to
such action may, by filing written notice with the Trustee at its Corporate
Trust Office and upon proof of holding as provided in Section 9.02, revoke such
action so far as concerns such Note. Except as aforesaid, any such action taken
by the holder of any Note shall be conclusive and binding upon such holder and
upon all future holders and owners of such Note and of any Notes issued in
exchange or substitution therefor, irrespective of whether any notation in
regard thereto is made upon such Note or any Note issued in exchange or
substitution therefor.
ARTICLE 10
MEETINGS OF NOTEHOLDERS
Section 10.01. Purpose of Meetings.
A meeting of Noteholders may be called at any time and from time to
time pursuant to the provisions of this Article 10 for any of the following
purposes:
(a) to give any notice to the Company or to the Trustee or to
give any directions to the Trustee permitted under this Indenture, or
to consent to the waiving of any Default or Event of Default hereunder
and its consequences, or to take any other action authorized to be
taken by Noteholders pursuant to any of the provisions of Article 7;
(b) to remove the Trustee and nominate a successor trustee
pursuant to the provisions of Article 8;
(c) to consent to the execution of an indenture or indentures
supplemental hereto pursuant to the provisions of Section 11.02; or
(d) to take any other action authorized to be taken by or on
behalf of the holders of any specified aggregate principal amount of
the Notes under any other provision of this Indenture or under
applicable law.
Section 10.02. Call of Meetings by Trustee.
The Trustee may at any time call a meeting of Noteholders 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 Noteholders, setting
forth the time and place of such meeting and in general terms the action
55
proposed to be taken at such meeting and the establishment of any record date
pursuant to Section 9.01, shall be mailed to holders of Notes at their addresses
as they shall appear on the Note Register. Such notice shall also be mailed to
the Company. Such notices shall be mailed not less than twenty (20) nor more
than ninety (90) days prior to the date fixed for the meeting.
Any meeting of Noteholders shall be valid without notice if the holders
of all Notes then outstanding are present in person or by proxy or if notice is
waived before or after the meeting by the holders of all Notes outstanding, and
if the Company and the Trustee are either present by duly authorized
representatives or have, before or after the meeting, waived notice.
Section 10.03. Call of Meetings by Company or Noteholders.
In case at any time the Company, pursuant to a resolution of its Board
of Directors, or the holders of at least ten percent (10%) in aggregate
principal amount of the Notes then outstanding, shall have requested the Trustee
to call a meeting of Noteholders, by written request setting forth in reasonable
detail the action proposed to be taken at the meeting, and the Trustee shall not
have mailed the notice of such meeting within twenty (20) days after receipt of
such request, then the Company or such Noteholders may determine the time and
the place for such meeting and may call such meeting to take any action
authorized in Section 10.01 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 Noteholders, a person shall
(a) be a holder of one or more Notes on the record date pertaining to such
meeting or (b) be a person appointed by an instrument in writing as proxy by a
holder of one or more Notes 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
Noteholders shall be the persons entitled to vote at such meeting and their
counsel and any representatives of the Trustee and its counsel and any
representatives of the Company and its counsel.
Section 10.05. Regulations.
Notwithstanding any other provisions of this Indenture, the Trustee may
make such reasonable regulations as it may deem advisable for any meeting of
Noteholders, in regard to proof of the holding of Notes and of the appointment
of proxies, and in regard to the appointment and duties of inspectors of votes,
the submission and examination of proxies, certificates and other evidence of
the right to vote, and such other matters concerning the conduct of the meeting
as it shall think fit.
The Trustee shall, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called by the
Company or by Noteholders as provided in Section 10.03, in which case the
Company or the Noteholders calling the meeting, as the case may be, shall in
like manner appoint a temporary chairman. A permanent chairman and a permanent
secretary of the meeting shall be elected by vote of the holders of a majority
in principal amount of the Notes represented at the meeting and entitled to vote
at the meeting.
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Subject to the provisions of Section 9.04, at any meeting each
Noteholder or proxyholder shall be entitled to one vote for each $1,000
principal amount of Notes held or represented by him; provided that no vote
shall be cast or counted at any meeting in respect of any Note challenged as not
outstanding and ruled by the chairman of the meeting to be not outstanding. The
chairman of the meeting shall have no right to vote other than by virtue of
Notes held by him or instruments in writing as aforesaid duly designating him as
the proxy to vote on behalf of other Noteholders. Any meeting of Noteholders
duly called pursuant to the provisions of Section 10.02 or 10.03 may be
adjourned from time to time by the holders of a majority of the aggregate
principal amount of Notes represented at the meeting, whether or not
constituting a majority of the aggregate principal amount of Notes outstanding,
the latter of which shall constitute 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 Noteholders
shall be by written ballot on which shall be subscribed the signatures of the
holders of Notes or of their representatives by proxy and the outstanding
principal amount of the Notes held or represented by them. The permanent
chairman of the meeting shall appoint two inspectors of votes who shall count
all votes cast at the meeting for or against any resolution and who shall make
and file with the secretary of the meeting their verified written reports in
duplicate of all votes cast at the meeting. A record in duplicate of the
proceedings of each meeting of Noteholders shall be prepared by the secretary of
the meeting, and there shall be attached to said record the original reports of
the inspectors of votes on any vote by ballot taken thereat and affidavits by
one or more persons having knowledge of the facts setting forth a copy of the
notice of the meeting and showing that said notice was mailed as provided in
Section 10.02. The record shall show the principal amount of the Notes voting in
favor of or against any resolution. The record shall be signed and verified by
the affidavits of the permanent chairman and secretary of the meeting and one of
the duplicates shall be delivered to the Company and the other to the Trustee to
be preserved by the Trustee, the latter to have attached thereto the ballots
voted at the meeting.
Any record so signed and verified shall be conclusive evidence of the
matters therein stated.
Section 10.07. 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 Noteholders 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 Noteholders under any of the provisions of
this Indenture or of the Notes.
57
ARTICLE 11
SUPPLEMENTAL INDENTURES
Section 11.01. Supplemental Indentures Without Consent of Noteholders.
The Company, when authorized by the resolutions of the Board of
Directors, and the Trustee may, from time to time, and at any time enter into an
indenture or indentures supplemental hereto for one or more of the following
purposes:
(a) make provision with respect to the conversion rights of
the holders of Notes pursuant to the requirements of Section 15.06 and
the repurchase obligations of the Company pursuant to the requirements
of Section 3.05(e);
(b) to convey, transfer, assign, mortgage or pledge to the
Trustee as security for the Notes, any property or assets;
(c) to evidence the succession of another Person to the
Company, or successive successions, and the assumption by the successor
Person of the covenants, agreements and obligations of the Company
pursuant to Article 12;
(d) to add to the covenants of the Company such further
covenants, restrictions or conditions as the Board of Directors and the
Trustee shall consider to be for the benefit of the holders of Notes,
and to make the occurrence, or the occurrence and continuance, of a
default in any such additional covenants, restrictions or conditions a
default or an Event of Default permitting the enforcement of all or any
of the several remedies provided in this Indenture as herein set forth;
provided that, in respect of any such additional covenant, restriction
or condition, such supplemental indenture may provide for a particular
period of grace after default (which period may be shorter or longer
than that allowed in the case of other defaults) or may provide for an
immediate enforcement upon such default or may limit the remedies
available to the Trustee upon such default;
(e) to provide for the issuance under this Indenture of Notes
in coupon form (including Notes registrable as to principal only) and
to provide for exchangeability of such Notes with the Notes issued
hereunder in fully registered form and to make all appropriate changes
for such purpose;
(f) to cure any ambiguity or to correct or supplement any
provision contained herein or in any supplemental indenture that may be
defective or inconsistent with any other provision contained herein or
in any supplemental indenture, or to make such other provisions in
regard to matters or questions arising under this Indenture that shall
not materially adversely affect the interests of the holders of the
Notes;
(g) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Notes;
58
(h) to modify, eliminate or add to the provisions of this
Indenture to such extent as shall be necessary to effect the
qualifications of this Indenture under the Trust Indenture Act, or
under any similar federal statute hereafter enacted;
(i) to increase, from time to time, the per annum interest
rate on the Notes for any period; or
(j) to make any changes to Article 16 that would limit or
terminate the benefits available to any holder of Senior Indebtedness
of the Company.
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; provided that 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 Notes at the time outstanding, notwithstanding any of the
provisions of Section 11.02.
Notwithstanding any other provision of the Indenture or the Notes, the
Registration Rights Agreement and the obligation to pay Additional Interest
thereunder may be amended, modified or waived only in accordance with the
provisions of the Registration Rights Agreement.
Section 11.02. Supplemental Indenture with Consent of Noteholders.
With the consent (evidenced as provided in Article 9) of the holders of
at least a majority in aggregate principal amount of the Notes 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 Notes; provided that no such supplemental indenture
shall (i) extend the fixed maturity of any Note, (ii) reduce the rate or extend
the time of payment of Interest thereon, (iii) reduce the principal amount
thereof or reduce any amount payable on redemption or repurchase thereof, (iv)
change the obligation of the Company to repurchase any Note at the option of a
Noteholder on a Repurchase Date in a manner adverse to the holders of Notes, (v)
change the obligation of the Company to repurchase any Note upon the happening
of a Designated Event in a manner adverse to the holders of Notes, (vi) impair
the right of any Noteholder to institute suit for the payment thereof, (vii)
make the principal thereof or Interest thereon payable in any coin or currency
other than that provided in the Notes, (viii) impair the right to convert the
Notes into Common Stock or reduce the number of shares of Common Stock or any
other property receivable by a Noteholder upon conversion subject to the terms
set forth herein, including Section 15.06, in each case, without the consent of
59
the holder of each Note so affected, (ix) 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 Note so affected, (x) 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, (xi) reduce the quorum or voting
requirements set forth in Article 10, (xii) make any change in Article 16 that
adversely affects the rights of any Noteholder under Article 16 or (xiii) reduce
the aforesaid percentage of Notes, the holders of which are required to consent
to any such supplemental indenture, without the consent of the holders of all
Notes 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 Noteholders 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 Noteholders under this
Section 11.02 to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such consent shall approve the
substance thereof.
Section 11.03. Effect of Supplemental Indenture.
Any supplemental indenture executed pursuant to the provisions of this
Article 11 shall comply with the Trust Indenture Act, as then in effect,
provided that this Section 11.03 shall 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 Notes shall thereafter be determined, exercised and
enforced hereunder, subject in all respects to such modifications and amendments
and all the terms and conditions of any such supplemental indenture shall be and
be deemed to be part of the terms and conditions of this Indenture for any and
all purposes.
Section 11.04. Notation on Notes.
Notes 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
Notes so modified as to conform, in the opinion of the Trustee and the Board of
Directors, to any modification of this Indenture contained in any such
supplemental indenture may, at the Company's expense, be prepared and executed
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by the Company, authenticated by the Trustee (or an authenticating agent duly
appointed by the Trustee pursuant to Section 17.11) and delivered in exchange
for the Notes then outstanding, upon surrender of such Notes 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 Officer's 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 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 is a corporation organized and
existing under the laws of the United States of America, any state thereof or
the District of Columbia; (ii) upon any such consolidation, merger, sale,
conveyance, transfer or lease, the due and punctual payment of the principal of
and Interest on all of the Notes 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 and substance to the Trustee,
executed and delivered to the Trustee by the Person (if other than the Company
and other than a Person who is a successor to the Company's obligations
hereunder and under the Note by operation of law) 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 lapse 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 Notes 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
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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 Headwaters Incorporated any or all of the Notes, 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 Notes that previously shall have been
signed and delivered by the officers of the Company to the Trustee for
authentication and any Notes that such successor Person thereafter shall cause
to be signed and delivered to the Trustee for that purpose. All the Notes so
issued shall in all respects have the same legal rank and benefit under this
Indenture as the Notes theretofore or thereafter issued in accordance with the
terms of this Indenture as though all of such Notes had been issued at the date
of the execution hereof. In the event of any such consolidation, merger, sale,
conveyance, 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 Notes 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 Notes thereafter to be issued as may be appropriate.
Section 12.03. Opinion of Counsel to Be Given to Trustee.
The Trustee shall receive an Officer's 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
Notes theretofore authenticated (other than any Notes that have been destroyed,
lost or stolen and in lieu of or in substitution for which other Notes shall
have been authenticated and delivered) and not theretofore canceled, or (b) all
the Notes not theretofore canceled or delivered to the Trustee for cancellation
shall have become due and payable, or are by their terms to become due and
payable within one year or are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice of redemption,
and the Company shall deposit with the Trustee, in trust, funds sufficient to
pay at maturity or upon redemption of all of the Notes (other than any Notes
that shall have been mutilated, destroyed, lost or stolen and in lieu of or in
substitution for which other Notes shall have been authenticated and delivered)
not theretofore canceled or delivered to the Trustee for cancellation, including
principal and Interest due or to become due to such date of maturity or
redemption date, as the case may be, accompanied by a verification report, as to
the sufficiency of the deposited amount, from an independent certified
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accountant or other financial professional satisfactory to the Trustee, and if
the Company shall also pay or cause to be paid all other sums payable hereunder
by the Company, then this Indenture shall cease to be of further effect (except
as to (i) remaining rights of registration of transfer, substitution and
exchange and conversion of Notes, (ii) rights hereunder of Noteholders to
receive payments of principal of and Interest on the Notes and the other rights,
duties and obligations of Noteholders, as beneficiaries hereof with respect to
the amounts, if any, so deposited with the Trustee and (iii) the rights,
obligations and immunities of the Trustee hereunder), and the Trustee, on
written demand of the Company accompanied by an Officer's Certificate and an
Opinion of Counsel as required by Section 17.05 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
Notes. The Trustee shall hold in trust money or Common Stock deposited with it
pursuant to this Article 13. It shall apply the deposited money and Common Stock
through the Paying Agent and in accordance with this Indenture to the payment of
principal of and Interest on the Notes. Money and Common Stock so held in trust
are not subject to Article 16.
Section 13.02. Deposited Monies to Be Held in Trust by Trustee.
Subject to Section 13.04, all monies deposited with the Trustee
pursuant to Section 13.01 shall be held in trust for the sole benefit of the
Noteholders, and such monies shall be applied by the Trustee to the payment,
either directly or through any paying agent (including the Company if acting as
its own paying agent), to the holders of the particular Notes for the payment or
redemption of which such monies have been deposited with the Trustee of all sums
due and to become due thereon for principal and Interest.
Section 13.03. Paying Agent to Repay Monies Held.
Upon the satisfaction and discharge of this Indenture, all monies then
held by any paying agent of the Notes (other than the Trustee) shall, upon
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 13.04. 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 or Interest on Notes
and not applied but remaining unclaimed by the holders of Notes for two years
(or such shorter period of time under applicable escheat law) after the date
upon which the principal of or Interest on such Notes, 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 Notes 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.
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Section 13.05. Reinstatement.
If the Trustee or the paying agent is unable to apply any money in
accordance with Section 13.02 by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, the Company's obligations under this Indenture and the Notes shall
be revived and reinstated as though no deposit had occurred pursuant to Section
13.01 until such time as the Trustee or the paying agent is permitted to apply
all such money in accordance with Section 13.02; provided that, if the Company
makes any payment of Interest on or principal of any Note following the
reinstatement of its obligations, the Company shall be subrogated to the rights
of the holders of such Notes to receive such payment from the money held by the
Trustee or paying agent.
ARTICLE 14
IMMUNITY OF INCORPORATORS, SHAREHOLDERS, OFFICERS AND DIRECTORS
Section 14.01. Indenture and Notes Solely Corporate Obligations.
No recourse for the payment of the principal of or Interest on any
Note, 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 Note, or because of
the creation of any indebtedness represented thereby, shall be had against any
incorporator, shareholder, employee, agent, officer, director or subsidiary, as
such, past, present or future, of the Company or of any successor corporation,
either directly or through the Company or any successor corporation, whether by
virtue of any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise; it being expressly understood that all such
liability is hereby expressly waived and released as a condition of, and as a
consideration for, the execution of this Indenture and the issue of the Notes.
ARTICLE 15
CONVERSION OF NOTES
Section 15.01. Right to Convert.
(a) Subject to and upon compliance with the provisions of this
Indenture, prior to the close of business on June 1, 2016, the holder of any
Note shall have the right, at such holder's option, to convert the principal
amount of the Note, or any portion of such principal amount which is a 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 Note 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 Notes shall be convertible only
upon the occurrence of one of the following events:
(i) prior to June 1, 2011, during any Calendar Quarter
commencing after June 30, 2004, if the Closing Sale Price of the Common
Stock exceeds 130% of the then-effective Conversion Price for at least
20 Trading Days in the 30 consecutive Trading Day period ending on the
last Trading Day of the immediately preceding Calendar Quarter (it
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being understood for purposes of this Section 15.01(a)(i) that the
Conversion Price in effect at the close of business on each of the 30
consecutive Trading Days should be used);
(ii) at any time on or after June 1, 2011, if the Closing Sale
Price of the Common Stock exceeds 130% of the then-effective Conversion
Price on any Trading Day;
(iii) during any period in which (1) the credit rating
assigned to the Notes by either Standard & Poor's Rating Services
("S&P") or Xxxxx'x Investors Service, Inc. ("Moody's"), if either S&P
or Moody's assigns a credit rating to the Notes, is three or more
rating subcategories below the initial credit rating assigned by S&P or
Moody's, as the case may be, or (2) if the Notes are previously
assigned a credit rating by either S&P or Moody's, the Notes are no
longer rated by at least one of, or ratings thereof are suspended by
both, S&P and Moody's.
(iv) during the five Business Day period immediately following
any five consecutive Trading Day period (the "Measurement Period") in
which the Trading Price per $1,000 principal amount of the Notes for
each day of such Measurement Period was less than 98% of the product of
the Closing Sale Price and the number of shares of Common Stock
issuable upon conversion of $1,000 principal amount of the Notes;
provided that no conversion pursuant to this clause (iv) may be made if
on any Trading Day during the Measurement Period, the Closing Sale
Price is more than 100% but less than 120% of the Conversion Price on
such Trading Day;
(v) if such Note has been called for redemption, at any time
on or after the date the notice of redemption has been given until the
close of business on the Business Day immediately preceding the
redemption date; or
(vi) as provided in Section (b) of this Section 15.01.
The Trustee (or other conversion agent appointed by the Company) shall,
on behalf of the Company, determine on a daily basis during the time period
specified in Sections 15.01(a)(i) and (ii) whether the Notes shall be
convertible as a result of the occurrence of an event specified in clause (i) or
(ii) above and, if the Notes shall be so convertible, the Trustee (or other
conversion agent appointed by the Company) shall promptly deliver to the Company
and the Trustee (if the Trustee is not the conversion agent) written notice
thereof. Whenever the Notes 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 17.03, and the Company
shall also publicly announce such information and publish it on the Company's
web site. Any notice so given shall be conclusively presumed to have been duly
given, whether or not the holder receives such notice.
The Trustee (or other conversion agent appointed by the Company) shall
have no obligation to determine the Trading Price under this Section 15.01
unless the Company has requested such a determination; and the Company shall
have no obligation to make such request unless a holder provides it with
reasonable evidence that the Trading Price per $1,000 principal amount of Notes
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would be less than 98% of the product of the Closing Sale Price and the number
of shares of Common Stock issuable upon conversion of $1,000 principal amount of
Notes. If such evidence is provided, the Company shall instruct the Trustee (or
other conversion agent) to determine the Trading Price of the Notes beginning on
the next Trading Day and on each successive Trading Day until the Trading Price
per $1,000 principal amount of Notes is greater than or equal to 98% of the
product of the Closing Sale Price and the number of shares issuable upon
conversion of $1,000 principal amount of the Notes; provided that the Trustee
shall be under no duty or obligation to make the calculations described in
Section 15.01(a)(iv) hereof or to determine whether the Notes are convertible
pursuant to such section. For the avoidance of doubt, the Company shall make the
calculations described in Section 15.01(a)(iv) using the Trading Price provided
by the Trustee.
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)(i), (ii) and (iv)
hereof (including without limitation the calculation or determination of the
Conversion Price, the Closing Sale Price and the Trading Price), and the Company
agrees, if requested by the Trustee, to cooperate with, and provide assistance
to, the Trustee in carrying out its duties under this Section 15.01; provided
that nothing herein shall be construed to relieve the Trustee of its duties
pursuant to Sections 15.01(a)(i), (ii) and Section 15.01(a)(iv) hereof.
(b) In addition, if:
(i) (A) the Company distributes to all holders of its Common
Stock rights or warrants entitling them (for a period expiring within
45 days of the record date for the determination of the shareholders
entitled to receive such distribution) to subscribe for or purchase
shares of Common Stock, at a price per share less than the average of
the Closing Sale Price for the ten Trading Days immediately preceding,
but not including, the date such distribution is first publicly
announced by the Company, or (B) the Company distributes to all holders
of its Common Stock cash or other assets, debt securities or rights to
purchase its securities, where the Fair Market Value of such
distribution per share of Common Stock exceeds 5% of the Closing Sale
Price on the Trading Day immediately preceding the date such
distribution is first publicly announced by the Company, then, in
either case, the Notes 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 days prior to the
Ex-Dividend Time for such distribution, until the earlier of the close
of business on the Business Day immediately preceding, but not
including, the Ex-Dividend Time or the date the Company publicly
announces that such distribution will not take place; provided that
neither any adjustment to the Conversion Price will be made if the
holder will otherwise participate in such distribution without
conversion nor will a holder of a Note have the ability to convert
pursuant to this Section 15.01(b); or
(ii) the Company consolidates with or merges with or into
another Person or is a party to a binding share exchange or conveys,
transfers, sells, leases or otherwise disposes of all or substantially
all of its properties and assets in each case pursuant to which the
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Company's Common Stock is converted into cash, securities or other
property, then the Notes may be surrendered for conversion at any time
from and after the date fifteen (15) days prior to the anticipated
effective date of the transaction and ending on and including the date
fifteen (15) days after the consummation of the transaction. If such
transaction constitutes a Designated Event, the Notes may be
surrendered for conversion until the corresponding Designated Event
Expiration Time. In such an event, a holder of Notes may elect to
exercise its option to require the Company to repurchase all or a
portion of such holder's Notes. 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 and posted on its web site not
later than two Business Days prior to such 15th day. If Notes are not
surrendered pursuant to this paragraph for conversion, on the effective
date of the transaction, the right to convert the Notes into Common
Stock will convert into a right to convert the Notes into the kind and
amount of cash, securities and other property that a Noteholder would
have received if such holder had converted such holder's Notes
immediately prior to the transaction.
"Ex-Dividend Time" means, with respect to any distribution on shares of
Common Stock, the first date on which the shares of Common Stock trade regular
way on the principal securities market on which the shares of Common Stock are
then traded without the right to receive such distribution.
(c) A Note in respect of which a holder is electing to exercise its
option to require the Company to repurchase such holder's Notes upon a
Designated Event pursuant to Section 3.05, or at the option of the holder
pursuant to Section 3.06, may be converted only if such holder withdraws its
election in accordance with Section 3.05(c) or Section 3.08, respectively. A
holder of Notes is not entitled to any rights of a holder of Common Stock until
such holder has converted his Notes to Common Stock, and only to the extent such
Notes are deemed to have been converted to Common Stock under this Article 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 Note
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 Note with the original or facsimile of the form
entitled "Conversion Notice" on the reverse thereof, duly completed and manually
signed, together with such Notes duly endorsed for transfer, accompanied by the
funds, if any, required by the penultimate paragraph of 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 Note, 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 Note, furnish appropriate
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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 Noteholder (as if such transfer were a transfer of the Note or Notes
(or portion thereof) so converted), the Company shall issue and shall deliver to
such Noteholder 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 Note 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 Note 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 Note so surrendered, without charge to such holder, a new
Note or Notes in authorized denominations in an aggregate principal amount equal
to the unconverted portion of the surrendered Note.
Each conversion shall be deemed to have been effected as to any such
Note (or portion thereof) on the date (the "Conversion Date") on which the
requirements set forth above in this Section 15.02 have been satisfied as to
such Note (or portion thereof), 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 Note shall be surrendered.
Any Note or portion thereof surrendered for conversion during the
period from the close of business on the record date for any interest payment
date to the close of business on the Business Day preceding such 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 record date and on or prior to the
next interest payment date, (2) if the Company has specified a Designed Event
Repurchase Date 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 Note. Except as
provided above in this Section 15.02, no payment or other adjustment shall be
made for Interest accrued on any Note converted or for dividends on any shares
issued upon the conversion of such Note as provided in this Article 15.
Upon the conversion of an interest in a Global Note, 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 Note as to the reduction in the principal
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amount represented thereby. The Company shall notify the Trustee in writing of
any conversions of Notes effected through any conversion agent other than the
Trustee.
Upon the conversion of a Note, that portion of the accrued but unpaid
Interest, including accrued Contingent Interest, if any, and Additional
Interest, if any, to the Conversion Date, with respect to the converted Note
shall not be canceled, 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 Note 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 Note, the accrued but unpaid
Interest, including Contingent Interest, if any, and Additional Interest, if
any, through the Conversion Date 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 Note
being converted pursuant to the provisions hereof.
The Company agrees, and by acceptance of a beneficial interest in a
Note each holder and any beneficial owner of a Note shall be deemed to have
agreed, to treat, for United States federal income tax purposes, the Fair Market
Value of the Common Stock received upon a conversion of the Note (together with
any cash payment in lieu of fractional shares) as a contingent payment on the
Note for purposes of Treasury Regulation Section 1.1275-4 or any successor
provision.
Section 15.03. Cash Payments in Lieu of Fractional Shares.
No fractional shares of Common Stock or scrip certificates representing
fractional shares shall be issued upon conversion of Notes. If more than one
Note shall be surrendered for conversion at one time by the same holder, the
number of full shares that shall be issuable upon conversion shall be computed
on the basis of the aggregate principal amount of the Notes (or specified
portions thereof to the extent permitted hereby) so surrendered. If any
fractional share of stock would be issuable upon the conversion of any Note or
Notes, the Company shall make an adjustment and payment therefor in cash at the
Closing Sale Price on the last Trading Day immediately preceding the Conversion
Date thereof to the holder of Notes. .
Section 15.04. Conversion Rate.
Each $1,000 principal amount of the Notes shall be convertible into the
number of shares of Common Stock specified in the form of Note (herein called
the "Conversion Rate") attached as Exhibit A hereto, 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) In case the Company shall hereafter pay a dividend or make
a distribution to all holders of the outstanding Common Stock in shares
of Common Stock, the Conversion Rate shall be increased so that the
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same shall equal the rate determined by multiplying the Conversion Rate
in effect at the opening of business on the date following the date
fixed for the determination of shareholders entitled to receive such
dividend or other distribution by a fraction,
(i) the numerator of which shall be the sum of the
number of shares of Common Stock outstanding at the close of
business on the date fixed for the determination of
shareholders entitled to receive such dividend or other
distribution plus the total number of shares of Common Stock
constituting such dividend or other distribution; and
(ii) the denominator of which shall be the number of
shares of Common Stock outstanding at the close of business on
the date fixed for such determination,
such increase to become effective immediately after the opening of
business on the day following the date fixed for such determination.
For the purpose of this paragraph (a), the number of shares of Common
Stock at any time outstanding shall not include shares held in the
treasury of the Company. The Company will not pay any dividend or make
any distribution on shares of Common Stock held in the treasury of 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) In case the Company shall issue rights or warrants to all
holders of its outstanding shares of Common Stock entitling them (for a
period expiring within forty-five (45) days after the date fixed for
determination of shareholders entitled to receive such rights or
warrants) to subscribe for or purchase shares of Common Stock at a
price per share less than the average of the Closing Sale Prices of the
Common Stock for the 10 Trading Days immediately preceding the date
such distribution is first publicly announced by the Company, the
Conversion Rate shall be increased so that the same shall equal the
rate determined by multiplying the Conversion Rate in effect
immediately prior to the date fixed for determination of shareholders
entitled to receive such rights or warrants by a fraction,
(i) the numerator of which shall be the number of
shares of Common Stock outstanding on the date fixed for
determination of shareholders entitled to receive such rights
or warrants plus the total number of additional shares of
Common Stock offered for subscription or purchase, and
(ii) the denominator of which shall be the sum of the
number of shares of Common Stock outstanding at the close of
business on the date fixed for determination of shareholders
entitled to receive such rights or warrants plus the number of
shares that the aggregate offering price of the total number
of shares so offered would purchase at a price equal to the
average of the Closing Sale Prices of the Common Stock for the
10 Trading Days immediately preceding the date such
distribution is first publicly announced by the Company,
70
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 day following the date fixed for
determination of shareholders entitled to receive such rights or
warrants. To the extent that shares of Common Stock are not delivered
after the expiration of such rights or warrants, the Conversion Rate
shall be readjusted to the Conversion Rate that would then be in effect
had the adjustments made upon the issuance of such rights or warrants
been made on the basis of delivery of only the number of shares of
Common Stock actually delivered. If such rights or warrants are not so
issued, the Conversion Rate shall again be adjusted to be the
Conversion Rate that would then be in effect if such date fixed for the
determination of shareholders entitled to receive such rights or
warrants had not been fixed. In determining whether any rights or
warrants entitle the holders to subscribe for or purchase shares of
Common Stock at a price less than the average of the Closing Sale
Prices of the Common Stock for the 10 Trading Days immediately
preceding the date such distribution is first publicly announced by the
Company, 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) In case outstanding shares of Common Stock shall be subdivided into
a greater number of shares of Common Stock, the Conversion Rate in effect at the
opening of business on the day following the day upon which such subdivision
becomes effective shall be proportionately increased, and, conversely, in case
outstanding shares of Common Stock shall be combined into a smaller number of
shares of Common Stock, the Conversion Rate in effect at the opening of business
on the day following the day upon which such combination becomes effective shall
be proportionately reduced, such increase or reduction, as the case may be, to
become effective immediately after the opening of business on the day following
the day upon which such subdivision or combination becomes effective.
(d) In case the Company shall, by dividend or otherwise, distribute to
all holders of its Common Stock shares of any class of capital stock of the
Company or evidences of its indebtedness or assets (including securities, but
excluding any rights or warrants referred to in Section 15.05(b), and excluding
any dividend or distribution (x) paid exclusively in cash or (y) referred to in
Section 15.05(a) (any of the foregoing hereinafter in this Section 15.05(d)
called the "Securities")), then, in each such case (unless the Company elects to
reserve such Securities for distribution to the Noteholders upon the conversion
of the Notes so that any such holder converting Notes will receive upon such
conversion, in addition to the shares of Common Stock to which such holder is
entitled, the amount and kind of such Securities which such holder would have
received if such holder had converted its Notes into Common Stock immediately
prior to the Record Date for such distribution of the Securities) the Conversion
Rate shall be increased so that the same shall be equal to the rate determined
by multiplying the Conversion Rate in effect on the Record Date with respect to
such distribution by a fraction,
71
(i) the numerator of which shall be the Current Market Price
on such Record Date; and
(ii) the denominator of which shall be the Current Market
Price on such Record Date less the Fair Market Value (as determined by
the Board of Directors, whose determination shall be conclusive, and
described in a resolution of the Board of Directors) on the Record Date
of the portion of the Securities so distributed applicable to one share
of Common Stock,
such adjustment to become effective immediately prior to the opening of business
on the day following such Record Date; provided that, if the then Fair Market
Value (as so determined) of the portion of the Securities so distributed
applicable to one share of Common Stock is equal to or greater than the Current
Market Price on the Record Date, in lieu of the foregoing adjustment, adequate
provision shall be made so that each Noteholder shall have the right to receive
upon conversion the amount of Securities such holder would have received had
such holder converted each Note on the Record Date. If such dividend or
distribution is not so paid or made, the Conversion Rate shall again be adjusted
to be the Conversion Rate that would then be in effect if such dividend or
distribution had not been declared. If the Board of Directors determines the
Fair Market Value of any distribution for purposes of this Section 15.05(d) by
reference to the actual or when issued trading market for any securities, it
must in doing so consider the prices in such market over the same period used in
computing the Current Market Price on the applicable Record Date.
Notwithstanding the foregoing, if the Securities distributed by the Company to
all holders of its Common Stock consist of capital stock of, or similar equity
interests in, a Subsidiary or other business unit, the Conversion Rate shall be
increased so that the same shall be equal to the rate determined by multiplying
the Conversion Rate in effect on the Record Date with respect to such
distribution by a fraction,
(i) the numerator of which shall be the sum of (A) the average
of the Closing Sale Prices of the Common Stock for the ten (10) Trading
Days commencing on and including the fifth Trading Day after the
Ex-Dividend Time plus (B) the Fair Market Value of the securities
distributed in respect of each share of Common Stock for which this
Section 15.05(d) applies and shall equal the number of securities
distributed in respect of each share of Common Stock multiplied by the
average of the closing sale prices of those securities distributed
(where such closing sale prices are available) for the ten (10) Trading
Days commencing on and including the fifth Trading Day after the
Ex-Dividend Time; and
(ii) the denominator of which shall be the average of the
Closing Sale Prices of the Common Stock for the ten (10) Trading Days
commencing on and including the fifth Trading Day after the Ex-Dividend
Time,
such adjustment to become effective immediately prior to the opening of business
on the day following such Record Date; provided that the Company may in lieu of
the foregoing adjustment make adequate provision so that each Noteholder shall
72
have the right to receive upon conversion the amount of Securities such holder
would have received had such holder converted each Note on the Record Date with
respect to such distribution.
Rights or warrants distributed by the Company to all holders of Common
Stock entitling the holders thereof to subscribe for or purchase shares of the
Company's capital stock (either initially or under certain circumstances), which
rights or warrants, until the occurrence of a specified event or events
("Trigger Event"): (i) are deemed to be transferred with such shares of Common
Stock; (ii) are not exercisable; and (iii) are also issued in respect of future
issuances of Common Stock, shall be deemed not to have been distributed for
purposes of this Section 15.05 (and no adjustment to the Conversion Rate under
this Section 15.05 will be required) until the occurrence of the earliest
Trigger Event, whereupon such rights and warrants shall be deemed to have been
distributed and an appropriate adjustment (if any is required) to the Conversion
Rate shall be made under this Section 15.05(d). If any such right or warrant,
including any such existing rights or warrants distributed prior to the date of
this Indenture, are subject to events, upon the occurrence of which such rights
or warrants become exercisable to purchase different securities, evidences of
indebtedness or other assets, then the date of the occurrence of any and each
such event shall be deemed to be the date of distribution and record date with
respect to new rights or warrants with such rights (and a termination or
expiration of the existing rights or warrants without exercise by any of the
holders thereof). In addition, in the event of any distribution (or deemed
distribution) of rights or warrants, or any Trigger Event or other event (of the
type described in the preceding sentence) with respect thereto that was counted
for purposes of calculating a distribution amount for which an adjustment to the
Conversion Rate under this Section 15.05 was made, (1) in the case of any such
rights or warrants that shall all have been redeemed or repurchased without
exercise by any holders thereof, the Conversion Rate shall be readjusted upon
such final redemption or repurchase to give effect to such distribution or
Trigger Event, as the case may be, as though it were a cash distribution, equal
to the per share redemption or repurchase price received by a holder or holders
of Common Stock with respect to such rights or warrants (assuming such holder
had retained such rights or warrants), made to all holders of Common Stock as of
the date of such redemption or repurchase, and (2) in the case of such rights or
warrants that shall have expired or been terminated without exercise by any
holders thereof, the Conversion Rate shall be readjusted as if such rights and
warrants had not been issued.
No adjustment of the Conversion Rate shall be made pursuant to this
Section 15.05(d) in respect of rights or warrants distributed or deemed
distributed on any Trigger Event to the extent that such rights or warrants are
actually distributed, or reserved by the Company for distribution to holders of
Notes upon conversion by such holders of Notes to Common Stock.
For purposes of this Section 15.05(d) and Sections 15.05(a) and (b),
any dividend or distribution to which this Section 15.05(d) is applicable that
also includes shares of Common Stock, or rights or warrants to subscribe for or
purchase shares of Common Stock (or both), shall be deemed instead to be (1) a
dividend or distribution of the evidences of indebtedness, assets or shares of
capital stock other than such shares of Common Stock or rights or warrants (and
any Conversion Rate adjustment required by this Section 15.05(d) with respect to
such dividend or distribution shall then be made) immediately followed by (2) a
dividend or distribution of such shares of Common Stock or such rights or
warrants (and any further Conversion Rate adjustment required by Sections
73
15.05(a) and 15.05(b) with respect to such dividend or distribution shall then
be made), except (A) the Record Date of such dividend or distribution shall be
substituted as "the date fixed for the determination of shareholders entitled to
receive such dividend or other distribution", "the date fixed for the
determination of shareholders entitled to receive such rights or warrants" and
"the date fixed for such determination" within the meaning of Sections 15.05(a)
and 15.05(b) and (B) any shares of Common Stock included in such dividend or
distribution shall not be deemed "outstanding at the close of business on the
date fixed for such determination" within the meaning of Section 15.05(a).
(e) In case the Company shall, by dividend or otherwise, distribute to
all holders of its Common Stock cash (excluding any dividend or distribution in
connection with the liquidation, dissolution or winding up of the Company,
whether voluntary or involuntary), then, in such case, the Conversion Rate shall
be increased so that the same shall equal the rate determined by multiplying the
Conversion Rate in effect immediately prior to the close of business on such
record date by a fraction,
(i) the numerator of which shall be the Current Market Price
on such record date; and
(ii) the denominator of which shall be the Current Market
Price on such record date less the amount of cash so distributed
applicable to one share of Common Stock,
such adjustment to be effective immediately prior to the opening of business on
the day following the record date; provided that if the portion of the cash so
distributed applicable to one share of Common Stock is equal to or greater than
the Current Market Price on the record date, in lieu of the foregoing
adjustment, adequate provision shall be made so that each Noteholder shall have
the right to receive upon conversion the amount of cash such holder would have
received had such holder converted each Note on the record date. If such
dividend or distribution is not so paid or made, the Conversion Rate shall again
be adjusted to be the Conversion Rate that would then be in effect if such
dividend or distribution had not been declared.
(f) In case a tender or exchange offer made by the Company or any
Subsidiary for all or any portion of the Common Stock shall expire and such
tender or exchange offer (as amended upon the expiration thereof) shall require
the payment to shareholders of consideration per share of Common Stock having a
Fair Market Value (as determined by the Board of Directors, whose determination
shall be conclusive and described in a resolution of the Board of Directors)
that as of the last time (the "Expiration Time") tenders or exchanges may be
made pursuant to such tender or exchange offer (as it may be amended) exceeds
the Closing Sale Price of a share of Common Stock on the Trading Day next
74
succeeding the Expiration Time, the Conversion Rate shall be increased so that
the same shall equal the rate determined by multiplying the Conversion Rate in
effect immediately prior to the Expiration Time by a fraction,
(i) the numerator of which shall be the sum of (x) the Fair
Market Value (determined as aforesaid) of the aggregate consideration
payable to shareholders based on the acceptance (up to any maximum
specified in the terms of the tender or exchange offer) of all shares
validly tendered or exchanged and not withdrawn as of the Expiration
Time (the shares deemed so accepted up to any such maximum, being
referred to as the "Purchased Shares") and (y) the product of the
number of shares of Common Stock outstanding (less any Purchased
Shares) at the Expiration Time and the Closing Sale Price of a share of
Common Stock on the Trading Day next succeeding the Expiration Time,
and
(ii) the denominator of which shall be the number of shares of
Common Stock outstanding (including any tendered or exchanged shares)
at the Expiration Time multiplied by the Closing Sale Price of a share
of Common Stock on the Trading Day next succeeding the Expiration Time,
such adjustment to become effective immediately prior to the opening of business
on the day following the Expiration Time. If the Company is obligated to
purchase shares pursuant to any such tender 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.
(g) For purposes of this Section 15.05, the following terms shall have
the meaning indicated:
(i) "Current Market Price" shall mean the average of the daily
Closing Sale Prices per share of Common Stock for the ten consecutive
Trading Days ending on the earlier of such date of determination and
the day before the "ex" date with respect to the issuance,
distribution, subdivision or combination requiring such computation
immediately prior to the date in question. For purpose of this
paragraph, the term "ex" date, (1) when used with respect to any
issuance or distribution, means the first date on which the Common
Stock trades, regular way, on the relevant exchange or in the relevant
market from which the Closing Sale Price was obtained without the right
to receive such issuance or distribution, and (2) when used with
respect to any subdivision or combination of shares of Common Stock,
means the first date on which the Common Stock trades, regular way, on
such exchange or in such market after the time at which such
subdivision or combination becomes effective.
If another issuance, distribution, subdivision or combination
to which Section 15.05 applies occurs during the period applicable for
calculating "Current Market Price" pursuant to the definition in the
preceding paragraph, "Current Market Price" shall be calculated for
such period in a manner determined by the Board of Directors to reflect
75
the impact of such issuance, distribution, subdivision or combination
on the Closing Sale Price of the Common Stock during such period.
(ii) "Fair Market Value" shall mean the amount which a willing
buyer would pay a willing seller in an arm's-length transaction.
(iii) "Record Date" shall mean, with respect to any dividend,
distribution or other transaction or event in which the holders of
Common Stock have the right to receive any cash, securities or other
property or in which the Common Stock (or other applicable security) is
exchanged for or converted into any combination of cash, securities or
other property, the date fixed for determination of shareholders
entitled to receive such cash, securities or other property (whether
such date is fixed by the Board of Directors or by statute, contract or
otherwise).
(iv) "Trading Day" shall mean (x) if the applicable security
is quoted on the Nasdaq National Market, a day on which trades may be
made thereon, (y) if the applicable security is listed or admitted for
trading on the American Stock Exchange, New York Stock Exchange or
another national securities exchange, a day on which the American Stock
Exchange, New York Stock Exchange or another national securities
exchange is open for business, or (z) if the applicable security is not
so listed, admitted for trading or quoted, any day other than a
Saturday or Sunday or a day on which banking institutions in the State
of New York are authorized or obligated by law or executive order to
close.
(h) The Company may make such increases in the Conversion Rate, in
addition to those required by Section 15.05(a), (b), (c), (d), (e) or (f) as the
Board of Directors considers to be advisable to avoid or diminish any income tax
to holders of Common Stock or rights to purchase Common Stock resulting from any
dividend or distribution of stock (or rights to acquire stock) or from any event
treated as such for income tax purposes.
To the extent permitted by applicable law and Nasdaq Marketplace rules,
the Company from time to time may increase the Conversion Rate by any amount for
any period of time if the period is at least twenty (20) days, the increase is
irrevocable during the period and 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 Notes 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 in the Conversion Rate shall be required unless such
adjustment would require an increase or decrease of at least one percent (1%) in
such rate; provided that any adjustments that by reason of this Section 15.05(i)
are not required to be made shall be carried forward and taken into account in
any subsequent adjustment. All calculations under this Article 15 shall be made
76
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. No adjustment need be made
for rights to purchase Common Stock pursuant to a Company plan for reinvestment
of dividends or interest or for any issuance of Common Stock or convertible or
exchangeable securities or rights to purchase Common Stock or convertible or
exchangeable securities. To the extent the Notes become convertible into cash,
assets, property or securities (other than capital stock of the Company), no
adjustment need be made thereafter as to the cash, assets, property or such
securities. Interest will not accrue on any cash into which the Notes are
convertible.
(j) 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 Officer's 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 Officer's 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 Note at his last
address appearing on the Note 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.
(k) In any case in which this Section 15.05 provides that an adjustment
shall become effective immediately after (1) a record date or 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(f), (each a "Determination Date"),
the Company may elect to defer until the occurrence of the applicable Adjustment
Event (as hereinafter defined) (x) issuing to the holder of any Note 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,
77
(iii) in any case referred to in clause (3) hereof, the date
of expiration of such rights or warrants, and
(iv) in any case referred to in clause (4) hereof, the date a
sale or exchange of Common Stock pursuant to such tender or exchange
offer is consummated and becomes irrevocable.
(l) 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 (x) a
subdivision or combination to which Section 15.05(c) applies) as a result of
which holders of Common Stock shall be entitled to receive stock, other
securities or other property or assets (including cash) with respect to or in
exchange for such Common Stock, (ii) any consolidation, merger or combination of
the Company with another Person as a result of which holders of Common Stock
shall be entitled to receive stock, other securities or other property or assets
(including cash) with respect to or in exchange for such Common Stock, or (iii)
any sale or conveyance of 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 stock, other securities or other property or assets
(including cash) with respect to or in exchange for such Common Stock, then the
Company or the successor or purchasing Person, as the case may be, shall execute
with the Trustee a supplemental indenture (which shall comply with the Trust
Indenture Act as in force at the date of execution of such supplemental
indenture) providing that each Note shall be convertible into the kind and
amount of shares of stock, other securities or other property or assets
(including cash) receivable upon such reclassification, change, consolidation,
merger, combination, sale or conveyance by a holder of a number of shares of
Common Stock issuable upon conversion of such Notes (assuming, for such
purposes, a sufficient number of authorized shares of Common Stock are available
to convert all such Notes) immediately prior to such reclassification, change,
consolidation, merger, combination, sale or conveyance assuming such holder of
Common Stock did not exercise such holder's rights of election, if any, as to
the kind or amount of stock, other securities or other property or assets
(including cash) receivable upon such reclassification, change, consolidation,
merger, combination, sale or conveyance (provided that, if the kind or amount of
stock, other securities or other property or assets (including cash) receivable
upon such reclassification, change, consolidation, merger, 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 stock, other
securities or other property or assets (including cash) receivable upon such
reclassification, change, consolidation, merger, combination, sale or conveyance
for each non-electing share shall be deemed to be the kind and amount so
78
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 Notes, at its address appearing on the
Note Register provided for in Section 2.05 of this Indenture, within twenty (20)
days after execution thereof. Failure to deliver such notice shall not affect
the legality or validity of such supplemental indenture.
The above provisions of this Section shall similarly apply to
successive reclassifications, changes, consolidations, mergers, 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 Notes shall be made
without charge to the converting Noteholder 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 Note converted, and the Company shall not be required
to issue or deliver any such stock certificate unless and until the Person or
Persons requesting the issue thereof shall have paid to the Company the amount
of such tax or shall have established to the satisfaction of the Company that
such tax has been paid.
Section 15.08. 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 Notes from time to time as
such Notes 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 Notes, 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 Notes 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 Notes 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.
79
The Company further covenants that, if at any time the Common Stock
shall be listed on the Nasdaq National Market or any other national securities
exchange or automated quotation system, the Company will, if permitted by the
rules of such exchange or automated quotation system, list and keep listed, so
long as the Common Stock shall be so listed on such exchange or automated
quotation system, all Common Stock issuable upon conversion of the Notes;
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 Notes into Common Stock in accordance with the provisions of this
Indenture, the Company covenants to list such Common Stock issuable upon
conversion of the Notes 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 any Noteholder 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 Note; 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 Note 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 Noteholders upon the conversion of their Notes 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 Officer's Certificate (which the Company shall be obligated to file with the
Trustee prior to the execution of any such supplemental indenture) with respect
thereto.
Section 15.10. 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
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(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;
the Company shall cause to be filed with the Trustee and to be mailed to each
Noteholder at such holder's address appearing on the Note Register provided for
in Section 2.05 of this Indenture, as promptly as possible but in any event at
least ten (10) days prior to the applicable date hereinafter specified, a notice
stating (x) the date on which a record is to be taken for the purpose of such
dividend, distribution or rights or warrants, or, if a record is not to be
taken, the date as of which the holders of Common Stock of record to be entitled
to such dividend, distribution or rights are to be determined, or (y) the date
on which such reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding-up is expected to become effective or occur,
and the date as of which it is expected that holders of Common Stock of record
shall be entitled to exchange their Common Stock for securities or other
property deliverable upon such reclassification, consolidation, merger, sale,
transfer, dissolution, liquidation or winding-up. Failure to give such notice,
or any defect therein, shall not affect the legality or validity of such
dividend, distribution, reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding-up.
Section 15.11. Shareholder Rights Plans.
Each share of Common Stock issued upon conversion of Notes pursuant to
this Article 15 shall be entitled to receive the appropriate number of rights,
if any, and the certificates representing the Common Stock issued upon such
conversion shall bear such legends, if any, in each case as may be provided by
the terms of any shareholder rights plan adopted by the Company, as the same may
be amended from time to time. If at the time of conversion, however, the rights
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 Notes
would not be entitled to receive any rights in respect of Common Stock issuable
upon conversion of the Notes, the conversion rate will be adjusted in accordance
with Section 15.05(d) treating all rights previously issued as Securities for
purposes of such adjustment, subject to readjustment in the event of the
expiration, termination or redemption of the rights.
ARTICLE 16
SUBORDINATION
Section 16.01. Agreement to Subordinate. The Company agrees, and each Noteholder
by accepting a Note agrees, that the Indebtedness evidenced by the Notes is
subordinated in right of payment, to the extent and in the manner provided in
this Article 16, to the prior payment in full of all Senior Indebtedness of the
Company and that the subordination is for the benefit of and enforceable by the
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holders of such Senior Indebtedness. The Notes shall in all respects rank pari
passu with all other Senior Subordinated Indebtedness of the Company, senior in
right of payment to all existing and future Subordinated Indebtedness, and only
Indebtedness of the Company that is Senior Indebtedness of the Company shall
rank senior to the Notes in accordance with the provisions set forth herein. For
purposes of this Article 16, the Indebtedness evidenced by the Notes shall be
deemed to include any Additional Interest. All provisions of this Article 16
shall be subject to Section 16.12.
Section 16.02. Liquidation, Dissolution, Bankruptcy. Upon any payment or
distribution of the assets of the Company to creditors upon a total or partial
liquidation or a total or partial dissolution of the Company or in a bankruptcy,
reorganization, insolvency, receivership or similar proceeding relating to the
Company or its property:
(i) holders of Senior Indebtedness of the Company shall be
entitled to receive payment in full of such Senior Indebtedness before
Noteholders shall be entitled to receive any payment of principal of or
interest (including Contingent Interest) on the Notes; and
(ii) until the Senior Indebtedness of the Company is paid in
full, any payment or distribution to which Noteholders would be
entitled but for this Article 16 shall be made to holders of such
Senior Indebtedness as their interests may appear, except that
Noteholders may receive any Permitted Junior Securities (in the case of
clauses (i) or (ii).
Section 16.03. Default on Senior Indebtedness.
(a) The Company may not make any payment or distribution to the Trustee
or any Noteholder in respect of the amounts owed in respect of the Notes and may
not acquire from the Trustee or any Noteholder any Notes for cash or property
(other than Permitted Junior Securities) until all principal and other amounts
owing in respect of Designated Senior Indebtedness have been paid in full if:
(i) a default in the payment of any principal or other amounts
owed in respect of Designated Senior Indebtedness occurs; or
(ii) a default, other than a payment default, on Designated
Senior Indebtedness occurs and is continuing that then permits holders
of the Designated Senior Indebtedness to accelerate its maturity, or in
the case of a lease, a default occurs and is continuing that permits
the lessor to either terminate the lease or require the Company to make
an irrevocable offer to terminate the lease following an event of
default under the lease, and the Trustee receives a notice of the
default (a "Payment Blockage Notice") from the holder or holders of the
Designated Senior Indebtedness or the trustee, agent or Representative
acting on behalf of such Designated Senior Indebtedness. If the Trustee
receives any such Payment Blockage Notice, no subsequent Payment
Blockage Notice shall be effective for purposes of this Section unless
and until (A) at least 365 days shall have elapsed since the
effectiveness of the immediately prior Payment Blockage Notice and (B)
all scheduled payments of principal, any premium and Additional
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Interest, and interest (including Contingent Interest) on the Notes
that have come due have been paid in full in cash. No nonpayment
default that existed or was continuing on the date of delivery of any
Payment Blockage Notice to the Trustee shall be, or be made, the basis
for a subsequent Payment Blockage Notice.
(b) The Company may and shall resume payments on and distributions in
respect of the Notes:
(i) in the case of a default referred to in clause (i) of
paragraph (a) above, the date upon which the default is cured or
waived;
(ii) in the case of a default referred to in clause (ii) of
paragraph (a) above, upon the earlier of the date on which such
nonpayment default is cured or waived or 179 days after the date on
which the applicable Payment Blockage Notice is received, unless the
maturity of any Designated Senior Indebtedness has been accelerated, or
in the case of a lease, 179 days after notice is received if the
Company has not received notice that the lessor under such lease has
exercised its right to terminate the lease or require the Company to
make an irrevocable offer to terminate the lease following an event of
default under the lease; and
(iii) in either case, upon the earlier of the payment in full
of the obligations outstanding under and the satisfaction and discharge
or defeasance of Designated Senior Indebtedness,
if this Article 15 otherwise permits the payment, distribution or acquisition at
the time of such payment or acquisition.
In the case of clause (b), upon the earlier of the date on which such nonpayment
default is cured or waived or 179 days after the date on which the applicable
Payment Blockage Notice is received, unless the maturity of any Designated
Senior Debt has been accelerated.
Section 16.04. Acceleration of Payment of Notes. If payment of the Notes is
accelerated because of an Event of Default, the Company or the Trustee
(provided, that the Trustee shall have received written notice from the Company,
on which notice the Trustee shall be entitled to conclusively rely) shall
promptly notify the holders of the Designated Senior Indebtedness of the Company
(or their Representative) of the acceleration. If any Designated Senior
Indebtedness of the Company is outstanding, the Company may not pay the Notes
(other than Permitted Junior Securities) until five Business Days after such
holders or the Representative of such Designated Senior Indebtedness receive
notice of such acceleration and, thereafter, may pay the Notes only if this
Article 16 otherwise permits payment at that time.
Section 16.05. When Distribution Must Be Paid Over. If a distribution is made to
the Trustee or to the Noteholders that because of this Article 16 should not
have been made to them, the Trustee or the Noteholders who receive the
distribution shall hold it in trust for holders of Senior Indebtedness of the
Company and pay it over to them as their interests may appear.
Section 16.06. Subrogation. After all Senior Indebtedness of the Company is paid
in full and until the Notes are paid in full, Noteholders shall be subrogated to
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the rights of holders of such Senior Indebtedness to receive distributions
applicable to Senior Indebtedness. A distribution made under this Article 16 to
holders of such Senior Indebtedness which otherwise would have been made to
Noteholders is not, as between the Company and Noteholders, a payment by the
Company on such Senior Indebtedness.
Section 16.07. Relative Rights. This Article 16 defines the relative rights of
Noteholders and holders of Senior Indebtedness of the Company. Nothing in this
Indenture shall:
(i) impair, as between the Company and Noteholders, the
obligation of the Company, which is absolute and unconditional, to pay
principal of and Interest on the Notes in accordance with their terms;
or
(ii) prevent the Trustee or any Noteholder from exercising its
available remedies upon a Default, subject to the rights of holders of
Senior Indebtedness of the Company to receive distributions otherwise
payable to Noteholders.
Section 16.08. Subordination May Not Be Impaired by Company. No right of any
holder of Senior Indebtedness of the Company to enforce the subordination of the
Indebtedness evidenced by the Notes shall be impaired by any act or failure to
act by the Company, the Trustee or any Noteholders or by its or their failure to
comply with this Indenture.
Section 16.09. Rights of Trustee and Paying Agent. Notwithstanding Section
16.03, the Trustee or Paying Agent may continue to make payments on the Notes
and shall not be charged with knowledge of the existence of facts that would
prohibit the making of any such payments unless, not less than two Business Days
prior to the date of such payment, a Trust Officer of the Trustee receives
written notice that payments may not be made under this Article 16. The Company,
the Note Registrar, the Paying Agent, a Representative or a holder of Senior
Indebtedness of the Company may give the notice; provided, however, that, if an
issue of Senior Indebtedness of the Company has a Representative, only the
Representative may give the notice.
The Trustee in its individual or any other capacity may hold Senior
Indebtedness of the Company with the same rights it would have if it were not
Trustee. The Note Registrar and the Paying Agent may do the same with like
rights. The Trustee shall be entitled to all the rights set forth in this
Article 16 with respect to any Senior Indebtedness of the Company which may at
any time be held by it, to the same extent as any other holder of such Senior
Indebtedness; and nothing in Article 8 shall deprive the Trustee of any of its
rights as such holder. Nothing in this Article 16 shall apply to claims of, or
payments to, the Trustee under or pursuant to Section 8.06 or any other Section
of this Indenture.
84
Section 16.10. Distribution or Notice to Representative. Whenever a distribution
is to be made or a notice given to holders of Senior Indebtedness of the
Company, the distribution may be made and the notice given to their
Representative (if any).
Section 16.11. Article 16 Not to Prevent Events of Default or Limit Right to
Accelerate. The failure to make a payment pursuant to the Notes by reason of any
provision in this Article 16 shall not be construed as preventing the occurrence
of a Default. Nothing in this Article 16 shall have any effect on the right of
the Noteholders or the Trustee to accelerate the maturity of the Notes.
Section 16.12. Trust Monies Not Subordinated. Notwithstanding anything contained
herein to the contrary, payments from money held in trust under Article 13 by
the Trustee for the payment of principal of and Interest on the Notes shall not
be subordinated to the prior payment of any Senior Indebtedness of the Company
or subject to the restrictions set forth in this Article 16, and none of the
Noteholders shall be obligated to pay over any such amount to the Company or any
holder of Senior Indebtedness of the Company or any other creditor of the
Company.
Section 16.13. Trustee Entitled to Rely. Upon any payment or distribution
pursuant to this Article 16, the Trustee and the Noteholders shall be entitled
to conclusively rely (a) upon any order or decree of a court of competent
jurisdiction in which any proceedings of the nature referred to in Section 16.02
are pending, (b) upon a certificate of the liquidating trustee or agent or other
Person making such payment or distribution to the Trustee or to the Noteholders
or (c) upon the Representatives for the holders of Senior Indebtedness of the
Company for the purpose of ascertaining the Persons entitled to participate in
such payment or distribution, the holders of such Senior Indebtedness and other
Indebtedness of the Company, the amount thereof or payable thereon, the amount
or amounts paid or distributed thereon and all other facts pertinent thereto or
to this Article 16. In the event that the Trustee determines, in good faith,
that evidence is required with respect to the right of any Person as a holder of
Senior Indebtedness of the Company to participate in any payment or distribution
pursuant to this Article 16, the Trustee may request such Person to furnish
evidence to the reasonable satisfaction of the Trustee as to the amount of such
Senior Indebtedness held by such Person, the extent to which such Person is
entitled to participate in such payment or distribution and other facts
pertinent to the rights of such Person under this Article 16, and, if such
evidence is not furnished, the Trustee may defer any payment to such Person
pending judicial determination as to the right of such Person to receive such
payment. The provisions of Sections 8.01 and 8.02 shall be applicable to all
actions or omissions of actions by the Trustee pursuant to this Article 16.
Section 16.14. Trustee to Effectuate Subordination. Each Noteholder by accepting
a Note authorizes and directs the Trustee on his behalf to take such action as
may be necessary or appropriate to acknowledge or effectuate the subordination
between the Noteholders and the holders of Senior Indebtedness of the Company as
provided in this Article 16 and appoints the Trustee as attorney-in-fact for any
and all such purposes.
Section 16.15. Trustee Not Fiduciary for Holders of Senior Indebtedness. The
Trustee shall not be deemed to owe any fiduciary duty to the holders of Senior
Indebtedness of the Company and shall not be liable to any such holders if it
85
shall mistakenly pay over or distribute to Noteholders or the Company or any
other Person, money or assets to which any holders of Senior Indebtedness of the
Company shall be entitled by virtue of this Article 16 or otherwise.
Section 16.16. Reliance by Noteholders of Senior Indebtedness on Subordination
Provisions. Each Noteholder by accepting a Note acknowledges and agrees that the
foregoing subordination provisions are, and are intended to be, an inducement
and a consideration to each holder of any Senior Indebtedness of the Company,
whether such Senior Indebtedness was created or acquired before or after the
issuance of the Notes, to acquire and continue to hold, or to continue to hold,
such Senior Indebtedness and such holder of such Senior Indebtedness shall be
deemed conclusively to have relied on such subordination provisions in acquiring
and continuing to hold, or in continuing to hold, such Senior Indebtedness.
ARTICLE 17
MISCELLANEOUS PROVISIONS
Section 17.01. 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 17.02. 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 17.03. Addresses for Notices, Etc.
Any notice or demand which by any provision of this Indenture is
required or permitted to be given or served by the Trustee or by the holders of
Notes on the Company shall be deemed to have been sufficiently given or made,
for all purposes, if 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 Headwaters Incorporated, 00000 Xxxxx
Xxxxxxxxxx Xxxxxxx, Xxxxx 000, Xxxxx Xxxxxx, Xxxx 00000, Attention: Xxxxxx X.
Xxxxxxxx, General Counsel, Telecopier No.: (000) 000-0000. 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 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: Xxxxx
Fargo Bank, N.A. Sixth & Marquette; X0000-000 Xxxxxxxxxxx, XX 00000 Attn:
Corporate Trust Services Fax: (000) 000-0000.
The Trustee, by notice to the Company, may designate additional or
different addresses for subsequent notices or communications.
86
Any notice or communication mailed to a Noteholder shall be mailed to
such holder by first-class mail, postage prepaid, at his address as it appears
on the Note Register and shall be sufficiently given to such holder if so mailed
within the time prescribed.
Failure to mail a notice or communication to a Noteholder or any defect
in it shall not affect its sufficiency with respect to other Noteholders. If a
notice or communication is mailed in the manner provided above, it is duly
given, whether or not the addressee receives it.
Section 17.04. Governing Law.
This Indenture and each Note shall be governed by and construed in
accordance with the laws of the State of New York, without regard to conflicts
of laws principles thereof.
Section 17.05. Evidence of Compliance with Conditions Precedent; Certificates to
Trustee.
Upon any application or demand by the Company to the Trustee to take
any action under any of the provisions of this Indenture, the Company shall
furnish to the Trustee an Officer's Certificate stating that 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 17.06. Legal Holidays.
In any case in which the date of maturity of Interest on or principal
of the Notes or the redemption date of any Note will not be a Business Day, then
payment of such Interest on or principal of the Notes need not be made on such
date, but may be made on the next succeeding Business Day with the same force
and effect as if made on the date of maturity or the redemption date, and no
Interest shall accrue for the period from and after such date.
Section 17.07. Company Responsible for Making Calculations.
Except as specified in Section 4.01 and in relation to Section
15.01(a)(iv), the Company will be responsible for making all calculations
required under the Notes. The company will make these calculations in good faith
and absent manifest error, these calculations will be final and binding on the
Noteholders. Promptly after the calculation thereof, the Company will provide to
each of the Trustee and the Conversion Agent and Officer's Certificate setting
forth a schedule of its calculations, and each of the Trustee and the Conversion
87
Agent is entitled to conclusively rely upon the accuracy of such calculations
without independent verification. The Trustee will forward the Company's
calculations any Holder upon the written request of such Holder.
Section 17.08. 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 this Section
17.08 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 this 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 17.09. No Security Interest Created.
Nothing in this Indenture or in the Notes, express 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 17.10. Benefits of Indenture.
Nothing in this Indenture or in the Notes, express or implied, shall
give to any Person, other than the parties hereto, any paying agent, any
authenticating agent, any Note Registrar and their successors hereunder and the
holders of Notes any benefit or any legal or equitable right, remedy or claim
under this Indenture.
Section 17.11. Table of Contents, Headings, Etc.
The table of contents and the titles and headings of the Articles and
Sections of this Indenture have been inserted for convenience of reference only,
are not to be considered a part hereof, and shall in no way modify or restrict
any of the terms or provisions hereof.
Section 17.12. 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 Notes in connection with the original issuance
thereof and transfers and exchanges of Notes hereunder, including under Sections
2.04, 2.05, 2.06, 2.07, 3.03, 3.05, 3.06, 3.10 and 15.02, 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
Notes. For all purposes of this Indenture, the authentication and delivery of
Notes by the authenticating agent shall be deemed to be authentication and
delivery of such Notes "by the Trustee" and a certificate of authentication
executed on behalf of the Trustee by an authenticating agent shall be deemed to
88
satisfy any requirement hereunder or in the Notes for the Trustee's certificate
of authentication. Such authenticating agent shall at all times be a Person
eligible to serve as trustee hereunder pursuant to Section 8.09.
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 17.12, 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 Notes as the names and
addresses of such holders appear on the Note Register.
The Company agrees to pay to the authenticating agent from time to time
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
17.12 shall be applicable to any authenticating agent.
Section 17.13. Execution in Counterparts.
This Indenture may be executed in any number of counterparts, each of
which shall be an original, but such counterparts shall together constitute but
one and the same instrument.
Section 17.14. Severability.
In case any provision in this Indenture or in the Notes 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.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed.
HEADWATERS INCORPORATED
By: /s/ Xxxxxx X. Xxxxxxx
---------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: CFO
XXXXX FARGO BANK, NATIONAL ASSOCIATION, as Trustee
By: /s/ Xxxxxxx X. Xxxxx
---------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Assistant Vice President
90
EXHIBIT A
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.
THE NOTE EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS, AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT AS SET
FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER (1)
REPRESENTS THAT IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT); (2) AGREES THAT IT WILL NOT, PRIOR TO EXPIRATION OF
THE HOLDING PERIOD APPLICABLE TO SALES OF THE NOTE EVIDENCED HEREBY UNDER RULE
144(k) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION), RESELL OR
OTHERWISE TRANSFER THIS NOTE OR THE COMMON STOCK ISSUABLE UPON CONVERSION OF
THIS NOTE EXCEPT (A) TO HEADWATERS INCORPORATED OR ANY SUBSIDIARY THEREOF, (B)
TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE
SECURITIES ACT, (C) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE
144 UNDER THE SECURITIES ACT (IF AVAILABLE), OR (D) PURSUANT TO A REGISTRATION
STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT (AND WHICH
CONTINUES TO BE EFFECTIVE AT THE TIME OF SUCH TRANSFER); (3) PRIOR TO SUCH
TRANSFER (OTHER THAN A TRANSFER PURSUANT TO CLAUSE 2(D) ABOVE), IT WILL FURNISH
TO XXXXX FARGO BANK, NATIONAL ASSOCIATION, AS TRUSTEE (OR A SUCCESSOR TRUSTEE,
AS APPLICABLE), SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS THE
TRUSTEE MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE
PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT; AND (4) AGREES THAT IT WILL
DELIVER TO EACH PERSON TO WHOM THIS NOTE IS TRANSFERRED A NOTICE SUBSTANTIALLY
TO THE EFFECT OF THIS LEGEND, THIS LEGEND WILL BE REMOVED UPON THE EARLIER OF
THE TRANSFER OF THIS NOTE PURSUANT TO CLAUSE 2(D) ABOVE OR UPON ANY TRANSFER OF
THIS NOTE UNDER RULE 144(k) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR
PROVISION). THE INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE
TO REGISTER ANY TRANSFER OF THIS NOTE IN VIOLATION OF THE FOREGOING RESTRICTION.
HEADWATERS INCORPORATED
2-7/8% CONVERTIBLE SENIOR SUBORDINATED NOTES DUE 2016
CUSIP: 00000XXX0
No. 1 $150,000,000
Headwaters Incorporated, 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 as set forth on Schedule I hereto on
June 1, 2016, 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 interest, semi-annually on June
1 and December 1 of each year, commencing December 1, 2004, on said principal
sum at said office or agency, in like coin or currency, at the rate per annum of
2-7/8%, from and including June 1, 2004 or from the most recent Interest Payment
Date to which interest has been paid or duly provided for to, but excluding the
following Interest Payment Date. Contingent Interest, if any, will accrue for
any six month interest period and be payable to holders of this Note on the
applicable Interest Payment Date to the person in whose name this Note is
registered on the corresponding record date. Except as otherwise provided in the
Indenture, the interest payable on the Note pursuant to the Indenture on any
June 1 or December 1 will be paid to the Person entitled thereto as it appears
in the Note Register at the close of business on the record date, which shall be
the May 15 or November 15 (whether or not a Business Day) next preceding such
June 1 or December 1, 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 Notes in
certificated form by check mailed to the address of the Person entitled thereto
as it appears in the Note Register (provided that the holder of Notes with an
aggregate principal amount in excess of $2,000,000 shall, at the written
election of such holder, be paid by wire transfer of immediately available
funds) or (ii) on any Global Note by wire transfer of immediately available
funds to the account of the Depositary or its nominee.
The Company promises to pay interest, including Contingent Interest, if
any, and Additional Interest, if any, on overdue principal and (to the extent
that payment of such interest is enforceable under applicable law) interest at
the rate borne by the Notes, plus 1% per annum.
Reference is made to the further provisions of this Note set forth on
the reverse hereof, including, without limitation, provisions giving the holder
of this Note the right to convert this Note into Common Stock of the Company on
the terms and subject to the limitations referred to on the reverse hereof and
as more fully specified in the Indenture. Such further provisions shall for all
purposes have the same effect as though fully set forth at this place.
This Note shall be governed by and construed in accordance with the
laws of the State of New York, without regard to conflicts of laws principles
thereof.
A-2
This Note shall not be valid or become obligatory for any purpose until
the certificate of authentication hereon shall have been manually signed by the
Trustee or a duly authorized authenticating agent under the Indenture.
A-3
IN WITNESS WHEREOF, the Company has caused this Note to be duly executed.
HEADWATERS INCORPORATED
By:_______________________________
Name:
Title:
Attest:
By:_______________________________
Name:
Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes described in the within-named Indenture.
XXXXX FARGO BANK, NATIONAL ASSOCIATION, as Trustee
By:_______________________________
Authorized Signatory
or
By:_______________________________
As Authenticating Agent
(if different from Trustee)
By:_______________________________
Authorized Signatory
A-4
