Exhibit 4.4
GATX CORPORATION,
as Issuer
GATX FINANCIAL CORPORATION,
as Guarantor
and
----------------
JPMORGAN CHASE BANK,
as Trustee
----------------
$175,000,000
7.5% Convertible Senior Notes due 2007
----------------
INDENTURE
Dated as of February 1, 2002
TABLE OF CONTENTS
ARTICLE 1 DEFINITIONS .................................................. 1
SECTION 1.1 Definitions ............................................. 1
SECTION 1.2 Other Definitions ....................................... 6
SECTION 1.3 Incorporation by Reference of Trust Indenture Act ....... 6
SECTION 1.4 Rules of Construction ................................... 7
ARTICLE 2 THE CONVERTIBLE NOTES ........................................ 7
SECTION 2.1 Form and Dating ......................................... 7
SECTION 2.2 Execution and Authentication ............................ 8
SECTION 2.3 Registrar, Paying Agent and Conversion Agent ............ 9
SECTION 2.4 Paying Agent To Hold Money in Trust ..................... 9
SECTION 2.5 Holder Lists ............................................10
SECTION 2.6 Transfer and Exchange ...................................10
SECTION 2.7 Replacement Convertible Notes ...........................12
SECTION 2.8 Outstanding Convertible Notes ...........................13
SECTION 2.9 When Convertible Notes Owned by the Company or an
Affiliate are Disregarded ...............................13
SECTION 2.10 Temporary Convertible Notes .............................13
SECTION 2.11 Cancellation ............................................14
SECTION 2.12 Defaulted Interest ......................................14
SECTION 2.13 CUSIP Number ............................................14
SECTION 2.14 Regulation S ............................................15
ARTICLE 3 REDEMPTION ...................................................15
SECTION 3.1 No Redemption Prior to the Maturity Date ................15
ARTICLE 4 COVENANTS ....................................................15
SECTION 4.1 Payment of Convertible Notes ............................15
SECTION 4.2 Rule 144A Information; Periodic Reports to the Trustee ..15
SECTION 4.3 Compliance Certificate ..................................16
SECTION 4.4 Maintenance of Office or Agency .........................16
SECTION 4.5 Continued Existence .....................................16
SECTION 4.6 Repurchase Upon Fundamental Change ......................16
SECTION 4.7 Appointments to Fill Vacancies in Trustee's Office ......19
SECTION 4.8 Stay, Extension and Usury Laws ..........................19
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TABLE OF CONTENTS
(continued)
Page
SECTION 4.9 Taxes ..................................................20
SECTION 4.10 Investment Company Act .................................20
ARTICLE 5 SUCCESSORS ..................................................20
SECTION 5.1 When the Company May Merge, Etc ........................20
SECTION 5.2 Successor Corporation Substituted ......................21
SECTION 5.3 Purchase Option on Fundamental Change ..................21
ARTICLE 6 DEFAULTS AND REMEDIES .......................................21
SECTION 6.1 Events of Default ......................................21
SECTION 6.2 Acceleration ...........................................23
SECTION 6.3 Other Remedies .........................................23
SECTION 6.4 Waiver of Past Defaults ................................23
SECTION 6.5 Control by Majority ....................................24
SECTION 6.6 Limitation on Suits ....................................24
SECTION 6.7 Rights of Holders To Receive Payment ...................24
SECTION 6.8 Collection Suit by Trustee .............................25
SECTION 6.9 Trustee May File Proofs of Claim .......................25
SECTION 6.10 Priorities .............................................25
SECTION 6.11 Undertaking for Costs ..................................26
ARTICLE 7 THE TRUSTEE .................................................26
SECTION 7.1 Duties of the Trustee ..................................26
SECTION 7.2 Rights of the Trustee ..................................27
SECTION 7.3 Individual Rights of the Trustee .......................29
SECTION 7.4 Trustee's Disclaimer ...................................29
SECTION 7.5 Notice of Defaults .....................................29
SECTION 7.6 Reports by the Trustee to Holders ......................29
SECTION 7.7 Compensation and Indemnity .............................30
SECTION 7.8 Replacement of the Trustee .............................30
SECTION 7.9 Successor Trustee by Merger, etc .......................32
SECTION 7.10 Eligibility, Disqualification ..........................32
SECTION 7.11 Preferential Collection of Claims Against Company ......32
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TABLE OF CONTENTS
(continued)
Page
ARTICLE 8 SATISFACTION AND DISCHARGE OF INDENTURE .....................32
SECTION 8.1 Discharge of Indenture .................................32
SECTION 8.2 Deposited Monies to be Held in Trust by Trustee ........33
SECTION 8.3 Paying Agent to Repay Monies Held ......................33
SECTION 8.4 Return of Unclaimed Monies .............................33
SECTION 8.5 Reinstatement ..........................................33
ARTICLE 9 AMENDMENTS ..................................................34
SECTION 9.1 Without the Consent of Holders .........................34
SECTION 9.2 With the Consent of Holders ............................34
SECTION 9.3 Compliance with the Trust Indenture Act ................35
SECTION 9.4 Revocation and Effect of Consents ......................36
SECTION 9.5 Notation on or Exchange of Convertible Notes ...........36
SECTION 9.6 Trustee Protected ......................................36
ARTICLE 10 GENERAL PROVISIONS ..........................................37
SECTION 10.1 Trust Indenture Act Controls ...........................37
SECTION 10.2 Notices ................................................37
SECTION 10.3 Communication by Holders With Other Holders ............38
SECTION 10.4 Certificate and Opinion as to Conditions Precedent .....38
SECTION 10.5 Statements Required in Certificate or Opinion. .........38
SECTION 10.6 Rules by Trustee and Agents ............................39
SECTION 10.7 Legal Holidays .........................................39
SECTION 10.8 No Recourse Against Others .............................39
SECTION 10.9 Counterparts ...........................................39
SECTION 10.10 Other Provisions .......................................39
SECTION 10.11 Governing Law ..........................................40
SECTION 10.12 No Adverse Interpretation of Other Agreements ..........40
SECTION 10.13 Successors .............................................41
SECTION 10.14 Severability ...........................................41
SECTION 10.15 Table of Contents, Headings, etc .......................41
ARTICLE 11 CONVERSION OF CONVERTIBLE NOTES .............................41
SECTION 11.1 Right to Convert .......................................41
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TABLE OF CONTENTS
(continued)
Page
SECTION 11.2 Exercise of Conversion Privilege; Issuance of
Common Stock on Conversion; No Adjustment for
Interest or Dividends ..................................42
SECTION 11.3 Cash Payments in Lieu of Fractional Shares .............44
SECTION 11.4 Conversion Price .......................................44
SECTION 11.5 Adjustment of Conversion Price .........................44
SECTION 11.6 Effect of Reclassification, Consolidation, Merger
or Sale ................................................52
SECTION 11.7 Taxes on Shares Issued .................................53
SECTION 11.8 Reservation of Shares; Shares to Be Fully Paid;
Listing of Common Stock ................................53
SECTION 11.9 Responsibility of Trustee ..............................53
SECTION 11.10 Notice to Holders Prior to Certain Actions .............54
SECTION 11.11 Restriction on Common Stock Issuable Upon Conversion ...55
ARTICLE 12 Guarantee ...................................................56
SECTION 12.1 Terms of the Guarantee .................................56
SECTION 12.2 Limitation of the Guarantor's Liability ................57
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CROSS-REFERENCE TABLE*
Trust Indenture Indenture
Act Section Section
--------------- ---------
310(a)(1) ....................................... 7.10
(a)(2) .................................... 7.10, 10.10
(a)(3) .................................... n/a
(a)(4) .................................... n/a
(a)(5) .................................... n/a
(b) ....................................... 7.8, 7.10, 10.2
(c) ....................................... n/a
311(a) .......................................... 7.11
(b) ....................................... 7.11
(c) ....................................... n/a
312(a) .......................................... 2.5
(b) ....................................... 10.3
(c) ....................................... 10.3
313(a) .......................................... 7.6
(b)(1) .................................... n/a
(b)(2) .................................... 7.6
(c) ....................................... 7.6, 10.2
(d) ....................................... 7.6
314(a) .......................................... 4.2, 10.2
(b) ....................................... n/a
(c)(1) .................................... 10.4
(c)(2) .................................... 10.4
(c)(3) .................................... n/a
(d) ....................................... n/a
(e) ....................................... 10.5
(f) ....................................... n/a
315(a) .......................................... 7.1(b)
(b) ....................................... 7.5, 10.2
(c) ....................................... 7.1(a)
(d) ....................................... 7.1(c)
(e) ....................................... 6.11
316(a)(last sentence) ........................... 2.9
(a)(1)(A) ................................. 6.5
(a)(1)(B) ................................. 6.4
(a)(2) .................................... n/a
(b) ....................................... 6.2
(c) ....................................... 9.4
317(a)(1) ....................................... 6.8
(a)(2) .................................... 6.9
(b) ....................................... 2.4
318(a) .......................................... 10.1
(b) ....................................... n/a
(c) ....................................... 10.1
------------------
"n/a" means not applicable.
*This Cross-Reference Table shall not, for any purpose, be deemed to be a part
of the Indenture.
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THIS INDENTURE, dated as of February 1, 2002, is by and among GATX
Corporation, a New York corporation (the "Company"), GATX Financial Corporation,
a Delaware corporation (the "Guarantor"), and JPMorgan Chase Bank, a New York
banking corporation (the "Trustee"). The Company has duly authorized the
creation of its 7.5% Convertible Senior Notes due 2007 (the "Convertible
Notes"), and to provide therefor the Company, the Guarantor and the Trustee have
duly authorized the execution and delivery of this Indenture. Each party agrees
as follows for the benefit of the other party and for the equal and ratable
benefit of the holders from time to time of the Convertible Notes:
ARTICLE 1
DEFINITIONS
SECTION 1.1 Definitions.
"Affiliate" means, when used with reference to any person, any other person
directly or indirectly controlling, controlled by, or under direct or indirect
common control with, such person. For the purposes of this definition, "control"
when used with respect to any specified person means the power to direct or
cause the direction of management or policies of the referent person, directly
or indirectly, whether through the ownership of voting securities, by contract
or otherwise. The terms "controlling" and "controlled" have meanings correlative
of the foregoing.
"Agent" means any Registrar, Paying Agent, Conversion Agent or co-
registrar.
"Agent Member" means any member of, or participant in, the Depositary.
"Applicable Procedures" means, with respect to any transfer or transaction
involving a Global Security or beneficial interest therein, the rules and
procedures of the Depositary for such Global Security to the extent applicable
to such transaction and as in effect from time to time.
"Average Sale Price" of the Common Stock means, with respect to any
Conversion Date, the average of the Sales Prices of the Common Stock for each
Trading Day in the five Trading Day period immediately following the date on
which the Company delivers the notice described in Section 11.2.
"Board of Directors" means the Board of Directors of the Company or the
Guarantor, as the case may be, or in either case, any duly authorized committee
of the Board of Directors.
"Capital Stock" of any person means any and all shares, interests, rights
to purchase, warrants, options, participations or other equivalents of or
interests in (however designated) equity of such person, but excluding any debt
securities convertible into such equity.
"Change of Control" means the occurrence of one or more of the following
events: (a) any "person" or "group" (as such terms are used in Sections 13(d)
and 14(d) of the Exchange Act) is or becomes the "beneficial owner" (as defined
in Rules 13d-3 and 13d-5 under the Exchange Act) of shares representing more
than 50% of the combined voting power of the then outstanding Voting Stock of
the Company, (b) the Company consolidates with or merges into any other
corporation (other than a subsidiary of the Company), any other corporation
(other
than a subsidiary of the Company) consolidates with or merges into the Company,
(c) the outstanding Common Stock of the Company is reclassified into, exchanged
for or converted into the right to receive any other property or securities or
(d) the Company or the Company and its subsidiaries, taken as a whole, sells,
conveys, transfers or leases its properties and assets substantially as an
entirety to any person (other than to one or more wholly-owned subsidiaries of
the Company); provided, that a Change of Control under (a), (b), (c) and (d)
above shall not be deemed to have occurred if at least 90% of the aggregate fair
market value (as determined by the Company's Board of Directors) of the property
and securities received by holders of the Common Stock (excluding cash payments
for fractional shares) in the transaction or transactions constituting the
Change of Control consists of shares of common stock of the surviving person (or
its parent) 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.
"Commission" means the Securities and Exchange Commission.
"Common Stock" means any stock of any class of the Company which has no
preference in respect of dividends or of amounts payable in the event of any
voluntary or involuntary liquidation, dissolution or winding up of the Company
and which is not subject to redemption by the Company. Subject to the provisions
of Section 11.6, however, shares issuable on conversion of Convertible Notes
shall include only shares of the class designated as Common Stock of the Company
at the date of this Indenture or shares of any class or classes resulting from
any reclassification or reclassifications thereof and which have no preference
in respect of dividends or of amounts payable in the event of any voluntary or
involuntary liquidation, dissolution or winding up of the Company and which are
not subject to redemption by the Company; provided that if at any time there
shall be more than one such resulting class, the shares of each such class then
so issuable shall be substantially in the proportion which the total number of
shares of such class resulting from all such reclassifications bears to the
total number of shares of all such classes resulting from all such
reclassifications.
"Company" means the party named as such above until a successor replaces it
in accordance with Article 5 and thereafter means the successor. References to
the Company shall not include any subsidiary.
"Convertible Notes" means the 7.5% Convertible Senior Notes due 2007
issued, authenticated and delivered under this Indenture.
"Conversion Price" means the initial conversion price specified in the form
of Convertible Note in Paragraph 15 of such form, as adjusted in accordance with
the provisions of Article 11.
"Corporate Trust Office" means the corporate trust office of the Trustee at
which at any particular time the trust created by this Indenture shall
principally be administered; as of the date hereof, the Corporate Trust Office
is located at 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
2
"Default" means any event that is, or after notice or passage of time, or
both, would be, an Event of Default.
"Depositary" means, with respect to any Global Securities, a clearing
agency that is registered as such under the Exchange Act and is designated by
the Company to act as Depositary for such Global Securities (or any successor
securities clearing agency so registered), which shall initially be DTC.
"DTC" means The Depository Trust Company, a New York corporation.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder.
"Fundamental Change" means the occurrence of a Change of Control or a
Termination of Trading.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as may be approved by a significant segment of the accounting
profession of the United States, which are in effect from time to time.
"Global Security" means a Convertible Note that is registered in the
Register.
"Global Securities Legend" means the legend labeled as such and that is set
forth in Exhibit A hereto.
"Guarantor" means the party named as such above and its successors and
assigns.
"Indenture" means this Indenture as amended or supplemented from time to
time.
"Initial Purchasers" means Xxxxxxx Xxxxx Xxxxxx Inc., X.X. Xxxxxx
Securities, Inc., U.S. Bancorp Xxxxx Xxxxxxx Inc., Bank One Capital Markets,
Inc. and Credit Lyonnais Securities (USA) Inc.
"Interest Payment Date" means February 1 and August 1 of each year.
"Issue Date" means the date on which Convertible Notes are first issued and
authenticated under this Indenture.
"Liquidated Damages" has the meaning specified in paragraph 16 of the form
of Convertible Note which is attached as Exhibit A hereto.
"Maturity Date" means February 1, 2007.
"Note Custodian" means JPMorgan Chase Bank, as custodian with respect to
any Global Security, or any successor entity thereto.
3
"Offering Memorandum" means the offering memorandum dated January 28, 2002,
relating to the Convertible Notes, including all amendments thereto.
"Officer" means the Chairman of the Board, the Chief Executive Officer, the
President, the Chief Financial Officer, the Chief Accounting Officer, any
Executive Vice President, Senior Vice President or Vice President (whether or
not designated by a number or numbers or word or words before or after the title
"Vice President"), the Treasurer, the Secretary and any Assistant Treasurer or
any Assistant Secretary of the Company or the Guarantor, as the case may be.
"Officers' Certificate" means a certificate signed by any two of the
following Officers of the Company or the Guarantor, as the case may be: the
Chairman of the Board, the Chief Executive Officer, the President, the Chief
Financial Officer, a Vice President, the Treasurer, the Controller or the
Secretary, and delivered to the Trustee. One of the officers giving an Officers'
Certificate given pursuant to Section 4.3 shall be the principal executive,
financial or accounting officer of the Company.
"Opinion of Counsel" means a written opinion from legal counsel, who may be
an employee of or counsel to the Company, the Guarantor or the Trustee except to
the extent otherwise indicated in this Indenture, and shall be reasonably
acceptable to the Trustee.
A "person" means any individual, corporation, partnership, joint venture,
trust, estate, unincorporated organization, limited liability company or
government or any agency or political subdivision thereof.
"Registration Agreement" means the Registration Rights Agreement relating
to the Convertible Notes and Common Stock issuable upon conversion of such
Convertible Notes dated as of February 1, 2002, by and among the Company, the
Guarantor and the Initial Purchasers, as such agreement may be amended, modified
or supplemented from time to time.
"Regular Record Date" means the January 15 or July 15 immediately preceding
each Interest Payment Date.
"Restricted Common Stock Legend" means the legend labeled as such and that
is set forth in Exhibit B hereto.
"Restricted Securities Legend" means the legend labeled as such and that is
set forth in Exhibit A hereto.
"Sale Price" of the Common Stock on any date means the closing sale price
per share (or, if no closing sale price is reported, the average of the bid and
ask prices or, if more than one in either case, the average of the average bid
and average ask prices) on such date as reported in the composite transactions
for the principal United States securities exchange on which the Common Stock is
traded or, if the Common Stock is not listed on a United States national or
regional securities exchange, as reported by the National Association of
Securities Dealers Automated Quotation System, appropriately adjusted to take
into account the occurrence after the applicable Conversion Date of an event
that would result in an adjustment of the Conversion Price.
4
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
"Shelf Registration Statement" shall have the meaning set forth in the
Registration Agreement.
A "subsidiary" means, with respect to any person, (i) any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of capital stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by such
person or one or more of the other subsidiaries of that person (or a combination
thereof) and (ii) any partnership (a) the sole general partner or managing
general partner of which is such person or a subsidiary of such person or (b)
the only general partners of which are such person or of one or more
subsidiaries of such person (or any combination thereof).
"Termination of Trading" will be deemed to have occurred if the Common
Stock (or other common stock into which the Convertible Notes are then
convertible) is neither listed for trading on the New York Stock Exchange nor
approved for trading on the Nasdaq National Market.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code (SS) 77aaa-
77bbbb) as in effect on the date of execution of this Indenture, except as
provided in Sections 9.3 and 11.6.
"Trading Day" shall mean (x) if the applicable security is listed or
admitted for trading on the New York Stock Exchange or another national
securities exchange, a day on which the New York Stock Exchange or such other
national securities exchange is open for business or (y) if the applicable
security is quoted on the Nasdaq National Market, a day on which trades may be
made thereon or (z) if the applicable security is not so listed, admitted for
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.
"Trustee" means the party named as such above until a successor replaces it
in accordance with the applicable provisions of this Indenture and thereafter
means the successor.
"Trust Officer" means an officer in the Corporate Trust Office of the
Trustee and having direct responsibility for the administration of this
Indenture.
"U.S. Government Obligations" means direct obligation of the United States
of America for the payment of which the full faith and credit of the United
States of America is pledged. In order to have money available on a payment date
to pay principal or interest on the Convertible Notes, the U.S. Government
Obligations shall be payable as to principal or interest on or before such
payment date in such amounts as will provide the necessary money. U.S.
Government Obligations shall not be callable at the issuer's option.
"Voting Stock" of a corporation means all classes of Capital Stock of such
corporation then outstanding and normally entitled to vote in the election of
directors.
5
SECTION 1.2 Other Definitions.
Defined in Section
"Bankruptcy Law" 6.1
"business day" 10.7
"closing price" 11.5
"Conversion Agent" 2.3
"Conversion Date 11.2
"Current Market Price" 11.5
"Custodian" 6.1
"Fundamental Change Date" 4.6
"Fundamental Change Offer" 4.6
"Fundamental Change Payment" 4.6
"Fundamental Change Payment Date" 4.6
"Event of Default" 6.1
"Expiration Time" 11.5
"fair market value" 11.5
"Legal Holiday" 10.7
"non-electing share" 11.5
"Paying Agent" 2.3
"Purchased Shares" 11.5
"Record Date" 11.5
"Registrar" 2.3
"Register" 2.3
"Securities" 11.5
"Trigger Event" 11.5
SECTION 1.3 Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following meanings:
"Commission" means the Commission;
"indenture securities" means the Convertible Notes;
"indenture security holder" means a holder of a Convertible Note;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee; and
"obligor" on the Convertible Notes means the Company, the Guarantor or
any other obligor on the Convertible Notes.
6
All other terms in this Indenture that are defined by the TIA, defined by
TIA reference to another statute or defined by Commission rule under the TIA
have the meanings so assigned to them.
SECTION 1.4 Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned
to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the plural
include the singular; and
(5) the male, female and neuter genders include one another.
ARTICLE 2
THE CONVERTIBLE NOTES
SECTION 2.1 Form and Dating.
(a) Global Securities. The Convertible Notes are being offered and sold by
the Company pursuant to a Purchase Agreement relating to the Convertible Notes,
dated January 28, 2002, among the Company, the Guarantor and the Initial
Purchasers (the "Purchase Agreement").
The Convertible Notes are being offered and sold (i) in reliance on
Regulation S under the Securities Act ("Regulation S") or (ii) to "qualified
institutional buyers" as defined in Rule 144A ("QIBs") in reliance on Rule 144A
under the Securities Act ("Rule 144A"), each as provided in the Purchase
Agreement, and shall be issued in the form of one or more permanent global
securities in definitive, fully registered form without interest coupons with
the Global Securities Legend and Restricted Securities Legend set forth in
Exhibit A hereto (each, a "Global Security"). Any Global Security shall be
deposited on behalf of the purchasers of the Convertible Notes represented
thereby with the Trustee, as custodian for the Depositary, and registered in the
name of the Depositary or a nominee of the Depositary for the accounts of
participants in the Depositary (and, in the case of Convertible Notes held in
accordance with Regulation S, registered with the Depositary for the accounts of
designated agents holding on behalf of the Euroclear System ("Euroclear") or
Clearstream Banking, societe anonyme ("Clearstream")), duly executed by the
Company and authenticated by the Trustee as hereinafter provided. The aggregate
principal amount of a Global Security may from time to time be increased or
decreased by adjustments made on the records of the Trustee and the Depositary
or its nominee as hereinafter provided.
7
(b) Book-Entry Provisions. This Section 2.1(b) shall apply only to a Global
Security deposited with or on behalf of the Depositary.
The Company shall execute and the Trustee shall, in accordance with this
Section 2.1(b) and the written order of the Company, authenticate and deliver
initially one or more Global Securities that (i) shall be registered in the name
of Cede & Co. or other nominee of such Depositary and (ii) shall be delivered by
the Trustee to such Depositary or pursuant to such Depositary's instructions or
held by the Trustee as custodian for the Depositary pursuant to a FAST Balance
Certificate Agreement between the Depositary and the Trustee.
Members of, or participants in, the Depositary ("Agent Members") shall have
no rights under this Indenture with respect to any Global Security held on their
behalf by the Depositary or by the Trustee as the custodian of the Depositary or
under such Global Security, and the Depositary may be treated by the Company,
the Trustee and any agent of the Company or the Trustee as the absolute owner of
such Global Security 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 impair, as between the
Depositary and its Agent Members, the operation of customary practices of such
Depositary governing the exercise of the rights of a holder of a beneficial
interest in any Global Security.
The provisions of the "Operating Procedures of the Euroclear System" and
"Terms and Conditions Governing Use of Euroclear" and the "Management
Regulations and Instructions to Participants" of Clearstream shall be applicable
to interests in any Global Securities that are held by participants through
Euroclear or Clearstream. The Trustee shall have no obligation to notify holders
of any such procedures or to monitor or enforce compliance with the same.
(c) Definitive Securities. Except as provided in Section 2.10, owners of
beneficial interests in Global Securities will not be entitled to receive
physical delivery of certificated Convertible Notes in definitive form. If
applicable, certificated Convertible Notes in definitive form will bear the
Restricted Securities Legend set forth on Exhibit A unless removed in accordance
with Section 2.6(c).
SECTION 2.2 Execution and Authentication.
One Officer shall sign the Convertible Notes for the Company by manual
or facsimile signature.
If an Officer whose signature is on a Convertible Note no longer holds that
office at the time the Convertible Note is authenticated, the Convertible Note
shall nevertheless be valid.
A Convertible Note shall not be valid until authenticated by the manual
signature of the Trustee. The signature shall be conclusive evidence that the
Convertible Note has been authenticated under this Indenture.
Upon a written order of the Company signed by an Officer of the Company,
the Trustee shall authenticate Convertible Notes for original issue in an
aggregate principal amount of
8
$175,000,000 to the Initial Purchasers. The aggregate principal amount of
Convertible Notes outstanding at any time may not exceed that amount except as
provided in Section 2.7.
The Convertible Notes shall be issuable only in registered form without
coupons and only in denominations of $1,000 or any integral multiple thereof.
The Trustee may appoint an authenticating agent acceptable to the Company
to authenticate Convertible Notes. An authenticating agent may authenticate
Convertible Notes whenever the Trustee may do so. Each reference in this
Indenture to authentication by the Trustee includes authentication by such
agent. An authenticating agent has the same right as an Agent to deal with the
Company or an Affiliate of the Company.
SECTION 2.3 Registrar, Paying Agent and Conversion Agent.
The Company shall maintain or cause to be maintained in such locations as
it shall determine, which may be the Corporate Trust Office, an office or
agency: (i) where securities may be presented for registration of transfer or
for exchange ("Registrar"); (ii) where Convertible Notes may be presented for
payment ("Paying Agent"); (iii) an office or agency where Convertible Notes may
be presented for conversion (the "Conversion Agent"); and (iv) where notices and
demands to or upon the Company or the Guarantor in respect of Convertible Notes
and this Indenture may be served by the holders of the Convertible Notes. The
Registrar shall keep a register ("Register") of the Convertible Notes and of
their transfer and exchange. The Company may appoint one or more co-registrars,
one or more additional paying agents and one or more additional conversion
agents. The term "Paying Agent" includes any additional paying agent, and the
term "Conversion Agent" includes any additional Conversion Agent. The Company
may change any Paying Agent, Registrar, Conversion Agent or co-registrar without
prior notice. The Company shall notify the Trustee of the name and address of
any Agent not a party to this Indenture and shall enter into an appropriate
agency agreement with any Registrar, Paying Agent, Conversion Agent or
co-registrar not a party to this Indenture. The agreement shall implement the
provisions of this Indenture that relate to such Agent. The Company or any of
its subsidiaries may act as Paying Agent, Registrar, Conversion Agent or
co-registrar, except that for purposes of Article 8 and Section 4.6, neither the
Company nor any of its subsidiaries shall act as Paying Agent. If the Company
fails to appoint or maintain another entity as Registrar, or Paying Agent or
Conversion Agent, the Trustee shall act as such, and the Trustee shall initially
act as such.
SECTION 2.4 Paying Agent To Hold Money in Trust.
The Company shall require each Paying Agent (other than the Trustee, who
hereby so agrees), to agree in writing that the Paying Agent will hold in trust
for the benefit of holders of the Convertible Notes or the Trustee all money
held by the Paying Agent for the payment of principal or interest (including
Liquidated Damages) on the Convertible Notes, and will notify the Trustee of any
default by the Company in respect of making any such payment. While any such
default continues, the Trustee may require a Paying Agent to pay all money held
by it to the Trustee. The Company at any time may require a Paying Agent to pay
all money held by it to the Trustee. Upon payment over to the Trustee, the
Paying Agent (if other than the Company or a subsidiary of the Company) shall
have no further liability for the money. If the Company or a
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subsidiary of the Company acts as Paying Agent, it shall segregate and hold in a
separate trust fund for the benefit of the holders of the Convertible Notes all
money held by it as Paying Agent. In the absence of a written request from the
Company or the Guarantor to return unclaimed funds to the Company or the
Guarantor, as the case may be, the Trustee shall from time to time deliver all
unclaimed funds held by it in any capacity hereunder to or as directed by
applicable escheat authorities, as determined by the Trustee in its sole
discretion, in accordance with the customary practices and procedures of the
Trustee. Any unclaimed funds held by the Trustee in any capacity hereunder
pursuant to this Section 2.4 shall be held uninvested and without any liability
for interest.
SECTION 2.5 Holder Lists.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
holders of Convertible Notes and shall otherwise comply with TIA ss.312(a). If
the Trustee is not the Registrar, the Company shall furnish to the Trustee at
least seven business days before each Interest Payment Date, and as the Trustee
may request in writing within fifteen (15) days after receipt by the Company of
any such request (or such lesser time as the Trustee may reasonably request in
order to enable it to timely provide any notice to be provided by it hereunder),
a list in such form and as of such date as the Trustee may reasonably require of
the names and addresses of holders of Convertible Notes.
SECTION 2.6 Transfer and Exchange.
(a) When Convertible Notes are presented to the Registrar or a co-registrar
with a request to register a transfer or to exchange them for an equal principal
amount of Convertible Notes for other denominations, the Registrar shall
register the transfer or make the exchange if its requirements for such
transactions are met. To permit registrations of transfers and exchanges, the
Company shall issue, and the Trustee shall authenticate, Convertible Notes at
the Registrar's request, bearing registration numbers not contemporaneously
outstanding. No service charge shall be made to a holder for any registration of
transfer or exchange (except as otherwise expressly permitted herein), but the
Company and the Registrar may require payment of a sum sufficient to cover any
transfer tax or other governmental charge payable upon exchanges pursuant to
Sections 2.7, 9.5 or 11.2.
The Company or the Registrar shall not be required to register the transfer
of any Convertible Notes surrendered for repurchase pursuant to Section 4.6.
All Convertible Notes issued upon any transfer or exchange of Convertible
Notes in accordance with this Indenture shall be the valid obligations of the
Company, evidencing the same debt, and entitled to the same benefits under this
Indenture as the Convertible Notes surrendered upon such registration of
transfer or exchange.
(b) Notwithstanding any provision to the contrary herein, so long as a
Global Security remains outstanding and is held by or on behalf of the
Depositary, transfers of a Global Security, in whole or in part, or of any
beneficial interest therein, shall only be made in accordance with Sections
2.1(b) and 2.10; provided, however, that beneficial interests in a Global
Security may be transferred to persons who take delivery thereof in the form of
a beneficial interest in the Global
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Security in accordance with the transfer restrictions set forth under the
heading "Notice to Investors" in the Offering Memorandum and, if applicable, in
the Restricted Securities Legend.
Except for transfers or exchanges made in accordance with Section 2.10,
transfers of a Global Security shall be limited to transfers of such Global
Security in whole, but not in part, to nominees of the Depositary or to a
successor of the Depositary or such successor's nominee.
In the event that a Global Security is exchanged for Convertible Notes in
definitive form pursuant to Section 2.10 prior to the effectiveness of a Shelf
Registration Statement with respect to such Convertible Notes, such exchange may
occur, and such Convertible Notes may be further exchanged or transferred, only
upon receipt by the Registrar of (1) such Global Security or such Convertible
Notes in definitive form, duly endorsed as provided herein, as applicable, (2)
instructions from the holder directing the Trustee to authenticate and deliver
one or more Convertible Notes in definitive form of the same aggregate principal
amount as the Global Security or the Convertible Notes in definitive form (or
portion thereof), as applicable, to be transferred, such instructions to contain
the name or names of the designated transferee or transferees, the authorized
denomination or denominations of the Convertible Notes in definitive form to be
so issued and appropriate delivery instructions, and (3) such certifications or
other information and, in the case of transfers pursuant to Rule 144 under the
Securities Act, legal opinions as the Company 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
(including the certification requirements intended to ensure that such transfers
comply with Rule 144A or Regulation S under the Securities Act, as the case may
be), and upon compliance with such other procedures as may from time to time be
adopted by the Company and the Registrar.
(c) Except in connection with a Shelf Registration Statement contemplated
by and in accordance with the terms of the Registration Agreement, if
Convertible Notes are issued upon the registration of transfer, exchange or
replacement of Convertible Notes bearing a Restricted Securities Legend, or if a
request is made to remove such a Restrictive Securities Legend on Convertible
Notes, the Convertible Notes so issued shall bear the Restricted Securities
Legend, or a Restricted Securities Legend shall not be removed, as the case may
be, unless there is delivered to the Company such satisfactory evidence, which,
in the case of a transfer made pursuant to Rule 144 under the Securities Act,
may include an opinion of counsel given in accordance with the laws in the State
of New York, as may be reasonably required by the Company, that neither the
legend nor the restrictions on transfer set forth therein are required to ensure
that transfers thereof comply with the provisions of Rule 144A, Rule 144 or
Regulation S under the Securities Act or that such Convertible Notes are not
"restricted" within the meaning of Rule 144 under the Securities Act. Upon
provision to the Company of such satisfactory evidence, the Trustee, at the
written direction of the Company, shall authenticate and deliver Convertible
Notes that do not bear the legend. The Company shall not otherwise be entitled
to require the delivery of a legal opinion in connection with any transfer or
exchange of Securities.
(d) Neither the Trustee nor any Agent shall have any responsibility for any
actions taken or not taken by the Depositary.
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(e) 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 Convertible Notes (including any transfers between or among the
Depositary's participants or beneficial owners of interests in any Global
Security) other than to require delivery of such certificates and other
documentation as is 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 2.7 Replacement Convertible Notes.
If the holder of a Convertible Note claims that its Convertible Note has
been lost, destroyed or wrongfully taken, the Company shall issue and the
Trustee shall authenticate a replacement Convertible Note if the Trustee's and
the Company's requirements are met. If required by the Trustee or the Company as
a condition of receiving a replacement Convertible Note, the holder of a
Convertible Note must provide a certificate of loss and an indemnity and/or an
indemnity bond sufficient, in the judgment of both the Company and the Trustee,
to fully protect the Company, the Trustee, any Agent and any authenticating
agent from any loss, liability, cost or expense which any of them may suffer or
incur if the Convertible Note is replaced. The Company and the Trustee may
charge the relevant holder for their expenses in replacing any Convertible Note.
The Trustee or any authenticating agent may authenticate any such
substituted Convertible Note and deliver the same upon the receipt of such
security or indemnity as the Trustee, the Company and, if applicable, such
authenticating agent may require. Upon the issuance of any substituted
Convertible Note, the Company and the Trustee may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto and any other expenses connected therewith. In case any
Convertible Note, which has matured or is about to mature, or which has been
submitted for repurchase pursuant to Section 4.6 or is about to be converted
into Common Stock pursuant to Article 11, shall become mutilated or be
destroyed, lost or stolen, the Company may, instead of issuing a substitute
Convertible Note, pay or authorize the payment of or convert or authorize the
conversion of the same (without surrender thereof except in the case of a
mutilated Convertible Note), as the case may be, if the applicant for such
payment or conversion shall furnish to the Company, to the Trustee and, if
applicable, to the authenticating agent such security or indemnity as may be
required by them to save each of them harmless for any loss, liability, cost or
expense caused by or connected with such substitution, and, in case of
destruction, loss or theft, evidence satisfactory to the Company, the Trustee
and, if applicable, any paying agent or conversion agent of the destruction,
loss or theft of such Convertible Note and of the ownership thereof.
Every replacement Convertible Note is an additional obligation of the
Company and shall be entitled to all the benefits provided under this Indenture
equally and proportionately with all other Convertible Notes duly issued,
authenticated and delivered hereunder.
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SECTION 2.8 Outstanding Convertible Notes.
The Convertible Notes outstanding at any time are all the Convertible Notes
properly authenticated by the Trustee except for those canceled by the Trustee,
those delivered to it for cancellation, and those described in this Section as
not outstanding.
If a Convertible Note is replaced pursuant to Section 2.7, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Convertible Note is held by a bona fide purchaser.
If Convertible Notes are considered paid under Section 4.1 or converted
under Article 11, they cease to be outstanding, and interest (and Liquidated
Damages, if any) on them ceases to accrue.
Subject to Section 2.9 hereof, a Convertible Note does not cease to be
outstanding because the Company or an Affiliate of the Company holds the
Convertible Note.
SECTION 2.9 When Convertible Notes Owned by the Company or an Affiliate are
Disregarded.
In determining whether the holders of the required principal amount of
Convertible Notes have concurred in any direction, waiver or consent,
Convertible Notes owned by the Company or an Affiliate of the Company shall be
considered as though they are not outstanding except that for the purposes of
determining whether the Trustee shall be protected in relying on any such
direction, waiver or consent, only Convertible Notes which a Trust Officer of
the Trustee actually knows are so owned shall be so disregarded.
SECTION 2.10 Temporary Convertible Notes.
(a) Until definitive Convertible Notes are ready for delivery, the Company
may prepare and the Trustee shall authenticate temporary Convertible Notes.
Temporary Convertible Notes shall be substantially in the form of definitive
Convertible Notes but may have variations that the Company considers appropriate
for temporary Convertible Notes and shall be reasonably acceptable to the
Trustee. Without unreasonable delay, the Company shall prepare and the Trustee
shall authenticate definitive Convertible Notes in exchange for temporary
Convertible Notes.
(b) A Global Security deposited with the Depositary or with the Trustee as
custodian for the Depositary pursuant to Section 2.1 shall be transferred to the
beneficial owners thereof in the form of certificated Convertible Notes in
definitive form only if such transfer complies with Section 2.6 and (i) the
Depositary notifies the Company that it is unwilling or unable to continue as
Depositary for such Global Security or if at any time such Depositary ceases to
be a "clearing agency" registered under the Exchange Act and a successor
Depositary is not appointed by the Company within 90 days of such notice, or
(ii) an Event of Default has occurred and is continuing.
(c) Any Global Security or interest therein that is transferable to the
beneficial owners thereof in the form of certificated Convertible Notes in
definitive form shall, if held by
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the Depository, be surrendered by the Depositary to the Trustee, without charge,
and the Trustee shall authenticate and deliver, upon such transfer of each
portion of such Global Security, an equal aggregate principal amount of
Convertible Notes of authorized denominations in the form of certificated
Convertible Notes in definitive form. Any portion of a Global Security
transferred pursuant to this Section shall be executed, authenticated and
delivered only in denominations of $1,000 and any integral multiple thereof and
registered in such names as the Depositary shall direct. Any Convertible Notes
in the form of certificated Convertible Notes in definitive form delivered in
exchange for an interest in the Global Security shall, except as otherwise
provided by Section 2.6(c), bear the Restricted Securities Legend set forth in
Exhibit A hereto.
(d) Prior to any transfer pursuant to Section 2.10(b), the registered
holder of a Global Security may grant proxies and otherwise authorize any
person, including Agent Members and persons that may hold interests through
Agent Members, to take any action which a holder is entitled to take under this
Indenture or the Convertible Notes.
SECTION 2.11 Cancellation.
The Company at any time may deliver Convertible Notes to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Convertible Notes surrendered to them for registration of transfer, exchange,
payment, replacement, conversion, repurchase or cancellation. The Trustee and no
one else may cancel Convertible Notes surrendered for registration of transfer,
exchange, payment, replacement, conversion, repurchase or cancellation. The
Trustee shall dispose of canceled Convertible Notes in accordance with its then
customary procedures, unless the Company shall otherwise direct in writing. The
Company may not issue new Convertible Notes to replace Convertible Notes that it
has paid or repurchased or that have been delivered to the Trustee for
cancellation or that any holder has (i) converted pursuant to Article 11 hereof
or (ii) submitted for repurchase pursuant to Section 4.6 hereof (unless
revoked).
SECTION 2.12 Defaulted Interest.
If the Company fails to make a payment of interest on the Convertible
Notes, it shall pay such defaulted interest plus, to the extent lawful, any
interest payable on the defaulted interest. It may pay such defaulted interest,
plus any such interest payable on it, to the persons who are holders of
Convertible Notes on a subsequent special record date. The Company shall fix any
such record date and payment date. At least 15 days before any such record date,
the Company shall mail to holders of the Convertible Notes a notice that states
the record date, payment date and amount of such interest to be paid.
SECTION 2.13 CUSIP Number.
The Company in issuing the Convertible Notes may use a "CUSIP" number, and
if so, such CUSIP number shall be included in notices of repurchase as a
convenience to holders of Convertible Notes; provided, however, that any such
notice may state that no representation is made as to the correctness or
accuracy of the CUSIP number printed in the notice or on the Convertible Notes
and that reliance may be placed only on the other identification numbers printed
on the Convertible Notes; and provided further that neither the Trustee nor any
Xxxxxxxxx
00
shall have any liability as to the correctness or accuracy of any CUSIP number
so printed in the notice. The Company will promptly notify the Trustee of any
change in the CUSIP number.
SECTION 2.14 Regulation S.
The Company agrees that it will refuse to register any transfer of
Convertible Notes or any shares of Common Stock issued upon conversion of
Convertible Notes that is not made in accordance with the provisions of
Regulation S under the Securities Act, pursuant to a registration statement
which has been declared effective under the Securities Act or pursuant to an
available exemption from the registration requirements of the Securities Act;
provided that the provisions of this paragraph shall not be applicable to any
Convertible Notes which do not bear a Restricted Securities Legend or to any
shares of Common Stock evidenced by certificates which do not bear a Restricted
Common Stock Legend.
ARTICLE 3
REDEMPTION
SECTION 3.1 No Redemption Prior to the Maturity Date.
The Company may not redeem the Convertible Notes prior to their maturity.
ARTICLE 4
COVENANTS
SECTION 4.1 Payment of Convertible Notes.
The Company shall pay the principal of and interest (including Liquidated
Damages, if any) on the Convertible Notes on the dates and in the manner
provided in the Convertible Notes. Principal, interest and the Fundamental
Change Payment shall be considered paid on the date due if the Trustee or Paying
Agent (other than the Company or a subsidiary of the Company) holds as of 10:00
a.m., New York City time, on that date immediately available funds designated
for and sufficient to pay all principal, interest (including Liquidated Damages)
or the Fundamental Change Payment then due. To the extent lawful, the Company
shall pay interest (including post- petition interest in any proceeding under
any Bankruptcy Law) on (i) overdue principal, at the rate borne by Convertible
Notes, compounded semiannually; and (ii) overdue installments of interest
(without regard to any applicable grace period) at the same rate, compounded
semiannually.
SECTION 4.2 Rule 144A Information; Periodic Reports to the Trustee.
So long as any of the Convertible Notes or shares of Common Stock issuable
upon conversion of the Convertible Notes are "restricted securities" within the
meaning of Rule 144(a)(3) under the Securities Act, each of the Company and the
Guarantor will, during any period in which it is not subject to and in
compliance with Section 13 or Section 15(d) of the Exchange Act, provide to each
holder and beneficial owner of such restricted securities and to each
prospective purchaser (as designated by such holder or beneficial owner) of such
restricted
15
securities, upon the request of such holder or beneficial owner or prospective
purchaser, any information required to be provided by Rule 144A(d)(4) under the
Securities Act.
The Company and the Guarantor shall provide to the Trustee such documents,
reports and information as required by TIA ss.314 (if any) in the form, in the
manner and at the times required by TIA ss.314. 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 and the Guarantor's compliance with any of its
covenants hereunder (as to which the Trustee is entitled to rely exclusively on
Officers' Certificates).
SECTION 4.3 Compliance Certificate.
The Company and the Guarantor each shall deliver to the Trustee within 120
days after the end of its respective fiscal year, an Officers' Certificate
stating that neither of the signers thereof has any knowledge, after due
investigation during the preceding fiscal year made under the supervision of the
signing officers, of any Default or Event of Default (or, if any Default or
Event of Default shall have occurred, describing all such Defaults or Events of
Default of which he or she may have knowledge). As of the date hereof, the
fiscal year of each of the Company and the Guarantor ends on December 31.
The Company shall, so long as any of the Convertible Notes are outstanding,
deliver to the Trustee, forthwith upon becoming aware of any Default or Event of
Default, an Officers' Certificate specifying such Default or Event of Default
and what action the Company is taking or proposes to take with respect thereto.
SECTION 4.4 Maintenance of Office or Agency.
The Company shall maintain or cause to be maintained the office or agency
required under Section 2.3. The Company shall give prompt written notice to the
Trustee of the location, and any change in the location, of such office or
agency not maintained by the Trustee. If at any time the Company shall fail to
maintain any such required office or agency or shall fail to furnish the Trustee
with the address thereof, presentations, surrenders, notices and demands with
respect to the Convertible Notes may be made or served at the Corporate Trust
Office of the Trustee.
The Company may also from time to time designate one or more other offices
or agencies where the Convertible Notes may be presented or surrendered for any
or all such purposes and may from time to time rescind such designation.
SECTION 4.5 Continued Existence.
Subject to Article 5, the Company shall do or cause to be done all things
necessary to preserve and keep in full force and effect its corporate existence.
SECTION 4.6 Repurchase Upon Fundamental Change.
Following a Fundamental Change (the date of each such occurrence being the
"Fundamental Change Date") prior to the Maturity Date, the Company shall notify
the holders of
16
Convertible Notes in writing of such occurrence and shall make an offer (the
"Fundamental Change Offer") to repurchase all Convertible Notes then outstanding
at a repurchase price in cash (the "Fundamental Change Payment") equal to 100%
of the principal amount thereof, plus accrued and unpaid interest and Liquidated
Damages, if any, to, but excluding, the Fundamental Change Payment Date (as
defined below).
Notice of a Fundamental Change shall be mailed by or at the direction of
the Company to the holders of Convertible Notes as shown on the Register and to
beneficial owners as required by law not more than 30 days after the applicable
Fundamental Change Date at the addresses as shown on the Register of holders
maintained by the Registrar, with a copy to the Trustee and the Paying Agent.
During the period specified in such notice, holders of Convertible Notes may
elect to tender their Convertible Notes in whole or in part in integral
multiples of $1,000 in exchange for cash. Payment shall be made by the Company
in respect of Convertible Notes properly tendered pursuant to this Section on or
before the day (the "Fundamental Change Payment Date") which shall be the
sixtieth day after the date of the notice of the applicable Fundamental Change.
The notice, which shall govern the terms of the Fundamental Change Offer,
shall include such disclosures as are required by law and shall state:
(a) that a Fundamental Change Offer is being made pursuant to this Section
4.6 and that all Convertible Notes will be accepted for payment;
(b) a brief description of the event, transaction or transactions that
constitute the Fundamental Change;
(c) the Fundamental Change Payment for each Convertible Note and the
Fundamental Change Payment Date;
(d) that any Convertible Note not accepted for payment will continue to
accrue interest and Liquidated Damages, if applicable, in accordance with the
terms thereof;
(e) that, unless the Company defaults on making the Fundamental Change
Payment, any Convertible Note accepted for payment pursuant to the Fundamental
Change Offer shall cease to accrue interest and Liquidated Damages, if
applicable, on the Fundamental Change Payment Date and no further interest or
Liquidated Damages shall accrue on or after such date;
(f) that holders electing to have Convertible Notes repurchased pursuant to
a Fundamental Change Offer will be required to deliver, no later than the
sixtieth day after the date of the Company's notice described in this paragraph,
a repurchase notice electing to require the Company to repurchase all or some
portion of the Convertible Notes held by such holder, which notice shall state
(i) the name of the holder, (ii) the principal amount of Convertible Notes the
holder is delivering for purchase which must be $1,000 or an integral multiple
thereof and (iii) the Convertible Note certificate number (if any);
(g) that holders of Convertible Notes will be entitled to withdraw their
election if the Paying Agent receives, not later than 5:00 p.m., New York City
time, on the Fundamental Change Payment Date, a facsimile transmission or letter
setting forth (i) the name of the holder,
17
(ii) the principal amount of Convertible Notes the holder delivered for
purchase, (iii) the Convertible Note certificate number (if any) delivered, (iv)
a statement that such holder is withdrawing his election to have such
Convertible Notes purchased, (v) the principal amount of Convertible Notes being
withdrawn, (vi) the Convertible Note certificate number (if any) being withdrawn
and (vii) the principal amount of Convertible Notes that remains subject to the
Fundamental Change Offer, if any;
(h) that holders whose Convertible Notes are repurchased only in part will
be issued Convertible Notes equal in principal amount to the unpurchased portion
of the Convertible Notes surrendered provided that the unpurchased portion shall
be in an authorized denomination;
(i) the instructions that holders must follow in order to tender their
Convertible Notes; and
(j) that in the case of a Fundamental Change Payment Date that is also an
Interest Payment Date, the interest payment and Liquidated Damages, if any, due
on such date shall be paid to the person in whose name the Convertible Note is
registered at the close of business on the Record Date immediately preceding
such Interest Payment Date.
On the Fundamental Change Payment Date, the Company shall accept for
payment all Convertible Notes or portions thereof properly tendered pursuant to
the Fundamental Change Offer. Prior to 11:00 a.m. (local time in The City of New
York) on the business day following the Fundamental Change Payment Date, the
Company shall deposit with the Paying Agent money sufficient to pay the
Fundamental Change Payment with respect to all Convertible Notes or portions
thereof so tendered and accepted and deliver or cause to be delivered to the
Trustee the Convertible Notes so accepted together with an Officers' Certificate
setting forth the aggregate principal amount of Convertible Notes or portions
thereof tendered to and accepted for payment by the Company. Promptly following
the Fundamental Change Payment Date, the Paying Agent shall mail or deliver the
Fundamental Change Payment to the holders of Convertible Notes so accepted and
the Trustee shall as soon as reasonably practicable authenticate and mail or
cause to be transferred by book entry to such holders a new Convertible Note
equal in principal amount to any unpurchased portion of the Convertible Note
surrendered, if any; provided that such new Convertible Notes will be in a
principal amount of $1,000 or an integral multiple thereof. Any Convertible
Notes not so accepted shall be promptly mailed or delivered by the Company to
the holder thereof.
In the case of any reclassification, change, consolidation, merger, share
exchange, combination or sale or conveyance to which Section 11.6 applies in
which the Common Stock of the Company is changed or exchanged into the right to
receive stock, securities or other property or assets (including cash) which
includes shares of common stock of the Company or another person that are, or
upon issuance will be, traded on a United States national securities exchange or
approved for trading on an established automated over-the-counter trading market
in the United States and such shares constitute at the time such change or
exchange becomes effective in excess of 90% of the aggregate fair market value
of such stock, securities or other property and assets (including cash) (as
determined by the Company, which determination shall be conclusive and binding),
then the person formed by such consolidation or resulting from such merger or
share exchange or which acquires such assets, as the case may be, shall execute
and
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deliver to the Trustee a supplemental indenture (which shall comply with the TIA
as in force at the date of execution of such supplemental indenture) modifying
the provisions of this Indenture relating to the right of holders of Convertible
Notes to cause the Company to repurchase Convertible Notes following a
Fundamental Change, including the applicable provisions of this Section 4.6 and
the definitions of Fundamental Change, Change of Control and Termination of
Trading, as appropriate, as determined in good faith by the Company (which
determination shall be conclusive and binding), to make such provision apply to
such common stock and the issuer thereof if different from the Company and
Common Stock of the Company (in lieu of the Company and the Common Stock of the
Company).
There shall be no purchase of any Convertible Notes pursuant to this
Section 4.6 if there has occurred (prior to, on or after, as the case may be,
the giving, by the holders of such Convertible Notes, of the required
Fundamental Change repurchase notice) and is continuing, an Event of Default
(other than a default in the payment of the Fundamental Change Payment with
respect to such Convertible Notes). The Paying Agent will promptly return to the
respective holders any Convertible Notes (x) with respect to which a Fundamental
Change repurchase notice has been withdrawn in compliance with this Indenture or
(y) held by it during the continuance of an Event of Default (other than a
default in the payment of the Fundamental Change Payment with respect to such
Convertible Notes) in which case upon such return the Fundamental Change
repurchase notice with respect thereto shall be deemed to have been withdrawn.
The Fundamental Change Offer shall be made by the Company in compliance
with all applicable provisions of the Exchange Act, and all applicable tender
offer rules promulgated thereunder, to the extent such laws and regulations are
then applicable and shall include all instructions and materials that the
Company shall reasonably deem necessary to enable such holders of Convertible
Notes to tender their Convertible Notes.
SECTION 4.7 Appointments to Fill Vacancies in Trustee's Office.
The Company, whenever necessary to avoid or fill a vacancy in the office of
Trustee, will appoint, in the manner provided in Section 7.8, a Trustee, so that
there shall at all times be a Trustee hereunder.
SECTION 4.8 Stay, Extension and Usury Laws.
The Company covenants (to the extent that it may lawfully do so) that it
shall not at any time insist upon, plead or in any manner whatsoever claim or
take the benefit or advantage of, any stay, extension or usury law wherever
enacted, now or at any time hereafter enforced, that may affect the Company's
obligation to pay the Convertible Notes; and the Company (to the extent that it
may lawfully do so) hereby expressly waives all benefit or advantage of any such
law insofar as such law applies to the Convertible Notes, and covenants that it
shall not, by resort to any such law, hinder, delay or impede the execution of
any power herein granted to the Trustee, but will suffer and permit the
execution of every such power as though no such law has been enacted.
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SECTION 4.9 Taxes.
The Company shall, and shall cause each of its subsidiaries to, pay prior
to delinquency all taxes, assessments and government levies; provided, however,
that the Company shall not be required to pay or cause to be paid any such tax,
assessment or levy (A) if the failure to do so will not, in the aggregate, have
a material adverse impact on the Company and its subsidiaries taken as a whole,
or (B) if the amount, applicability or validity is being contested in good faith
by appropriate proceedings.
SECTION 4.10 Investment Company Act.
As long as any Convertible Notes are outstanding, the Company will conduct
its business and operations so as not to become an "investment company" within
the meaning of the Investment Company Act of 1940, as amended (the "Investment
Company Act"), and will take all steps required in order for it to continue not
to be an "investment company" and not to be required to be registered under the
Investment Company Act, including, if necessary, redeployment of the assets of
the Company.
ARTICLE 5
SUCCESSORS
SECTION 5.1 When the Company May Merge, Etc.
The Company may not, in a single transaction or series of related
transactions, consolidate or merge with or into, or effect a share exchange with
(whether or not the Company is the surviving corporation), or sell, assign,
transfer, lease, convey or otherwise dispose of all or substantially all of its
properties or assets as an entirety or substantially as an entirety to, any
person or entity unless:
(a) either
(i) the Company shall be the surviving or continuing corporation or
(ii) the entity or person formed by or surviving any such
consolidation or share exchange or into which the Company is merged (if other
than the Company) or the entity or person which acquires by sale, assignment,
transfer, lease, conveyance or other disposition the properties and assets of
the Company as an entirety or substantially as an entirety
(1) shall be a corporation organized and validly existing under the
laws of the United States or any State thereof or the District of Columbia and
(2) shall expressly assume, by supplemental indenture in form
reasonably satisfactory to the Trustee, executed and delivered to the Trustee,
the due and punctual payment of the principal of, and interest and Liquidated
Damages, if any, on, all of the Convertible Notes and the performance of every
covenant of the Convertible Notes and this Indenture and the Registration
Agreement on the part of the Company to be performed or observed, including,
without limitation, modifications to rights of holders to cause the repurchase
of Convertible
20
Notes upon a Fundamental Change in accordance with the penultimate
paragraph of Section 4.6 and conversion rights in accordance with
Section 11.6 to the extent required by such Sections;
(b) immediately after giving effect to such transaction no Default and no
Event of Default shall have occurred and be continuing; and
(c) the Company or such person shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel each stating that such
consolidation, merger, share exchange, conveyance, transfer or lease
and, if a supplemental indenture is required in connection with such
transaction, such supplemental indenture, comply with this provision
of this Indenture and that all conditions precedent in this Indenture
relating to such transaction have been satisfied.
For purposes of this Section 5.1, the transfer (by lease, assignment, sale
or otherwise, in a single transaction or series of transactions) of all or
substantially all of the properties or assets of one or more subsidiaries of the
Company, the capital stock of which constitutes all or substantially all of the
properties and assets of the Company, shall be deemed to be the transfer of all
or substantially all of the properties and assets of the Company.
SECTION 5.2 Successor Corporation Substituted.
Upon any such consolidation, merger, share exchange, sale, assignment,
conveyance, lease, transfer or other disposition in accordance with Section 5.1,
the successor person formed by such consolidation, or share exchange or into
which the Company is merged or to which such assignment, conveyance, lease,
transfer or other disposition is made will succeed to, and be substituted for,
and may exercise every right and power of, the Company under this Indenture with
the same effect as if such successor had been named as the Company therein, and
thereafter (except in the case of a sale, assignment, transfer, lease,
conveyance or other disposition) the predecessor corporation will be relieved of
all further obligations and covenants under this Indenture and the Convertible
Notes.
SECTION 5.3 Purchase Option on Fundamental Change.
This Article 5 does not affect the obligations of the Company (including
without limitation any successor to the Company) under Section 4.6.
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.1 Events of Default.
An "Event of Default" with respect to any Convertible Notes occurs if:
(a) the Company defaults in the payment of principal of the Convertible
Notes when due at maturity, upon repurchase, upon acceleration or
otherwise;
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(b) the Company defaults in the payment of any installment of interest or
Liquidated Damages on the Convertible Notes when due (including any
interest or Liquidated Damages payable in connection with a repurchase
pursuant to Section 4.6) and continuance of such default for 30 days
or more; or
(c) the Company defaults (other than a default set forth in clauses (a)
and (b) above and clauses (d) and (e) below) in the performance of, or
breaches, any other covenant or warranty of the Company set forth in
this Indenture or the Convertible Notes and fails to remedy such
default or breach within a period of 60 days after the receipt of
written notice from the Trustee or the holders of at least 25% in
aggregate principal amount of the then outstanding Convertible Notes;
or
(d) the Company defaults in the payment of the Fundamental Change Payment
in respect of the Convertible Notes on the date therefor; or
(e) the Company fails to provide timely notice of any Fundamental Change
in accordance with Section 4.6; or
(f) the Company, pursuant to or within the meaning of any Bankruptcy Law:
(i) commences a voluntary case;
(ii) consents to the entry of an order for relief against it in an
involuntary case;
(iii) consents to the appointment of a Custodian of it or for all or
substantially all of its property;
(iv) makes a general assignment for the benefit of its creditors;
(v) makes the admission in writing that it generally is unable to
pay its debts as the same become due; or
(g) a court of competent jurisdiction enters a judgment, order or decree
under any Bankruptcy Law that:
(i) is for relief against the Company in an involuntary case;
(ii) appoints a Custodian of the Company; or
(iii) orders the liquidation of the Company;
and in any case, the order or decree remains unstayed and in effect for 90 days.
The term "Bankruptcy Law" means Title 11, U.S. Code or any similar Federal
or state law for the relief of debtors. The term "Custodian" means any receiver,
trustee, assignee, liquidator or similar official under any Bankruptcy Law.
22
SECTION 6.2 Acceleration.
If an Event of Default (other than an Event of Default with respect to the
Company specified in clauses (f) and (g) of Section 6.1) occurs and is
continuing, then and in every such case the Trustee, by written notice to the
Company and the Guarantor, or the holders of at least 25% in aggregate principal
amount of the then outstanding Convertible Notes, by written notice to the
Company, the Guarantor and the Trustee, may declare the unpaid principal of, and
accrued and unpaid interest and Liquidated Damages, if any, on, all the
Convertible Notes to be due and payable. Upon such declaration such principal
amount, and accrued and unpaid interest and Liquidated Damages, if any, shall
become immediately due and payable, notwithstanding anything contained in this
Indenture or the Convertible Notes to the contrary. If any Event of Default with
respect to the Company specified in clauses (f) or (g) of Section 6.1 occurs,
all unpaid principal of and accrued and unpaid interest and Liquidated Damages,
if any, on the Convertible Notes then outstanding shall become automatically due
and payable without any declaration or other act on the part of the Trustee or
any holder of Convertible Notes.
The holders of a majority in aggregate principal amount of the then
outstanding Convertible Notes by notice to the Trustee may rescind an
acceleration of the Convertible Notes and its consequences if all existing
Events of Default (other than nonpayment of principal of or interest and
Liquidated Damages, if any, on the Convertible Notes which has become due solely
by virtue of such acceleration) have been cured or waived, the amounts payable
to the Trustee under Section 7.7 shall have been paid and if the rescission
would not conflict with any judgment or decree of any court of competent
jurisdiction. No such rescission shall affect any subsequent Default or Event of
Default or impair any right consequent thereto.
SECTION 6.3 Other Remedies.
If an Event of Default occurs and is continuing, the Trustee may pursue any
available remedy by proceeding at law or in equity to collect the payment of
principal of or interest or Liquidated Damages, if applicable, on the
Convertible Notes or to enforce the performance of any provision of the
Convertible Notes or this Indenture. The Trustee may maintain a proceeding even
if it does not possess any of the Convertible Notes or does not produce any of
them in the proceeding. A delay or omission by the Trustee or any holder of a
Convertible Note in exercising any right or remedy occurring upon an Event of
Default shall not impair the right or remedy or constitute a waiver of or
acquiescence in the Event of Default. All remedies are cumulative to the extent
permitted by law.
SECTION 6.4 Waiver of Past Defaults.
The holders of a majority in aggregate principal amount of the Convertible
Notes then outstanding may, on behalf of the holders of all the Convertible
Notes, waive an existing Default or Event of Default and its consequences,
except a Default or Event of Default in the payment of the principal of or
interest or Liquidated Damages, if any, on the Convertible Notes (other than the
non-payment of principal of and interest and Liquidated Damages, if any, on the
Convertible Notes which has become due solely by virtue of an acceleration which
has been duly rescinded as provided above), or in respect of a covenant or
provision of this Indenture which cannot be modified or amended without the
consent of all holders of Convertible Notes. When a Default or
23
Event of Default is waived, it is cured and stops continuing. No waiver shall
extend to any subsequent or other Default or Event of Default or impair any
right consequent thereon.
SECTION 6.5 Control by Majority.
The holders of a majority in aggregate principal amount of the then
outstanding Convertible Notes may direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or exercising
any trust or power conferred on it. However, the Trustee may refuse to follow
any direction that conflicts with law or this Indenture that the Trustee
determines may be unduly prejudicial to the rights of other holders of
Convertible Notes or that may involve the Trustee in personal liability;
provided that the Trustee shall have no duty or obligation (subject to Section
7.1) to ascertain whether or not such actions of forbearances are unduly
prejudicial to such holders; provided, further, that the Trustee may take any
other action the Trustee deems proper that is not inconsistent with such
directions.
SECTION 6.6 Limitation on Suits.
A holder of a Convertible Note may not pursue any remedy with respect to
this Indenture or the Convertible Notes unless:
(1) the holder gives to the Trustee notice of a continuing Event of
Default;
(2) the holders of at least 25% in principal amount of the then
outstanding Convertible Notes make a request to the Trustee to
pursue the remedy;
(3) such holder or holders offer and, if requested, provide to the
Trustee indemnity satisfactory to the Trustee against any loss,
liability or expense;
(4) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer and, if requested, the
provision of indemnity; and
(5) during such 60-day period the holders of a majority in principal
amount of the then outstanding Convertible Notes do not give the
Trustee a direction inconsistent with the request.
A holder of a Convertible Note may not use this Indenture to prejudice the
rights of another holder or to obtain a preference or priority over another
holder.
SECTION 6.7 Rights of Holders To Receive Payment.
Notwithstanding any other provision of this Indenture, the right of any
holder of a Convertible Note to receive payment of principal, interest and
Liquidated Damages, if any, on the Convertible Note, on or after the respective
due dates expressed in the Convertible Note, or to bring suit for the
enforcement of any such payment on or after such respective dates, or to bring
suit for the enforcement of the right to convert the Convertible Note shall not
be impaired or affected without the consent of the holder of a Convertible Note.
24
SECTION 6.8 Collection Suit by Trustee.
If an Event of Default specified in Section 6.1(a), (b) or (d) occurs and
is continuing, the Trustee may recover judgment in its own name and as trustee
of an express trust against the Company for the whole amount of principal and
interest and Liquidated Damages, if any, remaining unpaid on the Convertible
Notes and interest on overdue principal and interest and Liquidated Damages, if
any, and such further amount as shall be sufficient to cover the costs and, to
the extent lawful, expenses of collection, including the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and all other amounts due the Trustee under Section 7.7.
SECTION 6.9 Trustee May File Proofs of Claim.
The Trustee may file such proofs of claim and other papers or documents as
may be necessary or advisable in order to have the claims of the Trustee and the
holders of Convertible Notes allowed in any judicial proceedings relative to the
Company, its creditors or its property. The Trustee shall be entitled and
empowered, by intervention in such proceeding or otherwise:
(a) to file and prove a claim for the whole amount of the principal of, and
interest and Liquidated Damages, if any, on, the Convertible Notes and to file
such other papers or documents as may be necessary or advisable in order to have
the claims of the Trustee (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel and
all other amounts due the Trustee under Section 7.7.) and of the holders of the
Convertible Notes allowed in such judicial proceedings; and
(b) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same; and any Custodian in
any such judicial proceeding is hereby authorized by each holder of Convertible
Notes 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 holder of
Convertible Notes, to pay the Trustee any amount due it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under Section 7.7.
Nothing contained herein shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any holder of a
Convertible Note any plan of reorganization, arrangement, adjustment or
composition affecting the Convertible Notes or the rights of any holder thereof,
or to authorize the Trustee to vote in respect of the claim of any holder in any
such proceeding.
SECTION 6.10 Priorities.
If the Trustee collects any money pursuant to this Article 6, it shall pay
out the money in the following order:
First: to the Trustee for amounts due under Section 7.7, including
payment of all compensation, expenses and liabilities incurred, and
all advances made, by the Trustee, and the costs and expenses of
collection;
25
Second: to holders of Convertible Notes for amounts due and unpaid on
the Convertible Notes for principal, interest and Liquidated Damages,
if any, ratably, without preference or priority of any kind, according
to the amounts due and payable on the Convertible Notes for principal,
interest and Liquidated Damages, if any, respectively; and
Third: to the Company.
Except as otherwise provided in Section 2.12, the Trustee may fix a record
date and payment date for any payment to holders of Convertible Notes.
SECTION 6.11 Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this Indenture
or in any suit against the Trustee for any action taken or omitted by it as a
Trustee, a court in its discretion may require the filing by any party litigant
in the suit, other than the Trustee, of an undertaking to pay the costs of the
suit, and the court in its discretion may assess reasonable costs, including
reasonable attorneys fees, against any party litigant in the suit, having due
regard to the merits and good faith of the claims or defenses made by the party
litigant. This Section does not apply to a suit by the Trustee, a suit by a
holder pursuant to Section 6.7 or a suit by holders of more than 10% in
principal amount of the then outstanding Convertible Notes.
ARTICLE 7
THE TRUSTEE
The Trustee hereby accepts the trust imposed upon it by this Indenture and
covenants and agrees to perform the same, as herein expressed. Whether or not
herein expressly so provided, every provision of this Indenture relating to the
conduct or affecting the liability of or affording protection to the Trustee
shall be subject to the provisions of this Article 7.
SECTION 7.1 Duties of the Trustee.
(a) If an Event of Default known to a Trust Officer of the Trustee has
occurred and is continuing, the Trustee shall exercise such of the rights and
powers vested in it by this Indenture and use the same degree of care and skill
in their exercise as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.
(b) Except during the continuance of an Event of Default known to the
Trustee:
(1) The duties of the Trustee shall be determined solely by the
express provisions of this Indenture, and the Trustee need perform only those
duties that are specifically set forth in this Indenture and no others, and no
implied covenants or obligations shall be read into this Indenture against the
Trustee; and
(2) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon any
26
statements, certificates or opinions furnished to the Trustee and conforming to
the requirements of this Indenture. However, in the case of any certificates or
opinions which by any provision hereof are specifically required to be furnished
to the Trustee, the Trustee shall examine the certificates and opinions to
determine whether or not they conform to the requirements of this Indenture (but
shall not be required to confirm or investigate the accuracy of mathematical
calculations or other facts stated therein).
(c) The Trustee may not be relieved from liability for its own negligent
action, its own negligent failure to act or its own willful misconduct, except
that:
(1) This paragraph does not limit the effect of paragraph (b) or
paragraph (e) of this Section;
(2) The Trustee shall not be liable for any error of judgment made in
good faith by a Trust Officer or any other officer of the Trustee to whom such
matter is referred, because of such person's knowledge of and familiarity with
the particular subject, unless it is proved that the Trustee was negligent in
ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction received by
it pursuant to Section 6.5.
(d) Whether or not therein expressly so provided, every provision of this
Indenture that is in any way related to the Trustee is subject to paragraphs
(a), (b), (c) and (e) of this Section 7.1.
(e) No provision of this Indenture shall require the Trustee to expend or
risk its own funds or otherwise incur any financial liability in the performance
of any of its duties or the exercise of any of its rights and powers hereunder,
if it shall have reasonable grounds for believing that repayment of such funds
or adequate indemnity against such risk of liability is not reasonably assured
to it.
(f) The Trustee shall not be liable for interest on or the investment of
any money received by it except as the Trustee may agree with the Company. Money
held in trust by the Trustee need not be segregated from other funds except to
the extent required by law.
SECTION 7.2 Rights of the Trustee.
(a) The Trustee may rely on and shall be protected in acting or refraining
from acting upon any resolution, Officers' Certificate, or any other
certificate, statement, instrument, opinion, report, notice, request, consent,
order, security or other document believed by it to be genuine and to have been
signed or presented by the proper person. The Trustee need not investigate any
fact or matter contained therein.
(b) Any request, direction, order or demand of the Company or the Guarantor
mentioned herein shall be sufficiently evidenced by an Officers' Certificate
(unless other evidence in respect thereof is herein specifically prescribed). In
addition, before the Trustee acts or refrains from acting, it may require an
Officers' Certificate, an Opinion of Counsel or both. The Trustee shall not be
liable for any action it takes or omits to take in good faith in reliance on
27
such Officers' Certificate or Opinion of Counsel. The Trustee may consult with
counsel and the advice of such counsel or any Opinion of Counsel shall be full
and complete authorization and protection from liability in respect of any
action taken, suffered or omitted by it hereunder in good faith and in reliance
thereon.
(c) The Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through attorneys and
agents and other persons not regularly in its employ and shall not be
responsible for the misconduct or negligence of any attorney or agent appointed
with due care.
(d) The Trustee shall not be liable for any action it takes or omits to
take in good faith without negligence or willful misconduct which it believes to
be authorized or within its discretion, rights or powers.
(e) Unless otherwise specifically provided in this Indenture, any demand,
request, direction or notice from the Company shall be sufficient if signed by
Officers of the Company.
(f) The Trustee shall not be required to give any bond or surety in respect
of the performance of its powers and duties hereunder.
(g) The Trustee shall be under no obligation to exercise any of the rights
or powers vested in it by this Indenture at the request, order or direction of
any of the holders of Convertible Notes pursuant to the provisions of this
Indenture, unless such holders have offered to the Trustee security or indemnity
satisfactory to it against the costs, expenses and liabilities which might be
incurred therein or thereby.
(h) The Trustee shall not be bound to make any investigation into the facts
or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, security or other document
unless requested in writing to do so by the holders of not less than a majority
in aggregate principal amount of the Convertible Notes then outstanding,
provided that if the Trustee determines in its discretion to make any such
investigation, then it shall be entitled, upon reasonable prior notice and
during normal business hours, to examine the books and records and the premises
of the Company, personally or by agent or attorney, and the reasonable expenses
of every such examination shall be paid by the Company or, if paid by the
Trustee or any predecessor Trustee, shall be reimbursed by the Company upon
demand.
(i) The permissive rights of the Trustee to do things enumerated in this
Indenture shall not be construed as a duty, and the Trustee shall not be
answerable for other than its negligence or willful misconduct.
(j) The Trustee shall not be responsible for the computation of any
adjustment to the Conversion Price or for any determination as to whether an
adjustment is required and shall not be deemed to have knowledge of any
adjustment unless and until it shall have received the notice from the Company
contemplated by Section 11.5(j).
(k) The rights, privileges, protections, immunities and benefits given to
the Trustee, including, but not limited to, its right to be indemnified, are
extended to, and shall be enforceable
28
by, the Trustee in each of its capacities hereunder, whether as Agent or
otherwise, and to each Agent, custodian and other person employed to act
hereunder.
SECTION 7.3 Individual Rights of the Trustee.
Subject to Sections 7.10 and 7.11, the Trustee in its individual or any
other capacity may become the owner or pledgee of Convertible Notes with the
same rights it would have if it were not the Trustee and may otherwise deal with
the Company or an Affiliate of the Company and receive, collect, hold and retain
collections from the Company with the same rights it would have if it were not
Trustee. Any Agent may do the same with like rights.
SECTION 7.4 Trustee's Disclaimer.
The Trustee shall not be responsible for and makes no representation as to
the validity or adequacy of this Indenture or the Convertible Notes. It shall
not be accountable for the Company's use of the proceeds from the Convertible
Notes or any money paid to the Company or upon the Company's direction under any
provision of this Indenture. It shall not be responsible for the use or
application of any money received by any Paying Agent other than the Trustee,
and it shall not be responsible for any statement or recital herein or any
statement in the Convertible Notes or any other document in connection with the
sale of the Convertible Notes or pursuant to this Indenture other than its
certificate of authentication.
SECTION 7.5 Notice of Defaults.
If a Default or Event of Default occurs and is continuing and if it is
known to a Trust Officer of the Trustee, the Trustee shall mail to each holder
of a Convertible Note a notice of the Default or Event of Default within 60 days
after such Default or Event of Default occurs. A Default or an Event of Default
shall not be considered known to a Trust Officer of the Trustee unless it is a
Default or Event of Default in the payment of principal or interest when due
under Section 6.1(a), (b) or (d) or a Trust Officer of the Trustee shall have
received written notice thereof, in accordance with this Indenture, from the
Company or from the holders of a majority in principal amount of the outstanding
Convertible Notes. Except in the case of a Default or Event of Default in
payment of principal or interest or Liquidated Damages, if any, on any
Convertible Note, the Trustee may withhold the notice if and so long as a trust
committee of its officers in good faith determines that withholding the notice
is in the interest of the holders of the Convertible Notes.
SECTION 7.6 Reports by the Trustee to Holders.
Within 60 days after the reporting date stated in Section 10.10, the
Trustee shall mail to holders of Convertible Notes a brief report dated as of
such reporting date that complies with TIA (S)313(a) (but if no event described
in TIA (S)313(a) has occurred within twelve months preceding the reporting date,
no report need be transmitted). The Trustee also shall comply with TIA
(S)313(b)(2). The Trustee shall also transmit by mail all reports as required by
TIA (S)313(c).
A copy of each report at the time of its mailing to holders of Convertible
Notes shall be filed, at the expense of the Company, by the Trustee with the
Commission and each stock exchange or securities market, if any, on which the
Convertible Notes are listed. The Company
29
shall timely notify the Trustee when the Convertible Notes are listed or quoted
on any stock exchange or securities market.
SECTION 7.7 Compensation and Indemnity.
The Company and the Guarantor shall pay to the Trustee from time to time,
and the Trustee shall be entitled to, reasonable compensation for its acceptance
of this Indenture and its services hereunder. The Trustee's compensation shall
not be limited by any law on compensation of a trustee of an express trust. The
Company and the Guarantor shall reimburse the Trustee promptly upon request for
all reasonable disbursements, advances and expenses incurred or made by or on
behalf of it in addition to the compensation for its services. Such expenses may
include the reasonable compensation, disbursements and expenses of the Trustee's
agents, counsel and other persons not regularly in its employ.
The Company and the Guarantor shall indemnify, defend and hold the Trustee
and its directors, officers, employees and agents (collectively with the Trustee
the "Indemnitees") harmless from and against every loss, liability or expense,
including without limitation damages, fines, suits, actions, demands, penalties,
costs, out-of-pocket or incidental expenses, legal fees and expenses, and the
costs and expenses of defending any claim (collectively, "Losses"), that may be
imposed on, incurred by, or asserted against, any Indemnitee for or in respect
of the Trustee's (i) execution and delivery of this Indenture, (ii) compliance
or attempted compliance with or reliance upon any instruction or other direction
upon which the Trustee is authorized to rely pursuant to the terms of this
Indenture and (iii) performance under this Indenture except as set forth in the
next paragraph. Any Indemnitee shall notify the Company and the Guarantor
promptly of any claim for which it may seek indemnity under this Section.
Neither the Company nor the Guarantor need reimburse any expense or
indemnify against any Loss incurred by the Trustee or any Indemnitee through its
own negligence or willful misconduct.
The Trustee shall have a lien prior to the Convertible Notes on all money
or property held or collected by the Trustee to secure the Company's and the
Guarantor's payment obligations in this Section 7.7, except that held in trust
to pay principal and interest and Liquidated Damages, if any, on Convertible
Notes. Such liens and the Company's and the Guarantor's obligations under this
Section 7.7 shall survive the termination, satisfaction and discharge of this
Indenture and the resignation or removal of the Trustee for any reason.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.1(f) or (g) occurs, the expenses and the
compensation for the services (including the fees and expenses of its agents and
counsel) are intended to constitute expenses of administration under any
Bankruptcy Law.
SECTION 7.8 Replacement of the Trustee.
A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section 7.8.
30
The Trustee may resign at any time and be discharged from the trust hereby
created by so notifying the Company. The holders of a majority in principal
amount of the then outstanding Convertible Notes may remove the Trustee by so
notifying the Trustee and the Company in writing and may appoint a successor
Trustee. The Company may remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged a bankrupt or an insolvent or an order for
relief is entered with respect to the Trustee under any Bankruptcy Law;
(3) a Custodian or public officer takes charge of the Trustee or its
property; or
(4) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the office
of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the holders
of a majority in principal amount of the then outstanding Convertible Notes may
appoint a successor Trustee to replace the successor Trustee appointed by the
Company.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company, the
Guarantor or the holders of at least 10% in principal amount of the then
outstanding Convertible Notes may petition any court of competent jurisdiction
for the appointment of a successor Trustee.
If the Trustee after written request by any holder of a Convertible Note
who has been a holder for at least six months fails to comply with Section 7.10,
such holder may petition any court of competent jurisdiction for the removal of
the Trustee and the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the Company. Thereupon the resignation or removal
of the retiring Trustee shall become effective, and the successor Trustee shall
have all the rights, powers and duties of the Trustee under this Indenture. The
successor Trustee shall mail a notice of its succession to holders of
Convertible Notes. The retiring Trustee shall promptly transfer all property
held by it as Trustee to the successor Trustee, provided that all sums owing to
the retiring Trustee hereunder have been paid and subject to the lien provided
for in Section 7.7. Notwithstanding the replacement of the Trustee pursuant to
this Section 7.8, the Company's and the Guarantor's obligations under Section
7.7 shall continue for the benefit of the retiring Trustee with respect to
expenses and liabilities incurred by it prior to such replacement.
Upon request of any such successor Trustee, the Company shall execute any
and all instruments for more fully and certainly vesting in and confirming to
such successor Trustee all such rights, powers and trusts referred to in the
preceding paragraph.
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SECTION 7.9 Successor Trustee by Merger, etc.
If the Trustee consolidates with, merges or converts into, or transfers all
or substantially all of its corporate trust business (including the trust
created by this Indenture) to, another person, the resulting, surviving or
transferee person without any further act shall be the successor Trustee with
the same effect as if the successor Trustee had been named as the Trustee
herein.
SECTION 7.10 Eligibility, Disqualification.
This Indenture shall always have a Trustee who satisfies the requirements
of TIA (S)310(a)(1). The Trustee shall always have a combined capital and
surplus as stated in Section 10.10. The Trustee is subject to TIA (S)310(b)
regarding the disqualification of a trustee upon acquiring a conflicting
interest; provided that the Indentures, dated as of October 1, 1987 and July 31,
1989, between the Trustee and the Guarantor, and the securities issued and to be
issued thereunder shall be deemed to be specifically described in this Indenture
for the purpose of clause (i) of the first proviso contained in TIA (S)310(b).
SECTION 7.11 Preferential Collection of Claims Against Company.
The Trustee shall comply with TIA (S)311(a), excluding any creditor
relationship set forth in TIA (S)311(b). A Trustee who has resigned or been
removed shall be subject to TIA (S)311(a) to the extent indicated therein.
ARTICLE 8
SATISFACTION AND DISCHARGE OF INDENTURE
SECTION 8.1 Discharge of Indenture.
When (a) the Company delivers to the Trustee for cancellation all
Convertible Notes theretofore authenticated (other than any other Convertible
Notes which have been destroyed, lost or stolen and in lieu of or in
substitution for which other Convertible Notes have been authenticated and
delivered) and not theretofore canceled, or (b) all the Convertible Notes not
theretofore canceled or delivered to the Trustee for cancellation have become
due and payable, or by their terms will become due and payable within one year
and the Company or the Guarantor deposits with the Trustee, in trust, amounts
sufficient to pay at maturity all of the Convertible Notes (other than any
Convertible Notes which have been mutilated, destroyed, lost or stolen and in
lieu of or in substitution for which other Convertible Notes have been
authenticated and delivered) not theretofore canceled or delivered to the
Trustee for cancellation, including principal and interest and Liquidated
Damages, if any, due or to become due to such date of maturity, and if in either
case the Company or the Guarantor also pays, or causes to be paid, all other
sums payable hereunder by the Company, then this Indenture shall cease to be of
further effect (except as to (i) rights of registration of transfer,
substitution, replacement and exchange and conversion of Convertible Notes, (ii)
rights hereunder of holders of Convertible Notes to receive payments of
principal of and interest, and Liquidated Damages, if any, on, the Convertible
Notes, (iii) the obligations under Sections 2.3 and 8.5 hereof and (iv) the
rights, obligations and immunities of the Trustee hereunder), and the Trustee,
on demand of the Company accompanied by an Officers' Certificate and an Opinion
of Counsel as required by
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Section 10.4, and at the Company's cost and expense, shall execute proper
instruments acknowledging satisfaction and discharge of 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 Convertible
Notes.
SECTION 8.2 Deposited Monies to be Held in Trust by Trustee.
Subject to Section 8.4, all monies deposited with the Trustee pursuant to
Section 8.1 shall be held in trust and applied by it to the payment, either
directly or through the Paying Agent, to the holders of the particular
Convertible Notes for the payment of which such monies have been deposited with
the Trustee, of all sums due and to become due thereon for principal and
interest, and Liquidated Damages, if any.
SECTION 8.3 Paying Agent to Repay Monies Held.
Upon the satisfaction and discharge of this Indenture, all monies then held
by any Paying Agent (other than the Trustee) shall, upon the Company's demand,
be repaid to it or paid to the Trustee, and thereupon such Paying Agent shall be
released from all further liability with respect to such monies.
SECTION 8.4 Return of Unclaimed Monies.
Subject to the requirements of applicable law, any monies deposited with or
paid to the Trustee for payment of the principal of or interest (including
Liquidated Damages) on Convertible Notes and not applied but remaining unclaimed
by the holders thereof for two years after the date upon which the principal of
or interest (including Liquidated Damages) on such Convertible Notes, as the
case may be, have become due and payable, shall be repaid to the Company by the
Trustee on demand; provided, however, that the Company, or the Trustee at the
request and expense of the Company, shall have first caused notice of such
payment to the Company to be mailed to each holder of a Convertible Note
entitled thereto no less than 30 days prior to such payment and all liability of
the Trustee shall thereupon cease with respect to such monies; and the holder of
any of the Convertible Notes shall thereafter look only to the Company for any
payment which such holder may be entitled to collect unless an applicable
abandoned property law designates another person. In the absence of a written
request from the Company or the Guarantor to return unclaimed funds to the
Company or the Guarantor, as the case may be, the Trustee shall from time to
time deliver all unclaimed funds held by it in any capacity hereunder to or as
directed by applicable escheat authorities, as determined by the Trustee in its
sole discretion, in accordance with the customary practices and procedures of
the Trustee. Any unclaimed funds held by the Trustee in any capacity hereunder
pursuant to this Section 8.4 shall be held uninvested and without any liability
for interest.
SECTION 8.5 Reinstatement.
If the Trustee or the Paying Agent is unable to apply any money in
accordance with Section 8.2 by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, the Company's and the Guarantor's obligations under this Indenture
and the Convertible Notes shall be revived and reinstated as
33
though no deposit had occurred pursuant to Section 8.1 until such time as the
Trustee or the Paying Agent is permitted to apply all such money in accordance
with Section 8.2; provided, however, that if the Company or the Guarantor makes
any payment of interest (including Liquidated Damages) on or principal of any
Convertible Note following the reinstatement of its obligations, the Company or
the Guarantor, as the case may be, shall be subrogated to the rights of the
holders thereof to receive such payment from the money held by the Trustee or
Paying Agent.
ARTICLE 9
AMENDMENTS
SECTION 9.1 Without the Consent of Holders.
The Company, the Guarantor and the Trustee may amend this Indenture or the
Convertible Notes without notice to or the consent of any holder of a
Convertible Note for the purposes of:
(a) curing any ambiguity or correcting or supplementing any defective or
inconsistent provision contained in this Indenture or making any other changes
in the provisions of this Indenture which the Company, the Guarantor and the
Trustee may deem necessary or desirable provided such amendment does not
materially and adversely affect the legal rights under the Indenture of the
holders of Convertible Notes.
(b) providing for uncertificated Convertible Notes in addition to or in
place of certificated Convertible Notes;
(c) evidencing the succession of another person to the Company and
providing for the assumption by such successor of the covenants and obligations
of the Company hereunder and in the Convertible Notes as permitted by Section
5.1;
(d) providing for conversion rights and/or repurchase rights of holders of
Convertible Notes in the event of consolidation, merger, share exchange or sale
of all or substantially all of the assets of the Company as required to comply
with Sections 5.1 and/or 11.6;
(e) reducing the Conversion Price;
(f) evidencing and providing for the acceptance of appointment under this
Indenture of a successor Trustee;
(g) making any changes that would provide the holders of the Convertible
Notes with any additional rights or benefits or that does not adversely affect
the legal rights under this Indenture of any such holder; or
(h) complying with the requirements of the Commission in order to effect or
maintain the qualification of the Indenture under the TIA.
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SECTION 9.2 With the Consent of Holders.
Subject to Section 6.7, the Company, the Guarantor and the Trustee may
amend this Indenture or the Convertible Notes with the written consent of the
holders of at least a majority in principal amount of the then outstanding
Convertible Notes (including consents obtained in connection with a tender offer
or exchange offer for Convertible Notes).
Subject to Sections 6.4 and 6.7, the holders of a majority in principal
amount of the Convertible Notes then outstanding may also waive compliance in a
particular instance by the Company with any provision of this Indenture or the
Convertible Notes.
However, without the consent of each holder of a Convertible Note affected,
an amendment or waiver under this Section 9.2 may not (with respect to any
Convertible Notes held by a non-consenting holder):
(a) reduce the principal amount of Convertible Notes whose holders must
consent to an amendment, supplement or waiver;
(b) reduce the principal of or change the fixed maturity of any Convertible
Note;
(c) reduce the rate of, or change the time for payment of, interest,
including defaulted interest, or Liquidated Damages on any Convertible Note;
(d) waive a Default or Event of Default in the payment of principal of or
interest or Liquidated Damages, if any, on the Convertible Notes (except a
rescission of acceleration of the Convertible Notes by the holders of at least a
majority in aggregate principal amount of the Convertible Notes then outstanding
and a waiver of the payment default that resulted from such acceleration);
(e) make the principal of, or interest or Liquidated Damages on, any
Convertible Note payable in money other than as provided for herein and in the
Convertible Notes;
(f) make any change in the provisions of this Indenture relating to waivers
of past Defaults or Events of Default or the rights of holders of Convertible
Notes to receive payments of principal of, or interest or Liquidated Damages on,
the Convertible Notes;
(g) except as permitted herein (including Section 9.1(a)), increase the
Conversion Price or modify the provisions contained herein relating to
conversion of the Convertible Notes in a manner adverse to the holders thereof;
or
(h) make any change to the abilities of holders of Convertible Notes to
enforce their rights hereunder or the provisions of clauses (a) through (g) of
this Section 9.2.
To secure a consent of the holders of Convertible Notes under this Section
9.2, it shall not be necessary for such holders to approve the particular form
of any proposed amendment or waiver, but it shall be sufficient if such consent
approves the substance thereof.
35
After an amendment or waiver under this Section 9.2 becomes effective, the
Company shall mail to holders of Convertible Notes a notice briefly describing
the amendment or waiver.
SECTION 9.3 Compliance with the Trust Indenture Act.
Every amendment to this Indenture or the Convertible Notes shall be set
forth in a supplemental indenture that complies with the TIA as then in effect.
SECTION 9.4 Revocation and Effect of Consents.
Until an amendment or waiver becomes effective, a consent to it by a holder
of a Convertible Note is a continuing consent by the holder and every subsequent
holder of a Convertible Note or portion of a Convertible Note that evidences the
same debt as the consenting holder's Convertible Note, even if notation of the
consent is not made on any Convertible Note. However, any such holder or
subsequent holder may revoke the consent as to his or her Convertible Note or
portion of a Convertible Note if the Trustee receives the notice of revocation
before the date on which the Trustee receives an Officers' Certificate
certifying that the holders of the requisite principal amount of Convertible
Notes have consented to the amendment or waiver.
The Company may, but shall not be obligated to, fix a record date for the
purpose of determining the holders of Convertible Notes entitled to consent to
any amendment or waiver. If a record date is fixed, then notwithstanding the
provisions of the immediately preceding paragraph, those persons who were
holders of Convertible Notes at such record date (or their duly designated
proxies), and only those persons, shall be entitled to consent to such amendment
or waiver or to revoke any consent previously given, whether or not such persons
continue to be holders after such record date. No consent shall be valid or
effective for more than 90 days after such record date unless consents from
holders of the principal amount of Convertible Notes required hereunder for such
amendment or waiver to be effective shall have also been given and not revoked
within such 90-day period.
After an amendment or waiver becomes effective it shall bind every holder
of a Convertible Note, unless it is of the type described in clauses (a) - (h)
of Section 9.2. In such case, the amendment or waiver shall bind each holder of
a Convertible Note who has consented to it and every subsequent holder of a
Convertible Note or portion of a Convertible Note that evidences the same debt
as the consenting holder's Convertible Note.
SECTION 9.5 Notation on or Exchange of Convertible Notes.
Convertible Notes authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article 9 may, and shall if required by
the Trustee, bear a notation in the form approved by the Trustee as to any
matter provided for in such supplemental indenture. If the Company shall so
determine, new Convertible Notes so modified as to conform, in the opinion of
the Company and the Trustee, to any such supplemental indenture may be prepared
and executed by the Company and authenticated and delivered by the Trustee in
exchange for outstanding Convertible Notes without charge to the holders of the
Convertible Notes, except as specified in Section 2.6.
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SECTION 9.6 Trustee Protected.
The Trustee shall sign any amendment or supplemental indenture authorized
pursuant to this Article 9 if such amendment or supplemental indenture does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
If such amendment or supplemental indenture does adversely affect the rights,
duties, liabilities or immunities of the Trustee, the Trustee may, but need not,
sign it. In signing such amendment or supplemental indenture, the Trustee shall
be entitled to receive, and shall be fully protected in relying upon, an
Officers' Certificate and an Opinion of Counsel as conclusive evidence that such
amendment or supplemental indenture is authorized or permitted by this
Indenture, that it is not inconsistent herewith, and that it will be valid and
binding upon the Company in accordance with its terms.
ARTICLE 10
GENERAL PROVISIONS
SECTION 10.1 Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies or conflicts with the
duties imposed by TIA (S)318(c), such duties imposed by such section of the TIA
shall control. If any provision of this Indenture expressly modifies or excludes
any provision of the TIA that may be so modified or excluded, the Indenture
provision so modifying or excluding such provision of the TIA shall be deemed to
apply.
SECTION 10.2 Notices.
Any notice or communication by the Company, the Guarantor or the Trustee to
the other parties is duly given if in writing and delivered in person or mailed
by first-class mail, with postage prepaid (registered or certified, return
receipt requested), or sent by facsimile or overnight air couriers guaranteeing
next day delivery, to the other party's address as stated in Section 10.10. The
Company, the Guarantor or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.
All notices and communications (other than those sent to holders of
Convertible Notes) shall be deemed to have been duly given at the time delivered
by hand if personally delivered; five business days after being deposited in the
mail, postage prepaid, if mailed; when transmission is confirmed, if transmitted
by facsimile; and the next business day after timely delivery to the courier, if
sent by overnight air courier guaranteeing next day delivery. Notwithstanding
the foregoing, all notices to the Trustee shall be effective only upon receipt
by a Trust Officer.
Any notice or communication to a holder of a Convertible Note shall be
mailed by first-class mail, with postage prepaid, to his or her address shown on
the Register kept by the Registrar. Failure to mail a notice or communication to
a holder or any defect in the notice or communication shall not affect its
sufficiency with respect to other holders.
37
If a notice or communication to a holder of a Convertible Note is sent in
the manner provided above within the time prescribed, it is duly given, whether
or not the addressee receives it.
If the Company sends a notice or communication to holders of Convertible
Notes, it shall send a copy to the Trustee and each Agent at the same time.
All notices or communications shall be in writing.
SECTION 10.3 Communication by Holders With Other Holders.
Holders may communicate pursuant to TIA (S)312(b) with other holders with
respect to their rights under this Indenture or the Convertible Notes. The
Company, the Trustee, the Registrar and the Paying Agent shall have the
protection of TIA (S)312(c).
SECTION 10.4 Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company or the Guarantor to the
Trustee to take any action under this Indenture, the Company or the Guarantor,
as the case may be, shall furnish to the Trustee:
(1) an Officers' Certificate in form and substance reasonably satisfactory
to the Trustee (which shall include the statements set forth in Section 10.5)
stating that, in the opinion of such person, all conditions precedent provided
for in this Indenture (including any covenants, compliance with which
constitutes a condition precedent) relating to the proposed action have been
complied with; and
(2) an Opinion of Counsel in form and substance reasonably satisfactory to
the Trustee (which shall include the statements set forth in Section 10.5)
stating that, in the opinion of such counsel, all such conditions precedent
(including any covenants, compliance with which constitutes a condition
precedent) have been complied with.
SECTION 10.5 Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture (other than a certificate provided
pursuant to TIA (S)314(a)(4)) shall include:
(1) a statement that the person making such certificate or opinion has read
such covenant or condition;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of such person, he or she has made
such examination or investigation as is necessary to enable him or her to
express an informed opinion as to whether or not such covenant or condition has
been complied with; and
38
(4) a statement as to whether or not, in the opinion of such person, such
condition or covenant has been complied with.
Any Officers' Certificate may be based, insofar as it relates to legal
matters, upon an Opinion of Counsel, unless such Officer knows that the opinion
with respect to the matters upon which his or her certificate may be based as
aforesaid is erroneous. Any Opinion of Counsel may be based, insofar as it
relates to factual matters, upon certificates, statements or opinions of, or
representations by an officer or officers of the Company, or other persons or
firms deemed appropriate by such counsel, unless such counsel knows that the
certificates, statements or opinions or representations with respect to the
matters upon which his or her opinion may be based as aforesaid are erroneous.
Any Officers' Certificate, statement or Opinion of Counsel may be based,
insofar as it relates to accounting matters, upon a certificate or opinion of or
representation by an accountant (who may be an employee of the Company), or firm
of accountants, unless such Officer or counsel, as the case may be, knows that
the certificate or opinion or representation with respect to the accounting
matters upon which his or her certificate, statement or opinion may be based as
aforesaid is erroneous.
SECTION 10.6 Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by, or a meeting of,
holders of Convertible Notes. The Registrar or Paying Agent may make reasonable
rules and set reasonable requirements for its functions.
SECTION 10.7 Legal Holidays.
A "Legal Holiday" is a Saturday, a Sunday or a day on which banking
institutions in the City of New York or the city in which the Corporate Trust
Office of the Trustee is located are not required to be open, and a "business
day" is any day that is not a Legal Holiday. If a payment date is a Legal
Holiday at a place of payment, payment may be made at that place on the next
succeeding day that is not a Legal Holiday, and no interest shall accrue for the
intervening period. If any date specified in this Indenture is a Legal Holiday,
then such date shall be the next succeeding business day.
SECTION 10.8 No Recourse Against Others.
No director, officer, employee, shareholder or Affiliate, as such, of the
Company or the Guarantor from time to time shall have any liability for any
obligations of the Company or the Guarantor under the Convertible Notes or this
Indenture or for any claim based on, in respect of, or by reason of such
obligations or their creation. Each holder by accepting a Convertible Note
waives and releases all such liability. This waiver and release are part of the
consideration for the Convertible Notes. Each of such directors, officers,
employees, shareholders and Affiliates is a third party beneficiary of this
Section 10.8.
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SECTION 10.9 Counterparts.
This Indenture may be executed in any number of counterparts and by the
parties hereto in separate counterparts, each of which when so executed shall be
deemed to be an original and all of which taken together shall constitute one
and the same agreement.
SECTION 10.10 Other Provisions.
The Company initially appoints the Trustee as Paying Agent, Registrar and
authenticating agent.
The reporting date for Section 7.6 is May 15 of each year. The first
reporting date is the May 15 following the issuance of Convertible Notes
hereunder.
The Trustee shall always have, or shall be a subsidiary of a bank or bank
holding company which has, a combined capital and surplus of at least
$50,000,000 as set forth in its most recent published annual report of
condition.
The Company's address is:
GATX Corporation.
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Treasurer
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
The Guarantor's Address is:
GATX Financial Corporation
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Treasurer
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
The Trustee's address is:
XX Xxxxxx Xxxxx Bank
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Institutional Trust Services - Conventional Debt
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
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SECTION 10.11 Governing Law.
The laws of the State of New York (including without limitation Section
5-1401 of the New York General Obligations Law or any successor to such statute)
shall govern this Indenture and the Convertible Notes.
SECTION 10.12 No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture, loan or debt
agreement of the Company, the Guarantor or any of their respective subsidiaries.
Any such other indenture, loan or debt agreement may not be used to interpret
this Indenture.
SECTION 10.13 Successors.
All agreements of the Company and the Guarantor in this Indenture and the
Convertible Notes shall bind their respective successors. All agreements of the
Trustee in this Indenture shall bind its successor.
SECTION 10.14 Severability.
In case any provision in this Indenture or in the Convertible Notes shall
be invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.
SECTION 10.15 Table of Contents, Headings, etc.
The Table of Contents, Cross-Reference Table and headings of the Articles
and Sections of this Indenture have been inserted for convenience of reference
only, are not to be considered a part hereof and shall in no way modify or
restrict any of the terms or provisions hereof.
ARTICLE 11
CONVERSION OF CONVERTIBLE NOTES
SECTION 11.1 Right to Convert.
Subject to and upon compliance with the provisions of this Indenture, each
holder of Convertible Notes shall have the right, at his or her option, at any
time on or before the close of business on the last Trading Day prior to the
Maturity Date (except that, (a) with respect to any Convertible Note or portion
thereof subject to a duly completed election for repurchase, such right shall
terminate on the close of business on the Fundamental Change Payment Date
(unless the Company defaults in the payment due upon repurchase or such holder
elects to withdraw the submission of such election to repurchase in accordance
with section 4.6) to convert the principal amount of any Convertible Note held
by such holder, or any portion of such principal amount which is $1,000 or an
integral multiple thereof, into that number of fully paid and non-assessable
shares of Common Stock (as such shares shall then be constituted) obtained by
dividing the principal amount of the Convertible Note or portion thereof to be
converted by the Conversion Price in effect at such time, by surrender of the
Convertible Note so to be converted in whole or
41
in part in the manner provided in Section 11.2; provided, however, that, so long
as no Event of Default shall have occurred and be continuing, the Company at its
option, instead of delivering shares of Common Stock, may pay the holder cash in
an amount described in Section 11.2 for all or any portion of the Convertible
Notes delivered for conversion as more fully described in Section 11.2;
provided, further, that the Company shall have the right to pay cash instead of
delivering shares of Common Stock for Convertible Notes submitted for conversion
on or after the second business day preceding the Maturity Date only if the
Company shall have delivered the notice described in Section 11.2 no later than
the fourth business day preceding the Maturity Date. Convertible Notes in
respect of which a holder has delivered a Fundamental Change repurchase notice
exercising the option of such holder to require the Company to repurchase such
Convertible Notes may be converted only if the Fundamental Change repurchase
notice is withdrawn in accordance with the terms of this Indenture. A holder of
Convertible Notes is not entitled to any rights of a holder of Common Stock
until such holder of Convertible Notes has converted his or her Convertible
Notes to Common Stock, and only to the extent such Convertible Notes are deemed
to have been converted to Common Stock under this Article 11.
SECTION 11.2 Exercise of Conversion Privilege; Issuance of Common Stock on
Conversion; No Adjustment for Interest or Dividends.
To exercise, in whole or in part, the conversion privilege with respect to
any Convertible Note, the holder of such Convertible Note shall surrender such
Convertible Note, duly endorsed, at an office or agency maintained by the
Company pursuant to Section 4.4, accompanied by the funds, if any, required by
the final paragraph of this Section 11.2 and a duly signed and completed written
notice of conversion in the form provided on the Convertible Notes (or such
other notice which is acceptable to the Company) to the office or agency that
the holder of Convertible Notes elects to convert such Convertible Note or such
portion thereof specified in said notice. Such notice shall also state the name
or names (with address or addresses) in which the certificate or certificates
for shares of Common Stock which are issuable on such conversion shall be
issued, and shall be accompanied by transfer taxes, if required pursuant to
Section 11.7. Each such Convertible Note surrendered for conversion shall,
unless the shares issuable on conversion are to be issued in the same name as
the registration of such Convertible Note, be duly endorsed by, or be
accompanied by instruments of transfer in form satisfactory to the Company duly
executed by, the holder of Convertible Notes or his or her duly authorized
attorney. The holder of such Convertible Notes will not be required to pay any
tax or duty which may be payable in respect of the issue or delivery of Common
Stock on conversion, but will be required to pay any tax or duty which may be
payable in respect of any transfer involved in the issue or delivery of Common
Stock in a name other than the same name as the registration of such Convertible
Note. The date on which the holder of Convertible Notes satisfies each of the
requirements provided in this paragraph shall be referred to as the "Conversion
Date."
No later than the second business day after the Conversion Date, the
Company shall notify each holder of Convertible Notes that has satisfied the
delivery requirements in the prior paragraph and the Trustee whether the Company
elects to pay cash instead of delivering shares of Common Stock upon the
conversion of Convertible Notes and, if so, the percentage of the aggregate
principal amount of Convertible Notes in respect of which it shall pay in cash.
If the Company elects to deliver only shares of Common Stock upon conversion
(subject to Section 11.3), the Company shall issue and shall deliver to such
holder at the office or agency maintained
42
by the Company for such purpose pursuant to Section 4.4, (1) no later than the
fifth business day after the Conversion Date, a certificate or certificates for
the number of full shares of Common Stock issuable upon the conversion of such
Convertible Note and (2) a check or cash in an amount calculated pursuant to
Section 11.3 in respect of any fractional interest in respect of a share of
Common Stock arising upon such conversion no later than the tenth business day
after the Conversion Date. If the Company elects to pay cash instead of
delivering shares of Common Stock for all or any portion of the Convertible
Notes being converted, the Company shall issue and shall deliver to such holder
at the office or agency maintained by the Company for such purpose pursuant to
Section 4.4, no later than the tenth business day after the Conversion Date, (1)
a certificate or certificates for the number, if any, of full shares of Common
Stock issuable upon the conversion of such Convertible Notes in respect of which
the Company elects to deliver shares of Common Stock and (2) a check or cash in
an amount equal to (a) the aggregate principal amount of Convertible Notes in
respect of which the Company elects to pay cash instead of delivering shares of
Common Stock divided by the Conversion Price and then multiplied by the Average
Sale Price plus (b) an amount calculated pursuant to Section 11.3 in respect of
any fractional interest in respect of a share of Common Stock arising upon such
conversion.
Unless an Event of Default has occurred, the Company may not change its
election with respect to the consideration to be delivered upon conversion of a
Convertible Note once the Company has provided the notice described in the
previous paragraph. If an Event of Default (other than a default in the payment
of cash upon conversion of the Convertible Notes) has occurred and is
continuing, the Company may not pay cash upon conversion of any Convertible
Notes (other than cash in lieu of fractional shares as described in Section
11.3).
Certificates representing shares of Common Stock will not be issued or
delivered unless all taxes and duties, if any, payable by the holder have been
paid. In case any Convertible Note of a denomination of an integral multiple
greater than $1,000 is surrendered for partial conversion, the Company shall
execute, and the Trustee shall authenticate and deliver to the holder of the
Convertible Note so surrendered, without charge to him or her, a new Convertible
Note or Convertible Notes in authorized denominations in an aggregate principal
amount equal to the unconverted portion of the surrendered Convertible Note.
Each conversion shall be deemed to have been effected as to any such
Convertible Note (or portion thereof) on the applicable Conversion Date, and the
person in whose name any certificate or certificates for shares of Common Stock
are issuable upon such conversion shall be deemed to have become on the
applicable Conversion Date the holder of record of the shares represented
thereby; provided, however, that any such surrender on any date when the
Company's stock transfer books are closed shall constitute the person in whose
name the certificates are to be issued as the record holder thereof for all
purposes on the next succeeding day on which such stock transfer books are open,
but such conversion shall be at the Conversion Price in effect on the date upon
which such Convertible Note is surrendered.
Any Convertible Note or portion thereof surrendered for conversion during
the period from the close of business on the record date for any interest
payment through the close of business on the last Trading Day immediately
preceding such interest payment date shall be accompanied by payment, in funds
acceptable to the Company, of an amount equal to the interest
43
and Liquidated Damages, if any, otherwise payable on such interest payment date
on the principal amount being converted; provided however, that no such payment
need be made if there exists at the time of conversion a default in the payment
of interest or Liquidated Damages, if applicable, on the Convertible Notes. An
amount equal to such payment shall be paid by the Company on such interest
payment date to the holder of such Convertible Note at the close of business on
such record date; provided, however, that if the Company defaults in the payment
of interest or Liquidated Damages, if applicable, on such interest payment date,
such amount shall be paid to the person who made such required payment. Except
as provided above in this Section 11.2, no adjustment shall be made for interest
and Liquidated Damages, if any, accrued on any Convertible Note converted or for
dividends on any shares issued upon the conversion of such Convertible Note as
provided in this Article 11.
SECTION 11.3 Cash Payments in Lieu of Fractional Shares.
No fractional shares of Common Stock or scrip representing fractional
shares shall be issued upon conversion of Convertible Notes. If more than one
Convertible Note shall be surrendered for conversion at one time by the same
holder, the number of full shares which shall be issuable upon conversion shall
be computed on the basis of the aggregate principal amount of the Convertible
Notes (or specified portions thereof to the extent permitted hereby) so
surrendered for conversion. If any fractional share of stock otherwise would be
issuable upon the conversion of any Convertible Note or Convertible Notes, the
Company shall make an adjustment therefor in cash based upon the Average Sale
Price of the Common Stock.
SECTION 11.4 Conversion Price.
The conversion price shall be as specified in the form of Convertible Note
attached as Exhibit A hereto, subject to adjustment as provided in this Article
11.
SECTION 11.5 Adjustment of Conversion Price.
The Conversion Price shall be adjusted from time to time by the Company as
follows:
(a) If the Company shall hereafter pay a dividend or make a distribution to
all holders of the outstanding Common Stock in shares of Common Stock, the
Conversion Price in effect at the opening of business on the date following the
date fixed for the determination of shareholders entitled to receive such
dividend or other distribution shall be reduced by multiplying such Conversion
Price by a fraction of which the numerator shall be the number of shares of
Common Stock outstanding at the close of business on the Record Date (as defined
in Section 11.5(g)) fixed for such determination and the denominator shall be
the sum of such number of shares and the total number of shares constituting
such dividend or other distribution, such reduction to become effective
immediately after the opening of business on the day following the Record Date.
If any dividend or distribution of the type described in this Section 11.5(a) is
declared but not so paid or made, the Conversion Price shall again be adjusted
to the Conversion Price which would then be in effect if such dividend or
distribution had not been declared.
(b) If the outstanding shares of Common Stock shall be subdivided into a
greater number of shares of Common Stock, the Conversion Price in effect at the
opening of business on the day following the day upon which such subdivision
becomes effective shall be
44
proportionately reduced, and, conversely, if the outstanding shares of Common
Stock shall be combined into a smaller number of shares of Common Stock, the
Conversion Price in effect at the opening of business on the day following the
day upon which such combination becomes effective shall be proportionately
increased, such reduction or increase, as the case may be, to become effective
immediately after the opening of business on the day following the day upon
which such subdivision or combination becomes effective.
(c) If the Company shall issue rights or warrants to all or substantially
all holders of its outstanding shares of Common Stock entitling them to
subscribe for or purchase shares of Common Stock at a price per share less than
the Current Market Price (as defined in Section 11.5(g)) on the Record Date
fixed for the determination of shareholders entitled to receive such rights or
warrants, the Conversion Price shall be adjusted so that the same shall equal
the price determined by multiplying the Conversion Price in effect at the
opening of business on the date after such Record Date by a fraction of which
the numerator shall be the number of shares of Common Stock outstanding at the
close of business on the Record Date plus the number of shares which the
aggregate offering price of the total number of shares so offered would purchase
at such Current Market Price, and of which the denominator shall be the number
of shares of Common Stock outstanding on the close of business on the Record
Date plus the total number of additional shares of Common Stock so offered for
subscription or purchase. Such adjustment shall become effective immediately
after the opening of business on the day following the Record Date fixed for
determination of shareholders entitled to receive such rights or warrants. To
the extent that shares of Common Stock are not delivered pursuant to such rights
or warrants, upon the expiration or termination of such rights or warrants the
Conversion Price shall be readjusted to be the Conversion Price which would then
be in effect had the adjustments made upon the issuance of such rights or
warrants been made on the basis of delivery of only the number of shares of
Common Stock actually delivered. If such rights or warrants are not so issued,
the Conversion Price shall again be adjusted to be the Conversion Price which
would then be in effect if such date fixed for the determination of shareholders
entitled to receive such rights or warrants had not been fixed. In determining
whether any rights or warrants entitle the holders to subscribe for or purchase
shares of Common Stock at less than such Current Market Price, and in
determining the aggregate offering price of such shares of Common Stock, there
shall be taken into account any consideration received for such rights or
warrants, with the value of such consideration, if other than cash, to be
determined by the Board of Directors.
(d) If the Company shall, by dividend or otherwise, distribute to all
holders of its Common Stock shares of any class of capital stock of the Company
(other than any dividends or distributions to which Section 11.5(a) applies) or
evidences of its indebtedness, cash or other assets (including securities, but
excluding (i) any rights or warrants of a type referred to in Section 11.5(c)
and (ii) dividends and distributions paid exclusively in cash) (the foregoing
hereinafter in this Section 11.5(d) called the "Securities"), then, in each such
case, the Conversion Price shall be reduced so that the same shall be equal to
the price determined by multiplying the Conversion Price in effect immediately
prior to the close of business on the Record Date (as defined in Section
11.5(g)) with respect to such distribution by a fraction of which the numerator
shall be the Current Market Price (determined as provided in Section 11.5(g)) on
such date less the fair market value (as determined by the Board of Directors,
whose determination shall be conclusive and described in a resolution of the
Board of Directors) on such date of the portion of the Securities so distributed
applicable to one share of Common Stock
45
and the denominator shall be such Current Market Price, such reduction to become
effective immediately prior to the opening of business on the day following the
Record Date; provided, however, that in the event the then fair market value (as
so determined) of the portion of the Securities so distributed applicable to one
share of Common Stock is equal to or greater than the Current Market Price on
the Record Date, in lieu of the foregoing adjustment, adequate provision shall
be made so that each holder of Convertible Notes shall have the right to receive
upon conversion of a Convertible Note (or any portion thereof) the amount of
Securities such holder would have received had such holder converted such
Convertible Note (or portion thereof) immediately prior to such Record Date. If
such dividend or distribution is not so paid or made, the Conversion Price shall
again be adjusted to be the Conversion Price which would then be in effect if
such dividend or distribution had not been declared. If the Board of Directors
determines the fair market value of any distribution for purposes of this
Section 11.5(d) by reference to the actual or when issued trading market for any
securities comprising all or part of such distribution, it must in doing so
consider the prices in such market over the same period used in computing the
Current Market Price pursuant to Section 11.5(g) to the extent possible.
Notwithstanding any other provision of this Section 11.5(d) to the
contrary, rights, warrants, evidences of indebtedness, other securities, cash or
other assets (including, without limitation, any rights distributed pursuant to
any shareholder rights plan) shall be deemed not to have been distributed for
purposes of this Section 11.5(d) if the Company makes proper provision so that
each holder of Convertible Notes who converts a Convertible Note (or any portion
thereof) after the date fixed for determination of shareholders entitled to
receive such distribution shall be entitled to receive upon such conversion, in
addition to the shares of Common Stock issuable upon such conversion, the amount
and kind of such distributions that such holder would have been entitled to
receive if such holder had, immediately prior to such determination date,
converted such Convertible Note into Common Stock.
Rights or warrants distributed by the Company to all holders of Common
Stock entitling the holders thereof to subscribe for or purchase shares of the
Company's capital stock (either initially or under certain circumstances), which
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 11.5(d) (and no adjustment to the Conversion Price
under this Section 11.5(d) shall be required) until the occurrence of the
earliest Trigger Event, whereupon such rights and warrants shall be deemed to
have been distributed and an appropriate adjustment to the Conversion Price
under this Section 11.5(d) shall be made. If any such rights or warrants,
including any such existing rights or warrants distributed prior to the date of
this Indenture, are subject to subsequent events, upon the occurrence of each of
which such rights or warrants shall become exercisable to purchase different
securities, evidences of indebtedness or other assets, then the occurrence of
each such event shall be deemed to be such date of issuance and record date with
respect to new rights or warrants (and a termination or expiration of the
existing rights or warrants without exercise by the holder thereof). In
addition, in the event of any distribution (or deemed distribution) of rights or
warrants, or any Trigger Event with respect thereto, that was counted for
purposes of calculating a distribution amount for which an adjustment to the
Conversion Price under this Section 11.5 was made, (1) in the case of any such
rights or warrants which shall all have been redeemed or repurchased without
exercise by any holders thereof, the Conversion Price shall be
46
readjusted upon such final redemption or repurchase to give effect to such
distribution or Trigger Event, as the case may be, as though it were a cash
distribution, equal to the per share redemption or repurchase price received by
a holder or holders of Common Stock with respect to such rights or warrants
(assuming such holder had retained such rights or warrants), made to all holders
of Common Stock as of the date of such redemption or repurchase, and (2) in the
case of such rights or warrants which shall have expired or been terminated
without exercise by any holders thereof, the Conversion Price shall be
readjusted as if such rights and warrants had not been issued.
For purposes of this Section 11.5(d) and Sections 11.5(a) and (c), any
dividend or distribution to which this Section 11.5(d) is applicable that also
includes shares of Common Stock, or rights or warrants to subscribe for or
purchase shares of Common Stock to which Section 11.5(c) applies (or both),
shall be deemed instead to be (1) a dividend or distribution of the evidences of
indebtedness, assets, shares of capital stock, rights or warrants other than
such shares of Common Stock or rights or warrants to which Section 11.5(c)
applies (and any Conversion Price reduction required by this Section 11.5(d)
with respect to such dividend or distribution shall then be made) immediately
followed by (2) a dividend or distribution of such shares of Common Stock or
such rights or warrants (and any further Conversion Price reduction required by
Sections 11.5(a) and (c) with respect to such dividend or distribution shall
then be made, except that (A) the Record Date of such dividend or distribution
shall be substituted as "the date fixed for the determination of shareholders
entitled to receive such dividend or other distribution", "Record Date fixed for
such determination" and "Record Date" within the meaning of Section 11.5(a) and
as "the date fixed for the determination of shareholders entitled to receive
such rights or warrants", "the Record Date fixed for the determination of the
shareholders entitled to receive such rights or warrants" and "such Record Date"
within the meaning of Section 11.5(c) and (B) any shares of Common Stock
included in such dividend or distribution shall not be deemed "outstanding at
the close of business on the date fixed for such determination" within the
meaning of Section 11.5(a)).
(c) If the Company shall, by dividend or otherwise, distribute cash to all
holders of its Common Stock (excluding any cash that is distributed upon a
merger, share exchange or consolidation to which Section 11.6 applies or as part
of a distribution referred to in Section 11.5(d)) in an aggregate amount that,
combined together with (1) the aggregate amount of any other such all-cash
distributions to all holders of its Common Stock within the 12 months preceding
the date of payment of such distribution, and in respect of which no adjustment
pursuant to this Section 11.5(e) has been made, and (2) the aggregate of any
cash plus the fair market value (as determined by the Board of Directors, whose
determination shall be conclusive and described in a resolution of the Board of
Directors) of consideration payable in respect of any tender offer by the
Company or any of its subsidiaries for all or any portion of the Common Stock
concluded within the 12 months preceding the date of payment of such
distribution, and in respect of which no adjustment pursuant to Section 11.5(f)
has been made, exceeds 10% of the product of the Current Market Price
(determined as provided in Section 11.5(g)) on the Record Date with respect to
such distribution times the number of shares of Common Stock outstanding on such
date, then, and in each such case, immediately after the close of business on
such date, the Conversion Price shall be reduced so that it shall equal the
price determined by multiplying the Conversion Price in effect immediately prior
to the close of business on such Record Date by a fraction (i) the numerator of
which shall be equal to the Current Market Price on the Record
47
Date less an amount equal to the quotient of (x) the excess of such combined
amount over such 10% and (y) the number of shares of Common Stock outstanding on
the Record Date and (ii) the denominator of which shall be equal to the Current
Market Price on such Record Date; provided, however, that if the portion of the
cash so distributed applicable to one share of Common Stock is equal to or
greater than the Current Market Price of the Common Stock on the Record Date, in
lieu of the foregoing adjustment, adequate provision shall be made so that each
holder of Convertible Notes shall have the right to receive upon conversion of a
Convertible Note (or any portion thereof) the amount of cash such holder would
have received had such holder converted such Convertible Note (or portion
thereof) immediately prior to such Record Date. If such dividend or distribution
is not so paid or made, the Conversion Price shall again be adjusted to be the
Conversion Price which would then be in effect if such dividend or distribution
had not been declared. Any cash distribution to all holders of Common Stock as
to which the Company makes the election permitted by Section 11.5(m) and as to
which the Company has complied with the requirements of such Section shall be
treated as not having been made for all purposes of this Section 11.5(e).
(f) If a tender offer made by the Company or any of its subsidiaries for
all or any portion of the Common Stock expires and such tender offer (as amended
upon the expiration thereof) requires the payment to shareholders (based on the
acceptance (up to any maximum specified in the terms of the tender offer) of
Purchased Shares (as defined below)) of an aggregate consideration having a fair
market value (as determined by the Board of Directors, whose determination shall
be conclusive and described in a resolution of the Board of Directors) that,
combined together with (1) the aggregate of the cash plus the fair market value
(as determined by the Board of Directors, whose determination shall be
conclusive and described in a resolution of the Board of Directors), as of the
expiration of such tender offer, of consideration payable in respect of any
other tender offers, by the Company or any of its subsidiaries for all or any
portion of the Common Stock, expiring within the 12 months preceding the
expiration of such tender offer and in respect of which no adjustment pursuant
to this Section 11.5(f) has been made and (2) the aggregate amount of any such
all-cash distributions to all holders of the Common Stock within 12 months
preceding the expiration of such tender offer and in respect of which no
adjustment pursuant to Section 11.5(e) has been made, exceeds 10% of the product
of the Current Market Price (determined as provided in Section 11.5(g)) as of
the last time (the "Expiration Time") tenders could have been made pursuant to
such tender offer (as it may be amended) times the number of shares of Common
Stock outstanding (including any tendered shares) on the Expiration Time, then,
and in each such case, immediately prior to the opening of business on the day
after the date of the Expiration Time, the Conversion Price shall be adjusted so
that the same shall equal the price determined by multiplying the Conversion
Price in effect immediately prior to close of business on the date of the
Expiration Time by a fraction of which the numerator shall be the number of
shares of Common Stock outstanding (including any tendered shares) on the
Expiration Time multiplied by the Current Market Price of the Common Stock on
the Trading Day next succeeding the Expiration Time and the denominator shall be
the sum of (x) the fair market value (determined as aforesaid) of the aggregate
consideration payable to shareholders based on the acceptance (up to any maximum
specified in the terms of the tender offer) of all shares validly tendered and
not withdrawn as of the Expiration Time (the shares deemed so accepted, up to
any such maximum, being referred to as the "Purchased Shares") and (y) the
product of the number of shares of Common Stock outstanding (less any Purchased
Shares) on the Expiration Time and the Current Market Price of the Common Stock
on the
48
Trading Day next succeeding the Expiration Time, such reduction (if any) to
become effective immediately prior to the opening of business on the day
following the Expiration Time. If the Company is obligated to purchase shares
pursuant to any such tender offer, but the Company is permanently prevented by
applicable law from effecting any such purchases or all such purchases are
rescinded, the Conversion Price shall again be adjusted to be the Conversion
Price which would then be in effect if such tender offer had not been made. If
the application of this Section 11.5(f) to any tender offer would result in an
increase in the Conversion Price, no adjustment shall be made for such tender
offer under this Section 11.5(f).
(g) For purposes of this Section 11.5, the following terms shall have the
meaning indicated:
(1) "closing price" with respect to any securities on any day means
the closing price on such day or, if no such sale takes place on such day,
the average of the reported high and low prices on such day, in each case
on the Nasdaq National Market or New York Stock Exchange, as applicable,
or, if such security is not listed or admitted to trading on such national
market or exchange, on the principal national securities exchange or
quotation system on which such security is quoted or listed or admitted to
trading, or, if not quoted or listed or admitted to trading on any national
securities exchange or quotation system, the average of the high and low
prices of such security on the over-the-counter market on the day in
question as reported by the National Quotation Bureau Incorporated, or a
similar generally accepted reporting service, or, if not so available, in
such manner as furnished by any New York Stock Exchange member firm
selected from time to time by the Board of Directors for that purpose, or a
price determined in good faith by the Board of Directors, whose
determination shall be conclusive and described in a resolution of the
Board of Directors.
(2) "Current Market Price" means the average of the daily closing
prices per share of Common Stock for the 10 consecutive Trading Days
immediately prior to the date in question; provided, however, that (1) if
the "ex" date (as hereinafter defined) for any event (other than the
issuance or distribution requiring such computation) that requires an
adjustment to the Conversion Price pursuant to Sections 11.5(a), (b), (c),
(d), (e) or (f) occurs during such 10 consecutive Trading Days, the closing
price for each Trading Day prior to the "ex" date for such other event
shall be adjusted by multiplying such closing price by the same fraction by
which the Conversion Price is so required to be adjusted as a result of
such other event, (2) if the "ex" date for any event (other than the
issuance or distribution requiring such computation) that requires an
adjustment to the Conversion Price pursuant to Section 11.5(a), (b), (c),
(d), (e) or (f) occurs on or after the "ex" date for the issuance or
distribution requiring such computation and prior to the day in question,
the closing price for each Trading Day on and after the "ex" date for such
other event shall be adjusted by multiplying such closing price by the
reciprocal of the fraction by which the Conversion Price is so required to
be adjusted as a result of such other event, and (3) if the "ex" date for
the issuance or distribution requiring such computation is prior to the day
in question, after taking into account any adjustment required pursuant to
clause (1) or (2) of this proviso, the closing price for each Trading Day
on or after such "ex" date shall be adjusted by adding thereto the amount
of any cash and the fair market value (as determined by the Board of
Directors in a manner consistent with any determination of such value for
purposes of Sections 11.5(d) or (f), whose determination shall be
conclusive and described in a resolution of the Board of Directors) of the
evidences of indebtedness, shares of capital stock or assets being
distributed
49
applicable to one share of Common Stock as of the close of business on the
day before such "ex" date. For purposes of any computation under Section
11.5(f), the Current Market Price on any date shall be deemed to be the
average of the daily closing prices per share of Common Stock for such day
and the next two succeeding Trading Days; provided, however, that if the
"ex" date for any event (other than the tender offer requiring such
computation) that requires an adjustment to the Conversion Price pursuant
to Section 11.5(a), (b), (c), (d), (e) or (f) occurs on or after the
Expiration Time for the tender or exchange offer requiring such computation
and prior to the day in question, the closing price for each Trading Day on
and after the "ex" date for such other event shall be adjusted by
multiplying such Closing Price by the reciprocal of the fraction by which
the Conversion Price is so required to be adjusted as a result of such
other event. For purposes of this paragraph, the term "ex" date, (1) when
used with respect to any issuance or distribution, means the first date on
which the Common Stock trades regular way on the relevant exchange or in
the relevant market from which the closing price was obtained without the
right to receive such issuance or distribution, (2) when used with respect
to any subdivision or combination of shares of Common Stock, means the
first date on which the Common Stock trades regular way on such exchange or
in such market after the time at which such subdivision or combination
becomes effective, and (3) when used with respect to any tender or exchange
offer means the first date on which the Common Stock trades regular way on
such exchange or in such market after the Expiration Time of such offer.
Notwithstanding the foregoing, whenever successive adjustments to the
Conversion Price are called for pursuant to this Section 11.5, such
adjustments shall be made to the Current Market Price as may be necessary
or appropriate to effectuate the intent of this Section 11.5 and to avoid
unjust or inequitable results as determined in good faith by the Board of
Directors.
(3) "fair market value" shall mean the amount which a willing buyer
would pay a willing seller in an arm's length transaction.
(4) "Record Date" shall mean, with respect to any dividend,
distribution or other transaction or event in which the holders of Common
Stock have the right to receive any cash, securities or other property or
in which the Common Stock (or other applicable security) is exchanged for
or converted into any combination of cash, securities or other property,
the date fixed for determination of shareholders entitled to receive such
cash, securities or other property (whether such date is fixed by the Board
of Directors or by statute, contract or otherwise).
(h) The Company may make such reductions in the Conversion Price, in
addition to those required by Sections 11.5(a), (b), (c), (d), (e) and (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.
The Company from time to time may, to the extent permitted by law, reduce
the Conversion Price by any amount for any period of at least 20 days, if the
Board of Directors has made a determination that such reduction would be in the
Company's best interests, which determination shall be conclusive and described
in a resolution of the Board of Directors. The reduction in Conversion Price
shall be irrevocable during this period. Whenever the Conversion Price is
reduced pursuant to the preceding sentence, the Company shall mail to the
holders of Convertible Notes at his or her last address appearing on the
Register a notice of the reduction at
50
least 15 days prior to the date the reduced Conversion Price takes effect, and
such notice shall state the reduced Conversion Price and the period during which
it will be in effect.
(i) No adjustment in the Conversion Price shall be required unless such
adjustment would require an increase or decrease of at least 1% of the
Conversion Price then in effect; provided, however, that any adjustments which
by reason of this Section 11.5(i) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All calculations
under this Article 11 shall be made by the Company and shall be made to the
nearest cent or to the nearest one hundredth of a share, as the case may be.
No adjustment need be made for a change in the par value or no par value of
the Common Stock.
(j) Whenever the Conversion Price is adjusted as herein provided, the
Company shall promptly file with the Trustee and any Conversion Agent other than
the Trustee an Officers' Certificate setting forth the Conversion Price after
such adjustment and setting forth a brief statement of the facts requiring such
adjustment. Promptly after delivery of such certificate, the Company shall
prepare a notice of such adjustment of the Conversion Price setting forth the
adjusted Conversion Price and the date on which each adjustment becomes
effective and shall mail such notice of such adjustment of the Conversion Price
to each holder of Convertible Notes at his or her last address appearing on the
Register of holders maintained for that purpose within 20 days of the effective
date of such adjustment. Failure to deliver such notice shall not affect the
legality or validity of any such adjustment.
(k) In any case in which this Section 11.5 provides that an adjustment
shall become effective immediately after a Record Date for an event, the Company
may defer until the occurrence of such event issuing to the holder of any
Convertible Note converted after such Record Date and before the occurrence of
such event the additional shares of Common Stock issuable upon such conversion
by reason of the adjustment required by such event over and above the Common
Stock issuable upon such conversion before giving effect to such adjustment.
(l) For purposes of this Section 11.5, the number of shares of Common Stock
at any time outstanding shall not include shares held in the treasury of the
Company but shall include shares issuable in respect of scrip certificates
issued in lieu of fractions of shares of Common Stock. The Company shall not pay
any dividend or make any distribution on shares of Common Stock held in the
treasury of the Company.
(m) In lieu of making any adjustment to the Conversion Price pursuant to
Section 11.5(e), the Company may elect to reserve an amount of cash for
distribution to the holders of Convertible Notes upon the conversion of the
Convertible Notes so that any such holder converting Convertible Notes will
receive upon such conversion, in addition to the shares of Common Stock and
other items to which such holder is entitled, the full amount of cash which such
holder would have received if such holder had, immediately prior to the Record
Date for such distribution of cash, converted its Convertible Notes into Common
Stock, together with any interest accrued with respect to such amount, in
accordance with this Section 11.5(m). The Company may make such election by
providing an Officers' Certificate to the Trustee to such effect on or prior to
the payment date for any such distribution and depositing with the Trustee
51
on or prior to such date an amount of cash equal to the aggregate amount that
the holders of Convertible Notes would have received if such holders had,
immediately prior to the Record Date for such distribution, converted all of the
Convertible Notes into Common Stock. Any such funds so deposited by the Company
with the Trustee shall be invested by the Trustee pursuant to arrangements
reasonably satisfactory to the Trustee in U.S. Government Obligations with a
maturity not more than three (3) months from the date of issuance. Upon
conversion of Convertible Notes by a holder thereof, such holder shall be
entitled to receive, in addition to the Common Stock issuable upon conversion,
an amount of cash equal to the amount such holder would have received if such
holder had, immediately prior to the Record Date for such distribution,
converted its Convertible Note into Common Stock, along with such holder's
pro-rata share of any accrued interest earned as a consequence of the investment
of such funds. Promptly after making an election pursuant to this Section
11.5(m), the Company shall give or shall cause to be given notice to all holders
of Convertible Notes of such election, which notice shall state the amount of
cash per $1,000 principal amount of Convertible Notes such holders shall be
entitled to receive (excluding interest) upon conversion of the Convertible
Notes as a consequence of the Company having made such election.
SECTION 11.6 Effect of Reclassification, Consolidation, Merger or Sale.
If any of the following events occur: (i) any reclassification or change of
the outstanding shares of Common Stock (other than a change in par value, or
from par value to no par value, or from no par value to par value, or as a
result of a subdivision or combination), (ii) any consolidation, merger, share
exchange or combination of the Company with another corporation as a result of
which holders of Common Stock shall be entitled to receive stock, securities or
other property or assets (including cash) with respect to or in exchange for
such Common Stock, or (iii) any sale or conveyance of the properties and assets
of the Company as an entirety or substantially as an entirety to any other
corporation as a result of which holders of Common Stock shall be entitled to
receive stock, securities or other property or assets (including cash) with
respect to or in exchange for such Common Stock, then the Company or the
successor or purchasing corporation, as the case may be, shall execute with the
Trustee a supplemental indenture (which shall comply with the TIA as in force at
the date of execution of such supplemental indenture if such supplemental
indenture is then required to so comply) providing that the Convertible Notes
shall be convertible into the kind and amount of shares of stock and other
securities or property or assets (including cash) receivable upon such
reclassification, change, consolidation, merger, share exchange, combination,
sale or conveyance by a holder of a number of shares of Common Stock issuable
upon conversion of the Convertible Notes (assuming, for such purposes, a
sufficient number of authorized shares of Common Stock available to convert all
such Convertible Notes) immediately prior to such reclassification, change,
consolidation, merger, share exchange, combination, sale or conveyance assuming
such holder of Common Stock did not exercise his or her rights of election, if
any, as to the kind or amount of securities, cash or other property receivable
upon such consolidation, merger, share exchange, sale or conveyance (provided
that, if the kind or amount of securities, cash or other property receivable
upon such consolidation, merger, share exchange, sale or conveyance is not the
same for each share of Common Stock in respect of which such rights of election
have not been exercised ("non-electing share"), then, for the purposes of this
Section 11.6, the kind and amount of securities, cash or other property
receivable upon such consolidation, merger, share exchange, sale or conveyance
for each non-electing share shall be deemed to be the kind and
52
amount so receivable per share by a plurality of the non-electing shares). Such
supplemental indenture shall provide for adjustments which shall be as nearly
equivalent as may be practicable to the adjustments provided for in this Article
11. If, in the case of any such reclassification, change, consolidation, merger,
share exchange, combination, sale or conveyance, the stock or other securities
and assets receivable thereupon by a holder of shares of Common Stock includes
shares of stock or other securities and assets of a corporation other than the
successor or purchasing corporation, as the case may be, in such
reclassification, change, consolidation, merger, share exchange, combination,
sale or conveyance, then such supplemental indenture shall also be executed by
such other corporation and shall contain such additional provisions to protect
the interests of the holders of the Convertible Notes as the Board of Directors
shall reasonably consider necessary by reason of the foregoing.
The Company shall cause notice of the execution of such supplemental
indenture to be mailed to each holder of Convertible Notes at his or her address
appearing on the Register within 20 days after execution thereof. Failure to
deliver such notice shall not affect the legality or validity of such
supplemental indenture.
The above provisions of this Section 11.6 shall similarly apply to
successive reclassifications, changes, consolidations, mergers, share exchanges,
combinations, sales and conveyances.
If this Section 11.6 applies to any event or occurrence, Section 11.5 shall
not apply.
SECTION 11.7 Taxes on Shares Issued.
The issue of stock certificates on conversions of Convertible Notes shall
be made without charge to the converting holder for any tax in respect of the
issue thereof. The Company shall not, however, be required to pay any tax which
may be payable in respect of any transfer involved in the issue and delivery of
stock in any name other than that of the holder of any Convertible 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 11.8 Reservation of Shares; Shares to Be Fully Paid; Listing of Common
Stock.
The Company shall provide, free from preemptive rights, out of its
authorized but unissued shares or shares held in treasury, sufficient shares to
provide for the conversion of the Convertible Notes from time to time as such
Convertible Notes are presented for conversion.
Before taking any action which would cause an adjustment reducing the
Conversion Price below the then par value, if any, of the shares of Common Stock
issuable upon conversion of the Convertible Notes, the Company shall take all
corporate action which may, in the opinion of its counsel, be necessary in order
that the Company may validly and legally issue shares of such Common Stock at
such adjusted Conversion Price.
53
The Company covenants that all shares of Common Stock issued upon
conversion of Convertible Notes will be fully paid and non- assessable by the
Company and free from all taxes, liens and charges with respect to the issue
thereof.
The Company further covenants that as long as the Common Stock is listed on
the New York Stock Exchange, or its successor, the Company shall cause all
Common Stock issuable upon conversion of the Convertible Notes to be eligible
for such listing in accordance with, and at the times required under, the
requirements of such market, and if at any time the Common Stock becomes quoted
on the Nasdaq National Market or listed on any other national securities
exchange, the Company shall cause all Common Stock issuable upon conversion of
the Convertible Notes to be so quoted or listed and kept so quoted or listed.
SECTION 11.9 Responsibility of Trustee.
The Trustee shall not at any time be under any duty of responsibility to
any holders of Convertible Notes to determine whether any facts exist which may
require any adjustment of the Conversion Price, or with respect to the nature or
extent or calculation of any such adjustment when made, or with respect to the
method employed, or herein or in any supplemental indenture provided to be
employed, in making the same. The Trustee shall not be accountable with respect
to the validity or value (or the kind or amount) of any shares of Common Stock,
or of any securities or property, which may at any time be issued or delivered
upon the conversion of any Convertible Note; and the Trustee makes no
representations with respect thereto. Subject to the provisions of Section 7.1,
the Trustee shall not be responsible for any failure of the Company to issue,
transfer or deliver any shares of Common Stock or stock certificates or other
securities or property or cash upon the surrender of any Convertible Note for
the purpose of conversion or to comply with any of the duties, responsibilities
or covenants of the Company contained in this Article 11. Without limiting the
generality of the foregoing, the Trustee shall not have any responsibility to
determine the correctness of any provisions contained in any supplemental
indenture entered into pursuant to Section 11.6 relating either to the kind or
amount of shares of stock or securities or property (including cash) receivable
by holders of Convertible Notes upon the conversion of their Convertible Notes
after any event referred to in such Section 11.6 or to any adjustment to be made
with respect thereto, but, subject to the provisions of Section 7.1, may accept
as conclusive evidence of the correctness of any such provisions, and shall be
protected in relying upon, the Officers' Certificate and Opinion of Counsel
(which the Company shall be obligated to file with the Trustee prior to the
execution of any such supplemental indenture) with respect thereto.
SECTION 11.10 Notice to Holders Prior to Certain Actions.
If
(a) the Company declares a dividend (or any other distribution) on its
Common Stock (other than in cash out of retained earnings or other than a
dividend that results in an adjustment in the Conversion Price pursuant to
Section 11.5 as to which the Company has made an election in accordance with
Section 11.5(m)); or
54
(b) the Company authorizes the granting to all or substantially all of the
holders of its Common Stock of rights or warrants to subscribe for or purchase
any share of any class of Common Stock or any other rights or warrants (other
than rights or warrants referred to in the second paragraph of Section 11.5(d));
or
(c) there is any reclassification of the Common Stock (other than a
subdivision or combination of outstanding Common Stock, or a change in par
value, or from par value to no par value, or from no par value to par value), or
any consolidation, merger or share exchange to which the Company is a party and
for which approval of any shareholders of the Company is required, or the sale
or transfer of all or substantially all of the assets of the Company; or
(d) there is any voluntary or involuntary dissolution, liquidation or
winding-up of the Company;
then the Company shall cause to be filed with the Trustee and to be mailed to
each holder of Convertible Notes at his or her address appearing on the Register
maintained for that purpose as promptly as possible but in any event at least 15
days prior to the applicable date hereinafter specified, a 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, share exchange, 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, share
exchange, 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, share exchange, sale, transfer, dissolution, liquidation or winding-up.
SECTION 11.11 Restriction on Common Stock Issuable Upon Conversion.
(a) Shares of Common Stock to be issued upon conversion of Convertible
Notes prior to the effectiveness of a Shelf Registration Statement shall be
physically delivered in certificated form to the holders converting such
Securities, and the certificate representing such shares of Common Stock shall
bear the Restricted Common Stock Legend unless removed in accordance with
Section 11.11(c).
(b) If (i) shares of Common Stock to be issued upon conversion of a
Convertible Note prior to the effectiveness of a Shelf Registration Statement
are to be registered in a name other than that of the holder of such Convertible
Note or (ii) shares of Common Stock represented by a certificate bearing the
Restricted Common Stock Legend are transferred subsequently by such holder,
then, unless the Shelf Registration Statement has become effective and such
shares are being transferred pursuant to the Shelf Registration Statement, the
holder must deliver to the transfer agent for the Common Stock a certificate in
substantially the form of Exhibit C as to compliance with the restrictions on
transfer applicable to such shares of Common Stock, and neither the transfer
agent nor the registrar for the Common Stock shall be required to register any
transfer of such Common Stock not so accompanied by a properly completed
certificate.
55
(c) Except in connection with a Shelf Registration Statement, if
certificates representing shares of Common Stock are issued upon the
registration of transfer, exchange or replacement of any other certificate
representing shares of Common Stock bearing the Restricted Common Stock Legend,
or if a request is made to remove such Restricted Common Stock Legend from
certificates representing shares of Common Stock, the certificates so issued
shall bear the Restricted Common Stock Legend, or the Restricted Common Stock
Legend shall not be removed, as the case may be, unless there is delivered to
the Company such satisfactory evidence, which, in the case of a transfer made
pursuant to Rule 144 under the Securities Act, may include an opinion of counsel
as may be reasonably required by the Company, that neither the legend nor the
restrictions on transfer set forth therein are required to ensure that transfers
thereof comply with the provisions of Rule 144A, Rule 144 or Regulation S under
the Securities Act or that such shares of Common Stock are securities that are
not "restricted" within the meaning of Rule 144 under the Securities Act. Upon
provision to the Company of such reasonably satisfactory evidence, the Company
shall cause the transfer agent for the Common Stock to countersign and deliver
certificates representing shares of Common Stock that do not bear the legend.
ARTICLE 12
Guarantee
---------
SECTION 12.1 Terms of the Guarantee. Subject to the provisions of this Article
12, the Guarantor hereby fully and unconditionally guarantees, to each holder of
a Convertible Note authenticated and delivered by the Trustee and to the Trustee
and its successors and assigns, irrespective of the validity or enforceability
of this Indenture, the Convertible Notes or the obligations of the Company under
this Indenture or the Convertible Notes, that: (i) the principal of, and
interest and Liquidated Damages, if any, on the Convertible Notes will be paid
in full when due, whether at maturity, by acceleration, upon a Fundamental
Change or otherwise, and interest on the overdue principal and (to the extent
permitted by law) interest and liquidated damages, if any, on the Convertible
Notes will be promptly paid in full; (ii) all other obligations of the Company
to the holders or the Trustee under this Indenture or the Convertible Notes will
be promptly paid in full or performed, all in accordance with the terms of this
Indenture and the Convertible Notes; and (iii) in case of any extension of time
in payment or renewal of any Convertible Notes or any of such other obligations,
they will be paid in full when due or performed in accordance with the terms of
the extension or renewal, whether at maturity, by acceleration or otherwise.
Failing payment when due of any amount so guaranteed, or failing performance of
any other obligation of the Company to the holders or the Trustee, for whatever
reason, the Guarantor will be obligated to pay, or to perform or cause the
performance of, the same before such failure becomes an Event of Default. The
Guarantor agrees that this is a guarantee of payment not a guarantee of
collection.
The Guarantor hereby agrees that its obligations with regard to this
Guarantee shall be unconditional, irrespective of the validity, regularity or
enforceability of the Convertible Notes or the obligations of the Company under
this Indenture, the absence of any action to enforce the same, the recovery of
any judgment against the Company or any other obligor with respect to this
Indenture, the Convertible Notes or the obligations of the Company under this
Indenture or the Convertible Notes, any action to enforce the same or any other
circumstances (other than
56
complete performance) which might otherwise constitute a legal or equitable
discharge or defense of a guarantor. The Guarantor further, to the extent
permitted by law, hereby waives (a) demand, protest and notice of any kind, (b)
any defense that may arise by reason of the incapacity, lack of authority, death
or disability of any other person or the failure of the Trustee, the holders or
the Company (each a "Benefitted Party") to file or enforce a claim against the
estate (in administration, bankruptcy or any other proceeding) of any other
person, (c) notice of the existence, creation or incurring of any new or
additional indebtedness or obligation, (d) any right to require a proceeding
first against the Company or right to require the prior disposition of the
assets of the Company to meet its obligations, (e) any defense based upon an
election of remedies by a Benefitted Party, including but not limited to an
election at law which provides that the obligation of a surety must be neither
larger in amount nor in other respects more burdensome than that of the
principal, (f) any defense arising because of a Benefitted Party's election, in
any proceeding instituted under Bankruptcy Law, of the application of 11 U.S.C.
Section 1111(b)(2) or (g) any defense based on any borrowing or grant of a
security interest under 11 U.S.C. Section 364. The Guarantor hereby covenants
that the Guarantee will not be discharged except by complete performance of the
obligations contained in the Convertible Notes, the Guarantee and this
Indenture.
If any holder or the Trustee is required by any court or otherwise to
return to either the Company or the Guarantor, or any custodian acting in
relation to either the Company or the Guarantor, any amount paid by the Company
or the Guarantor to the Trustee or such holder, the Guarantee, to the extent
theretofore discharged, shall be reinstated in full force and effect. The
Guarantor agrees that it will not be entitled to any right of subrogation in
relation to the holders in respect of any obligations guaranteed hereby until
payment in full of all obligations guaranteed hereby. The Guarantor agrees that,
as between it, on the one hand, and the holders of Convertible Notes and the
Trustee, on the other hand, (x) the maturity of the obligations guaranteed
hereby may be accelerated as provided in Article 6 hereof for the purposes
hereof, notwithstanding any stay, injunction or other prohibition preventing
such acceleration in respect of the obligations guaranteed hereby, and (y) in
the event of any acceleration of such obligations as provided in Article 6
hereof, such obligations (whether or not due and payable) shall forthwith become
due and payable by the Guarantor for the purpose of its Guarantee.
SECTION 12.2 Limitation of the Guarantor's Liability. The Guarantor acknowledges
that it will receive direct and indirect benefits from the financing
arrangements contemplated by this Indenture, including, without limitation, the
net proceeds of the sale of the Convertible Notes. The Guarantor and by its
acceptance hereof, each beneficiary hereof, hereby confirms that it is its
intention that the Guarantee not constitute a fraudulent transfer or conveyance
for purposes of the Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the
Uniform Fraudulent Transfer Act or any similar federal, state or foreign law to
the extent applicable to the Guarantee. To effectuate the foregoing intention,
each such person hereby irrevocably agrees that the obligation of the Guarantor
under the Guarantee under this Article 12 shall be limited to the maximum amount
as will, after giving effect to such maximum amount and all other (contingent or
otherwise) liabilities of the Guarantor that are relevant under such laws,
result in the obligations of the Guarantor in respect of such maximum amount not
constituting a fraudulent conveyance.
57
IN WITNESS WHEREOF, the parties have caused this Indenture to be duly
executed and attested, all as of the date first above written, signifying their
agreements contained in this Indenture.
GATX CORPORATION
By: /s/ Xxxxxxx X. Xxxxx
--------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Treasurer
GATX FINANCIAL CORPORATION
By: /s/ Xxxxx X. Xxxxxx
--------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President and
Chief Financial Officer
JPMORGAN CHASE BANK, as Trustee
By: /s/ Xxxx X. Xxxxx
--------------------------------
Name: Xxxx X. Xxxxx
Title: Vice President
EXHIBIT A
(Face of Security)
[Global Securities Legend]
[The following legend shall appear on the face of each Global Security:
THIS CONVERTIBLE NOTE IS A GLOBAL SECURITY WITHIN THE MEANING OF THE
INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE
DEPOSITARY OR A NOMINEE OF THE DEPOSITARY, WHICH MAY BE TREATED BY THE COMPANY,
THE TRUSTEE AND ANY AGENT THEREOF AS OWNER AND HOLDER OF THIS CONVERTIBLE NOTE
FOR ALL PURPOSES.]
[The following legend shall appear on the face of each Global Security
for which The Depository Trust Company is to be the Depositary:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITARY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE COMPANY OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY THE AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR REGISTERED
CONVERTIBLE NOTES IN DEFINITIVE REGISTERED FORM IN THE LIMITED CIRCUMSTANCES
REFERRED TO IN THE INDENTURE, THIS GLOBAL SECURITY MAY NOT BE TRANSFERRED EXCEPT
AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF
THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE
DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OR SUCH
SUCCESSOR DEPOSITARY.]
[Restricted Securities Legend]
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"). THE HOLDER HEREOF, BY PURCHASING THIS SECURITY,
AGREES FOR THE BENEFIT OF THE COMPANY THAT THIS SECURITY MAY NOT BE RESOLD,
PLEDGED OR OTHERWISE TRANSFERRED (X) PRIOR TO THE SECOND ANNIVERSARY OF THE
ISSUE HEREOF (OR ANY PREDECESSOR SECURITY HEREOF) OR (Y) BY ANY HOLDER THAT WAS
AN "AFFILIATE" (WITHIN THE MEANING OF RULE 144 UNDER THE SECURITIES ACT) OF THE
COMPANY AT ANY TIME DURING THE THREE MONTHS PRECEDING
A-1
THE DATE OF SUCH TRANSFER, IN EITHER CASE OTHER THAN (1) TO THE COMPANY, (2) SO
LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE
SECURITIES ACT ("RULE 144A"), TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS
A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A, PURCHASING FOR
ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM
NOTICE IS GIVEN THAT THE RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN
RELIANCE ON RULE 144A, (3) IN AN OFFSHORE TRANSACTION (AS DEFINED IN REGULATION
S UNDER THE SECURITIES ACT) IN ACCORDANCE WITH REGULATION S UNDER THE SECURITIES
ACT, (4) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT
PROVIDED BY RULE 144 (IF APPLICABLE) UNDER THE SECURITIES ACT OR (5) PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH CASE IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES. THE HOLDER HEREOF, BY PURCHASING THIS SECURITY, REPRESENTS AND AGREES
FOR THE BENEFIT OF THE COMPANY THAT IT IS (1) A QUALIFIED INSTITUTIONAL BUYER OR
(2) NOT A U.S. PERSON AND IS OUTSIDE THE UNITED STATES WITHIN THE MEANING OF (OR
AN ACCOUNT SATISFYING THE REQUIREMENTS OF PARAGRAPH (k)(2) OF RULE 902 UNDER)
REGULATION S UNDER THE SECURITIES ACT. IN ANY CASE THE HOLDER HEREOF WILL NOT,
DIRECTLY OR INDIRECTLY, ENGAGE IN ANY HEDGING TRANSACTION WITH REGARD TO THIS
SECURITY OR ANY COMMON STOCK ISSUABLE UPON CONVERSION OF THIS SECURITY EXCEPT AS
PERMITTED BY THE SECURITIES ACT.
A-2
No. _______ $
CUSIP ___________
GATX CORPORATION
7.5% CONVERTIBLE SENIOR NOTE DUE 2007
GATX Corporation promises to pay to
or registered assigns,
the principal sum of on February 1, 2007
Interest Payment Dates: February 1 and August 1, commencing August 1, 2002
Regular Record Dates: January 15 and July 15.
GATX CORPORATION
By:
----------------------------------------
Title:
Certificate of Authentication
This is one of the Convertible Senior Notes described in the within- mentioned
Indenture.
JPMORGAN CHASE BANK,
as Trustee
By:
----------------------------------------
Authorized Signatory
Dated:
A-3
(Back of Security)
A-4
GATX CORPORATION
7.5% CONVERTIBLE SENIOR NOTE DUE 2007
1. Interest. GATX Corporation, a New York corporation (the "Company"),
promises to pay interest on the principal amount of this Convertible Senior
Note at the rate per annum shown above. The Company will pay interest
semi-annually in arrears on February 1 and August 1 of each year, beginning
August 1, 2002. Interest on the Convertible Notes will accrue from the most
recent interest payment date to which interest has been paid or, if no
interest has been paid, from February 1, 2002. Interest (including any
Liquidated Damages) will be computed on the basis of a 360-day year
composed of twelve 30-day months and the actual number of days elapsed in
any partial month.
2. Method of Payment. The Company will pay interest (and Liquidated Damages,
if any) on the Convertible Notes (except defaulted interest) to the person
in whose name each Convertible Note is registered at the close of business
on the January 15 or July 15 immediately preceding the relevant interest
payment date (each a "Regular Record Date") (other than with respect to a
Convertible Note or portion thereof repurchased in connection with a
Fundamental Change on a repurchase date, during the period from the close
of business on a Regular Record Date to (but excluding) the next succeeding
interest payment date, in which case accrued interest (and Liquidated
Damages, if any) shall be payable (unless such Convertible Note or portion
thereof is converted) to the holder of the Convertible Note or portion
thereof repurchased in accordance with the applicable repurchase provisions
of the Indenture). The holder must surrender Convertible Notes to a Paying
Agent to collect principal payments. The Company will pay the principal of,
and interest (including Liquidated Damages, if any) on, the Convertible
Notes at the office or agency of the Company maintained for such purpose,
in money of the United States that at the time of payment is legal tender
for payment of public and private debts. Until otherwise designated by the
Company, the Company's office or agency maintained for such purpose will be
the principal Corporate Trust Office of the Trustee (as defined below).
However, the Company may pay principal, and interest (including Liquidated
Damages, if any) by check payable in such money, and may mail such check to
the holders of the Convertible Notes at their respective addresses as set
forth in the Register of holders of Convertible Notes.
3. Paying Agent and Registrar. JPMorgan Chase Bank (together with any
successor Trustee under the Indenture referred to below, the "Trustee"),
will act as Paying Agent and Registrar. The Company may change the Paying
Agent, Registrar or co-registrar without prior notice. Subject to certain
limitations in the Indenture, the Company or any of its subsidiaries may
act in any such capacity.
4. Indenture. The Company issued the Convertible Notes under an Indenture
dated as of February 1, 2002 (the "Indenture") by and among the Company,
the Guarantor and the Trustee. The terms of the Convertible Notes include
those stated in the Indenture and those made part of the Indenture by
reference to the Trust Indenture Act of 1939 (15 U.S. Code
(S)(S)77aaa-77bbbb) (the "TIA") as in effect on the date of the Indenture.
The Convertible Notes are subject to, and qualified by, all such terms,
certain of which are
A-5
summarized hereon, and holders are referred to the Indenture and the TIA
for a statement of such terms. The Convertible Notes are unsecured general
obligations of the Company limited to (except as otherwise provided in the
Indenture) $175,000,000 in aggregate principal amount. Capitalized terms
not defined below have the same meaning as is given them in the Indenture.
5. Fundamental Change. Upon the occurrence of a Fundamental Change, the
Company shall make a Fundamental Change Offer to repurchase all outstanding
Convertible Notes at a price equal to 100% of the aggregate principal
amount of the Convertible Notes, plus accrued and unpaid interest (and
Liquidated Damages, if any) to, but excluding, the date of repurchase, such
offer to be made as provided in the Indenture. To accept the Fundamental
Change Offer, the holder hereof must comply with the terms thereof,
including surrendering this Convertible Note, with the "Option of Holder to
Elect Repurchase" portion hereof completed, to the Company, a depositary,
if appointed by the Company, or a Paying Agent, at the address specified in
the notice of the Fundamental Change Offer mailed to holders as provided in
the Indenture, prior to termination of the Fundamental Change Offer.
6. Denominations, Transfer and Exchange. The Convertible Notes are in
registered form without coupons in denominations of $1,000 and integral
multiples of $1,000. The transfer of Convertible Notes may be registered
and Convertible Notes may be exchanged as provided in the Indenture. As a
condition of transfer, the Registrar and the Trustee may require a holder,
among other things, to furnish appropriate endorsements and transfer
documents, and the Company and the Registrar may require a holder to pay
any taxes and fees required by law or permitted by the Indenture. The
Company or the Registrar need not exchange or register the transfer of any
Convertible Note or portion of a Convertible Note submitted for repurchase.
7. Persons Deemed Owners. The registered holder of a Convertible Note may be
treated as its owner for all purposes.
8. Amendments and Waivers. Subject to certain exceptions, the Indenture or the
Convertible Notes may be amended or supplemented with the consent of the
holders of at least a majority in principal amount of the then outstanding
Convertible Notes, and any existing default may be waived with the consent
of the holders of a majority in principal amount of the then outstanding
Convertible Notes.
Without the consent of any holder, the Indenture or the Convertible Notes
may be amended to: (a) cure any ambiguity or correct or supplement any defective
or inconsistent provision contained in the Indenture, or make any other changes
in the provisions of the Indenture which the Company and the Trustee may deem
necessary or desirable provided such amendment does not materially and adversely
affect the legal rights under the Indenture of the holders of Convertible Notes;
(b) provide for uncertificated Convertible Notes in addition to or in place of
certificated Convertible Notes; (c) evidence the succession of another person to
the Company and providing for the assumption by such successor of the covenants
and obligations of the Company thereunder and in the Convertible Notes as
permitted by Section 5.1 of the Indenture; (d) provide for conversion rights
and/or repurchase rights of holders of Convertible
A-6
Notes in the event of consolidation, merger, share exchange or sale of all or
substantially all of the assets of the Company as required to comply with
Sections 5.1 and/or 11.6 of the Indenture; (e) reduce the Conversion Price; (f)
evidence and provide for the acceptance of the appointment under the Indenture
of a successor Trustee; (g) make any change that would provide any additional
rights or benefits to the holders of Convertible Notes or that does not
adversely affect the legal rights under the Indenture of any such holder; or (h)
comply with the requirements of the Commission in order to effect or maintain
the qualification of the Indenture under the TIA.
Without the consent of each holder affected, an amendment or waiver may not
(with respect to any Convertible Notes held by a non-consenting holder): (a)
reduce the principal amount of Convertible Notes whose holders must consent to
an amendment, supplement or waiver; (b) reduce the principal of or change the
fixed maturity of any Convertible Note; (c) reduce the rate of or change the
time for payment of interest, including defaulted interest, or Liquidated
Damages on any Convertible Notes; (d) waive a Default or Event of Default in the
payment of principal of, or interest or Liquidated Damages on, the Convertible
Notes (except a rescission of acceleration of the Convertible Notes by the
holders of at least a majority in aggregate principal amount of the Convertible
Notes and a waiver of the payment default that resulted from such acceleration);
(e) make the principal of, or interest or Liquidated Damages on, any Convertible
Note payable in money other than as provided for in the Indenture and in the
Convertible Notes; (f) make any change in the provisions of the Indenture
relating to waivers of past Defaults or the rights of holders of Convertible
Notes to receive payments of principal of, or interest or Liquidated Damages, on
the Convertible Notes; (g) except as permitted by the Indenture (including
Section 9.1(a)), increase the Conversion Price or modify the provisions of the
Indenture relating to conversion of the Convertible Notes in a manner adverse to
the holders thereof or (h) make any change to the ability of holder of
Convertible Notes to enforce their rights under the Indenture or the provisions
of clauses (a) through (h) of Section 9.2 of the Indenture.
9. Defaults and Remedies. An Event of Default is: (a) default in payment of
the principal of, the Convertible Notes, when due at maturity, upon
repurchase, upon acceleration or otherwise; (b) default for 30 days or more
in payment of any installment of interest or Liquidated Damages on the
Convertible Notes; (c) default by the Company for 60 days or more after
notice in the observance or performance of any other covenants in the
Indenture; (d) default in the payment of the Fundamental Change Payment in
respect of the Convertible Notes on the date therefor; (e) failure to
provide timely notice of a Fundamental Change; or (f) certain events
involving bankruptcy, insolvency or reorganization of the Company. If an
Event of Default occurs and is continuing, the Trustee or the holders of at
least 25% in principal amount of the then outstanding Convertible Notes may
declare the unpaid principal of, and accrued and unpaid interest and
Liquidated Damages, if any, on, all Convertible Notes then outstanding to
be due and payable immediately, except that in the case of an Event of
Default arising from certain events of bankruptcy, insolvency, or
reorganization with respect to the Company, all outstanding Convertible
Notes become due and payable without further action or notice. Holders of
Convertible Notes may not enforce the Indenture or the Convertible Notes
except as provided in the Indenture. The Trustee may require an indemnity
satisfactory to it before it enforces the Indenture or the Convertible
Notes. Subject to certain limitations, holders of a majority in principal
amount of the then outstanding Convertible
A-7
Notes may direct the Trustee in its exercise of any trust or power. The
Trustee may withhold from holders notice of any continuing default (except
a default in payment of principal, interest or Liquidated Damages, if
applicable) if it determines that withholding notice is in their interests.
The Company must furnish annual compliance certificates to the Trustee.
10. Guarantor. The Convertible Notes are fully and unconditionally guaranteed
by GATX Financial Corporation, a Delaware corporation, pursuant to the
terms of the Guarantee as specifically described in the Indenture.
11. Trustee Dealings with the Company and the Guarantor. The Trustee or any of
its Affiliates, in their individual or any other capacities, may make or
continue loans to or guaranteed by, accept deposits from and perform
services for the Company or the Guarantor or their respective Affiliates
and may otherwise deal with the Company or the Guarantor or their
respective Affiliates as if it were not Trustee.
12. No Recourse Against Others. No director, officer, employee, shareholder or
Affiliate, as such, of the Company or the Guarantor shall have any
liability for any obligations of the Company or the Guarantor under the
Convertible Notes or the Indenture or for any claim based on, in respect of
or by reason of such obligations or their creation. Each holder by
accepting a Convertible Note waives and releases all such liability. The
waiver and release are part of the consideration for the Convertible Notes.
13. Authentication. This Convertible Note shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating
agent.
14. Abbreviations. Customary abbreviations may be used in the name of a holder
or an assignee, such as: TEN CO = tenants in common, TEN ENT = tenants by
the entireties, JT TEN = joint tenants with right of survivorship and not
as tenants in common, CUST = Custodian and U/G/M/A = Uniform Gifts to
Minors Act.
15. Conversion. Subject to and upon compliance with the provisions of the
Indenture, the registered holder of this Convertible Note has the right at
any time on or before the close of business on the last Trading Day prior
to the Maturity Date (or in case this Convertible Note or any portion
hereof is subject to a duly completed election for repurchase, on or before
the close of business on the Fundamental Change Payment Date (unless the
Company defaults in payment due upon repurchase or such holder elects to
withdraw the submission of such election to repurchase ) to convert the
principal amount hereof, or any portion of such principal amount which is
$1,000 or an integral multiple thereof, into that number of fully paid and
non-assessable shares of common stock of the Company ("Common Stock")
obtained by dividing the principal amount of the Convertible Note or
portion thereof to be converted by the conversion price of $34.09 per
share, as adjusted from time to time as provided in the Indenture (the
"Conversion Price"), upon surrender of this Convertible Note to the Company
at the office or agency maintained for such purpose (and at such other
offices or agencies designated for such purpose by the Company),
accompanied by written notice of conversion duly executed (and if the
shares of Common Stock to be issued on conversion are to be issued in any
name other than that
A-8
of the registered holder of this Convertible Note by instruments of
transfer, in form satisfactory to the Company, duly executed by the
registered holder or its duly authorized attorney) and, in case such
surrender shall be made during the period from the close of business on the
Regular Record Date immediately preceding any Interest Payment Date through
the close of business on the last Trading Day immediately preceding such
Interest Payment Date, also accompanied by payment, in funds acceptable to
the Company, of an amount equal to the interest and Liquidated Damages, if
any, otherwise payable on such Interest Payment Date on the principal
amount of this Convertible Note then being converted. Subject to the
aforesaid requirement for a payment in the event of conversion after the
close of business on a Regular Record Date immediately preceding an
Interest Payment Date, no adjustment shall be made on conversion for
interest or Liquidated Damages accrued hereon or for dividends on Common
Stock delivered on conversion. The right to convert this Convertible Note
is subject to the provisions of the Indenture relating to conversion rights
in the case of certain consolidations, mergers, share exchanges or sales or
transfers of substantially all the Company's assets. So long as no Event of
Default shall have occurred and be continuing, the Company, at its option,
instead of delivering shares of Common Stock, may pay cash to the holder of
this Convertible Note upon conversion as provided in Article 11 of the
Indenture.
The Company shall not issue fractional shares or scrip representing
fractions of shares of Common Stock upon any such conversion, but shall pay cash
in lieu of such fractional shares in the manner described in the Indenture.
16. Registration Agreement. The holder of this Convertible Note is entitled to
the benefits of a Registration Agreement, dated as of February 1, 2002, by
and among the Company, the Guarantor and the Initial Purchasers (the
"Registration Agreement"). Pursuant to the Registration Agreement, the
Company has agreed for the benefit of the holders of the Convertible Notes
and the Common Stock issued and issuable upon conversion of the Convertible
Notes, that (i) it will, at its cost, within 90 days after the Issue Date,
file a shelf registration statement (the "Shelf Registration Statement")
with the Securities and Exchange Commission (the "Commission") with respect
to resales of the Convertible Notes and the Common Stock issuable upon
conversion thereof, (ii) the Company will use its reasonable best efforts
to cause such Shelf Registration Statement to be declared effective by the
Commission under the Securities Act within 150 days after the Issue Date
and (iii) the Company will use its reasonable best efforts to keep such
Shelf Registration Statement continuously effective under the Securities
Act until the earliest of (a) the second anniversary of the Issue Date or,
if later, the second anniversary of the last date on which any Convertible
Notes are issued upon exercise of the Initial Purchasers' over-allotment
option, (b) the date on which the Convertible Notes or the Common Stock
issuable upon conversion thereof may be sold by persons who are not
"affiliates" (as defined in Rule 144) of the Company pursuant to paragraph
(k) of Rule 144 (or any successor provision) promulgated by the Commission
under the Securities Act, (c) the date as of which all of the Convertible
Notes or the Common Stock issuable upon conversion thereof have been
transferred pursuant to Rule 144 under the Securities Act (or any similar
provision then in force) and (d) the date as of which all the Convertible
Notes or the Common Stock issuable upon conversion thereof have been sold
pursuant to such Shelf Registration Statement.
A-9
If the Shelf Registration Statement (i) is not filed with the Commission on
or prior to 90 days, or has not been declared effective by the Commission within
150 days, after the Issue Date or (ii) is filed and declared effective but shall
thereafter cease to be effective (without being succeeded immediately by a
replacement shelf registration statement filed and declared effective) or cease
to be usable (including, without limitation, as a result of a Suspension Period
as defined below) for the offer and sale of Transfer Restricted Securities (as
defined below) for a period of time (including any Suspension Period) which
shall exceed 60 days in the aggregate in any 12-month period during the period
beginning on the Issue Date and ending on the second anniversary of the Issue
Date or, if later, the second anniversary of the last date on which any
Convertible Notes are issued upon exercise of the Initial Purchasers'
over-allotment option (each such event referred to in clauses (i) and (ii) being
referred to herein as a "Registration Default"), the Company will pay liquidated
damages ("Liquidated Damages") to each holder of Transfer Restricted Securities
which has complied with its obligations under the Registration Agreement. The
amount of Liquidated Damages payable during any period in which a Registration
Default shall have occurred and be continuing is that amount which is equal to
one-quarter of one percent (25 basis points) per annum per $1,000 principal
amount of Convertible Notes and $2.50 per annum per 29.334 shares of Common
Stock (subject to adjustment from time to time in the event of a stock split,
stock recombination, stock dividend and the like) constituting Transfer
Restricted Securities for the first 90 days during which a Registration Default
has occurred and is continuing and one-half of one percent (50 basis points) per
annum per $1,000 principal amount of Convertible Notes and $5.00 per annum per
29.334 shares of Common Stock (subject to adjustment as set forth above)
constituting Transfer Restricted Securities for any additional days during which
such Registration Default has occurred and is continuing. The Company will pay
all accrued Liquidated Damages by wire transfer of immediately available funds
or by federal funds check on each Damages Payment Date (as defined in the
Registration Agreement), and Liquidated Damages will be calculated on the basis
of a 360-day year consisting of twelve 30-day months. Following the cure of a
Registration Default, Liquidated Damages will cease to accrue with respect to
such Registration Default.
"Transfer Restricted Securities" means each Convertible Note and each share
of Common Stock issued on conversion thereof until the date on which such
Convertible Note or share, as the case may be, (i) has been transferred pursuant
to the Shelf Registration Statement or another registration statement covering
such Convertible Note or share which has been filed with the Commission pursuant
to the Securities Act, in either case after such registration statement has
become and while such registration statement is effective under the Securities
Act, (ii) has been transferred pursuant to Rule 144 under the Securities Act (or
any similar provision then in force), or (iii) may be sold or transferred
pursuant to Rule 144(k) under the Securities Act (or any similar provision then
in force).
Pursuant to the Registration Agreement, the Company may suspend the use of
the prospectus which is a part of the Shelf Registration Statement for a period
not to exceed 30 days in any three-month period or for three periods not to
exceed an aggregate of 60 days in any twelve-month period under certain
circumstances (each, a "Suspension Period"); provided that the existence of a
Suspension Period will not prevent the occurrence of a Registration Default or
otherwise limit the obligation of the Company to pay Liquidated Damages.
A-10
The above description of certain provisions of the Registration Agreement
is qualified by reference to, and is subject in its entirety to, the more
complete description thereof contained in the Registration Agreement.
The Company will furnish to any holder upon written request and without
charge a copy of the Indenture and the Registration Agreement. Requests may be
made to: GATX Corporation, 000 Xxxx Xxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000-0000,
Attention: Treasurer.
A-11
FORM OF CONVERSION NOTICE
To: GATX CORPORATION
The undersigned beneficial owner of the Convertible Note hereby
irrevocably exercises the option to convert this Convertible Note, or portion
hereof (which is $1,000 or an integral multiple thereof) below designated, into
shares of Common Stock of GATX Corporation in accordance with the terms of the
Indenture referred to in this Convertible Note, and directs that the shares
issuable and deliverable upon the conversion, together with any check in payment
for fractional shares and Convertible Notes representing any unconverted
principal amount hereof, be issued and delivered to the beneficial owner hereof
unless a different name has been indicated below. If shares or any portion of
this Convertible Note not converted are to be issued in the name of a person
other than the undersigned, the undersigned will pay all transfer taxes payable
with respect thereto. Any amount required to be paid by the undersigned on
account of interest, Liquidated Damages and taxes accompanies this Convertible
Note.
Dated:
Fill in for registration of shares if to be delivered, ----------------------------------------------
and Convertible Notes if to be issued, other than
to and in the name of the beneficial owner ----------------------------------------------
(Please Print):
----------------------------------------------
Signature(s)
Principal amount to be converted (if less than
------------------------------------------------------ all);
(Name) ----------------------------------------------
$___,000
------------------------------------------------------
(Street Address) ----------------------------------------------
Social Security or other Taxpayer Identification
------------------------------------------------------ Number
(City, State and Zip Code)
Signature Guarantee:
--------------------------------------------
Signatures must be guaranteed by an eligible Guarantor Institution (banks,
brokers, dealers, savings and loan associations and credit unions) with
membership in an approved signature guarantee medallion program pursuant to
Securities and Exchange Commission Rule 17Ad-15 if shares are to be issued, or
Convertible Notes are to be delivered, other than to and in the name of the
registered holder(s).
A-12
ASSIGNMENT FORM
To assign this Convertible Note, fill in the form below:
(I) or (we) assign and transfer this Convertible Note to
--------------------------------------------------------------------------------
(Insert assignee's social security or tax I.D. no.)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint ____________________________________ agent to transfer
this Convertible Note on the books of the Company. The agent may substitute
another to act for him.
Your Signature: _______________________________________________
(Sign exactly as your name appears on the other
side of this Convertible Note)
Date: ________________________________
Medallion Signature Guarantee: _____________________________________
[FOR INCLUSION ONLY IF THIS CONVERTIBLE NOTE BEARS A RESTRICTED SECURITIES
LEGEND] In connection with any transfer of any of the Convertible Notes
evidenced by this certificate which are "restricted securities" (as defined in
Rule 144 (or any successor thereto) under the Securities Act), the undersigned
confirms that such Convertible Notes are being transferred:
CHECK ONE BOX BELOW
(1) [_] to the Company; or
(2) [_] pursuant to and in compliance with Rule 144A under the
Securities Act of 1933; or
(3) [_] pursuant to and in compliance with Regulation S under
the Securities Act of 1933; or
(4) [_] pursuant to an exemption from registration under the
Securities Act of 1933 provided by Rule 144 thereunder.
A-13
Unless one of the boxes is checked, the Registrar will refuse to register any of
the Convertible Notes evidenced by this certificate in the name of any person
other than the registered holder thereof; provided, however, that if box (3) or
(4) is checked, the Trustee may require, prior to registering any such transfer
of the Convertible Notes, such certifications and other information, and if box
(4) is checked such legal opinions, as the Company has reasonably requested in
writing, by delivery to the Trustee of a standing letter of instruction, 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
of 1933; provided that this paragraph shall not be applicable to any Convertible
Notes which are not "restricted securities" (as defined in Rule 144 (or any
successor thereto) under the Securities Act).
Your Signature:
-----------------------------------------------------
(Sign exactly as your name appears on the
other side of this Convertible Note)
Date:
------------------------
Medallion Signature Guarantee:
------------------------------
A-14
OPTION OF HOLDER TO ELECT REPURCHASE
If you wish to have this Convertible Note repurchased by the Company
pursuant to Section 4.6 of the Indenture, check the Box: [ ]
If you wish to have a portion of this Convertible Note purchased by the
Company pursuant to Section 4.6 of the Indenture, state the amount (in multiples
of $1,000): $_____.
Date: Your Signature:
------------ --------------------------------------------
(Sign exactly as your name appears on the other side of
this Convertible Note)
Medallion Signature Guarantee:
--------------------------------------------------
A-15
EXHIBIT B
FORM OF RESTRICTED COMMON STOCK LEGEND
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"). THE HOLDER HEREOF, BY PURCHASING THIS SECURITY,
AGREES FOR THE BENEFIT OF THE COMPANY THAT THIS SECURITY MAY NOT BE RESOLD,
PLEDGED OR OTHERWISE TRANSFERRED (X) PRIOR TO THE SECOND ANNIVERSARY OF THE
ISSUANCE HEREOF (OR ANY PREDECESSOR SECURITY HERETO) OR (Y) BY ANY HOLDER THAT
WAS AN "AFFILIATE" (WITHIN THE MEANING OF RULE 144 UNDER THE SECURITIES ACT) OF
THE COMPANY AT ANY TIME DURING THE THREE MONTHS PRECEDING THE DATE OF SUCH
TRANSFER, IN EITHER CASE OTHER THAN (1) TO THE COMPANY, (2) SO LONG AS THIS
SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT
("RULE 144A"), TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A, PURCHASING FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS
GIVEN THAT THE RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON
RULE 144A, (3) IN AN OFFSHORE TRANSACTION (AS DEFINED IN REGULATION S UNDER THE
SECURITIES ACT) IN ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT, (4)
PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY
RULE 144 (IF APPLICABLE) UNDER THE SECURITIES ACT OR (5) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH CASE IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES. THE HOLDER HEREOF, BY PURCHASING THIS SECURITY, REPRESENTS AND AGREES
FOR THE BENEFIT OF THE COMPANY THAT IT IS (1) A QUALIFIED INSTITUTIONAL BUYER OR
(2) NOT A U.S. PERSON AND IS OUTSIDE THE UNITED STATES WITHIN THE MEANING OF (OR
AN ACCOUNT SATISFYING THE REQUIREMENTS OF PARAGRAPH (k)(2) OF RULE 902 UNDER)
REGULATION S UNDER THE SECURITIES ACT. IN ANY CASE THE HOLDER HEREOF WILL NOT,
DIRECTLY OR INDIRECTLY, ENGAGE IN ANY HEDGING TRANSACTION WITH REGARD TO THIS
SECURITY EXCEPT AS PERMITTED BY THE SECURITIES ACT."
B-1
EXHIBIT C
FORM OF TRANSFER CERTIFICATE FOR TRANSFER
OF RESTRICTED COMMON STOCK
(Transfers pursuant to Section 11.11(c) of the Indenture)
[NAME AND ADDRESS OF COMMON STOCK TRANSFER AGENT]
Re: GATX Corporation 7.5% Convertible Notes
due 2007 (the "Convertible Notes")
Reference is hereby made to the Indenture dated as of February 1, 2002 (the
"Indenture") by and among GATX Corporation, GATX Financial Corporation and
JPMorgan Chase Bank, as Trustee. Capitalized terms used but not defined herein
shall have the meanings given them in the Indenture.
This letter relates to shares of Common Stock represented by the
accompanying certificate(s) that were issued upon conversion of Convertible
Notes and which are held in the name of [name of transferor] (the "Transferor")
to effect the transfer of such Common Stock.
In connection with the transfer of such shares of Common Stock, the
undersigned confirms that such shares of Common Stock are being transferred:
CHECK ONE BOX BELOW
(1) [ ] to the Company; or
(2) [ ] pursuant to and in compliance with Rule 144A under the
Securities Act of 1933; or
(3) [ ] pursuant to and in compliance with Regulation S under
the Securities Act of 1933; or
(4) [ ] pursuant to an exemption from registration under the
Securities Act of 1933 provided by Rule 144 thereunder.
C-1
Unless one of the boxes is checked, the transfer agent will refuse to
register any of the Common Stock evidenced by this certificate in the name of
any person other than the registered holder thereof; provided, however, that if
box (3) or (4) is checked, the transfer agent may require, prior to registering
any such transfer of the Common Stock such certifications and other information,
and if box (4) is checked such legal opinions, as the Company has reasonably
requested in writing, by delivery to the transfer agent of a standing letter of
instruction, 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 of 1933.
[Name of Transferor],
By
--------------------------------
Name:
-----------------------------
Title:
----------------------------
Dated:
C-2
