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EXHIBIT 4.5
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BEC GROUP, INC.
8% Convertible Subordinated Notes Due 2002
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INDENTURE
Dated as of May 3, 1996
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IBJ XXXXXXXX BANK & TRUST COMPANY,
Trustee
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TABLE OF CONTENTS(1)
Page
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Parties.................................................................. 1
Recitals of the Company...................................................1
ARTICLE ONE
Definitions and Other Provisions of General Application
SECTION 101. Definitions...............................................1
Act...................................................................2
Acquiring Person......................................................2
Affiliate.............................................................3
applicants............................................................3
Authenticating Agent..................................................3
Board of Directors....................................................4
Board Resolution......................................................4
Business Day..........................................................4
Capitalized Lease Obligation..........................................4
Capital Stock.........................................................4
Change of Control.....................................................4
Change of Control Exercise Notice.....................................5
Change of Control Notice..............................................5
Commission............................................................5
Common Stock..........................................................5
Company...............................................................5
Company Request or Company Order......................................5
Conversion Agent......................................................6
Conversion Notice.....................................................6
Conversion Price......................................................6
Corporate Trust Office................................................6
corporation...........................................................6
Daily Market Price....................................................6
Defaulted Interest....................................................6
Disqualified Stock....................................................6
Dollars and '$'.......................................................7
Event of Default......................................................7
Exchange Act:.........................................................7
Expiration Time.......................................................7
Guarantee.............................................................7
Hedging Obligations...................................................7
Holder................................................................7
Incur.................................................................7
Indebtedness..........................................................8
Indenture.............................................................8
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(1) This table of contents shall not, for any purpose, be deemed to be a part
of the Indenture.
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Interest Payment Date..................................................9
Lien...................................................................9
non-electing share.....................................................9
Notes..................................................................9
Note Register and Note Registrar.......................................9
Notice of Redemption...................................................9
Officers' Certificate..................................................9
Opinion of Counsel.....................................................9
Outstanding............................................................9
Paying Agent..........................................................10
Payment Dates.........................................................10
Permitted Holders.....................................................10
Person................................................................10
Predecessor Note......................................................10
Preferred Stock.......................................................10
Publicly Traded Securities............................................11
Purchase Date.........................................................11
Purchased Shares......................................................11
Redeemable Stock......................................................11
Redemption Date.......................................................11
Redemption Price......................................................11
Responsible Officer...................................................11
Senior Indebtedness...................................................11
Senior Subordinated Indebtedness......................................12
Special Record Date...................................................12
Stated Maturity.......................................................12
Subordinated Obligation...............................................12
Subsidiary............................................................12
Time of Determination.................................................12
Trade Payables........................................................13
Trust Indenture Act...................................................13
Trustee...............................................................13
Vice President........................................................13
Voting Stock..........................................................13
SECTION 102. Compliance Certificates and Opinions.....................13
SECTION 103. Form of Documents Delivered to Trustee...................14
SECTION 104. Acts of Holders..........................................14
SECTION 105. Notices, Etc., to Trustee and Company....................15
SECTION 106. Notice to Holders; Waiver................................15
SECTION 107. Conflict with Trust Indenture Act........................16
SECTION 108. Effect of Headings and Table of Contents.................16
SECTION 109. Successors and Assigns...................................16
SECTION 110. Separability Clause......................................16
SECTION 111. Benefits of Indenture....................................16
SECTION 112. GOVERNING LAW............................................17
SECTION 113. Legal Holidays...........................................17
SECTION 114. Execution in Counterparts................................17
SECTION 115. No Security Interest Created.............................17
ARTICLE TWO
Note Forms
(ii)
4
SECTION 201. Forms Generally..........................................17
SECTION 202. Form of Face of Note.....................................18
SECTION 203. Form of Reverse of Note..................................19
SECTION 204. Form of Trustee's Certificate of
Authentication ........................................25
SECTION 205. Form of Conversion Notice................................25
SECTION 206. Form of Assignment.......................................26
ARTICLE THREE
The Notes
SECTION 301. Designation, Amount and Issue of Notes...................27
SECTION 302. Denominations, Dates, Interest Payment
and Regular Record Dates...............................27
SECTION 303. Execution, Authentication and Delivery of
Notes..................................................28
SECTION 304. Temporary Notes..........................................28
SECTION 305. Exchange and Registration of Transfer
of Notes...............................................29
SECTION 306. Mutilated, Destroyed, Lost and Stolen
Notes..................................................30
SECTION 307. Payment of Interest; Interest Rights
Preserved..............................................31
SECTION 308. Persons Deemed Owners....................................31
SECTION 309. Cancellation.............................................32
SECTION 310. CUSIP Numbers............................................32
ARTICLE FOUR
Satisfaction and Discharge
SECTION 401. Satisfaction and Discharge of Indenture..................32
SECTION 402. Application of Trust Money...............................33
ARTICLE FIVE
Remedies
SECTION 501. Events of Default........................................34
SECTION 502. Acceleration of Maturity, Rescission and
Annulment..............................................35
SECTION 503. Collection of Indebtedness and Suits for
Enforcement by Trustee.................................36
SECTION 504. Trustee May File Proofs of Claim.........................37
SECTION 505. Trustee May Enforce Claims Without
Possession of Notes....................................38
SECTION 506. Application of Money or Other Property
Collected..............................................38
SECTION 507. Limitation on Suits......................................39
(iii)
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SECTION 508. Right of Holders To Convert and To
Receive Principal, Premium and
Interest...............................................39
SECTION 509. Restoration of Rights and Remedies.......................40
SECTION 510. Rights and Remedies Cumulative...........................40
SECTION 511. Delay or Omission Not Waiver.............................40
SECTION 512. Control by Holders.......................................40
SECTION 513. Waiver of Past Defaults..................................41
SECTION 514. Undertaking for Costs....................................41
SECTION 515. Waiver of Stay or Extension Laws.........................41
ARTICLE SIX
The Trustee
SECTION 601. Certain Duties and Responsibilities......................42
SECTION 602. Notice of Defaults.......................................43
SECTION 603. Certain Rights of Trustee................................43
SECTION 604. Not Responsible for Recitals or Issuance
of Notes...............................................44
SECTION 605. May Hold Notes...........................................44
SECTION 606. Money Held in Trust......................................45
SECTION 607. Compensation and Reimbursement...........................45
SECTION 608. Disqualification; Conflicting Interests..................46
SECTION 609. Corporate Trustee Required; Eligibility..................46
SECTION 610. Resignation and Removal; Appointment of
Successor..............................................46
SECTION 611. Acceptance of Appointment by Successor...................48
SECTION 612. Merger, Conversion, Consolidation or
Succession to Business.................................48
SECTION 613. Preferential Collection of Claims Against
Company...............................................49
SECTION 614. Appointment of Authenticating Agent......................49
ARTICLE SEVEN
Holders' Lists and Reports by Trustee and Company
SECTION 701. Company To Furnish Trustee Names and
Addresses of Holders...................................50
SECTION 702. Preservation of Information;
Communications to Holders..............................51
SECTION 703. Reports by Trustee.......................................52
SECTION 704. Reports by Company.......................................52
SECTION 705. Reports by Note Registrar................................53
ARTICLE EIGHT
Consolidation, Merger, Conveyance, Transfer, Sale or Lease
SECTION 801. Company May Consolidate, Etc., on Certain
Terms..................................................54
(iv)
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SECTION 802. Successor Corporation Substituted.......................55
ARTICLE NINE
Supplemental Indentures
SECTION 901. Supplemental Indentures Without Consent
of Holders.............................................55
SECTION 902. Supplemental Indentures with Consent of
Holders................................................56
SECTION 903. Execution of Supplemental Indentures.....................57
SECTION 904. Effect of Supplemental Indentures........................57
SECTION 905. Conformity with Trust Indenture Act......................58
SECTION 906. Reference in Notes to Supplemental
Indentures.............................................58
ARTICLE TEN
Covenants
SECTION 1001. Payment of Principal, Premium and
Interest..............................................58
SECTION 1002. Office for Notices Payments and
Conversions, Etc......................................58
SECTION 1003. Money for Notes Payments To Be Held in
Trust.................................................59
SECTION 1004. Appointments To Fill Vacancies in
Trustee's Office......................................60
SECTION 1005. Corporate Existence.....................................60
SECTION 1006. Payment of Taxes and Other Claims.......................60
SECTION 1007. Further Instruments and Acts............................61
ARTICLE ELEVEN
Redemption of Notes
SECTION 1101. Redemption of Notes.....................................61
SECTION 1102. Notice of Redemption; Selection of Notes................61
SECTION 1103. Payment of Notes Called for Redemption;
Notes Redeemed in Part................................63
ARTICLE TWELVE
Conversion of Notes
SECTION 1201. Conversion Privilege; Manner of Exercise
of Conversion Privilege...............................64
SECTION 1202. Mandatory Conversion....................................65
SECTION 1203. Cash Payments in Lieu of Fractional
Shares................................................66
SECTION 1204. Adjustment of Conversion Price..........................66
(v)
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SECTION 1205. Notice to Holders Prior to Certain
Corporate Actions.....................................73
SECTION 1206. Reservation of Shares of Common Stock...................74
SECTION 1207. Taxes upon Conversion...................................74
SECTION 1208. Covenants as to Common Stock............................74
SECTION 1209. Consolidation or Merger or Sale of
Assets................................................75
SECTION 1210. Disclaimer of Responsibility for Certain
Matters...............................................76
SECTION 1211. Cancellation of Converted Notes.........................76
SECTION 1212. Voluntary Reduction.....................................76
ARTICLE THIRTEEN
Subordination of Notes
SECTION 1301. Notes Subordinated to Senior
Indebtedness..........................................76
SECTION 1302. Company Not To Make Payments with
Respect to Notes in Certain
Circumstances.........................................77
SECTION 1303. Notes Subordinated to Prior Payment of
All Senior Indebtedness on
Dissolution, Liquidation or
Reorganization of Company.............................78
SECTION 1304. Noteholders To Be Surrogated to Right of
Holders of Senior Indebtedness........................79
SECTION 1305. Obligation of the Company Unconditional.................80
SECTION 1306. Trustee Entitled To Assume Payments Not
Prohibited in Absence of Notice.......................80
SECTION 1307. Application by Trustee of Monies
Deposited with It.....................................80
SECTION 1308. Subordination Rights Not Impaired by
Acts or Omissions of Company or
Holders of Senior Indebtedness........................81
SECTION 1309. Noteholders Authorize Trustee To
Effectuate Subordination of Notes.....................81
SECTION 1310. Right of Trustee To Hold Senior
Indebtedness; Compensation Not
Prejudiced............................................81
SECTION 1311. Article Thirteen Not To Prevent Events
of Default............................................82
SECTION 1312. Article Applicable to Paying Agent......................82
ARTICLE FOURTEEN
Immunity of Incorporators, Stockholders, Officers and Directors.......82
SECTION 1401. Indenture and Notes Solely Corporate
Obligations...........................................82
ARTICLE FIFTEEN
(vi)
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Purchase by Company at the Option of Holders upon the Occurrence
of a Change of Control
SECTION 1501. Right of Holders upon the Occurrence of
a Change of Control...................................82
SECTION 1502. Change of Control Notice................................83
SECTION 1503. Change of Control Exercise Notice.......................84
SECTION 1504. Effect of Exercise and Other Matters....................85
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INDENTURE, dated as of May 3, 1996, between BEC GROUP, INC., a
corporation duly organized and existing under the laws of the State of Delaware
(herein called the "Company"), having its principal office at Suite B-302, 555
Xxxxxxxx Xxxxx Xxxxxx, Xxx, Xxx Xxxx 00000 and IBJ XXXXXXXX BANK & TRUST
COMPANY, as Trustee (the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the creation and issue of its 8%
Convertible Subordinated Notes due 2002 (hereinafter sometimes called the
"Notes") in an aggregate principal amount not to exceed $23,000,000 and, to
provide the terms and conditions upon which the Notes are to be authenticated,
issued and delivered, the Company has duly authorized the execution and
delivery of this Indenture; and
All things necessary to make the Notes, when executed by the
Company and authenticated and delivered hereunder and duly issued by the
Company, the valid obligations of the Company, and to make this Indenture a
valid agreement of the Company, in accordance with their and its terms, have
been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Notes by the Holders thereof, it is mutually covenanted and agreed, for the
equal and proportionate benefit of all Holders of the Notes, as follows:
ARTICLE ONE
Definitions and Other Provisions
of General Application
SECTION 101. Definitions.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings
assigned to them in this Article and include the plural as well as the
singular;
(2) all other terms used herein which are defined in the
Trust Indenture Act (as hereinafter defined), either directly or by
reference therein, have the meanings assigned to them therein;
(3) all accounting terms not otherwise defined herein have
the meanings assigned to them in accordance with generally accepted
accounting principles, and, except as otherwise herein expressly
provided, the term "generally
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accepted accounting principles" with respect to any computation required
or permitted hereunder shall mean such accounting principles as are
generally accepted at the date of such computation; and
(4) the words "herein", "hereof" and "hereunder" and other
words of similar import refer to this Indenture as a whole and not to
any particular Article, Section or other subdivision.
"Act", with respect to any Holder, has the meaning specified in
section 104.
"Acquiring Person" means any person (as defined in Section 13(d)(3)
or 14(d)(2) of the Exchange Act) who or which, together with all
affiliates and associates (each as defined in Rule 12b-2 under the Exchange
Act), becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 under
the Exchange Act and as further defined below) of shares of Common Stock or
other voting securities of the Company having more than 35% of the total voting
power of the Voting Stock of the Company; provided, however, that an Acquiring
Person shall not include (i) the Company, (ii) any Subsidiary of the Company,
(iii) any Permitted Holder, (iv) an underwriter engaged in a firm commitment
underwriting in connection with a public offering of the Voting Stock of the
Company or (v) any current or future employee or director benefit plan of the
Company or any Subsidiary of the Company or any entity holding Common Stock of
the Company for or pursuant to the terms of any such plan; provided further,
however, that no person shall be an Acquiring Person as long as the Permitted
Holders beneficially own a greater percentage of the total voting power of the
Voting Stock of the Company than such other person beneficially owns.
Notwithstanding the foregoing, no person shall become an Acquiring Person as the
result of (A) a reverse stock split or (B) an acquisition of Common Stock by the
Company, in either case which, by reducing the number of shares outstanding,
increases the proportionate number of shares beneficially owned by such person
to more than 35% of the Common Stock of the Company then outstanding; provided,
however, that if a person shall become the beneficial owner of 35% or more of
the Common Stock of the Company then outstanding by reason of a reverse stock
split or share purchases by the Company and shall, after such reverse stock
split or share purchases by the Company, become the beneficial owner of any
additional shares of Common Stock of the Company (except through the receipt or
the exercise - of stock options after such reverse stock split or purchases by
the Company, so long as (i) the stock options were granted pursuant to an
employee or director benefit plan approved by stockholders and (ii) the
aggregate number of shares so acquired or subject to such options by any person
does not exceed 10% of the number of shares of Common Stock outstanding
immediately after such stock split or purchases by the Company), then such
person shall be deemed to be an Acquiring Person. For purposes hereof (A) a
person shall be deemed to have
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beneficial ownership of all shares that any such person has the right to
acquire, whether such right is exercisable immediately or only after the
passage of time, (B) the Permitted Holders shall be deemed to beneficially own
any Voting Stock of a corporation (the "specified corporation") held by any
other corporation (the "parent corporation") so long as the Permitted Holders
beneficially own (as defined in Rules 13d-3 and 13d-5 under the Exchange Act)
directly or indirectly, in the aggregate a majority of the total voting power
of the Voting Stock of the parent corporation and (C) such other person shall
be deemed to beneficially own any Voting Stock of a specified corporation held
by a parent corporation, if such other person beneficially owns (as defined in
Rules 13d-3 and 13d-5 under the Exchange Act and clause (A) above), directly or
indirectly, more than 35% of the voting power of the Voting Stock of such
parent corporation and the Permitted Holders beneficially own (as defined in
clause (B) above), directly or indirectly, in the aggregate a lesser percentage
of the voting power of the Voting Stock of such parent corporation than such
other person beneficially owns (as defined in Rules 13d-3 and 13d-5 under the
Exchange Act and clause (A) above) or do not have the right or ability by
voting power, contract or otherwise to elect or designate for election a
majority of the board of directors of such parent corporation. For purposes
hereof, a person shall not be deemed to be the beneficial owner of (A) any
securities tendered pursuant to a tender or exchange offer made by or on behalf
of such person or any of such person's affiliates until such tendered
securities are accepted for purchase or exchange thereunder, or (B) any
securities if such beneficial ownership (1) arises solely as a result of a
revocable proxy delivered in response to a proxy or consent solicitation made
pursuant to the applicable rules and regulations under the Exchange Act, and
(2) is not also then reportable on Schedule 13D (or any successor schedule)
under the Exchange Act.
"Affiliate" of any specified Person means any other Person directly
or indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control"
when used with respect to any specified Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" shall have the meanings correlative to the
foregoing.
"applicants" has the meaning specified in Section 702.
"Authenticating Agent" means any Person authorized by the Trustee
to act on behalf of the Trustee to authenticate Notes.
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"Board of Directors" means either the board of directors of the
Company or any duly authorized committee of the board of directors of the
Company.
"Board Resolution" means a copy of a resolution certified by the
Secretary or any Assistant Secretary of the Company to have been duly adopted
by the Board of Directors and to be in full force and effect on the date of
such certification, and delivered to the Trustee.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday that is not a day on which banking institutions in The Borough of
Manhattan, the City and State of New York, are authorized or obligated by law
to close.
"Capitalized Lease Obligation" means an obligation that is required
to be classified and accounted for as a capitalized lease for financial
reporting purposes in accordance with generally accepted accounting principles;
and the amount of Indebtedness represented by such obligation shall be the
capitalized amount of such obligation determined in accordance with generally
accepted accounting principles; and the Stated Maturity thereof shall be the
date of the last payment of rent or any other amount due under such lease prior
to the first date upon which such lease may be terminated by the lessee without
payment of a penalty.
"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, including any
Preferred Stock, but excluding any debt securities convertible into such
equity.
"Change of Control" means any or all of the following events:
(a) the assets of the Company shall be sold as, or
substantially as, an entirety to any Person or related group of Persons;
(b) there shall be consummated any consolidation or merger of
the Company (1) in which the Company is not the continuing or surviving
corporation (other than a consolidation or merger with a wholly owned
subsidiary of the Company in which all shares of Common Stock
outstanding immediately prior to the effectiveness thereof are changed
into or exchanged for the same consideration) or (2) pursuant to which
the Common Stock would be converted into cash, securities or other
property, in each case other than a consolidation or merger of the
Company in which the holders of the Common Stock immediately prior to
the consolidation or merger have, directly or indirectly, at least a
majority of the common stock of the continuing or
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surviving corporation immediately after such consolidation or merger; or
(c) any Person shall have become an Acquiring Person.
Notwithstanding anything to the contrary set forth in this
definition, a Change of Control shall not be deemed to have occurred under
paragraphs (a), (b) and (c) above if either (1) the Daily Market Price of the
Common Stock for any five trading days during the ten trading days immediately
preceding the Change of Control is at least equal to 105% of the Conversion
Price in effect immediately preceding the time of such Change of Control or (2)
the consideration, in the transaction giving rise to such Change of Control, to
the holders of Common Stock consists of cash, Publicly Traded Securities or a
combination of cash and Publicly Traded Securities, and the aggregate fair
market value of such consideration (which, in the case of Publicly Traded
Securities, shall be equal to the average of the Daily Market Prices of such
Publicly Traded Securities during the ten consecutive trading days commencing
with the sixth trading day following consummation of such transaction) is at
least 105% of the Conversion Price in effect on the date immediately preceding
the closing date of such transaction.
"Change of Control Exercise Notice" has the meaning specified in
Section 1502.
"Change of Control Notice" has the meaning specified in Section
1501.
"Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Exchange Act, or, if at any time
after the execution of this instrument such commission is not existing and
performing the duties now assigned to it, then the body performing such duties
at such time.
"Common Stock" means the Common Stock, $.0l par value per share,
of the Company as the same exists at the date of the execution of this Indenture
or as such stock may be constituted from time to time.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor corporation shall have become
such pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor corporation.
"Company Request" or "Company Order" means a written request or
order signed in the name of the Company by the Chairman of the Board, the
President or any Vice President, and by the Treasurer, any Assistant Treasurer,
the Controller, any Assistant Controller, the Secretary or any Assistant
Secretary, of the Company, and delivered to the Trustee.
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"Conversion Agent" means any Person authorized by the Company to
accept Notes for conversion pursuant to this Indenture and deliver shares of
Common Stock (or other securities or property) deliverable upon such conversion.
"Conversion Notice" has the meaning specified in Section 1202.
"Conversion Price" means the initial conversion price specified in
the form of Note set forth in Article Two, as adjusted in accordance with the
provisions of Article Twelve.
"Corporate Trust Office" means the principal office of the Trustee
at which at any particular time its corporate trust business shall be
administered.
"corporation" includes corporations, associations, companies and
business trusts.
"Daily Market Price" when used with reference to the Common Stock or
another security means the price of a share of Common Stock or such other
security on the relevant date, determined (a) on the basis of the last reported
sale price regular way of the Common Stock or such other security (i) as
reported on the composite tape, or similar reporting system, for issues listed
on the American Stock Exchange (or if the Common Stock or such other security
is not then listed on that Exchange, for issues listed on such other national
securities exchange upon which the Common Stock or such other security is
listed as may be designated by the Board of Directors from time to time for the
purposes hereof) or (ii) if the Common Stock or such other security is not
listed or admitted to trading on any national securities exchange, as reported
on the National Market System of the National Association of Securities Dealers
Automated Quotation System ("Nasdaq"), or (b) if there is no such reported sale
on the day in question, on the basis of the average of the closing bid and
asked quotations regular way as so reported, or (c) if the Common Stock or such
other security is not listed on any national securities exchange or on the
Nasdaq National Market, on the basis of the average of the high bid and low
asked quotations regular way on the day in question in the over-the-counter
market as reported by Nasdaq, or if not so quoted, as reported by National
Quotation Bureau, Incorporated, or a similar organization.
"Defaulted Interest" has the meaning specified in Section 307.
"Disqualified Stock" of a Person means Redeemable Stock of such
Person as to which the maturity, mandatory redemption, conversion or exchange or
redemption at the option of the holder thereof occurs, or may occur, on or prior
to the first anniversary of the Stated Maturity of the Notes.
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"Dollars" and "$" means the lawful money of the United States of
America.
"Event of Default" has the meaning specified in Section 501.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Expiration Time" has the meaning specified in Section 1204(g) .
"Guarantee" means any obligation, contingent or otherwise, of any
Person directly or indirectly guaranteeing any Indebtedness or other obligation
of any other Person and any obligation, direct or indirect, contingent or
otherwise, of such Person (i) to purchase or pay (or advance or supply funds
for the purchase or payment of) such Indebtedness or other obligation of such
other Person (whether arising by virtue of partnership arrangements, or by
agreement to keep well, to purchase assets, goods, securities or services, to
take-or-pay, or to maintain financial statement conditions or otherwise) or
(ii) entered into for purposes of assuring in any other manner the obligee of
such Indebtedness or other obligation of the payment thereof or to protect such
obligee against loss in respect thereof (in whole or in part); provided,
however, that the term "Guarantee" shall not include endorsements for
collection or deposit in the ordinary course of business. The term "Guarantee"
used as a verb has a corresponding meaning.
"Hedging Obligations" of any Person means the obligations of such
Person pursuant to any currency swap protection agreement, interest rate
protection agreement or other similar agreement.
"Holder" or "Noteholder" means a person in whose name a Note is
registered in the Note Register.
"Incur" means issue, assume, Guarantee, incur or otherwise become
liable for; provided, however, that any Indebtedness or Capital Stock of a
Person existing at the time such Person becomes a Subsidiary (whether by merger,
consolidation, acquisition or otherwise) shall be deemed to be incurred by such
Subsidiary at the time it becomes a subsidiary. The terms "Incurred",
"Incurrence" and "Incurring" shall each have a correlative meaning.
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"Indebtedness" means, with respect to any Person on any date of
determination (without duplication),
(i) the principal of and premium, if any, in respect of
indebtedness of such Person for borrowed money;
(ii) the principal of and premium, if any, in respect of
obligations of such Person evidenced by bonds, debentures, notes or
other similar instruments;
(iii) all Capitalized Lease Obligations of such Person;
(iv) all obligations of such Person to pay the deferred and
unpaid purchase price of property or services (except Trade Payables),
which purchase price is due more that six months after the date of
placing such property in service or taking delivery and title thereto or
the completion of such services;
(v) all obligations of such Person in respect of letters of
credit, banker's acceptances or other similar instruments or credit
transactions (including reimbursement obligations with respect thereto);
(vi) the amount of all obligations of such Person with respect
to the redemption, repayment or other repurchase of any Disqualified
Stock or, with respect to any Subsidiary, any Preferred Stock (but
excluding, in each case, any accrued dividends);
(vii) all Indebtedness of other Persons secured by a Lien on
any asset of such Person, whether or not such Indebtedness is assumed by
such Person; Provided, however, that the amount of such Indebtedness
shall be the lesser of (A) the fair market value of such asset at such
date of determination and (B) the amount of such Indebtedness of such
other Persons;
(viii) all Indebtedness of other Persons to the extent
Guaranteed by such Person; and
(ix) to the extent not otherwise included in this definition,
obligations in respect of Hedging obligations.
The amount of Indebtedness of any Person at any date shall be the
outstanding balance at such date of all unconditional obligations as described
above and the maximum liability, upon the occurrence of the contingency giving
rise to the obligation, of any contingent obligations at such date.
"Indenture" means this instrument as originally executed or, if
amended or supplemented as herein provided, as so amended or supplemented.
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"Interest Payment Date" has the meaning specified in Section 302.
"Lien" means any mortgage, pledge, security interest, encumbrance,
lien or charge of any kind (including any conditional sale or other title
retention agreement or lease in the nature thereof).
"non-electing share" has the meaning specified in Section 1209.
"Notes" means any Notes authenticated and delivered under this
Indenture.
"Note Register" and "Note Registrar" have the respective meanings
specified in Section 305.
"Notice of Redemption" has the meaning specified in Section 1102.
"Officers' Certificate" means a certificate signed by the Chairman
of the Board, the President or any Vice President and by the Treasurer, any
Assistant Treasurer, the Controller, any Assistant Controller, the Secretary or
any Assistant Secretary of the Company and delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may
be an employee of or counsel for the Company.
"Outstanding", when used with respect to Notes, means, as of the
date of determination, all Notes theretofore authenticated and delivered under
this Indenture, except
(i) any Notes theretofore canceled by the Trustee or delivered
to the Trustee for cancellation;
(ii) any Notes or portions thereof for whose payment or
redemption money in the necessary amount shall have been deposited with
the Trustee or with any Paying Agent (other than the Company) in trust
or shall have been set aside and segregated in trust by the Company (if
the Company shall act as its own Paying Agent) for Holders of the Notes;
provided that, if such Notes or portions are to be redeemed prior to the
maturity thereof, notice of such redemption shall have been duly given
pursuant to this Indenture or provision therefor has been made pursuant
to this Indenture;
(iii) any Notes paid pursuant to Section 306, or in exchange for
or in lieu of which other Notes have been authenticated and delivered
pursuant to this Indenture, other than any such Notes in respect of
which there shall have been presented to the Trustee an Opinion of
Counsel that such Notes are held by a bona fide purchaser in whose hands
such Notes are valid obligations of the Company; and
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(iv) Notes converted into Common Stock pursuant to Article Twelve
hereof;
provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Notes have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Notes owned by
the Company or any other obligor upon the Notes or any Affiliate of the Company
or of such other obligor shall be disregarded and deemed not to be Outstanding,
except that, in determining whether the Trustee shall be protected in relying
upon any such request, demand, authorization, direction, notice, consent or
waiver, only Notes which the Trustee knows to be so owned shall be so
disregarded. Notes so owned which have been pledged in good faith may be
regarded as outstanding if the pledgee delivers an opinion of Counsel to the
Trustee establishing the pledgee's right so to act with respect to such Notes
and that the pledgee is not the Company or any other obligor upon the Notes or
any Affiliate of the Company or of such other obligor.
"Paying Agent" means any Person authorized by the Company to pay the
principal of and premium, if any, and interest on any Notes on behalf of the
Company.
"Payment Dates" shall have the meaning specified in Section 705.
"Permitted Holders" means, collectively, Xxxxxx X. Xxxxxxxx and his
estate, spouse, ancestors, and lineal descendants (and spouses thereof), the
legal representatives of any of the foregoing and the trustee of any bona fide
trust of which one or more of the foregoing are the sole beneficiaries or the
grantors, or any Person of which any of the foregoing, individually or
collectively, beneficially own (as defined in Rules 13d-3 and 13d-5 under the
Exchange Act) voting securities representing at least a majority of the total
voting power of all classes of Capital Stock of such Person (exclusive of any
matters as to which class voting rights exist).
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Predecessor Note" of any particular Note means every previous Note
evidencing all or a portion of the same debt as that evidenced by such
particular Note; and, for the purposes of this definition, any Note
authenticated and delivered under Section 306 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Note shall be deemed to evidence the same
debt as the mutilated, destroyed, lost or stolen Note.
"Preferred Stock", as applied to the Capital Stock of any
corporation, means Capital Stock of any class or classes
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(however designated) which is preferred as to the payment of dividends, or as
to the distribution of assets upon any voluntary or involuntary liquidation or
dissolution of such corporation, over shares of Capital Stock of any other
class of such corporation.
"Publicly Traded Securities" means securities that are, or
immediately upon issuance will be, listed on a national securities exchange or
quoted in the Nasdaq National Market.
"Purchase Date" has the meaning specified in Section 1501.
"Purchased Shares" has the meaning specified in Section 1204(g).
"Redeemable Stock" means, with respect to any Person, any Capital
Stock which by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable) or upon the happening of any event
(i) matures or is mandatorily redeemable pursuant to a sinking fund obligation
or otherwise, (ii) is convertible or exchangeable for Indebtedness (other than
Preferred Stock) or Disqualified Stock or (iii) is redeemable at the option of
the holder thereof, in whole or in part.
"Redemption Date" has the meaning specified in Section 1102.
"Redemption Price" when used with respect to a redemption pursuant
to Article Eleven means the applicable percentage of the principal amount
specified in the form of Note set forth in Article Two.
"Responsible Officer", when used with respect to the Trustee,
means the chairman or any vice-chairman of the board of directors, the chairman
or any vice-chairman of the executive committee of the board of directors, the
chairman of the trust committee, the president, any vice president, the
secretary, any assistant secretary, the treasurer, any assistant treasurer, the
cashier, any assistant cashier, any trust officer or any assistant trust
officer, the controller or any assistant controller or any other officer of the
Trustee customarily performing functions similar to those performed by any of
the above designated officers and also means, with respect to any particular
corporate trust matter, any other officer to whom such matter is referred
because of his knowledge of and familiarity with the particular subject.
"Senior Indebtedness" means the principal of, premium, if any, and
interest on and other amounts due on any
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Indebtedness, whether outstanding on the date of execution of this Indenture or
thereafter issued, unless in the instrument creating or evidencing the same or
pursuant to which the same is outstanding it is provided that such obligations
are not superior in right of payment to the Notes; provided, however, that
Senior Indebtedness shall not include (1) any obligation of the Company to any
Affiliate, (2) any liability for Federal, state, local or other taxes owed or
owing by the Company, (3) any accounts payable or other liability to trade
creditors arising in the ordinary course of business (including Guarantees
thereof or instruments evidencing such liabilities), (4) any Indebtedness,
Guarantee or obligation of the Company which is subordinate or junior in any
respect to any other Indebtedness, Guarantee or obligation of the Company,
including any Senior Subordinated Indebtedness and any Subordinated
Obligations, (5) any obligations with respect to any Capital Stock or (6) any
Indebtedness Incurred in violation of this Indenture.
"Senior Subordinated Indebtedness" means the Notes and any other
Indebtedness of the Company that specifically provides that such Indebtedness
is to rank pari passu with the Notes and is not subordinated by its terms to
any Indebtedness or other obligation of the Company which is not Senior
Indebtedness.
"Special Record Date " for the payment of Defaulted Interest means a
date fixed by the Trustee pursuant to Section 307.
"Stated Maturity" means, with respect to any security, the date
specified in such security as the fixed date on which the payment of principal
of such security is due and payable, including pursuant to any mandatory
redemption provision (but excluding any provision providing for the repurchase
of such security at the option of the holder thereof upon the happening of any
contingency beyond the control of the issuer unless such contingency has
occurred).
"Subordinated Obligation" means any Indebtedness of the Company
(whether outstanding on the date of execution of this Indenture or thereafter
Incurred) which is subordinate or junior in right of payment to the Notes
pursuant to a written agreement.
"Subsidiary" of any Person means any corporation, association,
partnership or other business entity of which more than 50% of the total voting
power of shares of Capital Stock or other interests (including partnership
interests) 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 (i) such Person, (ii) such
Person and one or more Subsidiaries of such Person or (iii) one or more
subsidiaries of such Person.
"Time of Determination" means the time and date of the earlier of
(i) the record date for determining stockholders
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entitled to receive the rights, warrants or distributions referred to in
Section 1204 (b) and (c) , or (ii) the commencement of "exdividend" trading on
the exchange or market referred to in the definition of the term "Daily Market
Price".
"Trade Payables" means, with respect to any Person, any accounts
payable or any Indebtedness or monetary obligation to trade creditors created,
assumed or Guaranteed by such Person arising in the ordinary course of business
of such Person in connection with the acquisition of goods or services.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended by the Trust Indenture Reform Act of 1990, as in force at the date as of
which this instrument was executed, except as otherwise provided in section 905.
"Trustee" means the Person named as the Trustee in the first
paragraph of this instrument until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean or include each Person who is then a Trustee hereunder.
"Vice President", when used with respect to the company or the
Trustee, means any vice president, whether or not designated by a number or a
word or words added before or after the title "vice president".
"Voting Stock" of a corporation means all classes of Capital Stock
of such corporation then outstanding and normally entitled to vote in the
election of directors.
SECTION 102. Compliance Certificates and Opinions. Upon any
application or request by the Company to the Trustee to take any action under
any provision of this Indenture, the Company shall furnish to the Trustee an
Officers' Certificate stating that all conditions precedent, if any, provided
for in this Indenture relating to the proposed action have been complied with
and an Opinion of Counsel stating that in the opinion of such counsel all such
conditions precedent, if any, have been complied with, except that, in the case
of any such application or request as to which the furnishing of the foregoing
documents is specifically required by any provision of this Indenture relating
to such particular application or request, no additional certificate or opinion
need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than the certificate
required by Section 704(4) which need only be signed by one of the officers
referred to therein) shall include:
(1) a statement that each individual signing such certificate
or opinion has read such covenant or condition and the definitions
herein relating thereto;
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(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 each such individual,
he has made such examination or investigation as is necessary to enable
him to express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
SECTION 103. Form of Documents Delivered to Trustee. In any case
in which several matters are required to be certified by, or covered by an
opinion of, any specified Person, it is not necessary that all such matters be
certified by, or covered by the opinion of, only one such Person, or that they
be so certified or covered by only one document, but one such Person may certify
or give an opinion with respect to some matters and one or more other such
Persons as to other matters, and any such Person may certify or give an opinion
as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be
based, insofar as it relates to legal matters, upon a certificate or Opinion of
counsel, unless such officer knows, or in the exercise of reasonable care should
know, that the certificate or opinion with respect to the matters upon which his
certificate or opinion is based are erroneous. Any such certificate or Opinion
of Counsel may be based, insofar as it relates to factual matters, upon a
certificate of, or representations by, an officer or officers of the Company
stating that the information with respect to such factual matters is in the
possession of the Company, unless such counsel knows, or in the exercise of
reasonable care should know, that the certificate or representations with
respect to such matters are erroneous.
When any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 104. Acts of Holders. (a) Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be given or taken by Holders may be embodied in and evidenced
by one or more instruments of substantially similar tenor signed by such Holders
in person or by an agent duly appointed in writing; and, except as herein
otherwise expressly provided, such action shall become effective when such
instrument or instruments are delivered to the Trustee and, where it is hereby
expressly required, to the Company. Such
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instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Proof of execution of any such instrument or
of a writing appointing any such agent shall be sufficient for any purpose of
this Indenture and (subject to Section 601) conclusive in favor of the Trustee
and the Company, if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where
such execution is by a signer acting in a capacity other than his individual
capacity, such affidavit or certificate shall also constitute sufficient proof
of his authority.
(c) The ownership of Notes shall be proved by the Note Register.
(d) Any request, demand, authorization, direction, notice,
consent, waiver or other Act of the Holder of any Note shall bind every future
Holder of the same Note and the Holder of every Note issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done, omitted or suffered to be done by the Trustee or the
Company in reliance thereon, whether or not notation of such action is made upon
such Note.
SECTION 105. Notices, Etc., to Trustee and Company. Except as
otherwise specifically provided in this Indenture, any request, demand,
authorization, direction, notice, consent, waiver or Act of Holders or the
document provided or permitted by this Indenture to be made upon, given or
furnished to, or filed with,
(1) the Trustee by any Holder, the Company, any Note
Registrar, any Paying Agent or any Conversion Agent, shall be sufficient
for every purpose hereunder if made, given, furnished or filed in
writing to or with the Trustee at its Corporate Trust office, or
(2) the Company by the Trustee or by any Holder shall be
sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if in writing and mailed, firstclass postage
prepaid, to the Company addressed to it at the address of its principal
office specified in the first paragraph of this instrument, attention,
Secretary, or at any other address previously furnished in writing to
the Trustee by the Company.
SECTION 106. Notice to Holders; Waiver. Where this Indenture or
any Note provides for notice to Holders of any
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event, such notice shall be sufficiently given (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage prepaid, to
each Holder affected by such event, at his address as it appears in the Note
Register, not later than the latest date, and not earlier than the earliest
date, prescribed for the giving of such notice. In any case where notice to
Holders is given by mail, neither the failure to mail such notice, nor any
defect in any notice so mailed, to any particular Holder shall affect the
sufficiency of such notice with respect to other Holders. Where this Indenture
or any Note provides for notice in any manner, such notice may be waived in
writing by the Person entitled to receive such notice, either before or after
the event, and such waiver shall be the equivalent of such notice. Waivers of
notice by Holders shall be filed with the Trustee, but such filing shall not be
a condition precedent to the validity of any action taken in reliance upon such
waiver.
In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice by mail,
then such notification as shall be made with the approval of the Trustee shall
constitute a sufficient notification for every purpose hereunder.
SECTION 107. Conflict with Trust Indenture Act. if and to the
extent any provision hereof limits, qualifies or conflicts with the duties
imposed by, or with another provision (an "incorporated provision") included in
this Indenture by operation of, any of Sections 310 to 318, inclusive of the
Trust Indenture Act, such imposed duties or incorporated provision shall
control.
SECTION 108. Effect of Headings and Table of Contents. The
Article and Section headings herein and the Table of Contents and
cross-reference sheet are for convenience only and shall not affect the
construction hereof.
SECTION 109. Successors and Assigns. All covenants and agreements
in this Indenture and the Notes by the Company shall bind its successors and
assigns, whether so expressed or not. All agreements of the Trustee in this
Indenture shall bind its successors.
SECTION 110. Separability Clause. In case any provision in this
Indenture or in the 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 111. Benefits of Indenture. Nothing in this Indenture or
in the Notes, express or implied, shall give to any Person, other than the
parties hereto and their successors hereunder, the Holders and holders of Senior
Indebtedness, any benefit or any legal or equitable right, remedy or claim under
this Indenture.
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SECTION 112. GOVERNING LAW. THIS INDENTURE AND THE NOTES SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE
EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE
REQUIRED THEREBY.
SECTION 113. Legal Holidays. In any case in which the date of
maturity of, or payment of premium, if any, or interest on or principal of the
Notes or the date fixed for redemption or for purchase upon a Change of Control
of any Note or the last day on which a Holder has the right to convert his Note
at a particular conversion Price shall not be a Business Day, then
(notwithstanding any other provision of this Indenture or of the Notes) payment
of such interest, premium, if any, or principal or conversion of the Note need
not be made on such date but may be made on the next succeeding Business Day
with the same force and effect as if made on the date of maturity or the date
fixed for redemption or for purchase or the last day for conversion, and no
interest shall accrue for the period from and after such date of maturity or
date fixed for redemption or for purchase or last day for conversion to such
next succeeding Business Day.
SECTION 114. Execution in Counterparts. This Indenture may be
executed in any number of counterparts, each of which shall be an original, but
such counterparts shall together constitute but one and the same instrument. One
signed copy is enough to prove this Indenture.
SECTION 115. No Security Interest Created. Nothing in this
Indenture or in the Notes, express or implied, shall be construed to constitute
a security interest under the Uniform Commercial Code or similar legislation, as
now or hereafter enacted and in effect, in any jurisdiction in which property of
the Company or its subsidiaries is located.
ARTICLE TWO
Note Forms
SECTION 201. Forms Generally. The Notes shall be in substantially
the form set forth in this Article with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this
Indenture, and may have such letters, numbers or other marks of identification
and such legends or endorsements placed thereon as may be required to comply
with the rules of any securities exchange or as may, consistently herewith, be
determined by the officers executing such Notes, as evidenced by their execution
of the Notes. The Company shall furnish any such legends or endorsements to the
Trustee in writing.
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The Trustee's certificates of authentication to be borne by the
Notes, each Conversion Notice and each assignment shall be in substantially the
form set forth in this Article.
The definitive Notes shall be printed, lithographed or engraved, or
produced by any combination of these methods, on steel-engraved borders or may
be produced in any other manner permitted by the rules of any securities
exchange on which the Notes may be listed or, if the Notes are not listed, the
Notes may be produced in any other manner customarily used to produce similar
definitive securities, all as determined by the officers executing such Notes,
as evidenced by their execution of such Notes.
SECTION 202. Form of Face of Note.
THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR ANY STATE
SECURITIES LAWS, AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT OR AN AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENT.
BEC GROUP, INC.
8% CONVERTIBLE SUBORDINATED NOTE DUE 2002
BEC Group, Inc., a corporation duly organized and existing under the
laws of Delaware (herein called the "Company", which term includes any
successor corporation or corporations under the Indenture hereinafter referred
to), for value received, hereby promises to pay to __________________ or
registered assigns the principal sum of ________________ Dollars at the office
or agency of the Company maintained for the purpose in New York, New York,
which initially will be at the offices of the Trustee (and at such other
offices or agencies designated for that purpose by the Company), on May 3,
2002, in such coin or currency of the United States of America as at the time
of payment shall be legal tender for the payment of public and private debts,
and to compound interest, semiannually on May 3 and November 3 of each year
commencing on May 3, 1996, on said principal sum at the rate per annum
specified in the title of this Note until the earliest to occur of the
following (the "Interest Payment Date") (1) May 3, 2002, (2) Conversion of the
Notes pursuant to Section 12 hereof or (3) Redemption of the Note pursuant to
Section 11 hereof. The Company shall have the option to pay on the Interest
Payment Date any interest on the Notes in shares of Common Stock, the value of
which shall be determined by the average closing bid price for a share of
Common Stock for the 30 days immediately preceding the Interest Payment Date.
Except as may be provided in any representation letter or agreement of the
Company with a "clearing agency" registered under the Exchange Act, payment of
the principal of and interest on this Note shall be made only upon presentation
and surrender hereof at any such office or
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agency and, at the option of the Company, payment of interest may be made by
check mailed to the address of the person entitled thereto as such address
shall appear in the Note Register.
Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof, including, without limitation, provisions
subordinating the payment of principal of and premium, if any, and interest on
the Notes to the prior payment in full of all Senior Indebtedness (as defined
in the Indenture) and provisions giving the holder of this Note the ability to
convert such note into common stock of the Company ("Common Stock") on the
terms and subject to the limitations referred to on the reverse hereof and as
more fully specified in the Indenture. Such further provisions shall for all
purposes have the same effect as though fully set forth at this place.
IN WITNESS WHEREOF, the Company has caused this instrument to be
signed manually or by facsimile by its duly authorized officers.
Dated:
BEC GROUP, INC.,
By
----------------------------
President
[CORPORATE SEAL)
Attest:
By
--------------------------
Secretary
SECTION 203. Form of Reverse of Note.
This Note is one of a duly authorized issue of Notes of the Company,
designated as set forth on the face hereof (herein called the "Notes"), limited
to the aggregate principal amount of $23,000,000, all issued or to be issued
under and pursuant to an Indenture dated as of May 3, 1996 (herein called the
"Indenture"), duly executed and delivered by the Company to IBJ Xxxxxxxx Bank &
Trust Company, as Trustee (herein called the "Trustee"), to which Indenture and
all indentures supplemental thereto reference is hereby made for a description
of the rights, limitation of rights, obligations, duties and immunities
thereunder of the Trustee, the Company, the holders of the Notes
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and the holders of Senior Indebtedness (as defined in the Indenture).
In case an Event of Default (as defined in the Indenture) shall have
occurred and be continuing, the principal hereof and accrued interest hereon
may be declared, and upon such declaration shall become due and payable, in the
manner, with the effect and subject to the conditions provided in the
Indenture.
The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the holders of not less than a majority in
aggregate principal amount of the Notes at the time outstanding, evidenced as
in the Indenture provided, to execute supplemental indentures adding any
provisions to or changing in any manner or eliminating any of the provisions of
the Indenture or of any supplemental indenture or modifying in any manner the
rights of the holders of the Notes; provided, however, that no such
supplemental indenture shall (i) extend the Stated Maturity (as defined in the
Indenture) of any Note, or reduce the rate or extend the time of payment of
interest thereon, or reduce the principal amount thereof or any premium
thereon, or reduce any amount payable on redemption or required purchase by the
Company thereof, or impair or affect the right of any holder of Notes to
institute suit for the payment hereof on or after the date on which the same
shall become due and payable, or make the principal thereof or any premium or
interest thereon payable at a place or in any coin or currency other than that
hereinbefore provided, or modify the provisions of the Indenture with respect
to the subordination of the Notes in a manner adverse to the Noteholders, or
impair the right to convert the Notes into Common Stock or the right to require
the Company to purchase the Notes upon the incurrence of a Change of Control
(as defined in the Indenture), subject and pursuant to the terms set forth in
the Indenture, without the consent of the holder of each Note so affected, or
(ii) reduce the aforesaid percentage in principal amount of outstanding Notes,
the holders of which are required to consent to any such supplemental
indenture, without the consent of the holders of all Notes then outstanding.
It is also provided in the Indenture that the holders of a majority in
aggregate principal amount of the Notes at the time outstanding may on behalf
of the holders of all the Notes waive any past default or Event of Default
under the Indenture and its consequences except an uncured default in the
payment of principal of or premium, if any, or interest on the Notes or in
respect of a failure by the Company to convert any Note into Common Stock of
the Company in accordance with the Indenture or in respect of a covenant or
provision of the Indenture which cannot be modified or amended without the
consent of all holders of Notes. Any such consent or waiver by the holder of
this Note shall be conclusive and binding upon such holder and upon all future
holders and owners of this Note and any Notes which may be issued in exchange
or substitution therefor, irrespective of whether or not any notation thereof
is made upon this Note or such Notes.
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Except with respect to the rights of holders of Senior Indebtedness
set forth in this Note and in the Indenture, no reference herein to the
Indenture and no provision of this Note or the Indenture shall alter or impair
the obligation of the Company, which is absolute and unconditional, to pay the
principal of and premium, if any, and interest on this Note at the place, at the
respective times, at the rate and in the coin or currency herein prescribed.
Interest on the Notes shall be calculated on the basis of a 360-day
year of twelve 30-day months.
Subject to and upon compliance with the provisions of the
Indenture, the registered holder of this Note has the right, at his option, at
any time on or prior to the close of business on May 3, 2002 (or in case this
Note or any portion hereof shall be called for redemption prior to such date,
then on or prior to the close of business on the date fixed for redemption), to
convert the principal amount hereof and all accrued but unpaid interest thereon,
or any portion of such amount which is $1.00 or an integral multiple thereof,
into that number of fully paid and nonassessable shares of Common Stock
(calculated to the nearest 1/100th of a share) obtained by dividing the
principal amount of the Note and all accrued but unpaid interest thereon or the
portion thereof to be converted by the conversion price of $5.75 per share, or
the conversion price as adjusted from time to time as provided in the Indenture
(the "Conversion Price"), upon surrender of this Note to the Company at the
office or agency maintained for such purpose in New York, New York (and at such
other offices or agencies designated for such purpose by the Company),
accompanied by written notice of conversion duly executed and (if the shares of
Common Stock to be issued on conversion are to be issued in any name other than
that of the registered holder of this Note) by instruments of transfer, in form
satisfactory to the Company, duly executed by the registered holder or his duly
authorized attorney. The right to convert this Note is subject to the
provisions of the Indenture relating to conversion rights in the case of certain
consolidations, mergers, or sales or transfers of substantially all the
Company's assets.
If between the date of issuance of the Notes and the close of
business on April 15, 1997 the "closing sale price" per share of the Common
Stock has not exceeded $5.50 on at least ten (10) trading days within a 30
consecutive business day period, then the Conversion Price from and after such
date shall be $5.25, subject to any adjustments in the Conversion Price which
have occurred prior to such time. The "closing sale price" shall mean (x) if
the Common Stock is listed or admitted for trading on any national securities
exchange, the last sales price or the closing bid price if no sale occurred, of
Common Stock on the principal securities exchange on which such class of stock
is listed, (y) if the Common Stock is not listed or admitted for trading on any
such exchange, the last reported sales price of
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Common Stock on the NASDAQ Stock Market, or any similar system of automatic
quotation of securities prices then in common use, if so quoted, or (z) if not
so quoted as described in clause (y), the mean between the high and the low
asked quotations for the Common Stock as reported by the National Quotation
Bureau Incorporated if at least two securities dealers have inserted both bid
and asked quotations for such class of stock on at least five of the ten
trading days preceding the day in question.
If the average closing sale price per share of the Common Stock for
any 30 consecutive business day period during the term of the Notes equals or
exceeds 135% of the Conversion Price, the Company may convert the outstanding
principal hereof and all accrued but unpaid interest hereon into that number of
fully paid and nonassessable shares of Common Stock (calculated to the nearest
1/100th of a share) obtained by dividing the principal amount of the Note and,
to the extent permitted, all accrued but unpaid interest thereon by the
Conversion Price. The Company's right to convert this Note is subject to the
notice and other provisions 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 make an
adjustment therefor in cash on the basis of the then current market value of
such fractional interest as provided in the Indenture.
The indebtedness evidenced by the Notes is, to the extent and in the
manner set forth in the Indenture, expressly subordinated and subject in right
of payment to the prior payment in full of all Senior Indebtedness (as defined
in the Indenture), whether outstanding at the date of the execution of the
Indenture or thereafter incurred, and this Note is issued subject to such
provisions of the Indenture. Each holder of this Note, by accepting the same,
agrees to and shall be bound by such provisions and authorizes and directs the
Trustee on his behalf to take such action as may be necessary or appropriate to
acknowledge or effectuate such subordination as provided in the Indenture and
appoints the Trustee his attorney-in-fact for any and all such purposes.
The Notes are issuable only in fully registered form without
coupons in denominations of $1.00 and any integral multiple of $1.00. In the
manner and subject to the limitations provided in the Indenture, but without the
payment of any service charge (provided that the Company may require payment of
a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection therewith), Notes may be exchanged for an equal aggregate
principal amount of Notes of other authorized denominations at the office or
agency of the Company maintained for such exchange in New York, New York (and at
such other offices or agencies designated for such purpose by the Company).
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Subsequent to May 3, 1998, the Notes may be redeemed at the option
of the Company as a whole, or from time to time in part, prior to maturity, upon
not less than 30 nor more than 60 days' prior notice given as provided in the
Indenture.
Notes may be redeemed during the 12-month period beginning on May
3 of each year set forth below at the applicable redemption price ("Redemption
Price") set forth opposite such year (expressed in percentages of the principal
amount):
Year Percentage
1998 104.0%
1999 103.0%
2000 102.0%
2001 101.0%
in each case together with accrued and unpaid interest to the date fixed for
redemption.
If less than all the outstanding Notes are to be redeemed, the
Trustee will select in its discretion those Notes to be redeemed as a whole or
in part pro rata or by lot or by such method as the Trustee shall deem fair and
appropriate and in accordance with methods generally used at the time of
selection by fiduciaries in similar circumstances. On or after the redemption
date, interest shall cease to accrue on Notes called for redemption.
Upon the occurrence of any Change of Control (as defined in the
Indenture), the holder hereof shall have the right, at the option of such
holder, and subject to the conditions of Article Fifteen of the Indenture and
the subordination provisions of Article Thirteen of the Indenture, to require
the Company to purchase all or any portion hereof (in a principal amount that
is an integral multiple of $1.00) on the date (the "Purchase Date") that is the
first business day that is 40 or more days after the mailing of the notice
referred to in the next succeeding sentence, at a purchase price equal to 101%
of the principal amount thereof plus interest accrued and unpaid to the
Purchase Date. Within 20 days (or such other period permitted under the terms
of the Indenture) after the occurrence of any Change of Control (or, in the
case of a Change of Control referred to in clause (c) of the definition
thereof, upon notice to the Company thereof), the Company or, at the option of
the Company, the Trustee shall mail to the Trustee and the holder hereof a
notice of the occurrence of such Change of Control setting forth, among other
things, the circumstances and relevant facts regarding such Change of Control
and the terms and conditions of, and the procedures required for exercise of,
such holder's right to require such purchase by the Company. The Company shall
deliver a copy of such notice to the Trustee and cause a notice in the form
specified in the Indenture to be published in a daily newspaper of national
circulation, which
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shall be The Wall Street Journal unless it is not then so circulated. In order
to exercise such right, such holder shall, prior to the close of business five
business days prior to the Purchase Date, surrender this Note at such place of
payment in such notice specified, accompanied by written notice of such
exercise, specifying such portion of this Note such holder elects to have
purchased, all as further provided in the Indenture. No Notes may be purchased
if there has occurred and is continuing an Event of Default under the Indenture
(other than a default in the payment of the purchase price with respect to such
Notes). If the Company is prohibited by applicable law from mailing such
notice to holders or purchasing Notes from the holders thereof in the event of
a Change of Control, the Company will have no obligation to purchase this Note
from the holder hereof for so long as such prohibition is in effect.
Upon surrender for registration of transfer of this Note at the
office or agency of the Company maintained for such registration in New York,
New York (and at such other offices or agencies designated for such purpose by
the Company), a new Note or Notes of authorized denominations for an equal
aggregate principal amount will be issued to the transferee in exchange herefor,
subject to the limitations provided in the Indenture, without charge except for
any tax or other governmental charge imposed in connection therewith.
The Company, the Trustee, any paying agent, conversion agent and
Note registrar may deem and treat the registered holder hereof as the absolute
owner of this Note (whether or not this Note shall be overdue and
notwithstanding any notation of ownership or other writing hereon made by anyone
other than the Company or any Note registrar), for the purpose of receiving
payment hereof or on account hereof, as herein and in the Indenture provided,
for conversion hereof and for all other purposes, and neither the Company nor
the Trustee nor any paying agent nor any conversion agent nor any Note registrar
shall be affected by any notice to the contrary. All such payments and
conversions shall satisfy and discharge the liability upon this Note to the
extent of the sum or sums so paid or the conversions so made.
No recourse for the payment of the principal of or premium, if any,
or interest on this Note, or for any claim based hereon or otherwise in respect
hereof, and no recourse under or upon any obligation, covenant or agreement of
the Company in the Indenture or in any indenture supplemental thereto or in any
Note, or because of the creation of any indebtedness represented thereby, shall
be had against any incorporator, stockholder, officer or director, as such,
past, present or future, of the Company or of any successor corporation, either
directly or through the Company or any successor corporation, whether by virtue
of any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise, all such liability being, by the acceptance
hereof and as part of the
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consideration for the issue hereof, expressly waived and released.
THE INDENTURE AND THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO
APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF
THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
This Note shall not be valid or become obligatory for any purpose
until the certificate of authentication hereon shall have been signed by the
Trustee under the Indenture referred to herein.
SECTION 204. Form of Trustee's Certificate of Authentication.
This is one of the Notes described in the within-mentioned Indenture.
IBJ XXXXXXXX BANK & TRUST
COMPANY,
As Trustee
By
----------------------------
Authorized Signatory
SECTION 205. Form of Conversion Notice.
CONVERSION NOTICE
To: BEC GROUP, INC.
The undersigned registered owner of the Note hereby irrevocably
exercises the option to convert this Note, or portion hereof (which is $1.00 or
an integral multiple thereof) below designated, into shares of Common Stock of
BEC Group, Inc., in accordance with the terms of the Indenture referred to in
this Note, and directs that the shares issuable and deliverable upon the
conversion, together with any check in payment for fractional shares and a Note
or Notes representing any unconverted principal amount or accrued but unpaid
interest amount hereof, be issued and delivered to the registered holder hereof
unless a different name has been indicated below. If shares or any portion of
this Note not converted are to be issued in the name of a person other than the
undersigned, the undersigned will pay all transfer taxes payable with respect
thereto. Any amount required to be paid by the undersigned on account of
interest and taxes accompanies this Note.
Dated:
----------------------------------------
Signature[s]
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Fill in for registration of Principal amount to be
shares if to be delivered, and converted (if less than all):
Notes if to be issued, other $_______.00
than to and in the name of the
registered holder
(Please Print): Accrued but unpaid interest
amount to be converted (if less
than all): $___________
----------------------------------
Social Security or other
Taxpayer Identification Number
----------------------------------------
(Name)
----------------------------------------
(Street Address)
----------------------------------------
(City, State and zip code)
SECTION 206. Form of Assignment.
For value received _______________________ hereby sell(s), assign(s) and
transfer(s) unto
---------------------------------------------------------------------------
(Please include social security or other tax identification number of
assignee.)
the within Note and hereby irrevocably constitutes and appoints
_________________________ attorney to transfer the said Note on the books of
the Company, with full power of substitution in the premises.
Dated
---------------------------- -----------------------------------------
Signature(s)
Signature(s) must be
guaranteed by a commercial
bank or trust company or a
member firm of a major
stock exchange.
--------------------------------
Signature Guarantee
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ARTICLE THREE
The Notes
SECTION 301. Designation, Amount and Issue of Notes. The Notes
shall be designated as the "8% Convertible Subordinated Notes Due 2002" of the
Company. Notes not to exceed the aggregate principal amount of $23,000,000
(except as otherwise provided in Section 306), upon execution of this
Indenture, or from time to time thereafter, may be issued by the Company.
Payments in respect of the principal of (and premium, if any) and
interest on the Notes shall be payable at the office or agency of the Company
in the Borough of Manhattan, The City of New York maintained for such purpose
and at any other office or agency maintained by the Company for such purpose;
provided, however, that (except as may be provided in any representation letter
or agreement of the Company with a "clearing agency" registered under the
Exchange Act) payment of the principal of and accrued but unpaid interest on
(and premium, if any, on) the Notes shall be made only upon presentation and
surrender thereof at any such office or agency.
SECTION 302. Denominations, Dates and Interest Payment. The
Notes shall be issuable only in registered form without coupons in a minimum
denomination of $1.00 and in any integral multiple of $1.00.
Every Note shall be dated the date of its authentication and
shall bear interest, which shall be compounded semi-annually, from May 3,
1996, until the earliest to occur of the following (the "Interest Payment
Date"): (1) May 3, 2002, (2) Conversion of the Notes pursuant to Article
12 hereof or (3) Redemption of the Notes pursuant to Article 11 herein.
Interest on the Notes shall be payable on the Interest Payment
Date. The interest may be paid, at the Company's option, in cash or in shares
of Common Stock valued at the average closing sale price per share of the
Common Stock for the [thirty (30)] trading days immediately prior to the
Interest Payment Date (the "Average Common Stock Price"), if there is in effect
on the Interest Payment Date a registration statement with respect to the
resale of shares of Common Stock as required under the terms of the
Registration Rights Agreement dated May 3, 1996 between the Company and certain
holders of the Notes (the "Registration Rights Agreement") and use of the
prospectus filed with a registration statement with respect to the resale of
shares of Common Stock has not on such date been suspended by the Company by
giving a Suspension Notice (as defined in the Registration Rights Agreement)
pursuant to Section 4 of the Registration Rights Agreement. The "closing sale
price" shall mean (x) if the Common Stock is listed or admitted for trading on
any national securities exchange, the last sales price or the closing bid price
if no sale occurred, of Common Stock on the principal
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securities exchange on which such class of stock is listed (the "Stock
Exchange"), (y) if the Common Stock is not listed or admitted for trading on
any such exchange, the last reported sales price of Common Stock on the NASDAQ
Stock Market, or any similar system of automatic quotation of securities prices
then in common use, if so quoted, or (z) if not so quoted as described in
clause (y), the mean between the high and low asked quotations for the Common
Stock as reported by the National Quotation Bureau Incorporated if at least two
securities dealers have inserted both bid and asked quotations for such class
of stock on at least five of the ten trading days preceding the day in
question. Interest on the Notes shall be calculated on the basis of a 360-day
year of twelve 30-day months.
SECTION 303. Execution, Authentication and Delivery of Notes.
The Notes shall be executed on behalf of the Company by its Chairman of the
Board, its President or one of its Vice Presidents, under its corporate seal
reproduced thereon, attested by its Secretary or one of its Assistant
Secretaries. The signature of any of these officers on the Notes may be manual
or facsimile.
Notes bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Notes or did not hold
such offices at the date of such Notes.
At any time and from time to time after the execution and
delivery of this Indenture, the Company may deliver Notes executed by the
Company to the Trustee for authentication, together with a Company Order for
the authentication and delivery of such Notes, and the Trustee in accordance
with the Company Order shall authenticate and deliver such Notes as in this
Indenture provided and not otherwise.
No Note shall be entitled to any benefit under this Indenture or
be valid or obligatory for any purpose unless there appears on such Note a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature, and such certificate upon any Note
shall be conclusive evidence, and the only evidence, that such Note has been
duly authenticated and delivered hereunder and is entitled to the benefits of
this Indenture.
SECTION 304. Temporary Notes. Pending the preparation of
definitive Notes, the Company may execute, and upon Company order, the Trustee
shall authenticate and deliver, temporary Notes which are printed,
lithographed, typewritten, mimeographed or otherwise produced, in any
authorized denomination, substantially of the tenor of the definitive Notes in
lieu of which they are issued and with such appropriate insertions, omissions,
substitutions and other variations as the officers
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executing such Notes may determine, as evidenced by their execution of such
Notes.
If temporary Notes are issued, the Company will cause definitive
Notes to be prepared without unreasonable delay. After the preparation of
definitive Notes, the temporary Notes stall be exchangeable for definitive
Notes upon surrender of the temporary Notes at the office or agency maintained
by the Company pursuant to Section 1002, without charge to the Holder. Upon
surrender for cancellation of any one or more temporary Notes, the Company
shall execute and the Trustee shall authenticate and deliver in exchange
therefor a like principal amount of definitive Notes of authorized
denominations. Until so exchanged the temporary Notes shall in all respects be
entitled to the same benefits under this Indenture as definitive Notes.
SECTION 305. Exchange and Registration of Transfer of Notes. The
Company shall cause to be kept at the Corporate Trust Office and at the
principal office of such other Person or Persons as may be designated by the
Company, a register (the register maintained in each such office and in any
other office or agency maintained by the Company pursuant to Section 1002 being
herein sometimes collectively referred to as the "Note Register") in which,
subject to such reasonable regulations as it may prescribe, the Company shall
provide for the registration of Notes and of transfers of Notes. The Trustee
is hereby appointed "Note Registrar" for the purpose of registering Notes and
transfers of Notes as herein provided; provided, however, that if the Company
gives a Company Order to the Trustee designating a Person other than the
Trustee to serve as Note Registrar, then such Person shall be appointed as
"Note Registrar" for the purpose of registering and transferring the Notes as
herein provided.
Upon surrender for registration of transfer of any Note at the
office or agency maintained by the Company pursuant to Section 1002, the
Company shall execute, and the Trustee shall authenticate and deliver, in the
name of the designated transferee or transferees, one or more new Notes of any
authorized denominations and of a like aggregate principal amount.
At the option of the Holder, Notes may by exchanged for other
Notes, of any authorized denominations and of a like aggregate principal
amount, upon surrender of the Notes to be exchanged at such office or agency.
Whenever any Notes are so surrendered for exchange, the Company shall execute,
and the Trustee shall authenticate and deliver, the Notes which the Holder
making the exchange is entitled to receive.
All Notes issued upon any registration of transfer or exchange of
Notes shall be the valid obligations of the Company, evidencing the same debt,
and entitled to the same benefits under
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this Indenture, as the Notes surrendered upon such registration of transfer or
exchange.
Every Note presented or surrendered for registration of transfer
or for exchange, redemption, purchase upon a Change in Control, conversion or
payment shall (if so required by the Company or the Trustee) be duly endorsed,
or be accompanied by a written instrument of transfer in form satisfactory to
the Company, the Trustee and the Note Registrar duly executed, by the Holder
thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer
or exchange of Notes, or issue of new Notes in case of partial redemption,
purchase upon a Change in Control or conversion, but the Company may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection therewith, other than exchanges pursuant to
Section 304, Section 906, the second paragraph of Section 1103, the last
sentence of the first paragraph of Section 1202 or the fourth paragraph of
Section 1504, not involving any transfer.
The Company shall not be required to register a transfer of or
exchange of (i) any Notes for a period beginning at the opening of business 15
days before the day of the mailing of a Notice of Redemption of Notes selected
for redemption under Section 1102 and ending at the close of business on the
day of such mailing, (ii) any Notes selected, called or being called for
redemption except, in the case of any Note to be redeemed in part, the portion
thereof not to be so redeemed, or (iii) any Notes or portion thereof
surrendered for conversion or, unless withdrawn, delivered for purchase by the
Company pursuant to Article Fifteen.
SECTION 306. Mutilated, Destroyed, Lost and Stolen Notes. If any
mutilated Note is surrendered to the Trustee, the Company shall execute and the
Trustee shall authenticate and deliver in exchange therefor a new Note of like
principal amount and bearing a number not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (i)
evidence of the destruction, loss or theft of any Note and (ii) such security
or indemnity as may be required by them to save each of them and any agent of
either of them harmless, then, in the absence of notice to the Company or the
Trustee that such Note has been acquired by a bona fide purchaser, the Company
shall execute and upon its request the Trustee shall authenticate and deliver,
in lieu of any such destroyed, lost or stolen Note, a new Note of like
principal amount and bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Note has
become or is about to become due and payable, the Company in its discretion
may, instead of issuing a new Note, permit the conversion of such Note, or pay
such Note (without
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surrender thereof except in the case of a mutilated Note) if the Holder thereof
has so requested.
Upon the issuance of any new Note under this Section, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including fees and expenses of the Trustee) connected therewith.
Every new Note issued pursuant to this section in lieu of any
destroyed, lost or stolen Note shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Note shall be at any time enforceable by anyone, and shall be entitled
to all the benefits of this Indenture equally and proportionately with any and
all other Notes duly issued hereunder.
The provisions of this Section are exclusive and shall preclude
(to the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Notes.
SECTION 307. Payment of Interest; Interest Rights Preserved.
Interest on any Note which is payable, and is punctually paid or duly provided
for, on any Interest Payment Date shall be paid to the Person in whose name
that Note (or one or more Predecessor Notes) is registered at the close of
business on the Interest Payment Date.
Subject to the foregoing provisions of this Section, each Note
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Note shall carry the rights to interest accrued and
unpaid, and to accrue, which were carried by such other Note.
Whenever reference is made in this Section 307 to the Trustee,
such reference shall be deemed to mean the Trustee or, if the Company shall
have appointed a Person other than the Trustee to serve as the Paying Agent for
the Notes issued under the Indenture, the Paying Agent for the Notes.
SECTION 308. Persons Deemed Owners. Prior to due presentment
of a Note for registration of transfer, the Company, the Trustee and any agent
of the Company or the Trustee may treat the Person in whose name such Note is
registered as the owner of such Note for the purpose of receiving payment of
principal of and premium, if any, and (subject to Section 307) interest on such
Note, for conversion of such Note and for all other purposes whatsoever,
whether or not such Note be overdue and notwithstanding any notation of
ownership or other writing thereon by anyone other than the Company or the Note
Registrar, and neither the Company, the Trustee nor any agent of the Company or
the Trustee shall be affected by notice to the contrary.
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SECTION 309. Cancellation. All Notes surrendered for payment,
redemption, purchase upon a Change in Control, conversion, registration of
transfer or exchange shall, if surrendered to any Person other than the
Trustee, be delivered to the Trustee and shall be promptly canceled by it. The
Company may at any time deliver to the Trustee for cancellation any Notes
previously authenticated and delivered hereunder which the Company may have
acquired in any manner whatsoever, and all Notes so delivered shall be promptly
canceled by the Trustee. No Notes shall be authenticated in lieu of or in
exchange for any Notes canceled as provided in this Section, except as
expressly permitted by this Indenture. All canceled Notes held by the Trustee
shall be destroyed and certification of their destruction delivered to the
Company, unless by a Company Order the Company shall direct that canceled Notes
be returned to it.
Wherever reference is made in this Section 309 to the Trustee,
such reference shall be deemed to mean the Trustee or, if the Company shall
have appointed a Person other than the Trustee to serve as the Note Registrar
for the Notes issued under the Indenture, the Note Registrar for the Notes.
SECTION 310. CUSIP Numbers. The Company in issuing the Notes
may use "CUSIP" numbers (if then generally in use), and if so used, the Trustee
shall use CUSIP numbers in notices of redemption or exchange as a convenience
to Holders of Notes; provided, that any such notice shall state that no
representation is made as to the correctness or accuracy of the CUSIP numbers
either as printed on the Notes or as contained in any notice of redemption or
exchange and that reliance may be placed only on the other identification
numbers printed on the Notes, and any such redemption or exchange shall not be
affected by any defect in or omission of such numbers. The Company shall
promptly notify the Trustee of any change in the CUSIP numbers.
ARTICLE FOUR
Satisfaction and Discharge
SECTION 401. Satisfaction and Discharge of Indenture. This
Indenture shall upon Company Request cease to be of further effect (except as
to any surviving rights of conversion, registration of transfer or exchange of
Notes herein expressly provided for), and the Trustee, at the expense of the
Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when
(1) either
(A) all Notes theretofore authenticated and delivered
(other than (i) Notes which have been destroyed, lost or stolen and
which have been replaced or paid as provided in Section 306 and (ii)
Notes for whose payment money has theretofore been deposited in trust
or segregated and held
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in trust by the Company and thereafter repaid to the Company or
discharged from such trust, as provided in Section 1003) have been
delivered to the Trustee for cancellation; or
(B) all such Notes not theretofore delivered to the
Trustee for cancellation
(i) have become due and payable, or
(ii) will become due and payable by their terms within
one year, or
(iii) are to be called for redemption within one year
under arrangements satisfactory to the Trustee for the giving of
notice of redemption by the Trustee in the name, and at the expense,
of the Company,
and the Company, in the case of (i), (ii) or (iii) above, has
deposited or caused to be deposited with the Trustee as trust funds in
trust for the purpose an amount sufficient to pay and discharge the
entire indebtedness on such Notes not theretofore delivered to the
Trustee for cancellation, for principal of and premium, if any, and
interest to the date of such deposit (in the case of Notes which have
become due and payable) or to the date of maturity or Redemption Date
of such Notes, as the case may be;
(2) the Company has paid or caused to be paid all other sums
payable hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to the satisfaction and discharge of
this Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture,
the obligations of the Company to the Trustee under Section 607, the
obligations of the Trustee to any Authenticating Agent under Section 614 and,
if money shall have been deposited with the Trustee pursuant to subclause (B)
of clause (1) of this Section, the obligations of the Trustee under Section 402
and the last paragraph of Section 1003 shall survive.
SECTION 402. Application of Trust Money. Subject to the
provisions of the last paragraph of Section 1003 and Article Thirteen, all
money deposited with the Trustee pursuant to Section 401 shall be held in trust
and applied by it, in accordance with the provisions of the Notes and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal of and premium, if
any, and interest for whose payment such money has been deposited with the
Trustee. All monies
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deposited with the Trustee pursuant to Section 401 (and held by it or any
Paying Agent) for the payment of Notes subsequently converted into Common Stock
pursuant to this Indenture shall be returned to the Company upon Company
Request.
ARTICLE FIVE
Remedies
SECTION 501. Events of Default. "Event of Default", wherever
used herein with respect to the Notes, means any one of the following events
(whatever the reason for such Event of Default and whether it shall be
voluntary or involuntary or pursuant to the subordination provisions of Article
Thirteen hereof, or be effected by operation of law or pursuant to any
judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(1) default in the payment of the principal of or accrued
but unpaid interest or premium, if any, on any of the Notes as and
when the same shall become due and payable, either in connection with
any redemption or required purchase upon a Change of Control, by
declaration or otherwise and whether or not such payment is prohibited
by the provisions of Article Thirteen; or
(2) default in the performance, or breach, of any
covenant or warranty of the Company in this Indenture (other than a
covenant or warranty a default in whose performance or whose breach is
elsewhere in this section specifically dealt with), and continuance of
such default or breach for a period of 60 days after there has been
given, by registered or certified mail, to the Company by the Trustee
or to the Company and the Trustee by the Holders of at least 25% in
aggregate principal amount of the Outstanding Notes a written notice
specifying such default or breach and requiring it to be remedied and
stating that such notice is a "Notice of Default" hereunder; or
(3) a default under any bond, debenture, note or other
evidence of indebtedness for money borrowed by the Company or any
Subsidiary or under any mortgage, indenture or instrument under which
there may be issued or by which there may be secured or evidenced any
indebtedness for money borrowed by the Company or any Subsidiary,
whether such indebtedness now exists or shall hereafter be created,
which default shall have resulted in $1,000,000 or more of such
indebtedness becoming or being declared due and payable prior to the
date on which it would otherwise have become due and payable, without
such indebtedness having been discharged, or acceleration having been
rescinded or annulled, within a period of 30 days after there shall
have been given, by registered or certified mail, to the Company by
the Trustee or to the Company and the Trustee by the
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Holders of at least 25% in principal amount of the Outstanding Notes a
written notice specifying such default and requiring the Company to
cause such indebtedness to be discharged or cause such acceleration to
be rescinded or annulled and stating that such notice is a "Notice of
Default" hereunder; or
(4) the entry by a court having jurisdiction in the
premises of (A) a decree or order for relief in respect of the Company
or any Subsidiary in an involuntary case or proceeding under any
applicable Federal or State bankruptcy, insolvency, reorganization or
other similar law or (B) a decree or order adjudging the Company or
any Subsidiary a bankrupt or insolvent, or approving as properly filed
a petition seeking reorganization, arrangement, adjustment or
composition of or in respect of the Company or any Subsidiary under
any applicable Federal or State law, or appointing a custodian,
receiver, liquidator, assignee, trustee, sequestrator or other similar
official of the Company or any Subsidiary or of any substantial part
of the Company's property, or ordering the winding up or liquidation
of its affairs, and the continuance of any such decree or order for
relief or for any such other decree or order unstayed and in effect
for a period of 60 consecutive days; or
(5) the commencement by the Company or any Subsidiary of
a voluntary case or proceeding under any applicable Federal or State
bankruptcy, insolvency, reorganization or other similar law or the
consent by it to the entry of a decree or order for relief in respect
of the Company or any Subsidiary in an involuntary case or proceeding
under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law, or the consent by the Company or
any Subsidiary to the appointment of or taking possession by a
custodian, receiver, liquidator, assignee, trustee, sequestrator or
similar official of the Company or any Subsidiary or of any
substantial part of the Company's property, or the making by it of a
general assignment for the benefit of creditors; or
(6) failure to comply with Section 801.
SECTION 502. Acceleration of Maturity, Rescission and Annulment.
If an Event of Default (other than an Event of Default described in Sections
501(5) and (6)) with respect to the Notes at the time Outstanding occurs and is
continuing, then in every such case the Trustee or the Holders of not less than
25% in aggregate principal amount of the Outstanding Notes may declare the
principal amount of and accrued but unpaid interest on all the Notes to be due
and payable immediately, by a notice in writing to the Company (and to the
Trustee if given by Holders) and upon any such declaration such principal amount
and
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accrued but unpaid interest shall become immediately due and payable.
At any time after such a declaration of acceleration with
respect to the Notes has been made and before a judgment or decree for payment
of the money due has been obtained by the Trustee as hereinafter in this
Article provided, the Holders of a majority in principal amount of the
Outstanding Notes, by written notice to the Company and the Trustee, may
rescind and annul such declaration and its consequences if
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(A) all accrued but unpaid interest on all Notes,
(B) the principal of any Notes which have become
due otherwise than by such declaration of acceleration and
interest thereon at the rate borne by the Notes, and
(C) all sums paid or advanced by the Trustee
hereunder and the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents,
counsel, accountants and experts;
and
(2) all Events of Default with respect to the Notes,
other than the nonpayment of the principal of Notes which have become
due solely by such declaration of acceleration, have been cured or
waived as provided in Section 513.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
In the case of any Event of Default described in Section 501(5) or
(6), all unpaid principal of and premium, if any, and accrued interest on the
Notes shall be due and payable immediately without any declaration or other act
on the part of the Trustee or the Holders of Notes.
SECTION 503. Collection of Indebtedness and Suits for
Enforcement by Trustee. The Company covenants that if default is made in the
payment of the principal of or accrued but unpaid interest on or premium, if
any, on any Note as and when the same shall become due and payable, whether at
maturity of the Notes or in connection with any redemption or required purchase
upon a Change of Control, by declaration or otherwise, the Company will, upon
demand of the Trustee, pay to it, for the benefit of the Holders of such Notes,
the whole amount then due and payable on such Notes for principal, premium, if
any, and interest and, to the extent that payment of such interest shall be
legally enforceable, interest on any overdue principal and premium, if
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any, and on any overdue interest, at the rate borne by the Notes, and, in
addition thereto, such further amount as shall be sufficient to cover the costs
and expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents, counsel, accountants and
experts.
If the Company fails to pay such amounts forthwith upon such
demand, the Trustee, in its own name and as trustee of an express trust, may
institute a judicial proceeding for the collection of the sums so due and
unpaid, may prosecute such proceeding to judgment or final decree and may
enforce the same against the Company or any other obligor on the Notes and
collect the monies adjudged or decreed to be payable in the manner provided by
law out of the property of the Company or any other obligor on the Notes,
wherever situated.
If an Event of Default with respect to the Notes occurs and is
continuing, the Trustee may in its discretion proceed to protect and enforce
its rights and the rights of the Holders of Notes by such appropriate judicial
proceedings as the Trustee shall deem most effectual to protect and enforce any
such rights, whether for the specific enforcement of any covenant or agreement
in this Indenture or in aid of the exercise of any power granted herein, or to
enforce any other proper remedy.
SECTION 504. Trustee May File Proofs of Claim. In case of the
pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to the Company or any other obligor on the Notes or the
property of the Company or of such other obligor or their creditors, the
Trustee (irrespective of whether the principal of the Notes shall then be due
and payable as therein expressed or by declaration or otherwise and
irrespective of whether the Trustee shall have made any demand on the Company
for the payment of overdue principal or interest) shall be entitled and
empowered, by intervention in such proceeding or otherwise,
(i) to file and prove a claim for the whole amount of
principal, premium, if any, and interest owing and unpaid in respect
of the Notes and to file such other papers and 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, counsel,
accountants and experts) and of the Holders allowed in such judicial
proceeding, and
(ii) to collect and receive any monies or other property
payable or deliverable on any such claims and to distribute the same
in accordance with Section 506;
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and any custodian, receiver, assignee, trustee, liquidator,
sequestrator or other similar official in any such judicial proceeding
is hereby authorized by each Holder 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 Holders, to pay to the Trustee any
amount due it for the reasonable compensation, expenses, disbursements
and advances of the Trustee, its agents, counsel, accountants and
experts, and any other amounts due the Trustee under Section 607.
Nothing herein contained shall be deemed to authorize the Trustee
to authorize or consent to or accept or adopt on behalf of any Holder any plan
of reorganization, arrangement, adjustment or composition affecting the 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 505. Trustee May Enforce Claims Without Possession of
Note. All rights of action and claims under this Indenture or the Notes may be
prosecuted and enforced by the Trustee without the possession of any of the
Notes or the production thereof in any proceeding relating thereto, and any such
proceeding instituted by the Trustee shall be brought in its own name as trustee
of an express trust, and any recovery of judgment shall, after provision for the
payment of the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents, counsel, accountants and experts, be for the ratable
benefit of the Holders of the Notes in respect of which such judgment has been
recovered.
SECTION 506. Application of Money or Other Property Collected.
Subject to Article Thirteen, any money or other property collected by the
Trustee pursuant to this Article shall be applied in the following order, at
the date or dates fixed by the Trustee and, in case of the distribution of such
money or other property on account of principal, premium, if any, or interest,
upon presentation of the Notes and the notation thereon of the payment if only
partially paid and upon surrender thereof if fully paid:
First: To the payment of all amounts due the Trustee under
Section 607;
Second: To the payment of the amounts then due and unpaid for
principal of and premium, if any, and interest on the Notes in respect
of which or for the benefit of which such money has been collected,
ratably, without preference or priority of any kind, according to the
amounts due and payable on such Notes for principal, premium, if any,
and interest, respectively; and
Third: To the payment of the remainder, if any, to the Company or
any other Person lawfully entitled thereto.
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SECTION 507. Limitation on Suits. No Holder of any Note shall
have any right to institute any proceeding, judicial or otherwise, with respect
to this Indenture, or for the appointment of a receiver or trustee, or for any
other remedy hereunder, unless
(1) such Holder has previously given written notice to
the Trustee of a continuing Event of Default with respect to the
Notes;
(2) the Holders of not less than 25% in aggregate
principal amount of the Outstanding Notes shall have made written
request to the Trustee to institute proceedings in respect of such
Event of Default in its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee
indemnity satisfactory to it against the costs, expenses and
liabilities to be Incurred in compliance with such request;
(4) the Trustee for 60 days after its receipt of such
notice, request and offer of indemnity has failed to institute any
such proceedings; and
(5) no direction inconsistent with such written request
has been given to the Trustee during such 60-day period by the Holders
of a majority in principal amount of the Outstanding Notes;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders, or to obtain priority or preference over any other Holders or to
enforce any right under this Indenture, except in the manner herein provided
and for the equal and ratable benefit of all such Holders.
Anything in this Indenture or the Notes to the contrary
notwithstanding, the Holder of any Note, without the consent of either the
Trustee or the Holder of any other Note, in his own behalf and for his own
benefit may enforce, and may institute and maintain any proceeding suitable to
enforce, his rights of conversion as provided herein.
SECTION 508. Right of Holders To Convert and To Receive
Principal, Premium and Interest. Subject to the provisions of Article Thirteen
hereof, but notwithstanding any other provision in this Indenture, the Holder of
any Note shall have the right to convert such Note in accordance with this
Indenture, to receive payment of the principal of and premium, if any, and
interest on such Note when due as set forth in this Indenture and to institute
suit for the enforcement of any such
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payment, and such rights shall not be impaired or affected without the consent
of such Holder.
SECTION 509. Restoration of Rights and Remedies. If the Trustee
or any Holder has instituted any proceeding to enforce any right or remedy under
this Indenture and such proceeding has been discontinued or abandoned for any
reason, or has been determined adversely to the Trustee or to such Holder, then
and in every such case, subject to any determination in such proceeding, the
Company, the Trustee and the Holders shall be restored severally and
respectively to their former positions hereunder and thereafter all rights and
remedies of the Trustee and the Holders shall continue as though no such
proceeding had been instituted.
SECTION 510. Rights and Remedies Cumulative. Except as otherwise
provided with respect to the replacement or payment of mutilated, destroyed,
lost or stolen Notes in the last paragraph of Section 306, no right or remedy
herein conferred upon or reserved to the Trustee or to the Holders is intended
to be exclusive of any other right or remedy, and every right and remedy shall,
to the extent permitted by law, be cumulative and in addition to every other
right and remedy given hereunder or now or hereafter existing at law or in
equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
SECTION 511. Delay or Omission Not Waiver. No delay or omission
of the Trustee or of any Holder of any Notes to exercise any right or remedy
accruing upon any Event of Default shall impair any such right or remedy or
constitute a waiver of any such Event of Default or an acquiescence therein.
Every right and remedy given by this Article or by law to the Trustee or to the
Holders may be exercised from time to time, and as often as may be deemed
expedient, by the Trustee or by the Holders, as the case may be.
SECTION 512. Control by Holders. The Holders of a majority in
principal amount of the Outstanding Notes shall have the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the Trustee, or exercising any trust or power conferred on the Trustee with
respect to Notes; provided that
(1) such direction shall not be in conflict with any
rule of law or with this Indenture;
(2) the Trustee may take any other action deemed proper
by the Trustee which is not inconsistent with such direction; and
(3) subject to Section 601, the Trustee need not take
any action which might involve the Trustee in personal
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liability or be unduly prejudicial to the Holders not joining therein.
SECTION 513. Waiver of Past Defaults. The Holders of not less
than a majority in principal amount of the Outstanding Notes may on behalf of
the Holders of all the Notes waive any past default hereunder and its
consequences, except a default
(1) in the payment of the principal of or premium, if
any, or interest on any Notes, or
(2) a failure by the Company to convert any Notes into
Common Stock, or
(3) in respect of a covenant or provision hereof which
under Article Nine cannot be modified or amended without the consent
of the Holder of each Outstanding Note.
Upon any such waiver, such default shall cease to exist, and
any Event of Default arising therefrom shall be deemed to have been cured, for
every purpose of this Indenture and the Notes; but no such waiver shall extend
to any subsequent or other default or impair any right consequent thereon.
SECTION 514. Undertaking for Costs. All parties to this
Indenture agree, and each Holder of any Note by his acceptance thereof shall be
deemed to have agreed, that any court may in its discretion require, in any suit
for the enforcement of any right or remedy under this Indenture, or in any suit
against the Trustee for any action taken, suffered or omitted by it as Trustee,
the filing by any party litigant in such suit of an undertaking to pay the costs
of such suit, and that such court may in its discretion assess reasonable costs,
including reasonable attorneys, fees, against any party litigant in such suit,
having due regard to the merits and good faith of the claims or defenses made by
such party litigant; but the provisions of this Section shall not apply to any
suit instituted by the Company, to any suit instituted by the Trustee, to any
suit instituted by any Holder, or group of Holders, holding in the aggregate
more than 10% in principal amount of the Outstanding Notes, or to any suit
instituted by any Holder for the enforcement of the payment of the principal of
or premium, if any, or interest on any Note on or after the due date expressed
in such Note or to any suit for the enforcement of the right to convert any Note
in accordance with this Indenture.
SECTION 515. Waiver of Stay or Extension Laws. The Company
covenants (to the extent that it may lawfully do so) that it will not at any
time insist upon, or plead, or in any manner whatsoever claim or take the
benefit or advantage of, any stay, usury or extension law wherever enacted, now
or at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit
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or advantage of any such law and covenants that it will not hinder, delay or
impede the execution of any power herein granted to the Trustee, but will
suffer and permit the execution of every such power as though no such law had
been enacted.
ARTICLE SIX
The Trustee
SECTION 601. Certain Duties and Responsibilities. (a)
Except during the continuance of an Event of Default,
(1) the Trustee undertakes to perform such duties and
only such duties as are specifically set forth in this Indenture, 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 certificates or
opinions furnished to the Trustee and conforming to the requirements
of this Indenture; but in the case of any such certificates or
opinions which by any provision hereof are specifically required to be
furnished to the Trustee, the Trustee shall be under a duty to
examine the same to determine whether or not they conform to the
requirements of this Indenture.
(b) In case an Event of Default 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 man would exercise or use under the circumstances in the conduct of his
own affairs.
(c) No provision of this Indenture shall be construed to relieve
the Trustee from liability for its own negligent action, its own negligent
failure to act, or its own willful misconduct, except that
(1) this Subsection shall not be construed to limit the
effect of Subsection (a) of this Section;
(2) the Trustee shall not be liable for any error or
judgment made in good faith by a Responsible Officer, unless it shall
be proved that the Trustee was negligent in ascertaining the pertinent
facts;
(3) the Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance
with the direction of the Holders of a majority in principal amount of
the Outstanding Notes, determined as provided in Section 512, relating
to the time, method and place of conducting any proceeding for any
remedy available to the Trustee, or exercising any trust or power
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conferred upon the Trustee, under this Indenture with respect to the
Notes; and
(4) 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 hereunder,
or in the exercise of any of its rights or powers, if it shall have
reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably
assured to it.
(d) Whether or not therein 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
Section.
SECTION 602. Notice of Defaults. Within 90 days after the
occurrence of any default hereunder with respect to the Notes, the Trustee shall
transmit by mail to all Holders of Notes, as their names and addresses appear in
the Note Register, notice of such default hereunder known to the Trustee, unless
such defaults shall have been cured or waived; provided, however, that except in
the case of a default in the payment of the principal of or premium, if any, or
interest on any Note, the Trustee shall be protected in withholding such notice
if and so long as the board of directors, the executive committee or a trust
committee of directors or Responsible Officers of the Trustee in good faith
determine that the withholding of such notice is in the interest of the Holders
of Notes; and provided further that in the case of any default of the character
specified in Section 501(3) no such notice to Holders shall be given until at
least 60 days after the occurrence thereof. For the purpose of this Section,
the term "default" means any event which is, or after notice or lapse of time or
both would become, an Event of Default.
SECTION 603. Certain Rights of Trustee. Subject to the
provisions of Section 601:
(a) the Trustee may rely and shall be protected in
acting or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of Indebtedness
or other paper or document believed by it to be genuine and to have
been signed or presented by the proper party or parties;
(b) any request or direction of the Company mentioned
herein shall be sufficiently evidenced by a Company Request or Company
Order and any resolution of the Board of Directors may be sufficiently
evidenced by a Board Resolution;
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(c) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior
to taking, suffering or omitting any action hereunder, the Trustee
(unless other evidence be herein specifically prescribed) may, in the
absence of bad faith on its part, rely upon an Officers' Certificate;
(d) the Trustee may consult with counsel and the written advice of
such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered
or omitted by it hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Indenture at the request or
direction of any of the Holders pursuant to this Indenture, unless
such Holders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which might be
Incurred by it in compliance with such request or direction;
(f) 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,
Act, Company Order, Company Request, Officers' Certificate, direction,
consent, order, bond, debenture, note, other evidence of Indebtedness
or other paper or document, but the Trustee, in its discretion, may
make such further inquiry or investigation into such facts or matters
as it may see fit and, if the Trustee shall determine to make such
further inquiry or investigation, it shall be entitled to examine the
books, records and premises of the Company, personally or by agent or
attorney; and
(g) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys and the Trustee shall not be responsible
for any misconduct or negligence on the part of any agent or attorney
appointed with due care by it hereunder.
SECTION 604. Not Responsible for Recitals or Issuance of Notes.
The recitals contained herein and in the Notes, except the Trustee's
certificates of authentication, shall be taken as the statements of the Company,
and the Trustee or any Authenticating Agent assumes no responsibility for their
correctness. The Trustee makes no representations as to the validity or
sufficiency of this Indenture or of the Notes. Neither the Trustee nor any
Authenticating Agent shall be accountable for the use or application by the
Company of Notes or the proceeds thereof.
SECTION 605. May Hold Notes. The Trustee, any Authenticating
Agent, any Paying Agent, any Conversion Agent, any
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Note Registrar or any other agent of the Company, in its individual or any
other capacity, may become the owner or pledgee of Notes and, subject to
Sections 608 and 613, may otherwise deal with the Company with the same rights
it would have if it were not Trustee, Authenticating Agent, Paying Agent,
Conversion Agent, Note Registrar or such other agent.
SECTION 606. Money Held in Trust. Money held by the Trustee in
trust hereunder need not be segregated from other funds except to the extent
required by law. The Trustee shall be under no liability for interest on any
money received by it hereunder except as otherwise agreed with the Company.
SECTION 607. Compensation and Reimbursement. The Company agrees
(1) to pay to the Trustee from time to time reasonable
compensation for all services rendered by it hereunder (which
compensation shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust);
(2) except as otherwise expressly provided herein, to
reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances Incurred or made by the Trustee in
accordance with any provision of this Indenture (including the
reasonable compensation and the expenses and disbursements of its
agents, counsel, accountants and experts), except any such expense,
disbursement or advance as may be attributable to its negligence,
willful misconduct or bad faith; and
(3) to indemnify the Trustee for, and to hold it
harmless against, any loss, liability or expense Incurred without
negligence, willful misconduct or bad faith on its part, arising out
of or in connection with the acceptance or administration of the trust
or trusts hereunder, including the costs and expenses of defending
itself against or investigating any claim or liability in connection
with the exercise or performance of any of its powers or duties
hereunder. The Trustee shall notify the Company promptly of any claim
for which it may seek indemnity. Failure by the Trustee to so notify
the Company shall not relieve the Company of its obligations
hereunder. The Company shall defend the claim and the Trustee may
have separate counsel and the Company shall pay the fees and expenses
of such counsel.
The obligations of the Company under this Section 607 to
compensate and indemnify the Trustee and to pay or reimburse the Trustee for
expenses, disbursements and advances shall constitute additional Indebtedness
hereunder and shall survive the satisfaction and discharge of this Indenture.
To secure the Company's payment obligations in this Section 607, the Company
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and the Holders agree that the Trustee shall have a Lien prior to the Notes on
all money or property held or collected by the Trustee as such except money or
property held in trust to pay principal of or premium, if any, or interest on
particular Notes (provided that the foregoing exception shall not be applicable
to money or property subject to the provisions of Section 506) and such Lien
shall survive the satisfaction and discharge of the Indenture and any other
termination under any bankruptcy law. When the Trustee Incurs expenses or
renders services in connection with an Event of Default of Section 501(4) or
501(5), the Holders by their acceptance of the Notes hereby agree that such
expenses and the compensation for such services are intended to constitute
expenses of administration under any bankruptcy law. "Trustee" for the
purposes of this Section 607 shall include any predecessor Trustee, but the
negligence or bad faith of any Trustee shall not affect the indemnification of
any other Trustee.
SECTION 608. Disqualification; Conflicting Interests. If the
Trustee has or shall acquire a conflicting interest within the meaning of the
Trust Indenture Act, the Trustee shall either eliminate such interest or resign,
to the extent and in the manner provided by, and subject to the provisions of,
the Trust Indenture Act and this Indenture.
SECTION 609. Corporate Trustee Required; Eligibility. There
shall at all times be a Trustee hereunder which shall be a corporation organized
and doing business under the laws of the United States of America, any State
thereof or the District of Columbia, authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus of at least
$50,000,000 subject to supervision or examination by Federal or State or
District of Columbia authority and having a corporate trust office in New York,
New York, to the extent there is such an institution eligible and willing to
serve. If such corporation publishes reports of condition at least annually,
pursuant to law or to the requirements of said supervising or examining
authority, then for the purposes of this Section, the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. If at
any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section, it shall resign immediately in the manner and with
the effect hereinafter specified in this Article.
SECTION 610. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no appointment of a successor
Trustee pursuant to this Article shall become effective until the acceptance of
appointment by the successor Trustee in accordance with the applicable
requirements of Section 611.
(b) The Trustee may resign at any time by giving written notice
thereof to the Company. If the instrument of
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acceptance by a successor Trustee required by Section 611 shall not have been
delivered to the Trustee within 30 days after the giving of such notice of
resignation the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
(c) The Trustee may be removed at any time by Act of the Holders
of a majority in principal amount of the Outstanding Notes, delivered to the
Trustee and to the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 608
after written request therefor by the Company or by any Holder who has
been a bona fide Holder of a Note for at least six months, or
(2) the Trustee shall cease to be eligible under Section
609 and shall fail to resign after written request therefor by the
Company or by any such Holder, or
(3) the Trustee shall become incapable of acting or
shall be adjudged a bankrupt or insolvent or a receiver of the Trustee
or of its property shall be appointed or any public officer shall take
charge or control of the Trustee or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation.
then, in any such case, (i) the Company by a Board Resolution may remove the
Trustee, or (ii) subject to Section 514, any Holder who has been a bona fide
Holder of a Note for at least six months may, on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor Trustee or Trustees.
(e) If the Trustee shall resign, be removed or become incapable
of acting or if a vacancy shall occur in the office of Trustee for any cause,
the Company, by a Board Resolution, shall promptly appoint a successor Trustee
or Trustees and shall comply with the applicable requirements of Section 611.
If, within one year after such resignation, removal or incapability, or the
occurrence of such vacancy, a successor Trustee shall be appointed by Act of
the Holders of a majority in aggregate principal amount of the Outstanding
Notes delivered to the Company and the retiring Trustee, the successor Trustee
so appointed shall, forthwith upon its acceptance of such appointment in
accordance with the applicable requirements of Section 611, become the
successor Trustee and supersede the successor Trustee appointed by the Company.
If no successor Trustee shall have been so appointed by the Company or the
Holders and accepted appointment in the manner required by Section 611, the
Trustee or any Holder who has been a bona fide Holder of a Note for at least
six months may, on behalf of
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himself and all others similarly situated, petition any court of competent
jurisdiction for the appointment of a successor Trustee.
(f) The Company shall give notice of each resignation and each
removal of the Trustee and each appointment of a successor Trustee by mailing
written notice of such event by first-class mail, postage prepaid, to all
Holders of Notes as their names and addresses appear in the Note Register.
Each notice shall include the name of the successor Trustee and the address of
the Corporate Trust Office.
SECTION 611. Acceptance of Appointment by Successor. (a) In
case of the appointment hereunder of a successor Trustee, every such successor
Trustee so appointed shall execute, acknowledge and deliver to the Company and
to the retiring Trustee an instrument accepting such appointment, and thereupon
the resignation or removal of the retiring Trustee shall become effective and
such successor Trustee, without any further act, deed or conveyance, shall
become vested with all the rights, powers, trust and duties of the retiring
Trustee, but, on the request of the Company or the successor Trustee, such
retiring Trustee shall, upon payment of its charges pursuant to Section 607,
execute and deliver an instrument transferring to such successor Trustee all the
rights, powers and trusts of the retiring Trustee and shall duly assign,
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder.
(b) 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 paragraph (a) of this Section.
(c) No successor Trustee shall accept its appointment unless at
the time of such acceptance such successor Trustee shall be qualified and
eligible under this Article.
SECTION 612. Xxxxxx, Conversion, Consolidation or Succession to
Business. Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Trustee shall be a xxxxx, or
any corporation succeeding to all or substantially all the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder;
provided such corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto. In case any Notes shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver
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the Notes so authenticated with the same effect as if such successor Trustee
had itself authenticated such Notes.
SECTION 613. Preferential Collection of Claims Against Company.
The Trustee shall comply with Section 311(a) of the Trust Indenture Act,
excluding any creditor relationship listed in Section 311(b) of the Trust
Indenture Act. A Trustee who has resigned or been removed shall be subject to
Section 311(a) of the Trust Indenture Act to the extent indicated therein.
SECTION 614. Appointment of Authenticating Agent. At any time
when any of the Notes remain Outstanding the Trustee may appoint an
Authenticating Agent or Agents with respect to the Notes which shall be
authorized to act on behalf of the Trustee to authenticate Notes issued upon
exchange, registration of transfer or partial redemption thereof or pursuant to
Section 306, and Notes so authenticated shall be entitled to the benefits of
this Indenture and shall be valid and obligatory for all purposes as if
authenticated by the Trustee hereunder. Wherever reference is made in this
Indenture to the authentication and delivery of Notes by the Trustee or the
Trustee's certificate of authentication such reference shall be deemed
to include authentication and delivery on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication executed on behalf of
the Trustee by an Authenticating Agent. Each Authenticating Agent shall be
acceptable to the Company and shall at all times be a corporation organized and
doing business under the laws of the United States of America, any State
thereof or the District or Columbia authorized under such laws to act as
Authenticating Agent, having a combined capital and surplus of not less than
$50,000,000 and subject to supervision or examination by Federal or State
authority. If such Authenticating Agent publishes reports of condition at least
annually, pursuant to law or to the requirements of said supervising or
examining authority, then for the purposes of this Section, the combined capital
and surplus of such Authenticating Agent shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. If at any time an Authenticating Agent shall cease to be eligible in
accordance with the provisions of this Section, such Authenticating Agent shall
resign immediately in the manner and with the effect specified in this Section.
Any corporation into which an Authenticating Agent may be merged
or converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent; provided such corporation shall be otherwise eligible
under this Section, without the execution or filing of any paper or any further
act on the part of the Trustee or the Authenticating Agent.
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An Authenticating Agent may resign at any time by giving written
notice thereof to the Trustee and to the Company. The Trustee may at any time
terminate the agency of an Authenticating Agent by giving written notice
thereof to such Authenticating Agent and to the Company. Upon receiving such a
notice of resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall mail written notice of
such appointment by first-class mail, postage prepaid, to all Holders of Notes,
as their names and addresses appear in the Note Register. Any successor
Authenticating Agent upon acceptance of its appointment hereunder shall become
vested with all the rights, powers and duties of its predecessor hereunder,
with like effect as if originally named as an Authenticating Agent. No
successor Authenticating Agent shall be appointed unless eligible under the
provisions of this Section.
The Company agrees to pay to each Authenticating Agent from time
to time reasonable compensation for its services under this Section.
If an appointment is made pursuant to this Section, the Notes may
have endorsed thereon, in addition to the Trustee's certificate of
authentication, an alternate certificate of authentication in the following
form:
This is one of the Notes described in the within mentioned
Indenture.
IBJ XXXXXXXX BANK & TRUST COMPANY,
As Trustee
By:
-----------------------------------
As Authenticating Agent
By:
-----------------------------------
Authorized Signatory
ARTICLE SEVEN
Holders' Lists and Reports by Trustee and Company
SECTION 701. Company To Furnish Trustee Names and Addresses of
Holders. The Company will furnish or cause to be furnished to the Trustee
(a) semiannually, not later than 15 days after each
Regular Record Date, a list, in such form as the Trustee may
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reasonably require, of the names and addresses of the Holders as of
such Regular Record Date, and
(b) at such other times as the Trustee may request in
writing, within 30 days after the receipt by the Company of any such
request, a list of similar form and content as of a date not more than
15 days prior to the time such list is furnished;
provided, however, that so long as the Trustee is the Note Registrar no such
list shall be required to be furnished to the Trustee. If Any Person other
than the Trustee is the Note Registrar for the Notes, the Company shall not be
required to furnish to such Person any of the lists described in Section 701(a)
and (b).
SECTION 702. Preservation of Information; Communications to
Holders. (a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list furnished to the Trustee as provided in Section 701 and the names and
addresses of Holders received by the Trustee in its capacity as Note Registrar.
The Trustee may destroy any list furnished to it as provided in Section 701
upon receipt of a new list so furnished.
(b) If three or more Holders (herein referred to as "applicants")
apply in writing to the Trustee, and furnish to the Trustee reasonable proof
that each such applicant has owned a Note for a period of at least six months
preceding the date of such application, and such application states that the
applicants desire to communicate with other Holders with respect to their
rights under this Indenture or under the Notes and is accompanied by a copy of
the form of proxy or other communication which such applicants propose to
transmit, then the Trustee shall, within five business days after the receipt
of such application, at its election, either
(i) afford such applicants access to the information
preserved at the time by the Trustee in accordance with Section
702(a), or
(ii) inform such applicants as to the approximate number
of Holders whose names and addresses appear in the information
preserved at the time by the Trustee in accordance with Section
702(a), and as to the approximate cost of mailing to such Holders the
form of proxy or other communication, if any, specified in such
application.
If the Trustee shall elect not to afford such applicants
access to such information, the Trustee shall, upon the written
request of such applicants, mail to each Holder whose name and address
appear in the information preserved at the time by the Trustee in
accordance with Section 702(a) a copy of the
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form of proxy or other communication which is specified in such request, with
reasonable promptness after a tender to the Trustee of the material to be
mailed and of payment, or provision for the payment, of the reasonable expenses
of mailing, unless within five days after such tender the Trustee shall mail to
such applicants and file with the Commission, together with a copy of the
material to be mailed, a written statement to the effect that, in the opinion
of the Trustee, such mailing would be contrary to the best interest of the
Holders or would be in violation of applicable law. Such written statement
shall specify the basis of such opinion. If the Commission, after opportunity
for a hearing upon the objections specified in the written statement so filed,
shall enter an order refusing to sustain any of such objections or if, after
the entry of an order sustaining one or more of such objections, the Commission
shall find, after notice and opportunity for hearing, that all the objections
so sustained have been met and shall enter an order so declaring, the Trustee
shall mail copies of such material to all such Holders with reasonable
promptness after the entry of such order and the renewal of such tender;
otherwise the Trustee shall be relieved of any obligation or duty to such
applicants respecting their application.
(c) Every Holder of Notes, by receiving and holding the same,
agrees with the Company and the Trustee that neither the Company nor the
Trustee nor any agent of either of them shall be held accountable by reason of
the disclosure of any such information as to the names and addresses of the
Holders,in accordance with Section 702(b), regardless of the source from which
such information was derived, and that the Trustee shall not be held
accountable by reason of mailing any material pursuant to a request made under
Section 702(b).
SECTION 703. Reports by Trustee. (a) Within 60 days after May
15 of each year commencing with the year 1997, the Trustee shall transmit by
mail to all Holders, as their names and addresses appear in the Note Register,
such reports as may be required by the Trust Indenture Act in the manner
provided therein.
(b) A copy of each such report shall, at the time of such
transmission to Holders, be filed by the Trustee with each stock exchange upon
which the Notes are listed, with the Commission and with the Company. The
Company will notify the Trustee when the Notes are listed on any stock
exchange.
SECTION 704. Reports by Company. The Company shall:
(1) file with the Trustee, within 15 days after the
Company is required to file the same with the Commission, copies of
the annual reports and of the information, documents and other reports
(or copies of such portions of any of the foregoing as the Commission
may from time to time by rules and regulations prescribe) which the
Company may be
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required to file with the Commission pursuant to Section 13 or Section
15(d) of the Exchange Act; or, if the Company is not required to file
information, documents or reports pursuant to either of said Sections,
then it shall file with the Trustee and the Commission, in accordance
with rules and regulations prescribed from time to time by the
Commission, such of the supplementary and periodic information,
documents and reports which may be required pursuant to Section 13 of
the Exchange Act in respect of a security listed and registered on a
national securities exchange as may be prescribed from time to time in
such rules and regulations;
(2) file with the Trustee and the Commission, in
accordance with rules and regulations prescribed from time to time by
the Commission, such additional information, documents and reports
with respect to compliance by the Company with the conditions and
covenants of this Indenture as may be required from time to time by
such rules and regulations;
(3) transmit by mail to all Holders, as their names and
addresses appear in the Note Register, within 30 days after the filing
thereof with the Trustee, such summaries of any information, documents
and reports required to be filed by the Company pursuant to paragraphs
(1) and (2) of this Section as may be required by rules and
regulations prescribed from time to time by the Commission; and
(4) file with the Trustee a certificate of the principal
executive officer, the principal financial officer or the principal
accounting officer of the Company on or before May 1 in each year,
commencing with the year 1997 stating whether or not, to the knowledge
of the signer, the Company has complied with all conditions and
covenants on its part contained in this Indenture, and, if the signer
has obtained knowledge of any default by the Company in the
performance, observance or fulfillment of any such condition or
covenant, specifying each such default and the nature thereof. For
the purpose of this Section 704, compliance shall be determined
without regard to any grace period or requirement of notice provided
pursuant to the terms of this Indenture.
SECTION 705. Reports by Note Registrar. If the Company shall
appoint a Person other than the Trustee to serve as the Note Registrar, the Note
Registrar shall be required to deliver to the Trustee reports in such form as
the Trustee may reasonably require. Such reports shall be sent to the Trustee
by facsimile within one Business Day after each interest Payment Date and after
the principal of any Note becomes due, upon maturity, by redemption, as a result
of a Change of Control or otherwise (the "Payment Dates"), and a copy of such
reports shall also be delivered to Trustee by overnight courier or shall be
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hand delivered. Upon three days prior written notice from the Trustee, the
Note Registrar may also be required to provide additional reports reasonably
requested by the Trustee on dates other than Payment Dates. The reports which
the Note Registrar shall be required to provide to the Trustee shall include
the following information:
(1) the outstanding amount of all such Notes issued
pursuant to the Indenture as of the Regular Record Date last preceding
the date such report is furnished, including information as to the
outstanding amount of such Notes;
(2) a complete list of the names and addresses of the
Holders of such Outstanding Notes as of the Regular Record Date last
preceding the date such report is furnished, including information as
to the type and amount of such Notes held by each such Holder; and
(3) such additional information, documents and reports as
the Trustee may reasonably request;
provided, however, that if any payment of principal or interest
is not made by 4:00 p.m. Eastern Standard Time on a Payment Date with respect to
any Notes at the time Outstanding, the Note Registrar will be required to
provide notice of such nonpayment to the Trustee by telephone by 5:00 p.m.
Eastern Standard Time on the date upon which such nonpayment occurs and to
deliver to the Trustee on the day following the date upon which such nonpayment
occurs the information required pursuant to (1) and (2) above.
ARTICLE EIGHT
Consolidation, Merger, Conveyance, Transfer, Sale or Lease
SECTION 801. Company May Consolidate, Etc., on Certain Terms.
The Company shall not consolidate with or merge into any other corporation or
convey, transfer, sell or lease its properties and assets as, or substantially
as, an entirety to any Person, unless:
(1) the corporation formed by such consolidation or into
which the Company is merged or the Person which acquires by
conveyance, transfer, sale or lease the properties and assets of the
Company as, or substantially as, an entirety shall be a corporation
organized and existing under the laws of the United States of America,
any State thereof or the District of Columbia and shall, by an
indenture supplemental hereto executed and delivered to the Trustee,
in form satisfactory to the Trustee, expressly assume the due and
punctual payment of the principal of and premium, if any, and interest
on all the Notes and the performance of every covenant of this
Indenture on the part of the Company to be performed or observed;
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(2) immediately after giving effect to such transaction,
no Event of Default, or event which after notice or lapse of time, or
both, would become an Event of Default, shall have occurred and be
continuing; and
(3) the Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel acceptable to the
Trustee, each stating that such consolidation, merger, conveyance,
transfer, sale or lease and such supplemental indenture (if any)
comply with this Article and that all conditions precedent herein
provided for relating to such transaction have been complied with.
SECTION 802. Successor Corporation Substituted. Upon any
consolidation by the Company with or merger by the Company into any other
corporation or any conveyance, transfer, sale or lease of the property and
assets of the Company as, or substantially as, an entirety in accordance with
Section 801, the successor corporation formed by such consolidation or into
which the Company is merged or to which such conveyance, transfer, sale or
lease is made shall 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 corporation had been named as the Company herein, and
thereafter, except in the case of a lease, the predecessor corporation shall be
relieved of all obligations and covenants under this Indenture and the Notes.
ARTICLE NINE
Supplemental Indentures
SECTION 901. Supplemental Indentures Without Consent of Holders.
Without the consent of any Holders, the Company, when authorized by a Board
Resolution, and the Trustee, at any time and from time to time, may enter into
one or more indentures supplemental hereto, in form satisfactory to the
Trustee, for any of the following purposes:
(1) to make provisions with respect to the conversion
rights of Holders of Notes pursuant to Section 1209; or
(2) to evidence the succession of another corporation to
the Company and the assumption by any such successor of the covenants,
agreements and obligations of the company herein and in the Notes; or
(3) to add to the covenants of the Company for the
benefit of the Holders of Notes or to surrender any right or power
herein conferred upon the Company; or
(4) to add any additional Events of Default; or
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(5) to add to or change any of the provisions of this
Indenture to such extent as shall be necessary to permit or facilitate
the issuance of Notes in bearer form, registrable or not registrable
as to principal, and with or without interest coupons; or
(6) to evidence and provide for the acceptance of
appointment hereunder by a successor Trustee; or
(7) to secure the Notes; or
(8) to cure any ambiguity, to correct or supplement any
provision herein which may be inconsistent with any other provision
herein, or to make any other provisions with respect to matters or
questions arising under this Indenture; provided that such action
shall not adversely affect the interests of the Holders of Notes in
any material respect; or
(9) to modify, eliminate or add to the provisions of this
Indenture to such extent as shall be necessary to effect or maintain
the qualification of this Indenture under the Trust Indenture Act, or
under any similar Federal statute hereafter enacted.
SECTION 902. Supplemental Indentures with Consent of Holders.
With the consent of the Holders of not less than a majority in aggregate
principal amount of the Outstanding Notes, by Act of said Holders delivered to
the Company and the Trustee, the Company, when authorized by a Board Resolution,
and the Trustee may enter into an indenture or indentures supplemental hereto
for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Indenture or of modifying in any
manner the rights of the Holders of Notes under this Indenture; provided,
however, that no such supplemental indenture shall, without the consent of the
Holder of each Outstanding Note affected thereby,
(1) extend the fixed maturity of any Note, or reduce the
rate or extend the time of payment of interest thereon, or reduce the
principal amount thereof or any premium thereon, or reduce any amount
payable on redemption or required purchase by the Company thereof, or
impair or affect the right of any Holder to institute suit for the
payment thereof on or after the date on which the same shall be become
due and payable, or make the principal thereof or any premium or
interest thereon payable at a place or in any coin or currency other
than that provided for in the form of Note set forth in Article Two or
modify the provisions of this Indenture with respect to the
subordination of the Notes in a manner adverse to the Holders, or
impair the right to convert the Notes into Common Stock or the right
to require the Company to purchase the Notes upon the
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occurrence of a Change of Control, subject to the terms set forth
herein;
(2) reduce the percentage in principal amount of the
Outstanding Notes, the consent of whose Holders is required for any
such supplemental indenture, or the consent of whose Holders is
required for any waiver (of compliance with certain provisions of this
Indenture or certain defaults hereunder and their consequences)
provided for in this Indenture; or
(3) modify any of the provisions of this Section or
Section 513, except to increase any such percentage or to provide that
certain other provisions of this Indenture cannot be modified or
waived without the consent of the Holder of each Outstanding Note
affected thereby; provided, however, that this clause shall not be
deemed to require the consent of any Holder with respect to changes in
the references to "the Trustee" and concomitant changes in this
Section.
It shall not be necessary for any Act of Holders under this
Section to approve the particular form of any proposed supplemental indenture,
but it shall be sufficient if such Act shall approve the substance thereof.
Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to the provisions of this Section 902, the
Company shall give notice by first-class mail, postage prepaid to all Holders
of Notes listed in the Note Register, setting forth in general terms the
substance of such supplemental indenture. Any failure of the Company so to
give such notice or any defect therein shall not, however, in any way impair or
affect the validity of any such supplemental indenture.
SECTION 903. Execution of Supplemental Indentures. In
executing, or accepting the additional trusts created by, any supplemental
indenture permitted by this Article or the modifications thereby of the trusts
created by this Indenture, the Trustee shall be entitled to receive, and
(subject to Section 601) shall be fully protected in relying upon, an opinion of
Counsel stating that the execution of such supplemental indenture is authorized
or permitted by this Indenture. The Trustee may, but shall not be obligated to,
enter into any such supplemental indenture which affects the Trustee's own
rights, duties or immunities under this Indenture or otherwise.
SECTION 904. Effect of Supplemental Indentures. Upon the
execution of any supplemental indenture under this Article, this Indenture shall
be modified in accordance therewith, and such supplemental indenture shall form
a part of this Indenture for all purposes, and every Holder of Notes theretofore
or thereafter authenticated and delivered hereunder shall be bound thereby.
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SECTION 905. Conformity with Trust Indenture Act. Every
supplemental indenture executed pursuant to this Article shall conform to the
requirements of the Trust Indenture Act as then in effect.
SECTION 906. Reference in Notes to Supplemental Indentures.
Notes authenticated and delivered after the execution of any supplemental
indenture pursuant to this Article may, and shall if required by Trustee, bear
a notation in form approved by the Trustee as to any matter provided for in
such supplemental indenture. If the Company or the Trustee shall so determine,
new Notes so modified as to conform, in the opinion of the Trustee and the
Company, to any such supplemental indenture may be prepared and executed by the
Company and authenticated and delivered by the Trustee in exchange for
Outstanding Notes without cost to the Holders thereof.
ARTICLE TEN
Covenants
SECTION 1001. Payment of Principal, Premium and Interest. The
Company covenants and agrees that it will duly and punctually pay the principal
of and premium, if any, and interest on each of the Notes at the place, at the
respective times and in the manner provided in the Notes and in this Indenture.
Interest on the Notes may be paid by mailing checks for the
interest payable to the Holders of Notes entitled thereto as they shall appear
on the Note Register.
SECTION 1002. Office for Notices, Payments and Conversions,
Etc. So long as any of the Notes remain outstanding, the Company will maintain
in New York, New York, an office or agency where the Notes may be presented or
surrendered for payment, where the Notes may be surrendered for registration of
transfer or for exchange as in this Indenture provided, where the Notes may be
surrendered for conversion and where notices and demands to or upon the Company
in respect of the Notes or of this Indenture may be served. The Company will
give prompt written notice to the Trustee of the location, and any change in
location, of any such office or agency. If at any time, the Company shall fail
to maintain any such required office or agency or shall fail to furnish the
Trustee with the address thereof, such presentations, surrenders, notices, and
demands may be made or served at the Corporate Trust Office of the Trustee and
the Company hereby appoints the Trustee at Xxx Xxxxx Xxxxxx, Xxx Xxxx, X.X.
00000, as its agent to receive all such presentations, surrenders, notices and
demands.
The Company may also from time to time designate one or more
other offices or agencies (in or outside New York, New York) where the Notes
may be presented or surrendered for any or all such purposes and may from time
to time rescind such
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designations; provided, however, that no such designation or rescission shall
in any manner relieve the Company of its obligation to maintain an office or
agency in New York, New York, for such purposes. The Company will give prompt
written notice to the Trustee of any such designation or rescission and of any
change in the location of any such other office or agency.
SECTION 1003. Money for Notes To Be Held in Trust. If the
Company shall at any time act as its own Paying Agent with respect to the
Notes, it will, on or before each due date of the principal of, or premium, if
any, or interest on any of the Notes, segregate and hold in trust for the
benefit of the Persons entitled thereto a sum sufficient to pay the principal,
premium, if any, or interest so becoming due until such sums shall be paid to
such Persons or otherwise disposed of as herein provided. The Company shall
take such action on or before 10:00 a.m. Eastern Standard Time on each such due
date and shall notify the Trustee of its action or failure so to act by
delivering a notice by facsimile to the Trustee no later than 11:00 a.m.
Eastern Standard Time on each such due date.
Whenever the Company shall have one or more Paying Agents for
the Notes, it will, prior to each due date of the principal of, or premium, if
any, or interest on, any Notes, deposit with a Paying Agent a sum sufficient to
pay the principal, premium or interest so becoming due, such sum to be held in
trust for the benefit of the Persons entitled to such principal, premium or
interest. The Company shall take such action on or before 10:00 a.m. Eastern
Standard Time on each such due date and shall notify the Trustee (unless the
Trustee is the Paying Agent) of its action or failure so to act by delivering a
notice by facsimile to the Trustee no later than 11:00 a.m. Eastern Standard
Time on each such due date.
The Company will cause each Paying Agent other than the Trustee
to execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject to the provisions of this Section, that
such Paying Agent will,
(1) hold all sums held by it for the payment of the principal
of, and premium, if any, and interest on the Notes in trust for the
benefit of the Persons entitled thereto until such sums shall be paid to
such Persons or otherwise disposed of as herein provided;
(2) give the Trustee notice of any default by the Company (or
any other obligor upon the Notes) in the making of any payment of
principal, or premium, if any, or interest on the Notes; and
(3) at any time during the continuance of any such default,
upon the written request of the Trustee, forthwith pay to the Trustee
all sums so held in trust by such Paying Agent.
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The Company may at any time, for the purpose of obtaining the
satisfaction and Discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held
in trust by the Company or such Paying Agent, such sums to be held by the
Trustee upon the same trusts as those upon which such sums were held by the
Company or such Paying Agent; and, upon such payment by any Paying Agent to the
Trustee, such Paying Agent shall be released from all further liability with
respect to such money.
Any money deposited with the Trustee or any Paying Agent, or
then held by the Company, in trust for the payment of the principal of, and
premium, if any, or interest on any Note and remaining unclaimed for two years
after such principal, premium, if any, or interest has become due and payable
shall be paid to the Company on Company Request, or (if then held by the
Company) shall be discharged from such trust; and the Holder of such Note shall
thereafter, as an unsecured general creditor, look only to the Company for
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Company as trustee
thereof, shall thereupon cease; Provided, however, that the Trustee or such
Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be published once, in a newspaper published in
the English language, customarily published on each Business Day and of general
circulation in the City of New York, New York, notice that such money remains
unclaimed and that, after a date specified therein, which shall not be less
than 30 days from the date of such publication, any unclaimed balance of such
money then remaining will be repaid to the Company.
SECTION 1004. 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 610, a
Trustee, so that there shall at all times be a Trustee hereunder.
SECTION 1005. Corporate Existence. Subject to Article Eight,
the Company will do or cause to be done all things necessary to preserve and
keep in full force and effect its corporate existence.
SECTION 1006. Payment of Taxes and Other Claims. The Company
will pay or discharge or cause to be paid or discharged, before the same shall
become delinquent, (1) all taxes, assessments and governmental charges levied
or imposed upon the Company or upon the income, profits or property of the
Company, and (2) all lawful claims for labor, materials and supplies which, in
the case of either clause (1) or (2) of this Section, if unpaid, might by law
become a Lien upon the property of the Company; provided, however, that the
Company shall not be required to pay or discharge or cause to be paid or
discharged any such tax, assessment, charge or claim whose amount,
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applicability or validity is being contested in good faith by appropriate
proceedings.
SECTION 1007. Further Instruments and Acts. Upon request of
the Trustee, the Company will execute and deliver such further instruments and
do such further acts as may be reasonably necessary or proper to carry cut more
effectively the purpose-of this Indenture.
ARTICLE ELEVEN
Redemption of Notes
SECTION 1101. Redemption of Notes. The Notes may be redeemed
at the Company's option subsequent to May 3, 1998. Thereafter, the Company
may, at its option, redeem all or, from time to time, any part of the Notes, on
any date prior to maturity, in the manner specified in this Article Eleven and
in the Notes, at the Redemption Prices set forth in the form of Note set forth
in Article Two, together with accrued and unpaid interest, if any, to the date
fixed for redemption.
SECTION 1102. Notice of Redemption; Selection of Notes. In
case the Company shall desire to exercise its right to redeem all or any part
of the Notes pursuant to Section 1101, it shall fix a date for redemption (a
"Redemption Date"), it shall notify the Trustee in writing of such date and it
or, at its request, the Trustee, in the name of and at the expense of the
Company, shall mail or cause to be mailed a notice of such redemption (a
"Notice of Redemption") at least 30 but not more than 60 days prior to the date
fixed for redemption to the Holders of the Notes so to be redeemed as a whole
or in part at their last addresses as the same appear on the Note Register.
Such mailing shall be by first-class mail, postage prepaid. Any Notice of
Redemption which is given in the manner herein provided shall be conclusively
presumed to have been duly given, whether or not the Holder receives the
notice. In any case, failure to give such notice, or any defect in such
notice, to the Holder of any Note designated for redemption as a whole or in
part shall not affect the validity of the proceedings for the redemption of any
other Note.
Each Notice of Redemption shall specify the principal amount of
each Note to be redeemed, the Redemption Date for such Notes, the place of
redemption and the Redemption Price at which such Notes are to be redeemed, and
shall state that payment of the Redemption Price of the Notes or portions
thereof to be redeemed will be made on surrender of the Notes to be redeemed at
such place of redemption, that interest accrued to such Redemption Date will be
paid as specified in such notice, and that from and after such date interest
thereon will cease to accrue. Such Notice of Redemption shall also state the
then current Conversion Price and that the right to convert such Notes or
portions thereof into Common Stock will expire at the close of
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business on the Redemption Date. If fewer than all the Notes are to be
redeemed, the Notice of Redemption shall specify the Notes or portions thereof
to be redeemed. If such Notice of Redemption uses CUSIP numbers, such notice
shall state that no representation is made as to the correctness or accuracy of
the CUSIP numbers contained in such notice or printed on the Notes and shall
include such other statements required by Section 310. In case any Note is to
be redeemed in part only, the notice which relates to such Note shall state the
portion of the principal amount thereof to be redeemed (which shall be $1,000
or any integral multiple thereof) and shall state that, upon surrender of such
Note, a new Note or Notes in aggregate principal amount equal to the
unredeemed portion thereof will be issued.
On or prior to each Redemption Date specified in each Notice of
Redemption given as provided in this Section, the Company will deposit or cause
to be deposited with the Trustee or with one or more Paying Agents (or, if the
company is acting as its own Paying Agent, set aside, segregate and hold in
trust as provided in Section 1003) an amount of money sufficient to redeem on
such Redemption Date all the Notes so called for redemption (other than those
theretofore surrendered for conversion into Common Stock) at the appropriate
Redemption Price, together with accrued interest to the Redemption Date.
If any Note called for redemption is converted pursuant to the
provisions of Article Twelve hereof, any money deposited with the Trustee or
any Paying Agent or so segregated and held in trust for the redemption of such
Note shall be paid to the Company upon a Company Request, or, if then held by
the Company, shall be discharged from such trust.
If fewer than all of the Notes are to be redeemed, the Company
shall give the Trustee at least 60 days' notice (unless a shorter period shall
be acceptable to the Trustee) in advance of the Redemption Date as to the
aggregate principal amount of the Notes to be redeemed, and thereupon the
Trustee shall select from the Outstanding Notes not previously called for
redemption the particular Notes to be redeemed as a whole or in part pro rata
or by lot or by such other method as the Trustee shall deem fair and
appropriate and in accordance with methods generally used at the time of
selection by fiduciaries in similar circumstances and the Trustee shall
thereafter promptly notify the Company in writing of the Notes (and, in the
case of any Note selected for partial redemption, the principal amount
therefore to be redeemed) so to be redeemed. Notes shall be redeemed only in
denominations of $1,000 or any integral multiple of $1,000. Provisions of this
Indenture that apply to Notes selected for redemption also apply to portions of
Notes selected for redemption.
If any Note selected for partial redemption is converted in part
before the termination of the conversion right with respect to the portion of
the Note so selected, the
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converted portion of such Note shall be deemed (so far as may be) to be the
portion selected for redemption.
Upon any redemption of fewer than all Notes, the Company and the
Trustee may treat as Outstanding any Notes surrendered for conversion during
the period of 15 days next preceding the mailing of a Notice of Redemption and
need not treat as Outstanding any Note authenticated and delivered during such
period in exchange for the unconverted portion of any Note converted in part
during such period.
SECTION 1103. Payment of Notes Called for Redemption; Notes
Redeemed in Part. If Notice of Redemption shall have been given as provided
above, such Notes or portions of Notes called for redemption shall, unless
theretofore converted into Common Stock as provided in Article Twelve, become
due and payable on the Redemption Date and at the place stated in such notice
at the applicable Redemption Price, together with interest accrued thereon to
the Redemption Date. On and after such Redemption Date, unless the Company
shall default in the payment of the Redemption Price, together with interest
accrued to the Redemption Date, interest on the Notes or portions thereof so
called for redemption shall cease to accrue and such Notes shall cease at the
close of business on the Redemption Date to be convertible into Common Stock
and, except as provided in Section 1003, such Notes or portions thereof shall
be deemed not to be entitled to any benefit under this Indenture except to
receive payment of the Redemption Price, together with interest accrued thereon
to the Redemption Date. On presentation and surrender of such Notes at such
place of payment specified in the Notice of Redemption, provided that the
Company shall have deposited or caused to be deposited on or prior to such
Redemption Date the amount sufficient to pay the Redemption Price, together
with interest accrued thereon to the Redemption Date, such Notes or the
specified portions thereof shall be paid and redeemed at the applicable
Redemption Price, together with interest accrued thereon to the Redemption
Date; provided that any semiannual accrual of interest becoming due on the
Redemption Date shall be payable to the Holders of such Notes on the Interest
Payment Date.
Upon surrender of any Note redeemed in part only, the Company
shall execute and the Trustee shall register or cause to be registered on the
Note Register, and shall authenticate and deliver to the Holder of such Note
without service charge, a new Note or Notes of authorized denominations in
aggregate principal amount equal to the unredeemed portion of the Note so
surrendered.
If any Note called for redemption shall not be so paid upon
surrender thereof for redemption, the principal and premium, if any, shall,
until paid or duly provided for, bear interest from the date fixed for
redemption at the rate borne by the Note and such Note shall remain convertible
into Common Stock until
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the principal and premium, if any, shall have been paid or duly provided for.
ARTICLE TWELVE
Conversion of Notes
SECTION 1201. Conversion Privilege; Manner of Exercise of
Conversion Privilege Subject to and upon compliance with the provisions of this
Article Twelve, the Holder of any Note shall have the right, at his option, at
any time on or prior to the close of business on May 3, 2002 (or, if such Note
or portion thereof is called for redemption prior to May 3, 2002, then in
respect of such Note or portion thereof, on or prior to the close of business
on the Redemption Date, unless the Company shall default in payment due upon
redemption thereof), to convert the principal amount of any such Note and the
accrued but unpaid interest thereon, or any portion of such amount which is
$1,000 or an integral multiple thereof, into that number of fully paid and
nonassessable shares of Common Stock (calculated as to each conversion to the
nearest 1/100th of a share) obtained by dividing the principal amount of the
Note and the accrued but unpaid interest thereon or portion thereof to be
converted by the Conversion Price in effect at such time and by surrender of
the Note so to be converted in whole or in part, such surrender to be made in
the manner provided in this Section 1201.
In order to exercise the conversion privilege, the Holder of any
Note to be converted in whole or in part shall surrender such Note, duly
endorsed or assigned to the Company or in blank, at any of the offices or
agencies to be maintained for such purpose by the Company pursuant to Section
1002, and shall give written notice of conversion in the form provided on the
Notes (or such other notice as is acceptable to the Company) to the Company (a
"Conversion Notice") at such office or agency that the Holder elects to convert
such Note or the portion thereof specified in said notice. Such Conversion
Notice shall also state the name or names, together with the address or
addresses, in which the certificate or certificates for shares of Common Stock
which shall be issuable in such conversion shall be issued. Each Note
surrendered for conversion shall, unless the shares issuable on conversion are
to be issued in the same name as the name in which such Note is registered, be
accompanied by instruments of transfer, in form satisfactory to the Company,
duly executed by the Holder or his duly authorized attorney and in amount
sufficient to pay any transfer or similar tax. As promptly as practicable
after the surrender of such Note and the receipt of such Conversion Notice,
instruments of transfer and funds, if any, as aforesaid, the Company shall
issue and shall deliver at such office or agency to such Holder, or on his
written order, a certificate or certificates for the number of full shares of
Common Stock issuable upon the conversion of such Note or portion thereof in
accordance with the provisions of this Article Twelve and a check or cash in
respect of any fractional
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interest in a share of Common Stock arising upon such conversion, as provided
in Section 1203. In case any Note of a denomination greater than $1,000 shall
be surrendered for partial conversion, the Company shall execute and the
Trustee shall register or cause to be registered on the Note Register, and
shall authenticate and deliver to or upon the order of the Holder of the Note
so surrendered at the expense of the Company, a new Note or Notes in authorized
denominations in an aggregate principal amount and accrued but unpaid interest
thereon equal to the unconverted portion of the surrendered Note.
Each conversion shall be deemed to have been effected
immediately prior to the close of business on the date on which such Note shall
have been surrendered and such Conversion Notice (and any applicable
instruments of transfer and any required funds) received by the Company as
aforesaid, and the Person or Persons in whose name or names any certificate or
certificates for shares of Common Stock shall be issuable upon such conversion
shall be deemed to have become the holder or holders of record of the shares
represented thereby at such time on such date and such conversion shall be at
the Conversion Price in effect at such time on such date, unless the stock
transfer books of the Company shall be closed on that date, in which event such
Person or Persons shall be deemed to have become such holder or holders of
record at the close of business on the next succeeding day on which such stock
transfer books are open, but such conversion shall be at the Conversion Price
in effect on the date upon which such Note shall have been surrendered and such
Conversion Notice received by the Company.
SECTION 1202. Mandatory Conversion. If the average closing
sale price per share of the Common Stock for any 30 consecutive business day
period during the term of the Notes equals or exceeds 135% of the Conversion
Price, the Company may convert the outstanding principal of all of the Notes
and all accrued but unpaid interest thereon into that number of fully paid and
nonassessable shares of Common Stock (calculated to the nearest 1/100th of a
share) obtained by dividing the principal amount of the Notes and, to the
extent permitted, all accrued but unpaid interest thereon by the Conversion
Price.
In the event the Company elects to exercise its right to convert
all of the Notes pursuant to this Section 1202, the Company shall fix a date
for conversion (the "Mandatory Conversion Date"), it shall notify the Trustee
in writing of such date and it or, at its request, the Trustee, in the name of
and at the expense of the Company, shall mail or cause to be mailed a notice of
such conversion (a "Notice of Mandatory Conversion") at least 30 but no more
than 60 days prior to the Mandatory Conversion Date to the Holders of the Notes
at their last addresses as the same appear on the Note Register. Such mailing
shall be by first-class mail, postage prepaid. The Notice of Mandatory
Conversion shall explain that the outstanding principal of the accrued but
unpaid interest on the Notes are to be
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converted, and shall specify the Mandatory Conversion Date and the place and
the then current Conversion Price at which the Notes are to be converted. Upon
receipt of the Mandatory Conversion Notice, each Holder of Notes shall
surrender his or its Notes in accordance with such notice and shall, unless the
shares issuable on conversion are to be issued in the same name as the name in
which such Note is registered, notify the Company of the name or names,
together with the address or addresses, in which the certificate or
certificates for shares of Common Stock which shall be issuable in such
conversion shall be issued. As promptly as practicable after the surrender of
such Note, the Company shall issue and deliver to Holder a certificate or
certificates for the number of full shares of Common Stock issuable upon the
conversion of such Note in accordance with this Article Twelve and a check or
cash in respect of any accrued but unpaid interest not converted and in respect
of any fractional interest in a share of Common Stock arising upon conversion,
as provided in Section 1203.
SECTION 1203. Cash Payments in Lieu of Fractional Shares. No
fractional shares or scrip representing fractions of shares of Common Stock
shall be issued upon conversion of the Notes. If more than one Note shall be
surrendered for conversion at one time by the same Holder, the number of full
shares of Common Stock issuable upon conversion thereof shall be computed. on
the basis of the aggregate principal amount and accrued but unpaid interest
thereon of the Notes, or specified portions thereof to be converted, so
surrendered. Instead of any fractional interest in a share of Common Stock
which would otherwise be deliverable upon the conversion of any Note or Notes,
the Company shall pay to the Holder of such Note an amount in cash (computed to
the nearest cent) equal to the Daily Market Price thereof at the close of
business on the Business Day next preceding the day of conversion multiplied by
the fractional interest (expressed as a percentage) that otherwise would have
been deliverable upon conversion of the Notes.
SECTION 1204. Adjustment of Conversion Price. The Conversion
Price shall be as specified in the form of Note set forth in Article Two
subject to adjustment as provided below, provided, that, notwithstanding any
other provision herein, the Dividend shall in no event cause any adjustment to
the Conversion Price.
The Conversion Price shall be adjusted from time to time by the
Company as follows:
(a) In case the Company, after the date of this Indenture,
shall (i) pay a dividend or make a distribution on its Common Stock in
shares of Common Stock, (ii) subdivide its outstanding shares of Common
Stock into a greater number of shares, (iii) combine its outstanding
shares of Common Stock into a smaller number of shares, or (iv)
issue by reclassification of its Common Stock any
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shares of Capital Stock of the Company, the Conversion Price in effect
immediately prior to such action shall be adjusted so that the Holder of any
Note thereafter surrendered for conversion shall be entitled to receive the
number of shares of Common Stock or other Capital Stock of the Company that it
would have owned or been entitled to receive immediately following such action
had such Note been converted immediately prior to the occurrence of such event.
An adjustment made pursuant to this subsection (a) shall become effective
immediately after the record date, in the case of a dividend or distribution,
or immediately after the effective date, in the case of a subdivision,
combination or reclassification. If as a result of an adjustment made
pursuant to this subsection (a), the Holder of any Note thereafter surrendered
for conversion shall become entitled to receive shares of two or more classes
of Capital Stock or shares of Common Stock and other Capital Stock of the
Company, the Board of Directors (whose determination shall be conclusive and
shall be described in a statement filed by the Company with the Trustee and
with any Conversion Agent as soon as practicable) shall determine the
allocation of the adjusted Conversion Price between or among shares of such
classes of Capital Stock or shares of Common Stock and other Capital Stock.
(b) In case the Company, after the date of this Indenture,
shall issue rights, warrants or options to all holders of its outstanding
shares of Common Stock entitling them to subscribe for or purchase shares of
Common Stock (or securities convertible into Common Stock) at a price per share
less than the current market price per share (as determined pursuant to
subsection (h) of this Section 1204) of the Common Stock, the Conversion Price
in effect immediately prior thereto shall be adjusted so that it shall equal
the price determined by multiplying the Conversion Price in effect immediately
prior to the date of issuance of such rights, warrants or options by a fraction
of which the numerator shall be the number of shares of Common Stock
outstanding on the date of issuance of such rights, warrants or options
(immediately prior to such issuance), plus the number of shares of Common Stock
which the aggregate offering price of the total number of shares of Common
Stock so offered for subscription or purchase (or the aggregate conversion
price of the convertible securities so offered for subscription or purchase)
would purchase at such current market price, and of which the denominator shall
be the number of shares of Common Stock outstanding on the date of issuance of
such rights, warrants or options (immediately prior to such issuance) plus the
number of additional shares of Common Stock so offered for subscription or
purchase (or into which the convertible securities so offered for subscription
or purchase are convertible). Such adjustment shall be made successively
whenever any such rights, warrants or options are issued, and shall become
effective
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immediately after the record date for the determination of stockholders
entitled to receive such rights, warrants or options. In determining whether
any rights, warrants or options entitle the holders to subscribe for or
purchase shares of Common Stock (or securities convertible into Common Stock)
at less than such current market price, and in determining the aggregate
offering price of such shares of Common Stock (or conversion price of such
convertible securities), there shall be taken into account any consideration
received by the Company for such rights, warrants or options (and for such
convertible securities), the value of such consideration, if other than cash,
to be determined by the Board of Directors (whose determination shall be
conclusive and shall be described in a certificate filed with the Trustee and
with any Conversion Agent by the Company as soon as practicable). If at the
end of the period during which such warrants, rights or options are exercisable
not all such warrants, rights or options shall have been exercised, the
adjusted Conversion Price shall be immediately readjusted to what it would have
been based on the number of additional shares of Common Stock actually issued
(or the number of shares of Common Stock issuable upon conversion of
convertible securities actually issued).
(c) In case the Company, after the date of this Indenture,
shall distribute to all holders of its outstanding Common Stock any shares of
Capital Stock (other than Common Stock), evidences of its Indebtedness or
assets (including securities and cash, but excluding any cash dividend paid out
of current or retained earnings of the Company and dividends or distributions
payable in stock for which adjustment is made pursuant to subsection (a) of
this Section 1204) or rights, warrants or options to subscribe for or purchase
securities of the Company (excluding those referred to in subsection (b) of
this Section 1204), then in each such case 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 the record date of such
distribution by a fraction of which the numerator shall be the current market
price per share (as determined pursuant to subsection (h) of this Section 1204)
of the Common Stock less the fair market value on such record date (as
determined by the Board of Directors, whose determination shall be conclusive
and shall be described in a certificate filed with the Trustee and with any
Conversion Agent by the Company as soon as practicable) of the portion of the
Capital Stock or the evidences of Indebtedness or the assets so distributed to
the holder of one share of Common Stock or of such subscription rights,
warrants or options applicable to one share of Common Stock and of which the
denominator shall be such current market price per share of Common Stock. Such
adjustment shall become effective immediately after the record date for the
determination of stockholders entitled
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to receive such distribution. If at the end of the period during which
warrants, rights or options described in this subsection (c) are exercisable
not all such warrants, rights or options shall have been exercised, the
adjusted Conversion Price shall be immediately readjusted to what it would have
been based on the number of warrants, rights or options actually exercised.
(d) Notwithstanding anything in subsection (b) or (c) of this
Section 1204 to the contrary, with respect to any rights, warrants or options
covered by subsection (b) or (c) of this Section 1204, if such rights, warrants
or options are only exercisable upon the occurrence of certain triggering
events, then for purposes of this Section 1204 such rights, warrants or options
shall not be deemed issued or distributed, and any adjustment to the Conversion
Price required by subsection (b) or (c) of this Section 1204 shall not be made
until such triggering events occur and such rights, warrants or options become
exercisable.
(e) In case the Company, after the date of this Indenture,
shall issue to an Affiliate shares of its Common Stock (excluding those rights,
warrants, options, shares of Capital Stock or evidences of its Indebtedness or
assets referred to in subsection (b) or (c) to this Section 1204) at a net
price per share less than the current market price per share (as determined
pursuant to subsection (h) of this Section 1204) on the date the Company fixes
the offering price of such additional shares, the Conversion Price shall be
reduced immediately thereafter so that it shall equal the price determined by
multiplying such Conversion Price in effect immediately prior thereto by a
fraction of which the numerator shall be the number of shares of Common Stock,
outstanding immediately prior to the issuance of such additional shares plus the
number of shares of Common Stock which the aggregate offering price of the total
number of shares of Common Stock so offered would purchase at the current market
price and the denominator shall be the number of shares of Common Stock that
would be outstanding immediately after the issuance of such additional shares.
Such adjustment shall be made successively whenever such an issuance is made.
This subsection (e) shall not apply to Common Stock issued to any Affiliate
under a bona fide employee or director benefit plan adopted by the Company or
any Subsidiary thereof and approved by the stockholders of the Company or such
Subsidiary, as appropriate.
(f) In case the Company, after the date of this Indenture
shall, by dividend or otherwise, at any time distribute to all holders of its
Common Stock cash (including any cash that is distributed as part of a
distribution referred to in subsection (c) of this Section) in an aggregate
amount that, together with (i) the aggregate amount of any other distributions
to all holders of its
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Common Stock made exclusively in cash within the 12 months preceding the date
fixed for determining the stockholders entitled to such distribution and in
respect of which no Conversion Price adjustment pursuant to this subsection (f)
has been made and (ii) 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 Board Resolution), as of such date of determination, of
consideration payable in respect of any tender offer by the Company or a
Subsidiary for all or any portion of the Common Stock consummated within 12
month s preceding the date fixed for determining the stockholders entitled to
such distribution and in respect of which no Conversion Price adjustment
pursuant to subsection (g) of this Section has been made, exceeds 10% of the
product of the current market price per share (determined as provided in
subsection (h) of this Section) on the date fixed for the determination of
stockholders entitled to receive such distribution times the number of shares
of Common Stock outstanding on such date, the Conversion Price shall be reduced
by multiplying such Conversion Price by a fraction of which the numerator shall
be the current market price per share (determined as provided in subsection (h)
of this Section) on the date fixed for such determination less the amount of
cash so distributed at such time applicable to one share of Common Stock and
the denominator shall be such current market price, such reduction to become
effective immediately prior to the opening of business on the date after the
date fixed for such determination.
(g) In case a tender offer made by the Company or any
Subsidiary, after the date of this Indenture, for all or any portion of the
Common Stock shall be consummated and such tender offer shall involve an
aggregate consideration having a fair market value (as determined by the Board
of Directors, whose determination shall be conclusive and described in a Board
Resolution) as of the last time (the "Expiration Time") that tenders may be made
pursuant to such tender offer (as it may be amended) that, together with (i)
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 Board
Resolution), as of the consummation of such tender offer, of other consideration
paid or payable in respect of any tender offer by the Company or a Subsidiary
for all or any portion of the Common Stock consummated within the 12 months
preceding the consummation of such tender offer and in respect of which no
Conversion Price adjustment pursuant to this subsection (g) has been made and
(ii) the aggregate amount of any distributions to all holders of Common Stock
made exclusively in cash within the 12 months preceding the consummation of such
tender offer and in respect of which no Conversion Price adjustment pursuant to
subsection (f) of this Section has been made, exceeds 10% of the product of
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the current market price per share (determined as provided in subsection (h) of
this Section) immediately prior to the Expiration Time times the number of
shares of Common Stock outstanding (including any tendered shares) at the
Expiration Time, the Conversion Price shall be reduced by multiplying the
Conversion Price in effect immediately prior to the Expiration Time by a
fraction of which the numerator shall be (i) the product of the current market
price per share (determined as provided in subsection (h) of this Section)
immediately prior to the Expiration Time times the number of shares of Common
Stock outstanding (including any tendered shares) at the Expiration Time minus
(ii) the fair market value (determined as aforesaid) of the aggregate
consideration payable to stockholders upon consummation of such tender offer
(the shares accepted for payment in the tender offer being referred to as the
"Purchased Shares") and the denominator shall be the product of (x) such
current market price per share times (y) such number of outstanding shares at
the Expiration Time minus the number of Purchased Shares, such reduction to
become effective immediately prior to the opening of business on the day
following the Expiration Time; provided that, if the number of Purchased Shares
or the aggregate consideration payable therefor have not been finally
determined by such opening of business, the adjustment required by this
subsection (g) shall, pending such final determination, be made based upon the
preliminary announced results of such tender offer, and, after such final
determination shall have been made, the adjustment required by this subsection
(g) shall be made based upon the number of Purchased Shares and the aggregate
consideration payable therefor as so finally determined.
(h) For the purpose of any computation under subsections (b)
through (g) of this Section 1204, the current market price per share of Common
Stock on any date shall be deemed to be the average of the Daily Market Prices
for the shorter of (i) 30 consecutive Business Days ending on the last full
trading day on the exchange or market referred to in determining such Daily
Market Prices prior to the Time of Determination or (ii) the period commencing
on the date next succeeding the first public announcement of the issuance of
such rights or warrants or such distribution through such last full trading day
prior to the Time of Determination.
(i) In any case in which this Section 1204 shall require that
an adjustment be made immediately following a record date or an effective date,
the Company may elect to defer (but only until five Business Days following the
filing by the Company with the Trustee and any Conversion Agent of the
certificate required by subsection (k) of this Section 1204) issuing to the
Holder of any Note converted after such record date or effective date the shares
of Common Stock issuable upon such conversion over and above
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the shares of Common Stock issuable upon such conversion on the basis of the
Conversion Price prior to adjustment, and paying to such Holder any amount of
cash in lieu of a fractional share.
(j) No adjustment in the Conversion Price shall be required
to be made unless such adjustment would require an increase or decrease of at
least l% in such price; provided, however, that any adjustments which by
reason of this subsection (j) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All calculations
under this Section 1204 shall be made to the nearest cent or to the nearest
1/100th of a share, as the case may be. No adjustment to the Conversion Price
need be made if only the par value of the Common Stock is changed (including any
change to no par value Common Stock). To the extent that the Notes become
convertible into cash, no adjustment need be made thereafter as to such cash and
interest will not accrue on such cash. Anything in this Section 1204 to the
contrary notwithstanding, the Company shall be entitled to make such reduction
in the Conversion Price, in addition to those required by this Section 1204, as
it in its discretion shall determine to be advisable in order that any stock
dividend, subdivision of shares, distribution of rights to purchase stock or
securities, or distribution of securities convertible into or exchangeable for
stock hereafter made by the Company to its stockholders shall not be taxable to
the recipients.
(k) Whenever the Conversion Price is adjusted as herein
provided, (i) 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 and the manner of computing the same,
which certificate shall be conclusive evidence of the correctness of such
adjustment, and (ii) a notice stating that the Conversion Price has been
adjusted and setting forth the adjusted Conversion Price shall forthwith be
given by the Company to the Holders of Notes in the manner provided in Section
106. The Company may correct any previous certificate and notice given pursuant
to this subsection (k) by (i) promptly filing with the Trustee and any
Conversion Agent other than the Trustee a new certificate in the form required
by this subsection (k) and (ii) giving a new notice to the Holders of Notes in
the form and manner required by this subsection (k). Such new certificate and
notice shall state that such certificate and notice are being provided to
correct the previous certificate and notice. Except as otherwise provided in
Section 601, neither the Trustee nor any Conversion Agent shall be under any
duty or responsibility with respect to the certificate required by this
subsection (k) except to exhibit the same to any Holder of Notes who requests to
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inspect it. The certificate requirement by this subsection (k) shall be
filed at each office or agency maintained for the purposes of conversion
of Notes pursuant to Section 1002.
(1) In the event that at any time, as a result of an
adjustment made pursuant to subsection (a) of this Section 1204, the
Holder of any Note thereafter surrendered for conversion shall become
entitled to receive any shares of the Company other than shares of
Common Stock, thereafter the Conversion Price of such other shares so
receivable upon conversion of any Note shall be subject to adjustment
from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to Common Stock contained in
this Article Twelve and the other provisions of this Article Twelve
applicable to Common Stock shall apply to such other shares.
SECTION 1205. Notice to Holders Prior to Certain Corporate
Actions. In case:
(a) the Company shall take any action that would require an
adjustment in the Conversion Price pursuant to Section 1204(c); or
(b) the Company shall authorize the granting to the holders
of its Common Stock generally of rights, warrants or options to
subscribe for or purchase any shares of stock of any class or of any
other rights (other than pursuant to the BEC Group, Inc. 1996 Stock
Incentive Plan or the BEC Group, Inc. Employee Stock Purchase Plan); or
(c) there shall be any reorganization or reclassification of
the Common Stock (other than a subdivision or combination of the
outstanding Common Stock and other than a change in the par value of the
Common Stock), or any consolidation or merger to which the Company is a
party, or any conveyance, transfer, sale or lease of the Company's
properties and assets as, or substantially as, an entirety; or
(d) there shall be a voluntary or involuntary dissolution,
liquidation or winding up of the Company;
then the Company shall cause to be filed with the Trustee and any Conversion
Agent, and shall cause to be given to the Holders of Notes, in the manner
provided in Section 106, as promptly as possible, but in any event at least 10
days prior to the applicable date hereinafter specified, a notice stating (i)
the date on which a record is to be taken for the purpose of such dividend, or
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
distribution or rights are to be determined, or (ii) the date on which such
reorganization, reclassification, consolidation, merger, conveyance, transfer,
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sale, lease, dissolution, liquidation or winding up is expected to become
effective or occur, and, if applicable, the date as of which it is expected
that holders of Common Stock of record shall be entitled to exchange their
shares of Common Stock for securities, cash or other property deliverable upon
such reorganization, reclassification, consolidation, merger, conveyance,
transfer, sale, lease, liquidation or winding up. Failure to give such notice
or any defect therein shall not affect the legality or validity of the
proceedings described in subsection (a), (b), (c) or (d) of this Section 1205.
SECTION 1206. Reservation of Shares of Common Stock. The
Company shall at all times reserve and keep available, free from preemptive
rights, out of the aggregate of its authorized but unissued shares of Common
Stock or its issued shares of Common Stock held in its treasury, or both, for
the purpose of effecting conversions of Notes, the full number of shares of
Common Stock deliverable upon the conversion of all Outstanding Notes not
theretofore converted.
Before taking any action that would cause an adjustment reducing
the Conversion Price below the then par value (if any) of the shares of Common
Stock deliverable upon conversion of the Notes, the Company shall take any
corporate action which may, in the opinion of its counsel, be necessary in
order that the Company may validly and legally issue fully paid and
nonassessable shares of Common Stock at such adjusted Conversion Price.
SECTION 1207. Taxes upon Conversion. The Company shall pay any
and all documentary, stamp or similar issue or transfer taxes payable in
respect of the issue or delivery of shares of Common Stock on conversions of
Notes pursuant hereto; provided, however, that the Company shall not be
required to pay any tax which may be payable in respect of any transfer
involved in the issue or delivery of shares of Common Stock in a name other
than that of the Holder of the Note or Notes to be converted and no such issue
or delivery shall be made unless and until the Person requesting such issue or
delivery has paid to the Company the amount of any such tax or has established
to the satisfaction of the Company that such tax has been paid.
SECTION 1208. Covenants as to Common Stock. The Company
covenants that all shares of Common Stock which may be delivered upon
conversions of Notes will upon delivery be duly and validly issued and fully
paid and nonassessable, free of all Liens and charges and not subject to any
preemptive rights.
The company further covenants that, for so long as the Common
Stock shall be listed on any national securities exchange, the Company will, if
permitted by the rules of such exchange,
list and keep listed all Common Stock issuable upon conversion of the Notes.
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SECTION 1209. Consolidation or Merger or Sale of Assets.
Notwithstanding any other provision herein to the contrary, in case of any
consolidation or merger to which the Company is a party (other than a merger or
consolidation which does not result in any reclassification, conversion,
exchange or cancellation of the outstanding shares of Common Stock of the
Company), or in case of any conveyance, transfer, sale or lease to another
corporation of the properties and assets of the Company as, or substantially
as, an entirety, the corporation formed by such consolidation, or the
corporation whose securities, cash or other property will immediately after the
merger or consolidation be owned, by virtue of the merger or consolidation, by
the holders of Common Stock of the Company immediately prior to the merger or
the corporation which shall have acquired such properties and assets of the
Company, as the case may be, shall promptly execute and deliver to the Trustee
a supplemental indenture providing that the Holder of each Note then
outstanding shall have the right thereafter to convert such Note, during the
period such Note is convertible as specified in this Article Twelve, into the
kind and amount of securities, cash or other property receivable upon such
consolidation, merger, conveyance, transfer, sale or lease by a holder of the
number of shares of Common Stock into which such Note might have been converted
immediately prior to such consolidation, merger, conveyance, transfer, sale or
lease, assuming such holder of Common Stock (i) is not a Person with which the
Company consolidated or into which the Company merged or was merged or to which
such conveyance, transfer, sale or lease was made or an Affiliate of such
Person and (ii) did not exercise statutory rights of election, if any, as to
the kind or amount of securities, cash or other property receivable upon such
consolidation, merger, conveyance, transfer, sale or lease (provided that, if
the kind or amount of securities, cash or other property receivable upon such
consolidation, merger, conveyance, transfer, sale or lease is not the same for
each share of Common Stock in respect of which such rights of election shall
not have been exercised ("non-electing share"), then for the purposes of this
Section 1209 the kind and amount of securities, cash or other property
receivable upon such consolidation, merger, conveyance, transfer, sale or lease
for each non-electing share shall be deemed to be the kind and amount so
receivable per share by the holders of a plurality of the nonelecting shares).
Such supplemental indenture shall provide for adjustments which, for events
subsequent to the effective date of such supplemental indenture, shall be as
nearly equivalent as may be practicable to the adjustments provided for in this
Article Twelve in relation to any shares of stock or other securities or
property thereafter deliverable on the conversion of the Notes.
The above provisions of this Section 1209 shall similarly apply
to successive consolidations, mergers, conveyances, transfers, sales or leases.
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The Company shall give notice of the execution of such a
supplemental indenture to the Holders of Notes in the manner provided in
Section 106 within 30 days after the execution thereof; provided, however, that
such notice need not be given if such information has been provided
prospectively in the notice given pursuant to Section 1205. Failure to give
such notice, or any defects therein, shall not affect the legality or validity
of any such supplemental indenture or any transaction contemplated in this
Section 1209.
SECTION 1210. Disclaimer of Responsibility for Certain Matters.
Neither the Trustee nor any Conversion Agent shall at any time be under any
duty or responsibility to any Holder of Notes to determine whether any facts
exist which may require any adjustment of the Conversion Price, or with respect
to the nature or extent 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. Neither the Trustee nor any Conversion Agent
shall be accountable with respect to the listing or registration referred to
in section 1208 or the validity or value (or the kind or amount) of any shares
of Common Stock, or of any securities, cash or other property, which may at
any time be issued or delivered upon the conversion of any Note; and neither
the Trustee nor any Conversion Agent makes any representation with respect
thereto. Neither the Trustee nor any Conversion Agent shall be responsible for
any failure of the Company to issue, transfer or deliver any shares of Common
Stock or stock certificates or other securities or property or to make any cash
payment upon the surrender of any Note for the purpose of conversion or,
subject to the provisions of Section 601, to comply with any of the covenants
of the Company contained in this Article Twelve.
SECTION 1211. Cancellation of Converted Notes. All Notes
delivered for conversion shall be delivered to the Trustee to be canceled by or
at the direction of the Trustee, which shall dispose of the same as provided in
Section 309.
SECTION 1212. Voluntary Reduction. The Company from time to
time may reduce the Conversion Price by any amount for any period of time if
the period is at least 20 days or such longer period as may be required by law
and if the reduction is irrevocable during such period.
ARTICLE THIRTEEN
Subordination of Notes
SECTION 1301. Notes Subordinated to Senior Indebtedness. The
Company, for itself, its successors and assigns, covenants and agrees, and each
Holder of a Note (whether upon original issue or upon transfer of assignment
thereof) by his acceptance thereof, likewise covenants and agrees, that all
notes issued hereunder shall be subordinated and subject, to the
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extent and in the manner herein set forth, to the prior payment in full of all
Senior Indebtedness. The provisions of this Article are made for the benefit
of all holders of Senior Indebtedness, and any such holder may proceed to
enforce such provisions.
SECTION 1302. Company Not To Make Payments with Respect to
Notes in Certain Circumstances.
(a) Upon the maturity of any Senior Indebtedness by lapse of
time, acceleration or otherwise, all principal thereof, premium, if any,
and interest thereon shall be paid in full, or such payment duly
provided for in a manner satisfactory to the holders of such Senior
Indebtedness, before any payment is made on account of the principal of
or premium, if any, or interest on the Notes or to acquire any of the
Notes (except through the conversion thereof).
(b) Upon the happening of any default in payment of the
principal of, premium, if any, or interest on any Senior Indebtedness,
then, unless and until such default shall have been cured or waived or
shall have ceased to exist, no payment shall be made by the Company with
respect to the principal of or premium, if any, or interest on the Notes
or to acquire any of the Notes (except through the conversion thereof).
Nothing in this Article, however, shall relieve the holders of such
Senior Indebtedness or their representative from any notice requirements
set forth in the instrument evidencing such Senior Indebtedness.
(c) Upon the happening and continuation of any default in
respect of Senior Indebtedness other than a default described in clause
(b) of this Section 1302, no payment shall be made by the Company with
respect to the principal of or premium, if any, or interest on the Notes
for a period beginning on the date the Company receives notice of such
default and ending on the date which is 179 days thereafter.
(d) In the event that notwithstanding the provisions of this
Section 1302 the Company shall make any payment to the Trustee on
account of the principal of or interest on the Notes, after the
happening of a default in payment of the principal of, premium, if any,
or interest on Senior Indebtedness, then, unless and until such default
shall have been cured or waived or shall have ceased to exist, such
payment (subject to the provisions of Section 1306) shall be held by the
Trustee, in trust for the benefit of, and shall be paid forthwith over
and delivered to, the holders of Senior Indebtedness (pro rata as to
each of such holders on the basis of the respective amounts of Senior
Indebtedness held by them) or their representative or the trustee under
the indenture or other agreement (if any) pursuant to which Senior
Indebtedness may have been issued, as their respective interests may
appear, for application to the
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payment of all Senior Indebtedness remaining unpaid to the extent
necessary to pay all Senior Indebtedness in full in accordance with its
terms, after giving effect to any concurrent payment or distribution to
or for the holders of Senior Indebtedness. The Company shall give
prompt written notice to the Trustee of any default in respect of any
Senior Indebtedness.
SECTION 1303. Notes Subordinated to Prior Payment of All Senior
Indebtedness on Dissolution, Liquidation or Reorganization of Company. Upon
any payment or distribution of assets of the Company upon any dissolution,
winding up, liquidation or reorganization of the Company (whether in
bankruptcy, insolvency or receivership proceedings or upon an assignment for
the benefit of creditors or otherwise):
(a) the holders of all Senior Indebtedness shall first be
entitled to receive payments in full of the principal thereof, premium,
if any, and interest due thereon before the Holders of the Notes are
entitled to receive any payment on account of the principal of or
interest on the Notes;
(b) any payment or distribution of assets of the Company of
any kind or character, whether in cash, property or securities, to which
the Holders of the Notes or the Trustee on behalf of the Holders of the
Notes would be entitled except for the provisions of this Article
Thirteen, shall be paid by the liquidating trustee or agent or other
Person making such payment or distribution directly to the holders of
Senior Indebtedness or their representative, or to the trustee under any
indenture under which Senior Indebtedness may have been issued (pro rata
as to each such holder, representative or trustee on the basis of the
respective amounts of unpaid Senior Indebtedness held or represented by
each), to the extent necessary to make payment in full of all Senior
Indebtedness remaining unpaid, after giving effect to any concurrent
payment or distribution or provision therefor to the holders of such
Senior Indebtedness, except that Holders of Notes may receive shares of
stock and any debt securities that are subordinated to Senior
Indebtedness to at least the same extent as the Notes and that are
provided for by a plan of reorganization or readjustment; and
(c) in the event that, notwithstanding the foregoing
provisions of this Section 1303, any payment or distribution of assets
of the Company of any kind or character, whether in cash, property or
securities (except for shares of stock and other debt securities that
are subordinated to Senior Indebtedness to at least the same extent as
the Notes and that are provided for by a plan of reorganization or
readjustment), shall be received by the Trustee or the Holders of the
Notes on account of principal of or interest on the Notes before all
Senior Indebtedness is paid in full,
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or effective provision made for its payment, such payment or
distribution (subject to the provisions of sections 1306 and 1307) shall
be received and held in trust for and shall be paid over to the holders
of the Senior Indebtedness remaining unpaid or unprovided for or their
representative, or to the trustee under any indenture under which Senior
Indebtedness may have been issued (pro rata as provided in subsection
(b) above), for application to the payment of such Senior Indebtedness
until all such Senior Indebtedness shall have been paid in full, after
giving effect to any concurrent payment or distribution or provision
therefor to the holders of such Senior Indebtedness.
Upon any payment or distribution of assets of the Company
referred to in this Article Thirteen, the Trustee and the Holders shall be
entitled to rely (i) upon any order or decree of a court of competent
jurisdiction in which any proceedings of the nature referred to in this Section
are pending, (ii) upon a certificate of the receiver, trustee in bankruptcy,
liquidating trustee, agent or other Person making such payment or distribution,
delivered to the Trustee or to the Holders, or (iii) upon the representative of
the holders of the Senior Indebtedness for the purpose of ascertaining the
Persons entitled to participate in such distribution, the holders of the Senior
Indebtedness and other Indebtedness of the Company, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all
other facts pertinent thereto or to this Article Thirteen. In the event that
the Trustee determines, in good faith, that further evidence is required with
respect to the right of any Person as a holder of Senior Indebtedness to
participate in any payment or distribution pursuant to this Article Thirteen,
the Trustee may request such Person to furnish evidence to the reasonable
satisfaction of the Trustee as to the amount of Senior Indebtedness held by
such Person, the extent to which such Person is entitled to participate in such
payment or distribution, and other facts pertinent to the rights of such Person
under this Article Thirteen, and, if such evidence is not furnished, the
Trustee may defer any payment to such Person pending judicial determination as
to the right of such Person to receive such payment.
The Company shall give prompt written notice to the Trustee of
any dissolution, winding up, liquidation or reorganization of the Company.
SECTION 1304. Noteholders To Be Subrogated to Right of Holders
of Senior Indebtedness. Subject to the payment in full of all Senior
Indebtedness, the Holders of the Notes shall be subrogated equally and ratably
to the rights of the holders of Senior Indebtedness to receive payments or
distributions of assets of the Company applicable to the Senior Indebtedness
until all amounts owing on the Notes shall be paid in full, and for the purpose
of such subrogation no payments or distribution to the holders of the Senior
Indebtedness by or on behalf of the Company
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or by or on behalf of the Holders of the Notes by virtue of this Article
Thirteen which otherwise would have been made to the Holders of the Notes
shall, as between the Company, its creditors other than holders of Senior
Indebtedness and the Holders of the Notes, be deemed to be payment by the
Company to or on account of the Senior Indebtedness, it being understood that
the provisions of this Article Thirteen are and are intended solely for the
purpose of defining the relative rights of the Holders of the Notes, on the one
hand, and the holders of the Senior Indebtedness, on the other hand.
SECTION 1305. Obligation of the Company Unconditional. Nothing
contained in this Article Thirteen or elsewhere in this Indenture or in any
Note is intended to or shall impair, as between the Company, its creditors
other than holders of Senior Indebtedness and the Holders of the Notes, the
obligation of the Company, which is absolute and unconditional, to pay to the
Holders of the Notes the principal of and premium, if any, and interest on the
Notes as and when the same shall become due and payable in accordance with
their terms, or is intended to or shall affect the relative rights of the
Holders of the Notes and creditors of the Company other than the holders of the
Senior Indebtedness, nor shall anything herein or therein prevent the Trustee
or the Holder of any Note from exercising all remedies otherwise permitted by
applicable law upon default under this Indenture, subject to the rights, if
any, under this Article Thirteen of the holders of Senior Indebtedness in
respect of cash, property or securities of the Company received upon the
exercise of any such remedy.
Nothing contained in this Article Thirteen or elsewhere in this
Indenture or in any Note is intended to or shall affect the obligation of the
Company to make, or prevent the Company from making, at any time except during
the pendency of any dissolution, winding up, liquidation or reorganization
proceeding, and except as provided in Section 1302, payments at any time of the
principal of, premium, if any, or interest on the Notes .
SECTION 1306. Trustee Entitled To Assume Payments Not
Prohibited in Absence of Notice. Notwithstanding the provisions of this
Article or any other provision of this Indenture, but subject to the provisions
of Section 601, the Trustee shall not at any time be charged with knowledge of
the existence of any facts which would prohibit the making of any payment to or
by the Trustee, unless and until the Trustee shall have received written notice
thereof from the Company or from one or more holders of Senior Indebtedness or
from any representative thereof or from any trustee therefor; and, prior to the
receipt of any such written notice, the Trustee shall be entitled to assume
conclusively that no such facts exist.
SECTION 1307. Application by Trustee of Monies Deposited with
It. Except as provided in Article Four, any
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deposit of monies by the Company with the Trustee (whether or not in trust) for
payment of the principal of or premium, if any, or interest on any Notes shall
be subject to the provisions of Sections 1301, 1302, 1303 and 1304 except that,
if prior to the second Business Day preceding the date on which by the terms of
this Indenture any such monies may become payable for any purpose (including,
without limitation, the payment of either the principal of or premium, if any,
or the interest on any Note) the Trustee shall not have received with respect
to such monies the notice provided for in Section 1306, then the Trustee shall
have full power and authority to receive such monies and to apply the same to
the purpose for which they were received, and shall not be affected by any
notice to the contrary which may be received by it on or after such date. This
Section 1307 shall be construed solely for the benefit of the Trustee and any
Paying Agent and shall not otherwise affect the rights of any holder of such
Senior Indebtedness.
SECTION 1308. Subordination Rights Not Impaired by Acts or
Omissions of Company or Holders of Senior Indebtedness. No right of any
present or future holders of any Senior Indebtedness to enforce subordination
as provided herein shall at any time in any way be prejudiced or impaired by
any act or failure to act on the part of the Company or by any act or failure
to act, in good faith, by any such holder, or by any noncompliance by the
Company with the terms of this Indenture, regardless of any knowledge thereof
with which any such holder may have or be otherwise charged.
SECTION 1309. Noteholders Authorize Trustee To Effectuate
Subordination of Notes. Each Holder of the Notes by acceptance thereof
authorizes and expressly directs the Trustee on behalf of such Holder to take
such action as may be necessary or appropriate to effectuate the subordination
provided in this Article Thirteen and appoints the Trustee his attorney-in-fact
for any and all such purposes.
With respect to the holders of Senior Indebtedness, the Trustee
undertakes to perform or to observe only such of its covenants and obligations
as are specifically set forth in this Article Thirteen, and no implied
covenants or obligations with respect to the holders of Senior Indebtedness
shall be read into this Indenture against the Trustee. The Trustee shall not
be deemed to owe any fiduciary duty to the holders of Senior Indebtedness and,
subject to the provisions of section 601, the Trustee shall not be liable to
any holder of Senior Indebtedness if it shall mistakenly pay over or deliver to
Holders, the Company or any other Person monies or assets to which any holder
of Senior Indebtedness shall be entitled by virtue of this Article Thirteen or
otherwise.
SECTION 1310. Right of Trustee To Hold Senior Indebtedness;
Compensation Not Prejudiced. The Trustee shall be entitled to all of the
rights set forth in this Article Thirteen
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in respect of any Senior Indebtedness at any time held by it to the same extent
as any other holder of Senior Indebtedness, and nothing in this Indenture shall
be construed to deprive the Trustee of any of its rights as such holder.
Nothing in this Article Thirteen shall apply to claims of or payments to the
Trustee pursuant to Section 607.
SECTION 1311. Article Thirteen Not To Prevent Events of
Default. The failure to make a payment on account of principal or interest by
reason of any provision in this Article Thirteen shall not be construed as
preventing the occurrence of an Event of Default under Section 501.
SECTION 1312. Article Applicable to Paying Agent. In case at
any time any Paying Agent other than the Trustee shall have been appointed by
the Company and be then acting hereunder, the term "Trustee" as used in this
Article shall in such case (unless the context shall otherwise require) be
construed as extending to and including such Paying Agent within its meaning as
fully for all intents and purposes as if such Paying Agent were named in this
Article in addition to or place of the Trustee; provided, however, that Section
1306 and 1310 shall not apply to the Company or any Affiliate of the Company if
the Company or such Affiliate acts as Paying Agent.
ARTICLE FOURTEEN
Immunity of Incorporators,
Stockholders, Officers and Directors
SECTION 1401. Indenture and Notes Solely Corporate Obligations.
No recourse for the payment of the principal of or premium, if any, or interest
on any Note, or for any claim based therein or contained in this Indenture or
in any supplemental indenture, or in any Note, or because of the creation of
any Indebtedness represented thereby, shall be had against any incorporator,
stockholder, officer or director, as such, past, present or future, of the
Company or any successor corporation, either directly or through the Company or
any successor corporation, whether by virtue of any constitution, statute or
rule of law, or by the enforcement of any assessment or penalty or otherwise;
it being expressly understood that all such liability is hereby expressly
waived and released as a condition of, and as a consideration for, the
execution of this Indenture and the issue of the Note.
ARTICLE FIFTEEN
Purchase by Company at the Option of Holders
upon the Occurrence of a Change of Control
SECTION 1501. Right of Holders upon the Occurrence of a Change
of Control. In the event that a Change of Control
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occurs, each Holder of any Note shall have the right, at the Holder's option,
and subject to the conditions of this Article Fifteen and the provisions of
Article Thirteen, to require the Company to Purchase for cash all or any part
(which shall be $1,000 or a whole multiple thereof) of such Holder's Notes, on
the date (the "Purchase Date") that is the first Business Day that is 40 or
more days after the mailing by the Company of the notice that a Change of
Control has occurred (a "Change of Control Notice"), at 101% of the principal
amount thereof, plus interest accrued and unpaid to the Purchase Date (provided
that, if the Purchase Date is on or subsequent to a date on which interest is
otherwise payable on the Notes, such interest shall be payable to the Holders
of the Notes as of the applicable Regular Record Date or Special Record Date
for such interest payment).
SECTION 1502. Change of Control Notice. Unless the Company
shall theretofore have called for redemption all of the Notes pursuant to this
Indenture, within 20 days after a Change of Control has occurred (or, in the
case of a Change of Control referred to in clause (c) of the definition
thereof, 20 days after the Company has notice of such event), the Company or,
at the option of the Company, the Trustee (in the name and at the expense of
the Company) shall mail, by first-class mail, postage prepaid, to the Trustee
and each Holder of Notes a Change of Control Notice (provided that the running
of such 20-day period shall be suspended during any period when the delivery of
the Change of Control Notice is delayed or suspended by reason of any court's
or governmental authority's review of or ruling on any materials being employed
by the Company to effect such purchase, so long as the Company has used and
continues to use its best efforts to make and conclude promptly such purchase).
Such Change of Control Notice shall state:
(1) the circumstances and relevant facts regarding such Change
of Control which the Company in good faith believes will enable Holders
to make an informed decision (which at a minimum will include
information with respect to pro forma historical income, cash flow and
capitalization, each after giving effect to such Change of Control), the
event causing such Change of Control (specifying such event) and the
date of such Change of Control;
(2) the Purchase Date;
(3) the purchase price for the Notes;
(4) that Holders who want to exercise their right to cause
Notes to be purchased by the Company on the Purchase Date must deliver
to the Company (or the Paying Agent designated by the Company for such
purpose in such notice) prior to the close of business five Business
Days prior to the Purchase Date an exercise notice satisfying the
requirements described in the Notes and in Section 1503 (a
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"Change of Control Exercise Notice"), together with the Notes with
respect to which the right is being exercised, duly endorsed for
transfer;
(5) the Conversion Price and any adjustments thereto;
(6) that a Change of Control Exercise Notice may be revoked
as described in Section 1504 and that the Notes (or portions thereof)
with respect to which a Change of Control Exercise Notice has been given
may be converted into Common Stock only if the Change of Control
Exercise Notice is so withdrawn or the Company defaults in its
obligation to purchase the Note on the Purchase Date; and
(7) that interest on Notes (or portions thereof) with respect
to which the right is exercised shall cease to accrue from and after the
Purchase Date (unless the Company defaults in its obligation to purchase
the Note on the Purchase Date).
Neither the failure to mail such Change of Control Notice, nor
any defect in any such notice so mailed, to any particular Holders of Notes
shall affect the sufficiency of such notice with respect to other Holders of
Notes. The Company also shall deliver a copy of such Change of Control Notice
to the Trustee and shall cause a copy of such Change of Control Notice to be
published in a newspaper of national circulation, which shall be The Wall
Street Journal unless it is not then so circulated; provided however, that the
copy of such Change of Control Notice to be published may omit the pro forma
statements and other information otherwise required by the first clause of
paragraph (1) of Section 1502.
If any of the foregoing provisions violates any applicable law,
applicable law shall govern.
SECTION 1503. Change of Control Exercise Notice. For a Holder
to exercise the right to cause the Company to purchase a Note after a Change of
Control, such Holder must deliver to the Company (or any Paying Agent
designated by the Company for such purpose in a Change of Control Notice) (a) a
Change of Control Exercise Notice which shall state that the Holder is electing
thereby to exercise his right to cause the Company to purchase his Note or
Notes and shall identify (i) the name of the Holder, (ii) any Notes with
respect to which the right is being exercised and (iii) the principal amount
thereof (which amount must be $1,000 or an integral multiple thereof) and (b)
any Notes with respect to which the right is being exercised, duly endorsed for
transfer.
Such Change of Control Exercise Notice and any such Notes must
be delivered no later than, and the right of Holders to exercise the purchase
right will terminate as of, the close of business five Business Days prior to
the Purchase Date and the
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Company will not be obligated to purchase any Notes presented and surrendered
from and after such time.
SECTION 1504. Effect of Exercise and Other Matters. With
respect to each Note (or portion thereof) that has been duly surrendered and
tendered and as to which a Change of Control Exercise Notice has been given
(and not withdrawn as described below), such Note (or portion thereof) shall
become due and payable on the Purchase Date. Subject to Article Thirteen and
Section 1501, such Note (or portion thereof) shall be purchased by the Company
at the purchase price specified in section 1501, including the accrued interest
specified thereon. Interest on such Note (or portion thereof) shall cease to
accrue from and after the Purchase Date (unless the Company defaults in the
payment of any such Note at the purchase price, together with interest accrued
thereon to the Purchase Date).
A Change of Control Exercise Notice may be withdrawn by means of
a written notice of withdrawal delivered to the Company (or any Paying Agent
designated by the Company for such purpose in a Change of Control Notice) at
any time prior to the close of business three Business Days prior to the
Purchase Date (or if the Company defaults in its obligation to purchase Notes
on the Purchase Date), which withdrawal shall:
(1) identify any Notes with respect to which such notice of
withdrawal is being submitted and the principal amount thereof (which
amount must be $1,000 or an integral multiple thereof); and
(2) identify any Notes which remain subject to the original
Change of Control Exercise Notice and which have been delivered for
purchase by the Company and the principal amount thereof (which amount
must be $1,000 or an integral multiple thereof).
There shall be no purchase of any Notes pursuant to this Article
Fifteen if there has occurred (prior to, on or after the giving, by the Holders
of such Notes, of the required Change of Control Exercise Notice) and is
continuing an Event of Default (other than a default in the payment of the
purchase price or any other default in the obligations of the Company under
this Article Fifteen). The failure of the Company to purchase any Notes on the
applicable due date by reason of the foregoing sentence shall not be construed
as preventing the occurrence of a default or Event of Default under Section
501.
If a Note is to be purchased in part only, the Company shall
execute and the Trustee shall authenticate and deliver to the Holder thereof
without charge, after the purchase of the relevant part, a new Note or Notes in
authorized denominations in aggregate principal amount equal to the portion of
the Note not purchased.
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If any Note delivered with a Change of Control Exercise Notice
is not purchased on the Purchase Date, the principal and premium, if any,
shall, until paid or duly provided for, bear interest, to the extent permitted
by applicable law, from the Purchase Date at the rate borne by the Note and
such Note shall remain convertible into Common Stock until the principal and
premium, if any, and accrued but unpaid interest thereon shall have been paid
or duly provided for.
In connection with any purchase of Notes under this Article
Fifteen, the Company shall, to the extent then applicable, (i) comply with
Rules 13e-4 and 14e-1 and any other tender offer rules under the Exchange Act,
(ii) file the related Schedule 13E-4 or any other schedule required under the
Exchange Act and (iii) otherwise comply with all Federal and State securities
laws so as to permit the rights and obligations under this Article Fifteen to
be exercised in time and in the manner specified in this Article Fifteen.
IBJ Xxxxxxxx Bank & Trust Company hereby accepts the trusts in
this Indenture declared and provided, upon the terms and conditions hereinabove
set forth.
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IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed, and their respective seals to be hereunto fixed
and attested, all as of the day and year first above written.
SEC GROUP, INC.,
By: /s/ XXXXXX X. XXXXXXXX
--------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Chairman and Chief
Executive Officer
Attest:
/s/ XXXXXXX XXXXXXXXX
-----------------------------
Name: Xxxxxxx XxXxxxxxx
Title: Vice President
IBJ XXXXXXXX BANK & TRUST COMPANY
By:
-------------------------------------
Name:
Title:
Attest:
-------------------------------
Name:
Title:
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96
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed, and their respective seals to be hereunto fixed
and attested, all as of the day and year first above written.
BEC GROUP, INC.,
By:
-------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Chairman and Chief
Executive Officer
Attest:
-------------------------------
Name: Xxxxxxx XxXxxxxxx
Title: Vice President
IBJ XXXXXXXX BANK & TRUST COMPANY
By: /s/ XXX XXXXXX
-------------------------------------
Name: Xxx Xxxxxx
Title: Vice President
Attest:
/s/ XXXXX XXXXXXX
-------------------------------
Name: Xxxxx Xxxxxxx
Title: Assistant Secretary
