Exhibit 4.1
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CHARMING SHOPPES, INC.
and
WACHOVIA BANK, NATIONAL ASSOCIATION
as
Trustee
--------------------
INDENTURE
Dated as of May 28, 2002
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$130,000,000 Principal Amount/a/
4.75% SENIOR CONVERTIBLE NOTES DUE 2012
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a Plus an additional $20,000,000 issuable at the option of the Initial
Purchasers as described herein
CROSS-REFERENCE TABLE
TIA Indenture
Section Section
------- -----------
310(a)(1) ................................................... 7.10
(a)(2) ................................................ 7.10
(a)(3) ................................................ N.A.
(a)(4) ................................................ N.A.
(a)(5) ................................................ N.A.
(b) ................................................... 7.08; 7.10; 11.02
(c) ................................................... N.A.
311(a) ...................................................... 7.11
(b) ................................................... 7.11
(c) ................................................... N.A.
312(a) ...................................................... 2.05
(b) ................................................... 11.03
(c) ................................................... 11.03
313(a) ...................................................... 7.06
(b)(1) ................................................ N.A.
(b)(2) ................................................ 7.06
(c) ................................................... 7.06; 11.02
(d) ................................................... 7.06
314(a) ...................................................... 4.02
(b) ................................................... N.A.
(c)(1) ................................................ 11.04
(c)(2) ................................................ 11.04
(c)(3) ................................................ N.A.
(d) ................................................... N.A.
(e) ................................................... 11.05
(f) ................................................... N.A.
315(a) ...................................................... 7.01(b)
(b) ................................................... 7.05; 11.02
(c) ................................................... 7.01(a)
(d) ................................................... 7.01(c)
(e) ................................................... 6.11
316(a)(last sentence) ....................................... 2.09
(a)(1)(A) ............................................. 6.05
(a)(1)(B) ............................................. 6.04
(a)(2) ................................................ N.A.
(b) ................................................... 6.07
317(a)(1) ................................................... 6.08
(a)(2) ................................................ 6.09
(b) ................................................... 2.04
318(a) ...................................................... 11.01
TABLE OF CONTENTS
Page
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ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions. ............................................. 1
SECTION 1.02. Other Definitions. ....................................... 4
SECTION 1.03. Incorporation by Reference of Trust Indenture Act. ....... 5
SECTION 1.04. Rules of Construction. ................................... 5
ARTICLE TWO
THE SECURITIES
SECTION 2.01. Form and Dating. ......................................... 6
SECTION 2.02. Execution and Authentication. ............................ 6
SECTION 2.03. Registrar, Paying Agent and Conversion Agent. ............ 7
SECTION 2.04. Paying Agent to Hold Money in Trust. ..................... 7
SECTION 2.05. Securityholder Lists. .................................... 8
SECTION 2.06. Transfer and Exchange. ................................... 8
SECTION 2.07. Replacement Securities. .................................. 8
SECTION 2.08. Outstanding Securities. .................................. 9
SECTION 2.09. Securities Held by the Company or an Affiliate. .......... 9
SECTION 2.10. Temporary Securities. .................................... 9
SECTION 2.11. Cancellation. ............................................ 9
SECTION 2.12. Defaulted Interest. ...................................... 10
SECTION 2.13. CUSIP Numbers. ........................................... 10
SECTION 2.14. Deposit of Moneys. ....................................... 10
SECTION 2.15. Book-Entry Provisions for Global Securities. ............. 10
SECTION 2.16. Special Transfer Provisions. ............................. 11
SECTION 2.17. Restrictive Legends. ..................................... 14
ARTICLE THREE
REDEMPTION; REPURCHASE
SECTION 3.01. Notices to Trustee. ...................................... 14
SECTION 3.02. Selection of Securities to Be Redeemed. .................. 15
SECTION 3.03. Notice of Redemption. .................................... 15
SECTION 3.04. Effect of Notice of Redemption. .......................... 16
SECTION 3.05. Deposit of Redemption Price. ............................. 16
SECTION 3.06. Securities Redeemed in Part. ............................. 16
SECTION 3.07. Repurchase at Option of Holder upon a Repurchase Event.... 17
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ARTICLE FOUR
COVENANTS
SECTION 4.01. Payment of Securities. ................................... 21
SECTION 4.02. Maintenance of Office or Agency. ......................... 21
SECTION 4.03. Reports to Holders. ...................................... 22
SECTION 4.04. Compliance Certificate. .................................. 22
SECTION 4.05. Stay, Extension and Usury Laws. .......................... 23
SECTION 4.06. Corporate Existence. ..................................... 23
SECTION 4.07. Notice of Default. ....................................... 23
ARTICLE FIVE
CONSOLIDATION, MERGER AND SALE OF ASSETS
SECTION 5.01. When Company May Merge, etc. ............................. 23
SECTION 5.02. Successor Substituted. ................................... 24
ARTICLE SIX
DEFAULTS AND REMEDIES
SECTION 6.01. Events of Default. ....................................... 24
SECTION 6.02. Acceleration. ............................................ 25
SECTION 6.03. Other Remedies. .......................................... 26
SECTION 6.04. Waiver of Past Defaults. ................................. 26
SECTION 6.05. Control by Majority. ..................................... 26
SECTION 6.06. Limitation on Suits. ..................................... 26
SECTION 6.07. Rights of Holders to Receive Payment or Convert. ......... 27
SECTION 6.08. Collection Suit by Trustee. .............................. 27
SECTION 6.09. Trustee May File Proofs of Claim. ........................ 27
SECTION 6.10. Priorities. .............................................. 28
SECTION 6.11. Undertaking for Costs. ................................... 28
ARTICLE SEVEN
TRUSTEE
SECTION 7.01. Duties of Trustee. ....................................... 28
SECTION 7.02. Rights of Trustee. ....................................... 29
SECTION 7.03. Individual Rights of Trustee. ............................ 30
SECTION 7.04. Trustee's Disclaimer. .................................... 31
SECTION 7.05. Notice of Defaults. ...................................... 31
SECTION 7.06. Reports by Trustee to Holders. ........................... 31
SECTION 7.07. Compensation and Indemnity. .............................. 31
SECTION 7.08. Replacement of Trustee. .................................. 32
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SECTION 7.09. Successor Trustee by Merger, etc. ........................ 33
SECTION 7.10. Eligibility; Disqualification. ........................... 33
SECTION 7.11. Preferential Collection of Claims Against Company. ....... 33
ARTICLE EIGHT
SATISFACTION AND DISCHARGE; DEFEASANCE
SECTION 8.01. Termination of Company's Obligations. .................... 33
SECTION 8.02. Application of Trust Money. .............................. 35
SECTION 8.03. Repayment to Company. .................................... 35
SECTION 8.04. Reinstatement. ........................................... 35
ARTICLE NINE
AMENDMENTS
SECTION 9.01. Without Consent of Holders. .............................. 35
SECTION 9.02. With Consent of Holders. ................................. 36
SECTION 9.03. Compliance with Trust Indenture Act. ..................... 37
SECTION 9.04. Revocation and Effect of Consents. ....................... 37
SECTION 9.05. Notation on or Exchange of Securities. ................... 37
SECTION 9.06. Trustee Protected. ....................................... 37
ARTICLE TEN
CONVERSION
SECTION 10.01. Conversion Privilege; Restrictive Legends. ............... 38
SECTION 10.02. Conversion Procedure. .................................... 38
SECTION 10.03. Fractional Shares. ....................................... 39
SECTION 10.04. Taxes on Conversion. ..................................... 39
SECTION 10.05. Company to Provide Stock. ................................ 39
SECTION 10.06. Adjustment of Conversion Price. .......................... 40
SECTION 10.07. Effect of Reclassification, Consolidation, Merger or Sale. 48
SECTION 10.08. Notice of Certain Transactions. .......................... 48
SECTION 10.09. Company Determination Final. ............................. 49
SECTION 10.10. Trustee's Disclaimer. .................................... 49
ARTICLE ELEVEN
MISCELLANEOUS
SECTION 11.01. Trust Indenture Act Controls. ............................ 49
SECTION 11.02. Notices. ................................................. 49
SECTION 11.03. Communication by Holders with Other Holders. ............. 50
SECTION 11.04. Certificate and Opinion as to Conditions Precedent. ...... 50
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SECTION 11.05. Statements Required in Certificate or Opinion. ........... 51
SECTION 11.06. Rules by Trustee and Agents. ............................. 51
SECTION 11.07. Legal Holidays. .......................................... 51
SECTION 11.08. No Recourse Against Others. .............................. 52
SECTION 11.09. Duplicate Originals. ..................................... 52
SECTION 11.10. Governing Law. ........................................... 52
SECTION 11.11. No Adverse Interpretation of Other Agreements. ........... 52
SECTION 11.12. Successors. .............................................. 52
SECTION 11.13. Separability. ............................................ 52
SECTION 11.14. Table of Contents, Headings, etc. ........................ 52
SIGNATURES ................................................................. S-1
EXHIBITS
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Exhibit A - Form of Security
Exhibit B - Form of Legends
Exhibit C - Form of Certificate to Be Delivered in Connection with
Transfers Pursuant to Regulation S
Exhibit D - Form of Notice of Transfer Pursuant to Registration Statement
Exhibit E - Form of Opinion of Counsel in Connection with Registration
of Securities
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INDENTURE dated as of May 28, 2002 between CHARMING SHOPPES, INC., a
Pennsylvania corporation (the "Company"), and WACHOVIA BANK, NATIONAL
ASSOCIATION, a national banking association, as trustee (the "Trustee").
Each party agrees as follows for the benefit of the other party and
for the equal and ratable benefit of the Holders of the Company's 4.75% Senior
Convertible Notes Due 2012:
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions.
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"Affiliate" means any Person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company. For
this purpose, "control" shall mean the power to direct the management and
policies of a Person through the ownership of securities, by contract or
otherwise.
"Agent" means any Registrar, Paying Agent, Conversion Agent or
co-registrar.
"Board of Directors" means the Board of Directors of the Company or
any committee of the Board authorized to act for it hereunder.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Capital Stock" means any and all shares, interests, participations or
other equivalents (however designated) of capital stock of the Company and all
warrants or options to acquire such capital stock.
"Common Stock" means the common stock, par value $.10 per share, of
the Company.
"Company" means the party named as such above until a successor
replaces it pursuant to the applicable provision hereof and thereafter means the
successor.
"Company Request" or "Company Order" means a written request or order
signed on behalf of the Company by its Chairman of the Board, its President or
any Senior Vice President, Executive Vice President or Vice President and by its
Treasurer, Secretary or an Assistant Treasurer or an Assistant Secretary, and
delivered to the Trustee.
"Conversion Price" means $9.88 per share of Common Stock, as adjusted
pursuant to Article Ten.
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"Corporate Trust Office of the Trustee" shall be at the address of the
Trustee specified in Section 11.02 or such other address as the Trustee may give
notice of to the Company.
"Default" means any event which is, or after notice or passage of time
or both would be, an Event of Default.
"Depositary" means The Depository Trust Company, its nominees and
successors.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Holder" means a Person in whose name a Security is registered on the
Registrar's books.
"Indenture" means this Indenture as amended or supplemented from time
to time.
"Institutional Accredited Investor" shall have the meaning ascribed to
it in Rule 501(a)(1), (2), (3) or (7) under the Securities Act of 1933.
"interest" means, with respect to any Security, interest on the
Security plus liquidated damages, if any.
"Issue Date" means (i) May 28, 2002 with respect to the $130,000,000
aggregate principal amount of Securities issued on such date, and (ii) with
respect to any of up to $20,000,000 aggregate principal amount of Securities
that may be issued after May 28, 2002 pursuant to the option described in
Section 2.02, the respective issue date of such Securities.
"liquidated damages" has the meaning provided in the Registration
Rights Agreement.
"Maturity Date" means June 1, 2012.
"Non-U.S. Person" means a Person who is not a U.S. Person, as defined
in Regulation S under the Securities Act.
"obligations" means with respect to any indebtedness, all obligations
(whether in existence on the date hereof or arising afterwards, absolute or
contingent, direct or indirect) for or in respect of principal (when due, upon
acceleration, upon redemption, upon mandatory repayment or repurchase pursuant
to a mandatory offer to purchase, or otherwise), premium, interest, penalties,
fees, indemnification, reimbursement and other amounts payable and liabilities
with respect to such indebtedness, including, without limitation, all interest
accrued or accruing after, or which would accrue but for, the commencement of
any bankruptcy, insolvency or reorganization or similar case or proceeding at
the contract rate (including, without limitation, any contract rate applicable
upon default) specified in the relevant documentation, whether or not the claim
for such interest is allowed as a claim in such case or proceeding.
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"Officer" means the Chairman of the Board, the President, any Senior
Vice President, Executive Vice President, any Vice President, the Chief
Financial Officer, the Treasurer or the Secretary of the Company.
"Officers' Certificate" means a certificate signed, on behalf of the
Company, by two Officers or by an Officer and an Assistant Treasurer or an
Assistant Secretary of the Company.
"Opinion of Counsel" means a written opinion from legal counsel who
may be an employee of or counsel for the Company.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, limited liability company, trust,
unincorporated organization or government or other agency or political
subdivision thereof.
"principal" of a debt security means the principal of the security, if
any, on the security.
"QIB" means a "qualified institutional buyer" within the meaning of
Rule 144A under the Securities Act.
"Registration Rights Agreement" means the Registration Rights
Agreement dated as of May , 2002 by and among the Company and the Initial
Purchasers.
"Regulation S" means Regulation S under the Securities Act.
"Regulation S Global Security" means a permanent Global Security in
registered form representing the aggregate principal amount of Securities sold
in reliance on Regulation S.
"Restricted Security" means a Security that constitutes a "Restricted
Security" within the meaning of Rule 144(a)(3) under the Securities Act;
provided, however, that the Trustee shall be entitled to request and
conclusively rely on an Opinion of Counsel with respect to whether any Security
constitutes a Restricted Security.
"Rule 144A Global Security" means a permanent Global Security in
registered form representing the aggregate principal amount of Securities sold
in reliance on Rule 144A.
"SEC" means the Securities and Exchange Commission.
"Securities" means the 4.75% Senior Convertible Notes Due 2012 issued
by the Company pursuant to this Indenture.
"Securities Act" means the Securities Act of 1933, as amended.
"Significant Subsidiary" shall have the meaning provided to it
in Section 1-02(w) of Regulation S-X.
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"subsidiary" means (i) a corporation a majority of whose Capital Stock
with voting power, under ordinary circumstances, to elect directors is at the
time, directly or indirectly, owned by the Company, by one or more subsidiaries
of the Company or by the Company and one or more subsidiaries thereof or (ii)
any other Person (other than a corporation) in which the Company, one or more
subsidiaries thereof or the Company and one or more subsidiaries thereof,
directly or indirectly, at the date of determination thereof, have at least
majority ownership voting interest.
"Trust Indenture Act" or "TIA," subject to Section 9.03, means the
Trust Indenture Act of 1939, as in force on the date as of which this instrument
was executed; provided, however, that in the event the Trust Indenture Act of
1939 is amended after such date, "Trust Indenture Act" or "TIA" means, to the
extent required by any such amendment, the Trust Indenture Act of 1939 as so
amended.
"Trust Officer" means any officer of the Trustee assigned by the
Trustee to administer this Indenture.
"Trustee" means the party named as such in this Indenture until a
successor replaces it in accordance with the provisions hereof and thereafter
means the successor.
SECTION 1.02. Other Definitions.
-----------------
Term Defined in Section
---- ------------------
"Bankruptcy Law" ...................................... 6.01
"Business Day" ........................................ 11.07
"Change in Control" ................................... 3.07(l)
"Closing Price" ....................................... 10.06(g)
"Common Dividend Amount" .............................. 10.06(e)
"Company Notice" ...................................... 3.07(b)
"Conversion Agent" .................................... 2.03
"Current Market Price" ................................ 10.06(g)
"Custodian" ........................................... 6.01
"Event of Default" .................................... 6.01
"fair market value" ................................... 10.06(g)
"Global Security" ..................................... 2.01
"Initial Purchasers" .................................. 2.02
"Legal Holiday" ....................................... 11.07
"Market Capitalization" ............................... 10.06(e)
"Participants" ........................................ 2.15(a)
"Paying Agent" ........................................ 2.03
"Physical Securities" ................................. 2.15(b)
"Private Placement Legend" ............................ 2.17
"Record Date" ......................................... 10.06(g)
"Registrar" ........................................... 2.03
"Repurchase Date" ..................................... 3.07(a)
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"Repurchase Event" ......................................... 3.07(l)
"Repurchase Price" ......................................... 3.07(a)
"Subject Securities" ....................................... 10.06(d)
"Trading Day" .............................................. 10.06(g)
"Trigger Event" ............................................ 10.06(d)
"U.S. Government Obligations" .............................. 8.01
SECTION 1.03. Incorporation by Reference of Trust Indenture Act.
-------------------------------------------------
Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following
meanings:
"Commission" means the SEC;
"indenture securities" means the Securities;
"indenture security holder" means a Holder;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the
Trustee; and
"obligor" on the indenture securities means the Company.
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule under the TIA
and not otherwise defined herein have the meanings so assigned to them.
SECTION 1.04. Rules of Construction.
---------------------
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the
meaning assigned to it in accordance with generally
accepted accounting principles in effect on the date
hereof;
(3) "or" is not exclusive;
(4) words in the singular include the plural and in the
plural include the singular;
(5) provisions apply to successive events and
transactions; and
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(6) "herein", "hereof" and other words of similar import refer to this
Indenture as a whole and not to any particular Article, Section or other
subdivision.
ARTICLE TWO
THE SECURITIES
SECTION 2.01. Form and Dating.
---------------
The Securities and the Trustee's certificate of authentication shall
be substantially in the form set forth in Exhibit A, which is incorporated in
and forms a part of this Indenture. The Securities may have notations, legends
or endorsements required by law, stock exchange rule or usage. Each Security
shall be dated the date of its authentication.
Securities offered and sold in reliance on Rule 144A, Securities
offered and sold in reliance on Regulation S and Securities subsequently
transferred to Institutional Accredited Investors shall be issued initially in
the form of one or more Global Securities, substantially in the form set forth
in Exhibit A (the "Global Securities"). The aggregate principal amount of the
Global Securities may from time to time be increased or decreased by adjustments
made on the records of the Trustee, as custodian for the Depositary, as
hereinafter provided.
SECTION 2.02. Execution and Authentication.
----------------------------
Two Officers shall sign the Securities for the Company by manual or
facsimile signature.
If an Officer whose signature is on a Security no longer holds that
office at the time the Security is authenticated, the Security shall
nevertheless be valid.
A Security shall not be valid until authenticated by the manual
signature of the Trustee. The signature shall be conclusive evidence that the
Security has been authenticated under this Indenture.
Upon a written order of the Company signed by two Officers or by an
Officer and an Assistant Treasurer of the Company, the Trustee shall
authenticate Securities for original issue in the principal amount of
$130,000,000 and such additional principal amounts, if any, as shall be
determined pursuant to the next sentence of this Section 2.02. Upon receipt by
the Trustee of an Officers' Certificate stating that the Initial Purchasers have
elected to purchase from the Company a specified principal amount of additional
Securities, not to exceed $20,000,000, pursuant to Section l of the Purchase
Agreement dated May 21, 2002 by and among the Company, as issuer, and X.X.
Xxxxxx Securities Inc., Bear, Xxxxxxx & Co. Inc., First Union Securities, Inc.,
Lazard Freres & Co. LLC and McDonald Investments Inc., as initial purchasers
(the "Initial Purchasers"), the Trustee shall authenticate and deliver such
specified principal amount of additional Securities to or upon the written order
of the Company signed as provided in the immediately preceding sentence. Such
Officers' Certificate must
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be received by the Trustee at least two full Business Days prior to the
proposed date for delivery of such additional Securities, but, in any case, not
later than June 20, 2002. The aggregate principal amount of Securities
outstanding at any time may not exceed $150,000,000 except as provided in
Section 2.07.
Upon a written order of the Company signed by two Officers or by an
Officer and an Assistant Treasurer of the Company, the Trustee shall
authenticate Securities not bearing the Private Placement Legend to be issued to
the transferee when sold pursuant to an effective registration statement under
the Securities Act.
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Securities. An authenticating agent may authenticate
Securities whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such Agent. An
authenticating agent has the same rights as an Agent to deal with the Company or
an Affiliate.
The Securities shall be issuable only in registered form without
coupons and only in denominations of $1,000 principal amount and any integral
multiple thereof. The Securities shall bear interest at the rate, calculated and
paid, as provided in the form of Security set forth in Exhibit A.
SECTION 2.03. Registrar, Paying Agent and Conversion Agent.
--------------------------------------------
The Company shall maintain an office or agency where Securities may be
presented for registration of transfer or for exchange ("Registrar"), an office
or agency where Securities may be presented for payment ("Paying Agent") and an
office or agency where Securities may be presented for conversion ("Conversion
Agent"). The Registrar shall keep a register of the Securities and of their
transfer and exchange. The Company may appoint or change one or more
co-registrars, one or more additional paying agents and one or more additional
conversion agents without notice and may act in any such capacity on its own
behalf. The term "Registrar" includes any co-registrar; the term "Paying Agent"
includes any additional paying agent; the term "Conversion Agent" includes any
additional conversion agent.
The Company shall enter into an appropriate agency agreement with any
Agent not a party to this Indenture. The agreement shall implement the
provisions of this Indenture that relate to such Agent. The Company shall notify
the Trustee of the name and address of any Agent not a party to this Indenture.
If the Company fails to maintain a Registrar, Paying Agent or Conversion Agent,
the Trustee shall act as such.
The Company initially appoints the Trustee as Paying Agent, Registrar
and Conversion Agent.
SECTION 2.04. Paying Agent to Hold Money in Trust.
-----------------------------------
Each Paying Agent shall hold in trust for the benefit of the Holders
or the Trustee all moneys held by the Paying Agent for the payment of principal
of or interest on the Securities and
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shall notify the Trustee of any default by the Company in making any such
payment. While any such default continues, the Trustee may require a Paying
Agent to pay all money held by it to the Trustee. The Company at any time may
require a Paying Agent to pay all money held by it to the Trustee. Upon payment
over to the Trustee, the Paying Agent shall have no further liability for the
money. If the Company acts as Paying Agent, it shall segregate and hold as a
separate trust fund all money held by it as Paying Agent.
SECTION 2.05. Securityholder Lists.
--------------------
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Holders. The Trustee shall make such a list available to the Company upon
request. If the Trustee is not the Registrar, the Company shall furnish to the
Trustee on or before each interest payment date and at such other times as the
Trustee may request in writing a list, in such form and as of such date as the
Trustee may reasonably require, of the names and addresses of Holders.
SECTION 2.06. Transfer and Exchange.
---------------------
Where Securities are presented to the Registrar with a request to
register their transfer or to exchange them for an equal principal amount of
Securities of other authorized denominations, the Registrar shall register the
transfer or make the exchange if its requirements for such transaction,
including the requirements under Section 2.16, are met. To permit registrations
of transfer and exchanges, the Company shall execute and the Trustee shall
authenticate Securities at the Registrar's request. The Company or the Trustee,
as the case may be, shall not be required (a) to issue or authenticate, register
the transfer of or exchange any Security during a period beginning at the
opening of business 10 Business Days before the mailing of a notice of
redemption of the Securities selected for redemption under Section 3.03 and
ending at the close of business on the day of such mailing, or (b) to register
the transfer of or exchange any Security so selected for redemption in whole or
in part, except the unredeemed portion of Securities being redeemed in part.
No service charge shall be made for any registration of transfer,
exchange or conversion of Securities, but the Company may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any transfer, registration of transfer or exchange of
Securities, other than exchanges pursuant to Sections 2.10, 3.06, 9.05 or 10.02
not involving any transfer.
SECTION 2.07. Replacement Securities.
----------------------
If the Holder of a Security claims that the Security has been
mutilated, lost, destroyed or wrongfully taken, the Company shall issue and the
Trustee shall authenticate a replacement Security if the Trustee's requirements
are met and, in the case of a mutilated Security, such mutilated Security is
surrendered to the Trustee. In the case of lost, destroyed or wrongfully taken
Securities, if required by the Trustee or the Company, an indemnity bond must be
provided by the Holder that is sufficient in the judgment of both to protect the
Company, the Trustee and any Agent from any loss
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that any of them may suffer if a Security is replaced. The Company or the
Trustee may charge for its expenses in replacing a Security.
In case any such mutilated, lost, destroyed or wrongfully taken
Security has become or is about to become due and payable, the Company in its
discretion may, instead of issuing a new Security, pay such Security when due.
Every replacement Security is an additional obligation of the Company.
SECTION 2.08. Outstanding Securities.
----------------------
Securities outstanding at any time shall be all the Securities
authenticated by the Trustee except for those converted, those canceled by it,
those delivered to it for cancellation and those described in this Section as
not outstanding. A Security does not cease to be outstanding because the Company
or one of its subsidiaries or Affiliates holds the Security.
If a Security is replaced pursuant to Section 2.07, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it, or a court
holds, that the replaced Security is held by a protected purchaser within the
meaning of the Uniform Commercial Code.
If the Paying Agent (other than the Company) holds on a redemption
date, Repurchase Date or the Maturity Date money sufficient to pay Securities
payable on that date, then on and after that date, such Securities shall be
deemed to be no longer outstanding and interest on them shall cease to accrue,
whether or not such Securities are surrendered.
SECTION 2.09. Securities Held by the Company or an Affiliate.
----------------------------------------------
In determining whether the Holders of the required aggregate principal
amount of Securities have concurred in any direction, waiver or consent,
Securities owned by the Company or a subsidiary or an Affiliate shall be
disregarded, except that for the purposes of determining whether the Trustee
shall be protected in relying on any such direction, waiver or consent, only
Securities that a Trust Officer actually knows are so owned shall be so
disregarded.
SECTION 2.10. Temporary Securities.
--------------------
Until definitive Securities are ready for delivery, the Company may
prepare and the Trustee shall authenticate temporary Securities. Temporary
Securities shall be substantially in the form of definitive Securities but may
have variations that the Company considers appropriate for temporary Securities.
Without unreasonable delay, the Company shall prepare and the Trustee shall
authenticate definitive Securities in exchange for temporary Securities.
SECTION 2.11. Cancellation.
------------
The Company at any time may deliver Securities to the Trustee for
cancellation. The Registrar, Paying Agent and Conversion Agent shall forward to
the Trustee any Securities surrendered to them for registration of transfer,
exchange, payment or conversion. The Trustee shall cancel
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all Securities surrendered for registration of transfer, exchange, payment,
conversion or cancellation and the Trustee shall dispose of such canceled
Securities in its customary manner. The Company may not issue new Securities to
replace Securities that it has paid or delivered to the Trustee for cancellation
or that any Holder has converted pursuant to Article Ten.
SECTION 2.12. Defaulted Interest.
------------------
If and to the extent the Company defaults in a payment of interest on
the Securities, it shall pay the defaulted interest in any lawful manner plus,
to the extent not prohibited by applicable statute or case law, interest payable
on the defaulted interest. It may pay the defaulted interest to the Persons who
are Holders on a subsequent special record date. The Company shall fix such
record date and payment date. At least 15 days before a special record date, the
Company shall mail to Holders a notice that states the record date, payment date
and amount of interest to be paid.
SECTION 2.13. CUSIP Numbers.
-------------
The Company in issuing the Securities may use one or more "CUSIP"
numbers, and if so, the Trustee shall use the CUSIP numbers in notices of
redemption or exchange as a convenience to Holders; provided, however, that no
representation will thereby be deemed to be made by the Trustee as to the
correctness or accuracy of the CUSIP numbers printed in the notice or on the
Securities, and that reliance may be placed only on the other identification
numbers printed on the Securities. The Company shall promptly notify the Trustee
of any change in the CUSIP number.
SECTION 2.14. Deposit of Moneys.
-----------------
Prior to 10:00 a.m., New York City time, on each interest payment
date, redemption date, Repurchase Date and the Maturity Date, the Company shall
deposit with the Paying Agent in immediately available funds money sufficient to
make cash payments, if any, due on such interest payment date, redemption date,
Repurchase Date and the Maturity Date, as the case may be, in a timely manner
which permits the Paying Agent to remit payment to the Holders on such interest
payment date, Maturity Date, redemption date and Repurchase Date, as the case
may be.
SECTION 2.15. Book-Entry Provisions for Global Securities.
-------------------------------------------
(a) The Global Securities initially shall (i) be registered in the
name of the Depositary or the nominee of such Depositary, (ii) be delivered to
the Trustee as custodian for such Depositary and (iii) bear the legend for
Global Securities as set forth in Exhibit B(II).
Members of, or participants in, the Depositary ("Participants") shall
have no rights under this Indenture with respect to any Global Security held on
their behalf by the Depositary, or the Trustee as its custodian, or under the
Global Securities, and the Depositary may be treated by the Company, the Trustee
and any agent of the Company or the Trustee as the absolute owner of the Global
Securities for all purposes whatsoever. Notwithstanding the foregoing, nothing
herein shall prevent the Company, the Trustee or any agent of the Company or the
Trustee from giving effect to any written certification, proxy or other
authorization furnished by the Depositary or impair, as be-
-11-
tween the Depositary and Participants, the operation of
customary practices governing the exercise of the rights of a Holder of any
Security.
(b) Transfers of Global Securities shall be limited to transfers in
whole, but not in part, to the Depositary, its successors or their respective
nominees. In addition, permanent certificated Securities in registered form,
substantially in the form set forth in Exhibit A (the "Physical Securities"),
shall be transferred to all beneficial owners in exchange for their beneficial
interests in Global Securities if (i) the Depositary notifies the Company that
it is unwilling or unable to continue as Depositary for any Global Security and
a successor Depositary is not appointed by the Company within 90 days of such
notice or (ii) an Event of Default has occurred and is continuing and the
Registrar has received a written request from the Depositary to issue Physical
Securities. Except as provided in this Section 2.15(b), owners of beneficial
interests in Global Securities will not be entitled to receive Physical
Securities.
(c) In connection with any issuance of Physical Securities upon the
transfer or exchange of a portion of the beneficial interest in the Global
Securities pursuant to paragraph (b) of this Section 2.15, the Registrar shall
(if one or more Physical Securities are to be issued) reflect on its books and
records the date and a decrease in the aggregate principal amount of such Global
Securities in an amount equal to the aggregate initial aggregate principal
amount of the beneficial interest in the Global Securities to be transferred,
and the Company shall execute and the Trustee shall authenticate and deliver one
or more Physical Securities of authorized denominations in an aggregate
principal amount equal to the aggregate principal amount of the beneficial
interest in the Global Securities so transferred.
(d) In connection with the transfer of the Global Securities in their
entirety to beneficial owners pursuant to paragraph (b) of this Section 2.15,
such Global Securities shall be deemed to be surrendered to the Trustee for
cancellation, and the Company shall execute, and the Trustee shall upon written
instructions from the Company authenticate and deliver, to each beneficial owner
identified by the Depositary in exchange for its beneficial interest in such
Global Securities, an equal aggregate principal amount of Physical Securities of
authorized denominations.
(e) Any Physical Security constituting a Restricted Security delivered
in exchange for an interest in the Global Securities pursuant to paragraph (b)
or (c) of this Section 2.15 shall, except as otherwise provided by Section 2.16,
bear the Private Placement Legend.
(f) The Holder of the Global Securities may grant proxies and
otherwise authorize any Person, including Participants and Persons that may hold
interests through Participants, to take any action which a Holder is entitled to
take under this Indenture or the Securities.
SECTION 2.16. Special Transfer Provisions.
---------------------------
(a) Transfers to Non-U.S. Persons. The following provisions shall
apply with respect to the registration of any proposed transfer of a Restricted
Security to any Non-U.S. Person:
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(i) the Registrar shall register the transfer of any Restricted
Security, whether or not such Security bears the Private Placement Legend, if
(x) the requested transfer is after the second anniversary of the Issue Date for
such Security; provided, however, that the transferor shall represent to the
Registrar that, to the transferor's knowledge, neither the Company nor any
Affiliate of the Company has held any beneficial interest in such Security, or
portion thereof, at any time on or prior to the second anniversary of the Issue
Date for such Security or (y) in the case of a transfer to a Non-U.S. Person,
the proposed transferee has delivered to the Registrar a certificate
substantially in the form of Exhibit C hereto;
(ii) if the proposed transferee is a Participant and the Securities to
be transferred consist of Physical Securities that after transfer are to be
evidenced by an interest in the Global Securities, upon receipt by the Registrar
of (x) written instructions given in accordance with the Depositary's and the
Registrar's procedures and (y) the appropriate certificate, if any, required by
clause (y) of paragraph (i) above, the Registrar shall register the transfer and
reflect on its books and records the date and an increase in the aggregate
principal amount of the Global Securities in an amount equal to the aggregate
principal amount of Physical Securities to be transferred, and the Trustee shall
cancel the Physical Securities so transferred; and
(iii) if the proposed transferor is a Participant seeking to transfer
an interest in the Rule 144A Global Security, upon receipt by the Registrar of
(x) written instructions given in accordance with the Depositary's and the
Registrar's procedures and (y) the appropriate certificate, if any, required by
clause (y) of paragraph (i) above, the Registrar shall register the transfer and
reflect on its books and records the date and (A) a decrease in the aggregate
principal amount of the Rule 144A Global Security in an amount equal to the
aggregate principal amount of the Securities to be transferred and (B) an
increase in the aggregate principal amount of the Regulation S Global Security,
in an amount equal to the aggregate principal amount of the Securities to be
transferred.
(b) Transfers to QIBs. The following provisions shall apply with
respect to the registration of any proposed transfer of a Restricted Security to
a QIB:
(i) the Registrar shall register the transfer of any Restricted
Security, whether or not such Security bears the Private Placement Legend, if
(x) the requested transfer is after the second anniversary of the Issue Date for
such Security; provided, however, that the transferor shall represent to the
Registrar that, to the transferor's knowledge, neither the Company nor any
Affiliate of the Company has held any beneficial interest in such Security, or
portion thereof, at any time on or prior to the second anniversary of the Issue
Date for such Security or (y) such transfer is being made by a proposed
transferor who has checked the box provided for on the form of Security stating,
or has otherwise advised the Company and the Registrar in writing, that the sale
has been made in compliance with the provisions of Rule 144A to a transferee who
has signed the certification provided for on the form of Security stating, or
has otherwise advised the Company and the Registrar in writing, that it is
purchasing the Security for its own account or an account with respect to which
it exercises sole investment discretion and that it and any such account is a
QIB within the meaning of Rule 144A, and is aware that
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the sale to it is being made in reliance on Rule 144A and acknowledges that
it has received such information regarding the Company as it has requested
pursuant to Rule 144A or has determined not to request such information and
that it is aware that the transferor is relying upon its foregoing
representations in order to claim the exemption from registration provided
by Rule 144A;
(ii) if the proposed transferee is a Participant and the Securities to
be transferred consist of Physical Securities which after transfer are to
be evidenced by an interest in the Global Securities, upon receipt by the
Registrar of written instructions given in accordance with the Depositary's
and Registrar's procedures, the Registrar shall register the transfer and
reflect on its books and records the date and an increase in the principal
amount of the Global Securities in an amount equal to the principal amount
of Physical Securities to be transferred, and the Trustee shall cancel the
Physical Security so transferred; and
(iii) if the proposed transferor is a Participant seeking to transfer
an interest in the Regulation S Global Security upon receipt by the
Registrar of written instructions given in accordance with the Depositary's
and the Registrar's procedures, the Registrar shall register the transfer
and reflect on its books and records the date and (A) a decrease in the
aggregate principal amount of the Regulation S Global Security in an amount
equal to the aggregate principal amount of the Securities to be transferred
and (B) an increase in the aggregate principal amount of the Rule 144A
Global Security in an amount equal to the aggregate principal amount of the
Securities to be transferred.
(c) Restrictions on Transfer and Exchange of Global Securities.
Notwithstanding any other provisions of this Indenture, the Global Securities
may not be transferred as a whole except by the Depositary to a nominee of the
Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary.
(d) Private Placement Legend. Upon the registration of transfer,
exchange or replacement of Securities not bearing the Private Placement Legend,
the Registrar or co-Registrar shall deliver Securities that do not bear the
Private Placement Legend. Upon the registration of transfer, exchange or
replacement of Securities bearing the Private Placement Legend, the Registrar or
co-Registrar shall deliver only Securities that bear the Private Placement
Legend unless (i) the requested transfer is after the second anniversary of the
Issue Date for such Security (provided, however, that neither the Company nor
any Affiliate of the Company has held any beneficial interest in such Security,
or portion thereof, at any time prior to or on the second anniversary of the
Issue Date for such Security), (ii) there is delivered to the Trustee an Opinion
of Counsel reasonably satisfactory to the Company to the effect that neither
such legend nor the related restrictions on transfer are required in order to
maintain compliance with the provisions of the Securities Act or (iii) such
Security has been sold pursuant to an effective registration statement under the
Securities Act and the Holder selling such Securities has delivered to the
Registrar or co-Registrar a notice in substantially the form of Exhibit D
hereto. Upon the effectiveness of the Shelf Registration Statement (as defined
in the Registration Rights Agreement) the Company shall deliver to the Trustee a
notice of effectiveness, a Security or Securities, an authentication order in
accordance with Section 2.02 and an Opinion of Counsel in
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substantially the form of Exhibit E hereto and, if required by the Depositary,
the Company shall deliver to the Depositary a letter of representations in a
form reasonably acceptable to the Depositary.
(e) General. By its acceptance of any Security bearing the Private
Placement Legend, each Holder of such a Security acknowledges the restrictions
on transfer of such Security set forth in this Indenture and in the Private
Placement Legend and agrees that it will transfer such Security only as provided
in this Indenture.
The Registrar shall retain, in accordance with its customary
procedures, copies of all letters, notices and other written communications
received pursuant to Section 2.15 or this Section 2.16. The Company shall have
the right to inspect and make copies of all such letters, notices or other
written communications at any reasonable time upon the giving of reasonable
notice to the Registrar.
(f) Transfers of Securities Held by Affiliates. Any certificate (i)
evidencing a Security that has been transferred to an Affiliate of the Company
within two years after the Issue Date for such Security, as evidenced by a
notation on the Assignment Form for such transfer or in the representation
letter delivered in respect thereof or (ii) evidencing a Security that has been
acquired from an Affiliate (other than by an Affiliate) in a transaction or a
chain of transactions not involving any public offering, shall, until two years
after the last date on which either the Company or any Affiliate of the Company
was an owner of such Security, in each case, bear the Private Placement Legend,
unless otherwise agreed by the Company (with written notice thereof to the
Trustee).
SECTION 2.17. Restrictive Legends.
-------------------
Each Global Security and Physical Security that constitutes a
Restricted Security shall bear the private placement legend (the "Private
Placement Legend") as set forth in Exhibit B(I) on the face thereof until after
the second anniversary of the later of the Issue Date for such Securities and
the last date on which the Company or any Affiliate of the Company was the owner
of such Security (or any predecessor security) (or such shorter period of time
as permitted by Rule 144(k) under the Securities Act or any successor provision
thereunder) (or such longer period of time as may be required under the
Securities Act or applicable state securities laws in the opinion of counsel for
the Company, unless otherwise agreed by the Company and the Holder thereof).
ARTICLE THREE
REDEMPTION; REPURCHASE
SECTION 3.01. Notices to Trustee.
------------------
If the Company wants to redeem Securities pursuant to paragraph 6 of
the Securities, it shall notify the Trustee at least 40 days prior to the
redemption date (unless a shorter notice period shall be satisfactory to the
Trustee) of the redemption date and the aggregate principal amount of Securities
to be redeemed. If the Company wants to credit against any such redemption
Securities it has
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not previously delivered to the Trustee for cancellation (other than Securities
repurchased pursuant to Section 3.07), it shall deliver the Securities with the
notice.
SECTION 3.02. Selection of Securities to Be Redeemed.
--------------------------------------
If less than all the outstanding Securities are to be redeemed, the
Trustee shall select the Securities to be redeemed on either a pro rata basis or
by lot or such other method as the Trustee shall deem fair and appropriate. The
Trustee shall make the selection from Securities outstanding not previously
called for redemption. The Trustee may select for redemption portions of the
principal of Securities that have denominations larger than $1,000 principal
amount. Securities and portions of them it selects shall be in amounts of $1,000
principal amount or integral multiples of $1,000 principal amount. Provisions of
this Indenture that apply to Securities called for redemption also apply to
portions of Securities called for redemption.
The Registrar need not register the transfer of or exchange any
Securities selected for redemption. Also, the Registrar need not transfer or
exchange any Securities for a period of 10 Business Days before selecting
Securities to be redeemed.
SECTION 3.03. Notice of Redemption.
--------------------
At least 20 days but not more than 60 days before a redemption date,
the Company shall mail by first-class mail or cause to be mailed a notice of
redemption to each Holder whose Securities are to be redeemed.
The notice shall identify the Securities and the aggregate principal
amount thereof to be redeemed and shall state:
(1) the redemption date;
(2) the redemption price, plus the amount of accrued and unpaid
interest to be paid on the Securities called for redemption;
(3) the then current conversion rate;
(4) the name and address of the Paying Agent and Conversion Agent;
(5) the date on which the right to convert the principal of the
Securities called for redemption will terminate and the place or places where
such Securities may be surrendered for conversion;
(6) that Holders who want to convert Securities must satisfy the
requirements in Article Ten;
(7) that Securities called for redemption must be surrendered to the
Paying Agent to collect the redemption price;
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(8) that interest on Securities called for redemption ceases to
accrue on and after the redemption date; and
(9) the CUSIP number of the Securities.
The date on which the right to convert the principal of the Securities
called for redemption will terminate shall be at the close of business on the
date prior to the redemption date, or, if the day before the redemption date is
a Legal Holiday, the close of business on the next preceding day which is not a
Legal Holiday.
At the Company's request (which request shall be furnished to the
Trustee at least 40 days prior to the redemption date (unless a shorter period
shall be acceptable to the Trustee)), the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense; provided that the
form and content of such notice shall be prepared by the Company.
SECTION 3.04. Effect of Notice of Redemption.
------------------------------
Once notice of redemption is mailed, Securities called for redemption
become due and payable on the redemption date at the applicable redemption price
plus accrued and unpaid interest to, but excluding, the date of redemption, and,
on and after such date (unless the Company shall default in the payment of the
redemption price), such Securities shall cease to bear interest. Upon surrender
to the Paying Agent, such Securities shall be paid at the redemption price plus
accrued interest to the redemption date, unless the redemption date is an
interest payment date, in which case the accrued interest will be paid as
provided in the Securities.
SECTION 3.05. Deposit of Redemption Price.
---------------------------
On or before the redemption date, the Company shall deposit with the
Paying Agent pursuant to Section 2.14 money in funds immediately available on
the redemption date sufficient to pay the redemption price of and accrued
interest on all Securities to be redeemed on that date. The Paying Agent shall
return to the Company, as soon as practicable, any money not required for that
purpose because of conversion of Securities.
SECTION 3.06. Securities Redeemed in Part.
---------------------------
Upon surrender of a Security that is redeemed in part, the Company
shall execute and the Trustee shall authenticate for the Holder a new Security
equal in principal amount to the unredeemed portion of the Security surrendered.
If a portion of a Holder's Securities is selected for partial
redemption and that Holder converts a portion of that Holder's Securities, the
converted portion shall be deemed (as far as may be) to be the portion selected
for redemption.
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SECTION 3.07. Repurchase at Option of Holder upon a Repurchase
Event.
------------------------------------------------
(a) If there shall occur a Repurchase Event, then each Holder shall
have the right, at such Holder's option, to require the Company to repurchase
all of such Holder's Securities, or any portion thereof (in principal amounts of
$1,000 or integral multiples thereof), on the date (the "Repurchase Date") that
is forty-five (45) Business Days after the date of the Company Notice (as
defined below). Such repurchase shall be made in cash at a price equal to 100%
of the principal amount of Securities such Holder elects to require the Company
to repurchase, together with accrued interest, if any, to but excluding the
Repurchase Date (the "Repurchase Price") (or, at the option of the Company, by
delivery of Common Stock in accordance with the provisions of Section 3.07(k));
provided, however, that if such Repurchase Date is an interest payment date,
then the interest payable on such date shall be paid to the holder of record of
the Security on the preceding record date for the payment of interest. No
Securities may be repurchased at the option of Holders upon a Repurchase Event
if there has occurred and is continuing an Event of Default, other than a
default in the payment of the Repurchase Price with respect to such Securities
on the Repurchase Date.
(b) Unless the Company shall have theretofore called for redemption
all of the outstanding Securities, on or before the tenth (10th) Business Day
after the Company becomes aware of the occurrence of a Repurchase Event, the
Company or, at the written request of the Company, the Trustee, shall mail to
all holders of record of the Securities a notice (the "Company Notice") in the
form prepared by the Company of the occurrence of the Repurchase Event and of
the repurchase right set forth herein arising as a result thereof. The Company
shall also deliver a copy of such Company Notice to the Trustee. The Company
Notice shall contain the following information:
(1) the Repurchase Date;
(2) the date by which the repurchase right must be exercised;
(3) the last date by which the election to require repurchase, if
submitted, must be revoked;
(4) the Repurchase Price and whether the Repurchase Price shall be
payable in cash or Common Stock and, if payable in Common Stock, the method of
calculating the amount of the Common Stock to be delivered upon the repurchase
as provided in Section 3.07(k);
(5) a description of the procedure that a Holder must follow to
exercise a repurchase right;
(6) the Conversion Price then in effect and a statement that the
right to convert the principal amount of the Securities to be repurchased will
terminate when and if the Holder exercises its repurchase right unless and until
it withdraws such election; and
(7) the CUSIP numbers of the Securities.
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No failure of the Company to give the foregoing notices or defect
therein shall limit any Holder's right to exercise a repurchase right or affect
the validity of the proceedings for the repurchase of Securities.
If any of the foregoing provisions are inconsistent with applicable
law, such law shall govern.
(c) To exercise a repurchase right, a Holder shall deliver to the
Trustee on or before the 30th Business Day after the date of the Company Notice
preceding the Repurchase Date (i) written notice to the Company (or agent
designated by the Company for such purpose) of the Holder's exercise of such
right, which notice shall set forth the name of the Holder, the principal amount
of the Securities to be repurchased, a statement that an election to exercise
the repurchase right is being made thereby and, in the event that the Repurchase
Price shall be paid in shares of Common Stock, the name or names (with
addresses) in which the certificate or certificates for shares of Common Stock
shall be issued, and (ii) the Securities with respect to which the repurchase
right is being exercised, duly endorsed for transfer to the Company. Election of
repurchase by a Holder shall be revocable at any time prior to, but excluding,
the Repurchase Date, by delivering written notice to that effect to the Trustee
prior to the close of business on the Business Day prior to the Repurchase Date.
(d) If the Company fails to repurchase on the Repurchase Date any
Securities (or portions thereof) as to which the repurchase right has been
properly exercised, then the principal of such Securities shall, until paid,
bear interest to the extent permitted by applicable law from the Repurchase Date
at the rate borne by the Securities and each such Security shall be convertible
into Common Stock in accordance with this Indenture until the principal of such
Security shall have been paid or duly provided for.
(e) Any Security that is to be repurchased only in part shall be
surrendered to the Trustee duly endorsed for transfer to the Company and
accompanied by appropriate evidence of genuineness and authority satisfactory to
the Company and the Trustee duly executed by the Holder thereof (or his attorney
duly authorized in writing), and the Company shall execute, and the Trustee
shall authenticate and deliver to the Holder of such Security without service
charge, a new Security or Securities, containing identical terms and conditions,
of any authorized denomination as requested by such Holder in aggregate
principal amount equal to and in exchange for the unrepurchased portion of the
principal of the Security so surrendered.
(f) On or prior to the Repurchase Date, the Company shall deposit with
the Trustee or with a Paying Agent, pursuant to Section 2.14, the Repurchase
Price in cash for payment to the Holder on the Repurchase Date; provided that if
payment is to be made in cash and such cash payment is made on the Repurchase
Date it must be received by the Trustee or paying agent, as the case may be, by
10:00 a.m., New York City time, on such date; provided, further, that if the
Repurchase Price is to be paid in shares of Common Stock, such shares of Common
Stock are to be paid as promptly after the Repurchase Date as practicable.
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(g) Any issuance of shares of Common Stock in respect of the
Repurchase Price shall be deemed to have been effected immediately prior to the
close of business on the Repurchase Date and the Person or Persons in whose name
or names any certificate or certificates for shares of Common Stock shall be
issuable upon such repurchase shall be deemed to have become on the Repurchase
Date the holder or holders of record of the shares represented thereby;
provided, however, that any surrender for repurchase on a date when the stock
transfer books of the Company shall be closed shall constitute the Person or
Persons in whose name or names the certificate or certificates for such shares
are to be issued as the record holder or holders thereof for all purposes at the
opening of business on the next succeeding day on which such stock transfer
books are open. No payment or adjustment shall be made for dividends or
distributions on any Common Stock issued upon repurchase of any Security
declared prior to the Repurchase Date.
(h) No fractions of shares shall be issued upon repurchase of
Securities. If more than one Security shall be repurchased from the same Holder
and the Repurchase Price shall be payable in shares of Common Stock, the number
of full shares which shall be issuable upon such repurchase shall be computed on
the basis of the aggregate principal amount of the Securities so repurchased.
Instead of any fractional share of Common Stock otherwise issuable on the
repurchase of any Security or Securities, the Company will deliver to the
applicable Holder its check for the current market value of such fractional
share. The current market value of a fraction of a share is determined by
multiplying the current market price of a full share by the fraction, and
rounding the result to the nearest cent. For purposes of this Section, the
current market price of a share of Common Stock is the Closing Price of the
Common Stock on the Trading Day immediately preceding the Repurchase Date.
(i) Any issuance and delivery of certificates for shares of Common
Stock on repurchase of Securities shall be made without charge to the Holder of
Securities being repurchased for such certificates or for any tax or duty in
respect of the issuance or delivery of such certificates or the securities
represented thereby; provided, however, that the Company shall not be required
to pay any tax or duty which may be payable in respect of (i) income of the
Holder or (ii) any transfer involved in the issuance or delivery of certificates
for shares of Common Stock in a name other than that of the Holder of the
Securities being repurchased, and no such issuance or delivery shall be made
unless and until the Person requesting such issuance or delivery has paid to the
Company the amount of any such tax or duty or has established, to the
satisfaction of the Company, that such tax or duty has been paid.
(j) All Securities delivered for repurchase shall be delivered to the
Trustee to be canceled in accordance with the provisions of Section 2.11.
(k) The Company may elect to pay the Repurchase Price by delivery of
shares of Common Stock if and only if the following conditions shall have been
satisfied on or prior to the Repurchase Date:
(i) the shares of Common Stock deliverable in payment of the
Repurchase Price shall have a fair market value as of the Repurchase Date
of not less than the Repurchase Price. For purposes of this Section 3.07,
the fair market value of shares of Common Stock shall be determined by the
Company and shall be equal to 95% of the average of the Closing
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Prices of the Common Stock for the five consecutive Trading Days
immediately preceding and including the third Trading Day prior to the
Repurchase Date;
(ii) such shares have been registered under the Securities Act or are
freely transferable without such registration;
(iii) the issuance of such Common Stock does not require registration
with or approval of any governmental authority under any state law or any
other federal law, which registration or approval has not been made or
obtained;
(iv) such shares have been approved for quotation on the Nasdaq
National Market or listing on a national securities exchange; and
(v) such shares will be issued out of the Company's authorized but
unissued stock and, upon issuance, will be duly and validly and fully paid
and non-assessable and free of any preemptive rights.
(l) For purposes of this Section 3.07:
(i) the term "beneficial owner" shall be determined in accordance with
Rule 13d-3 and 13d-5, as in effect on the date of the original execution of
this Indenture, promulgated by the SEC pursuant to the Exchange Act;
(ii) the term "Person" or "group" shall include any syndicate or group
which would be deemed to be a "person" under Section 11(d) and 14(d) of the
Exchange Act as in effect on the date of this Indenture;
(iii) the term "Repurchase Event" means a Change in Control defined as
follows:
A "Change in Control" shall be deemed to have occurred when (i)
any "person" or "group" is or becomes the "beneficial owner" of shares
representing more than 50% of the combined voting power of the then
outstanding securities entitled to vote generally in elections of
directors of the Company (the "Voting Stock"); (ii) there shall occur
the liquidation or dissolution or adoption of a plan of liquidation or
dissolution of the Company other than in a transaction which complies
with Section 5.01; (iii) the Company consolidates with or merges into
any other Person or any other Person merges into the Company and, as a
result, the outstanding Common Stock of the Company is changed or
exchanged into or for other assets or securities, unless the
shareholders of the Company immediately before such transac-
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tion own, directly or indirectly, immediately following such
transaction, more than 50% of the combined voting power of the
outstanding Voting Stock of the Person resulting from such transaction
or the transferee Person or unless such transaction is effected solely
to change the Company's jurisdiction of incorporation; or (iv) the
Company conveys, transfers or leases all or substantially all of its
assets to any Person other than its subsidiaries, unless the
shareholders of the Company immediately before such transaction own,
directly or indirectly, immediately following such transaction, more
than 50% of the combined voting power of the outstanding Voting Stock
of the Person resulting from such transaction or the transferee
Person; provided that a Change in Control shall not be deemed to have
occurred if either (x) the Closing Price of the Common Stock for any
five (5) Trading Days (1) in the case of a Change in Control described
in clause (i) above, during the ten (10) consecutive Trading Days
immediately after the later of the Change in Control or the public
announcement of the Change in Control or (2) in the case of a Change
of Control described in clause (ii) or (iii) above, during the ten
(10) Trading Days immediately preceding the Change in Control, in each
such case, is at least equal to 105% of the Conversion Price in effect
on the date on which the Change in Control occurs or (y) in the case
of a merger or consolidation otherwise constituting a Change in
Control, at least 90% of the consideration (excluding cash payments
for fractional shares) in such merger or consolidation constituting
the Change in Control consists of common stock traded on a United
States national securities exchange or quoted on the Nasdaq National
Market (or which will be so traded or quoted when issued or exchanged
in connection with such Change in Control) and as a result of such
transaction or transactions the Securities become convertible solely
into such common stock (and cash in lieu of fractional shares).
ARTICLE FOUR
COVENANTS
SECTION 4.01. Payment of Securities.
---------------------
The Company shall pay the principal amount, premium, if any, of and any
accrued and unpaid interest on the Securities on the dates and in the manner
provided in the Securities. The principal, premium, if any, and any accrued and
unpaid interest thereon shall be considered paid on the date due if the Paying
Agent holds (or, if the Company is acting as Paying Agent, if the Company has
segregated and holds in trust in accordance with Section 2.04) on that date
money sufficient to pay the principal, premium, if any, and any accrued and
unpaid interest thereon.
The Company shall pay interest on any overdue principal at the rate borne
by the Securities. The Company shall pay interest on overdue installments of
interest at the same rate to the extent not prohibited by applicable law.
SECTION 4.02. Maintenance of Office or Agency.
-------------------------------
The Company will maintain in the Borough of Manhattan, The City of New
York, an office or agency where Securities may be surrendered for registration
of transfer or exchange or conversion and where notices and demands to or upon
the Company in respect of the Securities and this Indenture may be served. The
Company will give prompt written notice to the Trustee of the location,
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and any change in the location, of 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.
The Company may also from time to time designate one or more other
offices or agencies where the Securities may be presented or surrendered for any
or all such purposes and may from time to time rescind such 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 the
Borough of Manhattan, The City of 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.
The Company hereby designates the Corporate Trust Office of the
Trustee as an agency of the Company in accordance with Section 2.03.
The Company also shall comply with the provisions of TIA ss. 314(a).
SECTION 4.03. Reports to Holders.
------------------
(a) The Company (at its own expense) will deliver to the Trustee
within 15 days after the filing of the same with the SEC, copies of the
quarterly and annual reports and of the information, documents and other
reports, if any, the Company is required to file with the SEC pursuant to
Section 13 or 15(d) of the Exchange Act.
(b) Notwithstanding that the Company may not be subject to the
reporting requirements of Section 13 or 15(d) of the Exchange Act, the Company
will promptly provide the information required by Rule 144A(d)(4) to any Holder
that so requests.
(c) In addition, if and when this Indenture becomes subject to the
TIA, the Company will file a copy of all such information with the SEC for
public availability (unless the Commission will not accept such a filing) and
make such information available to investors who request it in writing. The
Company will also comply with the other provisions of TIA ss. 314(a).
Delivery of such reports, information and documents to the Trustee is
for informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
SECTION 4.04. Compliance Certificate.
----------------------
The Company shall deliver to the Trustee within 120 days after the end
of each fiscal year of the Company an Officers' Certificate stating whether or
not the signers know of any Default or Event of Default by the Company in
performing any of its obligations under this Indenture or the
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Securities. If they do know of any such Default or Event of Default, the
certificate shall describe the Default or Event of Default and its status.
SECTION 4.05. Stay, Extension and Usury Laws.
------------------------------
The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay, extension or usury law wherever
enacted, now or at any time hereafter 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 or advantage of any such
law, and covenants that it will not, by resort to any such law, hinder, delay or
impede the execution of any power herein granted to the Trustee, but will suffer
and permit the execution of every such power as though no such law has been
enacted.
SECTION 4.06. Corporate Existence.
-------------------
Subject to Article Five, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect its corporate
existence and the corporate existence of each subsidiary in accordance with the
respective organizational documents of each subsidiary and the rights (charter
and statutory), licenses and franchises of the Company and its subsidiaries;
provided, however, that the Company shall not be required to preserve any such
right, license or franchise, or the corporate existence of any subsidiary, if in
the judgment of the Company, (i) such preservation or existence is not material
to the conduct of business of the Company and (ii) the loss of such right,
license or franchise or the dissolution of such subsidiary does not have a
material adverse impact on the Holders.
SECTION 4.07. Notice of Default.
-----------------
In the event that any Default under Section 6.01 hereof shall occur
the Company will give prompt written notice of such Default to the Trustee.
ARTICLE FIVE
CONSOLIDATION, MERGER AND SALE OF ASSETS
SECTION 5.01. When Company May Merge, etc.
---------------------------
The Company shall not consolidate with or merge into, or transfer or
lease all or substantially all of its assets to, another Person unless such
other Person is a corporation, limited liability company, partnership, trust or
other business entity organized under the laws of the United States, any State
thereof or the District of Columbia and such Person assumes by supplemental
indenture all the obligations of the Company under the Securities, this
Indenture and the Registration Rights Agreement, and immediately after giving
effect to the transaction, no Default or Event of Default has occurred and is
continuing.
-24-
The Company shall deliver to the Trustee prior to the consummation of
the proposed transaction an Officers' Certificate to the foregoing effect and an
Opinion of Counsel stating that the proposed transaction and such supplemental
indenture will, upon consummation of the proposed transaction, comply with this
Indenture.
SECTION 5.02. Successor Substituted.
---------------------
Upon any consolidation or merger or transfer or lease of all or
substantially all of the assets of the Company in accordance with Section 5.01,
the successor Person formed by such consolidation or into which the Company is
merged or to which such transfer or lease is made shall succeed to, and be
substituted for, and may exercise every right and power of, and shall assume
every duty and obligation of, the Company under this Indenture with the same
effect as if such successor corporation had been named as the Company herein.
When the successor corporation assumes all obligations of the Company hereunder,
all obligations of the predecessor corporation shall terminate.
ARTICLE SIX
DEFAULTS AND REMEDIES
SECTION 6.01. Events of Default.
-----------------
An "Event of Default" occurs if:
(1) the Company fails to pay the principal of or any premium on the
Securities when due;
(2) the Company fails to pay any interest on the Securities when due,
if such failure continues for 30 days;
(3) the Company fails to perform any other covenant in this Indenture
for the period after the notice specified in the last paragraph of this
Section 6.01;
(4) any indebtedness under any bonds, debentures, notes or other
evidences of indebtedness for money borrowed, or any guarantee thereof, by
the Company or any of its Significant Subsidiaries, in an aggregate
principal amount in excess of $50 million is not paid when due either at
its stated maturity or upon acceleration thereof, and such indebtedness is
not discharged, or such acceleration is not rescinded or annulled within a
period of 30 days after notice as provided below; or
(5) the Company pursuant to or within the meaning of any Bankruptcy
Law:
(A) commences a voluntary case,
-25-
(B) consents to the entry of an order for relief against it in an
involuntary case,
(C) consents to the appointment of a Custodian of it or for all
or substantially all of its property, or
(D) makes a general assignment for the benefit of its creditors;
or
(6) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(A) is for relief against the Company in an involuntary case,
(B) appoints a Custodian of the Company for all or substantially
all of its property, or
(C) orders the liquidation of the Company,
and the order or decree remains unstayed and in effect for 90 consecutive
days.
The term "Bankruptcy Law" means Title 11, U.S. Code or any similar
Federal or State law for the relief of debtors. The term "Custodian" means any
receiver trustee, assignee, liquidator or similar official under any Bankruptcy
Law.
A default under clause (3) and clause (4) is not an Event of Default
until the Holders of at least 25% in aggregate principal amount of the
Securities then outstanding notify the Company and the Trustee of the default
and, in the case of clause (3), the Company does not cure the default within 90
days after receipt of the notice of such default. The notice must specify the
default, demand that it be remedied and state that the notice is a "Notice of
Default." If the Holders of 25% in aggregate principal amount of the outstanding
Securities request the Trustee to give such notice on their behalf, the Trustee
shall do so. When a default is cured, it ceases.
SECTION 6.02. Acceleration.
------------
If an Event of Default (other than an Event of Default specified in
Section 6.01(5) or (6)) occurs and is continuing, the Trustee by notice to the
Company, or the Holders of at least 25% in principal amount of the Securities
then outstanding by notice to the Company and the Trustee, may declare the
principal amount of the Securities including any accrued and unpaid interest on
the Securities due and payable. If an Event of Default under clause Section
6.01(5) or (6) occurs, the principal amount of all the Securities will
automatically become due and payable without any declaration or other act on the
part of the Trustee or any Holder.
After a declaration of acceleration, but before a judgment or decree
of the money due in respect of the Securities has been obtained, the Holders of
not less than a majority in aggregate principal amount of the Securities then
outstanding by written notice to the Trustee may rescind an acceleration and its
consequences if (i) all existing Events of Default (other than the nonpayment of
-26-
principal of and interest on the Securities which has become due solely by
virtue of such acceleration) have been cured or waived, (ii) the rescission
would not conflict with any judgment or decree and (iii) the Company shall have
paid all amounts due pursuant to Section 7.07.
SECTION 6.03. Other Remedies.
--------------
Notwithstanding any other provision of this Indenture, if an Event of
Default occurs and is continuing, the Trustee may pursue any available remedy by
proceeding at law or in equity to collect the payment of the principal of,
premium, if any, and interest on the Securities or to enforce the performance of
any provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Securities or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder in exercising any right or remedy accruing
upon an Event of Default shall not impair the right or remedy or constitute a
waiver of or acquiescence in the Event of Default. All remedies are cumulative.
SECTION 6.04. Waiver of Past Defaults.
-----------------------
Subject to Sections 6.02, 6.07 and 9.02, the Holders of a majority in
aggregate principal amount of the Securities then outstanding by notice to the
Trustee may waive any past Default or Event of Default and its consequences,
except a Default or Event of Default in the payment of the principal of or
interest on any Security, a failure by the Company to convert any Securities
into Common Stock or any Default or Event of Default in respect of any provision
of this Indenture or the Securities that, under Section 9.02, cannot be modified
or amended without the consent of the Holder of each Security directly affected.
When a Default or an Event of Default is waived, it is cured and ceases.
SECTION 6.05. Control by Majority.
-------------------
The Holders of a majority in aggregate principal amount of the
Securities then outstanding may direct the time, method and place of conducting
any proceeding for any remedy available to the Trustee or exercising any trust
or power conferred on it. However, the Trustee may refuse to follow any
direction that conflicts with law or this Indenture, is unduly prejudicial to
the rights of other Holders or would involve the Trustee in personal liability;
provided that the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction.
SECTION 6.06. Limitation on Suits.
-------------------
Except as provided in Section 6.07, a Holder may pursue a remedy with
respect to this Indenture or the Securities only if:
(1) the Holder gives to the Trustee written notice of a continuing
Event of Default;
-27-
(2) the Holders of at least 25% in aggregate principal amount of the
Securities then outstanding make a written request to the Trustee to pursue
the remedy;
(3) such Holder or Holders offer to the Trustee indemnity satisfactory
to the Trustee against any loss, liability or expense;
(4) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer of indemnity; and
(5) during such 60-day period the Holders of a majority in aggregate
principal amount of the Securities then outstanding do not give the Trustee
a direction inconsistent with the request.
A Holder may not use this Indenture to prejudice the rights of another
Holder or to obtain a preference or priority over another Holder.
SECTION 6.07. Rights of Holders to Receive Payment or Convert.
-----------------------------------------------
Notwithstanding any other provision of this Indenture, (i) the right
of any Holder to receive payment of the principal of and interest on the
Security, on or after the respective due dates expressed in the Security, or to
bring suit for the enforcement of any such payment on or after such respective
dates, shall not be impaired or affected without the consent of the Holder and
(ii) the right of any Holder to bring suit for the enforcement of the right to
convert the Security shall not be impaired or affected without the consent of
the Holder.
SECTION 6.08. Collection Suit by Trustee.
--------------------------
If an Event of Default specified in Section 6.01(l) or (2) occurs and
is continuing, the Trustee may recover judgment in its own name and as trustee
of an express trust against the Company for the whole amount of principal and
interest remaining unpaid and amounts due to the Trustee under Section 7.07.
SECTION 6.09. Trustee May File Proofs of Claim.
--------------------------------
The Trustee may file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee, any predecessor Trustee and the Holders allowed in any judicial
proceedings relative to the Company, its creditors or its property.
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 Securities
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.
-28-
SECTION 6.10. Priorities.
----------
If the Trustee collects any money pursuant to this Article, it shall
pay out the money in the following order:
First: to the Trustee for amounts due under Section 7.07;
Second: to Holders for amounts due and unpaid on the Securities for
principal, premium, if any, and interest, ratably, without preference or
priority of any kind, according to the amounts due and payable on the Securities
for principal, premium, if any, and interest, respectively, and
Third: to the Company.
The Trustee, upon prior written notice to the Company, may fix a
record date and payment date for any payment by it to Holders pursuant to this
Section 6.10.
SECTION 6.11. Undertaking for Costs.
---------------------
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as Trustee, a court in its discretion may require the filing by any party
litigant in the suit other than the Trustee of an undertaking to pay the costs
of the suit, and the court in its discretion may assess reasonable costs,
including reasonable attorneys' fees and expenses, against any party litigant in
the suit, having due regard to the merits and good faith of the claims or
defenses made by the party litigant. This Section 6.11 shall not apply to a suit
by the Trustee, a suit by a Holder or group of Holders of more than 10% in
aggregate principal amount of the outstanding Securities, or to any suit
instituted by any Holder for the enforcement or the payment of the principal or
interest on any Securities on or after the respective due dates for such
Securities.
ARTICLE SEVEN
TRUSTEE
SECTION 7.01. Duties of Trustee.
-----------------
(a) If 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 person
would exercise or use under the circumstances in the conduct of his or her own
affairs.
(b) Prior to the occurrence of an Event of Default:
-29-
(1) the Trustee need perform only those duties that are specifically
set forth in this Indenture and no others shall be inferred or implied; 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
examine the certificates and opin ions to determine whether or not they
conform to the requirements of this Indenture (but need not confirm or
investigate the accuracy of any mathematical calculations or other facts
stated therein).
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(1) this paragraph does not limit the effect of paragraph (b) of this
Section 7.01;
(2) the Trustee shall not be liable for any error of judgment made in
good faith by a Trust Officer, unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05.
(d) The Trustee may refuse to perform any duty or exercise any right
or power unless it receives indemnity satisfactory to it against any loss,
liability or expense.
(e) The Trustee shall not be liable for interest on any money received
by it except as the Trustee may agree from time to time in writing with the
Company. The Trustee may pay interest to the Company on amounts held by it prior
to payment to Holders. Money held in trust by the Trustee need not be segregated
from other funds except to the extent required by law.
SECTION 7.02. Rights of Trustee.
-----------------
(a) The Trustee may conclusively rely on any document believed by it
to be genuine and to have been signed or presented by the proper person. The
Trustee need not investigate any fact or matter stated in the document; if,
however, the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and premises
of the Company, personally or by agent or attorney at the expense of the Company
and shall incur no liability or additional liability of any kind by reason of
such inquiry or investigation.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate and/or an Opinion of Counsel. The Trustee shall not be
liable for any action it takes or omits to take in good faith in reliance on
such Officers' Certificate or Opinion of Counsel.
-30-
(c) 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 shall be sufficiently evidenced by a Board Resolution.
(d) The Trustee may consult with counsel of its own selection and the
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 may act through agents or attorneys and shall not be
responsible for the misconduct or negligence of any agent or attorney appointed
with due care.
(f) The Trustee shall not be liable for any action it takes or omits
to take in good faith which it believes to be authorized or within its
discretion, rights or powers hereunder.
(g) 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 may, in absence of bad
faith on its part, rely upon an Officers' Certificate.
(h) 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, unless such Holders shall have offered to the Trustee
reasonable security or indemnity satisfactory to it against costs, expenses and
liabilities that might be incurred by it in compliance with such request or
direction.
(i) The Trustee shall not be charged with knowledge of any Default or
Event of Default with respect to the Securities unless either (1) a Trust
Officer shall have actual knowledge of such Default or Event of Default or (2)
written notice of such Default or Event of Default shall have been given to the
Trustee by the Company or by any Holder.
(j) 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.
(k) The rights, privileges, protections, immunities and benefits given
to the Trustee, including, without limitation, its right to be indemnified, are
extended to, and shall be enforceable by, the Trustee in each of its capacities
hereunder, and each agent, custodian and other Person employed to act hereunder.
SECTION 7.03. Individual Rights of Trustee.
----------------------------
The Trustee in its individual or any other capacity may become the
owner or pledgee of Securities and may otherwise deal with the Company or an
Affiliate thereof with the same rights it would have if it were not Trustee. Any
Agent may do the same with like rights. The Trustee, however, must comply with
Sections 7.10 and 7.11.
-31-
SECTION 7.04. Trustee's Disclaimer.
--------------------
The Trustee makes no representation as to the validity or adequacy of
this Indenture or the Securities; it shall not be accountable for the Company's
use of the proceeds from the Securities; and it shall not be responsible for any
statement in the Securities other than its certificate of authentication.
SECTION 7.05. Notice of Defaults.
------------------
If a Default or Event of Default occurs and is continuing and if it is
actually known to a Trust Officer of the Trustee, the Trustee shall mail to each
Holder a notice of the Default or Event of Default within 60 days after it
occurs unless such Default or Event of Default has been cured or waived;
provided that except in the case of a Default or Event of Default in payment of
the principal of, premium, if any, and interest on any Security, the Trustee may
withhold the notice if and so long as it in good faith determines that
withholding the notice is in the interests of Holders.
SECTION 7.06. Reports by Trustee to Holders.
-----------------------------
Within 60 days after each May 1 beginning with May 1, 2003, the
Trustee shall mail to each Holder, to the extent required by TIA ss. 313(c), a
brief report dated as of such reporting date that complies with TIA ss. 313(a).
In such event, the Trustee also shall comply with TIA ss. 313(b).
A copy of each report at the time of its mailing to Holders shall be
mailed to the Company and filed by the Trustee with the SEC and each stock
exchange, if any, on which the Securities are listed. The Company shall promptly
notify the Trustee when the Securities are listed on any stock exchange or
delisted therefrom.
SECTION 7.07. Compensation and Indemnity.
--------------------------
The Company shall pay to the Trustee from time to time such
compensation for its services as shall be agreed upon in writing from time to
time. The Trustee's compensation shall not be limited by any law on compensation
of a trustee of an express trust. The Company shall reimburse the Trustee upon
request for all reasonable out-of-pocket expenses incurred by it. Such expenses
shall include the reasonable compensation and out-of-pocket expenses of the
Trustee's agents and counsel.
The Company shall fully indemnify the Trustee against any and all
loss, claim, damage or liability or expense (including the reasonable fees and
expenses of counsel) incurred by it in connection with the acceptance or
administration of this trust and the performance of its duties hereunder,
including the costs and expenses of defending itself against any claim or
liability in connection with the exercise or performance of any of its powers
and duties hereunder. The Company need not pay for any settlement made without
its consent. The Trustee shall notify the Company promptly of any claim for
which it may seek indemnification. The Company need not reimburse any expense or
indemnify against any loss or liability determined by a court of competent
jurisdiction to have been caused by the Trustee's own negligence or bad faith.
-32-
To secure the Company's payment obligations in this Section 7.07, the
Trustee shall have a lien prior to the Securities on all money or property held
or collected by the Trustee, except that held in trust to pay the principal of,
premium, if any, and interest on particular Securities.
The indemnity obligations of the Company with respect to the Trustee
provided for in this Section 7.07 shall survive any resignation or removal of
the Trustee and the termination of this Indenture.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(5) or (6) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law, to the extent permitted by law.
SECTION 7.08. Replacement of Trustee.
----------------------
A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section 7.08.
The Trustee may resign by so notifying the Company in writing 30 days
prior to such resignation. The Holders of a majority in aggregate principal
amount of the Securities then outstanding may remove the Trustee by so notifying
the Trustee and the Company in writing and may appoint a successor Trustee with
the Company's consent. The Company may remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged a bankrupt or an insolvent;
(3) a receiver or other public officer takes charge of the Trustee or
its property; or
(4) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in aggregate principal amount of the Securities then outstanding
may appoint a successor Trustee to replace the successor Trustee appointed by
the Company.
If a successor Trustee does not take office within 30 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Holders of at least 10% in aggregate principal amount of the outstanding
Securities may petition at the expense of the company any court of competent
jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any Holder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
-33-
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Holders. The retiring Trustee shall upon payment of all amounts
due it hereunder promptly transfer all property held by it as Trustee to the
successor Trustee, subject to the lien provided for in Section 7.07.
SECTION 7.09. Successor Trustee by Merger, etc.
--------------------------------
If the Trustee consolidates with, merges or converts into, or
transfers all or substantially all of its corporate trust business to, another
corporation, the successor corporation without any further act shall be the
successor Trustee, if such successor corporation is otherwise eligible
hereunder.
SECTION 7.10. Eligibility; Disqualification.
-----------------------------
This Indenture shall always have a Trustee who satisfies the
requirements of TIA ss. 310(a)(1). The Trustee shall always have a combined
capital and surplus of at least $50,000,000 as set forth in its most recent
published annual report of condition. The Trustee shall comply with TIA ss.
310(b).
SECTION 7.11. Preferential Collection of Claims Against Company.
-------------------------------------------------
The Trustee shall comply with TIA ss. 311(a), excluding any creditor
relationship listed in TIA ss. 311(b). A Trustee who has resigned or been
removed shall be subject to TIA ss. 311(a) to the extent indicated.
ARTICLE EIGHT
SATISFACTION AND DISCHARGE; DEFEASANCE
SECTION 8.01. Termination of Company's Obligations.
------------------------------------
The Company may terminate all of its obligations, except for those set
forth below, in respect of the Securities if (i) the Company delivers to the
Trustee for cancellation all of the Securities theretofore authenticated (other
than any Securities that have been destroyed, lost or stolen and in lieu of or
in substitution for which other Securities have been authenticated and
delivered) and not theretofore canceled (the "Outstanding Securities") or (ii)
(a) all of the Outstanding Securities mature or will be called for redemption
within one (1) year under arrangements satisfactory to the Trustee for giving
notice of redemption and (b) the Company deposits with the Trustee, in trust,
amounts sufficient to pay all of the principal of, premium, if any, interest and
liquidated damages due to the stated maturity date or redemption date of all
Outstanding Securities.
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In addition to the foregoing, the Company may terminate its
obligations under Sections 3.07, 4.03 and 4.06 (other than with respect to the
corporate existence of the Company), and no Default or Event of Default under
Section 6.01(3) or (4) shall thereafter apply, by (i) depositing with the
Trustee, under the terms of an irrevocable trust agreement, money or direct
non-callable obligations of the United States of America for the payment of
which the full faith and credit of the United States is pledged ("U. S.
Government Obligations") sufficient (without reinvestment), in the opinion of a
nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, to pay the principal of,
premium, if any, and interest on the Securities at maturity or an earlier
redemption, (ii) delivering to the Trustee either an Opinion of Counsel or a
ruling obtained by the Company from or published by the Internal Revenue Service
to the effect that the Holders of the Securities will not recognize income, gain
or loss for federal income tax purposes as a result of such deposit and
termination of obligations and (iii) delivering to the Trustee an Officers'
Certificate and an Opinion of Counsel each stating compliance with all
conditions precedent provided for herein.
In addition, the Company may, provided that no Default or Event of
Default has occurred and is continuing or would arise therefrom (or, with
respect to a Default or Event of Default specified in Section 6.01(5), occurs at
any time on or prior to the 91st calendar day after the date of such deposit (it
being understood that this condition shall not be deemed satisfied until after
such 91st day)), terminate all of its obligations, except for those set forth
below, in respect of the Securities (including its obligations to pay the
principal of, premium, if any, and interest on the Securities) by (i) depositing
with the Trustee, under the terms of an irrevocable trust agreement, money or
United States Government Obligations sufficient (without reinvestment) to pay
the principal of, premium, if any, and interest on the Securities at maturity or
on earlier redemption, (ii) delivering to the Trustee either a ruling obtained
by the Company from or published by the Internal Revenue Service to the effect
that the Holders of the Securities will not recognize income, gain or loss for
federal income tax purposes as a result of such deposit and termination of
obligations or an Opinion of Counsel addressed to the Trustee based upon such a
ruling or based on a change in the applicable Federal tax law since the date of
this Indenture to such effect and (iii) delivering to the Trustee an Officers'
Certificate and an Opinion of Counsel each stating compliance with all
conditions precedent provided for herein.
Notwithstanding the foregoing three paragraphs, the Company's
obligations in Article Ten and Sections 2.02, 2.03, 2.04, 2.05, 2.06, 2.07,
2.10, 2.11, 2.12 (but not with respect to termination of obligations pursuant to
the foregoing paragraph), 2.13 and 4.01 (but not with respect to termination of
obligations pursuant to the foregoing paragraph), 4.02, 7.07, 7.08, 8.03 and
8.04 shall survive until the Securities are no longer outstanding. Thereafter
the Company's obligations in Sections 7.07, 8.03 and 8.04 shall survive such
satisfaction and discharge.
After such delivery or irrevocable deposit and delivery of an
Officers' Certificate and Opinion of Counsel, the Trustee upon request shall
acknowledge in writing the discharge of the Company's obligations under the
Securities and this Indenture except for those surviving obligations specified
above.
The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the United States Government
Obligations deposited pursuant
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to this Section 8.01 or the principal and interest received in respect thereof
other than any such tax, fee or other charge which by law is for the account of
the Holders of outstanding Securities.
SECTION 8.02. Application of Trust Money.
--------------------------
Subject to the provisions of Section 8.03, the Trustee shall hold in
trust money or U.S. Government Obligations deposited with it pursuant to Section
8.01. It shall apply the deposited money and the money from U.S. Government
obligations through the Paying Agent and in accordance with this Indenture to
the payment of the principal of, premium, if any, and interest on the
Securities.
SECTION 8.03. Repayment to Company.
--------------------
The Trustee and the Paying Agent shall promptly pay to the Company
upon request any excess money or securities held by them at any time. The
Trustee and the Paying Agent shall pay to the Company upon request any money
held by them for the payment of the principal of, premium, if any, and interest
that remains unclaimed for two years; 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 mailed to each Holder, notice stating that
such money remains and that, after a date specified therein, which shall not be
less than 30 days from the date of such mailing, any unclaimed balance of such
money then remaining will be repaid to the Company. After payment to the
Company, Holders entitled to the money must look to the Company for payment as
general creditors unless an applicable abandoned property law designates another
Person.
SECTION 8.04. Reinstatement.
-------------
If the Trustee or Paying Agent is unable to apply any money or U.S.
Government Obligations in accordance with Section 8.01 by reason of any legal
proceeding or by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, the
Company's obligations under this Indenture and the Securities shall be revived
and reinstated as though no deposit had occurred pursuant to Section 8.01 until
such time as the Trustee or Paying Agent is permitted to apply all such money or
U.S. Government Obligations in accordance with Section 8.01; provided, however,
that to the extent the Company makes any payment of the principal of, premium,
if any, and interest on any Securities because of the reinstatement of its
obligations, the Company shall be subrogated to the rights of the Holders of
such Securities to receive such payment from the money or U.S. Government
Obligations held by the Trustee or Paying Agent.
ARTICLE NINE
AMENDMENTS
SECTION 9.01. Without Consent of Holders.
--------------------------
The Company, when authorized by a Board Resolution, may modify, amend
or supplement this Indenture or the Securities without notice to or the consent
of any Holder:
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(1) to comply with the provisions of the TIA:
(2) to cure any ambiguity, omission, defect or inconsistency;
(3) to appoint a successor Trustee;
(4) to comply with Sections 5.01 and 10.07;
(5) to provide for uncertificated Securities in addition to
certificated Securities; or
(6) to make any change that does not adversely affect the rights of
any Holder.
SECTION 9.02. With Consent of Holders.
-----------------------
The Company, when authorized by a Board Resolution, may modify, amend
or supplement this Indenture or the Securities without notice to any Holder but
with the written consent of the Holders of at least a majority in aggregate
principal amount of the outstanding Securities. Subject to Section 6.07, the
Holders of a majority in aggregate principal amount of the outstanding
Securities may waive compliance by the Company with any provision of this
Indenture or the Securities without notice to any other Holder. However, without
the consent of each Holder directly affected thereby, an amendment, supplement
or waiver, including a waiver pursuant to Section 6.04, may not:
(1) change the stated maturity of the Securities;
(2) reduce the principal, premium, if any, or interest on the
Securities;
(3) change the place of payment from New York, New York or change the
currency in which the Securities are payable;
(4) waive a default in the payment of the principal of, premium, if
any, or interest on any Security;
(5) make any change in Section 6.04, Section 6.07 or this Section
9.02;
(6) modify the ranking of the Securities in a materially adverse
manner to the Holders; or
(7) make any change that adversely affects the right to convert any
Security.
It shall not be necessary for the consent of the Holders under this
Section 9.02 to approve the particular form of any proposed amendment or
supplement, but it shall be sufficient if such consent approves the substance
thereof.
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Promptly after an amendment under this Section 9.02 becomes effective,
the Company (or the Trustee on behalf of the Company) shall mail to Holders a
notice briefly describing the amendment.
SECTION 9.03. Compliance with Trust Indenture Act.
-----------------------------------
Every amendment, waiver or supplement to this Indenture or the
Securities shall comply with the TIA as then in effect.
SECTION 9.04. Revocation and Effect of Consents.
---------------------------------
Until an amendment, supplement or waiver becomes effective, a consent
to it by a Holder is a continuing consent by that Holder and every subsequent
Holder of a Security or portion of a Security that evidences the same debt as
the consenting Holder's Security, even if notation of the consent is not made on
any Security. However, any such Holder or subsequent Holder may revoke the
consent as to its Security or portion of a Security if the Trustee receives the
notice of revocation before the date the amendment, supplement or waiver becomes
effective. An amendment, supplement or waiver becomes effective in accordance
with its terms and thereafter binds every Holder.
After an amendment, supplement or waiver becomes effective with
respect to the Securities, it shall bind every Holder unless it makes a change
described in any of clauses (1) through (7) of Section 9.02. In that case the
amendment, supplement or waiver shall bind each Holder of a Security who has
consented to it and, provided that notice of such amendment, supplement or
waiver is reflected on a Security that evidences the same debt as the consenting
Holder's Security, every subsequent Holder of a Security or portion of a
Security that evidences the same debt as the consenting Holder's Security.
SECTION 9.05. Notation on or Exchange of Securities.
-------------------------------------
If an amendment, supplement or waiver changes the terms of a Security,
the Trustee may require the Holder of the Security to deliver, and the Holder
shall deliver, it to the Trustee. The Trustee may place an appropriate notation
on the Security as directed and prepared by the Company about the changed terms
and return it to the Holder. Alternatively, if the Company so determines, the
Company in exchange for the Security shall issue and the Trustee shall
authenticate a new Security that reflects the changed terms.
SECTION 9.06. Trustee Protected.
-----------------
The Trustee may, but shall not be obligated to, sign any amendment,
supplement or waiver authorized pursuant to this Article that affects the
Trustee's rights, duties or obligations. The Trustee shall be entitled to
receive and may conclusively rely upon, in addition to the documents required by
Section 11.04, an Opinion of Counsel and an Officers' Certificate that any
supplemental indenture, modification, amendment or waiver complies with the
Indenture.
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ARTICLE TEN
CONVERSION
SECTION 10.01. Conversion Privilege; Restrictive Legends.
-----------------------------------------
A Holder of a Security may convert the principal of such Security into
Common Stock at any time during the period stated in paragraph 9 of the
Securities. The number of shares issuable upon conversion of a Security is
determined as follows: divide each $1,000 of the principal amount to be
converted by the Conversion Price in effect on the conversion date and round the
result to the nearest 1/100th of a share. The Conversion Price is subject to
adjustment in accordance with Section 10.06.
A Holder may convert a portion of the principal of such Security if
the portion is $1,000 principal amount or an integral multiple of $1,000
principal amount. Provisions of this Indenture that apply to conversion of all
of a Security also apply to conversion of a portion of it.
Any shares issued upon conversion of a Security shall bear the Private
Placement Legend set forth in Exhibit B(I) until after the second anniversary of
the later of the Issue Date for such Security and the last date on which the
Company or any Affiliate of the Company was the owner of such shares or the
Security (or any predecessor security) from which such shares were converted (or
such shorter period of time as permitted by Rule 144(k) under the Securities Act
or any successor provision thereunder or such longer period of time as may be
required under the Securities Act or applicable state securities laws unless
otherwise agreed by the Company and the Holder thereof).
SECTION 10.02. Conversion Procedure.
--------------------
To convert a Security a Holder must satisfy the requirements in
paragraph 9 of the Securities. The date on which the Holder satisfies all those
requirements is the conversion date. As soon as practicable, the Company shall
deliver to the Holder through the Conversion Agent a certificate for the number
of full shares of Common Stock issuable upon the conversion and a check in lieu
of any fractional share. The Person in whose name the certificate is registered
shall be treated as a shareholder of record on and after the conversion date.
Except as described below, no payment or adjustment will be made for
accrued interest on, or liquidated damages with respect to, a converted Security
or for dividends on any Common Stock issued on conversion. If any Security is
converted during the period from but excluding, a record date for the payment of
interest to, but excluding, the next succeeding interest payment date, unless
such Security has been called for redemption on a redemption date between such
dates, such Security must be accompanied by funds equal to the interest payable
to the registered Holder on such interest payment date on the principal amount
so converted. A Security converted on an interest payment date need not be
accompanied by any payment, and the interest on the principal amount of the
Security being converted will be paid on such interest payment date to the
registered Holder of such Security on the applicable record date.
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If a Holder converts more than one Security at the same time, the
number of full shares issuable upon the conversion shall be based on the total
principal amount of the Securities converted.
Upon surrender of a Security that is converted in part the Trustee
shall authenticate for the Holder a new Security equal in principal amount to
the unconverted portion of the Security surrendered.
If the last day on which a Security may be converted is a Legal
Holiday in a place where a Conversion Agent is located, the Security may be
surrendered to that Conversion Agent on the next succeeding day that is not a
Legal Holiday.
SECTION 10.03. Fractional Shares.
-----------------
The Company will not issue fractional shares of Common Stock upon
conversion of Securities and instead will deliver a cash adjustment in lieu of
the fractional share based upon the current market value of the Common Stock.
The current market value of a fraction of a share is determined by multiplying
the current market price of a full share by the fraction, and rounding the
result to the nearest cent. For purposes of this Section, the current market
price of a share of Common Stock is the Closing Price of the Common Stock on the
Trading Day immediately preceding the conversion date.
SECTION 10.04. Taxes on Conversion.
-------------------
If a Holder converts its Security, the Company shall pay any
documentary, stamp or similar issue or transfer tax due on the issue of shares
of Common Stock upon the conversion. However, the Holder shall pay any such tax
which is due because the shares are issued in a name other than the Holder's
name.
SECTION 10.05. Company to Provide Stock.
------------------------
The Company shall reserve out of its authorized but unissued Common
Stock or its Common Stock held in treasury enough shares of Common Stock to
permit the conversion of all of the Securities, including such greater number of
shares of Common Stock into which such Securities shall be convertible into as a
result of a Conversion Price adjustment contemplated by Section 10.06 hereof.
All shares of Common Stock which may be issued upon conversion of the
Securities shall be validly issued, fully paid and non-assessable.
The Company will endeavor to comply with all securities laws
regulating the offer and delivery of shares of Common Stock upon conversion of
Securities and will endeavor to list such shares on each national securities
exchange on which the Common Stock is listed.
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SECTION 10.06. Adjustment of Conversion Price.
------------------------------
The Conversion Price shall be adjusted from time to time by the
Company as follows:
(a) In case the Company shall hereafter pay a dividend or make a
distribution to all holders of the outstanding Common Stock in shares of
Common Stock, the Conversion Price in effect at the opening of business on
the date following the Record Date with respect to shareholders entitled to
receive such dividend or other distribution shall be reduced by multiplying
such Conversion Price by a fraction of which the numerator shall be the
number of shares of Common Stock outstanding at the close of business on
the Record Date fixed for such determination and the denominator shall be
the sum of such number of shares and the total number of shares
constituting such dividend or other distribution, such reduction to become
effective immediately after the opening of business on the day following
the Record Date. If any dividend or distribution of the type described in
this Section 10.06(a) is declared but not so paid or made, the Conversion
Price shall again be adjusted to the Conversion Price which would then be
in effect if such dividend or distribution had not been declared.
(b) In case the Company shall issue rights or warrants to all holders
of its outstanding shares of Common Stock entitling them to subscribe for
or purchase shares of Common Stock at a price per share less than the
Current Market Price on the Record Date fixed for the determination of
shareholders entitled to receive such rights or warrants, the Conversion
Price shall be adjusted so that the same shall equal the price determined
by multiplying the Conversion Price in effect at the opening of business on
the date after such Record Date by a fraction of which the numerator shall
be the number of shares of Common Stock outstanding at the close of
business on the Record Date plus the number of shares which the aggregate
offering price of the total number of shares so offered 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 close of business on the Record Date plus the total number of
additional shares of Common Stock so offered for subscription or purchase.
Such adjustment shall become effective immediately after the opening of
business on the day following the Record Date fixed for determination of
shareholders entitled to receive such rights or warrants. To the extent
that shares of Common Stock are not delivered pursuant to such rights or
warrants, upon the expiration or termination of such rights or warrants the
Conversion Price shall be readjusted to the Conversion Price that would
then be in effect had the adjustments made upon the issuance of such rights
or warrants been made on the basis of delivery of only the number of shares
of Common Stock actually delivered. In the event that such rights or
warrants are not so issued, the Conversion Price shall again be adjusted to
be the Conversion Price that would then be in effect if such date fixed for
the determination of shareholders entitled to receive such rights or
warrants had not been fixed. In determining whether any rights or warrants
entitle the holders to subscribe for or purchase shares of Common Stock at
less than such Current Market Price, and in determining the aggregate
offering price of such shares of Common Stock, there shall be taken into
account any consideration received for such rights or warrants, the value
of such consideration, if other than cash, to be determined in good faith
by the Board of Directors.
-41-
(c) In case the outstanding shares of Common Stock shall be split or
subdivided into a greater number of shares of Common Stock, the Conversion
Price in effect at the opening of business on the day following the day
upon which such subdivision becomes effective shall be proportionately
reduced, and conversely, in case outstanding shares of Common Stock shall
be combined into a smaller number of shares of Common Stock, the Conversion
Price in effect at the opening of business on the day following the day
upon which such combination becomes effective shall be proportionately
increased, such reduction or increase, as the case may be, to become
effective immediately after the opening of business on the day following
the day upon which such subdivision or combination becomes effective.
(d) In case the Company shall, by dividend or otherwise, distribute to
all holders of its Common Stock shares of any class of Capital Stock of the
Company (other than any dividends or distributions to which Section
10.06(a) applies) or evidences of its indebtedness, cash or other assets
(including securities, but excluding (1) any rights or warrants referred to
in Section 10.06(b), (2) dividends and distributions paid exclusively in
cash and (3) any Capital Stock, evidences of indebtedness, cash or assets
distributed upon a merger or consolidation to which Section 10.07 applies)
(the foregoing hereinafter in this Section 10.06(d) called the "Subject
Securities"), unless the Company elects to reserve such Subject Securities
for distribution to the Holders upon conversion of the Securities so that
any such Holder converting Securities will receive upon such conversion, in
addition to the shares of Common Stock to which such Holder is entitled,
the amount and kind of such Subject Securities which such Holder would have
received if such Holder had converted its Securities into Common Stock
immediately prior to the Record Date for such distribution of the Subject
Securities, then, in each such case, the Conversion Price shall be reduced
so that, as of the Record Date for such distribution of Subject Securities,
the same shall be equal to the price determined by multiplying the
Conversion Price in effect immediately prior to the close of business on
the Record Date with respect to such distribution by a fraction of which
the numerator shall be the Current Market Price on such date less the fair
market value on such date of the portion of the Subject Securities so
distributed 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 day following the
Record Date; provided, however, that in the event the then fair market
value of the portion of the Subject Securities so distributed applicable to
one share of Common Stock is equal to or greater than the Current Market
Price on the Record Date, then in lieu of the foregoing adjustment,
adequate provision shall be made so that each Holder shall have the right
to receive upon conversion of a Security (or any portion thereof) the
amount of Subject Securities such Holder would have received had such
Holder converted such Security (or portion thereof) immediately prior to
such Record Date. In the event that such dividend or distribution is not so
paid or made, the Conversion Price shall again be adjusted to be the
Conversion Price which would then be in effect if such dividend or
distribution had not been declared.
For purposes of this Section 10.06(d), rights or warrants distributed
by the Company to all holders of Common Stock entitling the holders thereof
to subscribe for or purchase shares of the Company's Capital Stock (either
initially or under certain circumstances) that are (i) deemed to be
transferred with such shares of Common Stock; (ii) not exercisable; and
-42-
(iii) issued in respect of future issuances of Common Stock, until the
occurrence of a specified event or events ("Trigger Event") shall be deemed
not to have been distributed and no adjustment to the Conversion Price with
respect thereto shall be made until the occurrence of the earliest Trigger
Event. If any such right or warrant is subject to subsequent events, upon
the occurrence of which such right or warrant shall become exercisable to
purchase different securities, evidences of indebtedness or other assets or
entitle the holder to purchase a different number or amount of the
foregoing or to purchase any of the foregoing at a different purchase
price, then the occurrence of each such event shall be deemed to be the
date of issuance and record date with respect to a new right or warrant
(and a termination or expiration of the existing right or warrant without
exercise by the holder thereof). In addition, in the event of any
distribution (or deemed distribution) of rights or warrants, or any Trigger
Event or other event (of the type described in the preceding sentence) with
respect thereto, that resulted in an adjustment to the Conversion Price
under this Section 10.06(d), (1) in the case of any such rights or warrants
which shall all have been redeemed or repurchased without exercise by any
holders thereof, the Conversion Price shall be readjusted upon such final
redemption or repurchase to give effect to such distribution or Trigger
Event, as the case may be, as though it were a cash distribution, equal to
the per share redemption or repurchase price received by a holder of Common
Stock with respect to such rights or warrants (assuming such holder had
retained such rights or warrants), made to all holders of Common Stock as
of the date of such redemption or repurchase, and (2) in the case of such
rights or warrants all of which shall have expired or been terminated
without exercise, the Conversion Price shall be readjusted as if such
rights and warrants had never been issued.
For purposes of this Section 10.06(d) and Sections 10.06(a) and (b),
any dividend or distribution to which this Section 10.06(d) is otherwise
applicable that also includes shares of Common Stock, or rights or warrants
to subscribe for or purchase shares of Common Stock applies (or both),
shall be deemed instead to be (1) a dividend or distribution of the
evidences of indebtedness, assets, shares of Capital Stock, rights or
warrants (other than such shares of Common Stock or rights or warrants)
(and any Conversion Price reduction required by this Section 10.06(d) with
respect to such dividend or distribution shall then be made) immediately
followed by (2) a dividend or distribution of such shares of Common Stock
or such rights or warrants (and any further Conversion Price reduction
required by Sections 10.06(a) and (b) with respect to such dividend or
distribution shall then be made), except (A) the Record Date of such
dividend or distribution shall be substituted as "the date fixed for the
determination of shareholders entitled to receive such dividend or other
distribution", "Record Date fixed for such determination" and "Record Date"
within the meaning of Section 10.06(a) and as "the date fixed for the
determination of shareholders entitled to receive such rights or warrants",
"the Record Date fixed for the determination of the shareholders entitled
to receive such rights or warrants" and "such Record Date" within the
meaning of Section 10.06(b) and (B) any shares of Common Stock included in
such dividend or distribution shall not be deemed "outstanding at the close
of business on the Record Date fixed for such determination" within the
meaning of Section 10.06(a).
With respect to any shareholder rights plan existing on the date
hereof or in the event that the Company implements any other shareholder
rights plan, upon conversion of the Secu-
-43-
rities the Holders will receive, in addition to the Common Stock issuable
upon such conversion, the rights issued under such rights plan
(notwithstanding the occurrence of an event causing such rights to separate
from the Common Stock at or prior to the time of conversion); provided, a
Holder who is a holder of Common Stock (or direct or indirect interests
therein) at the time of conversion, but who is not entitled as such a
holder to such rights pursuant to the terms of any such plan, shall not be
eligible to receive any such rights hereunder. Any distribution of rights
or warrants pursuant to a shareholder rights plan complying with the
requirements set forth in the immediately preceding sentence of this
paragraph shall not constitute a distribution of rights or warrants for the
purposes of the other provisions of Section 10.06(b) or this Section
10.06(d).
(e) In case the Company shall, by dividend or otherwise, distribute to
all holders of its Common Stock cash (excluding any cash that is
distributed upon a merger or consolidation to which Section 10.07 applies
or as part of a distribution referred to in Section 10.06(d)), in an
aggregate amount that, combined together with (1) the aggregate amount of
all other such all-cash distributions to all holders of its Common Stock
within the twelve (12) months preceding the date of payment of such
distribution, and in respect of which no adjustment has been made, and (2)
the aggregate of any cash plus the fair market value of consideration
payable in respect of any tender offer by the Company or any subsidiary for
all or any portion of the Common Stock concluded within the twelve (12)
months preceding the date of payment of such distribution, and in respect
of which no adjustment has been made (such aggregate amount, the "Common
Dividend Amount"), exceeds 15% of the product of the Current Market Price
on the Record Date with respect to such distribution times the number of
shares of Common Stock outstanding on such date (the "Market
Capitalization"), then, and in each such case, immediately after the close
of business on such date, the Conversion Price shall be reduced so that the
same shall equal the price determined by multiplying the Conversion Price
in effect immediately prior to the close of business on the Record Date for
such cash dividend or distribution by a fraction (i) the numerator of which
shall be equal to the Current Market Price on the Record Date less an
amount equal to the quotient of (x) the amount by which the Common Dividend
Amount exceeds 15% of the Market Capitalization and (y) the number of
shares of Common Stock outstanding on the Record Date and (ii) the
denominator of which shall be equal to the Current Market Price on such
date; provided, however, that in the event the portion of the cash so
distributed applicable to one share of Common Stock is equal to or greater
than the Current Market Price of the Common Stock on the Record Date, in
lieu of the foregoing adjustment, adequate provision shall be made so that
each Holder shall have the right to receive upon conversion of a Security
(or any portion thereof) the amount of cash such Holder would have received
had such holder converted such Security (or portion thereof) immediately
prior to such Record Date. In the event that such dividend or distribution
is not so paid or made, the Conversion Price shall again be adjusted to be
the Conversion Price which would then be in effect if such dividend or
distribution had not been declared.
(f) In case a tender offer made by the Company or any subsidiary for
all or any portion of the Common Stock shall expire and such tender offer
shall require the payment to holders of Common Stock of an aggregate
consideration that together with
-44-
(1) the aggregate of the cash plus the fair market value of
consideration payable in respect of any other tender offers by the
Company or any of its subsidiaries for all or any portion of the
Common Stock expiring within the twelve (12) months preceding the
expiration of such tender offer and in respect of which no adjustment
has been made, and
(2) the aggregate amount of any all-cash distributions to all
holders of the Company's Common Stock made within twelve (12) months
preceding the expiration of such tender offer and in respect of which
no adjustment has been made,
exceeds 15% of the product of the Current Market Price as of the time of
expiration of such tender offer times the number of shares of Common Stock
outstanding at such time, then, and in each such case, immediately prior to
the opening of business on the day after the expiration of such tender
offer, 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 close of business on the date of the expiration of
such tender offer by a fraction of which the numerator shall be the number
of shares of Common Stock outstanding on the date of expiration of the
tender offer multiplied by the Current Market Price of the Common Stock on
the Trading Day next succeeding the date of expiration of the tender offer
and the denominator shall be the sum of (x) the fair market value of the
aggregate consideration payable for all shares of Common Stock validly
tendered and not withdrawn as of the date of expiration of the tender offer
and (y) the product of the number of shares of Common Stock outstanding
less all shares validly tendered and not withdrawn as of the date of
expiration of the tender offer and the Current Market Price of the Common
Stock on the Trading Day next succeeding the date of expiration of the
tender offer, such reduction (if any) to become effective immediately prior
to the opening of business on the day following the date of expiration of
the tender offer. In the event the Company is permanently prevented by
applicable law from effecting any such purchases or all such purchases are
rescinded, the Conversion Price shall again be adjusted to be the
Conversion Price which would then be in effect if such tender offer had not
been made. If the application of this Section 10.06(f) to any tender offer
would result in an increase in the Conversion Price, no adjustment shall be
made for such tender offer under this Section 10.06(f).
(g) For purposes of this Section 10.06, the following terms have the
meanings indicated:
(1) "Closing Price" with respect to any securities on any day
shall mean the closing sale price regular way on such day or, in case
no such sale takes place on such day, the average of the reported
closing bid and asked prices, regular way, in each case on the Nasdaq
National Market or New York Stock Exchange, as applicable, or, if such
security is not listed or admitted to trading on such Nasdaq National
Market or New York Stock Exchange, on the principal national security
exchange or quotation system on which such security is quoted or
listed or admitted to trading, or, if not quoted or listed or admitted
to trading on any national securities exchange or quotation system,
the average of the closing bid and asked prices of such security on
-45-
the over-the-counter market on the day in question as reported by the
National Quotation Bureau Incorporated, or a similar generally accepted
reporting service, or if not so available, in such manner as furnished by
any New York Stock Exchange member firm selected from time to time by the
Board of Directors for that purpose, or a price determined in good faith by
the Board of Directors, whose determination shall be conclusive and
described in a Board Resolution.
(2) "Current Market Price" shall mean the average of the Closing
Prices per share of Common Stock for the ten (10) consecutive Trading Days
immediately prior to the date for which a Current Market Price is required;
provided, however, that:
(1) if the "ex" date (as hereinafter defined) for any event
(other than the issuance or distribution requiring such computation)
that requires an adjustment to the Conversion Price pursuant to
Section 10.06(a), (b), (c), (d), (e), (f) or (g) occurs during such
ten consecutive Trading Days, then the Closing Price for each Trading
Day prior to the "ex" date for such other event shall be adjusted by
multiplying such Closing Price by the same fraction by which the
Conversion Price is so required to be adjusted as a result of such
other event,
(2) if the "ex" date for any event (other than the issuance or
distribution requiring such computation) that requires an adjustment
to the Conversion Price pursuant to Section 10.06(a), (b), (c), (d),
(e), (f) or (g) occurs on or after the "ex" date for the issuance or
distribution requiring such computation and prior to the day in
question, then the Closing Price for each Trading Day on and after the
"ex" date for such other event shall be adjusted by multiplying such
Closing Price by the reciprocal of the fraction by which the
Conversion Price is so required to be adjusted as a result of such
other event, and
(3) if the "ex" date for the issuance or distribution requiring
such computation is prior to the day in question, after taking into
account any adjustment required pursuant to clause (1) or (2) of this
proviso, the Closing Price for each Trading Day on or after such "ex"
date shall be adjusted by adding thereto the amount of any cash and
the fair market value of the evidences of indebtedness, shares of
Capital Stock or assets being distributed applicable to one share of
Common Stock as of the close of business on the day before such "ex"
date.
For purposes of any computation under Sections 10.06(f) or (g), the
Current Market Price of the Common Stock on any date shall be deemed to be
the average of the daily Closing Prices per share of Common Stock for such
day and the next two succeeding Trading Days; provided, however, that if
the "ex" date for any event (other than the tender offer requiring such
computation) that requires an adjustment to
-46-
the Conversion Price pursuant to Xxxxxxx 00.00(x), (x), (x), (x), (x), (x)
and (g) occurs on or after the date of expiration of the tender or exchange
offer requiring such computation and prior to the day in question, the
Closing Price for each Trading Day on and after the "ex" date for such
other event shall be adjusted by multiplying such Closing Price by the
reciprocal of the fraction by which the Conversion Price is so required to
be adjusted as a result of such other event.
For purposes of this definition, the term "ex" date, (1) when used
with respect to any issuance or distribution, means the first date on which
the Common Stock trades regular way on the relevant exchange or in the
relevant market from which the Closing Price was obtained without the right
to receive such issuance or distribution, (2) when used with respect to any
subdivision or combination of shares of Common Stock, means the first date
on which the Common Stock trades regular way on such exchange or in such
market after the time at which such subdivision or combination becomes
effective, and (3) when used with respect to any tender or exchange offer
means the first date on which the Common Stock trades regular way on such
exchange or in such market after the Expiration Time of such offer.
(3) "fair market value" shall mean the amount which a willing buyer would
pay a willing seller in an arm's length transaction determined in good
faith by the Board of Directors, whose determination shall be conclusive
and described in a Board Resolution.
(4) "Record Date" shall mean, with respect to any dividend, distribution or
other transaction or event in which the holders of Common Stock have the
right to receive any cash, securities or other property or in which the
Common Stock (or other applicable security) is exchanged for or converted
into any combination of cash, securities or other property, the date fixed
for determination of shareholders entitled to receive such cash, securities
or other property (whether such date is fixed by the Board of Directors or
by statute, contract or otherwise).
(5) "Trading Day" shall mean (x) if the applicable security is listed or
admitted for trading on the New York Stock Exchange or another national
security exchange, a day on which the New York Stock Exchange or such other
national security exchange, as the case may be, is open for business, (y)
if the applicable security is quoted on the Nasdaq National Market, a day
on which trades may be made thereon or (z) if the applicable security is
not so listed, admitted for trading or quoted, any day other than a
Saturday or Sunday or a day on which banking institutions in the State of
New York are authorized or obligated by law or executive order to close.
(h) The Company may make such reductions in the Conversion Price, in
addition to those required by Sections 10.06(a), (b), (c), (d), (e) and (f), as
the Board of Directors considers to be advisable to avoid or diminish any income
tax to holders of Common Stock or rights to purchase Common Stock resulting from
any dividend or distribution of stock (or rights to acquire stock) or from any
event treated as such for income tax purposes.
-47-
To the extent permitted by applicable law, the Company from time to
time may reduce the Conversion Price by any amount for any period of time
if the period is at least twenty (20) days and the reduction is irrevocable
during the period. Whenever the Conversion Price is reduced pursuant to the
preceding sentence, the Company shall mail to the Holder of each Security
at his last address appearing on the register maintained by the Registrar a
notice of the reduction at least fifteen (15) days prior to the date the
reduced Conversion Price takes effect, and such notice shall state the
reduced Conversion Price and the period during which it will be in effect.
(i) No adjustment in the Conversion Price pursuant to this Section
10.06 shall be required unless such adjustment would require an increase or
decrease of at least 1% in such price; provided, however, that any
adjustment that would otherwise be required to be made shall be carried
forward and taken into account in any subsequent adjustment. All
calculations under this Article Ten shall be made by the Company and shall
be made to the nearest cent or to the nearest one hundredth of a share, as
the case may be. No adjustment need be made for a change in the par value
or no par value of the Common Stock.
(j) Whenever the Conversion Price is adjusted as herein provided, the
Company shall promptly file with the Trustee, and any Conversion Agent
other than the Trustee, an Officers' Certificate setting forth the
Conversion Price after such adjustment and setting forth a brief statement
of the facts requiring such adjustment. Unless and until a Trust Officer of
the Trustee shall have received such Officers' Certificate, the Trustee
shall not be deemed to have knowledge of any adjustment of the Conversion
Price and may assume without inquiry that the last Conversion Price of
which it has knowledge remains in effect. Promptly after delivery of such
certificate, the Company shall prepare a notice of such adjustment of the
Conversion Price setting forth the adjusted Conversion Price and the date
on which each adjustment becomes effective and shall mail such notice of
such adjustment of the Conversion Price to the Holder of each Security at
his last address appearing on the register maintained by the Registrar,
within twenty (20) days of the effective date of such adjustment. Failure
to deliver such notice shall not affect the legality or validity of any
such adjustment.
(k) In any case in which this Section 10.06 provides that an
adjustment shall become effective immediately after a Record Date for an
event, the Company may defer until the occurrence of such event (i) issuing
to the Holder of any Security converted after such Record Date and before
the occurrence of such event the additional shares of Common Stock issuable
upon such conversion by reason of the adjustment required by such event
over and above the Common Stock issuable upon such conversion before giving
effect to such adjustment and (ii) paying to such Holder any amount in cash
in lieu of any fraction pursuant to Section 10.03.
(l) For purposes of this Section 10.06, the number of shares of Common
Stock at any time outstanding shall not include shares held in the treasury
of the Company but shall include shares issuable in respect of scrip
certificates issued in lieu of fractions of shares of Common Stock. The
Company will not pay any dividend or make any distribution on shares of
Common Stock held in the treasury of the Company.
-48-
SECTION 10.07. Effect of Reclassification, Consolidation, Merger or Sale.
---------------------------------------------------------
In the case of (i) any reclassification or change of the outstanding
shares of Common Stock (other than a change in par value, or from par value to
no par value, or from no par value to par value, or as a result of a subdivision
or combination), (ii) any consolidation, merger or combination of the Company
with another corporation as a result of which holders of Common Stock shall be
entitled to receive stock, securities or other property or assets (including
cash) with respect to or in exchange for such Common Stock or (iii) any sale or
conveyance of the properties and assets of the Company as, or substantially as,
an entirety to any other corporation as a result of which holders of Common
Stock shall be entitled to receive stock, securities or other property or assets
(including cash) with respect to or in exchange for such Common Stock, then,
unless an adjustment with respect thereto shall be made pursuant to Section
10.06, the Company or the successor or purchasing corporation, as the case may
be, shall execute with the Trustee a supplemental indenture providing that the
Securities shall be convertible into the kind and amount of shares of stock and
other securities or property or assets (including cash) receivable upon such
reclassification, change, consolidation, merger, combination, sale or conveyance
by a holder of a number of shares of Common Stock issuable upon conversion of
such Securities immediately prior to such reclassification, change,
consolidation, merger, combination, sale or conveyance assuming such holder of
Common Stock did not exercise rights of election, if any, as to the kind or
amount of securities, cash or other property receivable upon such consolidation,
merger, statutory exchange, sale or conveyance. Such supplemental indenture
shall provide for adjustments which shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Article Ten. If, in the case
of any such reclassification, change, consolidation, merger, combination, sale
or conveyance, the stock or other securities and assets receivable thereupon by
a holder of shares of Common Stock include shares of stock or other securities
and assets of a Person other than the successor or purchasing corporation, as
the case may be, in such reclassification, change, consolidation, merger,
combination, sale or conveyance, then such supplemental indenture shall also be
executed by such other Person and shall contain such additional provisions to
protect the interests of the Holders as the Board of Directors shall reasonably
consider necessary by reason of the foregoing.
The Company shall cause notice of the execution of such
supplemental indenture to be mailed to each Holder of Securities, at its address
appearing on the register maintained by the Registrar, within twenty (20) days
after execution thereof. Failure to deliver such notice shall not affect the
legality or validity of such supplemental indenture.
SECTION 10.08. Notice of Certain Transactions.
------------------------------
If:
(1) the Company proposes to take any action that would require an
adjustment in the conversion rate;
(2) the Company proposes to take any action that would require a
supplemental indenture pursuant to Section 10.07; or
-49-
(3) there is a proposed liquidation, winding up or dissolution of the
Company,
the Company shall mail to Holders a notice stating the proposed record date for
a dividend or distribution or the proposed effective date of a subdivision,
combination, reclassification, consolidation, merger, transfer, lease,
liquidation or dissolution. The Company shall mail the notice at least 10 days
before such date. Failure to mail the notice or any defect in it shall not
affect the validity of the transaction.
SECTION 10.09. Company Determination Final.
---------------------------
Any determination that the Board of Directors makes pursuant to this
Article Ten is conclusive, absent manifest error.
SECTION 10.10. Trustee's Disclaimer.
--------------------
The Trustee has no duty to determine when an adjustment under this
Article or under the terms of the Securities should be made, how it should be
made or what it should be. Such information shall be timely provided to the
Trustee in an Officers' Certificate. The Trustee has no duty to determine
whether any provisions of a supplemental indenture under Section 10.07 are
correct. The Trustee makes no representation as to the validity or value of any
securities or assets issued upon conversion of Securities. The Trustee shall not
be responsible for the Company's failure to comply with this Article. Each
Conversion Agent other than the Company shall have the same protection under
this Section 10.10 as the Trustee.
ARTICLE ELEVEN
MISCELLANEOUS
SECTION 11.01. Trust Indenture Act Controls.
----------------------------
If any provision of this Indenture limits, qualifies or conflicts with
another provision which is required to be included in this Indenture by the TIA,
the required provision shall control.
SECTION 11.02. Notices.
-------
Any notice, request or communication by the Company or the Trustee to
the other is duly given if in writing and delivered in person, mailed by
first-class mail or by express delivery to the other's address stated in this
Section 11.02. The Company or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.
Any notice or communication to a Holder shall be mailed by first-class
mail or by express delivery to its address shown on the register kept by the
Registrar. Failure to mail a notice or communication to a Holder or any defect
in it shall not affect its sufficiency with respect to other Holders.
-50-
If a notice or communication is mailed in the manner provided above,
it is duly given, whether or not the addressee receives it.
If the Company mails a notice or communication to Holders, it shall
mail a copy to the Trustee and each Agent at the same time.
All notices or communications shall be in writing.
The Company's address is:
Charming Shoppes, Inc.
000 Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxxx 00000
Attention: General Counsel
With a copy to (which shall not constitute required
notice):
Drinker Xxxxxx & Xxxxx, LLP
One Xxxxx Square
00xx xxx Xxxxxx Xxxxxxx
Xxxxxxxxxxxx, XX 00000-0000
Attention: F. Xxxxxxx Xxxxxxx, III, Esq.
The Trustee's address is:
Wachovia Bank, National Association
000 Xxxxx Xxxxx Xxxxxx
Xxxx XX 1249
Xxxxxxxxxxxx, XX 00000
Attention: Corporate Trust Administration
SECTION 11.03. Communication by Holders with Other Holders.
-------------------------------------------
Holders may communicate pursuant to TIA ss. 312(b) with other
Holders with respect to their rights under this Indenture or the Securities. The
Company, the Trustee, the Registrar and anyone else shall have the protection of
TIA ss. 312(c).
SECTION 11.04. Certificate and Opinion as to Conditions Precedent.
--------------------------------------------------
Upon any request or application by the Company to the Trustee to take
any action under this Indenture the Company shall furnish to the Trustee:
-51-
(1) an Officers' Certificate stating that, in the opinion of the
signers, all conditions precedent, if any, provided for in this Indenture
relating to the proposed action have been complied with; and
(2) an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent have been complied with.
Each signer of an Officers' Certificate or an Opinion of Counsel may
(if so stated) rely, effectively, upon an Opinion of Counsel as to legal matters
and an Officers' Certificate as to factual matters if such signer reasonably and
in good faith believes in the accuracy of the document relied upon.
SECTION 11.05. Statements Required in Certificate or Opinion.
---------------------------------------------
Each Officers' Certificate or Opinion of Counsel with respect
to compliance with a condition or covenant provided for in this Indenture shall
include:
(1) a statement that the Person making such certificate or opinion has
read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of such Person, he or she has
made such examination or investigation as is necessary to enable him or her
to express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(4) a statement as to whether or not, in the opinion of such Person,
such condition or covenant has been complied with.
SECTION 11.06. Rules by Trustee and Agents.
---------------------------
The Trustee may make reasonable rules for action by or at a meeting of
Holders. The Registrar, Paying Agent or Conversion Agent may make reasonable
rules and set reasonable requirements for their respective functions.
SECTION 11.07. Legal Holidays.
--------------
A "Legal Holiday" is a Saturday, a Sunday or a day on which banking
institutions are not required to be open in The City of New York, in the State
of New York or in the city in which the Trustee administers its corporate trust
business. If a payment date is a Legal Holiday at a place of payment, payment
may be made at that place on the next succeeding day that is not a Legal
Holiday, and no interest shall accrue on that payment for the intervening
period.
A "Business Day" is a day other than a Legal Holiday.
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SECTION 11.08. No Recourse Against Others.
--------------------------
No past, present or future director, officer, employee or shareholder,
as such, of the Company shall have any liability for any obligations of the
Company under the Securities or this Indenture or for any claim based on, in
respect of or by reason of such obligations or their creation. Each Holder by
accepting a Security waives and releases all such liability. The waiver and
release are part of the consideration for the issue of the Securities.
SECTION 11.09. Duplicate Originals.
-------------------
The parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together represent the same
agreement.
SECTION 11.10. Governing Law.
-------------
The laws of the State of New York, without regard to principles of
conflicts of law, shall govern this Indenture and the Securities.
SECTION 11.11. No Adverse Interpretation of Other Agreements.
---------------------------------------------
Another indenture, loan or debt agreement may not be used to interpret
this Indenture.
SECTION 11.12. Successors.
----------
All agreements of the Company in this Indenture and the Securities
shall bind its successors. All agreements of the Trustee in this Indenture shall
bind its successors.
SECTION 11.13. Separability.
------------
In case any provision in this Indenture or in the Securities 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
and a Holder shall have no claim therefor against any party hereto.
SECTION 11.14. Table of Contents, Headings, etc.
--------------------------------
The Table of Contents, Cross-Reference Table and headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part hereof and shall in no way
modify or restrict any of the terms or provisions hereof.
S-1
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed as of the date first above written.
CHARMING SHOPPES, INC.
By: /s/ Xxxx X. Xxxxxxx
------------------------------------------
Name: Xxxx X. Xxxxxxx
Title: Executive Vice President and
Chief Financial Officer
WACHOVIA BANK, NATIONAL ASSOCIATION
as Trustee
(formerly known as First Union National Bank)
By: /s/ Xxxxxx X. Xxxxxx
------------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President
EXHIBIT A
REGISTERED [Face of Security]
NUMBER $
CUSIP______________ CHARMING SHOPPES, INC.
4.75% SENIOR CONVERTIBLE NOTE DUE 2012
CHARMING SHOPPES, INC., a Pennsylvania corporation (herein called the
"Company"), for value received, hereby promises to pay to Cede & Co. or
registered assigns, the principal sum of [AMOUNT] Dollars on June 1, 2012, and
to pay interest thereon as provided below and on the reverse hereof on the
principal sum, until the principal hereof and any unpaid and accrued interest is
paid or duly provided for.
Interest Payment Dates: June 1 and December 1, with the first payment
to be made on December 1, 2002.
Record Dates: May 15 and November 15.
A-1
IN WITNESS WHEREOF, CHARMING SHOPPES, INC. has caused this instrument
to be duly signed.
CHARMING SHOPPES, INC.
By:
------------------------------
Name:
Title:
By:
------------------------------
Name:
Title:
Dated:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities referred to in the within-mentioned Indenture.
WACHOVIA BANK, NATIONAL ASSOCIATION, as Trustee
By:
------------------------------------------------
Authorized Officer
A-2
[REVERSE OF SECURITY]
CHARMING SHOPPES, INC.
4.75% SENIOR CONVERTIBLE NOTE DUE 2012
1. Interest. Charming Shoppes, Inc., a Pennsylvania corporation (the
"Company"), promises to pay interest on the principal amount of this Security at
the rate per annum shown above. The Company will pay interest semi-annually in
arrears on June 1 and December 1 of each year, with the first payment to be made
on December 1, 2002. Interest on the Securities will accrue on the principal
amount from the most recent date to which interest has been paid or duly
provided for or, if no interest has been paid, from the original date of
issuance. Interest will be computed on the basis of a 360-day year of twelve
30-day months.
2. Maturity. The Securities will mature on June 1, 2012 unless earlier
converted, redeemed or repurchased pursuant to the terms hereof and the
Indenture (as defined below).
3. Method of Payment. The Company will pay interest on the Securities
to the Persons who are registered Holders of Securities at the close of business
on the record date set forth on the face of this Security next preceding the
applicable interest payment date except: (i) defaulted interest, which shall be
paid as set forth in Section 2.12 of the Indenture, (ii) interest payable upon
redemption or repurchase, unless the date of redemption or repurchase is an
interest payment date, will be payable to the Person to whom the principal is
payable and (iii) in the case of any Security or portion of any Security that is
converted into Common Stock during the period from, but excluding, a record date
for any interest payment date to, but excluding, that interest payment date, (A)
if the Company has sent a notice of redemption with respect to such Security, or
portion of such Security, for a redemption date that occurs during that period,
or if the Company has sent a Company Notice respecting a Repurchase Date for
such Security, or portion of such Security, that occurs during that period, then
the Company will not be required to pay interest on that interest payment date
in respect of such Security, or portion of such Security, that is converted
rather than redeemed or repurchased; or (B) if no such notice of redemption or
Company Notice has been sent during that period with respect to such Security or
portion of such Security, then such Security or portion of such Security that is
submitted for conversion during that period must be accompanied by funds equal
to the interest payable on that interest payment date on the principal amount so
converted. Holders must surrender Securities to a Paying Agent to collect the
principal payments. The Company will pay the principal, premium, if any, and
interest in money of the United States that at the time of payment is legal
tender. Principal and interest may, at the Company's option, be paid either (i)
by check mailed to the address of the Person entitled to the interest as it
appears in the register kept by the Registrar (provided (a) payments to the
Depositary will be made by wire transfer of immediately available funds to the
account of the Depositary or its nominee and (b) a Holder with an aggregate
principal amount of Securities in excess of $10 million will, at the written
election of the Holder, filed on or before the relevant record date with the
Trustee, be paid by wire transfer in immediately available funds); or (ii) by
transfer to an account maintained by that Person located in the U.S.
4. Paying Agent, Registrar, Conversion Agent. Initially, Wachovia
Bank, National Association (the "Trustee"), will act as Paying Agent, Registrar
and Conversion Agent. The
A-3
Company may change any Paying Agent, Registrar or Conversion Agent without
notice. The Company may act in any such capacity.
5. Indenture. The Company issued the Securities under an Indenture
dated as of May 28, 2002 (the "Indenture") between the Company and the Trustee.
The terms of the Securities include those stated in the Indenture and those made
part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.
Code xx.xx. 77aaa-77bbbb) (the "Act") as in force at the date as of which this
instrument was executed; provided, however, that in the event the Trust
Indenture Act of 1939 is amended after such date, the "Act" means, to the extent
required by any such amendment, the Trust Indenture Act of 1939 as so amended.
The Securities are subject to all such terms, and Holders are referred to the
Indenture and the Act for a statement of such terms. The Securities are
unsecured general obligations of the Company limited to a maximum of
$130,000,000 aggregate principal amount (plus such additional amount (up to an
aggregate of $20,000,000) purchased by the Initial Purchasers pursuant to the
option described in Section 2.02 of the Indenture), except as otherwise provided
in the Indenture (except for Securities issued in substitution for destroyed,
mutilated, lost or stolen Securities). Terms used herein which are defined in
the Indenture have the meanings assigned to them in the Indenture.
6. Optional Redemption by the Company. At any time on or after June 4,
2007, the Company may redeem the Securities on at least 20 days' notice as a
whole or, from time to time, in part at the following prices, expressed as a
percentage of the principal amount, together with accrued interest to, but
excluding, the date fixed for redemption:
Redemption
Period Price
------ ----------
Beginning June 4, 2007 and ending on May 31, 2008 ...................... 102.38%
Beginning June 1, 2008 and ending on May 31, 2009 ...................... 101.90%
Beginning June 1, 2009 and ending on May 31, 2010 ...................... 101.43%
Beginning June 1, 2010 and ending on May 31, 2011 ...................... 100.95%
Beginning June 1, 2011 and ending on May 31, 2012 ...................... 100.48%
Subject to Section 3 above, any accrued interest becoming due on the date fixed
for redemption will be payable to the holders of record on the relevant record
date of the Securities being redeemed.
7. Notice of Redemption. Notice of redemption pursuant to paragraph 6
will be mailed at least 20 days before the redemption date to each Holder of
Securities to be redeemed at its registered address. Securities in denominations
larger than $1,000 principal amount may be redeemed in part but only in whole
multiples of $1,000 principal amount. On and after the redemption date interest
ceases to accrue on Securities or portions of them called for redemption.
8. Repurchase at Option of Holder. Pursuant to Section 3.07 of the
Indenture within 10 Business Days after the Company becomes aware that a
Repurchase Event has occurred, the Company is required to give notice of the
Repurchase Event to the Holders. Each Holder has the right, at its option, to
require the Company to repurchase all or any portion of the Securities by
delivering notice on or before the 30th Business Day after the notice of
Repurchase Event is mailed. The Repurchase Price will be 100% of the principal
amount of the Securities submitted for repurchase, plus accrued and unpaid
interest to, but excluding, the Repurchase Date. If a Repurchase Date is an
interest payment date, then the interest payable on that date will be paid to
the holder of record on the
A-4
relevant record date. Subject to the conditions of Section 3.07 of the
Indenture, the Company, at its option, instead of paying the Repurchase Price in
cash, may pay the Repurchase Price in Common Stock, valued at 95% of the average
of the Closing Prices for the five Trading Days immediately before and including
the third Trading Day preceding the Repurchase Date.
9. Conversion. A Holder of a Security may convert the principal of
such Security into Common Stock at any time after the date of original issuance
of the Security to the close of business on the business day prior to June 1,
2012, or (x) if the Security is called for redemption by the Company, the Holder
may convert it at any time before the close of business on the date that is one
business day before the date fixed for such redemption, or (y) if a Holder
exercises its repurchase right, the right to convert the principal amount of the
Securities to be repurchased will terminate, unless and until it withdraws such
election. The initial Conversion Price is $9.88 per share of Common Stock,
subject to adjustment in certain circumstances as set forth in Section 10.06 of
the Indenture. To determine the number of shares issuable upon conversion of a
Security, divide each $1,000 of the principal amount to be converted by the
Conversion Price in effect on the conversion date and round the result to the
nearest 1/100th share. The Company is not required to issue fractional shares of
Common Stock upon conversion and, instead, will pay a cash amount as provided in
Section 10.03 of the Indenture. Except as provided in Article Ten of the
Indenture, no payment or adjustment for the principal of, premium, if any,
interest on or liquidated damages with respect to, the Securities so converted
or for dividends on any Common Stock will be made. If a Holder surrenders a
Security for conversion between the record date for the payment of interest and
the next interest payment date, such Security, when surrendered for conversion,
must be accompanied by payment of an amount equal to the interest thereon which
the registered Holder on such record date is to receive. A Security that the
Holder has elected to be repurchased may be converted only if the Holder
withdraws its election to have such Security repurchased in accordance with the
terms of the Indenture before the close of business on the business day prior to
the Repurchase Date.
To convert a Security a Holder must complete and sign the Conversion
Notice, with appropriate signature guarantee, on the back of the Security and
surrender the Security to a Conversion Agent, together with (1) the appropriate
endorsements and transfer documents if required by the Registrar or Conversion
Agent, (2) payment of the amount of interest, if any, the Holder may be paid as
provided in the last sentence of the above paragraph and (3) payment of any
transfer or similar tax if required. A Holder may convert a portion of a
Security if the portion is $1,000 principal amount or an integral multiple of
$1,000 principal amount.
Any shares issued upon conversion of a Security shall bear the Private
Placement Legend until after the second anniversary of the later of the issue
date for the Securities and the last date on which the Company or any Affiliate
of the Company was the owner of such shares or the Security (or any predecessor
security) from which such shares were converted (or such shorter period of time
as permitted by Rule 144(k) under the Securities Act or any successor provision
thereunder) (or such longer period of time as may be required under the
Securities Act or applicable state securities laws as set forth in the Opinion
of Counsel delivered to the Conversion Agent, unless otherwise agreed by the
Company and the Holder thereof).
10. Denominations, Transfer, Exchange. The Securities are in
registered form without coupons in denominations of $1,000 principal amount and
whole multiples of $1,000 principal amount. The transfer of Securities may be
registered and Securities may be exchanged as provided in the Indenture. The
Registrar may require a Holder, among other things, to furnish appropri-
A-5
ate endorsements and transfer documents. No service charge shall be made for any
such registration of transfer or exchange, but the Company may require payment
of a sum sufficient to cover any tax or other governmental charge payable in
connection therewith. The Registrar need not exchange or register the transfer
of any Security selected for redemption in whole or in part. Also, it need not
exchange or register the transfer of any Securities for a period of 15 days
before the mailing of a notice of redemption of the Securities selected to be
redeemed.
11. Persons Deemed Owners. The registered Holder of a Security may be
treated as the owner of such Security for all purposes.
12. Merger or Consolidation. The Company shall not consolidate with,
or merge into, or transfer or lease all or substantially all of its assets to,
any Person unless, among other things, the Person is organized under the laws of
the United States, any State thereof or the District of Columbia and such Person
assumes by supplemental indenture all the obligations of the Company under the
Securities, the Indenture and the Registration Rights Agreement and after giving
effect to the transaction no Default or Event of Default exists.
13. Amendments, Supplements and Waivers. Subject to certain
exceptions, the Indenture or the Securities may be amended or supplemented with
the consent of the Holders of at least a majority in aggregate principal amount
of the Securities then outstanding, and any existing Default or Event of Default
may be waived with the consent of the Holders of a majority in aggregate
principal amount of the Securities then outstanding. Without notice to or the
consent of any Holder, the Indenture or the Securities may be amended or
supplemented, among other things, to cure any ambiguity, omission, defect or
inconsistency, to provide for uncertificated Securities in addition to
certificated Securities, to comply with Sections 5.01 and 10.07 of the Indenture
or to make any change that does not adversely affect the rights of any Holder.
14. Defaults and Remedies. An Event of Default includes the occurrence
of any or the following: default in payment of the principal of or any premium
on the Securities; default for 30 days in payment of interest; failure by the
Company for 90 days after notice to it to comply with any of its other
agreements in the Indenture or the Securities; any indebtedness under any bonds,
debentures, notes or other evidences of indebtedness for money borrowed, or any
guarantee thereof, by the Company or any of its Significant Subsidiaries, in an
aggregate principal amount in excess of $50 million is not paid when due either
at its stated maturity or upon acceleration thereof, and such indebtedness is
not discharged, or such acceleration is not rescinded or annulled within a
period of 30 days after notice as provided in Section 6.01 of the Indenture; and
certain events of bankruptcy or insolvency. If any Event of Default occurs and
is continuing, the Trustee or the Holders of at least 25% in aggregate principal
amount of the Securities then outstanding may declare all the Securities to be
due and payable, subject to certain limitations contained in the Indenture.
Holders may not enforce the Indenture or the Securities except as provided in
the Indenture. The Trustee may require indemnity satisfactory to it before it
enforces the Indenture or the Securities. Subject to certain limitations,
Holders of a majority in principal amount of the Securities then outstanding may
direct the Trustee in its exercise of any trust or power. The Trustee may
withhold from Holders notice of any continuing Default or Event of Default
(except a Default or Event of Default in payment of principal or interest) if it
determines that withholding notice is in their interests. The Company must
furnish an annual compliance certificate to the Trustee.
A-6
15. Registration Rights. The Holders are entitled to shelf
registration rights as set forth in the Registration Rights Agreement. The
Holders shall be entitled to receive liquidated damages in certain
circumstances, all as set forth in the Registration Rights Agreement.
16. Trustee Dealings with Company. Except as provided in ss.77jjj of
the Act, the Trustee under the Indenture, or any banking institution serving as
successor Trustee thereunder, in its individual or any other capacity, may make
loans to, accept deposits from, and perform services for the Company or its
Affiliates, and may otherwise deal with the Company or its Affiliates, as if it
were not Trustee.
17. No Recourse Against Others. No past, present or future director,
officer, employee or shareholder, as such, of the Company shall have any
liability for any obligations of the Company under the Securities or the
Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation. Each Holder by accepting a Security waives and
releases all such liability. The waiver and release are part of the
consideration for the issue of the Securities.
18. Authentication. This Security shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating agent.
19. Abbreviations. Customary abbreviations may be used in the name of
a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entirety), JT TEN (= joint tenants with right of survivorship and
not as tenants in common), CUST (= Custodian), and U/G/M/A (Uniform Gifts to
Minors Act).
THE COMPANY WILL FURNISH TO ANY SECURITYHOLDER UPON WRITTEN REQUEST
AND WITHOUT CHARGE A COPY OF THE INDENTURE. REQUESTS MAY BE MADE TO:
CHARMING SHOPPES, INC.
000 Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxxx 00000
ATTENTION: Treasurer
A-7
[FORM OF ASSIGNMENT]
I or we assign to
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER
----------------------------------------
--------------------------------------------------------------------------------
(please print or type name and address)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
the within Security and all rights thereunder, and hereby irrevocably
constitutes and appoints
--------------------------------------------------------------------------------
attorney to transfer the Security on the books of the Company with full power of
substitution in the premises.
Dated:
---------------------------------- -----------------------------------
NOTICE: The signature on this
assignment must correspond with the
name as it appears upon the face of
the within Security in every
particular without alteration or
enlargement or any change
whatsoever and be guaranteed by the
endorser's bank or broker.
Signature Guarantee:
-----------------------------------------------------------
(Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include membership
or participation in the Security Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.)
In connection with any transfer of this Security occurring prior to
the date which is the earlier of (i) the date of the declaration by the
Commission of the effectiveness of a registration statement under the Securities
Act of 1933, as amended (the "Securities Act"), covering resales of this
Security (which effectiveness shall not have been suspended or terminated at the
date of the transfer) and (ii) the date that the undersigned confirms that it
has not utilized any general solicitation or general advertising in connection
with such transfer and that such transfer is being made:
A-8
[Check One]
(1) ____ to the Company or a subsidiary thereof; or
(2) ____ pursuant to and in compliance with Rule 144A under the Securities
Act of 1933, as amended; or
(3) ____ to an institutional "accredited investor" (as defined in Rule 501(a)
(1), (2), (3) or (7) under the Securities Act of 1933, as amended)
that has furnished to the Trustee a signed letter containing certain
representations and agreements (the form of which letter can be
obtained from the Trustee); or
(4) ____ outside the United States to a "foreign purchaser" in compliance
with Rule 904 of Regulation S under the Securities Act of 1933, as
amended; or
(5) ____ pursuant to the exemption from registration provided by Rule 144
under the Securities Act of 1933, as amended; or
(6) ____ pursuant to an effective registration statement under the Securities
Act of 1933, as amended; or
(7) ____ pursuant to another available exemption from the registration
statement requirements of the Securities Act of 1933, as amended.
and unless the box below is checked, the undersigned confirms that such Security
is not being transferred to an "affiliate" of the Company as defined in Rule 144
under the Securities Act of 1933, as amended (an "Affiliate"):
[ ] The transferee is an Affiliate of the Company.
(If the Security is transferred to an Affiliate, the restrictive legend must
remain on the Security for two years following the date of the transfer).
Unless one of the items is checked, the Trustee will refuse to
register any of the Securities evidenced by this certificate in the name of any
Person other than the registered Holder thereof; provided, however, that if item
(3),(4),(5) or (7) is checked, the Company or the Trustee may require, prior to
registering any such transfer of the Securities, in their sole discretion, such
written legal opinions, certifications (including an investment letter in the
case of item (3) or (4)) and other information as the Trustee or the Company
have reasonably requested to confirm that such transfer is being made pursuant
to an exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act of 1933, as amended.
If none of the foregoing items are checked, the Trustee or Registrar
shall not be obligated to register this Security in the name of any Person other
than the Holder hereof unless and until the conditions to any such transfer of
registration set forth herein and in Section 2.16 of the Indenture shall have
been satisfied.
A-9
Dated: Signed:
---------------------------- ---------------------------------
(Sign exactly as name appears on
the other side of this Security)
Signature Guarantee:
------------------------------------------------------------
TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED
The undersigned represents and warrants that it is purchasing this
Security for its own account or an account with respect to which it exercises
sole investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act of
1933, as amended, and is aware that the sale to it is being made in reliance on
Rule 144A and acknowledges that it has received such information regarding the
Company as the undersigned has requested pursuant to Rule 144A or has determined
not to request such information and that it is aware that the transferor is
relying upon the undersigned's foregoing representations in order to claim the
exemption from registration provided by Rule 144A.
Dated:
---------------------------- ----------------------------------------
NOTICE: To be executed by an
executive officer
Signature Guarantee:
------------------------------------------------------------
A-10
CONVERSION NOTICE
To convert this Security into Common Stock of the Company, check the box:
[ ]
To convert only part of this Security, state the principal amount to be
converted (must be in multiples of $1,000):
$
-------------------------------------------------------------------------------
If you want the stock certificate made out in another person's name, fill in the
form below:
--------------------------------------------------------------------------------
(Insert other person's soc. sec. or tax I.D. no.)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Print or type other person's name, address and zip code)
---------------------------------------------------------------
Date: Signature(s):
--------------- --------------------------------------------
--------------------------------------------
(Signatures must be guaranteed by an
"eligible guarantor institution" meeting the
requirements of the Registrar, which
requirements include membership or
participation in the Security Transfer Agent
Medallion Program ("STAMP") or such other
"signature guarantee program" as may be
determined by the Registrar in addition to,
or in substitution for, STAMP, all in
accordance with the Securities Exchange Act
of 1934, as amended.)
A-11
Signature(s) guaranteed by:
-----------------------------------------------------
(Signatures must be guaranteed by an "eligible
guarantor institution" meeting the requirements of
the Registrar, which requirements include membership
or participation in the Security Transfer Agent
Medallion Program ("STAMP") or such other "signature
guarantee program" as may be determined by the
Registrar in addition to, or in substitution for,
STAMP, all in accordance with the Securities Exchange
Act of 1934, as amended.)
A-12
OPTION OF HOLDER TO ELECT PURCHASE NOTICE
If you want to elect to have this Security purchased by the Company
pursuant to Section 3.07 of the Indenture, check the box: [ ]
If you want to elect to have only part of this Security purchased by
the Company pursuant to Section 3.07 of the Indenture, state the principal
amount:
$
-----------------------------------
(in an integral multiple of $1,000)
Date: Signature(s):
--------------------- ---------------------------
----------------------------------------
(Sign exactly as your name(s) appear(s)
on the other side of this Security)
Signature(s) guaranteed by:
----------------------------------------
(Signatures must be guaranteed by an
"eligible guarantor institution" meeting
the requirements of the Registrar, which
requirements include membership or
participation in the Security Transfer
Agent Medallion Program ("STAMP") or
such other "signature guarantee program"
as may be determined by the Registrar in
addition to, or in substitution for,
STAMP, all in accordance with the
Securities Exchange Act of 1934, as
amended.)
A-13
EXHIBIT B
---------
FORM OF LEGENDS
I. PRIVATE PLACEMENT LEGEND
Each Security issued under the Indenture shall bear a legend (and any
common stock issued upon conversion of such Security shall bear a comparable
legend) substantially in the following form:
THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THIS SECURITY AND THE
SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION HEREOF MAY NOT BE OFFERED,
SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS SECURITY IS HEREBY
NOTIFIED THAT THE SELLER OF THIS SECURITY MAY BE RELYING ON THE EXEMPTION
FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE
144A THEREUNDER.
THIS SECURITY (OR ITS PREDECESSOR) MAY NOT BE OFFERED OR SOLD WITHIN
THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS,
EXCEPT AS SET FORTH BELOW. BY ITS ACQUISITION HEREOF, THE HOLDER (1)
REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT) OR (B) IT IS NOT A U.S. PERSON AND IS
ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE
904 UNDER THE SECURITIES ACT, (2) AGREES THAT IT WILL NOT WITHIN TWO YEARS
AFTER THE ORIGINAL ISSUANCE OF THIS SECURITY RESELL OR OTHERWISE TRANSFER
THIS SECURITY EXCEPT (A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, (B)
INSIDE THE UNITED STATES TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE
WITH RULE 144A UNDER THE SECURITIES ACT, (C) OUTSIDE THE UNITED STATES IN
AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES
ACT, (D) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144
UNDER THE SECURITIES ACT (IF AVAILABLE), (E) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR (F) PURSUANT TO ANOTHER
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT, (3) PRIOR TO ANY TRANSFER (OTHER THAN A TRANSFER PURSUANT TO CLAUSE
2(E) ABOVE), WILL FURNISH TO WACHOVIA BANK, NATIONAL ASSOCIATION, AS
TRUSTEE (OR A SUCCESSOR TRUSTEE, AS APPLICABLE), SUCH CERTIFICATIONS,
B-1
LEGAL OPINIONS OR OTHER INFORMATION AS THE TRUSTEE OR CHARMING SHOPPES MAY
REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO
AN EXEMPTION FROM, OR IN A TRANSACTTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT, AND (4) AGREES THAT IT WILL GIVE TO
EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO
THE EFFECT OF THIS LEGEND IN CONNECTION WITH ANY TRANSFER OF THIS SECURITY
WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THIS SECURITY. IN ANY CASE,
THE HOLDER HEREOF WILL NOT, DIRECTLY OR INDIRECTLY, ENGAGE IN ANY HEDGING
TRANSACTION WITH REGARD TO THIS SECURITY OR ANY COMMON STOCK ISSUABLE UPON
CONVERSION OF THIS SECURITY EXCEPT AS PERMITTED BY THE SECURITIES ACT. AS
USED HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S.
PERSON" HAVE THE MEANING GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES
ACT. THE INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO
REGISTER ANY TRANSFER OF THIS SECURITY IN VIOLATION OF THE FOREGOING
RESTRICTIONS.
B-2
II. GLOBAL SECURITY LEGEND
Any Global Security authenticated and delivered hereunder shall bear a
legend (which would be in addition to any other legends required in the case of
a Restricted Security) in substantially the following form:
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A
NOMINEE OF A DEPOSITARY OR A SUCCESSOR DEPOSITARY. THIS SECURITY IS NOT
EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN
THE DEPOSITARY OR ITS NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED
IN THE INDENTURE, AND NO TRANSFER OF THIS SECURITY (OTHER THAN A TRANSFER
OF THIS SECURITY AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE
DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER
NOMINEE OF THE DEPOSITARY) MAY BE REGISTERED EXCEPT IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITARY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE
COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND
ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF
OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL
SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE
RESTRICTIONS SET FORTH IN SECTION 2.16 OF THE INDENTURE.
B-3
EXHIBIT C
---------
Form of Certificate To Be Delivered
in Connection with Transfers
Pursuant to Regulation S
-----------------------------------
[Date]
Wachovia Bank, National Association
000 Xxxxx Xxxxx Xxxxxx
Xxxx XX 1249
Xxxxxxxxxxxx, XX 00000
Attention: Corporate Trust Administration
Re: Charming Shoppes, Inc. (the "Company")
4.75% Senior Convertible Notes
due 2012 (the "Securities")
--------------------------------------
Ladies and Gentlemen:
In connection with our proposed purchase of $[ ] aggregate principal
amount of the Securities, we confirm that such purchase has been effected
pursuant to and in accordance with Regulation S under the U.S. Securities Act of
1933, as amended (the "Securities Act"), and, accordingly, we represent that:
(1)/a/ [We are not a U.S. person and are not acquiring the Securities
for the account or benefit of any U.S. person]. [We are a U.S. person who
purchased securities in a transaction that did not require registration
under the Act.]
(2) We agree to resell the Securities only in accordance with the
provisions of Regulation S, pursuant to registration under the Securities
Act, or pursuant to an available exemption from registration; and we agree
not to engage in hedging transactions with regard to such securities unless
in compliance with the Securities Act.
-----------------------------------
/a/ One of the two following sentences must be used.
C-1
You, the Company and counsel for the Company are entitled to rely upon
this letter and are irrevocably authorized to produce this letter or a copy
hereof to any interested party in any administrative or legal proceedings or
official inquiry with respect to the matters covered hereby. Terms used in this
certificate have the meanings set forth in Regulation S.
Very truly yours,
[Name of Transferor]
By:
--------------------------------------
Authorized Signature
C-2
EXHIBIT D
---------
Form of Notice of Transfer Pursuant to Registration Statement
-------------------------------------------------------------
[Date]
Charming Shoppes, Inc.
000 Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxxx 00000
Wachovia Bank, National Association
000 Xxxxx Xxxxx Xxxxxx
Xxxx XX 1249
Xxxxxxxxxxxx, XX 00000
Attention: Corporate Trust Administration
Re: Charming Shoppes, Inc. (the "Company")
4.75% Senior Convertible Notes Due 2012
(the "Securities")
---------------------------------------
Ladies and Gentlemen:
Please be advised that _____________ has transferred $___________
aggregate principal amount of the Securities or __ shares of the Company's
common stock, $.001 par value per share, issuable on conversion of the
Securities ("Stock") pursuant to an effective Shelf Registration Statement on
Form S-3 (File No. 333- ) filed by the Company.
We hereby certify that the prospectus delivery requirements, if any,
of the Securities Act of 1933 as amended, have been satisfied with respect to
the transfer described above and that the above-named beneficial owner of the
Securities or Stock is named as a "Selling Security Holder" in the Prospectus
dated or in amendments or supplements thereto, and that the aggregate
principal amount of the Securities, or number of shares of Stock transferred are
[a portion of] the Securities or Stock listed in such Prospectus, as amended or
supplemented, opposite such owner's name.
Very truly yours,
-----------------------------------------
(Name)
D-1
EXHIBIT E
---------
Form of Opinion of Counsel in Connection with Registration of Securities
------------------------------------------------------------------------
[Date]
Wachovia Bank, National Association
000 Xxxxx Xxxxx Xxxxxx
Xxxx XX 1249
Xxxxxxxxxxxx, XX 00000
Attention: Corporate Trust Administration
Re: Charming Shoppes, Inc. (the "Company")
4.75% Senior Convertible Notes Due 2012
(the "Securities")
---------------------------------------
Ladies and Gentlemen:
Reference is made to the Securities issued pursuant to a certain
indenture dated as of May 28, 2002 by and between the Company and Wachovia Bank,
National Association, as trustee (the "Trustee"). The Securities were issued in
transactions exempt from registration under the Securities Act of 1933, as
amended (the "Securities Act"). The Company has filed with the Securities and
Exchange Commission (the "SEC") a registration statement on Form S-3 (number
333-____) (the "Registration Statement") relating to the registration under the
Securities Act of $[ ] principal amount of the Securities and the shares of
Common Stock of the Company (the "Shares") issuable upon conversion of the
Securities being registered.
We have acted as counsel for the Company in connection with the
issuance of the Securities and the preparation and filing of the Registration
Statement and are familiar with the Securities, the Indenture, the Registration
Statement and such other documents as are necessary to render this opinion.
We have been orally advised by the SEC that the Indenture has been
qualified under the Trust Indenture Act of 1939, as amended, and that the
Registration Statement was declared effective under the Securities Act at _____,
on ____________, 200_, and we have been orally advised by the SEC that no stop
order suspending the effectiveness of the Registration Statement has been issued
and, to the best of our knowledge, no proceedings for that purpose have been
instituted or are pending or threatened by the SEC.
E-1
This opinion is being furnished only to you in connection with the
Indenture and is solely for your benefit and is not to be used, circulated,
quoted or otherwise referred to for any other purpose or relied upon by any
other person for any other purpose without our prior written consent.
Yours truly,
E-2
