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Exhibit 4.5
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KTI, INC.
Issuer
8 3/4% CONVERTIBLE SUBORDINATED NOTES DUE 2004
INDENTURE
Dated as of May 12, 1998
FIRST UNION NATIONAL BANK
Trustee
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CROSS-REFERENCE TABLE*
Trust Indenture Indenture Section
Act Section
310(a)(1).................................................. 7.10
(a)(2).................................................. 7.10
(a)(3).................................................. N.A.
(a)(4).................................................. N.A.
(a)(5).................................................. 7.10
(b)..................................................... 7.10
(c)..................................................... N.A.
311(a)..................................................... 7.11
(b)..................................................... 7.11
(c)..................................................... N.A.
312(a)..................................................... 2.5
(b)..................................................... 11.3
(c)..................................................... 11.3
313(a)..................................................... 7.6
(b)(1).................................................. 10.3
(b)(2).................................................. 7.7
(c)..................................................... 7.6;11.2
(d)..................................................... 7.6
314(a)..................................................... 4.3;11.2
(b)..................................................... 10.2
(c)(1).................................................. 11.4
(c)(2).................................................. 11.4
(c)(3).................................................. N.A.
(d)..................................................... 10.3, 10.4, 10.5
(e)..................................................... 11.5
(f)..................................................... N.A.
315(a)..................................................... 7.1
(b)..................................................... 7.5,11.2
(c)..................................................... 7.1
(d)..................................................... 7.1
(e)..................................................... 6.11
316(a)(last sentence)...................................... 2.9
(a)(1)(A)............................................... 6.5
(a)(1)(B)............................................... 6.4
(a)(2).................................................. N.A.
(b)..................................................... 6.7
(c)..................................................... 2.12
317(a)(1).................................................. 6.8
(a)(2).................................................. 6.9
(b)..................................................... 2.4
318(a)..................................................... 11.1
(b)..................................................... N.A.
(c)..................................................... 11.1
N.A. means not applicable.
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*This Cross-Reference Table is not part of the Indenture.
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TABLE OF CONTENTS
Page
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ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE..............................-1-
SECTION 1.1. DEFINITIONS...............................................-1-
SECTION 1.2. OTHER DEFINITIONS.........................................-6-
SECTION 1.3. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.........-6-
SECTION 1.4. RULES OF CONSTRUCTION.....................................-6-
ARTICLE 2
THE NOTES...............................-7-
SECTION 2.1. FORM AND DATING...........................................-7-
SECTION 2.2. EXECUTION AND AUTHENTICATION..............................-8-
SECTION 2.3. REGISTRAR AND PAYING AGENT................................-8-
SECTION 2.4. PAYING AGENT TO HOLD MONEY IN TRUST.......................-9-
SECTION 2.5. HOLDER LISTS..............................................-9-
SECTION 2.6. TRANSFER AND EXCHANGE.....................................-9-
SECTION 2.7. REPLACEMENT NOTES........................................-11-
SECTION 2.8. OUTSTANDING NOTES........................................-12-
SECTION 2.9. TREASURY NOTES...........................................-12-
SECTION 2.10. TEMPORARY NOTES.........................................-12-
SECTION 2.11. CANCELLATION............................................-13-
SECTION 2.12. DEFAULTED INTEREST......................................-13-
ARTICLE 3
REDEMPTION AND PREPAYMENT......................-13-
SECTION 3.1. NOTICES TO TRUSTEE.......................................-13-
SECTION 3.2. SELECTION OF NOTES TO BE REDEEMED........................-13-
SECTION 3.3. NOTICE OF REDEMPTION.....................................-14-
SECTION 3.4. EFFECT OF NOTICE OF REDEMPTION...........................-14-
SECTION 3.5. DEPOSIT OF REDEMPTION PRICE..............................-15-
SECTION 3.6. NOTES REDEEMED IN PART...................................-15-
SECTION 3.7. OPTIONAL REDEMPTION......................................-15-
SECTION 3.8. NO MANDATORY REDEMPTION..................................-16-
ARTICLE 4
COVENANTS..............................-16-
SECTION 4.1. PAYMENT OF NOTES.........................................-16-
SECTION 4.2. MAINTENANCE OF OFFICE OR AGENCY..........................-16-
SECTION 4.3. REPORTS..................................................-17-
SECTION 4.4. COMPLIANCE CERTIFICATE...................................-17-
SECTION 4.5. TAXES....................................................-18-
SECTION 4.6. STAY, EXTENSION AND USURY LAWS...........................-18-
SECTION 4.7. CORPORATE EXISTENCE......................................-18-
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SECTION 4.8. OFFER TO REPURCHASE UPON CHANGE OF CONTROL...............-18-
ARTICLE 5
SUCCESSORS..............................-20-
SECTION 5.1. MERGER, CONSOLIDATION, OR SALE OF ASSETS.................-20-
SECTION 5.2. SUCCESSOR CORPORATION SUBSTITUTED........................-20-
ARTICLE 6
DEFAULTS AND REMEDIES........................-20-
SECTION 6.1. EVENTS OF DEFAULT........................................-20-
SECTION 6.2. ACCELERATION.............................................-21-
SECTION 6.3. OTHER REMEDIES...........................................-22-
SECTION 6.4. WAIVER OF PAST DEFAULTS..................................-22-
SECTION 6.5. CONTROL BY MAJORITY......................................-22-
SECTION 6.6. LIMITATION ON SUITS......................................-22-
SECTION 6.7. RIGHTS OF HOLDERS OF NOTES TO RECEIVE PAYMENT............-23-
SECTION 6.8. COLLECTION SUIT BY TRUSTEE...............................-23-
SECTION 6.9. TRUSTEE MAY FILE PROOFS OF CLAIM.........................-23-
SECTION 6.10. PRIORITIES..............................................-24-
SECTION 6.11. UNDERTAKING FOR COSTS...................................-24-
ARTICLE 7
TRUSTEE...............................-24-
SECTION 7.1. DUTIES OF TRUSTEE........................................-24-
SECTION 7.2. RIGHTS OF TRUSTEE........................................-25-
SECTION 7.3. INDIVIDUAL RIGHTS OF TRUSTEE.............................-26-
SECTION 7.4. TRUSTEE'S DISCLAIMER.....................................-26-
SECTION 7.5. NOTICE OF DEFAULTS.......................................-26-
SECTION 7.6. REPORTS BY TRUSTEE TO HOLDERS OF THE NOTES...............-26-
SECTION 7.7. COMPENSATION AND INDEMNITY...............................-27-
SECTION 7.8. REPLACEMENT OF TRUSTEE...................................-28-
SECTION 7.9. SUCCESSOR TRUSTEE BY MERGER, ETC.........................-29-
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION...........................-29-
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.......-29-
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE...............-29-
SECTION 8.1. OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT
DEFEASANCE...........................................-29-
SECTION 8.2. LEGAL DEFEASANCE AND DISCHARGE...........................-29-
SECTION 8.3. COVENANT DEFEASANCE......................................-30-
SECTION 8.4. CONDITIONS TO LEGAL OR COVENANT DEFEASANCE...............-30-
SECTION 8.5. DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE
HELD IN TRUST; OTHER MISCELLANEOUS PROVISIONS........-31-
SECTION 8.6. REPAYMENT TO COMPANY.....................................-32-
SECTION 8.7. REINSTATEMENT............................................-32-
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER...................-32-
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SECTION 9.1. WITHOUT CONSENT OF HOLDERS OF NOTES......................-32-
SECTION 9.2. WITH CONSENT OF HOLDERS OF NOTES.........................-33-
SECTION 9.3. COMPLIANCE WITH TRUST INDENTURE ACT......................-34-
SECTION 9.4. REVOCATION AND EFFECT OF CONSENTS........................-34-
SECTION 9.5. NOTATION ON OR EXCHANGE OF NOTES.........................-34-
SECTION 9.6. TRUSTEE TO SIGN AMENDMENTS, ETC..........................-35-
.......................................................................-35-
ARTICLE 10
SUBORDINATION............................-35-
SECTION 10.1. AGREEMENT TO SUBORDINATE................................-35-
SECTION 10.2. LIQUIDATION; DISSOLUTION; BANKRUPTCY....................-35-
SECTION 10.3. DEFAULT ON SENIOR DEBT..................................-35-
SECTION 10.4. ACCELERATION OF NOTES...................................-36-
SECTION 10.5. WHEN DISTRIBUTION MUST BE PAID OVER.....................-36-
SECTION 10.6. NOTICE BY COMPANY.......................................-37-
SECTION 10.7. SUBROGATION.............................................-37-
SECTION 10.8. RELATIVE RIGHTS.........................................-37-
SECTION 10.9. SUBORDINATION MAY NOT BE IMPAIRED BY COMPANY............-37-
SECTION 10.10. DISTRIBUTION OR NOTICE TO REPRESENTATIVE...............-38-
SECTION 10.11. RIGHTS OF TRUSTEE AND PAYING AGENT.....................-38-
SECTION 10.12. AUTHORIZATION TO EFFECT SUBORDINATION..................-38-
SECTION 10.13. AMENDMENTS.............................................-38-
ARTICLE 11
CONVERSION OF NOTES.........................-39-
SECTION 11.1. RIGHT TO CONVERT........................................-39-
SECTION 11.2. EXERCISE OF CONVERSION PRIVILEGE; ISSUANCE OF
COMMON STOCK ON CONVERSION; NO ADJUSTMENT FOR
INTEREST OR DIVIDENDS................................-39-
SECTION 11.3. CASH PAYMENTS IN LIEU OF FRACTIONAL SHARES..............-40-
SECTION 11.4. CONVERSION PRICE........................................-41-
SECTION 11.5. ADJUSTMENT OF CONVERSION PRICE..........................-41-
SECTION 11.6. EFFECT OF RECLASSIFICATION, CONSOLIDATION, MERGER OR
SALE.................................................-44-
SECTION 11.7. TAXES ON SHARES ISSUED..................................-45-
SECTION 11.8. RESERVATION OF SHARES; SHARES TO BE FULLY PAID; LISTING
OF COMMON STOCK......................................-45-
SECTION 11.9. COMMON STOCK ISSUABLE UPON CONVERSION...................-45-
SECTION 11.10. RESPONSIBILITY OF TRUSTEE..............................-45-
SECTION 11.11. NOTICE TO HOLDERS PRIOR TO CERTAIN ACTIONS.............-46-
ARTICLE 12
MISCELLANEOUS............................-46-
SECTION 12.1. TRUST INDENTURE ACT CONTROLS............................-46-
SECTION 12.2. NOTICES.................................................-46-
SECTION 12.3. COMMUNICATION BY HOLDERS OF NOTES WITH OTHER
HOLDERS OF NOTES.....................................-48-
SECTION 12.4. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT......-48-
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SECTION 12.5. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION...........-48-
SECTION 12.6. RULES BY TRUSTEE AND AGENTS.............................-49-
SECTION 12.7. NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES
AND SHAREHOLDERS.....................................-49-
SECTION 12.8. GOVERNING LAW...........................................-49-
SECTION 12.9. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS...........-49-
SECTION 12.10. SUCCESSORS.............................................-49-
SECTION 12.11. SEVERABILITY...........................................-49-
SECTION 12.12. COUNTERPART ORIGINALS..................................-49-
SECTION 12.13. TABLE OF CONTENTS, HEADINGS, ETC.......................-49-
EXHIBITS
Exhibit A Form of Note................................................A 1
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This Indenture, dated as of May 12, 1998 is between KTI, Inc., a New
Jersey corporation (the "Company"), and First Union National Bank, as trustee
(the "Trustee").
The Company and the Trustee agree as follows for the benefit of each other
and for the equal and ratable benefit of the Holders of the 8 3/4% Convertible
Subordinated Notes due August 15, 2004 (the "Notes"):
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
SECTION 1.1. DEFINITIONS.
"Affiliate" of any specified Person means an "affiliate" of such Person,
as such term is defined for purposes of Rule 144 under the Securities Act.
"Agent" means any Registrar, Paying Agent or co-registrar.
"Applicable Procedures" means, with respect to any transfer or exchange of
beneficial interests in a Global Note, the rules and procedures of the
Depository that apply to such transfer and exchange.
"Bankruptcy Law" means Xxxxx 00, Xxxxxx Xxxxxx Code, or any similar
federal or state law for the relief of debtors.
"Board of Directors" means the Board of Directors of the Company, or any
authorized committee of the Board of Directors.
"Business Day" means any day other than a Legal Holiday.
"Capital Stock" means (a) in the case of a corporation, corporate stock,
(b) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated) of
corporate stock, (c) in the case of a partnership or limited liability company,
partnership or membership interests (whether general or limited) and (d) any
other interest or participation that confers on a Person the right to receive a
share of the profits and losses of, or distributions of assets of, the issuing
Person.
"Change of Control" means the occurrence of any of the following: (a) the
sale, lease, transfer, conveyance or other disposition (other than by way of
merger or consolidation), in one transaction or a series of related
transactions, of all or substantially all of the assets of the Company and its
Subsidiaries, taken as a whole, (b) the adoption of a plan relating to the
liquidation or dissolution of the Company, (c) the consummation of any
transaction (including, without limitation, any merger or consolidation) the
result of which is that any "person" or "group" (as such terms are used in
Section 13(d)(3) of the Exchange Act), other than a group including any one of
Xxxxxxxx Xxxxxxx Xx., Xxxxxx Xxxxx or Xxxx Xxxxxxxx, becomes the "beneficial
owner" (as such term is defined in Rule 13d-3 and Rule 13d-5 under the Exchange
Act), directly or indirectly through one or more intermediaries, of more than
50% of the voting power of the outstanding voting stock of the Company, unless
the Closing Price per share of Common Stock for any five Trading Days within the
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period of ten consecutive Trading Days ending immediately after the announcement
of such Change of Control equals or exceeds 105% of the Conversion Price in
effect on each such Trading Day, or (d) the first day on which more than a
majority of the Board of Directors are not Continuing Directors; provided,
however, that a transaction in which the Company becomes a subsidiary of another
entity shall not constitute a Change of Control if (i) the shareholders of the
Company immediately prior to such transaction "beneficially own" (as such term
is defined in Rule 13d-3 and Rule 13d-5 under the Exchange Act), directly or
indirectly through one or more intermediaries, at least a majority of the voting
power of the outstanding voting stock of the Company immediately following the
consummation of such transaction and (ii) immediately following the consummation
of such transaction, no "person" or "group" (as such terms are defined above),
other than such other entity (but including holders of equity interests of such
other entity), "beneficially owns" (as such term is defined above), directly or
indirectly through one or more intermediaries, more than 50% of the voting power
of the outstanding voting stock of the Company.
"Closing Price" means, for each Trading Day, the last reported sale price
regular way on the principal exchange, including the NASDAQ National Market, on
which the applicable security is listed or quoted or, if the applicable security
is not so listed or quoted, the average of the closing bid and asked prices in
the over-the-counter market as furnished by any New York Stock Exchange member
firm selected from time to time by the Company for that purpose. In the event
that the Closing Price cannot be determined as aforesaid, the Board of Directors
of the Company shall determine the Closing Price on the basis of such quotations
as it in good faith considers appropriate.
"Common Stock" means the common stock, no par value, of the Company, and
any other capital stock of the Company into which such common stock may be
converted or reclassified or that may be issued in respect of, in exchange for,
or in substitution for such common stock by reason of any stock splits, stock
dividends, distributions, mergers, consolidations or other like events.
"Continuing Directors" means, as of any date of determination, any member
of the Board of Directors of the Company who (a) was a member of the Board of
Directors on the date of original issuance of the Preferred Stock or (b) was
nominated for election to the Board of Directors with the approval of, or whose
election to the Board of Directors was ratified by, at least two- thirds of the
Continuing Directors who were members of the Board of Directors at the time of
such nomination or election.
"Conversion Price" means the conversion price of the Notes as set forth in
Section 11.4 hereof.
"Corporate Trust Office of the Trustee" shall be at the address of the
Trustee specified in Section 12.2 hereof or such other address as to which the
Trustee may give notice to the Company.
"Credit Facility" means that certain line of credit pursuant to a Loan and
Security Agreement, dated as of October 29, 1996, as amended from time to time
by and between the Company, its Subsidiaries and KeyBank, National Association,
including any related notes, guarantees, collateral documents, instruments and
agreements executed in connection therewith, in each case as amended, restated,
modified, supplemented, extended, renewed, replaced, refinanced or restructured
from time to time, whether by the same or any other agent or agents, lender or
group of lenders, whether represented by one or more agreements and whether one
or more Subsidiaries are added or removed as borrowers or guarantors thereunder
or as parties thereto.
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"Default" means any event that with the passage of time or the giving of
notice or both would be an Event of Default.
"Definitive Notes" means Notes that are in the form of Exhibit A attached
hereto (but without including the text referred to in footnotes 1 and 2
thereto).
"Depository" means, with respect to the Notes issuable or issued in whole
or in part in global form, the Person specified in Section 2.3 hereof as the
Depository with respect to the Notes until a successor shall have been appointed
and become such pursuant to the applicable provision of this Indenture, and,
thereafter, "Depository" shall mean or include such successor.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Fair Market Value" means the amount that a willing buyer would pay a
willing seller in an arm's-length transaction.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of the accounting
profession, which are in effect on the date of this Indenture.
"Global Note" means a permanent global debenture that contains the
paragraph referred to in footnote 1 and the additional schedule referred to in
footnote 2 to the form of the Note attached hereto as Exhibit A, and that is
deposited with the Note Custodian and registered in the name of the Depository.
"Government Securities" means direct obligations of, or obligations
guaranteed by, the United States of America for the payment of which guarantee
or obligations the full faith and credit of the United States is pledged.
"Holder" means a Person in whose name a Note is registered.
"Indebtedness" means any indebtedness, whether or not contingent, in
respect of borrowed money or evidenced by bonds, notes, debentures or similar
instruments or letters of credit (or reimbursement agreements in respect
thereof) or banker's acceptances or representing capital lease obligations or
the balance deferred and unpaid of the purchase price of any property or
representing any hedging obligations, except any such balance that constitutes
an accrued expense or trade payable, if and to the extent any of the foregoing
indebtedness (other than letters of credit and hedging obligations) would appear
as a liability upon a balance sheet prepared in accordance with GAAP.
"Indenture" means this Indenture, as amended or supplemented from time to
time.
"Indirect Participant" means a Person who holds an interest through a
Participant.
"Institutional Accredited Investor" means an "accredited investor" as
defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act.
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"Junior Securities" means all classes of Common Stock of the Company and
each other class of capital stock or series of preferred stock established after
July 1, 1997 by the Board of Directors the terms of which do not expressly
provide that it ranks senior to or on a parity with the Preferred Stock as to
dividend distributions and distributions upon the liquidation, winding-up and
dissolution of the Company.
"Legal Holiday" means a Saturday, a Sunday or any day on which banking
institutions in the City of New York or at a place of payment are authorized by
law, regulation or executive order to remain closed. 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 additional interest
shall be payable on such day for the intervening period.
"Lien" means any mortgage, lien, pledge, charge, security interest or
encumbrance of any kind, whether or not filed, recorded or otherwise perfected
under applicable law (including any conditional sale or other title retention
agreement, any lease intended as security, any option or other agreement to sell
or give any financing statement under the Uniform Commercial Code (or equivalent
statutes) of any jurisdiction other than a financing statement covering leased
goods under lease not intended as security).
"Note Custodian" means the Trustee, as custodian with respect to the Notes
in global form, or any successor entity thereto.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"Offering" means the offering of the Preferred Stock by the Company.
"Officer" means, with respect to any Person, the Chairman of the Board,
the Chief Executive Officer, the President, the Chief Operating Officer, the
Chief Financial Officer, the Treasurer, any Assistant Treasurer, the Controller,
the Secretary or any Vice-President of such Person.
"Officers' Certificate" means a certificate signed on behalf of the
Company by two Officers of the Company, one of whom must be the principal
executive officer, the principal financial officer, the treasurer or the
principal accounting officer of the Company, that meets the requirements of
Section 12.5 hereof.
"Opinion of Counsel" means an opinion from legal counsel who is reasonably
acceptable to the Trustee.
"Participant" means with respect to the Depository, a Person who has an
account with the Depository.
"Person" means any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization or government or agency or political subdivision thereof (including
any subdivision or ongoing business of any such entity or substantially all of
the assets of any such entity, subdivision or business).
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"Preferred Stock" means the 8 3/4% Series B Convertible Exchangeable
Preferred Stock, which may be exchanged by the Company for the Notes.
"Registration Rights Agreement" means the Registration Rights Agreement,
dated as of August 7,1997, by and between the Company and Credit Research &
Trading LLC, as such agreement may be amended, modified or supplemented from
time to time.
"Responsible Officer," when used with respect to the Trustee, means any
officer within the Corporate Trust Administration of the Trustee (or any
successor group of the Trustee) or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of his knowledge of
and familiarity with the particular subject.
"Restated Certificate of Incorporation" means the amendment to the
restated certificate of incorporation duly filed with the Secretary of State of
the State of New Jersey on August 8, 1997 with respect to the Preferred Stock.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Debt" means (a) all obligations of the Company under the Credit
Facility, as it may be amended, modified, restated, supplemented, deferred,
extended, renewed, replaced, refunded or refinanced from time to time, and (b)
any other Indebtedness of the Company, whether outstanding on the date of
issuance of the Notes or thereafter incurred, unless the instrument under which
such Indebtedness is incurred expressly provides that it is subordinated in
right of payment to any Senior Debt; provided, however, that Senior Debt will
not include (i) any liability for federal, state, local or other taxes owed or
owing by the Company, (ii) any Indebtedness of the Company to any of its
Subsidiaries or (iii) any trade payables.
"Significant Subsidiary" means any Subsidiary that would be a "significant
subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated
pursuant to the Securities Act, as such Regulation is in effect on the date
hereof.
"Subsidiary" means, with respect to any Person, (a) any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of Capital Stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by such
Person or one or more of the other Subsidiaries of that Person (or a combination
thereof) and (b) any partnership (i) the sole general partner or the managing
general partner of which is such Person or a Subsidiary of such Person or (ii)
the only general partners of which are such Person or of one or more
Subsidiaries of such Person (or any combination thereof).
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. Sections
77aaa-77bbbb) as in effect on the date on which this Indenture is qualified
under the TIA.
"Trading Day" means any day on which the NASDAQ National Market or other
applicable stock exchange or market on which the Common Stock is listed or
quoted is open for business.
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"Trustee" means the party named as such above until a successor replaces
it in accordance with the applicable provisions of this Indenture and thereafter
means the successor serving hereunder.
SECTION 1.2. OTHER DEFINITIONS.
Defined in
Term Section
---- -------
"Change of Control Offer" .................... 4.8
"Change of Control Payment"................... 4.8
"Change of Control Payment Date".............. 4.8
"Conversion Date"............................. 11.2
"Conversion Price"............................ 11.4
"Covenant Defeasance"......................... 8.3
"DTC"......................................... 2.3
"Event of Default"............................ 6.1
"Legal Defeasance"............................ 8.2
"Paying Agent"................................ 2.3
"Payment Default"............................. 6.1
"Payment Blockage Notice"..................... 10.3
"Registrar"................................... 2.3
"Representative".............................. 10.5
SECTION 1.3. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture. Any terms
incorporated in this Indenture that are defined by the TIA, defined by TIA
reference to another statute or defined by SEC rule under the TIA have the
meanings so assigned to them.
SECTION 1.4. RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned to
it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the plural include
the singular;
(5) provisions apply to successive events and transactions; and
(6) the words "include", "includes", and "including" shall be deemed to
be followed by the phrase "without limitation"; and
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(7) references to sections of or rules under the Securities Act shall be
deemed to include substitute, replacement of successor sections or
rules adopted by the SEC from time to time.
ARTICLE 2
THE NOTES
SECTION 2.1. FORM AND DATING.
The Notes and the Trustee's certificate of authentication shall be
substantially in the form of Exhibit A hereto. The Notes may have notations,
legends or endorsements required by law, stock exchange rule or usage. Each Note
shall be dated the date of its authentication. The Notes shall be issued in
denominations of $1,000 and integral multiples thereof.
The terms and provisions contained in the Notes shall constitute, and are
hereby expressly made, a part of this Indenture and the Company and the Trustee,
by their execution and delivery of this Indenture, expressly agree to such terms
and provisions and to be bound thereby.
(a) Global Notes. Notes issued in exchange for the Preferred Stock
may be issued initially in the form of one or more Global Notes, which shall be
deposited on behalf of the Holders of the Notes represented thereby with a
custodian of the Depository, and registered in the name of the Depository or a
nominee of the Depository, duly executed by the Company and authenticated by the
Trustee as hereinafter provided. The aggregate principal amount of the Global
Notes may from time to time be increased or decreased by adjustments made on the
records of the Trustee and the Depository or its nominee as hereinafter
provided.
Each Global Note shall represent such of the outstanding Notes as
shall be specified therein and each shall provide that it shall represent the
aggregate amount of outstanding Notes from time to time endorsed thereon and
that the aggregate amount of outstanding Notes represented thereby may from time
to time be reduced or increased, as appropriate, to reflect exchanges,
redemptions and transfers of interests. Any endorsement of a Global Note to
reflect the amount of any increase or decrease in the amount of outstanding
Notes represented thereby shall be made by the Trustee or the Note Custodian, at
the direction of the Trustee, in accordance with instructions given by the
Holder thereof as required by Section 2.6 hereof.
Except as set forth in Section 2.6 hereof, the Global Notes may be
transferred, in whole and not in part, only to another nominee of the Depository
or to a successor of the Depository or its nominee.
(b) Book-Entry Provisions. The Company shall execute and the Trustee
shall, in accordance with Section 2.2, authenticate and deliver the Global
Notes, if any, that (i) shall be registered in the name of the Depository or the
nominee of the Depository and (ii) shall be delivered by the Trustee to the
Depository or pursuant to the Depository's instructions or held by the Trustee
as custodian for the Depository.
Participants shall have no rights either under this Indenture with
respect to any Global Note held on their behalf by the Depository or by the Note
Custodian as custodian for the Depository or under such Global Note, and the
Depository may be treated by the Company, the Trustee and any
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Agent of the Company or the Trustee as the absolute owner of such Global Note
for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall
prevent the Company, the Trustee or any Agent of the Company or the Trustee from
giving effect to any written certification, proxy or other authorization
furnished by the Depository or impair, as between the Depository and its
Participants, the operation of customary practices of such Depository governing
the exercise of the rights of an owner of a beneficial interest in any Global
Note.
(c) Definitive Notes. Notes issued in certificated form shall be
substantially in the form of Exhibit A attached hereto (but without including
the text referred to in footnotes 1 and 2 thereto).
SECTION 2.2. EXECUTION AND AUTHENTICATION.
Two Officers shall sign the Notes for the Company by manual or facsimile
signature. The Company's seal shall be reproduced on the Notes and may be in
facsimile form.
If an Officer whose signature is on a Note no longer holds that office at
the time a Note is authenticated, the Note shall nevertheless be valid.
A Note shall not be valid until authenticated by the manual signature of
the Trustee. The signature shall be conclusive evidence that the Note has been
authenticated under this Indenture. The form of Trustee's certificate of
authentication to be borne by the Notes shall be substantially as set forth in
Exhibit A hereto.
The Trustee shall, upon a written order of the Company signed by two
Officers, authenticate Notes for original issue up to $21,400,000 aggregate
principal amount of the Notes. Such written order shall specify the exact
aggregate principal amount of Notes to be authenticated. The aggregate principal
amount of Notes outstanding at any time may not exceed such amount except as
provided in Section 2.7 hereof. The Company shall also deliver to the Trustee an
Officers' Certificate and an Opinion of Counsel that all of the conditions to
the exchange of the Preferred Stock into the Notes have been satisfied.
The Trustee may appoint an authenticating agent acceptable to the Company
to authenticate Notes. An authenticating agent may authenticate Notes whenever
the Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such agent. An authenticating agent has the
same rights as an Agent to deal with the Company or an Affiliate of the Company.
SECTION 2.3. REGISTRAR AND PAYING AGENT.
The Company shall maintain an office or agency in the State of New York
where Notes may be presented for registration of transfer or for exchange
("Registrar") and an office or agency where Notes may be presented for payment
("Paying Agent"). The Registrar shall keep a register of the Notes and of their
transfer and exchange. The Company may appoint one or more co-registrars and one
or more additional paying agents. The term "Registrar" includes any co-registrar
and the term "Paying Agent" includes any additional paying agent. The Company
may change any Paying Agent or Registrar without notice to any Holder. The
Company shall notify the Trustee in writing of the name and address of any Agent
not a party to this Indenture. If the Company fails to appoint or maintain
another entity as Registrar or Paying Agent, the Trustee shall act as such. The
Company shall enter
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into an appropriate agency agreement with any Agent not a party to this
Indenture, and such agreement shall incorporate the TIA's provisions of this
Indenture that relate to such Agent. The Company or any Significant Subsidiary
may act as Paying Agent or Registrar.
The Company initially appoints The Depository Trust Company ("DTC") to act
as Depository with respect to the Global Notes.
The Company initially appoints the Trustee to act as the Registrar and
Paying Agent and to act as Note Custodian with respect to the Global Notes.
SECTION 2.4. PAYING AGENT TO HOLD MONEY IN TRUST.
The Company shall require each Paying Agent other than the Trustee to
agree in writing that the Paying Agent will hold in trust for the benefit of
Holders or the Trustee all money held by the Paying Agent for the payment of
principal of or premium or interest on the Notes, and will 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
(if other than the Company or a Subsidiary) shall have no further liability for
the money. If the Company or a Significant Subsidiary acts as Paying Agent, it
shall segregate and hold in a separate trust fund for the benefit of the Holders
all money held by it as Paying Agent. Upon any bankruptcy or reorganization
proceedings relating to the Company, the Trustee shall serve as Paying Agent for
the Notes.
SECTION 2.5. HOLDER LISTS.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
all Holders and shall otherwise comply with TIA Section 312(a). If the Trustee
is not the Registrar, the Company shall furnish to the Trustee at least seven
Business Days before each interest payment date and 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 the Holders of
Notes and the Company shall otherwise comply with TIA Section 312(a).
SECTION 2.6. TRANSFER AND EXCHANGE.
(a) Transfer and Exchange of Global Notes. The transfer and exchange
of Global Notes or beneficial interests therein shall be effected through the
Depository, in accordance with this Indenture and the procedures of the
Depository therefor. Beneficial interests in a Global Note may be transferred to
Persons who take delivery thereof in the form of a beneficial interest in the
same Global Note.
(b) Transfer and Exchange of Definitive Notes. When Definitive Notes
are presented by a Holder to the Registrar with a request to register the
transfer of the Definitive Notes or to exchange such Definitive Notes for an
equal principal amount of Definitive Notes of other authorized denominations,
the Registrar shall register the transfer or make the exchange as requested only
if the Definitive Notes are presented or surrendered for registration of
transfer or exchange, are endorsed and contain a signature guarantee or
accompanied by a written instrument of transfer in form
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satisfactory to the Registrar duly executed by such Holder or by his attorney
and contains a signature guarantee.
(c) Transfer of a Beneficial Interest in a Global Note for a
Definitive Note. Any Person having a beneficial interest in a Global Note may
upon request, subject to the Applicable Procedures, exchange such beneficial
interest for a Definitive Note, upon receipt by the Trustee of written
instructions or such other form of instructions as is customary for the
Depository, from the Depository or its nominee on behalf of any Person having a
beneficial interest in a Global Note.
(d) Restrictions on Transfer and Exchange of Global Notes.
Notwithstanding any other provision of this Indenture, a Global Note may not be
transferred as a whole except by the Depository to a nominee of the Depository
or by a nominee of the Depository to the Depository or another nominee of the
Depository or by the Depository or any such nominee to a successor Depository or
a nominee of such successor Depository.
(e) Authentication of Definitive Notes in Absence of Depository. If
at any time:
(i) the Depository for the Notes notifies the Company that the
Depository is unwilling or unable to continue as Depository for the Global
Notes and a successor Depository for the Global Notes is not appointed by
the Company within 90 days after delivery of such notice; or
(ii) the Company, at its sole discretion, notifies the Trustee
in writing that it elects to cause the issuance of Definitive Notes under
this Indenture, then the Company shall execute, and the Trustee shall,
upon receipt of an authentication order in accordance with Section 2.2
hereof, authenticate and deliver, Definitive Notes in an aggregate
principal amount equal to the principal amount of the Global Notes in
exchange for such Global Notes.
(f) Cancellation and/or Adjustment of Global Notes. At such time as
all beneficial interests in Global Notes have been exchanged for Definitive
Notes, redeemed, repurchased or cancelled, all Global Notes shall be returned to
or retained and cancelled by the Trustee in accordance with Section 2.11 hereof.
At any time prior to such cancellation, if any beneficial interest in a Global
Note is exchanged for Definitive Notes, redeemed, repurchased or cancelled, the
principal amount of Notes represented by such Global Note shall be reduced
accordingly and an endorsement shall be made on such Global Note, by the Trustee
or the Note Custodian, at the direction of the Trustee, to reflect such
reduction.
(g) General Provisions Relating to Transfers and Exchanges.
(i) To permit registrations of transfers and exchanges,
subject to this Section 2.6 the Company shall execute and the Trustee
shall authenticate Definitive Notes and Global Notes at the Registrar's
request.
(ii) No service charge shall be made to a Holder for any
registration of transfer or exchange, but the Company may require payment
of a sum sufficient to cover any transfer tax or similar governmental
charge payable in connection therewith (other than any such transfer taxes
or similar governmental charge payable upon exchange or transfer pursuant
to Sections 3.7, 4.8 and 9.5 hereof).
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(iii) The Registrar shall not be required to register the
transfer of or exchange any Note selected for redemption in whole or in
part, except the unredeemed portion of any Note being redeemed in part.
(iv) All Definitive Notes and Global Notes issued upon any
registration of transfer or exchange of Definitive Notes or Global Notes
shall be the valid obligations of the Company, evidencing the same debt,
and entitled to the same benefits under this Indenture as the Definitive
Notes or Global Notes surrendered upon such registration of transfer or
exchange.
(v) The Company shall not be required:
(A) to issue, to register the transfer of or to exchange
Notes during a period beginning at the opening of business 15 days before
the day of any selection of Notes for redemption under Section 3.2 hereof
and ending at the close of business on the day of selection;
(B) to register the transfer of or to exchange any Note
so selected for redemption in whole or in part, except the unredeemed
portion of any Note being redeemed in part;
(C) to register the transfer of or to exchange a Note
between a record date and the next succeeding interest payment date; or
(D) to register the transfer of a Note other than in
amounts of $1,000 or multiple integrals thereof.
(vi) Prior to due presentment for the registration of a
transfer of any Note, the Trustee, any Agent and the Company may deem and
treat the Person in whose name any Note is registered as the absolute
owner of such Note for the purpose of receiving payment of principal of
and interest on such Notes, and neither the Trustee, any Agent nor the
Company shall be affected by notice to the contrary.
(vii) The Trustee shall authenticate Definitive Notes and
Global Notes in accordance with the provisions of Section 2.2 hereof.
SECTION 2.7. REPLACEMENT NOTES.
If any mutilated Note is surrendered to the Trustee or the Company or the
Trustee receives evidence to its satisfaction of the destruction, loss or theft
of any Note, the Company shall issue and the Trustee, upon the written order of
the Company signed by two Officers of the Company, shall authenticate a
replacement Note if the Trustee's requirements are met. If required by the
Trustee or the Company, an indemnity bond must be supplied by the Holder that is
sufficient in the judgment of the Trustee and the Company to protect the
Company, the Trustee, any Agent and any authenticating agent from any loss that
any of them may suffer if a Note is replaced. The Company may charge for its
expenses in replacing a Note.
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Every replacement Note is an additional obligation of the Company and
shall be entitled to all of the benefits of this Indenture equally and
proportionately with all other Notes duly issued hereunder.
SECTION 2.8. OUTSTANDING NOTES.
The Notes outstanding at any time are all the Notes authenticated by the
Trustee except for those cancelled by it, those delivered to it for
cancellation, those reductions in the interest in a Global Note effected by the
Trustee in accordance with the provisions hereof, and those described in this
Section as not outstanding. Except as set forth in Section 2.9 hereof, a Note
does not cease to be outstanding because the Company or an Affiliate of the
Company holds the Note.
If a Note is lost, destroyed or stolen and is then replaced pursuant to
Section 2.7 hereof, it ceases to be outstanding unless the Trustee receives
proof satisfactory to it that the replaced Note is held by a bona fide
purchaser.
If the entire principal of and premium and interest on any Note is
considered paid under Section 4.1 hereof, it ceases to be outstanding and
interest on it ceases to accrue.
If the Paying Agent (other than the Company, a Subsidiary of the Company
or an Affiliate) holds, on a redemption date or maturity date, money sufficient
to pay Notes payable on that date, then on and after that date such Notes shall
be deemed to be no longer outstanding and shall cease to accrue interest.
SECTION 2.9. TREASURY NOTES.
In determining whether the Holders of the required principal amount of
Notes have concurred in any direction, waiver or consent, Notes owned by the
Company, a Subsidiary of the Company or an Affiliate, shall be considered as
though not outstanding, except that for the purposes of determining whether the
Trustee shall be protected in relying on any such direction, waiver or consent,
only Notes that a Trustee knows are so owned shall be so disregarded.
Notwithstanding the foregoing, Notes that the Company, a Subsidiary of the
Company or an Affiliate offers to purchase or acquires pursuant to an offer,
exchange offer, tender offer or otherwise shall not be deemed to be owned by the
Company, a Subsidiary of the Company or an Affiliate until legal title to such
Notes passes to the Company, such Subsidiary or such Affiliate as the case may
be.
SECTION 2.10. TEMPORARY NOTES.
Until Definitive Notes are ready for delivery, the Company may prepare and
the Trustee shall authenticate temporary Notes upon a written order of the
Company signed by two Officers of the Company. Temporary Notes shall be
substantially in the form of Definitive Notes but may have variations that the
Company considers appropriate for temporary Notes and as shall be reasonably
acceptable to the Trustee. Without unreasonable delay, the Company shall prepare
and the Trustee shall authenticate Definitive Notes in exchange for temporary
Notes. Until such exchange, Holders of temporary Notes shall be entitled to all
of the benefits of this Indenture.
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SECTION 2.11. CANCELLATION.
The Company at any time may deliver Notes to the Trustee for cancellation.
The Registrar and Paying Agent shall forward to the Trustee any Notes
surrendered to them for registration of transfer, exchange or payment. The
Trustee and no one else shall cancel all Notes surrendered for registration of
transfer, exchange, payment, replacement or cancellation and shall destroy
cancelled Notes (subject to the record retention requirement of the Exchange
Act). Certification of the destruction of all cancelled Notes shall be delivered
to the Company. The Company may not issue new Notes to replace Notes that it has
paid or that have been delivered to the Trustee for cancellation.
SECTION 2.12. DEFAULTED INTEREST.
If the Company defaults in a payment of interest on the Notes, it shall
pay the defaulted interest in any lawful manner plus, to the extent lawful,
interest payable on the defaulted interest, to the Persons who are Holders on a
subsequent special record date, in each case at the rate provided in the Notes
and in Section 4.1 hereof. The Company shall notify the Trustee in writing of
the amount of defaulted interest proposed to be paid on each Note and the date
of the proposed payment. The Company shall fix or cause to be fixed each such
special record date and payment date, provided that no such special record date
shall be less than 10 days prior to the related payment date for such defaulted
interest. At least 15 days before the special record date, the Company (or, upon
the written request of the Company, the Trustee in the name and at the expense
of the Company) shall mail or cause to be mailed to Holders a notice that states
the special record date, the related payment date and the amount of such
interest to be paid.
ARTICLE 3
REDEMPTION AND PREPAYMENT
SECTION 3.1. NOTICES TO TRUSTEE.
If the Company elects to redeem Notes pursuant to the optional redemption
provisions of Section 3.7 hereof, it shall furnish to the Trustee, at least 30
days but not more than 60 days before a redemption date, an Officers'
Certificate setting forth (i) the clause of this Indenture pursuant to which the
redemption shall occur, (ii) the redemption date, (iii) the principal amount of
Notes to be redeemed and (iv) the redemption price.
SECTION 3.2. SELECTION OF NOTES TO BE REDEEMED.
If less than all of the Notes are to be redeemed at any time, the Trustee
shall select the Notes to be redeemed among the Holders of the Notes in
compliance with the requirements of the principal national securities exchange,
if any, on which the Notes are listed or, if the Notes are not so listed, on a
pro rata basis, by lot or in accordance with any other method the Trustee
considers fair and appropriate; provided that no Notes of $1,000 or less shall
be redeemed in part. In the event of partial redemption by lot, the particular
Notes to be redeemed shall be selected, unless otherwise provided herein, by the
Trustee from the outstanding Notes not previously called for redemption within
10 business days after receipt of the Officers' Certificate pursuant to Section
3.1 hereof.
The Trustee shall promptly notify the Company in writing of the Notes
selected for redemption and, in the case of any Note selected for partial
redemption, the principal amount thereof
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to be redeemed. Notes and portions of Notes selected shall be in amounts of
$1,000 or whole multiples of $1,000. Provisions of this Indenture that apply to
Notes called for redemption also apply to portions of Notes called for
redemption.
SECTION 3.3. NOTICE OF REDEMPTION.
At least 30 days but not more than 60 days before a redemption date, a
public notice of the redemption shall be made and the Company shall mail or
cause to be mailed, by first class mail, a notice of redemption to each Holder
whose Notes are to be redeemed at its registered address with copies to the
Trustee.
The notice shall identify the Notes to be redeemed and shall state:
(a) the redemption date;
(b) the redemption price;
(c) if any Note is being redeemed in part, the portion of the
principal amount of such Note to be redeemed and that, after the redemption date
upon surrender of such Note, a new Note or Notes in a principal amount equal to
the unredeemed portion shall be issued upon cancellation of the original Note;
(d) the name and address of the Paying Agent;
(e) that Notes called for redemption must be surrendered to the
Paying Agent to collect the redemption price;
(f) that, unless the Company defaults in making such redemption
payment, interest on Notes called for redemption ceases to accrue on and after
the redemption date;
(g) the paragraph of the Notes and/or Section of this Indenture
pursuant to which the Notes called for redemption are being redeemed; and
(h) that no representation is made as to the correctness or accuracy
of the CUSIP number, if any, listed in such notice or printed on the Notes.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at its expense; provided, however, that in
all cases, the text of such notice of redemption shall be prepared or approved
by the Company and the Trustee shall have no responsibility whatsoever with
regard to such notice being accurate or correct.
SECTION 3.4. EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is mailed in accordance with Section 3.3 hereof,
Notes called for redemption become irrevocably due and payable on the redemption
date at the redemption price. A notice of redemption may not be conditional.
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SECTION 3.5. DEPOSIT OF REDEMPTION PRICE.
One Business Day prior to the redemption date, the Company shall deposit
with the Paying Agent money sufficient to pay the redemption price of and
accrued interest on all Notes to be redeemed on that date. The Paying Agent
shall promptly return to the Company any money deposited with the Paying Agent
by the Company in excess of the amounts necessary to pay the redemption price of
and accrued interest on all Notes to be redeemed.
If the Company complies with the provisions of the preceding paragraph, on
and after the redemption date, interest shall cease to accrue on the Notes or
the portions of Notes called for redemption. If a Note is redeemed on or after
an interest record date but on or prior to the related interest payment date,
then any accrued and unpaid interest shall be paid to the Person in whose name
such Note was registered at the close of business on such record date. If any
Note called for redemption shall not be so paid upon surrender for redemption
because of the failure of the Company to comply with the preceding paragraph,
interest shall be paid on the unpaid principal, from the redemption date until
such principal is paid, and to the extent lawful on any interest not paid on
such unpaid principal, in each case at the rate provided in the Notes and in
Section 4.1 hereof.
SECTION 3.6. NOTES REDEEMED IN PART.
Upon surrender of a Note that is redeemed in part, the Company shall issue
and, upon the Company's written request, the Trustee shall authenticate for the
Holder at the expense of the Company a new Note equal in principal amount to the
unredeemed portion of the Note surrendered.
SECTION 3.7. OPTIONAL REDEMPTION.
(a) The Company shall have the option to redeem the Notes pursuant
to this Section 3.7 on or after August 15, 2000. The Company shall have the
option to redeem the Notes, in whole or from time to time in part, at the
redemption prices (expressed as percentages of principal amount) set forth below
plus accrued and unpaid interest thereon, to the applicable redemption date, if
redeemed during the twelve-month period beginning on August 15 of the years
indicated below:
Year PERCENTAGE
---- ----------
2000 ....................................... 104.4%
2001 ....................................... 102.9%
2002 ....................................... 101.5%
2003 and thereafter......................... 100.0%
Notwithstanding the foregoing, on or after August 15, 1999, the
Company may, at its option, redeem the Notes at 105.9% of the principal amount
plus accrued and unpaid interest thereon if the Common Stock bid price has
averaged not less than 1.5 times the Conversion Price during 20 consecutive
Trading Days.
(b) Any redemption pursuant to this Section 3.7 shall be made
pursuant to the provisions of Section 3.1 through 3.6 hereof.
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SECTION 3.8. NO MANDATORY REDEMPTION.
Except as provided in Section 4.8, the Company shall not be required to
make mandatory redemption or sinking fund payments with respect to the Notes.
ARTICLE 4
COVENANTS
SECTION 4.1. PAYMENT OF NOTES.
The Company shall pay or cause to be paid the principal of and premium and
interest on the Notes on the dates and in the manner provided in the Notes.
Principal, premium and interest shall be considered paid on the date due if the
Paying Agent, if other than the Company or a Subsidiary thereof, holds as of
5:00 p.m. New York City time on the Business Day immediately prior to the due
date money deposited by the Company in immediately available funds and
designated for and sufficient to pay all principal, premium and interest then
due.
The Company shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal at the rate equal to
the interest rate on the Notes to the extent lawful; it shall pay interest
(including post-petition interest in any proceeding under any Bankruptcy Law) on
overdue installments of interest (without regard to any applicable grace period)
at the same rate to the extent lawful.
SECTION 4.2. MAINTENANCE OF OFFICE OR AGENCY.
The Company shall maintain an office or agency in the State of New York
(which may be an office of the Trustee or an affiliate of the Trustee, Registrar
or co-registrar) where Notes may be surrendered for registration of transfer or
for exchange and where notices and demands to or upon the Company in respect of
the Notes and this Indenture may be served. The Company shall give prompt
written notice to the Trustee of the location, 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 Notes 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 for such purposes. The Company
shall 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
one such office or agency of the Company in accordance with Section 2.3.
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SECTION 4.3. REPORTS.
Whether or not the Company is required to do so by the rules and
regulations of the SEC, the Company will file with the SEC (unless the SEC will
not accept such a filing) and, within 15 days of filing, or attempting to file,
the same with the SEC, furnish to the holders of the Notes and the Trustee (a)
all quarterly and annual financial and other information with respect to the
Company that would be required to be contained in a filing with the SEC on Forms
10-Q and 10-K if the Company were required to file such forms, including a
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and, with respect to the annual information only, a report thereon
by the Company's certified independent accountants, and (b) all current reports
that would be required to be filed with the SEC on Form 8-K if the Company were
required to file such reports. The Company shall at all times comply with TIA
Section 314(a).
SECTION 4.4. COMPLIANCE CERTIFICATE.
(a) The Company shall deliver to the Trustee, within 90 days after
the end of each fiscal year, an Officers' Certificate stating that a review of
the activities of the Company and its Significant Subsidiaries during the
preceding fiscal year has been made under the supervision of the signing
Officers with a view to determining whether the Company has kept, observed,
performed and fulfilled its obligations under this Indenture, and further
stating, as to each such Officer signing such certificate, that to the best of
his or her knowledge the Company has kept, observed, performed and fulfilled
each and every covenant contained in this Indenture and is not in default in the
performance or observance of any of the terms, provisions and conditions of this
Indenture (or, if a Default or Event of Default shall have occurred, describing
all such Defaults or Events of Default of which he or she may have knowledge and
what action the Company is taking or proposes to take with respect thereto) and
that to the best of his or her knowledge no event has occurred and remains in
existence by reason of which payments on account of the principal of or
interest, if any, on the Notes is prohibited or if such event has occurred, a
description of the event and what action the Company is taking or proposes to
take with respect thereto.
(b) So long as not contrary to the then current recommendations of
the American Institute of Certified Public Accountants, the year-end financial
statements delivered pursuant to Section 4.3 above shall be accompanied by a
written statement of the Company's independent public accountants (who shall be
a firm of established national reputation) that in making the examination
necessary for certification of such financial statements, nothing has come to
their attention that would lead them to believe that the Company has violated
any provisions of Article 4 or Article 5 hereof or, if any such violation has
occurred, specifying the nature and period of existence thereof, it being
understood that such accountants shall not be liable directly or indirectly to
any Person for any failure to obtain knowledge of any such violation.
(c) The Company shall, so long as any of the Notes are outstanding,
deliver to the Trustee, as soon as possible upon any Officer becoming aware of
any Default or Event of Default, an Officers' Certificate specifying such
Default or Event of Default and what action the Company is taking or proposes to
take with respect thereto.
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SECTION 4.5. TAXES.
The Company shall pay, and shall cause each of its Subsidiaries to pay,
prior to delinquency, all material taxes, assessments, and governmental levies
except such as are contested in good faith and by appropriate proceedings or
where the failure to effect such payment is not adverse in any material respect
to the Holders of the Notes.
SECTION 4.6. STAY, EXTENSION AND USURY LAWS.
The Company covenants (to the extent that it may lawfully do so) that it
shall not at any time insist upon, plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay, extension or usury law wherever
enacted, now or at any time hereafter in force, that 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 shall not, by resort to any such law, hinder, delay
or impede the execution of any power herein granted to the Trustee, but shall
suffer and permit the execution of every such power as though no such law has
been enacted.
SECTION 4.7. CORPORATE EXISTENCE.
Subject to Article 5 hereof, the Company shall do or cause to be done all
things necessary to preserve and keep in full force and effect its corporate
existence, and the corporate, partnership or other existence of each of its
Significant Subsidiaries, in accordance with the respective organizational
documents (as the same may be amended from time to time) of the Company or any
such Significant Subsidiary, provided, however, that the Company shall not be
required to preserve any such right, license or franchise, or the corporate,
partnership or other existence of any of its Significant Subsidiaries, if the
Board of Directors shall determine that the preservation thereof is no longer
desirable in the conduct of the business of the Company and its Significant
Subsidiaries, taken as a whole.
SECTION 4.8. OFFER TO REPURCHASE UPON CHANGE OF CONTROL.
(a) Within 10 days of the occurrence of a Change of Control, the
Company shall give notice to the Holders and the Trustee that a Change of
Control has occurred (the "Change of Control Notice"). Subject to subparagraph
(c) below, upon the occurrence of a Change of Control, at the option of the
Holders of a majority in principal amount of Notes exercised by the giving of
notice to the Company within 20 days of receipt of the Change of Control Notice,
the Company shall make an offer (a "Change of Control Offer") to repurchase all
or any part (equal to $1,000 or an integral multiple thereof) of each Holder's
Notes at an offer price in cash equal to 100% of the aggregate principal amount
thereof, plus accrued and unpaid interest, if any, thereon to the date of
repurchase (the "Change of Control Payment"). The Company shall deliver to the
Trustee copies of all notices received from the Holders in response to the
Change of Control Notice. The Change of Control Payment shall be made at the
option of the Company either in (a) cash or (b) fully registered shares of
Common Stock valued at 95% of the average closing price of the Common Stock
during the 20 Trading Days prior to such Change of Control Payment if the Board
of Directors of the Company determines that the payment of the Change of Control
Payment in fully registered shares of Common Stock will not adversely affect the
voting rights, preferences, privileges or relative, participating, optional or
other specified rights of the holders of the Notes. Within 10 days following
the receipt by the Company from the Holders of a sufficient number of the
notices
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described in the second sentence of this Section 4.8(a), the Company shall mail
a notice to each Holder and the Trustee stating: (i) that the Change of Control
Offer is being made pursuant to this Section 4.8 and that all Notes validly
tendered and not withdrawn will be accepted for payment; (ii) the purchase price
and the purchase date, which shall be no earlier than 30 days but no later than
60 days from the date such notice is mailed (the "Change of Control Payment
Date"); (iii) that any Note not tendered will continue to accrue interest; (iv)
that, unless the Company defaults in the payment of the Change of Control
Payment, all Notes accepted for payment pursuant to the Change of Control Offer
shall cease to accrue interest after the Change of Control Payment Date; (v)
that Holders electing to have any Notes purchased pursuant to a Change of
Control Offer will be required to surrender the Notes, properly endorsed for
transfer together with the form entitled "Option of Holder to Elect Purchase" on
the reverse of the Notes completed and such customary documents as the Company
may reasonably request, to the Paying Agent at the address specified in the
notice prior to the close of business on the third Business Day preceding the
Change of Control Payment Date; (vi) that Holders will be entitled to withdraw
their election if the Paying Agent receives, not later than the close of
business on the second Business Day preceding the Change of Control Payment
Date, a telegram, telex, facsimile transmission or letter setting forth the name
of the Holder, the principal amount of Notes delivered for purchase, and a
statement that such Holder is withdrawing his election to have the Notes
purchased; and (vii) that Holders whose Notes are being purchased only in part
will be issued new Notes equal in principal amount to the unpurchased portion of
the Notes surrendered, which unpurchased portion must be equal to $1,000 in
principal amount or an integral multiple thereof. The Company shall comply with
the requirements of Rule 14e-1 under the Exchange Act and any other securities
laws and regulations thereunder to the extent Rule 14e-1 or such laws and
regulations are applicable in connection with the repurchase of Notes as a
result of a Change of Control. In the event of any conflict between this
Indenture and Rule 14e-1 or such laws and regulations, the requirements of
Rule 14e-1, any successor provision thereto, and such laws and regulations
thereunder shall control.
(b) On or before the Business Day immediately prior to the Change of
Control Payment Date, the Company shall, to the extent lawful, (i) accept for
payment all Notes or portions thereof properly tendered pursuant to the Change
of Control Offer, (ii) deposit with the Paying Agent an amount, whether in cash
or Common Stock, equal to the Change of Control Payment in respect of all Notes
or portions thereof so tendered and (iii) deliver or cause to be delivered to
the Trustee the Notes so accepted together with an Officers' Certificate stating
the aggregate principal amount of Notes or portions thereof being purchased by
the Company. The Paying Agent shall promptly mail to each holder of Notes so
tendered the Change of Control Payment for such Notes, and the Trustee shall
promptly authenticate and mail (or cause to be transferred by book entry) to
each Holder a new Note equal in principal amount to any unpurchased portion of
the Notes surrendered, if any; provided, that each such new Note will be in a
principal amount of $1,000 or an integral multiple thereof. The Company shall
publicly announce the results of the Change of Control Offer on or as soon as
practicable after the Change of Control Payment Date.
(c) Notwithstanding the foregoing, prior to complying with the
provisions of this Section 4.8, but in any event within 90 days following a
Change of Control, the Company shall either repay all outstanding Senior Debt or
obtain the requisite consents, if any, under all agreements governing
outstanding Senior Debt to permit the repurchase of the Notes required by this
Section 4.8.
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ARTICLE 5
SUCCESSORS
SECTION 5.1. MERGER, CONSOLIDATION, OR SALE OF ASSETS.
The Company shall not consolidate or merge with or into (whether or not
the Company is the surviving corporation), or sell, assign, transfer, lease,
convey or otherwise dispose of all or substantially all of its properties or
assets in one or more related transactions, to another corporation, Person or
entity unless (a) the Company is the surviving corporation or the entity or the
Person formed by or surviving any such consolidation or merger (if other than
the Company) or to which such sale, assignment, transfer, lease, conveyance or
other disposition shall have been made is a corporation organized or existing
under the laws of the United States, any state thereof or the District of
Columbia, (b) the entity or Person formed by or surviving any such consolidation
or merger (if other than the Company) or the entity or Person to which such
sale, assignment, transfer, lease, conveyance or other disposition shall have
been made assumes all the obligations of the Company under the Notes and this
Indenture pursuant to a supplemental indenture in a form reasonably satisfactory
to the Trustee, (c) immediately after such transaction no Default or Event of
Default exists, and (d) the Company or such other Person shall have delivered to
the Trustee an Officers' Certificate and an Opinion of Counsel stating that such
consolidation, merger, sale, assignment, transfer, lease, conveyance or disposal
complies with this Indenture and that all conditions precedent in this Indenture
have been satisfied.
SECTION 5.2. SUCCESSOR CORPORATION SUBSTITUTED.
Upon any consolidation or merger, or any sale, assignment, transfer,
lease, conveyance or other disposition of all or substantially all of the assets
of the Company in accordance with Section 5.1 hereof, the successor corporation
formed by such consolidation or into or with which the Company is merged or to
which such sale, assignment, transfer, lease, conveyance or other disposition is
made shall succeed to, and be substituted for (so that from and after the date
of such consolidation, merger, sale, lease, conveyance or other disposition, the
provisions of this Indenture referring to the "Company" shall refer instead to
the successor corporation and not to the Company), and may exercise every right
and power of, the Company under this Indenture with the same effect as if such
successor Person had been named as the Company herein. When a successor
corporation assumes all of the obligations of the Company hereunder and under
the Notes and agrees to be bound hereby and thereby, the predecessor Company
shall be relieved from such obligations.
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.1. EVENTS OF DEFAULT.
An "Event of Default" occurs if:
(a) the Company defaults in the payment when due of interest on the
Notes and such default continues for a period of 30 days;
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(b) the Company defaults in the payment when due of principal of or
premium on the Notes when the same becomes due and payable at maturity, upon
redemption (including in connection with an offer to purchase) or otherwise;
(c) the Company fails to comply with any of the provisions of
Section 4.8 hereof;
(d) the Company fails to observe or perform any other covenant,
representation, warranty or other agreement in this Indenture or the Notes for
60 days after notice to the Company by the Trustee or the Holders of at least
25% in principal amount of the Notes then outstanding of such failure;
(e) the Company pursuant to or within the meaning of Bankruptcy Law:
(i) commences a voluntary case,
(ii) consents to the entry of an order for relief against it
in an involuntary case,
(iii) consents to the appointment of a custodian of it or for
all or substantially all of its property, or
(iv) makes a general assignment for the benefit of its
creditors.
(f) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(i) is for relief against the Company in an involuntary case;
(ii) appoints a custodian of the Company for all or
substantially all of the property of the Company, or
(iii) orders the liquidation of the Company; and the order or
decree remains unstayed and in effect for 60 consecutive days.
SECTION 6.2. ACCELERATION.
If any Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in principal amount of the then outstanding Notes may
declare all the Notes to be due and payable immediately by a notice in writing
to the Company (and to the Trustee if such written notice is given by the
Holders). Upon any such declaration, the Notes shall become due and payable
immediately. Notwithstanding the foregoing, if an Event of Default specified in
clause (e) or (f) of Section 6.1 hereof occurs, all outstanding Notes shall be
due and payable immediately without further action or notice. The Holders of a
majority in aggregate principal amount of the then outstanding Notes by written
notice to the Trustee may on behalf of all of the Holders rescind an
acceleration and its consequences if the rescission would not conflict with any
judgment or decree and if all existing Events of Default (except nonpayment of
principal, premium or interest that has become due solely because of the
acceleration) have been cured or waived.
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SECTION 6.3. OTHER REMEDIES.
If an Event of Default occurs and is continuing, the Trustee may pursue
any available remedy to collect the payment of principal of, premium and
interest on the Notes or to enforce the performance of any provision of the
Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any of
the Notes or does not produce any of them in the proceeding. A delay or omission
by the Trustee or any Holder of a Note 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 to the extent permitted by law.
SECTION 6.4. WAIVER OF PAST DEFAULTS.
Holders of a majority in aggregate principal amount of the then
outstanding Notes by written notice to the Trustee may on behalf of the Holders
of all of the Notes waive an existing Default or Event of Default and its
consequences hereunder, except a continuing Default or Event of Default in the
payment of the principal of, premium or interest on the Notes (including in
connection with an offer to purchase) (provided, however, that the Holders of a
majority in aggregate principal amount of the then outstanding Notes with
written notice to the Trustee may rescind an acceleration and its consequences,
including any related payment default that resulted from such acceleration) in
accordance with Section 6.2 hereof. Upon any such waiver, such Default shall
cease to exist, and any Event of Default arising therefrom shall be deemed to
have been cured for every purpose of this Indenture; but no such waiver shall
extend to any subsequent or other Default or impair any right of the Trustee or
the Holders consequent thereon.
SECTION 6.5. CONTROL BY MAJORITY.
Holders of a majority in principal amount of the then outstanding Notes
may direct the time, method and place of conducting any proceeding for
exercising any remedy available to the Trustee or exercising any trust or power
conferred on it. However, the Trustee may refuse to follow any direction that
conflicts with law or this Indenture, that the Trustee determines may be unduly
prejudicial to the rights of other Holders of Notes or that may involve the
Trustee in personal liability.
SECTION 6.6. LIMITATION ON SUITS.
A Holder of a Note may pursue a remedy with respect to this Indenture or
the Notes only if:
(a) the Holder of a Note gives to the Trustee written notice of a
continuing Event of Default;
(b) the Holders of at least 25% in principal amount of the then
outstanding Notes make a written request to the Trustee to pursue the remedy;
(c) such Holder of a Note or Holders of Notes offer and, if
requested, provide to the Trustee indemnity satisfactory to the Trustee against
any loss, liability or expense;
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(d) the Trustee does not comply with the request within 60 days
after receipt of the request and the offer and, if requested, the provision of
indemnity; and
(e) during such 60-day period the Holders of a majority in principal
amount of the then outstanding Notes do not give the Trustee a direction
inconsistent with the request.
A Holder of a Note may not use this Indenture to prejudice the rights of another
Holder of a Note or to obtain a preference or priority over another Holder of a
Note.
SECTION 6.7. RIGHTS OF HOLDERS OF NOTES TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Indenture, the right of any
Holder of a Note to receive payment of principal of, premium and interest on the
Note, on or after the respective due dates expressed in the Note (including in
connection with an offer to purchase), 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 such Holder.
SECTION 6.8. COLLECTION SUIT BY TRUSTEE.
If an Event of Default specified in Section 6.1(a) or (b) occurs and is
continuing, the Trustee is authorized to recover judgment in its own name and as
trustee of an express trust against the Company for the whole amount of
principal of, premium and interest remaining unpaid on the Notes and interest on
overdue principal and, to the extent lawful, interest, and such further amount
as shall be sufficient to cover the costs and expenses of collection, including
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel.
SECTION 6.9. TRUSTEE MAY FILE PROOFS OF CLAIM.
The Trustee is authorized to file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders of the Notes allowed in any judicial proceedings relative to the Company
(or any other obligor upon the Notes), its creditors or its property and shall
be entitled and empowered to collect, receive and distribute any money or other
property payable or deliverable on any such claims and any custodian in any such
judicial proceeding is hereby authorized by each Holder to make such payments to
the Trustee, and in the event that the Trustee shall consent to the making of
such payments directly to the Holders, to pay to the Trustee any amount due to
it for the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.7 hereof. To the extent that the payment of any such compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, and
any other amounts due the Trustee under Section 7.7 hereof out of the estate in
any such proceeding, shall be denied for any reason, payment of the same shall
be secured by a Lien on, and shall be paid out of, any and all distributions,
dividends, money, securities and other properties that the Holders may be
entitled to receive in such proceeding whether in liquidation or under any plan
of reorganization or arrangement or otherwise. Nothing herein contained shall be
deemed to authorize the Trustee to authorize or consent to or accept or adopt on
behalf of any Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder, or to authorize the
Trustee to vote in respect of the claim of any Holder in any such proceeding.
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SECTION 6.10. PRIORITIES.
If the Trustee collects any money pursuant to this Article 6, it shall pay
out the money in the following order:
First: to the Trustee, its agents and attorneys for amounts due under
Section 7.7 hereof, including payment of all reasonable compensation, expense
and liabilities incurred, and all advances made, by the Trustee and the
Trustee's costs and expenses of collection;
Second: to Holders of Notes for amounts due and unpaid on the Notes for
principal, premium and interest ratably, without preference or priority of any
kind, according to the amounts due and payable on the Notes for principal,
premium and interest respectively; and
Third: to the Company or to such party as a court of competent
jurisdiction shall direct.
The Trustee may fix a record date and payment date for any payment to
Holders of Notes 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 a Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party litigant.
This Section does not apply to a suit by the Trustee, a suit by a Holder of a
Note pursuant to Section 6.7 hereof, or a suit by Holders of more than 10% in
principal amount of the then outstanding Notes.
ARTICLE 7
TRUSTEE
SECTION 7.1. 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 its exercise, as a
prudent man would exercise or use under the circumstances in the conduct of his
own affairs.
(b) Except during the continuance of an Event of Default:
(i) the duties of the Trustee shall be determined solely by
the express provisions of this Indenture and the Trustee need perform only
those duties that are specifically set forth in this Indenture and no
others, and no implied covenants or obligations shall be read into this
Indenture against the Trustee; and
(ii) 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
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certificates or opinions furnished to the Trustee and conforming to the
requirements of this Indenture. However, the Trustee shall examine the
certificates and opinions to determine whether or not they conform to the
requirements of this Indenture.
(c) The Trustee may not be relieved from liabilities for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b)
of this Section;
(ii) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 6.5 hereof or with an
Officers' Certificate or Opinion of Counsel received by it pursuant to
Section 7.2(b).
(d) Whether or not therein expressly so provided, every provision of
this Indenture that in any way relates to the Trustee is subject to paragraphs
(a), (b) and (c) of this Section.
(e) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or incur any liability. The Trustee shall be under
no obligation to exercise any of its rights and powers under this Indenture at
the request of any Holders, unless such Holder shall have offered to the Trustee
security and indemnity satisfactory to it against any loss, liability or
expense.
(f) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
Money held in trust by the Trustee need not be segregated from other funds
except to the extent required by law.
SECTION 7.2. RIGHTS OF TRUSTEE.
(a) The Trustee may conclusively rely upon 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.
(b) Before the Trustee acts or refrains from acting, it may require
an Officers' Certificate or an Opinion of Counsel or both. The Trustee shall not
be liable for any action it takes or omits to take in good faith in reliance on
such Officers' Certificate or Opinion of Counsel. The Trustee may consult with
counsel and the written advice of such counsel or any Opinion of Counsel shall
be full and complete authorization and protection from liability in respect of
any action taken, suffered or omitted by it hereunder in good faith and in
reliance thereon.
(c) The Trustee may act through its attorneys and agents and shall
not be responsible for the misconduct or negligence of any agent appointed with
due care.
(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith that it believes to be authorized or within the rights or
powers conferred upon it by this Indenture.
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(e) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Company shall be sufficient if
signed by an Officer of the Company.
(f) 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 against the costs, expenses and liabilities
that might be incurred by it in compliance with such request or direction.
SECTION 7.3. INDIVIDUAL RIGHTS OF TRUSTEE.
The Trustee in its individual or any other capacity may become the owner
or pledgee of Notes and may otherwise deal with the Company or any Affiliate of
the Company with the same rights it would have if it were not Trustee. However,
in the event that the Trustee acquires any conflicting interest it must
eliminate such conflict within 90 days, apply to the SEC for permission to
continue as trustee or resign. Any Agent may do the same with like rights and
duties. The Trustee is also subject to Sections 7.10 and 7.11 hereof.
SECTION 7.4. TRUSTEE'S DISCLAIMER.
The Trustee shall not be responsible for and makes no representation as to
the validity or adequacy of this Indenture or the Notes, it shall not be
accountable for the Company's use of the proceeds from the Notes or any money
paid to the Company or upon the Company's direction under any provision of this
Indenture, it shall not be responsible for the use or application of any money
received by any Paying Agent other than the Trustee, and it shall not be
responsible for any statement or recital herein or any statement in the Notes or
any other document in connection with the sale of the Notes or pursuant to this
Indenture other than its certificate of authentication.
SECTION 7.5. NOTICE OF DEFAULTS.
If a Default or Event of Default occurs and is continuing and if it is
known to the Trustee, the Trustee shall mail to Holders of Notes a notice of the
Default or Event of Default within 90 days after it occurs. Except in the case
of a Default or Event of Default in payment of principal of, premium, if any, or
interest on any Note, the Trustee may withhold the notice if and so long as a
committee of its Responsible Officers in good faith determines that withholding
the notice is in the interests of the Holders of the Notes.
The Trustee shall not be deemed to have knowledge of any Default or Event
of Default except (i) provided that the Trustee is the Paying Agent, a Default
or Event of Default arising under Section 6.1(a) or (b), or (ii) any Default or
Event of Default of which the Trustee shall have received written notice in
accordance with the terms of this Indenture, and such notice shall not be deemed
to include receipt of information obtained in any information, documents and
reports furnished, filed or delivered to the Trustee under Section 4.3.
SECTION 7.6. REPORTS BY TRUSTEE TO HOLDERS OF THE NOTES.
Within 60 days after each May 15 beginning with the May 15 following the
date of this Indenture, and for so long as Notes remain outstanding, the Trustee
shall mail to the Holders of the Notes a brief report dated as of such reporting
date that complies with TIA Section 313(a) (but if no event described in TIA
Section 313(a) has occurred within the twelve months preceding the reporting
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date, no report need be transmitted). The Trustee also shall comply with TIA
Section 313(b)(2) to the extent applicable. The Trustee shall also transmit by
mail all reports as required by TIA Section 313(c).
A copy of each report at the time of its mailing to the Holders of Notes
shall be mailed to the Company and filed with the SEC and each stock exchange on
which the Notes are listed in accordance with TIA Section 313(d). The Company
shall promptly notify the Trustee, in writing when the Notes are listed on any
stock exchange.
SECTION 7.7. COMPENSATION AND INDEMNITY.
The Company shall pay to the Trustee from time to time reasonable
compensation for its acceptance of this Indenture and services hereunder. 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 promptly
upon request for all reasonable disbursements, advances and expenses incurred or
made by it in addition to the compensation for its services. Such expenses shall
include the reasonable compensation, disbursements and expenses of the Trustee's
agents and counsel.
The Company shall indemnify the Trustee and its directors, officers,
agents and employees against any and all losses, liabilities or expenses
incurred by it or such director, officer, agent or employee arising out of or in
connection with the acceptance or administration of its duties under this
Indenture, including the costs and expenses of enforcing this Indenture against
the Company (including this Section 7.7) and defending itself or such director,
officer, agent or employee against any claim (whether asserted by the Company or
any Holder or any other person) or liability in connection with the exercise or
performance of any of its or their powers or duties hereunder, except to the
extent any such loss, liability or expense may be attributable to its or their
negligence, bad faith or willful misconduct. The Trustee shall notify the
Company promptly of any claim for which it or such director, officer, agent or
employee may seek indemnity. Failure by the Trustee to so notify the Company
shall not relieve the Company of its obligations hereunder. The Company shall
defend the claim and the Trustee shall cooperate in the defense. The Trustee and
such officer, director, agent or employee may have separate counsel and the
Company shall pay the reasonable fees and expenses of such counsel. The Company
need not pay for any settlement made without its consent, which consent shall
not be unreasonably withheld.
The obligations of the Company under this Section 7.7 shall survive the
satisfaction and discharge of this Indenture.
To secure the Company's payment obligations in this Section, the Trustee
shall have a Lien prior to the Notes on all money or property held or collected
by the Trustee, except that held in trust to pay principal and interest on
particular Notes. Such Lien shall survive the satisfaction and discharge of this
Indenture.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.1(e) or (f) hereof occurs, the expenses and the
compensation for the services (including the fees and expenses of its agents and
counsel) are intended to constitute expenses of administration under any
Bankruptcy Law.
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SECTION 7.8. 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.
The Trustee may resign in writing at any time and be discharged from the
trust hereby created by so notifying the Company. The Holders of a majority in
principal amount of the then outstanding Notes may remove the Trustee by so
notifying the Trustee and the Company in writing. The Company may remove the
Trustee if:
(a) the Trustee fails to comply with Section 7.10 hereof;
(b) the Trustee is adjudged a bankrupt or an insolvent or an order
for relief is entered with respect to the Trustee under any Bankruptcy Law;
(c) a custodian or public officer takes charge of the Trustee or its
property;
(d) the Trustee becomes incapable of acting; or
(e) prior to the issuance of any Notes hereunder, the Board of
Directors determines to remove the Trustee; provided, that the Company shall
have paid all amounts owed to the Trustee pursuant to Section 7.7.
If the Trustee resigns or is removed or if a vacancy exists in the office
of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the then outstanding Notes 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 principal amount of the then outstanding Notes
may petition any court of competent jurisdiction for the appointment of a
successor Trustee.
If the Trustee, after written request by any Holder of a Note who has been
a Holder of a Note for at least six months, fails to comply with Section 7.10
hereof, such Holder of a Note may petition any court of competent jurisdiction
for the removal of the Trustee and the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the Company. Thereupon, the resignation or
removal of the retiring Trustee shall become effective, and the successor
Trustee shall have all the rights, powers and duties of the Trustee under this
Indenture. The successor Trustee shall mail a notice of its succession to
Holders of the Notes. The retiring Trustee shall promptly transfer all property
held by it as Trustee to the successor Trustee, provided all sums owing to the
Trustee hereunder have been paid and subject to the Lien provided for in Section
7.7 hereof. Notwithstanding replacement of the Trustee pursuant to this Section
7.8, the Company's obligations under Section 7.7 hereof shall continue for the
benefit of the retiring Trustee.
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SECTION 7.9. SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Trustee consolidates, 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.
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION.
There shall at all times be a Trustee hereunder that is a corporation
organized and doing business under the laws of the United States of America or
of any state thereof that is authorized under such laws to exercise corporate
trustee power, that is subject to supervision or examination by federal or state
authorities and that has (or is part of a bank holding company that has) a
combined capital and surplus of at least $100 million as set forth in its most
recent published annual report of condition.
This Indenture shall always have a Trustee who satisfies the requirements
of TIA Section 310(a)(1), (2) and (5). The Trustee is subject to TIA Section
310(b).
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
The Trustee is subject to TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated therein.
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
SECTION 8.1. OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT DEFEASANCE.
The Company may, at the option of its Board of Directors evidenced by a
resolution set forth in an Officers' Certificate, at any time, exercise its
rights under either Section 8.2 or 8.3 hereof with respect to all outstanding
Notes upon compliance with the conditions set forth below in this Article 8.
SECTION 8.2. LEGAL DEFEASANCE AND DISCHARGE.
Upon the Company's exercise under Section 8.1 hereof of the option
applicable to this Section 8.2, the Company shall, subject to the satisfaction
of the conditions set forth in Section 8.4 hereof, be deemed to have discharged
its obligations with respect to all outstanding Notes on the date the conditions
set forth below are satisfied (hereinafter, "Legal Defeasance"). For this
purpose, Legal Defeasance means that the Company shall be deemed to have paid
and discharged the entire Indebtedness represented by the outstanding Notes
(which shall thereafter be deemed to be "outstanding" only for the purposes of
Section 8.5 hereof and the other Sections of this Indenture referred to in (a)
and (b) below) and to have satisfied all its other obligations under such Notes
and this Indenture (and the Trustee, on demand of and at the expense of the
Company, shall execute proper instruments acknowledging the same), except for
the following provisions which shall survive until otherwise terminated or
discharged hereunder: (a) the rights of Holders of outstanding Notes to receive
solely from the trust fund described in Section 8.4 hereof, and as more fully
set forth in such Section, payments in respect of the principal of, premium and
interest on such Notes when such
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payments are due, (b) the Company's obligations with respect to such Notes under
Sections 2.3, 2.4, 2.7, 2.10 and 4.2 hereof, (c) the rights, powers, trusts,
duties and immunities of the Trustee hereunder and the Company's obligations in
connection therewith and (d) this Article 8. Subject to compliance with this
Article 8, the Company may exercise its option under this Section 8.2
notwithstanding the prior exercise of its option under Section 8.3 hereof.
SECTION 8.3. COVENANT DEFEASANCE.
Upon the Company's exercise under Section 8.1 hereof of the option
applicable to this Section 8.3, the Company shall, subject to the satisfaction
of the conditions set forth in Section 8.4 hereof, be released from its
obligations under the covenants contained in Article 4 (other than those in
Sections 4.1, 4.2, 4.6 and 4.7) and Section 5.1 hereof with respect to the
outstanding Notes on and after the date the conditions set forth below are
satisfied (hereinafter, "Covenant Defeasance"), and the Notes shall thereafter
be deemed not "outstanding" for the purposes of any direction, waiver, consent
or declaration or act of Holders (and the consequences of any thereof) in
connection with the covenant, but shall continue to be deemed "outstanding" for
all other purposes hereunder (it being understood that such Notes shall not be
deemed outstanding for accounting purposes). For this purpose, Covenant
Defeasance means that, with respect to the outstanding Notes, the Company may
omit to comply with and shall have no liability in respect of any term,
condition or limitation set forth in the covenant, whether directly or
indirectly, by reason of any reference elsewhere herein to the covenant or by
reason of any reference in the covenant to any other provision herein or in any
other document and such omission to comply shall not constitute a Default or an
Event of Default under Section 6.1 hereof, but, except as specified above, the
remainder of this Indenture and such Notes shall be unaffected thereby. In
addition, upon the Company's exercise under Section 8.1 hereof of the option
applicable to this Section 8.3, subject to the satisfaction of the conditions
set forth in Section 8.4 hereof, Sections 6.1(c) through 6.1(f) hereof shall not
constitute an Event of Default.
SECTION 8.4. CONDITIONS TO LEGAL OR COVENANT DEFEASANCE.
In order to exercise either Legal Defeasance or Covenant Defeasance:
(a) the Company must irrevocably deposit with the Trustee, in trust,
for the benefit of the Holders, cash in United States dollars, non-callable
Government Securities, or a combination thereof, in such amounts as will be
sufficient, in the opinion of a nationally recognized firm of independent public
accountants, to pay the principal of and premium and interest on the outstanding
Notes on the stated maturity thereof or on the applicable redemption date, as
the case may be, and the Company must specify whether the Notes are being
defeased to maturity or to a particular redemption date;
(b) in the case of an election under Section 8.2 hereof, the Company
shall have delivered to the Trustee an Opinion of Counsel in the United States
reasonably acceptable to the Trustee confirming that (A) the Company has
received from, or there has been published by, the Internal Revenue Service a
ruling or (B) since the date of this Indenture, there has been a change in the
applicable federal income tax law, in either case to the effect that, and based
thereon such Opinion of Counsel shall confirm that, the Holders of the
outstanding Notes will not recognize income, gain or loss for federal income tax
purposes as a result of such Legal Defeasance and will be subject to federal
income tax on the same amounts, in the same manner and at the same times as
would have been the case if such Legal Defeasance had not occurred;
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(c) in the case of an election under Section 8.3 hereof, the Company
shall have delivered to the Trustee an Opinion of Counsel in the United States
reasonably acceptable to the Trustee confirming that the Holders of the
outstanding Notes will not recognize income, gain or loss for federal income tax
purposes as a result of such Covenant Defeasance and will be subject to federal
income tax on the same amounts, in the same manner and at the same times as
would have been the case if such Covenant Defeasance had not occurred;
(d) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit (other than a Default or Event of Default
resulting from the incurrence of Indebtedness, all or a portion of the proceeds
of which will be used to defease the Notes pursuant to this Article 8
concurrently with such incurrence);
(e) such Legal Defeasance or Covenant Defeasance shall not result in
a breach or violation of, or constitute a default under, any material agreement
or instrument (other than this Indenture) to which the Company is a party or by
which the Company is bound;
(f) the Company shall have delivered to the Trustee an Opinion of
Counsel (which may be based on such solvency certificates or solvency opinions
as counsel deems necessary or appropriate) to the effect that the trust funds
will not be subject to the effect of any applicable bankruptcy, insolvency,
reorganization or similar laws affecting creditors' rights generally;
(g) the Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the intent
of preferring the Holders over any other creditors of the Company or with the
intent of defeating, hindering, delaying or defrauding creditors of the Company
or others; and
(h) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for or relating to the Legal Defeasance or the Covenant
Defeasance have been complied with.
SECTION 8.5. DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE HELD IN TRUST;
OTHER MISCELLANEOUS PROVISIONS.
Subject to Section 8.6 hereof, all money and non-callable Government
Securities (including the proceeds thereof) deposited with the Trustee (or other
qualifying trustee, collectively for purposes of this Section 8.5, the
"Trustee") pursuant to Section 8.4 hereof in respect of the outstanding Notes
shall be held in trust and applied by the Trustee, in accordance with the
provisions of such Notes and this Indenture, to the payment, either directly or
through any Paying Agent (including the Company acting as Paying Agent) as the
Trustee may determine, to the Holders of such Notes of all sums due and to
become due thereon in respect of principal, premium, if any, and interest, but
such money need not be segregated from other funds except to the extent required
by law. The Company shall not be required to execute a separate trust agreement
to implement the trust described in this paragraph.
The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the cash or non-callable Government
Securities deposited pursuant to Section 8.4 hereof 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 the outstanding Notes.
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Anything in this Article 8 to the contrary notwithstanding, the Trustee
shall deliver or pay to the Company from time to time upon the request of the
Company any money or non-callable Government Securities held by it as provided
in Section 8.4 hereof which, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee (which may be the opinion delivered under Section
8.4(a) hereof), are in excess of the amount thereof that would then be required
to be deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.
SECTION 8.6. REPAYMENT TO COMPANY.
Any money deposited with the Trustee or any Paying Agent, or then held by
the Company, in trust for the payment of the principal of, premium, if any, or
interest on any Note and remaining unclaimed for two years after such principal,
premium, if any, or interest has become due and payable shall be paid to the
Company on its request or (if then held by the Company) shall be discharged from
such trust; and the Holder of such Note shall thereafter, as a secured creditor,
look only to the Company for payment thereof, and all liability of the Trustee
or such Paying Agent with respect to such trust money, and all liability of the
Company as trustee thereof, shall thereupon cease; provided, however, that the
Trustee or such Paying Agent, before being required to make any such repayment,
may at the expense of the Company cause to be published once, in The New York
Times and The Wall Street Journal (national edition), notice that such money
remains unclaimed and that, after a date specified therein, which shall not be
less than 30 days from the date of such notification or publication, any
unclaimed balance of such money then remaining will be repaid to the Company.
SECTION 8.7. REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any United States
dollars or non-callable Government Securities in accordance with Section 8.2 or
8.3 hereof, as the case may be, by reason of any order or judgment of any court
or governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Company's obligations under this Indenture and the Notes
shall be revived and reinstated as though no deposit had occurred pursuant to
Section 8.2 or 8.3 hereof until such time as the Trustee or Paying Agent is
permitted to apply all such money in accordance with Section 8.2 or 8.3 hereof,
as the case may be; provided, however, that, if the Company makes any payment of
principal of, premium, if any, or interest on any Note following the
reinstatement of its obligations, the Company shall be subrogated to the rights
of the Holders of such Notes to receive such payment from the money held by the
Trustee or Paying Agent.
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
SECTION 9.1. WITHOUT CONSENT OF HOLDERS OF NOTES.
Notwithstanding Section 9.2 of this Indenture, the Company and the Trustee
may amend or supplement this Indenture or the Notes without the consent of any
Holder of a Note:
(a) to cure any ambiguity, defect or inconsistency, provided that
such action shall not adversely affect the interests of the Holders in any
material respect;
(b) to provide for uncertificated Notes in addition to or in place
of certificated Notes;
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(c) to provide for the assumption of the Company's obligations to
the Holders of the Notes in the case of a merger or consolidation pursuant to
Article 5 hereof;
(d) to make any change that would provide any additional rights or
benefits to the Holders of the Notes or that does not adversely affect the legal
rights hereunder of any Holder of the Notes;
(e) to comply with requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the TIA; or
(f) at any time prior to the issuance of any Notes hereunder, to
make any changes determined appropriate by the Board of Directors.
Upon the request of the Company accompanied by a resolution of its Board
of Directors authorizing the execution of any such amended or supplemental
indenture, and upon receipt by the Trustee of the documents described in Section
7.2 hereof, the Trustee shall join with the Company in the execution of any
amended or supplemental indenture authorized or permitted by the terms of this
Indenture and make any further appropriate agreements and stipulations that may
be therein contained, but the Trustee shall not be obligated to enter into such
amended or supplemental Indenture that affects its own rights, duties or
immunities under this Indenture or otherwise.
SECTION 9.2. WITH CONSENT OF HOLDERS OF NOTES.
Except as provided below in this Section 9.2, the Company and the Trustee
may amend or supplement this Indenture and the Notes may be amended or
supplemented with the consent of the Holders of a majority in principal amount
of the Notes then outstanding (including, without limitation, consents obtained
in connection with a purchase of, or tender offer or exchange offer for, the
Notes), and, subject to Sections 6.4 and 6.7 hereof, any existing Default or
Event of Default or compliance with any provision of this Indenture or the Notes
may be waived with the consent of the Holders of a majority in principal amount
of the then outstanding Notes (including consents obtained in connection with a
tender offer or exchange offer for the Notes).
Upon the request of the Company accompanied by a resolution of its Board
of Directors authorizing the execution of any such amended or supplemental
indenture, and upon the filing with the Trustee of evidence satisfactory to the
Trustee of the consent of the Holders of Notes as aforesaid, and upon receipt by
the Trustee of the documents described in Section 7.2 hereof, the Trustee shall
join with the Company in the execution of such amended or supplemental indenture
unless such amended or supplemental indenture affects the Trustee's own rights,
duties or immunities under this Indenture or otherwise, in which case the
Trustee may in its discretion, but shall not be obligated to, enter into such
amended or supplemental indenture.
It shall not be necessary for the consent of the Holders of Notes under
this Section 9.2 to approve the particular form of any proposed amendment or
waiver, but it shall be sufficient if such consent approves the substance
thereof.
After an amendment, supplement or waiver under this Section becomes
effective, the Company shall mail to the Holders of Notes affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure of
the Company to mail such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such amended or
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supplemental Indenture or waiver. Subject to Sections 6.4 and 6.7 hereof, the
Holders of a majority in aggregate principal amount of the Notes then
outstanding may waive compliance in a particular instance by the Company with
any provision of this Indenture or the Notes. However, without the consent of
each Holder affected, an amendment or waiver may not (with respect to any Notes
held by a non-consenting Holder):
(a) reduce the principal amount of Notes whose Holders must consent
to an amendment, supplement or waiver;
(b) reduce the principal of or change the fixed maturity of any Note
or alter any of the provisions with respect to the redemption of the Notes
(except as provided in Section 4.8 hereof);
(c) reduce the rate of or change the time for payment of interest on
any Note;
(d) make any Note payable in money other than that stated in the
Notes;
(e) make any changes to Sections 6.4 or 6.7; or
(f) make any change in the foregoing amendment and waiver
provisions.
SECTION 9.3. COMPLIANCE WITH TRUST INDENTURE ACT.
Every amendment or supplement to this Indenture or the Notes shall be set
forth in an amended or supplemental Indenture that complies with the TIA as then
in effect.
SECTION 9.4. REVOCATION AND EFFECT OF CONSENTS.
Until an amendment, supplement or waiver becomes effective, a consent to
it by a Holder of a Note is a continuing consent by the Holder of a Note and
every subsequent Holder of a Note or portion of a Note that evidences the same
debt as the consenting Holder's Note, even if notation of the consent is not
made on any Note. However, any such Holder of a Note or subsequent Holder of a
Note may revoke the consent as to its Note if the Trustee receives written
notice of revocation before the date the waiver, supplement or amendment becomes
effective. An amendment, supplement or waiver becomes effective in accordance
with its terms and thereafter binds every Holder.
SECTION 9.5. NOTATION ON OR EXCHANGE OF NOTES.
The Trustee may place an appropriate notation about an amendment,
supplement or waiver on any Note thereafter authenticated. The Company in
exchange for all Notes may issue and the Trustee shall authenticate new Notes
that reflect the amendment, supplement or waiver.
Failure to make the appropriate notation or issue a new Note shall not
affect the validity and effect of such amendment, supplement or waiver.
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SECTION 9.6. TRUSTEE TO SIGN AMENDMENTS, ETC.
The Trustee shall sign any amended or supplemental indenture authorized
pursuant to this Article 9 if the amendment or supplement does not adversely
affect the rights, duties, liabilities or immunities of the Trustee. The Company
may not sign an amendment or supplemental indenture until the Board of Directors
approves it. In executing any amended or supplemental indenture, the Trustee
shall be entitled to receive and (subject to Section 7.1) shall be fully
protected in relying upon, an Officers' Certificate and an Opinion of Counsel
stating that the execution of such amended or supplemental indenture is
authorized or permitted by this Indenture.
ARTICLE 10
SUBORDINATION
SECTION 10.1. AGREEMENT TO SUBORDINATE.
The Company agrees, and each Holder by accepting a Note agrees, that the
Indebtedness evidenced by the Note is subordinated in right of payment, to the
extent and in the manner provided in this Article 10, to the prior payment in
full of all Senior Debt (whether outstanding on the date hereof or hereafter
created, incurred, assumed or guaranteed), and that the subordination is for the
benefit of the holders of Senior Debt.
SECTION 10.2. LIQUIDATION; DISSOLUTION; BANKRUPTCY.
Upon any distribution to creditors of the Company in a liquidation or
dissolution of the Company or in a bankruptcy, reorganization, insolvency,
receivership or similar proceeding relating to the Company or its property, in
an assignment for the benefit of creditors or any marshalling of the Company's
assets and liabilities:
(a) holders of Senior Debt shall be entitled to receive payment in
full of all Obligations due in respect of such Senior Debt (including interest
after the commencement of any such proceeding at the rate specified in the
applicable Senior Debt) before Holders shall be entitled to receive any payment
with respect to the Notes; and
(b) until all Obligations with respect to Senior Debt are paid in
full, any distribution to which Holders would be entitled but for this Article
10 shall be made to holders of Senior Debt (except that Holders may receive
securities, including capital stock, that are subordinated at least to the same
extent as the Notes to Senior Debt and any securities issued in exchange for
Senior Debt).
SECTION 10.3. DEFAULT ON SENIOR DEBT.
(a) The Company may not make any payment or distribution to the
Trustee or any Holder in respect of Obligations with respect to the Notes and
may not acquire from the Trustee or any Holder any Notes for cash or property
(other than securities, including capital stock, that are subordinated at least
to the same extent as the Notes to Senior Debt and any securities issued in
exchange for Senior Debt) until all principal and other Obligations with respect
to the Senior Debt have been paid in full if:
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(i) a default in the payment of any principal or other
Obligations with respect to any Senior Debt occurs and is continuing
beyond any applicable grace period in the agreement, indenture or other
document governing such Senior Debt; or
(ii) a default, other than a payment default, on Senior Debt
occurs and is continuing that then permits holders of the Senior Debt to
accelerate its maturity and the Trustee receives a notice of the default
(a "Payment Blockage Notice") from the Company or a Person who may give it
pursuant to Section 10.12 hereof. If the Trustee receives any such Payment
Blockage Notice, no subsequent Payment Blockage Notice shall be effective
for purposes of this Section unless and until at least 360 days shall have
elapsed since the date of receipt by the Trustee of the immediately prior
Payment Blockage Notice. No nonpayment default that existed or was
continuing on the date of delivery of any Payment Blockage Notice to the
Trustee shall be, or be made, the basis for a subsequent Payment Blockage
Notice (it being understood that any subsequent action, or any breach of
any covenant during the period commencing after the date of receipt by the
Trustee of such Payment Blockage Notice, that, in either case, would give
rise to such a default pursuant to any provision under which a default
previously existed or was continuing shall constitute a new default for
this purpose).
(b) The Company may and shall resume payments on and distributions
in respect of the Notes and may acquire them upon the earlier of: (i) in the
case of a default referred to in Section 10.3(a)(i) hereof, the date upon which
the default is cured or waived, or (ii) in the case of a default referred to in
Section 10.3(a)(ii) hereof, the earlier of (1) the date on which such default is
cured or waived or (2) 179 days after the applicable Payment Blockage Notice is
received by the Company if the maturity of such Senior Debt has not been
accelerated (or, if such Senior Debt has been accelerated, such Senior Debt has
not been paid in full) and if this Article 10 otherwise permits the payment,
distribution or acquisition at the time of such payment or acquisition.
SECTION 10.4. ACCELERATION OF NOTES.
If payment of the Notes is accelerated because of an Event of Default, the
Company shall promptly notify holders of Senior Debt of the acceleration.
SECTION 10.5. WHEN DISTRIBUTION MUST BE PAID OVER.
(a) In the event that the Trustee or any Holder receives any payment
of any Obligations with respect to the Notes at a time when the Trustee or such
Holder, as applicable, has actual knowledge that such payment is prohibited by
Section 10.3 hereof, such payment shall be held by the Trustee or such Holder in
trust for the benefit of, and shall be paid forthwith over and delivered, upon
written request, to, the holders of Senior Debt as their interests may appear or
their representative (the "Representative") under the indenture or other
agreement (if any) pursuant to which Senior Debt may have been issued, as their
respective interests may appear, for application to the payment of all
Obligations with respect to Senior Debt remaining unpaid to the extent necessary
to pay such Obligations in full in accordance with their terms, after giving
effect to any concurrent payment or distribution to or for the holders of Senior
Debt.
(b) With respect to the holders of Senior Debt, the Trustee
undertakes to perform only such obligations on the part of the Trustee as are
specifically set forth in this Article 10, and no implied covenants or
obligations with respect to the holders of Senior Debt shall be read into this
Indenture against the Trustee. The Trustee shall not be deemed to owe any
fiduciary duty to the
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holders of Senior Debt, and shall not be liable to any such holders if the
Trustee shall pay over or distribute to or on behalf of Holders or the Company
or any other Person money or assets to which any holders of Senior Debt shall be
entitled by virtue of this Article 10, except if such payment is made as a
result of the willful misconduct or gross negligence of the Trustee.
SECTION 10.6. NOTICE BY COMPANY.
The Company shall promptly notify the Trustee and the Paying Agent in
writing of any facts known to the Company that would cause a payment of any
Obligations with respect to the Notes to violate this Article 10, but failure to
give such notice shall not affect the subordination of the Notes to the Senior
Debt as provided in this Article 10. The Trustee or any Paying Agent shall not
be deemed to have knowledge of any facts or circumstances causing any payment of
any Obligations with respect to the Notes to violate this Article 10 unless it
shall have received written notice thereof in accordance with the terms of this
Indenture, and such notice shall not be deemed to include receipt of information
obtained in any information, documents and reports furnished, filed or delivered
to the Trustee under Section 4.3.
SECTION 10.7. SUBROGATION.
After all Senior Debt is paid in full and until the Notes are paid in
full, Holders shall be subrogated (equally and ratably with all other
Indebtedness pari passu with the Notes) to the rights of holders of Senior Debt
to receive distributions applicable to Senior Debt to the extent that
distributions otherwise payable to the Holders have been applied to the payment
of Senior Debt. A distribution made under this Article 10 to holders of Senior
Debt that otherwise would have been made to Holders is not, as between the
Company and Holders, a payment by the Company on the Notes.
SECTION 10.8. RELATIVE RIGHTS.
(a) This Article 10 defines the relative rights of Holders and
holders of Senior Debt. Nothing in this Indenture shall: (i) impair, as between
the Company and Holders, the obligation of the Company, which is absolute and
unconditional, to pay principal of and interest on the Notes in accordance with
their terms; (ii) affect the relative rights of Holders and creditors of the
Company other than their rights in relation to holders of Senior Debt; or (iii)
prevent the Trustee or any Holder from exercising its available remedies upon a
Default or Event of Default, subject to the rights of holders and owners of
Senior Debt to receive distributions and payments otherwise payable to Holders.
(b) If the Company fails because of this Article 10 to pay principal
of, premium, if any, or interest on a Note on the due date, the failure is still
a Default or Event of Default.
SECTION 10.9. SUBORDINATION MAY NOT BE IMPAIRED BY COMPANY.
No right of any holder of Senior Debt to enforce the subordination of the
Indebtedness evidenced by the Notes shall be impaired by any act or failure to
act by the Company or any Holder or by the failure of the Company or any Holder
to comply with this Indenture.
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SECTION 10.10. DISTRIBUTION OR NOTICE TO REPRESENTATIVE.
Whenever a distribution is to be made or a notice given to holders of
Senior Debt, the distribution may be made and the notice given to their
Representative.
Upon any payment or distribution of assets of the Company referred to in
this Article 10, the Trustee and the Holders shall be entitled to rely upon any
order or decree made by any court of competent jurisdiction or upon any
certificate of such Representative or of the liquidating trustee or agent or
other Person making any distribution to the Trustee or to the Holders for the
purpose of ascertaining the Persons entitled to participate in such
distribution, the holders of the Senior Debt and other Indebtedness of the
Company, the amount thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to this Article 10.
SECTION 10.11. RIGHTS OF TRUSTEE AND PAYING AGENT.
Notwithstanding the provisions of this Article 10 or any other provision
of this Indenture, the Trustee shall not be charged with knowledge of the
existence of any facts that would prohibit the making of any payment or
distribution by the Trustee, and the Trustee and the Paying Agent may continue
to make payments on the Notes, unless the Trustee shall have received at its
Corporate Trust Office at least five Business Days prior to the date of such
payment written notice of facts that would cause the payment of any Obligations
with respect to the Notes to violate this Article 10. Only the Company or a
Representative may give the notice. Nothing in this Article 10 shall impair the
claims of, or payments to, the Trustee under or pursuant to Section 7.7 hereof.
The Trustee in its individual or any other capacity may hold Senior Debt
with the same rights it would have if it were not Trustee. Any Agent may do the
same with like rights.
SECTION 10.12. AUTHORIZATION TO EFFECT SUBORDINATION.
Each Holder of a Note by the Holder's acceptance thereof authorizes and
directs the Trustee on the Holder's behalf to take such action as may be
necessary or appropriate to effectuate the subordination as provided in this
Article 10, and appoints the Trustee to act as the Holder's attorney-in-fact for
any and all such purposes. If the Trustee does not file a proper proof of claim
or proof of debt in the form required in any proceeding referred to in Section
6.9 hereof at least 30 days before the expiration of the time to file such
claim, the Holders are hereby authorized to file an appropriate claim.
SECTION 10.13. AMENDMENTS.
The provisions of this Article 10 shall not be amended or modified at any
time after the issuance of any Notes hereunder without the written consent of
the holders of all Senior Debt (in accordance with the provisions thereof).
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ARTICLE 11
CONVERSION OF NOTES
SECTION 11.1. RIGHT TO CONVERT.
Subject to and upon compliance with the provisions of this Indenture, the
Holder of any Note shall have the right, at the option of such Holder, at any
time (except that, with respect to any Note or portion of a Note that shall be
called for redemption or delivered for repurchase, such right shall terminate
immediately prior to close of business on the date fixed for redemption of such
Note or portion of such Note unless the Company shall default in payment due
upon redemption thereof) to convert the principal amount of any such Note, or
any portion thereof, into that number of fully paid and nonassessable shares of
Common Stock (as such shares shall then be constituted) obtained by dividing the
aggregate principal amount of the Notes or portion thereof surrendered for
conversion by the Conversion Price in effect at such time, by surrender of the
Note so to be converted in whole or in part in the manner provided in Section
11.2 hereof. Immediately following such conversion, the rights of the Holders of
converted Notes shall cease and the Persons entitled to receive the Common Stock
upon the conversion of Notes shall be treated for all purposes as having become
the owners of such Common Stock.
SECTION 11.2. EXERCISE OF CONVERSION PRIVILEGE; ISSUANCE OF COMMON STOCK ON
CONVERSION; NO ADJUSTMENT FOR INTEREST OR DIVIDENDS.
In order to exercise the conversion privilege with respect to any Note in
definitive form, a Holder must (a) surrender such Note to be converted, duly
endorsed and in a form satisfactory to the Company, at an office or agency
maintained by the Company pursuant to Section 4.2 hereof, accompanied by the
funds, if any, required by the last paragraph of this Section 11.2, (b) notify
the Company at such office that he elects to convert such Note or a portion
thereof, specifying the principal amount he wishes to convert, (c) state in
writing the name or names (with address) in which he wishes the certificate or
certificates for shares of Common Stock to be issued and (d) pay any transfer
taxes, if required pursuant to Section 11.7 hereof. The date on which the Holder
satisfies all those requirements is the "Conversion Date." Each such Note
surrendered for conversion shall, unless the shares issuable on conversion are
to be issued in the name of the Holder of such Note as it appears on the Note
register, be accompanied by instruments of transfer in form satisfactory to the
Company duly executed by the Holder or his duly authorized attorney.
In order to exercise the conversion privilege with respect to any interest
in a Global Note, the beneficial Holder must complete the appropriate
instruction form for conversion pursuant to the Depositary's book-entry
conversion program and follow the other procedures set forth in such program.
As promptly as practicable after the Conversion Date, subject to
compliance with any restrictions on transfer if shares issuable on conversion
are to be issued in a name other than that of the Holder (as if such transfer
were a transfer of the Note or Notes (or portion thereof) so converted), the
Company shall issue and shall deliver to such Holder at the office or agency
maintained by the Company for such purpose pursuant to Section 4.2 hereof, a
certificate or certificates for the number of full shares issuable upon the
conversion of such Note or portion thereof in accordance with the provisions of
this Article 11 and a payment in cash in respect of any fractional interest in
respect of a share of Common Stock arising upon such conversion, as provided in
Section 11.3 hereof. In case
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any Note shall be surrendered for partial conversion, and subject to Section 2.3
hereof, the Company shall execute and the Trustee shall authenticate and make
available for delivery to the Holder of the Note so surrendered, without charge
to him, a new Note or Notes in authorized denominations in an aggregate
principal amount equal to the unconverted portion of the surrendered Note.
Each conversion shall be deemed to have been effected as to any Note (or
portion thereof) on the Conversion Date, and the Person in whose name any
certificate or certificates for shares of Common Stock shall be issuable upon
such conversion shall be deemed to have become on such date the Holder of record
of the shares represented thereby; provided that any such surrender on any date
when the stock transfer books of the Company shall be closed shall constitute
the Person in whose name the certificates are to be issued as the record holder
thereof for all purposes on the next succeeding day on which such stock transfer
books are open, but such conversion shall be at the Conversion Price in effect
on the date upon which such Note shall have been surrendered.
The Holder of record of a Note at the close of business on a record date
with respect to the payment of interest on the Notes will be entitled to receive
such interest with respect to such Notes on the corresponding interest payment
date, notwithstanding the conversion of such Notes after such record date and
prior to such interest payment date. Notes surrendered for conversion during the
period from the close of business on any record date for the payment of interest
to the opening of business of the corresponding interest payment date must be
accompanied by a payment in cash in an amount equal to the interest payable on
such interest payment date, unless such Notes have been called for redemption on
a redemption date occurring during the period from the close of business on any
record date for the payment of interest to the close of business on the business
day immediately following the corresponding interest payment date. The interest
payment with respect to any Note called for redemption on a date during the
period from the close of business on any record date for the payment of interest
to the close of business on the business day immediately following the
corresponding interest payment date will be payable on such interest payment
date to the record Holder of such Note on such record date, notwithstanding the
conversion of such Note after such record date and prior to such interest
payment date. Except as provided in this Section 11.2, no payment or adjustment
will be made upon conversion of Notes for accrued and unpaid interest or for
dividends with respect to the Common Stock issued upon such conversion of Notes
as provided in this Article 11.
Upon the conversion of any interest in a Global Note, the Trustee, or the
Note Custodian at the direction of the Trustee, shall make a notation on such
Global Note as to the reduction in the principal amount represented thereby.
SECTION 11.3. CASH PAYMENTS IN LIEU OF FRACTIONAL SHARES.
The Company shall not issue a fractional share of Common Stock upon
conversion of the Notes. Instead the Company shall pay a cash adjustment for the
current market value of the fractional share. The current market value of a
fraction of a share shall be determined as follows: Multiply the current market
price of a full share by the fraction. Round the result to the nearest cent. The
current market price of a share of Common Stock is the Closing Price of the
Common Stock on the last Trading Day prior to the Conversion Date.
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SECTION 11.4. CONVERSION PRICE.
The "Conversion Price" shall be that amount as determined pursuant to the
Company's Restated Certificate of Incorporation with respect to the 8 3/4%
Series B Convertible Exchangeable Preferred Stock, filed with the Secretary of
State of the State of New Jersey on August 8, 1997, as amended through the date
of the exchange of the Preferred Stock for the Notes, on the date of exchange
of the Preferred Stock for the Notes, subject to adjustment as provided in
this Article 11. Notice of the initial Conversion Price shall be set forth in
the Officers' Certificate delivered to the Trustee pursuant to Section 2.2
hereof and the Company shall notify the Trustee of any adjustments in the
Conversion Price as soon as practicable after determination.
SECTION 11.5. 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 pay or make a dividend or other
distribution on any class of capital stock of the Company in Common Stock, the
Conversion Price in effect at the opening of business on the day following the
date fixed for the determination of shareholders entitled to receive such
dividend or other distribution shall be reduced by multiplying such Conversion
Price by a fraction the numerator of which shall be the number of shares of
Common Stock outstanding at the close of business on the date fixed for such
determination and the denominator of which shall be the sum of such number of
shares and the total number shares constituting such dividend or other
distribution, such reduction to become effective immediately after the opening
of business on the day following the date fixed for such determination of the
holders entitled to such dividends and distributions. For the purposes of this
Section 11.5(a), the number of shares of Common Stock at any time outstanding
shall not include shares held in the treasury of the Company. The Company shall
not pay any dividend or make any distribution on shares of Common Stock held in
the treasury of the Company.
(b) In case the Company shall issue rights, options or warrants to
all holders of its Common Stock entitling them to subscribe for, purchase or
acquire shares of Common Stock at a price per share less than the current market
price per share of the Common Stock on the date fixed for the determination of
shareholders entitled to receive such rights, options or warrants, the
Conversion Price in effect at the opening of business on the day following the
date fixed for such determination shall be reduced by multiplying such
Conversion Price by a fraction the numerator of which shall be the number of
shares of Common Stock outstanding at the close of business on the date fixed
for such determination plus the number of shares of Common Stock which the
aggregate of the offering price of the total number of shares of Common Stock so
offered for subscription, purchase or acquisition would purchase at such current
market price and the denominator of which shall be the number of shares of
Common Stock outstanding at the close of business on the date fixed for such
determination plus the number of shares of Common Stock so offered for
subscription, purchase or acquisition, such reduction to become effective
immediately after the opening of business on the day following the date fixed
for such determination of the holders entitled to such right, options or
warrants. However, upon the expiration of any right, option or warrant to
purchase Common Stock, the issuance of which resulted in an adjustment in the
Conversion Price pursuant to this Section 11.5(b), if any such right, option or
warrant shall expire and shall not have been exercised, the Conversion Price
shall be recomputed immediately upon such expiration and effective immediately
upon such expiration shall be increased to the price it would have been (but
reflecting any other adjustments to the Conversion Price made pursuant to the
provisions of Section 11.5 hereof
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after the issuance of such rights, options or warrants) had the adjustment of
the Conversion Price made upon the issuance of such rights, options or warrants
been made on the basis of offering for subscription or purchase only that number
of shares of Common Stock actually purchased upon the exercise of such rights,
options or warrants. No further adjustment shall be made upon exercise of any
right, option or warrant if any adjustment shall have been made upon the
issuance of such security. For the purposes of this Section 11.5(b), the number
of shares of Common Stock at any time outstanding shall not include shares held
in the treasury of the Company. The Company shall not issue any rights, options
or warrants in respect of shares of Common Stock held in the treasury of the
Company.
(c) In case the outstanding shares of Common Stock shall be
subdivided into a greater number of shares of Common Stock, the Conversion Price
in effect at the opening of business on the day following the day upon which
such subdivision becomes effective shall be reduced, and, conversely, in case
the outstanding shares of Common Stock shall each 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 increased, to equal the product of the Conversion Price in
effect on such date and a fraction the numerator of which shall be the number of
shares of Common Stock outstanding immediately prior to such subdivision or
combination, as the case may be, and the denominator of which shall be the
number of shares of Common Stock outstanding immediately after such subdivision
or combination, as the case may be. Such reduction or increase, as the case may
be, shall 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 (i) evidences of its indebtedness or (ii)
shares of any class of capital stock, cash or other assets (including
securities, but excluding (1) any rights, options or warrants referred to in
Section 11.5(b) hereof, (2) any dividend or distribution referred to in Section
11.5(a) hereof, and (3) cash dividends paid from the Company's retained earnings
unless the sum of (A) all such cash dividends and distributions made within the
preceding 12 months in respect of which no adjustment has been made and (B) any
cash and the fair market value of other consideration paid in respect of any
repurchases of Common Stock by the Company or any of its subsidiaries within the
preceding 12 months in respect of which no adjustment has been made, exceeds 20%
of the Company's market capitalization (being the product of the then current
market price per share of the Common Stock times the aggregate number of shares
of Common Stock then outstanding) on the record date for such distribution),
then in each case, the Conversion Price in effect at the opening of business on
the day following the date fixed for the determination of holders of Common
Stock entitled to receive such distribution shall be adjusted by multiplying
such Conversion Price by a fraction of which the numerator shall be the current
market price per share of the Common Stock on such date of determination (or, if
earlier, on the date on which the Common Stock goes "ex-dividend" in respect of
such distribution) less the then fair market value as determined by the Board of
Directors (whose determination shall be conclusive and shall be described in a
statement filed with any conversion agent) of the portion of the capital stock,
cash or other assets or evidences of indebtedness so distributed (and for which
an adjustment to the Conversion Price has not previously been made pursuant to
the terms of this Section 11.5) applicable to one share of Common Stock, and the
denominator shall be such current market price per share of the Common Stock,
such adjustment to become effective immediately after the opening of business on
the day following such date of determination of the holders entitled to such
distribution. The following transactions shall be excluded from the foregoing
clauses (A) and (B): (x) repurchases of Common Stock issued under the
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Company's stock incentive programs and (y) dividends or distributions
payable-in-kind in additional shares of or warrants, rights, calls or options
exercisable for or convertible into additional shares of Junior Securities.
(e) The reclassification or change of Common Stock into securities
including securities other than Common Stock (other than any reclassification
upon a consolidation or merger to which Section 11.6 shall apply) shall be
deemed to involve (i) a distribution of such securities other than Common Stock
to all holders of Common Stock (and the effective date of such reclassification
shall be deemed to be "the date fixed for the determination of holders of Common
Stock entitled to receive such distribution" within the meaning of Section
11.5(d) hereof), and (ii) a subdivision or combination, as the case may be, of
the number of shares of Common Stock outstanding immediately prior to such
reclassification into the number of shares of Common Stock outstanding
immediately thereafter (and the effective date of such reclassification shall be
deemed to be "the day upon which such subdivision becomes effective" or "the day
upon which such combination becomes effective," as the case may be, and "the day
upon which such subdivision or combination becomes effective" within the meaning
of Section 11.5(c) hereof).
(f) The Company from time to time may reduce the Conversion Price if
it considers such reductions to be advisable in order that any event treated for
federal income tax purposes as a dividend of stock rights will not be taxable to
the holders of Common Stock by any amount, but in no event may the Conversion
Price be less than the par value of a share of Common Stock. Whenever the
Conversion Price is reduced, the Company shall mail to Holders of record of
Notes a notice of the reduction. The Company shall mail the notice at least 15
days before the date the reduced Conversion Price takes effect. The notice shall
state the reduced Conversion Price and the period it will be in effect. A
reduction of the Conversion Price does not change or adjust the Conversion Price
otherwise in effect for purposes of Sections 11.5(a), (b), (c), (d) and (e)
hereof.
(g) No adjustment in the Conversion Price need be made until all
cumulative adjustments amount to at least 1% in the Conversion Price, as last
adjusted; provided that any adjustments that by reason of this Section 11.5(g)
are not required to be made shall be carried forward and taken into account in
any subsequent adjustment. All calculations under this Article 11 shall be made
by the Company and shall be made to the nearest cent.
(h) For the purpose of any computation under Section 11.5, the
current market price per share of Common Stock on any day shall be deemed to be
the average of the Closing Prices of the Common Stock for the 20 consecutive
Trading Days selected by the Board of Directors commencing no more than 30
Trading Days before and ending no later than the day before the day in question;
provided that, in the case of Section 11.5(d) hereof, if the period between the
date of the public announcement of the dividend or distribution and the date for
the determination of holders of Common Stock entitled to receive such dividend
or distribution (or, if earlier, the date on which the Common Stock goes
"ex-dividend" in respect of such dividend or distribution) shall be less than 20
Trading Days, the period shall be such lesser number of Trading Days but, in any
event, not less than five Trading Days.
(i) No adjustment in the Conversion Price shall reduce the
Conversion Price below the then par value of the Common Stock. No adjustment in
the Conversion Price need be made under Section 11.5(a), (b) or (d) hereof if
the Company issues or distributes to each Holder of Notes the shares of Common
Stock, evidences of indebtedness, assets, rights, options or warrants referred
to in
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those paragraphs which each Holder would have been entitled to receive had Notes
been converted into Common Stock prior to the happening of such event or the
record date with respect thereto.
(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 fact requiring
such adjustment. Promptly after delivery of such certificate, the Company shall
prepare a notice of such adjustment of the Conversion Price setting forth the
adjusted Conversion Price and the date on which each adjustment became effective
and shall mail such notice of such adjustment of the Conversion Price to each
Holder of Notes at his last address appearing on the Note register provided for
in Section 2.5 hereof, within 20 days after execution thereof. Failure to
deliver such notice shall not effect the legality or validity of any such
adjustment.
(k) In any case in which this Section 11.5 shall require that an
adjustment as a result of any event become effective from and after a record
date, the Company may elect to defer until after the occurrence of such event
(i) the issuance to the Holder of and Notes converted after such record date and
before the occurrence of such event of the additional shares of Common Stock
issuable upon such conversion over and above the shares issuable on the basis of
the Conversion Price in effect immediately prior to adjustment and (ii) a cash
payment for any remaining fractional shares of Common Stock as provided in
Section 11.3 hereof; provided, however, that if such event shall not have
occurred and authorization of such event shall be rescinded by the Company, the
Conversion Price shall be recomputed immediately upon such recision to the price
that would have been in effect had such event not been authorized, provided that
such recision is permitted by and effective under applicable laws.
SECTION 11.6. EFFECT OF RECLASSIFICATION, CONSOLIDATION, MERGER OR SALE.
In the case of any consolidation of the Company or the merger of the
Company with or into any other entity or the sale or transfer of all or
substantially all the assets of the Company pursuant to which the Company's
Common Stock is converted into other securities, cash or assets, the Company or
the successor or purchasing corporation, as the case may be, shall execute with
the Trustee a supplemental indenture providing that the Notes shall be
convertible into the kind and amount of securities, cash or other assets
receivable upon such consolidation, merger, sale or transfer by a holder of the
number of shares of Common Stock into which such Notes might have been converted
immediately prior to such consolidation, merger, transfer or sale (assuming such
holder of Common Stock failed to exercise any rights of election and received
per share the kind and amount receivable per share by a plurality of
non-electing shares). Such supplemental indenture shall provide for adjustments
that shall be as nearly equivalent as may be practicable to the adjustments
provided for in this Article 11.
The Company shall cause notice of the execution of such supplemental
indenture to be mailed to each Holder of Notes within 20 days after execution
thereof. Failure to deliver such notice shall not affect the legality or
validity of such supplemental indenture.
The above provisions of this Section 11.6 shall similarly apply to
successive reclassifications, changes, consolidations, mergers, combinations,
sales and conveyances.
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SECTION 11.7. TAXES ON SHARES ISSUED.
If a Holder converts Notes, 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 that is due because
the shares are issued in a name other than the Holder's name.
SECTION 11.8. RESERVATION OF SHARES; SHARES TO BE FULLY PAID; LISTING OF COMMON
STOCK.
The Company has reserved and shall continue to 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 the Notes in full. All shares
of Common Stock that may be issued upon conversion of Notes shall be fully paid
and nonassessable. The Company shall endeavor to comply with all securities laws
regulating the offer and delivery of shares of Common Stock upon conversion of
Notes and shall endeavor to list such shares on each national securities
exchange on which the Common Stock is listed.
SECTION 11.9. COMMON STOCK ISSUABLE UPON CONVERSION.
For purposes of this Article 11, "Common Stock" includes any stock of any
class of the Company which has no preference in respect of dividends or of
amounts payable in the event of any voluntary or involuntary liquidation,
dissolution or winding-up of the Company and which is not subject to redemption
by the Company. However, subject to the provisions of Section 11.5(b) hereof,
shares issuable on conversion of Notes shall include only shares of the class
designated as Common Stock of the Company on the date of issuance of the
Preferred Stock pursuant to the Offering or shares of any class or classes
resulting from any reclassification thereof and which have no preferences in
respect of dividends or amounts payable in the event of any voluntary or
involuntary liquidation, dissolution or winding-up of the Company and which are
not subject to redemption by the Company; provided that, if at any time there
shall be more than one such resulting class, the shares of each such class then
so issuable shall be substantially in the proportion which the total number of
shares of such class resulting from all such reclassifications bears to the
total number of shares of all such classes resulting from all such
reclassifications.
SECTION 11.10. RESPONSIBILITY OF TRUSTEE.
The Trustee and any other conversion agent shall not at any time be under
any duty or responsibility to any Holder of Notes to make a determination
whether any facts exist that may require any adjustment of the Conversion Price,
or with respect to the nature or extent or calculation of any such adjustment
when made, or with respect to the method employed, or herein or in any
supplemental indenture provided to be employed, in making the same. The Trustee
and any other conversion agent shall not be accountable with respect to the
validity or value (or the kind or amount) of any shares of Common Stock, or of
any securities or property, that may at any time be issued or delivered upon the
conversion of any Note; and the Trustee and any other conversion agent make no
representations with respect thereto. Subject to the provisions of Section 7.1
hereof, neither the Trustee nor any conversion agent shall be responsible for
any failure of the Company to issue, transfer or deliver any shares of Common
Stock or stock certificates or other securities or property or cash upon the
surrender of any Note for the purpose of conversion or to comply with any of the
duties, responsibilities or covenants of the Company contained in this Article
11. Without limiting
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the generality of the foregoing, neither the Trustee nor any conversion agent
shall be under any responsibility to determine whether a supplemental indenture
under Section 11.6 hereof is required to be entered into or the correctness of
any provisions contained in any supplemental indenture entered into pursuant to
Section 11.6 relating either to the amount of shares receivable by Holders upon
the conversion of their Notes after any event referred to in Section 11.6 hereof
or to any adjustment to be made with respect thereto, but, subject to the
provisions of Section 7.1 hereof, may accept as conclusive evidence of the
correctness of any such provisions, and shall be protected in relying upon, the
Officers' Certificate (which the Company shall be obligated to file with the
Trustee prior to the execution of any such supplemental indenture) with respect
thereto.
SECTION 11.11. NOTICE TO HOLDERS PRIOR TO CERTAIN ACTIONS.
In case (a) the Company makes any distribution or dividend that would
require an adjustment in the Conversion Price pursuant to Section 11.5 hereof,
(b) the Company takes any action that would require a supplemental indenture
pursuant to Section 11.6 hereof or (c) of the voluntary or involuntary
dissolution, liquidation or winding-up of the Company, the Company shall cause
to be filed with the Trustee and to be mailed to each Holder of Notes as
promptly as possible but in any event at least 15 days prior to the applicable
date hereinafter specified, a notice stating (i) the date on which a record date
is to be taken for the purpose of such dividend, distribution, rights, options
or warrants, or, if a record is not to be taken, the date as of which the
holders of Common Stock of record to be entitled to such dividend, distribution,
rights, options or warrants are to be determined or (ii) the date on which such
reclassification, change, consolidation, merger, sale, conveyance, transfer,
dissolution, liquidation or winding-up is expected to become effective or occur
and the date as of which it is expected that holders of record of Common Stock
shall be entitled to exchange their Common Stock for securities or other
property deliverable upon such reclassification, change, consolidation, merger,
sale, conveyance, transfer, dissolution, liquidation or winding-up. Neither the
failure to give such notice nor any defect therein shall affect the legality or
validity of the proceedings referenced in clauses (a) through (c) of this
Section 11.11.
ARTICLE 12
MISCELLANEOUS
SECTION 12.1. TRUST INDENTURE ACT CONTROLS.
If any provision of this Indenture limits, qualifies or conflicts with the
duties imposed by Subsection (c) of Section 318 of the TIA, the imposed duties
shall control. The provisions of Sections 310 to 317, inclusive, of the TIA that
impose duties on any Person (including provisions automatically deemed included
in an indenture unless the indenture provides that such provisions are excluded)
are a part of and govern this Indenture, except as, and to the extent, expressly
excluded from this Indenture, as permitted by the TIA.
SECTION 12.2. NOTICES.
Any notice or communication shall be in writing and delivered in person or
mailed by first class mail (registered or certified, return receipt requested),
or overnight air courier guaranteeing next day delivery, addressed as follows:
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If to the Company:
KTI, Inc.
0000 Xxxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Telecopier No.: (000) 000-0000
Attention: General Counsel
With a copy to:
XxXxxxxxx, Will & Xxxxx
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, XX 00000
Telecopier No.: (000) 000-0000
Attention: Xxxxx Xxxxxxxx, Esq.
If to the Trustee:
First Union National Bank
000 X. Xxxxxxxx Xxxxxxxxx
14th Floor (FL 6065)
Xxxxx, XX 00000
Telecopier No.: (000) 000-0000
Attention: Xx. Xxxx Xxxxxxxxxx
With a copy to:
Holland & Knight LLP
000 Xxxxxxxx Xxxxxx
Xxxxx, XX 00000
Telecopier: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxx, Esq.
The Company or the Trustee, by notice to the others may designate
additional or different addresses for subsequent notices or communications.
All notices and communications (other than those sent to Holders) shall be
deemed to have been duly given: at the time delivered by hand, if personally
delivered; five Business Days after being deposited in the mail, postage
prepaid, if mailed; and the next Business Day after timely delivery to the
courier, if sent by overnight air courier guaranteeing next day delivery.
Any notice or communication to a Holder shall be mailed by first class
mail, certified or registered, return receipt requested, or by overnight air
courier guaranteeing next day delivery to its address shown on the register kept
by the Registrar. Any notice or communication shall also be so mailed to any
Person described in TIA Section 313(c), to the extent required by the TIA.
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.
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If a notice or communication is mailed in the manner provided above within
the time prescribed, it is duly given, whether or not the addressee receives it.
If the Company mails or otherwise gives a notice or communication to
Holders, it shall similarly mail or give a copy to the Trustee and each Agent at
the same time.
SECTION 12.3. COMMUNICATION BY HOLDERS OF NOTES WITH OTHER HOLDERS OF NOTES.
Holders may communicate pursuant to TIA Section 312(b) with other Holders
with respect to their rights under this Indenture or the Notes. The Company, the
Trustee, the Registrar and anyone else shall have the protection of TIA Section
312(c).
SECTION 12.4. 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:
(a) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth in
Section 12.5 hereof) stating that, in the opinion of the signers, all conditions
precedent and covenants, if any, provided for in this Indenture relating to the
proposed action have been satisfied; and
(b) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth in
Section 12.5 hereof) stating that, in the opinion of such counsel, all such
conditions precedent and covenants have been satisfied.
SECTION 12.5. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
Each certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture (other than a certificate provided
pursuant to TIA Section 314(a)(4)) shall comply with the provisions of TIA
Section 314(e) and shall include:
(a) a statement that the Person making such certificate or opinion
has read such covenant or condition;
(b) 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;
(c) 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 satisfied; and
(d) a statement as to whether or not, in the opinion of such Person,
such condition or covenant has been satisfied.
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SECTION 12.6. RULES BY TRUSTEE AND AGENTS.
The Trustee may make reasonable rules for action by or at a meeting of
Holders. The Registrar or Paying Agent may make reasonable rules and set
reasonable requirements for its functions.
SECTION 12.7. NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND
SHAREHOLDERS.
No past, present or future director, officer, employee, incorporator or
shareholder of the Company, as such, shall have any liability for any
obligations of the Company under the Notes, 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 Note waives and releases all such liability. The
waiver and release are part of the consideration for issuance of the Notes.
SECTION 12.8. GOVERNING LAW.
THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO
CONSTRUE THIS INDENTURE AND THE NOTES.
SECTION 12.9. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret any other indenture, loan or
debt agreement of the Company or its Significant Subsidiaries or of any other
Person. Any such indenture, loan or debt agreement may not be used to interpret
this Indenture.
SECTION 12.10. SUCCESSORS.
All agreements of the Company in this Indenture and the Notes shall bind
their successors. All agreements of the Trustee in this Indenture shall bind its
successors.
SECTION 12.11. SEVERABILITY.
In case any provision in this Indenture or in the Notes shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
SECTION 12.12. COUNTERPART 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 12.13. 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 of this Indenture and shall in no way
modify or restrict any of the terms or provisions hereof.
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SIGNATURES
Dated as of May 12, 1998 KTI, INC.
By:
------------------------------------
Name:
Title:
Dated as of May 12, 1998 FIRST UNION NATIONAL BANK, as Trustee
By:
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Name:
Title:
-50-
