Sun Healthcare Group, Inc., as Issuer
and
The Bank of New York, as Trustee
________________
Indenture
Dated as of May 4, 1998
$355,670,131.25
7% Convertible Junior Subordinated Debentures Due 2028
________________
Certain Sections of this Indenture relating to
Sections 310 through 318 of the
Trust Indenture Act of 1939:
Trust Indenture Indenture
Act Section Section
--------------- -----------
Section 310(a)(1) . . . . . . . . . . . . . . . . . . 609
(a)(2) . . . . . . . . . . . . . . . . . . 609
(a)(3) . . . . . . . . . . . . . . . . . . Not Applicable
(a)(4) . . . . . . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . . . . . . 608, 610
Section 311(a) . . . . . . . . . . . . . . . . . . 613
(b) . . . . . . . . . . . . . . . . . . 613
Section 312(a) . . . . . . . . . . . . . . . . . . 701
Section 312(a) . . . . . . . . . . . . . . . . . . 702(a)
(b) . . . . . . . . . . . . . . . . . . 702(b)
(c) . . . . . . . . . . . . . . . . . . 702(c)
Section 313(a) . . . . . . . . . . . . . . . . . . 703(a)
(b) . . . . . . . . . . . . . . . . . . 703(a)
(c) . . . . . . . . . . . . . . . . . . 703(a)
(d) . . . . . . . . . . . . . . . . . . 703(b)
Section 314(a) . . . . . . . . . . . . . . . . . . 704, 102
(b) . . . . . . . . . . . . . . . . . . Not Applicable
(c)(1) . . . . . . . . . . . . . . . . . . 102
(c)(2) . . . . . . . . . . . . . . . . . . 102
(c)(3) . . . . . . . . . . . . . . . . . . Not Applicable
(d) . . . . . . . . . . . . . . . . . . Not Applicable
(e) . . . . . . . . . . . . . . . . . . 102
Section 315(a) . . . . . . . . . . . . . . . . . . 601
(b) . . . . . . . . . . . . . . . . . . 602
(c) . . . . . . . . . . . . . . . . . . 601
(d) . . . . . . . . . . . . . . . . . . 601
(e) . . . . . . . . . . . . . . . . . . 514
Section 316(a)(1)(A) . . . . . . . . . . . . . . . . . . 502, 512
(a)(1)(B) . . . . . . . . . . . . . . . . . . 513
(a)(2) . . . . . . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . . . . . . 508
(c) . . . . . . . . . . . . . . . . . . 104(c)
Section 317(a)(1) . . . . . . . . . . . . . . . . . . 503
(a)(2) . . . . . . . . . . . . . . . . . . 504
(b) . . . . . . . . . . . . . . . . . . 1003
Section 318(a) . . . . . . . . . . . . . . . . . . 107
______________
Note: This reconciliation and tie shall not, for any purpose, be deemed to
be a part of the Indenture.
- i -
TABLE OF CONTENTS
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ARTICLE I
Definitions and Other Provisions
of General Application . . . . . . . . . . . . . . . . . . . . . . . . . .- 2 -
SECTION 101. Definitions. . . . . . . . . . . . . . . . . . . . . .- 2 -
SECTION 102. Compliance Certificates and Opinions . . . . . . . . - 00 -
XXXXXXX 000. Form of Documents Delivered to Trustee . . . . . . . - 14 -
SECTION 104. Acts of Holders; Record Dates. . . . . . . . . . . . - 15 -
SECTION 105. Notices, Etc., to Trustee and the Company. . . . . . - 16 -
SECTION 106. Notice to Holders; Waiver. . . . . . . . . . . . . . - 17 -
SECTION 107. Conflict with Trust Indenture Act. . . . . . . . . . - 00 -
XXXXXXX 000. Effect of Headings and Table of Contents . . . . . . - 17 -
SECTION 109. Successors and Assigns . . . . . . . . . . . . . . . - 18 -
SECTION 110. Separability Clause. . . . . . . . . . . . . . . . . - 18 -
SECTION 111. Benefits of Indenture. . . . . . . . . . . . . . . . - 18 -
SECTION 112. Governing Law. . . . . . . . . . . . . . . . . . . . - 18 -
SECTION 113. Legal Holidays . . . . . . . . . . . . . . . . . . . - 18 -
ARTICLE II
Convertible Debenture Forms . . . . . . . . . . . . . . . . . . . . - 19 -
SECTION 201. Forms Generally. . . . . . . . . . . . . . . . . . . - 19 -
SECTION 202. Initial Issuance to Property Trustee . . . . . . . . - 19 -
ARTICLE III
The Convertible Debentures. . . . . . . . . . . . . . . . . . . . . - 21 -
SECTION 301. Title and Terms. . . . . . . . . . . . . . . . . . . - 21 -
SECTION 302. Denominations. . . . . . . . . . . . . . . . . . . . - 22 -
SECTION 303. Execution, Authentication, Delivery and Dating . . . - 23 -
SECTION 304. Temporary Convertible Debentures . . . . . . . . . . - 23 -
SECTION 305. Registration, Registration of
Transfer and Exchange. . . . . . . . . . . . . . . . - 00 -
XXXXXXX 000. Mutilated, Destroyed, Lost and Stolen
Convertible Debentures . . . . . . . . . . . . . . . - 00 -
XXXXXXX 000. Payment of Interest; Interest Rights Preserved . . . - 26 -
SECTION 308. Persons Deemed Owners. . . . . . . . . . . . . . . . - 28 -
SECTION 309. Cancellation . . . . . . . . . . . . . . . . . . . . - 00 -
XXXXXXX 000. Right of Set Off . . . . . . . . . . . . . . . . . . - 00 -
XXXXXXX 000. CUSIP Numbers. . . . . . . . . . . . . . . . . . . . - 29 -
- ii -
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SECTION 312. Option to Extend Interest Payment Period . . . . . . - 29 -
SECTION 313. Paying Agent, Security Registrar and
Conversion Agent . . . . . . . . . . . . . . . . . . - 00 -
XXXXXXX 000. Global Security. . . . . . . . . . . . . . . . . . . - 31 -
ARTICLE IV
Satisfaction and Discharge. . . . . . . . . . . . . . . . . . . . . - 00 -
XXXXXXX 000. Satisfaction and Discharge of Indenture. . . . . . . - 34 -
SECTION 402. Application of Trust Money . . . . . . . . . . . . . - 35 -
ARTICLE V
Remedies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 00 -
XXXXXXX 000. Events of Default. . . . . . . . . . . . . . . . . . - 35 -
SECTION 502. Acceleration of Maturity; Rescission and
Annulment. . . . . . . . . . . . . . . . . . . . . . - 00 -
XXXXXXX 000. Collection of Indebtedness and Suits for
Enforcement by Trustee . . . . . . . . . . . . . . . - 38 -
SECTION 504. Trustee May File Proofs of Claim . . . . . . . . . . - 00 -
XXXXXXX 000. Trustee May Enforce Claims Without Possession of
Convertible Debentures . . . . . . . . . . . . . . . - 39 -
SECTION 506. Application of Money Collected . . . . . . . . . . . - 40 -
SECTION 507. Limitation on Suits. . . . . . . . . . . . . . . . . - 40 -
SECTION 508. Unconditional Right of Holders to Receive
Principal and Interest and Convert . . . . . . . . . - 41 -
SECTION 509. Restoration of Rights and Remedies . . . . . . . . . - 00 -
XXXXXXX 000. Rights and Remedies Cumulative . . . . . . . . . . . - 00 -
XXXXXXX 000. Delay or Omission Not Waiver . . . . . . . . . . . . - 42 -
SECTION 512. Control by Holders . . . . . . . . . . . . . . . . . - 42 -
SECTION 513. Waiver of Past Defaults. . . . . . . . . . . . . . . - 42 -
SECTION 514. Undertaking for Costs. . . . . . . . . . . . . . . . - 43 -
SECTION 515. Waiver of Stay or Extension Laws . . . . . . . . . . - 00 -
XXXXXXX 000. Enforcement by Holders of Convertible
Preferred Securities . . . . . . . . . . . . . . . . - 44 -
ARTICLE VI
The Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 44 -
SECTION 601. Certain Duties and Responsibilities. . . . . . . . . - 44 -
SECTION 602. Notice of Defaults . . . . . . . . . . . . . . . . . - 45 -
- iii -
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SECTION 603. Certain Rights of Trustee. . . . . . . . . . . . . . - 00 -
XXXXXXX 000. Not Responsible for Recitals or Issuance of
Convertible Debentures . . . . . . . . . . . . . . . - 00 -
XXXXXXX 000. May Hold Convertible Debentures. . . . . . . . . . . - 46 -
SECTION 606. Money Held in Trust. . . . . . . . . . . . . . . . . - 47 -
SECTION 607. Compensation and Reimbursement . . . . . . . . . . . - 47 -
SECTION 608. Disqualification; Conflicting Interests. . . . . . . - 48 -
SECTION 609. Corporate Trustee Required; Eligibility. . . . . . . - 00 -
XXXXXXX 000. Resignation and Removal; Appointment of
Successor. . . . . . . . . . . . . . . . . . . . . . - 48 -
SECTION 611. Acceptance of Appointment by Successor . . . . . . . - 50 -
SECTION 612. Merger, Conversion, Consolidation or
Succession to Business . . . . . . . . . . . . . . . - 50 -
SECTION 613. Preferential Collection of Claims
Against Company. . . . . . . . . . . . . . . . . . . - 50 -
ARTICLE VII
Holders' Lists and Reports by Trustee and Company . . . . . . . . . - 00 -
XXXXXXX 000. Company to Furnish Trustee Names and
Addresses of Holders . . . . . . . . . . . . . . . . - 51 -
SECTION 702. Preservation of Information; Communications to
Holders. . . . . . . . . . . . . . . . . . . . . . . - 51 -
SECTION 703. Reports by Trustee . . . . . . . . . . . . . . . . . - 52 -
SECTION 704. Reports by Company . . . . . . . . . . . . . . . . . - 52 -
ARTICLE VIII
Consolidation, Merger, Conveyance, Transfer or Lease. . . . . . . . - 00 -
XXXXXXX 000. Company May Consolidate, Etc., Only on
Certain Terms. . . . . . . . . . . . . . . . . . . . - 53 -
SECTION 802. Successor Substituted. . . . . . . . . . . . . . . . - 54 -
ARTICLE IX
Supplemental Indentures . . . . . . . . . . . . . . . . . . . . . . - 54 -
SECTION 901. Supplemental Indentures Without Consent of Holders . - 54 -
SECTION 902. Supplemental Indentures with Consent of Holders. . . - 55 -
SECTION 903. Execution of Supplemental Indentures . . . . . . . . - 56 -
SECTION 904. Effect of Supplemental Indentures. . . . . . . . . . - 57 -
SECTION 905. Conformity with Trust Indenture Act. . . . . . . . . - 57 -
SECTION 906. Reference in Convertible Debentures to
Supplemental Indentures. . . . . . . . . . . . . . . - 57 -
- iv -
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ARTICLE X
Covenants; Representations and Warranties . . . . . . . . . . . . . - 57 -
SECTION 1001. Payment of Principal and Interest. . . . . . . . . . - 57 -
SECTION 1002. Maintenance of Office or Agency. . . . . . . . . . . - 57 -
SECTION 1003. Money for Convertible Debenture Payments to Be
Held in Trust. . . . . . . . . . . . . . . . . . . . - 58 -
SECTION 1004. Statement by Officers as to Default. . . . . . . . . - 59 -
SECTION 1005. Limitation on Dividends; Covenants as to the Trust . - 59 -
SECTION 1006. Payment of Expenses of the Trust . . . . . . . . . . - 60 -
SECTION 1007. Registration Rights. . . . . . . . . . . . . . . . . - 61 -
ARTICLE XI
Redemption of Convertible Debentures . . . . . . . . . . . . . . . . . . - 61 -
SECTION 1101. Optional Redemption. . . . . . . . . . . . . . . . . - 61 -
SECTION 1102. Tax Event Optional Redemption. . . . . . . . . . . . - 62 -
SECTION 1103. Applicability of Article . . . . . . . . . . . . . . - 63 -
SECTION 1104. Election to Redeem; Notice to Trustee. . . . . . . . - 63 -
SECTION 1105. Selection by Trustee of Convertible Debentures to Be
Redeemed . . . . . . . . . . . . . . . . . . . . . . - 63 -
SECTION 1106. Notice of Redemption . . . . . . . . . . . . . . . . - 64 -
SECTION 1107. Deposit and Payment of Redemption Price. . . . . . . - 64 -
SECTION 1108. Convertible Debentures Payable on Redemption
Date . . . . . . . . . . . . . . . . . . . . . . . . - 65 -
SECTION 1109. Convertible Debentures Redeemed in Part. . . . . . . - 65 -
SECTION 1110. No Sinking Fund. . . . . . . . . . . . . . . . . . . - 66 -
SECTION 1111. Mandatory Redemption . . . . . . . . . . . . . . . . - 66 -
SECTION 1112. Exchange of Trust Securities for Convertible
Debentures . . . . . . . . . . . . . . . . . . . . . - 66 -
ARTICLE XII
Subordination of Convertible Debentures . . . . . . . . . . . . . . - 67 -
SECTION 1201. Agreement to Subordinate . . . . . . . . . . . . . . - 67 -
SECTION 1202. Default on Senior Indebtedness . . . . . . . . . . . - 67 -
SECTION 1203. Liquidation; Dissolution; Bankruptcy . . . . . . . . - 69 -
SECTION 1204. Subrogation. . . . . . . . . . . . . . . . . . . . . - 70 -
SECTION 1205. Trustee to Effectuate Subordination. . . . . . . . . - 70 -
SECTION 1206. Notice by the Company. . . . . . . . . . . . . . . . - 70 -
SECTION 1207. Rights of the Trustee; Holders of Senior
Indebtedness . . . . . . . . . . . . . . . . . . . . - 71 -
- v -
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SECTION 1208. Subordination May Not Be Impaired. . . . . . . . . . - 72 -
ARTICLE XIII
Conversion of Convertible Debentures. . . . . . . . . . . . . . . . - 73 -
SECTION 1301. Conversion Rights. . . . . . . . . . . . . . . . . . - 73 -
SECTION 1302. Conversion Procedures. . . . . . . . . . . . . . . . - 73 -
SECTION 1303. Conversion Price Adjustments . . . . . . . . . . . . - 76 -
SECTION 1304. Fundamental Change.. . . . . . . . . . . . . . . . . - 81 -
SECTION 1305. Notice of Adjustments of Conversion Price. . . . . . - 83 -
SECTION 1306. Prior Notice of Certain Events . . . . . . . . . . . - 84 -
SECTION 1307. Certain Defined Terms. . . . . . . . . . . . . . . . - 85 -
SECTION 1308. Dividend or Interest Reinvestment Plans. . . . . . . - 85 -
SECTION 1309. Certain Additional Rights. . . . . . . . . . . . . . - 86 -
SECTION 1310. Restrictions on Sun Common Stock Issuable
Upon Conversion. . . . . . . . . . . . . . . . . . . - 86 -
SECTION 1311. Trustee Not Responsible for Determining Conversion
Price or Adjustments . . . . . . . . . . . . . . . . - 88 -
ARTICLE XIV
Immunity of Incorporators, Stockholders,
Officers and Directors. . . . . . . . . . . . . . . . . . . . . . . - 88 -
SECTION 1401. No Recourse. . . . . . . . . . . . . . . . . . . . . - 88 -
- vi -
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EXHIBIT AND ANNEX
EXHIBIT A Form of Convertible Debenture
ANNEX A Amended and Restated Declaration of Trust among the Company, as
trust sponsor, The Bank of New York, as Property Trustee, The Bank
of New York (Delaware), as Delaware Trustee and Xxxxxx X. Xxxxxx,
Xxxxxx X. Xxxxxx and Xxxxxxx X. Xxxxxxx as Administrative Trustees,
dated as of May 4, 1998.
______________
Note: This table of contents shall not, for any purpose, be deemed to be
a part of the Indenture.
- vii -
INDENTURE, dated as of May 4, 1998, between Sun Healthcare Group,
Inc., a corporation duly organized and existing under the laws of the State of
Delaware (herein called the "Company"), having its principal office at 000 Xxx
Xxxxxx, X.X., Xxxxxxxxxxx, Xxx Xxxxxx 00000, and The Bank of New York, as
Trustee (herein called the "Trustee").
RECITALS OF THE COMPANY
WHEREAS, Sun Financing I, a Delaware business trust (the "Trust"),
formed under the Amended and Restated Declaration of Trust among the Company, as
trust sponsor, The Bank of New York, as property trustee (the "Property
Trustee"), The Bank of New York (Delaware), as Delaware trustee (the "Delaware
Trustee"), and Xxxxxx X. Xxxxxx, Xxxxxx X. Xxxxxx and Xxxxxxx X. Xxxxxxx, as
administrative trustees (the "Administrative Trustees"), dated as of May 4, 1998
(the "Declaration"), pursuant to the Purchase Agreement (the "Purchase
Agreement") dated April 28, 1998, among the Company and the initial purchasers
named therein, will issue and sell up to 13,800,000 of its 7% Convertible Trust
Issued Preferred Securities (the "Convertible Preferred Securities") with a
liquidation amount of $25 per Preferred Security, having an aggregate
liquidation amount with respect to the assets of the Trust of 345,000,000;
WHEREAS, the trustees of the Trust, on behalf of the Trust, will
execute and deliver to the Company 7% Convertible Common Securities (the
"Common Securities") of the Trust, registered in the name of the Company, in an
aggregate amount equal to three percent of the capitalization of the Trust,
equivalent to 426,805.25 Common Securities, with a liquidation amount of $25 per
Common Security, having an aggregate liquidation amount with respect to the
assets of the Trust of $10,670,131.25) (the "Common Securities");
WHEREAS, the Trust will use the proceeds from the sale of the
Convertible Preferred Securities and the Common Securities to purchase from the
Company 7% Convertible Junior Subordinated Debentures Due 2028 (the "Convertible
Debentures") of the Company in an aggregate principal amount of $355,670,131.25;
WHEREAS, the Company is guaranteeing the payment of distributions on
the Convertible Preferred Securities, and payment of the Redemption Price and
payments on liquidation with respect to the Convertible Preferred Securities, to
the extent provided in the Preferred Securities Guarantee Agreement (the
"Guarantee") dated May 4, 1998 between the Company and The Bank of New York, as
guarantee trustee, for the benefit of the holders of the Convertible Preferred
Securities from time to time;
WHEREAS, the Company has duly authorized the creation of the
Convertible Debentures of the tenor and amount herein set forth and to provide
therefor the Company has duly authorized the execution and delivery of this
Indenture;
WHEREAS, so long as the Trust is a Holder of Convertible Debentures,
and any Convertible Preferred Securities are outstanding, the Trust Agreement
provides that the holders of Convertible Preferred Securities may cause the
Conversion Agent to (a) exchange such Convertible Preferred Securities for
Convertible Debentures held by the Trust and (b) immediately convert such
Convertible Debentures into Common Stock of the Company; and
WHEREAS, all things necessary to make the Convertible Debentures, when
executed by the Company and authenticated and delivered hereunder and duly
issued by the Company, the valid obligations of the Company, and to make this
Indenture a valid agreement of the Company, in accordance with their and its
terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Convertible Debentures by the Holders thereof, it is mutually agreed, for the
equal and proportionate benefit of all Holders of the Convertible Debentures, as
follows:
ARTICLE II
Definitions and Other Provisions
of General Application
SECTION 201. DEFINITIONS.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned
to them in this Article and include the plural as well as the singular;
(2) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles; and
- 2 -
(4) the words "herein", "hereof" and "hereunder" and other words
of similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
"ACT", when used with respect to any Holder, has the meaning specified
in Section 104.
"ADDITIONAL INTEREST" has the meaning specified in Section 301.
"ADDITIONAL PAYMENTS" means Compounded Interest, Liquidated Damages,
if any, and Additional Interest, if any.
"ADMINISTRATIVE TRUSTEES" has the meaning specified in the Recitals of
this instrument.
"AFFILIATE" has the same meaning as given to that term in Rule 405 of
the Securities Act or any successor rule thereunder.
"AGENT" means any Registrar, Paying Agent, Conversion Agent or
co-registrar.
"APPLICABLE PRICE" means (i) in the case of a Non-Stock Fundamental
Change in which the holders of Sun Common Stock receive only cash, the amount of
cash received by the holder of one share of Sun Common Stock and (ii) in the
event of any other Non-Stock Fundamental Change or any Common Stock Fundamental
Change, the average of the Closing Prices for the Sun Common Stock during the
ten trading days prior to the record date for the determination of the holders
of Sun Common Stock entitled to receive such securities, cash, or other property
in connection with such Non-Stock Fundamental Change or Common Stock Fundamental
Change or, if there is no such record date, the date upon which the holders of
the Sun Common Stock shall have the right to receive such securities, cash, or
other property (such record date or distribution date being hereinafter referred
to as the "Entitlement Date"), in each case as adjusted in good faith by the
Company to appropriately reflect any of the events referred to in Section 1303.
"BOARD OF DIRECTORS" means either the board of directors of the
Company or any duly authorized committee of that board.
"BOARD RESOLUTION" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
- 3 -
"BUSINESS DAY" means any day other than a day on which banking
institutions in The City of New York or in Wilmington, Delaware are authorized
or required by law to close.
"CLOSING PRICE" has the meaning specified in Section 1307.
"COMMISSION" means the Securities and Exchange Commission, as from
time to time constituted, created under the Exchange Act, or, if at any time
after the execution of this instrument such Commission is not existing and
performing the duties now assigned to it under the Trust Indenture Act, then the
body performing such duties at such time.
"COMMON SECURITIES" has the meaning specified in the recitals to this
Instrument.
"COMMON SECURITIES GUARANTEE" means any guarantee that the Company may
enter into that operate directly or indirectly for the benefit of holders of
Common Securities of the Trust.
"COMMON STOCK FUNDAMENTAL CHANGE" means any Fundamental Change in
which more than 50% of the value (as determined in good faith by the Board of
Directors of the Company) of the consideration received by holders of Sun Common
Stock consists of common stock that for each of the ten consecutive trading days
prior to the Entitlement Date has been admitted for listing or admitted for
listing subject to notice of issuance on a national securities exchange or
quoted on the Nasdaq National Market; provided, however, that a Fundamental
Change shall not be a Common Stock Fundamental Change unless either (i) the
Company continues to exist after the occurrence of such Fundamental Change and
the outstanding Convertible Preferred Securities continue to exist as
outstanding Convertible Preferred Securities or (ii) not later than the
occurrence of such Fundamental Change, the outstanding Convertible Preferred
Securities are converted into or exchanged for shares of convertible preferred
stock or debentures of an entity succeeding to the business of the Company or a
subsidiary thereof, which convertible preferred stock (or debentures, as the
case may be) has powers, preferences, and relative, participating, optional, or
other rights, and qualifications, limitations, and restrictions, substantially
similar to those of the Convertible Preferred Securities.
"COMPANY" means the Person named as the "Company" in the first
paragraph of this instrument until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Person.
- 4 -
"COMPANY REQUEST" or "COMPANY ORDER" means a written request or order
signed in the name of the Company by its Chairman of the Board, its Vice
Chairman of the Board, its President, its Chief Financial Officer, or a Vice
President, and by its Treasurer, an Assistant Treasurer, its Controller, its
Secretary or an Assistant Secretary, and delivered to the Trustee.
"COMPOUNDED INTEREST" has the meaning specified in Section 312.
"CONVERSION AGENT" means the Person appointed to act on behalf of the
holders of Convertible Preferred Securities in effecting the conversion of
Convertible Preferred Securities as and in the manner set forth in the Trust
Agreement and Section 1302 hereof.
"CONVERSION DATE" has the meaning specified in Section 1302.
"CONVERSION PRICE" has the meaning specified in Section 1301.
"CONVERTIBLE DEBENTURES" has the meaning specified in the Recitals to
this instrument.
"CONVERTIBLE PREFERRED SECURITIES" has the meaning specified in the
Recitals to this instrument.
"CORPORATE TRUST OFFICE" means the principal office of the Trustee in
New York, New York, at which at any particular time its corporate trust business
shall be administered and which at the date of this Indenture is 000 Xxxxxxx
Xxxxxx, 00 Xxxx, Xxx Xxxx, Xxx Xxxx 10286, Attention: Corporate Trust Trustee
Administration.
"DECLARATION" has the meaning specified in the Recitals of this
instrument.
"DEFEASANCE TRUST" means a trust related to defeasance of
indebtedness.
"DEFAULTED INTEREST" has the meaning specified in Section 307.
"DELAWARE TRUSTEE" has the meaning given it in the Recitals of this
instrument.
"DEPOSITARY" means, with respect to any Convertible Debentures issued
in the form of one or more Global Security, a clearing agency registered under
the Exchange Act that is dedicated to act as Depositary for the Convertible
Debentures, and will initially be the Depository Trust Company.
- 5 -
"DESIGNATED SENIOR INDEBTEDNESS" has the meaning specified in Section
1202.
"DIRECT ACTION" means a proceeding directly instituted by a holder of
Convertible Preferred Securities for enforcement of payment to such holder of
the principal of or interest on the Convertible Debentures having a principal
amount equal to the aggregate liquidation amount of the Convertible Preferred
Securities of such holder on or after the respective due date specified in the
Convertible Debentures, if an Event of Default under the Trust Agreement has
occurred and is continuing and such event is attributable to the failure of the
Company to pay interest or principal on the Convertible Debentures on the date
such interest or principal is otherwise payable (or in the case of redemption,
on the redemption date.)
"DISSOLUTION EVENT" means that, as a result of the occurrence and
continuation of a Special Event, the Trust is to be dissolved in accordance with
the Declaration and the Convertible Debentures held by the Property Trustee are
to be distributed to the holders of Trust Securities issued by the Trust PRO
RATA in accordance with the Declaration.
"DISSOLUTION TAX OPINION" has the meaning specified in the
Declaration.
"EVENT OF DEFAULT" has the meaning specified in Section 501.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended
from time to time, and the rules and regulations promulgated thereunder, or any
successor legislation.
"EXTENSION PERIOD" has the meaning specified in Section 312.
"FUNDAMENTAL CHANGE" means the occurrence of any Transaction or event
in connection with a plan pursuant to which all or substantially all of the Sun
Common Stock shall be exchanged for, converted into, acquired for, or constitute
solely the right to receive securities, cash, or other property (whether by
means of an exchange offer, liquidation, tender offer, consolidation, merger,
combination, reclassification, recapitalization, or otherwise), provided, that,
in the case of a plan involving more than one such Transaction or event, for
purposes of adjustment of the conversion price, such Fundamental Change shall be
deemed to have occurred when substantially all of the Sun Common Stock shall be
exchanged for, converted into, or acquired for or constitute solely the right to
receive securities, cash, or other property, but the adjustment shall be based
upon the consideration that a holder of the Sun Common Stock received in such
Transaction or event as a result of which more than 50% of the Sun Common Stock
shall have been exchanged for, converted into, or acquired for or constitute
solely the right to receive securities, cash, or other property. The term
"Non-Stock
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Fundamental Change" means any Fundamental Change other than a Common Stock
Fundamental Change.
"GLOBAL SECURITY" has the meaning specified in Section 314.
"GUARANTEE" has the meaning specified in the Recitals to this
instrument.
"HOLDER" means a Person in whose name a Convertible Debenture is
registered in the Security Register.
"INDENTURE" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof,
including, for all purposes of this instrument and any such supplemental
indenture, the provisions of the Trust Indenture Act that are deemed to be a
part of and govern this instrument and any such supplemental indenture,
respectively.
"INITIAL PURCHASERS" means Bear, Xxxxxxx & Co. Inc., Xxxxxxxxx, Lufkin
& Xxxxxxxx Securities Corporation, X.X. Xxxxxx Securities Inc., NationsBank
Xxxxxxxxxx Securities LLC and Xxxxxxxx & Co. Inc., as initial purchasers under
the Purchase Agreement.
"INTEREST PAYMENT DATE" has the meaning specified in Section 301.
"INVESTMENT COMPANY EVENT" has the meaning specified in Annex I to the
Declaration.
"LIQUIDATED DAMAGES" has the meaning specified on the reverse side of
the form of debenture set forth in Exhibit A to this agreement
"MATURITY", when used with respect to any Convertible Debenture, means
the date on which the principal of such Convertible Debenture becomes due and
payable as therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, call for redemption or otherwise.
"MINISTERIAL ACTION" has the meaning specified in Section 1102.
"90-DAY PERIOD" has the meaning specified in Section 1102.
"NO RECOGNITION OPINION" has the meaning specified in Annex I to the
Declaration.
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"NON BOOK-ENTRY PREFERRED SECURITIES" has the meaning specified in
section 314.
"NON-STOCK FUNDAMENTAL CHANGE" means any Fundamental Change other than
a Common Stock Fundamental Change.
"NOTICE OF CONVERSION" means the notice to be given by a holder of
Convertible Preferred Securities to the Conversion Agent directing the
Conversion Agent to exchange such Convertible Preferred Securities for
Convertible Debentures and to convert such Convertible Debentures into Sun
Common Stock on behalf of such holder.
"OFFICERS' CERTIFICATE" means a certificate signed by the Chairman of
the Board, the Vice Chairman of the Board, the Chief Executive Officer, the
President, Chief Financial Officer or a Vice President, and by the Treasurer,
the Controller, an Assistant Treasurer, the Secretary or an Assistant Secretary,
of the Company, and delivered to the Trustee. One of the officers signing an
Officers' Certificate given pursuant to Section 1004 shall be the principal
executive, financial or accounting officer of the Company.
"OPINION OF COUNSEL" means a written opinion of counsel, who may be
counsel for the Company.
"OUTSTANDING", when used with respect to Convertible Debentures,
means, as of the date of determination, all Convertible Debentures theretofore
authenticated and delivered under this Indenture, EXCEPT: (i) Convertible
Debentures theretofore cancelled by the Trustee or delivered to the Trustee for
cancellation; (ii) Convertible Debentures for whose payment or redemption money
in the necessary amount has been theretofore deposited with the Trustee or any
Paying Agent (other than the Company) in trust or set aside and segregated in
trust by the Company (if the Company shall act as its own Paying Agent) for the
Holders of such Convertible Debentures; PROVIDED, that if such Convertible
Debentures are to be redeemed, notice of such redemption has been duly given
pursuant to this Indenture or provision therefor satisfactory to the Trustee has
been made; and (iii) Convertible Debentures that have been paid pursuant to
Section 307, converted into Sun Common Stock pursuant to Section 1301, or in
exchange for or in lieu of which other Convertible Debentures have been
authenticated and delivered pursuant to this Indenture, other than any such
Convertible Debentures in respect of which there shall have been presented to
the Trustee proof satisfactory to it that such Convertible Debentures are held
by a bona fide purchaser in whose hands such Convertible Debentures are valid
obligations of the Company, PROVIDED, HOWEVER, that in determining whether the
Holders of the requisite principal amount of the Outstanding Convertible
Debentures have given any request, demand, authorization, direction, notice,
consent or waiver hereunder, Convertible Debentures owned by the Company or any
other
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obligor upon the Convertible Debentures or any Affiliate of the Company or of
such other obligor shall be disregarded and deemed not to be outstanding, except
that, in determining whether the Trustee shall be protected in relying upon any
such request, demand, authorization, direction, notice, consent or waiver, only
Convertible Debentures which the Trustee knows to be so owned shall be so
disregarded. Convertible Debentures so owned which have been pledged in good
faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Trustee the pledgee's right so to act with respect to such
Convertible Debentures and that the pledgee is not the Company or any other
obligor upon the Convertible Debentures or any Affiliate of the Company or of
such other obligor.
"PAYING AGENT" means any Person authorized by the Company to pay the
principal of or interest on any Convertible Debentures on behalf of the Company.
"PERSON" means any legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated organization or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.
"PREDECESSOR SECURITY" of any particular Convertible Debenture means
every previous Convertible Debenture evidencing all or a portion of the same
debt as that evidenced by such particular Convertible Debenture; and, for the
purposes of this definition, any Convertible Debenture authenticated and
delivered under Section 306 in exchange for or in lieu of a mutilated,
destroyed, lost or stolen Convertible Debenture shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Convertible Debenture.
"PROPERTY TRUSTEE" has the meaning specified in the Recitals of this
instrument.
"PURCHASE AGREEMENT" has the meaning specified in the Recitals to this
instrument.
"PURCHASED SHARES" has the meaning specified in Section 1303(e).
"PURCHASER STOCK PRICE" means, with respect to any Common Stock
Fundamental Change, the average of the Closing Prices for the common stock
received in such Common Stock Fundamental Change for the ten consecutive trading
days prior to and including the Entitlement Date, as adjusted in good faith by
the Company to appropriately reflect any of the events referred to in Section
1303.
"REDEMPTION DATE", when used with respect to any Convertible Debenture
to be redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
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"REDEMPTION PRICE", when used with respect to any Convertible
Debenture to be redeemed, means the price at which it is to be redeemed pursuant
to this Indenture.
"REDEMPTION TAX OPINION" has the meaning set forth in Annex I to the
Declaration.
"REFERENCE DATE" has the meaning specified in Section 1303(c).
"REFERENCE MARKET PRICE" shall initially mean $11.00 (which is an
amount equal to 66 2/3% of the reported last sales price for Sun Common Stock
on the New York Stock Exchange Consolidated Transactions Tape on April 28,
1998) and in the event of any adjustment of the conversion price other than
as a result of a Non-Stock Fundamental Change, the Reference Market Price
shall also be adjusted so that the ratio of the Reference Market Price to the
conversion price after giving effect to any such adjustment shall always be
the same as the ratio of the initial Reference Market Price to the initial
conversion price of the Convertible Preferred Securities.
"REGULAR RECORD DATE" has the meaning specified in Section 301.
"RESPONSIBLE OFFICER", when used with respect to the Trustee, means
any vice-president, any assistant vice-president, the treasurer, any assistant
treasurer, any trust officer or assistant trust officer or any other officer in
the Corporate Trust Department 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 that officer's knowledge of and
familiarity with the particular subject.
"RESTRICTED CONVERTIBLE PREFERRED SECURITIES" means all Convertible
Preferred Securities required to bear any restricted securities legend pursuant
to the Declaration.
"RESTRICTED SECURITIES" means all the Convertible Debentures required
pursuant to Section 202 to bear the Restricted Securities Legend.
"RESTRICTED SECURITIES LEGEND" has the meaning specified in Section
202.
"SECURITY REGISTER" and "SECURITY REGISTRAR" have the respective
meanings specified in Section 305.
"SENIOR CREDIT FACILITY" means that certain Credit Agreement, dated as
of October 8, 1997 as amended by the First Amendment thereto dated November 12,
1997
- 10 -
and the Second Amendment thereto dated March 27, 1998, by and among the Company
and NationsBank of Texas, N.A. and the other banks that are parties thereto,
providing for availability of up to $1.2 billion of loans to the Company in the
following components: (a) a revolving credit facility of up to $500.0 million
and (b) three term loans in the amounts of $200.0 million, $250.0 million and
$250.0 million, respectively, including any related notes, collateral documents,
instruments and agreements executed in connection therewith, and in each case as
amended, increased, modified, extended, renewed, refunded, replaced or
refinanced, in whole or in part, from time to time.
"SENIOR INDEBTEDNESS" means in respect of the Company: (i) the
principal, premium, if any, and interest in respect of (A) indebtedness of such
obligor for money borrowed and (B) indebtedness evidenced by securities,
debentures, bonds or other similar instruments issued by such obligor,
including, without limitation, in the case of Sun, all indebtedness, and all
obligations of Sun to pay fees and other amounts, under the Senior Credit
Facility or under the indentures with respect to the Company's outstanding 91/2%
Senior Subordinated Notes due 2007 (the "2007 Notes") and the Company's 93/8%
Senior Subordinated Notes due 2008, and any refinancing of the Senior Credit
Facility in the bank credit market (including institutional participants
therein), including interest accruing on or after a bankruptcy or other similar
event, whether or not an allowed claim therein, (ii) all capital lease
obligations of such obligor, (iii) all obligations of such obligor issued or
assumed as the deferred purchase price of property, all conditional sale
obligations of such obligor and all obligations of such obligor under any title
retention agreement (but excluding trade accounts payable arising in the
ordinary course of business), (iv) all obligations of such obligor for the
reimbursement of any letter of credit, banker's acceptance, security purchase
facility or similar credit transaction, (v) all obligations of the type referred
to in clauses (i) through (iv) above of other Persons for the payment of which
such obligor is responsible or liable as obligor, guarantor or otherwise, and
(vi) all obligations of the type referred to in clauses (i) through (v) above of
other Persons secured by any lien on any property or asset of such obligor
(whether or not such obligation is assumed by such obligor), except for (1) any
such indebtedness that is by its terms subordinated to or PARI PASSU with the
Convertible Debentures and (2) any indebtedness between or among such obligor or
its affiliates, including all other debt securities and guarantees in respect of
those debt securities issued to any other trust, or a trustee of such trust,
partnership, or other entity affiliated with the Company that is, directly or
indirectly, a financing vehicle of the Company (a "Financing Entity") in
connection with the issuance by such Financing Entity of Convertible Preferred
Securities or other securities which rank PARI PASSU with, or junior to, the
Convertible Preferred Securities, unless otherwise provided in the terms of such
debt securities. Such Senior Indebtedness shall continue to be Senior
Indebtedness and entitled to the benefits of the subordination provisions
- 11 -
irrespective of any amendment, modification or waiver of any term of such Senior
Indebtedness, except as otherwise provided in the exception clauses above.
"SPECIAL EVENT" has the meaning specified in Annex I to the
Declaration.
"SPECIAL RECORD DATE" for the payment of any Defaulted Interest means
a date fixed by the Trustee pursuant to Section 307.
"STATED MATURITY", when used with respect to any Convertible Debenture
or any installment of interest thereon, means the date specified in such
Convertible Debenture as the fixed date on which the principal, together with
any accrued and unpaid interest (including Compounded Interest), of such
Convertible Debenture or such installment of interest is due and payable.
"SUBSIDIARY" of any Person means (i) a corporation more than 50% of
the outstanding Voting Stock of which is owned, directly or indirectly, by such
Person or by one or more other Subsidiaries of such Person or by such Person and
one or more Subsidiaries thereof or (ii) any other Person (other than a
corporation) in which such Person, or one or more other Subsidiaries of such
Person or such Person and one or more other Subsidiaries thereof, directly or
indirectly, has at least a majority ownership and power to direct the policies,
management and affairs thereof.
"SUN 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 Article Thirteen, shares issuable on conversion of
Convertible Debentures shall include only shares of the class designated as Sun
Common Stock of the Company at the date of this instrument or shares of any
class or classes resulting from any reclassification or reclassifications
thereof and which have no preference in respect of dividends or of amounts
payable in the event of any voluntary or involuntary liquidation, dissolution or
winding up of the Company and which are not subject to redemption by the
Company; PROVIDED, that if at any time there shall be more than one such
resulting class, the shares of each such class then so issuable on conversion
shall be substantially in the proportion which the total number of shares of
such class resulting from all such reclassifications bears to the total number
of shares of all such classes resulting from all such reclassifications.
"TAX EVENT" has the meaning specified in Annex I to the Declaration.
"TRADING DAY" has the meaning specified in Section 1307.
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"TRANSACTION" has the meaning specified in Section 1304.
"TRUST" has the meaning specified in the Recitals to this instrument.
"TRUST INDENTURE ACT" means the Trust Indenture Act of 1939, as
amended from time to time, and the rules and regulations promulgated thereunder,
or any successor legislation.
"TRUST SECURITIES" means Common Securities and Convertible Preferred
Securities.
"TRUSTEE" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean such successor Trustee.
"VICE PRESIDENT," when used with respect to the Company or the
Trustee, means any vice president, whether or not designated by a number or a
word or words added before or after the title "vice president".
"VOTING STOCK" of any Person means capital stock of such Person which
ordinarily has voting power for the election of directors (or Persons performing
similar functions) of such Person, whether at all times or only so long as no
senior class of Convertible Debentures has such voting power by reason of any
contingency.
SECTION 202. COMPLIANCE CERTIFICATES AND OPINIONS.
Upon any application or request by the Company to the Trustee to take
any action under any provision of this Indenture, the Company shall furnish to
the Trustee such certificates and opinions as may be required under the Trust
Indenture Act or reasonably requested by the Trustee in connection with such
application or request. Each such certificate or opinion shall be given in the
form of an Officers' Certificate, if to be given by an officer of the Company,
or an Opinion of Counsel, if to be given by counsel, and shall comply with the
applicable requirements of the Trust Indenture Act and any other applicable
requirement set forth in this Indenture.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(a) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein relating
thereto;
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(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 each such individual, he has
made such examination or investigation as is necessary to enable him to express
an informed opinion as to whether or not such covenant or condition has been
complied with; and
(d) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
SECTION 203. FORM OF DOCUMENTS DELIVERED TO TRUSTEE.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or opinion of counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 204. ACTS OF HOLDERS; RECORD DATES.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Holders may be embodied in
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and evidenced by one or more instruments of substantially similar tenor signed
by such Holders in person or by an Agent duly appointed in writing; and, except
as herein otherwise expressly provided, such action shall become effective when
such instrument or instruments are delivered to the Trustee and, where it is
hereby expressly required, to the Company. Such instrument or instruments (and
the action embodied therein and evidenced thereby) are herein sometimes referred
to as the "Act" of the Holders signing such instrument or instruments. Proof of
execution of any such instrument or of a writing appointing any such Agent shall
be sufficient for any purpose of this Indenture and (subject to Section 601)
conclusive in favor of the Trustee and the Company, if made in the manner
provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where
such execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner which the Trustee or the Company, as the case may be, deems
sufficient.
(c) The Company may, in the circumstances permitted by the Trust
Indenture Act, fix any day as the record date for the purpose of determining the
Holders of Outstanding Convertible Debentures entitled to give, make or take any
request, demand, authorization, direction, notice, consent, waiver or other
action, or to vote on any action, authorized or permitted to be given or taken
by Holders. If not set by the Company prior to the first solicitation of a
Holder made by any Person in respect of any such action, or, in the case of any
such vote, prior to such vote, the record date for any such action or vote shall
be the 30th day (or, if later, the date of the most recent list of Holders
required to be provided pursuant to Section 701) prior to such first
solicitation or vote, as the case may be. With regard to any record date, only
the Holders on such date (or their duly designated proxies) shall be entitled to
give or take, or vote on, the relevant action.
(d) The ownership of Convertible Debentures shall be proved by the
Security Register.
(e) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Convertible Debenture shall bind every
future Holder of the same Convertible Debenture and the Holder of every
Convertible Debenture issued upon the registration of transfer thereof or in
exchange therefor or in lieu thereof in respect of anything
- 15 -
done, omitted or suffered to be done by the Trustee or the Company in reliance
thereon, whether or not notation of such action is made upon such Convertible
Debenture.
Without limiting the foregoing, a Holder entitled hereunder to give or take any
such action with regard to any particular Convertible Debenture may do so with
regard to all or any part of the principal amount of such Convertible Debenture
or by one or more duly appointed agents each of which may do so pursuant to such
appointment with regard to all or any different part of such principal amount.
SECTION 205. NOTICES, ETC., TO TRUSTEE AND THE COMPANY.
Any request, demand, authorization, direction, notice, consent, waiver
or Act of Holders or other document provided or permitted by this Indenture to
be made upon, given or furnished to, or filed with,
(a) the Trustee by any Holder or by the Company shall be sufficient
for every purpose hereunder if made, given, furnished or filed in writing to or
with the Trustee at its Corporate Trust Office, Attention: Corporate Trust &
Agency Department, or
(b) the Company by the Trustee or by any Holder shall be sufficient
for every purpose hereunder (unless otherwise herein expressly provided) if in
writing and mailed, first-class postage prepaid, to the Company addressed to it
at the address of its principal office specified in the first paragraph of this
instrument (Attention: Chief Financial Officer) or at any other address
previously furnished in writing to the Trustee by the Company.
SECTION 206. NOTICE TO HOLDERS; WAIVER.
Where this Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first-class postage prepaid, to each Holder affected
by such event, at such Holder's address as it appears in the Security Register,
not later than the latest date (if any), and not earlier than the earliest date
(if any), prescribed for the giving of such notice. In any case where notice to
Holders is given by mail, neither the failure to mail such notice, nor any
defect in any notice so mailed, to any particular Holder shall affect the
sufficiency of such notice with respect to other Holders. Any notice when
mailed to a Holder in the aforesaid manner shall be conclusively deemed to have
been received by such Holder whether or not actually received by such Holder.
Where this Indenture provides for notice in any manner, such notice may be
waived in writing by the Person entitled to receive such notice, either before
or after the event, and such waiver shall be the equivalent of such notice.
Waivers of notice by Holders
- 16 -
shall be filed with the Trustee, but such filing shall not be a condition
precedent to the validity of any action taken in reliance upon such waiver.
In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice by mail,
then such notification as shall be made with the approval of the Trustee shall
constitute a sufficient notification for every purpose hereunder.
SECTION 207. CONFLICT WITH TRUST INDENTURE ACT.
If any provision hereof limits, qualifies or conflicts with a
provision of the Trust Indenture Act that is required under such Act to be a
part of and govern this Indenture, the latter provision shall control. If any
provision of this Indenture modifies or excludes any provision of the Trust
Indenture Act that may be so modified or excluded, the latter provision shall be
deemed to apply to this Indenture as so modified or to be excluded, as the case
may be.
SECTION 208. EFFECT OF HEADINGS AND TABLE OF CONTENTS.
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
SECTION 209. SUCCESSORS AND ASSIGNS.
All covenants and agreements in this Indenture by the Company shall
bind its successors and assigns, whether so expressed or not.
SECTION 210. SEPARABILITY CLAUSE.
In case any provision in this Indenture or in the Convertible
Debentures 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 211. BENEFITS OF INDENTURE.
Nothing in this Indenture or in the Convertible Debentures, express or
implied, shall give to any Person, other than the parties hereto and their
successors hereunder, the holders of Senior Indebtedness, the holders of
Convertible Preferred Securities (to the extent provided herein) and the Holders
of Convertible Debentures, any benefit or any legal or equitable right, remedy
or claim under this Indenture.
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SECTION 212. GOVERNING LAW.
THIS INDENTURE AND THE CONVERTIBLE DEBENTURES SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD
TO ITS PRINCIPLES OF CONFLICTS OF LAWS.
SECTION 213. LEGAL HOLIDAYS.
In any case where any Interest Payment Date, Redemption Date or Stated
Maturity of any Convertible Debenture or the last date on which a Holder has the
right to convert his Convertible Debentures shall not be a Business Day, then
(notwithstanding any other provision of this Indenture or of the Convertible
Debentures) payment of interest or principal or conversion of the Convertible
Debentures need not be made on such date, but may be made on the next succeeding
Business Day (except that, if such Business Day is in the next succeeding
calendar year, such Interest Payment Date, Redemption Date or Stated Maturity,
as the case may be, shall be the immediately preceding Business Day) with the
same force and effect as if made on the Interest Payment Date or Redemption
Date, or at the Stated Maturity or on such last day for conversion, PROVIDED,
that no interest shall accrue for the period from and after such Interest
Payment Date, Redemption Date or Stated Maturity, as the case may be.
ARTICLE IV
Convertible Debenture Forms
SECTION 401. FORMS GENERALLY.
The Convertible Debentures and the Trustee's certificate of
authentication shall be substantially in the form of Exhibit A, which is hereby
incorporated in and expressly made a part of this Indenture. The Convertible
Debentures may have letters, numbers, notations or other marks of identification
or designation and such legends or endorsements required by law, stock exchange
rule, agreements to which the Company is subject, if any, or usage (provided
that any such notation, legend or endorsement is in a form acceptable to the
Company). The Company shall furnish any such legend not contained in Exhibit A
to the Trustee in writing. Each Convertible Debenture shall be dated the date
of its authentication. The terms and provisions of the Convertible Debentures
set forth in Exhibit A are part of the terms of this Indenture and to the extent
applicable, the Company and the Trustee, by their execution and delivery of this
Indenture, expressly agree to such terms and provisions and to be bound thereby.
- 18 -
The definitive Convertible Debentures shall be typewritten or printed,
lithographed or engraved or produced by any combination of these methods on
steel engraved borders or may be produced in any other manner permitted by the
rules of any securities exchange on which the Convertible Debentures may be
listed, all as determined by the officers executing such Convertible Debentures,
as evidenced by their execution thereof.
SECTION 402. INITIAL ISSUANCE TO PROPERTY TRUSTEE.
The Convertible Debentures initially issued to the Property Trustee of
the Trust shall be in the form of one or more individual certificates in
definitive, fully registered form without coupons and shall bear the following
legend (the "Restricted Securities Legend") unless the Company determines
otherwise in accordance with applicable law.
THIS SECURITY AND ANY COMMON STOCK ISSUED ON CONVERSION HEREOF HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), OR ANY STATE SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED,
ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR
UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. THE HOLDER OF THIS SECURITY BY ITS
ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY,
PRIOR TO THE DATE WHICH IS AFTER THE EXPIRATION OF THE HOLDING PERIOD APPLICABLE
TO SALES THEREOF UNDER RULE 144(k) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR
RULE) (THE "RESALE RESTRICTION TERMINATION DATE") ONLY (A) TO SUN HEALTHCARE
GROUP, INC., (THE "COMPANY") (B) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR
RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON
IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE
144A THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN
RELIANCE ON RULE 144A, (D) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE
MEANING OF SUBPARAGRAPH (a)(1), (2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES
ACT THAT IS ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF
SUCH AN INSTITUTIONAL "ACCREDITED INVESTOR," FOR INVESTMENT PURPOSES AND NOT
WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN
VIOLATION OF THE SECURITIES
- 19 -
ACT, OR (E) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY'S AND THE TRANSFER
AGENT'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER (i) PURSUANT TO CLAUSES
(D) OR (E) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION
AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM, AND (ii) IN EACH OF THE
FOREGOING CASES, TO REQUIRE THAT A CERTIFICATE OF TRANSFER IN THE FORM APPEARING
ON THIS SECURITY IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE TRANSFER
AGENT, THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF A HOLDER AFTER THE RESALE
RESTRICTION TERMINATION DATE.
ARTICLE V
The Convertible Debentures
SECTION 601. TITLE AND TERMS.
The aggregate principal amount of Convertible Debentures that may be
authenticated and delivered under this Indenture is limited to $355,670,131.25,
except for Convertible Debentures authenticated and delivered upon registration
of transfer of, or in exchange for, or in lieu of, other Convertible Debentures
pursuant to Section 304, 305, 306, 906, 1109 or 1301.
The Convertible Debentures shall be known and designated as the "7%
Convertible Junior Subordinated Debentures Due 2028" of the Company. Their
Stated Maturity shall be May 1, 2028, and they shall bear interest at the rate
of 7% per annum, from May 4, 1998 or from the most recent Interest Payment Date
to which interest has been paid or duly provided for, as the case may be,
payable quarterly (subject to deferral as set forth herein), in arrears, on
February 1, May 1, August 1 and November 1 (each an "Interest Payment Date") of
each year, commencing August 1, 1998, until the principal thereof is paid or
made available for payment, and they shall be paid to the Person in whose name
the Convertible Debenture is registered at 5:00 p.m. (New York City time) on the
regular record date for such interest installment, which shall be the close of
business on the Business Day next preceding such interest payment date (the
"Regular Record Date"); provided, however, in the event the Convertible
Debentures are held by any entity other than the Trust, the Company may set
other record dates. Interest will compound quarterly and will accrue at the
rate of 7% per annum on any interest installment in arrears for more than one
quarter or during an extension of an interest payment period as set forth in
Section 312 hereof.
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The amount of interest payable for any period will be computed on the
basis of a 360-day year of twelve 30-day months. Except as provided in the
following sentence, the amount of interest payable for any period shorter than a
full quarterly period for which interest is computed, will be computed on the
basis of the actual number of days elapsed per 90-day quarter. In the event
that any date on which interest is payable on the Convertible Debentures is not
a Business Day, then payment of interest payable on such date will be made on
the next succeeding day which is a Business Day (and without any interest or
other payment in respect of any such delay), except that, if such Business Day
is in the next succeeding calendar year, such payment shall be made on the
immediately preceding Business Day, in each case with the same force and effect
as if made on such date.
If at any time while the Property Trustee is the Holder of any
Convertible Debentures, the Trust or the Property Trustee is required to pay any
taxes, duties, assessments or governmental charges of whatever nature (other
than withholding taxes) imposed by the United States, or any other taxing
authority, then, in any such case, the Company will pay as additional interest
("Additional Interest") on the Convertible Debentures held by the Property
Trustee, such amounts as shall be required so that the net amounts received and
retained by the Trust and the Property Trustee after paying any such taxes,
duties, assessments or other governmental charges will be not less than the
amounts the Trust and the Property Trustee would have received had no such
taxes, duties, assessments or other governmental charges been imposed.
The principal of and interest on the Convertible Debentures shall be
payable at the office or agency of the Company in the United States maintained
for such purpose and at any other office or agency maintained by the Company for
such purpose in such coin or currency of the United States of America as at the
time of payment is legal tender for payment of public and private debts;
PROVIDED, HOWEVER, that unless the Convertible Debentures are held by the Trust
or any successor permissible under Section 612 of this Indenture, at the option
of the Company payment of interest may be made by check mailed to the address of
the Person entitled thereto as such address shall appear in the Security
Register.
The Convertible Debentures shall be redeemable as provided in Article
Eleven hereof.
The Convertible Debentures shall be subordinated in right of payment
to Senior Indebtedness as provided in Article Twelve hereof.
The Convertible Debentures shall be convertible as provided in Article
Thirteen hereof.
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SECTION 602. DENOMINATIONS.
The Convertible Debentures shall be issuable only in registered form
without coupons.
SECTION 603. EXECUTION, AUTHENTICATION, DELIVERY AND DATING.
The Convertible Debentures shall be executed on behalf of the Company
by its Chairman of the Board, its Vice Chairman of the Board, its Chief
Executive Officer, its President, its Chief Financial Officer, or one of its
Vice Presidents, and if the Company so chooses, under its corporate seal
reproduced thereon attested by its Secretary or one of its Assistant
Secretaries. The signature of any of these officers on the Convertible
Debentures may be manual or facsimile.
Convertible Debentures bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such Convertible
Debentures or did not hold such offices at the date of such Convertible
Debentures.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Convertible Debentures executed by the
Company to the Trustee for authentication, together with a Company Order for the
authentication and delivery of such Convertible Debentures; and the Trustee in
accordance with such Company Order shall authenticate and make available for
delivery such Convertible Debentures as in this Indenture provided and not
otherwise.
The Convertible Debentures shall be dated the date of authentication.
No Convertible Debenture shall be entitled to any benefit under this
Indenture or be valid or obligatory for any purpose unless there appears on such
Convertible Debenture a certificate of authentication substantially in the form
provided for herein executed by the Trustee by manual signature, and such
certificate upon any Convertible Debenture shall be conclusive evidence, and the
only evidence, that such Convertible Debenture has been duly authenticated and
delivered hereunder.
SECTION 604. TEMPORARY CONVERTIBLE DEBENTURES.
Pending the preparation of definitive Convertible Debentures, the
Company may execute, and upon Company Order the Trustee shall authenticate and
deliver, temporary
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Convertible Debentures which are typewritten, printed, lithographed or otherwise
produced, in any authorized denomination, substantially of the tenor of the
definitive Convertible Debentures in lieu of which they are issued and with such
appropriate insertions, omissions, substitutions and other variations as the
officers executing such Convertible Debentures may determine, as evidenced by
their execution of such Convertible Debentures.
If temporary Convertible Debentures are issued, the Company will cause
definitive Convertible Debentures to be prepared without unreasonable delay.
After the preparation of definitive Convertible Debentures, the temporary
Convertible Debentures shall be exchangeable for definitive Convertible
Debentures upon surrender of the temporary Convertible Debentures at any office
or agency of the Company designated pursuant to Section 1002, without charge to
the Holder. Upon surrender for cancellation of any one or more temporary
Convertible Debentures the Company shall execute and the Trustee shall
authenticate and make available for delivery in exchange therefor a like
principal amount of definitive Convertible Debentures of authorized
denominations. Until so exchanged the temporary Convertible Debentures shall in
all respects be entitled to the same benefits under this Indenture as definitive
Convertible Debentures.
SECTION 605. REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE.
The Company shall cause to be kept at the Corporate Trust Office of
the Trustee a register (the register maintained in such office and in any other
office or agency designated pursuant to Section 1002 being herein sometimes
collectively referred to as the "Security Register") in which, subject to such
reasonable regulations as it may prescribe, the Company shall provide for the
registration of Convertible Debentures and of transfers of Convertible
Debentures. The Trustee is hereby appointed "Security Registrar" for the purpose
of registering Convertible Debentures and transfers of Convertible Debentures as
herein provided.
Upon surrender for registration of transfer of any Convertible
Debenture at an office or agency of the Company designated pursuant to
Section 1002 for such purpose, the Company shall execute, and the Trustee shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Convertible Debentures of any authorized
denominations and of a like aggregate principal amount.
At the option of the Holder, Convertible Debentures may be exchanged
for other Convertible Debentures of any authorized denominations and of a like
aggregate principal amount, upon surrender of the Convertible Debentures to be
exchanged at such office or agency. Whenever any Convertible Debentures are so
surrendered for exchange, the
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Company shall execute, and the Trustee shall authenticate and make available for
delivery, the Convertible Debentures which the Holder making the exchange is
entitled to receive.
All Convertible Debentures issued upon any registration of transfer or
exchange of Convertible Debentures shall be the valid obligations of the
Company, evidencing the same debt, and entitled to the same benefits under this
Indenture, as the Convertible Debentures surrendered upon such registration of
transfer or exchange.
Every Convertible Debenture presented or surrendered for registration
of transfer or for exchange shall (if so required by the Company or the Trustee)
be duly endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed, by the
Holder thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Convertible Debentures, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Convertible
Debentures, other than exchanges pursuant to Section 304, 906, 1109 or 1301 not
involving any transfer.
The Company shall not be required (i) in the case of a partial
redemption of the Securities, to issue, register the transfer of or exchange any
Convertible Debenture during a period beginning at the opening of business 15
days before the day of the mailing of a notice of redemption of Convertible
Debenture selected for redemption under the Section 1105 and ending at the close
of business on the day of such mailing, or (ii) to register the transfer of or
exchange any Convertible Debenture so selected for redemption in whole or in
part, except the unredeemed portion of any Convertible Debenture being redeemed
in part.
SECTION 606. MUTILATED, DESTROYED, LOST AND STOLEN CONVERTIBLE DEBENTURES.
If any mutilated Convertible Debenture is surrendered to the Trustee,
the Company shall execute and the Trustee shall authenticate and deliver in
exchange therefor a new Convertible Debenture of like tenor and principal amount
and bearing a number not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee
(i) evidence to their satisfaction of the destruction, loss or theft of any
Convertible Debenture and (ii) such Convertible Debenture or indemnity as may be
required by them to save each of them and any Agent of either of them harmless,
then, in the absence of notice to the Company or the Trustee that such
Convertible Debenture has been acquired by a bona fide purchaser, the
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Company shall execute and the Trustee shall authenticate and deliver, in lieu of
any such destroyed, lost or stolen Convertible Debenture, a new Convertible
Debenture of like tenor and principal amount and bearing a number not
contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Convertible
Debenture has become or is about to become due and payable, the Company in its
discretion may, instead of issuing a new Convertible Debenture, pay such
Convertible Debenture.
Upon the issuance of any new Convertible Debenture under this Section,
the Company may require the payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Convertible Debenture issued pursuant to this Section in
lieu of any destroyed, lost or stolen Convertible Debenture shall constitute an
original additional contractual obligation of the Company, whether or not the
destroyed, lost or stolen Convertible Debenture shall be at any time enforceable
by anyone, and shall be entitled to all the benefits of this Indenture equally
and proportionately with any and all other Convertible Debentures duly issued
hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Convertible Debentures.
SECTION 607. PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED.
Interest on any Convertible Debenture which is payable, and is
punctually paid or duly provided for, on any Interest Payment Date shall be paid
to the Person in whose name that Convertible Debenture (or one or more
Predecessor Securities) is registered at 5:00 p.m. (New York City time) on the
Regular Record Date.
Any interest on any Convertible Debenture which is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date (herein
called "Defaulted Interest") shall forthwith cease to be payable to the Holder
on the relevant Regular Record Date by virtue of having been such Holder, and
such Defaulted Interest may be paid by the Company, at its election in each
case, as provided in Clause (a) or (b) below:
(a) The Company may elect to make payment of any Defaulted Interest
to the Persons in whose names the Convertible Debentures (or their respective
Predecessor Securities) are registered at 5:00 p.m. (New York City time) on a
Special Record Date for the
- 25 -
payment of such Defaulted Interest, which shall be fixed in the following
manner. The Company shall notify the Trustee in writing of the amount of
Defaulted Interest proposed to be paid on each Convertible Debenture and the
date of the proposed payment, and at the same time the Company shall deposit
with the Trustee an amount of money equal to the aggregate amount proposed to
be paid in respect of such Defaulted Interest or shall make arrangements
satisfactory to the Trustee for such deposit prior to the date of the
proposed payment, such money when deposited to be held in trust for the
benefit of the Persons entitled to such Defaulted Interest as in this Clause
(a) provided. Thereupon the Trustee shall fix a Special Record Date for the
payment of such Defaulted Interest which shall be not more than 15 days and
not less than 10 days prior to the date of the proposed payment and not less
than 10 days after the receipt by the Trustee of the notice of the proposed
payment. The Trustee shall promptly notify the Company of such Special Record
Date and, in the name and at the expense of the Company, shall cause notice
of the proposed payment of such Defaulted Interest and the Special Record
Date therefor to be mailed, first-class postage prepaid, to each Holder at
his address as it appears in the Security Register, not less than 10 days
prior to such Special Record Date. Notice of the proposed payment of such
Defaulted Interest and the Special Record Date therefor having been so
mailed, such Defaulted Interest shall be paid to the Persons in whose names
the Convertible Debentures (or their respective Predecessor Securities) are
registered at 5:00 p.m. (New York City time) on such Special Record Date and
shall no longer be payable pursuant to the following Clause (b).
(b) The Company may make payment of any Defaulted Interest in any
other lawful manner not inconsistent with the requirements of any securities
exchange on which the Convertible Debentures may be listed, and, if so listed,
upon such notice as may be required by such exchange, if, after notice given by
the Company to the Trustee of the proposed payment pursuant to this Clause (B),
such manner of payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section 307, each
Convertible Debenture delivered under this Indenture upon registration of
transfer of or in exchange for or in lieu of any other Convertible Debenture
shall carry the rights to interest accrued and unpaid, and to accrue (including
in each such case Additional Payments, if any), which were carried by such other
Convertible Debenture.
In the case of any Convertible Debenture which is converted after any
Regular Record Date and on or prior to the next succeeding Interest Payment Date
(other than any Convertible Debenture whose Maturity is prior to such Interest
Payment Date), interest whose Stated Maturity is on such Interest Payment Date
shall be payable on such Interest Payment Date notwithstanding such conversion,
and such interest (whether or not punctually paid or duly provided for) shall be
paid to the Person in whose name that Convertible Debenture (or
- 26 -
one or more Predecessor Securities) is registered at 5:00 p.m. (New York City
time) on such Regular Record Date. Except as otherwise expressly provided in
the immediately preceding sentence, in the case of any Convertible Debenture
that is converted prior to any Regular Record Date, interest whose Stated
Maturity is after the date of conversion of such Convertible Debenture shall not
be payable, and the Company shall not make nor be required to make any other
payment, adjustment or allowance with respect to accrued but unpaid interest
(including Additional Payments, if any) on the Convertible Debentures being
converted, which shall be deemed to be paid in full. Subject to any right of
the Holder of such Convertible Debenture or any Predecessor Security to receive
interest as provided in this paragraph and the second paragraph of Clause (a) of
Section 1302, the Company's delivery upon conversion of the fixed number of
shares of Sun Common Stock into which the Convertible Debentures are convertible
(together with the cash payment, if any, in lieu of fractional shares) shall be
deemed to satisfy the Company's obligation to pay the principal amount at
Maturity of the portion of Convertible Debentures so converted and any unpaid
interest (including Additional Payments, if any) accrued on such Convertible
Debentures at the time of such conversion. If any Convertible Debenture called
for redemption is converted, any money deposited with the Trustee or with any
Paying Agent or so segregated and held in trust for the redemption of such
Convertible Debenture shall (subject to any right of the Holder of such
Convertible Debenture or any Predecessor Security to receive interest as
provided in this paragraph) be paid to the Company upon Company Request or, if
then held by the Company, shall be discharged from such trust.
SECTION 608. PERSONS DEEMED OWNERS.
Prior to due presentment of a Convertible Debenture for registration
of transfer, the Company, the Trustee and any Agent of the Company or the
Trustee may treat the Person in whose name such Convertible Debenture is
registered as the owner of such Convertible Debenture for the purpose of
receiving payment of principal of and (subject to Section 307) interest
(including Additional Payments, if any) on such Convertible Debenture and for
all other purposes whatsoever, whether or not such Convertible Debenture be
overdue, and neither the Company, the Trustee nor any Agent of the Company or
the Trustee shall be affected by notice to the contrary.
SECTION 609. CANCELLATION.
All Convertible Debentures surrendered for payment, redemption,
registration of transfer or exchange or conversion shall, if surrendered to any
Person other than the Trustee, be delivered to the Trustee and shall be promptly
cancelled by it. The Company may at any time deliver to the Trustee for
cancellation any Convertible Debentures previously authenticated and delivered
hereunder which the Company may have acquired in any manner
- 27 -
whatsoever, and all Convertible Debentures so delivered shall be promptly
cancelled by the Trustee. No Convertible Debentures shall be authenticated in
lieu of or in exchange for any Convertible Debentures cancelled as provided in
this Section, except as expressly permitted by this Indenture. All cancelled
Convertible Debentures held by the Trustee shall be disposed of as directed by a
Company Order; PROVIDED, HOWEVER, that the Trustee shall not be required to
destroy the certificates representing such cancelled Convertible Debentures.
SECTION 610. RIGHT OF SET OFF.
Notwithstanding anything to the contrary in this Indenture, the
Company shall have the right to set off any payment it is otherwise required to
make hereunder to the extent the Company has theretofore made, or is
concurrently on the date of such payment making, a payment under the Guarantee.
SECTION 611. CUSIP NUMBERS.
The Company in issuing the Convertible Debentures may use "CUSIP"
numbers (if then generally in use), and, if so, the Trustee shall use "CUSIP"
numbers in notices of redemption as a convenience to Holders; PROVIDED, that any
such notice may state that no representation is made as to the correctness of
such numbers either as printed on the Convertible Debentures or as contained in
any notice of a redemption and that reliance may be placed only on the other
identification numbers printed on the Convertible Debentures, and any such
redemption shall not be affected by any defect in or omission of such numbers.
SECTION 612. OPTION TO EXTEND INTEREST PAYMENT PERIOD.
(a) So long as no Event of Default has occurred and is continuing,
the Company shall have the right at any time during the term of the Convertible
Debentures to defer interest payments (including Additional Payments) from time
to time by extending the interest payment period for successive periods (each,
an "Extension Period") not exceeding 20 consecutive quarters for each such
period; PROVIDED that no Extension Period may extend beyond the maturity date of
the Convertible Debentures. At the end of each Extension Period, the Company
shall pay all interest then accrued and unpaid (including Additional Interest
and Liquidated Damages) together with interest thereon compounded quarterly at
the rate specified for the Convertible Debentures to the extent permitted by
applicable law ("Compounded Interest"); PROVIDED that during any Extension
Period, the Company shall (i) not declare or pay dividends on, or make a
distribution with respect to, or redeem or purchase or acquire, or make a
liquidation payment with respect to, any of its capital stock (other than (A)
purchases or acquisitions of shares of Sun Common Stock in connection with the
satisfaction by the Company of its obligations under any employee benefit plans
or the
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satisfaction by the Company of its obligations pursuant to any contract or
security requiring the Company to purchase shares of Sun Common Stock, (B) as a
result of a reclassification of the Company's capital stock or the exchange or
conversion of one class or series of the Company's capital stock for another
class or series of the Company's capital stock or (C) the purchase of fractional
interests in shares of the Company's capital stock pursuant to the conversion or
exchange provisions of such capital stock or the security being converted or
exchanged (or make any guarantee payments with respect to the foregoing), (ii)
not make any payment of interest, principal or premium, if any, on or repay,
repurchase or redeem any debt securities (including guarantees) issued by the
Company that rank PARI PASSU with or junior to the Convertible Debentures
(except by conversion into or exchange for shares of its capital stock) and
(iii) not make any guarantee payments with respect to the foregoing (other than
pursuant to the Guarantee). Prior to the termination of any such Extension
Period, the Company may further extend such Extension Period; PROVIDED that such
Extension Period, together with all such previous and further extensions
thereof, may not exceed 20 consecutive quarters or extend beyond the maturity
date of the Convertible Debentures. Upon the termination of any Extension
Period and the payment of all amounts then due, the Company may commence a new
Extension Period, subject to the above requirements. No interest during an
Extension Period, except at the end thereof, shall be due and payable.
(b) If the Property Trustee is the sole Holder of the Convertible
Debentures at the time the Company selects an Extension Period, the Company
shall give written notice to the Administrative Trustees and the Property
Trustee of its selection of such Extension Period at least one Business Day
prior to the earlier of (i) the date the distributions on the Convertible
Preferred Securities are payable or (ii) if the Convertible Preferred Securities
are listed on the New York Stock Exchange or other stock exchange or quotation
system, the date the Trust is required to give notice to the New York Stock
Exchange or other applicable self-regulatory organization or to holders of the
Convertible Preferred Securities of the record date or the date such
distributions are payable, but in any event not less than 10 Business Days prior
to such record date. The Company shall cause the Trust to give notice of the
Company's selection of such Extension Period to the holders of the Convertible
Preferred Securities.
(c) If the Property Trustee is not the sole holder of the Convertible
Debentures at the time the Company selects an Extension Period, the Company
shall give the Holders of the Convertible Debentures and the Trustee written
notice of its selection of such Extension Period at least 10 Business Days prior
to the earlier of (i) the next succeeding Interest Payment Date or (ii) if the
Convertible Preferred Securities are listed on the New York Stock Exchange or
other stock exchange or quotation system, the date the Company is required to
give notice to the New York Stock Exchange or other applicable self-regulatory
organization or to holders of the Convertible Debentures on the record or
payment
- 29 -
date of such related interest payment, but in any event not less than two
Business Days prior to such record date.
(d) The quarter in which any notice is given pursuant to paragraphs
(b) and (c) hereof shall be counted as one of the 20 quarters permitted in the
maximum Extension Period permitted under paragraph (a) hereof.
SECTION 613. PAYING AGENT, SECURITY REGISTRAR AND CONVERSION AGENT.
The Trustee will initially act as Paying Agent, Security Registrar and
Conversion Agent. The Company may change any Paying Agent, Security Registrar,
co-registrar or Conversion Agent without prior notice. The Company or any of
its Affiliates may act in any such capacity. The Trustee is entitled to the
protections of Article VI in its capacity as Paying Agent, Registrar and
Conversion Agent.
SECTION 614. GLOBAL SECURITY.
(a) In connection with a Dissolution Event,
(1) the Convertible Debentures in book-entry certificated form
may be presented to the Trustee by the Property Trustee in exchange for a global
Convertible Debenture in an aggregate principal amount equal to the aggregate
principal amount of all outstanding Convertible Debentures (a "Global
Security"), to be registered in the name of the Depositary, or its nominee, and
delivered by the Trustee to the Depositary for crediting to the accounts of its
participants pursuant to the instructions of the Administrative Trustees. The
Company upon any such presentation shall execute a Global Security in such
aggregate principal amount and deliver the same to the Trustee for
authentication and delivery in accordance with this Indenture. Payments on the
Convertible Debentures issued as a Global Security will be made to the
Depositary; and
(2) if any Convertible Preferred Securities are held in non
book-entry certificated form, the Convertible Debentures in certificated form
may be presented to the Trustee by the Property Trustee and any Preferred
Security Certificate which represents Convertible Preferred Securities other
than Convertible Preferred Securities held by the Depositary or its nominee
("Non Book-Entry Preferred Securities") will be deemed to represent beneficial
interests in Convertible Debentures presented to the Trustee by the Property
Trustee having an aggregate principal amount equal to the aggregate liquidation
amount of the Non Book-Entry Preferred Securities until such Preferred Security
Certificates are presented to the Security Registrar for transfer or reissuance
at which time such Convertible Preferred Security Certificates will be cancelled
and a Convertible Debenture,
- 30 -
registered in the name of the holder of the Convertible Preferred Security
Certificate or the transferee of the holder of such Preferred Security
Certificate, as the case may be, with an aggregate principal amount equal to the
aggregate liquidation amount of the Convertible Preferred Security Certificate
cancelled, will be executed by the Company and delivered to the Trustee for
authentication and delivery in accordance with this Indenture. On issue of such
Convertible Debentures, Convertible Debentures with an equivalent aggregate
principal amount that were presented by the Property Trustee to the Trustee will
be deemed to have been cancelled.
(b) A Global Security may be transferred, in whole but not in part,
only to another nominee of the Depositary, or to a nominee of such successor
Depositary.
(c) If (i) the Depositary notifies the Company that it is unwilling
or unable to continue as a depositary for such Global Security and no successor
depositary shall have been appointed, (ii) the Depositary, at any time, ceases
to be a clearing agency registered under the Exchange Act at which time the
Depositary is required to be so registered to act as such depositary and no
successor depositary shall have been appointed, (iii) the Company, in its sole
discretion, determines that such Global Security shall be so exchangeable or
(iv) there shall have occurred an Event of Default with respect to such
Convertible Debentures, as the case may be, the Company will execute, and,
subject to Article Three of this Indenture, the Trustee, upon written notice
from the Company and receipt of a Company Order, will authenticate and deliver
the Convertible Debentures in definitive registered form without coupons, in
authorized denominations, and in an aggregate principal amount equal to the
principal amount of the Global Security in exchange for such Global Security.
In addition, upon an Event of Default or if the Company may at any time
determine that the Convertible Debentures shall no longer be represented by a
Global Security, in such event the Company will execute, and subject to Section
305 of this Indenture, the Trustee, upon receipt of an Officers' Certificate
evidencing such determination by the Company, will authenticate and make
available for delivery the Convertible Debentures in definitive registered form
without coupons, in authorized denominations, and in an aggregate principal
amount equal to the principal amount of the Global Security in exchange for such
Global Security. Upon the exchange of the Global Security for such Convertible
Debentures in definitive registered form without coupons, in authorized
denominations, the Global Security shall be cancelled by the Trustee. Such
Convertible Debentures in definitive registered form issued in exchange for the
Global Security shall be registered in such names and in such authorized
denominations as the Depositary, pursuant to instructions from its direct or
indirect participants or otherwise, shall instruct the Trustee. The Trustee
shall deliver such Convertible Debentures to the Depositary for delivery to the
Persons in whose names such Convertible Debentures are so registered.
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(d) Every Global Security authenticated and delivered hereunder shall
bear a legend in substantially the following form, in capital letters and
bold-face type:
THIS CONVERTIBLE DEBENTURE IS A GLOBAL SECURITY WITHIN THE MEANING OF
THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF
A DEPOSITARY OR A NOMINEE THEREOF. THIS CONVERTIBLE DEBENTURE MAY NOT
BE EXCHANGED IN WHOLE OR IN PART FOR A CONVERTIBLE DEBENTURE
REGISTERED, AND NO TRANSFER OF THIS CONVERTIBLE DEBENTURE IN WHOLE OR
IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH
DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES
DESCRIBED IN THE INDENTURE.
(e) If the Depositary is The Depository Trust Company, the Global
Security authenticated and delivered hereunder shall also bear a legend in
substantially the following form, in capital letters and bold-face type:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED SIGNATORY OF THE
DEPOSITORY TRUST COMPANY ("DTC") TO THE COMPANY OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
(f) The Convertible Debentures may not be transferred except in
compliance with the Restricted Securities Legend unless otherwise determined by
the Company in accordance with applicable law. Upon any distribution of the
Convertible Debentures to the holders of the Convertible Preferred Securities in
accordance with the Declaration, the Company and the Trustee shall enter into a
supplemental indenture pursuant to Section 901(f) to provide for transfer
procedures and restrictions with respect to the Convertible Debentures
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substantially similar to those contained in the Declaration to the extent
applicable in the circumstances existing at the time of such distribution.
ARTICLE VIII
Satisfaction and Discharge
SECTION 801. SATISFACTION AND DISCHARGE OF INDENTURE.
This Indenture shall cease to be of further effect (except as to any
surviving rights of conversion, registration of transfer or exchange of
Convertible Debentures herein expressly provided for), and the Trustee, on
demand of and at the expense of the Company, shall execute proper instruments
acknowledging satisfaction and discharge of this Indenture, when
(a) either
(i) all Convertible Debentures theretofore authenticated
and delivered (other than (A) Convertible Debentures which have been
destroyed, lost or stolen and which have been replaced or paid as
provided in Section 306 and (B) Convertible Debentures for whose
payment money has theretofore been deposited in trust or segregated
and held in trust by the Company and thereafter repaid to the Company
or discharged from such trust, as provided in Section 1003) have been
delivered to the Trustee for cancellation; or
(ii) all such Convertible Debentures not theretofore
delivered to the Trustee for cancellation have become due and payable,
and the Company has deposited or caused to be deposited with the
Trustee as trust funds in trust for the purpose an amount sufficient
to pay and discharge the entire indebtedness on such Convertible
Debentures not theretofore delivered to the Trustee for cancellation,
for principal and interest (including Additional Payments, if any) to
the date of such deposit (in the case of Convertible Debentures which
have become due and payable) or to the Stated Maturity or Redemption
Date, as the case may be, along with, if requested by the Trustee, an
accountant's (or investment or commercial bank's) certificate stating
such funds are sufficient to pay principal and interest on the
Convertible Debentures when and as due;
(b) the Company has paid or caused to be paid all other sums payable
hereunder by the Company; and
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(c) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent herein
provided for relating to the satisfaction and discharge of this Indenture have
been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 607 and, if money shall
have been deposited with the Trustee pursuant to subclause (ii) of Clause (a) of
this Section, the obligations of the Trustee under Section 402 and the last
paragraph of Section 1003 shall survive.
SECTION 802. APPLICATION OF TRUST MONEY.
Subject to the provisions of the last paragraph of Section 1003, all
money deposited with the Trustee pursuant to Section 401 shall be held in trust
and applied by it, in accordance with the provisions of the Convertible
Debentures and this Indenture, to the payment, either directly or through any
Paying Agent (including the Company acting as its own Paying Agent) as the
Trustee may determine, to the Persons entitled thereto, of the principal and
interest for whose payment such money has been deposited with the Trustee. All
moneys deposited with the Trustee pursuant to Section 401 (and held by it or any
Paying Agent) for the payment of Convertible Debentures subsequently converted
shall be returned to the Company upon Company Request.
ARTICLE X
Remedies
SECTION 1001. EVENTS OF DEFAULT.
"Event of Default," wherever used herein, means any one of the
following events that has occurred and is continuing (whatever the reason for
such Event of Default and whether it shall be occasioned by the provisions of
Article Twelve or be voluntary or involuntary or be effected by operation of law
or pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body):
(a) failure for 30 days to pay interest on the Convertible
Debentures, including any Additional Interest and Compounded Interest, in
respect thereof, when due; PROVIDED that a valid extension of an interest
payment period will not constitute a default in the payment of interest
(including Additional Interest or Compounded Interest, if any) for this purpose;
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(b) failure to pay principal of or premium, if any, on the
Convertible Debentures when due, whether at maturity, upon redemption, by
Declaration or otherwise;
(c) failure by the Company to deliver shares of Sun Common Stock upon
an election by a holder of Convertible Preferred Securities to convert such
Convertible Preferred Securities;
(d) failure to observe or perform any other covenant contained in the
Indenture for 90 days after notice to the Company by the Trustee or by the
holders of not less than 25% in aggregate outstanding principal amount of the
Convertible Debentures;
(e) entry by a court having jurisdiction in the premises of (i) a
decree or order for relief in respect of the Company in an involuntary case or
proceeding under any applicable federal or state bankruptcy, insolvency,
reorganization or other similar law or (ii) a decree or order adjudging the
Company a bankrupt or insolvent, or approving as properly filed a petition
seeking reorganization, arrangement, adjustment or composition of or in respect
of the Company under any applicable federal or state law, or appointing a
custodian, receiver, liquidator, assignee, trustee, sequestrator or other
similar official of the Company or of substantially all of the property of the
Company, or ordering the winding up or liquidation of its affairs, and the
continuance of any such decree or order for relief or any such other decree or
order unstayed and in effect for a period of 60 consecutive days;
(f) the commencement by the Company of a voluntary case or proceeding
under any applicable federal or state bankruptcy, insolvency, reorganization or
other similar law or of any other case or proceeding to be adjudicated a
bankrupt or insolvent, or the consent by the Company or to the entry of a decree
or order for relief in respect of itself in an involuntary case or proceeding
under any applicable federal or state bankruptcy, insolvency, reorganization or
other similar law or to the commencement of any bankruptcy or insolvency case or
proceeding against the Company, or the filing by the Company of a petition or
answer or consent seeking reorganization or relief under any applicable federal
or state law, or the consent by the Company to the filing of such petition or to
the appointment of or taking possession by a custodian, receiver, liquidator,
assignee, trustee, sequestrator or other similar official of the Company or of
substantially all of the property of the Company, or the making by the Company
of an assignment for the benefit of creditors, or the admission by the Company
in writing of its inability to pay its debts generally as they become due, or
the taking of corporate action by the Company in furtherance of any such action;
or
(g) the voluntary or involuntary dissolution, winding up or
termination of the Trust, except in connection with (i) the distribution of
Convertible Debentures to holders of Convertible Preferred Securities in
liquidation of the Trust upon the redemption of all of the
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outstanding Convertible Preferred Securities of the Trust or (ii) certain
mergers, consolidations or amalgamations, each as permitted by the Declaration.
SECTION 1002. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.
If an Event of Default occurs and is continuing, then and in every
such case the Trustee or the Holders of not less than 25% in principal amount of
the Outstanding Convertible Debentures may declare the principal of all the
Convertible Debentures and any other amounts payable hereunder to be due and
payable immediately, by a notice in writing to the Company (and to the Trustee
if given by Holders), and upon any such declaration such principal and all
accrued interest shall become immediately due and payable.
At any time after such a declaration of acceleration has been made and
before a judgment or decree for payment of the money due has been obtained by
the Trustee as provided in this Article, the Holders of a majority in aggregate
principal amount of the Outstanding Convertible Debentures, by written notice to
the Company and the Trustee, may rescind and annul such declaration and its
consequences if:
(a) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(i) all overdue interest (including Additional Payments, if
any) on all Convertible Debentures,
(ii) the principal of any Convertible Debentures which have
become due otherwise than by such declaration of acceleration and
interest thereon at the rate borne by the Convertible Debentures, and
(iii) all sums paid or advanced by the Trustee hereunder
and the reasonable compensation, expenses, disbursements and advances
of the Trustee, its agents and counsel;
and
(b) all Events of Default, other than the non-payment of the
principal of Convertible Debentures which have become due solely by such
declaration of acceleration, have been cured or waived as provided in
Section 513.
No such rescission shall affect any subsequent default or impair any
right consequent thereon.
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SECTION 1003. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY TRUSTEE.
The Company covenants that if:
(a) default is made in the payment of any interest (including
Additional Interest and Compounded Interest, if any) on any Convertible
Debenture when such interest becomes due and payable and such default continues
for a period of 30 days, or
(b) default is made in the payment of the principal of any
Convertible Debenture at the Maturity thereof,
the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Convertible Debentures, the whole amount then due and payable on
such Convertible Debentures for principal and interest (including Additional
Interest and Compounded Interest, if any) and, to the extent that payment
thereof shall be legally enforceable, interest on any overdue principal and on
any overdue interest (including Additional Interest and Compounded Interest, if
any), at the rate borne by the Convertible Debentures, and, in addition thereto,
such further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel.
If an Event of Default occurs and is continuing, the Trustee may in
its discretion proceed to protect and enforce its rights and the rights of the
Holders by such appropriate judicial proceedings as the Trustee shall deem most
effectual to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.
SECTION 1004. TRUSTEE MAY FILE PROOFS OF CLAIM.
In case of any judicial proceeding relative to the Company (or any
other obligor upon the Convertible Debentures), its property or its creditors,
the Trustee shall be entitled and empowered, by intervention in such proceeding
or otherwise, to take any and all actions authorized under the Trust Indenture
Act in order to have claims of the Holders and the Trustee allowed in any such
proceeding. In particular, the Trustee shall be authorized to collect and
receive any moneys or other property payable or deliverable on any such claims
and to distribute the same; and any custodian, receiver, assignee, trustee,
liquidator, sequestrator or other similar official in any such judicial
proceeding is hereby authorized by each Holder to make such payments to the
Trustee and, in the event that the Trustee shall consent to the making of such
payments directly to the Holders, to pay to the Trustee any
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amount due it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, and any other amounts due the
Trustee under Section 607.
No provision of this Indenture 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
Convertible Debentures or the rights of any Holder thereof or to authorize the
Trustee to vote in respect of the claim of any Holder in any such proceeding.
SECTION 1005. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF CONVERTIBLE
DEBENTURES.
All rights of action and claims under this Indenture or the
Convertible Debentures may be prosecuted and enforced by the Trustee without the
possession of any of the Convertible Debentures or the production thereof in any
proceeding relating thereto, and any such proceeding instituted by the Trustee
shall be brought in its own name as trustee of an express trust, and any
recovery of judgment shall, after provision for the payment of the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, be for the ratable benefit of the Holders of the Convertible
Debentures in respect of which such judgment has been recovered.
SECTION 1006. APPLICATION OF MONEY COLLECTED.
Subject to Article Twelve, any money collected by the Trustee pursuant
to this Article shall be applied in the following order, at the date or dates
fixed by the Trustee and, in case of the distribution of such money on account
of principal or interest (including Additional Payments, if any), upon
presentation of the Convertible Debentures and the notation thereon of the
payment if only partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under
Section 607;
SECOND: To the payment of all Senior Indebtedness of the
Company to the extent required by Article Twelve;
THIRD: To the payment of the amounts then due and unpaid for
principal of and interest (including Additional Payments, if any) on
the Convertible Debentures in respect of which or for the benefit of
which such money has been collected, ratably, without preference or
priority of any kind,
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according to the amounts due and payable on such Convertible Debentures for
principal and interest (including Additional Payments, if any),
respectively; and
FOURTH: To the payment of the remainder, if any, to the
Company.
SECTION 1007. LIMITATION ON SUITS.
Subject to Section 516, no Holder of any Convertible Debenture shall
have any right to institute any proceeding, judicial or otherwise, with respect
to this Indenture, or for the appointment of a receiver or trustee, or for any
other remedy hereunder, unless
(a) such Holder has previously given written notice to the Trustee of
a continuing Event of Default;
(b) if the Trust is not the sole holder of Convertible Debentures,
the Holders of not less than 25% in aggregate principal amount of the
Outstanding Convertible Debentures shall have made written request to the
Trustee to institute proceedings in respect of such Event of Default in its own
name as Trustee hereunder;
(c) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(d) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding; and
(e) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Holders of a majority in
principal amount of the Outstanding Convertible Debentures;
it being understood and intended that no one or more Holders shall have any
right in any manner whatever by virtue of, or by availing of, any provision of
this Indenture to affect, disturb or prejudice the rights of any other Holders,
or to obtain or to seek to obtain priority or preference over any other Holders
or to enforce any right under this Indenture, except in the manner herein
provided and for the equal and ratable benefit of all the Holders.
SECTION 1008. UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL AND INTEREST
AND CONVERT.
Notwithstanding any other provision in this Indenture, the Holder of
any Convertible Debenture shall have the right, which is absolute and
unconditional, to receive
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payment of the principal of and (subject to Section 307) interest (including
Additional Payments, if any) on such Convertible Debenture on the respective
Stated Maturities expressed in such Convertible Debenture (or, in the case of
redemption, on the Redemption Date) and to convert such Convertible Debenture in
accordance with Article Thirteen and to institute suit for the enforcement of
any such payment and right to convert, and such rights shall not be impaired
without the consent of such Holder.
SECTION 1009. RESTORATION OF RIGHTS AND REMEDIES.
If the Trustee or any Holder has instituted any proceeding to enforce
any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Company, the Trustee and the Holders shall
be restored severally and respectively to their former positions hereunder and
thereafter all rights and remedies of the Trustee and the Holders shall continue
as though no such proceeding had been instituted.
SECTION 1010. RIGHTS AND REMEDIES CUMULATIVE.
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Convertible Debentures in the
last paragraph of Section 306, no right or remedy herein conferred upon or
reserved to the Trustee or to the Holders is intended to be exclusive of any
other right or remedy, and every right and remedy shall, to the extent permitted
by law, be cumulative and in addition to every other right and remedy given
hereunder or now or hereafter existing at law or in equity or otherwise. The
assertion or employment of any right or remedy hereunder, or otherwise, shall
not prevent the concurrent assertion or employment of any other appropriate
right or remedy.
SECTION 1011. DELAY OR OMISSION NOT WAIVER.
No delay or omission of the Trustee or of any Holder of any
Convertible Debenture to exercise any right or remedy accruing upon any Event of
Default shall impair any such right or remedy or constitute a waiver of any such
Event of Default or an acquiescence therein. Every right and remedy given by
this Article or by law to the Trustee or to the Holders may be exercised from
time to time, and as often as may be deemed expedient, by the Trustee or by the
Holders, as the case may be.
SECTION 1012. CONTROL BY HOLDERS.
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The Holders of a majority in principal amount of the Outstanding
Convertible Debentures shall have the right to direct the time, method and place
of conducting any proceeding for any remedy available to the Trustee or
exercising any trust or power conferred on the Trustee; PROVIDED, that
(a) such direction shall not be in conflict with any rule of law or
with this Indenture; and
(b) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
SECTION 1013. WAIVER OF PAST DEFAULTS.
Subject to Sections 502 and 902 hereof, the Holders of not less than a
majority in principal amount of the Outstanding Convertible Debentures may on
behalf of the Holders of all the Convertible Debentures waive any past default
hereunder and its consequences, except a default
(a) in the payment of the principal of, premium, if any, or interest
(including Additional Payments, if any) on any Convertible Debenture (unless
such default has been cured and a sum sufficient to pay all matured installments
of interest and principal due otherwise than by acceleration has been deposited
with the Trustee); or
(b) in respect of a covenant or provision hereof that under Article
Nine cannot be modified or amended without the consent of the Holder of each
Outstanding Security affected; PROVIDED, HOWEVER, that if the Convertible
Debentures are held by the Trust or a trustee of the Trust, such waiver shall
not be effective until the holders of a majority in liquidation amount of Trust
Securities shall have consented to such waiver; PROVIDED, FURTHER, that if the
consent of the Holder of each outstanding Convertible Debenture is required,
such waiver shall not be effective until each holder of the Trust Securities
shall have consented to such waiver.
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 consequent thereon.
SECTION 1014. UNDERTAKING FOR COSTS.
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In any suit for the enforcement of any right or remedy under this
Indenture, or in any suit against the Trustee for any action taken, suffered or
omitted by it as Trustee, a court may require any party litigant in such suit to
file an undertaking to pay the costs of such suit, and may assess costs against
any such party litigant, in the manner and to the extent provided in the Trust
Indenture Act; PROVIDED, that neither this Section nor the Trust Indenture Act
shall be deemed to authorize any court to require such an undertaking or to make
such an assessment in any suit instituted by the Company or the Trustee or in
any suit for the enforcement of the right to receive the principal of and
interest (including Additional Payments, if any) on any Convertible Debenture or
to convert any Convertible Debenture in accordance with Article Thirteen.
SECTION 1015. WAIVER OF STAY OR EXTENSION LAWS.
The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, or plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
SECTION 1016. ENFORCEMENT BY HOLDERS OF CONVERTIBLE PREFERRED SECURITIES.
Notwithstanding the foregoing, if an Event of Default has occurred and
is continuing and such event is attributable to the failure of the Company to
pay interest or principal on the Convertible Debentures on the date such
interest or principal is otherwise payable, the Company acknowledges that, in
such event, a holder of Convertible Preferred Securities may institute a Direct
Action for payment on or after the respective due date specified in the
Convertible Debentures. The Company may not amend this Indenture to remove the
foregoing right to bring a Direct Action without the prior written consent of
all the holders of Convertible Preferred Securities. Notwithstanding any
payment made to such holder of Convertible Preferred Securities by the Company
in connection with a Direct Action, the Company shall remain obligated to pay
the principal of and interest on the Convertible Debentures (including
Additional Payments, if any) held by the Trust or the Property Trustee and the
Company shall be subrogated to the rights of the holder of such Convertible
Preferred Securities with respect to payments on the Convertible Preferred
Securities to the extent of any payments made by the Company to such holder in
any Direct Action. The holders of Convertible Preferred Securities will not be
able to exercise directly any other remedy available to the Holders of the
Convertible Debentures.
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ARTICLE XII
The Trustee
SECTION 1201. CERTAIN DUTIES AND RESPONSIBILITIES.
The duties and responsibilities of the Trustee shall be as provided by
the Trust Indenture Act. Notwithstanding the foregoing, no provision of this
Indenture shall require the Trustee to expend or risk its own funds or otherwise
incur personal financial liability in the performance of any of its duties or in
the exercise of any of its rights or powers, if it shall have reasonable grounds
for believing that the repayment of such funds or liability is not reasonably
assured to it under the terms of this Indenture or indemnity reasonably
satisfactory to the Trustee against such risk or liability is not reasonably
assured to it. Whether or not therein expressly so provided, every provision of
this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this
Section 601.
SECTION 1202. NOTICE OF DEFAULTS.
The Trustee shall give the Holders notice of any Event of Default
hereunder as and to the extent provided by the Trust Indenture Act; PROVIDED,
HOWEVER, that in the case of any default of the character specified in
Section 501(d), no such notice to Holders shall be given until at least 30 days
after the occurrence thereof. For all purposes hereof, the Trustee shall not be
deemed to have notice or knowledge of any default described in Section 501(e),
(f) or (g) unless a Responsible Officer assigned to and working in the Corporate
Trust Office has actual knowledge thereof or unless written notice thereof is
received at the Corporate Trust Office.
SECTION 1203. CERTAIN RIGHTS OF TRUSTEE.
Subject to the provisions of Section 601:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document believed by it
to be genuine and to have been signed or presented by the proper party or
parties;
- 43 -
(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order and any resolution
of the Board of Directors may be sufficiently evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other evidence
be herein specifically prescribed) may, in the absence of bad faith on its part,
rely upon an Officers' Certificate;
(d) the Trustee may consult with counsel of its choice and the advice
of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or omitted
by it hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Holders pursuant to this Indenture, unless such Holders shall have
offered to the Trustee reasonable security or indemnity against the costs,
expenses and liabilities which might be incurred by it in compliance with such
request or direction;
(f) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document, but the
Trustee, in its discretion, may make such further inquiry or investigation into
such facts or matters as it may see fit, and, if the Trustee shall determine to
make such further inquiry or investigation, it shall be entitled to reasonable
examination of the books, records and premises of the Company, personally or by
Agent or attorney;
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any Agent or attorney appointed with due care by it
hereunder; and
(h) the Trustee shall not be liable for any action taken, suffered,
or omitted to be taken by it in good faith, without gross negligence or wilful
misconduct, and reasonably believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Indenture.
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SECTION 1204. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF CONVERTIBLE
DEBENTURES.
The recitals contained herein and in the Convertible Debentures,
except the Trustee's certificates of authentication, shall be taken as the
statements of the Company, and the Trustee assumes no responsibility for their
correctness. The Trustee makes no representations as to the validity or
sufficiency of this Indenture or of the Convertible Debentures. The Trustee
shall not be accountable for the use or application by the Company of the
Convertible Debentures or the proceeds thereof.
SECTION 1205. MAY HOLD CONVERTIBLE DEBENTURES.
The Trustee, any Paying Agent, any Security Registrar or any other
Agent of the Company, in its individual or any other capacity, may become the
owner or pledgee of Convertible Debentures and, subject to Sections 608 and 613,
may otherwise deal with the Company with the same rights it would have if it
were not Trustee, Paying Agent, Security Registrar, or such other Agent.
SECTION 1206. MONEY HELD IN TRUST.
Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall be
under no liability for interest on any money received by it hereunder except as
otherwise agreed with the Company.
SECTION 1207. COMPENSATION AND REIMBURSEMENT.
The Company agrees
(a) to pay to the Trustee from time to time such reasonable
compensation as the Company and the Trustee shall from time to time agree in
writing for all services rendered by it hereunder;
(b) except as otherwise expressly provided herein, to reimburse the
Trustee upon its request for all reasonable expenses, fees, disbursements and
advances incurred or made by the Trustee in accordance with any provision of
this Indenture (including the reasonable compensation and the expenses and
disbursements of its agents and counsel), except any such expense, disbursement
or advance as may be attributable to its negligence or bad faith; and
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(c) to indemnify the Trustee and any predecessor Trustee for, and to
hold it harmless against, any loss, liability or expense incurred without
negligence or bad faith on its part, arising out of or in connection with the
acceptance or administration of this trust, including the costs and expenses of
defending itself against any claim or liability in connection with the exercise
or performance of any of its powers or duties hereunder.
When the Trustee incurs expenses or renders services in connection
with an Event of Default specified in Section 501(f) or Section 501(g), the
expenses (including the reasonable charges and expenses of its counsel) and the
compensation for the services are intended to constitute expenses of
administration under any applicable federal or state bankruptcy, insolvency or
other similar law.
The provisions of this Section shall survive the termination of this
Indenture.
SECTION 1208. DISQUALIFICATION; CONFLICTING INTERESTS.
If the Trustee has or shall acquire a conflicting interest within the
meaning of the Trust Indenture Act, the Trustee shall either eliminate such
interest or resign, to the extent and in the manner provided by, and subject to
the provisions of, the Trust Indenture Act and this Indenture.
SECTION 1209. CORPORATE TRUSTEE REQUIRED; ELIGIBILITY.
There shall at all times be a Trustee hereunder which shall be a
Person that is eligible pursuant to the Trust Indenture Act to act as such and
has a combined capital and surplus of at least $25,000,000 as set forth in its
most recent published annual report of conditions and has its Corporate Trust
Office in New York, New York. If such Person publishes reports of condition at
least annually, pursuant to law or to the requirements of said supervising or
examining authority, then for the purposes of this Section, the combined capital
and surplus of such Person shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. If at
any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section, it shall resign immediately in the manner and with
the effect hereinafter specified in this Article.
SECTION 1210. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee under Section 611.
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(b) The Trustee may resign at any time by giving written notice
thereof to the Company. If an instrument of acceptance by a successor Trustee
shall not have been delivered to the Trustee within 30 days after the giving of
such notice of resignation, the resigning Trustee may petition any court of
competent jurisdiction for the appointment of a successor Trustee.
(c) The Trustee may be removed at any time by Act of the Holders of a
majority in principal amount of the Outstanding Convertible Debentures,
delivered to the Trustee and to the Company. If an instrument of acceptance by
a successor Trustee shall not have been delivered to the Trustee within 30 days
after the giving of such notice of resignation, the resigning Trustee may
petition any court of competent jurisdiction for the appointment of a successor
Trustee.
(d) If at any time:
(i) the Trustee shall fail to comply with Section 608 after
written request therefor by the Company or by any Holder who has been
a bona fide Holder of a Convertible Debenture for at least six months,
or
(ii) the Trustee shall cease to be eligible under
Section 609 and shall fail to resign after written request therefor by
the Company or by any such Holder, or
(iii) the Trustee shall become incapable of acting or shall
be adjudged a bankrupt or insolvent or a receiver of the Trustee or of
its property shall be appointed or any public officer shall take
charge or control of the Trustee or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation,
then, in any such case, (A) the Company by Board Resolution may remove the
Trustee, or (B) subject to Section 514, any Holder who has been a bona fide
Holder of a Convertible Debenture for at least six months may, on behalf of
himself and all others similarly situated, petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
Trustee.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause, the
Company, by a Board Resolution, shall promptly appoint a successor Trustee. If,
within one year after such resignation, removal or incapability, or the
occurrence of such vacancy, a successor Trustee shall be appointed by Act of the
Holders of a majority in principal amount of the Outstanding
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Convertible Debentures delivered to the Company and the retiring Trustee, the
successor Trustee so appointed shall, forthwith upon its acceptance of such
appointment, become the successor Trustee and supersede the successor Trustee
appointed by the Company. If no successor Trustee shall have been so appointed
by the Company or the Holders and accepted appointment in the manner hereinafter
provided, any Holder who has been a bona fide Holder of a Convertible Debenture
for at least six months may, on behalf of himself and all others similarly
situated, petition any court of competent jurisdiction for the appointment of a
successor Trustee.
(f) The Company shall give notice of each resignation and each
removal of the Trustee and each appointment of a successor Trustee to all
Holders in the manner provided in Section 106. Each notice shall include the
name of the successor Trustee and the address of its Corporate Trust Office.
SECTION 1211. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
Every successor Trustee appointed hereunder shall execute, acknowledge
and deliver to the Company and to the retiring Trustee an instrument accepting
such appointment, and thereupon the resignation or removal of the retiring
Trustee shall become effective and such successor Trustee, without any further
act, deed or conveyance, shall become vested with all the rights, powers, trusts
and duties of the retiring Trustee; PROVIDED, that on request of the Company or
the successor Trustee, such retiring Trustee shall, upon payment of its charges,
execute and deliver an instrument transferring to such successor Trustee all the
rights, powers and trusts of the retiring Trustee and shall duly assign,
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder. Upon request of any such successor Trustee,
the Company shall execute any and all instruments required to more fully and
certainly vest in and confirm to such successor Trustee all such rights, powers
and trusts.
No successor Trustee shall accept its appointment unless at the time
of such acceptance such successor Trustee shall be qualified and eligible under
this Article.
SECTION 1212. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS.
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any
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of the parties hereto. In case any Convertible Debentures shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Convertible Debentures so authenticated with
the same effect as if such successor Trustee had itself authenticated such
Convertible Debentures.
SECTION 1213. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
If and when the Trustee shall be or become a creditor of the Company
(or any other obligor upon the Convertible Debentures), the Trustee shall be
subject to the provisions of the Trust Indenture Act regarding the collection of
claims against the Company (or any such other obligor).
ARTICLE XIV
Holders' Lists and Reports by Trustee and Company
SECTION 1401. COMPANY TO FURNISH TRUSTEE NAMES AND ADDRESSES OF HOLDERS.
The Company will furnish or cause to be furnished to the Trustee
(a) semiannually, not later than February 15 and August 15 in each
year, a list, in such form as the Trustee may reasonably require, of the names
and addresses of the Holders as of a date not more than 15 days prior to the
delivery thereof to the extent such list is not already held by the Trustee, and
(b) at such other times as the Trustee may request in writing, within
30 days after the receipt by the Company of any such request, a list of similar
form and content as of a date not more than 15 days prior to the time such list
is furnished;
EXCLUDING from any such list names and addresses received by the Trustee in its
capacity as Security Registrar.
SECTION 1402. PRESERVATION OF INFORMATION; COMMUNICATIONS TO HOLDERS.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list furnished to the Trustee as provided in Section 701 and the names and
addresses of Holders received by the Trustee in its capacity as Security
Registrar. The Trustee may destroy any list furnished to it as provided in
Section 701 upon receipt of a new list so furnished.
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(b) The rights of Holders to communicate with other Holders with
respect to their rights under this Indenture or under the Convertible
Debentures, and the corresponding rights and duties of the Trustee, shall be as
provided by the Trust Indenture Act.
(c) Every Holder of Convertible Debentures, by receiving and holding
the same, agrees with the Company and the Trustee that neither the Company nor
the Trustee nor any Agent of either of them shall be held accountable by reason
of any disclosure of information as to names and addresses of Holders made
pursuant to the Trust Indenture Act.
SECTION 1403. REPORTS BY TRUSTEE.
(a) Within 60 days after May 15 of each year, commencing May 15, 1999
(unless a report is required to be transmitted before such date by the TIA, in
which case before such date so as to comply with the TIA), the Trustee shall
transmit by mail to Holders such reports concerning the Trustee and its actions
under this Indenture as may be required pursuant to the Trust Indenture Act in
the manner provided pursuant thereto.
(b) A copy of each such report shall, at the time of such
transmission to Holders, be filed by the Trustee with each stock exchange upon
which the Convertible Debentures are listed, with the Commission and with the
Company. The Company will notify the Trustee when the Convertible Debentures
are listed on any stock exchange.
SECTION 1404. REPORTS BY COMPANY.
The Company shall file with the Trustee and the Commission, and
transmit to Holders, such information, documents and other reports, and such
summaries thereof, as may be required pursuant to the Trust Indenture Act at the
times and in the manner provided pursuant to such Act; PROVIDED, that any such
information, documents or reports required to be filed with the Commission
pursuant to Section 13 or 15(d) of the Exchange Act shall be filed with the
Trustee within 15 days after the same is so required to be filed with the
Commission.
Delivery of such reports, information and documents to the Trustee is
for informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
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The Company shall also provide to the Trustee on a timely basis such
information as the Trustee requires to enable the Trustee to prepare and file
any form required to be submitted by the Company with the Internal Revenue
Service and the Holders of the Convertible Debentures relating to original issue
discount, if any, including, without limitation, Form 1099-OID or any successor
form.
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ARTICLE XVI
Consolidation, Merger, Conveyance, Transfer or Lease
SECTION 1601. COMPANY MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS.
The Company shall not consolidate with or merge with or into any other
Person or, directly or indirectly, convey, transfer or lease all or
substantially all of its properties and assets on a consolidated basis to any
Person, unless:
(a) the Person formed by such consolidation or into which the Company
is merged or the Person which acquires by conveyance, transfer or lease, all or
substantially all of the properties and assets of the Company on a consolidated
basis shall be a corporation, partnership or trust, shall be organized and
validly existing under the laws of the United States of America, any State
thereof or the District of Columbia and shall expressly assume, by an indenture
supplemental hereto, executed and delivered to the Trustee, in form reasonably
satisfactory to the Trustee, the due and punctual payment of the principal of
(and premium, if any) and interest (including Additional Payments, if any) on
all the Convertible Debentures and the performance or observance of every
covenant of this Indenture on the part of the Company to be performed or
observed and shall have provided for conversion rights in accordance with
Article Thirteen;
(b) immediately after giving effect to such transaction and treating
any indebtedness which becomes an obligation of the Company or a Subsidiary as a
result of such transaction as having been incurred by the Company or such
Subsidiary at the time of such transaction, no Event of Default, and no event
which, after notice or lapse of time or both, would become an Event of Default,
shall have happened and be continuing; and
(c) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that such consolidation, merger,
conveyance, transfer or lease and, if a supplemental indenture is required in
connection with such transaction, such supplemental indenture, comply with this
Article and that all conditions precedent herein provided for relating to such
transaction have been complied with.
This Section shall only apply to a merger or consolidation in which
the Company is not the surviving corporation and to conveyances, leases and
transfers by the Company as transferor or lessor.
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SECTION 1602. SUCCESSOR SUBSTITUTED.
Upon any consolidation of the Company with, or merger of the Company
into, any other Person or any conveyance, transfer or lease of all or
substantially all the properties and assets of the Company on a consolidated
basis in accordance with Section 801, the successor Person formed by such
consolidation or into which the Company is merged or to which such conveyance,
transfer or lease is made shall succeed to, and be substituted for, and may
exercise every right and power of, the Company under this Indenture with the
same effect as if such successor Person had been named as the Company herein,
and thereafter the predecessor Person shall be relieved of all obligations and
covenants under this Indenture and the Convertible Debentures.
ARTICLE XVIII
Supplemental Indentures
SECTION 1801. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS.
Without the consent of any Holders, the Company, when authorized by a
Board Resolution, and the Trustee, at any time and from time to time, may enter
into one or more indentures supplemental hereto, in form satisfactory to the
Trustee, for any of the following purposes:
(a) to evidence the succession of another Person to the Company and
the assumption by any such successor of the covenants of the Company herein and
in the Convertible Debentures; or
(b) to add to the covenants of the Company for the benefit of the
Holders, or to surrender any right or power herein conferred upon the Company;
or
(c) to make provision with respect to the conversion rights of
Holders pursuant to the requirements of Article Thirteen; or
(d) to cure any ambiguity, to correct or supplement any provision
herein which may be inconsistent with any other provision herein, or to make any
other provisions with respect to matters or questions arising under this
Indenture which shall not be inconsistent with the provisions of this Indenture;
PROVIDED, that such action pursuant to this Clause (d) shall not adversely
affect in any material respect the interests of the Holders of the Convertible
Debentures or, so long as any of the Convertible Preferred Securities shall
remain outstanding, the holders of the Convertible Preferred Securities; or
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(e) to comply with the requirements of the Commission in order to
effect or maintain the qualification of this Indenture under the Trust Indenture
Act; or
(f) to make provision for transfer procedures, certification,
book-entry provisions, the form of restricted securities legends, if any, to be
placed on Convertible Debentures, and all other matters required pursuant to
Sections 305 and 314 or otherwise necessary, desirable or appropriate in
connection with the issuance of Convertible Debentures to holders of Convertible
Preferred Securities in the event of a distribution of Convertible Debentures by
the Trust if a Special Event occurs and is continuing.
SECTION 1802. SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS.
With the consent of the Holders of not less than a majority in
principal amount of the Outstanding Convertible Debentures, by Act of said
Holders delivered to the Company and the Trustee, the Company, when authorized
by a Board Resolution, and the Trustee may enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Indenture or of
modifying in any manner the rights of the Holders under this Indenture;
PROVIDED, HOWEVER, that no such supplemental indenture shall, without the
consent of the Holder of each Outstanding Security affected thereby,
(a) extend the Stated Maturity of the principal of, or any
installment of interest (including Additional Payments, if any) on, any
Convertible Debenture, or reduce the principal amount thereof, or reduce the
rate or extend the time for payment of interest thereon (other than pursuant to
terms hereof on the date of the first issuance of the Convertible Debentures
hereunder), or extend the Extension Period, or reduce any premium payable upon
the redemption thereof, or change the place of payment to a location outside the
United States where, or the coin or currency in which, any Convertible Debenture
or interest thereon is payable, or impair the right to institute suit for the
enforcement of any such payment on or after the Stated Maturity thereof (or, in
the case of redemption, on or after the Redemption Date), or adversely affect
the right to convert any Convertible Debenture as provided in Article Thirteen
(except as permitted by Section 901(c) and (f)), or modify the provisions of
this Indenture with respect to the subordination of the Convertible Debentures
in a manner adverse to the Holders, or
(b) reduce the percentage in principal amount of the Outstanding
Convertible Debentures, the consent of whose Holders is required for any such
supplemental indenture, or the consent of whose Holders is required for any
waiver (of compliance with certain provisions of this Indenture or certain
defaults hereunder and their consequences) provided
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for in this Indenture, or modify any of the provisions of this Section or
Section 513, except to increase any such percentage or to provide that certain
other provisions of this Indenture cannot be modified or waived without the
consent of the Holder of each Outstanding Security affected thereby;
PROVIDED that if the Convertible Debentures are held by the Trust or a trustee
of the Trust, such supplemental indenture shall not be effective until the
holders of a majority in liquidation amount of Trust Securities shall have
consented to such supplemental indenture; PROVIDED, FURTHER, that if the consent
of the Holder of each Outstanding Security is required, such supplemental
indenture shall not be effective until each holder of the Trust Securities of
the Trust shall have consented to such supplemental indenture.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Persons entitled to consent to any indenture
supplemental hereto. If a record date is fixed, the Holders on such record
date, or their duly designated proxies, and only such Persons, shall be entitled
to consent to such supplemental indenture, whether or not such Holders remain
Holders after such record date; PROVIDED that unless such consent shall have
become effective by virtue of the requisite percentage having been obtained
prior to the date which is 90 days after such record date, any such consent
previously given shall automatically and without further action by any Holder be
cancelled and of no further effect.
SECTION 1803. EXECUTION OF SUPPLEMENTAL INDENTURES.
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 601) shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Trustee may, but shall not be
obligated to, enter into any such supplemental indenture which affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise.
SECTION 1804. EFFECT OF SUPPLEMENTAL INDENTURES.
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Convertible Debentures
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theretofore or thereafter authenticated and delivered hereunder shall be bound
thereby. No such supplemental indenture shall directly or indirectly modify the
provisions of Article Twelve in any manner which might terminate or impair the
rights of the Senior Indebtedness pursuant to such subordination provisions.
SECTION 1805. CONFORMITY WITH TRUST INDENTURE ACT.
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act.
SECTION 1806. REFERENCE IN CONVERTIBLE DEBENTURES TO SUPPLEMENTAL INDENTURES.
Convertible Debentures authenticated and delivered after the execution
of any supplemental indenture pursuant to this Article may, and shall if
required by the Trustee, bear a notation in form approved by the Trustee as to
any matter provided for in such supplemental indenture. If the Company shall so
determine, new Convertible Debentures so modified as to conform, in the opinion
of the Trustee and the Company, to any such supplemental indenture may be
prepared and executed by the Company and authenticated and delivered by the
Trustee in exchange for Outstanding Convertible Debentures.
ARTICLE XX
Covenants; Representations and Warranties
SECTION 2001. PAYMENT OF PRINCIPAL AND INTEREST.
The Company will duly and punctually pay the principal of and interest
on the Convertible Debentures and Additional Payments, if any, in accordance
with the terms of the Convertible Debentures and this Indenture.
SECTION 2002. MAINTENANCE OF OFFICE OR AGENCY.
The Company will maintain in the United States an office or agency
where Convertible Debentures may be presented or surrendered for payment, where
Convertible Debentures may be surrendered for registration of transfer or
exchange and where notices and demands to or upon the Company in respect of the
Convertible Debentures and this Indenture may be served. The Company will give
prompt written notice to the Trustee of the location, and any change in the
location, of such office or agency. 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
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at the Corporate Trust Office of the Trustee, and the Company hereby appoints
the Trustee as its Agent to receive all such presentations, surrenders, notices
and demands.
The Company may also from time to time designate one or more other
offices or agencies (in the United States) where the Convertible Debentures may
be presented or surrendered for any or all such purposes and may from time to
time rescind such designations; PROVIDED, HOWEVER, that no such designation or
rescission shall in any manner relieve the Company of its obligation to maintain
an office or agency in the United States for such purposes. The Company will
give prompt written notice to the Trustee of any such designation or rescission
and of any change in the location of any such other office or agency.
SECTION 2003. MONEY FOR CONVERTIBLE DEBENTURE PAYMENTS TO BE HELD IN TRUST.
If the Company shall at any time act as its own Paying Agent, it will,
on or before each due date of the principal of or interest on any of the
Convertible Debentures, segregate and hold in trust for the benefit of the
Persons entitled thereto a sum sufficient to pay the principal or interest so
becoming due until such sums shall be paid to such Persons or otherwise disposed
of as herein provided and will promptly notify the Trustee of its action or
failure so to act.
Whenever the Company shall have one or more Paying Agents, it will,
prior to each due date of the principal of or interest on any Convertible
Debentures, deposit with a Paying Agent a sum sufficient to pay such amount,
such sum to be held as provided by the Trust Indenture Act, and (unless such
Paying Agent is the Trustee) the Company will promptly notify the Trustee of its
action or failure so to act.
The Company will cause each Paying Agent other than the Trustee to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject to the provisions of this Section, that
such Paying Agent will (i) comply with the provisions of the Trust Indenture Act
applicable to it as a Paying Agent and (ii) during the continuance of any
default by the Company (or any other obligor upon the Convertible Debentures) in
the making of any payment in respect of the Convertible Debentures, upon the
written request of the Trustee, forthwith pay to the Trustee all sums held in
trust by such Paying Agent as such.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any
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Paying Agent to the Trustee, such Paying Agent shall be released from all
further liability with respect to such money.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of or interest on
(including Additional Payments, if any) any Convertible Debenture and remaining
unclaimed for two years after such principal or interest has become due and
payable shall be paid to the Company on Company Request, or (if then held by the
Company) shall be discharged from such trust; and the Holder of any such
Convertible Debenture shall thereafter, as an unsecured general creditor, look
only to the Company for payment thereof, and all liability of the Trustee or
such Paying Agent with respect to such trust money, and all liability of the
Company as trustee thereof, shall thereupon cease.
SECTION 2004. STATEMENT BY OFFICERS AS TO DEFAULT.
The Company will deliver to the Trustee, within 120 days after the end
of each fiscal year of the Company ending after the date hereof, an Officers'
Certificate, stating whether or not to the best knowledge of the signers thereof
the Company is in default in the performance and observance of any of the
material terms, provisions and conditions of this Indenture (without regard to
any period of grace or requirement of notice provided hereunder) and, if the
Company shall be in default, specifying all such defaults and the nature and
status thereof of which they may have knowledge.
SECTION 2005. LIMITATION ON DIVIDENDS; COVENANTS AS TO THE TRUST.
(a) The Company covenants that so long as the Convertible Debentures
are outstanding, if (i) there shall have occurred and be continuing any event
that with the giving of notice or the lapse of time or both, would constitute an
Event of Default, (ii) the Company shall be in default with respect to its
payment of any obligations under the Guarantee, or (iii) the Company has
exercised its option to defer interest payments on the Convertible Debentures by
extending the interest payment period and such period, or any extension thereof,
shall be continuing, then the Company shall (A) not declare or pay dividends on,
or make a distribution with respect to, or redeem or purchase or acquire, or
make a liquidation payment with respect to, any of its capital stock (other than
(x) purchases or acquisitions of shares of Sun Common Stock in connection with
the satisfaction by the Company of its obligations under any employee benefit
plans or the satisfaction by the Company of its obligations pursuant to any
contract or security requiring the Company to purchase shares of Sun Common
Stock, (y) as a result of a reclassification of the Company's capital stock or
the exchange or conversion of one class or series of the Company's capital stock
for another class or series of the Company's capital stock or (z) the purchase
of fractional interests in shares
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of the Company's capital stock pursuant to the conversion or exchange provisions
of such capital stock or the security being converted or exchanged (or make any
guarantee payments with respect to the foregoing), (B) not make any payment of
interest, principal or premium, if any, on or repay, repurchase or redeem any
debt securities (including guarantees) issued by the Company that rank PARI
PASSU with or junior to the Convertible Debentures (except by conversion into or
exchange for shares of its capital stock) and (C) not make any guarantee
payments with respect to the foregoing (other than pursuant to the Guarantee).
(b) The Company also covenants and agrees (i) that it shall directly
or indirectly maintain 100% ownership of the Common Securities of the
Trust; PROVIDED, HOWEVER, that any permitted successor of the Company hereunder
may succeed to the Company's ownership of such Common Securities and (ii) that
it shall use its reasonable efforts, consistent with the terms and provisions of
the Declaration, to cause the Trust (x) to remain a statutory business trust,
except in connection with the distribution of the Convertible Debentures to the
holders of Trust Securities in liquidation of the Trust, the redemption of all
of the Trust Securities of the Trust, or certain mergers, consolidations or
amalgamations, each as permitted by the Declaration, and (y) to otherwise
continue to be classified as a grantor trust for United States Federal income
tax purposes.
SECTION 2006. PAYMENT OF EXPENSES OF THE TRUST.
In connection with the offering, sale and issuance of the Convertible
Debentures to the Property Trustee in connection with the sale of the Trust
Securities by the Trust, the Company shall:
(a) pay for all costs, fees and expenses relating to the offering,
sale and issuance of the Convertible Debentures, including commissions,
discounts and expenses payable pursuant to the Purchase Agreement and
compensation of the Trustee under the Indenture in accordance with the
provisions of Section 607 of the Indenture;
(b) be responsible for and pay for all debts and obligations (other
than with respect to the Trust Securities) of the Trust, pay for all costs and
expenses of the Trust (including, but not limited to, costs and expenses
relating to the organization of the Trust, the offering, sale and issuance of
the Trust Securities (including commissions, discounts and expenses in
connection therewith), the fees and expenses of the Property Trustee and the
Delaware Trustee, the costs and expenses relating to the operation of the Trust,
including without limitation, costs and expenses of accountants, attorneys,
statistical or bookkeeping services, expenses for printing and engraving and
computing or accounting equipment, paying Agent(s), registrar(s), transfer
Agent(s), duplicating, travel and telephone and other
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telecommunications expenses and costs and expenses incurred in connection with
the acquisition, financing, and disposition of Trust assets); and
pay any and all taxes (other than United States withholding taxes attributable
to the Trust or its assets) and all liabilities, costs and expenses with respect
to such taxes of the Trust.
SECTION 2007. REGISTRATION RIGHTS.
The holders of the Convertible Preferred Securities, the Holders of
Convertible Debentures, the holders of the Guarantee and the shares of Sun
Common Stock issuable upon conversion of the Convertible Debentures are entitled
to the benefits of the Registration Rights Agreement as of May 4, 1998 between
the Company and the Initial Purchasers (the "REGISTRATION RIGHTS AGREEMENT").
ARTICLE XXII
Redemption of Convertible Debentures
SECTION 2201. OPTIONAL REDEMPTION.
(a) The Company shall have the right to redeem the Convertible
Debentures, in whole or in part, at any time or from time to time after May 3,
2001 upon not less than 30 nor more than 60 days notice, at the optional
redemption prices (expressed as a percentage of the principal amount of
Convertible Debentures to be redeemed) shown below, plus any accrued and unpaid
interest (including Additional Payments, if any) to the Redemption Date, if
redeemed during the 12-month period beginning May 3:
Percentage of
Principal
Year Amount
---- -------------
2001 . . . . . . . . . . . . . . . . 104.000%
2002 . . . . . . . . . . . . . . . . 103.000%
2003 . . . . . . . . . . . . . . . . 102.000%
2004 . . . . . . . . . . . . . . . . 101.000%
2005 and thereafter. . . . . . . . . 100.000%
If the Company has deferred interest payments, all unpaid interest must be paid
in cash prior to any notice of redemption. Any redemption pursuant to this
Section 1101 shall be made pursuant to the provisions of Sections 1103 through
1108 hereof.
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(b) If a partial redemption of the Convertible Debentures would
result in the delisting of the Convertible Preferred Securities issued by the
Trust from any national securities exchange or other organization on which the
Convertible Preferred Securities are listed, the Company shall not be permitted
to effect such partial redemption and may only redeem the Convertible Debentures
in whole.
SECTION 2202. TAX EVENT OPTIONAL REDEMPTION.
If a Tax Event has occurred and is continuing and:
(a) the Company has received a Redemption Tax Opinion; or
(b) after receiving a Dissolution Tax Opinion, the Administrative
Trustees shall have been informed by tax counsel rendering the Dissolution Tax
Opinion that a No Recognition Opinion cannot be delivered to the Trust, then,
notwithstanding Section 1101(a) but subject to Section 1101(b), the Company
shall have the right upon not less than 30 days nor more than 60 days notice to
the Holders of the Convertible Debentures to redeem the Convertible Debentures
in whole (but not in part) for cash at a redemption price equal to 100% of the
principal amount of the Convertible Debentures plus accrued and unpaid interest
(including Additional Payments) if any, within 90 days following the occurrence
of such Tax Event (the "90-Day Period"); PROVIDED, HOWEVER, that if, at the time
there is available to the Company or the Trust the opportunity to eliminate
within the 90-Day Period, the Tax Event by taking some ministerial action
("Ministerial Action"), such as filing a form or making an election, or pursuing
some other similar reasonable measure which, in the sole judgment of the
Company, has or will cause no adverse effect on the Company, the Trust or the
Holders of the Trust Securities and will involve no material cost, the Company
or the Trust shall pursue such Ministerial Action or other measure in lieu of
redemption, and PROVIDED, FURTHER, that the Company shall have no right to
redeem the Convertible Debentures while the Trust is pursuing any Ministerial
Action or other similar measure pursuant to its obligations under the
Declaration.
SECTION 2203. APPLICABILITY OF ARTICLE.
Redemption of Convertible Debentures at the election of the Company,
as permitted by Sections 1101 and 1102, shall be made in accordance with such
provision and this Article.
SECTION 2204. ELECTION TO REDEEM; NOTICE TO TRUSTEE.
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The election of the Company to redeem Convertible Debentures pursuant
to Section 1101 or 1102 shall be evidenced by a Board Resolution. In case of
any redemption at the election of the Company, the Company shall, at least 45
days and no more than 90 days prior to the Redemption Date fixed by the Company,
notify the Trustee in writing of such Redemption Date and of the principal
amount of Convertible Debentures to be redeemed and provide a copy of the notice
of redemption given to Holders of Convertible Debentures to be redeemed pursuant
to Section 1105.
SECTION 2205. SELECTION BY TRUSTEE OF CONVERTIBLE DEBENTURES TO BE REDEEMED.
If less than all the Convertible Debentures are to be redeemed (unless
such redemption affects only a single Convertible Debenture), the particular
Convertible Debentures to be redeemed shall be selected not more than 60 days
prior to the Redemption Date by the Trustee, from the Outstanding Convertible
Debentures not previously called for redemption, by such method as the Trustee
shall deem fair and appropriate and which may provide for the selection for
redemption of portions (equal to $25 or any integral multiple thereof) of the
principal amount of the Convertible Debentures.
The Trustee shall promptly notify the Company in writing of the
Convertible Debentures selected for redemption as aforesaid and, in case of any
Convertible Debentures selected for partial redemption as aforesaid, the
principal amount thereof to be redeemed.
The provisions of the two preceding paragraphs shall not apply with
respect to any redemption affecting only a single Convertible Debenture, whether
such Convertible Debenture is to be redeemed in whole or in part. In the case
of any such redemption in part, the unredeemed portion of the principal amount
of the Convertible Debenture shall be in an authorized denomination (which shall
not be less than the minimum authorized denomination) for such Convertible
Debenture.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Convertible Debentures
shall relate, in the case of any Convertible Debentures redeemed or to be
redeemed only in part, to the portion of the principal amount of such
Convertible Debentures which has been or is to be redeemed.
SECTION 2206. NOTICE OF REDEMPTION.
Notice of redemption shall be given by first-class mail, postage
prepaid, mailed not less than 30 nor more than 60 days prior to the Redemption
Date, to each Holder of Convertible Debentures to be redeemed, at such Holder's
address appearing in the Security Register.
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All notices of redemption shall identify the Convertible Debentures to
be redeemed (including, if relevant, CUSIP number or ISIN) and shall state:
(a) the Redemption Date,
(b) the Redemption Price,
(c) that on the Redemption Date the Redemption Price will become due
and payable upon each such Convertible Debenture to be redeemed and that
interest thereon will cease to accrue on and after said date, and
(d) the place or places where such Convertible Debentures are to be
surrendered for payment of the Redemption Price.
Notice of redemption of Convertible Debentures to be redeemed at the
election of the Company shall be given by the Company or, at the Company's
request, by the Trustee in the name and at the expense of the Company.
SECTION 2207. DEPOSIT AND PAYMENT OF REDEMPTION PRICE.
Prior to 10:30 a.m. (New York City time) on the Redemption Date, the
Company shall deposit with the Trustee or with a Paying Agent (or, if the
Company is acting as its own Paying Agent, segregate and hold in trust as
provided in Section 1003) an amount of money sufficient to pay the Redemption
Price of, plus (except if the Redemption Date shall be an Interest Payment Date)
accrued and unpaid interest (including Additional Payments, if any) on all the
Convertible Debentures which are to be redeemed on that date. If the
Convertible Debentures or the Convertible Preferred Securities are held by a
Depository, such redemption payment shall be made to the Holders prior to 12:00
noon (New York City time) on the Redemption Date or such earlier time as the
Company determines.
If any Convertible Debenture called for redemption is converted, any
money deposited with the Trustee or with any Paying Agent or so segregated and
held in trust for the redemption of such Convertible Debenture shall (subject to
any right of the Holder of such Convertible Debenture or any Predecessor
Security to receive interest as provided in the last paragraph of Section 307)
be paid to the Company upon Company Request or, if then held by the Company,
shall be discharged from such trust.
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SECTION 2208. CONVERTIBLE DEBENTURES PAYABLE ON REDEMPTION DATE.
Notice of redemption having been given as aforesaid, the Convertible
Debentures so to be redeemed shall, on the Redemption Date, become due and
payable at the Redemption Price therein specified, and from and after such date
(unless the Company shall default in the payment of the Redemption Price and
accrued and unpaid interest, including Additional Payments, if any) such
Convertible Debentures shall cease to bear interest. Upon surrender of any such
Convertible Debenture for redemption in accordance with said notice, such
Convertible Debenture shall be paid by the Company at the Redemption Price,
together with accrued and unpaid interest (including Additional Payments, if
any) to the Redemption Date; PROVIDED, HOWEVER, that installments of interest
whose Stated Maturity is on or prior to the Redemption Date shall be payable to
the Holders of such Convertible Debentures, or one or more Predecessor
Convertible Debentures, registered as such at 5:00 p.m. (New York City time) on
the relevant Record Dates according to the terms and the provisions of Section
307.
If any Convertible Debenture called for redemption shall not be so
paid upon surrender thereof for redemption, the principal shall, until paid,
bear interest from the Redemption Date at the rate borne by the Convertible
Debenture.
SECTION 2209. CONVERTIBLE DEBENTURES REDEEMED IN PART.
In the event of any redemption in part, the Company shall not be
required to (i) issue, register the transfer of or exchange any Convertible
Debenture during a period beginning at 9:00 a.m. (New York City time) 15
Business Days before any selection for redemption of Convertible Debentures and
ending 5:00 p.m. (New York City time) on the earliest date in which the relevant
notice of redemption is deemed to have been given to all holders of Convertible
Debentures to be so redeemed or (ii) register the transfer of or exchange any
Convertible Debentures so selected for redemption, in whole or in part, except
for the unredeemed portion of any Convertible Debentures being redeemed in part.
Any Convertible Debenture which is to be redeemed only in part shall
be surrendered at a place of payment therefor (with, if the Company or the
Trustee so requires, due endorsement by, or a written instrument of transfer in
form satisfactory to the Company and the Trustee duly executed by, the Holder
thereof or his attorney duly authorized in writing), and the Company shall
execute, and the Trustee shall authenticate and make available for delivery to
the Holder of such Convertible Debenture without service charge, a new
Convertible Debenture or Convertible Debentures, of any authorized denomination
as requested by such Holder, in aggregate principal amount equal to and in
exchange for the unredeemed portion of the principal of the Convertible
Debenture so surrendered.
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SECTION 2210. NO SINKING FUND.
The Convertible Debentures are not entitled to the benefit of any
sinking fund.
SECTION 2211. MANDATORY REDEMPTION.
Upon (i) repayment at maturity or (ii) as a result of acceleration
upon the occurrence and continuation of an Event of Default, the Company shall
redeem the Outstanding Convertible Debentures in whole but not in part, at a
redemption price equal to 100% of the principal amount of such Convertible
Debentures plus any accrued and unpaid interest, including any Additional
Payments, to the date fixed for redemption. Any payment pursuant to this
section shall be made prior to 12:00 noon, New York City time, on the date of
such repayment or acceleration or at such other time on such earlier date as the
parties thereto shall agree.
SECTION 2212. EXCHANGE OF TRUST SECURITIES FOR CONVERTIBLE DEBENTURES.
At any time, the Company shall have the right to dissolve the Trust
and cause the Convertible Debentures to be distributed to the holders of the
Convertible Preferred Securities in dissolution of the Trust after satisfaction
of liabilities to creditors of the Trust in accordance with Section 314 and as
provided by applicable law.
ARTICLE XXIV
Subordination of Convertible Debentures
SECTION 2401. AGREEMENT TO SUBORDINATE.
The Company covenants and agrees, and each Holder of Convertible
Debentures by such Holder's acceptance thereof likewise covenants and agrees,
that all Convertible Debentures shall be issued subject to the provisions of
this Article Twelve; and each Holder of a Convertible Debenture, whether upon
original issue or upon transfer or assignment thereof, accepts and agrees to be
bound by such provisions. The payment by the Company of the principal of,
premium, if any, and interest (including Additional Payments, if any) on all
Convertible Debentures issued hereunder shall, to the extent and in the manner
hereinafter set forth, be subordinated and junior in right of payment to the
prior payment in full of all existing and future Senior Indebtedness, whether
outstanding at the date of this Indenture or thereafter incurred; PROVIDED
HOWEVER, that no provision of this Article Twelve shall prevent the occurrence
of any default or Event of Default hereunder.
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SECTION 2402. DEFAULT ON SENIOR INDEBTEDNESS.
(a) No payment (by set-off or otherwise) shall be made by or on
behalf of the Company on account of the principal of, premium, if any, or
interest on the Convertible Debentures (including any repurchases of Convertible
Debentures), or on account of the redemption provisions of the Convertible
Debentures, for cash or property (other than Junior Convertible Debentures or
from a Defeasance Trust), (i) upon the maturity of any Senior Indebtedness of
the Company by lapse of time, acceleration (unless waived) or otherwise, unless
and until all principal of, premium, if any, and the interest on such Senior
Indebtedness are first paid in full in cash or Cash Equivalents (or such payment
is duly provided for) or otherwise to the extent holders accept satisfaction of
amounts due by settlement in other than cash or Cash Equivalents, or (ii) in the
event of default in the payment of any principal of, premium, if any, or
interest on Senior Indebtedness of the Company having an aggregate principal
amount outstanding in excess of $5.0 million when it becomes due and payable,
whether at maturity or at a date fixed for prepayment or by declaration or
otherwise (a "PAYMENT DEFAULT"), unless and until (in the case of both (i) and
(ii)) such Payment Default has been cured or waived or otherwise has ceased to
exist.
(b) Upon (i) the happening of an event of default (other than a
Payment Default) that permits the holder of Senior Indebtedness to declare such
Senior Indebtedness to be due and payable and (ii) written notice of such event
of default given to the Company and the Trustee by the Representative under the
Credit Agreement or the holders of an aggregate of at least $50 million
principal amount outstanding of any other Senior Indebtedness, which Senior
Indebtedness is designated by the Company ("Designated Senior Indebtedness") or
their representative (a "PAYMENT NOTICE"), then, unless and until such event of
default has been cured or waived or otherwise has ceased to exist, no payment
(by set-off or otherwise) may be made by or on behalf of the Company which is an
obligor under such Designated Senior Indebtedness on account of the principal
of, premium, if any, or interest on the Convertible Debentures (including any
repurchases of any of the Convertible Debentures), or on account of the
redemption provisions of the Convertible Debentures, in any such case, other
than payments made with Junior Convertible Debentures or from a Defeasance
Trust. Notwithstanding the foregoing, unless the Designated Senior Indebtedness
in respect of which such event of default exists has been declared due and
payable in its entirety within 179 days after the Payment Notice is delivered as
set forth above (the "PAYMENT BLOCKAGE PERIOD") (and such declaration has not
been rescinded or waived), at the end of the Payment Blockage Period, the
Company shall be required to pay all sums not paid to the Holders of the
Convertible Debentures during the Payment Blockage Period due to the foregoing
prohibitions and to resume all other payments as and when due on the Convertible
Debentures. Any number of Payment Notices may be given; PROVIDED that (i) not
more than one Payment Notice shall be given within a period of any 360
consecutive days, and (ii) no
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default that existed upon the date of such Payment Notice or the commencement of
such Payment Blockage Period (whether or not such event of default is on the
same issue of Senior Indebtedness) shall be made the basis for the commencement
of any other Payment Blockage Period unless such other Payment Blockage Period
is commenced by a Payment Notice from the Representative under the Credit
Agreement and such event of default shall have been cured or waived for a period
of at least 90 consecutive days.
(c) Upon any distribution of assets of the Company upon any
dissolution, winding up, total or partial liquidation or reorganization of the
Company, whether voluntary or involuntary, in bankruptcy, insolvency,
receivership or a similar proceeding or upon assignment for the benefit of
creditors or any marshalling of assets or liabilities, the provisions of Section
1203 of this Indenture shall apply.
The subordination provisions hereof shall continue to be effective or
be reinstated, as the case may be, if at any time any payment of any Senior
Indebtedness is rescinded or must otherwise be returned by any holder of such
Senior Indebtedness upon the insolvency, bankruptcy or reorganization of the
Company or otherwise, all as though such payment has not been made.
SECTION 2403. LIQUIDATION; DISSOLUTION; BANKRUPTCY.
Upon any distribution of assets of the Company or upon any
dissolution, winding up, total or partial liquidation or reorganization of the
Company, whether voluntary or involuntary, in bankruptcy, insolvency,
receivership or a similar proceeding or upon assignment for the benefit of
creditors or any marshalling of assets or liabilities:
(a) the holders of all Senior Indebtedness of the Company, will first
be entitled to receive payment in full in cash or Cash Equivalents (or have such
payment duly provided for to the satisfaction of such holders) or otherwise to
the extent holders accept satisfaction of amounts due by settlement in other
than cash or Cash Equivalents before the Holders are entitled to receive any
payment on account of the principal of, premium, if any, and interest on the
Convertible Debentures or any Obligation in respect of the Convertible
Debentures (other than Junior Convertible Debentures or from a Defeasance
Trust);
(b) any payment or distribution of assets of the Company of any kind
or character from any source, whether in cash, property or securities (other
than Junior Convertible Debentures or from a Defeasance Trust) to which the
Holders or the Trustee on behalf of the Holders would be entitled (by set-off or
otherwise), except for the provisions of this Article Twelve, shall be paid by
the liquidating trustee or Agent or other person making such a payment or
distribution directly to the holders of such Senior Indebtedness or their
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representative to the extent necessary to make payment in full (or have such
payment duly provided for) on all such Senior Indebtedness remaining unpaid,
after giving effect to any concurrent payment or distribution to the holders of
such Senior Indebtedness; and
(c) in the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company (other than Junior Convertible Debentures
or from a Defeasance Trust) shall be received by the Trustee or the Holders at a
time when such payment or distribution is prohibited by the foregoing
provisions, such payment or distribution shall be held in trust for the benefit
of the holders of such Senior Indebtedness, and shall be paid or delivered by
the Trustee or such Holders, as the case may be, to the holders of such Senior
Indebtedness remaining unpaid or unprovided for or to their representative or
representatives, or to the trustee or trustees under any indenture pursuant to
which any instruments evidencing any of such Senior Indebtedness may have been
issued, ratably according to the aggregate principal amounts remaining unpaid on
account of such Senior Indebtedness held or represented by each, for application
to the payment of all such Senior Indebtedness remaining unpaid, to the extent
necessary to pay all such Senior Indebtedness in full in cash or Cash
Equivalents or otherwise to the extent holders accept satisfaction of amounts
due by settlement in other than cash or Cash Equivalents after giving effect to
any concurrent payment or distribution to the holders of such Senior
Indebtedness.
SECTION 2404. SUBROGATION.
Subject to the payment in full in cash or Cash Equivalents of all
Senior Indebtedness of the Company as provided herein, the Holders of
Convertible Debentures shall be subrogated to the rights of the holders of such
Senior Indebtedness to receive payments or distributions of assets of the
Company applicable to the Senior Indebtedness until all amounts owing on the
Convertible Debentures shall be paid in full, and for the purpose of such
subrogation no such payments or distributions to the holders of such Senior
Indebtedness by or on behalf of the Company, or by or on behalf of the Holders
by virtue of this Article Twelve, which otherwise would have been made to the
Holders shall, as between the Company and the Holders, be deemed to be payment
by the Company or on account of such Senior Indebtedness, it being understood
that the provisions of this Article Twelve are and are intended solely for the
purpose of defining the relative rights of the Holders, on the one hand, and the
holders of such Senior Indebtedness, on the other hand.
If any payment or distribution to which the Holders would otherwise
have been entitled but for the provisions of this Article Twelve shall have been
applied, pursuant to the provisions of this Article Twelve, to the payment of
amounts payable under Senior
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Indebtedness of the Company, then the Holders shall be entitled to receive from
the holders of such Senior Indebtedness any payments or distributions received
by such holders of Senior Indebtedness in excess of the amount sufficient to pay
all amounts payable under or in respect of such Senior Indebtedness in full in
cash or Cash Equivalents.
SECTION 2405. TRUSTEE TO EFFECTUATE SUBORDINATION.
Each Holder of Convertible Debentures by such Holder's acceptance
thereof authorizes and directs the Trustee on such Holder's behalf to take such
action as may be necessary or appropriate to effectuate the subordination
provided in this Article Twelve and appoints the Trustee as such Holder's
attorney-in-fact for any and all such purposes.
SECTION 2406. NOTICE BY THE COMPANY.
The Company shall give prompt written notice to a Responsible Officer
of the Trustee of any fact known to the Company which would prohibit the making
of any payment of monies to or by the Trustee in respect of the Convertible
Debentures pursuant to the provisions of this Article Twelve. Notwithstanding
the provisions of this Article Twelve or any other provision of this Indenture,
the Trustee shall not be charged with knowledge of the existence of any facts
which would prohibit the making of any payment of monies to or by the Trustee in
respect of the Convertible Debentures pursuant to the provision of this Article
Twelve, unless and until a Responsible Officer of the Trustee shall have
received written notice thereof at the Corporate Trust Office of the Trustee
from the Company or a holder or holders of Senior Indebtedness or from any
trustee therefor; and before the receipt of any such written notice, the
Trustee, subject to the provisions of Section 603 hereof, shall be entitled in
all respects to assume that no such facts exist; PROVIDED, HOWEVER, that if the
Trustee shall not have received the notice provided for in this Section 1206 at
least two Business Days prior to the date upon which by the terms hereof any
money may become payable for any purpose (including, without limitation, the
payment of the principal of (and premium, if any) or interest (including
Additional Payments, if any) on any Convertible Debenture), then, anything
herein contained to the contrary notwithstanding, the Trustee shall have full
power and authority to receive such money and to apply the same to the purposes
for which they were received, and shall not be affected by any notice to the
contrary which may be received by it within two Business Days prior to such
date.
The Trustee, subject to the provisions of Section 603, shall be
entitled to rely on the delivery to it of a written notice by a Person
representing himself to be a holder of Senior Indebtedness (or a trustee on
behalf of such holder) to establish that such notice has been given by a holder
of such Senior Indebtedness or a trustee on behalf of any such holder or
holders. In the event that the Trustee determines in good faith that further
evidence is
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required with respect to the right of any Person as a holder of Senior
Indebtedness to participate in any payment or distribution pursuant to this
Article Twelve, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of Senior Indebtedness
held by such Person, the extent to which such Person is entitled to participate
in such payment or distribution and any other facts pertinent to the right of
such Person under this Article Twelve, and, if such evidence is not furnished,
the Trustee may defer any payment to such Person pending judicial determination
as to the right of such Person to receive such payment.
SECTION 2407. RIGHTS OF THE TRUSTEE; HOLDERS OF SENIOR INDEBTEDNESS.
The Trustee in its individual capacity shall be entitled to all the
rights set forth in this Article Twelve in respect of any Senior Indebtedness at
any time held by it, to the same extent as any other holder of Senior
Indebtedness, and nothing in this Indenture shall deprive the Trustee of any of
its rights as such holder.
With respect to the holders of Senior Indebtedness of the Company, the
Trustee undertakes to perform or to observe only such of its covenants and
obligations as are set forth in this Article Twelve, and no implied covenants or
obligations with respect to the holders of such Senior Indebtedness shall be
read into this Indenture against the Trustee. The Trustee shall not be deemed
to owe any fiduciary duty to the holders of such Senior Indebtedness and,
subject to the provisions of Section 603, the Trustee shall not be liable to any
holder of such Senior Indebtedness if it shall pay over or deliver to Holders of
Convertible Debentures, the Company or any other Person money or assets to which
any holder of such Senior Indebtedness shall be entitled by virtue of this
Article Twelve or otherwise. With respect to the holders of Senior
Indebtedness, the Trustee undertakes to perform or to observe only such of its
covenants or obligations as are specifically set forth in this Article Twelve
and no implied covenants or obligations with respect to holders of Senior
Indebtedness shall be read into this Indenture against the Trustee.
SECTION 2408. SUBORDINATION MAY NOT BE IMPAIRED.
No right of any present or future holder of any Senior Indebtedness to
enforce subordination as herein provided shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of the Company
or by any act or failure to act, in good faith, by any such holder, or by any
noncompliance by the Company with the terms, provisions and covenants of this
Indenture, regardless of any knowledge thereof which any such holder may have or
otherwise be charged with.
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Without in any way limiting the generality of the foregoing paragraph,
the holders of Senior Indebtedness may, at any time and from time to time,
without the consent of or notice to the Trustee or the Holders of the
Convertible Debentures, without incurring responsibility to the holders of the
Convertible Debentures and without impairing or releasing the subordination
provided in this Article Twelve or the obligations hereunder of the Holders of
the Convertible Debentures to the holders of Senior Indebtedness, do any one or
more of the following: (i) change the manner, place or terms of payment or
extend the time of payment of, or renew or alter, such Senior Indebtedness, or
otherwise amend or supplement in any manner such Senior Indebtedness or any
instrument evidencing the same or any agreement under which such Senior
Indebtedness is outstanding; (ii) sell, exchange, release or otherwise deal with
any property pledged, mortgaged or otherwise securing such Senior Indebtedness;
(iii) release any Person liable in any manner for the collection of such Senior
Indebtedness; and (iv) exercise or refrain from exercising any rights against
the Company and any other Person.
ARTICLE XXVI
Conversion of Convertible Debentures
SECTION 2601. CONVERSION RIGHTS.
Subject to and upon compliance with the provisions of this Article,
the Convertible Debentures are convertible, at the option of the Holder, at any
time after June 28, 1998 and on or prior to 5:00 p.m. (New York City time) on
the Business Day immediately preceding the date of repayment of such Convertible
Debentures, whether at maturity or upon redemption (either at the option of the
Company or pursuant to a Tax Event), into fully paid and nonassessable shares of
Sun Common Stock of the Company at an initial conversion rate of 1.2419 shares
of Sun Common Stock for each $25 in aggregate principal amount of Convertible
Debentures (equal to a conversion price of $20.13 per share of Sun Common
Stock), subject to adjustment as described in this Article Thirteen. A Holder
of Convertible Debentures may convert any portion of the principal amount of the
Convertible Debentures into that number of fully paid and nonassessable shares
of Sun Common Stock (calculated as to each conversion to the nearest 1/100th of
a share) obtained by dividing the principal amount of the Convertible Debentures
to be converted by such conversion price. In case a Convertible Debenture or
portion thereof is called for redemption, such conversion right in respect of
the Convertible Debenture or portion so called shall expire at 5:00 p.m. (New
York City time) on the Business Day immediately preceding the corresponding
Redemption Date, unless the Company defaults in making the payment due upon
redemption.
SECTION 2602. CONVERSION PROCEDURES.
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(a) In order to convert all or a portion of the Convertible
Debentures, the Holder thereof shall deliver to the Conversion Agent an
irrevocable Notice of Conversion setting forth the principal amount of
Convertible Debentures to be converted, together with the name or names, if
other than the Holder, in which the shares of Sun Common Stock should be issued
upon conversion and, if such Convertible Debentures are definitive Convertible
Debentures, surrender to the Conversion Agent the Convertible Debentures to be
converted, duly endorsed or assigned to the Company or in blank. In addition, a
holder of Convertible Preferred Securities may exercise its right under the
Declaration to convert such Convertible Preferred Securities into Sun Common
Stock by delivering to the Conversion Agent an irrevocable Notice of Conversion
setting forth the information called for by the preceding sentence and directing
the Conversion Agent (i) to exchange such Convertible Preferred Security for a
portion of the Convertible Debentures held by the Trust (at an exchange rate of
$25 liquidation amount of Convertible Debentures for each Convertible Preferred
Security) and (ii) to immediately convert such Convertible Debentures, on behalf
of such holder, into Sun Common Stock of the Company pursuant to this Article
Thirteen and, if such Convertible Preferred Securities are in definitive form,
surrendering such Convertible Preferred Securities, duly endorsed or assigned to
the Company or in blank. So long as any Convertible Preferred Securities are
outstanding, the Trust shall not convert any Convertible Debentures except
pursuant to a Notice of Conversion delivered to the Conversion Agent by a holder
of Convertible Preferred Securities.
If a Notice of Conversion is delivered on or after the Regular Record
Date and prior to the subsequent Interest Payment Date, the Holder will be
entitled to receive the interest payable on the subsequent Interest Payment Date
on the portion of Convertible Debentures to be converted notwithstanding the
conversion thereof prior to such Interest Payment Date. Except as otherwise
provided in the immediately preceding sentence, in the case of any Convertible
Debenture which is converted, interest whose Stated Maturity is after the date
of conversion of such Convertible Debenture shall not be payable, and the
Company shall not make nor be required to make any other payment, adjustment or
allowance with respect to accrued but unpaid interest (including Additional
Payments, if any) on the Convertible Debentures being converted, which shall be
deemed to be paid in full. If any Convertible Debenture called for redemption
is converted, any money deposited with the Trustee or with any Paying Agent or
so segregated and held in trust for the redemption of such Convertible Debenture
shall (subject to any right of the Holder of such Convertible Debenture or any
Predecessor Security to receive interest as provided in the last paragraph of
Section 307 and this paragraph) be paid to the Company upon Company Request or,
if then held by the Company, shall be discharged from such trust.
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Each conversion shall be deemed to have been effected immediately
prior to 5:00 p.m. (New York City time) on the day on which the Notice of
Conversion was received (the "Conversion Date") by the Conversion Agent from the
Holder or from a holder of the Convertible Preferred Securities effecting a
conversion thereof pursuant to its conversion rights under the Declaration, as
the case may be. The Person or Persons entitled to receive the Sun Common Stock
issuable upon such conversion shall be treated for all purposes as the record
holder or holders of such Sun Common Stock as of the Conversion Date. As
promptly as practicable on or after the Conversion Date, the Company shall issue
and deliver at the office of the Conversion Agent, unless otherwise directed by
the Holder in the Notice of Conversion, a certificate or certificates for the
number of full shares of Sun Common Stock issuable upon such conversion,
together with the cash payment, if any, in lieu of any fraction of any share to
the Person or Persons entitled to receive the same. The Conversion Agent shall
deliver such certificate or certificates to such Person or Persons.
(b) Subject to any right of the Holder of such Convertible Debenture
or any Predecessor Security to receive interest as provided in the last
paragraph of Section 307 and the second paragraph of Clause (a) of Section 1302,
the Company's delivery upon conversion of the fixed number of shares of Sun
Common Stock into which the Convertible Debentures are convertible (together
with the cash payment, if any, in lieu of fractional shares) shall be deemed to
satisfy the Company's obligation to pay the principal amount at Maturity of the
portion of Convertible Debentures so converted and any unpaid interest
(including Additional Payments, if any) accrued on such Convertible Debentures
at the time of such conversion.
(c) No fractional shares of Sun Common Stock will be issued as a
result of conversion, but in lieu thereof, the Company shall pay to the
Conversion Agent a cash adjustment in an amount equal to the same fraction of
the last reported sale price of such fractional interest on the date on which
the Convertible Debentures or Convertible Preferred Securities, as the case may
be, were duly surrendered to the Conversion Agent for conversion, or, if such
day is not a Trading Day, on the next Trading Day, and the Conversion Agent in
turn will make such payment, if any, to the Holder of the Convertible Debentures
or the holder of the Convertible Preferred Securities so converted.
(d) In the event of the conversion of any Convertible Debenture in
part only, a new Convertible Debenture or Convertible Debentures for the
unconverted portion thereof will be issued in the name of the Holder thereof
upon the cancellation thereof in accordance with Section 305.
(e) In effecting the conversion transactions described in this
Section, the Conversion Agent is acting as Agent of the holders of Convertible
Preferred Securities (in the exchange of Convertible Preferred Securities for
Convertible Debentures) and as Agent of the
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Holders of Convertible Debentures (in the conversion of Convertible Debentures
into Sun Common Stock), as the case may be, directing it to effect such
conversion transactions. The Conversion Agent is hereby authorized (i) to
exchange Convertible Debentures held by the Trust from time to time for
Convertible Preferred Securities in connection with the conversion of such
Convertible Preferred Securities in accordance with this Article Thirteen and
(ii) to convert all or a portion of the Convertible Debentures into Sun Common
Stock and thereupon to deliver such shares of Sun Common Stock in accordance
with the provisions of this Article Thirteen and to deliver to the Trust a new
Convertible Debenture or Convertible Debentures for any resulting unconverted
principal amount.
(f) Except as provided in Section 202, all shares of Sun Common Stock
delivered upon any conversion of Restricted Securities shall bear a Restrictive
Securities Legend substantially in the form of the legend required to be set
forth on such Convertible Debentures and shall be subject to the restrictions on
transfer provided in such legend and in Section 314 hereof. Neither the Trustee
nor the Conversion Agent shall have any responsibility for the inclusion or
content of any such Restrictive Securities Legend on such Sun Common Stock;
PROVIDED, HOWEVER, that the Trustee or the Conversion Agent shall have provided
to the Company or to the Company's transfer Agent for such Sun Common Stock,
prior to or concurrently with a request to the Company to deliver to such
Conversion Agent certificates for such Sun Common Stock, written notice that the
Convertible Debentures delivered for conversion are Restricted Securities.
SECTION 2603. CONVERSION PRICE ADJUSTMENTS.
The conversion price shall be subject to adjustment (without
duplication) from time to time as follows:
(a) In case the Company shall, while any of the Convertible
Debentures are outstanding, (i) pay a dividend or make a distribution with
respect to its Sun Common Stock in shares of Sun Common Stock, (ii) subdivide
its outstanding shares of Sun Common Stock, (iii) combine its outstanding shares
of Sun Common Stock into a smaller number of shares or (iv) issue by
reclassification of its shares of Sun Common Stock any shares of capital stock
of the Company, the conversion price in effect immediately prior to such action
shall be adjusted so that the Holder of any Convertible Debentures thereafter
surrendered for conversion shall be entitled to receive the number of shares of
capital stock of the Company which he would have owned immediately following
such action had such Convertible Debentures been converted immediately prior
thereto. An adjustment made pursuant to this Section 1303(a) shall become
effective immediately after the record date in the case of a dividend or other
distribution and shall become effective immediately after the effective date in
case of a subdivision, combination or reclassification (or immediately after the
record date
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if a record date shall have been established for such event). If, as a result
of an adjustment made pursuant to this Section 1303(a), the Holder of any
Convertible Debenture thereafter surrendered for conversion shall become
entitled to receive shares of two or more classes or series of capital stock of
the Company, the Board of Directors (whose determination shall be conclusive and
shall be described in a Board Resolution filed with the Trustee) shall determine
the allocation of the adjusted conversion price between or among shares of such
classes or series of capital stock.
(b) In case the Company shall, while any of the Convertible
Debentures are outstanding, issue rights or warrants to all holders of its Sun
Common Stock entitling them (for a period expiring within 45 days after the
record date mentioned in this Section 1303(b)) to subscribe for or purchase
shares of Sun Common Stock at a price per share less than the current market
price per share of Sun Common Stock (as determined pursuant to 1303(f) below) on
such record date, the conversion price for the Convertible Debentures shall be
adjusted so that the same shall equal the price determined by multiplying the
conversion price in effect immediately prior to the date of issuance of such
rights or warrants by a fraction of which the numerator shall be the number of
shares of Sun Common Stock outstanding on the date of issuance of such rights or
warrants plus the number of shares which the aggregate offering price of the
total number of shares so offered for subscription or purchase would purchase at
such current market price, and of which the denominator shall be the number of
shares of Sun Common Stock outstanding on the date of issuance of such rights or
warrants plus the number of additional shares of Sun Common Stock offered for
subscription or purchase. Such adjustment shall become effective immediately
after the record date for the determination of stockholders entitled to receive
such rights or warrants. For the purposes of this subsection, the number of
shares of Sun Common Stock at any time outstanding shall not include shares held
in the treasury of the Company. The Company shall not issue any rights or
warrants in respect of shares of Sun Common Stock held in the treasury of the
Company. In case any rights or warrants referred to in this subsection in
respect of which an adjustment shall have been made shall expire unexercised
within 45 days after the same shall have been distributed or issued by the
Company, the conversion price shall be readjusted at the time of such expiration
to the conversion price that would have been in effect if no adjustment had been
made on account of the distribution or issuance of such expired rights or
warrants. In determining whether any rights, options or warrants entitle the
holder to subscribe for or purchase Sun Common Stock at less than the Current
Market Price, and in determining the aggregate offering price of such shares of
Sun Common Stock, there shall be taken into account any consideration received
for such rights, options or warrants, the value of such consideration, if other
than cash, to be determined by the Board of Directors. Notwithstanding this
Article XIII, no adjustment will be made pursuant to this Article if the Company
makes proper provision for each Holder of Convertible Preferred Securities who
converts a Convertible Preferred Security to receive, in addition to the Sun
Common Stock
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issuable upon such conversion, the kind and amount of assets (including
securities) if such Holder had been a holder of the Common Stock at the time of
the distribution of such assets or securities. Rights, options or warrants
distributed by the Company to all holders of the Sun Common Stock that entitle
the holders thereof to purchase shares of the Company's capital stock and that,
until the occurrence of an event (a "Triggering Event"), (i) are deemed to be
transferred with the Sun Common Stock, (ii) are not exercisable and (iii) are
also issued in respect of future issuances of Sun Common Stock, shall not be
deemed to be distributed until the occurrence of the Triggering Event.
(c) Subject to the last sentence of this Section 1303(c), in case
the Company shall, by dividend or otherwise, distribute to all holders of its
Sun Common Stock evidences of its indebtedness, shares of any class or series
of capital stock, cash or assets (including securities, but excluding any
rights or warrants referred to in Section 1303(b) and dividends and
distributions in connection with the liquidation, dissolution or winding up
of the Company and dividends and distributions paid exclusively in cash and
any dividend or distribution referred to in Section 1303(a)), the conversion
price shall be reduced so that the same shall equal the price determined by
multiplying the conversion price in effect immediately prior to the
effectiveness of the conversion price reduction contemplated by this Section
1303(c) by a fraction of which the numerator shall be the current market
price per share (determined as provided in Section 1303(f)) of Sun Common
Stock on the date fixed for the payment of such distribution (the "Reference
Date") less the fair market value (as determined in good faith by the Board
of Directors, whose determination shall be conclusive and described in a
resolution of the Board of Directors), on the Reference Date, of the portion
of the evidences of indebtedness, shares of capital stock, cash and assets so
distributed applicable to one share of Sun Common Stock and the denominator
shall be such current market price per share of the Sun Common Stock, such
reduction to become effective immediately prior to the opening of business on
the day following the Reference Date. In the event that such dividend or
distribution is not so paid or made, the conversion price shall again be
adjusted to be the conversion price which would then be in effect if such
dividend or distribution had not occurred. If the Board of Directors
determines the fair market value of any distribution for purposes of this
Section 1303(c) by reference to the actual or when issued trading market for
any securities comprising such distribution, it must in doing so consider the
prices in such market over the same period used in computing the current
market price per share of Sun Common Stock (determined as provided in Section
1303(f)). For purposes of this Section 1303(c), any dividend or distribution
that includes shares of Sun Common Stock or rights or warrants to subscribe
for or purchase shares of Sun Common Stock shall be deemed instead to be (1)
a dividend or distribution of the evidences of indebtedness, shares of
capital stock, cash or assets other than such shares of Sun Common Stock or
such rightsor warrants (making any conversion price reduction required by
this Section 1303(c)) immediately followed by (2) a dividend or distribution
of such shares of Sun Common Stock or such rights
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or warrants (making any further conversion price reduction required by
Section 1303(a) or 1303(b)), except (A) the Reference Date of such dividend
or distribution as defined in this 1303(c) shall be substituted as (a) "the
record date in the case of a dividend or other distribution," and (b) "the
record date for the determination of stockholders entitled to receive such
rights or warrants" and (c) "the date fixed for such determination" within
the meaning of Sections 1303(a) and 1303(b) and (B) any shares of Sun Common
Stock included in such dividend or distribution shall not be deemed
outstanding for purposes of computing any adjustment of the conversion price
in Section 1303(a).
(d) In case the Company shall pay or make a dividend or other
distribution on its Sun Common Stock exclusively in cash (excluding any cash
portion of distributions referred to in Section 1303(c) or in connection with a
consolidation, merger or sale of assets of the Company as referred to in Section
1304(c)), excluding cash dividends if such dividends (and other distributions)
together with all other such all-cash dividends and distributions made within
the preceding 12 months in respect of which no adjustment has been made do not
exceed 20% of the Company's current capitalization (being the product of the
then current market price per share determined as provided in Section 1303(f) of
Sun Common Stock times the number of shares of Sun Common Stock then
outstanding) on the Trading Day immediately preceding the date of declaration of
such dividend, the conversion price shall be reduced so that the same shall
equal the price determined by multiplying the conversion price in effect
immediately prior to the effectiveness of the conversion price reduction
contemplated by this Section 1303(d) by a fraction of which the numerator shall
be the current market price per share (determined as provided in Section
1303(f)) of the Sun Common Stock on the date fixed for the payment of such
distribution less the amount of cash so distributed and not excluded as provided
applicable to one share of Sun Common Stock and the denominator shall be such
current market price per share of the Sun Common Stock, such reduction to become
effective immediately prior to the opening of business on the day following the
date fixed for the payment of such distribution; PROVIDED, HOWEVER, that in the
event the portion of the cash so distributed applicable to one share of Sun
Common Stock is equal to or greater than the current market price per share (as
defined in Section 1303(f)) of the Sun Common Stock on the record date mentioned
above, in lieu of the foregoing adjustment, adequate provision shall be made so
that each Holder of Convertible Debentures shall have the right to receive upon
conversion the amount of cash such Holder would have received had such Holder
converted each Convertible Debenture immediately prior to the record date for
the distribution of the cash. In the event that such dividend or distribution
is not so paid or made, the conversion price shall again be adjusted to be the
conversion price which would then be in effect if such record date had not been
fixed.
(e) In case a tender or exchange offer (other than an odd-lot offer)
made by the Company or any Subsidiary of the Company for all or any portion of
the Sun Common
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Stock shall expire and such tender or exchange offer shall involve the payment
by the Company or such Subsidiary of consideration per share of Sun Common Stock
having a fair market value (as determined in good faith by the Board of
Directors, whose determination shall be conclusive and described in a resolution
of the Board of Directors) at the last time (the "Expiration Time") tenders or
exchanges may be made pursuant to such tender or exchange offer (as it shall
have been amended) that exceeds 110% of the current market price per share
(determined as provided in Section 1303(f)) of the Sun Common Stock on the
Trading Day next succeeding the Expiration Time, the conversion price shall be
reduced so that the same shall equal the price determined by multiplying the
conversion price in effect immediately prior to the effectiveness of the
conversion price reduction contemplated by this Section 1303(e) by a fraction of
which the numerator shall be the number of shares of Sun Common Stock
outstanding (including any tendered or exchanged shares) at the Expiration Time
multiplied by the current market price per share (determined as provided in
Section 1303(f)) of the Sun Common Stock on the Trading Day next succeeding the
Expiration Time and the denominator shall be the sum of (x) the fair market
value (determined as aforesaid) of the aggregate consideration payable to
stockholders based on the acceptance (up to any maximum specified in the terms
of the tender or exchange offer) of all shares validly tendered or exchanged and
not withdrawn as of the Expiration Time (the shares deemed so accepted, up to
any such maximum, being referred to as the "Purchased Shares") and (y) the
product of the number of shares of Sun Common Stock outstanding (less any
Purchased Shares) at the Expiration Time and the current market price per share
(determined as provided in Section 1303(f)) of the Sun Common Stock on the
Trading Day next succeeding the Expiration Time, such reduction to become
effective immediately prior to the opening of business on the day following the
Expiration Time.
(f) For the purpose of any computation under Section 1303(b),
1303(c), 1303(d) or 1303(e), the current market price per share of Sun Common
Stock on any date in question shall be deemed to be the average of the daily
Closing Prices for the five consecutive Trading Days selected by the Company
commencing not more than 20 Trading Days before, and ending not later than, the
earlier of the day in question or, if applicable, the day before the "ex" date
with respect to the issuance or distribution requiring such computation;
PROVIDED, HOWEVER, that if another event occurs that would require an adjustment
pursuant to Section 1303(a) through (e), inclusive, the Board of Directors may
make such adjustments to the Closing Prices during such five Trading Day period
as it deems appropriate to effectuate the intent of the adjustments in this
Section 1303, in which case any such determination by the Board of Directors
shall be set forth in a Board Resolution and shall be conclusive. For purposes
of this paragraph, the term "ex" date, (i) when used with respect to any
issuance or distribution, means the first date on which the Sun Common Stock
trades regular way on the New York Stock Exchange or on such successor
securities exchange as the Sun Common Stock may be listed or in the relevant
market from which the Closing Prices
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were obtained without the right to receive such issuance or distribution, and
(ii) when used with respect to any tender or exchange offer, means the first
date on which the Sun Common Stock trades regular way on such securities
exchange or in such market after the Expiration Time of such offer.
(g) The Company may make such reductions in the conversion price, in
addition to those required by Sections 1303 (a) through (e), as it considers to
be advisable to avoid or diminish any income tax to holders of Sun Common Stock
or rights to purchase Sun Common Stock resulting from any dividend or
distribution of stock (or rights to acquire stock) or from any event treated as
such for income tax purposes. The Company from time to time may reduce the
conversion price by any amount for any period of time if the period is at least
20 days, the reduction is irrevocable during the period, and the Board of
Directors of the Company shall have made a determination that such reduction
would be in the best interest of the Company, which determination shall be
conclusive. Whenever the conversion price is reduced pursuant to the preceding
sentence, the Company shall mail to holders of record of the Convertible
Debentures a notice of the reduction at least 15 days prior to the date the
reduced conversion price takes effect, and such notice shall state the reduced
conversion price and the period it will be in effect.
(h) No adjustment in the conversion price shall be required unless
such adjustment would require an increase or decrease of at least 1% in the
conversion price; PROVIDED, HOWEVER, that any adjustments which by reason of
this Section 1303(h) are not required to be made shall be carried forward and
taken into account in determining whether any subsequent adjustment shall be
required.
(i) If any action would require adjustment of the conversion price
pursuant to more than one of the provisions described above, only one adjustment
shall be made and such adjustment shall be the amount of adjustment that has the
highest absolute value to the Holder of the Convertible Debentures.
(j) Except as stated above, the conversion price will not be adjusted
for the issuance of Sun Common Stock or any securities convertible into or
exchangeable into Sun Common Stock or carrying the right to purchase any of the
foregoing.
SECTION 2604. FUNDAMENTAL CHANGE.
(a) In the event that the Company is party to any transaction
(including, without limitation, a merger other than a merger that does not
result in a reclassification, conversion, exchange or cancellation of Sun Common
Stock), consolidation, sale of all or substantially all of the assets of the
Company, recapitalization or reclassification of Sun
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Common Stock (other than a change in par value, or from par value to no par
value, or from no par value to par value or as a result of a subdivision or
combination of Sun Common Stock) or any compulsory share exchange (each of the
foregoing being referred to as a "Transaction"), in each case, as a result of
which shares of Sun Common Stock shall be converted into the right to receive,
or shall be exchanged for, (i) in the case of any Transaction other than a
Transaction involving a Common Stock Fundamental Change (and subject to funds
being legally available for such purpose under applicable law at the time of
such conversion), securities, cash or other property, each Convertible Preferred
Security shall thereafter be convertible into the kind and, in the case of a
Transaction which does not involve a Fundamental Change, amount of securities,
cash and other property receivable upon the consummation of such Transaction by
a holder of that number of shares of Sun Common Stock into which a Convertible
Preferred Security was convertible immediately prior to such Transaction, or
(ii) in the case of a Transaction involving a Common Stock Fundamental Change,
common stock, each Convertible Preferred Security shall thereafter be
convertible (in the manner described therein) into common stock of the kind
received by holders of Sun Common Stock (but in each case after giving effect to
any adjustment discussed below relating to a Fundamental Change if such
Transaction constitutes a Fundamental Change). The holders of Convertible
Preferred Securities will have no voting rights with respect to any Transaction.
(b) If any Fundamental Change occurs, then the conversion price in
effect will be adjusted immediately after such Fundamental Change as described
below. In addition, in the event of a Common Stock Fundamental Change, each
Convertible Preferred Security shall be convertible solely into common stock of
the kind received by holders of Sun Common Stock as a result of such Common
Stock Fundamental Change.
(c) The conversion price in the case of any Transaction involving a
Fundamental Change will be adjusted immediately after such Fundamental Change:
(i) in the case of a Non-Stock Fundamental Change, the
conversion price of the Convertible Preferred Securities will
thereupon become the lower of (A) the conversion price in effect
immediately prior to such Non-Stock Fundamental Change, but after
giving effect to any other prior adjustments effected pursuant to the
preceding paragraphs, and (B) the greater of the Applicable Price or
the then applicable Reference Market Price plus any then-accrued and
unpaid distributions on one Convertible Preferred Security; and
(ii) in the case of a Common Stock Fundamental Change, the
conversion price of the Convertible Preferred Securities in effect
immediately prior to such Common Stock Fundamental Change, but after
giving effect to
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any other prior adjustments effected pursuant to the preceding
paragraphs, will thereupon be adjusted by multiplying such conversion
price by a fraction of which the numerator will be the Purchaser Stock
Price and the denominator will be the Applicable Price; provided,
however, that in the event of a Common Stock Fundamental Change in
which (A) 100% of the value of the consideration received by a holder
of Sun Common Stock is common stock of the successor, acquirer, or
other third party (and cash, if any, is paid only with respect to any
fractional interests in such common stock resulting from such Common
Stock Fundamental Change) and (B) all Sun Common Stock will be have
been exchanged for, converted into, or acquired for common stock (and
cash with respect to fractional interests) of the successor, acquirer,
or other third party, the conversion price of the Convertible
Preferred Securities in effect immediately prior to such Common Stock
Fundamental Change will thereupon be adjusted by multiplying such
conversion price by a fraction of which the numerator will be one and
the denominator will be the number of shares of common stock of the
successor, acquirer, or other third party received by a holder of one
share of Sun Common Stock as a result of such Common Stock Fundamental
Change.
The Company or the Person formed by such consolidation or resulting
from such merger or which acquired such assets or which acquires the Company's
shares, as the case may be, shall make provision in its certificate or articles
of incorporation or other constituent document to establish such right. Such
certificate or articles of incorporation or other constituent document shall
provide for adjustments which, for events subsequent to the effective date of
such certificate or articles of incorporation or other constituent document,
shall be as nearly equivalent as may be practicable to the adjustments provided
for in this Article Thirteen. The above provisions shall similarly apply to
successive transactions of the foregoing type.
SECTION 2605. NOTICE OF ADJUSTMENTS OF CONVERSION PRICE.
Whenever the conversion price is adjusted as herein provided:
(a) the Company shall compute the adjusted Conversion Price and shall
prepare a certificate signed by the Chief Financial Officer or the Treasurer of
the Company setting forth the adjusted Conversion Price and showing in
reasonable detail the facts upon which such adjustment is based, and such
certificate shall forthwith be filed with the Trustee, the Conversion Agent and
the transfer Agent for the Convertible Preferred Securities and the Convertible
Debentures; and
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(b) a notice stating the Conversion Price has been adjusted and
setting forth the adjusted Conversion Price shall as soon as practicable be
mailed by the Company to all record holders of Convertible Preferred Securities
and the Convertible Debentures at their last addresses as they appear upon the
stock transfer books of the Company and the Trust.
SECTION 2606. PRIOR NOTICE OF CERTAIN EVENTS.
In case:
(a) the Company shall (i) declare any dividend (or any other
distribution) on its Sun Common Stock, other than (A) a dividend payable in
shares of Sun Common Stock or (B) a dividend payable in cash that would not
require an adjustment pursuant to Section 1303(c) or 1303(d), or (ii) authorize
a tender or exchange offer that would require an adjustment pursuant to Section
1303(e);
(b) the Company shall authorize the granting to all holders of Sun
Common Stock of rights or warrants to subscribe for or purchase any shares of
stock of any class or series or of any other rights or warrants;
(c) of any reclassification of Sun Common Stock (other than a
subdivision or combination of the outstanding Sun Common Stock, or a change in
par value, or from par value to no par value, or from no par value to par
value), or of any consolidation or merger to which the Company is a party and
for which approval of any stockholders of the Company shall be required, or of
the sale or transfer of all or substantially all of the assets of the Company or
of any compulsory share exchange whereby the Sun Common Stock is converted into
other securities, cash or other property; or
(d) of the voluntary or involuntary dissolution, liquidation or
winding up of the Company;
then the Company shall (1) if any Convertible Preferred Securities are
outstanding, cause to be filed with the transfer Agent for the Convertible
Preferred Securities, and shall cause to be mailed to the holders of record of
the Convertible Preferred Securities, at their last addresses as they shall
appear upon the stock transfer books the Trust or (2) shall cause to be mailed
to all Holders at their last addresses as they shall appear in the Security
Register, at least 15 days prior to the applicable record or effective date
hereinafter specified, a notice stating (x) the date on which a record (if any)
is to be taken for the purpose of such dividend, distribution, rights or
warrants or, if a record is not to be taken, the date as of which the holders of
Sun Common Stock of record to be entitled to such dividend, distribution, rights
or warrants are to be determined or (y) the date on which such reclassification,
consolidation,
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merger, sale, transfer, share exchange, dissolution, liquidation or winding up
is expected to become effective, and the date as of which it is expected that
holders of Sun Common Stock of record shall be entitled to exchange their shares
of Sun Common Stock for securities, cash or other property deliverable upon such
reclassification, consolidation, merger, sale, transfer, share exchange,
dissolution, liquidation or winding up (but no failure to mail such notice or
any defect therein or in the mailing thereof shall affect the validity of the
corporate action required to be specified in such notice).
SECTION 2607. CERTAIN DEFINED TERMS.
The following definitions shall apply to terms used in this Article
Thirteen:
(a) "CLOSING PRICE" of any Sun Common Stock on any day shall mean the
reported last sale price on such day or in case no sale takes place on such day,
the average of the reported closing bid and asked prices in each case on the New
York Stock Exchange Consolidated Transactions Tape or, if the stock is not
listed or admitted to trading on the New York Stock Exchange, on the principal
national securities exchange on which such stock is listed or admitted to
trading or, if not listed or admitted to trading on any national securities
exchange, the average of the closing bid and asked prices as furnished by any
New York Stock Exchange member firm, selected by the Debenture Trustee for that
purpose.
(b) "TRADING DAY" shall mean a day on which securities are traded on
the national securities exchange or quotation system used to determine the
Closing Price.
SECTION 2608. DIVIDEND OR INTEREST REINVESTMENT PLANS.
Notwithstanding the foregoing provisions, the issuance of any shares
of Sun Common Stock pursuant to any plan providing for the reinvestment of
dividends or interest payable on securities of the Company and the investment of
additional optional amounts in shares of Sun Common Stock under any such plan,
and the issuance of any shares of Sun Common Stock or options or rights to
purchase such shares pursuant to any employee benefit plan or program of the
Company or pursuant to any option, warrant, right or exercisable, exchangeable
or convertible security outstanding as of the date the Convertible Debentures
were first issued, shall not be deemed to constitute an issuance of Sun Common
Stock or exercisable, exchangeable or convertible securities by the Company to
which any of the adjustment provisions described above applies. There shall
also be no adjustment of the conversion price in case of the issuance of any
stock (or securities convertible into or exchangeable for stock) of the Company
except as specifically described in this Article Thirteen.
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SECTION 2609. CERTAIN ADDITIONAL RIGHTS.
In case the Company shall, by dividend or otherwise, declare or make a
distribution on its Sun Common Stock referred to in Section 1303(c) or 1303(d)
(including, without limitation, dividends or distributions referred to in the
last sentence of Section 1303(c)), the Holder of the Convertible Debentures,
upon the conversion thereof subsequent to 5:00 p.m. (New York City time) on the
date fixed for the determination of stockholders entitled to receive such
distribution and prior to the effectiveness of the conversion price adjustment
in respect of such distribution, shall also be entitled to receive for each
share of Sun Common Stock into which the Convertible Debentures are converted,
the portion of the shares of Sun Common Stock, rights, warrants, evidences of
indebtedness, shares of capital stock, cash and assets so distributed applicable
to one share of Sun Common Stock; PROVIDED, HOWEVER, that, at the election of
the Company (whose election shall be evidenced by a resolution of the Board of
Directors) with respect to all Holders so converting, the Company may, in lieu
of distributing to such Holder any portion of such distribution not consisting
of cash or securities of the Company, pay such Holder an amount in cash equal to
the fair market value thereof (as determined in good faith by the Board of
Directors, whose determination shall be conclusive and described in a resolution
of the Board of Directors). If any conversion of Convertible Debentures
described in the immediately preceding sentence occurs prior to the payment date
for a distribution to holders of Sun Common Stock which the Holder of
Convertible Debentures so converted is entitled to receive in accordance with
the immediately preceding sentence, the Company may elect (such election to be
evidenced by a resolution of the Board of Directors) to distribute to such
Holder a due xxxx for the shares of Sun Common Stock, rights, warrants,
evidences of indebtedness, shares of capital stock, cash or assets to which such
Holder is so entitled, PROVIDED, that such due xxxx (i) meets any applicable
requirements of the principal national securities exchange or other market on
which the Sun Common Stock is then traded and (ii) requires payment or delivery
of such shares of Sun Common Stock, rights, warrants, evidences of indebtedness,
shares of capital stock, cash or assets no later than the date of payment or
delivery thereof to holders of shares of Sun Common Stock receiving such
distribution.
SECTION 2610. RESTRICTIONS ON SUN COMMON STOCK ISSUABLE UPON CONVERSION.
(a) Shares of Sun Common Stock to be issued upon conversion of a
Convertible Debenture in respect of Restricted Convertible Preferred Securities
shall bear the following legend (the "Restricted Common Stock Legend") unless
the Company determines otherwise in accordance with applicable law.
THE COMMON STOCK EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
- 84 -
OR ANY STATE SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED,
ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR
UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. THE HOLDER OF THIS SECURITY BY ITS
ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY,
PRIOR TO THE DATE WHICH IS AFTER THE EXPIRATION OF THE HOLDING PERIOD APPLICABLE
TO SALES THEREOF UNDER RULE 144(k) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR
RULE) (THE "RESALE RESTRICTION TERMINATION DATE") ONLY (A) TO SUN HEALTHCARE
GROUP, INC. (THE "COMPANY") (B) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT, (C) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN
THE MEANING OF SUBPARAGRAPH (a)(1), (2), (3) OR (7) OF RULE 501 UNDER THE
SECURITIES ACT THAT IS ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT, OR FOR THE
ACCOUNT OF SUCH AN INSTITUTIONAL "ACCREDITED INVESTOR," FOR INVESTMENT PURPOSES
AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (D) PURSUANT TO ANOTHER
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT,
SUBJECT TO THE COMPANY'S AND THE TRANSFER AGENT'S RIGHT PRIOR TO ANY SUCH OFFER,
SALE OR TRANSFER (i) PURSUANT TO CLAUSES (C) OR (D) TO REQUIRE THE DELIVERY OF
AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO
EACH OF THEM, AND (ii) IN EACH OF THE FOREGOING CASES TO REQUIRE THAT A
CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THIS SECURITY IS COMPLETED AND
DELIVERED BY THE TRANSFEROR TO THE TRANSFER AGENT. THIS LEGEND WILL BE REMOVED
UPON THE REQUEST OF A HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.
(b) If shares of Sun Common Stock to be issued upon conversion of a
Convertible Debenture in respect of Restricted Convertible Preferred Securities
are to be registered in a name other than that of the Holder of such Convertible
Preferred Security, then the Person in whose name such shares of Sun Common
Stock are to be registered must deliver to the Conversion Agent a certificate
satisfactory to the Company and signed by such Person, as to compliance with the
restrictions on transfer applicable to such Convertible Preferred Security.
Neither the Trustee nor any Conversion Agent or Registrar shall be required to
register in a name other than that of the Holder shares of Sun Common Stock
issued upon conversion of any such Convertible Debenture in respect of such
Convertible Preferred Securities not so accompanied by a properly completed
certificate.
- 85 -
SECTION 2611. TRUSTEE NOT RESPONSIBLE FOR DETERMINING CONVERSION PRICE OR
ADJUSTMENTS.
Neither the Trustee nor any Conversion Agent shall at any time be
under any duty or responsibility to any Holder of any Convertible Debenture to
determine whether any facts exist which may require any adjustment of the
conversion price, or with respect to the nature or extent of any such adjustment
when made, or with respect to the method employed, or herein or in any
supplemental indenture provided to be employed, in making the same. Neither the
Trustee nor any Conversion Agent shall be accountable with respect to the
validity or value (or the kind of account) of any shares of Sun Common Stock or
of any securities or property, which may at any time be issued or delivered upon
the conversion of any Convertible Debenture; and neither the Trustee nor any
Conversion Agent makes any representation with respect thereto. Neither the
Trustee nor any Conversion Agent shall be responsible for any failure of the
Company to make any cash payment or to issue, transfer or deliver any shares of
Sun Common Stock or stock certificates or other securities or property upon the
surrender of any Convertible Debenture for the purpose of conversion, or, except
as expressly herein provided, to comply with any of the covenants of the Company
contained in Article Ten or this Article Thirteen.
ARTICLE XXVIII
Immunity of Incorporators, Stockholders,
Officers and Directors
SECTION 2801. NO RECOURSE.
No recourse under or upon any obligation, covenant or agreement of
this Indenture, or of any Convertible Debenture, or for any claim based thereon
or otherwise in respect thereof, shall be had against any incorporator,
stockholder, officer or director, past, present or future as such, of the
Company or of any predecessor or successor corporation, either directly or
through the Company or any such predecessor or successor corporation, whether by
virtue of any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise; it being expressly understood that this
Indenture and the obligations issued hereunder are solely corporate obligations,
and that no such personal liability whatever shall attach to, or is or shall be
incurred by, the incorporators, stockholders, officers or directors as such, of
the Company or of any predecessor or successor corporation, or any of them,
because of the creation of the indebtedness hereby authorized, or under or by
reason of the obligations, covenants or agreements contained in this Indenture
or in any of the Convertible Debentures or implied therefrom; and that any and
all such personal liability of
- 86 -
every name and nature, either at common law or in equity or by constitution or
statute, of, and any and all such rights and claims against, every such
incorporator, stockholder, officer or director as such, because of the creation
of the indebtedness hereby authorized, or under or by reason of the obligations,
covenants or agreements contained in this Indenture or in any of the Convertible
Debentures or implied therefrom, are hereby expressly waived and released as a
condition of, and as a consideration for, the execution of this Indenture and
the issuance of such Convertible Debentures.
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
- 87 -
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed as of the day and year first above written.
SUN HEALTHCARE GROUP, INC.,
as Issuer
By: /s/ Xxxxxx X. Xxxxxx
---------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Chief Financial Officer
THE BANK OF NEW YORK,
as Trustee
By: /s/ Xxxx Xxxxxxxx
---------------------------------------
Name: Xxxx XxXxxxxx
Title: Assistant Vice President
EXHIBIT A
FORM OF CONVERTIBLE DEBENTURE
[FACE OF CONVERTIBLE DEBENTURE]
[Include if Convertible Debenture is in global form:
THIS CONVERTIBLE DEBENTURE IS A GLOBAL CERTIFICATE WITHIN THE MEANING
OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME
OF A DEPOSITARY OR A NOMINEE THEREOF. THIS CONVERTIBLE DEBENTURE MAY
NOT BE EXCHANGED IN WHOLE OR IN PART FOR A CONVERTIBLE DEBENTURE
REGISTERED, AND NO TRANSFER OF THIS CONVERTIBLE DEBENTURE IN WHOLE OR
IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH
DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES
DESCRIBED IN THE INDENTURE.]
[Include if Convertible Debenture is in global form and The Depository
Trust Company is the Depositary:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED SIGNATORY OF THE
DEPOSITORY TRUST COMPANY ("DTC") TO THE TRUST OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN. ]
THIS SECURITY AND ANY COMMON STOCK ISSUED ON CONVERSION HEREOF HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER THIS
SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR
NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THE
HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR
OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE WHICH IS AFTER THE
EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES THEREOF UNDER RULE
144(k) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR RULE) (THE "RESALE
RESTRICTION TERMINATION DATE") ONLY (A) TO SUN HEALTHCARE GROUP, INC., (THE
"COMPANY") (B) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE
PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON
IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN
RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS
BEING MADE IN RELIANCE ON RULE 144A, (D) TO AN INSTITUTIONAL "ACCREDITED
INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (a)(1), (2), (3) OR (7) OF
RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THE SECURITY FOR ITS
OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL "ACCREDITED
INVESTOR," FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR
SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES
ACT, OR (E) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY'S AND THE
TRANSFER AGENT'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER (i)
PURSUANT TO CLAUSES (D) OR (E) TO REQUIRE THE DELIVERY OF AN OPINION OF
COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF
THEM, AND (ii) IN EACH OF THE FOREGOING CASES, TO REQUIRE THAT A
CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON
- 2 -
THIS SECURITY IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE TRANSFER
AGENT, THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF A HOLDER AFTER THE
RESALE RESTRICTION TERMINATION DATE.
- 3 -
7% Convertible Junior Subordinated Debenture Due 2028
No. 1
$_______
Sun Healthcare Group, Inc., a corporation duly organized and existing
under the laws of the State of Delaware (herein called the "Company", which term
includes any successor Person under the Indenture hereinafter referred to), for
value received, hereby promises to pay to Sun Financing I, or registered
assigns, the principal sum of_______________________________________________
_____________________ Dollars ($ __________) on May 1, 2028 and to pay interest
thereon from May 4, 1998 or from the most recent Interest Payment Date to which
interest has been paid or duly provided for, as the case may be, payable
quarterly (subject to deferral as set forth in the Indenture), in arrears, on
February 1, May 1, August 1 and November 1 (each an "Interest Payment Date") of
each year, commencing August 1, 1998, until the principal thereof is paid or
made available for payment, and they shall be paid to the Person in whose name
the Convertible Debenture is registered at 5:00 p.m. (New York City time) on the
regular record date for such interest installment, which shall be the close of
business on the Business Day next preceding such Interest Payment Date (provided
that the Company has not set a new record date pursuant to the Indenture) (the
"Regular Record Date").
Reference is hereby made to the further provisions of this Convertible
Debenture set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this
Convertible Debenture shall not be entitled to any benefit under the Indenture
or be valid or obligatory for any purpose.
- 4 -
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated: May 4, 1998
SUN HEALTHCARE GROUP, INC.
By:
----------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Chief Financial Officer
[Seal]
Attest:
--------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Secretary
- 5 -
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Convertible Debentures referred to in the
within-mentioned Indenture.
Dated:
THE BANK OF NEW YORK, as Trustee
By:
---------------------------
Authorized Signatory
- 6 -
[FORM OF REVERSE OF CONVERTIBLE DEBENTURE]
This Convertible Debenture is one of a duly authorized issue of
securities of the Company designated as its 7% Convertible Junior Subordinated
Debenture Due 2028 (herein called the "Convertible Debentures"), in aggregate
principal amount of $355,670,131.25, issued and to be issued under an Indenture,
dated as of May 4, 1998 (herein called the "Indenture"), between the Company and
The Bank of New York, as Trustee (herein called the "Trustee", which term
includes any successor trustee under the Indenture), to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of the
respective rights, limitations of rights, duties and immunities thereunder of
the Trustee, the Company and the Holders of the Convertible Debentures, and of
the terms upon which the Convertible Debentures are, and are to be,
authenticated and delivered. The terms of the Convertible Debentures include
those stated in the Indenture and those made part of the Indenture by the Trust
Indenture Act of 1939 (15 U.S.C. Sections 77aaa-77bbbb) ("TIA") as in effect on
the date of the Indenture. The Convertible Debentures are subject to, and
qualified by, all such terms, certain of which are summarized hereon, and
holders are referred to the Indenture and the TIA for a statement of such terms.
No reference herein to the Indenture and no provision of this Convertible
Debenture or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of and
interest on this Convertible Debenture at the times, place and rate, and in the
coin or currency, herein prescribed or to convert this Convertible Debenture as
provided in the Indenture. All terms used in this Convertible Debenture which
are defined in the Indenture shall have the meanings assigned to them in the
Indenture. The Company will furnish to any Holder upon written request and
without charge a copy of the Indenture.
(1) INTEREST. The Convertible Debentures shall bear interest at the
rate of 7% per annum, from May 4, 1998 or from the most recent Interest Payment
Date to which interest has been paid or duly provided for, as the case may be,
payable quarterly (subject to deferral as set forth herein), in arrears, on
February 1, May 1, August 1 and November 1 (each an "Interest Payment Date") of
each year, commencing August 1, 1998, until the principal thereof is paid or
made available for payment, and they shall be paid to the Person in whose name
the Convertible Debenture is registered at 5:00 p.m. (New York City time) on the
regular record date for such interest installment, which shall be the close of
business on the Business Day next preceding such Interest Payment Date (provided
that the Company has not set a new record date pursuant to the Indenture) (the
"Regular Record Date"). Interest will compound quarterly and will accrue at the
rate of 7% per annum on any interest installment in arrears for more than one
quarter or during an extension of an interest payment period as set forth below.
The amount of interest payable for any period will be computed on the
basis of a 360-day year of twelve 30-day months. Except as provided in the
following sentence, the
- 7 -
amount of interest payable for any period shorter than a full quarterly period
for which interest in computed, will be computed on the basis of the actual
number of days elapsed per 90-day quarter. In the event that any date on which
interest is payable on the Convertible Debentures is not a Business Day, then
payment of interest payable on such date will be made on the next succeeding day
which is a Business Day (and without any interest or other payment in respect of
any such delay), except that, if such Business Day is in the next succeeding
calendar year, such payment shall be made on the immediately preceding Business
Day, in each case with the same force and effect as if made on such date.
If at any time while the Property Trustee is the Holder of any
Convertible Debentures, the Trust or the Property Trustee is required to pay any
taxes, duties, assessments or governmental charges of whatever nature (other
than withholding taxes) imposed by the United States, or any other taxing
authority, then, in any such case, the Company shall pay as additional interest
("Additional Interest") on the Convertible Debentures held by the Property
Trustee, such amounts as shall be required so that the net amounts received and
retained by the Trust and the Property Trustee after paying any such taxes,
duties, assessments or other governmental charges will be not less than the
amounts the Trust and the Property Trustee would have received had no such
taxes, duties, assessments or other governmental charges been imposed.
The principal of and interest on the Convertible Debentures shall be
payable [insert, if global security is issued to the Depositary Trust Company or
its nominee] [insert, if securities in definitive form are issued at the
corporate office of the Indenture Trustee in the City of New York or at the
office or agency of the Paying Agent in the United States maintained for such
purpose] in such coin or currency of the United States of America as at the time
of payment is legal tender for payment of public and private debts; PROVIDED,
HOWEVER, that at the option of the Company payment of interest may be made by
(i) check mailed to the address of the Person entitled thereto as such address
shall appear in the Security Register, or (ii) by wire transfer to an account
maintained by the Person entitled thereto as specified in the Securities
Register, provided that proper transfer instructions have been received by the
Regular Record Date.
(2) OPTION TO EXTEND INTEREST PAYMENT PERIOD. The Company shall have
the right at any time during the term of the Convertible Debentures to defer
interest payments (including Additional Payments) from time to time by extending
the interest payment period for successive periods (each, an "Extension Period")
not exceeding 20 consecutive quarters for each such period; PROVIDED, no
Extension Period may extend beyond the maturity date of the Convertible
Debentures. At the end of each Extension Period, the Company shall pay all
interest then accrued and unpaid (including Additional Interest) together with
interest thereon compounded quarterly at the rate specified for the Convertible
Debentures to the extent
- 8 -
permitted by applicable law ("Compounded Interest"); PROVIDED, that during any
Extension Period, the Company shall (i) not declare or pay dividends on, or make
a distribution with respect to, or redeem or purchase or acquire, or make a
liquidation payment with respect to, any of its capital stock (other than (A)
purchases or acquisitions of shares of Sun Common Stock in connection with the
satisfaction by the Company of its obligations under any employee benefit plans
or the satisfaction by the Company of its obligations pursuant to any contract
or security requiring the Company to purchase shares of Sun Common Stock, (B) as
a result of a reclassification of the Company's capital stock or the exchange or
conversion of one class or series of the Company's capital stock for another
class or series of the Company's capital stock or (C) the purchase of fractional
interests in shares of the Company's capital stock pursuant to the conversion or
exchange provisions of such capital stock or the security being converted or
exchanged) or make any guarantee payments with respect to the foregoing, (ii)
not make any payment of interest, principal or premium, if any, on or repay,
repurchase or redeem any debt securities (including guarantees) issued by the
Company that rank PARI PASSU with or junior to the Convertible Debentures
(except by conversion into or exchange for shares of its capital stock) and
(iii) not make any guarantee payments with respect to the foregoing (other than
pursuant to the Guarantee). Prior to the termination of any such Extension
Period, the Company may further extend such Extension Period; PROVIDED, that
such Extension Period, together with all such previous and further extensions
thereof, may not exceed 20 consecutive quarters or extend beyond the maturity
date of the Convertible Debentures. Upon the termination of any Extension
Period and the payment of all amounts then due, the Company may commence a new
Extension Period, subject to the above requirements. No interest during an
Extension Period shall be due and payable. Notwithstanding anything to the
contrary, the Company shall not have the right at any time to defer any
Additional Interest, including by extending the interest payment period.
If the Property Trustee is the sole Holder of the Convertible
Debentures at the time the Company selects an Extension Period, the Company
shall give written notice to the Administrative Trustees, the Property Trustee
and the Trustee of its selection of such Extension Period at least one Business
Day prior to the earlier of (i) the date the distributions on the Convertible
Preferred Securities are payable or (ii) if the Convertible Preferred Securities
are listed on the New York Stock Exchange or other stock exchange or quotation
system, the date the Trust is required to give notice to the New York Stock
Exchange or other applicable self-regulatory organization or to holders of the
Convertible Preferred Securities of the record date or the date such
distributions are payable, but in any event not less than 10 Business Days prior
to such record date.
If the Property Trustee is not the sole holder of the Convertible
Debentures at the time the Company selects an Extension Period, the Company
shall give the Holders of the Convertible Debentures and the Trustee written
notice of its selection of such Extension Period
- 9 -
at least ten Business Days prior to the earlier of (i) the next succeeding
Interest Payment Date or (ii) if the Convertible Preferred Securities are listed
on the New York Stock Exchange or other stock exchange or quotation system, the
date the Company is required to give notice to the New York Stock Exchange or
other applicable self-regulatory organization or to holders of the Convertible
Debentures on the record or payment date of such related interest payment, but
in any event not less than two Business Days prior to such record date.
The quarter in which any notice is given pursuant to paragraphs second
and third of this Section 2 shall be counted as one of the 20 quarters permitted
in the maximum Extension Period permitted under paragraph one of this Section 2.
(3) PAYING AGENT AND SECURITY REGISTRAR. The Trustee will act as
Paying Agent, Security Registrar and Conversion Agent. The Company may change
any Paying Agent, Security Registrar, co-registrar or Conversion Agent without
prior notice. The Company or any of its Affiliates may act in any such
capacity.
(4) REDEMPTION. The Company shall have the right to redeem the
Convertible Debentures, in whole or in part, at any time or from time to time
after May 3, 2001 upon not less than 30 nor more than 60 days' notice, at the
optional redemption prices (expressed as a percentage of the principal amount of
Convertible Debentures to be redeemed) shown below, plus any accrued and unpaid
interest (including Additional Payments, if any) to the Redemption Date, if
redeemed during the 12-month period beginning May 3,:
Percentage of
Principal
Year Amount
---- -------------
2001 . . . . . . . . . . . . . . 104.000%
2002 . . . . . . . . . . . . . . 103.000%
2003 . . . . . . . . . . . . . . 102.000%
2004 . . . . . . . . . . . . . . 101.000%
2005 and thereafter . . . . . . . 100.000%
If the Company has deferred interest payments, all unpaid interest
must be paid in cash prior to redemption. Any redemption pursuant to this
Section 1101 shall be made pursuant to the provisions of Sections 1103 through
1108 hereof.
The Convertible Debentures are subject to redemption in whole (but not
in part), at any time within 90 days, if a Tax Event (as defined in the
Declaration) shall occur and be continuing, at a redemption price equal to 100%
of the principal amount thereof plus accrued
- 10 -
but unpaid interest (including Additional Payments, if any) to the Redemption
Date. On and after the Redemption Date, interest ceases to accrue on the
Convertible Debentures or portions of them called for redemption.
Notice of redemption shall be given by first-class mail, postage
prepaid, mailed not less than 30 nor more than 60 days prior to the Redemption
Date, to each Holder of Convertible Debentures to be redeemed, at such Holder's
address appearing in the Security Register. The Convertible Debentures in
denominations larger than $25 may be redeemed in part but only in integral
multiples of $25. In the event of a redemption of less than all of the
Convertible Debentures, the Convertible Debentures will be chosen for redemption
by the Trustee in accordance with the Indenture.
If this Convertible Debenture is redeemed subsequent to a Regular
Record Date with respect to any Interest Payment Date specified above and on or
prior to such Interest Payment Date, then any accrued interest will be paid to
the person in whose name this Convertible Debenture is registered at the close
of business on such record date.
(5) SINKING FUND. The Convertible Debentures are not entitled to
the benefit of any sinking fund.
(6) SUBORDINATION. The payment of the principal of, premium, if
any, and interest (including Additional Payments, if any) on all Convertible
Debentures is subordinated and junior in right of payment to the prior
payment in full of all existing and future Senior Indebtedness, whether
outstanding at the date of this Indenture or thereafter incurred. Each
holder, by accepting a Convertible Debenture, agrees to such subordination
and authorizes and directs the Trustee on its behalf to take such action as
may be necessary or appropriate to effectuate the subordination so provided
and appoints the Trustee as its attorney-in-fact for such purpose.
"SENIOR CREDIT FACILITY" means that certain Credit Agreement, dated as
of October 8, 1997, as amended by the First Amendment thereto dated November 12,
1997 and the Second Amendment thereto dated March 27, 1998, by and among the
Company and NationsBank of Texas, N.A. and the other banks that are parties
thereto, providing for availability of up to $1.2 billion of loans to the
Company in the following components: (a) a revolving credit facility of up to
$500.0 million and (b) three term loans in the amounts of $200.0 million,
$250.0 million and $250.0 million, respectively, including any related notes,
collateral documents, instruments and agreements executed in connection
therewith, and in each case as amended, increased, modified, extended, renewed,
refunded, replaced or refinanced, in whole or in part, from time to time.
- 11 -
"SENIOR INDEBTEDNESS" means in respect of the Company: (i) the
principal, premium, if any, and interest in respect of (A) indebtedness of such
obligor for money borrowed and (B) indebtedness evidenced by securities,
debentures, bonds or other similar instruments issued by such obligor,
including, without limitation, in the case of Sun, all indebtedness, and all
obligations of Sun to pay fees and other amounts, under the Senior Credit
Facility or under the indentures with respect to the Company's outstanding 91/2%
notes due 2007 (the "2007 Notes") and the Company's 9 3/8% Senior Subordinated
Notes due 2008, and any refinancing of the Senior Credit Facility in the bank
credit market (including institutional participants therein), including interest
accruing on or after a bankruptcy or other similar event, whether or not an
allowed claim therein, (ii) all capital lease obligations of such obligor,
(iii) all obligations of such obligor issued or assumed as the deferred purchase
price of property, all conditional sale obligations of such obligor and all
obligations of such obligor under any title retention agreement (but excluding
trade accounts payable arising in the ordinary course of business), (iv) all
obligations of such obligor for the reimbursement of any letter of credit,
banker's acceptance, security purchase facility or similar credit transaction,
(v) all obligations of the type referred to in clauses (i) through (iv) above of
other Persons for the payment of which such obligor is responsible or liable as
obligor, guarantor or otherwise, and (vi) all obligations of the type referred
to in clauses (i) through (v) above of other Persons secured by any lien on any
property or asset of such obligor (whether or not such obligation is assumed by
such obligor), except for (1) any such indebtedness that is by its terms
subordinated to or PARI PASSU with the Convertible Debentures and (2) any
indebtedness between or among such obligor or its affiliates, including all
other debt securities and guarantees in respect of those debt securities issued
to any trust, or a trustee of such trust, partnership, or other entity
affiliated with the Company that is, directly or indirectly, a financing vehicle
of the Company (a "Financing Entity") in connection with the issuance by such
Financing Entity of Convertible Preferred Securities or other securities which
rank PARI PASSU with, or junior to, the Convertible Preferred Securities, unless
otherwise provided in the terms of such debt securities. Such Senior
Indebtedness shall continue to be Senior Indebtedness and entitled to the
benefits of the subordination provisions irrespective of any amendment,
modification or waiver of any term of such Senior Indebtedness, except as
otherwise provided in the exception clauses above.
(7) CONVERSION. The Holder of any Convertible Debenture has the
right, exercisable at any time on or before 5:00 p.m. (New York City time) on
the Business Day immediately preceding the date of repayment of such Convertible
Debentures, whether at maturity or upon redemption (either at the option of the
Company or pursuant to a Tax Event), to convert the principal amount thereof (or
any portion thereof that is an integral multiple of $25) into fully paid and
nonassessable shares of Sun Common Stock of the Company at an initial conversion
rate of 1.2419 shares of Sun Common Stock for each $25 in aggregate principal
amount of Convertible Debentures (equal to a conversion price of $20.13 per
share of Sun Common Stock), subject to adjustment under certain circumstances as
set forth in
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Section 1303 and 1304. The number of shares issuable upon conversion of a
Convertible Debenture is determined by dividing the principal amount of the
Convertible Debenture converted by the conversion price in effect on the
Conversion Date. No fractional shares will be issued upon conversion but a cash
adjustment will be made for any fractional interest. The outstanding principal
amount of any Convertible Debenture shall be reduced by the portion of the
principal amount thereof converted into shares of Sun Common Stock.
To convert a Convertible Debenture, a Holder must (i) complete and
sign a conversion notice substantially in the form attached hereto, (ii)
surrender the Convertible Debenture to a Conversion Agent, (iii) furnish
appropriate endorsements or transfer documents if required by the Security
Registrar or Conversion Agent and (iv) pay any transfer or similar tax, if
required. If a Notice of Conversion is delivered on or after the Regular Record
Date and prior to the subsequent Interest Payment Date, the Holder will be
entitled to receive the interest payable on the subsequent Interest Payment Date
on the portion of Convertible Debentures to be converted notwithstanding the
conversion thereof prior to such Interest Payment Date. Except as otherwise
provided in the immediately preceding sentence, in the case of any Convertible
Debenture which is converted, interest whose Stated Maturity is after the date
of conversion of such Convertible Debenture shall not be payable, and the
Company shall not make nor be required to make any other payment, adjustment or
allowance with respect to accrued but unpaid interest (including Additional
Payments, if any) on the Convertible Debentures being converted, which shall be
deemed to be paid in full. If any Convertible Debenture called for redemption
is converted, any money deposited with the Trustee or with any Paying Agent or
so segregated and held in trust for the redemption of such Convertible Debenture
shall (subject to any right of the Holder of such Convertible Debenture or any
Predecessor Security to receive interest as provided in the last paragraph of
Section 307 and this paragraph) be paid to the Company upon Company Request or,
if then held by the Company, shall be discharged from such trust.
(8) REGISTRATION RIGHTS. The holders of the Convertible Preferred
Securities, the Convertible Debentures issuable in respect of the Convertible
Preferred Securities, the shares of Sun Common Stock issuable upon conversion of
the Convertible Preferred Securities and the Convertible Debentures, and the
Guarantee (collectively, the "REGISTRABLE SECURITIES") are entitled to the
benefits of a Registration Rights Agreement, dated as of May 4, 1998, between
the Company and the Initial Purchasers (the "REGISTRATION RIGHTS AGREEMENT").
Pursuant to the Registration Rights Agreement, the Company has agreed for the
benefit of the holders of Registrable Securities that (i) it will, at its cost,
use its reasonable best efforts within 90 days after the date of original
issuance of the Registrable Securities, to file a shelf registration statement
(the "SHELF REGISTRATION STATEMENT") with the Commission with respect to the
resales of the Registrable Securities, (ii) it will use its reasonable best
efforts to cause such Shelf Registration Statement to be declared effective by
the Commission within 150 days after the
- 13 -
date of issuance of the Registrable Securities and (iii) it will use its
reasonable best efforts to maintain such Shelf Registration Statement
continuously effective under the Securities Act until two years after the date
of original issuance of the Convertible Preferred Securities (or such earlier
date as the holders of Registrable Securities are able to sell all Registrable
Securities immediately without restriction, whether pursuant to Rule 144(k)
under the Securities Act or any successor rule thereto or otherwise) (the
"EFFECTIVENESS PERIOD") or such holders have sold all such Registrable
Securities pursuant to an effective Registration Statement. The Trust and the
Company will be permitted to suspend the use of the prospectus (which is a part
of the Shelf Registration Statement) in connection with sales of Registrable
Securities by holders during certain periods of time under certain circumstances
relating to pending corporate developments relating to the Company and public
filings with the Commission and similar events.
If (i) on or prior to 90 days following the date of original issuance
of the Registrable Securities, a Shelf Registration Statement has not
been filed with the Commission or (ii) on or prior to the 150th day
following the original issuance of the Registrable Securities, such
Shelf Registration Statement has not been declared effective (each
such event a "REGISTRATION DEFAULT"), additional interest ("LIQUIDATED
DAMAGES") will accrue on the Convertible Debentures and, accordingly,
additional distributions will accrue on the Convertible Preferred
Securities, from and including the day following such Registration
Default until such time as such Shelf Registration Statement is filed
or such Shelf Registration Statement is declared effective, as the
case may be. Liquidated Damages will be paid quarterly in arrears
(subject to the Company's ability to defer payment of Liquidated
Damages during any Extension Period), with the first quarterly payment
due on the first Interest Payment Date following the date on which
such Liquidated Damages begin to accrue, and will accrue at a rate per
annum equal to an additional 0.25% of the principal amount or
liquidation amount, as applicable, to and including the 90th day
following such Registration Default and 0.50% thereof from and after
the 91st day following such Registration Default. The curing of any
Registration Default will reset the rate at which Liquidated Damages
begin to accrue for any subsequent new Registration Default to a rate
per annum equal to an additional one-quarter of one percent (0.25%) of
the principal amount or liquidation amount, as applicable, to and
including the 90th day following such Registration Default and
one-half of one percent (0.50%) thereof from and after the 91st day
following such new Registration Default. The Guarantor shall have the
right to suspend the Shelf Registration Statement under certain
circumstances for up to 90 consecutive days. In the event that during
the Effectiveness Period the Shelf Registration Statement ceases to be
effective for more than 90 consecutive days or any 120 days, whether
or not
- 14 -
consecutive, during any 12-month period then the interest rate borne
by the Debentures and the distribution rate borne by the Convertible
Preferred Securities will each increase by an additional 0.25% per
annum from such 91st or 121st day, as applicable, of the applicable
12-month period such Shelf Registration Statement ceases to be
effective until the earlier of such time as (i) the Shelf Registration
Statement again becomes effective or (ii) the Effectiveness Period
expires.
The summary of certain provisions of the Registration Rights Agreement
in this Section 8 is subject to, and is qualified in its entirety, by reference
to the Registration Rights Agreement.
(9) REGISTRATION, TRANSFER, EXCHANGE AND DENOMINATIONS. As provided
in the Indenture and subject to certain limitations therein set forth, the
transfer of this Convertible Debenture is registrable in the Security Register,
upon surrender of this Convertible Debenture for registration of transfer at the
office or agency of the Company in New York, New York, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by, the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Convertible
Debentures, of authorized denominations and for the same aggregate principal
amount, will be issued to the designated transferee or transferees.
The Convertible Debentures are issuable only in registered form
without coupons in denominations of $25 and integral multiples thereof. No
service charge shall be made for any such registration of transfer or exchange,
but the Company may require payment of a sum sufficient to cover any tax or
other governmental charge payable in connection therewith. Prior to due
presentment of this Convertible Debenture for registration of transfer, the
Company, the Trustee and any Agent of the Company or the Trustee may treat the
Person in whose name this Convertible Debenture is registered as the owner
hereof for all purposes, whether or not this Convertible Debenture be overdue,
and neither the Company, the Trustee nor any such Agent shall be affected by
notice to the contrary. In the event of redemption or conversion of this
Convertible Debenture in part only, a new Convertible Debenture or Convertible
Debentures for the unredeemed or unconverted portion hereof will be issued in
the name of the Holder hereof upon the cancellation hereof.
(10) PERSONS DEEMED OWNERS. Except as provided in the Indenture, the
registered Holder of a Convertible Debenture may be treated as its owner for all
purposes.
(11) UNCLAIMED MONEY. If money for the payment of principal or
interest remains unclaimed for two years, the Trustee and the Paying Agent shall
pay the money back to the Company at its written request. After that, Holders
of Convertible Debentures entitled
- 15 -
to the money must look to the Company for payment unless an abandoned property
law designates another Person and all liability of the Trustee and such Paying
Agent with respect to such money shall cease.
(12) DEFAULTS AND REMEDIES. The Convertible Debentures shall have the
Events of Default as set forth in Section 501 of the Indenture. Subject to
certain limitations in the Indenture, if an Event of Default occurs and is
continuing, the Trustee by notice to the Company or the Holders of at least 25%
in aggregate principal amount of the then outstanding Convertible Debentures by
notice to the Company and the Trustee may declare all the Convertible Debentures
to be due and payable immediately.
The Holders of a majority in principal amount of the Convertible
Debentures then outstanding by written notice to the Trustee may rescind an
acceleration and its consequences if the rescission would not conflict with any
judgment or decree and if all existing Events of Default have been cured or
waived except nonpayment of principal or interest that has become due solely
because of the acceleration. Holders may not enforce the Indenture or the
Convertible Debentures except as provided in the Indenture. Subject to certain
limitations, Holders of a majority in principal amount of the then outstanding
Convertible Debentures issued under the Indenture may direct the Trustee in its
exercise of any trust or power. The Convertible Debentures are unsecured
general obligations of the Company. The Company must furnish annually
compliance certificates to the Trustee. The above description of Events of
Default and remedies is qualified by reference to, and subject in its entirety
by, the more complete description thereof contained in the Indenture.
(13) AMENDMENTS, SUPPLEMENTS AND WAIVERS. The Indenture permits, with
certain exceptions as therein provided, the amendment thereof and the
modification of the rights and obligations of the Company and the rights of the
Holders of the Convertible Debentures under the Indenture at any time by the
Company and the Trustee with the consent of the Holders of a majority in
aggregate principal amount of the Convertible Debentures at the time
Outstanding. The Indenture also contains provisions permitting the Holders of
specified percentages in aggregate principal amount of the Convertible
Debentures at the time Outstanding, on behalf of the Holders of all the
Convertible Debentures, to waive compliance by the Company with certain
provisions of the Indenture and certain past defaults under the Indenture and
their consequences. Any such consent or waiver by the Holder of this
Convertible Debenture shall be conclusive and binding upon such Holder and upon
all future Holders of this Convertible Debenture and of any Convertible
Debenture issued upon the registration of transfer hereof or in exchange herefor
or in lieu hereof, whether or not notation of such consent or waiver is made
upon this Convertible Debenture.
- 16 -
(14) TRUSTEE DEALINGS WITH THE COMPANY. The Trustee, in its
individual or any other capacity may become the owner or pledgee of the
Convertible Debentures and may otherwise deal with the Company or an Affiliate
with the same rights it would have, as if it were not Trustee, subject to
certain limitations provided for in the Indenture and in the TIA. Any Agent may
do the same with like rights.
(15) NO RECOURSE AGAINST OTHERS. A director, officer, employee or
stockholder, as such, of the Company shall not have any liability for any
obligations of the Company under the Convertible Debentures or the Indenture or
for any claim based on, in respect of or by reason of such obligations or their
creation. Each Holder of the Convertible Debentures by accepting a Convertible
Debenture waives and releases all such liability. The waiver and release are
part of the consideration for the issue of the Convertible Debentures.
(16) GOVERNING LAW. THE INTERNAL LAWS OF THE STATE OF NEW YORK SHALL
GOVERN THE INDENTURE AND THE CONVERTIBLE DEBENTURES WITHOUT REGARD TO CONFLICT
OF LAW PROVISIONS THEREOF.
(17) AUTHENTICATION. The Convertible Debentures shall not be valid
until authenticated by the manual signature of an authorized officer of the
Trustee or an authenticating Agent.
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ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Convertible
Debenture to:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Insert assignee's social security or tax identification number)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Insert address and zip code of assignee)
and irrevocably appoints
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Agent to transfer this Convertible Debenture on the books of the Company. The
Agent may substitute another to act for him or her.
Date:
-----------------------
------------------------------------------
(Sign exactly as your name appears on the
other side of this Convertible Debenture)
Signature Guarantee:*
---------------------
_______________________
* Signature must be guaranteed by an "eligible guarantor institution" that
is, a bank, stockbroker, savings and loan association or credit union
meeting the requirements of the Registrar, which requirements include
membership or participation in the Securities Transfer Agents Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Securities Exchange Act of 1934, as amended.
- 18 -
[Include the following if the Convertible Debenture bears a Restricted
Securities Legend -
In connection with any transfer of any of the Convertible Debentures evidenced
by this certificate, the undersigned confirms that such Convertible Debentures
are being:
CHECK ONE BOX BELOW
(1) [ ] exchanged for the undersigned's own account without transfer; or
(2) [ ] transferred to a "qualified institutional buyer" pursuant to and
in compliance with Rule 144A under the Securities Act; or
(3) [ ] transferred to an institutional "accredited investor"; or
(4) [ ] transferred pursuant to another available exemption from the
registration requirements of the Securities Act; or
(5) [ ] transferred pursuant to an effective Registration Statement under
the Securities Act.
Unless one of the boxes is checked, the Trustee will refuse to register any of
the Convertible Debentures evidenced by this certificate in the name of any
person other than the registered Holder thereof; PROVIDED, HOWEVER, that if box
(2), (3) or (4) is checked, the Trustee may require, prior to registering any
such transfer of the Convertible Debentures such legal opinions, certifications
and other information as the Company has reasonably requested in writing and
directed the Trustee to require confirmation that such transfer is being made
pursuant to an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act, such as the exemption provided
by Rule 144 under such Act; PROVIDED, FURTHER, that after the date that a Shelf
Registration Statement under the Securities Act has been filed and so long as
such Shelf Registration Statement continues to be effective, the Trustee may
only permit transfers for which box (5) has been checked.
----------------------
Signature
Signature Guarantee:*
________________________
Stock Exchange Medallion Program (SEMP); or (iv) in such other
guarantee programs acceptable to the Trustee.
* Signature must be guaranteed by an "eligible guarantor institution" that
is, a bank, stockbroker, savings and loan association or credit union
meeting the requirements of the Registrar, which requirements include
membership or participation in the Securities Transfer Agents Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Securities Exchange Act of 1934, as amended.
- 19 -
---------------------------------- ----------------------------------
Signature must be guaranteed Signature
--------------------------------------------------------------------------------
[TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this
Convertible Debenture for its own account or an account with respect to which it
exercises sole investment discretion and that it and any such account is a
"qualified institutional buyer" within the meaning of Rule 144A under the
Securities Act, and is aware that the sale to it is being made in reliance on
Rule 144A and acknowledges that it has received such information regarding the
Company as the undersigned has requested pursuant to Rule 144A or has determined
not to request such information and that it is aware that the transferor is
relying upon the undersigned's foregoing representations in order to claim the
exemption from registration provided by Rule 144A.
Dated:
---------------------------- ----------------------------------
NOTICE: To be executed by an executive
officer]
[TO BE COMPLETED BY PURCHASER IF (3) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this
Convertible Debenture for its own account or an account with respect to which it
exercises sole investment discretion and that it and any such account is an
institutional "accredited investor" within the meaning of subparagraph (a)(1),
(2), (3) or (7) of Rule 501 under the Securities Act.
Dated:
---------------------------- ----------------------------------
NOTICE: To be executed by an executive
officer]
- 20 -
NOTICE OF CONVERSION
To:
The undersigned owner of this Convertible Debenture hereby irrevocably
exercises the option to convert this Convertible Debenture, or the portion below
designated, into common stock of Sun Healthcare Group, Inc., a Delaware
corporation (the "Company") (the "Sun Common Stock") in accordance with the
terms of the Indenture, between the Company and The Bank of New York as
Trustee, and directs that the shares issuable and deliverable upon conversion,
together with any check in payment for fractional shares, be issued in the name
of and delivered to the undersigned, unless a different name has been indicated
in the assignment below. If shares are to be issued in the name of a person
other than the undersigned, the undersigned will pay all transfer taxes payable
with respect thereto.
Any Holder, upon the exercise of its conversion rights in accordance
with the terms of the Indenture and the Convertible Debenture, agrees to be
bound by the terms of the Registration Rights Agreement relating to the Sun
Common Stock issuable upon conversion of the Convertible Debenture.
Date: ________________
Number of Convertible Debentures to be converted ($25 or integral
multiples thereof): ___________________
If a name or names other than the undersigned, please indicate in the spaces
below the name or names in which the shares of Sun Common Stock are to be
issued, along with the address or addresses of such person or persons.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
------------------------------------------
(Sign exactly as your name appears on the
the Convertible Debenture) (for conversion only)
Please Print or Typewrite Name and Address,
Including Zip Code, and Social Security or
Other Identifying Number.
-------------------------------------------
-------------------------------------------
-------------------------------------------
-------------------------------------------
Signature Guarantee:*
--------------------
* Signature must be guaranteed by an "eligible guarantor institution"
that is, a bank, stockbroker, savings and loan association or credit
union meeting the requirements of the Registrar, which requirements
include membership
(footnote continued on next page...)
- 21 -
(...footnote continued from preceding page)
or participation in the Securities Transfer Agents Medallion Program
("STAMP") or such other "signature guarantee program" as may be
determined by the Registrar in addition to, or in substitution for,
STAMP, all in accordance with the Securities Exchange Act of 1934, as
amended.
- 22 -
