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EXHIBIT 4.2
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SABRATEK CORPORATION
TO
LASALLE NATIONAL BANK
TRUSTEE
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INDENTURE
DATED AS OF APRIL 14, 1998
6% CONVERTIBLE NOTES DUE 2005
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TABLE OF CONTENTS
Page
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ARTICLE I
Definitions and Incorporation by Reference
SECTION 1.01. Definitions ...........................................................1
SECTION 1.02. Other Definitions......................................................6
SECTION 1.03. Incorporation by Reference of Trust Indenture Act......................7
SECTION 1.04. Rules of Construction..................................................7
ARTICLE II
The Securities
SECTION 2.01. Form and Dating........................................................8
SECTION 2.02. Execution, Authentication and Delivery.................................9
SECTION 2.03. Registrars, Paying Agents and Conversion Agents.......................10
SECTION 2.04. Paying Agent to Hold Money in Trust...................................10
SECTION 2.05. Noteholder Lists......................................................10
SECTION 2.06. Transfer and Exchange.................................................10
SECTION 2.07. Replacement Securities................................................12
SECTION 2.08. Outstanding Securities................................................12
SECTION 2.09. Treasury Securities...................................................13
SECTION 2.10. Temporary Securities; Exchange of Global Security for Certificated
Securities......................................................13
SECTION 2.11. Cancellation..........................................................14
SECTION 2.12. Defaulted Interest....................................................14
ARTICLE III
Redemption
SECTION 3.01. Notices to Trustee....................................................14
SECTION 3.02. Selection of Securities to be Redeemed................................14
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SECTION 3.03. Notice of Redemption..................................................15
SECTION 3.04. Effect of Notice of Redemption........................................16
SECTION 3.05. Deposit of Redemption Price...........................................16
SECTION 3.06. Securities Redeemed in Part...........................................16
SECTION 3.07. Optional Redemption...................................................16
SECTION 3.08. Designated Event Offer................................................16
ARTICLE IV
Covenants
SECTION 4.01. Payment of Securities.................................................19
SECTION 4.02. SEC Reports ..........................................................19
SECTION 4.03. Compliance Certificate................................................19
SECTION 4.04. Stay, Extension and Usury Law.........................................20
SECTION 4.05. Corporate Existence...................................................20
SECTION 4.06. Taxes ................................................................21
SECTION 4.07. Designated Event......................................................21
SECTION 4.08. Investment Company Act................................................21
ARTICLE V
Conversion
SECTION 5.01. Conversion Privilege..................................................21
SECTION 5.02. Conversion Procedure..................................................22
SECTION 5.03. Fractional Shares.....................................................23
SECTION 5.04. Taxes on Conversion...................................................23
SECTION 5.05. Company to Provide Stock..............................................23
SECTION 5.06. Adjustment of Conversion Price........................................23
SECTION 5.07. No Adjustment.........................................................27
SECTION 5.08. Other Adjustments.....................................................27
SECTION 5.09. Adjustments for Tax Purposes..........................................28
SECTION 5.10. Adjustments by the Company............................................28
SECTION 5.11. Notice of Adjustment..................................................28
SECTION 5.12. Notice of Certain Transactions........................................28
SECTION 5.13. Effect of Reclassifications, Consolidations, Mergers or Sales on
Conversion Privilege............................................29
SECTION 5.14. Trustee's Disclaimer..................................................30
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ARTICLE VI
Successors
SECTION 6.01. Merger, Consolidation or Sale of Assets...............................30
SECTION 6.02. Successor Corporation Substituted.....................................31
ARTICLE VII
Defaults and Remedies
SECTION 7.01. Events of Default.....................................................31
SECTION 7.02. Acceleration..........................................................33
SECTION 7.03. Other Remedies........................................................33
SECTION 7.04. Waiver of Past Defaults...............................................33
SECTION 7.05. Control by Majority...................................................34
SECTION 7.06. Limitation on Suits...................................................34
SECTION 7.07. Rights of Noteholders to Receive Payment..............................34
SECTION 7.08. Collection Suit by Trustee............................................34
SECTION 7.09. Trustee May File Proofs of Claim......................................35
SECTION 7.10. Priorities............................................................35
SECTION 7.11. Undertaking for Costs.................................................35
ARTICLE VIII
Trustee
SECTION 8.01. Duties of Trustee.....................................................36
SECTION 8.02. Rights of Trustee.....................................................36
SECTION 8.03. Individual Rights of Trustee..........................................37
SECTION 8.04. Trustee's Disclaimer..................................................37
SECTION 8.05. Notice of Defaults....................................................37
SECTION 8.06. Reports by Trustee to Noteholders.....................................37
SECTION 8.07. Compensation and Indemnity............................................38
SECTION 8.08. Replacement of Trustee................................................39
SECTION 8.09. Successor Trustee by Merger, Etc......................................40
SECTION 8.10. Eligibility; Disqualification.........................................40
SECTION 8.11. Preferential Collection of Claims Against Company.....................40
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ARTICLE IX
Discharge of Indenture
SECTION 9.01. Termination of Company's Obligations..................................41
SECTION 9.02. Repayment to Company..................................................41
ARTICLE X
Amendments, Supplements and Waivers
SECTION 10.01. Without Consent of Noteholders.......................................41
SECTION 10.02. With Consent of Noteholders..........................................42
SECTION 10.03. Compliance with Trust Indenture Act..................................43
SECTION 10.04. Revocation and Effect of Consents....................................43
SECTION 10.05. Notation on or Exchange of Securities................................43
SECTION 10.06. Trustee Protected....................................................44
ARTICLE XI
Miscellaneous
SECTION 11.01. Trust Indenture Act Controls.........................................44
SECTION 11.02. Notices..............................................................44
SECTION 11.03. Communication by Noteholders with Other Noteholders..................45
SECTION 11.04. Certificate and Opinion as to Conditions Precedent...................45
SECTION 11.05. Statements Required in Certificate or Opinion........................45
SECTION 11.06. Rules by Trustee and Agents..........................................46
SECTION 11.07. Legal Holidays.......................................................46
SECTION 11.08. No Recourse Against Others...........................................46
SECTION 11.09. Counterparts.........................................................46
SECTION 11.10. Variable Provisions..................................................46
SECTION 11.11. GOVERNING LAW........................................................47
SECTION 11.12. No Adverse Interpretation of Other Agreements........................47
SECTION 11.13. Successors...........................................................47
SECTION 11.14. Severability.........................................................47
SECTION 11.15. Table of Contents, Headings, Etc.....................................47
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EXHIBIT A FORM OF CONVERTIBLE NOTE.....................................A-1
EXHIBIT B FORM OF REGISTRATION AGREEMENT...............................B-1
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INDENTURE dated as of April 14, 1998 between Sabratek Corporation, a
Delaware corporation (the "Company"), and LaSalle National Bank, as trustee (the
"Trustee").
Each party agrees as follows for the benefit of the other party and for
the equal and ratable benefit of the Noteholders of the Company's 6% Convertible
Notes Due 2005 (the "Securities"):
ARTICLE I
Definitions and Incorporation by Reference
SECTION 1.01. Definitions. "Affiliate" of any specified person means
any other person directly or indirectly controlling or controlled by or under
direct or indirect common control with such specified person. For the purposes
of this definition, "control" (including, with correlative meanings, the terms
"controlling", "controlled by" and "under common control with"), as used with
respect to any person, shall mean the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of such
person, whether through the ownership of voting securities or by agreement or
otherwise.
"Agent" means any Registrar, Paying Agent or Conversion Agent.
"Board of Directors" means the Board of Directors of the Company or any
authorized committee of the Board.
"Board Resolution" means a copy of a resolution of the Board of
Directors certified by the Secretary or an Assistant Secretary of the Company to
be in full force and effect on the date of such certification and delivery to
the Trustee.
"Business Day" means any day that is not a Legal Holiday.
"Capital Stock" means any and all shares, interests, participations,
rights or other equivalents (however designated) of equity interests in any
entity, including, without limitation, corporate stock and partnership
interests.
"Change of Control" means any event where: (i) any "person" or "group"
(as such terms are used in Section 13(d) and 14(d) of the Exchange Act) is or
becomes the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the
Exchange Act) of shares representing more than 50% of the combined voting power
of the then-outstanding securities entitled to vote generally in elections of
directors of the Company ("Voting Stock"), (ii) the Company consolidates with or
merges into any other corporation, or any other person merges into the Company,
and, in the case of any such transaction, the outstanding Common Stock of the
Company is reclassified into or exchanged for any other property or security,
unless the stockholders of the Company immediately before such transaction own,
directly or indirectly
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immediately following such transaction, at least a majority of the combined
voting power of the outstanding voting securities of the corporation resulting
from such transaction in substantially the same proportion as their ownership of
the Voting Stock immediately before such transaction, (iii) the Company conveys,
transfers or leases all or substantially all of its assets to any person (other
than to one or more wholly-owned subsidiaries of the Company) or (iv) any time
the Continuing Directors do not constitute a majority of the Board of Directors
of the Company (or, if applicable, a successor corporation to the Company).
"Common Stock" means the common stock of the Company as the same exists
at the date of the execution of this Indenture or as such stock may be
constituted from time to time.
"Company" means the party named as such above until a successor
replaces it in accordance with Article VII and thereafter means the successor.
"Continuing Directors" means as of any date of determination, any
member of the Board of Directors of the Company who (i) was a member of such
Board of Directors on the date of this Indenture or (ii) was nominated for
election or elected to such Board of Directors with the approval of a majority
of the Continuing Directors who were members of such board at the time of such
nomination or election.
"Daily Market Price" means the price of a share of Common Stock on the
relevant date, determined (a) on the basis of the last reported sale price
regular way of the Common Stock as reported on the Nasdaq Stock Market's
National Market (the "NNM"), or if the Common Stock is not then listed on the
NNM, as reported on such national securities exchange upon which the Common
Stock is listed, or (b) if there is no such reported sale on the day in
question, on the basis of the average of the closing bid and asked quotations
regular way as so reported, or (c) if the Common Stock is not listed on the NNM
or on any national securities exchange, on the basis of the average of the high
bid and low asked quotations regular way on the day in question in the
over-the-counter market as reported by the National Association of Securities
Dealers Automated Quotation System, or if not so quoted, as reported by National
Quotation Bureau, Incorporated, or a similar organization.
"Default" means any event that is, or with the passage of time or the
giving of notice or both, would be an Event of Default.
"Depositary" means The Depository Trust Company, its nominees and their
respective successors.
"Designated Event" means the occurrence of a Change of Control or a
Termination of Trading.
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"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as approved by a significant segment of the accounting profession
within the United States, which are in effect from time to time.
"Global Securities Legend" means the legend labeled as such and that is
set forth in Exhibit A hereto.
"Guarantee" means a guarantee (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), direct or
indirect, in any manner (including, without limitation, letters of credit and
reimbursement agreements in respect thereof), of all or any part of any
Indebtedness.
"Indebtedness" means, with respect to any person, all obligations,
whether or not contingent, of such person (i)(a) for borrowed money (including,
but not limited to, any indebtedness secured by a security interest, mortgage or
other lien on the assets of such person which is (1) given to secure all or part
of the purchase price of property subject thereto, whether given to the vendor
of such property or to another, or (2) existing on property at the time of
acquisition thereof), (b) evidenced by a note, debenture, bond or written
instrument, (c) under a lease required to be capitalized on the balance sheet of
the lessee under GAAP or under any lease or related document (including a
purchase agreement) which provides that such person is contractually obligated
to purchase or to cause a third party to purchase such leased property, (d) in
respect of letters of credit, bank guarantees or bankers' acceptances (including
reimbursement obligations with respect to any of the foregoing), (e) with
respect to Indebtedness secured by a mortgage, pledge, lien, encumbrance, charge
or adverse claim affecting title or resulting in an encumbrance to which the
property or assets of such person are subject, whether or not the obligation
secured thereby shall have been assumed or Guaranteed by or shall otherwise be
such person's legal liability, (f) in respect of the balance of the deferred and
unpaid purchase price of any property or assets, and (g) under interest rate or
currency swap agreements, cap, floor and collar agreements, spot and forward
contracts and similar agreements and arrangements; (ii) with respect to any
obligation of others of the type described in the preceding clause (i) or under
clause (iii) below assumed by or guaranteed in any manner by such person or in
effect guaranteed by such person through an agreement to purchase (including,
without limitation, "take or pay" and similar arrangements), contingent or
otherwise (and the obligations of such person under any such assumptions,
guarantees or other such arrangements); and (iii) any and all deferrals,
renewals, extensions, refinancings and refundings of, or amendments,
modifications or supplements to, any of the foregoing.
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"Indenture" means this Indenture as amended from time to time.
"Initial Purchaser" means Xxxxx Xxxxxx Inc.
"Issuance Date" means the date on which the Securities are first
authenticated and issued.
"Material Subsidiary" means any Subsidiary of the Company which, at the
date of determination, is a "significant subsidiary" as defined in Rule 1-02(w)
of Regulation S-X under the Securities Act and the Exchange Act (as such
Regulation is in effect on the date of determination).
"Noteholder" or "holder" means a person in whose name a Security is
registered.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"Offering Memorandum" means the offering memorandum relating to the
Securities dated April 8, 1998.
"Officers' Certificate" means a certificate signed by two Officers, one
of whom must be the Chairman of the Board, the Chief Executive Officer, the
President, the Chief Financial Officer or the Treasurer of the Company. See
Sections 11.04 and 11.05 hereof.
"Opinion of Counsel" means a written opinion from legal counsel who is
acceptable to the Trustee. The counsel may be an employee of or counsel to the
Company or the Trustee. See Sections 11.04 and 11.05 hereof.
"person" means any individual, corporation, partnership, joint venture,
association, joint stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"principal" of a debt security means the principal of the security.
"Registration Agreement" means the Registration Agreement relating to
the Securities dated April 14, 1998, between the Company and the Initial
Purchaser, a form of which is attached as Exhibit D hereto.
"Restricted Securities Legend" means the legend labeled as such and
that is set forth in Exhibit A hereto.
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"SEC" means the Securities and Exchange Commission.
"Securities" means the Securities described in the preamble above that
are issued, authenticated and delivered under this Indenture.
"Securities Act" means the Securities Act of 1933, as amended.
"Shelf Registration Statement" shall have the meaning set forth in the
Registration Agreement.
"Subsidiary" means any corporation, association or other business
entity of which more than 50% of the total voting power of shares of Capital
Stock entitled (without regard to the occurrence of any contingency) to vote in
the election of directors, managers or trustees thereof is at the time owned or
controlled, directly or indirectly, by any person or one or more of the other
Subsidiaries of that person or a combination thereof.
"Termination of Trading" means an event where the Common Stock (or
other securities into which the Securities are then convertible) is neither
listed for trading on a United States national securities exchange nor approved
for trading on an established automated over-the-counter trading market in the
United States.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code xx.xx.
77aaa-77bbbb) as in effect on the date of execution of this Indenture.
"Trading Day" shall mean (A) if the applicable security is listed or
admitted for trading on the New York Stock Exchange or another national
securities exchange, a day on which the New York Stock Exchange or such other
national securities exchange is open for business, (B) if the applicable
security is quoted on the NNM, a day on which trades may be made thereon or (C)
if the applicable security is not so listed, admitted for trading or quoted, any
day other than a Saturday or Sunday or a day on which banking institutions in
the State of New York are authorized or obligated by law or executive order to
close.
"Trustee" means the party named as such above until a successor
replaces it in accordance with the applicable provisions of this Indenture and
thereafter means the successor.
"Trust Officer" means any officer or assistant officer of the Trustee
assigned by the Trustee to administer this Indenture.
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SECTION 1.02. Other Definitions.
Defined in
Term Section
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"Agent Members" 2.01
"Bankruptcy Law" 7.01
"Cedel Bank" 2.01
"Commencement Date" 3.08
"Conversion Agent" 2.03
"Conversion Date" 5.02
"Conversion Price" 5.01
"Conversion Shares" 5.06
"Current Market Price" 5.06
"Custodian" 7.01
"Designated Event Offer" 4.07
"Designated Event Payment" 4.07
"Designated Event Payment Date" 3.08
"Distribution Date" 5.06
"Distribution Record Date" 5.06
"Excess Payment" 5.06
"Euroclear" 2.01
"Event of Default" 7.01
"Global Security" 2.01
"Legal Holiday" 11.07
"Non-Global Purchasers" 2.01
"Offer Amount" 3.08
"Officer" 11.10
"Paying Agent" 2.03
"Payment Default" 7.01
"Purchase Agreement" 2.01
"Purchase Date" 5.06
"QIBs" 2.01
"Registrar" 2.03
"Regulation S" 2.01
"Rights" 5.06
"Rule 144A" 2.01
"Tender Period" 3.08
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SECTION 1.03. Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following
meanings:
"indenture securities" means the Securities;
"indenture security holder" means a Noteholder;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee; and
"obligor" on the Securities means the Company or any other obligor on
the Securities.
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule under the TIA
have the meanings so assigned to them.
SECTION 1.04. Rules of Construction. Unless the context otherwise
requires:
(a) a term has the meaning assigned to it;
(b) an accounting term not otherwise defined has the meaning assigned
to it in accordance with GAAP consistently applied;
(c) "or" is not exclusive;
(d) words in the singular include the plural, and words in the plural
include the singular; and
(e) provisions apply to successive events and transactions.
ARTICLE II
The Securities
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SECTION 2.01. Form and Dating. The Securities 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 Securities may have notations, 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 Security shall be dated
the date of its authentication. The terms and provisions of the Securities 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.
(a) Global Securities. The Securities are being offered and sold by the
Company pursuant to a Purchase Agreement relating to the Securities, dated April
8, 1998, among the Company and the Initial Purchaser (the "Purchase Agreement").
Securities sold, whether in the United States to Qualified
Institutional Buyers ("QIBs") in reliance on Rule 144A under the Securities Act
("Rule 144A") or in offshore transactions in reliance on Regulation S under the
Securities Act ("Regulation S") shall be issued in the form of one or more
permanent global Securities (each, a "Global Security," and, collectively, the
"Global Securities") in definitive, fully registered form without interest
coupons with the Global Securities Legend and the Restricted Securities Legend
set forth in Exhibit A hereto. The Global Security shall be deposited on behalf
of the purchasers of the Securities represented thereby with the Trustee, at its
Chicago office, as custodian for the Depositary, and registered in the name of
the Depositary or a nominee of the Depositary (and, in the case of Regulation S,
for the accounts of designated agents holding on behalf of the Euroclear System
("Euroclear") or Cedel Bank, societe anonyme ("Cedel Bank")), duly executed by
the Company and authenticated by the Trustee as hereinafter provided. The
aggregate principal amount of the Global Security may from time to time be
increased or decreased by adjustments made on the records of the Trustee and the
Depositary or its nominee as hereinafter provided.
(b) Book-Entry Provisions. This Section 2.01(b) shall apply only to a
Global Security deposited with or on behalf of the Depositary.
The Company shall execute and the Trustee shall, in accordance with
this Section 2.01(b) and the written order of the Company, authenticate and
deliver initially one or more Global Securities that (i) shall be registered in
the name of Cede & Co. or other nominee of such Depositary and (ii) shall be
delivered by the Trustee to such Depositary or pursuant to such
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Depositary's instructions or held by the Trustee as custodian for the Depositary
pursuant to a FAST Balance Certificate Agreement between the Depositary and the
Trustee.
Members of, or participants in, the Depositary ("Agent Members") shall
have no rights under this Indenture with respect to any Global Security held on
their behalf by the Depositary or by the Trustee as the custodian of the
Depositary or under such Global Security, and the Depositary may be treated by
the Company, the Trustee and any agent of the Company or the Trustee as the
absolute owner of such Global Security for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall prevent the Company, the
Trustee or any agent of the Company or the Trustee from giving effect to any
written certification, proxy or other authorization furnished by the Depositary
or impair, as between the Depositary and its Agent Members, the operation of
customary practices of such Depositary governing the exercise of the rights of a
holder of a beneficial interest in any Global Security.
(c) Certificated Securities. Except as provided in Section 2.10, owners
of beneficial interests in Global Securities will not be entitled to receive
physical delivery of certificated Securities.
SECTION 2.02. Execution, Authentication and Delivery. Two Officers
shall sign the Securities for the Company by manual or facsimile signature.
If an Officer whose signature is on a Security no longer holds that
office at the time the Security is authenticated, the Security shall
nevertheless be valid.
A Security shall not be valid until authenticated by the manual
signature of an authorized officer of the Trustee. The signature shall be
conclusive evidence that the Security has been authenticated under this
Indenture.
Upon a written order of the Company signed by two Officers, the Trustee
shall authenticate the Securities for original issue up to an aggregate
principal amount of $97,750,000 and deliver such authenticated securities as
directed in such order. The aggregate principal amount of Securities outstanding
at any time shall not exceed such amount except as provided in Section 2.07.
The Trustee may appoint one or more authenticating agents acceptable to
the Company to authenticate Securities. An authenticating agent may authenticate
Securities whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with the Company or
an Affiliate.
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SECTION 2.03. Registrar, Paying Agent and Conversion Agent. The Company
shall maintain in Chicago, Illinois (i) an office or agency where Securities may
be presented for registration of transfer or for exchange (the "Registrar"),
(ii) an office or agency where Securities may be presented for payment (the
"Paying Agent") and (iii) an office or agency where Securities may be presented
for conversion (the "Conversion Agent"). The Registrar shall keep a register of
the Securities and of their transfer and exchange. The Company has initially
appointed the Trustee as its Registrar, Paying Agent and Conversion Agent in
Chicago. The Company may appoint one or more co-registrars, one or more
additional paying agents and one or more additional conversion agents in such
other locations as it shall determine. The term "Registrar" includes any
co-registrar, the term "Paying Agent" includes any additional paying agent and
the term "Conversion Agent" includes any additional conversion agent. The
Company may change any Paying Agent, Registrar or Conversion Agent without prior
notice to any Noteholder. The Company shall notify the Trustee of the name and
address of any newly-appointed Agent not a party to this Indenture. If the
Company fails to appoint or maintain another entity as Registrar, Paying Agent
or Conversion Agent, the Trustee shall act as such.
SECTION 2.04. Paying Agent to Hold Money in Trust. The Company shall
require each Paying Agent other than the Trustee to agree in writing that the
Paying Agent will hold in trust for the benefit of Noteholders or the Trustee
all money held by the Paying Agent for the payment of principal or interest on
the Securities, and will notify the Trustee of any default by the Company in
making any such payment. While any such default continues, the Trustee may
require a Paying Agent to pay all money held by it to the Trustee. The Company
at any time may require a Paying Agent to pay all money held by it to the
Trustee and to account for any money disbursed by it. Upon payment over to the
Trustee, the Paying Agent (if other than the Company or an Affiliate of the
Company) shall have no further liability for the money. If the Company or an
Affiliate of the Company acts as Paying Agent, it shall segregate and hold in a
separate trust fund for the benefit of the Noteholders all money held by it as
Paying Agent.
SECTION 2.05. Noteholder Lists. The Trustee shall preserve in as
current a form as is reasonably practicable the most recent list available to it
of the names and addresses of Noteholders. If the Trustee is not the Registrar,
the Company shall furnish to the Trustee on or before each interest payment date
and at such other times as the Trustee may request in writing a list in such
form and as of such date as the Trustee may reasonably require of the names and
addresses of Noteholders.
SECTION 2.06. Transfer and Exchange. Where Securities are presented to
the Registrar with a request to register a transfer or to exchange them for an
equal principal amount of Securities of other denominations, such Registrar
shall register the transfer or make the exchange if its requirements for such
transactions are met. To permit registrations of transfers
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and exchanges, the Company shall issue and the Trustee shall authenticate
Securities at the Registrar's request. No service charge shall be made for any
registration of transfer or exchange (except as otherwise expressly permitted
herein), but the Company may require payment of a sum sufficient to cover any
transfer tax or similar governmental charge payable in connection therewith
(other than any such transfer tax or similar governmental charge payable upon
exchanges pursuant to Sections 2.10, 3.06, 3.08, 5.02 or 10.05 hereof).
The Company shall not be required (i) to issue, register the transfer
of, or exchange Securities during a period beginning at the opening of business
15 days before the day of any selection of Securities for redemption under
Section 3.02 hereof and ending at the close of business on the day of selection,
or (ii) to exchange or register the transfer of any Security so selected for
redemption in whole or in part, except the unredeemed portion of any Security
being redeemed in part.
(a) Notwithstanding any provision to the contrary herein, so long as a
Global Security remains outstanding and is held by or on behalf of the
Depositary, transfers of a Global Security, in whole or in part, or of any
beneficial interest therein, shall only be made in accordance with Section
2.01(b) and this Section 2.06(a); provided, however, that beneficial interests
in a Global Security may be transferred to persons who take delivery thereof in
the form of a beneficial interest in the same Global Security in accordance with
the transfer restrictions set forth under the heading "Notice to Investors" in
the Offering Memorandum and the Restricted Securities Legend.
(i) Transfer of Global Security. Transfers of a Global Security shall
be limited to transfers of such Global Security in whole, but not in part,
to nominees of the Depositary or to a successor of the Depositary or such
successor's nominee.
(ii) Other Exchanges. In the event that a Global Security is exchanged
for Securities in definitive registered form pursuant to Section 2.10,
prior to the effectiveness of a Shelf Registration Statement with respect
to such Securities, such Securities may be exchanged only in accordance
with such procedures as may from time to time be adopted by the Company are
(including procedures intended to ensure that such transfers comply with
Rule 144A or Regulation S under the Securities Act, as the case may be).
(b) Except in connection with a Shelf Registration Statement
contemplated by and in accordance with the terms of the Registration Agreement,
if Securities are issued upon the registration of transfer, exchange or
replacement of Securities bearing the Restricted Securities Legend set forth in
Exhibit A hereto, or if a request is made to remove such Restricted Securities
Legend on Securities, the Securities so issued shall bear the Restricted
Securities Legend, or the Restricted Securities Legend shall not be removed, as
the case may be, unless there is delivered
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to the Company such satisfactory evidence, which may include an opinion of
counsel licensed to practice law in the State of New York, as may be reasonably
required by the Company, that neither the legend nor the restrictions on
transfer set forth therein are required to ensure that transfers thereof comply
with the provisions of Rule 144A, Rule 144 or Regulation S under the Securities
Act or that such Securities are not "restricted" within the meaning of Rule 144
under the Securities Act. Upon provision to the Company of such satisfactory
evidence, the Trustee, at the written direction of the Company, shall
authenticate and deliver Securities that do not bear the legend.
(c) Neither the Trustee nor any Agent shall have any responsibility for
any actions taken or not taken by the Depositary.
SECTION 2.07. Replacement Securities. If the holder of a Security
claims that the Security has been lost, destroyed or wrongfully taken or if such
Security is mutilated and is surrendered to the Registrar, the Company shall
issue and the Trustee shall authenticate a replacement Security if the Trustee's
and the Company's requirements (as shall have been previously communicated to
the Trustee in a written letter of standing instruction) are met. If required by
the Trustee, the Registrar or the Company, an indemnity bond must be sufficient
in the judgment of each of the foregoing to protect the Company, the Trustee,
any Agent or any authenticating agent from any loss which any of them may suffer
if a Security is replaced. The Company may charge for its expenses in replacing
a Security.
In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, or is about to be redeemed or
purchased by the Company pursuant to Article III hereof or converted into shares
of Common Stock pursuant to Article V hereof, the Company in its discretion may,
instead of issuing a new Security, pay, redeem or convert such Security, as the
case may be.
Every replacement Security is an additional obligation of the Company.
SECTION 2.08. Outstanding Securities. The Securities outstanding at any
time are all the Securities authenticated by the Trustee except for those
canceled by it, those delivered to it for cancellation, and those described in
this Section as not outstanding.
If a Security is replaced, paid, redeemed or converted pursuant to
Section 2.07 hereof, it ceases to be outstanding unless, in the case of a
replaced Security, the Trustee receives proof satisfactory to it that the
replaced Security is held by a bona fide purchaser.
If Securities are considered paid under Section 4.01 hereof, they cease
to be outstanding and interest on them ceases to accrue.
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A Security does not cease to be outstanding because the Company or an
Affiliate of the Company holds the Security.
SECTION 2.09. Treasury Securities. In determining whether the
Noteholders of the required principal amount of Securities have concurred in any
direction, waiver or consent, Securities owned by the Company or an Affiliate of
the Company shall be considered as though they are not outstanding, except that
for the purposes of determining whether the Trustee shall be protected in
relying on any such direction, waiver or consent, only Securities which a Trust
Officer knows are so owned shall be so disregarded.
SECTION 2.10. Temporary Securities; Exchange of Global Security for
Certificated Securities. (a) Until definitive Securities are ready for delivery,
the Company may prepare and the Trustee shall authenticate temporary Securities.
Temporary Securities shall be substantially in the form of definitive Securities
but may have variations that the Company considers appropriate for temporary
Securities. Without unreasonable delay, the Company shall prepare and the
Trustee shall authenticate definitive Securities in exchange for temporary
Securities.
(b) A Global Security deposited with the Depositary or with the Trustee
as custodian for the Depositary pursuant to Section 2.01 shall be transferred to
the beneficial owners thereof in the form of certificated securities only if (i)
the Depositary notifies the Company that it is unwilling or unable to continue
as Depositary for such Global Security or if at any time such Depositary ceases
to be a "clearing agency" registered under the Exchange Act and a successor
Depositary is not appointed by the Company within 90 days of such notice, or
(ii) an Event of Default has occurred and is continuing.
(c) Any Global Security that is transferable to the beneficial owners
thereof in the form of certificated Securities pursuant to this Section 2.10
shall be surrendered by the Depositary to the Trustee located in Chicago,
Illinois to be so transferred, in whole or from time to time in part, without
charge, and the Trustee shall authenticate and deliver, upon such transfer of
each portion of such Global Security, an equal aggregate principal amount at
maturity of Securities of authorized denominations in the form of certificated
Securities. Any portion of a Global Security transferred pursuant to this
Section shall be executed, authenticated and delivered only in denominations of
$1,000 and any integral multiple thereof and registered in such names as the
Depositary shall direct. Any Securities in the form of certificated Securities
delivered in exchange for an interest in the Global Security shall, except as
otherwise provided by Section 2.06(b), bear the Restricted Securities Legend set
forth in Exhibit A hereto.
(d) Prior to any transfer pursuant to Section 2.10(b), the registered
holder of a Global Security may grant proxies and otherwise authorize any
person, including Agent Members and persons that may hold interests through
Agent
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Members, to take any action which a holder is entitled to take under this
Indenture or the Securities.
(e) In the event of the occurrence of either of the events specified in
Section 2.10(b), the Company will promptly make available to the Trustee a
reasonable supply of certificated Securities in definitive form without interest
coupons.
SECTION 2.11. Cancellation. The Company at any time may deliver
Securities to the Registrar for cancellation. The Registrar, Paying Agent and
Conversion Agent shall forward to the Trustee any Securities surrendered to them
for registration of transfer, redemption, conversion, exchange or payment. The
Trustee shall promptly cancel all Securities surrendered for registration of
transfer, redemption, conversion, exchange, payment, replacement or cancellation
and shall destroy all canceled Securities unless the Company otherwise directs.
The Company may not issue new Securities to replace Securities that it has paid
or that have been delivered to the Registrar for cancellation or that any holder
has converted.
SECTION 2.12. Defaulted Interest. If the Company fails to make a
payment of interest on the Securities, it shall pay such defaulted interest plus
any interest payable on the defaulted interest, in any lawful manner. It may pay
such defaulted interest, plus any such interest payable on it, to the persons
who are Noteholders on a subsequent special record date. The Company shall fix
any such record date and payment date. At least 15 days before any such record
date, the Company shall mail to Noteholders a notice that states the record
date, payment date, and amount of such interest to be paid.
ARTICLE III
Redemption
SECTION 3.01. Notices to Trustee. If the Company elects to redeem
Securities pursuant to Section 3.07 hereof, it shall notify the Trustee of the
redemption date and the principal amount of Securities to be redeemed. The
Company shall give each notice provided for in this Section 3.01 at least 45
days before the redemption date (unless a shorter notice period shall be
satisfactory to the Trustee).
SECTION 3.02. Selection of Securities to be Redeemed. If less than all
the Securities are to be redeemed, the Trustee shall select the Securities to be
redeemed by a method that complies with the requirements of the principal
national securities exchange, if any, on which the Securities are listed, or, if
the Securities are not so listed, on a pro rata basis, by lot or by such other
method as the Trustee considers fair and appropriate. The Trustee shall make the
selection not more than 60 days and not less than 30 days before the redemption
date from
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Securities outstanding not previously called for redemption. The Trustee may
select for redemption portions of the principal of Securities that have
denominations larger than $1,000. Securities and portions of them it selects
shall be in amounts of $1,000 or integral multiples of $1,000. Provisions of
this Indenture that apply to Securities called for redemption also apply to
portions of Securities called for redemption. The Trustee shall notify the
Company promptly of the Securities or portions of Securities to be called for
redemption.
If any Security selected for partial redemption is converted in part
after such selection, the converted portion of such Security shall be deemed (so
far as may be) to be the portion to be selected for redemption. The Securities
(or portions thereof) so selected shall be deemed duly selected for redemption
for all purposes hereof, notwithstanding that any such Security is converted in
whole or in part before the mailing of the notice of redemption. Upon any
redemption of less than all the Securities, the Company and the Trustee may
treat as outstanding any Securities surrendered for conversion during the period
15 days next preceding the mailing of a notice of redemption and need not treat
as outstanding any Security authenticated and delivered during such period in
exchange for the unconverted portion of any Security converted in part during
such period.
SECTION 3.03. Notice of Redemption. At least 30 days but not more than
60 days before a redemption date, the Company shall mail a notice of redemption
to each holder whose Securities are to be redeemed at such holder's registered
address.
The notice shall identify the Securities to be redeemed and shall
state:
(a) the redemption date;
(b) the redemption price;
(c) if any Security is being redeemed in part, the portion of the
principal amount of such Security to be redeemed and that, after the
redemption date, upon cancellation of such Security, a new Security or
Securities in principal amount equal to the unredeemed portion will be
issued in the name of the holder thereof;
(d) the name and address of the Paying Agent;
(e) that Securities called for redemption must be surrendered to the
Paying Agent to collect the redemption price plus accrued interest;
(f) that, unless the Company defaults in making such redemption
payment or the Paying Agent is prohibited from making such payment pursuant
to the terms of this
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Indenture, by law or otherwise, interest on Securities called for
redemption ceases to accrue on and after the redemption date; and
(g) the paragraph of the Securities pursuant to which the Securities
called for redemption are being redeemed.
Such notice shall also state the current Conversion Price and the date
on which the right to convert such Securities or portions thereof into Common
Stock of the Company will expire.
At the Company's request, the Trustee shall give notice of redemption
in the Company's name and at its expense.
SECTION 3.04. Effect of Notice of Redemption. Once notice of redemption
is mailed, Securities called for redemption become due and payable on the
redemption date at the price set forth in the Security.
SECTION 3.05. Deposit of Redemption Price. On or before the redemption
date, the Company shall deposit with the Trustee or the Paying Agent money
sufficient to pay the redemption price of and accrued interest up to but not
including the redemption date on all Securities to be redeemed on that date
(subject to the right of holders of record on the relevant record date to
receive interest due on an interest payment date) unless theretofore converted
into Common Stock pursuant to the provisions hereof. The Trustee or such Paying
Agent shall return to the Company any money not required for that purpose.
SECTION 3.06. Securities Redeemed in Part. Upon surrender of a Security
that is redeemed in part, the Company shall issue and the Trustee shall
authenticate for the holder at the expense of the Company a new Security equal
in principal amount to the unredeemed portion of the Security surrendered.
SECTION 3.07. Optional Redemption. The Company may redeem all or any
portion of the Securities, upon the terms and at the redemption prices set forth
in each of the Securities. Any redemption pursuant to this Section 3.07 shall be
made pursuant to the provisions of Section 3.01 through 3.06 hereof.
SECTION 3.08. Designated Event Offer. (a) In the event that, pursuant
to Section 4.07 hereof, the Company shall commence a Designated Event Offer, the
Company shall follow the procedures in this Section 3.08.
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(b) The Designated Event Offer shall remain open for a period specified
by the Company which shall be no less than 30 calendar days and no more than 60
calendar days following its commencement on the date of the mailing of notice in
accordance with Section 4.07(b) hereof (the "Commencement Date"), except to the
extent that a longer period is required by applicable law (the "Tender Period").
Upon the expiration of the Tender Period (the "Designated Event Payment Date"),
the Company shall purchase the principal amount of Securities required to be
purchased pursuant to Section 4.07 hereof (the "Offer Amount").
(c) If the Designated Event Payment Date is on or after an interest
payment record date and on or before the related interest payment date, any
accrued interest to the related interest payment date will be paid to the person
in whose name a Security is registered at the close of business on such record
date, and no additional interest will be payable to Noteholders who tender
Securities pursuant to the Designated Event Offer.
(d) The Company shall provide the Trustee with written notice of the
Designated Event Offer at least 10 Business Days before the Commencement Date.
(e) Subject to Section 4.07(b), on or before the Commencement Date, the
Company or the Trustee (at the request and expense of the Company) shall send,
by first class mail, a notice to each of the Noteholders, which shall govern
the terms of the Designated Event Offer and shall state:
(i) that the Designated Event Offer is being made pursuant to this
Section 3.08 and Section 4.07 hereof and that all Securities tendered will
be accepted for payment;
(ii) the Offer Amount, the purchase price (as determined in accordance
with Section 4.07 hereof), the length of time the Designated Event Offer
will remain open and the Designated Event Payment Date;
(iii) that any Security or portion thereof not tendered or accepted for
payment will continue to accrue interest;
(iv) that, unless the Company defaults in the payment of the Designated
Event Payment, any Security or portion thereof accepted for payment
pursuant to the Designated Event Offer shall cease to accrue interest after
the Designated Event Payment Date;
(v) that Noteholders electing to have a Security or portion thereof
purchased pursuant to any Designated Event Offer will be required to
surrender the Security, with the form entitled "Option of Noteholder To
Elect Purchase" on the reverse of the Security
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completed, to the Paying Agent at the address specified in the notice prior
to the close of business on the third Business Day preceding the Designated
Event Payment Date;
(vi) that Noteholders will be entitled to withdraw their election if
the Paying Agent receives, not later than the close of business on the
second Business Day preceding the Designated Event Payment Date, or such
longer period as may be required by law, a letter or a telegram, telex,
facsimile transmission (receipt of which is confirmed and promptly followed
by a letter) setting forth the name of the Noteholder, the principal amount
of the Security or portion thereof the Noteholder delivered for purchase
and a statement that such Noteholder is withdrawing his election to have
the Security or portion thereof purchased and specifying the amount of such
Notes (which must be equal to $1,000 in principal amount or an integral
multiple thereof) with respect to which such withdrawal is effective; and
(vii) that Noteholders whose Securities are being purchased only in
part will be issued new Securities equal in principal amount to the
unpurchased portion of the Securities surrendered, which unpurchased
portion must be equal to $1,000 in principal amount or an integral multiple
thereof.
In addition, the notice shall contain all instructions and materials
that the Company shall reasonably deem necessary to enable such Noteholders to
tender Securities pursuant to the Designated Event Offer.
(f) At least one Business Day prior to the Designated Event Payment
Date, the Company shall irrevocably deposit with the Trustee or the Paying Agent
in immediately available funds an amount equal to the Offer Amount to be held
for payment in accordance with the terms of this Section 3.08. On the Designated
Event Payment Date, the Company shall, to the extent lawful, (i) accept for
payment the Securities or portions thereof tendered pursuant to the Designated
Event Offer, (ii) deliver or cause to be delivered to the Trustee Securities so
accepted and (iii) deliver to the Trustee an Officers' Certificate stating such
Securities or portions thereof have been accepted for payment by the Company in
accordance with the terms of this Section 3.08. The Paying Agent shall promptly
(but in any case not later than five calendar days after the Designated Event
Payment Date) mail or deliver to each tendering Noteholder an amount equal to
the purchase price of the Securities tendered by such Noteholder, and the
Trustee shall promptly authenticate and mail or deliver to such Noteholders a
new Security equal in principal amount to any unpurchased portion of the
Security surrendered, if any; provided, that each new Security shall be in a
principal amount of $1,000 or an integral multiple thereof. Any Securities not
so accepted shall be promptly mailed or delivered by or on behalf of the Company
to the holder thereof. The Company will publicly announce the results of
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the Designated Event Offer on, or as soon as practicable after, the Designated
Event Payment Date.
(g) The Designated Event Offer shall be made by the Company in
compliance with all applicable provisions of the Exchange Act, and all
applicable tender offer rules promulgated thereunder, and shall include all
instructions and materials that the Company shall reasonably deem necessary to
enable such Noteholders to tender their Securities.
ARTICLE IV
Covenants
SECTION 4.01. Payment of Securities. The Company shall pay the
principal of and interest on the Securities on the dates and in the manner
provided in the Securities. Principal and interest shall be considered paid on
the date due if the Paying Agent (other than the Company or an Affiliate of the
Company) holds on that date money designated for and sufficient to pay all
principal and interest then due and such Paying Agent is not prohibited from
paying such money to the Noteholders on that date pursuant to the terms of this
Indenture. To the extent lawful, the Company shall pay interest (including
post-petition interest in any proceeding under any Bankruptcy Law) on overdue
installments of interest (without regard to any applicable grace period) at the
rate borne by the Securities, compounded semiannually.
SECTION 4.02. SEC Reports. Whether or not required by the rules and
regulations of the SEC, so long as any Securities are outstanding, the Company
will file with the SEC and furnish to the Trustee and to the holders of
Securities all quarterly and annual financial information required to be
contained in a filing with the SEC on Forms 10-Q and 10-K, including a
"Management's Discussion and Analysis of Financial Conditions and Results of
Operations" and, with respect to annual information only, a report thereon by
the Company's certified independent accountants.
SECTION 4.03. Compliance Certificate. The Company shall deliver to the
Trustee, within 120 days after the end of each fiscal year of the Company, an
Officers' Certificate stating that a review of the activities of the Company and
its subsidiaries during the preceding fiscal year has been made under the
supervision of the signing Officers with a view to determining whether the
Company has kept, observed, performed and fulfilled its obligations under, and
complied with the covenants and conditions contained in, this Indenture, and
further stating, as to each such Officer signing such certificate, that to the
best of such Officer's knowledge the Company has kept, observed, performed and
fulfilled each and every covenant, and complied with the covenants and
conditions contained in this Indenture and is not in default in the performance
or observance of any of the terms, provisions and conditions hereof (or, if a
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Default or Event of Default shall have occurred, describing all such Defaults or
Events of Default of which such Officer may have knowledge) and that to the best
of such Officer's knowledge no event has occurred and remains in existence by
reason of which payments on account of the principal or of interest, if any, on
the Securities are prohibited.
One of the Officers signing such Officers' Certificate shall be either
the Company's principal executive officer, principal financial officer or
principal accounting officer.
The Company will, so long as any of the Securities are outstanding,
deliver to the Trustee, forthwith upon becoming aware of any Default, Event of
Default or default in the performance of any covenant, agreement or condition
contained in this Indenture, an Officers' Certificate specifying such Default,
Event of Default or default.
Immediately upon the occurrence of any event giving rise to an increase
in the interest rate on the Securities in accordance with paragraph 10 of the
form thereof or the termination of any such increase, the Company shall give the
Trustee notice of such increase or termination, of the interest rate borne by
the Securities after giving effect to such increase or termination and of the
event giving rise to such increase or termination (such notice to be contained
in an Officers' Certificate), and prior to receipt of such Officers' Certificate
the Trustee shall be entitled to assume that no such increase or termination has
occurred, as the case may be.
SECTION 4.04. Stay, Extension and Usury Law. The Company covenants (to
the extent that it may lawfully do so) that it will not at any time insist upon,
plead, or in any manner whatsoever claim or take the benefit or advantage of,
any stay, extension or usury law wherever enacted, now or at any time hereafter
in force, which may affect the covenants or the performance of this Indenture;
and the Company (to the extent it may lawfully do so) hereby expressly waives
all benefit or advantage of any such law, and covenants that it will not, by
resort to any such law, hinder, delay or impede the execution of any power
herein granted to the Trustee, but will suffer and permit the execution of every
such power as though no such law has been enacted.
SECTION 4.05. Corporate Existence. Except as provided in Article VII
hereof, the Company will do or cause to be done all things necessary to preserve
and keep in full force and effect its corporate existence and the corporate,
partnership or other existence of each Material Subsidiary of the Company in
accordance with the respective organizational documents of each Material
Subsidiary and the rights (charter and statutory), licenses and franchises of
the Company and its Material Subsidiaries; provided, however, that the Company
shall not be required to preserve any such right, license or franchise, or the
corporate, partnership or other existence of any Material Subsidiary, if the
Board of Directors shall determine that the
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preservation thereof is no longer desirable in the conduct of the business of
the Company and its Subsidiaries taken as a whole and that the loss thereof is
not adverse in any material respect to the Noteholders.
SECTION 4.06. Taxes. The Company shall, and shall cause each of its
Subsidiaries to, pay prior to delinquency all taxes, assessments and
governmental levies, except as contested in good faith and by appropriate
proceedings.
SECTION 4.07. Designated Event. (a) Upon the occurrence of a Designated
Event, each holder of Securities shall have the right, in accordance with this
Section 4.07 and Section 3.08 hereof, to require the Company to repurchase all
or any part (equal to $1,000 or an integral multiple thereof) of such holder's
Securities pursuant to the terms of Section 3.08 (the "Designated Event Offer")
at a purchase price equal to 100% of the principal amount thereof, plus accrued
and unpaid interest thereon to the Designated Event Payment Date (the
"Designated Event Payment").
(b) Within 30 days following any Designated Event, the Company shall
mail to each holder the notice provided by Section 3.08(e).
SECTION 4.08. Investment Company Act. As long as any Notes are
outstanding, the Company will conduct its business and operations so as not to
become an "investment company" within the meaning of the Investment Company Act
of 1940, as amended (the "Investment Company Act"), and will take all steps
required in order for it to continue not to be an "investment company" and not
to be required to be registered under the Investment Company Act, including, if
necessary, redeployment of the assets of the Company.
ARTICLE V
Conversion
SECTION 5.01. Conversion Privilege. A holder of a Security may convert
the principal amount thereof (or any portion thereof that is an integral
multiple of $1,000) into fully paid and nonassessable shares of Common Stock of
the Company at any time after 90 days following the Issuance Date and prior to
the close of business on the Business Day immediately preceding the maturity
date of the Security at the Conversion Price then in effect, except that, with
respect to any Security called for redemption, such conversion right shall
terminate at the close of business on the Business Day immediately preceding the
redemption date (unless the Company shall default in making the redemption
payment when it becomes due, in which case the conversion right shall terminate
on the date such default is cured). The number of shares of Common Stock
issuable upon conversion of a Security is determined by dividing the principal
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amount of the Security converted by the conversion price in effect on the
Conversion Date (the "Conversion Price").
The initial Conversion Price is stated in paragraph 9 of the Securities
and is subject to adjustment as provided in this Article V.
Provisions of this Indenture that apply to conversion of all of a
Security also apply to conversion of a portion of it. A holder of Securities is
not entitled to any rights of a holder of Common Stock until such holder of
Securities has converted such Securities into Common Stock, and only to the
extent that such Securities are deemed to have been converted into Common Stock
under this Article V.
SECTION 5.02. Conversion Procedure. To convert a Security, a holder
must satisfy the requirements in paragraph 9 of the Securities. The date on
which the holder satisfies all of those requirements is the conversion date (the
"Conversion Date"). As soon as practicable after the Conversion Date, the
Company shall deliver to the holder through the Conversion Agent a certificate
for the number of whole shares of Common Stock issuable upon the conversion and
a check for any fractional share determined pursuant to Section 5.03. The person
in whose name the certificate is registered shall become the stockholder of
record on the Conversion Date and, as of such date, such person's rights as a
Noteholder with respect to the converted Security shall cease; provided,
however, that no surrender of a Security on any date when the stock transfer
books of the Company shall be closed shall be effective to constitute the person
entitled to receive the shares of Common Stock upon such conversion as the
stockholder of record of such shares of Common Stock on such date, but such
surrender shall be effective to constitute the person entitled to receive such
shares of Common Stock as the stockholder of record thereof for all purposes at
the close of business on the next succeeding day on which such stock transfer
books are open; provided further, however, that such conversion shall be at the
Conversion Price in effect on the date that such Security shall have been
surrendered for conversion, as if the stock transfer books of the Company had
not been closed.
No payment or adjustment will be made for accrued and unpaid interest
on a converted Security or for dividends or distributions on shares of Common
Stock issued upon conversion of a Security, but if any holder surrenders a
Security for conversion after the close of business on the record date for the
payment of an installment of interest and prior to the opening of business on
the next interest payment date, then, notwithstanding such conversion, the
interest payable on such interest payment date shall be paid to the holder of
such Security on such record date. In such event, unless such Security has been
called for redemption on or prior to such interest payment date, such Security,
when surrendered for conversion, must be accompanied by payment in funds
acceptable to the Company of an amount equal to the interest payable on such
interest payment date on the portion so converted.
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If a holder converts more than one Security at the same time, the
number of whole shares of Common Stock issuable upon the conversion shall be
based on the total principal amount of Securities converted.
Upon surrender of a Security that is converted in part, the Trustee
shall authenticate for the holder a new Security equal in principal amount to
the unconverted portion of the Security surrendered.
SECTION 5.03. Fractional Shares. The Company will not issue fractional
shares of Common Stock upon conversion of a Security. In lieu thereof, the
Company will pay an amount in cash based upon the Daily Market Price of any such
fractional shares of Common Stock on the trading day prior to the date of
conversion.
SECTION 5.04. Taxes on Conversion. The issuance of certificates for
shares of Common Stock upon the conversion of any Security shall be made without
charge to the converting Noteholder for such certificates or for any tax in
respect of the issuance of such certificates, and such certificates shall be
issued in the respective names of, or in such names as may be directed by, the
holder or holders of the converted Security; provided, however, that in the
event that certificates for shares of Common Stock are to be issued in a name
other than the name of the holder of the Security converted, such Security, when
surrendered for conversion, shall be accompanied by an instrument of assignment
or transfer, in form satisfactory to the Company, duly executed by the
registered holder thereof or his duly authorized attorney; and provided further,
however, that the Company shall not be required to pay any tax which may be
payable in respect of any transfer involved in the issuance and delivery of any
such certificates in a name other than that of the holder of the converted
Security, and the Company shall not be required to issue or deliver such
certificates unless or until the person or persons requesting the issuance
thereof shall have paid to the Company the amount of such tax or shall have
established to the satisfaction of the Company that such tax has been paid or is
not applicable.
SECTION 5.05. Company to Provide Stock. The Company shall at all times
reserve and keep available, free from preemptive rights, out of its authorized
but unissued Common Stock, solely for the purpose of issuance upon conversion of
Securities as herein provided, a sufficient number of shares of Common Stock to
permit the conversion of all outstanding Securities for shares of Common Stock.
All shares of Common Stock which may be issued upon conversion of the
Securities shall be duly authorized, validly issued, fully paid and
nonassessable when so issued.
SECTION 5.06. Adjustment of Conversion Price. The Conversion Price
shall be subject to adjustment from time to time as follows:
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(a) In case the Company shall (1) pay a dividend in shares of Common
Stock to holders of Common Stock, (2) make a distribution in shares of Common
Stock to holders of Common Stock, (3) subdivide its outstanding shares of Common
Stock into a greater number of shares of Common Stock or (4) combine its
outstanding shares of Common Stock into a smaller number of shares of Common
Stock, the Conversion Price in effect immediately prior to such action shall be
adjusted so that the holder of any Security thereafter surrendered for
conversion shall be entitled to receive the number of shares of Common Stock
which he would have owned immediately following such action had such Securities
been converted immediately prior thereto. Any adjustment made pursuant to this
subsection (a) shall become effective immediately after the record date in the
case of a dividend or distribution and shall become effective immediately after
the effective date in the case of a subdivision or combination.
(b) In case the Company shall issue rights or warrants to substantially
all holders of Common Stock entitling them (for a period commencing no earlier
than the record date for the determination of holders of Common Stock entitled
to receive such rights or warrants and expiring not more than 45 days after such
record date) to subscribe for or purchase shares of Common Stock (or securities
convertible into Common Stock) at a price per share less than the Current Market
Price (as determined pursuant to subsection (f) below) of the Common Stock on
such record date, the Conversion Price shall be adjusted so that the same shall
equal the price determined by multiplying the Conversion Price in effect
immediately prior to such record date by a fraction of which the numerator shall
be the number of shares of Common Stock outstanding on such record date, plus
the number of shares of Common Stock which the aggregate offering price of the
offered shares of Common Stock (or the aggregate conversion price of the
convertible securities so offered) would purchase at such Current Market Price,
and of which the denominator shall be the number of shares of Common Stock
outstanding on such record date plus the number of additional shares of Common
Stock offered (or into which the convertible securities so offered are
convertible). Such adjustments shall become effective immediately after such
record date.
(c) In case the Company shall distribute to all holders of Common Stock
shares of any class of Capital Stock of the Company other than Common Stock,
evidences of indebtedness or other assets (other than cash dividends out of
current or retained earnings), or shall distribute to substantially all holders
of Common Stock rights or warrants to subscribe for securities (other than those
Securities referred to in subsection (b) above), then in each such case the
Conversion Price shall be adjusted so that the same shall equal the price
determined by multiplying the Conversion Price in effect immediately prior to
the date of such distribution by a fraction of which the numerator shall be the
Current Market Price (determined as provided in subsection (f) below) of the
Common Stock on the record date mentioned below less the then fair market value
(as determined by the Board of Directors, whose determination shall be
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conclusive evidence of such fair market value and described in a Board
Resolution) of the portion of the assets so distributed or of such subscription
rights or warrants applicable to one share of Common Stock, and of which the
denominator shall be such Current Market Price of the Common Stock. Such
adjustment shall become effective immediately after the record date for the
determination of the holders of Common Stock entitled to receive such
distribution. Notwithstanding the foregoing, in case the Company shall issue
rights or warrants to subscribe for additional shares of the Company's capital
stock (other than those referred to in subsection (b) above) ("Rights") to
substantially all holders of Common Stock, the Company may, in lieu of making
any adjustment pursuant to this Section 5.06, make proper provision so that each
holder of a Security who converts such Security (or any portion thereof) after
the record date for such distribution and prior to the expiration or redemption
of the Rights shall be entitled to receive upon such conversion, in addition to
the shares of Common Stock issuable upon such conversion (the "Conversion
Shares"), a number of Rights to be determined as follows: (i) if such conversion
occurs on or prior to the date for the distribution to the holders of Rights of
separate certificates evidencing such Rights (the "Distribution Date"), the same
number of Rights to which a holder of a number of shares of Common Stock equal
to the number of Conversion Shares is entitled at the time of such conversion in
accordance with the terms and provisions of and applicable to the Rights; and
(ii) if such conversion occurs after the Distribution Date, the same number of
Rights to which a holder of the number of shares of Common Stock into which the
principal amount of the Security so converted was convertible immediately prior
to the Distribution Date would have been entitled on the Distribution Date in
accordance with the terms and provisions of and applicable to the Rights.
(d) In case the Company shall, by dividend or otherwise, at any time
distribute to all holders of its Common Stock cash (including any distributions
of cash out of current or retained earnings of the Company but excluding any
cash that is distributed as part of a distribution requiring a Conversion Price
adjustment pursuant to paragraph (c) of this Section) in an aggregate amount
that, together with the sum of (x) the aggregate amount of any other
distributions to all holders of its Common Stock made in cash plus (y) all
Excess Payments, in each case made within the 12 months preceding the date fixed
for determining the stockholders entitled to such distribution (the
"Distribution Record Date") and in respect of which no Conversion Price
adjustment pursuant to paragraphs (c) or (e) of this Section or this paragraph
(d) has been made, exceeds 15% of the product of the Current Market Price per
share (determined as provided in paragraph (f) of this Section) of the Common
Stock on the Distribution Record Date multiplied by the number of shares of
Common Stock outstanding on the Distribution Record Date (excluding shares held
in the treasury of the Company), the Conversion Price shall be reduced so that
the same shall equal the price determined by multiplying such Conversion Price
in effect immediately prior to the effectiveness of the Conversion Price
reduction contemplated by this paragraph (d) by a fraction of which the
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numerator shall be the Current Market Price per share (determined as provided in
paragraph (f) of this Section) of the Common Stock on the Distribution Record
Date less the amount of such cash and other consideration (including any Excess
Payments) so distributed applicable to one share of Common Stock (equal to the
aggregate amount of such cash and other consideration (including any Excess
Payments) divided by the number of shares of Common Stock outstanding on the
Distribution Record Date) and the denominator shall be such Current Market Price
per share (determined as provided in paragraph (f) of this Section) of the
Common Stock on the Distribution Record Date, such reduction to become effective
immediately prior to the opening of business on the day following the
Distribution Record Date.
(e) In case a tender offer or other negotiated transaction made by the
Company or any Subsidiary of the Company for all or any portion of the Common
Stock shall be consummated, if an Excess Payment is made in respect of such
tender offer or other negotiated transaction and the amount of such Excess
Payment, together with the sum of (x) the aggregate amount of all Excess
Payments plus (y) the aggregate amount of all distributions to all holders of
the Common Stock made in cash (including any distributions of cash out of
current or retained earnings of the Company), in each case made within the 12
months preceding the date of payment of such current negotiated transaction
consideration or expiration of such current tender offer, as the case may be
(the "Purchase Date"), and as to which no adjustment pursuant to paragraph (c)
or paragraph (d) of this Section or this paragraph (e) has been made, exceeds
15% of the product of the Current Market Price per share (determined as provided
in paragraph (f) of this Section) of the Common Stock on the Purchase Date
multiplied by the number of shares of Common Stock outstanding (including any
tendered shares but excluding any shares held in the treasury of the Company or
any Subsidiary of the Company) on the Purchase Date, the Conversion Price shall
be reduced so that the same shall equal the price determined by multiplying such
Conversion Price in effect immediately prior to the effectiveness of the
Conversion Price reduction contemplated by this paragraph (e) by a fraction of
which the numerator shall be the Current Market Price per share (determined as
provided in paragraph (f) of this Section) of the Common Stock on the Purchase
Date less the amount of such Excess Payments and such cash distributions, if
any, applicable to one share of Common Stock (equal to the aggregate amount of
such Excess Payments and such cash distributions divided by the number of shares
of Common Stock outstanding on the Purchase Date) and the denominator shall be
such Current Market Price per share (determined as provided in paragraph (f) of
this Section) of the Common Stock on the Purchase Date, such reduction to become
effective immediately prior to the opening of business on the day following the
Purchase Date.
(f) The "Current Market Price" per share of Common Stock on any date
shall be deemed to be the average of the Daily Market Prices for the shorter of
(i) 30 consecutive Business Days ending on the last full Trading Day on the
exchange or market referred to in
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determining such Daily Market Prices prior to the time of determination or (ii)
the period commencing on the date next succeeding the first public announcement
of the issuance of such rights or such warrants or such other distribution or
such negotiated transaction through such last full trading day on the exchange
or market referred to in determining such Daily Market Prices prior to the time
of determination.
(g) "Excess Payment" means the excess of (A) the aggregate of the cash
and fair market value of other consideration paid by the Company or any of its
Subsidiaries with respect to the shares acquired in a tender offer or other
negotiated transaction over (B) the Daily Market Price on the Trading Day
immediately following the completion of such tender offer or other negotiated
transaction multiplied by the number of acquired shares.
(h) In any case in which this Section 5.06 shall require that an
adjustment be made immediately following a record date for an event, the Company
may elect to defer, until such event, issuing to the holder of any Security
converted after such record date the shares of Common Stock and other Capital
Stock of the Company issuable upon such conversion over and above the shares of
Common Stock and other Capital Stock of the Company issuable upon such
conversion only on the basis of the Conversion Price prior to adjustment; and,
in lieu of the shares the issuance of which is so deferred, the Company shall
issue or cause its transfer agents to issue due bills or other appropriate
evidence of the right to receive such shares.
SECTION 5.07. No Adjustment. No adjustment in the Conversion Price
shall be required until cumulative adjustments amount to 1% or more of the
Conversion Price as last adjusted; provided, however, that any adjustments which
by reason of this Section 5.07 are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All calculations
under this Article V shall be made to the nearest cent or to the nearest
one-hundredth of a share, as the case may be. No adjustment need be made for
rights to purchase Common Stock pursuant to a Company plan for reinvestment of
dividends or interest. No adjustment need be made for a change in the par value
or no par value of the Common Stock.
SECTION 5.08. Other Adjustments. (a) In the event that, as a result of
an adjustment made pursuant to Section 5.06 above, the holder of any Security
thereafter surrendered for conversion shall become entitled to receive any
shares of Capital Stock of the Company other than shares of its Common Stock,
thereafter the Conversion Price of such other shares so receivable upon
conversion of any Securities shall be subject to adjustment from time to time in
a manner and on terms as nearly equivalent as practicable to the provisions with
respect to Common Stock contained in this Article V.
(b) In the event that shares of Common Stock are not delivered after
the expiration of any of the rights or warrants referred to in Section 5.06(b)
and Section 5.06(c)
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hereof, the Conversion Price shall be readjusted to the Conversion Price which
would otherwise be in effect had the adjustment made upon the issuance of such
rights or warrants been made on the basis of delivery of only the number of
shares of Common Stock actually delivered.
SECTION 5.09. Adjustments for Tax Purposes. The Company may, at its
option, make such reductions in the Conversion Price, in addition to those
required by Section 5.06 above, as it determines to be advisable in order that
any stock dividend, subdivision of shares, distribution of rights to purchase
stock or securities or distribution of securities convertible into or
exchangeable for stock made by the Company to its stockholders will not be
taxable to the recipients thereof.
SECTION 5.10. Adjustments by the Company. The Company from time to time
may, to the extent permitted by law, reduce the Conversion Price by any amount
for any period of at least 20 days, in which case the Company shall give at
least 15 days' notice of such reduction in accordance with Section 5.11, if the
Board of Directors has made a determination that such reduction would be in the
best interests of the Company, which determination shall be conclusive.
SECTION 5.11. Notice of Adjustment. Whenever the Conversion Price is
adjusted, the Company shall promptly mail to Noteholders at the addresses
appearing on the Registrar's books a notice of the adjustment and file with the
Trustee an Officers' Certificate briefly stating the facts requiring the
adjustment and the manner of computing it. The certificate shall be conclusive
evidence of the correctness of such adjustment.
SECTION 5.12. Notice of Certain Transactions. In the event that:
(1) the Company takes any action which would require an adjustment in
the Conversion Price;
(2) the Company takes any action that would require a supplemental
indenture pursuant to Section 5.13; or
(3) there is a dissolution or liquidation of the Company;
a holder of a Security may wish to convert such Security into shares of Common
Stock prior to the record date for or the effective date of the transaction so
that he may receive the rights, warrants, securities or assets which a holder of
shares of Common Stock on that date may receive. Therefore, the Company shall
mail to Noteholders at the addresses appearing on the Registrar's books and the
Trustee a notice stating the proposed record or effective date, as the case may
be. The Company shall mail the notice at least 15 days before such date;
however,
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failure to mail such notice or any defect therein shall not affect the validity
of any transaction referred to in clause (1), (2) or (3) of this Section 5.12.
SECTION 5.13. Effect of Reclassifications, Consolidations, Mergers or
Sales on Conversion Privilege. If any of the following shall occur, namely: (i)
any reclassification or change of outstanding shares of Common Stock issuable
upon conversion of Securities (other than a change in par value, or from par
value to no par value, or from no par value to par value, or as a result of a
subdivision or combination), (ii) any consolidation or merger to which the
Company is a party other than a merger in which the Company is the continuing
corporation and which does not result in any reclassification of, or change
(other than a change in name, or 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) in, outstanding shares of Common Stock or (iii) any sale or
conveyance of all or substantially all of the property or business of the
Company as an entirety, then the Company, or such successor or purchasing
corporation, as the case may be, shall, as a condition precedent to such
reclassification, change, consolidation, merger, sale or conveyance, execute and
deliver to the Trustee a supplemental indenture in form satisfactory to the
Trustee providing that the holder of each Security then outstanding shall have
the right to convert such Security into the kind and amount of shares of stock
and other securities and property (including cash) receivable upon such
reclassification, change, consolidation, merger, sale or conveyance by a holder
of the number of shares of Common Stock deliverable upon conversion of such
Security immediately prior to such reclassification, change, consolidation,
merger, sale or conveyance. Such supplemental indenture shall provide for
adjustments of the Conversion Price which shall be as nearly equivalent as may
be practicable to the adjustments of the Conversion Price provided for in this
Article V. The foregoing, however, shall not in any way affect the right a
holder of a Security may otherwise have, pursuant to clause (ii) of the last
sentence of subsection (c) of Section 5.06, to receive Rights upon conversion of
a Security. If, in the case of any such consolidation, merger, sale or
conveyance, the stock or other securities and property (including cash)
receivable thereupon by a holder of Common Stock includes shares of stock or
other securities and property of a corporation other than the successor or
purchasing corporation, as the case may be, in such consolidation, merger, sale
or conveyance, then such supplemental indenture shall also be executed by such
other corporation and shall contain such additional provisions to protect the
interests of the holders of the Securities as the Board of Directors of the
Company shall reasonably consider necessary by reason of the foregoing. The
provision of this Section 5.13 shall similarly apply to successive
consolidations, mergers, sales or conveyances.
In the event the Company shall execute a supplemental indenture
pursuant to this Section 5.13, the Company shall promptly file with the Trustee
an Officers' Certificate briefly stating the reasons therefor, the kind or
amount of shares of stock or securities or property (including cash) receivable
by holders of the Securities upon the conversion of their Securities
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after any such reclassification, change, consolidation, merger, sale or
conveyance and any adjustment to be made with respect thereto.
SECTION 5.14. Trustee's Disclaimer. The Trustee has no duty to
determine when an adjustment under this Article V should be made, how it should
be made or what such adjustment should be, but may accept as conclusive evidence
of the correctness of any such adjustment, and shall be protected in relying
upon the Officers' Certificate with respect thereto which the Company is
obligated to file with the Trustee pursuant to Section 5.11. The Trustee makes
no representation as to the validity or value of any securities or assets issued
upon conversion of Securities, and the Trustee shall not be responsible for the
Company's failure to comply with any provisions of this Article V.
The Trustee shall not be under any responsibility to determine the
correctness of any provisions contained in any supplemental indenture executed
pursuant to Section 5.13, but may accept as conclusive evidence of the
correctness thereof, and shall be protected in relying upon, the Officers'
Certificate with respect thereto which the Company is obligated to file with the
Trustee pursuant to Section 5.13.
ARTICLE VI
Successors
SECTION 6.01. Merger, Consolidation or Sale of Assets. The Company may
not consolidate or merge with or into any person (whether or not the Company is
the surviving corporation), or sell, assign, transfer, lease, convey or
otherwise dispose of all or substantially all of its properties or assets
unless:
(a) the Company is the surviving corporation or the Person formed by or
surviving any such consolidation or merger (if other than the Company) or to
which such sale, assignment, transfer, lease, conveyance or other
disposition shall have been made is a corporation organized or existing
under the laws of the United States, any state thereof or the District of
Columbia;
(b) the corporation formed by or surviving any such consolidation or
merger (if other than the Company) or the corporation to which such sale,
assignment, transfer, lease, conveyance or other disposition will have been
made assumes all the Obligations of the Company, pursuant to a supplemental
indenture in a form reasonably satisfactory to the Trustee, under the
Securities and the Indenture;
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(c) any such sale, assignment, transfer, lease, conveyance or other
disposition of all or substantially all of the Company's properties or
assets shall be as an entirety or virtually as an entirety to one
corporation;
(d) immediately after such transaction no Default or Event of Default
exists; and
(e) the Company or such corporation shall have delivered to the Trustee
an Officers' Certificate and an Opinion of Counsel, each stating that such
transaction and the supplemental indenture comply with the Indenture and
that all conditions precedent in the Indenture relating to such transaction
have been satisfied.
SECTION 6.02. Successor Corporation Substituted. Upon any consolidation
or merger, or any sale, assignment, transfer, lease, conveyance or other
disposition of all or substantially all of the assets of the Company in
accordance with Section 6.01 hereof, the successor corporation formed by such
consolidation or into or with which the Company is merged or the corporation to
which such sale, assignment, transfer, lease, conveyance or other disposition 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 has been named as the Company herein; provided, however, that
the predecessor Company in the case of a sale, assignment, transfer, lease,
conveyance or other disposition shall not be released from the obligation to pay
the principal of and interest on the Securities.
ARTICLE VII
Defaults and Remedies
SECTION 7.01. Events of Default. An "Event of Default" occurs if:
(a) the Company defaults in the payment of interest on any Security
when the same becomes due and payable, and the Default continues for a
period of 30 days after the date due and payable;
(b) the Company defaults in the payment of the principal of any
Security when the same becomes due and payable at maturity, upon redemption
or otherwise;
(c) the Company fails to observe or perform any covenant or agreement
contained in Section 4.07 hereof;
(d) the Company fails to observe or perform any other covenant or
agreement contained in this Indenture or the Securities required by it to be
performed and the
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Default continues for a period of 60 days after the receipt of written
notice from the Trustee to the Company or from the holders of 25% in
aggregate principal amount of the then outstanding Securities to the Company
and the Trustee stating that such notice is a "Notice of Default";
(e) there is a default under any mortgage, indenture or instrument
under which there may be issued or by which there may be secured or
evidenced any Indebtedness for money borrowed by the Company or any Material
Subsidiary of the Company (or the payment of which is guaranteed by the
Company or any Material Subsidiary of the Company), whether such
Indebtedness or guarantee now exists or is created after the Issuance Date,
which default (i) is caused by a failure to pay when due principal of or
interest on such Indebtedness within the grace period provided for in such
Indebtedness (which failure continues beyond any applicable grace period) (a
"Payment Default") or (ii) results in the acceleration of such Indebtedness
prior to its express maturity (without such acceleration being rescinded or
annulled) and, in each case, the principal amount of any such Indebtedness,
together with the principal amount of any other such Indebtedness under
which there is a Payment Default or the maturity of which has been so
accelerated, aggregates $10 million or more;
(f) a final, non-appealable judgment or final non-appealable judgments
(other than any judgment as to which a reputable insurance company has
accepted full liability) for the payment of money are entered by a court or
courts of competent jurisdiction against the Company or any Material
Subsidiary of the Company and remain undischarged for a period (during which
execution shall not be effectively stayed) of 60 days, provided that the
aggregate of all such judgments exceeds $5 million;
(g) the Company or any Material Subsidiary pursuant to or within the
meaning of any Bankruptcy Law: (i) commences a voluntary case, (ii) consents
to the entry of an order for relief against it in an involuntary case in
which it is the debtor, (iii) consents to the appointment of a Custodian of
it or for all or substantially all of its property, (iv) makes a general
assignment for the benefit of its creditors, or (v) makes the admission in
writing that it generally is unable to pay its debts as the same become due;
or
(h) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that: (i) is for relief against the Company or any
Material Subsidiary of the Company in an involuntary case, (ii) appoints a
Custodian of the Company or any Material Subsidiary of the Company or for
all or substantially all of its property, and the order or decree remains
unstayed and in effect for 60 days or (iii) orders the liquidation of the
Company or any Material Subsidiary of the Company, and the order or decree
remains unstayed and in effect for 60 days.
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The term "Bankruptcy Law" means Title 11, U.S. Code or any similar
Federal or state law for the relief of debtors. The term "Custodian" means any
receiver, trustee, assignee, liquidator or similar official under any Bankruptcy
Law.
SECTION 7.02. Acceleration. If an Event of Default (other than an Event
of Default specified in clauses (g) and (h) of Section 7.01 hereof) occurs and
is continuing, the Trustee by notice to the Company, or the Noteholders of at
least 25% in principal amount of the then-outstanding Securities by notice to
the Company and the Trustee, may declare all the Securities to be due and
payable. Upon such declaration, the principal of, premium, if any, and accrued
and unpaid interest on the Securities shall be due and payable immediately. If
an Event of Default specified in clause (g) or (h) of Section 7.01 hereof
occurs, the principal of, premium, if any, and accrued and unpaid interest on
the Securities shall ipso facto become and be immediately due and payable
without any declaration or other act on the part of the Trustee or any
Noteholder. The Noteholders of a majority in aggregate principal amount of the
then-outstanding Securities by notice to the Trustee may rescind an acceleration
and its consequences if the rescission would not conflict with any judgment or
decree, if all amounts payable to the Trustee pursuant to Section 8.07 hereof
have been paid 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.
SECTION 7.03. Other Remedies. If an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy to collect the payment
of principal or interest on the Securities or to enforce the performance of any
provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Securities or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Noteholder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies are
cumulative to the extent permitted by law.
SECTION 7.04. Waiver of Past Defaults. The Noteholders of a majority in
aggregate principal amount of the then-outstanding Securities by notice to the
Trustee may waive an existing Default or Event of Default and its consequences
except a continuing Default or Event of Default in the payment of the Designated
Event Payment or the principal of, or interest on, any Security. When a Default
or Event of Default is waived, it is cured and ceases; but no such waiver shall
extend to any subsequent or other Default or impair any right consequent
thereon.
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SECTION 7.05. Control by Majority. The Noteholders of a majority in
principal amount of the then-outstanding Securities may direct the time, method
and place of conducting any proceeding for any remedy available to the Trustee
or exercising any trust or power conferred on it. However, the Trustee may
refuse to follow any direction that conflicts with law or this Indenture, is
unduly prejudicial to the rights of other Noteholders, or would involve the
Trustee in personal liability.
SECTION 7.06. Limitation on Suits. A Noteholder may pursue a remedy
with respect to this Indenture or the Securities only if:
(a) the Noteholder gives to the Trustee notice of a continuing Event of
Default;
(b) the Noteholders of at least 25% in principal amount of the
then-outstanding Securities make a request to the Trustee to pursue the
remedy;
(c) such Noteholder or Noteholders offer to the Trustee indemnity
satisfactory to the Trustee against any loss, liability or expense;
(d) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer of indemnity; and
(e) during such 60-day period the Noteholders of a majority in
principal amount of the then-outstanding Securities do not give the Trustee
a direction inconsistent with the request.
A Noteholder may not use this Indenture to prejudice the rights of
another Noteholder or to obtain a preference or priority over another
Noteholder.
SECTION 7.07. Rights of Noteholders to Receive Payment. Notwithstanding
any other provision of this Indenture, the right of any Noteholder of a Security
to receive payment of principal and interest on the Security, on or after the
respective due dates expressed in the Security, or to bring suit for the
enforcement of any such payment on or after such respective dates, shall not be
impaired or affected without the consent of the Noteholder made pursuant to this
Section.
SECTION 7.08. Collection Suit by Trustee. If an Event of Default
specified in Section 7.01(a) or (b) occurs and is continuing, the Trustee may
recover judgment in its own name and as trustee of an express trust against the
Company for the whole amount of principal and interest remaining unpaid on the
Securities and interest on overdue principal and interest and such further
amount as shall be sufficient to cover the costs and, to the extent lawful,
expenses of
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collection, including the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel.
SECTION 7.09. Trustee May File Proofs of Claim. The Trustee may file
such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee and the Noteholders allowed
in any judicial proceedings relative to the Company, its creditors or its
property. Nothing contained herein shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Noteholder any plan
of reorganization, arrangement, adjustment or composition affecting the
Securities or the rights of any Noteholder thereof, or to authorize the Trustee
to vote in respect of the claim of any Noteholder in any such proceeding.
SECTION 7.10. Priorities. If the Trustee collects any money pursuant to
this Article, it shall pay out the money in the following order:
First: to the Trustee for amounts due under Section 8.07 hereof;
Second: to the Noteholders, for amounts due and unpaid on the
Securities for principal and interest, ratably, according to the amounts due
and payable on the Securities for principal and interest, respectively; and
Third: to the Company.
Except as otherwise provided in Section 2.12 hereof, the Trustee may
fix a record date and payment date for any payment to Noteholders made pursuant
to this Section.
SECTION 7.11. Undertaking for Costs. In any suit for the enforcement of
any right or remedy under this Indenture or in any suit against the Trustee for
any action taken or omitted by it as a Trustee, a court in its discretion may
require the filing by any party litigant in the suit of an undertaking to pay
the costs of the suit, and the court in its discretion may assess reasonable
costs, including reasonable attorneys' fees, against any party litigant in the
suit, having due regard to the merits and good faith of the claims or defenses
made by the party litigant. This Section does not apply to a suit by the
Trustee, a suit by a holder pursuant to Section 7.07 hereof, or a suit by
Noteholders of more than 10% in principal amount of the then-outstanding
Securities.
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ARTICLE VIII
Trustee
SECTION 8.01. Duties of Trustee. (a) If an Event of Default has
occurred and is continuing, the Trustee shall exercise such of the rights and
powers vested in it by this Indenture, and use the same degree of care and skill
in their exercise, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.
(b) Except during the continuance of an Event of Default: (i) the
Trustee need perform only those duties that are specifically set forth in this
Indenture and no others and (ii) in the absence of bad faith on its part, the
Trustee may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or opinions
furnished to the Trustee and, if required by the terms hereof, conforming to the
requirements of this Indenture. However, the Trustee shall examine the
certificates and opinions to determine whether or not they conform to the
requirements of this Indenture. During the continuance of an event of Default,
the Trustee may consult with its legal counsel and rely upon advice from such
counsel with respect to legal matters.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that: (i) this paragraph does not limit the effect of
paragraph (b) of this Section 8.01; (ii) the Trustee shall not be liable for any
error of judgment made in good faith by a Trust Officer, unless it is proved
that the Trustee was negligent in ascertaining the pertinent facts and (iii) the
Trustee shall not be liable with respect to any action it takes or omits to take
in good faith in accordance with a direction received by it pursuant to Section
7.05 hereof.
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b) and (c) of this Section 8.01.
(e) The Trustee may refuse to perform any duty or exercise any right or
power unless it receives indemnity satisfactory to it against any loss,
liability or expense.
(f) The Trustee shall not be liable for interest on any money received
by it except as the Trustee may agree in writing with the Company. Money held in
trust by the Trustee need not be segregated from other funds except to the
extent required by law.
SECTION 8.02. Rights of Trustee. (a) The Trustee may rely on any
document believed by it to be genuine and to have been signed or presented by
the proper person. The Trustee need not investigate any fact or matter stated in
the document.
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(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel, or both. The Trustee shall not
be liable for any action it takes or omits to take in good faith in reliance on
such Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through agents and shall not be responsible for
the misconduct or negligence of any agent appointed with due care.
(d) The Trustee shall not be liable for any action it takes or omits to
take in good faith which it believes to be authorized or within its rights or
powers.
(e) The Trustee shall not be charged with knowledge of any Event of
Default under subsection (c), (d), (e), (f), (g) or (h) of Section 7.01 unless
either (1) a Trust Officer assigned to its corporate trust department shall have
actual knowledge thereof, or (2) the Trustee shall have received notice thereof
in accordance with Section 11.02 hereof from the Company or any holder.
SECTION 8.03. Individual Rights of Trustee. The Trustee in its
individual or any other capacity may become the owner or pledgee of Securities
and may otherwise deal with the Company or an Affiliate with the same rights it
would have if it were not Trustee. Any Agent may do the same with like rights.
However, the Trustee is subject to Sections 8.10 and 8.11 hereof.
SECTION 8.04. Trustee's Disclaimer. The Trustee makes no representation
as to the validity or adequacy of this Indenture or the Securities, it shall not
be accountable for the Company's use of the proceeds from the Securities, and it
shall not be responsible for any statement of the Company in the Indenture or
any statement in the Securities (other than its authentication) or for
compliance by the Company with the Registration Agreement.
SECTION 8.05. Notice of Defaults. If a Default or Event of Default
occurs and is continuing and if it is known to the Trustee, the Trustee shall
mail to Noteholders a notice of the Default or Event of Default within 90 days
after it occurs. Except in the case of a Default or Event of Default in payment
on any Security, the Trustee may withhold the notice if and so long as a
committee of its Trust Officers in good faith determines that withholding the
notice is in the interests of Noteholders.
SECTION 8.06. Reports by Trustee to Noteholders. Within 60 days after
the reporting date stated in Section 11.10, the Trustee shall mail to
Noteholders a brief report dated as of such reporting date that complies with
TIA Section 313(a) if and to the extent required by such
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Section 313(a). The Trustee also shall comply with TIA Section 313(b)(2). The
Trustee shall also transmit by mail all reports as required by TIA Section
313(c).
A copy of each report at the time of its mailing to Noteholders shall
be filed with the SEC and each stock exchange on which the Securities are
listed. The Company shall notify the Trustee when the Securities are listed on
any stock exchange.
SECTION 8.07. Compensation and Indemnity. The Company shall pay to the
Trustee from time to time reasonable compensation for its services hereunder.
The Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Company shall reimburse the Trustee upon
request for all reasonable disbursements, expenses and advances incurred or made
by it. Such disbursements and expenses may include the reasonable disbursements,
compensation and expenses of the Trustee's agents and counsel.
The Company shall indemnify the Trustee against any loss or liability
incurred by it except as set forth in the next paragraph. Promptly after receipt
by the Trustee under this Section of notice of the commencement of any action,
the Trustee will, if a claim in respect thereof is to be made against the
Company under this Section, notify the Company in writing of the commencement
thereof; but the failure so to notify the Company (i) will not relieve it from
liability unless and to the extent it did not otherwise learn of such action and
such failure results in the forfeiture by the Company of substantial rights and
defenses and (ii) will not, in any event, relieve the Company from any
obligations to the Trustee other than the indemnification obligation provided
above. The Company shall be entitled to appoint counsel of the Company's choice
at the Company's expense to represent the Trustee in any action for which
indemnification is sought (in which case the Company shall not thereafter be
responsible for the fees and expenses of any separate counsel retained by the
Trustee or parties except as set forth below); provided, however, that such
counsel shall be reasonably satisfactory to the Trustee. Notwithstanding the
Company's election to appoint counsel to represent the Trustee in an action, the
Trustee shall have the right to employ separate counsel (including local
counsel), and the Company shall bear the reasonable fees, costs and expenses of
such separate counsel (and local counsel) if (i) the use of counsel chosen by
the Company to represent the Trustee would present such counsel with a conflict
of interest, (ii) the actual or potential defendants in, or targets of, any such
action include both the Trustee and the Company and the Trustee shall have
reasonably concluded that there may be legal defenses available to it which are
different from or additional to those available to the Company, (iii) the
Company shall not have employed counsel satisfactory to the Trustee to represent
the Trustee within a reasonable time after notice of the institution of such
action or (iv) the Company shall authorize the Trustee to employ separate
counsel at the expense of the Company; provided further, that the Company shall
not be responsible for the fees and expenses of more than one separate counsel
(together with
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appropriate local counsel). The Company will not, without the prior written
consent of the Trustee, settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification may be sought hereunder (whether
or not the Trustee is an actual or potential party to such claim or action)
unless such settlement, compromise or consent includes an unconditional release
of the Trustee from all liability arising out of such claim, action, suit or
proceeding.
The Company need not reimburse any expense or indemnify against any
loss or liability incurred by the Trustee through the Trustee's negligence or
bad faith.
To secure the Company's payment obligations in this Section, the
Trustee shall have a lien prior to the Securities on all money or property held
or collected by the Trustee, except money or property held in trust to pay
principal and interest on particular Securities.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 7.01(g) or (h) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.
SECTION 8.08. Replacement of Trustee. A resignation or removal of the
Trustee and appointment of a successor Trustee shall become effective only upon
the successor Trustee's acceptance of appointment as provided in this Section.
The Trustee may resign by so notifying the Company. The Noteholders of
a majority in principal amount of the then-outstanding Securities may remove the
Trustee by so notifying the Trustee and the Company. The Company may remove the
Trustee if:
(a) the Trustee fails to comply with Section 8.10 hereof, unless the
Trustee's duty to resign is stayed as provided in TIA Section 310(b);
(b) the Trustee is adjudged a bankrupt or an insolvent or an order for
relief is entered with respect to the Trustee under any Bankruptcy Law;
(c) a Custodian or public officer takes charge of the Trustee or its
property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the
Noteholders of a majority in principal amount of the then-
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outstanding Securities may appoint a successor Trustee to replace the successor
Trustee appointed by the Company.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Noteholders of at least 10% in principal amount of the then-outstanding
Securities may petition any court of competent jurisdiction for the appointment
of a successor Trustee.
If the Trustee fails to comply with Section 8.10 hereof, unless the
Trustee's duty to resign is stayed as provided in TIA Section 310(b), any
Noteholder who has been a bona fide holder of a Security for at least six months
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Noteholders. The retiring Trustee shall promptly transfer all
property held by it as Trustee to the successor Trustee, subject to the lien
provided for in Section 8.07 hereof. Notwithstanding the resignation or
replacement of the Trustee pursuant to this Section 8.08, the Company's
obligations under Section 8.07 hereof shall continue for the benefit of the
retiring trustee with respect to expenses and liabilities incurred by it prior
to such resignation or replacement.
SECTION 8.09. Successor Trustee by Merger, Etc. If the Trustee
consolidates, merges or converts into, or transfers all or substantially all of
its corporate trust business to, another corporation, the successor corporation
without any further act shall be the successor Trustee.
SECTION 8.10. Eligibility; Disqualification. This Indenture shall
always have a Trustee who satisfies the requirements of TIA Section 310(a)(1)
and (5). The Trustee shall always have a combined capital and surplus as stated
in Section 11.10 hereof. The Trustee is subject to TIA Section 310(b).
SECTION 8.11. Preferential Collection of Claims Against Company. The
Trustee is subject to TIA Section 311(a), excluding any creditor relationship
listed in TIA Section 311(b). A Trustee who has resigned or been removed shall
be subject to TIA Section 311(a) to the extent indicated therein.
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ARTICLE IX
Discharge of Indenture
SECTION 9.01. Termination of Company's Obligations. This Indenture
shall cease to be of further effect (except that the Company's obligations under
Sections 8.07 and 9.02 hereof shall survive) when all outstanding Securities
theretofore authenticated and issued have been delivered to the Trustee for
cancellation and the Company has paid all sums payable hereunder.
Thereupon, the Trustee upon request of the Company, shall acknowledge
in writing the discharge of the Company's obligations under this Indenture,
except for those surviving obligations specified above.
SECTION 9.02. Repayment to Company. The Trustee and the Paying Agent
shall promptly pay to the Company upon request any excess money or securities
held by them at any time.
The Trustee and the Paying Agent shall pay to the Company upon written
request any money held by them for the payment of principal or interest that
remains unclaimed for two years after the date upon which such payment shall
have become due; provided, however, that the Company shall have first caused
notice of such payment to the Company to be mailed to each Noteholder entitled
thereto no less than 30 days prior to such payment. After payment to the
Company, the Trustee and the Paying Agent shall have no further liability with
respect to such money and Noteholders entitled to the money must look to the
Company for payment as general creditors unless any applicable abandoned
property law designates another person.
ARTICLE X
Amendments, Supplements and Waivers
SECTION 10.01. Without Consent of Noteholders. The Company and the
Trustee may amend or supplement this Indenture or the Securities without the
consent of any Noteholder:
(a) to cure any ambiguity, defect or inconsistency;
(b) to comply with Sections 5.13 and 6.01 hereof;
(c) to provide for uncertificated Securities in addition to
certificated Securities;
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(d) to make any change that does not adversely affect the legal rights
hereunder of any Noteholder;
(e) to qualify this Indenture under the TIA or to comply with the
requirements of the SEC in order to maintain the qualification of the
Indenture under the TIA; or
(f) to make any change that provides any additional rights or benefits
to the holders of Securities.
SECTION 10.02. With Consent of Noteholders. Subject to Section 7.07
hereof, the Company and the Trustee may amend or supplement this Indenture or
the Securities with the written consent (including consents obtained in
connection with any tender or exchange offer for Securities) of the Noteholders
of at least a majority in principal amount of the then-outstanding Securities.
Subject to Sections 7.04 and 7.07 hereof, the Noteholders of a majority in
principal amount of the Securities then outstanding may also by their written
consent (including consents obtained in connection with any tender offer or
exchange offer for Securities) waive any existing Default as provided in Section
7.04 or waive compliance in a particular instance by the Company with any
provision of this Indenture or the Securities. However, without the consent of
each Noteholder affected, an amendment, supplement or waiver under this Section
may not (with respect to any Securities held by a nonconsenting Noteholder):
(a) reduce the amount of Securities whose Noteholders must consent to
an amendment, supplement or waiver;
(b) reduce the rate of or change the time for payment of interest on
any Security;
(c) reduce the principal of or change the fixed maturity of any
Security or alter the redemption provisions with respect thereto;
(d) make any Security payable in money other than that stated in the
Security;
(e) make any change in Section 7.04, 7.07 or 10.02 hereof (this
sentence);
(f) waive a default in the payment of the Designated Event Payment or
principal of, or interest on, any Security (other than as provided in
Section 7.04);
(g) waive a redemption payment payable on any Security; or
(h) make any change that adversely affects the right of Noteholders to
convert Securities into Common Stock of the Company.
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To secure a consent of the Noteholders under this Section 10.02, it
shall not be necessary for the Noteholders to approve the particular form of any
proposed amendment, supplement or waiver, but it shall be sufficient if such
consent approves the substance thereof.
After an amendment, supplement or waiver under this Section becomes
effective, the Company shall mail to Noteholders a notice briefly describing the
amendment or waiver.
SECTION 10.03. Compliance with Trust Indenture Act. Every amendment to
this Indenture or the Securities shall be set forth in a supplemental indenture
that complies with the TIA as then in effect.
SECTION 10.04. Revocation and Effect of Consents. Until an amendment,
supplement or waiver becomes effective, a consent to it by a Noteholder of a
Security is a continuing consent by the Noteholder and every subsequent
Noteholder of a Security or portion of a Security that evidences the same debt
as the consenting Noteholder's Security, even if notation of the consent is not
made on any Security. However, any such Noteholder or subsequent Noteholder may
revoke the consent as to such Noteholder's Security or portion of a Security if
the Trustee receives the notice of revocation before the date on which the
Trustee receives an Officers' Certificate certifying that the Noteholders of the
requisite principal amount of Securities have consented to the amendment,
supplement or waiver.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Noteholders entitled to consent to any amendment,
supplement or waiver. If a record date is fixed, then notwithstanding the
provisions of the immediately preceding paragraph, those persons who were
Noteholders at such record date (or their duly designated proxies), and only
those persons, shall be entitled to consent to such amendment, supplement or
waiver or to revoke any consent previously given, whether or not such persons
continue to be Noteholders after such record date. No consent shall be valid or
effective for more than 90 days after such record date unless consents from
Noteholders of the principal amount of Securities required hereunder for such
amendment or waiver to be effective shall have also been given and not revoked
within such 90-day period.
After an amendment, supplement or waiver becomes effective it shall
bind every Noteholder, unless it is of the type described in any of clauses (a)
through (h) of Section 10.02 hereof. In such case, the amendment or waiver shall
bind each Noteholder who has consented to it and every subsequent Noteholder
that evidences the same debt as the consenting Noteholder's Security.
SECTION 10.05. Notation on or Exchange of Securities. The Trustee may
place an appropriate notation about an amendment or waiver on any Security
thereafter authenticated.
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The Company in exchange for all Securities may issue and the Trustee shall
authenticate new Securities that reflect the amendment or waiver.
SECTION 10.06. Trustee Protected. The Trustee shall sign all
supplemental indentures, except that the Trustee may, but need not, sign any
supplemental indenture that adversely affects its rights. As a condition to
executing, or accepting the additional trusts created by, any supplemental
indenture permitted by this Article or the modifications thereby of the trust
created by this Indenture, the Trustee shall be entitled to receive (in addition
to those documents required by Section 11.04), and (subject to Section 315 of
the TIA) 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.
ARTICLE XI
Miscellaneous
SECTION 11.01. Trust Indenture Act Controls. If any provision of this
Indenture limits, qualifies, or conflicts with another provision which is
automatically deemed to be incorporated in this Indenture by the TIA, the
incorporated provision shall control.
SECTION 11.02. Notices. Any notice or communication by the Company or
the Trustee to the other is duly given if in writing and delivered in person or
mailed by first-class mail to the other's address stated in Section 11.10
hereof. The Company or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.
Any notice or communication to a Noteholder shall be mailed by
first-class mail to his address shown on the register kept by the Registrar.
Failure to mail a notice or communication to a Noteholder or any defect in it
shall not affect its sufficiency with respect to other Noteholders.
If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it.
If the Company mails a notice or communication to Noteholders, it shall
mail a copy to the Trustee and each Agent at the same time.
All other notices or communications shall be in writing.
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In case by reason of the suspension of regular mail service, or by
reason of any other cause, it shall be impossible to mail any notice as required
by the Indenture, then such method of notification as shall be made with the
approval of the Trustee shall constitute a sufficient mailing of such notice.
SECTION 11.03. Communication by Noteholders with Other Noteholders.
Noteholders may communicate pursuant to TIA Section 312(b) with other
Noteholders with respect to their rights under this Indenture or the Securities.
The Company, the Trustee, the Registrar and anyone else shall have the
protection of TIA Section 312(c).
SECTION 11.04. Certificate and Opinion as to Conditions Precedent. Upon
any request or application by the Company to the Trustee to take any action
under this Indenture, the Company shall furnish to the Trustee:
(a) an Officers' Certificate stating that, in the opinion of the
signers, all conditions precedent, if any, provided for in this Indenture
relating to the proposed action have been complied with; and
(b) an Opinion of Counsel stating that, in the opinion of such counsel,
all such conditions precedent have been complied with.
SECTION 11.05. Statements Required in Certificate or Opinion. Each
certificate or opinion with respect to compliance with a condition or covenant
provided for in this Indenture (other than pursuant to Section 4.03) shall
include:
(a) a statement that the person signing such certificate or rendering
such opinion has read such covenant or condition;
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of such person, such person has
made such examination or investigation as is necessary to enable such person
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 or not, in the opinion of such person,
such condition or covenant has been complied with.
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SECTION 11.06. Rules by Trustee and Agents. The Trustee may make
reasonable rules for action by, or a meeting of, Noteholders. The Registrar or
Paying Agent may make reasonable rules and set reasonable requirements for its
functions.
SECTION 11.07. Legal Holidays. A "Legal Holiday" is a Saturday, a
Sunday or a day on which banking institutions in the State of New York are not
required to be open. If a payment date is a Legal Holiday at a place of payment,
payment may be made at that place on the next succeeding day that is not a Legal
Holiday, and no interest shall accrue for the intervening period. If any other
operative date for purposes of this Indenture shall occur on a Legal Holiday
then for all purposes the next succeeding day that is not a Legal Holiday shall
be such operative date.
SECTION 11.08. 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 Securities or the Indenture or for
any claim based on, in respect of or by reason of such obligations or their
creation. Each Noteholder by accepting a Security waives and releases all such
liability. The waiver and release are part of the consideration for the issue of
the Securities.
SECTION 11.09. Counterparts. This Indenture may be executed in any
number of counterparts and by the parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement.
SECTION 11.10. Variable Provisions. "Officer" means the Chairman of the
Board, the Chief Executive Officer, the President, any Vice-President, the Chief
Financial Officer, the Treasurer, the Secretary, any Assistant Treasurer, any
Assistant Secretary or the Controller of the Company.
The Company initially appoints the Trustee as Paying Agent, Registrar
and Conversion Agent, and the Trustee hereby accepts such appointments.
The first certificate pursuant to Section 4.03 hereof shall be for the
fiscal year ending on December 31, 1998.
The reporting date for Section 8.06 hereof is April 15 of each year.
The first reporting date is April 15, 1999.
The Trustee shall always have a combined capital and surplus of at
least $50,000,000 as set forth in its most recent published annual report of
condition.
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The Company's address for purposes of the Indenture is:
Sabratek Corporation
0000 Xxxx Xxxxxx Xxxxxx
Xxxxx, Xxxxxxxx 00000
The Trustee's address is:
LaSalle National Bank
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
The Company or the Trustee may change its address for purposes of this
Indenture by written notice to the other.
SECTION 11.11. GOVERNING LAW. THE INTERNAL LAWS OF THE STATE OF NEW
YORK SHALL GOVERN THIS INDENTURE AND THE SECURITIES, WITHOUT REGARD TO THE
CONFLICT OF LAWS PROVISIONS THEREOF.
SECTION 11.12. No Adverse Interpretation of Other Agreements. This
Indenture may not be used to interpret another indenture, loan or debt agreement
of the Company or an Affiliate. Any such indenture, loan or debt agreement may
not be used to interpret this Indenture.
SECTION 11.13. Successors. All agreements of the Company in this
Indenture and the Securities shall bind its successor. All agreements of the
Trustee in this Indenture shall bind its successor.
SECTION 11.14. Severability. In case any provision in this Indenture or
in the Securities shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
SECTION 11.15. Table of Contents, Headings, Etc. The Table of Contents
and headings of the Articles and Sections of this Indenture have been inserted
for convenience of reference only, are not to be considered a part hereof, and
shall in no way modify or restrict any of the terms or provisions hereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture
to be duly executed, all as of the date first written above.
Sabratek Corporation, as Company,
by /s/ Xxxxxxx X. Xxxxxx
--------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Chief Financial Officer,
Senior Vice President
and Treasurer
LaSalle National Bank, as Trustee,
by /s/ Xxxxx X. Xxxxx
--------------------------------
Name: Xxxxx X. Xxxxx
Title: Vice President
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STATE OF ILLINOIS )
) ss.:
COUNTY OF XXXX )
Personally appeared before me, the undersigned authority in
and for the said county and state, on this 14th day of April, 1998, within my
jurisdiction, the within named Xxxxxxx X. Xxxxxx, who acknowledged that he is a
Chief Financial Officer, Senior Vice President and Treasurer of Sabratek
Corporation and that for and on behalf of the said corporation, and as its act
and deed he executed the above and foregoing instrument, after first having
been duly authorized by said corporation so to do.
/s/ Xxxxxxxxx Xxxxxx
-----------------------------
NOTARY PUBLIC
[Notarial Seal]
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EXHIBIT A
FORM OF CONVERTIBLE NOTE
[FORM OF FACE OF NOTE]
[GLOBAL SECURITIES LEGEND]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"),
NEW YORK, NEW YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC) ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO
TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR
THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL
SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS
SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.
[RESTRICTED SECURITIES LEGEND]
THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), AND THIS NOTE AND THE COMMON STOCK
ISSUABLE UPON THE CONVERSION THEREOF MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED WITHIN THE UNITED
A-1
57
STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS (AS DEFINED IN
REGULATION S UNDER THE SECURITIES ACT) IN THE ABSENCE OF SUCH REGISTRATION
EXCEPT IN A TRANSACTION EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. EACH PURCHASER OF THIS NOTE THAT IS A
QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT)
IS HEREBY NOTIFIED THAT THE SELLER OF THIS NOTE AND THE COMMON STOCK ISSUABLE
UPON THE CONVERSION THEREOF MAY BE RELYING ON THE EXEMPTION FROM THE PROVI SIONS
OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.
THE HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF THE COMPANY
THAT (A) THIS NOTE AND THE COMMON STOCK ISSUABLE UPON THE CONVERSION THEREOF MAY
BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (I) INSIDE THE UNITED
STATES TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (II) OUTSIDE THE UNITED
STATES IN A TRANSACTION COMPLYING WITH THE PROVISIONS OF RULE 903 OR 904 UNDER
THE SECURITIES ACT, (III) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE), OR (IV) PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF
CASES (I) THROUGH (IV) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY
STATE OF THE UNITED STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER
IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THIS NOTE OF THE RESALE
RESTRICTIONS REFERRED TO IN (A) ABOVE.
A-2
58
No. _________ Cusip No.78572E AA 1
SABRATEK CORPORATION
6% CONVERTIBLE NOTE
DUE 2005
SABRATEK CORPORATION
Sabratek Corporation, a Delaware corporation (the "Company"),
promises to pay to CEDE & CO. or registered assigns, the principal sum indicated
on Schedule A hereof on April 15, 2005.
Interest Payment Dates: April 15 and October 15, commencing October 15, 1998.
Record Dates: April 1 and October 1.
Reference is hereby made to the further provisions of this
Convertible Note set forth on the reverse hereof which further provisions shall
for all purposes have the same effect as if set forth at this place.
IN WITNESS WHEREOF, Sabratek Corporation has caused this
Convertible Note to be signed manually or by facsimile by its duly authorized
Officers and a facsimile of its corporate seal to be affixed hereto or imprinted
hereon.
Dated:__________________
SABRATEK CORPORATION,
by____________________________
by____________________________
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
This is one of the 6% Convertible Notes Due 2005
described in the within-mentioned Indenture.
LaSalle National Bank, as Trustee,
by_______________________________
Authorized Officer
A-3
59
SABRATEK CORPORATION
6% Convertible Note Due 2005
1. Interest. SABRATEK CORPORATION, a Delaware corporation (the
"Company"), is the issuer of the 6% Convertible Notes Due 2005 (the "Convertible
Notes"), of which this Convertible Note is a part. The Company promises to pay
interest on the Convertible Notes in cash semiannually on each April 15 and
October 15, commencing on October 15, 1998, to holders of record on the
immediately preceding April 1 and October 1.
Interest on the Convertible Notes will accrue from the most
recent date to which interest has been paid, or if no interest has been paid,
from April 14, 1998. Interest will be computed on the basis of a 360-day year of
twelve 30-day months. To the extent lawful, the Company shall pay interest
(including post-petition interest in any proceeding under any Bankruptcy Law) on
overdue installments of interest (without regard to any applicable grace period)
at the rate borne by the Convertible Notes, compounded annually.
2. Method of Payment. The Company will pay interest on the
Convertible Notes (except defaulted interest) to the persons who are registered
holders of the Convertible Notes at the close of business on the record date for
the next interest payment date even though Convertible Notes are canceled after
the record date and on or before the interest payment date. The Noteholder
hereof must surrender Convertible Notes to a Paying Agent to collect principal
payments. The Company will pay principal and interest in money of the United
States that at the time of payment is legal tender for payment of public and
private debts. However, the Company may pay principal and interest by check
payable in such money. It may mail an interest check to a holders' registered
address.
3. Paying Agent, Registrar and Conversion Agent. The Trustee
will act as Paying Agent, Registrar and Conversion Agent. The Company may change
any Paying Agent, Registrar, or Conversion Agent without prior notice.
4. Indenture. The Company issued the Convertible Notes under
an indenture, dated as of April 14, 1998 (the "Indenture"), between the Company
and LaSalle National Bank, as Trustee. The terms of the Convertible Notes
include those stated in the Indenture and those made part of the Indenture by
the Trust Indenture Act of 1939 (15 U.S. Code xx.xx. 77aaa-77bbbb) as in effect
on the date of the Indenture. The Convertible Notes are subject to, and
qualified by, all such terms, certain of which are summarized hereon, and
Noteholders are referred to the Indenture and such Act for a statement of such
terms. The Convertible Notes are general
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unsecured obligations of the Company limited to an aggregate principal
amount of $97,750,000. The Indenture does not limit the ability of the Company
or any of its Subsidiaries to incur indebtedness or to grant security interests
or liens in respect of their assets.
5. Optional Redemption. The Convertible Notes are not
redeemable at the Company's option prior to April 19, 2001. Thereafter, the
Convertible Notes will be subject to redemption at the option of the Company, in
whole or in part (in any integral multiple of $1,000), at the following
redemption prices (expressed as percentages of the principal amount), if
redeemed during the 12-month period beginning April 15 of the years indicated
(April 19 in the case of the year 2001):
Redemption
Year Price
--- ----------
2001............................................................... 103.43%
2002............................................................... 102.57%
2003............................................................... 101.71%
2004............................................................... 100.86%
2005............................................................... 100.00%
, in each case together with accrued interest to the redemption date (subject to
the right of holders of record on the relevant record date to receive interest
due on an interest payment date). On or after the redemption date, interest will
cease to accrue on the Convertible Notes, or portion thereof, called for
redemption.
6. Notice of Redemption. Notice of redemption will be mailed
at least 30 days but not more than 60 days before the redemption date to each
holder of the Convertible Notes to be redeemed at his address of record. The
Convertible Notes in denominations larger than $1,000 may be redeemed in part
but only in integral multiples of $1,000. In the event of a redemption of less
than all of the Convertible Notes, the Convertible Notes will be chosen for
redemption by the Trustee in accordance with the Indenture. Unless the Company
defaults in making such redemption payment, or a Paying Agent is prohibited from
making such payment pursuant to the Indenture, by law or otherwise, interest
ceases to accrue on the Convertible Notes or portions of them called for
redemption on and after the redemption date.
If this Convertible Note is redeemed subsequent to a record
date with respect to any interest payment date specified above and on or prior
to such interest payment date, then anyaccrued interest will be paid to the
person in whose name this Convertible Note is registered at the close of
business on such record date.
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7. Mandatory Redemption. The Company will not be required to
make mandatory redemption payments with respect to the Convertible Notes. There
are no sinking fund payments with respect to the Convertible Notes.
8. Repurchase at Option of Holder. If there is a Designated
Event, the Company shall be required to offer to purchase on the Designated
Event Payment Date all outstanding Convertible Notes at a purchase price equal
to 100% of the principal amount thereof on the date of purchase, plus accrued
and unpaid interest to the Designated Event Payment Date. Holders of Convertible
Notes that are subject to an offer to purchase will receive a Designated Event
Offer from the Company prior to any related Designated Event Payment Date and
may elect to have such Convertible Notes or portions thereof in authorized
denominations purchased by completing the form entitled "Option of Noteholder To
Elect Purchase" appearing below. Noteholders have the right to withdraw their
election by delivering a written notice of withdrawal to the Company or the
Paying Agent in accordance with the terms of the Indenture.
9. Conversion. The holder of any Convertible Note has the
right, exercisable at any time after 90 days following the Issuance Date and
prior to the close of business (New York City time) on the Business Day
immediately preceding the date of the Convertible Note's maturity, to convert
the principal amount thereof (or any portion thereof that is an integral
multiple of $1,000) into shares of Common Stock at the initial Conversion Price
of $40.46 per share, subject to adjustment under certain circumstances, except
that if a Convertible Note is called for redemption, the conversion right will
terminate at the close of business (New York City time) on the Business Day
immediately preceding the date fixed for redemption.
To convert a Convertible Note, a holder must (1) complete and
sign a notice of election to convert substantially in the form set forth below,
(2) surrender the Convertible Note to a Conversion Agent, (3) furnish
appropriate endorsements or transfer documents if required by the Registrar or
Conversion Agent and (4) pay any transfer or similar tax, if required. Upon
conversion, no adjustment or payment will be made for interest or dividends, but
if any Noteholder surrenders a Convertible Note for conversion after the close
of business on the record date for the payment of an installment of interest and
prior to the opening of business on the next interest payment date, then,
notwithstanding such conversion, the interest payable on such interest payment
date will be paid to the registered holder of such Convertible Note on such
record date. In such event, unless such Security has been called for redemption
on or prior to such interest payment date, such Convertible Note, when
surrendered for conversion, must be accompanied by payment in funds acceptable
to the Company of an amount equal to the interest payable on such interest
payment date on the portion so converted. The number of shares of Common Stock
issuable upon conversion of a Convertible Note is determined by dividing the
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principal amount of the Convertible Note 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.
A Convertible Note in respect of which a holder has delivered
an "Option of Noteholder to Elect Purchase" form appearing below exercising the
option of such holder to require the Company to purchase such Convertible Note
may be converted only if the notice of exercise is withdrawn as provided above
and in accordance with the terms of the Indenture. The above description of
conversion of the Convertible Notes is qualified by reference to, and is subject
in its entirety to, the more complete description thereof contained in the
Indenture.
10. Registration Agreement. The holder of this Convertible
Note is entitled to the benefits of a Registration Agreement, dated April 14,
1998, between the Company and the Initial Purchaser (the "Registration
Agreement"). Pursuant to the Registration Agreement the Company has agreed
for the benefit of the holders of the Convertible Notes, that (i) it will, at
its cost, within 60 days after the closing of the sale of the Convertible Notes
(the "Closing"), file a shelf registration statement (the "Shelf Registration
Statement") with the Securities and Exchange Commission (the "Commission") with
respect to resales of the Convertible Notes and the Common Stock issuable upon
conversion thereof, (ii) the Company will use its best efforts to ensure that
within 120 days after the Closing, such Shelf Registration Statement shall be
declared effective by the Commission and (iii) the Company will use its best
efforts to keep such Shelf Registration Statement continuously effective under
the Securities Act until the earliest of (a) the second anniversary of the date
of the Closing, (b) the date on which the Convertible Notes or the Common Stock
issuable upon conversion thereof may be sold pursuant to paragraph (k) of Rule
144 (or any successor provision) promulgated by the Commission under the
Securities Act and (c) the date as of which all the Convertible Notes or the
Common Stock issuable upon conversion thereof have been sold pursuant to such
Shelf Registration Statement (the "Shelf Registration Period"). If the Company
fails to comply with clause (i) above then, at such time, the per annum
interest rate on the Convertible Notes will increase by 25 basis points. Such
increase will remain in effect until the date on which such Shelf Registration
Statement is filed, on which date the interest rate on the Convertible Notes
will revert to the interest rate originally borne by the Convertible Notes plus
any increase in such interest rate pursuant to the following sentence. If the
Shelf Registration Statement is not declared effective as provided in clause
(ii) above (other than as a result solely of actions of any holders of
securities covered by such Shelf Registration Statement), then, at such time
and on each date that would have been the successive 30th day following such
time, the per annum interest rate on the Convertible Notes (which interest rate
will be the original interest rate on the Convertible Notes plus any increase
or
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increases in such interest rate pursuant to the preceding sentence and this
sentence) will increase by an additional 25 basis points; provided that the
interest rate will not increase by more than 50 basis points pursuant to this
sentence and will not increase by more than 75 basis points pursuant to this
sentence and the preceding sentence. Such increase or increases will remain in
effect until the date on which such Shelf Registration Statement is declared
effective, on which date the interest rate on the Convertible Notes will revert
to the interest rate originally borne by the Convertible Notes. Pursuant to
clause (iii) above, however, if the Company fails to keep the Shelf Registration
Statement continuously effective for the period specified above (other than as a
result solely of actions of any holders of securities covered by such Shelf
Registration Statement), then at such time as the Shelf Registration Statement
is no longer effective and on each date thereafter that is the successive 30th
day subsequent to such time and until the earlier of (i) the date that the Shelf
Registration Statement is again deemed effective or (ii) the termination of the
Shelf Registration Period, the per annum interest rate on the Convertible Notes
will increase by an additional 25 basis points; provided, however, that the
interest rate will not increase by more than 50 basis points pursuant to this
sentence. For any period during which the per annum interest rate on the Notes
is increased pursuant to this paragraph, each holder of restricted Common Stock
issued upon conversion of the Notes shall be entitled to receive liquidated
damages from the Company as follows: (i) for every 25 basis points by which such
interest rate is increased pursuant to this paragraph, such liquidated damages
shall accrue at a rate equal to $2.50 per annum per 24.7158 shares of Common
Stock (subject to adjustment in the event of a stock split, stock recombination,
stock dividend and the like); and (ii) any liquidated damages which have accrued
pursuant to this paragraph prior to the record date relating to any interest
payment date shall be payable on such interest payment date to the holders of
record on such record date. For purposes of the foregoing, restricted Common
Stock shall not include any shares of Common Stock which (i) may be sold
pursuant to paragraph (k) of Rule 144 (or any successor provision) promulgated
by the Commission under the Securities Act or (ii) have been sold pursuant to
the Shelf Registration Statement.
Pursuant to the Registration Agreement, the Company may
suspend the use of the prospectus which is a part of the Shelf Registration
Statement for a period not to exceed 30 days in any three-month period or three
periods not to exceed an aggregate of 90 days in any twelve-month period under
certain circumstances. The holders of Convertible Notes will not be entitled to
additional interest as set forth in the preceding paragraph solely because of
such suspension.
11. Denominations, Transfer, Exchange and Replacement. The
Convertible Notes are in registered form, without coupons, in denominations of
$1,000 and integral multiples of $1,000. The transfer of Convertible Notes may
be registered, and Convertible Notes may be
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exchanged, as provided in the Indenture. The Registrar may require a Noteholder,
among other things, to furnish appropriate endorsements and transfer documents
and to pay any taxes and fees required by law or permitted by the Indenture. The
Registrar need not exchange or register the transfer of any Convertible Note or
portion of a Convertible Note selected for redemption (except the unredeemed
portion of any Convertible Note being redeemed in part). Also, it need not
exchange or register the transfer of any Convertible Note for a period of 15
days before a selection of Convertible Notes to be redeemed. Replacement
Convertible Notes for lost, stolen or mutilated Convertible Notes may be issued
in accordance with the terms of the Indenture.
12. Persons Deemed Owners. The registered Noteholder of a
Convertible Note may be treated as its owner for all purposes.
13. 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 request. After that, Noteholders of
Convertible Notes entitled 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.
14. Defaults and Remedies. The Convertible Notes shall have
the Events of Default as set forth in Section 7.01 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 Noteholders of at least
25% in aggregate principal amount of the then-outstanding Convertible Notes by
notice to the Company and the Trustee may declare all the Convertible Notes to
be due and payable immediately, except that in the case of an Event of Default
arising from certain events of bankruptcy or insolvency, all unpaid principal
and interest accrued on the Convertible Notes shall become due and payable
immediately without further action or notice.
The Noteholders of a majority in principal amount of the
Convertible Notes 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. Noteholders may not enforce the Indenture or the
Convertible Notes except as provided in the Indenture. Subject to certain
limitations, Noteholders of a majority in principal amount of the
then-outstanding Convertible Notes issued under the Indenture may direct the
Trustee in its exercise of any trust or power. The Company must furnish
compliance certificates to the Trustee annually. The above description of Events
of Default and remedies is qualified by reference to, and subject in its
entirety to, the more complete description thereof contained in the Indenture.
X-0
00
00. Amendments, Supplements and Waivers. Subject to certain
exceptions, the Indenture or the Convertible Notes may be amended or
supplemented with the consent of the Noteholders of at least a majority in
principal amount of the then-outstanding Convertible Notes (including consents
obtained in connection with a tender offer or exchange offer for Convertible
Notes), and any existing default may be waived with the consent of the
Noteholders of a majority in principal amount of the then-outstanding
Convertible Notes, including consents obtained in connection with a tender offer
or exchange offer for Convertible Notes. Without the consent of any Noteholder,
the Indenture or the Convertible Notes may be amended, among other things, to
cure any ambiguity, defect or inconsistency, to provide for assumption of the
Company's obligations to Noteholders, to make any change that does not adversely
affect the rights of any Noteholder, to qualify the Indenture under the TIA, or
to comply with the requirements of the SEC in order to maintain the
qualification of the Indenture under the TIA.
16. Trustee Dealings with the Company. The Trustee, in its
individual or any other capacity, may become the owner or pledgee of the
Convertible Notes 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.
17. 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 Notes or the Indenture or for
any claim based on, in respect of or by reason of such obligations or their
creation. Each Noteholder, by accepting a Convertible Note, waives and releases
all such liability. The waiver and release are part of the consideration for the
issue of the Convertible Notes.
18. Governing Law. THE INTERNAL LAWS OF THE STATE OF NEW YORK
SHALL GOVERN THE INDENTURE AND THE CONVERTIBLE NOTES WITHOUT REGARD TO CONFLICT
OF LAW PROVISIONS THEREOF.
19. Authentication. The Convertible Notes shall not be valid
until authenticated by the manual signature of an authorized officer of the
Trustee or an authenticating agent.
20. Abbreviations. Customary abbreviations may be used in the
name of a Noteholder or an assignee, such as: TEN COM (for tenants in common),
TEN ENT (for tenants by the entireties), JT TEN (for joint tenants with right of
survivorship and not as tenants in common), CUST (for Custodian), and U/G/M/A
(for Uniform Gifts to Minors Act).
X-00
00
00. Definitions. Capitalized terms not defined in this
Convertible Note have the meaning given to them in the Indenture.
The Company will furnish to any Noteholder of the Convertible
Notes upon written request and without charge a copy of the Indenture and the
Registration Agreement.
Request may be made to:
Sabratek Corporation
0000 Xxxx Xxxxxx Xxxxxx
Xxxxx, Xxxxxxxx 00000
(000) 000-0000
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ASSIGNMENT FORM
To assign this Convertible Note, fill in the form below:
(I) or (we) assign and transfer this Convertible Note to
_____________________________________________________________________________
(Insert assignee's social security or tax I.D. no.)
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint ________________________________________ agent to
transfer this Convertible Note on the books of the Company. The agent may
substitute another to act for him.
Your Signature: ____________________________________________________________
(Sign exactly as your name appears on the other side of this
Convertible Note)
Date: ___________________
Medallion Signature Guarantee: _____________________________
In connection with any transfer of any of the Convertible
Notes evidenced by this certificate occurring prior to the date that is two
years after the later of the date of original issuance of such Convertible Notes
and the last date, if any, on which such
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Convertible Notes were owned by the Company or any Affiliate of the Company, the
undersigned confirms that such Convertible Notes are being transferred:
CHECK ONE BOX BELOW
(1) / / to the Company; or
(2) / / pursuant to and in compliance with Rule 144A under the
Securities Act of 1933; or
(3) / / pursuant to and in compliance with Regulation S under the
Securities Act of 1933; or
(4) / / pursuant to an exemption from registration under the
Securities Act of 1933 provided by Rule 144 thereunder.
Unless one of the boxes is checked, the Registrar will refuse to
register any of the Convertible Notes evidenced by this certificate in
the name of any person other than the registered holder thereof;
provided, however, that if box (3) or (4) is checked, the Trustee may
require, prior to registering any such transfer of the Convertible
Notes such legal opinions, certifications and other information as the
Company has reasonably requested in writing, by delivery to the Trustee
of a standing letter of instruction, to confirm that such transfer is
being made pursuant to an exemption from,
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or in a transaction not subject to, the registration requirements of the
Securities Act of 1933.
--------------------------
Signature
Medallion Signature Guarantee:
------------------------ --------------------------
Signature
--------------------------------------------------------------------------------
TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing
this Convertible Note for its own account or an account with respect to which it
exercises sole investment discretion and that it and any such account is a
"qualified institutional buyer" within the meaning of Rule 144A under the
Securities Act of 1933, 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
-----------------------------
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[TO BE ATTACHED TO GLOBAL SECURITIES]
SCHEDULE A
The initial principal amount at maturity of this Global
Security shall be $85,000,000. The following increases or decreases in the
principal amount of this Global Security have been made:
Amount of increase in
Principal Amount of this
Global Security including Amount of decrease in Principal Amount of this Signature of authorized
upon exercise of over- Principal Amount of this Global Security following officer of Trustee or
Date Made allotment option Global Security such decrease or increase Securities Custodian
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OPTION OF NOTEHOLDER TO ELECT PURCHASE
If you want to elect to have this Convertible Note or a
portion thereof repurchased by the Company pursuant to Section 3.08 or 4.07 of
the Indenture, check the box: / /
If the purchase is in part, indicate the portion ($1,000 or
any integral multiple thereof) to be purchased: ____________
Your Signature:_______________________________________________
(Sign exactly as your name appears on the other
side of this Convertible Note)
Date: ____________
Medallion Signature Guarantee: _______________________
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ELECTION TO CONVERT
To Sabratek Corporation:
The undersigned owner of this Convertible Note hereby
irrevocably exercises the option to convert this Convertible Note, or the
portion below designated, into Common Stock of SABRATEK CORPORATION in
accordance with the terms of the Indenture referred to in this Convertible Note,
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.
The undersigned agrees to be bound by the terms of the
Registration Agreement relating to the Common Stock issuable upon conversion of
the Convertible Notes.
Date:_________________
In whole ____ or Portion of Convertible Note to be
converted ($1,000 or any integral
multiple thereof):
$_________________
Your Signature: _______________________________________
(Sign exactly as your name appears on the other
side of this Convertible Note.)
Please Print or Typewrite Name and
Address, Including Zip Code, and
Social Security or other Identifying
Number
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Medallion Signature Guarantee:*
---------------------------
-----------------
* Signature must be guaranteed by a commercial bank, trust company or
member firm of the New York Stock Exchange.
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EXHIBIT B
FORM OF REGISTRATION AGREEMENT
B-1
