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ROHR, INC.
AND
THE BANK OF NEW YORK,
AS TRUSTEE
--------------------
$50,000,000
% CONVERTIBLE SUBORDINATED NOTES DUE 2004
--------------------
INDENTURE
DATED AS OF MAY 15, 1994
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TABLE OF CONTENTS
PAGE
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ARTICLE 1 DEFINITIONS................................................... 1
SECTION 1.01 Definitions............................................ 1
SECTION 1.02 Other Definitions...................................... 15
SECTION 1.03 Incorporation by Reference of Trust Indenture Act...... 15
SECTION 1.04 Rules of Construction.................................. 16
ARTICLE 2 THE CONVERTIBLE SUBORDINATED NOTES............................ 16
SECTION 2.01 Form and Dating........................................ 16
SECTION 2.02 Execution and Authentication........................... 17
SECTION 2.03 Registrar and Paying Agent............................. 17
SECTION 2.04 Paying Agent To Hold Money in Trust.................... 18
SECTION 2.05 Holder Lists........................................... 19
SECTION 2.06 Transfer and Exchange.................................. 19
SECTION 2.07 Replacement Convertible Subordinated Notes............. 19
SECTION 2.08 Outstanding Convertible Subordinated Notes............. 20
SECTION 2.09 When Treasury Convertible Subordinated Notes
Disregarded.......................................... 20
SECTION 2.10 Temporary Convertible Subordinated Notes............... 21
SECTION 2.11 Cancellation........................................... 21
SECTION 2.12 Defaulted Interest..................................... 21
SECTION 2.13 CUSIP Number........................................... 22
ARTICLE 3 REDEMPTION.................................................... 22
SECTION 3.01 Notices to Trustee..................................... 22
SECTION 3.02 Selection of Convertible Subordinated Notes To Be
Redeemed............................................. 22
SECTION 3.03 Notice of Redemption................................... 23
SECTION 3.04 Effect of Notice of Redemption......................... 24
SECTION 3.05 Deposit of Redemption Price............................ 24
SECTION 3.06 Convertible Subordinated Notes Redeemed in Part........ 24
ARTICLE 4 COVENANTS..................................................... 25
SECTION 4.01 Payment of Convertible Subordinated Notes.............. 25
SECTION 4.02 Commission Reports..................................... 25
SECTION 4.03 Compliance Certificate................................. 26
SECTION 4.04 Maintenance of Office or Agency........................ 26
SECTION 4.05 Limitation on Sale of Assets........................... 27
SECTION 4.06 Continued Existence.................................... 30
SECTION 4.07 Taxes.................................................. 30
SECTION 4.08 Change of Control...................................... 31
SECTION 4.09 Appointments to Fill Vacancies in Trustee's Office..... 33
SECTION 4.10 Further Instruments and Acts........................... 33
SECTION 4.11 Stay, Extension and Usury Laws......................... 34
SECTION 4.12 Investment Company Act................................. 34
PAGE
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ARTICLE 5 SUCCESSORS.................................................... 34
SECTION 5.01 When the Company May Merge, etc........................ 34
SECTION 5.02 Successor Corporation Substituted...................... 36
SECTION 5.03 Purchase Option on Change of Control................... 36
ARTICLE 6 DEFAULTS AND REMEDIES......................................... 36
SECTION 6.01 Events of Default...................................... 36
SECTION 6.02 Acceleration........................................... 38
SECTION 6.03 Other Remedies......................................... 39
SECTION 6.04 Waiver of Past Defaults................................ 39
SECTION 6.05 Control by Majority.................................... 40
SECTION 6.06 Limitation on Suits.................................... 40
SECTION 6.07 Rights of Holders To Receive Payment................... 40
SECTION 6.08 Collection Suit by Trustee............................. 41
SECTION 6.09 Trustee May File Proofs of Claim....................... 41
SECTION 6.10 Priorities............................................. 41
SECTION 6.11 Undertaking for Costs.................................. 42
ARTICLE 7 THE TRUSTEE................................................... 42
SECTION 7.01 Duties of the Trustee.................................. 42
SECTION 7.02 Rights of the Trustee.................................. 44
SECTION 7.03 Individual Rights of the Trustee....................... 45
SECTION 7.04 Trustee's Disclaimer................................... 45
SECTION 7.05 Notice of Defaults..................................... 46
SECTION 7.06 Reports by the Trustee to Holders...................... 46
SECTION 7.07 Compensation and Indemnity............................. 47
SECTION 7.08 Replacement of the Trustee............................. 48
SECTION 7.09 Successor Trustee by Merger, etc....................... 49
SECTION 7.10 Eligibility, Disqualification.......................... 49
SECTION 7.11 Preferential Collection of Claims Against Company...... 50
ARTICLE 8 SATISFACTION AND DISCHARGE OF INDENTURE....................... 50
SECTION 8.01 Termination of Company's Obligations................... 50
SECTION 8.02 Application of Trust Money............................. 54
SECTION 8.03 Repayment to Company................................... 54
SECTION 8.04 Reinstatement.......................................... 55
ARTICLE 9 AMENDMENTS.................................................... 55
SECTION 9.01 Without the Consent of Holders......................... 55
SECTION 9.02 With the Consent of Holders............................ 56
SECTION 9.03 Compliance with the Trust Indenture Act................ 58
SECTION 9.04 Revocation and Effect of Consents...................... 58
SECTION 9.05 Notation on or Exchange of Convertible Subordinated
Notes................................................ 59
SECTION 9.06 Trustee Protected...................................... 59
ii
PAGE
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ARTICLE 10 GENERAL PROVISIONS............................................ 59
SECTION 10.01 Trust Indenture Act Controls........................... 59
SECTION 10.02 Notices................................................ 60
SECTION 10.03 Communication by Holders With Other Holders............ 60
SECTION 10.04 Certificate and Opinion as to Conditions Precedent..... 61
SECTION 10.05 Statements Required in Certificate or Opinion.......... 61
SECTION 10.06 Rules by Trustee and Agents............................ 62
SECTION 10.07 Legal Holidays......................................... 62
SECTION 10.08 No Recourse Against Others............................. 62
SECTION 10.09 Counterparts........................................... 62
SECTION 10.10 Other Provisions....................................... 63
SECTION 10.11 Governing Law.......................................... 64
SECTION 10.12 No Adverse Interpretation of Other Agreements.......... 64
SECTION 10.13 Successors............................................. 64
SECTION 10.14 Severability........................................... 64
SECTION 10.15 Table of Contents, Headings, etc....................... 64
ARTICLE 11 SUBORDINATION................................................. 65
SECTION 11.01 Agreement To Subordinate............................... 65
SECTION 11.02 Liquidation; Dissolution; Bankruptcy................... 65
SECTION 11.03 Default on Designated Senior Indebtedness.............. 66
SECTION 11.04 Acceleration of Convertible Subordinated Notes......... 66
SECTION 11.05 When Distributions Must Be Paid Over................... 66
SECTION 11.06 Notice by the Company.................................. 67
SECTION 11.07 Subrogation............................................ 68
SECTION 11.08 Relative Rights........................................ 68
SECTION 11.09 Subordination May Not Be Impaired by the Company....... 69
SECTION 11.10 Distribution of Notice to the Representative........... 69
SECTION 11.11 Rights of the Trustee and Paying Agent................. 69
SECTION 11.12 No Fiduciary Duty to Holders of Senior Indebtedness.... 70
SECTION 11.13 Authorization to Effect Subordination.................. 71
ARTICLE 12 CONVERSION OF CONVERTIBLE SUBORDINATED NOTES.................. 71
SECTION 12.01 Conversion Privilege................................... 71
SECTION 12.02 Manner of Exercise of Conversion Privilege............. 72
SECTION 12.03 Cash Payments in Lieu of Fractional Shares............. 74
SECTION 12.04 Adjustment of Conversion Price......................... 74
SECTION 12.05 Notice to Holders Prior to Certain Corporate Actions... 82
SECTION 12.06 Reservation of Shares of Common Stock.................. 83
SECTION 12.07 Taxes upon Conversion.................................. 83
SECTION 12.08 Covenants as to Common Stock........................... 83
SECTION 12.09 Consolidation or Merger or Sale of Assets.............. 84
SECTION 12.10 Disclaimer of Responsibility for Certain Matters....... 85
SECTION 12.11 Cancellation of Converted Notes........................ 86
SECTION 12.12 Voluntary Reduction.................................... 86
iii
CROSS-REFERENCE TABLE*
TRUST INDENTURE ACT SECTION INDENTURE SECTION
310(a)(1)................................................................. 7.10
(a)(2)................................................................. 7.11
(a)(3)................................................................. N.A.
(a)(4)................................................................. N.A.
(b)....................................................... 7.08, 7.10, 10.02
(c).................................................................... N.A.
311(a).................................................................... 7.11
(b).................................................................... 7.11
(c).................................................................... N.A.
312(a).................................................................... 2.05
(b)................................................................... 10.03
(c)................................................................... 10.03
313(a).................................................................... 7.06
(b)(1)................................................................. N.A.
(b)(2)................................................................. 7.06
(c)............................................................. 7.06, 10.02
(d).................................................................... 7.06
314(a)............................................................. 4.01, 10.02
(b).................................................................... N.A.
(c)(1)................................................................ 10.04
(c)(2)................................................................ 10.04
(c)(3)................................................................. N.A.
(d).................................................................... N.A.
(e)................................................................... 10.05
(f).................................................................... N.A.
315(a)................................................................. 7.01(b)
(b)............................................................. 7.05, 10.02
(c)................................................................. 7.01(a)
(d)................................................................. 7.01(c)
(e).................................................................... 6.11
316(a)(last sentence)..................................................... 2.09
(a)(1)(A).............................................................. 6.05
(a)(2)(B).............................................................. 6.04
(a)(2)................................................................. N.A.
(b).................................................................... 6.02
317(a)(1)................................................................. 6.08
(a)(2)..................................................................6.09
(b).................................................................... 2.04
318(a)................................................................... 10.01
N.A. means not applicable.
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* This Cross-Reference Table is not part of the Indenture.
iv
THIS INDENTURE, dated as of May 15, 1994, is between Rohr, Inc., a Delaware
corporation (the "Company"), and The Bank of New York, a New York State bank-
ing corporation ("Trustee"). The Company has duly authorized the creation of
its % Convertible Subordinated Notes due 2004 (the "Convertible Subordi-
nated Notes") and to provide therefor the Company has duly authorized the exe-
cution and delivery of this Indenture. Each party agrees as follows for the
benefit of the other party and for the equal and ratable benefit of the hold-
ers from time to time of the Convertible Subordinated Notes.
ARTICLE 1
Definitions
Section 1.01 Definitions.
"Acquired Indebtedness" of any specified Person means Indebtedness of any
other Person and its subsidiaries existing at the time such other Person
merged with or into or became a subsidiary of such specified Person or assumed
by the specified Person in connection with the acquisition of assets from such
other Person including, without limitation, Indebtedness of such other Person
and its subsidiaries incurred in connection with or in anticipation of (a)
such other Person and its subsidiaries being merged with or into or becoming a
subsidiary of such specified Person or (b) such acquisition by the specified
Person.
"Affiliate" means, when used with reference to any Person, any other Person
directly or indirectly controlling, controlled by, or under direct or indirect
common control with, the referent Person, as the case may be, or any Person
who beneficially owns (within the meaning of Rule 13d-3 and Rule 13d-5 under
the Exchange Act), directly or indirectly, 10% or more of the equity interests
of the referent Person or warrants, options or other rights to acquire or hold
more than 10% of any class of equity interests of the referent Person. For the
purposes of this definition, "control" when used with respect to any specified
Person means the power to direct or cause the direction of management or poli-
cies of the referent Person, directly or indirectly, whether through the own-
ership of voting securities, by contract or otherwise; and the terms "control-
ling" and "controlled" have meanings correlative of the foregoing.
1
"Agent" means any Registrar, Paying Agent, Conversion Agent or co-registrar.
"Asset Sale" means any sale, lease, transfer, exchange or other disposition
by the Company or any subsidiary (or series of related sales, leases, trans-
fers, exchanges or dispositions) in excess of $1,000,000, including, without
limitation, dispositions pursuant to merger, consolidation or sale and lease-
back transactions, of (a) shares of Capital Stock of a subsidiary of the Com-
pany (prorated to the extent of the Company's interest therein), (b) all or
substantially all of the properties and assets of any division or line of
business of the Company or any subsidiary of the Company or (c) any other
property or assets of the Company (prorated to the extent of the Company's in-
terest therein) or of any subsidiary of the Company (prorated to the extent of
the Company's interest therein) outside the ordinary course of business of the
Company or such subsidiary (each referred to for purposes of this definition
as a "disposition") by the Company or by any of its subsidiaries (other than
(i) dispositions by the Company to a wholly owned subsidiary of the Company or
by a subsidiary of the Company to the Company or to a wholly owned subsidiary
of the Company, (ii) sales or other dispositions of inventory, (iii) any dis-
position of properties or assets that is consummated in accordance with the
provisions of Section 5.01, (iv) any disposition of any account receivable
pursuant to the Pooling and Servicing Agreement, (v) dispositions by the Com-
pany or any subsidiary of the Company of the business jet related product
line, the overhaul and repair business as conducted by Rohr Aero Services,
Inc. and Rohr Aero Services Europe, respectively, on the Issue Date, the Ha-
gerstown, Maryland plant and the Auburn, Washington plant, in each case in-
cluding related assets, (vi) the disposition by the Company or any subsidiary
of the Company of interests owned on the Issue Date in two trusts which own an
Airbus A300 aircraft and a McDonnell Douglas DC10 aircraft, respectively and
(vii) the disposition of Building 107 (at the Company's facility in Chula Vis-
ta, California) to (a) any pension plan of the Company or (b) to any other
Person if the net proceeds of such disposition are delivered to any pension
plan referred to in clause (a) of this definition, in either case resulting in
the full satisfaction (or in case the full amount of such net proceeds are so
delivered and shall be insufficient to effect such full satisfaction, the par-
tial satisfaction) of the Company's funding liabilities with respect to any
such pension plan or plans).
"Bank Agent" means, at any time, the then-acting agent under the Revolving
Credit Agreement, which shall initially be Citicorp USA, Inc.
2
"Board of Directors" means the Board of Directors of the Company or any au-
thorized committee of the Board of Directors.
"Capital Stock" means, with respect to any Person, any and all shares, in-
terests, participations, rights in, or other equivalents (however designated
and whether voting or non-voting) of such Person's capital stock, including
each class of Common Stock or Preferred Stock of such Person, whether out-
standing on the Issue Date or issued after the Issue Date, and any and all
rights, warrants or options exchangeable for or convertible into such capital
stock (but excluding any debt security that is exchangeable for or convertible
into such capital stock).
"Capitalized Lease Obligation" means any obligation under a lease that is
required to be classified and accounted for as a capital lease obligation un-
der GAAP and, for purposes of this Indenture, the amount of such obligations
at any date shall be the capitalized amount of such obligations at such date,
determined in accordance with GAAP.
"Cash Equivalents" means (a) marketable direct obligations issued by, or un-
conditionally guaranteed by, the United States Government or issued by any
agency thereof and backed by the full faith and credit of the United States,
in each case maturing within one year from the date of acquisition thereof,
(b) marketable direct obligations issued by any state of the United States of
America or any political subdivision of any such state or any public instru-
mentality thereof maturing within one year from the date of acquisition
thereof and, at the time of acquisition, having one of the two highest ratings
obtainable from either Standard & Poor's Corporation ("S&P") or Moody's In-
vestors Service, Inc. ("Moody's"), (c) commercial paper maturing no more than
one year from the date of creation thereof and, at the time of acquisition,
having a rating of at least A-1 from S&P or at least P-1 from Moody's, (d)
certificates of deposit or bankers' acceptances maturing within one year from
the date of acquisition thereof issued by any commercial bank organized under
the laws of the United States of America or any state thereof or the District
of Columbia or any United States branch of a foreign bank having, at the date
of acquisition thereof, combined capital and surplus of not less than $250
million, (e) repurchase obligations with a term of not more than seven days
for underlying securities of the types described in clause (a) above entered
into with any bank meeting the qualifications specified in clause (d) above
and (f) investments in money market funds which invest substantially all their
assets in securities of the types described in clauses (a) through (e) above.
3
"Change of Control" means the occurrence of one or more of the following
events (whether or not approved by the Board of Directors of the Company): (a)
an event or series of events by which any Person or other entity or group of
Persons or other entities acting in concert as determined in accordance with
Section 13(d) of the Exchange Act, whether or not applicable (a "Group of Per-
sons") shall, as a result of a tender or exchange offer, open market pur-
chases, privately negotiated purchases, merger or otherwise (i) be or become,
directly or indirectly, the beneficial owner (within the meaning of Rule 13d-3
and Rule 13d-5 under the Exchange Act, whether or not applicable) of 50% or
more of the combined voting power of the then outstanding Voting Stock of the
Company or (ii) have or has the ability to elect, directly or indirectly, a
majority of the members of the Board of Directors of the Company or other
equivalent governing body thereof, (b) the shareholders of the Company shall
approve any Plan of Liquidation of the Company (whether or not otherwise in
compliance with the provisions of this Indenture), (c) individuals who at the
beginning of any period of two consecutive calendar years constituted the
Board of Directors of the Company (together with any new directors whose elec-
tion or appointment by the Board of Directors of the Company or whose nomina-
tion for election by the Company's shareholders was approved by a vote of at
least a majority of the members of the Board of Directors of the Company then
still in office who either were members of the Board of Directors of the Com-
pany at the beginning of such period or whose election, appointment or nomina-
tion for election was previously so approved) cease for any reason to consti-
tute a majority of the members of the Board of Directors of the Company then
in office, or (d) the direct or indirect sale, lease, exchange or other trans-
fer, in one transaction or a series of related transactions, of all or sub-
stantially all of the property or assets of the Company to any Person or Group
of Persons (whether or not otherwise in compliance with the provisions of this
Indenture).
"Commission" means the Securities and Exchange Commission.
"Common Stock" of any Person means any and all shares, interests or other
participations in, and other equivalents (however designated and
4
whether voting or non-voting) of any Person's common stock, whether outstand-
ing on the Issue Date or issued after the Issue Date, and includes, without
limitation, all series and classes of such common stock.
"Company" means the party named as such above until a successor replaces it
in accordance with Article 5 and thereafter means the successor.
"Consolidated Net Worth" of a Person at any date means the Consolidated
Stockholders' Equity of such Person less (a) the amount of any gain resulting,
directly or indirectly, from the extinguishment, retirement or repurchase of
any Indebtedness of such Person or of any of its subsidiaries, (b) any revalu-
ation or other write-ups subsequent to the Issue Date in the book value of any
asset owned by such Person or a Consolidated Subsidiary and (c) any amounts
attributable to the cost of treasury stock and the principal amount of any
promissory notes receivable from the sale of Capital Stock of such Person or
of any of its subsidiaries. Notwithstanding any of the foregoing, net deferred
income tax assets recorded in accordance with Statement of Financial Account-
ing Standards No. 109, Accounting for Income Taxes ("SFAS 109"), shall be cal-
culated without regard to any valuation allowance with respect to such net de-
ferred tax asset recorded by the Company in accordance with SFAS 109.
"Consolidated Stockholders' Equity" as of any date means, with respect to
any Person, the amount by which the assets of such Person and of its subsidi-
aries on a consolidated basis exceed (a) the total liabilities of such Person
and of its subsidiaries on a consolidated basis, plus (b) any redeemable Pre-
ferred Stock of any such Person or any redeemable Preferred Stock of any sub-
sidiary of such issued to any Person other than to such Person or to a wholly
owned subsidiary of such Person, in each case determined in accordance with
GAAP.
"Consolidated Subsidiary" of any Person means a subsidiary which for finan-
cial reporting purposes is or, in accordance with GAAP, should be, accounted
for by such Person as a consolidated subsidiary.
"Convertible Subordinated Notes" means the Convertible Subordinated Notes
issued under this Indenture.
"Conversion Agent" means any Person authorized by the Company to accept Con-
vertible Subordinated Notes for conversion pursuant to this inden-
5
ture and deliver shares of Common Stock (or other securities or property) de-
liverable upon such conversion.
"Conversion Notice" has the meaning specified in Section 12.02.
"Conversion Price" means the initial conversion price specified in the form
of Note in Section 2 of such form, as adjusted in accordance with the provi-
sions of Article 12.
"Daily Market Price" when used with reference to the Common Stock or another
security means the price of a share of Common Stock or such other security on
any date, determined (a) on the basis of the last reported sales price of the
Common Stock or such other security for such date (i) as reported on the com-
posite tape, or similar reporting system, for issues listed on the New York
Stock Exchange (or if the Common Stock or such other security has not been
listed on that exchange, for issues listed on such other national securities
exchange upon which the Common Stock or such other securities are listed as
may be designated by the Board of Directors from time to time for the purposes
hereof) or (ii) if the Common Stock or such other security is not listed or
admitted to trading on any national securities exchange, as reported on the
National Market System of the National Association of Securities Dealers Auto-
mated Quotation System ("Nasdaq") or (b) if there is no such reported sale on
the date in question, on the basis of the average of the closing bid and asked
quotations regular way so reported for such date or (c) if the Common Stock or
security is not listed on any national securities exchange or on the Nasdaq
National Market System, on the basis of the average of the high bid and low
asked quotations regular way on the date in question in the over-the-counter
market as reported by Nasdaq, or if not so quoted, as reported by National
Quotation Bureau, Incorporated or a similar organization.
"Default" means any event that is, or after notice or passage of time or
both would be, an Event of Default (as defined in Section 6.01).
"Designated Senior Indebtedness" means Senior Indebtedness of the Company
now or hereafter outstanding under (i) the Revolving Credit Agreement; (ii)
the Company's 9.35% Senior Notes due 2000 and 9.33% Senior Notes due 2002;
(iii) the Senior Notes; and (iv) any other Senior Indebtedness issued in one
or more substantially concurrent issuances on substantially similar terms, the
aggregate original principal amount which is $50 million or more.
6
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Fair Market Value" or "fair value" means, with respect to any asset or
property or Capital Stock, the price which could be negotiated in an arm's-
length, free market transaction, for cash, between an informed and willing
seller and an informed and willing and able buyer, neither of whom is under
undue pressure or compulsion to complete the transaction. Fair Market Value
shall be determined by the Board of Directors of the Company acting reasonably
and in good faith and shall be evidenced by a written resolution of said Board
of Directors (certified by the Secretary or Assistant Secretary of the Compa-
ny) delivered to the Trustee, provided that if the aggregate non-cash consid-
eration to be received by the Company or any of its subsidiaries from any As-
set Sale shall exceed $10,000,000, then Fair Market Value shall be determined
by an Independent Financial Advisor.
"GAAP" means generally accepted accounting principles set forth in the opin-
ions and pronouncements of the Accounting Principles Board of the American In-
stitute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as may be approved by a significant segment of the accounting
profession of the United States, which are in effect as of the Issue Date.
"incur" means, with respect to any Indebtedness or other obligation of any
Person, to create, issue, incur (by conversion, exchange or otherwise), as-
sume, guarantee or otherwise become liable in respect of such Indebtedness or
other obligation or the recording, as required pursuant to GAAP or otherwise,
of any such Indebtedness or other obligation on the balance sheet of such Per-
son (and "incurrence," "incurred," "incurable" and "incurring" shall have
meanings correlative to the foregoing), provided that the accrual of interest
(whether such interest is payable in cash or in kind) and the accretion of
original issue discount shall not be deemed an incurrence of Indebtedness,
provided, further, that (a) any Indebtedness of a Person existing at the time
such Person becomes (after the Issue Date) a subsidiary (whether by merger,
consolidation, acquisition or otherwise) of the Company shall be deemed to be
incurred by such subsidiary at the time it becomes a subsidiary of the Company
and (b) any amendment, modification or waiver of any document pursuant to
which Indebtedness was previously incurred shall be deemed to be an incurrence
of Indebtedness unless such amendment, modification or waiver
7
does not (i) increase the principal or premium thereof or interest rate
thereon (including by way of original issue discount), (ii) change to an ear-
lier date the Stated Maturity thereof or the date of any scheduled or required
principal payment thereon or the time or circumstances under which such In-
debtedness may or shall be redeemed, (iii) if such Indebtedness is subordi-
nated to the Convertible Subordinated Notes, modify or affect, in any manner
adverse to the holders of the Convertible Subordinated Notes, such subordina-
tion or (iv) if the Company is the obligor thereon, provide that a subsidiary
of the Company not already an obligor thereon shall be an obligor thereon.
"Indebtedness" means, with respect to any Person, at any date, any of the
following, without duplication, (a) any liability, contingent or otherwise, of
such Person (i) for borrowed money (whether or not the recourse of the lender
is to the whole of the assets of such Person or only to a portion thereof),
(ii) evidenced by a note, bond, debenture or similar instrument, (iii) for the
payment of money relating to a Capitalized Lease Obligation or (iv) with re-
spect to an obligation (whether issued or assumed) relating to the deferred
purchase price of property but excluding advances, deposits, partial and pro-
gress payments, unpaid wages and related employee obligations, trade accounts
payable and accrued liabilities in each case arising in the ordinary course of
business that are not overdue by 180 days or more or are being contested in
good faith by appropriate proceedings promptly instituted and diligently con-
ducted; (b) all conditional sale obligations and all obligations under any ti-
tle retention agreement (even if the rights and remedies of the seller under
such agreement in the event of default are limited to repossession or sale of
such property); (c) reimbursement obligations of such Person with respect to
letters of credit and all obligations of such Person in respect of any bank-
er's acceptance or similar credit transaction entered into in the ordinary
course of business; (d) all Indebtedness of others secured by (or for which
the holder of such Indebtedness has an existing right, contingent or other-
wise, to be secured by) any Lien on any asset or property (including, without
limitation, leasehold interests and any other tangible or intangible property)
of such Person, whether or not such Indebtedness is assumed by such Person or
is not otherwise such Person's legal liability, provided that if the obliga-
tions so secured have not been assumed in full by such Person or are otherwise
not such Person's legal liability in full, the amount of such Indebtedness for
the purposes of this definition shall be limited to the lesser of the amount
of such Indebtedness secured by such Lien or the Fair Market Value of the as-
sets or
8
property securing such Lien; and (e) all Indebtedness of others guaranteed
(including all dividends of other Persons the payment of which is guaranteed),
directly or indirectly, by such Person or that is otherwise its legal liabil-
ity or which such Person has agreed to purchase or repurchase or in respect of
which such Person has agreed contingently to supply or advance funds.
"Indenture" means this Indenture as amended or supplemented from time to
time.
"Independent Financial Advisor" means an accounting, appraisal or investment
banking firm of nationally recognized standing that is, in the reasonable and
good faith judgment of the Board of Directors of the Company, qualified to
perform the task for which such firm has been engaged and disinterested and
independent with respect to the Company and its Affiliates.
"Interest Payment Date" means May 15 and November 15 of each year.
"Issue Date" means the date on which the Convertible Subordinated Notes are
originally issued under this Indenture.
"Lien" means, with respect to any Person, any mortgage, pledge, lien, encum-
brance, easement, restriction, covenant, right-of-way, charge or adverse claim
affecting title or resulting in an encumbrance against real or personal prop-
erty of such Person, or a security interest of any kind (including any condi-
tional sale or other title retention agreement, any lease in the nature there-
of, including any sale and leaseback transaction, any option or other similar
agreement to sell, in each case securing obligations of such Person and any
filing of or agreement to give any financing statement under the Uniform Com-
mercial Code (or equivalent statute or statutes) of any jurisdiction other
than to reflect ownership by a third party of property leased to the referent
Person or any of its subsidiaries under a lease that is not in the nature of a
conditional sale or title retention agreement).
"Material Subsidiary" means, at any date of determination, any subsidiary of
the Company that, together with its subsidiaries, (i) for the most recent fis-
cal year of the Company accounted for more than 5% of the consolidated reve-
nues of the Company or (ii) as of the end of such fiscal year, was the owner
of more than 5% of the consolidated assets of the Company, all as set forth on
the most recently available consolidated financial statements of the Company
9
and its Consolidated Subsidiaries for such fiscal year prepared in conformity
with generally accepted accounting principles as then in effect.
"Maturity Date" means May , 2004.
"Net Cash Proceeds" means, with respect to any Asset Sale, the proceeds of
such Asset Sale in the form of cash or Cash Equivalents, including payments in
respect of deferred payment obligations (to the extent corresponding to the
principal, but not interest, component thereof) when received in the form of
cash or Cash Equivalents (except to the extent such obligations are financed
or sold with recourse to the Company or any subsidiary of the Company) and
proceeds from the conversion of other property received when converted to cash
or Cash Equivalents, net of (a) reasonable third-party brokerage commissions
and other reasonable third-party fees and expenses (including fees and ex-
penses of counsel and investment bankers) related to such Asset Sale, (b) pro-
visions for all taxes as a result of such Asset Sale computed on a consoli-
dated basis reflecting consolidated results of operations of the Company and
its subsidiaries, taken as a whole, (c) payments made to repay Indebtedness or
any other obligation outstanding at the time of such Asset Sale that was in-
curred in accordance with this Indenture and that either (i) is secured by a
Lien incurred in accordance with this Indenture on the property or assets sold
or (ii) is required to be paid as a result of such sale in each case to the
extent actually repaid in cash and (d) appropriate amounts to be provided by
the Company or any subsidiary of the Company as a reserve against liabilities
associated with such Asset Sale, including, without limitation, pension and
other post-employment benefit liabilities, liabilities related to environmen-
tal matters and liabilities under any indemnification obligations associated
with such Asset Sale, all as determined in conformity with generally accepted
accounting principles as then in effect. For purposes of this definition and
Section 4.05 "cash" means U.S. dollars or such money as is freely and readily
convertible into U.S. dollars.
"Officer" means the Chairman of the Board, the Chief Executive Officer, the
President, the Chief Financial Officer, the Chief Accounting Officer, any Ex-
ecutive Vice President, Senior Vice President or Vice President, the Treasur-
er, any other executive officer, the Secretary and any Assistant Treasurer or
any Assistant Secretary of the Company.
10
"Officers' Certificate" means a certificate signed by two Officers, one of
whom must be the principal executive officer, principal financial officer, the
treasurer or principal accounting officer of the Company.
"Opinion of Counsel" means a written opinion from legal counsel who may be
an employee of or counsel to the Company or the Trustee except to the extent
otherwise indicated in this Indenture.
"Permitted Program Investment" means an investment in design, engineering,
tooling or similar costs related to a program undertaken by the Company in the
ordinary course of its business.
"Person" means any individual, corporation, partnership, joint venture,
trust, estate, unincorporated organization or government or any agency or po-
litical subdivision thereof.
"Plan of Liquidation" means a plan (including by operation of law) that pro-
vides for, contemplates or the effectuation of which is preceded or accompa-
nied by (whether or not substantially contemporaneously) (i) the sale, lease,
conveyance or other disposition of all or substantially all of the assets of
the Company otherwise than as an entirety or substantially as an entirety and
(ii) the distribution of all or substantially all of the proceeds of such
sale, lease, conveyance or other disposition and all or substantially all of
the remaining assets of the Company to holders of capital stock of the Compa-
ny.
"Pooling and Servicing Agreement" means the Pooling and Servicing Agreement
dated as of December 23, 1992, among the Company, the Company's wholly owned
subsidiary RI Receivables, Inc. and Bankers Trust Company, as trustee on be-
half of the Certificateholders (as defined therein), and related documentation
and any extension, renewal, modification, restatement or replacement thereof
(in whole or in part), as the same may be amended, supplemented or otherwise
modified from time to time; provided, however, the investors in any such re-
ceivables program shall not obtain an interest in receivables sold under such
program which exceeds $70 million in aggregate principal amount at any one
time.
"Preferred Stock" means the Capital Stock of any Person (other than the Com-
mon Stock of such Person) of any class or classes (however designated) that
ranks prior, as to the payment of dividends or as to the distribution of
11
assets upon any voluntary or involuntary liquidation, dissolution or winding-
up of such Person, to shares of Capital Stock of any other class of such Per-
son.
"pro forma" means, with respect to any calculation made or required to be
made pursuant to the terms of this Indenture, a calculation in accordance with
Article 11 of Regulation S-X under the Securities Act.
"Prospectus" means the Company's final prospectus dated , 1994 in respect of
the public offering of the Convertible Subordinated Notes.
"Qualified Capital Stock" means, with respect to any Person, any Capital
Stock of such Person that is not Disqualified Capital Stock or convertible
into or exchangeable or exercisable for Disqualified Capital Stock and in-
cludes Rights and other securities issuable under the Company's Amended and
Restated Rights Agreement, dated as of April 6, 1990, between the Company and
The First National Bank of Chicago, as Rights Agent, as such agreement may be
amended or supplemented from time to time.
"redemption date" when used with respect to any of the Convertible Subordi-
nated Notes to be redeemed, means the date fixed by the Company for such re-
demption pursuant to this Indenture and the Convertible Subordinated Notes.
"redemption price" when used with respect to any of the Convertible Subordi-
nated Notes to be redeemed, means the price fixed for such redemption pursuant
to this Indenture and the Convertible Subordinated Notes.
"Regular Record Date" means the first or immediately preceding
each interest payment date.
"Representative" means the Bank Agent and each trustee, agent or other rep-
resentative of the holders of any class of Senior Indebtedness (or, with re-
spect to any class of Senior Indebtedness which does not have any such trust-
ee, agent or other representative, any holder of such Senior Indebtedness act-
ing with the consent of the required lenders necessary to bind such class of
Senior Indebtedness) who has been so identified in writing to the Trustee and
the Company provided, however that solely for the purposes of (S) 11.03 here-
of, (i) in the case of the Company's 9.33% Senior Notes, holders, acting as a
group, who represent in writing to the Trustee and the Company that they are
owners of record of at least 66 2/3% in interest of the Company's outstanding
9.33% Senior Notes, or in the case of the 9.35% Senior Notes, holders, acting
as a group, who represent in writing to the Trustee and the Company that they
12
are the owners of record of at least 66 2/3% in interest of the Company's out-
standing 9.35% Senior Notes.
"Revolving Credit Agreement" means the Credit Agreement dated as of April
26, 1989, among the Company, the lenders party thereto, and the Bank Agent,
and any agreement governing Indebtedness incurred to refund or refinance the
borrowings, letters of credit and commitments then outstanding or permitted to
be outstanding under the Revolving Credit Agreement, in each case together
with the related notes and any other instruments and agreements executed from
time to time in connection therewith, and in each case as amended, modified,
supplemented, extended, renewed, restated, refunded, replaced or refinanced
(in whole or in part, and without limitation as to amount, terms, conditions,
covenants and other provisions) from time to time.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Notes" means the % Senior Notes due 2003 of the Company offered
concurrently with the Convertible Subordinated Notes.
"Senior Note Indenture" means that certain indenture by and between the Com-
pany and IBJ Schroder Bank & Trust Company, as Trustee, governing the Senior
Notes as amended or supplemented from time to time.
"Senior Indebtedness" means all present or future Indebtedness of the Com-
pany described in clauses (a)(i), (a)(ii), (a)(iv) and (c) of the definition
of Indebtedness, created, incurred, assumed or, except to the extent described
below, guaranteed (to the extent of the guarantee) by the Company (and all re-
newals, modifications, extensions or refundings thereof), together with all
other obligations owing in connection therewith, including principal, interest
(including interest accruing on any such indebtedness which is Designated Se-
nior Indebtedness after the filing of a petition by or against the Company un-
der any bankruptcy law, whether or not the claim for such interest is allowed
as a claim after such filing in any proceeding under such bankruptcy law),
premium, if any, fees, costs, expenses and indemnities unless the instrument
under which such Indebtedness is created, incurred, assumed or guaranteed pro-
vides that such Indebtedness is not senior or superior in right of payment to
the Convertible Subordinated Notes. Notwithstanding anything to the contrary
in the foregoing, Senior Indebtedness shall not include (a) any Indebtedness
of the Company owing to any of its subsidiaries, (b) Capitalized Lease Obliga-
tions, (c) Indebtedness or other obligations in respect of the Pool-
13
ing and Servicing Agreement, (d) the Company's 9.25% Subordinated Debentures
due 2017 and its 7% Convertible Subordinated Debentures due 2012 and (e) any
advances, deposits or partial progress payments, payables, unpaid wages and
related employee obligations, trade accounts and accrued liabilities.
"Stated Maturity" means, with respect to any security or Indebtedness, the
date specified therein as the fixed date on which any principal of such secu-
rity or Indebtedness is due and payable, including pursuant to any mandatory
redemption provision (but excluding any provision providing for the repurchase
thereof at the option of the holder thereof).
A "subsidiary" of any Person means (a) a corporation a majority of whose
Voting Stock is at the time, directly or indirectly, owned by such Person, by
one or more subsidiaries of such Person or by such Person and one or more sub-
sidiaries of such Person or (b) any other Person (other than a corporation) in
which such Person, one or more subsidiaries of such Person or such Person and
one or more subsidiaries of such Person, directly or indirectly, at the date
of determination thereof, have (i) at least a majority ownership interest or
(ii) the power to elect or direct the election of the directors or other gov-
erning body of such Person.
"Time of Determination" means the time and date of the earlier of (i) the
record date or determining stockholders entitled to receive their rights, war-
rants or distributions referred to in Section 12.04(b) and (c), or (ii) the
commencement of "ex-dividend" trading on the exchange or market referred to in
the definition of the term "Daily Market Price."
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code (S) (S) 77aaa-
77-bbbb) as in effect on the date of execution of this Indenture, except as
provided in Section 9.03.
"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 the Chairman of the Board, the President or any other
officer or assistant officer of the Trustee assigned by the Trustee to admin-
ister its corporation trust matters.
"Voting Stock" means, with respect to any Person, securities of any class or
classes of Capital Stock of such Person entitling the holders thereof
14
(whether at all times or only so long as no senior class of stock has voting
power by reason of any contingency) to vote in the election of members of the
board of directors or other governing body of such Person.
Section 1.02 Other Definitions.
DEFINED IN
TERM SECTION
---- ----------
"Asset Sale Offer"............................................... 4.05
"Asset Sale Offer Amount"........................................ 4.05
"Asset Sale Offer Payment Date".................................. 4.05
"Asset Sale Offer Termination Date".............................. 4.05
"Asset Sale Offer Trigger Date".................................. 4.05
"Bankruptcy Law"................................................. 6.01
"business day"................................................... 10.07
"Change of Control Date"......................................... 4.08
"Change of Control Offer"........................................ 4.08
"Change of Control Offer Payment Date"........................... 4.08
"Change of Control Offer Termination Date"....................... 4.08
"Custodian"...................................................... 6.01
"Event of Default"............................................... 6.01
"Expiration Time"................................................ 12.04
"Legal Holiday".................................................. 10.07
"non-electing share"............................................. 12.09
"Other Subordinated Notes"....................................... 11.02
"Paying Agent"................................................... 2.03
"Purchased Shares"............................................... 12.04
"Registrar"...................................................... 2.03
"United States Government Obligations"........................... 8.01
Section 1.03 Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following meanings:
"Commission" means the Commission;
"indenture securities" means the Convertible Subordinated Notes;
"indenture security holder" means a holder of a Convertible Subordinated
Note;
"indenture to be qualified" means this Indenture;
15
"indenture trustee" or "institutional trustee" means the Trustee; and
"obligor" on the Convertible Subordinated Notes means the Company or any
other obligor on the Convertible Subordinated Notes.
All other terms in this Indenture that are defined by the TIA, defined by
TIA reference to another statute or defined by Commission rule under the TIA
have the meanings so assigned to them.
Section 1.04 Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned to
it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the plural include
the singular; and
(5) the male, female and neuter genders include one another.
ARTICLE 2
The Convertible Subordinated Notes
Section 2.01 Form and Dating.
The Convertible Subordinated Notes and the Trustee's certificate of authen-
tication relating thereto shall be substantially in the form set forth in Ex-
hibit A, which is part of this Indenture, with such appropriate insertions,
omissions, substitutions and other variations as are required or permitted by
this Indenture. The Convertible Subordinated Notes may have notations, legends
or endorsements required by law, stock exchange rule or usage. The Company
shall approve the form of the Convertible Subordinated Notes and any notation,
legend or endorsement on them. Each Convertible Subordinated Note shall be
dated the date of its authentication.
The terms and provisions contained in the Convertible Subordinated Notes
shall constitute, and are hereby expressly made, a part of this Indenture and,
to the extent applicable, the Company and the Trustee, by their execution
16
and delivery of this Indenture, expressly agree to such terms and provisions
and to be bound thereby.
Section 2.02 Execution and Authentication.
Two Officers shall sign the Convertible Subordinated Notes for the Company
by manual or facsimile signature. The Company's seal shall be reproduced on
the Convertible Subordinated Notes.
If an Officer whose signature is on a Convertible Subordinated Note no
longer holds that office at the time the Convertible Subordinated Note is au-
thenticated, the Convertible Subordinated Note shall nevertheless be valid.
A Convertible Subordinated Note shall not be valid until authenticated by
the manual signature of the Trustee. The signature shall be conclusive evi-
dence that the Convertible Subordinated Note has been authenticated under this
Indenture.
Upon a written order of the Company signed by an Officer of the Company, the
Trustee shall authenticate Convertible Subordinated Notes for original issue
up to the aggregate principal amount stated in paragraph 4 of the Convertible
Subordinated Notes. The aggregate principal amount of Convertible Subordinated
Notes outstanding at any time may not exceed that amount except as provided in
Section 2.07.
The Convertible Subordinated Notes shall be issuable only in registered form
without coupons and only in denominations of $1,000 or any integral multiple
thereof.
The Trustee may appoint an authenticating agent acceptable to the Company to
authenticate Convertible Subordinated Notes. An authenticating agent may au-
thenticate Convertible Subordinated Notes whenever the Trustee may do so. Each
reference in this Indenture to authentication by the Trustee includes authen-
tication by such agent. An authenticating agent has the same right as an Agent
to deal with the Company or an Affiliate of the Company.
Section 2.03 Registrar and Paying Agent.
The Company shall maintain or cause to be maintained in the Borough of Man-
hattan, New York, New York (the "New York Office"), and in such other loca-
tions as it shall determine, an office or agency: (i) where securities
17
may be presented for registration of transfer or for exchange ("Registrar");
(ii) where Convertible Subordinated Notes may be presented for payment ("Pay-
ing Agent"); and (iii) where notices and demand to or upon the Company in re-
spect of Convertible Subordinated Notes and this Indenture may be served by
the holders of the Convertible Subordinated Notes. The Registrar shall keep a
register of the Convertible Subordinated Notes and of their transfer and ex-
change. The Company may appoint one or more co-registrars and one or more ad-
ditional paying agents. The term "Paying Agent" includes any additional paying
agent. The Company may change any Paying Agent, Registrar or co-registrar
without prior notice. The Company shall notify the Trustee of the name and ad-
dress of any Agent not a party to this Indenture and shall enter into an ap-
propriate agency agreement with any Registrar, Paying Agent or co-registrar
not a party to this Indenture. The agreement shall implement the provisions of
this Indenture that relate to such Agent. The Company or any of its subsidiar-
ies may act as Paying Agent, Registrar or co-registrar, except that for pur-
poses of Articles 3 and 8 and Sections 4.05 and 4.08, neither the Company nor
any of its subsidiaries shall act as Paying Agent. If the Company fails to ap-
point or maintain another entity as Registrar or Paying Agent, the Trustee
shall act as such, and the Trustee shall initially act as such. The Trustee
shall cause the New York Office to be maintained as long as it acts as Regis-
trar or Paying Agent.
Section 2.04 Paying Agent To Hold Money in Trust.
The Company shall require each Paying Agent (other than the Trustee, who
hereby so agrees), to agree in writing that the Paying Agent will hold in
trust for the benefit of holders of the Convertible Subordinated Notes or the
Trustee all money held by the Paying Agent for the payment of principal or in-
terest on the Convertible Subordinated Notes, and will notify the Trustee of
any default by the Company in respect of making any such payment. While any
such default continues, the Trustee may require a Paying Agent to pay all
money held by it to the Trustee. The Company at any time may require a Paying
Agent to pay all money held by it to the Trustee. Upon payment over to the
Trustee, the Paying Agent (if other than the Company or a subsidiary of the
Company) shall have no further liability for the money. If the Company or a
subsidiary of the Company acts as Paying Agent, it shall segregate and hold in
a separate trust fund for the benefit of the holders of the Convertible Subor-
dinated Notes all money held by it as Paying Agent.
18
Section 2.05 Holder Lists.
The Trustee shall preserve in as current a form as is reasonably practicable
the most recent list available to it of the names and addresses of holders of
Convertible Subordinated Notes. If the Trustee is not the Registrar, the Com-
pany shall furnish to the Trustee at least seven days before each interest
payment date and at such other times as the Trustee may request in writing a
list in such form and as of such date as the Trustee may reasonably require of
the names and addresses of holders of Convertible Subordinated Notes.
Section 2.06 Transfer and Exchange.
Where Convertible Subordinated Notes are presented to the Registrar or a co-
registrar with a request to register a transfer or to exchange them for an
equal principal amount of Convertible Subordinated Notes for other denomina-
tions, the Registrar shall register the transfer or make the exchange if its
requirements for such transactions are met. To permit registrations of trans-
fers and exchanges, the Company shall issue and the Trustee shall authenticate
Convertible Subordinated Notes at the Registrar's request. No service charge
shall be made for any registration of transfer or exchange (except as other-
wise expressly permitted herein), but the Company may require payment of a sum
sufficient to cover any transfer tax or similar governmental charge payable
upon exchanges pursuant to Sections 2.10, 3.06 or 9.05.
The Company shall not be required (i) to issue, register the transfer of or
exchange Convertible Subordinated Notes during a period beginning at the open-
ing of business 15 days before the day of any selection of Convertible Subor-
dinated Notes for redemption under Section 3.02 and ending at the close of
business on the day of selection, or (ii) to register the transfer or exchange
of any Convertible Subordinated Note so selected for redemption in whole or in
part, except the unredeemed portion of any Convertible Subordinated Note being
redeemed in part.
Section 2.07 Replacement Convertible Subordinated Notes.
If the holder of a Convertible Subordinated Note claims that the Convertible
Subordinated Note has been lost, destroyed or wrongfully taken, the Company
shall issue and the Trustee shall authenticate a replacement Convertible Sub-
ordinated Note if the Trustee's requirements are met. If required by the
Trustee or the Company as a condition of receiving a replacement Convertible
19
Subordinated Note, the holder of a Convertible Subordinated Note must provide
an indemnity bond sufficient, in the judgment of both the Company and the
Trustee, to fully protect the Company, the Trustee, any Agent and any authen-
ticating agent from any loss which any of them may suffer if the Convertible
Subordinated Note is replaced. The Company and the Trustee may charge the rel-
evant holder for their expenses in replacing any Convertible Subordinated
Note.
Every replacement Convertible Subordinated Note is an additional obligation
of the Company.
Section 2.08 Outstanding Convertible Subordinated Notes.
The Convertible Subordinated Notes outstanding at any time are all the Con-
vertible Subordinated Notes properly authenticated by the Trustee except for
those cancelled by the Trustee, those delivered to it for cancellation, and
those described in this Section as not outstanding.
If a Convertible Subordinated Note is replaced pursuant to Section 2.07, it
ceases to be outstanding unless the Trustee receives proof satisfactory to it
that the replaced Convertible Subordinated Note is held by a bona fide pur-
chaser.
If Convertible Subordinated Notes are considered paid under Section 4.01,
they cease to be outstanding and interest on them ceases to accrue.
A Convertible Subordinated Note does not cease to be outstanding because the
Company or an Affiliate of the Company holds the Convertible Subordinated
Note.
Section 2.09 When Treasury Convertible Subordinated Notes Disregarded.
In determining whether the holders of the required principal amount of Con-
vertible Subordinated Notes have concurred in any direction, waiver or con-
sent, Convertible Subordinated Notes 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 re-
lying on any such direction, waiver or consent, only Convertible Subordinated
Notes which the Trustee knows are so owned shall be so disregarded.
20
Section 2.10 Temporary Convertible Subordinated Notes.
Until definitive Convertible Subordinated Notes are ready for delivery, the
Company may prepare and the Trustee shall authenticate temporary Convertible
Subordinated Notes. Temporary Convertible Subordinated Notes shall be substan-
tially in the form of definitive Convertible Subordinated Notes but may have
variations that the Company considers appropriate for temporary Convertible
Subordinated Notes. If temporary Convertible Subordinated Notes are issued,
the Company will cause definitive Convertible Subordinated Notes to be pre-
pared without unreasonable delay. After the preparation of definitive Convert-
ible Subordinated Notes, the temporary Convertible Subordinated Notes shall be
exchangeable for definitive Convertible Subordinated Notes upon surrender of
the temporary Convertible Subordinated Notes at any office or agency of the
Company designated pursuant to Section 2.03 without charge to the holder of
the Convertible Subordinated Note. Upon surrender for cancellation of any one
or more temporary Convertible Subordinated Notes the Company shall execute and
the Trustee shall authenticate and deliver in exchange therefor a like princi-
pal amount of definitive Convertible Subordinated Notes of authorized denomi-
nations. Until so exchanged, the temporary Convertible Subordinated Notes
shall in all respects be entitled to the same benefits under this Indenture as
definitive Convertible Subordinated Notes.
Section 2.11 Cancellation.
The Company at any time may deliver Convertible Subordinated Notes to the
Trustee for cancellation. The Registrar and Paying Agent shall forward to the
Trustee any Convertible Subordinated Notes surrendered to them for registra-
tion of transfer, exchange or payment. The Trustee and no one else shall can-
cel Convertible Subordinated Notes surrendered for registration of transfer,
exchange, payment, replacement or cancellation and shall dispose of cancelled
Convertible Subordinated Notes as the Company directs, provided that the
Trustee shall not be required to destroy such Convertible Subordinated Notes.
The Company may not issue new Convertible Subordinated Notes to replace Con-
vertible Subordinated Notes that it has paid or that have been delivered to
the Trustee for cancellation.
Section 2.12 Defaulted Interest.
If the Company fails to make a payment of interest on the Convertible Subor-
dinated Notes, it shall pay such defaulted interest plus, to the extent
21
lawful, any interest payable on the defaulted interest. It may pay such de-
faulted interest, plus any such interest payable on it, to the persons who are
holders of Convertible Subordinated Notes 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 holders of the Convert-
ible Subordinated Notes a notice that states the record date, payment date and
amount of such interest to be paid.
Section 2.13 CUSIP Number.
The Company in issuing the Convertible Subordinated Notes may use a "CUSIP"
number, and if so, such CUSIP number shall be included in notices of redemp-
tion or exchange as a convenience to holders of Convertible Subordinated
Notes; provided, however, that any such notice may state that no representa-
tion is made as to the correctness or accuracy of the CUSIP number printed in
the notice or on the Convertible Subordinated Notes and that reliance may be
placed only on the other identification numbers printed on the Convertible
Subordinated Notes. The Company will promptly notify the Trustee of any change
in the CUSIP number.
ARTICLE 3
Redemption
Section 3.01 Notices to Trustee.
If the Company elects to redeem Convertible Subordinated Notes pursuant to
the optional redemption provisions of paragraph 5 of the Convertible Subordi-
nated Notes, it shall notify the Trustee of the redemption date and the prin-
cipal amount of Convertible Subordinated Notes to be redeemed. The redemption
price shall be the amount determined pursuant to paragraph 5 of the Convert-
ible Subordinated Notes.
The Company shall give each notice provided for in this Section at least 50
days before the redemption date (unless a shorter notice period shall be sat-
isfactory to the Trustee).
Section 3.02 Selection of Convertible Subordinated Notes To Be Redeemed.
If less than all the Convertible Subordinated Notes are to be redeemed, the
Trustee shall select the Convertible Subordinated Notes to be redeemed by
22
lot or pro rata or by a method that complies with the requirements of any ex-
change on which the Convertible Subordinated Notes are listed that the Trustee
considers fair and appropriate. The Trustee shall make the selection not more
than 75 days and not less than 30 days before the redemption date from Con-
vertible Subordinated Notes outstanding not previously called for redemption.
The Trustee may select for redemption portions of the principal of Convertible
Subordinated Notes that have a denomination larger than $1,000. Convertible
Subordinated Notes and portions thereof will be redeemed in the amount of
$1,000 or integral multiples of $1,000. Provisions of this Indenture that ap-
ply to Convertible Subordinated Notes called for redemption also apply to por-
tions of Convertible Subordinated Notes called for redemption. The Trustee
will make the selection of Convertible Subordinated Notes outstanding and not
previously called for redemption. The Trustee shall notify the Company
promptly of the Convertible Subordinated Notes or portions of Convertible Sub-
ordinated Notes to be called for redemption.
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 Convertible
Subordinated Notes are to be redeemed.
The notice shall identify the Convertible Subordinated Notes to be redeemed
and shall state:
(1) the redemption date;
(2) the redemption price;
(3) if any Convertible Subordinated Note is being redeemed in part, the
portion of the principal amount of such Convertible Subordinated Note to
be redeemed and that, after the redemption date, upon surrender of such
Convertible Subordinated Note, a new Convertible Subordinated Note or Con-
vertible Subordinated Notes in principal amount equal to the unredeemed
portion will be issued;
(4) that Convertible Subordinated Notes called for redemption must be
surrendered to the Paying Agent to collect the redemption price;
(5) that interest on Convertible Subordinated Notes called for redemp-
tion and for which funds have been set apart for payment, ceases to accrue
on and after the redemption date (unless the Company defaults in the pay-
ment of the redemption price);
23
(6) the paragraph of the Convertible Subordinated Notes pursuant to
which the Convertible Subordinated Notes are being redeemed;
(7) the aggregate principal amount of Convertible Subordinated Notes
that are being redeemed;
(8) the CUSIP number of the Convertible Subordinated Notes (provided
that the disclaimer permitted by Section 2.13 may be made);
(9) the name and address of the Paying Agent; and
(10) that Convertible Subordinated Notes called for redemption may be
converted at any time prior to the close of business on the redemption
date and if not converted prior to the close of business on such date, the
right of conversion will be lost.
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, Convertible Subordinated Notes called
for redemption become due and payable on the redemption date at the price set
forth in the Convertible Subordinated Note.
Section 3.05 Deposit of Redemption Price.
On or before the redemption date, the Company shall deposit with the Trustee
or with the Paying Agent money in immediately available funds sufficient to
pay the redemption price of and accrued interest on all Convertible Subordi-
nated Notes to be redeemed on that date. The Trustee or the Paying Agent shall
return to the Company any money not required for that purpose.
Section 3.06 Convertible Subordinated Notes Redeemed in Part.
Upon surrender of a Convertible Subordinated Note that is redeemed in part,
the Company shall issue and the Trustee shall authenticate for the holder of a
Convertible Subordinated Note at the expense of the Company a new Convertible
Subordinated Note equal in principal amount to the unredeemed portion of the
Convertible Subordinated Note surrendered.
24
ARTICLE 4
Covenants
Section 4.01 Payment of Convertible Subordinated Notes.
The Company shall pay the principal of and interest on the Convertible Sub-
ordinated Notes on the dates and in the manner provided in the Convertible
Subordinated Notes. Principal and interest shall be considered paid on the
date due if the Trustee or Paying Agent (other than the Company or a subsidi-
ary of the Company) holds as of 1:00 P.M. Eastern Time on that date immedi-
ately available funds designated for and sufficient to pay all principal and
interest then due, provided, however, that money held by the Agent for the
benefit of holders of Senior Indebtedness pursuant to the provisions of Arti-
cle 11 hereof or the payment of which to the holders of the Convertible Subor-
dinated Notes is prohibited by Article 11 shall not be considered to be desig-
nated for the payment of any principle of or interest on the Convertible Sub-
ordinated Notes within the meaning of this Section 4.01.
To the extent lawful, the Company shall pay interest (including post-peti-
tion interest in any proceeding under any Bankruptcy Law) on (i) overdue prin-
cipal, at the rate borne by Convertible Subordinated Notes, compounded
semiannually; and (ii) overdue installments of interest (without regard to any
applicable grace period) at the same rate, compounded semiannually.
Section 4.02 Commission Reports.
So long as any Convertible Subordinated Note is outstanding, the Company
shall file with the Commission and, within 15 days after it files them with
the Commission, file with the Trustee and thereafter mail promptly or cause
the Trustee to mail promptly to the holders of Convertible Subordinated Notes
at their addresses as set forth in the register of the Convertible Subordi-
nated Notes copies of the annual reports and of the information, documents and
other reports which the Company is required to file with the Commission pursu-
ant to Section 13 or 15(d) of the Exchange Act or which the Company would be
required to file with the Commission if the Company then had a class of secu-
rities registered under the Exchange Act. In addition, the Company shall cause
its annual report to stockholders and any quarterly or other financial reports
furnished to its stockholders generally to be filed with the Trustee, no later
than the date such materials are mailed or made available to the Company's
stockholders, and thereafter mailed promptly to the holders of
25
Convertible Subordinated Notes at their addresses as set forth in the register
of Convertible Subordinated Notes.
Section 4.03 Compliance Certificate.
The Company shall deliver to the Trustee, within 60 days after the end of
the first three fiscal quarters and within 120 days after the end of each fis-
cal year of the Company, an Officers' Certificate stating that a review of the
activities of the Company and its subsidiaries during the preceding fiscal pe-
riod has been made under the supervision of the signing Officers with a view
to determining whether the Company has fully performed its obligations under
this Indenture and further stating, as to each such Officer signing such cer-
tificate, that to the best of his or her knowledge the Company has kept, ob-
served, performed and fulfilled each and every covenant contained in this In-
denture and is not in default in the performance or observance of any of the
terms and conditions hereof (or, if any Default or Event of Default shall have
occurred, describing all such Defaults or Events of Default of which he or she
may have knowledge) and that to the best of his or her knowledge no event has
occurred and remains in existence by reason of which payments on account of
the principal of or interest on the Convertible Subordinated Notes are prohib-
ited.
The Company shall, so long as any of the Convertible Subordinated Notes are
outstanding, deliver to the Trustee, forthwith upon becoming aware of any De-
fault, Event of Default or default in the performance of any term or condition
in this Indenture, without regard to any period of grace or requirement of no-
tice provided hereunder, an Officers' Certificate specifying such Default,
Event of Default or default.
Section 4.04 Maintenance of Office or Agency.
The Company shall maintain or cause to be maintained the office or agency
required under Section 2.03. The Company shall give prompt written notice to
the Trustee of the location, and any change in the location, of such office or
agency not maintained by the Trustee.
The Company may also from time to time designate one or more other offices
or agencies where the Convertible Subordinated Notes may be presented or sur-
rendered for any or all such purposes and may from time to time rescind such
designation; provided, however, that no such designation or rescission
26
shall in any manner relieve the Company of its obligation to maintain or cause
to be maintained an office or agency in the City of New York for such purpose.
Section 4.05 Limitation on Sale of Assets.
The Company will not, and will not permit any of its subsidiaries to, con-
summate any Asset Sale unless such Asset Sale is for at least Fair Market
Value and at least 80% of the consideration therefrom received by the Company
or such subsidiary is in the form of cash or Cash Equivalents.
Following any Asset Sale, an amount equal to the Net Cash Proceeds of such
Asset Sale shall be applied by the Company or such subsidiary within 365 days
of the date of the Asset Sale, at its election, to either: (a) the payment of
Senior Indebtedness; provided, however, any Net Cash Proceeds which are ap-
plied to reduce Indebtedness under the Revolving Credit Agreement shall result
in a permanent reduction of the borrowing availability thereunder; (b) make
any Permitted Program Investment or any other investment in capital assets us-
able in the Company's or its subsidiaries' lines of business or in an asset or
business in the same line of business as the Company; or (c) a combination of
payment and investment permitted by the foregoing clauses (a) and (b). On the
earlier of (A) the 366th day after the date of an Asset Sale or (B) such date
as the Board of Directors of the Company or of such subsidiary determines (as
evidenced by a written resolution of said Board of Directors) not to apply an
amount equal to the Net Cash Proceeds relating to such Asset Sale as set forth
in the immediately preceding sentence (each of (A) and (B), an "Asset Sale Of-
fer Trigger Date"), the Company or such subsidiary shall be obligated to apply
an amount equal to aggregate amount of Net Cash Proceeds which have not been
applied on or before such Asset Sale Offer Trigger Date as permitted by the
foregoing clauses (a), (b) and (c) of the immediately preceding sentence (each
an "Asset Sale Offer Amount") to make an offer to purchase for cash (the "As-
set Sale Offer") from all holders of Convertible Subordinated Notes on a pro
rata basis that amount of Convertible Subordinated Notes equal to the Asset
Sale Offer Amount at a price equal to 100% of the principal amount of the Con-
vertible Subordinated Notes to be repurchased, plus accrued and unpaid inter-
est thereon to the date of repurchase. Notwithstanding the foregoing, if an
Asset Sale Offer Amount is less than $10 million, the application of such As-
set Sale Offer Amount to an Asset Sale Offer may be deferred until such time
as such Asset Sale Offer Amount plus the aggregate amount of all Asset Sale
Offer Amounts arising subsequent to such
27
Asset Sale Offer Trigger Date from all Asset Sales by the Company and its sub-
sidiaries aggregates at least $10 million, at which time the Company or such
subsidiary shall apply all Asset Sale Offer Amounts that have been so deferred
to make an Asset Sale Offer (the first date the aggregate of all such deferred
Asset Sale Offer Amounts is equal to $10 million or more shall be deemed to be
an "Asset Sale Offer Trigger Date").
In the event of the transfer of substantially all (but not all) of the prop-
erty and assets of the Company as an entirety to a Person in a transaction
permitted under Section 5.01, the successor corporation shall be deemed to
have sold the properties and assets of the Company not so transferred for pur-
poses of this covenant, and shall comply with the provisions of this covenant
with respect to such deemed sale as if it were an Asset Sale.
Each Asset Sale Offer shall be mailed to the holders of the Convertible Sub-
ordinated Notes at the addresses shown on the register of holders maintained
by the Registrar with a copy to the Trustee and the Paying Agent, within 10
days following the applicable Asset Sale Offer Trigger Date, and shall comply
with each of the procedures for notice set forth below. Each Asset Sale Offer
shall remain open until a specified date (the "Asset Sale Offer Termination
Date") which is at least 20 business days from the date such Asset Sale Offer
is mailed. During the period specified in the Asset Sale Offer, holders of
Convertible Subordinated Notes may elect to tender their Convertible Subordi-
nated Notes in whole or in part in integral multiples of $1,000 in exchange
for cash. Payment shall be made by the Company (or applicable subsidiary) in
respect of Convertible Subordinated Notes properly tendered pursuant to this
Section on a specified business day (the "Asset Sale Offer Payment Date")
which shall be no earlier than three business days after the Asset Sale Offer
Termination Date and no later then 60 days after such applicable Asset Sale
Offer Trigger Date. To the extent holders of Convertible Subordinated Notes
properly tender Convertible Subordinated Notes in an amount exceeding the As-
set Sale Offer Amount, Convertible Subordinated Notes of tendering holders
will be repurchased on a pro rata basis (based on amounts tendered).
The notice, which shall govern the terms of the Asset Sale Offer, shall in-
clude such disclosures as are required by law and shall state:
(a) that the Asset Sale Offer is being made pursuant to this Section
4.05;
28
(b) the purchase price (including the amount of the accrued interest, if
any) for each Convertible Subordinated Note, the Asset Sale Offer Termina-
tion Date and the Asset Sale Offer Payment Date;
(c) that any Convertible Subordinated Note not tendered or accepted for
payment will continue to accrue interest in accordance with the terms
thereof;
(d) that, unless the Company defaults on making the payment, any Con-
vertible Subordinated Note accepted for payment pursuant to the Asset Sale
Offer shall cease to accrue interest after the Asset Sale Offer Payment
Date;
(e) that holders electing to have Convertible Subordinated Notes pur-
chased pursuant to an Asset Sale Offer will be required to surrender their
Convertible Subordinated Notes to the Paying Agent at the address speci-
fied in the notice prior to 5:00 p.m., New York City time, on the Asset
Sale Offer Termination Date and must complete any form letter of transmit-
tal proposed by the Company and acceptable to the Trustee and the Paying
Agent;
(f) that holders of Convertible Subordinated Notes will be entitled to
withdraw their election if the Paying Agent receives, not later than 5:00
p.m., New York City time, on the Asset Sale Offer Termination Date, a
tested telex, facsimile transmission or letter setting forth the name of
the holder, the principal amount of Convertible Subordinated Notes the
holder delivered for purchase, the Convertible Subordinated Note certifi-
cate number (if any) and a statement that such holder is withdrawing his
election to have such Convertible Subordinated Notes purchased;
(g) that if Convertible Subordinated Notes in a principal amount in ex-
cess of the Asset Sale Offer Amount are tendered pursuant to the Asset
Sale Offer, the Company shall purchase Convertible Subordinated Notes on a
pro rata basis among the Convertible Subordinated Notes tendered (with
such adjustments as may be deemed appropriate by the Company so that only
Convertible Subordinated Notes in denominations of $1,000 or integral mul-
tiples of $1,000 shall be acquired);
(h) that holders whose Convertible Subordinated Notes are purchased only
in part will be issued new Convertible Subordinated Notes equal in princi-
pal amount to the unpurchased portion of the Convertible Subordinated
Notes surrendered; and
29
(i) the instructions that holders must follow in order to tender their
Convertible Subordinated Notes.
On the Asset Sale Offer Termination Date, the Company shall (i) accept for
payment Convertible Subordinated Notes or portions thereof tendered pursuant
to the Asset Sale Offer, (ii) deposit with the Paying Agent money sufficient
to pay the purchase price of all Convertible Subordinated Notes or portions
thereof so tendered and accepted and (iii) deliver to the Trustee the Convert-
ible Subordinated Notes so accepted together with an Officers' Certificate
setting forth the Convertible Subordinated Notes or portions thereof tendered
to and accepted for payment by the Company. On the Asset Sale Offer Payment
Date, the Paying Agent shall mail or deliver to the holders of Convertible
Subordinated Notes so accepted payment in an amount equal to the purchase
price, and the Trustee shall promptly authenticate and mail or deliver to such
holders a new Convertible Subordinated Note equal in principal amount to any
unpurchased portion of the Convertible Subordinated Note surrendered. Any Con-
vertible Subordinated Notes not so accepted shall be promptly mailed or deliv-
ered by the Company to the holder thereof.
If an offer is made to repurchase the Convertible Subordinated Notes pursu-
ant to an Asset Sale Offer, the Company will and will cause its subsidiaries
to comply with all tender offer rules under state and Federal securities laws,
including, but not limited to, Section 14(e) under the Exchange Act and Rule
14e-1 thereunder, to the extent applicable to such offer. To the extent that
the provisions of any securities laws or regulations conflict with provisions
of this Section 4.05, the Company shall comply with the applicable securities
laws and regulations and shall not be deemed to have breached its obligations
under this Section 4.05 by virtue thereof.
Section 4.06 Continued Existence.
Subject to Article 5, the Company shall do or cause to be done all things
necessary to preserve and keep in full force and effect its corporate exist-
ence.
Section 4.07 Taxes.
The Company shall pay prior to delinquency all taxes, assessments and gov-
ernmental levies, except as contested in good faith and by appropriate pro-
ceedings or where the failure to do so (together with all other such failures)
would not have a material adverse effect on the financial condition or results
of operations of the Company and its subsidiaries, taken as a whole.
30
Section 4.08 Change of Control.
Following a Change of Control (the date of each such occurrence being the
"Change of Control Date"), the Company shall notify the holders of Convertible
Subordinated Notes in writing of such occurrence and shall make an offer (the
"Change of Control Offer") to purchase all Convertible Subordinated Notes then
outstanding at a purchase price equal to 101% of the principal amount thereof,
plus accrued and unpaid interest, if any, to the "Change of Control Offer Pay-
ment Date" (as defined below).
Notice of a Change of Control shall be mailed by or at the direction of the
Company to the holders of Convertible Subordinated Notes as shown on the reg-
ister of such holders maintained by the Registrar not less than 15 days nor
more than 30 days after the applicable Change of Control Date at the addresses
as shown on the register of holders maintained by the Registrar, with a copy
to the Trustee and the Paying Agent. The Change of Control Offer shall remain
open until a specified date (the "Change of Control Offer Termination Date")
which is at least 20 business days from the date such notice is mailed. During
the period specified in such notice, holders of Convertible Subordinated Notes
may elect to tender their Convertible Subordinated Notes in whole or in part
in integral multiples of $1,000 in exchange for cash. Payment shall be made by
the Company in respect of Convertible Subordinated Notes properly tendered
pursuant to this Section on a specified business day (the "Change of Control
Offer Payment Date") which shall be no earlier than 3 business days after the
applicable Change of Control Offer Termination Date and no later than 60 days
after the applicable Change of Control Date.
The notice, which shall govern the terms of the Change of Control Offer, shall
include such disclosures as are required by law and shall state:
(a) that a Change of Control Offer is being made pursuant to this Sec-
tion 4.08 and that all Convertible Subordinated Notes will be accepted for
payment;
(b) the purchase price (including the amount of accrued interest, if
any) for each Convertible Subordinated Note, the Change of Control Offer
Termination Date and the Change of Control Offer Payment Date;
(c) that any Convertible Subordinated Note not accepted for payment will
continue to accrue interest in accordance with the terms thereof;
31
(d) that, unless the Company defaults on making the payment, any Con-
vertible Subordinated Note accepted for payment pursuant to the Change of
Control Offer shall cease to accrue interest after the Change of Control
Offer Payment Date;
(e) that holders electing to have Convertible Subordinated Notes pur-
chased pursuant to a Change of Control Offer will be required to surrender
their Convertible Subordinated Notes to the Paying Agent at the address
specified in the notice prior to 5:00 p.m., New York City time, on the
Change of Control Offer Termination Date and must complete any form letter
of transmittal proposed by the Company and acceptable to the Trustee and
the Paying Agent;
(f) that holders of Convertible Subordinated Notes will be entitled to
withdraw their election if the Paying Agent receives, not later than 5:00
p.m., New York City time, on the Change of Control Offer Termination Date,
a tested telex, facsimile transmission or letter setting forth the name of
the holder, the principal amount of Convertible Subordinated Notes the
holder delivered for purchase, the Convertible Subordinated Note certifi-
cate number (if any) and a statement that such holder is withdrawing his
election to have such Convertible Subordinated Notes purchased;
(g) that holders whose Convertible Subordinated Notes are purchased only
in part will be issued Convertible Subordinated Notes equal in principal
amount to the unpurchased portion of the Convertible Subordinated Notes
surrendered;
(h) the instructions that holders must follow in order to tender their
Convertible Subordinated Notes; and
(i) the circumstances and relevant facts regarding such Change of Con-
trol (including, but not limited to, information with respect to pro forma
historical financial information after giving effect to such Change of
Control, information regarding the Persons acquiring control and such Per-
sons' business plans going forward).
On the Change of Control Offer Termination the Company shall (i) accept for
payment Convertible Subordinated Notes or portions thereof tendered pursuant
to the Change of Control Offer, (ii) deposit with the Paying Agent money suf-
ficient to pay the purchase price of all Convertible Subordi-
32
nated Notes or portions thereof so tendered and accepted and (iii) deliver to
the Trustee the Convertible Subordinated Notes so accepted together with an
Officers' Certificate setting forth the Convertible Subordinated Notes or por-
tions thereof tendered to and accepted for payment by the Company. On the
Change of Control Payment Date, the Paying Agent shall mail or deliver to the
holders of Convertible Subordinated Notes so accepted payment in an amount
equal to the purchase price, and the Trustee shall promptly authenticate and
mail or deliver to such holders a new Convertible Subordinated Note equal in
principal amount to any unpurchased portion of the Convertible Subordinated
Note surrendered. Any Convertible Subordinated Notes not so accepted shall be
promptly mailed or delivered by the Company to the holder thereof.
In addition, in the event of any Change of Control, the Company shall not,
and shall not permit any of its subsidiaries to, purchase, redeem or otherwise
acquire any Indebtedness subordinated or junior to the Convertible Subordi-
nated Notes pursuant to any analogous provision relating to such Indebtedness
on or prior to the payment in full in cash or Cash Equivalents of all Convert-
ible Subordinated Notes, together with accrued and unpaid interest thereon
with respect to which the Change of Control Offer was accepted.
If an offer is made to redeem Convertible Subordinated Notes as a result of
a Change of Control, the Company will be required to comply with all tender
offer rules under state and Federal securities laws, including, but not lim-
ited to, Section 14(e) under the Exchange Act and Rule 14e-1 thereunder, to
the extent applicable to such offer.
Section 4.09 Appointments to Fill Vacancies in Trustee's Office.
The Company, whenever necessary to avoid or fill a vacancy in the office of
Trustee, will appoint, in the manner provided in Section 7.08, a Trustee, so
that there shall at all times be a Trustee hereunder.
Section 4.10 Further Instruments and Acts.
Upon request of the Trustee, the Company will execute and deliver such fur-
ther instruments and do such further acts as may be reasonably necessary or
proper to carry out more effectively the purpose of this Indenture.
33
Section 4.11 Stay, Extension and Usury Laws.
The Company covenants (to the extent that it may lawfully do so) that it
shall not at any time insist upon, plead or in any manner whatsoever claim or
take the benefit or advantage of, any stay, extension or usury law wherever
enacted, now or at any time hereafter enforced, that may affect the Company's
obligation to pay the Convertible Subordinated Notes; and the Company (to the
extent that it may lawfully do so) hereby expressly waives all benefit or ad-
vantage of any such law insofar as such law applies to the Convertible Subor-
dinated Notes, and covenants that it shall not, by resort to any such law,
hinder, delay or impede the execution of any power herein granted to the
Trustee, but will suffer and permit the execution of every such power as
though no such law has been enacted.
Section 4.12 Investment Company Act.
The Company, as of the Issue Date, is not and shall not become an investment
company subject to registration under the Investment Company Act of 1940, as
amended.
ARTICLE 5
Successors
Section 5.01 When the Company May Merge, Etc.
The Company will not, in a single transaction or series of related transac-
tions, consolidate or merge with or into, or sell, assign, transfer, lease,
convey or otherwise dispose of all or substantially all of its assets to, any
Person or adopt a Plan of Liquidation unless:
(a) either (i) the Company shall be the surviving or continuing corpora-
tion or (ii) the Person (if other than the Company) formed by such consol-
idation or into which the Company is merged or the Person which acquires
by conveyance, transfer or lease the properties and assets of the Company
substantially as an entirety or in the case of a Plan of Liquidation, the
Person to which all or substantially all of the assets of the Company have
been transferred (1) shall be a corporation organized and validly existing
under the laws of the United States or any State thereof or the District
of Columbia and (2) shall expressly assume, by supplemental indenture, ex-
ecuted and delivered to the Trustee, the due and punctual
34
payment of the principal of, and premium, if any, and interest on all of
the Convertible Subordinated Notes and the performance of every covenant
of the Convertible Subordinated Notes and this Indenture on the part of
the Company to be performed or observed;
(b) immediately after giving effect to such transaction and any assump-
tion contemplated by clause (a)(ii)(2) above (including giving effect to
any Indebtedness and Acquired Indebtedness incurred or anticipated to be
incurred in connection with or in respect of such transaction), the Com-
pany (in the case of clause (i) of the foregoing clause (a)) or such Per-
son (in the case of clause (ii) thereof) shall have a Consolidated Net
Worth (immediately after the transaction but prior to any purchase ac-
counting adjustments relating to such transaction) equal to or greater
than the Consolidated Net Worth of the Company immediately prior to such
transaction;
(c) immediately before and after giving effect to such transaction and
any assumption contemplated by clause (a)(ii)(2) above (including giving
effect to any Indebtedness and Acquired Indebtedness incurred in connec-
tion with or in respect of the transaction) no Default and no Event of De-
fault shall have occurred and be continuing; and
(d) the Company or such Person shall have delivered to the Trustee (i)
an Officers' Certificate and an Opinion of Counsel (which counsel may be
in-house counsel of the Company), each stating that such consolidation,
merger, conveyance, transfer or lease or Plan of Liquidation and, if a
supplemental indenture is required in connection with such transaction,
such supplemental indenture, comply with this provision of this Indenture
and that all conditions precedent in this Indenture relating to such
transaction have been satisfied and (ii) a certificate from the Company's
independent certified public accountants stating that the Company has made
the calculations required by clause (b) above in accordance with the terms
of this Indenture.
For purposes of this Section 5.01, the transfer (by lease, assignment, sale
or otherwise, in a single transaction or series of transactions) of all or
substantially all of the properties or assets of one or more subsidiaries of
the Company, the Capital Stock of which constitutes all or substantially all
of the properties and assets of the Company, shall be deemed to be the trans-
fer of all or substantially all of the properties and assets of the Company.
35
Section 5.02 Successor Corporation Substituted.
Upon any such consolidation, merger, conveyance, lease or transfer in accor-
dance with Section 5.01, the successor Person formed by such consolidation or
into which the Company is merged or to which such conveyance, lease or trans-
fer is made will 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 had been named as the Company therein, and thereafter (ex-
cept in the case of a sale, assignment, transfer, lease, conveyance or other
disposition) the predecessor corporation will be relieved of all further obli-
gations and covenants under this Indenture and the Convertible Subordinated
Notes.
Section 5.03 Purchase Option on Change of Control.
This Article 5 does not affect the obligations of the Company (including
without limitation any successor to the Company) under Section 4.08.
ARTICLE 6
Defaults and Remedies
Section 6.01 Events of Default.
An "Event of Default" with respect to any Convertible Subordinated Notes oc-
curs if:
(a) the Company defaults in the payment of principal of, or premium, if
any, on the Convertible Subordinated Notes when due at maturity, upon re-
purchase, upon acceleration or otherwise, including, without limitation,
failure of the Company to repurchase the Convertible Subordinated Notes on
the date required pursuant to Section 4.05 or following a Change of Con-
trol or failure to make any optional redemption payment when due; or
(b) the Company defaults in the payment of any installment of interest
on the Convertible Subordinated Notes when due (including any interest
payable in connection with any optional redemption payment) and continu-
ance of such default for more than 30 days; or
(c) the Company fails to observe, perform or comply with any of the pro-
visions described in Sections 4.05, 4.08 and 5.01, and the failure to
36
remedy such failure prior to the receipt of written notice from the
trustee or the holders of at least 25% in aggregate principal amount of
the then outstanding Convertible Subordinated Notes; or
(d) the Company defaults (other than a default set forth in clauses (a),
(b) and (c) above) in the performance of, or breach of, any other covenant
or warranty of the Company set forth in this Indenture or the Convertible
Subordinated Notes and fails to remedy such default or breach within a pe-
riod of 60 days after the receipt of written notice from the Trustee or
the holders of at least 25% in aggregate principal amount of the then out-
standing Convertible Subordinated Notes; or
(e) any Indebtedness (other than the Convertible Subordinated Notes) of
the Company or of any subsidiary, whether such Indebtedness exists on the
Issue Date or shall be incurred thereafter, having, individually or in the
aggregate, an outstanding principal amount of $15 million or more, either
(i) is declared due and payable prior to its stated maturity or (ii) is
not paid upon the final maturity of such Indebtedness; or
(f) a court of competent jurisdiction enters one or more judgments or
orders against the Company or any subsidiary of the Company or any of
their respective property or assets in an aggregate amount in excess of
$15 million and they are not covered by insurance written by third par-
ties, which judgments or orders have not been vacated, discharged, satis-
fied or stayed pending appeal within 60 days from the entry thereof; or
(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,
(iii) consents to the appointment of a Custodian of it or for all or
substantially all of its property, or
(iv) makes a general assignment for the benefit of its creditors; or
(h) a court of competent jurisdiction enters a judgment, order or decree
under any Bankruptcy Law that:
(i) is for relief against the Company or any Material Subsidiary in
an involuntary case,
37
(ii) appoints a Custodian of the Company or any Material Subsidiary
for all or substantially all of its property, or
(iii) orders the liquidation of the Company or any Material Subsidi-
ary, and the order or decree remains unstayed and in effect for 60
days.
The term "Bankruptcy Law" means title 11, U.S. Code or any similar Federal
or state law for the relief of debtors. The term "Custodian" means any receiv-
er, trustee, assignee, liquidator or similar official under any Bankruptcy
Law.
Section 6.02 Acceleration.
If an Event of Default (other than an Event of Default specified in clauses
(g) and (h) of Section 6.01) occurs and is continuing, then and in every such
case the Trustee, by written notice to the Company (with a copy to the Bank
Agent, each of the holders of the Company's 9.33% Senior Notes and its 9.35%
Senior Notes and any other Representatives of Designated Senior Indebtedness),
or the holders of at least 25% in aggregate principal amount of the then out-
standing Convertible Subordinated Notes, by written notice to the Company and
the Trustee (with a copy to the Bank Agent, each of the holders of the
Company's 9.33% Senior Notes and its 9.35% Senior Notes and any other Repre-
sentatives of Designated Senior Indebtedness), may declare the unpaid princi-
pal of and accrued interest on all the Convertible Subordinated Notes to be
due and payable, provided, however that failure to provide a copy of such no-
tice to any party other than the Company and the Trustee shall have no effect
on any such declaration. Upon such declaration such principal amount, premium,
if any, and accrued and unpaid interest shall become immediately due and pay-
able, notwithstanding anything contained in this Indenture or the Convertible
Subordinated Notes to the contrary but subject to the provisions of Article 11
hereof; and provided further, that so long as any Designated Senior Indebted-
ness is outstanding, any such declaration shall not be effective until the
earlier of (a) five business days after the delivery of such notice to the
Company or (b) the acceleration of any Designated Senior Indebtedness. If any
Event of Default with respect to the Company specified in clauses (g) or (h)
of Section 6.01 occurs, all unpaid principal of and premium, if any, and ac-
crued and unpaid interest on the Convertible Subordinated Notes then outstand-
ing shall become automatically due and payable subject to the provisions of
Article 11 hereof, without any declaration or other act on the part of the
Trustee or any holder of Convertible Subordinated Notes.
38
The holders of a majority in principal amount of the then outstanding Con-
vertible Subordinated Notes by notice to the Trustee may rescind an accelera-
tion of the Convertible Subordinated Notes and its consequences if all exist-
ing Events of Default (other than nonpayment of principal of or premium, if
any, and interest on the Convertible Subordinated Notes which has become due
solely by virtue of such acceleration) have been cured or waived and if the
rescission would not conflict with any judgment or decree of any court of com-
petent jurisdiction. No such rescission shall affect any subsequent Default or
Event of Default or impair any right consequent thereto.
Section 6.03 Other Remedies.
If an Event of Default occurs and is continuing, the Trustee may pursue any
available remedy by proceeding at law or in equity to collect the payment of
principal of or interest on the Convertible Subordinated Notes or to enforce
the performance of any provision of the Convertible Subordinated Notes or this
Indenture. The Trustee may maintain a proceeding even if it does not possess
any of the Convertible Subordinated Notes or does not produce any of them in
the proceeding. A delay or omission by the Trustee or any holder of a Convert-
ible Subordinated Note in exercising any right or remedy accruing upon an
Event of Default shall not impair the right or remedy or constitute a waiver
of or acquiescence in the Event of Default. All remedies are cumulative to the
extent permitted by law.
Section 6.04 Waiver of Past Defaults.
The holders of a majority in aggregate principal amount of the Convertible
Subordinated Notes then outstanding may, on behalf of the holders of all the
Convertible Subordinated Notes waive an existing Default or Event of Default
and its consequences, except a Default or Event of Default in the payment of
the principal of or interest on the Convertible Subordinated Notes (other than
the non-payment of principle of and premium, if any, and interest on the Con-
vertible Subordinated Notes which has become due solely by virtue of an accel-
eration which has been duly rescinded as provided above), or in respect of a
covenant or provision of this Indenture which cannot be modified or amended
without the consent of all holders of convertible Subordinated Notes. When a
Default is waived, it is cured and stops continuing. No waiver shall extend to
any subsequent or other Default or impair any right consequent thereon.
39
Section 6.05 Control by Majority.
The holders of a majority in principal amount of the then outstanding Con-
vertible Subordinated Notes may direct the time, method and place of con-
ducting 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, that the Trustee de-
termines may be unduly prejudicial to the rights of other holders of Convert-
ible Subordinated Notes or that may involve the Trustee in personal liability;
provided, that the Trustee may take any other action the Trustee deems proper
that is not inconsistent with such directions.
Section 6.06 Limitation on Suits.
A holder of a Convertible Subordinated Note may not pursue any remedy with re-
spect to this Indenture or the Convertible Subordinated Notes unless:
(1) the holder gives to the Trustee notice of a continuing Event of De-
fault;
(2) the holders of at least 25% in principal amount of the then out-
standing Convertible Subordinated Notes make a request to the Trustee to
pursue the remedy;
(3) such holder or holders offer and, if requested, provide to the
Trustee indemnity satisfactory to the Trustee against any loss, liability
or expense;
(4) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer and, if requested, the provision of
indemnity; and
(5) during such 60-day period the holders of a majority in principal
amount of the then outstanding Convertible Subordinated Notes do not give
the Trustee a direction inconsistent with the request.
A holder of a Convertible Subordinated Note may not use this Indenture to
prejudice the rights of another holder or to obtain a preference or priority
over another holder.
Section 6.07 Rights of Holders To Receive Payment.
Subject to the provisions of Article 11 hereof, notwithstanding any other
provision of this Indenture, the right of any holder of a Convertible Subordi-
40
nated Note to receive payment of principal and interest on the Convertible
Subordinated Note, on or after the respective due dates expressed in the Con-
vertible Subordinated Note, or to bring suit for the enforcement of any such
payment on or after such respective dates, and such rights shall not be im-
paired or affected without the consent of the holder of a Convertible Subordi-
nated Note.
Section 6.08 Collection Suit by Trustee.
If an Event of Default specified in Section 6.01(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 in-
terest remaining unpaid on the Convertible Subordinated Notes 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 collection, includ-
ing the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel.
Section 6.09 Trustee May File Proofs of Claim.
The Trustee may file such proofs of claim and other papers or documents as
may be necessary or advisable in order to have the claims of the Trustee and
the holders of Convertible Subordinated Notes allowed in any judicial proceed-
ings 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 holder of a Convertible Subordinated Note any
plan of reorganization, arrangement, adjustment or composition affecting the
Convertible Subordinated Notes or the rights of any holder thereof, or to au-
thorize the Trustee to vote in respect of the claim of any holder in any such
proceeding.
Section 6.10 Priorities.
If the Trustee collects any money pursuant to this Article, it shall pay out
the money in the following order:
First: to the Trustee for amounts due under Section 7.07, including pay-
ment of all compensation, expenses and liabilities incurred, and all ad-
vances made, by the Trustee, and the costs and expenses of collection;
41
Second: to holders of Senior Indebtedness to the extent required by Ar-
ticle 11;
Third: to holders of Convertible Subordinated Notes for amounts due and
unpaid on the Convertible Subordinated Notes for principal and interest,
ratably, without preference or priority of any kind, according to the
amounts due and payable on the Convertible Subordinated Notes for princi-
pal and interest, respectively; and
Fourth: to the Company.
Except as otherwise provided in Section 2.12, the Trustee may fix a record
date and payment date for any payment to holders of Convertible Subordinated
Notes.
Section 6.11 Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this Indenture
or in any suit against the Trustee for any action taken or omitted by it as a
Trustee, a court in its discretion may require the filing by any party liti-
gant in the suit, other than the Trustee, of an undertaking to pay the costs
of the suit, and the court in its discretion may assess reasonable costs, in-
cluding 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 6.07 or a suit by holders of more than
10% in principal amount of the then outstanding Convertible Subordinated
Notes.
ARTICLE 7
The Trustee
The Trustee hereby accepts the trust imposed upon it by this Indenture and
covenants and agrees to perform the same, as herein expressed. Whether or not
herein expressly so provided, every provision of this Indenture relating to
the conduct or affecting the liability of or affording protection to the
Trustee shall be subject to the provisions of this Article 7.
Section 7.01 Duties of the Trustee.
(a) If an Event of Default known to the Trustee has occurred and is continu-
ing, the Trustee shall exercise such of the rights and powers vested in
42
it by this Indenture and use the same degree of care and skill in their exer-
cise 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 known to the Trust-
ee:
(1) The duties of the Trustee shall be determined solely by the express
provisions of this Indenture and the Trustee need perform only those du-
ties that are specifically set forth in this Indenture and no others and
no implied covenants or obligations shall be read into this Indenture
against the Trustee; and
(2) In the absence of bad faith on its part, the Trustee may conclu-
sively rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon certificates or opinions furnished to the
Trustee and conforming to the requirements of this Indenture. However, the
Trustee shall examine the certificates and opinions to determine whether
or not they conform to the form required by this Indenture.
(c) The Trustee may not be relieved from liability for its own negligent ac-
tion, its own negligent failure to act or its own willful misconduct, except
that:
(1) This paragraph does not limit the effect of paragraph (b) of this
Section;
(2) The Trustee shall not be liable for any error of judgment made in
good faith by a Trust Officer, unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts; and
(3) The Trustee shall not be liable with respect to any action it takes
or omits to take in good faith in accordance with a direction received by
it pursuant to Section 6.05.
(d) Whether or not therein expressly so provided, every provision of this
Indenture that is in any way related to the Trustee is subject to paragraphs
(a), (b) and (c) of this Section 7.01.
(e) No provision of this Indenture shall require the Trustee to expend or
risk its own funds or incur any liability in the performance of any of its du-
ties or the exercise of any of its rights and powers hereunder. The Trustee
may refuse to perform any duty or exercise any right or power unless it re-
ceives indemnity satisfactory to it against any loss, liability or expense.
43
(f) The Trustee shall not be liable for interest on any money received by it
except as the Trustee may agree with the Company. Money held in trust by the
Trustee need not be segregated from other funds except to the extent required
by law.
Section 7.02 Rights of the Trustee.
(a) The Trustee may rely on and shall be protected in acting or refraining
from acting upon any resolution, Officers' Certificate, or any other certifi-
cate, statement, instrument, opinion, report, notice, request, consent, order,
security or other 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 contained therein.
(b) Any request, direction, order or demand of the Company mentioned herein
shall be sufficiently evidenced by an Officers' Certificate (unless other evi-
dence in respect thereof is herein specifically prescribed). In addition, be-
fore the Trustee acts or refrains from acting, it may require an Officers'
Certificate, 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 Of-
ficers' Certificate or Opinion of Counsel. The Trustee may consult with coun-
sel and the written advice of such counsel or any Opinion of Counsel shall be
full and complete authorization and protection from liability in respect of
any action taken, suffered or omitted by it hereunder in good faith and in re-
liance thereon.
(c) The Trustee may execute any of the trusts or powers hereunder or perform
any duties hereunder either directly or by or through its attorneys and agents
and other Persons not regularly in its employ and shall not be responsible for
the misconduct or negligence of any attorney or 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 discretion,
rights or powers.
(e) Unless otherwise specifically provided in this Indenture, any demand,
request, direction or notice from the Company shall be sufficient if signed by
Officers of the Company.
(f) The Trustee shall not be required to give any bond or surety in respect
of the performance of its powers and duties hereunder.
44
(g) The Trustee shall be under no obligation to exercise any of the trusts
or powers vested in it by this Indenture at the request, order or discretion
of any of the holders of Convertible Subordinated Notes pursuant to the provi-
sions of this Indenture, unless such holders have offered to the Trustee rea-
sonable security or indemnity against the costs, expenses and liabilities
which might be incurred therein or thereby.
(h) The Trustee shall not be bound to make any investigation into the facts
or matters stated in any resolution, certificate, statement, instrument, opin-
ion, report, notice, request, consent, order, security or other document un-
less requested in writing to do so by the holders of not less than a majority
in aggregate principal amount of the Convertible Subordinated Notes then out-
standing, provided that, if the Trustee determines in its sole and absolute
discretion to make any such investigation, then it shall be entitled, upon
reasonable prior notice and during normal business hours, to examine the books
and records and the premises of the Company, personally or by agent or attor-
ney, and the reasonable expenses of every such examination shall be paid by
the Company or, if paid by the Trustee or any predecessor Trustee, shall be
reimbursed by the Company upon demand.
Section 7.03 Individual Rights of the Trustee.
The Trustee in its individual or any other capacity may become the owner or
pledgee of Convertible Subordinated Notes with the same rights it would have
if it were not the Trustee and may otherwise deal with the Company or an Af-
filiate and receive, collect, hold and retain collections from the Company
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 7.10
and 7.11.
Section 7.04 Trustee's Disclaimer.
The Trustee shall not be responsible for and makes no representation as to
the validity or adequacy of this Indenture or the Convertible Subordinated
Notes. It shall not be accountable for the Company's use of the proceeds from
the Convertible Subordinated Notes or any money paid to the Company or upon
the Company's direction under any provision of this Indenture. It shall not be
responsible for the use or application of any money received by any Paying
Agent other than the Trustee, and it shall not be responsible for any state-
ment or recital herein or any statement in the Convertible Subordinated
45
Notes or any other document in connection with the sale of the Convertible
Subordinated Notes or pursuant to this Indenture other than its certificate of
authentication.
Section 7.05 Notice of Defaults.
If a Default or Event of Default occurs and is continuing and if it is known
to the Trustee, the Trustee shall mail to each holder of a Convertible Subor-
dinated Note a notice of the Default or Event of Default within 45 days after
it occurs. A Default or an Event of Default shall not be considered known to
the Trustee unless it is a Default or Event of Default in the payment of prin-
cipal or interest when due under Section 6.01(a) or (b) or the Trustee shall
have received notice thereof, in accordance with this Indenture, from the Com-
pany or from the holders of a majority in principal amount of the outstanding
Convertible Subordinated Notes. Except in the case of a Default or Event of
Default in payment of principal or interest on any Convertible Subordinated
Note, 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
interest of the holders of the Convertible Subordinated Notes.
Section 7.06 Reports by the Trustee to Holders.
Within 60 days after the reporting date stated in Section 10.10, the Trustee
shall mail to holders of Convertible Subordinated Notes a brief report dated
as of such reporting date that complies with TIA ((S)) 313(a) (but if no event
described in TIA ((S)) 313(a) has occurred within twelve months preceding the
reporting date, no report need be transmitted). The Trustee also shall comply
with TIA ((S)) 313(b)(2). The Trustee shall also transmit by mail all reports
as required by TIA ((S)) 313(c).
A copy of each report at the time of its mailing to holders of Convertible
Subordinated Notes shall be filed, at the expense of the Company, by the
Trustee with the Commission and each stock exchange, if any, on which the Con-
vertible Subordinated Notes are listed. The Company shall timely notify the
Trustee when the Convertible Subordinated Notes are listed on any stock ex-
change.
46
Section 7.07 Compensation and Indemnity.
The Company shall pay to the Trustee from time to time and the Trustee shall
be entitled to reasonable compensation for its acceptance of this Indenture
and 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 promptly upon request for all reasonable disbursements,
advances and expenses incurred or made by or on behalf of it in addition to
the compensation for its services. Such expenses may include the reasonable
compensation, disbursements and expenses of the Trustee's agents, counsel and
other Persons not regularly in its employ.
The Company shall indemnify the Trustee against any loss, liability or ex-
pense incurred by it arising out of or in connection with the acceptance or
administration of its duties under this Indenture and the trusts hereunder,
including the costs and expenses of defending itself against or investigating
any claim of liability in the premises, except as set forth in the next para-
graph. The Trustee shall notify the Company promptly of any claim for which it
may seek indemnity. Failure by the Trustee to so notify the Company shall not
relieve the Company of its obligations hereunder. The Company shall defend the
claim with counsel designated by the Company, who may be outside counsel to
the Company but shall in all events be reasonably satisfactory to the Trustee,
and the Trustee shall cooperate in the defense. In addition, the Trustee may
retain one separate counsel and, if deemed advisable by such counsel, local
counsel, and the Company shall pay the reasonable fees and expenses of such
separate counsel and local counsel. The indemnification herein extends to any
settlement, provided that the Company will not be liable for any settlement
made without its consent, provided, further, that such consent will not be un-
reasonably withheld.
The Company need not reimburse any expense or indemnify against any loss or
liability incurred by the Trustee through its own negligence or bad faith.
To secure the Company's payment obligations in this Section 7.07, the
Trustee shall have a Lien prior to the Convertible Subordinated Notes on all
money or property held or collected by the Trustee, except that held in trust
to pay principal and interest on Convertible Subordinated Notes. Such Liens
and the Company's obligations under this Section shall survive the satisfac-
tion and discharge of this Indenture.
47
When the Trustee incurs expenses or renders services after an Event of De-
fault specified in Section 6.01(g) or (h) occurs, the expenses and the compen-
sation for the services (including the fees and expenses of its agents and
counsel) are intended to constitute expenses of administration under any Bank-
ruptcy Law.
Section 7.08 Replacement of the 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 at any time and be discharged from the trust hereby
created by so notifying the Company. The holders of a majority in principal
amount of the then outstanding Convertible Subordinated Notes may remove the
Trustee by so notifying the Trustee and the Company in writing and may appoint
a successor Trustee. The Company may remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged a bankrupt or an insolvent or an order for
relief is entered with respect to the Trustee under any Bankruptcy Law;
(3) a Custodian or public officer takes charge of the Trustee or its
property; or
(4) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the office of
Trustee for any reason, the Company shall promptly appoint a successor Trust-
ee. Within one year after the successor Trustee takes office, the holders of a
majority in principal amount of the then outstanding Convertible Subordinated
Notes may appoint a successor Trustee to replace the successor Trustee ap-
pointed by the Company.
If a successor Trustee does not take office within 60 days after the retir-
ing Trustee resigns or is removed, the retiring Trustee, the Company or the
holders of at least 10% in principal amount of the then outstanding Convert-
ible Subordinated Notes may petition any court of competent jurisdiction for
the appointment of a successor Trustee.
48
If the Trustee after written request by any holder of a Convertible Subordi-
nated Note who has been a holder for at least six months fails to comply with
Section 7.10, such holder 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 Inden-
ture. The successor Trustee shall mail a notice of its succession to holders
of Convertible Subordinated Notes. The retiring Trustee shall promptly trans-
fer all property held by it as Trustee to the successor Trustee, provided that
all sums owing to the retiring Trustee hereunder have been paid and subject to
the lien provided for in Section 7.07. Notwithstanding the replacement of the
Trustee pursuant to this Section 7.08, the Company's obligations under Section
7.07 shall continue for the benefit of the retiring Trustee.
Upon request of any such successor Trustee, the Company shall execute any
and all instruments for more fully and certainly vesting in and confirming to
such successor Trustee all such rights, powers and trusts referred to in the
preceding paragraph.
Section 7.09 Successor Trustee by Merger, etc.
If the Trustee consolidates with, merges or converts into, or transfers all
or substantially all of its corporate trust business to, another corporation
or national banking association, the resulting, surviving or transferee corpo-
ration or national banking association without any further act shall be the
successor Trustee with the same effect as if the successor Trustee had been
named as the Trustee herein.
Section 7.10 Eligibility, Disqualification.
This Indenture shall always have a Trustee who satisfies the requirements of
TIA ((S)) 310(a)(1). The Trustee shall always have a combined capital and sur-
plus as stated in Section 10.10. The Trustee is subject to TIA ((S)) 310(b)
regarding the disqualification of a trustee upon acquiring a conflicting in-
terest.
49
Section 7.11 Preferential Collection of Claims Against Company.
The Trustee shall comply with TIA ((S)) 311(a), excluding any creditor rela-
tionship set forth in TIA ((S)) 311(b). A Trustee who has resigned or been re-
moved shall be subject to TIA ((S)) 311(a) to the extent indicated therein.
ARTICLE 8
Satisfaction and Discharge of Indenture
Section 8.01 Termination of Company's Obligations.
(i) This Indenture shall cease to be of further effect (except that the
Company's obligations under Section 7.07 and 8.03 shall survive) when all
outstanding Convertible Subordinated Notes theretofore authenticated and
issued have been delivered (other than destroyed, lost or stolen Convert-
ible Subordinated Notes that have been replaced or paid) to the Trustee
for cancellation and the Company has paid all sums payable hereunder. In
addition, the Company may terminate its obligations under this Indenture
(except the Company's obligations under Sections 7.07 and 8.03) if, under
terms satisfactory to the Trustee: (a) the Convertible Subordinated Notes
have either become due and payable or are by their terms due and payable
within one year or scheduled for redemption within one year; and (b) the
Company irrevocably deposits in trust with the Trustee money or United
States Government Obligations (defined below in this Section 8.01), or a
combination thereof, sufficient, without consideration of the reinvestment
of interest in the opinion of the chief financial officer of the Company
expressed in a written certificate delivered to the Trustee, to pay prin-
cipal and interest on the Convertible Subordinated Notes to maturity or
upon redemption, as the case may be. The Company may make the deposit only
if Article 11 permits it.
However, the Company's obligations in Sections 2.03, 2.04, 2.05, 2.06, 2.07,
4.01, 4.04, 7.07, 7.08, 8.03 and 8.04 shall survive until the Convertible Sub-
ordinated Notes are no longer outstanding. Thereafter, only the Company's ob-
ligations in Sections 7.07 and 8.03 shall survive.
After a deposit made pursuant to this Section 8.01, the Trustee upon request
of the Company shall acknowledge in writing the discharge of the
50
Company's obligations under this Indenture except for those surviving obliga-
tions specified above.
In addition, the Company may elect to have either clause (ii) or clause
(iii) below be applied to the outstanding Convertible Subordinated Notes upon
compliance with the conditions set forth in clause (iv) below.
(ii) Upon the Company's exercise under the last sentence of paragraph (i)
above of the option applicable to this paragraph (ii), the Company shall be
deemed to have been released and discharged from its obligations with respect
to the outstanding Convertible Subordinated Notes on the date the conditions
set forth below are satisfied ("legal defeasance"). For this purpose, legal
defeasance means that the Company shall be deemed to have paid and discharged
the entire indebtedness represented by the outstanding Convertible Subordi-
nated Notes, which shall thereafter be deemed to be "outstanding" only for the
purpose of the Sections of and matters under this Indenture referred to in
subclauses (A), (B), (C) and (D) of this clause (ii), and to have satisfied
all its other obligations under such Convertible Subordinated Notes and this
Indenture insofar as such Convertible Subordinated Notes are concerned (and
the Trustee, at the expense of the Company, shall execute proper instruments
acknowledging the same), except for the following, which shall survive until
otherwise terminated or discharged hereunder: (A) the rights of holders of
outstanding Convertible Subordinated Notes to receive solely from the trust
fund described in clause (iv) below and as more fully set forth in such
clause, payments in respect of the principal of premium, if any, and interest
on such Convertible Subordinated Notes when such payments are due, (B) the
Company's obligations with respect to such Convertible Subordinated Notes when
such payments are due, (C) the Company's obligations with respect to such Con-
vertible Subordinated Notes under Sections 2.03, 2.05, 2.06, 2.07 and 4.04,
and, with respect to the Trustee, under Section 7.07, (D) the rights, powers,
trusts, duties and immunities of the Trustee hereunder and (E) this Section
8.01 and Sections 8.03 and 8.04. Subject to compliance with this Section 8.01,
the Company may exercise its option under this clause (ii) notwithstanding the
prior exercise of its option under paragraph (iii) below with respect to the
Convertible Subordinated Notes.
(iii) Upon the Company's exercise under the last sentence of clause (i) of
the option applicable to this clause (iii), the Company shall be released and
discharged from its obligations under any covenant contained in Article 4
51
(except for Sections 4.01 and 4.04) and Article 5 with respect to the out-
standing Convertible Subordinated Notes on and after the date the conditions
set forth below are satisfied ("covenant defeasance"), and the Convertible
Subordinated Notes shall thereafter be deemed to be not "outstanding" for the
purpose of any direction, waiver, consent or declaration or act of holders of
Convertible Subordinated Notes (and the consequences of any thereof) in con-
nection with such covenants, but shall continue to be deemed "outstanding" for
all other purposes hereunder. For this purpose, such covenant defeasance means
that, with respect to the outstanding Convertible Subordinated Notes, the Com-
pany may omit to comply with and shall have no liability in respect of any
term, condition or limitation set forth in any such covenant, whether directly
or indirectly, by reason of any reference elsewhere herein to any such cove-
nant or by reason of any reference in any such covenant to any other provision
herein or in any other document and such omission to comply shall not consti-
tute a Default or an Event of Default under Section 6.01 but, except as speci-
fied above, the remainder of this Indenture (including without limitation ob-
ligations set forth in Sections 8.03 and 8.04 hereof) and such Convertible
Subordinated Notes shall be unaffected thereby.
(iv) The following shall be the conditions to the application of either
clause (ii) or (iii) above to the outstanding Convertible Subordinated Notes:
(a) the Company has irrevocably deposited in trust with the Trustee or,
at the option of the Trustee, with a trustee, satisfactory to the Trustee
and the Company, under terms of an irrevocable trust agreement in form and
substance satisfactory to the Trustee, cash in U.S. dollars, United States
Government Obligations, or a combination thereof, in such amounts as will
be sufficient, in the opinion of the Chief Financial Officer of the Com-
pany expressed in a written certificate delivered to the Trustee, to pay
the principal of, premium, if any, and interest on the outstanding Con-
vertible Subordinated Notes on the stated maturity or on the applicable
redemption date, as the case may be, of such principal or installment of
principal of, premium, if any, or interest on the outstanding Convertible
Subordinated Notes; provided that (i) the trustee of the irrevocable trust
shall have been irrevocably instructed to pay such money or the proceeds
of such United States Government Obligations to the Trustee, (ii) the
Trustee shall have been irrevocably instructed to apply such money or the
proceeds of such United States Government Obligations to
52
the payment of said principal and interest with respect to the Convertible
Subordinated Notes, and (iii) such deposit does not violate Article 11
hereto;
(b) in the case of an election under clause (ii) above, the Company
shall have delivered to the Trustee an Opinion of Counsel from nationally
recognized counsel reasonably acceptable to the Trustee stating that(x)
the Company has received from, or there has been published by, the Inter-
nal Revenue Service a ruling or (y) since the date of this Indenture,
there has been a change in the applicable federal income tax law, in ei-
ther case to the effect that the holders of the outstanding Convertible
Subordinated Notes will not recognize income, gain or loss for federal in-
come tax purposes as a result of such legal defeasance and will be subject
to federal income tax on the same amount and in the same manner and at the
same time as would have been the case if such legal defeasance had not oc-
curred;
(c) in the case of an election under clause (iii) above, the Company
shall have delivered to the Trustee an Opinion of Counsel from nationally
recognized counsel reasonably acceptable to the Trustee (i) to the effect
that the holders of the outstanding Convertible Subordinated Notes will
not recognize income, gain or loss for federal income tax purposes as a
result of such covenant defeasance and will be subject to federal income
tax on the same amount and in the same manner and at the same time as
would have been the case if such covenant defeasance had not occurred or
(ii) that the Company has received from, or there has been published by,
the Internal Revenue Service a ruling to the foregoing effect;
(d) no Default or Event of Default shall have occurred and be continuing
on the date of such deposit;
(e) such legal defeasance or covenant defeasance shall not result in a
breach or violation of, or constitute a Default or Event of Default under,
any material agreement or instrument (including any agreement or instru-
ment governing or evidencing Designated Senior Indebtedness) to which the
Company or any of its subsidiaries is bound;
(f) The Company shall deliver to the Trustee an Opinion of Counsel to
the effect that after the 91st day following the deposit, the trust funds
will not be subject to the effect of any applicable bankruptcy, insolven-
cy, reorganization or similar laws affecting creditors' rights generally;
53
(g) the Company shall have delivered to the Trustee an Officers' Certif-
icate stating that the deposit was not made by the Company with the intent
of preferring the holders of Convertible Subordinated Notes over the other
creditors of the Company with the intent of defeating, hindering, delaying
or defrauding creditors of the Company or others; and
(h) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel stating that all conditions precedent provided
for relating to the legal defeasance under clause (ii) above or the cove-
nant defeasance under clause (iii) above, as the case may be, have been
complied with.
After such irrevocable deposit made pursuant to this Section 8.01 (and sat-
isfaction of the other conditions set forth herein), the Trustee upon request
shall acknowledge in writing the discharge of the Company's obligations under
this Indenture except for those surviving obligations specified above.
As used herein, "United States Government Obligations" means obligations for
which the full faith and credit of the United States of America is pledged and
which are not callable at the issuer's option.
Section 8.02 Application of Trust Money.
The Trustee shall hold in trust money or United States Government Obliga-
tions deposited with it pursuant to Section 8.01. It shall apply the deposited
money and the money from United States Government Obligations through the Pay-
ing Agent and in accordance with this Indenture to the payment of principal
and interest on the Convertible Subordinated Notes. Money and securities so
held in trust are not subject to Article 11.
Section 8.03 Repayment to Company.
The Trustee and the Paying Agent shall promptly pay to the Company upon re-
quest any excess money or securities held by them at any time.
54
The Trustee and the Paying Agent shall pay to the Company upon request any
money held by them for the payment of principal or interest that remains un-
claimed 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 holder of a Convertible Sub-
ordinated Note entitled thereto no less than 30 days prior to such payment.
After payment to the Company, holders entitled to the money must look to the
Company for payment as general creditors unless an applicable abandoned prop-
erty law designates another person and all liability of the Trustee and such
Paying Agent with respect to such money shall cease.
Section 8.04 Reinstatement.
If the Trustee or Paying Agent is unable to apply any money in accordance
with Section 8.02 by reason of any order or judgment of any court or govern-
mental authority enjoining, restraining or otherwise prohibiting such applica-
tion, the Company's obligations under this Indenture and the Convertible Sub-
ordinated Notes shall be revived and reinstated as though no deposit had oc-
curred pursuant to Section 8.01 until such time as the Trustee or Paying Agent
is permitted to apply all such money in accordance with Section 8.02; provid-
ed, however, that if the Company makes any payment of interest on or principal
of any Convertible Subordinated Note following the reinstatement of its obli-
gations, the Company shall be subrogated to the rights of the holders of such
Convertible Subordinated Notes to receive such payment from the money held by
the Trustee or Paying Agent.
ARTICLE 9
Amendments
Section 9.01 Without the Consent of Holders.
The Company and the Trustee may amend this Indenture or the Convertible Sub-
ordinated Notes without notice to or the consent of any holder of a Convert-
ible Subordinated Note for the purposes of:
(a) adding to the covenants of the Company for the benefit of the hold-
ers of Convertible Subordinated Notes;
(b) surrendering any right or power herein conferred upon the Company;
55
(c) providing for conversion rights of holders of Convertible Subordi-
nated Notes in the event of consolidation, merger or sale of all or sub-
stantially all of the assets of the Company and to otherwise comply with
Section 5.01;
(d) evidencing the succession of another Person to the Company and the
assumption by such successor of the covenants and obligations of the Com-
pany thereunder and in the Convertible Subordinated Notes as permitted
herein;
(e) reducing the Conversion Price, provided that such reduction will not
adversely affect the interests of holders of Convertible Subordinated
Notes in any material respect; or
(f) curing any ambiguity or correcting or supplementing any defective
provision contained in this Indenture, or making any other changes in the
provisions of this Indenture which the Company and the Trustee may deem
necessary or desirable and which will not adversely affect the interest of
the holders of Convertible Subordinated Notes in any material respect.
Section 9.02 With the Consent of Holders.
Subject to Section 6.07, the Company and the Trustee may amend this Inden-
ture or the Convertible Subordinated Notes with the written consent of the
holders of at least a majority in principal amount of the then outstanding
Convertible Subordinated Notes.
Subject to Sections 6.04 and 6.07, the holders of a majority in principal
amount of the Convertible Subordinated Notes then outstanding may also waive
compliance in a particular instance by the Company with any provision of this
Indenture or the Convertible Subordinated Notes.
However, without the consent of each holder of a Convertible Subordinated
Note affected, an amendment or waiver under this Section may not:
(a) reduce the amount of Convertible Subordinated Notes whose holders
must consent to an amendment or waiver;
(b) reduce the rate of, or extend the time for payment of, interest, in-
cluding defaulted interest, on any Convertible Subordinated Note;
56
(c) reduce the principal of or premium on or change the fixed maturity
of any Convertible Subordinated Note or alter redemption provisions with
respect thereto;
(d) make the principal of, or premium, if any, or interest on, any Con-
vertible Subordinated Note payable in money other than as provided for
herein and in the Convertible Subordinated Notes;
(e) waive continuing default in the payment of the principal of or pre-
mium, if any, or interest on, redemption or repurchase payment with re-
spect to, any Convertible Subordinated Notes, including without limitation
a continuing failure to make payment when required upon a Change of Con-
trol or after an Asset Sale Offer Trigger Date;
(f) after the Company's obligation to purchase the Convertible Subordi-
nated Notes arises hereunder, to then amend, modify or change the obliga-
tion of the Company to make or consummate a Change of Control Offer in the
event of a Change of Control or an Asset Sale Offer in the event of an As-
set Sale Offer Trigger Date or waive any default in the performance
thereof or modify any of the provisions or definitions with respect to
such offers;
(g) modify the provision contained herein relating to conversion of or
subordination of the Convertible Subordinated Notes in a manner adverse to
the holders thereof; or
(h) make any change in provisions relating to waivers of defaults, the
abilities of holders of Convertible Subordinated Notes to enforce their
rights hereunder or the provisions of clauses (a) through (h) of this Sec-
tion 9.02.
To secure a consent of the holders of Convertible Subordinated Notes under
this Section, it shall not be necessary for such holders to approve the par-
ticular form of any proposed amendment or waiver, but it shall be sufficient
if such consent approves the substance thereof.
After an amendment or waiver under this Section becomes effective, the Com-
pany shall mail to holders of Convertible Subordinated Notes a notice briefly
describing the amendment or waiver.
The Company agrees that no amendment, supplement or waiver under this Arti-
cle 9 may make any change that adversely affects the rights under Article 11
of any holders of any Designated Senior Indebtedness unless the
57
percentage of holders necessary to amend or waive terms of such Designated Se-
nior Indebtedness consent to such change.
Section 9.03 Compliance with the Trust Indenture Act.
Every amendment to this Indenture or the Convertible Subordinated Notes
shall be set forth in a supplemental indenture that complies with the TIA as
then in effect.
Section 9.04 Revocation and Effect of Consents.
Until an amendment or waiver becomes effective, a consent to it by a holder
of a Convertible Subordinated Note is a continuing consent by the holder and
every subsequent holder of a Convertible Subordinated Note or portion of a
Convertible Subordinated Note that evidences the same debt as the consenting
holder's Convertible Subordinated Note, even if notation of the consent is not
made on any Convertible Subordinated Note. However, any such holder or subse-
quent holder may revoke the consent as to his or her Convertible Subordinated
Note or portion of a Convertible Subordinated Note if the Trustee receives the
notice of revocation before the date on which the Trustee receives an Offi-
cers' Certificate certifying that the holders of the requisite principal
amount of Convertible Subordinated Notes have consented to the amendment or
waiver.
The Company may, but shall not obligated to, fix a record date for the pur-
pose of determining the holders of Convertible Subordinated Notes entitled to
consent to any amendment or waiver. If a record date is fixed, then notwith-
standing the provisions of the immediately preceding paragraph, those persons
who were holders of Convertible Subordinated Notes at such record date (or
their duly designated proxies), and only those persons, shall be entitled to
consent to such amendment or waiver or to revoke any consent previously given,
whether or not such persons continue to be holders after such record date. No
consent shall be valid or effective for more than 90 days after such record
date unless consents from holders of the principal amount of Convertible Sub-
ordinated Notes required hereunder for such amendment or waiver to be effec-
tive shall have also been given and not revoked within such 90-day period.
After an amendment or waiver becomes effective it shall bind every holder of
a Convertible Subordinated Note, unless it is of the type described in any of
58
clauses (1) through (9) of Section 9.02. In such case, the amendment or waiver
shall bind each holder of a Convertible Subordinated Note who has consented to
it.
Section 9.05 Notation on or Exchange of Convertible Subordinated Notes.
Convertible Subordinated Notes authenticated and delivered after the execu-
tion of any supplemental indenture pursuant to this Article 9 may, and shall
if required by the Trustee, bear a notation in the form approved by the
Trustee as to any matter provided for in such supplemental indenture. If the
Company shall so determine, new Convertible Subordinated Notes so modified as
to conform, in the opinion of the Company and the Trustee, to any such supple-
mental indenture may be prepared and executed by the Company and authenticated
and delivered by the Trustee in exchange for outstanding Convertible Subordi-
nated Notes.
Section 9.06 Trustee Protected.
The Trustee shall sign any amendment or supplemental indenture authorized
pursuant to this Article 9 if such amendment or supplemental indenture does
not adversely affect the rights, duties, liabilities or immunities of the
Trustee. If it does, the Trustee may, but need not, sign it. In signing such
amendment or supplemental indenture, the Trustee shall be entitled to receive,
and shall be fully protected in relying upon, an Officers' Certificate and an
Opinion of Counsel as conclusive evidence that such amendment or supplemental
indenture is authorized or permitted by this Indenture, that it is not incon-
sistent herewith, and that it will be valid and binding upon the Company in
accordance with its terms.
ARTICLE 10
General Provisions
Section 10.01 Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies or conflicts with the
duties imposed by TIA ((S)) 318(c), the imposed duties shall control.
59
Section 10.02 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, with postage prepaid (registered or certified, return receipt request-
ed), facsimile or overnight air couriers guaranteeing next day delivery, to
the other's address stated in Section 10.10. The Company or the Trustee by no-
tice to the other may designate additional or different addresses for subse-
quent notices or communications.
All notices and communications (other than those sent to holders of Convert-
ible Subordinated Notes) shall be deemed to have been duly given at the time
delivered by hand, if personally delivered; five business days after being de-
posited in the mail, postage prepaid, if mailed; when transmission confirmed,
if transmitted by facsimile; and the next business day after timely delivery
to the courier, if sent by overnight air courier guaranteeing next day deliv-
ery.
Any notice or communication to a holder of a Convertible Subordinated Note
shall be mailed by first-class mail, with postage prepaid, to his or her ad-
dress shown on the register kept by the Registrar. Failure to mail a notice or
communication to a holder or any defect in it shall not affect its sufficiency
with respect to other holders.
If a notice or communication is sent in the manner provided above within the
time prescribed, it is duly given, whether or not the addressee receives it.
If the Company sends a notice or communication to holders of Convertible
Subordinated Notes, it shall send a copy to the Trustee and each Agent at the
same time.
All other notices or communications shall be in writing.
Section 10.03 Communication by Holders With Other Holders.
Holders may communicate pursuant to TIA ((S)) 312(b) with other holders with
respect to their rights under this Indenture or the Convertible Subordinated
Notes. The Company, the Trustee, the Registrar and anyone else shall have the
protection of TIA ((S)) 312(c).
60
Section 10.04 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:
(1) an Officers' Certificate in form and substance reasonably satisfac-
tory to the Trustee (which shall include the statements set forth in Sec-
tion 10.05) stating that, in the opinion of such person, all conditions
precedent and covenants, if any, provided for in this Indenture relating
to the proposed action have been complied with; and
(2) an Opinion of Counsel in form and substance reasonably satisfactory
to the Trustee (which shall include the statements set forth in Section
10.05) stating that, in the opinion of such counsel, all such conditions
precedent and covenants have been complied with.
Section 10.05 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 a certificate provided
pursuant to TIA ((S)) 314(a)(4)) shall include:
(1) a statement that the person making such certificate or opinion has
read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such cer-
tificate or opinion are based;
(3) a statement that, in the opinion of such person, he or she has made
such examination or investigation as is necessary to enable him or her to
express an informed opinion as to whether or not such covenant or condi-
tion has been complied with; and
(4) a statement as to whether or not, in the opinion of such person,
such condition or covenant has been complied with.
Any Officers' Certificate may be based, insofar as it relates to legal mat-
ters, upon an Opinion of Counsel, unless such Officer knows that the opinion
with respect to the matters upon which his certificate may be based as afore-
said is erroneous. Any Opinion of Counsel may be based, insofar as it relates
to factual matters, upon certificates, statements or opinions of, or represen-
tations by an officer or officers of the Company, or other persons or firms
deemed
61
appropriate by such counsel, unless such counsel knows that the certificates,
statements or opinions or representations with respect to the matters upon
which his certificate, statement or opinion may be based as aforesaid are er-
roneous.
Any Officers' Certificate, statement or Opinion of Counsel may be based, in-
sofar as it relates to accounting matters, upon a certificate or opinion of or
representation by an accountant (who may be an employee of the Company), or
firm of accountants, unless such Officer or counsel, as the case may be, knows
that the certificate or opinion or representation with respect to the account-
ing matters upon which his certificate, statement or opinion may be based as
aforesaid is erroneous.
Section 10.06 Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by or a meeting of holders
of Convertible Subordinated Notes. The Registrar or Paying Agent may make rea-
sonable rules and set reasonable requirements for its functions.
Section 10.07 Legal Holidays.
A "Legal Holiday" is a Saturday, a Sunday or a day on which banking institu-
tions in the City of New York are not required to be open, and a business day
is any day that is not a Legal Holiday. If a payment date is a Legal Holiday
at a place of payment, payment may be made at that place on the next suc-
ceeding day that is not a Legal Holiday, and no interest shall accrue for the
intervening period.
Section 10.08 No Recourse Against Others.
No director, officer, employee or stockholder, as such, of the Company from
time to time shall have any liability for any obligations of the Company under
the Convertible Subordinated Notes or this Indenture or for any claim based
on, in respect of, or by reason of such obligations or their creation. Each
holder by accepting a Convertible Subordinated Note waives and releases all
such liability. This waiver and release are part of the consideration for the
Convertible Subordinated Notes. Each of such directors, officers, employees
and stockholders is a third party beneficiary of this Section 10.08.
Section 10.09 Counterparts.
This Indenture may be executed in any number of counterparts and by the par-
ties hereto in separate counterparts, each of which when so executed
62
shall be deemed to be an original and all of which taken together shall con-
stitute one and the same agreement.
Section 10.10 Other Provisions.
The Company initially appoints the Trustee as Paying Agent, Registrar and
authenticating agent.
The first certificate pursuant to Section 4.03 shall be for the first full
fiscal quarter of the Company following the issuance of Convertible Subordi-
nated Notes hereunder.
The reporting date for Section 7.06 is April 15 of each year. The first re-
porting date is the first April 15 following the issuance of Convertible Sub-
ordinated Notes hereunder.
The Trustee shall always have, or shall be a subsidiary of a bank or bank
holding company which has, a combined capital and surplus of at least
$50,000,000 as set forth in its most recent published annual report of condi-
tion.
The Company's address is:
Rohr, Inc.
850 Lagoon Drive
Chula Vista, CA 91910
Attention: General Counsel
Facsimile: (619) 691-4222
Telephone: (619) 691-2025
The Trustee's address is:
The Bank of New York
101 Barclay Street, 21st Floor West
New York, New York 10286
Attention: Corporate Trust Administration
Facsimile: (212) 815-5915
Telephone: (212) 815-5736
63
The Bank Agent's address is:
Citicorp USA, Inc.
c/o Citicorp North America, Inc.
725 South Figueroa Street
Los Angeles, CA 90017
Attention: Airline and Aerospace Group
Facsimile: (213) 623-3592
Section 10.11 Governing Law.
The internal laws of the State of New York shall govern this Indenture and
the Convertible Subordinated Notes, without regard to the conflict of laws
provisions thereof.
Section 10.12 No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture, loan or debt
agreement of the Company or a subsidiary. Any such other indenture, loan or
debt agreement may not be used to interpret this Indenture.
Section 10.13 Successors.
All agreements of the Company in this Indenture and the Convertible Subordi-
nated Notes shall bind its successor. All agreements of the Trustee in this
Indenture shall bind its successor.
Section 10.14 Severability.
In case any provision in this Indenture or in the Convertible Subordinated
Notes shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
Section 10.15 Table of Contents, Headings, Etc.
The Table of Contents, Cross-Reference Table and headings of the Articles
and Sections of this Indenture have been inserted for convenience of reference
only, are not to be considered a part hereof and shall in no way modify or re-
strict any of the terms or provisions hereof.
64
ARTICLE 11
Subordination
Section 11.01 Agreement To Subordinate.
The Company agrees, and each holder by accepting a Convertible Subordinated
Note agrees, that the indebtedness evidenced by the Convertible Subordinated
Notes is subordinated and junior in right of payment, to the extent and in the
manner provided in this Article, to the prior payment in full in cash [or Cash
Equivalents] of all Senior Indebtedness and that the subordination is for the
benefit of the holders of Senior Indebtedness from time to time.
Section 11.02 Liquidation; Dissolution; Bankruptcy.
Upon any distribution to creditors of the Company in a liquidation, reorga-
nization or dissolution of the Company (in each case whether total or partial)
or in a bankruptcy, reorganization, insolvency, receivership or similar pro-
ceeding or upon assignment for the benefit of creditors relating to the Com-
pany or its property, or a marshalling of assets or liabilities of the Company
(in each case whether voluntary or involuntary);
(1) holders of Senior Indebtedness shall first be entitled to be paid
all obligations owing thereon or in respect thereof in full in cash or
Cash Equivalents before any payment or distribution may be made on or in
respect of the Convertible Subordinated Notes, except to the extent that
holders receive securities that are subordinated to Senior Indebtedness to
at least the same extent as the Convertible Subordinated Notes (the "Other
Subordinated Securities"); and
(2) holders of Convertible Subordinated Notes (or the Trustee on their
behalf) will be required to pay over their share of such distribution di-
rectly to any Representative of the holders of Senior Indebtedness for
payment thereto or, if such holders have no Representative, directly to
such holders of Senior Indebtedness, until such Senior Indebtedness is
paid in full in cash or Cash Equivalents except to the extent that holders
of Convertible Subordinated Notes receive Other Subordinated Securities.
For purposes of this Article 11, a distribution may consist of cash, securi-
ties or other property, by payment, transfer, set-off or otherwise.
65
Section 11.03 Default on Designated Senior Indebtedness.
The Company may not make any direct or indirect payment on or in respect of
any obligations on the Convertible Subordinated Notes and may not acquire or
defease any Convertible Subordinated Notes from the Trustee or any holder of
Convertible Subordinated Notes for cash or property (other than Other Subordi-
nated Securities) if:
(a) a default in the payment of any principal or other obligation in re-
spect of Designated Senior Indebtedness occurs and is continuing beyond
any applicable grace period; or
(b) a default, other than a default referred to in clause (a) above, on
any Designated Senior Indebtedness occurs and is continuing that then per-
mits holders of such Designated Senior Indebtedness to accelerate its ma-
turity and the Trustee receives a notice of the default from the Bank
Agent or other Representative on behalf of Designated Senior Indebtedness
requesting that payments in respect of the Convertible Subordinated Notes
be prohibited.
So long as payments on the Convertible Subordinated Notes are otherwise per-
mitted, then the Company may and shall resume payments on the Convertible Sub-
ordinated Notes and may acquire them upon the earlier of:
(x) the date upon which such default is cured or waived, or
(y) in the case of a default and notice referred to in (b) above, the
passage of 179 days after such notice is received by the Trustee (the
"Payment Blockage Period").
Only one Payment Blockage Period may be commenced within any consecutive
365-day period with respect to the Convertible Subordinated Notes.
Section 11.04 Acceleration of Convertible Subordinated Notes.
If payment of the Convertible Subordinated Notes is accelerated because of
an Event of Default, the Company and the Trustee each shall promptly notify
holders of Senior Indebtedness of the acceleration.
Section 11.05 When Distributions Must Be Paid Over.
In the event that any payment or distribution of assets of the Company,
whether in cash, property or securities (other than Other Subordinated Secu-
66
rities) shall be received by the Trustee on account of the principal or inter-
est on or other obligations in respect of the Convertible Subordinated Notes
at a time when the Trustee shall have received notice in accordance with Sec-
tion 11.11 that such payment is prohibited by Section 11.02 or 11.03, such
payment or distribution shall be segregated and held by the Trustee in trust
for the benefit of, and shall forthwith be paid over and delivered to any Rep-
resentative of the holders of Senior Indebtedness for payments thereto, or, if
such holders have no Representative, directly to such holders of Senior In-
debtedness (pro rata as to each of such holders on the basis of the respective
amounts of Senior Indebtedness held by them), as their respective interests
may appear, for application to the payment of all Senior Indebtedness remain-
ing unpaid to the extent necessary to pay all Senior Indebtedness in full in
cash or Cash Equivalents in accordance with its terms, after giving effect to
any concurrent payment or distribution to or for the holders of Senior Indebt-
edness. Any distribution to the holders of the Senior Indebtedness or their
Representatives of assets other than cash or Cash Equivalents may be held by
such holders or Representatives as collateral securing the payment of such Se-
nior Indebtedness without any duty to liquidate or otherwise realize on such
assets or to apply such assets to any Senior Indebtedness.
If a payment or distribution is made to holders of Convertible Subordinated
Notes that because of this Article 11 should not have been made to them, the
holders of Convertible Subordinated Notes who receive the payment or distribu-
tion shall hold it segregated from other assets and hold it in trust for hold-
ers of Senior Indebtedness and pay it over to them as their interests may ap-
pear for application to the payment of all Senior Indebtedness remaining un-
paid to the extent necessary to pay all Senior Indebtedness in full in cash or
Cash Equivalents in accordance with its terms, after giving effect to any con-
current payment or distribution to or for the holders of Senior Indebtedness.
Section 11.06 Notice by the Company.
The Company shall promptly notify the Trustee and the Paying Agent of any
facts known to the Company that would cause a payment of principal of or in-
terest on the Convertible Subordinated Notes to violate this Article, but
failure to give such notice shall not affect the subordination of the Convert-
ible Subordinated Notes to the Senior Indebtedness provided in this Article.
Nothing in this Article shall apply to claims of, or payments to, the Trustee
under or pursuant to Section 7.07.
67
Section 11.07 Subrogation.
After all Senior Indebtedness is paid in full in cash or Cash Equivalents
and all letters of credit under the Revolving Credit Agreement have expired or
been terminated or the reimbursement obligations of the Company in respect of
such letters of credit then outstanding have been fully secured by cash or
Cash Equivalents and until the Convertible Subordinated Notes are paid in
full, holders of Convertible Subordinated Notes shall be subrogated to the
rights of holders of Senior Indebtedness to receive distributions applicable
to Senior Indebtedness to the extent that distributions otherwise payable to
the holders of Convertible Subordinated Notes have been applied to the payment
of Senior Indebtedness. A distribution made under this Article to holders of
Senior Indebtedness which otherwise would have been made to holders of Con-
vertible Subordinated Notes is not, as between the Company and such holders, a
payment by the Company on Senior Indebtedness.
Section 11.08 Relative Rights.
This Article defines the relative rights of holders of Convertible Subordi-
nated Notes and holders of Senior Indebtedness. Nothing in this Indenture
shall:
(1) impair, as between the Company and holders of Convertible Subordi-
nated Notes, the obligation of the Company, which is absolute and uncondi-
tional, to pay principal of and interest on the Convertible Subordinated
Notes in accordance with their terms;
(2) affect the relative rights of holders of Convertible Subordinated
Notes and creditors of the Company, other than their rights in relation to
holders of Senior Indebtedness; or
(3) prevent the Trustee or any holder of a Convertible Subordinated Note
from exercising its available remedies upon a Default or Event of Default,
subject to the rights of holders of Senior Indebtedness to receive pay-
ments and distributions otherwise payable to holders of Convertible Subor-
dinated Notes.
If the Company fails because of this Article to pay principal of or interest
on a Convertible Subordinated Note on the due date, the failure is still a De-
fault or Event of Default.
68
Section 11.09 Subordination May Not Be Impaired by the Company.
No right of any holder of Senior Indebtedness to enforce the subordination
of the indebtedness evidenced by the Convertible Subordinated Notes shall be
impaired by any act or failure to act by the Company or by its failure to com-
ply with this Indenture (regardless of any knowledge thereof that such holder
may have or otherwise be charged with), or by any act or failure to act by
such holder.
If at any time any payment of any obligations with respect to any Senior In-
debtedness is rescinded or must otherwise be returned upon the insolvency,
bankruptcy, reorganization or liquidation of the Company or otherwise, the
provisions of this Article 11 shall continue to be effective or reinstated, as
the case may be, to the same extent as though such payment had not been made.
Section 11.10 Distribution of Notice to the Representative.
Whenever a distribution is to be made or a notice given to holders of Senior
Indebtedness, the distribution may be made and the notice given to their Rep-
resentative, if any. Whenever a distribution is to be made or notice is to be
given to holders of the Company's outstanding 9.33% Senior Notes or its 9.35%
Senior Notes, such distribution shall be made and such notice shall be given
to each holder of record of such notes at the address specified in the regis-
ter of holders of such notes maintained by the Company.
Upon any payment or distribution of assets of the Company referred to in
this Article 11, the Trustee and the holders of Convertible Subordinated Notes
shall be entitled to rely conclusively upon any order or decree made by any
court of competent jurisdiction or upon any certificate of any Representative
(as to the Senior Debt for which it is the Representative) or of any liquidat-
ing trustee or agent or an Officers' Certificate (as to any Senior Debt for
which there is no Representative) for the purpose of ascertaining the persons
entitled to participate in such distribution, the holders of the Senior In-
debtedness and other indebtedness of the Company, the amount thereof or pay-
able thereon, the amount or amounts paid or distributed thereon and all other
facts pertinent thereto or to this Article 11.
Section 11.11 Rights of the Trustee and Paying Agent.
Notwithstanding any provision of this Article 11 or any other provision of
this Indenture, the Trustee and the Paying Agent shall not at any time be
69
charged with knowledge of the existence of any facts which would prohibit the
making of any payment or distribution to or by the trustee or a Paying Agent
or the taking of any other action (pursuant to this Article 11) by the Trustee
or a Paying Agent unless and until the Trustee or such Paying Agent, as the
case may be, shall have received at its office specified in Section 10.10
written notice thereof from the Company, a Representative or a holder of Se-
nior Indebtedness entitled to give such notice and, prior to the receipt of
any such written notice, the Trustee and such paying Agent shall be entitled
in all respects conclusively to assume that no such fact exists. The Trustee
or the Paying Agent may continue to make payments on the Convertible Subordi-
nated Notes unless it receives such a notice at least one business day prior
to the date upon which payment is due.
The Trustee shall be entitled to rely in good faith on the delivery to it of
a written notice by a Person representing himself, herself or itself to be a
Representative on behalf of a holder of Senior Indebtedness to establish that
such notice has been given by a Representative or a holder of such Senior In-
debtedness. Only the Company, a Representative or a holder of Senior Indebted-
ness that has no Representative may give the notice.
The Trustee in its individual or any other capacity may hold Senior Indebt-
edness with the same rights it would have if it were not the Trustee. Any
Agent may do the same with like rights.
Section 11.12 No Fiduciary Duty to Holders of Senior Indebtedness.
With respect to the holders of Senior Indebtedness, the Trustee undertakes
to perform or to observe only such of its covenants and obligations as are
specifically set forth in this Article 11, and no implied covenants or obliga-
tions with respect to the holders of Senior Indebtedness shall be read into
this Indenture against the Trustee or the Paying Agent. Neither the Trustee
nor the Paying Agent shall be deemed to owe any fiduciary duty to the holders
of such Senior Indebtedness, and the Trustee shall not be liable to any holder
of such Senior Indebtedness if it shall, in the absence of bad faith, pay over
or deliver to holders of Convertible Subordinated Notes, the Company or any
other person monies or assets to which any holder of such Senior Indebtedness
shall be entitled by virtue of this Article 11 or otherwise.
70
Section 11.13 Authorization to Effect Subordination.
Each holder of a Convertible Subordinated Note by its or his acceptance
thereof authorizes and expressly directs the Trustee on its or his behalf to
take such action as may be necessary or appropriate to effect the subordina-
tion provisions contained in this Article 11, and appoints the Trustee its or
his attorney-in-fact for such purpose, including, in the event of any liquida-
tion, reorganization or dissolution of the Company, whether in a bankruptcy,
reorganization, insolvency, receivership or similar proceeding or otherwise,
the immediate filing of a claim for the unpaid balance of its or his Convert-
ible Subordinated Notes in the form required in such proceeding, and to cause
such claim to be approved. If the Trustee does not file a proper claim or
proof of debt in the form required in such proceeding prior to 30 days before
the expiration of the time to file such claim or claims, then the holders of
any Senior Indebtedness or their Representatives are hereby authorized to file
an appropriate claim for and on behalf of the holders of the Convertible Sub-
ordinated Notes.
ARTICLE 12
Conversion of Convertible Subordinated Notes
Section 12.01 Conversion Privilege.
Subject to and upon compliance with the provisions of this Article 12, the
holder of any Convertible Subordinated Note shall have the right, at his op-
tion, at any time on or prior to the close of business on , 2004
(or, if such Note or portion thereof is called for redemption prior to
, 2004, then in respect of such Convertible Subordinated Note or
portion thereof, on or prior to the close of business on the date fixed for
redemption, unless the Company shall default in payment due upon redemption
thereof in which case such conversion right will terminate at the close of
business on the date such default is cured), to convert the principal amount
of any such Convertible Subordinated Note, or any portion of such principal
amount which is $1,000 or an integral multiple thereof, into that number of
fully paid and nonassessable whole shares of Common Stock obtained by dividing
the principal amount of the Convertible Subordinated Note or portion thereof
to be converted by the Conversion Price in effect at such time and by surren-
der of the Convertible Subordinated Note so to be converted in whole or in
part, such surrender to be made in the manner provided in Section 12.02.
71
Section 12.02 Manner of Exercise of Conversion Privilege.
In order to exercise the conversion privilege, the holder of any Convertible
Subordinated Note to be converted in whole or in part shall surrender such
Convertible Subordinated Note, duly endorsed or assigned to the Company or in
blank, at any of the offices or agencies to be maintained for such purpose by
the Company pursuant to Section 4.04, accompanied by the funds, if any, re-
quired by the last paragraph of this Section, and shall give irrevocable writ-
ten notice of conversion in the form provided on the Convertible Subordinated
Notes (or such other notice as is acceptable to the Company) to the Company (a
"Conversion Notice") at such office or agency that the holder elects to con-
vert such Convertible Subordinated Note or the portion thereof specified in
said notice. Such Conversion Notice shall also state the name or names, to-
gether with the address or addresses, in which the certificate or certificates
for shares of Common Stock which shall be issuable in such conversion shall be
issued. Each Convertible Subordinated Note surrendered for conversion shall,
unless the shares issuable on conversion are to be issued in the same name as
the name in which such Convertible Subordinated Note is registered, be accom-
panied by instruments of transfer, in form satisfactory to the Company, duly
executed by the holder or his duly authorized attorney and in amount suffi-
cient to pay any transfer or similar tax. As promptly as practicable after the
surrender of such Convertible Subordinated Note and the receipt of such Con-
version Notice, instruments of transfer and funds, if any, as aforesaid, the
Company shall issue and shall deliver at such office or agency to such holder,
or on his written order, a certificate or certificates for the number of full
shares of Common Stock issuable upon the conversion of such Convertible Subor-
dinated Note or portion thereof in accordance with the provisions of this Ar-
ticle 12 and a check or cash in respect of any fractional interest in a share
of Common Stock arising upon such conversion, as provided in Section 12.03. In
case any Convertible Subordinated Note of a denomination greater than $1,000
shall be surrendered for partial conversion, the Company shall execute and the
Trustee shall register or cause to be registered and shall authenticate and
deliver to or upon the order of the holder of the Convertible Subordinated
Note so surrendered at the expense of the Company, a new Note or Convertible
Subordinated Notes in authorized denominations in an aggregate principal
amount equal to the unconverted portion of the surrendered Note.
Each conversion shall be deemed to have been effected immediately prior to
the close of business on the date on which such Convertible Subordinated
72
Note shall have been surrendered and such Conversion Notice (and any applica-
ble instruments of transfer and any required funds) received by the Company as
aforesaid, and the Person or Persons in whose name or names any certificate or
certificates for shares of Common Stock shall be issuable upon such conversion
shall be deemed to have become the holder or holders of record of the shares
represented thereby at such time on such date and such conversion shall be at
the Conversion Price in effect at such time on such date, unless the stock
transfer books of the Company shall be closed on that date, in which event
such Person or Persons shall be deemed to have become such holder or holders
of record at the close of business on the next succeeding day on which such
stock transfer books are open, but such conversion shall be at the Conversion
Price in effect on the date upon which such Convertible Subordinated Note
shall have been surrendered and such Conversion Notice received by the Compa-
ny.
Any Convertible Subordinated Note or portion thereof surrendered for conver-
sion after the close of business on a Regular Record Date for payment of in-
terest and before the close of business on the next succeeding Interest Pay-
ment Date (unless such Convertible Subordinated Note or portion thereof being
converted is called for redemption on a redemption date in that period) shall
be accompanied by payment, in funds acceptable to the Company, of an amount
equal to the interest thereon that is to be paid on such Interest Payment Date
on the principal amount being converted; provided, however, that no such pay-
ment need be made if there shall exist at the time of conversion a default in
the payment of interest on the Convertible Subordinated Notes. An amount equal
to such payment shall be paid by the Company on such Interest Payment Date to
the holder of such Convertible Subordinated Notes at the close of business on
such Regular Record Date; provided, however, that, if the Company shall de-
fault in the payment of interest on such Interest Payment Date, such amount
shall be paid to the Person who made such required payment. Except as provided
for above in this Section, no payments or adjustments shall be made upon con-
version on account of accrued interest on the Convertible Subordinated Notes
or for any dividends or distributions on any shares of Common Stock delivered
upon the conversion of such Convertible Subordinated Notes as provided in this
Article.
73
Section 12.03 Cash Payments in Lieu of Fractional Shares.
No fractional shares or scrip representing fractions of shares of Common
Stock shall be issued upon conversion of the Convertible Subordinated Notes.
If more than one Convertible Subordinated Note shall be surrendered for con-
version at one time by the same holder, the number of full shares of Common
Stock issuable upon conversion thereof shall be computed on the basis of the
aggregate principal amount of the Convertible Subordinated Notes, or specified
portions thereof to be converted, so surrendered. Instead of any fractional
interest in a share of Common Stock which would otherwise be deliverable upon
the conversion of any Convertible Subordinated Note or Convertible Subordi-
nated Notes, the Company shall pay to the holder of such Convertible Subordi-
nated Note an amount in cash (computed to the nearest cent) equal to the Daily
Market Price thereof at the close of business on the business day next preced-
ing the day of conversion multiplied by the fractional interest (expressed as
a percentage) that otherwise would have been deliverable to such holder upon
such conversion of the Convertible Subordinated Notes.
Section 12.04 Adjustment of Conversion Price.
The Conversion Price shall be as specified in the form of Convertible Subor-
dinated Note set forth in Article 17 thereof subject to adjustment as provided
below. The Conversion Price shall be adjusted from time to time by the Company
as follows:
(a) In case the Company, after the date of this Indenture, shall (i) pay
a dividend or make a distribution on its Common Stock in shares of Common
Stock, (ii) subdivide its outstanding shares of Common Stock into a
greater number of shares, (iii) combine its outstanding shares of Common
Stock into a smaller number of shares, or (iv) issue by reclassification
of its Common Stock any shares of Capital Stock of the Company, the Con-
version Price in effect immediately prior to such action shall be adjusted
so that the holder of any Convertible Subordinated Note thereafter surren-
dered for conversion shall be entitled to receive the number of shares of
Common Stock or other Capital Stock of the Company that it would have
owned or been entitled to receive immediately following such action had
such Convertible Subordinated Note been converted immediately prior to the
occurrence of such event. An adjustment made pursuant to this subsection
(a) shall become effective immediately after the record date, in the case
of a dividend or distribution, or immediately after the
74
effective date, in the case of a subdivision, combination or reclassifica-
tion. If, as a result of an adjustment made pursuant to this subsection
(a), the holder of any Convertible Subordinated Note thereafter surren-
dered for conversion shall become entitled to receive shares of two or
more classes of Capital Stock or shares of Common Stock and other Capital
Stock of the Company, the Board of Directors (whose determination shall be
conclusive and shall be described in a statement filed by the Company with
the Trustee and with any Conversion Agent as soon as practicable) shall
determine the allocation of the adjusted Conversion Price between or among
shares of such classes of Capital Stock or shares of Common Stock and
other Capital Stock.
(b) In case the Company, after the date of this Indenture, shall issue
rights, warrants or options to all holders of its outstanding shares of
Common Stock entitling them to subscribe for or purchase shares of Common
Stock (or securities convertible into Common Stock) at a price per share
less than the current market price per share (as determined pursuant to
subsection (h) of this Section 12.04) of the Common Stock, the Conversion
Price in effect immediately prior thereto shall be adjusted so that it
shall equal the price determined by multiplying the Conversion Price in
effect immediately prior to the date of issuance of such rights, warrants
or options by a fraction of which the numerator shall be the number of
shares of Common Stock outstanding on the date of issuance of such rights,
warrants or options (immediately prior to such issuance), plus the number
of shares of Common Stock which the aggregate offering price of the total
number of shares of Common Stock so offered for subscription or purchase
(or the aggregate conversion price of the convertible securities so of-
fered for subscription or purchase) would purchase at such current market
price, and of which the denominator shall be the number of shares of Com-
mon Stock outstanding on the date of issuance of such rights, warrants or
options (immediately prior to such issuance) plus the number of additional
shares of Common Stock so offered for subscription or purchase (or into
which the convertible securities so offered for subscription or purchase
are convertible). Such adjustment shall be made successively whenever any
such rights, warrants or options are issued, and shall become effective
immediately after the record date for the determination of stockholders
entitled to receive such rights, warrants or options. In determining
whether any rights, warrants or options entitle the holders to subscribe
for or purchase shares of Common Stock (or
75
securities convertible into Common Stock) at less than such current market
price, and in determining the aggregate offering price of such shares of
Common Stock (or conversion price of such convertible securities), there
shall be taken into account any consideration received by the Company for
such rights, warrants or options (and for such convertible securities),
the value of such consideration, if other than cash, to be determined by
the Board of Directors (whose determination shall be conclusive and shall
be described in a certificate filed with the Trustee and with any Conver-
sion Agent by the Company as soon as practicable). If at the end of the
period during which such warrants, rights or options are exercisable not
all such warrants, rights or options shall have been exercised, the ad-
justed Conversion Price shall be immediately readjusted to what it would
have been based on the number of additional shares of Common Stock actu-
ally issued (or the number of shares of Common Stock issuable upon conver-
sion of convertible securities actually issued).
(c) In case the Company, after the date of this Indenture, shall dis-
tribute to all or substantially all holders of its outstanding Common
Stock any shares of Capital Stock (other than Common Stock), evidences of
its indebtedness or assets (including securities and cash, but excluding
any cash dividend paid out of current or retained earnings of the Company
and dividends or distributions payable in stock for which adjustment is
required pursuant to subsection (a) of this Section 12.04) or rights, war-
rants or options to subscribe for or purchase securities of the Company
(excluding those referred to in subsection (b) of this Section 12.04),
then in each such case the Conversion Price shall be adjusted so that the
same shall equal the price determined by multiplying the Conversion Price
in effect immediately prior to the record date of such distribution by a
fraction of which the numerator shall be the current market price per
share (as determined pursuant to subsection (h) of this Section 12.04) of
the Common Stock less the fair market value on such record date (as deter-
mined by the Board of Directors, whose determination shall be conclusive
and shall be described in a certificate filed with the Trustee and with
any Conversion Agent by the Company as soon as practicable) of the portion
of the Capital Stock or the evidences of indebtedness or the assets so
distributed to the holder of one share of Common Stock or of such sub-
scription rights, warrants or options applicable to one share of Common
Stock and of which the denominator shall be such current market price per
share of Common Stock. Such adjustment shall become effective im-
76
mediately after the record date for the determination of stockholders en-
titled to receive such distribution. In the event of a distribution to all
or substantially all holders of Common Stock of rights to subscribe for
additional shares of the Company's Capital Stock (other than those re-
ferred to in subsection (b) of this Section 12.04), the Company may, in-
stead of making an adjustment in the Conversion Price, make proper provi-
sion so that each holder of a Convertible Subordinate Note who converts
such Convertible Subordinated Note after the record date for such distri-
bution and prior to the expiration or redemption of such rights shall be
entitled to receive upon such conversion, in addition to shares of Common
Stock, an appropriate number of such rights. If at the end of the period
during which warrants, rights or options described in this subsection (c)
are exercisable not all such warrants, rights or options shall have been
exercised, the adjusted Conversion Price shall be immediately readjusted
to what it would have been based on the number of warrants, rights or op-
tions actually exercised.
(d) Notwithstanding anything in subsection (b) or (c) of this Section
12.04 to the contrary, with respect to any rights, warrants or options
covered by subsection (b) or (c) of this Section 12.04, if such rights,
warrants or options are only exercisable upon the occurrence of certain
triggering events, then for purposes of this Section 12.04 such rights,
warrants or options shall not be deemed issued or distributed, and any ad-
justment to the Conversion Price required by subsection (b) or (c) of this
Section 12.04 shall not be made until such triggering events occur and
such rights, warrants or options become exercisable.
(e) In case the Company, after the date of this Indenture, shall issue
to an Affiliate shares of its Common Stock (excluding those rights, war-
rants, options, shares of Capital Stock or evidences of its indebtedness
or assets referred to in subsection (b) or (c) to this Section 12.04) at a
net price per share less than the current market price per share (as de-
termined pursuant to subsection (h) of this Section 12.04) on the date the
Company fixes the offering price of such additional shares, the Conversion
Price shall be reduced immediately thereafter so that it shall equal the
price determined by multiplying such Conversion Price in effect immedi-
ately prior thereto by a fraction of which the numerator shall be the num-
ber of shares of Common Stock outstanding immediately prior to the issu-
ance of such additional shares plus the number of shares of Common Stock
which the aggregate offering price of the total number of shares of Com-
77
mon Stock so offered would purchase at the current market price and the
denominator shall be the number of shares of Common Stock that would be
outstanding immediately after the issuance of such additional shares. Such
adjustment shall be made successively whenever such an issuance is made.
This subsection (e) shall not apply to Common Stock issued to any Affili-
ate under a bona fide employee or director benefit plan or agreement
adopted by the Company or any subsidiary thereof and approved by either
the stockholders of the Company or a majority of the Company's outside di-
rectors.
(f) In case the Company, after the date of this Indenture, shall, by
dividend or otherwise, at any time distribute to all holders of its Common
Stock cash (including any cash that is distributed as part of a distribu-
tion referred to in subsection (c) of this Section) in an aggregate amount
that, together with (i) the aggregate amount of any other distributions to
all holders of its Common Stock made exclusively in cash within the 12
months preceding the date fixed for determining the stockholders entitled
to such distribution and in respect of which no Conversion Price adjust-
ment pursuant to this subsection (f) has been made and (ii) the aggregate
of any cash plus the fair market value (as determined by the Board of Di-
rectors, whose determination shall be conclusive and described in a Board
Resolution), as of such date of determination, of consideration payable in
respect of any tender offer by the Company or a subsidiary for all or any
portion of the Common Stock consummated within 12 months preceding the
date fixed for determining the stockholders entitled to such distribution
and in respect of which no Conversion Price adjustment pursuant to subsec-
tion (g) of this Section has been made, exceeds 15% of the product of the
current market price per share (determined as provided in subsection (h)
of this Section) on the date fixed for the determination of stockholders
entitled to receive such distribution times the number of shares of Common
Stock outstanding on such date, the Conversion Price shall be reduced by
multiplying such Conversion Price by a fraction of which the numerator
shall be the current market price per share (determined as provided in
subsection (h) of this Section) on the date fixed for such determination
less the amount of cash so distributed at such time applicable to one
share of Common Stock and the denominator shall be such current market
price, such reduction to become effective immediately prior to the opening
of business on the date after the date fixed for such determination.
78
(g) In case a tender offer made by the Company or any subsidiary, after
the date of this Indenture, for all or any portion of the Common Stock
shall be consummated and such tender offer shall involve an aggregate con-
sideration having a fair market value (as determined by the Board of Di-
rectors, whose determination shall be conclusive and described in a Board
Resolution) as of the last time (the "Expiration Time") that tenders may
be made pursuant to such tender offer (as it may be amended) that, to-
gether with (i) aggregate of the cash plus the fair market value (as de-
termined by the Board of Directors, whose determination shall be conclu-
sive and described in a Board Resolution), as of the consummation of such
tender offer, of other consideration paid or payable in respect of any
tender offer by the Company or a subsidiary for all or any portion of the
Common Stock consummated within the 12 months preceding the consummation
of such tender offer and in respect of which no Conversion Price adjust-
ment pursuant to this subsection (g) has been made and (ii) the aggregate
amount of any distributions to all holders of Common Stock made exclu-
sively in cash within the 12 months preceding the consummation of such
tender offer and in respect of which no Conversion Price adjustment pursu-
ant to subsection (f) of this Section has been made, exceeds 15% of the
product of the current market price per share (determined as provided in
subsection (h) of this Section) immediately prior to the Expiration Time
times the number of shares of Common Stock outstanding (including any ten-
dered shares) at the Expiration Time, the Conversion Price shall be re-
duced by multiplying the Conversion Price in effect immediately prior to
the Expiration Time by a fraction of which the numerator shall be (i) the
product of the current market price per share (determined as provided in
subsection (h) of this Section) immediately prior to the Expiration Time
times the number of shares of Common Stock outstanding (including any ten-
dered shares) at the Expiration Time minus (ii) the fair market value (de-
termined as aforesaid) of the aggregate consideration payable to stock-
holders upon consummation of such tender offer (the shares accepted for
payment in the tender offer being referred to as the "Purchased Shares")
and the denominator shall be the product of (x) such current market price
per share times (y) such number of outstanding shares at the Expiration
Time minus the number of Purchased Shares, such reduction to become effec-
tive immediately prior to the opening of business on the day following the
Expiration Time; provided that, if the number of Purchased Shares or the
aggregate considera-
79
tion payable therefor have not been finally determined by such opening of
business, the adjustment required by this subsection (g) shall, pending
such final determination, be made based upon the preliminary announced re-
sults of such tender offer, and, after such final determination shall have
been made, the adjustment required by this subsection (g) shall be made
based upon the number of Purchased Shares and the aggregate consideration
payable therefor as so finally determined.
(h) For the purpose of any computation under subsections (b) through (g) of
this Section 12.04, the current market price per share of Common Stock on any
date shall be deemed to be the average of the Daily Market Prices for the
shorter of (i) 30 consecutive business days ending on the last full trading
day on the exchange or market referred to in determining such Daily Market
Prices prior to the Time of Determination or (ii) the period commencing on the
date next succeeding the first public announcement of the issuance of such
rights or warrants or such distribution through such last full trading day
prior to the Time of Determination.
(i) In any case in which this Section 12.04 shall require that an adjustment
be made immediately following a record date or an effective date, the Company
may elect to defer (but only until five business days following the filing by
the Company with the Trustee and any Conversion Agent of the certificate re-
quired by subsection (k) of this Section 12.04) issuing to the holder of any
Convertible Subordinated Note converted after such record date or effective
date the shares of Common Stock issuable upon such conversion over and above
the shares of Common Stock issuable upon such conversion on the basis of the
Conversion Price prior to adjustment, and paying to such holder any amount of
cash in lieu of a fractional share.
(j) No adjustment in the Conversion Price shall be required to be made un-
less such adjustment would require an increase or decrease of at least 1% in
such price; provided, however, that any adjustments which by reason of this
subsection (j) are not required to be made shall be carried forward and taken
into account in any subsequent adjustment. All calculations under this Section
12.04 shall be made to the nearest cent or to the nearest 1/100th of a share,
as the case may be. No adjustment to the Conversion Price need be made if only
the par value of the Common Stock is changed (including any change to no par
value Common Stock). To the extent that the Notes become convertible into
cash, no adjustment need be made thereafter as to such cash and interest
80
will not accrue on such cash. Anything in this Section 12.04 to the contrary
notwithstanding, the Company shall be entitled to make such reduction in the
Conversion Price, in addition to those required by this Section 12.04, as it
in its discretion shall determine to be advisable in order that any stock div-
idend, subdivision of shares, distribution of rights to purchase stock or se-
curities, or distribution of securities convertible into or exchangeable for
stock hereafter made by the Company to its stockholders shall not be taxable
to the recipients.
(k) Whenever the Conversion Price is adjusted as herein provided, (i) the
Company shall promptly file with the Trustee and any Conversion Agent other
than the Trustee a certificate signed by the President, any Vice President or
the Treasurer of the Company setting forth the Conversion Price after such ad-
justment and setting forth a brief statement of the facts requiring such ad-
justment and the manner of computing the same, which certificate shall be con-
clusive evidence of the correctness of such adjustment, and (ii) a notice
stating that the Conversion Price has been adjusted and setting forth the ad-
justed Conversion Price shall forthwith be given by the Company to the holders
of Convertible Subordinated Notes in the manner provided in Section 10.02. The
Company may correct any previous certificate and notice given pursuant to this
subsection (k) by (i) promptly filing with the Trustee and any Conversion
Agent other than the Trustee a new certificate in the form required by this
subsection (k) and (ii) giving a new notice to the holders of Convertible Sub-
ordinated Notes in the form and manner required by this subsection (k). Such
new certificate and notice shall state that such certificate and notice are
being provided to correct the previous certificate and notice. Except as oth-
erwise provided in Section 7.01, neither the Trustee nor any Conversion Agent
shall be under any duty or responsibility with respect to the certificate re-
quired by this subsection (k) except to exhibit the same to any holder of Con-
vertible Subordinated Notes who requests to inspect it. The certificate re-
quired by this subsection (k) shall be filed at each office or agency main-
tained for the purposes of conversion of Notes pursuant to Section 2.03.
(l) In the event that at any time, as a result of an adjustment made pursu-
ant to subsection (a) of this Section 12.04, the holder of any Convertible
Subordinated Note thereafter surrendered for conversion shall become entitled
to receive any shares of the Company other than shares of Common Stock, there-
after the Conversion Price of such other shares so receivable upon conversion
of any Note shall be subject to adjustment from time to time in a manner and
on terms as nearly equivalent as practicable to the provisions with
81
respect to Common Stock contained in this Article 12 and the other provisions
of this Article 12 applicable to Common Stock shall apply to such other
shares.
Section 12.05 Notice to Holders Prior to Certain Corporate Actions.
In case:
(a) the Company shall take any action that would require an adjustment
in the Conversion Price pursuant to Section 12.04(c); or
(b) the Company shall authorize the granting to the holders of its Com-
mon Stock generally of rights, warrants or options to subscribe for or
purchase any shares of stock of any class or of any other rights (other
than employee or director stock options); or
(c) there shall be any reorganization or reclassification of the Common
Stock (other than a subdivision or combination of the outstanding Common
Stock and other than a change in the par value of the Common Stock), or
any consolidation or merger to which the Company is a party, or any con-
veyance, transfer, sale or lease of the Company's properties and assets
as, or substantially as, an entirety; or
(d) there shall be a voluntary or involuntary dissolution, liquidation
or winding up of the Company;
then the Company shall cause to be filed with the Trustee and any Conversion
Agent, and shall cause to be given to the holders of Convertible Subordinated
Notes, in the manner provided in Section 10.02, as promptly as possible, but
in any event at least 10 days prior to the applicable date hereinafter speci-
fied, a notice stating (i) the date on which a record is to be taken for the
purpose of such dividend, or distribution or rights or warrants, or, if a rec-
ord is not to be taken, the date as of which the holders of Common Stock of
record to be entitled to such distribution or rights are to be determined, or
(ii) the date on which such reorganization, reclassification, consolidation,
merger, conveyance, transfer, sale, lease, dissolution, liquidation or winding
up is expected to become effective or occur, and, if applicable, the date as
of which it is expected that holders of Common Stock of record shall be enti-
tled to exchange their shares of Common Stock for securities, cash or other
property deliverable upon such reorganization, reclassification, consolida-
tion, merger, conveyance, transfer, sale, lease, liquidation or winding up.
Failure to give such notice or any defect therein shall not affect the legal-
ity or validity of the proceedings described in subsection (a), (b), (c) or
(d) of this Section 12.05.
82
Section 12.06 Reservation of Shares of Common Stock.
The Company shall at all times reserve and keep available, free from preemp-
tive rights, out of the aggregate of its authorized but unissued shares of
Common Stock or its issued shares of Common Stock held in its treasury, or
both, for the purpose of effecting conversions of Convertible Subordinated
Notes, the full number of shares of Common Stock deliverable upon the conver-
sion of all outstanding Notes not theretofore converted.
Before taking any action that would cause an adjustment reducing the Conver-
sion Price below the then par value (if any) of the shares of Common Stock de-
liverable upon conversion of the Convertible Subordinated Notes, the Company
shall take any corporate action which may, in the opinion of its counsel, be
necessary in order that the Company may validly and legally issue fully paid
and nonassessable shares of Common Stock at such adjusted Conversion Price.
Section 12.07 Taxes upon Conversion.
The Company shall pay any and all documentary, stamp or similar issue or
transfer taxes payable in respect of the issue or delivery of shares of Common
Stock on conversions of Notes pursuant hereto; provided, however, that the
Company shall not be required to pay any tax which may be payable in respect
of any transfer involved in the issue or delivery of shares of Common Stock in
a name other than that of the holder of the Convertible Subordinated Note or
Convertible Subordinated Notes to be converted and no such issue or delivery
shall be made unless and until the Person requesting such issue or delivery
has paid to the Company the amount of any such tax or has established to the
satisfaction of the Company that such tax has been paid.
Section 12.08 Covenants as to Common Stock.
The Company covenants that all shares of Common Stock which may be delivered
upon conversions of Convertible Subordinated Notes will upon delivery be duly
and validly issued and fully paid and nonassessable, free of all Liens and
charges and not subject to any preemptive rights.
The Company further covenants that, for so long as the Common Stock shall be
listed on the New York Stock Exchange or any other national securities ex-
change, the Company will, if permitted by the rules of such exchange,
83
list and keep listed all Common Stock issuable upon conversion of the Convert-
ible Subordinated Notes.
Section 12.09 Consolidation or Merger or Sale of Assets.
Notwithstanding any other provision herein to the contrary, in case of any
consolidation or merger to which the Company is a party (other than a merger
or consolidation which does not result in any reclassification, conversion,
exchange or cancellation of the outstanding shares of Common Stock of the Com-
pany), or in case of any conveyance, transfer, sale or lease to another corpo-
ration of the properties and assets of the Company as, or substantially as, an
entirety, the corporation formed by such consolidation, or the corporation
whose securities, cash or other property will immediately after the merger or
consolidation be owned, by virtue of the merger or consolidation, by the hold-
ers of Common Stock of the Company immediately prior to the merger or the cor-
poration which shall have acquired such properties and assets of the Company,
as the case may be, shall promptly execute and deliver to the Trustee a sup-
plemental indenture providing that the holder of each Convertible Subordinated
Note then outstanding shall have the right thereafter to convert such Note,
during the period such Note is convertible as specified in this Article 12,
into the kind and amount of securities, cash or other property receivable upon
such consolidation, merger, conveyance, transfer, sale or lease by a holder of
the number of shares of Common Stock into which such Note might have been con-
verted immediately prior to such consolidation, merger, conveyance, transfer,
sale or lease, assuming such holder of Common Stock (i) is not a Person with
which the Company consolidated or into which the Company merged or was merged
or to which such conveyance, transfer, sale or lease was made or an Affiliate
of such Person and (ii) did not exercise statutory rights of election, if any,
as to the kind or amount of securities, cash or other property receivable upon
such consolidation, merger, conveyance, transfer, sale or lease (provided
that, if the kind or amount of securities, cash or other property receivable
upon such consolidation, merger, conveyance, transfer, sale or lease is not
the same for each share of Common Stock in respect of which such rights of
election shall not have been exercised ("non-electing share"), then for the
purposes of this Section 12.09 the kind and amount of securities, cash or
other property receivable upon such consolidation, merger, conveyance, trans-
fer, sale or lease for each non-electing share shall be deemed to be the kind
and amount so receivable per share by the holders of a plurality of the non-
electing shares). Such supplemental indenture
84
shall provide for adjustments which, for events subsequent to the effective
date of such supplemental indenture, shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Article 12 in relation to
any shares of stock or other securities or property thereafter deliverable on
the conversion of the Notes.
The above provisions of this Section 12.09 shall similarly apply to succes-
sive consolidations, mergers, conveyances, transfers, sales or leases.
The Company shall give notice of the execution of such a supplemental inden-
ture to the holders of Convertible Subordinated Notes in the manner provided
in Section 10.02 within 30 days after the execution thereof; provided, howev-
er, that such notice need not be given if such information has been provided
prospectively in the notice given pursuant to Section 12.05. Failure to give
such notice, or any defects therein, shall not affect the legality or validity
of any such supplemental indenture or any transaction contemplated in this
Section 12.09.
Section 12.10 Disclaimer of Responsibility for Certain Matters.
Neither the Trustee nor any Conversion Agent shall at any time be under any
duty or responsibility to any holder of Convertible Subordinated Notes to de-
termine whether any facts exist which may require any adjustment of the Con-
version Price, or with respect to the nature or extent of any such adjustment
when made, or with respect to the method employed, or herein or in any supple-
mental indenture provided to be employed, in making the same. Neither the
Trustee nor any Conversion Agent shall be accountable with respect to the
listing or registration referred to in Section 12.08 or the validity or value
(or the kind or amount) of any shares of Common Stock, or of any securities,
cash or other property, which may at any time be issued or delivered upon the
conversion of any Note; and neither the Trustee nor any Conversion Agent makes
any representation with respect thereto. Neither the Trustee nor any Conver-
sion Agent shall be responsible for any failure of the Company to issue,
transfer or deliver any shares of Common Stock or stock certificates or other
securities or property or to make any cash payment upon the surrender of any
Note for the purpose of conversion or, subject to the provisions of Section
7.01, to comply with any of the covenants of the Company contained in this Ar-
ticle 12.
85
Section 12.11 Cancellation of Converted Notes.
All Notes delivered for conversion shall be delivered to the Trustee to be
cancelled by or at the direction of the Trustee, which shall dispose of the
same as provided in Section 2.11.
Section 12.12 Voluntary Reduction.
The Company from time to time may reduce the Conversion Price by any amount
for any period of time if the period is at least 20 days or such longer period
as may be required by law and if the reduction is irrevocable during such pe-
riod.
86
IN WITNESS WHEREOF, the parties have caused this Indenture to be duly exe-
cuted and attested, all as of the date first above written, signifying their
agreements contained in this Indenture.
ROHR, INC.
By _________________________________________
Name:
Title:
Attest:
- -------------------------
THE BANK OF NEW YORK
By _________________________________________
Name:
Title:
Attest:
- -------------------------
S-1
EXHIBIT A
(Face of Security)
No. $
CUSIP
ROHR, INC.
% CONVERTIBLE SUBORDINATED NOTE DUE 2004
promises to pay to
or registered assigns,
the principal sum of Dollars on , 2004
Interest Payment Dates: and
Regular Record Dates: and
Certificate of Authentication
This is one of the Convertible Subordinated Notes
described in the within-mentioned Indenture.
THE BANK OF NEW YORK, ROHR, INC.
as Trustee
By______________________________ By___________________________________________
Authorized Signatory President and Chief Executive Officer
Dated: By___________________________________________
Secretary
(SEAL)
EXHIBIT A
(Back of Security)
ROHR, INC.
% CONVERTIBLE SUBORDINATED NOTE DUE 2004
1. INTEREST. Rohr, Inc., a Delaware corporation (the "Company"), promises to
pay interest on the principal amount of this Convertible Subordinated Note at
the rate per annum shown above. The Company will pay interest semiannually on
May 15 and November 15 of each year. Interest on the Convertible Subordinated
Notes will accrue from the most recent date to which interest has been paid
or, if no interest has been paid, from , 1994. Interest will be
computed on the basis of a 360-day year of twelve 30-day months. Interest on
overdue principal and (to the extent permitted by law) on overdue installments
of interest will accrue at a rate of % per annum.
2. METHOD OF PAYMENT. The Company will pay interest on the Convertible Sub-
ordinated Notes (except defaulted interest) to the person in whose name each
Convertible Subordinated Note is registered at the close of business on the
May 1 or November 1 immediately preceding the relevant interest payment date
(each a "Regular Record Date") even though Convertible Subordinated Notes are
cancelled after the record date and on or before the interest payment date.
Holders must surrender Convertible Subordinated 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, and may mail such check to the
holder's registered address.
3. PAYING AGENT AND REGISTRAR. The Bank of New York, a New York State bank-
ing corporation (together with any successor Trustee under the Indenture re-
ferred to below, the "Trustee"), will act as Paying Agent and Registrar. The
Company may change the Paying Agent, Registrar or co-registrar without prior
notice. Subject to certain limitations in the Indenture, the Company or any of
its subsidiaries may act in any such capacity.
A-2
4. INDENTURE. The Company issued the Convertible Subordinated Notes under an
Indenture dated as of May 15, 1994 (the "Indenture") between the Company and
the Trustee. The terms of the Convertible Subordinated Notes include those
stated in the Indenture and those made part of the Indenture by reference to
the Trust Indenture Act of 1939 (15 U.S. Code ((S))((S)) 77aaa-77bbbb) as in
effect on the date of the Indenture. The Convertible Subordinated Notes are
subject to, and qualified by, all such terms, certain of which are summarized
hereon, and holders are referred to the Indenture and such Act for a statement
of such terms. The Convertible Subordinated Notes are unsecured general obli-
gations of the Company limited to $50,000,000 in aggregate principal amount.
Capitalized terms not defined below have the same meaning as is given to them
in the Indenture.
5. OPTIONAL REDEMPTION. The Company may redeem the Convertible Subordinated
Notes, in whole or in part, prior to maturity at any time on or after
, 1998 at the following redemption prices (expressed as per-
centages of the principal amount), plus accrued and unpaid interest to the
date fixed for redemption, if redeemed during the twelve-month period begin-
ning of each year indicated below:
REDEMPTION
YEAR PRICE
---- ----------
1998.......................................................... %
1999.......................................................... %
2000.......................................................... %
2001.......................................................... %
2002.......................................................... %
2003.......................................................... %
2004.......................................................... 100.00%
6. NOTICE OF REDEMPTION. Notice of redemption will be mailed at least 30
days but not more than 60 days before the date fixed for redemption to each
holder of Convertible Subordinated Notes to be redeemed at his or her regis-
tered address. Convertible Subordinated Notes in denominations larger than
$1,000 may be redeemed in part but only in whole multiples of $1,000. In the
event of a redemption of less than all of the Convertible Subordinated Notes,
the Convertible Subordinated Notes will be chosen for redemption by the
Trustee by lot or pro rata or, if required, in compliance with the require-
ments of the principal national securities exchange, if any, on which the Con-
vertible Subordinated Notes are listed. On and after the redemption date in-
A-3
terest ceases to accrue on Convertible Subordinated Notes or portions of them
called for redemption (unless the Company defaults in the payment of the re-
demption price). If this Convertible Subordinated 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 any accrued interest will be
paid to the person in whose name this Convertible Subordinated Note is regis-
tered at the close of business on such record date.
7. CHANGE OF CONTROL. Upon a Change of Control, the Company shall make a
Change of Control Offer to purchase all outstanding securities at a price
equal to 101% of the aggregate principal amount of the Convertible Subordi-
nated Notes, plus accrued and unpaid interest to the date of purchase, such
offer to be made as provided in the Indenture. To accept the Change of Control
Offer, the holder hereof must comply with the terms thereof, including surren-
dering this Convertible Subordinated Note, with the "Option of Holder to Elect
Purchase" portion hereof completed, to the Company, a depositary, if appointed
by the Company, or a Paying Agent, at the address specified in the notice of
the Change of Control Offer mailed to holders as provided in the Indenture,
prior to termination of the Change of Control Offer.
8. SUBORDINATION. To the extent set forth in Article 11 of the Indenture the
Convertible Subordinated Notes are subordinated to Senior Indebtedness. Senior
Indebtedness shall not include (i) any indebtedness of the Company to any of
its subsidiaries, (ii) Capitalized Lease Obligations, (iii) indebtedness in
respect of the Pooling and Services Agreement, (iv) the Company's 9.25% Subor-
dinated Debentures due 2017 and its 7% Convertible Subordinated Debentures due
2012, and (v) any advances, deposits or partial progress payments, payables,
unpaid wages and related employee obligations, trade accounts and accrued lia-
bilities. To the extent provided in the Indenture, Senior Indebtedness must be
paid before the Convertible Subordinated Notes may be paid. The Company
agrees, and each holder by accepting a Convertible Subordinated Note agrees,
to the subordination and authorizes the Trustee to give it effect.
9. DENOMINATIONS, TRANSFER, EXCHANGE. The Convertible Subordinated Notes are
in registered form without coupons in denominations of $1,000 and integral
multiples of $1,000. The transfer of Convertible Subor-
A-4
dinated Notes may be registered and Convertible Subordinated Notes may be ex-
changed as provided in the Indenture. As a condition of transfer, the Regis-
trar may require a holder, among other things, to furnish appropriate endorse-
ments and transfer documents and the Company may require a holder 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 Subordinated
Note or portion of a Convertible Subordinated Note selected for redemption.
Also, it need not exchange or register the transfer of any Convertible Subor-
dinated Note for a period of 15 days before a selection of Convertible Subor-
dinated Notes to be redeemed.
10. PERSONS DEEMED OWNERS. The registered holder of a Convertible Subordi-
nated Note may be treated as its owner for all purposes.
11. AMENDMENTS AND WAIVERS. Subject to certain exceptions, the Indenture or
the Convertible Subordinated Notes may be amended with the consent of the
holders of at least a majority in principal amount of the then outstanding
Convertible Subordinated Notes and any existing default may be waived with the
consent of the holders of a majority in principal amount of the then outstand-
ing Convertible Subordinated Notes. Without the consent of any holder, the In-
denture or the Convertible Subordinated Notes may be amended to: add to the
covenants of the Company for the benefit of the holders of Convertible Subor-
dinated Notes; surrender any right or power conferred upon the Company; pro-
vide for conversion rights of holders of Convertible Subordinated Notes in the
event of consolidation, merger or sale of all or substantially all of the as-
sets of the Company; evidence the succession of another person to the Company
and the assumption by such successor of the covenants and obligations of the
Company thereunder and in the Convertible Subordinated Notes as permitted by
the Indenture; reduce the Conversion Price, provided that such reduction will
not adversely affect the interest of holders of Convertible Subordinated Notes
in any material respect; cure any ambiguity or correct or supplement any de-
fective provision contained in the Indenture, or make any other change in the
provisions of the Indenture in which the Company and the Trustee may deem nec-
essary or desirable and which will not adversely affect the interest of the
holders of Convertible Subordinated Notes in any material respect.
12. DEFAULTS AND REMEDIES. An Event of Default is: default for 30 days in
payment of interest on the Convertible Subordinated Notes; default
A-5
in payment of principal of or premium, if any, on the Convertible Subordinated
Notes; failure by the Company to comply with certain covenants of the Inden-
ture upon the receipt of written notice of such default as set forth in the
Indenture; failure by the Company for 60 days after notice to it to comply
with any of its other agreements in the Indenture or the Convertible Subordi-
nated Notes; certain defaults under and accelerations prior to maturity of
certain indebtedness; certain final judgments which remain undischarged; and
certain events of bankruptcy or insolvency. If an Event of Default occurs and
is continuing, the Trustee or the holders of at least 25% in principal amount
of the then outstanding Convertible Subordinated Notes may declare all the
Convertible Subordinated 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 outstanding Convertible Subordinated Notes become due and
payable without further action or notice. Holders may not enforce the Inden-
ture or the Convertible Subordinated Notes except as provided in the Inden-
ture. The Trustee may require an indemnity satisfactory to it before it en-
forces the Indenture or the Convertible Subordinated Notes. Subject to certain
limitations, holders of a majority in principal amount of the then outstanding
Convertible Subordinated Notes may direct the Trustee in its exercise of any
trust or power. The Trustee may withhold from holders notice of any continuing
default (except a default in payment of principal or interest) if it deter-
mines that withholding notice is in their interests. The Company must furnish
quarterly compliance certificates to the Trustee.
13. TRUSTEE DEALINGS WITH THE COMPANY. The Trustee or any of its Affiliates,
in their individual or any other capacities, may make or continue loans to or
guaranteed by, accept deposits from and perform services for the Company or
its Affiliates and may otherwise deal with the Company or its Affiliates as if
it were not Trustee.
14. NO RECOURSE AGAINST OTHERS. No director, officer, employee or stockhold-
er, as such, of the Company shall have any liability for any obligations of
the Company under the Convertible Subordinated Notes or the Indenture or for
any claim based on, in respect of or by reason of such obligations or their
creation. Each holder by accepting a Convertible Subordinated Note waives and
releases all such liability. The waiver and release are part of the considera-
tion for the Convertible Subordinated Notes.
A-6
15. AUTHENTICATION. This Convertible Subordinated Note shall not be valid
until authenticated by the manual signature of the Trustee or an authenticat-
ing agent.
16. ABBREVIATIONS. Customary abbreviations may be used in the name of a
holder or an assignee, such as: TEN CO = tenants in common, TEN ENT = tenants
by the entireties, JT TEN = joint tenants with right of survivorship and not
as tenants in common, CUST = Custodian and U/G/M/A = Uniform Gifts to Minors
Act.
17. CONVERSIONS. Subject to and upon compliance with the provisions of the
Indenture, the registered holder of this Note has the right, at his option, at
any time or prior to the close of business on , 2004 (or in case this Con-
vertible Subordinated Note or any portion hereof shall be called for redemp-
tion prior to such date, then on or prior to the close of business on the
fifth business day immediately preceding the date fixed for redemption), to
convert the principal amount hereof, or any portion of such principal amount
which is $1,000 or an integral multiple thereof, into that number of fully
paid and nonassessable whole shares of common stock of the Company ("Common
Stock") obtained by dividing the principal amount of the Convertible Subordi-
nated Note or portion thereof to be converted by the conversion price of
$ per share, or the conversion price as adjusted from time to time as
provided in the Indenture, upon surrender of this Convertible Subordinated
Note to the Company at the office or agency maintained for such purpose in New
York, New York (and at such other offices or agencies designated for such pur-
pose by the Company), accompanied by written notice of conversion duly exe-
cuted and (if the shares of Common Stock to be issued on conversion are to be
issued in any name other than that of the registered holder of this Convert-
ible Subordinated Note) by instruments of transfer, in form satisfactory to
the Company, duly executed by the registered holder or his duly authorized at-
torney and, in case such surrender shall be made during the period starting
after the close of business on the Regular Record Date immediate preceding any
Interest Payment Date through the close of business on such Interest Payment
Date (unless this Note or the portion thereof being converted is subject to
redemption on a redemption date in that period), also accompanied by payment
in funds acceptable to the Company of an amount equal to the interest other-
wise payable on such Interest Payment Date on the principal amount of this
Note then being converted. Subject to the aforesaid requirement for a payment
in the event of conversion after the close of business
A-7
on a Regular Record Date immediately preceding an Interest Payment Date, no
payment or adjustment shall be mae on conversion for interest accrued hereon or
for dividends on Common Stock delivered on conversion. The right to convert
this Note is subject to the provisions of the Indenture relating to conversion
rights in the case of certain consolidations, mergers, or sales or transfers of
substantially all the Company's assets.
The Company shall not issue fractional shares or scrip representing fractions
of shares of Common Stock upon any such conversion, but shall make an adjust-
ment therefor in cash on the basis of the then current market value of such
fractional interest as provided in the Indenture.
The Company will furnish to any holder upon written request and without
charge a copy of the Indenture. Requests may be made to: General Counsel, Rohr,
Inc., 850 Lagoon Drive, Chula Vista, California 91910.
A-8
FORM OF CONVERSION NOTICE
To: ROHR, INC.
The undersigned registered owner of the Convertible Subordinated Note hereby
irrevocably exercises the option to convert this Convertible Subordinated
Note, or portion hereof (which is $1,000 or an integral multiple thereof) be-
low designated, into shares of Common Stock of Rohr, Inc. in accordance with
the terms of the Indenture referred to in this Convertible Subordinated Note,
and directs that the shares issuable and deliverable upon the conversion, to-
gether with any check in payment for fractional shares and Convertible Subor-
dinated Notes representing any unconverted principal amount hereof, be issued
and delivered to the registered holder hereof unless a different name has been
indicated below. If shares or any portion of this Convertible Subordinated
Note not converted are to be issued in the name of a person other than the un-
dersigned, the undersigned will pay all transfer taxes payable with respect
thereto. Any amount required to be paid by the undersigned on account of in-
terest and taxes accompanies this Convertible Subordinated Note.
Dated: ____________________________________________
____________________________________________
Signature(s)
Principal amount to be converted (if less
Fill in for registration of than all):
shares if to be delivered, $ ,000
and Notes if to be issued,
other than to and in the name
of the registered holder
(Please Print):
____________________________________________
Social Security or other Taxpayer
Identification Number
______________________________
(Name)
______________________________
(Street Address) Signature Guarantee:
______________________________ ____________________________________________
(City, State and zip code)
______________________________
Social Security or other Tax-
payer Identification Number
A-9
ASSIGNMENT FORM
If you the holder want to asssign this Convertible Subordinated Note, fill
in the form below and have your signature guaranteed:
I or we assign and transfer this Convertible Subordinated Note to ____ _____.
(Insert assignee's social security or tax ID number) ______ _______ ______.
(Print or type assignee's name, address and zip code) and irrevocably appoint
_____ agent to transfer this Convertible Subordinated Note on the books of the
Company. The agent may substitute another to act for him.
Date: ________________________
Your signature: _______________________________________________________________
(Sign exactly as your name appears on the other side of this
Convertible Subordinated Note)
Signature Guarantee: __________________________________________________________
A-10
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have this Convertible Subordinated Note purchased by the Com-
pany pursuant to Sections 4.05 or 4.08 of the Indenture, check the Box: [_]
If you wish to have a portion of this Convertible Subordinated Note pur-
chased by the Company pursuant to Section 4.05 of the Indenture, state the
amount (in multiples of $1,000):
$_____________
Date: __________
Your signature: _______________________________________________________________
(Sign exactly as your name appears on the other side of this
Convertible Subordinated Note)
Signature Guarantee: __________________________________________________________
A-11