EXHIBIT 4.1
EXECUTION COPY
PRG-SCHULTZ INTERNATIONAL, INC.
10% Senior Convertible Notes
due 2011
---------------------------------------------------------
INDENTURE
Dated as of March 17, 2006
---------------------------------------------------------
U.S. BANK NATIONAL ASSOCIATION,
TRUSTEE
---------------------------------------------------------
CROSS REFERENCE TABLE*
TIA Section ............................................... Indenture Section
310(a)(1).................................................. 7.09
(a)(2)..................................................... 7.09
(a)(3)..................................................... N.A.
(a)(4)..................................................... N.A.
(b)........................................................ 7.08; 7.10
(c)........................................................ N.A.
311(a)..................................................... 7.13
(b)........................................................ 7.13
(c)........................................................ N.A.
312(a)..................................................... 2.05
(b)........................................................ 11.03
(c)........................................................ 11.03
313(a)..................................................... 7.14
(b)(1)..................................................... N.A.
(b)(2)..................................................... 7.14
(c)........................................................ 11.02
(d)........................................................ 7.14
314(a)..................................................... 4.02; 4.03; 11.02
(b)........................................................ N.A.
(c)(1)..................................................... 11.04
(c)(2)..................................................... 11.04
(c)(3)..................................................... N.A.
(d)........................................................ N.A.
(e)........................................................ 11.05
(f)........................................................ N.A.
315(a)..................................................... 7.01
(b)........................................................ 7.15; 11.02
(c)........................................................ 7.01
(d)........................................................ 7.01
(e)........................................................ 6.12
316(a) (last sentence)..................................... 2.08
(a)(1)(A).................................................. 6.05
(a)(1)(B).................................................. 6.04
(a)(2)..................................................... N.A.
(b)........................................................ 6.07
317(a)(1).................................................. 6.08
(a)(2)..................................................... 6.09
(b)........................................................ 2.04
318(a)..................................................... 11.01
N.A. means Not Applicable
- ---------------------------
* Note: This Cross Reference Table shall not, for any purpose be deemed to be
part of the Indenture.
TABLE OF CONTENTS
Page
ARTICLE 1 DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION.................................................1
Section 1.01 Definitions...............................................................................1
Section 1.02 Other Definitions........................................................................10
Section 1.03 Incorporation by Reference of Trust Indenture Act........................................11
Section 1.04 Rules of Construction....................................................................12
Section 1.05 Acts of Holders..........................................................................12
ARTICLE 2 THE NOTES..............................................................................................13
Section 2.01 Title, Form and Dating...................................................................13
Section 2.02 Execution and Authentication.............................................................15
Section 2.03 Registrar and Paying Agent...............................................................15
Section 2.04 Paying Agent to Hold Money and Notes in Trust............................................16
Section 2.05 Noteholder Lists.........................................................................16
Section 2.06 Transfer and Exchange....................................................................16
Section 2.07 Replacement Notes........................................................................17
Section 2.08 Outstanding Notes; Determinations of Holders' Action.....................................18
Section 2.09 Temporary Notes..........................................................................18
Section 2.10 Cancellation.............................................................................19
Section 2.11 Persons Deemed Owners....................................................................19
Section 2.12 Global Notes.............................................................................19
Section 2.13 CUSIP Numbers............................................................................22
Section 2.14 Defaulted Interest.......................................................................23
Section 2.15 Designation..............................................................................23
ARTICLE 3 REDEMPTION AND PURCHASES...............................................................................23
Section 3.01 Optional Redemption......................................................................23
Section 3.02 Notice of Trustee........................................................................24
Section 3.03 Selection of Notes to be Redeemed........................................................24
Section 3.04 Notice of Redemption.....................................................................24
Section 3.05 Effect of Notice of Redemption...........................................................25
Section 3.06 Deposit of Redemption Price..............................................................25
Section 3.07 Notes Redeemed in Part...................................................................25
Section 3.08 Repurchase of Notes at Option of the Holder upon Change in Control.......................26
Section 3.09 Effect of Change in Control Repurchase Notice............................................29
Section 3.10 Deposit of Change in Control Repurchase Price............................................30
Section 3.11 Notes Purchased in Part..................................................................30
Section 3.12 Covenant to Comply with Securities Laws..................................................31
Section 3.13 Repayment to the Company.................................................................31
i
ARTICLE 4 COVENANTS..............................................................................................31
Section 4.01 Payment of Principal, Premium, Interest on the Notes.....................................31
Section 4.02 SEC and Other Reports....................................................................32
Section 4.03 Compliance Certificate...................................................................32
Section 4.04 Further Instruments and Acts.............................................................32
Section 4.05 Maintenance of Office or Agency..........................................................32
Section 4.06 Taxes....................................................................................33
ARTICLE 5 SUCCESSOR CORPORATION..................................................................................33
Section 5.01 When Company May Merge or Transfer Assets................................................33
ARTICLE 6 DEFAULTS AND REMEDIES..................................................................................34
Section 6.01 Events of Default........................................................................34
Section 6.02 Acceleration.............................................................................36
Section 6.03 Other Remedies...........................................................................36
Section 6.04 Waiver of Past Defaults..................................................................36
Section 6.05 Control by Majority......................................................................37
Section 6.06 Limitation on Suits......................................................................37
Section 6.07 Rights of Holders to Receive Payment.....................................................37
Section 6.08 Collection Suit by Trustee...............................................................38
Section 6.09 Trustee May File Proofs of Claim.........................................................38
Section 6.10 Priorities...............................................................................38
Section 6.11 Distributions to Senior Secured Creditors Following Substantive
Consolidation or Other Similar Remedies.................................................39
Section 6.12 Undertaking for Costs....................................................................39
Section 6.13 Waiver of Stay, Extension or Usury Laws..................................................39
ARTICLE 7 TRUSTEE................................................................................................40
Section 7.01 Duties and Responsibilities of the Trustee; During Default; Prior to
Default.................................................................................40
Section 7.02 Certain Rights of the Trustee............................................................41
Section 7.03 Trustee Not Responsible for Recitals, Disposition of Notes or
Application of Proceeds Thereof.........................................................43
Section 7.04 Trustee and Agents May Hold Notes; Collections, etc......................................43
Section 7.05 Moneys Held by Trustee...................................................................43
Section 7.06 Compensation and Indemnification of Trustee and Its Prior Claim..........................43
Section 7.07 Right of Trustee to Rely on Officers' Certificate, etc...................................44
Section 7.08 Conflicting Interests....................................................................44
Section 7.09 Persons Eligible for Appointment as Trustee..............................................44
Section 7.10 Resignation and Removal; Appointment of Successor Trustee................................44
Section 7.11 Acceptance of Appointment by Successor Trustee...........................................45
Section 7.12 Merger, Conversion, Consolidation or Succession to Business of Trustee...................46
Section 7.13 Preferential Collection of Claims Against the Company....................................46
Section 7.14 Reports by the Trustee...................................................................46
Section 7.15 Trustee to Give Notice of Default, But May Withhold in Certain
Circumstances...........................................................................47
ARTICLE 8 DISCHARGE OF INDENTURE.................................................................................47
Section 8.01 Discharge of Liability on Notes..........................................................47
Section 8.02 Repayment of the Company.................................................................47
ARTICLE 9 AMENDMENTS.............................................................................................48
Section 9.01 Without Consent of Holders...............................................................48
Section 9.02 With Consent of Holders..................................................................48
Section 9.03 Compliance with Trust Indenture Act......................................................49
Section 9.04 Revocation and Effect of Consents, Waivers and Actions...................................49
Section 9.05 Notation on or Exchange of Notes.........................................................49
Section 9.06 Trustee to Sign Supplemental Indentures..................................................49
Section 9.07 Effect of Supplemental Indentures........................................................50
ARTICLE 10 CONVERSION............................................................................................50
Section 10.01 Conversion Rights and Initial Price......................................................50
Section 10.02 Exercise of Conversion Right.............................................................50
Section 10.03 Fractions of Shares......................................................................51
Section 10.04 Adjustment of Conversion Price...........................................................51
Section 10.05 Notice of Adjustments of Conversion Price................................................60
Section 10.06 Notice Prior to Certain Actions..........................................................60
Section 10.07 Company to Reserve Series B Preferred Stock and Common Stock.............................61
Section 10.08 Taxes on Conversions.....................................................................62
Section 10.09 Covenant as to Series B Preferred Stock..................................................62
Section 10.10 Cancellation of Converted Notes..........................................................63
Section 10.11 Effect of Reclassification, Consolidation, Merger or Sale................................63
Section 10.12 Adjustment for Other Distributions.......................................................64
Section 10.13 Responsibility of Trustee for Conversion Provisions......................................65
ARTICLE 11 MISCELLANEOUS.........................................................................................65
Section 11.01 Trust Indenture Act Controls.............................................................65
Section 11.02 Notices..................................................................................65
Section 11.03 Communication by Holders with Other Holders..............................................66
Section 11.04 Certificate and Opinion as to Conditions Precedent.......................................66
Section 11.05 Statements Required in Certificate or Opinion............................................67
Section 11.06 Withholding..............................................................................67
Section 11.07 Separability Clause......................................................................67
Section 11.08 Rules by Trustee, Paying Agent and Registrar.............................................67
Section 11.09 Legal Holidays...........................................................................67
Section 11.10 Governing Law............................................................................68
Section 11.11 No Recourse Against Others...............................................................68
Section 11.12 Successors...............................................................................68
Section 11.13 Multiple Originals.......................................................................68
EXHIBITS
Exhibit A-1 Form of Face of Global Note
Exhibit A-2 Form of Certificated Note
Exhibit B-1 Option of Holder to Elect Purchase
INDENTURE dated as of March 17, 2006 between PRG-SCHULTZ INTERNATIONAL,
INC., a corporation duly organized and existing under the laws of the State of
Georgia, having its principal office at 600 Galleria Parkway, STE 100, Atlanta,
GA 30339-5949 (the "COMPANY") and U.S. Bank National Association, as trustee
hereunder (the "TRUSTEE").
RECITALS OF THE COMPANY
The Company has duly authorized the creation of an issue of its 10% Senior
Convertible Notes due 2011 (each a "NOTE" and collectively, the "NOTES") of
substantially the tenor and amount hereinafter set forth, and to provide
therefor the Company has duly authorized the execution and delivery of this
Indenture.
All things necessary to make the Notes, when the Notes are executed by the
Company and authenticated and delivered hereunder, the valid obligations of the
Company, and to make this Indenture a valid agreement of the Company, in
accordance with their and its terms, have been done. Further, all things
necessary to: (i) duly authorize the issuance of Series B Preferred Stock of the
Company upon the conversion of the Note and (ii) duly reserve for issuance of
the number of shares of Series B Preferred Stock have been done. In addition,
the Company anticipates that on or before the occurrence of the New Conversion
Rights Date, all things necessary to duly authorize and duly reserve the Common
Stock issuable upon such conversion will have been done.
This Indenture is subject to, and shall be governed by, the provisions of
the Trust Indenture Act of 1939, as amended, that are required to be a part of
and to govern indentures qualified under the Trust Indenture Act of 1939, as
amended.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Notes by
the Holders thereof, it is mutually covenanted and agreed, for the equal and
proportionate benefit of all Holders of the Notes, as follows:
ARTICLE 1
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 1.01 Definitions. For all purposes of this Indenture, except as
otherwise expressly provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;
(2) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with GAAP; and
1
(3) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
"ADDITIONAL NOTES" means additional Notes (other than the Initial Notes)
issued under the Indenture in accordance with Sections 2.02, 2.14 and 4.01
hereof, as part of the same series as the Initial Notes.
"AFFILIATE" of any specified person means any other person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified person. For purposes of this definition, "control"
when used with respect to any specified person means the power to direct or
cause the direction of the management and policies of such person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"APPLICABLE PROCEDURES" means, with respect to any transfer or transaction
involving a Global Note or any beneficial interest therein, the rules and
procedures of the Depositary for such Note, in each case to the extent
applicable to such transaction and as in effect from time to time.
"B CONVERSION DATE" means August 15, 2006.
"BOARD OF DIRECTORS" means either the board of directors of the Company or
any duly authorized committee of such board.
"BOARD RESOLUTION" means a resolution duly adopted by the Board of
Directors, a copy of which, certified by the Secretary or an Assistant Secretary
of the Company to be in full force and effect on the date of such certification,
shall have been delivered to the Trustee.
"BUSINESS DAY" means each day of the year other than a Saturday or a Sunday
on which banking institutions are not required or authorized to close in the
City of New York or the city in which the Corporate Trust Office is located.
"CAPITAL LEASE OBLIGATION" means, at the time any determination is to be
made, the amount of the liability in respect of a capital lease that would at
that time be required to be capitalized on a balance sheet prepared in
accordance with GAAP, and the Stated Maturity thereof shall be the date of the
last payment of rent or any other amount due under such lease prior to the first
date upon which such lease may be prepaid by the lessee without payment of a
penalty.
"CAPITAL STOCK" of any corporation means any and all shares, interests,
rights to purchase, warrants, options, participations or other equivalents of or
interests in (however designated) stock issued by that corporation.
"CASH EQUIVALENTS" means:
(1) United States dollars;
(2) securities issued or directly and fully guaranteed or insured by
the United States government or any agency or instrumentality of the United
States government (provided that the full faith and credit of the United
States is pledged in support of those securities) having maturities of not
more than 360 days from the date of acquisition;
(3) certificates of deposit and eurodollar time deposits with
maturities of six months or less from the date of acquisition, bankers'
acceptances with maturities not exceeding six months and overnight bank
deposits, in each case, with any lender party to the Credit Agreement or
with any domestic commercial bank having capital and surplus in excess of
$500.0 million and a Thomson Bank Watch Rating of "B" or better at the time
of acquisition;
(4) repurchase obligations for underlying securities of the types
described in clauses (2) and (3) above entered into with any financial
institution meeting the qualifications specified in clause (3) above;
(5) commercial paper having at the time of acquisition one of the two
highest ratings obtainable from Moody's Investors Service, Inc. or Standard
& Poor's Rating Service and, in each case, maturing within nine months
after the date of acquisition;
(6) securities issued by any state of the United States of America or
any political subdivision of any such state or any public instrumentality
thereof maturing within one year from the date of acquisition thereof and
at the time of acquisition thereof, having one of the two highest ratings
obtainable from either Standard & Poor's Rating Services or Moody's
Investors Service, Inc.;
(7) money market funds at least 95% of the assets of which constitute
Cash Equivalents of the kinds described in clauses (1) through (6) of this
definition; and
(8) local currencies held by the Company or any of its Restricted
Subsidiaries, from time to time in the ordinary course of business and
consistent with past practice.
"COMMON STOCK" means the Common Stock, without par value, of the Company
authorized at the date of this instrument as originally executed or any stock of
any class of Capital Stock of a successor to the Company which has no preference
in respect of dividends or of amounts payable in the event of any voluntary or
involuntary liquidation, dissolution or winding up of such successor to the
Company.
"COMPANY" means the party named as the "Company" in the first paragraph of
this Indenture until a successor replaces it pursuant to the applicable
provisions of this Indenture, and, thereafter, "Company" shall mean such
successor. The foregoing sentence shall likewise apply to any subsequent such
successor or successors.
"COMPANY REQUEST" or "COMPANY ORDER" means a written request or order
signed in the name of the Company by any two Officers.
"CONVERTIBLE NOTES" means the Company's 10.0% Senior Convertible Notes due
2011.
"CORPORATE TRUST OFFICE" means the principal office of the Trustee at which
at any time its corporate trust business shall be administered, which office at
the date hereof is located at 360 Interstate North Parkway SE, Suite 500,
Atlanta, GA 30339, Attention: Paul L. Henderson, or such other address as the
Trustee may designate from time to time by notice to the Holders and the
Company, or the principal corporate trust office of any successor Trustee (or
such other address as a successor Trustee may designate from time to time by
notice to the Holders and the Company).
"CREDIT AGREEMENT" means the Financing Agreement, dated as of the Issue
Date, as amended, restated, supplemented or otherwise modified from time to
time, by and among PRG-Schultz USA, Inc., as borrower, the Company and certain
Subsidiaries, as guarantors, Ableco Finance LLC, as Collateral Agent, and The
CIT Group/Business Credit, Inc., as Administrative Agent of the lenders
thereunder.
"CREDIT FACILITIES" means, one or more debt facilities (including, without
limitation, the Credit Agreement), indentures or commercial paper facilities, in
each case, with banks or other institutional lenders or a trustee providing for
revolving credit loans, term loans, receivables financing (including through the
sale of receivables to such lenders or to special purpose entities formed to
borrow from such lenders against such receivables) or letters of credit or
issuances of notes, in each case, as amended, restated, modified, renewed,
refunded, replaced (whether upon or after termination or otherwise), substituted
or refinanced (including by means of sales of debt securities to institutional
investors) in whole or in part from time to time.
"DEFAULT" means any event which is, or after notice or passage of time or
both would be, an Event of Default.
"DISQUALIFIED STOCK" means any Capital Stock that, by its terms (or by the
terms of any security into which it is convertible, or for which it is
exchangeable, in each case, at the option of the holder of the Capital Stock),
or upon the happening of any event, matures or is mandatorily redeemable,
pursuant to a sinking fund obligation or otherwise, or redeemable at the option
of the holder of the Capital Stock, in whole or in part, on or prior to the date
that is 91 days after the date on which the Notes mature. Notwithstanding the
preceding sentence, any Capital Stock that would constitute Disqualified Stock
solely because the holders of the Capital Stock have the right to require the
Company to repurchase such Capital Stock upon the occurrence of a change of
control or an asset sale will not constitute Disqualified Stock if the terms of
such Capital Stock provide that the Company may not repurchase or redeem any
such Capital Stock pursuant to such provisions unless such repurchase or
redemption complies with Section 4.08 hereof. The amount of Disqualified Stock
deemed to be outstanding at any time for purposes of this Indenture will be the
maximum amount that the Company and its Restricted Subsidiaries may become
obligated to pay upon the maturity of, or pursuant to any mandatory redemption
provisions of, such Disqualified Stock, exclusive of accrued dividends.
"DOLLAR" or "U.S.$" means a dollar or other equivalent unit in such coin or
currency of the United States as at the time shall be legal tender for the
payment of public and private debts.
"EQUITY INTERESTS" means Capital Stock and all warrants, options or other
rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"EXISTING INDEBTEDNESS" means Indebtedness of the Company and its
Restricted Subsidiaries in existence on the Issue Date.
"EXISTING NOTES" means the Company's existing 4 3/4% Convertible
Subordinated Notes due 2006.
"FAIR MARKET VALUE" means the value that would be paid by a willing buyer
to an unaffiliated willing seller in a transaction not involving distress or
necessity of either party, determined in good faith by the Board of Directors of
the Company (unless otherwise provided in this Indenture).
"GAAP" means United States generally accepted accounting principles as in
effect from time to time.
"GLOBAL NOTES" means Notes that are in the form of the Notes attached
hereto as Exhibit A-1.
"GUARANTEE" means a guarantee (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), direct or
indirect, contingent or otherwise, in any manner (including, without limitation,
letters of credit and reimbursement agreements in respect thereof), of all or
any part of any Indebtedness.
"HEDGING OBLIGATIONS" means, with respect to any specified Person, the
obligations of such Person under:
(1) interest rate swap agreements (whether from fixed to floating or
from floating to fixed), interest rate cap agreements, interest rate collar
agreements and other agreements or arrangements designated for the purpose
of fixing, hedging or swapping interest rate risk;
(2) other agreements or arrangements designed to manage interest rates
or interest rate risk; and
(3) other agreements or arrangements designed to protect such Person
against fluctuations in currency exchange rates or commodity prices.
"HOLDER" or "Noteholder" means a person in whose name a Note is registered
on the Registrar's books.
"INDEBTEDNESS" means, with respect to any Person, without duplication:
(1) all indebtedness, obligations and other liabilities, contingent or
otherwise, of such Person for borrowed money (including overdrafts) or for
the deferred purchase price of property or services, if and to the extent
such obligations, liabilities or indebtedness would appear as a liability
of such person on a balance sheet prepared in accordance with GAAP,
excluding any trade payables and other accrued current liabilities incurred
in the ordinary course of business, but including, without limitation, all
obligations, contingent or otherwise, of such Person in connection with any
letters of credit and acceptances issued under letter of credit facilities,
acceptance facilities or other similar facilities;
(2) all obligations of such Person evidenced by bonds, credit or loan
agreements, notes, debentures or other similar instruments;
(3) indebtedness of such Person created or arising under any
conditional sale or other title retention agreement with respect to
property acquired by such person (even if the rights and remedies of the
seller or lender under such agreement in the event of default are limited
to repossession or sale of such property), if and to the extent such
Obligations would appear as a liability of such Person on a balance sheet
prepared in accordance with GAAP, but excluding trade payables arising in
the ordinary course of business;
(4) all obligations and liabilities, contingent or otherwise, in
respect of Capital Lease Obligations of such Person;
(5) all Hedging Obligations of such Person;
(6) all indebtedness referred to in (but not excluded from) the
preceding clauses (1) through (5) of other persons and all dividends of
other persons, the payment of which is secured by (or for which the holder
of such indebtedness has an existing right, contingent or otherwise, to be
secured by) any Lien or with respect to property (including, without
limitation, accounts and contract rights) owned by such person, even though
such person has not assumed or become liable for the payment of such
indebtedness (the amount of such obligation being deemed to be the lesser
of the value of such property or asset or the amount of the obligation so
secured);
(7) all guarantees by such Person of indebtedness referred to in this
definition or of any other Person; and
(8) any and all refinancings, replacements, deferrals, renewals,
extensions and refundings of or amendments, modifications or supplements
to, any indebtedness, obligation or liability of the kind described in
clauses (1) through (7) above.
"INDENTURE" means this Indenture, as amended or supplemented from time to
time in accordance with the terms hereof, including the provisions of the TIA
that are deemed to be a part hereof.
"INITIAL NOTES" means the first $59,774,400 aggregate principal amount of
Notes issued under this Indenture on the date hereof.
"INSTITUTIONAL ACCREDITED INVESTOR" shall mean an institution that is an
"accredited investor" as that term is defined in Rule 501(a)(1), (2), (3) or (7)
of Regulation D under the Securities Act.
"INTEREST PAYMENT DATE" means the Stated Maturity of an installment of
interest on the Notes.
"INTEREST RATE" means 10% per annum.
"ISSUE DATE" of any Note means the date on which the Note was originally
issued or deemed issued as set forth on the face of the Note.
"LIEN" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset
given to secure Indebtedness, whether or not filed, recorded or otherwise
perfected under applicable law (including any conditional sale or other title
retention agreement, any lease in the nature thereof, any option or other
agreement to sell or give a security interest in and any filing of or agreement
to give any financing statement under the Uniform Commercial Code (or equivalent
statutes) of any jurisdiction with respect to any such lien, security interest).
"NEW CONVERSION RIGHTS DATE" means the first date on which both (1) the
Registration Statement has been declared effective and (2) the Company's common
shareholders have approved an increase in the aggregate authorized shares of the
Company's common stock in an amount of at least 140 million shares (subject to
adjustment for any stock split, dividend, reclassification or other change in
the number of outstanding shares of the Company's common stock).
"NON-CONVERTIBLE NOTES" means the Company's 11.0% Senior Notes due 2011.
"NON-RECOURSE DEBT" means Indebtedness:
(1) as to which neither the Company nor any of its Restricted
Subsidiaries (a) provides credit support of any kind (including any
undertaking, agreement or instrument that would constitute Indebtedness),
(b) is directly or indirectly liable as a guarantor or otherwise, or (c)
constitutes the lender;
(2) no default with respect to which (including any rights that the
holders of the Indebtedness may have to take enforcement action against an
Unrestricted Subsidiary) would permit upon notice, lapse of time or both
any holder of any other Indebtedness of the Company or any of its
Restricted Subsidiaries to declare a default on such other Indebtedness or
cause the payment of the Indebtedness to be accelerated or payable prior to
its Stated Maturity; and
(3) as to which (a) the explicit terms provide that there is no
recourse against any assets of the Company or any of its Restricted
Subsidiaries or (b) the lenders have been notified in writing that they
will not have any recourse to the stock or assets of the Company or any of
its Restricted Subsidiaries.
"NOTES" has the meaning ascribed to it in the first paragraph under the
caption "Recitals of the Company". The Initial Notes and any Additional Notes
subsequently issued under this Indenture will be treated as a single class for
all purposes under this Indenture, including, without limitation, waivers,
amendments, redemptions and offers to purchase, and, unless the context
otherwise requires, all references to Notes shall include the Initial Notes and
any Additional Notes..
"OFFICER" means the Chairman of the Board, the Vice Chairman, the Chief
Executive Officer, the President, any Executive Vice President, any Senior Vice
President, any Vice President, the Treasurer or the Secretary or any Assistant
Treasurer or Assistant Secretary of the Company.
"OFFICERS' CERTIFICATE" means a written certificate containing the
information specified in Sections 11.04 and 11.05, signed in the name of the
Company by any two Officers, and delivered to the Trustee. An Officers'
Certificate given pursuant to Section 4.03 shall be signed by the principal
executive Officer, the principal financial Officer or the principal accounting
Officer of the Company but need not contain the information specified in
Sections 11.04 and 11.05.
"OPINION OF COUNSEL" means a written opinion containing the information
specified in Sections 11.04 and 11.05, from legal counsel who is reasonably
acceptable to the Trustee. The counsel may be an employee of, or counsel to, the
Company or the Trustee.
"PERSON" or "PERSON" means any individual, corporation, limited liability
company, partnership, joint venture, association, joint-stock company, trust,
unincorporated organization, or government or any agency or political
subdivision thereof, including any subdivision or ongoing business of any such
entity or substantially all of the assets of any such entity, subdivision or
business.
"PRINCIPAL" of a Note means the principal amount due on the Stated Maturity
of the principal payment of such Note as set forth on the face of the Note.
"REDEMPTION DATE" or "REDEMPTION DATE" means the date specified for
redemption of the Notes in accordance with the terms of the Notes and this
Indenture.
"REDEMPTION PRICE" or "REDEMPTION PRICE" shall have the meaning set forth
in paragraph 5 on the reverse side of the Notes.
"REGISTRATION RIGHTS AGREEMENT" means that certain Registration Rights
Agreement, dated as of the Issue Date, by and among the Company and certain
holders listed in Exhibit A thereto.
"REGISTRATION STATEMENT" means the registration statement required to be
filed pursuant to the Registration Rights Agreement.
"REGULAR RECORD DATE" means, with respect to the interest payable on any
Interest Payment Date, the close of business on March 1 or September 1 (whether
or not a Business Day), as the case may be, next preceding such Interest Payment
Date.
"RESPONSIBLE OFFICER" means, when used with respect to the Trustee, any
officer within the corporate trust department of the Trustee, including any vice
president, assistant vice president, assistant secretary, assistant treasurer,
trust officer or any other officer of the Trustee who customarily performs
functions similar to those performed by the Persons who at the time shall be
such officers, respectively, or to whom any corporate trust matter is referred
because of such person's knowledge of and familiarity with the particular
subject.
"RIGHTS PLAN" means the Shareholder Protection Rights Agreement between the
Company and First Union National Bank, as rights agent, dated as of August 9,
2000, as the same may be amended from time to time.
"SEC" means the Securities and Exchange Commission.
"SECURITIES ACT" means the United States Securities Act of 1933 (or any
successor statute), as amended from time to time.
"SERIES A PREFERRED STOCK" means the Company's Senior Series A Convertible
Participating Preferred Stock.
"SERIES B PREFERRED STOCK" means the Company's Senior Series B Convertible
Participating Preferred Stock.
"SIGNIFICANT SUBSIDIARY" means a Subsidiary of the Company, including its
Subsidiaries, which meets any of the following conditions:
(1) the Company's and its other Subsidiaries' investments in and
advances to the Subsidiary exceed 10 percent of the total assets of the
Company and its Subsidiaries consolidated as of the end of any two of the
three most recently completed fiscal years; or
(2) the Company's and its other Subsidiaries' proportionate share of
the total assets of the Subsidiary exceeds 10 percent of the total assets
of the Company and its Subsidiaries consolidated as of the end of any two
of the three most recently completed fiscal years; or
(3) the Company's and its other Subsidiaries' equity in the income
from continuing operations before income taxes, extraordinary items and
cumulative effect of a change in accounting principles of the Subsidiary
exceeds 10 percent of such income of the Company and its Subsidiaries
consolidated as of the end of any two of the three most recently completed
fiscal years.
"STATED MATURITY", means, with respect to any installment of interest or
principal on any series of Indebtedness, the date on which the payment of
interest or principal was scheduled to be paid in the documentation governing
such Indebtedness as of the date of this Indenture, and will not include any
contingent obligations to repay, redeem or repurchase any such interest or
principal prior to the date originally scheduled for the payment thereof.
"SUBSIDIARY" means (i) a corporation, a majority of whose Capital Stock
with voting power, under ordinary circumstances, to elect directors is, at the
date of determination, directly or indirectly owned by the Company, by one or
more Subsidiaries of the Company or by the Company and one or more Subsidiaries
of the Company, (ii) a partnership in which the Company or a Subsidiary of the
Company holds a majority interest in the equity capital or profits of such
partnership, or (iii) any other person (other than a corporation) in which the
Company, a Subsidiary of the Company or the Company and one or more Subsidiaries
of the Company, directly or indirectly, at the date of determination, has (x) at
least a majority ownership interest or (y) the power to elect or direct the
election of a majority of the directors or other governing body of such person.
"TIA" means the Trust Indenture Act of 1939 as in effect on the date of
this Indenture, provided, however, that in the event the TIA is amended after
such date, TIA means, to the extent required by any such amendment, the TIA as
so amended.
"TOTAL ASSETS" means the total consolidated assets of the Company and its
Restricted Subsidiaries, as shown on the most recent internal balance sheet of
the Company prepared on a consolidated basis (excluding Unrestricted
Subsidiaries of the Company) in accordance with GAAP.
"TRADING DAY" means a day during which trading in the Common Stock
generally occurs on the New York Stock Exchange or, if the Common Stock is not
listed on the New York Stock Exchange, on the principal other national or
regional securities exchange on which the Common Stock is then listed or, if the
Common Stock is not listed on a national or regional securities exchange, on the
National Association of Notes Dealers Automated Quotation System or, if the
Common Stock is not quoted on the National Association of Securities Dealers
Automated Quotation System, on the principal other market on which the Common
Stock is then traded.
"TRUSTEE" means the party named as the "Trustee" in the first paragraph of
this Indenture until a successor replaces it pursuant to the applicable
provisions of this Indenture and, thereafter, shall mean such successor. The
foregoing sentence shall likewise apply to any subsequent such successor or
successors.
"UNITED STATES" means the United States of America (including the States
and the District of Columbia), its territories, its possessions and other areas
subject to its jurisdiction (its "possessions" including Puerto Rico, the U.S.
Virgin Islands, Guam, American Samoa, Wake Island and the Northern Mariana
Islands).
Section 1.02 Other Definitions.
Defined in
Term Section
- --------------------------------------------------------------------------------
"ACT"....................................................... 1.05(a)
"AGENT MEMBERS"............................................. 2.12(f)
"AUTHENTICATION ORDER"...................................... 2.02
"BANKRUPTCY LAW"............................................ 6.01
"CHANGE IN CONTROL"......................................... 3.09(b)
"CHANGE IN CONTROL REPURCHASE DATE"......................... 3.09(a)
"CHANGE IN CONTROL REPURCHASE NOTICE"....................... 3.09(d)
"CHANGE IN CONTROL REPURCHASE PRICE"........................ 3.09(a)
"COMMISSIONS"............................................... 1.03
"CUSTODIAN"................................................. 6.01
"DEPOSITARY"................................................ 2.01(a)
"DTC"....................................................... 2.01(a)
"EVENT OF DEFAULT".......................................... 6.01
"EXCHANGE ACT".............................................. 3.09(b)(i)
"INCUR"..................................................... 4.09(a)
"INDENTURE NOTE HOLDER"..................................... 1.03
"INDENTURE TO BE QUALIFIED"................................. 1.03
"INDENTURE TRUSTEE"......................................... 1.03
"LEGAL HOLIDAY"............................................. 10.08
"LEGEND".................................................... 2.06(f)
"NOTICE OF DEFAULT"......................................... 6.01
"OBLIGOR"................................................... 1.03
"OPTIONAL REDEMPTION PRICE"................................. 3.01
"PAYING AGENT".............................................. 2.03
"PURCHASE DATE"............................................. 3.14
"PURCHASE DATE"............................................. 3.14
"REGISTRAR"................................................. 2.03
Section 1.03 Incorporation by Reference of Trust Indenture Act. Whenever
this Indenture refers to a provision of the TIA, the provision is incorporated
by reference in and made a part of this Indenture. The following TIA terms used
in this Indenture have the following meanings:
"COMMISSION" means the SEC.
"INDENTURE NOTES" means the Notes.
"INDENTURE NOTE HOLDER" means a Noteholder.
"INDENTURE TO BE QUALIFIED" means this Indenture.
"INDENTURE TRUSTEE" or "INSTITUTIONAL TRUSTEE" means the Trustee.
"OBLIGOR" on the indenture Notes means the Company.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule have the
meanings assigned to them by such definitions.
Section 1.04 Rules of Construction. Unless the context otherwise requires:
(a) a term has the meaning assigned to it;
(b) an accounting term not otherwise defined has the meaning assigned
to it in accordance with GAAP as in effect as of the date hereof;
(c) "or" is not exclusive;
(d) "including" means including, without limitation; and
(e) words in the singular include the plural, and words in the plural
include the singular.
Section 1.05 Acts of Holders. (a) Any request, demand, authorization,
direction, notice, consent, waiver or other action provided by this Indenture to
be given or taken by Holders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Holders in person or
by their agent duly appointed in writing; and, except as herein otherwise
expressly provided, such action shall become effective when such instrument or
instruments are delivered to the Trustee and, where it is hereby expressly
required, to the Company. Such instrument or instruments (and the action
embodied therein and evidenced thereby) are herein sometimes referred to as the
"ACT" of Holders signing such instrument or instruments. Proof of execution of
any such instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Indenture and conclusive in favor of the
Trustee and the Company, if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to such officer the execution thereof.
Where such execution is by a signer acting in a capacity other than such
signer's individual capacity, such certificate or affidavit shall also
constitute sufficient proof of such signer's authority. The fact and date of the
execution of any such instrument or writing, or the authority of the Person
executing the same, may also be proved in any other manner which the Trustee
deems sufficient.
The ownership of Notes shall be proved by the register for the Notes or by
a certificate of the Registrar.
Any request, demand, authorization, direction, notice, consent, waiver or
other Act of the Holder of any Note shall bind every future Holder of the same
Note and the holder of every Note issued upon the registration of transfer
thereof or in exchange therefor or in lieu thereof in respect of anything done,
omitted or suffered to be done by the Trustee or the Company in reliance
thereon, whether or not notation of such action is made upon such Note.
If the Company shall solicit from the Holders any request, demand,
authorization, direction, notice, consent, waiver or other Act, the Company may,
at its option, by or pursuant to a resolution of the Board of Directors, fix in
advance a record date for the determination of Holders entitled to give such
request, demand, authorization, direction, notice, consent, waiver or other Act,
but the Company shall have no obligation to do so. If such a record date is
fixed, such request, demand, authorization, direction, notice, consent, waiver
or other Act may be given before or after such record date, but only the Holders
of record at the close of business on such record date shall be deemed to be
Holders for purposes of determining whether Holders of the requisite proportion
of outstanding Notes have authorized or agreed or consented to such request,
demand, authorization, direction, notice, consent, waiver or other Act, and for
that purpose the outstanding Notes shall be computed as of such record date;
provided that no such authorization, agreement or consent by the Holders on such
record date shall be deemed effective unless it shall become effective pursuant
to the provisions of this Indenture not later than six months after the record
date.
ARTICLE 2
THE NOTES
Section 2.01 Title, Form and Dating. The aggregate Principal Amount of
Notes that may be authenticated and delivered under this Indenture is initially
limited to $59,774,400, plus an additional aggregate amount of any Additional
Notes paid as interest on the Notes in accordance with the terms of this
Indenture, except for Notes authenticated and delivered upon registration or
transfer of, or in exchange for, or in lieu of, other Notes pursuant to Section
2.06, 2.07, 2.09, or 9.05. Other than as set forth in the preceding sentence and
Section 2.02, the Company shall not issue any Notes under the Indenture.
The Notes and the Trustee's certificate of authentication to be borne by
such Notes shall be substantially in the form annexed hereto as Exhibits A-1 and
A-2, which are incorporated in and made apart of this Indenture. The terms and
provisions contained in the form of Note 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 and delivery of this Indenture,
expressly agree to such terms and provisions and to be bound thereby.
Any of the Notes may have such letters, numbers or other marks of
identification and such notations, legends and endorsements as the officers
executing the same may approve (execution thereof to be conclusive evidence of
such approval) and as are not inconsistent with the provisions of this
Indenture, or as may be required to comply with any law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any
securities exchange or automated quotation system on which the Notes may be
listed or designated for issuance, or to conform to usage.
(a) Global Notes and Certificated Notes. Notes offered and exchanged
for Existing Notes on the Issue Date shall be issued, initially in the form of a
Global Note in registered form, which shall be deposited with the Trustee at its
Corporate Trust Office, as custodian for, and registered in the name of, The
Depository Trust Company ("DTC") or the nominee thereof (such depositary, or any
successor thereto, and any such nominee being hereinafter referred to as the
"DEPOSITARY"), duly executed by the Company and authenticated by the Trustee as
hereinafter provided. The aggregate principal amount of the Global Note may from
time to time be increased or decreased by adjustments made on the records of the
Trustee and the Depositary as hereinafter provided.
Notes issued pursuant to Section 2.12 hereof in exchange for interests in
Global Notes shall be issued in the form of Certificated Notes in registered
form, substantially in the form of Exhibit A-2 attached hereto.
(b) Global Notes in General. Each Global Note shall represent such of
the outstanding Notes as shall be specified therein and each shall provide that
it shall represent the aggregate amount of outstanding Notes from time to time
endorsed thereon and that the aggregate amount of outstanding Notes represented
thereby may from time to time be reduced or increased, as appropriate, to
reflect exchanges, redemptions and conversions.
Any adjustment of the aggregate principal amount of a Global Note to
reflect the amount of any increase or decrease in the amount of outstanding
Notes represented thereby shall be made by the Trustee in accordance with
instructions given by the Holder thereof as required by Section 2.12 hereof and
shall be made on the records of the Trustee and the Depositary.
(c) Book-Entry Provisions. This Section 2.01(c) shall apply only to
Global Notes deposited with or on behalf of the Depositary.
The Company shall execute and the Trustee shall, in accordance with this
Section 2.01(c), authenticate and deliver initially one or more Global Notes
that (a) shall be registered in the name of the Depositary, (b) shall be
delivered by the Trustee to the Depositary or pursuant to the Depositary's
instructions and (c) shall bear legends substantially to the following effect:
"UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN
THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT
HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT
NOT IN PART, TO NOMINEES OF THE DEPOSITORY TRUST COMPANY OR TO A SUCCESSOR
THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS
GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE
RESTRICTIONS SET FORTH IN ARTICLE TWO OF THE INDENTURE REFERRED TO ON THE
REVERSE HEREOF."
Section 2.02 Execution and Authentication. The Notes shall be executed on
behalf of the Company by any Officer, under its corporate seal impressed or
reproduced thereon. The signature of the Officer on the Notes may be manual or
facsimile.
Notes bearing the manual or facsimile signatures of individuals who were at
the time of the execution of the Notes the proper Officers of the Company shall
bind the Company, notwithstanding that such individuals or any of them have
ceased to hold such offices prior to the authentication and delivery of such
Notes or did not hold such offices at the date of authentication of such Notes.
No Note shall be entitled to any benefit under this Indenture or be valid
or obligatory for any purpose unless there appears on such Note a certificate of
authentication substantially in the form provided for herein duly executed by
the Trustee by manual signature of an authorized officer or other
representative, and such certificate upon any Note shall be conclusive evidence,
and the only evidence, that such Note has been duly authenticated and delivered
hereunder.
The Company may, subject to Article 4 and the terms of this Indenture and
applicable law, issue Additional Notes under this Indenture. The Trustee will,
upon receipt of a written order of the Company signed by at least one Officer
(an "AUTHENTICATION ORDER"), authenticate Additional Notes for original issue
that may be validly issued under this Indenture from time to time to represent
interest and automatically deemed interest paid pursuant to paragraph 1 of the
Notes. The aggregate principal amount of Notes outstanding at any time may not
exceed the aggregate principal amount of Notes authorized for issuance by the
Company pursuant to one or more Authentication Orders, except as provided in
Section 2.07 hereof.
The Notes shall be issued only in registered form without coupons.
Section 2.03 Registrar and Paying Agent. The Company shall maintain an
office or agency where Notes may be presented for registration of transfer or
for exchange ("REGISTRAR"), an office or agency where Notes maybe presented for
purchase or payment ("PAYING AGENT") and an office or agency where Notes may be
presented for conversion ("CONVERSION AGENT"). The Registrar shall keep a
register of the Notes and of their transfer and exchange. The Company may have
one or more co-registrars, one or more additional paying agents and one or more
additional conversion agents. The term Paying Agent includes any additional
paying agent, including any named pursuant to Section 4.05. The term Conversion
Agent includes any additional conversion agent, including any named pursuant to
Section 4.05.
The Company shall enter into an appropriate agency agreement with any
Registrar, Paying Agent, Conversion Agent or co-registrar (other than the
Trustee). The agreement shall implement the provisions of this Indenture that
relate to such agent. The Company shall notify the Trustee of the name and
address of any such agent. If the Company fails to maintain a Registrar, Paying
Agent or Conversion Agent, the Trustee shall act as such and shall be entitled
to appropriate compensation therefor pursuant to Section 7.06. The Company or
any Subsidiary or an Affiliate of either of them may act as Paying Agent,
Conversion Agent, Registrar or co-registrar.
The Company initially appoints the Trustee as Registrar, Conversion Agent
and Paying Agent in connection with the Notes.
Section 2.04 Paying Agent to Hold Money and Notes in Trust. Except as
otherwise provided herein, on or prior to each due date of payments in respect
of any Note, the Company shall deposit with the Paying Agent a sum of money (in
immediately available funds if deposited on the due date) sufficient to make
such payments when so becoming due. The Company shall require each Paying Agent
(other than the Trustee) to agree in writing that the Paying Agent shall hold in
trust for the benefit of Noteholders or the Trustee all money held by the Paying
Agent for the making of payments in respect of the Notes and shall notify the
Trustee of any default by the Company in making any such payment. At any time
during the continuance of any such default, the Paying Agent shall, upon the
written request of the Trustee, forthwith pay to the Trustee all money so held
in trust. If the Company, a Subsidiary or an Affiliate of either of them acts as
Paying Agent, it shall segregate the money held by it as Paying Agent and hold
it as a separate trust fund. The Company at any time may require a Paying Agent
to pay all money held by it to the Trustee and to account for any funds
disbursed by it. Upon doing so, the Paying Agent shall have no further liability
for the money.
Section 2.05 Noteholder Lists. The Trustee shall preserve in as current a
form as is reasonably practicable the most recent list available to it of the
names and addresses of Noteholders. If the Trustee is not the Registrar, the
Company shall cause to be furnished to the Trustee at least semi-annually, on
January 1 and July 1, a listing of Noteholders dated within 13 days of the date
on which the list is furnished and at such other times as the Trustee may
request in writing a list in such form and as of such date as the Trustee may
reasonably require of the names and addresses of Noteholders.
Section 2.06 Transfer and Exchange. (a) Subject to Section 2.12 hereof,
upon surrender for registration of transfer of any Note, together with a written
instrument of transfer satisfactory to the Registrar duly executed by the
Noteholder or such Noteholder's attorney duly authorized in writing, at the
office or agency of the Company designated as Registrar or co-registrar pursuant
to Section 2.03, the Company shall execute, and the Trustee shall authenticate
and deliver, in the name of the designated transferee or transferees, one or
more new Notes of any authorized denomination or denominations, of a like
aggregate principal amount. The Company shall not charge a service charge for
any registration of transfer or exchange, but the Company may require payment of
a sum sufficient to pay all taxes, assessments or other governmental charges
that may be imposed in connection with the transfer or exchange of the Notes
from the Noteholder requesting such transfer or exchange.
At the option of the Holder, Notes may be exchanged for other Notes of any
authorized denomination or denominations, of a like aggregate principal amount,
upon surrender of the Notes to be exchanged, together with a written instrument
of transfer satisfactory to the Registrar duly executed by the Noteholder or
such Noteholder's attorney duly authorized in writing, at such office or agency.
Whenever any Notes are so surrendered for exchange, the Company shall execute,
and the Trustee shall authenticate and deliver, the Notes which the Holder
making the exchange is entitled to receive.
The Company shall not be required to make, and the Registrar need not
register, transfers or exchanges of Notes selected for redemption (except, in
the case of Notes to be redeemed in part, the portion thereof not to be
redeemed) or any Notes in respect of which a Change in Control Repurchase Notice
(as defined in Section 3.09(d)) has been given and not withdrawn by the Holder
thereof in accordance with the terms of this Indenture (except, in the case of
Notes to be purchased in part, the portion thereof not to be purchased) or any
Notes for a period of 15 days before the mailing of a notice of redemption of
Notes to be redeemed.
(b) Notwithstanding any provision to the contrary herein, so long as a
Global Note remains outstanding and is held by or on behalf of the Depositary,
transfers of a Global Note, in whole or in part, shall be made only in
accordance with Section 2.12 and this Section 2.06(b). Transfers of a Global
Note shall be limited to transfers of such Global Note in whole, or in part, to
nominees of the Depositary or to a successor of the Depositary or such
successor's nominee.
(c) Successive registrations and registrations of transfers and
exchanges as aforesaid may be made from time to time as desired, and each such
registration shall be noted on the register for the Notes.
(d) Any Registrar appointed pursuant to Section 2.03 hereof shall
provide to the Trustee such information as the Trustee may reasonably require in
connection with the delivery by such Registrar of Notes upon transfer or
exchange of Notes.
(e) No Registrar shall be required to make registrations of transfer
or exchange of Notes during any periods designated in the text of the Notes or
in this Indenture as periods during which such registration of transfers and
exchanges need not be made.
Section 2.07 Replacement Notes. If (a) any mutilated Note is surrendered to
the Trustee, or (b) the Company and the Trustee receive evidence to their
satisfaction of the destruction, loss or theft of any Note, and there is
delivered to the Company and the Trustee such Note or indemnity as may be
required by them, in each case in their respective sole judgment, to save each
of them harmless, then, in the absence of notice to the Company or any
Responsible Officer of the Trustee that such Note has been acquired by a bona
fide purchaser, the Company shall execute and upon receipt of a Company Request
the Trustee shall authenticate and deliver, in exchange for any such mutilated
Note or in lieu of any such destroyed, lost or stolen Note, a new Note of like
tenor and principal amount, bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Note has become or is
about to become due and payable, or is about to be purchased or redeemed by the
Company pursuant to Article 3 hereof, the Company in its discretion may, instead
of issuing a new Note, pay or purchase such Note, as the case may be.
Upon the issuance of any new Notes under this Section 2.07, the Company may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (including
the fees and expenses of the Trustee) connected therewith.
Every replacement Note issued pursuant to this Section 2.07 in lieu of any
mutilated, destroyed, lost or stolen Note shall constitute an original
additional contractual obligation of the Company, whether or not the destroyed,
lost or stolen Note shall be at any time enforceable by anyone, and shall be
entitled to all benefits of this Indenture equally and proportionately with any
and all other Notes duly issued hereunder.
The provisions of this Section 2.07 are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Notes.
Section 2.08 Outstanding Notes; Determinations of Holders' Action. Notes
outstanding at any time are all the Notes authenticated by the Trustee except
for those cancelled by it or delivered to it for cancellation, those paid
pursuant to Section 2.07 and those described in this Section 2.08 as not
outstanding. A Note does not cease to be outstanding because the Company or an
Affiliate thereof holds the Note; provided, however, that in determining whether
the Holders of the requisite principal amount of the outstanding Notes have
given or concurred in any request, demand, authorization, direction, notice,
consent or waiver hereunder, Notes owned by the Company or any other obligor
upon the Notes or any Affiliate of the Company or such other obligor shall be
disregarded and deemed not to be outstanding, except that, in determining
whether the Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Notes which a
Responsible Officer of the Trustee knows to be so owned shall be so disregarded.
Subject to the foregoing, only Notes outstanding at the time of such
determination shall be considered in any such determination (including, without
limitation, determinations pursuant to Articles 6 and 9).
If a Note is replaced pursuant to Section 2.07, it ceases to be outstanding
unless the Trustee receives proof satisfactory to it that the replaced Note is
held by a bona fide purchaser.
If the Paying Agent holds, in accordance with this Indenture, on a
Redemption Date or on the Business Day following the Change in Control
Repurchase Date, or on Stated Maturity, money or securities, if permitted
hereunder, sufficient to pay Notes payable on that date, then immediately after
such Redemption Date, Change in Control Repurchase Date or Stated Maturity, as
the case may be, such Notes shall cease to be outstanding and interest on such
Notes shall cease to accrue; provided that, if such Notes are to be redeemed,
notice of such redemption has been duly given pursuant to this Indenture or
provision therefor reasonably satisfactory to the Trustee has been made.
If a Note is converted in accordance with Article 10, then from and after
the time of conversion on the conversion date, such Note shall cease to be
outstanding and interest shall cease to accrue on such Note.
Section 2.09 Temporary Notes. Pending the preparation of definitive Notes,
the Company may execute, and upon receipt of a Company Order the Trustee shall
authenticate and deliver, temporary Notes which are printed, lithographed,
typewritten, mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Notes in lieu of which they are
issued and with such appropriate insertions, omissions, substitutions and other
variations as the officers executing such Notes may determine, as conclusively
evidenced by their execution of such Notes.
If temporary Notes are issued, the Company will cause definitive Notes to
be prepared without unreasonable delay. After the preparation of definitive
Notes, the temporary Notes shall be exchangeable for definitive Notes upon
surrender of the temporary Notes at the office or agency of the Company
designated for such purpose pursuant to Section 2.03, without charge to the
Holder. Upon surrender for cancellation of any one or more temporary Notes the
Company shall execute and the Trustee shall authenticate and deliver in exchange
therefor a like principal amount of definitive Notes of authorized
denominations. Until so exchanged the temporary Notes shall in all respects be
entitled to the same benefits under this Indenture as definitive Notes.
Section 2.10 Cancellation. All Notes surrendered for payment, purchase by
the Company pursuant to Article 3, conversion, redemption or registration of
transfer or exchange shall, if surrendered to any person other than the Trustee,
be delivered to the Trustee and shall be promptly cancelled by the Trustee. The
Company may at any time deliver to the Trustee for cancellation any Notes
previously authenticated and delivered hereunder which the Company may have
acquired in any manner whatsoever, and all Notes so delivered shall be promptly
cancelled by the Trustee. The Company may not issue new Notes to replace Notes
it has paid or delivered to the Trustee for cancellation or that any Holder has
converted pursuant to Article 10. No Notes shall be authenticated in lieu of or
in exchange for any Notes cancelled as provided in this Section 2.10, except as
expressly permitted by this Indenture. All cancelled Notes held by the Trustee
shall be destroyed by the Trustee and the Trustee shall, upon request, deliver a
certificate of destruction to the Company.
Section 2.11 Persons Deemed Owners. Prior to due presentment of a Note for
registration of transfer, the Company, the Trustee and any agent of the Company
or the Trustee may treat the Person in whose name such Note is registered as the
owner of such Note for the purpose of receiving payment of principal of the Note
or the payment of any Redemption Price or Change in Control Repurchase Price in
respect thereof, and interest thereon, for the purpose of conversion and for all
other purposes whatsoever, whether or not such Note be overdue, and neither the
Company, the Trustee nor any agent of the Company or the Trustee shall be
affected by notice to the contrary.
Section 2.12 Global Notes. (a) Notwithstanding any other provisions of this
Indenture or the Notes, (A) transfers of a Global Note, in whole or in part,
shall be made only in accordance with Section 2.06 and Section 2.12(a)(i), (B)
transfer of a beneficial interest in a Global Note for a Certificated Note shall
comply with Section 2.06 and Section 2.12(a)(ii), and (C) transfers of a
Certificated Note shall comply with Section 2.06 and Sections 2.12(a)(iii) and
(iv).
(i) Transfer of Global Note. A Global Note may not be
transferred, in whole or in part, to any Person other than the
Depositary or a nominee or any successor thereof, and no such transfer
to any such other Person may be registered; provided that this clause
shall not prohibit any transfer of a Note that is issued in exchange
for a Global Note but is not itself a Global Note. No transfer of a
Note to any Person shall be effective under this Indenture or the
Notes unless and until such Note has been registered in the name of
such Person. Nothing in this Section 2.12(a)(i) shall prohibit or
render ineffective any transfer of a beneficial interest in a Global
Note effected in accordance with the other provisions of this Section
2.12(a).
(ii) Restrictions on Transfer of a Beneficial Interest in a
Global Note for a Certificated Note. A beneficial interest in a Global
Note may not be exchanged for a Certificated Note except upon
satisfaction of the requirements set forth below. Upon receipt by the
Trustee of a transfer of a beneficial interest in a Global Note (which
transfer shall be made to a Holder that is acquiring a minimum of
$100,000 aggregate principal amount of Notes) in accordance with
Applicable Procedures for a Certificated Note in the form satisfactory
to the Trustee, together with written instructions to the Trustee to
make, or direct the Registrar to make, an adjustment on its books and
records with respect to such Global Note to reflect a decrease in the
aggregate principal amount of the Notes represented by the Global
Note, such instructions to contain information regarding the
Depositary account to be credited with such decrease, then the Trustee
shall cause, or direct the Registrar to cause, in accordance with the
standing instructions and procedures existing between the Depositary
and the Registrar, the aggregate principal amount of Notes represented
by the Global Note to be decreased by the aggregate principal amount
of the Certificated Note to be issued, shall issue such Certificated
Note and shall debit or cause to be debited to the account of the
Person specified in such instructions a beneficial interest in the
Global Note equal to the principal amount of the Certificated Note so
issued.
(iii) Transfer and Exchange of Certificated Notes. When
Certificated Notes are presented to the Registrar with a request:
(A) to register the transfer of such Certificated
Notes; or
(B) to exchange such Certificated Notes for an
equal principal amount of Certificated Notes of other
authorized denominations,
the Registrar shall register the transfer or make the exchange as requested if
its reasonable requirements for such transaction are met; provided, however,
that the Certificated Notes surrendered for transfer or exchange shall be duly
endorsed or accompanied by a written instrument of transfer in form reasonably
satisfactory to the Company and the Registrar, duly executed by the Holder
thereof or his attorney duly authorized in writing.
(iv) Restrictions on Transfer of a Certificated Note for a
Beneficial Interest in a Global Note. A Certificated Note may not be
exchanged for a beneficial interest in a Global Note except upon
satisfaction of the requirements set forth below in connection with
certain transfers of such Notes.
Upon receipt by the Trustee of a Certificated Note, duly endorsed or accompanied
by appropriate instruments of transfer, in form reasonably satisfactory to the
Trustee, together with written instructions directing the Trustee to make, or to
direct the Registrar to make, an adjustment on its books and records with
respect to such Global Note to reflect an increase in the aggregate principal
amount of the Notes represented by the Global Note, such instructions to contain
information regarding the Depositary account to be credited with such increase,
then the Trustee shall cancel such Certificated Note and cause, or direct the
Registrar to cause, in accordance with the standing instructions and procedures
existing between the Depositary and the Registrar, the aggregate principal
amount of Notes represented by the Global Note to be increased by the aggregate
principal amount of the Certificated Note to be exchanged, and shall credit or
cause to be credited to the account of the Person specified in such instructions
a beneficial interest in the Global Note equal to the principal amount of the
Certificated Note so cancelled. If no Global Notes are then outstanding the
Company shall issue and the Trustee shall authenticate, upon written order of
the Company in the form of an Officers' Certificate, a new Global Note in the
appropriate principal amount.
(b) The Trustee shall have no obligation or duty to monitor, determine
or inquire as to compliance with any restrictions on transfer imposed under this
Indenture or under applicable law with respect to any transfer of any interest
in any Note (including any transfers between or among DTC participants, members
or beneficial owners in any Global Note) other than to require delivery of such
certificates and other documentation or evidence as are expressly required by,
and to do so if and when expressly required by, the terms of this Indenture, and
to examine the same to determine substantial compliance as to form with the
express requirements hereof. The Trustee shall not be liable for any action
taken or omitted to be taken by it in good faith in accordance with the
aforementioned opinion of counsel or registration statement.
(c) As used in the preceding paragraph of this Section 2.12, the term
"transfer" encompasses any sale, pledge, transfer, hypothecation or other
disposition of any Note.
(d) The provisions of clauses (i), (ii), (iii) and (iv) below shall
apply only to Global Notes:
(i) Notwithstanding any other provisions of this Indenture
or the Notes, except as provided in Section 2.12(a)(i), a Global Note
shall not be exchanged in whole or in part for a Note registered in
the name of any Person other than the Depositary or one or more
nominees thereof, provided that a Global Note may be exchanged for
Notes registered in the names of any person designated by the
Depositary in the event that (A) the Depositary has notified the
Company that it is unwilling or unable to continue as Depositary for
such Global Note or such Depositary is no longer eligible or in good
standing under the Exchange Act or any other applicable Statute or
regulation to continue as Depository for the Global Notes, and a
successor Depositary is not appointed by the Company within 90 days
after the Company receives notice or becomes aware of their
ineligibility or (B) an Event of Default has occurred and is
continuing with respect to the Notes. Any Global Note exchanged
pursuant to clause (A) above shall be so exchanged in whole and not in
part, and any Global Note exchanged pursuant to clause (B) above may
be exchanged in whole or from time to time in part as directed by the
Depositary. Any Note issued in exchange for a Global Note or any
portion thereof shall be a Global Note; provided that any such Note so
issued that is registered in the name of a Person other than the
Depositary or a nominee thereof shall not be a Global Note.
(ii) Notes issued in exchange for a Global Note or any
portion thereof shall be issued in definitive, fully registered form,
without interest coupons, shall have an aggregate principal amount
equal to that of such Global Note or portion thereof to be so
exchanged, shall be registered in such names and be in such authorized
denominations as the Depositary shall designate and shall bear the
applicable legends provided for herein. Any Global Note to be
exchanged in whole shall be surrendered by the Depositary to the
Trustee, as Registrar. With regard to any Global Note to be exchanged
in part, either such Global Note shall be so surrendered for exchange
or, if the Trustee is acting as custodian for the Depositary or its
nominee with respect to such Global Note, the principal amount thereof
shall be reduced, by an amount equal to the portion thereof to be so
exchanged, by means of an appropriate adjustment made on the records
of the Trustee. Upon any such surrender or adjustment, the Trustee
shall authenticate and deliver the Note issuable on such exchange to
or upon the order of the Depositary or an authorized representative
thereof.
(iii) Subject to the provisions of clause (v) below, the
registered Holder may grant proxies and otherwise authorize any
Person, including Agent Members (as defined below) and persons that
may hold interests through Agent Members, to take any action which a
Holder is entitled to take under this Indenture or the Notes.
(iv) In the event of the occurrence of any of the events
specified in clause (i) above, the Company will promptly make
available to the Trustee a reasonable supply of Certificated Notes in
definitive, fully registered form, without interest coupons.
(v) Neither any members of, or participants in, the
Depositary (collectively, the "AGENT MEMBERS") nor any other Persons
on whose behalf Agent Members may act shall have any rights under this
Indenture with respect to any Global Note registered in the name of
the Depositary or any nominee thereof, or under any such Global Note,
and the Depositary or such nominee, as the case may be, may be treated
by the Company, the Trustee and any agent of the Company or the
Trustee as the absolute owner and holder of such Global Note for all
purposes whatsoever. Notwithstanding the foregoing, nothing herein
shall prevent the Company, the Trustee or any agent of the Company or
the Trustee from giving effect to any written certification, proxy or
other authorization furnished by the Depositary or such nominee, as
the case may be, or impair, as between the Depositary, its Agent
Members and any other person on whose behalf an Agent Member may act,
the operation of customary practices of such Persons governing the
exercise of the rights of a Holder of any Note.
Section 2.13 CUSIP Numbers. The Company in issuing the Notes may use
"CUSIP" numbers and, if so, the Trustee shall use "CUSIP" numbers in notices of
redemption as a convenience to Holders; provided that any such notice may state
that no representation is made as to the correctness of such numbers either as
printed on the Notes or as contained in any notice of a redemption and that
reliance may be placed only on the other identification numbers printed on the
Notes, and any such redemption shall not be affected by any defect in or
omission of such numbers. The Company will promptly notify the Trustee of any
change in the CUSIP numbers.
Section 2.14 Defaulted Interest. If the Company defaults in a payment of
interest on the Notes, it will pay, or shall deposit with the Paying Agent money
in immediately available funds sufficient to pay, the defaulted interest plus
(to the extent lawful) any interest payable on the defaulted interest, to the
Persons who are Holders on a subsequent special record date. A special record
date, as used in this Section 2.14 with respect to the payment of any defaulted
interest, shall mean the 15th day next preceding the date fixed by the Company
for the payment of defaulted interest, whether or not such day is a Business
Day. At least 15 days before the subsequent special record date, the Company
shall mail to each Holder and to the Trustee a notice that states the subsequent
special record date, the payment date and the amount of defaulted interest to be
paid.
Notwithstanding anything else in this Indenture or any Note to the
contrary, the Company shall pay all interest in cash, and not in Additional
Notes, after the Notes become due and payable, whether due to (a) acceleration
of the Notes pursuant to Section 6.02, or (b) the scheduled maturity of the
Notes.
Section 2.15 Designation. The Indebtedness evidenced by the Notes is hereby
irrevocably designated as "senior indebtedness" or such other term denoting
seniority for the purposes of any other existing or future Indebtedness of the
Company which the Company makes subordinate to any senior (or such other term
denoting seniority) Indebtedness of the Company.
ARTICLE 3
REDEMPTION AND PURCHASES
Section 3.01 Optional Redemption. The Notes are not redeemable unless both
of the following have occurred: (i) payment in full by the Company of the
Non-Convertible Notes including without limitation, accrued but unpaid interest,
pre-payment penalties, fees or other expenses due thereunder and (ii) the New
Conversion Rights Date (the conditions described in clauses (i) and (ii), the
"OPTIONAL REDEMPTION CONDITIONS"). On and after the first date on which the
Optional Redemption Conditions have occurred, the Company may, at its option,
redeem the Notes at any time and from time to time (subject to the provisions of
Section 3.02 hereof regarding prior notice to the Trustee), on any date prior to
Stated Maturity, upon notice as set forth in Section 3.04, at a redemption price
of $1,000 per $1,000 principal amount of Notes (the "OPTIONAL REDEMPTION
PRICE"), plus any interest accrued but not paid prior to (but not including) the
Optional Redemption Date.
Unless the Company defaults in the payment of the Redemption Price,
interest will cease to accrue on the Notes or portions thereof called for
redemption on the applicable redemption date.
Any redemption pursuant to this Section 3.01 shall be made pursuant to the
provisions of Sections 3.02 through 3.07 hereof.
Section 3.02 Notice of Trustee. If the Company elects to redeem Notes
pursuant to the redemption provisions of Section 3.01 hereof, it shall notify
the Trustee at least 30 days prior but not more than 60 days prior to the
Redemption Date of such intended Redemption Date, the principal amount of Notes
to be redeemed and the CUSIP numbers of the Notes to be redeemed. In addition,
the Company shall furnish the Trustee with an Officer's Certificate certifying
that all conditions precedent to any such redemption have been satisfied in
full.
Section 3.03 Selection of Notes to be Redeemed. If fewer than all the Notes
are to be redeemed, the Trustee shall select the particular Notes to be redeemed
from the outstanding Notes by a method that complies with the requirements of
any exchange on which the Notes are listed, or, if the Notes are not listed on
an exchange, by lot. Notes and portions thereof that the Trustee selects shall
be in principal amounts equal to $1,000 (excluding Additional Notes) or any
whole multiple thereof.
If any Note selected for partial redemption is converted in part before
termination of the conversion right with respect to the portion of the Note so
selected, the converted portion of such Note shall be deemed to be the portion
selected for redemption (provided, however, that the Holder of such Note so
converted and deemed redeemed shall not be entitled to any additional interest
payment as a result of such deemed redemption than such Holder would have
otherwise been entitled to receive upon conversion of such Note). Notes which
have been converted during a selection of Notes to be redeemed may be treated by
the Trustee as outstanding for the purpose of such selection.
The Trustee shall promptly notify the Company and the Registrar in writing
of the Notes selected for redemption and, in the case of any Notes selected for
partial redemption, the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise requires,
all provisions relating to the redemption of Notes shall relate, in the case of
any Notes redeemed or to be redeemed only in part, to the portion of the
principal amount of such Notes which has been or is to be redeemed.
Section 3.04 Notice of Redemption. Notice of redemption shall be given in
the manner provided in Section 11.02 hereof to the Holders of Notes to be
redeemed. Subject to Section 3.04 hereof, such notice shall be given not less
than 30 nor more than 60 days prior to the Redemption Date for redemption
pursuant to Section 3.01.
All notices of redemption shall state:
(a) the Redemption Date;
(b) the Redemption Price and interest accrued and unpaid to, but not
including, the Redemption Date, if any;
(c) if fewer than all the outstanding Notes are to be redeemed, the
aggregate principal amount of Notes to be redeemed and the aggregate principal
amount of Notes which will be outstanding after such partial redemption;
(d) that on the Redemption Date the Redemption Price and interest
accrued and unpaid to, but not including, the Redemption Date, if any, will
become due and payable upon each such Note to be redeemed, and that interest
thereon shall cease to accrue on and after such date;
(e) the Conversion Price, the date on which the right to convert the
principal of the Notes to be redeemed will terminate and the places where such
Notes may be surrendered for conversion;
(f) the place or places where such Notes are to be surrendered for
payment of the Redemption Price and accrued and unpaid interest, if any; and
(g) the CUSIP number of the Notes.
The notice given shall specify the last date on which exchanges or
transfers of Notes may be made pursuant to Section 2.06 hereof.
Notice of redemption of Notes to be redeemed at the election of the Company
shall be given by the Company.
Section 3.05 Effect of Notice of Redemption. Notice of redemption having
been given as provided in Section 3.04 hereof, the Notes so to be redeemed
shall, on the Redemption Date, become due and payable at the Redemption Price
therein specified and from and after such date (unless the Company shall default
in the payment of the Redemption Price and accrued and unpaid interest) such
Notes shall cease to bear interest. Upon surrender of any such Note for
redemption in accordance with such notice, such Note shall be paid by the
Company at the Redemption Price plus accrued and unpaid interest, if any, to,
but not including, the Redemption Date; provided, however, that the installments
of interest on Notes whose Stated Maturity is prior to or on the Redemption Date
shall be payable to the Holders of such Notes, or one or more predecessor Notes,
registered as such on the relevant Record Date according to their terms and the
provisions of Section 2.01 hereof.
If any Note called for redemption shall not be so paid upon surrender
thereof for redemption, the principal and premium, if any, shall, until paid,
bear interest from the Redemption Date at the Interest Rate.
Section 3.06 Deposit of Redemption Price. Prior to or on any Redemption
Date, the Company shall deposit with the Trustee or with a Paying Agent an
amount of money sufficient to pay the Redemption Price of all the Notes to be
redeemed on that Redemption Date, other than any Notes called for redemption on
that date which have been converted prior to the date of such deposit, and
accrued and unpaid interest, if any, on such Notes.
Section 3.07 Notes Redeemed in Part. Any Note which is to be redeemed only
in part shall be surrendered at an office or agency of the Company designated
for that purpose pursuant to Section 4.05 hereof (with, if the Company or the
Trustee so requires, due endorsement by, or a written instrument of transfer in
form satisfactory to the Company and the Trustee duly executed by, the Holder
thereof or the Holder's attorney duly authorized in writing), and the Company
shall execute, and the Trustee shall authenticate and deliver to the Holder of
such Note without service charge, a new Note or Notes of any authorized
denomination as requested by such Holder in aggregate principal amount equal to
and in exchange for the unredeemed portion of the principal of the Note so
surrendered.
Section 3.08 Repurchase of Notes at Option of the Holder upon Change in
Control. (a) If there shall have occurred a Change in Control, all or any
portion of the Notes of any Holder equal to $1,000 or a whole multiple of
$1,000, not previously called for redemption, shall be repurchased by the
Company, at the option of such Holder, at a repurchase price equal to 100% of
the principal amount of the Notes to be repurchased, together with interest
accrued and unpaid to, but excluding, the repurchase date (the "CHANGE IN
CONTROL REPURCHASE PRICE"), on the date (the "CHANGE IN CONTROL REPURCHASE
DATE") that is 45 days (or if that 45th day is not a Business Day, the next
succeeding Business Day) after the Change in Control Repurchase Notice;
provided, however, that installments of interest on Notes whose Stated Maturity
is prior to or on the Change in Control Repurchase Date shall be payable to the
Holders of such Notes, or one or more predecessor Notes, registered as such on
the relevant Regular Record Date according to their terms.
(b) Whenever in this Indenture (including Sections 2.01, 6.01(a) and
6.07 hereof) or Exhibit A-1 annexed hereto there is a reference, in any context,
to the principal of any Note as of any time, such reference shall be deemed to
include reference to the Change in Control Repurchase Price payable in respect
to such Note to the extent that such Change in Control Repurchase Price is, was
or would be so payable at such time, and express mention of the Change in
Control Repurchase Price in any provision of this Indenture shall not be
construed as excluding the Change in Control Repurchase Price in those
provisions of this Indenture when such express mention is not made.
A "CHANGE IN CONTROL" of the Company shall be deemed to have occurred at
such time after the original issuance of Notes as any of the following events
shall occur:
(i) the acquisition by any person, including any syndicate
or group deemed to be a "person" under Section 13(d)(3) of the
Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT"), of
beneficial ownership, directly or indirectly, through a purchase,
merger or other acquisition transaction or series of transactions, of
shares of the Capital Stock of the Company entitling that person to
exercise 50% or more of the total voting power of all shares of such
Capital Stock entitled to vote generally in elections of directors,
other than any acquisition by the Company, any of its Subsidiaries or
any employee benefit plans of the Company; or
(ii) any consolidation or merger of the Company with or into
any other person, any merger of another person into the Company, or
any conveyance, transfer, sale, lease or other disposition of all or
substantially all of the Company's properties and assets to another
person, other than:
(A) any transaction (1) that does not result in
any reclassification, conversion, exchange or cancellation
of outstanding shares of the Capital Stock of the Company
and (2) pursuant to which holders of the Capital Stock of
the Company immediately prior to the transaction have the
entitlement to exercise, directly or indirectly, 50% or more
of the total voting power of all shares of the Capital Stock
of the Company entitled to vote generally in the election of
directors of the continuing or surviving person immediately
after the transaction; or
(B) any merger solely for the purpose of changing
the Company's jurisdiction of incorporation and resulting in
a reclassification, conversion or exchange of outstanding
shares of (1) Series B Preferred Stock solely into shares of
a series of preferred stock of the surviving entity having
the same designations, rights and privileges with respect to
such surviving entity as the Series B Preferred Stock has
with respect to the Company, (2) Series A Preferred Stock
solely into shares of a series of preferred stock of the
surviving entity having the same designations, rights and
privileges with respect to such surviving entity as the
Series A Preferred Stock has with respect to the Company, or
(3) Common Stock solely into shares of a series of common
stock of the surviving entity;
(iii) during any consecutive two-year period, individuals
who at the beginning of that two-year period constituted the Board of
Directors (together with any new directors whose election to the Board
of Directors, or whose nomination for election by the shareholders of
the Company, was approved by a vote of a majority of the directors
then still in office who were either directors at the beginning of
such period or whose election or nomination for election were
previously so approved) cease for any reason to constitute a majority
of the Board of Directors then in office; or
(iv) the Company is liquidated or dissolved or a resolution
is passed by the Company's stockholders approving a plan of
liquidation or dissolution of the Company other than in a transaction
which complies with the provisions described in Article 5 of the
Indenture.
Beneficial ownership shall be determined in accordance with Rule 13d-3
promulgated by the SEC under the Exchange Act. The term "person" shall include
any syndicate or group that would be deemed to be a "person" under Section
13(d)(3) of the Exchange Act.
(c) Unless the Company shall have theretofore called for redemption
all of the outstanding Notes, prior to or on the 30th day after the occurrence
of a Change in Control, the Company, or, at the written request and expense of
the Company prior to or on the 30th day after such occurrence, the Trustee,
shall give to all Noteholders, in the manner provided in Section 11.02 hereof,
notice of the occurrence of the Change in Control and of the repurchase right
set forth herein arising as a result thereof. The Company shall also deliver a
copy of such notice of a repurchase right to the Trustee. The notice shall
include a form of Change in Control Repurchase Notice (as defined in Section
3.08(d)) to be completed by the Noteholder and shall state:
(i) briefly, the events causing a Change in Control and the
date of such Change in Control;
(ii) the date by which the Change in Control Repurchase
Notice pursuant to this Section 3.08 must be given;
(iii) the Change in Control Repurchase Date;
(iv) the Change in Control Repurchase Price;
(v) the name and address of the Paying Agent and the
Conversion Agent;
(vi) the Conversion Price and any adjustments thereto;
(vii) that Notes as to which a Change in Control Repurchase
Notice has been given may be converted pursuant to Article 10 hereof
only if the Change in Control Purchase Notice has been withdrawn in
accordance with the terms of this indenture;
(viii) that Notes must be surrendered to the Paying Agent to
collect payment;
(ix) that the Change in Control Repurchase Price for any
Note as to which a Change in Control Repurchase Notice has been duly
given and not withdrawn will be paid promptly following the later of
the Change in Control Repurchase Date and the time of surrender of
such Note as described in (viii) above;
(x) briefly, the procedures the Holder must follow to
exercise rights under this Section 3.08;
(xi) briefly, the conversion rights of the Notes;
(xii) the procedures for withdrawing a Change in Control
Repurchase Notice;
(xiii) that, unless the Company defaults in making payment
of such Redemption Price, interest on Notes called for redemption will
cease to accrue on and after the Redemption Date; and
(xiv) the CUSIP number of the Notes.
(d) A Holder may exercise its rights specified in Section 3.08(a)
hereof upon delivery of a written notice of purchase (a "CHANGE IN CONTROL
REPURCHASE NOTICE") to the Paying Agent at any time prior to the close of
business on the Change in Control Repurchase Date, stating:
(i) the certificate number of the Note which the Holder will
deliver to be purchased;
(ii) the portion of the principal amount of the Note which
the Holder will deliver to be purchased; and
(iii) that such Note shall be purchased pursuant to the
terms and conditions specified in paragraph 6 on the reverse side of
the Notes.
The delivery of such Note to the Paying Agent prior to, on or after the
Change in Control Repurchase Date (together with all necessary endorsements) at
the offices of the Paying Agent shall be a condition to the receipt by the
Holder of the Change in Control Repurchase Price therefor; provided, however,
that such Change in Control Repurchase Price shall be so paid pursuant to this
Section 3.08 only if the Note so delivered to the Paying Agent shall conform in
all respects to the description thereof set forth in the related Change in
Control Repurchase Notice.
The Company shall purchase from the Holder thereof, pursuant to this
Section 3.08, a portion of a Note. Provisions of this Indenture that apply to
the purchase of all of a Note also apply to the purchase of such portion of such
Note.
Any purchase by the Company contemplated pursuant to the provisions of this
Section 3.08 shall be consummated by the delivery of the consideration to be
received by the Holder promptly following the later of the Change in Control
Repurchase Date and the time of delivery of the Note to the Paying Agent in
accordance with this Section 3.08.
Notwithstanding anything herein to the contrary, any Holder delivering to
the Paying Agent the Change in Control Repurchase Notice contemplated by this
Section 3.08(d) shall have the right to withdraw such Change in Control
Repurchase Notice at any time prior to the close of business on the Change in
Control Repurchase Date by delivery of a written notice of withdrawal to the
Paying Agent in accordance with Section 3.09.
The Paying Agent shall promptly notify the Company of the receipt by it of
any Change in Control Repurchase Notice or written withdrawal thereof.
Section 3.09 Effect of Change in Control Repurchase Notice. Upon receipt by
the Paying Agent of the Change in Control Repurchase Notice specified in Section
3.08(d), the Holder of the Note in respect of which such Change in Control
Repurchase Notice was given shall (unless such Change in Control Repurchase
Notice is withdrawn as specified in the following two paragraphs) thereafter be
entitled to receive solely the Change in Control Repurchase Price with respect
to such Note. Such Change in Control Repurchase Price shall be paid to such
Holder, subject to receipt of consideration for the Notes and/or Notes from the
Holders by the Paying Agent, promptly following the later of (x) the Change in
Control Repurchase Date with respect to such Note (provided the conditions in
Section 3.08(d) have been satisfied) and (y) the time of delivery of such Note
to the Paying Agent by the Holder thereof in the manner required by Section
3.08(d). Notes in respect of which a Change in Control Repurchase Notice, has
been given by the Holder thereof may not be converted pursuant to Article 10
hereof on or after the date of the delivery of such Change in Control Repurchase
Notice unless such Change in Control Repurchase Notice has first been validly
withdrawn as specified in the following two paragraphs.
A Change in Control Repurchase Notice may be withdrawn by means of written
notice of withdrawal delivered to the office of the Paying Agent in accordance
with the Change in Control Repurchase Notice at any time prior to the close of
business on the Change in Control Repurchase Date specifying:
(a) the certificate number of the Note in respect of which such notice
of withdrawal is being submitted,
(b) the principal amount of the Note with respect to which such notice
of withdrawal is being submitted, and
(c) the principal amount, if any, of such Note which remains subject
to the original Change in Control Repurchase Notice and which has been or will
be delivered for purchase by the Company.
There shall be no repurchase of any Notes pursuant to Section 3.08 if there
has occurred (prior to, on or after, as the case may be, the giving, by the
Holders of such Notes, of the required Change in Control Repurchase Notice) and
is continuing an Event of Default (other than a default in the payment of the
Change in Control Repurchase Price with respect to such Notes). The Paying Agent
will promptly return to the respective Holders thereof any Notes (x) with
respect to which a Change in Control Repurchase Notice has been withdrawn
incompliance with this Indenture, or (y) held by it during the continuance of an
Event of Default (other than a default in the payment of the Change in Control
Repurchase Price with respect to such Notes) in which case, upon such return,
the Change in Control Repurchase Notice with respect thereto shall be deemed to
have been withdrawn.
Section 3.10 Deposit of Change in Control Repurchase Price. Prior to 11:00
a.m. (New York City time) on the Change in Control Repurchase Date the Company
shall deposit with the Trustee or with the Paying Agent (or, if the Company or a
Subsidiary or an Affiliate of either of them is acting as the Paying Agent,
shall segregate and hold in trust as provided in Section 2.04) an amount of
money (in immediately available funds if deposited on such Business Day)
sufficient to pay the aggregate Change in Control Repurchase Price of all the
Notes or portions thereof which are to be purchased as of the Change in Control
Repurchase Date.
Section 3.11 Notes Purchased in Part. Any Note which is to be purchased
only in part shall be surrendered at the office of the Paying Agent (with, if
the Company or the Trustee so requires, due endorsement by, or a written
instrument of transfer in form satisfactory to the Company and the Trustee duly
executed by, the Holder thereof or such Holder's attorney duly authorized in
writing) and the Company shall execute and the Trustee shall authenticate and
deliver to the Holder of such Note, without service charge, a new Note or Notes,
of any authorized denomination as requested by such Holder in aggregate
principal amount equal to, and in exchange for, the portion of the principal
amount of the Note so surrendered which is not purchased.
Section 3.12 Covenant to Comply with Securities Laws . In connection with
any offer to purchase or repurchase Notes under Section 3.08 hereof (provided
that such offer or purchase constitutes an "issuer tender offer" for purposes of
Rule 13e-4 (which term, as used herein, includes any successor provision
thereto) under the Exchange Act at the time of such offer or purchase), the
Company shall (i) comply with Rule 13e-4, Rule 14e-1 and any other tender offer
rules under the Exchange Act which may then be applicable, (ii) file the related
Schedule TO (or any successor schedule, form or report) or any other schedule
required under the Exchange Act, and (iii) otherwise comply with all federal and
state securities laws so as to permit the rights and obligations under Section
3.08 to be exercised in the time and in the manner specified in Section 3.08.
Section 3.13 Repayment to the Company. The Trustee and the Paying Agent
shall return to the Company any cash held by them for the payment of the Change
in Control Repurchase Price; provided, however, that to the extent that the
aggregate amount of cash deposited by the Company pursuant to Section 3.11
exceeds the aggregate Change in Control Repurchase Price of the Notes or
portions thereof which the Company is obligated to purchase as of the Change in
Control Repurchase Date then promptly after the Business Day following the
Change in Control Repurchase Date the Trustee shall return any such excess to
the Company together with interest or dividends, if any, thereon.
ARTICLE 4
COVENANTS
Section 4.01 Payment of Principal, Premium, Interest on the Notes. The
Company will duly and punctually pay the principal of and premium, if any, and
interest at the Interest Rate in accordance with the terms of the Notes and this
Indenture. The Company will, at its option, either (i) deposit or cause to be
deposited with the Trustee as directed by the Trustee, no later than 11:00 a.m.,
New York City time on the day of the Stated Maturity of any interest installment
or principal payment of any Note, all payments so due or (ii) cause to be
executed and authenticated such Additional Notes in the principal amount
sufficient to pay the Stated Maturity of any interest installment or principal
payment of any Note in accordance with Section 2.02 hereof and deliver such
Additional Notes to each Holder of record (or to the Trustee or the
authenticating agent in custody for such Person). Principal amount, Redemption
Price, Change in Control Repurchase Price and cash interest shall be considered
paid on the applicable date due if at 11:00 a.m., New York City time on such
date (or, in the case of a Change in Control Repurchase Price on the Business
Day following the applicable Change in Control Repurchase Date, if applicable)
the Trustee or the Paying Agent holds, in accordance with this Indenture, money
or Notes, if permitted hereunder, sufficient to pay all such amounts then due.
The Company shall, to the extent permitted by law, pay cash interest on
overdue amounts at the rate per annum set forth in paragraph 1 on the reverse
side of the Notes, compounded semi-annually, which interest shall accrue from
the date such overdue amount was originally due to the date payment of such
amount, including interest thereon, has been made or duly provided for. All such
overdue interest shall be payable on demand.
Interest shall be computed on the basis of a 360-day year of twelve 30-day
months.
Section 4.02 SEC and Other Reports. The Company shall file with the
Trustee, within 15 days after it files such annual and quarterly reports,
information, documents and other reports with the SEC, copies of its annual
report and of the information, documents and other reports (or copies of such
portions of any of the foregoing as the SEC may by rules and regulations
prescribe) which the Company is required to file with the SEC pursuant to
Section 13 or 15(d) of the Exchange Act. If at any time the Company is not
subject to Section 13 or 15(d) of the Exchange Act, such reports shall be
provided at the times the Company would have been required to provide reports
had it continued to have been subject to such reporting requirements. The
Company also shall comply with the other provisions of TIA Section 314(a).
The Company's reporting obligations under this Section 4.02 will be
satisfied in the event the Company files such information with the SEC and it is
publicly available electronically through the SEC's EDGAR filing system.
Section 4.03 Compliance Certificate. The Company shall deliver to the
Trustee within 120 days after the end of each fiscal year of the Company
(beginning with the fiscal year ending on December 31, 2006) an Officers'
Certificate, stating whether or not to the knowledge of the signers thereof the
Company is in default in the performance and observance of any of the terms,
provisions and conditions of this Indenture (without regard to any period of
grace or requirement of notice provided hereunder) and if the Company shall be
in default, specifying all such defaults and the nature and status thereof of
which they may have knowledge.
Section 4.04 Further Instruments and Acts. Upon request of the Trustee, the
Company will execute and deliver such further instruments and do such further
acts as may be reasonably necessary or proper to carry out more effectively the
purposes of this Indenture.
Section 4.05 Maintenance of Office or Agency. The Company will maintain in
the Borough of Manhattan, the City of New York, an office or agency of the
Trustee, Registrar, Paying Agent and Conversion Agent where Notes may be
presented or surrendered for payment, where Notes may be surrendered for
registration of transfer, exchange, purchase, redemption or conversion and where
notices and demands to or upon the Company in respect of the Notes and this
Indenture may be served. The office of U.S. Bank National Association, located
at One Penn Plaza, Suite 1414, New York, NY 10119, shall initially be such
office or agency for all of the aforesaid purposes. The Company shall give
prompt written notice to the Trustee of the location, and of any change in the
location, of any such office or agency (other than a change in the location of
the office of the Trustee). If at any time the Company shall fail to maintain
any such required office or agency or shall fail to furnish the Trustee with the
address thereof, such presentations, surrenders, notices and demands may be made
or served at the address of the Trustee set forth in Section 10.02.
The Company may also from time to time designate one or more other offices
or agencies where the Notes may be presented or surrendered for any or all such
purposes and may from time to time rescind such designations; provided, however,
that no such designation or rescission shall in any manner relieve the Company
of its obligation to maintain an office or agency in the Borough of Manhattan,
the City of New York, for such purposes.
Section 4.06 Taxes. The Company will pay, and will cause each of its
Subsidiaries to pay, prior to delinquency, all material taxes, assessments, and
governmental levies except such as are contested in good faith and by
appropriate proceedings or where the failure to effect such payment is not
adverse in any material respect to the Holders.
ARTICLE 5
SUCCESSOR CORPORATION
Section 5.01 When Company May Merge or Transfer Assets. The Company shall
not consolidate, merge or amalgamate with or into any other person or convey,
transfer or lease its properties and assets of the Company and its Restricted
Subsidiaries taken as a whole substantially as an entirety to any person,
unless:
(a) either (i) the Company shall be the continuing corporation or (ii)
the person (if other than the Company) formed by such consolidation or into
which the Company is merged or amalgamated or the person which acquires by
conveyance, transfer or lease the properties and assets of the Company
substantially as an entirety (A) shall be organized and validly existing under
the laws of the United States or any State thereof or the District of Columbia
and (B) shall expressly assume, by an indenture supplemental hereto, executed
and delivered to the Trustee, in form reasonably satisfactory to the Trustee,
all of the obligations of the Company under the Notes and this Indenture;
(b) at the time of such transaction, no Event of Default and no event
which, after notice or lapse of time, would become an Event of Default, shall
have happened and be continuing; and
(c) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such consolidation,
merger, amalgamation, conveyance, transfer or lease and, if a supplemental
indenture is required in connection with such transaction, such supplemental
indenture, comply with this Article 5 and that all conditions precedent herein
provided for relating to such transaction have been satisfied.
For purposes of the foregoing, the transfer (by lease, assignment, sale or
otherwise) of the properties and assets of one or more Subsidiaries (other than
to the Company or another Subsidiary), which, if such assets were owned by the
Company, would constitute all or substantially all of the properties and assets
of the Company, shall be deemed to be the transfer of all or substantially all
of the properties and assets of the Company.
The successor person formed by such consolidation or into which the Company
is merged or the successor person to which such conveyance, transfer or lease is
made shall succeed to, and be substituted for, and may exercise every right and
power of, the Company under this Indenture with the same effect as if such
successor had been named as the Company herein; and thereafter, except in the
case of a lease, the Company shall be discharged from all obligations and
covenants under this Indenture and the Notes. Subject to Section 9.06, the
Company, the Trustee and the successor person shall enter into a supplemental
indenture to evidence the succession and substitution of such successor person
and such discharge and release of the Company.
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.01 Events of Default. An "EVENT OF DEFAULT" occurs if:
(a) the Company fails to pay when due the principal of or premium, if
any, on any of the Notes at maturity, upon redemption or exercise of a
repurchase right or otherwise;
(b) the Company fails to pay an installment of interest (including
Registration Delay Payments (as that term is defined in the Registration Rights
Agreement), if any) on any of the Notes that continues for 30 days after the
date when due;
(c) the Company fails to deliver shares of Series B Preferred Stock or
Common Stock, as applicable, together with cash in lieu of fractional shares, if
any, when such shares are required to be delivered for conversion of a Note and
such failure continues for 10 days after such delivery date;
(d) the Company fails to perform or observe any other term, covenant
or agreement contained in the Notes or this Indenture and the Non-Convertible
Notes and the Non-Convertible Notes indenture for a period of 30 days after
receipt by the Company of a Notice of Default (as defined in this Section 6.01);
(e) the Company fails to give or cause the Trustee to give all
Noteholders notice of the occurrence of a Change in Control in accordance with
the provisions of Section 3.08(c) hereof;
(f) one or more defaults in the payment of principal of or premium, if
any, on any of the Company's or the Company's Subsidiaries' Indebtedness
aggregating $5.0 million or more, when the same becomes due and payable at the
scheduled maturity thereof, and such default or defaults shall have continued
after any applicable grace period and shall not have been cured or waived within
a 30-day period after the date of a notice of default or any of the Company's or
the Company's Subsidiaries' Indebtedness aggregating $5.0 million or more shall
have been accelerated or otherwise declared due and payable, or required to be
prepaid or repurchased (other than by regularly scheduled required prepayment)
prior to the scheduled maturity thereof and such acceleration is not rescinded
or annulled within a 30-day period after the date of such acceleration;
(g) there is rendered against the Company or any of its Subsidiaries
one or more final unsatisfied judgments not covered by insurance aggregating in
excess of $5.0 million, which are not stayed, bonded or discharged within 60
days;
(h) the Company, or any Significant Subsidiary, or any Subsidiaries of
the Company which in the aggregate would constitute a Significant Subsidiary
pursuant to or under or within the meaning of any Bankruptcy Law:
(i) commences a voluntary case or proceeding;
(ii) consents to the entry of an order for relief against it
in an involuntary case or proceeding or the commencement of any case
against it;
(iii) consents to the appointment of a Custodian of it or
for any substantial part of its property;
(iv) makes a general assignment for the benefit of its
creditors;
(v) files a petition in bankruptcy or answer or consent
seeking reorganization or relief; or
(vi) consents to the filing of such a petition or the
appointment of or taking possession by a Custodian; or
(i) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(i) is for relief against the Company or any Significant
Subsidiary or any Subsidiaries of the Company which in the aggregate
would constitute a Significant Subsidiary in an involuntary case or
proceeding, or adjudicates the Company or any Significant Subsidiary
or any Subsidiaries of the Company which in the aggregate would
constitute a Significant Subsidiary insolvent or bankrupt;
(ii) appoints a Custodian of the Company or any Significant
Subsidiary or any Subsidiaries of the Company which in the aggregate
would constitute a Significant Subsidiary or for any substantial part
of its or their properties; or
(iii) orders the winding up or liquidation of the Company or
any Significant Subsidiary or any Subsidiaries of the Company which in
the aggregate would constitute a Significant Subsidiary;
and the order or decree remains unstayed and in effect for 60 days.
"BANKRUPTCY LAW" means Title 11, United States Code, or any similar federal
or state law for the relief of debtors.
"CUSTODIAN" means any receiver, trustee, assignee, liquidator, custodian or
similar official under any Bankruptcy Law.
A Default under clauses (d), (f) or (g) above is not an Event of Default
until the Trustee notifies the Company, or the Holders of at least 25% in
aggregate principal amount of the Notes at the time outstanding notify the
Company and the Trustee, of the Default and the Company does not cure such
Default (and such Default is not waived) within the time specified in clause (c)
or (f) above after actual receipt of such notice. Any such notice must specify
the Default, demand that it be remedied and state that such notice is a "NOTICE
OF DEFAULT".
The Company will deliver to the Trustee, within five Business Days of
becoming aware of the occurrence of an Event of Default, written notice thereof.
In addition, the Company shall deliver to the Trustee, within 30 days after it
becomes aware of the occurrence thereof, written notice of any event which with
the lapse of time and the giving of notice would become an Event of Default
under clause (d), (f) or (g) above, its status and what action the Company is
taking or proposes to take with respect thereto.
Section 6.02 Acceleration. If an Event of Default (other than an Event of
Default specified in Section 6.01(h) or (i)) occurs and is continuing, the
Trustee by notice to the Company, or the Holders of at least 25% in aggregate
principal amount of the Notes at the time outstanding by notice to the Company
and the Trustee, may declare the Notes due and payable at their principal amount
together with accrued interest. Upon a declaration of acceleration, such
principal and accrued and unpaid interest to the date of payment shall be
immediately due and payable.
If an Event of Default specified in Section 6.01(h) or (i) above occurs and
is continuing, then the principal and the interest on all the Notes shall become
and be immediately due and payable without any declaration or other act on the
part of the Trustee or any Noteholders.
The Holders of a majority in aggregate principal amount of the Notes at the
time outstanding, by notice to the Trustee (and without notice to any other
Noteholder) may rescind or annul an acceleration and its consequences if the
rescission would not conflict with any judgment or decree and if all existing
Events of Default have been cured or waived except nonpayment of the principal
and any accrued cash interest that have become due solely as a result of
acceleration and if all amounts due to the Trustee under Section 7.06 have been
paid. No such rescission shall affect any subsequent 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 to collect the payment
of the principal, the premium, if any, and any accrued cash interest on the
Notes or to enforce the performance of any provision of the Notes or this
Indenture.
The Trustee may maintain a proceeding even if the Trustee does not possess
any of the Notes or produce any of the Notes in the proceeding. A delay or
omission by the Trustee or any Noteholder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of, or acquiescence in, the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative.
Section 6.04 Waiver of Past Defaults. The Holders of a majority in
aggregate principal amount of the Notes at the time outstanding, by notice to
the Trustee (and without notice to any other Noteholder), may waive an existing
Default and its consequences except (1) an Event of Default described in Section
6.01(a) or (b), (2) a Default in respect of a provision that under Section 9.02
cannot be amended without the consent of each Noteholder affected or (3) a
Default which constitutes a failure to convert any Note in accordance with
Article 10. When a Default is waived, it is deemed cured, but no such waiver
shall extend to any subsequent or other Default or impair any consequent right.
This Section 6.04 shall be in lieu of Section 316(a)(1)(B) of the TIA and such
Section 316(a)(1)(B) is hereby expressly excluded from this Indenture, as
permitted by the TIA.
Section 6.05 Control by Majority. The Holders of a majority in aggregate
principal amount of the Notes at the time outstanding through their written
consent may direct the time, method and place of conducting any proceeding for
any remedy available to the Trustee or of exercising any trust or power
conferred on the Trustee. However, the Trustee may refuse to follow any
direction that conflicts with law or this Indenture or that the Trustee
determines in good faith is unduly prejudicial to the rights of other
Noteholders or would involve the Trustee in personal liability unless the
Trustee is offered indemnity reasonably satisfactory to it against loss,
liability or expense. This Section 6.05 shall be in lieu of Section 316(a)1(A)
of the TIA and such Section 316(a)1(A) is hereby expressly excluded from this
Indenture, as permitted by the TIA.
Section 6.06 Limitation on Suits. A Noteholder may not pursue any remedy
with respect to this Indenture or the Notes unless:
(a) the Holder gives to the Trustee written notice stating that an
Event of Default is continuing;
(b) the Holders of at least 25% in aggregate principal amount of the
Notes at the time outstanding make a written request to the Trustee to pursue
the remedy;
(c) such Holder or Holders offer to the Trustee reasonable security or
indemnity satisfactory to the Trustee against any loss, liability or expense;
(d) the Trustee does not comply with the request within 60 days after
receipt of such notice, request and offer of security or indemnity; and
(e) the Holders of a majority in aggregate principal amount of the
Notes at the time outstanding do not give the Trustee a direction inconsistent
with the request during such 60-day period.
A Noteholder may not use this Indenture to prejudice the rights of any
other Noteholder or to obtain a preference or priority over any other
Noteholder.
Section 6.07 Rights of Holders to Receive Payment. Notwithstanding any
other provision of this Indenture, the right of any Holder to receive payment of
the principal amount, premium, if any, plus Redemption Price, Change in Control
Repurchase Price or any accrued cash interest in respect of the Notes held by
such Holder, on or after the respective due dates expressed in the Notes or any
Redemption Date and to convert the Notes in accordance with Article 10 or to
bring suit for the enforcement of any such payment on or after such respective
dates or the right to convert, shall not be impaired or affected adversely
without the consent of such Holder.
Section 6.08 Collection Suit by Trustee. If an Event of Default described
in Section 6.01(1) or (2) occurs and is continuing, the Trustee may recover
judgment in its own name and as trustee of an express trust against the Company
for the whole amount owing with respect to the Notes and the amounts provided
for in Section 7.06.
Section 6.09 Trustee May File Proofs of Claim. In case of the pendency of
any receivership, insolvency, liquidation, bankruptcy, reorganization,
arrangement, adjustment, composition or other judicial proceeding relative to
the Company or any other obligor upon the Notes or the property of the Company
or of such other obligor or their creditors, the Trustee (irrespective of
whether the principal amount, Redemption Price, Change in Control Repurchase
Price or any accrued cash interest in respect of the Notes shall then be due and
payable as therein expressed or by declaration or otherwise and irrespective of
whether the Trustee shall have made any demand on the Company for the payment of
any such amount) shall be entitled and empowered, by intervention in such
proceeding or otherwise,
(a) to file and prove a claim for the whole amount of the principal
amount, Redemption Price, Change in Control Repurchase Price or any accrued cash
interest and to file such other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee (including any claim for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel or any other amounts due the Trustee under
Section 7.06) and of the Holders allowed in such judicial proceeding, and
(b) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
similar official in any such judicial proceeding is hereby authorized by each
Holder to make such payments to the Trustee and, in the event that the Trustee
shall consent to the making of such payments directly to the Holders, to pay the
Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 7.06.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Notes or
the rights of any Holder thereof, or to authorize 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 6, it shall pay out the money in the following order:
(a) to the Trustee for amounts due under Section 7.06;
(b) to Noteholders for amounts due and unpaid on the Notes for the
principal amount, Redemption Price, Change in Control Purchase Price or any
accrued cash interest as the case may be, ratably, without preference or
priority of any kind, according to such amounts due and payable on the Notes;
and
(c) the balance, if any, to the Company.
The Trustee may fix a record date and payment date for any payment to
Noteholders pursuant to this Section 6.10. At least 15 days before such record
date, the Trustee shall mail to each Noteholder and the Company a notice that
states the record date, the payment date and the amount to be paid.
Section 6.11 Distributions to Senior Secured Creditors Following
Substantive Consolidation or Other Similar Remedies. In the event that a court
of competent jurisdiction either under the United States Bankruptcy Code or
applicable law enters (i) an order in any bankruptcy case of the Company and/or
any of its Subsidiaries providing for: (A) substantive consolidation of the
Company with some of all of its Subsidiaries, in whole in part, (B) the
substantive consolidation of some or all of the assets and liabilities of any of
the Company's Subsidiaries with the Company's bankruptcy estate, or (C) piercing
the corporate veil between the Company and any of its Subsidiaries (a
"Substantive Consolidation Order"), then, notwithstanding any effect of such
Substantive Consolidation Order that would otherwise apply, the Holders of the
Notes hereby agree that:
(a) The assets of any of the Subsidiaries (or the value or any
proceeds realized therefrom) that are substantively consolidated with the
bankruptcy estate of the Company shall be available to be applied first to the
payment and satisfaction of the Subsidiaries' obligations and the obligations of
the Company to the lenders under the Credit Facilities in the same manner and to
the same extent as would have been the case had any Substantive Consolidation
Order not been entered; and
(b) The value of the common stock of any of the Subsidiaries that are
substantively consolidated with the bankruptcy estate of the Company shall be
available to be applied first to the payment and satisfaction of the liens on
the stock of the Subsidiaries granted to the lenders by the Company under the
Credit Facilities in the same manner and to the same extent as would have been
the case had any Substantive Consolidation Order not been entered.
Section 6.12 Undertaking for Costs. In any suit for the enforcement of any
right or remedy under this Indenture or in any suit against the Trustee for any
action taken or omitted by it as Trustee, a court in its discretion may require
the filing by any party litigant (other than the Trustee) in the suit of an
undertaking to pay the costs of the suit, and the court in its discretion may
assess reasonable costs, including reasonable attorneys' fees and expenses,
against any party litigant in the suit, having due regard to the merits and good
faith of the claims or defenses made by the party litigant. This Section 6.11
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 aggregate principal amount of the
Notes at the time outstanding. This Section 6.11 shall be in lieu of Section
315(e) of the TIA and such Section 315(e) is hereby expressly excluded from this
Indenture, as permitted by the TIA.
Section 6.13 Waiver of Stay, Extension or Usury Laws. The Company covenants
(to the extent that it may lawfully do so) that it will not at any time insist
upon, or plead, or in any manner whatsoever claim or take the benefit or
advantage of, any stay or extension law or any usury or other law wherever
enacted, now or at any time hereafter in force, which would prohibit or forgive
the Company from paying all or any portion of the principal amount, Redemption
Price, Change in Control Repurchase Price or any accrued cash interest in
respect of Notes, or any interest on such amounts, as contemplated herein, or
which may affect the covenants or the performance of this Indenture; and the
Company (to the extent that it may lawfully do so) hereby expressly waives all
benefit or advantage of any such law, and covenants that it will not hinder,
delay or impede the execution of any power herein granted to the Trustee, but
will suffer and permit the execution of every such power as though no such law
had been enacted.
ARTICLE 7
TRUSTEE
Section 7.01 Duties and Responsibilities of the Trustee; During Default;
Prior to Default. The Trustee, prior to the occurrence of an Event of Default
hereunder and after the curing or waiving of all such Events of Default which
may have occurred, undertakes to perform such duties and only such duties as are
specifically set forth in this Indenture. In case an Event of Default hereunder
has occurred (which has not been cured or waived), the Trustee shall exercise
such of the rights and powers vested in it by this Indenture, and use the same
degree of care and skill in their exercise, as a prudent man would exercise or
use under the circumstances in the conduct of his own affairs.
No provision of this Indenture shall be construed to relieve the Trustee
from liability for its own negligent action, its own negligent failure to act or
its own willful misconduct, except that
(a) prior to the occurrence of an Event of Default hereunder and after
the curing or waiving of all such Events of Default which may have occurred:
(i) the duties and obligations of the Trustee shall be
determined solely by the express provisions of this Indenture, and the
Trustee shall not be liable except for the performance of such duties
and obligations as are specifically set forth in this Indenture, and
no implied covenants or obligations shall be read into this Indenture
against the Trustee; and
(ii) in the absence of bad faith on the part of the Trustee,
the Trustee may conclusively rely, as to the truth of the statements
and the correctness of the opinions expressed therein, upon any
statements, certificates or opinions furnished to the Trustee and
conforming to the requirements of this Indenture; but in the case of
any such statements, certificates or opinions which by any provision
hereof are specifically required to be furnished to the Trustee, the
Trustee shall be under a duty to examine the same to determine whether
or not they conform to the requirements of this Indenture;
(b) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer or Responsible Officers of the Trustee,
unless it shall be proved that the Trustee was negligent in ascertaining the
pertinent facts; and
(c) the Trustee shall not be liable with respect to any action taken
or omitted to be taken by it in good faith in accordance with the direction of
the Holders pursuant to Section 6.05 relating to the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred upon the Trustee, under this Indenture. None of the
provisions contained in this Indenture shall require the Trustee to expend or
risk its own funds or otherwise incur personal financial liability in the
performance of any of its duties or in the exercise of any of its rights or
powers, if there shall be reasonable ground for believing that the repayment of
such funds or adequate indemnity against such liability is not reasonably
assured to it.
The provisions of this Section 7.01 are in furtherance of and subject to
Sections 315 and 316 of the TIA.
Section 7.02 Certain Rights of the Trustee. In furtherance of and subject
to the TIA and subject to Section 7.01:
(a) the Trustee may rely, and shall be protected in acting or
refraining from acting upon, any resolution, Officers' Certificate, Company
Request, Company Order, or any other certificate, statement, instrument,
opinion, report, notice, request, consent, order, bond, debenture, note, coupon,
Note or other paper or document believed by it to be genuine and to have been
signed or presented by the proper party or parties;
(b) any request, direction, order or demand of the Company mentioned
herein shall be sufficiently evidenced by an Officers' Certificate (unless other
evidence in respect thereof be herein specifically prescribed); and any
resolution of the Board of Directors may be evidenced to the Trustee by a copy
thereof certified by the secretary or an assistant secretary of the Company;
(c) the Trustee may consult with counsel of its selection and any
advice or Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted to be taken by it
hereunder in good faith and in accordance with such advice or Opinion of
Counsel;
(d) the Trustee shall be under no obligation to exercise any of the
trusts or powers vested in it by this Indenture in accordance with the request,
order or direction of any of the Noteholders pursuant to the provisions of this
Indenture, unless such Noteholders shall have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities which might be
incurred therein or thereby;
(e) the Trustee shall not be liable for any action taken or omitted by
it in good faith and believed by it to be authorized or within the discretion,
rights or powers conferred upon it by this Indenture;
(f) prior to the occurrence of an Event of Default hereunder and after
the curing or waiving of all such Events of Default, the Trustee shall not be
bound to make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, order, approval, appraisal, bond, debenture, note, coupon,
security, or other paper or document unless requested in writing to do so by the
Holders of not less than a majority in aggregate principal amount of the Notes
then outstanding; provided that, if the payment within a reasonable time to the
Trustee of the costs, expenses or liabilities likely to be incurred by it in the
making of such investigation is, in the opinion of the Trustee, not reasonably
assured to the Trustee by the security afforded to it by the terms of this
Indenture, the Trustee may require reasonable indemnity against such expenses or
liabilities as a condition to proceeding; the reasonable expenses of every such
investigation shall be paid by the Company or, if paid by the Trustee or any
predecessor trustee, shall be repaid by the Company upon demand;
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys not regularly in its employ and the Trustee shall not be responsible
for any misconduct or negligence on the part of any such agent or attorney
appointed with due care by it hereunder;
(h) The Trustee's immunities and protections from liability and its
rights to compensation and indemnification in connection with the performance of
its duties under this Indenture shall extend to the Trustee's officers,
directors, agents and employees and its services as Paying Agent, Registrar or
any other role assumed by the Trustee hereunder or to which it has been
appointed. Such immunities and protections and right to indemnification,
together with the Trustee's right to compensation, shall survive the Trustee's
resignation or removal and the final payment of the Notes;
(i) The Trustee is not required to give any bond or surety with
respect to the performance of its duties or the exercise of its powers under
this Indenture; and
(j) The Trustee shall not be deemed to have knowledge of any Default
or Event of Default hereunder except (i) during any period it is serving as
Paying Agent for the Notes, any Event of Default pursuant to Sections 6.01 (a),
(b), (c) or (d), or (ii) any Default or Event of Default of which a Responsible
Officer shall have received written notification. All notices or other
instruments required by this Indenture to be delivered to the Trustee must, in
order to be effective, be in writing and delivered to the principal corporate
trust office of the Trustee, and in the absence of such notice so delivered to
the Trustee may conclusively assume there is no default except as aforesaid.
(k) The permissive right of the Trustee to do things enumerated in
this Indenture shall not be construed as a duty.
(l) The Trustee shall have no responsibility for any information in
any offering memorandum or other disclosure material distributed with respect to
the Notes, and the Trustee shall have no responsibility for compliance with any
state or federal securities laws in connection with the Notes.
(m) The Trustee shall have no responsibility for any registration,
filing, recording, re-registration or re-recording of this Indenture or any
other document or instrument executed in connection with this Indenture and the
issuance of the Notes including, without limitation, any financing statements or
continuation statements with respect thereto.
(n) The Trustee shall not in any event be responsible for ensuring
that the rate of interest due and payable on the Notes under this Indenture does
not exceed the highest legal rate of interest permissible under federal or state
law applicable thereto.
Section 7.03 Trustee Not Responsible for Recitals, Disposition of Notes or
Application of Proceeds Thereof. The recitals contained herein and in the Notes,
except the Trustee's certificates of authentication, shall be taken as the
statements of the Company, and the Trustee assumes no responsibility for the
correctness of the same. The Trustee makes no representation as to the validity
or sufficiency of this Indenture or of the Notes. The Trustee shall not be
accountable for the use or application by the Company of any of the Notes or of
the proceeds thereof.
Section 7.04 Trustee and Agents May Hold Notes; Collections, etc. The
Trustee or any agent of the Company or the Trustee, in its individual or any
other capacity, may become the owner or pledgee of Notes with the same rights it
would have if it were not the Trustee or such agent and, subject to Sections
7.08 and 7.13, if operative, may otherwise deal with the Company and receive,
collect, hold and retain collections from the Company with the same rights it
would have if it were not the Trustee or such agent.
Section 7.05 Moneys Held by Trustee. Subject to the provisions of Section
8.02 hereof, all moneys received by the Trustee shall, until used or applied as
herein provided, be held in trust for the purposes for which they were received,
but need not be segregated from other funds except to the extent required by
mandatory provisions of law. Neither the Trustee nor any agent of the Company or
the Trustee shall be under any liability for interest on any moneys received by
it hereunder.
Section 7.06 Compensation and Indemnification of Trustee and Its Prior
Claim. The Company covenants and agrees to pay to the Trustee from time to time,
and the Trustee shall be entitled to, such compensation (which shall not be
limited by any provision of law in regard to the compensation of a trustee of an
express trust) to be agreed to in writing by the Trustee and the Company, and
the Company covenants and agrees to pay or reimburse the Trustee and each
predecessor Trustee upon its request for all reasonable expenses, disbursements
and advances incurred or made by or on behalf of it in accordance with any of
the provisions of this Indenture (including (i) the reasonable compensation and
the expenses and disbursements of one counsel and of all agents and other
persons not regularly in its employ and (ii) interest at the prime rate on any
disbursements and advances made by the Trustee and not paid by the Company
within 5 days after receipt of an invoice for such disbursement or advance)
except any such expense, disbursement or advance as may arise from its
negligence or bad faith. The Company also covenants to indemnify the Trustee and
each predecessor Trustee for, and to hold it harmless against, any loss,
liability or expense incurred without negligence or bad faith on its part,
arising out of or in connection with the acceptance or administration of this
Indenture or the trusts hereunder and its duties hereunder, including the costs
and expenses of defending itself against or investigating any claim of liability
in the premises. The obligations of the Company under this Section 7.06 to
compensate and indemnify the Trustee and each predecessor Trustee and to pay or
reimburse the Trustee and each predecessor Trustee for expenses, disbursements
and advances shall constitute additional Indebtedness hereunder and shall
survive the satisfaction and discharge of this Indenture. Such additional
Indebtedness shall be a senior claim to that of the Notes upon all property and
funds held or collected by the Trustee as such, except funds held in trust for
the benefit of the Holders of particular Notes, and the Notes are hereby
effectively subordinated to such senior claim to such extent. The provisions of
this Section 7.06 shall survive the termination of this Indenture and the
resignation or removal of the Trustee. When the Trustee incurs expenses or
renders services in connection with an Event of Default specified in Section
6.01 or in connection with Article 6 hereof, the expenses (including the
reasonable fees and expenses of its counsel) and the compensation for services
in connection therewith are to constitute expenses of administration under any
bankruptcy law.
Section 7.07 Right of Trustee to Rely on Officers' Certificate, etc.
Subject to Sections 7.01 and 7.02, whenever in the administration of the trusts
of this Indenture the Trustee shall deem it necessary or desirable that a matter
be proved or established prior to taking or suffering or omitting any action
hereunder, such matter (unless other evidence in respect thereof be herein
specifically prescribed) may, in the absence of negligence or bad faith on the
part of the Trustee, be deemed to be conclusively proved and established by an
Officers' Certificate delivered to the Trustee.
Section 7.08 Conflicting Interests. If the Trustee has or shall acquire a
conflicting interest within the meaning of the TIA, the Trustee shall either
eliminate such interest or resign, to the extent and in the manner provided by,
and subject to the provisions of, the TIA.
Section 7.09 Persons Eligible for Appointment as Trustee. The Trustee shall
at all times be a corporation or banking association having a combined capital
and surplus of at least $10,000,000. If such corporation or banking association
files reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then, for the
purposes of this Section 7.09, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so filed. In case at any time the Trustee
shall cease to be eligible in accordance with the provisions of this Section
7.09, the Trustee shall resign immediately in the manner and with the effect
specified in Section 7.10.
Section 7.10 Resignation and Removal; Appointment of Successor Trustee.
(a) The Trustee, or any trustee or trustees hereafter appointed, may
at any time resign with respect to one or more or all series of Notes by giving
written notice of resignation to the Company and by mailing notice thereof by
first-class mail to the Holders of Notes at their last addresses as they shall
appear on the Note register. Upon receiving such notice of resignation, the
Company shall promptly appoint a successor trustee or trustees by written
instrument in duplicate, executed by authority of the Board of Directors, one
copy of which instrument shall be delivered to the resigning Trustee and one
copy to the successor trustee or trustees. If no successor trustee shall have
been so appointed and have accepted appointment within 30 days after the mailing
of such notice of resignation, the resigning trustee may petition any court of
competent jurisdiction for the appointment of a successor trustee, or any
Noteholder who has been a bona fide Holder of a Note for at least six months
may, subject to the provisions of Section 7.11, on behalf of himself and all
others similarly situated, petition any such court for the appointment of a
successor trustee. Such court may thereupon, after such notice, if any, as it
may deem proper and prescribe, appoint a successor trustee.
(b) In case at any time any of the following shall occur:
(i) the Trustee shall fail to comply with the provisions of
Section 7.08 with respect to any Notes after written request therefor
by the Company or by any Noteholder who has been a bona fide Holder of
a Note for at least six months; or
(ii) the Trustee shall cease to be eligible in accordance
with the provisions of Section 7.09 and shall fail to resign after
written request therefor by the Company or by any Noteholder; or
(iii) the Trustee shall become incapable of acting or shall
be adjudged a bankrupt or insolvent, or a receiver or liquidator of
the Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Trustee or of its property
or affairs for the purpose of rehabilitation, conservation or
liquidation; or
then, in any such case, the Company may remove the Trustee and appoint a
successor trustee by written instrument, in duplicate, executed by order of the
Board of Directors of the Company, one copy of which instrument shall be
delivered to the Trustee so removed and one copy to the successor trustee, or,
subject to the provisions of Section 7.11, any Noteholder who has been a bona
fide Holder of a Note for at least six months may on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor trustee. Such court
may thereupon, after such notice, if any, as it may deem proper and prescribe,
remove the Trustee and appoint a successor trustee. If no successor trustee
shall have been appointed and have accepted appointment within 30 days after a
notice of removal has been given, the removed trustee may petition a court of
competent jurisdiction for the appointment of a successor trustee.
(c) The Holders of a majority in aggregate principal amount of the
Notes at the time outstanding may at any time remove the Trustee and appoint a
successor trustee by delivering to the Trustee so removed, to the successor
trustee so appointed and to the Company the evidence provided for in Section
1.05 of the action in that regard taken by the Noteholders.
(d) Any resignation or removal of the Trustee and any appointment of a
successor trustee pursuant to any of the provisions of this Section 7.10 shall
become effective upon acceptance of appointment by the successor trustee as
provided in Section 7.11.
Section 7.11 Acceptance of Appointment by Successor Trustee. Any successor
trustee appointed as provided in Section 7.10 shall execute and deliver to the
Company and to its predecessor trustee an instrument accepting such appointment
hereunder, and thereupon the resignation or removal of the predecessor trustee
shall become effective and such successor trustee, without any further act, deed
or conveyance, shall become vested with all rights, powers, duties and
obligations of its predecessor hereunder, with like effect as if originally
named as trustee hereunder; but, nevertheless, on the written request of the
Company or of the successor trustee, upon payment of its charges then unpaid,
the trustee ceasing to act shall pay over to the successor trustee all moneys at
the time held by it hereunder and shall execute and deliver an instrument
transferring to such successor trustee all such rights, powers, duties and
obligations. Upon request of any such successor trustee, the Company shall
execute any and all instruments in writing for more fully and certainly vesting
in and confirming to such successor trustee all such rights and powers. Any
trustee ceasing to act shall, nevertheless, retain a prior claim upon all
property or funds held or collected by such trustee to secure any amounts then
due it pursuant to the provisions of Section 7.06.
No successor trustee shall accept appointment as provided in this Section
7.11 unless at the time of such acceptance such successor trustee shall be
qualified under the provisions of Section 7.08 and eligible under the provisions
of Section 7.09.
Upon acceptance of appointment by any successor trustee as provided in this
Section 7.11, the Company shall mail notice thereof by first class mail to the
Holders of Notes at their last addresses as they shall appear in the register.
If the acceptance of appointment is substantially contemporaneous with the
resignation, then the notice called for by the preceding sentence may be
combined with the notice called for by Section 7.10. If the Company fails to
mail such notice within ten days after acceptance of appointment by the
successor trustee, the successor trustee shall cause such notice to be mailed at
the expense of the Company.
Section 7.12 Merger, Conversion, Consolidation or Succession to Business of
Trustee. Any corporation or banking association into which the Trustee may be
merged or converted or with which it may be consolidated, or to which it may
sell or transfer its corporate trust business and assets as a whole or
substantially as a whole, or any corporation or banking association resulting
from any merger, sale, conversion or consolidation to which the Trustee shall be
a party, shall be the successor of the Trustee hereunder, provided that such
corporation or banking association shall be qualified under the provisions of
Section 7.08 and eligible under the provisions of Section 7.09, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, anything herein to the contrary notwithstanding. In case at the
time such successor to the Trustee shall succeed to the trusts created by this
Indenture any of the Notes shall have been authenticated but not delivered, any
such successor to the Trustee may adopt the certificate of authentication of any
predecessor Trustee and deliver such Notes so authenticated; and, in case at
that time any of the Notes shall not have been authenticated, any successor to
the Trustee may authenticate such Notes either in the name of any predecessor
hereunder or in the name of the successor Trustee; and in all such cases such
certificate shall have the full force and effect that this Indenture provides
for the certificate of authentication of the Trustee; provided, that the right
to adopt the certificate of authentication of any predecessor Trustee or to
authenticate Notes in the name of any predecessor Trustee shall apply only to
its successor or successors by merger, conversion or consolidation.
Section 7.13 Preferential Collection of Claims Against the Company. The
Trustee shall comply with the provisions of Section 311 of the TIA.
Section 7.14 Reports by the Trustee. (a) The Trustee shall transmit to
Holders and other persons such reports concerning the Trustee and its actions
under this Indenture, but only as may be required pursuant to the TIA, on or
before July 15 in each year that such report is required, such reports to be
dated as of the immediately preceding May 15.
(b) A copy of each such report shall, at the time of such transmission
to Noteholders, be furnished to the Company and be filed by the Trustee with
each stock exchange upon which the Notes are listed and also with the SEC. The
Company agrees to notify the Trustee when and as the Notes become admitted to
trading on any national securities exchange.
Section 7.15 Trustee to Give Notice of Default, But May Withhold in Certain
Circumstances. The Trustee shall transmit to the Noteholders, as the names and
addresses of such Holders appear on the Note register, notice by mail of all
Events of Default which have occurred and which the Trustee has received notice
of or is required to take notice of pursuant to Section 7.02 (j), such notice to
be transmitted within 90 days after the occurrence thereof, unless such defaults
shall have been cured before the giving of such notice; provided that, except in
the case of an Event of Default in the payment of the principal of, interest on,
or other similar obligation with respect to, any of the Notes, the Trustee shall
be protected in withholding such notice if and so long as the board of
directors, the executive committee, or a trust committee of directors or
trustees and/or Responsible Officers of the Trustee in good faith determines
that the withholding of such notice is in the best interests of the Noteholders.
ARTICLE 8
DISCHARGE OF INDENTURE
Section 8.01 Discharge of Liability on Notes. When the Company delivers to
the Trustee all outstanding Notes (other than Notes replaced pursuant to Section
2.07) for cancellation, this Indenture shall, subject to Section 7.06, cease to
be of further effect. In addittion, when (i) all outstanding Notes will become
due and payable within 60 days of their Stated Maturity or (ii) all outstanding
Notes are scheduled for redemption within 60 days and, in each case, the Company
deposits with the Trustee cash or Cash Equivalents sufficient to pay all amounts
due and owing on all outstanding Notes (other than Notes replaced pursuant to
Section 2.07) for the purpose of making such principal or redemption payment,
and if in any case the Company pays all other sums payable hereunder by the
Company, then (1) after such time but prior to the Stated Maturity Date or
Redemption Date, as applicable, the Company shall be irrevocably released from
its obligations under any covenant or obligation contained in Sections 3.08,
2.14, 4.02 through 4.14, Section 5.01 and Section 6.01(c), (d), (e), (f), (g)
and (i) of this Indenture and (2) from and after the Stated Maturity Date or
Redemption Date, as applicable, this Indenture shall, subject to Section 7.06,
cease to be of further effect. The Trustee shall join in the execution of a
document prepared by the Company acknowledging satisfaction and discharge of
this Indenture on demand of the Company accompanied by an Officers' Certificate
and Opinion of Counsel and at the cost and expense of the Company.
Section 8.02 Repayment of the Company. The Trustee and the Paying Agent
shall return to the Company upon written request any money or securities held by
them for the payment of any amount with respect to the Notes that remains
unclaimed for two years, subject to applicable unclaimed property law. After
return to the Company, Holders entitled to the money or securities must look to
the Company for payment as general creditors unless an applicable abandoned
property law designates another person and the Trustee and the Paying Agent
shall have no further liability to the Noteholders with respect to such money or
securities for that period commencing after the return thereof.
ARTICLE 9
AMENDMENTS
Section 9.01 Without Consent of Holders. The Company and the Trustee may
amend this Indenture or the Notes without the consent of any Noteholder for the
purposes of, among other things:
(a) adding to the Company's covenants for the benefit of the Holders;
(b) surrendering any right or power conferred upon the Company;
(c) providing for conversion rights of Holders if any reclassification
or change of Series B Preferred Stock or Common Stock or any consolidation,
merger or sale of all or substantially all of the Company's assets occurs;
(d) reducing the Conversion Price, provided that the reduction will
not adversely affect the interests of Holders in any material respect;
(e) complying with the requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the TIA;
(f) curing any ambiguity, omission, inconsistency or correcting or
supplementing any defective provision contained in this Indenture;
(g) complying with Article 5; or
(h) adding or modifying any other provisions which the Company and the
Trustee may deem necessary or desirable and which will not adversely affect the
interests of the Holders.
Section 9.02 With Consent of Holders. With the written consent of the
Holders of at least a majority in aggregate principal amount of the Notes at the
time outstanding, including consents obtained in connection with a purchase of
or tender offer or exchange offer for the Notes, or by the adoption of a
resolution at a meeting of Holders at which a quorum is present by at least a
majority in aggregate principal amount of the Notes represented at the meeting,
the Company and the Trustee may modify and amend this Indenture or the Notes and
noncompliance by the Company may be waived. However, without the consent of each
Noteholder affected, an amendment to this Indenture or the Notes may not:
(a) change the maturity of the principal of or any installment of
interest on any Note (including any payment of Registration Delay Payments (as
that term is defined in the Registration Rights Agreement), if any);
(b) reduce the principal amount of, or premium, if any, or interest on
(including any payment of Registration Delay Payments any Note;
(c) reduce the Interest Rate or interest (including Registration Delay
Payments (as that term is defined in the Registration Rights Agreement), if
any)) on any Note;
(d) change the currency of payment of principal of, premium, if any,
or interest of any Note;
(e) impair the right to institute suit for the enforcement of any
payment on or with respect to, or conversion of, any Note; or
(f) reduce the percentage in aggregate principal amount of Notes
outstanding necessary to modify or amend this Indenture or to waive any past
default.
It shall not be necessary for the consent of the Holders under this Section
9.02 to approve the particular form of any proposed amendment, but it shall be
sufficient if such consent approves the substance thereof.
After an amendment under this Section 9.02 becomes effective, the Company
shall mail to each Holder a notice briefly describing the amendment.
Section 9.03 Compliance with Trust Indenture Act. Every supplemental
indenture executed pursuant to this Article shall comply with the TIA.
Section 9.04 Revocation and Effect of Consents, Waivers and Actions. Until
an amendment, waiver or other action by Holders becomes effective, a consent
thereto by a Holder of a Note hereunder is a continuing consent by the Holder
and every subsequent Holder of that Note or portion of the Note that evidences
the same obligation as the consenting Holder's Note, even if notation of the
consent, waiver or action is not made on the Note. However, any such Holder or
subsequent Holder may revoke the consent, waiver or action as to such Holder's
Note or portion of the Note if the Trustee receives the notice of revocation
before the date the amendment, waiver or action becomes effective. After an
amendment, waiver or action becomes effective, it shall bind every Noteholder.
Section 9.05 Notation on or Exchange of Notes. Notes authenticated and
delivered after the execution of any supplemental indenture pursuant to this
Article may, and shall if required by the Trustee, bear a notation in form
approved by the Trustee as to any matter provided for in such supplemental
indenture. If the Company shall so determine, new Notes so modified as to
conform, in the opinion of the Board of Directors, to any such supplemental
indenture may be prepared and executed by the Company and authenticated and
delivered by the Trustee in exchange for outstanding Notes.
Section 9.06 Trustee to Sign Supplemental Indentures. The Trustee shall
sign any supplemental indenture authorized pursuant to this Article 9 if the
amendment contained therein does not, in the good faith opinion of the Trustee,
adversely affect the rights, duties, liabilities, protections, privileges,
indemnities or immunities of the Trustee. If it does, the Trustee may, but need
not, sign such supplemental indenture. In signing such supplemental indenture
the Trustee shall be entitled to receive, and (subject to the provisions of
Section 7.01) shall be fully protected in relying upon, an Officers' Certificate
and an Opinion of Counsel stating that such amendment is authorized or permitted
by this Indenture and complies with the TIA.
Section 9.07 Effect of Supplemental Indentures. Upon the execution of any
supplemental indenture under this Article, this Indenture shall be modified in
accordance therewith, and such supplemental indenture shall form a part of this
Indenture for all purposes; and every Holder of Notes theretofore or thereafter
authenticated and delivered hereunder shall be bound thereby.
ARTICLE 10
CONVERSION
Section 10.01 Conversion Rights and Initial Price. The Notes are
convertible, at the option of the holder prior to maturity, from and after the
earlier of (i) the New Conversion Rights Date, or (ii) the B Conversion Date as
set forth below:
(a) In the event that the B Conversion Date has occurred but not the
New Conversion Rights Date, the Notes shall only convertible into duly
authorized, fully paid and non-assessable shares of the Series B Preferred
stock, and holders of the Notes may convert any outstanding Notes, or portions
thereof, into the Series B Preferred Stock, at a conversion rate of that shall
be 2.083 shares of Series B Preferred Stock per $1,000 principal amount of
Notes. The shares of Series B Preferred Stock will be issuable only by
certificate in definitive form to any such holder;
(b) From and after the New Conversion Rights Date, the Notes shall be
convertible only into duly authorized, fully paid and non-assessable shares of
Common Stock at an initial conversion price of $0.65 per share of common stock.
The initial conversion price provides an initial conversion rate of 1538.462
shares of Common Stock per $1,000 principal amount of Notes (subject to
adjustment as set forth in Section 10.04 below). Except as described
hereinafter, no payment or other adjustment will be made on conversion of any
Notes for interest accrued thereon or for dividends on Common Stock.
Section 10.02 Exercise of Conversion Right. To exercise the conversion
right, the Holder of any Note to be converted shall surrender such Note duly
endorsed or assigned to the Company or in blank, at the office of any Conversion
Agent, accompanied by a duly signed conversion notice substantially in the form
attached to the Note to the Company stating that the Holder elects to convert
such Note or, if less than the entire principal amount thereof is to be
converted, the portion thereof to be converted.
Notes surrendered for conversion during the period from the close of
business on any Regular Record Date to the opening of business on the next
succeeding Interest Payment Date shall be accompanied by payment in New York
Clearing House funds or other funds acceptable to the Company of an amount equal
to the interest to be received on such Interest Payment Date on the principal
amount of Notes being surrendered for conversion. No such payment shall be
required upon surrender for conversion if the Notes so surrendered have been
called for redemption with a Redemption Date that occurs during the period from
the close of business on any Regular Record Date to the close of business on the
third Business Day after the Interest Payment Date next succeeding such Regular
Record Date.
Notes shall be deemed to have been converted immediately prior to the close
of business on the day of surrender of such Notes for conversion in accordance
with the foregoing provisions, and at such time the rights of the Holders of
such Notes as Holders shall cease, and the Person or Persons entitled to receive
the Series B Preferred Stock or Common Stock, as the case may be, issuable upon
conversion shall be treated for all purposes as the record holder or holders of
such Series B Preferred Stock or Common Stock at such time. As promptly as
practicable on or after the conversion date, the Company shall cause to be
issued and delivered to such Conversion Agent a certificate or certificates for
the number of full shares of Series B Preferred Stock or Common Stock issuable
upon conversion, together with payment in lieu of any fraction of a share as
provided in Section 10.03 hereof.
In the case of any Note which is converted in part only, upon such
conversion the Company shall execute and the Trustee shall authenticate and
deliver to the Holder thereof, at the expense of the Company, a new Note or
Notes of authorized denominations in aggregate principal amount equal to the
unconverted portion of the principal amount of such Notes.
If shares of Series B Preferred Stock or Common Stock, as the case may be,
to be issued upon conversion of a Restricted Note, or securities to be issued
upon conversion of a Restricted Note in part only, are to be registered in a
name other than that of the Holder of such Restricted Note, such Holder must
deliver to the Conversion Agent a certificate in substantially the form set
forth in the form of Note set forth in Exhibit A annexed hereto, dated the date
of surrender of such Restricted Note and signed by such Holder, as to compliance
with the restrictions on transfer applicable to such Restricted Note. Neither
the Trustee nor any Conversion Agent, Registrar or Transfer Agent shall be
required to register in a name other than that of the Holder shares of Series B
Preferred Stock, Common Stock or Notes issued upon conversion of any such
Restricted Note not so accompanied by a properly completed certificate.
The Company hereby initially appoints the Trustee as the Conversion Agent.
Section 10.03 Fractions of Shares. No fractional shares of Series B
Preferred Stock or Common Stock, as the case may be, shall be issued upon
conversion of any Note or Notes. If more than one Note shall be surrendered for
conversion at one time by the same Holder, the number of full shares which shall
be issued upon conversion thereof shall be computed on the basis of the
aggregate principal amount of the Notes (or specified portions thereof) so
surrendered. Instead of any fractional share of Series B Preferred Stock or
Common Stock, as the Case may be, which would otherwise be issued upon
conversion of any Note or Notes (or specified portions thereof), the Company
shall pay a cash adjustment in respect of such fraction (calculated to the
nearest one-100th of a share) in an amount equal to the same fraction of the
Conversion Price at the time of such payment.
Section 10.04 Adjustment of Conversion Price. The Conversion Price shall be
subject to adjustments, calculated by the Company, from time to time as follows:
(a) In case the Company shall hereafter pay a dividend or make a
distribution to all holders of the outstanding Common Stock in shares of Common
Stock, the Conversion Price in effect at the opening of business on the date
following the date fixed for the determination of stockholders entitled to
receive such dividend or other distribution shall be reduced by multiplying such
Conversion Price by a fraction:
(i) the numerator of which shall be the number of shares of
Common Stock outstanding at the close of business on the Record Date
(as defined in Section 10.4(g)) fixed for such determination, and
(ii) the denominator of which shall be the sum of such
number of shares and the total number of shares constituting such
dividend or other distribution.
Such reduction shall become effective immediately after the opening of business
on the day following the Record Date. If any dividend or distribution of the
type described in this Section 10.04(a) is declared but not so paid or made, the
Conversion Price shall again be adjusted to the Conversion Price which would
then be in effect if such dividend or distribution had not been declared.
(b) In case the outstanding shares of Common Stock shall be subdivided
into a greater number of shares of Common Stock, the Conversion Price in effect
at the opening of business on the day following the day upon which such
subdivision becomes effective shall be proportionately reduced, and conversely,
in case outstanding shares of Common Stock shall be combined into a smaller
number of shares of Common Stock, the Conversion Price in effect at the opening
of business on the day following the day upon which such combination becomes
effective shall be proportionately increased, such reduction or increase, as the
case may be, to become effective immediately after the opening of business on
the day following the day upon which such subdivision or combination becomes
effective.
(c) In case the Company shall issue rights, options or warrants (other
than pursuant to the Rights Plan) and other than any rights, options or warrants
referred to in Section 10.04(d) 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 (or having a
conversion price per share) less than the lower of the Current Market Price (as
defined in Section 10.04(g)) or the Conversion Price then in effect (the
"APPLICABLE PRICE") on the Record Date fixed for the determination of
stockholders entitled to receive such rights, options or warrants, the
Conversion Price shall be adjusted so that the same shall equal the price
determined by multiplying the Conversion Price in effect at the opening of
business on the date after such Record Date by a fraction:
(i) the numerator of which shall be the number of shares of
Common Stock outstanding at the close of business on the Record Date
plus the number of shares which the aggregate offering price of the
total number of shares so offered for subscription or purchase (or the
aggregate conversion price of the convertible securities so offered)
would purchase at the Applicable Price, and
(ii) the denominator of which shall be the number of shares
of Common Stock outstanding on the close of business on the Record
Date plus the total number of additional shares of Common Stock so
offered for subscription or purchase (or into which the convertible
securities so offered are convertible).
Such adjustment shall become effective immediately after the opening of business
on the day following the Record Date fixed for determination of stockholders
entitled to receive such rights, options or warrants. To the extent that shares
of Common Stock (or securities convertible into Common Stock) are not delivered
pursuant to such rights, options or warrants, upon the expiration or termination
of such rights, options or warrants the Conversion Price shall be readjusted to
the Conversion Price which would then be in effect had the adjustments made upon
the issuance of such rights, options or warrants been made on the basis of the
delivery of only the number of shares of Common Stock (or securities convertible
into Common Stock) actually delivered. In the event that such rights, options or
warrants are not so issued, the Conversion Price shall again be adjusted to be
the Conversion Price which would then be in effect if such date fixed for the
determination of stockholders entitled to receive such rights, options or
warrants had not been fixed. In determining whether any rights, options or
warrants entitle the holders to subscribe for or purchase shares of Common Stock
at less than the Applicable Price, and in determining the aggregate offering
price of such shares of Common Stock, there shall be taken into account any
consideration received for such rights, options or warrants, the value of such
consideration if other than cash, to be determined by the Board of Directors.
(d) In case the Company shall, by dividend or otherwise, distribute to
all holders of its Common Stock shares of any class of Capital Stock of the
Company or the Capital Stock of any Subsidiary of the Company (other than any
dividends or distributions to which Section 10.04(a) applies) or evidences of
its Indebtedness or other assets, including securities, but excluding (i) any
rights, options or warrants referred to in Section 10.04(c), (ii) any dividends
or distributions in connection with a reclassification, change, merger,
consolidation, statutory share exchange, combination, sale or conveyance to
which Section 10.11 hereof applies and (iii) dividends and distributions paid
exclusively in cash (the securities described in foregoing clauses (i), (ii) and
(iii) hereinafter in this Section 10.04(d) called the "EXCLUDED SECURITIES"),
then, in each such case, subject to the second succeeding paragraph of this
Section 10.04(d), the Conversion Price shall be adjusted so that the same shall
be equal to the price determined by multiplying the Conversion Price in effect
immediately prior to the close of business on the Record Date (as defined in
Section 10.04(g)) with respect to such distribution by a fraction:
(i) the numerator of which shall be the Applicable Price on
such date less the Fair Market Value on such date of the portion of
the securities so distributed (other than excluded securities)
applicable to one share of Common Stock (determined on the basis of
the number of shares of the Common Stock outstanding on the Record
Date), and
(ii) the denominator of which shall be such Applicable
Price.
Such reduction shall become effective immediately prior to the opening of
business on the day following the Record Date. However, in the event that the
then Fair Market Value of the portion of the securities so distributed (other
than excluded securities) applicable to one share of Common Stock is equal to or
greater than the Applicable Price on the Record Date or , in lieu of the
foregoing adjustment, adequate provision shall be made so that each Holder shall
have the right to receive upon conversion of a Note (or any portion thereof) the
amount of securities so distributed (other than excluded securities) such Holder
would have received had such Holder converted such Note (or portion thereof)
immediately prior to such Record Date. In the event that such dividend or
distribution is not so paid or made, the Conversion Price shall again be
adjusted to be the Conversion Price which would then be in effect if such
dividend or distribution had not been declared.
If the Board of Directors determines the Fair Market Value of any
distribution for purposes of this Section 10.04(d) by reference to the actual or
when issued trading market for any securities comprising all or part of such
distribution (other than excluded securities), it must in doing so consider the
prices in such market over the same period (the "REFERENCE PERIOD") used in
computing the Current Market Price pursuant to Section 10.04(g) to the extent
possible, unless the Board of Directors in a Board Resolution determines in good
faith that determining the Fair Market Value during the Reference Period would
not be in the best interest of the Holder.
Rights, options or warrants distributed by the Company to all holders of
Common Stock entitling the holders thereof to subscribe for or purchase shares
of the Company's Capital Stock (either initially or under certain
circumstances), which rights, options or warrants, until the occurrence of a
specified event or events ("TRIGGER EVENT"):
(i) are deemed to be transferred with such shares of Common
Stock;
(ii) are not exercisable; and
(iii) are also issued in respect of future issuances of
Common Stock,
shall be deemed not to have been distributed for purposes of this
Section10.04(d) (and no adjustment to the Conversion Price under this Section
10.04(d) will be required) until the occurrence of the earliest Trigger Event.
If such right or warrant is subject to subsequent events, upon the occurrence of
which such right or warrant shall become exercisable to purchase different
securities, evidences of Indebtedness or other assets or entitle the holder to
purchase a different number or amount of the foregoing or to purchase any of the
foregoing at a different purchase price, then the occurrence of each such event
shall be deemed to be the date of issuance and record date with respect to a new
right or warrant (and a termination or expiration of the existing right or
warrant without exercise by the holder thereof). In addition, in the event of
any distribution (or deemed distribution) of rights, options or warrants, or any
Trigger Event or other event (of the type described in the preceding sentence)
with respect thereto, that resulted in an adjustment to the Conversion Price
under this Section 10.04(d):
(iv) in the case of any such rights, options or warrants
which shall all have been redeemed or repurchased without exercise by
any holders thereof, the Conversion Price shall be readjusted upon
such final redemption or repurchase to give effect to such
distribution or Trigger Event, as the case may be, as though it were a
cash distribution, equal to the per share redemption or repurchase
price received by a holder of Common Stock with respect to such rights
or warrant (assuming such holder had retained such rights, options or
warrants), made to all holders of Common Stock as of the date of such
redemption or repurchase, and
(v) in the case of such rights, options or warrants all of
which shall have expired or been terminated without exercise, the
Conversion Price shall be readjusted as if such rights, options and
warrants had never been issued.
For purposes of this Section 10.04(d) and Sections 10.04(a), 10.04(b) and
10.04(c), any dividend or distribution to which this Section 10.04(d) is
applicable that also includes shares of Common Stock, a subdivision or
combination of Common Stock to which Section 10.04(b) applies, or rights,
options or warrants to subscribe for or purchase shares of Common Stock to which
Section10.04(c) applies (or any combination thereof), shall be deemed instead to
be:
(vi) a dividend or distribution of the evidences of
Indebtedness, assets, shares of Capital Stock, rights, options or
warrants other than such shares of Common Stock, such subdivision or
combination or such rights, options or warrants to which Sections
10.04(a), 10.04(b) and 10.04(c) apply, respectively (and any
Conversion Price reduction required by this Section 10.04(d) with
respect to such dividend or distribution shall then be made),
immediately followed by
(vii) a dividend or distribution of such shares of Common
Stock, such subdivision or combination or such rights, options or
warrants (and any further Conversion Price reduction required by
Sections 10.04(a), 10.04(b) and 10.04(c) with respect to such dividend
or distribution shall then be made), except:
(A) the Record Date of such dividend or
distribution shall be substituted as (x) "the date fixed for
the determination of stockholders entitled to receive such
dividend or other distribution", "Record Date fixed for such
determinations" and "Record Date" within the meaning of
Section 10.04(a), (y) "the day upon which such subdivision
becomes effective" and "the day upon which such combination
becomes effective" within the meaning of Section 10.04(b),
and (z) as "the date fixed for the determination of
stockholders entitled to receive such rights, options or
warrants", "the Record Date fixed for the determination of
the stockholders entitled to receive such rights, options or
warrants" and such "Record Date" within the meaning of
Section 10.04(c), and
(B) any shares of Common Stock included in such
dividend or distribution shall not be deemed "outstanding at
the close of business on the date fixed for such
determination" within the meaning of Section 10.04(a) and
any reduction or increase in the number of shares of Common
Stock resulting from such subdivision or combination shall
be disregarded in connection with such dividend or
distribution.
(e) In case the Company shall, by dividend or otherwise, distribute to
all holders of its Common Stock cash (excluding any cash that is distributed
upon a reclassification, change, merger, consolidation, statutory share
exchange, combination, sale or conveyance to which Section 10.11 hereof applies
or as part of a distribution referred to in Section 10.04(d) hereof), in an
aggregate amount that, combined together with: (1) the aggregate amount of any
other such distributions to all holders of Common Stock made exclusively in cash
within the 12 months preceding the date of payment of such distribution, and in
respect of which no adjustment pursuant to this Section 10.04(e) has been made,
and (2) the aggregate of any cash plus the Fair Market Value of consideration
payable in respect of any tender offer or exchange offer by the Company or any
of its Subsidiaries for all or any portion of the Common Stock concluded within
the 12 months preceding the date of such distribution, and in respect of which
no adjustment pursuant to Section 10.04(f) hereof has been made, exceeds 10% of
the product of the Applicable Price on the Record Date with respect to such
distribution times the number of shares of Common Stock outstanding on such
date, then and in each such case, immediately after the close of business on
such date, the Conversion Price shall be reduced so that the same shall equal
the price determined by multiplying the Conversion Price in effect immediately
prior to the close of business on such Record Date by a fraction:
(i) the numerator of which shall be equal to the lower of
the Applicable Price on the Record Date less an amount equal to the
quotient of (x) the excess of such combined amount over such 10% and
(y) the number of shares of Common Stock outstanding on the Record
Date, and
(ii) the denominator of which shall be equal to the
Applicable Price on such date.
However, in the event that the then Fair Market Value of the portion of the
securities so distributed (other than excluded securities) applicable to one
share of Common Stock is equal to or greater than the Applicable Price on the
Record Date, in lieu of the foregoing adjustment, adequate provision shall be
made so that each Holder shall have the right to receive upon conversion of a
Note (or any portion thereof) the amount of cash such Holder would have received
had such Holder converted such Note (or portion thereof) immediately prior to
such Record Date. In the event that such dividend or distribution is not so paid
or made, the Conversion Price shall again be adjusted to be the Conversion Price
which would then be in effect if such dividend or distribution had not been
declared.
(f) In case a tender offer or exchange offer made by the Company or
any of its Subsidiaries for all or any portion of the Common Stock shall expire
and such tender offer or exchange offer (as amended upon the expiration thereof)
shall require the payment to stockholders (based on the acceptance (up to any
maximum specified in the terms of the tender offer or exchange offer) of
Purchased Shares (as defined below)) of an aggregate consideration having a Fair
Market Value that combined together with:
(i) the aggregate of the cash plus the Fair Market Value, as
of the expiration of such tender offer or exchange offer, of
consideration payable in respect of any other tender offers or
exchange offers, by the Company or any of its Subsidiaries for all or
any portion of the Common Stock expiring within the 12 months
preceding the expiration of such tender offer or exchange offer and in
respect of which no adjustment pursuant to this Section 10.04(f) has
been made, and
(ii) the aggregate amount of any distributions to all
holders of the Company's Common Stock made exclusively in cash within
12 months preceding the expiration of such tender offer or exchange
offer and in respect of which no adjustment pursuant to Section
10.04(e) has been made, exceeds 10% of the product of the Applicable
Price as of the last time (the "EXPIRATION TIME") tenders or exchanges
could have been made pursuant to such tender offer or exchange offer
(as it may be amended) times the number of shares of Common Stock
outstanding (including any tendered shares or exchanged shares) on the
Expiration Time, then, and in each such case, immediately prior to the
opening of business on the day after the date of the Expiration Time,
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 close of business on the date of the Expiration
Time by a fraction:
(A) the numerator of which shall be the number of
shares of Common Stock outstanding (including any tendered
or exchanged shares) at the Expiration Time multiplied by
the Applicable Price on the Trading Day next succeeding the
Expiration Time, and
(B) the denominator shall be the sum of (x) the
Fair Market Value of the aggregate consideration payable to
stockholders based on the acceptance (up to any maximum
specified in the terms of the tender offer or exchange
offer) of all shares validly tendered or exchanged and not
withdrawn as of the Expiration Time (the shares deemed so
accepted, up to any such maximum, being referred to as the
"PURCHASED SHARES") and (y) the product of the number of
shares of Common Stock outstanding (less any Purchased
Shares) on the Expiration Time and the Applicable Price on
the Trading Day next succeeding the Expiration Time.
Such reduction (if any) shall become effective immediately prior to the opening
of business on the day following the Expiration Time. In the event that the
Company is obligated to purchase shares pursuant to any such tender offer or
exchange offer, but the Company is permanently prevented by applicable law from
effecting any such purchases or all such purchases are rescinded, the Conversion
Price shall again be adjusted to be the Conversion Price which would then be in
effect if such tender offer or exchange offer had not been made. If the
application of this Section 10.04(f) to any tender offer or exchange offer would
result in an increase in the Conversion Price, no adjustment shall be made for
such tender offer or exchange offer under this Section 10.04(f).
(g) For purposes of this Section 10.04, the following terms shall have
the meanings indicated:
(i) "CURRENT MARKET PRICE" shall mean the average of the
daily Closing Prices per share of Common Stock for the ten consecutive
Trading Days immediately prior to the date in question; provided,
however, that if:
(A) the "ex" date (as hereinafter defined) for any
event (other than the issuance or distribution requiring
such computation) that requires an adjustment to the
Conversion Price pursuant to Section 10.04(a), (b), (c),
(d), (e) or (f) occurs during such ten consecutive Trading
Days, the Closing Price for each Trading Day prior to the
"ex" date for such other event shall be adjusted by
multiplying such Closing Price by the same fraction by which
the Conversion Price is so required to be adjusted as a
result of such other event;
(B) the "ex" date for any event (other than the
issuance or distribution requiring such computation) that
requires an adjustment to the Conversion Price pursuant to
Section 10.04(a), (b), (c), (d), (e) or (f) occurs on or
after the "ex" date for the issuance or distribution
requiring such computation and prior to the day in question,
the Closing Price for each Trading Day on and after the "ex"
date for such other event shall be adjusted by multiplying
such Closing Price by the reciprocal of the fraction by
which the Conversion Price is so required to be adjusted as
a result of such other event; and
(C) the "ex" date for the issuance or distribution
requiring such computation is prior to the day in question,
after taking into account any adjustment required pursuant
to clause (i) or (ii) of this proviso, the Closing Price for
each Trading Day on or after such "ex" date shall be
adjusted by adding thereto the amount of any cash and the
Fair Market Value, whose determination shall be conclusive
and set forth in a Board Resolution) of the evidences of
indebtedness, shares of Capital Stock or assets being
distributed applicable to one share of Common Stock as of
the close of business on the day before such "ex" date.
For purposes of any computation under Section 10.04(f), the Current
Market Price of the Common Stock on any date shall be deemed to be the
average of the daily Closing Prices per share of Common Stock for such
day and the next two succeeding Trading Days; provided, however, that
if the "ex" date for any event (other than the tender offer requiring
such computation) that requires an adjustment to the Conversion Price
pursuant to Section 10.04(a), (b), (c), (d), (e) or (f) occurs on or
after the Expiration Time for the tender or exchange offer requiring
such computation and prior to the day in question, the Closing Price
for each Trading Day on and after the "ex" date for such other event
shall be adjusted by multiplying such Closing Price by the reciprocal
of the fraction by which the Conversion Price is so required to be
adjusted as a result of such other event. For purposes of this
paragraph, the term "ex" date, when used:
(D) with respect to any issuance or distribution,
means the first date on which the Common Stock trades
regular way on the relevant exchange or in the relevant
market from which the Closing Price was obtained without the
right to receive such issuance or distribution;
(E) with respect to any subdivision or combination
of shares of Common Stock, means the first date on which the
Common Stock trades regular way on such exchange or in such
market after the time at which such subdivision or
combination becomes effective, and
(F) with respect to any tender or exchange offer,
means the first date on which the Common Stock trades
regular way on such exchange or in such market after the
Expiration Time of such offer.
Notwithstanding the foregoing, whenever successive adjustments to the
Conversion Price are called for pursuant to this Section 10.04, such
adjustments shall be made to the Current Market Price as may be
necessary or appropriate to effectuate the intent of this Section
10.04 and to avoid unjust or inequitable results as determined in good
faith by the Board of Directors.
(ii) "RECORD DATE" shall mean, with respect to any dividend,
distribution or other transaction or event in which the holders of
Common Stock have the right to receive any cash, securities or other
property or in which the Common Stock (or other applicable security)
is exchanged for or converted into any combination of cash, securities
or other property, the date fixed for determination of stockholders
entitled to receive such cash, securities or other property (whether
such date is fixed by the Board of Directors or by statute, contract
or otherwise).
(h) The Company may make such reductions in the Conversion Price, in
addition to those required by Section 10.04(a), (b), (c), (d), (e) or (f), as
the Board of Directors considers to be advisable to avoid or diminish any income
tax to holders of Common Stock (including any securities convertible into shares
of Common Stock) or rights to purchase Common Stock resulting from any dividend
or distribution of stock (or rights to acquire stock) or from any event treated
as such for income tax purposes.
To the extent permitted by applicable law, the Company from time to time
may reduce the Conversion Price by any amount for any period of time if the
period is at least 20 days and the reduction is irrevocable during the period
and the Board of Directors determines in good faith that such reduction would be
in the best interests of the Company, which determination shall be conclusive
and set forth in a Board Resolution. Whenever the Conversion Price is reduced
pursuant to the preceding sentence, the Company shall mail to the Trustee and
each Holder at the address of such Holder as it appears in the Register a notice
of the reduction at least 15 days prior to the date the reduced Conversion Price
takes effect, and such notice shall state the reduced Conversion Price and the
period during which it will be in effect.
(i) No adjustment in the Conversion Price shall be required unless
such adjustment would require an increase or decrease of at least 1% in the
Conversion Price then in effect; provided, however, that any adjustments which
by reason of this Section 10.04(i) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All calculations
under this Article 10 shall be made by the Company and shall be made to the
nearest cent or to the nearest one hundredth of a share, as the case may be. No
adjustment need be made for a change in the par value or no par value of the
Common Stock.
(j) In any case in which this Section 10.04 provides that an
adjustment shall become effective immediately after a Record Date for an event,
the Company may defer until the occurrence of such event (i) issuing to the
Holder of any Note converted after such Record Date and before the occurrence of
such event the additional shares of Series B Preferred Stock issuable upon such
conversion by reason of the adjustment required by such event over and above the
Series B Preferred Stock issuable upon such conversion before giving effect to
such adjustment and (ii) paying to such holder any amount in cash in lieu of any
fraction pursuant to Section 10.03 hereof.
(k) For purposes of this Section 10.04, the number of shares of Common
Stock at any time outstanding shall not include shares held in the treasury of
the Company but shall include shares issuable in respect of scrip certificates
issued in lieu of fractions of shares of Common Stock. The Company will not pay
any dividend or make any distribution on shares of Common Stock held in the
treasury of the Company.
(l) If the distribution date for the rights provided in the Rights
Plan occurs prior to the date a Note is converted, the Holder of the Note who
converts such Note after the distribution date is not entitled to receive the
rights that would otherwise be attached (but for the date of conversion) to the
shares of Common Stock received upon such conversion; provided, however, that an
adjustment shall be made to the Conversion Price pursuant to Section 10.04(b) as
if the rights were being distributed to the common stockholders of the Company
immediately prior to such conversion. If such an adjustment is made and the
rights are later redeemed, invalidated or terminated, then a corresponding
reversing adjustment shall be made to the Conversion Price, on an equitable
basis, to take account of such event.
Section 10.05 Notice of Adjustments of Conversion Price. Whenever the
Conversion Price is adjusted as herein provided (other than in the case of an
adjustment pursuant to the second paragraph of Section 10.04(h) for which the
notice required by such paragraph has been provided), the Company shall promptly
file with the Trustee and any Conversion Agent other than the Trustee an
Officers' Certificate setting forth the adjusted Conversion Price and showing in
reasonable detail the facts upon which such adjustment is based. Promptly after
delivery of such Officers' Certificate, the Company shall prepare a notice
stating that the Conversion Price has been adjusted and setting forth the
adjusted Conversion Price and the date on which each adjustment becomes
effective, and shall mail such notice to each Holder at the address of such
Holder as it appears in the Register within 20 days of the effective date of
such adjustment. Failure to deliver such notice shall not effect the legality or
validity of any such adjustment.
Section 10.06 Notice Prior to Certain Actions. In case at any time after
the date hereof:
(a) the Company shall declare a dividend (or any other distribution)
on its Common Stock payable otherwise than in cash out of its capital surplus or
its consolidated retained earnings;
(b) the Company shall authorize the granting to the holders of its
Common Stock of rights, options or warrants to subscribe for or purchase any
shares of Capital Stock of any class (or of securities convertible into shares
of Capital Stock of any class) or of any other rights;
(c) there shall occur any reclassification of the Common Stock of the
Company (other than a subdivision or combination of its outstanding Common
Stock, a change in par value, a change from par value to no par value or a
change from no par value to par value), or any merger, consolidation, statutory
share exchange or combination to which the Company is a party and for which
approval of any shareholders of the Company is required, or the sale, transfer
or conveyance of all or substantially all of the assets of the Company; or
(d) there shall occur the voluntary or involuntary dissolution,
liquidation or winding up of the Company;
the Company shall cause to be filed at each office or agency maintained for the
purpose of conversion of Notes pursuant to Section 4.05 hereof, and shall cause
to be provided to the Trustee and all Holders in accordance with Section 11.02
hereof, at least 20 days (or 10 days in any case specified in clause (a) or (b)
above) prior to the applicable record or effective date hereinafter specified, a
notice stating:
(i) the date on which a record is to be taken for the
purpose of such dividend, distribution, rights, options or warrants,
or, if a record is not to be taken, the date as of which the holders
of Common Stock of record to be entitled to such dividend,
distribution, rights, options or warrants are to be determined, or
(ii) the date on which such reclassification, merger,
consolidation, statutory share exchange, combination, sale, transfer,
conveyance, dissolution, liquidation or winding up is expected to
become effective, and the date as of which it is expected that holders
of Common Stock of record shall be entitled to exchange their shares
of Common Stock for securities, cash or other property deliverable
upon such reclassification, merger, consolidation, statutory share
exchange, sale, transfer, dissolution, liquidation or winding up.
Neither the failure to give such notice nor any defect therein shall affect
the legality or validity of the proceedings or actions described in clauses (a)
through (d) of this Section 10.06.
Section 10.07 Company to Reserve Series B Preferred Stock and Common Stock.
(a) The Company shall at all times use its best efforts to reserve and
keep available, free from preemptive rights, out of its authorized but unissued
Series B Preferred Stock and Common Stock, for the purpose of effecting the
conversion of Notes and the Series B Preferred Stock, (i) 130% of the full
number of shares of fully paid and nonassessable Series B Preferred stock then
issuable upon the conversion of all Notes outstanding and (ii) 130% of the full
number of shares of fully paid and nonassessable Common stock then issuable upon
conversion of all shares of Series B Preferred Stock into which the Notes are
then convertible or, after the New Rights Conversion Date, the Common Stock into
which the Notes are then convertible (collectively, the "REQUIRED RESERVE
AMOUNT"). The initial number of shares of Series B Preferred Stock and Common
Stock reserved for conversions of the Notes and Series B Preferred Stock and
each increase in the number of shares so reserved shall be allocated pro rata
among the Holders based on the principal amount of the Notes held by each Holder
on the Issue Date or increase in the number of reserved shares, as the case may
be (the "AUTHORIZED SHARE ALLOCATION"). In the event that a Holder shall sell or
otherwise transfer any of such Holder's interests in any Notes, each transferee
shall be allocated a pro rata portion of such Holder's Authorized Share
Allocation. Any shares of Series B Preferred Stock and Common Stock reserved and
allocated to any Person which ceases to hold any Notes shall be allocated to the
remaining Holders of such Notes, pro rata based on the Principal Amount of the
Notes then held by such Holders.
(b) Insufficient Authorized Shares. If at any time while any of the
Notes remain outstanding the Company does not have a sufficient number of
authorized and unreserved shares of Series B Preferred Stock and Common Stock to
satisfy its obligation to reserve for issuance upon conversion of the Notes and
the Series B Preferred Stock at least a number of shares of Series B Preferred
Stock and Common Stock equal to the Required Reserve Amount (an "AUTHORIZED
SHARE FAILURE"), then the Company shall immediately take all action necessary to
increase the Company's authorized shares of Series B Preferred Stock or Common
Stock, as the case may be, to an amount sufficient to allow the Company to
reserve the Required Reserve Amount for the outstanding Notes and Series B
Preferred Stock. Without limiting the generality of the foregoing sentence, as
soon as practicable after the date of the occurrence of an Authorized Share
Failure, but in no event later than 60 days after the occurrence of such
Authorized Share Failure, the Company shall hold a meeting of its shareholders
for the approval of an increase in the number of authorized shares of Common
Stock or Series B Preferred stock, as the case may be. In connection with such
meeting, the Company shall provide each shareholder with a proxy statement and
shall use its best efforts to solicit its shareholders' approval of such
increase in authorized shares of Series B Preferred Stock or Common Stock and to
cause its board of directors to recommend to the shareholders that they approve
such proposal.
Section 10.08 Taxes on Conversions. Except as provided in the next
sentence, the Company will pay any and all taxes (other than taxes on income)
and duties that may be payable in respect of the issue or delivery of shares of
Series B Preferred Stock on conversion of Notes pursuant hereto. A Holder
delivering a Note for conversion shall be liable for and will be required to pay
any tax or duty which may be payable in respect of any transfer involved in the
issue and delivery of shares of Series B Preferred Stock in a name other than
that of the Holder of the Note or Notes to be converted, and no such issue or
delivery shall be made unless the Person requesting such issue has paid to the
Company the amount of any such tax or duty, or has established to the
satisfaction of the Company that such tax or duty has been paid.
Section 10.09 Covenant as to Series B Preferred Stock. The Company
covenants that all shares of Series B Preferred Stock which may be issued upon
conversion of Notes and all shares of Common Stock which may be issued upon
conversion of such shares of Series B Common Stock will upon issue be fully paid
and nonassessable and, except as provided in Section 10.08, the Company will pay
all taxes, liens and charges with respect to the issue thereof.
Section 10.10 Cancellation of Converted Notes. All Notes delivered for
conversion shall be delivered to the Trustee to be canceled by or at the
direction of the Trustee, which shall dispose of the same as provided in Section
2.10.
Section 10.11 Effect of Reclassification, Consolidation, Merger or Sale. If
any of following events occur, namely:
(a) any reclassification or change of the outstanding shares of Common
Stock (other than a change in par value, or from par value to no par value, or
from no par value to par value, or as a result of a subdivision or combination),
(b) any merger, consolidation, statutory share exchange or combination
of the Company with another corporation as a result of which holders of Common
Stock shall be entitled to receive stock, securities or other property or assets
(including cash) with respect to or in exchange for such Common Stock or
(c) any sale or conveyance of the properties and assets of the Company
as, or substantially as, an entirety to any other corporation as a result of
which holders of Common Stock shall be entitled to receive stock, securities or
other property or assets (including cash) with respect to or in exchange for
such Common Stock,
the Company or the successor or purchasing corporation, as the case may be,
shall execute with the Trustee a supplemental indenture (which shall comply with
the TIA as in force at the date of execution of such supplemental indenture if
such supplemental indenture is then required to so comply) providing that such
Note shall be convertible into the kind and amount of shares of stock and other
securities or property or assets (including cash) which such Holder would have
been entitled to receive upon such reclassification, change, merger,
consolidation, statutory share exchange, combination, sale or conveyance had
such Notes been converted into Series B Preferred Stock immediately prior to
such reclassification, change, merger, consolidation, statutory share exchange,
combination, sale or conveyance assuming such holder of Series B Preferred Stock
did not exercise its rights of election, if any, as to the kind or amount of
securities, cash or other property receivable upon such reclassification,
change, merger, consolidation, statutory share exchange, combination, sale or
conveyance (provided that, if the kind or amount of securities, cash or other
property receivable upon such reclassification, change, merger, consolidation,
statutory share exchange, combination, sale or conveyance is not the same for
each share of Series B Preferred Stock in respect of which such rights of
election shall not have been exercised ("NON-ELECTING SHARE"), then for the
purposes of this Section 10.11 the kind and amount of securities, cash or other
property receivable upon such reclassification, change, merger, consolidation,
statutory share exchange, combination, sale or conveyance for each Non-Electing
Share shall be deemed to be the kind and amount so receivable per share by a
plurality of the Non-Electing Shares). Such supplemental indenture shall provide
for adjustments which shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Article 10. If, in the case of any such
reclassification, change, merger, consolidation, statutory share exchange,
combination, sale or conveyance, the stock or other securities and assets
receivable thereupon by a holder of shares of Series B Preferred Stock includes
shares of stock or other securities and assets of a corporation other than the
successor or purchasing corporation, as the case may be, in such
reclassification, change, merger, consolidation, statutory share exchange,
combination, sale or conveyance, then such supplemental indenture shall also be
executed by such other corporation and shall contain such additional provisions
to protect the interests of the Holders of the Notes as the Board of Directors
shall reasonably consider necessary by reason of the foregoing, including to the
extent practicable the provisions providing for the repurchase rights set forth
in Section 3.09 hereof.
The Company shall cause notice of the execution of such supplemental
indenture to be mailed to each Holder, at the address of such Holder as it
appears on the Register, within 20 days after execution thereof. Failure to
deliver such notice shall not affect the legality or validity of such
supplemental indenture.
The above provisions of this Section 10.11 shall similarly apply to
successive reclassifications, mergers, consolidations, statutory share
exchanges, combinations, sales and conveyances.
If this Section 10.11 applies to any event or occurrence, Section 10.04
hereof shall not apply.
Section 10.12 Adjustment for Other Distributions. If, after the Issue Date
of the Notes, the Company pays a dividend or makes a distribution to all holders
of its Common Stock consisting of Capital Stock of any class or series, or
similar Equity Interests, of or relating to a Subsidiary or other business unit
of the Company, the Conversion Price shall be adjusted in accordance with the
formula:
P' = P x 1/(1 + F/M)
where:
P' = the adjusted Conversion Price.
P = the current Conversion Price.
M = the average of the Post-Distribution Prices of the Common Stock for the
10 Trading Days commencing on and including the fifth Trading Day after the date
on which "ex-dividend trading" commences for such dividend or distribution on
the principal United States exchange or market which such securities are then
listed or quoted (the "EX-DIVIDEND DATE").
F = the Fair Market Value of the securities distributed in respect of each
share of Common Stock shall mean the number of securities distributed in respect
of each share of Common Stock multiplied by the average of the Post-Distribution
Prices of those securities distributed for the 10 Trading Days commencing on and
including the fifth Trading Day after the Ex-Dividend Date.
"POST-DISTRIBUTION PRICE" of Capital Stock or any similar equity interest
on any date means the closing per unit sale price (or, if no closing sale price
is reported, the average of the bid and ask prices or, if more than one in
either case, the average of the average bid and the average ask prices) on such
date for trading of such units on a "when issued" basis without due bills (or
similar concept) as reported in the composite transactions for the principal
United States securities exchange or market on which such Capital Stock or
equity interest is traded or, if the Capital Stock or equity interest, as the
case may be, is not listed on a United States national or regional securities
exchange or market, as reported by the National Association of Securities
Dealers Automated Quotation System or by the National Quotation Bureau
Incorporated; provided that if on any date such units have not traded on a "when
issued" basis, the Post-Distribution Price shall be the closing per unit sale
price (or, if no closing sale price is reported, the average of the bid and ask
prices or, if more than one in either case, the average of the average bid and
the average ask prices) on such date for trading of such units on a "regular
way" basis without due bills (or similar concept) as reported in the composite
transactions for the principal United States securities exchange on which such
Capital Stock or equity interest is traded or, if the Capital Stock or equity
interest, as the case may be, is not listed on a United States national or
regional securities exchange, as reported by the National Association of
Securities Dealers Automated Quotation System or by the National Quotation
Bureau Incorporated. In the absence of such quotation, the Company shall be
entitled to determine the Post-Distribution Price on the basis of such
quotations, which reflect the post-distribution value of the Capital Stock or
Equity Interests as it considers appropriate.
Section 10.13 Responsibility of Trustee for Conversion Provisions. The
Trustee, subject to the provisions of Section 7.01 hereof, and any Conversion
Agent shall not at any time be under any duty or responsibility to any Holder of
Notes to determine whether any facts exist which may require any adjustment of
the Conversion Price, or with respect to the nature or intent of any such
adjustments when made, or with respect to the method employed, or herein or in
any supplemental indenture provided to be employed, in making the same. Neither
the Trustee, subject to the provisions of Section 7.01 hereof, nor any
Conversion Agent shall be accountable with respect to the validity or value (of
the kind or amount) of any Series B Preferred Stock, or of any other securities
or property, which may at any time be issued or delivered upon the conversion of
any Note; and it or they do not make any representation with respect thereto.
Neither the Trustee, subject to the provisions of Section 7.01 hereof, nor any
Conversion Agent shall be responsible for any failure of the Company to make any
cash payment or to issue, transfer or deliver any shares of stock or share
certificates or other securities or property upon the surrender of any Note for
the purpose of conversion; and the Trustee, subject to the provisions of Section
7.01 hereof, and any Conversion Agent shall not be responsible or liable for any
failure of the Company to comply with any of the covenants of the Company
contained in this Article.
ARTICLE 11
MISCELLANEOUS
Section 11.01 Trust Indenture Act Controls. If any provision of this
Indenture limits, qualifies, or conflicts with another provision which is
required to be included in this Indenture by the TIA, the required provision
shall control.
Section 11.02 Notices. Any request, demand, authorization, notice, waiver,
consent or communication shall be in writing and delivered in person or mailed
by first-class mail, postage prepaid, addressed as follows or transmitted by
facsimile transmission (confirmed by guaranteed overnight courier) to the
following facsimile numbers:
if to the Company:
PRG-Schultz International, Inc.
600 Galleria Parkway
Suite 100
Atlanta, GA 30339-5986
Attention: General Counsel
Telephone No.: (770) 779-3900
Facsimile No.: (770) 779-3133
if to the Trustee:
U.S. Bank National Association
360 Interstate North Parkway SE
Suite 500
Atlanta, GA 30339
Attention: Paul L. Henderson, CCTS
Telephone No.: (770) 644-6806
Facsimile No.: (770) 644-6879
The Company or the Trustee by notice given to the other in the manner
provided above may designate additional or different addresses for subsequent
notices or communications.
Any notice or communication given to a Noteholder shall be mailed to the
Noteholder, by first-class mail, postage prepaid, at the Noteholder's address as
it appears on the registration books of the Registrar and shall be sufficiently
given if so mailed within the time prescribed.
Failure to mail a notice or communication to a Noteholder or any defect in
it shall not affect its sufficiency with respect to other Noteholders. If a
notice or communication is mailed in the manner provided above, it is duly
given, whether or not received by the addressee.
If the Company mails a notice or communication to the Noteholders, it shall
mail a copy to the Trustee and each Registrar, Paying Agent, Conversion Agent or
co-registrar.
Section 11.03 Communication by Holders with Other Holders. Noteholders may
communicate pursuant to TIA Section 312(b) with other Noteholders with respect
to their rights under this Indenture or the Notes. The Company, the Trustee, the
Registrar, the Paying Agent, the Conversion Agent and anyone else shall have the
protection of TIA Section 312(c).
Section 11.04 Certificate and Opinion as to Conditions Precedent. Upon any
request or application by the Company to the Trustee to take any action under
this Indenture, the Company shall furnish to the Trustee:
(a) an Officers' Certificate stating that, in the opinion of the
signers, all conditions precedent, if any, provided for in this Indenture
relating to the proposed action have been complied with; and
(b) an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent have been complied with.
Section 11.05 Statements Required in Certificate or Opinion. Each Officers'
Certificate or Opinion of Counsel with respect to compliance with a covenant or
condition provided for in this Indenture shall include:
(a) a statement that each person making such Officers' Certificate or
Opinion of Counsel has read such covenant or condition;
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such Officers'
Certificate or Opinion of Counsel are based;
(c) a statement that, in the opinion of each such person, he has made
such examination or investigation as is necessary to enable such person to
express an informed opinion as to whether or not such covenant or condition has
been complied with; and
(d) a statement that, in the opinion of such person, such covenant or
condition has been complied with.
Section 11.06 Withholding. The Company's obligations under this Indenture
and the Notes, and any Noteholder's right to receive any amounts thereunder
(including Additional Notes, Series B Preferred Stock and Common Stock), shall
be subject to all applicable withholding and reporting requirements imposed by
any governmental authority with respect thereto. Notwithstanding the foregoing,
each Noteholder shall have sole and exclusive responsibility for the
satisfaction and payment of any tax obligations imposed on it by any
governmental authority, including income, withholding and other tax obligations.
Section 11.07 Separability Clause. In case any provision in this Indenture
or in the Notes shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
Section 11.08 Rules by Trustee, Paying Agent and Registrar. The Trustee may
make reasonable rules for action by or a meeting of Noteholders. The Registrar,
the Conversion Agent and the Paying Agent may make reasonable rules for their
functions.
Section 11.09 Legal Holidays. A "LEGAL HOLIDAY" is any day other than a
Business Day. If any specified date (including a date for giving notice or
making a payment or a purchase) is a Legal Holiday, the action shall be taken on
the next succeeding day that is not a Legal Holiday, and, if the action to be
taken on such date is a payment in respect of the Notes, no interest, if any,
shall accrue for the intervening period.
Section 11.10 Governing Law. THIS INDENTURE AND THE NOTES WILL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
Section 11.11 No Recourse Against Others. A director, officer, employee or
stockholder, as such, of the Company shall not have any liability for any
obligations of the Company under the Notes or this Indenture or for any claim
based on, in respect of or by reason of such obligations or their creation. By
accepting a Note, each Noteholder shall waive and release all such liability.
The waiver and release shall be part of the consideration for the issue of the
Notes.
Section 11.12 Successors. All agreements of the Company in this Indenture
and the Notes shall bind its successor. All agreements of the Trustee in this
Indenture shall bind its successor.
Section 11.13 Multiple Originals. The parties may sign any number of copies
of this Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement. One signed copy is enough to prove this
Indenture.
IN WITNESS WHEREOF, the undersigned, being duly authorized, have executed
this Indenture on behalf of the respective parties hereto as of the date first
above written.
PRG-SCHULTZ INTERNATIONAL, INC.
By: /s/ James McCurry
-----------------------------------------
Name: James McCurry
Title: President and Chief Executive
Officer
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By: /s/ Paul L. Henderson
-----------------------------------------
Name: Paul L. Henderson
Title: Authorized Representative
EXHIBIT A-1
[FORM OF FACE OF GLOBAL NOTE]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT
NOT IN PART, TO NOMINEES OF THE DEPOSITORY TRUST COMPANY, OR TO A SUCCESSOR
THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL
NOTE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET
FORTH IN ARTICLE TWO OF THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.
A-1-1
PRG-SCHULTZ INTERNATIONAL, INC.
10% Senior Convertible Notes due 2011
CUSIP NO. [ ]
No.: 1
Issue Date: [ ], 2006
PRG-SCHULTZ INTERNATIONAL, INC. a Georgia corporation, promises to pay to
Cede & Co. or registered assigns, the principal sum of Fifty-Nine Million, Seven
Hundred Seventy-Four Thousand Four Hundred DOLLARS ($59,774,400.00) on [ ],
2011.
This Note shall bear interest as specified on the other side of this Note.
This Note is convertible as specified on the other side of this Note
Additional provisions of this Note are set forth on the other side of this
Note.
Dated: [ ], 2006 PRG-SCHULTZ INTERNATIONAL, INC.
By:
------------------------------------------
Name:
Title:
[SEAL]
Attest:
- -----------------------------------
Name:
Title:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
U.S. BANK NATIONAL ASSOCIATION,,
as Trustee, certifies that this
is one of the Notes referred to
in the within-mentioned Indenture (as
defined on the other side of this Note).
By:
--------------------------------
Authorized Signatory
Dated:
--------------------------------
[FORM OF REVERSE SIDE OF NOTE]
10% Senior Convertible Notes due 2011
Capitalized terms used herein but not defined shall have the meanings
assigned to them in the Indenture unless otherwise indicated.
1. Interest.
The Company promises to pay interest at the Interest Rate, at the Company's
option, in cash or Additional Notes on the principal amount of this Note. The
Company will pay cash interest semi-annually in arrears on March 15 and
September 15 of each year (each an "INTEREST PAYMENT DATE"), beginning on
September 15, 2006, to Holders of record at the close of business on the
preceding March 1 or September 1 (whether or not a business day) (each a
"REGULAR RECORD DATE"), as the case may be, immediately preceding such Interest
Payment Date. Interest on the Notes will accrue from the most recent date to
which interest has been paid or duly provided or, if no interest has been paid,
from the Issue Date. Interest will be computed on the basis of a 360-day year of
twelve 30-day months. The Company shall pay interest on overdue principal, or if
shares of Series B Preferred Stock or Common Stock, as the case may be (or cash
in lieu of fractional shares) in respect of a conversion of this Note in
accordance with the terms of Article 10 of the Indenture are not delivered when
due, at the rate borne by the Notes, and it shall pay interest in cash on
overdue installments of interest at the same rate to the extent lawful. All such
overdue interest shall be payable on demand. The Company shall promptly cause to
be executed and authenticated any Additional Notes issued in payment of interest
in accordance with Sections 2.02, 2.14 and 4.01 of the Indenture and deliver
such Additional Notes to each Holder of record (or the Trustee or the
authenticating agent in custody of such Persons).
2. Method of Payment.
Subject to the terms and conditions of the Indenture, the Company will make
payments in respect of the principal of, premium, if any, and cash interest on
this Note and in respect of Redemption Prices and Change in Control Repurchase
Prices to Holders who surrender Notes to a Paying Agent to collect such payments
in respect of the Notes, . provided that at the option of the Company, payment
of interest may be made by Additional Notes. The Company will pay cash amounts
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 make such cash
payments by check payable in such money. A Holder with an aggregate principal
amount of Notes in excess of $5,000,000 will be paid by wire transfer in
immediately available funds at the written election of such Holder received by
the Paying Agent and containing all relevant information necessary to make such
wire transfer. Any such election shall remain in full force and effect unless
rescinded or otherwise modified in writing. Any payment required to be made on
any day that is not a Business Day will be made on the next succeeding Business
Day.
3. Paying Agent, Conversion Agent and Registrar.
Initially, U.S. Bank National Association (the "TRUSTEE"), will act as
Paying Agent, Conversion Agent and Registrar. The Company may appoint and change
any Paying Agent, Conversion Agent, Registrar or co-registrar without notice,
other than notice to the Trustee except that the Company will maintain at least
one Paying Agent in the State of New York, City of New York, Borough of
Manhattan, which shall initially be an office or agency of the Trustee. The
Company or any of its Subsidiaries or any of their Affiliates may act as Paying
Agent, Conversion Agent, Registrar or co-registrar.
4. Indenture.
The Company issued the Notes under an Indenture dated as of March 17, 2006
(the "INDENTURE"), between the Company and the Trustee. The terms of the Notes
include those stated in the Indenture and those made part of the Indenture by
reference to the Trust Indenture Act of 1939, as amended, as in effect from time
to time (the "TIA"). Capitalized terms used herein and not defined herein have
the meanings ascribed thereto in the Indenture. The Notes are subject to all
such terms, and Noteholders are referred to the Indenture and the TIA for a
statement of those terms.
The Notes are general, senior unsecured obligations of the Company
initially limited to $59,774,000, plus an additional aggregate amount of any
Additional Notes paid as interest on the Notes in accordance with the terms of
this Indenture, paid as interest on the Notes (subject to Section 2.07 of the
Indenture and the Issuer's right to reopen the series of Notes pursuant Section
2.02 of the Indenture).
5. Optional Redemption.
This Note may be redeemed in whole or in part upon not less than 30 nor
more than 60 days' notice, at any time and from time to time prior to the Stated
Maturity, at the option of the Company at the redemption price of $1,000 per
$1,000 principal amount of Notes, plus any interest accrued but not paid prior
to (but not including) the Optional Redemption Date, if both of the following
have occurred: (i) payment in full by the Company of the Non-Convertible Notes
including without limitation, accrued but unpaid interest, pre-payment
penalties, fees or other expenses due thereunder and (ii) the New Conversion
Rights Date.
Unless the Company defaults in the payment of the Redemption Price,
interest will cease to accrue on the Notes or portions thereof called for
redemption on the applicable Redemption Date.
If fewer than all the Notes are to be redeemed, the Trustee shall select
the particular Notes to be redeemed from the outstanding Notes by the methods as
provided in the Indenture. If any Note selected for partial redemption is
converted in part before termination of the conversion right with respect to the
portion of the Note so selected, the converted portion of such Note shall be
deemed to be the portion selected for redemption (provided, however, that the
Holder of such Note so converted and deemed redeemed shall not be entitled to
any additional interest payment as a result of such deemed redemption than such
Holder would have otherwise been entitled to receive upon conversion of such
Note). Notes which have been converted during a selection of Notes to be
redeemed may be treated by the Trustee as outstanding for the purpose of such
selection.
On and after the Redemption Date, interest ceases to accrue on Notes or
portions of Notes called for redemption, unless the Company defaults in the
payment of the Redemption Price and accrued and unpaid interest.
Notice of redemption will be given by the Company to the Holders as
provided in the Indenture.
6. Repurchase by the Company at the Option of the Holder.
If a Change in Control occurs, the Holder, at the Holder's option, shall
have the right, in accordance with the provisions of the Indenture, to require
the Company to repurchase the Notes at the Change in Control Repurchase Price in
cash, plus any interest accrued and unpaid to, but excluding, the Change in
Control Repurchase Date.
No fractional shares of Series B Preferred Stock or Common Stock, as the
case may be, will be issued upon repurchase of any Notes. Instead of any
fractional share of Series B Preferred Stock or Common Stock which would
otherwise be issued upon conversion of such Notes, the Company shall pay a cash
adjustment as provided in the Indenture.
A Change in Control Repurchase Notice will be given by the Company to the
Holders as provided in the Indenture. To exercise a repurchase right, a Holder
must deliver to the Trustee a written notice as provided in the Indenture.
Holders have the right to withdraw any Change in Control Repurchase Notice
by delivering to the Paying Agent a written notice of withdrawal in accordance
with the provisions of the Indenture.
7. Notice of Redemption.
Notice of an optional redemption will be mailed at least 30 days but not
more than 60 days before the Redemption Date to each Holder of Notes to be
redeemed at the Holder's registered address. If money sufficient to pay the
Redemption Price of all Notes (or portions thereof) to be redeemed on the
Redemption Date is deposited with the Paying Agent prior to or on the Redemption
Date, immediately after such Redemption Date interest ceases to accrue on such
Notes or portions thereof.
8. Conversion.
This Note is convertible, at the option of the holder prior to maturity,
from and after the earlier of (i) the New Conversion Rights Date, or (ii) the B
Conversion Date: (a) in the event that the B Conversion Date has occurred but
not the New Conversion Rights Date, this Note shall only convertible into duly
authorized, fully paid and non-assessable shares of the Series B Preferred
Stock, and holders of this Note may convert any outstanding Note, or portions
thereof, into the Series B Preferred Stock, at a conversion rate of that shall
be 2.083 shares of Series B Preferred Stock per $1,000 principal amount of Notes
(such shares of Series B Preferred Stock will be issuable only by certificate in
definitive form to any such holder); (b) from and after the New Conversion
Rights Date, this Note shall be convertible only into duly authorized, fully
paid and non-assessable shares of Common Stock at an initial conversion price of
$0.65 per share of Common Stock (such initial conversion price provides an
initial conversion rate of 1538.462 shares of Common Stock per $1,000 principal
amount of Notes, subject to adjustment under the terms of the Indenture. The
Company shall pay a cash adjustment as provided in the Indenture in lieu of any
fractional share of Series B Preferred Stock or Common Stock. Except as
described in the Indenture, no payment or other adjustment will be made on
conversion of any Notes for interest accrued thereon or for dividends on Common
Stock. A Note in respect of which a Holder has delivered a Change in Control
Repurchase Notice exercising the option of such Holder to require the Company to
purchase such Note may be converted only if such notice of exercise is withdrawn
in accordance with the terms of the Indenture.
To convert a Note, a Holder must (1) complete and manually sign the
conversion notice below (or complete and manually sign a facsimile of such
notice) and deliver such notice to the Conversion Agent, (2) surrender the Note
to the Conversion Agent, (3) furnish appropriate endorsements and transfer
documents if required by the Conversion Agent, the Company or the Trustee and
(4) pay any transfer or similar tax, if required.
8. Denominations; Transfer; Exchange.
The Notes are in fully registered form without coupons. A Holder may
transfer or exchange Notes in accordance with the Indenture. The Registrar may
require a Holder, among other things, to furnish appropriate endorsements and
transfer documents and to pay any taxes and fees required by law or permitted by
the Indenture. The Registrar need not transfer or exchange any Notes selected
for redemption (except, in the case of a Note to be redeemed in part, the
portion of the Note not to be redeemed) or any Notes in respect of which a
Change in Control Repurchase Notice or Option of Holder to Elect Purchase has
been given and not withdrawn (except, in the case of a Note to be purchased in
part, the portion of the Note not to be purchased) or any Notes for a period of
15 days before the mailing of a notice of redemption of Notes to be redeemed.
9. Persons Deemed Owners.
The registered Holder of this Note may be treated as the owner of this Note
for all purposes.
10. Unclaimed Money or Notes.
The Trustee and the Paying Agent shall return to the Company upon written
request any money or Notes held by them for the payment of any amount with
respect to the Notes that remains unclaimed for two years, subject to applicable
unclaimed property law. After return to the Company, Holders entitled to the
money or Notes must look to the Company for payment as general creditors unless
an applicable abandoned property law designates another person.
11. Amendment; Waiver.
Subject to certain exceptions set forth in the Indenture, (i) the Indenture
or the Notes may be amended with the written consent of the Holders of at least
a majority in aggregate principal amount of the Notes at the time outstanding
and (ii) certain Defaults may be waived with the written consent of the Holders
of a majority in aggregate principal amount of the Notes at the time
outstanding. Subject to certain exceptions set forth in the Indenture, without
the consent of any Noteholder, the Company and the Trustee may amend the
Indenture or the Notes to cure any ambiguity, omission, defect or inconsistency,
or to comply with Article 5 of the Indenture, to provide for uncertificated
Notes in addition to or in place of certificated Notes or to make any change
that does not adversely affect the rights of any Noteholder, or to comply with
any requirement of the SEC in connection with the qualification of the Indenture
under the TIA.
12. Defaults and Remedies.
Under the Indenture, Events of Default include (1) the Company fails to pay
when due the principal of or premium, if any, on any of the Notes at maturity,
upon redemption or exercise of a repurchase right or otherwise; (2) the Company
fails to pay an installment of interest (including Registration Delay Payments,
as that term is defined in the Registration Rights Agreement, if any, on any of
the Notes that continues for 30 days after the date when due; (3) the Company
fails to deliver shares of Series B Preferred Stock or Common Stock, as
applicable, together with cash in lieu of fractional shares, if any, when such
shares are required to be delivered for conversion of a Note and such failure
continues for 10 days after such delivery date; (4) the Company fails to perform
or observe any other term, covenant or agreement contained in the Notes or the
Indenture and the Non-Convertible Notes and the Non-Convertible Notes indenture
for a period of 30 days after receipt by the Company of a Notice of Default; (5)
the Company fails to give or cause the Trustee to give all Noteholders notice of
the occurrence of a Change in Control in accordance with the provisions of the
Indenture; (6) (A) one or more defaults in the payment of principal of or
premium, if any, on any of the Company's or the Company's Subsidiaries'
Indebtedness aggregating $5.0 million or more, when the same becomes due and
payable at the scheduled maturity thereof, and such default or defaults shall
have continued after any applicable grace period and shall not have been cured
or waived within a 30-day period after the date of a notice of default or (B)
any of the Company's or the Company's Subsidiaries' Indebtedness aggregating
$5.0 million or more shall have been accelerated or otherwise declared due and
payable, or required to be prepaid or repurchased (other than by regularly
scheduled required prepayment) prior to the scheduled maturity thereof and such
acceleration is not rescinded or annulled within a 30-day period after the date
of such acceleration; (7) if unsatisfied judgments not covered by insurance
aggregating in excess of $5.0 million rendered against the Company or any of its
Restricted Subsidiaries and not stayed, bonded or discharged within 60 days; and
(8) certain events of bankruptcy, insolvency or reorganization with respect to
the Company or any Significant Subsidiary or any Subsidiaries of the Company
which in the aggregate would constitute a Significant Subsidiary. If an Event of
Default (other than an Event of Default specified in clause (h) or (i) of
Section 6.01 of the Indenture) occurs and is continuing, the Trustee by notice
to the Company, or the Holders of at least 25% in aggregate principal amount of
the Notes at the time outstanding by notice to the Company, may declare the
Notes to be due and payable immediately. Certain events of bankruptcy or
insolvency are Events of Default which will result in the Notes becoming due and
payable immediately upon the occurrence of such Events of Default.
Noteholders may not enforce the Indenture or the Notes except as provided
in the Indenture. The Trustee may refuse to enforce the Indenture or the Notes
unless it receives reasonable indemnity or security. Subject to certain
limitations, Holders of a majority in aggregate principal amount of the Notes at
the time outstanding may direct the Trustee in its exercise of any trust or
power. The Trustee may withhold from Noteholders notice of any continuing
Default (except a Default in payment of amounts specified in clause (1) or (2)
above) if it determines that withholding notice is in their interests.
13. Designation.
The Indebtedness evidenced by this Note is hereby irrevocably designated as
"senior indebtedness" or such other term denoting seniority for the purposes of
any other existing or future Indebtedness of the Company which the Company makes
subordinate to any senior (or such other term denoting seniority) Indebtedness
of the Company.
14. Trustee Dealings with the Company.
Subject to certain limitations imposed by the TIA, the Trustee under the
Indenture, in its individual or any other capacity, may become the owner or
pledgee of Notes and may otherwise deal with and collect obligations owed to it
by the Company or its Affiliates and may otherwise deal with the Company or its
Affiliates with the same rights it would have if it were not Trustee.
15. No Recourse Against Others.
A director, officer, employee or stockholder, as such, of the Company shall
not have any liability for any obligations of the Company under the Notes or the
Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation. By accepting a Note, each Noteholder waives and
releases all such liability. The waiver and release are part of the
consideration for the issue of the Notes.
16. Authentication.
This Note shall not be valid until an authorized signatory of the Trustee
manually signs the Trustee's Certificate of Authentication on the other side of
this Note.
17. Abbreviations.
Customary abbreviations may be used in the name of a Noteholder or an
assignee, such as TEN COM (=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 Gift to Minors
Act).
18. GOVERNING LAW.
THE INDENTURE AND THIS NOTE WILL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
----------------
The Company will furnish to any Noteholder upon written request and without
charge a copy of the Indenture which has in it the text of this Note in larger
type. Requests may be made to:
PRG-Schultz International, Inc.
600 Galleria Parkway
Suite 100
Atlanta, Georgia 30339-5986
Attention: Chief Financial Officer
ASSIGNMENT FORM CONVERSION NOTICE
To assign this Note, fill in the form below: To convert this Note into Series B Preferred Stock,
check this box
[ ]
To convert this Note into Common Stock, check this box
[ ]
To convert only part of this Note, state the principal
amount to be converted (which must be $1,000 or an
integral multiple of $1,000 (except in the case of
Additional Notes paid in interest on this Note which
may be in other amounts)):
$______________________
I or we assign and transfer this Note to If you want the stock certificate made out in another
_________________________________________________ person's name, fill in the form below
_________________________________________________
(Insert assignee's social sec. or tax ID no.)
_________________________________________
_________________________________________
_________________________________________________ (Insert other person's social security or tax ID number)
_________________________________________________
(Print or type assignee's name, address and zip code)
And irrevocably appoint
_____________________ agent to transfer this Note on the
books of the Company. The agent may substitute another to
act for him.
_________________________________________
_________________________________________
_________________________________________
(Print or type other person's name, address and zip
code)
_________________________________________________ __________________________________________________
Date: Your Signature:
(Sign exactly as your name appears on the other side of this Note)
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company pursuant to
Section 3.15 of the Indenture, check the appropriate box below:
If you want to elect to have only part of the Note purchased by the Company
pursuant to Section 3.15 of the Indenture, state the amount you elect to have
purchased:
$________________
Date: _______________
Your Signature: ____________________________
(Sign exactly as your name appears on the
face of this Note)
Tax Identification No.: _____________________
Signature Guarantee*: _________________________
* Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).
A-1-1
EXHIBIT A-2
[FORM OF CERTIFICATED NOTE]
A-2-1
PRG-SCHULTZ INTERNATIONAL, INC.
10% Senior Convertible Notes due 2011
CUSIP NO. [ ]
No.:
Issue Date:
PRG-SCHULTZ INTERNATIONAL, INC., a Georgia corporation, promises to pay to
[___________] or registered assigns, the principal sum of Fifty-Nine Million,
Seven Hundred Seventy-Four Thousand Four Hundred DOLLARS ($59,774,400.00) on
[________], 2011.
This Note shall bear interest as specified on the other side of this Note.
Additional provisions of this Note are set forth on the other side of this
Note.
Dated: [ ], 2006 PRG-SCHULTZ INTERNATIONAL, INC.
By:
-------------------------------
Name:
Title:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
U.S. BANK NATIONAL ASSOCIATION, as Trustee,
certifies that this is one of
the Notes referred to in the
within-mentioned Indenture (as
defined on the other side of this Note).
By:
--------------------------------
Authorized Signatory
Dated:
--------------------------------
[Text of Reverse Side of Note]
Use Exhibit A-1 Text
EXHIBIT B
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company pursuant to
Sections 3.08 of the Indenture, check the appropriate box below:
If you want to elect to have only part of the Note purchased by the Company
pursuant to Sections 3.08 of the Indenture, state the amount you elect to have
purchased:
$---------------
Date: _______________
Your Signature:
----------------------------
(Sign exactly as your name appears on the
face of this Note)
Tax Identification No.:
----------------------
Signature Guarantee*: __________________________
* Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).
D-1-1