EXHIBIT 4.2
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IMPAX LABORATORIES, INC.
To
WACHOVIA BANK, NATIONAL ASSOCIATION,
as Trustee
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INDENTURE
Dated as of
April 5, 2004
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1.250% CONVERTIBLE SENIOR SUBORDINATED DEBENTURES DUE 2024
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TABLE OF CONTENTS
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PAGE
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ARTICLE 1
DEFINITIONS
Section 1.01. Definitions......................................................................2
ARTICLE 2
ISSUE, DESCRIPTION, EXECUTION, REGISTRATION AND EXCHANGE
OF DEBENTURES
Section 2.01. Designation Amount And Issue Of Debentures......................................11
Section 2.02. Form of Debentures..............................................................11
Section 2.03. Date And Denomination Of Debentures; Payments Of Interest.......................12
Section 2.04. Execution of Debentures.........................................................14
Section 2.05. Exchange and Registration of Transfer of Debentures; Restrictions on Transfer...14
Section 2.06. Mutilated, Destroyed, Lost or Stolen Debentures.................................21
Section 2.07. Temporary Debentures............................................................23
Section 2.08. Cancellation of Debentures......................................................23
Section 2.09. CUSIP Numbers...................................................................23
ARTICLE 3
REDEMPTION AND REPURCHASE OF DEBENTURES
Section 3.01. Redemption of Debentures........................................................24
Section 3.02. Notice of Provisional Redemption or Optional Redemption;
Selection of Debentures................................................................24
Section 3.03. Payment of Debentures Called For Redemption by the Company......................26
Section 3.04. Conversion Arrangement on Call for Redemption...................................27
Section 3.05. Repurchase at Option of Holders Upon a Designated Event.........................27
Section 3.06. Repurchase of Debentures by the Company at Option of the Holder.................32
Section 3.07. Company Repurchase Notice.......................................................34
Section 3.08. Effect of Designated Event Repurchase Notice or Repurchase Notice...............35
Section 3.09. Deposit of Purchase Price.......................................................36
Section 3.10. Debentures Repurchased in Part..................................................36
Section 3.11. Repayment to the Company........................................................36
ARTICLE 4
SUBORDINATION OF DEBENTURES
Section 4.01. Agreement of Subordination......................................................37
Section 4.02. Payments to Debentureholders....................................................37
Section 4.03. Subrogation of Debentures.......................................................40
Section 4.04. Authorization to Effect Subordination...........................................41
Section 4.05. Notice to Trustee...............................................................42
Section 4.06. Trustee's Relation to Senior Indebtedness.......................................43
Section 4.07. No Impairment of Subordination..................................................43
Section 4.08. Certain Conversions Not Deemed Payment..........................................43
Section 4.09. Article Applicable to Paying Agents.............................................44
Section 4.10. Senior Indebtedness Entitled to Rely............................................44
Section 4.11. Reliance on Judicial Order or Certificate of Liquidating Agent..................44
ARTICLE 5
RESERVED
ARTICLE 6
PARTICULAR COVENANTS OF THE COMPANY
Section 6.01. Payment of Principal, Premium and Interest......................................45
Section 6.02. Maintenance of Office or Agency.................................................45
Section 6.03. Appointments to Fill Vacancies in Trustee's Office..............................46
Section 6.04. Provisions as to Paying Agent...................................................46
Section 6.05. Existence.......................................................................47
Section 6.06. Maintenance of Properties.......................................................47
Section 6.07. Payment of Taxes and Other Claims...............................................47
Section 6.08. Rule 144A Information Requirement...............................................48
Section 6.09. Stay, Extension and Usury Laws..................................................48
Section 6.10. Compliance Certificate..........................................................48
Section 6.11. Liquidated Damages Notice.......................................................49
ARTICLE 7
DEBENTUREHOLDERS' LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE
Section 7.01. Debentureholders' Lists.........................................................49
Section 7.02. Preservation And Disclosure Of Lists............................................50
Section 7.03. Reports By Trustee..............................................................50
Section 7.04. Reports by Company..............................................................50
ARTICLE 8
REMEDIES OF THE TRUSTEE AND DEBENTUREHOLDERS ON AN EVENT OF DEFAULT
Section 8.01. Events Of Default...............................................................51
Section 8.02. Payments of Debentures on Default; Suit Therefor................................53
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Section 8.03. Application of Monies Collected By Trustee......................................55
Section 8.04. Proceedings by Debentureholder..................................................56
Section 8.05. Proceedings By Trustee..........................................................57
Section 8.06. Remedies Cumulative And Continuing..............................................57
Section 8.07. Direction of Proceedings and Waiver of Defaults By Majority
of Debentureholders....................................................................57
Section 8.08. Notice of Defaults..............................................................58
Section 8.09. Undertaking To Pay Costs........................................................58
ARTICLE 9
THE TRUSTEE
Section 9.01. Duties and Responsibilities of Trustee..........................................58
Section 9.02. Reliance on Documents, Opinions, Etc............................................60
Section 9.03. No Responsibility For Recitals, Etc.............................................61
Section 9.04. Trustee, Paying Agents, Conversion Agents or Registrar May Own Debentures.......62
Section 9.05. Monies to Be Held in Trust......................................................62
Section 9.06. Compensation and Expenses of Trustee............................................62
Section 9.07. Officers' Certificate As Evidence...............................................63
Section 9.08. Conflicting Interests of Trustee................................................63
Section 9.09. Eligibility of Trustee..........................................................63
Section 9.10. Resignation or Removal of Trustee...............................................63
Section 9.11. Acceptance by Successor Trustee.................................................65
Section 9.12. Succession By Merger............................................................65
Section 9.13. Preferential Collection of Claims...............................................66
ARTICLE 10
THE DEBENTUREHOLDERS
Section 10.01. Action By Debentureholders.....................................................66
Section 10.02. Proof of Execution by Debentureholders.........................................67
Section 10.03. Who Are Deemed Absolute Owners.................................................67
Section 10.04. Company-owned Debentures Disregarded...........................................67
Section 10.05. Revocation Of Consents, Future Holders Bound...................................68
ARTICLE 11
MEETINGS OF DEBENTUREHOLDERS
Section 11.01. Purpose Of Meetings............................................................68
Section 11.02. Call Of Meetings By Trustee....................................................69
Section 11.03. Call Of Meetings By Company Or Debentureholders................................69
Section 11.04. Qualifications For Voting......................................................69
Section 11.05. Regulations....................................................................69
Section 11.06. Voting.........................................................................70
Section 11.07. No Delay Of Rights By Meeting..................................................71
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ARTICLE 12
SUPPLEMENTAL INDENTURES
Section 12.01. Supplemental Indentures Without Consent of Debentureholders....................71
Section 12.02. Supplemental Indenture With Consent Of Debentureholders........................72
Section 12.03. Effect Of Supplemental Indenture...............................................73
Section 12.04. Notation On Debentures.........................................................74
Section 12.05. Evidence Of Compliance Of Supplemental Indenture To Be Furnished To Trustee....74
ARTICLE 13
CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE
Section 13.01. Company May Consolidate On Certain Terms.......................................74
Section 13.02. Successor To Be Substituted....................................................75
Section 13.03. Opinion Of Counsel To Be Given Trustee.........................................76
ARTICLE 14
SATISFACTION AND DISCHARGE OF INDENTURE
Section 14.01. Discharge Of Indenture.........................................................76
Section 14.02. Deposited Monies To Be Held In Trust By Trustee................................77
Section 14.03. Paying Agent To Repay Monies Held..............................................77
Section 14.04. Return Of Unclaimed Monies.....................................................77
Section 14.05. Reinstatement..................................................................77
ARTICLE 15
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS
Section 15.01. Indenture And Debentures Solely Corporate Obligations..........................77
ARTICLE 16
CONVERSION OF DEBENTURES
Section 16.01. Right To Convert...............................................................78
Section 16.02. Exercise Of Conversion Privilege; Issuance Of Common Stock On Conversion;
No Adjustment For Interest Or Dividends................................................81
Section 16.03. Cash Payments in Lieu of Fractional Shares.....................................83
Section 16.04. Conversion Rate................................................................84
Section 16.05. Adjustment Of Conversion Rate..................................................84
Section 16.06. Effect Of Reclassification, Consolidation, Merger or Sale......................93
Section 16.07. Taxes On Shares Issued.........................................................94
Section 16.08. Reservation of Shares, Shares to Be Fully Paid; Compliance With Governmental
Requirements; Listing of Common Stock..................................................94
Section 16.09. Responsibility Of Trustee......................................................95
Section 16.10. Notice To Holders Prior To Certain Actions.....................................96
Section 16.11. Stockholder Rights Plans.......................................................96
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ARTICLE 17
MISCELLANEOUS PROVISIONS
Section 17.01. Provisions Binding On Company's Successors.....................................97
Section 17.02. Official Acts By Successor Corporation.........................................97
Section 17.03. Addresses For Notices, Etc.....................................................97
Section 17.04. Governing Law..................................................................98
Section 17.05. Evidence Of Compliance With Conditions Precedent, Certificates To Trustee......98
Section 17.06. Legal Holidays.................................................................98
Section 17.07. Trust Indenture Act............................................................98
Section 17.08. No Security Interest Created...................................................99
Section 17.09. Benefits Of Indenture..........................................................99
Section 17.10. Table Of Contents, Headings, Etc...............................................99
Section 17.11. Authenticating Agent...........................................................99
Section 17.12. Execution In Counterparts.....................................................100
Section 17.13. Severability..................................................................100
Exhibit A Form of Debenture A-1
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EXHIBIT 4.2
INDENTURE
INDENTURE dated as of April 5, 2004 between Impax Laboratories, Inc., a
Delaware corporation (hereinafter called the "COMPANY"), having its principal
office at 3735 Castor Avenue, Philadelphia, PA 19124 and Wachovia Bank, National
Association, a banking corporation, as trustee hereunder (hereinafter called the
"TRUSTEE").
WITNESSETH:
WHEREAS, for its lawful corporate purposes, the Company has duly
authorized the issue of its 1.250% Convertible Senior Subordinated Debentures
Due 2024 (hereinafter called the "DEBENTURES"), in an aggregate principal amount
not to exceed $95,000,000 and, to provide the terms and conditions upon which
the Debentures are to be authenticated, issued and delivered, the Company has
duly authorized the execution and delivery of this Indenture; and
WHEREAS, the Debentures, the certificate of authentication to be borne
by the Debentures, a form of assignment, a form of option to elect repurchase
upon a designated event, a form of repurchase notice and a form of conversion
notice to be borne by the Debentures are to be substantially in the forms
hereinafter provided for; and
WHEREAS, all acts and things necessary to make the Debentures, when
executed by the Company and authenticated and delivered by the Trustee or a duly
authorized authenticating agent, as in this Indenture provided, the valid,
binding and legal obligations of the Company, and to constitute this Indenture a
valid agreement according to its terms, have been done and performed, and the
execution of this Indenture and the issue hereunder of the Debentures have in
all respects been duly authorized,
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
That in order to declare the terms and conditions upon which the
Debentures are, and are to be, authenticated, issued and delivered, and in
consideration of the premises and of the purchase and acceptance of the
Debentures by the Holders thereof, the Company covenants and agrees with the
Trustee for the equal and proportionate benefit of the respective Holders from
time to time of the Debentures (except as otherwise provided below), as follows:
ARTICLE 1
DEFINITIONS
Section 1.01. Definitions. The terms defined in this Section 1.01
(except as herein otherwise expressly provided or unless the context otherwise
requires) for all purposes of this Indenture and of any indenture supplemental
hereto shall have the respective meanings specified in this Section 1.01. All
other terms used in this Indenture that are defined in the Trust Indenture Act
or which are by reference therein defined in the Securities Act (except as
herein otherwise expressly provided or unless the context otherwise requires)
shall have the meanings assigned to such terms in the Trust Indenture Act and in
the Securities Act as in force at the date of the execution of this Indenture.
The words "HEREIN", "HEREOF", "HEREUNDER" and words of similar import refer to
this Indenture as a whole and not to any particular Article, Section or other
Subdivision. The terms defined in this Article include the plural as well as the
singular.
"ACCEPTED PURCHASED SHARES" has the meaning specified in Section
16.05(f).
"ADJUSTMENT EVENT" has the meaning specified in Section 16.05(j).
"AGENT MEMBERS" has the meaning specified in Section 2.05(a).
"AFFILIATE" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"CONTROL", 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.
"BOARD OF DIRECTORS" means the Board of Directors of the Company or a
committee of such Board duly authorized to act for it hereunder.
"BUSINESS DAY" means any day except a Saturday, Sunday or legal holiday
on which banking institutions in The City of New York are authorized or
obligated by law, regulation or executive order to close.
"CLOSING SALE PRICE" of the shares of Common Stock on any date means
the closing sale price per share (or, if no closing sale price is reported, the
average of the closing bid and ask prices or, if more than one in either case,
the average of the average closing bid and the average closing ask prices) on
such date as reported in composite transactions for the principal United States
securities exchange on which shares of Common Stock are traded or, if the shares
of Common Stock are not listed on a United States national or regional
securities exchange, as reported by the Nasdaq National Market or the Nasdaq
Small Cap Market or, if neither, by the National Quotation Bureau Incorporated.
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In the absence of such a quotation, the Company shall be entitled to determine
the Closing Sale Price on the basis it considers appropriate. The Closing Sale
Price shall be determined without reference to extended or after hours trading.
"COMMISSION" means the Securities and Exchange Commission, as from time
to time constituted, created under the Exchange Act, or, if at any time after
the execution of this Indenture such Commission is not existing and performing
the duties now assigned to it under the Trust Indenture Act, then the body
performing such duties at such time.
"COMMON STOCK" means any stock of any class of the Company which has no
preference in respect of dividends or of amounts payable in the event of any
voluntary or involuntary liquidation, dissolution or winding up of the Company
and which is not subject to redemption by the Company. Subject to the provisions
of Section 16.06, however, shares issuable on conversion of Debentures shall
include only shares of the class designated as common stock of the Company at
the date of this Indenture (namely, the Common Stock, par value $.01) or shares
of any class or classes resulting from any reclassification or reclassifications
thereof and which have no preference in respect of dividends or of amounts
payable in the event of any voluntary or involuntary liquidation, dissolution or
winding up of the Company and which are not subject to redemption by the
Company; provided that if at any time there shall be more than one such
resulting class, the shares of each such class then so issuable on conversion
shall be substantially in the proportion which the total number of shares of
such class resulting from all such reclassifications bears to the total number
of shares of all such classes resulting from all such reclassifications.
"COMPANY" means the corporation named as the "COMPANY" in the first
paragraph of this Indenture, and, subject to the provisions of Article 13 and
Section 16.06, shall include its successors and assigns.
"COMPANY REPURCHASE NOTICE" has the meaning specified in Section
3.07(b).
"COMPANY REPURCHASE NOTICE DATE" has the meaning specified in Section
3.07(b).
"CONTINUING DIRECTORS" has the meaning specified in Section 3.05(a).
"CONVERSION DATE" has the meaning specified in Section 16.02.
"CONVERSION PRICE" as of any day will equal $1,000 divided by the
Conversion Rate as of such date.
"CONVERSION RATE" has the meaning specified in Section 16.04.
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"CONVERSION TRIGGER PRICE" has the meaning specified in Section
16.01(a).
"CORPORATE TRUST OFFICE" or other similar term, means the designated
office of the Trustee at which at any particular time its corporate trust
business as it relates to this Indenture shall be administered, which office is,
at the date as of which this Indenture is dated, located at 123 S. Broad Street,
PA 1249, Philadelphia, PA 19109.
"CURRENT MARKET PRICE" has the meaning specified in Section 16.05(g).
"CUSTODIAN" means Wachovia Bank, National Association, as custodian
with respect to the Debentures in global form, or any successor entity thereto.
"DEBENTURE" or "DEBENTURES" means any Debenture or Debentures, as the
case may be, authenticated and delivered under this Indenture, including any
Global Debenture.
"DEBENTURE REGISTER" has the meaning specified in Section 2.05.
"DEBENTURE REGISTRAR" has the meaning specified in Section 2.05.
"DEBENTUREHOLDER" or "HOLDER" as applied to any Debenture, or other
similar terms (but excluding the term "BENEFICIAL HOLDER"), means any Person in
whose name at the time a particular Debenture is registered on the Debenture
Registrar's books.
"DEFAULT" means any event that is, or after notice or passage of time,
or both, would be, an Event of Default.
"DEFAULTED INTEREST" has the meaning specified in Section 2.03.
"DEPOSITARY" means, the clearing agency registered under the Exchange
Act that is designated to act as the Depositary for the Global Debentures. The
Depository Trust Company shall be the initial Depositary, until a successor
shall have been appointed and become such pursuant to the applicable provisions
of this Indenture, and thereafter, "DEPOSITARY" shall mean or include such
successor.
"DESIGNATED EVENT" means the occurrence of (a) a Fundamental Change or
(b) the termination of trading in the Company's Common Stock (or other common
stock into which the Debentures are at such time convertible) on the Nasdaq
National Market, Nasdaq Small Cap Market or any United States national
securities exchange, following which the Company's Common Stock (or other common
stock into which the Debentures are at such time convertible) is no longer
approved for trading on the Nasdaq National Market, Nasdaq Small Cap Market or
any United States national securities exchange.
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"DESIGNATED EVENT EXPIRATION TIME" has the meaning specified in Section
3.05(b).
"DESIGNATED EVENT NOTICE" has the meaning specified in Section 3.05(b).
"DESIGNATED EVENT REPURCHASE NOTICE" has the meaning specified in
Section 3.05(c).
"DESIGNATED EVENT REPURCHASE DATE" has the meaning specified in Section
3.05(a).
"DESIGNATED SENIOR INDEBTEDNESS" means (i) all obligations under the
Senior Credit Facility and (ii) any other Senior Indebtedness of the Company
which, at the date of determination, is specifically designated by the Company
in the instrument evidencing or governing such Senior Indebtedness as
"Designated Senior Indebtedness" for purposes of this Indenture.
"DETERMINATION DATE" has the meaning specified in Section 16.05(j).
"EVENT OF DEFAULT" means any event specified in Section 8.01 as an
Event of Default.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder, as in effect from time to
time.
"EX-DIVIDEND TIME" has the meaning specified in Section 16.01(b).
"EXPIRATION TIME" has the meaning specified in Section 16.05(e).
"FAIR MARKET VALUE" has the meaning specified in Section 16.05(g).
"FISCAL QUARTER" means, with respect to the Company, first, second and
third quarters ending March 31, June 30 and September 30, respectively. The
Company has a 52 or 53 week fiscal year that ends on the Friday closest to
December 31. The Company shall confirm the ending dates of its fiscal quarters
for the current fiscal year to the Trustee upon the Trustee's request.
"FUNDAMENTAL CHANGE" has the meaning specified in Section 3.05(a).
"GLOBAL DEBENTURE" has the meaning specified in Section 2.02.
"INDEBTEDNESS" means, with respect to any Person, and without
duplication, (a) all indebtedness, obligations and other liabilities (contingent
or otherwise) of such Person for borrowed money (including obligations of the
Person in respect of overdrafts, foreign exchange contracts, currency exchange
agreements, interest rate protection agreements, and any loans or advances from
banks, whether or not evidenced by notes or similar instruments) or evidenced by
5
bonds, debentures, notes or similar instruments (whether or not the recourse of
the lender is to the whole of the assets of such Person or to only a portion
thereof), other than any account payable or other accrued current liability or
obligation incurred in the ordinary course of business in connection with the
obtaining of materials or services; (b) all reimbursement obligations and other
liabilities (contingent or otherwise) of such Person with respect to letters of
credit, bank guarantees or bankers' acceptances; (c) all obligations and
liabilities (contingent or otherwise) in respect of leases of such Person
required, in conformity with generally accepted accounting principles, to be
accounted for as capitalized lease obligations on the balance sheet of such
Person and all obligations and other liabilities (contingent or otherwise) under
any lease or related document (including a purchase agreement) in connection
with the lease of real property which provides that such Person is contractually
obligated to purchase or cause a third party to purchase the leased property and
thereby guarantee a minimum residual value of the leased property to the lessor
and the obligations of such Person under such lease or related document to
purchase or to cause a third party to purchase such leased property; (d) all
obligations of such Person (contingent or otherwise) with respect to an interest
rate or other swap, cap or collar agreement or other similar instrument or
agreement or foreign currency hedge, exchange, purchase or similar instrument or
agreement; (e) all direct or indirect guaranties or similar agreements by such
Person in respect of, and obligations or liabilities (contingent or otherwise)
of such Person to purchase or otherwise acquire or otherwise assure a creditor
against loss in respect of, indebtedness, obligations or liabilities of another
Person of the kind described in clauses (a) through (d); (f) any indebtedness or
other obligations described in clauses (a) through (e) secured by any mortgage,
pledge, lien or other encumbrance existing on property which is owned or held by
such Person, regardless of whether the indebtedness or other obligation secured
thereby shall have been assumed by such Person; and (g) any and all deferrals,
renewals, extensions and refundings of, or amendments, modifications or
supplements to, any indebtedness, obligation or liability of the kind described
in clauses (a) through (f).
"INDENTURE" means this instrument as originally executed or, if amended
or supplemented as herein provided, as so amended or supplemented.
"INITIAL PURCHASERS" means each of Citigroup Global Markets Inc.,
Wachovia Capital Markets, LLC and First Albany Capital Inc. (each an "INITIAL
PURCHASER").
"INTEREST" means, when used with reference to the Debentures, any
interest payable under the terms of the Debentures, including contingent
interest, if any, and Liquidated Damages, if any, payable under the terms of the
Registration Rights Agreement.
"LIQUIDATED DAMAGES" has the meaning specified for "LIQUIDATED DAMAGES
AMOUNT" in Section 2(e) of the Registration Rights Agreement.
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"LIQUIDATED DAMAGES NOTICE" has the meaning specified in Section 6.11.
"MAKE-WHOLE PAYMENT" has the meaning specified in Exhibit A.
"NON-ELECTING SHARE" has the meaning specified in Section 16.06.
"NOTICE DATE" means the date of mailing of the notice of redemption
pursuant to Section 3.02.
"OFFER EXPIRATION TIME" has the meaning specified in Section 16.05(f).
"OFFICERS' CERTIFICATE", when used with respect to the Company, means a
certificate signed by the Chairman of the Board, the Chief Executive Officer,
the President or any Vice President (whether or not designated by a number or
numbers or word or words added before or after the title "VICE PRESIDENT") and
the Treasurer or any Assistant Treasurer, or the Secretary or Assistant
Secretary of the Company.
"OPINION OF COUNSEL" means an opinion in writing signed by legal
counsel, who may be an employee of or counsel to the Company, or other counsel
reasonably acceptable to the Trustee.
"OPTIONAL REDEMPTION" has the meaning specified in Section 3.02.
"OUTSTANDING", when used with reference to Debentures and subject to
the provisions of Section 10.04, means, as of any particular time, all
Debentures authenticated and delivered by the Trustee under this Indenture,
except:
(a) Debentures theretofore canceled by the Trustee or delivered to the
Trustee for cancellation;
(b) Debentures, or portions thereof, (i) for the redemption of which
monies in the necessary amount shall have been deposited in trust with the
Trustee or with any paying agent (other than the Company) or (ii) which shall
have been otherwise defeased in accordance with Article 14;
(c) Debentures in lieu of which, or in substitution for which, other
Debentures shall have been authenticated and delivered pursuant to the terms of
Section 2.06; and
(d) Debentures converted into Common Stock pursuant to Article 16 and
Debentures deemed not outstanding pursuant to Article 3.
"PERSON" means a corporation, an association, a partnership, a limited
liability company, an individual, a joint venture, a joint stock company, a
trust, an unincorporated organization or a government or an agency or a
political subdivision thereof.
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"PORTAL MARKET" means the Private Offerings, Resales and Trading
through Automatic Linkages Market, commonly referred to as the Portal Market,
operated by the National Association of Securities Dealers, Inc. or any
successor thereto.
"PREDECESSOR DEBENTURE" of any particular Debenture means every
previous Debenture evidencing all or a portion of the same debt as that
evidenced by such particular Debenture, and, for the purposes of this
definition, any Debenture authenticated and delivered under Section 2.06 in lieu
of a lost, destroyed or stolen Debenture shall be deemed to evidence the same
debt as the lost, destroyed or stolen Debenture that it replaces.
"PREMIUM" means any premium payable under the terms of the Debentures.
"PRINCIPAL VALUE CONVERSION" has the meaning specified in Section
16.01.
"PROVISIONAL REDEMPTION" has the meaning specified in Section 3.01.
"PUBLICLY TRADED SECURITIES" has the meaning specified in Section
3.05(a).
"PURCHASED SHARES" has the meaning specified in Section 16.05(e).
"QIB" means a "QUALIFIED INSTITUTIONAL BUYER" as defined in Rule 144A.
"RECORD DATE" has the meaning specified in Section 2.03 and Section
16.05(g).
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights
Agreement, dated as of April 5, 2004, among the Company and the Initial
Purchasers, as amended from time to time in accordance with its terms.
"REPRESENTATIVE" means (a) the indenture trustee or other trustee,
agent or representative for holders of Senior Indebtedness or (b) with respect
to any Senior Indebtedness that does not have any such trustee, agent or other
representative, (i) in the case of such Senior Indebtedness issued pursuant to
an agreement providing for voting arrangements as among the holders or owners of
such Senior Indebtedness, any holder or owner of such Senior Indebtedness acting
with the consent of the required persons necessary to bind such holders or
owners of such Senior Indebtedness, and (ii) in the case of all other such
Senior Indebtedness, the holder or owner of such Senior Indebtedness.
"REPURCHASE DATE" has the meaning specified in Section 3.06.
"REPURCHASE EXPIRATION TIME" has the meaning specified in Section 3.06.
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"REPURCHASE NOTICE" has the meaning specified in Section 3.06.
"RESPONSIBLE OFFICER" shall mean, when used with respect to the
Trustee, any officer within the corporate trust department of the Trustee with
direct responsibility for the administration of this Indenture and also means,
with respect to a particular corporate trust matter, any other officer to whom
such matter is referred because of such officer's knowledge of or familiarity
with the particular subject.
"RESTRICTED SECURITIES" has the meaning specified in Section 2.05(c).
"RIGHTS" has the meaning specified in Section 16.11.
"RULE 144A" means Rule 144A as promulgated under the Securities Act.
"SECURITIES" has the meaning specified in Section 16.05(d).
"SECURITIES ACT" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder, as in effect from time to time.
"SENIOR CREDIT FACILITY" means the senior credit facility, under that
certain Loan and Security Agreement dated as of October 23, 2002, between Impax
Laboratories, Inc, as borrower, and Wachovia Bank, National Association
(successor to Congress Financial Corporation), as lender, together with the
documents now or hereafter related thereto (including, without limitation, any
guarantee agreements and any security documents), in each case as such
agreements may be amended (including any amendment and restatement thereof),
supplemented or otherwise modified from time to time, including any agreement
extending the maturity of, refinancing, replacing or otherwise restructuring
(including by way of adding the Company or any Subsidiaries of the Company as
additional borrowers or guarantors thereunder) all or any portion of the
Indebtedness under such agreement or any successor or replacement agreement and
whether by the same or any other agent, lender or group of lenders (or other
institutions).
"SENIOR INDEBTEDNESS" means, whether outstanding on the date of this
Indenture or thereafter issued, all Indebtedness of the Company, including
interest (including interest accruing on or after the filing of any petition in
bankruptcy or for reorganization relating to the Company whether or not a claim
for post-filing interest is allowed in such proceeding) and premium, if any,
thereon, and other monetary amounts (including fees, expenses, reimbursement
obligations under letters of credit and indemnities) owing in respect thereof
unless, in the instrument creating or evidencing the same or pursuant to which
the same is outstanding, it is provided that the obligations in respect of such
Indebtedness rank pari passu with the Securities; provided, however, that Senior
Indebtedness will not include (1) any obligation of the Company to any
majority-owned Subsidiary, (2) any liability for federal, state, foreign, local
or other taxes owed or owing by the Company, (3) any accounts payable or other
9
liability to trade creditors of the Company arising in the ordinary course of
business, (4) any Indebtedness or obligation of the Company that is expressly
subordinate or junior in right of payment to any other Indebtedness or
obligation of the Company, or (5) obligations in respect of any Common Stock.
"SHELF REGISTRATION STATEMENT" has the meaning specified in the
Registration Rights Agreement.
"SIGNIFICANT SUBSIDIARY" means, as of any date of determination, a
Subsidiary of the Company that would constitute a "SIGNIFICANT SUBSIDIARY" as
such term is defined under Rule 1-02(w) of Regulation S-X of the Commission as
in effect on the date of this Indenture.
"SPINOFF VALUATION PERIOD" has the meaning specified in Section
16.05(d).
"SUBSIDIARY" means, with respect to any Person, (i) any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of capital stock or other equity interest entitled (without
regard to the occurrence of any contingency) to vote in the election of
directors, managers or trustees thereof is at the time owned or controlled,
directly or indirectly, by such Person or one or more of the other subsidiaries
of that Person (or a combination thereof) and (ii) any partnership (a) the sole
general partner or managing general partner of which is such Person or a
subsidiary of such Person or (b) the only general partners of which are such
Person or of one or more subsidiaries of such Person (or any combination
thereof).
"TRADING DAY" has the meaning specified in Section 16.05(g).
"TRADING PRICE" means, on any date, the average of the secondary market
bid quotations per $1,000 principal amount of Debentures obtained by the Trustee
for $2,000,000 principal amount of Debentures at approximately 3:30 p.m., New
York City time, on such date from three independent nationally recognized
securities dealers selected by the Company; provided that if at least three such
bids cannot reasonably be obtained by the Trustee, but two bids are obtained,
then the average of the two bids shall be used, and if only one such bid can
reasonably be obtained by the Trustee, one bid shall be used; and provided
further that if the Trustee cannot reasonably obtain at least one bid for
$2,000,000 principal amount of Debentures from a nationally recognized
securities dealer, then the Trading Price per $1,000 principal amount of
Debentures shall be deemed to be less than 98% of the product of (a) the
Conversion Rate and (b) the Closing Sale Price on such date.
"TRIGGER EVENT" has the meaning specified in Section 16.05(d).
10
"TRUST INDENTURE ACT" means the Trust Indenture Act of 1939, as
amended, as it was in force at the date of this Indenture, except as provided in
Sections 12.03 and 15.06; provided that if the Trust Indenture Act of 1939 is
amended after the date hereof, the term "TRUST INDENTURE ACT" shall mean, to the
extent required by such amendment, the Trust Indenture Act of 1939 as so
amended.
"TRUSTEE" means Wachovia Bank, National Association and its successors
and any corporation resulting from or surviving any consolidation or merger to
which it or its successors may be a party and any successor trustee at the time
serving as successor trustee hereunder.
ARTICLE 2
ISSUE, DESCRIPTION, EXECUTION, REGISTRATION AND EXCHANGE OF DEBENTURES
Section 2.01. Designation Amount And Issue Of Debentures. The
Debentures shall be designated as "1.250% CONVERTIBLE SENIOR SUBORDINATED
DEBENTURES DUE 2024". Debentures not to exceed the aggregate principal amount of
$95,000,000 (except pursuant to Sections 2.05, 2.06, 3.03, 3.05 and 16.02
hereof) upon the execution of this Indenture, or from time to time thereafter,
may be executed by the Company and delivered to the Trustee for authentication,
and the Trustee shall thereupon authenticate and deliver said Debentures to or
upon the written order of the Company, signed by its Chairman of the Board,
Chief Executive Officer, President or any Vice President (whether or not
designated by a number or numbers or word or words added before or after the
title "VICE PRESIDENT"), the Treasurer or any Assistant Treasurer or the
Secretary or Assistant Secretary, without any further action by the Company
hereunder.
Section 2.02. Form of Debentures. The Debentures and the Trustee's
certificate of authentication to be borne by such Debentures shall be
substantially in the form set forth in Exhibit A. The terms and provisions
contained in the form of Debenture attached as Exhibit A hereto 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 Debentures may have such letters, numbers or other marks of
identification and such notations, legends, endorsements or changes 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 by the Custodian, the Depositary or by the
National Association of Securities Dealers, Inc. in order for the Debentures to
be tradable on the Portal Market or as may be required for the Debentures to be
tradable on any other market developed for trading of securities pursuant to
Rule 144A or as may be required to comply with any applicable law or with any
11
rule or regulation made pursuant thereto or with any rule or regulation of any
securities exchange or automated quotation system on which the Debentures may be
listed, or to conform to usage, or to indicate any special limitations or
restrictions to which any particular Debentures are subject.
So long as the Debentures are eligible for book-entry settlement with
the Depositary, or unless otherwise required by law, or otherwise contemplated
by Section 2.05(a), all of the Debentures will be represented by one or more
Debentures in global form registered in the name of the Depositary or the
nominee of the Depositary (a "GLOBAL DEBENTURE"). The transfer and exchange of
beneficial interests in any such Global Debenture shall be effected through the
Depositary in accordance with this Indenture and the applicable procedures of
the Depositary. Except as provided in Section 2.05(a), beneficial owners of a
Global Debenture shall not be entitled to have certificates registered in their
names, will not receive or be entitled to receive physical delivery of
certificates in definitive form and will not be considered Holders of such
Global Debenture.
Any Global Debenture shall represent such of the outstanding Debentures
as shall be specified therein and shall provide that it shall represent the
aggregate amount of outstanding Debentures from time to time endorsed thereon
and that the aggregate amount of outstanding Debentures represented thereby may
from time to time be increased or reduced to reflect redemptions, repurchases,
conversions, transfers or exchanges permitted hereby. Any endorsement of a
Global Debenture to reflect the amount of any increase or decrease in the amount
of outstanding Debentures represented thereby shall be made by the Trustee or
the Custodian, at the direction of the Trustee, in such manner and upon
instructions given by the Holder of such Debentures in accordance with this
Indenture. Payment of principal of and interest and premium, if any, on any
Global Debenture shall be made to the Holder of such Debenture.
Section 2.03. Date And Denomination Of Debentures; Payments Of
Interest. The Debentures shall be issuable in registered form without coupons in
denominations of $1,000 principal amount and integral multiples thereof. Each
Debenture shall be dated the date of its authentication and shall bear interest
from the date specified on the face of the form of Debenture attached as Exhibit
A hereto. Interest on the Debentures shall be computed on the basis of a 360-day
year comprised of twelve 30-day months.
The Person in whose name any Debenture (or its Predecessor Debenture)
is registered on the Debenture Register at the close of business on any Record
Date with respect to any interest payment date shall be entitled to receive the
interest payable on such interest payment date, except that the interest payable
upon redemption or repurchase will be payable to the Person to whom principal is
payable pursuant to such redemption or repurchase (unless the redemption date or
the Repurchase Date, as the case may be, is an interest payment date, in which
case the semi-annual payment of interest becoming due on such date shall be
12
payable to the Holders of such Debentures registered as such on the applicable
Record Date). Interest shall be payable at the office of the Company maintained
by the Company for such purposes in the Borough of Manhattan, City of New York,
which shall initially be an office or agency of the Trustee. The Company shall
pay interest (i) on any Debentures in certificated form by check mailed to the
address of the Person entitled thereto as it appears in the Debenture Register
(or upon written notice, by wire transfer in immediately available funds, if
such Person is entitled to interest on aggregate principal in excess of $2
million) or (ii) on any Global Debenture by wire transfer of immediately
available funds to the account of the Depositary or its nominee. The term
"RECORD DATE" with respect to any interest payment date shall mean the March 15
or September 15 preceding the applicable April 1 or October 1 interest payment
date, respectively.
Any interest on any Debenture which is payable, but is not punctually
paid or duly provided for, on any April 1 or October 1 (herein called "DEFAULTED
INTEREST") shall forthwith cease to be payable to the Debentureholder on the
relevant Record Date by virtue of his having been such Debentureholder, and such
Defaulted Interest shall be paid by the Company, at its election in each case,
as provided in clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest to
the Persons in whose names the Debentures (or their respective Predecessor
Debentures) are registered at the close of business on a special record date for
the payment of such Defaulted Interest, which shall be fixed in the following
manner. The Company shall notify the Trustee in writing of the amount of
Defaulted Interest proposed to be paid on each Debenture and the date of the
proposed payment (which shall be not less than twenty-five (25) days after the
receipt by the Trustee of such notice, unless the Trustee shall consent to an
earlier date), and at the same time the Company shall deposit with the Trustee
an amount of money equal to the aggregate amount to be paid in respect of such
Defaulted Interest or shall make arrangements satisfactory to the Trustee for
such deposit on or prior to the date of the proposed payment, such money when
deposited to be held in trust for the benefit of the Persons entitled to such
Defaulted Interest as in this clause provided. Thereupon the Trustee shall fix a
special record date for the payment of such Defaulted Interest which shall be
not more than fifteen (15) days and not less than ten (10) days prior to the
date of the proposed payment, and not less than ten (10) days after the receipt
by the Trustee of the notice of the proposed payment. The Trustee shall promptly
notify the Company of such special record date and, in the name and at the
expense of the Company, shall cause notice of the proposed payment of such
Defaulted Interest and the special record date therefor to be mailed,
first-class postage prepaid, to each Holder at his address as it appears in the
Debenture Register, not less than ten (10) days prior to such special record
date. Notice of the proposed payment of such Defaulted Interest and the special
record date therefor having been so mailed, such Defaulted Interest shall be
paid to the Persons in whose names the Debentures (or their respective
Predecessor Debentures) are registered at the close of business on such special
record date and shall no longer be payable pursuant to the following clause (2)
of this Section 2.03.
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(2) The Company may make payment of any Defaulted Interest in any other
lawful manner not inconsistent with the requirements of any national securities
exchange or automated quotation system on which the Debentures may be listed or
designated for issuance, and upon such notice as may be required by such
exchange or automated quotation system, if, after notice given by the Company to
the Trustee of the proposed payment pursuant to this clause, such manner of
payment shall be deemed practicable by the Trustee.
Section 2.04. Execution of Debentures. The Debentures shall be signed
in the name and on behalf of the Company by the manual or facsimile signature of
its Chairman of the Board, Chief Executive Officer, President or any Vice
President (whether or not designated by a number or numbers or word or words
added before or after the title "VICE PRESIDENT") and attested by the manual or
facsimile signature of its Secretary or any of its Assistant Secretaries or its
Treasurer or any of its Assistant Treasurers (which may be printed, engraved or
otherwise reproduced thereon, by facsimile or otherwise). Only such Debentures
as shall bear thereon a certificate of authentication substantially in the form
set forth on the form of Debenture attached as Exhibit A hereto, manually
executed by the Trustee (or an authenticating agent appointed by the Trustee as
provided by Section 17.11), shall be entitled to the benefits of this Indenture
or be valid or obligatory for any purpose. Such certificate by the Trustee (or
such an authenticating agent) upon any Debenture executed by the Company shall
be conclusive evidence that the Debenture so authenticated has been duly
authenticated and delivered hereunder and that the Holder is entitled to the
benefits of this Indenture.
In case any officer of the Company who shall have signed any of the
Debentures shall cease to be such officer before the Debentures so signed shall
have been authenticated and delivered by the Trustee, or disposed of by the
Company, such Debentures nevertheless may be authenticated and delivered or
disposed of as though the person who signed such Debentures had not ceased to be
such officer of the Company, and any Debenture may be signed on behalf of the
Company by such persons as, at the actual date of the execution of such
Debenture, shall be the proper officers of the Company, although at the date of
the execution of this Indenture any such person was not such an officer.
Section 2.05. Exchange and Registration of Transfer of Debentures;
Restrictions on Transfer. The Company shall cause to be kept at the Corporate
Trust Office a register (the register maintained in such office and in any other
office or agency of the Company designated pursuant to Section 6.02 being herein
sometimes collectively referred to as the "DEBENTURE REGISTER") in which,
subject to such reasonable regulations as it may prescribe, the Company shall
provide for the registration of Debentures and of transfers of Debentures. The
Debenture Register shall be in written form or in any form capable of being
14
converted into written form within a reasonably prompt period of time. The
Trustee is hereby appointed "DEBENTURE REGISTRAR" for the purpose of registering
Debentures and transfers of Debentures as herein provided. The Company may
appoint one or more co-registrars in accordance with Section 6.02.
Upon surrender for registration of transfer of any Debenture to the
Debenture Registrar or any co-registrar, and satisfaction of the requirements
for such transfer set forth in this Section 2.05, the Company shall execute, and
the Trustee shall authenticate and deliver, in the name of the designated
transferee or transferees, one or more new Debentures of any authorized
denominations and of a like aggregate principal amount and bearing such
restrictive legends as may be required by this Indenture.
Debentures may be exchanged for other Debentures of any authorized
denominations and of a like aggregate principal amount, upon surrender of the
Debentures to be exchanged at any such office or agency maintained by the
Company pursuant to Section 6.02. Whenever any Debentures are so surrendered for
exchange, the Company shall execute, and the Trustee shall authenticate and
deliver, the Debentures which the Debentureholder making the exchange is
entitled to receive bearing registration numbers not contemporaneously
outstanding.
All Debentures issued upon any registration of transfer or exchange of
Debentures shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Debentures
surrendered upon such registration of transfer or exchange.
All Debentures presented or surrendered for registration of transfer or
for exchange, redemption, repurchase or conversion shall (if so required by the
Company or the Debenture Registrar) be duly endorsed, or be accompanied by a
written instrument or instruments of transfer in form satisfactory to the
Company, and the Debentures shall be duly executed by the Debentureholder
thereof or his attorney duly authorized in writing.
No service charge shall be made to any Holder for any registration of,
transfer or exchange of Debentures, including those in connection with any
redemption, repurchase or conversions pursuant to the terms of this Indenture
but the Company may require payment by the Holder of a sum sufficient to cover
any tax, assessment or other governmental charge that may be imposed in
connection with any such registration of transfer or exchange of Debentures.
Neither the Company nor the Trustee nor any Debenture Registrar shall
be required to exchange or register a transfer of (a) any Debentures for a
period of fifteen (15) days next preceding any selection of Debentures to be
redeemed, (b) any Debentures or portions thereof called for redemption pursuant
to Section 3.02 (c) any Debentures or portions thereof surrendered for
conversion pursuant to Article 16, (d) any Debentures or portions thereof
tendered for redemption (and not withdrawn) pursuant to Section 3.05 or (e) any
Debentures or portions thereof tendered for repurchase (and not withdrawn)
pursuant to Section 3.06.
15
(b) The following provisions shall apply only to Global Debentures:
(i) Each Global Debenture authenticated under this Indenture
shall be registered in the name of the Depositary or a nominee thereof
and delivered to such Depositary or a nominee thereof or Custodian
therefor, and each such Global Debenture shall constitute a single
Debenture for all purposes of this Indenture.
(ii) Notwithstanding any other provision in this Indenture, no
Global Debenture may be exchanged in whole or in part for Debentures
registered, and no transfer of a Global Debenture in whole or in part
may be registered, in the name of any Person other than the Depositary
or a nominee thereof unless (A) the Depositary (i) has notified the
Company that it is unwilling or unable to continue as Depositary for
such Global Debenture and a successor depositary has not been appointed
by the Company within ninety days or (ii) has ceased to be a clearing
agency registered under the Exchange Act, (B) an Event of Default has
occurred and is continuing or (C) the Company, in its sole discretion,
notifies the Trustee in writing that it no longer wishes to have all
the Debentures represented by Global Debentures. Any Global Debenture
exchanged pursuant to clause (A) or (B) above shall be so exchanged in
whole and not in part and any Global Debenture exchanged pursuant to
clause (C) above may be exchanged in whole or from time to time in part
as directed by the Company. Any Debenture issued in exchange for a
Global Debenture or any portion thereof shall be a Global Debenture;
provided that any such Debenture so issued that is registered in the
name of a Person other than the Depositary or a nominee thereof shall
not be a Global Debenture.
(iii) Securities issued in exchange for a Global Debenture or
any portion thereof pursuant to clause (ii) above shall be issued in
definitive, fully registered form, without interest coupons, shall have
an aggregate principal amount equal to that of such Global Debenture 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 any legends required hereunder. Any Global
Debenture to be exchanged in whole shall be surrendered by the
Depositary to the Trustee, as Debenture Registrar. With regard to any
Global Debenture to be exchanged in part, either such Global Debenture
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
Debenture, 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 make
available for delivery the Debenture issuable on such exchange to or
upon the written order of the Depositary or an authorized
representative thereof.
16
(iv) In the event of the occurrence of any of the events
specified in clause (ii) above, the Company will promptly make
available to the Trustee a reasonable supply of certificated Debentures
in definitive, fully registered form, without interest coupons.
(v) Neither any members of, or participants in, the Depositary
("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 Debenture registered in the name of the Depositary or any
nominee thereof, 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
Debenture 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
Debenture.
(vi) At such time as all interests in a Global Debenture have
been redeemed, repurchased, converted, canceled or exchanged for
Debentures in certificated form, such Global Debenture shall, upon
receipt thereof, be canceled by the Trustee in accordance with standing
procedures and instructions existing between the Depositary and the
Custodian. At any time prior to such cancellation, if any interest in a
Global Debenture is redeemed, repurchased, converted, canceled or
exchanged for Debentures in certificated form, the principal amount of
such Global Debenture shall, in accordance with the standing procedures
and instructions existing between the Depositary and the Custodian, be
appropriately reduced, and an endorsement shall be made on such Global
Debenture, by the Trustee or the Custodian, at the direction of the
Trustee, to reflect such reduction.
(c) Every Debenture that bears or is required under this Section
2.05(c) to bear the legend set forth in this Section 2.05(c) (together with any
Common Stock issued upon conversion of the Debentures and required to bear the
legend set forth in Section 2.05(c), collectively, the "RESTRICTED SECURITIES")
shall be subject to the restrictions on transfer set forth in this Section
2.05(c) (including those set forth in the legend below) unless such restrictions
on transfer shall be waived by written consent of the Company, and the Holder of
each such Restricted Security, by such Debentureholder's acceptance thereof,
agrees to be bound by all such restrictions on transfer. As used in Section
17
2.05(c) and 2.05(d), the term "TRANSFER" encompasses any sale, pledge, loan,
transfer or other disposition whatsoever of any Restricted Security or any
interest therein.
Until the expiration of the holding period applicable to sales thereof
under Rule 144(k) under the Securities Act (or any successor provision), any
certificate evidencing such Debenture (and all securities issued in exchange
therefor or substitution thereof, other than Common Stock, if any, issued upon
conversion thereof, which shall bear the legend set forth in Section 2.05(c), if
applicable) shall bear a legend in substantially the following form, unless such
Debenture has been sold pursuant to a registration statement that has been
declared effective under the Securities Act (and which continues to be effective
at the time of such transfer) or pursuant to Rule 144 under the Securities Act
or any similar provision then in force, or unless otherwise agreed by the
Company in writing, with written notice thereof to the Trustee:
THE DEBENTURE EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT AS SET FORTH
IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS
THAT IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT); (2) AGREES THAT IT WILL NOT, PRIOR TO EXPIRATION OF THE HOLDING
PERIOD APPLICABLE TO SALES OF THIS DEBENTURE UNDER RULE 144(K) UNDER THE
SECURITIES ACT (OR ANY SUCCESSOR PROVISION), RESELL OR OTHERWISE TRANSFER THIS
DEBENTURE OR THE COMMON STOCK ISSUABLE UPON CONVERSION OF THIS DEBENTURE EXCEPT
(A) TO IMPAX LABORATORIES, INC. OR ANY SUBSIDIARY THEREOF, (B) TO A QUALIFIED
INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C)
PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE
SECURITIES ACT (IF AVAILABLE) OR (D) PURSUANT TO A REGISTRATION STATEMENT WHICH
HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT (AND WHICH CONTINUES TO BE
EFFECTIVE AT THE TIME OF SUCH TRANSFER); (3) PRIOR TO SUCH TRANSFER (OTHER THAN
A TRANSFER PURSUANT TO CLAUSE 2(D) ABOVE), IT WILL FURNISH TO WACHOVIA BANK,
NATIONAL ASSOCIATION, AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS APPLICABLE), SUCH
CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS THE TRUSTEE MAY
REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT; AND (4) AGREES THAT IT WILL DELIVER TO EACH
PERSON TO WHOM THIS DEBENTURE IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE
18
EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF THIS DEBENTURE PRIOR
TO THE EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THIS DEBENTURE
UNDER RULE 144(k) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION), THE
HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF RELATING
TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS CERTIFICATE TO WACHOVIA BANK,
NATIONAL ASSOCIATION, AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS APPLICABLE). THIS
LEGEND WILL BE REMOVED UPON THE EARLIER OF THE TRANSFER OF THIS DEBENTURE
PURSUANT TO CLAUSE 2(D) ABOVE OR UPON ANY TRANSFER OF THIS DEBENTURE UNDER RULE
144(k) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION). THE INDENTURE
CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF
THIS DEBENTURE IN VIOLATION OF THE FOREGOING RESTRICTION.
Any Debenture (or security issued in exchange or substitution therefor)
as to which such restrictions on transfer shall have expired in accordance with
their terms or as to conditions for removal of the foregoing legend set forth
therein have been satisfied may, upon surrender of such Debenture for exchange
to the Debenture Registrar in accordance with the provisions of this Section
2.05, be exchanged for a new Debenture or Debentures, of like tenor and
aggregate principal amount, which shall not bear the restrictive legend required
by this Section 2.05(c). If the Restricted Security surrendered for exchange is
represented by a Global Debenture bearing the legend set forth in this Section
2.05(c), the principal amount of the legended Global Debenture shall be reduced
by the appropriate principal amount and the principal amount of a Global
Debenture without the legend set forth in this Section 2.05(c) shall be
increased by an equal principal amount. If a Global Debenture without the legend
set forth in this Section 2.05(c) is not then outstanding, the Company shall
execute and the Trustee shall authenticate and deliver an unlegended Global
Debenture to the Depositary.
(d) Until the expiration of the holding period applicable to sales
thereof under Rule 144(k) under the Securities Act (or any successor provision),
any stock certificate representing Common Stock issued upon conversion of any
Debenture shall bear a legend in substantially the following form, unless such
Common Stock has been sold pursuant to a registration statement that has been
declared effective under the Securities Act (and which continues to be effective
at the time of such transfer) or pursuant to Rule 144 under the Securities Act
or any similar provision then in force, or such Common Stock has been issued
upon conversion of Debentures that have been transferred pursuant to a
registration statement that has been declared effective under the Securities Act
or pursuant to Rule 144 under the Securities Act or any similar provision then
in force, or unless otherwise agreed by the Company in writing with written
notice thereof to the transfer agent:
19
THE COMMON STOCK EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT AS SET FORTH
IN THE FOLLOWING SENTENCE. THE HOLDER HEREOF AGREES THAT, UNTIL THE EXPIRATION
OF THE HOLDING PERIOD APPLICABLE TO SALES OF THE COMMON STOCK EVIDENCED HEREBY
UNDER RULE 144(k) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION), (1) IT
WILL NOT RESELL OR OTHERWISE TRANSFER THE COMMON STOCK EVIDENCED HEREBY EXCEPT
(A) TO IMPAX LABORATORIES, INC. OR ANY SUBSIDIARY THEREOF, (B) TO A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN
COMPLIANCE WITH RULE 144A, (C) PURSUANT TO THE EXEMPTION FROM REGISTRATION
PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR (D) PURSUANT TO
A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES
ACT (AND WHICH CONTINUES TO BE EFFECTIVE AT THE TIME OF SUCH TRANSFER); (2)
PRIOR TO SUCH TRANSFER (OTHER THAN A TRANSFER PURSUANT TO CLAUSE 1(D) ABOVE), IT
WILL FURNISH TO STOCKTRANS, INC., AS TRANSFER AGENT (OR A SUCCESSOR TRANSFER
AGENT, AS APPLICABLE), SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION
AS SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS
BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND (3) IT WILL DELIVER TO
EACH PERSON TO WHOM THE COMMON STOCK EVIDENCED HEREBY IS TRANSFERRED (OTHER THAN
A TRANSFER PURSUANT TO CLAUSE 1(D) ABOVE) A NOTICE SUBSTANTIALLY TO THE EFFECT
OF THIS LEGEND. THIS LEGEND WILL BE REMOVED UPON THE EARLIER OF THE TRANSFER OF
THE COMMON STOCK EVIDENCED HEREBY PURSUANT TO CLAUSE 1(D) ABOVE OR UPON ANY
TRANSFER OF THE COMMON STOCK EVIDENCED HEREBY AFTER THE EXPIRATION OF THE
HOLDING PERIOD APPLICABLE TO SALES OF THE SECURITY EVIDENCED HEREBY UNDER RULE
144(k) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION).
Any such Common Stock as to which such restrictions on transfer shall
have expired in accordance with their terms or as to which the conditions for
removal of the foregoing legend set forth therein have been satisfied may, upon
surrender of the certificates representing such shares of Common Stock for
exchange in accordance with the procedures of the transfer agent for the Common
Stock, be exchanged for a new certificate or certificates for a like number of
shares of Common Stock, which shall not bear the restrictive legend required by
this Section 2.05(d).
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(e) Any Debenture or Common Stock issued upon the conversion of a
Debenture that, prior to the expiration of the holding period applicable to
sales thereof under Rule 144(k) under the Securities Act (or any successor
provision), is purchased or owned by the Company or any Affiliate thereof may
not be resold by the Company or such Affiliate unless registered under the
Securities Act or resold pursuant to an exemption from the registration
requirements of the Securities Act in a transaction which results in such
Debentures or Common Stock, as the case may be, no longer being "RESTRICTED
SECURITIES" (as defined under Rule 144).
(f) The Trustee shall have no responsibility or obligation to any Agent
Members or any other Person with respect to the accuracy of the books or
records, or the acts or omissions, of the Depository or its nominee or of any
participant or member thereof, with respect to any ownership interest in the
Debentures or with respect to the delivery to any Agent Member or other Person
(other than the Depositary) of any notice (including any notice of redemption)
or the payment of any amount, under or with respect to such Debentures. All
notices and communications to be given to the Debentureholder and all payments
to be made to Debentureholders under the Debentures shall be given or made only
to or upon the order of the registered Debentureholders (which shall be the
Depository or its nominee in the case of a Global Debenture). The rights of
beneficial owners in any Global Debenture shall be exercised only through the
Depository subject to the customary procedures of the Depository. The Trustee
may rely and shall be fully protected in relying upon information furnished by
the Depository with respect to its Agent Members.
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 Debenture (including any transfers between or among Agent Members in any
Global Indenture) 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.
Section 2.06. Mutilated, Destroyed, Lost or Stolen Debentures. In case
any Debenture shall become mutilated or be destroyed, lost or stolen, the
Company in its discretion may execute, and upon its written request the Trustee
or an authenticating agent appointed by the Trustee shall authenticate and make
available for delivery, a new Debenture, bearing a number not contemporaneously
outstanding, in exchange and substitution for the mutilated Debenture, or in
lieu of and in substitution for the Debenture so destroyed, lost or stolen. In
every case, the applicant for a substituted Debenture shall furnish to the
Company, to the Trustee and, if applicable, to such authenticating agent such
21
security or indemnity as may be required by them to save each of them harmless
for any loss, liability, cost or expense caused by or connected with such
substitution, and, in every case of destruction, loss or theft, the applicant
shall also furnish to the Company, to the Trustee and, if applicable, to such
authenticating agent evidence to their satisfaction of the destruction, loss or
theft of such Debenture and of the ownership thereof.
Following receipt by the Trustee or such authenticating agent, as the
case may be, of satisfactory security or indemnity and evidence, as described in
the preceding paragraph, the Trustee or such authenticating agent may
authenticate any such substituted Debenture and make available for delivery such
Debenture. Upon the issuance of any substituted Debenture, the Company may
require the payment by the Holder of a sum sufficient to cover any tax,
assessment or other governmental charge that may be imposed in relation thereto
and any other expenses connected therewith. In case any Debenture which has
matured or is about to mature or has been called for redemption or has been
tendered for redemption upon a Designated Event (and not withdrawn) or has been
surrendered for repurchase on a Repurchase Date (and not withdrawn) or is to be
converted into Common Stock shall become mutilated or be destroyed, lost or
stolen, the Company may, instead of issuing a substitute Debenture, pay or
authorize the payment of or convert or authorize the conversion of the same
(without surrender thereof except in the case of a mutilated Debenture), as the
case may be, if the applicant for such payment or conversion shall furnish to
the Company, to the Trustee and, if applicable, to such authenticating agent
such security or indemnity as may be required by them to save each of them
harmless for any loss, liability, cost or expense caused by or in connection
with such substitution, and, in every case of destruction, loss or theft, the
applicant shall also furnish to the Company, the Trustee and, if applicable, any
paying agent or conversion agent evidence to their satisfaction of the
destruction, loss or theft of such Debenture and of the ownership thereof.
Every substitute Debenture issued pursuant to the provisions of this
Section 2.06 by virtue of the fact that any Debenture is destroyed, lost or
stolen shall constitute an additional contractual obligation of the Company,
whether or not the destroyed, lost or stolen Debenture shall be found at any
time, and shall be entitled to all the benefits of (but shall be subject to all
the limitations set forth in) this Indenture equally and proportionately with
any and all other Debentures duly issued hereunder. To the extent permitted by
law, all Debentures shall be held and owned upon the express condition that the
foregoing provisions are exclusive with respect to the replacement or payment or
conversion or redemption or repurchase of mutilated, destroyed, lost or stolen
Debentures and shall preclude any and all other rights or remedies
notwithstanding any law or statute existing or hereafter enacted to the contrary
with respect to the replacement or payment or conversion or redemption or
repurchase of negotiable instruments or other securities without their
surrender.
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Section 2.07. Temporary Debentures. Pending the preparation of
Debentures in certificated form, the Company may execute and the Trustee or an
authenticating agent appointed by the Trustee shall, upon the written request of
the Company, authenticate and deliver temporary Debentures (printed or
lithographed). Temporary Debentures shall be issuable in any authorized
denomination, and substantially in the form of the Debentures in certificated
form, but with such omissions, insertions and variations as may be appropriate
for temporary Debentures, all as may be determined by the Company. Every such
temporary Debenture shall be executed by the Company and authenticated by the
Trustee or such authenticating agent upon the same conditions and in
substantially the same manner, and with the same effect, as the Debentures in
certificated form. Without unreasonable delay, the Company will execute and
deliver to the Trustee or such authenticating agent Debentures in certificated
form and thereupon any or all temporary Debentures may be surrendered in
exchange therefor, at each office or agency maintained by the Company pursuant
to Section 6.02 and the Trustee or such authenticating agent shall authenticate
and make available for delivery in exchange for such temporary Debentures an
equal aggregate principal amount of Debentures in certificated form. Such
exchange shall be made by the Company at its own expense and without any charge
therefor. Until so exchanged, the temporary Debentures shall in all respects be
entitled to the same benefits and subject to the same limitations under this
Indenture as Debentures in certificated form authenticated and delivered
hereunder.
Section 2.08. Cancellation of Debentures. All Debentures surrendered
for the purpose of payment, redemption, repurchase, conversion, exchange or
registration of transfer shall, if surrendered to the Company or any paying
agent or any Debenture Registrar or any conversion agent, be surrendered to the
Trustee and promptly canceled by it, or, if surrendered to the Trustee, shall be
promptly canceled by it, and no Debentures shall be issued in lieu thereof
except as expressly permitted by any of the provisions of this Indenture. The
Trustee shall dispose of such canceled Debentures in accordance with its
customary procedures. If the Company shall acquire any of the Debentures, such
acquisition shall not operate as a redemption, repurchase or satisfaction of the
indebtedness represented by such Debentures unless and until the same are
delivered to the Trustee for cancellation.
Section 2.09. CUSIP Numbers. The Company in issuing the Debentures may
use "CUSIP" numbers (if then generally in use), and, if so, the Trustee shall
use "CUSIP" numbers in notices of redemption as a convenience to
Debentureholders; provided that any such notice may state that no representation
is made as to the correctness of such numbers either as printed on the
Debentures or as contained in any notice of a redemption and that reliance may
be placed only on the other identification numbers printed on the Debentures,
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.
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ARTICLE 3
REDEMPTION AND REPURCHASE OF DEBENTURES
Section 3.01. Redemption of Debentures. At any time prior to April 5,
2007, the Debentures may be redeemed at the option of the Company, in whole or
in part, upon notice as set forth in Section 3.02, at the redemption prices,
including the Make-Whole Payments, set forth in the form of Debenture attached
as Exhibit A hereto (the "PROVISIONAL REDEMPTION") if: (1) the Closing Sale
Price has exceeded 130% of the Conversion Price for at least 20 Trading Days in
the 30 consecutive Trading Day period ending on the Trading Day prior to the
date of mailing of the notice of redemption (it being understood for purposes of
this Section 3.01 that the Conversion Price in effect at the close of business
on each of the 30 consecutive Trading Days should be used) and (2) the Shelf
Registration Statement covering resales of the Securities and the Common Stock
is effective and available for use and is expected to remain effective and
available for use for the 30 days following the redemption date, unless
registration is no longer required. At any time on or after April 5, 2007 and
prior to maturity, the Debentures may be redeemed at the option of the Company,
in whole or in part, upon notice as set forth in Section 3.02, at the redemption
prices set forth in the form of Debenture attached as Exhibit A hereto, together
with accrued and unpaid interest, and additional interest paid as Liquidated
Damages, if any, to, but excluding, the date fixed for redemption (the "OPTIONAL
REDEMPTION").
Section 3.02. Notice of Provisional Redemption or Optional Redemption;
Selection of Debentures. In case the Company shall desire to exercise the right
to redeem all or, as the case may be, any part of the Debentures pursuant to
Section 3.01, it shall fix a date for redemption and it or, at its written
request received by the Trustee not fewer than forty-five (45) days prior (or
such shorter period of time as may be acceptable to the Trustee) to the date
fixed for redemption, the Trustee in the name of and at the expense of the
Company, shall mail or cause to be mailed a notice of such redemption not fewer
than thirty (30) nor more than sixty (60) days prior to the redemption date to
each Holder of Debentures so to be redeemed as a whole or in part at its last
address as the same appears on the Debenture Register; provided that if the
Company shall give such notice, it shall also give written notice of the
redemption date to the Trustee. Such mailing shall be by first class mail. The
notice, if mailed in the manner herein provided, shall be conclusively presumed
to have been duly given, whether or not the Holder receives such notice. In any
case, failure to give such notice by mail or any defect in the notice to the
Holder of any Debenture designated for redemption as a whole or in part shall
not affect the validity of the proceedings for the redemption of any other
Debenture. Concurrently with the mailing of any such notice of redemption, the
Company shall issue a press release announcing such redemption, the form and
content of which press release shall be determined by the Company in its sole
discretion. The failure to issue any such press release or any defect therein
shall not affect the validity of the redemption notice or any of the proceedings
for the redemption of any Debenture called for redemption.
24
Each such notice of redemption shall specify the aggregate principal
amount of Debentures to be redeemed, the CUSIP number or numbers of the
Debentures being redeemed, the date fixed for redemption (which shall be a
Business Day), the redemption price at which Debentures are to be redeemed, the
place or places of payment, that payment will be made upon presentation and
surrender of such Debentures, that interest accrued to the date fixed for
redemption will be paid as specified in said notice, and that on and after said
date interest thereon or on the portion thereof to be redeemed will cease to
accrue. Such notice shall state whether the redemption is a Provisional
Redemption or an optional redemption; if the redemption is a Provisional
Redemption, the amount of the Make-Whole Payment and whether the Make-Whole
Payment will be paid in Common Stock, cash or a combination of cash and Common
Stock (and the applicable ratio of cash and Common Stock). Such notice shall
also state the current Conversion Rate and the date on which the right to
convert such Debentures or portions thereof into Common Stock will expire. If
fewer than all the Debentures are to be redeemed, the notice of redemption shall
identify the Debentures to be redeemed (including CUSIP numbers, if any). In
case any Debenture is to be redeemed in part only, the notice of redemption
shall state the portion of the principal amount thereof to be redeemed and shall
state that, on and after the redemption date, upon surrender of such Debenture,
a new Debenture or Debentures in principal amount equal to the unredeemed
portion thereof will be issued.
On or prior to the redemption date specified in the notice of
redemption given as provided in this Section 3.02, the Company will deposit with
the Trustee or with one or more paying agents (or, if the Company is acting as
its own paying agent, set aside, segregate and hold in trust as provided in
Section 6.04) an amount of money in immediately available funds sufficient to
redeem on the redemption date all the Debentures (or portions thereof) so called
for redemption (other than those theretofore surrendered for conversion into
Common Stock) at the appropriate redemption price, together with accrued
interest to, but excluding, the redemption date; provided that if such payment
is made on the redemption date it must be received by the Trustee or paying
agent, as the case may be, by 10:00 a.m. New York City time on such date. If any
Debenture called for redemption is converted pursuant hereto prior to such
redemption date, any money deposited with the Trustee or any paying agent or so
segregated and held in trust for the redemption of such Debenture shall be paid
to the Company upon its written request, or, if then held by the Company, shall
be discharged from such trust. Whenever any Debentures are to be redeemed, the
Company will give the Trustee written notice in the form of an Officers'
Certificate not fewer than forty-five (45) days (or such shorter period of time
as may be acceptable to the Trustee) prior to the redemption date as to the
aggregate principal amount of Debentures to be redeemed.
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If less than all of the outstanding Debentures are to be redeemed, the
Trustee shall select the Debentures or portions thereof of the Global Debenture
or the Debentures in certificated form to be redeemed (in principal amounts of
$1,000 or multiples thereof) by lot. If any Debenture selected for partial
redemption is submitted for conversion in part after such selection, the portion
of such Debenture submitted for conversion shall be deemed (so far as may be
possible) to be the portion to be selected for redemption. The Debentures (or
portions thereof) so selected shall be deemed duly selected for redemption for
all purposes hereof, notwithstanding that any such Debenture is submitted for
conversion in part before the mailing of the notice of redemption.
Upon any redemption of less than all of the outstanding Debentures, the
Company and the Trustee may (but need not), solely for purposes of determining
the pro rata allocation among such Debentures as are unconverted and outstanding
at the time of redemption, treat as outstanding any Debentures surrendered for
conversion during the period of fifteen (15) days next preceding the mailing of
a notice of redemption and may (but need not) treat as outstanding any Debenture
authenticated and delivered during such period in exchange for the unconverted
portion of any Debenture converted in part during such period.
Section 3.03. Payment of Debentures Called For Redemption by the
Company. If notice of redemption has been given as provided in Section 3.02, the
Debentures or portion of Debentures with respect to which such notice has been
given shall, unless converted into Common Stock pursuant to the terms hereof,
become due and payable on the date fixed for redemption and at the place or
places stated in such notice at the applicable redemption price, together with
interest accrued to (but excluding) the redemption date, and on and after said
date (unless the Company shall default in the payment of such Debentures at the
redemption price, together with interest accrued to said date) interest on the
Debentures or portion of Debentures so called for redemption shall cease to
accrue and, after the close of business on the Business Day immediately
preceding the redemption date (unless the Company shall default in the payment
of such Debentures at the redemption price, together with interest accrued to
said date) such Debentures shall cease to be convertible into Common Stock and,
except as provided in Section 9.05 and Section 14.04, to be entitled to any
benefit or security under this Indenture, and the Holders thereof shall have no
right in respect of such Debentures except the right to receive the redemption
price thereof and unpaid interest to (but excluding) the redemption date. On
presentation and surrender of such Debentures at a place of payment in said
notice specified, the said Debentures or the specified portions thereof shall be
paid and redeemed by the Company at the applicable redemption price, together
with interest accrued thereon to, but excluding, the redemption date; provided
that if the applicable redemption date is an interest payment date, the interest
payable on such interest payment date shall be paid on such interest payment
date to the holders of record of such Debentures on the applicable Record Date
instead of the holders surrendering such Debentures for redemption on such date.
26
Upon presentation of any Debenture redeemed in part only, the Company
shall execute and the Trustee shall authenticate and make available for delivery
to the Holder thereof, at the expense of the Company, a new Debenture or
Debentures, of authorized denominations, in principal amount equal to the
unredeemed portion of the Debentures so presented.
Notwithstanding the foregoing, the Trustee shall not redeem any
Debentures or mail any notice of redemption during the continuance of a default
in payment of interest or premium, if any, on the Debentures. If any Debenture
called for redemption shall not be so paid upon surrender thereof for
redemption, the principal and premium, if any, shall, until paid or duly
provided for, bear interest from the redemption date at a rate equal to 1% per
annum plus the rate borne by the Debenture and such Debenture shall remain
convertible into Common Stock until the principal and premium, if any, and
interest shall have been paid or duly provided for.
Section 3.04. Conversion Arrangement on Call for Redemption. In
connection with any redemption of Debentures, the Company may arrange for the
purchase and conversion of any Debentures by an agreement with one or more
investment banks or other purchasers to purchase such Debentures by paying to
the Trustee in trust for the Debentureholders, before the date fixed for
redemption, an amount not less than the applicable redemption price, together
with interest accrued to, but excluding, the date fixed for redemption, of such
Debentures. Notwithstanding anything to the contrary contained in this Article
3, the obligation of the Company to pay the redemption price of such Debentures,
together with interest accrued to, but excluding, the date fixed for redemption,
shall be deemed to be satisfied and discharged to the extent such amount is so
paid by such purchasers. If such an agreement is entered into, a copy of which
will be filed with the Trustee prior to the date fixed for redemption, any
Debentures not duly surrendered for conversion by the Holders thereof may, at
the option of the Company, be deemed, to the fullest extent permitted by law,
acquired by such purchasers from such Holders and (notwithstanding anything to
the contrary contained in Article 16) surrendered by such purchasers for
conversion, all as of immediately prior to the close of business on the date
fixed for redemption (and the right to convert any such Debentures shall be
extended through such time), subject to payment of the above amount as
aforesaid. At the direction of the Company, the Trustee shall hold and dispose
of any such amount paid to it in the same manner as it would monies deposited
with it by the Company for the redemption of Debentures. Without the Trustee's
prior written consent, no arrangement between the Company and such purchasers
for the purchase and conversion of any Debentures shall increase or otherwise
affect any of the powers, duties, responsibilities or obligations of the Trustee
as set forth in this Indenture.
Section 3.05. Repurchase at Option of Holders Upon a Designated Event.
If there shall occur any Designated Event at any time prior to maturity of the
Debentures, then each Debentureholder shall have the right, at such Holder's
option, to require the Company to redeem all of such Holder's Debentures then
outstanding, or any portion thereof that is a multiple of $1,000 principal
amount, on the date specified by the Company (the "DESIGNATED EVENT REPURCHASE
27
DATE") that is not less than twenty (20) nor more than thirty-five (35) business
days after the date of the Designated Event Notice (as defined in Section
3.05(b)) of such Designated Event (or, if such 35th day is not a Business Day,
the next succeeding Business Day) at a redemption price equal to 100% of the
principal amount thereof, together with accrued and unpaid interest to, but
excluding, the Designated Event Repurchase Date; provided that if such
Designated Event Repurchase Date falls after a Record Date and on or prior the
corresponding interest payment date, then the interest payable on such interest
payment date shall be paid to the holders of record of the Debentures on the
applicable Record Date instead of the holders surrendering the Debentures for
redemption on such date.
A "FUNDAMENTAL CHANGE" will be deemed to have occurred at any time
after the Debentures are originally issued when any of the following events
shall occur:
(1) a "person" or "group" within the meaning of Section 13(d) of the
Exchange Act other than the Company, its subsidiaries or the Company's or its
subsidiaries' employee benefit plans, files a Schedule TO or any schedule, form
or report under the Exchange Act disclosing that such person or group has become
the direct or indirect ultimate "beneficial owner," as defined in Rule 13d-3
under the Exchange Act, of the Common Stock representing more than 50% of the
voting power of the Company's Common Stock entitled to vote generally in the
election of directors; or
(2) consummation of any share exchange, consolidation or merger of the
Company pursuant to which its Common Stock will be converted into cash,
securities or other property or any sale, lease or other transfer in one
transaction or a series of transactions of all or substantially all of the
consolidated assets of the Company and its subsidiaries, taken as a whole, to
any person other than the Company or one or more of its subsidiaries; provided,
however, that a transaction where the holders of the Company's Common Stock
immediately prior to such transaction have directly or indirectly, more than 50%
of the aggregate voting power of all classes of Common Stock of the continuing
or surviving corporation or transferee entitled to vote generally in the
election of directors immediately after such event shall not be a Fundamental
Change; or
(3) Continuing Directors cease to constitute at least a majority of the
Board of Directors.
(ii) Notwithstanding any provision hereof to the contrary, no
Designated Event shall be deemed to have occurred in respect of the foregoing if
(1) the Closing Sale Price for any five Trading Days within the ten (10)
consecutive Trading Days ending immediately before the later of the Fundamental
Change or the public announcement of the Fundamental Change, equals or exceeds
105% of the Conversion Price of the Debentures in effect immediately before the
28
Fundamental Change or the public announcement of the Fundamental Change, or (2)
at least 90% of the consideration (excluding cash payments for fractional
shares) in the transaction or transactions constituting the Fundamental Change
consists of shares of capital stock traded on a national securities exchange or
quoted on the Nasdaq National Market or which will be so traded or quoted when
issued or exchanged in connection with a Fundamental Change (such securities
being referred to as "PUBLICLY TRADED SECURITIES"), and, as a result of the
transaction or transactions, the Debentures become convertible into such
Publicly Traded Securities (excluding cash payments for fractional shares).
For purposes of this Section 3.05(a), (a) "CONTINUING DIRECTORS" means
a director who either was a member of our board of directors on the date of this
Indenture who becomes a member of our board of directors subsequent to that date
and whose appointment, election or nomination for election by our stockholders
is duly approved by a majority of the continuing directors on our board of
directors at the time of such approval, either by a specific vote or by approval
of the proxy statement issued by us on behalf of the board of directors in which
such individual is named as nominee for director and (b) the "CAPITAL STOCK" of
any Person means any and all shares, interests, participations or other
equivalents however designated of corporate stock or other equity
participations, including partnership interests, whether general or limited, of
such Person and any rights (other than debt securities convertible or
exchangeable into any equity interest), warrants or options to acquire an equity
interest in such Person.
Upon presentation of any Debenture redeemed in part only, the Company
shall execute and, upon the Company's written direction to the Trustee, the
Trustee shall authenticate and make available for delivery to the Holder
thereof, at the expense of the Company, a new Debenture or Debentures, of
authorized denominations, in aggregate principal amount equal to the unredeemed
portion of the Debentures presented.
(b) On or before the fifteenth day after the occurrence of a Designated
Event, the Company or at its written request (which must be received by the
Trustee at least five (5) Business Days prior to the date the Trustee is
requested to give notice as described below, unless the Trustee shall agree in
writing to a shorter period), the Trustee, in the name of and at the expense of
the Company, shall mail or cause to be mailed to all Holders on the date of the
Designated Event a notice (the "DESIGNATED EVENT NOTICE") of the occurrence of
such Designated Event and of the redemption right at the option of the Holders
arising as a result thereof. Such notice shall be mailed in the manner and with
the effect set forth in the first paragraph of Section 3.02 (without regard for
the time limits set forth therein). If the Company shall give such notice, the
Company shall also deliver a copy of the Designated Event Company Notice to the
Trustee at such time as it is mailed to Debentureholders. Concurrently with the
mailing of any Designated Event Notice, the Company shall issue a press release
announcing such Designated Event referred to in the Designated Event Notice, the
form and content of which press release shall be determined by the Company in
its sole discretion. The failure to issue any such press release or any defect
29
therein shall not affect the validity of the Designated Event Notice or any
proceedings for the redemption of any Debenture which any Debentureholder may
elect to have the Company redeem as provided in this Section 3.05.
Each Designated Event Notice shall state, among other things:
(1) briefly, the events causing the Designated Event;
(2) the date of the such Designated Event;
(3) that the Holder must exercise the redemption right prior to the
close of business on the Business Day prior to the Designated Event Repurchase
Date (the "DESIGNATED EVENT EXPIRATION TIME");
(4) the price at which the Company shall be obligated to redeem
Debentures, including the amount of interest accrued and Liquidated Damages, if
any, on each Debenture to the Designated Event Repurchase Date;
(5) the Designated Event Repurchase Date;
(6) the name and address the agent to whom the Holder is to surrender
such Holder's debentures;
(7) the Conversion Rate and any adjustments to the Conversion Rate;
(8) that the Holder can only convert surrendered Debentures if the
Holder withdraws any Debentures surrendered prior to the Designated Event
Expiration Time in accordance with the terms of the Indenture;
(9) a description of the procedure which a Holder must follow to
exercise such redemption right and to withdraw any surrendered Debentures; and
(10) the CUSIP number or numbers of the Debentures (if then generally
in use).
No failure of the Company to give the foregoing notices and no defect
therein shall limit the Debentureholders' redemption rights or affect the
validity of the proceedings for the redemption of the Debentures pursuant to
this Section 3.05.
(c) For a Debenture to be so redeemed at the option of the Holder, the
Company must receive at the office or agency of the Company maintained for that
purpose or, at the option of such Holder, the Corporate Trust Office, the form
entitled "DESIGNATED EVENT REPURCHASE NOTICE" duly completed, on or before the
Designated Event Expiration Time. All questions as to the validity, eligibility
(including time of receipt) and acceptance of any Debenture for redemption shall
be determined by the Company, whose determination shall be final and binding
absent manifest error.
30
The Designated Event Repurchase Notice shall state, among other things:
(1) the certificate numbers of the Debentures that the Holder will
deliver to be purchased or the appropriate Depositary procedures if certificated
Debentures have not been issued;
(2) the portion of the principal amount of Debentures that the Holder
will deliver to be purchased, which portion must be $1,000 or an integral
multiple of $1,000; and
(3) that the Debentures shall be purchased pursuant to the terms and
conditions specified in this Article 3 of the Debentures and in this Indenture.
(d) For a Debenture to be so redeemed at the option of a Holder, the
Debentures must be delivered or transferred by book-entry to the Trustee (or
other paying agent appointed by the Company) at any time after delivery of the
Designated Event Repurchase Notice (together with all necessary endorsements)
but on or prior to the Designated Event Expiration Time at the Corporate Trust
Office of the Trustee (or other paying agent appointed by the Company) in the
Borough of Manhattan as provided in Section 6.02, such delivery being a
condition to the receipt by the Holder of the purchase price therefor; provided
that such purchase price shall be so paid pursuant to this Section 3.05(d) only
if the Debenture so delivered to the Trustee (or other paying agent appointed by
the Company) shall conform in all respects to the description thereof in the
related Designated Event Repurchase Notice.
The Company shall purchase from the Holder thereof, pursuant to this
Section 3.06, a portion of a Debenture, if the principal amount of such portion
is $1,000 or a whole multiple of $1,000. Provisions of this Indenture that apply
to the purchase of all of a Debenture also apply to the purchase of such portion
of such Debenture.
Any purchase by the Company contemplated pursuant to the provisions of
this Section 3.06 shall be consummated by the delivery of the consideration to
be received by the Holder promptly following the later of the Repurchase Date
and the time of the book-entry transfer or delivery of the Debenture.
Notwithstanding anything herein to the contrary, any Holder delivering
the Designated Event Repurchase Notice contemplated by this Section 3.05(c)
shall have the right to withdraw such Designated Event Repurchase Notice at any
time prior to the close of business on the Business Day immediately preceding
the Designated Event Repurchase Date by delivery of a written notice of
withdrawal in accordance with Section 3.08.
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The Trustee (or other paying agent appointed by the Company) shall
promptly notify the Company of the receipt by it of any Designated Event
Repurchase Notice or written notice of withdrawal thereof.
(e) In the case of a reclassification, change, consolidation, merger,
combination, sale or conveyance to which Section 16.06 applies, in which the
Common Stock of the Company is changed or exchanged as a result into the right
to receive stock, securities or other property or assets (including cash), which
includes shares of Common Stock of the Company or shares of common stock of
another Person that are, or upon issuance will be, traded on a United States
national securities exchange or approved for trading on an established automated
over-the-counter trading market in the United States and such shares constitute
at the time such change or exchange becomes effective in excess of 50% of the
aggregate fair market value of such stock, securities or other property or
assets (including cash) (as determined by the Company, which determination shall
be conclusive and binding), then the Person formed by such consolidation or
resulting from such merger or which acquires such assets, as the case may be,
shall execute and deliver to the Trustee a supplemental indenture (accompanied
by an Opinion of Counsel that such supplemental indenture complies with the
Trust Indenture Act as in force at the date of execution of such supplemental
indenture) modifying the provisions of this Indenture relating to the right of
Holders of the Debentures to cause the Company to repurchase the Debentures
following a Designated Event, including without limitation the applicable
provisions of this Section 3.05 and the definitions of Common Stock and
Designated Event, as appropriate, as determined in good faith by the Company
(which determination shall be conclusive and binding), to make such provisions
apply to such other Person if different from the Company and the common stock
issued by such Person (in lieu of the Company and the Common Stock of the
Company).
(f) The Company will comply with the provisions of Rule 13e-4 and any
other tender offer rules under the Exchange Act to the extent then applicable in
connection with the redemption rights of the Holders of Debentures in the event
of a Designated Event.
Section 3.06. Repurchase of Debentures by the Company at Option of the
Holder. Debentures then outstanding shall be purchased by the Company pursuant
to the terms of the Debentures at the option of the Holder on April 1, 2009,
April 1, 2014 and April 1, 2019 (each a "REPURCHASE DATE"), at a purchase price
of 100% of the principal, plus, in each case, any accrued and unpaid interest
to, but excluding, the Repurchase Date, subject to the provisions of Section
3.07(a). Repurchases of Debentures under this Section 3.06 shall be made, at the
option of the Holder thereof, upon:
(y) delivery to the Trustee (or other paying agent appointed by the
Company) by a Holder of a duly completed notice (the "REPURCHASE NOTICE") during
the period beginning at any time from the opening of business on the date that
is twenty-three Business Days prior to the Repurchase Date until the close of
business on the date that is three Business Days prior to the Repurchase Date
(the "REPURCHASE EXPIRATION TIME") that states, among other things:
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(1) the certificate numbers of the Debentures that the Holder will
deliver to be purchased or the appropriate Depositary procedures if certificated
Debentures have not been issued;
(2) the portion of the principal amount of Debentures that the Holder
will deliver to be purchased, which portion must be $1,000 or an integral
multiple of $1,000; and
(3) that the Debentures shall be purchased pursuant to the terms and
conditions specified in this Section 3 of the Debentures and in this Indenture;
and
(z) delivery or book-entry transfer of the Debentures to the Trustee
(or other paying agent appointed by the Company) at any time after delivery of
the Repurchase Notice (together with all necessary endorsements) but on or prior
to the Repurchase Expiration Time at the Corporate Trust Office of the Trustee
(or other paying agent appointed by the Company) in the Borough of Manhattan as
provided in Section 6.02, such delivery being a condition to receipt by the
Holder of the purchase price therefor; provided that such purchase price shall
be so paid pursuant to this Section 3.06 only if the Debenture so delivered to
the Trustee (or other paying agent appointed by the Company) shall conform in
all respects to the description thereof in the related Repurchase Notice.
The Company shall purchase from the Holder thereof, pursuant to this
Section 3.06, a portion of a Debenture, if the principal amount of such portion
is $1,000 or a whole multiple of $1,000. Provisions of this Indenture that apply
to the purchase of all of a Debenture also apply to the purchase of such portion
of such Debenture.
Any purchase by the Company contemplated pursuant to the provisions of
this Section 3.06 shall be consummated by the delivery of the consideration to
be received by the Holder promptly following the later of the Repurchase Date
and the time of the book-entry transfer or delivery of the Debenture.
Notwithstanding anything herein to the contrary, any Holder delivering
to the Trustee (or other paying agent appointed by the Company) the Repurchase
Notice contemplated by this Section 3.06 shall have the right to withdraw such
Repurchase Notice at any time prior to the close of business on the date that is
three Business Days prior to the Repurchase Date by delivery of a written notice
of withdrawal to the Trustee (or other paying agent appointed by the Company) in
accordance with Section 3.08.
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The Trustee (or other paying agent appointed by the Company) shall
promptly notify the Company of the receipt by it of any Repurchase Notice or
written notice of withdrawal thereof.
Section 3.07. Company Repurchase Notice.
(a) The Debentures to be repurchased on the Repurchase Date pursuant to
Section 3.06 will be paid for in cash.
At least three Business Days before the Company Repurchase Notice Date,
the Company shall deliver an Officers' Certificate to the Trustee specifying:
(i) the information required by Section 3.07(b) in the Company
Repurchase Notice, and
(ii) whether the Company desires the Trustee to give the
Company Repurchase Notice required by Section 3.07(b).
(b) In connection with any repurchase of Debentures, the Company shall,
no less than 23 Business Days prior to the Repurchase Date (the "COMPANY
REPURCHASE NOTICE DATE"), give notice to Holders at their addresses shown in the
Debenture Register setting forth information specified in this Section 3.07(b)
(the "COMPANY REPURCHASE NOTICE"). The Company will also give notice to
beneficial owners as required by applicable law.
The Company Repurchase Notice shall:
(1) state the repurchase price and the Repurchase Date to
which the Company Repurchase Notice relates;
(2) include a form of Repurchase Notice;
(3) state the name and address of the Trustee (or other paying
agent or conversion agent appointed by the Company);
(4) state that Debentures must be surrendered to the Trustee
(or other paying agent appointed by the Company) to collect the
purchase price;
(5) if the Debentures are then convertible, state that
Debentures as to which a Repurchase Notice has been given may be
converted only if the Repurchase Notice is withdrawn in accordance with
the terms of this Indenture; and
(6) state the CUSIP number of the Debentures.
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The Company Repurchase Notice may be given by the Company or, at the Company's
request, the Trustee shall give such Company Repurchase Notice in the Company's
name and at the Company's expense.
(c) The Company will comply with the provisions of Rule 13e-4 and any
other tender offer rules under the Exchange Act to the extent then applicable in
connection with the repurchase rights of the Holders of Debentures.
Section 3.08. Effect of Designated Event Repurchase Notice or
Repurchase Notice. Upon receipt by the Trustee (or other paying agent appointed
by the Company) of the Designated Event Repurchase Notice or Repurchase Notice
specified in Section 3.05 or Section 3.06, as applicable, the Holder of the
Debenture in respect of which such Repurchase Notice, as the case may be, was
given shall (unless such Designated Event Repurchase Notice or Repurchase
Notice, as the case may be, is validly withdrawn) thereafter be entitled to
receive solely the purchase price with respect to such Debenture. Such purchase
price shall be paid to such Holder, subject to receipt of funds and/or
Debentures by the Trustee (or other paying agent appointed by the Company),
promptly following the later of (x) the Designated Event Repurchase Date or
Repurchase Date, as the case may be, with respect to such Debenture (provided
the Holder has satisfied the conditions in Section 3.05 or Section 3.06, as
applicable) and (y) the time of delivery of such Debenture to the Trustee (or
other paying agent appointed by the Company) by the Holder thereof in the manner
required by Section 3.05 or Section 3.06, as applicable. Debentures in respect
of which a Designated Event Repurchase Notice or Repurchase Notice has been
given by the Holder thereof may not be converted pursuant to Article 16 hereof
on or after the date of the delivery of such Designated Event Repurchase Notice
or Repurchase Notice, as the case may be, unless such Designated Event
Repurchase Notice or Repurchase Notice, as the case may be, has first been
validly withdrawn.
A Designated Event Repurchase Notice or Repurchase Notice may be
withdrawn by means of a written notice of withdrawal delivered to the office of
the Trustee (or other paying agent appointed by the Company) in accordance with
the Designated Event Repurchase Notice or Repurchase Notice, as the case may be,
at any time prior to the close of business on the Business Day immediately
preceding the Designated Event Repurchase Date or at any time prior to the close
of business on the date that is three Business Days prior to the Repurchase
Date, specifying:
(a) the certificate number, if any, of the Debenture in respect of
which such notice of withdrawal is being submitted, or the appropriate
Depositary information if the Debenture in respect of which such notice of
withdrawal is being submitted is represented by a Global Debenture,
(b) the principal amount of the Debenture with respect to which such
notice of withdrawal is being submitted, and
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(c) the principal amount, if any, of such Debenture which remains
subject to the original Designated Event Repurchase Notice or Repurchase Notice,
as the case may be, and which has been or will be delivered for purchase by the
Company.
A written notice of withdrawal of a Designated Event Repurchase Notice
or Repurchase Notice, as the case may be, may be in the form set forth in the
preceding paragraph.
Section 3.09. Deposit of Purchase Price. (a) Prior to 10:00 a.m. (New
York City Time) on the Business Day following the Designated Event Repurchase
Date or Repurchase Date, as the case may be, the Company shall deposit with the
Trustee (or other paying agent appointed by the Company; 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 6.04) an amount of
funds (in immediately available funds if deposited on such Business Day),
sufficient to pay the aggregate purchase price of all the Debentures or portions
thereof that are to be purchased as of the Designated Event Repurchase Date or
the Repurchase Date, as applicable.
(b) If the Trustee or other paying agent appointed by the Company, or
the Company or a Subsidiary or Affiliate of either of them, if such entity is
acting as the paying agent, holds funds sufficient to pay the aggregate purchase
price of all the Debentures, or portions thereof that are to be purchased as of
the Designated Event Repurchase Date or the Repurchase Date, as applicable, on
or after the Designated Event Repurchase Date or the Repurchase Date, as
applicable (i) the Debentures will cease to be outstanding, (ii) interest on the
Debentures will cease to accrue, and (iii) all other rights of the Holders of
such Debentures will terminate, whether or not book-entry transfer of the
Debentures has been made or the Debentures have been delivered to the Trustee or
paying agent, other than the right to receive the repurchase price upon delivery
of the Debentures.
Section 3.10. Debentures Repurchased in Part. Upon presentation of any
Debenture repurchased only in part, the Company shall execute and the Trustee
shall authenticate and make available for delivery to the Holder thereof, at the
expense of the Company, a new Debenture or Debentures, of any authorized
denomination, in aggregate principal amount equal to the unrepurchased portion
of the Debentures presented.
Section 3.11. Repayment to the Company. The Trustee (or other paying
agent appointed by the Company) shall return to the Company any funds that
remains unclaimed as provided in Section 12 of the Debentures, together with
interest, if any, thereon, held by them for the payment of the purchase price;
provided that to the extent that the aggregate amount of funds deposited by the
Company pursuant to Section 3.09 exceeds the aggregate purchase price of the
Debentures or portions thereof which the Company is obligated to purchase as of
the Designated Event Repurchase Date or the Repurchase Date then, unless
36
otherwise agreed in writing with the Company, promptly after the Business Day
following the Designated Event Repurchase Date or the Repurchase Date, as the
case may be, the Trustee shall return any such excess to the Company.
ARTICLE 4
SUBORDINATION OF DEBENTURES
Section 4.01. Agreement of Subordination. The Company covenants and
agrees, and each Holder of Debentures issued hereunder by its acceptance thereof
likewise covenants and agrees, that all Debentures shall be issued subject to
the provisions of this Article 4, and each Person holding any Debentures,
whether upon original issue or upon registration of transfer, assignment or
exchange thereof, accepts and agrees to be bound by such provisions.
The payment of the principal of, premium, if any, and interest on all
Debentures (including, but not limited to, the redemption or repurchase price
with respect to the Debentures subject to redemption or repurchase in accordance
with Article 3 as provided in this Indenture) issued hereunder shall, to the
extent and in the manner hereinafter set forth, be subordinated and subject in
right of payment to the prior payment in full of all Senior Indebtedness,
whether outstanding at the date of this Indenture or thereafter incurred.
No provision of this Article 4 shall prevent the occurrence of any
default or Event of Default hereunder or have any effect on the rights of the
Holders of the Debentures or the Trustee to accelerate the maturity of the
Debentures.
Section 4.02. Payments to Debentureholders. No payment shall be made
with respect to the principal of, premium, if any, or interest on the Debentures
(including, but not limited to, the redemption or repurchase price with respect
to the Debentures subject to redemption or repurchase in accordance with Article
3, as provided in this Indenture), except payments and distributions made by the
Trustee as permitted by the first or second paragraph of Section 4.05, if:
(i) a default in the payment of principal, premium, if any,
interest, rent or other obligations in respect of Designated Senior
Indebtedness occurs and is continuing (or, in the case of Designated
Senior Indebtedness for which there is a period of grace, in the event
of such a default that continues beyond the period of grace, if any,
specified in the instrument or lease evidencing such Designated Senior
Indebtedness) (a "PAYMENT DEFAULT"); or
(ii) a default, other than a Payment Default, on any Designated
Senior Indebtedness occurs and is continuing (or would occur as a
result of such payment; provided in that case that the Company has
notified the Trustee that such default would result from such payment
prior to the time that the Trustee is required to make such payment)
that then permits holders of such Designated Senior Indebtedness to
37
accelerate its maturity (or in the case of any lease that is Designated
Senior Indebtedness, a default occurs and is continuing that permits
the lessor to either terminate the lease or require the Company to make
an irrevocable offer to terminate the lease following an event of
default thereunder) and the Trustee receives a notice of the default (a
"PAYMENT BLOCKAGE NOTICE") from a holder of Designated Senior
Indebtedness or a Representative of Designated Senior Indebtedness (a
"NON-PAYMENT DEFAULT").
If the Trustee receives any Payment Blockage Notice pursuant to clause
(ii) above, no subsequent Payment Blockage Notice shall be effective for
purposes of this Section 4.02 unless and until at least 365 days shall have
elapsed since the initial effectiveness of the immediately prior Payment
Blockage Notice. No Non-Payment Default that existed or was continuing on the
date of delivery of any Payment Blockage Notice to the Trustee shall be, or be
made, the basis for a subsequent Payment Blockage Notice.
The Company may and shall resume payments on and distributions in
respect of the Debentures (including, but not limited to, the redemption price
with respect to the Debentures to be redeemed) upon the earlier of:
(1) in the case of a Payment Default, the date upon which any such
Payment Default is cured or waived or ceases to exist, or
(2) in the case of a Non-Payment Default, the earlier of (a) the
date upon which such default is cured or waived or ceases to exist
or (b) 179 days after the applicable Payment Blockage Notice is
received by the Trustee if the maturity of such Designated Senior
Indebtedness has not been accelerated (or in the case of any lease,
179 days after notice is received if the Company has not received
notice that the lessor under such lease has exercised its right to
terminate the lease or require the Company to make an irrevocable
offer to terminate the lease following an event of default
thereunder), unless this Article 4 otherwise prohibits the payment
or distribution at the time of such payment or distribution.
Upon any payment by the Company, or distribution of assets of the
Company of any kind or character, whether in cash, property or securities, to
creditors upon any dissolution or winding up or liquidation or reorganization of
the Company, whether voluntary or involuntary or in bankruptcy, insolvency,
receivership or other proceedings, all amounts due or to become due upon all
Senior Indebtedness shall first be paid in full in cash or other payment
satisfactory to the holders of such Senior Indebtedness before any payment is
made on account of the principal of, premium, if any, or interest (including
Liquidated Damages, if any) on the Debentures (except payments made pursuant to
Article 14 from monies deposited with the Trustee pursuant thereto prior to
commencement of proceedings for such dissolution, winding up, liquidation or
38
reorganization unless the Trustee has received notice to the contrary in
accordance with Section 4.05), and upon any such dissolution or winding up or
liquidation or reorganization of the Company or bankruptcy, insolvency,
receivership or other similar proceeding, any payment by the Company, or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities, to which the Holders of the Debentures or the Trustee
would be entitled, except for the provisions of this Article 4, shall (except as
aforesaid) be paid by the Company or by any receiver, trustee in bankruptcy,
liquidating trustee, agent or other Person making such payment or distribution,
or by the Holders of the Debentures or by the Trustee under this Indenture if
received by them or it, directly to the holders of Senior Indebtedness (pro rata
to such holders on the basis of the respective amounts of Senior Indebtedness
held by such holders, or as otherwise required by law or a court order) or their
Representative or Representatives, as their respective interests may appear, to
the extent necessary to pay all Senior Indebtedness in full, in cash or other
payment satisfactory to the holders of such Senior Indebtedness, after giving
effect to any concurrent payment or distribution to or for the holders of Senior
Indebtedness, before any payment or distribution is made to the Holders of the
Debentures or to the Trustee.
For purposes of this Article 4, the words, "CASH, PROPERTY OR
SECURITIES" shall not be deemed to include shares of Common Stock of the Company
as reorganized or readjusted, or securities of the Company or any other
corporation provided for by a plan of reorganization or readjustment, the
payment of which is subordinated at least to the extent provided in this Article
4 with respect to the Debentures to the payment of all Senior Indebtedness which
may at the time be outstanding; provided that (i) the Senior Indebtedness is
assumed by the new corporation, if any, resulting from any reorganization or
readjustment, and (ii) the rights of the holders of Senior Indebtedness (other
than leases which are not assumed by the Company or the new corporation, as the
case may be) are not, without the consent of such holders, altered by such
reorganization or readjustment. The consolidation of the Company with, or the
merger of the Company into, another corporation or the liquidation or
dissolution of the Company following the conveyance or transfer of its property
as an entirety, or substantially as an entirety, to another Person upon the
terms and conditions provided for in Article 13 shall not be deemed a
dissolution, winding-up, liquidation or reorganization for the purposes of this
Section 4.02 if such other Person shall, as a part of such consolidation,
merger, conveyance or transfer, comply with the conditions stated in Article 13.
In the event of the acceleration of the Debentures because of an Event
of Default, no payment or distribution shall be made to the Trustee or any
Holder of Debentures in respect of the principal of, premium, if any, or
interest on the Debentures (including, but not limited to, the redemption price
with respect to the Debentures called for redemption in accordance with Section
3.02 or submitted for redemption in accordance with Section 3.05, as the case
may be, as provided in this Indenture), except payments and distributions made
39
by the Trustee as permitted by the first or second paragraph of Section 4.05,
until all Senior Indebtedness has been paid in full in cash or other payment
satisfactory to the holders of Senior Indebtedness or such acceleration is
rescinded in accordance with the terms of this Indenture. If payment of the
Debentures is accelerated because of an Event of Default, the Company or, at the
Company's request and expense, the Trustee shall promptly notify holders of
Senior Indebtedness of the acceleration.
In the event that, notwithstanding the foregoing provisions, any
payment or distribution of assets of the Company of any kind or character,
whether in cash, property or securities (including, without limitation, by way
of setoff or otherwise), prohibited by the foregoing provisions in this Section
4.02, shall be received by the Trustee or the Holders of the Debentures before
all Senior Indebtedness is paid in full in cash or other payment satisfactory to
the holders of such Senior Indebtedness, or provision is made for such payment
thereof in accordance with its terms in cash or other payment satisfactory to
the holders of such Senior Indebtedness, to the extent that the Trustee or any
Holder of the Debentures has acquired notice, by whatever means, that all Senior
Indebtedness has not been paid in full, such payment or distribution shall be
held in trust for the benefit of and shall be paid over or delivered to the
holders of Senior Indebtedness or their Representative or Representatives, as
their respective interests may appear, as calculated by the Company, for
application to the payment of any Senior Indebtedness remaining unpaid to the
extent necessary to pay all Senior Indebtedness in full in cash or other payment
satisfactory to the holders of such Senior Indebtedness, after giving effect to
any concurrent payment or distribution to or for the holders of such Senior
Indebtedness.
Nothing in this Section 4.02 shall apply to claims of, or payments to,
the Trustee under or pursuant to Section 9.06. This Section 4.02 shall be
subject to the further provisions of Section 4.05.
Section 4.03. Subrogation of Debentures. Subject to the payment in
full of all Senior Indebtedness, the rights of the Holders of the Debentures
shall be subrogated to the extent of the payments or distributions made to the
holders of such Senior Indebtedness pursuant to the provisions of this Article 4
(equally and ratably with the holders of all Indebtedness of the Company which
by its express terms is subordinated to other Indebtedness of the Company to
substantially the same extent as the Debentures are subordinated and is entitled
to like rights of subrogation) to the rights of the holders of Senior
Indebtedness to receive payments or distributions of cash, property or
securities of the Company applicable to the Senior Indebtedness until the
principal, premium, if any, and interest on the Debentures shall be paid in
full, and, for the purposes of such subrogation, no payments or distributions to
the holders of the Senior Indebtedness of any cash, property or securities to
which the Holders of the Debentures or the Trustee would be entitled except for
the provisions of this Article 4, and no payment pursuant to the provisions of
this Article 4, to or for the benefit of the holders of Senior Indebtedness by
40
Holders of the Debentures or the Trustee, shall, as among the Company, its
creditors other than holders of Senior Indebtedness, and the Holders of the
Debentures, be deemed to be a payment by the Company to or on account of the
Senior Indebtedness, and no payments or distributions of cash, property or
securities to or for the benefit of the Holders of the Debentures pursuant to
the subrogation provisions of this Article 4, which would otherwise have been
paid to the holders of Senior Indebtedness, shall be deemed to be a payment by
the Company to or for the account of the Debentures. It is understood that the
provisions of this Article 4 are intended solely for the purposes of defining
the relative rights of the Holders of the Debentures, on the one hand, and the
holders of the Senior Indebtedness, on the other hand.
Nothing contained in this Article 4 or elsewhere in this Indenture or
in the Debentures is intended to or shall impair, as among the Company, its
creditors other than the holders of Senior Indebtedness, and the Holders of the
Debentures, the obligation of the Company, which is absolute and unconditional,
to pay to the Holders of the Debentures the principal of, premium, if any, and
interest on the Debentures as and when the same shall become due and payable in
accordance with their terms, or is intended to or shall affect the relative
rights of the Holders of the Debentures and creditors of the Company other than
the holders of the Senior Indebtedness, nor shall anything herein or therein
prevent the Trustee or, subject to Section 8.04, the Holder of any Debenture
from exercising all remedies otherwise permitted by applicable law upon default
under this Indenture, subject to the rights, if any, under this Article 4 of the
holders of Senior Indebtedness in respect of cash, property or securities of the
Company received upon the exercise of any such remedy.
Upon any payment or distribution of assets of the Company referred to
in this Article 4, the Trustee, subject to the provisions of Section 9.01, and
the Holders of the Debentures shall be entitled to rely upon any order or decree
made by any court of competent jurisdiction in which such bankruptcy,
dissolution, winding up, liquidation or reorganization proceedings are pending,
or a certificate of the receiver, trustee in bankruptcy, liquidating trustee,
agent or other Person making such payment or distribution, delivered to the
Trustee or to the Holders of the Debentures, for the purpose of ascertaining the
Persons entitled to participate in such distribution, the holders of the Senior
Indebtedness and other indebtedness of the Company, the amount thereof or
payable thereon and all other facts pertinent thereto or to this Article 4.
Section 4.04. Authorization to Effect Subordination. Each Holder of a
Debenture by the Holder's acceptance thereof authorizes and directs the Trustee
on the Holder's behalf to take such action as may be necessary or appropriate to
effectuate the subordination as provided in this Article 4 and appoints the
Trustee to act as the Holder's attorney-in-fact for any and all such purposes.
If the Trustee does not file a proper proof of claim or proof of debt in the
form required in any proceeding referred to in the third paragraph of Section
8.02 hereof at least thirty (30) days before the expiration of the time to file
such claim, the holders of any Senior Indebtedness or their Representatives are
hereby authorized to file an appropriate claim for and on behalf of the Holders
of the Debentures.
41
Section 4.05. Notice to Trustee. The Company shall give prompt written
notice in the form of an Officers' Certificate to a Responsible Officer of the
Trustee and to any paying agent of any fact known to the Company that would
prohibit the making of any payment of monies to or by the Trustee or any paying
agent in respect of the Debentures pursuant to the provisions of this Article 4.
Notwithstanding the provisions of this Article 4 or any other provision of this
Indenture, the Trustee shall not be charged with knowledge of the existence of
any facts that would prohibit the making of any payment of monies to or by the
Trustee in respect of the Debentures pursuant to the provisions of this Article
4, unless and until a Responsible Officer of the Trustee shall have received
written notice thereof at the Corporate Trust Office from the Company (in the
form of an Officers' Certificate) or a Representative or a holder or holders of
Senior Indebtedness, and before the receipt of any such written notice, the
Trustee, subject to the provisions of Section 9.01, shall be entitled in all
respects to assume that no such facts exist; provided, however, that if by the
Business Day prior to the date upon which by the terms hereof any such monies
may become payable for any purpose (including, without limitation, the payment
of the principal of, or premium, if any, or interest on any Debenture) the
Trustee shall not have received, with respect to such monies, the notice
provided for in this Section 4.05, then, anything herein contained to the
contrary notwithstanding, the Trustee shall have full power and authority to
apply monies received to the purpose for which they were received, and shall not
be affected by any notice to the contrary that may be received by it on or after
such prior date.
Notwithstanding anything in this Article 4 to the contrary, nothing
shall prevent any payment by the Trustee to the Debentureholders of monies
deposited with it pursuant to Section 14.01, if a Responsible Officer of the
Trustee shall not have received written notice at the Corporate Trust Office on
or before one Business Day prior to the date such payment is due that such
payment is not permitted under Section 4.01 or 4.02.
The Trustee, subject to the provisions of Section 9.01, shall be
entitled to rely on the delivery to it of a written notice by a Representative
or a person representing himself to be a holder of Senior Indebtedness (or a
trustee on behalf of such holder) to establish that such notice has been given
by a Representative or a holder of Senior Indebtedness or a trustee on behalf of
any such holder or holders. The Trustee shall not be required to make any
payment or distribution to or on behalf of a holder of Senior Indebtedness
pursuant to this Article 4 unless it has received satisfactory evidence as to
the amount of Senior Indebtedness held by such Person, the extent to which such
Person is entitled to participate in such payment or distribution and any other
facts pertinent to the rights of such Person under this Article 4.
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Section 4.06. Trustee's Relation to Senior Indebtedness. The Trustee,
in its individual capacity, shall be entitled to all the rights set forth in
this Article 4 in respect of any Senior Indebtedness at any time held by it, to
the same extent as any other holder of Senior Indebtedness, and nothing in
Section 9.13 or elsewhere in this Indenture shall deprive the Trustee of any of
its rights as such holder.
With respect to the holders of Senior Indebtedness, the Trustee
undertakes to perform or to observe only such of its covenants and obligations
as are specifically set forth in this Article 4, and no implied covenants or
obligations with respect to the holders of Senior Indebtedness shall be read
into this Indenture against the Trustee. The Trustee shall not be deemed to owe
any fiduciary duty to the holders of Senior Indebtedness and, subject to the
provisions of Section 9.01, the Trustee shall not be liable to any holder of
Senior Indebtedness (i) for any failure to make any payments or distributions to
such holder or (ii) if it shall pay over or deliver money to Holders of
Debentures, the Company or any other Person in compliance with this Article 4.
Section 4.07. No Impairment of Subordination. No right of any present
or future holder of any Senior Indebtedness to enforce subordination as herein
provided shall at any time in any way be prejudiced or impaired by any act or
failure to act on the part of the Company or by any act or failure to act, in
good faith, by any such holder, or by any noncompliance by the Company with the
terms, provisions and covenants of this Indenture, regardless of any knowledge
thereof which any such holder may have or otherwise be charged with. Senior
Indebtedness may be created, renewed or extended and holders of Senior
Indebtedness may exercise any rights under any instrument creating or evidencing
such Senior Indebtedness, including, without limitation, any waiver of default
thereunder, without any notice to or consent from the Holders of the Debentures
or the Trustee. No compromise, alteration, amendment, modification, extension,
renewal or other change of, or waiver, consent or other action in respect of,
any liability or obligation under or in respect of the Senior Indebtedness or
any terms or conditions of any instrument creating or evidencing such Senior
Indebtedness shall in any way alter or affect any of the provisions of this
Article 4 or the subordination of the Debentures provided thereby.
Section 4.08. Certain Conversions Not Deemed Payment. For the purposes
of this Article 4 only, (1) the issuance and delivery of Junior Securities upon
conversion of Debentures in accordance with Article 16 and (2) the payment,
issuance or delivery of cash, property or securities upon conversion of a
Debenture as a result of any transaction specified in Section 16.06 shall not be
deemed to constitute a payment or distribution on account of the principal of,
premium, if any, or interest on Debentures or on account of the purchase or
other acquisition of Debentures. For the purposes of this Section 4.08, the term
"JUNIOR SECURITIES" means (a) Common Stock of the Company or (b) securities of
the Company that are subordinated in right of payment to all Senior Indebtedness
that may be outstanding at the time of issuance or delivery of such securities
to substantially the same extent as, or to a greater extent than, the Debentures
are so subordinated as provided in this Article 4. Nothing contained in this
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Article 4 or elsewhere in this Indenture or in the Debentures is intended to or
shall impair, as among the Company, its creditors (other than holders of Senior
Indebtedness) and the Debentureholders, the right, which is absolute and
unconditional, of the Holder of any Debenture to convert such Debenture in
accordance with Article 16.
Section 4.09. Article Applicable to Paying Agents. If at any time any
paying agent other than the Trustee shall have been appointed by the Company and
be then acting hereunder, the term "TRUSTEE" as used in this Article 4 shall
(unless the context otherwise requires) be construed as extending to and
including such paying agent within its meaning as fully for all intents and
purposes as if such paying agent were named in this Article 4 in addition to or
in place of the Trustee; provided, however, that the first paragraph of Section
4.05 shall not apply to the Company or any Affiliate of the Company if it or
such Affiliate acts as paying agent.
The Trustee shall not be responsible for the actions or inactions of
any other paying agents (including the Company if acting as its own paying
agent) and shall have no control of any funds held by such other paying agents.
Section 4.10. Senior Indebtedness Entitled to Rely. The holders of
Senior Indebtedness (including, without limitation, Designated Senior
Indebtedness) shall have the right to rely upon this Article 4, and no amendment
or modification of the provisions contained herein shall diminish the rights of
such holders unless such holders shall have agreed in writing thereto.
Section 4.11. Reliance on Judicial Order or Certificate of Liquidating
Agent. Upon any payment or distribution of assets of the Company referred to in
this Article 4, the Trustee and the Debentureholders shall be entitled to rely
upon any order or decree entered by any court of competent jurisdiction in which
such insolvency, bankruptcy, receivership, liquidation, reorganization,
dissolution, winding up or similar case or proceeding is pending, or a
certificate of the trustee in bankruptcy, liquidating trustee, custodian,
receiver, assignee for the benefit of creditors, agent or other Person making
such payment or distribution, delivered to the Trustee or to the
Debentureholders, for the purpose of ascertaining the Persons entitled to
participate in such payment or distribution, the holders of Senior Indebtedness
and other indebtedness of the Company, the amount thereof or payable thereon,
the amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article 4.
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ARTICLE 5
RESERVED
ARTICLE 6
PARTICULAR COVENANTS OF THE COMPANY
Section 6.01. Payment of Principal, Premium and Interest. The Company
covenants and agrees that it will duly and punctually pay or cause to be paid
the principal of and premium, if any (including the redemption price upon
redemption or the purchase price upon repurchase, in each case pursuant to
Article 3), and interest, on each of the Debentures at the places, at the
respective times and in the manner provided herein and in the Debentures.
Section 6.02. Maintenance of Office or Agency. The Company will, or
will cause the Trustee to, maintain an office or agency in the Borough of
Manhattan, the City of New York, where the Debentures may be surrendered for
registration of transfer or exchange or for presentation for payment or for
conversion, redemption or repurchase and where notices and demands to or upon
the Company in respect of the Debentures and this Indenture may be served. The
Company will give prompt written notice to the Trustee of the location, and any
change in the location, of such office or agency not designated or appointed by
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
Corporate Trust Office or the corporate trust office of the Trustee in The
Borough of Manhattan which office is located at 40 Broad Street, 5th Floor, New
York, New York 10004.
The Company may also from time to time designate co-registrars and one
or more offices or agencies where the Debentures may be presented or surrendered
for any or all such purposes and may from time to time rescind such
designations. The Company will give prompt written notice of any such
designation or rescission and of any change in the location of any such other
office or agency.
The Company hereby initially designates the Trustee as paying agent,
Debenture Registrar, Custodian and conversion agent and each of the Corporate
Trust Office and the office of agency of the Trustee in The Borough of
Manhattan, shall be considered as one such office or agency of the Company for
each of the aforesaid purposes.
So long as the Trustee is the Debenture Registrar, the Trustee agrees
to mail, or cause to be mailed, the notices set forth in Section 9.10(a) and the
third paragraph of Section 9.11. If co-registrars have been appointed in
accordance with this Section, the Trustee shall mail such notices only to the
Company and the Holders of Debentures it can identify from its records.
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Section 6.03. Appointments to Fill Vacancies in Trustee's Office. The
Company, whenever necessary to avoid or fill a vacancy in the office of Trustee,
will appoint, in the manner provided in Section 9.10, a Trustee, so that there
shall at all times be a Trustee hereunder.
Section 6.04. Provisions as to Paying Agent. (a) If the Company shall
appoint a paying agent other than the Trustee, or if the Trustee shall appoint
such a paying agent, the Company will cause such paying agent to execute and
deliver to the Trustee an instrument in which such agent shall agree with the
Trustee, subject to the provisions of this Section 6.04:
(1) that it will hold all sums held by it as such agent for
the payment of the principal of and premium, if any, or interest on the
Debentures (whether such sums have been paid to it by the Company or by
any other obligor on the Debentures) in trust for the benefit of the
Holders of the Debentures;
(2) that it will give the Trustee notice of any failure by the
Company (or by any other obligor on the Debentures) to make any payment
of the principal of and premium, if any, or interest on the Debentures
when the same shall be due and payable; and
(3) that at any time during the continuance of an Event of
Default, upon request of the Trustee, it will forthwith pay to the
Trustee all sums so held in trust.
The Company shall, on or before each due date of the principal of,
premium, if any, or interest on the Debentures, deposit with the paying agent a
sum (in funds which are immediately available on the due date for such payment)
sufficient to pay such principal, premium, if any, or interest, and (unless such
paying agent is the Trustee) the Company will promptly notify the Trustee of any
failure to take such action; provided that if such deposit is made on the due
date, such deposit shall be received by the paying agent by 10:00 a.m. New York
City time, on such date.
(b) If the Company shall act as its own paying agent, it will, on or
before each due date of the principal of, premium, if any, or interest on the
Debentures, set aside, segregate and hold in trust for the benefit of the
Holders of the Debentures a sum sufficient to pay such principal, premium, if
any, or interest so becoming due and will promptly notify the Trustee of any
failure to take such action and of any failure by the Company (or any other
obligor under the Debentures) to make any payment of the principal of, premium,
if any, or interest on the Debentures when the same shall become due and
payable.
(c) Anything in this Section 6.04 to the contrary notwithstanding, the
Company may, at any time, for the purpose of obtaining a satisfaction and
discharge of this Indenture, or for any other reason, pay or cause to be paid to
46
the Trustee all sums held in trust by the Company or any paying agent hereunder
as required by this Section 6.04, such sums to be held by the Trustee upon the
trusts herein contained and upon such payment by the Company or any paying agent
to the Trustee, the Company or such paying agent shall be released from all
further liability with respect to such sums.
(d) Anything in this Section 6.04 to the contrary notwithstanding, the
agreement to hold sums in trust as provided in this Section 6.04 is subject to
Sections 14.03 and 14.04.
The Trustee shall not be responsible for the actions of any other
paying agents (including the Company if acting as its own paying agent) and
shall have no control of any funds held by such other paying agents.
Section 6.05. Existence. Subject to Article 13, the Company will do or
cause to be done all things necessary to preserve and keep in full force and
effect its existence and rights (charter and statutory); provided that the
Company shall not be required to preserve any such right if the Company shall
determine that the preservation thereof is no longer desirable in the conduct of
the business of the Company and that the loss thereof does not adversely effect
in any material respect the Debentureholders.
Section 6.06. Maintenance of Properties. The Company will cause all
properties used or useful in the conduct of its business or the business of any
Significant Subsidiary to be maintained and kept in good condition, repair and
working order (normal wear and tear excepted) and supplied with all necessary
equipment and will cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the judgment of
the Company may be necessary so that the business carried on in connection
therewith may be properly conducted at all times; provided that nothing in this
Section shall prevent the Company from (i) selling, assigning, transferring,
consigning, delivering or otherwise disposing of such properties or (ii)
discontinuing the operation or maintenance of any of such properties, in each
case, if such sale, assignment, transfer, conveyance, delivery, disposition or
discontinuance is, in the judgment of the Company, desirable in the conduct of
its business or the business of any subsidiary.
Section 6.07. Payment of Taxes and Other Claims. The Company will pay
or discharge, or cause to be paid or discharged, before the same may become
delinquent, (i) all taxes, assessments and governmental charges levied or
imposed upon the Company or any Significant Subsidiary or upon the income,
profits or property of the Company or any Significant Subsidiary, (ii) all
claims for labor, materials and supplies which, if unpaid, might by law become a
lien or charge upon the property of the Company or any Significant Subsidiary
and (iii) all stamp taxes and other duties, if any, which may be imposed by the
United States or any political subdivision thereof or therein in connection with
the issuance, transfer, exchange, conversion, redemption or repurchase of any
Debentures or with respect to this Indenture; provided that, in the case of
47
clauses (i) and (ii), the Company shall not be required to pay or discharge or
cause to be paid or discharged any such tax, assessment, charge or claim (A) if
the failure to do so will not, in the aggregate, have a material adverse impact
on the Company, or (B) if the amount, applicability or validity is being
contested in good faith by appropriate proceedings.
Section 6.08. Rule 144A Information Requirement. Within the period
prior to the expiration of the holding period applicable to sales thereof under
Rule 144(k) under the Securities Act (or any successor provision), the Company
covenants and agrees that it shall, during any period in which it is not subject
to Section 13 or 15(d) under the Exchange Act, make available to any Holder or
beneficial holder of Debentures or any Common Stock issued upon conversion
thereof which continue to be Restricted Securities in connection with any sale
thereof and any prospective purchaser of Debentures or such Common Stock
designated by such Holder or beneficial holder, the information required
pursuant to Rule 144A(d)(4) under the Securities Act upon the request of any
Holder or beneficial holder of the Debentures or such Common Stock and it will
take such further action as any Holder or beneficial holder of such Debentures
or such Common Stock may reasonably request, all to the extent required from
time to time to enable such Holder or beneficial holder to sell its Debentures
or Common Stock without registration under the Securities Act within the
limitation of the exemption provided by Rule 144A, as such Rule may be amended
from time to time. Upon the reasonable request of any Holder or any beneficial
holder of the Debentures or such Common Stock, the Company will deliver to such
Holder or beneficial holder a written statement as to whether it has complied
with such requirements.
Section 6.09. Stay, Extension and Usury Laws. The Company covenants (to
the extent that it may lawfully do so) that it shall not at any time insist
upon, plead, or in any manner whatsoever claim or take the benefit or advantage
of, any stay, extension or usury law or other law which would prohibit or
forgive the Company from paying all or any portion of the principal of, premium,
if any, or interest on the Debentures as contemplated herein, wherever enacted,
now or at any time hereafter in force, or which may affect the covenants or the
performance of this Indenture and the Company (to the extent it may lawfully do
so) hereby expressly waives all benefit or advantage of any such law, and
covenants that it will not, by resort to any such law, hinder, delay or impede
the execution of any power herein granted to the Trustee, but will suffer and
permit the execution of every such power as though no such law had been enacted.
Section 6.10. Compliance Certificate. The Company shall deliver to the
Trustee, within one hundred twenty (120) days after the end of each fiscal year
of the Company, a certificate signed by either the principal executive officer,
principal financial officer or principal accounting officer of the Company,
stating whether or not, to the best knowledge of the signer thereof, the Company
is in default, in any material respect, in the performance and observance of any
48
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 the status
thereof of which the signer may have knowledge.
The Company will deliver to the Trustee, forthwith upon becoming aware
of (i) any default in any material respect in the performance or observance of
any covenant, agreement or condition contained in this Indenture, or (ii) any
Event of Default, an Officers' Certificate specifying with particularity such
default or Event of Default and further stating what action the Company has
taken, is taking or proposes to take with respect thereto.
Any notice required to be given under this Section 6.10 shall be
delivered to a Responsible Officer of the Trustee at its Corporate Trust Office.
Section 6.11. Liquidated Damages Notice. In the event that the Company
is required to pay Liquidated Damages to Holders of Debentures pursuant to the
Registration Rights Agreement, the Company will provide written notice
("LIQUIDATED DAMAGES NOTICE") to the Trustee of its obligation to pay Liquidated
Damages no later than fifteen (15) days prior to the proposed payment date for
the Liquidated Damages, and the Liquidated Damages Notice shall set forth the
amount of Liquidated Damages to be paid by the Company on such payment date. The
Trustee shall not at any time be under any duty or responsibility to any Holder
of Debentures to determine the Liquidated Damages, or with respect to the
nature, extent or calculation of the amount of Liquidated Damages when made, or
with respect to the method employed in such calculation of the Liquidated
Damages.
ARTICLE 7
DEBENTUREHOLDERS' LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE
Section 7.01. Debentureholders' Lists. The Company covenants and agrees
that it will furnish or cause to be furnished to the Trustee, semiannually, not
more than fifteen (15) days after each March 15 and September 15 in each year
beginning with September 15, 2004, and at such other times as the Trustee may
request in writing, within thirty (30) days after receipt by the Company of any
such request (or such lesser time as the Trustee may reasonably request in order
to enable it to timely provide any notice to be provided by it hereunder), a
list in such form as the Trustee may reasonably require of the names and
addresses of the Holders of Debentures as of a date not more than fifteen (15)
days (or such other date as the Trustee may reasonably request in order to so
provide any such notices) prior to the time such information is furnished,
except that no such list need be furnished by the Company to the Trustee so long
as the Trustee is acting as the sole Debenture Registrar.
49
Section 7.02. Preservation And Disclosure Of Lists. (a) The Trustee
shall preserve, in as current a form as is reasonably practicable, all
information as to the names and addresses of the Holders of Debentures contained
in the most recent list furnished to it as provided in Section 7.01 or
maintained by the Trustee in its capacity as Debenture Registrar or co-registrar
in respect of the Debentures, if so acting. The Trustee may destroy any list
furnished to it as provided in Section 7.01 upon receipt of a new list so
furnished.
(b) The rights of Debentureholders to communicate with other holders of
Debentures with respect to their rights under this Indenture or under the
Debentures, and the corresponding rights and duties of the Trustee, shall be as
provided by the Trust Indenture Act.
(c) Every Debentureholder, by receiving and holding the same, agrees
with the Company and the Trustee that neither the Company nor the Trustee nor
any agent of either of them shall be held accountable by reason of any
disclosure of information as to names and addresses of holders of Debentures
made pursuant to the Trust Indenture Act.
Section 7.03. Reports By Trustee. (a) Within sixty (60) days after May
15 of each year commencing with the year 2004, the Trustee shall transmit to
Holders of Debentures such reports dated as of May 15 of the year in which such
reports are made concerning the Trustee and its actions under this Indenture as
may be required pursuant to the Trust Indenture Act at the times and in the
manner provided pursuant thereto. In the event that no events have occurred
under the applicable sections of the Trust Indenture Act the Trustee shall be
under no duty or obligation to provide such reports.
(b) A copy of such report shall, at the time of such transmission to
Holders of Debentures, be filed by the Trustee with each stock exchange and
automated quotation system upon which the Debentures are listed and with the
Company. The Company will promptly notify the Trustee in writing when the
Debentures are listed on any stock exchange or automated quotation system or
delisted therefrom.
Section 7.04. Reports by Company. The Company shall file with the
Trustee (and the Commission if at any time after the Indenture becomes qualified
under the Trust Indenture Act), and transmit to Holders of Debentures, such
information, documents and other reports and such summaries thereof, as may be
required pursuant to the Trust Indenture Act at the times and in the manner
provided pursuant to such Act, whether or not the Debentures are governed by
such Act; provided that any such information, documents or reports required to
be filed with the Commission pursuant to Section 13 or 15(d) of the Exchange Act
shall be filed with the Trustee within fifteen (15) days after the same is so
required to be filed with the Commission. Delivery of such reports, information
and documents to the Trustee is for informational purposes only and the
Trustee's receipt of such shall not constitute constructive notice of any
information contained therein or determinable from information contained
50
therein, including the Company's compliance with any of its covenants hereunder
(as to which the Trustee is entitled to rely exclusively on an Officers'
Certificates).
ARTICLE 8
REMEDIES OF THE TRUSTEE AND DEBENTUREHOLDERS ON AN EVENT OF DEFAULT
Section 8.01. Events Of Default. In case one or more of the following
Events of Default (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body) shall have occurred and be
continuing:
(a) default in the payment of the principal of or premium, if any, on
any of the Debentures as and when the same shall become due and payable either
at maturity or in connection with any redemption, repurchase or otherwise, in
each case pursuant to Article 3, by acceleration or otherwise and whether or not
prohibited by Article 4; or
(b) default in the payment of any installment of interest upon any of
the Debentures as and when the same shall become due and payable, whether or not
prohibited by Article 4, and continuance of such default for a period of thirty
(30) days; or
(c) default in the Company's obligation to convert any Debentures
following the exercise by the Holder of the Debentures of the right to convert
such Debentures into Common Stock pursuant to and in accordance with Article 16;
or
(d) default in the Company's obligation to provide a Designated Event
Notice upon a Designated Event as provided in Section 3.05; or
(e) default in the payment of principal when due at stated maturity or
resulting in acceleration of other Indebtedness of the Company for borrowed
money where the aggregate principal amount with respect to which the default or
acceleration has occurred exceeds $10 million and such acceleration has not been
cured or rescinded within a period of 30 days after written notice of such
failure, requiring the Company to remedy the same, shall have been given to the
Company by the Trustee, or to the Company and the Trustee by the Holders of at
least 25% in aggregate principal amount of the Debentures at the time
outstanding determined in accordance with Section 10.04; or
(f) failure on the part of the Company duly to observe or perform any
other of the covenants or agreements on the part of the Company in the
Debentures or in this Indenture (other than a covenant or agreement a default in
51
whose performance or whose breach is elsewhere in this Section 8.01 specifically
dealt with) continued for a period of sixty (60) days after the date on which
written notice of such failure, requiring the Company to remedy the same, shall
have been given to the Company by the Trustee, or the Company and a Responsible
Officer of the Trustee by the holders of at least twenty-five percent (25%) in
aggregate principal amount of the Debentures at the time outstanding determined
in accordance with Section 10.04; or
(g) the Company shall commence a voluntary case or other proceeding
seeking liquidation, reorganization or other relief with respect to the Company
or its debts under any bankruptcy, insolvency or other similar law now or
hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of the Company or any
substantial part of the property of the Company, or shall consent to any such
relief or to the appointment of or taking possession by any such official in an
involuntary case or other proceeding commenced against the Company, or shall
make a general assignment for the benefit of creditors, or shall fail generally
to pay its debts as they become due; or
(h) an involuntary case or other proceeding shall be commenced against
the Company seeking liquidation, reorganization or other relief with respect to
the Company or its debts under any bankruptcy, insolvency or other similar law
now or hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of the Company or any
substantial part of the property of the Company, and such involuntary case or
other proceeding shall remain undismissed and unstayed for a period of sixty
(60) consecutive days; or
then, and in each and every such case (other than an Event of Default specified
in Section 8.01(g) or 8.01(h)), unless the principal of all of the Debentures
then outstanding shall have already become due and payable, either the Trustee
or the Holders of not less than twenty-five percent (25%) in aggregate principal
amount of the Debentures then outstanding hereunder determined in accordance
with Section 10.04, by notice in writing to the Company (and to the Trustee if
given by Debentureholders), may declare the principal of and premium, if any, on
all the Debentures then outstanding and the interest accrued thereon to be due
and payable immediately, and upon any such declaration the same shall become and
shall be immediately due and payable, anything in this Indenture or in the
Debentures contained to the contrary notwithstanding. If an Event of Default
specified in Section 8.01(g) or 8.01(h) occurs, the principal of all the
Debentures then outstanding and the interest accrued thereon shall be
immediately and automatically due and payable without necessity of further
action. This provision, however, is subject to the conditions that if, at any
time after the principal of the Debentures shall have been so declared due and
payable, and before any judgment or decree for the payment of the monies due
shall have been obtained or entered as hereinafter provided, the Company shall
pay or shall deposit with the Trustee a sum sufficient to pay all matured
installments of interest upon all Debentures then outstanding and the principal
of and premium, if any, on any and all Debentures which shall have become due
otherwise than by acceleration (with interest on overdue installments of
52
interest (to the extent that payment of such interest is enforceable under
applicable law) and on such principal and premium, if any, at the rate borne by
the Debentures, to the date of such payment or deposit) and amounts due to the
Trustee pursuant to Section 9.06, and if any and all defaults under this
Indenture, other than the nonpayment of principal of and premium, if any, and
accrued interest on Debentures which shall have become due by acceleration,
shall have been cured or waived pursuant to Section 8.07, then and in every such
case the Holders of a majority in aggregate principal amount of the Debentures
then outstanding, by written notice to the Company and to the Trustee, may waive
all defaults or Events of Default and rescind and annul such declaration and its
consequences; but no such waiver or rescission and annulment shall extend to or
shall affect any subsequent default or Event of Default, or shall impair any
right consequent thereon. The Company shall notify in writing a Responsible
Officer of the Trustee, promptly upon becoming aware thereof, of any Event of
Default.
In case the Trustee shall have proceeded to enforce any right under
this Indenture and such proceedings shall have been discontinued or abandoned
because of such waiver or rescission and annulment or for any other reason or
shall have been determined adversely to the Trustee, then and in every such case
the Company, the Holders of Debentures, and the Trustee shall be restored
respectively to their several positions and rights hereunder, and all rights,
remedies and powers of the Company, the Holders of Debentures, and the Trustee
shall continue as though no such proceeding had been taken.
Section 8.02. Payments of Debentures on Default; Suit Therefor. The
Company covenants that (a) in case default shall be made in the payment of any
installment of interest upon any of the Debentures then outstanding as and when
the same shall become due and payable, and such default shall have continued for
a period of thirty (30) days, or (b) in case default shall be made in the
payment of the principal of or premium, if any, on any of the Debentures then
outstanding as and when the same shall have become due and payable, whether at
maturity of the Debentures or in connection with any redemption, by or under
this Indenture declaration or otherwise, then, upon demand of the Trustee, the
Company will pay to the Trustee, for the benefit of the Holders of the
Debentures, the whole amount that then shall have become due and payable on all
such Debentures for principal and premium, if any, or interest, as the case may
be, with interest upon the overdue principal and premium, if any, and (to the
extent that payment of such interest is enforceable under applicable law) upon
the overdue installments of interest at the rate borne by the Debentures, plus
1% and, in addition thereto, such further amount as shall be sufficient to cover
the costs and expenses of collection, including reasonable compensation to the
Trustee, its agents, attorneys and counsel, and all other amounts due the
Trustee under Section 9.06. Until such demand by the Trustee, the Company may
pay the principal of and premium, if any, and interest on the Debentures to the
Holders, whether or not the Debentures are overdue.
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In case the Company shall fail forthwith to pay such amounts upon such
demand, the Trustee, in its own name and as trustee of an express trust, shall
be entitled and empowered to institute any actions or proceedings at law or in
equity for the collection of the sums so due and unpaid, and may prosecute any
such action or proceeding to judgment or final decree, and may enforce any such
judgment or final decree against the Company or any other obligor on the
Debentures and collect in the manner provided by law out of the property of the
Company or any other obligor on the Debentures wherever situated the monies
adjudged or decreed to be payable.
In case there shall be pending proceedings for the bankruptcy or for
the reorganization of the Company or any other obligor on the Debentures under
Title 11 of the United States Code, or any other applicable law, or in case a
receiver, assignee or trustee in bankruptcy or reorganization, liquidator,
sequestrator or similar official shall have been appointed for or taken
possession of the Company or such other obligor, the property of the Company or
such other obligor, or in the case of any other judicial proceedings relative to
the Company or such other obligor upon the Debentures, or to the creditors or
property of the Company or such other obligor, the Trustee, irrespective of
whether the principal of the Debentures 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 pursuant to the provisions of this Section 8.02,
shall be entitled and empowered, by intervention in such proceedings or
otherwise, to file and prove a claim or claims for the whole amount of
principal, premium, if any, and interest owing and unpaid in respect of the
Debentures, and, in case of any judicial proceedings, to file such proofs of
claim and other papers or documents as may be necessary or advisable in order to
have the claims of the Trustee and of the Debentureholders allowed in such
judicial proceedings relative to the Company or any other obligor on the
Debentures, its or their creditors, or its or their property, and to collect and
receive any monies or other property payable or deliverable on any such claims,
and to distribute the same after the deduction of any amounts due the Trustee
under Section 9.06, and to take any other action with respect to such claims,
including participating as a member of any official committee of creditors, as
it reasonably deems necessary or advisable, and, unless prohibited by law or
applicable regulations, and any receiver, assignee or trustee in bankruptcy or
reorganization, liquidator, custodian or similar official is hereby authorized
by each of the Debentureholders 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 Debentureholders, to pay to the Trustee any amount due it for reasonable
compensation, expenses, advances and disbursements, including counsel fees and
expenses incurred by it up to the date of such distribution. To the extent that
such payment of reasonable compensation, expenses, advances and disbursements
out of the estate in any such proceedings shall be denied for any reason,
payment of the same shall be secured by a lien on, and shall be paid out of, any
and all distributions, dividends, monies, securities and other property which
the Holders of the Debentures may be entitled to receive in such proceedings,
whether in liquidation or under any plan of reorganization or arrangement or
otherwise.
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All rights of action and of asserting claims under this Indenture, or
under any of the Debentures, may be enforced by the Trustee without the
possession of any of the Debentures, or the production thereof at any trial or
other proceeding relative thereto, and any such suit or proceeding instituted by
the Trustee shall be brought in its own name as trustee of an express trust, and
any recovery of judgment shall, after provision for the payment of the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel, be for the ratable benefit of the Holders of the
Debentures.
In any proceedings brought by the Trustee (and in any proceedings
involving the interpretation of any provision of this Indenture to which the
Trustee shall be a party) the Trustee shall be held to represent all the Holders
of the Debentures, and it shall not be necessary to make any Holders of the
Debentures parties to any such proceedings.
Section 8.03. Application of Monies Collected By Trustee. Any monies
collected by the Trustee pursuant to this Article 8 shall be applied in the
order following, at the date or dates fixed by the Trustee for the distribution
of such monies, upon presentation of the several Debentures, and stamping
thereon the payment, if only partially paid, and upon surrender thereof, if
fully paid:
FIRST: To the payment of all amounts due the Trustee under
Section 9.06;
SECOND: In case the principal of the outstanding Debentures shall not
have become due and be unpaid, to the payment of interest on the Debentures in
default in the order of the maturity of the installments of such interest, with
interest (to the extent that such interest has been collected by the Trustee)
upon the overdue installments of interest at the rate borne by the Debentures,
such payments to be made ratably to the Persons entitled thereto;
THIRD: In case the principal of the outstanding Debentures shall have
become due, by declaration or otherwise, and be unpaid to the payment of the
whole amount then owing and unpaid upon the Debentures for principal and
premium, if any, and interest, with interest on the overdue principal and
premium, if any, and (to the extent that such interest has been collected by the
Trustee) upon overdue installments of interest at the rate borne by the
Debentures, and in case such monies shall be insufficient to pay in full the
whole amounts so due and unpaid upon the Debentures, then to the payment of such
principal and premium, if any, and interest without preference or priority of
principal and premium, if any, over interest, or of interest over principal and
premium, if any, or of any installment of interest over any other installment of
interest, or of any Debenture over any other Debenture, ratably to the aggregate
of such principal and premium, if any, and accrued and unpaid interest; and
55
FOURTH: To the payment of the remainder, if any, to the Company or any
other Person lawfully entitled thereto.
Section 8.04. Proceedings by Debentureholder. No Holder of any
Debenture shall have any right by virtue of or by reference to any provision of
this Indenture to institute any suit, action or proceeding in equity or at law
upon or under or with respect to this Indenture, or for the appointment of a
receiver, trustee, liquidator, custodian or other similar official, or for any
other remedy hereunder, unless such Holder previously shall have given to the
Trustee written notice of an Event of Default and of the continuance thereof, as
hereinbefore provided, and unless also the Holders of not less than twenty-five
percent (25%) in aggregate principal amount of the Debentures then outstanding
shall have made written request upon the Trustee to institute such action, suit
or proceeding in its own name as Trustee hereunder and shall have offered to the
Trustee such reasonable security or indemnity as it may require against the
costs, expenses and liabilities to be incurred therein or thereby, and the
Trustee for sixty (60) days after its receipt of such notice, request and offer
of indemnity, shall have neglected or refused to institute any such action, suit
or proceeding and no direction inconsistent with such written request shall have
been given to the Trustee pursuant to Section 8.07; it being understood and
intended, and being expressly covenanted by the taker and Holder of every
Debenture with every other taker and Holder and the Trustee, that no one or more
Holders of Debentures shall have any right in any manner whatever by virtue of
or by reference to any provision of this Indenture to affect, disturb or
prejudice the rights of any other Holder of Debentures, or to obtain or seek to
obtain priority over or preference to any other such Holder, or to enforce any
right under this Indenture, except in the manner herein provided and for the
equal, ratable and common benefit of all Holders of Debentures (except as
otherwise provided herein). For the protection and enforcement of this Section
8.04, each and every Debentureholder and the Trustee shall be entitled to such
relief as can be given either at law or in equity.
Notwithstanding any other provision of this Indenture and any provision
of any Debenture, the right of any Holder of any Debenture to receive payment of
the principal of and premium, if any (including the redemption price upon
redemption pursuant to Article 8), and accrued interest on such Debenture, on or
after the respective due dates expressed in such Debenture or in the event of
redemption, or to institute suit for the enforcement of any such payment on or
after such respective dates against the Company shall not be impaired or
affected without the consent of such Holder.
Anything in this Indenture or the Debentures to the contrary
notwithstanding, the Holder of any Debenture, without the consent of either the
Trustee or the Holder of any other Debenture, in its own behalf and for its own
benefit, may enforce, and may institute and maintain any proceeding suitable to
enforce, its rights of conversion as provided herein.
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Section 8.05. Proceedings By Trustee. In case of an Event of Default,
the Trustee may, in its discretion, proceed to protect and enforce the rights
vested in it by this Indenture by such appropriate judicial proceedings as are
necessary to protect and enforce any of such rights, either by suit in equity or
by action at law or by proceeding in bankruptcy or otherwise, whether for the
specific enforcement of any covenant or agreement contained in this Indenture or
in aid of the exercise of any power granted in this Indenture, or to enforce any
other legal or equitable right vested in the Trustee by this Indenture or by
law.
Section 8.06. Remedies Cumulative And Continuing. Except as provided in
Section 2.06, all powers and remedies given by this Article 8 to the Trustee or
to the Debentureholders shall, to the extent permitted by law, be deemed
cumulative and not exclusive of any thereof or of any other powers and remedies
available to the Trustee or the Holders of the Debentures, by judicial
proceedings or otherwise, to enforce the performance or observance of the
covenants and agreements contained in this Indenture, and no delay or omission
of the Trustee or of any Holder of any of the Debentures to exercise any right
or power accruing upon any default or Event of Default occurring and continuing
as aforesaid shall impair any such right or power, or shall be construed to be a
waiver of any such default or any acquiescence therein, and, subject to the
provisions of Section 8.04, every power and remedy given by this Article 8 or by
law to the Trustee or to the Debentureholders may be exercised from time to
time, and as often as shall be deemed expedient, by the Trustee or by the
Debentureholders.
Section 8.07. Direction of Proceedings and Waiver of Defaults By
Majority of Debentureholders. The Holders of a majority in aggregate principal
amount of the Debentures at the time outstanding determined in accordance with
Section 10.04 shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or exercising
any trust or power conferred on the Trustee; provided that (a) such direction
shall not be in conflict with any rule of law or with this Indenture, (b) the
Trustee may take any other action which is not inconsistent with such direction,
(c) the Trustee may decline to take any action that would benefit some
Debentureholder to the detriment of other Debentureholders and (d) the Trustee
may decline to take any action that would involve the Trustee in personal
liability. The Holders of a majority in aggregate principal amount of the
Debentures at the time outstanding determined in accordance with Section 10.04
may, on behalf of the Holders of all of the Debentures, waive any past default
or Event of Default hereunder and its consequences except (i) a default in the
payment of interest or premium, if any, on, or the principal of, the Debentures,
(ii) a failure by the Company to convert any Debentures into Common Stock, (iii)
a default in the payment of the redemption price pursuant to Article 3, (iv) a
default in the payment of the purchase price pursuant to Article 3 or (v) a
default in respect of a covenant or provisions hereof which under Article 12
cannot be modified or amended without the consent of the Holders of each or all
Debentures then outstanding or affected thereby. Upon any such waiver, the
Company, the Trustee and the Holders of the Debentures shall be restored to
57
their former positions and rights hereunder; but no such waiver shall extend to
any subsequent or other default or Event of Default or impair any right
consequent thereon. Whenever any default or Event of Default hereunder shall
have been waived as permitted by this Section 8.07, said default or Event of
Default shall for all purposes of the Debentures and this Indenture be deemed to
have been cured and to be not continuing; but no such waiver shall extend to any
subsequent or other default or Event of Default or impair any right consequent
thereon.
Section 8.08. Notice of Defaults. The Trustee shall, within ninety (90)
days after a Responsible Officer of the Trustee has knowledge of the occurrence
of a default, mail to all Debentureholders, as the names and addresses of such
Holders appear upon the Debenture Register, notice of all defaults known to a
Responsible Officer, unless such defaults shall have been cured or waived before
the giving of such notice; provided that except in the case of default in the
payment of the principal of, or premium, if any, or interest on any of the
Debentures, the Trustee shall be protected in withholding such notice if and so
long as a trust committee of directors and/or Responsible Officers of the
Trustee in good faith determines that the withholding of such notice is in the
interests of the Debentureholders.
Section 8.09. Undertaking To Pay Costs. All parties to this Indenture
agree, and each Holder of any Debenture by his acceptance thereof shall be
deemed to have agreed, that any court may, in its discretion, require, 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, the
filing by any party litigant in such suit of an undertaking to pay the costs of
such suit and that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees and expenses, against any party litigant in
such suit, having due regard to the merits and good faith of the claims or
defenses made by such party litigant; provided that the provisions of this
Section 8.09 (to the extent permitted by law) shall not apply to any suit
instituted by the Trustee, to any suit instituted by any Debentureholder, or
group of Debentureholders, holding in the aggregate more than ten percent in
principal amount of the Debentures at the time outstanding determined in
accordance with Section 10.04, or to any suit instituted by any Debentureholder
for the enforcement of the payment of the principal of or premium, if any, or
interest on any Debenture on or after the due date expressed in such Debenture
or to any suit for the enforcement of the right to convert any Debenture in
accordance with the provisions of Article 16.
ARTICLE 9
THE TRUSTEE
Section 9.01. Duties and Responsibilities of Trustee. The Trustee,
prior to the occurrence of an Event of Default and after the curing of all
Events of Default which may have occurred, undertakes to perform such duties and
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only such duties as are specifically set forth in this Indenture. In case an
Event of Default 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 person
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 and after the curing
or waiving of all 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
Trust Indenture Act, 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 and the Trust Indenture Act against the
Trustee; and
(ii) in the absence of bad faith and willful misconduct 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 certificates or opinions furnished to the Trustee and
conforming to the requirements of this Indenture; but, in the case of
any such certificates or opinions which by any provisions 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 Officers of the Trustee, unless the
Trustee was negligent in ascertaining the pertinent facts;
(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 written direction
of the Holders of not less than a majority in principal amount of the Debentures
at the time outstanding determined as provided in Section 10.04 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;
(d) whether or not therein provided, every provision of this Indenture
relating to the conduct or affecting the liability of, or affording protection
to, the Trustee shall be subject to the provisions of this Section;
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(e) the Trustee shall not be liable in respect of any payment (as to
the correctness of amount, entitlement to receive or any other matters relating
to payment) or notice effected by the Company or any paying agent or any records
maintained by any co-registrar with respect to the Debentures;
(f) if any party fails to deliver a notice relating to an event the
fact of which, pursuant to this Indenture, requires notice to be sent to the
Trustee, the Trustee may conclusively rely on its failure to receive such notice
as reason to act as if no such event occurred; and
(g) the Trustee shall not be deemed to have knowledge of any Event of
Default hereunder unless it shall have been notified in writing of such Event of
Default by the Company or the Holders of at least 10% in aggregate principal
amount of the Debentures.
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 is reasonable ground for believing that the
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.
Section 9.02. Reliance on Documents, Opinions, Etc. Except as
otherwise provided in Section 9.01:
(a) the Trustee may conclusively rely and shall be protected in acting
upon any resolution, certificate, statement, instrument, opinion, report,
notice, request, consent, order, bond, debenture, note, coupon or other paper or
document (whether in its original or facsimile form) believed by it in good
faith 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 own selection and any
advice or Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken or omitted 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
rights or powers vested in it by this Indenture at the request, order or
direction of any of the Debentureholders pursuant to the provisions of this
Indenture, unless such Debentureholders shall have offered to the Trustee
reasonable security or indemnity satisfactory to it against the costs, expenses
and liabilities which may be incurred therein or thereby;
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(e) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture or
other paper or document, but the Trustee may make such further inquiry or
investigation into such facts or matters as it may see fit, and, if the Trustee
shall determine to make such further inquiry or investigation, it shall be
entitled to examine the books, records and premises of the Company, personally
or by agent or attorney; and
(f) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed by it with due care
hereunder.
(g) the Trustee shall not be liable for any action taken, suffered or
omitted to be taken by it in good faith and reasonably believed by it to be
authorized or within the discretion or rights or powers conferred upon it by
this Indenture;
(h) the rights, privileges, protections, immunities and benefits given
to the Trustee, including, without limitation, its right to be indemnified, are
extended to, and shall be enforceable by, the Trustee in each of its capacities
hereunder, and each agent, custodian and other Person employed to act hereunder;
(i) the Trustee may request that the Company deliver an Officers'
Certificate setting forth the names of individuals and/or titles of officers
authorized at such time to take specified actions pursuant to this Indenture,
which Officers' Certificate may be signed by any person authorized to sign an
Officers' Certificate, including any person specified as so authorized in any
such certificate previously delivered and not superseded; and
(j) Any permissive right or authority granted to the Trustee shall not
be construed as a mandatory duty.
Section 9.03. No Responsibility For Recitals, Etc. The recitals
contained herein and in the Debentures (except in the Trustee's certificate 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
representations as to the validity or sufficiency of this Indenture or of the
Debentures. The Trustee shall not be accountable for the use or application by
the Company of any Debentures or the proceeds of any Debentures authenticated
and delivered by the Trustee in conformity with the provisions of this
Indenture.
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Section 9.04. Trustee, Paying Agents, Conversion Agents or Registrar
May Own Debentures. The Trustee, any paying agent, any conversion agent or
Debenture Registrar, in its individual or any other capacity, may become the
owner or pledgee of Debentures with the same rights it would have if it were not
Trustee, paying agent, conversion agent or Debenture Registrar.
Section 9.05. Monies to Be Held in Trust. Subject to the provisions of
Section 14.04, all monies received by the Trustee shall, until used or applied
as herein provided, be held in trust for the purposes for which they were
received. Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall be
under no liability for interest on any money received by it hereunder except as
may be agreed in writing from time to time by the Company and the Trustee.
Section 9.06. Compensation and Expenses of Trustee. The Company
covenants and agrees to pay to the Trustee from time to time, and the Trustee
shall be entitled to, such compensation for all services rendered by it
hereunder in any capacity (which shall not be limited by any provision of law in
regard to the compensation of a trustee of an express trust) as mutually agreed
to from time to time in writing between the Company and the Trustee, and the
Company will pay or reimburse the Trustee upon its request for all reasonable
expenses, disbursements and advances reasonably incurred or made by the Trustee
in accordance with any of the provisions of this Indenture (including the
reasonable compensation and the expenses and disbursements of its counsel and of
all Persons not regularly in its employ) except any such expense, disbursement
or advance as may arise from its negligence, willful misconduct, recklessness or
bad faith. The Company also covenants to indemnify the Trustee and any
predecessor Trustee (or any officer, director or employee of the Trustee), in
any capacity under this Indenture and its agents and any authenticating agent
for, and to hold them harmless against, any and all loss, liability, damage,
claim or expense including taxes (other than taxes based on the income of the
Trustee) incurred without negligence, willful misconduct, recklessness or bad
faith on the part of the Trustee or such officers, directors, employees and
agent or authenticating agent, as the case may be, and arising out of or in
connection with the acceptance or administration of this trust or in any other
capacity hereunder, including the costs and expenses of defending themselves
against any claim (whether asserted by the Company, any Holder or any other
Person) of liability in the premises. The obligations of the Company under this
Section 9.06 to compensate or indemnify the Trustee and to pay or reimburse the
Trustee for expenses, disbursements and advances shall be secured by a lien
prior to that of the Debentures 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 Debentures. The obligation of the Company under this Section shall
survive the satisfaction and discharge of this Indenture.
When the Trustee and its agents and any authenticating agent incur
expenses or render services after an Event of Default specified in Section
8.01(e) or (e) with respect to the Company occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any bankruptcy, insolvency or similar laws.
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Section 9.07. Officers' Certificate As Evidence. Except as otherwise
provided in Section 9.01, whenever in the administration of the provisions of
this Indenture the Trustee shall deem it necessary or desirable that a matter be
proved or established prior to taking or omitting any action hereunder, such
matter (unless other evidence in respect thereof be herein specifically
prescribed) may, in the absence of bad faith or willful misconduct on the part
of the Trustee, be deemed to be conclusively proved and established by an
Officers' Certificate delivered to the Trustee.
Section 9.08. Conflicting Interests of Trustee. If the Trustee has or
shall acquire a conflicting interest within the meaning of the Trust Indenture
Act, the Trustee shall either eliminate such interest or resign, to the extent
and in the manner provided by, and subject to the provisions of, the Trust
Indenture Act and this Indenture.
Section 9.09. Eligibility of Trustee. There shall at all times be a
Trustee hereunder which shall be a Person that is eligible pursuant to the Trust
Indenture Act to act as such and has a combined capital and surplus of at least
$50,000,000 (or if such Person is a member of a bank holding company system, its
bank holding company shall have a combined capital and surplus of at least
$50,000,000). If such Person publishes reports of condition at least annually,
pursuant to law or to the requirements of any supervising or examining
authority, then for the purposes of this Section the combined capital and
surplus of such Person shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time
the Trustee shall cease to be eligible in accordance with the provisions of this
Section 9.09, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article.
Section 9.10. Resignation or Removal of Trustee.
(a) The Trustee may at any time resign by giving written notice of such
resignation to the Company and to the Holders of Debentures. Upon receiving such
notice of resignation, the Company shall promptly appoint a successor trustee by
written instrument, in duplicate, executed by order of the Board of Directors,
one copy of which instrument shall be delivered to the resigning Trustee and one
copy to the successor trustee. If no successor trustee shall have been so
appointed and have accepted appointment sixty (60) days after the mailing of
such notice of resignation to the Debentureholders, the resigning Trustee may,
upon ten (10) Business Days' notice to the Company and the Debentureholders,
appoint a successor identified in such notice or may petition, at the expense of
the Company, any court of competent jurisdiction for the appointment of a
successor trustee, or, if any Debentureholder who has been a bona fide Holder of
63
a Debenture or Debentures for at least six (6) months may, subject to the
provisions of Section 8.09, 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 Section 9.08 after
written request therefor by the Company or by any Debentureholder who
has been a bona fide Holder of a Debenture or Debentures for at least
six (6) months; or
(ii) the Trustee shall cease to be eligible in accordance with
the provisions of Section 9.09 and shall fail to resign after written
request therefor by the Company or by any such Debentureholder; or
(iii) the Trustee shall become incapable of acting, or shall
be adjudged a bankrupt or insolvent, or a receiver of the Trustee or of
its property shall be appointed, or any public officer shall take
charge or control of the Trustee or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation;
then, in any such case, the Company may remove the Trustee and appoint a
successor trustee by written instrument, in duplicate, executed by order of the
Board of Directors, 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 8.09, any Debentureholder who has been a bona fide Holder
of a Debenture or Debentures for at least six (6) 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; provided that if no successor Trustee shall have been appointed and
have accepted appointment sixty (60) days after either the Company or the
Debentureholders has removed the Trustee, or the Trustee resigns, the Trustee so
removed may petition, at the expense of the Company, any court of competent
jurisdiction for an 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.
(c) The Holders of a majority in aggregate principal amount of the
Debentures at the time outstanding may at any time remove the Trustee and
nominate a successor trustee which shall be deemed appointed as successor
trustee unless, within ten (10) days after notice to the Company of such
nomination, the Company objects thereto, in which case the Trustee so removed or
any Debentureholder, or if such Trustee so removed or any Debentureholder fails
to act, the Company, upon the terms and conditions and otherwise as in Section
9.10(a) provided, may petition any court of competent jurisdiction for an
appointment of a successor trustee.
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(d) Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section 9.10 shall
become effective upon acceptance of appointment by the successor trustee as
provided in Section 9.11.
(e) Notwithstanding the replacement of the Trustee pursuant to this
Section, the Company's obligations under Section 9.06 shall continue for the
benefit of the retiring Trustee.
Section 9.11. Acceptance by Successor Trustee. Any successor trustee
appointed as provided in Section 9.10 shall execute, acknowledge 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 the rights,
powers, duties and obligations of its predecessor hereunder, with like effect as
if originally named as trustee herein; but, nevertheless, on the written request
of the Company or of the successor trustee, the trustee ceasing to act shall,
upon payment of any amount then due it pursuant to the provisions of Section
9.06, execute and deliver an instrument transferring to such successor trustee
all the rights and powers of the trustee so ceasing to act. 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 lien upon all property and funds held or collected by
such trustee as such, except for funds held in trust for the benefit of Holders
of particular Debentures, to secure any amounts then due it pursuant to the
provisions of Section 9.06.
No successor trustee shall accept appointment as provided in this
Section 9.11 unless, at the time of such acceptance, such successor trustee
shall be qualified under the provisions of Section 9.08 and be eligible under
the provisions of Section 9.09.
Upon acceptance of appointment by a successor trustee as provided in
this Section 9.11, the Company (or the former trustee, at the written direction
of the Company) shall mail or cause to be mailed notice of the succession of
such trustee hereunder to the Holders of Debentures at their addresses as they
shall appear on the Debenture Register. If the Company fails to mail such notice
within ten (10) 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 9.12. Succession By Merger. Any corporation into which the
Trustee may be merged or converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or consolidation to which the
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Trustee shall be a party, or any corporation succeeding to all or substantially
all of the corporate trust business of the Trustee (including any trust created
by this Indenture), shall be the successor to the Trustee hereunder without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, provided that in the case of any corporation succeeding to all
or substantially all of the corporate trust business of the Trustee, such
corporation shall be qualified under the provisions of Section 9.08 and eligible
under the provisions of Section 9.09.
In case at the time such successor to the Trustee shall succeed to the
trusts created by this Indenture, any of the Debentures shall have been
authenticated but not delivered, any such successor to the Trustee may adopt the
certificate of authentication of any predecessor trustee or authenticating agent
appointed by such predecessor trustee, and deliver such Debentures so
authenticated; and in case at that time any of the Debentures shall not have
been authenticated, any successor to the Trustee or any authenticating agent
appointed by such successor trustee may authenticate such Debentures in the name
of the successor trustee; and in all such cases such certificates shall have the
full force that is provided in the Debentures or in this Indenture; provided
that the right to adopt the certificate of authentication of any predecessor
Trustee or authenticate Debentures in the name of any predecessor Trustee shall
apply only to its successor or successors by merger, conversion or
consolidation.
Section 9.13. Preferential Collection of Claims. If and when the
Trustee shall be or become a creditor of the Company (or any other obligor upon
the Debentures), the Trustee shall be subject to the provisions of the Trust
Indenture Act regarding the collection of the claims against the Company (or any
such other obligor).
ARTICLE 10
THE DEBENTUREHOLDERS
Section 10.01. Action By Debentureholders. Whenever in this Indenture
it is provided that the Holders of a specified percentage in aggregate principal
amount of the Debentures may take any action (including the making of any demand
or request, the giving of any notice, consent or waiver or the taking of any
other action), the fact that at the time of taking any such action, the Holders
of such specified percentage have joined therein may be evidenced (a) by any
instrument or any number of instruments of similar tenor executed by
Debentureholders in person or by agent or proxy appointed in writing, or (b) by
the record of the Holders of Debentures voting in favor thereof at any meeting
of Debentureholders duly called and held in accordance with the provisions of
Article 11, or (c) by a combination of such instrument or instruments and any
such record of such a meeting of Debentureholders. Whenever the Company or the
Trustee solicits the taking of any action by the Holders of the Debentures, the
Company or the Trustee may fix in advance of such solicitation, a date as the
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record date for determining Holders entitled to take such action. The record
date shall be not more than fifteen (15) days prior to the date of commencement
of solicitation of such action.
Section 10.02. Proof of Execution by Debentureholders. Subject to the
provisions of Sections 9.01, 9.02 and 11.05, proof of the execution of any
instrument by a Debentureholder or its agent or proxy shall be sufficient if
made in accordance with such reasonable rules and regulations as may be
prescribed by the Trustee or in such manner as shall be satisfactory to the
Trustee. The holding of Debentures shall be proved by the registry of such
Debentures or by a certificate of the Debenture Registrar.
The record of any Debentureholders' meeting shall be proved in the
manner provided in Section 11.06.
Section 10.03. Who Are Deemed Absolute Owners. The Company, the
Trustee, any paying agent, any conversion agent and any Debenture Registrar may
deem the Person in whose name such Debenture shall be registered upon the
Debenture Register to be, and may treat it as, the absolute owner of such
Debenture (whether or not such Debenture shall be overdue and notwithstanding
any notation of ownership or other writing thereon made by any Person other than
the Company or any Debenture Registrar) for the purpose of receiving payment of
or on account of the principal of, premium, if any, and interest on such
Debenture, for conversion of such Debenture and for all other purposes; and
neither the Company nor the Trustee nor any paying agent nor any conversion
agent nor any Debenture Registrar shall be affected by any notice to the
contrary. All such payments so made to any holder for the time being, or upon
his order, shall be valid, and, to the extent of the sum or sums so paid,
effectual to satisfy and discharge the liability for monies payable upon any
such Debenture.
Section 10.04. Company-owned Debentures Disregarded. In determining
whether the Holders of the requisite aggregate principal amount of Debentures
have concurred in any direction, consent, waiver or other action under this
Indenture, Debentures which are owned by the Company or any other obligor on the
Debentures or any Affiliate of the Company or any other obligor on the
Debentures shall be disregarded and deemed not to be outstanding for the purpose
of any such determination; provided that for the purposes of determining whether
the Trustee shall be protected in relying on any such direction, consent, waiver
or other action, only Debentures which a Responsible Officer knows are so owned
shall be so disregarded. Debentures so owned which have been pledged in good
faith may be regarded as outstanding for the purposes of this Section 10.04 if
the pledgee shall establish to the satisfaction of the Trustee the pledgee's
right to vote such Debentures and that the pledgee is not the Company, any other
obligor on the Debentures or any Affiliate of the Company or any such other
obligor. In the case of a dispute as to such right, any decision by the Trustee
taken upon the advice of counsel shall be full protection to the Trustee. Upon
request of the Trustee, the Company shall furnish to the Trustee promptly an
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Officers' Certificate listing and identifying all Debentures, if any, known by
the Company to be owned or held by or for the account of any of the above
described Persons, and, subject to Section 9.01, the Trustee shall be entitled
to accept such Officers' Certificate as conclusive evidence of the facts therein
set forth and of the fact that all Debentures not listed therein are outstanding
for the purpose of any such determination.
Section 10.05. Revocation Of Consents, Future Holders Bound. At any
time prior to (but not after) the evidencing to the Trustee, as provided in
Section 10.01, of the taking of any action by the Holders of the percentage in
aggregate principal amount of the Debentures specified in this Indenture in
connection with such action, any Holder of a Debenture which is shown by the
evidence to be included in the Debentures the Holders of which have consented to
such action may, by filing written notice with the Trustee at its Corporate
Trust Office and upon proof of holding as provided in Section 10.02, revoke such
action so far as concerns such Debenture. Except as aforesaid, any such action
taken by the Holder of any Debenture shall be conclusive and binding upon such
Holder and upon all future Holders and owners of such Debenture and of any
Debentures issued in exchange or substitution therefor, irrespective of whether
any notation in regard thereto is made upon such Debenture or any Debenture
issued in exchange or substitution therefor.
ARTICLE 11
MEETINGS OF DEBENTUREHOLDERS
Section 11.01. Purpose Of Meetings. A meeting of Debentureholders may
be called at any time and from time to time pursuant to the provisions of this
Article 11 for any of the following purposes:
(1) to give any notice to the Company or to the Trustee or to
give any directions to the Trustee permitted under this Indenture, or
to consent to the waiving of any default or Event of Default hereunder
and its consequences, or to take any other action authorized to be
taken by Debentureholders pursuant to any of the provisions of Article
8;
(2) to remove the Trustee and nominate a successor trustee
pursuant to the provisions of Article 9;
(3) to consent to the execution of an indenture or indentures
supplemental hereto pursuant to the provisions of Section 12.02; or
(4) to take any other action authorized to be taken by or on
behalf of the Holders of any specified aggregate principal amount of
the Debentures under any other provision of this Indenture or under
applicable law.
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Section 11.02. Call Of Meetings By Trustee. The Trustee may at any time
call a meeting of Debentureholders to take any action specified in Section
11.01, to be held at such time and at such place as the Trustee shall determine.
Notice of every meeting of the Debentureholders, setting forth the time and the
place of such meeting and in general terms the action proposed to be taken at
such meeting and the establishment of any record date pursuant to Section 10.01,
shall be mailed to Holders of Debentures at their addresses as they shall appear
on the Debenture Register. Such notice shall also be mailed to the Company. Such
notices shall be mailed not less than twenty (20) nor more than ninety (90) days
prior to the date fixed for the meeting.
Any meeting of Debentureholders shall be valid without notice if the
Holders of all Debentures then outstanding are present in person or by proxy or
if notice is waived before or after the meeting by the Holders of all Debentures
outstanding, and if the Company and the Trustee are either present by duly
authorized representatives or have, before or after the meeting, waived notice.
Section 11.03. Call Of Meetings By Company Or Debentureholders. In case
at any time the Company, pursuant to a resolution of its Board of Directors, or
the Holders of at least ten percent (10%) in aggregate principal amount of the
Debentures then outstanding, shall have requested the Trustee to call a meeting
of Debentureholders, by written request setting forth in reasonable detail the
action proposed to be taken at the meeting, and the Trustee shall not have
mailed the notice of such meeting within twenty (20) days after receipt of such
request, then the Company or such Debentureholders may determine the time and
the place for such meeting and may call such meeting to take any action
authorized in Section 11.01, by mailing notice thereof as provided in Section
11.02.
Section 11.04. Qualifications For Voting. To be entitled to vote at any
meeting of Debentureholders a person shall (a) be a Holder of one or more
Debentures on the record date pertaining to such meeting or (b) be a person
appointed by an instrument in writing as proxy by a Holder of one or more
Debentures on the record date pertaining to such meeting. The only persons who
shall be entitled to be present or to speak at any meeting of Debentureholders
shall be the persons entitled to vote at such meeting and their counsel and any
representatives of the Trustee and its counsel and any representatives of the
Company and its counsel.
Section 11.05. Regulations. Notwithstanding any other provisions of
this Indenture, the Trustee may make such reasonable regulations as it may deem
advisable for any meeting of Debentureholders, in regard to proof of the holding
of Debentures and of the appointment of proxies, and in regard to the
appointment and duties of inspectors of votes, the submission and examination of
proxies, certificates and other evidence of the right to vote, and such other
matters concerning the conduct of the meeting as it shall think fit.
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The Trustee shall, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called by the
Company or by Debentureholders as provided in Section 11.03, in which case the
Company or the Debentureholders calling the meeting, as the case may be, shall
in like manner appoint a temporary chairman. A permanent chairman and a
permanent secretary of the meeting shall be elected by vote of the Holders of a
majority in principal amount of the Debentures represented at the meeting and
entitled to vote at the meeting.
Subject to the provisions of Section 10.04, at any meeting each
Debentureholder or proxyholder shall be entitled to one vote for each $1,000
principal amount of Debentures held or represented by him; provided that no vote
shall be cast or counted at any meeting in respect of any Debenture challenged
as not outstanding and ruled by the chairman of the meeting to be not
outstanding. The chairman of the meeting shall have no right to vote other than
by virtue of Debentures held by him or instruments in writing as aforesaid duly
designating him as the proxy to vote on behalf of other Debentureholders. Any
meeting of Debentureholders duly called pursuant to the provisions of Section
11.02 or 11.03 may be adjourned from time to time by the Holders of a majority
of the aggregate principal amount of Debentures represented at the meeting,
whether or not constituting a quorum, and the meeting may be held as so
adjourned without further notice.
Section 11.06. Voting. The vote upon any resolution submitted to any
meeting of Debentureholders shall be by written ballot on which shall be
subscribed the signatures of the Holders of Debentures or of their
representatives by proxy and the outstanding principal amount of the Debentures
held or represented by them. The permanent chairman of the meeting shall appoint
two inspectors of votes who shall count all votes cast at the meeting for or
against any resolution and who shall make and file with the secretary of the
meeting their verified written reports in duplicate of all votes cast at the
meeting. A record in duplicate of the proceedings of each meeting of
Debentureholders shall be prepared by the secretary of the meeting and there
shall be attached to said record the original reports of the inspectors of votes
on any vote by ballot taken thereat and affidavits by one or more persons having
knowledge of the facts setting forth a copy of the notice of the meeting and
showing that said notice was mailed as provided in Section 11.02. The record
shall show the principal amount of the Debentures voting in favor of or against
any resolution. The record shall be signed and verified by the affidavits of the
permanent chairman and secretary of the meeting and one of the duplicates shall
be delivered to the Company and the other to the Trustee to be preserved by the
Trustee, the latter to have attached thereto the ballots voted at the meeting.
Any record so signed and verified shall be conclusive evidence of the
matters therein stated.
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Section 11.07. No Delay Of Rights By Meeting. Nothing contained in this
Article 11 shall be deemed or construed to authorize or permit, by reason of any
call of a meeting of Debentureholders or any rights expressly or impliedly
conferred hereunder to make such call, any hindrance or delay in the exercise of
any right or rights conferred upon or reserved to the Trustee or to the
Debentureholders under any of the provisions of this Indenture or of the
Debentures.
ARTICLE 12
SUPPLEMENTAL INDENTURES
Section 12.01. Supplemental Indentures Without Consent of
Debentureholders. The Company, when authorized by the resolutions of the Board
of Directors, and the Trustee may, from time to time, and at any time enter into
an indenture or indentures supplemental hereto for one or more of the following
purposes:
(a) make provision with respect to the conversion rights of the Holders
of Debentures pursuant to the requirements of Section 16.06 and the redemption
obligations of the Company pursuant to the requirements of Section 3.05(e);
(b) to convey, transfer, assign, mortgage or pledge to the Trustee as
security for the Debentures, any property or assets;
(c) to evidence the succession of another Person to the Company, or
successive successions, and the assumption by the successor Person of the
covenants, agreements and obligations of the Company pursuant to Article 13;
(d) to add to the covenants of the Company such further covenants,
restrictions or conditions as the Board of Directors and the Trustee shall
consider to be for the benefit of the Holders of Debentures, and to make the
occurrence, or the occurrence and continuance, of a default in any such
additional covenants, restrictions or conditions a default or an Event of
Default permitting the enforcement of all or any of the several remedies
provided in this Indenture as herein set forth; provided that in respect of any
such additional covenant, restriction or condition, such supplemental indenture
may provide for a particular period of grace after default (which period may be
shorter or longer than that allowed in the case of other defaults) or may
provide for an immediate enforcement upon such default or may limit the remedies
available to the Trustee upon such default;
(e) to provide for the issuance under this Indenture of Debentures in
coupon form (including Debentures registrable as to principal only) and to
provide for exchangeability of such Debentures with the Debentures issued
hereunder in fully registered form and to make all appropriate changes for such
purpose;
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(f) to cure any ambiguity or to correct or supplement any provision
contained herein or in any supplemental indenture that may be defective or
inconsistent with any other provision contained herein or in any supplemental
indenture, or to make such other provisions in regard to matters or questions
arising under this Indenture that shall not materially adversely affect the
interests of the Holders of the Debentures;
(g) to evidence and provide for the acceptance of appointment hereunder
by a successor Trustee with respect to the Debentures; or
(h) to modify, eliminate or add to the provisions of this Indenture to
such extent as shall be necessary to effect the qualifications of this Indenture
under the Trust Indenture Act, or under any similar federal statute hereafter
enacted.
Upon the written request of the Company, accompanied by a copy of the
resolutions of the Board of Directors certified by its Secretary or Assistant
Secretary authorizing the execution of any supplemental indenture, the Trustee
is hereby authorized to join with the Company in the execution of any such
supplemental indenture, to make any further appropriate agreements and
stipulations that may be therein contained and to accept the conveyance,
transfer and assignment of any property thereunder, but the Trustee shall not be
obligated to, but may in its discretion, enter into any supplemental indenture
that affects the Trustee's own rights, duties or immunities under this Indenture
or otherwise.
Any supplemental indenture authorized by the provisions of this Section
12.01 may be executed by the Company and the Trustee without the consent of the
Holders of any of the Debentures at the time outstanding, notwithstanding any of
the provisions of Section 12.02.
Notwithstanding any other provision of the Indenture or the Debentures,
the Registration Rights Agreement and the obligation to pay Liquidated Damages
thereunder may be amended, modified or waived in accordance with the provisions
of the Registration Rights Agreement.
Section 12.02. Supplemental Indenture With Consent Of Debentureholders.
With the consent (evidenced as provided in Article 10) of the Holders of at
least a majority in aggregate principal amount of the Debentures at the time
outstanding, the Company, when authorized by the resolutions of the Board of
Directors, and the Trustee may, from time to time and at any time, enter into an
indenture or indentures supplemental hereto for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Indenture or any supplemental indenture or of modifying in any manner the
rights of the Holders of the Debentures; provided that no such supplemental
indenture shall (i) extend the fixed maturity of any Debenture, or reduce the
rate or extend the time of payment of interest thereon, or reduce the principal
amount thereof or premium, if any, thereon, or reduce any amount payable on
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redemption or repurchase thereof, or impair the right of any Debentureholder to
institute suit for the payment thereof, or make the principal thereof or
interest or premium, if any, thereon payable in any coin or currency other than
that provided in the Debentures, or change the obligation of the Company to
redeem any Debenture on a redemption date in a manner adverse to the Holders of
Debentures, or change the obligation of the Company to redeem any Debenture upon
the happening of a Designated Event in a manner adverse to the Holders of
Debentures, or change the obligation of the Company to repurchase any Debenture
on a Repurchase Date in a manner adverse to the Holders of Debentures, or impair
the right to convert the Debentures into Common Stock subject to the terms set
forth herein, including Section 16.06, in each case, without the consent of the
Holder of each Debenture so affected, or modify any of the provisions of this
Section 12.02 or Section 8.07, except to increase any such percentage or to
provide that certain other provisions of this Indenture cannot be modified or
waived without the consent of the Holder of each Debenture so affected, or
change any obligation of the Company to maintain an office or agency in the
places and for the purposes set forth in Section 6.01, or reduce the quorum or
voting requirements set forth in Article 11 or change the provisions of Article
4 in a manner adverse to the Holders of Debentures, or (ii) reduce the aforesaid
percentage of Debentures, the Holders of which are required to consent to any
such supplemental indenture, without the consent of the Holders of all
Debentures then outstanding.
Upon the written request of the Company, accompanied by a copy of the
resolutions of the Board of Directors certified by its Secretary or Assistant
Secretary authorizing the execution of any such supplemental indenture, and upon
the filing with the Trustee of evidence of the consent of Debentureholders as
aforesaid, the Trustee shall join with the Company in the execution of such
supplemental indenture unless such supplemental indenture affects the Trustee's
own rights, duties or immunities under this Indenture or otherwise, in which
case the Trustee may in its discretion, but shall not be obligated to, enter
into such supplemental indenture.
It shall not be necessary for the consent of the Debentureholders under
this Section 12.02 to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such consent shall approve the
substance thereof.
Section 12.03. Effect Of Supplemental Indenture. Any supplemental
indenture executed pursuant to the provisions of this Article 12 shall comply
with the Trust Indenture Act, as then in effect, provided that this Section
12.03 shall not require such supplemental indenture or the Trustee to be
qualified under the Trust Indenture Act prior to the time such qualification is
in fact required under the terms of the Trust Indenture Act or the Indenture has
been qualified under the Trust Indenture Act, nor shall it constitute any
admission or acknowledgment by any party to such supplemental indenture that any
such qualification is required prior to the time such qualification is in fact
required under the terms of the Trust Indenture Act or the Indenture has been
qualified under the Trust Indenture Act. Upon the execution of any supplemental
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indenture pursuant to the provisions of this Article 12, this Indenture shall be
and be deemed to be modified and amended in accordance therewith and the
respective rights, limitation of rights, obligations, duties and immunities
under this Indenture of the Trustee, the Company and the Holders of Debentures
shall thereafter be determined, exercised and enforced hereunder, subject in all
respects to such modifications and amendments and all the terms and conditions
of any such supplemental indenture shall be and be deemed to be part of the
terms and conditions of this Indenture for any and all purposes.
Section 12.04. Notation On Debentures. Debentures authenticated and
delivered after the execution of any supplemental indenture pursuant to the
provisions of this Article 12 may bear a notation in form approved by the
Trustee as to any matter provided for in such supplemental indenture. If the
Company or the Trustee shall so determine, new Debentures so modified as to
conform, in the opinion of the Trustee and the Board of Directors, to any
modification of this Indenture contained in any such supplemental indenture may,
at the Company's expense, be prepared and executed by the Company, authenticated
by the Trustee (or an authenticating agent duly appointed by the Trustee
pursuant to Section 17.10) and delivered in exchange for the Debentures then
outstanding, upon surrender of such Debentures then outstanding.
Section 12.05. Evidence Of Compliance Of Supplemental Indenture To Be
Furnished To Trustee. Prior to entering into any supplemental indenture, the
Trustee shall be provided with an Officers' Certificate and an Opinion of
Counsel as conclusive evidence that any supplemental indenture executed pursuant
hereto complies with the requirements of this Article 12 and is otherwise
authorized or permitted by this Indenture.
ARTICLE 13
CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE
Section 13.01. Company May Consolidate On Certain Terms. Subject to the
provisions of Section 13.02, the Company shall not consolidate or merge with or
into any other Person or Persons (whether or not affiliated with the Company),
nor shall the Company or its successor or successors be a party or parties to
successive consolidations or mergers, nor shall the Company sell, convey,
transfer or lease all or substantially all of the property and assets of the
Company, to any other Person (whether or not affiliated with the Company),
unless: (i) the Company is the surviving Person, or the resulting, surviving or
transferee Person is a corporation organized and existing under the laws of the
United States of America, any state thereof or the District of Columbia; (ii)
upon any such consolidation, merger, sale, conveyance, transfer or lease, the
due and punctual payment of the principal of and premium, if any, and interest
on all of the Debentures, according to their tenor and the due and punctual
performance and observance of all of the covenants and conditions of this
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Indenture to be performed by the Company, shall be expressly assumed, by
supplemental indenture satisfactory in form to the Trustee, executed and
delivered to the Trustee by the Person (if other than the Company) formed by
such consolidation, or into which the Company shall have been merged, or by the
Person that shall have acquired or leased such property, and such supplemental
indenture shall provide for the applicable conversion rights set forth in
Section 16.06; and (iii) immediately after giving effect to the transaction
described above, no Event of Default, and no event which, after notice or lapse
of time or both, would become an Event of Default, shall have happened and be
continuing.
Section 13.02. Successor To Be Substituted. In case of any such
consolidation, merger or sale, conveyance, transfer or lease of all or
substantially all of the Company's properties and assets, and upon the
assumption by the successor Person, by supplemental indenture, executed and
delivered to the Trustee and satisfactory in form to the Trustee, of the due and
punctual payment of the principal of and premium, if any, and interest on all of
the Debentures and the due and punctual performance of all of the covenants and
conditions of this Indenture to be performed by the Company, such successor
Person shall succeed to and be substituted for the Company, with the same effect
as if it had been named herein as the party of this first part. Such successor
Person thereupon may cause to be signed, and may issue either in its own name or
in the name of Impax Laboratories, Inc. any or all of the Debentures, issuable
hereunder that theretofore shall not have been signed by the Company and
delivered to the Trustee; and, upon the order of such successor Person instead
of the Company and subject to all the terms, conditions and limitations in this
Indenture prescribed, the Trustee shall authenticate and shall deliver, or cause
to be authenticated and delivered, any Debentures that previously shall have
been signed and delivered by the officers of the Company to the Trustee for
authentication, and any Debentures that such successor Person thereafter shall
cause to be signed and delivered to the Trustee for that purpose. All the
Debentures so issued shall in all respects have the same legal rank and benefit
under this Indenture as the Debentures theretofore or thereafter issued in
accordance with the terms of this Indenture as though all of such Debentures had
been issued at the date of the execution hereof. In the event of any such
consolidation, merger or sale, conveyance, transfer or lease of all or
substantially all of the Company's properties and assets, the Person named as
the "COMPANY" in the first paragraph of this Indenture or any successor that
shall thereafter have become such in the manner prescribed in this Article 13
may be dissolved, wound up and liquidated at any time thereafter and such Person
shall be released from its liabilities as obligor and maker of the Debentures
and from its obligations under this Indenture.
In case of any such consolidation, merger or sale, conveyance, transfer
or lease of all or substantially all of the Company's properties and assets,
such changes in phraseology and form (but not in substance) may be made in the
Debentures thereafter to be issued as may be appropriate.
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Section 13.03. Opinion Of Counsel To Be Given Trustee. The Trustee
shall receive an Officers' Certificate and an Opinion of Counsel as conclusive
evidence that any such consolidation, merger or sale, conveyance, transfer or
lease of all or substantially all of the Company's properties and assets and any
such assumption complies with the provisions of this Article 13.
ARTICLE 14
SATISFACTION AND DISCHARGE OF INDENTURE
Section 14.01. Discharge Of Indenture. When (a) the Company shall
deliver to the Trustee for cancellation all Debentures theretofore authenticated
(other than any Debentures that have been destroyed, lost or stolen and in lieu
of or in substitution for which other Debentures shall have been authenticated
and delivered) and not theretofore canceled, or (b) all the Debentures not
theretofore canceled or delivered to the Trustee for cancellation shall have
become due and payable, or are by their terms to become due and payable within
one year or are to be called for redemption within one year under arrangements
satisfactory to the Trustee for the giving of notice of redemption, and the
Company shall deposit with the Trustee, in trust, funds sufficient to pay at
maturity or upon redemption of all of the Debentures (other than any Debentures
that shall have been mutilated, destroyed, lost or stolen and in lieu of or in
substitution for which other Debentures shall have been authenticated and
delivered) not theretofore canceled or delivered to the Trustee for
cancellation, including principal and premium, if any, and interest due or to
become due to such date of maturity or redemption date, as the case may be,
accompanied by a verification report, as to the sufficiency of the deposited
amount, from an independent certified accountant or other financial professional
satisfactory to the Trustee, and if the Company shall also pay or cause to be
paid all other sums payable hereunder by the Company, then this Indenture shall
cease to be of further effect (except as to (i) remaining rights of registration
of transfer, substitution and exchange and conversion of Debentures, (ii) rights
hereunder of Debentureholders to receive payments of principal of and premium,
if any, and interest on, the Debentures and the other rights, duties and
obligations of Debentureholders, as beneficiaries hereof with respect to the
amounts, if any, so deposited with the Trustee and (iii) the rights, obligations
and immunities of the Trustee hereunder), and the Trustee, on written demand of
the Company accompanied by an Officers' Certificate and an Opinion of Counsel as
required by Section 17.04 and at the cost and expense of the Company, shall
execute proper instruments acknowledging satisfaction of and discharging this
Indenture; the Company, however, hereby agrees to reimburse the Trustee for any
costs or expenses thereafter reasonably and properly incurred by the Trustee and
to compensate the Trustee for any services thereafter reasonably and properly
rendered by the Trustee in connection with this Indenture or the Debentures.
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Section 14.02. Deposited Monies To Be Held In Trust By Trustee. Subject
to Section 14.04, all monies deposited with the Trustee pursuant to Section
14.01, shall be held in trust for the sole benefit of the Debentureholders, and
such monies shall be applied by the Trustee to the payment, either directly or
through any paying agent (including the Company if acting as its own paying
agent), to the Holders of the particular Debentures for the payment or
redemption of which such monies have been deposited with the Trustee, of all
sums due and to become due thereon for principal and interest and premium, if
any.
Section 14.03. Paying Agent To Repay Monies Held. Upon the satisfaction
and discharge of this Indenture, all monies then held by any paying agent of the
Debentures (other than the Trustee) shall, upon written request of the Company,
be repaid to it or paid to the Trustee, and thereupon such paying agent shall be
released from all further liability with respect to such monies.
Section 14.04. Return Of Unclaimed Monies. Subject to the requirements
of applicable law, any monies deposited with or paid to the Trustee for payment
of the principal of, premium, if any, or interest on Debentures and not applied
but remaining unclaimed by the Holders of Debentures for two years after the
date upon which the principal of, premium, if any, or interest on such
Debentures, as the case may be, shall have become due and payable, shall be
repaid to the Company by the Trustee on demand and all liability of the Trustee
shall thereupon cease with respect to such monies; and the Holder of any of the
Debentures shall thereafter look only to the Company for any payment that such
Holder may be entitled to collect unless an applicable abandoned property law
designates another Person.
Section 14.05. Reinstatement. If the Trustee or the paying agent is
unable to apply any money in accordance with Section 14.02 by reason of any
order or judgment of any court or governmental authority enjoining, restraining
or otherwise prohibiting such application, the Company's obligations under this
Indenture and the Debentures shall be revived and reinstated as though no
deposit had occurred pursuant to Section 14.01 until such time as the Trustee or
the paying agent is permitted to apply all such money in accordance with Section
14.02; provided that if the Company makes any payment of interest on or
principal of any Debenture following the reinstatement of its obligations, the
Company shall be subrogated to the rights of the Holders of such Debentures to
receive such payment from the money held by the Trustee or paying agent.
ARTICLE 15
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS
Section 15.01. Indenture And Debentures Solely Corporate Obligations.
No recourse for the payment of the principal of or premium, if any, or Interest
on any Debenture, or for any claim based thereon or otherwise in respect
thereof, and no recourse under or upon any obligation, covenant or agreement of
the Company in this Indenture or in any supplemental indenture or in any
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Debenture, or because of the creation of any indebtedness represented thereby,
shall be had against any incorporator, stockholder, employee, agent, officer,
director or subsidiary, as such, past, present or future, of the Company or of
any successor corporation, either directly or through the Company or any
successor corporation, whether by virtue of any constitution, statute or rule of
law, or by the enforcement of any assessment or penalty or otherwise; it being
expressly understood that all such liability is hereby expressly waived and
released as a condition of, and as a consideration for, the execution of this
Indenture and the issue of the Debentures.
ARTICLE 16
CONVERSION OF DEBENTURES
Section 16.01. Right To Convert. Subject to and upon compliance with
the provisions of this Indenture, prior to March 31, 2024, the Holder of any
Debenture shall have the right, at such Holder's option, to convert the
principal amount of the Debenture, or any portion of such principal amount which
is a multiple of $1,000, into fully paid and non-assessable shares of Common
Stock (as such shares shall then be constituted) at the Conversion Rate in
effect at such time, by surrender of the Debenture so to be converted in whole
or in part, together with any required funds, under the circumstances described
in this Section 16.01 and in the manner provided in Section 16.02. The
Debentures shall be convertible only upon the occurrence of one of the following
events:
(i) (A) during any Fiscal Quarter commencing prior to April 1,
2019, if the Closing Sale Price exceeds 120% of the Conversion Price in
effect for at least 20 Trading Days in the 30 consecutive Trading Day
period ending on the last Trading Day of the immediately preceding
Fiscal Quarter (it being understood for purposes of this Section
16.01(a)(i) that the Conversion Price in effect at the close of
business on each of the 30 consecutive Trading Days should be used),
initially 120% of $28.08, or $33.70 (the "CONVERSION TRIGGER PRICE");
(B) at any time after April 1, 2019 and prior to March 31,
2024, if the Closing Sale Price exceeds the Conversion Trigger Price on
any Trading Day after April 1, 2019.
(ii) during the five Business Day period after any five
consecutive Trading Day period in which the Trading Price per $1,000
principal amount of the Debentures for each day of such five Trading
Day period was less than 98% of the product of the Closing Sale Price
and the Conversion Rate; provided that if on the date of any conversion
pursuant to this clause (A) the Closing Sale Price is greater than 100%
but less than 120% of the Conversion Price, a Holder shall receive, in
lieu of Common Stock based on the Conversion Price, cash or Common
Stock or a combination of cash and Common Stock, at the Company's
option, with a value equal to the principal amount of the Holder's
Debentures plus accrued interest as of the Conversion Date (a
"PRINCIPAL VALUE CONVERSION");
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(iii) if such Debenture has been called for redemption, at any
time on or after the date the notice of redemption has been given until
the close of business on the Business Day immediately preceding the
redemption date; or
(iv) as provided in Section (b) of this Section 16.01.
The Trustee (or other conversion agent appointed by the Company) shall,
on the Company's behalf, determine if the Debentures are convertible in
accordance with Section 16.01(a)(i), as a result of the occurrence of an event
specified in Section 16.01(a)(i); provided that the Company shall provide to the
conversion agent, upon written request, the Closing Sale Price of the Common
Stock. Prior to April 1, 2019, the conversion agent shall make such
determination for the last 30 consecutive Trading Days ending on the last
Trading Day of each calendar quarter. Beginning after April 1, 2019, the
conversion agent shall make such determination on a daily basis. If the
Debentures shall be so convertible the Trustee (or other conversion agent
appointed by the Company) shall promptly deliver to the Company and the Trustee
(if the Trustee is not the conversion agent) written notice thereof. Whenever
the Debentures shall become convertible pursuant to this Section 16.01, the
Company or, at the Company's request, the Trustee (or other conversion agent
appointed by the Company) in the name and at the expense of the Company, shall
notify the Holders of the event triggering such convertibility in the manner
provided in Section 17.03, and the Company shall also publicly announce such
information and publish it on the Company's web site. Any notice so given shall
be conclusively presumed to have been duly given, whether or not the Holder
receives such notice.
With respect to a conversion pursuant to Section 16.01(a)(ii), the
Trustee (or other conversion agent appointed by the Company) shall have no
obligation to determine the Trading Price under this Section 16.01 unless the
Company has requested such a determination; and the Company shall have no
obligation to make such request unless a Holder provides it with reasonable
evidence that the Trading Price per $1,000 principal amount of Debentures would
be less than 98% of the product of the Closing Sale Price and the Conversion
Rate; provided that the Trustee (or other conversion agent appointed by the
Company) shall be under no duty or obligation to make the calculations described
in Section 16.01(a)(ii) hereof or to determine whether the Debentures are
convertible pursuant to such section. For the avoidance of doubt, the Company
shall make the calculations described in Section 16.01(a)(ii), using the Trading
Price provided by the Trustee (or other conversion agent appointed by the
Company).
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The Trustee (or other conversion agent appointed by the Company) shall
be entitled at its sole discretion to consult with the Company and to request
the assistance of the Company in connection with the Trustee's duties and
obligations pursuant to Section 16.01(a)(i) and Section 16.01(a)(ii) hereof (or
those of other conversion agent appointed by the Company) (including without
limitation the calculation or determination of the Conversion Price, the Closing
Sales Price and the Trading Price), and the Company agrees, if requested by the
Trustee (or other conversion agent appointed by the Company), to cooperate with,
and provide assistance to, the Trustee (or other conversion agent appointed by
the Company) in carrying out its duties under this Section 16.01; provided,
however, that nothing herein shall be construed to relieve the Trustee of its
duties pursuant to Section 16.01(a)(i) and Section 16.01(a)(ii) hereof.
(b) In addition, if:
(i) (A) the Company distributes to all holders of its Common
Stock rights or warrants entitling them (for a period expiring within
45 days of the record date for the determination of the stockholders
entitled to receive such distribution) to subscribe for or purchase
shares of Common Stock, at a price per share less than the Closing Sale
Price for the Trading Day immediately preceding the date such
distribution is first publicly announced by the Company, or (B) the
Company distributes to all holders of its Common Stock, cash or other
assets, debt securities or rights to purchase its securities, where the
Fair Market Value of such distribution per share of Common Stock
exceeds 15% of the Closing Sale Price on the Trading Day immediately
preceding the date such distribution is first publicly announced by the
Company, then, in either case, the Debentures may be surrendered for
conversion at any time on and after the date that the Company gives
notice to the Holders of such distribution, which shall be not less
than 20 days prior to the Ex-Dividend Time for such distribution, until
the earlier of the close of business on the Business Day immediately
preceding, but not including, the Ex-Dividend Time or the date the
Company publicly announces that such distribution will not take place;
provided that no adjustment to the Conversion Price or the ability of a
Holder of a Debenture to convert will be made if the Holder will
otherwise participate in such distribution without conversion; or
(ii) the Company consolidates with or merges with or into
another Person or is a party to a binding share exchange or conveys,
transfers, sells, leases or otherwise disposes of all or substantially
all of its properties and assets, other than a merger with a
wholly-owned subsidiary, in each case pursuant to which the Company's
Common Stock is converted into cash, securities or other property, then
the Debentures may be surrendered for conversion at any time from and
after the date fifteen (15) days prior to the anticipated effective
date of the transaction and ending on and including the date fifteen
(15) days after the consummation of the transaction (or, if such
merger, consolidation or share exchange also constitutes a Designated
Event, until the corresponding Designated Event Repurchase Date); and
the Board of Directors shall determine the anticipated effective date
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of the transaction, and such determination shall be conclusive and
binding on the Holders and shall be publicly announced by the Company
and posted on its web site not later than two Business Day prior to
such 15th day; and, at such effective time, the right to convert
Debentures into Common Stock shall be changed, as set forth in Section
16.06, into a right to convert such Debentures into the kind and amount
of cash, securities and other property that the Holder of such
Debentures would have receive if such Holder had converted the
Debentures immediately prior to such transaction.
"EX-DIVIDEND TIME" means, with respect to any distribution on shares of
Common Stock, the first date on which the shares of Common Stock trade regular
way on the principal securities market on which the shares of Common Stock are
then traded without the right to receive such distribution.
(c) A Debenture in respect of which a Holder is electing to exercise
its option to require redemption upon a Designated Event pursuant to Section
3.05 or repurchase pursuant to Section 3.06 may be converted only if such Holder
withdraws its election in accordance with Section 3.05(b) or Section 3.08,
respectively. A Holder of Debentures is not entitled to any rights of a holder
of Common Stock until such Holder has converted his Debentures to Common Stock,
and only to the extent such Debentures are deemed to have been converted to
Common Stock under this Article 16.
Section 16.02. Exercise Of Conversion Privilege; Issuance Of Common
Stock On Conversion; No Adjustment For Interest Or Dividends. In order to
exercise the conversion privilege with respect to any Debenture in certificated
form, the Company must receive at the office or agency of the Company maintained
for that purpose or, at the option of such Holder, the Corporate Trust Office,
such Debenture with the original or facsimile of the form entitled "CONVERSION
NOTICE" on the reverse thereof, duly completed and manually signed, together
with such Debentures duly endorsed for transfer, accompanied by the funds, if
any, required by the penultimate paragraph of this Section 16.02. Such notice
shall also state the name or names (with address or addresses) in which the
certificate or certificates for shares of Common Stock which shall be issuable
on such conversion shall be issued, and shall be accompanied by transfer or
similar taxes, if required pursuant to Section 16.07.
In order to exercise the conversion privilege with respect to any
interest in a Global Debenture, the beneficial holder must complete, or cause to
be completed, the appropriate instruction form for conversion pursuant to the
Depositary's book-entry conversion program, deliver, or cause to be delivered,
by book-entry delivery an interest in such Global Debenture, furnish appropriate
endorsements and transfer documents if required by the Company or the Trustee or
conversion agent, and pay the funds, if any, required by this Section 16.02 and
any transfer taxes if required pursuant to Section 16.07.
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In order to validly exercise the conversion privilege under this
Section 16.02, a conversion must be effected prior to the expiration of the
period of time set forth in the applicable clause of Section 16.01. Each
conversion shall be deemed to have been effected as to any such Debenture (or
portion thereof) on the date on which the requirements set forth above in this
Section 16.02 have been satisfied as to such Debenture (or portion thereof) (the
"CONVERSION DATE"), and the Person in whose name any certificate or certificates
for shares of Common Stock shall be issuable upon such conversion shall be
deemed to have become on said date the holder of record of the shares
represented thereby; provided that any such surrender on any date when the stock
transfer books of the Company shall be closed shall constitute the Person in
whose name the certificates are to be issued as the holder of record thereof for
all purposes on the next succeeding day on which such stock transfer books are
open, but such conversion shall be at the Conversion Rate in effect on the date
upon which such Debenture shall be surrendered.
In the case of a Principal Value Conversion, a Holder will receive
either cash, Common Stock or a combination of cash and Common Stock, at the
Company's option, with a value equal to the principal amount of the Debenture
converted plus accrued interest, as of the Conversion Date. If a Holder
surrenders its Debentures for conversion and it is a Principal Value Conversion,
the Company will notify the Holder by the second Trading Day following the
Conversion Date whether it will pay all or a portion of the principal amount
plus accrued and unpaid interest in cash, Common Stock or a combination of cash
and Common Stock, and in what percentage. Any Common Stock delivered upon a
Principal Value Conversion will be valued at the greater of (x) the Conversion
Price on the Conversion Date and (y) the applicable stock price as of the
Conversion Date. For purposes of this Section 16.02, the "APPLICABLE STOCK
PRICE" means, in respect of a date of determination, the average of the Closing
Sale Price per share of Common Stock over the five Trading Day period starting
the third Trading Day following such date of determination.
As promptly as practicable following the Conversion Date, subject to
compliance with any restrictions on transfer if shares issuable on conversion
are to be issued in a name other than that of the Debentureholder (as if such
transfer were a transfer of the Debenture or Debentures (or portion thereof) so
converted) but in any event, no later than five Business Days following the
Conversion Date, the Company shall issue and shall deliver to such
Debentureholder at the office or agency maintained by the Company for such
purpose pursuant to Section 6.02, a certificate or certificates for the number
of full shares of Common Stock issuable upon the conversion of such Debenture or
portion thereof as determined by the Company in accordance with the provisions
of this Article 16 and a check or cash in respect of any fractional interest in
respect of a share of Common Stock arising upon such conversion, calculated by
the Company as provided in Section 16.03. In case any Debenture of a
denomination greater than $1,000 shall be surrendered for partial conversion,
and subject to Section 2.03, the Company shall execute and the Trustee shall
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authenticate and deliver to the Holder of the Debenture so surrendered, without
charge to him, a new Debenture or Debentures in authorized denominations in an
aggregate principal amount equal to the unconverted portion of the surrendered
Debenture.
Any Debenture or portion thereof surrendered for conversion during the
period from the close of business on the Record Date for any interest payment
date to the close of business on the Business Day preceding the following
interest payment date that has not been called for redemption during such period
shall be accompanied by payment, in immediately available funds or other funds
acceptable to the Company, of an amount equal to the interest otherwise payable
on such interest payment date on the principal amount being converted; provided
that no such payment need be made (1) if the Company has specified a redemption
date that is after a Record Date and prior to the next interest payment date,
(2) if the Company has specified a redemption date following a Designated Event
that is during such period or (3) to the extent of any overdue interest, if any
overdue interest exists at the time of conversion with respect to such
debenture. Except as provided above in this Section 16.02, no payment or other
adjustment shall be made for interest accrued on any Debenture converted or for
dividends on any shares issued upon the conversion of such Debenture as provided
in this Article 16.
Upon the conversion of an interest in a Global Debenture, the Trustee
(or other conversion agent appointed by the Company), or the Custodian at the
direction of the Trustee (or other conversion agent appointed by the Company),
shall make a notation on such Global Debenture as to the reduction in the
principal amount represented thereby.
Upon the conversion of a Debenture, that portion of the accrued but
unpaid interest, attributable to the period from the issue date of the Debenture
to the conversion date, with respect to the converted Debenture shall not be
cancelled, extinguished or forfeited, but rather shall be deemed to be paid in
full to the Holder thereof through delivery of the Common Stock (together with
the cash payment, if any in lieu of fractional shares) in exchange for the
Debenture being converted pursuant to the provisions hereof; and the fair market
value of such shares of Common Stock (together with any such cash payment in
lieu of fractional shares) shall be treated as issued, to the extent thereof,
first in exchange for and in satisfaction of our obligation to pay the principal
amount of the converted Debenture, the accrued but unpaid interest, through the
conversion date from the issue date, and the balance, if any, of such fair
market value of such Common Stock (and any such cash payment) shall be treated
as issued in exchange for and in satisfaction of the right to convert the
Debenture being converted pursuant to the provisions hereof.
Section 16.03. Cash Payments in Lieu of Fractional Shares. No
fractional shares of Common Stock or scrip certificates representing fractional
shares shall be issued upon conversion of Debentures. If more than one Debenture
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shall be surrendered for conversion at one time by the same Holder, the number
of full shares that shall be issuable upon conversion shall be computed on the
basis of the aggregate principal amount of the Debentures (or specified portions
thereof to the extent permitted hereby) so surrendered. If any fractional share
of stock would be issuable upon the conversion of any Debenture or Debentures,
the Company shall make an adjustment and payment therefor in cash at the current
market price thereof to the Holder of Debentures. The current market price of a
share of Common Stock shall be the Closing Sale Price on the last Trading Day
immediately preceding the day on which the Debentures (or specified portions
thereof) are deemed to have been converted.
Section 16.04. Conversion Rate. Each $1,000 principal amount of the
Debentures shall be convertible into the number of shares of Common Stock
specified in the form of Debenture (herein called the "CONVERSION RATE")
attached as Exhibit A hereto, subject to adjustment as provided in this Article
16.
Section 16.05. Adjustment Of Conversion Rate. The Conversion Rate shall
be adjusted from time to time by the Company 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 Rate shall be increased so that the same shall equal the
rate determined by multiplying the Conversion Rate 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 by a
fraction,
(i) the numerator of which shall be the sum of the number of
shares of Common Stock outstanding at the close of business on the date
fixed for the determination of stockholders entitled to receive such
dividend or other distribution plus the total number of shares of
Common Stock constituting such dividend or other distribution; and
(ii) the denominator of which shall be the number of shares of
Common Stock outstanding at the close of business on the date fixed for
such determination,
such increase to become effective immediately after the opening of business on
the day following the date fixed for such determination. For the purpose of this
paragraph (a), the number of shares of Common Stock at any time outstanding
shall not include shares held in the treasury of the Company. The Company will
not pay any dividend or make any distribution on shares of Common Stock held in
the treasury of the Company. If any dividend or distribution of the type
described in this Section 16.05(a) is declared but not so paid or made, the
Conversion Rate shall again be adjusted to the Conversion Rate that would then
be in effect if such dividend or distribution had not been declared.
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(b) In case the Company shall issue rights or warrants to all holders
of its outstanding shares of Common Stock entitling them (for a period expiring
within forty-five (45) days after the date fixed for determination of
stockholders entitled to receive such rights or warrants) to subscribe for or
purchase shares of Common Stock at a price per share less than the Current
Market Price on the date fixed for determination of stockholders entitled to
receive such rights or warrants, the Conversion Rate shall be increased so that
the same shall equal the rate determined by multiplying the Conversion Rate in
effect immediately prior to the date fixed for determination of stockholders
entitled to receive such rights or warrants by a fraction,
(i) the numerator of which shall be the number of shares of
Common Stock outstanding on the date fixed for determination of
stockholders entitled to receive such rights or warrants plus the total
number of additional shares of Common Stock offered for subscription or
purchase, and
(ii) the denominator of which shall be the sum of the number
of shares of Common Stock outstanding at the close of business on the
date fixed for determination of stockholders entitled to receive such
rights or warrants plus the number of shares that the aggregate
offering price of the total number of shares so offered would purchase
at such Current Market Price.
Such adjustment shall be successively made whenever any such rights or
warrants are issued, and shall become effective immediately after the opening of
business on the day following the date fixed for determination of stockholders
entitled to receive such rights or warrants. To the extent that shares of Common
Stock are not delivered after the expiration of such rights or warrants, the
Conversion Rate shall be readjusted to the Conversion Rate that would then be in
effect had the adjustments made upon the issuance of such rights or warrants
been made on the basis of delivery of only the number of shares of Common Stock
actually delivered. If such rights or warrants are not so issued, the Conversion
Rate shall again be adjusted to be the Conversion Rate that would then be in
effect if such date fixed for the determination of stockholders entitled to
receive such rights or warrants had not been fixed. In determining whether any
rights or warrants entitle the holders to subscribe for or purchase shares of
Common Stock at less than such Current Market Price, and in determining the
aggregate offering price of such shares of Common Stock, there shall be taken
into account any consideration received by the Company for such rights or
warrants and any amount payable on exercise or conversion thereof, the value of
such consideration, if other than cash, to be determined by the Board of
Directors.
(c) In case outstanding shares of Common Stock shall be subdivided into
a greater number of shares of Common Stock, the Conversion Rate in effect at the
opening of business on the day following the day upon which such subdivision
becomes effective shall be proportionately increased, and conversely, in case
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outstanding shares of Common Stock shall be combined into a smaller number of
shares of Common Stock, the Conversion Rate in effect at the opening of business
on the day following the day upon which such combination becomes effective shall
be proportionately reduced, such increase or reduction, 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.
(d) In case the Company shall, by dividend or otherwise, distribute to
all holders of its Common Stock a portion of its assets (including cash and
shares of a Subsidiary) or debt or other securities issued by the Company or
certain rights to purchase the Company's securities (including securities, but
excluding any rights or warrants referred to in Section 16.05(b), and excluding
any dividend or distribution (x) paid exclusively in cash or (y) referred to in
Section 16.05(a) (any of the foregoing hereinafter in this Section 16.05(d))
called the "SECURITIES")), then, in each such case (unless the Company elects to
reserve such Securities for distribution to the Debentureholders upon the
conversion of the Debentures so that any such Holder converting Debentures will
receive upon such conversion, in addition to the shares of Common Stock to which
such Holder is entitled, the amount and kind of such Securities which such
Holder would have received if such Holder had converted its Debentures into
Common Stock immediately prior to the Record Date) the Conversion Rate shall be
increased so that the same shall be equal to the rate determined by multiplying
the Conversion Rate in effect on the Record Date with respect to such
distribution by a fraction,
(i) the numerator of which shall be the Current Market Price
on such Record Date; and
(ii) the denominator of which shall be the Current Market
Price on such Record Date less the fair market value (as determined by
the Board of Directors, whose determination shall be conclusive, and
described in a resolution of the Board of Directors) on the Record Date
of the portion of the Securities so distributed applicable to one share
of Common Stock,
such adjustment to become effective immediately prior to the opening of business
on the day following such Record Date; provided that if the then fair market
value (as so determined) of the portion of the Securities so distributed
applicable to one share of Common Stock is equal to or greater than the Current
Market Price on the Record Date, in lieu of the foregoing adjustment, adequate
provision shall be made so that each Debentureholder shall have the right to
receive upon conversion the amount of Securities such Holder would have received
had such Holder converted each Debenture on the Record Date. If such dividend or
distribution is not so paid or made, the Conversion Rate shall again be adjusted
to be the Conversion Rate that 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 16.05(d) by
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reference to the actual or when issued trading market for any securities, it
must in doing so consider the prices in such market over the same period used in
computing the Current Market Price on the applicable Record Date.
Notwithstanding the foregoing, if the Securities distributed by the Company to
all holders of its Common Stock consists of capital stock of, or similar equity
interests in, a Subsidiary or other business unit, the Conversion Rate shall be
increased so that the same shall be equal to the rate determined by multiplying
the Conversion Rate in effect on the Record Date with respect to such
distribution by a fraction:
(i) the numerator of which shall be the sum of (x) the average Closing Sale
Price over the ten (10) consecutive Trading Day period (the "SPINOFF VALUATION
PERIOD") commencing on and including the fifth Trading Day after the date on
which "ex-dividend trading" commences on the Common Stock on the Nasdaq National
Market or such other national or regional exchange or market on which the Common
stock is then listed or quoted and (y) the average Fair Market Value (as
determined by the Board of Directors, whose determination shall be conclusive,
and described in a resolution of the Board of Directors) over the Spinoff
Valuation Period of the portion of the Securities so distributed applicable to
one share of Common Stock; and
(ii) the denominator of which shall be the average Closing Sale Price over the
Spinoff Valuation Period,
such adjustment to become effective immediately prior to the opening of business
on the day following such Record Date; provided that the Company may in lieu of
the foregoing adjustment make adequate provision so that each Debentureholder
shall have the right to receive upon conversion the amount of Securities such
Holder would have received had such Holder converted each Debenture on the
Record Date with respect to such distribution.
Rights 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 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 Section 16.05 (and no adjustment to the Conversion Rate under
this Section 16.05 will be required) until the occurrence of the earliest
Trigger Event, whereupon such rights and warrants shall be deemed to have been
distributed and an appropriate adjustment (if any is required) to the Conversion
Rate shall be made under this Section 16.05(d). If any such right or warrant,
including any such existing rights or warrants distributed prior to the date of
this Indenture, are subject to events, upon the occurrence of which such rights
or warrants become exercisable to purchase different securities, evidences of
indebtedness or other assets, then the date of the occurrence of any and each
such event shall be deemed to be the date of distribution and record date with
respect to new rights or warrants with such rights (and a termination or
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expiration of the existing rights or warrants without exercise by any of the
holders thereof). In addition, in the event of any distribution (or deemed
distribution) of rights or warrants, or any Trigger Event or other event (of the
type described in the preceding sentence) with respect thereto that was counted
for purposes of calculating a distribution amount for which an adjustment to the
Conversion Rate under this Section 16.05 was made, (1) in the case of any such
rights or warrants that shall all have been redeemed or repurchased without
exercise by any holders thereof, the Conversion Rate 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 or holders
of Common Stock with respect to such rights or warrants (assuming such holder
had retained such rights or warrants), made to all holders of Common Stock as of
the date of such redemption or repurchase, and (2) in the case of such rights or
warrants that shall have expired or been terminated without exercise by any
holders thereof, the Conversion Rate shall be readjusted as if such rights and
warrants had not been issued.
No adjustment of the Conversion Rate shall be made pursuant to this
Section 16.05(d) in respect of rights or warrants distributed or deemed
distributed on any Trigger Event to the extent that such rights or warrants are
actually distributed, or reserved by the Company for distribution to Holders of
Debentures upon conversion by such Holders of Debentures to Common Stock.
For purposes of this Section 16.05(d) and Section 16.05(a) and (b), any
dividend or distribution to which this Section 16.05(d) is applicable that also
includes shares of Common Stock, or rights or warrants to subscribe for or
purchase shares of Common Stock (or both), shall be deemed instead to be (1) a
dividend or distribution of the evidences of indebtedness, assets or shares of
capital stock other than such shares of Common Stock or rights or warrants (and
any Conversion Rate adjustment required by this Section 16.05(d) with respect to
such dividend or distribution shall then be made) immediately followed by (2) a
dividend or distribution of such shares of Common Stock or such rights or
warrants (and any further Conversion Rate adjustment required by Sections
16.05(a) and 16.05(b) 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 "the date fixed for the determination of stockholders entitled to
receive such dividend or other distribution", "the date fixed for the
determination of stockholders entitled to receive such rights or warrants" and
"the date fixed for such determination" within the meaning of Section 16.05(a)
and 16.05(b) 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 16.05(a).
(e) In case a tender or exchange offer made by the Company or any
Subsidiary for all or any portion of the Common Stock shall expire and such
tender or exchange offer (as amended upon the expiration thereof) shall require
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the payment to stockholders of consideration per share of Common Stock having a
Fair Market Value (as determined by the Board of Directors, whose determination
shall be conclusive and described in a resolution of the Board of Directors)
that as of the last time (the "EXPIRATION TIME") tenders or exchanges may be
made pursuant to such tender or exchange offer (as it may be amended) exceeds
the last reported Closing Sale Price of a share of Common Stock on the Trading
Day next succeeding the Expiration Time, the Conversion Rate shall be increased
so that the same shall equal the rate determined by multiplying the Conversion
Rate in effect immediately prior to the Expiration Time by a fraction,
(i) the numerator of which shall be the sum of (x) the Fair
Market Value (determined as aforesaid) of the aggregate consideration
payable to stockholders based on the acceptance (up to any maximum
specified in the terms of the tender or exchange offer) of all shares
validly tendered or exchanged and not withdrawn as of the Expiration
Time (the shares deemed so accepted up to any such maximum, being
referred to as the "PURCHASED SHARES") and (y) the product of the
number of shares of Common Stock outstanding (less any Purchased
Shares) at the Expiration Time and the Closing Sale Price of a share of
Common Stock on the Trading Day next succeeding the Expiration Time,
and
(ii) the denominator 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 Closing Sale Price of a share
of Common Stock on the Trading Day next succeeding the Expiration Time
such adjustment to become effective immediately prior to the opening of business
on the day following the Expiration Time. If the Company is obligated to
purchase shares pursuant to any such tender 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 Rate shall again be adjusted to
be the Conversion Rate that would then be in effect if such tender or exchange
offer had not been made.
(f) In case of a tender or exchange offer made by a Person other than
the Company or any Subsidiary for an amount that increases the offeror's
ownership of Common Stock to more than fifty percent (50%) of the Common Stock
outstanding and shall involve the payment by such Person of consideration per
share of Common Stock having a Fair Market Value (as determined by the Board of
Directors, whose determination shall be conclusive, and described in a
resolution of the Board of Directors) that as of the last time (the "OFFER
EXPIRATION TIME") tenders or exchanges may be made pursuant to such tender or
exchange offer (as it shall have been amended) exceeds the Closing Price of a
share of Common Stock on the Trading Day next succeeding the Offer Expiration
Time, and in which, as of the Offer Expiration Time the Board of Directors is
not recommending rejection of the offer, the Conversion Rate shall be increased
so that the same shall equal the rate determined by multiplying the Conversion
Rate in effect immediately prior to the Offer Expiration Time by a fraction
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(i) the numerator of which shall be the sum of (x) the Fair
Market Value (determined as aforesaid) of the aggregate consideration
payable to stockholders based on the acceptance (up to any maximum
specified in the terms of the tender or exchange offer) of all shares
validly tendered or exchanged and not withdrawn as of the Offer
Expiration Time (the shares deemed so accepted, up to any such maximum,
being referred to as the "ACCEPTED PURCHASED SHARES") and (y) the
product of the number of shares of Common Stock outstanding (less any
Accepted Purchased Shares) at the Offer Expiration Time and the Closing
Sale Price of a share of Common Stock on the Trading Day next
succeeding the Offer Expiration Time, and
(ii) the denominator of which shall be the number of shares of
Common Stock outstanding (including any tendered or exchanged shares)
at the Offer Expiration Time multiplied by the Closing Sale Price of a
share of Common Stock on the Trading Day next succeeding the Offer
Expiration Time,
such adjustment to become effective immediately prior to the opening of business
on the day following the Offer Expiration Time. If such Person is obligated to
purchase shares pursuant to any such tender or exchange offer, but such Person
is permanently prevented by applicable law from effecting any such purchases or
all such purchases are rescinded, the Conversion Rate shall again be adjusted to
be the Conversion Rate that would then be in effect if such tender or exchange
offer had not been made. Notwithstanding the foregoing, the adjustment described
in this Section 16.05(f) shall not be made if, as of the Offer Expiration Time,
the offering documents with respect to such offer disclose a plan or intention
to cause the Company to engage in any transaction described in Article 13.
(g) For purposes of this Section 16.05, the following terms shall have
the meaning indicated:
(i) "CURRENT MARKET PRICE" shall mean the average of the daily
Closing Sale Prices per share of Common Stock for the ten consecutive
Trading Days selected by the Company commencing no more than 30 Trading
Days before and ending not later than the earlier of such date of
determination and the day before the "EX" date with respect to the
issuance, distribution, subdivision or combination requiring such
computation immediately prior to the date in question. For purpose of
this paragraph, the term "EX" date, (1) when used 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 Sale Price was obtained without the right
to receive such issuance or distribution, and (2) when used with
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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.
If another issuance, distribution, subdivision or combination to which
Section 16.05 applies occurs during the period applicable for calculating
"CURRENT MARKET PRICE" pursuant to the definition in the preceding paragraph,
"CURRENT MARKET PRICE" shall be calculated for such period in a manner
determined by the Board of Directors to reflect the impact of such issuance,
distribution, subdivision or combination on the Closing Sale Price of the Common
Stock during such period.
(ii) "FAIR MARKET VALUE" shall mean the amount which a willing
buyer would pay a willing seller in an arm's-length transaction.
(iii) "RECORD DATE" shall mean, for purposes of this Section
16.05, 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).
(iv) "TRADING DAY" shall mean (x) if the applicable security
is quoted on the Nasdaq National Market, a day on which trades may be
made thereon or (y) if the applicable security is listed or admitted
for trading on the New York Stock Exchange or another national
securities exchange, a day on which the New York Stock Exchange or
another national securities exchange is open for business or (z) if the
applicable security is not so listed, admitted for trading or quoted,
any day other than a Saturday or Sunday or a day on which banking
institutions in the State of New York are authorized or obligated by
law or executive order to close.
(h) The Company may make such increases in the Conversion Rate, in
addition to those required by Section 16.05(a), (b), (c), (d), or (f) as the
Board of Directors considers to be advisable to avoid or diminish any income tax
to holders 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 increase the Conversion Rate by any amount for any period of time if
the period is at least twenty (20) days, the increase is irrevocable during the
period and the Board of Directors shall have made a determination that such
increase would be in the best interests of the Company, which determination
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shall be conclusive. Whenever the Conversion Rate is increased pursuant to the
preceding sentence, the Company shall mail to Holders of the Debentures a notice
of the increase at least fifteen (15) days prior to the date the increased
Conversion Rate takes effect, and such notice shall state the increased
Conversion Rate and the period during which it will be in effect.
(i) Whenever the Conversion Rate is adjusted as herein provided, the
Company shall promptly file with the Trustee and any conversion agent other than
the Trustee an Officers' Certificate setting forth the Conversion Rate after
such adjustment and setting forth a brief statement of the facts requiring such
adjustment. Unless and until a Responsible Officer of the Trustee shall have
received such Officers' Certificate, the Trustee shall not be deemed to have
knowledge of any adjustment of the Conversion Rate and may assume that the last
Conversion Rate of which it has knowledge is still in effect. Promptly after
delivery of such certificate, the Company shall prepare a notice of such
adjustment of the Conversion Rate setting forth the adjusted Conversion Rate and
the date on which each adjustment becomes effective and shall mail such notice
of such adjustment of the Conversion Rate to the Holder of each Debenture at his
last address appearing on the Debenture Register provided for in Section 2.05 of
this Indenture, within twenty (20) days after execution thereof. Failure to
deliver such notice shall not affect the legality or validity of any such
adjustment.
(j) In any case in which this Section 16.05 provides that an adjustment
shall become effective immediately after (1) a record date or Record Date for an
event, (2) the date fixed for the determination of stockholders entitled to
receive a dividend or distribution pursuant to Section 16.05(a), (3) a date
fixed for the determination of stockholders entitled to receive rights or
warrants pursuant to Section 16.05(b), (4) the Expiration Time for any tender or
exchange offer pursuant to Section 16.05(e), or (5) the Offer Expiration Time
for a tender or exchange offer pursuant to Section 16.05(f)(i) (each a
"DETERMINATION DATE"), the Company may elect to defer until the occurrence of
the applicable Adjustment Event (as hereinafter defined) (x) issuing to the
Holder of any Debenture converted after such Determination Date and before the
occurrence of such Adjustment Event, the additional shares of Common Stock or
other securities issuable upon such conversion by reason of the adjustment
required by such Adjustment Event over and above the Common Stock issuable upon
such conversion before giving effect to such adjustment and (y) paying to such
Holder any amount in cash in lieu of any fraction pursuant to Section 16.03. For
purposes of this Section 16.05(j), the term "ADJUSTMENT EVENT" shall mean:
(i) in any case referred to in clause (1) hereof, the
occurrence of such event,
(ii) in any case referred to in clause (2) hereof, the date
any such dividend or distribution is paid or made,
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(iii) in any case referred to in clause (3) hereof, the date
of expiration of such rights or warrants, and
(iv) in any case referred to in clause (4) or clause (5)
hereof, the date a sale or exchange of Common Stock pursuant to such
tender or exchange offer is consummated and becomes irrevocable.
(k) For purposes of this Section 16.05, 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.
Section 16.06. Effect Of Reclassification, Consolidation, Merger or
Sale. If any of the following events occur, namely (i) any reclassification or
change of the outstanding shares of Common Stock (other than a subdivision or
combination to which Section 16.05(c) applies), (ii) any consolidation, merger
or combination of the Company with another Person as a result of which holders
of Common Stock shall be entitled to receive stock, other securities or other
property or assets (including cash) with respect to or in exchange for such
Common Stock, or (iii) any sale or conveyance of all or substantially all of the
properties and assets of the Company to any other Person as a result of which
holders of Common Stock shall be entitled to receive stock, other securities or
other property or assets (including cash) with respect to or in exchange for
such Common Stock, then the Company or the successor or purchasing Person, as
the case may be, shall execute with the Trustee a supplemental indenture (which
shall comply with the Trust Indenture Act as in force at the date of execution
of such supplemental indenture) providing that each Debenture shall be
convertible into the kind and amount of shares of stock, other securities or
other property or assets (including cash) receivable upon such reclassification,
change, consolidation, merger, combination, sale or conveyance by a holder of a
number of shares of Common Stock issuable upon conversion of such Debentures
(assuming, for such purposes, a sufficient number of authorized shares of Common
Stock are available to convert all such Debentures) immediately prior to such
reclassification, change, consolidation, merger, combination, sale or conveyance
assuming such holder of Common Stock did not exercise his rights of election, if
any, as to the kind or amount of stock, other securities or other property or
assets (including cash) receivable upon such reclassification, change,
consolidation, merger, combination, sale or conveyance (provided that, if the
kind or amount of stock, other securities or other property or assets (including
cash) receivable upon such reclassification, change, consolidation, merger,
combination, sale or conveyance is not the same for each share of Common Stock
in respect of which such rights of election shall not have been exercised
("non-electing share"), then for the purposes of this Section 16.06 the kind and
amount of stock, other securities or other property or assets (including cash)
receivable upon such reclassification, change, consolidation, merger,
combination, sale or conveyance for each non-electing share shall be deemed to
93
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 16.
The Company shall cause notice of the execution of such supplemental
indenture to be mailed to each Holder of Debentures, at its address appearing on
the Debenture Register provided for in Section 2.05 of this Indenture, within
twenty (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 shall similarly apply to
successive reclassifications, changes, consolidations, mergers, combinations,
sales and conveyances.
If this Section 16.06 applies to any event or occurrence, Section 16.05
shall not apply.
Section 16.07. Taxes On Shares Issued. The issue of stock certificates
on conversions of Debentures shall be made without charge to the converting
Debentureholder for any documentary, stamp or similar issue or transfer tax in
respect of the issue thereof. The Company shall not, however, be required to pay
any such tax which may be payable in respect of any transfer involved in the
issue and delivery of stock in any name other than that of the Holder of any
Debenture converted, and the Company shall not be required to issue or deliver
any such stock certificate unless and until the Person or Persons requesting the
issue thereof shall have paid to the Company the amount of such tax or shall
have established to the satisfaction of the Company that such tax has been paid.
Section 16.08. Reservation of Shares, Shares to Be Fully Paid;
Compliance With Governmental Requirements; Listing of Common Stock. The Company
shall provide, free from preemptive rights, out of its authorized but unissued
shares or shares held in treasury, sufficient shares of Common Stock to provide
for the conversion of the Debentures from time to time as such Debentures are
presented for conversion.
Before taking any action which would cause an adjustment increasing the
Conversion Rate to an amount that would cause the Conversion Price to be reduced
below the then par value, if any, of the shares of Common Stock issuable upon
conversion of the Debentures, the Company will take all corporate action which
may, in the opinion of its counsel, be necessary in order that the Company may
validly and legally issue shares of such Common Stock at such adjusted
Conversion Rate.
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The Company covenants that all shares of Common Stock which may be
issued upon conversion of Debentures will upon issue be fully paid and
non-assessable by the Company and free from all taxes, liens and charges with
respect to the issue thereof.
The Company covenants that, if any shares of Common Stock to be
provided for the purpose of conversion of Debentures hereunder require
registration with or approval of any governmental authority under any federal or
state law before such shares may be validly issued upon conversion, the Company
will in good faith and as expeditiously as possible, to the extent then
permitted by the rules and interpretations of the Commission (or any successor
thereto), endeavor to secure such registration or approval, as the case may be.
The Company further covenants that, if at any time the Common Stock
shall be listed on the Nasdaq National Market or any other national securities
exchange or automated quotation system, the Company will, if permitted by the
rules of such exchange or automated quotation system, list and keep listed, so
long as the Common Stock shall be so listed on such exchange or automated
quotation system, all Common Stock issuable upon conversion of the Debenture;
provided that if the rules of such exchange or automated quotation system permit
the Company to defer the listing of such Common Stock until the first conversion
of the Debentures into Common Stock in accordance with the provisions of this
Indenture, the Company covenants to list such Common Stock issuable upon
conversion of the Debentures in accordance with the requirements of such
exchange or automated quotation system at such time.
Section 16.09. Responsibility Of Trustee. The Trustee and any other
conversion agent shall not at any time be under any duty or responsibility to
any Holder of Debentures to determine the Conversion Rate or whether any facts
exist which may require any adjustment of the Conversion Rate, or with respect
to the nature or extent or calculation of any such adjustment when made, or with
respect to the method employed, or herein or in any supplemental indenture
provided to be employed, in making the same. The Trustee and any other
conversion agent shall not be accountable with respect to the validity or value
(or the kind or amount) of any shares of Common Stock, or of any securities or
property, which may at any time be issued or delivered upon the conversion of
any Debenture; and the Trustee and any other conversion agent make no
representations with respect thereto. Neither the Trustee nor any conversion
agent shall be responsible for any failure of the Company to issue, transfer or
deliver any shares of Common Stock or stock certificates or other securities or
property or cash upon the surrender of any Debenture for the purpose of
conversion or to comply with any of the duties, responsibilities or covenants of
the Company contained in this Article 16. Without limiting the generality of the
foregoing, neither the Trustee nor any conversion agent shall be under any
responsibility to determine the correctness of any provisions contained in any
supplemental indenture entered into pursuant to Section 16.06 relating either to
the kind or amount of shares of stock or securities or property (including cash)
receivable by Debentureholders upon the conversion of their Debentures after any
event referred to in such Section 16.06 or to any adjustment to be made with
respect thereto, but, subject to the provisions of Section 9.01, may accept as
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conclusive evidence of the correctness of any such provisions, and shall be
protected in relying upon, the Officers' Certificate (which the Company shall be
obligated to file with the Trustee prior to the execution of any such
supplemental indenture) with respect thereto.
Section 16.10. Notice To Holders Prior To Certain Actions. In case:
(a) the Company shall declare a dividend (or any other distribution) on
its Common Stock that would require an adjustment in the Conversion Rate
pursuant to Section 16.05; or
(b) the Company shall authorize the granting to the holders of all or
substantially all of its Common Stock of rights or warrants to subscribe for or
purchase any share of any class or any other rights or warrants; or
(c) of any reclassification or reorganization of the Common Stock of
the Company (other than a subdivision or combination of its outstanding Common
Stock, or a change in par value, or from par value to no par value, or from no
par value to par value), or of any consolidation or merger to which the Company
is a party and for which approval of any stockholders of the Company is
required, or of the sale or transfer of all or substantially all of the assets
of the Company; or
(d) of the voluntary or involuntary dissolution, liquidation or winding
up of the Company;
the Company shall cause to be filed with the Trustee and to be mailed to each
Holder of Debentures at his address appearing on the Debenture Register provided
for in Section 2.05 of this Indenture, as promptly as possible but in any event
at least ten (10) days prior to the applicable date hereinafter specified, a
notice stating (x) the date on which a record is to be taken for the purpose of
such dividend, distribution or rights 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 or rights are to be determined, or (y) the date
on which such reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding up is expected to become effective or occur,
and the date as of which it is expected that holders of Common Stock of record
shall be entitled to exchange their Common Stock for securities or other
property deliverable upon such reclassification, consolidation, merger, sale,
transfer, dissolution, liquidation or winding up. Failure to give such notice,
or any defect therein, shall not affect the legality or validity of such
dividend, distribution, reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding up.
Section 16.11. Stockholder Rights Plans. If the rights provided for in
any future rights plan adopted by the Company have separated from the shares of
Common Stock in accordance with the provisions of the applicable stockholder
rights agreement so that the Holders of the Debentures would not be entitled to
receive any rights in respect of Common Stock issuable upon conversion of the
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Debentures, the conversion rate will be adjusted as if the Company distributed
to all holders of Common Stock a portion of its assets (including cash and
shares of a Subsidiary) or debt or other securities issued by the Company or
certain rights to purchase the Company's securities (including securities but
excluding rights or warrants to purchase Common Stock issued to all holders of
Common Stock, Common Stock issued as a dividend or distribution on Common Stock
and cash distributions) as described in Section 16.05(d), subject to
readjustment in the event of the expiration, termination or redemption of the
rights. In lieu of any such adjustment, the Company may amend such applicable
stockholder rights agreement to provide that upon conversion of the Debentures
the Holders will receive, in addition to the Common Stock issuable upon such
conversion, the rights which would have attached to such Common Stock if the
rights had not become separated from the Common Stock under such applicable
stockholder rights agreement.
ARTICLE 17
MISCELLANEOUS PROVISIONS
Section 17.01. Provisions Binding On Company's Successors. All the
covenants, stipulations, promises and agreements by the Company contained in
this Indenture shall bind its successors and assigns whether so expressed or
not.
Section 17.02. Official Acts By Successor Corporation. Any act or
proceeding by any provision of this Indenture authorized or required to be done
or performed by any board, committee or officer of the Company shall and may be
done and performed with like force and effect by the like board, committee or
officer of any Person that shall at the time be the lawful sole successor of the
Company.
Section 17.03 . Addresses For Notices, Etc. Any notice or demand which
by any provision of this Indenture is required or permitted to be given or
served by the Trustee or by the Holders of Debentures on the Company shall be
deemed to have been sufficiently given or made, for all purposes, if given or
served by being deposited postage prepaid by registered or certified mail in a
post office letter box or sent by telecopier transmission addressed as follows:
to Impax Laboratories, Inc., 3735 Castor Avenue, Philadelphia, PA 19124,
Telecopier No: 215-289-2223, Attention: Chief Financial Officer. Any notice,
direction, request or demand hereunder to or upon the Trustee shall be deemed to
have been sufficiently given or made, for all purposes, if given or served by
being deposited, postage prepaid, by registered or certified mail in a post
office letter box or sent by telecopier transmission addressed as follows:
Wachovia Bank, National Association, 123 S. Broad Street, PA 1249, Philadelphia,
PA 19107, Telecopier No: 215-670-6337, Attention: Corporate Trust
Administration.
The Trustee, by notice to the Company, may designate additional or
different addresses for subsequent notices or communications.
97
Any notice or communication mailed to a Debentureholder shall be mailed
to him by first class mail, postage prepaid, at his address as it appears on the
Debenture Register and shall be sufficiently given to him if so mailed within
the time prescribed.
Failure to mail a notice or communication to a Debentureholder or any
defect in it shall not affect its sufficiency with respect to other
Debentureholders. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it.
Section 17.04. Governing Law. This Indenture and each Debenture shall
be deemed to be a contract made under the laws of the State of New York, and for
all purposes shall be construed in accordance with the laws of the State of New
York, without regard to conflicts of laws principles thereof.
Section 17.05. Evidence Of Compliance With Conditions Precedent,
Certificates To Trustee. Upon any application or demand by the Company to the
Trustee to take any action under any of the provisions of this Indenture, the
Company shall furnish to the Trustee an Officers' Certificate stating that all
conditions precedent, if any, provided for in this Indenture relating to the
proposed action have been complied with, and an Opinion of Counsel stating that,
in the opinion of such counsel, all such conditions precedent have been complied
with.
Each certificate or opinion provided for in this Indenture and
delivered to the Trustee with respect to compliance with a condition or covenant
provided for in this Indenture shall include: (1) a statement that the person
making such certificate or opinion has read such covenant or condition; (2) a
brief statement as to the nature and scope of the examination or investigation
upon which the statement or opinion contained in such certificate or opinion is
based; (3) a statement that, in the opinion of such person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and (4) a statement as to whether or not, in the opinion of such
person, such condition or covenant has been complied with.
Section 17.06. Legal Holidays. In any case in which the date of
maturity of interest on or principal of the Debentures or the redemption date of
any Debenture will not be a Business Day, then payment of such interest on or
principal of the Debentures need not be made on such date, but may be made on
the next succeeding Business Day with the same force and effect as if made on
the date of maturity or the redemption date, and no interest shall accrue for
the period from and after such date.
Section 17.07. Trust Indenture Act. This Indenture is hereby made
subject to, and shall be governed by, the provisions of the Trust Indenture Act
required to be part of and to govern indentures qualified under the Trust
Indenture Act; provided that unless otherwise required by law, notwithstanding
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the foregoing, this Indenture and the Debentures issued hereunder shall not be
subject to the provisions of subsections (a)(1), (a)(2), and (a)(3) of Section
314 of the Trust Indenture Act as now in effect or as hereafter amended or
modified; provided further that this Section 17.07 shall not require this
Indenture or the Trustee to be qualified under the Trust Indenture Act prior to
the time such qualification is in fact required under the terms of the Trust
Indenture Act, nor shall it constitute any admission or acknowledgment by any
party to the Indenture that any such qualification is required prior to the time
such qualification is in fact required under the terms of the Trust Indenture
Act. If any provision hereof limits, qualifies or conflicts with another
provision hereof which is required to be included in an indenture qualified
under the Trust Indenture Act, such required provision shall control.
Section 17.08. No Security Interest Created. Nothing in this Indenture
or in the Debentures, expressed or implied, shall be construed to constitute a
security interest under the Uniform Commercial Code or similar legislation, as
now or hereafter enacted and in effect, in any jurisdiction in which property of
the Company or its subsidiaries is located.
Section 17.09. Benefits Of Indenture. Nothing in this Indenture or in
the Debentures, express or implied, shall give to any Person, other than the
parties hereto, any paying agent, any authenticating agent, any Debenture
Registrar and their successors hereunder and the Holders of Debentures any
benefit or any legal or equitable right, remedy or claim under this Indenture.
Section 17.10. Table Of Contents, Headings, Etc. The table of contents
and the titles and headings of the Articles and Sections of this Indenture have
been inserted for convenience of reference only, are not to be considered a part
hereof, and shall in no way modify or restrict any of the terms or provisions
hereof.
Section 17.11. Authenticating Agent. The Trustee may appoint an
authenticating agent that shall be authorized to act on its behalf, and subject
to its direction, in the authentication and delivery of Debentures in connection
with the original issuance thereof and transfers and exchanges of Debentures
hereunder, including under Sections 2.04, 2.05, 2.06, 2.07, 3.03 and 3.05, as
fully to all intents and purposes as though the authenticating agent had been
expressly authorized by this Indenture and those Sections to authenticate and
deliver Debentures. For all purposes of this Indenture, the authentication and
delivery of Debentures by the authenticating agent shall be deemed to be
authentication and delivery of such Debentures "by the Trustee" and a
certificate of authentication executed on behalf of the Trustee by an
authenticating agent shall be deemed to satisfy any requirement hereunder or in
the Debentures for the Trustee's certificate of authentication. Such
authenticating agent shall at all times be a Person eligible to serve as trustee
hereunder pursuant to Section 9.09.
99
Any corporation into which any authenticating agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, consolidation or conversion to which any authenticating agent
shall be a party, or any corporation succeeding to the corporate trust business
of any authenticating agent, shall be the successor of the authenticating agent
hereunder, if such successor corporation is otherwise eligible under this
Section 17.11, without the execution or filing of any paper or any further act
on the part of the parties hereto or the authenticating agent or such successor
corporation.
Any authenticating agent may at any time resign by giving written
notice of resignation to the Trustee and to the Company. The Trustee may at any
time terminate the agency of any authenticating agent by giving written notice
of termination to such authenticating agent and to the Company. Upon receiving
such a notice of resignation or upon such a termination, or in case at any time
any authenticating agent shall cease to be eligible under this Section, the
Trustee shall either promptly appoint a successor authenticating agent or itself
assume the duties and obligations of the former authenticating agent under this
Indenture and, upon such appointment of a successor authenticating agent, if
made, shall give written notice of such appointment of a successor
authenticating agent to the Company and shall mail notice of such appointment of
a successor authenticating agent to all Holders of Debentures as the names and
addresses of such Holders appear on the Debenture Register.
The Company agrees to pay to the authenticating agent from time to time
such reasonable compensation for its services as shall be agreed upon in writing
between the Company and the authenticating agent.
The provisions of Sections 9.02, 9.03, 9.04 and 10.03 and this Section
17.11 shall be applicable to any authenticating agent.
Section 17.12. Execution In Counterparts. This Indenture may be
executed in any number of counterparts, each of which shall be an original, but
such counterparts shall together constitute but one and the same instrument.
Section 17.13. Severability. In case any provision in this Indenture or
in the Debentures shall be invalid, illegal or unenforceable, then (to the
extent permitted by law) the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
Wachovia Bank, National Association hereby accepts the trusts in this
Indenture declared and provided, upon the terms and conditions herein above set
forth.
100
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed.
IMPAX LABORATORIES, INC.
By: /s/ Barry R. Edwards
--------------------------------------
Name: Barry R. Edwards
Title: Chief Executive Officer
WACHOVIA BANK, NATIONAL ASSOCIATION,
as Trustee
By: /s/ C. Hromych
---------------------------------
Name: C. Hromych
Title: Vice President
EXHIBIT 4.2
EXHIBIT A
[Include only for Global Debentures:]
[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) (THE
"DEPOSITARY", WHICH TERM INCLUDES ANY SUCCESSOR DEPOSITARY FOR THE CERTIFICATES)
TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH
OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY (AND
ANY PAYMENT HEREIN IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY), ANY TRANSFER, PLEDGE, OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH
AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
[Include only for Debentures that are Restricted Securities]
[THE DEBENTURE EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT AS SET FORTH
IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS
THAT IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT); (2) AGREES THAT IT WILL NOT, PRIOR TO EXPIRATION OF THE HOLDING
PERIOD APPLICABLE TO SALES OF THIS DEBENTURE UNDER RULE 144(K) UNDER THE
SECURITIES ACT (OR ANY SUCCESSOR PROVISION), RESELL OR OTHERWISE TRANSFER THIS
DEBENTURE OR THE COMMON STOCK ISSUABLE UPON CONVERSION OF THIS DEBENTURE EXCEPT
(A) TO IMPAX LABORATORIES, INC. OR ANY SUBSIDIARY THEREOF, (B) TO A QUALIFIED
INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C)
PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE
SECURITIES ACT (IF AVAILABLE) OR (D) PURSUANT TO A REGISTRATION STATEMENT WHICH
HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT (AND WHICH CONTINUES TO BE
EFFECTIVE AT THE TIME OF SUCH TRANSFER); (3) PRIOR TO SUCH TRANSFER (OTHER THAN
A TRANSFER PURSUANT TO CLAUSE 2(D) ABOVE), IT WILL FURNISH TO WACHOVIA BANK,
NATIONAL ASSOCIATION, AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS APPLICABLE), SUCH
CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS THE TRUSTEE MAY
REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT; AND (4) AGREES THAT IT WILL DELIVER TO EACH
PERSON TO WHOM THIS DEBENTURE IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE
EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF THIS DEBENTURE PRIOR
TO THE EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THIS DEBENTURE
UNDER RULE 144(K) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION), THE
HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF RELATING
TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS CERTIFICATE TO WACHOVIA BANK,
NATIONAL ASSOCIATION, AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS APPLICABLE). THIS
LEGEND WILL BE REMOVED UPON THE EARLIER OF THE TRANSFER OF THE DEBENTURE
EVIDENCED HEREBY PURSUANT TO CLAUSE 2(D) ABOVE OR UPON ANY TRANSFER OF THIS
DEBENTURE UNDER RULE 144(K) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR
PROVISION). THE INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE
TO REGISTER ANY TRANSFER OF THIS DEBENTURE IN VIOLATION OF THE FOREGOING
RESTRICTION.]
A-2
IMPAX LABORATORIES, INC.
1.250% CONVERTIBLE SENIOR SUBORDINATED DEBENTURE DUE 2024
CUSIP: 45256B AA 9
No. 1 $95,000,000
Impax Laboratories, Inc., a corporation duly organized and validly
existing under the laws of the State of Delaware (herein called the "COMPANY",
which term includes any successor corporation under the Indenture referred to on
the reverse hereof), for value received hereby promises to pay to CEDE & CO. or
its registered assigns, the aggregate principal sum set forth on Schedule I
hereto on April 1, 2024 at the office or agency of the Company maintained for
that purpose in accordance with the terms of the Indenture, in such coin or
currency of the United States of America as at the time of payment shall be
legal tender for the payment of public and private debts, and to pay interest,
semiannually on April 1 and October 1 of each year, commencing October 1, 2004,
on said principal sum at said office or agency, in like coin or currency, at the
rate per annum of 1.250%, from the April 1 or October 1, as the case may be,
next preceding the date of this Debenture to which interest has been paid or
duly provided for, unless the date hereof is a date to which interest has been
paid or duly provided for, in which case from the date of this Debenture, or
unless no interest has been paid or duly provided for on the Debentures, in
which case from April 5, 2004 until payment of said principal sum has been made
or duly provided for. Notwithstanding the foregoing, if the date hereof is after
any March 15 or September 15, as the case may be, and before the following April
1 or October 1, this Debenture shall bear interest from such April 1 or October
1; provided that if the Company shall default in the payment of interest due on
such April 1 or October 1, then this Debenture shall bear interest from the next
preceding April 1 or October 1 to which interest has been paid or duly provided
for or, if no interest has been paid or duly provided for on such Debenture,
from April 5, 2004. Except as otherwise provided in the Indenture, the interest
payable on the Debenture pursuant to the Indenture on any April 1 or October 1
will be paid to the Person entitled thereto as it appears in the Debenture
Register at the close of business on the Record Date, which shall be the March
15 or September 15 (whether or not a Business Day) next preceding such April 1
or October 1, as provided in the Indenture; provided that any such interest not
punctually paid or duly provided for shall be payable as provided in the
Indenture. The Company shall pay interest (i) on any Debentures in certificated
form by check mailed to the address of the Person entitled thereto as it appears
in the Debenture Register or (ii) on any Global Debenture by wire transfer of
immediately available funds to the account of the Depositary or its nominee.
A-3
The Company promises to pay interest on overdue principal, premium, if
any, and (to the extent that payment of such interest is enforceable under
applicable law) interest at the rate of 1%, per annum.
Reference is made to the further provisions of this Debenture set forth
on the reverse hereof, including, without limitation, provisions giving the
Holder of this Debenture the right to convert this Debenture into Common Stock
of the Company on the terms and subject to the limitations referred to on the
reverse hereof and as more fully specified in the Indenture. Such further
provisions shall for all purposes have the same effect as though fully set forth
at this place.
This Debenture shall be deemed to be a contract made under the laws of
the State of New York, and for all purposes shall be construed in accordance
with and governed by the laws of the State of New York, without regard to
conflicts of laws principles thereof.
This Debenture shall not be valid or become obligatory for any purpose
until the certificate of authentication hereon shall have been manually signed
by the Trustee or a duly authorized authenticating agent under the Indenture.
A-4
IN WITNESS WHEREOF, the Company has caused this Debenture to be duly
executed.
IMPAX LABORATORIES, INC.
By:
----------------------------------
By:
----------------------------------
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Debentures described in the within-named Indenture.
WACHOVIA BANK, NATIONAL ASSOCIATION,
as Trustee
By:
--------------------------------------------
Authorized Signatory
, or
By:
--------------------------------------------
As Authenticating Agent
(if different from Trustee)
By:
-----------------------------------
Authorized Signatory
A-5
FORM OF REVERSE OF DEBENTURE
IMPAX LABORATORIES, INC.
1.250% CONVERTIBLE SENIOR SUBORDINATED DEBENTURE DUE 2024
This Debenture is one of a duly authorized issue of Debentures of the
Company, designated as its 1.250% Convertible Senior Subordinated Debentures Due
2024 (herein called the "DEBENTURES"), limited in aggregate principal amount to
$95,000,000, issued and to be issued under and pursuant to an Indenture dated as
of April 5, 2004 (herein called the "INDENTURE"), between the Company and
Wachovia Bank, National Association, as trustee (herein called the "TRUSTEE"),
to which Indenture and all indentures supplemental thereto reference is hereby
made for a description of the rights, limitations of rights, obligations, duties
and immunities thereunder of the Trustee, the Company and the Holders of the
Debentures.
In case an Event of Default shall have occurred and be continuing, the
principal of, premium, if any, and accrued interest, on all Debentures may be
declared by either the Trustee or the Holders of not less than 25% in aggregate
principal amount of the Debentures then outstanding, and upon said declaration
shall become, due and payable, in the manner, with the effect and subject to the
conditions provided in the Indenture.
The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the Holders of at least a majority in aggregate
principal amount of the Debentures at the time outstanding, to execute
supplemental indentures adding any provisions to or changing in any manner or
eliminating any of the provisions of the Indenture or of any supplemental
indenture or modifying in any manner the rights of the Holders of the
Debentures; provided that no such supplemental indenture shall (i) extend the
fixed maturity of any Debenture, or reduce the rate or extend the time of
payment of interest, or Liquidated Damages, if any, thereon, or reduce the
principal amount thereof or premium, if any, thereon, or reduce any amount
payable upon redemption or repurchase thereof, or impair the right of any
Debentureholder to institute suit for the payment thereof, or make the principal
thereof or interest or premium, if any, thereon payable in any coin or currency
other than that provided in the Debentures, or change the obligation of the
Company to redeem any Debenture on a redemption date in a manner adverse to the
Holders or change the obligation of the Company to redeem any Debenture upon the
happening of a Designated Event in a manner adverse to the Holder of the
Debentures, or change the obligation of the Company to repurchase any Debenture
on a Repurchase Date in a manner adverse to the Holder of the Debentures, or
impair the right to convert the Debentures into Common Stock subject to the
terms set forth in the Indenture, including Section 16.06 thereof, without the
consent of the Holder of each Debenture so affected, or modify any of the
provisions of Section 12.02 or Section 8.07 thereof, except to increase any such
A-6
percentage or to provide that certain other provisions of the Indenture cannot
be modified or waived without the consent of the Holder of each Debenture so
affected, or change any obligation of the Company to maintain an office or
agency in the places and for the purposes set forth in Section 6.01 thereof, or
reduce the quorum or voting requirements set forth in Article 11 or (ii) reduce
the aforesaid percentage of Debentures, the Holders of which are required to
consent to any such supplemental indenture, without the consent of the Holders
of all Debentures then outstanding. Subject to the provisions of the Indenture,
the Holders of a majority in aggregate principal amount of the Debentures at the
time outstanding may on behalf of the Holders of all of the Debentures waive any
past default or Event of Default under the Indenture and its consequences except
(A) a default in the payment of interest, or any premium on, or the principal
of, any of the Debentures, (B) a failure by the Company to convert any
Debentures into Common Stock of the Company, (C) a default in the payment of the
redemption price pursuant to Article 3 of the Indenture, (D) a default in the
payment of the repurchase price pursuant to Article 3 of the Indenture, or (E) a
default in respect of a covenant or provisions of the Indenture which under
Article 12 of the Indenture cannot be modified or amended without the consent of
the Holders of each or all Debentures then outstanding or affected thereby. Any
such consent or waiver by the Holder of this Debenture (unless revoked as
provided in the Indenture) shall be conclusive and binding upon such Holder and
upon all future Holders and owners of this Debenture and any Debentures which
may be issued in exchange or substitution hereof, irrespective of whether or not
any notation thereof is made upon this Debenture or such other Debentures.
The indebtedness evidenced by the Debentures is, to the extent and in
the manner provided in the Indenture, expressly subordinated and subject in
right of payment to the prior payment in full of all Senior Indebtedness of the
Company, whether outstanding at the date of the Indenture or thereafter
incurred, and this Debenture is issued subject to the provisions of the
Indenture with respect to such subordination. Each Holder of this Debenture, by
accepting the same, agrees to and shall be bound by such provisions and
authorizes the Trustee on its behalf to take such action as may be necessary or
appropriate to effectuate the subordination so provided and appoints the Trustee
his attorney-in-fact for such purpose.
No reference herein to the Indenture and no provision of this Debenture
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of and any premium and
interest, on this Debenture at the place, at the respective times, at the rate
and in the coin or currency herein prescribed.
Interest on the Debentures shall be computed on the basis of a 360-day
year of twelve 30-day months.
A-7
The Debentures are issuable in fully registered form, without coupons,
in denominations of $1,000 principal amount and any multiple of $1,000. At the
office or agency of the Company referred to on the face hereof, and in the
manner and subject to the limitations provided in the Indenture, without payment
of any service charge but with payment of a sum sufficient to cover any tax,
assessment or other governmental charge that may be imposed in connection with
any registration or exchange of Debentures, Debentures may be exchanged for a
like aggregate principal amount of Debentures of any other authorized
denominations.
At any time prior to April 5, 2007, the Debentures may be redeemed at
the option of the Company (a "PROVISIONAL REDEMPTION"), in whole or in part,
upon notice as set forth in Section 3.02 of the Indenture at a redemption price
equal to the principal amount of the Securities to be redeemed plus accrued and
unpaid interest, if any, to the redemption date set forth in such notice if: (1)
the Closing Sale Price has exceeded 130% of the Conversion Price for at least 20
Trading Days in the 30 consecutive Trading Day period ending on the Trading Day
prior to the mailing of the notice of redemption pursuant to Section 3.02 of the
Indenture (the "NOTICE DATE") (it being understood that the Conversion Price in
effect at the close of business on each of the 30 consecutive Trading Days
should be used) and (2) the Shelf Registration Statement covering resales of the
Securities and the Common Stock is effective and available for use and is
expected to remain effective and available for use for the 30 days following the
redemption date, unless registration is no longer required. Upon any such
redemption, the Company shall make an additional payment (the "MAKE-WHOLE
PAYMENT") with respect to the Debentures called for redemption to Holders on the
Notice Date in an amount equal to $230.77 per $1,000 in principal amount of the
Debentures, less the amount of any interest actually paid or accrued and unpaid
on such Debentures prior to the redemption date. The Company shall make the
Make-Whole Payment on all Debentures called for redemption, including any
Debentures converted into Common Stock pursuant to the terms of the Indenture
after the Notice Date and prior to the redemption date. The Make-Whole Payment
on Debentures converted into Common Stock pursuant to the terms of the Indenture
after the Notice Date and prior to the redemption date shall not be reduced by
accrued and unpaid interest unless the redemption date occurs on or after the
Business Day following the Record Date and prior to the next succeeding interest
payment date, in which case the Make-Whole Payment shall be reduced by the
interest due on such interest payment date. The Company may make the Make-Whole
Payment (x) in cash or (y) subject to fulfillment by the Company of the
conditions (A) through (D) set forth in the following paragraph, in shares of
Common Stock, or a combination of cash and Common Stock, and the Company shall
specify the type of consideration for the Make-Whole Payment in such notice of
redemption. For purposes of this paragraph, the fair market value of shares of
Common Stock shall be determined by the Company and shall be equal to 95% of the
average of the Closing Sales Prices for the five consecutive Trading Days ending
on the third Trading Day prior to the redemption date.
A-8
The following shall constitute the conditions to any election by the
Company to pay the Make-Whole Payment (or any portion thereof) in shares of
Common Stock:
(A) the shares of Common Stock to be issued in payment of the
Make-Whole Payment (or any portion thereof) hereunder shall not require
registration under any Federal securities law before such shares may be freely
transferable without being subject to any transfer restrictions under the
Securities Act upon repurchase, or if registration is required, such
registration shall be completed and shall become effective prior to or on the
redemption date (and the Company shall state in the notice of Provisional
Redemption that the Company expects that such registration statement shall
remain effective for at least 30 days following the redemption date);
(B) the shares of Common Stock to be issued in payment of the
Make-Whole Payment (or any portion thereof) hereunder shall not require
registration with, or approval of, any governmental authority under any state
law or any other Federal law before such shares may be validly issued or
delivered upon repurchase, or if such registration is required or such approval
must be obtained, such registration shall be completed or such approval shall be
obtained prior to or on the redemption date;
(C) the shares of Common Stock to be issued in payment of the
Make-Whole Payment (or any portion thereof) hereunder are, or shall have been
approved for quotation on The Nasdaq National Market or listed on a national
securities exchange, in either case, prior to or on the redemption date;
(D) all shares of Common Stock that may be issued in payment of the
Make-Whole Payment (or any portion thereof) will be issued out of the Company's
authorized but unissued Common Stock and will, upon issue, be duly and validly
issued and fully paid and non-assessable and free of any preemptive or similar
rights; and
(E) if any of the conditions set forth in clauses (A) through (D) above
are not satisfied in accordance with the terms thereof, the Make-Whole Payment
shall be paid by the Company only in cash.
The Securities are also subject to redemption at the option of the
Company at any time on or after April 5, 2007, in whole or in part, upon not
less than 30 nor more than 60 days' notice to the Holders prior to the
redemption date at the Redemption Prices (expressed as percentages of the
principal amount) as set forth below for Securities redeemed during the
following periods described below:
PERIOD REDEMPTION PRICE
- ------------------------------------------------ --------------------------
Beginning on April 5, 2007 and ending on April 100.50%
4, 2008
Beginning on April 5, 2008 and ending on April
4, 2009 100.25%
A-9
and thereafter at a redemption price equal to 100% of the principal
amount, together, in each case, with accrued interest to, but excluding, the
redemption date; provided that if the redemption date is on a April 1 or October
1, then the interest payable on such date shall be paid to the Holder on the
preceding March 15 or September 15, respectively.
The Company may not give notice of any redemption of the Debentures if
a default in the payment of interest, or premium, if any, on the Debentures has
occurred and is continuing.
The Debentures are not subject to redemption through the operation of
any sinking fund.
If a Designated Event occurs at any time prior to maturity of the
Debentures, this Debenture will be redeemable on a Designated Event Repurchase
Date, 30 days after notice thereof, at the option of the Holder of this
Debenture at a redemption price equal to 100% of the principal amount thereof,
together with accrued interest to (but excluding) the Designated Event
Repurchase Date; provided that if such Designated Event Repurchase Date falls
after a Record Date and on or prior the corresponding interest payment date, the
interest payable on such interest payment date shall be paid to the Holder of
this Debenture on the preceding March 15 or September 15, respectively. The
Debentures will be redeemable in multiples of $1,000 principal amount. The
Company shall mail to all Holders of the Debentures a notice of the occurrence
of a Designated Event and of the redemption right arising as a result thereof on
or before the 10th day after the occurrence of such Designated Event. For a
Debenture to be so redeemed at the option of the Holder, the Company must
receive at the office or agency of the Company maintained for that purpose in
accordance with the terms of the Indenture, a written notice of purchase (a
"DESIGNATED EVENT REPURCHASE NOTICE") together with such Debenture, duly
endorsed for transfer, on or before the 30th day after the date of such notice
of a Designated Event (or if such 30th day is not a Business Day, the
immediately succeeding Business Day).
Subject to the terms and conditions of the Indenture, the Company shall
become obligated to purchase, at the option of the Holder, all or any portion of
the Debentures held by such Holder on April 1, 2009, April 1, 2014 and April 1,
2019 in whole multiples of $1,000 at a purchase price of 100% of the principal
amount, plus any accrued and unpaid interest, on such Debenture up to the
Repurchase Date. To exercise such right, a Holder shall deliver to the Company
such Debenture with the form entitled "REPURCHASE NOTICE" on the reverse thereof
duly completed, together with the Debenture, duly endorsed for transfer, at any
time from the opening of business on the date that is twenty-three Business Days
prior to such Repurchase Date until the close of business on the date that is
three Business Days prior to such Repurchase Date, and shall deliver the
Debentures to the Trustee (or other paying agent appointed by the Company) as
set forth in the Indenture.
A-10
Holders have the right to withdraw any Repurchase Notice by delivering
to the Trustee (or other paying agent appointed by the Company) a written notice
of withdrawal prior to the date that is three Business Days prior to the
Repurchase Date, all as provided in the Indenture.
If cash, sufficient to pay the purchase price of all Debentures or
portions thereof to be purchased as of the Repurchase Date is deposited with the
Trustee (or other paying agent appointed by the Company), on the Business Day
following the Repurchase Date, interest will cease to accrue on such Debentures
(or portions thereof) immediately after such Repurchase Date, and the Holder
thereof shall have no other rights as such other than the right to receive the
purchase price upon surrender of such Debenture.
Subject to the occurrence of certain events and in compliance with the
provisions of the Indenture, prior to the final maturity date of the Debentures,
the Holder hereof has the right, at its option, to convert each $1,000 principal
amount of the Debentures into 35.6125 shares of the Company's Common Stock (a
conversion price of approximately $28.08 per share), as such shares shall be
constituted at the date of conversion and subject to adjustment from time to
time as provided in the Indenture, upon surrender of this Debenture with the
form entitled "CONVERSION NOTICE" on the reverse thereof duly completed, to the
Company at the office or agency of the Company maintained for that purpose in
accordance with the terms of the Indenture, or at the option of such Holder, the
Corporate Trust Office, and, unless the shares issuable on conversion are to be
issued in the same name as this Debenture, duly endorsed by, or accompanied by
instruments of transfer in form satisfactory to the Company duly executed by,
the Holder or by his duly authorized attorney. The Company will notify the
Holder thereof of any event triggering the right to convert the Debentures as
specified above in accordance with the Indenture.
No adjustment in respect of interest on any Debenture converted or
dividends on any shares issued upon conversion of such Debenture will be made
upon any conversion except as set forth in the next sentence. If this Debenture
(or portion hereof) is surrendered for conversion during the period from the
close of business on any Record Date for the payment of interest to the close of
business on the Business Day preceding the following interest payment date and
has not been called for redemption by the Company on a redemption date that
occurs during such period, this Debenture (or portion hereof being converted)
must be accompanied by payment, in immediately available funds or other funds
acceptable to the Company, of an amount equal to the interest otherwise payable
on such interest payment date on the principal amount being converted; provided
that no such payment shall be required (1) if the Company has specified a
redemption date that is after a Record Date and prior to the next interest
payment date, (2) if the Company has specified a redemption date following a
Designated Event that is during such period or (3) to the extent of any overdue
interest, if any overdue interest exists at the time of conversion with respect
to such debenture.
A-11
No fractional shares will be issued upon any conversion, but an
adjustment and payment in cash will be made, as provided in the Indenture, in
respect of any fraction of a share which would otherwise be issuable upon the
surrender of any Debenture or Debentures for conversion.
A Debenture in respect of which a Holder is exercising its right to
require redemption upon a Designated Event or repurchase on a Repurchase Date
may be converted only if such Holder withdraws its election to exercise either
such right in accordance with the terms of the Indenture.
Any Debentures called for redemption, unless surrendered for conversion
by the Holders thereof on or before the close of business on the Business Day
preceding the redemption date, may be deemed to be redeemed from the Holders of
such Debentures for an amount equal to the applicable redemption price, together
with accrued but unpaid interest to, but excluding, the date fixed for
redemption, by one or more investment banks or other purchasers who may agree
with the Company (i) to purchase such Debentures from the Holders thereof and
convert them into shares of the Company's Common Stock and (ii) to make payment
for such Debentures as aforesaid to the Trustee in trust for the Holders.
Upon due presentment for registration of transfer of this Debenture at
the office or agency of the Company maintained for that purpose in accordance
with the terms of the Indenture, a new Debenture or Debentures of authorized
denominations for an equal aggregate principal amount will be issued to the
transferee in exchange thereof, subject to the limitations provided in the
Indenture, without charge except for any tax, assessment or other governmental
charge imposed in connection therewith.
The Company, the Trustee, any authenticating agent, any paying agent,
any conversion agent and any Debenture Registrar may deem and treat the Holder
hereof as the absolute owner of this Debenture (whether or not this Debenture
shall be overdue and notwithstanding any notation of ownership or other writing
hereon made by anyone other than the Company or any Debenture Registrar) for the
purpose of receiving payment hereof, or on account hereof, for the conversion
hereof and for all other purposes, and neither the Company nor the Trustee nor
any other authenticating agent nor any paying agent nor other conversion agent
nor any Debenture Registrar shall be affected by any notice to the contrary. All
payments made to or upon the order of such Holder shall, to the extent of the
sum or sums paid, satisfy and discharge liability for monies payable on this
Debenture.
No recourse for the payment of the principal of or any premium or
interest on this Debenture, or for any claim based hereon or otherwise in
respect hereof, and no recourse under or upon any obligation, covenant or
agreement of the Company in the Indenture or any supplemental indenture or in
any Debenture, or because of the creation of any indebtedness represented
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thereby, shall be had against any incorporator, stockholder, employee, agent,
officer or director or subsidiary, as such, past, present or future, of the
Company or of any successor corporation, either directly or through the Company
or any successor corporation, whether by virtue of any constitution, statute or
rule of law or by the enforcement of any assessment or penalty or otherwise, all
such liability being, by acceptance hereof and as part of the consideration for
the issue hereof, expressly waived and released.
This Debenture shall be deemed to be a contract made under the laws of
New York, and for all purposes shall be construed in accordance with the laws of
New York, without regard to conflicts of laws principles thereof.
Terms used in this Debenture and defined in the Indenture are used
herein as therein defined.
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EXHIBIT 4.2
ABBREVIATIONS
The following abbreviations, when used in the inscription of the face
of this Debenture, shall be construed as though they were written out in full
according to applicable laws or regulations.
TEN COM - as tenants in common UNIF GIFT MIN ACT -___ Custodian ___
TEN ENT - as tenant by the entireties (Cust) (Minor)
JT TEN - as joint tenants with right of under Uniform Gifts to Minors Act
survivorship and not as tenants in common ____________________________
(State)
Additional abbreviations may also be used though not in the above list.
CONVERSION NOTICE
TO: IMPAX LABORATORIES, INC.
WACHOVIA BANK, NATIONAL ASSOCIATION
The undersigned registered owner of this Debenture hereby irrevocably
exercises the option to convert this Debenture, or the portion thereof (which is
$1,000 or a multiple thereof) below designated, into shares of Common Stock of
Impax Laboratories, Inc. in accordance with the terms of the Indenture referred
to in this Debenture, and directs that the shares issuable and deliverable upon
such conversion, together with any check in payment for fractional shares and
any Debentures representing any unconverted principal amount hereof, be issued
and delivered to the Holder hereof unless a different name has been indicated
below. Capitalized terms used herein but not defined shall have the meanings
ascribed to such terms in the Indenture. If shares or any portion of this
Debenture not converted are to be issued in the name of a person other than the
undersigned, the undersigned will provide the appropriate information below,
together with evidence satisfactory to Impax Laboratories, Inc. and the Trustee
of transfer, and pay all transfer taxes payable with respect thereto. Any amount
required to be paid by the undersigned on account of interest accompanies this
Debenture.
Dated: ______________________
__________________________
__________________________
Signature(s)
Signature(s) must be
guaranteed by an "ELIGIBLE
GUARANTOR INSTITUTION"
meeting the requirements of
the Debenture Registrar,
which requirements include
membership or participation
in the Security Transfer
Agent Medallion Program
("STAMP") or such other
"SIGNATURE GUARANTEE
PROGRAM" as may be
determined by the Debenture
Registrar in addition to,
or in substitution for,
STAMP, all in accordance
with the Securities
Exchange Act of 1934, as
amended.
__________________________
Signature Guarantee
Fill in the registration of shares of Common Stock if to be issued, and
Debentures if to be delivered, other than to and in the name of the registered
holder:
__________________________
(Name)
______________________________
(Street Address)
______________________________
(City, State and Zip Code)
______________________________
Please print name and address
Principal amount to be converted (if less than all):
$_____________________________
Social Security or Other Taxpayer
Identification Number:
______________________________
DESIGNATED EVENT
REPURCHASE NOTICE
TO: IMPAX LABORATORIES, INC.
WACHOVIA BANK, NATIONAL ASSOCIATION
The undersigned registered owner of this Debenture hereby irrevocably
acknowledges receipt of a notice from Impax Laboratories, Inc. (the "COMPANY")
as to the occurrence of a Designated Event with respect to the Company and
requests and instructs the Company to redeem the entire principal amount of this
Debenture, or the portion thereof (which is $1,000 or a multiple thereof) below
designated, in accordance with the terms of the Indenture referred to in this
Debenture at the price of 100% of such entire principal amount or portion
thereof, together with accrued interest to, but excluding, the Designated Event
Repurchase Date, to the Holder hereof. Capitalized terms used herein but not
defined shall have the meanings ascribed to such terms in the Indenture.
Dated: ______________________
__________________________
__________________________
Signature(s)
NOTICE: The above
signatures of the holder(s)
hereof must correspond with
the name as written upon
the face of the Debenture
in every particular without
alteration or enlargement
or any change whatever.
Principal amount to be
repaid (if less than all):
__________________________
__________________________
Social Security or Other
Taxpayer Identification
Number
REPURCHASE NOTICE
TO: IMPAX LABORATORIES, INC.
WACHOVIA BANK, NATIONAL ASSOCIATION
The undersigned registered owner of this Debenture hereby irrevocably
acknowledges receipt of a notice from Impax Laboratories, Inc. (the "COMPANY")
regarding the right of Holders to elect to require the Company to repurchase the
Debentures and requests and instructs the Company to repay the entire principal
amount of this Debenture, or the portion thereof (which is $1,000 or an integral
multiple thereof) below designated, in accordance with the terms of the
Indenture at the price of 100% of such entire principal amount or portion
thereof, together with accrued interest to, by excluding, the Repurchase Date,
to the Holder hereof. Capitalized terms used herein but not defined shall have
the meanings ascribed to such terms in the Indenture. The Debentures shall be
repurchased by the Company as of the Repurchase Date pursuant to the terms and
conditions specified in the Indenture. If the Company elects to pay the purchase
price, in whole or in part, in shares of Common Stock but such portion of the
purchase price shall ultimately be paid to such Holder entirely in cash because
any of the conditions to payment of the purchase price in shares of Common Stock
is not satisfied prior to the close of business on the applicable Repurchase
Date, the undersigned registered owner elects:
[ ] to withdraw this Repurchase Notice as to $ principal amount
of the Debentures to which this Repurchase Notice relates
(Certificate Numbers: ), or
[ ] to receive cash in respect of $ principal amount of the
Debentures to which this Repurchase Notice relates.
Dated:
Signature(s):
NOTICE: The above signatures of the holder(s) hereof must correspond
with the name as written upon the face of the Debenture in every particular
without alteration or enlargement or any change whatever.
Debenture Certificate Number (if applicable):
Principal amount to be repurchased (if less than all):
Social Security or Other Taxpayer Identification Number:
ASSIGNMENT
For value received ______________________________hereby sell(s)
assign(s) and transfer(s) unto ___________________________________ (Please
insert social security or other Taxpayer Identification Number of assignee) the
within Debenture, and hereby irrevocably constitutes and appoints
______________________________________ attorney to transfer said Debenture on
the books of the Company, with full power of substitution in the premises.
In connection with any transfer of the Debenture prior to the
expiration of the holding period applicable to sales thereof under Rule 144(k)
under the Securities Act (or any successor provision) (other than any transfer
pursuant to a registration statement that has been declared effective under the
Securities Act), the undersigned confirms that such Debenture is being
transferred:
[ ] To Impax Laboratories, Inc. or a subsidiary thereof; or
[ ] To a "QUALIFIED INSTITUTIONAL BUYER" in compliance with Rule
144A under the Securities Act of 1933, as amended; or
[ ] Pursuant to and in compliance with Rule 144 under the
Securities Act of 1933, as amended; or
[ ] Pursuant to a Registration Statement which has been declared
effective under the Securities Act of 1933, as amended, and
which continues to be effective at the time of transfer;
and unless the Debenture has been transferred to Impax Laboratories, Inc. or a
subsidiary thereof, the undersigned confirms that such Debenture is not being
transferred to an "AFFILIATE" of the Company as defined in Rule 144 under the
Securities Act of 1933, as amended.
Unless one of the boxes is checked, the Trustee will refuse to register
any of the Debentures evidenced by this certificate in the name of any person
other than the registered holder thereof.
Dated: ______________________
__________________________
__________________________
Signature(s)
Signature(s) must be
guaranteed by an "ELIGIBLE
GUARANTOR INSTITUTION"
meeting the requirements of
the Debenture Registrar,
which requirements include
membership or participation
in the Security Transfer
Agent Medallion Program
("STAMP") or such other
"SIGNATURE GUARANTEE
PROGRAM" as may be
determined by the Debenture
Registrar in addition to,
or in substitution for,
STAMP, al in accordance
with the Securities
Exchange Act of 1934, as
amended.
__________________________
Signature Guarantee
NOTICE: The signature on the Conversion Notice, the Option to Elect Redemption
Upon a Designated Event, the Repurchase Notice or the Assignment must correspond
with the name as written upon the face of the Debenture in every particular
without alteration or enlargement or any change whatever.
Schedule I
IMPAX LABORATORIES, INC.
1.250% Convertible Senior Subordinated Debenture Due 2024
No. _______
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Notation Explaining Principal Authorized Signature of
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