EXHIBIT 4.2
EXECUTION COPY
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IMPAX LABORATORIES, INC.
To
HSBC BANK USA, NATIONAL ASSOCIATION,
as Trustee
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INDENTURE
Dated as of
June 27, 2005
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3.5% CONVERTIBLE SENIOR SUBORDINATED DEBENTURES DUE 2012
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TABLE OF CONTENTS
PAGE
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ARTICLE 1 Definitions .......................................................................................1
Section 1.01. Definitions ................................................................................1
ARTICLE 2 Issue, Description, Execution, Registration And Exchange Of Debentures............................12
Section 2.01. Designation Amount And Issue Of Debentures ................................................12
Section 2.02. Form of Debentures ........................................................................12
Section 2.03. Date And Denomination Of Debentures; Payments Of Interest .................................13
Section 2.04. Execution of Debentures ...................................................................14
Section 2.05. Exchange and Registration of Transfer of Debentures; Restrictions on Transfer..............15
Section 2.06. Mutilated, Destroyed, Lost or Stolen Debentures ...........................................21
Section 2.07. Temporary Debentures ......................................................................22
Section 2.08. Cancellation of Debentures ................................................................22
Section 2.09. CUSIP Numbers .............................................................................23
Section 2.10. Rank.......................................................................................23
ARTICLE 3 Redemption And Repurchase Of Debentures ..........................................................23
Section 3.01. Redemption of Debentures ..................................................................23
Section 3.02. [Intentionally Omitted.] ..................................................................23
Section 3.03. [Intentionally Omitted.] ..................................................................23
Section 3.04. [Intentionally Omitted.] ..................................................................23
Section 3.05. Repurchase at Option of Holders Upon a Designated Event ...................................23
Section 3.06. Repurchase of Debentures by the Company at Option of the Holder ...........................28
Section 3.07. Company Repurchase Notice .................................................................29
Section 3.08. Effect of Designated Event Repurchase Notice or Repurchase Notice..........................30
Section 3.09. Deposit of Purchase Price .................................................................31
Section 3.10. Debentures Repurchased in Part ............................................................31
Section 3.11. Repayment to the Company ..................................................................31
ARTICLE 4 Subordination Of Debentures ......................................................................32
Section 4.01. Agreement of Subordination ................................................................32
Section 4.02. Payments to Debentureholders ..............................................................32
Section 4.03. Subrogation of Debentures .................................................................35
Section 4.04. Authorization to Effect Subordination .....................................................36
Section 4.05. Notice to Trustee .........................................................................36
Section 4.06. Trustee's Relation to Senior Indebtedness .................................................37
Section 4.07. No Impairment of Subordination ............................................................37
Section 4.08. Certain Conversions Not Deemed Payment ....................................................38
Section 4.09. Article Applicable to Paying Agents .......................................................38
Section 4.10. Senior Indebtedness Entitled to Rely ......................................................38
Section 4.11. Reliance on Judicial Order or Certificate of Liquidating Agent ............................38
ARTICLE 5 Make-Whole Premium ...............................................................................39
Section 5.01. Make-Whole Premium ........................................................................39
Section 5.02. Payment Of Make-Whole Premium .............................................................41
Section 5.03. Adjustments Relating To The Make-Whole Premium ............................................41
ARTICLE 6 Particular Covenants Of The Company ..............................................................42
Section 6.01. Payment of Principal, Premium and Interest ................................................42
Section 6.02. Maintenance of Office or Agency ...........................................................42
Section 6.03. Appointments to Fill Vacancies in Trustee's Office ........................................42
Section 6.04. Provisions as to Paying Agent .............................................................42
Section 6.05. Existence .................................................................................43
Section 6.06. Maintenance of Properties .................................................................44
Section 6.07. Payment of Taxes and Other Claims .........................................................44
Section 6.08. Rule 144A Information Requirement .........................................................44
Section 6.09. Extension and Usury Laws ..................................................................45
Section 6.10. Compliance Certificate ....................................................................45
Section 6.11. Liquidated Damages Notice .................................................................45
Section 6.12. Limitation on Indebtedness ................................................................45
Section 6.13. Prohibition on Certain Issuances and Offers ...............................................46
Section 6.14. Disclosure on Finalization of Make-Whole Premium Table ....................................46
ARTICLE 7 Debentureholders' Lists And Reports By The Company And The Trustee ...............................47
Section 7.01. Debentureholders' Lists ...................................................................47
Section 7.02. Preservation And Disclosure Of Lists ......................................................47
Section 7.03. Reports By Trustee ........................................................................47
Section 7.04. Reports by Company ........................................................................47
ARTICLE 8 Remedies Of The Trustee And Debentureholders On An Event Of Default ..............................48
Section 8.01. Events Of Default .........................................................................48
Section 8.02. Payments of Debentures on Default; Suit Therefor ..........................................50
Section 8.03. Application of Monies Collected By Trustee ................................................52
Section 8.04. Proceedings by Debentureholder ............................................................52
Section 8.05. Proceedings By Trustee ....................................................................53
Section 8.06. Remedies Cumulative And Continuing ........................................................53
Section 8.07. Direction of Proceedings and Waiver of Defaults By Majority of Debentureholders............54
Section 8.08. Notice of Defaults ........................................................................54
Section 8.09. Undertaking To Pay Costs ..................................................................54
ARTICLE 9 The Trustee ......................................................................................55
Section 9.01. Duties and Responsibilities of Trustee ....................................................55
Section 9.02. Reliance on Documents, Opinions, Etc ......................................................56
Section 9.03. No Responsibility For Recitals, Etc .......................................................57
Section 9.04. Trustee, Paying Agents, Conversion Agents or Registrar May Own Debentures..................57
Section 9.05. Monies to Be Held in Trust ................................................................58
Section 9.06. Compensation and Expenses of Trustee ......................................................58
Section 9.07. Officers' Certificate As Evidence .........................................................58
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Section 9.08. Conflicting Interests of Trustee ..........................................................59
Section 9.09. Eligibility of Trustee ....................................................................59
Section 9.10. Resignation or Removal of Trustee .........................................................59
Section 9.11. Acceptance by Successor Trustee ...........................................................60
Section 9.12. Succession By Merger ......................................................................61
Section 9.13. Preferential Collection of Claims .........................................................61
ARTICLE 10 The Debentureholders ............................................................................61
Section 10.01. Action By Debentureholders ................................................................61
Section 10.02. Proof of Execution by Debentureholders ....................................................62
Section 10.03. Who Are Deemed Absolute Owners ............................................................62
Section 10.04. Company-owned Debentures Disregarded ......................................................62
Section 10.05. Revocation Of Consents, Future Holders Bound ..............................................63
ARTICLE 11 Meetings Of Debentureholders ....................................................................63
Section 11.01. Purpose Of Meetings .......................................................................63
Section 11.02. Call Of Meetings By Trustee ...............................................................63
Section 11.03. Call Of Meetings By Company Or Debentureholders ...........................................64
Section 11.04. Qualifications For Voting .................................................................64
Section 11.05. Regulations ...............................................................................64
Section 11.06. Voting.....................................................................................65
Section 11.07. No Delay Of Rights By Meeting .............................................................65
ARTICLE 12 Supplemental Indentures .........................................................................65
Section 12.01. Supplemental Indentures Without Consent of Debentureholders ...............................65
Section 12.02. Supplemental Indenture With Consent Of Debentureholders ...................................67
Section 12.03. Effect Of Supplemental Indenture ..........................................................68
Section 12.04. Notation On Debentures ....................................................................68
Section 12.05. Evidence Of Compliance Of Supplemental Indenture To Be Furnished To Trustee................68
ARTICLE 13 Consolidation, Merger, Sale, Conveyance And Lease ...............................................69
Section 13.01. Company May Consolidate On Certain Terms ..................................................69
Section 13.02. Successor To Be Substituted ...............................................................69
Section 13.03. Opinion Of Counsel To Be Given Trustee ....................................................70
ARTICLE 14 Satisfaction And Discharge Of Indenture .........................................................70
Section 14.01. Discharge Of Indenture ....................................................................70
Section 14.02. Deposited Monies To Be Held In Trust By Trustee ...........................................71
Section 14.03. Paying Agent To Repay Monies Held .........................................................71
Section 14.04. Return Of Unclaimed Monies ................................................................71
Section 14.05. Reinstatement .............................................................................71
ARTICLE 15 Immunity Of Incorporators, Stockholders, Officers And Directors .................................71
Section 15.01. Indenture And Debentures Solely Corporate Obligations .....................................71
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ARTICLE 16 Conversion Of Debentures ........................................................................72
Section 16.01. Right To Convert ..........................................................................72
Section 16.02. Exercise Of Conversion Privilege; Issuance Of Common Stock On Conversion; No
Adjustment For Interest Or Dividends ......................................................74
Section 16.03. Payment Upon Conversion ...................................................................77
Section 16.04. Cash Payments in Lieu of Fractional Shares ................................................79
Section 16.05. Adjustment Of Conversion Rate .............................................................79
Section 16.06. Effect Of Reclassification, Consolidation, Merger or Sale .................................87
Section 16.07. Taxes On Shares Issued ....................................................................89
Section 16.08. Reservation of Shares, Shares to Be Fully Paid; Compliance With Governmental
Requirements; Listing of Common Stock .....................................................89
Section 16.09. Responsibility Of Trustee .................................................................90
Section 16.10. Notice To Holders Prior To Certain Actions ................................................90
Section 16.11. Stockholder Rights Plans ..................................................................91
ARTICLE 17 Miscellaneous Provisions ........................................................................92
Section 17.01. Provisions Binding On Company's Successors ................................................92
Section 17.02. Official Acts By Successor Corporation ....................................................92
Section 17.03. Addresses For Notices, Etc ................................................................92
Section 17.04. Governing Law .............................................................................92
Section 17.05. Evidence Of Compliance With Conditions Precedent, Certificates To Trustee..................92
Section 17.06. Legal Holidays ............................................................................93
Section 17.07. Trust Indenture Act .......................................................................93
Section 17.08. No Security Interest Created ..............................................................93
Section 17.09. Benefits Of Indenture .....................................................................93
Section 17.10. Table Of Contents, Headings, Etc ..........................................................94
Section 17.11. Authenticating Agent ......................................................................94
Section 17.12. Execution In Counterparts .................................................................95
Section 17.13. Severability ..............................................................................95
Exhibit A Form of Debenture .......................................................................A-1
Exhibit B Examples of Make-Whole Premium Tables.....................................................B-1
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INDENTURE
INDENTURE dated as of June 27, 2005 between Impax Laboratories,
Inc., a Delaware corporation (hereinafter called the "COMPANY"), having its
principal office at 3735 Castor Avenue, Philadelphia, Pennsylvania 19124 and
HSBC Bank USA, National Association, a national banking association, as trustee
hereunder (hereinafter called the "TRUSTEE").
WITNESSETH:
WHEREAS, for its lawful corporate purposes, the Company has duly
authorized the issue of its 3.5% Convertible Senior Subordinated Debentures Due
2012 (hereinafter called the "DEBENTURES"), in an aggregate principal amount not
to exceed $75,000,000 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.
"1.250% DEBENTURES" means the convertible senior subordinated
debentures issued pursuant to the 2004 Indenture.
"2004 INDENTURE" means the Indenture dated as of April 5, 2004
between the Company and Wachovia Bank, National Association, as Trustee, under
which the Company's 1.250% Convertible Senior Subordinated Debentures due 2024
are issued and outstanding.
"90% CONDITION" has the meaning specified in Section 3.05(a).
"ADJUSTMENT EVENT" has the meaning specified in Section
16.05(i).
"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.
"APPLICABLE FEDERAL FUNDS RATE" shall mean, for any day, the
rate per annum (rounded up to the nearest 1/16th of 1%) equal to weighted
average of the rates on overnight federal funds transactions with members of the
Federal Reserve System arranged by federal funds brokers, as published on the
next succeeding Business Day by the Federal Reserve Bank of New York.
"AVERAGE CLOSING PRICE" means the arithmetic average of the
Closing Sale Prices of the Common Stock for the ten (10) consecutive Trading
Days commencing on and including June 20, 2005.
"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.
"CALCULATION AGENT" has the meaning specified in Section
5.01(d).
"CASH AMOUNT" has the meaning specified in Section 16.03(a).
"CASH SETTLEMENT NOTICE PERIOD" has the meaning specified in
Section 16.03(a).
"CLOSING SALE PRICE" of any security 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
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securities exchange on which such securities are traded or, if such securities
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. 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 LIMITATION" has the meaning specified in Section
16.02(b).
"CONVERSION OBLIGATION" has the meaning specified in Section
16.01.
"CONVERSION PRICE" means, as of any Conversion Date or other
date of determination, the dollar amount equal to 130% of the Average Closing
Price, subject to adjustment as provided herein.
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"CONVERSION RATE" for each $1,000 principal amount of
Debentures, shall equal the quotient of $1,000 divided by the applicable
Conversion Price.
"CONVERSION REFERENCE PERIOD" has the meaning specified in
Section 16.03(a).
"CONVERSION RETRACTION PERIOD" has the meaning specified in
Section 16.03(a).
"CONVERSION SETTLEMENT DATE" means, with respect to the
Conversion Settlement Distribution, the third Business Day immediately following
the date the Conversion Settlement Distribution is determined.
"CONVERSION SETTLEMENT DISTRIBUTION" has the meaning specified
in Section 16.03(a).
"CONVERSION SHARES CAP" has the meaning specified in Section
16.02(c).
"CONVERSION TRIGGER PRICE" has the meaning specified in Section
16.01(a).
"CONVERSION VALUE" has the meaning specified in Section
16.03(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 452 Fifth
Avenue, New York, New York 10018.
"COST THRESHOLD" means, as of any date of determination, the
number of basis points set forth in the table below for the Applicable Federal
Funds Rate on such date.
APPLICABLE FEDERAL
FUNDS RATE COST THRESHOLD
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> = 3% 300
> = 4% 375
> = 5% 400
> = 6% 425
> = 7% 525
> = 8% 600
> = 9% 700
> = 10% 750
"CURRENT MARKET PRICE" has the meaning specified in Section
16.05(f).
"CUSTODIAN" means HSBC Bank USA, National Association, as
custodian with respect to the Debentures in global form, or any successor entity
thereto.
"DAILY SHARE AMOUNT" has the meaning specified in Section
16.03(a).
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"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.
"DECLARATION DATE" has the meaning specified in Section
16.05(i).
"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 Common Stock (or other
securities into which the Debentures are at such time convertible) on the Nasdaq
National Market, The Nasdaq Small Cap Market, any United States national
securities exchange or the OTC Bulletin Board, following which the Common Stock
(or other securities into which the Debentures are at such time convertible) is
no longer approved for trading on the Nasdaq National Market, The Nasdaq Small
Cap Market, any United States national securities exchange or the OTC Bulletin
Board; provided, however, that until such time as the Company files its Annual
Report on Form 10-K for the fiscal year ended December 31, 2004,a termination of
trading as a result of the matters set forth in Item 3.01 of each of the
Company's Current Report on Forms 8-K dated March 25, 2005 and filed on March
31, 2005, dated April 5, 2005 and filed April 7, 2005 and dated May 17, 2005 and
filed May 23, 2005 shall not be considered a Designated Event hereunder.
"DESIGNATED EVENT CONVERSION/REPURCHASE PERIOD" means the period
beginning upon receipt of the Designated Event Notice and ending thirty (30)
Trading Days after the Effective Date.
"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 DATE" means the Effective Date for
a Designated Event. With respect to any repurchase for which a Designated Event
Repurchase
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Notice has been delivered after the Effective Date and during the Designated
Event Conversion/Repurchase Period, the Designated Event Repurchase Date shall
mean the date that is three (3) Business Days following the earlier of (i) the
end of the Designated Event Conversion/Repurchase Period and (ii) the date of
delivery of the Designated Event Repurchase Notice. With respect to any
conversion for which a conversion notice is delivered after the Effective Date
and during the Designated Event Conversion/Repurchase Period in accordance with
Section 16.02, the Designated Event Repurchase Date shall mean the date that is
three (3) Business Days following the applicable Conversion Date.
"DESIGNATED EVENT REPURCHASE NOTICE" has the meaning specified
in Section 3.05(c).
"DESIGNATED EVENT REPURCHASE PRICE" has the meaning specified in
Section 3.05(a).
"DESIGNATED SENIOR INDEBTEDNESS" means all obligations under the
Senior Credit Facility which, at the date of determination, is allowed pursuant
to Section 6.12 of this Indenture.
"DETERMINATION DATE" has the meaning specified in Section
16.05(j).
"EFFECTIVE DATE" means the date on which the applicable
Designated Event occurs.
"EVENT OF DEFAULT" means any event specified in Section 8.01 as
an Event of Default.
"EX-DIVIDEND TIME" has the meaning specified in Section
16.01(b).
"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.
"EXCHANGE PROPERTY" has the meaning set forth in Section
16.01(c).
"EXPIRATION TIME" has the meaning specified in Section 16.05(e).
"FAIR MARKET VALUE" has the meaning specified in Section
16.05(f).
"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).
"GAAP" means United States generally accepted accounting
principles, consistently applied. All accounting and financial terms, unless
specifically defined in this Indenture, will be interpreted in accordance with
GAAP.
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"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
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 PURCHASER" means Highbridge International LLC.
"INITIAL SUPPLEMENTAL INDENTURE MATTERS" has the meaning
specified in Section 5.01(c).
"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.
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"INTEREST EXPENSE" means, with respect to the Company for any
applicable period, gross interest expense of the Company for such period
determined in accordance with GAAP, plus any amount of interest capitalization
as an asset during the same period.
"LIQUIDATED DAMAGES" has the meaning specified for "LIQUIDATED
DAMAGES AMOUNT" in Section 2(e) of the Registration Rights Agreement.
"LIQUIDATED DAMAGES NOTICE" has the meaning specified in Section
6.11.
"LTM EBITDA" means, with respect to the Company as of any date,
the Net Income of the Company for the immediately preceding twelve month period
(the "LTM PERIOD") for which financials are publicly available, plus without
duplication, the sum of the following amounts to the extent deducted in
determining Net Income of the Company for such period: (1) Interest Expense, (2)
income tax expense, (3) depreciation expense and (4) amortization expense, and
minus, onetime or non-cash gains, including but not limited to (1) gains
generated from disposition of assets, (2) gains resulted from reversal of
charges, (3) gains resulted from change of estimates, (4) gains resulted from
change of actuarial assumptions, or (5) extraordinary gains. In connection with
acquisitions consummated subsequent to the commencement of the LTM Period, LTM
EBITDA shall be calculated for any such acquisition on a pro forma basis for the
LTM Period.
"MAKE-WHOLE PREMIUM" has the meaning specified in Section
5.01(c).
"MAKE-WHOLE PREMIUM TABLE" has the meaning specified in Section
5.01(c).
"NET INCOME" means, with respect to the Company for any
applicable period, the net income (loss) of the Company for such period,
determined on a consolidated basis and in accordance with GAAP.
"NON-ELECTING SHARE" has the meaning specified in Section
16.06(c).
"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, and who shall be
reasonably acceptable to the Trustee.
"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;
8
(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.
"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, including, without limitation, any Make-Whole Premium.
"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(f).
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights
Agreement, dated as of June 27, 2005, between the Company and the Initial
Purchaser, 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
9
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.
"REPURCHASE NOTICE" has the meaning specified in Section 3.06.
"RESIDUAL CASH VALUE" has the meaning specified in Section
16.03(a).
"RESIDUAL VALUE SHARES" has the meaning specified in Section
16.03(a).
"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
without limitation, Designated Senior Indebtedness, 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
10
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
which, at the date of determination, is allowed pursuant to Section 6.12 of this
Indenture, and has been specifically designated by the Company in the instrument
evidencing or governing such Senior Indebtedness as "Senior Indebtedness" for
purposes of this Indenture; 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 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.
"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).
"STOCK PRICE CAP" has the meaning set forth in Section 5.01(c).
"STOCK PRICE THRESHOLD" has the meaning set forth in Section
5.01(c).
"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(f).
"TRADING PRICE" means, on any date, the average of the secondary
market bid quotations per $1,000 principal amount of Debentures obtained by the
Company 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 Company, 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 Company, one bid shall be used.
"TRIGGER EVENT" has the meaning specified in Section 16.05(d).
"TRIGGERING EVENT" has the meaning specified in Section
16.05(d).
11
"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 HSBC Bank USA, 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 "3.5% CONVERTIBLE SENIOR SUBORDINATED
DEBENTURES DUE 2012". Debentures not to exceed the aggregate principal amount of
$75,000,000 (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. Other than as set forth in the preceding sentence, the Company shall
not issue any Debentures under this Indenture.
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
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.
12
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 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
June 1 or
13
December 1 preceding the applicable June 15 or December 15 interest payment
date, respectively.
Any interest on any Debenture which is payable, but is not
punctually paid or duly provided for, on any June 15 or December 15 (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.
(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
14
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. (a)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 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.
15
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 surrendered for conversion
pursuant to Article 16, (c) any Debentures or portions thereof tendered for
redemption (and not withdrawn) pursuant to Section 3.05 or (d) any Debentures or
portions thereof tendered for repurchase (and not withdrawn) pursuant to Section
3.06.
(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
16
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.
(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
17
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
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 HSBC BANK USA,
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
18
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 HSBC BANK USA, NATIONAL ASSOCIATION (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:
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
19
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).
(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
20
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 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 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
21
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.
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. All cancelled Debentures held by the Trustee shall be destroyed and
certification of their destruction delivered to the Company unless by a Company
order the Company shall direct that cancelled Debentures be returned to it. If
the Company shall acquire any of the Debentures, such acquisition shall not
22
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.
Section 2.10. Rank. The Debentures shall be senior,
subordinated, unsecured obligations of the Company and shall rank (a) pari passu
with all other existing or future senior, subordinated, unsecured obligations of
the Company allowed pursuant to Section 6.12 of this Indenture, (b) senior in
right of payment to the 1.250% Debentures and any future subordinated
obligations of the Company and (c) junior to the Designated Senior Indebtedness
and other Senior Indebtedness allowed pursuant to Section 6.12 of this
Indenture. The Debentures shall constitute "Senior Indebtedness", and the
Company hereby specifically designates the Debentures as "Designated Senior
Indebtedness", in each case, under the 2004 Indenture.
ARTICLE 3
REDEMPTION AND REPURCHASE OF DEBENTURES
Section 3.01. Redemption of Debentures. The Debentures may not
be redeemed at the option of the Company, at any time prior to maturity, in
whole or in part.
Section 3.02. [Intentionally Omitted.]
Section 3.03. [Intentionally Omitted.]
Section 3.04. [Intentionally Omitted.]
Section 3.05. Repurchase at Option of Holders Upon a Designated
Event. (a) (i) 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 Designated Event Repurchase Date 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 (the
"DESIGNATED EVENT REPURCHASE PRICE"); provided that if such Designated Event
Repurchase Date falls after a Record Date and on or prior to 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:
23
(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 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 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; or
(4) the approval by the holders of the Company's capital
stock of any plan or proposal for liquidation or dissolution.
(ii) Notwithstanding any provision hereof to the contrary, no
Designated Event shall be deemed to have occurred in respect of the foregoing if
at least 90% of the consideration (excluding cash payments for fractional
shares) (the "90% CONDITION") 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 the Company's board of directors on
the date of this Indenture or who becomes a member of the Company's board of
directors subsequent to that date and whose appointment, election or nomination
for election by the Company's stockholders is duly approved by a majority of the
continuing directors on the Company's board of directors at the time of such
approval, either by a specific vote or by approval of the proxy statement issued
by the Company 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.
24
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) Within ten days after which the Company knows of 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 a notice (the "DESIGNATED EVENT NOTICE") of such Designated Event and of
the redemption right at the option of the Holders arising as a result thereof.
If the Company shall give such notice, the Company shall also deliver a copy of
the Designated Event 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 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 Designated Event Repurchase Price, including the
amount of interest accrued and Liquidated Damages, if any, on each Debenture to
the Designated Event Repurchase Date;
(5) the anticipated 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;
25
(9) a description of the procedure which a Holder must
follow to exercise such redemption right and to withdraw any surrendered
Debentures;
(10) the CUSIP number or numbers of the Debentures (if then
generally in use);
(11) in the case of a Fundamental Change, that a Make-Whole
Premium is required to be paid by the Company upon any conversion in connection
with a Fundamental Change; and
(12) in the case of a Fundamental Change, whether such
Make-Whole Premium shall be paid by delivery of shares of Common Stock (other
than cash in lieu of fractional shares) or in the same form of consideration
into which shares of Common Stock have been converted in connection with such
Fundamental Change in accordance with Section 5.01(d) (and containing such
information required by Section 5.01(d)).
If any of the Debentures is in the form of a Global Debenture,
then the Company shall modify such notice to the extent necessary to accord with
the procedures of the Depositary.
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.
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
26
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 3.05, 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 3.05 shall be consummated by the delivery of the
consideration to be received by the Holder promptly following the later of the
Designated Event 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.
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.
Anything herein to the contrary notwithstanding, in the case of
Global Debentures, any Designated Event Repurchase Notice may be delivered or
withdrawn and such Debentures may be surrendered or delivered for purchase in
accordance with the applicable procedures of the Depositary as in effect from
time to time, but in no event later than the close of business on the Business
Day immediately preceding the Designated Event Repurchase Date.
(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
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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 thereof on
June 15, 2009 (the "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 such 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:
(1) the certificate numbers of the Debentures that such
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
such 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 such 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
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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.
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);
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(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.
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 (including any applicable premium) with
respect to such Debenture. Such purchase price (including any applicable
premium) 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:
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(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
(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 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, from and 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
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Event Repurchase Date or the Repurchase Date then, unless 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 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
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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
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
33
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. Without in any way limiting the provisions of this Article 4, all
cash, property and securities (other than Junior Securities) to be paid or
issued by the Company in connection with any conversion of any Debentures
(including, without limitation, the Cash Amount and any cash paid in lieu of
Residual Value Shares or in respect of any Make-Whole Premium) shall be subject
to the subordination and other provisions of this Article 4.
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 submitted for redemption in accordance with
Section 3.05, 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, 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 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
34
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 the holders of Senior Indebtedness 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 (unless the Trustee is directed otherwise by any court of competent
jurisdiction), 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
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
35
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.
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.
36
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.
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. Nothing in this Article shall subordinate
to the Senior Indebtedness the claims of, or payments to, the Trustee under or
pursuant to Section 9.06.
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 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. Notwithstanding the foregoing, the Trustee shall
not be liable to any holder of Senior Indebtedness if, in the exercise of the
Trustee's good faith, the Trustee pays over or delivers money to Holders of
Debentures, the Company or any other Person other than 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
37
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, the issuance and delivery of Junior Securities
upon conversion of Debentures in accordance with Article 16 and/or delivered as
a Make-Whole Premium in accordance with Article 5 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, and shall not be subject to the subordination and
other provisions of this Article 4. For the purposes of this Section 4.08, the
term "JUNIOR SECURITIES" means (a) Common Stock 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
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 Designated Senior
Indebtedness and
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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.
ARTICLE 5
MAKE-WHOLE PREMIUM
Section 5.01. Make-Whole Premium. (a) Upon the occurrence of a
Fundamental Change, the Holders will be entitled to receive from the Company, on
the Designated Event Repurchase Date, the Make-Whole Premium, if any, if they
convert any of their Debentures pursuant to Section 16.01 hereof at any time
during the Designated Event Conversion/Repurchase Period.
(b) The Make-Whole Premium shall be equal to an additional
number of shares of Common Stock calculated in accordance with Section 5.01(c)
hereof. The Make-Whole Premium will be in addition to, and not in substitution
for, any cash, securities, or other assets otherwise due to Holders of
Debentures upon conversion thereof.
(c) The "MAKE-WHOLE PREMIUM" shall be equal to the principal
amount of the Debentures to be converted divided by $1,000 and multiplied by the
applicable number of shares of Common Stock determined by reference to a table
in a substantially similar form to, and prepared in accordance with a
methodology consistent with, the example tables set forth in Exhibit B hereto
(the "MAKE-WHOLE PREMIUM TABLE"), which Make-Whole Premium Table shall be
finalized and agreed upon by the Company and the Holders of the Debentures by
July 6, 2005, and shall be based on the Effective Date and the Stock Price, with
the initial Stock Price for the Make-Whole Premium Table being the Average
Closing Price. Upon the finalization of the Make-Whole Premium Table, the
Company and the Trustee shall, in accordance with Section 12.01, enter into a
supplemental indenture setting forth (x) the price calculated to be the Average
Closing Price and (y) the Make-Whole Premium Table (the "INITIAL SUPPLEMENTAL
INDENTURE MATTERS").
(1) If the Stock Price is between two stock price amounts on
the Make-Whole Premium Table or the Effective Date is between two dates on the
Make-Whole Premium Table, the Make-Whole Premium will be determined by
straight-line interpolation between Make-Whole Premium amounts set forth for the
higher and lower stock price amounts and the two dates, as applicable, based on
a 365-day year (or a 366-day year if the Effective Date occurs in a leap year).
(2) If the Stock Price is in excess of 4.0 times the Average
Closing Price (subject to adjustment as described in Section 5.03, the "STOCK
PRICE CAP"), the Make-Whole Premium shall equal zero shares of Common Stock.
(3) If the Stock Price is less than the Average Closing
Price (subject to adjustment as described in Section 5.03, the "STOCK PRICE
THRESHOLD"), the Make-Whole Premium shall equal zero shares of Common Stock.
(4) For purposes of this Section 5.01(c), "STOCK PRICE"
means the price paid per share of Common Stock in the transaction constituting
the Fundamental Change, determined as follows: (i) if holders of Common Stock
receive only cash in the transaction constituting the
39
Fundamental Change, the Stock Price shall equal the cash amount paid per share
of Common Stock; and (ii) in all other cases, the Stock Price shall equal the
arithmetic average of the Closing Sale Prices of a share of Common Stock over
the five Trading Day period ending on the Trading Day immediately preceding the
Effective Date.
(d) The Company may pay the Make-Whole Premium in shares of
Common Stock (other than cash paid in lieu of fractional shares) or in the same
form of consideration into which shares of Common Stock have been converted in
connection with the applicable Fundamental Change; provided, however, that in
the event that the Company is prohibited by operation of Article 4 from paying
any of the Make-Whole Premium payable in cash by virtue of Exchange Property
being comprised of cash, the Company shall pay such premium solely by the
delivery of shares of Common Stock. The Designated Event Notice delivered
pursuant to Section 3.05(b) in connection with the Fundamental Change shall
state the percentage of any Make-Whole Premium, stated in total principal amount
as if all Debentures then Outstanding shall be converted or redeemed during the
Designated Event Conversion/Repurchase Period, that will be paid in shares of
Common Stock (which indication shall be irrevocable). If holders of Common Stock
have the right to elect the form of consideration received in a Fundamental
Change, then for purposes of the foregoing the consideration into which a share
of Common Stock has been converted shall be deemed to equal the same percentage
of each form of consideration as encompasses the aggregate consideration
distributed in respect of all shares of Common Stock participating in the
distribution. Unless the Company gives notice to the contrary, the Make-Whole
Premium shall be paid in shares of Common Stock (or, if applicable, in Exchange
Property).
If the Company elects to pay the Make-Whole Premium in
the same form of consideration used to pay for the shares of the Common Stock in
connection with the applicable Fundamental Change, the value of the
consideration to be delivered in respect of the Make-Whole Premium will be
calculated as follows:
(i) securities that are traded on a United States
national securities exchange or approved for quotation on the
Nasdaq National Market or any similar system of automated
dissemination of quotations of securities prices will be based
on 98% of the arithmetic average of the Closing Price of such
securities during each of the ten (10) Trading Days ending on
the Trading Day immediately preceding the Effective Date;
(ii) other securities, assets or property (other than
cash) will be valued on 98% of the arithmetic average of the
Fair Market Value of such securities, assets or property (other
than cash) as determined by two independent nationally
recognized investment banks selected by the Company; and
(iii) 100% of any cash.
If a Make-Whole Premium is required, the Company shall from time to time appoint
an independent nationally recognized investment bank to serve as calculation
agent with respect to calculation of the Make-Whole Premium (the "CALCULATION
AGENT"). The Calculation Agent shall, on behalf and upon request by the Company,
calculate (A) the Stock Price and (B) the
40
Make-Whole Premium with respect to such Stock Price based on the Effective Date
specified by the Company, and shall deliver its calculation of the Stock Price
and Make-Whole Premium to the Company and the Trustee within five (5) Business
Days after the request by the Company. The Company, (X) shall notify the Holders
of the Stock Price and the estimated Make-Whole Premium per $1,000 Principal
Amount of Securities with respect to a Fundamental Change as part of the
Designated Event Notice delivered in connection with a Fundamental Change in
accordance with Section 3.05(b) or otherwise in accordance with the notice
provisions of the Indenture and (Y) shall notify the Holders promptly upon the
opening of business on the Effective Date of the number of shares of Common
Stock (or, at the option of the Company, other securities, assets or property or
cash into which all or substantially all of the shares of Common Stock have been
converted as of the Effective Date as described above) to be delivered in
respect of the Make-Whole Premium, if any, payable in connection with
conversions upon such Fundamental Change.
(e) In the event of a Fundamental Change where the Company is
not the surviving entity, for each conversion by a Holder after the Effective
Date, such Holder shall receive in lieu of each share of Common Stock payable as
part of the Make-Whole Premium the Exchange Property received in such
Fundamental Change for each share of Common Stock.
(f) Promptly after determination of the actual number of shares
of Common Stock to be issued in respect of the Make-Whole Premium, the Company
shall publish a notice containing this information in a newspaper published in
the English language, customarily published each Business Day and of general
circulation in The City of New York and publish such information on the
Company's web site or through such other public medium as the Company may use at
that time.
Section 5.02. Payment Of Make-Whole Premium. On or prior to
10:00 a.m., New York City time, on the Designated Event Repurchase Date, the
Company will deposit with the Trustee or with one or more paying agents,
additional shares of Common Stock, cash and/or other assets or property
sufficient to satisfy the entitlement of the Holders of Debentures under Section
5.01. Payment of the entitlement pursuant to Section 5.01 to Holders of
Debentures surrendered for conversion during the Designated Event
Conversion/Repurchase Period will be made promptly by the Trustee or such paying
agent on the Designated Event Repurchase Date. To the extent that the aggregate
amount of shares of Common Stock, cash and/or other assets or property deposited
by the Company pursuant to this Section exceeds the aggregate entitlement of the
Holders of Debentures under Section 5.01 that are converted in respect of the
Fundamental Change and are entitled to receive the Make-Whole Premium, then,
promptly after the Designated Event Repurchase Date, the paying agent shall
return any such excess to the Company.
Section 5.03. Adjustments Relating To The Make-Whole Premium.
Each time that the Conversion Rate is adjusted by the Company pursuant to
Section 16.05 hereof, (A) the Stock Price Threshold, the Stock Price Cap and
each of the stock prices set forth in the left hand column of the Make-Whole
Premium Table shall be adjusted (rounded to the nearest cent) by multiplying
each such amount by a fraction, the numerator of which is the Conversion Rate
immediately prior to such adjustment and the denominator of which is the
Conversion Rate as so adjusted, and (B) each of share amounts set forth in the
body of the Make-Whole Premium Table
41
shall be adjusted (rounded to the nearest one-one hundredth of a share) in the
same manner as the Conversion Rate is adjusted pursuant to Section 16.05 hereof.
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.
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 the Corporate
Trust Office 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.
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:
42
(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 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
43
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
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
44
deliver to such Holder or beneficial holder a written statement as to whether it
has complied with such requirements.
Section 6.09. 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 (which on the date hereof ends on December 31), 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 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.
Section 6.12. Limitation on Indebtedness. (a) The Company shall
not, and shall not permit any of its Subsidiaries to, incur, create, issue,
assume, guarantee or otherwise become liable for any outstanding Indebtedness
that is secured or which ranks senior to, or pari passu
45
with, the Debentures in an aggregate principal amount in excess of the greater
of (i) $50 million or (ii) four times LTM EBITDA, measured at the time the
Company incurs, creates, issues, assumes, guarantees or otherwise becomes liable
for such Indebtedness, including any amounts owing under the Senior Credit
Facility; provided, that, to the extent any Indebtedness is permitted pursuant
to the immediately preceding clause of this Section 6.12, such Indebtedness
shall not under any circumstances be convertible into, or exchangeable or
exercisable for, Common Stock. At any such time that the Company seeks to incur,
create, issue, assume, guarantee or otherwise become liable for Indebtedness in
excess of $50 million, the Company shall deliver, prior to the incurrence of
such Indebtedness, an Officers' Certificate to the Trustee (w) certifying the
amount of LTM EBITDA, (x) setting forth the calculation of such figure , (y)
specifying the publicly available financial information upon which such
calculation was based and (z)directing the Trustee to deliver a copy of such
Officers' Certificate to the Holders in accordance with the last sentence of
this Section 6.12(a); provided, that, to the extent that any Officers'
Certificate delivered hereunder contains any material, nonpublic information,
the Company shall, prior to or contemporaneously with the delivery of such
certificate to the Trustee, publicly disclose such information. The Trustee
shall deliver a copy of any Officers' Certificate delivered to it pursuant to
this Section 6.12(a) to the Holders within five Business Days of its receipt
thereof.
(b) The Company may incur, create, issue, assume, guarantee or
otherwise become liable for any Indebtedness or issue redeemable preferred stock
of the Company so long as such Indebtedness and redeemable preferred stock is
made expressly subordinate in right of payment to the Debentures and which
Indebtedness or redeemable preferred stock does not provide at any time for the
payment, prepayment, repayment, repurchase or defeasance, directly or
indirectly, of any principal or premium, if any, thereon, or any return of
capital, as applicable, prior to 91 days following the maturity of the
Debentures.
Section 6.13. Prohibition on Certain Issuances and Offers. The
Company shall not, in any manner, effect any issuances, dividends or
distributions or make or enter into any tender or exchange offers or take any
other similar actions subject to the adjustment provisions of Section 16.05, if
the effect of any such issuances, distributions, offers or actions would cause
an adjustment (without regard to any limitations on adjustment set forth in
Section 16.05(l)) of the Conversion Rate such that the resulting Conversion
Price would be less than the Average Closing Price (as appropriately adjusted
for any stock dividend, stock split, stock combination or other similar
transaction ).
Section 6.14. Disclosure on Finalization of Make-Whole Premium
Table. The Company shall file the completed Make-Whole Premium Table following
the finalization of such table in accordance with Section 5.01(c), as part of
the Company's Quarterly Report on Form 10-Q or Annual Report on Form 10-K next
filed with the Commission, unless the Make-Whole Premium Table was previously
filed by the Company on any Current Report on Form 8-K filed with the
Commission.
46
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 June 1 and December 1
in each year beginning with December 1, 2005, 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.
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 2006, the Trustee shall
transmit to Holders of Debentures such reports dated as of May 15 of the year in
which such reports are made in accordance with and to the extent required under,
Section 313 of the Trust Indenture Act.
(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
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governed by such Act; provided that, notwithstanding the provisions of the Trust
Indenture Act, 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 filed with the
Commission. Delivery of such reports, information and documents to the Trustee
is for informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on an Officers' Certificate).
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 (or otherwise
settle for) any Debentures following the exercise by the Holder of the
Debentures of the right to convert such Debentures 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) (i) default in the payment of principal when due at stated
maturity or resulting in acceleration of other Indebtedness of the Company or
any of its Subsidiaries 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 (ii) the entry by a court of competent jurisdiction against the Company
or any of its Subsidiaries of a final, non-appealable judgment or judgments
aggregating in excess of $10 million, which judgments remain unpaid, unstayed,
undischarged or unbonded for a period of 60 days or such longer period of time
provided for under any such judgment; or
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(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 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) failure on the part of the Company to duly observe and
comply with the limitations on Indebtedness set out in Section 6.12; or
(h) the Company or any of its Significant Subsidiaries shall
commence a voluntary case or other proceeding seeking liquidation,
reorganization or other relief with respect to the Company or any of its
Significant Subsidiaries 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
of its Significant Subsidiaries or any substantial part of the property of the
Company or any of its Significant Subsidiaries, 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 any of its
Significant Subsidiaries, or shall make a general assignment for the benefit of
creditors, or shall fail generally to pay its debts as they become due; or
(i) an involuntary case or other proceeding shall be commenced
against the Company or any of its Significant Subsidiaries seeking liquidation,
reorganization or other relief with respect to the Company or any of its
Significant Subsidiaries 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
of its Significant Subsidiaries or any substantial part of the property of the
Company or any of its Significant Subsidiaries, 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(h) or 8.01(i)), 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(h) or 8.01(i) 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
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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 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.
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
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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. Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Debentureholders any
plan of reorganization, arrangement, adjustment or composition affecting the
Debentures or the rights of any Holder thereof, or to authorize the Trustee to
vote in respect of the claim of any Debentureholder in any such proceeding.
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
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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: Subject to the terms of Article 4, 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: Subject to the terms of Article 4, 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
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
52
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.
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
53
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, expose the
Trustee to personal liability, or be unduly prejudicial to Holders not joining
therein, and (b) the Trustee may take any other action which is not inconsistent
with such direction. 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 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
54
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 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
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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;
(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;
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(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;
(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.
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
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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 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 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(h) or (i) 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.
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
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deemed to be conclusively proved and established by an Officers' Certificate
delivered to the Trustee.
Section 9.08. Conflicting Interests of Trustee. The Trustee
shall comply with the terms of Section 3.10(b) of the Trust Indenture Act.
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 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
59
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.
(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.
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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 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 in any
reasonable manner which the Trustee deems sufficient. Whenever the Company or
the
61
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
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 authenticating agent, 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 authenticating agent
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 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
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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.
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.
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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.
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
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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.
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) provided that any such provision does not adversely effect the interests
of the Holders of the Debentures;
(b) to convey, transfer, assign, mortgage or pledge to the
Trustee as security for the Debentures, any property or assets;
65
(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;
(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;
(h) to make provision for the Initial Supplemental Indenture
Matters; or
(i) 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.
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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 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
modify in any manner the calculation of the Make-Whole Premium, or change the
ranking of the Debentures in a manner adverse to the Holders of the 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.
Notwithstanding the foregoing, with the consent of the Holders
of at least a majority in aggregate principal amount of the Debentures at the
time outstanding, the Company,
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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 modifying Section 16.03 such that, from
and after the date of such modification or amendment, the Company shall have the
ability to satisfy its obligation to make the payment under Section 16.03(a)(i)
of this Indenture upon conversion of a Debenture in cash, Common Stock, or any
combination thereof; provided, however, that the Company may, without the
consent of the Holders, (i) increase the percentage of such Holders required to
approve the amendment or modification set forth in this paragraph or (ii)
eliminate the Company's right to implement any such amendment or modification.
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
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.
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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
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,
69
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.
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 is authorized or permitted and complies with the
provisions of this Article 13 and the Indenture.
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 17.05 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.
Notwithstanding the satisfaction and discharge of the Indenture, the obligation
of the Company to the Trustee under Section 9.06 shall survive.
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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 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
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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. (a) Subject to and upon
compliance with the provisions of this Indenture, the Holder of any Debenture
shall have the right, at such Holder's option, at any time and from time to
time, to convert the principal amount of the Debenture, or any portion of such
principal amount which is a multiple of $1,000, into cash and fully paid and
non-assessable shares of Common Stock (as such shares shall then be
constituted), if any, at the Conversion Rate (the "CONVERSION OBLIGATION") 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. Any Holder of
a Debenture electing to convert a Debenture, in whole or in part, in connection
with a Fundamental Change, shall be entitled to receive, in addition to any cash
and shares of Common Stock, if any, provided for in the foregoing sentence, a
Make-Whole Premium in accordance with Article V. Notwithstanding any provision
hereof to the contrary, the Debentures shall be convertible prior to June 15,
2011 only upon the occurrence of one of the following events:
(i) during any Fiscal Quarter, if the Closing Sale
Price of the Common Stock exceeds 120% of the Conversion Price
then 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) (the "CONVERSION
TRIGGER PRICE");
(ii) (A) 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 of the Common Stock and the Conversion
Rate (a "PRINCIPAL VALUE CONVERSION");
(B) in the event that the conversion agent is
unable to determine if the Debentures are convertible in accordance with Section
16.01(ii)(A), if at any time (x) the fee charged by any three independent
nationally recognized securities dealers for borrowing shares of Common Stock as
indicated on their electronic locate systems is in excess of the applicable Cost
Threshold or (y) the Common Stock appears on the list of "Threshold Securities"
(or any successor list thereto) published daily as required by the Commission
under Regulation SHO (or any successor regulation thereto); or
(iii) 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
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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. The
conversion agent shall make such determination for the last 30 consecutive
Trading Days ending on the last Trading Day of each calendar quarter. 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 Holders
receive 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 of the Common Stock
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).
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 of the Common Stock 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,
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where the Fair Market Value of such distribution per share of
Common Stock exceeds 15% of the Closing Sale Price of the Common
Stock 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) any event constituting a Fundamental Change
(without regard to the 90% Condition) occurs, then the
Debentures may be converted at any time during the Designated
Event Conversion/Repurchase Period.
"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) If the Company engages in any reclassification of the Common
Stock (other than a subdivision or combination to which 16.04(c) applies, or a
change in par value, or from par value to no par value, or from no par value to
par value) or is party to a consolidation, merger, or transfer of all or
substantially all of its assets pursuant to which holders of Common Stock would
be entitled to receive cash, securities or other property, then at the effective
time of such transaction, the Conversion Obligation and the Conversion
Settlement Distribution, to the extent relating to amounts of the Conversion
Settlement Distribution to be settled in shares of Common Stock, shall be based
on the applicable Conversion Rate and the kind and amount of cash, securities or
other property that a holder of one share of the Common Stock would have
received in such transaction (such property, collectively, the "EXCHANGE
PROPERTY"). In addition, if a Holder converts Debentures following the effective
time of any such transaction, any amounts of the Conversion Settlement
Distribution to be settled in shares of Common Stock shall be paid in such
Exchange Property rather than shares of Common Stock.
(d) 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
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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.
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.
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), the Company shall, on the
Conversion Settlement Date, (i) pay the cash component (including cash in lieu
of any fraction of a share to which such Holder would otherwise be entitled) of
the Conversion Obligation determined pursuant to Section 16.03 to the Holder of
a Debenture surrendered for conversion, or such Holder's nominee or nominees,
(ii) (A) provided the conversion agent is participating in the Depositary's Fast
Automated Securities Transfer Program, issue, or cause to be issued, and deliver
such aggregate number of shares of Common Stock to which the applicable
Debentureholder shall be entitled as part of such Conversion Obligation to such
Debentureholder's or its nominee's or nominees' balance account with the
Depositary through its Deposit Withdrawal Agent Commission system or (B) if the
conversion agent is not participating in the Depositary's Fast Automated
Securities Transfer Program, issue, or cause to be issued, and deliver to the
conversion agent or to such Debentureholder, or such Debentureholder's nominee
or nominees, 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. In case any Debenture of a denomination
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greater than $1,000 shall be surrendered for partial conversion, and subject to
Section 2.03, the Company shall execute and the Trustee shall 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 (excluding (1) Debentures or portions thereof
presented for purchase pursuant to Article 3 hereof on a Designated Event
Repurchase Date occurring during the period beginning at the close of business
on a Record Date and ending at the opening of business on the next succeeding
interest payment date or (2) Debentures that are submitted for conversion
between the Record Date for the final interest payment and the opening of
business on the final interest payment date) 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
to the extent of any overdue interest, if any overdue interest exists at the
time of conversion with respect to such Debenture. Notwithstanding the
foregoing, upon conversion, a Debentureholder shall be entitled to receive any
accrued and unpaid Liquidated Damages to, but not including, the Conversion
Date, it being understood that no Liquidated Damages shall accrue after such
conversion. 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 cash and shares of the
Common Stock, if any, (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 cash and the Fair Market Value of such shares of
Common Stock, if any, (together with any such cash payment in lieu of fractional
shares) shall be treated as delivered, to the extent thereof, first in exchange
for and in satisfaction of the Company's 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 cash and
Fair Market Value of such Common Stock, if any (and any such cash payment in
lieu of fractional shares), shall be treated as delivered in exchange for and in
satisfaction of the right to convert the Debenture being converted pursuant to
the provisions hereof.
(b) No holder shall have the right to convert any portion of
such Debenture, to the extent that after giving effect to such conversion, such
holder (together with such holder's
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Affiliates) would beneficially own in excess of 9.99% of the number of shares of
Common Stock outstanding immediately after giving effect to such conversion (the
"CONVERSION LIMITATION"). For purposes of the foregoing sentence, the number of
shares of Common Stock beneficially owned by such holder and its Affiliates
shall include the number of shares of Common Stock issuable upon conversion of a
Debenture with respect to which the determination of such sentence is being
made, but shall exclude the number of shares of Common Stock which would be
issuable upon (A) conversion of the remaining, nonconverted portion of any
Debenture beneficially owned by such holder or any of its Affiliates and (B)
exercise or conversion of the unexercised or nonconverted portion of any other
securities of the Company subject to a limitation on conversion or exercise
analogous to the limitation contained herein beneficially owned by such holder
or any of its Affiliates. Except as set forth in the preceding sentence, for
purposes of this Section, beneficial ownership shall be calculated in accordance
with Section 13(d) of the Exchange Act. For purposes of this Section 16.02, in
determining the number of outstanding shares of Common Stock, such holder may
rely on the number of outstanding shares of Common Stock as reflected in (x) the
Company's most recent annual, quarterly or current report on Form 10-K, 10-Q or
Form 8-K, respectively, as the case may be; (y) a more recent public
announcement by the Company or (z) any other notice by the Company setting forth
the number of shares of Common Stock outstanding. In any case, the number of
outstanding shares of Common Stock shall be determined after giving effect to
the conversion or exercise of securities of the Company, including any
Debenture, by such holder or its Affiliates since the date as of which such
number of outstanding shares of Common Stock was reported. By written notice to
the Trustee and the Company, any holder may increase or decrease the Conversion
Limitation to any other percentage not in excess of 9.99% specified in such
notice; provided that (i) any such increase will not be effective until the 61st
day after such notice is delivered to the Trustee and the Company, and (ii) any
such increase or decrease will apply only to the holder sending such notice and
not to any other holder of Debentures. Notwithstanding the foregoing, the
Conversion Limitation shall not be applicable (i) on any of the ten Trading Days
up to and including the maturity date or (ii) during the Designated Event
Conversion/Repurchase Period.
(c) In no event shall the shares issuable upon conversion of
each $1,000 principal amount of Debentures pursuant to Section 16.01 plus the
shares issuable pursuant to Section 5.01 hereof be in excess of 157.2248 shares
of Common Stock (subject to appropriate adjustment for any stock dividend, stock
split, stock combination or other similar transaction, the "CONVERSION SHARES
CAP").
Section 16.03. Payment Upon Conversion. (a) Upon conversion of
Debentures, the Company shall deliver to Holders surrendering Debentures for
conversion, for each $1,000 principal amount of Debentures, a settlement amount
(the "CONVERSION SETTLEMENT DISTRIBUTION") on the Conversion Settlement Date
consisting of:
(i) a cash amount (the "CASH AMOUNT") equal to the
lesser of $1,000 and the Conversion Value; and
(ii) to the extent the Conversion Value exceeds
$1,000, a number of shares of Common Stock (the "RESIDUAL
VALUE SHARES") equal to the sum of the Daily Share Amounts for
each Trading Day of the Conversion Reference Period,
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subject to the Company's right to deliver cash in lieu of all or
a portion of such Residual Value Shares.
The "DAILY SHARE AMOUNT" means, for any Trading Day, a number of
shares of Common Stock equal to the quotient of:
(I)(A) the product of (x) the Closing Sale Price of the
Common Stock on that Trading Day, multiplied by (y) the
Conversion Rate in effect on the Conversion Date, minus (B)
$1,000, divided by
(II) the product of (A) the Closing Sale Price of the
Common Stock on that Trading Day, multiplied by (B) 20.
Notwithstanding the foregoing, the Company may elect to pay cash
to the Holders of the Debentures surrendered for conversion in lieu of all or a
portion of the Residual Value Shares issuable upon conversion of such
Debentures. If the Company elects to pay cash for all or a portion of the
Residual Value Shares in lieu of delivery of the Common Stock, it shall inform
the Holders who have surrendered their Debentures for conversion through the
Trustee of the dollar amount to be satisfied in cash (expressed as a percentage
of each Residual Value Share that will be paid in cash in lieu of shares of the
Common Stock) at any time on or before the date that is three (3) Business Days
following the Company's receipt of such Conversion Notice ("CASH SETTLEMENT
NOTICE PERIOD"). If the Company timely elects to pay cash for any portion of the
shares of Common Stock otherwise issuable to the Holders of the Debentures, each
Holder may retract its respective Conversion Notice at any time during the two
Business Day period immediately following the Cash Settlement Notice Period (the
"CONVERSION RETRACTION PERIOD"). If the Company does not make such an election,
no such retraction can be made (and a Conversion Notice shall be irrevocable).
The amount of cash payable to the Holders in respect of each Residual Value
Share otherwise issuable upon conversion shall equal the sum of the Residual
Cash Value (as defined below) for such share of Common Stock calculated for each
day of the Conversion Reference Period. The "RESIDUAL CASH VALUE" for any
Trading Day shall be the product of (1) the percentage of each Residual Value
Share otherwise issuable upon conversion that the Company elects to pay in cash,
multiplied by (2) the cash value of the Daily Share Amount for such Trading Day.
The cash value of the Daily Share Amount for any Trading Day shall be an amount
equal to the product of (A) the Daily Share Amount for such Trading Day,
multiplied by (B) the Closing Sale Price of the Common Stock for such Trading
Day.
The Company shall not issue fractional shares of Common Stock
upon conversion of the Debentures. Instead, the Company shall pay the cash value
of such fractional shares in accordance with Section 16.04. In addition, if the
Company chooses to settle all or any portion of the Residual Value Shares in
cash in connection with conversions within 20 Trading Days prior to June 15,
2012, the Company shall send, on or prior to such date, a single notice to the
Trustee of the Residual Value Shares to be satisfied in cash.
The "CONVERSION VALUE" means the product of (1) the Conversion
Rate in effect (plus any applicable Make-Whole Premium) and (2) the arithmetic
average of the Closing Sale Prices of the Common Stock on each Trading Days
during the Conversion Reference Period.
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The "CONVERSION REFERENCE PERIOD" with respect to any Debentures
means the 20 consecutive Trading Days beginning on the second Trading Day after
the Conversion Date, or if the Company elects to pay cash to Holders in lieu of
all or a portion of the Residual Value Shares, the second Trading Day after the
Conversion Retraction Period ends, except in circumstances where conversions
occur within 20 Trading Days prior to June 15, 2012, in which case the
Conversion Reference Period will be the 20 consecutive Trading Days beginning on
the fifth Trading Day following June 15, 2012.
(b) If a Holder tenders Debentures for conversion and the
Conversion Value is being determined at a time when the Debentures are
convertible into Exchange Property, the Conversion Value of each Debenture shall
be determined based on the kind and amount of such Exchange Property and the
value thereof during the Conversion Reference Period. Settlement of Debentures
tendered for conversion after the effective date of any transaction giving rise
to Exchange Property shall be as set forth above.
For the purposes of this Section, the Closing Sale Price of the
Common Stock shall be deemed to equal the sum of (A) 100% of the value of any
Exchange Property consisting of cash received per share of Common Stock, (B) the
Closing Sale Price of any Exchange Property received per share of Common Stock
consisting of securities that are traded on a U.S. national securities exchange
or approved for quotation on the Nasdaq National Market and (C) the Fair Market
Value of any other Exchange Property received per share, as determined by two
independent nationally recognized investment banks selected by the Company for
this purpose. Settlement (in cash and/or shares) in such circumstances will
occur on the third Business Day following the date the Conversion Settlement
Distribution is determined.
Section 16.04. 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
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 the Common Stock for purposes of this Section 16.04 shall be the
Closing Sale Price of the Common Stock on the last Trading Day immediately
preceding the day on which the Debentures (or specified portions thereof) are
deemed to have been converted.
Section 16.05. 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,
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(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.
(b) In case the Company shall issue rights, options or warrants
to all or substantially 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 (or securities
convertible into or exerciseable or exchangeable for Common Stock) at a price
per share (or having a conversion exercise or exchange price per share) less
than the Current Market Price on the date fixed for determination of
stockholders entitled to receive such rights, options or warrants (treating the
conversion, exercise or exchange price per share of the securities convertible
into or exercisable or exchangeable for Common Stock as equal to (x) the sum of
(i) the price for a unit of the security convertible into or exercisable or
exchangeable for Common Stock and (ii) any additional consideration initially
payable upon the conversion of such security into or exercise or exchange of
such security for Common Stock divided by (y) the number of shares of Common
Stock initially underlying such security) 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, options or warrants (or securities
convertible into or exerciseable or exchangeable for Common Stock) 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,
options or warrants plus the total number of additional shares
of Common Stock offered for subscription or purchase (or into
which the securities so offered are convertible, exchangeable or
exerciseable), 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, options or warrants plus the
number of shares (or the aggregate conversion, exercise or
exchange
80
price of the securities so offered, which shall be determined by
multiplying the number of shares of Common Stock issuable upon
conversion, exercise or exchange of such securities by the
applicable conversion, exercise or exchange price per share of
Common Stock pursuant to the terms of such securities) 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, options 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, options or
warrants. To the extent that shares of Common Stock are not delivered after the
expiration of such rights, options 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, options 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 conversion, exercise or exchange 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 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, options 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
81
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 be made successively whenever any such distribution is made
and shall 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
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 of the Common Stock 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 arithmetic
average of the Closing Sale Prices of the Common Stock 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
82
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.
In case the Company shall, by dividend or otherwise, at any time
distribute (a "TRIGGERING DISTRIBUTION") to all or substantially all holders of
its Common Stock cash, the Conversion Rate shall be increased so that the same
shall equal the rate determined by multiplying such Conversion Rate in effect
immediately prior to the Business Day immediately preceding the day on which
such Triggering Distribution is declared ("DECLARATION DATE") by a fraction of
which:
(i) the numerator shall be such Current Market Price
per share of the Common Stock (as determined in accordance with
subsection (6) of this Section 4.6(a)) on the Declaration Date;
and
(ii) the denominator of which shall be the Current
Market Price per share of the Common Stock (as determined in
accordance with subsection (6) of this Section 4.6(a)) on the
Declaration Date less the sum of the Triggering Distribution
applicable to one share of Common Stock (determined on the basis
of the number of shares of Common Stock outstanding on the
Declaration Date).
such increase to become effective immediately prior to the opening of business
on the day following the date on which the Triggering Distribution is paid.
Rights, options or warrants distributed by the Company to all
holders of Common Stock entitling the holders thereof to subscribe for or
purchase shares of the Company's capital stock (either initially or under
certain circumstances), which rights, options or warrants, until the occurrence
of a specified event or events ("TRIGGER EVENT"): (i) are deemed to be
transferred with such shares of Common Stock; (ii) are not exercisable; and
(iii) are also issued in respect of future issuances of Common Stock, shall be
deemed not to have been distributed for purposes of this 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,
options 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, option or warrant, including any such
existing rights, options or warrants distributed prior to the date of this
Indenture, are subject to events, upon the occurrence of which such rights,
options 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, options or warrants with such rights
(and a termination or expiration of the existing rights, options or warrants
without exercise by any of the holders thereof). In addition, in the event of
any distribution (or deemed distribution) of rights, options or warrants, or any
Trigger Event or other event (of the type described in the preceding sentence)
with respect thereto that 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, options or warrants that shall all
have been redeemed, purchased by the Company or repurchased without exercise by
any holders thereof, the Conversion Rate shall be readjusted upon such final
redemption or repurchase to give effect
83
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,
options or warrants (assuming such holder had retained such rights, options or
warrants), made to all holders of Common Stock as of the date of such redemption
or repurchase, and (2) in the case of such rights, options 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, options 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, options or warrants distributed or
deemed distributed on any Trigger Event to the extent that such rights, options
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, options 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, options 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, options 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 (such
date, the "EXPIRATION DATE") and such tender or exchange offer (as amended upon
the expiration thereof) shall require 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 on the Expiration
Date exceeds the Closing Sale Price of the 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
84
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 the 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 Purchased
Shares) at the Expiration Time multiplied by the Closing Sale
Price of the 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) For purposes of this Section 16.05, the following terms
shall have the meaning indicated:
(i) "CURRENT MARKET PRICE" shall mean the arithmetic
average of the Closing Sale Prices of the 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 of the
Common Stock was obtained without the right to receive such
issuance or distribution, and (2) when used with respect to any
subdivision or combination of shares of Common Stock, means the
first date on which the Common Stock trades, regular way, on
such exchange or in such market after the time at which such
subdivision or combination becomes effective.
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.
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(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 (w) if the applicable
security is quoted on the Nasdaq National Market, a day on which
trades may be made thereon or (x) if the applicable security is
listed or admitted for trading on the New York Stock Exchange or
another U.S. national securities exchange, a day on which the
New York Stock Exchange or such other national securities
exchange is open for business, (y) if the applicable security is
not so listed, days on which such security is traded regular way
in the over-the-counter market and for which a closing bid and
closing asking price for such security are available 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.
(g) The Company may make such increases in the Conversion Rate,
in addition to those required by Section 16.05(a), (b), (c) or (d) 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
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.
(h) 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
86
Indenture, within twenty (20) days after execution thereof. Failure to deliver
such notice shall not affect the legality or validity of any such adjustment.
(i) 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) or (4) the Expiration Time for any tender
or exchange offer pursuant to Section 16.05(e), (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 16.04. For purposes of this
Section 16.05(i), 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,
(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.
(j) 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.
(k) No adjustment pursuant to this Section 16.05 shall cause the
Conversion Price to be less than the Average Closing Price, as appropriately
adjusted for any stock dividend, stock split, stock combination or similar
transaction.
Section 16.06. Effect Of Reclassification, Consolidation, Merger
or Sale. (a) 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 Exchange
Property 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
87
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 for the conversion and settlement of
the Debentures as provided in this Indenture (including, without limitation,
Sections 16.02 and Section 16.03). 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.
If, in the case of any such reclassification, change, consolidation, merger,
combination, sale or conveyance, the Exchange Property receivable thereupon by a
holder of Common Stock includes shares of stock or other securities or other
property or assets of a corporation other than the successor or purchasing
Person, in such reclassification, change, consolidation, merger, combination,
sale or conveyance, then such supplemental indenture shall also be executed by
such other corporation and shall contain such additional provisions to protect
the Holders of the Debentures as the Board of Directors shall consider
reasonably necessary.
(b) The Conversion Obligation with respect to each $1,000
principal amount of Debentures converted following the effective date of any
such transaction, shall be calculated (as provided in clause (c) below) based on
the Exchange Property assuming such holder of Common Stock did not exercise his
rights of election, if any, as to the kind or amount of Exchange Property
receivable upon such consolidation, merger, sale or conveyance (provided that,
if the Exchange Property receivable upon such consolidation, merger, 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 16.05 the Exchange Property receivable
upon such consolidation, merger, binding share exchange, sale or conveyance for
each Non-Electing Share shall be deemed to be the kind and amount so receivable
per share by a plurality of the Non-Electing Shares).
(c) The Conversion Obligation in respect of any Debentures
converted following the effective date of any such transaction shall be computed
in the same manner as set forth in Section 16.03(a) except that (1) the
Conversion Reference Period shall be the 10 Trading Day period beginning on the
second Trading Day after the Conversion Date (or, in the event the Conversion
Date is on the Business Day prior to the maturity, the 10 Trading Day period
beginning on the second Trading Day after the maturity), and (2) if the
Debentures become convertible into Exchange Property, the Closing Sale Price of
the Common Stock shall be deemed to equal the sum of (A) 100% of the value of
any Exchange Property consisting of cash received per share of Common Stock, (B)
the Closing Sale Price of any Exchange Property received per share of Common
Stock consisting of securities that are traded on a U.S. national securities
exchange or approved for quotation on the Nasdaq National Market and (C) the
Fair Market Value of any other Exchange Property received per share, as
determined by two independent nationally recognized investment banks selected by
the Company for this purpose. Settlement (in cash and/or shares) shall occur on
the third Business Day following the date the Conversion Settlement Distribution
is determined, provided, that any amount of the Conversion Settlement
Distribution to be delivered in shares of Common Stock shall be paid in Exchange
Property rather than shares of Common Stock. If the Exchange Property includes
more than one kind of property, the amount of Exchange Property of each kind to
be delivered shall be in the
88
proportion that the value of the Exchange Property (as calculated pursuant to
Section 16.03) of such kind bears to the value of all such Exchange Property. If
the foregoing calculations would require the Company to deliver a fractional
share or unit of Exchange Property to a Holder of Debentures being converted,
the Company shall deliver cash in lieu of such fractional share or unit based on
the value of the Exchange Property.
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.
The Company covenants that all shares of Common Stock which may
be issued upon conversion of Debentures (or as a Make-Whole Premium) 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
89
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
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
90
(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 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.
91
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: HSBC
Bank USA, National Association, 452 Fifth Avenue, New York, New York 10018,
Telecopier No: 212-525-1300, Attention: Corporate Trust & Loan Agency.
The Trustee, by notice to the Company, may designate additional
or different addresses for subsequent notices or communications.
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
92
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
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 or deemed to be included in an indenture
qualified under the Trust Indenture Act, such required or deemed 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.
93
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.
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.
94
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.
HSBC Bank USA, National Association, hereby accepts the trusts
in this Indenture declared and provided, upon the terms and conditions herein
above set forth.
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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
HSBC BANK USA, NATIONAL ASSOCIATION, as
Trustee
By: /s/ Frank J. Godino
-----------------------------------
Name: Frank J. Godino
Title: Vice President
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 HSBC BANK USA,
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
A-1
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 HSBC BANK USA, 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.
3.5% CONVERTIBLE SENIOR SUBORDINATED DEBENTURE DUE 2012
CUSIP: 45256B AC 5
No. ___ $[___________]
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
[ ] or its registered assigns, the aggregate principal sum set
forth on Schedule I hereto on June 15, 2012 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 June 15 and December 15 of each
year, commencing December 15, 2005, on said principal sum at said office or
agency, in like coin or currency, at the rate per annum of 3.5%, from the June
15 or December 15, 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 June 27, 2005 until payment of said
principal sum has been made or duly provided for. Notwithstanding the foregoing,
if the date hereof is after any June 1 or December 1, as the case may be, and
before the following June 15 or December 15, this Debenture shall bear interest
from such June 15 or December 15; provided that if the Company shall default in
the payment of interest due on such June 15 or December 15, then this Debenture
shall bear interest from the next preceding June 15 or December 15 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 June 27, 2005. Except as otherwise
provided in the Indenture, the interest payable on the Debenture pursuant to the
Indenture on any June 15 or December 15 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 June 1 or December 1 (whether or not a Business
Day) next preceding such June 15 or December 15, 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.
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
cash and 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
A-3
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.
HSBC BANK USA, 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.
3.5% CONVERTIBLE SENIOR SUBORDINATED DEBENTURE DUE 2012
This Debenture is one of a duly authorized issue of Debentures
of the Company, designated as its 3.5% Convertible Senior Subordinated
Debentures Due 2012 (herein called the "DEBENTURES"), limited in aggregate
principal amount to $75,000,000, issued and to be issued under and pursuant to
an Indenture dated as of June 27, 2005 (herein called the "INDENTURE"), between
the Company and HSBC Bank USA, 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 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 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 change the provisions of Article 4 in a manner adverse to
the Holders of Debentures, or modify in any manner the calculation of the
Make-Whole Premium, or change the ranking of the Debentures in a manner adverse
to the Holders of the
A-6
Debentures, (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 purchase 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 Debentures shall be senior, subordinated, unsecured
obligations of the Company and shall rank (a) pari passu with all other existing
or future senior, subordinated, unsecured obligations of the Company allowed
pursuant to Section 6.12 of this Indenture, (b) senior in right of payment to
the 1.250% Debentures and any future subordinated obligations of the Company and
(c) junior to the Designated Senior Indebtedness and other Senior Indebtedness
allowed pursuant to Section 6.12 of the Indenture. The Debentures shall
constitute "Senior Indebtedness", and the Company hereby specifically designates
the Debentures as "Designated Senior Indebtedness", in each case, under the 2004
Indenture.
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.
The Debentures are issuable in fully registered form, without
coupons, in denominations of $1,000 principal amount and any integral 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
A-7
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.
The Debentures may not be redeemed, in whole or in part, at the
option of the Company at any time prior to maturity.
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, 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 June 1 or December 1, respectively. The Debentures will be redeemable
in multiples of $1,000 principal amount. The Company (or, at its request, the
Trustee) shall mail to all Holders of the Debentures a notice of a Designated
Event and of the redemption right arising as a result thereof within 10 days
after the Company knows of 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, prior to the close of business on the Business Day before
the Designated Event Repurchase Date.
The Company shall pay a Make-Whole Premium on the Designated
Event Repurchase Date on all Debentures presented for conversion in connection
with a Fundamental Change in accordance with the terms of the Indenture. The
Company may make the Make-Whole Premium in shares of Common Stock or in the same
form of consideration into which shares of Common Stock have been converted in
connection with the applicable Fundamental Change; provided, however, that in
the event that the Company is prohibited by operation of Article 4 from paying
any of the Make-Whole Premium payable in cash by virtue of Exchange Property
being comprised of cash, the Company shall pay such premium solely by the
delivery of shares of Common Stock. The Company shall specify the type of
consideration for the Make-Whole Premium in the Designated Event Notice.
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 June 15, 2009 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 Trustee 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
A-8
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.
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 or prior to 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 the
principal amount of the Debentures into cash and fully paid and non-assessable
shares of Common Stock, 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 hereof 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,
together with 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
(excluding (1) Debentures or portions thereof presented for purchase pursuant to
Article 3 of the Indenture on a Designated Event Repurchase Date occurring
during the period beginning at the close of business on a Record Date and ending
on the next succeeding interest payment date or (2) Debentures that are
submitted for conversion between the Record Date for the final interest payment
and the opening of business on the final interest payment date), 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 to the extent of any overdue interest, if any overdue interest exists
at the time of conversion with respect to such debenture. Notwithstanding the
foregoing, upon conversion, a Debentureholder shall be entitled to receive any
accrued and unpaid
A-9
Liquidated Damages to, but not including, the Conversion Date, it being
understood that no Liquidated Damages shall accrue after such conversion.
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.
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 service 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
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.
A-10
Terms used in this Debenture and defined in the Indenture are
used herein as therein defined.
A-11
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 under Uniform Gifts to Minors
of survivorship and not as Act____________________________
tenants in common (State)
Additional abbreviations may also be used though not in the above list.
CONVERSION NOTICE
TO: IMPAX LABORATORIES, INC.
HSBC BANK USA, 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 cash and
shares of Common Stock of Impax Laboratories, Inc., if any, in accordance with
the terms of the Indenture referred to in this Debenture, and directs that the
cash and shares, if any, 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.
HSBC BANK USA, 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
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 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.
3.5% Convertible Senior Subordinated Debenture Due 2012
No. _______
Notation Explaining Principal Amount Authorized Signature of
Date Principal Amount Recorded Trustee or Custodian
- ------------ -------------------------------------- --------------------------------------- ---------------------------
- ------------ -------------------------------------- --------------------------------------- ---------------------------
- ------------ -------------------------------------- --------------------------------------- ---------------------------
- ------------ -------------------------------------- --------------------------------------- ---------------------------
EXHIBIT B
EXAMPLE MAKE-WHOLE PREMIUM TABLES
EXAMPLE TABLE #1
MAKE-WHOLE PREMIUM
(NUMBER OF ADDITIONAL SHARES OF COMMON STOCK)
EFFECTIVE DATE
STOCK
PRICE JULY 1, 2005 JULY 1, 2006 JULY 1, 2007 JULY 1, 2008 JULY 1, 2009 JULY 1, 2010 JULY 1, 2011 JULY 1, 2012
- ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
$16.19 14.25 14.25 14.25 14.25 14.25 14.25 14.25 0.00
$17.00 12.89 12.64 12.37 12.08 11.31 9.92 9.91 0.00
$18.00 11.47 11.11 10.67 10.15 8.62 8.03 7.53 0.00
$19.00 10.29 9.85 9.31 8.63 7.33 6.54 5.66 0.00
$20.00 9.31 8.81 8.20 7.43 6.28 5.36 4.21 0.00
$22.50 7.44 6.89 6.23 5.42 4.46 3.41 2.00 0.00
$25.00 6.15 5.62 4.98 4.23 3.37 2.35 1.04 0.00
$27.50 5.22 4.72 4.14 3.46 2.69 1.76 0.64 0.00
$30.00 4.51 4.06 3.53 2.93 2.24 1.42 0.48 0.00
$35.00 3.51 3.15 2.72 2.24 1.69 1.06 0.36 0.00
$40.00 2.82 2.53 2.19 1.81 1.36 0.86 0.30 0.00
$45.00 2.32 2.08 1.81 1.50 1.13 0.72 0.25 0.00
$50.00 1.92 1.74 1.51 1.26 0.96 0.61 0.22 0.00
$55.00 1.61 l.46 l.27 l.06 0.81 0.52 0.19 0.00
$60.00 1.36 1.23 1.08 0.91 0.70 0.45 0.16 0.00
$65.00 1.15 1.04 0.92 0.77 0.60 0.39 0.14 0.00
B-1
EXHIBIT B
EXAMPLE MAKE-WHOLE PREMIUM TABLES
EXAMPLE TABLE #2
MAKE-WHOLE PREMIUM
(NUMBER OF ADDITIONAL SHARES OF COMMON STOCK)
EFFECTIVE DATE
STOCK
PRICE JULY 1, 2005 JULY 1, 2006 JULY 1, 2007 JULY 1, 2008 JULY 1, 2009 JULY 1, 2010 JULY 1, 2011 JULY 1, 2012
- ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
$17.00 13.57 13.57 13.57 13.57 13.57 13.57 13.57 0.00
$18.00 12.07 11.80 11.52 11.20 10.31 9.16 9.07 0.00
$19.00 10.81 10.44 10.02 9.49 8.07 7.49 6.97 0.00
$20.00 9.75 9.31 8.80 8.14 6.91 6.16 5.29 0.00
$22.50 7.76 7.24 6.63 5.84 4.87 3.90 2.60 0.00
$25.00 6.39 5.86 5.24 4.49 3.63 2.63 1.32 0.00
$27.50 5.40 4.90 4.32 3.64 2.86 1.92 0.76 0.00
$30.00 4.66 4.20 3.67 3.05 2.35 1.51 0.53 0.00
$35.00 3.62 3.24 2.81 2.32 1.75 1.10 0.37 0.00
$40.00 2.91 2.61 2.26 1.86 1.40 0.88 0.31 0.00
$45.00 2.40 2.15 1.87 1.54 1.16 0.74 0.26 0.00
$50.00 2.00 1.80 1.57 1.30 0.99 0.63 0.22 0.00
$55.00 1.69 1.52 1.33 1.11 0.84 0.54 0.19 0.00
$60.00 1.43 1.29 1.13 0.95 0.72 0.47 0.17 0.00
$65.00 1.21 1.10 0.97 0.81 0.63 0.40 0.14 0.00
$70.00 1.03 0.94 0.83 0.70 0.54 0.35 0.13 0.00
B-2