1
EXHIBIT 4.4
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INDENTURE
between
THORN APPLE VALLEY, INC.
and
________________________, Trustee
Dated as of April 1, 1997
$[17,500,000]
[_____%] Convertible Subordinated Debentures
Due April 1, 2007
================================================================================
2
CROSS-REFERENCE TABLE
TIA Section Indenture
- ----------- ---------
310 (a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.10
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.10
(a)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N. A.
(a)(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N. A.
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.08;9.101 2.02
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N. A.
311 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.11
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.11
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N. A.
312 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.05
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.03
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.03
313 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.06
(b)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N. A.
(b)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.06
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.02
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.06
314 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.06;12.02
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N. A.
(c)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.04
(c)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.04
(c)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N. A.
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N. A.
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.05
(f) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.05
315 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.01(b)
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.05;11.02
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.01(a)
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.01(c)
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.11
316 (a)(last sentence) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.06
(a)(1)(A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.05
(a)(1)(B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.04
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N. A.
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.07
317(a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.08
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.09
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.04
318(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.01
N.A. means not applicable
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TABLE OF CONTENTS
Page
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ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.02 Incorporation by Reference of Trust Indenture Act . . . . . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 1.03 Rules of Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
ARTICLE 2
THE SECURITIES
SECTION 2.01 Form and Dating . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 2.02 Execution and Authentication . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 2.03 Registrar; Paying Agent and Conversion Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 2.04 Paying Agent to Hold Money in Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 2.05 Securityholder Lists . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 2.06 Transfer and Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 2.07 Replacement Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 2.08 Outstanding Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 2.09 Temporary Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 2.10 Cancellation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 2.11 Defaulted Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
ARTICLE 3
REDEMPTION
SECTION 3.01 Notices to Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 3.02 Selection of Securities to be Redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 3.03 Notice of Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 3.04 Effect of Notice of Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 3.05 Deposit of Redemption Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 3.06 Securities Redeemed in Part . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
ARTICLE 4
CONVERSION OF SECURITIES
SECTION 4.01 Right to Convert; Conversion Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 4.02 Issuance of Shares on Conversion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 4.03 No Adjustment for Interest or Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 4.04 Antidilution Adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 4.05 No Fractional Shares to be Issued . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 4.06 Effect of Consolidation, Merger, Conveyance or Transfer . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 4.07 Notice to Holders Prior to Certain Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 4.08 Company to Reserve Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 4.09 Compliance with Governmental Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 4.10 Taxes on Shares Issued . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 4.11 Responsibility of Trustee for Conversion Provisions . . . . . . . . . . . . . . . . . . . . . . . . . 17
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ARTICLE 5
SUBORDINATION
SECTION 5.01 Agreement to Subordinate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 5.02 No Payment of Securities if Senior Indebtedness in Default . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 5.03 Distribution upon Acceleration of Securities; Dissolution and Reorganization;
Subrogation of' Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 5.04 Reliance by Senior Indebtedness on Subordination Provisions . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 5.05 Other Provisions Subject Hereto . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
ARTICLE 6
COVENANTS
SECTION 6.01 Payment of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 6.02 Corporate Existence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 6.03 Payment of Taxes and Other Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 6.04 Maintenance of Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 6.05 Compliance Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 6.06 SEC Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 6.07 Waiver of Stay, Extension or Usury Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 6.08 Purchase of Securities Upon Repurchase Event . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
ARTICLE 7
SUCCESSOR CORPORATION
SECTION 7.01 When Company May Merge, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
ARTICLE 8
DEFAULTS AND REMEDIES
SECTION 8.01 Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 8.02 Acceleration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 8.03 Other Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 8.04 Waiver of Past Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 8.05 Control by Majority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 8.06 Limitation on Suits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 8.07 Rights of Holders to Receive Payment and to Convert . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 8.08 Collection Suit by Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 8.09 Trustee May File Proof of Claim . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 8.10 Priorities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 8.11 Undertaking for Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
ARTICLE 9
TRUSTEE
SECTION 9.01 Duties of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 9.02 Rights of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 9.03 Individual Rights of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 9.04 Trustee's Disclaimer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 9.05 Notice of Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 9.06 Reports by Trustee to Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 9.07 Compensation and Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
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SECTION 9.08 Replacement of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 9.09 Successor Trustee by Merger, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 9.10 Eligibility; Disqualification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 9.11 Preferential Collection of Claims Against Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
ARTICLE 10
DISCHARGE OF INDENTURE
SECTION 10.01 Termination of Company's Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 10.02 Application of Trust Money . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 10.03 Repayment to Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
ARTICLE 11
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 11.01 Without Consent of Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 11.02 With Consent of Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 11.03 Compliance with TIA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 11.04 Revocation and Effect of Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 11.05 Notation on or Exchange of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
ARTICLE 12
MISCELLANEOUS
SECTION 12.01 Trust Indenture Act Controls . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 12.02 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 12.03 Communication by Holder with Other Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 12.04 Certificate and Opinion as to Conditions Precedent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 12.05 Statements Required in Certificate or Opinion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 12.06 When Treasury Securities Disregarded . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 12.07 Rules by Trustee, Paying Agent, Conversion Agent, Registrar . . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 12.08 Legal Holiday . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 12.09 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 12.10 No Adverse Interpretation of Other Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 12.11 No Recourse Against Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 12.12 Successors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 12.13 Duplicate Originals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
SIGNATURES 38
EXHIBIT A - FORM OF SECURITY A-1
EXHIBIT B - FORM OF CONVERSION NOTICE B-1
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INDENTURE dated as of April 1, 1997, between THORN APPLE VALLEY, INC.,
a Michigan corporation ("Company"), and [BANK], a national banking association
("Trustee").
Each party agrees as follows for the benefit of the other party and
for the equal and ratable benefit of the Holders of the Company's____%
Convertible Subordinated Debentures due April 1, 2007 ("Securities"):
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01 Definitions.
"Bankruptcy Law" shall have the meaning provided in Section 8.01.
"Board of Directors" means the Board of Directors of the Company or
any committee of the Board.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification and delivered to the Trustee.
"Business Day" means a day that is not a Legal Holiday.
"Company" means the party named as such in this Indenture until a
successor replaces it and thereafter means the successor.
"Conversion Agent" shall have the meaning provided in Section 2.03.
"conversion price" shall have the meaning provided in Section 4.01.
"Custodian" shall have the meaning provided in Section 8.01.
"Default" means any event which is, or after notice or passage of time
would be, an Event of Default.
"Exchange Act" means the federal Securities and Exchange Act of 1934,
as amended.
"Event of Default" shall have the meaning provided in Section 8.01.
"Holder" or "Securityholder" means the person in whose name a Security
is registered on the Registrar's books.
"Indenture" means this Indenture as amended or supplemented from time
to time.
7
"Legal Holiday" shall have the meaning provided in Section 12.08.
"Material Subsidiary" means any wholly-owned subsidiary of the Company
the total tangible assets of which equal or exceed 20% of the consolidated
total tangible assets of the Company and its consolidated subsidiaries.
"Nasdaq Stock Market" means the National Market System of the National
Association of Securities Dealers, Inc., Automated Quotations System.
"Officer" means the Chairman of the Board, the President, any Vice
President, the Treasurer, or the Secretary of the Company.
"Officers' Certificate" means a certificate signed by two Officers or
by an Officer and an Assistant Treasurer or Assistant Secretary of the Company.
See Sections 12.04 and 12.05.
"Opinion of Counsel" means a written opinion from legal counsel who is
reasonably acceptable to the Trustee. The counsel may be an employee of or
counsel to the Company or the Trustee. See Sections 12.04 and 12.05.
"Paying Agent" shall have the meaning provided in Section 2.03.
"person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization
or government or other agency or political subdivision thereof
"principal" of a debt security means the principal of the security
plus, when appropriate, the premium, if any, on the security.
"Registrar" shall have the meaning provided in Section 2.03.
"Repurchase Event" means any of the following:
(a) such time as a "person" or "group" (within the
meaning of Sections 13(d) or 14(d)(2) of the Exchange Act) other than
any holder on the date hereof of five percent (5%) or more of the
outstanding Common Stock or any group including such holder, becomes
the "beneficial owner" (as defined in Rule 13d-3 under the Exchange
Act) of more than fifty percent (50%) of the total outstanding voting
stock of the Company; or
(b) such time as a change in the composition of the Board
of Directors of the Company occurs in which those persons who, at the
beginning of the two year period immediately preceding such change in
directors of the Company, constituted the Board of Directors (together
with any other person elected or appointed as a director by a
two-thirds vote of the directors then in office who were directors at
the begining of such two year
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period) cease for any reason to constitute a majority of the Company's
Board of Directors; or
(c) such time as the Company shall have entered into a
definitive agreement providing for the merger or consolidation of the
Company with or into any other Person, or any sale or transfer of
66-2/3% or more of the Company's assets to another Person, other than
(i) a merger that does not result in any reclassification, conversion,
exchange or cancellation of outstanding shares of capital stock of
the Company, (ii) a merger that is done solely to change the
jurisdiction of incorporation of the Company and results in a
reclassification, conversion or exchange of outstanding shares of
Common Stock solely into shares of Common Stock, (iii) a consolidation
with or merger of the Company into a wholly-owned subsidiary of the
Company or any sale or transfer by the Company of 66- 2/3% or more of
its assets to one or more of its wholly-owned subsidiaries; provided,
in any such case, that the resulting corporation or such wholly-owned
subsidiary assumes the Company's obligations under the Securities and
provides for appropriate conversion rights, or (iv) any such
transaction where (y) outstanding voting stock of the Company is
reclassified or changed into or exchanged for voting stock of the
surviving corporation and (z) no Person or "group," other than any
holder on the date hereof of five percent (5%) or more of the
outstanding Common Stock or any group including such holder, is or
becomes the "beneficial owner" of more than fifty percent (50%) of the
voting stock of the surviving corporation immediately after such
transaction; or
(d) either (i) the distribution by the Company, directly
or indirectly, of cash, securities or other property in respect of its
capital stock (other than a distribution paid solely in capital stock
or rights to acquired capital stock), or (ii) the purchase or other
acquisition by the Company, directly or indirectly, of any capital
stock (other than an acquisition of capital stock solely in exchange
for or upon conversion of capital stock or rights to acquire capital
stock), if the sum of the Applicable Equity Percentages (as defined
below) for such distribution or acquisition and all other such
distributions and acquisitions effected after the date of original
issue of the Securities and during the 12-month period ending on the
date on which such distribution or acquisition is effected exceeds
thirty percent (30%).
For purposes of this definition, "Applicable Equity Percentage" means, for any
distribution or acquisition, the percentage obtained by dividing (A) the fair
market value on the Valuation Date (as defined below) of the cash, securities
and other property distributed in respect of, or paid or otherwise exchanged to
acquire, capital stock in such distribution or acquisition, by (B) the fair
market value on the Reference Date (as defined below) of the capital stock
outstanding on the Reference Date; and "Valuation Date" means (A) for any
distribution, the record date therefor or (B) for any acquisition, the date
thereof; "Reference Date" means (A) for any distribution, the day before the
earlier of the record date for such distribution or the first date on which the
capital stock trades without the right to receive such distribution or (B) for
any acquisition, the day before the date of such acquisition.
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"Responsible Officer" means any officer of the Trustee assigned by the
Trustee to administer its corporate trust matters.
"Sale Event" means either of the following:
(a) such time as a "person" or "group" (within the
meaning of Sections 13(d) or 14(d)(2) of the Exchange Act) other than
any holder on the date hereof of five percent (5%) or more of the
outstanding Common Stock or any group including such holder, becomes
the "beneficial owner" (as defined in Rule 13d-3 under the Exchange
Act) of more than fifty percent (50%) of the total outstanding voting
stock of the Company; or
(b) such time as the Company shall have entered into a
definitive agreement providing for the merger or consolidation of
the Company with or into any other Person, or any sale or transfer of
66-2/3% or more of the Company's assets to another Person, other than
(i) a merger that does not result in any reclassification, conversion,
exchange or cancellation of outstanding shares of capital stock of the
Company, (ii) a merger that is done solely to change the jurisdiction
of incorporation of the Company and results in a reclassification,
conversion or exchange of outstanding shares of Common Stock solely
into shares of Common Stock, (iii) a consolidation with or merger of
the Company into a wholly-owned subsidiary of the Company or any sale
or transfer by the Company of 66- 2/3% or more of its assets to one or
more of its wholly-owned subsidiaries; provided, in any such case,
that the resulting corporation or such wholly-owned subsidiary assumes
the Company's obligations under the Securities and provides for
appropriate conversion rights, or (iv) any such transaction where (y)
outstanding voting stock of the Company is reclassified or changed
into or exchanged for voting stock of the surviving corporation and
(z) no Person or "group," other than any holder on the date hereof of
five percent (5%) or more of the outstanding Common Stock or any group
including such holder, is or becomes the "beneficial owner" of more
than fifty percent (50%) of the voting stock of the surviving
corporation immediately after such transaction.
"SEC" means the Securities and Exchange Commission.
"Securities" means the securities as amended or supplemented from time
to time that are authenticated and issued under this Indenture.
"Senior Indebtedness" shall have the meaning provided in Section 5.01.
"Shares" means the shares of common stock, par value $0.10 per share,
of the Company, as the same existed on the date of execution of this Indenture.
"Subsidiary" means (i) any corporation of which at least a majority in
interest of the outstanding stock having by the terms thereof voting power
under ordinary circumstances to elect a majority of the directors of such
corporation, irrespective of whether or not at the time stock of any
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other class or classes of such corporation shall have or might have voting power
by reason of the happening of any contingency, is at the time, directly
or indirectly, owned or controlled by the Company, or by one or more other
corporations a majority in interest of such stock of which is similarly owned or
controlled, or by the Company and one or more other corporations a majority in
interest of such stock of which is similarly owned or controlled and (ii) any
person (other than a corporation) in which the Company or any Subsidiary,
directly or indirectly, has at least a 50% ownership interest.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code, Sections
77aaa-77bbbb) as in effect on the date of this Indenture.
"Trustee" means the party named as such in this Indenture until a
successor replaces it and thereafter means the successor.
SECTION 1.02 Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meaning:
"Commission" means the SEC.
"indenture securities" means the Securities.
"indenture security holder" means a Securityholder or Holder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor on the indenture securities" means the Company
All other TIA terms used in this Indenture. that are defined by the
TIA, defined by TIA reference to another statute or defined by SEC rule have
the meanings assigned to them.
SECTION 1.03 Rules of Construction. Unless the context otherwise
requires:
(1) a term has the meaning assigned to it,
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with generally accepted
accounting principles;
(3) "or" is not exclusive; and
(4) words in the singular include the plural, and the plural
include the singular.
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ARTICLE 2
THE SECURITIES
SECTION 2.01 Form and Dating. The Securities and the Trustee's
certificate of authentication shall be substantially in the form of Exhibit A.
The Securities may have notations, legends or endorsements required by law,
stock exchange rule or usage. The Company shall approve the form of the
Securities and any notation, legend or endorsement on them. Each Security
shall be dated the date of its authentication.
SECTION 2.02 Execution and Authentication. Two Officers shall
sign the Securities for the Company by facsimile signature. The Company's seal
shall be reproduced on the Securities.
If an Officer whose signature is on a Security no longer holds that
office at the time the Trustee authenticates the Security, the Security shall
be valid nevertheless.
A Security shall not be valid until the Trustee manually signs the
certificate of authentication on the Security. The signature shall be
conclusive evidence that the Security has been authenticated under this
Indenture.
The Trustee shall authenticate Securities for original issue in the
aggregate principal amount of $[17,500,000] upon a written order of the Company
signed by two Officers or by an Officer and an Assistant Treasurer of the
Company. The aggregate principal amount of Securities outstanding at any time
may not exceed $[17,500,000], except as provided in Section 2.07.
SECTION 2.03 Registrar; Paying Agent and Conversion Agent. The
Company shall maintain an office or agency where Securities may be presented
for registration of transfer or for exchange ("Registrar"), an office or agency
where Securities may be presented for payment ("Paying Agent") and an office or
agency where Securities may be surrendered for conversion ("Conversion Agent").
The Registrar shall keep a register of the Securities and of their transfer and
exchange. The Company may have one or more co-registrars, one or more
additional paying agents and one or more additional conversion agents. The
term "Paying Agent" includes any additional paying agent and the term
"Conversion Agent" includes any additional conversion agent.
The Company shall enter into an appropriate agency agreement with any
Registrar, Paying Agent, Conversion Agent or co-registrar not a party to this
Indenture. The agreement shall implement the provisions of this Indenture that
relate to such agent. The Company shall notify the Trustee of the name and
address of any such agent. If the Company fails to maintain a Registrar,
Paying Agent or Conversion Agent, the Trustee shall act as such.
The Company initially appoints the Trustee as Registrar, Paying Agent
and Conversion Agent.
SECTION 2.04 Paying Agent to Hold Money in Trust. Each Paying
Agent shall hold in trust for the benefit of Securityholders or the Trustee all
money held by the Paying Agent for the
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payment of principal or interest on the Securities, and shall notify the
Trustee of any default by the Company in making any such payment. If the
Company or a Subsidiary acts as Paying Agent, it shall segregate the money and
hold it as a separate trust fund. The Company at any time may require a Paying
Agent to pay all money held by it to the Trustee. Upon doing so the Paying
Agent shall have no further liability for the money.
SECTION 2.05 Securityholder Lists. The Trustee shall preserve in
as current a form as is reasonably practicable the most recent list available
to it of the names and addresses of Securityholders. If the Trustee is not the
Registrar, the Company shall furnish to the Trustee on or before each
semiannual interest payment date and at such other times as the Trustee may
request in writing a list, in such form and as of such date as the Trustee may
reasonably require, of the names and addresses of Securityholders.
SECTION 2.06 Transfer and Exchange. Where a Security is presented
to the Registrar or a co-registrar with a request to register the transfer, the
Registrar shall register the transfer as requested if the requirements of
Section 8-401(l) of the Uniform Commercial Code are met. Where Securities are
presented to the Registrar or a co-registrar with a request to exchange them
for an equal principal amount of Securities of other denominations, the
Registrar shall make the exchange as requested if the same requirements are
met. To permit transfers and exchanges, the Trustee shall authenticate
Securities at the Registrar's request. The Securities may be transferred or
exchanged without charge, however the Company may require payment of a sum
sufficient to pay any taxes or governmental charges assessed with respect to a
transfer or exchange of the Securities.
SECTION 2.07 Replacement Securities. If the Holder of a Security
claims that the Security has been lost, destroyed or wrongfully taken, the
Company shall issue and the Trustee shall authenticate a replacement Security
if the requirements of Section 8-405 of the Uniform Commercial Code are met.
An indemnity bond must be sufficient in the judgment of the Company and the
Trustee to protect the Company, the Trustee, the Paying Agent, the Conversion
Agent, the Registrar or any co-registrar from any loss which any of them may
suffer if a Security is replaced. The Company may charge for its expenses in
replacing a Security.
SECTION 2.08 Outstanding Securities. Securities outstanding at
any time are all Securities authenticated by the Trustee except for those
canceled by it and those described in this Section. A Security does not cease
to be outstanding because the Company or one of its affiliates holds the
Security.
If a Security is replaced pursuant to Section 2.07, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Security is held by a bona fide purchaser.
If the Paying Agent holds on a redemption date or maturity date money
sufficient to pay Securities payable on that date, then on and after that date
such Securities cease to be outstanding and interest on them ceases to accrue.
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SECTION 2.09 Temporary Securities. Until definitive Securities
are ready for delivery, the Company may prepare and the Trustee shall
authenticate temporary Securities. Temporary Securities shall be substantially
in the form of definitive Securities but may have variations that the Company
considers appropriate for temporary Securities. Without unreasonable delay,
the Company shall prepare, and the Trustee shall authenticate, definitive
Securities in exchange for temporary Securities.
SECTION 2.10 Cancellation. The Company at any time may deliver
Securities to the Trustee for cancellation. The Registrar, the Paying Agent
and the Conversion Agent shall forward to the Trustee any Securities
surrendered to them for transfer, exchange, payment or conversion. The Trustee
and no one else shall cancel and destroy all Securities surrendered for
transfer, exchange, payment, conversion or cancellation. The Company may not
issue new Securities to replace Securities it has paid or delivered to the
Trustee for cancellation.
SECTION 2.11 Defaulted Interest. If the Company defaults in a
payment of interest on the Securities, it shall pay the defaulted interest to
the persons who are Securityholders on a subsequent special record date. The
Company shall fix the record date and payment date. At least 15 days before
the record date, the Company shall mail to each Securityholder a notice that
states the record date, the payment date and the amount of defaulted interest
to be paid. The Company may pay defaulted interest in any other lawful manner.
ARTICLE 3
REDEMPTION
SECTION 3.01 Notices to Trustee. If the Company wants to redeem
Securities pursuant to paragraph 5 of the Securities, it shall notify the
Trustee of the redemption date and the principal amount of Securities to be
redeemed.
If the Company wants to reduce the principal amount of Securities to
be redeemed pursuant to paragraph 6 of the Securities, it shall notify the
Trustee of the amount of the reduction and the basis for it. If the Company
wants to credit against any such redemption Securities it has not previously
delivered to the Trustee for cancellation, it shall deliver the Securities with
the notice.
The Company shall give each notice provided for in this Section at
least 30 days before the redemption date.
SECTION 3.02 Selection of Securities to be Redeemed. If less than
all the Securities are to be redeemed, the Trustee shall select the Securities
to be redeemed either pro rata or by lot. The Trustee shall make the selection
from Securities outstanding not previously called for redemption. Securities
in denominations of $1,000 may only be redeemed in whole. The Trustee may
select for redemption portions (equal to $1,000 or any integral multiple
thereof) of the principal
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of Securities that have denominations larger than $1,000. Provisions of this
Indenture that apply to Securities called for redemption also apply to portions
of Securities called for redemption.
If any Security selected for partial redemption is converted in part
before termination of the conversion right with respect to the portion of the
Security so selected, the converted portion of such Security shall be deemed
(so far as may be) to be the portion selected for redemption. Securities which
have been converted during a selection of Securities to be redeemed shall be
treated as outstanding for the purpose of such selection.
SECTION 3.03 Notice of Redemption. At least 30 days but not more
than 60 days before a redemption date, the Company shall mail a notice of
redemption by first-class mail to each Holder of Securities to be redeemed.
The notice shall identify the Securities to be redeemed and shall
state:
(1) the redemption date;
(2) the redemption price,
(3) the name and address of the Paying Agent;
(4) the conversion price, the date on which the right to convert
the principal of the Securities or the portions thereof to be
redeemed will terminate and the place or places where such
securities may be surrendered for conversion,
(5) in the event that any Security is to be redeemed in part only,
the portion of the principal amount thereof to be redeemed and
that on and after the redemption date, upon surrender of such
Security, a new Security or Securities in principal amount
equal to the unredeemed portion thereof will be issued;
(6) that Securities called for redemption must be surrendered to
the Paying Agent to collect the redemption price; and
(7) that interest on Securities called for redemption ceases to
accrue on and after the redemption date.
At the Company's request, the Trustee shall give the notice of redemption in
the Company's name and at its expense.
SECTION 3.04 Effect of Notice of Redemption. Once notice of
redemption is mailed, Securities called for redemption become due and payable
on the redemption date and at the redemption price. Upon surrender to the
Paying Agent, such Securities shall be paid at the redemption price, plus
accrued interest to the redemption date.
SECTION 3.05 Deposit of Redemption Price. On or before the
redemption date, the Company shall deposit with the Paying Agent money
sufficient to pay the redemption price of, and accrued interest on, all
Securities to be redeemed on that date other than any Securities or portions
thereof called for redemption on that date which have been converted pursuant
to Article 4 on or prior to the date of such deposit.
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SECTION 3.06 Securities Redeemed in Part. Upon surrender of a
Security that is redeemed in part, the Trustee shall authenticate for the
Holder a new Security equal in principal amount to the unredeemed portion of
the Security surrendered.
ARTICLE 4
CONVERSION OF SECURITIES
SECTION 4.01 Right to Convert; Conversion Price. Subject to and
upon compliance with the provisions of this Article, at the option of a Holder,
any Security in the principal amount of $1,000 or an integral multiple of
$1,000, at any time at or before the close of business on April 1, 2007, or in
case such Security or a portion thereof has called for redemption prior to
April 1, 2007, then until and including the close of business on the redemption
date, may be converted into duly authorized, validly issued, fully paid and
nonassessable Shares at the initial conversion price of $_____ per Share, or,
in case an adjustment in the conversion price has taken place pursuant to the
provisions of Section 4.04, then at the applicable conversion price as so
adjusted, upon surrender of the Security to be converted at any time during
usual business hours at the office or agency of the Conversion Agent,
accompanied by written notice substantially in the form set forth as Exhibit B.
The initial conversion price specified in this Section 4.01, as adjusted from
time to time pursuant to the provisions of this Article 4, is referred to as
the "conversion price".
SECTION 4.02 Issuance of Shares on Conversion. As promptly as
practicable after the surrender of any Security for conversion, the Company
shall deliver or cause to be delivered, at the office or agency of the
Conversion Agent, to or upon the written order of the Holder of the Security so
surrendered a certificate or certificates representing the number of duly
authorized, validly issued, fully paid and non- assessable Shares into which
such Security may be converted in accordance with the provisions of this
Article. Such conversion shall be deemed to have been made at the time that
such Security has been surrendered for conversion and the notice required by
Section 4.01 has been received by the Company at the office or agency of the
Conversion Agent. The rights of the Holder of such Security, as a Holder,
shall cease at such time and the person or persons entitled to receive Shares
upon conversion of such Security shall be treated for all purposes as having
become the record holder or holders of such Shares at such time and such
conversion shall be at the conversion price in effect at such time. In the
case of any Security which is converted in part only, upon conversion the
Company shall execute and the Trustee shall authenticate and deliver to the
Holder, without any service charge, a new Security, of any authorized
denomination or denominations requested by the Holder in aggregate principal
amount equal to the unconverted portion of the principal amount of such
Security.
SECTION 4.03 No Adjustment for Interest or Dividends. Subject to
paragraphs 2 and 9 of the Securities and Section 4.04 hereof, no payment or
adjustment shall be made on conversion of any Security for interest accrued
thereon or for dividends on Shares issued upon conversion of Securities.
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SECTION 4.04 Antidilution Adjustments. The conversion price in
effect at any time shall be subject to adjustment as follows:
A. In case the Company shall (i) declare a dividend on
its Shares payable in shares of its capital stock, (ii) subdivide its
outstanding Shares, (iii) combine its outstanding Shares into a
smaller number of shares, or (iv) issue any shares of capital stock by
reclassification of its Shares (including any such reclassification in
connection with a consolidation or merger in which the Company is the
continuing person), the conversion price in effect at the time of the
record date for such dividend or of the effective date of such
subdivision, combination or reclassification shall be proportionately
adjusted so that the Holder of any Security surrendered for conversion
after such time shall be entitled to receive the aggregate number of
Shares or other securities of the Company which he would have owned or
have been entitled to receive after the happening of any of the events
described above, had such Security been converted immediately prior to
the happening of such event (or the record date therefor). Such
adjustment shall be made successively whenever any event listed above
shall occur.
B. In case the Company shall fix a record date for the
issuance of rights or warrants to the holders of its Shares entitling
them (for a period expiring within 45 days after such record date) to
subscribe for or purchase Shares or securities convertible into Shares
at a price per Share (or having an initial conversion price per share)
less than the current market price per Share (as defined in Paragraph
G below) on such record date, the conversion price shall be adjusted
so that the same shall equal the price determined by multiplying the
conversion price in effect immediately prior to such record date by a
fraction, of which the numerator shall be the number of Shares
outstanding on such record date plus the number of additional Shares
which the aggregate offering price of the total number of Shares so
offered (or the aggregate initial conversion price of the convertible
securities so offered) would purchase at such current market price per
Share, and of which the denominator shall be the number of Shares
outstanding on such record date plus the number of Shares offered for
subscription or purchase (or into which the convertible securities so
offered are initially convertible). Such adjustment shall be made
successively whenever such a record date is fixed; and in the event
that such rights or warrants are not so issued, the conversion price
shall again be adjusted to be the conversion price which would then be
in effect if such record date had not been fixed, but such subsequent
adjustment shall not affect the number of Shares issued upon any
conversion prior to the date such adjustment is made.
C. In case the Company shall fix a record date for the
making of a distribution to the holders of its Shares (including any
such distribution made in connection with a consolidation or merger in
which the Company is the continuing person) of evidences of its
indebtedness or assets (other than cash dividends out of retained
earnings) or subscription rights or warrants (excluding those referred
to in Paragraph B above), then in each such case the conversion price
in effect after such record date shall be determined by multiplying
the conversion price in effect immediately prior to such record date
by a fraction, of which the
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numerator shall be the current market price per Share (as defined in
Paragraph G below) as of such record date less the fair market value
as of such record date (as determined by the Board of Directors, whose
determination shall be conclusive and described in a Board resolution
filed with the Trustee and each Conversion Agent) of the portion
applicable to one Share of the assets or evidences of indebtedness or
subscription rights or warrants so to be distributed, and of which the
denominator shall be such current market price per Share. Such
adjustment shall be made successively whenever such a record date is
fixed; and in the event that such distribution is not made, the
conversion price shall again be adjusted to be the conversion price
which would be in effect if such record date had not been fixed; but
such subsequent adjustment shall not affect the number of Shares
issued upon any conversion prior to the date such adjustment is made.
D. In case the Company shall issue Shares for a
consideration per share less than the current market price per Share
(as defined in Paragraph G below) on the date the Company fixes the
offering price for such additional Shares (excluding Shares issued (i)
in any of the of such transactions described in Paragraph A above,
(ii) upon conversion of Securities, or upon conversion or exchange of
other securities issued after the date hereof, convertible into or
exchangeable for Shares, (iii) upon exercise of options or rights
previously granted or granted hereafter pursuant to employee benefit
or stock option plans in effect at the effective date of this
Indenture or pursuant to employee benefit or stock option plans
hereafter approved by the holders of Shares, (iv) upon exercise of
rights or warrants issued to the holders of Shares, (v) to
shareholders of any corporation which merges into the Company in an
arm's- length transaction between the Company and one or more
unaffiliated third parties in proportion to their stock holdings of
such corporation immediately prior to such merger, upon such merger,
or (vi) in a bona fide public offering pursuant to a firm commitment
underwriting), the conversion price shall be adjusted immediately
after the issuance of such additional Shares so that it shall equal
the price determined by multiplying the conversion price in effect
immediately prior thereto by a fraction, of which the numerator shall
be the total number of shares outstanding immediately prior to the
issuance of such additional shares plus the number of shares which the
aggregate consideration received (determined as provided in Paragraph
F below) for the issuance of such additional Shares would purchase at
such current market price per Share, and of which the denominator
shall be the number of Shares outstanding immediately after the
issuance of such additional Shares. Such adjustment shall be made
successively whenever such an issuance is made.
E. In case the Company shall issue any securities
convertible into or exchangeable for Shares for a consideration per
Share initially deliverable upon conversion or exchange of such
securities (determined as provided in Paragraph F below) less than the
current market price per Share (as defined in Paragraph G below) in
effect immediately prior to the issuance of such securities (excluding
securities issued in transactions described in Paragraphs A, B and C
above) or issued in transactions excluded from the provisions of
Paragraph D above, the conversion price shall be adjusted immediately
thereafter so that it
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shall equal the price determined by multiplying the conversion price
in effect immediately prior thereto by a fraction, of which the
numerator shall be the number of Shares outstanding immediately prior
to the issuance of such securities plus the number of Shares which the
aggregate consideration received (determined as provided in Paragraph
F below) from the issuance of such securities would purchase at such
current market price per Share, and of which the denominator shall be
the number of Shares outstanding immediately prior to such issuance
plus the maximum number of Shares deliverable upon conversion of or in
exchange for such securities at the initial conversion or exchange
price or rate. Such adjustment shall be made successively whenever
such an issuance is made.
F. For purposes of any computation respecting
consideration received pursuant to Paragraphs D and E above, the
following shall apply:
(i) in the case of the issuance of Shares for
cash, the consideration shall be the amount of such cash,
provided that in no case shall any deduction be made for any
commissions, discounts or other expenses incurred by the
Company for any underwriting of the issue or otherwise in
connection therewith;
(ii) in the case of the issuance of Shares for a
consideration in whole or in part other than cash, the
consideration other than cash shall be deemed to be the fair
market value thereof as determined in good faith by the Board
of Directors of the Company (irrespective of the accounting
treatment thereof), whose determination shall be conclusive
and described in a Board Resolution; and
(iii) in the case of the issuance of securities
convertible into or exchangeable for Shares, the aggregate
consideration received from the issuance of such Securities
shall be deemed to be the consideration received by the
Company for the issuance of such securities plus the
additional minimum consideration, if any, to be received by
the Company upon conversion or exchange thereof (the
consideration in each case to be determined in the same manner
as provided in clauses (i) and (ii) of this Paragraph F).
G. For the purposes of any computation under Paragraphs
B, C, D and E above and under Section 4.05, the current market price
per Share on any record date shall be deemed to be the average of the
daily closing prices for 20 consecutive Business Days commencing on
the 30th Business Day before such date. The closing price for each
day shall be the last sale price regular way or, in case no such sale
takes place on such day, the average of the closing bid and asked
prices regular way, in either case on the New York Stock Exchange, or,
if the Shares are not listed or admitted to trading on such Exchange,
on the principal national securities exchange on which the Shares are
listed or admitted to trading, or if the Shares are not listed or
admitted to trading on any national securities exchange, the average
of the closing bid and asked prices of the Shares on Nasdaq Stock
Market or any comparable system, or if the Shares are not listed on
Nasdaq Stock Market or a comparable
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system, the closing bid and asked prices as furnished by any member of
the National Association of Securities Dealers, Inc., selected from
time to time by the Company for that purpose.
H. No adjustment in the conversion price shall be
required unless such adjustment would require an increase or decrease
of at least twenty-five cents ($0.25) in such price; provided,
however, that any adjustments which by reason of this Paragraph H are
not required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations under this
Article 4 shall be made to the nearest cent or to the nearest
one-thousandth of a Share, as the case may be. Anything in this
Section to the contrary notwithstanding, the Company shall be entitled
to make such reductions in the Conversion Price, in addition to those
required by this Section, as it in its discretion shall determine to
be advisable in order that any stock dividends, subdivision of shares,
distribution of rights to purchase stock or securities, or a
distribution of securities convertible into or exchangeable for stock
hereafter made by the Company to its shareholders shall not be
taxable.
I. Whenever the conversion price is adjusted, as herein
provided, the Company shall promptly file with the Trustee and with
the Conversion Agent a certificate of a firm of independent public
accountants selected by the Board of Directors (who may be the regular
accountants employed by the Company) setting forth the conversion
price after such adjustment and setting forth a brief statement of the
facts requiring such adjustment and a computation thereof. Such
certificate shall be conclusive evidence of the correctness of such
adjustment. Neither the Trustee nor any Conversion Agent shall be
under any duty or responsibility with respect to any such certificate
or any facts set forth therein except to exhibit said certificate from
time to time to any Holder desiring to inspect the same. The Company
shall promptly cause a notice setting forth the adjusted conversion
price to be mailed to the Holders, at their last addresses appearing
in the register of Securities.
J. In the event that at any time, as a result of an
adjustment made pursuant to Paragraph A above, the Holder of any
Security thereafter surrendered for conversion shall become entitled
to receive any shares of the Company other than Shares, thereafter the
number of such other shares so receivable upon conversion of any
Security shall be subject to adjustment from time to time in a manner
and on terms as nearly equivalent as practicable to the provisions
with respect to the Shares contained in Paragraphs A to I, inclusive,
above, and the provisions of Section 4.02 and 4.05 to 4.10, inclusive,
with respect to the Shares shall apply on like terms to any such other
shares.
SECTION 4.05 No Fractional Shares to be Issued. No fractional
Shares shall be issued upon conversion of Securities. If more than one
Security shall be surrendered for conversion at one time by the same Holder,
the number of full Shares which shall be issuable upon conversion thereof shall
be computed on the basis of the aggregate principal amount of the Securities
(or specified portions thereof to the extent permitted hereby) so surrendered.
In lieu of issuing any
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fractional Share, the Company shall pay a cash adjustment in respect of such
fractional interest in an amount equal to the same fraction of the current
market price of a Share (determined as provided in Paragraph G of Section 4.04)
on the day of conversion.
SECTION 4.06 Effect of Consolidation, Merger, Conveyance or
Transfer. In case of any reclassification (excluding those referred to in
Paragraph A of Section 4.04), in case of any consolidation of the Company with,
or merger of the Company into, any other person (other than a consolidation or
merger in which the Company is the continuing person), or in case of any
conveyance or transfer of the property and assets of the Company substantially
as an entirety, the person formed by such reclassification or consolidation or
into which the Company shall have been merged or the person which shall have
acquired by conveyance or transfer such property and assets, as the case may
be, shall execute and deliver to the Trustee a supplemental indenture providing
that the Holder of each Security then outstanding shall have, in lieu of the
right to convert such Security into Shares, the right thereafter to convert
such Security into the kind and amount of shares of stock and other securities
and property receivable upon such reclassification, consolidation, merger,
conveyance or transfer by a holder of the number and kind of Shares into which
such Security might have been converted immediately prior to such
reclassification, consolidation, merger, conveyance or transfer. Such
supplemental indenture shall conform to the provisions of the TIA as then in
effect and shall provide for adjustments which shall be as nearly equivalent as
may be practicable to the adjustments provided for in this Article. Neither
the Trustee nor any Conversion Agent shall be under any responsibility to
determine the correctness of any provision contained in any such supplemental
indenture relating either to the kind or amount of shares of stock or other
securities or property receivable by Holders upon the conversion of their
Securities after any such reclassification, consolidation, merger, conveyance,
or transfer, or to any adjustment to be made with respect thereto and, 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, an
Opinion of Counsel with respect thereto. The above provisions of this Section
shall similarly apply to successive reclassifications, consolidations, mergers,
conveyances or transfers.
SECTION 4.07 Notice to Holders Prior to Certain Actions. In case:
(a) the Company shall authorize the issuance to all
holders of Shares of rights or warrants to subscribe for or purchase
Shares or securities convertible into Shares or of any other
subscription rights or warrants; or
(b) the Company shall authorize the distribution to all
holders of Shares of evidences of its indebtedness or assets (other
than cash dividends out of earned surplus); or
(c) of any consolidation or merger to which the Company
is a party and for which approval of any shareholders of the Company
is required, or of the conveyance or transfer of the properties and
assets of the Company substantially as an entirety; or
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(d) of the voluntary or involuntary dissolution,
liquidation or winding up of the Company; or
(e) the Company proposes to take any action (other than
actions of the character described in Paragraph A of Section 4.04)
which would require an adjustment of the conversion price pursuant to
Section 4.04;
then the Company shall cause to be filed with the Trustee and the Conversion
Agent, and shall cause to be mailed to the Holders, at their last addresses
appearing in the register of Securities, at least 20 days (or 10 days in any
case specified in clause (a) or (b) above) prior to the applicable record date
hereinafter specified, a notice stating (i) the date as of which the holders of
Shares of record to be entitled to receive any such rights, warrants or
distribution are expected to be determined, or (ii) the date on which any such
reclassification, consolidation, merger, conveyance, transfer, dissolution,
liquidation or winding up is expected to become effective, and the date as of
which it is expected that holders of Shares of record shall be entitled to
exchange their Shares for securities or other property, if any, deliverable
upon such reclassification, consolidation, merger, conveyance, transfer,
dissolution, liquidation or winding up. The failure to give the notice
required by this Section or any defect therein shall not affect the legality or
validity of any distribution, right, warrant, reclassification, consolidation,
merger, conveyance, transfer, dissolution, liquidation or winding up, or the
vote upon any such action.
SECTION 4.08 Company to Reserve Shares. The Company covenants
that it will at all times reserve and keep available out of its authorized
Shares, free from preemptive rights, solely for the purpose of issue upon
conversion of Securities as herein provided, such number of Shares as shall
then be issuable upon the conversion of all outstanding Securities. The
Company covenants that all Shares which shall be so issuable shall, when
issued, be duly and validly issued and fully paid and nonassessable.
The Company covenants that, upon conversion of Securities as herein
provided, there will be credited to the capital account with respect to the
Shares from the consideration for which the Shares issuable upon such
conversion are issued an amount per Share so issued as determined by the Board
of Directors, which amount shall not be less than the amount required by law
and by the Company's articles of incorporation, as amended, as in effect on the
date of such conversion. For the purposes of this covenant the principal
amount of the Securities converted, less the amount of cash paid in lieu of the
issuance of fractional shares on such conversion, shall be deemed to be the
amount of consideration for which the Shares issuable upon such conversion are
issued.
SECTION 4.09 Compliance with Governmental Requirements. The
Company covenants that if any Shares required to be reserved for purposes of
conversion of Securities hereunder require registration with or approval of any
governmental authority under any federal or state law, or any national
securities exchange, before such Shares may be issued upon conversion, the
Company will in good faith and as expeditiously as possible endeavor to cause
such Shares to be duly registered or approved, as the case may be.
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SECTION 4.10 Taxes on Shares Issued. The issuance of certificates
for Shares upon the conversion of Securities shall be made without charge to
the converting Holders for any tax in respect of the issuance of such
certificates, and such certificates shall be issued in the respective names of,
or in such names as may be directed by, the Holders of the Securities
converted; provided, however, that the Company shall not be required to pay any
tax which may be payable in respect of any transfer involved in the issuance
and delivery of any such certificate in a name other than that of the Holder of
the Security converted, and the Company shall not be required to issue or
deliver such certificates unless or until the person or persons requesting the
issuance thereof shall have paid to the Company the amount of such tax or shall
have established to the satisfaction of the Company that such tax has been
paid.
SECTION 4.11 Responsibility of Trustee for Conversion Provisions.
The Trustee and any Conversion Agent shall not at any time be under any duty or
responsibility to any Holder to determine whether any facts exist which may
require any adjustment of the conversion price, or with respect to the nature
or extent of any such adjustment when made, or with respect to the method
employed, or herein or in any supplemental indenture provided to be employed,
in making the same. Neither the Trustee nor any Conversion Agent shall be
accountable with respect to the validity or value (or the kind or amount) of
any Shares, or of any other securities or property, which may at any time be
issued or delivered upon the conversion of any Security; and it or they do not
make any representation with respect thereto. Neither the Trustee nor any
Conversion Agent shall be responsible for any failure of the Company to make
any cash payment or to issue, transfer or deliver any Shares or certificates
therefor or other securities or property upon the surrender of any Security for
the purpose of conversion, and the Trustee, subject to the provisions of
Section 9.01, and any Conversion Agent shall not be responsible for any failure
of the Company to comply with any of the covenants of the Company contained in
this Article.
ARTICLE 5
SUBORDINATION
SECTION 5.01 Agreement to Subordinate. The Company, for itself
and its successors, and each Holder, by his acceptance of Securities, agrees
that the payment of the principal of, interest on or any other amounts due on
the Securities is subordinated in right of payment, to the extent and in the
manner stated in this Article 5, to the prior payment in full of all Senior
Indebtedness. Each Holder by his acceptance of the Securities authorizes and
directs the Trustee in his behalf to take such action as may be necessary or
appropriate to effectuate, as between the holders of Senior Indebtedness and
such Holder, the subordination provided in this Article 5 and appoints the
Trustee his attorney-in-fact for such purpose. If the Trustee does not file a
proper claim or proof of debt in the form required in any voluntary or
involuntary dissolution, winding up, liquidation, reorganization, arrangement
or similar proceedings relating to the Company prior to 30 days before the
expiration of time to file such claim or claims, then any holder or holders of
Senior Indebtedness or their representative or representatives are hereby
authorized to and have the right to file an appropriate claim for and on behalf
of the Securityholders.
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For purposes of this Article 5, "Senior Indebtedness" means the
principal of, interest on and other amounts due on any indebtedness (other than
the Securities), whether outstanding on the date of this Indenture or
thereafter created, incurred, assumed or guaranteed by the Company for money
borrowed from others (including, for this purpose, all obligations incurred
under capitalized leases or purchase money mortgages) or in connection with the
acquisition by it or a Subsidiary of any other business or entity, and, in each
case, all renewals, extensions and refundings thereof, unless the terms of the
instrument creating or such expressly provide that such indebtedness is not
superior in right of payment to the payment of principal of and interest on the
Securities. Notwithstanding anything to the contrary in the foregoing, Senior
Indebtedness shall not include (a) indebtedness of or amounts owed by the
Company for compensation to employees, or for goods or materials purchased in
the ordinary course of business, or for services, and (b) indebtedness of the
Company to a Subsidiary for money borrowed or advances from such Subsidiary.
For purposes hereof, a "capitalized lease" shall be deemed to mean a lease of
real or personal property which, in accordance with generally accepted
accounting principles, has been capitalized.
SECTION 5.02 No Payment of Securities if Senior Indebtedness in
Default. Anything in this Indenture to the contrary notwithstanding, no
payment on account of principal of, mandatory redemption of, interest on or
other amounts due on the Securities, and no redemption, purchase, or other
acquisition of the Securities, shall be made by or on behalf of the Company --
(i) unless full payment of amounts when due for
principal, sinking funds and interest and of all other amounts then
due on all Senior Indebtedness has been made or duly provided for
pursuant to the terms of the instrument governing such Senior
Indebtedness,
(ii) if, at the time of such payment, redemption, purchase
or other acquisition, or immediately after giving effect thereto,
there shall exist under any Senior Indebtedness, or any agreement
pursuant to which any such Senior Indebtedness is issued, any default,
which default shall not have been cured or waived and which default
shall have resulted in the full amount of such Senior Indebtedness
being declared due and payable, or
(iii) if, at the time of such payment, redemption, purchase
or other acquisition, or immediately after giving effect thereto,
there shall exist under any Senior Indebtedness, or any agreement
pursuant to which such Senior Indebtedness is issued, any default,
which default shall not have been cured or waived, permitting the
holders thereof to declare the full amount of such Senior Indebtedness
due and payable, upon written notice of such default given to the
Company and the Trustee by the holder or holders of such Senior
Indebtedness or their representative or representatives, provided,
however, that if such Senior Indebtedness shall not have been declared
due and payable within a period of 270 days after the date of the
written notice hereinabove referred to, payments on account of
principal of, mandatory redemption of or interest on the Securities
(other than amounts due and payable by reason of the acceleration of
the maturity of the Securities) and redemptions, purchases or other
acquisitions may be made by or on behalf of the Company, and provided,
further, that the failure to give notice as herein provided shall not
constitute a waiver of the rights of such
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holder or holders of Senior Indebtedness hereunder and such period of
270 days shall commence upon the giving of such notice.
The provisions of this Section 5.02 shall not prevent a mandatory redemption
payment in respect of Securities made in Securities properly acquired prior to
the happening of such default.
In the event that notwithstanding the provisions of this Section 5.02,
payments are made by or on behalf of the Company in contravention of the
provisions of this Section 5.02, such payments shall be held by the Trustee,
any Paying Agent or the Securityholders, as applicable, in trust for the
benefit of, and shall be paid over to and delivered to, the holders of Senior
Indebtedness or their representative or the trustee under the indenture or
other agreement (if any), pursuant to which any instruments evidencing any
Senior Indebtedness may have been issued, as their respective interests may
appear, for application to the payment of all Senior Indebtedness remaining
unpaid to the extent necessary to pay all Senior Indebtedness in full
accordance with the terms of such Senior Indebtedness, after giving effect to
any concurrent payment or distribution to or for the holders of Senior
Indebtedness.
SECTION 5.03 Distribution upon Acceleration of Securities;
Dissolution and Reorganization; Subrogation of' Securities. (a) Upon (i)
any acceleration of the principal amount due on the Securities because of an
Event of Default or (ii) any distribution of assets of the Company upon any
dissolution, winding up, liquidation or reorganization of the Company (whether
in bankruptcy, insolvency or receivership proceedings or upon an assignment for
the benefit of creditors or any other dissolution, winding up, liquidation or
reorganization of the Company):
(1) the holders of all Senior Indebtedness shall first be
entitled to receive payment in full in lawful money of the United
States of the principal thereof, the interest thereon and any other
amounts due thereon before the Holders are entitled to receive payment
on account of the principal, interest or any other amounts due on the
Securities;
(2) any payment or distribution of assets of the Company
of any kind or character, whether in cash, property or securities
(other than securities 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
subordinate, at least to the extent provided in this Article 5 with
respect to the Securities, to the payment in full without diminution
or modification by such plan of all Senior Indebtedness) to which the
Holders or the Trustee would be entitled except for the provisions of
this Article 5 shall be paid by the liquidating trustee or agent or
other person making such a payment or distribution, directly to the
holders of Senior Indebtedness (or their representatives) or
trustee(s) acting on their behalf), ratably according to the aggregate
amounts remaining unpaid on account of the principal of and interest
on the Senior Indebtedness held or represented by each, to the extent
necessary to make payment in full of all Senior Indebtedness remaining
unpaid, after giving effect to any concurrent payment or distribution
to the holders of such Senior Indebtedness; and
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(3) in the event that, notwithstanding the foregoing, any
payment or distribution of assets of the Company of any kind or
character, whether in cash, property or securities (other than
securities 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 subordinate, at
least to the extent provided in this Article 5 with respect to the
Securities, to the payment in full without diminution or modification
by such plan of Senior Indebtedness) shall be received by the Trustee
or the Holders before all Senior Indebtedness is paid in full, such
payment or distribution shall be held in trust for the benefit of, and
be paid over to, the holders of the Senior Indebtedness remaining
unpaid (or their representatives) or trustee(s) acting on their
behalf), ratably as aforesaid, for application to the payment of such
Senior Indebtedness until all such Senior Indebtedness shall have been
paid in full, after giving effect to any concurrent payment or
distribution to the holders of such Senior Indebtedness.
Subject to the payment in full of all Senior Indebtedness. the Holders
shall be subrogated 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 of and
interest on the Securities shall be paid in full, and, for purposes of such
subrogation, no such payments or distributions to the holders of Senior
Indebtedness of cash, property or securities which otherwise would have been
payable or distributable to Holders shall, as between the Company, its
creditors other than the holders of Senior Indebtedness, and the Holders, be
deemed to be a payment by the Company to or on account of the Securities.
Nothing contained in this Article 5 or elsewhere in this Indenture or
in the Securities is intended to or shall impair, as between the Company, its
creditors other than the holders of Senior Indebtedness, and the Holders, the
obligation of the Company, which is unconditional and absolute, to pay to the
Holders the principal of and interest on the Securities 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 and creditors of the Company
other than the holders of the Senior Indebtedness, nor shall anything herein or
therein prevent the Trustee or the Holders from exercising all remedies
otherwise permitted by applicable law upon default under this Indenture,
subject to the rights, if any, under this Article 5 of the holders of Senior
Indebtedness in respect of cash, property and securities of the Company
received upon the exercise of any such remedy. Upon distribution of assets of
the Company referred to in this Article 5, the Trustee, subject to the
provisions of Section 9.01, and the Holders shall be entitled to rely upon a
certificate of the liquidating trustee or agent or other person making any
distribution to the Trustee or to the Holders 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 or distributed thereon and all thereon, the amount or amounts paid
or distributed thereon and all other facts pertinent thereto or to this Article
5. The Trustee, however, shall not be deemed to owe any fiduciary duty to the
holders of Senior Indebtedness. Nothing contained in this Article 5 or
elsewhere in this Indenture, or in any of the Securities, shall prevent the
application by the Trustee of any moneys which were deposited with it
hereunder, prior to its receipt of written notice of facts which would prohibit
such application,
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for the purpose of the payment of or on account of the principal of, or interest
on, the Securities unless, prior to the date on which such application is made
by the Trustee, the Trustee shall be charged with notice under Section
5.03(c) hereof of the facts which would prohibit the making of such application.
(b) The provisions of this Article 5 shall not be applicable to
any cash, properties or securities received by the Trustee or by any other
Holder when received as a holder of Senior Indebtedness and nothing in Section
9.11 or elsewhere in this Indenture shall deprive the Trustee or such Holder of
any of its rights as such holder.
(c) The Company shall give prompt written notice to the Trustee of
any fact known to the Company which would prohibit the making of any payment of
moneys to or by the Trustee in respect of the Securities pursuant to the
provisions of this Article 5. The Trustee, subject to the provisions of Section
9.01, shall be entitled to assume that no such fact exists unless the Company
or any holder of Senior Indebtedness or any trustee therefor has given such
notice to the Trustee. Notwithstanding the provisions of this Article 5 or any
other provisions of this Indenture, the Trustee shall not be charged with
knowledge of the existence of any fact which would prohibit the making of any
payment of moneys to or by the Trustee in respect of the Securities pursuant to
the provisions in this Article 5, unless and until the Trustee shall have
received written notice thereof from the Company or any holder or holders of
Senior Indebtedness or from any trustee therefor; and, prior to the receipt of
any such written notice, the Trustee, subject to the provisions of Section
9.01, shall be entitled in all respects conclusively to assume that no such
fact exists; provided that if on or before the Business Day immediately
preceding the date upon which by the terms hereof any such moneys may become
payable for any purpose (including, without limitation, the principal of or
interest on any Security, and any amounts immediately due and payable upon the
execution of any instrument acknowledging satisfaction and discharge of this
Indenture, as provided in Article 10 hereof), the Trustee shall not have
received with respect to such moneys the notice provided for in this Section
5.03(c), then, anything herein contained to the contrary notwithstanding, the
Trustee shall have full power and authority to receive such moneys and to apply
the same to the purpose for which they were received, and shall not be affected
by any notice to the contrary which may be received by it on or after such
prior date.
The Trustee shall be entitled to rely on the delivery to it of a
written notice by 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 holder of Senior Indebtedness (or a trustee on
behalf of any such holder or holders). In the event that the Trustee
determines in good faith that further evidence is required with respect to the
right of any person as a holder of Senior Indebtedness to participate in any
payment or distribution pursuant to this Article 5, the Trustee may request
such person to furnish evidence to the reasonable satisfaction of the Trustee
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
5, and, if such evidence is not furnished, the Trustee may defer any payment to
such person pending judicial determination as to the right of such person to
receive such payment; nor shall the Trustee
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be charged with knowledge of the curing or waiving of any default of the
character specified in Section 5.02 or that any event or any condition
preventing any payment in respect of the Securities shall have ceased to exist,
unless and until the Trustee shall have received an Officers' Certificate to
such effect.
(d) The provisions of this Section 5.03 applicable to the Trustee
shall also apply to any Paying Agent for the Company.
SECTION 5.04 Reliance by Senior Indebtedness on Subordination
Provisions. Each Holder of any Security by his acceptance thereof acknowledges
and agrees that the foregoing subordination provisions are, and are intended to
be, an inducement and a consideration to each holder of any Senior
Indebtedness, whether such Senior Indebtedness was created or acquired before
or after the issuance of the Securities, to acquire and continue to hold, or to
continue to hold, such Senior Indebtedness, and such holder of Senior
Indebtedness shall be deemed conclusively to have relied on such subordination
provisions in acquiring and continuing to hold, or in continuing to hold, such
Senior Indebtedness. Notice of any default in the payment of any Senior
Indebtedness, except as expressly stated in this Article 5, and notice of
acceptance of the provisions hereof are hereby expressly waived. Except as
otherwise expressly provided herein, no waiver, forbearance or release by any
holder of Senior Indebtedness under such Senior Indebtedness or under this
Article 5 shall constitute a release of any of the obligations or liabilities
of the Trustee or Holders of the Securities provided in this Article 5. Except
as otherwise expressly provided herein, no right of any present or future
holder of Senior Indebtedness to enforce the subordination provisions hereof
shall at any time or in any way be prejudiced or impaired by any act or failure
to act on the part of the Company or any such holder or by any noncompliance by
the Company with the terms, provisions or covenants of this Indenture,
regardless of any knowledge thereof which such holder may have or otherwise be
charged with.
SECTION 5.05 Other Provisions Subject Hereto. Except as expressly
stated in this Article 5, notwithstanding anything contained in this Indenture
to the contrary, all the provisions of this Indenture and the Securities are
subject to the provisions of this Article 5.
ARTICLE 6
COVENANTS
SECTION 6.01 Payment of Securities. The Company shall pay the
principal of and interest on the Securities on the dates and in the manner
provided in the Securities. An installment of principal or interest shall be
considered paid on the date it is due if the Trustee or Paying Agent holds on
that date money designated for and sufficient to pay the installment. The
Company shall pay interest on overdue principal at the rate borne by the
Securities; it shall pay interest on overdue installments of interest at the
same rate to the extent lawful.
SECTION 6.02 Corporate Existence. Subject to Article 7, the
Company will do or cause to be done all things necessary to preserve and keep
in full force and effect its corporate
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existence and that of each Subsidiary and the rights (charter and statutory)
and franchises of the Company and its Subsidiaries, provided, however, that the
Company shall not be required to preserve any such right or franchise if the
Board of Directors, or the board of directors of the Subsidiary concerned,
shall determine that the preservation thereof is no longer desirable in the
conduct of the business of the Company or any Subsidiary and that the loss
thereof is not disadvantageous in any material respect to the Holders.
SECTION 6.03 Payment of Taxes and Other Claims. The Company will
pay or discharge or cause to be paid or discharged, before the same shall
become delinquent, (1) all taxes, assessments and governmental charges levied
or imposed upon the Company or any Subsidiary or upon the income, profits or
property of the Company or any Subsidiary, and (2) all lawful claims for labor,
materials and supplies which, if unpaid, might by law become a lien upon the
material property of the Company or any Subsidiary; provided, however, that the
Company shall not be required to pay or discharge or cause to be paid or
discharged any such tax, assessment, charge or claim whose amount,
applicability or validity is being contested in good faith by appropriate
proceedings.
SECTION 6.04 Maintenance of Properties. The Company will cause
all material properties used or useful in the conduct of its business or the
business of any Subsidiary to be maintained and kept in good condition, repair
and working order 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 and
advantageously conducted at all times; provided, however, that nothing in this
Section shall prevent the Company from discontinuing the operation or
maintenance of any of such properties, or disposing of any of them, if such
discontinuance or disposal is, in the judgment of the Company or the Subsidiary
concerned, desirable in the conduct of the business of the Company or any
Subsidiary and not disadvantageous in any material respect to the Holders.
SECTION 6.05 Compliance Certificate. The Company shall deliver to
the Trustee within 90 days after the end of each fiscal year of the Company an
Officers' Certificate stating whether or not the signers know of any default by
the Company in performing its covenants in Sections 6.02, 6.03, and 6.04. If
they do know of such a default, the certificate shall describe the default.
The certificate need not comply with Section 12.05.
SECTION 6.06 SEC Reports. The Company shall file with the
Trustee, within 15 days after it files them with the SEC, copies of the
quarterly and annual reports and of the information, documents, and other
reports (or copies of such portions of any of the foregoing as the SEC may by
rules and regulations prescribe) which the Company is required to file with the
SEC pursuant to Section 13 or 15(d) of the Exchange Act. The Company also
shall comply with the other provisions of TIA Section 314(a). So long as the
Securities remain outstanding, the Company shall cause its annual reports to
shareholders and any other financial reports furnished by it to shareholders
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generally, to be mailed to the Holders at their addresses appearing in the
register of Securities maintained by the Registrar.
SECTION 6.07 Waiver of Stay, Extension or Usury Laws. The Company
covenants (to the extent that it may lawfully do so) that it will not at any
time insist upon, or plead, or in any manner whatsoever claim, and will resist
any and all efforts to be compelled to take the benefit or advantage of, any
stay or extension law or any usury law or other law, which would prohibit or
forgive the Company from paying all or any portion of the principal of and/or
interest on the Securities 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 (to the extent that it may lawfully do so)
the Company hereby expressly waives all benefit or advantage of any such law,
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution
of every such power as though no such law had been enacted.
SECTION 6.08 Purchase of Securities Upon Repurchase Event.
(a) If a Repurchase Event occurs, the Company shall make an offer
to purchase all outstanding Securities. The Company's offer must remain open
for at least 45 days and not more than 60 days after the date the Repurchase
Event Notice described below is mailed to Holders, or such later date as is
required for the Company to comply with the Exchange Act, and must be made at a
price of 101% of the principal amount of the Securities, plus accrued and
unpaid interest through the date of repurchase, provided the Holders comply
with the requirements of this Section 6.08.
(b) The Company shall give written notice (the "Repurchase Event
Notice") of a Repurchase Event within 30 days after it occurs, together with
its offer to purchase all of the Securities as specified above. The Trustee is
not required to inquire about, or learn of, the occurrence of a Repurchase
Event. The Repurchase Event Notice shall include instructions and materials
necessary or helpful to enable Holders to tender Securities for repurchase, and
shall also include the following:
(1) a description of the Repurchase Event and the date on
which it is deemed to have occurred, together with a brief
description of any material developments in the Company's
business since the date of its latest annual or quarterly
report filed with the Trustee pursuant to Section 6.06 and, if
material, any pro forma financial information;
(2) the date by which a Holder must give notice of his
intention to tender Securities, as provided in paragraph (c)
below;
(3) the repurchase price (101% of par) and the date on
which the Company will pay the repurchase price to a Holder
who tenders Securities pursuant to the Company's offer;
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(4) that any Securities not tendered will continue to
earn interest and be outstanding obligations of the Company;
(5) that Securities accepted by the Company will become
due and payable on the date set by the Company for repurchase
of Securities and will cease to earn interest after that date;
and
(6) any procedures that a Holder must follow to tender
Securities and the procedures for withdrawing a tender of
Securities prior to the date set by the Company for repurchase
of the Securities.
(c) A Holder may tender Securities for repurchase pursuant to this
Section 6.08 by (1) delivering to any Paying Agent, prior to the date set by
the Company for the giving of notice of his intention to tender, written notice
identifying the certificate numbers of those certificates he intends to tender
and stating the principal amount of Securities that the Holder wishes to
tender, which must be $1,000 or an intergral multiple thereof and (2)
delivering, within the time limits specified by the Company in the original
Repurchase Event Notice, the Securities being tendered together with all
required additional information or signature guarantees. If a Holder elects to
tender only a portion of the Securities represented by a particular
certificate, the Company shall execute and the Trustee will authenticate and
deliver to the Holder, without charge to the Holder, one or more new
certificates evidencing the principal amount of the Securities not puchased by
the Company. Any Securities tendered to the Company, or any portions of the
principal amount of a Security represented by a certificate that is not
purchased by the Compay, shall continue to be an outstanding Security and shall
continue to bear interest at its stated rate until it matures.
(d) If a Security is tendered for purchase by the Company pursuant
to this Section 6.08 and not validly withdrawn by the Holder, the Holder shall
be entitled to receive solely the repurchase price (101% of par, plus accrued
interest), which amount the Company shall pay promptly following the later of
the Business Day following the date set by the Company for the redemption of
Securities. On or before that time for payment, the Company shall deposit with
the Trustee an amount of money sufficient to pay the principal amount of, and
accued but unpaid interest on, the Securities tendered for purchse on that
date. If a Security is tendered but not paid in accordance with this Section
6.08, the principal amount of such Security shall continue to bear interest at
the rate stated on the Security until the purchase price is paid in full by the
Company.
(f) In making the offer to repurchase Securities required by this
Section 6.08, the Company shall comply with all applicable rules and
regulations, including (but not limited to) Rule 14e-1 under the Exchange Act.
(g) A Holder may withdraw a tender of Securities by notifying the
Paying Agent in writing, by facsimile message or letter, at least three days
prior to the date set by the Company for the repurchase of Securities to occur,
of his request to withdraw the tender of Securities, specifying in such written
notice the certificate number of the Securities to be withdrawn from the
tender, the
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principal amount of Securities being withdrawn and the principal amount of
Securites, if any, that the Holder wishes to have repurchased by the
Company. If a Holder notifies a Paying Agent of his desire to withdraw tendered
Securities from the repurchase, the Paying Agent will promptly return to the
Holder any withdrawn Securities.
ARTICLE 7
SUCCESSOR CORPORATION
SECTION 7.01 When Company May Merge, etc. The Company shall not
consolidate with or merge into any other corporation or transfer its properties
and assets substantially as an entirety to any person, unless:
(1) either the Company shall be the continuing
corporation, or the corporation (if other than the Company) formed by
such consolidation or into which the Company is merged or to which the
properties and assets of the Company substantially as an entirety are
transferred shall be a corporation organized and existing under the
laws of the United States of America or any state thereof or the
District of Columbia and shall expressly assume, by an indenture
supplemental hereto, executed and delivered to the Trustee, in form
reasonably satisfactory to the Trustee, all the obligations of the
Company under the Securities and this Indenture;
(2) immediately after giving effect to such transaction,
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; and
(3) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger or transfer and such supplemental indenture
comply with this Article and that all conditions precedent herein
provided for relating to such transaction have been complied with.
The successor corporation formed by such consolidation or into which
the Company is merged or to which such transfer is made shall succeed to, and
be substituted for, and may exercise every right and power of, the Company
under this Indenture with the same effect as if such successor corporation had
been named as the Company herein, and thereafter the predecessor corporation
shall be relieved of all obligations and covenants under the Indenture and the
Securities, and in the event of such conveyance or transfer any such
predecessor corporation may be dissolved and liquidated.
ARTICLE 8
DEFAULTS AND REMEDIES
SECTION 8.01 Events of Default. An "Event of Default" occurs if:
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(1) the Company defaults in the payment of interest on
any Security when the same becomes due and payable and the default
continues for a period of 30 days; or
(2) the Company defaults in the payment of the principal
of any Security when the same becomes due and payable at maturity,
upon redemption or otherwise; or
(3) the Company fails to comply with any of its other
agreements in the Securities or this Indenture and the default
continues for the period and after the notice specified below; or
(4) an event or events of default, as defined in any one
or more mortgages, indentures, or instruments under which there may be
issued, or by which there may be secured or evidenced, any
indebtedness of the Company or any Material Subsidiary, whether such
indebtedness now exists or shall hereafter be created, shall happen
and shall result in indebtedness in an aggregate amount of at least
$1,000,000 becoming or being declared due and payable prior to the
date on which it would otherwise have become due and payable, and such
acceleration shall not have been rescinded or annulled, or such
indebtedness shall not have been discharged within a period of 30 days
after there shall have been given, by registered or certified mail, to
the Company by the Trustee or to the Company and the Trustee by the
Holders of at least 25% in principal amount of the outstanding
Securities a written notice specifying such event or events of default
and requiring the Company or any Material Subsidiary to cause such
acceleration to be rescinded or annulled or to cause such indebtedness
to be discharged and stating that such notice is a "Notice of Default"
hereunder; or
(5) the Company pursuant to or within the meaning of any
Bankruptcy Law:
(A) commences a voluntary case,
(B) consents to the entry of an order for relief
against it in an involuntary case,
(C) consents to the appointment of a Custodian of
it or for all or substantially all of its
property, or
(D) makes a general assignment for the benefit of
its creditors; or
(6) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(A) is for relief against the Company in an
involuntary case,
(B) appoints a Custodian of the Company or for
all or substantially all of its property, or
(C) orders the liquidation of the Company, and
the order or decree remains unstayed and in
effect for 90 days.
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The term "Bankruptcy Law" means title 11, U.S. Code, or any similar
federal or state law for the relief of debtors. The term "Custodian" means any
receiver, trustee, assignee, liquidator or similar official under any Bankruptcy
Law.
A default under clause (3) is not an Event of Default until the
Trustee or the Holders of at least 25% in principal amount of the Securities
notify the Company of the default and the Company does not cure the default
within 60 days after receipt of the notice. The notice must specify the
default, demand that it be remedied and state that the notice is a "Notice of
Default."
SECTION 8.02 Acceleration. If an Event of Default occurs and is
continuing, the Trustee by notice to the Company, or the Holders of at least
25% in principal amount of the Securities by notice to the Company and the
Trustee, may declare the principal of and accrued interest on all the
Securities to be due and payable immediately. The Holders of a majority in
principal amount of the Securities by notice to the Trustee may rescind an
acceleration and its consequences if all existing Events of Default have been
cured or waived and if the rescission would not conflict with any judgment or
decree.
SECTION 8.03 Other Remedies. If an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy by proceeding at law or
in equity to collect the payment of principal or interest on the Securities or
to enforce the performance of any provision of the Securities or this
Indenture. The Trustee may maintain a proceeding even if it does not possess
any of the Securities or does not produce any of them in the proceeding. A
delay or omission by the Trustee or any Securityholder in exercising any right
or remedy accruing upon an Event of Default shall not impair the right or
remedy or constitute a waiver of or acquiescence in the Event of Default. No
remedy is exclusive of any other remedy. All available remedies are
cumulative.
SECTION 8.04 Waiver of Past Defaults. Subject to Section 11.02,
the Holders of a majority in principal amount of the Securities by notice to
the Trustee may waive an existing Default or Event of Default and its
consequences. When a Default or Event of Default is waived, it is cured and
stops continuing.
SECTION 8.05 Control by Majority. The Holders of a majority in
principal amount of the Securities may direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or exercising
any trust or power conferred on it. However, the Trustee may refuse to follow
any direction that conflicts with law or this Indenture, that is unduly
prejudicial to the rights of another Securityholder, or that would involve the
Trustee in personal liability.
SECTION 8.06 Limitation on Suits. A Securityholder may not pursue
any remedy with respect to this Indenture or the Securities unless:
(1) the Holder gives to the Trustee written notice of a
continuing Event of Default;
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(2) the Holders of at least 25% in principal amount of
the Securities make a written request to the Trustee to pursue the
remedy;
(3) such Holder or Holders offer to the Trustee indemnity
satisfactory to the Trustee against any loss, liability or expense;
and
(4) the Trustee does not comply with the request within
60 days after receipt of the request and the offer of indemnity.
A Securityholder may not use this Indenture to prejudice the rights of
another Securityholder or to obtain a preference or priority over another
Securityholder.
SECTION 8.07 Rights of Holders to Receive Payment and to Convert.
Notwithstanding any other provision of this Indenture, the right of any Holder
of a Security to receive payment of principal and interest on the Security, on
or after the respective due dates expressed in the Security, to convert such
Security in accordance with Article 4 or to bring suit for the enforcement of
any such payment on or after such respective dates and for the enforcement of
the right to convert, shall not be impaired or affected without the consent of
the Holder.
SECTION 8.08 Collection Suit by Trustee. If an Event of Default
in payment of interest or principal specified in Section 8.01 (1) or (2) occurs
and is continuing, the Trustee may recover judgment in its own name and as
trustee of an express trust against the Company for the whole amount of
principal and interest remaining unpaid.
SECTION 8.09 Trustee May File Proof of Claim. The Trustee may
file such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee and the Securityholders
allowed in any judicial proceedings relative to the Company, its creditors or
its property.
SECTION 8.10 Priorities. If the Trustee collects any money
pursuant to this Article, it shall pay out the money in the following order:
First: to the Trustee for amounts due under Section 9.07;
Second: to Securityholders for amounts due and unpaid on the
Securities for principal and interest, ratably, without
preference or priority of any kind, according to the amounts
due and payable on the Securities for principal and interest,
respectively; and
Third: to the Company.
The Trustee may fix a record date and payment date for any payment to
Securityholders.
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SECTION 8.11 Undertaking for Costs. In any suit for the enforcement
of any right or remedy under this Indenture or in any suit against the
Trustee for any action taken or omitted by it as Trustee, a court in its
discretion may require the filing by any party litigant in the suit other
than the Trustee of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard
to the merits and good faith of the claims or defenses made by the party
litigant. This Section does not apply to a suit by the Trustee, a suit by a
Holder pursuant to Section 8.07, or a suit by Holders of more than 10% in
principal amount of the Securities.
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ARTICLE 9
TRUSTEE
SECTION 9.01 Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise its rights and powers and use the same degree of care
and skill in their exercise as a prudent man would exercise or use under the
circumstances in the conduct of his own affairs.
(b) Except during the continuance of an Event of Default:
(1) The Trustee need perform only those duties that are
specifically set forth in this Indenture and no
others.
(2) In the absence of bad faith on its part, the Trustee
may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements
of this Indenture. However, the Trustee shall examine the
certificates and opinions to determine whether or not they conform to
the requirements of this Indenture.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(1) This paragraph does not limit the effect of paragraph
(b) of this Section.
(2) The Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer, unless it is
proved that the Responsible Officer was negligent in ascertaining the
pertinent facts.
(3) The Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 8.05.
(d) Every provision of this Indenture that in any way relates to
the Trustee is subject to paragraphs (a), (b) and (c) of this Section.
(e) The Trustee may refuse to perform any duty or exercise any
right or power unless it receives indemnity satisfactory to it against any
loss, liability or expense.
(f) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree with the Company.
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SECTION 9.02 Rights of Trustee.
(a) The Trustee may rely on any document believed by it to be
genuine and to have been signed or represented by the proper person. The
Trustee need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may
require an Officers' Certificate or an Opinion of Counsel. The Trustee shall
not be liable for any action it takes or omits to take in good faith in
reliance on the Certificate or Opinion.
(c) The Trustee may act through agents and shall not be
responsible for the misconduct or negligence of any agent appointed with due
care.
(d) The Trustee shall not be liable for any action it takes or
omits to take in good faith which it believes to be authorized or within its
rights or powers.
SECTION 9.03 Individual Rights of Trustee. The Trustee in its
individual or any other capacity may become the owner or pledgee of Securities
and may otherwise deal with the Company or its affiliates with the same rights
it would have if it were not Trustee. Any Paying Agent, Conversion Agent,
Registrar or co-registrar may do the same with like rights. However, the
Trustee must comply with Sections 9.10 and 9.11.
SECTION 9.04 Trustee's Disclaimer. The Trustee makes no
representation as to the validity or adequacy of this Indenture or the
Securities, it shall not be accountable for the Company's use of the proceeds
from the Securities, and it shall not be responsible for any statement in the
Securities other than its certificate of authentication.
SECTION 9.05 Notice of Defaults. If a Default occurs and is
continuing and if it is known to the Trustee, the Trustee shall mail to each
Securityholder notice of the Default within 90 days after it occurs. Except in
the case of a Default in payment on any Security, the Trustee may withhold the
notice if and so long as a committee of its Responsible Officers in good faith
determines that withholding the notice the interests of Securityholders.
SECTION 9.06 Reports by Trustee to Holders. Within 60 days after
each May 15, beginning with the May 15 following the date of this Indenture,
the Trustee shall mail to each Securityholder a brief report dated as of such
May 15 that complies with TIA Section 313(a). The Trustee also shall comply
with TIA Section 313(b). A copy of each report at the time of its mailing to
Securityholders shall be filed with the SEC and each stock exchange on which
the Securities are listed.
SECTION 9.07 Compensation and Indemnity. The Company shall pay to
the Trustee from time to time reasonable compensation for its services. The
Company shall reimburse the Trustee upon request for all reasonable
out-of-pocket expenses incurred by it. Such expenses may
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include the reasonable compensation and expenses of the Trustee's agents and
counsel. The Company shall indemnify the Trustee against any loss or
liability incurred by it. The Trustee shall notify the Company promptly of any
claim for which it may seek indemnity. The Company shall defend the claim and
the Trustee shall cooperate in the defense. The Trustee may have separate
counsel and the Company shall pay the reasonable fees and expenses of such
counsel. The Company need not pay for any settlement made without its consent.
The Company need not reimburse any expense or indemnify against any loss or
liability incurred by the Trustee through negligence, bad faith or willful
misconduct.
To secure the Company's payment obligations in this Section, the Trustee
shall have a lien prior to the Securities on all money or property held or
collected by the Trustee, except that which is held in trust to pay principal
and interest on particular Securities.
SECTION 9.08 Replacement of Trustee. The Trustee may resign by so
notifying the Company. The Holders of a majority in principal amount of the
Securities may remove the Trustee by so notifying the removed Trustee and may
appoint a successor Trustee with the Company's consent. The Company may remove
the Trustee if:
(1) the Trustee fails to comply with Section 9.10;
(2) the Trustee is adjudged a bankrupt or an insolvent;
(3) a receiver or other public officer takes charge of the Trustee
or its property: or
(4) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a
successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Immediately after
that, the retiring Trustee shall transfer all property held by it as Trustee to
the successor Trustee, the resignation or removal of the retiring Trustee shall
become effective, and the successor Trustee shall have all the rights, powers
and duties of the Trustee under this Indenture. A successor Trustee shall mail
notice of its succession to each Securityholder.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or
the Holders of a majority in principal amount of the Securities may petition
any court of competent Jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 9.10, any Securityholder
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.
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SECTION 9.09 Successor Trustee by Merger, etc. If the Trustee
consolidates with, merges or converts into, or transfers all or substantially
all of its corporate trust assets to, another corporation, the resulting,
surviving or transferee corporation without any further act shall be the
successor Trustee.
SECTION 9.10 Eligibility; Disqualification. This Indenture shall
always have a Trustee who satisfies the requirements of TIA Section 310(a)(1).
The Trustee shall have a combined capital and surplus of at least $25,000,000
as set forth in its most recent published annual report of condition. The
Trustee shall comply with TIA Section 310(b), including the optional provision
permitted by the second sentence of TIA Section 310(b)(9).
SECTION 9.11 Preferential Collection of Claims Against Company.
The Trustee shall comply with TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated.
ARTICLE 10
DISCHARGE OF INDENTURE
SECTION 10.01 Termination of Company's Obligations. This Indenture
shall cease to be of further effect (except as provided below) and the Trustee,
on demand of and at the expense of the Company, shall execute proper
instruments acknowledging satisfaction and discharge of this Indenture, when
(1) either
(A) all Securities theretofore authenticated and
delivered (other than (i) Securities which have been destroyed, lost
or stolen and which have been replaced or paid as provided in Section
2.07 and (ii) Securities for whose payment money has theretofore been
held in trust and thereafter repaid to the Company, as provided in
Section 10.03) have been delivered to the Trustee for cancellation; or
(B) all such Securities not theretofore delivered to the
Trustee for cancellation (i) have become due and payable, or (ii) will
become due and payable at their date of maturity within six months, or
(iii) are to be called for redemption within six months under
arrangements satisfactory to the Trustee for the giving of notice of
redemption by the Trustee in the name, and at the expense, of the
Company, and the Company, in the case of (i), (ii) or (iii) above, has
deposited or caused to be deposited with the Trustee in trust for the
purpose an amount sufficient to pay and discharge the entire
indebtedness on such Securities not theretofore delivered to the
Trustee for cancellation, for principal and interest to the date of
such deposit (in the case of Securities which have become due and
payable) or to the date of maturity or redemption date. as the case
may be,
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(2) the Company has paid or caused to be paid all other sums
payable hereunder by the Company, and
(3) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to the satisfaction and discharge of
this Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to pay principal and interest on the securities
(which shall be absolute and unconditional) and its obligations in paragraph 13
of the Securities and in Sections 2.03, 2.04. 2.05, 2.06, 2.07, 9.07, 9.08 and
Article 4 shall survive. The Trustee shall give notice in the name of and at
the expense of the Company to the Holders of the immediate availability of the
amounts referred to in clause (1) of this Section 10.01.
SECTION 10.02 Application of Trust Money. The Trustee shall hold
in trust money deposited with it pursuant to Section 10.01. It shall apply the
deposited money through the Paying Agent and in accordance with this Indenture
to the payment of principal and interest on the Securities.
SECTION 10.03 Repayment to Company. The Trustee and the Paying
Agent shall promptly pay to the Company upon request any excess money held by
them at any time. The Trustee and the Paying Agent shall pay to the Company
upon request any money held by them for the payment of principal or interest
that remains unclaimed for two years.
ARTICLE 11
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 11.01 Without Consent of Holders. The Company may amend or
supplement this Indenture or the Securities without notice to or consent of any
Securityholder:
(1) to cure any ambiguity, defect or inconsistency;
(2) to comply with Article 7;
(3) to provide for uncertificated Securities in addition to or in
place of certificated Securities; or
(4) to make any change that does not materially adversely affect
the right of any Securityholder.
SECTION 11.02 With Consent of Holders. The Company may amend or
supplement this Indenture or the Securities without notice to any
Securityholder but with the written consent of
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the Holders of at least a majority in principal amount of the Securities. The
Holders of a majority in principal amount of the Securities may waive compliance
by the Company with any provision of this Indenture or the Securities without
notice to any Securityholder. However, without the consent of each
Securityholder affected, an amendment, supplement or waiver, including a waiver
pursuant to Section 8.04, may not:
(1) reduce the amount of Securities whose Holders must consent to
an amendment, supplement or waiver;
(2) reduce the rate of or extend the time for payment of interest
on any Security;
(3) reduce the principal of or extend the fixed maturity of any
Security or alter the redemption provisions with respect
thereto;
(4) waive a default in the payment of the principal of or interest
on any Security;
(5) modify the provisions of Article 5 in a manner adverse to the
Holders;
(6) make any Security payable in money other than that stated in
the Security; or
(7) adversely affect the right to convert any Security its
provided in Article 4.
SECTION 11.03 Compliance with TIA. Every amendment to or
supplement of this Indenture or the Securities shall comply with the TIA as
then in effect.
SECTION 11.04 Revocation and Effect of Consents. A consent to an
amendment, supplement or waiver by a Holder of a Security shall bind the Holder
and every subsequent Holder of a Security or portion of a Security that
evidences the same debt as the consenting Holder's Security, even if notation
of the consent is not made on any Security. However, any such Holder or
subsequent Holder may revoke the consent as to his Security or portion of a
Security. The Trustee must receive the notice of revocation before the date
the amendment, supplement or waiver becomes effective.
After an amendment, supplement or waiver becomes effective, it shall
bind every Securityholder unless it makes a change described in clause (1),
(2), (3), (4), (5), (6) or (7) of Section 11.02. In that case the amendment,
supplement or waiver shall bind each Holder of a Security who has consented to
it and every subsequent Holder of a Security or portion of a Security that
evidences the same debt as the consenting Holder's Security.
SECTION 11.05 Notation on or Exchange of Securities. If an
amendment, supplement or waiver changes the terms of a Security, the Trustee
may require the Holder of the Security to deliver it to the Trustee. The
Trustee may place an appropriate notation on the Security about the changed
terms and return it to the Holder. Alternatively, if the Company or the
Trustee so
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determine, the Company in exchange for the Security shall issue, and the
Trustee shall authenticate, a new Security that reflects the changed terms.
SECTION 11.06 Trustee to Sign Amendments, etc. The Trustee shall
sign any amendment, supplement or waiver authorized pursuant to this Article if
the amendment, supplement or waiver does not adversely affect the rights of the
Trustee. If it does, the Trustee may but need not sign it. The Company may
not sign an amendment or supplement until the Board of Directors approves it.
ARTICLE 12
MISCELLANEOUS
SECTION 12.01 Trust Indenture Act Controls. If any provision of
this Indenture limits, qualifies, or conflicts with another provision which is
required to be included in this Indenture by the TIA or the TIA as amended
after the date hereof, the required provision shall control.
SECTION 12.02 Notices. Any notice or communication shall be
sufficiently given if in writing and delivered in person or mailed by
first-class mail addressed as follows:
if to the Company:
Thorn Apple Valley, Inc.
26999 Central Park, Suite 300
Southfield, MI 48076
Attention: President
with a copy to:
Honigman Miller Schwartz and Cohn
2290 First National Building
Detroit, MI 48226
Attention: Donald J. Kunz
if to the Trustee:
___________________
___________________
___________________
Attention: Corporate Trust Department
The Company or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.
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Any notice or communication mailed to a Securityholder shall be mailed
to him at his address as it appears on the registration books of the Registrar
and shall be sufficiently given to him if so mailed within the time prescribed.
Failure to mail a notice or communication to a Securityholder or any
defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it.
SECTION 12.03 Communication by Holder with Other Holders.
Securityholders may communicate pursuant to TIA Section 312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Trustee, the Registrar and anyone else shall have
the protection of TIA Section 312(c).
SECTION 12.04 Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to take any
action under this Indenture, the Company shall furnish to the Trustee:
(1) an Officers' Certificate stating that, in the opinion of the
signers, all conditions precedent, if any, provided for in
this Indenture relating to the proposed action have been
complied with; and
(2) an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent have been complied
with.
SECTION 12.05 Statements Required in Certificate or Opinion. Each
certificate or opinion with respect to compliance with a condition or covenant
provided for in this Indenture shall include:
(1) a statement that the person making such certificate or opinion
has read such covenant or condition;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or
opinions contained in such certificate or opinion are 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 12.06 When Treasury Securities Disregarded. In determining
whether the Holders of the required principal amount of Securities have
concurred in any direction, waiver or
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consent, Securities owned by the Company or by any person directly or
indirectly controlling or controlled by or under direct or indirect common
control with the Company shall be disregarded, except that for the purposes of
determining whether the Trustee shall be protected in relying on any such
direction, waiver or consent, only Securities which the Trustee knows are so
owned shall be so disregarded.
SECTION 12.07 Rules by Trustee, Paying Agent, Conversion Agent,
Registrar. The Trustee may make reasonable rules for action by or a meeting of
Securityholders. The Paying Agent, Conversion Agent or Registrar each may make
reasonable rules for its functions.
SECTION 12.08 Legal Holiday. A "Legal Holiday" is a Saturday, a
Sunday, a legal holiday or a day on which banking institutions are not required
to be open. If a payment date is a Legal Holiday at a place of payment,
payment may be made at that place on the next succeeding day that is not a
Legal Holiday, and no interest shall accrue for the intervening period.
SECTION 12.09 Governing Law. The laws of the State of Michigan
shall govern this Indenture and the Securities.
SECTION 12.10 No Adverse Interpretation of Other Agreements. This
Indenture may not be used to interpret another indenture, loan or debt
agreement of the Company or a Subsidiary. Any such indenture, loan or debt
agreement may not be used to interpret this Indenture.
SECTION 12.11 No Recourse Against Others. All liability described
in paragraph 20 of the Securities of any director, officer, employee or
shareholders, as such, of the Company is waived and released.
SECTION 12.12 Successors. All agreements of the Company in this
Indenture and the Securities shall bind its successor. All agreements of the
Trustee in this Indenture shall bind its successor.
SECTION 12.13 Duplicate Originals. The parties may sign any
number of copies of this Indenture. Each signed copy shall be an original, but
all of them together represent the same agreement.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
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SIGNATURES:
THORN APPLE VALLEY, INC.
Dated: April __, 1997
By: _______________________________
Joel Dorfman, President
Attest: __________________________
Ronald D. Risher, Secretary
[TRUSTEE]
By: _________________________
Its: _________________________
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EXHIBIT A
[FRONT OF SECURITY]
___% CONVERTIBLE SUBORDINATED DEBENTURE
DUE APRIL 1, 2007
Interest Payment Dates: April 1 and October 1
Record Dates: March 15 and September 15
No. __________________
$ ____________________
CUSIP No. ____________
THORN APPLE VALLEY, INC.
promises to pay to __________________________________________________
or registered assigns, the principal sum of _______________________________
Dollars on April 1, 2007,
THORN APPLE VALLEY, INC.
Secretary Chairman
Date: ____________________
Authenticated: _________________
[TRUSTEE],
as Trustee
By __________________________
Authorized Signer
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[REVERSE OF SECURITY]
THORN APPLE VALLEY, INC.
____% CONVERTIBLE SUBORDINATED DEBENTURE S
DUE APRIL 1, 2007
1. Interest.
Thorn Apple Valley, Inc., a Michigan corporation ("Company"), promises
to pay interest on the principal amount of this Debenture at the rate per annum
shown above. The Company will pay interest semi-annually on April 1, and
October 1 of each year, commencing with October 1, 1997. Interest on the
Debentures will accrue from the most recent date to which interest has been
paid or if no interest has been paid from April 1, 1997. Interest will be
computed on the basis of a 360-day year of twelve 30-day months.
The Company shall pay interest on overdue principal at the rate borne by
the Debentures; it shall pay interest on overdue installments of interest at
the same rate to the extent lawful.
2. Method of Payment.
The Company will pay interest on the Debentures (except defaulted
interest) to the persons who are registered Holders of Debentures at the close
of business on the March 15 or September 15 next preceding the interest payment
date ("Record Date"), even though the Debentures are canceled after the Record
Date and on or before the interest payment date. Holders must surrender
Debentures to a Paying Agent to collect principal payments. The Company will
pay principal and interest in money of the United States that at the time of
payment is legal tender for payment of public and private debts. However, the
Company may pay principal and interest by its check payable in such money. It
may mail an interest check to a Holder's registered address.
3. Paying Agent, Conversion Agent and Registrar.
Initially,____________________ ("Trustee") will act as Paying Agent,
Conversion Agent and Registrar. The Company may change any Paying Agent,
Conversion Agent, Registrar or co-registrar without notice. The Company or any
of its Subsidiaries may act as Paying Agent, Conversion Agent, Registrar or
co-registrar.
4, Indenture.
The Company issued the Debentures under an Indenture dated as of April
1, 1997 ("Indenture"), between the Company and the Trustee. The terms of the
Debentures include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939, 15 U.S. Code
Sections 77aaa-77bbbb ("Act"), as in effect on the date of the Indenture. The
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Debentures are subject to all such terms, and Debentureholders are referred to
the Indenture and the Act for a statement of them.
5. Optional Redemption.
The Company may redeem any or all Debentures at any time on or after
April 1, 2000, at the following redemption prices (expressed in percentages of
principal amount), if redeemed during the periods indicated below, plus accrued
interest to the redemption date:
Period of Redemption Percentage
-------------------- ----------
April 1, 1997 through March 31, 1998 106%
April 1, 1998 through March 31, 1999 105%
April 1, 1999 through March 31, 2000 104%
April 1, 2000 through March 31, 2001 103%
April 1, 2001 through March 31, 2002 102%
April 1, 2002 through March 31, 2003 101%
April 1, 2003 and thereafter 100%
However, the Debentures may not be redeemed prior to April 1, 2000, except (i)
after the occurrence of a Sale Event (as defined in the Indenture) or (ii) if
the closing price for the Company's common stock, par value $0.10 per share, on
the Nasdaq National Stock Market shall have been equal to or exceeded 140% of
the conversion price then in effect for any 20 trading days within a period of
30 consecutive trading days prior to the date notice of redemption is given to
Holders of the Debentures.
6. Notice of Redemption.
Notice of redemption will be mailed at least 30 days but not more than
60 days before the redemption date to each Holder of Debentures to be redeemed
at his registered address. Debentures in denominations larger than $1,000 may
be redeemed in part. On and after the redemption date interest ceases to
accrue on Debentures or portions of them called for redemption.
7. Conversion.
Subject to and upon compliance with the provisions of the Indenture, the
Holder of this Debenture is entitled, at his option, at any time on or before
the close of business on April 1, 2007, or in case this Debenture or some
portion hereof shall have been called for redemption prior to such date, then
in respect of this Debenture or such portion hereof until and including, but
(unless the Company shall default in payment due upon the redemption thereof)
not after, the close of business on the redemption date, to convert this
Debenture (or in case this Debenture is of a denomination in excess of $1,000,
any portion hereof which is $1.00 or an integral multiple thereof), into fully
paid and nonassessable shares of common stock, par value $0.10 per share
("Shares"), of the Company at the initial conversion price of $_____ per Share,
subject to such adjustment or adjustments, if any, of such conversion price and
the securities or other property issuable upon conversion, as may be required
by the provisions of the Indenture, upon surrender of this Debenture, duly
endorsed or assigned to the Company or in blank, to the Company at the office
or agency of the Conversion
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Agent, with the Conversion Notice set forth below, or accompanied by a separate
written notice substantially in the form of such Conversion Notice, duly
executed by the Holder and stating that the Holder hereof elects to convert
this Debenture, or if less than the entire principal amount hereof is to be
converted, the portion hereof to be converted, all in accordance with the
provisions of the Indenture. Except as otherwise provided in the Indenture, no
payment or adjustment is to be made on conversion for interest accrued hereon
or for dividends issued on securities issued on conversion. No fractional
Shares will be issued on conversion, but instead of any fractional interest the
Company shall pay a cash adjustment as provided in the Indenture.
8. Subordination.
The Debentures will be subordinated in right of payment to the prior
payment in full of all Senior Indebtedness (as defined in the Indenture) of the
Company
9. Denominations, Transfer, Exchange.
The Debentures are in registered form without coupons in denominations
of $1,000 and integral multiples thereof. A Holder may transfer or exchange
Debentures in accordance with the Indenture. The Registrar may require a
Holder, among other things, to furnish appropriate endorsements and transfer
documents and to pay any taxes and fees required by law or permitted by the
Indenture. The Registrar need not transfer or exchange any Debentures selected
for redemption. Also, it need not transfer or exchange any Debentures for a
period of 15 days before a selection of Debentures to be redeemed.
10. Persons Deemed Owners.
The registered Holder of a Debenture may be treated as the owner of it
for all purposes.
11. Unclaimed Money.
If money for the payment of principal or interest remains unclaimed
for two years, the Trustee or Paying Agent will pay the money back to the
Company at its request. After that, Holders entitled to the money must look to
the Company for payment unless an abandoned property law designates another
person.
12. Discharge Prior to Redemption or Maturity.
The Indenture will be discharged and canceled except for certain
Sections thereof, subject to the terms of the Indenture, upon the payment of
all the Debentures or upon the deposit with the Trustee, within not more than
six months prior to the maturity or redemption of the Debentures, of funds
sufficient for such payment or redemption. In the case of such a deposit,
Holders must look to the deposited money for payment.
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13. Amendment, Supplement, Waiver.
Subject to certain exceptions, the Indenture or the Debentures may be
amended or supplemented with the consent of the Holders of at least a majority
in principal amount of the Debentures, and any past default or compliance with
any provision may be waived with the consent of the Holders of a majority in
principal amount of the Debentures. Without the consent of any Holder, the
Company may amend or supplement the Indenture or the Debentures to cure any
ambiguity, defect or inconsistency or to provide for uncertificated Debentures
in addition to or in place of certificated Debentures or to make any change
that does not materially adversely affect the rights of any Holder.
14. Restrictive Covenants.
The Debentures are general unsecured obligations of the Company
limited to the aggregate principal amount of $[17,500,000]. The Indenture does
not limit other unsecured debt nor does it limit the payment of dividends on,
or purchases of, capital stock, by the Company. The Company is obligated to
maintain its corporate existence and that of its subsidiaries (subject to
certain exceptions), to pay all lawful taxes and other claims and to maintain
all of its material properties in good condition, repair and working order.
Once a year the Company must report to the Trustee on compliance with such
covenants.
15. Successor Corporation.
When a successor corporation assumes all the obligations of its
predecessor under the Debentures and the Indenture, the predecessor corporation
will be released from those obligations.
16. Defaults and Remedies.
An Event of Default is: default for 30 days in payment of interest on
the Debentures; default in payment of principal on them; failure by the Company
for 60 days after notice to it to comply with any of its other agreements in
the Indenture or the Debentures; acceleration of at least $1,000,000 aggregate
amount of indebtedness of the Company or any Material Subsidiary, unless cured
within 30 days after notice to the Company by the Trustee or Holders of at
least 25% in aggregate principal amount of the Debentures then outstanding; and
certain events of bankruptcy or insolvency. If an Event of Default occurs and
is continuing, the Trustee or the Holders of at least 25% in principal amount
of the Debentures may declare all the Debentures to be due and payable
immediately. Holders may not enforce the Indenture or the Debentures except as
provided in the Indenture. The Trustee may require indemnity reasonably
satisfactory to it before it enforces the Indenture or the Debentures. Subject
to certain limitations, Holders of a majority in principal amount of the
Debentures may direct the Trustee in its exercise of any trust or power. The
Trustee may withhold from Holders notice of any continuing default (except a
default in payment of principal or interest) if it determines that withholding
notice is in their interests.
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17. Trustee Dealings with Company.
________________________, the Trustee under the Indenture, in its
individual or any other capacity, may make loans to, accept deposits from, and
perform services for the Company or its affiliates, and may otherwise deal with
the Company or its affiliates, as if it were not Trustee.
18. No Recourse Against Others.
A director, officer, employee or shareholder, as such, of the Company
shall not have any liability for any obligations of the Company under the
Debentures or the Indenture or for any claim based on, in respect of or by
reason of, such obligations or their creation. Each Debentureholder by
accepting a Debenture waives and releases all such liability. The waiver and
release are part of the consideration for the issue of the Debentures.
19. Authentication.
This Debenture shall not be valid until the Trustee signs the
certificate of authentication on the other side of this Debenture.
20. Abbreviations.
Customary abbreviations may be used in the name of a Debentureholder
or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by
the entireties), JT TEN (= joint tenants with right of survivorship and not as
tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors
Act).
The Company will furnish to any Holder upon written request and
without charge a copy of the Indenture. Requests may be made to: Secretary,
Thorn Apple Valley, Inc., 26999 Central Park Boulevard, Suite 300, Southfield,
Michigan 48076.
[FORM OF ASSIGNMENT]
I or we assign and transfer this Debenture to
_______________________________
_______________________________
_______________________________
(Print or type name, address and zip code of assignee)
Social security or other identifying number of assignee: ___________________
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and irrevocably appoint ______________________________ agent to transfer this
Debenture on the books of the Company. The agent may substitute another person
to act for him.
Dated: ________________________ Signed:_____________________________
(Sign exactly as name appears on the
other side of this Debenture)
______________________________
Signature Guaranteed By
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EXHIBIT B
[FORM OF CONVERSION NOTICE]
To Thorn Apple Valley, Inc.:
The undersigned owner of this Debenture hereby irrevocably exercises
the option to convert this Debenture, or portion hereof below designated, into
Shares of Common Stock of Thorn Apple Valley, Inc., in accordance with the
terms of the Indenture referred to in this Debenture, and directs that the
Shares issuable and deliverable upon 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 undersigned unless a
different name has been indicated below. If Shares are to be registered in the
name of a person other than the undersigned, the undersigned will pay any
transfer taxes payable with respect thereto.
Dated: _____________________________
Signature: __________________________
Signature Guaranteed By:
___________________________________
Principal Amount to be Converted: ___________________________
(if less than all)
Fill in for registration of Shares and Debentures only if otherwise
than in name and address of registered holder.
___________________________ ___________________________
(Name) (Address)
___________________________ ___________________________
(City and State) (Tax Identification Number)
(Please print name and address including zip code number)
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