EXHIBIT 10.2
LENNOX INTERNATIONAL INC.
and
THE BANK OF NEW YORK
as Trustee
INDENTURE
Dated as of May 8, 2002
$125,000,000 Principal Amount
(Plus Over-allotment Option)
6 1/4% CONVERTIBLE SUBORDINATED NOTES DUE 2009
CROSS-REFERENCE TABLE
TIA Indenture
Section Section
- ------- ---------
310(a)(1).............................................. 7.10
(a)(2).............................................. 7.10
(a)(3).............................................. N.A.
(a)(4).............................................. N.A.
(b)................................................. 7.08; 7.10; 12.02
(c)................................................. N.A.
311(a)................................................. 7.11
(b)................................................. 7.11
(c)................................................. N.A.
312(a)................................................. 2.05
(b)................................................. 12.03
(c)................................................. 12.03
313(a)................................................. 7.06
(b)(1).............................................. N.A.
(b)(2).............................................. 7.06
(c)................................................. 7.06; 12.02
(d)................................................. 7.06
314(a)................................................. 4.02
(b)................................................. N.A.
(c)(1).............................................. 12.04
(c)(2).............................................. 12.04
(c)(3).............................................. N.A.
(d)................................................. N.A.
(e)................................................. 12.05
(f)................................................. N.A.
315(a)................................................. 7.01(B)
(b)................................................. 7.05; 12.02
(c)................................................. 7.01(A)
(d)................................................. 7.01(C)
(e)................................................. 6.11
316(a)(last sentence).................................. 2.09
(a)(1)(A)........................................... 6.05
(a)(1)(B)........................................... 6.04
(a)(2).............................................. N.A.
(b)................................................. 6.07
317(a)(1).............................................. 6.08
(a)(2).............................................. 6.09
(b)................................................. 2.04
318(a)................................................. 12.01
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TABLE OF CONTENTS
Page
I. DEFINITIONS AND INCORPORATION BY REFERENCE
1.01 Definitions.............................................. 1
1.02 Other Definitions........................................ 5
.03 Incorporation by Reference of Trust Indenture Act........ 5
.04 Rules of Construction.................................... 6
II. THE SECURITIES
.01 Form and Dating.......................................... 6
.02 Execution and Authentication............................. 7
.03 Registrar, Paying Agent and Conversion Agent............. 8
.04 Paying Agent To Hold Money in Trust...................... 8
.05 Securityholder Lists..................................... 9
.06 Transfer and Exchange.................................... 9
.07 Replacement Securities................................... 9
.08 Outstanding Securities................................... 10
.09 Securities Held by the Company or an Affiliate........... 10
.10 Temporary Securities..................................... 10
.11 Cancellation............................................. 11
.12 Defaulted Interest....................................... 11
.13 CUSIP Numbers............................................ 11
.14 Deposit of Moneys........................................ 11
.15 Book-Entry Provisions for Global Securities.............. 11
.16 Special Transfer Provisions.............................. 12
.17 Restrictive Legends...................................... 15
III. REDEMPTION
.01 Right of Redemption...................................... 15
.02 Notices to Trustee....................................... 15
.03 Selection of Securities to Be Redeemed................... 15
.04 Notice of Redemption..................................... 16
.05 Effect of Notice of Redemption........................... 17
.06 Deposit of Redemption Price.............................. 17
.07 Securities Redeemed in Part.............................. 17
.08 Repurchase at Option of Holder upon a Change in Control.. 17
.09 Conversion Arrangement on Call for Redemption............ 21
IV. COVENANTS
.01 Payment of Securities.................................... 22
.02 Maintenance of Office or Agency.......................... 22
.03 Reports.................................................. 22
.04 Compliance Certificate................................... 23
.05 Stay, Extension and Usury Laws........................... 23
.06 Corporate Existence...................................... 23
.07 Notice of Default........................................ 23
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V. SUCCESSORS
.01 When Company May Merge, etc.............................. 24
.02 Successor Substituted.................................... 24
VI. DEFAUDIES
.01 Events of Default........................................ 24
.02 Acceleration............................................. 26
.03 Other Remedies........................................... 26
.04 Waiver of Past Defaults.................................. 26
.05 Control by Majority...................................... 27
.06 Limitation on Suits...................................... 27
.07 Rights of Holders to Receive Payment..................... 27
.08 Collection Suit by Trustee............................... 28
.09 Trustee May File Proofs of Claim......................... 28
.10 Priorities............................................... 28
.11 Undertaking for Costs.................................... 29
VII. TRUSTEE
.01 Duties of Trustee........................................ 29
.02 Rights of Trustee........................................ 30
.03 Individual Rights of Trustee............................. 31
.04 Trustee's Disclaimer..................................... 31
.05 Notice of Defaults....................................... 31
.06 Reports by Trustee to Holders............................ 32
.07 Compensation and Indemnity............................... 32
.08 Replacement of Trustee................................... 33
.09 Successor Trustee by Merger, etc......................... 33
.10 Eligibility; Disqualification............................ 34
.11 Preferential Collection of Claims Against Company........ 34
VIII. DISCHARGE OF INDENTURE
.01 Termination of the Obligations of the Company............ 34
.02 Application of Trust Money............................... 35
.03 Repayment to Company..................................... 35
.04 Reinstatement............................................ 35
IX. AMENDMENTS
.01 Without Consent of Holders............................... 36
.02 With Consent of Holders.................................. 36
.03 Compliance with Trust Indenture Act...................... 37
.04 Revocation and Effect of Consents........................ 37
.05 Notation on or Exchange of Securities.................... 38
.06 Trustee Protected........................................ 38
X. CONVERSION
0.01 Conversion Privilege; Restrictive Legends............... 38
0.02 Conversion Procedure.................................... 39
0.03 Fractional Shares....................................... 39
0.04 Taxes on Conversion..................................... 40
0.05 Company to Provide Stock................................ 40
0.06 Adjustment of Conversion Rate........................... 40
0.07 No Adjustment........................................... 45
0.08 Other Adjustments....................................... 46
0.09 Adjustments for Tax Purposes............................ 46
0.10 Notice of Adjustment.................................... 46
0.11 Notice of Certain Transactions.......................... 46
0.12 Effect of Reclassifications, Consolidations, Mergers,
Binding Share Exchanges or Sales on Conversion Privilege 47
0.13 Trustee's Disclaimer.................................... 48
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XI. SUBORDINATION
1.01 Agreement to Subordinate................................ 48
1.02 Certain Definitions..................................... 48
1.03 Liquidation; Dissolution; Bankruptcy.................... 49
1.04 Company Not To Make Payments with Respect to Securities
in Certain Circumstances................................ 49
1.05 Acceleration of Securities.............................. 50
1.06 When Distribution Must Be Paid Over..................... 50
1.07 Notice by Company....................................... 51
1.08 Subrogation............................................. 51
1.09 Relative Rights......................................... 51
1.10 Subordination May Not Be Impaired by Company............ 52
1.11 Distribution or Notice to Representative................ 52
1.12 Rights of Trustee and Paying Agent...................... 52
1.13 Officers' Certificate................................... 53
1.14 Not to Prevent Events of Default........................ 53
XII. MISCELLANEOUS
2.01 Trust Indenture Act Controls............................ 53
2.02 Notices. 53
2.03 Communication by Holders with Other Holders............. 54
2.04 Certificate and Opinion as to Conditions Precedent...... 54
2.05 Statements Required in Certificate or Opinion........... 54
2.06 Rules by Trustee and Agents............................. 55
2.07 Legal Holidays.......................................... 55
2.08 No Recourse Against Others.............................. 55
2.09 Duplicate Originals..................................... 55
2.10 Governing Law........................................... 55
2.11 No Adverse Interpretation of Other Agreements........... 56
2.12 Successors.............................................. 56
2.13 Separability............................................ 56
2.14 Table of Contents, Headings, etc........................ 56
Exhibit A - Form of Global Security
Exhibit B - Form of Legends
Exhibit C - Form of Transfer Certificate - Regulation S
Exhibit D - Form of Transfer Certificate - Registration Statement
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INDENTURE, dated as of May 8, 2002 between LENNOX INTERNATIONAL INC., a
Delaware corporation (the "Company"), and The Bank of New York, as trustee (the
"Trustee").
Each party agrees as follows for the benefit of the other parties and for
the equal and ratable benefit of the Holders of the Company's 6 1/4% Convertible
Subordinated Notes due 2009 (the "Securities").
I. DEFINITIONS AND INCORPORATION BY REFERENCE
1.01 DEFINITIONS.
"Affiliate" means any person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company. For
this purpose, "control" shall mean the power to direct the management and
policies of a person through the ownership of securities, by contract or
otherwise.
"Agent" means any Registrar, Paying Agent, Conversion Agent or
co-registrar.
"Board of Directors" means the Board of Directors of the Company or any
committee thereof authorized to act for it hereunder.
"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 its Board
of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Capital Stock" means any and all shares, interests, participations or
other equivalents (however designated) of capital stock of the Company and all
warrants or options to acquire such capital stock.
"Common Stock" means the common stock, par value $0.01 per share, of the
Company, or such other capital stock into which the Company's common stock is
reclassified or changed.
"Company" means the party named as such above until a successor replaces it
pursuant to the applicable provision hereof and thereafter means the successor.
"Company Request" or "Company Order" means a written request or order
signed on behalf of the Company by its Chairman of the Board, its Chief
Executive Officer, its President, its Chief Operating Officer, its Chief
Financial Officer, any Executive Vice President or any Vice President and by its
Treasurer or an Assistant Treasurer or its Secretary or an Assistant Secretary,
and delivered to the Trustee.
"Conversion Price" means the principal amount of Notes that can be
exchanged for one share of Common Stock, subject to the adjustments of the
conversion rate set forth in Section 10.06.
"Corporate Trust Office of the Trustee" shall be the principal office of
the Trustee at which at any time its corporate trust business shall be
administered, which office at the dated hereof is located at 101 Barclay Street,
1
New York, New York 10286, Attention: Corporate Trust Department, or such other
address as the Trustee may designate from time to time by notice to the Holders
and the Company, or the principal corporate trust office of any successor
Trustee (or such other address as such successor Trustee may designate from time
to time by notice to the Holders and the Company).
"Daily Market Price" means the price of a share of Common Stock on the
relevant date, determined (a) on the basis of the last reported sale price
regular way of the Common Stock as reported on the New York Stock Exchange (the
"NYSE"), or if the Common Stock is not then listed on the NYSE, as reported on
such national securities exchange upon which the Common Stock is listed, or (b)
if there is no such reported sale on the day in question, on the basis of the
average of the closing bid and asked quotations regular way as so reported, or
(c) if the Common Stock is not listed on the NYSE or on any national securities
exchange or automated quotation system, on the basis of the average of the high
bid and low asked quotations regular way on the day in question in the
over-the-counter market as reported by the National Association of Securities
Dealers Automated Quotation System, or if not so quoted, as reported by National
Quotation Bureau, Incorporated, or a similar organization.
"Default" means any event which is, or after notice or passage of time or
both would be, an Event of Default.
"Depositary" means The Depository Trust Company, its nominees and
successors.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exempt Person" means any member of the Norris family; provided that such
member does not participate in an extraordinary corporate transaction, such as a
merger or a going private transaction, the result of which is that the Common
Stock ceases to be listed on the NYSE or any other U.S. national securities
exchange or automated quotation system. "Norris Family" means all persons who
are lineal descendents of D.W. Norris (by birth or adoption), all spouses of
such descendents, all estates of such descendents or spouses which are in the
course of administration, all trusts for the benefit of such descendents or
spouses, and all corporations or other entities in which, directly or
indirectly, such descendents or spouses (either alone or in conjunction with
other such descendents or spouses) have the right, whether by ownership of stock
or other equity interests or otherwise, to direct the management and policies of
such corporations or other entities (each such person, spouse, estate, trust,
corporation or entity being referred to as a "member" of the Norris Family). In
addition, members of the Norris Family will not be counted as affiliates or
associates of any other person in determining beneficial ownership of a "group"
(as such term is used for purposes of Sections 13(d) and 14(d) of the Exchange
Act); provided that such member does not participate in an extraordinary
corporate transaction, such as a merger or a going private transaction, the
result of which is that the Common Stock ceases to be listed on the NYSE or any
other U.S. national securities exchange or automated quotation system.
"Holder" or "Securityholder" means a person in whose name a Security is
registered on the Registrar's books.
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"Indenture" means this Indenture as amended or supplemented from time to
time.
"Initial Purchasers" means UBS Warburg LLC, First Union Securities, Inc.
and J.P. Morgan Securities Inc.
"Interest" includes liquidated damages, unless the context otherwise
requires.
"Liquidated Damages" has the meaning provided in the Registration Rights
Agreement.
"Maturity Date" means June 1, 2009.
"Non-recourse Indebtedness" means Indebtedness upon the enforcement of
which recourse may be had by the holder(s) thereof only to identified assets of
the Company or any Subsidiary and not to the Company or any Subsidiary
personally.
"Non-u.s. Person" means a person who is not a U.S. person (as defined in
Regulation S pursuant to the Securities Act).
"Officer" means the Chairman of the Board, the Chief Executive Officer, the
President, the Chief Operating Officer, the Chief Financial Officer, any
Executive Vice 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 an Assistant Secretary of the Company.
"Opinion of Counsel" means a written opinion from legal counsel who may be
an employee of or counsel for the Company, or other counsel reasonably
acceptable to the Trustee.
"Person" means any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization or government or other agency or political subdivision thereof.
"Purchase Agreement" means the Purchase Agreement dated as of May 2, 2002
between the Company and the Initial Purchasers.
"QIB" means a "qualified institutional buyer" within the meaning of Rule
144A under the Act.
"Redemption Price" means, with respect to a Security to be redeemed by the
Company in accordance with Article III, the percentage of the outstanding
principal amount of such Security payable by the Company upon such redemption.
"Registration Rights Agreement" means the Registration Rights Agreement
dated as of May 8, 2002 between the Company and the Initial Purchasers.
"Regulation S" means Regulation S under the Securities Act.
3
"Regulation S Global Security" means a permanent Global Security in
registered form representing the aggregate principal amount of Securities sold
in reliance on Regulation S.
"Repurchase Price" means, with respect to a Security duly tendered for
purchase by the Company in accordance with Section 3.08, 100% of the outstanding
principal amount of such Security so tendered.
"Responsible Officer" shall mean, when used with respect to the Trustee,
any officer within the corporate trust department of the Trustee, including any
vice president, assistant vice president, assistant secretary, assistant
treasurer, trust officer or any other officer of the Trustee who customarily
performs functions similar to those performed by the Persons who at the time
shall be such officers, respectively, or to whom any corporate trust matter is
referred because of such person's knowledge of and familiarity with the
particular subject and who shall have direct responsibility for the
administration of this Indenture.
"Restricted Security" means a Security that constitutes a "restricted
security" within the meaning of Rule 144(a)(3) under the Securities Act;
provided, however, that the Trustee shall be entitled to request and
conclusively rely on an Opinion of Counsel with respect to whether any Security
constitutes a Restricted Security.
"Rule 144A" means Rule 144A under the Securities Act.
"Rule 144A Global Security" means a permanent Global Security in registered
form representing the aggregate principal amount of Securities sold in reliance
on Rule 144A.
"SEC" means the Securities and Exchange Commission.
"Securities" means the 6 1/4% Convertible Subordinated Notes due 2009
issued by the Company pursuant to this Indenture.
"Securities Act" means the Securities Act of 1933, as amended.
"Securityholder" has the meaning given to such term in the Registration
Rights Agreement.
"Subsidiary" means (i) a corporation a majority of whose capital stock with
voting power, under ordinary circumstances, to elect directors is at the time,
directly or indirectly, owned by the Company, by one or more subsidiaries of the
Company or by the Company and one or more of its subsidiaries or (ii) any other
person (other than a corporation) in which the Company, one or more its
subsidiaries or the Company and one or more its subsidiaries, directly or
indirectly, at the date of determination thereof, have at least majority
ownership interest.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code ss.ss.
77aaa-77bbbb) as in effect on the date of this Indenture, except as provided in
Section 9.03.
"Trustee" means the party named as such in this Indenture until a successor
replaces it in accordance with the provisions hereof and thereafter means the
successor.
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1.02 OTHER DEFINITIONS.
Term Defined in Section
---- ------------------
"Additional Securities"................................ 2.01
"Bankruptcy Law"....................................... 6.01
"business day"......................................... 12.07
"Change in Control".................................... 3.08
"Change in Control Notice"............................. 3.08
"Commencement Date".................................... 10.06
"Combined Amount"...................................... 10.06(d)
"Conversion Agent"..................................... 2.03
"Conversion Date"...................................... 10.02
"Conversion Shares".................................... 10.06(c)
"Custodian"............................................ 6.01
"Determination Date"................................... 10.06
"Distribution Date".................................... 10.06(c)
"Distribution Declaration Date"........................ 10.06(d)
"Event of Default"..................................... 6.01
"Expriation Time"...................................... 10.06(e)(2)
"Global Security"...................................... 2.01
"Indebtedness"......................................... 11.02
"Legal Holiday"........................................ 12.07
"Norris Family"........................................ 1.01
"NYSE"................................................. 1.01
"Participants"......................................... 2.15
"Paying Agent"......................................... 2.03
"Payment Blockage"..................................... 11.04
"Payment Blockage Notice".............................. 11.04
"Physical Securities".................................. 2.01
"Purchased Shares"..................................... 10.06(e)(i)
"Private Placement Legend"............................. 2.17
"Registrar"............................................ 2.03
"Representative"....................................... 11.02
"Repurchase Date"...................................... 3.08
"Repurchase Right"..................................... 3.08
"Rights"............................................... 10.06(c)
"Senior Indebtedness".................................. 11.02
"Triggering Distribution".............................. 10.06(d)
"U.S. Government Obligations".......................... 8.01
1.03 INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following meanings:
"Commission" means the SEC;
"indenture securities" means the Securities;
"indenture security holder" means a Securityholder or a Holder;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee; and
"obligor"
on the indenture securities means the Company or any successor.
5
All other terms used in this Indenture that are defined by the TIA, defined
by TIA reference to another statute or defined by SEC rule under the TIA and not
otherwise defined herein have the meanings so assigned to them.
1.04 RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(i) a term has the meaning assigned to it;
(ii) an accounting term not otherwise defined has the meaning assigned
to it in accordance with generally accepted accounting principles in effect
on the date hereof;
(iii) "or" is not exclusive;
(iv) words in the singular include the plural and in the plural
include the singular;
(v) provisions apply to successive events and transactions; and
(vi) "herein", "hereof" and other words of similar import refer to
this Indenture as a whole and not to any particular Article, Section or
other subdivision.
II. THE SECURITIES
2.01 FORM AND DATING.
The Securities and the Trustee's certificate of authentication shall be
substantially in the form set forth in Exhibit A, which is incorporated in and
forms a part of this Indenture. The Securities may have notations, legends or
endorsements required by law, stock exchange rule or usage. Each Security shall
be dated the date of its authentication.
Securities offered and sold in reliance on Rule 144A shall be issued
initially in the form of one or more United States global securities and
Securities offered and sold in reliance on Regulation S under the Securities Act
shall be issued initially in the form of one or more offshore global securities,
each such United States or offshore global security substantially in the form
set forth in Exhibit A (a "Global Security"), deposited with the Trustee, as
custodian for the Depositary, duly executed by the Company and authenticated by
the Trustee as hereinafter provided and bearing the legends set forth in
EXHIBITS B-1 and B-2. The aggregate principal amount of the Global Security may
from time to time be increased or decreased by adjustments made on the records
of the Trustee, as custodian for the Depositary, as hereinafter provided;
provided, that in no event shall the aggregate principal amount of the Global
Security or Securities exceed $125,000,000, or $143,750,000 if the Initial
Purchasers elect to purchase Additional Securities pursuant to the
over-allotment option provided for in Section 1 of the Purchase Agreement
("Additional Securities").
Securities issued in exchange for interests in a Global Security pursuant
to Section 2.15 may be issued in the form of permanent certificated
6
Securities in registered form in substantially the form set forth in
Exhibit A (the "Physical Securities") and, if applicable, bearing any legends
required by Section 2.17.
All Securities offered and sold in reliance on Regulation S shall remain in
the form of a Global Security for at least one year after the issue date for the
Securities. Notwithstanding the foregoing, in the event that Physical Securities
are issued in respect of beneficial interests in a Regulation S Global Security
at any time prior to one year after the date of this Indenture (other than in a
transaction subject to Rule 144A) the Company shall, as promptly as practicable,
institute procedures, including appropriate certifications reasonably designed
to ensure that any transfer of such Physical Securities prior to the end of such
one year is made only in accordance with Regulation S, pursuant to a
registration statement under the Securities Act or pursuant to an exemption from
registration under the Securities Act.
2.02 EXECUTION AND AUTHENTICATION.
One Officer shall sign the Securities for the Company by manual or
facsimile signature.
If an Officer whose signature is on a Security no longer holds that office
at the time the Security is authenticated, the Security shall nevertheless be
valid.
A Security shall not be valid until authenticated by the manual signature
of the Trustee. The signature shall be conclusive evidence that the Security has
been authenticated under this Indenture.
Upon a written order of the Company signed by one Officer of the Company,
the Trustee shall authenticate Securities for original issue in the aggregate
principal amount of $125,000,000 and such additional principal amount, if any,
as shall be determined pursuant to the next sentence of this Section 2.02. Upon
receipt by the Trustee of an Officers' Certificate stating that the Initial
Purchasers have elected to purchase from the Company a specified principal
amount of Additional Securities, not to exceed $18,750,000, pursuant to SECTION
1 of the Purchase Agreement, the Trustee shall authenticate and deliver such
specified principal amount of Additional Securities to or upon the written order
of the Company signed as provided in the immediately preceding sentence. Such
Officers' Certificate must be received by the Trustee not later than the
proposed date for delivery of such Additional Securities. Except as provided in
SECTION 2.07, the aggregate principal amount of Securities outstanding at any
time may not exceed $125,000,000, or $143,750,000 if the Initial Purchasers
elect to purchase Additional Securities pursuant to the over-allotment option
provided for in Section 1 of the Purchase Agreement.
Upon a written order of the Company signed by two Officers or by an Officer
and an Assistant Treasurer of the Company, the Trustee shall authenticate
Securities not bearing the Private Placement Legend to be issued to the
transferee when sold pursuant to an effective registration statement under the
Securities Act as set forth in Section 2.16(D).
The Trustee may appoint an authenticating agent acceptable to the Company
to authenticate Securities. An authenticating agent may authenticate
7
Securities whenever the Trustee may do so. Each reference in this Indenture
to authentication by the Trustee includes authentication by such Agent. An
authenticating agent has the same rights as an Agent to deal with the Company
and its Affiliates.
If a written order of the Company pursuant to this Section 2.02 of the
Indenture has been, or simultaneously is, delivered, any instructions by the
Company to the Trustee with respect to endorsement, delivery or redelivery of a
Security issued in global form shall be in writing but need not comply with
SECTION 12.04 hereof and need not be accompanied by an Opinion of Counsel.
The Securities shall be issuable only in registered form without interest
coupons and only in denominations of $1,000 principal amount and any positive
integral multiple thereof.
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 presented for conversion ("Conversion
Agent"). The Registrar shall keep a register of the Securities and of their
transfer and exchange. The Company may appoint or change one or more
co-registrars, one or more additional paying agents and one or more additional
conversion agents without notice and may act in any such capacity on its own
behalf. The term "REGISTRAR" includes any co-registrar; 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 Agent
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 Agent not a party to this Indenture. 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 Paying Agent, Registrar and
Conversion Agent.
2.04 PAYING AGENT TO HOLD MONEY IN TRUST.
Each Paying Agent shall hold in trust for the benefit of the
Securityholders or the Trustee all moneys held by the Paying Agent for the
payment of the Securities, and shall notify the Trustee of any default by the
Company in making any such payment. While any such default continues, the
Trustee may require a Paying Agent to pay all money held by it to the Trustee.
The Company at any time may require a Paying Agent to pay all money held by it
to the Trustee. Upon payment over to the Trustee, the Paying Agent shall have no
further liability for the money. If the Company acts as Paying Agent, it shall
segregate and hold as a separate trust fund all money held by it as Paying
Agent.
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
8
of Securityholders. If the Trustee is not the Registrar, the Company shall
furnish to the Trustee on or before each interest payment date and at such other
times as the Trustee may request in writing a list, in such form and as of such
date as the Trustee may reasonably require, of the names and addresses of
Securityholders.
2.06 TRANSFER AND EXCHANGE.
Subject to Sections 2.15 and 2.16 hereof, where Securities are presented to
the Registrar with a request to register their transfer or to exchange them for
an equal principal amount of Securities of other authorized denominations, the
Registrar shall register the transfer or make the exchange if its requirements
for such transaction are met. To permit registrations of transfer and exchanges,
the Trustee shall authenticate Securities at the Registrar's request. The
Company or the Trustee, as the case may be, shall not be required (a) to issue,
authenticate, register the transfer of or exchange any Security during a period
beginning at the opening of business 15 days before the mailing of a notice of
redemption of the Securities selected for redemption under Section 3.04 and
ending at the close of business on the day of such mailing or (b) to register
the transfer of or exchange any Security so selected for redemption or
repurchase in whole or in part, except the unredeemed or unrepurchased portion
of Securities being redeemed or repurchased in part.
No service charge shall be made for any transfer, exchange or conversion of
Securities, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in connection with any
transfer, exchange or conversion of Securities, other than exchanges pursuant to
Sections 2.10, 3.07, 3.08, 9.05 or 10.02 not involving any transfer.
2.07 REPLACEMENT SECURITIES.
If the Holder of a Security claims that the Security has been mutilated,
lost, destroyed or wrongfully taken, the Company shall issue and the Trustee
shall authenticate a replacement Security if the Trustee's requirements are met
and, in the case of a mutilated Security, such mutilated Security is surrendered
to the Trustee. In the case of lost, destroyed or wrongfully taken Securities,
if required by the Trustee, an indemnity bond must be provided by the Holder
that is sufficient in the judgment of the Trustee to protect the Company, the
Trustee or any Agent from any loss which any of them may suffer if a Security is
replaced. The Trustee may charge for its expenses in replacing a Security.
In case any such mutilated, lost, destroyed or wrongfully taken Security
has become or is about to become due and payable, the Company in its discretion
may, instead of issuing a new Security, pay such Security when due.
Every replacement Security is an additional obligation of the Company only
as provided in Section 2.08.
2.08 OUTSTANDING SECURITIES.
Securities outstanding at any time are all the Securities authenticated by
the Trustee except for those converted, those cancelled by it, those
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delivered to it for cancellation and those described in this Section 2.08
as not outstanding. Except to the extent provided in Section 2.09, a Security
does not cease to be outstanding because the Company or one of its subsidiaries
or 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, or a court
holds, that the replaced Security is held by a protected purchaser.
If the Paying Agent (other than the Company) holds on a redemption date,
Repurchase Date or maturity date money sufficient to pay Securities payable on
that date, then on and after that date, interest on them shall cease to accrue
whether or not the Security is delivered to the Paying Agent. Thereafter, all
other rights of the Holders of such Securities shall terminate with respect to
such Securities, other than the right to receive the Redemption Price,
Repurchase Price or principal amount, as applicable.
2.09 SECURITIES HELD BY THE COMPANY OR AN AFFILIATE.
In determining whether the Holders of the required aggregate principal
amount of Securities have concurred in any direction, waiver or consent,
Securities owned by the Company or any of its subsidiaries or an Affiliate shall
be considered as though not outstanding, 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 a Responsible Officer of the
Trustee actually knows are so owned shall be so disregarded.
The Company or its subsidiaries may, to the extent permitted by law,
purchase Securities in the open market or by tender offer at any price or by
private agreement. Any Securities purchased by the Company or its subsidiaries
may, to the extent permitted by law, be reissued or resold or may, at the
Company's option or the option of such subsidiary, be surrendered to the Trustee
for cancellation.
2.10 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.
2.11 CANCELLATION.
The Company at any time may deliver Securities to the Trustee for
cancellation. The Registrar, Paying Agent and Conversion Agent shall forward to
the Trustee any Securities surrendered to them for transfer, exchange, payment
or conversion. The Trustee shall cancel all Securities surrendered for transfer,
exchange, payment, conversion or cancellation in accordance with its customary
procedures. The Company may not issue new Securities to replace Securities that
it has paid or delivered to the Trustee for cancellation or that any
Securityholder has converted pursuant to Article X.
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2.12 DEFAULTED INTEREST.
If and to the extent the Company defaults in a payment of interest on the
Securities, the Company shall pay the defaulted interest in any lawful manner
plus, to the extent not prohibited by applicable statute or case law, interest
payable on the defaulted interest at the rate provided in the Securities. The
Company may pay the defaulted interest to the persons who are Securityholders on
a subsequent special record date. The Company shall fix such record date and
payment date. At least 15 days before the record date, the Company shall mail to
Securityholders a notice that states the record date, payment date and amount of
interest to be paid.
2.13 CUSIP NUMBERS.
The Company in issuing the Securities may use one or more "CUSIP" numbers,
and if so, the Trustee shall use the CUSIP numbers in notices of redemption or
exchange as a convenience to Holders; provided, however, that no representation
is hereby deemed to be made by the Trustee as to the correctness or accuracy of
the CUSIP numbers printed in the notice or on the Securities, and that reliance
may be placed only on the other identification numbers printed on the
Securities. The Company shall promptly notify the Trustee of any change in the
CUSIP numbers.
2.14 DEPOSIT OF MONEYS.
Prior to 11:00 A.M., New York City time, on each interest payment date,
maturity date, redemption date and Repurchase Date, the Company shall have
deposited with the Paying Agent in immediately available funds money sufficient
to make cash payments, if any, due on such interest payment date, maturity date,
redemption date and Repurchase Date, as the case may be, in a timely manner
which permits the Paying Agent to remit payment to the Holders on such interest
payment date, maturity date, redemption date and Repurchase Date, as the case
may be.
2.15 BOOK-ENTRY PROVISIONS FOR GLOBAL SECURITIES.
(A) The Global Securities initially shall (i) be registered in the name of
the Depositary or the nominee of such Depositary, (ii) be delivered to the
Trustee as custodian for such Depositary and (iii) bear legends as set forth in
Section 2.17.
Members of, or participants in, the Depositary ("Participants") shall have
no rights under this Indenture with respect to any Global Security held on their
behalf by the Depositary, or the Trustee as its custodian, or under the Global
Security, and the Depositary may be treated by the Company, the Trustee and any
agent of the Company or the Trustee as the absolute owner of the Global Security
for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall
prevent the Company, the Trustee or any agent of the Company or the Trustee from
giving effect to any written certification, proxy or other authorization
furnished by the Depositary or impair, as between the Depositary and
Participants, the operation of customary practices governing the exercise of the
rights of a Holder of any Security.
(B) Transfers of Global Securities shall be limited to transfers in whole,
but not in part, to the Depositary, its successors or their respective
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nominees. In addition, Physical Securities shall be transferred to all
beneficial owners in exchange for their beneficial interests in Global
Securities if (i) the Depositary notifies the Company that it is unwilling or
unable to continue as Depositary for any Global Security and a successor
Depositary is not appointed by the Company within 90 days of such notice or
(ii) an Event of Default has occurred and is continuing and the Registrar has
received a written request from the Depositary to issue Physical Securities.
(C) In connection with the transfer of a Global Security in its entirety
to beneficial owners pursuant to Section 2.15(B), such Global Security
shall be deemed to be surrendered to the Trustee for cancellation, and the
Company shall execute, and the Trustee shall upon written instructions from the
Company authenticate and deliver, to each beneficial owner identified by the
Depositary in exchange for its beneficial interest in such Global Security, an
equal aggregate principal amount of Physical Securities of authorized
denominations.
(D) Any Physical Security constituting a Restricted Security delivered in
exchange for an interest in a Global Security pursuant to Section 2.15(B) shall,
except as otherwise provided by Section 2.16, bear the Private Placement Legend
(as defined).
(E) The Holder of any Global Security may grant proxies and otherwise
authorize any Person, including Participants and Persons that may hold interests
through Participants, to take any action which a Holder is entitled to take
under this Indenture or the Securities.
2.16 SPECIAL TRANSFER PROVISIONS.
(A) Transfers to Non-U.S. Persons. The following provisions shall apply
with respect to the registration of any proposed transfer of a Restricted
Security to any Non-U.S. Person:
(i) the Registrar shall register the transfer of any Restricted
Security, whether or not such Security bears the Private Placement
Legend, if (x) the requested transfer is after the second anniversary
of the issue date for the Securities; provided, however, that neither
the Company nor any of its Affiliates has held any beneficial interest
in such Security, or portion thereof, at any time on or prior to the
second anniversary of the issue date for the Securities or (y) the
proposed transferor has delivered to the Registrar certificates
substantially in the form of Exhibit C-1 and Exhibit C-2 hereto; and
(ii) if the proposed transferor is a Participant seeking to
transfer an interest in one Global Security to a transferee who will
hold such interest in another Global Security, upon receipt by the
Registrar of (x) written instructions given in accordance with the
Depositary's and the Registrar's procedures and (y) the appropriate
certificates and other documents, if any, required by clause (y) of
paragraph (i) above, the Registrar shall register the transfer and
reflect on its books and records the date and (A) a decrease in the
aggregate principal amount of the Global Security through which the
transferor held such interest in an amount equal to the aggregate
principal amount of the Securities to be transferred and (B) an
increase in the aggregate principal amount of
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the Global Security through which the transferee proposes to hold such
interest, in an amount equal to the aggregate principal amount of the
Securities to be transferred.
(B) Transfers to QIBs. The Following provisions shall apply with respect
to the registration of any proposed transfer of a Restricted Security to a QIB:
(i) the Registrar shall register the transfer of any Restricted
Security, whether or not such Security bears the Private Placement
Legend, if (x) the requested transfer is after the second anniversary
of the issue date for the Securities; provided, however, that neither
the Company nor any of its Affiliates has held any beneficial interest
in such Security, or portion thereof, at any time on or prior to the
second anniversary of the issue date for the Securities or (y) such
transfer is being made by a proposed transferor who has checked the
box provided for on the form of Security stating, or has otherwise
advised the Company and the Registrar in writing, that the sale has
been made in compliance with the provisions of Rule 144A to a
transferee who has signed the certification provided for on the form
of Security stating, or has otherwise advised the Company and the
Registrar in writing, that it is purchasing the Security for its own
account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a QIB within
the meaning of Rule 144A, and is aware that the sale to it is being
made in reliance on Rule 144A and acknowledges that it has received
such information regarding the Company as it has requested pursuant to
Rule 144A or has determined not to request such information and that
it is aware that the transferor is relying upon its foregoing
representations in order to claim the exemption from registration
provided by Rule 144A; and
(ii) if the proposed transferor is a Participant seeking to
transfer an interest in one Global Security to a transferee who will
hold such interest in another Global Security, upon receipt by the
Registrar of (x) written instructions given in accordance with the
Depositary's and the Registrar's procedures and (y) the appropriate
certificates and other documents, if any, required by clause (y) of
paragraph (i) above, the Registrar shall register the transfer and
reflect on its books and records the date and (A) a decrease in the
aggregate principal amount of the Global Security through which the
transferor held such interest in an amount equal to the aggregate
principal amount of the Securities to be transferred and (B) an
increase in the aggregate principal amount of the Global Security
through which the transferee proposes to hold such interest, in an
amount equal to the aggregate principal amount of the Securities to be
transferred.
(C) Restrictions on Transfer and Exchange of Global Securities.
Notwithstanding any other provisions of this Indenture, a Global Security may
not be transferred except as a whole by the Depositary to a nominee of the
Depositary or by a nominee of the
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Depositary to the Depositary or another nominee of the Depositary or by the
Depositary or any such nominee to a successor Depositary or a nominee of such
successor Depositary.
(D) Private Placement Legend. Upon the transfer, exchange or replacement
of Securities not bearing the Private Placement Legend, the Registrar or
co-Registrar shall deliver Securities that do not bear the Private Placement
Legend. Upon the transfer, exchange or replacement of Securities bearing the
Private Placement Legend, the Registrar or co-Registrar shall deliver only
Securities that bear the Private Placement Legend unless (i) the requested
transfer is after the second anniversary of the issue date for the Securities
(provided, however, that neither the Company nor any of its Affiliates has held
any beneficial interest in such Security, or portion thereof, at any time prior
to or on the second anniversary of the issue date), (ii) there is delivered to
the Trustee an Opinion of Counsel reasonably satisfactory to the Trustee to the
effect that neither such legend nor the related restrictions on transfer are
required in order to maintain compliance with the provisions of the Securities
Act or (iii) such Security has been sold pursuant to an effective registration
statement under the Securities Act and the Holder selling such Securities has
delivered to the Registrar or co-Registrar a notice in the form of Exhibit D
hereto. Upon the effectiveness of the Shelf Registration Statement (as defined
in the Registration Rights Agreement), the Company shall deliver to the Trustee
a notice of effectiveness, a Security or Securities, an authentication order in
accordance with Section 2.02 and an Opinion of Counsel reasonably satisfactory
to the Trustee and, if required by the Depositary, the Company shall deliver to
the Depositary a letter of representations in a form reasonably acceptable to
the Depositary.
(E) General. By its acceptance of any Security bearing the Private
Placement Legend, each Holder of such a Security acknowledges the restrictions
on transfer of such Security set forth in this Indenture and in the Private
Placement Legend and agrees that it will transfer such Security only as provided
in this Indenture.
The Registrar shall retain copies of all letters, notices and other written
communications received pursuant to Section 2.15 or this Section 2.16. The
Company shall have the right to inspect and make copies of all such letters,
notices or other written communications at any reasonable time upon the giving
of reasonable written notice to the Registrar.
(F) Transfers of Securities Held by Affiliates. Any certificate (i)
evidencing a Security that has been transferred to an Affiliate of the Company
within two years after the issue date for the Securities, as evidenced by a
notation on the Assignment Form for such transfer or in the representation
letter delivered in respect thereof or (ii) evidencing a Security that has been
acquired from an Affiliate (other than by an Affiliate) in a transaction or a
chain of transactions not involving any public offering, shall, until two years
after the last date on which the Company or any Affiliate of the Company was an
owner of such Security, in each case, bear the Private Placement Legend, unless
otherwise agreed by the Company (with written notice thereof to the Trustee).
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2.17 RESTRICTIVE LEGENDS.
Each Global Security and Physical Security that constitutes a Restricted
Security shall bear the legend (the "Private Placement Legend") as set forth in
Exhibit B-1 on the face thereof until after the second anniversary of the later
of (i) the issue date for the Securities, (ii) the last date on which the
Company or any Affiliate of the Company was the owner of such Security (or any
predecessor security) (or such shorter period of time as permitted by Rule
144(k) under the Securities Act or any successor provision thereunder) (or such
longer period of time as may be required under the Securities Act or applicable
state securities laws in the opinion of counsel for the Company, unless
otherwise agreed between the Company and the Holder thereof).
Each Global Security shall also bear the legend as set forth in Exhibit
B-2.
III. REDEMPTION
3.01 RIGHT OF REDEMPTION.
Redemption of the Securities, as permitted by any provision of this
Indenture, shall be made in accordance with paragraphs 6 and 7 and, with respect
to any repurchase upon a Change in Control, paragraph 8 of the Securities, and
in each case in accordance with this Article III. The Company will not have the
right to redeem any Securities prior to June 3, 2005. On or after June 3, 2005,
the Company will have the right to redeem all or any part of the Securities at
the Redemption Prices specified in paragraph 6 therein under the caption
"Redemption Price," in each case including accrued and unpaid interest, if any,
to, but excluding, the redemption date; provided that the Daily Market Price of
the Company's Common Stock has exceeded 130% of the Conversion Price then in
effect for at least 20 trading days within a period of 30 consecutive trading
days ending on the trading day prior to the date of mailing of notice of
redemption as required under pursuant to Section 3.04.
3.02 NOTICES TO TRUSTEE.
If the Company elects to redeem Securities pursuant to paragraph 6 of the
Securities, it shall notify the Trustee at least 15 days prior to the mailing of
the notice of redemption (unless a shorter notice period shall be satisfactory
to the Trustee) of the redemption date and the aggregate principal amount of
Securities to be redeemed.
3.03 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 on a pro rata basis. The Trustee shall make
the selection from Securities outstanding not previously called for redemption.
The Trustee may select for redemption portions of the principal of Securities
that have denominations larger than $1,000 principal amount. Securities and
portions of them it selects shall be in amounts of $1,000 principal amount or
positive integral multiples of $1,000 principal amount. The Trustee shall
promptly notify the Company in writing of the Securities selected for redemption
and the principal amount thereof to be redeemed.
The Registrar need not transfer or exchange any Securities selected for
redemption, except the unredeemed portion of the Securities redeemed in part.
Also, the Registrar need not transfer or exchange any Securities for a period of
15 days before selecting Securities to be redeemed.
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The Registrar need not, if a redemption is to occur after a regular record
date but on or before the corresponding interest payment date, register the
transfer or exchange of any Security after the regular record date and before
the date of redemption.
3.04 NOTICE OF REDEMPTION.
At least 30 days but not more than 60 days before a redemption date, the
Company shall mail by first-class mail a notice of redemption to each Holder
whose Securities are to be redeemed.
The notice shall identify the Securities and the aggregate principal amount
thereof to be redeemed and shall state:
(i) the redemption date;
(ii) the Redemption Price, plus the amount of accrued and unpaid
interest to be paid on the Securities called for redemption;
(iii) the then current conversion rate and Conversion Price;
(iv) the name and address of the Paying Agent and Conversion
Agent;
(v) the date on which the right to convert the principal of the
Securities called for redemption will terminate and the place or
places where such Securities may be surrendered for conversion;
(vi) that Holders who want to convert Securities must satisfy the
requirements in Article X;
(vii) the paragraph of the Securities pursuant to which the
Securities are to be redeemed;
(viii) that Securities called for redemption must be surrendered
to the Paying Agent to collect the Redemption Price;
(ix) that unless the Company shall default in the payment of the
Redemption Price, interest on Securities called for redemption ceases
to accrue on and after the redemption date and that the Securities
will cease to be convertible after the close of business on the
business day immediately preceding the redemption date; and
(x) the CUSIP number or numbers, as the case may be, of the
Securities.
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The date on which the right to convert the principal of the Securities
called for redemption will terminate shall be at the close of business on the
business day immediately preceding the redemption date.
At the Company's request, upon reasonable prior notice, the Trustee shall
give the notice of redemption in the Company's name and at the Company's
expense; provided that the form and content of such notice shall be prepared by
the Company.
3.05 EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is mailed, Securities called for redemption
become due and payable on the redemption date at the Redemption Price plus
accrued and unpaid interest to the date of redemption, and, on and after such
date (unless the Company shall default in the payment of the Redemption Price),
such Securities shall cease to bear interest. Upon surrender to the Paying
Agent, such Securities shall be paid at the Redemption Price plus accrued
interest to, but excluding, the redemption date, unless the redemption date is
an interest payment date, in which case the accrued interest will be paid in the
ordinary course.
3.06 DEPOSIT OF REDEMPTION PRICE.
On or before the redemption date, the Company shall deposit with the Paying
Agent money in funds immediately available on the redemption date sufficient to
pay the Redemption Price of and accrued interest on all Securities to be
redeemed on that date. The Paying Agent shall return to the Company, as soon as
practicable, any money not required for that purpose.
3.07 SECURITIES REDEEMED IN PART.
Upon surrender of a Security that is redeemed in part, the Company shall
execute and the Trustee shall authenticate for the Holder a new Security or
Securities in an aggregate principal amount equal to the unredeemed portion of
the Security surrendered.
If any Security selected for partial redemption is converted in part, the
converted portion of such Security shall be deemed to be the portion selected
for redemption.
3.08 REPURCHASE AT OPTION OF HOLDER UPON A CHANGE IN CONTROL.
Upon any Change in Control (as defined below) with respect to the Company,
each Holder of Securities shall have the right (the "Repurchase Right"), at the
Holder's option, subject to the rights of the holders of Senior Indebtedness
under Article XI of this Indenture, to require the Company to repurchase all of
such Holder's Securities, or a portion thereof which is $1,000 in principal
amount or any positive integral multiple thereof, on the date (the "Repurchase
Date") that is no later than 30 business days after the date of the mailing of
the Change in Control Notice (as defined below) at the Repurchase Price set
forth in paragraph 8 of the Securities, plus accrued and unpaid interest, if
any, to, but excluding, the Repurchase Date.
Within 30 business days after the occurrence of a Change in Control of the
Company, the Company shall mail to all Holders of record of the
17
Securities a notice (the "Change in Control Notice") of the occurrence of such
Change in Control and the Repurchase Right arising as a result thereof. The
Company shall deliver a copy of the Change in Control Notice to the Trustee and
the Company shall issue a press release including the information required in
the Change of Control Notice. To exercise the Repurchase Right, a Holder of
Securities must deliver on or before the close of business on the third business
day immediately preceding the Repurchase Date written notice to the Company (or
an agent designated by the Company for such purpose), and the Trustee of the
Holder's exercise of such right together with the Securities with respect to
which the right is being exercised, duly endorsed for transfer.
Each Change in Control Notice shall state:
(i) the events causing the Change in Control;
(ii) the date of such Change in Control;
(iii) the Repurchase Date;
(iv) the date by which the Repurchase Right must be exercised;
(v) the Repurchase Price, plus the amount of accrued interest to
be paid on the Securities to be repurchased;
(vi) the name and address of the Paying Agent and the Conversion
Agent;
(vii) a description of the procedure which a Holder must follow
to exercise a Repurchase Right;
(viii) that, in order to exercise the Repurchase Right, the
Securities are to be surrendered for payment of the Repurchase Price;
(ix) that Holders will be entitled to withdraw their election if
the Company (if acting as its own Paying Agent), or the Paying Agent
receives, not later than the close of business on the business day
immediately preceding the Repurchase Date, or such longer period as
may be required by law, a letter or telegram, telex or facsimile
transmission (receipt of which is confirmed and promptly followed by a
letter) setting forth the name of the Holder, the principal amount of
Securities the Holder delivered for purchase and a statement that such
Holder is withdrawing his election to have such Securities
repurchased, the certificate numbers of such Securities being
withdrawn, if applicable, and the principal amount, if any, of the
Securities that remain subject to a Change in Control Notice and that
Securities with respect to which a Change in Control purchase notice
is given by the Holder may be converted, if otherwise convertible,
only if the Change in Control purchase notice has been withdrawn in
accordance with the terms hereof;
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(x) the then existing conversion rate, and any adjustment to the
conversion rate that will result from the Change in Control;
(xi) the place or places where such Securities may be surrendered
for conversion; and
(xii) the CUSIP number or numbers, as the case may be, of the
Securities.
No failure of the Company to give the foregoing notice shall limit any
Holder's right to exercise a Repurchase Right.
To exercise a Repurchase Right, a Holder shall deliver to the Company (if
it is acting as its own Paying Agent), or to a Paying Agent designated by the
Company for such purpose in the Change in Control Notice within the period set
forth in the second paragraph of this Section 3.08, (i) the Option of Holder To
Elect Purchase Notice on the back of the Securities with respect to which the
Repurchase Right is being exercised, or any other form of written notice
substantially similar to the Option of Holder To Elect Purchase Notice, in each
case, duly completed and signed, with appropriate signature guarantee, and (ii)
such Securities with respect to which the Repurchase Right is being exercised,
duly endorsed for transfer to the Company and the Holder of such Securities
shall be entitled to receive from the Company (if it is acting as its own Paying
Agent), or such Paying Agent a nontransferable receipt of deposit evidencing
such deposit.
In the event a Repurchase Right shall be exercised in accordance with the
terms hereof, the Company shall pay or cause to be paid the applicable
Repurchase Price (plus accrued and unpaid interest) with respect to the
Securities as to which the Repurchase Right shall have been exercised to the
Holder on the Repurchase Date, subject to the provisions of the immediately
preceding paragraph.
On or prior to a Repurchase Date, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its own Paying
Agent, segregate and hold in trust in accordance with Section 2.04) an amount of
money (to be available on the Repurchase Date) sufficient to pay the Repurchase
Price (plus accrued and unpaid interest) of all of the Securities which are to
be repurchased on that date.
Both the Change in Control Notice and the notice of the Holder to exercise
a Repurchase Right having been duly given as specified in this Section 3.08, the
Securities so to be repurchased shall, on the Repurchase Date, become due and
payable at the Repurchase Price applicable thereto (plus accrued and unpaid
interest) and from and after such date (unless there shall be a default in the
payment of the Repurchase Price) such Securities shall cease to bear interest
and shall cease to be convertible. Upon surrender of any such Security for
repurchase in accordance with said notice, such Security shall be paid by the
Company at the Repurchase Price (plus accrued and unpaid interest).
If any Security shall not be paid upon surrender thereof for repurchase,
the principal shall, until paid, bear interest from the Repurchase Date at the
rate borne by such Security on the principal amount of such Security and shall
continue to be convertible.
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Any Security which is to be submitted for repurchase only in part shall be
delivered pursuant to this Section 3.08 (with, if the Company or the Trustee so
requires, due endorsement by, or a written instrument of transfer in form
satisfactory to the Company and the Trustee duly executed by the Holder thereof
or its attorney duly authorized in writing), and the Company shall execute, and
the Trustee shall authenticate and make available for delivery to the Holder of
such Security without service charge, a new Security or Securities, of any
authorized denomination as requested by such Holder, of the same tenor and in
aggregate principal amount equal to the portion of such Security not submitted
for repurchase.
Notwithstanding anything herein to the contrary, (i) if the option granted
to Securityholders to require the repurchase of the Securities upon the
occurrence of a Change in Control is determined to constitute a tender offer,
the Company will comply with all applicable tender offer rules under the
Exchange Act, including Rules 13e-4 and 14e-1, and file Schedule TO or any other
schedules required under the Exchange Act and (ii) the Company may not purchase
Securities at the option of Holders upon a Change in Control if there has
occurred and is continuing an Event of Default with respect to the Securities,
other than a Default in the payment of the Change in Control purchase price with
respect to the Securities.
As used in this Section 3.08 of the Indenture and in the Securities:
A "Change in Control" of the Company shall be deemed to have occurred at
such time as:
(i) any "person" or "group" (as such terms are used for purposes
of Sections 13(d) and 14(d) of the Exchange Act), other than an Exempt
Person, is or becomes the "beneficial owner" (as such term is used in
Rule 13d-3 under the Exchange Act), directly or indirectly, of 50% or
more of the voting power of the Company's Common Stock;
(ii) the individuals who on the issue date of the Securities
constituted the Company's Board of Directors and any new directors
whose election by the Company's Board of Directors or whose nomination
for election by the Company's stockholders was approved by at least a
majority of the directors then still in office who were either
directors on the issue date of the Securities or whose election or
nomination for election was previously so approved cease for any
reason to constitute a majority of the Company's Board of Directors ;
or
(iii) the sale, lease or transfer of all or substantially all of
the assets and property of the Company to any "person" or "group" (as
such terms are used in Sections 13(d) and 14(d) of the Exchange Act),
including any group acting for the purpose of acquiring, holding or
disposing of securities within the meaning of Rule 13d-5(b)(1) under
the Exchange Act; provided that the grant of a security interest in
the Company's properties or assets in connection with a financing
arrangement is not a conveyance, transfer or lease for the purposes of
this subsection (iii).
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However, a Change in Control will not be deemed to have occurred if either:
(X) the Daily Market Price of the Company's Common Stock for any
five trading days during the ten trading days immediately
preceding the Change in Control is at least equal to 105% of
the then effective Conversion Price on such trading date; or
(Y) in the case of a merger or consolidation, all of the
consideration (excluding cash payments for fractional shares
and cash payments pursuant to dissenters' appraisal rights)
in the merger or consolidation constituting the Change in
Control consists of common stock traded on a U.S. national
securities exchange or quoted on the Nasdaq National Market
(or which will be so traded or quoted when issued or
exchanged in connection with such Change in Control) and as
a result of such transaction or transactions the Securities
become convertible solely into such common stock and any
such other consideration.
3.09 CONVERSION ARRANGEMENT ON CALL FOR REDEMPTION.
In connection with any redemption of Securities, the Company may arrange,
in lieu of redemption, for the purchase and conversion of any Securities called
for redemption by an agreement with one or more investment bankers or other
purchasers to purchase all or a portion of such Securities by paying to the
Trustee in trust for the Holders whose Securities are to be so purchased, on or
before the close of business on the redemption date, an amount that, together
with any amounts deposited with the Trustee by the Company for redemption of
such Securities, is not less than the Redemption Price, together with interest,
if any, accrued to the redemption date, of such Securities. Notwithstanding
anything to the contrary contained in this Article III, the obligation of the
Company to pay the Redemption Price of such Securities, including all accrued
interest, if any, shall be deemed to be satisfied and discharged to the extent
such amount is so paid by such purchasers, but no such agreement shall relieve
the Company of its obligation to pay such Redemption Price and such accrued
interest, if any. If such an agreement is entered into, any Securities not duly
surrendered for conversion by the Holders thereof may, at the option of the
Company, be deemed, to the fullest extent permitted by law, acquired by such
purchasers from such Holders and (notwithstanding anything to the contrary
contained in Article X) surrendered by such purchasers for conversion, all as of
immediately prior to the close of business on the redemption date, subject to
payment of the above amount as aforesaid. The Trustee shall hold and pay to the
Holders whose Securities are selected for redemption any such amount paid to it
for purchase and conversion in the same manner as it would moneys deposited with
it by the Company for the redemption of Securities. Without the Trustee's prior
written consent, no arrangement between the Company and such purchasers for the
purchase and conversion of any Securities shall increase or otherwise affect any
of the powers, duties, rights, immunities, responsibilities or obligations of
the Trustee as set forth in this Indenture, and the Company agrees to indemnify
the Trustee from, and hold it harmless against, any and all loss, liability or
expense arising out of or in connection with any such arrangement for the
purchase and conversion of any Securities between the Company and such
purchasers, including the costs and expenses (including counsel fees and
expenses) incurred by the Trustee in the defense of any claim or liability
arising out of or in connection with the exercise or performance of any of its
powers, duties, responsibilities or obligations
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under this Indenture except to the extent arising from its bad faith, willful
misconduct or negligence.
IV. COVENANTS
4.01 PAYMENT OF SECURITIES.
The Company shall pay all amounts due with respect to the Securities on the
dates and in the manner provided in the Securities. All such amounts shall be
considered paid on the date due if the Paying Agent holds (or, if the Company is
acting as Paying Agent, if the Company has segregated and holds in trust in
accordance with Section 2.04) on that date money sufficient to pay the amount
then due with respect to the Securities.
The Company shall pay interest on any overdue amount (including, to
the extent permitted by applicable law, overdue interest) at the rate borne by
the Securities.
4.02 MAINTENANCE OF OFFICE OR AGENCY.
The Company will maintain in the Borough of Manhattan, the City of New
York, an office or agency (which may be an office of the Trustee or an affiliate
of the Trustee, Registrar or co-Registrar) where Securities may be surrendered
for registration of transfer or exchange or conversion and where notices and
demands to or upon the Company in respect of the Securities and this Indenture
may be served. The Company will give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust
Office of the Trustee.
The Company may also from time to time designate one or more other offices
or agencies where the Securities may be presented or surrendered for any or all
such purposes and may from time to time rescind such designations; provided,
however, that no such designation or rescission shall in any manner relieve the
Company of its obligation to maintain an office or agency in the Borough of
Manhattan, the City of New York for such purposes. The Company will give prompt
written notice to the Trustee of any such designation or rescission and of any
change in the location of any such other office or agency.
The Company hereby designates the Corporate Trust Office of the Trustee as
an agency of the Company in accordance with Section 2.03.
4.03 REPORTS.
(A) The Company (at its own expense) will deliver to the Trustee within 15
days after the filing of the same with the Commission, copies of the quarterly
and annual reports and of the information, documents and other reports, if any,
which the Company may be required to file with the Commission pursuant to
Section 13 or 15(d) of the Exchange Act or which it furnishes to its
stockholders. In addition, the Company will promptly provide to the Trustee and
shall, upon request, provide to any Holder or beneficial owner of Securities or
prospective purchaser of Securities that so requests, the information required
to be delivered pursuant to Rule 144A(d)(4) until such time as the Securities
and the underlying Common Stock have been registered by the Company for resale
under the Securities Act pursuant to the Registration Rights Agreement. In
addition, the Company will furnish such Rule
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144A(d)(4) information if, at any time while the Securities or the Common Stock
issuable upon conversion of the Securities are restricted securities within the
meaning of the Securities Act, the Company is not subject to the informational
requirements of the Exchange Act.
(B) The Company will comply with the provisions of TIA ss. 314(a).
(C) Delivery of such reports, information and documents to the Trustee is
for informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on the Officers' Certificate).
4.04 COMPLIANCE CERTIFICATE.
The Company shall deliver to the Trustee within 120 days after the end of
each fiscal year of the Company an Officers' Certificate stating whether or not
the signers know of any Default or Event of Default by the Company in performing
any of its obligations under this Indenture or the Securities. If they do know
of any such Default or Event of Default, the certificate shall describe the
Default or Event of Default and its status.
4.05 STAY, EXTENSION AND USURY LAWS.
The Company covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay, extension or usury law wherever
enacted, now or at any time hereafter in force, which may affect the covenants
or the performance of this Indenture; and the Company (in each case, to the
extent that it may lawfully do so) hereby expressly waives all benefit or
advantage of any such law, and covenants that it will not, by resort to any such
law, hinder, delay or impede the execution of any power herein granted to the
Trustee, but will suffer and permit the execution of every such power as though
no such law has been enacted.
4.06 CORPORATE EXISTENCE.
Subject to Article V, the Company will do or cause to be done all things
necessary to preserve and keep in full force and effect its corporate existence
in accordance with its organizational documents and the rights (charter and
statutory), licenses and franchises of the Company.
4.07 NOTICE OF DEFAULT.
In the event that any Default or Event of Default shall occur, the
Company will give prompt written notice of such Default or Event of Default to
the Trustee setting forth the details of such Default or Event of Default and
the action the Company proposes to take with respect thereto.
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V. SUCCESSORS
5.01 WHEN COMPANY MAY MERGE, ETC.
The Company shall not consolidate with or merge into, or transfer or lease
all or substantially all of its properties and assets to, another person unless
such other person is a corporation organized under the laws of the United
States, any State thereof or the District of Columbia; such person assumes by
supplemental indenture all the obligations of the Company, under the Securities
and this Indenture; and immediately after giving effect to the transaction, no
Default or Event of Default shall exist.
The Company shall deliver to the Trustee prior to the consummation of the
proposed transaction an Officers' Certificate to the foregoing effect and an
Opinion of Counsel, which may rely upon such Officers' Certificate as to the
absence of Defaults and Events of Default, stating that the proposed transaction
and such supplemental indenture will, upon consummation of the proposed
transaction, comply with this Indenture.
5.02 SUCCESSOR SUBSTITUTED.
Upon any consolidation or merger or transfer or lease of all or
substantially all of the assets of the Company in accordance with Section 5.01,
the successor person formed by such consolidation or into which the Company is
merged or to which such transfer or lease is made shall succeed to, and, except
in the case of a lease, be substituted for, and may exercise every right and
power of, and shall assume every duty and obligation of, the Company under this
Indenture with the same effect as if such successor had been named as the
Company herein. When the successor assumes all obligations of the Company
hereunder, except in the case of a lease, all obligations of the predecessor
shall terminate.
VI. DEFAULTS AND REMEDIES
6.01 EVENTS OF DEFAULT.
An "Event of Default" occurs if:
(i) the Company defaults in the payment of interest or liquidated
damages on any Security when the same becomes due and payable and the
default continues for a period of 30 days, whether or not such payment
shall be prohibited by the provisions of Article XI hereof;
(ii) the Company defaults in the payment of the principal or
Repurchase Price or Redemption Price of any Security when the same
becomes due and payable, whether on the Maturity Date, upon
redemption, on the Repurchase Date or otherwise, whether or not such
payment shall be prohibited by the provisions of Article XI hereof;
(iii) 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;
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(iv) the Company defaults in the payment at the final maturity
thereof, after the expiration of any applicable grace period, of
principal of, or premium, if any, on indebtedness for money borrowed,
other than Non-Recourse Indebtedness, in the aggregate principal
amount then outstanding of $25,000,000 or more, or the acceleration of
indebtedness for money borrowed in such aggregate principal amount so
that it becomes due and payable prior to the date on which it would
otherwise become due and payable and such acceleration is not
rescinded or such default is not cured within 30 business days after
notice to the Company in accordance with this Indenture;
(v) 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
(vi) 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 or
proceeding, or adjudicates the Company insolvent or bankrupt,
(B) appoints a Custodian of the Company for all or substantially
all of the property of the Company, or
(C) orders the winding up or liquidation of the Company,
and the order or decree remains unstayed and in effect for 90 consecutive
days.
The term "Bankruptcy Law" means Title 11, U.S. Code or any similar Federal
or State law for the relief of debtors. The term "Custodian" means any receiver,
trustee, assignee, liquidator or similar official under any Bankruptcy Law.
A default under clause (iii) is not an Event of Default until the Trustee
or the Holders of at least 25% in aggregate principal amount of the Securities
then outstanding notify the Company and the Trustee of the default and the
default is not cured 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". If the Holders of 25% in aggregate principal amount of the
outstanding Securities request the Trustee to give such notice on their behalf,
the Trustee shall do so. When a default is cured, it ceases.
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6.02 ACCELERATION.
If an Event of Default (other than an Event of Default specified in Section
6.01(v) or (vi) with respect to the Company) as to which the Trustee has
received notice pursuant to the provisions of this Indenture occurs and is
continuing, the Trustee by notice to the Company or the Holders of at least 25%
in principal amount of the Securities then outstanding by notice to the Company
and the Trustee may declare the Securities to be due and payable. Upon such
declaration such principal and interest shall be due and payable immediately. If
an Event of Default specified in Section 6.01(v) or (vi) with respect to the
Company occurs, the principal of and accrued interest on all the Securities
shall ipso facto become and be immediately due and payable without any
declaration or other act on the part of the Trustee or any Securityholder. The
Holders of a majority in aggregate principal amount of the Securities then
outstanding by written notice to the Trustee may rescind an acceleration and its
consequences if the rescission would not conflict with any order or decree and
if all existing Events of Default have been cured or waived except nonpayment of
principal or interest that has become due solely because of the acceleration and
if all amounts due to the Trustee under Section 7.07 have been paid.
6.03 OTHER REMEDIES.
Notwithstanding any other provision of this Indenture, 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 amounts due with
respect to 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. All remedies are
cumulative.
6.04 WAIVER OF PAST DEFAULTS.
Subject to Sections 6.07 and 9.02, the Holders of a majority in aggregate
principal amount of the Securities then outstanding by notice to the Trustee may
waive any past Default or Event of Default and its consequences. When a Default
or an Event of Default is waived, it is cured and ceases for every purpose of
this Indenture.
6.05 CONTROL BY MAJORITY.
The Holders of a majority in aggregate principal amount of the Securities
then outstanding 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, is unduly prejudicial to the rights
of other Securityholders or would involve the Trustee in personal liability;
provided that the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction.
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6.06 LIMITATION ON SUITS.
Except as provided in Section 6.07, a Securityholder may pursue a remedy
with respect to this Indenture or the Securities only if:
(i) the Holder gives to the Trustee written notice of a
continuing Event of Default;
(ii) the Holders of at least 25% in aggregate principal amount of
the Securities then outstanding make a written request to the Trustee
to pursue the remedy;
(iii) such Holder or Holders offer and, if requested, provide to
the Trustee indemnity satisfactory to the Trustee against any loss,
liability or expense;
(iv) the Trustee does not comply with the request within 60 days
after receipt of the request and the offer of indemnity; and
(v) during such 60-day period, the Holders of a majority in
aggregate principal amount of the Securities then outstanding do not
give the Trustee a direction inconsistent with the request.
A Securityholder may not use this Indenture to prejudice the rights of
another Securityholder or to obtain a preference or priority over another
Securityholder.
6.07 RIGHTS OF HOLDERS TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Indenture, the right of any
Holder to receive payment of all amounts due with respect to the Securities, on
or after the respective due dates expressed in the Securities, or to bring suit
for the enforcement of any such payment on or after such respective dates, shall
not be impaired or affected without the consent of the Holder.
Notwithstanding any other provision of this Indenture, the right of any
Holder to bring suit for the enforcement of the right to convert the Security
shall not be impaired or affected without the consent of the Holder.
6.08 COLLECTION SUIT BY TRUSTEE.
If an Event of Default specified in Section 6.01(i) or (ii) 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 due with respect to
the Securities, including any unpaid and accrued interest.
6.09 TRUSTEE MAY FILE PROOFS OF CLAIM.
The Trustee may file such proofs of claim and other papers or documents as
may be necessary or advisable in order to have the claims of the Trustee, any
predecessor Trustee and the Securityholders allowed in any judicial proceedings
relative to the Company or its creditors or properties.
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The Trustee may collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same, and any custodian,
receiver, assignee, trustee, liquidator, sequestrator or similar official in any
judicial proceeding is hereby authorized by each Holder to make such payments to
the Trustee and, in the event that the Trustee shall consent to the making of
such payments directly to the Holders, to pay the Trustee any amount due it for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.07.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof, or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.
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6.10 PRIORITIES.
If the Trustee collects any money pursuant to this Article VI, it shall pay
out the money in the following order:
First: to the Trustee for amounts due under Section 7.07;
Second: to holders of Senior Indebtedness to the extent required
by Article XI;
Third: to Securityholders for all amounts due and unpaid on the
Securities, without preference or priority of any kind,
according to the amounts due and payable on the
Securities; and
Fourth: to the Company.
The Trustee, upon prior written notice to the Company may fix a record date
and payment date for any payment by it to Securityholders pursuant to this
Section 6.10.
6.11 UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy under this Indenture
or in any suit against the Trustee for any action taken or omitted by it as
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 6.11 does not apply to a suit by the Trustee, a suit by a
Holder pursuant to Section 6.07 or a suit by Holders of more than 10% in
aggregate principal amount of the outstanding Securities.
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VII. TRUSTEE
7.01 DUTIES OF TRUSTEE.
(A) If an Event of Default has occurred and is continuing, the Trustee
shall exercise such of the rights and powers vested in it by this Indenture, and
use the same degree of care and skill in their exercise, as a prudent person
would exercise or use under the circumstances in the conduct of his or her own
affairs.
(B) Except during the continuance of an Event of Default:
(i) the Trustee need perform only those duties that are
specifically set forth in this Indenture and no implied covenants or
obligations shall be read into this Indenture against the Trustee; and
(ii) in the absence of bad faith, willful misconduct or
negligence 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; but in the case of
any such certificates or opinions which by any provision hereof are
specifically required to be furnished to the Trustee, the Trustee
shall examine the certificates and opinions to determine whether or
not they conform to the requirements of this Indenture (but need not
confirm or investigate the accuracy of mathematical calculations or
other facts stated therein).
(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:
(i) this paragraph does not limit the effect of Section 7.01(B);
(ii) 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 Trustee was negligent in ascertaining the pertinent facts;
(iii) the Trustee shall not be liable with respect to any action
it takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05; and
(iv) no provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder, or in the
exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to
it.
(D) Every provision of this Indenture that in any way relates to the
Trustee is subject to the provisions of this Section 7.01.
29
(E) The Trustee shall not be liable for interest on any money received by
it except as the Trustee may agree in writing with the Company. Money held in
trust by the Trustee need not be segregated from other funds except to the
extent required by law.
7.02 RIGHTS OF TRUSTEE.
(A) Subject to Section 7.01, the Trustee may conclusively rely on any
document believed by it to be genuine and to have been signed or presented by
the proper person. The Trustee need not investigate any fact or matter stated in
the document; if, however, the Trustee shall determine to make such further
inquiry or investigation, it shall be entitled during normal business hours to
examine the relevant books, records and premises of the Company, personally or
by agent or attorney upon reasonable prior notice.
(B) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate and/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
such Officers' Certificate or Opinion of Counsel.
(C) Any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order and any resolution
of the Board of Directors shall be sufficiently evidenced by a Board Resolution.
(D) The Trustee may consult with counsel of its selection and the advice of
such counsel or any Opinion of Counsel shall be full and complete authorization
and protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in reliance thereon.
(E) The Trustee may act through agents or attorneys and shall not be
responsible for the misconduct or negligence of any agent or attorney appointed
with due care.
(F) The Trustee shall not be liable for any action it takes or omits to
take in good faith which it believes to be authorized or within its discretion,
rights or powers conferred upon it by this Indenture.
(G) Except with respect to Section 6.01, the Trustee shall have no duty to
inquire as to the performance of the Company with respect to the covenants
contained in Article IV. In addition, the Trustee shall not be deemed to have
knowledge of an Event of Default except (i) any Default or Event of Default
occurring pursuant to Sections 6.01(i) and 6.01(ii) or (ii) any Default or Event
of Default of which a Responsible Officer of the Trustee shall have received
written notification or obtained actual knowledge. Delivery of reports,
information and documents to the Trustee under Article IV (other than Sections
4.04 and 4.07) is for informational purposes only and the Trustee's receipt of
the foregoing shall not constitute constructive notice of any information
contained therein or determinable from information contained therein, including
the Company's compliance with any of its covenants hereunder (as to which the
Trustee is entitled to rely exclusively on Officers' Certificates).
(H) The Trustee shall be under no obligation to exercise any of the rights
or powers vested by this Indenture at the request or direction of any of the
Holders pursuant to this Indenture unless such Holders shall have
30
offered to the Trustee security or indemnity reasonably satisfactory to the
Trustee against the costs, expenses and liabilities which might be incurred by
it in compliance with such request or direction.
(I) The rights, privileges, protections, immunities and benefits given to
the Trustee, including without limitation, its right to be indemnified, are
extended to, and shall be enforceable by, the Trustee in each of its capacities
hereunder, and each agent, custodian and other Person employed to act hereunder.
(J) The Trustee may request that the Company deliver an Officers'
Certificate setting forth the names of individuals and/or titles of officers
authorized at such time to take specified actions pursuant to this Indenture,
which Officers' Certificate may be signed by any person authorized to sign an
Officers' Certificate, including any person specified as so authorized in any
such certificate previously delivered and not superseded.
7.03 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 any of its
Affiliates with the same rights it would have if it were not Trustee. Any Agent
may do the same with like rights. The Trustee, however, must comply with
Sections 7.10 and 7.11.
7.04 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.
7.05 NOTICE OF DEFAULTS.
If a Default or Event of Default occurs and is continuing as to
which the Trustee has received notice pursuant to the provisions of this
Indenture, the Trustee shall mail to each Securityholder a notice of the Default
or Event of Default within 30 days after it occurs unless such Default or Event
of Default has been cured or waived. Except in the case of a Default or Event of
Default in payment of any amounts due with respect to any Security, the Trustee
may withhold the notice if and so long as it in good faith determines that
withholding the notice is in the interests of Securityholders.
7.06 REPORTS BY TRUSTEE TO HOLDERS.
Within 60 days after each May 15 beginning with May 15, 2002, the Trustee
shall mail to each Securityholder if required by TIA ss. 313(a) a brief report
dated as of such May 15 that complies with TIA ss. 313(c). In such event, the
Trustee also shall comply with TIA ss. 313(b).
A copy of each report at the time of its mailing to Securityholders shall
be mailed to the Company and filed by the Trustee with the SEC and each stock
exchange, if any, on which the Securities are listed. The Company
31
shall promptly notify the Trustee when the Securities are listed on any stock
exchange and of any delisting thereof.
7.07 COMPENSATION AND INDEMNITY.
The Company shall pay to the Trustee from time to time such compensation
for its services as shall be agreed upon in writing. The Trustee's compensation
shall not be limited by any law on compensation of a trustee of an express
trust. The Company shall reimburse the Trustee upon request for all reasonable
out-of-pocket expenses incurred by it. Such expenses shall include the
reasonable compensation and out-of-pocket expenses of the Trustee's agents and
counsel.
The Company shall indemnify the Trustee and its agents against any and all
loss, liability, damage, claim or expense (including the reasonable fees and
expenses of counsel and taxes other than those based upon the income of the
Trustee) incurred by it in connection with the acceptance or administration of
this trust and the performance of its duties hereunder, including the reasonable
costs and expenses of defending itself against any claim (whether asserted by
the Company, any Holder or any other Person) or liability in connection with the
exercise or performance of any of its powers and duties hereunder. The Company
need not pay for any settlement made without its consent. The Trustee shall
notify the Company promptly of any claim for which it may seek indemnification.
The Company need not reimburse any expense or indemnify against any loss or
liability incurred by the Trustee through the Trustee's negligence, bad faith or
willful misconduct.
To secure the Company's payment obligations in this Section 7.07, the
Trustee shall have a lien prior to the Securities on all money or property held
or collected by the Trustee, except that held in trust to pay amounts due on
particular Securities.
The indemnity obligations of the Company with respect to the Trustee
provided for in this Section 7.07 shall survive any resignation or removal of
the Trustee.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(v) or (vi) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.
7.08 REPLACEMENT OF TRUSTEE.
A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section 7.08.
The Trustee may resign by so notifying the Company in writing 30 business
days prior to such resignation. The Holders of a majority in aggregate principal
amount of the Securities then outstanding may remove the Trustee by so notifying
the Trustee and the Company in writing and may appoint a successor Trustee with
the Company's consent. The Company may remove the Trustee if:
(i) the Trustee fails to comply with Section 7.10;
32
(ii) the Trustee is adjudged a bankrupt or an insolvent;
(iii) a receiver or other public officer takes charge of the
Trustee or its property; or
(iv) 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.
If a successor Trustee does not take office within 30 days after the
retiring Trustee resigns or is removed, the retiring Trustee (at the Company's
expense), the Company or the Holders of at least 10% in aggregate principal
amount of the outstanding Securities may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any Holder may petition
any court of competent jurisdiction for the removal of the Trustee and the
appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the Company. Thereupon the resignation or removal
of the retiring Trustee shall become effective, and the successor Trustee shall
have all the rights, powers and duties of the Trustee under this Indenture. The
successor Trustee shall mail a notice of its succession to Securityholders. The
retiring Trustee shall promptly transfer all property held by it as Trustee to
the successor Trustee, subject to the lien provided for in Section 7.07.
7.09 SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Trustee consolidates with, merges or converts into, or transfers all
or substantially all of its corporate trust business to, another corporation,
the successor corporation without any further act shall be the successor
Trustee, if such successor corporation is otherwise eligible hereunder.
7.10 ELIGIBILITY; DISQUALIFICATION.
There shall at all times be a Trustee hereunder that is a corporation
organized and doing business under the laws of the United States of America or
of any state thereof that is authorized under such laws to exercise corporate
trustee power, that is subject to supervision or examination by federal or state
authorities and that has a combined capital and surplus of at least $100 million
as set forth in its most recent published annual report of condition. The
Trustee shall comply with TIA ss. 310(b).
7.11 PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
The Trustee shall comply with TIA ss. 311(a), excluding any creditor
relationship listed in TIA ss. 311(b). A Trustee who has resigned or been
removed shall be subject to TIA ss. 311(a) to the extent indicated.
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VIII. DISCHARGE OF INDENTURE
8.01 TERMINATION OF THE OBLIGATIONS OF THE COMPANY.
The Company may terminate all of its obligations under this Indenture if
all Securities previously authenticated and delivered (other than mutilated,
destroyed, lost or stolen Securities which have been replaced or paid as
provided in Section 2.07) have been delivered to the Trustee for cancellation or
if:
(i) the Securities mature within one year or all of them are to
be called for redemption within one year under arrangements
satisfactory to the Trustee for giving the notice of redemption;
(ii) the Company irrevocably deposits in trust with the Trustee
money or U.S. Government Obligations sufficient to pay the principal
or Redemption Price of and any unpaid and accrued interest on the
Securities to maturity or redemption, as the case may be. Immediately
after making the deposit, the Company shall give notice of such event
to the Securityholders;
(iii) the Company has paid or caused to be paid all sums then
payable by the Company to the Trustee hereunder as of the date of such
deposit; and
(iv) the Company has delivered to the Trustee an Opinion of
Counsel and an Officers' Certificate stating that all conditions
precedent provided for herein relating to the satisfaction and
discharge of this Indenture have been complied with. The Company may
make the deposit only during the one-year period and only if Article
XI permits it.
However, the Company's obligations in Sections 2.02, 2.03, 2.04, 2.05, 2.06,
2.07, 2.08, 2.15, 2.16, 2.17, 4.01, 4.02, 7.07, 7.08 and Article VIII and
Article X shall survive until the Securities are no longer outstanding.
Thereafter the obligations of the Company in Sections 7.07 and 8.03 shall
survive.
After a deposit pursuant to this Section 8.01, the Trustee upon
request shall acknowledge in writing the discharge of the obligations of
the Company under the Securities and this Indenture, except for those
surviving obligations specified above.
In order to have money available on a payment date to pay the
principal or Redemption Price of and any unpaid and accrued interest on the
Securities, the U.S. Government Obligations shall be payable as to
principal and any unpaid and accrued interest on or before such payment
date in such amounts as will provide the necessary money.
"U.S. Government Obligations" means direct non-callable obligations
of, or non-callable obligations guaranteed by, the United States of America
for the payment of which the full faith and credit of the United States of
America is pledged.
34
8.02 APPLICATION OF TRUST MONEY.
The Trustee shall hold in trust money or U.S. Government Obligations
deposited with it pursuant to Section 8.01. It shall apply the deposited
money and the money from U.S. Government Obligations through the Paying
Agent and in accordance with this Indenture to the payment of the principal
or Redemption Price of and any unpaid and accrued interest on the
Securities. Money and securities so held in trust are not subject to the
subordination provisions of Article XI.
8.03 REPAYMENT TO COMPANY.
The Trustee and the Paying Agent shall promptly notify the Company of,
and pay to the Company upon the request of the Company, any excess money or
securities held by them at any time. The Trustee and the Paying Agent shall
pay to the Company upon the written request of the Company any money held
by them for the payment of the principal or Redemption Price of and any
unpaid and accrued interest that remains unclaimed for two years; provided,
however, that the Trustee or such Paying Agent, before being required to
make any such repayment, may, at the expense and request of the Company,
cause to be published once in a newspaper of general circulation in the
City of New York or cause to be mailed to each Holder, notice stating that
such money remains and that, after a date specified therein, which shall
not be less than 30 days from the date of such publication or mailing, any
unclaimed balance of such money then remaining will be repaid to the
Company. After payment to the Company, Securityholders entitled to the
money must look to the Company for payment as general creditors unless an
applicable abandoned property law designates another person and all
liability of the Trustee and the Paying Agent shall cease.
8.04 REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any money or U.S.
Government Obligations in accordance with Sections 8.01 and 8.02 by reason
of any legal proceeding or by reason of any order or judgment of any court
or governmental authority enjoining, restraining or otherwise prohibiting
such application, the obligations of the Company under this Indenture and
the Securities shall be revived and reinstated as though no deposit had
occurred pursuant to Sections 8.01 and 8.02 until such time as the Trustee
or Paying Agent is permitted to apply all such money or U.S. Government
Obligations in accordance with Sections 8.01 and 8.02; provided, however,
that if the Company has made any payment of amounts due with respect to any
Securities because of the reinstatement of its obligations, the Company
shall be subrogated to the rights of the Holders of such Securities to
receive such payment from the money or U.S. Government Obligations held by
the Trustee or Paying Agent.
The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the U.S. Government
Obligations deposited pursuant to Section 8.01 or the principal and
interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of outstanding
Securities.
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IX. AMENDMENTS
9.01 WITHOUT CONSENT OF HOLDERS.
The Company, with the consent of the Trustee, may amend or supplement this
Indenture or the Securities without notice to or the consent of any
Securityholder:
(i) to cure any ambiguity, inconsistency or other defect in this
Indenture;
(ii) to comply with Sections 5.01 and 10.12;
(iii) to make any changes or modifications to this Indenture
necessary in connection with the registration of the Securities under
the Securities Act and the qualification of the Indenture under the
TIA;
(iv) to secure the obligations of the Company in respect of the
Securities;
(v) to add to the covenants of the Company described in this
Indenture for the benefit of Securityholders or to surrender any right
or power conferred upon the Company; or
(vi) to make any changes or modifications to this Indenture that
do not adversely affect the rights of any Holder.
Notwithstanding the foregoing, no supplemental indenture pursuant to the
foregoing clauses (i), (iii), (iv) or (v) of the preceding paragraph may be
entered into without the consent of the Holders of a majority in principal
amount of the Securities if such supplemental indenture would materially and
adversely affect the interests of the Holders of the Securities.
9.02 WITH CONSENT OF HOLDERS.
The Company, with the consent of the Trustee, may amend or supplement this
Indenture or the Securities without notice to any Securityholder but with the
written consent of the Holders of at least a majority in aggregate principal
amount of the outstanding Securities. Subject to Section 6.07, the Holders of a
majority in aggregate principal amount of the outstanding Securities may waive
compliance by the Company with any provision of this Indenture or the Securities
without notice to any other Securityholder. However, without the consent of each
Securityholder affected, an amendment, supplement or waiver, including a waiver
pursuant to Section 6.04, may not:
(i) reduce the amount of Securities whose Holders must consent to
an amendment, supplement or waiver;
(ii) reduce the rate of or change the time for payment of
interest (including any liquidated damages) on any Security;
(iii) reduce the principal, Redemption Price or Repurchase Price
of or change the stated maturity of any Security;
36
(iv) make any Security payable in money or securities other than
as stated in such Security; or
(v) make any change that adversely affects the right to convert,
or receive payment with respect to, any Security or the right to
institute suit for the enforcement of any payment with respect to, or
conversion of, any Security or the right to require the Company to
repurchase any of the Securities upon a Change in Control.
An amendment under this Section 9.02 may not make any change that adversely
affects the rights under Article XI of any holder of Senior Indebtedness unless
the holders of such Senior Indebtedness pursuant to its terms consent to the
change.
Promptly after an amendment under Section 9.01 and this Section 9.02
becomes effective, the Company shall mail to Securityholders a notice briefly
describing the amendment. Any failure of the Company to mail such notice shall
not in any way impair or affect the validity of such amendment, supplement or
waiver.
It shall not be necessary for the consent of the Holders under this Section
9.02 to approve the particular form of any proposed amendment or supplement, but
it shall be sufficient if such consent approves the substance thereof.
9.03 COMPLIANCE WITH TRUST INDENTURE ACT.
Every amendment, waiver or supplement to this Indenture or the Securities
shall comply with the TIA as then in effect.
9.04 REVOCATION AND EFFECT OF CONSENTS.
Until an amendment, supplement or waiver becomes effective, a consent to it
by a Holder is a continuing consent by 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 its Security or portion of a Security if the Trustee receives the notice
of revocation before the date the amendment, supplement or waiver becomes
effective. An amendment, supplement or waiver becomes effective in accordance
with its terms and thereafter binds every Securityholder.
After an amendment, supplement or waiver becomes effective with respect to
the Securities, it shall bind every Securityholder unless it makes a change
described in Section 9.02. In that case, the amendment, supplement or waiver
shall bind each Holder of a Security who has consented to it and, provided that
notice of such amendment, supplement or waiver is reflected on a Security that
evidences the same debt as the consenting Holder's Security, every subsequent
Holder of a Security or portion of a Security that evidences the same debt as
the consenting Holder's Security.
37
9.05 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 as directed and
prepared by the Company about the changed terms and return it to the Holder.
Alternatively, if the Company so determines, the Company in exchange for the
Security shall issue and the Trustee shall authenticate a new Security that
reflects the changed terms.
9.06 TRUSTEE PROTECTED.
The Trustee need not sign any amendment, supplement or waiver authorized
pursuant to this Article IX that adversely affects the Trustee's rights, duties,
liabilities or immunities. The Trustee shall be entitled to receive and
conclusively rely upon an Opinion of Counsel and an Officers' Certificate that
any supplemental indenture, amendment or waiver complies with the Indenture.
X. CONVERSION
10.01 CONVERSION PRIVILEGE; RESTRICTIVE LEGENDS.
A Holder of a Security may convert such Security into Common Stock at any
time during the period stated in paragraph 9 of the Securities. The initial
conversion rate is stated in paragraph 9 of the Securities. The conversion rate
is subject to adjustment in accordance with Sections 10.06 through 10.12.
A Holder may convert a portion of the principal of such Security if the
portion is $1,000 principal amount or a positive integral multiple of $1,000
principal amount. Provisions of this Indenture that apply to conversion of all
of a Security also apply to conversion of a portion of it.
Any shares issued upon conversion of a Security shall bear the Private
Placement Legend until after the second anniversary of the later of the issue
date for the Securities and the last date on which the Company or any Affiliate
of the Company was the owner of such shares or the Security (or any predecessor
security) from which such shares were converted (or such shorter period of time
as permitted by Rule 144(k) under the Securities Act or any successor provision
thereunder) (or such longer period of time as may be required under the
Securities Act or applicable state securities laws in the Opinion of Counsel for
the Company, unless otherwise agreed by the Company and the Holder thereof).
10.02 CONVERSION PROCEDURE.
To convert a Security, a Holder must satisfy the requirements in paragraph
9 of the Securities. The date on which the Holder satisfies those requirements
is the Conversion Date. As soon as practicable following the Conversion Date,
the Company shall deliver to the Holder through the Conversion Agent a
certificate for the number of full shares of Common Stock issuable upon the
conversion and a check in lieu of any fractional share. The person in whose name
the certificate is registered shall be treated as a stockholder of record on and
after the Conversion Date.
38
Except as described below, no payment or adjustment will be made for
accrued interest on, or liquidated damages with respect to, a converted Security
or for dividends on any Common Stock issued on or prior to conversion. If any
Holder surrenders a Security for conversion after the close of business on the
record date for the payment of an installment of interest and prior to the
opening of business on the next interest payment date, then, notwithstanding
such conversion, the interest payable on such interest payment date shall be
paid to the Holder of such Security on such record date; provided, however, that
such Security, when surrendered for conversion, must be accompanied by payment
to the Trustee on behalf of the Company of an amount equal to the interest
payable on such interest payment date on the portion so converted; provided,
further, however, that such payment to the Trustee described in the immediately
preceding proviso shall not be required in connection with any conversion of a
Security called for redemption pursuant to Section 3.04 hereof on a redemption
date that is after a record date for the payment of interest and on or before
the day that is one business day following the corresponding interest payment
date.
If a Holder converts more than one Security at the same time, the number of
full shares issuable upon the conversion shall be based on the total principal
amount of the Securities converted.
Upon surrender of a Security that is converted in part the Trustee shall
authenticate for the Holder a new Security equal in principal amount to the
unconverted portion of the Security surrendered.
If the last day on which a Security may be converted is a Legal Holiday in
a place where a Conversion Agent is located, the Security may be surrendered to
that Conversion Agent on the next succeeding day that is not a Legal Holiday.
10.03 FRACTIONAL SHARES.
The Company will not issue fractional shares of Common Stock upon
conversion of Securities and instead will deliver a check in an amount equal to
the value of such fraction computed on the basis of the last sale price of the
Common Stock as reported on the NYSE (or if not listed for trading thereon, then
on the principal securities exchange or on the principal automated quotation
system on which the Common Stock is listed or admitted to trading) at the close
of business on the last trading day prior to the date of conversion. If on the
date of conversion, the Common Stock is not quoted by any such organization, the
fair value of such Common Stock on such day, as reasonably determined in good
faith by the Board of Directors shall be used.
10.04 TAXES ON CONVERSION.
If a Holder converts its Security, the Company shall pay any documentary,
stamp or similar issue or transfer tax due on the issue of shares of Common
Stock upon the conversion. However, the Holder shall pay any such tax which is
due because the shares are issued in a name other than the Holder's name.
39
10.05 COMPANY TO PROVIDE STOCK.
The Company shall reserve out of its authorized but unissued Common Stock
or Common Stock held in its treasury enough shares of Common Stock to permit the
conversion of all of the Securities.
All shares of Common Stock which may be issued upon conversion of the
Securities shall be validly issued, fully paid and non-assessable.
The Company will endeavor to comply with all securities laws regulating the
offer and delivery of shares of Common Stock upon conversion of Securities and
will endeavor to list such shares on each national securities exchange or
automated quotation system on which the Common Stock is listed.
10.06 ADJUSTMENT OF CONVERSION RATE.
The conversion rate shall be subject to adjustment from time to time as
follows:
(a) In case the Company shall (1) pay a dividend on shares of
Common Stock in shares of Common Stock, (2) make a distribution on
shares of Common Stock in shares of other Capital Stock, (3) subdivide
the outstanding shares of Common Stock into a greater number of shares
of Common Stock or (4) combine the outstanding shares of Common Stock
into a smaller number of shares of Common Stock, the conversion rate
in effect immediately prior to such action shall be adjusted so that
the holder of any Security thereafter surrendered for conversion shall
be entitled to receive the number of shares of Common Stock which he
would have owned immediately following such action had such Securities
been converted immediately prior thereto. Any adjustment made pursuant
to this Section 10.06(a) shall become effective immediately after the
record date in the case of a dividend or distribution and shall become
effective immediately after the effective date in the case of a
subdivision or combination.
(b) In case the Company shall issue rights or warrants to all
holders of Common Stock entitling them (for a period commencing no
earlier than the record date for the determination of holders of
Common Stock entitled to receive such rights or warrants and expiring
not more than 60 days after such record date) to subscribe for or
purchase shares of Common Stock (or securities convertible into Common
Stock), at a price per share less than the then current market price
(as determined pursuant to Section 10.06(g) below) of Common Stock on
such record date, the conversion rate shall be increased by
multiplying the conversion rate in effect immediately prior to such
record date by a fraction of which the numerator shall be the number
of shares of Common Stock outstanding on such record date, plus the
number of shares of Common Stock so offered for subscription or
purchase, and the denominator of which shall be the number of shares
of Common Stock outstanding at the close of business on such record
date plus the number of shares of Common Stock which the aggregate of
the offering price of the total number of shares of Common Stock so
offered for subscription or purchase would purchase at such current
market price. Such adjustments shall become
40
effective immediately after such record date; provided that the
conversion rate will be readjusted to the extent that such rights
or warrants are not exercised prior to their expiration.
(c) In case the Company shall distribute to all holders of Common
Stock debt securities or other assets (other than cash dividends out
of current or retained earnings), or shall distribute to all holders
of Common Stock rights or warrants to subscribe for securities (other
than those referred to in Section 10.06(b) above), then in each such
case the conversion rate shall be increased by multiplying the
conversion rate in effect immediately prior to the close of business
on the record date for the determination of shareholders entitled to
such distribution by a fraction of which the numerator shall be the
current market price of Common Stock (determined as provided in
subsection (g) below), on such date and the denominator shall be such
current market price less the fair market value (as determined by the
Board of Directors whose determination shall be conclusive and
described in a Board Resolution) on such date of the portion of the
evidences of indebtedness, shares of capital stock, cash and other
assets to be distributed or of such subscription rights or warrants
applicable to one share of Common Stock, such increase to become
effective immediately prior to the opening of business on the day
following such record date. Notwithstanding the foregoing, in the
event that the Company shall distribute rights or warrants (other than
those referred to in Section 10.06(b) above) ("Rights") pro rata to
holders of Common Stock, the Company may, in lieu of making any
adjustment pursuant to this Section 10.06(c), make proper provision so
that each Holder of a Security who converts such Security (or any
portion thereof) after the record date for such distribution and prior
to the expiration or redemption of the Rights shall be entitled to
receive upon such conversion, in addition to the shares of Common
Stock issuable upon such conversion (the "Conversion Shares"), a
number of Rights to be determined as follows: (i) if such conversion
occurs on or prior to the date for the distribution to the holders of
Rights of separate certificates evidencing such Rights (the
"Distribution Date"), the same number of Rights to which a holder of a
number of shares of Common Stock equal to the number of shares of
Conversion Shares is entitled at the time of such conversion in
accordance with the terms and provisions of and applicable to the
Rights; and (ii) if such conversion occurs after the Distribution
Date, the same number of Rights to which a holder of the number of
shares of Common Stock into which the principal amount of the Security
so converted was convertible immediately prior to the Distribution
Date would have been entitled on the Distribution Date in accordance
with the terms and provisions of and applicable to the Rights.
(d) In case the Company shall, by dividend or otherwise, at any
time make a distribution (the "Triggering Distribution," and the
amount of the Triggering Distribution, together with the sum of (w)
and (x) below, the "Combined Amount") to all or substantially all
holders of its Common Stock of cash (including any distributions of
cash out of current or retained earnings of the Company, but excluding
any cash that is distributed as part of a distribution requiring a
conversion rate adjustment pursuant to subsection
41
(c) above or subsection (e) below) in an aggregate amount that,
together with the sum of (w) the aggregate amount of any cash and the
fair market value (as determined in good faith by the Board of
Directors, whose determination shall be conclusive thereof and
described in a Board Resolution), as of the expiration of the tender
or exchange offer referred to below, of any other consideration
payable in respect of any tender or exchange offer by the Company or a
subsidiary of the Company for all or any portion of the Common Stock
consummated within the 12 months preceding the date of payment of the
Triggering Distribution and in respect of which no conversion rate
adjustment has been made pursuant to this Section 10.06, and (x) the
aggregate amount of all other cash distributions to all or
substantially all holders of Common Stock made within the 12 months
preceding the date of payment of the Triggering Distribution and in
respect of which no conversion rate adjustment has been made pursuant
to this Section 10.06, exceeds 10% of the product of the current
market price per share (as determined in accordance with subsection
(g) of this Section 10.06) of the Common Stock on the close of
business, New York City time, on the business day (the "Distribution
Declaration Date") immediately preceding the day on which the
Triggering Distribution is declared by the Company and the number of
shares of Common Stock outstanding on the Distribution Declaration
Date (excluding shares held in the treasury of the Company), the
conversion rate shall be adjusted by multiplying the conversion rate
in effect immediately prior to the effectiveness of the conversion
rate adjustment contemplated by this subsection (d) by a fraction (y)
the numerator of which shall be such current market price per share of
Common Stock on the Distribution Declaration Date and (z) the
denominator of which shall be (I) such current market price per share
of Common Stock on the Distribution Declaration Date less (II) the
number obtained by dividing the Combined Amount by such number of
shares of Common Stock outstanding. Such adjustment shall become
effective immediately prior to the opening of business on the day
following the Distribution Declaration Date.
(e) In case a tender offer or exchange offer made by the Company
or any of its subsidiaries for all or any portion of the Common Stock
shall expire and such tender offer or exchange offer (as amended upon
the expiration thereof) shall require the payment to stockholders
(based on the acceptance (up to any maximum specified in the terms of
the tender offer or exchange offer) of Purchased Shares (as defined
below)) of an aggregate consideration having a fair market value (as
determined by the Board of Directors, whose determination shall be
conclusive and set forth in a Board Resolution) that combined together
with:
(1) the aggregate of the cash plus the fair market value (as
determined by the Board of Directors, whose determination
shall be conclusive and set forth in a Board Resolution), as of
the expiration of such tender offer or exchange offer, of
consideration payable in respect of any other tender offers or
exchange offers, by the Company or any of its subsidiaries for
all or any portion of the Common Stock
42
expiring within the 12 months preceding the expiration of
such tender offer or exchange offer and in respect of which no
adjustment pursuant to this Section 10.06 has been made, and
(2) the aggregate amount of any distributions to all or
substantially all holders of the Company's Common Stock made
exclusively in cash within the 12 months preceding the expiration
of such tender offer or exchange offer and in respect of which no
adjustment pursuant to Section 10.06 has been made,
exceeds 10% of the product of the current market price per share
(as determined in accordance with subsection (g) of this Section
10.06) as of the last time (the "Expiration Time")tenders or
exchanges could have been made pursuant to such tender offer or
exchange offer (as it may be amended) times the number of shares
of Common Stock outstanding (including any tendered shares or
exchanged shares but excluding shares held in the treasury of
the Company) at the Expiration Time,
then, and in each such case, immediately prior to the opening of business
on the day after the date of the Expiration Time, the conversion rate shall
be adjusted by multiplying the conversion rate in effect immediately prior
to the close of business on the date of the Expiration Time by a fraction:
(i) the numerator of which shall be the sum of (x) the fair market
value (determined as aforesaid) of the aggregate consideration
payable to stockholders based on the acceptance (up to any maximum
specified in the terms of the tender offer or exchange offer
of all shares validly tendered or exchanged and not withdrawn as
of the Expiration Time (the shares deemed so accepted, up to any
such maximum, being referred to as the "Purchased Shares") and
(y) the product of the number of shares of Common Stock
outstanding (less any Purchased Shares) at the Expiration Time
and the current market price of the Common Stock as of the
Expiration Time; and
(ii) the denominator of which shall be the number of shares of Common
Stock outstanding (including any tendered or exchanged shares but
excluding shares held in the treasury of the Company)at the
Expiration Time multiplied by the current market price of the
Common Stock as of the Expiration Time.
Such adjustment (if any) shall become effective immediately prior
to the opening of business on the day following the Expiration
Time. In the event that the Company is obligated to purchase
shares pursuant to any such tender offer or exchange offer, but
the Company is permanently prevented by applicable law from
effecting any such purchases or all such purchases are rescinded,
43
the conversion rate shall again be adjusted to be the conversion
rate which would then be in effect if such tender offer or
exchange offer had not been made. If the application of this
Section 10.06(e) to any tender offer or exchange offer would
result in a decrease in the conversion rate, no adjustment shall
be made for such tender offer or exchange offer under this
Section 10.06(e).
(f) In addition to the foregoing adjustments in subsections (a),
(b), (c), (d) and (e) above, the Company, from time to time and to the
extent permitted by law, may increase the conversion rate by any
amount for at least 20 days or such longer period as may be required
by law, if the Board of Directors of the Company has made a
determination, which determination shall be conclusive, that such
increase would be in the best interests of the Company, provided that
the effective Conversion Price is not less than the par value of a
share of Common Stock. The Company shall give notice to the Trustee
and cause notice of such increase to be mailed to each Holder of
Securities at such Holder's address as the same appears on the
registry books of the Registrar, at least 15 days prior to the date on
which such increase commences. Such conversion rate increase shall be
irrevocable during such period.
(g) For the purpose of any computation under subsections (a),
(b), (c), (d) and (e) above of this Section 10.06, the current market
price per share of Common Stock on the date fixed for determination of
the stockholders entitled to receive the issuance or distribution
requiring such computation (the "Determination Date") shall be deemed
to be the average of the Daily Market Prices for the ten consecutive
trading days immediately preceding the Determination Date; provided,
however, that (i) if the "ex" date for any event (other than the
issuance or distribution requiring such computation) that requires an
adjustment to the conversion rate pursuant to subsection (a), (b),
(c), (d) or (e) above occurs on or after the tenth trading day prior
to the Determination Date and prior to the "ex" date for the issuance
or distribution requiring such computation, the Daily Market Price for
each trading day prior to the "ex" date for such other event shall be
45
adjusted by multiplying such Daily Market Price by the reciprocal of
the fraction by which the conversion rate is so required to be
adjusted as a result of such other event, (ii) if the "ex" date for
any event (other than the issuance or distribution requiring such
computation) that requires an adjustment to the conversion rate
pursuant to subsection (a), (b), (c), (d) or (e) above occurs on or
after the "ex" date for the issuance or distribution requiring such
computation and on or prior to the Determination Date, the Daily
Market Price for each business day on and after the "ex" date for such
other event shall be adjusted by multiplying such Daily Market Price
by the same fraction by which the conversion rate is so required to be
adjusted as a result of such other event, and (iii) if the "ex" date
for the issuance or distribution requiring such computation is on or
prior to the Determination Date, after taking into account any
adjustment required pursuant to clause (i) or (ii) of this proviso,
the Daily Market Price for each trading day on and after the "ex" date
shall be adjusted by adding thereto the amount of any cash and the
fair market value (as determined by the Board of Directors in a manner
consistent with any determination of such value for the purposes of
this Section 10.06, whose determination shall be conclusive and
described in a Resolution of the Board of Directors) of the evidences
of indebtedness, shares of capital stock or other securities or assets
being distributed (in the distribution requiring such computation)
applicable to one share of Common Stock as of the close of business on
the day before such "ex" date. For the purpose of any computation
under subsection (e) of this Section 10.06, the current market price
per share of Common Stock at the expiration time for the tender offer
requiring such computation shall be deemed to be the average of the
Daily Market Price for the ten consecutive trading days commencing on
the business day immediately following the expiration time of such
tender offer (the "Commencement Date"); provided, however, that if the
"ex" date for any event (other than the tender offer requiring such
computation) that requires an adjustment to the conversion rate
pursuant to subsection (a), (b), (c), (d) or (e) above occurs on or
after the expiration time for the tender offer requiring such
computation and prior to the day in question, the Daily Market Price
for each trading day on or after to the "ex" date for such other event
shall be adjusted by multiplying such Daily Market Price by the same
fraction by which the conversion rate is so required to be adjusted as
a result of such other event. For purposes of this subsection, the
term "ex" date, (i) when used with respect to any issuance or
distribution, means the first date on which the Common Stock trades
regular way on the relevant exchange or in the relevant market from
which the Daily Market Price was obtained without the right to receive
such issuance or distribution, (ii) when used with respect to any
subdivision or combination of shares of Common Stock, means the first
date on which the Common Stock trades regular way on such exchange or
in such market after the time at which such subdivision or combination
becomes effective, and (iii) when used with respect to any tender
offer means the first date on which the Common Stock trades regular
way on such exchange or in such market after the expiration time of
such tender offer (as it may be amended or extended).
10.07 NO ADJUSTMENT.
No adjustment in the conversion rate shall be required until cumulative
adjustments amount to 1% or more of the conversion rate as last adjusted;
provided, however, that any adjustments which by reason of this Section 10.07
are not required to be made shall be carried forward and taken into account in
any subsequent adjustment. All calculations under this Article X shall be made
to the nearest cent or to the nearest one-hundredth of a share, as the case may
be. No adjustment need be made for rights to purchase Common Stock pursuant to a
Company plan for reinvestment of dividends or interest. No adjustment need be
made for a change in the par value of the Common Stock.
If any rights, options or warrants issued by the Company as described in
Section 10.06 are only exercisable upon the occurrence of certain triggering
events, then the conversion rate will not be adjusted as provided in Section
10.06 until the earliest of such triggering event occurs. Upon the expiration or
termination of any rights, options or warrants without the
45
exercise of such rights, options or warrants, the conversion rate then in
effect shall be adjusted immediately to the conversion rate which would
have been in effect at the time of such expiration or termination had such
rights, options or warrants, to the extent outstanding immediately prior to
such expiration or termination, never been issued.
No adjustment need be made for a transaction referred to in this Article X
if Securityholders are to participate in the transaction without conversion on a
basis and with notice that the Board of Directors determines to be fair and
appropriate in light of the basis and notice on which holders of Common Stock
participate in the transaction.
10.08 OTHER ADJUSTMENTS.
In the event that, as a result of an adjustment made pursuant to Section
10.06 hereof, the Holder of any Security thereafter surrendered for conversion
shall become entitled to receive any shares of Capital Stock other than shares
of Common Stock, thereafter the conversion rate 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 Common Stock contained in this Article X.
10.09 ADJUSTMENTS FOR TAX PURPOSES.
The Company may make such increases in the conversion rate, in addition to
those required by Section 10.06 hereof, as it determines to be advisable in
order that any stock dividend, subdivision of shares, distribution or rights to
purchase stock or securities or distribution of securities convertible into or
exchangeable for stock made by the Company or to its stockholders will not be
taxable to the recipients thereof.
10.10 NOTICE OF ADJUSTMENT.
Whenever the conversion rate is adjusted, the Company shall promptly mail
to Holders at the addresses appearing on the Registrar's books a notice of the
adjustment and file with the Trustee an Officers' Certificate briefly stating
the facts requiring the adjustment and the manner of computing it. The
certificate shall be conclusive evidence of the correctness of such adjustment.
10.11 NOTICE OF CERTAIN TRANSACTIONS.
In the event that:
(1) the Company takes any action which would require an
adjustment in the conversion rate;
(2) the Company takes any action that would require a
supplemental indenture pursuant to Section 10.12; or
(3) there is a dissolution or liquidation of the Company;
a Holder of a Security may wish to convert such Security into shares of Common
Stock prior to the record date for or the effective date of the transaction so
that he may receive the rights, warrants, securities or assets
46
which a holder of shares of Common Stock on that date may receive. Therefore,
the Company shall mail to Holders at the addresses appearing on the Registrar's
books and the Trustee a notice stating the proposed record or effective date, as
the case may be, of any transaction referred to in clause (1), (2) or (3) of
this Section 10.11. The Company shall mail such notice at least 15 days before
such date; however, failure to mail such notice or any defect therein shall not
affect the validity of any transaction referred to in clause (1), (2) or (3) of
this Section 10.11.
10.12 EFFECT OF RECLASSIFICATIONS, CONSOLIDATIONS, MERGERS, BINDING SHARE
EXCHANGES OR SALES ON CONVERSION PRIVILEGE.
If any of the following shall occur, namely: (i) any reclassification or
change in the Common Stock issuable upon conversion of Securities (other than a
change in par value, or from par value to no par value, or from no par value to
par value, or as a result of a subdivision or combination), or (ii) any
consolidation, merger or binding share exchange to which the Company is a party
other than a merger in which the Company is the continuing corporation and which
does not result in any reclassification of, or change (other than a change in
name, or par value, or from par value to no par value, or from no par value to
par value or as a result of a subdivision or combination) in, the Common Stock,
then the Company or such successor or purchasing corporation, as the case may
be, shall, as a condition precedent to such reclassification, change,
consolidation, merger or binding share exchange, execute and deliver to the
Trustee a supplemental indenture in form reasonably satisfactory to the Trustee
providing that the Holder of each Security then outstanding shall have the right
to convert such Security into the kind and amount of shares of stock and other
securities and property (including cash) receivable upon such reclassification,
change, consolidation, merger, binding or share exchange by a holder of the
number of shares of Common Stock, deliverable upon conversion of such Security
immediately prior to such reclassification, change, consolidation, merger or
binding share exchange. Such supplemental indenture shall provide for
adjustments of the conversion rate which shall be as nearly equivalent as may be
practicable to the adjustments of the conversion rate provided for in this
Article X. The foregoing, however, shall not in any way affect the right a
Holder of a Security may otherwise have, pursuant to clause (ii) of the last
sentence of subsection (c) of Section 10.06 hereof, to receive Rights upon
conversion of a Security. If, in the case of any such consolidation, merger or
binding share exchange, the stock or other securities and property (including
cash) receivable thereupon by a holder of Common Stock includes shares of stock
or other securities and property of a corporation other than the successor or
purchasing corporation, as the case may be, in such consolidation, merger or
binding share exchange, then such supplemental indenture shall also be executed
by such other corporation and shall contain such additional provisions to
protect the interests of the Holders of the Securities as the Board of Directors
shall reasonably consider necessary by reason of the foregoing. The provision of
this Section 10.12 shall similarly apply to successive consolidations, mergers
or binding share exchanges.
In the event the Company shall execute a supplemental indenture pursuant to
this Section 10.12, the Company shall promptly file with the Trustee an
Officers' Certificate briefly stating the reasons therefor, the kind or amount
of shares of stock or securities or property (including cash) receivable by
Holders of the Securities upon the conversion of their Securities after any such
reclassification, change, consolidation, merger,
48
binding share exchange, sale or conveyance and any adjustment to be made with
respect thereto.
10.13 TRUSTEE'S DISCLAIMER.
The Trustee has no duty to determine when an adjustment under this Article
X should be made, how it should be made or what such adjustment should be, but
may accept as conclusive evidence of the correctness of any such adjustment, and
shall be protected in relying upon the Officers' Certificate with respect
thereto which the Company is obligated to file with the Trustee pursuant to
Section 10.10 hereof. The Trustee makes no representation as to the validity or
value of any securities or assets issued upon conversion of Securities, and the
Trustee shall not be responsible for the failure by the Company to comply with
any provisions of this Article X.
The Trustee shall not be under any responsibility to determine the
correctness of any provisions contained in any supplemental indenture executed
pursuant to Section 10.12, but may accept as conclusive evidence of the
correctness thereof, and shall be protected in relying upon, the Officers'
Certificate with respect thereto which the Company is obligated to file with the
Trustee pursuant to Section 10.12 hereof.
XI. SUBORDINATION
11.01 AGREEMENT TO SUBORDINATE.
The Company agrees, and each Securityholder by accepting a Security agrees,
that the payment of all amounts due with respect to the Securities is
subordinated in right of payment, to the extent and in the manner provided in
this Article XI, to the prior payment in full of all Senior Indebtedness and
that the subordination is for the benefit of the holders of Senior Indebtedness.
Money and securities held in trust pursuant to Article VIII are not subject
to the subordination provisions of this Article XI.
11.02 CERTAIN DEFINITIONS.
"Indebtedness" means, with respect to any person, the principal of, and
premium, if any, and interest on (a) all indebtedness of such person for
borrowed money (including all indebtedness evidenced by notes, bonds, debentures
or other securities sold by such person for money), (b) all debt obligations
incurred by such person in the acquisition (whether by way of purchase, merger,
consolidation or otherwise and whether by such person or another person) of any
business, real property or other assets (except inventory and related items
acquired in the ordinary course of conduct of the acquiror's usual business),
(c) guarantees by such person of indebtedness described in clause (a) or (b) of
another person, (d) all renewals, extensions, refundings, deferrals,
restructurings, amendments and modifications of any such indebtedness,
obligation or guarantee, (e) all reimbursement obligations of such person with
respect to letters of credit, bankers' acceptances or similar facilities issued
for the account of such person, (f) all capital lease obligations of such person
and (g) all net obligations of such person under interest rate swap, currency
exchange or similar agreements of such person.
48
"Representative" means the indenture trustee or other trustee, agent or
representative for an issue of Senior Indebtedness.
"Senior Indebtedness" means all Indebtedness of the Company outstanding at
any time, except (a) the Securities, (b) Indebtedness that by its terms provides
that it shall not be "senior" in right of payment to the Securities or (c)
Indebtedness that by its terms provides that it shall be "pari passu" or
"junior" in right of payment to the Securities. Senior Indebtedness does not
include Indebtedness of the Company to any of its subsidiaries.
11.03 LIQUIDATION; DISSOLUTION; BANKRUPTCY.
Upon any distribution of assets to creditors of the Company in a
liquidation or dissolution of the Company, or in a bankruptcy, reorganization,
insolvency, receivership or similar proceeding relating to the Company or its
property:
(i) holders of Senior Indebtedness shall be entitled to receive
payment in full of the principal of and interest (including interest
accruing after the commencement of any such proceeding) to the date of
payment on the Senior Indebtedness before Securityholders shall be
entitled to receive any payment from the Company of amounts due with
respect to the Securities (other than cash payments due upon
conversion of Securities in lieu of fractional shares); and
(ii) until the Senior Indebtedness is paid in full, any
distribution to which Securityholders would be entitled from the
Company but for this Article XI shall be made to holders of Senior
Indebtedness, as their interests may appear, except the
Securityholders may receive securities that are subordinated to Senior
Indebtedness to at least the same extent as the Securities and
payments made pursuant to Sections 8.01 and 8.02.
Upon any distribution of assets or proceeds thereof of any subsidiary of
the Company in a liquidation or dissolution of such subsidiary, or in a
bankruptcy, reorganization, insolvency, receivership or similar proceeding
relating to such subsidiary or its property, the Securityholders shall not have
any right to participate in such assets or proceeds until the holders of the
Indebtedness, including trade payables, of such subsidiary are paid in full.
11.04 COMPANY NOT TO MAKE PAYMENTS WITH RESPECT TO SECURITIES IN CERTAIN
CIRCUMSTANCES.
No payment of amounts due may be made by the Company, directly or
indirectly, with respect to the Securities (including any repurchase pursuant to
the exercise of the Repurchase Right) or to acquire any of the Securities at any
time if a default in payment of the principal of or premium, if any, or interest
on Senior Indebtedness exists unless and until such default shall have been
cured or waived or shall have ceased to exist. During the continuance of any
default with respect to any Senior Indebtedness pursuant to which any Senior
Indebtedness has been issued (other than default in payment of the principal of
or premium, if any, or interest on any Senior Indebtedness), permitting the
holders thereof to accelerate the maturity thereof, no payment may be made by
the Company, directly or indirectly, of
49
any amount due with respect to the Securities (a "Payment Blockage") until the
earlier of (i) the date on which such default has been cured or waived or ceases
to exist and (ii) 180 days following receipt of written notice (a "Payment
Blockage Notice") to the Company from any holder or holders thereof or its
Representative or Representatives or the trustee or trustees under any indenture
under which any instrument evidencing any such Senior Indebtedness may have been
issued, that such a default has occurred and is continuing and (iii) the date on
which such Senior Indebtedness is discharged or paid in full. Notwithstanding
the foregoing, only one Payment Blockage Notice with respect to the same default
may be given during any period of 360 consecutive days unless such default has
been cured or waived or has ceased to exist for a period of not less than 90
consecutive days; provided that in no event shall more than one interest payment
be blocked during any such 360-day period. No new Payment Blockage notice may be
delivered by the holders of Senior Indebtedness during any 360-day period unless
all defaults which triggered the preceding Payment Blockage period shall have
been cured, waived or shall have ceased to exist. However, if the maturity of
such Senior Indebtedness is accelerated, no payment may be made by the Company
on the Securities until such Senior Indebtedness that has matured has been paid
or such acceleration has been cured or waived.
Regardless of anything to the contrary herein, nothing shall prevent (a)
any payment by the Trustee to the Securityholders of amounts deposited with it
pursuant to Article VIII or (b) any payment by the Trustee or the Paying Agent
as permitted by Section 11.12. Nothing contained in this Article XI will limit
the right of the Trustee or the Securityholders to take any action to accelerate
the maturity of the Securities pursuant to Section 6.02 or to pursue any rights
or remedies hereunder.
11.05 ACCELERATION OF SECURITIES.
If payment of the Securities is accelerated because of an Event of Default,
the Company shall promptly notify holders of Senior Indebtedness of the
acceleration.
11.06 WHEN DISTRIBUTION MUST BE PAID OVER.
In the event that the Company shall make any payment to the Trustee with
respect to the Securities at a time when such payment is prohibited by Section
11.03 or 11.04, such payment shall be held by the Trustee, in trust for the
benefit of, and shall be paid forthwith over and delivered to, the holders of
Senior Indebtedness (pro rata as to each of such holders on the basis of the
respective amounts of Senior Indebtedness held by them) or their Representative
or the trustee under the indenture or other agreement (if any) pursuant to which
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 in
accordance with its terms, after giving effect to any concurrent payment or
distribution to or for the holders of Senior Indebtedness.
If a distribution is made to Securityholders, that because of this Article
XI should not have been made to them, the Securityholders who receive the
distribution shall hold it in trust for holders of Senior Indebtedness and pay
it over to them as their interests may appear.
50
11.07 NOTICE BY COMPANY.
The Company shall promptly notify the Trustee and the Paying Agent in
writing of any facts known to the Company that would cause a payment of any
amount due with respect to the Securities to violate this Article XI, but
failure to give such notice shall not affect the subordination of the Securities
to the Senior Indebtedness provided in this Article XI.
11.08 SUBROGATION.
After all Senior Indebtedness is paid in full and until the Securities are
paid in full, Securityholders shall be subrogated (equally and ratably with all
other Indebtedness of the Company ranking pari passu with the Securities) to the
rights of holders of Senior Indebtedness to receive distributions applicable to
Senior Indebtedness to the extent that distributions otherwise payable to the
Securityholders have been applied to the payment of Senior Indebtedness. A
distribution made under this Article XI to holders of Senior Indebtedness which
otherwise would have been made to Securityholders is not, as between the Company
and Securityholders, a payment by the Company on Senior Indebtedness.
11.09 RELATIVE RIGHTS.
This Article XI defines the relative rights of Securityholders and holders
of Senior Indebtedness. Nothing in this Indenture shall:
(i) impair, as between the Company, on the one hand, and
Securityholders, on the other hand, the obligation of the Company,
which is absolute and unconditional, to pay all amounts due with
respect to the Securities in accordance with their terms;
(ii) affect the relative rights of Securityholders and creditors
of the Company other than holders of Senior Indebtedness; or
(iii) prevent the Trustee or any Securityholder from exercising
its available remedies upon a Default or Event of Default, subject to
the rights of holders of Senior Indebtedness to receive distributions
otherwise payable to Securityholders.
Upon any distribution of assets of the Company referred to in this Article
XI, the Trustee, subject to the provisions of Sections 7.01 and 7.02, and the
Holders of the Securities shall be entitled to rely upon any order or decree by
any court of competent jurisdiction in which such dissolution, winding up,
liquidation or reorganization proceedings are pending, or a certificate of the
liquidating trustee or agent or other person making any distribution to the
Trustee or the Holders of the Securities, for the purpose of ascertaining the
persons entitled to participate in such distribution, the holders of the Senior
Indebtedness and other indebtedness of the Company, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all other
facts pertinent thereto or to this Article XI. Nothing contained in this Article
XI or elsewhere in this Indenture or in any Security is intended to or shall
affect the obligation of the Company to make, or prevent the Company from
making, at any time except during the pendency of any dissolution, winding up,
liquidation or reorganization proceeding,
51
and except during the continuance of any default specified in Section 11.04 (not
cured or waived), payments at any time of all amounts due with respect to the
Securities.
11.10 SUBORDINATION MAY NOT BE IMPAIRED BY COMPANY.
No right of any holder of Senior Indebtedness to enforce the
subordination of the indebtedness evidenced by the Securities shall be impaired
by any act or failure to act by the Company or by the failure of the Company to
comply with this Indenture.
11.11 DISTRIBUTION OR NOTICE TO REPRESENTATIVE.
Whenever a distribution is to be made or a notice given to holders of
Senior Indebtedness, the distribution may be made and the notice given to their
Representatives.
11.12 RIGHTS OF TRUSTEE AND PAYING AGENT.
The Trustee or Paying Agent may continue to make payments on the Securities
until it receives written notice of facts that would cause a payment of amounts
due with respect to the Securities to violate this Article XI. Only the Company
or a Representative or a holder of an issue of Senior Indebtedness that has no
Representative may give the notice.
The Trustee shall be entitled to conclusively rely on the delivery to it of
a written notice by a person representing himself to be a holder of Senior
Indebtedness (or a Representative on behalf of such holder) to establish that
such notice has been given by a holder of Senior Indebtedness or a
Representative on behalf of any such holder. In the event that the Trustee
determines in good faith that further evidence is required with respect to the
right of any person who is a holder of Senior Indebtedness to participate in any
payment or distribution pursuant to this Article XI, 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 XI, 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 or until such time as the Trustee shall be otherwise satisfied as to the
right of such person to receive such payment.
The Trustee in its individual or any other capacity may hold Senior
Indebtedness with the same rights it would have if it were not Trustee. Any
Agent may do the same with like rights.
The Trustee shall not be deemed to owe any fiduciary duty to the holders of
Senior Indebtedness and shall not be liable to any such holder if it shall
mistakenly pay over or distribute to Securityholders or the Company or any other
person money or assets to which any holders of Senior Indebtedness shall be
entitled by virtue of this Article XI or otherwise.
52
11.13 OFFICERS' CERTIFICATE.
If there occurs an event referred to in Section 11.03 or 11.04, the Company
shall promptly give to the Trustee an Officers' Certificate (on which the
Trustee may conclusively rely) identifying all holders of Senior Indebtedness or
their Representatives and the principal amount of Senior Indebtedness then
outstanding held by each such holder and stating the reasons why such Officers'
Certificate is being delivered to the Trustee.
11.14 NOT TO PREVENT EVENTS OF DEFAULT.
The failure to make any payment due with respect to the Securities by
reason of any provision of this Article XI shall not be construed as preventing
the occurrence of an Event of Default under Section 6.01
XII. MISCELLANEOUS
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,
the required provision of the TIA shall control.
12.02 NOTICES.
Any notice or communication by the Company or the Trustee to one or both of
the others is duly given if in writing and delivered in person, mailed by
first-class mail or by express delivery to the other parties' addresses stated
in this Section 12.02. The Company or the Trustee by notice to the others may
designate additional or different addresses for subsequent notices or
communications.
Any notice or communication to a Securityholder shall be mailed to its
address shown on the register kept by the Registrar. 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.
If the Company mails a notice or communication to Securityholders, it shall
mail a copy to the other and to the Trustee and each Agent at the same time.
All notices or communications shall be in writing.
The Company's address is:
Lennox International Inc.
2140 Lake Park Blvd.
Richardson, Texas 75080
Facsimile: (972) 497-6660
Attention: General Counsel
The Trustee's address is:
The Bank of New York
101 Barclay Street
New York, NY 10286
Facsimile: (212) 896-7299
Attention: Corporate Trust Department
12.03 COMMUNICATION BY HOLDERS WITH OTHER HOLDERS.
Securityholders may communicate pursuant to TIA ss. 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 ss. 312(c).
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:
(i) 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
(ii) an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent have been complied with.
Each signer of an Officers' Certificate or an Opinion of Counsel may (if so
stated) rely, effectively, upon an Opinion of Counsel as to legal matters and an
Officers' Certificate as to factual matters if such signer reasonably and in
good faith believes in the accuracy of the document relied upon.
12.05 STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
Each Officers' Certificate or Opinion of Counsel with respect to compliance
with a condition or covenant provided for in this Indenture shall include:
(i) a statement that the person making such certificate or
opinion has read such covenant or condition;
(ii) 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;
(iii) a statement that, in the opinion of such person, he or she
has made such examination or investigation as is necessary to enable
him or her to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(iv) a statement as to whether or not, in the opinion of such
person, such condition or covenant has been complied with.
54
12.06 RULES BY TRUSTEE AND AGENTS.
The Trustee may make reasonable rules for action by or at a meeting of
Securityholders. The Registrar, Paying Agent or Conversion Agent may make
reasonable rules and set reasonable requirements for their respective functions.
12.07 LEGAL HOLIDAYS.
A "Legal Holiday" is a Saturday, a Sunday or a day on which banking
institutions are not required to be open in the City of New York, in the State
of New York or in the city in which the Trustee administers its corporate trust
business. 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 on that payment for the intervening
period.
A "business day" is a day other than a Legal Holiday.
12.08 NO RECOURSE AGAINST OTHERS.
No past, present or future director, officer, employee, incorporator or
stockholder of the Company, as such, shall have any liability for any
obligations of the Company under the Securities or this Indenture or for any
claim based on, in respect of, or by reason of, such obligations or their
creation. Each Holder by accepting a Security waives and releases all such
liability. The waiver and release are part of the consideration for the issuance
of the Securities.
12.09 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. Delivery of an executed counterpart by facsimile shall be effective
as delivery of a manually executed counterpart thereof.
12.10 GOVERNING LAW.
The laws of the State of New York, without regard to principles of
conflicts of law, shall govern this Indenture and the Securities.
12.11 NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret another indenture, loan or debt
agreement of the Company or any of its subsidiaries. Any such indenture, loan or
debt agreement may not be used to interpret this Indenture.
12.12 SUCCESSORS.
All agreements of the Company in this Indenture and the Securities shall
bind their respective successors. All agreements of the Trustee in this
Indenture shall bind its successors.
55
12.13 SEPARABILITY.
In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby
and a Holder shall have no claim therefor against any party hereto.
12.14 TABLE OF CONTENTS, HEADINGS, ETC.
The Table of Contents, Cross-Reference Table and headings of the Articles
and Sections of this Indenture have been inserted for convenience of reference
only, are not to be considered a part hereof and shall in no way modify or
restrict any of the terms or provisions hereof.
56
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed as of the date first above written.
LENNOX INTERNATIONAL INC.
By: /s/ Richard A. Smith
---------------------
Executive Vice President,
Chief Financial Officer and
Treasurer
THE BANK OF NEW YORK
By: /s/ Terence Rawlins
-------------------
Vice President
EXHIBIT A
---------
[Face of Security]
LENNOX INTERNATIONAL INC.
Certificate No. ____________
[INSERT PRIVATE PLACEMENT LEGEND AND GLOBAL SECURITY LEGEND
AS REQUIRED]
6 1/4% Convertible Subordinated Note due 2009
CUSIP No. ____________
LENNOX INTERNATIONAL INC., a Delaware corporation (herein called the
"Company"), for value received, hereby promises to pay to Cede & Co. or
registered assigns, the principal sum of _____________________________ Dollars
($____________) on June 1, 2009, and to pay interest thereon, as provided on the
reverse hereof, until the principal and any unpaid and accrued interest is paid
or duly provided for. The right to payment of the principal and all other
amounts due with respect hereto is subordinated to the rights of Senior
Indebtedness as set forth in the Indenture referred to on the reverse side
hereof.
Interest Payment Dates: June 1 and December 1, with the first payment to be
made on December 1, 2002.
Record Dates: May 15 and November 15.
The provisions on the back of this certificate are incorporated as if set
forth on the face hereof.
IN WITNESS WHEREOF, LENNOX INTERNATIONAL INC. has caused this instrument to
be duly signed.
LENNOX INTERNATIONAL INC.
By: /s/ Richard A. Smith
---------------------------------
Executive Vice President,
Chief Financial Officer and
Treasurer
Dated: _______________
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities referred to in the within-mentioned Indenture.
THE BANK OF NEW YORK, as Trustee
By: /s/ Terence Rawlins
---------------------
Authorized Signatory
Dated: ________________
A-2
[REVERSE OF SECURITY]
LENNOX INTERNATIONAL INC.
6 1/4% Convertible Subordinated Note due 2009
1. Interest. LENNOX INTERNATIONAL INC., a Delaware corporation (the
"Company"), promises to pay interest on the principal amount of this Security at
the rate per annum shown above. The Company will pay interest semi-annually on
June 1 and December 1 of each year, with the first payment to be made on
December 1, 2002. Interest on the Securities will accrue on the principal amount
from the most recent date to which interest has been paid or provided for or, if
no interest has been paid, from May 8, 2002. Interest will be computed on the
basis of a 360-day year of twelve 30-day months.
2. Maturity. The Securities will mature on June 1, 2009.
3. Method of Payment. The Company will pay interest on the Securities
(except defaulted interest) to the persons who are registered Holders of
Securities at the close of business on the record date set forth on the face of
this Security next preceding the applicable interest payment date. Holders of
Securities must surrender Securities to a Paying Agent to collect the principal,
Redemption Price or Repurchase Price of the Securities. The Company will pay all
amounts due with respect to the Securities in money of the United States that at
the time of payment is legal tender for payment of public and private debts. The
Company will pay interest on the Securities by wire transfer of immediately
available funds to the account specified by the Holder, or, at the Company's
option, by mailing a check to the Holders registered address.
4. Paying Agent, Registrar, Conversion Agent. Initially, THE BANK OF NEW
YORK (the "Trustee") will act as Paying Agent, Registrar and Conversion Agent.
The Company may change any Paying Agent, Registrar or Conversion Agent without
notice. The Company may act in any such capacity.
5. Indenture. The Company issued the Securities under an Indenture dated as
of May 8, 2002 (the "Indenture") between the Company and the Trustee. The terms
of the Securities 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
ss.ss. 77aaa-77bbbb) (the "Act") as in effect on the date of the Indenture. The
Securities are subject to all such terms, and Securityholders are referred to
the Indenture and the Act for a statement of such terms. The Securities are
general unsecured subordinated obligations of the Company limited to
$125,000,000 aggregate principal amount ($143,750,000 if the Initial Purchasers
(as defined in the Indenture) have elected to exercise their over-allotment
option to purchase an additional $18,750,000 of the Securities), except as
otherwise provided in the Indenture (except for Securities issued in
substitution for destroyed, mutilated, lost or stolen Securities). Terms used
herein which are defined in the Indenture have the meanings assigned to them in
the Indenture.
6. Optional Redemption. The Securities will be redeemable prior to maturity
at the option of the Company, in whole or in part, at any time on or after June
3, 2005; provided that the Daily Market Price of the Company's
A-3
Common Stock has exceeded 130% of the Conversion Price then in effect for at
least 20 trading days within a period of 30 consecutive trading days ending on
the trading day prior to the date of mailing of notice of redemption pursuant to
paragraph 7. The redemption prices for the Securities (expressed as percentages
of the principal amount thereof), if redeemed during the twelve-month period
commencing on the dates set forth below, in each case together with accrued and
unpaid interest to, but excluding, the redemption date:
Redemption
Date Price
------------- ----------
June 3, 2005 103.571%
June 1, 2006 102.679%
June 1, 2007 101.786%
June 1, 2008
and thereafter 100.893%
7. 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
Securities to be redeemed at its registered address. Securities in denominations
larger than $1,000 principal amount may be redeemed in part but only in positive
integral multiples of $1,000 principal amount. On and after the redemption date
interest ceases to accrue on Securities or portions of them called for
redemption.
8. Repurchase at Option of Holder. In the event of a Change in Control with
respect to the Company, then each Holder of the Securities shall have the right,
at the Holder's option, subject to the rights of the holders of Senior
Indebtedness under Article XI of the Indenture, to require the Company to
repurchase such Holder's Securities including any portion thereof which is
$1,000 in principal amount or any positive integral multiple thereof on a day
(the "Repurchase Date") no later than 30 business days after the date of the
mailing of the Change in Control Notice, unless otherwise required by applicable
law, at a price equal to 100% of the outstanding principal amount of such
Security, plus accrued and unpaid interest to, but excluding, the Repurchase
Date.
Within 30 business days after the occurrence of the Change in Control, the
Company is obligated to give notice of the occurrence of such Change in Control
to each Holder. Such notice shall include, among other things, the date by which
Holder must notify the Company of such Holder's intention to exercise the
Repurchase Right and of the procedure which such Holder must follow to exercise
such right. To exercise the Repurchase Right, a Holder of Securities must
deliver on or before the close of business on the third business day immediately
preceding the Repurchase Date written notice to the Company (or an agent
designated by the Company for such purpose) and the
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Trustee of the Holder's exercise of such right together with the Securities with
respect to which the right is being exercised, duly endorsed for transfer in
accordance with the provisions of the Indenture.
A "Change in Control" of the Company shall be deemed to have occurred at
such time as:
(i) any "person" or "group" (as such terms are used for purposes
of Sections 13(d) and 14(d) of the Exchange Act), other than an Exempt
Person, is or becomes the "beneficial owner" (as such term is used in
Rule 13d-3 under the Exchange Act), directly or indirectly, of 50% or
more of the voting power of the Company's Common Stock;
(ii) the individuals who on the issue date of the Securities
constituted the Company's Board of Directors and any new directors
whose election by the Company's Board of Directors or whose nomination
for election by the Company's stockholders was approved by at least a
majority of the directors then still in office who were either
directors on the issue date of the Securities or whose election or
nomination for election was previously so approved cease for any
reason to constitute a majority of the Company's Board of Directors;
or
(iii) the sale, lease or transfer of all or substantially all of
the assets and property of the Company to any "person" or "group" (as
such terms are used in Sections 13(d) and 14(d) of the Exchange Act),
including any group acting for the purpose of acquiring, holding or
disposing of securities within the meaning of Rule 13d-5(b)(1) under
the Exchange Act; provided that the grant of a security interest in
the Company's properties or assets in connection with a financing
arrangement is not a conveyance, transfer or lease for the purposes of
this subsection (iii).
However, a Change in Control will not be deemed to have occurred if either:
(X) the Daily Market Price of the Company's Common Stock for any five
trading days during the ten trading days immediately preceding
the Change in Control is at least equal to 105% of the then
effective Conversion Price on such trading date; or
(Y) in the case of a merger or consolidation, all of the consideration
(excluding cash payments for fractional shares and cash payments
pursuant to dissenters' appraisal rights) in the merger or
consolidation constituting the Change in Control consists of
common stock traded on a U.S. national securities exchange or
quoted on the Nasdaq National Market (or which will be so traded
or quoted when issued or exchanged in connection with such Change
in Control) and as a result of such transaction or transactions
the Securities become convertible solely into such common stock
and any such other consideration.
9. Conversion. A Holder of Securities may, convert a Security into Common
Stock of the Company as follows:
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A. A Holder of Securities may surrender Securities for conversion
during any conversion period, if the Daily Market Price of the Common Stock
for at least 20 consecutive trading days in the 30 consecutive trading-day
period ending on the first day of the conversion period was more than 110%
of the Conversion Price in effect on that thirtieth trading day. A
"conversion period" will be the period from and including the thirtieth
trading day in a fiscal quarter to, but not including the thirtieth trading
day in the immediately following fiscal quarter.
B. A Holder of Securities may surrender Securities for conversion
during the five business-day period following any 10 consecutive
trading-day period in which the daily average of the trading prices for the
Securities for that 10 trading-day period was less than 95% of the average
conversion value for the Securities during that period. As used in this
paragraph B, the "conversion value" is equal to the product of the Daily
Market Price for the Common Stock on a given day multiplied by the then
current conversion rate, which is the number of shares of Common Stock into
which each Security is then convertible. As used in this paragraph B, the
"trading price" of the Securities on any date of determination means the
average of the secondary market bid quotations per Security obtained by the
Company or the Calculation Agent for $10,000,000 principal amount of
Securities at approximately 3:30 p.m., New York City time, on such
determination date from three independent nationally recognized securities
dealers the Company selects, provided that if at least three such bids
cannot reasonably be obtained by the Company or the Calculation Agent, but
two such bids are obtained, then the average of the two bids shall be used,
and if only one such bid can reasonably be obtained by the Company or the
Calculation Agent, this one bid shall be used. If either the Company or the
Calculation Agent cannot reasonably obtain at least one bid for $10,000,000
principal amount of Securities from a nationally recognized securities
dealer or, in the Company's reasonable judgment, the bid quotations are not
indicative of the secondary market value of the Securities, then the
trading price of the Securities will equal (i) the then-applicable
conversion rate of the Securities multiplied by (ii) the Daily Market Price
of the Common Stock on such determination date. "Calculation Agent" means
UBS Warburg LLC, First Union Securities, Inc. or J.P. Morgan Securities
Inc., or any other securities dealer selected by the Company.
C. A Holder of Securities may surrender Securities for conversion if
(i) the Company has called the Securities for redemption; provided that if
a Security is called for redemption by the Company, the Holder may convert
it at any time before the close of business on the business day immediately
preceding the date fixed for such redemption, or (ii) the Securities are to
be repurchased by the Company pursuant to paragraph 8 hereof; provided that
(x) the Holder may convert the Securities at any time before the close of
business on the business day immediately preceding the Repurchase Date and
(y) if a Holder already has delivered a Change in Control Notice with
respect to a Security, the Holder may not surrender that Security for
conversion until the Holder has withdrawn the Change in Control Notice.
D. A Holder of Securities may surrender Securities for conversion if
(i) the Company distributes rights or warrants to all holders of Common
Stock entitling them (for a period commencing no
A-6
earlier than the record date for the determination of holders of Common
Stock entitled to receive such rights or warrants and expiring not more
than 60 days after such record date) to subscribe for or purchase shares of
Common Stock (or securities convertible into Common Stock), at a price per
share less than the then current market price (as determined pursuant to
Section 10.06(g) of the Indenture) of Common Stock on such record date,
(ii) the Company distributes to all holders of Common Stock cash or other
assets, debt securities or rights or warrants to subscribe for securities
(other than those referred to in clause (i) above), which distribution has
a per share value exceeding 10% of the Daily Market Price of the Common
Stock on the trading day preceding the declaration date of such
distribution, or (iii) a Change in Control has occurred other than pursuant
to a transaction described in paragraph E below; provided that the Company
shall mail to Holders of Securities a notice of such distribution or Change
in Control at least 20 days prior to the ex-dividend date for the
distribution or within 30 days of the occurrence of the Change in Control,
as the case may be. Once such notice to Holders of Securities has been
provided, Holders may convert their Securities any time until either (x)
the earlier of close of business on the business day immediately prior to
the ex-dividend date and the Company's announcement that the distribution
will not take place, in the case of a distribution, or (y) within 30 days
of the Change in Control notice, in the case of a Change in Control. In the
case of a distribution, no adjustment to the ability of a Holder of
Securities to convert will be made if the holder participates or will
participate in the distribution without conversion.
E. If the Company is party to a consolidation, merger or binding share
exchange or transfer of all or substantially all of the Company's assets
pursuant to which the Common Stock will be converted into or the right to
receive cash, securities or other property, a Holder of Securities may
surrender Securities for conversion at any time from and after the date
which is 15 days prior to the anticipated effective date of the transaction
until 15 days after the effective date of the transaction and at the
effective time of the transaction, the right to convert a Security into
Common Stock will be deemed to have changed into a right to convert the
Security into or the right to receive the kind and amount of cash,
securities or other property which the Holder would have received if the
Holder had converted the Security immediately prior to the transaction. If
the transaction also constitutes a Change in Control, the Holder may
require the Company to repurchase all or a portion of its Securities
pursuant to paragraph 8.
The initial conversion rate is 55.2868 shares of Common Stock per $1,000
principal amount of Securities, or an effective initial Conversion Price of
approximately $18.09 per share, subject to adjustment in the event of certain
circumstances as specified in the Indenture. The Company will deliver a check in
lieu of any fractional share. On conversion no payment or adjustment for any
unpaid and accrued interest, or liquidated damages with respect to, the
Securities will be made. If a Holder of Securities surrenders a Security for
conversion between the record date for the payment of interest and the next
interest payment date, such Security, when surrendered for conversion, must be
accompanied by payment of an amount equal to the interest thereon which the
registered Holder of Securities on such record date is to receive, unless the
Securities have been called for redemption as described in the Indenture.
A-7
To convert a Security, a Holder of Securities must (1) complete and sign
the Conversion Notice, with appropriate signature guarantee, on the back of the
Security, (2) surrender the Security to a Conversion Agent, (3) furnish
appropriate endorsements and transfer documents if required by the Registrar or
Conversion Agent, (4) pay the amount of interest, if any, the Holder may be paid
as provided in the last sentence of the above paragraph and (5) pay any transfer
or similar tax if required. A Holder of Securities may convert a portion of a
Security if the portion is $1,000 principal amount or a positive integral
multiple of $1,000 principal amount.
Any shares issued upon conversion of a Security shall bear the Private
Placement Legend until after the second anniversary of the later of the issue
date for the Securities and the last date on which the Company or any Affiliate
of the Company was the owner of such shares or the Security (or any predecessor
security) from which such shares were converted (or such shorter period of time
as permitted by Rule 144(k) under the Securities Act or any successor provision
thereunder) (or such longer period of time as may be required under the
Securities Act or applicable state securities laws in the Opinion of Counsel for
the Company, unless otherwise agreed by the Company and the Holder of such
Security).
10. Subordination. The Securities are subordinated in right of payment, in
the manner and to the extent set forth in the Indenture, to the prior payment in
full of all Senior Indebtedness. Each Holder of Securities by accepting a
Security agrees to such subordination and authorizes the Trustee to give it
effect.
11. Denominations, Transfer, Exchange. The Securities are in registered
form without coupons in denominations of $1,000 principal amount and positive
integral multiples of $1,000 principal amount. The transfer of Securities may be
registered and Securities may be exchanged as provided in the Indenture. The
Registrar may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents. No service charge shall be made for any
such registration of transfer or exchange, but the Company may require payment
of a sum sufficient to cover any tax or other governmental charge payable in
connection therewith. The Registrar need not exchange or register the transfer
of any Security selected for redemption in whole or in part, except the
unredeemed portion of Securities to be redeemed in part. Also, it need not
exchange or register the transfer of any Securities for a period of 15 days
before the mailing of a notice of redemption of the Securities selected to be
redeemed and in certain other circumstances provided in the Indenture.
12. Persons Deemed Owners. The registered Holder of a Security may be
treated as the owner of such Security for all purposes.
13. Merger or Consolidation. The Company shall not consolidate with or
merge into, or transfer or lease all or substantially all of its properties and
assets to, another person unless such other person is a corporation organized
under the laws of the United States, any State thereof or the District of
Columbia; such person assumes by supplemental indenture all the obligations of
the Company, under the Securities and this Indenture; and immediately after
giving effect to the transaction, no Default or Event of Default shall exist.
A-8
14. Amendments, Supplements and Waivers. Subject to certain exceptions, the
Indenture or the Securities may be amended or supplemented with the consent of
the Holders of at least a majority in aggregate principal amount of the
Securities then outstanding, and any existing Default or Event of Default may be
waived with the consent of the Holders of a majority in aggregate principal
amount of the Securities then outstanding. Without notice to or the consent of
any Securityholder, the Indenture or the Securities may be amended or
supplemented to cure any ambiguity or inconsistency to comply with Sections 5.01
and 10.12 of the Indenture, to make any changes or modifications to the
Indenture necessary in connection with the registration of the Securities under
the Securities Act and the qualification of the Indenture under the TIA, to
secure the obligations of the Company in respect of the Securities, to add to
covenants of the Company described in the Indenture for the benefit of
Securityholders, to surrender any right or power conferred upon the Company or
to make any changes or modifications to the Indenture that do not adversely
affect the rights of any Holder of Securities.
15. Defaults and Remedies. An Event of Default includes the occurrence of
any of the following: default in payment of principal at maturity, upon
redemption or exercise of a Repurchase Right or otherwise; default for 30 days
in payment of interest or other amounts due; failure by the Company for 60 days
after notice to it to comply with any of its other agreements in the Indenture
or the Securities; certain payment defaults or the acceleration of other
Indebtedness of the Company and certain events of bankruptcy or insolvency
involving the Company. If any Event of Default occurs and is continuing, the
Trustee or the Holders of at least 25% in aggregate principal amount of the
Securities then outstanding may declare all the Securities to be due and payable
immediately, except as provided in the Indenture. If an Event of Default
specified in Section 6.01(v) or (vi) of the Indenture with respect to the
Company occurs, the principal of and accrued interest on all the Securities
shall ipso facto become and be immediately due and payable without any
declaration or other act on the part of the Trustee or any Securityholder.
Securityholders may not enforce the Indenture or the Securities except as
provided in the Indenture. The Trustee may require indemnity satisfactory to it
before it enforces the Indenture or the Securities. Subject to certain
limitations, Holders of a majority in principal amount of the Securities then
outstanding may direct the Trustee in its exercise of any trust or power. The
Trustee may withhold from Securityholders notice of any continuing Default or
Event of Default (except a Default or Event of Default in payment) if it
determines that withholding notice is in the interests of the Securityholders.
The Company must furnish an annual compliance certificate to the Trustee.
16. Registration Rights. The Holders are entitled to registration rights as
set forth in the Registration Rights Agreement (as defined in the Indenture).
The Holders shall be entitled to receive liquidated damages in certain
circumstances, all as set forth in the Registration Rights Agreement.
17. Trustee Dealings with the Company. The Trustee under the Indenture, or
any banking institution serving as successor Trustee thereunder, 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.
A-9
18. No Recourse Against Others. No past, present or future director,
officer, employee or stockholder, as such, of the Company shall have any
liability for any obligations of the Company under the Securities or the
Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation. Each Securityholder by accepting a Security
waives and releases all such liability. The waiver and release are part of the
consideration for the issue of the Securities.
19. Authentication. This Security shall not be valid until authenticated by
the manual signature of the Trustee or an authenticating agent.
20. Abbreviations. Customary abbreviations may be used in the name of a
Securityholder or an assignee, such as: TEN COM (= tenants in common), TEN ENT
(= tenants by the entirety), 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).
21. Governing Law. The laws of the State of New York, without regard to
principles of conflicts of law, shall govern this Security and the Indenture.
THE COMPANY WILL FURNISH TO ANY SECURITYHOLDER UPON WRITTEN REQUEST AND
WITHOUT CHARGE A COPY OF THE INDENTURE. REQUESTS MAY BE MADE TO:
Lennox International Inc.
2140 Lake Park
Richardson, Texas 75080
Attention: Investor Relations
A-10
[FORM OF ASSIGNMENT]
I or we assign to
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER
__________________________________________________________
___________________________________________________________________________
(please print or type name and address)
________________________________________________________________________________
the within Security and all rights thereunder, and hereby irrevocably
constitutes and appoints
________________________________________________________________________________
Attorney to transfer the Security on the books of the Company with full power of
substitution in the premises.
Dated:_____________________________________ ____________________________________
NOTICE: The signature on this
assignment must correspond with the
name as it appears upon the face of
the within Security in every
particular without alteration or
enlargement or any change whatsoever
and be guaranteed by a guarantror
institution participating in the
Securities Transfer Agents Medallion
Program or in such other guarantee
program acceptable to the Trustee.
Signature Guarantee: ______________________________________________________
In connection with any transfer of this Security occurring prior to the
date which is the earlier of (i) the date of the declaration by the Commission
of the effectiveness of a registration statement under the Securities Act of
1933, as amended (the "Securities Act") covering resales of this Security (which
effectiveness shall not have been suspended or terminated at the date of the
transfer) and (ii) the Resale Restriction Termination Date, the undersigned
confirms that it has not utilized any general solicitation or general
advertising in connection with transfer:
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[CHECK ONE]
(1) ____ to the Company or any subsidiary thereof; or
(2) ____ pursuant to and in compliance with Rule 144A under the Securities
Act of 1933, as amended; or
(3) ____ outside the United States to a person other than a "U.S. person"
in compliance with Rule 904 of Regulation S under the Securities Act of 1933, as
amended; or
(4) ____ pursuant to the exemption from registration provided by Rule 144
under the Securities Act of 1933, as amended; or
(5) ____ pursuant to an effective registration statement under the
Securities Act of 1933, as amended.
and unless the box below is checked, the undersigned confirms that such Security
is not being transferred to an "affiliate" of the Company as defined in Rule 144
under the Securities Act of 1933, as amended (an "Affiliate"):
[ ] The transferee is an Affiliate of the Company. (If the Security is
transferred to an Affiliate, the restrictive legend must remain on the Security
for two years following the date of the transfer).
Unless one of the items is checked, the Trustee will refuse to register any
of the Securities evidenced by this certificate in the name of any person other
than the registered Holder thereof; provided, however, that if item (4) is
checked, the Company or the Trustee may require, prior to registering any such
transfer of the Securities, in their sole discretion, such written legal
opinions, certifications and other information as the Trustee or the Company
have reasonably requested to confirm that such transfer is being made pursuant
to an exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act of 1933, as amended.
If none of the foregoing items are checked, the Trustee or Registrar shall
not be obligated to register this Security in the name of any person other than
the Holder hereof unless and until the conditions to any such transfer of
registration set forth herein and in Section 2.16 of the Indenture shall have
been satisfied.
Dated: __________________________ Signed:__________________________________
(Sign exactly as name appears on
the other side of this Security)
Signature Guarantee: ___________________________________________________________
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TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED
The undersigned represents and warrants that it is purchasing this Security
for its own account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act of
1933, as amended, and is aware that the sale to it is being made in reliance on
Rule 144A and acknowledges that it has received such information regarding the
Company as the undersigned has requested pursuant to Rule 144A or has determined
transferor is relying upon the undersigned's foregoing representations in order
to claim the exemption from registration provided by Rule 144A.
Dated: _________________________ _________________________________________
NOTICE: To be executed by an executive
officer
A-13
CONVERSION NOTICE
To convert this Security into Common Stock of the, check the box: [ ]
To convert only part of this Security, state the principal amount to be
converted (must be in multiples of $1,000):
$------------------
If you want the stock certificate made out in another person's name, fill in the
form below:
________________________________________________________________________________
(Insert other person's soc. sec. or tax I.D. no.)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type other person's name, address and zip code)
Date:______________ Signature(s): ___________________________________________
(Sign exactly as your name(s) appear(s) on
the other side of this Security)
Signature(s) guaranteed by: ____________________________________________________
All signatures must be guaranteed by a guarantor
institution participating in the Securities Transfer
Agents Medallion Program or in such other guarantee
program acceptable to the Trustee.)
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OPTION OF HOLDER TO ELECT PURCHASE NOTICE
Certificate No. of Security: ___________
If you want to elect to have this Security purchased by the pursuant to
Section 3.08 of the Indenture, check the box: [ ]
If you want to elect to have only part of this Security purchased by the
Company pursuant to Section 3.08 of the Indenture, state the principal amount:
$ ----------------------------------
(in an integral multiple of $1,000)
Date:______________ Signature(s): ____________________________________________
(Sign exactly as your name(s) appear(s) on
the other side of this Security)
Signature(s) guaranteed by: ____________________________________________________
(All signatures must be guaranteed by a guarantor
institution participating in the Securities Transfer
Agents Medallion Program or in such other guarantee
program acceptable to the Trustee.)
A-15
SCHEDULE A
SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL SECURITY(a).
---------------------------------------------------------
The following exchanges of a part of this Global Security for an interest
in another Global Security or for Securities in certificated form, have been
made:
Principal
Amount of Amount of amount of this Signature or
decrease in increase in Global authorized
Principal Principal Security signatory of
amount of this amount of this following Trustee or
Date Global Global such decrease Note Custodian
Exchange Security Security (or increase)
____________________
(a) This is included in Global Notes only.
EXHIBIT B-1
-----------
FORM OF PRIVATE PLACEMENT LEGEND
THIS SECURITY AND THE COMMON STOCK ISSUABLE UPON CONVERSION OF THIS SECURITY
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED EXCEPT IN ACCORDANCE WITH THE FOLLOWING SENTENCE. BY ITS ACQUISITION
HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE ACQUIRER:
(1) REPRESENTS THAT:
(A) IT AND ANY ACCOUNT FOR WHICH IT IS ACTING IS A "QUALIFIED
INSTITUTIONAL BUYER" (WITHIN THE MEANING OF RULE 144A UNDER THE
SECURITIES ACT) AND THAT IT EXERCISES SOLE INVESTMENT DISCRETION
WITH RESPECT TO EACH SUCH ACCOUNT; OR
(B) IT IS NOT A UNITED STATES PERSON (WITHIN THE MEANING OF
REGULATION S UNDER THE SECURITIES ACT),
(2) AGREES THAT IT WILL NOT DIRECTLY OR INDIRECTLY ENGAGE IN ANY HEDGING
TRANSACTIONS INVOLVING THIS SECURITY OR THE COMMON STOCK ISSUABLE UPON
CONVERSION OF THIS SECURITY UNLESS IN COMPLIANCE WITH THE SECURITIES
ACT, AND
(3) AGREES FOR THE BENEFIT OF THE COMPANY THAT IT WILL NOT OFFER, SELL,
PLEDGE OR OTHERWISE TRANSFER THIS SECURITY, ANY BENEFICIAL INTEREST
HEREIN OR ANY SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION OF THIS
SECURITY, PRIOR TO THE DATE THAT IS THE LATER OF (X) TWO YEARS AFTER
THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH
THE COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS
SECURITY (OR ANY PREDECESSOR OF THIS SECURITY) OR SUCH SHORTER PERIOD
OF TIME AS PERMITTED BY RULE 144(K) UNDER THE SECURITIES ACT OR ANY
SUCCESSOR PROVISION THEREUNDER, AND (Y) SUCH LATER DATE, IF ANY, AS
MAY BE REQUIRED BY APPLICABLE LAW, EXCEPT ONLY:
(A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF;
(B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BECOME
EFFECTIVE UNDER THE SECURITIES ACT;
(C) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE
144A UNDER THE SECURITIES ACT;
(D) IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 OF
REGULATION S UNDER THE SECURITIES ACT; OR
(E) PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE
144 UNDER THE SECURITIES ACT.
PRIOR TO THE REGISTRATION OF ANY TRANSFER IN ACCORDANCE WITH (3)(C) OR
(D) ABOVE, A DULY COMPLETED AND SIGNED CERTIFICATE (THE FORM OF WHICH
MAY BE OBTAINED FROM THE TRUSTEE OR TRANSFER AGENT, AS APPLICABLE)
MUST BE DELIVERED TO THE TRUSTEE OR TRANSFER AGENT, AS APPLICABLE.
PRIOR TO
B-1-1
THE REGISTRATION OF ANY TRANSFER IN ACCORDANCE WITH (3)(E) ABOVE, THE
COMPANY AND THE TRUSTEE OR TRANSFER AGENT, AS APPLICABLE, RESERVE THE
RIGHT TO REQUIRE THE DELIVERY OF SUCH LEGAL OPINIONS, CERTIFICATIONS
OR OTHER EVIDENCE AS MAY REASONABLY BE REQUIRED IN ORDER TO DETERMINE
THAT THE PROPOSED TRANSFER IS BEING MADE IN COMPLIANCE WITH THE
SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS. NO REPRESENTATION
IS MADE AS TO THE AVAILABILITY OF ANY EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. THIS SECURITY AND ANY RELATED
DOCUMENTATION MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO TIME TO
MODIFY THE RESTRICTIONS ON AND PROCEDURES FOR RESALES AND OTHER
TRANSFERS OF THIS SECURITY TO REFLECT ANY CHANGE IN APPLICABLE LAW OR
REGULATION (OR THE INTERPRETATION THEREOF) OR IN PRACTICES RELATING TO
THE RESALE OR TRANSFER OF RESTRICTED SECURITIES GENERALLY. THE HOLDER
OF THIS SECURITY SHALL BE DEEMED BY THE ACCEPTANCE OF THIS SECURITY TO
HAVE AGREED TO ANY SUCH AMENDMENT OR SUPPLEMENT.
THE HOLDER OF THIS SECURITY IS SUBJECT TO, AND ENTITLED TO THE
BENEFITS OF, A REGISTRATION RIGHTS AGREEMENT, DATED AS OF MAY 8, 2002,
ENTERED INTO BY THE COMPANY FOR THE BENEFIT OF CERTAIN HOLDERS OF
SECURITIES FROM TIME TO TIME.
B-1-2
EXHIBIT B-2
FORM OF LEGEND FOR GLOBAL SECURITY
Any Global Security authenticated and delivered hereunder shall bear a
legend (which would be in addition to any other legends required in the case of
a Restricted Security) in substantially the following form:
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A
NOMINEE OF A DEPOSITARY OR A SUCCESSOR DEPOSITARY. THIS SECURITY IS NOT
EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN
THE DEPOSITARY OR ITS NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED
IN THE INDENTURE, AND NO TRANSFER OF THIS SECURITY (OTHER THAN A TRANSFER
OF THIS SECURITY AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE
DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER
NOMINEE OF THE DEPOSITARY) MAY BE REGISTERED EXCEPT IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE
COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND
ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF
OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL
SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE
RESTRICTIONS SET FORTH IN SECTION 2.16 OF THE INDENTURE.
B-2-1
EXHIBIT C-1
-----------
Form of Certificate To Be Delivered
in Connection with Transfers
Pursuant to Regulation S
The Bank of New York
101 Barclay Street, Floor 21W
New York, NY 10286
Facsimile: (212) 896-7299
Attention: Corporate Trust Administration
Re: LENNOX INTERNATIONAL INC. (the "Company") 6 1/4% Convertible
Subordinated Notes due 2009 (the "Securities")
Ladies and Gentlemen:
In connection with our proposed sale of $_________ aggregate principal
amount of the Securities, we confirm that such sale has been effected pursuant
to and in accordance with Regulation S under the U.S. Securities Act of 1933, as
amended (the "Securities Act"), and, accordingly, we represent that:
(1) the offer of the Securities was made in an "offshore transaction"
to a person other than a "U.S. person" (as defined in Regulation S);
(2) either (a) at the time the buy offer was originated, the
transferee was outside the United States or we and any person acting on our
behalf reasonably believed that the transferee was outside the United
States, or (b) the transaction was executed in, on or through the
facilities of a designated off-shore securities market and neither we nor
any person acting on our behalf knows that the transaction has been
pre-arranged with a buyer in the United States;
(3) no directed selling efforts have been made in the United
States in contravention of the requirements of Rule 903(b) or Rule
904(b) of Regulation S, as applicable;
(4) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act;
(5) we have advised the transferee of the transfer restrictions
applicable to the Securities; and
C-1-1
(6) if we are a dealer in securities or have received a selling
concession, fee or other remuneration in respect of the Securities,
and the transfer is to occur during the Restricted Period, then the
requirements of Rule 904(c)(1) have been satisfied.
You, the Company and counsel for the Company are entitled to rely upon this
letter and are irrevocably authorized to produce this letter or a copy hereof to
any interested party in any administrative or legal proceedings or official
inquiry with respect to the matters covered hereby. Terms used in this
certificate have the meanings set forth in Regulation S.
Very truly yours,
[Name of Transferor]
By:
----------------------------------------------
Authorized Signature
C-1-2
EXHIBIT C-2
-----------
Form of Certificate To Be Delivered
in Connection with Transfers
Pursuant to Regulation S
The Bank of New York
101 Barclay Street, Floor 21W
New York, NY 10286
Facsimile: (212) 896-7299
Attention: Corporate Trust Administration
Re: LENNOX INTERNATIONAL INC. (the "Company") 6 1/4% Convertible
Subordinated Notes due 2009 (the "Securities")
Ladies and Gentlemen:
In connection with our proposed purchase of $_________ aggregate principal
amount of the Securities, we confirm that such sale has been effected pursuant
to and in accordance with Regulation S under the U.S. Securities Act of 1933, as
amended (the "Securities Act"), and, accordingly, we represent that:
(1) the undersigned is not a U.S. person (as defined in Regulation S)
and has not acquired the Securities for the account or benefit of any U.S.
person;
(2) the undersigned is not a distributor within the meaning of
Regulation S; and
(3) the undersigned agrees to resell the Securities only in accordance
with the provisions of Regulation S, pursuant to registration under the
Securities Act, or pursuant to an exemption from registration and agrees
not to engage in hedging transactions with regard to the Securities unless
in compliance with the Securities Act.
You, the Company and counsel for the Company are entitled to rely upon this
letter and are irrevocably authorized to produce this letter or a copy hereof to
any interested party in any administrative or legal proceedings or official
inquiry with respect to the matters covered hereby. Terms used in this
certificate have the meanings set forth in Regulation S.
Very truly yours,
[Name of Transferee]
By:
----------------------------------------------
Authorized Signature
EXHIBIT D
---------
Form of Notice of Transfer Pursuant to Registration Statement
Lennox International Inc.
2140 Lake Park
Richardson, Texas 75080
Attention: General Counsel
The Bank of New York
101 Barclay Street, Floor 21W
New York, NY 10286
Facsimile: (212) 896-7299
Attention: Corporate Trust Administration
Re: LENNOX INTERNATIONAL INC. (the "Company") 6 1/4% Convertible
Subordinated Notes due 2009 (the "Securities")
Ladies and Gentlemen:
Please be advised that _____________ has transferred $___________ aggregate
principal amount of the Securities or __ shares of the Common Stock, $0.01 par
value per share, of the Company issuable on conversion of the Securities
("Stock") pursuant to an effective Shelf Registration Statement on Form S-3
(File No. 333-________).
We hereby certify that the prospectus delivery requirements, if any, of the
Securities Act of 1933 as amended, have been satisfied with respect to the
transfer described above and that the above-named beneficial owner of the
Securities or Stock is named as a "Selling Security Holder" in the Prospectus
dated _________, or in amendments or supplements thereto, and that the aggregate
principal amount of the Securities, or number of shares of Stock transferred are
[a portion of] the Securities or Stock listed in such Prospectus, as amended or
supplemented, opposite such owner's name.
Very truly yours,
-------------------------------------------------
(Name)
1 This is included in Global Notes only.