Exhibit 10.3
TABLE OF CONTENTS
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ARTICLE 1 DEFINITIONS.................................................................................................1
Section 1.01. Definitions................................................................................1
ARTICLE 2 ISSUE, DESCRIPTION, EXECUTION, REGISTRATION AND EXCHANGE OF DEBENTURES.....................................11
Section 2.01. Designation Amount And Issue of Debentures................................................11
Section 2.02. Form of Debentures........................................................................12
Section 2.03. Date and Denomination of Debentures; Payments of Interest.................................13
Section 2.04. Execution of Debentures...................................................................14
Section 2.05. Exchange and Registration of Transfer of Debentures; Restrictions on Transfer.............15
Section 2.06. Mutilated, Destroyed, Lost or Stolen Debentures...........................................21
Section 2.07. Temporary Debentures......................................................................22
Section 2.08. Cancellation of Debentures................................................................23
Section 2.09. CUSIP Numbers.............................................................................23
ARTICLE 3 REDEMPTION OF DEBENTURES...................................................................................23
Section 3.01. Redemption of Debentures..................................................................23
Section 3.02. Notice of Optional Redemption; Selection of Debentures....................................23
Section 3.03. Payment of Debentures Called for Redemption by the Company................................25
Section 3.04. Conversion Arrangement on Call for Redemption.............................................26
Section 3.05. Redemption at Option of Holders upon a Fundamental Change.................................26
ARTICLE 4 SUBORDINATION OF DEBENTURES................................................................................29
Section 4.01. Agreement of Subordination................................................................29
Section 4.02. Payments to Debentureholders..............................................................29
Section 4.03. Subrogation of Debentures.................................................................32
Section 4.04. Authorization to Effect Subordination.....................................................33
Section 4.05. Notice to Trustee.........................................................................33
Section 4.06. Trustee's Relation to Senior Indebtedness.................................................34
Section 4.07. No Impairment of Subordination............................................................34
Section 4.08. Certain Conversions Not Deemed Payment....................................................34
Section 4.09. Article Applicable to Paying Agents.......................................................35
Section 4.10. Senior Indebtedness Entitled to Rely......................................................35
Section 4.11. Reliance on Judicial Order or Certificate of Liquidating Agent............................35
ARTICLE 5 CONTINGENT INTEREST........................................................................................35
Section 5.01. Contingent Interest.......................................................................35
Section 5.02. Payment of Contingent Interest............................................................36
Section 5.03. Contingent Interest Notification..........................................................36
ARTICLE 6 PARTICULAR COVENANTS OF THE COMPANY........................................................................36
Section 6.01. Payment of Principal, Premium and Interest................................................36
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Section 6.02. Maintenance of Office or Agency...........................................................36
Section 6.03. Appointments to Fill Vacancies in Trustee's Office........................................37
Section 6.04. Provisions as to Paying Agent.............................................................37
Section 6.05. Existence.................................................................................38
Section 6.06. Maintenance of Properties.................................................................38
Section 6.07. Payment of Taxes and Other Claims.........................................................38
Section 6.08. Rule 144A Information Requirement.........................................................39
Section 6.09. Stay, Extension and Usury Laws............................................................39
Section 6.10. Compliance Certificate....................................................................39
Section 6.11. Liquidated Damages Notice.................................................................40
Section 6.12. Contingent Debt Tax Treatment.............................................................40
Section 6.13. Calculation of Original Issue Discount....................................................40
ARTICLE 7 DEBENTUREHOLDERS' LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE.........................................40
Section 7.01. Debentureholders' Lists...................................................................40
Section 7.02. Preservation and Disclosure of Lists......................................................41
Section 7.03. Reports By Trustee........................................................................41
Section 7.04. Reports by Company........................................................................41
ARTICLE 8 REMEDIES OF THE TRUSTEE AND DEBENTUREHOLDERS ON AN EVENT OF DEFAULT........................................42
Section 8.01. Events of Default.........................................................................42
Section 8.02. Payments of Debentures on Default; Suit Therefor..........................................44
Section 8.03. Application of Monies Collected By Trustee................................................46
Section 8.04. Proceedings by Debentureholder............................................................46
Section 8.05. Proceedings by Trustee....................................................................47
Section 8.06. Remedies Cumulative and Continuing........................................................47
Section 8.07. Direction of Proceedings and Waiver of Defaults by Majority of Debentureholders...........48
Section 8.08. Notice of Defaults........................................................................48
Section 8.09. Undertaking to Pay Costs..................................................................48
ARTICLE 9 THE TRUSTEE................................................................................................49
Section 9.01. Duties and Responsibilities of Trustee....................................................49
Section 9.02. Reliance on Documents, Opinions, Etc......................................................50
Section 9.03. No Responsibility for Recitals, Etc.......................................................51
Section 9.04. Trustee, Paying Agents, Conversion Agents or Registrar May Own Debentures.................52
Section 9.05. Monies to Be Held in Trust................................................................52
Section 9.06. Compensation and Expenses of Trustee......................................................52
Section 9.07. Officers' Certificate as Evidence.........................................................53
Section 9.08. Conflicting Interests of Trustee..........................................................53
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Section 9.09. Eligibility of Trustee....................................................................53
Section 9.10. Resignation or Removal of Trustee.........................................................53
Section 9.11. Acceptance by Successor Trustee...........................................................54
Section 9.12. Succession by Merger......................................................................55
Section 9.13. Preferential Collection of Claims.........................................................56
ARTICLE 10 THE DEBENTUREHOLDERS......................................................................................56
Section 10.01. Action by Debentureholders................................................................56
Section 10.02. Proof of Execution by Debentureholders....................................................56
Section 10.03. Who are Deemed Absolute Owners............................................................56
Section 10.04. Company-owned Debentures Disregarded......................................................57
Section 10.05. Revocation of Consents, Future Holders Bound..............................................57
ARTICLE 11 MEETINGS OF DEBENTUREHOLDERS..............................................................................57
Section 11.01. Purpose of Meetings.......................................................................57
Section 11.02. Call of Meetings by Trustee...............................................................58
Section 11.03. Call of Meetings by Company or Debentureholders...........................................58
Section 11.04. Qualifications For Voting.................................................................58
Section 11.05. Regulations...............................................................................58
Section 11.06. Voting....................................................................................59
Section 11.07. No Delay of Rights by Meeting.............................................................59
ARTICLE 12 SUPPLEMENTAL INDENTURES...................................................................................60
Section 12.01. Supplemental Indentures Without Consent of Debentureholders...............................60
Section 12.02. Supplemental Indenture with Consent of Debentureholders...................................61
Section 12.03. Effect of Supplemental Indenture..........................................................62
Section 12.04. Notation on Debentures....................................................................62
Section 12.05. Evidence of Compliance of Supplemental Indenture to be Furnished to Trustee...............62
ARTICLE 13 CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE.........................................................63
Section 13.01. Company May Consolidate on Certain Terms..................................................63
Section 13.02. Successor to be Substituted...............................................................63
Section 13.03. Opinion of Counsel to be Given Trustee....................................................64
ARTICLE 14 SATISFACTION AND DISCHARGE OF INDENTURE...................................................................64
Section 14.01. Discharge of Indenture....................................................................64
Section 14.02. Deposited Monies to be Held in Trust by Trustee...........................................65
Section 14.03. Paying Agent to Repay Monies Held.........................................................65
Section 14.04. Return of Unclaimed Monies................................................................65
Section 14.05. Reinstatement.............................................................................65
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ARTICLE 15 IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS...........................................65
Section 15.01. Indenture and Debentures Solely Corporate Obligations.....................................65
ARTICLE 16 CONVERSION OF DEBENTURES..................................................................................66
Section 16.01. Right to Convert.............................................................................66
Section 16.02. Exercise of Conversion Privilege; Issuance of Common
Stock on Conversion; No Adjustment for Interest or Dividends................................................69
Section 16.03. Cash Payments in Lieu of Fractional Shares................................................71
Section 16.04. Conversion Rate...........................................................................71
Section 16.05. Adjustment of Conversion Rate.............................................................71
Section 16.06. Effect of Reclassification, Consolidation, Merger or Sale.................................80
Section 16.07. Taxes on Shares Issued....................................................................81
Section 16.08. Reservation of Shares, Shares to Be Fully Paid; Compliance with Governmental
Requirements; Listing of Common Stock..............................................................81
Section 16.09. Responsibility of Trustee.................................................................82
Section 16.10. Notice to Holders Prior to Certain Actions................................................82
Section 16.11. Stockholder Rights Plans..................................................................83
Section 16.12. Payment of Cash in Lieu of Common Stock...................................................83
Section 16.13. Physical Settlement Election..............................................................85
ARTICLE 17 MISCELLANEOUS PROVISIONS..................................................................................85
Section 17.01. Provisions Binding on Company's Successors................................................85
Section 17.02. Official Acts by Successor Corporation....................................................85
Section 17.03. Addresses For Notices, Etc................................................................85
Section 17.04. Governing Law.............................................................................86
Section 17.05. Evidence of Compliance with Conditions Precedent, Certificates to Trustee.................86
Section 17.06. Legal Holidays............................................................................86
Section 17.07. Trust Indenture Act.......................................................................87
Section 17.08. No Security Interest Created..............................................................87
Section 17.09. Benefits of Indenture.....................................................................87
Section 17.10. Table of Contents, Headings, Etc..........................................................87
Section 17.11. Authenticating Agent......................................................................87
Section 17.12. Execution in Counterparts.................................................................88
Section 17.13. Severability..............................................................................88
Exhibit A Form of Debenture........................................................................A-1
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GREATBATCH, INC.
To
MANUFACTURERS AND TRADERS TRUST COMPANY,
as Trustee
---------------------------------------------------
INDENTURE
Dated as of
March 28, 2007
------------------------------------------------
2 1/4% Convertible Subordinated Debentures Due 2013
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INDENTURE
INDENTURE dated as of March 28, 2007 between Greatbatch, Inc., a
Delaware corporation (hereinafter called the "Company"), having its principal
office at 9645 Wehrle Drive, Clarence, New York 14031 and Manufacturers and
Traders Trust Company, a New York banking corporation, as trustee hereunder
(hereinafter called the "Trustee").
WITNESSETH:
WHEREAS, for its lawful corporate purposes, the Company has duly
authorized the issue of its 2 1/4% Convertible Subordinated Debentures Due 2013
(hereinafter called the "Debentures") and to provide the terms and conditions
upon which the Debentures are to be authenticated, issued and delivered, the
Company has duly authorized the execution and delivery of this Indenture; and
WHEREAS, the Debentures, the certificate of authentication to be borne
by the Debentures, a form of assignment, a form of option to elect redemption
upon a fundamental change, a form of repurchase notice and a form of conversion
notice to be borne by the Debentures are to be substantially in the forms
hereinafter provided for; and
WHEREAS, all acts and things necessary to make the Debentures, when
executed by the Company and authenticated and delivered by the Trustee or a duly
authorized authenticating agent, as in this Indenture provided, the valid,
binding and legal obligations of the Company, and to constitute this Indenture a
valid agreement according to its terms, have been done and performed, and the
execution of this Indenture and the issue hereunder of the Debentures have in
all respects been duly authorized,
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
That in order to declare the terms and conditions upon which the
Debentures are, and are to be, authenticated, issued and delivered, and in
consideration of the premises and of the purchase and acceptance of the
Debentures by the holders thereof, the Company covenants and agrees with the
Trustee for the equal and proportionate benefit of the respective holders from
time to time of the Debentures (except as otherwise provided below), as follows:
ARTICLE 1
DEFINITIONS
Section 1.01 Definitions. The terms defined in this Section 1.01
(except as herein otherwise expressly provided or unless the context otherwise
requires) for all purposes of this Indenture and of any indenture supplemental
hereto shall have the respective meanings specified in this Section 1.01. All
other terms used in this Indenture that are defined in the Trust Indenture Act
or which are by reference therein defined in the Securities Act (except as
herein otherwise expressly provided or unless the context otherwise requires)
shall have the meanings assigned to such terms in the Trust Indenture Act and in
the Securities Act as in force at the date of the execution of this Indenture.
The words "herein", "hereof", "hereunder" and words of similar import refer to
this Indenture as a whole and not to any particular Article, Section or other
Subdivision. The terms defined in this Article include the plural as well as the
singular.
"Accepted Purchased Shares" has the meaning specified in Section
16.05(g).
"Additional Debentures" means any Debentures (other than the Initial
Debentures) issued under this Indenture in accordance with Section 2.01 hereof,
as part of the same series and with the same CUSIP number as the Initial
Debentures.
"Additional Shares" has the meaning specified in Section 16.01(d).
"Adjustment Event" has the meaning specified in Section 16.05(l).
"Agent Members" has the meaning specified in Section 2.05(a).
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control", when used with respect to any specified Person means the power to
direct or cause the direction of the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise, and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
"Board of Directors" means the Board of Directors of the Company or a
committee of such Board duly authorized to act for it hereunder.
"Business Day" means any day except a Saturday, Sunday or legal holiday
on which banking institutions in The City of New York are authorized or
obligated by law, regulation or executive order to close.
"Cash Percentage" has the meaning specified in Section 16.12(b).
"Closing Sale Price" of the shares of Common Stock on any date means
the closing sale price per share (or, if no closing sale price is reported, the
average of the closing bid and ask prices or, if more than one in either case,
the average of the average closing bid and the average closing ask prices) on
such date as reported in composite transactions for the principal United States
securities exchange on which shares of Common Stock are traded or, if the shares
of Common Stock are not listed on a United States national or regional
securities exchange, as reported by the Nasdaq or by the National Quotation
Bureau Incorporated. In the absence of such quotations, the Company shall be
entitled to determine the Closing Sale Price on the basis it considers
appropriate. The Closing Sale Price shall be determined without reference to
extended or after hours trading.
"Commission" means the Securities and Exchange Commission, as from time
to time constituted, created under the Exchange Act, or, if at any time after
the execution of this Indenture such Commission is not existing and performing
the duties now assigned to it under the Trust Indenture Act, then the body
performing such duties at such time.
2
"Common Stock" means any stock of any class of the Company which has no
preference in respect of dividends or of amounts payable in the event of any
voluntary or involuntary liquidation, dissolution or winding up of the Company
and which is not subject to redemption by the Company. Subject to the provisions
of Section 16.06, however, shares issuable on conversion of Debentures shall
include only shares of the class designated as common stock of the Company at
the date of this Indenture (namely, the Common Stock, par value $.001) or shares
of any class or classes resulting from any reclassification or reclassifications
thereof and which have no preference in respect of dividends or of amounts
payable in the event of any voluntary or involuntary liquidation, dissolution or
winding up of the Company and which are not subject to redemption by the
Company; provided that if at any time there shall be more than one such
resulting class, the shares of each such class then so issuable on conversion
shall be substantially in the proportion which the total number of shares of
such class resulting from all such reclassifications bears to the total number
of shares of all such classes resulting from all such reclassifications.
"Company" means the corporation named as the "Company" in the first
paragraph of this Indenture, and, subject to the provisions of Article 13 and
Section 16.06, shall include its successors and assigns.
"Contingent Interest" means interest that accrues and is payable as
provided in Article 5.
"Continuing Directors" means, as of any date of determination, any
member of the Board of Directors who (i) was a member of such Board of Directors
on the date of this Indenture or (ii) was nominated for election or elected to
such Board of Directors with the approval of a majority of the Continuing
Directors who were members of such Board of Directors at the time of such
nomination or election.
"Conversion Price" as of any day will equal $1,000 divided by the
Conversion Rate as of such date.
"Conversion Rate" has the meaning specified in Section 16.04.
"Conversion Reference Period" means:
(i) for Debentures that are converted during the 60 days prior
to, but excluding, any Fundamental Change Redemption Date or the
maturity date of the Debentures, the 20 consecutive Trading Days
beginning on the third Trading Day following the relevant Fundamental
Change Redemption Date or the maturity date; and
(ii) in all other instances, the 20 consecutive Trading Days
beginning on the third Trading Day following the date of conversion.
3
"Conversion Value" means, for each $1,000 principal amount of
Debentures, the average of the Daily Conversion Values for each of the 20
consecutive Trading Days of the Conversion Reference Period.
"Corporate Trust Office" or other similar term, means the designated
office of the Trustee at which at any particular time its corporate trust
business as it relates to this Indenture shall be administered, which office is,
at the date as of which this Indenture is dated, located at One M&T Plaza,
Buffalo, New York 14203.
"Current Market Price" has the meaning specified in Section 16.05(h).
"Custodian" means Manufacturers and Traders Trust Company, as custodian
with respect to the Debentures in global form, or any successor entity thereto.
"Daily Conversion Value" means, with respect to any Trading Day, the
product of (1) the applicable Conversion Rate and (2) the Volume Weighted
Average Price on such Trading Day.
"Daily Share Amount" means, for each Trading Day of the Conversion
Reference Period and for each $1,000 principal amount of Debentures surrendered
for conversion, a number of shares (but in no event less than zero) equal to (i)
the amount of (a) the Volume Weighted Average Price for such Trading Day
multiplied by the applicable Conversion Rate, less (b) $1,000; divided by (ii)
the Volume Weighted Average Price for such Trading Day multiplied by 20.
"Debenture" or "Debentures" means any Debenture or Debentures, as the
case may be, authenticated and delivered under this Indenture, including any
Global Debenture.
"Debenture Register" has the meaning specified in Section 2.05.
"Debenture Registrar" has the meaning specified in Section 2.05.
"Debentureholder" or "holder" as applied to any Debenture, or other
similar terms (but excluding the term "Beneficial Holder"), means any Person in
whose name at the time a particular Debenture is registered on the Debenture
Registrar's books.
"Default" means any event that is, or after notice or passage of time,
or both, would be, an Event of Default.
"Defaulted Interest" has the meaning specified in Section 2.03.
"Depositary" means, the clearing agency registered under the Exchange
Act that is designated to act as the Depositary for the Global Debentures. The
Depository Trust Company shall be the initial Depositary, until a successor
shall have been appointed and become such pursuant to the applicable provisions
of this Indenture, and thereafter, "Depositary" shall mean or include such
successor.
4
"Designated Senior Indebtedness" means (i) all obligations under the
Senior Credit Facilities and (ii) any other Senior Indebtedness of the Company
which, at the date of determination, is specifically designated by the Company
in the instrument evidencing or governing such Senior Indebtedness as
"Designated Senior Indebtedness" for purposes of this Indenture.
"Determination Date" has the meaning specified in Section 16.05(l).
"Effective Date" has the meaning specified in Section 16.01(d).
"Event of Default" means any event specified in Section 8.01 as an
Event of Default.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder, as in effect from time to
time.
"Ex-Dividend Time" has the meaning specified in Section 16.01(b).
"Expiration Time" has the meaning specified in Section 16.05(f).
"Fair Market Value" has the meaning specified in Section 16.05(h).
"Extension Fee" has the meaning specified in Section 8.01(e).
"Extension Period" has the meaning specified in Section 8.01(e).
"Filing Failure" has the meaning specified in Section 8.01(e).
"Fiscal Quarter" means, with respect to the Company, first, second and
third quarters comprised of 13 weeks and fourth quarters comprised of either 13
weeks (in 52-week fiscal years) or 14 weeks (in 53-week fiscal years). The
Company has a 52 or 53 week fiscal year that ends on the Friday closest to
December 31. The Company shall confirm the ending dates of its fiscal quarters
for the current fiscal year to the Trustee upon the Trustee's request.
"Fundamental Change" means the occurrence of one or more of the
following events: (a) any "person" or "group" (as such terms are used in
Sections 13(d) and 14(d) of the Exchange Act), other than the Company, its
Subsidiaries, or the Company's or any Subsidiary's employee benefit plans, is or
becomes the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the
Exchange Act) of shares representing more than 50% of the combined voting power
of the then outstanding Voting Stock of the Company, (b) the Company
consolidates with or merges into any other corporation, any other corporation
(other than a subsidiary) merges into the Company, or the Company effects a
share exchange, other than: (i) any merger or consolidation (A) that does not
result in any reclassification, conversion, exchange or cancellation of Common
Stock and (B) pursuant to which shareholders of the Company immediately before
such transaction own, directly or indirectly immediately following such
transaction, at least a majority of the combined voting power of the then
outstanding Voting Stock of the corporation resulting from such transaction in
substantially the same respective proportions as their ownership of the Voting
Stock of the Company immediately before such transaction; or (ii) any merger or
consolidation solely for the purpose of changing the Company's jurisdiction of
incorporation and resulting in a reclassification, conversion or exchange of
outstanding shares of Common Stock solely into shares of common stock of the
surviving entity, (c) the Company, or the Company and its subsidiaries taken as
a whole, sells, assigns, conveys, transfers or leases all or substantially all
assets of the Company, or of the Company and its subsidiaries taken as a whole,
as applicable (other than to one or more wholly-owned subsidiaries of the
Company), (d) any time the Continuing Directors do not constitute a majority of
the Board of Directors of the Company (or, if applicable, a successor
corporation to the Company), (e) the Company undertakes a liquidation,
dissolution or winding up, or (f) a Termination of Trading; provided, however,
that a Fundamental Change under (a), (b) and (c) above shall not be deemed to
have occurred if at least 95% of the consideration (excluding cash payments for
fractional shares) in the transaction or transactions constituting the
Fundamental Change consists of shares of common stock that are, or upon issuance
will be, traded on a U. S. national securities exchange or approved for trading
on an established automated over-the-counter trading market in the U.S.
5
"Fundamental Change Notice" has the meaning specified in Section
3.05(b).
"Fundamental Change Expiration Time" has the meaning specified in
Section 3.05(b).
"Fundamental Change Redemption Date" has the meaning specified in
Section 3.05(a).
"Global Debenture" has the meaning specified in Section 2.02.
"Indebtedness" means, with respect to any Person, and without
duplication, (a) all indebtedness, obligations and other liabilities (contingent
or otherwise) of such Person for borrowed money (including obligations of the
Person in respect of overdrafts, foreign exchange contracts, currency exchange
agreements, interest rate protection agreements, and any loans or advances from
banks, whether or not evidenced by notes or similar instruments) or evidenced by
bonds, debentures, notes or similar instruments (whether or not the recourse of
the lender is to the whole of the assets of such Person or to only a portion
thereof), other than any account payable or other accrued current liability or
obligation incurred in the ordinary course of business in connection with the
obtaining of materials or services; (b) all reimbursement obligations and other
liabilities (contingent or otherwise) of such Person with respect to letters of
credit, bank guarantees or bankers' acceptances; (c) all obligations and
liabilities (contingent or otherwise) in respect of leases of such Person
required, in conformity with generally accepted accounting principles, to be
accounted for as capitalized lease obligations on the balance sheet of such
Person and all obligations and other liabilities (contingent or otherwise) under
any lease or related document (including a purchase agreement) in connection
with the lease of real property which provides that such Person is contractually
obligated to purchase or cause a third party to purchase the leased property and
thereby guarantee a minimum residual value of the leased property to the lessor
and the obligations of such Person under such lease or related document to
purchase or to cause a third party to purchase such leased property; (d) all
obligations of such Person (contingent or otherwise) with respect to an interest
rate or other swap, cap or collar agreement or other similar instrument or
agreement or foreign currency hedge, exchange, purchase or similar instrument or
agreement; (e) all direct or indirect guaranties or similar agreements by such
Person in respect of, and obligations or liabilities (contingent or otherwise)
of such Person to purchase or otherwise acquire or otherwise assure a creditor
against loss in respect of, indebtedness, obligations or liabilities of another
Person of the kind described in clauses (a) through (d); (f) any indebtedness or
other obligations described in clauses (a) through (e) secured by any mortgage,
pledge, lien or other encumbrance existing on property which is owned or held by
such Person, regardless of whether the indebtedness or other obligation secured
thereby shall have been assumed by such Person; and (g) any and all deferrals,
renewals, extensions and refundings of, or amendments, modifications or
supplements to, any indebtedness, obligation or liability of the kind described
in clauses (a) through (f).
6
"Indenture" means this instrument as originally executed or, if amended
or supplemented as herein provided, as so amended or supplemented.
"Initial Debentures" means Debentures in an aggregate principal amount
of $130,000,000 initially issued under this Indenture.
"Interest" or "interest" means, when used with reference to the
Debentures, any interest payable under the terms of the Debentures, including
contingent interest, if any, and Liquidated Damages, if any, payable under the
terms of the Registration Rights Agreement.
"Liquidated Damages" has the meaning specified for "Liquidated Damages
Amount" in Section 2(e) of the Registration Rights Agreement.
"Liquidated Damages Notice" has the meaning specified in Section 6.11.
"Notice Date" means the date of mailing of the notice of redemption
pursuant to Section 3.02.
"Offer Expiration Time" has the meaning specified in Section 16.05(g).
"Officers' Certificate", when used with respect to the Company, means a
certificate signed by the Chairman of the Board, the Chief Executive Officer,
the President or any Vice President (whether or not designated by a number or
numbers or word or words added before or after the title "Vice President") and
the Treasurer or any Assistant Treasurer, or the Secretary or Assistant
Secretary of the Company.
"Opinion of Counsel" means an opinion in writing signed by legal
counsel, who may be an employee of or counsel to the Company, or other counsel
reasonably acceptable to the Trustee.
"Optional Redemption" has the meaning specified in Section 3.02.
7
"Outstanding", when used with reference to Debentures and subject to
the provisions of Section 10.04, means, as of any particular time, all
Debentures authenticated and delivered by the Trustee under this Indenture,
except:
(a) Debentures theretofore canceled by the Trustee or
delivered to the Trustee for cancellation;
(b) Debentures, or portions thereof, (i) for the redemption of
which monies in the necessary amount shall have been deposited in trust
with the Trustee or with any paying agent (other than the Company) or
(ii) which shall have been otherwise defeased in accordance with
Article 14;
(c) Debentures in lieu of which, or in substitution for which,
other Debentures shall have been authenticated and delivered pursuant
to the terms of Section 2.06; and
(d) Debentures converted into Common Stock pursuant to Article
16 and Debentures deemed not outstanding pursuant to Article 3.
"Person" means a corporation, an association, a partnership, a limited
liability company, an individual, a joint venture, a joint stock company, a
trust, an unincorporated organization or a government or an agency or a
political subdivision thereof.
"Physical Settlement Election" has the meaning specified in Section
16.13(a).
"Portal Market" means The Portal Market operated by the National
Association of Securities Dealers, Inc. or any successor thereto.
"Predecessor Debenture" of any particular Debenture means every
previous Debenture evidencing all or a portion of the same debt as that
evidenced by such particular Debenture, and, for the purposes of this
definition, any Debenture authenticated and delivered under Section 2.06 in lieu
of a lost, destroyed or stolen Debenture shall be deemed to evidence the same
debt as the lost, destroyed or stolen Debenture that it replaces.
"Premium" means any premium payable under the terms of the Debentures.
"Purchased Shares" has the meaning specified in Section 16.05(f).
"Record date" has the meaning specified in Section 16.05(h).
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of March 28, 2007, between the Company and the
Debentureholders party thereto, as amended from time to time in accordance with
its terms.
"Regular Cash Dividend" has the meaning specified in Section 5.01.
8
"Representative" means (a) the indenture trustee or other trustee,
agent or representative for holders of Senior Indebtedness or (b) with respect
to any Senior Indebtedness that does not have any such trustee, agent or other
representative, (i) in the case of such Senior Indebtedness issued pursuant to
an agreement providing for voting arrangements as among the holders or owners of
such Senior Indebtedness, any holder or owner of such Senior Indebtedness acting
with the consent of the required persons necessary to bind such holders or
owners of such Senior Indebtedness and (ii) in the case of all other such Senior
Indebtedness, the holder or owner of such Senior Indebtedness.
"Responsible Officer" shall mean, when used with respect to the
Trustee, any officer within the corporate trust department of the Trustee with
direct responsibility for the administration of this Indenture and also means,
with respect to a particular corporate trust matter, any other officer to whom
such matter is referred because of such person's knowledge of any familiarity
with the particular subject.
"Restricted Securities" has the meaning specified in Section 2.05(c).
"Rights" has the meaning specified in Section 16.11.
"Rule 144A" means Rule 144A as promulgated under the Securities Act.
"Securities" has the meaning specified in Section 16.05(d).
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder, as in effect from time to time.
"Senior Credit Facilities" means the Senior Credit Facilities, (i)
under that certain Second Amended and Restated Credit Agreement dated as of May
31, 2005, among Greatbatch Ltd., as borrower, and Manufacturers and Traders
Trust Company, as lender and administrative agent and the other financial
institutions from time to time party thereto, together with the documents now or
hereafter related thereto (including, without limitation, any guarantee
agreements and any security documents) or (ii) contemplated by that certain
Commitment Letter and Term Sheet dated as of February 21, 2007 between
Greatbatch, Inc. and Manufacturers and Traders Trust Company, as lender and
administrative agent, providing for a senior secured credit facility to
Greatbatch, Ltd., as borrower, in an original maximum principal amount of
$200,000,000 (which may be increased at the borrower's option to $300,000,000),
as evidenced by the loan documents hereafter entered into in connection
therewith (including, without limitation, a credit agreement, any guarantee
agreements and any security documents), in each case as such agreements may be
amended (including any amendment and restatement thereof), supplemented or
otherwise modified from time to time, including any agreement extending the
maturity of, refinancing, replacing or otherwise restructuring (including by way
of increasing the maximum principal amount of the Indebtedness thereunder or by
way of adding the Company or any Subsidiaries of the Company as additional
borrowers or guarantors thereunder) the Indebtedness under such agreement or any
successor or replacement agreement and whether by the same or any other agent,
lender or group of lenders (or other institutions).
9
"Senior Indebtedness" means, whether outstanding on the date of this
Indenture or thereafter issued, all Indebtedness of the Company, including
interest (including interest accruing on or after the filing of any petition in
bankruptcy or for reorganization relating to the Company whether or not a claim
for post-filing interest is allowed in such proceeding) and premium, if any,
thereon, and other monetary amounts (including fees, expenses, reimbursement
obligations under letters of credit and indemnities) owing in respect thereof
unless, in the instrument creating or evidencing the same or pursuant to which
the same is outstanding, it is provided that the obligations in respect of such
Indebtedness rank pari passu with the Securities; provided, however, that Senior
Indebtedness will not include (1) any obligation of the Company to any
majority-owned Subsidiary, (2) any liability for federal, state, foreign, local
or other taxes owed or owing by the Company, (3) any accounts payable or other
liability to trade creditors of the Company arising in the ordinary course of
business, (4) any Indebtedness or obligation of the Company that is expressly
subordinate or junior in right of payment to any other Indebtedness or
obligation of the Company, or (5) obligations in respect of any Common Stock.
"Share Price" has the meaning specified in Section 16.10(d).
"Shelf Registration Statement" has the meaning given such term in the
Registration Rights Agreement.
"Significant Subsidiary" means, as of any date of determination, a
Subsidiary of the Company that would constitute a "significant subsidiary" as
such term is defined under Rule 1-02(w) of Regulation S-X of the Commission as
in effect on the date of this Indenture.
"Subsidiary" means, with respect to any Person, (i) any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of capital stock or other equity interest entitled (without
regard to the occurrence of any contingency) to vote in the election of
directors, managers or trustees thereof is at the time owned or controlled,
directly or indirectly, by such Person or one or more of the other subsidiaries
of that Person (or a combination thereof) and (ii) any partnership (a) the sole
general partner or managing general partner of which is such Person or a
subsidiary of such Person or (b) the only general partners of which are such
Person or of one or more subsidiaries of such Person (or any combination
thereof).
"Tax Original Issue Discount" means the amount of ordinary interest
income on a Debenture that must be accrued as original issue discount for United
States Federal income tax purposes pursuant to U.S. Treasury Regulation Section
1.1275-4.
"Termination of Trading" will be deemed to have occurred if the Common
Stock (or other common stock into which the Debentures are then convertible) is
neither listed for trading on a U.S. national securities exchange nor approved
for trading on an established automated over-the-counter trading market in the
U.S.
"Trading Day" has the meaning specified in Section 16.05(h).
10
"Trading Price" means, on any date, the average of the secondary market
bid quotations for the Debentures obtained by the Trustee for $10,000,000
principal amount of Debentures at approximately 3:30 p.m., New York City time,
on such date from three independent nationally recognized securities dealers
selected by the Company; provided that if at least three such bids cannot
reasonably be obtained by the Trustee, but two bids are obtained, then the
average of the two bids shall be used, and if only one such bid can reasonably
be obtained by the Trustee, one bid shall be used; and provided further that if
the Trustee cannot reasonably obtain at least one bid for $10,000,000 principal
amount of Debentures from a nationally recognized securities dealer, then the
Trading Price per $1,000 principal amount of Debentures shall be deemed to be
less than 98% of the product of (a) the number of shares of Common Stock
issuable upon conversion of $1,000 principal amount of Debentures and (b) the
Closing Sale Price on such date.
"Trigger Event" has the meaning specified in Section 16.05(d).
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended, as it was in force at the date of this Indenture, except as provided in
Sections 12.03 and 15.06; provided that if the Trust Indenture Act of 1939 is
amended after the date hereof, the term "Trust Indenture Act" shall mean, to the
extent required by such amendment, the Trust Indenture Act of 1939 as so
amended.
"Trustee" means Manufacturers and Traders Trust Company and its
successors and any corporation resulting from or surviving any consolidation or
merger to which it or its successors may be a party and any successor trustee at
the time serving as successor trustee hereunder.
"Volume Weighted Average Price" per share of Common Stock on any
Trading Day means such price as displayed on Bloomberg (or any successor
service) page "GB EQUITY VAP" in respect of the period from 9:30 a.m. to 4:00
p.m., New York City time, on such Trading Day; or, if such price is not
available, the Volume Weighted Average Price means the market value per share of
Common Stock on such day as determined by a nationally recognized independent
investment banking firm retained for this purpose by the Company.
"Voting Stock" of a corporation means all classes of capital stock of
such corporation then outstanding and normally entitled to vote in the election
of directors.
"Waiver Election" has the meaning specified in Section 16.14(c).
ARTICLE 2
ISSUE, DESCRIPTION, EXECUTION, REGISTRATION AND EXCHANGE OF DEBENTURES
Section 2.01 Designation Amount And Issue of Debentures. The Debentures
shall be designated as "2 1/4% Convertible Subordinated Debentures Due 2013".
Initial Debentures in an aggregate principal amount of $130,000,000 upon the
execution of this Indenture shall be executed by the Company and delivered to
the Trustee for authentication, and the Trustee shall thereupon authenticate and
deliver said Initial Debentures to or upon the written order of the Company,
signed by its Chairman of the Board, Chief Executive Officer, President or any
Vice President (whether or not designated by a number or numbers or word or
words added before or after the title "Vice President"), the Treasurer or any
Assistant Treasurer or the Secretary or Assistant Secretary, without any further
action by the Company hereunder. The Company may, from time to time after the
execution of this Indenture, execute and deliver to the Trustee for
authentication Additional Debentures of an aggregate principal amount, and the
Trustee shall thereupon authenticate and deliver said Additional Debentures to
or upon the written order of the Company, without any further action by the
Company hereunder; provided however that the Company may issue Additional
Debentures only if: (1) such Additional Debentures and Initial Debentures are
treated as part of the same issue of debt instruments for purposes of U.S.
federal income tax laws; (2) such Additional Debentures shall have the same
CUSIP number as the Initial Debentures; and (3) the Trustee receives and
Officers' Certificate and an Opinion of Counsel to the effect that such issuance
of Additional Debentures complies with the provisions of this Indenture,
including each provision of this paragraph.
11
Section 2.02 Form of Debentures. The Debentures and the Trustee's
certificate of authentication to be borne by such Debentures shall be
substantially in the form set forth in Exhibit A. The terms and provisions
contained in the form of Debenture attached as Exhibit A hereto shall
constitute, and are hereby expressly made, a part of this Indenture and, to the
extent applicable, the Company and the Trustee, by their execution and delivery
of this Indenture, expressly agree to such terms and provisions and to be bound
thereby.
Any of the Debentures may have such letters, numbers or other marks of
identification and such notations, legends, endorsements or changes as the
officers executing the same may approve (execution thereof to be conclusive
evidence of such approval) and as are not inconsistent with the provisions of
this Indenture, or as may be required by the Custodian, the Depositary or by the
National Association of Securities Dealers, Inc. in order for the Debentures to
be tradable on The Portal Market or as may be required for the Debentures to be
tradable on any other market developed for trading of securities pursuant to
Rule 144A or as may be required to comply with any applicable law or with any
rule or regulation made pursuant thereto or with any rule or regulation of any
securities exchange or automated quotation system on which the Debentures may be
listed, or to conform to usage, or to indicate any special limitations or
restrictions to which any particular Debentures are subject.
So long as the Debentures are eligible for book-entry settlement with
the Depositary, or unless otherwise required by law, or otherwise contemplated
by Section 2.05(a), all of the Debentures will be represented by one or more
Debentures in global form registered in the name of the Depositary or the
nominee of the Depositary (a "Global Debenture"). The transfer and exchange of
beneficial interests in any such Global Debenture shall be effected through the
Depositary in accordance with this Indenture and the applicable procedures of
the Depositary. Except as provided in Section 2.05(a), beneficial owners of a
Global Debenture shall not be entitled to have certificates registered in their
names, will not receive or be entitled to receive physical delivery of
certificates in definitive form and will not be considered holders of such
Global Debenture.
12
Any Global Debenture shall represent such of the outstanding Debentures
as shall be specified therein and shall provide that it shall represent the
aggregate amount of outstanding Debentures from time to time endorsed thereon
and that the aggregate amount of outstanding Debentures represented thereby may
from time to time be increased or reduced to reflect redemptions, repurchases,
conversions, transfers or exchanges permitted hereby. Any endorsement of a
Global Debenture to reflect the amount of any increase or decrease in the amount
of outstanding Debentures represented thereby shall be made by the Trustee or
the Custodian, at the direction of the Trustee, in such manner and upon
instructions given by the holder of such Debentures in accordance with this
Indenture. Payment of principal of and interest and premium, if any, on any
Global Debenture shall be made to the holder of such Debenture.
Section 2.03 Date and Denomination of Debentures; Payments of Interest.
The Debentures shall be issuable in registered form without coupons in
denominations of $1,000 principal amount and integral multiples thereof. Each
Debenture shall be dated the date of its authentication and shall bear interest
from the date specified on the face of the form of Debenture attached as Exhibit
A hereto. Interest on the Debentures shall be computed on the basis of a 360-day
year comprised of twelve 30-day months.
The Person in whose name any Debenture (or its Predecessor Debenture)
is registered on the Debenture Register at the close of business on any record
date with respect to any interest payment date shall be entitled to receive the
interest payable on such interest payment date, except that the interest payable
upon redemption will be payable to the Person to whom principal is payable
pursuant to such redemption (unless the redemption date is an interest payment
date, in which case the semi-annual payment of interest becoming due on such
date shall be payable to the holders of such Debentures registered as such on
the applicable record date). Notwithstanding the foregoing, if any Debenture (or
portion thereof) is converted into Common Stock during the period after a record
date for the payment of interest to, but excluding, the next succeeding interest
payment date and such Debenture (or portion thereof) has been called or tendered
for redemption on a redemption date which occurs during such period, the Company
shall not be required to pay interest on such interest payment date in respect
of any such Debenture (or portion thereof). Interest shall be payable at the
office of the Company maintained by the Company for such purposes in the Borough
of Manhattan, City of New York, which shall initially be an office or agency of
the Trustee. The Company shall pay interest (i) on any Debentures in
certificated form by check mailed to the address of the Person entitled thereto
as it appears in the Debenture Register (or upon written notice, by wire
transfer in immediately available funds, if such Person is entitled to interest
on aggregate principal in excess of $2 million) or (ii) on any Global Debenture
by wire transfer of immediately available funds to the account of the Depositary
or its nominee. The term "Record Date" with respect to any interest payment date
shall mean the June 1 or December 1 preceding the applicable June 15 or December
15 interest payment date, respectively.
Any interest on any Debenture which is payable, but is not punctually
paid or duly provided for, on any June 15 or December 15 (herein called
"Defaulted Interest") shall forthwith cease to be payable to the Debentureholder
on the relevant record date by virtue of his having been such Debentureholder,
and such Defaulted Interest shall be paid by the Company, at its election in
each case, as provided in clause (1) or (2) below:
13
(1) The Company may elect to make payment of any Defaulted Interest to
the Persons in whose names the Debentures (or their respective Predecessor
Debentures) are registered at the close of business on a special record date for
the payment of such Defaulted Interest, which shall be fixed in the following
manner. The Company shall notify the Trustee in writing of the amount of
Defaulted Interest proposed to be paid on each Debenture and the date of the
proposed payment (which shall be not less than twenty-five (25) days after the
receipt by the Trustee of such notice, unless the Trustee shall consent to an
earlier date), and at the same time the Company shall deposit with the Trustee
an amount of money equal to the aggregate amount to be paid in respect of such
Defaulted Interest or shall make arrangements satisfactory to the Trustee for
such deposit on or prior to the date of the proposed payment, such money when
deposited to be held in trust for the benefit of the Persons entitled to such
Defaulted Interest as in this clause provided. Thereupon the Trustee shall fix a
special record date for the payment of such Defaulted Interest which shall be
not more than fifteen (15) days and not less than ten (10) days prior to the
date of the proposed payment, and not less than ten (10) days after the receipt
by the Trustee of the notice of the proposed payment. The Trustee shall promptly
notify the Company of such special record date and, in the name and at the
expense of the Company, shall cause notice of the proposed payment of such
Defaulted Interest and the special record date therefor to be mailed,
first-class postage prepaid, to each holder at his address as it appears in the
Debenture Register, not less than ten (10) days prior to such special record
date. Notice of the proposed payment of such Defaulted Interest and the special
record date therefor having been so mailed, such Defaulted Interest shall be
paid to the Persons in whose names the Debentures (or their respective
Predecessor Debentures) are registered at the close of business on such special
record date and shall no longer be payable pursuant to the following clause (2)
of this Section 2.03.
(2) The Company may make payment of any Defaulted Interest in any other
lawful manner not inconsistent with the requirements of any securities exchange
or automated quotation system on which the Debentures may be listed or
designated for issuance, and upon such notice as may be required by such
exchange or automated quotation system, if, after notice given by the Company to
the Trustee of the proposed payment pursuant to this clause, such manner of
payment shall be deemed practicable by the Trustee.
Section 2.04 Execution of Debentures. The Debentures shall be signed in
the name and on behalf of the Company by the manual or facsimile signature of
its Chairman of the Board, Chief Executive Officer, President or any Vice
President (whether or not designated by a number or numbers or word or words
added before or after the title "Vice President") and attested by the manual or
facsimile signature of its Secretary or any of its Assistant Secretaries or its
Treasurer or any of its Assistant Treasurers (which may be printed, engraved or
otherwise reproduced thereon, by facsimile or otherwise). Only such Debentures
as shall bear thereon a certificate of authentication substantially in the form
set forth on the form of Debenture attached as Exhibit A hereto, manually
executed by the Trustee (or an authenticating agent appointed by the Trustee as
provided by Section 17.11), shall be entitled to the benefits of this Indenture
or be valid or obligatory for any purpose. Such certificate by the Trustee (or
such an authenticating agent) upon any Debenture executed by the Company shall
be conclusive evidence that the Debenture so authenticated has been duly
authenticated and delivered hereunder and that the holder is entitled to the
benefits of this Indenture.
14
In case any officer of the Company who shall have signed any of the
Debentures shall cease to be such officer before the Debentures so signed shall
have been authenticated and delivered by the Trustee, or disposed of by the
Company, such Debentures nevertheless may be authenticated and delivered or
disposed of as though the person who signed such Debentures had not ceased to be
such officer of the Company, and any Debenture may be signed on behalf of the
Company by such persons as, at the actual date of the execution of such
Debenture, shall be the proper officers of the Company, although at the date of
the execution of this Indenture any such person was not such an officer.
Section 2.05 Exchange and Registration of Transfer of Debentures;
Restrictions on Transfer. (a) The Company shall cause to be kept at the
Corporate Trust Office a register (the register maintained in such office and in
any other office or agency of the Company designated pursuant to Section 6.02
being herein sometimes collectively referred to as the "Debenture Register") in
which, subject to such reasonable regulations as it may prescribe, the Company
shall provide for the registration of Debentures and of transfers of Debentures.
The Debenture Register shall be in written form or in any form capable of being
converted into written form within a reasonably prompt period of time. The
Trustee is hereby appointed "Debenture Registrar" for the purpose of registering
Debentures and transfers of Debentures as herein provided. The Company may
appoint one or more co-registrars in accordance with Section 6.02.
Upon surrender for registration of transfer of any Debenture to the
Debenture Registrar or any co-registrar, and satisfaction of the requirements
for such transfer set forth in this Section 2.05, the Company shall execute, and
the Trustee shall authenticate and deliver, in the name of the designated
transferee or transferees, one or more new Debentures of any authorized
denominations and of a like aggregate principal amount and bearing such
restrictive legends as may be required by this Indenture.
Debentures may be exchanged for other Debentures of any authorized
denominations and of a like aggregate principal amount, upon surrender of the
Debentures to be exchanged at any such office or agency maintained by the
Company pursuant to Section 6.02. Whenever any Debentures are so surrendered for
exchange, the Company shall execute, and the Trustee shall authenticate and
deliver, the Debentures which the Debentureholder making the exchange is
entitled to receive bearing registration numbers not contemporaneously
outstanding.
All Debentures issued upon any registration of transfer or exchange of
Debentures shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Debentures
surrendered upon such registration of transfer or exchange.
All Debentures presented or surrendered for registration of transfer or
for exchange, redemption or conversion shall (if so required by the Company or
the Debenture Registrar) be duly endorsed, or be accompanied by a written
instrument or instruments of transfer in form satisfactory to the Company, and
the Debentures shall be duly executed by the Debentureholder thereof or his
attorney duly authorized in writing.
15
No service charge shall be made to any holder for any registration of,
transfer or exchange of Debentures, but the Company may require payment by the
holder of a sum sufficient to cover any tax, assessment or other governmental
charge that may be imposed in connection with any registration of transfer or
exchange of Debentures.
Neither the Company nor the Trustee nor any Debenture Registrar shall
be required to exchange or register a transfer of (a) any Debentures for a
period of fifteen (15) days next preceding any selection of Debentures to be
redeemed, (b) any Debentures or portions thereof called for redemption pursuant
to Section 3.02; (c) any Debentures or portions thereof surrendered for
conversion pursuant to Article 16; or (d) any Debentures or portions thereof
tendered for redemption (and not withdrawn) pursuant to Section 3.05.
(b) The following provisions shall apply only to Global
Debentures:
(i) Each Global Debenture authenticated under this Indenture
shall be registered in the name of the Depositary or a nominee thereof and
delivered to such Depositary or a nominee thereof or Custodian therefor, and
each such Global Debenture shall constitute a single Debenture for all purposes
of this Indenture.
(ii) Notwithstanding any other provision in this Indenture,
no Global Debenture may be exchanged in whole or in part for Debentures
registered, and no transfer of a Global Debenture in whole or in part may be
registered, in the name of any Person other than the Depositary or a nominee
thereof unless the Depositary (i) has notified the Company that it is unwilling
or unable to continue as Depositary for such Global Debenture and a successor
depositary has not been appointed by the Company within ninety days or (ii) has
ceased to be a clearing agency registered under the Exchange Act, an Event of
Default has occurred and is continuing or the Company, in its sole discretion,
notifies the Trustee in writing that it no longer wishes to have all the
Debentures represented by Global Debentures. Any Global Debenture exchanged
pursuant to clause (A) or (B) above shall be so exchanged in whole and not in
part and any Global Debenture exchanged pursuant to clause (C) above may be
exchanged in whole or from time to time in part as directed by the Company. Any
Debenture issued in exchange for a Global Debenture or any portion thereof shall
be a Global Debenture; provided that any such Debenture so issued that is
registered in the name of a Person other than the Depositary or a nominee
thereof shall not be a Global Debenture.
(iii) Securities issued in exchange for a Global Debenture
or any portion thereof pursuant to clause (ii) above shall be issued in
definitive, fully registered form, without interest coupons, shall have an
aggregate principal amount equal to that of such Global Debenture or portion
thereof to be so exchanged, shall be registered in such names and be in such
authorized denominations as the Depositary shall designate and shall bear any
legends required hereunder. Any Global Debenture to be exchanged in whole shall
be surrendered by the Depositary to the Trustee, as Debenture Registrar. With
regard to any Global Debenture to be exchanged in part, either such Global
Debenture shall be so surrendered for exchange or, if the Trustee is acting as
Custodian for the Depositary or its nominee with respect to such Global
Debenture, the principal amount thereof shall be reduced, by an amount equal to
the portion thereof to be so exchanged, by means of an appropriate adjustment
made on the records of the Trustee. Upon any such surrender or adjustment, the
Trustee shall authenticate and make available for delivery the Debenture
issuable on such exchange to or upon the written order of the Depositary or an
authorized representative thereof.
16
(iv) In the event of the occurrence of any of the events
specified in clause (ii) above, the Company will promptly make available to the
Trustee a reasonable supply of certificated Debentures in definitive, fully
registered form, without interest coupons.
(v) Neither any members of, or participants in, the
Depositary ("Agent Members") nor any other Persons on whose behalf Agent Members
may act shall have any rights under this Indenture with respect to any Global
Debenture registered in the name of the Depositary or any nominee thereof, and
the Depositary or such nominee, as the case may be, may be treated by the
Company, the Trustee and any agent of the Company or the Trustee as the absolute
owner and holder of such Global Debenture for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall prevent the Company, the
Trustee or any agent of the Company or the Trustee from giving effect to any
written certification, proxy or other authorization furnished by the Depositary
or such nominee, as the case may be, or impair, as between the Depositary, its
Agent Members and any other Person on whose behalf an Agent Member may act, the
operation of customary practices of such Persons governing the exercise of the
rights of a holder of any Debenture.
(vi) At such time as all interests in a Global Debenture
have been redeemed, repurchased, converted, canceled or exchanged for Debentures
in certificated form, such Global Debenture shall, upon receipt thereof, be
canceled by the Trustee in accordance with standing procedures and instructions
existing between the Depositary and the Custodian. At any time prior to such
cancellation, if any interest in a Global Debenture is redeemed, repurchased,
converted, canceled or exchanged for Debentures in certificated form, the
principal amount of such Global Debenture shall, in accordance with the standing
procedures and instructions existing between the Depositary and the Custodian,
be appropriately reduced, and an endorsement shall be made on such Global
Debenture, by the Trustee or the Custodian, at the direction of the Trustee, to
reflect such reduction.
(c) Every Debenture that bears or is required under this Section
2.05(c) to bear the legend set forth in this Section 2.05(c) (together with any
Common Stock issued upon conversion of the Debentures and required to bear the
legend set forth in Section 2.05(c), collectively, the "Restricted Securities")
shall be subject to the restrictions on transfer set forth in this Section
2.05(c) (including those set forth in the legend below) unless such restrictions
on transfer shall be waived by written consent of the Company, and the holder of
each such Restricted Security, by such Debenture holder's acceptance thereof,
agrees to be bound by all such restrictions on transfer. As used in Section
2.05(c) and 2.05(d), the term "transfer" encompasses any sale, pledge, loan,
transfer or other disposition whatsoever of any Restricted Security or any
interest therein.
17
Until the expiration of the holding period applicable to sales thereof
under Rule 144(k) under the Securities Act (or any successor provision), any
certificate evidencing such Debenture (and all securities issued in exchange
therefor or substitution thereof, other than Common Stock, if any, issued upon
conversion thereof, which shall bear the legend set forth in Section 2.05(c), if
applicable) shall bear a legend in substantially the following form, unless such
Debenture has been sold pursuant to a registration statement that has been
declared effective under the Securities Act (and which continues to be effective
at the time of such transfer) or pursuant to Rule 144 under the Securities Act
or any similar provision then in force, or unless otherwise agreed by the
Company in writing, with written notice thereof to the Trustee:
THE DEBENTURE EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT AS SET FORTH
IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS
THAT IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) OR AN "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501 OF
REGULATION D UNDER THE SECURITIES ACT); (2) AGREES THAT IT WILL NOT, PRIOR TO
EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THIS DEBENTURE UNDER
RULE 144(K) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION), RESELL OR
OTHERWISE TRANSFER THIS DEBENTURE OR THE COMMON STOCK ISSUABLE UPON CONVERSION
OF THIS DEBENTURE EXCEPT (A) TO GREATBATCH, INC. OR ANY SUBSIDIARY THEREOF, (B)
TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE
SECURITIES ACT, (C) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE
144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR (D) PURSUANT TO A REGISTRATION
STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT (AND WHICH
CONTINUES TO BE EFFECTIVE AT THE TIME OF SUCH TRANSFER); (3) PRIOR TO SUCH
TRANSFER (OTHER THAN A TRANSFER PURSUANT TO CLAUSE 2(D) ABOVE), IT WILL FURNISH
TO MANUFACTURERS AND TRADERS TRUST COMPANY, AS TRUSTEE (OR A SUCCESSOR TRUSTEE,
AS APPLICABLE), SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS THE
TRUSTEE MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE
PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT; AND (4) AGREES THAT IT WILL
DELIVER TO EACH PERSON TO WHOM THIS DEBENTURE IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF
THIS DEBENTURE PRIOR TO THE EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES
OF THIS DEBENTURE UNDER RULE 144(k) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR
PROVISION), THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE REVERSE
HEREOF RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS CERTIFICATE TO
MANUFACTURERS AND TRADERS TRUST COMPANY, AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS
APPLICABLE). THIS LEGEND WILL BE REMOVED UPON THE EARLIER OF THE TRANSFER OF
THIS DEBENTURE PURSUANT TO CLAUSE 2(D) ABOVE OR UPON ANY TRANSFER OF THIS
DEBENTURE UNDER RULE 144(k) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR
PROVISION). THE INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE
TO REGISTER ANY TRANSFER OF THIS DEBENTURE IN VIOLATION OF THE FOREGOING
RESTRICTION.
18
THIS DEBENTURE WAS ISSUED WITH ORIGINAL ISSUE DISCOUNT FOR U.S. FEDERAL
INCOME TAX PURPOSES. FOR PURPOSES OF SECTIONS 1273 AND 1275 OF THE INTERNAL
REVENUE CODE, THE ISSUE PRICE OF EACH DEBENTURE IS $950 PER $1,000 OF PRINCIPAL
AMOUNT, THE ISSUE DATE IS MARCH 28, 2007 AND THE COMPARABLE YIELD IS 8.4588%,
COMPOUNDED SEMI-ANNUALLY. HOLDERS OF THIS DEBENTURE MAY OBTAIN INFORMATION
REGARDING THE AMOUNT OF ORIGINAL ISSUE DISCOUNT, YIELD TO MATURITY AND THE
PROJECTED PAYMENT SCHEDULE FOR THIS DEBENTURE BY SUBMITTING A WRITTEN REQUEST
FOR SUCH INFORMATION TO: GREATBATCH, INC., 9645 WEHRLE DRIVE, CLARENCE, NEW YORK
14031, ATTN: TREASURER.
Any Debenture (or security issued in exchange or substitution therefor)
as to which such restrictions on transfer shall have expired in accordance with
their terms or as to conditions for removal of the foregoing legend set forth
therein have been satisfied may, upon surrender of such Debenture for exchange
to the Debenture Registrar in accordance with the provisions of this Section
2.05, be exchanged for a new Debenture or Debentures, of like tenor and
aggregate principal amount, which shall not bear the restrictive legend required
by this Section 2.05(c). If the Restricted Security surrendered for exchange is
represented by a Global Debenture bearing the legend set forth in this Section
2.05(c), the principal amount of the legended Global Debenture shall be reduced
by the appropriate principal amount and the principal amount of a Global
Debenture without the legend set forth in this Section 2.05(c) shall be
increased by an equal principal amount. If a Global Debenture without the legend
set forth in this Section 2.05(c) is not then outstanding, the Company shall
execute and the Trustee shall authenticate and deliver an unlegended Global
Debenture to the Depositary.
(d) Until the expiration of the holding period applicable to
sales thereof under Rule 144(k) under the Securities Act (or any successor
provision), any stock certificate representing Common Stock issued upon
conversion of any Debenture shall bear a legend in substantially the following
form, unless such Common Stock has been sold pursuant to a registration
statement that has been declared effective under the Securities Act (and which
continues to be effective at the time of such transfer) or pursuant to Rule 144
under the Securities Act or any similar provision then in force, or such Common
Stock has been issued upon conversion of Debentures that have been transferred
pursuant to a registration statement that has been declared effective under the
Securities Act or pursuant to Rule 144 under the Securities Act or any similar
provision then in force, or unless otherwise agreed by the Company in writing
with written notice thereof to the transfer agent:
19
THE COMMON STOCK EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY
STATE SECURITIES LAWS AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT AS SET
FORTH IN THE FOLLOWING SENTENCE. THE HOLDER HEREOF AGREES THAT, UNTIL THE
EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THE COMMON STOCK
EVIDENCED HEREBY UNDER RULE 144(k) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR
PROVISION), (1) IT WILL NOT RESELL OR OTHERWISE TRANSFER THE COMMON STOCK
EVIDENCED HEREBY EXCEPT (A) TO GREATBATCH, INC. OR ANY SUBSIDIARY THEREOF, (B)
TO A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) IN COMPLIANCE WITH RULE 144A, (C) PURSUANT TO THE EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR (D)
PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE
SECURITIES ACT (AND WHICH CONTINUES TO BE EFFECTIVE AT THE TIME OF SUCH
TRANSFER); (2) PRIOR TO SUCH TRANSFER (OTHER THAN A TRANSFER PURSUANT TO CLAUSE
1(D) ABOVE), IT WILL FURNISH TO MELLON INVESTOR SERVICES LLC, AS TRANSFER AGENT
(OR A SUCCESSOR TRANSFER AGENT, AS APPLICABLE), SUCH CERTIFICATIONS, LEGAL
OPINIONS OR OTHER INFORMATION AS SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO
CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT
AND (3) IT WILL DELIVER TO EACH PERSON TO WHOM THE COMMON STOCK EVIDENCED HEREBY
IS TRANSFERRED (OTHER THAN A TRANSFER PURSUANT TO CLAUSE 1(D) ABOVE) A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. THIS LEGEND WILL BE REMOVED UPON THE
EARLIER OF THE TRANSFER OF THE COMMON STOCK EVIDENCED HEREBY PURSUANT TO CLAUSE
1(D) ABOVE OR UPON ANY TRANSFER OF THE COMMON STOCK EVIDENCED HEREBY AFTER THE
EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THE SECURITY EVIDENCED
HEREBY UNDER RULE 144(k) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION).
Any such Common Stock as to which such restrictions on transfer shall
have expired in accordance with their terms or as to which the conditions for
removal of the foregoing legend set forth therein have been satisfied may, upon
surrender of the certificates representing such shares of Common Stock for
exchange in accordance with the procedures of the transfer agent for the Common
Stock, be exchanged for a new certificate or certificates for a like number of
shares of Common Stock, which shall not bear the restrictive legend required by
this Section 2.05(d).
(e) Any Debenture or Common Stock issued upon the conversion of a
Debenture that, prior to the expiration of the holding period applicable to
sales thereof under Rule 144(k) under the Securities Act (or any successor
provision), is purchased or owned by the Company or any Affiliate thereof may
not be resold by the Company or such Affiliate unless registered under the
Securities Act or resold pursuant to an exemption from the registration
requirements of the Securities Act in a transaction which results in such
Debentures or Common Stock, as the case may be, no longer being "Restricted
Securities" (as defined under Rule 144).
20
(f) The Trustee shall have no responsibility or obligation to any
Agent Members or any other Person with respect to the accuracy of the books or
records, or the acts or omissions, of the Depository or its nominee or of any
participant or member thereof, with respect to any ownership interest in the
Debentures or with respect to the delivery to any Agent Member or other Person
(other than the Depositary) of any notice (including any notice of redemption)
or the payment of any amount, under or with respect to such Debentures. All
notices and communications to be given to the Debentureholder and all payments
to be made to Debentureholders under the Debentures shall be given or made only
to or upon the order of the registered Debentureholders (which shall be the
Depository or its nominee in the case of a Global Debenture). The rights of
beneficial owners in any Global Debenture shall be exercised only through the
Depository subject to the customary procedures of the Depository. The Trustee
may rely and shall be fully protected in relying upon information furnished by
the Depository with respect to its Agent Members.
The Trustee shall have no obligation or duty to monitor, determine or
inquire as to compliance with any restrictions on transfer imposed under this
Indenture or under applicable law with respect to any transfer of any interest
in any Debenture (including any transfers between or among Agent Members in any
Global Indenture) other than to require delivery of such certificates and other
documentation or evidence as are expressly required by, and to do so if and when
expressly required by, the terms of this Indenture, and to examine the same to
determine substantial compliance as to form with the express requirements
hereof.
Section 2.06 Mutilated, Destroyed, Lost or Stolen Debentures. In case
any Debenture shall become mutilated or be destroyed, lost or stolen, the
Company in its discretion may execute, and upon its written request the Trustee
or an authenticating agent appointed by the Trustee shall authenticate and make
available for delivery, a new Debenture, bearing a number not contemporaneously
outstanding, in exchange and substitution for the mutilated Debenture, or in
lieu of and in substitution for the Debenture so destroyed, lost or stolen. In
every case, the applicant for a substituted Debenture shall furnish to the
Company, to the Trustee and, if applicable, to such authenticating agent such
security or indemnity as may be required by them to save each of them harmless
for any loss, liability, cost or expense caused by or connected with such
substitution, and, in every case of destruction, loss or theft, the applicant
shall also furnish to the Company, to the Trustee and, if applicable, to such
authenticating agent evidence to their satisfaction of the destruction, loss or
theft of such Debenture and of the ownership thereof.
Following receipt by the Trustee or such authenticating agent, as the
case may be, of satisfactory security or indemnity and evidence, as described in
the preceding paragraph, the Trustee or such authenticating agent may
authenticate any such substituted Debenture and make available for delivery such
Debenture. Upon the issuance of any substituted Debenture, the Company may
require the payment by the holder of a sum sufficient to cover any tax,
assessment or other governmental charge that may be imposed in relation thereto
and any other expenses connected therewith. In case any Debenture which has
matured or is about to mature or has been called for redemption or has been
tendered for redemption upon a Fundamental Change (and not withdrawn) or is to
be converted into Common Stock shall become mutilated or be destroyed, lost or
stolen, the Company may, instead of issuing a substitute Debenture, pay or
authorize the payment of or convert or authorize the conversion of the same
(without surrender thereof except in the case of a mutilated Debenture), as the
case may be, if the applicant for such payment or conversion shall furnish to
the Company, to the Trustee and, if applicable, to such authenticating agent
such security or indemnity as may be required by them to save each of them
harmless for any loss, liability, cost or expense caused by or in connection
with such substitution, and, in every case of destruction, loss or theft, the
applicant shall also furnish to the Company, the Trustee and, if applicable, any
paying agent or conversion agent evidence to their satisfaction of the
destruction, loss or theft of such Debenture and of the ownership thereof.
21
Every substitute Debenture issued pursuant to the provisions of this
Section 2.06 by virtue of the fact that any Debenture is destroyed, lost or
stolen shall constitute an additional contractual obligation of the Company,
whether or not the destroyed, lost or stolen Debenture shall be found at any
time, and shall be entitled to all the benefits of (but shall be subject to all
the limitations set forth in) this Indenture equally and proportionately with
any and all other Debentures duly issued hereunder. To the extent permitted by
law, all Debentures shall be held and owned upon the express condition that the
foregoing provisions are exclusive with respect to the replacement or payment or
conversion or redemption or repurchase of mutilated, destroyed, lost or stolen
Debentures and shall preclude any and all other rights or remedies
notwithstanding any law or statute existing or hereafter enacted to the contrary
with respect to the replacement or payment or conversion or redemption or
repurchase of negotiable instruments or other securities without their
surrender.
Section 2.07 Temporary Debentures. Pending the preparation of
Debentures in certificated form, the Company may execute and the Trustee or an
authenticating agent appointed by the Trustee shall, upon the written request of
the Company, authenticate and deliver temporary Debentures (printed or
lithographed). Temporary Debentures shall be issuable in any authorized
denomination and substantially in the form of the Debentures in certificated
form, but with such omissions, insertions and variations as may be appropriate
for temporary Debentures, all as may be determined by the Company. Every such
temporary Debenture shall be executed by the Company and authenticated by the
Trustee or such authenticating agent upon the same conditions and in
substantially the same manner, and with the same effect, as the Debentures in
certificated form. Without unreasonable delay, the Company will execute and
deliver to the Trustee or such authenticating agent Debentures in certificated
form and thereupon any or all temporary Debentures may be surrendered in
exchange therefor, at each office or agency maintained by the Company pursuant
to Section 6.02 and the Trustee or such authenticating agent shall authenticate
and make available for delivery in exchange for such temporary Debentures an
equal aggregate principal amount of Debentures in certificated form. Such
exchange shall be made by the Company at its own expense and without any charge
therefor. Until so exchanged, the temporary Debentures shall in all respects be
entitled to the same benefits and subject to the same limitations under this
Indenture as Debentures in certificated form authenticated and delivered
hereunder.
22
Section 2.08 Cancellation of Debentures. All Debentures surrendered for
the purpose of payment, redemption, conversion, exchange or registration of
transfer shall, if surrendered to the Company or any paying agent or any
Debenture Registrar or any conversion agent, be surrendered to the Trustee and
promptly canceled by it, or, if surrendered to the Trustee, shall be promptly
canceled by it, and no Debentures shall be issued in lieu thereof except as
expressly permitted by any of the provisions of this Indenture. The Trustee
shall dispose of such canceled Debentures in accordance with its customary
procedures. If the Company shall acquire any of the Debentures, such acquisition
shall not operate as a redemption or satisfaction of the indebtedness
represented by such Debentures unless and until the same are delivered to the
Trustee for cancellation.
Section 2.09 CUSIP Numbers. The Company in issuing the Debentures may
use "CUSIP" numbers (if then generally in use), and, if so, the Trustee shall
use "CUSIP" numbers in notices of redemption as a convenience to
Debentureholders; provided that any such notice may state that no representation
is made as to the correctness of such numbers either as printed on the
Debentures or as contained in any notice of a redemption and that reliance may
be placed only on the other identification numbers printed on the Debentures,
and any such redemption shall not be affected by any defect in or omission of
such numbers. The Company will promptly notify the Trustee of any change in the
"CUSIP" numbers.
ARTICLE 3
REDEMPTION OF DEBENTURES
Section 3.01 Redemption of Debentures. Except as otherwise provided in
Section 3.05, the Company may not redeem any Debentures prior to June 20, 2012.
At any time on or after June 20, 2012 and prior to maturity, the Debentures may
be redeemed at the option of the Company, in whole or in part, upon notice as
set forth in Section 3.02, at the redemption prices set forth in the form of
Debenture attached as Exhibit A hereto, together with accrued and unpaid
interest, if any, to, but excluding, the date fixed for redemption.
Section 3.02 Notice of Optional Redemption; Selection of Debentures. In
case the Company shall desire to exercise the right to redeem all or, as the
case may be, any part of the Debentures pursuant to Section 3.01, it shall fix a
date for redemption and it or, at its written request received by the Trustee
not fewer than forty-five (45) days prior (or such shorter period of time as may
be acceptable to the Trustee) to the date fixed for redemption, the Trustee in
the name of and at the expense of the Company, shall mail or cause to be mailed
a notice of such redemption not fewer than thirty (30) nor more than sixty (60)
days prior to the redemption date to each holder of Debentures so to be redeemed
as a whole or in part at its last address as the same appears on the Debenture
Register; provided that if the Company shall give such notice, it shall also
give written notice of the redemption date to the Trustee. Such mailing shall be
by first class mail. The notice, if mailed in the manner herein provided, shall
be conclusively presumed to have been duly given, whether or not the holder
receives such notice. In any case, failure to give such notice by mail or any
defect in the notice to the holder of any Debenture designated for redemption as
a whole or in part shall not affect the validity of the proceedings for the
redemption of any other Debenture. Concurrently with the mailing of any such
notice of redemption, the Company shall issue a press release announcing such
redemption, the form and content of which press release shall be determined by
the Company in its sole discretion. The failure to issue any such press release
or any defect therein shall not affect the validity of the redemption notice or
any of the proceedings for the redemption of any Debenture called for
redemption.
23
Each such notice of redemption shall specify the aggregate principal
amount of Debentures to be redeemed, the CUSIP number or numbers of the
Debentures being redeemed, the date fixed for redemption (which shall be a
Business Day), the redemption price at which Debentures are to be redeemed, the
place or places of payment, that payment will be made upon presentation and
surrender of such Debentures, that interest accrued to the date fixed for
redemption will be paid as specified in said notice, and that on and after said
date interest thereon or on the portion thereof to be redeemed will cease to
accrue. Such notice shall also state the current Conversion Rate and the date on
which the right to convert such Debentures or portions thereof into Common Stock
will expire. If fewer than all the Debentures are to be redeemed, the notice of
redemption shall identify the Debentures to be redeemed (including CUSIP
numbers, if any). In case any Debenture is to be redeemed in part only, the
notice of redemption shall state the portion of the principal amount thereof to
be redeemed and shall state that, on and after the redemption date, upon
surrender of such Debenture, a new Debenture or Debentures in principal amount
equal to the unredeemed portion thereof will be issued.
On or prior to the redemption date specified in the notice of
redemption given as provided in this Section 3.02, the Company will deposit with
the Trustee or with one or more paying agents (or, if the Company is acting as
its own paying agent, set aside, segregate and hold in trust as provided in
Section 6.04) an amount of money in immediately available funds sufficient to
redeem on the redemption date all the Debentures (or portions thereof) so called
for redemption (other than those theretofore surrendered for conversion into
Common Stock) at the appropriate redemption price, together with accrued
interest to, but excluding, the redemption date; provided that if such payment
is made on the redemption date it must be received by the Trustee or paying
agent, as the case may be, by 10:00 a.m. New York City time on such date. The
Company shall be entitled to retain any interest, yield or gain on amounts
deposited with the Trustee or any paying agent pursuant to this Section 3.02 in
excess of amounts required hereunder to pay the redemption price and accrued
interest to, but excluding, the redemption date. If any Debenture called for
redemption is converted pursuant hereto prior to such redemption date, any money
deposited with the Trustee or any paying agent or so segregated and held in
trust for the redemption of such Debenture shall be paid to the Company upon its
written request, or, if then held by the Company, shall be discharged from such
trust. Whenever any Debentures are to be redeemed, the Company will give the
Trustee written notice in the form of an Officers' Certificate not fewer than
forty-five (45) days (or such shorter period of time as may be acceptable to the
Trustee) prior to the redemption date as to the aggregate principal amount of
Debentures to be redeemed.
If less than all of the outstanding Debentures are to be redeemed, the
Trustee shall select the Debentures or portions thereof of the Global Debenture
or the Debentures in certificated form to be redeemed (in principal amounts of
$1,000 or multiples thereof) by lot, on a pro rata basis or by another method
the Trustee deems fair and appropriate. If any Debenture selected for partial
redemption is submitted for conversion in part after such selection, the portion
of such Debenture submitted for conversion shall be deemed (so far as may be
possible) to be the portion to be selected for redemption. The Debentures (or
portions thereof) so selected shall be deemed duly selected for redemption for
all purposes hereof, notwithstanding that any such Debenture is submitted for
conversion in part before the mailing of the notice of redemption.
24
Upon any redemption of less than all of the outstanding Debentures, the
Company and the Trustee may (but need not), solely for purposes of determining
the pro rata allocation among such Debentures as are unconverted and outstanding
at the time of redemption, treat as outstanding any Debentures surrendered for
conversion during the period of fifteen (15) days next preceding the mailing of
a notice of redemption and may (but need not) treat as outstanding any Debenture
authenticated and delivered during such period in exchange for the unconverted
portion of any Debenture converted in part during such period.
Section 3.03 Payment of Debentures Called for Redemption by the
Company. If notice of redemption has been given as provided in Section 3.02, the
Debentures or portion of Debentures with respect to which such notice has been
given shall, unless converted into Common Stock pursuant to the terms hereof,
become due and payable on the date fixed for redemption and at the place or
places stated in such notice at the applicable redemption price, together with
interest accrued to (but excluding) the redemption date, and on and after said
date (unless the Company shall default in the payment of such Debentures at the
redemption price, together with interest accrued to said date) interest on the
Debentures or portion of Debentures so called for redemption shall cease to
accrue and, after the close of business on the Business Day immediately
preceding the redemption date (unless the Company shall default in the payment
of such Debentures at the redemption price, together with interest accrued to
said date) such Debentures shall cease to be convertible into Common Stock and,
except as provided in Section 9.05 and Section 14.04, to be entitled to any
benefit or security under this Indenture, and the holders thereof shall have no
right in respect of such Debentures except the right to receive the redemption
price thereof and unpaid interest to (but excluding) the redemption date. On
presentation and surrender of such Debentures at a place of payment in said
notice specified, the said Debentures or the specified portions thereof shall be
paid and redeemed by the Company at the applicable redemption price, together
with interest accrued thereon to, but excluding, the redemption date; provided
that if the applicable redemption date is an interest payment date, the interest
payable on such interest payment date shall be paid on such interest payment
date to the holders of record of such Debentures on the applicable record date
instead of the holders surrendering such Debentures for redemption on such date.
Upon presentation of any Debenture redeemed in part only, the Company
shall execute and the Trustee shall authenticate and make available for delivery
to the holder thereof, at the expense of the Company, a new Debenture or
Debentures, of authorized denominations, in principal amount equal to the
unredeemed portion of the Debentures so presented.
Notwithstanding the foregoing, the Trustee shall not redeem any
Debentures or mail any notice of redemption during the continuance of a default
in payment of interest or premium, if any, on the Debentures. If any Debenture
called for redemption shall not be so paid upon surrender thereof for
redemption, the principal and premium, if any, shall, until paid or duly
provided for, bear interest from the redemption date at a rate equal to 1% per
annum plus the rate borne by the Debenture and such Debenture shall remain
convertible into Common Stock until the principal and premium, if any, and
interest shall have been paid or duly provided for.
25
Section 3.04 Conversion Arrangement on Call for Redemption. In
connection with any redemption of Debentures, the Company may arrange for the
purchase and conversion of any Debentures by an agreement with one or more
investment banks or other purchasers to purchase such Debentures by paying to
the Trustee in trust for the Debentureholders, on or before the date fixed for
redemption, an amount not less than the applicable redemption price, together
with interest accrued to, but excluding, the date fixed for redemption, of such
Debentures. Notwithstanding anything to the contrary contained in this Article
3, the obligation of the Company to pay the redemption price of such Debentures,
together with interest accrued to, but excluding, the date fixed for redemption,
shall be deemed to be satisfied and discharged to the extent such amount is so
paid by such purchasers. If such an agreement is entered into, a copy of which
will be filed with the Trustee prior to the date fixed for redemption, any
Debentures not duly surrendered for conversion by the holders thereof may, at
the option of the Company, be deemed, to the fullest extent permitted by law,
acquired by such purchasers from such holders and (notwithstanding anything to
the contrary contained in Article 16) surrendered by such purchasers for
conversion, all as of immediately prior to the close of business on the date
fixed for redemption (and the right to convert any such Debentures shall be
extended through such time), subject to payment of the above amount as
aforesaid. At the direction of the Company, the Trustee shall hold and dispose
of any such amount paid to it in the same manner as it would monies deposited
with it by the Company for the redemption of Debentures. Without the Trustee's
prior written consent, no arrangement between the Company and such purchasers
for the purchase and conversion of any Debentures shall increase or otherwise
affect any of the powers, duties, responsibilities or obligations of the Trustee
as set forth in this Indenture.
Section 3.05 Redemption at Option of Holders upon a Fundamental Change.
(a) If there shall occur a Fundamental Change at any time prior to maturity of
the Debentures, then each Debentureholder shall have the right, at such holder's
option, to require the Company to redeem all of such holder's Debentures, or any
portion thereof that is a multiple of $1,000 principal amount, on the date (the
"Fundamental Change Redemption Date") that is thirty (30) days after the date of
the Fundamental Change Notice (as defined in Section 3.05(b)) of such
Fundamental Change (or, if such 30th day is not a Business Day, the next
succeeding Business Day) at a redemption price equal to 100% of the principal
amount thereof, together with accrued interest to, but excluding, the
Fundamental Change Redemption Date; provided that if such Fundamental Change
Redemption Date falls after a record date and on or prior the corresponding
interest payment date, then the interest payable on such interest payment date
shall be paid to the holders of record of the Debentures on the applicable
record date instead of the holders surrendering the Debentures for redemption on
such date.
26
Upon presentation of any Debenture redeemed in part only, the Company
shall execute and, upon the Company's written direction to the Trustee, the
Trustee shall authenticate and make available for delivery to the holder
thereof, at the expense of the Company, a new Debenture or Debentures, of
authorized denominations, in aggregate principal amount equal to the unredeemed
portion of the Debentures presented.
(b) On or before the tenth day after the occurrence of a
Fundamental Change, the Company or at its written request (which must be
received by the Trustee at least five (5) Business Days prior to the date the
Trustee is requested to give notice as described below, unless the Trustee shall
agree in writing to a shorter period), the Trustee, in the name of and at the
expense of the Company, shall mail or cause to be mailed to all holders of
record on the date of the Fundamental Change a notice (the "Fundamental Change
Notice") of the occurrence of such Fundamental Change and of the redemption
right at the option of the holders arising as a result thereof. Such notice
shall be mailed in the manner and with the effect set forth in the first
paragraph of Section 3.02 (without regard for the time limits set forth
therein). If the Company shall give such notice, the Company shall also deliver
a copy of the Fundamental Change Company Notice to the Trustee at such time as
it is mailed to Debentureholders. Concurrently with the mailing of any
Fundamental Change Notice, the Company shall issue a press release announcing
such Fundamental Change referred to in the Fundamental Change Notice, the form
and content of which press release shall be determined by the Company in its
sole discretion. The failure to issue any such press release or any defect
therein shall not affect the validity of the Fundamental Change Notice or any
proceedings for the redemption of any Debenture which any Debentureholder may
elect to have the Company redeem as provided in this Section 3.05.
Each Fundamental Change Notice shall specify the circumstances
constituting the Fundamental Change, the Fundamental Change Redemption Date, the
price at which the Company shall be obligated to redeem Debentures, that the
holder must exercise the redemption right on or prior to the close of business
on the Fundamental Change Redemption Date (the "Fundamental Change Expiration
Time"), that the holder shall have the right to withdraw any Debentures
surrendered prior to the Fundamental Change Expiration Time, a description of
the procedure which a Debentureholder must follow to exercise such redemption
right and to withdraw any surrendered Debentures, the place or places where the
holder is to surrender such holder's Debentures, the amount of interest accrued
on each Debenture to the Fundamental Change Redemption Date and the CUSIP number
or numbers of the Debentures (if then generally in use).
No failure of the Company to give the foregoing notices and no defect
therein shall limit the Debentureholders' redemption rights or affect the
validity of the proceedings for the redemption of the Debentures pursuant to
this Section 3.05.
(c) For a Debenture, other than a Global Debenture to be so
redeemed at the option of the holder, the Company must receive at the office or
agency of the Company maintained for that purpose or, at the option of such
holder, the Corporate Trust Office, such Debenture with the form entitled
"Option to Elect Repayment Upon A Fundamental Change" on the reverse thereof
duly completed, together with such Debentures duly endorsed for transfer, on or
before the Fundamental Change Expiration Time. All questions as to the validity,
eligibility (including time of receipt) and acceptance of any Debenture for
redemption shall be determined by the Company, whose determination shall be
final and binding absent manifest error.
27
(d) On or prior to the Fundamental Change Redemption Date, the
Company will deposit with the Trustee or with one or more paying agents (or, if
the Company is acting as its own paying agent, set aside, segregate and hold in
trust as provided in Section 6.04) an amount of money sufficient to redeem on
the Fundamental Change Redemption Date all the Debentures to be redeemed on such
date at the appropriate redemption price, together with accrued interest to, but
excluding, the Fundamental Change Redemption Date; provided that if such payment
is made on the Fundamental Change Redemption Date it must be received by the
Trustee or paying agent, as the case may be, by 10:00 a.m. New York City time,
on such date. Payment for Debentures surrendered for redemption (and not
withdrawn) prior to the Fundamental Change Expiration Time will be made promptly
(but in no event more than five (5) Business Days) following the Repurchase Date
by mailing checks for the amount payable to the holders of such Debentures
entitled thereto as they shall appear in the Debenture Register.
(e) In the case of a reclassification, change, consolidation,
merger, combination, sale or conveyance to which Section 16.06 applies, in which
the Common Stock of the Company is changed or exchanged as a result into the
right to receive stock, securities or other property or assets (including cash),
which includes shares of Common Stock of the Company or shares of common stock
of another Person that are, or upon issuance will be, traded on a United States
national securities exchange or approved for trading on an established automated
over-the-counter trading market in the United States and such shares constitute
at the time such change or exchange becomes effective in excess of 50% of the
aggregate fair market value of such stock, securities or other property or
assets (including cash) (as determined by the Company, which determination shall
be conclusive and binding), then the Person formed by such consolidation or
resulting from such merger or which acquires such assets, as the case may be,
shall execute and deliver to the Trustee a supplemental indenture (accompanied
by an Opinion of Counsel that such supplemental indenture complies with the
Trust Indenture Act as in force at the date of execution of such supplemental
indenture) modifying the provisions of this Indenture relating to the right of
holders of the Debentures to cause the Company to repurchase the Debentures
following a Fundamental Change, including without limitation the applicable
provisions of this Section 3.05 and the definitions of Common Stock and
Fundamental Change, as appropriate, as determined in good faith by the Company
(which determination shall be conclusive and binding), to make such provisions
apply to such other Person if different from the Company and the common stock
issued by such Person (in lieu of the Company and the Common Stock of the
Company).
(f) The Company will comply with the provisions of Rule 13e-4 and
any other tender offer rules under the Exchange Act to the extent then
applicable in connection with the redemption rights of the holders of Debentures
in the event of a Fundamental Change.
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ARTICLE 4
SUBORDINATION OF DEBENTURES
Section 4.01 Agreement of Subordination. The Company covenants and
agrees, and each holder of Debentures issued hereunder by its acceptance thereof
likewise covenants and agrees, that all Debentures shall be issued subject to
the provisions of this Article 4, and each Person holding any Debentures,
whether upon original issue or upon registration of transfer, assignment or
exchange thereof, accepts and agrees to be bound by such provisions.
The payment of the principal of, premium, if any, and interest on all
Debentures (including, but not limited to, the redemption price with respect to
the Debentures called for redemption in accordance with Section 3.02 or
submitted for redemption in accordance with Section 3.05, as the case may be, as
provided in this Indenture) issued hereunder shall, to the extent and in the
manner hereinafter set forth, be subordinated and subject in right of payment to
the prior payment in full of all Senior Indebtedness, whether outstanding at the
date of this Indenture or thereafter incurred.
No provision of this Article 4 shall prevent the occurrence of any
default or Event of Default hereunder or have any effect on the rights of the
holders of the Debentures or the Trustee to accelerate the maturity of the
Debentures.
Section 4.02 Payments to Debentureholders. No payment shall be made
with respect to the principal of, premium, if any, or interest on the Debentures
(including, but not limited to, the redemption price with respect to the
Debentures to be called for redemption in accordance with Section 3.02 or
submitted for redemption in accordance with Section 3.05, as the case may be, as
provided in this Indenture), except payments and distributions made by the
Trustee as permitted by the first or second paragraph of Section 4.05, if:
(i) a default in the payment of principal, premium, if any,
interest, rent or other obligations in respect of Designated Senior Indebtedness
occurs and is continuing (or, in the case of Designated Senior Indebtedness for
which there is a period of grace, in the event of such a default that continues
beyond the period of grace, if any, specified in the instrument or lease
evidencing such Designated Senior Indebtedness) (a "Payment Default"); or
(ii) a default, other than a Payment Default, on any Designated
Senior Indebtedness occurs and is continuing that then permits holders of such
Designated Senior Indebtedness to accelerate its maturity (or in the case of any
lease that is Designated Senior Indebtedness, a default occurs and is continuing
that permits the lessor to either terminate the lease or require the Company to
make an irrevocable offer to terminate the lease following an event of default
thereunder) and the Trustee receives a notice of the default (a "Payment
Blockage Notice") from a holder of Designated Senior Indebtedness or a
Representative of Designated Senior Indebtedness (a "Non-Payment Default").
If the Trustee receives any Payment Blockage Notice pursuant to clause
(ii) above, no subsequent Payment Blockage Notice shall be effective for
purposes of this Section 4.02 unless and until at least 365 days shall have
elapsed since the initial effectiveness of the immediately prior Payment
Blockage Notice. No Non-Payment Default that existed or was continuing on the
date of delivery of any Payment Blockage Notice to the Trustee shall be, or be
made, the basis for a subsequent Payment Blockage Notice.
29
The Company may and shall resume payments on and distributions in
respect of the Debentures (including, but not limited to, the redemption price
with respect to the Debentures to be redeemed) upon the earlier of:
(1) in the case of a Payment Default, the date upon which any
such Payment Default is cured or waived or ceases to exist, or
(2) in the case of a Non-Payment Default, the earlier of (a) the
date upon which such default is cured or waived or ceases to exist or (b) 179
days after the applicable Payment Blockage Notice is received by the Trustee if
the maturity of such Designated Senior Indebtedness has not been accelerated (or
in the case of any lease, 179 days after notice is received if the Company has
not received notice that the lessor under such lease has exercised its right to
terminate the lease or require the Company to make an irrevocable offer to
terminate the lease following an event of default thereunder), unless this
Article 4 otherwise prohibits the payment or distribution at the time of such
payment or distribution.
Upon any payment by the Company, or distribution of assets of the
Company of any kind or character, whether in cash, property or securities, to
creditors upon any dissolution or winding up or liquidation or reorganization of
the Company, whether voluntary or involuntary or in bankruptcy, insolvency,
receivership or other proceedings, all amounts due or to become due upon all
Senior Indebtedness shall first be paid in full in cash or other payment
satisfactory to the holders of such Senior Indebtedness before any payment is
made on account of the principal of, premium, if any, or interest (including
Liquidated Damages, if any) on the Debentures (except payments made pursuant to
Article 14 from monies deposited with the Trustee pursuant thereto prior to
commencement of proceedings for such dissolution, winding up, liquidation or
reorganization), and upon any such dissolution or winding up or liquidation or
reorganization of the Company or bankruptcy, insolvency, receivership or other
similar proceeding, any payment by the Company, or distribution of assets of the
Company of any kind or character, whether in cash, property or securities, to
which the holders of the Debentures or the Trustee would be entitled, except for
the provisions of this Article 4, shall (except as aforesaid) be paid by the
Company or by any receiver, trustee in bankruptcy, liquidating trustee, agent or
other Person making such payment or distribution, or by the holders of the
Debentures or by the Trustee under this Indenture if received by them or it,
directly to the holders of Senior Indebtedness (pro rata to such holders on the
basis of the respective amounts of Senior Indebtedness held by such holders, or
as otherwise required by law or a court order) or their Representative or
Representatives, as their respective interests may appear, to the extent
necessary to pay all Senior Indebtedness in full, in cash or other payment
satisfactory to the holders of such Senior Indebtedness, after giving effect to
any concurrent payment or distribution to or for the holders of Senior
Indebtedness, before any payment or distribution is made to the holders of the
Debentures or to the Trustee.
30
For purposes of this Article 4, the words, "Cash, Property or
Securities" shall not be deemed to include shares of Common Stock of the Company
as reorganized or readjusted, or securities of the Company or any other
corporation provided for by a plan of reorganization or readjustment, the
payment of which is subordinated at least to the extent provided in this Article
4 with respect to the Debentures to the payment of all Senior Indebtedness which
may at the time be outstanding; provided that (i) the Senior Indebtedness is
assumed by the new corporation, if any, resulting from any reorganization or
readjustment, and (ii) the rights of the holders of Senior Indebtedness (other
than leases which are not assumed by the Company or the new corporation, as the
case may be) are not, without the consent of such holders, altered by such
reorganization or readjustment. The consolidation of the Company with, or the
merger of the Company into, another corporation or the liquidation or
dissolution of the Company following the conveyance or transfer of its property
as an entirety, or substantially as an entirety, to another Person upon the
terms and conditions provided for in Article 13 shall not be deemed a
dissolution, winding-up, liquidation or reorganization for the purposes of this
Section 4.02 if such other Person shall, as a part of such consolidation,
merger, conveyance or transfer, comply with the conditions stated in Article 13.
In the event of the acceleration of the Debentures because of an Event
of Default, no payment or distribution shall be made to the Trustee or any
holder of Debentures in respect of the principal of, premium, if any, or
interest on the Debentures (including, but not limited to, the redemption price
with respect to the Debentures called for redemption in accordance with Section
3.02 or submitted for redemption in accordance with Section 3.05, as the case
may be, as provided in this Indenture), except payments and distributions made
by the Trustee as permitted by the first or second paragraph of Section 4.05,
until all Senior Indebtedness has been paid in full in cash or other payment
satisfactory to the holders of Senior Indebtedness or such acceleration is
rescinded in accordance with the terms of this Indenture. If payment of the
Debentures is accelerated because of an Event of Default, the Company or, at the
Company's request and expense, the Trustee shall promptly notify holders of
Senior Indebtedness of the acceleration.
In the event that, notwithstanding the foregoing provisions, any
payment or distribution of assets of the Company of any kind or character,
whether in cash, property or securities (including, without limitation, by way
of setoff or otherwise), prohibited by the foregoing provisions in this Section
4.02, shall be received by the Trustee or the holders of the Debentures before
all Senior Indebtedness is paid in full in cash or other payment satisfactory to
the holders of such Senior Indebtedness, or provision is made for such payment
thereof in accordance with its terms in cash or other payment satisfactory to
the holders of such Senior Indebtedness, to the extent that the Trustee or any
holder of the Debentures has acquired notice, by whatever means, that all Senior
Indebtedness has not been paid in full, such payment or distribution shall be
held in trust for the benefit of and shall be paid over or delivered to the
holders of Senior Indebtedness or their Representative or Representatives, as
their respective interests may appear, as calculated by the Company, for
application to the payment of any Senior Indebtedness remaining unpaid to the
extent necessary to pay all Senior Indebtedness in full in cash or other payment
satisfactory to the holders of such Senior Indebtedness, after giving effect to
any concurrent payment or distribution to or for the holders of such Senior
Indebtedness.
31
Nothing in this Section 4.02 shall apply to claims of, or payments to,
the Trustee under or pursuant to Section 9.06. This Section 4.02 shall be
subject to the further provisions of Section 4.05.
Section 4.03 Subrogation of Debentures. Subject to the payment in full
of all Senior Indebtedness, the rights of the holders of the Debentures shall be
subrogated to the extent of the payments or distributions made to the holders of
such Senior Indebtedness pursuant to the provisions of this Article 4 (equally
and ratably with the holders of all Indebtedness of the Company which by its
express terms is subordinated to other Indebtedness of the Company to
substantially the same extent as the Debentures are subordinated and is entitled
to like rights of subrogation) to the rights of the holders of Senior
Indebtedness to receive payments or distributions of cash, property or
securities of the Company applicable to the Senior Indebtedness until the
principal, premium, if any, and interest on the Debentures shall be paid in
full, and, for the purposes of such subrogation, no payments or distributions to
the holders of the Senior Indebtedness of any cash, property or securities to
which the holders of the Debentures or the Trustee would be entitled except for
the provisions of this Article 4, and no payment pursuant to the provisions of
this Article 4, to or for the benefit of the holders of Senior Indebtedness by
holders of the Debentures or the Trustee, shall, as among the Company, its
creditors other than holders of Senior Indebtedness, and the holders of the
Debentures, be deemed to be a payment by the Company to or on account of the
Senior Indebtedness, and no payments or distributions of cash, property or
securities to or for the benefit of the holders of the Debentures pursuant to
the subrogation provisions of this Article 4, which would otherwise have been
paid to the holders of Senior Indebtedness, shall be deemed to be a payment by
the Company to or for the account of the Debentures. It is understood that the
provisions of this Article 4 are intended solely for the purposes of defining
the relative rights of the holders of the Debentures, on the one hand, and the
holders of the Senior Indebtedness, on the other hand.
Nothing contained in this Article 4 or elsewhere in this Indenture or
in the Debentures is intended to or shall impair, as among the Company, its
creditors other than the holders of Senior Indebtedness, and the holders of the
Debentures, the obligation of the Company, which is absolute and unconditional,
to pay to the holders of the Debentures the principal of, premium, if any, and
interest on the Debentures as and when the same shall become due and payable in
accordance with their terms, or is intended to or shall affect the relative
rights of the holders of the Debentures and creditors of the Company other than
the holders of the Senior Indebtedness, nor shall anything herein or therein
prevent the Trustee or, subject to Section 8.04, the holder of any Debenture
from exercising all remedies otherwise permitted by applicable law upon default
under this Indenture, subject to the rights, if any, under this Article 4 of the
holders of Senior Indebtedness in respect of cash, property or securities of the
Company received upon the exercise of any such remedy.
Upon any payment or distribution of assets of the Company referred to
in this Article 4, the Trustee, subject to the provisions of Section 9.01, and
the holders of the Debentures shall be entitled to rely upon any order or decree
made by any court of competent jurisdiction in which such bankruptcy,
dissolution, winding up, liquidation or reorganization proceedings are pending,
or a certificate of the receiver, trustee in bankruptcy, liquidating trustee,
agent or other Person making such payment or distribution, delivered to the
Trustee or to the holders of the Debentures, for the purpose of ascertaining the
Persons entitled to participate in such distribution, the holders of the Senior
Indebtedness and other indebtedness of the Company, the amount thereof or
payable thereon and all other facts pertinent thereto or to this Article 4.
32
Section 4.04 Authorization to Effect Subordination. Each holder of a
Debenture by the holder's acceptance thereof authorizes and directs the Trustee
on the holder's behalf to take such action as may be necessary or appropriate to
effectuate the subordination as provided in this Article 4 and appoints the
Trustee to act as the holder's attorney-in-fact for any and all such purposes.
If the Trustee does not file a proper proof of claim or proof of debt in the
form required in any proceeding referred to in the third paragraph of Section
8.02 hereof at least thirty (30) days before the expiration of the time to file
such claim, the holders of any Senior Indebtedness or their Representatives are
hereby authorized to file an appropriate claim for and on behalf of the holders
of the Debentures.
Section 4.05 Notice to Trustee. The Company shall give prompt written
notice in the form of an Officers' Certificate to a Responsible Officer of the
Trustee and to any paying agent of any fact known to the Company that would
prohibit the making of any payment of monies to or by the Trustee or any paying
agent in respect of the Debentures pursuant to the provisions of this Article 4.
Notwithstanding the provisions of this Article 4 or any other provision of this
Indenture, the Trustee shall not be charged with knowledge of the existence of
any facts that would prohibit the making of any payment of monies to or by the
Trustee in respect of the Debentures pursuant to the provisions of this Article
4, unless and until a Responsible Officer of the Trustee shall have received
written notice thereof at the Corporate Trust Office from the Company (in the
form of an Officers' Certificate) or a Representative or a holder or holders of
Senior Indebtedness, and before the receipt of any such written notice, the
Trustee, subject to the provisions of Section 9.01, shall be entitled in all
respects to assume that no such facts exist; provided, however, that if on a
date not less than one Business Day prior to the date upon which by the terms
hereof any such monies may become payable for any purpose (including, without
limitation, the payment of the principal of, or premium, if any, or interest on
any Debenture) the Trustee shall not have received, with respect to such monies,
the notice provided for in this Section 4.05, then, anything herein contained to
the contrary notwithstanding, the Trustee shall have full power and authority to
apply monies received to the purpose for which they were received, and shall not
be affected by any notice to the contrary that may be received by it on or after
such prior date.
Notwithstanding anything in this Article 4 to the contrary, nothing
shall prevent any payment by the Trustee to the Debenture holders of monies
deposited with it pursuant to Section 14.01, if a Responsible Officer of the
Trustee shall not have received written notice at the Corporate Trust Office on
or before one Business Day prior to the date such payment is due that such
payment is not permitted under Section 4.01 or 4.02.
The Trustee, subject to the provisions of Section 9.01, shall be
entitled to rely on the delivery to it of a written notice by a Representative
or a person representing himself to be a holder of Senior Indebtedness (or a
trustee on behalf of such holder) to establish that such notice has been given
by a Representative or a holder of Senior Indebtedness or a trustee on behalf of
any such holder or holders. The Trustee shall not be required to make any
payment or distribution to or on behalf of a holder of Senior Indebtedness
pursuant to this Article 4 unless it has received satisfactory evidence as to
the amount of Senior Indebtedness held by such Person, the extent to which such
Person is entitled to participate in such payment or distribution and any other
facts pertinent to the rights of such Person under this Article 4.
33
Section 4.06 Trustee's Relation to Senior Indebtedness. The Trustee, in
its individual capacity, shall be entitled to all the rights set forth in this
Article 4 in respect of any Senior Indebtedness at any time held by it, to the
same extent as any other holder of Senior Indebtedness, and nothing in Section
9.13 or elsewhere in this Indenture shall deprive the Trustee of any of its
rights as such holder.
With respect to the holders of Senior Indebtedness, the Trustee
undertakes to perform or to observe only such of its covenants and obligations
as are specifically set forth in this Article 4, and no implied covenants or
obligations with respect to the holders of Senior Indebtedness shall be read
into this Indenture against the Trustee. The Trustee shall not be deemed to owe
any fiduciary duty to the holders of Senior Indebtedness and, subject to the
provisions of Section 9.01, the Trustee shall not be liable to any holder of
Senior Indebtedness (i) for any failure to make any payments or distributions to
such holder or (ii) if it shall pay over or deliver money to holders of
Debentures, the Company or any other Person in compliance with this Article 4.
Section 4.07 No Impairment of Subordination. No right of any present or
future holder of any Senior Indebtedness to enforce subordination as herein
provided shall at any time in any way be prejudiced or impaired by any act or
failure to act on the part of the Company or by any act or failure to act, in
good faith, by any such holder, or by any noncompliance by the Company with the
terms, provisions and covenants of this Indenture, regardless of any knowledge
thereof which any such holder may have or otherwise be charged with. Senior
Indebtedness may be created, renewed or extended and holders of Senior
Indebtedness may exercise any rights under any instrument creating or evidencing
such Senior Indebtedness, including, without limitation, any waiver of default
thereunder, without any notice to or consent from the holders of the Debentures
or the Trustee. No compromise, alteration, amendment, modification, extension,
renewal or other change of, or waiver, consent or other action in respect of,
any liability or obligation under or in respect of the Senior Indebtedness or
any terms or conditions of any instrument creating or evidencing such Senior
Indebtedness shall in any way alter or affect any of the provisions of this
Article 4 or the subordination of the Debentures provided thereby.
Section 4.08 Certain Conversions Not Deemed Payment. For the purposes
of this Article 4 only, (1) the issuance and delivery of Junior Securities upon
conversion of Debentures in accordance with Article 16 and (2) the payment,
issuance or delivery of cash, property or securities upon conversion of a
Debenture as a result of any transaction specified in Section 16.06 shall not be
deemed to constitute a payment or distribution on account of the principal of,
premium, if any, or interest on Debentures or on account of the purchase or
other acquisition of Debentures. For the purposes of this Section 4.08, the term
"Junior Securities" means (a) Common Stock of the Company or (b) securities of
the Company that are subordinated in right of payment to all Senior Indebtedness
that may be outstanding at the time of issuance or delivery of such securities
to substantially the same extent as, or to a greater extent than, the Debentures
are so subordinated as provided in this Article 4. Nothing contained in this
Article 4 or elsewhere in this Indenture or in the Debentures is intended to or
shall impair, as among the Company, its creditors (other than holders of Senior
Indebtedness) and the Debentureholders, the right, which is absolute and
unconditional, of the Holder of any Debenture to convert such Debenture in
accordance with Article 16.
34
Section 4.09 Article Applicable to Paying Agents. If at any time any
paying agent other than the Trustee shall have been appointed by the Company and
be then acting hereunder, the term "Trustee" as used in this Article 4 shall
(unless the context otherwise requires) be construed as extending to and
including such paying agent within its meaning as fully for all intents and
purposes as if such paying agent were named in this Article 4 in addition to or
in place of the Trustee; provided, however, that the first paragraph of Section
4.05 shall not apply to the Company or any Affiliate of the Company if it or
such Affiliate acts as paying agent.
The Trustee shall not be responsible for the actions or inactions of
any other paying agents (including the Company if acting as its own paying
agent) and shall have no control of any funds held by such other paying agents.
Section 4.10 Senior Indebtedness Entitled to Rely. The holders of
Senior Indebtedness (including, without limitation, Designated Senior
Indebtedness) shall have the right to rely upon this Article 4, and no amendment
or modification of the provisions contained herein shall diminish the rights of
such holders unless such holders shall have agreed in writing thereto.
Section 4.11 Reliance on Judicial Order or Certificate of Liquidating
Agent. Upon any payment or distribution of assets of the Company referred to in
this Article 4, the Trustee and the Debentureholders shall be entitled to rely
upon any order or decree entered by any court of competent jurisdiction in which
such insolvency, bankruptcy, receivership, liquidation, reorganization,
dissolution, winding up or similar case or proceeding is pending, or a
certificate of the trustee in bankruptcy, liquidating trustee, custodian,
receiver, assignee for the benefit of creditors, agent or other Person making
such payment or distribution, delivered to the Trustee or to the
Debentureholders, for the purpose of ascertaining the Persons entitled to
participate in such payment or distribution, the holders of Senior Indebtedness
and other indebtedness of the Company, the amount thereof or payable thereon,
the amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article 4.
ARTICLE 5
CONTINGENT INTEREST
Section 5.01 Contingent Interest. Beginning with the six-month interest
period commencing June 15, 2012, the Company will pay contingent interest during
a six month interest period if the Trading Price for each of the five Trading
Days immediately preceding the first day of the applicable six-month interest
period equals or exceeds 120% of the principal amount of the Debentures. During
any six-month interest period when Contingent Interest is payable, the
Contingent Interest payable on each $1,000 principal amount of Debenture shall
equal 0.25 of the average Trading Price for $1,000 principal amount of
Debentures during the five Trading Day measuring period immediately preceding
the first day of applicable six-month interest period used to determine whether
Contingent Interest must be paid.
35
The Trustee's sole responsibility pursuant to Section 5.01 hereof shall
be to obtain the Trading Price of the Debentures for each of the five Trading
Days immediately preceding the first day of the applicable six-month interest
period and to provide such information to the Company. The Company shall
determine whether holders are entitled to receive Contingent Interest, and if
so, provide notice pursuant to Section 5.03. Notwithstanding any term contained
in this Indenture or any other document to the contrary, the Trustee shall have
no responsibilities, duties or obligations for or with respect to (i)
determining whether the Company must pay Contingent Interest or (ii) determining
the amount of Contingent Interest, if any, payable by the Company.
Section 5.02 Payment of Contingent Interest. Contingent Interest for
any six-month interest period shall be paid on the applicable interest payment
date to the Person in whose name any Debenture (or its Predecessor Debenture) is
registered on the Debenture Register at the corresponding record date.
Contingent Interest due under this Article 5 shall be treated for all purposes
of this Indenture like any other interest accruing on the Debentures.
Section 5.03 Contingent Interest Notification. By the first Business
Day of a six-month interest period during which Contingent Interest will be
paid, the Company will disseminate a press release through Dow Jones & Company,
Inc. or Bloomberg Business News stating that Contingent Interest will be paid on
the Debentures and identifying the six month interest period.
ARTICLE 6
PARTICULAR COVENANTS OF THE COMPANY
Section 6.01 Payment of Principal, Premium and Interest. The Company
covenants and agrees that it will duly and punctually pay or cause to be paid
the principal of and premium, if any (including the redemption price upon
redemption, and interest, on each of the Debentures at the places, at the
respective times and in the manner provided herein and in the Debentures.
Section 6.02 Maintenance of Office or Agency. The Company will maintain
an office or agency in the Borough of Manhattan, the City of New York, where the
Debentures may be surrendered for registration of transfer or exchange or for
presentation for payment or for conversion or redemption and where notices and
demands to or upon the Company in respect of the Debentures and this Indenture
may be served. The Company will give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency not
designated or appointed by the Trustee. If at any time the Company shall fail to
maintain any such required office or agency or shall fail to furnish the Trustee
with the address thereof, such presentations, surrenders, notices and demands
may be made or served at the Corporate Trust Office or the corporate trust
office of the Trustee in The Borough of Manhattan which office is located at 55
Water Street, The Jeanette Park Entrance, New York, New York 10041.
The Company may also from time to time designate co-registrars and one
or more offices or agencies where the Debentures may be presented or surrendered
for any or all such purposes and may from time to time rescind such
designations. The Company will give prompt written notice of any such
designation or rescission and of any change in the location of any such other
office or agency.
36
The Company hereby initially designates the Trustee as paying agent,
Debenture Registrar, Custodian and conversion agent and each of the Corporate
Trust Office and the office of agency of the Trustee in The Borough of
Manhattan, shall be considered as one such office or agency of the Company for
each of the aforesaid purposes.
So long as the Trustee is the Debenture Registrar, the Trustee agrees
to mail, or cause to be mailed, the notices set forth in Section 9.10(a) and the
third paragraph of Section 9.11. If co-registrars have been appointed in
accordance with this Section, the Trustee shall mail such notices only to the
Company and the holders of Debentures it can identify from its records.
Section 6.03 Appointments to Fill Vacancies in Trustee's Office. The
Company, whenever necessary to avoid or fill a vacancy in the office of Trustee,
will appoint, in the manner provided in Section 9.10, a Trustee, so that there
shall at all times be a Trustee hereunder.
Section 6.04 Provisions as to Paying Agent. (a) If the Company shall
appoint a paying agent other than the Trustee, or if the Trustee shall appoint
such a paying agent, the Company will cause such paying agent to execute and
deliver to the Trustee an instrument in which such agent shall agree with the
Trustee, subject to the provisions of this Section 6.04:
(1) that it will hold all sums held by it as such agent for
the payment of the principal of and premium, if any, or interest on the
Debentures (whether such sums have been paid to it by the Company or by any
other obligor on the Debentures) in trust for the benefit of the holders of the
Debentures;
(2) that it will give the Trustee notice of any failure by
the Company (or by any other obligor on the Debentures) to make any payment of
the principal of and premium, if any, or interest on the Debentures when the
same shall be due and payable; and
(3) that at any time during the continuance of an Event of
Default, upon request of the Trustee, it will forthwith pay to the Trustee all
sums so held in trust.
The Company shall, on or before each due date of the principal of,
premium, if any, or interest on the Debentures, deposit with the paying agent a
sum (in funds which are immediately available on the due date for such payment)
sufficient to pay such principal, premium, if any, or interest, and (unless such
paying agent is the Trustee) the Company will promptly notify the Trustee of any
failure to take such action; provided that if such deposit is made on the due
date, such deposit shall be received by the paying agent by 10:00 a.m. New York
City time, on such date.
(b) If the Company shall act as its own paying agent, it will, on
or before each due date of the principal of, premium, if any, or interest on the
Debentures, set aside, segregate and hold in trust for the benefit of the
holders of the Debentures a sum sufficient to pay such principal, premium, if
any, or interest so becoming due and will promptly notify the Trustee of any
failure to take such action and of any failure by the Company (or any other
obligor under the Debentures) to make any payment of the principal of, premium,
if any, or interest on the Debentures when the same shall become due and
payable.
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(c) Anything in this Section 6.04 to the contrary
notwithstanding, the Company may, at any time, for the purpose of obtaining a
satisfaction and discharge of this Indenture, or for any other reason, pay or
cause to be paid to the Trustee all sums held in trust by the Company or any
paying agent hereunder as required by this Section 6.04, such sums to be held by
the Trustee upon the trusts herein contained and upon such payment by the
Company or any paying agent to the Trustee, the Company or such paying agent
shall be released from all further liability with respect to such sums.
(d) Anything in this Section 6.04 to the contrary
notwithstanding, the agreement to hold sums in trust as provided in this Section
6.04 is subject to Sections 14.03 and 14.04.
The Trustee shall not be responsible for the actions of any other
paying agents (including the Company if acting as its own paying agent) and
shall have no control of any funds held by such other paying agents.
Section 6.05 Existence. Subject to Article 13, the Company will do or
cause to be done all things necessary to preserve and keep in full force and
effect its existence and rights (charter and statutory); provided that the
Company shall not be required to preserve any such right if the Company shall
determine that the preservation thereof is no longer desirable in the conduct of
the business of the Company and that the loss thereof is not disadvantageous in
any material respect to the Debentureholders.
Section 6.06 Maintenance of Properties. The Company will cause all
properties used or useful in the conduct of its business or the business of any
Significant Subsidiary to be maintained and kept in good condition, repair and
working order and supplied with all necessary equipment and will cause to be
made all necessary repairs, renewals, replacements, betterments and improvements
thereof, all as in the judgment of the Company may be necessary so that the
business carried on in connection therewith may be properly and advantageously
conducted at all times; provided that nothing in this Section shall prevent the
Company from discontinuing the operation or maintenance of any of such
properties if such discontinuance is, in the judgment of the Company, desirable
in the conduct of its business or the business of any subsidiary and not
disadvantageous in any material respect to the Debentureholders.
Section 6.07 Payment of Taxes and Other Claims. The Company will pay or
discharge, or cause to be paid or discharged, before the same may become
delinquent, (i) all taxes, assessments and governmental charges levied or
imposed upon the Company or any Significant Subsidiary or upon the income,
profits or property of the Company or any Significant Subsidiary, (ii) all
claims for labor, materials and supplies which, if unpaid, might by law become a
lien or charge upon the property of the Company or any Significant Subsidiary
and (iii) all stamp taxes and other duties, if any, which may be imposed by the
United States or any political subdivision thereof or therein in connection with
the issuance, transfer, exchange, conversion or redemption of any Debentures or
with respect to this Indenture; provided that, in the case of clauses (i) and
(ii), the Company shall not be required to pay or discharge or cause to be paid
or discharged any such tax, assessment, charge or claim (A) if the failure to do
so will not, in the aggregate, have a material adverse impact on the Company, or
(B) if the amount, applicability or validity is being contested in good faith by
appropriate proceedings.
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Section 6.08 Rule 144A Information Requirement. Within the period prior
to the expiration of the holding period applicable to sales thereof under Rule
144(k) under the Securities Act (or any successor provision), the Company
covenants and agrees that it shall, during any period in which it is not subject
to Section 13 or 15(d) under the Exchange Act, make available to any holder or
beneficial holder of Debentures or any Common Stock issued upon conversion
thereof which continue to be Restricted Securities in connection with any sale
thereof and any prospective purchaser of Debentures or such Common Stock
designated by such holder or beneficial holder, the information required
pursuant to Rule 144A(d)(4) under the Securities Act upon the request of any
holder or beneficial holder of the Debentures or such Common Stock and it will
take such further action as any holder or beneficial holder of such Debentures
or such Common Stock may reasonably request, all to the extent required from
time to time to enable such holder or beneficial holder to sell its Debentures
or Common Stock without registration under the Securities Act within the
limitation of the exemption provided by Rule 144A, as such Rule may be amended
from time to time. Upon the request of any holder or any beneficial holder of
the Debentures or such Common Stock, the Company will deliver to such holder a
written statement as to whether it has complied with such requirements.
Section 6.09 Stay, Extension and Usury Laws. The Company covenants (to
the extent that it may lawfully do so) that it shall not at any time insist
upon, plead, or in any manner whatsoever claim or take the benefit or advantage
of, any stay, extension or usury law or other law which would prohibit or
forgive the Company from paying all or any portion of the principal of, premium,
if any, or interest on the Debentures as contemplated herein, wherever enacted,
now or at any time hereafter in force, or which may affect the covenants or the
performance of this Indenture and the Company (to the extent it may lawfully do
so) hereby expressly waives all benefit or advantage of any such law, and
covenants that it will not, by resort to any such law, hinder, delay or impede
the execution of any power herein granted to the Trustee, but will suffer and
permit the execution of every such power as though no such law had been enacted.
Section 6.10 Compliance Certificate. The Company shall deliver to the
Trustee, within one hundred twenty (120) days after the end of each fiscal year
of the Company, a certificate signed by the principal executive officer,
principal financial officer or principal accounting officer of the Company,
stating whether or not to the best knowledge of the signer thereof the Company
is in default in the performance and observance of any of the terms, provisions
and conditions of this Indenture (without regard to any period of grace or
requirement of notice provided hereunder) and, if the Company shall be in
default, specifying all such defaults and the nature and the status thereof of
which the signer may have knowledge.
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The Company will deliver to the Trustee, forthwith upon becoming aware
of (i) any default in the performance or observance of any covenant, agreement
or condition contained in this Indenture, or (ii) any Event of Default, an
Officers' Certificate specifying with particularity such default or Event of
Default and further stating what action the Company has taken, is taking or
proposes to take with respect thereto.
Any notice required to be given under this Section 6.10 shall be
delivered to a Responsible Officer of the Trustee at its Corporate Trust Office.
Section 6.11 Liquidated Damages Notice. In the event that the Company
is required to pay Liquidated Damages to holders of Debentures pursuant to the
Registration Rights Agreement, the Company will provide written notice
("Liquidated Damages Notice") to the Trustee of its obligation to pay Liquidated
Damages no later than fifteen (15) days prior to the proposed payment date for
the Liquidated Damages, and the Liquidated Damages Notice shall set forth the
amount of Liquidated Damages to be paid by the Company on such payment date. The
Trustee shall not at any time be under any duty or responsibility to any holder
of Debentures to determine the Liquidated Damages, or with respect to the
nature, extent or calculation of the amount of Liquidated Damages when made, or
with respect to the method employed in such calculation of the Liquidated
Damages.
Section 6.12 Contingent Debt Tax Treatment. The Company agrees, and by
acceptance of a Debenture, each beneficial holder of a Debenture will be deemed
to have agreed to treat the Debentures as indebtedness of the Company for U.S.
federal income tax purposes that are subject to the regulations governing
contingent payment debt instruments. A Holder of Debentures may obtain the
amount of original issue discount, issue date, yield to maturity, comparable
yield and projected payment schedule for the Debentures, determined by the
Company pursuant to Treas. Reg. Sec. 1.1275-4, by submitting a written request
for it to the Company at the following address: Greatbatch, Inc., 9645 Wehrle
Drive, Clarence, NY 14031, Attention: Treasurer.
Section 6.13 Calculation of Original Issue Discount. The Company shall
file with the Trustee promptly at the end of each calendar year (i) a written
notice specifying the amount of Tax Original Issue Discount (including daily
rates and accrual periods) accrued on outstanding Debentures as of the end of
such year and (ii) such other specific information relating to such Tax Original
Issue Discount as may then be required under the Internal Revenue Code of 1986,
as amended from time to time, or the Treasury regulations promulgated
thereunder.
ARTICLE 7
DEBENTUREHOLDERS' LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE
Section 7.01 Debentureholders' Lists. The Company covenants and agrees
that it will furnish or cause to be furnished to the Trustee, semiannually, not
more than fifteen (15) days after each June 1 and December 1 in each year
beginning with June 1, 2007, and at such other times as the Trustee may request
in writing, within thirty (30) days after receipt by the Company of any such
request (or such lesser time as the Trustee may reasonably request in order to
enable it to timely provide any notice to be provided by it hereunder), a list
in such form as the Trustee may reasonably require of the names and addresses of
the holders of Debentures as of a date not more than fifteen (15) days (or such
other date as the Trustee may reasonably request in order to so provide any such
notices) prior to the time such information is furnished, except that no such
list need be furnished by the Company to the Trustee so long as the Trustee is
acting as the sole Debenture Registrar.
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Section 7.02 Preservation and Disclosure of Lists. (a) The Trustee
shall preserve, in as current a form as is reasonably practicable, all
information as to the names and addresses of the holders of Debentures contained
in the most recent list furnished to it as provided in Section 7.01 or
maintained by the Trustee in its capacity as Debenture Registrar or co-registrar
in respect of the Debentures, if so acting. The Trustee may destroy any list
furnished to it as provided in Section 7.01 upon receipt of a new list so
furnished.
(b) The rights of Debentureholders to communicate with other
holders of Debentures with respect to their rights under this Indenture or under
the Debentures, and the corresponding rights and duties of the Trustee, shall be
as provided by the Trust Indenture Act.
(c) Every Debentureholder, by receiving and holding the same,
agrees with the Company and the Trustee that neither the Company nor the Trustee
nor any agent of either of them shall be held accountable by reason of any
disclosure of information as to names and addresses of holders of Debentures
made pursuant to the Trust Indenture Act.
Section 7.03 Reports By Trustee. (a) Within sixty (60) days after
December 15 of each year commencing with the year 2007, the Trustee shall
transmit to holders of Debentures such reports dated as of December 15 of the
year in which such reports are made concerning the Trustee and its actions under
this Indenture as may be required pursuant to the Trust Indenture Act at the
times and in the manner provided pursuant thereto. In the event that no events
have occurred under the applicable sections of the Trust Indenture Act the
Trustee shall be under no duty or obligation to provide such reports.
(b) A copy of such report shall, at the time of such transmission
to holders of Debentures, be filed by the Trustee with each stock exchange and
automated quotation system upon which the Debentures are listed and with the
Company. The Company will promptly notify the Trustee in writing when the
Debentures are listed on any stock exchange or automated quotation system or
delisted therefrom.
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Section 7.04 Reports by Company. The Company shall file with the
Trustee (and the Commission if at any time after the Indenture becomes qualified
under the Trust Indenture Act), and transmit to holders of Debentures, such
information, documents and other reports and such summaries thereof, as may be
required pursuant to the Trust Indenture Act at the times and in the manner
provided pursuant to such Act, whether or not the Debentures are governed by
such Act; provided that any such information, documents or reports required to
be filed with the Commission pursuant to Section 13 or 15(d) of the Exchange Act
shall be filed with the Trustee within fifteen (15) days after the same is so
required to be filed with the Commission. Delivery of such reports, information
and documents to the Trustee is for informational purposes only and the
Trustee's receipt of such shall not constitute constructive notice of any
information contained therein or determinable from information contained
therein, including the Company's compliance with any of its covenants hereunder
(as to which the Trustee is entitled to rely exclusively on an Officers'
Certificates).
ARTICLE 8
REMEDIES OF THE TRUSTEE AND DEBENTUREHOLDERS ON AN EVENT OF DEFAULT
Section 8.01 Events of Default. In case one or more of the following
Events of Default (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body) shall have occurred and be
continuing:
(a) default in the payment of any installment of interest upon
any of the Debentures as and when the same shall become due and payable, and
continuance of such default for a period of thirty (30) days (whether or not
such payment is prohibited by the subordination provisions set forth in Article
4 of this Indenture); or
(b) default in the payment of the principal of or premium, if
any, on any of the Debentures as and when the same shall become due and payable
either at maturity or in connection with any redemption or otherwise, in each
case pursuant to Article 3, by acceleration or otherwise (whether or not such
payment is prohibited by the subordination provisions set forth in Article 4 of
this Indenture); or
(c) default in the Company's obligation to provide a Fundamental
Change Notice upon a Fundamental Change as provided in Section 3.05; or
(d) failure to deliver all cash and any shares of Common Stock
when such cash and Common Stock, if any, are required to be delivered upon
conversion of a Debenture (whether or not such payment is prohibited by the
subordination provisions set forth in Article 4 of this Indenture); or
(e) failure on the part of the Company duly to observe or perform
any other of the covenants or agreements on the part of the Company in the
Debentures or in this Indenture (other than a covenant or agreement a default in
whose performance or whose breach is elsewhere in this Section 8.01 specifically
dealt with) continued for a period of sixty (60) days after the date on which
written notice of such failure, requiring the Company to remedy the same, shall
have been given to the Company by the Trustee, or the Company and a Responsible
Officer of the Trustee by the holders of at least twenty-five percent (25%) in
aggregate principal amount of the Debentures at the time outstanding determined
in accordance with Section 10.04; provided, however, that the Company shall have
up to 120 days after receipt of a written notice hereunder (the "Extension
Period") to remedy, or receive a waiver for, any failure to comply with the
Company's obligation to file annual or quarterly reports in accordance with this
Indenture or to comply with the requirements of Section 314(a)(1) of the Trust
Indenture Act (a "Filing Failure") so long as the Company elects, within sixty
(60) days of the date of notice of such failure, to pay to the holders a fee
(the "Extension Fee") accruing at the rate of 1.00% per annum of the aggregate
principal amount of Debentures that are then outstanding, on the terms and in
the manner described below; or
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(f) the Company shall commence a voluntary case or other
proceeding seeking liquidation, reorganization or other relief with respect to
the Company or its debts under any bankruptcy, insolvency or other similar law
now or hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of the Company or any
substantial part of the property of the Company, or shall consent to any such
relief or to the appointment of or taking possession by any such official in an
involuntary case or other proceeding commenced against the Company, or shall
make a general assignment for the benefit of creditors, or shall fail generally
to pay its debts as they become due; or
(g) an involuntary case or other proceeding shall be commenced
against the Company seeking liquidation, reorganization or other relief with
respect to the Company or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of the Company or any
substantial part of the property of the Company, and such involuntary case or
other proceeding shall remain undismissed and unstayed for a period of sixty
(60) consecutive days; then, and in each and every such case (other than an
Event of Default specified in Section 8.01(f) or 8.01(g)), unless the principal
of all of the Debentures shall have already become due and payable, either the
Trustee or the holders of not less than twenty-five percent (25%) in aggregate
principal amount of the Debentures then outstanding hereunder determined in
accordance with Section 10.04, by notice in writing to the Company (and to the
Trustee if given by Debentureholders), may declare the principal of and premium,
if any, on all the Debentures and the interest accrued thereon to be due and
payable immediately, and upon any such declaration the same shall become and
shall be immediately due and payable, anything in this Indenture or in the
Debentures contained to the contrary notwithstanding. If an Event of Default
specified in Section 8.01(f) or 8.01(g) occurs, the principal of all the
Debentures and the interest accrued thereon shall be immediately and
automatically due and payable without necessity of further action. This
provision, however, is subject to the conditions that if, at any time after the
principal of the Debentures shall have been so declared due and payable, and
before any judgment or decree for the payment of the monies due shall have been
obtained or entered as hereinafter provided, the Company shall pay or shall
deposit with the Trustee a sum sufficient to pay all matured installments of
interest upon all Debentures and the principal of and premium, if any, on any
and all Debentures which shall have become due otherwise than by acceleration
(with interest on overdue installments of interest (to the extent that payment
of such interest is enforceable under applicable law) and on such principal and
premium, if any, at the rate borne by the Debentures, to the date of such
payment or deposit) and amounts due to the Trustee pursuant to Section 9.06, and
if any and all defaults under this Indenture, other than the nonpayment of
principal of and premium, if any, and accrued interest on Debentures which shall
have become due by acceleration, shall have been cured or waived pursuant to
Section 8.07, then and in every such case the holders of a majority in aggregate
principal amount of the Debentures then outstanding, by written notice to the
Company and to the Trustee, may waive all defaults or Events of Default and
rescind and annul such declaration and its consequences; but no such waiver or
rescission and annulment shall extend to or shall affect any subsequent default
or Event of Default, or shall impair any right consequent thereon. The Company
shall notify in writing a Responsible Officer of the Trustee, promptly upon
becoming aware thereof, of any Event of Default.
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Any Extension Fee shall be paid on the same times and in the same
manner as interest shall be paid in accordance with this Indenture. The
Extension Fee shall accrue on the Debentures from the date that is sixty (60)
days after date notice is given by the Trustee or the holders in accordance with
this Section 8.01 to, but excluding, the earlier of (i) the date on which the
Company has made the filings initially giving rise to the Filing Failure and
(ii) the date that is one hundred twenty (120) days after the date notice is
given by the Trustee or the holders in accordance with Section 8.01.
Notwithstanding the foregoing, if an additional Filing Failure occurs during an
Extension Period, the Debentures will only be subject to acceleration for such
additional Filing Failure at the earlier of (x) the end of the Extension Period
and (y) in the event that the Company has agreed to pay an additional Extension
Fee in accordance with the terms of this Section 8.01 as to such additional
Filing Failure, the end of the additional Extension Period as to such additional
Filing Failure. For the avoidance of doubt, notwithstanding the occurrence of
multiple concurrent Filing Failures, the Extension Fee shall not exceed the rate
provided for in this paragraph.
In case the Trustee shall have proceeded to enforce any right under
this Indenture and such proceedings shall have been discontinued or abandoned
because of such waiver or rescission and annulment or for any other reason or
shall have been determined adversely to the Trustee, then and in every such case
the Company, the holders of Debentures, and the Trustee shall be restored
respectively to their several positions and rights hereunder, and all rights,
remedies and powers of the Company, the holders of Debentures, and the Trustee
shall continue as though no such proceeding had been taken.
Section 8.02 Payments of Debentures on Default; Suit Therefor. The
Company covenants that in case default shall be made in the payment of any
installment of interest upon any of the Debentures as and when the same shall
become due and payable, and such default shall have continued for a period of
thirty (30) days, or in case default shall be made in the payment of the
principal of or premium, if any, on any of the Debentures as and when the same
shall have become due and payable, whether at maturity of the Debentures or in
connection with any redemption, by or under this Indenture declaration or
otherwise, then, upon demand of the Trustee, the Company will pay to the
Trustee, for the benefit of the holders of the Debentures, the whole amount that
then shall have become due and payable on all such Debentures for principal and
premium, if any, or interest, as the case may be, with interest upon the overdue
principal and premium, if any, and (to the extent that payment of such interest
is enforceable under applicable law) upon the overdue installments of interest
at the rate borne by the Debentures, plus 1% and, in addition thereto, such
further amount as shall be sufficient to cover the costs and expenses of
collection, including reasonable compensation to the Trustee, its agents,
attorneys and counsel, and all other amounts due the Trustee under Section 9.06.
Until such demand by the Trustee, the Company may pay the principal of and
premium, if any, and interest on the Debentures to the registered holders,
whether or not the Debentures are overdue.
44
In case the Company shall fail forthwith to pay such amounts upon such
demand, the Trustee, in its own name and as trustee of an express trust, shall
be entitled and empowered to institute any actions or proceedings at law or in
equity for the collection of the sums so due and unpaid, and may prosecute any
such action or proceeding to judgment or final decree, and may enforce any such
judgment or final decree against the Company or any other obligor on the
Debentures and collect in the manner provided by law out of the property of the
Company or any other obligor on the Debentures wherever situated the monies
adjudged or decreed to be payable.
In case there shall be pending proceedings for the bankruptcy or for
the reorganization of the Company or any other obligor on the Debentures under
Title 11 of the United States Code, or any other applicable law, or in case a
receiver, assignee or trustee in bankruptcy or reorganization, liquidator,
sequestrator or similar official shall have been appointed for or taken
possession of the Company or such other obligor, the property of the Company or
such other obligor, or in the case of any other judicial proceedings relative to
the Company or such other obligor upon the Debentures, or to the creditors or
property of the Company or such other obligor, the Trustee, irrespective of
whether the principal of the Debentures shall then be due and payable as therein
expressed or by declaration or otherwise and irrespective of whether the Trustee
shall have made any demand pursuant to the provisions of this Section 8.02,
shall be entitled and empowered, by intervention in such proceedings or
otherwise, to file and prove a claim or claims for the whole amount of
principal, premium, if any, and interest owing and unpaid in respect of the
Debentures, and, in case of any judicial proceedings, to file such proofs of
claim and other papers or documents as may be necessary or advisable in order to
have the claims of the Trustee and of the Debentureholders allowed in such
judicial proceedings relative to the Company or any other obligor on the
Debentures, its or their creditors, or its or their property, and to collect and
receive any monies or other property payable or deliverable on any such claims,
and to distribute the same after the deduction of any amounts due the Trustee
under Section 9.06, and to take any other action with respect to such claims,
including participating as a member of any official committee of creditors, as
it reasonably deems necessary or advisable, and, unless prohibited by law or
applicable regulations, and any receiver, assignee or trustee in bankruptcy or
reorganization, liquidator, custodian or similar official is hereby authorized
by each of the Debentureholders to make such payments to the Trustee, and, in
the event that the Trustee shall consent to the making of such payments directly
to the Debentureholders, to pay to the Trustee any amount due it for reasonable
compensation, expenses, advances and disbursements, including counsel fees and
expenses incurred by it up to the date of such distribution. To the extent that
such payment of reasonable compensation, expenses, advances and disbursements
out of the estate in any such proceedings shall be denied for any reason,
payment of the same shall be secured by a lien on, and shall be paid out of, any
and all distributions, dividends, monies, securities and other property which
the holders of the Debentures may be entitled to receive in such proceedings,
whether in liquidation or under any plan of reorganization or arrangement or
otherwise.
All rights of action and of asserting claims under this Indenture, or
under any of the Debentures, may be enforced by the Trustee without the
possession of any of the Debentures, or the production thereof at any trial or
other proceeding relative thereto, and any such suit or proceeding instituted by
the Trustee shall be brought in its own name as trustee of an express trust, and
any recovery of judgment shall, after provision for the payment of the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel, be for the ratable benefit of the holders of the
Debentures.
45
In any proceedings brought by the Trustee (and in any proceedings
involving the interpretation of any provision of this Indenture to which the
Trustee shall be a party) the Trustee shall be held to represent all the holders
of the Debentures, and it shall not be necessary to make any holders of the
Debentures parties to any such proceedings.
Section 8.03 Application of Monies Collected By Trustee. Any monies
collected by the Trustee pursuant to this Article 8 shall be applied in the
order following, at the date or dates fixed by the Trustee for the distribution
of such monies, upon presentation of the several Debentures, and stamping
thereon the payment, if only partially paid, and upon surrender thereof, if
fully paid:
FIRST: To the payment of all amounts due the Trustee under Section
9.06;
SECOND: In case the principal of the outstanding Debentures shall not
have become due and be unpaid, to the payment of interest on the Debentures in
default in the order of the maturity of the installments of such interest, with
interest (to the extent that such interest has been collected by the Trustee)
upon the overdue installments of interest at the rate borne by the Debentures,
such payments to be made ratably to the Persons entitled thereto;
THIRD: In case the principal of the outstanding Debentures shall have
become due, by declaration or otherwise, and be unpaid to the payment of the
whole amount then owing and unpaid upon the Debentures for principal and
premium, if any, and interest, with interest on the overdue principal and
premium, if any, and (to the extent that such interest has been collected by the
Trustee) upon overdue installments of interest at the rate borne by the
Debentures, and in case such monies shall be insufficient to pay in full the
whole amounts so due and unpaid upon the Debentures, then to the payment of such
principal and premium, if any, and interest without preference or priority of
principal and premium, if any, over interest, or of interest over principal and
premium, if any, or of any installment of interest over any other installment of
interest, or of any Debenture over any other Debenture, ratably to the aggregate
of such principal and premium, if any, and accrued and unpaid interest; and
FOURTH: To the payment of the remainder, if any, to the Company or any
other Person lawfully entitled thereto.
Section 8.04 Proceedings by Debentureholder. No holder of any Debenture
shall have any right by virtue of or by reference to any provision of this
Indenture to institute any suit, action or proceeding in equity or at law upon
or under or with respect to this Indenture, or for the appointment of a
receiver, trustee, liquidator, custodian or other similar official, or for any
other remedy hereunder, unless such holder previously shall have given to the
Trustee written notice of an Event of Default and of the continuance thereof, as
hereinbefore provided, and unless also the holders of not less than twenty-five
percent (25%) in aggregate principal amount of the Debentures then outstanding
shall have made written request upon the Trustee to institute such action, suit
or proceeding in its own name as Trustee hereunder and shall have offered to the
Trustee such reasonable security or indemnity as it may require against the
costs, expenses and liabilities to be incurred therein or thereby, and the
Trustee for sixty (60) days after its receipt of such notice, request and offer
of indemnity, shall have neglected or refused to institute any such action, suit
or proceeding and no direction inconsistent with such written request shall have
been given to the Trustee pursuant to Section 8.07; it being understood and
intended, and being expressly covenanted by the taker and holder of every
Debenture with every other taker and holder and the Trustee, that no one or more
holders of Debentures shall have any right in any manner whatever by virtue of
or by reference to any provision of this Indenture to affect, disturb or
prejudice the rights of any other holder of Debentures, or to obtain or seek to
obtain priority over or preference to any other such holder, or to enforce any
right under this Indenture, except in the manner herein provided and for the
equal, ratable and common benefit of all holders of Debentures (except as
otherwise provided herein). For the protection and enforcement of this Section
8.04, each and every Debentureholder and the Trustee shall be entitled to such
relief as can be given either at law or in equity.
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Notwithstanding any other provision of this Indenture and any provision
of any Debenture, the right of any holder of any Debenture to receive payment of
the principal of and premium, if any (including the redemption price upon
redemption pursuant to Article 8), and accrued interest on such Debenture, on or
after the respective due dates expressed in such Debenture or in the event of
redemption, or to institute suit for the enforcement of any such payment on or
after such respective dates against the Company shall not be impaired or
affected without the consent of such holder.
Anything in this Indenture or the Debentures to the contrary
notwithstanding, the holder of any Debenture, without the consent of either the
Trustee or the holder of any other Debenture, in its own behalf and for its own
benefit, may enforce, and may institute and maintain any proceeding suitable to
enforce, its rights of conversion as provided herein.
Section 8.05 Proceedings by Trustee. In case of an Event of Default,
the Trustee may, in its discretion, proceed to protect and enforce the rights
vested in it by this Indenture by such appropriate judicial proceedings as are
necessary to protect and enforce any of such rights, either by suit in equity or
by action at law or by proceeding in bankruptcy or otherwise, whether for the
specific enforcement of any covenant or agreement contained in this Indenture or
in aid of the exercise of any power granted in this Indenture, or to enforce any
other legal or equitable right vested in the Trustee by this Indenture or by
law.
Section 8.06 Remedies Cumulative and Continuing. Except as provided in
Section 2.06, all powers and remedies given by this Article 8 to the Trustee or
to the Debentureholders shall, to the extent permitted by law, be deemed
cumulative and not exclusive of any thereof or of any other powers and remedies
available to the Trustee or the holders of the Debentures, by judicial
proceedings or otherwise, to enforce the performance or observance of the
covenants and agreements contained in this Indenture, and no delay or omission
of the Trustee or of any holder of any of the Debentures to exercise any right
or power accruing upon any default or Event of Default occurring and continuing
as aforesaid shall impair any such right or power, or shall be construed to be a
waiver of any such default or any acquiescence therein, and, subject to the
provisions of Section 8.04, every power and remedy given by this Article 8 or by
law to the Trustee or to the Debentureholders may be exercised from time to
time, and as often as shall be deemed expedient, by the Trustee or by the
Debentureholders.
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Section 8.07 Direction of Proceedings and Waiver of Defaults by
Majority of Debentureholders. The holders of a majority in aggregate principal
amount of the Debentures at the time outstanding determined in accordance with
Section 10.04 shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or exercising
any trust or power conferred on the Trustee; provided that (a) such direction
shall not be in conflict with any rule of law or with this Indenture, (b) the
Trustee may take any other action which is not inconsistent with such direction,
(c) the Trustee may decline to take any action that would benefit some
Debentureholder to the detriment of other Debentureholders and (d) the Trustee
may decline to take any action that would involve the Trustee in personal
liability. The holders of a majority in aggregate principal amount of the
Debentures at the time outstanding determined in accordance with Section 10.04
may, on behalf of the holders of all of the Debentures, waive any past default
or Event of Default hereunder and its consequences except (i) a default in the
payment of interest or premium, if any, on, or the principal of, the Debentures,
(ii) a failure by the Company to convert any Debentures into Common Stock, (iii)
a default in the payment of the redemption price pursuant to Article 3 or (iv) a
default in respect of a covenant or provisions hereof which under Article 12
cannot be modified or amended without the consent of the holders of each or all
Debentures then outstanding or affected thereby. Upon any such waiver, the
Company, the Trustee and the holders of the Debentures shall be restored to
their former positions and rights hereunder; but no such waiver shall extend to
any subsequent or other default or Event of Default or impair any right
consequent thereon. Whenever any default or Event of Default hereunder shall
have been waived as permitted by this Section 8.07, said default or Event of
Default shall for all purposes of the Debentures and this Indenture be deemed to
have been cured and to be not continuing; but no such waiver shall extend to any
subsequent or other default or Event of Default or impair any right consequent
thereon.
Section 8.08 Notice of Defaults. The Trustee shall, within ninety (90)
days after a Responsible Officer of the Trustee has knowledge of the occurrence
of a default, mail to all Debentureholders, as the names and addresses of such
holders appear upon the Debenture Register, notice of all defaults known to a
Responsible Officer, unless such defaults shall have been cured or waived before
the giving of such notice; provided that except in the case of default in the
payment of the principal of, or premium, if any, or interest on any of the
Debentures, the Trustee shall be protected in withholding such notice if and so
long as a trust committee of directors and/or Responsible Officers of the
Trustee in good faith determines that the withholding of such notice is in the
interests of the Debentureholders.
Section 8.09 Undertaking to Pay Costs. All parties to this Indenture
agree, and each holder of any Debenture by his acceptance thereof shall be
deemed to have agreed, that any court may, in its discretion, require, in any
suit for the enforcement of any right or remedy under this Indenture, or in any
suit against the Trustee for any action taken or omitted by it as Trustee, the
filing by any party litigant in such suit of an undertaking to pay the costs of
such suit and that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees and expenses, against any party litigant in
such suit, having due regard to the merits and good faith of the claims or
defenses made by such party litigant; provided that the provisions of this
Section 8.09 (to the extent permitted by law) shall not apply to any suit
instituted by the Trustee, to any suit instituted by any Debentureholder, or
group of Debentureholders, holding in the aggregate more than ten percent in
principal amount of the Debentures at the time outstanding determined in
accordance with Section 10.04, or to any suit instituted by any Debentureholder
for the enforcement of the payment of the principal of or premium, if any, or
interest on any Debenture on or after the due date expressed in such Debenture
or to any suit for the enforcement of the right to convert any Debenture in
accordance with the provisions of Article 16.
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ARTICLE 9
THE TRUSTEE
Section 9.01 Duties and Responsibilities of Trustee. The Trustee, prior
to the occurrence of an Event of Default and after the curing of all Events of
Default which may have occurred, undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture. In case an Event of
Default has occurred (which has not been cured or waived), the Trustee shall
exercise such of the rights and powers vested in it by this Indenture, and use
the same degree of care and skill in their exercise, as a prudent person would
exercise or use under the circumstances in the conduct of his own affairs.
No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own willful misconduct, except that:
(a) prior to the occurrence of an Event of Default and after the
curing or waiving of all Events of Default which may have occurred:
(i) the duties and obligations of the Trustee shall be
determined solely by the express provisions of this Indenture and the Trust
Indenture Act, and the Trustee shall not be liable except for the performance of
such duties and obligations as are specifically set forth in this Indenture and
no implied covenants or obligations shall be read into this Indenture and the
Trust Indenture Act against the Trustee; and
(ii) in the absence of bad faith and willful misconduct on
the part of the Trustee, the Trustee may conclusively rely as to the truth of
the statements and the correctness of the opinions expressed therein, upon any
certificates or opinions furnished to the Trustee and conforming to the
requirements of this Indenture; but, in the case of any such certificates or
opinions which by any provisions hereof are specifically required to be
furnished to the Trustee, the Trustee shall be under a duty to examine the same
to determine whether or not they conform to the requirements of this Indenture;
(b) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer or Officers of the Trustee, unless
the Trustee was negligent in ascertaining the pertinent facts;
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(c) the Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with the written
direction of the holders of not less than a majority in principal amount of the
Debentures at the time outstanding determined as provided in Section 10.04
relating to the time, method and place of conducting any proceeding for any
remedy available to the Trustee, or exercising any trust or power conferred upon
the Trustee, under this Indenture;
(d) whether or not therein provided, every provision of this
Indenture relating to the conduct or affecting the liability of, or affording
protection to, the Trustee shall be subject to the provisions of this Section;
(e) the Trustee shall not be liable in respect of any payment (as
to the correctness of amount, entitlement to receive or any other matters
relating to payment) or notice effected by the Company or any paying agent or
any records maintained by any co-registrar with respect to the Debentures;
(f) if any party fails to deliver a notice relating to an event
the fact of which, pursuant to this Indenture, requires notice to be sent to the
Trustee, the Trustee may conclusively rely on its failure to receive such notice
as reason to act as if no such event occurred; and
(g) the Trustee shall not be deemed to have knowledge of any
Event of Default hereunder unless it shall have been notified in writing of such
Event of Default by the Company or the holders of at least 10% in aggregate
principal amount of the Debentures.
None of the provisions contained in this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur personal financial
liability in the performance of any of its duties or in the exercise of any of
its rights or powers, if there is reasonable ground for believing that the
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.
Section 9.02 Reliance on Documents, Opinions, Etc. Except as otherwise
provided in Section 9.01:
(a) the Trustee may conclusively rely and shall be protected in
acting upon any resolution, certificate, statement, instrument, opinion, report,
notice, request, consent, order, bond, debenture, note, coupon or other paper or
document (whether in its original or facsimile form) believed by it in good
faith to be genuine and to have been signed or presented by the proper party or
parties;
(b) any request, direction, order or demand of the Company
mentioned herein shall be sufficiently evidenced by an Officers' Certificate
(unless other evidence in respect thereof be herein specifically prescribed);
and any resolution of the Board of Directors may be evidenced to the Trustee by
a copy thereof certified by the Secretary or an Assistant Secretary of the
Company;
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(c) the Trustee may consult with counsel of its own selection and
any advice or Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken or omitted by it hereunder in good
faith and in accordance with such advice or Opinion of Counsel;
(d) the Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Indenture at the request, order or
direction of any of the Debentureholders pursuant to the provisions of this
Indenture, unless such Debentureholders shall have offered to the Trustee
reasonable security or indemnity satisfactory to it against the costs, expenses
and liabilities which may be incurred therein or thereby;
(e) the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture or other paper or document, but the Trustee may make such further
inquiry or investigation into such facts or matters as it may see fit, and, if
the Trustee shall determine to make such further inquiry or investigation, it
shall be entitled to examine the books, records and premises of the Company,
personally or by agent or attorney; and
(f) the Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed by it with due care
hereunder.
(g) the Trustee shall not be liable for any action taken,
suffered or omitted to be taken by it in good faith and reasonably believed by
it to be authorized or within the discretion or rights or powers conferred upon
it by this Indenture;
(h) the rights, privileges, protections, immunities and benefits
given to the Trustee, including, without limitation, its right to be
indemnified, are extended to, and shall be enforceable by, the Trustee in each
of its capacities hereunder, and each agent, custodian and other Person employed
to act hereunder;
(i) the Trustee may request that the Company deliver an Officers'
Certificate setting forth the names of individuals and/or titles of officers
authorized at such time to take specified actions pursuant to this Indenture,
which Officers' Certificate may be signed by any person authorized to sign an
Officers' Certificate, including any person specified as so authorized in any
such certificate previously delivered and not superseded; and
(j) Any permissive right or authority granted to the Trustee
shall not be construed as a mandatory duty.
Section 9.03 No Responsibility for Recitals, Etc. The recitals
contained herein and in the Debentures (except in the Trustee's certificate of
authentication) shall be taken as the statements of the Company, and the Trustee
assumes no responsibility for the correctness of the same. The Trustee makes no
representations as to the validity or sufficiency of this Indenture or of the
Debentures. The Trustee shall not be accountable for the use or application by
the Company of any Debentures or the proceeds of any Debentures authenticated
and delivered by the Trustee in conformity with the provisions of this
Indenture.
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Section 9.04 Trustee, Paying Agents, Conversion Agents or Registrar May
Own Debentures. The Trustee, any paying agent, any conversion agent or Debenture
Registrar, in its individual or any other capacity, may become the owner or
pledgee of Debentures with the same rights it would have if it were not Trustee,
paying agent, conversion agent or Debenture Registrar.
Section 9.05 Monies to Be Held in Trust. Subject to the provisions of
Section 14.04, all monies received by the Trustee shall, until used or applied
as herein provided, be held in trust for the purposes for which they were
received. Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall be
under no liability for interest on any money received by it hereunder except as
may be agreed in writing from time to time by the Company and the Trustee.
Section 9.06 Compensation and Expenses of Trustee. The Company
covenants and agrees to pay to the Trustee from time to time, and the Trustee
shall be entitled to, such compensation for all services rendered by it
hereunder in any capacity (which shall not be limited by any provision of law in
regard to the compensation of a trustee of an express trust) as mutually agreed
to from time to time in writing between the Company and the Trustee, and the
Company will pay or reimburse the Trustee upon its request for all reasonable
expenses, disbursements and advances reasonably incurred or made by the Trustee
in accordance with any of the provisions of this Indenture (including the
reasonable compensation and the expenses and disbursements of its counsel and of
all Persons not regularly in its employ) except any such expense, disbursement
or advance as may arise from its negligence, willful misconduct, recklessness or
bad faith. The Company also covenants to indemnify the Trustee and any
predecessor Trustee (or any officer, director or employee of the Trustee), in
any capacity under this Indenture and its agents and any authenticating agent
for, and to hold them harmless against, any and all loss, liability, damage,
claim or expense including taxes (other than taxes based on the income of the
Trustee) incurred without negligence, willful misconduct, recklessness or bad
faith on the part of the Trustee or such officers, directors, employees and
agent or authenticating agent, as the case may be, and arising out of or in
connection with the acceptance or administration of this trust or in any other
capacity hereunder, including the costs and expenses of defending themselves
against any claim (whether asserted by the Company, any holder or any other
Person) of liability in the premises. The obligations of the Company under this
Section 9.06 to compensate or indemnify the Trustee and to pay or reimburse the
Trustee for expenses, disbursements and advances shall be secured by a lien
prior to that of the Debentures upon all property and funds held or collected by
the Trustee as such, except funds held in trust for the benefit of the holders
of particular Debentures. The obligation of the Company under this Section shall
survive the satisfaction and discharge of this Indenture.
52
When the Trustee and its agents and any authenticating agent incur
expenses or render services after an Event of Default specified in Section
8.01(d) or (e) with respect to the Company occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any bankruptcy, insolvency or similar laws.
Section 9.07 Officers' Certificate as Evidence. Except as otherwise
provided in Section 9.01, whenever in the administration of the provisions of
this Indenture the Trustee shall deem it necessary or desirable that a matter be
proved or established prior to taking or omitting any action hereunder, such
matter (unless other evidence in respect thereof be herein specifically
prescribed) may, in the absence of bad faith or willful misconduct on the part
of the Trustee, be deemed to be conclusively proved and established by an
Officers' Certificate delivered to the Trustee.
Section 9.08 Conflicting Interests of Trustee. If the Trustee has or
shall acquire a conflicting interest within the meaning of the Trust Indenture
Act, the Trustee shall either eliminate such interest or resign, to the extent
and in the manner provided by, and subject to the provisions of, the Trust
Indenture Act and this Indenture.
Section 9.09 Eligibility of Trustee. There shall at all times be a
Trustee hereunder which shall be a Person that is eligible pursuant to the Trust
Indenture Act to act as such and has a combined capital and surplus of at least
$50,000,000 (or if such Person is a member of a bank holding company system, its
bank holding company shall have a combined capital and surplus of at least
$50,000,000). If such Person publishes reports of condition at least annually,
pursuant to law or to the requirements of any supervising or examining
authority, then for the purposes of this Section the combined capital and
surplus of such Person shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time
the Trustee shall cease to be eligible in accordance with the provisions of this
Section 9.09, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article.
Section 9.10 Resignation or Removal of Trustee. (a) The Trustee may at
any time resign by giving written notice of such resignation to the Company and
to the holders of Debentures. Upon receiving such notice of resignation, the
Company shall promptly appoint a successor trustee by written instrument, in
duplicate, executed by order of the Board of Directors, one copy of which
instrument shall be delivered to the resigning Trustee and one copy to the
successor trustee. If no successor trustee shall have been so appointed and have
accepted appointment sixty (60) days after the mailing of such notice of
resignation to the Debentureholders, the resigning Trustee may, upon ten (10)
Business Days' notice to the Company and the Debentureholders, appoint a
successor identified in such notice or may petition, at the expense of the
Company, any court of competent jurisdiction for the appointment of a successor
trustee, or, if any Debentureholder who has been a bona fide holder of a
Debenture or Debentures for at least six (6) months may, subject to the
provisions of Section 8.09, on behalf of himself and all others similarly
situated, petition any such court for the appointment of a successor trustee.
Such court may thereupon, after such notice, if any, as it may deem proper and
prescribe, appoint a successor trustee.
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(b) In case at any time any of the following shall occur:
(i) the Trustee shall fail to comply with Section 9.08 after
written request therefor by the Company or by any Debentureholder who has been a
bona fide holder of a Debenture or Debentures for at least six (6) months; or
(ii) the Trustee shall cease to be eligible in accordance
with the provisions of Section 9.09 and shall fail to resign after written
request therefor by the Company or by any such Debentureholder; or
(iii) the Trustee shall become incapable of acting, or shall
be adjudged a bankrupt or insolvent, or a receiver of the Trustee or of its
property shall be appointed, or any public officer shall take charge or control
of the Trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation; then, in any such case, the Company may remove the
Trustee and appoint a successor trustee by written instrument, in duplicate,
executed by order of the Board of Directors, one copy of which instrument shall
be delivered to the Trustee so removed and one copy to the successor trustee,
or, subject to the provisions of Section 8.09, any Debentureholder who has been
a bona fide holder of a Debenture or Debentures for at least six (6) months may,
on behalf of himself and all others similarly situated, petition any court of
competent jurisdiction for the removal of the Trustee and the appointment of a
successor trustee; provided that if no successor Trustee shall have been
appointed and have accepted appointment sixty (60) days after either the Company
or the Debentureholders has removed the Trustee, or the Trustee resigns, the
Trustee so removed may petition, at the expense of the Company, any court of
competent jurisdiction for an appointment of a successor trustee. Such court may
thereupon, after such notice, if any, as it may deem proper and prescribe,
remove the Trustee and appoint a successor trustee.
(c) The holders of a majority in aggregate principal amount of
the Debentures at the time outstanding may at any time remove the Trustee and
nominate a successor trustee which shall be deemed appointed as successor
trustee unless, within ten (10) days after notice to the Company of such
nomination, the Company objects thereto, in which case the Trustee so removed or
any Debentureholder, or if such Trustee so removed or any Debentureholder fails
to act, the Company, upon the terms and conditions and otherwise as in Section
9.10(a) provided, may petition any court of competent jurisdiction for an
appointment of a successor trustee.
(d) Any resignation or removal of the Trustee and appointment of
a successor trustee pursuant to any of the provisions of this Section 9.10 shall
become effective upon acceptance of appointment by the successor trustee as
provided in Section 9.11.
(e) Notwithstanding the replacement of the Trustee pursuant to
this Section, the Company's obligations under Section 9.06 shall continue for
the benefit of the retiring Trustee.
Section 9.11 Acceptance by Successor Trustee. Any successor trustee
appointed as provided in Section 9.10 shall execute, acknowledge and deliver to
the Company and to its predecessor trustee an instrument accepting such
appointment hereunder, and thereupon the resignation or removal of the
predecessor trustee shall become effective and such successor trustee, without
any further act, deed or conveyance, shall become vested with all the rights,
powers, duties and obligations of its predecessor hereunder, with like effect as
if originally named as trustee herein; but, nevertheless, on the written request
of the Company or of the successor trustee, the trustee ceasing to act shall,
upon payment of any amount then due it pursuant to the provisions of Section
9.06, execute and deliver an instrument transferring to such successor trustee
all the rights and powers of the trustee so ceasing to act. Upon request of any
such successor trustee, the Company shall execute any and all instruments in
writing for more fully and certainly vesting in and confirming to such successor
trustee all such rights and powers. Any trustee ceasing to act shall,
nevertheless, retain a lien upon all property and funds held or collected by
such trustee as such, except for funds held in trust for the benefit of holders
of particular Debentures, to secure any amounts then due it pursuant to the
provisions of Section 9.06.
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No successor trustee shall accept appointment as provided in this
Section 9.11 unless, at the time of such acceptance, such successor trustee
shall be qualified under the provisions of Section 9.08 and be eligible under
the provisions of Section 9.09.
Upon acceptance of appointment by a successor trustee as provided in
this Section 9.11, the Company (or the former trustee, at the written direction
of the Company) shall mail or cause to be mailed notice of the succession of
such trustee hereunder to the holders of Debentures at their addresses as they
shall appear on the Debenture Register. If the Company fails to mail such notice
within ten (10) days after acceptance of appointment by the successor trustee,
the successor trustee shall cause such notice to be mailed at the expense of the
Company.
Section 9.12 Succession by Merger. Any corporation into which the
Trustee may be merged or converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or consolidation to which the
Trustee shall be a party, or any corporation succeeding to all or substantially
all of the corporate trust business of the Trustee (including any trust created
by this Indenture), shall be the successor to the Trustee hereunder without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, provided that in the case of any corporation succeeding to all
or substantially all of the corporate trust business of the Trustee, such
corporation shall be qualified under the provisions of Section 9.08 and eligible
under the provisions of Section 9.09.
In case at the time such successor to the Trustee shall succeed to the
trusts created by this Indenture, any of the Debentures shall have been
authenticated but not delivered, any such successor to the Trustee may adopt the
certificate of authentication of any predecessor trustee or authenticating agent
appointed by such predecessor trustee, and deliver such Debentures so
authenticated; and in case at that time any of the Debentures shall not have
been authenticated, any successor to the Trustee or any authenticating agent
appointed by such successor trustee may authenticate such Debentures in the name
of the successor trustee; and in all such cases such certificates shall have the
full force that is provided in the Debentures or in this Indenture; provided
that the right to adopt the certificate of authentication of any predecessor
Trustee or authenticate Debentures in the name of any predecessor Trustee shall
apply only to its successor or successors by merger, conversion or
consolidation.
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Section 9.13 Preferential Collection of Claims. If and when the Trustee
shall be or become a creditor of the Company (or any other obligor upon the
Debentures), the Trustee shall be subject to the provisions of the Trust
Indenture Act regarding the collection of the claims against the Company (or any
such other obligor).
ARTICLE 10
THE DEBENTUREHOLDERS
Section 10.01 Action by Debentureholders. Whenever in this Indenture it
is provided that the holders of a specified percentage in aggregate principal
amount of the Debentures may take any action (including the making of any demand
or request, the giving of any notice, consent or waiver or the taking of any
other action), the fact that at the time of taking any such action, the holders
of such specified percentage have joined therein may be evidenced (a) by any
instrument or any number of instruments of similar tenor executed by
Debentureholders in person or by agent or proxy appointed in writing, or (b) by
the record of the holders of Debentures voting in favor thereof at any meeting
of Debentureholders duly called and held in accordance with the provisions of
Article 11, or (c) by a combination of such instrument or instruments and any
such record of such a meeting of Debentureholders. Whenever the Company or the
Trustee solicits the taking of any action by the holders of the Debentures, the
Company or the Trustee may fix in advance of such solicitation, a date as the
record date for determining holders entitled to take such action. The record
date shall be not more than fifteen (15) days prior to the date of commencement
of solicitation of such action.
Section 10.02 Proof of Execution by Debentureholders. Subject to the
provisions of Sections 9.01, 9.02 and 11.05, proof of the execution of any
instrument by a Debentureholder or its agent or proxy shall be sufficient if
made in accordance with such reasonable rules and regulations as may be
prescribed by the Trustee or in such manner as shall be satisfactory to the
Trustee. The holding of Debentures shall be proved by the registry of such
Debentures or by a certificate of the Debenture Registrar.
The record of any Debentureholders' meeting shall be proved in the
manner provided in Section 11.06.
Section 10.03 Who are Deemed Absolute Owners. The Company, the Trustee,
any paying agent, any conversion agent and any Debenture Registrar may deem the
Person in whose name such Debenture shall be registered upon the Debenture
Register to be, and may treat it as, the absolute owner of such Debenture
(whether or not such Debenture shall be overdue and notwithstanding any notation
of ownership or other writing thereon made by any Person other than the Company
or any Debenture Registrar) for the purpose of receiving payment of or on
account of the principal of, premium, if any, and interest on such Debenture,
for conversion of such Debenture and for all other purposes; and neither the
Company nor the Trustee nor any paying agent nor any conversion agent nor any
Debenture Registrar shall be affected by any notice to the contrary. All such
payments so made to any holder for the time being, or upon his order, shall be
valid, and, to the extent of the sum or sums so paid, effectual to satisfy and
discharge the liability for monies payable upon any such Debenture.
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Section 10.04 Company-owned Debentures Disregarded. In determining
whether the holders of the requisite aggregate principal amount of Debentures
have concurred in any direction, consent, waiver or other action under this
Indenture, Debentures which are owned by the Company or any other obligor on the
Debentures or any Affiliate of the Company or any other obligor on the
Debentures shall be disregarded and deemed not to be outstanding for the purpose
of any such determination; provided that for the purposes of determining whether
the Trustee shall be protected in relying on any such direction, consent, waiver
or other action, only Debentures which a Responsible Officer knows are so owned
shall be so disregarded. Debentures so owned which have been pledged in good
faith may be regarded as outstanding for the purposes of this Section 10.04 if
the pledgee shall establish to the satisfaction of the Trustee the pledgee's
right to vote such Debentures and that the pledgee is not the Company, any other
obligor on the Debentures or any Affiliate of the Company or any such other
obligor. In the case of a dispute as to such right, any decision by the Trustee
taken upon the advice of counsel shall be full protection to the Trustee. Upon
request of the Trustee, the Company shall furnish to the Trustee promptly an
Officers' Certificate listing and identifying all Debentures, if any, known by
the Company to be owned or held by or for the account of any of the above
described Persons, and, subject to Section 9.01, the Trustee shall be entitled
to accept such Officers' Certificate as conclusive evidence of the facts therein
set forth and of the fact that all Debentures not listed therein are outstanding
for the purpose of any such determination.
Section 10.05 Revocation of Consents, Future Holders Bound. At any time
prior to (but not after) the evidencing to the Trustee, as provided in Section
10.01, of the taking of any action by the holders of the percentage in aggregate
principal amount of the Debentures specified in this Indenture in connection
with such action, any holder of a Debenture which is shown by the evidence to be
included in the Debentures the holders of which have consented to such action
may, by filing written notice with the Trustee at its Corporate Trust Office and
upon proof of holding as provided in Section 10.02, revoke such action so far as
concerns such Debenture. Except as aforesaid, any such action taken by the
holder of any Debenture shall be conclusive and binding upon such holder and
upon all future holders and owners of such Debenture and of any Debentures
issued in exchange or substitution therefor, irrespective of whether any
notation in regard thereto is made upon such Debenture or any Debenture issued
in exchange or substitution therefor.
ARTICLE 11
MEETINGS OF DEBENTUREHOLDERS
Section 11.01 Purpose of Meetings. A meeting of Debentureholders may be
called at any time and from time to time pursuant to the provisions of this
Article 11 for any of the following purposes:
(1) to give any notice to the Company or to the Trustee or
to give any directions to the Trustee permitted under this Indenture, or to
consent to the waiving of any default or Event of Default hereunder and its
consequences, or to take any other action authorized to be taken by
Debentureholders pursuant to any of the provisions of Article 8;
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(2) to remove the Trustee and nominate a successor trustee
pursuant to the provisions of Article 9;
(3) to consent to the execution of an indenture or
indentures supplemental hereto pursuant to the provisions of Section 12.02; or
(4) to take any other action authorized to be taken by or on
behalf of the holders of any specified aggregate principal amount of the
Debentures under any other provision of this Indenture or under applicable law.
Section 11.02 Call of Meetings by Trustee. The Trustee may at any time
call a meeting of Debentureholders to take any action specified in Section
11.01, to be held at such time and at such place as the Trustee shall determine.
Notice of every meeting of the Debentureholders, setting forth the time and the
place of such meeting and in general terms the action proposed to be taken at
such meeting and the establishment of any record date pursuant to Section 10.01,
shall be mailed to holders of Debentures at their addresses as they shall appear
on the Debenture Register. Such notice shall also be mailed to the Company. Such
notices shall be mailed not less than twenty (20) nor more than ninety (90) days
prior to the date fixed for the meeting.
Any meeting of Debentureholders shall be valid without notice if the
holders of all Debentures then outstanding are present in person or by proxy or
if notice is waived before or after the meeting by the holders of all Debentures
outstanding, and if the Company and the Trustee are either present by duly
authorized representatives or have, before or after the meeting, waived notice.
Section 11.03 Call of Meetings by Company or Debentureholders. In case
at any time the Company, pursuant to a resolution of its Board of Directors, or
the holders of at least ten percent (10%) in aggregate principal amount of the
Debentures then outstanding, shall have requested the Trustee to call a meeting
of Debentureholders, by written request setting forth in reasonable detail the
action proposed to be taken at the meeting, and the Trustee shall not have
mailed the notice of such meeting within twenty (20) days after receipt of such
request, then the Company or such Debentureholders may determine the time and
the place for such meeting and may call such meeting to take any action
authorized in Section 11.01, by mailing notice thereof as provided in Section
11.02.
Section 11.04 Qualifications For Voting. To be entitled to vote at any
meeting of Debentureholders a person shall (a) be a holder of one or more
Debentures on the record date pertaining to such meeting or (b) be a person
appointed by an instrument in writing as proxy by a holder of one or more
Debentures on the record date pertaining to such meeting. The only persons who
shall be entitled to be present or to speak at any meeting of Debentureholders
shall be the persons entitled to vote at such meeting and their counsel and any
representatives of the Trustee and its counsel and any representatives of the
Company and its counsel.
Section 11.05 Regulations. Notwithstanding any other provisions of this
Indenture, the Trustee may make such reasonable regulations as it may deem
advisable for any meeting of Debentureholders, in regard to proof of the holding
of Debentures and of the appointment of proxies, and in regard to the
appointment and duties of inspectors of votes, the submission and examination of
proxies, certificates and other evidence of the right to vote, and such other
matters concerning the conduct of the meeting as it shall think fit.
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The Trustee shall, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called by the
Company or by Debentureholders as provided in Section 11.03, in which case the
Company or the Debentureholders calling the meeting, as the case may be, shall
in like manner appoint a temporary chairman. A permanent chairman and a
permanent secretary of the meeting shall be elected by vote of the holders of a
majority in principal amount of the Debentures represented at the meeting and
entitled to vote at the meeting.
Subject to the provisions of Section 10.04, at any meeting each
Debentureholder or proxyholder shall be entitled to one vote for each $1,000
principal amount of Debentures held or represented by him; provided that no vote
shall be cast or counted at any meeting in respect of any Debenture challenged
as not outstanding and ruled by the chairman of the meeting to be not
outstanding. The chairman of the meeting shall have no right to vote other than
by virtue of Debentures held by him or instruments in writing as aforesaid duly
designating him as the proxy to vote on behalf of other Debentureholders. Any
meeting of Debentureholders duly called pursuant to the provisions of Section
11.02 or 11.03 may be adjourned from time to time by the holders of a majority
of the aggregate principal amount of Debentures represented at the meeting,
whether or not constituting a quorum, and the meeting may be held as so
adjourned without further notice.
Section 11.06 Voting. The vote upon any resolution submitted to any
meeting of Debentureholders shall be by written ballot on which shall be
subscribed the signatures of the holders of Debentures or of their
representatives by proxy and the outstanding principal amount of the Debentures
held or represented by them. The permanent chairman of the meeting shall appoint
two inspectors of votes who shall count all votes cast at the meeting for or
against any resolution and who shall make and file with the secretary of the
meeting their verified written reports in duplicate of all votes cast at the
meeting. A record in duplicate of the proceedings of each meeting of
Debentureholders shall be prepared by the secretary of the meeting and there
shall be attached to said record the original reports of the inspectors of votes
on any vote by ballot taken thereat and affidavits by one or more persons having
knowledge of the facts setting forth a copy of the notice of the meeting and
showing that said notice was mailed as provided in Section 11.02. The record
shall show the principal amount of the Debentures voting in favor of or against
any resolution. The record shall be signed and verified by the affidavits of the
permanent chairman and secretary of the meeting and one of the duplicates shall
be delivered to the Company and the other to the Trustee to be preserved by the
Trustee, the latter to have attached thereto the ballots voted at the meeting.
Any record so signed and verified shall be conclusive evidence of the
matters therein stated.
Section 11.07 No Delay of Rights by Meeting. Nothing contained in this
Article 11 shall be deemed or construed to authorize or permit, by reason of any
call of a meeting of Debentureholders or any rights expressly or impliedly
conferred hereunder to make such call, any hindrance or delay in the exercise of
any right or rights conferred upon or reserved to the Trustee or to the
Debentureholders under any of the provisions of this Indenture or of the
Debentures.
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ARTICLE 12
SUPPLEMENTAL INDENTURES
Section 12.01 Supplemental Indentures Without Consent of
Debentureholders. The Company, when authorized by the resolutions of the Board
of Directors, and the Trustee may, from time to time, and at any time enter into
an indenture or indentures supplemental hereto for one or more of the following
purposes:
(a) make provision with respect to the conversion rights of the
holders of Debentures pursuant to the requirements of Section 16.06 and the
redemption obligations of the Company pursuant to the requirements of Section
3.05(e);
(b) to convey, transfer, assign, mortgage or pledge to the
Trustee as security for the Debentures, any property or assets;
(c) to evidence the succession of another Person to the Company,
or successive successions, and the assumption by the successor Person of the
covenants, agreements and obligations of the Company pursuant to Article 13;
(d) to add to the covenants of the Company such further
covenants, restrictions or conditions as the Board of Directors and the Trustee
shall consider to be for the benefit of the holders of Debentures, and to make
the occurrence, or the occurrence and continuance, of a default in any such
additional covenants, restrictions or conditions a default or an Event of
Default permitting the enforcement of all or any of the several remedies
provided in this Indenture as herein set forth; provided that in respect of any
such additional covenant, restriction or condition, such supplemental indenture
may provide for a particular period of grace after default (which period may be
shorter or longer than that allowed in the case of other defaults) or may
provide for an immediate enforcement upon such default or may limit the remedies
available to the Trustee upon such default;
(e) to provide for the issuance under this Indenture of
Debentures in coupon form (including Debentures registrable as to principal
only) and to provide for exchangeability of such Debentures with the Debentures
issued hereunder in fully registered form and to make all appropriate changes
for such purpose;
(f) to cure any ambiguity or to correct or supplement any
provision contained herein or in any supplemental indenture that may be
defective or inconsistent with any other provision contained herein or in any
supplemental indenture, or to make such other provisions in regard to matters or
questions arising under this Indenture that shall not materially adversely
affect the interests of the holders of the Debentures;
(g) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Debentures;
(h) to issue Additional Debentures in accordance with the
provisions of Section 2.01 hereof; or
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(i) to modify, eliminate or add to the provisions of this
Indenture to such extent as shall be necessary to effect the qualifications of
this Indenture under the Trust Indenture Act, or under any similar federal
statute hereafter enacted.
Upon the written request of the Company, accompanied by a copy of the
resolutions of the Board of Directors certified by its Secretary or Assistant
Secretary authorizing the execution of any supplemental indenture, the Trustee
is hereby authorized to join with the Company in the execution of any such
supplemental indenture, to make any further appropriate agreements and
stipulations that may be therein contained and to accept the conveyance,
transfer and assignment of any property thereunder, but the Trustee shall not be
obligated to, but may in its discretion, enter into any supplemental indenture
that affects the Trustee's own rights, duties or immunities under this Indenture
or otherwise.
Any supplemental indenture authorized by the provisions of this Section
12.01 may be executed by the Company and the Trustee without the consent of the
holders of any of the Debentures at the time outstanding, notwithstanding any of
the provisions of Section 12.02.
Notwithstanding any other provision of the Indenture or the Debentures,
the Registration Rights Agreement and the obligation to pay Liquidated Damages
thereunder may be amended, modified or waived in accordance with the provisions
of the Registration Rights Agreement.
Section 12.02 Supplemental Indenture with Consent of Debentureholders.
With the consent (evidenced as provided in Article 10) of the holders of at
least a majority in aggregate principal amount of the Debentures at the time
outstanding, the Company, when authorized by the resolutions of the Board of
Directors, and the Trustee may, from time to time and at any time, enter into an
indenture or indentures supplemental hereto for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Indenture or any supplemental indenture or of modifying in any manner the
rights of the holders of the Debentures; provided that no such supplemental
indenture shall (i) extend the fixed maturity of any Debenture, or reduce the
rate or extend the time of payment of interest thereon, or reduce the principal
amount thereof or premium, if any, thereon, or reduce any amount payable on
redemption thereof, or impair the right of any Debentureholder to institute suit
for the payment thereof, or make the principal thereof or interest or premium,
if any, thereon payable in any coin or currency other than that provided in the
Debentures, or change the rights granted to the holders in Section 16.01(d) of
this Indenture, or change the obligation of the Company to redeem any Debenture
on a redemption date in a manner adverse to the holders of Debentures, or change
the obligation of the Company to redeem any Debenture upon the happening of a
Fundamental Change in a manner adverse to the holders of Debentures, or impair
the right to convert the Debentures into Common Stock subject to the terms set
forth herein, including Section 16.06, in each case, without the consent of the
holder of each Debenture so affected, or modify any of the provisions of this
Section 12.02 or Section 8.07, except to increase any such percentage or to
provide that certain other provisions of this Indenture cannot be modified or
waived without the consent of the holder of each Debenture so affected, or
change any obligation of the Company to maintain an office or agency in the
places and for the purposes set forth in Section 6.01, or reduce the quorum or
voting requirements set forth in Article 11 or (ii) reduce the aforesaid
percentage of Debentures, the holders of which are required to consent to any
such supplemental indenture, without the consent of the holders of all
Debentures then outstanding.
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Upon the written request of the Company, accompanied by a copy of the
resolutions of the Board of Directors certified by its Secretary or Assistant
Secretary authorizing the execution of any such supplemental indenture, and upon
the filing with the Trustee of evidence of the consent of Debentureholders as
aforesaid, the Trustee shall join with the Company in the execution of such
supplemental indenture unless such supplemental indenture affects the Trustee's
own rights, duties or immunities under this Indenture or otherwise, in which
case the Trustee may in its discretion, but shall not be obligated to, enter
into such supplemental indenture.
It shall not be necessary for the consent of the Debentureholders under
this Section 12.02 to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such consent shall approve the
substance thereof.
Section 12.03 Effect of Supplemental Indenture. Any supplemental
indenture executed pursuant to the provisions of this Article 12 shall comply
with the Trust Indenture Act, as then in effect, provided that this Section
12.03 shall not require such supplemental indenture or the Trustee to be
qualified under the Trust Indenture Act prior to the time such qualification is
in fact required under the terms of the Trust Indenture Act or the Indenture has
been qualified under the Trust Indenture Act, nor shall it constitute any
admission or acknowledgment by any party to such supplemental indenture that any
such qualification is required prior to the time such qualification is in fact
required under the terms of the Trust Indenture Act or the Indenture has been
qualified under the Trust Indenture Act. Upon the execution of any supplemental
indenture pursuant to the provisions of this Article 12, this Indenture shall be
and be deemed to be modified and amended in accordance therewith and the
respective rights, limitation of rights, obligations, duties and immunities
under this Indenture of the Trustee, the Company and the holders of Debentures
shall thereafter be determined, exercised and enforced hereunder, subject in all
respects to such modifications and amendments and all the terms and conditions
of any such supplemental indenture shall be and be deemed to be part of the
terms and conditions of this Indenture for any and all purposes.
Section 12.04 Notation on Debentures. Debentures authenticated and
delivered after the execution of any supplemental indenture pursuant to the
provisions of this Article 12 may bear a notation in form approved by the
Trustee as to any matter provided for in such supplemental indenture. If the
Company or the Trustee shall so determine, new Debentures so modified as to
conform, in the opinion of the Trustee and the Board of Directors, to any
modification of this Indenture contained in any such supplemental indenture may,
at the Company's expense, be prepared and executed by the Company, authenticated
by the Trustee (or an authenticating agent duly appointed by the Trustee
pursuant to Section 17.10) and delivered in exchange for the Debentures then
outstanding, upon surrender of such Debentures then outstanding.
Section 12.05 Evidence of Compliance of Supplemental Indenture to be
Furnished to Trustee. Prior to entering into any supplemental indenture, the
Trustee shall be provided with an Officers' Certificate and an Opinion of
Counsel as conclusive evidence that any supplemental indenture executed pursuant
hereto complies with the requirements of this Article 12 and is otherwise
authorized or permitted by this Indenture.
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ARTICLE 13
CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE
Section 13.01 Company May Consolidate on Certain Terms. Subject to the
provisions of Section 13.02, the Company shall not consolidate or merge with or
into any other Person or Persons (whether or not affiliated with the Company),
nor shall the Company or its successor or successors be a party or parties to
successive consolidations or mergers, nor shall the Company sell, convey,
transfer or lease the property and assets of the Company substantially as an
entirety, to any other Person (whether or not affiliated with the Company),
unless: (i) the Company is the surviving Person, or the resulting, surviving or
transferee Person is a corporation organized and existing under the laws of the
United States of America, any state thereof or the District of Columbia; (ii)
upon any such consolidation, merger, sale, conveyance, transfer or lease, the
due and punctual payment of the principal of and premium, if any, and interest
on all of the Debentures, according to their tenor and the due and punctual
performance and observance of all of the covenants and conditions of this
Indenture to be performed by the Company, shall be expressly assumed, by
supplemental indenture satisfactory in form to the Trustee, executed and
delivered to the Trustee by the Person (if other than the Company) formed by
such consolidation, or into which the Company shall have been merged, or by the
Person that shall have acquired or leased such property, and such supplemental
indenture shall provide for the applicable conversion rights set forth in
Section 16.06; and (iii) immediately after giving effect to the transaction
described above, no Event of Default, and no event which, after notice or lapse
of time or both, would become an Event of Default, shall have happened and be
continuing.
Section 13.02 Successor to be Substituted. In case of any such
consolidation, merger, sale, conveyance, transfer or lease and upon the
assumption by the successor Person, by supplemental indenture, executed and
delivered to the Trustee and satisfactory in form to the Trustee, of the due and
punctual payment of the principal of and premium, if any, and interest on all of
the Debentures and the due and punctual performance of all of the covenants and
conditions of this Indenture to be performed by the Company, such successor
Person shall succeed to and be substituted for the Company, with the same effect
as if it had been named herein as the party of this first part. Such successor
Person thereupon may cause to be signed, and may issue either in its own name or
in the name of Greatbatch, Inc. any or all of the Debentures, issuable hereunder
that theretofore shall not have been signed by the Company and delivered to the
Trustee; and, upon the order of such successor Person instead of the Company and
subject to all the terms, conditions and limitations in this Indenture
prescribed, the Trustee shall authenticate and shall deliver, or cause to be
authenticated and delivered, any Debentures that previously shall have been
signed and delivered by the officers of the Company to the Trustee for
authentication, and any Debentures that such successor Person thereafter shall
cause to be signed and delivered to the Trustee for that purpose. All the
Debentures so issued shall in all respects have the same legal rank and benefit
under this Indenture as the Debentures theretofore or thereafter issued in
accordance with the terms of this Indenture as though all of such Debentures had
been issued at the date of the execution hereof. In the event of any such
consolidation, merger, sale, conveyance, transfer or lease, the Person named as
the "Company" in the first paragraph of this Indenture or any successor that
shall thereafter have become such in the manner prescribed in this Article 13
may be dissolved, wound up and liquidated at any time thereafter and such Person
shall be released from its liabilities as obligor and maker of the Debentures
and from its obligations under this Indenture.
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In case of any such consolidation, merger, sale, conveyance, transfer
or lease, such changes in phraseology and form (but not in substance) may be
made in the Debentures thereafter to be issued as may be appropriate.
Section 13.03 Opinion of Counsel to be Given Trustee. The Trustee shall
receive an Officers' Certificate and an Opinion of Counsel as conclusive
evidence that any such consolidation, merger, sale, conveyance, transfer or
lease and any such assumption complies with the provisions of this Article 13.
ARTICLE 14
SATISFACTION AND DISCHARGE OF INDENTURE
Section 14.01 Discharge of Indenture. When the Company shall deliver to
the Trustee for cancellation all Debentures theretofore authenticated (other
than any Debentures that have been destroyed, lost or stolen and in lieu of or
in substitution for which other Debentures shall have been authenticated and
delivered) and not theretofore canceled, or all the Debentures not theretofore
canceled or delivered to the Trustee for cancellation shall have become due and
payable, or are by their terms to become due and payable within one year or are
to be called for redemption within one year under arrangements satisfactory to
the Trustee for the giving of notice of redemption, and the Company shall
deposit with the Trustee, in trust, funds sufficient to pay at maturity or upon
redemption of all of the Debentures (other than any Debentures that shall have
been mutilated, destroyed, lost or stolen and in lieu of or in substitution for
which other Debentures shall have been authenticated and delivered) not
theretofore canceled or delivered to the Trustee for cancellation, including
principal and premium, if any, and interest due or to become due to such date of
maturity or redemption date, as the case may be, accompanied by a verification
report, as to the sufficiency of the deposited amount, from an independent
certified accountant or other financial professional satisfactory to the
Trustee, and if the Company shall also pay or cause to be paid all other sums
payable hereunder by the Company, then this Indenture shall cease to be of
further effect (except as to remaining rights of registration of transfer,
substitution and exchange and conversion of Debentures, rights hereunder of
Debentureholders to receive payments of principal of and premium, if any, and
interest on, the Debentures and the other rights, duties and obligations of
Debentureholders, as beneficiaries hereof with respect to the amounts, if any,
so deposited with the Trustee and the rights, obligations and immunities of the
Trustee hereunder), and the Trustee, on written demand of the Company
accompanied by an Officers' Certificate and an Opinion of Counsel as required by
Section 17.04 and at the cost and expense of the Company, shall execute proper
instruments acknowledging satisfaction of and discharging this Indenture; the
Company, however, hereby agrees to reimburse the Trustee for any costs or
expenses thereafter reasonably and properly incurred by the Trustee and to
compensate the Trustee for any services thereafter reasonably and properly
rendered by the Trustee in connection with this Indenture or the Debentures.
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Section 14.02 Deposited Monies to be Held in Trust by Trustee. Subject
to Section 14.04, all monies deposited with the Trustee pursuant to Section
14.01, shall be held in trust for the sole benefit of the Debentureholders, and
such monies shall be applied by the Trustee to the payment, either directly or
through any paying agent (including the Company if acting as its own paying
agent), to the holders of the particular Debentures for the payment or
redemption of which such monies have been deposited with the Trustee, of all
sums due and to become due thereon for principal and interest and premium, if
any.
Section 14.03 Paying Agent to Repay Monies Held. Upon the satisfaction
and discharge of this Indenture, all monies then held by any paying agent of the
Debentures (other than the Trustee) shall, upon written request of the Company,
be repaid to it or paid to the Trustee, and thereupon such paying agent shall be
released from all further liability with respect to such monies.
Section 14.04 Return of Unclaimed Monies. Subject to the requirements
of applicable law, any monies deposited with or paid to the Trustee for payment
of the principal of, premium, if any, or interest on Debentures and not applied
but remaining unclaimed by the holders of Debentures for two years after the
date upon which the principal of, premium, if any, or interest on such
Debentures, as the case may be, shall have become due and payable, shall be
repaid to the Company by the Trustee on demand and all liability of the Trustee
shall thereupon cease with respect to such monies; and the holder of any of the
Debentures shall thereafter look only to the Company for any payment that such
holder may be entitled to collect unless an applicable abandoned property law
designates another Person.
Section 14.05 Reinstatement. If the Trustee or the paying agent is
unable to apply any money in accordance with Section 14.02 by reason of any
order or judgment of any court or governmental authority enjoining, restraining
or otherwise prohibiting such application, the Company's obligations under this
Indenture and the Debentures shall be revived and reinstated as though no
deposit had occurred pursuant to Section 14.01 until such time as the Trustee or
the paying agent is permitted to apply all such money in accordance with Section
14.02; provided that if the Company makes any payment of interest on or
principal of any Debenture following the reinstatement of its obligations, the
Company shall be subrogated to the rights of the holders of such Debentures to
receive such payment from the money held by the Trustee or paying agent.
ARTICLE 15
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS
Section 15.01 Indenture and Debentures Solely Corporate Obligations. No
recourse for the payment of the principal of or premium, if any, or interest on
any Debenture, or for any claim based thereon or otherwise in respect thereof,
and no recourse under or upon any obligation, covenant or agreement of the
Company in this Indenture or in any supplemental indenture or in any Debenture,
or because of the creation of any indebtedness represented thereby, shall be had
against any incorporator, stockholder, employee, agent, officer, director or
subsidiary, as such, past, present or future, of the Company or of any successor
corporation, either directly or through the Company or any successor
corporation, whether by virtue of any constitution, statute or rule of law, or
by the enforcement of any assessment or penalty or otherwise; it being expressly
understood that all such liability is hereby expressly waived and released as a
condition of, and as a consideration for, the execution of this Indenture and
the issue of the Debentures.
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ARTICLE 16
CONVERSION OF DEBENTURES
Section 16.01 Right to Convert. (a) Subject to and upon compliance with
the provisions of this Indenture and the right of the Company to pay some or all
of the conversion consideration in cash in accordance with Section 16.12 (unless
the Company has made a Physical Settlement Election), prior to June 15, 2013 the
holder of any Debenture shall have the right, at such holder's option, to
convert the principal amount of the Debenture, or any portion of such principal
amount which is a multiple of $1,000, into fully paid and non-assessable shares
of Common Stock (as such shares shall then be constituted) at the Conversion
Rate in effect at such time, by surrender of the Debenture so to be converted in
whole or in part, together with any required funds, under the circumstances
described in this Section 16.01 and in the manner provided in Section 16.02. The
Debentures shall be convertible only upon the occurrence of one of the following
events:
(i) during any Fiscal Quarter commencing after June 30,
2007, if the Closing Sale Price exceeds 150% of the Conversion Price in effect
for at least 20 Trading Days in the 30 consecutive Trading Day period ending on
the last Trading Day of the immediately preceding Fiscal Quarter (it being
understood for purposes of this Section 16.01(a)(i) that the Conversion Price in
effect at the close of business on each of the 30 consecutive Trading Days
should be used and that Debentures are not convertible under this Section
16.01(a)(i) prior to July 1, 2007);
(ii) during the five Business Day period after any five
consecutive Trading Day period in which the Trading Price per $1,000 principal
amount of the Debentures for each day of such five Trading Day period was less
than 98% of the product of the Closing Sale Price and the number of shares of
Common Stock issuable upon conversion of $1,000 principal amount of the
Debentures;
(iii) if such Debenture has been called for redemption, at
any time on or after the date the notice of redemption has been given until the
close of business on the Business Day immediately preceding the redemption date;
(iv) as provided in Section (b) of this Section 16.01;
(v) if a Fundamental Change occurs or is approved by the
Company's Board of Directors; or
(vi) at any time during the period beginning 60 days prior
to, but excluding, June 15, 2013.
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The Trustee (or other conversion agent appointed by the Company) shall,
on behalf of the Company, determine on a daily basis during the time period
specified in Section 16.01(a)(i) whether the Debentures shall be convertible as
a result of the occurrence of an event specified in clause (i) above and, if the
Debentures shall be so convertible, the Trustee (or other conversion agent
appointed by the Company) shall promptly deliver to the Company and the Trustee
(if the Trustee is not the conversion agent) written notice thereof. Whenever
the Debentures shall become convertible pursuant to this Section 16.01, the
Company or, at the Company's request, the Trustee in the name and at the expense
of the Company, shall notify the holders of the event triggering such
convertibility in the manner provided in Section 17.03, and the Company shall
also publicly announce such information and publish it on the Company's web
site. Any notice so given shall be conclusively presumed to have been duly
given, whether or not the holder receives such notice.
The Trustee (or other conversion agent appointed by the Company) shall
have no obligation to determine the Trading Price under this Section 16.01
unless the Company has requested such a determination; and the Company shall
have no obligation to make such request unless a holder provides it with
reasonable evidence that the Trading Price per $1,000 principal amount of
Debentures would be less than 98% of the product of the Closing Sale Price and
the number of shares of Common Stock issuable upon conversion of $1,000
principal amount of Debentures. If such evidence is provided, the Company shall
instruct the Trustee (or other conversion agent) to determine the Trading Price
of the Debentures beginning on the next Trading Day and on each successive
Trading Day until the Trading Price per $1,000 principal amount of Debentures is
greater than or equal to 98% of the product of the Closing Sale Price and the
number of shares issuable upon conversion of $1,000 principal amount of the
Debentures; provided that the Trustee shall be under no duty or obligation to
make the calculations described in Section 16.01(a)(ii) hereof or to determine
whether the Debentures are convertible pursuant to such section. For the
avoidance of doubt, the Company shall make the calculations described in Section
16.01(a)(ii), using the Trading Price provided by the Trustee.
The Trustee shall be entitled at its sole discretion to consult with
the Company and to request the assistance of the Company in connection with the
Trustee's duties and obligations pursuant to Section 16.01(a)(i) and Section
16.01(a)(ii) hereof (including without limitation the calculation or
determination of the Conversion Price, the Closing Sales Price and the Trading
Price), and the Company agrees, if requested by the Trustee, to cooperate with,
and provide assistance to, the Trustee in carrying out its duties under this
Section 16.01; provided, however, that nothing herein shall be construed to
relieve the Trustee of its duties pursuant to Section 16.01(a)(i) and Section
16.01(a)(ii) hereof.
(b) In addition, if:
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(i) (A) the Company distributes to all holders of its Common
Stock rights or warrants entitling them (for a period expiring within 45 days of
the record date for the determination of the stockholders entitled to receive
such distribution) to subscribe for or purchase shares of Common Stock, at a
price per share less than the average of the Closing Sale Price for the ten
Trading Days immediately preceding, but not including, the date such
distribution is first publicly announced by the Company, or (B) the Company
distributes to all holders of its Common Stock, cash or other assets, debt
securities or rights to purchase its securities, where the Fair Market Value of
such distribution per share of Common Stock exceeds 5% of the Closing Sale Price
on the Trading Day immediately preceding the date such distribution is first
publicly announced by the Company, then, in either case, the Debentures may be
surrendered for conversion at any time on and after the date that the Company
gives notice to the holders of such distribution, which shall be not less than
20 days prior to the Ex-Dividend Time for such distribution, until the earlier
of the close of business on the Business Day immediately preceding, but not
including, the Ex-Dividend Time or the date the Company publicly announces that
such distribution will not take place; provided that no adjustment to the
Conversion Price or the ability of a holder of a Debenture to convert will be
made if the holder will otherwise participate in such distribution without
conversion; or
(ii) the Company consolidates with or merges with or into
another Person or is a party to a binding share exchange or conveys, transfers,
sells, leases or otherwise disposes of all or substantially all of its
properties and assets in each case pursuant to which the Company's Common Stock
is converted into cash, securities or other property, then the Debentures may be
surrendered for conversion at any time from and after the date fifteen (15) days
prior to the anticipated effective date of the transaction and ending on and
including the date fifteen (15) days after the consummation of the transaction.
The Board of Directors shall determine the anticipated effective date of the
transaction, and such determination shall be conclusive and binding on the
holders and shall be publicly announced by the Company and posted on its web
site not later than two Business Days prior to such 15th day.
"Ex-Dividend Time" means, with respect to any distribution on shares of
Common Stock, the first date on which the shares of Common Stock trade regular
way on the principal securities market on which the shares of Common Stock are
then traded without the right to receive such distribution.
(c) A Debenture in respect of which a holder is electing to
exercise its option to require redemption upon a Fundamental Change pursuant to
Section 3.05 may be converted only if such holder withdraws its election in
accordance with Section 3.05(b) or Section 3.08, respectively. A holder of
Debentures is not entitled to any rights of a holder of Common Stock until such
holder has converted his Debentures to Common Stock, and only to the extent such
Debentures are deemed to have been converted to Common Stock under this Article
16.
(d) If a holder elects to convert its Debentures in connection
with a corporate transaction that constitutes a Fundamental Change, then the
Conversion Rate of the Debentures being converted by such holder at that time
shall be increased so that such holder will be entitled to receive, in addition
to the cash and Common Stock such holder is otherwise entitled to receive, a
number of additional shares of Common Stock (the "Additional Shares") determined
in the manner set forth below; provided that if the Share Price in such
transaction is greater than U.S.$90.00 or less than U.S.$26.98 (subject in each
case to adjustment as described below), no increase in the Conversion Rate shall
be made; and provided further that in no event will the Conversion Rate exceed
37.0219 per U.S.$1,000 principal amount of Debentures, subject to adjustments in
the same manner as the Conversion Price as set forth in this Indenture. For the
avoidance of doubt, the adjustment provided for in this Section 16.01(d) shall
only be made with respect to the Debentures being converted in connection with
such Fundamental Change and shall not be effective as to any Debentures not so
converted.
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The increase in the Conversion Rate expressed as a number of Additional
Shares per U.S.$1,000 principal amount of Debentures will be determined by the
Company by reference to the table attached as Schedule A hereto, based on the
date the Fundamental Change becomes effective (the "Effective Date") and the
share price paid per share of Common Stock in the corporate transaction (the
"Share Price"); provided that if holders of the Common Stock receive only cash
in such corporate transaction, the Share Price shall be the cash amount paid per
share. Otherwise, the Share Price will be the average of the Closing Sale Price
on the five Trading Days prior to but not including the Effective Date; provided
further that if the Share Price is between two Share Price amounts in the table
or the Effective Date is between two Effective Dates in the table, the Company
shall determine the number of Additional Shares by a straight-line interpolation
between the number of Additional Shares set forth for the higher and lower Share
Price amounts and the two dates, as applicable, based on a 365-day year.
The Share Prices set forth in the first row of the table (i.e., column
headers) in Schedule A hereto will be adjusted as of any date on which the
Conversion Price of the Debentures is adjusted pursuant to the Indenture. The
adjusted Share Prices will equal the Share Prices applicable immediately prior
to such adjustment, multiplied by a fraction, the numerator of which is the
Conversion Price immediately prior to the adjustment giving rise to the Closing
Sale Price adjustment and the denominator of which is the Conversion Price as so
adjusted. The number of Additional Shares will be adjusted in the same manner as
the Conversion Price as set forth in this Indenture.
Section 16.02 Exercise of Conversion Privilege; Issuance of Common
Stock on Conversion; No Adjustment for Interest or Dividends. In order to
exercise the conversion privilege with respect to any Debenture in certificated
form, the Company must receive at the office or agency of the Company maintained
for that purpose or, at the option of such holder, the Corporate Trust Office,
such Debenture with the original or facsimile of the form entitled "Conversion
Notice" on the reverse thereof, duly completed and manually signed, together
with such Debentures duly endorsed for transfer, accompanied by the funds, if
any, required by the penultimate paragraph of this Section 16.02. Such notice
shall also state the name or names (with address or addresses) in which the
certificate or certificates for shares of Common Stock which shall be issuable
on such conversion shall be issued, and shall be accompanied by transfer or
similar taxes, if required pursuant to Section 16.07.
In order to exercise the conversion privilege with respect to any
interest in a Global Debenture, the beneficial holder must complete, or cause to
be completed, the appropriate instruction form for conversion pursuant to the
Depositary's book-entry conversion program, deliver, or cause to be delivered,
by book-entry delivery an interest in such Global Debenture, furnish appropriate
endorsements and transfer documents if required by the Company or the Trustee or
conversion agent, and pay the funds, if any, required by this Section 16.02 and
any transfer taxes if required pursuant to Section 16.07.
69
As promptly as practicable after satisfaction of the requirements for
conversion set forth above, subject to compliance with any restrictions on
transfer if shares issuable on conversion are to be issued in a name other than
that of the Debentureholder (as if such transfer were a transfer of the
Debenture or Debentures (or portion thereof) so converted), the Company shall
issue and shall deliver to such Debentureholder at the office or agency
maintained by the Company for such purpose pursuant to Section 6.02, a
certificate or certificates for the number of full shares of Common Stock
issuable upon the conversion of such Debenture or portion thereof as determined
by the Company in accordance with the provisions of this Article 16 and a check
or cash in respect of any fractional interest in respect of a share of Common
Stock arising upon such conversion, calculated by the Company as provided in
Section 16.03. In case any Debenture of a denomination greater than $1,000 shall
be surrendered for partial conversion, and subject to Section 2.03, the Company
shall execute and the Trustee shall authenticate and deliver to the holder of
the Debenture so surrendered, without charge to him, a new Debenture or
Debentures in authorized denominations in an aggregate principal amount equal to
the unconverted portion of the surrendered Debenture.
Each conversion shall be deemed to have been effected as to any such
Debenture (or portion thereof) on the date on which the requirements set forth
above in this Section 16.02 have been satisfied as to such Debenture (or portion
thereof), and the Person in whose name any certificate or certificates for
shares of Common Stock shall be issuable upon such conversion shall be deemed to
have become on said date the holder of record of the shares represented thereby;
provided that any such surrender on any date when the stock transfer books of
the Company shall be closed shall constitute the Person in whose name the
certificates are to be issued as the record holder thereof for all purposes on
the next succeeding day on which such stock transfer books are open, but such
conversion shall be at the Conversion Rate in effect on the date upon which such
Debenture shall be surrendered.
Any Debenture or portion thereof surrendered for conversion during the
period from the close of business on the record date for any interest payment
date to the close of business on the Business Day preceding the following
interest payment date that has not been called for redemption during such period
shall be accompanied by payment, in immediately available funds or other funds
acceptable to the Company, of an amount equal to the interest otherwise payable
on such interest payment date on the principal amount being converted; provided
that no such payment need be made (1) if the Company has specified a redemption
date that is after a record date and prior to the next interest payment date,
(2) if the Company has specified a redemption date following a Fundamental
Change that is during such period or (3) to the extent of any overdue interest,
if any overdue interest exists at the time of conversion with respect to such
debenture. Except as provided above in this Section 16.02, no payment or other
adjustment shall be made for interest accrued on any Debenture converted or for
dividends on any shares issued upon the conversion of such Debenture as provided
in this Article 16.
70
Upon the conversion of an interest in a Global Debenture, the Trustee
(or other conversion agent appointed by the Company), or the Custodian at the
direction of the Trustee (or other conversion agent appointed by the Company),
shall make a notation on such Global Debenture as to the reduction in the
principal amount represented thereby. The Company shall notify the Trustee in
writing of any conversions of Debentures effected through any conversion agent
other than the Trustee.
Upon the conversion of a Debenture, that portion of the accrued but
unpaid interest, including accrued contingent interest, if any, and accrued Tax
Original Issue Discount attributable to the period from the issue date of the
Debenture to the conversion date, with respect to the converted Debenture shall
not be cancelled, extinguished or forfeited, but rather shall be deemed to be
paid in full to the holder thereof through delivery of the Common Stock
(together with the cash payment, if any in lieu of fractional shares) in
exchange for the Debenture being converted pursuant to the provisions hereof;
and the fair market value of such shares of Common Stock (together with any such
cash payment in lieu of fractional shares) shall be treated as issued, to the
extent thereof, first in exchange for and in satisfaction of our obligation to
pay the principal amount of the converted Debenture, the accrued but unpaid
interest, including contingent interest, if any, and accrued Tax Original Issue
Discount through the conversion date from the issue date, and the balance, if
any, of such fair market value of such Common Stock (and any such cash payment)
shall be treated as issued in exchange for and in satisfaction of the right to
convert the Debenture being converted pursuant to the provisions hereof.
Section 16.03 Cash Payments in Lieu of Fractional Shares. No fractional
shares of Common Stock or scrip certificates representing fractional shares
shall be issued upon conversion of Debentures. If more than one Debenture shall
be surrendered for conversion at one time by the same holder, the number of full
shares that shall be issuable upon conversion shall be computed on the basis of
the aggregate principal amount of the Debentures (or specified portions thereof
to the extent permitted hereby) so surrendered. If any fractional share of stock
would be issuable upon the conversion of any Debenture or Debentures, the
Company shall make an adjustment and payment therefor in cash at the current
market price thereof to the holder of Debentures. The current market price of a
share of Common Stock shall be the Closing Sale Price on the last Trading Day
immediately preceding the day on which the Debentures (or specified portions
thereof) are deemed to have been converted.
Section 16.04 Conversion Rate. Each $1,000 principal amount of the
Debentures shall be convertible into the number of shares of Common Stock
specified in the form of Debenture (herein called the "Conversion Rate")
attached as Exhibit A hereto, subject to adjustment as provided in this Article
16.
Section 16.05 Adjustment of Conversion Rate. The Conversion Rate shall
be adjusted from time to time by the Company as follows:
(a) In case the Company shall hereafter pay a dividend or make a
distribution to all holders of the outstanding Common Stock in shares of Common
Stock, the Conversion Rate shall be increased so that the same shall equal the
rate determined by multiplying the Conversion Rate in effect at the opening of
business on the date following the date fixed for the determination of
stockholders entitled to receive such dividend or other distribution by a
fraction,
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(i) the numerator of which shall be the sum of the number of
shares of Common Stock outstanding at the close of business on the date fixed
for the determination of stockholders entitled to receive such dividend or other
distribution plus the total number of shares of Common Stock constituting such
dividend or other distribution; and
(ii) the denominator of which shall be the number of shares
of Common Stock outstanding at the close of business on the date fixed for such
determination,
such increase to become effective immediately after the opening of
business on the day following the date fixed for such determination. For the
purpose of this paragraph (a), the number of shares of Common Stock at any time
outstanding shall not include shares held in the treasury of the Company. The
Company will not pay any dividend or make any distribution on shares of Common
Stock held in the treasury of the Company. If any dividend or distribution of
the type described in this Section 16.05(a) is declared but not so paid or made,
the Conversion Rate shall again be adjusted to the Conversion Rate that would
then be in effect if such dividend or distribution had not been declared.
(b) In case the Company shall issue rights or warrants to all
holders of its outstanding shares of Common Stock entitling them (for a period
expiring within forty-five (45) days after the date fixed for determination of
stockholders entitled to receive such rights or warrants) to subscribe for or
purchase shares of Common Stock at a price per share less than the Current
Market Price on the date fixed for determination of stockholders entitled to
receive such rights or warrants, the Conversion Rate shall be increased so that
the same shall equal the rate determined by multiplying the Conversion Rate in
effect immediately prior to the date fixed for determination of stockholders
entitled to receive such rights or warrants by a fraction,
(i) the numerator of which shall be the number of shares of
Common Stock outstanding on the date fixed for determination of stockholders
entitled to receive such rights or warrants plus the total number of additional
shares of Common Stock offered for subscription or purchase, and
(ii) the denominator of which shall be the sum of the number
of shares of Common Stock outstanding at the close of business on the date fixed
for determination of stockholders entitled to receive such rights or warrants
plus the number of shares that the aggregate offering price of the total number
of shares so offered would purchase at such Current Market Price.
Such adjustment shall be successively made whenever any such rights or
warrants are issued, and shall become effective immediately after the opening of
business on the day following the date fixed for determination of stockholders
entitled to receive such rights or warrants. To the extent that shares of Common
Stock are not delivered after the expiration of such rights or warrants, the
Conversion Rate shall be readjusted to the Conversion Rate that would then be in
effect had the adjustments made upon the issuance of such rights or warrants
been made on the basis of delivery of only the number of shares of Common Stock
actually delivered. If such rights or warrants are not so issued, the Conversion
Rate shall again be adjusted to be the Conversion Rate that would then be in
effect if such date fixed for the determination of stockholders entitled to
receive such rights or warrants had not been fixed. In determining whether any
rights or warrants entitle the holders to subscribe for or purchase shares of
Common Stock at less than such Current Market Price, and in determining the
aggregate offering price of such shares of Common Stock, there shall be taken
into account any consideration received by the Company for such rights or
warrants and any amount payable on exercise or conversion thereof, the value of
such consideration, if other than cash, to be determined by the Board of
Directors.
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(c) In case outstanding shares of Common Stock shall be
subdivided into a greater number of shares of Common Stock, the Conversion Rate
in effect at the opening of business on the day following the day upon which
such subdivision becomes effective shall be proportionately increased, and
conversely, in case outstanding shares of Common Stock shall be combined into a
smaller number of shares of Common Stock, the Conversion Rate in effect at the
opening of business on the day following the day upon which such combination
becomes effective shall be proportionately reduced, such increase or reduction,
as the case may be, to become effective immediately after the opening of
business on the day following the day upon which such subdivision or combination
becomes effective.
(d) In case the Company shall, by dividend or otherwise,
distribute to all holders of its Common Stock shares of any class of capital
stock of the Company or evidences of its indebtedness or assets (including
securities, but excluding any rights or warrants referred to in Section
16.05(b), and excluding any dividend or distribution (x) paid exclusively in
cash or (y) referred to in Section 16.05(a) (any of the foregoing hereinafter in
this Section 16.05(d)) called the "Securities")), then, in each such case
(unless the Company elects to reserve such Securities for distribution to the
Debentureholders upon the conversion of the Debentures so that any such holder
converting Debentures will receive upon such conversion, in addition to the
shares of Common Stock to which such holder is entitled, the amount and kind of
such Securities which such holder would have received if such holder had
converted its Debentures into Common Stock immediately prior to the Record Date)
the Conversion Rate shall be increased so that the same shall be equal to the
rate determined by multiplying the Conversion Rate in effect on the Record Date
with respect to such distribution by a fraction,
(i) the numerator of which shall be the Current Market Price on
such Record Date; and
(ii) the denominator of which shall be the Current Market Price
on such Record Date less the fair market value (as determined by the Board of
Directors, whose determination shall be conclusive, and described in a
resolution of the Board of Directors) on the Record Date of the portion of the
Securities so distributed applicable to one share of Common Stock,
73
such adjustment to become effective immediately prior to the opening of
business on the day following such Record Date; provided that if the then fair
market value (as so determined) of the portion of the Securities so distributed
applicable to one share of Common Stock is equal to or greater than the Current
Market Price on the Record Date, in lieu of the foregoing adjustment, adequate
provision shall be made so that each Debentureholder shall have the right to
receive upon conversion the amount of Securities such holder would have received
had such holder converted each Debenture on the Record Date. If such dividend or
distribution is not so paid or made, the Conversion Rate shall again be adjusted
to be the Conversion Rate that would then be in effect if such dividend or
distribution had not been declared. If the Board of Directors determines the
fair market value of any distribution for purposes of this Section 16.05(d) by
reference to the actual or when issued trading market for any securities, it
must in doing so consider the prices in such market over the same period used in
computing the Current Market Price on the applicable Record Date.
Rights or warrants distributed by the Company to all holders of Common
Stock entitling the holders thereof to subscribe for or purchase shares of the
Company's capital stock (either initially or under certain circumstances), which
rights or warrants, until the occurrence of a specified event or events
("Trigger Event"): (i) are deemed to be transferred with such shares of Common
Stock; (ii) are not exercisable; and (iii) are also issued in respect of future
issuances of Common Stock, shall be deemed not to have been distributed for
purposes of this Section 16.05 (and no adjustment to the Conversion Rate under
this Section 16.05 will be required) until the occurrence of the earliest
Trigger Event, whereupon such rights and warrants shall be deemed to have been
distributed and an appropriate adjustment (if any is required) to the Conversion
Rate shall be made under this Section 16.05(d). If any such right or warrant,
including any such existing rights or warrants distributed prior to the date of
this Indenture, are subject to events, upon the occurrence of which such rights
or warrants become exercisable to purchase different securities, evidences of
indebtedness or other assets, then the date of the occurrence of any and each
such event shall be deemed to be the date of distribution and record date with
respect to new rights or warrants with such rights (and a termination or
expiration of the existing rights or warrants without exercise by any of the
holders thereof). In addition, in the event of any distribution (or deemed
distribution) of rights or warrants, or any Trigger Event or other event (of the
type described in the preceding sentence) with respect thereto that was counted
for purposes of calculating a distribution amount for which an adjustment to the
Conversion Rate under this Section 16.05 was made, (1) in the case of any such
rights or warrants that shall all have been redeemed or repurchased without
exercise by any holders thereof, the Conversion Rate shall be readjusted upon
such final redemption or repurchase to give effect to such distribution or
Trigger Event, as the case may be, as though it were a cash distribution, equal
to the per share redemption or repurchase price received by a holder or holders
of Common Stock with respect to such rights or warrants (assuming such holder
had retained such rights or warrants), made to all holders of Common Stock as of
the date of such redemption or repurchase, and (2) in the case of such rights or
warrants that shall have expired or been terminated without exercise by any
holders thereof, the Conversion Rate shall be readjusted as if such rights and
warrants had not been issued.
No adjustment of the Conversion Rate shall be made pursuant to this
Section 16.05(d) in respect of rights or warrants distributed or deemed
distributed on any Trigger Event to the extent that such rights or warrants are
actually distributed, or reserved by the Company for distribution to holders of
Debentures upon conversion by such holders of Debentures to Common Stock.
74
For purposes of this Section 16.05(d) and Section 16.05(a) and (b), any
dividend or distribution to which this Section 16.05(d) is applicable that also
includes shares of Common Stock, or rights or warrants to subscribe for or
purchase shares of Common Stock (or both), shall be deemed instead to be (1) a
dividend or distribution of the evidences of indebtedness, assets or shares of
capital stock other than such shares of Common Stock or rights or warrants (and
any Conversion Rate adjustment required by this Section 16.05(d) with respect to
such dividend or distribution shall then be made) immediately followed by (2) a
dividend or distribution of such shares of Common Stock or such rights or
warrants (and any further Conversion Rate adjustment required by Sections
16.05(a) and 16.05(b) with respect to such dividend or distribution shall then
be made), except (A) the Record Date of such dividend or distribution shall be
substituted as "the date fixed for the determination of stockholders entitled to
receive such dividend or other distribution", "the date fixed for the
determination of stockholders entitled to receive such rights or warrants" and
"the date fixed for such determination" within the meaning of Section 16.05(a)
and 16.05(b) and (B) any shares of Common Stock included in such dividend or
distribution shall not be deemed "outstanding at the close of business on the
date fixed for such determination" within the meaning of Section 16.05(a).
(e) In case the Company shall, by dividend or otherwise,
distribute to all holders of its Common Stock cash (excluding (x) any quarterly
cash dividend on the Common Stock to the extent the aggregate cash dividend per
share of Common Stock in any Fiscal Quarter does not exceed the greater of (A)
the amount per share of Common Stock of the next preceding quarterly cash
dividend on the Common Stock to the extent that such preceding quarterly
dividend did not require any adjustment of the Conversion Rate pursuant to this
Section 16.05(e) (as adjusted to reflect subdivisions, or combinations of the
Common Stock), and (B) 1.25% of the arithmetic average of the Closing Sale Price
during the ten Trading Days immediately prior to the date of declaration of such
dividend, and (y) any dividend or distribution in connection with the
liquidation, dissolution or winding up of the Company, whether voluntary or
involuntary), then, in such case, the Conversion Rate shall be increased so that
the same shall equal the rate determined by multiplying the Conversion Rate in
effect immediately prior to the close of business on such record date by a
fraction,
(i) the numerator of which shall be the Current Market Price
on such record date; and
(ii) the denominator of which shall be the Current Market
Price on such record date less the amount of cash so distributed (and not
excluded as provided above) applicable to one share of Common Stock,
such adjustment to be effective immediately prior to the opening of
business on the day following the record date; provided that if the portion of
the cash so distributed applicable to one share of Common Stock is equal to or
greater than the Current Market Price on the record date, in lieu of the
foregoing adjustment, adequate provision shall be made so that each
Debentureholder shall have the right to receive upon conversion the amount of
cash such holder would have received had such holder converted each Debenture on
the record date. If such dividend or distribution is not so paid or made, the
Conversion Rate shall again be adjusted to be the Conversion Rate that would
then be in effect if such dividend or distribution had not been declared. If any
adjustment is required to be made as set forth in this Section 16.05(e) as a
result of a distribution that is a quarterly dividend, such adjustment shall be
based upon the amount by which such distribution exceeds the amount of the
quarterly cash dividend permitted to be excluded pursuant hereto. If an
adjustment is required to be made as set forth in this Section 16.05(e) above as
a result of a distribution that is not a quarterly dividend, such adjustment
shall be based upon the full amount of the distribution.
75
(f) In case a tender or exchange offer made by the Company or any
Subsidiary for all or any portion of the Common Stock shall expire and such
tender or exchange offer (as amended upon the expiration thereof) shall require
the payment to stockholders of consideration per share of Common Stock having a
Fair Market Value (as determined by the Board of Directors, whose determination
shall be conclusive and described in a resolution of the Board of Directors)
that as of the last time (the "Expiration Time") tenders or exchanges may be
made pursuant to such tender or exchange offer (as it may be amended) exceeds
the Closing Sale Price of a share of Common Stock on the Trading Day next
succeeding the Expiration Time, the Conversion Rate shall be increased so that
the same shall equal the rate determined by multiplying the Conversion Rate in
effect immediately prior to the Expiration Time by a fraction,
(i) the numerator of which shall be the sum of (x) the Fair
Market Value (determined as aforesaid) of the aggregate consideration payable to
stockholders based on the acceptance (up to any maximum specified in the terms
of the tender or exchange offer) of all shares validly tendered or exchanged and
not withdrawn as of the Expiration Time (the shares deemed so accepted up to any
such maximum, being referred to as the "Purchased Shares") and (y) the product
of the number of shares of Common Stock outstanding (less any Purchased Shares)
at the Expiration Time and the Closing Sale Price of a share of Common Stock on
the Trading Day next succeeding the Expiration Time, and
(ii) the denominator of which shall be the number of shares
of Common Stock outstanding (including any tendered or exchanged shares) at the
Expiration Time multiplied by the Closing Sale Price of a share of Common Stock
on the Trading Day next succeeding the Expiration Time such adjustment to become
effective immediately prior to the opening of business on the day following the
Expiration Time. If the Company is obligated to purchase shares pursuant to any
such tender or exchange offer, but the Company is permanently prevented by
applicable law from effecting any such purchases or all such purchases are
rescinded, the Conversion Rate shall again be adjusted to be the Conversion Rate
that would then be in effect if such tender or exchange offer had not been made.
(g) In case of a tender or exchange offer made by a Person other
than the Company or any Subsidiary for an amount that increases the offeror's
ownership of Common Stock to more than twenty-five percent (25%) of the Common
Stock outstanding and shall involve the payment by such Person of consideration
per share of Common Stock having a Fair Market Value (as determined by the Board
of Directors, whose determination shall be conclusive, and described in a
resolution of the Board of Directors) that as of the last time (the "Offer
Expiration Time") tenders or exchanges may be made pursuant to such tender or
exchange offer (as it shall have been amended) exceeds the Closing Price of a
share of Common Stock on the Trading Day next succeeding the Offer Expiration
Time, and in which, as of the Offer Expiration Time the Board of Directors is
not recommending rejection of the offer, the Conversion Rate shall be increased
so that the same shall equal the rate determined by multiplying the Conversion
Rate in effect immediately prior to the Offer Expiration Time by a fraction
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(i) the numerator of which shall be the sum of (x) the Fair
Market Value (determined as aforesaid) of the aggregate consideration payable to
stockholders based on the acceptance (up to any maximum specified in the terms
of the tender or exchange offer) of all shares validly tendered or exchanged and
not withdrawn as of the Offer Expiration Time (the shares deemed so accepted, up
to any such maximum, being referred to as the "Accepted Purchased Shares") and
(y) the product of the number of shares of Common Stock outstanding (less any
Accepted Purchased Shares) at the Offer Expiration Time and the Closing Sale
Price of a share of Common Stock on the Trading Day next succeeding the Offer
Expiration Time, and
(ii) the denominator of which shall be the number of shares
of Common Stock outstanding (including any tendered or exchanged shares) at the
Offer Expiration Time multiplied by the Closing Sale Price of a share of Common
Stock on the Trading Day next succeeding the Offer Expiration Time,
such adjustment to become effective immediately prior to the opening of
business on the day following the Offer Expiration Time. If such Person is
obligated to purchase shares pursuant to any such tender or exchange offer, but
such Person is permanently prevented by applicable law from effecting any such
purchases or all such purchases are rescinded, the Conversion Rate shall again
be adjusted to be the Conversion Rate that would then be in effect if such
tender or exchange offer had not been made. Notwithstanding the foregoing, the
adjustment described in this Section 16.05(g) shall not be made if, as of the
Offer Expiration Time, the offering documents with respect to such offer
disclose a plan or intention to cause the Company to engage in any transaction
described in Article 13.
(h) For purposes of this Section 16.05, the following terms shall
have the meaning indicated:
(i) "Current Market Price" shall mean the average of the
daily Closing Sale Prices per share of Common Stock for the ten consecutive
Trading Days selected by the Company commencing no more than 30 Trading Days
before and ending not later than the earlier of such date of determination and
the day before the "ex" date with respect to the issuance, distribution,
subdivision or combination requiring such computation immediately prior to the
date in question. For purpose of this paragraph, the term "ex" date, (1) when
used with respect to any issuance or distribution, means the first date on which
the Common Stock trades, regular way, on the relevant exchange or in the
relevant market from which the Closing Sale Price was obtained without the right
to receive such issuance or distribution, and (2) when used with 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.
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If another issuance, distribution, subdivision or combination to which
Section 16.05 applies occurs during the period applicable for calculating
"Current Market Price" pursuant to the definition in the preceding paragraph,
"Current Market Price" shall be calculated for such period in a manner
determined by the Board of Directors to reflect the impact of such issuance,
distribution, subdivision or combination on the Closing Sale Price of the Common
Stock during such period.
(ii) "Fair Market Value" shall mean the amount which a
willing buyer would pay a willing seller in an arm's-length transaction.
(iii) "Record Date" shall mean, with respect to any
dividend, distribution or other transaction or event in which the holders of
Common Stock have the right to receive any cash, securities or other property or
in which the Common Stock (or other applicable security) is exchanged for or
converted into any combination of cash, securities or other property, the date
fixed for determination of stockholders entitled to receive such cash,
securities or other property (whether such date is fixed by the Board of
Directors or by statute, contract or otherwise).
(iv) "Trading Day" shall mean (x) if the applicable security
is quoted on the Nasdaq Stock Market, a day on which trades may be made thereon
or (y) if the applicable security is listed or admitted for trading on the New
York Stock Exchange or another national securities exchange, a day on which the
New York Stock Exchange or another national securities exchange is open for
business or (z) if the applicable security is not so listed, admitted for
trading or quoted, any day other than a Saturday or Sunday or a day on which
banking institutions in the State of New York are authorized or obligated by law
or executive order to close.
(i) The Company may make such increases in the Conversion Rate,
in addition to those required by Section 16.05(a), (b), (c), (d), (e), (f) or
(g) as the Board of Directors considers to be advisable to avoid or diminish any
income tax to holders of Common Stock or rights to purchase Common Stock
resulting from any dividend or distribution of stock (or rights to acquire
stock) or from any event treated as such for income tax purposes.
To the extent permitted by applicable law, the Company from time to
time may increase the Conversion Rate by any amount for any period of time if
the period is at least twenty (20) days, the increase is irrevocable during the
period and the Board of Directors shall have made a determination that such
increase would be in the best interests of the Company, which determination
shall be conclusive. Whenever the Conversion Rate is increased pursuant to the
preceding sentence, the Company shall mail to holders of record of the
Debentures a notice of the increase at least fifteen (15) days prior to the date
the increased Conversion Rate takes effect, and such notice shall state the
increased Conversion Rate and the period during which it will be in effect.
(j) No adjustment in the Conversion Rate shall be required unless
such adjustment would require an increase or decrease of at least one percent
(1%) in such rate; provided that any adjustments that by reason of this Section
16.05(j) are not required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations under this Article 16
shall be made by the Company and shall be made to the nearest cent or to the
nearest one-ten thousandth (1/10,000) 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 or for any issuance of
Common Stock or convertible or exchangeable securities or rights to purchase
Common Stock or convertible or exchangeable securities. To the extent the
Debentures become convertible into cash, assets, property or securities (other
than capital stock of the Company), no adjustment need be made thereafter as to
the cash, assets, property or such securities. Interest will not accrue on any
cash into which the Debentures are convertible.
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(k) Whenever the Conversion Rate is adjusted as herein provided,
the Company shall promptly file with the Trustee and any conversion agent other
than the Trustee an Officers' Certificate setting forth the Conversion Rate
after such adjustment and setting forth a brief statement of the facts requiring
such adjustment. Unless and until a Responsible Officer of the Trustee shall
have received such Officers' Certificate, the Trustee shall not be deemed to
have knowledge of any adjustment of the Conversion Rate and may assume that the
last Conversion Rate of which it has knowledge is still in effect. Promptly
after delivery of such certificate, the Company shall prepare a notice of such
adjustment of the Conversion Rate setting forth the adjusted Conversion Rate and
the date on which each adjustment becomes effective and shall mail such notice
of such adjustment of the Conversion Rate to the holder of each Debenture at his
last address appearing on the Debenture Register provided for in Section 2.05 of
this Indenture, within twenty (20) days after execution thereof. Failure to
deliver such notice shall not affect the legality or validity of any such
adjustment.
(l) In any case in which this Section 16.05 provides that an
adjustment shall become effective immediately after (1) a record date or Record
Date for an event, (2) the date fixed for the determination of stockholders
entitled to receive a dividend or distribution pursuant to Section 16.05(a), (3)
a date fixed for the determination of stockholders entitled to receive rights or
warrants pursuant to Section 16.05(b), (4) the Expiration Time for any tender or
exchange offer pursuant to Section 16.05(f), or (5) the Offer Expiration Time
for a tender or exchange offer pursuant to Section 16.05(g)(i) (each a
"Determination Date"), the Company may elect to defer until the occurrence of
the applicable Adjustment Event (as hereinafter defined) (x) issuing to the
holder of any Debenture converted after such Determination Date and before the
occurrence of such Adjustment Event, the additional shares of Common Stock or
other securities issuable upon such conversion by reason of the adjustment
required by such Adjustment Event over and above the Common Stock issuable upon
such conversion before giving effect to such adjustment and (y) paying to such
holder any amount in cash in lieu of any fraction pursuant to Section 16.03. For
purposes of this Section 16.05(l), the term "Adjustment Event" shall mean:
(i) in any case referred to in clause (1) hereof, the
occurrence of such event,
(ii) in any case referred to in clause (2) hereof, the date
any such dividend or distribution is paid or made,
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(iii) in any case referred to in clause (3) hereof, the date
of expiration of such rights or warrants, and
(iv) in any case referred to in clause (4) or clause (5)
hereof, the date a sale or exchange of Common Stock pursuant to such tender or
exchange offer is consummated and becomes irrevocable.
(m) For purposes of this Section 16.05, the number of shares of
Common Stock at any time outstanding shall not include shares held in the
treasury of the Company but shall include shares issuable in respect of scrip
certificates issued in lieu of fractions of shares of Common Stock. The Company
will not pay any dividend or make any distribution on shares of Common Stock
held in the treasury of the Company.
Section 16.06 Effect of Reclassification, Consolidation, Merger or
Sale. If any of the following events occur, namely (i) any reclassification or
change of the outstanding shares of Common Stock (other than a subdivision or
combination to which Section 16.05(c) applies), (ii) any consolidation, merger
or combination of the Company with another Person as a result of which holders
of Common Stock shall be entitled to receive stock, other securities or other
property or assets (including cash) with respect to or in exchange for such
Common Stock, or (iii) any sale or conveyance of all or substantially all of the
properties and assets of the Company to any other Person as a result of which
holders of Common Stock shall be entitled to receive stock, other securities or
other property or assets (including cash) with respect to or in exchange for
such Common Stock, then the Company or the successor or purchasing Person, as
the case may be, shall execute with the Trustee a supplemental indenture (which
shall comply with the Trust Indenture Act as in force at the date of execution
of such supplemental indenture) providing that each Debenture shall be
convertible into the kind and amount of shares of stock, other securities or
other property or assets (including cash) (the "reference property") receivable
upon such reclassification, change, consolidation, merger, combination, sale or
conveyance by a holder of a number of shares of Common Stock issuable upon
conversion of such Debentures (assuming, for such purposes, a sufficient number
of authorized shares of Common Stock are available to convert all such
Debentures) immediately prior to such reclassification, change, consolidation,
merger, combination, sale or conveyance. In the event holders of Common Stock
have the opportunity to elect the form of consideration to be received in such
reclassification, change, consolidation, merger, combination, sale or
conveyance, the Company will make adequate provision whereby holders of the
Debentures shall have the opportunity, on a timely basis, to determine the form
of consideration into which all of the Debentures, treated as a single class,
shall be convertible. Such determination shall be based on the blended, weighted
average of elections made by the holders of the Debentures who participate in
such determination and shall be subject to any limitations to which all of the
holders of Common Stock are subject to, such as pro rata reductions applicable
to any portion of the consideration payable. Appropriate provisions will be
made, as determined in good faith by the Company's Board of Directors so that,
at and after the effective time of the transaction, the principal return payable
upon conversion of the Debentures will continue to be payable in cash (instead
of reference property), the Daily Conversion Value and the Daily Share Amount
will be calculated based on the fair value of the reference property, and the
Daily Share Amount will be payable in reference property. Such supplemental
indenture shall provide for adjustments which shall be as nearly equivalent as
may be practicable to the adjustments provided for in this Article 16.
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The Company shall cause notice of the execution of such supplemental
indenture to be mailed to each holder of Debentures, at its address appearing on
the Debenture Register provided for in Section 2.05 of this Indenture, within
twenty (20) days after execution thereof. Failure to deliver such notice shall
not affect the legality or validity of such supplemental indenture.
The above provisions of this Section shall similarly apply to
successive reclassifications, changes, consolidations, mergers, combinations,
sales and conveyances.
If this Section 16.06 applies to any event or occurrence, Section 16.05
shall not apply.
Section 16.07 Taxes on Shares Issued. The issue of stock certificates
on conversions of Debentures shall be made without charge to the converting
Debentureholder for any documentary, stamp or similar issue or transfer tax in
respect of the issue thereof. The Company shall not, however, be required to pay
any such tax which may be payable in respect of any transfer involved in the
issue and delivery of stock in any name other than that of the holder of any
Debenture converted, and the Company shall not be required to issue or deliver
any such stock certificate unless and until the Person or Persons requesting the
issue thereof shall have paid to the Company the amount of such tax or shall
have established to the satisfaction of the Company that such tax has been paid.
Section 16.08 Reservation of Shares, Shares to Be Fully Paid;
Compliance with Governmental Requirements; Listing of Common Stock. The Company
shall provide, free from preemptive rights, out of its authorized but unissued
shares or shares held in treasury, sufficient shares of Common Stock to provide
for the conversion of the Debentures from time to time as such Debentures are
presented for conversion.
Before taking any action which would cause an adjustment increasing the
Conversion Rate to an amount that would cause the Conversion Price to be reduced
below the then par value, if any, of the shares of Common Stock issuable upon
conversion of the Debentures, the Company will take all corporate action which
may, in the opinion of its counsel, be necessary in order that the Company may
validly and legally issue shares of such Common Stock at such adjusted
Conversion Rate.
The Company covenants that all shares of Common Stock which may be
issued upon conversion of Debentures will upon issue be fully paid and
non-assessable by the Company and free from all taxes, liens and charges with
respect to the issue thereof.
The Company covenants that, if any shares of Common Stock to be
provided for the purpose of conversion of Debentures hereunder require
registration with or approval of any governmental authority under any federal or
state law before such shares may be validly issued upon conversion, the Company
will in good faith and as expeditiously as possible, to the extent then
permitted by the rules and interpretations of the Commission (or any successor
thereto), endeavor to secure such registration or approval, as the case may be.
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The Company further covenants that, if at any time the Common Stock
shall be listed on the Nasdaq Stock Market or any other national securities
exchange or automated quotation system, the Company will, if permitted by the
rules of such exchange or automated quotation system, list and keep listed, so
long as the Common Stock shall be so listed on such exchange or automated
quotation system, all Common Stock issuable upon conversion of the Debenture;
provided that if the rules of such exchange or automated quotation system permit
the Company to defer the listing of such Common Stock until the first conversion
of the Debentures into Common Stock in accordance with the provisions of this
Indenture, the Company covenants to list such Common Stock issuable upon
conversion of the Debentures in accordance with the requirements of such
exchange or automated quotation system at such time.
Section 16.09 Responsibility of Trustee. The Trustee and any other
conversion agent shall not at any time be under any duty or responsibility to
any holder of Debentures to determine the Conversion Rate or whether any facts
exist which may require any adjustment of the Conversion Rate, or with respect
to the nature or extent or calculation of any such adjustment when made, or with
respect to the method employed, or herein or in any supplemental indenture
provided to be employed, in making the same. The Trustee and any other
conversion agent shall not be accountable with respect to the validity or value
(or the kind or amount) of any shares of Common Stock, or of any securities or
property, which may at any time be issued or delivered upon the conversion of
any Debenture; and the Trustee and any other conversion agent make no
representations with respect thereto. Neither the Trustee nor any conversion
agent shall be responsible for any failure of the Company to issue, transfer or
deliver any shares of Common Stock or stock certificates or other securities or
property or cash upon the surrender of any Debenture for the purpose of
conversion or to comply with any of the duties, responsibilities or covenants of
the Company contained in this Article 16. Without limiting the generality of the
foregoing, neither the Trustee nor any conversion agent shall be under any
responsibility to determine the correctness of any provisions contained in any
supplemental indenture entered into pursuant to Section 16.06 relating either to
the kind or amount of shares of stock or securities or property (including cash)
receivable by Debentureholders upon the conversion of their Debentures after any
event referred to in such Section 16.06 or to any adjustment to be made with
respect thereto, but, subject to the provisions of Section 9.01, may accept as
conclusive evidence of the correctness of any such provisions, and shall be
protected in relying upon, the Officers' Certificate (which the Company shall be
obligated to file with the Trustee prior to the execution of any such
supplemental indenture) with respect thereto.
Section 16.10 Notice to Holders Prior to Certain Actions. In case the
Company shall declare a dividend (or any other distribution) on its Common Stock
that would require an adjustment in the Conversion Rate pursuant to Section
16.05; or
(a) the Company shall authorize the granting to the holders of
all or substantially all of its Common Stock of rights or warrants to subscribe
for or purchase any share of any class or any other rights or warrants; or
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(b) of any reclassification or reorganization of the Common Stock
of the Company (other than a subdivision or combination of its outstanding
Common Stock, or a change in par value, or from par value to no par value, or
from no par value to par value), or of any consolidation or merger to which the
Company is a party and for which approval of any stockholders of the Company is
required, or of the sale or transfer of all or substantially all of the assets
of the Company; or
(c) of the voluntary or involuntary dissolution, liquidation or
winding up of the Company;
the Company shall cause to be filed with the Trustee and to be mailed
to each holder of Debentures at his address appearing on the Debenture Register
provided for in Section 2.05 of this Indenture, as promptly as possible but in
any event at least ten (10) days prior to the applicable date hereinafter
specified, a notice stating (x) the date on which a record is to be taken for
the purpose of such dividend, distribution or rights or warrants, or, if a
record is not to be taken, the date as of which the holders of Common Stock of
record to be entitled to such dividend, distribution or rights are to be
determined, or (y) the date on which such reclassification, consolidation,
merger, sale, transfer, dissolution, liquidation or winding up is expected to
become effective or occur, and the date as of which it is expected that holders
of Common Stock of record shall be entitled to exchange their Common Stock for
securities or other property deliverable upon such reclassification,
consolidation, merger, sale, transfer, dissolution, liquidation or winding up.
Failure to give such notice, or any defect therein, shall not affect the
legality or validity of such dividend, distribution, reclassification,
consolidation, merger, sale, transfer, dissolution, liquidation or winding up.
Section 16.11 Stockholder Rights Plans. If the rights provided for in
the Company's stockholder rights agreement dated March 18, 2002 or in any future
rights plan adopted by the Company have separated from the shares of Common
Stock in accordance with the provisions of the applicable stockholder rights
agreement so that the holders of the Debentures would not be entitled to receive
any rights in respect of Common Stock issuable upon conversion of the
Debentures, the conversion rate will be adjusted as if the Company distributed
to all holders of Common Stock shares of the Company's capital stock, evidences
of indebtedness or assets (including securities but excluding rights or warrants
to purchase Common Stock issued to all holders of Common Stock, Common Stock
issued as a dividend or distribution on Common Stock and cash distributions),
subject to readjustment in the event of the expiration, termination or
redemption of the rights. In lieu of any such adjustment, the Company may amend
such applicable stockholder rights agreement to provide that upon conversion of
the debentures the holders will receive, in addition to the Common Stock
Issuable upon such conversion, the rights which would have attached to such
Common Stock if the rights had not become separated from the Common Stock under
such applicable stockholder rights agreement.
Section 16.12 Payment of Cash in Lieu of Common Stock. (a) Unless the
Company has made a Physical Settlement Election, holders surrendering Debentures
for conversion shall receive for each $1,000 principal amount of Debentures
surrendered for conversion: (A) cash in an amount equal to the lesser of (1)
$1,000 and (2) the Conversion Value; and, in addition to amounts distributed
pursuant to (A), (B) if the Conversion Value is greater than $1,000, a number of
shares of Common Stock equal to the sum of the Daily Share Amounts for each of
the twenty consecutive Trading Days in the Conversion Reference Period,
appropriately adjusted to reflect stock splits, stock dividends, combinations or
similar events occurring during the Conversion Reference Period, subject to the
Company's right to deliver cash in lieu of all or a portion of such shares as
set forth in Section 16.12(b). The Company will deliver such cash and any shares
of Common Stock, together with any cash payable for fractional shares, to such
holder in accordance with Section 16.01.
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(b) The Company may elect to pay cash to the holders of
Debentures surrendered for conversion in lieu of all or a portion of the Common
Stock otherwise issuable pursuant to Section 16.12(a)(B). In such event, on any
day prior to the first Trading Day of the applicable Conversion Reference
Period, the Company will specify a percentage of the Daily Share Amount that
will be settled in cash (the "Cash Percentage") and the amount of cash that the
Company will pay in respect of each Trading Day in the applicable Conversion
Reference Period will equal the product of: (1) the Cash Percentage, (2) the
Daily Share Amount for such Trading Day and (3) the Closing Sale Price of the
Common Stock for such Trading Day (provided that after the consummation of a
Fundamental Change in which the consideration is comprised entirely of cash, the
amount used in this clause (3) will be the cash price per share received by
holders of the Common Stock in such Fundamental Change). The number of shares
that the Company shall deliver in respect of each Trading Day in the applicable
Conversion Reference Period will be a percentage of the Daily Share Amount equal
to 100% minus the Cash Percentage. Upon making a determination that a percentage
of the Daily Share Amount will be settled in cash, the Company shall promptly
issue a press release and disclose such information on its website prior to the
first Trading Day of the applicable Conversion Reference Period. If the Company
does not specify a Cash Percentage by the start of the applicable Conversion
Reference Period, the Company shall settle 100% of the Daily Share Amount for
each Trading Day in the applicable Conversion Reference Period with shares of
Common Stock; provided, however, that the Company shall pay cash in lieu of
fractional shares otherwise issuable upon conversion of Debentures.
(c) For the purposes of Sections 16.12(a) and (b), in the event
that any of Conversion Value, Daily Share Amounts or Volume Weighted Average
Price cannot be determined for all portions of the Conversion Reference Period,
the Company's Board of Directors shall in good faith determine the values
necessary to calculate the Conversion Value, Daily Share Amounts and Volume
Weighted Average Price, as applicable.
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Section 16.13 Physical Settlement Election.(a) (a) At any time prior to
June 15, 2013, the Company may make an irrevocable election to provide, upon the
conversion of outstanding Debentures, in lieu of providing cash and shares as
provided by Section 16.12, shares of Common Stock equal to the Conversion Rate
for each $1,000 principal amount of Debentures converted (and the amount of any
cash in lieu of fractional shares pursuant to Section 16.03) (a "Physical
Settlement Election"). In the event that the Company makes a Physical Settlement
Election, the Company shall promptly issue a press release and mail to holders
and file with the Trustee a notice of such election.
(b) Notwithstanding anything contained in Section 16.01 to the
contrary, and subject to Section 3.05, upon making a Physical Settlement
Election, any Debenture or portion thereof that is an integral multiple of
$1,000 principal amount may be converted at the option of the Debentureholder
into fully paid and nonassessable shares (calculated as to each conversion to
the nearest 1/100th of a share) of Common Stock at any time prior to the close
of business on the Business Day immediately preceding June 15, 2013 or such
earlier date set forth in this Article 16 at the Conversion Rate in effect at
such time.
(c) Prior to making a Physical Settlement Election, the Company
may irrevocably waive the right to make a Physical Settlement Election in the
future with respect to the Debentures by delivering to the Trustee a notice of
such election (a "Waiver Election"). Any Waiver Election shall irrevocably waive
the Company's ability to make a Physical Settlement Election at any time in the
future with respect to the Debentures. A Waiver Election may not be made if the
Company has previously made a Physical Settlement Election.
ARTICLE 17
MISCELLANEOUS PROVISIONS
Section 17.01 Provisions Binding on Company's Successors. All the
covenants, stipulations, promises and agreements by the Company contained in
this Indenture shall bind its successors and assigns whether so expressed or
not.
Section 17.02 Official Acts by Successor Corporation. Any act or
proceeding by any provision of this Indenture authorized or required to be done
or performed by any board, committee or officer of the Company shall and may be
done and performed with like force and effect by the like board, committee or
officer of any Person that shall at the time be the lawful sole successor of the
Company.
Section 17.03 Addresses For Notices, Etc. Any notice or demand which by
any provision of this Indenture is required or permitted to be given or served
by the Trustee or by the holders of Debentures on the Company shall be deemed to
have been sufficiently given or made, for all purposes, if given or served by
being deposited postage prepaid by registered or certified mail in a post office
letter box or sent by telecopier transmission addressed as follows: to
Greatbatch, Inc., 9645 Wehrle Drive, Clarence, New York 14031, Telecopier No.:
(716) 759-5614, Attention: Treasurer. Any notice, direction, request or demand
hereunder to or upon the Trustee shall be deemed to have been sufficiently given
or made, for all purposes, if given or served by being deposited, postage
prepaid, by registered or certified mail in a post office letter box or sent by
telecopier transmission addressed as follows: Manufacturers and Traders Trust
Company, One M&T Plaza, Buffalo, New York 14203, Telecopier No.: (716) 842-4474,
Attention: Corporate Trust Department.
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The Trustee, by notice to the Company, may designate additional or
different addresses for subsequent notices or communications.
Any notice or communication mailed to a Debentureholder shall be mailed
to him by first class mail, postage prepaid, at his address as it appears on the
Debenture Register and shall be sufficiently given to him if so mailed within
the time prescribed.
Failure to mail a notice or communication to a Debentureholder or any
defect in it shall not affect its sufficiency with respect to other
Debentureholders. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it.
Section 17.04 Governing Law. This Indenture and each Debenture shall be
deemed to be a contract made under the laws of the State of New York, and for
all purposes shall be construed in accordance with the laws of the State of New
York, without regard to conflicts of laws principles thereof.
Section 17.05 Evidence of Compliance with Conditions Precedent,
Certificates to Trustee. Upon any application or demand by the Company to the
Trustee to take any action under any of the provisions of this Indenture, the
Company shall furnish to the Trustee an Officers' Certificate stating that all
conditions precedent, if any, provided for in this Indenture relating to the
proposed action have been complied with, and an Opinion of Counsel stating that,
in the opinion of such counsel, all such conditions precedent have been complied
with.
Each certificate or opinion provided for in this Indenture and
delivered to the Trustee with respect to compliance with a condition or covenant
provided for in this Indenture shall include: (1) a statement that the person
making such certificate or opinion has read such covenant or condition; (2) a
brief statement as to the nature and scope of the examination or investigation
upon which the statement or opinion contained in such certificate or opinion is
based; (3) a statement that, in the opinion of such person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and (4) a statement as to whether or not, in the opinion of such
person, such condition or covenant has been complied with.
Section 17.06 Legal Holidays. In any case in which the date of maturity
of interest on or principal of the Debentures or the redemption date of any
Debenture will not be a Business Day, then payment of such interest on or
principal of the Debentures need not be made on such date, but may be made on
the next succeeding Business Day with the same force and effect as if made on
the date of maturity or the redemption date, and no interest shall accrue for
the period from and after such date.
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Section 17.07 Trust Indenture Act. This Indenture is hereby made
subject to, and shall be governed by, the provisions of the Trust Indenture Act
required to be part of and to govern indentures qualified under the Trust
Indenture Act; provided that unless otherwise required by law, notwithstanding
the foregoing, this Indenture and the Debentures issued hereunder shall not be
subject to the provisions of subsections (a)(1), (a)(2), and (a)(3) of Section
314 of the Trust Indenture Act as now in effect or as hereafter amended or
modified; provided further that this Section 17.07 shall not require this
Indenture or the Trustee to be qualified under the Trust Indenture Act prior to
the time such qualification is in fact required under the terms of the Trust
Indenture Act, nor shall it constitute any admission or acknowledgment by any
party to the Indenture that any such qualification is required prior to the time
such qualification is in fact required under the terms of the Trust Indenture
Act. If any provision hereof limits, qualifies or conflicts with another
provision hereof which is required to be included in an indenture qualified
under the Trust Indenture Act, such required provision shall control.
Section 17.08 No Security Interest Created. Nothing in this Indenture
or in the Debentures, expressed or implied, shall be construed to constitute a
security interest under the Uniform Commercial Code or similar legislation, as
now or hereafter enacted and in effect, in any jurisdiction in which property of
the Company or its subsidiaries is located.
Section 17.09 Benefits of Indenture. Nothing in this Indenture or in
the Debentures, express or implied, shall give to any Person, other than the
parties hereto, any paying agent, any authenticating agent, any Debenture
Registrar and their successors hereunder and the holders of Debentures any
benefit or any legal or equitable right, remedy or claim under this Indenture.
Section 17.10 Table of Contents, Headings, Etc. The table of contents
and the titles and headings of the Articles and Sections of this Indenture have
been inserted for convenience of reference only, are not to be considered a part
hereof, and shall in no way modify or restrict any of the terms or provisions
hereof.
Section 17.11 Authenticating Agent. The Trustee may appoint an
authenticating agent that shall be authorized to act on its behalf, and subject
to its direction, in the authentication and delivery of Debentures in connection
with the original issuance thereof and transfers and exchanges of Debentures
hereunder, including under Sections 2.04, 2.05, 2.06, 2.07, 3.03 and 3.05, as
fully to all intents and purposes as though the authenticating agent had been
expressly authorized by this Indenture and those Sections to authenticate and
deliver Debentures. For all purposes of this Indenture, the authentication and
delivery of Debentures by the authenticating agent shall be deemed to be
authentication and delivery of such Debentures "by the Trustee" and a
certificate of authentication executed on behalf of the Trustee by an
authenticating agent shall be deemed to satisfy any requirement hereunder or in
the Debentures for the Trustee's certificate of authentication. Such
authenticating agent shall at all times be a Person eligible to serve as trustee
hereunder pursuant to Section 9.09.
87
Any corporation into which any authenticating agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, consolidation or conversion to which any authenticating agent
shall be a party, or any corporation succeeding to the corporate trust business
of any authenticating agent, shall be the successor of the authenticating agent
hereunder, if such successor corporation is otherwise eligible under this
Section 17.11, without the execution or filing of any paper or any further act
on the part of the parties hereto or the authenticating agent or such successor
corporation.
Any authenticating agent may at any time resign by giving written
notice of resignation to the Trustee and to the Company. The Trustee may at any
time terminate the agency of any authenticating agent by giving written notice
of termination to such authenticating agent and to the Company. Upon receiving
such a notice of resignation or upon such a termination, or in case at any time
any authenticating agent shall cease to be eligible under this Section, the
Trustee shall either promptly appoint a successor authenticating agent or itself
assume the duties and obligations of the former authenticating agent under this
Indenture and, upon such appointment of a successor authenticating agent, if
made, shall give written notice of such appointment of a successor
authenticating agent to the Company and shall mail notice of such appointment of
a successor authenticating agent to all holders of Debentures as the names and
addresses of such holders appear on the Debenture Register.
The Company agrees to pay to the authenticating agent from time to time
such reasonable compensation for its services as shall be agreed upon in writing
between the Company and the authenticating agent.
The provisions of Sections 9.02, 9.03, 9.04 and 10.03 and this Section
17.11 shall be applicable to any authenticating agent.
Section 17.12 Execution in Counterparts. This Indenture may be executed
in any number of counterparts, each of which shall be an original, but such
counterparts shall together constitute but one and the same instrument.
Section 17.13 Severability. In case any provision in this Indenture or
in the Debentures shall be invalid, illegal or unenforceable, then (to the
extent permitted by law) the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
88
Manufacturers and Traders Trust Company hereby accepts the trusts in
this Indenture declared and provided, upon the terms and conditions herein above
set forth.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed.
GREATBATCH, INC.
By:
--------------------------------------------------
Name:
Title:
MANUFACTURERS AND TRADERS TRUST COMPANY, as Trustee
By:
--------------------------------------------------
Name:
Title:
89
SCHEDULE A
Share Price
- -----------------------------------------------------------------------------------------------------------------------------
Effective Date $26.98 $30.00 $35.00 $40.00 $45.00 $50.00 $55.00 $60.00 $70.00 $80.00 $90.00
- -------------- ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
March 28, 2007 8.2 6.7 4.9 3.7 2.9 2.3 1.9 1.5 1.1 0.8 0.5
June 15, 2007 8.2 6.7 4.9 3.7 2.8 2.2 1.8 1.5 1.0 0.7 0.5
June 15, 2008 8.2 6.6 4.6 3.4 2.6 2.0 1.6 1.3 0.9 0.6 0.4
June 15, 2009 7.7 6.0 4.1 2.9 2.1 1.6 1.3 1.0 0.6 0.4 0.3
June 15, 2010 7.4 5.5 3.6 2.4 1.6 1.2 0.9 0.7 0.4 0.3 0.2
June 15, 2011 7.0 4.8 2.7 1.6 1.0 0.6 0.4 0.3 0.2 0.1 0.1
June 15, 2012 6.3 3.3 0.3 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
June 15, 2013 6.3 3.3 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
- -----------------------------------------------------------------------------------------------------------------------------
EXHIBIT A
[Include only for Global Debentures:]
[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) (THE
"DEPOSITARY", WHICH TERM INCLUDES ANY SUCCESSOR DEPOSITARY FOR THE CERTIFICATES)
TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH
OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY (AND
ANY PAYMENT HEREIN IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY), ANY TRANSFER, PLEDGE, OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH
AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
[Include only for Debentures that are Restricted Securities]
[THE DEBENTURE EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY
STATE SECURITIES LAWS AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT AS SET
FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER (1)
REPRESENTS THAT IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT) OR AN "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501 OF
REGULATION D UNDER THE SECURITIES ACT); (2) AGREES THAT IT WILL NOT, PRIOR TO
EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THIS DEBENTURE UNDER
RULE 144(K) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION), RESELL OR
OTHERWISE TRANSFER THIS DEBENTURE OR THE COMMON STOCK ISSUABLE UPON CONVERSION
OF THIS DEBENTURE EXCEPT (A) TO GREATBATCH, INC. OR ANY SUBSIDIARY THEREOF, (B)
TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE
SECURITIES ACT, (C) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE
144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR (D) PURSUANT TO A REGISTRATION
STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT (AND WHICH
CONTINUES TO BE EFFECTIVE AT THE TIME OF SUCH TRANSFER); (3) PRIOR TO SUCH
TRANSFER (OTHER THAN A TRANSFER PURSUANT TO CLAUSE 2(D) ABOVE), IT WILL FURNISH
TO MANUFACTURERS AND TRADERS TRUST COMPANY, AS TRUSTEE (OR A SUCCESSOR TRUSTEE,
AS APPLICABLE), SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS THE
TRUSTEE MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE
PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT; AND (4) AGREES THAT IT WILL
DELIVER TO EACH PERSON TO WHOM THIS DEBENTURE IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF
THIS DEBENTURE PRIOR TO THE EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES
OF THIS DEBENTURE UNDER RULE 144(k) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR
PROVISION), THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE REVERSE
HEREOF RELATING TO THE MANNER FO SUCH TRANSFER AND SUBMIT THIS CERTIFICATE TO
MANUFACTURERS AND TRADERS TRUST COMPANY, AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS
APPLICABLE). THIS LEGEND WILL BE REMOVED UPON THE EARLIER OF THE TRANSFER OF THE
DEBENTURE EVIDENCED HEREBY PURSUANT TO CLAUSE 2(D) ABOVE OR UPON ANY TRANSFER OF
THIS DEBENTURE UNDER RULE 144(k) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR
PROVISION). THE INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE
TO REGISTER ANY TRANSFER OF THIS DEBENTURE IN VIOLATION OF THE FOREGOING
RESTRICTION.]
THIS DEBENTURE WAS ISSUED WITH ORIGINAL ISSUE DISCOUNT FOR U.S. FEDERAL
INCOME TAX PURPOSES. FOR PURPOSES OF SECTIONS 1273 AND 1275 OF THE INTERNAL
REVENUE CODE, THE ISSUE PRICE OF EACH DEBENTURE IS $950 PER $1,000 OF PRINCIPAL
AMOUNT, THE ISSUE DATE IS MARCH 28, 2007 AND THE COMPARABLE YIELD IS 8.4588%,
COMPOUNDED SEMI-ANNUALLY. HOLDERS OF THIS DEBENTURE MAY OBTAIN INFORMATION
REGARDING THE AMOUNT OF ORIGINAL ISSUE DISCOUNT, YIELD TO MATURITY AND THE
PROJECTED PAYMENT SCHEDULE FOR THIS DEBENTURE BY SUBMITTING A WRITTEN REQUEST
FOR SUCH INFORMATION TO: GREATBATCH, INC., 9645 WEHRLE DRIVE, CLARENCE, NEW
YORK, 14031, ATTN: TREASURER.
A-2
GREATBATCH, INC.
2 1/4% CONVERTIBLE SUBORDINATED DEBENTURE DUE 2013
CUSIP: 39153LAA4
For Global Debentures only
$
-------------
Greatbatch, Inc., a corporation duly organized and validly existing
under the laws of the State of Delaware (herein called the "Company", which term
includes any successor corporation under the Indenture referred to on the
reverse hereof), for value received hereby promises to pay to [__________], [the
principal sum of _____________ DOLLARS] [the principal sum set forth on Schedule
I hereto] on June 15, 2013 at the office or agency of the Company maintained for
that purpose in accordance with the terms of the Indenture, in such coin or
currency of the United States of America as at the time of payment shall be
legal tender for the payment of public and private debts, and to pay interest,
semiannually on June 15 and December 15 of each year, commencing June 15, 2007,
on said principal sum at said office or agency, in like coin or currency, at the
rate per annum of 2 1/4%, from the June 15 or December 15, as the case may be,
next preceding the date of this Debenture to which interest has been paid or
duly provided for, unless the date hereof is a date to which interest has been
paid or duly provided for, in which case from the date of this Debenture, or
unless no interest has been paid or duly provided for on the Debentures, in
which case from March 28, 2007 until payment of said principal sum has been made
or duly provided for. Notwithstanding the foregoing, if the date hereof is after
any June 1 or December 1, as the case may be, and before the following June 15
or December 15, this Debenture shall bear interest from such June 15 or December
15; provided that if the Company shall default in the payment of interest due on
such June 15 or December 15, then this Debenture shall bear interest from the
next preceding June 15 or December 15 to which interest has been paid or duly
provided for or, if no interest has been paid or duly provided for on such
Debenture, from March 28, 2007. Contingent interest, if any, will accrue for any
six month interest period and be payable to holders of this Debenture on the
applicable interest payment date to the person in whose name this Debenture is
registered on the corresponding record date. Except as otherwise provided in the
Indenture, the interest payable on the Debenture pursuant to the Indenture on
any June 15 or December 15 will be paid to the Person entitled thereto as it
appears in the Debenture Register at the close of business on the record date,
which shall be the June 1 or December 1 (whether or not a Business Day) next
preceding such June 15 or December 15, as provided in the Indenture; provided
that any such interest not punctually paid or duly provided for shall be payable
as provided in the Indenture. The Company shall pay interest (i) on any
Debentures in certificated form by check mailed to the address of the Person
entitled thereto as it appears in the Debenture Register or (ii) on any Global
Debenture by wire transfer of immediately available funds to the account of the
Depositary or its nominee.
A-3
The Company promises to pay interest on overdue principal, premium, if
any, and (to the extent that payment of such interest is enforceable under
applicable law) interest at the rate of 3 1/4%, per annum.
Reference is made to the further provisions of this Debenture set forth
on the reverse hereof, including, without limitation, provisions giving the
holder of this Debenture the right to convert this Debenture into Common Stock
of the Company on the terms and subject to the limitations referred to on the
reverse hereof and as more fully specified in the Indenture. Such further
provisions shall for all purposes have the same effect as though fully set forth
at this place.
This Debenture shall be deemed to be a contract made under the laws of
the State of New York, and for all purposes shall be construed in accordance
with and governed by the laws of the State of New York, without regard to
conflicts of laws principles thereof.
This Debenture shall not be valid or become obligatory for any purpose
until the certificate of authentication hereon shall have been manually signed
by the Trustee or a duly authorized authenticating agent under the Indenture.
A-4
IN WITNESS WHEREOF, the Company has caused this Debenture to be duly
executed.
GREATBATCH, INC.
By:
--------------------------------------
By:
--------------------------------------
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Debentures described in the within-named Indenture.
MANUFACTURERS AND TRADERS
TRUST COMPANY, as Trustee
By:
-------------------------------------------------
Authorized Signatory
, or
By:
-------------------------------------------------
As Authenticating Agent
(if different from Trustee)
By:
-------------------------------------------------
Authorized Signatory
A-5
FORM OF REVERSE OF DEBENTURE
GREATBATCH, INC.
2 1/4% CONVERTIBLE SUBORDINATED DEBENTURE DUE 2013
This Debenture is one of a duly authorized issue of Debentures of the
Company, designated as its 2 1/4% Convertible Subordinated Debentures Due 2013
(herein called the "Debentures"), limited in aggregate principal amount to
$[_________] of Initial Debentures (which principal amount may from time to time
be increased or decreased to such other principal amount by adjustments made on
the records of the Trustee in accordance with the below referenced Indenture),
issued and to be issued under and pursuant to an Indenture dated as of March 28,
2007 (herein called the "Indenture"), between the Company and Manufacturers and
Traders Trust Company, as trustee (herein called the "Trustee"), to which
Indenture and all indentures supplemental thereto reference is hereby made for a
description of the rights, limitations of rights, obligations, duties and
immunities thereunder of the Trustee, the Company and the holders of the
Debentures. The Indenture provides that Additional Debentures may be issued
thereunder, if certain conditions are met.
In case an Event of Default shall have occurred and be continuing, the
principal of, premium, if any, and accrued interest, including contingent
interest, if any, on all Debentures may be declared by either the Trustee or the
holders of not less than 25% in aggregate principal amount of the Debentures
then outstanding, and upon said declaration shall become, due and payable, in
the manner, with the effect and subject to the conditions provided in the
Indenture.
The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the holders of at least a majority in aggregate
principal amount of the Debentures at the time outstanding, to execute
supplemental indentures adding any provisions to or changing in any manner or
eliminating any of the provisions of the Indenture or of any supplemental
indenture or modifying in any manner the rights of the holders of the
Debentures; provided that no such supplemental indenture shall (i) extend the
fixed maturity of any Debenture, or reduce the rate or extend the time of
payment of interest, including contingent interest, if any, or Liquidated
Damages, if any, thereon, or reduce the principal amount thereof or premium, if
any, thereon, or reduce any amount payable upon redemption thereof, or impair
the right of any Debentureholder to institute suit for the payment thereof, or
make the principal thereof or interest or premium, if any, thereon payable in
any coin or currency other than that provided in the Debentures, or change the
rights granted to the holders in Section 16.01(d) of the Indenture, or change
the obligation of the Company to redeem any Debenture on a redemption date in a
manner adverse to the holders or change the obligation of the Company to redeem
any Debenture upon the happening of a Fundamental Change in a manner adverse to
the holder of the Debentures, or impair the right to convert the Debentures into
Common Stock subject to the terms set forth in the Indenture, including Section
16.06 thereof, without the consent of the holder of each Debenture so affected,
or modify any of the provisions of Section 12.02 or Section 8.07 thereof, except
to increase any such percentage or to provide that certain other provisions of
the Indenture cannot be modified or waived without the consent of the holder of
each Debenture so affected, or change any obligation of the Company to maintain
an office or agency in the places and for the purposes set forth in Section 6.01
thereof, or reduce the quorum or voting requirements set forth in Article 11 or
(ii) reduce the aforesaid percentage of Debentures, the holders of which are
required to consent to any such supplemental indenture, without the consent of
the holders of all Debentures then outstanding. Subject to the provisions of the
A-6
Indenture, the holders of a majority in aggregate principal amount of the
Debentures at the time outstanding may on behalf of the holders of all of the
Debentures waive any past default or Event of Default under the Indenture and
its consequences except (A) a default in the payment of interest, or any premium
on, or the principal of, any of the Debentures, (B) a failure by the Company to
convert any Debentures into Common Stock of the Company, (C) a default in the
payment of the redemption price pursuant to Article 3 of the Indenture, or (D) a
default in respect of a covenant or provisions of the Indenture which under
Article 12 of the Indenture cannot be modified or amended without the consent of
the holders of each or all Debentures then outstanding or affected thereby. Any
such consent or waiver by the holder of this Debenture (unless revoked as
provided in the Indenture) shall be conclusive and binding upon such holder and
upon all future holders and owners of this Debenture and any Debentures which
may be issued in exchange or substitution hereof, irrespective of whether or not
any notation thereof is made upon this Debenture or such other Debentures.
The indebtedness evidenced by the Debentures is, to the extent and in
the manner provided in the Indenture, expressly subordinated and subject in
right of payment to the prior payment in full of all Senior Indebtedness of the
Company, whether outstanding at the date of the Indenture or thereafter
incurred, and this Debenture is issued subject to the provisions of the
Indenture with respect to such subordination. Each holder of this Debenture, by
accepting the same, agrees to and shall be bound by such provisions and
authorizes the Trustee on its behalf to take such action as may be necessary or
appropriate to effectuate the subordination so provided and appoints the Trustee
his attorney-in-fact for such purpose.
No reference herein to the Indenture and no provision of this Debenture
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of and any premium and
interest, including contingent interest, if any, on this Debenture at the place,
at the respective times, at the rate and in the coin or currency herein
prescribed.
Interest on the Debentures shall be computed on the basis of a 360-day
year of twelve 30-day months.
The Debentures are issuable in fully registered form, without coupons,
in denominations of $1,000 principal amount and any multiple of $1,000. At the
office or agency of the Company referred to on the face hereof, and in the
manner and subject to the limitations provided in the Indenture, without payment
of any service charge but with payment of a sum sufficient to cover any tax,
assessment or other governmental charge that may be imposed in connection with
any registration or exchange of Debentures, Debentures may be exchanged for a
like aggregate principal amount of Debentures of any other authorized
denominations.
At any time on or after June 20, 2012 and prior to maturity, the
Debentures may be redeemed at the option of the Company, in whole or in part,
upon mailing a notice of such redemption not less than 30 days but not more than
60 days before the redemption date to the holders of Debentures at their last
registered addresses, all as provided in the Indenture, at a redemption price
equal to 100% of the principal amount of debentures being redeemed and accrued
and unpaid interest, including contingent interest, if any, to, but excluding,
the redemption date.
A-7
The Company may not give notice of any redemption of the Debentures if
a default in the payment of interest, or premium, if any, on the Debentures has
occurred and is continuing.
The Debentures are not subject to redemption through the operation of
any sinking fund.
If a Fundamental Change occurs at any time prior to maturity of the
Debentures, this Debenture will be redeemable on a Fundamental Change Redemption
Date, 30 days after notice thereof, at the option of the holder of this
Debenture at a redemption price equal to 100% of the principal amount thereof,
together with accrued interest to (but excluding) the redemption date; provided
that if such Fundamental Change Redemption Date falls after a record date and on
or prior the corresponding interest payment date, the interest payable on such
interest payment date shall be paid to the holder of record of this Debenture on
the preceding June 1 or December 1, respectively. The Debentures will be
redeemable in multiples of $1,000 principal amount. The Company shall mail to
all holders of record of the Debentures a notice of the occurrence of a
Fundamental Change and of the redemption right arising as a result thereof on or
before the 10th day after the occurrence of such Fundamental Change. For a
Debenture to be so redeemed at the option of the holder, the Company must
receive at the office or agency of the Company maintained for that purpose in
accordance with the terms of the Indenture, such Debenture with the form
entitled "Option to Elect Repayment Upon a Fundamental Change" on the reverse
thereof duly completed, together with such Debenture, duly endorsed for
transfer, on or before the 30th day after the date of such notice of a
Fundamental Change (or if such 30th day is not a Business Day, the immediately
succeeding Business Day).
Subject to the occurrence of certain events and in compliance with the
provisions of the Indenture, prior to the final maturity date of the Debentures,
the holder hereof has the right, at its option, to convert each $1,000 principal
amount of the Debentures into 28.8219 shares of the Company's Common Stock (a
conversion price of approximately $34.70 per share), as such shares shall be
constituted at the date of conversion and subject to adjustment from time to
time as provided in the Indenture, upon surrender of this Debenture with the
form entitled "Conversion Notice" on the reverse thereof duly completed, to the
Company at the office or agency of the Company maintained for that purpose in
accordance with the terms of the Indenture, or at the option of such holder, the
Corporate Trust Office, and, unless the shares issuable on conversion are to be
issued in the same name as this Debenture, duly endorsed by, or accompanied by
instruments of transfer in form satisfactory to the Company duly executed by,
the holder or by his duly authorized attorney. The Company will notify the
holder thereof of any event triggering the right to convert the Debentures as
specified above in accordance with the Indenture.
No adjustment in respect of interest on any Debenture converted or
dividends on any shares issued upon conversion of such Debenture will be made
upon any conversion except as set forth in the next sentence. If this Debenture
(or portion hereof) is surrendered for conversion during the period from the
close of business on any record date for the payment of interest to the close of
business on the Business Day preceding the following interest payment date and
has not been called for redemption by the Company on a redemption date that
occurs during such period, this Debenture (or portion hereof being converted)
must be accompanied by payment, in immediately available funds or other funds
acceptable to the Company, of an amount equal to the interest otherwise payable
on such interest payment date on the principal amount being converted; provided
A-8
that no such payment shall be required (1) if the Company has specified a
redemption date that is after a record date and prior to the next interest
payment date, (2) if the Company has specified a redemption date following a
fundamental change that is during such period or (3) to the extent of any
overdue interest, if any overdue interest exists at the time of conversion with
respect to such debenture.
No fractional shares will be issued upon any conversion, but an
adjustment and payment in cash will be made, as provided in the Indenture, in
respect of any fraction of a share which would otherwise be issuable upon the
surrender of any Debenture or Debentures for conversion.
Unless the Company has made a Physical Settlement Election pursuant to
Section 16.13 of the Indenture, upon conversion of the Debenture, the holder
shall receive for each $1,000 principal amount of Debentures surrendered for
conversion, cash in an amount equal to the lesser of (i) $1,000 and (ii) the
Conversion Value, and in addition, if the Conversion Value is greater than
$1,000, a number of shares of Common Stock, subject to the Company's right to
deliver cash in lieu of all or a portion of such shares as set forth in the
Indenture.
A Debenture in respect of which a holder is exercising its right to
require redemption upon a Fundamental Change may be converted only if such
holder withdraws its election to exercise either such right in accordance with
the terms of the Indenture.
Any Debentures called for redemption, unless surrendered for conversion
by the holders thereof on or before the close of business on the Business Day
preceding the redemption date, may be deemed to be redeemed from the holders of
such Debentures for an amount equal to the applicable redemption price, together
with accrued but unpaid interest to, but excluding, the date fixed for
redemption, by one or more investment banks or other purchasers who may agree
with the Company (i) to purchase such Debentures from the holders thereof and
convert them into shares of the Company's Common Stock and (ii) to make payment
for such Debentures as aforesaid to the Trustee in trust for the holders.
Upon due presentment for registration of transfer of this Debenture at
the office or agency of the Company maintained for that purpose in accordance
with the terms of the Indenture, a new Debenture or Debentures of authorized
denominations for an equal aggregate principal amount will be issued to the
transferee in exchange thereof, subject to the limitations provided in the
Indenture, without charge except for any tax, assessment or other governmental
charge imposed in connection therewith.
The Company, the Trustee, any authenticating agent, any paying agent,
any conversion agent and any Debenture Registrar may deem and treat the
registered holder hereof as the absolute owner of this Debenture (whether or not
this Debenture shall be overdue and notwithstanding any notation of ownership or
other writing hereon made by anyone other than the Company or any Debenture
Registrar) for the purpose of receiving payment hereof, or on account hereof,
for the conversion hereof and for all other purposes, and neither the Company
nor the Trustee nor any other authenticating agent nor any paying agent nor
other conversion agent nor any Debenture Registrar shall be affected by any
notice to the contrary. All payments made to or upon the order of such
registered holder shall, to the extent of the sum or sums paid, satisfy and
discharge liability for monies payable on this Debenture.
A-9
No recourse for the payment of the principal of or any premium or
interest on this Debenture, or for any claim based hereon or otherwise in
respect hereof, and no recourse under or upon any obligation, covenant or
agreement of the Company in the Indenture or any supplemental indenture or in
any Debenture, or because of the creation of any indebtedness represented
thereby, shall be had against any incorporator, stockholder, employee, agent,
officer or director or subsidiary, as such, past, present or future, of the
Company or of any successor corporation, either directly or through the Company
or any successor corporation, whether by virtue of any constitution, statute or
rule of law or by the enforcement of any assessment or penalty or otherwise, all
such liability being, by acceptance hereof and as part of the consideration for
the issue hereof, expressly waived and released.
The Company agrees, and by acceptance of a Debenture, each beneficial
holder of a Debenture will be deemed to have agreed to treat the Debentures as
indebtedness of the Company for U.S. federal income tax purposes that are
subject to the regulations governing contingent payment debt instruments. A
Holder of Debentures may obtain the amount of original issue discount, issue
date, yield to maturity, comparable yield and projected payment schedule for the
Debentures, determined by the Company pursuant to Treas. Reg. Sec. 1.1275-4, by
submitting a written request for it to the Company at the following address:
Greatbatch, Inc., 9645 Wehrle Drive, Clarence, NY 14031, Attention: Treasurer.
This Debenture shall be deemed to be a contract made under the laws of
New York, and for all purposes shall be construed in accordance with the laws of
New York, without regard to conflicts of laws principles thereof.
Terms used in this Debenture and defined in the Indenture are used
herein as therein defined.
A-10
ABBREVIATIONS
The following abbreviations, when used in the inscription of the face
of this Debenture, shall be construed as though they were written out in full
according to applicable laws or regulations.
TEN COM - as tenants in common
TEN ENT - as tenant by the entireties
JT TEN - as joint tenants with right of survivorship and
not as tenants in common
UNIF GIFT MIN ACT - __________________________
(Custodian)
______________________
(Minor) under Uniform Gifts to Minors Act
_________________________________
(State)
Additional abbreviations may also be used though not in the above list.
A-11
CONVERSION NOTICE
TO: GREATBATCH, INC.
MANUFACTURERS AND TRADERS TRUST COMPANY
The undersigned registered owner of this Debenture hereby irrevocably
exercises the option to convert this Debenture, or the portion thereof (which is
$1,000 or a multiple thereof) below designated, into shares of Common Stock of
Greatbatch, Inc. in accordance with the terms of the Indenture referred to in
this Debenture, and directs that the shares issuable and deliverable upon such
conversion, together with any check in payment for fractional shares and any
Debentures representing any unconverted principal amount hereof, be issued and
delivered to the registered holder hereof unless a different name has been
indicated below. Capitalized terms used herein but not defined shall have the
meanings ascribed to such terms in the Indenture. If shares or any portion of
this Debenture not converted are to be issued in the name of a person other than
the undersigned, the undersigned will provide the appropriate information below
and pay all transfer taxes payable with respect thereto. Any amount required to
be paid by the undersigned on account of interest, including contingent
interest, if any, accompanies this Debenture.
Dated:___________________________________
Signature(s):
_________________________________________
Signature(s) must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Debenture Registrar, which requirements include
membership or participation in the Security Transfer Agent Medallion Program
("STAMP") or such other "signature guarantee program" as may be determined by
the Debenture Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.
_______________________________________
Signature Guarantee
A-12
Fill in the registration of shares of Common Stock if to be issued, and
Debentures if to be delivered, other than to and in the name of the registered
holder:
_______________________________________
(Name)
_______________________________________
(Street Address)
_______________________________________
(City, State and Zip Code)
Please print name and address
Principal amount to be converted (if less than all):
$_____________________________________
Social Security or Other Taxpayer Identification Number:
______________________________________
A-13
OPTION TO ELECT REDEMPTION UPON A FUNDAMENTAL CHANGE
TO: GREATBATCH, INC.
MANUFACTURERS AND TRADERS TRUST COMPANY
The undersigned registered owner of this Debenture hereby irrevocably
acknowledges receipt of a notice from Greatbatch, Inc. (the "Company") as to the
occurrence of a Fundamental Change with respect to the Company and requests and
instructs the Company to redeem the entire principal amount of this Debenture,
or the portion thereof (which is $1,000 or a multiple thereof) below designated,
in accordance with the terms of the Indenture referred to in this Debenture at
the price of 100% of such entire principal amount or portion thereof, together
with accrued interest to, but excluding, the Fundamental Change Redemption Date,
to the registered holder hereof. Capitalized terms used herein but not defined
shall have the meanings ascribed to such terms in the Indenture.
Dated:_______________________________
_____________________________________
_____________________________________
Signature(s)
NOTICE: The above signatures of the holder(s) hereof must correspond
with the name as written upon the face of the Debenture in every particular
without alteration or enlargement or any change whatever.
Principal amount to be repaid (if less than all):
______________________________________
______________________________________
Social Security or Other Taxpayer Identification Number
______________________________________
A-14
ASSIGNMENT
For value received ______________________________hereby sell(s)
assign(s) and transfer(s) unto ___________________________________ (Please
insert social security or other Taxpayer Identification Number of assignee) the
within Debenture, and hereby irrevocably constitutes and appoints
______________________________________ attorney to transfer said Debenture on
the books of the Company, with full power of substitution in the premises.
In connection with any transfer of the Debenture prior to the
expiration of the holding period applicable to sales thereof under Rule 144(k)
under the Securities Act (or any successor provision) (other than any transfer
pursuant to a registration statement that has been declared effective under the
Securities Act), the undersigned confirms that such Debenture is being
transferred:
[ ] To Greatbatch, Inc. or a subsidiary thereof; or
[ ] To a "qualified institutional buyer" in compliance with Rule
144A under the Securities Act of 1933, as amended; or
[ ] Pursuant to and in compliance with Rule 144 under the
Securities Act of 1933, as amended; or
[ ] Pursuant to a Registration Statement which has been declared
effective under the Securities Act of 1933, as amended, and which continues to
be effective at the time of transfer;
and unless the Debenture has been transferred to Greatbatch, Inc. or a
subsidiary thereof, the undersigned confirms that such Debenture is not being
transferred to an "affiliate" of the Company as defined in Rule 144 under the
Securities Act of 1933, as amended.
Unless one of the boxes is checked, the Trustee will refuse to register
any of the Debentures evidenced by this certificate in the name of any person
other than the registered holder thereof.
Dated:_____________________________
___________________________________
___________________________________
Signature(s)
A-15
Signature(s) must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Debenture Registrar, which requirements include
membership or participation in the Security Transfer Agent Medallion Program
("STAMP") or such other "signature guarantee program" as may be determined by
the Debenture Registrar in addition to, or in substitution for, STAMP, al in
accordance with the Securities Exchange Act of 1934, as amended.
_________________________________
Signature Guarantee
NOTICE: The signature on the Conversion Notice, the Option to Elect
Redemption Upon a Fundamental Change, the Assignment must correspond with the
name as written upon the face of the Debenture in every particular without
alteration or enlargement or any change whatever.
A-16
Schedule I
[Include Schedule I only for a Global Debenture]
GREATBATCH, INC.
2 1/4% Convertible Subordinated Debenture Due 2013
No. _______
Principal Notation Explaining Authorized Signature
Date Amount Principal Amount Recorded of Trustee or Custodian
- ---- ------ ------------------------- -----------------------