EXHIBIT 4.1
KAYDON CORPORATION
4.0% CONTINGENT CONVERTIBLE SENIOR SUBORDINATED NOTES DUE 2023
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INDENTURE
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SUNTRUST BANK, AS TRUSTEE
DATED AS OF MAY 23, 2003
CROSS-REFERENCE TABLE*
Trust Indenture Act Section Indenture Section
--------------------------- -----------------
310 (a)(1)........................................................................................ 7.10
(a)(2)............................................................................................ 7.10
(a)(3)............................................................................................ N.A.
(a)(4)............................................................................................ N.A.
(a)(5)............................................................................................ N.A.
(b)............................................................................................... 7.08, 7.10
(c)............................................................................................... N.A.
311(a)............................................................................................ 7.11
(b)............................................................................................... 7.11
(c)............................................................................................... N.A.
312 (a)........................................................................................... 2.05
(b)............................................................................................... 11.03
(c)............................................................................................... 11.03
313(a)............................................................................................ 7.06
(b)(1)............................................................................................ 7.06
(b)(2)............................................................................................ 7.06
(c)............................................................................................... 7.06
(d)............................................................................................... 7.06
314(a)............................................................................................ 4.02, 4.03
(b)............................................................................................... N.A.
(c)(1)............................................................................................ 11.04
(c)(2)............................................................................................ 11.04
(c)(3)............................................................................................ N.A.
(d)............................................................................................... N.A.
(e)............................................................................................... 11.05
(f)............................................................................................... N.A.
315 (a)........................................................................................... 7.01(b)
(b)............................................................................................... 7.05
(c)............................................................................................... 7.01
(d)............................................................................................... 7.01(c)
(e)............................................................................................... 6.11
316(a)(1)(A)...................................................................................... 6.05
(a)(1)(B)......................................................................................... 6.04
(a)(2)............................................................................................ N.A.
(b)............................................................................................... 6.07
(c)............................................................................................... 1.05(e)
317 (a)(1)........................................................................................ 6.08
(a)(2)............................................................................................ 6.09
(b)............................................................................................... 2.04
318 (a)........................................................................................... N.A.
N.A. means not applicable.
*This Cross-Reference Table is not part of the Indenture.
(i)
TABLE OF CONTENTS
Page
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ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE............................................................ 1
Section 1.01. Definitions.................................................................................... 1
Section 1.02. Other Definitions.............................................................................. 10
Section 1.03. Incorporation by Reference of Trust Indenture Act.............................................. 10
Section 1.04. Rules of Construction.......................................................................... 11
Section 1.05. Acts of Holders................................................................................ 11
ARTICLE 2 THE SECURITIES........................................................................................ 12
Section 2.01. Form and Dating................................................................................ 12
Section 2.02. Execution and Authentication................................................................... 14
Section 2.03. Registrar, Paying Agent and Conversion Agent................................................... 14
Section 2.04. Paying Agent to Hold Money in Trust............................................................ 15
Section 2.05. Holder Lists................................................................................... 15
Section 2.06. Transfer and Exchange.......................................................................... 15
Section 2.07. Replacement Securities......................................................................... 17
Section 2.08. Outstanding Securities; Determinations of Holders' Action...................................... 17
Section 2.09. Temporary Securities........................................................................... 18
Section 2.10. Cancellation................................................................................... 18
Section 2.11. Persons Deemed Owners.......................................................................... 19
Section 2.12. Global Securities.............................................................................. 19
Section 2.13. CUSIP Numbers.................................................................................. 22
ARTICLE 3 REDEMPTION AND PURCHASES.............................................................................. 22
Section 3.01. Right To Redeem; Notices To Trustee............................................................ 22
Section 3.02. Selection of Securities to Be Redeemed......................................................... 22
Section 3.03. Notice of Redemption........................................................................... 23
Section 3.04. Effect of Notice of Redemption................................................................. 24
Section 3.05. Deposit of Redemption Price.................................................................... 24
Section 3.06. Securities Redeemed in Part.................................................................... 24
Section 3.07. Sinking Fund................................................................................... 24
Section 3.08. Purchase of Securities at Option of the Holder................................................. 24
Section 3.09. Purchase of Securities at Option of the Holder upon Change in Control.......................... 27
Section 3.10. Effect of Purchase Notice or Change in Control Purchase Notice................................. 28
Section 3.11. Deposit of Purchase Price or Change in Control Purchase Price.................................. 29
Section 3.12. Securities Purchased in Part................................................................... 29
Section 3.13. Covenant to Comply with Securities Laws upon Purchase of Securities............................ 29
Section 3.14. Repayment to the Company....................................................................... 30
ARTICLE 4 COVENANTS............................................................................................. 30
Section 4.01. Payment of Securities.......................................................................... 30
Section 4.02. SEC and Other Reports.......................................................................... 30
Section 4.03. Compliance Certificate......................................................................... 31
Section 4.04. Further Instruments and Acts................................................................... 31
Section 4.05. Maintenance of Office or Agency................................................................ 31
Section 4.06. Delivery of Certain Information................................................................ 31
Section 4.07. Tax Treatment of Securities.................................................................... 32
Section 4.08. Liquidated Damages............................................................................. 32
(ii)
Section 4.09. Prohibition on Layering Debt................................................................... 32
ARTICLE 5 SUCCESSOR CORPORATION................................................................................. 32
Section 5.01. When the Company May Merge or Transfer Assets.................................................. 32
ARTICLE 6 DEFAULTS AND REMEDIES................................................................................. 33
Section 6.01. Events of Default.............................................................................. 33
Section 6.02. Acceleration................................................................................... 35
Section 6.03. Other Remedies................................................................................. 36
Section 6.04. Waiver of Past Defaults........................................................................ 36
Section 6.05. Control by Majority............................................................................ 36
Section 6.06. Limitation on Suits............................................................................ 36
Section 6.07. Rights of Holders to Receive Payment........................................................... 37
Section 6.08. Collection Suit by Trustee..................................................................... 37
Section 6.09. Trustee May File Proofs of Claim............................................................... 37
Section 6.10. Priorities..................................................................................... 38
Section 6.11. Suits.......................................................................................... 39
Section 6.12. Waiver of Stay, Extension or Usury Laws........................................................ 39
ARTICLE 7 TRUSTEE............................................................................................... 39
Section 7.01. Duties of Trustee.............................................................................. 39
Section 7.02. Rights of Trustee.............................................................................. 40
Section 7.03. Individual Rights of Trustee................................................................... 42
Section 7.04. Trustee's Disclaimer........................................................................... 42
Section 7.05. Notice of Defaults............................................................................. 42
Section 7.06. Reports by Trustee to Holders.................................................................. 43
Section 7.07. Compensation and Indemnity..................................................................... 43
Section 7.08. Replacement of Trustee......................................................................... 44
Section 7.09. Successor Trustee by Merger Etc................................................................ 45
Section 7.10. Eligibility; Disqualification.................................................................. 45
Section 7.11. Preferential Collection of Claims Against Company.............................................. 45
ARTICLE 8 DISCHARGE OF INDENTURE................................................................................ 45
Section 8.01. Discharge of Liability on Securities........................................................... 46
Section 8.02. Repayment to the Company....................................................................... 46
ARTICLE 9 AMENDMENTS............................................................................................ 46
Section 9.01. Without Consent of Holders..................................................................... 46
Section 9.02. With Consent of Holders........................................................................ 46
Section 9.03. Compliance with Trust Indenture Act............................................................ 48
Section 9.04. Revocation and Effect of Consents.............................................................. 48
Section 9.05. Notation on or Exchange of Securities.......................................................... 48
Section 9.06. Trustee to Sign Supplemental Indentures........................................................ 48
Section 9.07. Effect of Supplemental Indentures.............................................................. 48
ARTICLE 10 CONVERSION OF THE SECURITIES......................................................................... 48
Section 10.01. Conversion Privilege.......................................................................... 48
Section 10.02. Conversion Procedure.......................................................................... 51
Section 10.03. Adjustments Below Par Value................................................................... 52
Section 10.04. Taxes on Conversion........................................................................... 52
Section 10.05. Company to Provide Stock...................................................................... 52
Section 10.06. Adjustment of Conversion Price................................................................ 54
(iii)
Section 10.07. No Adjustment................................................................................. 57
Section 10.08. Equivalent Adjustments........................................................................ 58
Section 10.09. Adjustment for Tax Purposes................................................................... 58
Section 10.10. Notice of Adjustment.......................................................................... 58
Section 10.11. Notice of Certain Transactions................................................................ 58
Section 10.12. Effect of Reclassification, Consolidation, Merger, Share Exchange or Sale on
Conversion Privilege.......................................................................... 59
Section 10.13. Trustee's Disclaimer.......................................................................... 60
Section 10.14. Voluntary Reduction........................................................................... 60
Section 10.15. Simultaneous Adjustments...................................................................... 60
ARTICLE 11 SUBORDINATION........................................................................................ 60
Section 11.01. Securities Subordinated to Senior Indebtedness................................................ 60
Section 11.02. Payments to Holders........................................................................... 61
Section 11.03. Subrogation of Securities..................................................................... 63
Section 11.04. Authorization to Effect Subordination......................................................... 64
Section 11.05. Notice to Trustee............................................................................. 64
Section 11.06. Trustee's Relation to Senior Indebtedness..................................................... 65
Section 11.07. No Impairment of Subordination................................................................ 66
Section 11.08. Certain Conversions Deemed Payment............................................................ 66
Section 11.09. Article Applicable to Paying Agents........................................................... 66
Section 11.10. Senior Indebtedness Entitled to Rely.......................................................... 66
ARTICLE 12 MISCELLANEOUS........................................................................................ 66
Section 12.01. Trust Indenture Act Controls.................................................................. 67
Section 12.02. Notices....................................................................................... 67
Section 12.03. Communication by Holders with Other Holders................................................... 69
Section 12.04. Certificate and Opinion as to Conditions Precedent............................................ 69
Section 12.05. Statements Required in Certificate or Opinion................................................. 69
Section 12.06. Separability Clause........................................................................... 70
Section 12.07. Rules by Trustee, Paying Agent, Conversion Agent and Registrar................................ 70
Section 12.08. Legal Holidays................................................................................ 70
Section 12.09. Governing Law................................................................................. 70
Section 12.10. No Recourse Against Others.................................................................... 70
Section 12.11. Successors.................................................................................... 70
Section 12.12. Multiple Originals............................................................................ 70
Exhibit A-1 - Form of Global Security
Exhibit A-2 - Form of Certified Security
Exhibit B - Transfer Certificate
Exhibit C - Projected Payment Schedule
(iv)
INDENTURE dated as of May 23, 2003 between Kaydon Corporation, a
Delaware corporation (the "Company"), and SunTrust Bank, bank and trust company
organized under the laws of the State of Georgia (the "Trustee").
Each party agrees as follows for the benefit of the other party and for
the equal and ratable benefit of the Holders (as defined below) of the Company's
4.0% Contingent Convertible Senior Subordinated Notes Due 2023 (the
"Securities"):
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01. Definitions.
"144A Global Security" means a permanent Global Security in the form of
the Security attached hereto as Exhibit A-1 that is deposited with and
registered in the name of the Depositary, representing Securities sold in
reliance on Rule 144A under the Securities Act.
"Affiliate" has the meaning provided in Rule 405 under the Securities
Act.
"Bankruptcy Law" means Title 11, U.S. Code or any similar federal,
state, or foreign law for the relief of debtors.
"Beneficial Owner" shall be determined in accordance with Rule 13d-3
and Rule 13d-5 promulgated by the SEC under the Exchange Act or any successor
provision, except that, for purposes of the definition of Change in Control, a
Person shall be deemed to have "Beneficial Ownership" of all shares of Common
Stock that the Person has the right to acquire, whether exercisable immediately
or only after the passage of time.
"Board of Directors" means either the board of directors of the Company
or any duly authorized committee of such board authorized to act for it with
respect to this Indenture.
"Board Resolution" means a copy of one or more resolutions, certified
by an Officer of the Company to have been duly adopted or consented to by the
applicable Board of Directors and to be in full force and effect, and delivered
to the Trustee.
"Business Day" means a day that in the City of New York is not a day on
which banking institutions are authorized or obligated by law or regulation to
close.
"Capitalized Lease Obligation" means, as to any Person, the obligations
of such Person under a lease that is required to be classified and accounted for
as capital lease obligations under GAAP and, for purposes of this definition,
the amount of such obligations at any date shall be the capitalized amount of
such obligations at such date, determined in accordance with GAAP.
"Capital Stock" for any corporation means any and all shares,
interests, rights to purchase, warrants, options, participations or other
equivalents of or interests in (however designated) stock issued by that
corporation.
"Cash Conversion Price" means, in respect of each $1,000 of principal
amount of a Security, an amount equal to the product of (i) the average of the
Closing Price of the Common Stock for each Trading Day in the five Trading Day
period immediately following (a) the date on which the Company delivers timely
notice of its election to deliver cash instead of issuing shares of Common Stock
in accordance with Section 10.02, if the Company has not given notice of
redemption with respect to such Security or (b) the Conversion Date, if the
Company has given notice of redemption with respect to such Security, in either
case multiplied by (ii) the number of shares of Common Stock issuable upon
conversion of such Security on such date and appropriately adjusted to take into
account the occurrence, during such five Trading Day period, of any event
requiring adjustment of the Conversion Price under this Indenture.
"Cash Equivalents" means (i) marketable direct obligations issued by,
or unconditionally guaranteed by, the United States Government or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within one year from the date of acquisition thereof; (ii)
marketable direct obligations issued by any state of the United States of
America or any political subdivision of any such state of the United States of
America or any political subdivision of any such state or any public
instrumentality thereof maturing within one year from the date of acquisition
thereof and, at the time of acquisition, having one of the two highest ratings
obtainable from either Standard & Poor's, a division of the ▇▇▇▇▇▇-▇▇▇▇
Companies, Inc. ("S&P") or ▇▇▇▇▇'▇ Investors Service, Inc. ("▇▇▇▇▇'▇"); (iii)
commercial paper maturing no more than one year from the date of acquisition
thereof issued by any bank organized under the laws of the United States of
America or any state thereof or the District of Columbia or any U.S. branch of a
foreign bank having at the date of acquisition thereof combined capital and
surplus of not less than $250,000,000; (v) repurchase obligations with a term of
not more than seven days for underlying securities of the types described in
clause (i) above entered into with any bank meeting the qualifications specified
in clause (iv) above; and (vi) money market funds which invest substantially all
their assets in securities of the types described in clauses (i) through (v)
above.
"Certificated Securities" means Securities that are in the form of the
Securities attached hereto as Exhibit A-2.
"Change in Control" shall be deemed to have occurred at such time after
the original issuance of the Securities as:
(a) any Person (including any syndicate or group deemed
to be a "person" under Section 13(d)(3) of the Exchange Act), other
than the Company, any Subsidiary of the Company, any employee benefit
plan of the Company or any such Subsidiary, or Permitted Holders, is or
becomes the Beneficial Owner, directly or indirectly, through a
purchase or other acquisition transaction or series of transactions
(other than a merger or consolidation involving the Company), of shares
of Capital Stock of the Company entitling such Person to exercise in
excess of 35% of the total voting power of all shares of Voting Stock
of the Company;
(b) there occurs any consolidation of the Company with,
or merger of the Company into, any other Person, any merger of another
Person into the Company, or any sale or transfer of the assets of the
Company as, or substantially as, an entirety, to another
2
Person (other than (i) any such merger pursuant to which the holders of
the Voting Stock immediately prior to such transaction have, directly
or indirectly, shares of Capital Stock of the continuing or surviving
corporation (or its parent) immediately after such merger which entitle
such holders to exercise in excess of 50% of the total voting power of
all shares of Voting Stock of the continuing or surviving corporation
(or its parent) and (ii) any merger which is effected solely to change
the jurisdiction of incorporation of the Company and results in a
reclassification, conversion or exchange of outstanding shares of
Voting Stock solely into shares of stock carrying substantially the
same relative rights as the Voting Stock); or
(c) the first day on which a majority of the members of
the Board of Directors of the Company are not Continuing Directors.
"Closing Price" with respect to any security on any day means the
closing sale price per security regular way on such day or, in case no such sale
is reported for such day, the average of the reported closing bid and asked
prices, regular way, in each case on the New York Stock Exchange, or, if such
security is not listed or admitted to trading on such Exchange, on the principal
national security exchange or quotation system on which such security is quoted
or listed or admitted to trading, or, if not quoted or listed or admitted to
trading on any national securities exchange or quotation system, the average of
the closing bid and asked prices of such security on the over-the-counter market
on the day in question as reported by the National Quotation Bureau
Incorporated, or a similar generally accepted reporting service, or if not so
available, the price furnished by any New York Stock Exchange member firm
selected from time to time by the Board of Directors for that purpose, or a
price determined in good faith by the Board of Directors or, to the extent
permitted by applicable law, a duly authorized committee thereof, whose
determination shall be conclusive.
"Common Stock" shall mean shares of the Company's Common Stock, $0.10
par value per share, as they exist on the date of this Indenture or any other
shares of Capital Stock of the Company into which the Common Stock shall be
reclassified or changed.
"Company" means the party named as the "Company" in the first paragraph
of this Indenture until a successor replaces it pursuant to the applicable
provisions of this Indenture and, thereafter, shall mean such successor. The
foregoing sentence shall likewise apply to any subsequent such successor or
successors.
"Company Order" means a written request or order signed in the name of
the Company by any two Officers.
"Contingent Interest" shall mean an amount of interest payable a rate
equal to 0.50% per annum per $1,000 of Securities in respect of any Contingent
Interest Period, if the average of the Security Trading Price for the five
Trading Days ending on the third Trading Day immediately preceding the first day
for the applicable Contingent Interest Period equals $1,200 or more.
"Contingent Interest Period" shall mean any six-month period from May
23 to, but excluding, November 23, and from November 23 to, but excluding, May
23, with the initial six-month period commencing on May 23, 2008.
3
"Continuing Directors" means, as of any date of determination, any
member of the Board of Directors who (a) was a member of the Board of Directors
as of the date hereof or (b) was nominated for election or elected to the Board
of Directors with approval of a majority of the Continuing Directors who were
members at time of the new director's nomination or election.
"Corporate Trust Office" means the office of the Trustee at which at
any time the trust created by this Indenture shall be administered, which office
at the date hereof is located at ▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇-▇▇▇▇, Attention: Corporate Trust and Agency Services, or such other
address as the Trustee may designate from time to time by notice to the Holders
and the Company, or the principal corporate trust office of any successor
Trustee (or such other address as a successor Trustee may designate from time to
time by notice to the Holders and the Company).
"Credit Agreement" means the Revolving Credit Agreement dated as of
June 17, 1999 among the Company, certain Subsidiaries of the Company, the
lenders party thereto in their capacities as lenders thereunder and Bank One
Michigan, as administrative agent, together with the related documents thereto
(including, without limitation, any guarantee agreements and security
documents), in each case as such agreement 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 increasing the amount of
available borrowings thereunder or adding Subsidiaries of the Company as
additional borrowers or guarantors thereunder) all or any portion of the
Indebtedness under such agreement or any successor or replacement agreement and
whether by the same or any other agent, lender or group of lenders.
"Default" means any event which is, or after notice or passage of time
or both would be, an Event of Default.
"Designated Senior Indebtedness" means (i) Indebtedness under or in
respect of the Credit Agreement and (ii) any particular Senior Indebtedness of
the Company in which the instrument creating or evidencing the same or the
assumption or guarantee thereof (or any related agreements or documents to which
the Company is a party) expressly provides that such Senior Indebtedness shall
be "Designated Senior Indebtedness" for purposes of this Indenture (provided
that such instrument, agreement or other document may place limitations and
conditions on the right of such Senior Indebtedness to exercise the rights of
Designated Senior Indebtedness). If any payment made to any holder of any
Designated Senior Indebtedness or its Representative with respect to such
Designated Senior Indebtedness is rescinded or must otherwise be returned by
such holder or Representative upon the insolvency, bankruptcy or reorganization
of the Company or otherwise, the reinstated Indebtedness of the Company arising
as a result of such rescission or return shall constitute Designated Senior
Indebtedness effective as of the date of such rescission or return.
"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.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the America
Institute of Certified Public
4
Accountants and statements and pronouncements of the Financial Accounting
Standards Board or in such other statements by such other entity as may be
approved by a significant segment of the accounting profession of the United
States, which are in effect from time to time.
"Global Securities" means Securities that are in the form of the
Securities attached hereto as Exhibit A-1, and to the extent that such
Securities are required to bear the Legend required by Section 2.06 such
Securities will be in the form of a 144A Global Security.
"Holder" or "Securityholder" means a Person in whose name a Security is
registered on the Registrar's books.
"Indebtedness" means, with respect to any Person, without duplication,
(a) all indebtedness, obligations and other liabilities (contingent or
otherwise) of such Person (i) for borrowed money (including obligations of such
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 (ii)
evidenced by credit or loan agreements, 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 accounts
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) of such Person (i) in respect of Capitalized Lease Obligations or
(ii) under any lease or related document (including a purchase agreement,
conditional sale or other title retention agreement) in connection with the
lease of real property or improvements thereon (or any personal property
included as part of any such lease) which provides that such Person is
contractually obligated to purchase or cause a third party to purchase the
leased property or pay an agreed-upon residual value of the leased property to
the lessor (whether or not such lease transaction is characterized as an
operating lease or a Capitalized Lease Obligation), (d) all obligations
(contingent or otherwise) of such Person with respect to any interest rate or
other swap, cap, floor or collar agreement, hedge agreement, forward contract,
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 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 kinds described in clauses (a) through (d),
and (f) any and all deferrals, renewals, extensions, refinancings and refundings
of, or amendments, modifications or supplements to, any indebtedness, obligation
or liability of the kinds described in clauses (a) through (e); provided,
however, that Indebtedness shall not include obligations and liabilities of such
Person (x) arising from the honoring by a bank of other financial institution of
a check, draft or similar instrument inadvertently drawn against insufficient
funds in the ordinary course of business, provided such obligations are
extinguished within two Business Days of their incurrence, (y) resulting from
the endorsement of negotiable instruments for collection in the ordinary course
of business and consistent with past business practices and (z) stand-by letters
of credit to the extent collaterallized by cash or Cash Equivalents.
5
"Indenture" means this Indenture, as amended or supplemented from time
to time in accordance with the terms hereof, including the provisions of the TIA
that are deemed to be a part hereof.
"Initial Purchasers" shall mean Deutsche Bank Securities Inc., Banc One
Capital Markets, Inc. and SunTrust Capital Markets, Inc.
"Issue Date" of any Security means the date on which the Security was
originally issued or deemed issued as set forth on the face of the Security.
"Liquidated Damages" has the meaning set forth in the Registration
Rights Agreement dated as of May 23, 2003 between the Company and the Initial
Purchasers.
"Market Capitalization" means, as of any date of calculation, the
Closing Price of the Common Stock on the Trading Day immediately prior to such
date of calculation multiplied by the aggregate number of shares of Common Stock
outstanding on the Trading Day immediately prior to such date of calculation.
"Market Price" means the average of the Closing Prices of the Common
Stock for the 20 Trading Day period ending on the third Business Day (if the
third Business Day prior to the applicable Purchase Date is a Trading Day, or if
not, then on the last Trading Day prior to such third Business Day) prior to the
applicable Purchase Date or Change in Control Purchase Date, appropriately
adjusted to take into account the occurrence, during the period commencing on
the first of such Trading Days during such 20 Trading Day period and ending on
such Purchase Date or Change in Control Purchase Date, of any event requiring
adjustment of the Conversion Price under this Indenture.
"Non-Recourse Indebtedness" means any Indebtedness of the Company or
any of its Subsidiaries that is (i) (A) specifically advanced to finance the
acquisition of investment assets and (B) secured only by the assets to which
such Indebtedness relates without recourse to the Company or any of its
Subsidiaries, (ii) advanced to a Subsidiary of the Company or group of
Subsidiaries of the Company formed for the sole purpose of acquiring or holding
investment assets (A) against which a loan is obtained that is made without
recourse to, and with no cross-collateralization against the assets of, the
Company or any other Subsidiary of the Company, and (B) upon complete or partial
liquidation of which the loan must be correspondingly completely or partially
repaid, as the case may be or (iii) specifically advanced to finance the
acquisition of real property and secured by only the real property to which such
Indebtedness relates without recourse to the Company or any of its Subsidiaries.
"Obligations" means all obligations for principal, premium, interest
(including Contingent Interest and Liquidated Damages), penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation under which any Indebtedness is created, evidenced or secured.
"Officer" means the Chairman and Chief Executive Officer, the
President, any Vice President (whether or not such is preceded by any modifier
such as "Executive, "Senior" or the like), the Chief Financial Officer, the
Treasurer, the Controller or the Secretary of such Person or any other officer
designated by the board of directors of such Person serving in a similar
6
capacity; provided, that the designation of any such Officer by the Board of
Directors of the Company shall be evidenced in a Board Resolution.
"Officers' Certificate" means a written certificate containing the
information specified in Sections 12.04 and 12.05, signed in the name of the
Company by any two Officers, and delivered to the Trustee. An Officers'
Certificate given pursuant to Section 4.03 shall be signed by the principal
executive officer, principal financial officer or the principal accounting
officer of the Company but need not contain the information specified in
Sections 12.04 and 12.05.
"Opinion of Counsel" means a written opinion containing the information
specified in Section 12.04 and 12.05, from legal counsel who is acceptable to
the Trustee in its reasonable discretion. The counsel may be an employee of, or
counsel to, the Company or the Trustee.
"Person" or "Persons" means any individual, corporation, limited
liability company, partnership, joint venture, association, joint-stock company,
trust, unincorporated organization, government or any agency or political
subdivision thereof or other entity.
"Recourse Indebtedness" means all Indebtedness of the Company and its
Subsidiaries other than Non-Recourse Indebtedness.
"Redemption Date" or "Redemption Dates" shall mean the date specified
for redemption of the Securities in accordance with the terms of the Securities
and this Indenture.
"Redemption Price" or "Redemption Prices" shall have the meaning set
forth in paragraph 5 of the Securities.
"Responsible Officer" shall mean, when used with respect to the
Trustee, any officer within the corporate trust department of the Trustee,
including any vice president, assistant vice president, assistant secretary,
assistant treasurer, trust officer or any other officer of the Trustee who
customarily performs functions similar to those performed by the Persons who at
the time shall be such officers, respectively, or to whom any corporate trust
matter is referred because of such person's knowledge of and familiarity with
the particular subject and who shall have direct responsibility for the
administration of this Indenture.
"Representative" means the indenture trustee or other trustee, agent or
representative in respect of any Designated Senior Indebtedness; provided,
however, that if, and for so long as, any Designated Senior Indebtedness lacks
such a representative, then the Representative for such Designated Senior
Indebtedness shall at all times constitute the holders of a majority in
outstanding principal amount of such Designated Senior Indebtedness in respect
of any Designated Senior Indebtedness.
"Restricted Security" means a Security required to bear the restrictive
legend set forth in the form of Security set forth in Exhibits A-1 and A-2 of
this Indenture.
"Rule 144A" means Rule 144A under the Securities Act (or any successor
provision), as it may be amended from time to time.
"SEC" means the Securities and Exchange Commission.
7
"Security" or "Securities" means any of the Company's 4.0% Contingent
Convertible Senior Subordinated Notes Due 2023, as amended or supplemented from
time to time, issued under this Indenture.
"Security Trading Price" per $1,000 in principal amount of Securities
on any date of determination means the average of the secondary market bid
quotations per $1,000 in principal amount of Securities obtained by the
Conversion Agent for $5,000,000 in principal amount of Securities at
approximately 3:30 p.m., New York City time, on such determination date from
three independent nationally recognized securities dealers selected by the
Company; provided that if at least three such bids cannot reasonably be obtained
by the Conversion Agent, but two such bids are obtained, then the average of the
two bids shall be used, and if only one such bid can reasonably be obtained by
the Conversion Agent, such one bid shall be used. If the Conversion Agent cannot
reasonably obtain at least one bid for $5,000,000 in principal amount of
Securities from a nationally recognized securities dealer or, in the reasonable
judgment of the Company, the bid quotations are not indicative of the secondary
market value of the Securities, then the Security Trading Price will be
determined in good faith by the calculation agent (which shall initially be the
Trustee unless the Trustee shall have appointed a calculation agent, which may
be any investment bank with a national or international reputation with
experience in such matters, including the Initial Purchasers or their
successors) taking into account in such determination such factors as it, in its
sole discretion after consultation with the Company, deems appropriate.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder, as in effect from time to time.
"Securityholder" or "Holder" means a Person in whose name a Security is
registered on the Registrar's books.
"Senior Indebtedness" means the principal of, premium, if any, interest
(including all interest accruing subsequent to the commencement of any
bankruptcy or similar proceeding, whether or not a claim for post-petition
interest is allowed as a claim in any such proceeding) and rent payable on or in
connection with, and all fees, costs, expenses and other amounts accrued or due
on or in connection with, Indebtedness of the Company, whether secured or
unsecured, absolute or contingent, due or to become due, outstanding on the date
of this Indenture or thereafter created, incurred, assumed, guaranteed or in
effect guaranteed by the Company (including all deferrals, renewals, extensions
or refundings of, or amendments, modifications or supplements to, the
foregoing), unless in the case of any particular Indebtedness the instrument
creating or evidencing the same or the assumption or guarantee thereof expressly
provides that such Indebtedness shall not be senior in right of payment to the
Securities or expressly provides that such Indebtedness is "pari passu" or
"junior" to the Securities. Notwithstanding the foregoing, the term Senior
Indebtedness shall not include the Securities. If any payment made to any holder
of any Senior Indebtedness or its Representative with respect to such Senior
Indebtedness is rescinded or must otherwise be returned by such holder or
Representative upon the insolvency, bankruptcy or reorganization of the Company
or otherwise, the reinstated Indebtedness of the Company arising as a result of
such rescission or return shall constitute Senior Indebtedness effective as of
the date of such rescission or return.
8
"Significant Subsidiary" has the meaning ascribed to such term in
Regulation S-X (17 CFR Part 210).
"Stated Maturity", when used with respect to any Security, means the
date specified in such Security as the fixed date on which an amount equal to
the principal amount of such Security is due and payable.
"Subsidiary" means, with respect to any Person, (i) any corporation of
which the outstanding Capital Stock having at least a majority of the votes
entitled to be cast in the election of directors under ordinary circumstances
(determined without regard to any classification of directors) shall at the time
be owned, directly or indirectly, by such Person, (ii) any other Person (other
than a partnership) of which at least a majority of the voting interest under
ordinary circumstances is at the time, directly or indirectly, owned by such
Person or (iii) any partnership (a) the sole general partner or the 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 one or more Subsidiaries
of such Person (or any combination thereof).
"TIA" means the Trust Indenture Act of 1939 as in effect on the date of
this Indenture, provided, however, that in the event the TIA is amended after
such date, TIA means, to the extent required by any such amendment, the TIA as
so amended.
"Trading Day" means (x) if the applicable security is listed or
admitted for trading on the New York Stock Exchange, the Nasdaq National Market
or another national security exchange, a day on which the New York Stock
Exchange, the Nasdaq National Market or another national security exchange is
open for business or (y) if the applicable security is quoted on the Nasdaq
National Market, a day on which trades may be made thereon 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.
"Trustee" means the party named as the "Trustee" in the first paragraph
of this Indenture until a successor replaces it pursuant to the applicable
provisions of this Indenture and, thereafter, shall mean such successor. The
foregoing sentence shall likewise apply to any subsequent such successor or
successors.
"U.S. Government Obligations" means direct obligations of, and
obligations guaranteed by, the United States of America for the payment of which
the full faith and credit of the United States of America is pledged.
"Voting Stock" of a Person means Capital Stock of such Person of the
class or classes pursuant to which the holders thereof have the general voting
power under ordinary circumstances (determined without regard to any
classification of directors) to elect at least a majority of the board of
directors, managers or trustees of such Person (irrespective of whether or not
at the time Capital Stock of any other class or classes shall have or might have
voting power by reason of the happening of any contingency).
9
Section 1.02. Other Definitions.
Defined in
Term Section:
---- ----------
Acceleration Notice...................................................................................... 6.02(a)
Act...................................................................................................... 1.05(a)
Agent Members............................................................................................ 2.12(v)
Aggregate Market Premium................................................................................. 10.06
Blockage Period.......................................................................................... 11.02(a)
Change in Control Purchase Date.......................................................................... 3.09(a)
Change in Control Purchase Price......................................................................... 3.09(a)
Company Change in Control Notice......................................................................... 3.09(b)
Company Notice........................................................................................... 3.08(c)
Company Notice Date...................................................................................... 3.08(c)
Conversion Agent......................................................................................... 2.03
Conversion Date.......................................................................................... 10.02
Conversion Price......................................................................................... 10.06
Default Notice........................................................................................... 11.02(a)
Depositary............................................................................................... 2.01(a)
DTC...................................................................................................... 2.01(a)
Event of Default......................................................................................... 6.01
Ex-Dividend Date......................................................................................... 10.01
Legal Holiday............................................................................................ 12.08
Legend................................................................................................... 2.06(f)
Paying Agent............................................................................................. 2.03
Purchase Date............................................................................................ 3.08(a)
Purchase Notice.......................................................................................... 3.08(a)(i)
Purchase Price........................................................................................... 3.08(a)
QIB...................................................................................................... 2.01(a)
Quarter.................................................................................................. 10.01(a)
Registrar................................................................................................ 2.03
Rule 144A Information.................................................................................... 4.06
Section 1.03. Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"Commission" means the SEC.
"Indenture Securities" means the Securities.
"Indenture Security Holder" means a Securityholder.
"Indenture to be Qualified" means this Indenture.
"Indenture Trustee" or "Institutional Trustee" means the Trustee.
"Obligor" on the indenture securities means the Company.
10
All other TIA terms used in this Indenture that are defined by the TIA, defined
by a TIA reference to another statute or defined by an SEC rule have the
meanings assigned to them by such definitions.
Section 1.04. Rules of Construction. Unless the context otherwise
requires:
(a) a term has the meaning assigned to it;
(b) an accounting term not otherwise defined has the
meaning assigned to it in accordance with generally accepted accounting
principles as in effect from time to time;
(c) "or" is not exclusive;
(d) "including" means including, without limitation; and
(e) words in the singular include the plural, and words
in the plural include the singular.
Section 1.05. Acts of Holders.
(a) Any request, demand, authorization, direction,
notice, consent, waiver or other action provided by this Indenture to
be given or taken by Holders may be embodied in and evidenced by one or
more instruments of substantially similar tenor signed by such Holders
in person or by agent duly appointed in writing; and, except as herein
otherwise expressly provided, such action shall become effective when
such instrument or instruments are delivered to the Trustee and, where
it is hereby expressly required, to the Company. Such instrument or
instruments (and the action embodied therein and evidenced thereby) are
herein sometimes referred to as the "Act" of Holders signing such
instrument or instruments. Proof of execution of any --- such
instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Indenture and conclusive in favor of
the Trustee and the Company, if made in the manner provided in this
Section.
(b) The fact and date of the execution by any Person of
any such instrument or writing may be proved by the affidavit of a
witness of such execution or by a certificate of a notary public or
other officer authorized by law to take acknowledgments of deeds,
certifying that the individual signing such instrument or writing
acknowledged to such officer the execution thereof. Where such
execution is by a signer acting in a capacity other than such signer's
individual capacity, such certificate or affidavit shall also
constitute sufficient proof of such signer's authority.
(c) The fact and date of the execution of any such
instrument or writing, or the authority of the Person executing the
same, may also be proved in any other manner which the Trustee deems
sufficient.
(d) The ownership of Securities shall be proved by the
register maintained by the Registrar.
11
(e) Any request, demand, authorization, direction,
notice, consent, waiver or other Act of the Holder of any Security
shall bind every future Holder of the same Security and the holder of
every Security issued upon the registration of transfer thereof or in
exchange therefor or in lieu thereof in respect of anything done,
omitted or suffered to be done by the Trustee or the Company in
reliance thereon, whether or not notation of such action is made upon
such Security.
(f) If the Company shall solicit from the Holders any
request, demand, authorization, direction, notice, consent, waiver or
other Act, the Company may, at its option, by or pursuant to a Board
Resolution, fix in advance a record date for the determination of
Holders entitled to give such request, demand, authorization,
direction, notice, consent, waiver or other Act, but the Company shall
have no obligation to do so. If such a record date is fixed, such
request, demand, authorization, direction, notice, consent, waiver or
other Act may be given before or after such record date, but only the
Holders of record at the close of business on such record date shall be
deemed to be Holders for the purposes of determining whether Holders of
the requisite proportion of outstanding Securities have authorized or
agreed or consented to such request, demand, authorization, direction,
notice, consent, waiver or other Act, and for that purpose the
outstanding Securities shall be computed as of such record date;
provided that no such authorization, agreement or consent by the
Holders on such record date shall be deemed effective unless it shall
become effective pursuant to the provisions of this Indenture not later
than six months after the record date.
ARTICLE 2
THE SECURITIES
Section 2.01. Form and Dating. The Securities and the Trustee's
certificate of authentication shall be substantially in the forms set forth on
Exhibits A-1 and A-2, which are a part of this Indenture and incorporated by
reference herein. The Securities may have notations, legends or endorsements
required by law, stock exchange rule or usage; provided that any such notation,
legend or endorsement required by usage is in a form acceptable to the Company.
The Company shall provide any such notations, legends or endorsements to the
Trustee in writing. Each Security shall be dated the date of its authentication.
(a) 144A Global Securities. Securities offered and sold
to qualified institutional buyers as defined in Rule 144A ("QIBS") in
reliance on Rule 144A shall be issued, initially only in the form of
144A Global Security, which shall be deposited with the Trustee at its
Corporate Trust Office, as custodian for the Depositary and registered
in the name of The Depository Trust Company ("DTC") or the nominee
thereof (such depositary, or any successor thereto, and any such
nominee being hereinafter referred to as the "Depositary"), duly
executed by the Company and authenticated by the Trustee as hereinafter
provided. The aggregate principal amount of the 144A Global Security
may from time to time be increased or decreased by adjustments made on
the records of the Trustee and the Depositary as hereinafter provided.
(b) Global Securities in General. Each Global Security
shall represent such of the outstanding Securities as shall be
specified therein and each shall provide that it shall
12
represent the aggregate amount of outstanding Securities from time to
time endorsed thereon and that the aggregate amount of outstanding
Securities represented thereby may from time to time be reduced or
increased, as appropriate, to reflect exchanges, redemptions and
conversions. Any adjustment of the aggregate principal amount of a
Global Security to reflect the amount of any increase or decrease in
the amount of outstanding Securities represented thereby shall be made
by the Trustee as required by Section 2.12 hereof and shall be made on
the records of the Trustee and the Depositary.
(c) Book-Entry Provisions. The Company shall execute and
the Trustee shall, in accordance with this Section 2.01(c),
authenticate and deliver initially one or more Global Securities that
(a) shall be registered in the name of the Depositary, (b) shall be
delivered by the Trustee to the Depositary or pursuant to the
Depositary's instructions and (c) shall bear legends substantially to
the following effect:
"UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO KAYDON
CORPORATION (THE "COMPANY") OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS
IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR
TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE &
CO., HAS AN INTEREST HEREIN. TRANSFERS OF THIS GLOBAL SECURITY
SHALL BE LIMITED TO TRANSFERS TO NOMINEES OF THE DEPOSITORY
TRUST COMPANY OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S
NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY
SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE
RESTRICTIONS SET FORTH IN ARTICLE TWO OF THE INDENTURE
REFERRED TO ON THE REVERSE HEREOF."
(d) Certificated Securities. Securities not issued as
interests in the Global Securities will be issued in certificated form
substantially in the form of Exhibit A-2 attached hereto.
13
Section 2.02. Execution and Authentication. The Securities shall be
executed on behalf of the Company by the manual or facsimile signature of any
Officer, under its corporate seal which shall be affixed, imprinted or
reproduced thereon, by facsimile or otherwise. Securities bearing the manual or
facsimile signatures of individuals who were at the time of the execution of the
Securities the proper Officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of authentication of such Securities.
No Security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein duly
executed by the Trustee by manual signature of an authorized signatory, and such
certificate upon any Security shall be conclusive evidence, and the only
evidence, that such Security has been duly authenticated and delivered
hereunder.
The Trustee shall authenticate and deliver Securities for original
issue in an aggregate principal amount of up to $200,000,000 (which shall
include the Initial Purchasers' option to purchase additional Securities in an
aggregate principal amount of up to $30,000,000) upon a Company Order without
any further action by the Company. The aggregate principal amount of Securities
outstanding at any time may not exceed the amount set forth in the foregoing
sentence, except as provided in Section 2.07. The Securities shall be issued
only in registered form without coupons and only in denominations of $1,000 of
principal amount and any integral multiple thereof.
Section 2.03. Registrar, Paying Agent and Conversion Agent. The Company
shall maintain an office or agency where Securities may be presented for
registration of transfer or for exchange ("Registrar"), an office or agency
where Securities may be presented for purchase or payment ("Paying Agent") and
an office or agency where Securities may be presented for conversion
("Conversion Agent"). The Registrar shall keep a register of the Securities and
of their transfer and exchange. The Company may have one or more co-registrars,
one or more additional paying agents and one or more additional conversion
agents. The term Paying Agent includes any additional paying agent, including
any named pursuant to Section 4.05. The term Conversion Agent includes any
additional conversion agent, including any named pursuant to Section 4.05.
The Company shall enter into an appropriate agency agreement with any
Registrar, Paying Agent, Conversion Agent or co-registrar (other than the
Trustee). Such agreement shall implement the provisions of this Indenture that
relate to such agent. The Company shall notify the Trustee of the name and
address of any such agent. If the Company fails to maintain a Registrar, Paying
Agent or Conversion Agent, the Trustee shall act as such and shall be entitled
to appropriate compensation therefor pursuant to Section 7.07. The Company or
any Subsidiary or an Affiliate of either of them may act as Paying Agent,
Registrar, Conversion Agent or co-registrar.
The Company initially appoints the Trustee as Registrar, Conversion
Agent and Paying Agent in connection with the Securities.
14
Section 2.04. Paying Agent to Hold Money in Trust. Except as otherwise
provided herein, not later 11:00 a.m. (New York City time) on the Business Day
prior to each due date of payments in respect of any Security, the Company shall
deposit with the Paying Agent a sum of money or shares of Common Stock, as the
case may be, sufficient to make such payments when so becoming due. The Company
shall require each Paying Agent (other than the Trustee) to agree in writing
that the Paying Agent shall hold in trust for the benefit of Holders or the
Trustee all money or shares of Common Stock, as the case may be, held by the
Paying Agent for the making of payments in respect of the Securities and shall
notify the Trustee of any Default by the Company in making any such payment. At
any time during the continuance of any such Default, the Paying Agent shall,
upon the written request of the Trustee, forthwith pay to the Trustee all moneys
or shares of Common Stock, as the case may be, held in trust. If the Company, a
Subsidiary or an Affiliate of either of them acts as Paying Agent, it shall
segregate the money or shares of Common Stock, as the case may be, held by it as
Paying Agent and hold it as a separate trust fund. The Company at any time may
require the Paying Agent to pay all money or shares of Common Stock, as the case
may be, held by it to the Trustee and to account for any funds disbursed by it.
Upon doing so, the Paying Agent shall have no further liability for such money
or shares of Common Stock, as the case may be.
Section 2.05. Holder Lists. The Trustee shall preserve in as current a
form as is reasonably practicable the most recent list available to it of the
names and addresses of Holders. If the Trustee is not the Registrar, the Company
shall cause to be furnished to the Trustee at least semiannually on May 15 and
November 15 and at such other times as the Trustee may request in writing a list
in such form and as of such date as the Trustee may reasonably require of the
names and addresses of Holders, which list may be dated not more than 15 days
prior to the time such information is furnished; provide however, that the list
of Holders provided on May 15 and November 15 shall contain the list of Holders
as of the immediately preceding May 1 and November 1, respectively.
Section 2.06. Transfer and Exchange.
(a) Subject to Section 2.12 hereof, upon surrender for
registration of transfer of any Securities, together with a written
instrument of transfer satisfactory to the Registrar duly executed by
the Securityholder or such Securityholder's attorney duly authorized in
writing, at the office or agency of the Company designated as Registrar
or co-registrar pursuant to Section 2.03, the Company shall execute and
the Trustee shall authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Securities of any
authorized denomination or denominations, of a like aggregate principal
amount. The Company shall not charge a service charge for any
registration of transfer or exchange, but the Company may require
payment of a sum sufficient to pay all taxes, assessments or other
governmental charges that may be imposed in connection with the
transfer or exchange of the Securities from the Securityholder
requesting such transfer or exchange.
At the option of the Holder, Securities may be exchanged for
other Securities of any authorized denomination or denominations, of a
like aggregate principal amount, upon surrender of the Securities to be
exchanged, together with a written instrument of transfer satisfactory
to the Registrar duly executed by the Securityholder or such
15
Securityholder's attorney duly authorized in writing, at such office or
agency. Whenever any Securities are so surrendered for exchange, the
Company shall execute, and the Trustee shall authenticate and deliver,
the Securities that the Holder making the exchange is entitled to
receive.
The Company shall not be required to make, and the Registrar
need not register, transfers or exchanges of Securities selected for
redemption (except, in the case of Securities to be redeemed in part,
the portion thereof not to be redeemed) or any Securities in respect of
which a Purchase Notice or Change in Control Purchase Notice has been
given and not withdrawn by the Holder thereof in accordance with the
terms of this Indenture (except, in the case of Securities to be
purchased in part, the portion thereof not to be purchased) or any
Securities for a period of 15 days before the mailing of a notice of
redemption of Securities to be redeemed.
(b) Notwithstanding any provision to the contrary herein,
so long as a Global Security remains outstanding and is held by or on
behalf of the Depositary, transfers of a Global Security, in whole or
in part, shall be made only in accordance with Section 2.12 and this
Section 2.06(b). Transfers of a Global Security shall be limited to
transfers of such Global Security in whole, or in part, to nominees of
the Depositary or to a successor of the Depositary or such successor's
nominee.
(c) Successive registrations and registrations of
transfers and exchanges as aforesaid may be made from time to time as
desired, and each such registration shall be noted on the register for
the Securities.
(d) Any Registrar appointed pursuant to Section 2.03
hereof shall provide to the Trustee such information as the Trustee may
reasonably require in connection with the delivery by such Registrar of
Securities upon transfer or exchange of Securities.
(e) No Registrar shall be required to make registrations
of transfer or exchange of Securities during any periods designated in
the text of the Securities or in this Indenture as periods during which
such registration of transfers and exchanges need not be made.
(f) If Securities are issued upon the transfer, exchange
or replacement of Securities subject to restrictions on transfer and
bearing the legends set forth on the forms of Securities attached
hereto as Exhibits A-1 and A-2 setting forth such restrictions
(collectively, the "Legend"), or if a request is made to remove the
Legend on a Security, the Securities so issued shall bear the Legend,
or the Legend shall not be removed, as the case may be, unless there is
delivered to the Company and the Registrar such satisfactory evidence,
which shall include an Opinion of Counsel, as may be reasonably
required by the Company and the Registrar, that neither the Legend nor
the restrictions on transfer set forth therein are required to ensure
that transfers thereof comply with the provisions of Rule 144A or Rule
144 under the Securities Act or that such Securities are not
"restricted" within the meaning of Rule 144 under the Securities Act.
Upon (i) provision of such satisfactory evidence, or (ii) notification
by the Company to the Trustee and registrar of the sale of such
Security pursuant to a registration statement that is effective
16
at the time of such sale, the Trustee, at the written direction of the
Company, shall authenticate and deliver a Security that does not bear
the Legend. If the Legend is removed from the face of a Security and
the Security is subsequently held by an Affiliate of the Company, the
Legend shall be reinstated.
Section 2.07. Replacement Securities. If any mutilated Security is
surrendered to the Trustee, or the Company and the Trustee receive evidence to
their satisfaction of the destruction, loss or theft of any Security, and there
is delivered to the Company and the Trustee such security or indemnity as may be
required by them to save each of them harmless, then, in the absence of notice
to the Company or the Trustee that such Security has been acquired by a
protected purchaser (within the meaning of Section 8-303 of the Uniform
Commercial Code), the Company shall execute, and upon the Company's written
request the Trustee shall authenticate and deliver, in exchange for any such
mutilated Security or in lieu of any such destroyed, lost or stolen Security, a
new Security of like tenor and principal amount, bearing a number not
contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, or is about to be purchased by the
Company pursuant to Article 3 hereof, the Company in its discretion may, instead
of issuing a new Security, pay or purchase such Security, as the case may be.
Upon the issuance of any new Securities under this Section, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security issued pursuant to this Section in lieu of any
mutilated, destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Company, whether or not the destroyed,
lost or stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all benefits of this Indenture equally and proportionately with any
and all other Securities duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities.
Section 2.08. Outstanding Securities; Determinations of Holders'
Action. Securities outstanding at any time are all the Securities authenticated
by the Trustee, except for those cancelled by it, those paid pursuant to Section
2.07, those delivered to it for cancellation pursuant to Section 2.10 and those
described in this Section 2.08 as not outstanding. A Security does not cease to
be outstanding because the Company or an Affiliate thereof holds the Security;
provided, however, that in determining whether the Holders of the requisite
principal amount of Securities have given or concurred in any request, demand,
authorization, direction, notice, consent or waiver hereunder, Securities owned
by the Company or any other obligor upon the Securities or any Affiliate of the
Company or such other obligor shall be disregarded and deemed not to be
outstanding, except that, in determining whether the Trustee shall be protected
in relying upon any such request, demand, authorization, direction, notice,
consent or waiver, only
17
Securities which a Responsible Officer of the Trustee actually knows to be so
owned shall be so disregarded. Subject to the foregoing, only Securities
outstanding at the time of such determination shall be considered in any such
determination (including, without limitation, determinations pursuant to
Articles 6 and 9).
If a Security is replaced pursuant to Section 2.07, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Security is held by a protected purchaser.
If the Paying Agent holds, in accordance with this Indenture, on a
Redemption Date, or on the Business Day following a Purchase Date or a Change in
Control Purchase Date, or on Stated Maturity, money sufficient to pay amounts
owed with respect to Securities payable on that date, then immediately after
such Redemption Date, Purchase Date, Change in Control Purchase Date or Stated
Maturity, as the case may be, such Securities shall cease to be outstanding and
interest (including Contingent Interest and Liquidated Damages, if any), on such
Securities shall cease to accrue; provided that if such Securities are to be
redeemed, notice of such redemption has been duly given pursuant to this
Indenture or provision therefor satisfactory to the Trustee has been made.
If a Security is converted in accordance with Article 10, then from and
after the time of conversion on the Conversion Date, such Security shall cease
to be outstanding and interest (including Contingent Interest, if any), shall
cease to accrue on such Security.
Section 2.09. Temporary Securities. Pending the preparation of
definitive Securities, the Company may execute, and upon Company Order the
Trustee shall authenticate and deliver, temporary Securities that are printed,
lithographed, typewritten, mimeographed or otherwise produced, in any authorized
denomination, substantially of the tenor of the definitive Securities in lieu of
which they are issued and with such appropriate insertions, omissions,
substitutions and other variations as the Officers executing such Securities may
determine, as conclusively evidenced by their execution of such Securities.
If temporary Securities are issued, the Company will cause definitive
Securities to be prepared without unreasonable delay. After the preparation of
definitive Securities, the temporary Securities shall be exchangeable for
definitive Securities upon surrender of the temporary Securities at the office
or agency of the Company designated for such purpose pursuant to Section 2.03,
without charge to the Holder. Upon surrender for cancellation of any one or more
temporary Securities, the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor a like principal amount of
definitive Securities of authorized denominations. Until so exchanged, the
temporary Securities shall in all respects be entitled to the same benefits
under this Indenture as definitive Securities.
Section 2.10. Cancellation. All Securities surrendered for payment,
purchase by the Company pursuant to Article 3, conversion, redemption or
registration of transfer or exchange (other than Securities exchanged pursuant
to Section 10.02) shall, if surrendered to any Person other than the Trustee, be
delivered to the Trustee and shall be promptly cancelled by it. The Company may
at any time deliver to the Trustee for cancellation any Securities previously
authenticated and delivered hereunder that the Company may have acquired in any
manner
18
whatsoever, and all Securities so delivered shall be promptly cancelled by the
Trustee. The Company may not issue new Securities to replace Securities it has
paid or delivered to the Trustee for cancellation or that any Holder has
converted pursuant to Article 10. No Securities shall be authenticated in lieu
of or in exchange for any Securities cancelled as provided in this Section,
except as expressly permitted by this Indenture. All cancelled Securities held
by the Trustee shall be disposed of by the Trustee in accordance with the
Trustee's customary procedure.
Section 2.11. Persons Deemed Owners. Prior to due presentment of a
Security for registration of transfer, the Company, the Trustee and any agent of
the Company or the Trustee may treat the Person in whose name such Security is
registered as the owner of such Security for the purpose of receiving payment of
the principal amount of the Security or the payment of any Redemption Price,
Purchase Price or Change in Control Purchase Price in respect thereof, and
accrued but unpaid interest thereon, for the purpose of conversion and for all
other purposes whatsoever, whether or not such Security be overdue, and neither
the Company, the Trustee nor any agent of the Company or the Trustee shall be
affected by notice to the contrary.
Section 2.12. Global Securities.
(a) A Global Security may not be transferred, in whole or
in part, to any Person other than the Depositary or a nominee or any
successor thereof, and no such transfer to any such other Person may be
registered; provided that the foregoing shall not prohibit any transfer
of a Security that is issued in exchange for a Global Security but is
not itself a Global Security. No transfer of a Security to any Person
shall be effective under this Indenture or the Securities unless and
until such Security has been registered in the name of such Person.
Notwithstanding any other provisions of this Indenture or the
Securities, transfers of a Global Security, in whole or in part, shall
be made only in accordance with Section 2.06 and this Section 2.12.
(b) Subject to the succeeding paragraph, every Security
shall be subject to the restrictions on transfer provided in the Legend
including the delivery of an Opinion of Counsel, if so provided.
Whenever any Restricted Security is presented or surrendered for
registration of transfer or for exchange for a Security registered in a
name other than that of the Holder, such Security must be accompanied
by a certificate in substantially the form set forth in Exhibit B,
dated the date of such surrender and signed by the Holder of such
Security, as to compliance with such restrictions on transfer. The
Registrar shall not be required to accept for such registration of
transfer or exchange any Security not so accompanied by a properly
completed certificate.
(c) The restrictions imposed by the Legend upon the
transferability of any Security shall cease and terminate when such
Security has been sold pursuant to an effective registration statement
under the Securities Act or transferred in compliance with Rule 144
under the Securities Act (or any successor provision thereto) or, if
earlier, upon the expiration of the holding period applicable to sales
thereof under Rule 144(k) under the Securities Act (or any successor
provision). Any Security as to which such restrictions on transfer
shall have expired in accordance with their terms or shall have
terminated may, upon a surrender of such Security for exchange to the
Registrar in
19
accordance with the provisions of this Section 2.12 (accompanied, in
the event that such restrictions on transfer have terminated by reason
of a transfer in compliance with Rule 144 or any successor provision,
by an Opinion of Counsel having substantial experience in practice
under the Securities Act and otherwise reasonably acceptable to the
Company and the Registrar, addressed to the Company and in form
acceptable to the Company, to the effect that the transfer of such
Security has been made in compliance with Rule 144 or such successor
provision), be exchanged for a new Security, of like tenor and
aggregate principal amount, which shall not bear the restrictive
Legend. The Company shall inform the Trustee of the effective date of
any registration statement registering the Securities under the
Securities Act. The Trustee shall not be liable for any action taken or
omitted to be taken by it in good faith in accordance with the
aforementioned Opinion of Counsel or registration statement.
(d) As used in the preceding clause (b) and (c) of this
Section 2.12, the term "transfer" encompasses any sale, pledge,
transfer, hypothecation or other disposition of any Security.
(e) The provisions of clauses (i), (ii), (iii) and (iv)
below shall apply only to Global Securities:
(i) Notwithstanding any other provisions of this
Indenture or the Securities, a Global Security shall not be
exchanged in whole or in part for a Security registered in the
name of any Person other than the Depositary or one or more
nominees thereof; provided that a Global Security may be
exchanged for Securities registered in the names of any Person
designated by the Depositary in the event that (x) the
Depositary has notified the Company that it is unwilling or
unable to continue as Depositary for such Global Security or
such Depositary has ceased to be a "clearing agency"
registered under the Exchange Act, and a successor Depositary
is not appointed by the Company within 90 days, (y) the
Company has provided the Depositary with written notice that
it has decided to discontinue use of the system of book-entry
transfer through the Depositary or any successor Depositary or
(z) an Event of Default has occurred and is continuing with
respect to the Securities. Any Global Security exchanged
pursuant to clauses (x) or (y) above shall be so exchanged in
whole and not in part, and any Global Security exchanged
pursuant to clause (z) above may be exchanged in whole or from
time to time in part as directed by the Depositary. Any
Security issued in exchange for a Global Security or any
portion thereof shall be a Global Security; provided that any
such Security so issued that is registered in the name of a
Person other than the Depositary or a nominee thereof shall
not be a Global Security.
(ii) Securities issued in exchange for a Global
Security or any portion thereof shall be issued in definitive,
fully registered form, without interest coupons, shall have an
aggregate principal amount equal to that of such Global
Security 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
the applicable legends provided for herein. Any Global
Security to be
20
exchanged in whole shall be surrendered by the Depositary to
the Trustee, as Registrar. With regard to any Global Security
to be exchanged in part, either such Global Security 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 Security, 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 deliver the Security
issuable on such exchange to or upon the order of the
Depositary or an authorized representative thereof.
(iii) Subject to the provisions of clause (v)
below, the registered Holder may grant proxies and otherwise
authorize any Person, including Agent Members (as defined
below) and Persons that may hold interests through Agent
Members, to take any action which a holder is entitled to take
under this Indenture or the Securities.
(iv) In the event of the occurrence of any of the
events specified in clause (i) above, the Company will
promptly make available to the Trustee a reasonable supply of
Certificated Securities in definitive, fully registered form,
without interest coupons.
(v) Neither any members of, or participants in,
the Depositary (collectively, the "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
Security registered in the name of the Depositary or any
nominee thereof, or under any such Global Security, 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
Security for all purposes whatsoever. Notwithstanding the
foregoing, nothing herein shall prevent the Company, the
Trustee or any agent of the Company or the Trustee from giving
effect to any written certification, proxy or other
authorization furnished by the Depositary or 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 Security.
(vi) With respect to any Global Security, the
Company, the Registrar and the Trustee shall be entitled to
treat the Person in whose name such Global Security is
registered as the absolute owner of such Security for all
purposes of this Indenture, and neither the Company, the
Registrar nor the Trustee shall have any responsibility or
obligation to any Agent Members or other beneficial owners of
the Securities represented by such Global Security. Without
limiting the immediately preceding sentence, neither the
Company, the Registrar nor the Trustee shall have any
responsibility or obligation with respect to (a) the accuracy
of the records of any Depositary or any other Person with
respect to any ownership interest in any Global Security, (b)
the delivery to any Person, other than a Holder, of any notice
with respect to the Securities represented by a Global
21
Security, including any notice of redemption or refunding, (c)
the selection of the particular Securities or portions thereof
to be redeemed or refunded in the event of a partial
redemption or refunding of part of the Securities Outstanding
or (d) the payment to any Person, other than a Holder, of any
amount with respect to the principal of, redemption premium,
if any, purchase price or interest (including Contingent
Interest and Liquidated Damages) with respect to any Global
Security.
Section 2.13. CUSIP Numbers. The Company may issue the Securities with
one or more "CUSIP" numbers (if then generally in use), and, if so, the Trustee
shall use "CUSIP" numbers in notices of redemption as a convenience to Holders;
provided that any such notice may state that no representation is made as to the
correctness of such numbers either as printed on the Securities or as contained
in any notice of a redemption and that reliance may be placed only on the other
identification numbers printed on the Securities, 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 AND PURCHASES
Section 3.01. Right To Redeem; Notices To Trustee.
(a) Optional Redemption. The Company, at its option, may
redeem the Securities in accordance with the provisions of paragraphs 5
and 7 of the Securities and at the Redemption Price specified in
paragraph 5 of the Securities, together with accrued but unpaid
interest (including Contingent Interest and Liquidated Damages, if
any), thereon up to but not including the Redemption Date; provided
that if the Redemption Date is on or after an interest record date, but
on or prior to the related interest payment date, interest will be
payable to the Holders in whose names the Securities are registered at
the close of business on the relevant record date for payment of such
interest.
(b) Notice to Trustee. If the Company elects to redeem
Securities pursuant to this Section 3.01, it shall notify the Trustee
in writing of the Redemption Date, the principal amount of Securities
to be redeemed and the Redemption Price. The Company shall give the
notice to the Trustee provided for in this Section 3.01(b) by a Company
Order at least 30 days but not more than 60 days before the Redemption
Date (unless a shorter notice shall be satisfactory to the Trustee).
Section 3.02. Selection of Securities to Be Redeemed. If less than all
the Securities are to be redeemed, subject to the procedures of the Depositary
in the case of Global Securities to be so redeemed, the Trustee shall select the
Securities to be redeemed by any method that the Trustee deems fair and
appropriate. The Trustee may select for redemption portions of the principal
amount of Securities that have denominations of $1,000 and integral multiples
thereof.
Provisions of this Indenture that apply to Securities called for
redemption also apply to portions of Securities called for redemption. The
Trustee shall notify the Company promptly of the Securities or portions of
Securities to be redeemed. If any Security selected for partial redemption is
converted in part before termination of the conversion right with respect to the
22
portion of the Security so selected, the converted portion of such Security
shall be deemed (so far as possible) to be the portion selected for redemption.
Securities that have been converted during a selection of Securities to be
redeemed may be treated by the Trustee as outstanding for the purpose of such
selection.
Section 3.03. Notice of Redemption. At least 30 days but not more than
60 days before a Redemption Date, the Company shall mail a notice of redemption
by first-class mail, postage prepaid, to each Holder of Securities to be
redeemed.
The notice shall identify the Securities to be redeemed and shall
state:
(a) the Redemption Date;
(b) the Redemption Price and, to the extent known at the
time of such notice the amount of interest (including Contingent
Interest and Liquidated Damages, if any), payable on the Redemption
Date;
(c) the current Conversion Price;
(d) the name and address of the Paying Agent and
Conversion Agent;
(e) that Securities called for redemption may be
converted at any time before the close of business on the second
Business Day immediately preceding the Redemption Date;
(f) that Holders who want to convert Securities must
satisfy the requirements set forth in paragraph 8 of the Securities;
(g) that Securities called for redemption must be
surrendered to the Paying Agent to collect the Redemption Price
therefor, together with accrued but unpaid interest (including
Contingent Interest and Liquidated Damages, if any);
(h) if fewer than all the outstanding Securities are to
be redeemed, the certificate numbers, if any, and principal amounts of
the particular Securities to be redeemed;
(i) that, unless the Company defaults in making such
payment, interest (including Contingent Interest and Liquidated
Damages, if any), on Securities called for redemption will cease to
accrue on and after the Redemption Date and the Securities will cease
to be convertible; and
(j) the CUSIP number of the Securities.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense; provided that the
Company makes such request prior to the date by which such notice of redemption
must be given to Holders in accordance with this Section 3.03 and the Company
provides the Trustee with all information required for such notice of
redemption.
23
Section 3.04. Effect of Notice of Redemption. Once notice of redemption
is given, Securities called for redemption become due and payable on the
Redemption Date and at the Redemption Price together with accrued but unpaid
interest (including Contingent Interest and Liquidated Damages, if any), thereon
stated in the notice, except for Securities which are converted in accordance
with the terms of this Indenture. Upon surrender to the Paying Agent, such
Securities shall be paid at the Redemption Price stated in the notice, together
with accrued but unpaid interest (including Contingent Interest and Liquidated
Damages, if any), thereon, up to but not including the Redemption Date.
Section 3.05. Deposit of Redemption Price. Prior to 11:00 a.m. (New
York City time) on the Redemption Date, the Company shall deposit with the
Paying Agent (or if the Company or a Subsidiary or an Affiliate of either of
them is the Paying Agent, shall segregate and hold in trust) money sufficient to
pay the aggregate Redemption Price of all Securities to be redeemed on that
date, together with accrued but unpaid interest (including Contingent Interest
and Liquidated Damages, if any), thereon, up to but not including the Redemption
Date other than Securities or portions of Securities called for redemption that
on or prior thereto have been delivered by the Company to the Trustee for
cancellation or have been converted. The Paying Agent shall as promptly as
practicable return to the Company any money not required for that purpose
because of conversion of Securities pursuant to Article 10. If such money is
then held by the Company in trust and is not required for such purpose it shall
be discharged from such trust.
Section 3.06. Securities Redeemed in Part. Upon surrender of a Security
that is redeemed in part, the Company shall execute and the Trustee shall
authenticate and deliver to the Holder, without service charge, a new Security
or Securities, of any authorized denomination as requested by such Holder in
aggregate principal amount equal to, and in exchange for, the unredeemed portion
of the principal amount of the Security surrendered.
Section 3.07. Sinking Fund. There shall be no sinking fund provided for
the Securities.
Section 3.08. Purchase of Securities at Option of the Holder.
(a) General. Securities shall be purchased by the Company
in accordance with the provisions of paragraph 6 of the Securities on
May 23, 2008, May 23, 2013 and May 23, 2018 (each, a "Purchase Date")
at a purchase price in cash per Security equal to 100% of the aggregate
principal amount of the Security (the "Purchase Price"), together with
accrued but unpaid interest (including Contingent Interest and
Liquidated Damages, if any), thereon, up to but not including the
Purchase Date; provided that if the Purchase Date is on or after an
interest record date but on or prior to the related interest payment
date, interest and Liquidated Damages, if any, will be payable to the
Holders in whose names the Securities are registered at the close of
business on the relevant record date.
Purchases of Securities hereunder shall be made, at the option of the
Holder thereof, upon:
(i) delivery to the Company and the Paying Agent
by the Holder of a written notice of purchase (a "Purchase
Notice") at any time from the opening of
24
business on the date that is 30 Business Days prior to the
Purchase Date until the close of business on the Business Day
prior to such Purchase Date stating:
- the certificate number of the Security which the Holder will
deliver to be purchased;
- the portion of the principal amount of the Security which the
Holder will deliver to be purchased, which portion must be in
principal amounts of $1,000 or an integral multiple thereof;
and
- that such Security shall be purchased as of the Purchase Date
pursuant to the terms and conditions specified in paragraph 6
of the Securities and in this Indenture.
(ii) delivery or book-entry transfer of such
Security to the Paying Agent prior to, on or after the
Purchase Date (together with all necessary endorsements) at
the offices of the Paying Agent, such delivery being a
condition to receipt by the Holder of the Purchase Price
therefor, together with accrued but unpaid interest (including
Contingent Interest and Liquidated Damages, if any); provided,
however, that such Purchase Price, together with accrued but
unpaid interest (including Contingent Interest and Liquidated
Damages, if any), shall be so paid pursuant to this Section
3.08 only if the Security so delivered to the Paying Agent
shall conform in all respects to the description thereof in
the related Purchase Notice, as determined by the Company in
its sole discretion.
The Company shall purchase from the Holder thereof, pursuant to this
Section 3.08, a portion of a Security if the principal amount of such portion is
$1,000 or an integral multiple of $1,000. Provisions of this Indenture that
apply to the purchase of all of a Security also apply to the purchase of such
portion of such Security.
Any purchase by the Company contemplated pursuant to the provisions of
this Section 3.08 shall be consummated by the delivery of the consideration to
be received by the Holder promptly following the later of the Purchase Date and
the time of delivery or book-entry transfer of the Security.
Notwithstanding anything herein to the contrary, any Holder delivering
to the Paying Agent the Purchase Notice contemplated by this Section 3.08(a)
shall have the right to withdraw such Purchase Notice at any time prior to the
close of business on the Business Day prior to the Purchase Date by delivery of
a written notice of withdrawal to the Paying Agent at the principal office of
the Paying Agent in accordance with Section 3.10.
The Paying Agent shall promptly notify the Company of the receipt by it
of any Purchase Notice or written notice of withdrawal thereof.
(b) Company Notice. In connection with any purchase of
Securities pursuant to Section 3.08 or 3.09, the Company shall give
written notice of the Purchase Date or Change in Control Purchase Date,
as applicable, to the Holders (the "Company Notice").
25
The Company Notice shall be sent by first-class mail to the Trustee and
to each Holder not less than 30 Business Days prior to any Purchase
Date (the "Company Notice Date") or not less than 30 days after the
occurrence of a Change in Control, as the case may be. Each Company
Notice shall include a form of Purchase Notice to be completed by a
Holder and shall state:
(i) the Purchase Price, Change in Control
Purchase Price, Conversion Price and, to the extent known at
the time of such notice, the amount of Contingent Interest and
Liquidated Damages, if any, that will be payable with respect
to the Securities on the Purchase Date;
(ii) the name and address of the Paying Agent and
the Conversion Agent;
(iii) that Securities as to which a Purchase
Notice or Change in Control Purchase Notice has been given may
be converted only if the applicable Purchase Notice or Change
in Control Purchase Notice has been withdrawn in accordance
with the terms of this Indenture;
(iv) that Securities must be surrendered to the
Paying Agent to collect payment of the Purchase Price or
Change in Control Purchase Price and accrued but unpaid
interest and Contingent Interest and Liquidated Damages, if
any;
(v) that the Purchase Price or Change in Control
Purchase Price for any Securities as to which a Purchase
Notice or Change in Control Purchase Notice has been given and
not withdrawn, together with any accrued Contingent Interest
and Liquidated Damages payable with respect thereto, shall be
paid promptly following the later of the Purchase Date or
Change in Control Purchase Date and the time of surrender of
such Securities as described in (iv);
(vi) the procedures the Holder must follow under
Section 3.08 or Section 3.09, as the case may be;
(vii) briefly, the conversion rights of the
Securities;
(viii) that, unless the Company defaults in making
payment of such Purchase Price or Change in Control Purchase
Price, interest (including Contingent Interest and Liquidated
Damages, if any), on Securities covered by any Purchase Notice
or Change in Control Purchase Notice will cease to accrue on
and after the Purchase Date or Change in Control Purchase
Date;
(ix) the CUSIP or ISIN number of the Securities;
and
(x) the procedures for withdrawing a Purchase
Notice or Change in Control Purchase Notice (as specified in
Section 3.10).
26
At the Company's request and at the Company's expense, the Trustee
shall give the Company Notice in the Company's name; provided, however, that, in
all cases, the text of the Company Notice shall be prepared by the Company.
Section 3.09. Purchase of Securities at Option of the Holder upon
Change in Control.
(a) If at any time that Securities remain outstanding
there shall have occurred a Change in Control, Securities shall be
repurchased by the Company, at the option of the Holder thereof, at a
purchase price in cash (the "Change in Control Purchase Price") equal
to the principal amount plus accrued but unpaid interest (including
Contingent Interest and Liquidated Damages, if any), thereon, up to but
not including the date (the "Change in Control Purchase Date") fixed by
the Company that is not less than 30 days nor more than 45 days after
the date the Company Notice is given, subject to satisfaction by or on
behalf of the Holder of the requirements set forth in Section 3.09(c).
(b) The Company, or at its request (which must be
received by the Trustee at least three Business Days (or such lesser
period as agreed to by the Trustee) prior to the date the Trustee is
requested to give such notice as described below) the Trustee in the
name of and at the expense of the Company, shall mail to all Holders of
record of the Securities a notice (a "Company Change in Control
Notice") of the occurrence of a Change in Control and of the repurchase
right arising as a result thereof, including the information required
by Section 3.08(b) hereof, not less than 30 days after the occurrence
of such Change in Control. The Company shall promptly furnish to the
Trustee a copy of such notice.
(c) For a Security to be so repurchased at the option of
the Holder, the Paying Agent must receive such Security with the form
entitled "Option to Elect Repurchase Upon a Change in Control" (a
"Change in Control Purchase Notice") on the reverse thereof duly
completed, together with such Security duly endorsed for transfer, on
or before the Change in Control Purchase Date. All questions as to the
validity, eligibility (including time of receipt) and acceptance of any
Security for redemption shall be determined by the Company, whose
determination shall be final and binding.
The Company shall purchase from the Holder thereof, pursuant to this
Section 3.09, a portion of a Security if the principal amount of such portion is
$1,000 or an integral multiple of $1,000. Provisions of this Indenture that
apply to the purchase of all of a Security also apply to the purchase of such
portion of such Security.
Any purchase by the Company contemplated pursuant to the provisions of
this Section 3.09 shall be consummated by the delivery of the consideration to
be received by the Holder promptly following the later of the Change in Control
Purchase Date and the time of delivery of the Security to the Paying Agent in
accordance with this Section 3.09.
Notwithstanding anything herein to the contrary, any Holder delivering
to the Paying Agent the Change in Control Purchase Notice contemplated by this
Section 3.09(c) shall have the right to withdraw such Change in Control Purchase
Notice at any time prior to the close of
27
business on the Business Day preceding the Change in Control Purchase Date by
delivery of a written notice of withdrawal to the Paying Agent in accordance
with Section 3.10.
The Paying Agent shall promptly notify the Company of the receipt by it
of any Change in Control Purchase Notice or written withdrawal thereof.
Notwithstanding anything herein to the contrary, the Company's
obligations pursuant to this Section 3.09 shall be satisfied if a third party
makes an offer to repurchase outstanding Securities after a Change in Control in
the manner and at the times and otherwise in compliance in all material respects
with the requirements of this Section 3.09 and purchases all Securities properly
tendered and not withdrawn pursuant to the requirements of this Section 3.09.
Section 3.10. Effect of Purchase Notice or Change in Control Purchase
Notice. Upon receipt by the Paying Agent of the Purchase Notice or Change in
Control Purchase Notice specified in Section 3.08 or Section 3.09(c), as
applicable, the Holder of the Security in respect of which such Purchase Notice
or Change in Control Purchase Notice, as the case may be, was given shall
(unless such Purchase Notice or Change in Control Purchase Notice is withdrawn
as specified in the following two paragraphs) thereafter be entitled to receive
solely the Purchase Price or Change in Control Purchase Price, together with
accrued but unpaid interest (including Contingent Interest and Liquidated
Damages, if any), thereon, to but not including the Purchase Date or Change in
Control Purchase Date, as the case may be, with respect to such Security. Such
Purchase Price or Change in Control Purchase Price, together with accrued but
unpaid interest (including Contingent Interest and Liquidated Damages, if any),
thereon, to but not including the Purchase Date or Change in Control Purchase
Date, as the case may be, shall be paid to such Holder, subject to receipt of
funds by the Paying Agent, promptly following the later of (x) the Purchase Date
or the Change in Control Purchase Date, as the case may be, with respect to such
Security (provided that the conditions in Section 3.08 or Section 3.09, as
applicable, have been satisfied) and (y) the time of delivery or book-entry
transfer of such Security to the Paying Agent by the Holder thereof in the
manner required by Section 3.08 or Section 3.09(c), as applicable. Securities in
respect of which a Purchase Notice or Change in Control Purchase Notice, as the
case may be, has been given by the Holder thereof may not be converted pursuant
to Article 10 hereof on or after the date of the delivery of such Purchase
Notice or Change in Control Purchase Notice, as the case may be, unless such
Purchase Notice or Change in Control Purchase Notice, as the case may be, has
first been validly withdrawn as specified in the following two paragraphs.
A Purchase Notice or Change in Control Purchase Notice, as the case may
be, may be withdrawn by means of a written notice of withdrawal delivered to the
office of the Paying Agent in accordance with the Purchase Notice or Change in
Control Purchase Notice, as the case may be, at any time prior to the close of
business on the Business Day prior to the Purchase Date or prior to the close of
business on the Business Day prior to the Change in Control Purchase Date, as
the case may be, specifying:
(i) the certificate number, if any, of the
Security in respect of which such notice of withdrawal is
being submitted;
28
(ii) the principal amount of the Security with
respect to which such notice of withdrawal is being submitted;
and
(iii) the principal amount, if any, of such
Security which remains subject to the original Purchase Notice
or Change in Control Purchase Notice, as the case may be, and
which has been or will be delivered for purchase by the
Company.
There shall be no purchase of any Securities pursuant to Section 3.08
or Section 3.09 or redemption pursuant to Section 3.01 if there has occurred
prior to, on or after, as the case may be, the giving, by the Holders of such
Securities, of the required Purchase Notice (or Change in Control Purchase
Notice, as the case may be) and is continuing an Event of Default (other than a
default in the payment of the Purchase Price or Change in Control Purchase
Price, as the case may be). The Paying Agent will promptly return to the
respective Holders thereof any Securities (x) with respect to which a Purchase
Notice or Change in Control Purchase Notice, as the case may be, has been
withdrawn in compliance with this Indenture, or (y) held by it during the
continuance of an Event of Default (other than a default in the payment of the
Purchase Price or Change in Control Purchase Price, as the case may be) in which
case, upon such return, the Purchase Notice or Change in Control Purchase Notice
with respect thereto shall be deemed to have been withdrawn.
Section 3.11. Deposit of Purchase Price or Change in Control Purchase
Price. Prior to 11:00 a.m. (New York City time) on the Business Day prior to the
Purchase Date or the Change in Control Purchase Date, as the case may be, the
Company shall deposit with the Trustee or with the Paying Agent (or, if the
Company or a Subsidiary or an Affiliate of either of them is acting as the
Paying Agent, shall segregate and hold in trust as provided in Section 2.04) an
amount of money (in immediately available funds if deposited on such Business
Day) sufficient to pay the aggregate Purchase Price or Change in Control
Purchase Price, as the case may be, together with accrued but unpaid interest
(including Contingent Interest and Liquidated Damages, if any), thereon, to but
not including the Purchase Date or Change in Control Purchase Price, as the case
may be, of all the Securities or portions thereof which are to be purchased as
of the Purchase Date or Change in Control Purchase Date, as the case may be.
Section 3.12. Securities Purchased in Part. Any Certificated Security
that is to be purchased only in part shall be surrendered at the office of the
Paying Agent (with, if the Company or the Trustee so requires, due endorsement
by, or a written instrument of transfer in form satisfactory to the Company and
the Trustee duly executed by, the Holder thereof or such ▇▇▇▇▇▇'s attorney duly
authorized in writing) and the Company shall execute and the Trustee shall
authenticate and deliver to the Holder of such Security, without service charge,
a new Security or Securities, of any authorized denomination as requested by
such Holder in aggregate principal amount equal to, and in exchange for, the
portion of the principal amount of the Security so surrendered which is not
purchased.
Section 3.13. Covenant to Comply with Securities Laws upon Purchase of
Securities. When complying with the provisions of Sections 3.08 or 3.09 hereof
(provided that such offer or purchase constitutes an "issuer tender offer" for
purposes of Rule 13e-4 (which term, as used herein, includes any successor
provision thereto) under the Exchange Act at the time of such
29
offer or purchase), the Company shall (i) comply in all material respects with
Rule 13e-4 and Rule 14e-1 under the Exchange Act, (ii) file the related Schedule
TO (or any successor schedule, form or report) under the Exchange Act, and (iii)
otherwise comply in all material respects with all Federal and state securities
laws so as to permit the rights and obligations under Sections 3.08 or 3.09 to
be exercised in the time and in the manner specified in Sections 3.08 or 3.09.
Section 3.14. Repayment to the Company. The Trustee and the Paying
Agent shall return to the Company any cash that remains unclaimed as provided in
paragraph 11 of the Securities, together with interest or dividends, if any,
thereon (subject to the provisions of Section 7.01(f)), held by them for the
payment of the Purchase Price or Change in Control Purchase Price, as the case
may be, and accrued but unpaid interest (including Contingent Interest and
Liquidated Damages, if any); provided, however, that to the extent that the
aggregate amount of cash deposited by the Company pursuant to Section 3.11
exceeds the aggregate Purchase Price or Change in Control Purchase Price, as the
case may be, of the Securities or portions thereof which the Company is
obligated to purchase as of the Purchase Date or Change in Control Purchase
Date, as the case may be, and accrued but unpaid interest thereon (including
Contingent Interest and Liquidated Damages, if any), then, unless otherwise
agreed in writing with the Company, promptly after the Business Day following
the Purchase Date or Change in Control Purchase Date, as the case may be, the
Trustee shall return any such excess to the Company together with interest or
dividends, if any, thereon (subject to the provisions of Section 7.01(f)).
ARTICLE 4
COVENANTS
Section 4.01. Payment of Securities. The Company shall promptly make
all payments in respect of the Securities on the dates and in the manner
provided in the Securities or pursuant to this Indenture. Any amounts to be
given to the Trustee or Paying Agent, as the case may be, shall be deposited
with the Trustee or Paying Agent, as the case may be, by 11:00 a.m. (New York
City time) on the dates required pursuant to Section 2.04 hereof. Interest
installments, Liquidated Damages, principal amount, Redemption Price, Purchase
Price, Change in Control Purchase Price and interest, if any, due on overdue
amounts shall be considered paid on the applicable date due if at 11:00 a.m.
(New York City time) on such date (or, in the case of a Purchase Price or Change
in Control Purchase Price, on the Business Day prior to the applicable Purchase
Date or Change in Control Purchase Date, as the case may be) the Trustee or the
Paying Agent, as the case may be, holds, in accordance with this Indenture,
money sufficient to pay all such amounts then due.
The Company shall, to the extent permitted by law, pay interest on
overdue amounts at the rate per annum set forth in paragraph 1 of the
Securities, compounded semiannually, which interest shall accrue from the date
such overdue amount was originally due to the date payment of such amount,
including interest thereon, has been made or duly provided for. All such
interest shall be payable on demand. The accrual of such interest on overdue
amounts shall be in addition to the continued accrual of interest on the
Securities.
Section 4.02. SEC and Other Reports. The Company shall file with the
Trustee, within 15 days after it files such annual and quarterly reports,
information, documents and other reports
30
with the SEC, copies of its annual report and of the information, documents and
other reports (or copies of such portions of any of the foregoing as the SEC may
by rules and regulations prescribe) which the Company is required to file with
the SEC pursuant to Section 13 or 15(d) of the Exchange Act. In the event the
Company is at any time no longer subject to the reporting requirements of
Section 13 or 15(d) of the Exchange Act, it shall continue to provide the
Trustee with reports containing substantially the same information as would have
been required to be filed with the SEC had the Company continued to have been
subject to such reporting requirements. In such event, such reports shall be
provided to the Trustee at the times the Company would have been required to
provide reports had it continued to have been subject to such reporting
requirements. In addition, the Company shall comply with the other provisions of
TIA Section 314(a).
Section 4.03. Compliance Certificate. The Company shall deliver to the
Trustee within 120 days after the end of each fiscal year of the Company
(beginning with the fiscal year ending on December 31, 2003) an Officers'
Certificate, stating whether or not to the best knowledge of the signers 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 status thereof of
which they may have knowledge.
Section 4.04. Further Instruments and Acts. Upon request of the
Trustee, the Company will execute and deliver such further instruments and do
such further acts as may be reasonably necessary or proper to carry out more
effectively the purposes of this Indenture.
Section 4.05. Maintenance of Office or Agency. The Company will
maintain in the Borough of Manhattan, The City of New York, an office or agency
of the Trustee, Registrar, Paying Agent and Conversion Agent where Securities
may be presented or surrendered for payment, where Securities may be surrendered
for registration of transfer, exchange, purchase, redemption or conversion and
where notices and demands to or upon the Company in respect of the Securities
and this Indenture may be served. The Trustee's agency located at SunTrust Bank,
c/o Computershare Trust Company, Wall Street Plaza, ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇.▇. 10005 shall initially be such office or agency for all of the
aforesaid purposes. The Company shall give prompt written notice to the Trustee
of the location, and of any change in the location, of any such office or agency
(other than a change in the location of the office or agency of 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
address of the Trustee set forth in Section 12.02. The Company may also from
time to time designate one or more other offices or agencies where the
Securities may be presented or surrendered for any or all such purposes and may
from time to time rescind such designations; provided, however, that no such
designation or rescission shall in any manner relieve the Company of its
obligation to maintain an office or agency in the Borough of Manhattan, the City
of New York, for such purposes.
Section 4.06. Delivery of Certain Information. At any time when the
Company is not subject to Section 13 or 15(d) of the Exchange Act, upon the
request of a Holder or any Beneficial Owner of Securities or holder or
Beneficial Owner of Common Stock delivered upon conversion thereof, the Company
will promptly furnish or cause to be furnished Rule 144A
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Information (as defined below) to such Holder or any Beneficial Owner of
Securities or holder or Beneficial Owner of Common Stock, or to a prospective
purchaser of any such security designated by any such holder, as the case may
be, to the extent required to permit compliance by such Holder or holder with
Rule 144A under the Securities Act in connection with the resale of any such
security. "Rule 144A Information" shall be such information as is specified
pursuant to Rule 144A(d)(4) under the Securities Act or any successor
provisions. Whether a Person is a Beneficial Owner shall be determined by the
Company to the Company's reasonable satisfaction.
Section 4.07. Tax Treatment of Securities. The Company and the Holders,
by purchasing the Securities, agree that (i) the Securities are contingent
payment debt instruments as described in Treasury Regulations Section 1.1275-4,
(ii) each Holder shall be bound by the Company's application of the Treasury
Regulations to the Securities, including the Company's determination that the
rate at which interest will be deemed to accrue on the Securities for United
States federal income tax purposes will be 8.5% compounded semi-annually, which
is the rate comparable to the rate at which the Company would borrow on a
noncontingent, nonconvertible borrowing with terms and conditions otherwise
comparable to the Securities, (iii) each Holder shall use the projected payment
schedule with respect to the Securities, attached hereto as Exhibit C and
provided by the Company to the Holder, as provided in Treasury Regulations
Section 1.1275-4(b)(4), to determine its interest accruals and adjustments as
provided in Treasury Regulations Section 1.1275-4(b)(4)(iv), and (iv) the
Company and each Holder will not take any position on a tax return inconsistent
with (i), (ii), or (iii), unless required by applicable law.
Section 4.08. Liquidated Damages. If at any time Liquidated Damages
become payable by the Company pursuant to the Registration Rights Agreement, the
Company shall promptly deliver to the Trustee a certificate to that effect and
stating (i) the amount of such Liquidated Damages that are payable and (ii) the
date on which such damages are payable pursuant to the terms of the Registration
Rights Agreement. Unless and until a Responsible Officer of the Trustee receives
such a certificate, the Trustee may assume without inquiry that no Liquidated
Damages are payable. If the Company has paid Liquidated Damages directly to the
Persons entitled to them, the Company shall deliver to the Trustee a certificate
setting forth the particulars of such payment.
Section 4.09. Prohibition on Layering Debt. The Company shall not incur
or suffer to exist Indebtedness that by its terms (or by the terms of any
agreement governing such Indebtedness) is senior in right of payment to the
Securities and expressly subordinate in right of payment to any other
Indebtedness of Company.
ARTICLE 5
SUCCESSOR CORPORATION
Section 5.01. When the Company May Merge or Transfer Assets. The
Company shall not consolidate with or merge with or into any other Person or
convey, transfer or lease its properties and assets substantially as an entirety
to any Person, unless:
(a) (1) the Company shall be the continuing corporation
or (2) the Person (if other than the Company) formed by such
consolidation or into which the Company is
32
merged or the Person which acquires by conveyance, transfer or lease
the properties and assets of the Company substantially as an entirety
(i) shall be a corporation or limited liability company organized and
validly existing under the laws of the United States or any State
thereof or the District of Columbia, and (ii) shall expressly assume,
by an indenture supplemental hereto, executed and delivered to the
Trustee, in form satisfactory to the Trustee, all of the obligations of
the Company under the Securities and this Indenture;
(b) immediately after giving effect to such transaction,
no Default shall have occurred and be continuing; and
(c) the Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, conveyance, transfer or lease and, if a
supplemental indenture is required in connection with such transaction,
such supplemental indenture, comply with this Article 5 and that all
conditions precedent herein provided for relating to such transaction
have been satisfied.
For purposes of the foregoing, the transfer (by lease, assignment, sale
or otherwise) of the properties and assets of one or more Subsidiaries (other
than to the Company or another Subsidiary), which, if such assets were owned by
the Company would constitute all or substantially all of the properties and
assets of the Company shall be deemed to be the transfer of all or substantially
all of the properties and assets of the Company. The successor Person formed by
such consolidation or into which the Company is merged or the successor Person
to which such conveyance, transfer or lease is made shall succeed to, and
(except in the case of a lease) be substituted for, and may exercise every right
and power of, the Company under this Indenture with the same effect as if such
successor had been named as the Company herein; and thereafter, except in the
case of a lease and except for obligations the Company may have under a
supplemental indenture pursuant to Section 9.06, the Company shall be discharged
from all obligations and covenants under this Indenture and the Securities.
Subject to Section 9.06, the Company, the Trustee and the successor Person shall
enter into a supplemental indenture to evidence the succession and substitution
of such successor Person and such discharge and release of the Company, as
applicable.
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.01. Events of Default. Subject to the provisions set forth
below in this Section 6.01, an "Event of Default" occurs if:
(a) the failure to pay interest (including Contingent
Interest and Liquidated Damages, if any) on any Securities when the
same becomes due and payable and the default continues for a period of
30 days, whether or not such failure shall be due to compliance with
Article 11 of this Indenture or agreements with respect to any other
Indebtedness or any other reason;
(b) the failure to pay the principal of any Securities,
when such principal becomes due and payable, at maturity, upon
acceleration, upon redemption or otherwise
33
(including the failure to make an offer to repurchase the Securities
upon a Change in Control or make a payment to purchase Securities
tendered pursuant to a Purchase Notice or Change in Control Purchase
Notice), whether or not such failure shall be due to compliance with
Article 11 of this Indenture or agreements with respect to any other
Indebtedness or any other reason;
(c) a default in the observance or performance of any
other covenant or agreement contained in this Indenture which default
continues for a period of 30 days after the Company receives written
notice specifying the default (and demanding that such default be
remedied) from the Trustee or the Holders of at least 25% of the
outstanding principal amount of the Securities (except in the case of a
default with respect to Section 5.01, which will constitute an Event of
Default with such notice requirement but without such passage of time
requirement);
(d) the failure to pay at final maturity (giving effect
to any applicable grace periods and any extensions thereof) the
principal amount of any Recourse Indebtedness of the Company or any
Subsidiary of Company, or the acceleration of the final stated maturity
of any such Recourse Indebtedness if the aggregate principal amount of
such Recourse Indebtedness, together with the principal amount of any
other such Recourse Indebtedness in default for failure to pay
principal at final maturity or which has been accelerated, aggregates
$15.0 million or more at any time;
(e) one or more judgments in an aggregate amount in
excess of $15.0 million shall have been rendered against the Company or
any of its Subsidiaries and remain undischarged, unpaid or unstayed for
a period of 60 days after such judgment or judgments become final and
nonappealable;
(f) The Company or any of its Significant Subsidiaries
pursuant to or under or within the meaning of any Bankruptcy Law:
(i) commences a voluntary case or proceeding;
(ii) consents to the entry of an order for relief
against it in an involuntary case or proceeding;
(iii) consents to the appointment of a custodian
of it or for all or substantially all of its property;
(iv) makes a general assignment for the benefit
of its creditors; or
(v) shall generally not pay its debts when such
debts become due or shall admit in writing its inability to
pay its debts generally; or
(g) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(i) is for relief against the Company or any
Significant Subsidiary of the Company in an involuntary case
or proceeding;
34
(ii) appoints a custodian of the Company or any
Significant Subsidiary of the Company for all or substantially
all of its properties; or
(iii) orders the liquidation of the Company or any
Significant Subsidiary of Company;
and in each case the order or decree remains unstayed and in effect for 60
consecutive days.
The Events of Default described in clauses (d), (e), (f) and (g) above
with respect to a Significant Subsidiary shall not apply if such Person was not
a Significant Subsidiary at the time such event or condition occurred unless, in
the case of clause (d) or (e) above, the Company or another Significant
Subsidiary thereof assumes or otherwise becomes liable for the liability
referred to therein or the liabilities generally of such Person.
Section 6.02. Acceleration.
(a) If an Event of Default (other than an Event of
Default specified in clause (f) or (g) of Section 6.01) shall occur and
be continuing, the Trustee may, and at the request of the Holders of at
least 25% in principal amount of outstanding Securities shall, declare
the principal of and accrued interest (including Contingent Interest
and Liquidated Damages, if any), on all the Securities to be due and
payable by notice in writing to the Company (the "Acceleration
Notice"). Such notice shall specify the respective Event of Default and
that it is a "notice of acceleration." Upon the giving of such notice,
the principal of and accrued but unpaid interest (including Contingent
Interest and Liquidated Damages, if any) on all Securities (i) shall
become immediately due and payable or (ii) if there are any amounts
outstanding under the Credit Agreement, shall become immediately due
and payable upon the first to occur of an acceleration under the Credit
Agreement or five Business Days after receipt by the Company and the
Representative under the Credit Agreement of such Acceleration Notice
but only if such Event of Default is then continuing. If an Event of
Default specified in clause (f) or (g) of Section 6.01 occurs and is
continuing with respect to Company, then all unpaid Obligations on all
of the outstanding Securities shall ipso facto become and be
immediately due and payable without any declaration or other act on the
part of the Trustee or any Holder.
(b) At any time after a declaration of acceleration with
respect to the Securities as described in the preceding paragraph, the
Holders of a majority in aggregate principal amount of the Securities
may rescind and cancel such declaration and its consequences (i) if the
rescission would not conflict with any judgment or decree, (ii) if all
existing Events of Default have been cured or waived except nonpayment
of principal or interest that has become due solely because of such
acceleration, (iii) if interest on overdue installments of interest (to
the extent the payment of such interest is lawful) and on overdue
principal, which has become due otherwise than by such declaration of
acceleration, has been paid, (iv) if the Company has paid the Trustee
its reasonable compensation and reimbursed the Trustee for its
expenses, disbursements and advances and (v) in the event of the cure
or waiver of an Event of Default of the type described in clause (d) of
Section 6.01, the Trustee shall have received an Officers' Certificate
and an
35
Opinion of Counsel that such Event of Default has been cured or waived.
No such rescission shall affect any subsequent Default or impair any
right consequent thereto.
Section 6.03. Other Remedies. If an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy to collect the payment
of the principal amount of all the Securities plus accrued but unpaid interest
(including Contingent Interest and Liquidated Damages, if any), thereon, or to
enforce the performance of any provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if the Trustee does not
possess any of the Securities or does not produce any of the Securities in the
proceeding. A delay or omission by the Trustee or any Securityholder in
exercising any right or remedy accruing upon an Event of Default shall not
impair the right or remedy or constitute a waiver of, or acquiescence in, the
Event of Default. No remedy is exclusive of any other remedy. All available
remedies are cumulative to the extent permitted by law.
Section 6.04. Waiver of Past Defaults. The Holders of a majority in
aggregate principal amount of the Securities at the time outstanding, by notice
in writing to the Trustee (and without notice to any other Securityholder), may
waive an existing Default and its consequences, except (i) an Event of Default
described in Section 6.01(a) or 6.01(b), (ii) a Default in respect of a
provision that under Section 9.02 cannot be amended without the consent of each
Holder affected or (iii) a Default which constitutes a failure to convert any
Security in accordance with the terms of Article 10. When a Default is waived,
it is deemed cured, but no such waiver shall extend to any subsequent or other
Default or impair any consequent right. This Section 6.04 shall be in lieu of
Section 316(a)(1)(B) of the TIA and such Section 316(a)(1)(B) is hereby
expressly excluded from this Indenture, as permitted by the TIA.
Section 6.05. Control by Majority. The Holders of a majority in
aggregate principal amount of the Securities at the time outstanding may direct
the time, method and place of conducting any proceeding for any remedy available
to the Trustee or of exercising any trust or power conferred on the Trustee.
However, the Trustee may refuse to follow any direction that conflicts with law
or this Indenture or that the Trustee determines in good faith is unduly
prejudicial to the rights of other Holders or would involve the Trustee in
personal liability unless the Trustee is offered indemnity satisfactory to it.
This Section 6.05 shall be in lieu of Section 316(a)(1)(A) of the TIA and such
Section 316(a)(1)(A) is hereby expressly excluded from this Indenture, as
permitted by the TIA.
Section 6.06. Limitation on Suits. A Holder may not pursue any remedy
with respect to this Indenture or the Securities unless:
(a) the Holder gives to the Trustee written notice
stating that an Event of Default is continuing;
(b) the Holders of at least 25% in aggregate principal
amount of the Securities at the time outstanding make a written request
to the Trustee to pursue the remedy;
(c) such Holder or Holders offer to the Trustee security
or indemnity satisfactory to the Trustee against any loss, liability or
expense;
36
(d) the Trustee does not comply with the request within
60 days after receipt of such notice, request and offer of security or
indemnity; and
(e) the Holders of a majority in aggregate principal
amount of the Securities at the time outstanding do not give the
Trustee a direction inconsistent with the request during such 60-day
period.
A Securityholder may not use this Indenture to prejudice the rights of
any other Securityholder or to obtain a preference or priority over any other
Securityholder.
Section 6.07. Rights of Holders to Receive Payment. Notwithstanding any
other provision of this Indenture, the right of any Holder to receive payment of
interest installments (including Contingent Interest and Liquidated Damages, if
any), the principal amount, Redemption Price, Purchase Price, Change in Control
Purchase Price or interest, if any, due on overdue amounts in respect of the
Securities held by such Holder, on or after the respective due dates expressed
in the Securities, and to convert the Securities in accordance with Article 10,
or to bring suit for the enforcement of any such payment on or after such
respective dates or the right to convert, shall not be impaired or affected
adversely without the consent of such Holder.
Section 6.08. Collection Suit by Trustee. If an Event of Default
described in Section 6.01(a) or 6.01(b) occurs and is continuing, the Trustee
may recover judgment in its own name and as trustee of an express trust against
the Company for the whole amount owing with respect to the Securities and the
amounts provided for in Section 7.07.
Section 6.09. Trustee May File Proofs of Claim. In case of the pendency
of any receivership, insolvency, liquidation, bankruptcy, reorganization,
arrangement, adjustment, composition or other judicial proceeding relative to
the Company or any other obligor upon the Securities or the property of the
Company or of such other obligor or their creditors, the Trustee (irrespective
of whether any amounts in respect of the Securities 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 on the Company for the payment of
any such amount) shall be entitled and empowered, by intervention in such
proceeding or otherwise,
(a) to file and prove a claim for any accrued but unpaid
amounts due in respect of the Securities, and to file such other papers
or documents as may be necessary or advisable in order to have the
claims of the Trustee (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its
agents and counsel or any other amounts due the Trustee under Section
7.07) and of the Holders allowed in such judicial proceeding, and
(b) to collect and receive any moneys or other property
payable or deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
similar official in any such judicial proceeding is hereby authorized by each
Holder to make such payments to the Trustee and, in the event that the Trustee
shall consent to the making of such payments directly to the Holders, to pay the
Trustee any amount due it for the reasonable compensation, expenses,
37
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 7.07.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof, or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.
Section 6.10. Priorities. If the Trustee collects any money pursuant to
this Article 6, it shall pay out the money in the following order:
FIRST: to the Trustee for amounts due under Section 7.07;
SECOND: to Holders for amounts due and unpaid on the Securities for any
accrued but unpaid interest amounts due in respect of the Securities, ratably,
without preference or priority of any kind, according to such amounts due and
payable on the Securities ; and
THIRD: the balance, if any, to the Company.
The Trustee may fix a record date and payment date for any payment to
Holders pursuant to this Section 6.10. At least 15 days before such record date,
the Trustee shall mail to each Securityholder and the Company a notice that
states the record date, the payment date and the amount to be paid.
38
Section 6.11. Suits. In any suit for the enforcement of any right or
remedy under this Indenture or in any suit against the Trustee for any action
taken or omitted by it as Trustee, a court in its discretion may require the
filing by any party litigant (other than the Trustee) in the suit of an
undertaking to pay the costs of the suit, and the court in its discretion may
assess reasonable costs, including reasonable attorneys' fees and expenses,
against any party litigant in the suit, having due regard to the merits and good
faith of the claims or defenses made by the party litigant. This Section 6.11
does not apply to a suit by the Trustee, a suit by a Holder pursuant to Section
6.07 or a suit by Holders of more than 10% in aggregate principal amount of the
Securities at the time outstanding. This Section 6.11 shall be in lieu of
Section 315(e) of the TIA and such Section 315(e) is hereby expressly excluded
from this Indenture, as permitted by the TIA.
Section 6.12. Waiver of Stay, Extension or Usury Laws. The Company
covenants (to the extent that it may lawfully do so) that it will not at any
time insist upon, or plead, or in any manner whatsoever claim or take the
benefit or advantage of, any stay or extension law or any usury or other law
wherever enacted, now or at any time hereafter in force, which would prohibit or
forgive the Company from paying all or any portion of any amounts due in respect
of the Securities, as contemplated herein, or which may affect the covenants or
the performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it will not 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.
ARTICLE 7
TRUSTEE
Section 7.01. Duties of Trustee.
(a) If an Event of Default has occurred and is
continuing, the Trustee shall exercise the rights and powers vested in
it by this Indenture and use the same degree of care and skill in its
exercise as a prudent person would exercise or use under the
circumstances in the conduct of such person's own affairs.
(b) Except during the continuance of an Event of Default:
(i) the Trustee need perform only those duties
that are specifically set forth in this Indenture and no
others; and
(ii) in the absence of bad faith on its part, the
Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed
therein, upon certificates or opinions furnished to the
Trustee and conforming to the requirements of this Indenture,
but in case of any such certificates or opinions which by any
provision hereof are specifically required to be furnished to
the Trustee, the Trustee shall examine the certificates and
opinions to determine whether or not they conform to the
requirements of this Indenture, but need not confirm or
investigate the accuracy of mathematical calculations or other
facts stated therein.
39
This Section 7.01(b) shall be in lieu of Section 315(a) of the TIA and
such Section 315(a) is hereby expressly excluded from this Indenture,
as permitted by the TIA.
(c) The Trustee may not be relieved from liability for
its own negligent action, its own negligent failure to act or its own
willful misconduct, except that:
(i) this paragraph (c) does not limit the effect
of paragraph (b) of this Section 7.01;
(ii) the Trustee shall not be liable for any
error of judgment made in good faith by a Responsible Officer
unless it is proved that the Trustee was negligent in
ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect
to any action it takes or omits to take in good faith in
accordance with a direction received by it pursuant to Section
6.05.
Section 7.01(c)(i), (ii) and (iii) shall be in lieu of Sections
315(d)(1), 315(d)(2) and 315(d)(3) of the TIA and such Sections
315(d)(1), 315(d)(2) and 315(d)(3) are hereby expressly excluded from
this Indenture, as permitted by the TIA.
(d) Every provision of this Indenture that in any way
relates to the Trustee is subject to Section 7.01(a), (b), (c), (e) and
(f).
(e) The Trustee may refuse to perform any duty or
exercise any right or power or expend or risk its own funds or
otherwise incur any financial liability unless it receives indemnity
satisfactory to it against any loss, liability or expense.
(f) Money held by the Trustee in trust hereunder need not
be segregated from other funds except to the extent required by law.
The Trustee (acting in any capacity hereunder) shall be under no
liability for interest on any money received by it hereunder unless
otherwise agreed in writing with the Company.
Section 7.02. Rights of Trustee. Subject to its duties and
responsibilities under the TIA,
(a) the Trustee may conclusively rely and shall be
protected in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document reasonably believed by it to be
genuine and to have been signed or presented by the proper party or
parties;
(b) whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter be proved or established
prior to taking, suffering or omitting any action hereunder, the
Trustee (unless other evidence be herein specifically prescribed) may
obtain and, in the absence of bad faith or negligence on its part,
conclusively rely upon an Officers' Certificate and/or an Opinion of
Counsel;
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(c) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents, attorneys, custodians or nominees and the Trustee shall
not be responsible for any misconduct or negligence on the part of any
agent, attorney, custodian or nominee appointed with due care by it
hereunder;
(d) the Trustee shall not be liable for any action taken,
suffered, or omitted to be taken by it in good faith which it
reasonably believes to be authorized or within its rights or powers
conferred under this Indenture;
(e) the Trustee may consult with counsel selected by it
and any advice or opinion of such counsel shall be full and complete
authorization and protection in respect of any action taken or suffered
or omitted by it hereunder in good faith and in accordance with such
advice or opinion of such counsel;
(f) 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 Holders, pursuant to the
provisions of this Indenture, unless such Holders shall have offered to
the Trustee security or indemnity satisfactory to it against the costs,
expenses and liabilities which may be incurred therein or thereby;
(g) any request or direction of the Company mentioned
herein shall be sufficiently evidenced by a Company Order and any
resolution of the Board of Directors shall be sufficiently evidenced by
a Board Resolution;
(h) 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, note, other evidence of
indebtedness or other paper or document, but the Trustee, in its
discretion, 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,
during normal business hours, to examine the books, records and
premises of the Company, personally or by agent or attorney at the sole
cost of the Company and shall incur no liability or additional
liability of any kind by reason of such inquiry or investigation;
(i) the Trustee shall not be deemed to have notice of any
Default or Event of Default unless a Responsible Officer of the Trustee
has actual knowledge thereof or unless written notice of any event
which is in fact such a Default is received by the Trustee at the
Corporate Trust Office of the Trustee, and such notice references the
Securities and this Indenture;
(j) the rights, privileges, protections, immunities and
benefits given to the Trustee, including its right to be indemnified,
are extended to, and shall be enforceable by, the Trustee in each of
its capacities hereunder (including Paying Agent, Registrar and
Conversion Agent), and to all other Persons employed to act hereunder,
including the Trustee's officers, employees, agents and custodians;
41
(k) 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;
(l) Neither the Trustee nor any of its officers,
directors, employees or agents shall be liable for any action taken or
omitted under this Indenture or in connection therewith except to the
extent caused by the Trustee's gross negligence, bad faith or willful
misconduct, as determined by the final judgment of a court of competent
jurisdiction, no longer subject to appeal or review. Anything in this
Indenture to the contrary notwithstanding, in no event shall the
Trustee be liable for special, indirect or consequential loss or damage
of any kind whatsoever (including but no limited to lost profits), even
if the Trustee has been advised of the likelihood of such loss or
damage and regardless of the form of action;
(m) The Trustee is not required to give any bond or
surety with respect to the performance of its duties or the exercise of
its powers under this Indenture; and
(n) Notwithstanding anything else herein contained,
whenever any provision of this Indenture indicates that any
confirmation of a condition or event is qualified by the words "to the
knowledge of" or "known to" the Trustee or other words of similar
meaning, said words shall mean and refer to the current awareness of
one or more Responsible Officers who are located at the Corporate Trust
Office.
Section 7.03. Individual Rights of Trustee. The Trustee in its
individual or any other capacity may become the owner or pledgee of Securities
and may otherwise deal with the Company or its Affiliates with the same rights
it would have if it were not Trustee. Any Paying Agent, Registrar, Conversion
Agent or co-registrar may do the same with like rights. However, the Trustee
must comply with Sections 7.10 and 7.11.
Section 7.04. Trustee's Disclaimer. The Trustee makes no representation
as to the validity or adequacy of this Indenture or the Securities, shall not be
accountable for the Company's use or application of the proceeds from the
Securities, and shall not be responsible for any statement in any registration
statement for the Securities under the Securities Act or in any offering
document for the Securities, the Indenture or the Securities (other than its
certificate of authentication), or the determination as to which beneficial
owners are entitled to receive any notices hereunder.
Section 7.05. Notice of Defaults. If a Default occurs and if it is
known to the Trustee, the Trustee shall give to each Securityholder notice of
all current Defaults known to it within 90 days after any such Default occurs
or, if later, within 15 days after it is known to the Trustee, unless such
Default shall have been cured or waived before the giving of such notice.
Notwithstanding the preceding sentence, except in the case of a Default
described in Sections 6.01(a) and 6.01(b), the Trustee may withhold the notice
if and so long as the board of directors, the executive committee or a trust
committee of directors and/or officers of the Trustee in good faith determines
that withholding the notice is in the interests of Holders. The second sentence
42
of this Section 7.05 shall be in lieu of the proviso to Section 315(b) of the
TIA and such proviso is hereby expressly excluded from this Indenture, as
permitted by the TIA.
Section 7.06. Reports by Trustee to Holders. Within 60 days after each
May 30 beginning with the May 30 following the date of this Indenture, the
Trustee shall mail to each Securityholder a brief report dated as of such May 30
that complies with TIA Section 313(a), if required by such Section 313(a), but
only to the extent any such report is required to be given pursuant to said TIA
Section 313(a), or any successor provision of the TIA. The Trustee also shall
comply with TIA Section 313(b).
A copy of each report at the time of its mailing to Holders shall be
filed with the SEC and each securities exchange, if any, on which the Securities
are listed. The Company agrees to notify the Trustee promptly whenever the
securities become listed on any Securities exchange and of any delisting
thereof.
Section 7.07. Compensation and Indemnity. The Company agrees:
(a) to pay to the Trustee from time to time, and the
Trustee shall be entitled to, such compensation as the Company and the
Trustee shall from time to time agree in writing for all services
rendered by it hereunder (which compensation shall not be limited (to
the extent permitted by law) by any provision of law in regard to the
compensation of a trustee of an express trust);
(b) to reimburse the Trustee upon its request for all
reasonable expenses, disbursements and advances incurred or made by the
Trustee in accordance with any provision of this Indenture or any
documents executed in connection herewith (including the reasonable
compensation and the expenses, advances and disbursements of its agents
and counsel), except any such expense, disbursement or advance as may
be attributable to its negligence or bad faith; and
(c) to indemnify the Trustee or any predecessor Trustee
and their respective agents, officers, directors and employees for, and
to hold them harmless against, any loss, damage, claim, liability, cost
or expense (including attorneys' fees and expenses and taxes (other
than taxes based upon, measured by or determined by the income of the
Trustee)) incurred without negligence or bad faith on its part, arising
out of or in connection with the acceptance or administration of this
trust, including the costs and expenses of defending itself against any
claim (whether asserted by the Company or any Holder or any other
Person) or liability in connection with the exercise or performance of
any of its powers or duties hereunder.
To secure the Company's payment obligations in this Section 7.07, the
Trustee shall have a lien prior to the Securities on all money or property held
or collected by the Trustee, except that held in trust to pay interest
installments (including Contingent Interest and Liquidated Damages, if any), the
principal amount, Redemption Price, Purchase Price, Change in Control Purchase
Price or interest, if any, due on overdue amounts, as the case may be, in
respect of any particular Securities.
43
The Company's payment obligations pursuant to this Section 7.07 shall
survive the discharge of this Indenture or the earlier termination or
resignation of the Trustee. When the Trustee incurs expenses after the
occurrence of a Default specified in Section 6.01(f) or Section 6.01(g), the
expenses, including the reasonable charges and expenses of its counsel, are
intended to constitute expenses of administration under any bankruptcy law.
Any amounts due and owing the Trustee hereunder (whether in nature of
fees, expenses, indemnification payments or reimbursement for advances) which
have not been paid by or on behalf of the Company within 15 days following
written notice thereof given to the Company in accordance with the provisions of
Section 12.02, shall bear interest at an interest rate equal to the Trustee's
announced prime rate in effect from time to time, plus four percent (4.0%) per
annum.
Section 7.08. Replacement of Trustee. The Trustee may resign by so
notifying the Company; provided, however, that no such resignation shall be
effective until a successor Trustee has accepted its appointment pursuant to
this Section 7.08. The Holders of a majority in aggregate principal amount of
the Securities at the time outstanding may remove the Trustee by so notifying
the Trustee and the Company. The Company shall remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10;
(b) the Trustee is adjudged bankrupt or insolvent;
(c) a receiver or public officer takes charge of the
Trustee or its property; or
(d) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint, by
resolution of its Board of Directors, a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company satisfactory in form and
substance to the retiring Trustee and the Company. Thereupon the resignation or
removal of the retiring Trustee shall become effective, and the successor
Trustee shall have all the rights, powers and duties of the Trustee under this
Indenture; provided, however, notwithstanding the foregoing, the effectiveness
of any such resignation or removal shall be conditioned on receipt by the
retiring Trustee of all amounts due and owing under Section 7.07 hereof. The
successor Trustee shall mail a notice of its succession to Holders. The retiring
Trustee shall promptly transfer all property held by it as Trustee to the
successor Trustee, subject to the lien provided for in Section 7.07.
If a successor Trustee does not take office within 30 days after the
retiring Trustee gives its notice of resignation or is removed, the retiring
Trustee, the Company or the Holders of a majority in aggregate principal amount
of the Securities at the time outstanding may petition any court of competent
jurisdiction at the expense of the Company for the appointment of a successor
Trustee.
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If the Trustee fails to comply with Section 7.10, any Securityholder
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.
Section 7.09. Successor Trustee by ▇▇▇▇▇▇ ▇▇▇. If the Trustee
consolidates with, merges or converts into, or transfers all or substantially
all its corporate trust business or assets (including the administration of the
trust created by this Indenture) to, another Person, the resulting, surviving or
Person corporation without any further act shall be the successor Trustee.
Section 7.10. Eligibility; Disqualification. The Trustee shall at all
times satisfy the requirements of TIA Section 310(a)(1). The Trustee (or its
parent holding company) shall have a combined capital and surplus of at least
$50,000,000 as set forth in its most recent filed annual report of condition.
Nothing herein contained shall prevent the Trustee from filing with the SEC the
application referred to in the penultimate paragraph of TIA Section 310(b). The
Trustee shall comply with TIA Section 310(b); provided, however, that there
shall be excluded from the operation of TIA Section 310(b)(1) any indenture or
indentures under which other securities or certificates of interest or
participation in other securities of the Company are outstanding if the
requirements for such exclusion set forth in TIA Section 310(b)(1) are met.
Section 7.11. Preferential Collection of Claims Against Company. The
Trustee shall comply with TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated therein.
ARTICLE 8
DISCHARGE OF INDENTURE
45
Section 8.01. Discharge of Liability on Securities. When (i) the
Company delivers to the Trustee all outstanding Securities (other than
Securities replaced pursuant to Section 2.07) for cancellation or (ii) all
outstanding Securities have become due and payable and the Company deposits with
the Trustee cash sufficient to pay all amounts due and owing on all outstanding
Securities (other than Securities replaced pursuant to Section 2.07), and if in
either case the Company pays all other sums payable hereunder by the Company,
then this Indenture shall, subject to Section 7.07, cease to be of further
effect. The Trustee shall join in the execution of a document prepared by the
Company acknowledging satisfaction and discharge of this Indenture on demand at
the cost and expense of the Company and accompanied by an Officers' Certificate
and Opinion of Counsel.
Section 8.02. Repayment to the Company. The Trustee and the Paying
Agent shall return to the Company upon written request any money held by them
for the payment of any amount and any shares of Common Stock with respect to the
Securities that remain unclaimed for two years, subject to applicable unclaimed
property law. After return to the Company, as applicable, Holders entitled to
the money must look to the Company for payment as general creditors unless an
applicable abandoned property law designates another person and the Trustee and
the Paying Agent shall have no further liability to the Holders with respect to
such money or securities for that period commencing after the return thereof.
ARTICLE 9
AMENDMENTS
Section 9.01. Without Consent of Holders. The Company and the Trustee
may amend or supplement this Indenture or the Securities without notice to or
consent of any Securityholder:
(a) to comply with Article 5 or Section 10.12;
(b) to cure any ambiguity, omission, defect or
inconsistency, or to make any other change that does not adversely
affect the rights of any Securityholder;
(c) to make provisions with respect to the conversion
right of the Holders pursuant to the requirements of Section 10.12 and
Section 10.01;
(d) to evidence and provide for the acceptance of
appointment hereunder by a successor Trustee with respect to the
Securities; or
(e) to comply with the provisions of the TIA, or with any
requirement of the SEC arising as a result of the qualification of this
Indenture under the TIA.
Section 9.02. With Consent of Holders.
The Company and the Trustee may amend or supplement this Indenture or
the Securities without notice to any Securityholder but with the written consent
of the Holders of a majority in aggregate principal amount of the Securities
then outstanding. The Holders of a majority in aggregate principal amount of the
Securities then outstanding may waive compliance by the Company with restrictive
provisions of this Indenture other than as set forth in this Section 9.02 below,
and waive any past Default under this Indenture and its consequences, except a
Default in
46
the payment of amounts due in respect of any Security or in respect of a
provision which under this Indenture cannot be modified or amended without the
consent of the Holder of each outstanding Security affected.
Subject to Section 9.04, without the written consent of each
Securityholder affected, however, an amendment, supplement or waiver, including
a waiver pursuant to Section 6.04, may not:
(a) change the Stated Maturity of the principal of, or
any payment date of any installment of interest (including Contingent
Interest, if any), if any, on, any Security;
(b) reduce the principal amount of, or the rate of
interest (including Contingent Interest), if any, on, any Security,
whether upon acceleration, redemption or otherwise, or alter the manner
of calculation of interest or the rate of accrual thereof on any
Security;
(c) change the currency for payment of principal of, or
interest (including Contingent Interest or Liquidated Damages, if any),
on any Security or adversely affect the price;
(d) impair the right to institute suit for the
enforcement of any payment of any amount with respect to any Security
when due;
(e) adversely affect the conversion rights provided in
Article 10;
(f) modify the provisions of this Indenture requiring the
Company to make an offer to repurchase Securities upon a Change in
Control pursuant to Section 3.09 after a Change in Control or to
repurchase the Securities at the option of the Holders pursuant to
Section 3.08 in any case;
(g) reduce the percentage of principal amount of the
outstanding Securities necessary to modify or amend this Indenture or
to consent to any waiver provided for in this Indenture;
(h) waive a Default in the payment of any amount with
respect to any Security when due (except as provided in Section 6.02);
or
(i) make any changes in Section 6.04, Section 6.07 or
this Section 9.02.
It shall not be necessary for the consent of the Holders under this
Section 9.02 to approve the particular form of any proposed amendment,
supplement or waiver, but it shall be sufficient if such consent approves the
substance thereof.
After an amendment under this Section 9.02 becomes effective, the
Company shall mail to each Holder a notice briefly describing the amendment.
Failure to mail the notice or a defect in the notice shall not effect the
validity of the amendment.
47
Section 9.03. Compliance with Trust Indenture Act. Every supplemental
indenture executed pursuant to this Article shall comply with the TIA.
Section 9.04. Revocation and Effect of Consents. Until an amendment,
waiver or other action by Holders becomes effective, a consent thereto by a
Holder of a Security hereunder is a continuing consent by the Holder and every
subsequent Holder of that Security or portion of the Security that evidences the
same obligation as the consenting Holder's Security, even if notation of the
consent, waiver or action is not made on the Security. However, unless otherwise
agreed in writing by such Holder or a predecessor Holder any such Holder or
subsequent Holder may revoke the consent, waiver or action as to such Holder's
Security or portion of the Security if the Trustee receives the notice of
revocation before the date the amendment, waiver or action becomes effective.
After an amendment, waiver or action becomes effective, it shall bind every
Securityholder.
Section 9.05. Notation on or Exchange of Securities. Securities
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article 9 may, and shall if required by the Trustee, bear a
notation in form approved by the Trustee as to any matter provided for in such
supplemental indenture. If the Company shall so determine, new Securities so
modified as to conform, in the opinion of the Trustee and the Board of Directors
of the Company, to any such supplemental indenture may be prepared and executed
by the Company and authenticated and delivered by the Trustee in exchange for
outstanding Securities.
Section 9.06. Trustee to Sign Supplemental Indentures. The Trustee
shall sign any supplemental indenture authorized pursuant to this Article 9 if
the amendment contained therein does not, in the sole determination of the
Trustee, adversely affect the rights, duties, powers, privileges, benefits,
indemnities, liabilities or immunities of the Trustee. If it does, the Trustee
may, but need not, sign such supplemental indenture. In signing such
supplemental indenture the Trustee shall be entitled to receive, and (subject to
the provisions of Section 7.01) shall be fully protected in relying upon, an
Officers' Certificate and an Opinion of Counsel stating that such amendment is
authorized or permitted by this Indenture.
Section 9.07. Effect of Supplemental Indentures. Upon the execution of
any supplemental indenture under this Article 9, this Indenture shall be
modified in accordance therewith, and such supplemental indenture shall form a
part of this Indenture for all purposes, and every Holder of Securities
theretofore or thereafter authenticated and delivered hereunder shall be bound
thereby.
ARTICLE 10
CONVERSION OF THE SECURITIES
Section 10.01. Conversion Privilege. Subject to the provisions of this
Article 10, a Holder of a Security may convert such Security into Common Stock,
at the Conversion Price then in effect, if any of the following conditions is
satisfied:
(a) during any calendar quarter (the "Quarter")
commencing after the Issue Date, if the Closing Price per share of
Common Stock for at least 20 Trading Days in the period of 30
consecutive Trading Days ending on the last Trading Day of such Quarter
48
(appropriately adjusted to take into account the occurrence, during
such 20 Trading Day period, of any event requiring adjustment of the
Conversion Price under this Indenture) is more than 120% of the
Conversion Price on such 30th Trading Day;
(b) the Security has been called for redemption by the
Company pursuant to Section 3.01 and the redemption has not yet
occurred;
(c) after the date that is 90 days after the Issue Date,
if none of ▇▇▇▇▇'▇, S&P or Fitch Ratings Ltd. assigns a credit rating
to the Securities;
(d) the conversion of such Security occurs during the
five Trading Day period immediately after a period of five consecutive
Trading Days in which the Security Trading Price for each Trading Day
in such period was less than 95% of the product of the Closing Price
per share of Common Stock on such Trading Day multiplied by the number
of shares of Common Stock issuable (assuming satisfaction of conditions
to conversion) upon conversion of $1,000 in principal amount of the
Securities;
(e) (i) an issuance of rights, warrants or options
referred to in Section 10.06(b) occurs or (ii) a distribution referred
to in Section 10.06(c) occurs where the fair market value of such
distribution per share of Common Stock (as determined by the Board of
Directors of the Company, which determination shall be conclusive
evidence of such fair market value) exceeds 10% of the Closing Price
per share of Common Stock on the Trading Day immediately preceding the
date of declaration of such distribution; or
(f) (i) the Company is party to a consolidation, merger,
share exchange, sale of all or substantially all of its assets or other
similar transaction pursuant to which the Common Stock is subject to
conversion into shares of stock (other than Common Stock), other
securities or property (including cash) subject to Section 10.12 and
(ii) the conversion of such Security occurs at any time from and after
the date that is 15 days prior to the date of the anticipated effective
time of such transaction until and including the date that is 15 days
after the actual effective date of such transaction; provided, however,
that if such conversion occurs after the effective date of such
transaction, the Holder will receive on conversion the consideration
determined in accordance with Section 10.12.
In the case of the foregoing clauses (e)(i) and (ii), the Company shall
cause a notice of such issuance or distribution to be filed with the Trustee and
the Conversion Agent and to be mailed to each Holder of Securities at its
address appearing on the list provided for in Section 2.05, at least 20 days
prior to the Ex-Dividend Date for such issuance or distribution. Once the
Company has given such notice, Holders may surrender their Securities for
conversion at any time thereafter until the earlier of the close of business on
the Business Day prior to the ex-dividend date or the Company's announcement
that such issuance or distribution will not take place. This provision shall not
apply if the Holder of a Security otherwise participates in the distribution
without conversion.
The "Ex-Dividend Date" for any such issuance or distribution means the
date immediately prior to the commencement of "ex-dividend" trading for such
issuance or
49
distribution on The New York Stock Exchange or such other national securities
exchange or The Nasdaq Stock Market or similar system of automated dissemination
of quotations of securities prices on which the Common Stock is then listed or
quoted.
The number of shares of Common Stock issuable upon conversion of a
Security shall be determined by dividing the principal amount of the Security or
portion thereof surrendered for conversion by the Conversion Price in effect on
the Conversion Date. The initial Conversion Price is set forth in paragraph 8 of
the Securities and is subject to adjustment as provided in this Article 10. If
any Securities are properly presented for conversion, the Company, at its
option, instead of delivering the shares of Common Stock issuable upon
conversion of such Securities, may pay the Holder the Cash Conversion Price.
A Holder may convert a portion of a Security equal to $1,000 or any
integral multiple thereof. Provisions of this Indenture that apply to conversion
of all of a Security also apply to conversion of a portion of a Security.
If a Security is called for redemption pursuant to Article 3, the right
to convert such Security shall terminate at the close of business on the second
Business Day before the redemption date for such Security (unless the Company
shall default in making the redemption payment then due, in which case the
conversion right shall terminate on the date such Default is cured and such
Security is redeemed). A Security in respect of which a Holder has delivered a
Purchase Notice pursuant to Section 3.08 or a Change in Control Purchase Notice
pursuant to Section 3.09 exercising the option of such Holder to require the
Company to repurchase such Security may be converted only if such Purchase
Notice or Change in Control Purchase Notice, as the case may be, is withdrawn by
a written notice of withdrawal delivered to the Paying Agent prior to the close
of business on the Business Day prior to the Purchase Date or prior to the close
of business on the Change in Control Purchase Date, as the case may be, in
accordance with Section 3.10.
A Holder of Securities is not entitled to any rights of a holder of
Common Stock until such Holder has converted its Securities into Common Stock
and, upon such conversion, only to the extent such Securities are deemed to have
been converted into Common Stock pursuant to this Article 10.
50
Section 10.02. Conversion Procedure. To convert a Security, a Holder
must satisfy the requirements in paragraph 8 of the Securities and (i) complete
and manually sign the conversion notice on the back of the Security and deliver
such notice to the Conversion Agent, (ii) surrender the Security to the
Conversion Agent, (iii) furnish appropriate endorsements and transfer documents
if required by the Registrar or the Conversion Agent, (iv) pay any transfer or
other tax, if required by Section 10.04 and (v) if the Security is held in
book-entry form, complete and deliver to the Depositary appropriate instructions
pursuant to the Depositary's book-entry conversion programs. The date on which
the Holder satisfies all of the foregoing requirements is the "Conversion Date".
As soon as practicable after the Conversion Date and in any event within five
Business Days, the Company shall deliver to the Holder through the Conversion
Agent either (i) a certificate for or (ii) a book-entry notation of the number
of whole shares of Common Stock issuable upon the conversion and cash in lieu of
any fractional shares pursuant to Section 10.05.
The Person in whose name the Security is registered shall be deemed to
be a stockholder of record on the Conversion Date; provided, however, that no
surrender of a Security on any date when the stock transfer books of the Company
shall be closed shall be effective to constitute the Person or Persons entitled
to receive the shares of Common Stock upon such conversion as the record holder
or holders of such shares of Common Stock on such date, but such surrender shall
be effective to constitute the Person or Persons entitled to receive such shares
of Common Stock as the record holder or holders thereof for all purposes at the
close of business on the next succeeding day on which such stock transfer books
are open (subject to the provisions of the next paragraph of this Section
10.02); provided, further, that such conversion shall be at the Conversion Price
in effect on the date that such Security shall have been surrendered for
conversion, as if the stock transfer books of the Company had not been closed.
Upon conversion of a Security, such Person shall no longer be a Holder of such
Security.
If the Company elects to pay cash instead of issuing shares with regard
to a Security properly presented for conversion, the Company shall notify the
Holder and the Trustee of such election no later than the second Business Day
after the Conversion Date of the Security. If the Holder does not withdraw such
election to convert, the Company shall pay the Cash Conversion Price in respect
of the Security converted in cash not later than the tenth Business Day after
the Conversion Date.
No payment or adjustment will be made for accrued interest (including
Contingent Interest or Liquidated Damages, if any), on a converted Security or
for dividends or distributions on shares of Common Stock issued upon conversion
of a Security (provided that the shares of Common Stock received upon conversion
of Securities shall continue to accrue Liquidated Damages, as applicable, in
accordance with the Registration Rights Agreement and shall be entitled to
receive, at the next interest payment date, any accrued but unpaid Liquidated
Damages with respect to the converted Securities), but if any Holder surrenders
a Security for conversion between the record date for the payment of an
installment of interest and the next interest payment date, then,
notwithstanding such conversion, the interest (including Contingent Interest or
Liquidated
51
Damages, if any), payable on such interest payment date shall be paid to the
Holder of such Security on such interest payment date. In such event, such
Security, when surrendered for conversion, must be accompanied by delivery of a
check payable to the Conversion Agent in an amount equal to the interest
(including Contingent Interest or Liquidated Damages, if any), payable on such
interest payment date on the portion so converted. If such payment does not
accompany such Security, the Security shall not be converted; provided, however,
that no such check shall be required if such Security has been called for
redemption on a redemption date within the period between and including such
record date and such interest payment date, or if such Security is surrendered
for conversion on the interest payment date. If the Company defaults in the
payment of interest (including Contingent Interest or Liquidated Damages, if
any), payable on the interest payment date, the Conversion Agent shall repay
such funds to the Holder.
If a Holder converts more than one Security at the same time, the
number of shares of Common Stock issuable upon the conversion shall be based on
the aggregate principal amount of Securities converted.
Upon surrender of a Security that is converted in part, the Company
shall execute, and the Trustee shall authenticate and deliver to the Holder, a
new Security equal in principal amount to the unconverted portion of the
Security surrendered.
Section 10.03. Adjustments Below Par Value. Before taking any action
which would cause an adjustment decreasing the Conversion Price so that the
shares of Common Stock issuable upon conversion of the Securities would be
issued for less than the par value of such Common Stock, the Company will take
all corporate action which may be necessary in order that the Company may
validly and legally issue fully paid and nonassessable shares of such Common
Stock at such adjusted Conversion Price.
Section 10.04. Taxes on Conversion. If a Holder converts a Security,
the Company shall pay any documentary, stamp or similar issue or transfer tax
due on the issue of shares of Common Stock upon such conversion. However, the
Holder shall pay any such tax which is due because the Holder requests the
shares to be issued in a name other than the Holder's name. The Conversion Agent
may refuse to deliver the certificates representing the Common Stock being
issued in a name other than the Holder's name until the Conversion Agent
receives a sum sufficient to pay any tax which will be due because the shares
are to be issued in a name other than the Holder's name. Nothing herein shall
preclude any tax withholding required by law or regulations.
Section 10.05. Company to Provide Stock. The Company shall, prior to
issuance of any Securities hereunder, and from time to time as may be necessary,
reserve, out of its authorized but unissued Common Stock a sufficient number of
shares of Common Stock to permit the conversion of all outstanding Securities
into shares of Common Stock. The shares of Common Stock or other securities
issued upon conversion of Securities bearing a Legend as provided in Section
2.06(f) shall bear a legend substantially in the following form:
"THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THIS SECURITY MAY
NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN APPLICABLE EXEMPTION FROM THE
52
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. EACH PURCHASER OF THIS
SECURITY IS HEREBY NOTIFIED THAT THE SELLER OF THIS SECURITY MAY BE
RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE
SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.
THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE COMPANY THAT
(A) THIS SECURITY MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED, ONLY (I) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES
IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A,
(II) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES
ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) OR (III) PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH
OF CASES (I) THROUGH (III) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES
LAWS OF ANY STATE OF THE UNITED STATES, AND (B) THE HOLDER WILL, AND
EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS
SECURITY FROM THE HOLDER OF THE RESALE RESTRICTIONS REFERRED TO IN (A)
ABOVE."
No fractional shares of Common Stock shall be issued upon conversion of
Securities. If more than one Security shall be surrendered for conversion at one
time by the same holder, the number of full shares which shall be issuable upon
conversion shall be computed on the basis of the aggregate principal amount of
the Securities (or specified portions thereof to the extent permitted hereby) so
surrendered. If any fractional share of Common Stock would be issuable upon the
conversion of any Security or Securities, the Company shall make a payment in
lieu thereof in cash based on the current market value of a share of Common
Stock. For these purposes, the current market value of a share of Common Stock
shall be the Closing Price per share of Common Stock on the first Business Day
immediately preceding the day on which the Securities (or specified portions
thereof) are deemed to have been converted.
The Company covenants that all shares of Common Stock delivered upon
conversion of the Securities shall be newly issued shares or treasury shares,
shall be duly authorized, validly issued, fully paid and non-assessable and
shall be free from preemptive rights and free of any lien or adverse claim.
The Company will endeavor promptly to comply with all federal and state
securities laws regulating the offer and delivery of shares of Common Stock upon
conversion of Securities, if any, and will list or cause to have quoted such
shares of Common Stock on each national securities exchange or in the
over-the-counter market or such other market on which the Common Stock is then
listed or quoted.
53
Section 10.06. Adjustment of Conversion Price. The conversion price
(the "Conversion Price") initially shall be that price set forth in paragraph 8
of the form of Security attached hereto as Exhibit A-1, but shall be adjusted
from time to time by the Company as follows:
(a) In case the Company shall (i) pay a dividend or other
distribution in shares of Common Stock or other Capital Stock to all
holders of Common Stock, (ii) subdivide its outstanding Common Stock
into a greater number of shares, (iii) combine its outstanding Common
Stock into a smaller number of shares or (iv) reclassify its
outstanding Common Stock, the Conversion Price in effect immediately
prior thereto shall be adjusted so that the Holder of any Security
thereafter surrendered for conversion shall be entitled to receive the
number of shares of Capital Stock which it would have owned or have
been entitled to receive had such Security been converted immediately
prior to the happening of such event. An adjustment made pursuant to
this subsection (a) shall become effective immediately after the record
date in the case of a dividend or distribution and shall become
effective immediately after the effective date in the case of
subdivision, combination or reclassification.
(b) In case the Company shall issue to all holders of its
Common Stock, rights, warrants or options entitling such holders (for a
period commencing no earlier than the record date described below and
expiring not more than 60 days after such record date) to subscribe for
or purchase shares of Common Stock (or securities convertible into
Common Stock) at a price per share less than the current market price
per share of Common Stock (as determined in accordance with subsection
(e) below) at the record date for the determination of stockholders
entitled to receive such rights, warrants or options, the Conversion
Price in effect immediately prior thereto shall be adjusted so that the
Conversion Price shall equal the price determined by multiplying the
Conversion Price in effect immediately prior to such record date by a
fraction, the numerator of which shall be the number of shares of
Common Stock outstanding on such record date, plus the number of shares
which the aggregate subscription or purchase price for the total number
of shares of Common Stock offered by the rights, warrants or options so
issued (or the aggregate conversion price of the convertible securities
offered by such rights, warrants or options) would purchase at such
current market price, and the denominator of which shall be the number
of shares of Common Stock outstanding on such record date plus the
number of additional shares of Common Stock offered by such rights,
warrants or options (or into which the convertible securities so
offered by such rights, warrants or options are convertible). Such
adjustment shall be made successively whenever any such rights,
warrants or options are issued, and shall become effective immediately
after such record date. If at the end of the period during which such
rights, warrants or options are exercisable not all rights, warrants or
options shall have been exercised, the adjusted Conversion Price shall
be immediately readjusted to what it would have been upon application
of the foregoing adjustment substituting the number of additional
shares of Common Stock actually issued (or the number of shares of
Common Stock issuable upon conversion of convertible securities
actually issued) for the total number of shares of Common Stock offered
(or the convertible securities offered).
(c) In case the Company shall distribute to all holders
of its Common Stock any shares of Capital Stock of the Company (other
than Common Stock) or evidences
54
of its indebtedness, cash, other securities or other assets, or shall
distribute to all holders of its Common Stock, rights, warrants or
options to subscribe for or purchase any of its securities (excluding
(i) rights, options and warrants referred to in Section 10.06(b) above;
(ii) those dividends, distributions, subdivisions and combinations
referred to in Section 10.06(a) above; and (iii) dividends and
distributions paid in cash in an aggregate amount that, combined
together with (A) all other such cash distributions made within the
preceding 12 months in respect of which no adjustment has been made
under this Section 10.06 and (B) the fair market value of consideration
payable in respect of any repurchases by way of tender or exchange
offers by the Company or any of its Subsidiaries or Affiliates, of
Common Stock concluded within the preceding 12 months, in each case in
respect of which no adjustment has been made under this Section 10.06,
does not exceed 5% of Market Capitalization as of the record date for
such distribution), then in each such case the Conversion Price shall
be adjusted so that the same shall equal the price determined by
multiplying the Conversion Price in effect immediately prior to the
date of such distribution by a fraction, the numerator of which shall
be the current market price per share (as defined in Section 10.06(e)
below) of the Common Stock on the record date mentioned below less the
fair market value on such record date (as determined by the Board of
Directors of the Company, whose determination shall be conclusive
evidence of such fair market value) of the portion of the Capital Stock
or evidences of indebtedness, securities or assets so distributed or of
such rights, warrants or options, in each case as applicable, to one
share of Common Stock, and the denominator of which shall be the
current market price per share (as defined in Section 10.06(e) below)
of the Common Stock on such record date. Such adjustment shall become
effective immediately after the record date for the determination of
stockholders entitled to receive such distribution.
(d) In case the Company or any of its Subsidiaries shall
repurchase by way of a tender or exchange offer shares of Common Stock,
and the fair market value of the sum of (i) the aggregate consideration
paid for such Common Stock, (ii) the aggregate fair market value of
cash dividends and distributions of the type described in clause (iii)
of the preceding paragraph (c) paid within the twelve (12) months
preceding the date of purchase of such shares of Common Stock in
respect of which no adjustment pursuant to this Section 10.06
previously has been made, and (iii) the aggregate fair market value of
any amounts previously paid for the repurchase of Common Stock of a
type described in this paragraph (d) within the twelve (12) months
preceding the date of purchase of such shares of Common Stock in
respect of which no adjustment pursuant to this Section 10.06
previously has been made, exceeds 5% of Market Capitalization on the
date of, and after giving effect to, such repurchase, then the
Conversion Price shall be adjusted so that the same shall equal the
price determined by multiplying the Conversion Price in effect
immediately prior to the date of such purchase by a fraction, the
numerator of which shall be the current market price per share (as
defined in Section 10.06(e) below) of the Common Stock on the date of
such repurchase, less the quotient obtained by dividing the Aggregate
Market Premium involved in such repurchase (as defined hereinafter) by
the difference between the number of shares of Common Stock outstanding
before such repurchase and the number of shares of Common Stock the
subject of such repurchase, and the denominator of which shall be the
current market price per share (as defined in Section 10.06(e) below)
of the Common Stock on the date of such repurchase. Such
55
adjustment shall become effective immediately after the date of such
repurchase. For purposes of this subsection (d), the "Aggregate Market
Premium" is the excess, if any, of the aggregate repurchase price paid
for all such Common Stock over the aggregate current market value per
share of all such repurchased stock, determined with respect to each
share involved in each such repurchase as of the date of repurchase
with respect to such share.
(e) For the purpose of any computation under Section
10.06(b), (c) and (d) above, the current market price per share of
Common Stock on any date shall be deemed to be the average of the
Closing Prices per share of Common Stock for 20 consecutive Trading
Days commencing 30 Trading Days before the record date with respect to
any distribution, issuance or other event requiring such computation.
(f) If the rights provided for in the Company's rights
agreement dated as of May 4, 2000, as amended, (the "Stockholder Rights
Plan") have separated from the Company's Common Stock in accordance
with the provisions of the Stockholder Rights Plan so that the Holders
of the Securities would not be entitled to receive any rights in
respect of Common Stock issuable upon conversion of the Securities, the
Conversion Price will be adjusted as provided in paragraph (c) above,
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 its Stockholder Rights Plan to provide that upon conversion
of the Securities the Holders will receive, in addition to Common Stock
issuable upon such conversion, the rights which would have attached to
such shares of Common Stock if the rights had not become separated from
the Common Stock under the Company's Stockholder Rights Plan. To the
extent that the Company adopts any future rights plan, upon conversion
of the Securities into Common Stock, Securityholders will receive, in
addition to Common Stock, the rights under the future rights plan
whether or not the rights have separated from the Common Stock at the
time of conversion and no adjustment to the Conversion Price will be
made in accordance with paragraph (c).
In any case in which this Section 10.06 shall require that an
adjustment be made immediately following a record date established for purposes
of Section 10.06, the Company may elect to defer (but only until five Business
Days following the filing by the Company with the Trustee of the certificate
described in Section 10.06) issuing to the holder of any Security converted
after such record date the shares of Common Stock and other Capital Stock of the
Company issuable upon such conversion over and above the shares of Common Stock
and other Capital Stock of the Company issuable upon such conversion only on the
basis of the Conversion Price prior to adjustment; and, in lieu of the shares
the issuance of which is so deferred, the Company shall issue or cause its
transfer agents to issue due bills or other appropriate evidence of the right to
receive such shares.
If after an adjustment a Holder of a Security upon conversion of such
Security may receive shares of two or more classes of Capital Stock of the
Company, the Conversion Price shall thereafter be subject to adjustment upon the
occurrence of an action taken with respect to any such class of Capital Stock as
is contemplated by this Article 10 with respect to the Common Stock, on terms
comparable to those applicable to Common Stock in this Article 10.
56
Section 10.07. No Adjustment. No adjustment in the Conversion Price
shall be required unless the adjustment would require an increase or decrease of
at least 1% in the Conversion Price as last adjusted; provided, however, that
any adjustments which by reason of this Section 10.07 are not required to be
made shall be carried forward and taken into account in any subsequent
adjustment. All calculations under this Article 10 shall be made to the nearest
cent or to the nearest one-hundredth of a share, as the case may be.
No adjustment need be made for a transaction referred to in Section
10.06 if Holders are to participate in the transaction on a basis and with
notice that the Board of Directors determines to be fair and appropriate in
light of the basis and notice on which holders of Common Stock participate in
the transaction. Such participation by Holders may include participation upon
conversion; provided that an adjustment shall be made at such time as the
Holders are no longer entitled to participate.
No adjustment need be made for rights to purchase Common Stock or
issuances of Common Stock pursuant to a Company plan for reinvestment of
dividends or interest.
No adjustment need be made for a change in the par value or a change to
no par value of the Common Stock.
To the extent that the Securities become convertible into cash, no
adjustment need be made thereafter as to the cash. Interest will not accrue on
the cash.
57
Section 10.08. Equivalent Adjustments. In the event that, as a result
of an adjustment made pursuant to Section 10.06 above, the holder of any
Security thereafter surrendered for conversion shall become entitled to receive
any shares of Capital Stock of the Company other than shares of its Common
Stock, thereafter the Conversion Price of such other shares so receivable upon
conversion of any Securities shall be subject to adjustment from time to time in
a manner and on terms as nearly equivalent as practicable to the provisions with
respect to Common Stock contained in this Article 10.
Section 10.09. Adjustment for Tax Purposes. The Company shall be
entitled to make such reductions in the Conversion Price, in addition to those
required by Section 10.06, as it in its discretion shall determine to be
advisable in order that any stock dividends, subdivision of shares, distribution
of rights to purchase stock or securities, or a distribution or securities
convertible into or exchangeable for stock hereafter made by the Company to its
stockholders shall not be taxable.
Section 10.10. Notice of Adjustment. Whenever the Conversion Price is
adjusted, or Holders become entitled to other securities or due bills, the
Company shall promptly mail to Holders a notice of the adjustment and file with
the Trustee an Officers' Certificate briefly stating the facts requiring the
adjustment and the manner of computing it. The certificate shall be conclusive
evidence of the correctness of such adjustment and the Trustee may conclusively
assume that, unless and until such certificate is received by it, no such
adjustment is required.
Section 10.11. Notice of Certain Transactions. In case:
(a) the Company shall declare a dividend (or any other
distribution) on its Common Stock (other than in cash out of retained
earnings); or
(b) the Company shall authorize the granting to the
holders of its Common Stock of rights, warrants or options to subscribe
for or purchase any share of any class or any other rights, warrants or
options; or
(c) of any reclassification 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,
merger, or share exchange to which the Company is a party and for which
approval of any stockholders of the Company is required, or of the sale
or transfer of all or substantially all of the assets of the Company;
or
(d) of the voluntary or involuntary dissolution,
liquidation or winding-up of the Company;
the Company shall cause to be filed with the Trustee and the Conversion Agent
and to be mailed to each Holder of Securities at its address appearing on the
list provided for in Section 2.05, as promptly as possible but in any event at
least ten 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, warrants or options, 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,
58
share exchange, 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, share exchange, 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, share exchange,
transfer, dissolution, liquidation or winding-up.
Section 10.12. Effect of Reclassification, Consolidation, Merger, Share
Exchange or Sale on Conversion Privilege. If any of the following shall occur,
namely: (i) any reclassification or change of outstanding shares of Common Stock
(other than a change in par value, or from par value to no par value, or from no
par value to par value, or as a result of a subdivision or combination); (ii)
any consolidation, combination, merger or share exchange to which the Company is
a party other than a merger in which the Company is the continuing corporation
and which does not result in any reclassification of, or change (other than a
change in name, or par value, or from par value to no par value, or from no par
value to par value, or as a result of a subdivision or combination) in,
outstanding shares of Common Stock; or (iii) any sale or conveyance of all or
substantially all of the assets of the Company, then the Company, or such
successor or purchasing corporation, as the case may be, shall, as a condition
precedent to such reclassification, change, consolidation, merger, share
exchange, sale or conveyance, execute and deliver to the Trustee a supplemental
indenture providing that the Holder of each Security then outstanding shall have
the right to convert such Security into the kind and amount of shares of Capital
Stock and other securities and property (including cash) receivable upon such
reclassification, change, consolidation, merger, share exchange, sale or
conveyance by a holder of the number of shares of Common Stock deliverable upon
conversion of such Security immediately prior to such reclassification, change,
consolidation, merger, share exchange, sale or conveyance. Such supplemental
indenture shall provide for adjustments of the Conversion Price which shall be
as nearly equivalent as may be practicable to the adjustments of the Conversion
Price provided for in this Article 10. If, in the case of any such
consolidation, merger, share exchange, sale or conveyance, the stock or other
securities and property (including cash) receivable thereupon by a holder of
Common Stock includes shares of Capital Stock or other securities and property
of a corporation other than the successor or purchasing corporation, as the case
may be, in such consolidation, merger, share exchange, sale or conveyance, then
such supplemental indenture shall also be executed by such other corporation and
shall contain such additional provisions to protect the interests of the Holders
of the Securities as the Board of Directors of the Company shall reasonably
consider necessary by reason of the foregoing. The provision of this Section
10.12 shall similarly apply to successive consolidations, mergers, share
exchanges, sales or conveyances. Notwithstanding the foregoing, a distribution
by the Company to all or substantially all holders of its Common Stock for which
an adjustment to the Conversion Price or provision for conversion of the
Securities may be made pursuant to Section 10.06 shall not be deemed to be a
sale or conveyance of all or substantially all of the assets of the Company for
purposes of this Section 10.12.
In the event the Company shall execute a supplemental indenture
pursuant to this Section 10.12, the Company shall promptly file with the Trustee
an Opinion of Counsel stating that such supplemental indenture is authorized or
permitted by this Indenture and an Officers' Certificate briefly stating the
reasons therefor, the kind or amount of shares of stock or securities or
property
59
(including cash) receivable by Holders of the Securities upon the conversion of
their Securities after any such reclassification, change, consolidation, merger,
share exchange, sale or conveyance, any adjustment to be made with respect
thereto and that all conditions precedent have been complied with.
Section 10.13. Trustee's Disclaimer. The Trustee has no duty to
determine when an adjustment under this Article 10 should be made, how it should
be made or what such adjustment should be made, but may accept as conclusive
evidence of the correctness of any such adjustment, and shall be protected in
relying upon, the Officers' Certificate with respect thereto which the Company
is obligated to file with the Trustee pursuant to Section 10.10. The Trustee
shall not be accountable for and makes no representation as to the validity or
value of any securities or assets issued upon conversion of Securities, and the
Trustee shall not be responsible for the Company's failure to comply with any
provisions of this Article 10. Each Conversion Agent (other than the Company or
an Affiliate of the Company) shall have the same protection under this Section
10.13 as the Trustee.
The Trustee shall not be under any responsibility to determine the
correctness of any provisions contained in any supplemental indenture executed
pursuant to Section 10.12, but may accept as conclusive evidence of the
correctness thereof, and shall be protected in relying upon, the Officers'
Certificate with respect thereto which the Company is obligated to file with the
Trustee pursuant to Section 10.12.
Section 10.14. Voluntary Reduction. The Company from time to time may
reduce the Conversion Price by any amount for any period of time if the period
is at least 20 Trading Days or such longer period as may be required by law and
if the reduction is irrevocable during the period; provided that in no event may
the Conversion Price be less than the par value of a share of Common Stock.
Section 10.15. Simultaneous Adjustments. In the event that this Article
10 requires adjustments to the Conversion Price under more than one of Sections
10.06(c) and (d), and the record dates for the distributions giving rise to such
adjustments shall occur on the same date, then such adjustments shall be made by
applying, first, the provisions of Section 10.06(d), as applicable, and, second,
the provisions of Section 10.06(c). If more than one event requiring adjustment
pursuant to Section 10.06 shall occur before completing the determination of the
Conversion Price for the first event requiring such adjustment, then the Board
of Directors (whose determination shall, if made in good faith, be conclusive)
shall make such adjustments to the Conversion Price (and the calculation
thereof) after giving effect to all such events as shall preserve for Holders
the Conversion Price protection provided in Section 10.06.
ARTICLE 11
SUBORDINATION
Section 11.01. Securities Subordinated to Senior Indebtedness. The
Company covenants and agrees, and each Holder of the Securities, by its
acceptance thereof, likewise covenants and agrees, that all Securities shall be
issued subject to the provisions of this Article 11; and each Person holding any
Security, whether upon original issue or upon transfer, assignment or exchange
thereof, accepts and agrees that the payment of all Obligations on the
Securities by the
60
Company shall, to the extent and in the manner herein set forth, be subordinated
and junior in right of payment to the prior payment in full in cash or Cash
Equivalents of all Obligations on Senior Indebtedness, including, without
limitation, the Company's Obligations under the Credit Agreement; that the
subordination is for the benefit of, and shall be enforceable directly by, the
holders of Senior Indebtedness or their Representative, and that each holder of
Senior Indebtedness or their Representative whether now outstanding or hereafter
created, incurred, assumed or guaranteed shall be deemed to have acquired Senior
Indebtedness in reliance upon the covenants and provisions contained in this
Indenture and the Securities.
Section 11.02. Payments to Holders. No payment shall be made with
respect to the Obligations on the Securities (including, but not limited to, the
Change in Control Purchase Price with respect to the Securities subject to
purchase in accordance with Article 3 as provided in this Indenture), except
payments and distributions made by the Trustee as permitted by the first or
second paragraph of Section 11.05, if:
(i) a default in the Obligations due on any 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), unless and until such default shall have been
cured or waived or shall have ceased to exist; 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 and the Trustee receives a notice of the default (a
"Payment Blockage Notice") from a Representative or holder of
Designated Senior Indebtedness or the Company.
Subject to the provisions of Section 11.05, 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 unless and until
at least 365 consecutive days shall have elapsed since the effectiveness of the
immediately prior Payment Blockage Notice and all scheduled payments on the
Securities that have come due have been paid in full in cash. No nonpayment
default that existed or was continuing on the date of delivery of any Payment
Blockage Notice to the Trustee (unless such default was waived, cured or
otherwise ceased to exist and thereafter subsequently reoccurred) shall be, or
be made, the basis for a subsequent Payment Blockage Notice.
The Company may and shall resume payments on and distributions in
respect of the Securities:
(a) in the case of a default referred to in clause (i)
above, upon the date upon which the default is cured or waived or
ceases to exist, or
(b) in the case of a default referred to in clause (ii)
above, upon the earlier of (1) the date on which such default is cured
or waived or ceases to exist or (2) 179 days after the date on which
the applicable Payment Blockage Notice is received, if the
61
maturity of such Designated Senior Indebtedness has not been
accelerated, unless this Article 11 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 similar proceedings, all amounts due or to become due upon all
Senior Indebtedness shall first be paid in full in cash, or other payments
satisfactory to the holders of Senior Indebtedness before any payment is made on
account of the principal of, premium, if any, or interest (including Contingent
Interest and Liquidated Damages, if any) on the Securities (except payments made
pursuant to Article 8 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 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 Securities or the Trustee would be
entitled, except for the provision of this Article 11, 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 Securities 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, or to the trustee or trustees under any
indenture pursuant to which any instruments evidencing any Senior Indebtedness
may have been issued, 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 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 Securities or
to the Trustee.
For purposes of this Article 11, the words "cash, property or
securities" shall not be deemed to include shares of 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 11 with respect
to the Securities 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, transfer or lease of its property as an
entirety, or substantially as an entirety, to another corporation upon the terms
and conditions provided for in Article 5 shall not be deemed a dissolution,
winding-up, liquidation or reorganization for the purposes of this Section 11.02
if such other corporation shall, as a part of such consolidation, merger,
conveyance, transfer or lease, comply with the conditions stated in Article 5.
62
In the event of the acceleration of the Securities because of an Event
of Default, no payment or distribution shall be made to the Trustee or any
Holder of Securities in respect of the principal of, premium, if any, or
interest (including Contingent Interest and Liquidated Damages, if any) on the
Securities by the Company (including, but not limited to, the Change in Control
Purchase Price with respect to the Securities subject to purchase in accordance
with Article 3 as provided in this Indenture), except payments and distributions
made by the Trustee as permitted by Section 11.05, 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 Securities is accelerated because of
an Event of Default, the Company shall promptly notify holders of Senior
Indebtedness of such 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, shall be received by the
Trustee or the Holders of the Securities before all Senior Indebtedness is paid
in full, in cash or other payment satisfactory to the holders of 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 Senior
Indebtedness, 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, or to the trustee or
trustees under any indenture pursuant to which any instruments evidencing any
Senior Indebtedness may have been issued, as their respective interests may
appear, as calculated by the Company, for application to the payment of all
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
Senior Indebtedness, after giving effect to any concurrent payment or
distribution to or for the holders of such Senior Indebtedness.
Nothing in this Section 11.02 shall apply to claims of, or payments to,
the Trustee under or pursuant to Section 7.07. This Section 11.02 shall be
subject to the further provisions of Section 11.05.
Section 11.03. Subrogation of Securities. Subject to the payment in
full, in cash or other payment satisfactory to the holders of Senior
Indebtedness, of all Senior Indebtedness, the rights of the Holders of the
Securities 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 11 (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 Securities 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
Obligations on the Securities shall be paid in full in cash or other payment
satisfactory to the holders of Senior Indebtedness; 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
Securities or the Trustee would be entitled except for the provisions of this
Article 11, and no payment over pursuant to the provisions of this Article 11,
to or for the benefit of the holders of Senior Indebtedness by Holders of the
Securities or the Trustee, shall, as between the Company,
63
its creditors other than holders of Senior Indebtedness, and the Holders of the
Securities, 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 Securities pursuant to
the subrogation provisions of this Article 11, 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 Securities. It is understood that the
provisions of this Article 11 are and are intended solely for the purposes of
defining the relative rights of the Holders of the Securities, on the one hand,
and the holders of the Senior Indebtedness, on the other hand.
Nothing contained in this Article 11 or elsewhere in this Indenture or
in the Securities is intended to or shall impair, as among the Company, its
creditors other than the holders of Senior Indebtedness, and the Holders of the
Securities, the obligation of the Company, which is absolute and unconditional,
to pay to the Holders of the Securities the Obligations on the Securities as and
when the same shall become due and payable in accordance with their terms, or is
intended to or shall affect the relative rights of the Holders of the Securities
and creditors of the Company other than the holders of the Senior Indebtedness,
nor shall anything herein or therein prevent the Trustee or the Holder of any
Security from exercising all remedies otherwise permitted by applicable law upon
default under this Indenture, subject to the rights, if any, under this Article
11 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 11, the Trustee, and the Holders of the Securities 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
Securities, for the purpose of ascertaining the Persons entitled to participate
in such distribution, the holders of the Senior Indebtedness and other
indebtedness of the Company, the amount thereof or payable thereon and all other
facts pertinent thereto or to this Article 11.
Section 11.04. Authorization to Effect Subordination. Each Holder of a
Security 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 11 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 Section 11.03 hereof at least 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 Securities.
Section 11.05. 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 which would
prohibit the making of any payment of monies to or by the Trustee or any Paying
Agent in respect of the Securities pursuant to the provisions of this Article
11. Notwithstanding the provisions of this Article 11 or any other provision of
this
64
Indenture, the Trustee shall not be charged with knowledge of the existence of
any facts which would prohibit the making of any payment of monies to or by the
Trustee in respect of the Securities pursuant to the provisions of this Article
11, 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 or from any trustee thereof; and before the receipt of any
such written notice, the Trustee, subject to the provisions of Section 7.01,
shall be entitled in all respects to assume that no such facts exist; provided
that if on a date not less than three Business Days 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 (including Contingent Interest and Liquidated Damages, if any)
on any Security) the Trustee shall not have received, with respect to such
monies, the notice provided for in this Section 11.05, then, anything herein
contained to the contrary notwithstanding, the Trustee shall have full power and
authority to receive such monies and to apply the same to the purpose for which
they were received, and shall not be affected by any notice to the contrary
which may be received by it on or after such prior date. Notwithstanding
anything in this Article 11 to the contrary, nothing shall prevent any payment
by the Trustee to the Holders of monies deposited with it pursuant to Article 8,
and any such payment shall not be subject to the provisions of Article 11.
The Trustee, subject to the provisions of Section 7.01, 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. In the event that the Trustee determines in good
faith that further evidence is required with respect to the right of any Person
as a holder of Senior Indebtedness to participate in any payment or distribution
pursuant to this Article 11, the Trustee may request such Person to furnish
evidence to the reasonable satisfaction of the Trustee as to the amount of
Senior Indebtedness held by such Person, the extent to which such Person is
entitled to participate in such payment or distribution and any other facts
pertinent to the rights of such Person under this Article 11, and if such
evidence is not furnished the Trustee may defer any payment to such Person
pending judicial determination as to the right of such Person to receive such
payment.
Section 11.06. Trustee's Relation to Senior Indebtedness. The Trustee
in its individual capacity shall be entitled to all of the rights set forth in
this Article 11 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 7.11 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 11, and no implied covenants or
obligations with respect to the holders of Senior Indebtedness shall be read
into this Indenture against the Trustee. The Trustee shall not be deemed to owe
any fiduciary duty to the holders of Senior Indebtedness and, the Trustee shall
not be liable to any holder of Senior Indebtedness or any Representative if it
shall pay over or deliver to Holders of
65
Securities, the Company or any other Person money or assets to which any holder
of Senior Indebtedness or such Representative shall be entitled by virtue of
this Article 11 or otherwise.
Section 11.07. 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.
Section 11.08. Certain Conversions Deemed Payment. For the purposes of
this Article 11 only, (1) the issuance and delivery of junior securities upon
conversion of Securities in accordance with Article 10 shall not be deemed to
constitute a payment or distribution on account of the principal of (or premium,
if any) or interest (including Contingent Interest and Liquidated Damages, if
any) on Securities or on account of the purchase or other acquisition of
Securities, and (2) the payment, issuance or delivery of cash (except in
satisfaction of fractional shares pursuant to Section 10.02), property or
securities (other than junior securities) upon conversion of a Security shall be
deemed to constitute payment on account of the principal of such Security. For
the purposes of this Section 11.08, the term "junior securities" means (a)
shares of any stock of any class of the Company, or (b) securities of the
Company which are subordinated in right of payment to all Senior Indebtedness
which 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 Securities
are so subordinated as provided in this Article. Nothing contained in this
Article 11 or elsewhere in this Indenture or in the Securities is intended to or
shall impair, as among the Company, its creditors other than holders of Senior
Indebtedness and the Holders, the right, which is absolute and unconditional, of
the Holder of any Security to convert such Security in accordance with Article
10.
Section 11.09. 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 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 in addition to or in
place of the Trustee; provided, however, that the first paragraph of Section
11.05 shall not apply to the Company or any Affiliate of the Company if it or
such Affiliate acts as Paying Agent.
Section 11.10. 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 11, 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.
ARTICLE 12
MISCELLANEOUS
66
Section 12.01. Trust Indenture Act Controls. If any provision of this
Indenture limits, qualifies, or conflicts with another provision which is
required to be included in this Indenture by the TIA, the required provision
shall control.
Section 12.02. Notices. Any request, demand, authorization, notice,
waiver, consent or communication shall be in writing and delivered in person or
mailed by first-class mail, postage prepaid, addressed as follows, or
transmitted by facsimile transmission (confirmed orally) to the following
facsimile numbers:
67
if to the Company, to:
Kaydon Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: President
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ PLLC
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, Esq.
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
if to the Trustee, to:
SunTrust Bank
▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-2900
Attention: Corporate Trust Department
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
The Company or the Trustee by notice given to the other in the manner
provided above may designate additional or different addresses for subsequent
notices or communications.
Any notice or communication given to a Holder shall be mailed to the
Holder, by first-class mail, postage prepaid, at the Holder's address as it
appears on the registration books of the Registrar and shall be sufficiently
given if so mailed within the time prescribed.
Failure to mail a notice or communication to a Holder or any defect in
it shall not affect its sufficiency with respect to other Holders. If a notice
or communication is mailed in the manner provided above, it is duly given,
whether or not received by the addressee.
If the Company mails a notice or communication to the Holders, it shall
mail a copy to the Trustee and each Registrar, Paying Agent, Conversion Agent or
co-registrar.
68
Section 12.03. Communication by Holders with Other Holders. Holders may
communicate pursuant to TIA Section 312(b) with other Holders with respect to
their rights under this Indenture or the Securities. The Company, the Trustee,
the Registrar, the Paying Agent, the Conversion Agent and anyone else shall have
the protection of TIA Section 312(c).
Section 12.04. Certificate and Opinion as to Conditions Precedent. Upon
any request or application by the Company to the Trustee to take or refrain from
taking any action under this Indenture, the Company shall furnish to the
Trustee:
(a) an Officers' Certificate stating that, in the opinion
of the signers, all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with; and
(b) an Opinion of Counsel stating that, in the opinion of
such counsel, all such conditions precedent have been complied with.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such ▇▇▇▇▇▇ be certified by, or covered by the opinion of, only one such Person,
or that they be so certified or covered by only one document, but one such
Person may certify or give an opinion with respect to some matters and one or
more other such eligible and qualified Persons as to other matters, and any such
Person may certify or give an opinion as to such matters in one or several
documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable case should know, that the certificate or opinion or representations
with respect to the matters upon which his or her certificate or opinion is
based are erroneous. Any such certificate or Opinion of Counsel may be based,
insofar as it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating the
information on which counsel is relying unless such counsel knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Section 12.05. Statements Required in Certificate or Opinion. Each
Officers' Certificate or Opinion of Counsel with respect to compliance with a
covenant or condition provided for in this Indenture shall include:
(a) a statement that each person making such Officers'
Certificate or Opinion of Counsel has read such covenant or condition;
(b) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such Officers' Certificate or Opinion of Counsel are
based;
69
(c) a statement that, in the opinion of each such person,
he has made such examination or investigation as is necessary to enable
such person to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(d) a statement that, in the opinion of such person, such
covenant or condition has been complied with.
Section 12.06. Separability Clause. In case any provision in this
Indenture or in the Securities shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
Section 12.07. Rules by Trustee, Paying Agent, Conversion Agent and
Registrar. The Trustee may make reasonable rules for action by or a meeting of
Holders. The Registrar, the Conversion Agent and the Paying Agent may make
reasonable rules for their functions.
Section 12.08. Legal Holidays. A "Legal Holiday" is any day other than
a Business Day. If any specified date (including a date for giving notice) is a
Legal Holiday, the action shall be taken on the next succeeding day that is not
a Legal Holiday, and, if the action to be taken on such date is a payment in
respect of the Securities, no interest (including Contingent Interest or
Liquidated Damages, if any), shall accrue for the intervening period.
Section 12.09. Governing Law. THIS INDENTURE AND EACH NOTE 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.
Section 12.10. No Recourse Against Others. A director, officer,
employee or stockholder, as such, of the Company shall not have any liability
for any obligations of the Company under the Securities or for any claim based
on, in respect of or by reason of such obligations or their creation. By
accepting a Security, each Securityholder shall waive and release all such
liability. The waiver and release shall be part of the consideration for the
issue of the Securities.
Section 12.11. Successors. All agreements of the Company in this
Indenture and the Securities shall bind its successor. All agreements of the
Trustee in this Indenture shall bind its successor.
Section 12.12. Multiple Originals. 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.
70
IN WITNESS WHEREOF, the undersigned, being duly authorized, have
executed this Indenture on behalf of the respective parties hereto as of the
date first above written.
KAYDON CORPORATION
By: /S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: President and Chief
Executive Officer
SUNTRUST BANK, as Trustee
By: /S/ ▇▇▇▇▇▇ ▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President
71
EXHIBIT A-1
{FORM OF FACE OF GLOBAL SECURITY}
THIS SECURITY 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 SECURITY IS $1,000 PER $1,000 OF PRINCIPAL AMOUNT,
THE ISSUE DATE IS MAY 23, 2003 AND THE COMPARABLE YIELD IS 8.5% PER ANNUM.
HOLDERS OF THIS SECURITY MAY OBTAIN INFORMATION REGARDING THE AMOUNT OF ORIGINAL
ISSUE DISCOUNT, YIELD TO MATURITY AND THE PROJECTED PAYMENT SCHEDULE FOR THIS
SECURITY BY SUBMITTING A WRITTEN REQUEST FOR SUCH INFORMATION TO: KAYDON
CORPORATION, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
ATTN.: PRESIDENT, SUCH INFORMATION TO BE MADE AVAILABLE, BEGINNING NO LATER THAN
10 DAYS AFTER THE ISSUE DATE, PROMPTLY UPON REQUEST.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY TO KAYDON CORPORATION (THE "COMPANY") OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT
HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS TO NOMINEES OF
THE DEPOSITORY TRUST COMPANY, OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S
NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO
TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN ARTICLE TWO OF
THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.
THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT
FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"), AND THIS SECURITY, AND THE COMMON STOCK DELIVERABLE UPON
CONVERSION HEREOF OR UPON PURCHASE OF THIS SECURITY BY THE COMPANY MAY NOT BE
OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS SECURITY IS HEREBY
NOTIFIED THAT THE SELLER OF THIS SECURITY MAY BE RELYING ON THE EXEMPTION FROM
THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A
THEREUNDER. THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE COMPANY
THAT (A) THIS SECURITY MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED,
A-1-1
ONLY (I) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (II) PURSUANT TO AN EXEMPTION
FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF
AVAILABLE) OR (III) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT, IN EACH OF CASES (I) THROUGH (III) IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES, AND (B) THE HOLDER
WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS
SECURITY FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.
THE FOREGOING LEGEND MAY BE REMOVED FROM THIS SECURITY ON SATISFACTION OF THE
CONDITIONS SPECIFIED IN THE INDENTURE.
A-1-2
KAYDON CORPORATION
4.0% Contingent Convertible Senior Subordinated Notes Due 2023
No.: CUSIP: 486587 AA6
Issue Date: May 23, 2003 Principal Amount: $
KAYDON CORPORATION, a Delaware corporation, promises to pay to Cede &
Co. or registered assigns, the principal amount as set forth on Schedule I
hereto, on May 23, 2023, subject to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place. This Security is convertible
as specified on the other side of this Security.
Interest Payment Dates: May 23 and November 23, commencing November 23,
2003.
Record Dates: May 1 and November 1, commencing November 1, 2003.
Dated: KAYDON CORPORATION
By: ________________________
Name: __________________
Title: _________________
[Corporate Seal]
A-1-3
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
SunTrust Bank, as Trustee, certifies that this is one of the Securities
referred to in the within-mentioned Indenture.
By: _________________________
Authorized Signatory
Dated:___________
A-1-4
{FORM OF REVERSE SIDE OF NOTE}
KAYDON CORPORATION
4.0% Contingent Convertible Senior Subordinated Notes Due 2023
1. Interest.
This Security shall accrue interest at an initial rate of 4.0% per annum. The
Company promises to pay interest on the Securities in cash semiannually on each
May 23 and November 23, commencing November 23, 2003, to Holders of record on
the immediately preceding May 1 and November 1, respectively. Interest on the
Securities will accrue from the most recent date to which interest has been
paid, or if no interest has been paid, from the Issue Date, until the principal
amount is paid or duly made available for payment. The Company will pay interest
on any overdue principal amount at the interest rate borne by the Securities at
the time such interest on the overdue principal amount accrues, compounded
semiannually, and it shall pay interest on overdue installments of interest and
Liquidated Damages, if any (without regard to any applicable grace period), at
the same interest rate compounded semiannually. Interest (including Contingent
Interest, if any) on the Securities will be computed on the basis of a 360-day
year comprised of twelve 30-day months.
The Company shall pay additional interest ("Contingent Interest") to the Holders
during any six-month period (a "Contingent Interest Period") from May 23 to, but
excluding, November 23 and from November 23 to, but excluding, May 23, with the
initial six-month period commencing May 23, 2008, if the average of the Security
Trading Price for the five Trading Days ending on the third Trading Day
immediately preceding the first day of the applicable Contingent Interest Period
equals $1,200 or more. The amount of Contingent Interest payable per $1,000
principal amount of Securities in respect of any Contingent Interest Period
shall equal 0.50% per annum on $1,000 of Securities. The Company will pay
Contingent Interest, if any, in the same manner as it will pay interest as
described above.
Upon determination that Holders will be entitled to receive Contingent Interest
for a Contingent Interest Period, on or prior to the first day of such
Contingent Interest Period, the Company shall issue a press release and publish
such information on its web site at ▇▇▇▇://▇▇▇.▇▇▇▇▇▇.▇▇▇.
2. Method of Payment.
The Company will pay interest (including Contingent Interest and Liquidated
Damages, if any), on this Security (except defaulted interest) to the Person who
is the registered Holder of this Security at the close of business on May 1 or
November 1, as the case may be, next preceding the related interest payment
date. Subject to the terms and conditions of the Indenture, the Company will
make payments in respect of the Redemption Price, Purchase Price, Change in
Control Purchase Price and the principal amount at Stated Maturity, as the case
may be, to the Holder who surrenders a Security to a Paying Agent to collect
such payments in respect of the Security. The Company will pay cash amounts in
money of the United States that at the time of payment is legal tender for
payment of public and private debts. However, the Company may pay interest
(including Contingent Interest, if any), Liquidated Damages, if any, the
Redemption
A-1-5
Price, Purchase Price, Change in Control Purchase Price and the principal amount
at Stated Maturity, as the case may be, by check or wire payable in such money;
provided, however, that a Holder holding Securities with an aggregate principal
amount in excess of $1,000,000 may request payment by wire transfer in
immediately available funds to an account in North America at the election of
such Holder. The Company may mail an interest check to the Holder's registered
address. Notwithstanding the foregoing, so long as this Security is registered
in the name of a Depositary or its nominee, all payments hereon shall be made by
wire transfer of immediately available funds to the account of the Depositary or
its nominee.
3. Paying Agent, Conversion Agent and Registrar.
Initially, SunTrust Bank (the "Trustee") will act as Paying Agent, Conversion
Agent and Registrar. The Company may appoint and change any Paying Agent,
Conversion Agent or Registrar without notice, other than notice to the Trustee;
provided that the Company will maintain at least one Paying Agent having an
office or agency in the State of New York, City of New York, Borough of
Manhattan, which shall initially be an office or agency of the Trustee. The
Company or any of its Subsidiaries or any of their Affiliates may act as Paying
Agent, Conversion Agent or Registrar.
4. Indenture.
The Company issued the Securities under an Indenture dated as of May 23, 2003
(the "Indenture"), between the Company and the Trustee. The terms of the
Securities include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939, as in effect from
time to time (the "TIA"). Capitalized terms used herein and not defined herein
have the meanings ascribed thereto in the Indenture. The Securities are subject
to all such terms, and Holders are referred to the Indenture and the TIA for a
statement of those terms.
The Securities are general unsecured obligations of the Company limited to up to
$200,000,000 aggregate principal amount (which shall include the Initial
Purchasers' option to purchase $30,000,000 of additional Securities). The
Indenture does not limit other indebtedness of the Company, secured or
unsecured.
5. Redemption at the Option of the Company.
No sinking fund is provided for the Securities. Beginning on May 30, 2008 and
during the periods thereafter to maturity, the Securities are redeemable as a
whole, or from time to time in part, in any integral multiple of $1,000, at any
time at the option of the Company at a Redemption Price equal to 100% of the
principal amount, together with accrued but unpaid interest, thereon (including
Contingent Interest and Liquidated Damages, if any), up to but not including the
Redemption Date; provided that, if the Redemption Date is on or after an
interest record date but on or prior to the related interest payment date,
interest will be payable to the Holders in whose names the Securities are
registered at the close of business on the relevant record date.
A-1-6
6. Purchase By the Company at the Option of the Holder; Purchase at the
Option of the Holder Upon a Change in Control.
Subject to the terms and conditions of the Indenture, the Company shall become
obligated to purchase, at the option of the Holder, all or any portion of the
Securities held by such Holder, in any integral multiple of $1,000, on May 23,
2008, May 23, 2013 and May 23, 2018 (each, a "Purchase Date") at a purchase
price per Security equal to 100% of the aggregate principal amount of the
Security (the "Purchase Price"), together with accrued but unpaid interest
(including Contingent Interest and Liquidated Damages, if any), thereon, up to
but not including the Purchase Date (provided that, if the Purchase Date is on
or after an interest record date but on or prior to the related interest payment
date, accrued but unpaid interest will be payable to the Holders in whose names
the Securities are registered at the close of business on the relevant record
date) upon delivery of a Purchase Notice containing the information set forth in
the Indenture, together with the Securities subject thereto, at any time from
the opening of business on the date that is 30 Business Days prior to such
Purchase Date until the close of business on the Business Day prior to such
Purchase Date, and upon delivery of the Securities to the Paying Agent by the
Holder as set forth in the Indenture.
At the option of the Holder and subject to the terms and conditions of the
Indenture, the Company shall become obligated to purchase the Securities held by
such Holder after the occurrence of a Change in Control of the Company for a
Change in Control Purchase Price equal to 100% of the principal amount thereof
plus accrued but unpaid interest (including Contingent Interest and Liquidated
Damages, if any), thereon, up to but not including the Change in Control
Purchase Date which Change in Control Purchase Price shall be paid in cash.
Holders have the right to withdraw any Purchase Notice or Change in Control
Purchase Notice, as the case may be, by delivering to the Paying Agent a written
notice of withdrawal in accordance with the provisions of the Indenture.
If cash sufficient to pay the Purchase Price or Change in Control Purchase
Price, as the case may be, and accrued but unpaid interest (including Contingent
Interest and Liquidated Damages, if any), on all Securities or portions thereof
to be purchased as of the Purchase Date or the Change in Control Purchase Date,
as the case may be, is deposited with the Paying Agent on the Business Day prior
the Purchase Date or the Change in Control Purchase Date, interest (including
Contingent Interest and Liquidated Damages, if any), shall cease to accrue on
such Securities (or portions thereof) as of such Purchase Date or Change in
Control Purchase Date, and the Holder thereof shall have no other rights as such
other than the right to receive the Purchase Price or Change in Control Purchase
Price, as the case may be, and interest (including Contingent Interest and
Liquidated Damages, if any), upon surrender of such Security.
7. Notice of Redemption.
Notice of redemption pursuant to paragraph 5 of this Security will be mailed at
least 30 days but not more than 60 days before the Redemption Date to each
Holder of Securities to be redeemed at the Holder's registered address. If money
sufficient to pay the Redemption Price of all Securities (or portions thereof)
to be redeemed on the Redemption Date is deposited with the Paying Agent prior
to or on the Redemption Date, immediately after such Redemption Date interest
(including Contingent Interest and Liquidated Damages, if any), cease to accrue
on such
A-1-7
Securities or portions thereof. Securities in denominations larger than $1,000
of principal amount may be redeemed in part but only in integral multiples of
$1,000 of principal amount.
8. Conversion.
Subject to the provisions of Article 10 of the Indenture, a Holder of a Security
may convert such Security into shares of Common Stock of the Company if any of
the conditions specified in paragraphs (a) through (f) of Section 10.01 of the
Indenture is satisfied; provided, however, that if such Security is called for
redemption, the conversion right will terminate at the close of business on the
second Business Day before the redemption date of such Security (unless the
Company shall default in making the redemption payment when due, in which case
the conversion right shall terminate at the close of business on the date such
Default is cured and such Security is redeemed). The initial conversion price is
$29.16 per share, subject to adjustment under certain circumstances as described
in the Indenture (the "Conversion Price"). The number of shares issuable upon
conversion of a Security is determined by dividing the principal amount
converted by the Conversion Price in effect on the Conversion Date. In the event
of a conversion of a Security, the Company has the option to deliver the Cash
Conversion Price to the Holder of the Security surrendered for such conversion
as provided in Section 10.02 of the Indenture. Upon conversion, no adjustment
for interest (including Contingent Interest, if any), or dividends will be made.
No fractional shares will be issued upon conversion; in lieu thereof, an amount
will be paid in cash based upon the current market price (as defined in the
Indenture) of the Common Stock on the last Trading Day prior to the date of
conversion.
To convert a Security, a Holder must (a) complete and sign the conversion notice
set forth below and deliver such notice to the Conversion Agent, (b) surrender
the Security to the Conversion Agent, (c) furnish appropriate endorsements and
transfer documents if required by the Registrar or the Conversion Agent, (d) pay
any transfer or similar tax, if required and (e) if the Security is held in
book-entry form, complete and deliver to the Depositary appropriate instructions
pursuant to the Depositary's book-entry conversion programs. If a Holder
surrenders a Security for conversion between the record date for the payment of
an installment of interest and the next interest payment date, the Security must
be accompanied by payment of an amount equal to the interest (including
Contingent Interest and Liquidated Damages, if any), payable on such interest
payment date on the principal amount of the Security or portion thereof then
converted; provided, however, that no such payment shall be required if such
Security has been called for redemption on a redemption date within the period
between and including such record date and such interest payment date, or if
such Security is surrendered for conversion on the interest payment date. A
Holder may convert a portion of a Security equal to $1,000 or any integral
multiple thereof.
A Security in respect of which a Holder has delivered a Purchase Notice or a
Change of Control Purchase Notice exercising the option of such Holder to
require the Company to repurchase such Security as provided in Section 3.08 or
Section 3.09, respectively, of the Indenture may be converted only if such
notice of exercise is withdrawn as provided above and in accordance with the
terms of the Indenture.
A-1-8
9. Denominations; Transfer; Exchange.
The Securities are in fully registered form, without coupons, in denominations
of $1,000 of principal amount and integral multiples of $1,000. A Holder may
transfer or exchange Securities in accordance with the Indenture. The Registrar
may require a Holder, among other things, to furnish appropriate endorsements
and transfer documents and to pay any taxes and fees required by law or
permitted by the Indenture. The Registrar need not transfer or exchange any
Securities selected for redemption (except, in the case of a Security to be
redeemed in part, the portion of the Security not to be redeemed) or any
Securities in respect of which a Purchase Notice or a Change in Control Purchase
Notice has been given and not withdrawn (except, in the case of a Security to be
purchased in part, the portion of the Security not to be purchased) or any
Securities for a period of 15 days before the mailing of a notice of redemption
of Securities to be redeemed.
10. Persons Deemed Owners.
The registered Holder of this Security may be treated as the owner of this
Security for all purposes.
11. Unclaimed Money or Securities.
The Trustee and the Paying Agent shall return to the Company upon written
request any money or securities held by them for the payment of any amount with
respect to the Securities that remains unclaimed for two years, subject to
applicable unclaimed property law. After return to the Company, Holders entitled
to the money or securities must look to the Company, for payment as general
creditors unless an applicable abandoned property law designates another person.
12. Amendment; Waiver.
Subject to certain exceptions set forth in the Indenture, (i) the Indenture or
the Securities may be amended with the written consent of the Holders of at
least a majority in aggregate principal amount of the Securities at the time
outstanding and (ii) certain Defaults may be waived with the written consent of
the Holders of a majority in aggregate principal amount of the Securities at the
time outstanding. Subject to certain exceptions set forth in the Indenture,
without the consent of any Securityholder, the Company and the Trustee may amend
the Indenture or the Securities (i) to cure any ambiguity, omission, defect or
inconsistency, or make any other change that does not adversely affect the
rights of any Holder (ii) to comply with Article 5 or Section 10.12 of the
Indenture, (iii) to make provisions with respect to the conversion right of
Holders pursuant to the requirements of Section 10.12 and Section 10.01 of the
Indenture, (iv) to evidence and provide for the acceptance of appointment under
the Indenture by a successor Trustee, or (v) to comply with the provisions of
the TIA or any requirement of the SEC in connection with the qualification of
the Indenture under the TIA.
13. Defaults and Remedies.
Except as set forth in the Indenture, if an Event of Default occurs and is
continuing, the Trustee or the Holders of not less than 25% in principal amount
of Securities then outstanding may
A-1-9
declare all the Securities to be due and payable in the manner, at the time and
with the effect provided in the Indenture. Holders of Securities may not enforce
the Indenture or the Securities except as provided in the Indenture. The Trustee
is not obligated to enforce the Indenture or the Securities unless it has
received indemnity reasonably satisfactory to it. The Indenture permits, subject
to certain limitations therein provided, Holders of a majority in aggregate
principal amount of the Notes then outstanding to direct the Trustee in its
exercise of any trust or power. The Trustee may withhold from Holders of Notes
notice of any continuing Default or Event of Default (except a Default in
payment of principal, premium, if any, or interest when due, for any reason or a
Default in compliance with Article 5 of the Indenture) if it determines that
withholding notice is in their interest
14. Trustee Dealings with the Company.
Subject to certain limitations imposed by the TIA, the Trustee under the
Indenture, in its individual or any other capacity, may become the owner or
pledgee of Securities and may otherwise deal with and collect obligations owed
to it by the Company or its Affiliates and may otherwise deal with the Company
or its Affiliates with the same rights it would have if it were not Trustee.
15. No Recourse Against Others.
A director, officer, employee or shareholder, as such, of the Company shall not
have any liability for any obligations of the Company under the Securities or
the Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation. By accepting a Security, each Securityholder
waives and releases all such liability. The waiver and release are part of the
consideration for the issue of the Securities.
16. Ranking.
The Securities shall be direct, unsecured senior subordinated obligations of the
Company and shall rank equally in right of payment with all other unsecured
senior subordinated indebtedness of the Company and be subject to the provisions
regarding subordination contained in Article 11 of the Indenture. The Securities
are not guaranteed.
17. Subordination.
The Securities are subordinated in right of payment, in the manner and to the
extent set forth in the Indenture, to the prior payment in full in cash or Cash
Equivalents of all Obligations on Senior Indebtedness of Company, whether
outstanding on the date of the Indenture or thereafter created, incurred,
assumed or guaranteed. Each Holder by its acceptance hereof agrees to be bound
by such provisions and authorizes and expressly directs the Trustee, on its
behalf, to take such action as may be necessary or appropriate to effectuate the
subordination provided for in the Indenture and appoints the Trustee its
attorney-in-fact for such purposes.
18. Authentication.
This Security shall not be valid until an authorized signatory of the Trustee
manually signs the Trustee's Certificate of Authentication on the other side of
this Security.
A-1-10
19. Abbreviations.
Customary abbreviations may be used in the name of a Securityholder or an
assignee, such as TEN COM ("Tenants In Common"), TEN ENT ("Tenants By The
Entireties"), JT TEN ("Joint Tenants With Right Of Survivorship And Not As
Tenants In Common"), CUST ("Custodian") and U/G/M/A ("Uniform Gift To Minors
Act").
20. Governing Law.
THE LAWS OF THE STATE OF NEW YORK SHALL GOVERN THE INDENTURE AND THIS SECURITY.
21. CUSIP Numbers.
Pursuant to a recommendation promulgated by the Committee on Uniform Security
Identification Procedures, the Company has caused CUSIP numbers to be printed on
the Securities as a convenience to the Holders of the Securities. No
representation is made as to the accuracy of such numbers as printed on the
Securities and reliance may be placed only on the other identification numbers
printed hereon.
The Company will furnish to any Securityholder upon written request and
without charge a copy of the Indenture which has in it the text of this Security
in larger type. Requests may be made to:
Kaydon Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn.: President
ASSIGNMENT FORM CONVERSION NOTICE
To assign this Security, fill in the To convert this Security into Common
form below Stock of the Company, check the box
[ ]
I or we assign and transfer this To convert only part of this Security,
Security to state the principal amount to be
______________________________________ converted (which must be $1,000 or an
______________________________________ integral multiple of $1,000):
______________________________________ ______________________________________
(Insert assignee's soc. sec. or tax
ID no.)
______________________________________ If you want the stock certificate made
______________________________________ out in another person's name fill in
the form below:
(Print or type assignee's name, ______________________________________
address and zip code) ______________________________________
______________________________________ ______________________________________
______________________________________
and irrevocably appoint ______________ (Insert the other person's soc. sec.
agent to transfer this Security on the tax ID no.)
books of ______________________________________
A-1-11
the Company. The agent may substitute ______________________________________
another to act for him. ______________________________________
(Print or type other person's name,
addressand zip code)
Date:_____________ Your Signature: ______________________
(Sign exactly as your name appears on
the other side of this Security)
Signature Guaranteed
______________________________________
Participant in a Recognized Signature
Guarantee Medallion Program
By: __________________________________
Authorized Signatory
A-1-12
FORM OF OPTION TO ELECT REPURCHASE UPON A CHANGE IN CONTROL
To: Kaydon Corporation
The undersigned registered holder of this Security hereby acknowledges receipt
of a notice from Kaydon Corporation (the "Company") as to the occurrence of a
Change In Control with respect to the Company and requests and instructs the
Company to repurchase this Security, or the portion hereof (which is $1,000
principal amount or a multiple thereof) designated below, in accordance with the
terms of the Indenture referred to in this Security and directs that the check
in payment for this Security or the portion thereof (or, if the Company elects
in accordance with Section 3.09 of the Indenture, Common Stock) and any
Securities representing any unrepurchased principal amount hereof, be issued and
delivered to the registered holder hereof unless a different name has been
indicated below. If any portion of this Security not repurchased is to be issued
in the name of a Person other than the undersigned, the undersigned shall pay
all transfer taxes payable with respect thereto.
Dated:_______________
___________________________
Signature(s)
Fill in for registration of shares if to be delivered, and Securities if to be
issued other than to and in the name of registered holder:
__________________________
(Name)
__________________________
(Street Address)
__________________________
(City, state and zip code)
Please print name and address
principal amount to be purchased (if less than all): $__,000
A-1-13
SCHEDULE I
KAYDON CORPORATION
4.0% Contingent Convertible Senior Subordinated Notes Due 2023
Date Principal Amount Notation
---- ---------------- --------
A-1-14
EXHIBIT A-2
{Form of Certificated Security}
THIS SECURITY 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 SECURITY IS $1,000 PER $1,000 OF PRINCIPAL AMOUNT,
THE ISSUE DATE IS MAY 23, 2003 AND THE COMPARABLE YIELD IS 8.5% PER ANNUM.
HOLDERS OF THIS SECURITY MAY OBTAIN INFORMATION REGARDING THE AMOUNT OF ORIGINAL
ISSUE DISCOUNT, YIELD TO MATURITY AND THE PROJECTED PAYMENT SCHEDULE FOR THIS
SECURITY BY SUBMITTING A WRITTEN REQUEST FOR SUCH INFORMATION TO: KAYDON
CORPORATION, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
ATTN.: PRESIDENT, SUCH INFORMATION TO BE MADE AVAILABLE, BEGINNING NO LATER THAN
10 DAYS AFTER THE ISSUE DATE, PROMPTLY UPON REQUEST.
THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT
FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"), AND THIS SECURITY AND THE COMMON STOCK DELIVERABLE UPON
CONVERSION HEREOF OR UPON PURCHASE OF THIS SECURITY BY THE COMPANY MAY NOT BE
OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS SECURITY IS HEREBY
NOTIFIED THAT THE SELLER OF THIS SECURITY MAY BE RELYING ON THE EXEMPTION FROM
THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A
THEREUNDER.
THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) THIS
SECURITY MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (I) TO A
PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER
(AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (II) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) OR (III)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN
EACH OF CASES (I) THROUGH (III) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES
LAWS OF ANY STATE OF THE UNITED STATES, AND (B) THE HOLDER WILL, AND EACH
SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS SECURITY FROM IT
OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.
THE FOREGOING LEGEND MAY BE REMOVED FROM THIS SECURITY ON SATISFACTION OF THE
CONDITIONS SPECIFIED IN THE INDENTURE.
A-2-1
KAYDON CORPORATION
4.0% Contingent Convertible Senior Subordinated Notes Due 2023
No.: CUSIP: 486587 AA6
Issue Date: May 23, 2003
Principal Amount: _____________
KAYDON CORPORATION, a Delaware corporation, promises to pay to ________
or registered assigns, the principal amount of _________,
on May 23, 2023, subject to the further provisions of this Security set forth on
the reverse hereof, which further provisions shall for all purposes have the
same effect as if set forth at this place. This Security is convertible as
specified on the other side of this Security.
Interest Payment Dates: May 23 and November 23, commencing November 23, 2003,
Record Dates: May 1 and November 1, commencing November 1, 2003
Dated:
KAYDON CORPORATION
By: ___________________
Name:
Title:
[Corporate Seal]
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
SunTrust Bank, as Trustee, certifies that this is one of the Securities
referred to in the within-mentioned Indenture.
By:_______________________
Authorized Signatory
Dated: ____________
A-2-2
{FORM OF REVERSE SIDE IS IDENTICAL TO EXHIBIT A-1}
A-2-3
EXHIBIT B
Transfer Certificate
In connection with any transfer of any of the Securities within the
period prior to the expiration of the holding period applicable to the sales
thereof under Rule 144(k) under the Securities Act of 1933, as amended (the
"Securities Act") (or any successor provision), the undersigned registered owner
of this Security hereby certifies with respect to $ principal amount of the
above-captioned Securities presented or surrendered on the date hereof (the
"Surrendered Securities") for registration of transfer, or for exchange or
conversion where the securities deliverable upon such exchange or conversion are
to be registered in a name other than that of the undersigned registered owner
(each such transaction being a "transfer"), that such transfer complies with the
restrictive legend set forth on the face of the Surrendered Securities for the
reason checked below:
[ ] A transfer of the Surrendered Securities is made to the Company or any
subsidiaries; or
[ ] The transfer of the Surrendered Securities complies with Rule 144A
under the U.S. Securities Act of 1933, as amended (the "Securities Act"); or
[ ] The transfer of the Surrendered Securities is pursuant to an effective
registration statement under the Securities Act; or
[ ] The transfer of the Surrendered Securities is pursuant to another
available exemption from the registration requirement of the Securities Act; and
unless the box below is checked, the undersigned confirms that, to the
undersigned's knowledge, such Securities are not being transferred to an
"affiliate" of the Company as defined in Rule 144 under the Securities Act (an
"Affiliate").
[ ] The transferee is an Affiliate of the Company.
________________________
Date: __________________________ Signature(s)
(If the registered owner is a corporation, partnership or fiduciary, the title
of the Person signing on behalf of such registered owner must be stated.)
Signature Guaranteed
__________________________________________
Participant in a Recognized Signature
Guarantee Medallion Program
By: ______________________________
Authorized Signatory
B-1
EXHIBIT C
KAYDON CORPORATION ("KDN") CONTINGENT PAYMENT SCHEDULE
23-MAY-03
--------------------------------------------------------------------------------
------------------------------------
ASSUMPTIONS
------------------------------------
Offering size ($ MM) $170
Maturity (years) 20
Issue bond price $1,000
Yield-to-maturity 4.00%
Initial conversion premium 34%
Comparable yield 8.50%
Call protection (years) 5
Stock price $21.76
Contingent trigger 120%
Contingent interest 0.50%
Stock CAGR years 1-5 7.33%
Stock CAGR after year 5 7.33%
Initial conversion price $29.16
Initial conversion ratio 34.2936
Initial parity value $746.23
TV $3,146.37
Growth 422%
Periods 40
CAGR 7.33%
Tax IRR 8.50%
-------------------------------------
COMPARABLE YIELD: 8.50%
-------------------------------------
----------------------------------------------------------------------------------------------------------------------------------
CONTINGENT PAYMENT SCHEDULE
----------------------------------------------------------------------------------------------------------------------------------
BOOK CONVERSION PROJECTED PROJECTED PROJECTED TAX
ACCRETED CONVERSION CONVERSION STOCK VALUE COUPON CONTINGENT PAYMENT ACCRETED
PERIOD VALUE RATIO PRICE PERIOD PRICE (PARITY) INTEREST INTEREST SCHEDULE VALUE
----------------------------------------------------------------------------------------------------------------------------------
0 $1,000.00 34.2936 $29.16 0 $21.76 $746.23 $0.00 $0.00 -$1,000.00 $1,000.00
1 $1,000.00 34.2936 $29.16 1 $22.56 $773.58 $20.00 $0.00 $20.00 $1,022.50
2 $1,000.00 34.2936 $29.16 2 $23.38 $801.93 $20.00 $0.00 $20.00 $1,045.96
3 $1,000.00 34.2936 $29.16 3 $24.24 $831.32 $20.00 $0.00 $20.00 $1,070.41
4 $1,000.00 34.2936 $29.16 4 $25.13 $861.79 $20.00 $0.00 $20.00 $1,095.90
5 $1,000.00 34.2936 $29.16 5 $26.05 $893.37 $20.00 $0.00 $20.00 $1,122.48
6 $1,000.00 34.2936 $29.16 6 $27.01 $926.11 $20.00 $0.00 $20.00 $1,150.18
7 $1,000.00 34.2936 $29.16 7 $28.00 $960.06 $20.00 $0.00 $20.00 $1,179.07
8 $1,000.00 34.2936 $29.16 8 $29.02 $995.24 $20.00 $0.00 $20.00 $1,209.18
9 $1,000.00 34.2936 $29.16 9 $30.08 $1,031.72 $20.00 $0.00 $20.00 $1,240.57
10 $1,000.00 34.2936 $29.16 10 $31.19 $1,069.53 $20.00 $0.00 $20.00 $1,273.29
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11 $1,000.00 34.2936 $29.16 11 $32.33 $1,108.73 $20.00 $0.00 $20.00 $1,307.40
12 $1,000.00 34.2936 $29.16 12 $33.52 $1,149.36 $20.00 $0.00 $20.00 $1,342.97
13 $1,000.00 34.2936 $29.16 13 $34.74 $1,191.49 $20.00 $0.00 $20.00 $1,380.05
14 $1,000.00 34.2936 $29.16 14 $36.02 $1,235.16 $20.00 $2.50 $22.50 $1,416.20
15 $1,000.00 34.2936 $29.16 15 $37.34 $1,280.42 $20.00 $2.50 $22.50 $1,453.89
16 $1,000.00 34.2936 $29.16 16 $38.71 $1,327.35 $20.00 $2.50 $22.50 $1,493.18
17 $1,000.00 34.2936 $29.16 17 $40.12 $1,376.00 $20.00 $2.50 $22.50 $1,534.14
18 $1,000.00 34.2936 $29.16 18 $41.59 $1,426.43 $20.00 $2.50 $22.50 $1,576.84
19 $1,000.00 34.2936 $29.16 19 $43.12 $1,478.71 $20.00 $2.50 $22.50 $1,621.35
20 $1,000.00 34.2936 $29.16 20 $44.70 $1,532.90 $20.00 $2.50 $22.50 $1,667.76
21 $1,000.00 34.2936 $29.16 21 $46.34 $1,589.08 $20.00 $2.50 $22.50 $1,716.14
22 $1,000.00 34.2936 $29.16 22 $48.04 $1,647.32 $20.00 $2.50 $22.50 $1,766.58
23 $1,000.00 34.2936 $29.16 23 $49.80 $1,707.70 $20.00 $2.50 $22.50 $1,819.16
24 $1,000.00 34.2936 $29.16 24 $51.62 $1,770.28 $20.00 $2.50 $22.50 $1,873.97
25 $1,000.00 34.2936 $29.16 25 $53.51 $1,835.17 $20.00 $2.50 $22.50 $1,931.11
26 $1,000.00 34.2936 $29.16 26 $55.47 $1,902.42 $20.00 $2.50 $22.50 $1,990.69
27 $1,000.00 34.2936 $29.16 27 $57.51 $1,972.15 $20.00 $2.50 $22.50 $2,052.79
28 $1,000.00 34.2936 $29.16 28 $59.62 $2,044.43 $20.00 $2.50 $22.50 $2,117.53
29 $1,000.00 34.2936 $29.16 29 $61.80 $2,119.36 $20.00 $2.50 $22.50 $2,185.03
30 $1,000.00 34.2936 $29.16 30 $64.07 $2,197.03 $20.00 $2.50 $22.50 $2,255.39
31 $1,000.00 34.2936 $29.16 31 $66.41 $2,277.55 $20.00 $2.50 $22.50 $2,328.75
32 $1,000.00 34.2936 $29.16 32 $68.85 $2,361.02 $20.00 $2.50 $22.50 $2,405.22
33 $1,000.00 34.2936 $29.16 33 $71.37 $2,447.55 $20.00 $2.50 $22.50 $2,484.94
34 $1,000.00 34.2936 $29.16 34 $73.99 $2,537.26 $20.00 $2.50 $22.50 $2,568.05
35 $1,000.00 34.2936 $29.16 35 $76.70 $2,630.25 $20.00 $2.50 $22.50 $2,654.69
36 $1,000.00 34.2936 $29.16 36 $79.51 $2,726.65 $20.00 $2.50 $22.50 $2,745.02
37 $1,000.00 34.2936 $29.16 37 $82.42 $2,826.58 $20.00 $2.50 $22.50 $2,839.18
38 $1,000.00 34.2936 $29.16 38 $85.44 $2,930.17 $20.00 $2.50 $22.50 $2,937.34
39 $1,000.00 34.2936 $29.16 39 $88.58 $3,037.56 $20.00 $2.50 $22.50 $3,039.68
40 $1,000.00 34.2936 $29.16 40 $91.82 $3,148.89 $20.00 $2.50 $3,171.39 $3,146.37
In order to be conservative, we have assumed that the convertible bond price
after year 5 will not exceed parity (or the value of the underlying shares). As
such, we have used the stock price as a proxy for the convertible bond price.
Please note that we have furnished these calculations solely for informational
purposes and these involve the use of assumptions which may or may not be borne
out in the future.