EXHIBIT 4.1
===============================================================================
CHARMING SHOPPES, INC.
and
WACHOVIA BANK, NATIONAL ASSOCIATION
as
Trustee
INDENTURE
Dated as of May 28, 2002
$130,000,000 Principal Amount(1)1
4.75% SENIOR CONVERTIBLE NOTES DUE 2012
===============================================================================
(1) Plus an additional $20,000,000 issuable at the option of the Initial
Purchasers as described herein.
CROSS-REFERENCE TABLE
TIA Indenture
Section 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; 11.02
(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)............................................ N.A.
(b)(2)............................................ 7.06
(c)............................................... 7.06; 11.02
(d)............................................... 7.06
314(a).................................................. 4.02
(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; 11.02
(c)............................................... 7.01(a)
(d)............................................... 7.01(c)
(e)............................................... 6.11
316(a)(last sentence)................................... 2.09
(a)(1)(A)......................................... 6.05
(a)(1)(B)......................................... 6.04
(a)(2)............................................ N.A.
(b)............................................... 6.07
317(a)(1)............................................... 6.08
(a)(2)............................................ 6.09
(b)............................................... 2.04
318(a).................................................. 11.01
TABLE OF CONTENTS
Page
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions..................................................1
SECTION 1.02. Other Definitions............................................4
SECTION 1.03. Incorporation by Reference of Trust Indenture Act............5
SECTION 1.04. Rules of Construction........................................5
ARTICLE TWO
THE SECURITIES
SECTION 2.01. Form and Dating..............................................6
SECTION 2.02. Execution and Authentication.................................6
SECTION 2.03. Registrar, Paying Agent and Conversion Agent.................7
SECTION 2.04. Paying Agent to Hold Money in Trust..........................8
SECTION 2.05. Securityholder Lists.........................................8
SECTION 2.06. Transfer and Exchange........................................8
SECTION 2.07. Replacement Securities.......................................8
SECTION 2.08. Outstanding Securities.......................................9
SECTION 2.09. Securities Held by the Company or an Affiliate...............9
SECTION 2.10. Temporary Securities.........................................9
SECTION 2.11. Cancellation................................................10
SECTION 2.12. Defaulted Interest..........................................10
SECTION 2.13. CUSIP Numbers...............................................10
SECTION 2.14. Deposit of Moneys...........................................10
SECTION 2.15. Book-Entry Provisions for Global Securities.................10
SECTION 2.16. Special Transfer Provisions.................................12
SECTION 2.17. Restrictive Legends.........................................14
ARTICLE THREE
REDEMPTION; REPURCHASE
SECTION 3.01. Notices to Trustee..........................................15
SECTION 3.02. Selection of Securities to Be Redeemed......................15
SECTION 3.03. Notice of Redemption........................................15
SECTION 3.04. Effect of Notice of Redemption..............................16
SECTION 3.05. Deposit of Redemption Price.................................16
SECTION 3.06. Securities Redeemed in Part.................................17
SECTION 3.07. Repurchase at Option of Holder upon a Repurchase Event......17
ARTICLE FOUR
COVENANTS
SECTION 4.01. Payment of Securities.......................................21
SECTION 4.02. Maintenance of Office or Agency.............................22
SECTION 4.03. Reports to Holders..........................................22
SECTION 4.04. Compliance Certificate......................................23
SECTION 4.05. Stay, Extension and Usury Laws..............................23
SECTION 4.06. Corporate Existence.........................................23
SECTION 4.07. Notice of Default...........................................23
ARTICLE FIVE
CONSOLIDATION, MERGER AND SALE OF ASSETS
SECTION 5.01. When Company May Merge, etc.................................24
SECTION 5.02. Successor Substituted.......................................24
ARTICLE SIX
DEFAULTS AND REMEDIES
SECTION 6.01. Events of Default...........................................24
SECTION 6.02. Acceleration................................................26
SECTION 6.03. Other Remedies..............................................26
SECTION 6.04. Waiver of Past Defaults.....................................26
SECTION 6.05. Control by Majority.........................................27
SECTION 6.06. Limitation on Suits.........................................27
SECTION 6.07. Rights of Holders to Receive Payment or Convert.............27
SECTION 6.08. Collection Suit by Trustee..................................28
SECTION 6.09. Trustee May File Proofs of Claim............................28
SECTION 6.10. Priorities..................................................28
SECTION 6.11. Undertaking for Costs.......................................28
ARTICLE SEVEN
TRUSTEE
SECTION 7.01. Duties of Trustee...........................................29
SECTION 7.02. Rights of Trustee...........................................30
SECTION 7.03. Individual Rights of Trustee................................31
SECTION 7.04. Trustee's Disclaimer........................................31
SECTION 7.05. Notice of Defaults..........................................31
SECTION 7.06. Reports by Trustee to Holders...............................31
SECTION 7.07. Compensation and Indemnity..................................32
SECTION 7.08. Replacement of Trustee......................................32
SECTION 7.09. Successor Trustee by Merger, etc............................33
SECTION 7.10. Eligibility; Disqualification...............................33
SECTION 7.11. Preferential Collection of Claims Against Company...........33
ARTICLE EIGHT
SATISFACTION AND DISCHARGE; DEFEASANCE
SECTION 8.01. Termination of Company's Obligations........................34
SECTION 8.02. Application of Trust Money..................................35
SECTION 8.03. Repayment to Company........................................35
SECTION 8.04. Reinstatement...............................................35
ARTICLE NINE
AMENDMENTS
SECTION 9.01. Without Consent of Holders..................................36
SECTION 9.02. With Consent of Holders.....................................36
SECTION 9.03. Compliance with Trust Indenture Act.........................37
SECTION 9.04. Revocation and Effect of Consents...........................37
SECTION 9.05. Notation on or Exchange of Securities.......................38
SECTION 9.06. Trustee Protected...........................................38
ARTICLE TEN
CONVERSION
SECTION 10.01. Conversion Privilege; Restrictive Legends...................38
SECTION 10.02. Conversion Procedure........................................39
SECTION 10.03. Fractional Shares...........................................39
SECTION 10.04. Taxes on Conversion.........................................40
SECTION 10.05. Company to Provide Stock....................................40
SECTION 10.06. Adjustment of Conversion Price..............................40
SECTION 10.07. Effect of Reclassification, Consolidation, Merger or Sale...48
SECTION 10.08. Notice of Certain Transactions..............................49
SECTION 10.09. Company Determination Final.................................49
SECTION 10.10. Trustee's Disclaimer........................................50
ARTICLE ELEVEN
MISCELLANEOUS
SECTION 11.01. Trust Indenture Act Controls................................50
SECTION 11.02. Notices.....................................................50
SECTION 11.03. Communication by Holders with Other Holders.................51
SECTION 11.04. Certificate and Opinion as to Conditions Precedent..........51
SECTION 11.05. Statements Required in Certificate or Opinion...............52
SECTION 11.06. Rules by Trustee and Agents.................................52
SECTION 11.07. Legal Holidays..............................................52
SECTION 11.08. No Recourse Against Others..................................52
SECTION 11.09. Duplicate Originals.........................................53
SECTION 11.10. Governing Law...............................................53
SECTION 11.11. No Adverse Interpretation of Other Agreements...............53
SECTION 11.12. Successors..................................................53
SECTION 11.13. Separability................................................53
SECTION 11.14. Table of Contents, Headings, etc............................53
SIGNATURES...................................................................S-1
EXHIBITS
Exhibit A - Form of Security
Exhibit B - Form of Legends
Exhibit C - Form of Certificate to Be Delivered in Connection with
Transfers Pursuant to Regulation S
Exhibit D - Form of Notice of Transfer Pursuant to Registration Statement
Exhibit E - Form of Opinion of Counsel in Connection with Registration of
Securities
INDENTURE dated as of May 28, 2002 between CHARMING SHOPPES,
INC., a Pennsylvania corporation (the "Company"), and WACHOVIA BANK, NATIONAL
ASSOCIATION, a national banking association, as trustee (the "Trustee").
Each party agrees as follows for the benefit of the other
party and for the equal and ratable benefit of the Holders of the Company's
4.75% Senior Convertible Notes Due 2012:
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions.
"Affiliate" means any Person directly or indirectly
controlling or controlled by or under direct or indirect common control with the
Company. For this purpose, "control" shall mean the power to direct the
management and policies of a Person through the ownership of securities, by
contract or otherwise.
"Agent" means any Registrar, Paying Agent, Conversion Agent or
co-registrar.
"Board of Directors" means the Board of Directors of the
Company or any committee of the Board authorized to act for it hereunder.
"Board Resolution" means a copy of a resolution certified by
the Secretary or an Assistant Secretary of the Company to have been duly adopted
by the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Capital Stock" means any and all shares, interests,
participations or other equivalents (however designated) of capital stock of the
Company and all warrants or options to acquire such capital stock.
"Common Stock" means the common stock, par value $.10 per
share, of the Company.
"Company" means the party named as such above until a
successor replaces it pursuant to the applicable provision hereof and thereafter
means the successor.
"Company Request" or "Company Order" means a written request
or order signed on behalf of the Company by its Chairman of the Board, its
President or any Senior Vice President, Executive Vice President or Vice
President and by its Treasurer, Secretary or an Assistant Treasurer or an
Assistant Secretary, and delivered to the Trustee.
-2-
"Conversion Price" means $9.88 per share of Common Stock, as
adjusted pursuant to Article Ten.
"Corporate Trust Office of the Trustee" shall be at the
address of the Trustee specified in Section 11.02 or such other address as the
Trustee may give notice of to the Company.
"Default" means any event which is, or after notice or passage
of time or both would be, an Event of Default.
"Depositary" means The Depository Trust Company, its nominees
and successors.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Holder" means a Person in whose name a Security is registered
on the Registrar's books.
"Indenture" means this Indenture as amended or supplemented
from time to time.
"Institutional Accredited Investor" shall have the meaning
ascribed to it in Rule 501(a)(1), (2), (3) or (7) under the Securities Act of
1933.
"interest" means, with respect to any Security, interest on
the Security plus liquidated damages, if any.
"Issue Date" means (i) May 28, 2002 with respect to the
$130,000,000 aggregate principal amount of Securities issued on such date, and
(ii) with respect to any of up to $20,000,000 aggregate principal amount of
Securities that may be issued after May 28, 2002 pursuant to the option
described in Section 2.02, the respective issue date of such Securities.
"liquidated damages" has the meaning provided in the
Registration Rights Agreement.
"Maturity Date" means June 1, 2012.
"Non-U.S. Person" means a Person who is not a U.S. Person, as
defined in Regulation S under the Securities Act.
"obligations" means with respect to any indebtedness, all
obligations (whether in existence on the date hereof or arising afterwards,
absolute or contingent, direct or indirect) for or in respect of principal (when
due, upon acceleration, upon redemption, upon mandatory repayment or repurchase
pursuant to a mandatory offer to purchase, or otherwise), premium, interest,
penalties, fees, indemnification, reimbursement and other amounts payable and
liabilities with respect to such indebtedness, including, without limitation,
all interest accrued or accruing after, or which would accrue but for, the
commencement of any bankruptcy, insolvency or reorganization or similar case or
proceeding at the contract rate (including, without limitation, any contract
rate applicable upon default) specified
-3-
in the relevant documentation, whether or not the claim for such interest is
allowed as a claim in such case or proceeding.
"Officer" means the Chairman of the Board, the President, any
Senior Vice President, Executive Vice President, any Vice President, the Chief
Financial Officer, the Treasurer or the Secretary of the Company.
"Officers' Certificate" means a certificate signed, on behalf
of the Company, by two Officers or by an Officer and an Assistant Treasurer or
an Assistant Secretary of the Company.
"Opinion of Counsel" means a written opinion from legal
counsel who may be an employee of or counsel for the Company.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, limited liability company, trust,
unincorporated organization or government or other agency or political
subdivision thereof.
"principal" of a debt security means the principal of the
security, if any, on the security.
"QIB" means a "qualified institutional buyer" within the
meaning of Rule 144A under the Securities Act.
"Registration Rights Agreement" means the Registration Rights
Agreement dated as of May , 2002 by and among the Company and the Initial
Purchasers.
"Regulation S" means Regulation S under the Securities Act.
"Regulation S Global Security" means a permanent Global
Security in registered form representing the aggregate principal amount of
Securities sold in reliance on Regulation S.
"Restricted Security" means a Security that constitutes a
"Restricted Security" within the meaning of Rule 144(a)(3) under the Securities
Act; provided, however, that the Trustee shall be entitled to request and
conclusively rely on an Opinion of Counsel with respect to whether any Security
constitutes a Restricted Security.
"Rule 144A Global Security" means a permanent Global Security
in registered form representing the aggregate principal amount of Securities
sold in reliance on Rule 144A.
"SEC" means the Securities and Exchange Commission.
"Securities" means the 4.75% Senior Convertible Notes Due 2012
issued by the Company pursuant to this Indenture.
"Securities Act" means the Securities Act of 1933, as amended.
-4-
"Significant Subsidiary" shall have the meaning provided to it
in Section 1-02(w) of Regulation S-X.
"subsidiary" means (i) a corporation a majority of whose
Capital Stock with voting power, under ordinary circumstances, to elect
directors is at the time, directly or indirectly, owned by the Company, by one
or more subsidiaries of the Company or by the Company and one or more
subsidiaries thereof or (ii) any other Person (other than a corporation) in
which the Company, one or more subsidiaries thereof or the Company and one or
more subsidiaries thereof, directly or indirectly, at the date of determination
thereof, have at least majority ownership voting interest.
"Trust Indenture Act" or "TIA," subject to Section 9.03, means
the Trust Indenture Act of 1939, as in force on the date as of which this
instrument was executed; provided, however, that in the event the Trust
Indenture Act of 1939 is amended after such date, "Trust Indenture Act" or "TIA"
means, to the extent required by any such amendment, the Trust Indenture Act of
1939 as so amended.
"Trust Officer" means any officer of the Trustee assigned by
the Trustee to administer this Indenture.
"Trustee" means the party named as such in this Indenture
until a successor replaces it in accordance with the provisions hereof and
thereafter means the successor.
SECTION 1.02. Other Definitions.
Term Defined in Section
---- ------------------
"Bankruptcy Law".................................. 6.01
"Business Day".................................... 11.07
"Change in Control"............................... 3.07(l)
"Closing Price"................................... 10.06(g)
"Common Dividend Amount".......................... 10.06(e)
"Company Notice".................................. 3.07(b)
"Conversion Agent"................................ 2.03
"Current Market Price"............................ 10.06(g)
"Custodian"....................................... 6.01
"Event of Default"................................ 6.01
"fair market value"............................... 10.06(g)
"Global Security"................................. 2.01
"Initial Purchasers".............................. 2.02
"Legal Holiday"................................... 11.07
"Market Capitalization"........................... 10.06(e)
"Participants".................................... 2.15(a)
"Paying Agent".................................... 2.03
"Physical Securities"............................. 2.15(b)
"Private Placement Legend"........................ 2.17
-5-
"Record Date"..................................... 10.06(g)
"Registrar"....................................... 2.03
"Repurchase Date"................................. 3.07(a)
"Repurchase Event"................................ 3.07(l)
"Repurchase Price"................................ 3.07(a)
"Subject Securities".............................. 10.06(d)
"Trading Day"..................................... 10.06(g)
"Trigger Event"................................... 10.06(d)
"U.S. Government Obligations"..................... 8.01
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 Holder;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the
Trustee; and
"obligor" on the indenture securities means the Company.
All other terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by SEC rule under
the TIA and not otherwise defined herein have the meanings so assigned to them.
SECTION 1.04. Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the
meaning assigned to it in accordance with generally accepted accounting
principles in effect on the date hereof;
(3) "or" is not exclusive;
(4) words in the singular include the plural and in the
plural include the singular;
-6-
(5) provisions apply to successive events and
transactions; and
(6) "herein", "hereof" and other words of similar import refer
to this Indenture as a whole and not to any particular Article, Section
or other subdivision.
ARTICLE TWO
THE SECURITIES
SECTION 2.01. Form and Dating.
The Securities and the Trustee's certificate of authentication
shall be substantially in the form set forth in Exhibit A, which is incorporated
in and forms a part of this Indenture. The Securities may have notations,
legends or endorsements required by law, stock exchange rule or usage. Each
Security shall be dated the date of its authentication.
Securities offered and sold in reliance on Rule 144A,
Securities offered and sold in reliance on Regulation S and Securities
subsequently transferred to Institutional Accredited Investors shall be issued
initially in the form of one or more Global Securities, substantially in the
form set forth in Exhibit A (the "Global Securities"). The aggregate principal
amount of the Global Securities may from time to time be increased or decreased
by adjustments made on the records of the Trustee, as custodian for the
Depositary, as hereinafter provided.
SECTION 2.02. Execution and Authentication.
Two Officers shall sign the Securities for the Company by
manual or facsimile signature.
If an Officer whose signature is on a Security no longer holds
that office at the time the Security is authenticated, the Security shall
nevertheless be valid.
A Security shall not be valid until authenticated by the
manual signature of the Trustee. The signature shall be conclusive evidence that
the Security has been authenticated under this Indenture.
Upon a written order of the Company signed by two Officers or
by an Officer and an Assistant Treasurer of the Company, the Trustee shall
authenticate Securities for original issue in the principal amount of
$130,000,000 and such additional principal amounts, if any, as shall be
determined pursuant to the next sentence of this Section 2.02. Upon receipt by
the Trustee of an Officers' Certificate stating that the Initial Purchasers have
elected to purchase from the Company a specified principal amount of additional
Securities, not to exceed $20,000,000, pursuant to Section l of the Purchase
Agreement dated May 21, 2002 by and among the Company, as issuer, and ▇.▇.
▇▇▇▇▇▇ Securities Inc., Bear, ▇▇▇▇▇▇▇ & Co. Inc., First Union Securities, Inc.,
Lazard Freres & Co. LLC and McDon-
-7-
ald Investments Inc., as initial purchasers (the "Initial Purchasers"), the
Trustee shall authenticate and deliver such specified principal amount of
additional Securities to or upon the written order of the Company signed as
provided in the immediately preceding sentence. Such Officers' Certificate must
be received by the Trustee at least two full Business Days prior to the proposed
date for delivery of such additional Securities, but, in any case, not later
than June 20, 2002. The aggregate principal amount of Securities outstanding at
any time may not exceed $150,000,000 except as provided in Section 2.07.
Upon a written order of the Company signed by two Officers or
by an Officer and an Assistant Treasurer of the Company, the Trustee shall
authenticate Securities not bearing the Private Placement Legend to be issued to
the transferee when sold pursuant to an effective registration statement under
the Securities Act.
The Trustee may appoint an authenticating agent acceptable to
the Company to authenticate Securities. An authenticating agent may authenticate
Securities whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such Agent. An
authenticating agent has the same rights as an Agent to deal with the Company or
an Affiliate.
The Securities shall be issuable only in registered form
without coupons and only in denominations of $1,000 principal amount and any
integral multiple thereof. The Securities shall bear interest at the rate,
calculated and paid, as provided in the form of Security set forth in Exhibit A.
SECTION 2.03. Registrar, Paying Agent and Conversion Agent.
The Company shall maintain an office or agency where
Securities may be presented for registration of transfer or for exchange
("Registrar"), an office or agency where Securities may be presented for payment
("Paying Agent") and an office or agency where Securities may be presented for
conversion ("Conversion Agent"). The Registrar shall keep a register of the
Securities and of their transfer and exchange. The Company may appoint or change
one or more co-registrars, one or more additional paying agents and one or more
additional conversion agents without notice and may act in any such capacity on
its own behalf. The term "Registrar" includes any co-registrar; the term "Paying
Agent" includes any additional paying agent; the term "Conversion Agent"
includes any additional conversion agent.
The Company shall enter into an appropriate agency agreement
with any Agent not a party to this Indenture. The agreement shall implement the
provisions of this Indenture that relate to such Agent. The Company shall notify
the Trustee of the name and address of any Agent not a party to this Indenture.
If the Company fails to maintain a Registrar, Paying Agent or Conversion Agent,
the Trustee shall act as such.
The Company initially appoints the Trustee as Paying Agent,
Registrar and Conversion Agent.
-8-
SECTION 2.04. Paying Agent to Hold Money in Trust.
Each Paying Agent shall hold in trust for the benefit of the
Holders or the Trustee all moneys held by the Paying Agent for the payment of
principal of or interest on the Securities and shall notify the Trustee of any
default by the Company in making any such payment. While any such default
continues, the Trustee may require a Paying Agent to pay all money held by it to
the Trustee. The Company at any time may require a Paying Agent to pay all money
held by it to the Trustee. Upon payment over to the Trustee, the Paying Agent
shall have no further liability for the money. If the Company acts as Paying
Agent, it shall segregate and hold as a separate trust fund all money held by it
as Paying Agent.
SECTION 2.05. Securityholder Lists.
The Trustee shall preserve in as current a form as is
reasonably practicable the most recent list available to it of the names and
addresses of Holders. The Trustee shall make such a list available to the
Company upon request. If the Trustee is not the Registrar, the Company shall
furnish to the Trustee on or before each interest payment date and at such other
times as the Trustee may request in writing a list, in such form and as of such
date as the Trustee may reasonably require, of the names and addresses of
Holders.
SECTION 2.06. Transfer and Exchange.
Where Securities are presented to the Registrar with a request
to register their transfer or to exchange them for an equal principal amount of
Securities of other authorized denominations, the Registrar shall register the
transfer or make the exchange if its requirements for such transaction,
including the requirements under Section 2.16, are met. To permit registrations
of transfer and exchanges, the Company shall execute and the Trustee shall
authenticate Securities at the Registrar's request. The Company or the Trustee,
as the case may be, shall not be required (a) to issue or authenticate, register
the transfer of or exchange any Security during a period beginning at the
opening of business 10 Business Days before the mailing of a notice of
redemption of the Securities selected for redemption under Section 3.03 and
ending at the close of business on the day of such mailing, or (b) to register
the transfer of or exchange any Security so selected for redemption in whole or
in part, except the unredeemed portion of Securities being redeemed in part.
No service charge shall be made for any registration of
transfer, exchange or conversion of Securities, but the Company may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any transfer, registration of transfer or
exchange of Securities, other than exchanges pursuant to Sections 2.10, 3.06,
9.05 or 10.02 not involving any transfer.
SECTION 2.07. Replacement Securities.
If the Holder of a Security claims that the Security has been
mutilated, lost, destroyed or wrongfully taken, the Company shall issue and the
Trustee shall authenticate a replacement Security if the Trustee's requirements
are met and, in the case of a mutilated Secu-
-9-
rity, such mutilated Security is surrendered to the Trustee. In the case of
lost, destroyed or wrongfully taken Securities, if required by the Trustee or
the Company, an indemnity bond must be provided by the Holder that is sufficient
in the judgment of both to protect the Company, the Trustee and any Agent from
any loss that any of them may suffer if a Security is replaced. The Company or
the Trustee may charge for its expenses in replacing a Security.
In case any such mutilated, lost, destroyed or wrongfully
taken Security has become or is about to become due and payable, the Company in
its discretion may, instead of issuing a new Security, pay such Security when
due.
Every replacement Security is an additional obligation of the
Company.
SECTION 2.08. Outstanding Securities.
Securities outstanding at any time shall be all the Securities
authenticated by the Trustee except for those converted, those canceled by it,
those delivered to it for cancellation and those described in this Section as
not outstanding. A Security does not cease to be outstanding because the Company
or one of its subsidiaries or Affiliates holds the Security.
If a Security is replaced pursuant to Section 2.07, it ceases
to be outstanding unless the Trustee receives proof satisfactory to it, or a
court holds, that the replaced Security is held by a protected purchaser within
the meaning of the Uniform Commercial Code.
If the Paying Agent (other than the Company) holds on a
redemption date, Repurchase Date or the Maturity Date money sufficient to pay
Securities payable on that date, then on and after that date, such Securities
shall be deemed to be no longer outstanding and interest on them shall cease to
accrue, whether or not such Securities are surrendered.
SECTION 2.09. Securities Held by the Company or an Affiliate.
In determining whether the Holders of the required aggregate
principal amount of Securities have concurred in any direction, waiver or
consent, Securities owned by the Company or a subsidiary or an Affiliate shall
be disregarded, except that for the purposes of determining whether the Trustee
shall be protected in relying on any such direction, waiver or consent, only
Securities that a Trust Officer actually knows are so owned shall be so
disregarded.
SECTION 2.10. Temporary Securities.
Until definitive Securities are ready for delivery, the
Company may prepare and the Trustee shall authenticate temporary Securities.
Temporary Securities shall be substantially in the form of definitive Securities
but may have variations that the Company considers appropriate for temporary
Securities. Without unreasonable delay, the Company shall prepare and the
Trustee shall authenticate definitive Securities in exchange for temporary
Securities.
-10-
SECTION 2.11. Cancellation.
The Company at any time may deliver Securities to the Trustee
for cancellation. The Registrar, Paying Agent and Conversion Agent shall forward
to the Trustee any Securities surrendered to them for registration of transfer,
exchange, payment or conversion. The Trustee shall cancel all Securities
surrendered for registration of transfer, exchange, payment, conversion or
cancellation and the Trustee shall dispose of such canceled Securities in its
customary manner. The Company may not issue new Securities to replace Securities
that it has paid or delivered to the Trustee for cancellation or that any Holder
has converted pursuant to Article Ten.
SECTION 2.12. Defaulted Interest.
If and to the extent the Company defaults in a payment of
interest on the Securities, it shall pay the defaulted interest in any lawful
manner plus, to the extent not prohibited by applicable statute or case law,
interest payable on the defaulted interest. It may pay the defaulted interest to
the Persons who are Holders on a subsequent special record date. The Company
shall fix such record date and payment date. At least 15 days before a special
record date, the Company shall mail to Holders a notice that states the record
date, payment date and amount of interest to be paid.
SECTION 2.13. CUSIP Numbers.
The Company in issuing the Securities may use one or more
"CUSIP" numbers, and if so, the Trustee shall use the CUSIP numbers in notices
of redemption or exchange as a convenience to Holders; provided, however, that
no representation will thereby be deemed to be made by the Trustee as to the
correctness or accuracy of the CUSIP numbers printed in the notice or on the
Securities, and that reliance may be placed only on the other identification
numbers printed on the Securities. The Company shall promptly notify the Trustee
of any change in the CUSIP number.
SECTION 2.14. Deposit of Moneys.
Prior to 10:00 a.m., New York City time, on each interest
payment date, redemption date, Repurchase Date and the Maturity Date, the
Company shall deposit with the Paying Agent in immediately available funds money
sufficient to make cash payments, if any, due on such interest payment date,
redemption date, Repurchase Date and the Maturity Date, as the case may be, in a
timely manner which permits the Paying Agent to remit payment to the Holders on
such interest payment date, Maturity Date, redemption date and Repurchase Date,
as the case may be.
SECTION 2.15. Book-Entry Provisions for Global Securities.
(a) The Global Securities initially shall (i) be registered in
the name of the Depositary or the nominee of such Depositary, (ii) be delivered
to the Trustee as custodian for such Depositary and (iii) bear the legend for
Global Securities as set forth in Exhibit B(II).
Members of, or participants in, the Depositary
("Participants") shall have no rights under this Indenture with respect to any
Global Security held on their behalf by the Depositary, or the
-11-
Trustee as its custodian, or under the Global Securities, and the Depositary may
be treated by the Company, the Trustee and any agent of the Company or the
Trustee as the absolute owner of the Global Securities for all purposes
whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the
Company, the Trustee or any agent of the Company or the Trustee from giving
effect to any written certification, proxy or other authorization furnished by
the Depositary or impair, as between the Depositary and Participants, the
operation of customary practices governing the exercise of the rights of a
Holder of any Security.
(b) Transfers of Global Securities shall be limited to
transfers in whole, but not in part, to the Depositary, its successors or their
respective nominees. In addition, permanent certificated Securities in
registered form, substantially in the form set forth in Exhibit A (the "Physical
Securities"), shall be transferred to all beneficial owners in exchange for
their beneficial interests in Global Securities if (i) the Depositary notifies
the Company that it is unwilling or unable to continue as Depositary for any
Global Security and a successor Depositary is not appointed by the Company
within 90 days of such notice or (ii) an Event of Default has occurred and is
continuing and the Registrar has received a written request from the Depositary
to issue Physical Securities. Except as provided in this Section 2.15(b), owners
of beneficial interests in Global Securities will not be entitled to receive
Physical Securities.
(c) In connection with any issuance of Physical Securities
upon the transfer or exchange of a portion of the beneficial interest in the
Global Securities pursuant to paragraph (b) of this Section 2.15, the Registrar
shall (if one or more Physical Securities are to be issued) reflect on its books
and records the date and a decrease in the aggregate principal amount of such
Global Securities in an amount equal to the aggregate initial aggregate
principal amount of the beneficial interest in the Global Securities to be
transferred, and the Company shall execute and the Trustee shall authenticate
and deliver one or more Physical Securities of authorized denominations in an
aggregate principal amount equal to the aggregate principal amount of the
beneficial interest in the Global Securities so transferred.
(d) In connection with the transfer of the Global Securities
in their entirety to beneficial owners pursuant to paragraph (b) of this Section
2.15, such Global Securities shall be deemed to be surrendered to the Trustee
for cancellation, and the Company shall execute, and the Trustee shall upon
written instructions from the Company authenticate and deliver, to each
beneficial owner identified by the Depositary in exchange for its beneficial
interest in such Global Securities, an equal aggregate principal amount of
Physical Securities of authorized denominations.
(e) Any Physical Security constituting a Restricted Security
delivered in exchange for an interest in the Global Securities pursuant to
paragraph (b) or (c) of this Section 2.15 shall, except as otherwise provided by
Section 2.16, bear the Private Placement Legend.
(f) The Holder of the Global Securities may grant proxies and
otherwise authorize any Person, including Participants and Persons that may hold
interests through Participants, to take any action which a Holder is entitled to
take under this Indenture or the Securities.
-12-
SECTION 2.16. Special Transfer Provisions.
(a) Transfers to Non-U.S. Persons. The following provisions
shall apply with respect to the registration of any proposed transfer of a
Restricted Security to any Non-U.S. Person:
(i) the Registrar shall register the transfer of any
Restricted Security, whether or not such Security bears the Private
Placement Legend, if (x) the requested transfer is after the second
anniversary of the Issue Date for such Security; provided, however,
that the transferor shall represent to the Registrar that, to the
transferor's knowledge, neither the Company nor any Affiliate of the
Company has held any beneficial interest in such Security, or portion
thereof, at any time on or prior to the second anniversary of the Issue
Date for such Security or (y) in the case of a transfer to a Non-U.S.
Person, the proposed transferee has delivered to the Registrar a
certificate substantially in the form of Exhibit C hereto;
(ii) if the proposed transferee is a Participant and the
Securities to be transferred consist of Physical Securities that after
transfer are to be evidenced by an interest in the Global Securities,
upon receipt by the Registrar of (x) written instructions given in
accordance with the Depositary's and the Registrar's procedures and (y)
the appropriate certificate, if any, required by clause (y) of
paragraph (i) above, the Registrar shall register the transfer and
reflect on its books and records the date and an increase in the
aggregate principal amount of the Global Securities in an amount equal
to the aggregate principal amount of Physical Securities to be
transferred, and the Trustee shall cancel the Physical Securities so
transferred; and
(iii) if the proposed transferor is a Participant seeking to
transfer an interest in the Rule 144A Global Security, upon receipt by
the Registrar of (x) written instructions given in accordance with the
Depositary's and the Registrar's procedures and (y) the appropriate
certificate, if any, required by clause (y) of paragraph (i) above, the
Registrar shall register the transfer and reflect on its books and
records the date and (A) a decrease in the aggregate principal amount
of the Rule 144A Global Security in an amount equal to the aggregate
principal amount of the Securities to be transferred and (B) an
increase in the aggregate principal amount of the Regulation S Global
Security, in an amount equal to the aggregate principal amount of the
Securities to be transferred.
(b) Transfers to QIBs. The following provisions shall apply
with respect to the registration of any proposed transfer of a Restricted
Security to a QIB:
(i) the Registrar shall register the transfer of any
Restricted Security, whether or not such Security bears the Private
Placement Legend, if (x) the requested transfer is after the second
anniversary of the Issue Date for such Security; provided, however,
that the transferor shall represent to the Registrar that, to the
transferor's knowledge, neither the Company nor any Affiliate of the
Company has held any beneficial interest in such Security, or portion
thereof, at any time on or prior to the second anniversary of the Issue
Date for such Security or (y) such transfer is being made by a proposed
transferor who has checked the box provided for on the form of Security
stating, or has otherwise advised the Company and the Registrar in
-13-
writing, that the sale has been made in compliance with the provisions
of Rule 144A to a transferee who has signed the certification provided
for on the form of Security stating, or has otherwise advised the
Company and the Registrar in writing, that it is purchasing the
Security for its own account or an account with respect to which it
exercises sole investment discretion and that it and any such account
is a QIB within the meaning of Rule 144A, and is aware that the sale to
it is being made in reliance on Rule 144A and acknowledges that it has
received such information regarding the Company as it has requested
pursuant to Rule 144A or has determined not to request such information
and that it is aware that the transferor is relying upon its foregoing
representations in order to claim the exemption from registration
provided by Rule 144A;
(ii) if the proposed transferee is a Participant and the
Securities to be transferred consist of Physical Securities which after
transfer are to be evidenced by an interest in the Global Securities,
upon receipt by the Registrar of written instructions given in
accordance with the Depositary's and Registrar's procedures, the
Registrar shall register the transfer and reflect on its books and
records the date and an increase in the principal amount of the Global
Securities in an amount equal to the principal amount of Physical
Securities to be transferred, and the Trustee shall cancel the Physical
Security so transferred; and
(iii) if the proposed transferor is a Participant seeking to
transfer an interest in the Regulation S Global Security upon receipt
by the Registrar of written instructions given in accordance with the
Depositary's and the Registrar's procedures, the Registrar shall
register the transfer and reflect on its books and records the date and
(A) a decrease in the aggregate principal amount of the Regulation S
Global Security in an amount equal to the aggregate principal amount of
the Securities to be transferred and (B) an increase in the aggregate
principal amount of the Rule 144A Global Security in an amount equal to
the aggregate principal amount of the Securities to be transferred.
(c) Restrictions on Transfer and Exchange of Global
Securities. Notwithstanding any other provisions of this Indenture, the Global
Securities may not be transferred as a whole except by the Depositary to a
nominee of the Depositary or by a nominee of the Depositary to the Depositary or
another nominee of the Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary.
(d) Private Placement Legend. Upon the registration of
transfer, exchange or replacement of Securities not bearing the Private
Placement Legend, the Registrar or co-Registrar shall deliver Securities that do
not bear the Private Placement Legend. Upon the registration of transfer,
exchange or replacement of Securities bearing the Private Placement Legend, the
Registrar or co-Registrar shall deliver only Securities that bear the Private
Placement Legend unless (i) the requested transfer is after the second
anniversary of the Issue Date for such Security (provided, however, that neither
the Company nor any Affiliate of the Company has held any beneficial interest in
such Security, or portion thereof, at any time prior to or on the second
anniversary of the Issue Date for such Security), (ii) there is delivered to the
Trustee an Opinion of Counsel reasonably satisfactory to the Company to the
effect that neither such legend nor the related restrictions on transfer are
required in
-14-
order to maintain compliance with the provisions of the Securities Act or (iii)
such Security has been sold pursuant to an effective registration statement
under the Securities Act and the Holder selling such Securities has delivered to
the Registrar or co-Registrar a notice in substantially the form of Exhibit D
hereto. Upon the effectiveness of the Shelf Registration Statement (as defined
in the Registration Rights Agreement) the Company shall deliver to the Trustee a
notice of effectiveness, a Security or Securities, an authentication order in
accordance with Section 2.02 and an Opinion of Counsel in substantially the form
of Exhibit E hereto and, if required by the Depositary, the Company shall
deliver to the Depositary a letter of representations in a form reasonably
acceptable to the Depositary.
(e) General. By its acceptance of any Security bearing the
Private Placement Legend, each Holder of such a Security acknowledges the
restrictions on transfer of such Security set forth in this Indenture and in the
Private Placement Legend and agrees that it will transfer such Security only as
provided in this Indenture.
The Registrar shall retain, in accordance with its customary
procedures, copies of all letters, notices and other written communications
received pursuant to Section 2.15 or this Section 2.16. The Company shall have
the right to inspect and make copies of all such letters, notices or other
written communications at any reasonable time upon the giving of reasonable
notice to the Registrar.
(f) Transfers of Securities Held by Affiliates. Any
certificate (i) evidencing a Security that has been transferred to an Affiliate
of the Company within two years after the Issue Date for such Security, as
evidenced by a notation on the Assignment Form for such transfer or in the
representation letter delivered in respect thereof or (ii) evidencing a Security
that has been acquired from an Affiliate (other than by an Affiliate) in a
transaction or a chain of transactions not involving any public offering, shall,
until two years after the last date on which either the Company or any Affiliate
of the Company was an owner of such Security, in each case, bear the Private
Placement Legend, unless otherwise agreed by the Company (with written notice
thereof to the Trustee).
SECTION 2.17. Restrictive Legends.
-------------------
Each Global Security and Physical Security that constitutes a
Restricted Security shall bear the private placement legend (the "Private
Placement Legend") as set forth in Exhibit B(I) on the face thereof until after
the second anniversary of the later of the Issue Date for such Securities and
the last date on which the Company or any Affiliate of the Company was the owner
of such Security (or any predecessor security) (or such shorter period of time
as permitted by Rule 144(k) under the Securities Act or any successor provision
thereunder) (or such longer period of time as may be required under the
Securities Act or applicable state securities laws in the opinion of counsel for
the Company, unless otherwise agreed by the Company and the Holder thereof).
-15-
ARTICLE THREE
REDEMPTION; REPURCHASE
SECTION 3.01. Notices to Trustee.
If the Company wants to redeem Securities pursuant to
paragraph 6 of the Securities, it shall notify the Trustee at least 40 days
prior to the redemption date (unless a shorter notice period shall be
satisfactory to the Trustee) of the redemption date and the aggregate principal
amount of Securities to be redeemed. If the Company wants to credit against any
such redemption Securities it has not previously delivered to the Trustee for
cancellation (other than Securities repurchased pursuant to Section 3.07), it
shall deliver the Securities with the notice.
SECTION 3.02. Selection of Securities to Be Redeemed.
If less than all the outstanding Securities are to be
redeemed, the Trustee shall select the Securities to be redeemed on either a pro
rata basis or by lot or such other method as the Trustee shall deem fair and
appropriate. The Trustee shall make the selection from Securities outstanding
not previously called for redemption. The Trustee may select for redemption
portions of the principal of Securities that have denominations larger than
$1,000 principal amount. Securities and portions of them it selects shall be in
amounts of $1,000 principal amount or integral multiples of $1,000 principal
amount. Provisions of this Indenture that apply to Securities called for
redemption also apply to portions of Securities called for redemption.
The Registrar need not register the transfer of or exchange
any Securities selected for redemption. Also, the Registrar need not transfer or
exchange any Securities for a period of 10 Business Days before selecting
Securities to be redeemed.
SECTION 3.03. Notice of Redemption.
At least 20 days but not more than 60 days before a redemption
date, the Company shall mail by first-class mail or cause to be mailed a notice
of redemption to each Holder whose Securities are to be redeemed.
The notice shall identify the Securities and the aggregate
principal amount thereof to be redeemed and shall state:
(1) the redemption date;
(2) the redemption price, plus the amount of accrued and
unpaid interest to be paid on the Securities called for redemption;
(3) the then current conversion rate;
-16-
(4) the name and address of the Paying Agent and
Conversion Agent;
(5) the date on which the right to convert the principal of
the Securities called for redemption will terminate and the place or
places where such Securities may be surrendered for conversion;
(6) that Holders who want to convert Securities must
satisfy the requirements in Article Ten;
(7) that Securities called for redemption must be
surrendered to the Paying Agent to collect the redemption price;
(8) that interest on Securities called for redemption
ceases to accrue on and after the redemption date; and
(9) the CUSIP number of the Securities.
The date on which the right to convert the principal of the
Securities called for redemption will terminate shall be at the close of
business on the date prior to the redemption date, or, if the day before the
redemption date is a Legal Holiday, the close of business on the next preceding
day which is not a Legal Holiday.
At the Company's request (which request shall be furnished to
the Trustee at least 40 days prior to the redemption date (unless a shorter
period shall be acceptable to the Trustee)), the Trustee shall give the notice
of redemption in the Company's name and at the Company's expense; provided that
the form and content of such notice shall be prepared by the Company.
SECTION 3.04. Effect of Notice of Redemption.
Once notice of redemption is mailed, Securities called for
redemption become due and payable on the redemption date at the applicable
redemption price plus accrued and unpaid interest to, but excluding, the date of
redemption, and, on and after such date (unless the Company shall default in the
payment of the redemption price), such Securities shall cease to bear interest.
Upon surrender to the Paying Agent, such Securities shall be paid at the
redemption price plus accrued interest to the redemption date, unless the
redemption date is an interest payment date, in which case the accrued interest
will be paid as provided in the Securities.
SECTION 3.05. Deposit of Redemption Price.
On or before the redemption date, the Company shall deposit
with the Paying Agent pursuant to Section 2.14 money in funds immediately
available on the redemption date sufficient to pay the redemption price of and
accrued interest on all Securities to be redeemed on that date. The Paying Agent
shall return to the Company, as soon as practicable, any money not required for
that purpose because of conversion of Securities.
-17-
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 for the Holder a new
Security equal in principal amount to the unredeemed portion of the Security
surrendered.
If a portion of a Holder's Securities is selected for partial
redemption and that Holder converts a portion of that Holder's Securities, the
converted portion shall be deemed (as far as may be) to be the portion selected
for redemption.
SECTION 3.07. Repurchase at Option of Holder upon a Repurchase Event.
(a) If there shall occur a Repurchase Event, then each Holder
shall have the right, at such Holder's option, to require the Company to
repurchase all of such Holder's Securities, or any portion thereof (in principal
amounts of $1,000 or integral multiples thereof), on the date (the "Repurchase
Date") that is forty-five (45) Business Days after the date of the Company
Notice (as defined below). Such repurchase shall be made in cash at a price
equal to 100% of the principal amount of Securities such Holder elects to
require the Company to repurchase, together with accrued interest, if any, to
but excluding the Repurchase Date (the "Repurchase Price") (or, at the option of
the Company, by delivery of Common Stock in accordance with the provisions of
Section 3.07(k)); provided, however, that if such Repurchase Date is an interest
payment date, then the interest payable on such date shall be paid to the holder
of record of the Security on the preceding record date for the payment of
interest. No Securities may be repurchased at the option of Holders upon a
Repurchase Event if there has occurred and is continuing an Event of Default,
other than a default in the payment of the Repurchase Price with respect to such
Securities on the Repurchase Date.
(b) Unless the Company shall have theretofore called for
redemption all of the outstanding Securities, on or before the tenth (10th)
Business Day after the Company becomes aware of the occurrence of a Repurchase
Event, the Company or, at the written request of the Company, the Trustee, shall
mail to all holders of record of the Securities a notice (the "Company Notice")
in the form prepared by the Company of the occurrence of the Repurchase Event
and of the repurchase right set forth herein arising as a result thereof. The
Company shall also deliver a copy of such Company Notice to the Trustee. The
Company Notice shall contain the following information:
(1) the Repurchase Date;
(2) the date by which the repurchase right must be
exercised;
(3) the last date by which the election to require
repurchase, if submitted, must be revoked;
(4) the Repurchase Price and whether the Repurchase Price
shall be payable in cash or Common Stock and, if payable in Common
Stock, the method of calculating the
-18-
amount of the Common Stock to be delivered upon the repurchase as
provided in Section 3.07(k);
(5) a description of the procedure that a Holder must
follow to exercise a repurchase right;
(6) the Conversion Price then in effect and a statement that
the right to convert the principal amount of the Securities to be
repurchased will terminate when and if the Holder exercises its
repurchase right unless and until it withdraws such election; and
(7) the CUSIP numbers of the Securities.
No failure of the Company to give the foregoing notices or
defect therein shall limit any Holder's right to exercise a repurchase right or
affect the validity of the proceedings for the repurchase of Securities.
If any of the foregoing provisions are inconsistent with
applicable law, such law shall govern.
(c) To exercise a repurchase right, a Holder shall deliver to
the Trustee on or before the 30th Business Day after the date of the Company
Notice preceding the Repurchase Date (i) written notice to the Company (or agent
designated by the Company for such purpose) of the Holder's exercise of such
right, which notice shall set forth the name of the Holder, the principal amount
of the Securities to be repurchased, a statement that an election to exercise
the repurchase right is being made thereby and, in the event that the Repurchase
Price shall be paid in shares of Common Stock, the name or names (with
addresses) in which the certificate or certificates for shares of Common Stock
shall be issued, and (ii) the Securities with respect to which the repurchase
right is being exercised, duly endorsed for transfer to the Company. Election of
repurchase by a Holder shall be revocable at any time prior to, but excluding,
the Repurchase Date, by delivering written notice to that effect to the Trustee
prior to the close of business on the Business Day prior to the Repurchase Date.
(d) If the Company fails to repurchase on the Repurchase Date
any Securities (or portions thereof) as to which the repurchase right has been
properly exercised, then the principal of such Securities shall, until paid,
bear interest to the extent permitted by applicable law from the Repurchase Date
at the rate borne by the Securities and each such Security shall be convertible
into Common Stock in accordance with this Indenture until the principal of such
Security shall have been paid or duly provided for.
(e) Any Security that is to be repurchased only in part shall
be surrendered to the Trustee duly endorsed for transfer to the Company and
accompanied by appropriate evidence of genuineness and authority satisfactory to
the Company and the Trustee duly executed by the Holder thereof (or his 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, containing identical terms and conditions,
of any authorized denomination as requested by
-19-
such Holder in aggregate principal amount equal to and in exchange for the
unrepurchased portion of the principal of the Security so surrendered.
(f) On or prior to the Repurchase Date, the Company shall
deposit with the Trustee or with a Paying Agent, pursuant to Section 2.14, the
Repurchase Price in cash for payment to the Holder on the Repurchase Date;
provided that if payment is to be made in cash and such cash payment is made on
the Repurchase Date it must be received by the Trustee or paying agent, as the
case may be, by 10:00 a.m., New York City time, on such date; provided, further,
that if the Repurchase Price is to be paid in shares of Common Stock, such
shares of Common Stock are to be paid as promptly after the Repurchase Date as
practicable.
(g) Any issuance of shares of Common Stock in respect of the
Repurchase Price shall be deemed to have been effected immediately prior to the
close of business on the Repurchase Date and the Person or Persons in whose name
or names any certificate or certificates for shares of Common Stock shall be
issuable upon such repurchase shall be deemed to have become on the Repurchase
Date the holder or holders of record of the shares represented thereby;
provided, however, that any surrender for repurchase on a date when the stock
transfer books of the Company shall be closed shall constitute the Person or
Persons in whose name or names the certificate or certificates for such shares
are to be issued as the record holder or holders thereof for all purposes at the
opening of business on the next succeeding day on which such stock transfer
books are open. No payment or adjustment shall be made for dividends or
distributions on any Common Stock issued upon repurchase of any Security
declared prior to the Repurchase Date.
(h) No fractions of shares shall be issued upon repurchase of
Securities. If more than one Security shall be repurchased from the same Holder
and the Repurchase Price shall be payable in shares of Common Stock, the number
of full shares which shall be issuable upon such repurchase shall be computed on
the basis of the aggregate principal amount of the Securities so repurchased.
Instead of any fractional share of Common Stock otherwise issuable on the
repurchase of any Security or Securities, the Company will deliver to the
applicable Holder its check for the current market value of such fractional
share. The current market value of a fraction of a share is determined by
multiplying the current market price of a full share by the fraction, and
rounding the result to the nearest cent. For purposes of this Section, the
current market price of a share of Common Stock is the Closing Price of the
Common Stock on the Trading Day immediately preceding the Repurchase Date.
(i) Any issuance and delivery of certificates for shares of
Common Stock on repurchase of Securities shall be made without charge to the
Holder of Securities being repurchased for such certificates or for any tax or
duty in respect of the issuance or delivery of such certificates or the
securities represented thereby; provided, however, that the Company shall not be
required to pay any tax or duty which may be payable in respect of (i) income of
the Holder or (ii) any transfer involved in the issuance or delivery of
certificates for shares of Common Stock in a name other than that of the Holder
of the Securities being repurchased, and no such issuance or delivery shall be
made unless and until the Person requesting such issuance or delivery has paid
to the Company the amount of any such tax or duty or has established, to the
satisfaction of the Company, that such tax or duty has been paid.
-20-
(j) All Securities delivered for repurchase shall be delivered
to the Trustee to be canceled in accordance with the provisions of Section 2.11.
(k) The Company may elect to pay the Repurchase Price by
delivery of shares of Common Stock if and only if the following conditions shall
have been satisfied on or prior to the Repurchase Date:
(i) the shares of Common Stock deliverable in payment of the
Repurchase Price shall have a fair market value as of the Repurchase
Date of not less than the Repurchase Price. For purposes of this
Section 3.07, the fair market value of shares of Common Stock shall be
determined by the Company and shall be equal to 95% of the average of
the Closing Prices of the Common Stock for the five consecutive Trading
Days immediately preceding and including the third Trading Day prior to
the Repurchase Date;
(ii) such shares have been registered under the Securities Act
or are freely transferable without such registration;
(iii) the issuance of such Common Stock does not require
registration with or approval of any governmental authority under any
state law or any other federal law, which registration or approval has
not been made or obtained;
(iv) such shares have been approved for quotation on the Nasdaq
National Market or listing on a national securities exchange; and
(v) such shares will be issued out of the Company's authorized
but unissued stock and, upon issuance, will be duly and validly and
fully paid and non-assessable and free of any preemptive rights.
(l) For purposes of this Section 3.07:
(i) the term "beneficial owner" shall be determined in
accordance with Rule 13d-3 and 13d-5, as in effect on the date of the
original execution of this Indenture, promulgated by the SEC pursuant
to the Exchange Act;
(ii) the term "Person" or "group" shall include any syndicate
or group which would be deemed to be a "person" under Section 11(d) and
14(d) of the Exchange Act as in effect on the date of this Indenture;
(iii) the term "Repurchase Event" means a Change in Control
defined as follows:
A "Change in Control" shall be deemed to have
occurred when (i) any "person" or "group" is or becomes the
"beneficial owner" of shares representing more than 50% of the
combined voting power of the then outstanding securities
entitled to vote generally in elections of directors of the
Company (the "Voting Stock"); (ii) there shall occur the
liquidation or dissolution or adoption of a plan of
liquidation
-21-
or dissolution of the Company other than in a transaction
which complies with Section 5.01; (iii) the Company
consolidates with or merges into any other Person or any
other Person merges into the Company and, as a result, the
outstanding Common Stock of the Company is changed or
exchanged into or for other assets or securities, unless the
shareholders of the Company immediately before such
transaction own, directly or indirectly, immediately
following such transaction, more than 50% of the combined
voting power of the outstanding Voting Stock of the Person
resulting from such transaction or the transferee Person or
unless such transaction is effected solely to change the
Company's jurisdiction of incorporation; or (iv) the Company
conveys, transfers or leases all or substantially all of its
assets to any Person other than its subsidiaries, unless the
shareholders of the Company immediately before such
transaction own, directly or indirectly, immediately
following such transaction, more than 50% of the combined
voting power of the outstanding Voting Stock of the Person
resulting from such transaction or the transferee Person;
provided that a Change in Control shall not be deemed to
have occurred if either (x) the Closing Price of the Common
Stock for any five (5) Trading Days (1) in the case of a
Change in Control described in clause (i) above, during the
ten (10) consecutive Trading Days immediately after the
later of the Change in Control or the public announcement of
the Change in Control or (2) in the case of a Change of
Control described in clause (ii) or (iii) above, during the
ten (10) Trading Days immediately preceding the Change in
Control, in each such case, is at least equal to 105% of the
Conversion Price in effect on the date on which the Change
in Control occurs or (y) in the case of a merger or
consolidation otherwise constituting a Change in Control, at
least 90% of the consideration (excluding cash payments for
fractional shares) in such merger or consolidation
constituting the Change in Control consists of common stock
traded on a United States national securities exchange or
quoted on the Nasdaq National Market (or which will be so
traded or quoted when issued or exchanged in connection with
such Change in Control) and as a result of such transaction
or transactions the Securities become convertible solely
into such common stock (and cash in lieu of fractional
shares).
ARTICLE FOUR
COVENANTS
SECTION 4.01. Payment of Securities.
The Company shall pay the principal amount, premium, if any,
of and any accrued and unpaid interest on the Securities on the dates and in the
manner provided in the Securities. The principal, premium, if any, and any
accrued and unpaid interest thereon shall be considered paid on the date due if
the Paying Agent holds (or, if the Company is acting as Paying Agent, if the
Company has segregated and holds in trust in accordance with Section 2.04) on
that date money sufficient to pay the principal, premium, if any, and any
accrued and unpaid interest thereon.
-22-
The Company shall pay interest on any overdue principal at the
rate borne by the Securities. The Company shall pay interest on overdue
installments of interest at the same rate to the extent not prohibited by
applicable law.
SECTION 4.02. Maintenance of Office or Agency.
The Company will maintain in the Borough of Manhattan, The
City of New York, an office or agency where Securities may be surrendered for
registration of transfer or exchange or conversion and where notices and demands
to or upon the Company in respect of the Securities and this Indenture may be
served. The Company will give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust
Office of the Trustee.
The Company may also from time to time designate one or more
other offices or agencies where the Securities may be presented or surrendered
for any or all such purposes and may from time to time rescind such
designations; provided, however, that no such designation or rescission shall in
any manner relieve the Company of its obligation to maintain an office or agency
in the Borough of Manhattan, The City of New York for such purposes. The Company
will give prompt written notice to the Trustee of any such designation or
rescission and of any change in the location of any such other office or agency.
The Company hereby designates the Corporate Trust Office of
the Trustee as an agency of the Company in accordance with Section 2.03.
The Company also shall comply with the provisions of TIA ss.
314(a).
SECTION 4.03. Reports to Holders.
(a) The Company (at its own expense) will deliver to the
Trustee within 15 days after the filing of the same with the SEC, copies of the
quarterly and annual reports and of the information, documents and other
reports, if any, the Company is required to file with the SEC pursuant to
Section 13 or 15(d) of the Exchange Act.
(b) Notwithstanding that the Company may not be subject to the
reporting requirements of Section 13 or 15(d) of the Exchange Act, the Company
will promptly provide the information required by Rule 144A(d)(4) to any Holder
that so requests.
(c) In addition, if and when this Indenture becomes subject to
the TIA, the Company will file a copy of all such information with the SEC for
public availability (unless the Commission will not accept such a filing) and
make such information available to investors who request it in writing. The
Company will also comply with the other provisions of TIA ss. 314(a).
-23-
Delivery of such reports, information and documents to the
Trustee is for informational purposes only and the Trustee's receipt of such
shall not constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
SECTION 4.04. Compliance Certificate.
The Company shall deliver to the Trustee within 120 days after
the end of each fiscal year of the Company an Officers' Certificate stating
whether or not the signers know of any Default or Event of Default by the
Company in performing any of its obligations under this Indenture or the
Securities. If they do know of any such Default or Event of Default, the
certificate shall describe the Default or Event of Default and its status.
SECTION 4.05. Stay, Extension and Usury Laws.
The Company covenants (to the extent that it may lawfully do
so) that it will not at any time insist upon, plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay, extension or usury law
wherever enacted, now or at any time hereafter in force, which may affect the
covenants or the performance of this Indenture; and the Company (to the extent
that it may lawfully do so) hereby expressly waives all benefit or advantage of
any such law, and covenants that it will not, by resort to any such law, hinder,
delay or impede the execution of any power herein granted to the Trustee, but
will suffer and permit the execution of every such power as though no such law
has been enacted.
SECTION 4.06. Corporate Existence.
Subject to Article Five, the Company will do or cause to be
done all things necessary to preserve and keep in full force and effect its
corporate existence and the corporate existence of each subsidiary in accordance
with the respective organizational documents of each subsidiary and the rights
(charter and statutory), licenses and franchises of the Company and its
subsidiaries; provided, however, that the Company shall not be required to
preserve any such right, license or franchise, or the corporate existence of any
subsidiary, if in the judgment of the Company, (i) such preservation or
existence is not material to the conduct of business of the Company and (ii) the
loss of such right, license or franchise or the dissolution of such subsidiary
does not have a material adverse impact on the Holders.
SECTION 4.07. Notice of Default.
In the event that any Default under Section 6.01 hereof shall
occur the Company will give prompt written notice of such Default to the
Trustee.
-24-
ARTICLE FIVE
CONSOLIDATION, MERGER AND SALE OF ASSETS
SECTION 5.01. When Company May Merge, etc.
The Company shall not consolidate with or merge into, or
transfer or lease all or substantially all of its assets to, another Person
unless such other Person is a corporation, limited liability company,
partnership, trust or other business entity organized under the laws of the
United States, any State thereof or the District of Columbia and such Person
assumes by supplemental indenture all the obligations of the Company under the
Securities, this Indenture and the Registration Rights Agreement, and
immediately after giving effect to the transaction, no Default or Event of
Default has occurred and is continuing.
The Company shall deliver to the Trustee prior to the
consummation of the proposed transaction an Officers' Certificate to the
foregoing effect and an Opinion of Counsel stating that the proposed transaction
and such supplemental indenture will, upon consummation of the proposed
transaction, comply with this Indenture.
SECTION 5.02. Successor Substituted.
Upon any consolidation or merger or transfer or lease of all
or substantially all of the assets of the Company in accordance with Section
5.01, the successor Person formed by such consolidation or into which the
Company is merged or to which such transfer or lease is made shall succeed to,
and be substituted for, and may exercise every right and power of, and shall
assume every duty and obligation of, the Company under this Indenture with the
same effect as if such successor corporation had been named as the Company
herein. When the successor corporation assumes all obligations of the Company
hereunder, all obligations of the predecessor corporation shall terminate.
ARTICLE SIX
DEFAULTS AND REMEDIES
SECTION 6.01. Events of Default.
An "Event of Default" occurs if:
(1) the Company fails to pay the principal of or any
premium on the Securities when due;
(2) the Company fails to pay any interest on the
Securities when due, if such failure continues for 30 days;
-25-
(3) the Company fails to perform any other covenant in
this Indenture for the period after the notice specified in the last
paragraph of this Section 6.01;
(4) any indebtedness under any bonds, debentures, notes or
other evidences of indebtedness for money borrowed, or any guarantee
thereof, by the Company or any of its Significant Subsidiaries, in an
aggregate principal amount in excess of $50 million is not paid when
due either at its stated maturity or upon acceleration thereof, and
such indebtedness is not discharged, or such acceleration is not
rescinded or annulled within a period of 30 days after notice as
provided below; or
(5) the Company pursuant to or within the meaning of any
Bankruptcy Law:
(A) commences a voluntary case,
(B) consents to the entry of an order for relief
against it in an involuntary case,
(C) consents to the appointment of a Custodian
of it or for all or substantially all of its property, or
(D) makes a general assignment for the benefit
of its creditors; or
(6) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(A) is for relief against the Company in an
involuntary case,
(B) appoints a Custodian of the Company for all
or substantially all of its property, or
(C) orders the liquidation of the Company,
and the order or decree remains unstayed and in effect for 90
consecutive days.
The term "Bankruptcy Law" means Title 11, U.S. Code or any
similar Federal or State law for the relief of debtors. The term "Custodian"
means any receiver trustee, assignee, liquidator or similar official under any
Bankruptcy Law.
A default under clause (3) and clause (4) is not an Event of
Default until the Holders of at least 25% in aggregate principal amount of the
Securities then outstanding notify the Company and the Trustee of the default
and, in the case of clause (3), the Company does not cure the default within 90
days after receipt of the notice of such default. The notice must specify the
default, demand that it be remedied and state that the notice is a "Notice of
Default." If the Holders of 25% in aggregate principal amount of the outstanding
Securities request the Trustee to give such notice on their behalf, the Trustee
shall do so. When a default is cured, it ceases.
-26-
SECTION 6.02. Acceleration.
If an Event of Default (other than an Event of Default
specified in Section 6.01(5) or (6)) occurs and is continuing, the Trustee by
notice to the Company, or the Holders of at least 25% in principal amount of the
Securities then outstanding by notice to the Company and the Trustee, may
declare the principal amount of the Securities including any accrued and unpaid
interest on the Securities due and payable. If an Event of Default under clause
Section 6.01(5) or (6) occurs, the principal amount of all the Securities will
automatically become due and payable without any declaration or other act on the
part of the Trustee or any Holder.
After a declaration of acceleration, but before a judgment or
decree of the money due in respect of the Securities has been obtained, the
Holders of not less than a majority in aggregate principal amount of the
Securities then outstanding by written notice to the Trustee may rescind an
acceleration and its consequences if (i) all existing Events of Default (other
than the nonpayment of principal of and interest on the Securities which has
become due solely by virtue of such acceleration) have been cured or waived,
(ii) the rescission would not conflict with any judgment or decree and (iii) the
Company shall have paid all amounts due pursuant to Section 7.07.
SECTION 6.03. Other Remedies.
Notwithstanding any other provision of this Indenture, if an
Event of Default occurs and is continuing, the Trustee may pursue any available
remedy by proceeding at law or in equity to collect the payment of the principal
of, premium, if any, and interest on the Securities or to enforce the
performance of any provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not
possess any of the Securities or does not produce any of them in the proceeding.
A delay or omission by the Trustee or any Holder in exercising any right or
remedy accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies are
cumulative.
SECTION 6.04. Waiver of Past Defaults.
Subject to Sections 6.02, 6.07 and 9.02, the Holders of a
majority in aggregate principal amount of the Securities then outstanding by
notice to the Trustee may waive any past Default or Event of Default and its
consequences, except a Default or Event of Default in the payment of the
principal of or interest on any Security, a failure by the Company to convert
any Securities into Common Stock or any Default or Event of Default in respect
of any provision of this Indenture or the Securities that, under Section 9.02,
cannot be modified or amended without the consent of the Holder of each Security
directly affected. When a Default or an Event of Default is waived, it is cured
and ceases.
-27-
SECTION 6.05. Control by Majority.
The Holders of a majority in aggregate principal amount of the
Securities then outstanding may direct the time, method and place of conducting
any proceeding for any remedy available to the Trustee or exercising any trust
or power conferred on it. However, the Trustee may refuse to follow any
direction that conflicts with law or this Indenture, is unduly prejudicial to
the rights of other Holders or would involve the Trustee in personal liability;
provided that the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction.
SECTION 6.06. Limitation on Suits.
Except as provided in Section 6.07, a Holder may pursue a
remedy with respect to this Indenture or the Securities only if:
(1) the Holder gives to the Trustee written notice of a
continuing Event of Default;
(2) the Holders of at least 25% in aggregate principal
amount of the Securities then outstanding make a written request to the
Trustee to pursue the remedy;
(3) such Holder or Holders offer to the Trustee indemnity
satisfactory to the Trustee against any loss, liability or expense;
(4) the Trustee does not comply with the request within
60 days after receipt of the request and the offer of indemnity; and
(5) during such 60-day period the Holders of a majority in
aggregate principal amount of the Securities then outstanding do not
give the Trustee a direction inconsistent with the request.
A Holder may not use this Indenture to prejudice the rights of
another Holder or to obtain a preference or priority over another Holder.
SECTION 6.07. Rights of Holders to Receive Payment or Convert.
Notwithstanding any other provision of this Indenture, (i) the
right of any Holder to receive payment of the principal of and interest on the
Security, on or after the respective due dates expressed in the Security, or to
bring suit for the enforcement of any such payment on or after such respective
dates, shall not be impaired or affected without the consent of the Holder and
(ii) the right of any Holder to bring suit for the enforcement of the right to
convert the Security shall not be impaired or affected without the consent of
the Holder.
-28-
SECTION 6.08. Collection Suit by Trustee.
If an Event of Default specified in Section 6.01(l) or (2)
occurs and is continuing, the Trustee may recover judgment in its own name and
as trustee of an express trust against the Company for the whole amount of
principal and interest remaining unpaid and amounts due to the Trustee under
Section 7.07.
SECTION 6.09. Trustee May File Proofs of Claim.
The Trustee may file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee, any predecessor Trustee and the Holders allowed in any judicial
proceedings relative to the Company, its creditors or its property.
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, 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 principal, premium, if any, and interest, ratably,
without preference or priority of any kind, according to the amounts
due and payable on the Securities for principal, premium, if any, and
interest, respectively, and
Third: to the Company.
The Trustee, upon prior written notice to the Company, may fix
a record date and payment date for any payment by it to Holders pursuant to this
Section 6.10.
SECTION 6.11. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under
this Indenture or in any suit against the Trustee for any action taken or
omitted by it as Trustee, a court in its discretion may require the filing by
any party litigant in the suit other than the Trustee of an undertaking to pay
the costs of the suit, and the court in its discretion may assess reasonable
costs, including reasonable attorneys' fees 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 shall not apply
to a suit by the Trustee, a suit by a Holder or group of Holders of more than
10% in aggregate principal amount of the outstanding Securities, or to any suit
instituted by any Holder for the enforcement or the
-29-
payment of the principal or interest on any Securities on or after the
respective due dates for such Securities.
ARTICLE SEVEN
TRUSTEE
SECTION 7.01. Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their exercise, as a
prudent person would exercise or use under the circumstances in the conduct of
his or her own affairs.
(b) Prior to the occurrence of an Event of Default:
(1) the Trustee need perform only those duties that are
specifically set forth in this Indenture and no others shall be
inferred or implied; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements of
this Indenture, but in the case of any such certificates or opinions
which by any provision hereof are specifically required to be furnished
to the Trustee, the Trustee shall examine the certificates and opinions
to determine whether or not they conform to the requirements of this
Indenture (but need not confirm or investigate the accuracy of any
mathematical calculations or other facts stated therein).
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(1) this paragraph does not limit the effect of paragraph
(b) of this Section 7.01;
(2) the Trustee shall not be liable for any error of judgment
made in good faith by a Trust Officer, unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action
it takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05.
(d) The Trustee may refuse to perform any duty or exercise any
right or power unless it receives indemnity satisfactory to it against any loss,
liability or expense.
-30-
received by it except as the Trustee may agree from time to time in writing with
the Company. The Trustee may pay interest to the Company on amounts held by it
prior to payment to Holders. Money held in trust by the Trustee need not be
segregated from other funds except to the extent required by law.
SECTION 7.02. Rights of Trustee.
(a) The Trustee may conclusively rely on any document believed
by it to be genuine and to have been signed or presented by the proper person.
The Trustee need not investigate any fact or matter stated in the document; if,
however, the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and premises
of the Company, personally or by agent or attorney at the expense of the Company
and shall incur no liability or additional liability of any kind by reason of
such inquiry or investigation.
(b) Before the Trustee acts or refrains from acting, it may
require an Officers' Certificate and/or an Opinion of Counsel. The Trustee shall
not be liable for any action it takes or omits to take in good faith in reliance
on such Officers' Certificate or Opinion of Counsel.
(c) Any request or direction of the Company mentioned herein
shall be sufficiently evidenced by a Company Request or Company Order and any
resolution of the Board of Directors shall be sufficiently evidenced by a Board
Resolution.
(d) The Trustee may consult with counsel of its own selection
and the advice of such counsel or any Opinion of Counsel shall be full and
complete authorization and protection in respect of any action taken, suffered
or omitted by it hereunder in good faith and in reliance thereon.
(e) The Trustee may act through agents or attorneys and shall
not be responsible for the misconduct or negligence of any agent or attorney
appointed with due care.
(f) The Trustee shall not be liable for any action it takes or
omits to take in good faith which it believes to be authorized or within its
discretion, rights or powers hereunder.
(g) 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 may, in absence
of bad faith on its part, rely upon an Officers' Certificate.
(h) The Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request or
direction of any of the Holders, unless such Holders shall have offered to the
Trustee reasonable security or indemnity satisfactory to it against costs,
expenses and liabilities that might be incurred by it in compliance with such
request or direction.
(i) The Trustee shall not be charged with knowledge of any
Default or Event of Default with respect to the Securities unless either (1) a
Trust Officer shall have actual knowledge of such Default or Event of Default or
(2) written notice of such Default or Event of Default shall have been given to
the Trustee by the Company or by any Holder.
-31-
(j) No provision of this Indenture shall require the Trustee
to expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder, or in the exercise of any of its
rights or powers.
(k) The rights, privileges, protections, immunities and
benefits given to the Trustee, including, without limitation, its right to be
indemnified, are extended to, and shall be enforceable by, the Trustee in each
of its capacities hereunder, and each agent, custodian and other Person employed
to act hereunder.
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 an
Affiliate thereof with the same rights it would have if it were not Trustee. Any
Agent may do the same with like rights. The Trustee, however, must comply with
Sections 7.10 and 7.11.
SECTION 7.04. Trustee's Disclaimer.
The Trustee makes no representation as to the validity or
adequacy of this Indenture or the Securities; it shall not be accountable for
the Company's use of the proceeds from the Securities; and it shall not be
responsible for any statement in the Securities other than its certificate of
authentication.
SECTION 7.05. Notice of Defaults.
If a Default or Event of Default occurs and is continuing and
if it is actually known to a Trust Officer of the Trustee, the Trustee shall
mail to each Holder a notice of the Default or Event of Default within 60 days
after it occurs unless such Default or Event of Default has been cured or
waived; provided that except in the case of a Default or Event of Default in
payment of the principal of, premium, if any, and interest on any Security, the
Trustee may withhold the notice if and so long as it in good faith determines
that withholding the notice is in the interests of Holders.
SECTION 7.06. Reports by Trustee to Holders.
Within 60 days after each May 1 beginning with May 1, 2003,
the Trustee shall mail to each Holder, to the extent required by TIA ss. 313(c),
a brief report dated as of such reporting date that complies with TIA ss.
313(a). In such event, the Trustee also shall comply with TIA ss. 313(b).
A copy of each report at the time of its mailing to Holders
shall be mailed to the Company and filed by the Trustee with the SEC and each
stock exchange, if any, on which the Securities are listed. The Company shall
promptly notify the Trustee when the Securities are listed on any stock exchange
or delisted therefrom.
-32-
SECTION 7.07. Compensation and Indemnity.
The Company shall pay to the Trustee from time to time such
compensation for its services as shall be agreed upon in writing from time to
time. The Trustee's compensation shall not be limited by any law on compensation
of a trustee of an express trust. The Company shall reimburse the Trustee upon
request for all reasonable out-of-pocket expenses incurred by it. Such expenses
shall include the reasonable compensation and out-of-pocket expenses of the
Trustee's agents and counsel.
The Company shall fully indemnify the Trustee against any and
all loss, claim, damage or liability or expense (including the reasonable fees
and expenses of counsel) incurred by it in connection with the acceptance or
administration of this trust and the performance of its duties hereunder,
including the costs and expenses of defending itself against any claim or
liability in connection with the exercise or performance of any of its powers
and duties hereunder. The Company need not pay for any settlement made without
its consent. The Trustee shall notify the Company promptly of any claim for
which it may seek indemnification. The Company need not reimburse any expense or
indemnify against any loss or liability determined by a court of competent
jurisdiction to have been caused by the Trustee's own negligence or bad faith.
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 the
principal of, premium, if any, and interest on particular Securities.
The indemnity obligations of the Company with respect to the
Trustee provided for in this Section 7.07 shall survive any resignation or
removal of the Trustee and the termination of this Indenture.
When the Trustee incurs expenses or renders services after an
Event of Default specified in Section 6.01(5) or (6) occurs, the expenses and
the compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law, to the extent permitted by law.
SECTION 7.08. Replacement of Trustee.
A resignation or removal of the Trustee and appointment of a
successor Trustee shall become effective only upon the successor Trustee's
acceptance of appointment as provided in this Section 7.08.
The Trustee may resign by so notifying the Company in writing
30 days prior to such resignation. The Holders of a majority in aggregate
principal amount of the Securities then outstanding may remove the Trustee by so
notifying the Trustee and the Company in writing and may appoint a successor
Trustee with the Company's consent. The Company may remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged a bankrupt or an insolvent;
-33-
(3) a receiver or other public officer takes charge of
the Trustee or its property; or
(4) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in
the office of Trustee for any reason, the Company shall promptly appoint a
successor Trustee. Within one year after the successor Trustee takes office, the
Holders of a majority in aggregate principal amount of the Securities then
outstanding may appoint a successor Trustee to replace the successor Trustee
appointed by the Company.
If a successor Trustee does not take office within 30 days
after the retiring Trustee resigns or is removed, the retiring Trustee, the
Company or the Holders of at least 10% in aggregate principal amount of the
outstanding Securities may petition at the expense of the company any court of
competent jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any Holder
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Holders. The retiring Trustee shall upon payment of all amounts
due it hereunder promptly transfer all property held by it as Trustee to the
successor Trustee, subject to the lien provided for in Section 7.07.
SECTION 7.09. Successor Trustee by Merger, etc.
If the Trustee consolidates with, merges or converts into, or
transfers all or substantially all of its corporate trust business to, another
corporation, the successor corporation without any further act shall be the
successor Trustee, if such successor corporation is otherwise eligible
hereunder.
SECTION 7.10. Eligibility; Disqualification.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA ss. 310(a)(1). The Trustee shall always have a combined
capital and surplus of at least $50,000,000 as set forth in its most recent
published annual report of condition. The Trustee shall comply with TIA ss.
310(b).
SECTION 7.11. Preferential Collection of Claims Against Company.
The Trustee shall comply with TIA ss. 311(a), excluding any
creditor relationship listed in TIA ss. 311(b). A Trustee who has resigned or
been removed shall be subject to TIA ss. 311(a) to the extent indicated.
-34-
ARTICLE EIGHT
SATISFACTION AND DISCHARGE; DEFEASANCE
SECTION 8.01. Termination of Company's Obligations.
The Company may terminate all of its obligations, except for
those set forth below, in respect of the Securities if (i) the Company delivers
to the Trustee for cancellation all of the Securities theretofore authenticated
(other than any Securities that have been destroyed, lost or stolen and in lieu
of or in substitution for which other Securities have been authenticated and
delivered) and not theretofore canceled (the "Outstanding Securities") or (ii)
(a) all of the Outstanding Securities mature or will be called for redemption
within one (1) year under arrangements satisfactory to the Trustee for giving
notice of redemption and (b) the Company deposits with the Trustee, in trust,
amounts sufficient to pay all of the principal of, premium, if any, interest and
liquidated damages due to the stated maturity date or redemption date of all
Outstanding Securities.
In addition to the foregoing, the Company may terminate its
obligations under Sections 3.07, 4.03 and 4.06 (other than with respect to the
corporate existence of the Company), and no Default or Event of Default under
Section 6.01(3) or (4) shall thereafter apply, by (i) depositing with the
Trustee, under the terms of an irrevocable trust agreement, money or direct
non-callable obligations of the United States of America for the payment of
which the full faith and credit of the United States is pledged ("U. S.
Government Obligations") sufficient (without reinvestment), in the opinion of a
nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, to pay the principal of,
premium, if any, and interest on the Securities at maturity or an earlier
redemption, (ii) delivering to the Trustee either an Opinion of Counsel or a
ruling obtained by the Company from or published by the Internal Revenue Service
to the effect that the Holders of the Securities will not recognize income, gain
or loss for federal income tax purposes as a result of such deposit and
termination of obligations and (iii) delivering to the Trustee an Officers'
Certificate and an Opinion of Counsel each stating compliance with all
conditions precedent provided for herein.
In addition, the Company may, provided that no Default or
Event of Default has occurred and is continuing or would arise therefrom (or,
with respect to a Default or Event of Default specified in Section 6.01(5),
occurs at any time on or prior to the 91st calendar day after the date of such
deposit (it being understood that this condition shall not be deemed satisfied
until after such 91st day)), terminate all of its obligations, except for those
set forth below, in respect of the Securities (including its obligations to pay
the principal of, premium, if any, and interest on the Securities) by (i)
depositing with the Trustee, under the terms of an irrevocable trust agreement,
money or United States Government Obligations sufficient (without reinvestment)
to pay the principal of, premium, if any, and interest on the Securities at
maturity or on earlier redemption, (ii) delivering to the Trustee either a
ruling obtained by the Company from or published by the Internal Revenue Service
to the effect that the Holders of the Securities will not recognize income, gain
or loss for federal income tax purposes as a result of such deposit and
termination of obligations or an Opinion of Counsel addressed to the
-35-
Trustee based upon such a ruling or based on a change in the applicable Federal
tax law since the date of this Indenture to such effect and (iii) delivering to
the Trustee an Officers' Certificate and an Opinion of Counsel each stating
compliance with all conditions precedent provided for herein.
Notwithstanding the foregoing three paragraphs, the Company's
obligations in Article Ten and Sections 2.02, 2.03, 2.04, 2.05, 2.06, 2.07,
2.10, 2.11, 2.12 (but not with respect to termination of obligations pursuant to
the foregoing paragraph), 2.13 and 4.01 (but not with respect to termination of
obligations pursuant to the foregoing paragraph), 4.02, 7.07, 7.08, 8.03 and
8.04 shall survive until the Securities are no longer outstanding. Thereafter
the Company's obligations in Sections 7.07, 8.03 and 8.04 shall survive such
satisfaction and discharge.
After such delivery or irrevocable deposit and delivery of an
Officers' Certificate and Opinion of Counsel, the Trustee upon request shall
acknowledge in writing the discharge of the Company's obligations under the
Securities and this Indenture except for those surviving obligations specified
above.
The Company shall pay and indemnify the Trustee against any
tax, fee or other charge imposed on or assessed against the United States
Government Obligations deposited pursuant to this Section 8.01 or the principal
and interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of outstanding Securities.
SECTION 8.02. Application of Trust Money.
Subject to the provisions of Section 8.03, the Trustee shall
hold in trust money or U.S. Government Obligations deposited with it pursuant to
Section 8.01. It shall apply the deposited money and the money from U.S.
Government obligations through the Paying Agent and in accordance with this
Indenture to the payment of the principal of, premium, if any, and interest on
the Securities.
SECTION 8.03. Repayment to Company.
The Trustee and the Paying Agent shall promptly pay to the
Company upon request any excess money or securities held by them at any time.
The Trustee and the Paying Agent shall pay to the Company upon request any money
held by them for the payment of the principal of, premium, if any, and interest
that remains unclaimed for two years; provided, however, that the Trustee or
such Paying Agent, before being required to make any such repayment, may, at the
expense of the Company, cause to be mailed to each Holder, notice stating that
such money remains and that, after a date specified therein, which shall not be
less than 30 days from the date of such mailing, any unclaimed balance of such
money then remaining will be repaid to the Company. After payment to the
Company, Holders entitled to the money must look to the Company for payment as
general creditors unless an applicable abandoned property law designates another
Person.
SECTION 8.04. Reinstatement.
If the Trustee or Paying Agent is unable to apply any money or
U.S. Government Obligations in accordance with Section 8.01 by reason of any
legal proceeding or by reason of any order
-36-
or judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, the Company's obligations under this
Indenture and the Securities shall be revived and reinstated as though no
deposit had occurred pursuant to Section 8.01 until such time as the Trustee or
Paying Agent is permitted to apply all such money or U.S. Government Obligations
in accordance with Section 8.01; provided, however, that to the extent the
Company makes any payment of the principal of, premium, if any, and interest on
any Securities because of the reinstatement of its obligations, the Company
shall be subrogated to the rights of the Holders of such Securities to receive
such payment from the money or U.S. Government Obligations held by the Trustee
or Paying Agent.
ARTICLE NINE
AMENDMENTS
SECTION 9.01. Without Consent of Holders.
The Company, when authorized by a Board Resolution, may
modify, amend or supplement this Indenture or the Securities without notice to
or the consent of any Holder:
(1) to comply with the provisions of the TIA:
(2) to cure any ambiguity, omission, defect or
inconsistency;
(3) to appoint a successor Trustee;
(4) to comply with Sections 5.01 and 10.07;
(5) to provide for uncertificated Securities in addition
to certificated Securities; or
(6) to make any change that does not adversely affect the
rights of any Holder.
SECTION 9.02. With Consent of Holders.
The Company, when authorized by a Board Resolution, may
modify, amend or supplement this Indenture or the Securities without notice to
any Holder but with the written consent of the Holders of at least a majority in
aggregate principal amount of the outstanding Securities. Subject to Section
6.07, the Holders of a majority in aggregate principal amount of the outstanding
Securities may waive compliance by the Company with any provision of this
Indenture or the Securities without notice to any other Holder. However, without
the consent of each Holder directly affected thereby, an amendment, supplement
or waiver, including a waiver pursuant to Section 6.04, may not:
(1) change the stated maturity of the Securities;
(2) reduce the principal, premium, if any, or interest on
the Securities;
-37-
(3) change the place of payment from New York, New York
or change the currency in which the Securities are payable;
(4) waive a default in the payment of the principal of,
premium, if any, or interest on any Security;
(5) make any change in Section 6.04, Section 6.07 or this
Section 9.02;
(6) modify the ranking of the Securities in a materially
adverse manner to the Holders; or
(7) make any change that adversely affects the right to
convert any Security.
It shall not be necessary for the consent of the Holders under
this Section 9.02 to approve the particular form of any proposed amendment or
supplement, but it shall be sufficient if such consent approves the substance
thereof.
Promptly after an amendment under this Section 9.02 becomes
effective, the Company (or the Trustee on behalf of the Company) shall mail to
Holders a notice briefly describing the amendment.
SECTION 9.03. Compliance with Trust Indenture Act.
Every amendment, waiver or supplement to this Indenture or the
Securities shall comply with the TIA as then in effect.
SECTION 9.04. Revocation and Effect of Consents.
Until an amendment, supplement or waiver becomes effective, a
consent to it by a Holder is a continuing consent by that Holder and every
subsequent Holder of a Security or portion of a Security that evidences the same
debt as the consenting Holder's Security, even if notation of the consent is not
made on any Security. However, any such Holder or subsequent Holder may revoke
the consent as to its Security or portion of a Security if the Trustee receives
the notice of revocation before the date the amendment, supplement or waiver
becomes effective. An amendment, supplement or waiver becomes effective in
accordance with its terms and thereafter binds every Holder.
After an amendment, supplement or waiver becomes effective
with respect to the Securities, it shall bind every Holder unless it makes a
change described in any of clauses (1) through (7) of Section 9.02. In that case
the amendment, supplement or waiver shall bind each Holder of a Security who has
consented to it and, provided that notice of such amendment, supplement or
waiver is reflected on a Security that evidences the same debt as the consenting
Holder's Security, every subsequent Holder of a Security or portion of a
Security that evidences the same debt as the consenting Holder's Security.
-38-
SECTION 9.05. Notation on or Exchange of Securities.
If an amendment, supplement or waiver changes the terms of a
Security, the Trustee may require the Holder of the Security to deliver, and the
Holder shall deliver, it to the Trustee. The Trustee may place an appropriate
notation on the Security as directed and prepared by the Company about the
changed terms and return it to the Holder. Alternatively, if the Company so
determines, the Company in exchange for the Security shall issue and the Trustee
shall authenticate a new Security that reflects the changed terms.
SECTION 9.06. Trustee Protected.
The Trustee may, but shall not be obligated to, sign any
amendment, supplement or waiver authorized pursuant to this Article that affects
the Trustee's rights, duties or obligations. The Trustee shall be entitled to
receive and may conclusively rely upon, in addition to the documents required by
Section 11.04, an Opinion of Counsel and an Officers' Certificate that any
supplemental indenture, modification, amendment or waiver complies with the
Indenture.
ARTICLE TEN
CONVERSION
SECTION 10.01. Conversion Privilege; Restrictive Legends.
A Holder of a Security may convert the principal of such
Security into Common Stock at any time during the period stated in paragraph 9
of the Securities. The number of shares issuable upon conversion of a Security
is determined as follows: divide each $1,000 of the principal amount to be
converted by the Conversion Price in effect on the conversion date and round the
result to the nearest 1/100th of a share. The Conversion Price is subject to
adjustment in accordance with Section 10.06.
A Holder may convert a portion of the principal of such
Security if the portion is $1,000 principal amount or an integral multiple of
$1,000 principal amount. Provisions of this Indenture that apply to conversion
of all of a Security also apply to conversion of a portion of it.
Any shares issued upon conversion of a Security shall bear the
Private Placement Legend set forth in Exhibit B(I) until after the second
anniversary of the later of the Issue Date for such Security and the last date
on which the Company or any Affiliate of the Company was the owner of such
shares or the Security (or any predecessor security) from which such shares were
converted (or such shorter period of time as permitted by Rule 144(k) under the
Securities Act or any successor provision thereunder or such longer period of
time as may be required under the Securities Act or applicable state securities
laws unless otherwise agreed by the Company and the Holder thereof).
-39-
SECTION 10.02. Conversion Procedure.
To convert a Security a Holder must satisfy the requirements
in paragraph 9 of the Securities. The date on which the Holder satisfies all
those requirements is the conversion date. As soon as practicable, the Company
shall deliver to the Holder through the Conversion Agent a certificate for the
number of full shares of Common Stock issuable upon the conversion and a check
in lieu of any fractional share. The Person in whose name the certificate is
registered shall be treated as a shareholder of record on and after the
conversion date.
Except as described below, no payment or adjustment will be
made for accrued interest on, or liquidated damages with respect to, a converted
Security or for dividends on any Common Stock issued on conversion. If any
Security is converted during the period from but excluding, a record date for
the payment of interest to, but excluding, the next succeeding interest payment
date, unless such Security has been called for redemption on a redemption date
between such dates, such Security must be accompanied by funds equal to the
interest payable to the registered Holder on such interest payment date on the
principal amount so converted. A Security converted on an interest payment date
need not be accompanied by any payment, and the interest on the principal amount
of the Security being converted will be paid on such interest payment date to
the registered Holder of such Security on the applicable record date.
If a Holder converts more than one Security at the same time,
the number of full shares issuable upon the conversion shall be based on the
total principal amount of the Securities converted.
Upon surrender of a Security that is converted in part the
Trustee shall authenticate for the Holder a new Security equal in principal
amount to the unconverted portion of the Security surrendered.
If the last day on which a Security may be converted is a
Legal Holiday in a place where a Conversion Agent is located, the Security may
be surrendered to that Conversion Agent on the next succeeding day that is not a
Legal Holiday.
SECTION 10.03. Fractional Shares.
The Company will not issue fractional shares of Common Stock
upon conversion of Securities and instead will deliver a cash adjustment in lieu
of the fractional share based upon the current market value of the Common Stock.
The current market value of a fraction of a share is determined by multiplying
the current market price of a full share by the fraction, and rounding the
result to the nearest cent. For purposes of this Section, the current market
price of a share of Common Stock is the Closing Price of the Common Stock on the
Trading Day immediately preceding the conversion date.
-40-
SECTION 10.04. Taxes on Conversion.
If a Holder converts its Security, the Company shall pay any
documentary, stamp or similar issue or transfer tax due on the issue of shares
of Common Stock upon the conversion. However, the Holder shall pay any such tax
which is due because the shares are issued in a name other than the Holder's
name.
SECTION 10.05. Company to Provide Stock.
The Company shall reserve out of its authorized but unissued
Common Stock or its Common Stock held in treasury enough shares of Common Stock
to permit the conversion of all of the Securities, including such greater number
of shares of Common Stock into which such Securities shall be convertible into
as a result of a Conversion Price adjustment contemplated by Section 10.06
hereof.
All shares of Common Stock which may be issued upon conversion
of the Securities shall be validly issued, fully paid and non-assessable.
The Company will endeavor to comply with all securities laws
regulating the offer and delivery of shares of Common Stock upon conversion of
Securities and will endeavor to list such shares on each national securities
exchange on which the Common Stock is listed.
SECTION 10.06. Adjustment of Conversion Price.
The Conversion Price shall be adjusted from time to time by
the Company as follows:
(a) In case the Company shall hereafter pay a dividend or make
a distribution to all holders of the outstanding Common Stock in shares
of Common Stock, the Conversion Price in effect at the opening of
business on the date following the Record Date with respect to
shareholders entitled to receive such dividend or other distribution
shall be reduced by multiplying such Conversion Price by a fraction of
which the numerator shall be the number of shares of Common Stock
outstanding at the close of business on the Record Date fixed for such
determination and the denominator shall be the sum of such number of
shares and the total number of shares constituting such dividend or
other distribution, such reduction to become effective immediately
after the opening of business on the day following the Record Date. If
any dividend or distribution of the type described in this Section
10.06(a) is declared but not so paid or made, the Conversion Price
shall again be adjusted to the Conversion Price which would then be in
effect if such dividend or distribution had not been declared.
(b) In case the Company shall issue rights or warrants to all
holders of its outstanding shares of Common Stock entitling them to
subscribe for or purchase shares of Common Stock at a price per share
less than the Current Market Price on the Record Date fixed for the
determination of shareholders entitled to receive such rights or
warrants, the Conversion Price shall be adjusted so that the same shall
equal the price determined by multiplying the Conversion Price in
effect at the opening of business on the date after such Record Date by
a fraction of which the numerator shall be the number of shares of
Common Stock outstanding at the close
-41-
of business on the Record Date plus the number of shares which the
aggregate offering price of the total number of shares so offered for
subscription or purchase would purchase at such Current Market Price,
and of which the denominator shall be the number of shares of Common
Stock outstanding on the close of business on the Record Date plus the
total number of additional shares of Common Stock so offered for
subscription or purchase. Such adjustment shall become effective
immediately after the opening of business on the day following the
Record Date fixed for determination of shareholders entitled to
receive such rights or warrants. To the extent that shares of Common
Stock are not delivered pursuant to such rights or warrants, upon the
expiration or termination of such rights or warrants the Conversion
Price shall be readjusted to the Conversion Price that would then be
in effect had the adjustments made upon the issuance of such rights or
warrants been made on the basis of delivery of only the number of
shares of Common Stock actually delivered. In the event that such
rights or warrants are not so issued, the Conversion Price shall again
be adjusted to be the Conversion Price that would then be in effect if
such date fixed for the determination of shareholders entitled to
receive such rights or warrants had not been fixed. In determining
whether any rights or warrants entitle the holders to subscribe for or
purchase shares of Common Stock at less than such Current Market
Price, and in determining the aggregate offering price of such shares
of Common Stock, there shall be taken into account any consideration
received for such rights or warrants, the value of such consideration,
if other than cash, to be determined in good faith by the Board of
Directors.
(c) In case the outstanding shares of Common Stock shall be
split or subdivided into a greater number of shares of Common Stock,
the Conversion Price in effect at the opening of business on the day
following the day upon which such subdivision becomes effective shall
be proportionately reduced, and conversely, in case outstanding shares
of Common Stock shall be combined into a smaller number of shares of
Common Stock, the Conversion Price in effect at the opening of business
on the day following the day upon which such combination becomes
effective shall be proportionately increased, such reduction or
increase, as the case may be, to become effective immediately after the
opening of business on the day following the day upon which such
subdivision or combination becomes effective.
(d) In case the Company shall, by dividend or otherwise,
distribute to all holders of its Common Stock shares of any class of
Capital Stock of the Company (other than any dividends or distributions
to which Section 10.06(a) applies) or evidences of its indebtedness,
cash or other assets (including securities, but excluding (1) any
rights or warrants referred to in Section 10.06(b), (2) dividends and
distributions paid exclusively in cash and (3) any Capital Stock,
evidences of indebtedness, cash or assets distributed upon a merger or
consolidation to which Section 10.07 applies) (the foregoing
hereinafter in this Section 10.06(d) called the "Subject Securities"),
unless the Company elects to reserve such Subject Securities for
distribution to the Holders upon conversion of the Securities so that
any such Holder converting Securities will receive upon such
conversion, in addition to the shares of Common Stock to which such
Holder is entitled, the amount and kind of such Subject Securities
which such Holder would have received if such Holder had converted its
Securities into Common Stock immediately prior to the Record Date for
such distribution of the Subject Securities,
-42-
then, in each such case, the Conversion Price shall be reduced so
that, as of the Record Date for such distribution of Subject
Securities, the same shall be equal to the price determined by
multiplying the Conversion Price in effect immediately prior to the
close of business on the Record Date with respect to such distribution
by a fraction of which the numerator shall be the Current Market Price
on such date less the fair market value on such date of the portion of
the Subject Securities so distributed applicable to one share of
Common Stock and the denominator shall be such Current Market Price,
such reduction to become effective immediately prior to the opening of
business on the day following the Record Date; provided, however, that
in the event the then fair market value of the portion of the Subject
Securities so distributed applicable to one share of Common Stock is
equal to or greater than the Current Market Price on the Record Date,
then in lieu of the foregoing adjustment, adequate provision shall be
made so that each Holder shall have the right to receive upon
conversion of a Security (or any portion thereof) the amount of
Subject Securities such Holder would have received had such Holder
converted such Security (or portion thereof) immediately prior to such
Record Date. In the event that such dividend or distribution is not so
paid or made, the Conversion Price shall again be adjusted to be the
Conversion Price which would then be in effect if such dividend or
distribution had not been declared.
For purposes of this Section 10.06(d), rights or warrants
distributed by the Company to all holders of Common Stock entitling the
holders thereof to subscribe for or purchase shares of the Company's
Capital Stock (either initially or under certain circumstances) that
are (i) deemed to be transferred with such shares of Common Stock; (ii)
not exercisable; and (iii) issued in respect of future issuances of
Common Stock, until the occurrence of a specified event or events
("Trigger Event") shall be deemed not to have been distributed and no
adjustment to the Conversion Price with respect thereto shall be made
until the occurrence of the earliest Trigger Event. If any such right
or warrant is subject to subsequent events, upon the occurrence of
which such right or warrant shall become exercisable to purchase
different securities, evidences of indebtedness or other assets or
entitle the holder to purchase a different number or amount of the
foregoing or to purchase any of the foregoing at a different purchase
price, then the occurrence of each such event shall be deemed to be the
date of issuance and record date with respect to a new right or warrant
(and a termination or expiration of the existing right or warrant
without exercise by the holder thereof). In addition, in the event of
any distribution (or deemed distribution) of rights or warrants, or any
Trigger Event or other event (of the type described in the preceding
sentence) with respect thereto, that resulted in an adjustment to the
Conversion Price under this Section 10.06(d), (1) in the case of any
such rights or warrants which shall all have been redeemed or
repurchased without exercise by any holders thereof, the Conversion
Price shall be readjusted upon such final redemption or repurchase to
give effect to such distribution or Trigger Event, as the case may be,
as though it were a cash distribution, equal to the per share
redemption or repurchase price received by a holder of Common Stock
with respect to such rights or warrants (assuming such holder had
retained such rights or warrants), made to all holders of Common Stock
as of the date of such redemption or repurchase, and (2) in the case of
such rights or warrants all of which shall have expired or been
terminated without exercise, the Conversion Price shall be readjusted
as if such rights and warrants had never been issued.
-43-
For purposes of this Section 10.06(d) and Sections 10.06(a)
and (b), any dividend or distribution to which this Section 10.06(d) is
otherwise applicable that also includes shares of Common Stock, or
rights or warrants to subscribe for or purchase shares of Common Stock
applies (or both), shall be deemed instead to be (1) a dividend or
distribution of the evidences of indebtedness, assets, shares of
Capital Stock, rights or warrants (other than such shares of Common
Stock or rights or warrants) (and any Conversion Price reduction
required by this Section 10.06(d) with respect to such dividend or
distribution shall then be made) immediately followed by (2) a dividend
or distribution of such shares of Common Stock or such rights or
warrants (and any further Conversion Price reduction required by
Sections 10.06(a) and (b) with respect to such dividend or distribution
shall then be made), except (A) the Record Date of such dividend or
distribution shall be substituted as "the date fixed for the
determination of shareholders entitled to receive such dividend or
other distribution", "Record Date fixed for such determination" and
"Record Date" within the meaning of Section 10.06(a) and as "the date
fixed for the determination of shareholders entitled to receive such
rights or warrants", "the Record Date fixed for the determination of
the shareholders entitled to receive such rights or warrants" and "such
Record Date" within the meaning of Section 10.06(b) and (B) any shares
of Common Stock included in such dividend or distribution shall not be
deemed "outstanding at the close of business on the Record Date fixed
for such determination" within the meaning of Section 10.06(a).
With respect to any shareholder rights plan existing on the
date hereof or in the event that the Company implements any other
shareholder rights plan, upon conversion of the Securities the Holders
will receive, in addition to the Common Stock issuable upon such
conversion, the rights issued under such rights plan (notwithstanding
the occurrence of an event causing such rights to separate from the
Common Stock at or prior to the time of conversion); provided, a Holder
who is a holder of Common Stock (or direct or indirect interests
therein) at the time of conversion, but who is not entitled as such a
holder to such rights pursuant to the terms of any such plan, shall not
be eligible to receive any such rights hereunder. Any distribution of
rights or warrants pursuant to a shareholder rights plan complying with
the requirements set forth in the immediately preceding sentence of
this paragraph shall not constitute a distribution of rights or
warrants for the purposes of the other provisions of Section 10.06(b)
or this Section 10.06(d).
(e) In case the Company shall, by dividend or otherwise,
distribute to all holders of its Common Stock cash (excluding any cash
that is distributed upon a merger or consolidation to which Section
10.07 applies or as part of a distribution referred to in Section
10.06(d)), in an aggregate amount that, combined together with (1) the
aggregate amount of all other such all-cash distributions to all
holders of its Common Stock within the twelve (12) months preceding the
date of payment of such distribution, and in respect of which no
adjustment has been made, and (2) the aggregate of any cash plus the
fair market value of consideration payable in respect of any tender
offer by the Company or any subsidiary for all or any portion of the
Common Stock concluded within the twelve (12) months preceding the date
of payment of such distribution, and in respect of which no adjustment
has been made (such aggregate amount, the "Common Dividend Amount"),
exceeds 15% of the product of the Current Mar-
-44-
ket Price on the Record Date with respect to such distribution times
the number of shares of Common Stock outstanding on such date (the
"Market Capitalization"), then, and in each such case, immediately
after the close of business on such date, the Conversion Price shall
be reduced so that the same shall equal the price determined by
multiplying the Conversion Price in effect immediately prior to the
close of business on the Record Date for such cash dividend or
distribution by a fraction (i) the numerator of which shall be equal
to the Current Market Price on the Record Date less an amount equal to
the quotient of (x) the amount by which the Common Dividend Amount
exceeds 15% of the Market Capitalization and (y) the number of shares
of Common Stock outstanding on the Record Date and (ii) the
denominator of which shall be equal to the Current Market Price on
such date; provided, however, that in the event the portion of the
cash so distributed applicable to one share of Common Stock is equal
to or greater than the Current Market Price of the Common Stock on the
Record Date, in lieu of the foregoing adjustment, adequate provision
shall be made so that each Holder shall have the right to receive upon
conversion of a Security (or any portion thereof) the amount of cash
such Holder would have received had such holder converted such
Security (or portion thereof) immediately prior to such Record Date.
In the event that such dividend or distribution is not so paid or
made, the Conversion Price shall again be adjusted to be the
Conversion Price which would then be in effect if such dividend or
distribution had not been declared.
(f) In case a tender offer made by the Company or any
subsidiary for all or any portion of the Common Stock shall expire and
such tender offer shall require the payment to holders of Common Stock
of an aggregate consideration that together with
(1) the aggregate of the cash plus the fair market
value of consideration payable in respect of any other tender
offers by the Company or any of its subsidiaries for all or
any portion of the Common Stock expiring within the twelve
(12) months preceding the expiration of such tender offer and
in respect of which no adjustment has been made, and
(2) the aggregate amount of any all-cash
distributions to all holders of the Company's Common Stock
made within twelve (12) months preceding the expiration of
such tender offer and in respect of which no adjustment has
been made,
exceeds 15% of the product of the Current Market Price as of the time
of expiration of such tender offer times the number of shares of Common
Stock outstanding at such time, then, and in each such case,
immediately prior to the opening of business on the day after the
expiration of such tender offer, 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 close of business
on the date of the expiration of such tender offer by a fraction of
which the numerator shall be the number of shares of Common Stock
outstanding on the date of expiration of the tender offer multiplied by
the Current Market Price of the Common Stock on the Trading Day next
succeeding the date of expiration of the tender offer and the
denominator shall be the sum of (x) the fair market value of the
aggregate consideration payable for all shares of Common Stock validly
tendered and not withdrawn as of the date of expiration of the tender
-45-
offer and (y) the product of the number of shares of Common Stock
outstanding less all shares validly tendered and not withdrawn as of
the date of expiration of the tender offer and the Current Market Price
of the Common Stock on the Trading Day next succeeding the date of
expiration of the tender offer, such reduction (if any) to become
effective immediately prior to the opening of business on the day
following the date of expiration of the tender offer. In the event the
Company is permanently prevented by applicable law from effecting any
such purchases or all such purchases are rescinded, the Conversion
Price shall again be adjusted to be the Conversion Price which would
then be in effect if such tender offer had not been made. If the
application of this Section 10.06(f) to any tender offer would result
in an increase in the Conversion Price, no adjustment shall be made for
such tender offer under this Section 10.06(f).
(g) For purposes of this Section 10.06, the following terms
have the meanings indicated:
(1) "Closing Price" with respect to any securities on
any day shall mean the closing sale price regular way on such
day or, in case no such sale takes place on such day, the
average of the reported closing bid and asked prices, regular
way, in each case on the Nasdaq National Market or New York
Stock Exchange, as applicable, or, if such security is not
listed or admitted to trading on such Nasdaq National Market
or New York Stock 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, in such manner as 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, whose
determination shall be conclusive and described in a Board
Resolution.
(2) "Current Market Price" shall mean the average of
the Closing Prices per share of Common Stock for the ten (10)
consecutive Trading Days immediately prior to the date for
which a Current Market Price is required; provided, however,
that:
(1) if the "ex" date (as hereinafter
defined) for any event (other than the issuance or
distribution requiring such computation) that
requires an adjustment to the Conversion Price
pursuant to Section 10.06(a), (b), (c), (d), (e), (f)
or (g) occurs during such ten consecutive Trading
Days, then the Closing Price for each Trading Day
prior to the "ex" date for such other event shall be
adjusted by multiplying such Closing Price by the
same fraction by which the Conversion Price is so
required to be adjusted as a result of such other
event,
-46-
(2) if the "ex" date for any event (other
than the issuance or distribution requiring such
computation) that requires an adjustment to the
Conversion Price pursuant to Section 10.06(a), (b),
(c), (d), (e), (f) or (g) occurs on or after the "ex"
date for the issuance or distribution requiring such
computation and prior to the day in question, then
the Closing Price for each Trading Day on and after
the "ex" date for such other event shall be adjusted
by multiplying such Closing Price by the reciprocal
of the fraction by which the Conversion Price is so
required to be adjusted as a result of such other
event, and
(3) if the "ex" date for the issuance or
distribution requiring such computation is prior to
the day in question, after taking into account any
adjustment required pursuant to clause (1) or (2) of
this proviso, the Closing Price for each Trading Day
on or after such "ex" date shall be adjusted by
adding thereto the amount of any cash and the fair
market value of the evidences of indebtedness, shares
of Capital Stock or assets being distributed
applicable to one share of Common Stock as of the
close of business on the day before such "ex" date.
For purposes of any computation under Sections
10.06(f) or (g), the Current Market Price of the Common Stock
on any date shall be deemed to be the average of the daily
Closing Prices per share of Common Stock for such day and the
next two succeeding Trading Days; provided, however, that if
the "ex" date for any event (other than the tender offer
requiring such computation) that requires an adjustment to the
Conversion Price pursuant to ▇▇▇▇▇▇▇ ▇▇.▇▇(▇), (▇), (▇), (▇),
(▇), (▇) and (g) occurs on or after the date of expiration of
the tender or exchange offer requiring such computation and
prior to the day in question, the Closing Price for each
Trading Day on and after the "ex" date for such other event
shall be adjusted by multiplying such Closing Price by the
reciprocal of the fraction by which the Conversion Price is so
required to be adjusted as a result of such other event.
For purposes of this definition, the term "ex" date,
(1) when used with respect to any issuance or distribution,
means the first date on which the Common Stock trades regular
way on the relevant exchange or in the relevant market from
which the Closing Price was obtained without the right to
receive such issuance or distribution, (2) when used with
respect to any subdivision or combination of shares of Common
Stock, means the first date on which the Common Stock trades
regular way on such exchange or in such market after the time
at which such subdivision or combination becomes effective,
and (3) when used with respect to any tender or exchange offer
means the first date on which the Common Stock trades regular
way on such exchange or in such market after the Expiration
Time of such offer.
(3) "fair market value" shall mean the amount which a
willing buyer would pay a willing seller in an arm's length
transaction determined in good faith by
-47-
the Board of Directors, whose determination shall be
conclusive and described in a Board Resolution.
(4) "Record Date" shall mean, with respect to any
dividend, distribution or other transaction or event in which
the holders of Common Stock have the right to receive any
cash, securities or other property or in which the Common
Stock (or other applicable security) is exchanged for or
converted into any combination of cash, securities or other
property, the date fixed for determination of shareholders
entitled to receive such cash, securities or other property
(whether such date is fixed by the Board of Directors or by
statute, contract or otherwise).
(5) "Trading Day" shall mean (x) if the applicable
security is listed or admitted for trading on the New York
Stock Exchange or another national security exchange, a day on
which the New York Stock Exchange or such other national
security exchange, as the case may be, is open for business,
(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.
(h) The Company may make such reductions in the Conversion
Price, in addition to those required by Sections 10.06(a), (b), (c),
(d), (e) and (f), as the Board of Directors considers to be advisable
to avoid or diminish any income tax to holders of Common Stock or
rights to purchase Common Stock resulting from any dividend or
distribution of stock (or rights to acquire stock) or from any event
treated as such for income tax purposes.
To the extent permitted by applicable law, the Company from
time to time may reduce the Conversion Price by any amount for any
period of time if the period is at least twenty (20) days and the
reduction is irrevocable during the period. Whenever the Conversion
Price is reduced pursuant to the preceding sentence, the Company shall
mail to the Holder of each Security at his last address appearing on
the register maintained by the Registrar a notice of the reduction at
least fifteen (15) days prior to the date the reduced Conversion Price
takes effect, and such notice shall state the reduced Conversion Price
and the period during which it will be in effect.
(i) No adjustment in the Conversion Price pursuant to this
Section 10.06 shall be required unless such adjustment would require an
increase or decrease of at least 1% in such price; provided, however,
that any adjustment that would otherwise be required to be made shall
be carried forward and taken into account in any subsequent adjustment.
All calculations under this Article Ten shall be made by the Company
and 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 change
in the par value or no par value of the Common Stock.
-48-
(j) Whenever the Conversion Price is adjusted as herein
provided, the Company shall promptly file with the Trustee, and any
Conversion Agent other than the Trustee, an Officers' Certificate
setting forth the Conversion Price after such adjustment and setting
forth a brief statement of the facts requiring such adjustment. Unless
and until a Trust Officer of the Trustee shall have received such
Officers' Certificate, the Trustee shall not be deemed to have
knowledge of any adjustment of the Conversion Price and may assume
without inquiry that the last Conversion Price of which it has
knowledge remains in effect. Promptly after delivery of such
certificate, the Company shall prepare a notice of such adjustment of
the Conversion Price setting forth the adjusted Conversion Price and
the date on which each adjustment becomes effective and shall mail such
notice of such adjustment of the Conversion Price to the Holder of each
Security at his last address appearing on the register maintained by
the Registrar, within twenty (20) days of the effective date of such
adjustment. Failure to deliver such notice shall not affect the
legality or validity of any such adjustment.
(k) In any case in which this Section 10.06 provides that an
adjustment shall become effective immediately after a Record Date for
an event, the Company may defer until the occurrence of such event (i)
issuing to the Holder of any Security converted after such Record Date
and before the occurrence of such event the additional shares of Common
Stock issuable upon such conversion by reason of the adjustment
required by such event over and above the Common Stock issuable upon
such conversion before giving effect to such adjustment and (ii) paying
to such Holder any amount in cash in lieu of any fraction pursuant to
Section 10.03.
(l) For purposes of this Section 10.06, the number of shares
of Common Stock at any time outstanding shall not include shares held
in the treasury of the Company but shall include shares issuable in
respect of scrip certificates issued in lieu of fractions of shares of
Common Stock. The Company will not pay any dividend or make any
distribution on shares of Common Stock held in the treasury of the
Company.
SECTION 10.07. Effect of Reclassification, Consolidation, Merger or
Sale.
In the case of (i) any reclassification or change of the
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, merger or combination of
the Company with another corporation as a result of which holders of Common
Stock shall be entitled to receive stock, securities or other property or assets
(including cash) with respect to or in exchange for such Common Stock or (iii)
any sale or conveyance of the properties and assets of the Company as, or
substantially as, an entirety to any other corporation as a result of which
holders of Common Stock shall be entitled to receive stock, securities or other
property or as-
-49-
sets (including cash) with respect to or in exchange for such Common Stock,
then, unless an adjustment with respect thereto shall be made pursuant to
Section 10.06, the Company or the successor or purchasing corporation, as the
case may be, shall execute with the Trustee a supplemental indenture providing
that the Securities shall be convertible into the kind and amount of shares of
stock and other securities or property or assets (including cash) receivable
upon such reclassification, change, consolidation, merger, combination, sale or
conveyance by a holder of a number of shares of Common Stock issuable upon
conversion of such Securities immediately prior to such reclassification,
change, consolidation, merger, combination, sale or conveyance assuming such
holder of Common Stock did not exercise rights of election, if any, as to the
kind or amount of securities, cash or other property receivable upon such
consolidation, merger, statutory exchange, sale or conveyance. Such supplemental
indenture shall provide for adjustments which shall be as nearly equivalent as
may be practicable to the adjustments provided for in this Article Ten. If, in
the case of any such reclassification, change, consolidation, merger,
combination, sale or conveyance, the stock or other securities and assets
receivable thereupon by a holder of shares of Common Stock include shares of
stock or other securities and assets of a Person other than the successor or
purchasing corporation, as the case may be, in such reclassification, change,
consolidation, merger, combination, sale or conveyance, then such supplemental
indenture shall also be executed by such other Person and shall contain such
additional provisions to protect the interests of the Holders as the Board of
Directors shall reasonably consider necessary by reason of the foregoing.
The Company shall cause notice of the execution of such
supplemental indenture to be mailed to each Holder of Securities, at its address
appearing on the register maintained by the Registrar, within twenty (20) days
after execution thereof. Failure to deliver such notice shall not affect the
legality or validity of such supplemental indenture.
SECTION 10.08. Notice of Certain Transactions.
If:
(1) the Company proposes to take any action that would
require an adjustment in the conversion rate;
(2) the Company proposes to take any action that would
require a supplemental indenture pursuant to Section 10.07; or
(3) there is a proposed liquidation, winding up or
dissolution of the Company,
the Company shall mail to Holders a notice stating the proposed record date for
a dividend or distribution or the proposed effective date of a subdivision,
combination, reclassification, consolidation, merger, transfer, lease,
liquidation or dissolution. The Company shall mail the notice at least 10 days
before such date. Failure to mail the notice or any defect in it shall not
affect the validity of the transaction.
SECTION 10.09. Company Determination Final.
Any determination that the Board of Directors makes pursuant
to this Article Ten is conclusive, absent manifest error.
-50-
SECTION 10.10. Trustee's Disclaimer.
The Trustee has no duty to determine when an adjustment under
this Article or under the terms of the Securities should be made, how it should
be made or what it should be. Such information shall be timely provided to the
Trustee in an Officers' Certificate. The Trustee has no duty to determine
whether any provisions of a supplemental indenture under Section 10.07 are
correct. The Trustee makes no representation as to the validity or value of any
securities or assets issued upon conversion of Securities. The Trustee shall not
be responsible for the Company's failure to comply with this Article. Each
Conversion Agent other than the Company shall have the same protection under
this Section 10.10 as the Trustee.
ARTICLE ELEVEN
MISCELLANEOUS
SECTION 11.01. 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 11.02. Notices.
Any notice, request or communication by the Company or the
Trustee to the other is duly given if in writing and delivered in person, mailed
by first-class mail or by express delivery to the other's address stated in this
Section 11.02. The Company or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.
Any notice or communication to a Holder shall be mailed by
first-class mail or by express delivery to its address shown on the register
kept by the Registrar. 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 the addressee receives it.
If the Company mails a notice or communication to Holders, it
shall mail a copy to the Trustee and each Agent at the same time.
All notices or communications shall be in writing.
-51-
The Company's address is:
Charming Shoppes, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
With a copy to (which shall not constitute required
notice):
Drinker ▇▇▇▇▇▇ & ▇▇▇▇▇, LLP
One ▇▇▇▇▇ Square
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: F. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, III, Esq.
The Trustee's address is:
Wachovia Bank, National Association
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇ 1249
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Corporate Trust Administration
SECTION 11.03. Communication by Holders with Other Holders.
Holders may communicate pursuant to TIA ss. 312(b) with other
Holders with respect to their rights under this Indenture or the Securities. The
Company, the Trustee, the Registrar and anyone else shall have the protection of
TIA ss. 312(c).
SECTION 11.04. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee
to take any action under this Indenture the Company shall furnish to the
Trustee:
(1) an Officers' Certificate stating that, in the opinion of
the signers, all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with; and
(2) an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent have been complied with.
Each signer of an Officers' Certificate or an Opinion of
Counsel may (if so stated) rely, effectively, upon an Opinion of Counsel as to
legal matters and an Officers' Certificate as to
-52-
factual matters if such signer reasonably and in good faith believes in the
accuracy of the document relied upon.
SECTION 11.05. Statements Required in Certificate or Opinion.
---------------------------------------------
Each Officers' Certificate or Opinion of Counsel with respect
to compliance with a condition or covenant provided for in this Indenture shall
include:
(1) a statement that the Person making such certificate
or opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such Person, he or she
has made such examination or investigation as is necessary to enable
him or her to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(4) a statement as to whether or not, in the opinion of such
Person, such condition or covenant has been complied with.
SECTION 11.06. Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by or at a
meeting of Holders. The Registrar, Paying Agent or Conversion Agent may make
reasonable rules and set reasonable requirements for their respective functions.
SECTION 11.07. Legal Holidays.
A "Legal Holiday" is a Saturday, a Sunday or a day on which
banking institutions are not required to be open in The City of New York, in the
State of New York or in the city in which the Trustee administers its corporate
trust business. If a payment date is a Legal Holiday at a place of payment,
payment may be made at that place on the next succeeding day that is not a Legal
Holiday, and no interest shall accrue on that payment for the intervening
period.
A "Business Day" is a day other than a Legal Holiday.
SECTION 11.08. No Recourse Against Others.
-
No past, present or future director, officer, employee or
shareholder, as such, of the Company shall have any liability for any
obligations of the Company under the Securities or this Indenture or for any
claim based on, in respect of or by reason of such obligations or their
creation. Each Holder by accepting a Security waives and releases all such
liability. The waiver and release are part of the consideration for the issue of
the Securities.
-53-
SECTION 11.09. Duplicate Originals.
The parties may sign any number of copies of this Indenture.
Each signed copy shall be an original, but all of them together represent the
same agreement.
SECTION 11.10. Governing Law.
The laws of the State of New York, without regard to
principles of conflicts of law, shall govern this Indenture and the Securities.
SECTION 11.11. No Adverse Interpretation of Other Agreements.
Another indenture, loan or debt agreement may not be used to
interpret this Indenture.
SECTION 11.12. Successors.
All agreements of the Company in this Indenture and the
Securities shall bind its successors. All agreements of the Trustee in this
Indenture shall bind its successors.
SECTION 11.13. Separability.
In case any provision in this Indenture or in the Securities
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby and a Holder shall have no claim therefor against any party
hereto.
SECTION 11.14. Table of Contents, Headings, etc.
The Table of Contents, Cross-Reference Table and headings of
the Articles and Sections of this Indenture have been inserted for convenience
of reference only, are not to be considered a part hereof and shall in no way
modify or restrict any of the terms or provisions hereof.
S-1
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed as of the date first above written.
CHARMING SHOPPES, INC.
By:
----------------------------------------
Name:
Title:
WACHOVIA BANK, NATIONAL ASSOCIATION
as Trustee
(formerly known as First Union National Bank)
By:
-----------------------------------------
Name:
Title:
EXHIBIT A
REGISTERED [Face of Security]
NUMBER $
CUSIP______________ CHARMING SHOPPES, INC.
4.75% SENIOR CONVERTIBLE NOTE DUE 2012
CHARMING SHOPPES, INC., a Pennsylvania corporation (herein
called the "Company"), for value received, hereby promises to pay to Cede & Co.
or registered assigns, the principal sum of [AMOUNT] Dollars on June 1, 2012,
and to pay interest thereon as provided below and on the reverse hereof on the
principal sum, until the principal hereof and any unpaid and accrued interest is
paid or duly provided for.
Interest Payment Dates: June 1 and December 1, with the first
payment to be made on December 1, 2002.
Record Dates: May 15 and November 15.
A-1
IN WITNESS WHEREOF, CHARMING SHOPPES, INC. has caused this
instrument to be duly signed.
CHARMING SHOPPES, INC.
By:
------------------------------------
Name:
Title:
By:
------------------------------------
Name:
Title:
Dated:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities referred to in the within-mentioned Indenture.
WACHOVIA BANK, NATIONAL ASSOCIATION, as Trustee
By:
------------------------------------------------
Authorized Officer
A-2
[REVERSE OF SECURITY]
CHARMING SHOPPES, INC.
4.75% SENIOR CONVERTIBLE NOTE DUE 2012
1. Interest. Charming Shoppes, Inc., a Pennsylvania
corporation (the "Company"), promises to pay interest on the principal amount of
this Security at the rate per annum shown above. The Company will pay interest
semi-annually in arrears on June 1 and December 1 of each year, with the first
payment to be made on December 1, 2002. Interest on the Securities will accrue
on the principal amount from the most recent date to which interest has been
paid or duly provided for or, if no interest has been paid, from the original
date of issuance. Interest will be computed on the basis of a 360-day year of
twelve 30-day months.
2. Maturity. The Securities will mature on June 1, 2012
unless earlier converted, redeemed or repurchased pursuant to the terms hereof
and the Indenture (as defined below).
3. Method of Payment. The Company will pay interest on the
Securities to the Persons who are registered Holders of Securities at the close
of business on the record date set forth on the face of this Security next
preceding the applicable interest payment date except: (i) defaulted interest,
which shall be paid as set forth in Section 2.12 of the Indenture, (ii) interest
payable upon redemption or repurchase, unless the date of redemption or
repurchase is an interest payment date, will be payable to the Person to whom
the principal is payable and (iii) in the case of any Security or portion of any
Security that is converted into Common Stock during the period from, but
excluding, a record date for any interest payment date to, but excluding, that
interest payment date, (A) if the Company has sent a notice of redemption with
respect to such Security, or portion of such Security, for a redemption date
that occurs during that period, or if the Company has sent a Company Notice
respecting a Repurchase Date for such Security, or portion of such Security,
that occurs during that period, then the Company will not be required to pay
interest on that interest payment date in respect of such Security, or portion
of such Security, that is converted rather than redeemed or repurchased; or (B)
if no such notice of redemption or Company Notice has been sent during that
period with respect to such Security or portion of such Security, then such
Security or portion of such Security that is submitted for conversion during
that period must be accompanied by funds equal to the interest payable on that
interest payment date on the principal amount so converted. Holders must
surrender Securities to a Paying Agent to collect the principal payments. The
Company will pay the principal, premium, if any, and interest in money of the
United States that at the time of payment is legal tender. Principal and
interest may, at the Company's option, be paid either (i) by check mailed to the
address of the Person entitled to the interest as it appears in the register
kept by the Registrar (provided (a) payments to the Depositary will be made by
wire transfer of immediately available funds to the account of the Depositary or
its nominee and (b) a Holder with an aggregate principal amount of Securities in
excess of $10 million will, at the written election of the Holder, filed on or
before the relevant record date with the Trustee, be paid by wire transfer in
immediately available funds); or (ii) by transfer to an account maintained by
that Person located in the U.S.
4. Paying Agent, Registrar, Conversion Agent.
Initially, Wachovia Bank, National Association (the "Trustee"), will act as
Paying Agent, Registrar and Conversion Agent. The
A-3
Company may change any Paying Agent, Registrar or Conversion Agent without
notice. The Company may act in any such capacity.
5. Indenture. The Company issued the Securities under an
Indenture dated as of May 28, 2002 (the "Indenture") between the Company and the
Trustee. The terms of the Securities include those stated in the Indenture and
those made part of the Indenture by reference to the Trust Indenture Act of 1939
(15 U.S. Code ▇▇.▇▇. 77aaa-77bbbb) (the "Act") as in force at the date as of
which this instrument was executed; provided, however, that in the event the
Trust Indenture Act of 1939 is amended after such date, the "Act" means, to the
extent required by any such amendment, the Trust Indenture Act of 1939 as so
amended. The Securities are subject to all such terms, and Holders are referred
to the Indenture and the Act for a statement of such terms. The Securities are
unsecured general obligations of the Company limited to a maximum of
$130,000,000 aggregate principal amount (plus such additional amount (up to an
aggregate of $20,000,000) purchased by the Initial Purchasers pursuant to the
option described in Section 2.02 of the Indenture), except as otherwise provided
in the Indenture (except for Securities issued in substitution for destroyed,
mutilated, lost or stolen Securities). Terms used herein which are defined in
the Indenture have the meanings assigned to them in the Indenture.
6. Optional Redemption by the Company. At any time on or after
June 4, 2007, the Company may redeem the Securities on at least 20 days' notice
as a whole or, from time to time, in part at the following prices, expressed as
a percentage of the principal amount, together with accrued interest to, but
excluding, the date fixed for redemption:
Redemption
Period Price
Beginning June 4, 2007 and ending on May 31, 2008................... 102.38%
Beginning June 1, 2008 and ending on May 31, 2009................... 101.90%
Beginning June 1, 2009 and ending on May 31, 2010................... 101.43%
Beginning June 1, 2010 and ending on May 31, 2011................... 100.95%
Beginning June 1, 2011 and ending on May 31, 2012................... 100.48%
Subject to Section 3 above, any accrued interest becoming due on the date fixed
for redemption will be payable to the holders of record on the relevant record
date of the Securities being redeemed.
7. Notice of Redemption. Notice of redemption pursuant to
paragraph 6 will be mailed at least 20 days before the redemption date to each
Holder of Securities to be redeemed at its registered address. Securities in
denominations larger than $1,000 principal amount may be redeemed in part but
only in whole multiples of $1,000 principal amount. On and after the redemption
date interest ceases to accrue on Securities or portions of them called for
redemption.
8. Repurchase at Option of Holder. Pursuant to Section 3.07 of
the Indenture within 10 Business Days after the Company becomes aware that a
Repurchase Event has occurred, the Company is required to give notice of the
Repurchase Event to the Holders. Each Holder has the right, at its option, to
require the Company to repurchase all or any portion of the Securities by
delivering notice on or before the 30th Business Day after the notice of
Repurchase Event is mailed. The Repurchase Price will be 100% of the principal
amount of the Securities submitted for repurchase, plus accrued and unpaid
interest to, but excluding, the Repurchase Date. If a Repurchase Date is an
A-4
interest payment date, then the interest payable on that date will be paid to
the holder of record on the relevant record date. Subject to the conditions of
Section 3.07 of the Indenture, the Company, at its option, instead of paying the
Repurchase Price in cash, may pay the Repurchase Price in Common Stock, valued
at 95% of the average of the Closing Prices for the five Trading Days
immediately before and including the third Trading Day preceding the Repurchase
Date.
9. Conversion. A Holder of a Security may convert the
principal of such Security into Common Stock at any time after the date of
original issuance of the Security to the close of business on the business day
prior to June 1, 2012, or (x) if the Security is called for redemption by the
Company, the Holder may convert it at any time before the close of business on
the date that is one business day before the date fixed for such redemption, or
(y) if a Holder exercises its repurchase right, the right to convert the
principal amount of the Securities to be repurchased will terminate, unless and
until it withdraws such election. The initial Conversion Price is $9.88 per
share of Common Stock, subject to adjustment in certain circumstances as set
forth in Section 10.06 of the Indenture. To determine the number of shares
issuable upon conversion of a Security, divide each $1,000 of the principal
amount to be converted by the Conversion Price in effect on the conversion date
and round the result to the nearest 1/100th share. The Company is not required
to issue fractional shares of Common Stock upon conversion and, instead, will
pay a cash amount as provided in Section 10.03 of the Indenture. Except as
provided in Article Ten of the Indenture, no payment or adjustment for the
principal of, premium, if any, interest on or liquidated damages with respect
to, the Securities so converted or for dividends on any Common Stock will be
made. If a Holder surrenders a Security for conversion between the record date
for the payment of interest and the next interest payment date, such Security,
when surrendered for conversion, must be accompanied by payment of an amount
equal to the interest thereon which the registered Holder on such record date is
to receive. A Security that the Holder has elected to be repurchased may be
converted only if the Holder withdraws its election to have such Security
repurchased in accordance with the terms of the Indenture before the close of
business on the business day prior to the Repurchase Date.
To convert a Security a Holder must complete and sign the
Conversion Notice, with appropriate signature guarantee, on the back of the
Security and surrender the Security to a Conversion Agent, together with (1) the
appropriate endorsements and transfer documents if required by the Registrar or
Conversion Agent, (2) payment of the amount of interest, if any, the Holder may
be paid as provided in the last sentence of the above paragraph and (3) payment
of any transfer or similar tax if required. A Holder may convert a portion of a
Security if the portion is $1,000 principal amount or an integral multiple of
$1,000 principal amount.
Any shares issued upon conversion of a Security shall bear the
Private Placement Legend until after the second anniversary of the later of the
issue date for the Securities and the last date on which the Company or any
Affiliate of the Company was the owner of such shares or the Security (or any
predecessor security) from which such shares were converted (or such shorter
period of time as permitted by Rule 144(k) under the Securities Act or any
successor provision thereunder) (or such longer period of time as may be
required under the Securities Act or applicable state securities laws as set
forth in the Opinion of Counsel delivered to the Conversion Agent, unless
otherwise agreed by the Company and the Holder thereof).
10. Denominations, Transfer, Exchange. The Securities are in
registered form without coupons in denominations of $1,000 principal amount and
whole multiples of $1,000 principal
A-5
amount. The transfer of Securities may be registered and Securities may be
exchanged as provided in the Indenture. The Registrar may require a Holder,
among other things, to furnish appropriate endorsements and transfer documents.
No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith. The Registrar
need not exchange or register the transfer of any Security selected for
redemption in whole or in part. Also, it need not exchange or register the
transfer of any Securities for a period of 15 days before the mailing of a
notice of redemption of the Securities selected to be redeemed.
11. Persons Deemed Owners. The registered Holder of a
Security may be treated as the owner of such Security for all purposes.
12. Merger or Consolidation. The Company shall not consolidate
with, or merge into, or transfer or lease all or substantially all of its assets
to, any Person unless, among other things, the Person is organized under the
laws of the United States, any State thereof or the District of Columbia and
such Person assumes by supplemental indenture all the obligations of the Company
under the Securities, the Indenture and the Registration Rights Agreement and
after giving effect to the transaction no Default or Event of Default exists.
13. Amendments, Supplements and Waivers. Subject to certain
exceptions, the Indenture or the Securities may be amended or supplemented with
the consent of the Holders of at least a majority in aggregate principal amount
of the Securities then outstanding, and any existing Default or Event of Default
may be waived with the consent of the Holders of a majority in aggregate
principal amount of the Securities then outstanding. Without notice to or the
consent of any Holder, the Indenture or the Securities may be amended or
supplemented, among other things, to cure any ambiguity, omission, defect or
inconsistency, to provide for uncertificated Securities in addition to
certificated Securities, to comply with Sections 5.01 and 10.07 of the Indenture
or to make any change that does not adversely affect the rights of any Holder.
14. Defaults and Remedies. An Event of Default includes the
occurrence of any or the following: default in payment of the principal of or
any premium on the Securities; default for 30 days in payment of interest;
failure by the Company for 90 days after notice to it to comply with any of its
other agreements in the Indenture or the Securities; any indebtedness under any
bonds, debentures, notes or other evidences of indebtedness for money borrowed,
or any guarantee thereof, by the Company or any of its Significant Subsidiaries,
in an aggregate principal amount in excess of $50 million is not paid when due
either at its stated maturity or upon acceleration thereof, and such
indebtedness is not discharged, or such acceleration is not rescinded or
annulled within a period of 30 days after notice as provided in Section 6.01 of
the Indenture; and certain events of bankruptcy or insolvency. If any Event of
Default occurs and is continuing, the Trustee or the Holders of at least 25% in
aggregate principal amount of the Securities then outstanding may declare all
the Securities to be due and payable, subject to certain limitations contained
in the Indenture. Holders may not enforce the Indenture or the Securities except
as provided in the Indenture. The Trustee may require indemnity satisfactory to
it before it enforces the Indenture or the Securities. Subject to certain
limitations, Holders of a majority in principal amount of the Securities then
outstanding may direct the Trustee in its exercise of any trust or power. The
Trustee may withhold from Holders notice of any continuing Default or Event of
Default (except a Default or Event of Default in payment of principal or
interest)
A-6
if it determines that withholding notice is in their interests. The Company must
furnish an annual compliance certificate to the Trustee.
15. Registration Rights. The Holders are entitled to
shelf registration rights as set forth in the Registration Rights Agreement.
The Holders shall be entitled to receive liquidated damages in certain
circumstances, all as set forth in the Registration Rights Agreement.
16. Trustee Dealings with Company. Except as provided in
ss.77jjj of the Act, the Trustee under the Indenture, or any banking institution
serving as successor Trustee thereunder, in its individual or any other
capacity, may make loans to, accept deposits from, and perform services for the
Company or its Affiliates, and may otherwise deal with the Company or its
Affiliates, as if it were not Trustee.
17. No Recourse Against Others. No past, present or future
director, officer, employee or shareholder, as such, of the Company shall have
any liability for any obligations of the Company under the Securities or the
Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation. Each Holder by accepting a Security waives and
releases all such liability. The waiver and release are part of the
consideration for the issue of the Securities.
18. Authentication. This Security shall not be valid
until authenticated by the manual signature of the Trustee or an authenticating
agent.
19. Abbreviations. Customary abbreviations may be used in the
name of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT
(= tenants by the entirety), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (Uniform Gifts to
Minors Act).
THE COMPANY WILL FURNISH TO ANY SECURITYHOLDER UPON WRITTEN
REQUEST AND WITHOUT CHARGE A COPY OF THE INDENTURE. REQUESTS MAY BE MADE TO:
CHARMING SHOPPES, INC.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
ATTENTION: Treasurer
A-7
[FORM OF ASSIGNMENT]
I or we assign to
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER
------------------------------
--------------------------------------------------------------------------------
(please print or type name and address)
--------------------------------------------------------------------------------
the within Security and all rights thereunder, and hereby irrevocably
constitutes and appoints
--------------------------------------------------------------------------------
attorney to transfer the Security on the books of the Company with full power
of substitution in the premises.
Dated:
--------------------------------- --------------------------------------
NOTICE: The signature on this
assignment must correspond with the
name as it appears upon the face of
the within Security in every particular
without alteration or enlargement or
any change whatsoever and be
guaranteed by the endorser's bank or
broker.
Signature Guarantee:
-----------------------------------------------------------
(Signatures must be guaranteed by an "eligible guarantor
institution" meeting the requirements of the Registrar, which requirements
include membership or participation in the Security Transfer Agent Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Registrar in addition to, or in substitution for, STAMP, all
in accordance with the Securities Exchange Act of 1934, as amended.)
In connection with any transfer of this Security occurring
prior to the date which is the earlier of (i) the date of the declaration by the
Commission of the effectiveness of a registration statement under the Securities
Act of 1933, as amended (the "Securities Act"), covering resales of this
Security (which effectiveness shall not have been suspended or terminated at the
date of the transfer) and (ii) the date that the undersigned confirms that it
has not utilized any general solicitation or general advertising in connection
with such transfer and that such transfer is being made:
A-8
[Check One]
(1) ____ to the Company or a subsidiary thereof; or
(2) ____ pursuant to and in compliance with Rule 144A under the
Securities Act of 1933, as amended; or
(3) ____ to an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act of 1933,
as amended) that has furnished to the Trustee a signed letter
containing certain representations and agreements (the form
of which letter can be obtained from the Trustee); or
(4) ____ outside the United States to a "foreign purchaser" in
compliance with Rule 904 of Regulation S under the Securities
Act of 1933, as amended; or
(5) ____ pursuant to the exemption from registration provided by Rule
144 under the Securities Act of 1933, as amended; or
(6) ____ pursuant to an effective registration statement under the
Securities Act of 1933, as amended; or
(7) ____ pursuant to another available exemption from the registration
statement requirements of the Securities Act of 1933, as
amended.
and unless the box below is checked, the undersigned confirms that such Security
is not being transferred to an "affiliate" of the Company as defined in Rule 144
under the Securities Act of 1933, as amended (an "Affiliate"):
_
|_| The transferee is an Affiliate of the Company.
(If the Security is transferred to an Affiliate, the restrictive legend must
remain on the Security for two years following the date of the transfer).
Unless one of the items is checked, the Trustee will refuse to
register any of the Securities evidenced by this certificate in the name of any
Person other than the registered Holder thereof; provided, however, that if item
(3),(4),(5) or (7) is checked, the Company or the Trustee may require, prior to
registering any such transfer of the Securities, in their sole discretion, such
written legal opinions, certifications (including an investment letter in the
case of item (3) or (4)) and other information as the Trustee or the Company
have reasonably requested to confirm that such transfer is being made pursuant
to an exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act of 1933, as amended.
If none of the foregoing items are checked, the Trustee or
Registrar shall not be obligated to register this Security in the name of any
Person other than the Holder hereof unless and until the conditions to any such
transfer of registration set forth herein and in Section 2.16 of the Indenture
shall have been satisfied.
A-9
Dated: Signed:
----------------------------- --------------------------------
(Sign exactly as name appears on
the other side of this Security)
Signature Guarantee:
------------------------------------------------------------
TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED
The undersigned represents and warrants that it is purchasing
this Security for its own account or an account with respect to which it
exercises sole investment discretion and that it and any such account is a
"qualified institutional buyer" within the meaning of Rule 144A under the
Securities Act of 1933, as amended, and is aware that the sale to it is being
made in reliance on Rule 144A and acknowledges that it has received such
information regarding the Company as the undersigned has requested pursuant to
Rule 144A or has determined not to request such information and that it is aware
that the transferor is relying upon the undersigned's foregoing representations
in order to claim the exemption from registration provided by Rule 144A.
Dated:
---------------------------- ---------------------------------------
NOTICE: To be executed by an
executive officer
Signature Guarantee:
-----------------------------------------------------------
A-10
CONVERSION NOTICE
To convert this Security into Common Stock of the Company, check the box:
_
|_|
To convert only part of this Security, state the principal amount to be
converted (must be in multiples of $1,000):
$
-------------------------------------
If you want the stock certificate made out in another person's name, fill in the
form below:
--------------------------------------------------
(Insert other person's soc. sec. or tax I.D. no.)
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
(Print or type other person's name, address and zip code)
---------------------------------------------------------------
Date:______________ Signature(s):
------------------------------------------
(Signatures must be guaranteed by an
"eligible guarantor institution"
meeting the requirements of the
Registrar, which requirements include
membership or participation in the
Security Transfer Agent Medallion
Program ("STAMP") or such other
"signature guarantee program" as may
be determined by the Registrar in
addition to, or in substitution for,
STAMP, all in accordance with the
Securities Exchange Act of 1934, as
amended.)
A-11
Signature(s) guaranteed by:
------------------------------------------------
(Signatures must be guaranteed by
an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements
include membership or participation in the
Security Transfer Agent Medallion Program
("STAMP") or such other "signature guarantee
program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all
in accordance with the Securities Exchange Act of
1934, as amended.)
A-12
OPTION OF HOLDER TO ELECT PURCHASE NOTICE
If you want to elect to have this Security purchased by the
Company pursuant to Section 3.07 of the Indenture, check the box: |_|
If you want to elect to have only part of this Security
purchased by the Company pursuant to Section 3.07 of the Indenture, state the
principal amount:
$ ----------------------------------
(in an integral multiple of $1,000)
Date:__________________ Signature(s):_______________________
----------------------------------------
(Sign exactly as your name(s) appear(s) on
the other side of this Security)
Signature(s) guaranteed by:
------------------------------------------
(Signatures must be guaranteed by an
"eligible guarantor institution" meeting the
requirements of the Registrar, which
requirements include membership or
participation in the Security Transfer
Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may
be determined by the Registrar in addition
to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act
of 1934, as amended.)
A-13
EXHIBIT B
FORM OF LEGENDS
I. PRIVATE PLACEMENT LEGEND
Each Security issued under the Indenture shall bear a legend
(and any common stock issued upon conversion of such Security shall bear a
comparable 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 AND
THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION HEREOF 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.
THIS SECURITY (OR ITS PREDECESSOR) MAY NOT BE OFFERED OR SOLD
WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S.
PERSONS, EXCEPT AS SET FORTH BELOW. BY ITS ACQUISITION HEREOF, THE
HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER"
(AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B) IT IS NOT A
U.S. PERSON AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION
IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT, (2) AGREES THAT
IT WILL NOT WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THIS
SECURITY RESELL OR OTHERWISE TRANSFER THIS SECURITY EXCEPT (A) TO THE
COMPANY OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO A
QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE
SECURITIES ACT, (C) OUTSIDE THE UNITED STATES IN AN OFFSHORE
TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT, (D)
PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER
THE SECURITIES ACT (IF AVAILABLE), (E) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR (F) PURSUANT TO
ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT, (3) PRIOR TO ANY TRANSFER (OTHER THAN A TRANSFER
PURSUANT TO CLAUSE 2(E) ABOVE), WILL FURNISH TO WACHOVIA BANK, NATIONAL
ASSOCIATION, AS TRUSTEE
B-1
(OR A SUCCESSOR TRUSTEE, AS APPLICABLE), SUCH CERTIFICATIONS, LEGAL
OPINIONS OR OTHER INFORMATION AS THE TRUSTEE OR CHARMING SHOPPES MAY
REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE
PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTTION NOT SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, AND (4) AGREES
THAT IT WILL GIVE TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED
A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND IN CONNECTION WITH
ANY TRANSFER OF THIS SECURITY WITHIN TWO YEARS AFTER THE ORIGINAL
ISSUANCE OF THIS SECURITY. IN ANY CASE, THE HOLDER HEREOF WILL NOT,
DIRECTLY OR INDIRECTLY, ENGAGE IN ANY HEDGING TRANSACTION WITH REGARD
TO THIS SECURITY OR ANY COMMON STOCK ISSUABLE UPON CONVERSION OF THIS
SECURITY EXCEPT AS PERMITTED BY THE SECURITIES ACT. AS USED HEREIN,
THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON"
HAVE THE MEANING GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES
ACT. THE INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO
REFUSE TO REGISTER ANY TRANSFER OF THIS SECURITY IN VIOLATION OF THE
FOREGOING RESTRICTIONS.
B-2
II. GLOBAL SECURITY LEGEND
Any Global Security authenticated and delivered hereunder
shall bear a legend (which would be in addition to any other legends required in
the case of a Restricted Security) in substantially the following form:
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE
INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A
DEPOSITARY OR A NOMINEE OF A DEPOSITARY OR A SUCCESSOR DEPOSITARY. THIS
SECURITY IS NOT EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A
PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE EXCEPT IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS
SECURITY (OTHER THAN A TRANSFER OF THIS SECURITY AS A WHOLE BY THE
DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE
DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY) MAY
BE REGISTERED EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
INDENTURE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITARY TRUST COMPANY, A NEW YORK CORPORATION
("DTC"), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO.
OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO
TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A
SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS
OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN
ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN SECTION 2.16 OF THE
INDENTURE.
B-3
EXHIBIT C
Form of Certificate To Be Delivered
in Connection with Transfers
Pursuant to Regulation S
[Date]
Wachovia Bank, National Association
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇ 1249
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Corporate Trust Administration
Re: Charming Shoppes, Inc. (the "Company")
4.75% Senior Convertible Notes
due 2012 (the "Securities")
Ladies and Gentlemen:
In connection with our proposed purchase of $[ ] aggregate
principal amount of the Securities, we confirm that such purchase has been
effected pursuant to and in accordance with Regulation S under the U.S.
Securities Act of 1933, as amended (the "Securities Act"), and, accordingly, we
represent that:
(1)a [We are not a U.S. person and are not acquiring the
Securities for the account or benefit of any U.S. person]. [We are a
U.S. person who purchased securities in a transaction that did not
require registration under the Act.]
(2) We agree to resell the Securities only in accordance with
the provisions of Regulation S, pursuant to registration under the
Securities Act, or pursuant to an available exemption from
registration; and we agree not to engage in hedging transactions with
regard to such securities unless in compliance with the Securities Act.
--------------------------
a One of the two following sentences must be used.
C-1
You, the Company and counsel for the Company are entitled to
rely upon this letter and are irrevocably authorized to produce this letter or a
copy hereof to any interested party in any administrative or legal proceedings
or official inquiry with respect to the matters covered hereby. Terms used in
this certificate have the meanings set forth in Regulation S.
Very truly yours,
[Name of Transferor]
By:
----------------------------
Authorized Signature
C-2
EXHIBIT D
Form of Notice of Transfer Pursuant to Registration Statement
[Date]
Charming Shoppes, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Wachovia Bank, National Association
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇ 1249
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Corporate Trust Administration
Re: Charming Shoppes, Inc. (the "Company")
4.75% Senior Convertible Notes Due 2012
(the "Securities")
Ladies and Gentlemen:
Please be advised that _____________ has transferred
$___________ aggregate principal amount of the Securities or __ shares of the
Company's common stock, $.001 par value per share, issuable on conversion of the
Securities ("Stock") pursuant to an effective Shelf Registration Statement on
Form S-3 (File No. 333- ) filed by the Company.
We hereby certify that the prospectus delivery requirements,
if any, of the Securities Act of 1933 as amended, have been satisfied with
respect to the transfer described above and that the above-named beneficial
owner of the Securities or Stock is named as a "Selling Security Holder" in the
Prospectus dated
or in amendments or supplements thereto, and that the aggregate
principal amount of the Securities, or number of shares of Stock transferred are
[a portion of] the Securities or Stock listed in such Prospectus, as amended or
supplemented, opposite such owner's name.
Very truly yours,
-------------------------
(Name)
D-1
EXHIBIT E
Form of Opinion of Counsel in Connection with Registration of Securities
------------------------------------------------------------------------
[Date]
Wachovia Bank, National Association
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇ 1249
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Corporate Trust Administration
Re: Charming Shoppes, Inc. (the "Company")
4.75% Senior Convertible Notes Due 2012
(the "Securities")
Ladies and Gentlemen:
Reference is made to the Securities issued pursuant to a
certain indenture dated as of May 28, 2002 by and between the Company and
Wachovia Bank, National Association, as trustee (the "Trustee"). The Securities
were issued in transactions exempt from registration under the Securities Act of
1933, as amended (the "Securities Act"). The Company has filed with the
Securities and Exchange Commission (the "SEC") a registration statement on Form
S-3 (number 333-____) (the "Registration Statement") relating to the
registration under the Securities Act of $[ ] principal amount of the Securities
and the shares of Common Stock of the Company (the "Shares") issuable upon
conversion of the Securities being registered.
We have acted as counsel for the Company in connection with
the issuance of the Securities and the preparation and filing of the
Registration Statement and are familiar with the Securities, the Indenture, the
Registration Statement and such other documents as are necessary to render this
opinion.
We have been orally advised by the SEC that the Indenture has
been qualified under the Trust Indenture Act of 1939, as amended, and that the
Registration Statement was declared effective under the Securities Act at _____,
on ____________, 200_, and we have been orally advised by the SEC that no stop
order suspending the effectiveness of the Registration Statement has been issued
and, to the best of our knowledge, no proceedings for that purpose have been
instituted or are pending or threatened by the SEC.
E-1
This opinion is being furnished only to you in connection with
the Indenture and is solely for your benefit and is not to be used, circulated,
quoted or otherwise referred to for any other purpose or relied upon by any
other person for any other purpose without our prior written consent.
Yours truly,
E-2