SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
September 30, 1997
Date of Report (Date of earliest event reported)
FIELDS AIRCRAFT SPARES, INC.
(Exact name of Registrant as specified in its charter)
Utah 0-27100 95-4218263
----------------- ------------------------ ---------------
(State or other (Commission File Number) (IRS Employer
jurisdiction of Identification
Incorporation No.)
2251-A Ward Avenue
Simi Valley, CA 93005
(Address of principal executive offices)
(Zip Code)
(805) 583-0080
(Registrant's telephone number, including area code)
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Item 7. Financial Statements and Exhibits.
(c) Exhibits.
Exhibit 4.1 Indenture for the 8.5% Subordinated Redeemable
Debentures Due 2000, dated as of September 30,
1997, between the Company and Etablissement Pour le
Placement Prive, as Trustee.
Exhibit 4.2 Form of 8.5% Subordinated Redeemable Debentures Due
2000 (included in Exhibit A to Exhibit 4.1 above).
Item 9. Sales of Equity Securities Pursuant to Regulation S.
As of September 30, 1997, Fields Aircraft Spares, Inc. (the "Company")
closed the sale of $10,000,000 principal amount of its 8.5% Subordinated
Redeemable Debentures Due 2000 (the "Debentures") issued under an Indenture (the
"Indenture"), dated as of September 30, 1997, between the Company and
Etablissement Pour le Placement Prive as Trustee. The Securities were sold in
reliance on Regulation S of the Securities Act of 1933 ("Regulation S") to
entities which represented to the Company to be accredited non-U.S. persons as
defined in Regulation S.
The Debentureholders will have a one-time right at any time after
December 29, 1997 through September 27, 2000, subject to prior redemption or
repurchase, to convert up to 30% (less any amounts converted pursuant to the
Mandatory Conversion described below) of the principal amount of such holder's
Debentures, that is $1,000 principal amount or an integral multiple thereof,
into Common Shares, par value $.05 per share (the "Common Shares"), of the
Company at a conversion price (the "Conversion Price") equal to 85% of the
average closing price of the Common Shares during the 20-trading day period
ending on the date of notice of conversion, but in no event less than $12.00 per
share, subject to certain adjustments. In the event that, during any 20-day
trading day period, the average closing price of the Common Shares equals or
exceeds $12.00 per share, the Company may, within 30 days of such period,
require the conversion (the "Mandatory Conversion") of up to 20% of the
principal amount of outstanding Debentures at the Conversion Price.
The Debentures are redeemable, in whole or in part, at the option of
the Company, at any time on or after March 31, 1999, at 100% of the principal
amount plus accrued interest.
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The foregoing description of the Debentures is qualified by reference
to the Indenture and form of Debenture attached thereto, which is an exhibit to
this current report on Form 8-K.
Etablissement Pour le Placement Prive, Zurich Switzerland ("EPP"),
acted as the Company's placement agent in connection with the offering and
received a commission of 8% of the principal amount of Debentures sold and was
issued 15,000 Common Shares (the "Agent Shares") pursuant to the terms of the
Placement Agent Agreement, dated September 9, 1997, between the Company and EPP,
as amended. The issuance of the Agent Shares was made in reliance on Regulation
S. EPP has represented to the Company that EPP is an accredited non-U.S. person
as defined in Regulation S.
The Company estimates that the total fees and expenses incurred by the
Company, in addition to the 8% commission described above, will be approximately
$350,000, which includes a placement fee to be paid to EPP of $175,000.
Accordingly, the net proceeds to the Company from the sale of the Debentures
should be approximately $8,850,000. Of that amount, approximately $110,000 is
still due to the Company from the Escrow Agent and had not been received by the
Company as of the date of this filing.
The Company has granted certain piggyback registration rights with
respect to the Common Shares issuable upon conversion of the Debentures (the
"Registrable Shares"). Common Shares that may be transferred within 60 days
without registration under the Securities Act of 1933 pursuant to Regulation S
are not included in Registrable Shares. Registration rights expire on September
30, 1998, or such shorter period as Regulation S may require before the
Registrable Shares may be transferred without registration.
Effective October 13, 1997, the Company issued 5,000 Common Shares and
has agreed to pay additional cash consideration to EPP in connection with a
future equity raising transaction. The issuance of these shares was made in
reliance on Regulation S. EPP has represented to the Company that EPP is an
accredited non-U.S. person as defined in Regulation S.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
FIELDS AIRCRAFT SPARES, INC.
Date: October 14, 1997 By /s/ Alan M. Fields
-------------------------
Alan M. Fields, President
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FIELDS AIRCRAFT SPARES, INC.
Issuer
AND
ETABLISSEMENT POUR LE PLACEMENT PRIVE
Trustee
INDENTURE
Dated as of September 30, 1997
8.5% Subordinated Redeemable Debentures Due 2000
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TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS
Section 1.1 Definitions........................................... 2
Section 1.2 Rules of Construction................................. 6
ARTICLE II
ISSUE, DESCRIPTION, EXECUTION, REGISTRATION
AND EXCHANGE OF DEBENTURES
Section 2.1 Designation, Amount and Issue of Debentures........... 7
Section 2.2 Form of Debentures.................................... 7
Section 2.3 Date and Denomination of Debentures; Payments
of Interest.......................................... 8
Section 2.4 Execution of Debentures............................... 8
Section 2.5 Exchange and Registration of Transfer of
Debentures; Restrictions on Transfer................. 9
Section 2.6 Mutilated, Destroyed, Lost or Stolen Debentures....... 13
Section 2.7 Temporary Debentures.................................. 14
Section 2.8 Cancellation of Debentures Paid, Etc.................. 15
Section 2.9 CUSIP Numbers......................................... 15
ARTICLE III
REDEMPTION AND REPURCHASE OF DEBENTURES
Section 3.1 Redemption Prices..................................... 15
Section 3.2 Notice of Redemption; Selection of Debentures......... 15
Section 3.3 Payment of Debentures Called for Redemption........... 17
ARTICLE IV
PARTICULAR COVENANTS OF THE COMPANY
Section 4.1 Payment of Principal, Premium and Interest............ 18
Section 4.2 Maintenance of Office or Agency....................... 18
Section 4.3 Appointments to Fill Vacancies in Trustee's Office.... 18
Section 4.4 Provisions as to Paying Agent......................... 19
Section 4.5 Corporate Existence................................... 20
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Section 4.6 Stay, Extension and Usury Laws........................ 20
Section 4.7 Sale of Inventory..................................... 20
ARTICLE V
DEBENTUREHOLDERS' LISTS
Section 5.1 Debentureholders' Lists............................... 21
ARTICLE VI
DEFAULTS AND REMEDIES
Section 6.1 Events of Default..................................... 21
Section 6.2 Payments of Debentures on Default; Suit Therefor...... 23
Section 6.3 Application of Monies Collected by Trustee............ 25
Section 6.4 Proceedings by Debentureholder........................ 25
Section 6.5 Proceedings by Trustee................................ 26
Section 6.6 Remedies Cumulative and Continuing.................... 26
Section 6.7 Direction of Proceedings and Waiver of Defaults
by Majority of Debentureholders...................... 27
Section 6.8 Notice of Defaults.................................... 27
Section 6.9 Undertaking to Pay Costs.............................. 27
ARTICLE VII
CONCERNING THE TRUSTEE
Section 7.1 Duties and Responsibilities of Trustee................ 28
Section 7.2 Reliance on Documents, Opinions, Etc.................. 29
Section 7.3 No Responsibility for Recitals, Etc................... 30
Section 7.4 Trustee, Paying Agents, Conversion Agents or
Registrar May Own Debentures......................... 30
Section 7.5 Monies to Be Held in Trust............................ 30
Section 7.6 Compensation and Expenses of Trustee.................. 30
Section 7.7 Officers' Certificate as Evidence..................... 31
Section 7.8 Resignation or Removal of Trustee..................... 31
Section 7.9 Acceptance by Successor Trustee....................... 32
Section 7.10 Successor by Merger, Etc.............................. 33
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ARTICLE VIII
CONCERNING THE DEBENTUREHOLDERS
Section 8.1 Action by Debentureholders............................ 33
Section 8.2 Proof of Execution by Debentureholders................ 33
Section 8.3 Who Are Deemed Absolute Owners........................ 34
Section 8.4 Company-Owned Debentures Disregarded.................. 34
Section 8.5 Revocation of Consents, Future Holders Bound.......... 34
ARTICLE IX
DEBENTUREHOLDERS' MEETINGS
Section 9.1 Purposes for Which Meetings May be Called............. 35
Section 9.2 Manner of Calling Meetings; Record Date............... 35
Section 9.3 Call of Meeting by Company or Debentureholders........ 36
Section 9.4 Who May Attend and Vote at Meetings................... 36
Section 9.5 Manner of Voting at Meetings and Record to be Kept.... 36
Section 9.6 Exercise of Rights of Trustee and Debentureholders
Not To Be Hindered or Delayed........................ 37
ARTICLE X
SUPPLEMENTAL INDENTURES
Section 10.1 Supplemental Indentures Without Consent of
Debentureholders..................................... 37
Section 10.2 Supplemental Indentures With Consent of
Debentureholders..................................... 38
Section 10.3 Effect of Supplemental Indentures..................... 39
Section 10.4 Notation on Debentures................................ 39
Section 10.5 Evidence of Compliance of Supplemental Indenture
to Be Furnished to the Trustee....................... 39
ARTICLE XI
CONSOLIDATION, MERGER, SALE, CONVEYANCE,
TRANSFER AND LEASE
Section 11.1 Company May Consolidate, Etc. on Certain Terms........ 39
Section 11.2 Successor Company To Be Substituted................... 40
Section 11.3 Opinion of Counsel To Be Given to Trustee............. 40
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ARTICLE XII
SATISFACTION AND DISCHARGE OF INDENTURE;
UNCLAIMED MONEYS
Section 12.1 Termination of Obligations upon Cancellation
of the Debentures.................................... 40
Section 12.2 Survival of Certain Obligations....................... 41
Section 12.3 Acknowledgment of Discharge by Trustee................ 41
Section 12.4 Application of Trust Assets........................... 41
Section 12.5 Repayment to the Company; Unclaimed Money............. 41
Section 12.6 Reinstatement......................................... 42
ARTICLE XIII
IMMUNITY OF INCORPORATORS, SHAREHOLDERS,
OFFICERS AND DIRECTORS
Section 13.1 Indenture and Debentures Solely Corporate
Obligations.......................................... 42
ARTICLE XIV
CONVERSION OF DEBENTURES
Section 14.1 Right to Convert...................................... 42
Section 14.2 Exercise of Conversion Privilege; Issuance of Common
Stock on Conversion; No Adjustment for Interest
or Dividends......................................... 43
Section 14.3 Cash Payments in Lieu of Fractional Shares............ 45
Section 14.4 Conversion Price...................................... 45
Section 14.5 Adjustment of Conversion Price........................ 45
Section 14.6 Effect of Reclassification, Consolidation, Merger
or Sale.............................................. 47
Section 14.7 Taxes on Shares Issued................................ 48
Section 14.8 Reservation of Shares; Shares to Be Fully Paid........ 48
Section 14.9 Responsibility of Trustee............................. 48
Section 14.10 Notice to Holders Prior to Certain Actions............ 49
ARTICLE XV
SUBORDINATION
Section 15.1 Agreement to Subordinate.............................. 50
Section 15.2 Certain Definitions................................... 50
Section 15.3 Liquidation; Dissolution; Bankruptcy.................. 51
Section 15.4 Default on Senior Indebtedness........................ 51
Section 15.5 When Distribution Must Be Paid Over................... 52
Section 15.6 Notice by Company..................................... 52
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Section 15.7 Subrogation........................................... 52
Section 15.8 Relative Rights....................................... 52
Section 15.9 Subordination May Not Be Impaired by Company.......... 53
Section 15.10 Distribution or Notice to Representative.............. 53
Section 15.11 Rights of Trustee and Paying Agent.................... 53
Section 15.12 Authorization to Effect Subordination................. 54
Section 15.13 Conversions Not Deemed Payment........................ 54
Section 15.14 Amendments............................................ 54
ARTICLE XVI
MISCELLANEOUS PROVISIONS
Section 16.1 Provisions Binding on Company's Successors............ 55
Section 16.2 Official Acts by Successor Company.................... 55
Section 16.3 Addresses for Notices, Etc............................ 55
Section 16.4 Governing Law......................................... 56
Section 16.5 Evidence of Compliance with Conditions Precedent;
Certificates to Trustee.............................. 56
Section 16.6 Legal Holidays........................................ 56
Section 16.7 Benefits of Indenture................................. 56
Section 16.8 Table of Contents, Headings Etc....................... 56
Section 16.9 Authenticating Agent.................................. 56
Section 16.10 Execution in Counterparts............................. 57
EXHIBIT A - FORM OF DEBENTURE
EXHIBIT B - FORM OF TRANSFEREE CERTIFICATE FOR DEBENTURES TO BE ISSUED TO
ACCREDITED INVESTORS
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INDENTURE, dated as of September 30, 1997, by and between
FIELDS AIRCRAFT SPARES, INC., a Utah corporation (the "Company"), and
ETABLISSEMENT POUR LE PLACEMENT PRIVE (the "Trustee"), a Lichtenstein
corporation and VON GRAFFENREID AG, a Swiss banking corporation (the "Paying
Agent").
W I T N E S S E T H :
WHEREAS, for its lawful corporate purposes, the Company has
duly authorized the issuance of its 8.5% Subordinated Redeemable Debentures Due
2000 (the "Debentures"), in an aggregate principal amount not to exceed US
$10,000,000 and, to provide the terms and conditions upon which the Debentures
are to be authenticated, issued and delivered, the Company has duly authorized
the execution and delivery of this Indenture; and
WHEREAS, the Debentures, the certificate of authentication to
be borne by the Debentures, a form of assignment, a form of conversion notice
and a certificate of transfer to be borne by the Debentures are to be
substantially in the forms hereinafter provided for; and
WHEREAS, all acts and things necessary to make the Debentures,
when executed by the Company and authenticated and delivered by the Trustee or a
duly authorized authenticating agent, as in this Indenture provided, the valid,
binding and legal obligations of the Company, and to constitute these presents a
valid agreement according to its terms, have been done and performed, and the
execution of this Indenture and the issuance hereunder of the Debentures have in
all respects been duly authorized.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
That in order to declare the terms and conditions upon which
the Debentures are, and are to be, authenticated, issued and delivered, and in
consideration of the premises and of the purchase and acceptance of the
Debentures by the holders thereof, the Company covenants and agrees with the
Trustee for the equal and proportionate benefit of the respective holders from
time to time of the Debentures (except as otherwise provided below) as follows:
<PAGE>
ARTICLE I
DEFINITIONS
Section 1.1 Definitions. The terms defined in this Section 1.1
(except as herein otherwise expressly provided or unless the context otherwise
requires) for all purposes of this Indenture and of any indenture supplemental
hereto shall have the respective meanings specified in this Section 1.1. All
other terms used in this Indenture that are defined in the Trust Indenture Act
(as hereinafter defined) or that are by reference defined in the Securities Act
(as hereinafter defined), except as herein otherwise expressly provided for or
unless the context otherwise requires, shall have the meanings assigned to such
terms in said Trust Indenture Act and in said Securities Act as in force on the
date of this Indenture. The words "herein," "hereof," "hereunder" and words of
similar import refer to this Indenture as a whole and not to any particular
Article or Section.
Accredited Investor: The term "Accredited Investor" shall have
the meaning specified in Rule 501(a) under the Securities Act.
Affiliate: An "Affiliate" of any specified person shall mean
an "affiliate" as defined in Rule 144(a) as promulgated under the Securities
Act.
Board of Directors: The term "Board of Directors" shall mean
the Board of Directors of the Company or a committee of such Board of Directors
duly authorized to act for it.
Board Resolution: The term "Board Resolution" shall mean 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.
Business Day: The term "Business Day" shall mean a day, other
than a Saturday, a Sunday or a day on which the banking institutions in
Switzerland are authorized or obligated by law or executive order to close or a
day that is declared a United States or Swiss holiday.
Capital Stock: The term "Capital Stock" of any person shall
mean any and all shares, interests, participations or other equivalents (however
designated) of such person's corporate stock or any and all equivalent ownership
interests in a person (other than a corporation) whether now outstanding or
issued after the date hereof.
Closing Date: The term "Closing Date" shall mean September 30,
1997.
Commission: The term "Commission" shall mean the Securities
and Exchange Commission, as from time to time constituted, created under the
Exchange Act or, if at any time after the execution of this instrument such
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Commission is not existing and performing the duties now assigned to it under
the Trust Indenture Act, the body performing such duties at such time.
Common Stock: The term "Common Stock" shall mean any stock of
any class of the Company that does not have a preference in respect of dividends
or of amounts payable in the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Company and that is not subject to redemption
by the Company. Subject to the provisions of Section 14.6, however, shares
issuable on conversion of Debentures shall include only shares of the class
designated as common stock of the Company at the date of this Indenture or
shares of any class or classes resulting from any reclassification or
reclassifications thereof and that do not have a preference in respect of
dividends or of amounts payable in the event of any voluntary or involuntary
liquidation, dissolution or winding up of the Company and that are not subject
to redemption by the Company; provided that if at any time there shall be more
than one such resulting class, the shares of each such class then so issuable
shall be substantially in the proportion that the total number of shares of such
class resulting from all such reclassification bears to the total number of
shares of all such classes resulting from all such reclassifications.
Company: The term "Company" shall mean Fields Aircraft Spares,
Inc. a Utah corporation, and subject to the provisions of Article XI, shall
include its successors and assigns.
Conversion Price: The term "Conversion Price" shall have the
meaning specified in Section 14.4.
Corporate Trust Office of the Trustee: The term "Corporate
Trust Office of the Trustee," or other similar term, shall mean the office of
the Trustee at which at any particular time its corporate trust business shall
be principally administered, which office is, at the date as of which this
Indenture is dated, located at Gartenstrasse 10, CH-8002, Zurich, Switzerland,
Attention: Dr. Dieter Wicki at which office it is authorized to receive notices
hereunder.
Debenture or Debentures: The terms "Debenture" or "Debentures"
shall mean any one or more, as the case may be, of the 8.5% Subordinated
Redeemable Debentures Due 2000 authenticated and delivered under this Indenture.
Debentureholder; holder: The terms "Debentureholder" or
"holder" as applied to any Debenture, or other similar terms (but excluding the
term "beneficial holder"), shall mean any person in whose name at the time a
particular Debenture is registered on the Debenture registrar's books.
Debenture register: The term "Debenture register" shall have
the meaning specified in Section 2.5(a).
Debenture registrar: The term "Debenture registrar" shall have
the meaning specified in Section 2.5(a).
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default: The term "default" shall mean any event that is, or
after notice or passage of time, or both, would be, an Event of Default.
Defaulted Interest: The term "Defaulted Interest" shall have
the meaning specified in Section 2.3.
definitive Debentures; in definitive form: The term
"definitive Debentures" shall have the meaning specified in Section 2.2, any
reference to Debentures "in definitive form" shall mean definitive Debentures,
and any reference to securities "in definitive form" shall mean definitive
Debentures or Common Stock as the context requires.
Event of Default: The term "Event of Default" shall mean any
event specified in Section 6.1(a) through (e).
Exchange Act: The term "Exchange Act" shall mean the
Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder.
Indenture: The term "Indenture" shall mean this instrument as
originally executed or, if amended or supplemented as herein provided, as so
amended or supplemented.
Interest Payment Date: The term "Interest Payment Date" shall
mean each March 31 and September 30, beginning March 31, 1998.
Inventory: The term "Inventory" shall have the meaning
specified in Section 4.7.
Minimum Proceeds: The term "Minimum Proceeds" shall have the
meaning specified in Section 4.8.
Nonpayment Default: The term "Nonpayment Default" shall have
the meaning specified in Section 15.4(b).
Non-U.S. Person: The term "Non-U.S. Person" shall have the
meaning set forth in Section 2.2.
Officers' Certificate: The term "Officers' Certificate," when
used with respect to the Company, shall mean a certificate signed by two
authorized officers which shall include (a) any of the Chairman, President, the
Chief Executive Officer or the Chief Financial Officer and (b) any Treasurer or
Secretary or any Assistant Secretary of the Company, that is delivered to the
Trustee. Each such certificate shall include the statements provided for in
Section 16.5 if and to the extent required by the provisions of such Section.
Opinion of Counsel: The term "Opinion of Counsel" shall mean
an opinion in writing signed by legal counsel, who may be an employee of or
counsel to the Company or other counsel acceptable to the Trustee, that is
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delivered to the Trustee. Each such opinion shall include the statements
provided for in Section 16.5 if and to the extent required by the provisions of
such Section.
outstanding: The term "outstanding" with reference to
Debentures as of any particular time shall mean, subject to the provisions of
Section 8.4, all Debentures authenticated and delivered by the Trustee under
this Indenture, except
(a) Debentures theretofore canceled by the Trustee or
delivered to the Trustee for cancellation;
(b) Debentures, or portions thereof, for which monies in the
necessary amount shall have been deposited in trust with the Trustee
for payment, redemption or repurchase; provided that if such Debentures
are to be redeemed prior to the maturity thereof, notice of such
redemption shall have been given pursuant to Article III or provision
satisfactory to the Trustee shall have been made for giving such
notice;
(c) Debentures paid or converted pursuant to Section 2.6
hereof or Debentures in lieu of or in substitution for which other
Debentures shall have been authenticated and delivered pursuant to the
terms of Section 2.6 unless proof satisfactory to the Trustee is
presented that any such Debentures are held by bona fide holders in due
course; and
(d) Debentures converted into Common Stock or cash pursuant to
Article XIV and Debentures not deemed outstanding pursuant to Section
3.2 and 3.5.
Paying Agent: The term Paying Agent shall mean Von Graffenreid
AG, its successors and any corporation resulting from or surviving any
consolidation or merger to which it or its successors may be a party and any
successor paying agent at the time serving as successor paying agent hereunder.
Payment Default: The term "Payment Default" shall have the
meaning specified in Section 15.4(a).
person: The term "person" shall mean a corporation, an
association, a partnership, an individual, a joint venture, a joint stock
company, a trust, an unincorporated organization or a government or an agency or
a political subdivision thereof.
Predecessor Debenture: The term "Predecessor Debenture" of any
particular Debenture shall mean every previous Debenture evidencing all or a
portion of the same debt as that evidenced by such particular Debenture; and,
for the purposes of this definition, any Debenture authenticated and delivered
under Section 2.6 in lieu of a lost, destroyed or stolen Debenture shall be
deemed to evidence the same debt as the lost, destroyed or stolen Debenture.
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record date: The term "record date" with respect to any
interest payment date shall have the meaning set forth in Section 2.3 hereof.
Regulation S: The term "Regulation S" shall mean Regulation S
under the Securities Act and any successor regulation thereto.
Responsible Officer: The term "Responsible Officer" with
respect to the Trustee, shall mean an officer of the Trustee assigned and duly
authorized by the Trustee to administer its corporate trust matters.
Restricted Securities: The term "Restricted Securities" shall
have the meaning specified in Section 2.5(b).
Securities Act: The term "Securities Act" shall mean the
Securities Act of 1933, as amended, and the rules and regulations promulgated
thereunder.
Subsidiary: The term "Subsidiary" of any specified person
shall mean (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 such person or (ii) any other person (other than a
corporation) in which such person or such person and a Subsidiary or
Subsidiaries of such person or a Subsidiary or Subsidiaries of such person
directly or indirectly, at the date of determination thereof, has at least
majority ownership.
Successor Company: The term "Successor Company" shall have the
meaning specified in Section 11.1.
Trading Day: The term "Trading Day" shall mean (x) if the
applicable security is quoted on the Nasdaq SmallCap Market, a day on which
trades may be made thereon or (y) 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.
transfer: The term "transfer" shall have the meaning specified
in Section 2.5(c).
Trustee: The term "Trustee" shall mean Etablissement Pour le
Placement Prive its successors and any corporation resulting from or surviving
any consolidation or merger to which it or its successors may be a party and any
successor trustee at the time serving as successor trustee hereunder.
Section 1.2 Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
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(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with generally accepted accounting
principles;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the
plural include the singular; and
(5) provisions apply to successive events and transactions.
ARTICLE II
ISSUE, DESCRIPTION, EXECUTION, REGISTRATION
AND EXCHANGE OF DEBENTURES
Section 2.1 Designation, Amount and Issue of Debentures. The
Debentures shall be designated as "8.5% Subordinated Redeemable Debentures Due
2000." Debentures not to exceed the aggregate principal amount of US$10,000,000
upon the execution of this Indenture, or from time to time thereafter, may be
executed by the Company and delivered to the Trustee for authentication, and the
Trustee shall thereupon authenticate and make available for delivery said
Debentures upon the written order of the Company, signed by its (a) Chairman,
Chief Executive Officer, President or Chief Financial Officer, and (b) any
Treasurer or Secretary or any Assistant Secretary, without any further action by
the Company hereunder.
Section 2.2 Form of Debentures. The Debentures will be offered
and sold to persons outside the United States (each, a "Non-U.S. Person") who
are Accredited Investors in reliance on Regulation S substantially in the form
of Exhibit A hereto, with the legends in substantially the form set forth in
Exhibit A hereto and such other legends as may be applicable thereto. Such
Debentures may not be sold prior to and including the 90th day following the
latest date of original issuance of the Debentures.
Any of the Debentures may have such letters, numbers or other
marks of identification and such notations, legends and endorsements as the
Company officers executing the same may approve (execution thereof to be
conclusive evidence of such approval) and as are not inconsistent with the
provisions of this Indenture, or as may be required to comply with any law or
with any rule or regulation made pursuant thereto or with any rule or regulation
of any stock exchange on which the Debentures may be listed, or to conform to
usage.
The terms and provisions contained in the form of Debenture
attached as Exhibit A hereto shall constitute, and are hereby expressly made, a
part of this Indenture and to the extent applicable, the Company and the
Trustee, by their execution and delivery of this Indenture, expressly agree to
such terms and provisions and to be bound thereby.
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Section 2.3 Date and Denomination of Debentures; Payments of
Interest. The Debentures shall be issuable in registered form only without
coupons in denominations of $1,000 principal amount and integral multiples
thereof. Every Debenture shall be dated the date of its authentication, shall
bear interest from September 30, 1997 and interest shall be payable semiannually
on each March 31 and September 30 commencing March 31, 1998, as specified on the
face of the form of Debenture, attached as Exhibit A hereto.
The person in whose name any Debenture (or its Predecessor
Debenture) is registered at the close of business on any record date with
respect to any interest payment date (including any Debenture that is converted
after the record date and on or before the interest payment date) shall be
entitled to receive the interest payable on such interest payment date
notwithstanding the cancellation of such Debenture upon any transfer, exchange
or conversion subsequent to the record date and prior to such interest payment
date. Interest may, at the option of the Company, be paid by check mailed to the
address of such person as it appears on the Debenture register. The term "record
date" with respect to any interest payment date shall mean the March 15 or
September 30 preceding said March 31 or September 30.
Interest on the Debentures shall be computed on the basis of a
360-day year composed of twelve 30-day months.
Section 2.4 Execution of Debentures. The Debentures shall be
signed in the name and on behalf of the Company by the signature of its
Chairman, Chief Executive Officer, President or Chief Financial Officer and
attested by the signature of its Treasurer, Secretary or any of its Assistant
Secretaries (any of which signatures may be printed, engraved or otherwise
reproduced thereon, by facsimile or otherwise). Only such Debentures as shall
bear thereon a certificate of authentication substantially in the form set forth
on the form of Debenture attached as Exhibit A hereto, manually executed by the
Trustee (or an authenticating agent appointed by the Trustee as provided by
Section 16.9), shall be entitled to the benefits of this Indenture or be valid
or obligatory for any purpose. Such certificate by the Trustee (or such an
authenticating agent) upon any Debenture executed by the Company shall be
conclusive evidence that the Debenture so authenticated has been duly
authenticated and delivered hereunder and that the holder is entitled to the
benefits of this Indenture.
In case any officer of the Company who shall have signed any
of the Debentures shall cease to be such officer before the Debentures so signed
shall have been authenticated and delivered by the Trustee, or disposed of by
the Company, such Debentures nevertheless may be authenticated and delivered or
disposed of as though the person who signed such Debentures had not ceased to be
such officer of the Company; and any Debenture may be signed on behalf of the
Company by such persons as, at the actual date of the execution of such
Debenture, shall be the proper officers of the Company, although at the date of
the execution of this Indenture any such person was not such an officer.
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Section 2.5 Exchange and Registration of Transfer of
Debentures; Restrictions on Transfer.
(a) The Company shall cause to be kept at the Corporate Trust
Office of the Trustee a register (the register maintained in such office and in
any other office or agency of the Company designated pursuant to Section 4.2
being herein sometimes collectively referred to as the "Debenture register") in
which, subject to such reasonable regulations as it may prescribe, the Company
shall provide for the registration of Debentures and of transfers of Debentures.
Such Debenture register shall be in written form or in any form capable of being
converted into written form within a reasonable period of time. The Trustee is
hereby appointed "Debenture registrar" for the purpose of registering Debentures
and transfers of Debentures as herein provided. The Company may appoint one or
more co-registrars.
Upon surrender for registration of transfer of any Debenture
to the Debenture registrar or any co-registrar and satisfaction of the
requirements for such transfer set forth in this Section 2.5, the Company shall
execute, and the Trustee shall authenticate and make available for delivery, in
the name of the designated transferee or transferees, one or more new Debentures
of any authorized denominations and of a like aggregate principal amount and
bearing such legends as may be required by Section 2.5(b).
Debentures may be exchanged for other Debentures of any
authorized denominations and of a like aggregate principal amount, upon
surrender of the Debentures to be exchanged at any such office or agency.
Whenever any Debentures are so surrendered for exchange, the Company shall
execute, and the Trustee shall authenticate and make available for delivery, the
Debentures that the Debentureholder making the exchange is entitled to receive
bearing certificate numbers not contemporaneously outstanding.
All Debentures presented or surrendered for registration of
transfer or for exchange shall (if so required by the Company, the Trustee, the
Debenture registrar or any co-registrar) be duly endorsed, or be accompanied by
a written instrument of transfer in form satisfactory to the Company, executed
by the Debentureholder thereof or his attorney duly authorized in writing.
A reasonable service charge shall be charged to the
Debentureholder for any exchange or registration of transfer of Debentures, and
the Company may require payment of a sum sufficient to cover any tax,
assessments or other governmental charges that may be imposed in connection
therewith.
None of the Company, the Trustee, the Debenture registrar or
any co-registrar shall be required to exchange or register a transfer of (a) any
Debentures for a period of 15 days next preceding the mailing of a notice of
redemption, (b) any Debentures called for redemption or, if a portion of any
Debenture is selected or called for redemption, such portion thereof selected or
called for redemption, (c) any Debentures surrendered for conversion or, if a
portion of any Debenture is surrendered for conversion, such portion thereof
surrendered for conversion.
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All Debentures issued upon any transfer or exchange of
Debentures shall be the valid obligations of the Company, evidencing the same
debt and entitled to the same benefits under this Indenture as the Debentures
surrendered upon such registration of transfer or exchange. All Debentures, the
transfer, exchange and/or registration of which is effectuated by the Trustee
pursuant to this Section 2.5, shall be accompanied by an Officers' Certificate
of the Company, executed by a Responsible Officer thereof, certifying that such
transfer, exchange and/or registration is authorized by the Company and
permitted hereunder.
(b) Every Debenture that bears or is required under this
Section 2.5(b) to bear the legend set forth in this Section 2.5(b) (together
with any Common Stock issued upon conversion of the Debenture and required to
bear the legend set forth in Section 2.5(c), collectively, the "Restricted
Securities") shall be subject to the restrictions on transfer set forth in this
Section 2.5(b), unless such restrictions on transfer shall have been waived by
the written consent of the Company or removed in accordance with the provisions
of Section 2.5(d), and the holder of each such Restricted Security, by such
holder's acceptance thereof, agrees to be bound by such restrictions on
transfer. As used in this Section 2.5(b), the term "transfer" encompasses any
sale, pledge, transfer or other disposition of any Restricted Security.
Any certificate evidencing any Debenture (and all securities
issued in exchange therefor or substitution thereof, other than Common Stock, if
any, issued upon conversion thereof, which shall bear the legend set forth in
Section 2.5(c), if applicable) shall bear a legend in substantially the
following form, unless otherwise agreed by the Company (with notice thereof to
the Trustee):
THE DEBENTURE EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS, AND 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 IN THE FOLLOWING SENTENCE. BY ACQUISITION HEREOF, THE HOLDER
(1) REPRESENTS THAT (A) IT IS AN "ACCREDITED INVESTOR" (AS DEFINED IN
RULE 501(a) UNDER THE SECURITIES ACT) ("ACCREDITED INVESTOR") AND (B)
IT IS NOT A U.S. PERSON AND IS ACQUIRING THE DEBENTURE EVIDENCED HEREBY
IN AN OFFSHORE TRANSACTION; (2) AGREES THAT IT WILL NOT RESELL OR
OTHERWISE TRANSFER THE DEBENTURE EVIDENCED HEREBY OR THE COMMON STOCK
ISSUABLE UPON CONVERSION OF SUCH DEBENTURE EXCEPT (A) TO THE COMPANY OR
ANY SUBSIDIARY THEREOF, (B) TO A QUALIFIED INSTITUTIONAL BUYER IN
COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C) TO AN
ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO
ETABLISSEMENT POUR LE PLACEMENT PRIVE, AS TRUSTEE, A SIGNED LETTER
CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE
RESTRICTIONS ON TRANSFER OF THE DEBENTURE EVIDENCED HEREBY (THE FORM OF
WHICH LETTER CAN BE OBTAINED FROM SUCH TRUSTEE), (D) OUTSIDE
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THE UNITED STATES IN COMPLIANCE WITH RULE 903 OR RULE 904 OF REGULATION
S UNDER THE SECURITIES ACT, (E) PURSUANT TO THE EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF
AVAILABLE) OR (F) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN
DECLARED EFFECTIVE UNDER THE SECURITIES ACT; AND (3) AGREES THAT IT
WILL DELIVER TO EACH PERSON TO WHOM THE DEBENTURE EVIDENCED HEREBY IS
TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN
CONNECTION WITH ANY TRANSFER OF THE DEBENTURE EVIDENCED HEREBY, THE
HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF
RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS CERTIFICATE TO
ETABLISSEMENT POUR LE PLACEMENT PRIVE, AS TRUSTEE. IF THE PROPOSED
TRANSFER IS PURSUANT TO CLAUSE (C), (D) OR (E) ABOVE, THE HOLDER MUST,
PRIOR TO SUCH TRANSFER, FURNISH TO ETABLISSEMENT POUR LE PLACEMENT
PRIVE, AS TRUSTEE, SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER
INFORMATION AS THE COMPANY MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH
TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION,"
"UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY
REGULATION S UNDER THE SECURITIES ACT.
Any Debenture (or security issued in exchange or substitution
therefor) as to which such restrictions on transfer shall have expired in
accordance with their terms may, upon satisfaction of the requirements of
Section 2.5(d) and surrender of such Debenture for exchange to the Debenture
registrar in accordance with the provisions of this Section 2.5, be exchanged
for a new Debenture or Debentures, of like tenor and aggregate principal amount,
which shall not bear the restrictive legend required by this Section 2.5(b).
(c) Any stock certificate representing Common Stock issued
upon conversion of any Debenture shall bear a legend in substantially the
following form, unless otherwise agreed by the Company (with written notice
thereof to the Trustee and any transfer agent for the Common Stock):
THE COMMON STOCK EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE
U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY
STATE SECURITIES LAWS, AND 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 IN THE FOLLOWING SENTENCE. THE HOLDER HEREOF AGREES THAT (1)
IT WILL NOT RESELL OR OTHERWISE TRANSFER THE COMMON STOCK EVIDENCED
HEREBY EXCEPT (A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, (B) TO A
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"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) IN COMPLIANCE WITH RULE 144A, (C) TO AN "ACCREDITED
INVESTOR" (AS DEFINED IN RULE 501(a) UNDER THE SECURITIES ACT) THAT
PRIOR TO SUCH TRANSFER, FURNISHES TO THE COMPANY'S TRANSFER AGENT FOR
ITS COMMON STOCK, A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS
AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THE COMMON
STOCK EVIDENCED HEREBY (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM
SUCH TRANSFER AGENT), (D) OUTSIDE THE UNITED STATES IN COMPLIANCE WITH
RULE 903 OR 904 OF REGULATION S UNDER THE SECURITIES ACT, (E) PURSUANT
TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE
SECURITIES ACT (IF AVAILABLE) OR (F) PURSUANT TO A REGISTRATION
STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT;
(2) PRIOR TO ANY SUCH TRANSFER PURSUANT TO CLAUSE (C), (D) OR (E)
ABOVE, IT WILL FURNISH TO THE COMPANY'S TRANSFER AGENT FOR COMMON
STOCK, SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS THE
COMPANY MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING
MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT; AND (3) IT WILL
DELIVER TO EACH PERSON TO WHOM THE COMMON STOCK EVIDENCED HEREBY IS
TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. THIS
LEGEND WILL BE REMOVED UPON THE SATISFACTION OF THE TRANSFER AGENT THAT
THE COMMON STOCK EVIDENCED HEREBY HAS BEEN OR IS BEING OFFERED AND SOLD
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR IN ACCORDANCE WITH
RULE 144 OR RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES
ACT. AS USED HEREIN, THE TERMS "UNITED STATES" AND "U.S. PERSON" HAVE
THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.
Any such Common Stock as to which such restrictions on
transfer shall have expired in accordance with their terms may, upon
satisfaction of the requirements of Section 2.5(d) and surrender of the
certificates representing such shares of Common Stock for exchange in accordance
with the procedures of the transfer agent for the Common Stock, be exchanged for
a new certificate or certificates for a like aggregate number of shares of
Common Stock, which shall not bear the restrictive legend required by this
Section 2.5(c).
(d) Upon any sale or transfer of any Restricted Security (i)
that is effected pursuant to an effective registration statement under the
Securities Act, (ii) that is effected pursuant to Rule 144 as promulgated under
the Securities Act as determined by counsel to the Company or (iii) in
connection with which the Trustee (or transfer agent for the Common Stock, in
the case of shares of Common Stock) receives certificates and other information
(including an opinion of counsel, if requested) reasonably acceptable to the
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Company to the effect that such security shall no longer be subject to the
resale restrictions under federal and state securities laws, then the Debenture
registrar or co-registrar (or transfer agent, in the case of Common Stock) shall
permit the holder thereof to exchange such Restricted Security for a security
that does not bear the legends set forth in Section 2.5(b) or 2.5(c), as
applicable, and shall rescind any such restrictions on transfer. In addition,
any Debenture (or security issued in exchange or substitution therefor) or
shares of Common Stock issued upon conversion of any Debenture, in either case,
as to which the restrictions on transfer described in the legends set forth in
Section 2.5(b) and 2.5(c), respectively, have expired by their terms, may, upon
surrender thereof (in accordance with the terms of this Indenture in the case of
Debentures) together with such certifications and other information (including
an opinion of counsel having substantial experience in practice under the
Securities Act and otherwise reasonably acceptable to the Company, addressed to
the Company and the Trustee and in a form acceptable to the Company, to the
effect that the transfer of such Restricted Security has been made in compliance
with Rule 144 or such successor provision) acceptable to the Company be
exchanged for a new Debenture or Debentures of like tenor and aggregate
principal amount (in the case of Debentures), or a new certificate or
certificates for a like aggregate number of shares of Common Stock (in the case
of Common Stock), or a new certificate or other instrument of like tenor and
amount (in the case of securities issued in exchange or substitution for
Debentures), which shall not bear the restrictive legends set forth in Sections
2.5(b) and 2.5(c).
(e) Each holder or former holder of a Debenture agrees to
indemnify the Company and the Trustee against any liability that may result from
the transfer, exchange or assignment of such holder's or former holder's
Debenture in violation of any provision of this Indenture and/or applicable U.S.
federal or state securities law.
Section 2.6 Mutilated, Destroyed, Lost or Stolen Debentures.
In case any Debenture shall become mutilated or be destroyed, lost or stolen,
the Company in its discretion may execute, and upon its request, the Trustee or
an authenticating agent appointed by the Trustee shall authenticate and make
available for delivery a new Debenture bearing a number not contemporaneously
outstanding in exchange and substitution for the mutilated Debenture or in lieu
of and in substitution for the Debenture so destroyed, lost or stolen. The
Company may charge such applicant for the expenses of the Company in replacing a
Debenture. In every case the applicant for a substituted Debenture shall furnish
to the Company, to the Trustee and, if applicable, to such authenticating agent
such security or indemnity as may be required by them to save each of them
harmless from any loss, liability, cost or expense caused by or connected with
such substitution, and in every case of destruction, loss or theft, the
applicant shall also furnish to the Company, to the Trustee and, if applicable,
to such authenticating agent evidence to their satisfaction of the destruction,
loss or theft of such Debenture and of the ownership thereof.
The Trustee or such authenticating agent may authenticate any
such substituted Debenture and deliver the same upon the receipt of such
security or indemnity as the Trustee, the Company and, if applicable, such
authenticating agent may require. Upon the issuance of any substituted
Debenture, the Company may require the payment of a sum sufficient to cover any
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tax or other governmental charge that may be imposed in relation thereto and any
other expenses connected therewith. In case any Debenture that has matured or is
about to mature or has been called for redemption or is about to be repurchased
or converted into Common Stock or cash shall become mutilated or be destroyed,
lost or stolen, the Company may, instead of issuing a substitute Debenture, pay
or authorize the payment of or convert or authorize the conversion of the same
(without surrender thereof, except in the case of a mutilated Debenture), as the
case may be, if the applicant for such payment or conversion shall furnish to
the Company, to the Trustee and, if applicable, to such authenticating agent
such security or indemnity as may be required by them to save each of them
harmless from any loss, liability, cost or expense caused by or connected with
such substitution, and in case of destruction, loss or theft, evidence
satisfactory to the Company, the Trustee and, if applicable, any paying agent or
conversion agent of the destruction, loss or theft of such Debenture and of the
ownership thereof.
Every substitute Debenture issued pursuant to the provisions
of this Section 2.6 in lieu of any Debenture that is destroyed, lost or stolen
shall constitute an additional contractual obligation of the Company, whether or
not the destroyed, lost or stolen Debenture shall be enforceable by anyone, and
shall be entitled to all the benefits of (but shall be subject to all the
limitations set forth in) this Indenture equally and proportionately with any
and all other Debentures duly issued hereunder. To the extent permitted by law,
all Debentures shall be held and owned upon the express condition that the
foregoing provisions are exclusive with respect to the replacement or payment or
conversion of mutilated, destroyed, lost or stolen Debentures and shall preclude
any and all other rights or remedies notwithstanding any law or statute existing
or hereafter enacted to the contrary with respect to the replacement or payment
or conversion of negotiable instruments or other securities without their
surrender.
Section 2.7 Temporary Debentures. Pending the preparation of
definitive Debentures, the Company may execute and the Trustee or an
authenticating agent appointed by the Trustee shall, upon written request of the
Company, authenticate and make available for delivery temporary Debentures
(printed or lithographed). Temporary Debentures shall be issuable in any
authorized denomination and shall be substantially in the form of the definitive
Debentures but with such omissions, insertions and variations as may be
appropriate for temporary Debentures, all as may be determined by the Company.
Every such temporary Debenture shall be executed by the Company and
authenticated by the Trustee or such authenticating agent upon the same
conditions and in substantially the same manner, and with the same effect, as
the definitive Debentures. Without unreasonable delay the Company shall execute
and deliver to the Trustee or such authenticating agent definitive Debentures
and thereupon any or all temporary Debentures may be surrendered in exchange
therefor, at each office or agency maintained by the Company pursuant to Section
4.2 and the Trustee or such authenticating agent shall authenticate and make
available for delivery in exchange for such temporary Debentures an equal
aggregate principal amount of definitive Debentures. Such exchange shall be made
by the Company at its own expense and without any charge therefor. Until so
exchanged, the temporary Debentures shall in all respects be entitled to the
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same benefits and subject to the same limitations under this Indenture as
definitive Debentures authenticated and delivered hereunder.
Section 2.8 Cancellation of Debentures Paid, Etc. All
Debentures surrendered for the purpose of payment, redemption, repurchase,
conversion, exchange or registration of transfer shall, if surrendered to the
Company or any paying agent or any Debenture registrar or any conversion agent,
be surrendered to the Trustee and promptly canceled by it or, if surrendered to
the Trustee, shall be promptly canceled by it and no Debentures shall be issued
in lieu thereof except as expressly permitted by any of the provisions of this
Indenture. If required by the Company, the Trustee shall return canceled
Debentures to the Company. If the Company shall acquire any of the Debentures,
such acquisition shall not operate as a redemption or satisfaction of the
indebtedness represented by such Debentures unless and until the same are
delivered to the Trustee for cancellation.
Section 2.9 CUSIP Numbers. The Company in issuing the
Debentures may use "CUSIP" numbers (if then generally in use), and, if so, the
Trustee shall use CUSIP numbers in notices of redemption as a convenience to
holders; provided that any such notice may state that no representation is made
as to the correctness of such numbers either as printed on the Debentures or as
contained in any notice of a redemption and that reliance may be placed only on
the other identification numbers printed on the Debentures, and any such
redemption shall not be affected by any defect in or omission of such numbers.
The Company shall promptly notify the Trustee of any change in the CUSIP
numbers.
ARTICLE III
REDEMPTION AND REPURCHASE OF DEBENTURES
Section 3.1 Redemption Prices. The Debentures are not
redeemable at the option of the Company prior to March 31, 1999. At any time on
or after that date, the Debentures may be redeemed at the Company's option, upon
notice as set forth in Section 3.2, in whole at any time or in part from time to
time, at 100% plus accrued and unpaid interest thereon to the applicable
redemption date.
Section 3.2 Notice of Redemption; Selection of Debentures. In
case the Company shall desire to exercise the right to redeem all or, as the
case may be, any part of the Debentures pursuant to Section 3.1, it shall fix a
date for redemption and, in the case of any redemption pursuant to Section 3.1,
it or, at its written request accompanied by the proposed form of notice of
redemption (which must be received by the Trustee at least ten days prior to the
date the Trustee is requested to give notice as described below, unless a
shorter period is agreed to by the Trustee), the Trustee in the name of and at
the expense of the Company, shall mail or cause to be mailed a notice of such
redemption at least 30 and not more than 60 days prior to the date fixed for
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redemption to the holders of Debentures so to be redeemed as a whole or in part
at their last addresses as the same appear on the Debenture register, provided
that subject to the approval of the form of notice by the Trustee if the Company
shall give such notice, it shall also give such notice, and notice of the
Debentures to be redeemed, to the Trustee. Such mailing shall be by first class
mail. The notice, if mailed in the manner herein provided, shall be conclusively
presumed to have been duly given, whether or not the holder receives such
notice. In any case, failure to give such notice by mail or any defect in the
notice to the holder of any Debenture designated for redemption as a whole or in
part shall not affect the validity of the proceedings for the redemption of any
other Debenture.
Each such notice of redemption shall identify the Debentures
to be redeemed (including CUSIP numbers), specify the aggregate principal amount
of Debentures to be redeemed, the date fixed for redemption, the redemption
price at which Debentures are to be redeemed, the place or places of payment,
that payment shall be made upon presentation and surrender of such Debentures,
that interest accrued to the date fixed for redemption shall be paid as
specified in said notice and that on and after said date, interest thereon or on
the portion thereof to be redeemed shall cease to accrue. Such notice shall also
state the current Conversion Price and the date on which the right to convert
such Debentures or portions thereof into Common Stock shall expire. If fewer
than all the Debentures are to be redeemed, the notice of redemption shall
identify the Debentures to be redeemed. In case any Debenture is to be redeemed
in part only, the notice of redemption shall state the portion of the principal
amount thereof to be redeemed and shall state that on and after the date fixed
for redemption, upon surrender of such Debenture, a new Debenture or Debentures
in principal amount equal to the unredeemed portion thereof shall be issued.
On or prior to the Business Day prior to the redemption date
specified in the notice of redemption given as provided in this Section 3.2, the
Company shall deposit with the Trustee or with one or more paying agents (or, if
the Company is acting as its own paying agent, set aside, segregate and hold in
trust as provided in Section 4.4) an amount of money sufficient to redeem on the
redemption date all the Debentures so called for redemption (other than those
theretofore surrendered for conversion into Common Stock or cash) at the
appropriate redemption price, together with accrued interest to the date fixed
for redemption. If any Debenture called for redemption is converted pursuant
hereto, any money deposited with the Trustee or any paying agent or so
segregated and held in trust for the redemption of such Debenture shall be paid
to the Company upon its written request or, if then held by the Company, shall
be discharged from such trust. If fewer than all the Debentures are to be
redeemed, the Company shall give the Trustee written notice in the form of an
Officers' Certificate not fewer than 45 days (or such shorter period of time as
may be acceptable to the Trustee) prior to the redemption date as to the
aggregate principal amount of Debentures to be redeemed.
If fewer than all the Debentures are to be redeemed, the
Trustee shall select the Debentures or portions thereof to be redeemed (in
principal amounts of $1,000 or integral multiples thereof), by lot or, in its
discretion, on a pro rata basis. If any Debenture selected for partial
redemption is converted in part after such selection, the converted portion of
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such Debenture shall be deemed (so far as may be) to be the portion to be
selected for redemption. The Debentures (or portions thereof) so selected shall
be deemed duly selected for redemption for all purposes hereof, notwithstanding
that any such Debenture is converted as a whole or in part before the mailing of
the notice of redemption.
Upon any redemption of less than all Debentures, the Company
and the Trustee may treat as outstanding any Debentures surrendered for
conversion during the period of 15 days next preceding the mailing of a notice
of redemption and need not treat as outstanding any Debenture authenticated and
delivered during such period in exchange for the unconverted portion of any
Debenture converted in part during such period.
Section 3.3 Payment of Debentures Called for Redemption. If
notice of redemption has been given as above provided, the Debentures or portion
of Debentures with respect to which such notice has been given shall, unless
converted into Common Stock pursuant to the terms hereof, become due and payable
on the date and at the place or places stated in such notice at the applicable
redemption price, together with interest thereon accrued to the date fixed for
redemption, and on and after said date (unless the Company shall default in the
payment of such Debentures at the redemption price, together with interest
thereon accrued to said date), interest on the Debentures or portion of
Debentures so called for redemption shall cease to accrue, and such Debentures
shall cease after the close of business on the Business Day next preceding the
date fixed for redemption to be convertible into Common Stock or cash and,
except as provided in Sections 7.5 and 12.4, to be entitled to any benefit or
security under this Indenture, and the holders thereof shall have no right in
respect of such Debentures except the right to receive the redemption price
thereof and unpaid interest thereon to the date fixed for redemption. On
presentation and surrender of such Debentures at a place of payment in said
notice specified, the said Debentures or the specified portions thereof shall be
paid and redeemed by the Company at the applicable redemption price, together
with interest accrued thereon to the date fixed for redemption; provided that
any semi-annual payment of interest becoming due on the date fixed for
redemption shall be payable to the holders of such Debentures registered as such
on the relevant record date subject to the terms and provisions of Section 2.3
hereof.
Upon presentation of any Debenture redeemed in part only, the
Company shall execute and the Trustee shall authenticate and make available for
delivery to the holder thereof, at the expense of the Company, a new Debenture
or Debentures, of authorized denominations, in principal amount equal to the
unredeemed portion of the Debentures so presented.
If any Debenture called for redemption shall not be so paid
upon surrender thereof for redemption, the principal and premium, if any, shall,
until paid or duly provided for, bear interest from the date fixed for
redemption at the rate borne by the Debenture and such Debenture shall remain
convertible into Common Stock until the principal and premium, if any, shall
have been paid or duly provided for.
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ARTICLE IV
PARTICULAR COVENANTS OF THE COMPANY
Section 4.1 Payment of Principal, Premium and Interest. The
Company covenants and agrees that it shall duly and punctually pay or cause to
be paid the principal of and premium, if any, and interest on each of the
Debentures at the places, at the respective times and in the manner provided
herein and in the Debentures. Each installment of interest on the Debentures due
on any semi-annual interest payment date may be paid by mailing checks for the
interest payable to or upon the written order of the holders of Debentures
entitled thereto as they shall appear on the Debenture register. An installment
of principal or interest shall be considered paid on the date due if the Trustee
or paying agent (other than the Company, a Subsidiary of the Company or any
Affiliate of any of them) holds on that date money designated for and sufficient
to pay the installment of principal or interest and is not prohibited from
paying such money to the holders of the Debentures pursuant to the terms of this
Indenture.
Section 4.2 Maintenance of Office or Agency. The Company shall
maintain an office or agency where the Debentures may be surrendered for
registration of transfer or exchange or for presentation for payment or for
conversion, redemption or repurchase and where notices and demands to or upon
the Company in respect of the Debentures and this Indenture may be served. The
Company shall 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 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 Debentures may be presented or surrendered
for any or all such purposes and may from time to time rescind such
designations. The Company shall 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 initially designates Von Graffenreid AG as
paying agent and the Trustee as Debenture registrar and conversion agent and the
offices of the Trustee in Zurich, Switzerland or the office of the Paying Agent
located in Berne, Switzerland as offices or agencies of the Company for the
purposes set forth in this Section 4.2.
So long as the Trustee is the Debenture registrar, the Trustee
agrees to mail, or cause to be mailed, the notices set forth in Section 7.8(a).
Section 4.3 Appointments to Fill Vacancies in Trustee's
Office. The Company, whenever necessary to avoid or fill a vacancy in the office
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of Trustee, shall appoint, in the manner provided in Section 7.8, a Trustee, so
that there shall at all times be a Trustee hereunder.
Section 4.4 Provisions as to Paying Agent.
(a) The Paying Agent agrees subject to the provisions of this
Section 4.4:
(1) that it shall hold all sums held by it as such agent for
the payment of the principal of, premium, if any, or interest on the
Debentures (whether such sums have been paid to it by the Company or by
any other obligor on the Debentures) in trust for the benefit of the
holders of the Debentures;
(2) that it shall give the Trustee written notice of any
failure by the Company (or by any other obligor on the Debentures) to
make any payment of the principal of, premium, if any, or interest on
the Debentures when the same shall be due and payable; and
(3) that at any time during the continuance of an Event of
Default, upon request of the Trustee, it shall forthwith pay to the
Trustee all sums so held in trust.
The Company shall, before each due date of the principal of,
premium, if any, or interest on the Debentures, deposit with the Paying Agent a
sum sufficient to pay such principal, premium, if any, or interest, and (unless
such paying agent is the Trustee) the Company shall promptly notify the Trustee
of any failure to take such action.
(b) If the Company shall act as its own paying agent, it
shall, on or before each due date of the principal of, premium, if any, or
interest on the Debentures, set aside, segregate and hold in trust for the
benefit of the holders of the Debentures a sum sufficient to pay such principal,
premium, if any, or interest so becoming due and shall notify the Trustee of any
failure to take such action and of any failure by the Company (or any other
obligor under the Debentures) to make any payment of the principal of, premium,
if any, or interest on the Debentures when the same shall become due and
payable.
(c) Anything in this Section 4.4 to the contrary
notwithstanding, the Company may, at any time, for the purpose of obtaining a
satisfaction and discharge of this Indenture, or for any other reason, pay or
cause to be paid to the Trustee all sums held in trust by the Company or any
paying agent hereunder as required by this Section 4.4, such sums to be held by
the Trustee upon the trusts herein contained and upon such payment by the
Company or any paying agent to the Trustee, the Company or such paying agent
shall be released from all further liability with respect to such sums.
(d) Anything in this Section 4.4 to the contrary
notwithstanding, the agreement to hold sums in trust as provided in this Section
4.4 is subject to Sections 12.3 and 12.4.
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Section 4.5 Corporate Existence. Subject to Article XI, the
Company shall do or cause to be done all things necessary to preserve and keep
in full force and effect (i) its corporate existence, and the corporate,
partnership or other existence of any Subsidiary of the Company, in accordance
with the respective organizational documents (as the same may be amended from
time to time) of the Company or any such Subsidiary and (ii) the rights (charter
and statutory), licenses and franchises of the Company and its Subsidiaries;
provided that the Company shall not be required to preserve any such right,
license or franchise, or the corporate, partnership or other existence of any of
its Subsidiaries if the Board of Directors shall determine that the preservation
thereof is no longer desirable in the conduct of the business of the Company and
its Subsidiaries, taken as a whole, and that the loss thereof is not materially
adverse to the holders of the Debentures.
Section 4.6 Stay, Extension and Usury Laws. The Company
covenants (to the extent that it may lawfully do so) that it shall not at any
time insist upon, plead or in any manner whatsoever claim or take the benefit or
advantage of, any stay, extension or usury law or other law that would prohibit
or forgive the Company from paying all or any portion of the principal of or
interest on the Debentures as contemplated herein, wherever enacted, now or at
any time hereafter in force, or that may affect the covenants or the performance
of this Indenture; and the Company (to the extent it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and covenants that it
shall not, by resort to any such law, hinder, delay or impede the execution of
any power herein granted to the Trustee, but shall suffer and permit the
execution of every such power as though no such law has been enacted.
Section 4.7 Sale of Inventory. In the event the Company or its
subsidiary, in a bulk sale transaction, sells its entire existing inventory of
spare parts purchased from Douglas Aircraft Corporation pursuant to contract
numbers DAC 88-28-D, DAC 91-03-P and DAC 91- 04-P (the "Inventory"), the Company
shall deposit, within 90 days of such sale, in an account specified by the
Trustee, 50% of the net proceeds of such sale, after deducting all amounts paid
or payable to any lender having a security interest in such inventory
(regardless of the amount of loan secured by the Inventory), and all costs,
expenses and taxes of the Company, incurred in any way in connection with the
sale, provided that 50% of such net proceeds exceeds $300,000 (the "Minimum
Proceeds").
The Company shall give written notice to the Trustee and each
Debentureholder of the sale of Inventory resulting in the receipt by the Company
of the Minimum Proceeds, by first-class mail, postage prepaid, at the
Debentureholder's address appearing in the Debenture registrar, within 45 days
of the sale, stating, among other things, that (i) a sale of Inventory has
occurred and (ii) 50% of the amount of such net proceeds will be used to redeem
the Debentures at 100% of their principal amount, plus accrued interest to the
redemption date, on a pro rata basis in accordance with Article III, unless at
least 66 2/3% of the Debentureholders consent (evidenced as provided in Article
VIII), within 30 days of such notice to allow the Company to retain the proceeds
for working capital purposes.
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ARTICLE V
DEBENTUREHOLDERS' LISTS
Section 5.1 Debentureholders' 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 of Debentures. If the
Trustee is not the Debenture registrar, the Company shall furnish to the Trustee
and Paying Agent on or before at least seven Business Days preceding 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 reasonably may
require of the names and addresses of holders of Debentures.
ARTICLE VI
DEFAULTS AND REMEDIES
Section 6.1 Events of Default. In case one or more of the
following Events of Default (whatever the reason for such Event of Default and
whether it shall be voluntary or involuntary or be effected by operation of law
or pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body) shall have occurred and
be continuing:
(a) default in the payment of the principal of or premium, if
any, on the Debentures when due at maturity, upon redemption or
otherwise (whether or not such payment shall be prohibited by Article
XV of this Indenture), and continuance of such default for a period of
60 days; or
(b) default in the payment of any installment of interest on
the Debentures as and when the same shall become due and payable
(whether or not such payment shall be prohibited by Article XV of this
Indenture), and continuance of such default for a period of 60 days; or
(c) a failure on the part of the Company to duly observe or
perform any other covenants or agreements on the part of the Company in
this Indenture (other than a default in the performance or breach of a
covenant or agreement that is specifically dealt with elsewhere in this
Section 6.1) that continues for a period of 90 days after the date on
which written notice of such failure, requiring the Company to remedy
the same, shall have been given to the Company by the Trustee, or to
the Company and a Responsible Officer of the Trustee, by the holders of
at least 25% in aggregate principal amount of the Debentures at the
time outstanding determined in accordance with Section 8.4; or
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(d) the Company shall commence a voluntary case or other
proceeding seeking liquidation, reorganization or other relief with
respect to itself or its debts under any bankruptcy, insolvency or
other similar law now or hereafter in effect, or seeking the
appointment of a trustee, receiver, liquidator, custodian or other
similar official of it or any substantial part of its property, or
shall consent to any such relief or to the appointment of or taking
possession by any such official in an involuntary case or other
proceeding commenced against it or shall make a general assignment for
the benefit of creditors or shall fail generally to pay its debts as
they become due; or
(e) an involuntary case or other proceeding shall be commenced
against the Company seeking liquidation, reorganization or other relief
with respect to it or its debts under any bankruptcy, insolvency or
other similar law now or hereafter in effect or seeking the appointment
of a trustee, receiver, liquidator, custodian or other similar official
of it or any substantial part of its property, and such involuntary
case or other proceeding shall remain undismissed and unstayed for a
period of 60 consecutive days;
then, and in each and every such case (other than an Event of Default specified
in Section 6.1(d) or (e)), unless the principal of all of the Debentures shall
have already become due and payable, either the Trustee or the holders of not
less than 25% in aggregate principal amount of the Debentures then outstanding
hereunder determined in accordance with Section 8.4, by notice in writing to the
Company (and to the Trustee if given by Debentureholders), may declare the
principal of, premium, if any, on the Debentures and the interest accrued
thereon to be due and payable immediately, and upon any such declaration the
same shall become and shall be immediately due and payable, anything in this
Indenture or in the Debentures contained to the contrary notwithstanding. If an
Event of Default specified in Section 6.1(d) or (e) occurs and is continuing,
the principal of all the Debentures and the interest accrued thereon shall be
immediately due and payable. The foregoing provision is subject to the
conditions that if, at any time after the principal of the Debentures shall have
been so declared due and payable, and before any judgment or decree for the
payment of the monies due shall have been obtained or entered as hereinafter
provided, the Company shall pay or shall deposit with the Trustee a sum
sufficient to pay all matured installments of interest upon all Debentures and
the principal of and premium, if any, on any and all Debentures that shall have
become due otherwise than by acceleration (with interest on overdue installments
of interest (to the extent that payment of such interest is enforceable under
applicable law) and on such principal and premium, if any, at the rate borne by
the Debentures, to the date of such payment or deposit) and amounts due to the
Trustee pursuant to Section 7.6, and if any and all defaults under this
Indenture, other than the nonpayment of principal of, premium, if any, and
accrued interest on Debentures that shall have become due by acceleration, shall
have been cured or waived pursuant to Section 6.7, then and in every such case
the holders of a majority in aggregate principal amount of the Debentures then
outstanding, by written notice to the Company and to the Trustee, may waive all
defaults or Events of Default and rescind and annul such declaration and its
consequences; but no such waiver or rescission and annulment shall extend to or
shall affect any subsequent default or Event of Default, or shall impair any
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right consequent thereto. The Company shall notify a Responsible Officer of the
Trustee, promptly upon becoming aware thereof, of any Event of Default.
In case the Trustee shall have proceeded to enforce any right
under this Indenture and such proceedings shall have been discontinued or
abandoned because of such waiver or rescission and annulment or for any other
reason or shall have been determined adversely to the Trustee, then and in every
such case the Company, the holders of Debentures and the Trustee shall be
restored respectively to their several positions and rights hereunder, and all
rights, remedies and powers of the Company, the holders of Debentures and the
Trustee shall continue as though no such proceeding had been taken.
Section 6.2 Payments of Debentures on Default; Suit Therefor.
The Company covenants that (a) in case a default shall be made in the payment of
any installment of interest upon any of the Debentures as and when the same
shall become due and payable, and such default shall have continued for a period
of 60 days, or (b) in case default shall be made in the payment of the principal
of or premium, if any, on any of the Debentures as and when the same shall have
become due and payable, whether at maturity of the Debentures or in connection
with any redemption or repurchase, by declaration or otherwise, and such default
shall have continued for a period of 60 days, then, upon demand of the Trustee,
the Company shall pay to the Trustee, for the benefit of the holders of the
Debentures, the whole amount that then shall have become due and payable on all
such Debentures for principal of, premium, if any, or interest, or both, as the
case may be, with interest upon the overdue principal, premium, if any, and (to
the extent that payment of such interest is enforceable under applicable law)
upon the overdue installments of interest at the rate borne by the Debentures;
and, in addition thereto, such further amount as shall be sufficient to cover
the costs and expenses of collection, including reasonable compensation to the
Trustee, its agents, attorneys and counsel, and any expenses or liabilities
incurred by the Trustee hereunder other than through its negligence or bad
faith. Until such demand by the Trustee, the Company may pay the principal of
and premium, if any, and interest on the Debentures to the registered holders,
whether or not the Debentures are overdue.
In case the Company shall fail forthwith to pay such amounts
upon such demand, the Trustee, in its own name and as trustee of an express
trust, shall be entitled and empowered to institute any actions or proceedings
at law or in equity for the collection of the sums so due and unpaid and may
prosecute any such action or proceeding to judgment or final decree, and may
enforce any such judgment or final decree against the Company or any other
obligor on the Debentures and collect in the manner provided by law out of the
property of the Company or any other obligor on the Debentures wherever situated
the monies adjudged or decreed to be payable.
In case there shall be pending proceedings for the bankruptcy
or for the reorganization of the Company or any other obligor on the Debentures
under Title 11 of the United States Code or any other applicable law, or in case
a receiver, assignee or trustee in bankruptcy or reorganization, liquidator,
sequestrator or similar official shall have been appointed for or taken
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possession of the Company or such other obligor, the property of the Company or
such other obligor, or in the case of any other judicial proceedings relative to
the Company or such other obligor upon the Debentures, or to the creditors or
property of the Company or such other obligor, the Trustee, irrespective of
whether the principal of the Debentures shall then be due and payable as therein
expressed or by declaration or otherwise and irrespective of whether the Trustee
shall have made any demand pursuant to the provisions of this Section 6.2, shall
be entitled and empowered, by intervention in such proceedings or otherwise, to
file and prove a claim or claims for the whole amount of principal, premium, if
any, and interest owing and unpaid in respect of the Debentures and, in case of
any judicial proceedings, to file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee and of the Debentureholders allowed in such judicial proceedings
relative to the Company or any other obligor on the Debentures, its or their
creditors, or its or their property and to collect and receive any monies or
other property payable or deliverable on any such claims and to distribute the
same after the deduction of any amounts due the Trustee under Section 7.6; and
any receiver, assignee or trustee in bankruptcy or reorganization, liquidator,
custodian or similar official is hereby authorized by each of the
Debentureholders to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the
Debentureholders, to pay to the Trustee any amount due it for reasonable
compensation, expenses, advances and disbursements, including counsel fees
incurred by it up to the date of such distribution. To the extent that such
payment of reasonable compensation, expenses, advances and disbursements out of
the estate in any such proceedings shall be denied for any reason, payment of
the same shall be secured by a lien on, and shall be paid out of, any and all
distributions, dividends, monies, securities and other property that the holders
of the Debentures may be entitled to receive in such proceedings, whether in
liquidation or under any plan of reorganization or arrangement or otherwise.
Nothing herein contained shall be deemed to authorize the
Trustee to authorize or consent to or adopt on behalf of any Debentureholder any
plan of reorganization or arrangement affecting the Debentures or the rights of
any Debentureholder, or to authorize the Trustee to vote in respect of the claim
of any Debentureholder in any such proceeding.
All rights of action and of asserting claims under this
Indenture, or under any of the Debentures, may be enforced by the Trustee
without the possession of any of the Debentures or the production thereof on any
trial or other proceeding relative thereto, and any such suit or proceeding
instituted by the Trustee shall be brought in its own name as trustee of an
express trust, and any recovery of judgment shall, after provision for the
payment of the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel, be for the ratable benefit of the holders
of the Debentures.
In any proceedings brought by the Trustee pursuant to this
Indenture or any supplement hereto (and in any proceedings involving the
interpretation of any provision of this Indenture to which the Trustee shall be
a party), the Trustee shall be held to represent all the holders of the
Debentures, and it shall not be necessary to make any holders of the Debentures
parties to any such proceedings.
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Section 6.3 Application of Monies Collected by Trustee. Any
monies collected by the Trustee pursuant to this Article VI shall be applied in
the order following, at the date or dates fixed by the Trustee for the
distribution of such monies, upon presentation of the several Debentures and
stamping thereon the payment, if only partially paid, and upon surrender
thereof, if fully paid:
First: To the payment of all amounts due the Trustee under
Section 7.6;
Second: Subject to the provisions of Article XV, in case the
principal of the outstanding Debentures shall not have become due and
be unpaid, to the payment of interest on the Debentures in default in
the order of the maturity of the installments of such interest, with
interest (to the extent that such interest has been collected by the
Trustee) upon the overdue installments of interest at the rate borne by
the Debentures, such payments to be made ratably to the persons
entitled thereto; and
Third: Subject to the provisions of Article XV, in case the
principal of the outstanding Debentures shall have become due, by
declaration or otherwise, and be unpaid, to the payment of the whole
amount then holding and unpaid upon the Debentures for principal,
premium, if any, and interest, with interest on the overdue principal
and premium, if any, and (to the extent that such interest has been
collected by the Trustee) upon overdue installments of interest at the
rate borne by the Debentures; and in case such monies shall be
insufficient to pay in full the whole amounts so due and unpaid upon
the Debentures, then to the payment of such principal, premium, if any,
and interest without preference or priority of principal and premium,
if any, over interest, or of interest over principal and premium, if
any, or of any installment of interest over any other installment of
interest, or of any Debenture over any other Debenture, ratably to the
aggregate of such principal and premium, if any, and accrued and unpaid
interest.
Section 6.4 Proceedings by Debentureholder. No holder of any
Debenture shall have any right by virtue of or by availing of any provision of
this Indenture to institute any suit, action or proceeding in equity or at law
upon or under or with respect to this Indenture, or for the appointment of a
receiver, trustee, liquidator, custodian or other similar official, or for any
other remedy hereunder, unless such holder previously shall have given to the
Trustee written notice of an Event of Default and of the continuance thereof, as
hereinbefore provided, and unless also the holders of not less than 25% in
aggregate principal amount of the Debentures then outstanding shall have made
written request upon the Trustee to institute such action, suit or proceeding in
its own name as Trustee hereunder and shall have offered to the Trustee such
reasonable indemnity as it may require against the costs, expenses and
liabilities to be incurred therein or thereby, and the Trustee for 60 days after
its receipt of such notice, request and offer of indemnity, shall have neglected
or refused to institute any such action, suit or proceeding, and no direction
inconsistent with such written request shall have been given to the Trustee
pursuant to Section 6.7; it being understood and intended, and being expressly
covenanted by the taker and holder of every Debenture with every other taker and
holder and the Trustee, that no one or more holders of Debentures shall have any
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right in any manner whatever by virtue of or by availing of any provision of
this Indenture to affect, disturb or prejudice the rights of any other holder of
Debentures, to obtain or seek to obtain priority over or preference to any other
such holder or to enforce any right under this Indenture, except in the manner
herein provided and for the equal, ratable and common benefit of all holders of
Debentures (except as otherwise provided herein). For the protection and
enforcement of this Section 6.4, each and every Debentureholder and the Trustee
shall be entitled to such relief as can be given either at law or in equity.
Notwithstanding any other provision of this Indenture and any
provision of any Debenture, the right of any holder of any Debenture to receive
payment of the principal of, premium, if any, and interest on such Debenture, on
or after the respective due dates expressed in such Debenture, or to institute
suit for the enforcement of any such payment on or after such respective dates
against the Company shall not be impaired or affected without the consent of
such holder except as otherwise set forth herein.
Anything in this Indenture or the Debentures to the contrary
notwithstanding, the holder of any Debenture, without the consent of either the
Trustee or the holder of any other Debenture, in his own behalf and for his own
benefit, may enforce, and may institute and maintain any proceeding suitable to
enforce, his rights of conversion as provided herein.
Section 6.5 Proceedings by Trustee. In case of an Event of
Default and subject to the provisions of Section 7.6 hereof, the Trustee may in
its discretion proceed to protect and enforce the rights vested in it by this
Indenture by such appropriate judicial proceedings as the Trustee shall deem
most effectual to protect and enforce any of such rights, either by suit in
equity or by action at law or by proceeding in bankruptcy or otherwise, whether
for the specific enforcement of any covenant or agreement contained in this
Indenture or in aid of the exercise of any power granted in this Indenture or to
enforce any other legal or equitable right vested in the Trustee by this
Indenture or by law.
Section 6.6 Remedies Cumulative and Continuing. Except as
provided in Section 2.6, all powers and remedies given by this Article VI to the
Trustee or to the Debentureholders shall, to the extent permitted by law, be
deemed cumulative and not exclusive of such powers and remedies or of any other
powers and remedies available to the Trustee or the holders of the Debentures,
by judicial proceedings or otherwise, to enforce the performance or observance
of the covenants and agreements contained in this Indenture, and no delay or
omission of the Trustee or of any holder of any of the Debentures to exercise
any right or power accruing upon any default or Event of Default occurring and
continuing as aforesaid shall impair any such right or power or shall be
construed to be a waiver of any such default or any acquiescence therein; and,
subject to the provisions of Section 6.4, every power and remedy given by this
Article VI or by law to the Trustee or to the Debentureholders may be exercised
from time to time, and as often as shall be deemed expedient, by the Trustee or
by the Debentureholders.
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Section 6.7 Direction of Proceedings and Waiver of Defaults by
Majority of Debentureholders. The holders of a majority in aggregate principal
amount of the Debentures at the time outstanding (determined in accordance with
Section 8.4) shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or exercising
any trust or power conferred on the Trustee; provided that (a) such direction
shall not be in conflict with any rule of law or with this Indenture and (b) the
Trustee may take any other action deemed proper by the Trustee that is not
inconsistent with such direction. The holders of a majority in aggregate
principal amount of the Debentures at the time outstanding (determined in
accordance with Section 8.4) may on behalf of the holders of all of the
Debentures waive any past default or Event of Default hereunder and its
consequences except (i) a default in the payment of interest or premium, if any,
on, or the principal of, the Debentures, (ii) a failure by the Company to
convert any Debentures into Common Stock or cash, as the case may be, or (iii) a
default in respect of a covenant or provisions hereof that under Article X
cannot be modified or amended without the consent of the holders of all
Debentures then outstanding. Whenever any default or Event of Default hereunder
shall have been waived as permitted by this Section 6.7, said default or Event
of Default shall for all purposes of the Debentures and this Indenture be deemed
to have been cured and to be not continuing and the Company, the Trustee and the
holders of the Debentures shall as reasonably possible be restored to their
former positions and rights hereunder; but no such waiver shall extend to any
subsequent or other default or Event of Default or impair any right consequent
thereon.
Section 6.8 Notice of Defaults. The Trustee shall, within 90
days after the occurrence of a default, mail to all Debentureholders, as the
names and addresses of such holders appear upon the Debenture register, notice
of all defaults of which a Responsible Officer has actual knowledge, unless such
defaults shall have been cured or waived before the giving of such notice;
provided that, except in the case of default in the payment of the principal of,
premium, if any, or interest on any of the Debentures, the Trustee shall be
protected in withholding such notice if and so long as a Responsible Officer of
the Trustee in good faith determine that the withholding of such notice is in
the interests of the Debentureholders.
Section 6.9 Undertaking to Pay Costs. All parties to this
Indenture agree, and each holder of any Debenture by his acceptance thereof
shall be deemed to have agreed, that any court may, in its discretion, require,
in any suit for the enforcement of any right or remedy under this Indenture, or
in any suit against the Trustee for any action taken or omitted by it as
Trustee, the filing by any party litigant in such suit of an undertaking to pay
the costs of such suit and that such court may in its discretion assess
reasonable costs, including reasonable attorneys' fees and expenses, against any
party litigant in such suit, having due regard to the merits and good faith of
the claims or defenses made by such party litigant; provided that the provisions
of this Section 6.9 shall not apply to any suit instituted by the Trustee, to
any suit instituted by any Debentureholder or group of Debentureholders holding
in the aggregate more than 10% in principal amount of the Debentures at the time
outstanding determined in accordance with Section 8.4 or to any suit instituted
by any Debentureholder for the enforcement of the payment of the principal of,
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premium, if any, or interest on any Debenture on or after the due date expressed
in such Debenture or to any suit for the enforcement of the right to convert any
Debenture in accordance with the provisions of Article XIV.
ARTICLE VII
CONCERNING THE TRUSTEE
Section 7.1 Duties and Responsibilities of Trustee.
(a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise the rights and powers vested in it by this Indenture and
use the same degree of care and skill in its exercise as a prudent person would
exercise or use under the circumstances in the conduct of such person's own
affairs.
(b) Except during the continuance of an Event of Default:
(i) the Trustee need perform only those duties
that are specifically set forth in this Indenture and no
others; and
(ii) in the absence of bad faith on its part, the
Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed
therein, upon certificates or opinions furnished to the
Trustee and conforming to the requirements of this Indenture;
provided that in the case of any such certificates or opinions
that by any provision hereof are specifically required to be
furnished to the Trustee, the Trustee shall be under a duty to
examine the same to determine whether or not they conform to
the requirements of this Indenture (but need not confirm or
investigate the accuracy of mathematical calculations or other
facts stated therein).
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(i) this paragraph (c) does not limit the effect of
paragraph (b) of this Section 7.1;
(ii) the Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the
Trustee unless it is proved that the Trustee was negligent in
ascertaining the pertinent facts reasonably available to the
Trustee; and
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(iii) the Trustee shall not be liable with respect to
any action it takes or omits to take in good faith in
accordance with a direction received by it pursuant to Section
6.7.
(d) Every provision of this Indenture that in any way relates
to the Trustee is subject to paragraphs (a), (b), (c) and (e) of this Section
7.1.
(e) The Trustee may refuse to perform any duty or exercise any
right or power or extend or risk its own funds or otherwise incur any financial
liability unless it receives indemnity satisfactory to it against any loss,
liability or expense.
Section 7.2 Reliance on Documents, Opinions, Etc. Except as
otherwise provided in Section 7.1:
(a) The Trustee may rely and shall be protected in acting upon
any resolution, certificate, statement, instrument, opinion, report,
notice, request, consent, order, bond, debenture, coupon or other paper
or document believed by it in good faith to be genuine and to have been
signed or presented by the proper party or parties;
(b) Any request, direction, order or demand of the Company
mentioned herein shall be sufficiently evidenced by an Officers'
Certificate; and any resolution of the Board of Directors may be
evidenced to the Trustee by a copy thereof certified by the Secretary
or an Assistant Secretary of the Company;
(c) The Trustee may consult with counsel of its selection and
any advice or opinion of counsel shall be full and complete
authorization and protection in respect of any action taken or omitted
by it hereunder in good faith and in accordance with such advice or
opinion of counsel;
(d) The Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys, and the Trustee shall not be responsible
for any misconduct or negligence on the part of any agent or attorney
appointed by it with due care hereunder; no paying agent who is not the
Trustee shall be deemed an agent of the Trustee, and the Trustee (in
its capacity as Trustee) shall not be responsible for any act or
omission by any such paying agent;
(e) The Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by the Indenture at the request or
direction of any of the holders pursuant to this Indenture unless such
holders have offered the Trustee reasonable security or indemnity
against the costs, expenses and liabilities that would be incurred by
it in compliance with such request or direction.
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(f) Subject to the provisions of Section 7.1(c), the Trustee
shall not be liable for any action it takes or omits to take in good
faith that it believes to be authorized or within its rights or powers;
(g) In connection with any request to transfer or exchange any
Debenture, the Trustee may request a direction (in the form of an
Officers' Certificate) from the Company and an Opinion of Counsel with
respect to compliance with any restrictions on transfer or exchange
imposed by this Indenture, the Securities Act, other applicable law or
the rules and regulations of any exchange on which the Debentures or
the capital stock may be traded, and the Trustee may rely and shall be
protected in acting upon such direction and in accordance with such
Officers' Certificate and Opinion of Counsel;
(h) The Trustee may rely and shall be fully protected in
acting upon the determination and notice by the Company of the
Conversion Price; and
(i) The Trustee shall not be deemed to have knowledge of any
Event of Default or other fact or event upon the occurrence of which it
may be required to take action hereunder unless one of its Responsible
Officers has actual knowledge thereof obtained by a written statement.
Section 7.3 No Responsibility for Recitals, Etc. The recitals
contained herein and in the Debentures (except in the Trustee's certificate of
authentication) shall be taken as the statements of the Company, and the Trustee
assumes no responsibility for the correctness of the same. The Trustee makes no
representations as to the validity or sufficiency of this Indenture or of the
Debentures. The Trustee shall not be accountable for the use or application by
the Company of any Debentures or the proceeds of any Debentures authenticated
and delivered by the Trustee in conformity with the provisions of this
Indenture.
Section 7.4 Trustee, Paying Agents, Conversion Agents or
Registrar May Own Debentures. The Trustee, any paying agent, any conversion
agent or any Debenture registrar, in its individual or any other capacity, may
become the owner or pledgee of Debentures with the same rights it would have if
it were not Trustee, paying agent, conversion agent or Debenture registrar.
Section 7.5 Monies to Be Held in Trust. Subject to the
provisions of Section 12.4, all monies received by the Trustee or Paying Agent
shall, until used or applied as herein provided, be held in trust for the
purposes for which they were received. Money held by the Trustee or Paying Agent
in trust hereunder need not be segregated from other funds except to the extent
required by law. The Trustee or Paying Agent shall be under no liability for
interest on any money received by it hereunder except as may be agreed to in
writing from time to time by the Company and the Trustee or Paying Agent.
Section 7.6 Compensation and Expenses of Trustee. The Company
covenants and agrees to pay to the Trustee from time to time, and the Trustee
shall be entitled to, such compensation as the Company and the Trustee shall
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from time to time agree in writing, for all services rendered by it hereunder in
any capacity (which shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust), and the Company shall pay or
reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in accordance with
any of the provisions of this Indenture (including the reasonable compensation
and the expenses and disbursements of its counsel and of all persons not
regularly in its employ) except any such expense, disbursement or advance as may
arise from its negligence or bad faith. The Company also covenants to indemnify
each of the Trustee or any predecessor Trustee in any capacity under this
Indenture and its agents and any authenticating agent for, and to hold them
harmless against, any and all loss, liability, damage, claim or expense,
including taxes (other than taxes based on the income of the Trustee) incurred
without negligence or bad faith on the part of the Trustee or such agent or
authenticating agent, as the case may be, and arising out of or in connection
with the acceptance or administration of this trust or in any other capacity
hereunder, including the costs and expenses of defending themselves against any
claim of liability in the premises. The obligations of the Company under this
Section 7.6 to compensate or indemnify the Trustee and to pay or reimburse the
Trustee for expenses, disbursements and advances shall be secured by a lien
prior to that of the Debentures upon all property and funds held or collected by
the Trustee as such, except funds held in trust for the benefit of the holders
of particular Debentures. The obligation of the Company under this Section shall
survive the satisfaction and discharge of this Indenture.
Section 7.7 Officers' Certificate as Evidence. Except as
otherwise provided in Section 7.1, whenever in the administration of the
provisions of this Indenture the Trustee shall deem it necessary or desirable
that a matter be proved or established prior to taking or omitting any action
hereunder, such matter (unless other evidence in respect thereof be herein
specifically prescribed) may, in the absence of negligence or bad faith on the
part of the Trustee, be deemed to be conclusively proved and established by an
Officers' Certificate delivered to the Trustee, and such Officers' Certificate,
in the absence of negligence or bad faith on the part of the Trustee, shall be
full warrant to the Trustee for any action taken or omitted by it under the
provisions of this Indenture upon the faith thereof.
Section 7.8 Resignation or Removal of Trustee.
(a) The Trustee may at any time resign by giving written
notice of such resignation to the Company; and the Company shall mail, or cause
to be mailed, notice thereof to the holders of Debentures at their addresses as
they shall appear on the Debenture register. Upon receiving such notice of
resignation, the Company shall promptly appoint a successor trustee by written
instrument, in duplicate, executed by order of the Board of Directors, one copy
of which instrument shall be delivered to the resigning Trustee and one copy to
the successor trustee.
(b) In case the Trustee shall become incapable of acting, or
shall be adjudged a bankrupt or insolvent, or a receiver of the Trustee or of
its property shall be appointed, or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
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rehabilitation, conservation or liquidation, then, in any such case, the Company
may remove the Trustee and appoint a successor trustee by written instrument, in
duplicate, executed by order of the Board of Directors, one copy of which
instrument shall be delivered to the Trustee so removed and one copy to the
successor trustee, or any Debentureholder who has been a bona fide holder of a
Debenture or Debentures for at least six months may, on behalf of himself and
all others similarly situated, petition any court of competent jurisdiction for
the removal of the Trustee and the appointment of a successor trustee. Such
court may thereupon, after such notice, if any, as it may deem proper and
prescribe, remove the Trustee and appoint a successor trustee.
(c) The holders of a majority in aggregate principal amount of
the Debentures at the time outstanding may at any time remove the Trustee and
nominate a successor trustee, which shall be deemed appointed as successor
trustee unless within ten days after notice to the Company of such nomination
the Company objects thereto, in which case the Trustee so removed or any
Debentureholder, upon the terms and conditions and otherwise as provided in the
next paragraph, may petition any court of competent jurisdiction for an
appointment of a successor trustee.
If no successor trustee shall have been so appointed and have
accepted appointment within 60 days after removal or the mailing of such notice
of resignation to the Debentureholders, the Trustee resigning or being removed
may petition any court of competent jurisdiction for the appointment of a
successor trustee, or, in the case of either resignation or removal, any
Debentureholder who has been a bona fide holder of a Debenture or Debentures for
at least six months may, on behalf of himself and all others similarly situated,
petition any such court for the appointment of a successor trustee. Such court
may thereupon, after such notice, if any, as it may deem proper and prescribe,
appoint a successor trustee.
(d) Any resignation or removal of the Trustee and appointment
of a successor trustee pursuant to any of the provisions of this Section 7.8
shall become effective upon acceptance of appointment by the successor trustee
as provided in Section 7.9.
Section 7.9 Acceptance by Successor Trustee. Any successor
trustee appointed as provided in Section 7.8 shall execute, acknowledge and
deliver to the Company and to its predecessor trustee an instrument accepting
such appointment hereunder, and thereupon, the resignation or removal of the
predecessor trustee shall become effective and such successor trustee, without
any further act, deed or conveyance, shall become vested with all the rights,
powers, duties and obligations of its predecessor hereunder, with like effect as
if originally named as trustee herein; but on the written request of the Company
or of the successor trustee, the Trustee ceasing to act shall, upon payment of
any amounts then due it pursuant to the provisions of Section 7.6, execute and
deliver an instrument transferring to such successor trustee all the rights and
powers of the Trustee so ceasing to act. Upon request of any such successor
trustee, the Company shall execute any and all instruments in writing for more
fully and certainly vesting in and confirming to such successor trustee all such
rights and powers. Any Trustee ceasing to act shall, nevertheless, retain a lien
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upon all property and funds held or collected by such trustee as such, except
for funds held in trust for the benefit of holders of particular Debentures, to
secure any amounts then due it pursuant to the provisions of Section 7.6.
Upon acceptance of appointment by a successor trustee as
provided in this Section 7.9, the Company shall mail or cause to be mailed
notice of the succession of such Trustee hereunder to the holders of Debentures
at their addresses as they shall appear on the Debenture register. If the
Company fails to mail such notice within ten days after acceptance of
appointment by the successor trustee, the successor trustee shall cause such
notice to be mailed at the expense of the Company.
Section 7.10 Successor by Merger, Etc. Any corporation into
which the Trustee may be merged or converted or with which it may be
consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any corporation
succeeding to all or substantially all of the corporate trust business of the
Trustee, shall be the successor to the Trustee hereunder.
ARTICLE VIII
CONCERNING THE DEBENTUREHOLDERS
Section 8.1 Action by Debentureholders. Whenever in this
Indenture it is provided that the holders of a specified percentage in aggregate
principal amount of the Debentures may take any action (including the making of
any demand or request, the giving of any notice, consent or waiver or the taking
of any other action), the fact that at the time of taking any such action, the
holders of such specified percentage have joined therein may be evidenced (a) by
any instrument or any number of instruments of similar tenor executed by
Debentureholders in person or by agent or proxy appointed in writing, (b) by the
record of the holders of Debentures voting in favor thereof at any meeting of
Debentureholders duly called and held in accordance with the provisions of
Article IX or (c) by a combination of such instrument or instruments and any
such record of such a meeting of Debentureholders. Whenever the Company or the
Trustee solicits the taking of any action by the holders of the Debentures, the
Company or the Trustee may fix in advance of such solicitation, a date as the
record date for determining holders entitled to take such action. The record
date shall be not more than 15 days prior to the date of commencement of
solicitation of such action.
Section 8.2 Proof of Execution by Debentureholders. Subject to
the provisions of Sections 7.1, 7.2 and 9.5, proof of the execution of any
instrument by a Debentureholder or by agent or proxy shall be sufficient if made
in accordance with Section 7.3 hereof. The holding of Debentures shall be proved
by the Debenture register or by a certificate of the Debenture registrar.
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The record of any Debentureholders' meeting shall be proved in
the manner provided in Section 9.5.
Section 8.3 Who Are Deemed Absolute Owners. The Company, the
Trustee, any paying agent, any conversion agent and any Debenture registrar may
deem the person in whose name such Debenture shall be registered upon the books
of the Company to be, and may treat such person as, the absolute owner of such
Debenture (whether or not such Debenture shall be overdue and notwithstanding
any notation of ownership or other writing thereon) for the purpose of receiving
payment of or on account of the principal of, premium, if any, and interest on
such Debenture, for conversion of such Debenture and for all other purposes; and
neither the Company nor the Trustee nor any paying agent nor any conversion
agent nor any Debenture registrar shall be affected by any notice to the
contrary. All such payments so made to any holder for the time being, or upon
order of such holder, shall be valid and, to the extent of the sum or sums so
paid, effectual to satisfy and discharge the liability for monies payable upon
any such Debenture.
Section 8.4 Company-Owned Debentures Disregarded. In
determining whether the holders of the requisite aggregate principal amount of
Debentures have concurred in any direction, consent, waiver or other action
under this Indenture, Debentures that are owned by the Company or any other
obligor on the Debentures or by any person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company or any
other obligor on the Debentures shall be disregarded and deemed not to be
outstanding for the purpose of any such determination; provided that for the
purposes of determining whether the Trustee shall be protected in relying on any
such direction, consent, waiver or other action, only Debentures that a
Responsible Officer of the Trustee actually knows are so owned shall be so
disregarded. Debentures so owned that have been pledged in good faith may be
regarded as outstanding for the purposes of this Section 8.4 if the pledgee
shall establish to the satisfaction of the Trustee the pledger's right to vote
such Debentures and that the pledgee is not the Company, any other obligor on
the Debentures or a person directly or indirectly controlling or controlled by
or under direct or indirect common control with the Company or any such other
obligor. In the case of a dispute as to such right, any decision by the Trustee
taken upon the advice of counsel shall be full protection to the Trustee. Upon
request of the Trustee, the Company shall furnish to the Trustee promptly an
Officers' Certificate listing and identifying all Debentures, if any, known by
the Company to be owned or held by or for the account of any of the above
described persons; and subject to Section 7.1, the Trustee shall be entitled to
accept such Officers' Certificate as conclusive evidence of the facts therein
set forth and of the fact that all Debentures not listed therein are outstanding
for the purpose of any such determination.
Section 8.5 Revocation of Consents, Future Holders Bound. At
any time prior to (but not after) the evidencing to the Trustee, as provided in
Section 8.1, of the taking of any action by the holders of the percentage in
aggregate principal amount of the Debentures specified in this Indenture in
connection with such action, any holder of a Debenture that is shown by the
evidence to be included in the Debentures the holders of which have consented to
such action may, by filing written notice with the Trustee at its Corporate
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Trust Office and upon proof of holding as provided in Section 8.2, revoke such
action so far as concerns such Debenture. Except as aforesaid, any such action
taken by the holder of any Debenture shall be conclusive and binding upon such
holder and upon all future holders and owners of such Debenture and of any
Debentures issued in exchange or substitution therefor, irrespective of whether
any notation in regard thereto is made upon such Debenture or any Debenture
issued in exchange or substitution therefor.
ARTICLE IX
DEBENTUREHOLDERS' MEETINGS
Section 9.1 Purposes for Which Meetings May be Called. A
meeting of Debentureholders may be called at any time and from time to time
pursuant to the provisions of this Article IX for any of the following purposes:
(i) to give any notice to the Company or to the Trustee, or to
give any directions to the Trustee, or to consent to the waiving of any
default hereunder and its consequences, or to take any other action
authorized to be taken by Debentureholders pursuant to any of the
provisions of Article VI;
(ii) to remove the Trustee and appoint a successor trustee
pursuant to the provisions of Article VII;
(iii) to consent to the execution of an indenture or
indentures supplemental hereto pursuant to the provisions of Section
10.2; or
(iv) to take any other action authorized to be taken by or on
behalf of the holders of any specified aggregate principal amount of
the Debentures under any other provisions of this Indenture or under
applicable law.
Section 9.2 Manner of Calling Meetings; Record Date. The
Trustee may at any time call a meeting of Debentureholders to take any action
specified in Section 9.1, to be held at such time and at such place as the
Trustee shall determine. Notice of every meeting of the Debentureholders,
setting forth the time and the place of such meeting and in general terms the
action proposed to be taken at such meeting, shall be mailed not less than 30
nor more than 60 days prior to the date fixed for the meeting to such
Debentureholders at their addresses as such addresses appear in the Debenture
register. For the purpose of determining Debentureholders entitled to notice of
any meeting of Debentureholders, the Company, upon written notice to the
Trustee, shall fix in advance a date as the record date for such determination,
such date to be a business day not more than ten days prior to the date of the
mailing of such notice as hereinabove provided. Only persons in whose name any
Debenture shall be registered in the Debenture register at the close of business
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on a record date fixed by the Trustee as aforesaid, or by the Company or the
Debentureholders as provided in Section 9.3, shall be entitled to notice of the
meeting of Debentureholders with respect to which such record date was so fixed.
Section 9.3 Call of Meeting by Company or Debentureholders. In
case at any time the Company, pursuant to a resolution of its Board of Directors
or the holders of at least 10% in aggregate principal amount of the Debentures
then outstanding shall have requested the Trustee to call a meeting of
Debentureholders to take any action authorized in Section 9.1 by written request
setting forth in reasonable detail the action proposed to be taken at the
meeting, and the Trustee shall not have mailed notice of such meeting within 20
days after receipt of such request, then the Company or the holders of
Debentures in the amount above specified, as the case may be, may fix the record
date with respect to, and determine the time and the place for, such meeting and
may call such meeting to take any action authorized in Section 9.1, by mailing
notice thereof as provided in Section 9.2. The record date fixed as provided in
the preceding sentence shall be set forth in a written notice to the Trustee and
shall be a business day not less than 15 nor more than 20 days after the date on
which the original request is sent to the Trustee.
Section 9.4 Who May Attend and Vote at Meetings. Only persons
entitled to receive notice of a meeting of Debentureholders and their respective
proxies duly appointed by an instrument in writing shall be entitled to vote at
such meeting. The only persons who shall be entitled to be present or to speak
at any meeting of Debentureholders shall be the persons entitled to vote at such
meeting and their counsel and any representatives of the Trustee and its counsel
and any representatives of the Company and its counsel. When a determination of
Debentureholders entitled to vote at any meeting of Debentureholders has been
made as provided in this Section, such determination shall apply to any
adjournments thereof.
Section 9.5 Manner of Voting at Meetings and Record to be
Kept. The vote upon any resolution submitted to any meeting of Debentureholders
shall be by written ballots on each of which shall be subscribed the signature
of the Debentureholder or proxy casting such ballot and the identifying number
or numbers of the Debentures held or represented in respect of which such ballot
is cast. The chairman of the meeting shall appoint two inspectors of votes who
shall count all votes cast at the meeting for or against any resolution and who
shall make and file with the secretary of the meeting their verified written
reports in duplicate of all votes cast at the meeting. A record in duplicate of
the proceedings of each meeting of Debentureholders shall be prepared by the
secretary of the meeting and there shall be attached to said record the original
reports of the inspectors of votes on any vote by ballot taken thereat and
affidavits by one or more persons having knowledge of the facts setting forth a
copy of the notice of the meeting and showing that said notice was mailed as
provided in Section 9.2. The record shall show the identifying numbers of the
Debentures voting in favor of or against any resolution. Each counterpart of
such record shall be signed and verified by the affidavits of the chairman and
secretary of the meeting and one of the counterparts shall be delivered to the
Company and the other to the Trustee to be preserved by the Trustee.
Any counterpart record so signed and verified shall be
conclusive evidence of the matters therein stated and shall be the record
referred to in clause (b) of Section 8.1.
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Section 9.6 Exercise of Rights of Trustee and Debentureholders
Not To Be Hindered or Delayed. Nothing in this Article IX contained shall be
deemed or construed to authorize or permit, by reason of any call of a meeting
of Debentureholders or any rights expressly or impliedly conferred hereunder to
make such call, any hinderance or delay in the exercise of any right or rights
conferred upon or reserved to the Trustee or to the Debentureholders under any
of the provisions of this Indenture or of the Debentures.
ARTICLE X
SUPPLEMENTAL INDENTURES
Section 10.1 Supplemental Indentures Without Consent of
Debentureholders. The Company, when authorized by a Board Resolution, and the
Trustee may from time to time and at any time enter into an indenture or
indentures supplemental hereto for one or more of the following purposes:
(a) to make provision with respect to the conversion
rights of the holders of Debentures pursuant to the requirements of
Section 14.6;
(b) subject to Article XV, to convey, transfer, assign,
mortgage or pledge to the Trustee as security for the Debentures, any
property or assets;
(c) to evidence the succession of another person to the
Company, or successive successions, and the assumption by the Successor
Company of the covenants, agreements and obligations of the Company
pursuant to Article XI;
(d) to add to the covenants of the Company such further
covenants, restrictions or conditions as the Board of Directors and the
Trustee shall consider to be for the benefit of the holders of
Debentures and to make the occurrence, or the occurrence and
continuance, of a default in any such additional covenants,
restrictions or conditions a default or an Event of Default permitting
the enforcement of all or any of the several remedies provided in this
Indenture as herein set forth; provided that in respect of any such
additional covenant, restriction or condition, such supplemental
indenture may provide for a particular period of grace after default
(which period may be shorter or longer than that allowed in the case of
other defaults) or may provide for an immediate enforcement upon such
default or may limit the remedies available to the Trustee upon such
default;
(e) to provide for the issuance under this Indenture of
Debentures in coupon form (including Debentures registrable as to
principal only) and to provide for exchangeability of such Debentures
with the Debentures issued hereunder in fully registered form and to
make all appropriate changes for such purpose;
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(f) to cure any ambiguity or to correct or supplement any
provision contained herein or in any supplemental indenture that may be
defective or inconsistent with any other provision contained herein or
in any supplemental indenture, or to make such other provisions in
regard to matters or questions arising under this Indenture that shall
not adversely affect the interests of the holders of the Debentures; or
(g) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Debentures.
The Trustee is hereby authorized to join with the Company in
the execution of any such supplemental indenture, to make any further
appropriate agreements and stipulations that may be therein contained and to
accept the conveyance, transfer and assignment of any property thereunder, but
the Trustee shall not be obligated to, but may in its discretion, enter into any
supplemental indenture that affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
Any supplemental indenture authorized by the provisions of
this Section 10.1 may be executed by the Company and the Trustee without the
consent of the holders of any of the Debentures at the time outstanding,
notwithstanding any of the provisions of Section 10.2.
Section 10.2 Supplemental Indentures With Consent of
Debentureholders. With the consent (evidenced as provided in Article VIII) of
the holders of not less than a majority in aggregate principal amount of the
Debentures at the time outstanding, the Company, when authorized by a Board
Resolution and the Trustee, may from time to time and at any time enter into an
indenture or indentures supplemental hereto for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Indenture or any supplemental indenture or of modifying in any manner the
rights of the holders of the Debentures; provided that no such supplemental
indenture shall (i) without the consent of the holders of each Debenture so
affected, extend the fixed maturity of any Debenture, or reduce the rate or
extend the time of payment of interest thereon, or reduce the principal amount
thereof or premium, if any, thereon or reduce any amount payable on redemption
or repurchase thereof, or impair or affect the right of any Debentureholder to
institute suit for the payment thereof or make the principal thereof or interest
or premium, if any, thereon payable in any coin or currency other than that
provided in the Debentures, modify the subordination provisions in a manner
adverse to the holders of the Debentures, or impair the right to convert the
Debentures into Common Stock or cash subject to the terms set forth herein or
(ii) without the consent of the holders of all the Debentures then outstanding,
reduce the aforesaid percentage of Debentures, the holders of which are required
to consent to any such supplemental indenture.
Upon the request of the Company, accompanied by a copy of a
Board Resolution certified by its Secretary or Assistant Secretary authorizing
the execution of any such supplemental indenture, and upon the filing with the
Trustee of evidence of the consent of Debentureholders as aforesaid, the Trustee
shall join with the Company in the execution of such supplemental indenture
unless such supplemental indenture affects the Trustee's own rights, duties or
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immunities under this Indenture or otherwise, in which case the Trustee may in
its discretion, but shall not be obligated to, enter into such supplemental
indenture.
It shall not be necessary for the consent of the
Debentureholders under this Section 10.2 to approve the particular form of any
proposed supplemental indenture, but it shall be sufficient if such consent
shall approve the substance thereof.
Section 10.3 Effect of Supplemental Indentures. Upon the
execution of any supplemental indenture pursuant to the provisions of this
Article X, this Indenture shall be and be deemed to be modified and amended in
accordance therewith and the respective rights, limitation of rights,
obligations, duties and immunities under this Indenture of the Trustee, the
Company and the holders of Debentures shall thereafter be determined, exercised
and enforced hereunder subject in all respects to such modifications and
amendments and all the terms and conditions of any such supplemental indenture
shall be and be deemed to be part of the terms and conditions of this Indenture
for any and all purposes.
Section 10.4 Notation on Debentures. Debentures authenticated
and delivered after the execution of any supplemental indenture pursuant to the
provisions of this Article X may bear a notation in form approved by the Company
as to any matter provided for in such supplemental indenture, but they need not
do so. After notice to the Trustee, if the Company shall determine to add such a
notation, new Debentures so modified as to conform, in the opinion of the Board
of Directors, to any modification of this Indenture contained in any such
supplemental indenture may, at the Company's expense, be prepared and executed
by the Company, authenticated by the Trustee (or an authenticating agent duly
appointed by the Trustee pursuant to Section 16.14) and delivered in exchange
for the Debentures then outstanding, upon surrender of such Debentures then
outstanding.
Section 10.5 Evidence of Compliance of Supplemental Indenture
to Be Furnished to the Trustee. The Trustee shall be furnished with and, subject
to the provisions of Sections 7.1 and 7.2, may rely conclusively upon an
Officers' Certificate and an Opinion of Counsel as conclusive evidence that any
supplemental indenture executed pursuant hereto complies with the requirements
of this Article X.
ARTICLE XI
CONSOLIDATION, MERGER, SALE, CONVEYANCE,
TRANSFER AND LEASE
Section 11.1 Company May Consolidate, Etc. on Certain Terms.
The Company shall not consolidate with or merge with or into, or convey,
transfer or lease all or substantially all of its assets (determined on a
consolidated basis) to any person unless: (i) either the Company is the
resulting, surviving or transferee person (the "Successor Company") or the
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Successor Company is a person organized and existing under the laws of the
United States or any State thereof or the District of Columbia, and the
Successor Company (if not the Company) expressly assumes by a supplemental
indenture, executed and delivered to the Trustee, in form satisfactory to the
Trustee, all the obligations of the Company under this Indenture and the
Debentures, including the rights pursuant to Article XIV hereof, (ii)
immediately after giving effect to such transaction, no Event of Default has
happened and is continuing and (iii) the Company delivers to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that such
consolidation, merger or transfer and such supplemental indenture (if any)
comply with this Indenture.
Section 11.2 Successor Company To Be Substituted. In case of
any such consolidation, merger, sale, conveyance, transfer or lease and upon the
assumption by the Successor Company, by supplemental indenture, executed and
delivered to the Trustee and satisfactory in form to the Trustee, of the due and
punctual payment of the principal of, premium, if any, and interest on all of
the Debentures and the due and punctual performance of all of the covenants and
conditions of this Indenture to be performed by the Company, such Successor
Company shall succeed to and be substituted for the Company, with the same
effect as if it had been named herein as the party hereto. When a Successor
Company duly assumes all the obligations of the Company pursuant to this
Indenture and the Debentures, the predecessor shall be released from all such
obligations.
Section 11.3 Opinion of Counsel To Be Given to Trustee. The
Trustee, subject to Sections 7.1 and 7.2, shall receive an Officers' Certificate
and an Opinion of Counsel as conclusive evidence that any such consolidation,
merger, sale, conveyance, transfer or lease and any such assumption complies
with the provisions of this Article XI.
ARTICLE XII
SATISFACTION AND DISCHARGE OF INDENTURE;
UNCLAIMED MONEYS
Section 12.1 Termination of Obligations upon Cancellation of
the Debentures. The Company may terminate all of its obligations under this
Indenture (subject to Section 12.2) when:
(a) (i) all Debentures theretofore authenticated and delivered
(other than Debentures that have been destroyed, lost or stolen and
that have been replaced, converted or paid as provided in Section 2.6)
have been delivered to the Trustee for cancellation; and
(ii) the Company has paid or caused to be paid all
other sums payable hereunder and under the Debentures by the Company;
or
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(b) (i) the Debentures not previously delivered to the Trustee
for cancellation shall have become due and payable or are by their
terms to become due and payable within one year or are to be called for
redemption under arrangements satisfactory to the Trustee upon delivery
of notice, (ii) the Company shall have irrevocably deposited with the
Trustee, as trust funds, cash, in an amount sufficient to pay principal
of premium, if any, and interest on the outstanding Debentures, to
maturity or redemption, as the case may be, (iii) such deposit shall
not result in a breach or violation of, or constitute a default under,
any agreement or instrument pursuant to which the Company is a party or
by which it or its property is bound and (iv) the Company has delivered
to the Trustee an Officers' Certificate in form and substance
reasonably satisfactory to the Trustee, each stating that all
conditions related to such discharge have been complied with.
Section 12.2 Survival of Certain Obligations. Notwithstanding
the satisfaction and discharge of this Indenture and of the Debentures referred
to in Section 12.1, the respective obligations of the Company and the Trustee
under Sections 2.3, 2.4, 2.5, 2.6, 3.1, 4.2, 5.1, 6.4, 6.9, 7.5, 7.8, 12.4,
12.5, 12.6, Articles XIV and XV shall survive until the Debentures are no longer
outstanding, and thereafter, the obligations of the Company and the Trustee
under Sections 6.9, 7.5, 12.4, 12.5 and 12.6 shall survive. Nothing contained in
this Article XII shall abrogate any of the rights, obligations or duties of the
Trustee under this Indenture.
Section 12.3 Acknowledgment of Discharge by Trustee. Subject
to Section 12.6, after (i) the conditions of Section 12.1 have been satisfied,
(ii) the Company has paid or caused to be paid all other sums payable hereunder
by the Company and (iii) the Company has delivered to the Trustee an Officers'
Certificate stating that all conditions precedent referred to in clause (i)
above relating to the satisfaction and discharge of this Indenture have been
complied with, the Trustee upon written request shall acknowledge in writing the
discharge of the Company's obligations under this Indenture except for those
surviving obligations specified in Section 12.2.
Section 12.4 Application of Trust Assets. The Trustee shall
hold any cash deposited with it in the irrevocable trust established pursuant to
Section 12.1. The Trustee shall apply the deposited cash in accordance with this
Indenture and the terms of the irrevocable trust agreement established pursuant
to Section 12.1, as the case may be, to the payment of principal of, premium, if
any, and interest on the Debentures. The cash so held in trust and deposited
with the Trustee in compliance with Section 12.1 shall not be part of the trust
estate under this Indenture, but shall constitute a separate trust fund for the
benefit of all holders entitled thereto. Except as specifically provided herein,
the Trustee shall not be requested to invest any amounts held by it for the
benefit of the holders or pay interest on uninvested amounts to any holder.
Section 12.5 Repayment to the Company; Unclaimed Money.
Subject to applicable laws governing escheat of such property, and upon
termination of the trust established pursuant to Section 12.1 hereof, the
Trustee shall promptly pay to the Company upon written request any excess cash
held by them. Additionally, if amounts for the payment of principal, premium, if
any, or interest remains unclaimed for two years, the Trustee shall, upon
written request, pay such amounts back to the Company forthwith. Thereafter, all
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liability of the Trustee with respect to such amounts shall cease. After payment
to the Company, holders entitled to such payment must look to the Company for
such payment as general creditors unless an applicable abandoned property law
designates another person.
Section 12.6 Reinstatement. If the Trustee is unable to apply
any cash in accordance with Section 12.1 by reason of any legal proceeding or by
reason of any order or judgment of any court or governmental authority
enjoining, restraining or otherwise prohibiting such application, the Company's
obligations under this Indenture and the Debentures shall be revived and
reinstated as though no deposit had occurred pursuant to Section 12.1 until such
time as the Trustee is permitted to apply all such cash in accordance with
Section 12.1; provided that if the Company makes any payment of principal of,
premium, if any, or interest on any Debentures following the reinstatement of
its obligations, the Company shall be subrogated to the rights of the holders of
such Debentures to receive such payment from the amounts held by the Trustee.
ARTICLE XIII
IMMUNITY OF INCORPORATORS, SHAREHOLDERS,
OFFICERS AND DIRECTORS
Section 13.1 Indenture and Debentures Solely Corporate
Obligations. No recourse for the payment of the principal of, or premium, if
any, or interest on any Debenture, or for any claim based thereon or otherwise
in respect thereof, and no recourse under or upon any obligation, covenant or
agreement of the Company in this Indenture or in any supplemental indenture or
in any Debenture, or because of the creation of any indebtedness represented
thereby, shall be had against any incorporator, shareholder, officer or
director, as such, past, present or future, of the Company or of any successor
entity, either directly or through the Company or any successor entity, whether
by virtue of any constitution, statute or rule of law, or by the enforcement of
any assessment or penalty or otherwise; it being expressly understood that all
such liability is hereby expressly waived and released as a condition of, and as
a consideration for, the execution of this Indenture and the issuance of the
Debentures.
ARTICLE XIV
CONVERSION OF DEBENTURES
Section 14.1 Right to Convert.
(a) Subject to and upon compliance with the provisions of this
Indenture, the holder of any Debenture shall have the one-time right, at the
option of such holder, at any time after 90 days following the latest date of
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original issuance of the Debentures and prior to the close of business on
September 27, 2000 (except that, with respect to any Debenture or portion of a
Debenture that shall be called for redemption or delivered for repurchase, such
right shall terminate at the close of business one Business Day immediately
preceding the date fixed for redemption or repurchase of such Debenture or
portion of a Debenture unless the Company shall default in payment due upon
redemption thereof) to convert the principal amount of any such Debenture, or
any portion of such principal amount that is $1,000 or an integral multiple
thereof, up to a maximum of 30% (less any amounts converted pursuant to the
Mandatory Conversion described in Section 4.1(b)) of such holder's outstanding
principal amount of Debentures, into that number of fully paid and nonassessable
shares (calculated as to each conversion to the nearest 1/100 of a share) of
Common Stock (as such shares shall then be constituted) obtained by dividing the
aggregate principal amount of the Debentures or portion thereof surrendered for
conversion by the Conversion Price in effect at such time as such amount shall
be certified by the Company as provided in an Officers' Certificate, by
surrender of the Debenture so to be converted in whole or in part in the manner
provided in Section 14.2. A holder of Debentures is not entitled to any rights
of a holder of Common Stock until such holder has converted such holder's
Debentures to Common Stock and only to the extent such Debentures are deemed to
have been converted to Common Stock under this Article XIV.
(b) In the event that, during any consecutive 20-Trading Day
period, the average closing price of the Company's Common Stock equals or
exceeds $12.00 per share, the Company may, within 30 days of such 20-Trading Day
period, require the conversion (the "Mandatory Conversion") of up to an
aggregate of 20% of the principal amount of outstanding Debentures, pro rata, at
the Conversion Price. The Company shall give notice to the Trustee and each
Debentureholder within ten days of the 20-Trading Day period of its intent to
convert a portion of the Debentures.
Section 14.2 Exercise of Conversion Privilege; Issuance of
Common Stock on Conversion; No Adjustment for Interest or Dividends. In order to
exercise the conversion privilege with respect to any Debenture in definitive
form, the holder of any such Debenture to be converted in whole or in part shall
surrender such Debenture, duly endorsed, at an office or agency maintained by
the Company pursuant to Section 4.2, accompanied by the funds, if any, required
by the penultimate paragraph of this Section 14.2, and shall give written notice
of conversion in the form provided on the form of Debenture (or such other
notice that is acceptable to the Company) to the office or agency that the
holder elects to convert such Debenture or the portion thereof specified in said
notice. Such notice shall state the name, telephone number and facsimile number
of the contact person for the Conversion Notice and shall also state the name or
names (with address) in which the certificate or certificates for shares of
Common Stock that shall be issuable on such conversion shall be issued and shall
be accompanied by transfer taxes, if required pursuant to Section 14.7. Each
such Debenture surrendered for conversion shall, unless the shares issuable on
conversion are to be issued in the name of the holder of such Debenture as it
appears on the Debenture register, be duly endorsed by, or be accompanied by
instruments of transfer in form satisfactory to the Company duly executed by,
the holder or his duly authorized attorney.
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As promptly as practicable after satisfaction of the
requirements for conversion set forth above, subject to Section 14.1(b) and in
compliance with any restrictions on transfer if shares issuable on conversion
are to be issued in a name other than that of the Debentureholder (as if such
transfer were a transfer of the Debenture or Debentures (or portion thereof) so
converted), the Company shall issue and shall deliver to such holder at the
office or agency maintained by the Company for such purpose pursuant to Section
4.2, a certificate or certificates for the number of full shares issuable upon
the conversion of such Debenture or portion thereof in accordance with the
provisions of this Article XIV and a check or cash in respect of any fractional
interest in respect of a Common Stock arising upon such conversion, as provided
in Section 14.3. In case any Debenture of a denomination greater than $1,000
shall be surrendered for partial conversion, and subject to Section 2.3, the
Company shall execute and the Trustee shall authenticate and make available for
delivery to the holder of the Debenture so surrendered, without charge to him, a
new Debenture or Debentures in authorized denominations in an aggregate
principal amount equal to the unconverted portion of the surrendered Debenture.
Each conversion shall be deemed to have been effected as to
any such Debenture (or portion thereof) on the date on which the requirements
set forth above in this Section 14.2 have been satisfied as to such Debenture
(or portion thereof), and, subject to Section 14.1(b), the person in whose name
any certificate or certificates for shares of Common Stock shall be issuable
upon such conversion shall be deemed to have become on said date the holder of
record of the shares represented thereby; provided that any such surrender on
any date when the stock transfer books of the Company shall be closed shall
constitute the person in whose name the certificates are to be issued as the
record holder thereof for all purposes on the next succeeding day on which such
stock transfer books are open, but such conversion shall be at the Conversion
Price in effect on the date upon which such Debenture shall have been
surrendered.
Any Debenture or portion thereof surrendered for conversion
during the period from the close of business on the record date for any interest
payment date to the opening of business on the next succeeding interest payment
date shall (unless such Debenture or portion thereof being converted shall have
been called for redemption on a redemption date during the period from the close
of business on or after any record date for the payment of interest to the close
of business on the business day following the corresponding interest payment
date) be accompanied by payment, in funds acceptable to the Company, of an
amount equal to the interest payable on such succeeding interest payment date on
the principal amount being converted; provided that no such payment need be made
if there shall exist at the time of conversion a default in the payment of
interest on the Debentures. An amount equal to such payment shall be paid by the
Company on the corresponding interest payment date to the holder of such
Debenture at the close of business on such record date; provided that if the
Company shall default in the payment of interest on such interest payment date,
such amount shall be paid to the person who made such required payment. The
interest payment with respect to a Debenture called for redemption on a date
between the close of business on any record date for the payment of interest to
the close of business on the business day following the corresponding interest
payment date and surrendered for conversion during that period shall be payable
on the corresponding interest payment date to the registered holder at the close
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of business on that record date (notwithstanding the conversion of such
Debenture before the corresponding interest payment date) and a holder who
elects to convert during that period need not include funds equal to the
interest paid. Except as provided above in this Section 14.2, no adjustment
shall be made for interest accrued on any Debenture converted or for dividends
on any shares issued upon the conversion of such Debenture as provided in this
Article XIV.
Section 14.3 Cash Payments in Lieu of Fractional Shares. No
fractional shares of Common Stock or scrip representing fractional shares shall
be issued upon conversion of Debentures. If more than one Debenture shall be
surrendered for conversion at one time by the same holder, the number of fully
paid and nonassessable shares of Common Stock issuable upon conversion of a
Debenture shall be determined by dividing the aggregate principal amount of such
Debentures or portion thereof surrendered for conversion by the Conversion Price
in effect at such time. The aggregate number of shares of Common Stock issuable
upon conversion shall be rounded to the nearest 1/100th of a share (with .005
being rolled upward). If any fractional share of stock would be issuable upon
the conversion of any Debenture or Debentures, the Company shall make an
adjustment therefor in cash determined by multiplying the fractional share by
the Conversion Price.
Section 14.4 Conversion Price. The Conversion Price shall be
equal to the greater of (i) 85% of the average closing price of the Company's
Common Stock during the 20-Trading Day period ending on the date upon which the
holder exercises the right of conversion, and (ii) $12.00 per share (herein
called the "Conversion Price"), subject to adjustment as provided in this
Article XIV.
Section 14.5 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 (i) pay a dividend or make a
distribution on its outstanding Common Stock in shares of its Common
Stock, (ii) subdivide or split its outstanding Common Stock into a
greater number of shares, (iii) combine its outstanding Common Stock
into a smaller number of shares or (iv) issue any shares of capital
stock by reclassification of its Common Stock, the conversion price in
effect immediately prior thereto shall be adjusted so that the holder
of any Debentures thereafter surrendered for conversion shall be
entitled to receive the number of shares of Common Stock of the Company
which such holder would have owned or have been entitled to receive
after the occurrence of any of the events described above had such
Debentures been surrendered for conversion immediately prior to the
occurrence of such event or the record date therefor, whichever is
earlier. An adjustment made pursuant to this subsection (a) shall
become effective immediately after the close of business on the record
date for determination of shareholders entitled to receive such
dividend or distribution in the case of a dividend or distribution
(except as provided in Section 14.5(e)) and shall become effective
immediately after the close of business on the effective date in the
case of a subdivision, split, combination or reclassification.
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(b) In case the Company shall, by dividend or otherwise,
distribute property or assets to all holders of its Common Stock (other
than any dividends or distributions of the Company's Capital Stock to
which Section 14.5(a) applies), and excluding any dividend or
distribution (x) in connection with the liquidation, dissolution or
winding-up of the Company, whether voluntary or involuntary, (y) in
cash or (z) referred to in Section 14.5(a) (any of the foregoing
hereinafter in this Section 14.5(b) called the "Property")), then, in
each such case, the Company shall make proper provision so that each
Debentureholder who converts a Debenture (or any portion thereof) after
the date fixed for determination of shareholders entitled to receive
such distribution shall be entitled to receive upon such conversion, in
addition to the shares of Common Stock issuable upon such conversion,
the amount and kind of Property that such holder would have been
entitled to receive if such holder had, immediately prior to such
determination date, converted such Debenture into Common Stock.
(c) The Company may make such reductions in the Conversion
Price, in addition to those required by Sections 14.5(a), 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 20 days, the reduction is
irrevocable during the period and the Board of Directors shall have
made a determination that such reduction would be in the best interests
of the Company, which determination shall be conclusive and described
in a Board Resolution. Whenever the Conversion Price is reduced
pursuant to the preceding sentence, the Company shall mail to all
holders of record of the Debentures a notice of the reduction at least
15 days prior to the date the reduced Conversion Price takes effect,
and such notice shall state the reduced Conversion Price and the period
it shall be in effect.
(d) No adjustment in the Conversion Price shall be required
unless such adjustment would require an increase or decrease of at
least 1% in such price; provided that any adjustments that by reason of
this Section 14.5(d) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All
calculations under this Article XIV shall be made by the Company and
shall be made to the nearest 1/100 (with 0.005 being rolled upward).
No adjustment need be made for a change in the par value, or
to or from no par value, of the Common Stock.
To the extent the Debentures become convertible into cash,
assets, property or securities (other than Common Stock of the
Company), no adjustment need be made thereafter as to the cash, assets,
property or such securities (except as such securities may otherwise by
their terms provide), and interest shall not accrue on such cash.
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(e) 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.
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 Debenture at his last address
appearing on the Debenture register provided for in Section 2.5, within
20 days after execution thereof. Failure to deliver such notice shall
not effect the legality or validity of any such adjustment.
Section 14.6 Effect of Reclassification, Consolidation, Merger
or Sale. If any of the following events occur, namely (i) any reclassification
or change of outstanding shares of Common Stock (other than a change in par
value, or to or from no par value, 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
(determined on a consolidated basis) to any other 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, then the Company or the successor or purchasing corporation,
as the case may be, shall execute with the Trustee a supplemental indenture
providing that the Debentures 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 Debentures (assuming, for such purposes,
a sufficient number of authorized shares of Common Stock available to convert
all such Debentures) immediately prior to such reclassification, change,
consolidation, merger, combination, sale or conveyance, assuming such holder of
Common Stock did not exercise his rights of election, if any, as to the kind or
amount of securities, cash or other property receivable upon such
reclassification, change, consolidation, merger, combination, sale or conveyance
(provided that, if the kind or amount of securities, cash or other property
receivable upon such reclassification, change, consolidation, merger,
combination, sale or conveyance is not the same for each share of Common Stock
in respect of which such rights of election shall not have been exercised
("non-electing share"), then for the purposes of this Section 14.6 the kind and
amount of securities, cash or other property receivable upon such
reclassification, change, consolidation, merger, combination, sale or conveyance
for each non-electing share shall be deemed to be the kind and amount so
receivable per share by a plurality of the non-electing shares). Such
supplemental indenture shall provide for adjustments that shall be as nearly
equivalent as may be practicable to the adjustments provided for in this Article
XIV.
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The Company shall cause notice of the execution of such
supplemental indenture to be mailed to each holder of Debentures, at his address
appearing on the Debenture register provided for in Section 2.5, within 20 days
after execution thereof. Failure to deliver such notice shall not affect the
legality or validity of such supplemental indenture.
The above provisions of this Section 14.6 shall similarly
apply to successive reclassifications, changes, consolidations, mergers,
combinations, sales and conveyances.
Section 14.7 Taxes on Shares Issued. The issuance of stock
certificates on conversions of Debentures shall be made without charge to the
converting Debentureholder for any transfer or similar tax in respect of the
issue thereof. The Company shall not, however, be required to pay any tax that
may be payable in respect of any transfer involved in the issue and delivery of
stock in any name other than that of the holder of any Debenture converted, and
the Company shall not be required to issue or deliver any such stock certificate
unless and until the person or persons requesting the issuance thereof shall
have paid to the Company the amount of such tax or shall have established to the
satisfaction of the Company that such tax has been paid.
Section 14.8 Reservation of Shares; Shares to Be Fully Paid.
The Company shall provide, free from preemptive rights, out of its authorized
but unissued shares or shares held in treasury, sufficient shares to provide for
the conversion of the Debentures from time to time as such Debentures are
presented for conversion.
Before taking any action that would cause an adjustment
reducing the Conversion Price below the then par value, if any, of the shares of
Common Stock issuable upon conversion of the Debentures, the Company shall take
all corporate action that may, in the opinion of its counsel, be necessary in
order that the Company may validly and legally issue shares of such Common Stock
at such adjusted Conversion Price.
The Company covenants that all shares of Common Stock that may
be issued upon conversion of Debentures shall, upon issuance, be fully paid and
nonassessable by the Company and free from all taxes, liens and charges with
respect to the issuance thereof.
Section 14.9 Responsibility of Trustee. The Trustee and any
other conversion agent shall not at any time be under any duty or responsibility
to any holder of Debentures to determine whether any facts exist that may
require any adjustment of the Conversion Price or notice thereof, or with
respect to the nature, accuracy or extent or calculation of any such adjustment
when made, or with respect to the method employed, or herein or in any
supplemental indenture provided to be employed, in making the same. The Trustee
and any other conversion agent shall not be accountable with respect to the
validity or value (or the kind or amount) of any shares of Common Stock, or of
any securities or property, that may at any time be issued or delivered upon the
conversion of any Debenture; and the Trustee and any other conversion agent make
no representations with respect thereto or actions or omissions by the Company
in connection with this Article XIV. Subject to the provisions of Section 7.1,
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neither the Trustee nor any conversion agent shall be responsible for any
failure of the Company to issue, transfer or deliver any shares of Common Stock
or stock certificates or other securities or property or cash upon the surrender
of any Debenture for the purpose of conversion or to comply with any of the
duties, responsibilities or covenants of the Company contained in this Article
XIV. Without limiting the generality of the foregoing, neither the Trustee nor
any conversion agent shall be under any responsibility to determine whether a
supplemental indenture under Section 14.6 hereof need to be entered into or the
correctness of any provisions contained in any supplemental indenture entered
into pursuant to Section 14.6 relating either to the kind or amount of shares of
stock or securities or property (including cash) receivable by Debentureholders
upon the conversion of their Debentures after any event referred to in such
Section 14.6 or to any adjustment to be made with respect thereto, and may
accept as conclusive evidence of the correctness of any such provisions, and
shall be protected in relying upon, the Officers' Certificate (which the Company
shall be obligated to file with the Trustee prior to the execution of any such
supplemental indenture) with respect thereto.
Section 14.10 Notice to Holders Prior to Certain Actions. In
case:
(a) the Company makes any distribution or dividend that would
require an adjustment in the Conversion Price pursuant to Section 14.5;
or
(b) the Company takes any action that would require a
supplemental indenture pursuant to Section 14.6; or
(c) of the voluntary or involuntary dissolution, liquidation
or winding-up of the Company,
the Company shall cause to be filed with the Trustee and to be mailed to each
holder of Debentures at his address appearing on the Debenture register, as
promptly as possible but in any event at least 15 days prior to the applicable
date hereinafter specified, a notice stating (x) the date on which a record date
is to be taken for the purpose of such dividend, distribution, rights, options
or warrants, or, if a record is not to be taken, the date as of which the
holders of Common Stock of record to be entitled to such dividend, distribution,
rights, options or warrants are to be determined or (y) the date on which such
reclassification, change, consolidation, merger, sale, conveyance, transfer,
dissolution, liquidation or winding-up is expected to become effective or occur
and the date as of which it is expected that holders of record of Common Stock
shall be entitled to exchange their Common Stock for securities or other
property deliverable upon such reclassification, change, consolidation, merger,
sale, conveyance, transfer, dissolution, liquidation or winding-up. Neither the
failure to give such notice nor any defect therein shall affect the legality or
validity of the proceedings referenced in clauses (a) through (c) of this
Section 14.10.
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ARTICLE XV
SUBORDINATION
Section 15.1 Agreement to Subordinate. The Company agrees, and
each Debentureholder by accepting a Debenture agrees, that the indebtedness
evidenced by the Debentures is subordinated in right of payment, to the extent
and in the manner provided in this Article XV, to the prior payment in full of
all Senior Indebtedness and that the subordination is for the benefit of the
holders of Senior Indebtedness.
Section 15.2 Certain Definitions. For purposes of this Article
XV, the following terms shall have the meaning indicated:
(1) "Representative" shall mean a duly authorized indenture
trustee or other trustee, agent or representative for any Senior
Indebtedness.
(2) "Senior Indebtedness" with respect to the Debentures means
the principal of, premium, if any, and interest (including any interest
accruing subsequent to a bankruptcy or other similar proceeding whether
or not such interest is an allowed claim enforceable in a bankruptcy
case) on, and any fees, costs, expenses and any other amounts
(including indemnity payments) related to the following, whether
outstanding on the date hereof or hereafter incurred or created: (a)
indebtedness, matured or unmatured, whether or not contingent, of the
Company to NationsCredit Commercial Corporation, through its
NationsCredit Commercial Funding Division, its affiliates, its
successors or its assigns, regardless of whether evidenced by notes or
other written obligations, (b) indebtedness of others of any of the
kinds described in the preceding clause (a) assumed or guaranteed by
the Company and (c) renewals, extensions, modifications, amendments,
and refundings of, and indebtedness and obligations of a successor
person issued in exchange for or in replacement of, indebtedness or
obligations of the kinds described in the preceding clauses (a) and
(b), unless the agreement pursuant to which any such indebtedness
described in clauses (a) through (c) is created, issued, assumed or
guaranteed expressly provides that such indebtedness is not senior or
superior in right of payment to the Debentures; provided that the
following shall not constitute Senior Indebtedness: (i) any
indebtedness or obligation of the Company in respect of the Debentures,
(ii) any indebtedness that is subordinated or junior in any respect to
any other indebtedness of the Company other than Senior Indebtedness;
and (iii) any indebtedness incurred for the purchase of goods or
materials in the ordinary course of business.
For the purposes of this Indenture, Senior Indebtedness shall
not be deemed to have been paid in full until the holders of the Senior
Indebtedness shall have indefeasibly received payment in full in cash of all
Senior Indebtedness; provided that if any holder of Senior Indebtedness agrees
to accept payment in full of such Senior Indebtedness for consideration other
than cash, such holder shall be deemed to have indefeasibly received payment in
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full of such Senior Indebtedness. The provisions of this Article XV shall
continue to be effective or be reinstated, as the case may be, if at any time
any payment of any of the Senior Indebtedness is rescinded or must otherwise be
returned by any holder of Senior Indebtedness upon the insolvency, bankruptcy or
reorganization of the Company or otherwise, all as though such payment had not
been made.
A distribution may consist of cash, securities or other
property, by set-off or otherwise.
Section 15.3 Liquidation; Dissolution; Bankruptcy. Upon any
distribution to creditors of the Company in a liquidation or dissolution of the
Company or in a bankruptcy, reorganization, insolvency, receivership or similar
proceeding relating to the Company or its property, in an assignment for the
benefit of creditors or any marshalling of the Company's assets and liabilities,
(a) holders of all Senior Indebtedness shall first be entitled to receive
payment in full of all amounts due or to become due thereon before
Debentureholders shall be entitled to receive any payment with respect to the
principal of, premium, if any, or interest on the Debentures (except that
Debentureholders may receive securities that are subordinated to at least the
same extent as the Debentures to Senior Indebtedness and any securities issued
in exchange for Senior Indebtedness) and (b) until all Senior Indebtedness (as
provided in clause (a) above) is paid in full, any distribution to which
Debentureholders would be entitled but for this Article shall be made to holders
of Senior Indebtedness (except that Debentureholders may receive securities that
are subordinated to at least the same extent as the Debentures to (x) Senior
Indebtedness and (y) any securities issued in exchange for Senior Indebtedness),
as their interests may appear.
Section 15.4 Default on Senior Indebtedness. The Company may
not make any payment upon or in respect of the Debentures (except in such
subordinated securities) and may not acquire from the Trustee or any
Debentureholder any Debenture for cash or property (other than securities that
are subordinated to at least the same extent as the Debenture to (i) Senior
Indebtedness and (ii) any securities issued in exchange for Senior Indebtedness)
until all Senior Indebtedness has been paid in full if:
(a) a default in the payment of the principal of, premium, if
any, or interest on Senior Indebtedness occurs and is continuing beyond
any applicable period of grace (a "Payment Default"); or
(b) a default, other than a Payment Default on Senior
Indebtedness occurs and is continuing that permits holders of the
Senior Indebtedness as to which such default relates to accelerate its
maturity (a "Nonpayment Default") and the Trustee or the Company
receives a notice of the default from the Representative or
Representatives of holders of at least a majority in principal amount
of Senior Indebtedness then outstanding.
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The Company may and shall resume payments on and distributions
in respect of the Debentures and may acquire them upon the date on which the
default is cured or waived, in writing, if this Article XV otherwise permits the
payment, distribution or acquisition at the time of such payment or acquisition.
Section 15.5 When Distribution Must Be Paid Over. In the event
that the Trustee (or paying agent if other than the Trustee) or any
Debentureholder receives any payment of principal or interest with respect to
the Debentures at a time when such payment is prohibited by Section 15.3 or 15.4
hereof, such payment shall be held by the Trustee (or paying agent if other than
the Trustee) or such Debentureholder, in trust for the benefit of, and
immediately shall be paid over and delivered, upon written request, to, the
holders of Senior Indebtedness as their interests may appear or their
Representative under the indenture or other agreement (if any) pursuant to which
Senior Indebtedness may have been issued, as their respective interests may
appear, for application to the payment of all Senior Indebtedness remaining
unpaid to the extent necessary to pay all Senior Indebtedness in full in
accordance with its terms, after giving effect to any concurrent payment or
distribution to or for the holders of Senior Indebtedness.
With respect to the holders of Senior Indebtedness, the
Trustee undertakes to perform only such obligations on the part of the Trustee
as are specifically set forth in this Article XV, and no implied covenants or
obligations with respect to the holders of Senior Indebtedness shall be read
into this Indenture against the Trustee. The Trustee shall not be deemed to owe
any fiduciary duty to the holders of Senior Indebtedness and shall not be liable
to any such holders if the Trustee shall pay over or distribute to or on behalf
of Debentureholders or the Company or any other person money or assets to which
any holders of Senior Indebtedness shall be entitled by virtue of this Article
XV, except if such payment is made as a result of the willful misconduct or
gross negligence of the Trustee.
Section 15.6 Notice by Company. The Company shall promptly
notify the Trustee and the paying agent in writing of any facts known to the
Company that would cause a payment of any principal or interest with respect to
the Debentures to violate this Article XV, but failure to give such notice shall
not affect the subordination of the Debentures to the Senior Indebtedness as
provided in this Article XV.
Section 15.7 Subrogation. Until all Senior Indebtedness is
paid in full and until the Debentures are paid in full, Debentureholders shall
be subrogated (equally and ratably with all other indebtedness pari passu with
the Debentures) to the rights of holders of Senior Indebtedness (but subordinate
to the rights of the holders of Senior Indebtedness) to receive distributions
applicable to Senior Indebtedness to the extent that distributions otherwise
payable to the Debentureholders have been applied to the payment of Senior
Indebtedness. A distribution made under this Article XV to holders of Senior
Indebtedness that otherwise would have been made to Debentureholders is not, as
between the Company and Debentureholders, a payment by the Company on the
Debentures.
Section 15.8 Relative Rights. This Article XV defines the
relative rights of Debentureholders and holders of Senior Indebtedness. Nothing
in this Indenture shall:
52
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(a) impair, as between the Company and the Debentureholders,
the obligation of the Company, which is absolute and unconditional, to
pay principal of, premium, if any, and interest on the Debentures in
accordance with their terms;
(b) affect the relative rights of Debentureholders and
creditors of the Company other than their rights in relation to holders
of Senior Indebtedness; or
(c) prevent the Trustee or any Debentureholder from exercising
its available remedies upon a default or Event of Default, subject to
the rights of holders and owners of Senior Indebtedness to receive
distributions and payments otherwise payable to Debentureholders.
If the Company fails because of this Article XV to pay
principal of, premium, if any, or interest on a Debenture on the due date, the
failure is still a default or Event of Default.
Section 15.9 Subordination May Not Be Impaired by Company. No
right of any holder of Senior Indebtedness to enforce the subordination of the
indebtedness evidenced by the Debentures shall be impaired by any act or failure
to act by the Company or any holder of Debentures or by the failure of the
Company or any holder of Debentures to comply with this Indenture.
Section 15.10 Distribution or Notice to Representative.
Whenever a distribution is to be made or a notice given to holders of Senior
Indebtedness, the distribution may be made and the notice given to their
Representative.
Upon any payment or distribution of assets of the Company
referred to in this Article XV, the Trustee and the Debentureholders shall be
entitled to rely upon any order or decree made by any court of competent
jurisdiction or upon any certificate of such Representative or of the
liquidating trustee or agent or other person making any distribution to the
Trustee or to the Debentureholders for the purpose of ascertaining the persons
entitled to participate in such distribution, the holders of the Senior
Indebtedness and other indebtedness of the Company, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all other
facts pertinent thereto or to this Article XV.
Section 15.11 Rights of Trustee and Paying Agent.
Notwithstanding the provisions of this Article XV or any other provision of this
Indenture, the Trustee shall not be charged with knowledge of the existence of
any facts that would prohibit the making of any payment or distribution by the
Trustee, and the Trustee and the paying agent may continue to make payments on
the Debentures, unless the Trustee shall have actual knowledge or shall have
received at its Corporate Trust Office at least three Business Days prior to the
date of such payment written notice of facts that would cause the payment of any
principal, premium, if any, and interest with respect to the Debentures to
violate this Article XV. Only the Company or a Representative may give the
notice. Nothing in this Article XV shall impair the claims of, or payments to,
the Trustee under or pursuant to Section 7.6 hereof.
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The Trustee shall be entitled to rely on the delivery to it of
a written notice by a person representing such person to be a holder of Senior
Indebtedness (or a trustee or agent on behalf of such holder) to establish that
such notice has been given by a holder of Senior Indebtedness (or a trustee or
agent on behalf of any such holder). In the event that the Trustee determines in
good faith that further evidence is required with respect to the right of any
person as a holder of Senior Indebtedness to participate in any payment or
distribution pursuant to this Article XV, the Trustee may request such person to
furnish evidence to the reasonable satisfaction of the Trustee as to the amount
of Senior Indebtedness held by such person, the extent to which such person is
entitled to participate in such payment or distribution and any other facts
pertinent to the rights of such person under this Article XV, and if such
evidence is not furnished, the Trustee may defer any payment which it may be
required to make for the benefit of such person pursuant to the terms of this
Indenture pending judicial determination as to the rights of such person to
receive such payment.
The Trustee in its individual or any other capacity may hold
Senior Indebtedness with the same rights it would have if it were not Trustee.
Any paying agent, any authenticating agent, any conversion agent, any Debenture
registrar and their successors may do the same with like rights.
Section 15.12 Authorization to Effect Subordination. Each
holder of a Debenture by the holder's acceptance thereof authorizes and directs
the Trustee on the holder's behalf to take such action as may be necessary or
appropriate to effectuate the subordination as provided in this Article XV and
appoints the Trustee to act as the holder's attorney-in-fact for any and all
such purposes. Without limiting the foregoing, each Representative is hereby
irrevocably authorized and empowered (in its own name or in the name of the
Debentureholders or the Trustee or otherwise), but shall have no obligation, to
demand, sue for, collect and receive every payment or distribution referred to
in Section 15.3 above and give acquittance therefor and to file claims and
proofs of claim and take such other action as it may deem necessary or advisable
for the exercise or enforcement of any of the rights or interests of the holders
or owners of the Senior Indebtedness hereunder; provided that for purposes of
this Section 15.12 holders or owners of Senior Indebtedness may act only through
such Representative.
Section 15.13 Conversions Not Deemed Payment. For the purposes
of this Article XV only, the issuance and delivery of Common Stock upon
conversion of the Debentures in accordance with Article XIV shall not be deemed
to constitute a payment or distribution on account of the principal of or
interest on the Debentures or on account of the purchase or other acquisition of
Debentures. Nothing contained in this Article or elsewhere in this Indenture or
in the Debentures is intended to or shall impair, as among the Company, its
creditors other than holders of Senior Indebtedness and the holders, the right,
which is absolute and unconditional, of the holder of any Debenture to convert
such Debenture in accordance with Article XIV.
Section 15.14 Amendments. The provisions of this Article XV
shall not be amended or modified without the written consent of the holders of
Senior Indebtedness.
54
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ARTICLE XVI
MISCELLANEOUS PROVISIONS
Section 16.1 Provisions Binding on Company's Successors. All
the covenants, stipulations, promises and agreements in this Indenture made by
the Company shall bind its successors and assigns whether so expressed or not.
Section 16.2 Official Acts by Successor Company. Any act or
proceeding by any provision of this Indenture authorized or required to be done
or performed by any board (including the Board of Directors), committee or
officer of the Company shall and may be done and performed with like force and
effect by the like board, committee or officer of any corporation that shall at
the time be the lawful sole successor of the Company.
Section 16.3 Addresses for Notices, Etc. Any notice or demand
that by any provision of this Indenture is required or permitted to be given or
served by the Trustee or by the holders of Debentures on the Company shall be
deemed to have been sufficiently given or made, for all purposes if given or
served by being sent by prepaid overnight delivery or being deposited postage
prepaid by registered or certified mail in a post office letter box addressed
(until another address is filed by the Company with the Trustee) to Fields
Aircraft Spares, Inc., 2251-A Ward Avenue, Simi Valley, California, 93005,
Attention: President, with a copy to William D. Marsh, Ballard Spahr Andrews &
Ingersoll, 201 South Main, Suite 1200, Salt Lake City, Utah, 84111. Any notice,
direction, request or demand hereunder to or upon the Trustee shall be deemed to
have been sufficiently given or made, for all purposes, if given or served by
being sent by prepaid overnight delivery or being deposited postage prepaid by
registered or certified mail in a post office letter box addressed to the
Corporate Trust Office of the Trustee, which office is, at the date as of which
this Indenture is dated, located at Gartenstrasse 10, CH-8002, Zurich,
Switzerland, Attention: Dr. Dieter Wicki.
The Trustee, by notice to the Company, may designate
additional or different addresses for subsequent notices or communications.
Any notice or communication mailed to a Debentureholder shall
be mailed to him by first class mail, postage prepaid, at the address of such
Debentureholder as it appears on the Debenture register and shall be
sufficiently given to such Debentureholder if so mailed within the time
prescribed.
Failure to mail a notice or communication to a Debentureholder
or any defect in it shall not affect its sufficiency with respect to other
Debentureholders. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it.
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Section 16.4 Governing Law. This Indenture shall be deemed to
be a contract made under the substantive laws of Utah and for all purposes shall
be construed in accordance with the substantive laws of Utah without regard to
conflicts of laws principles thereof.
Section 16.5 Evidence of Compliance with Conditions Precedent;
Certificates to Trustee. Upon any application or demand by the Company to the
Trustee to take any action under any of the provisions of this Indenture, the
Company shall furnish to the Trustee an Officers' Certificate stating that all
conditions precedent, if any, provided for in this Indenture relating to the
proposed action have been complied with, and an Opinion of Counsel stating that,
in the opinion of such counsel, all such conditions precedent have been complied
with.
Each certificate or opinion provided for in this Indenture and
delivered to the Trustee with respect to compliance with a condition or covenant
provided for in this Indenture shall include: (1) a statement that the person
making such certificate or opinion has read such covenant or condition, (2) a
brief statement as to the nature and scope of the examination or investigation
upon which the statement or opinion contained in such certificate or opinion is
based, (3) a statement that, in the opinion of such person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with and (4) a statement as to whether or not, in the opinion of such
person, such condition or covenant has been complied with.
Section 16.6 Legal Holidays. In any case where any interest
payment date, date fixed for redemption or stated maturity of any Debenture or
the last date on which a holder has the right to convert his Debentures shall
not be a Business Day, then (notwithstanding any other provision of this
Indenture or of the Debentures) payment of interest or principal (and premium,
if any) or conversion of the Debentures need not be made on such date, but may
be made on the next succeeding Business Day with the same force and effect as if
made on the Interest Payment Date, date fixed for redemption, or at the stated
maturity, or on such last day for conversion, provided that no interest shall
accrue for the period from and after such interest payment date, date fixed for
redemption or stated maturity, as the case may be.
Section 16.7 Benefits of Indenture. Nothing in this Indenture
or in the Debentures, expressed or implied, shall give to any person, other than
the parties hereto, any paying agent, any authenticating agent, any conversion
agent, any Debenture registrar and their successors hereunder and the holders of
Debentures, any benefit or any legal or equitable right, remedy or claim under
this Indenture.
Section 16.8 Table of Contents, Headings Etc. The table of
contents and the titles and headings of the articles and sections of this
Indenture have been inserted for convenience of reference only, are not to be
considered a part hereof, and shall in no way modify or restrict any of the
terms or provisions hereof.
Section 16.9 Authenticating Agent. The Trustee may appoint an
authenticating agent that shall be authorized to act on its behalf and subject
to its direction in the authentication and delivery of Debentures in connection
with the original issuance thereof and transfers and exchanges of Debentures
56
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hereunder, including under Sections 2.4, 2.5, 2.6, 2.7 and 3.3, as fully to all
intents and purposes as though the authenticating agent had been expressly
authorized by this Indenture and those Sections to authenticate and deliver
Debentures. For all purposes of this Indenture, the authentication and delivery
of Debentures by the authenticating agent shall be deemed to be authentication
and delivery of such Debentures "by the Trustee" and a certificate of
authentication executed on behalf of the Trustee by an authenticating agent
shall be deemed to satisfy any requirement hereunder or in the Debentures for
the Trustee's certificate of authentication.
Any corporation into which any authenticating agent may be
merged or converted or with which it may be consolidated, or any corporation
resulting from any merger, consolidation or conversion to which any
authenticating agent shall be a party, or any corporation succeeding to the
corporate trust business of any authenticating agent, shall be the successor of
the authenticating agent hereunder, if such successor company is otherwise
eligible under this Section, without the execution or filing of any paper or any
further act on the part of the parties hereto or the authenticating agent or
such successor company.
Any authenticating agent may at any time resign by giving
written notice of resignation to the Trustee and to the Company. The Trustee may
at any time terminate the agency of any authenticating agent by giving written
notice of termination to such authenticating agent and to the Company. Upon
receiving such a notice of resignation or upon such a termination, or in case at
any time any authenticating agent shall cease to be eligible under this Section,
the Trustee shall promptly appoint a successor authenticating agent (which may
be the Trustee), shall give written notice of such appointment to the Company
and shall mail notice of such appointment to all holders of Debentures as the
names and addresses of such holders appear on the Debenture register.
The Company agrees to pay to the authenticating agent from
time to time reasonable compensation for its services.
The provisions of Sections 7.2, 7.3, 7.4, 8.3 and this Section
16.9 shall be applicable to any authenticating agent.
Section 16.10 Execution in Counterparts. This Indenture may be
executed in any number of counterparts, each of which shall be an original, but
such counterparts shall together constitute but one and the same instrument.
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Etablissement Pour le Placement Prive hereby accepts the
trusts in this Indenture declared and provided, upon the terms and conditions
hereinabove set forth.
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly signed and attested, all as of the date first written
above.
FIELDS AIRCRAFT SPARES, INC.
By: /s/ Peter Frohlich
----------------------
Name:Peter Frohlich
Title:Chairman
Attest:
/s/ Lawrence J. Troyna
- -----------------------
ETABLISSEMENT POUR LE PLACEMENT PRIVE,
as Trustee
By: /s/ Herbert R. Towning
-----------------------
Name:Herbert R. Towning
Title:
Attest:
/s/ Judith White
- -------------------
VON GRAFFENREID AG, as Paying Agent
By: /s/
-------------------------
Name:
Title: Authorized Signatory
Attest:
/s/ Herbert R. Towning
- -----------------------
<PAGE>
EXHIBIT A - FORM OF DEBENTURE
[FORM OF FACE OF DEBENTURE]
No. B-
$-----------------
CUSIP
FIELDS AIRCRAFT SPARES, INC.
8.5% Subordinated Redeemable Debentures Due 2000
THE DEBENTURE EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS, AND 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 IN THE FOLLOWING SENTENCE. BY ACQUISITION HEREOF, THE HOLDER
(1) REPRESENTS THAT (A) IT IS AN "ACCREDITED INVESTOR" (AS DEFINED IN
RULE 501(a) UNDER THE SECURITIES ACT) ("ACCREDITED INVESTOR") AND (B)
IT IS NOT A U.S. PERSON AND IS ACQUIRING THE DEBENTURE EVIDENCED HEREBY
IN AN OFFSHORE TRANSACTION; (2) AGREES THAT IT WILL NOT RESELL OR
OTHERWISE TRANSFER THE DEBENTURE EVIDENCED HEREBY OR THE COMMON STOCK
ISSUABLE UPON CONVERSION OF SUCH DEBENTURE EXCEPT (A) TO THE COMPANY OR
ANY SUBSIDIARY THEREOF, (B) TO A QUALIFIED INSTITUTIONAL BUYER IN
COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C) TO AN
ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO
ETABLISSEMENT POUR LE PLACEMENT PRIVE, AS TRUSTEE, A SIGNED LETTER
CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE
RESTRICTIONS ON TRANSFER OF THE DEBENTURE EVIDENCED HEREBY (THE FORM OF
WHICH LETTER CAN BE OBTAINED FROM SUCH TRUSTEE), (D) OUTSIDE THE UNITED
STATES IN COMPLIANCE WITH RULE 903 OR RULE 904 OF REGULATION S UNDER
THE SECURITIES ACT, (E) PURSUANT TO THE EXEMPTION FROM REGISTRATION
PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR (F)
PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE
UNDER THE SECURITIES ACT; AND (3) AGREES THAT IT WILL DELIVER TO EACH
PERSON TO WHOM THE DEBENTURE EVIDENCED HEREBY IS TRANSFERRED
A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION
WITH ANY TRANSFER OF THE DEBENTURE EVIDENCED HEREBY, THE HOLDER
A-1
<PAGE>
MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF
RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS
CERTIFICATE TO ETABLISSEMENT POUR LE PLACEMENT PRIVE, AS TRUSTEE. THE
HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO ETABLISSEMENT POUR LE
PLACEMENT PRIVE, AS TRUSTEE, SUCH CERTIFICATIONS, LEGAL OPINIONS OR
OTHER INFORMATION AS THE COMPANY MAY REASONABLY REQUIRE TO CONFIRM THAT
SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION,"
"UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY
REGULATION S UNDER THE SECURITIES ACT.
FIELDS AIRCRAFT SPARES, INC., a corporation duly organized and
validly existing under the laws of the State of Utah (the "Company"), which term
includes any Successor Company under the Indenture referred to on the reverse
hereof, for value received hereby promises to pay to
___________________________, or registered assigns, the principal sum of
______________________________________ Dollars on September 30, 2000, at the
Corporate Trust Office of the Trustee, in such coin or currency of the United
States of America as at the time of payment shall be legal tender for the
payment of public and private debts, and to pay interest, semi-annually on March
31 and September 30 of each year (each an "Interest Payment Date"), commencing
March 31, 1998, on said principal sum at said office or agency, in like coin or
currency, at the rate per annum specified in the title of this Debenture, from
September 30, 1997 or the most recent Interest Payment Date, as the case may be,
next preceding the date of this Debenture to which interest has been paid or
duly provided for, unless the date hereof is a date to which interest has been
paid or duly provided for, in which case from the date of this Debenture, or
unless no interest has been paid or duly provided for on the Debentures, in
which case from September 30, 1997, until payment of said principal sum has been
made or duly provided for. The interest so payable on any March 31 or September
30 will be paid to the person in whose name this Debenture (or one or more
Predecessor Debentures) is registered at the close of business on the record
date, which shall be the March 15 or September 15 (whether or not a Business
Day) next preceding such March 31 or September 30, respectively; provided that
any such interest not punctually paid or duly provided for shall be payable as
provided in the Indenture. Interest shall be paid by check mailed to the
registered holder at the registered address of such person unless other
arrangements are made in accordance with the provisions of the Indenture.
Reference is made to the further provisions of this Debenture
set forth on the reverse hereof, including, without limitation, provisions
giving the holder of this Debenture the right to convert up to 30% of the
principal amount of this Debenture into Common Stock of the Company on the terms
and subject to the limitations referred to on the reverse hereof and as more
fully specified in the Indenture. Such further provisions shall for all purposes
have the same effect as though fully set forth at this place.
A-2
<PAGE>
This Debenture shall not be valid or become obligatory for any
purpose until the certificate of authentication hereon shall have been manually
signed by the Trustee, or a duly authorized authenticating agent under the
Indenture.
IN WITNESS WHEREOF, the Company has caused this Debenture to
be duly executed under its corporate seal.
FIELDS AIRCRAFT SPARES, INC.
By: __________________________________
Name:
Title:
Attest:
___________________________________
Secretary
CERTIFICATE OF AUTHENTICATION
Dated:
This is one of the Debentures described in the within-named
Indenture.
By: _______________________________________
Authorized Signatory
A-3
<PAGE>
[FORM OF REVERSE OF DEBENTURE]
FIELDS AIRCRAFT SPARES, INC.
8.5% Subordinated Redeemable Debentures Due 2000
This Debenture is one of a duly authorized issue of Debentures
of the Company, designated as its 8.5% Subordinated Redeemable Debentures Due
2000 (herein called the "Debentures"), limited to the aggregate principal amount
of $10,000,000 all issued or to be issued under and pursuant to an Indenture
dated as of September 30, 1997 (the "Indenture"), between the Company and
Etablissement Pour le Placement Prive, as trustee (the "Trustee"), to which
Indenture and all indentures supplemental thereto reference is hereby made for a
complete description of the rights, limitations of rights, obligations, duties
and immunities thereunder of the Trustee, the Company and the holders of the
Debentures. Each Debenture is subject to, and qualified by, all such terms as
set forth in the Indenture certain of which are summarized hereon and each
holder of a Debenture is referred to the corresponding provisions of the
Indenture for a complete statement of such terms. To the extent that there is
any inconsistency between the summary provisions set forth in the Debentures and
the Indenture, the provisions of the Indenture shall govern. Capitalized terms
used but not defined in this Debenture shall have the meanings ascribed to them
in the Indenture.
In case an Event of Default, as defined in the Indenture,
shall have occurred and be continuing, the principal of, premium, if any, and
accrued interest on all Debentures may be declared, and upon said declaration
shall become, due and payable, in the manner, with the effect and subject to the
conditions provided in the Indenture.
The payment of principal of, premium, if any, and interest on
the Debentures will, to the extent set forth in the Indenture, be subordinated
in right of payment to the prior payment in full of all Senior Indebtedness (as
defined in the Indenture). Upon any distribution to creditors of the Company in
a liquidation or dissolution of the Company or in a bankruptcy, reorganization,
insolvency, receivership or similar proceeding related to the Company or its
property, in an assignment for the benefit of creditors or any marshalling of
the Company's assets and liabilities, the holders of all Senior Indebtedness
will first be entitled to receive payment in full of all amounts due or to
become due thereon before the holders of the Debentures will be entitled to
receive any payment in respect of the principal of, premium, if any, or interest
on the Debentures (except that holders of Debentures may receive securities that
are subordinated at least to the same extent as the Debentures to Senior
Indebtedness and any securities issued in exchange for Senior Indebtedness).
The Company also may not make any payment upon or in respect
of the Debentures (except in such subordinated securities) and may not acquire
from the Trustee or the holder of any Debenture for cash or property (other than
securities subordinated to at least the same extent as the Debenture to (i) all
Senior Indebtedness and (ii) any securities issued in exchange for Senior
Indebtedness) until all Senior Indebtedness has been paid in full if (a) a
default in the payment of the principal of, premium, if any, or interest on
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Senior Indebtedness occurs and is continuing beyond any applicable period of
grace or (b) any other default occurs and is continuing with respect to Senior
Indebtedness that permits holders of the Senior Indebtedness as to which such
default relates to accelerate its maturity and the Trustee receives a notice of
such default from the representative or representatives of holders of at least a
majority in principal amount of Senior Indebtedness then outstanding. Payments
on the Debentures may and shall be resumed upon the date on which such default
is cured or waived.
In the event that the Trustee (or paying agent if other than
the Trustee) or any holder of the Debentures receives any payment of principal
or interest with respect to the Debentures at a time when such payment is
prohibited under the Indenture, such payment shall be held in trust for the
benefit of, and immediately shall be paid over and delivered to, the holders of
Senior Indebtedness or their representative as their respective interests may
appear. After all Senior Indebtedness is paid in full and until the Debentures
are paid in full, the holders of the Debentures shall be subrogated (equally and
ratably with all other Indebtedness pari passu with the Debentures) to the
rights of holders of Senior Indebtedness to receive distributions applicable to
Senior Indebtedness to the extent that distributions otherwise payable to the
holders of the Debentures have been applied to the payment of Senior
Indebtedness.
The Indenture contains provisions permitting the Company and
the Trustee, with the consent of the holders of not less than a majority in
aggregate principal amount of the Debentures at the time outstanding, evidenced
as in the Indenture provided, to execute supplemental indentures adding any
provisions to or changing in any manner or eliminating any of the provisions of
the Indenture or of any supplemental indenture or modifying in any manner the
rights of the holders of the Debentures; provided that no such supplemental
indenture shall (i) extend the fixed maturity of any Debenture, or reduce the
rate or extend the time of payment of interest thereon, or reduce the principal
amount thereof or premium, if any, thereon, or reduce any amount payable on
redemption thereof, or impair or affect the right of any Debentureholder to
institute suit for the payment thereof, or make the principal thereof or
interest or premium, if any, thereon payable in any coin or currency other than
that provided in the Debentures, modify the subordination provisions in a manner
adverse to the holders of the Debentures, or impair the right to convert the
Debentures into Common Stock subject to the terms set forth in the Indenture
without the consent of the holder of each Debenture so affected or (ii) reduce
the aforesaid percentage of Debentures, the holders of which are required to
consent to any such supplemental indenture, without the consent of the holders
of all Debentures then outstanding. The Company and the Trustee may amend or
supplement the Indenture without notice to or consent of any holder of
Debentures in certain events specified in the Indenture. It is also provided in
the Indenture that, prior to any declaration accelerating the maturity of the
Debentures, the holders of a majority in aggregate principal amount of the
Debentures at the time outstanding may on behalf of the holders of all of the
Debentures waive any past default or Event of Default under the Indenture and
its consequences except a default in the payment of interest or any premium on
or the principal of any of the Debentures, a failure by the Company to convert
any Debentures into Common Stock of the Company, unless otherwise excused
pursuant to the terms of the Indenture, or a default in respect of a covenant or
provision of the Indenture that under Article X thereof cannot be modified or
amended without the consent of the holders of all Debentures then outstanding.
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Any such consent or waiver by the holder of this Debenture (unless revoked as
provided in the Indenture) shall be conclusive and binding upon such holder and
upon all future holders and owners of this Debenture and any Debentures that may
be issued in exchange or substitution hereof, irrespective of whether or not any
notation thereof is made upon this Debenture or such other Debentures.
No reference herein to the Indenture and no provision of this
Debenture or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of and any
premium and interest on this Debenture at the place, at the respective times, at
the rate and in the coin or currency herein prescribed.
Interest on the Debentures shall be computed on the basis of a
360-day year composed of twelve 30-day months.
The Debentures are issuable in registered form without coupons
in denominations of $1,000 principal amount and integral multiples thereof. At
the office or agency of the Company referred to on the face hereof, and in the
manner and subject to the limitations provided in the Indenture, without payment
of any service charge but with payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in connection with any
registration or exchange of Debentures, Debentures may be exchanged for a like
aggregate principal amount of Debentures of other authorized denominations.
The Debentures are not redeemable at the option of the Company
prior to March 31, 1999. At any time on or after that date, the Debentures may
be redeemed at the Company's option, upon notice as set forth in the Indenture,
in whole at any time or in part from time to time, at 100% of the principal
amount, together with accrued interest to the date fixed for redemption;
provided that if the date fixed for redemption is a date on or after the record
date and on or before the next following Interest Payment Date, then the
interest payable on such date shall be paid to the holder of record on the next
preceding March 15 or September 15, respectively.
In the event the Company, in a bulk sale transaction, sells
its entire existing inventory of spare parts purchased from Douglas Aircraft
Corporation pursuant to contract numbers DAC 88-28-D, DAC 91-03-P and DAC
91-04-P (the "Inventory"), the Company shall deposit, within 90 days of such
sale, in an account specified by the Trustee, 50% of the net proceeds of such
sale, after deducting all amounts paid or payable to any lender having a
security interest in such Inventory, and all costs, expenses and taxes of the
Company, incurred in any way in connection with the sale, provided that 50% of
such net proceeds exceeds $300,000 (the "Minimum Proceeds").
The Company shall give written notice to the Trustee and each
Debentureholder of the sale of Inventory resulting in the receipt by the Company
of the Minimum Proceeds, by first-class mail, postage prepaid, at the
Debentureholder's address appearing in the Debenture register, within 45 days of
the sale, stating, among other things, that (i) a sale of Inventory has occurred
and (ii) 50% of the amount of such net proceeds will be used to redeem the
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Debentures at 100% of their principal amount, plus accrued interest to the
redemption date, on a pro rata basis, unless at least 66 2/3% of the
Debentureholders consent, within 30 days of such notice to allow the Company to
retain the proceeds for working capital purposes.
Subject to the provisions of the Indenture, the holder hereof
has the one-time right, at its option, at any time after 90 days following the
latest date of original issuance of the Debentures and prior to the close of
business on September 27, 2000, subject to prior redemption or repurchase, or,
as to all or any portion hereof called for redemption, prior to the close of
business one business day before the date fixed for redemption (unless the
Company shall default in payment due upon redemption thereof), to convert up to
a maximum of 30% (less any amounts converted pursuant to the Mandatory
Conversion described below) of the principal hereof or any portion of such
principal that is $1,000 or an integral multiple thereof, into that number of
fully paid and non-assessable shares of the Company's Common Stock, as said
shares shall be constituted at the date of conversion, obtained by dividing the
principal amount of this Debenture or portion thereof to be converted by the
conversion price (the "Conversion Price") equal to the greater of (i) 85% of the
average closing price of the Company's Common Stock during the 20-Trading Day
period ending on the date upon which the holder exercises the right of
conversion, and (ii) $12.00 per share or such conversion price as adjusted from
time to time as provided in the Indenture, upon surrender of this Debenture,
together with a conversion notice as provided in the Indenture, to the Company
at the Corporate Trust Office of the Trustee, and, unless the shares issuable on
conversion are to be issued in the same name as this Debenture, duly endorsed
by, or accompanied by instruments of transfer in form satisfactory to the
Company duly executed by, the holder or by his duly authorized attorney.
In the event that, during any consecutive 20-Trading Day
period, the average closing price of the Company's Common Stock equals or
exceeds $12.00 per share, the Company may, within 30 days of such 20-Trading Day
period, require the conversion (the "Mandatory Conversion") of up to an
aggregate of 20% of the principal amount of outstanding Debentures, pro rata, at
the Conversion Price. The Company shall give notice to the Trustee and each
Debentureholder within ten days of the 20-Trading Day period of its intent to
convert a portion of the Debentures.
Except as described in the Indenture, no adjustment will be
made on conversion of any Debentures for interest accrued thereon or for
dividends paid on any Common Stock issued. A Holder of Debentures at the close
of business on a record date will be entitled to receive the interest payable on
such Debentures on the corresponding interest payment date. However, Debentures
surrendered for conversion during the period from the close of business on a
record date to the opening of business on the next succeeding interest payment
date must be accompanied by funds equal to the interest payable on such
succeeding interest payment date on the principal amount so converted (unless
such Debenture or portion thereof being converted is called for redemption on a
redemption date during the period from the close of business on or after any
record date to the close of business on the business day following the
corresponding interest payment date). The interest payment with respect to a
Debenture called for redemption on a date between the close of business on any
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<PAGE>
record date for the payment of interest to the close of business on the business
day following the corresponding interest payment date and surrendered for
conversion during that period will be payable on the corresponding interest
payment date to the registered Holder at the close of business on that record
date (notwithstanding the conversion of such Debenture before the corresponding
interest payment date). A Holder of Debentures who elects to convert during that
period need not include funds equal to the interest paid. The Company is not
required to issue fractional shares of Common Stock upon conversion of
Debentures and, in lieu thereof, will pay a cash adjustment based upon the
conversion price.
Upon due presentment for registration of transfer of this
Debenture at the Corporate Trust Office of the Trustee, a new Debenture or
Debentures of authorized denominations for an equal aggregate principal amount
will be issued to the transferee in exchange thereof, subject to the conditions
and limitations provided in the Indenture, without charge except for any tax or
other governmental charge imposed in connection therewith.
The Company, the Trustee, any authenticating agent, any paying
agent, any conversion agent and any Debenture registrar may deem and treat the
registered holder hereof as the absolute owner of this Debenture (whether or not
this Debenture shall be overdue and notwithstanding any notation of ownership or
other writing hereon made by anyone other than the Company or any Debenture
registrar), for the purpose of receiving payment hereof, or on account hereof,
for the conversion hereof and for all other purposes, and neither the Company
nor the Trustee nor any other authenticating agent nor any paying agent nor any
other conversion agent nor any Debenture registrar shall be affected by any
notice to the contrary. All payments made to or upon the order of such
registered holder shall, to the extent of the sum or sums paid, satisfy and
discharge liability for monies payable on this Debenture.
No recourse for the payment of the principal of or any premium
or interest on this Debenture, or for any claim based hereon or otherwise in
respect hereof, and no recourse under or upon any obligation, covenant or
agreement of the Company in the Indenture or any indenture supplemental thereto
or in any Debenture, or because of the creation of any indebtedness represented
thereby, shall be had against any incorporator, shareholder, officer or
director, as such, past, present or future, of the Company or of any Successor
Company, either directly or through the Company or any Successor Company,
whether by virtue of any constitution, statute or rule of law or by the
enforcement of any assessment or penalty or otherwise, all such liability being,
by the acceptance hereof and as part of the consideration for the issue hereof,
expressly waived and released.
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ABBREVIATIONS
The following abbreviations, when used in the inscription of
the face of this Debenture, shall be construed as though they were written out
in full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT -
TEN ENT - as tenants by the entireties __________________ Custodian
JT TEN - as joint tenants with right of (Cust)
survivorship and not as tenants __________________ under
in common (Minor)
Uniform Gifts to
Minors Act __________________
(State)
Additional abbreviations may also be used
though not in the above list.
A-9
<PAGE>
[FORM OF CONVERSION NOTICE]
CONVERSION NOTICE
To: Fields Aircraft Spares, Inc.
The undersigned registered owner of this Debenture hereby
irrevocably exercises the option to convert this Debenture, or the portion
hereof (which is $1,000 principal amount or an integral multiple thereof) below
designated, into Common Shares, par value $.05 per share, of the Company in
accordance with the terms of the Indenture referred to in this Debenture, and
directs that the shares issuable and deliverable upon such conversion, together
with any check in payment for fractional shares and any Debentures representing
any unconverted principal amount hereof, be issued and delivered to the
registered holder hereof unless a different name has been indicated below. If
shares or any portion of this Debenture not converted are to be issued in the
name of a person other than the undersigned, the undersigned will check the
appropriate box below and pay all transfer taxes payable with respect thereto.
Any amount required to be paid to the undersigned on account of interest
accompanies this Debenture.
Dated:_______________________ Contact Person: ____________________
Fax Number:_________________________
_____________________________ Telephone Number:___________________
- -----------------------------
Signature(s)
Signature(s) must be guaranteed by an eligible Guarantor Institution (banks,
stock brokers, savings and loan associations and credit unions) with membership
in an approved signature guarantee medallion program pursuant to Securities and
Exchange Commission Rule 17Ad-15 if Common Shares are to be issued, or
Debentures to be delivered, other than to and in the name of the registered
holder.
_______________________________________
Signature Guarantee
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<PAGE>
Fill in for registration of shares if to be issued, and Debentures if to be
delivered, other than to and in the name of the registered holder:
_________________________________________________________
(Name)
_________________________________________________________
(Street Address)
_________________________________________________________
(City, State and Zip Code)
Please print name and address
Principal amount to be converted (if less than all) $ ____
Social Security or ________________________________
Other Taxpayer Identification Number
A-11
<PAGE>
[FORM OF ASSIGNMENT]
For value received _____________________________ hereby
sell(s), assign(s) and transfer(s) unto _________________________ (Please insert
social security or other identifying number of assignee) the within Debenture,
and hereby irrevocably constitutes and appoints ________________________________
attorney to transfer the said Debenture on the books of the Company, with full
power of substitution in the premises.
In connection with any transfer of the within Debenture, the
undersigned confirms that such Debenture is being transferred:
[_] To Fields Aircraft Spares, Inc. or a subsidiary thereof; or
[_] Pursuant to and in compliance with Rule 144A under the Securities Act
of 1933, as amended; or
[_] To an accredited investor pursuant to and in compliance with the
Securities Act of 1933, as amended; or
[_] Pursuant to and in compliance with Regulation S under the Securities
Act of 1933, as amended; or
[_] Pursuant to and in compliance with Rule 144 under the Securities Act of
1933, as amended.
Unless one of the boxes above is checked, the Trustee will
refuse to register any of the within Debentures in the name of any person other
than the registered holder thereof (or hereof); provided, however, that the
Trustee may, in its sole discretion, register the transfer of such Debentures if
it has received such certifications, legal opinions and/or other information as
the Company has 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.
In addition, if the transferee is an accredited investor or a
purchaser who is not a U.S. person, the holder must furnish to the Trustee (i)
in the case of an accredited investor, a signed letter containing certain
representations and agreements relating to the restrictions on transfer of the
security evidenced hereby in substantially the form of Exhibit B to the
Indenture and (ii) such other certifications, legal opinions or other
information as it may reasonably require to confirm that such transfer is being
made pursuant to an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act of 1933, as amended.
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Dated: _______________________
______________________________
______________________________
Signature(s)
Signature(s) must be guaranteed by an eligible Guarantor Institution (banks,
stock brokers, savings and loan associations and credit unions) with membership
in an approved signature guarantee medallion program pursuant to Securities and
Exchange Commission Rule 17Ad-15.
_________________________________
Signature Guarantee
NOTICE: The signature on the conversion notice or the assignment must correspond
with the name as written upon the face of the Debenture in every particular
without alteration or enlargement or any change whatever.
A-13
<PAGE>
EXHIBIT B - FORM OF TRANSFEREE CERTIFICATE FOR DEBENTURES
TO BE ISSUED TO ACCREDITED INVESTORS
Etablissement Pour le Placement Prive
as Trustee
Gartenstrasse 10
CH-8002
Zurich, Switzerland
Attention: Corporate Trust Administration
Re: Fields Aircraft Spares, Inc.
8.5% Subordinated Redeemable
Debentures Due 2000 (the "Debentures")
Reference is hereby made to the Indenture dated as of
September 30, 1997 (as supplemented from time to time, the "Indenture") between
Fields Aircraft Spares, Inc. and Etablissement Pour le Placement Prive, as
Trustee. Capitalized terms used but not defined herein shall have the meanings
given to them in the Indenture.
The undersigned is delivering this letter in connection with
the transfer of Debentures to the undersigned, which Debentures are to be held
by the undersigned in definitive registered form.
The undersigned hereby confirms that:
(i) the undersigned is an "accredited investor" within the
meaning of Rule 501(a) under the Securities Act of 1933, as amended (the
"Securities Act"), or an entity in which all of the equity owners are accredited
investors within the meaning of Rule 501(a) under the Securities Act (an
"Accredited Investor");
(ii) (A) any purchase of Debentures by the undersigned will be
for the undersigned's own account or for the account of one or more other
Accredited Investors or as fiduciary for the account of one or more trusts, each
of which is an "accredited investor" within the meaning of Rule 501(a)(7) under
the Securities Act and for each of which we exercise sole investment discretion
or (B) we are a "bank," within the meaning of Section 3(a)(2) of the Securities
Act, or a "savings and loan association" or other institution described in
Section 3(a)(5)(A) of the Securities Act that is acquiring Debentures as
fiduciary for the account of one or more institutions for which we exercise sole
investment discretion;
(iii) the undersigned has such knowledge and experience in
financial and business matters that the undersigned is capable of evaluating the
merits and risks of purchasing Debentures;
B-1
<PAGE>
(iv) the undersigned is not acquiring Debentures with a view
to distribution thereof or with any present intention of offering or selling
Debentures or the Common Stock issuable upon conversion thereof, except as
permitted below; provided that the disposition of the undersigned's property and
property of any accounts for which the undersigned is acting as fiduciary shall
remain at all times within the undersigned's control; and
(v) the undersigned acknowledges that it has had access to
such financial and other information as the undersigned deems necessary in
connection with the undersigned's decision to purchase Debentures.
The undersigned understands that the Debentures have been
issued in a transaction not involving any public offering within the United
States within the meaning of the Securities Act and that the Debentures and the
shares of Common Stock issuable upon conversion thereof (collectively, the
"Securities") have not been registered under the Securities Act or any
applicable state securities laws, and the undersigned agrees, on the
undersigned's own behalf and on behalf of each account for which the undersigned
acquires any Securities, that if in the future the undersigned decides to resell
or otherwise transfer such Securities, such Securities may be resold or
otherwise transferred only (a) to the Company or any subsidiary thereof, (b) to
a person who is a "qualified institutional buyer" (as defined in Rule 144A under
the Securities Act) in a transaction meeting the requirements of Rule 144A, (c)
to an Accredited Investor that, prior to such transfer, furnishes to the trustee
(or transfer agent, as the case may be) for such Securities a signed letter
containing certain representations and agreements relating to the restrictions
on transfer of such Securities (the form of which letter can be obtained from
such trustee, or transfer agent, as the case may be), (d) outside the United
States in a transaction meeting the requirements of Regulation S under the
Securities Act, (e) pursuant to the exemption from registration provided by Rule
144 under the Securities Act (if applicable) or (f) pursuant to a registration
statement which has been declared effective under the Securities Act. The
undersigned agrees that any such transfer of Securities referred to in this
paragraph shall be in accordance with applicable securities laws of any State of
the United States or any other applicable jurisdiction and in accordance with
the legends set forth on the Securities. The undersigned further agrees to
provide any person purchasing any of the Securities from the undersigned a
notice advising such purchaser that resales of such Securities are restricted as
stated herein. The undersigned understands that the registrar and transfer agent
for the Securities will not be required to accept for registration or transfer
any Securities, except upon presentation of evidence satisfactory to the Company
that the foregoing restrictions on transfer have been complied with. The
undersigned further understands that any Securities will be in the form of
definitive physical certificates and that such certificates will bear a legend
(unless the sale of the Securities has been registered under the Securities Act)
reflecting the substance of this paragraph.
The undersigned acknowledges that the Transferor, others and
you will rely upon the undersigned's confirmation, acknowledgments and
agreements set forth herein, and the undersigned agrees to notify you promptly
in writing if any of the undersigned's representations or warranties herein
ceases to be accurate and complete.
B-2
<PAGE>
Dated: __________, ____
-------------------------------------
(Name of Transferor)
By:_________________________________
Name:
Title:
Address:
B-3
