<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-A/A
AMENDMENT NO. 1
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR 12(g) OF THE
SECURITIES EXCHANGE ACT OF 1934
PIER 1 IMPORTS, INC.
(Exact Name of Registrant as Specified in its Charter)
Delaware 75-1729843
(State of Incorporation (I.R.S. Employer
or Organization) Identification no.)
301 Commerce Street, Suite 600
Fort Worth, Texas 76102
(Address of Principal Executive Offices) (Zip Code)
Securities to be registered pursuant to Section 12(b) of the Act:
<TABLE>
<CAPTION>
Title of Each Class Name of Each Exchange on Which
to be so Registered Each Class is to be Registered
------------------- ------------------------------
<S> <C>
5-3/4% Convertible Subordinated New York Stock Exchange
Notes Due 2003
</TABLE>
If this Form relates to the registration of a class of debt securities
and is effective upon filing pursuant to General Instruction A(c)(1), please
check the following box. / /
If this Form relates to the registration of a class of debt securities
and is to become effective simultaneously with the effectiveness of a
concurrent registration statement under the Securities Act of 1933 pursuant to
General Instruction A(c)(2), please check the following box. / /
Securities to be registered pursuant to Section 12(g) of the Act:
None
<PAGE> 2
Item 1. Description of Registrant's Securities to be Registered
The description of the Registrant's 5-3/4% Convertible Subordinated
Notes Due 2003 is incorporated herein by reference to the section captioned
"Description of the Notes" on pages 32 to 39, inclusive, of the Prospectus
constituting a part of the Registrant's Registration Statement on Form S-3,
Reg. No. 333-10677, filed with the Securities and Exchange Commission on August
23, 1996, as amended by Amendment No. 3 to Registration Statement on Form S-3,
filed with the Securities and Exchange Commission on September 17, 1996.
Item 2. Exhibits.
3(i) Certificate of Incorporation of the Registrant (incorporated by
reference to Exhibit 3(i) to the Registrant's Form 10-K for the
fiscal year ended March 2, 1996).
3(ii) By-Laws of the Registrant (incorporated by reference to Exhibit
3(ii) to the Registrant's Form 10-Q for the fiscal quarter ended
November 26, 1994).
4.1 Form of Indenture to be dated as of September 18, 1996, between
the Registrant and Wells Fargo Bank (Texas), N.A. as Trustee,
relating to the 5-3/4% Convertible Subordinated Notes, including
form of 5-3/4% Convertible Subordinated Note.
4.2 Rights Agreement, dated as of December 9, 1994, by and between
the Registrant and Wells Fargo Bank (Texas), N.A. (formerly
named First Interstate Bank, N.A.), as Rights Agent
(incorporated by reference to Exhibit 4 to the Registrant's
Registration Statement on Form 8-A, Reg. No. 1-7832, dated
December 20, 1994).
SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the Registrant has duly caused this amendment to registration
statement to be signed on its behalf by the undersigned, thereto duly
authorized.
Dated: September 17, 1996
PIER 1 IMPORTS, INC.
By: /s/ J. RODNEY LAWRENCE
----------------------------
J. Rodney Lawrence
Senior Vice President
2
<PAGE> 1
EXHIBIT 4.1
================================================================================
PIER 1 IMPORTS, INC.,
Company
and
WELLS FARGO BANK (TEXAS), N.A.,
Trustee
INDENTURE
Dated as of September __, 1996
================================================================================
$86,250,000
5 3/4% Convertible Subordinated Notes Due 2003
================================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
ARTICLE 1. DEFINITIONS AND INCORPORATION BY REFERENCE . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.2 Other Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 1.3 Incorporation by Reference of Trust Indenture Act . . . . . . . . . . . . . . . . . . . . 6
Section 1.4 Rules of Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE 2. THE NOTES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 2.1 Form and Dating . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 2.2 Execution and Authentication . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 2.3 Registrar, Paying Agent and Conversion Agent . . . . . . . . . . . . . . . . . . . . . . . 8
Section 2.4 Paying Agent to Hold Money in Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 2.5 Holder Lists . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 2.6 Transfer and Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 2.7 Replacement Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 2.8 Outstanding Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 2.9 Treasury Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 2.10 Temporary Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 2.11 Cancellation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 2.12 Defaulted Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 2.13 Deposit of Moneys . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
ARTICLE 3. REDEMPTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 3.1 Notices to Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 3.2 Selection of Notes to be Redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 3.3 Notice of Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 3.4 Effect of Notice of Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 3.5 Deposit of Redemption Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 3.6 Notes Redeemed in Part . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
ARTICLE 4. COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 4.1 Payment of Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 4.2 Stay, Extension and Usury Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 4.3 Continued Existence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 4.4 Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 4.5 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 4.6 Change of Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 4.7 Compliance Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 4.8 Further Assurance to the Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
</TABLE>
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<TABLE>
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ARTICLE 5. SUCCESSORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 5.1 When Company May Merge or Sell Assets . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 5.2 Successor Substituted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
ARTICLE 6. DEFAULTS AND REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 6.1 Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 6.2 Acceleration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 6.3 Other Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 6.4 Waiver of Existing and Past Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 6.5 Control by Majority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 6.6 Limitation on Suits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 6.7 Rights of Holders to Receive Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 6.8 Collection Suit by Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 6.9 Trustee May File Proofs of Claim . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 6.10 Priorities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 6.11 Undertaking for Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
ARTICLE 7. TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 7.1 Duties of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 7.2 Rights of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 7.3 Individual Rights of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 7.4 Trustee's Disclaimer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 7.5 Notice of Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 7.6 Reports by Trustee to Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 7.7 Compensation and Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 7.8 Replacement of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 7.9 Successor Trustee by Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 7.10 Eligibility; Disqualification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 7.11 Preferential Collection of Claims Against Company . . . . . . . . . . . . . . . . . . . . 31
ARTICLE 8. DISCHARGE OF INDENTURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 8.1 Termination of Company's Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 8.2 Repayment to Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
ARTICLE 9. AMENDMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 9.1 Without Consent of Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 9.2 With Consent of Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 9.3 Compliance with Trust Indenture Act . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 9.4 Revocation and Effect of Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 9.5 Notation on or Exchange of Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 9.6 Trustee Protected . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
ARTICLE 10. CONVERSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 10.1 Conversion Privilege . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 10.2 Conversion Procedure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
</TABLE>
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Section 10.3 Cash Payments in Lieu of Fractional Shares . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 10.4 Adjustment of Conversion Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 10.5 Effect of Reclassification, Consolidation, Merger or Sale . . . . . . . . . . . . . . . . 43
Section 10.6 Taxes on Shares Issued . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Section 10.7 Reservation of Shares; Shares to be Fully Paid; Compliance with Government
Requirements; Listing of Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Section 10.8 Responsibility of Trustee Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Section 10.9 Notice to Holders Prior to Certain Actions . . . . . . . . . . . . . . . . . . . . . . . . 45
ARTICLE 11. SUBORDINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 11.1 Agreement to Subordinate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 11.2 Payment Over of Proceeds Upon Dissolution, Etc. . . . . . . . . . . . . . . . . . . . . . 46
Section 11.3 Prior Payment to Senior Indebtedness Upon Acceleration of Notes . . . . . . . . . . . . . 47
Section 11.4 No Payment When Senior Indebtedness in Default . . . . . . . . . . . . . . . . . . . . . . 47
Section 11.5 Payment Permitted If No Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Section 11.6 Subrogation to Rights of Holders of Senior Indebtedness . . . . . . . . . . . . . . . . . 48
Section 11.7 Provisions Solely to Define Relative Rights . . . . . . . . . . . . . . . . . . . . . . . 48
Section 11.8 Trustee to Effectuate Subordination . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Section 11.9 No Waiver of Subordination Provisions. . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Section 11.10 Notice to Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Section 11.11 Reliance on Judicial Order or Certificate of Liquidating Agent . . . . . . . . . . . . . . 50
Section 11.12 Trustee Not Fiduciary for Holders of Senior Indebtedness. . . . . . . . . . . . . . . . . 51
Section 11.13 Rights of Trustee as Holder of Senior Indebtedness; Preservation of Trustee's Rights . . . 51
Section 11.14 Article Applicable to Paying Agents . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Section 11.15 Certain Conversions Deemed Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
ARTICLE 12. MEETINGS OF HOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 12.1 Action by Holders. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 12.2 Purposes for Which Meetings May Be Called . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 12.3 Manner of Calling Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 12.4 Call of Meetings by the Company or Holders . . . . . . . . . . . . . . . . . . . . . . . . 53
Section 12.5 Who May Attend and Vote at Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Section 12.6 Regulations May be Made by Trustee; Conduct of the Meeting; Voting Rights;
Adjournment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Section 12.7 Voting at the Meeting and Record to be Kept . . . . . . . . . . . . . . . . . . . . . . . 54
Section 12.8 Exercise of Rights of Trustee or Holders May Not Be Hindered or Delayed by Call of
Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 12.9 Communication by Holders with Other Holders . . . . . . . . . . . . . . . . . . . . . . . 55
ARTICLE 13. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Section 13.1 Trust Indenture Act Controls . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Section 13.2 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Section 13.3 Certificate and Opinion as to Conditions Precedent . . . . . . . . . . . . . . . . . . . . 56
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Section 13.4 Statements Required in Certificate or Opinion of Counsel . . . . . . . . . . . . . . . . . 56
Section 13.5 Rules by Trustee and Agents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Section 13.6 Legal Holidays . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Section 13.7 No Recourse Against Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Section 13.8 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Section 13.9 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Section 13.10 No Adverse Interpretation of Other Agreements . . . . . . . . . . . . . . . . . . . . . . 58
Section 13.11 Successors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Section 13.12 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Section 13.13 Table of Contents, Headings, Etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
</TABLE>
EXHIBITS
Exhibit A - Form of Note
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CROSS-REFERENCE TABLE*
<TABLE>
<CAPTION>
Indenture
TIA Section Section
- ----------- ---------
<S> <C>
310(a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.10
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.10
(a)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A
(a)(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A
(a)(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.10
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.8, 7.10
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A
311(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.11
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.11
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A
312(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.5
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.9
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.9
313(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.6
(b)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A
(b)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.6
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.6, 13.2
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.6
314(a) . . . . . . . . . . . . . . . . . . . . . . . . . . 4.4, 4.7, 13.2
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A
(c)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . 13.3, 13.4
(c)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . 13.3, 13.4
(c)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.4
(f) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A
315(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.1(b)
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.5, 13.2
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.1(a)
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.1(c)
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.11
316(a)(last sentence) . . . . . . . . . . . . . . . . . . . . . . . . . 2.9
(a)(1)(A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.5
(a)(1)(B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.4
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.7
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.4, 12.1
317(a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.8
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.9
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.4
318(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.1
- --------------------
</TABLE>
*This Cross-Reference Table shall not, for any purpose, be deemed a part of
this Indenture.
<PAGE> 7
INDENTURE dated as of September 18, 1996, between Pier 1 Imports,
Inc., a Delaware corporation, and Wells Fargo Bank (Texas), N.A., as trustee.
Each party agrees as follows for the benefit of the other party and
for the equal and ratable benefit of the registered holders of the Company's
5 3/4% Convertible Subordinated Notes due October 1, 2003 (the "Notes"):
ARTICLE 1.
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.1 Definitions.
"Affiliate" of a Person means (i) any other Person which, directly or
indirectly, is in control of, is controlled by or is under common control with
such specified Person. For the purpose of this definition, "control" of a
Person means the power, directly or indirectly, to direct or cause the
direction of the management and policies of such Person, whether by ownership
of voting securities, by contract or otherwise, and "controlling" or
"controlled" have corresponding meanings.
"Agent" means any Registrar, Paying Agent or Conversion Agent.
"Board of Directors" means the Board of Directors of the Company or
any duly authorized committee thereof, except that, for purposes of the
definitions of "Change of Control," "Continuing Directors," and "Board of
Directors" means the Board of Directors of the Company.
"Business Day" means any day other than a Saturday, Sunday or other
day on which banking institutions in the cities of New York, New York or
Houston, Texas are required or authorized by law or other governmental action
to be closed.
"Capital Stock" of any Person means the Common Stock or Preferred
Stock of such Person. Unless otherwise stated herein or the context otherwise
requires, "Capital Stock" means Capital Stock of the Company.
"Change of Control" means the occurrence of any of the following
events after the date of this Indenture: (i) any Person (including, without
limitation, any "person" within the meaning of Section 13(d) or 14(d) of the
Exchange Act, but excluding the Company, any Subsidiary and any employee
benefit plan of the Company or any Subsidiary) becomes the direct or indirect
beneficial owner of shares of Capital Stock representing greater than 50% of
the combined voting power of all outstanding shares of Capital Stock entitled
to vote in the election of directors under ordinary circumstances, (ii) the
Company consolidates with or merges into any other Person and the outstanding
Common Stock is changed or exchanged as a result, (iii) the sale, transfer or
other disposition of a majority of the assets of the Company or of the
collective
<PAGE> 8
assets of the Company and the Subsidiaries, (iv) at any time Continuing
Directors cease for any reason to constitute a majority of the Board of
Directors then in office or (v) the Company makes any distribution of cash,
Property or securities (other than regular quarterly dividends, Common Stock,
Preferred Stock which is substantially equivalent to the Common Stock or rights
to acquire Common Stock or Preferred Stock which is substantially equivalent to
the Common Stock) to holders of Common Stock, or the Company or any Subsidiary
purchases or otherwise acquires Common Stock, and the sum of the Fair Market
Value of such cash, Property or securities distributed or Common Stock
purchased on the date the same is made, plus the Fair Market Value, when made,
of all other cash, Property or securities so distributed and Common Stock so
purchased which have occurred during the 12-month period ending on such date,
in each case expressed as a percentage of the aggregate Current Market Price of
all Common Stock outstanding at the close of business on the last Trading Day
prior to the date of such distribution or purchase, exceeds 50%.
"Common Stock" of any Person other than the Company means the common
equity (however designated), including, without limitation, common stock or
partnership or membership interests of, or participations or interests in such
Person (or equivalents thereof). "Common Stock" of the Company means the
Common Stock, par value $1.00 per share, of the Company, any successor class or
classes of common equity (however designated) of the Company into or for which
such Common Stock may hereafter be converted, exchanged or reclassified and any
class or classes of common equity (however designated) of the Company which may
be distributed or issued with respect to such Common Stock or successor class
of classes to holders thereof generally. Unless otherwise stated herein or the
context requires otherwise, "Common Stock" means Common Stock of the Company.
"Company" means Pier 1 Imports, Inc., a Delaware corporation, until a
successor replaces it in accordance with the applicable provisions of this
Indenture and, thereafter, "Company" shall mean such successor.
"Continuing Directors" means any member of the Board of Directors who
(i) is a member of the Board of Directors on the date hereof or (ii) was
nominated for election or elected to the Board of Directors with the
affirmative vote of at least two-thirds of such members and members of the
Board of Directors who were previously so nominated or elected.
"Current Market Price" means, when used with respect to any security
as of any date, the last sale price, regular way, or, in case no such sale
takes place on such date, the average of the closing bid and asked prices,
regular way, of such security in either case as reported for consolidated
transactions on the New York Stock Exchange or, if such security is not listed
or admitted to trading on the New York Stock Exchange, as reported for
consolidated transactions with respect to securities listed on the principal
national securities exchange on which such security is listed or admitted to
trading or, if such security is not listed or admitted to trading on any
national securities exchange, as reported on the Nasdaq National Market, or, if
such security is not listed or admitted to trading on the Nasdaq National
Market, as reported on the Nasdaq SmallCap Market, or if such security is not
listed or admitted to trading on any national securities exchange or the Nasdaq
National Market or the Nasdaq SmallCap Market, the average
2
<PAGE> 9
of the high bid and low asked prices of such security in the over-the-counter
market as reported by the National Association of Securities Dealers, Inc.
Automated Quotations System or such other system then in use or, if such
security is not quoted by any such organization, the average of the closing bid
and asked prices of such security furnished by a New York Stock Exchange member
firm selected by the Company. If such security is not quoted by any such
organization and no such New York Stock Exchange member firm is able to provide
such prices, the Current Market Price of such security shall be the Fair Market
Value thereof.
"Default" means any event which is, or with the passage of time or the
giving of notice or both would be, an Event of Default.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
"Fair Market Value" means, at any date as to any asset, Property or
right (including, without limitation, Capital Stock of any Person, evidences of
indebtedness or other securities, but excluding cash), the fair market value of
such item as determined in good faith by the Board of Directors, whose
determination shall be conclusive; provided, however, that such determination
is described in an Officers' Certificate filed with the Trustee and that, if
there is a Current Market Price for such item on such date, "Fair Market Value"
means such Current Market Price (without giving effect to the last sentence of
the definition thereof).
"GAAP" means, as of any date, generally accepted accounting principles
in the United States and does not include any interpretations or regulations
that have been proposed but that have not become effective.
"Holder" means a Person in whose name a Note is registered on the
Register.
"Indenture" means this Indenture, as amended or supplemented from
time to time.
"Interest Payment Date" means April 1 and October 1 of each year,
commencing April 1, 1997.
"Junior Securities" means (a) shares of any and all classes of Capital
Stock and (b) securities of the Company which are subordinated in right of
payment to Senior Indebtedness at the time of issuance or delivery of such
securities to substantially the same extent as, or to a greater extent than,
the Notes are so subordinated as provided in Article 11.
"Officer" means, with respect to any Person, the Chairman of the
Board, the Chief Executive Officer, the President, the Chief Operating Officer,
the Chief Financial Officer, the Treasurer, any Assistant Treasurer, the
Controller, the Secretary, any Assistant Secretary or any Vice President of
such Person.
"Officers' Certificate" means a certificate signed by two Officers,
one of whom must be the Chairman of the Board, the President, the Treasurer or
a Vice-President of the Company,
3
<PAGE> 10
that meets the requirements of Sections 13.3 and 13.4; provided, however, that
for purposes of Section 4.7, "Officers' Certificate" means a certificate signed
by the principal executive officer, principal financial officer or principal
accounting officer of the Company.
"Opinion of Counsel" means a written opinion from legal counsel who is
reasonably acceptable to the Trustee and that meets the requirements of
Sections 13.3 and 13.4. The counsel may be an employee of or counsel to the
Company or to the Trustee.
"Person" means any individual, corporation, partnership, association,
trust or any other entity or organization, including a government or political
subdivision or any agency or instrumentality thereof.
"Preferred Stock" of any Person means the class or classes of equity,
ownership or participation interests (however designated) in such Person,
including, without limitation, stock, share, partnership and membership
interests, which are preferred as to the payment of dividends or distributions
by, or as to the distribution of assets upon any voluntary or involuntary
liquidation or dissolution of, such Person (or equivalents thereof) over
interests of any other class of interests of such Person. Unless otherwise
stated herein or the context otherwise requires, "Preferred Stock" means
Preferred Stock of the Company.
"Principal" of a debt security means the principal of the security
plus the premium, if any, on the security. "Principal" shall include, with
respect to the Notes, the redemption price, if any, payable thereon.
"Property" of any Person means any and all types of real, personal,
tangible, intangible or mixed property owned by such Person whether or not
included on the most recent consolidated balance sheet of such Person in
accordance with GAAP.
"Representative" means the indenture trustee or other trustee, agent
or representative for an issue of Senior Indebtedness.
"Rights Agreement" means the Rights Agreement dated as of December 9,
1994 (the "1994 Rights Agreement") between the Company and Wells Fargo Bank
(Texas), N.A. (formerly named First Interstate Bank of Texas, N.A.), as Rights
Agent, as the same may be amended, or any similar agreement of the Company. The
following terms shall have the meanings set forth in the 1994 Rights Agreement
or the meanings of the corresponding terms in any such similar agreement:
"Rights;" "Rights Certificate;" "Final Expiration Date;" "Redemption Date;"
"Distribution Date." The term "Flip-In Event" means the occurrence of the event
described in Section 11(a)(ii) of the 1994 Rights Agreement or the occurrence of
a similar event in any such similar agreement.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
4
<PAGE> 11
"Senior Indebtedness" means the principal of (and premium, if any) and
accrued interest on (a) indebtedness of the Company (including indebtedness of
other Persons guaranteed by the Company), other than the Notes and the Company's
8 1/2% Exchangeable Debentures due 2002, outstanding on the date of this
Indenture which is (i) for money borrowed or (ii) evidenced by a note or similar
instrument given in connection with the acquisition of any business, Property or
assets, (b) obligations of the Company, whether outstanding on the date of this
Indenture or thereafter created, incurred or assumed, as lessee under leases
required to be capitalized on the balance sheet of the lessee under GAAP and
leases of Property or assets made as part of any sale and leaseback transaction
to which the Company is a party, (c) amendments, renewals, extensions,
modifications and refundings of any such indebtedness or obligation and (d)
indebtedness of the Company (including indebtedness of other Persons guaranteed
by the Company) created, incurred or assumed after the date of this Indenture
which is (i) for money borrowed or (ii) evidenced by a note or similar
instrument given in connection with the acquisition of any business, Property or
assets, the instrument creating or evidencing which indebtedness or pursuant to
which such indebtedness is outstanding provides that such indebtedness is
superior in right of payment to the Notes. "Senior Indebtedness" shall not
include indebtedness or amounts owed (except to banks or other financial
institutions) for compensation to employees, or for goods or materials purchased
or services utilized, in the ordinary course of business of the Company or of
any other Person from whom such indebtedness or amount was assumed or for whom
such indebtedness was guaranteed.
"Subsidiary" of a Person on any date means any other Person, a
majority of whose Capital Stock with voting power, under ordinary
circumstances, entitling holders of such Capital Stock to elect the board of
directors or other governing body of such other Person, is at such date,
directly or indirectly, owned by such Person and/or a Subsidiary or
Subsidiaries of such Person. Unless otherwise stated herein or the context
otherwise requires, "Subsidiary" means Subsidiary of the Company.
"TIA" or "Trust Indenture Act of 1939" means the Trust Indenture Act
of 1939 (U.S. Code Sections 77aaa-77bbbb) as amended and as in effect on the
date of this Indenture; provided, however, that if the TIA is amended after
such date, "TIA" or "Trust Indenture Act of 1939" means, to the extent required
by any such amendments, the TIA as so amended.
"Trading Day" means (i) if the applicable security is listed or
admitted for trading on a national security exchange, a day on which such
exchange is open for business, (ii) if the applicable security is quoted on the
Nasdaq National Market, a day on which trades may be made thereon or (iii) if
the applicable security is not so listed, admitted for trading or quoted, any
Business Day.
"Trustee" means the party identified in the title of this Indenture as
trustee until a successor replaces it in accordance with the applicable
provisions of this Indenture and, thereafter, "Trustee" means such successor.
"Trust Officer" means any officer or corporate trust officer or
assistant corporate trust officer of the Trustee assigned by the Trustee to
administer its corporate trust matters.
5
<PAGE> 12
"U.S. Government Obligations" means non-callable (i) direct
obligations (or certificates representing an ownership interest in such
obligations) of the United States for which its full faith and credit are
pledged and (ii) obligations of a Person controlled or supervised by, and
acting as an agency or instrumentality of, the United States, the payment of
which is unconditionally guaranteed as a full faith and credit obligation of
the United States.
Section 1.2 Other Definitions.
<TABLE>
<CAPTION>
Term Defined in Section
---- ------------------
<S> <C>
"Aggregate Consideration" . . . . . . . . . . . . . . . . . . 10.4
"Bankruptcy Law" . . . . . . . . . . . . . . . . . . . . . . . . 6.1
"Change of Control Date" . . . . . . . . . . . . . . . . . . . . 4.6
"Change of Control Notice" . . . . . . . . . . . . . . . . . . . 4.6
"Change of Control Offer" . . . . . . . . . . . . . . . . . . . 4.6
"Change of Control Payment" . . . . . . . . . . . . . . . . . . 4.6
"Change of Control Payment Date" . . . . . . . . . . . . . . . . 4.6
"Code" . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.4
"Conversion Agent" . . . . . . . . . . . . . . . . . . . . . . . 2.3
"Conversion Price" . . . . . . . . . . . . . . . . . . . . . . 10.1
"Custodian" . . . . . . . . . . . . . . . . . . . . . . . . . . 6.1
"DTC" . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.4
"Equity Securities" . . . . . . . . . . . . . . . . . . . . . 10.4
"Event of Default" . . . . . . . . . . . . . . . . . . . . . . . 6.1
"Expiration Time" . . . . . . . . . . . . . . . . . . . . . . 10.4
"Notice of Default" . . . . . . . . . . . . . . . . . . . . . . 6.1
"Paying Agent" . . . . . . . . . . . . . . . . . . . . . . . . . 2.3
"Purchased Shares" . . . . . . . . . . . . . . . . . . . . . . 10.4
"Register" . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.3
"Registrar" . . . . . . . . . . . . . . . . . . . . . . . . . . 2.3
"Significant Subsidiary" . . . . . . . . . . . . . . . . . . . . 6.1
"Trigger Event" . . . . . . . . . . . . . . . . . . . . . . . 10.4
</TABLE>
Section 1.3 Incorporation by Reference of Trust Indenture Act.
This Indenture is subject to the mandatory provisions of the TIA,
which are incorporated by reference in and made a part of this Indenture.
Such provisions shall apply to this Indenture at all times, notwithstanding
that at any time or from time to time this Indenture is not required to be
qualified under the TIA.
The following TIA terms used in this Indenture have the following
meanings:
"Commission" means the SEC;
"indenture securities" means the Notes;
6
<PAGE> 13
"indenture security holder" means a Holder;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the
Trustee; and
"obligor" on the Notes means the Company and any successor
obligor on the Notes.
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule under the
TIA and not otherwise defined herein have the meanings so assigned to them.
Section 1.4 Rules of Construction.
Unless the context otherwise requires or unless otherwise stated
herein:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the
meaning assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the
plural include the singular;
(5) references to sections of or rules under the
Securities Act, the Exchange Act or the TIA shall be
deemed to include substitute, replacement or
successor sections or rules;
(6) references to Sections or Articles mean Sections or
Articles of this Indenture; and
(7) solely for purposes of this Indenture and the Notes,
a determination, approval or other action by the
Board of Directors shall not be deemed to have been
made, given or taken unless it is set forth in a
written resolution or resolutions (or comparable
written instrument) duly adopted thereby.
7
<PAGE> 14
ARTICLE 2.
THE NOTES
Section 2.1 Form and Dating.
The Notes and the Trustee's certificate of authentication shall be
substantially in the form of Exhibit A which is hereby incorporated in and
expressly made a part of this Indenture. The Notes may have notations, legends
or endorsements required by law, stock exchange rule, agreements to which the
Company is subject, if any, or usage (provided that any such notation, legend
or endorsement is in a form acceptable to the Company). Each Note shall be
dated the date of its authentication. The terms of the Notes set forth in
Exhibit A are part of the terms of this Indenture.
Section 2.2 Execution and Authentication.
Two Officers shall sign the Notes for the Company by manual or
facsimile signature. The Company's seal shall be reproduced on the Notes and
may be in facsimile form.
Any Note bearing the manual or facsimile signature of an individual
shall be valid notwithstanding that such individual ceased to be an Officer
prior to authentication of the Note or ceased to hold the office of Company
ascribed to such individual on the Note.
A Note shall not be valid until authenticated by the manual signature
of the Trustee. The signature shall be conclusive evidence that the Note has
been authenticated under this Indenture.
The Trustee shall authenticate Notes for original issue up to the
aggregate principal amount stated in Paragraph 4 of the Notes, upon delivery of
(i) a written order of the Company signed by an Officer directing the Trustee
to authenticate the Notes and (ii) an Officers' Certificate certifying that all
conditions precedent to the issuance of the Notes contained herein have been
complied with. The aggregate principal amount of Notes outstanding at any time
may not exceed such amount, except as provided in Section 2.7.
The Trustee may appoint an authenticating agent upon the approval and
at the expense of the Company to authenticate Notes. Unless limited by the
terms of such appointment, an authenticating agent shall be authorized to
authenticate Notes at such times and upon such conditions as the Trustee is so
authorized. Each reference in this Indenture to authentication by the Trustee
includes authentication by such agent.
Section 2.3 Registrar, Paying Agent and Conversion Agent.
The Company shall maintain in the City of New York, New York an office
or agency where Notes may be presented for registration of transfer or for
exchange (the "Registrar"), an office or agency where Notes may be presented
for payment (the "Paying Agent") and an office or agency where the Notes may be
presented for conversion (the "Conversion Agent"). The
8
<PAGE> 15
Registrar shall keep a register of the Notes (the "Register") and of their
transfer and exchange. The Company may appoint one or more co-registrars and
one or more additional paying agents upon the reasonable approval of the other
Registrar or Registrars or Paying Agent or Paying Agents, as the case may be,
and at the expense of the Company. The term "Registrar" includes any
co-registrar or co-registrars and the term "Paying Agent" includes any
additional paying agent or paying agents. The Company may change any Paying
Agent, Conversion Agent or Registrar without notice to any Holder. The Company
shall promptly notify the Trustee in writing of the name and address of any
Agent not a party to this Indenture. The Company or any Subsidiary may act as
Paying Agent (except for purposes specified in Sections 2.8 and 4.1),
Conversion Agent or Registrar. If the Company fails to appoint or maintain
itself or another Person as Registrar, Conversion Agent or Paying Agent, the
Trustee shall act as such and shall be entitled to appropriate compensation
therefor pursuant to Section 7.7.
The Company shall enter into an appropriate agency agreement with any
Agent not a party to this Indenture, which shall incorporate the terms of the
TIA. The agreement shall implement the provisions of this Indenture that
relate to such Agent. The Company shall notify the Trustee of the name and
address of any such Agent.
The Company initially appoints the office of the Trustee at 26610 West
Agoura Road, Calabasas, California 91302, and through it the offices of its
agent, Bank of Montreal Trust Company at 77 Water Street, New York, New York
10005, as the offices or agencies for each of the purposes designated in this
Section 2.3 to act as Registrar, Paying Agent and Conversion Agent with respect
to the Notes.
Section 2.4 Paying Agent to Hold Money in Trust.
The Company shall require each Paying Agent (other than the Trustee)
to agree in writing that the Paying Agent will hold in trust for the benefit of
Holders or the Trustee all money held by the Paying Agent for the payment of
Principal or repurchase price, if any, of or interest on the Notes, and will
notify the Trustee of any default by the Company in making any such payment.
While any such default continues, the Trustee may require a Paying Agent to pay
all money held by it to the Trustee and account for any money disbursed by it.
The Company at any time may require a Paying Agent to pay all money held by it
to the Trustee and account for any money disbursed by it. Upon payment over to
the Trustee, the Paying Agent (if other than the Company or a Subsidiary of the
Company) shall have no further liability for the money delivered to the Trustee.
If the Company or an Affiliate of the Company acts as Paying Agent, it shall
segregate and hold in a separate trust fund for the benefit of the Holders all
money held by it as Paying Agent. Upon any bankruptcy or reorganization
proceedings relating to the Company, the Trustee shall serve as Paying Agent for
the Notes.
Section 2.5 Holder Lists.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Holders. If the Trustee is not the Registrar, the Company shall furnish to the
Trustee at least ten Business Days before each
9
<PAGE> 16
Interest Payment Date, and at such other times as the Trustee may request in
writing within five Business Days after such request, a list in such form and
as of such date as the Trustee may reasonably require, and upon which the
Trustee may conclusively rely, of the names and addresses of, and principal
amount of Notes held by, the Holders.
Section 2.6 Transfer and Exchange.
Upon surrender for registration or transfer of any Note, together with
a written instrument of transfer satisfactory to the Registrar duly executed by
the Holder or such Holder's attorney duly authorized in writing, at the office
or agency of the Registrar, the Company shall execute, and the Trustee shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Notes of any authorized denomination or
denominations, of a like aggregate principal amount. The Company shall not
charge a service charge for any registration of transfer or exchange of Notes;
provided, that the Company may require from a Holder requesting such transfer
or exchange (other than any exchange of a temporary Note for a definitive Note
not involving any change in ownership) payment of an amount sufficient to pay
all taxes, assessments or other governmental charges that may be imposed in
connection with the transfer or exchange.
Transfers of Notes may be effected only by surrender of the Notes to
the Company for registration and the issuance by the Company of one or more new
Notes. Until such surrender and registration, the Company may treat the
Holders of Notes appearing on the Register as the absolute owners of such
Notes.
At the option of the Holder, Notes may be exchanged for other Notes of
any authorized denomination or denominations, of a like aggregate principal
amount, upon surrender of the Notes to be exchanged, together with a written
instrument of transfer satisfactory to the Registrar duly executed by the
Holder or such Holder's attorney duly authorized in writing, at the office or
agency of the Registrar. Whenever any Notes are so surrendered for exchange,
the Company shall execute, and the Trustee shall authenticate and deliver,
Notes which the Holder making the exchange is entitled to receive.
All Notes issued upon any registration of transfer or exchange of
Notes shall be valid obligations of the Company, evidencing the same debt and
entitled to the same benefits under this Indenture, as the Notes surrendered
upon such registration of transfer or exchange.
The Company shall not be required to make, and the Registrar need not
register, transfers or exchanges of (a) Notes selected for redemption during
the 15 day (or shorter) period set forth in the first paragraph of Section 3.1
(except, in the case of Notes to be redeemed in part, the portion thereof not
to be redeemed) or (b) any Notes with respect to which a repurchase election
has been tendered and not withdrawn by the Holder thereof in accordance with
Section 4.6 (except, in the case of Notes tendered for purchase in part, the
portion thereof not to be purchased).
10
<PAGE> 17
Section 2.7 Replacement Notes.
Upon surrender of a mutilated Note at the office or agency of the
Registrar, the Company shall execute, and the Trustee shall authenticate and
deliver, a replacement Note in the name of the Holder of such mutilated Note,
of like principal amount and dated the date of such mutilated Note.
Upon surrender of written notice by a Holder or a Holder's attorney
duly authorized in writing at the office or agency of the Registrar that a Note
has been lost, destroyed or wrongfully taken, the Company shall execute, and
the Trustee shall authenticate and deliver, a replacement Note in the name of
such Holder, of like principal amount and dated the date of such lost,
destroyed or wrongfully taken Note; provided, however, that, unless such
requirement is waived by the Company, such notice shall be accompanied by an
indemnity bond that is sufficient in the judgment of the Trustee and the
Company to protect the Company, the Trustee, any Agent and any authenticating
agent from any loss which any of them may suffer by reason of such Note's
replacement.
The Company may charge the Holder for its expenses in replacing a
Note.
Every replacement Note shall be an additional obligation of the
Company and shall be entitled to all benefits of this Indenture equally and
proportionately with all other Notes duly issued hereunder.
Section 2.8 Outstanding Notes.
The Notes outstanding at any time are all the Notes authenticated by
the Trustee except for those cancelled by it, those delivered to it for
cancellation and those described in this Section 2.8 as not outstanding.
Except as set forth in Section 2.9, a Note does not cease to be outstanding
because the Company or an Affiliate of the Company holds the Note.
If a Note is replaced pursuant to Section 2.7, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note is held by a bona fide purchaser.
If the principal amount of any Note is considered paid under Section
4.1, it ceases to be outstanding and interest on it ceases to accrue.
If the Paying Agent (other than the Company, any Subsidiary or an
Affiliate of any thereof) segregates and holds in trust, in accordance with
this Indenture, on a redemption date or maturity date money sufficient to
redeem or pay Notes payable on that date, and is not prohibited from paying
such money to the Holders thereof pursuant to the terms of this Indenture, then
on and after such redemption date or maturity date such Notes shall be deemed
to be no longer outstanding and shall cease to accrue interest.
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Section 2.9 Treasury Notes.
In determining whether the Holders of the required aggregate principal
amount of Notes have concurred in any direction, waiver or consent, Notes owned
by the Company or by any Affiliate of the Company shall be considered as though
not outstanding, except that for the purposes of determining whether the
Trustee shall be protected in relying on any such direction, waiver or consent,
only Notes as to which a Trust Officer of the Trustee knows are so owned shall
be so disregarded.
Section 2.10 Temporary Notes.
Until definitive Notes are ready for delivery, the Company may prepare
and execute and the Trustee shall authenticate and deliver temporary Notes upon
a written order of the Company signed by an Officer and delivered to a Trust
Officer. Temporary Notes shall be substantially in the form of definitive
Notes but may have variations that the Company considers appropriate for
temporary Notes. If temporary Notes are issued, the Company shall, without
unreasonable delay, prepare definitive Notes which may be exchanged for
temporary Notes.
After the preparation of definitive Notes, the temporary Notes shall
be exchangeable for definitive Notes upon surrender of the temporary Notes at
the office or agency of the Registrar, without charge to Holders. Upon
surrender for cancellation of one or more temporary Notes, the Company shall
execute and the Trustee upon a written order of the Company signed by an
Officer shall authenticate and deliver in exchange therefor a like principal
amount of definitive Notes of authorized denominations. Until so exchanged,
the temporary Notes shall in all respects be entitled to the same benefits
under this Indenture as definitive Notes.
Section 2.11 Cancellation.
The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar, Conversion Agent and Paying Agent shall forward
to the Trustee any Notes surrendered to them for registration of transfer,
exchange, conversion or payment. The Trustee shall promptly cancel and destroy
(in accordance with the standard document destruction policies of the Trustee)
all Notes so delivered and certify to the Company their destruction unless by a
written order signed by an Officer, the Company shall direct that cancelled
Notes be returned to it. The Company may not issue new Notes to replace Notes
that have matured or been converted or redeemed.
Section 2.12 Defaulted Interest.
If the Company defaults in a payment of interest on the Notes, the
Company shall pay defaulted interest (plus interest on such defaulted interest
to the extent lawful) in any lawful manner. The Company shall pay the
defaulted interest to the Persons who are Holders on a subsequent special
record date. The Company shall fix or cause to be fixed (or upon the Company's
failure to do so the Trustee shall fix) any such special record date and
payment date to the reasonable satisfaction of the Trustee, which specified
record date shall not be less than
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10 days prior to the payment date for such defaulted interest, and shall
promptly mail or cause to be mailed to each Holder a notice that states the
special record date, the payment date and the amount of defaulted interest to
be paid. The Company shall notify the Trustee in writing of the amount of
defaulted interest proposed to be paid and the date of the proposed payment,
and at the same time the Company shall deposit with the Trustee an amount of
money equal to the aggregate amount proposed to be paid with respect to such
defaulted interest or shall make arrangements reasonably satisfactory to the
Trustee for such deposit prior to the date of the proposed payment, which money
when so deposited shall be held in trust for the benefit of the Person entitled
to such defaulted interest as provided in this Section 2.12.
Section 2.13 Deposit of Moneys.
Prior to 10:00 a.m., New York City time, on each Interest Payment Date
and the maturity date, the Company shall deposit with the Paying Agent in
immediately available funds money sufficient to make cash payments, if any, due
on such Interest Payment Date or maturity date, as the case may be, in a timely
manner which permits the Paying Agent to remit payment to the Holders on such
Interest Payment Date or maturity date, as the case may be.
ARTICLE 3.
REDEMPTION
Section 3.1 Notices to Trustee.
If the Company elects to redeem Notes pursuant to the optional
redemption provisions of Paragraph 5 of the Notes, it shall notify the Trustee
in writing of the redemption date, the Section of the Indenture and/or
Paragraph of the Note pursuant to which such redemption shall be effected, the
principal amount of Notes to be redeemed and the redemption price at least 15
days prior to mailing any notice of redemption to the Holders (unless the
Trustee consents to a shorter period). Such notice shall be in the form of an
Officers' Certificate from the Company and will state that such redemption will
comply with the conditions herein.
If less than all the Notes are to be redeemed, the record date
relating to such redemption shall be selected by the Company and given to the
Trustee, which record date shall be not less than 15 days after the date of
notice to the Trustee.
Section 3.2 Selection of Notes to be Redeemed.
If less than all the Notes are to be redeemed, the Trustee shall
select the Notes to be redeemed in compliance with the requirements of the
principal national securities exchange, if any, on which the Notes are listed
or admitted to trading or, if the Notes are not so listed or admitted to
trading, by lot or by such other method that the Trustee considers fair and
appropriate. The Trustee shall make the selection not more than 60 days and not
less than 30 days before the redemption date from Notes outstanding and not
previously called for
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redemption. The Trustee may select for redemption portions of the principal
amount of Notes that have denominations larger than $1,000. Notes and portions
thereof selected by the Trustee shall be in amounts of $1,000 or integral
multiples of $1,000. If less than all of the Notes are to be redeemed and a
Note is converted in accordance with Article 10 after the date on which notice
of redemption is given pursuant to Section 3.3 and prior to the time and date
specified in Section 3.5, such Note shall, for purposes of determining the
amount of such Notes which have been redeemed, be deemed to have been redeemed.
Provisions of this Indenture that apply to Notes called for redemption also
apply to portions of Notes called for redemption. The Trustee shall notify the
Company promptly of the Notes or portions of Notes to be called for redemption.
Section 3.3 Notice of Redemption.
At least 30 days but not more than 60 days before a redemption date,
the Company or, upon written notice to the Trustee by the Company, the Trustee
shall give a notice of redemption to the Holders.
The notice shall identify the Notes to be redeemed and shall state:
(a) the redemption date;
(b) the redemption price;
(c) the Conversion Price;
(d) the name and address of the Paying Agent and
Conversion Agent;
(e) that Notes called for redemption may be converted at
any time before the close of business on the Business Day immediately
preceding the redemption date in accordance with Article 10;
(f) that Holders who want to convert Notes must satisfy
the requirements in Paragraph 8 of the Notes;
(g) that Notes called for redemption must be surrendered
to the Paying Agent to collect the redemption price;
(h) the CUSIP number of the Notes;
(i) if fewer than all of the outstanding Notes are to be
redeemed, the certificate numbers and principal amounts of the
particular Notes to be redeemed;
(j) if any Note is being redeemed in part, that, after
the redemption date, upon surrender of such Note, a new Note or Notes
in principal amount equal to the unredeemed portion will be issued;
and
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(k) that unless the Company defaults in making such
redemption payment or the Paying Agent is prohibited from making such
redemption payment pursuant to the terms of this Indenture, interest
on Notes called for redemption ceases to accrue on and after the
redemption date.
If the Trustee gives such notice of redemption, it shall do so in the
Company's name and at the Company's expense and the Company shall provide the
Trustee with the information required to give such notice of redemption.
Section 3.4 Effect of Notice of Redemption, Definition of Redemption
Price.
Notice of redemption given in accordance with Sections 3.3 and 13.2 to
each Holder shall be deemed to have been duly given, whether or not any
particular Holder receives such notice. Once notice of redemption is so
mailed, Notes called for redemption become due and payable on the redemption
date at the redemption price set forth in the Notes. A notice of redemption
may not be conditional. Upon surrender to the Trustee or the Paying Agent,
such Notes called for redemption shall be paid at the redemption price.
References in this Indenture to the "redemption price" mean the redemption
price set forth in the Notes plus the interest payable as provided in the Notes
on Notes called for redemption.
Section 3.5 Deposit of Redemption Price.
On or before 10:00 a.m., New York City time, on any redemption date,
the Company shall deposit with the Trustee or with the Paying Agent immediately
available funds sufficient to pay the redemption price of (if payable thereon)
all Notes to be redeemed on that date other than Notes or portions of Notes
called for redemption which prior thereto have been delivered by the Company to
the Trustee for cancellation or have been converted; provided, however, that any
such deposit shall be a payment with respect to the Notes and shall be subject
to the provisions of Article 11 and shall be permitted only if payment would be
permitted under Article 11. The Trustee or the Paying Agent shall return to the
Company any money not required for the purpose of paying such redemption price.
Section 3.6 Notes Redeemed in Part.
Upon surrender of a Note that is redeemed in part, the Company shall
issue and the Trustee shall authenticate for the Holder at the expense of the
Company a new Note equal in principal amount to the unredeemed portion of the
Note surrendered.
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ARTICLE 4.
COVENANTS
Section 4.1 Payment of Notes.
The Company shall pay the Principal and repurchase price, if any, of
and interest on the Notes on the dates and in the manner provided in the Notes
and this Indenture. Principal and interest shall be considered paid on the date
due if the Paying Agent (other than the Company or a Subsidiary) on that date
holds money in accordance with this Indenture designated for and sufficient to
pay in cash all Principal and interest then due and the Paying Agent is not
prohibited from paying such money to Holders on that date pursuant to the terms
of this Indenture.
To the extent lawful, the Company shall pay interest (including
post-petition interest in any proceeding under any Bankruptcy Law) on (i)
overdue Principal and repurchase price, if any, of the Notes at the rate borne
by the Notes and (ii) overdue installments of interest at the same rate.
Section 4.2 Stay, Extension and Usury Laws.
The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay, extension or usury law wherever
enacted, now or at any time hereafter in force, which may affect the covenants
or the performance of this Indenture; and the Company (to the extent it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenants that it will not, by resort to any such law, hinder, delay
or impede the execution of any power herein granted to the Trustee, but will
suffer and permit the execution of every such power as though no such law has
been enacted.
Section 4.3 Continued Existence.
Subject to Article 5, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect its existence as
a corporation and the corporate existence of the Subsidiaries and will refrain
or cause the Subsidiaries to refrain from taking any action that would cause
its corporate existence or the corporate existence of any of the Subsidiaries
to cease, including without limitation any action that would result in the
liquidation, winding up or dissolution of it or any of the Subsidiaries;
provided, however, that the Company shall not be required to preserve the
existence of any Subsidiary 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 the Subsidiaries and that the loss thereof to the Company taken
as a whole is not disadvantageous in any material respect to the Holders.
Section 4.4 Reports.
(a) The Company shall file with the Trustee copies of all
reports and other information and documents that the Company is required to
file with the SEC pursuant to the
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Exchange Act. Each such report or other information or document shall be filed
with the Trustee within 15 days after filing of such report or other
information or document with the SEC. The Company will mail or cause to be
mailed to all Holders copies of all of (a) its annual reports to stockholders
and (b) quarterly reports to stockholders which are mailed to its institutional
stockholders.
(b) If the Company is at any time no longer subject to the
reporting requirements of Section 13 or 15(d) of the Exchange Act, the Company
will prepare (i) for the first three quarters of each fiscal year of the
Company, quarterly financial statements substantially equivalent to the
financial statements required to be included in a report on Form 10-Q under the
Exchange Act, and (ii) annually, complete audited consolidated financial
statements, including, but not limited to, a balance sheet, a statement of
operations, a statement of stockholders' equity and all appropriate notes. All
such financial statements will be prepared in accordance with GAAP, except for
changes with which the Company's independent accountants concur and except that
quarterly financial statements may be subject to year-end adjustments. The
Company will file or cause to be filed with the Trustee and will mail or cause
to be mailed to the Holders a copy of such financial statements within 50 days
after the end of each of the first three quarters of each fiscal year of the
Company and within 95 days after the close of each fiscal year of the Company,
respectively. Notwithstanding the foregoing, if the Company is no longer
subject to such reporting requirements by reason of the acquisition of Capital
Stock by, or merger or consolidation of the Company with, a Person which is
subject to such reporting requirements or a Subsidiary of such a Person and
such Person has unconditionally and irrevocably guaranteed payment in full when
due of all amounts payable with respect to the Notes, then the Company need not
prepare, file or mail the financial statements described in this Section
4.4(b); provided, however, that such Person complies with Section 4.4(a) as if
references therein to the Company were references to such Person.
Section 4.5 Taxes.
The Company shall, and shall cause each of the Subsidiaries to, pay or
discharge prior to delinquency all taxes, assessments and governmental levies,
except as contested in good faith and by appropriate proceedings.
Section 4.6 Change of Control.
(a) In the event of a Change of Control, the Company shall give
or cause to be given written notice in the form of an Officers' Certificate
(the "Change of Control Notice") to all Holders, the Trustee and the Paying
Agent of such event and shall make an offer to purchase (as the same may be
extended in accordance with applicable law, the "Change of Control Offer") all
then outstanding Notes at a purchase price equal to 100% of the principal
amount thereof plus accrued and unpaid interest thereon to the Change of
Control Payment Date. The Change of Control Notice shall be given in
accordance with Section 13.2 and the Change of Control Offer shall be made not
more than 30 days following the date of the Change of Control (the "Change of
Control Date"), unless the Company has previously given a notice of optional
redemption by
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the Company of all of the Notes in accordance with this Indenture. The Change
of Control Notice shall set forth:
(i) that a Change of Control has occurred and, unless the
Notes are subject to a notice of optional redemption
described above, that the Company is offering to repurchase
all of the outstanding Notes;
(ii) a brief description of such Change of Control and, to
the extent readily available to the Company, information
with respect to pro forma consolidated income, cash flow
and capitalization of the Company after giving effect to
such Change of Control and such other financial information
relating to the Company with respect to such Change of
Control as the Company may, in its sole discretion, deem
relevant to a decision whether to convert or hold Notes or
tender Notes in connection with such Change of Control
Offer;
(iii) the repurchase price (the "Change of Control
Payment");
(iv) the expiration date of the Change of Control Offer,
which shall be no earlier than 30 days nor later than 60
days from the date the Change of Control Notice is mailed;
(v) the date such purchase shall be effected, which shall
be no later than 30 days after the expiration date of the
Change of Control Offer (the "Change of Control Payment
Date");
(vi) that, unless the Company defaults in the payment of
the Change of Control Payment, all Notes or portions
thereof accepted for payment pursuant to the Change of
Control Offer shall cease to accrue interest on and after
the Change of Control Payment Date;
(vii) the Conversion Price;
(viii) the name and address of the Paying Agent and the
Conversion Agent;
(ix) that Notes (duly endorsed for transfer to the
Company), together with the form of "Option of Holder to
Elect Repurchase" thereon completed and signed, must be
surrendered to the Paying Agent prior to the expiration of
the Change of Control Offer to collect the Change of
Control Payment; and
(x) any other information required by applicable law to be
included therein and any other procedures that a Holder
must follow in order to have Notes repurchased.
(b) The Change of Control Offer shall remain open until the
close of business on the expiration date of the Change of Control Offer. Each
Holder shall have the right to
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withdraw his tender in accordance with applicable rules promulgated by the SEC
under the Exchange Act.
(c) In the event that the Company is required to make a Change
of Control Offer, the Company will comply with any applicable securities laws
and regulations, including, to the extent applicable, Section 14(e) of, and
Rule 14e-1 under, the Exchange Act.
(d) On the Change of Control Payment Date, the Company shall,
to the extent lawful:
(i) accept for payment Notes or portions thereof tendered
pursuant to the Change of Control Offer;
(ii) deposit with the Paying Agent in immediately available
funds an amount equal to the Change of Control Payment with
respect to all Notes or portions thereof so accepted; and
(iii) deliver or cause to be delivered to the Trustee the
Notes so accepted together with an Officers' Certificate
stating the Notes or portions thereof tendered to the
Company.
(e) The Paying Agent shall promptly (but in any case not later
than five Business Days after the Change of Control Payment Date) mail to each
Holder of Notes so accepted payment in an amount equal to the Change of Control
Payment for such Notes, and the Trustee shall promptly authenticate and mail to
each Holder a new Note equal in principal amount to any unpurchased portion of
the Notes surrendered by such Holder, if any; provided, that each such new Note
shall be in principal amount of $1,000 or an integral multiple thereof. The
Company shall publicly announce the results of all repurchases pursuant to this
Section 4.6 on or as soon as practicable after the Change of Control Payment
Date.
Section 4.7 Compliance Certificate.
The Company shall deliver to the Trustee, within 120 days after the
end of each fiscal year of the Company, an Officers' Certificate stating that a
review of the activities of the Company and the Subsidiaries during the
preceding fiscal year has been made under the supervision of the signing
Officer with a view to determining whether the Company has kept, observed,
performed and fulfilled its obligations under this Indenture and further
stating, as to such Officer, that to the best of his or her knowledge the
Company has kept, observed, performed and fulfilled each and every covenant and
condition contained in this Indenture and is not in default in the performance
or observance of any of the terms, provisions and conditions hereof (or, if a
Default or Event of Default shall have occurred, describing all such Defaults
or Event of Default of which he or she may have knowledge and what action the
Company is taking or proposes to take with respect thereto), and that, to the
best of his or her knowledge, no event has occurred and remains in existence by
reason of which payments on account of the Principal of or interest, if any, on
the Notes are prohibited.
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Section 4.8 Further Assurance to the Trustee.
The Company shall, upon reasonable request of the Trustee, execute and
deliver such further instruments and do such further acts as may be reasonably
necessary or proper to carry out more effectively the provisions of this
Indenture.
ARTICLE 5.
SUCCESSORS
Section 5.1 When Company May Merge or Sell Assets.
The Company shall not consolidate with or merge into, or sell, lease,
convey or otherwise dispose of all or substantially all of its assets to, any
Person, without the consent of Holders of the majority in aggregate principal
amount of Notes then outstanding, unless:
(a) the Company is the continuing corporation or the Person
formed by or surviving any such consolidation or merger (if other than the
Company), or to which such sale, lease, conveyance or other disposition of
assets shall have been made, is organized and existing under the laws of the
United States, any state thereof or the District of Columbia and such Person
(if other than the Company) assumes by supplemental indenture executed and
delivered to the Trustee and in a form reasonably satisfactory to the Trustee,
all the obligations of the Company under the Notes and this Indenture,
including, without limitation, conversion rights in accordance with Article 10;
(b) immediately before and immediately after giving effect to
the transaction no Event of Default, and no event which, after notice or lapse
of time, or both, would become an Event of Default, shall have occurred and be
continuing;
(c) immediately after giving effect to such transaction, the
Notes and this Indenture (as supplemented by such supplemental indenture) will
be a valid and enforceable obligation of the Company or such successor; and
(d) the Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that such
proposed transaction and such supplemental indenture comply with the applicable
provisions of this Indenture and that all conditions precedent therein provided
for relating to such transaction have been satisfied.
Section 5.2 Successor Substituted.
Upon any consolidation or merger, or any sale, lease, conveyance or
other disposition of all or substantially all of the assets of the Company in
accordance with Section 5.1, the Person formed by such consolidation or into or
with which the Company is merged or to which such sale, lease, conveyance or
other disposition is made shall succeed to, and be substituted for,
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and may exercise every right and power of, the Company under this Indenture
with the same effect as if such successor Person has been named as the Company
herein; provided, however that in the case of a sale, lease, conveyance or
other disposition the Company shall not be released from the obligation to pay
the Principal of and interest on the Notes.
ARTICLE 6.
DEFAULTS AND REMEDIES
Section 6.1 Events of Default.
The following shall constitute an "Event of Default":
(a) failure to pay any Principal or repurchase price, if
any, of any Note when due and payable, whether at maturity, upon redemption,
upon a Change of Control Offer or otherwise, whether or not such payment is
prohibited by the subordination provisions of this Indenture;
(b) failure to pay any interest on any Note when due and
payable, which failure continues for 30 days, whether or not such payment is
prohibited by the subordination provisions of this Indenture;
(c) failure to perform the other covenants of the Company
in this Indenture, which failure continues for 90 days after written notice as
provided in the last paragraph of this Section 6.1;
(d) a default occurs (after giving effect to any
applicable grace periods or any extension of any maturity date) in the payment
when due of Principal of, or an acceleration of, any indebtedness for money
borrowed by the Company or any Subsidiary in excess of $10 million,
individually or in the aggregate, if such indebtedness is not discharged, or
such acceleration is not annulled, within 10 days after written notice as
provided in the last paragraph of this Section 6.1;
(e) the Company or any Subsidiary, pursuant to or within
the meaning of any Bankruptcy Law:
(i) commences a voluntary case,
(ii) consents to the entry of an order for relief
against it in an involuntary case,
(iii) consents to the appointment of a Custodian of
it or for all or substantially all of its property, and
such Custodian is not discharged within 30 days,
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(iv) makes a general assignment for the benefit
of its creditors, or
(v) admits in writing that it is generally unable
to pay its debts as the same become due;
(f) a court of competent jurisdiction enters an
order or decree under any Bankruptcy Law that:
(i) is for relief in an involuntary case against
the Company or any Significant Subsidiary,
(ii) appoints a Custodian of the Company or any
Significant Subsidiary or for all or substantially all of
the property of the Company or any Significant Subsidiary,
or
(iii) orders the liquidation of the Company or any
Significant Subsidiary,
and, in each case, the order or decree remains unstayed and in effect for 60
consecutive days.
The term "Bankruptcy Law" means Title 11 of the U.S. Code or any
similar federal, foreign or state law for the relief of debtors. The term
"Custodian" means any receiver, trustee, assignee, liquidator, examiner or
similar official under any Bankruptcy Law. The term "Significant Subsidiary"
has the same meaning as significant subsidiary has under Regulation S-X under
the Securities Act as in effect on the date hereof.
A Default under clause (c) of this Section 6.1 (other than a Default
under Section 5.1, which Default shall be an Event of Default with the notice
but without the passage of time specified in clause (c) of this Section 6.1) or
clause (d) of this Section 6.1 shall not be an Event of Default until (i) the
Trustee shall have notified the Company, or the Holders of at least 25% in
aggregate principal amount of the Notes then outstanding shall have notified
the Company and the Trustee, of the Default and (ii) the Company shall have
failed to cure the Default under such clause (c) within 90 days after receipt
of the notice or under such clause (d) within 10 days after receipt of the
notice, respectively. Any such notice must specify the Default, demand that it
be remedied and state that the notice is a "Notice of Default."
Section 6.2 Acceleration.
If an Event of Default (other than an Event of Default specified in
clauses (e) and (f) of Section 6.1) occurs and is continuing, the Trustee (by
notice to the Company), or the Holders of at least 25% in aggregate principal
amount of the Notes then outstanding (by notice to the Company and the
Trustee), may declare the unpaid Principal of and accrued interest on all the
Notes then outstanding to be due and payable. Upon any such declaration, such
Principal and accrued interest shall be due and payable immediately. If an
Event of Default specified in clause (e) or (f) of Section 6.1 occurs, such an
amount shall ipso facto become and be immediately due
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and payable without any declaration or other act on the part of the Trustee or
any Holder. The Holders of a majority in aggregate principal amount of the
Notes then outstanding by written notice to the Trustee may rescind an
acceleration and its consequences if (a) the Company has paid or deposited with
the Trustee a sum sufficient to pay (i) all overdue interest on all Notes then
outstanding and (ii) the Principal or repurchase price, if any, of the Notes
then outstanding which have become due otherwise than by such declaration of
acceleration and accrued interest thereon at a rate borne by the Notes and (b)
the rescission would not conflict with any judgment or decree and if all
existing Events of Default have been cured or waived except nonpayment of
Principal or interest that has become due solely because of the acceleration.
No such recision shall affect any subsequent Default or impair any right
consequent thereto.
Section 6.3 Other Remedies.
If an Event of Default occurs and is continuing, the Trustee may pursue
any available remedy to collect the payment of Principal or repurchase price, if
any, of or interest on the Notes or to enforce the performance of any provision
of the Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies
are cumulative to the extent permitted by law.
Section 6.4 Waiver of Existing and Past Defaults.
The Holders of a majority in aggregate principal amount of the Notes
then outstanding held by Persons who are not Affiliates of the Company by
written notice to the Trustee may waive an existing Default or Event of Default
and its consequences, except (i) a continuing Default or Event of Default in
the payment of the Principal of or the interest on any Note or (ii) a Default
or Event of Default with respect to a provision that under Section 9.2 cannot
be amended without the consent of each Holder affected. Upon any such waiver,
such Default shall cease to exist, and any Event of Default arising therefrom
shall be deemed to have been cured for every purpose of this Indenture; but no
such waiver shall extend to any subsequent or other Default or impair any
right consequent thereon.
Section 6.5 Control by Majority.
Notwithstanding anything contained in Section 6.3 to the contrary, the
Holders of a majority in aggregate principal amount of the Notes then
outstanding may direct the time, method and place of conducting any proceeding
for any remedy available to the Trustee or exercising any trust or power
conferred on it; provided, however, that the Trustee may refuse to follow any
direction that conflicts with applicable law or this Indenture or that the
Trustee determines is unduly prejudicial to the rights of other Holders or
would involve the Trustee in personal liability; provided further, however,
that the Trustee may take any other action deemed proper by the Trustee which
is not inconsistent with such direction.
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Prior to taking any action or following any direction pursuant to this
Article 6, the Trustee shall be entitled to request indemnification
satisfactory to it in its sole discretion against any loss or expense caused by
taking such action or following such direction. If the Trustee makes such
request, it shall be entitled to delay taking such action or following such
direction until it has received such indemnification.
Section 6.6 Limitation on Suits.
A Holder may pursue a remedy with respect to this Indenture or the
Notes only if:
(a) the Holder gives to the Trustee notice of a
continuing Event of Default;
(b) the Holders of at least 25% in aggregate principal
amount of the Notes then outstanding make a request to the Trustee to
pursue the remedy;
(c) such Holder or Holders offer to the Trustee indemnity
satisfactory to the Trustee against any loss, liability or expense;
(d) the Trustee does not comply with the request within
60 days after receipt of the request and the offer of indemnity; and
(e) during such 60-day period the Holders of a majority
in aggregate principal amount of the Notes then outstanding do not
give the Trustee a direction inconsistent with the request.
A Holder may not use this Indenture to prejudice the rights of another Holder
or to obtain a preference or priority over another Holder.
Section 6.7 Rights of Holders to Receive Payment.
Notwithstanding any other provision of this Indenture, the right of
any Holder of a Note to receive payment of Principal or repurchase price, if
any, of and interest on such Note, on or after the respective due dates
expressed in the Note, or to bring suit for the enforcement of any such
payment on or after such respective dates, shall not be impaired or affected
without the consent of such Holder.
Notwithstanding any other provision of this Indenture, the right of
any Holder of a Note to bring suit for the enforcement of the right to convert
such Note shall not be impaired or affected without the consent of such Holder.
Section 6.8 Collection Suit by Trustee.
If an Event of Default specified in Section 6.1(a) or 6.1(b) occurs
and is continuing, the Trustee may recover judgment in its own name and as
trustee of an express trust against the Company for the whole amount of
Principal or repurchase price, if any, of and interest accrued on the Notes and
interest on overdue Principal or repurchase price, if any, of and accrued
interest on the Notes and for such further amount as shall
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be sufficient to cover the costs and, to the extent lawful, expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and its counsel.
Section 6.9 Trustee May File Proofs of Claim.
The Trustee may file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee and the Holders allowed in any judicial proceedings relative to the
Company, its creditors or its property. Except as provided in this Indenture,
nothing contained herein shall be deemed to authorize the Trustee to authorize
or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Notes or
the rights of any Holder or to authorize the Trustee to vote with respect to
the claim of any Holder in any such proceeding.
Section 6.10 Priorities.
If the Trustee collects any money pursuant to this Article 6, it shall
pay out the money in the following order:
First: to the Trustee for amounts due under Section 6.8 or
7.7;
Second: to holders of Senior Indebtedness to the extent
required by Article 11;
Third: to Holders for amounts due and unpaid on the Notes
for Principal and interest, ratably, without
preference or priority of any kind, according to the
amounts due and payable on the Notes for Principal
and interest, respectively; and
Fourth: to the Company or to such party as a court of
competent jurisdiction shall direct.
The Trustee may fix a record date and payment date for any payment to
Holders and, if it does so, will give prompt prior written notice thereof to
the Registrar.
At least 15 days before any such record date, the Trustee shall give
or cause to be given to each Holder a notice that states such record date, such
payment date and the amount to be paid.
Section 6.11 Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as a Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the
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claims or defenses made by the party litigant. This Section 6.11 does not
apply to a suit by the Trustee, a suit by a Holder pursuant to Section 6.7, or
a suit by Holders of more than 10% in aggregate principal amount of the then
outstanding Notes or any suit for the enforcement of the right to convert any
Note in accordance with Article 10.
ARTICLE 7.
TRUSTEE
Section 7.1 Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their exercise, as a
prudent person would exercise or use under the circumstances in the conduct of
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 or the TIA and no others; and
(ii) in the absence of gross negligence, willful
misconduct or 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.
However, the Trustee shall examine the certificates and opinions to
determine whether or not they conform to the requirements of this
Indenture, but the Trustee need not verify the contents thereof.
(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 Section 7.1(c) does not limit the effect of
Section 7.1(b);
(ii) the Trustee shall not be liable for any error of
judgment made in good faith by a Trust Officer, unless it is proved
that the Trustee was negligent in ascertaining the pertinent facts;
and
(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 6.5.
(d) Every provision of this Indenture that in any way relates
to the Trustee is subject to the provisions of the TIA and Sections 7.1(a),
7.1(b), 7.1(c) and 7.1(e).
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(e) The Trustee may refuse to perform any duty or exercise any
right or power hereunder unless it receives indemnity satisfactory to it
against any loss, liability or expense.
(f) The Trustee shall not be liable for interest on any money
received by it hereunder, except as the Trustee may agree in writing with the
Company. Money held by the Trustee in trust hereunder need not be segregated
from other funds, except to the extent required by law.
Section 7.2 Rights of Trustee.
(a) The Trustee may conclusively rely on any document believed
by it to be genuine and to have been signed or presented by the proper Person.
The Trustee need not investigate any fact or matter stated in the document, but
the Trustee, in its discretion, may make such further inquiry or investigation
into such facts or matters to the extent reasonably deemed necessary by it.
(b) Before the Trustee acts or refrains from acting pursuant to
the terms of this Indenture or otherwise, it may require an Officers'
Certificate or an Opinion of Counsel, or both. The Trustee shall not be liable
for any action it takes or omits to take in good faith in reliance on such
Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through agents and attorneys and shall
not be responsible for the willful misconduct or gross negligence of any agents
and attorneys appointed with due care.
(d) 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
which it believes to be authorized or within its rights or powers conferred by
this Indenture.
Section 7.3 Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Notes and may otherwise deal with the Company or any
Affiliate of the Company with the same rights it would have if it were not
Trustee. Any Agent may do the same with like rights. However, the Trustee is
subject to and must comply with Sections 7.10 and 7.11.
Section 7.4 Trustee's Disclaimer.
The Trustee makes no representation as to the validity or adequacy of
this Indenture or the Notes, it shall not be accountable for the Company's use
of the proceeds from the Notes, and it shall not be responsible for any
statement of the Company in this Indenture or any statement in the Notes other
than its authentication.
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Section 7.5 Notice of Defaults.
If a Default or Event of Default occurs and is continuing and if it is
actually known to the Trustee, the Trustee shall mail to each Holder a notice
of the Default or Event of Default within 90 days after it occurs, unless such
Default or Event of Default shall have been cured or waived. Except in the
case of a Default or Event of Default in payment on any Note under Section
6.1(a) or 6.1(b), the Trustee may withhold the notice if and so long as a
committee of its Trust Officers in good faith determines that withholding the
notice is in the best interests of Holders.
Section 7.6 Reports by Trustee to Holders.
Within 60 days after each May 15, commencing, May 15, 1997, the
Trustee shall mail to each Holder, at the Company's expense, a brief report
dated as of such reporting date that complies with TIA Section 313(a) (but if
no event described in TIA Section 313(a) has occurred within the 12 months
preceding the reporting date, no report need be transmitted). The Trustee also
shall comply with TIA Section 313(b)(2) to the extent applicable. The Trustee
shall also transmit by mail all reports as required by TIA Section 313(c).
A copy of each report at the time of its mailing to Holders shall be
filed with the SEC and each stock exchange or market on which the Notes are
listed or admitted to trading. The Company shall promptly notify the Trustee
when the Notes are listed on any stock exchange or admitted to trading on any
market and of any delisting thereof.
Section 7.7 Compensation and Indemnity.
The Company shall pay to the Trustee (in its capacities as Trustee,
Conversion Agent, Paying Agent and Registrar) from time to time such
compensation as may be agreed in writing between the Company and the Trustee
for its services hereunder. The Trustee's compensation shall not be (to the
extent permitted by law) limited by any law on compensation of a trustee of an
express trust. The Company shall reimburse the Trustee upon request for all
reasonable out-of-pocket expenses incurred by it in accordance with any
provision of this Indenture. Such expenses may include the reasonable
compensation and out-of-pocket expenses of the Trustee's agents and counsel,
except such disbursements, advances and expenses as may be attributable to its
negligence, willful misconduct or bad faith. Any "float" earned on any money
disbursed hereunder shall be considered additional compensation to the Trustee.
The Company shall indemnify the Trustee (in its capacity as Trustee,
Conversion Agent, Paying Agent and Registrar) and each of its officers,
directors, attorneys-in-fact and agents for, and hold each of such Persons
harmless against, any claim, demand, expense (including, but not limited to,
reasonable disbursements and expenses of the Trustee's agents and counsel),
loss or liability incurred by any of them without negligence, willful
misconduct or bad faith on such Person's part, arising out of or in connection
with the administration of this trust and the rights or duties of the Trustee
hereunder, including the costs and expenses of such Person's defense against
any claim or liability in connection with the exercise or performance of any
of the
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Trustee's powers or duties hereunder. The Trustee shall notify the Company
promptly of any claim asserted against the Trustee for which it may seek
indemnity. The Company shall defend the claim and the Trustee shall provide
reasonable cooperation at the Company's expense in the defense. The Trustee
may engage separate counsel at its own expense and participate in the defense,
provided that the Company shall bear the reasonable expenses of such separate
counsel which is reasonably acceptable to the Company if the defendants
regarding such claim include both the Trustee and the Company and the Trustee
shall have been advised by such separate counsel that representation of the
Trustee and the Company would be inappropriate under applicable standards of
professional responsibility due to actual or potential differing interests
between them. The Company need not reimburse any expense or indemnify against
any loss or liability to the extent incurred by the Trustee through its
negligence, bad faith or willful misconduct. The Company need not pay for any
settlement made without its consent, which consent shall not be unreasonable
withheld.
The Company's payment obligations pursuant to this Section 7.7 shall
survive the discharge of this Indenture. When the Trustee incurs expenses or
renders services after an Event of Default specified in Section 6.1(e) or
6.1(f) occurs, the expenses and the compensation for the services are intended
to constitute expenses of administration under any Bankruptcy Law.
Section 7.8 Replacement of Trustee.
A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section 7.8.
The Trustee may resign by so notifying the Company in writing at least
30 days prior to the date of the proposed resignation; provided, however, that
no such resignation shall be effective until a successor Trustee has accepted
its appointment pursuant to this Section 7.8. The Holders of a majority in
aggregate principal amount of the then outstanding Notes may remove the Trustee
by so notifying the Trustee and the Company. The Company shall remove the
Trustee if:
(a) the Trustee fails to comply with Section 7.10;
(b) the Trustee is adjudged a bankrupt or an insolvent or
an order for relief is entered with respect to the Trustee under any
Bankruptcy Law;
(c) a Custodian or public officer takes charge of the
Trustee or its property; or
(d) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a
successor Trustee.
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If a successor Trustee is not appointed or does not take office within
30 days after the retiring Trustee resigns or is removed, the retiring Trustee,
the Company or the Holders of at least 10% in aggregate principal amount of the
then outstanding Notes may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any Holder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Holders. The retiring Trustee shall promptly transfer all
property held by it as Trustee to the successor Trustee. Notwithstanding the
replacement of the Trustee pursuant to this Section 7.8, the Company's
obligations under Section 7.7 shall continue for the benefit of the retiring
Trustee with respect to expenses and liabilities incurred by it prior to such
replacement.
Section 7.9 Successor Trustee by Merger.
Except as otherwise provided in Section 7.8(a) or 7.8(d), if the
Trustee consolidates, merges or converts into, or transfers all or
substantially all of its corporate trust business to, another corporation, the
successor corporation without any further act shall be the successor Trustee.
Section 7.10 Eligibility; Disqualification.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA Section 310(a). The Trustee shall always have a combined
capital and surplus as stated in its most recent published annual report of
condition of at least $100 million. The Trustee shall comply with TIA Section
310(b). In the event the Trustee shall cease to be eligible in accordance with
this Section 7.10, the Trustee shall resign immediately in the manner and with
the effect specified in Section 7.8.
Section 7.11 Preferential Collection of Claims Against Company.
The Trustee shall comply with TIA Section 311(a), excluding any
creditor relationship listed in TIA Section 311(b). A Trustee who has resigned
or been removed shall be subject to TIA Section 311(a) to the extent indicated
therein.
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ARTICLE 8.
DISCHARGE OF INDENTURE
Section 8.1 Termination of Company's Obligations.
This Indenture shall cease to be of further effect (except that the
Company's obligations under Sections 7.7 and 8.2 shall survive) when all
outstanding Notes theretofore authenticated and issued (other than destroyed,
lost or stolen Notes which have been replaced or paid) have been delivered to
the Trustee for cancellation and the Company has paid all sums payable
hereunder.
Section 8.2 Repayment to Company.
The Trustee and the Paying Agent shall promptly pay to the Company
upon request any excess money or securities held by them at any time.
The Trustee and the Paying Agent shall pay to the Company upon written
request by the Company any money held by them for the payment of Principal,
repurchase price or interest that remains unclaimed for one year after the date
upon which such payment shall have become due; provided, however, that the
Company shall have first caused notice of such payment to the Company to be
mailed to each Holder entitled thereto no less than 30 days prior to such
payment. After payment to the Company, Holders entitled to the money must look
to the Company for payment as general creditors unless an applicable abandoned
property law designates another Person.
ARTICLE 9.
AMENDMENTS
Section 9.1 Without Consent of Holders.
The Company and the Trustee may amend this Indenture or the Notes
without the consent of any Holder:
(a) to cure any ambiguity, defect or inconsistency;
provided, that such amendment does not in the opinion of the Trustee
adversely affect the rights of any Holder;
(b) to comply with Section 5.1 or 10.5;
(c) to provide for uncertificated Notes in addition to or
in lieu of certificated Notes;
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(d) to add to the covenants of the Company such further
covenants, restrictions, conditions or provisions for the protection
of the Holders, and to make the occurrence, or the occurrence and
continuance, of a default in any such additional covenants,
restrictions, conditions or provisions an Event of Default permitting
the enforcement of all or any of the several remedies provided in this
Indenture or in the Notes as herein set forth;
(e) to change the place of payment of Principal or
repurchase price, if any, of or interest on the Notes, provided, that
such new place of payment is located within the 48 contiguous
continental States of the United States;
(f) to make any change that does not adversely affect the
rights hereunder of any Holder; or
(g) to comply with requirements of the SEC in order to
effect or maintain the qualification of this Indenture under the TIA;
provided, however, that, in each case, the Company has delivered to the Trustee
an Opinion of Counsel and an Officers' Certificate, each stating that such
amendment complies with the provisions of this Section 9.1.
Section 9.2 With Consent of Holders.
Subject to the provisions of Sections 6.4 and 6.7, the Company and the
Trustee may amend or modify this Indenture or the Notes with the written
consent of the Holders of at least a majority in aggregate principal amount of
the then outstanding Notes, and the Holders of a majority in aggregate
principal amount of the Notes then outstanding may waive compliance in a
particular instance by the Company with any provision of this Indenture or the
Notes; provided, however, that, without the consent of each Holder affected, an
amendment, modification or waiver under this Section 9.2 may not (with respect
to any Notes held by a non-consenting Holder):
(a) change the stated maturity of, or any installment of
interest on, or waive a default in the payment of Principal or
repurchase price, if any, of or interest on any Note;
(b) reduce the principal amount of any Note or reduce the
rate or extend the time of payment of interest on any Note;
(c) increase the Conversion Price (other than in
connection with a combination described in Section 10.4(a)(iii));
(d) except as otherwise provided in Section 9.1(e),
change the place or currency of payment of Principal or repurchase
price, if any, of or interest on any Note;
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(e) impair the right to institute suit for the
enforcement of any payment on or with respect to any Note;
(f) adversely affect the right to exchange or convert
Notes;
(g) reduce the percentage of the aggregate principal
amount of outstanding Notes, the consent of the Holders of which is
necessary to amend this Section 9.2, consent to a merger,
consolidation or conveyance, sale, transfer or lease of assets as
described in Section 5.1 or modify or amend any other provision of
this Indenture;
(h) reduce the percentage of the aggregate principal
amount of outstanding Notes, the consent of the Holders of which is
necessary for waiver of compliance with certain provisions of this
Indenture or for waiver of certain defaults;
(i) modify the provisions of this Indenture with respect
to the subordination of the Notes in a manner adverse to the Holders;
(j) except as otherwise permitted under Article 5,
consent to the assignment or transfer by the Company of any of its
rights and obligations under this Indenture;
(k) modify the provisions of this Indenture with respect
to the obligation of the Company to repurchase Notes in a manner
adverse to the Holders.
To secure a consent of the Holders under this Section 9.2, it shall
not be necessary for the Holders to approve the particular form of any proposed
amendment or waiver, but it shall be sufficient if such consent approves the
substance thereof.
After an amendment or waiver under this Section 9.2 becomes effective,
the Company shall mail to Holders a notice briefly describing the amendment or
waiver. Any failure of the Company to mail such notices, or any defect therein,
shall not, however, in any way, impair or affect the validity of any such
amendment or waiver.
Section 9.3 Compliance with Trust Indenture Act.
Every amendment to this Indenture or the Notes shall be set forth in a
supplemental indenture that complies with the TIA as then in effect.
Section 9.4 Revocation and Effect of Consents.
Until an amendment, supplemental indenture or waiver becomes
effective, a consent to it by a Holder of a Note is a continuing consent by
such Holder and every subsequent Holder of a Note or portion of a Note that
evidences the same debt as such consenting Holder's Note, even if notation of
the consent is not made on any Note. However, prior to becoming effective, any
such Holder or subsequent Holder may revoke the consent as to its Notes or a
portion thereof if the Trustee receives written notice of revocation before the
consent of Holders of the
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requisite aggregate principal amount of Notes then outstanding has been
obtained and not revoked.
The Company may, but shall not be obligated to, fix a record date
pursuant to Section 12.1 for the purpose of determining the Holders entitled to
consent to any amendment or waiver. If a record date is fixed, then
notwithstanding the provisions of the immediately preceding paragraph, those
Persons who were Holders at such record date (or their duly designated
proxies), and only those Persons, shall be entitled to consent to such
amendment or waiver or to revoke any consent previously given, whether or not
such Persons continue to be Holders after such record date. No consent shall
be valid or effective for more than 90 days after such record date unless
consents from Holders of the principal amount of Notes required hereunder for
such amendment or waiver to be effective shall have also been given and not
revoked within such 90-day period.
After an amendment or waiver becomes effective it shall bind every
Holder, unless it is of the type described in any of clauses (a) through (k) of
Section 9.2. In such case, the amendment or waiver shall bind each Holder of a
Note who has consented to it and every subsequent Holder of a Note that
evidences the same debt as the consenting Holder's Note.
Section 9.5 Notation on or Exchange of Notes.
The Trustee (in accordance with the written direction of the Company)
may (at the Company's expense) place an appropriate notation about an
amendment, supplement or waiver on any Note thereafter authenticated. The
Company in exchange for all Notes may issue and the Trustee shall authenticate
new Notes that reflect the amendment or waiver. Failure to make the
appropriate notation or issue a new Note shall not affect the validity and
effect of such amendment, supplement or waiver.
Section 9.6 Trustee Protected.
The Trustee shall sign all supplemental indentures authorized by this
Indenture, except that the Trustee need not sign any supplemental indenture
that adversely affects its rights. In signing or refusing to sign such
supplemental indenture, the Trustee shall be entitled to receive an Officers'
Certificate and Opinion of Counsel to the effect that such supplemental
indenture is authorized or permitted by this Indenture and will be valid and
binding on the Company in accordance with its terms.
ARTICLE 10.
CONVERSION
Section 10.1 Conversion Privilege.
Each Holder may, at such Holder's option, at any time prior to the
close of business on October 1, 2003, unless earlier redeemed or repurchased,
convert such Holder's Notes, in whole
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or in part (in denominations of $1,000 or multiples thereof), at 100% of the
principal amount so converted, into shares of Common Stock at a conversion
price per share equal to $18.50, as such conversion price may be adjusted from
time to time in accordance with this Article 10 (the "Conversion Price").
If a Note is converted prior to the earliest of the Distribution Date,
the Final Expiration Date or the Redemption Date, the Holder of such Note shall
receive, for no additional consideration, in addition to such shares, that
number of Rights to which a holder of such shares is then entitled under the
Rights Agreement. If a Note is not converted prior to the earlier of such
dates, no Rights will be issued upon the conversion thereof.
Section 10.2 Conversion Procedure.
To convert a Note, the Holder thereof must (1) complete and sign the
"Form of Election to Convert" thereon (unless such Holder is The Depository
Trust Company ("DTC") or its nominee, in which case the customary procedures of
DTC will apply), (2) surrender such Note to the Conversion Agent, (3) furnish
appropriate endorsements and transfer documents if required by the Registrar or
the Conversion Agent, (4) pay any transfer or similar tax if required by
Section 10.6 and (5) make any payment required by the first proviso to the
third sentence of this paragraph. The Company's delivery to the Holder of a
fixed number of shares of Common Stock (and any cash in lieu of fractional
shares of Common Stock into which such Note is converted) shall be deemed to
satisfy the Company's obligation to pay the principal amount of such Note and,
except as provided in the next sentence, all accrued interest on such Note. If
such Note (including a Note which has been called for redemption and even if a
Change of Control Offer has been made) is converted after a regular interest
payment record date and prior to the related Interest Payment Date, the full
interest installment on such Note scheduled to be paid on such Interest Payment
Date shall be payable on such Interest Payment Date to the Holder of record at
the close of business on such record date; provided, however, that if such
record date is on or after March 15, 2000, such Note must be accompanied by a
payment equal to the interest on such Note (or portion thereof converted)
payable by the Company on such Interest Payment Date, which payment will be
returned to such Holder if the Company defaults in the payment of such
interest.
As promptly as practicable after the surrender of a Note in compliance
with this Section 10.2, the Company shall issue and deliver at the office or
agency of the Registrar or the Conversion Agent to such Holder, or on such
Holder's written order, a certificate or certificates for the full number of
whole shares of Common Stock issuable upon the conversion of such Note in
accordance with the provisions of this Article 10 and a check or cash with
respect to any fractional share of Common Stock arising upon such conversion as
provided in Section 10.3. In case any Note of a denomination greater than
$1,000 shall be surrendered for partial conversion, then, subject to Article 2,
the Company shall execute and the Trustee shall authenticate and deliver to the
Holder of the Note so surrendered, without charge to such Holder, a new Note or
Notes in authorized denominations in an aggregate principal amount equal to the
unconverted portion of the surrendered Note.
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Each conversion shall be deemed to have been effected on the date on
which such Note shall have been surrendered in compliance with this Section
10.2, and the Person in whose name any certificate or certificates for shares
of Common Stock shall be issuable upon such conversion shall be deemed to have
become on said date the holder of record of the shares of Common Stock
represented thereby for all purposes; provided, however, that no surrender of a
Note on any date when the stock transfer books of the Company shall be closed
shall be effective to constitute the Person or Persons entitled to receive such
shares upon such conversion as the record holder or holders of such shares on
such date, but such surrender shall be effective to constitute the Person or
Persons entitled to receive such shares as the record holder or holders thereof
for all purposes at the close of business on the next succeeding day on which
such stock transfer books are open and, in any such case, such conversion shall
be at the Conversion Price in effect on the date on which such Note shall have
been surrendered.
If the last day on which a Note may be converted is not a Business
Day, the Note may be surrendered to that Conversion Agent on the next
succeeding Business Day.
Provisions of this Indenture that apply to conversion of all of a Note
also apply to conversion of a portion of such Note.
Section 10.3 Cash Payments in Lieu of Fractional Shares.
No fractional shares of Common Stock or scrip representing fractional
shares of Common Stock shall be issued upon conversion of Notes. If more than
one Note shall be surrendered for conversion at one time by the same Holder,
the full number of whole shares of Common Stock which shall be issuable upon
conversion shall be computed on the basis of the aggregate principal amount of
Notes (or specified portions thereof to the extent permitted hereby) so
surrendered. If any fractional share of Common Stock would be issuable upon
the conversion of any Note or Notes, the Company shall make an adjustment
therefor in cash at the Current Market Price of the Common Stock as of the
close of business on the Business Day prior to such conversion.
Section 10.4 Adjustment of Conversion Price.
(a) If the Company shall (i) pay a dividend or other
distribution, in Common Stock, on any class of Capital Stock of the Company or
any Subsidiary which is not wholly owned by the Company, (ii) subdivide the
outstanding Common Stock into a greater number of shares by any means or (iii)
combine the outstanding Common Stock into a smaller number of shares by any
means (including, without limitation, a reverse stock split), then in each such
case the Conversion Price in effect immediately prior thereto shall be adjusted
so that the Holder of any Note thereafter surrendered for conversion shall be
entitled to receive the number of shares of Common Stock that such Holder would
have owned or have been entitled to receive upon the happening of such event
had such Note been converted immediately prior to the relevant record date or,
if there is no such record date, the effective date of such event. An
adjustment made pursuant to this Section 10.4(a) shall become effective
immediately after the record date for the determination of stockholders
entitled to receive such dividend or distribution and shall become
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effective immediately after the effective date of such subdivision or
combination, as the case may be.
(b) If the Company shall (i) issue or distribute (at a price
per share less than the Current Market Price per share of such Capital Stock on
the date of such issuance or distribution) Capital Stock generally to holders
of Common Stock or to holders of any class or series of Capital Stock which is
convertible into or exchangeable or exercisable for Common Stock (excluding an
issuance or distribution of Common Stock described in Section 10.4(a), but
including an issuance of Common Stock upon the exercise of Rights under the
1994 Rights Agreement) or (ii) issue or distribute generally to such holders
rights, warrants, options or convertible or exchangeable securities entitling
the holder thereof to subscribe for, purchase, convert into or exchange for
Capital Stock at a price per share less than the Current Market Price per share
of such Capital Stock on the date of issuance or distribution, then, in each
such case, at the earliest of (A) the date the Company enters into a firm
contract for such issuance or distribution, (B) the record date for the
determination of stockholders entitled to receive any such Capital Stock or any
such rights, warrants, options or convertible or exchangeable securities or (C)
the date of actual issuance or distribution of any such Capital Stock or any
such rights, warrants, options or convertible or exchangeable securities, the
Conversion Price shall be reduced by multiplying the Conversion Price in effect
immediately prior to such earliest date by:
(x) if such Capital Stock is Common Stock, a fraction the numerator of
which is the number of shares of Common Stock outstanding on such
earliest date plus the number of shares of Common Stock which could be
purchased at the Current Market Price per share of Common Stock on the
date of such issuance or distribution with the aggregate consideration
(based on the Fair Market Value thereof) received or receivable by the
Company either (A) in connection with such issuance or distribution or
(B) upon the conversion, exchange, purchase or subscription of all
such rights, warrants, options or convertible or exchangeable
securities (the "Aggregate Consideration"), and the denominator of
which is the number of shares of Common Stock outstanding on such
earliest date plus the number of shares of Common Stock to be so
issued or distributed or to be issued upon the conversion, exchange,
purchase or subscription of all such rights, warrants, options or
convertible or exchangeable securities; or
(y) if such Capital Stock is other than Common Stock, a fraction the
numerator of which is the Current Market Price per share of Common
Stock on such earliest date minus an amount equal to (A) the sum of
(1) the Current Market Price per share of such Capital Stock
multiplied by the number of shares of such Capital Stock to be so
issued minus (2) the Aggregate Consideration, divided by (B) the
number of shares of Common Stock outstanding on such date, and the
denominator of which is the Current Market Price per share of Common
Stock on such earliest date.
Such adjustment shall be made successively whenever any such Capital Stock,
rights, warrants, options or convertible or exchangeable securities are so
issued or distributed. In determining whether any rights, warrants, options or
convertible or exchangeable securities entitle the holders
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thereof to subscribe for, purchase, convert into or exchange for shares of such
Capital Stock at less than such Current Market Price, there shall be taken into
account the Fair Market Value of any consideration received or receivable by
the Company for such rights, warrants, options or convertible or exchangeable
securities. If any right, warrant, option or convertible or exchangeable
securities, the issuance of which resulted in an adjustment in the Conversion
Price pursuant to this Section 10.4(b), shall expire and shall not have been
exercised, the Conversion Price shall immediately upon such expiration be
recomputed to the Conversion Price which would have been in effect if such
right, warrant, option or convertible or exchangeable securities had never been
distributed or issued. Notwithstanding anything contained in this paragraph to
the contrary, the issuance of Capital Stock upon the exercise of such rights,
warrants or options or the conversion or exchange of such convertible or
exchangeable securities will not cause an adjustment in the Conversion Price if
no such adjustment would have been required at the time such right, warrant,
option or convertible or exchangeable security was issued or distributed;
provided, however, that, if the consideration payable upon such exercise,
conversion or exchange and/or the Capital Stock receivable thereupon are
changed after the time of the issuance or distribution of such right, warrant,
option or convertible or exchangeable security, then such change shall be
deemed to be the expiration thereof without having been exercised and the
issuance or distribution of new options, rights, warrants or convertible or
exchangeable securities.
Notwithstanding anything contained in this Indenture to the contrary,
options, rights or warrants issued or distributed by the Company, including
options, rights or warrants distributed prior to the date of this Indenture
(including Rights under the 1994 Rights Agreement), to holders of Common Stock
generally which, until the occurrence of a specified event or events (a
"Trigger Event"), (i) are deemed to be transferred with Common Stock, (ii) are
not exercisable and (iii) are also issued on a pro rata basis with respect to
future issuances of Common Stock, shall be deemed not to have been issued or
distributed for purposes of this Section 10.4 (and no adjustment to the
Conversion Price under this Section 10.4 will be required) until the occurrence
of the earliest Trigger Event, whereupon such options, rights and warrants
shall be deemed to have been distributed and an adjustment (if any is required)
to the Conversion Price shall be made in accordance with this Section 10.4(b).
If any such option, right or warrant, including any such options, rights or
warrants distributed prior to the date of this Indenture (including Rights
under the 1994 Rights Agreement), are subject to events, upon the occurrence of
which such options, rights or warrants become exercisable to purchase different
securities, evidences of indebtedness, cash, Properties or other assets or
different amounts thereof, then the date of the occurrence of any and each such
event shall be deemed to be the date of distribution and record date with
respect to new options, rights or warrants with such new purchase rights (and a
termination or expiration of the existing options, rights or warrants without
exercise thereof). In addition, in the event of any distribution (or deemed
distribution) of options, rights or warrants, or any Trigger Event or other
event of the type described in the preceding sentence, that required (or would
have required but for the provisions of Section 10.4(e)) an adjustment to the
Conversion Price under this Section 10.4 which was in fact made and such
options, rights or warrants shall thereafter have been redeemed or repurchased
without having been exercised, then the Conversion Price shall be readjusted
upon such redemption or repurchase to give effect to such distribution, Trigger
Event or other event, as the case may be, as though it had instead been a cash
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distribution, equal on a per share basis to the result of the aggregate
redemption or repurchase price received by holders of such options, rights or
warrants divided by the number of shares of Common Stock outstanding as of the
date of such repurchase or redemption, made to holders of Common Stock
generally as of the date of such redemption or repurchase. For purposes of
this paragraph, the earlier of the Distribution Date, Redemption Date or Final
Expiration Date shall be deemed to be a Trigger Event with respect to the
Rights and the Flip-in Event shall be deemed to be an event described in the
second sentence of this paragraph.
Notwithstanding anything contained in this Section 10.4(b) to the
contrary, no adjustment shall be made in the Conversion Price pursuant to this
Section 10.4(b) with respect to the issuance of Common Stock or options or other
rights to purchase Common Stock pursuant to any employee stock purchase, bonus,
award, grant, option or ownership plan (including, without limitation, an
employee stock ownership plan which is part of an employee benefit plan
qualified under Section 401 of the Internal Revenue Code of 1986, as amended
(the "Code"), an employee stock option or incentive stock option plan qualified
under Section 422 of the Code and a restricted stock plan, including the
issuance of Common Stock upon the exercise of such options; provided, that, for
purposes of this paragraph, the term "employee" includes directors, consultants
and advisors and the term "plan" means a plan, program or arrangement in which 5
or more Persons are eligible to participate (or, if only directors of the
Company are eligible to participate and there are fewer than 5 such directors,
in which all of such directors are eligible to participate).
(c) If the Company shall pay or distribute, as a dividend or
otherwise, generally to holders of Common Stock or any class or series of
Capital Stock which is convertible into or exercisable or exchangeable for
Common Stock any assets, Properties or rights (including, without limitation,
evidences of indebtedness of the Company, any Subsidiary or any other Person,
cash or Capital Stock or other securities of the Company, any Subsidiary or any
other Person, but excluding payments and distributions as described in Section
10.4(a) or 10.4(b), dividends and distributions in connection with the
liquidation, dissolution or winding up of the Company in its entirety and
distributions consisting solely of cash described in Section 10.4(d)), then in
each such case the Conversion Price shall be reduced by multiplying the
Conversion Price in effect immediately prior to the date of such payment or
distribution by a fraction, the numerator of which is the Current Market Price
per share of Common Stock on the record date for the determination of
stockholders entitled to receive such payment or distribution less the Fair
Market Value per share on such record date of the assets, Properties or rights
so paid or distributed, and the denominator of which is the Current Market
Price per share of Common Stock on such record date. Such adjustment shall
become effective immediately after such record date. For purposes of this
Section 10.4(c), such Fair Market Value per share shall equal the aggregate
Fair Market Value on such record date of the assets, Properties or rights so
paid or distributed divided by the number of shares of Common Stock outstanding
on such record date.
(d) If the Company shall, by dividend or otherwise, make a
distribution (other than in connection with the liquidation, dissolution or
winding up of the Company in its entirety), generally to holders of Common
Stock or any class or series of Capital Stock which is convertible into or
exercisable or exchangeable for Common Stock, consisting solely of cash where
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<PAGE> 46
(x) the sum of (i) the aggregate amount of such cash plus (ii) the aggregate
amount of all cash so distributed (by dividend or otherwise) to such holders
within the 12-month period ending on the record date for determining
stockholders entitled to receive such distribution with respect to which no
adjustment has been made to the Conversion Price pursuant to this Section
10.4(d) exceeds (y) 10% of the result of the multiplication of (1) the Current
Market Price per share of Common Stock on such record date times (2) the number
of shares of Common Stock outstanding on such record date, then the Conversion
Price shall be reduced, effective immediately prior to the opening of business
on the day following such record date, by multiplying the Conversion Price in
effect immediately prior to the close of business on the day prior to such
record date by a fraction, the numerator of which is the Current Market Price
per share of Common Stock on such record date less the aggregate amount of cash
per share so distributed and the denominator of which is such Current Market
Price; provided, however, that, if the aggregate amount of cash per share is
equal to or greater than such Current Market Price, then, in lieu of the
foregoing adjustment, adequate provision shall be made so that each Holder
shall have the right to receive upon conversion (with respect to each share of
Common Stock issued upon such conversion and in addition to the Common Stock
issuable upon conversion) the aggregate amount of cash per share such Holder
would have received had such Holder's Note been converted immediately prior to
such record date. In no event shall the Conversion Price be increased pursuant
to this Section 10.4(d); provided, however, that if such distribution is not so
made, the Conversion Price shall be adjusted to be the Conversion Price which
would have been in effect if such distribution had not been declared. For
purposes of this paragraph of this Section 10.4(d), such aggregate amount of
cash per share shall equal such sum divided by the number of shares of Common
Stock outstanding on such record date.
(e) The provisions of this Section 10.4 shall similarly apply
to all successive events of the type described in this Section 10.4.
Notwithstanding anything contained herein to the contrary, no adjustment in the
Conversion Price shall be required unless such adjustment would require an
increase or decrease of at least 1% in the Conversion Price then in effect;
provided, however, that any adjustments which by reason of this Section 10.4(e)
are not required to be made shall be carried forward and taken into account in
any subsequent adjustment. All calculations under this Article 10 shall be
made by the Company and shall be made to the nearest cent or to the nearest one
hundredth of a share, as the case may be, and the Trustee shall be entitled to
rely conclusively thereon. Notwithstanding anything contained in this Section
10.4 to the contrary, the Company shall be entitled to make such reductions in
the Conversion Price, in addition to those required by this Section 10.4, as it
in its discretion shall determine to be advisable in order that any stock
dividends, subdivision of shares, distribution of rights to purchase stock or
securities, or distribution of securities convertible into or exchangeable for
stock hereafter made by the Company to its stockholders shall not be taxable.
Except as provided in this Article 10, no adjustment in the Conversion Price
will be made for the issuance of Common Stock or any securities convertible
into or exchangeable for Common Stock or carrying the right to purchase Common
Stock or any securities so convertible or exchangeable.
(f) Whenever the Conversion Price is adjusted as provided
herein, the Company shall promptly file with the Trustee and any Conversion
Agent other than the Trustee an Officers' Certificate setting forth the
Conversion Price in effect after such adjustment and setting
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<PAGE> 47
forth a brief statement of the facts requiring such adjustment. Promptly after
delivery of such Officers' Certificate, the Company shall give or cause to be
given to each Holder a notice of such adjustment of the Conversion Price
setting forth the adjusted Conversion Price and the date on which such
adjustment becomes effective.
(g) Notwithstanding anything contained herein to the contrary,
in any case in which this Section 10.4 provides that an adjustment in the
Conversion Price shall become effective immediately after a record date for an
event, the Company may defer until the occurrence of such event (i) issuing to
the Holder of any Note converted after such record date and before the
occurrence of such event the additional shares of Common Stock issuable upon
such conversion by reason of the adjustment required by such event over and
above the number of shares of Common Stock issuable upon such conversion before
giving effect to such adjustment and (ii) paying to such Holder any amount in
cash in lieu of any fractional share of Common Stock pursuant to Section 10.3.
Section 10.5 Effect of Reclassification, Consolidation, Merger or Sale.
In the event of (i) any reclassification (including, without
limitation, a reclassification effected by means of an exchange or tender offer
by the Company or any Subsidiary) or change of outstanding Common Stock
(other than a change in par value, or from par value to no par value, or from
no par value to par value, or as a result of a subdivision or combination),
(ii) any consolidation, merger or combination of the Company with another
corporation as a result of which holders of Common Stock shall be entitled to
receive securities or other Property (including cash) with respect to or in
exchange for Common Stock or (iii) any sale or conveyance of the Property of
the Company as, or substantially as, an entirety to any other corporation as a
result of which holders of Common Stock shall be entitled to receive securities
or other Property (including cash) with respect to or in exchange for Common
Stock, then the Company or the successor or purchasing corporation, as the case
may be, shall enter into a supplemental indenture providing that each Note
shall be convertible into the kind and amount of securities or other Property
(including cash) receivable upon such reclassification, change, consolidation,
merger, combination, sale or conveyance which the Holder of such Note would
have received if such Note had been converted immediately prior to such
reclassification, change, consolidation, merger, combination, sale or
conveyance. Such supplemental indenture shall provide for adjustments which
shall be as nearly equivalent as may be practicable to the adjustments provided
for in this Article 10.
Whenever a supplemental indenture is entered into as provided herein,
the Company shall promptly file with the Trustee and any Conversion Agent other
than the Trustee an Officers' Certificate setting forth a brief statement of
the facts requiring such supplemental indenture. Promptly after delivery of
such Officers' Certificate, the Company shall give or cause to be given to each
Holder a notice of the execution of such supplemental indenture.
The provisions of this Section 10.5 shall similarly apply to all
successive events of the type described in this Section 10.5.
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Section 10.6 Taxes on Shares Issued.
The issuance of a certificate or certificates on conversions of Notes
shall be made without charge to the Holders of such Notes for any tax or charge
with respect to the issuance thereof. The Company shall not, however, be
required to pay any tax or charge which may be payable with respect to any
transfer involved in the issuance and delivery of a certificate or certificates
in any name other than that of the Holders of such Notes, and the Company shall
not be required to issue or deliver any such certificate or certificates unless
and until the Person or Persons requesting the issuance thereof shall have paid
to the Company the amount of such tax or charge or shall have established to
the satisfaction of the Company that such tax or charge has been paid.
Section 10.7 Reservation of Shares; Shares to be Fully Paid; Compliance
with Government Requirements; Listing of Common Stock.
The Company shall reserve, out of its authorized but unissued Common
Stock or its Common Stock held in treasury, sufficient shares of Common Stock
to provide for the conversion of all of the Notes that are outstanding from
time to time.
Before taking any action which would cause an adjustment reducing the
Conversion Price below the then par value, if any, of the Common Stock issuable
upon conversion of Notes, the Company will take all corporate action which may,
in the opinion of its counsel, be necessary in order that the Company may
validly and legally issue Common Stock at such adjusted Conversion Price.
The Company covenants that all Common Stock which may be issued upon
conversion of Notes will, upon issuance, be duly authorized, validly issued,
fully paid and nonassessable and free from all taxes, liens and charges with
respect to the issuance and delivery thereof.
The Company covenants that if any Common Stock issued or delivered
upon conversion of Notes hereunder require registration with or approval of any
governmental authority under any applicable federal or state law (excluding
federal or state securities laws) before such Common Stock may be lawfully
issued, the Company will in good faith and as expeditiously as possible
endeavor to secure such registration or approval, as the case may be.
The Company covenants that it will not take any action which would
cause the exemption from the registration requirement of Section 5 of the
Securities Act afforded by Section 3(a)(9) of the Securities Act to be
unavailable with respect to the issuance and delivery of Common Stock upon
the conversion of Notes in accordance with this Indenture.
Section 10.8 Responsibility of Trustee Requirements.
The Trustee and any other Conversion Agent shall not at any time be
under any duty or responsibility to any Holder to determine whether any fact
exists which may require any adjustment of the Conversion Price or other
adjustment, or with respect to the nature, 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 any such
adjustment, or with respect to the correctness thereof. The Trustee and any
other Conversion Agent shall not be accountable with respect to the validity,
value, kind or amount of any item at any time issued or delivered upon the
conversion of any Note, and neither the Trustee nor any
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other Conversion Agent makes any representations with respect thereto. Subject
to Section 7.1, neither the Trustee nor any Conversion Agent shall be
responsible for any failure of the Company to issue, transfer or deliver any
item upon the surrender of any Note for conversion or to comply with any of the
duties, responsibilities or covenants of the Company contained in this Article
10. Without limiting the generality of the foregoing, neither the Trustee nor
any Conversion Agent shall be under any responsibility to determine the
correctness of any provisions contained in any supplemental indenture entered
into pursuant to Section 10.5, but, subject to the provisions of Section 7.1,
may accept as conclusive evidence of the correctness of any such provisions,
and shall be protected in relying upon, the Officers' Certificate with respect
thereto.
Section 10.9 Notice to Holders Prior to Certain Actions.
In the event that:
(a) the Company shall declare or authorize any event which
could result in an adjustment in the Conversion Price under Section 10.4 or
require the execution of a supplemental indenture under Section 10.5; or
(b) the Company shall authorize the granting to the holders of
Common Stock generally of rights, options or warrants to subscribe for or
purchase any shares of any class or series of Capital Stock of the Company or
any Subsidiary or any other rights, options or warrants, the reclassification
of Common Stock (other than a subdivision or combination of outstanding Common
Stock, or a change in par value, or from par value to no par value, or from no
par value to par value), the combination, consolidation or merger of the
Company for which approval of any stockholders of the Company is required, the
sale or transfer of all or substantially all of the assets of the Company or
the voluntary or involuntary dissolution, liquidation or winding-up of the
Company in whole or in part;
then, in each such case, the Company shall file or cause to be filed with the
Trustee and shall give or cause to be given to each Holder, as promptly as
possible but in any event at least 15 days prior to the applicable date
hereinafter specified, a notice stating the date on which a record is to be
taken for the purpose of determining the holders of outstanding Common Stock
entitled to participate in such event, the date on which such event is expected
to become effective or occur and the date on which it is expected that holders
of outstanding Common Stock of record shall be entitled to surrender their
shares, or receive any items, in connection with such event. Failure to give
such notice, or any defect therein, shall not affect the legality or validity
of such event.
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ARTICLE 11.
SUBORDINATION
Section 11.1 Agreement to Subordinate.
The Company covenants and agrees, and each Holder, by such Holder's
acceptance of a Note, likewise covenants and agrees, that, to the extent and in
the manner hereinafter set forth in this Article 11, the indebtedness
represented by the Notes and the payment of the Principal and repurchase price,
if any, of and interest on each and all of the Notes are hereby expressly made
subordinate and subject in right of payment to the prior payment in full of all
Senior Indebtedness.
No provision of this Article 11 shall prevent the occurrence of any
Default or Event of Default hereunder.
Section 11.2 Payment Over of Proceeds Upon Dissolution, Etc.
In the event of (a) any insolvency or bankruptcy case or proceeding, or
any receivership, liquidation, reorganization or other similar case or
proceeding in connection therewith, relative to the Company or to its creditors,
as such, or to its assets, or (b) any liquidation, dissolution or other
winding-up of the Company, whether voluntary or involuntary and whether or not
involving insolvency or bankruptcy, or (c) any assignment for the benefit of
creditors or any other marshalling of assets and liabilities of the Company,
then and in any such event the holders of Senior Indebtedness shall be entitled
to receive payment in full of all amounts due or to become due on or with
respect to all Senior Indebtedness, or provision shall be made for such payment
in money or money's worth, before the Holders are entitled to receive any
payment on account of Principal or repurchase price, if any, of or interest on
the Notes, and to that end the holders of Senior Indebtedness shall be entitled
to receive, for application to the payment thereof, any payment or distribution
of any kind or character, whether in cash, property or securities, which may be
payable or deliverable with respect to the Notes in any such case, proceeding,
liquidation, dissolution or other winding up or event.
In the event that, notwithstanding the foregoing provisions of this
Section 11.2, the Trustee or any Holder shall have received any payment or
distribution of assets of the Company of any kind or character, whether in
cash, property or securities, before all Senior Indebtedness is paid in full or
payment thereof provided for, and if such fact shall, at or prior to the time
of such payment or distribution, have been made known to the Trustee or, as the
case may be, such Holder, then and in such event such payment or distribution
shall be paid over or delivered forthwith to the trustee in bankruptcy,
receiver, liquidating trustee, custodian, assignee, agent or other Person
making payment or distribution of assets of the Company for application to the
payment of all Senior Indebtedness remaining unpaid, to the extent necessary to
pay all Senior Indebtedness in full, after giving effect to any concurrent
payment or distribution to or for the holders of Senior Indebtedness.
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The consolidation of the Company with, or the merger of the Company
into, another Person or the liquidation or dissolution of the Company following
the conveyance or transfer of its properties and assets substantially as an
entirety to another Person upon the terms and conditions set forth in Article 5
shall not be deemed a dissolution, winding-up, liquidation, reorganization,
assignment for the benefit of creditors or marshalling of assets and
liabilities of the Company for the purposes of this Section 11.2 if the Person
formed by such consolidation or into which the Company is merged or the Person
which acquires by conveyance or transfer such properties and assets
substantially as an entirety, as the case may be, shall, as a part of such
consolidation, merger, conveyance or transfer, comply with the conditions set
forth in Article 5.
Section 11.3 Prior Payment to Senior Indebtedness Upon Acceleration of
Notes.
In the event that any Notes are declared due and payable before their
stated maturity, then and in such event the holders of Senior Indebtedness
outstanding at the time such Notes so become due and payable shall be entitled
to receive payment in full of all amounts due or to become due on or with
respect to such Senior Indebtedness, or provision shall be made for such payment
in money or money's worth, before the Holders are entitled to receive any
payment by the Company on account of the Principal or repurchase price, if any,
of or interest on the Notes or on account of the purchase or other
acquisition of Notes.
In the event that, notwithstanding the foregoing, the Company shall
make any payment to the Trustee or to any Holder prohibited by the foregoing
provision of this Section 11.3, and if such fact shall, at or prior to the time
of such payment, have been made known to the Trustee by written notice or, as
the case may be such Holder, then and in such event such payment shall be paid
over and delivered forthwith to the Company.
The provisions of this Section 11.3 shall not apply to any payment
with respect to which Section 11.2 would be applicable.
Section 11.4 No Payment When Senior Indebtedness in Default.
(a) In the event and during the continuation of any default in
the payment of principal of or interest on any Senior Indebtedness beyond any
applicable grace period with respect thereto, or in the event that any event of
default with respect to any Senior Indebtedness shall have occurred and be
continuing permitting the holders of such Senior Indebtedness (or a trustee on
behalf of the holders thereof) to declare such Senior indebtedness due and
payable prior to the date on which it would otherwise have become due and
payable, unless and until such event of default shall have been cured or waived
or shall have ceased to exist or the Company and the Trustee shall have
received written notice from the Representative of the Senior Indebtedness with
respect to which such event of default relates approving payment on the Notes,
then no payment shall be made by the Company with respect to the Principal or
repurchase price, if any, or interest on the Notes or to acquire any of the
Notes; provided that no such default will prevent any payment on, or with
respect to, the Notes for more than 120 days unless the maturity of such Senior
Indebtedness has been accelerated. Not more than one such 120 day delay may be
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<PAGE> 52
made in any consecutive 360 day period, irrespective of the number of defaults
with respect to Senior Indebtedness during such period.
In the event that, notwithstanding the foregoing, the Company shall
make any payment to the Trustee or to any Holder prohibited by the foregoing
provision of this Section 11.4, and if such fact shall, at or prior to the time
of such payment, have been made known to the Trustee by written notice or, as
the case may be such Holder, then and in such event such payment shall be paid
over and delivered forthwith to the Company.
The provisions of this Section 11.4 shall not apply to any payment
with respect to which Section 11.2 would be applicable.
Section 11.5 Payment Permitted If No Default.
Nothing contained in this Article 11 or elsewhere in this Indenture or
in any of the Notes shall prevent (a) the Company, at any time except during the
pendency of any case, proceeding, dissolution, liquidation or other winding-up,
assignment for the benefit of creditors or other marshalling of assets and
liabilities of the Company referred to in Section 11.2 or under the conditions
described in Section 11.3 or 11.4, from making payments at any time of Principal
or repurchase price, if any, of or interest on the Notes or (b) the application
by the Trustee of any money deposited with it hereunder to the payment of or on
account of the Principal or repurchase price, if any, of or interest on the
Notes or the retention of any such payment by the Holders, if, at the time of
the application by the Trustee, it did not have knowledge that such payment
would have been prohibited by the provisions of this Article 11.
Section 11.6 Subrogation to Rights of Holders of Senior Indebtedness.
Subject to the payment in full of all Senior Indebtedness, the Holders
shall be subrogated to the extent of the payments or distributions made to the
holders of such Senior Indebtedness pursuant to the provisions of this Article
11 (equally and ratably with the holders of all indebtedness of the Company
which is not Senior Indebtedness and which is entitled to like rights of
subrogation) to the rights of the holders of such Senior Indebtedness to receive
payments and distributions of cash, property and securities applicable to the
Senior Indebtedness until the Principal or repurchase price, if any, of and
interest on the Notes shall be paid in full. For purposes of such subrogation,
no payments or distributions to the holders of Senior Indebtedness of any cash,
property or securities to which the Holders or the Trustee would be entitled
except for the provisions of this Article, and no payments over pursuant to the
provisions of this Article to the holders of Senior Indebtedness by Holders or
the Trustee, shall, as among the Company, its creditors other than holders of
Senior Indebtedness and the Holders be deemed to be a payment or distribution by
the Company to or on account of Senior Indebtedness.
Section 11.7 Provisions Solely to Define Relative Rights.
The provisions of this Article 11 are and are intended solely for the
purpose of defining the relative rights of the Holders on the one hand and the
holders of Senior Indebtedness on the
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other hand. Nothing contained in this Article 11 or elsewhere in this Indenture
or in the Notes is intended to or shall: (a) impair, as among the Company, its
creditors other than holders of Senior Indebtedness and the Holders, the
obligation of the Company, which is absolute and unconditional (and which,
subject to the rights under this Article 11 of the holders of Senior
Indebtedness, is intended to rank equally with all other general obligations of
the Company), to pay to the Holders the Principal or repurchase price, if any,
of and interest on the Notes as and when the same shall become due and payable
in accordance with their terms; or (b) affect the relative rights against the
Company of the Holders and creditors of the Company other than the holders of
Senior Indebtedness; or (c) prevent the Trustee or any Holder from exercising
all remedies otherwise permitted by applicable law upon default under this
Indenture, subject to the rights, if any, under this Article 11 of the holders
of Senior Indebtedness to receive cash, property and securities otherwise
payable or deliverable to the Trustee or such Holder.
Section 11.8 Trustee to Effectuate Subordination.
Each holder of a Note by his acceptance thereof authorizes and directs
the Trustee on his behalf to take such action as may be necessary or
appropriate to effectuate the subordination provided in this Article 11 and
appoints the Trustee his attorney-in-fact for any and all such purposes.
Section 11.9 No Waiver of Subordination Provisions.
No right of any present or future holder of any Senior Indebtedness to
enforce subordination as herein provided shall at any time in any way be
prejudiced or impaired by any act or failure to act by the Company or by any
act or failure to act, in good faith, by any such holder, or by any
non-compliance by the Company with the terms, provisions and covenants of this
Indenture, regardless of any knowledge thereof any such holder may have or be
otherwise charged with.
Without in any way limiting the generality of the foregoing paragraph,
the holders of Senior Indebtedness may, at any time and from time to time,
without the consent of or notice to the Trustee or the Holders, without
incurring responsibility to the Holders and without impairing or releasing the
subordination provided in this Article 11 or the obligations hereunder of the
Holders to the holders of Senior Indebtedness, do any one or more of the
following: (i) change the manner, place or terms of payment or extend the time
of payment of, or renew or alter, Senior Indebtedness, or otherwise amend or
supplement in any manner Senior Indebtedness or any instrument evidencing the
same or any agreement under which Senior Indebtedness is outstanding; (ii)
sell, exchange, release or otherwise deal with any property pledged, mortgaged
or otherwise securing Senior Indebtedness; (iii) release any Person liable in
any manner for the collection of Senior Indebtedness; and (iv) exercise or
refrain from exercising any rights against the Company and any other Person.
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Section 11.10 Notice to Trustee.
The Company shall give prompt written notice to the Trustee of any
fact known to the Company which would prohibit the making of any payment to or
by the Trustee with respect to the Notes. Notwithstanding the provisions of
this Article 11 or any other provision of this Indenture, the Trustee shall not
be charged with knowledge of the existence of any facts which would prohibit
the making of any payment to or by the Trustee with respect to the Notes,
unless and until the Trustee shall have received written notice thereof from
the Company or a holder of Senior Indebtedness or from any Representative
therefor, and, prior to the receipt of any such written notice, the Trustee,
subject to the provisions of Section 7.1, shall be entitled in all respects to
assume that no such facts exist; provided, however, that if the Trustee shall
not have received the notice provided for in this Section 11.10 at least 10
Business Days prior to the date upon which by the terms hereof any money may
become payable for any purpose (including, without limitation, the payment of
the principal of (and premium, if any) or interest on any Note), then,
notwithstanding anything herein contained to the contrary, the Trustee shall
have full power and authority to receive such money and to apply the same to
the purpose for which such money was received and shall not be affected by any
notice to the contrary which may be received by it during or after such 10
Business Day period.
Subject to the provisions of Section 7.1, the Trustee shall be
entitled to rely on the delivery to it of a written notice by a Person
representing himself to be a holder of Senior Indebtedness (or a Representative
therefor) to establish that such notice has been given by a holder of Senior
Indebtedness (or a Representative therefor). In the event that the Trustee
determines in good faith that further evidence is required with respect to the
right of any Person as a holder of Senior Indebtedness to participate in any
payment or distribution pursuant to this Article 11, the Trustee may request
such Person to furnish evidence to the reasonable satisfaction of the Trustee
as to the amount of Senior Indebtedness held by such Person, the extent to
which such Person is entitled to participate in such payment or distribution
and any other facts pertinent to the rights of such Person under this Article
11, and if such evidence is not furnished, the Trustee may defer any payment to
such Person pending judicial determination as to the right of such Person to
receive such payment.
Section 11.11 Reliance on Judicial Order or Certificate of Liquidating
Agent.
Upon any payment or distribution of assets of the Company referred to
in this Article 11, the Trustee, subject to the provisions of Section 7.1, and
the Holders shall be entitled to rely upon any order or decree entered by any
court of competent jurisdiction in which such insolvency, bankruptcy,
receivership, liquidation, reorganization, dissolution, winding-up or similar
case or proceeding is pending, or a certificate of the trustee in bankruptcy,
receiver, liquidating trustee, custodian, assignee for the benefit of
creditors, agent or other Person making such payment or distribution, delivered
to the Trustee or to the Holders, for the purpose of ascertaining the Persons
entitled to participate in such payment or 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 11.
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<PAGE> 55
Section 11.12 Trustee Not Fiduciary for Holders of Senior Indebtedness.
The Trustee shall not be deemed to owe any fiduciary duty to, or be
subject to any implied covenants or obligations in favor of, the holders of
Senior Indebtedness and shall not be liable to any such holders if it shall in
good faith mistakenly pay over or distribute to Holders or to the Company or to
any other Person cash, property or securities to which any holders of Senior
Indebtedness shall be entitled by virtue of this Article 11 or otherwise.
Section 11.13 Rights of Trustee as Holder of Senior Indebtedness;
Preservation of Trustee's Rights.
The Trustee in its individual capacity shall be entitled to all the
rights set forth in this Article 11 with respect to any Senior Indebtedness
which may at any time be held by it, to the same extent as any other holder of
Senior Indebtedness, and nothing in this Indenture shall deprive the Trustee of
any of its rights as such holder.
Nothing in this Article 11 shall subordinate to Senior Indebtedness
the claims of, or payments to, the Trustee under or pursuant to Section 7.7.
Section 11.14 Article Applicable to Paying Agents.
In case at any time any Paying Agent other than the Trustee shall have
been appointed by the Company and be then acting hereunder, the term "Trustee"
as used in this Article 11 shall in such case (unless the context otherwise
requires) be construed as extending to and including such Paying Agent within
its meaning as fully for all intents and purposes as if such Paying Agent were
named in this Article 11 in addition to or in place of the Trustee; provided,
however, that Section 11.13 shall not apply to the Company or any Affiliate of
the Company if it or such Affiliate acts as Paying Agent.
Section 11.15 Certain Conversions Deemed Payment.
For the purposes of this Article 11 only, (a) the issuance and delivery
of Junior Securities upon conversion of Notes in accordance with Article 10
shall not be deemed to constitute a payment or distribution on account of the
Principal or repurchase price, if any, of or interest on Notes or on account of
the purchase or other acquisition of Notes and (b) the payment, issuance or
delivery of cash, property or securities (other than Junior Securities) upon
conversion of a Note shall be deemed to constitute payment on account of the
Principal of such Note. Nothing contained in this Article 11 or elsewhere in
this Indenture or in the Notes 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 a Holder to convert
any Note in accordance with Article 10.
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<PAGE> 56
ARTICLE 12.
MEETINGS OF HOLDERS
Section 12.1 Action by Holders.
Whenever in this Indenture it is provided that the Holders of a
specified percentage in aggregate principal amount of the Notes 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 Holders in person or by proxy
appointed in writing or (b) by the record of the Holders voting in favor
thereof at any meeting of Holders called and held in accordance with the
provisions of this Article 12. Whenever the Company or the Trustee solicits
the taking of action by the Holders, 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. If a record date is fixed, those and only those
Persons who are Holders at the record date so fixed, or their proxies, shall be
entitled to take such action regardless of whether they are Holders at the time
of such action.
Section 12.2 Purposes for Which Meetings May Be Called.
A meeting of Holders may be called at any time and from time to time
pursuant to the provisions of this Article 12 for any of the following
purposes:
(a) to give any notice to the Company, or the Trustee, or
to give any directions to the Trustee, or to waive or to consent to
the waiving of any Default hereunder and its consequences, or to take
any other action authorized to be taken by Holders pursuant to any of
the provisions of Article 6;
(b) to remove the Trustee or to appoint a successor
Trustee pursuant to the provisions of Article 7;
(c) to consent to the execution of an indenture or
indentures supplemental hereto pursuant to Section 9.2; or
(d) to take any other action (i) authorized to be taken by
or on behalf of the Holders of any specified aggregate principal
amount of the Notes under any other provision of this Indenture, or
authorized or permitted by law or (ii) which the Trustee deems
necessary or appropriate in connection with the administration of this
Indenture.
Section 12.3 Manner of Calling Meetings.
The Trustee may at any time call a meeting of Holders to take any
action specified in Section 12.2, to be held at such time and at such place in
the City of New York, New York or
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<PAGE> 57
such other place as the Trustee shall determine. Notice of every meeting of
Holders, setting forth the time and place of such meeting and in general terms
the action proposed to be taken at such meeting, shall be given by the Trustee,
to the Company and to each Holder not less than 10 nor more than 60 days prior
to the date fixed for such meeting.
Any meeting of Holders shall be valid without notice if the Holders of
all Notes then outstanding are present in person or by proxy, or if notice is
waived before or after the meeting by all of the Holders and if the Company and
the Trustee are either present by duly authorized representatives or have,
before or after the meeting, waived notice.
Section 12.4 Call of Meetings by the Company or Holders.
In case at any time the Company or the Holders of not less than 10% in
aggregate principal amount of the Notes then outstanding, shall have requested
the Trustee to call a meeting of Holders to take any action specified in
Section 12.2, by written request setting forth in reasonable detail the action
proposed to be taken at the meeting, and the Trustee shall not have given the
notice of such meeting within 20 days after receipt of such request, then the
Company or the Holders of Notes in the amount above specified may determine the
time and place in the City of New York, New York for such meeting and may call
such meeting for the purpose of taking such action, by giving or causing to be
given notice thereof as provided in Section 12.3.
Section 12.5 Who May Attend and Vote at Meetings.
To be entitled to vote at any meeting of Holders, a person shall be
(a) a Holder on the record date for such meeting or, if there is no such record
date, on the date of such meeting or (b) a Person appointed by an instrument in
writing as proxy for one or more of such Holders. The only Persons who shall
be entitled to be present or to speak at any meeting of Holders shall be the
Persons entitled to vote at such meeting and their counsel and any
representatives of the Trustee and its counsel and any representatives of the
Company and its counsel.
Section 12.6 Regulations May be Made by Trustee; Conduct of the Meeting;
Voting Rights; Adjournment.
Notwithstanding any other provision of this Indenture, the Trustee may
make such reasonable regulations as it may deem advisable for any meeting of
Holders, in regard to proof of the holding of Notes and of the appointment of
proxies, and in regard to the appointment and duties of inspectors of votes,
the submission and examination of proxies, certificates and other evidence of
the right to vote, and such other matters concerning the conduct of the meeting
as it shall deem appropriate.
The Trustee shall, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called by the
Company or by Holders as provided in Section 12.4, in which case the Company or
the Holders calling the meeting, as the case may be, shall in like manner
appoint a temporary chairman. A permanent chairman and a permanent
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secretary of the meeting shall be elected by vote of the Holders of a majority
in principal amount of the Notes represented at the meeting and entitled to
vote.
At any meeting each Holder or proxy shall be entitled to one vote for
each $1,000 principal amount of Notes held or represented by such Holder or
proxy, as the case may be; provided, however, that no vote shall be cast or
counted at any meeting with respect to any Notes challenged as not outstanding
and ruled by the chairman of the meeting to be not outstanding. The chairman
of the meeting shall have no right to vote other than by virtue of Notes held
by such chairman or instruments in writing as aforesaid duly designating such
chairman as the proxy to vote on behalf of other Holders. At any meeting of
Holders, the presence (in person or by proxy) of Persons holding or
representing a majority in aggregate principal amount of the Notes then
outstanding shall be sufficient for a quorum. Any meeting of Holders duly
called pursuant to the provisions of Section 12.3 or 12.4 may be adjourned from
time to time by vote of the Holders of a majority in aggregate principal amount
of the Notes represented at the meeting and entitled to vote, and the meeting
may be held as so adjourned without further notice.
Section 12.7 Voting at the Meeting and Record to be Kept.
The vote upon any resolution submitted to any meeting of Holders shall
be by written ballots on which shall be subscribed the signatures of the
Holders or of their representatives by proxy and the principal amount of the
Notes voted by the ballot. The permanent chairman of the meeting shall appoint
two inspectors of votes, who shall count all votes cast at the meeting for or
against any resolution and who shall make and file with the secretary of the
meeting their verified written reports in duplicate of all votes cast at the
meeting. A record in duplicate of the proceedings of each meeting of Holders
shall be prepared by the secretary of the meeting and there shall be attached
to such 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
such notice was given as provided in Section 12.3 or 12.4. The record shall be
signed and verified by the affidavits of the permanent chairman and the
secretary of the meeting and one of the duplicates shall be delivered to the
Company and the other to the Trustee to be preserved by the Trustee, the latter
to have attached thereto the ballots voted at the meeting.
Any record so signed and verified shall be conclusive evidence of the
matters therein stated.
Section 12.8 Exercise of Rights of Trustee or Holders May Not Be
Hindered or Delayed by Call of Meeting.
Nothing contained in this Article 12 shall be deemed or construed to
authorize or permit, by reason of any call of a meeting of Holders or any
rights expressly or impliedly conferred hereunder to make such call, any
hindrance or delay in the exercise of any right or rights conferred upon or
reserved to the Trustee or to the Holders under any of the provisions of this
Indenture or of the Notes.
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Section 12.9 Communication by Holders with Other Holders.
Holders may communicate pursuant to TIA Section 312(b) with other
Holders with respect to their rights under this Indenture or the Notes. The
Company, the Trustee, the Registrar and anyone else shall have the protection
of TIA Section 312(c).
ARTICLE 13.
MISCELLANEOUS
Section 13.1 Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies or conflicts with
another provision which is required or deemed to be included in this Indenture
by the TIA, the required or deemed provision shall control.
Section 13.2 Notices.
Any notice or communication by the Company or the Trustee to the other
shall be deemed to have been duly given if given in writing and delivered in
person or mailed by first-class mail (registered or certified, return receipt
requested), telecopier or overnight air courier guaranteeing next day delivery
addressed as follows:
if to the Company:
Pier 1 Imports, Inc.
301 Commerce Street, Suite 600
Fort Worth, Texas 76102
Fax No.: (817) 334-0191
Attention: General Counsel
if to the Trustee:
Wells Fargo Bank (Texas), N.A.
1000 Louisiana Street, 7th Floor
Houston, Texas 77002
Fax. No.: (713) 250-7929
Attention: Corporate Trust Dept.-Christina Faith
The Company or the Trustee by notice to the other may designate additional or
different addresses for subsequent notices or communications.
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All notices and communications (other than those sent to Holders)
shall be deemed to have been duly given: at the time delivered by hand, if
personally delivered; five Business Days after being deposited in the mail,
postage prepaid, if mailed; when receipt acknowledged, if telecopied; and the
next Business Day after timely delivery to the courier, if sent by overnight
air courier guaranteeing next day delivery.
Any notice or communication to a Holder shall be in writing and shall
be mailed by first class mail, certified or registered, return receipt
requested, or by overnight air courier guaranteeing next day delivery to its
last address shown on the Register. Any notice or communication shall also be
so mailed to any Person described in TIA Section 313(c), to the extent required
by the TIA. Failure to mail a notice or communication to a Holder or any
defect in it shall not affect its sufficiency with respect to other Holders.
If a notice or communication is given in the manner provided above
within the time prescribed, it shall be deemed to have been duly given, whether
or not received by the addressee.
If the Company mails a notice or communication to Holders, it shall
mail a copy to the Trustee and each Agent at the same time.
Section 13.3 Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to take
any action under this Indenture, the Company shall furnish to the Trustee:
(a) an Officers' Certificate stating that, in the opinion
of the signers, all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with; and
(b) at the Trustee's request, an Opinion of Counsel
stating that, in the opinion of such counsel, all such conditions
precedent have been complied with.
Section 13.4 Statements Required in Certificate or Opinion of Counsel.
Each Officers' Certificate or Opinion of Counsel with respect to
compliance with a condition or covenant in this Indenture shall include:
(a) a statement that each Person executing such Officers'
Certificate or Opinion of Counsel has read such covenant or condition;
(b) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such Officers' Certificate or Opinion of Counsel are
based;
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<PAGE> 61
(c) a statement that, in the opinion of each such Person,
such examination or investigation has been made as is necessary to
enable it to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(d) a statement as to whether or not, in the opinion of
such Person, such condition or covenant has been complied with;
provided, however, that an Opinion of Counsel may be based, insofar as
it relates to factual matters, on a certificate or certificates of
public officials, a legal opinion of counsel employed by the Company
or a Subsidiary or a certificate of or representations by an Officer
or Officers unless counsel rendering such Opinion of Counsel actually
knows that such certificate, legal opinion or representation is
erroneous.
Section 13.5 Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by or at a meeting of
Holders. The Registrar, Paying Agent or Conversion Agent may make reasonable
rules and set reasonable requirements for its functions.
Section 13.6 Legal Holidays.
If a payment date is not a Business Day at a place of payment, payment
may be made at such place of payment on the next succeeding Business Day, and
no additional interest shall accrue for the intervening period.
Section 13.7 No Recourse Against Others.
A director, officer, employee or stockholder, as such, of the Company
shall not have any liability for any obligations of the Company under the Notes
or this Indenture or for any claim based on, with respect to or by reason of
such obligations or their creation including with respect to any certificate
delivered thereunder or hereunder. Each Holder by accepting a Note waives and
releases all such liability. The waiver and release contained in this Section
13.7 are part of the consideration for the Company's issuance of the Notes.
Section 13.8 Counterparts.
This Indenture may be executed in any number of counterparts and by
the parties hereto in separate counterparts, each of which when so executed
shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.
Section 13.9 Governing Law.
THE INTERNAL LAWS OF THE STATE OF NEW YORK SHALL GOVERN THIS INDENTURE
AND THE NOTES, WITHOUT REGARD TO THE CONFLICT OF LAWS PROVISIONS THEREOF.
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Section 13.10 No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture, loan or
debt agreement of the Company or a Subsidiary. Any such indenture, loan or
debt agreement may not be used to interpret this Indenture.
Section 13.11 Successors.
All agreements of the Company in this Indenture and the Notes shall
bind its successors. All agreements of the Trustee in this Indenture shall
bind its successors.
Section 13.12 Severability.
In case any provision of this Indenture or in the Notes shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
Section 13.13 Table of Contents, Headings, Etc.
The Table of Contents and headings of the Articles and Sections 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.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be executed as of the day and year first above written.
PIER 1 IMPORTS, INC.
By:
--------------------------------
Name:
Title:
Attest:
- ----------------------------------
Name:
WELLS FARGO BANK (TEXAS), N.A.
By:
----------------------------------
Name: Christina Faith
Title: Assistant Vice President
Attest:
- ----------------------------------
Name:
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<PAGE> 64
EXHIBIT A
[Face of Note]
PIER 1 IMPORTS, INC.
5 3/4% CONVERTIBLE SUBORDINATED NOTE DUE 2003
CUSIP No. 720279 AF 5
No._________ $_____________
PIER 1 IMPORTS, INC. promises to pay to ______________________________
_______________________________________________________________________________
or registered assigns, the principal sum of ___________________________________
__________________________________ Dollars on October 1, 2003.
Interest Payment Dates: April 1 and October 1, commencing April 1,
1997.
Record Dates: March 15 and September 15.
Reference is made to the further provisions of this Note set forth on
the reverse hereof, which further provisions shall for all purposes have the
same effect as if set forth at this place.
Dated: ________________________ PIER 1 IMPORTS, INC.
By:_____________________________________
Officer of the Company
(SEAL)
Attest:________________________________
By:____________________________________
Secretary
Authentication:
This is one of the Notes referred to
in the within-mentioned Indenture:
Wells Fargo Bank (Texas), N.A.,
as Trustee
By:__________________________________
Authorized Signature
Dated:_______________________________
A-1
<PAGE> 65
[Reverse Side]
Capitalized terms used herein without definition shall have the
meanings ascribed to them in the Indenture dated as of September 18, 1996
between Pier 1 Imports, Inc., a Delaware corporation, and Wells Fargo Bank
(Texas), N.A., as trustee, as amended from time to time in accordance with its
terms (the "Indenture").
1. Interest.
(a) The Company shall pay interest on the outstanding
principal amount of this Note at the rate of 5-3/4% per annum from the date of
original issuance of any Notes under the Indenture until maturity. The
Company will pay interest semi-annually on April 1 and October 1 of each year
commencing April 1, 1997, or if any such day is not a Business Day, on the next
succeeding Business Day. Interest on the Notes will accrue from the most recent
date on which interest has been paid or, if no interest has been paid, from the
date of original issuance of any Notes under the Indenture; provided,
however, that if there is no existing Default in the payment of interest and
this Note is authenticated between a record date shown on the face hereof and
the next succeeding Interest Payment Date, interest shall accrue from such next
succeeding Interest Payment Date. Interest will be computed on the basis of a
360-day year of twelve 30-day months.
(b) To the extent lawful, the Company shall pay interest
(including post-petition interest in any proceeding under any Bankruptcy Law)
on (i) overdue Principal or repurchase price, if any, of the Notes at the rate
borne by the Notes and (ii) overdue installments of interest on the Notes at
the rate borne by the Notes.
2. Method of Payment. The Company will pay interest (except
defaulted interest) on the Notes to Holders at the close of business on the
record date shown on the face hereof next preceding the applicable Interest
Payment Date (even if such Notes are cancelled after such record date and on or
before such Interest Payment Date), except as provided in Section 10.2 of the
Indenture. Defaulted interest shall be paid to Holders as of a special record
date established for purposes of determining the Holders entitled thereto. The
Notes will be payable as to Principal, repurchase price and interest at the
office or agency of the Company maintained for such purpose within or without
the City and State of New York, as set forth in the Indenture, or, at the option
of the Company, payment of interest may be made by check mailed to the Holders
at their addresses set forth in the Register. Such payment shall be in the
currency of the United States of America which at the time of payment is legal
tender for payment of public and private debts.
3. Paying Agent, Registrar and Conversion Agent. Initially,
the Trustee will act as Paying Agent, Registrar and Conversion Agent. The
Company may change any Paying Agent, Registrar or Conversion Agent without
notice to any Holder. The Company or any Subsidiary may act in any such
capacity.
4. Indenture. The Company issued the Notes under the
Indenture. The terms of the Notes include those stated in the Indenture and
those made part of the Indenture by reference to the Trust Indenture Act of
1939. The Notes are subject to all such terms, and Holders are referred to the
Indenture and the Trust Indenture Act of 1939 for a statement of such terms.
The Notes are general unsecured obligations of the Company limited to
$86,250,000 in aggregate principal amount, subject to Section 2.7 of the
Indenture.
5. Optional Redemption by the Company. The Notes are not
subject to redemption at the option of the Company prior to October 1, 1999.
Thereafter, the Notes will be redeemable at any time prior to maturity at the
option of the Company, in whole or in part from time to time, upon not less
than 30 days' nor more than 60 days' prior notice to the Holders at the
redemption prices (expressed as percentages of principal amount) set forth
below:
A-2
<PAGE> 66
<TABLE>
<CAPTION>
After October 1, Percentage
---------------- ----------
<S> <C>
1999 103%
2000 102%
2001 101%
2002 100%
</TABLE>
in each case together with accrued but unpaid interest, if any, up to but not
including the redemption date.
6. Mandatory Redemption. Except as set forth in paragraph 7
below, the Company shall not be required to make mandatory redemptions with
respect to the Notes.
7. Repurchase at the Option of Holder. Upon a Change of
Control, the Company shall offer to repurchase all then outstanding Notes at a
repurchase price equal to 100% of the principal amount thereof, plus accrued
and unpaid interest to the Change of Control Payment Date, if any. Within 30
days after a Change of Control, the Company shall mail a notice to each Holder
setting forth the procedures governing the Change of Control Offer as required
by the Indenture. A Holder may tender or refrain from tendering all or any
portion of such Holder's Notes, at such Holder's discretion, by completing and
signing the form entitled "Option of Holder to Elect Repurchase" below and
delivering such form, together with the Notes with respect to which the
repurchase right is being exercised, duly endorsed for transfer to the Company,
to the Paying Agent. Any partial tender of Notes must be made in an integral
multiple of $1,000.
8. Conversion. To convert a Note, the Holder thereof must (i)
complete and sign the "Form of Election to Convert" below (unless such Holder
is DTC, in which case the customary procedures of DTC will apply), (ii)
surrender such Note to the Conversion Agent, (iii) furnish appropriate
endorsements and transfer documents if required by the Registrar or the
Conversion Agent, (iv) pay any transfer or similar tax if required by Section
10.6 of the Indenture and (v) make the payment described in the next sentence.
If this Note (even if this Note has been called for redemption or a Change of
Control Offer has been made) is converted after a regular interest payment
record date and prior to the related Interest Payment Date, the full interest
installment on this Note scheduled to be paid on such Interest Payment Date
shall be payable on such Interest Payment Date to the Holder of this Note at
the close of business on such record date; provided, however, that if such
record date is on or after March 15, 2000, this Note must be accompanied by a
payment equal to the interest on this Note (or portion thereof converted)
payable by the Company on such Interest Payment Date, which payment will be
returned to such Holder if the Company defaults in the payment of such
interest, all as provided in Section 10.2 of the Indenture. No fractional
shares of Common Stock will be issued upon conversion, but an adjustment in
cash will be made, as provided in the Indenture, with respect to any fractional
share which would otherwise be issuable upon conversion. A Holder is not
entitled to any rights of a holder of Common Stock until such Holder has
converted its Notes into Common Stock as provided in the Indenture.
9. Subordination. The Notes are subordinated to Senior
Indebtedness. To the extent provided in the Indenture, Senior Indebtedness
must be paid before the Notes may be paid. The Company agrees, and each Holder
by accepting a Note agrees, to the subordination provisions contained in the
Indenture and authorizes the Trustee to give effect to such provisions, and
each Holder appoints the Trustee its attorney-in-fact for any and all such
purposes.
10. Denominations, Transfer, Exchange. The Notes are in
registered form without coupons in denominations of $1,000 and integral
multiples of $1,000. A Holder may transfer or exchange Notes as provided in
the Indenture. The Registrar may require a Holder, among other things, to
furnish appropriate endorsements and transfer documents and to pay any taxes
and fees required by law or permitted by the Indenture. The Registrar need not
register the exchange or transfer of any Notes (or portion thereof) during the
15 day period (or shorter) preceding the mailing of a notice of redemption or
any Notes (or portion thereof) with respect to which a repurchase
A-3
<PAGE> 67
election has been tendered and not withdrawn by the Holder thereof in accordance
with Section 4.6 of the Indenture.
11. Persons Deemed Owners. The registered Holder of a Note
may be treated as its owner for all purposes.
12. Amendments and Waivers. Subject to certain exceptions, the
Indenture or the Notes may be amended with the consent of the Holders of at
least a majority in aggregate principal amount of the Notes then outstanding
and any existing Default (except a payment default) may be waived with the
consent of the Holders of at least a majority in aggregate principal amount of
the Notes then outstanding. Without the consent of any Holder, the Company and
the Trustee may amend or supplement the Indenture or the Notes to (i) cure any
ambiguity, defect or inconsistency, provided that such amendment does not in
the opinion of the Trustee adversely affect the rights of any Holder, (ii)
provide for uncertificated Notes in addition to or in lieu of certificated
Notes, (iii) comply with Sections 5.1 and 10.5 of the Indenture, (iv) make any
change that does not adversely affect the rights of any Holder, (v) comply with
requirements of the SEC in order to effect or maintain the qualification of the
Indenture under the TIA, (vi) add to the covenants of the Company and (vii)
change the place of payment of Principal or redemption or repurchase price, if
any, of or interest on the Notes (subject to certain limitations set forth in
the Indenture).
13. Defaults and Remedies. Events of Default include: (a)
failure to pay any Principal or repurchase price, if any, of any Note when due
and payable, whether at maturity, upon redemption, upon a Change of Control
Offer or otherwise, whether or not such payment is prohibited by the
subordination provisions of the Indenture; (b) failure to pay any interest on
any Note when due and payable, which failure continues for 30 days, whether or
not such payment is prohibited by the subordination provisions of the Indenture;
(c) failure to perform the other covenants of the Company in the Indenture,
which failure continues for 90 days after written notice as provided in the
Indenture; (d) default in payment when due of Principal of, or acceleration of,
any indebtedness for money borrowed by the Company or any Subsidiary in excess
of $10,000,000, individually or in the aggregate, if such indebtedness is not
discharged, or such acceleration is not annulled, within 10 days after written
notice as provided in the Indenture; and (e) certain events of bankruptcy,
insolvency or reorganization of the Company or any Significant Subsidiary. If
an Event of Default shall occur and be continuing, the Trustee or the Holders of
at least 25% in aggregate principal amount of the then outstanding Notes may
accelerate the maturity of all Notes, except that in the case of an Event of
Default arising from certain events of bankruptcy or insolvency, all outstanding
Notes shall immediately so accelerate. The Trustee may require indemnity
satisfactory to it before it enforces the Indenture or the Notes at the request
or direction of any of the Holders. Subject to certain limitations, the Holders
of a majority in aggregate principal amount of the outstanding Notes will 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. The Company must furnish an annual compliance certificate to
the Trustee.
14. Trustee Dealings with Company. The Trustee, in its
individual or any other capacity, may make loans to, accept deposits from and
perform services for the Company or its Affiliates, and may otherwise deal with
the Company or its Affiliates, as if were not Trustee; provided, however, that
if the Trustee acquires any conflicting interest as described in the Trust
Indenture Act of 1939, it must eliminate such conflict or resign.
15. No Recourse Against Others. A director, officer, employee,
incorporator or stockholder of the Company, as such, shall not have any
liability for any obligations of the Company under the Notes or the Indenture
or for any claim based on, with respect to, or by reason of, such obligations
or their creation. Each Holder by accepting a Note waives and releases all
such liability. The waiver and release contained in Article 13 of the
Indenture are part of the consideration for the Company's issuance of the
Notes.
16. Authentication. This Note shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating
agent.
17. Abbreviations. Customary abbreviations may be used in the
name of a Holder or an assignee, such as: TEN COM (=tenants in common), TEN ENT
(=tenants by the entireties), JT TEN (=joint tenants with
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<PAGE> 68
right of survivorship and not as tenants in common), CUST (=Custodian), and
U/G/M/A (=Uniform Gifts to Minors Act).
The Company will furnish to any Holder upon written request and
without charge a copy of the Indenture. Requests may be made to:
Pier 1 Imports, Inc.
301 Commerce Street, Suite 600
Fort Worth, Texas 76102
Attn: General Counsel
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<PAGE> 69
FORM OF ELECTION TO CONVERT
I (we) hereby irrevocably exercise the option to convert this Note, or
the portion below designated, into shares of Common Stock in accordance with
the terms of the Indenture referred to in this Note, and direct that the shares
issuable and deliverable upon conversion, together with any check in payment
for fractional shares, be issued in the name of and delivered to the
undersigned registered Holder hereof, unless a different name has been
indicated below. If shares are to be issued in the name of a Person other than
the undersigned, the undersigned will pay all transfer taxes payable with
respect thereto.
Portion of this Note
to be converted (if partial
conversion, $1,000 or an
integral multiple thereof): $
-----------------
Signature:
------------------------------------
(exactly as your name appears on the
face of this Note)
Name:
-----------------------------------------
Title:
-----------------------------------------
Address:
--------------------------------------
Phone No.:
-----------------------------------
Date:
-----------------------------------------
If shares are to be issued and registered in the name of a Person other than
the undersigned, please print the name and address, including zip code, and
social security or other taxpayer identification number of such Person below.
Name:
------------------------------------------------
Address:
---------------------------------------------
TIN/Social Security No:
----------------------------
Signature Guaranteed (if Common Stock to be issued
to other than registered holders):
By:
--------------------------------------------------------
This signature shall be guaranteed by an eligible guarantor
institution (a bank or trust company having an office or
correspondent in the United States or a broker or
dealer which is a member of a registered securities
exchange or the National Association of Securities
Dealers, Inc.) with membership in an approved signature
guaranty medallion program pursuant to SEC Rule 17Ad-15.
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<PAGE> 70
ASSIGNMENT FORM
(I) or (we) assign and transfer this Note to
________________________________________________________________________________
(Insert assignee's social
security or tax I.D. no.)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint____________________________________________________agent
to transfer this Note on the Register. The agent may substitute another to act
for him.
Date:
---------------
Signature:
--------------------------------------
(exactly as your name appears on the
face of this Note)
Name:
-------------------------------------------
Title:
------------------------------------------
Address:
----------------------------------------
Phone No.:
--------------------------------------
Date:
-------------------------------------------
Signature Guaranteed:
By:
--------------------------------------------------------
This signature shall be guaranteed by an eligible guarantor
institution (a bank or trust company having an office or
correspondent in the United States or a broker or
dealer which is a member of a registered securities
exchange or the National Association of Securities
Dealers, Inc.) with membership in an approved signature
guaranty medallion program pursuant to SEC Rule 17Ad-15.
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<PAGE> 71
OPTION OF HOLDER TO ELECT REPURCHASE
To elect to have all or part or this Note repurchased by the Company
pursuant to Section 4.6 of the Indenture in connection with a Change of Control
Offer, state the amount you elect to have repurchased (if all, write "ALL"):
$ .
---------------
Your Name:
----------------------------------
(exactly as your name appears on
the face of this Note)
By:
-----------------------------------------
Title:
--------------------------------------
Date:
---------------------------------------
Signature Guaranteed:
By:
---------------------------------------------------------
This signature shall be guaranteed by an eligible guarantor
institution (a bank or trust company having an office or
correspondent in the United States or a broker or
dealer which is a member of a registered securities
exchange or the National Association of Securities
Dealers, Inc.) with membership in an approved signature
guaranty medallion program pursuant to SEC Rule 17Ad-15.
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