FORM 8-B
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Registration of Securities of Certain Successor Issuers
Filed Pursuant to Section 12(b) or (g) of
The Securities Exchange Act of 1934
SUNGLASS HUT INTERNATIONAL, INC.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
FLORIDA 65-0667471
----------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
255 ALHAMBRA CIRCLE
CORAL GABLES, FLORIDA 33134
- ------------------------------------ -------------------
(Address of principal executive offices) (Zip Code)
Securities to be registered pursuant to Section 12(b) of the Act:
TITLE OF EACH CLASS NAME OF EACH EXCHANGE ON WHICH
TO BE SO REGISTERED EACH CLASS IS TO BE REGISTERED
---------------------------- ----------------------------
Securities to be registered pursuant to Section 12(g) of the Act:
COMMON STOCK, PAR VALUE $.01 PER SHARE
- --------------------------------------------------------------------------------
(Title of class)
- --------------------------------------------------------------------------------
(Title of class)
- --------------------------------------------------------------------------------
(Title of class)
<PAGE>
ITEM 1. GENERAL INFORMATION.
(a) Sunglass Hut International, Inc., a Florida corporation (the
"Registrant"), was incorporated on May 20, 1996 under the laws of the
State of Florida.
(b) The Registrant's current fiscal year ends on February 1, 1997.
ITEM 2. TRANSACTION OF SUCCESSION.
(a) The Registrant's predecessor corporation, Sunglass Hut International,
Inc., a Delaware corporation ("Sunglass Hut Delaware"), had securities
registered pursuant to Section 12(g) of the Securities and Exchange
Act, as amended (the "Act") at the time of succession.
(b) Sunglass Hut Delaware changed its state of incorporation from Delaware
to Florida by merging (the "Merger") into the Registrant, a recently
formed wholly owned Florida subsidiary of Sunglass Hut Delaware.
Pursuant to the Merger, the Registrant changed its name to "Sunglass
Hut International, Inc." The effective date of the Merger was July 7,
1996 (the "Effective Date"), at which time, each share of Sunglass Hut
Delaware's issued and outstanding common stock $0.01 par value (the
"Old Common Stock") was converted into one share of fully paid and
nonassessable common stock, $0.01 par value, of the Registrant (the
"Common Stock").
ITEM 3. SECURITIES TO BE REGISTERED.
The Registrant has 100,000,000 shares of Common Stock, $0.01 par value,
authorized under its Articles of Incorporation. As of August 16, 1996,
54,176,716 shares of Common Stock were issued and outstanding.
ITEM 4. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED.
Incorporated by reference herein is the discussion of the Registrant's
Common Stock and related matters in the sections entitled "Outstanding Voting
Securities and Voting Rights," and "Proposal to Approve the Reincorporation of
the Company from Delaware to Florida" contained in Sunglass Hut Delaware's Proxy
Statement, filed with the Securities and Exchange Commission on May 2, 1996
relating to Sunglass Hut Delaware's 1996 Annual Meeting of Shareholders.
2
<PAGE>
ITEM 5. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements (not applicable)
(b) Exhibits
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION
------- -----------
<S> <C>
2 Agreement and Plan of Merger, dated June 4, 1996, between Sunglass
Hut International, Inc., a Delaware corporation, and the Registrant*
3.1 Registrant's Articles of Incorporation, and Articles of Merger filed on
July 1, 1996*
3.2 Registrant's Bylaws*
4.1 Specimen Stock Certificates for Registrant's Common Stock*
4.2 Registration Rights Agreement, dated as of May 31, 1993, among the
Registrant, the Investor Group and the Management Group (as such
terms are defined in the Agreement)
4.3 Registration Rights Agreement, dated as of December 30, 1993, between
the Registrant and Wallis D. Arnold and Karen Arnold (4.3)(5)
4.4 Registration Rights Agreement, dated June 29, 1995, between the
Registrant and the former shareholders of Sunsations Sunglass Company
(4.4)(4)
4.5 Registration Rights Agreement, dated November 30, 1995, between the
Registrant and the former shareholders of Sun Shades 501, Ltd. (2)
4.6 Registration Rights Agreement, dated April 25, 1996, between the
Registrant and the former shareholders of ShadyBiz, Inc. and
Spectacular Eyewear, Inc.(6)
4.7 Registration Rights Agreement, dated June 26, 1996, between the
Registrant and the initial purchasers of 5 1/4% Convertible Subordinated Notes due 2003*
4.8 Indenture, dated as of June 26, 1996, among the Registrant and The
Bank of New York for Convertible Subordinated Notes*
4.9 Specimen form of Convertible Subordinated Note*
10.1 Registrant's Amended and Restated Stock Option Plan, as amended (2)
10.2 Form of Indemnification Agreement between the Registrant and each
of its directors and certain executive officers (10.2)(1)
10.3 Office Space Lease Agreement, dated as of October 28, 1993, between
The Travelers Insurance Company and the Registrant (10.7)(3)
10.4 Registrant's Management Incentive Plan (2)
10.5 Amended and Restated Revolving Credit and Reimbursement Agreement,
dated as of December 14, 1995, among the Registrant, NationsBank, N.A. and
the other Lenders named therein (2)
10.6 Registrant 1996 Executive Incentive Compensation Plan(7)
21.1 Subsidiaries of the Registrant (2)
99.1 Proxy Statement for the 1996 Annual Meeting of Shareholders of
Sunglass Hut International, Inc., a Delaware corporation, held on June
4, 1996(7)
<FN>
- --------------------
3
<PAGE>
* Filed herewith.
(1) Incorporated by reference to the exhibit filed with the Registrant's Registration Statement on Form
S-1 (File No. 33-59872).
(2) Incorporated by reference to the exhibit filed with the Registrant's Annual Report on Form 10-K for
the fiscal year ended February 3, 1996.
(3) Incorporated by reference to the exhibit filed with the Registrant's Registration Statement on Form
S-1 (File No. 33--70214).
(4) Incorporated by reference to the exhibit filed with the Registrant's Registration Statement on Form
S-3 (File No. 33-97550).
(5) Incorporated by reference to the exhibit filed with the Registrant's Registration Statement on Form
S-1 (File No. 33-77792).
(6) Incorporated by reference to the exhibit filed with the Registrant's Registration Statement on Form
S-3 (File No. 33-05093).
(7) Incorporated by reference to the Registrant's proxy statement for the 1996 Annual Meeting of
Shareholders of Sunglass Hut Delaware held on June 4, 1996.
</FN>
</TABLE>
4
<PAGE>
SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the Registrant has duly caused this Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized.
SUNGLASS HUT INTERNATIONAL, INC.
Date: August 20, 1996 By: /s/ GEORGE L. PITA
------------------------------------
George L. Pita
Vice President - Finance
5
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIAL
EXHIBIT NUMBER DESCRIPTION PAGE NUMBER
-------------- ----------- -----------
<S> <C>
2 Agreement and Plan of Merger, dated
June 4, 1996, between Sunglass Hut
Delaware (Delaware corporation) and the
Registrant
3.1 Registrant's Articles of Incorporation, and
Articles of Merger, filed on July 1, 1996
3.2 Registrant's Bylaws
4.1 Specimen Stock Certificates for
Registrant's Common Stock
4.7 Registration Rights Agreement, dated June
26, 1996, between the Registrant and the
initial purchasers of 5 1/4% Convertible
Subordinated Notes due 2003
4.8 Indenture, dated as of June 26, 1996,
among the Registrant and The Bank of
New York for Convertible Subordinated
Notes
4.9 Specimen form of Convertible
Subordinated Note
</TABLE>
6
AGREEMENT AND PLAN OF MERGER
THIS PLAN AND AGREEMENT OF MERGER, dated as of June 4, 1996 (the
"Agreement"), is entered into between SUNGLASS HUT INTERNATIONAL ACQUISITION,
INC., a Florida corporation ("FLORIDA"), and SUNGLASS HUT INTERNATIONAL, INC., a
Delaware corporation ("DELAWARE").
A. DELAWARE has an aggregate authorized capital of 101,000,000 shares
of capital stock, consisting of (i) 100,000,000 shares of common stock, $0.01
par value (the "Delaware Common Stock"), and (ii) 1,000,000 shares of preferred
stock, par value $0.01 per share (the "Delaware Preferred Stock").
B. FLORIDA has an aggregate authorized capital of 101,000,000 shares of
capital stock, consisting of (i) 100,000,000 shares of common stock, $0.01 par
value (the "Florida Common Stock"), and (ii) 1,000,000 shares of preferred
stock, par value $0.01 per share (the "Florida Preferred Stock").
C. The respective Boards of Directors of FLORIDA and DELAWARE believe
that it is in the best interests of FLORIDA and DELAWARE and their respective
shareholders to merge DELAWARE with and into FLORIDA under and pursuant to the
provisions of this Agreement, the Delaware General Corporation Law and the
Florida Business Corporation Act.
AGREEMENT
In consideration of the Recitals and of the mutual agreements contained
in this Agreement, the parties hereto agree as set forth below.
1. MERGER. DELAWARE shall be merged with and into FLORIDA (the
"Merger").
2. EFFECTIVE DATE. The Merger shall become effective immediately upon
the later of the filing of this Agreement or a certificate of merger with the
Secretary of State of Delaware in accordance with the Delaware General
Corporation Law and the filing of articles of merger with the Secretary of State
of Florida in accordance with the Florida Business Corporation Act (the
"Articles of Merger"); PROVIDED, HOWEVER, that if such certificate of merger and
articles of merger specify a later time, then the Merger shall become effective
upon such specified later time. The time of such effectiveness is hereinafter
called the "Effective Date."
3. SURVIVING CORPORATION. FLORIDA shall be the surviving corporation of
the Merger and shall continue to be governed by the laws of the State of
Florida. On the Effective Date, the separate corporate existence of DELAWARE
shall cease.
4. ARTICLES OF INCORPORATION. The Articles of Incorporation of FLORIDA
as it exists on the Effective Date shall be the Articles of Incorporation of
FLORIDA following the Effective Date, unless and until the same shall thereafter
be amended or repealed in accordance with the laws of the State of Florida;
provided, however, that pursuant to and upon the filing of the Articles of
Merger the name of Florida shall be changed to "Sunglass Hut International,
Inc."
5. BYLAWS. The Bylaws of FLORIDA as they exist on the Effective Date
shall be the Bylaws of FLORIDA following the Effective Date, unless and until
the same shall be amended or repealed in accordance with the provisions thereof
and the laws of the State of Florida.
6. BOARD OF DIRECTORS AND OFFICERS. The members of the Board of
Directors and the officers of DELAWARE immediately prior to the Effective Date
shall be the members of the Board of Directors and the officers of FLORIDA
following the Effective Date, and such persons shall serve in such offices for
the
<PAGE>
terms provided by law or in Florida's Articles of Incorporation and Bylaws, or
until their respective successors are elected and qualified.
7. RETIREMENT OF OUTSTANDING FLORIDA STOCK. Upon the Effective Date,
each of the 100 shares of the FLORIDA Common Stock presently issued and
outstanding shall be retired, and no shares of FLORIDA Common Stock or other
securities of FLORIDA shall be issued in respect thereof.
8. CONVERSION OF OUTSTANDING DELAWARE STOCK. Upon the Effective Date,
each issued and outstanding share of DELAWARE Common Stock and all rights in
respect thereof shall be converted into one fully-paid and nonassessable share
of FLORIDA Common Stock, and each certificate representing shares of DELAWARE
Common Stock shall for all purposes be deemed to evidence the ownership of the
same number of shares of FLORIDA Common Stock as are set forth in such
certificate. After the Effective Date, each holder of an outstanding certificate
representing shares of DELAWARE Common Stock may, at such shareholder's option,
surrender the same to FLORIDA's registrar and transfer agent for cancellation,
and each such holder shall be entitled to receive in exchange therefor a
certificate evidencing the ownership of the same number of shares of FLORIDA
Common Stock as are represented by the DELAWARE certificate surrendered to
FLORIDA's registrar and transfer agent.
9. CONDITIONS TO CONSUMMATION OF THE MERGER. Consummation of the Merger
is subject to the satisfaction prior to the Effective Date of the following
conditions: (a) This Agreement and the Merger shall have been adopted and
approved by the affirmative vote of the holders of a majority of the votes
represented by the shares of Delaware Common Stock outstanding on the record
date fixed for determining the shareholders of DELAWARE entitled to vote
thereon; (b) DELAWARE and FLORIDA shall have received all consents, orders and
approvals and satisfaction of all other requirements prescribed by law that are
necessary for the consummation of the Merger; and (c) The Nasdaq National Market
shall have authorized the listing, upon official notice of issuance, of the
shares of Florida Common Stock to be issued or delivered in connection with the
Merger and such authorization shall be in full force and effect on such date.
10. STOCK OPTIONS, WARRANTS AND CONVERTIBLE DEBT. Upon the Effective
Date, each stock option, stock warrant, convertible debt instrument and other
right to subscribe for or purchase shares of DELAWARE Common Stock shall be
converted into a stock option, stock warrant, convertible debt instrument or
other right to subscribe for or purchase the same number of shares of FLORIDA
Common Stock and each certificate, agreement, note or other document
representing such stock option, stock warrant, convertible debt instrument or
other right to subscribe for or purchase shares of DELAWARE Common Stock shall
for all purposes be deemed to evidence the ownership of a stock option, stock
warrant, convertible debt instrument or other right to subscribe for or purchase
shares of FLORIDA Common Stock.
11. RIGHTS AND LIABILITIES OF FLORIDA. At and after the Effective Date,
and all in the manner of and as more fully set forth in Section 607.1106 of the
Florida Business Corporation Act and Section 259 of the Delaware General
Corporation Law, the title to all real estate and other property, or any
interest therein, owned by each of DELAWARE and FLORIDA shall be vested in
FLORIDA without reversion or impairment; FLORIDA shall succeed to and possess,
without further act or deed, all estates, rights, privileges, powers and
franchises, both public and private, and all of the property, real, personal and
mixed, of each of DELAWARE and FLORIDA without reversion or impairment; FLORIDA
shall thenceforth be responsible and liable for all the liabilities and
obligations of each of DELAWARE and FLORIDA; any claim existing or action or
proceeding pending by or against DELAWARE or FLORIDA may be continued as if the
Merger did not occur or FLORIDA may be substituted for DELAWARE in the
proceeding; neither the rights of creditors nor any liens upon the property of
DELAWARE or FLORIDA shall be impaired by the Merger; and FLORIDA shall indemnify
and hold harmless the officers and directors of each of the parties hereto
against all such debts, liabilities and duties and against all claims and
demands arising out of the Merger.
-2-
<PAGE>
12. TERMINATION. This Agreement may be terminated and abandoned by
action of the respective Board of Directors of DELAWARE and FLORIDA at any time
prior to the Effective Date, whether before or after approval by the
shareholders of either or both of the parties hereto.
13. AMENDMENT. The Boards of Directors of the parties hereto may amend
this Agreement at any time prior to the Effective Date; provided, that an
amendment made subsequent to the approval of this Agreement by the shareholders
of either of the parties hereto shall not: (a) change the amount or kind of
shares, securities, cash, property or rights to be received in exchange for or
on conversion of all or any of the shares of the parties hereto, (b) change any
term of the Articles of Incorporation of FLORIDA or (c) change any other terms
or conditions of this Agreement if such change would adversely affect the
holders of any capital stock of either party hereto.
14. INSPECTION OF AGREEMENT. Executed copies of this Agreement will be
on file at the principal place of business of FLORIDA at 255 Alhambra Circle,
Coral Gables, Florida 33134. A copy of this Agreement shall be furnished by
FLORIDA, on request and without cost, to any shareholder of either DELAWARE or
FLORIDA.
15. GOVERNING LAW. This Agreement shall in all respects be construed,
interpreted and enforced in accordance with and governed by the laws of the
State of Florida.
16. SERVICE OF PROCESS. On and after the Effective Date, FLORIDA agrees
that it may be served with process in Delaware in any proceeding for enforcement
of any obligation of DELAWARE or FLORIDA arising from the Merger.
17. DESIGNATION OF DELAWARE SECRETARY OF STATE AS AGENT FOR SERVICE OF
PROCESS. On and after the Effective Date, FLORIDA irrevocably appoints the
Secretary of State of Delaware as its agent to accept service of process in any
suit or other proceeding to enforce the rights of any shareholders of DELAWARE
or FLORIDA arising from the Merger. The Delaware Secretary of State is requested
to mail a copy of any such process to FLORIDA at 255 Alhambra Circle, Coral
Gables, Florida 33134 Attention: President.
18. REMEDIES. Any rights and remedies belonging to DELAWARE or FLORIDA
and arising in connection with the actions contemplated by this Agreement shall
be pursued solely against DELAWARE or FLORIDA, and not against their respective
officers, directors or employees. In the event that any officer, director or
employee of DELAWARE or FLORIDA becomes involved in any capacity in any action,
proceeding or investigation in connection with the Merger or this Agreement,
DELAWARE and/or FLORIDA shall advance to such person(s) all reasonable legal and
other expenses incurred in connection therewith and shall also indemnify such
person(s) against any losses, claims, damages or liabilities to which such
person(s) may become subject in connection with the Merger or this Agreement,
except to the extent that such indemnification is prohibited by law.
-3-
<PAGE>
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement and Plan of Merger to be executed on its behalf by its officers duly
authorized, all as of the date first above written.
SUNGLASS HUT INTERNATIONAL ACQUISITION,
INC., a Florida corporation
By: /s/ LARRY G. PETERSEN
-----------------------------------
Larry G. Petersen
Vice President
SUNGLASS HUT INTERNATIONAL, INC.,
a Delaware corporation
By: /s/ JACK B. CHADSEY
-----------------------------------
Jack B. Chadsey
President and Chief Executive Officer
-4-
FILED
SECRETARY OF STATE
DIVISION OF CORPORATIONS
96 MAY 20 PM 2:22
ARTICLES OF INCORPORATION
OF
SUNGLASS HUT INTERNATIONAL ACQUISITION, INC.
ARTICLE I.
The name of the corporation is Sunglass Hut International Acquisition,
Inc. (hereinafter called the "Corporation").
ARTICLE II
The purpose for which the Corporation is organized is to engage in the
transaction of any lawful business for which corporations may be incorporated
under the laws of the State of Florida.
ARTICLE III
A. AUTHORIZED CAPITAL STOCK. The aggregate number of shares of
all classes of stock which the Corporation shall have authority to issue is one
hundred one million (101,000,000) shares, consisting of (i) one hundred million
(100,000,000) shares of common stock, par value $.01 per share (the "Common
Stock"), and (ii) one million (1,000,000) shares of preferred stock, par value
$.01 per share (the "Preferred Stock").
B. PROVISIONS RELATING TO PREFERRED STOCK.
1. GENERAL. The Preferred Stock may be issued from time to
time in one or more classes or series, the shares of each class or series to
have such designations and powers, preferences and rights, and qualifications,
limitations and restrictions thereof as are stated and expressed herein and in
the resolution or resolutions providing for the issue of such class or series
adopted by the Board of Directors (the "Board") as hereinafter prescribed.
2. PREFERENCES. Authority is hereby expressly granted to and
vested in the Board to authorize the issuance of the Preferred Stock from time
to time in one or more classes or series, to determine and take necessary
proceedings fully to effect the issuance and redemption of any such Preferred
Stock and, with respect to each class or series of the Preferred Stock, to fix
and state, by resolution or resolutions from time to time adopted providing for
the issuance thereof, the following:
<PAGE>
(a) whether or not the class or series is to have
voting rights, full or limited, or is to be without voting
rights;
(b) the number of shares to constitute the class or
series and the designations thereof;
(c) the preferences and relative, participating,
optional or other special rights, if any, and the
qualifications, limitations or restrictions thereof, if any,
with respect to any class or series;
(d) whether or not the shares of any class or series
shall be redeemable and if redeemable the redemption price or
prices, and the time or times at which and the terms and
conditions upon which, such shares shall be redeemable and the
manner of redemption;
(e) whether or not the shares of a class or series
shall be subject to the operation of retirement or sinking
funds to be applied to the purchase or redemption of such
shares for retirement, and if such retirement or sinking fund
or funds be es tablished, the annual amount thereof and the
terms and provisions relative to the operation thereof;
(f) the dividend rate, whether dividends are payable
in cash, stock of the Corporation or other property, the
conditions upon which and the times when such dividends are
payable, the preference to or the relation to the payment of
the dividends payable on any other class or classes or series
of stock, whether or not such dividend shall be cumulative or
noncumulative, and, if cumulative, the date or dates from
which such dividends shall accumulate;
(g) the preferences, if any, and the amounts thereof
that the holders of any class or series thereof shall be
entitled to receive upon the voluntary or involuntary
dissolution of, or upon any distribution of the assets of, the
Corporation;
(h) whether or not the shares of any class or series
shall be convertible into, or exchangeable for, the shares of
any other class or classes or of any other series of the same
or any other class or classes of the Corporation and the
conversion price or prices or ratio or ratios or the rate or
rates at which such conversion or exchange may be made, with
such adjustments, if any, as shall be stated and expressed or
provided for in such resolution or resolutions; and
(i) such other special rights and protective
provisions with respect to any class or series as the Board
may deem advisable.
2
<PAGE>
The shares of each class or series of the Preferred Stock may vary from
the shares of any other class or series thereof in any or all of the foregoing
respects. The Board may increase the number of shares of Preferred Stock
designated for any existing class or series by a resolution adding to such class
or series authorized and unissued shares of the Preferred Stock not designated
for any other class or series. The Board may decrease the number of shares of
the Preferred Stock designated for any existing class or series by a resolution,
subtracting from such series unissued shares of the Preferred Stock designated
for such class or series, and the shares so subtracted shall become authorized,
unissued and undesignated shares of the Preferred Stock.
C. PROVISIONS RELATING TO THE COMMON STOCK.
1. VOTING RIGHTS. Except as otherwise required by law
or as may be provided by the resolutions of the Board authorizing the issuance
of any class or series of the Preferred Stock, as hereinabove provided, all
rights to vote and all voting power shall be vested exclusively in the holders
of the Common Stock.
2. DIVIDENDS. Subject to the rights of the holders of
the Preferred Stock, the holders of the Common Stock shall be entitled to
receive when, as and if declared by the Board, out of funds legally available
therefor, dividends payable in cash, stock or otherwise.
3. LIQUIDATING DISTRIBUTIONS. Upon any liquidation,
dissolution or winding-up of the Corporation, whether voluntary or involuntary,
and after the holders of the Preferred Stock shall have been paid in full the
amounts to which they shall be entitled, if any, or a sum sufficient for such
payment in full shall have been set aside, the remaining net assets of the
Corporation shall be distributed pro rata to the holders of the Common Stock in
accordance with their respective rights and interests to the exclusion of the
holders of the Preferred Stock.
ARTICLE IV
The Corporation shall exist perpetually unless sooner dissolved
according to law.
ARTICLE V
The name of the Incorporator of the Corporation is Brian J. Walsh, and
the address of the Incorporator is 1221 Brickell Avenue, 22nd Floor, Miami,
Florida 33131. The Corporation's mailing address and the address of the
Corporation's principal office is 255 Alhambra Circle, Coral Gables, Florida
33134. The address of the Corporation's initial registered office in the State
of Florida is 1221 Brickell Avenue, 22nd Floor, Miami, Florida
3
<PAGE>
33131, and the name of the Corporation's initial registered agent at such office
is Brian J. Walsh.
ARTICLE VI
A. NUMBER AND TERM OF DIRECTORS. The Corporation's Board shall consist
of not less than three nor more than nine members, with the exact number to be
fixed from time to time by resolution of the Board. No decrease in the number of
directors shall have the effect of shortening the term of any incumbent
director. The Board shall be divided into three classes, Class I, Class II and
Class III. The number of directors elected to each class shall be as nearly
equal in number as possible. Each director in Class I shall be elected to an
initial term to expire at the annual meeting next ensuing, each director in
Class II shall be elected to an initial term to expire one year thereafter and
each director in Class III shall be elected to an initial term to expire two
years thereafter, in each case and until his or her successor is duly elected
and qualified or until his or her earlier resignation, death or removal from
office. Upon the expiration of the initial terms of office for each class of
directors, the directors of each class shall be elected for a term of three
years to serve until their successors are duly elected and qualified or until
their earlier resignation, death or removal from office.
B. DIRECTOR VACANCIES; REMOVAL. Whenever any vacancy on the Board
occurs due to death, resignation, retirement, disqualification, removal,
increase in the number of directors or otherwise, a majority of directors in
office, although less than a quorum of the entire Board, may fill the vacancy or
vacancies for the balance of the unexpired term or terms, at which time a
successor or successors shall be duly elected by the shareholders and qualified.
The Board shall apportion any increase or decrease in the number of
directorships among the classes so as to make the number of directors in each
class as nearly equal in number as possible. Notwithstanding the provisions of
any other Article herein, only the remaining directors of the Corporation shall
have the authority, in accordance with the procedure stated above, to fill any
vacancy that exists on the Board. The Company's shareholders shall not, and
shall have no power to, fill any vacancy on the Board. Shareholders may remove a
director from office prior to the expiration of his or her term, but only for
"cause" by an affirmative vote of two-thirds of the outstanding shares of
capital stock entitled to vote for the election of directors.
C. AMENDMENTS. Notwithstanding anything contained in these Articles of
Incorporation to the contrary, this Article VI shall not be altered, amended or
repealed except by an affirmative vote of at least two-thirds of the outstanding
shares of all capital stock entitled to vote for the election of directors.
4
<PAGE>
ARTICLE VII
The Corporation shall indemnify and may advance expenses to its
officers and directors to the fullest extent permitted by law in existence
either now or hereafter.
ARTICLE VIII
The Board shall have the power to adopt, amend or repeal the Bylaws of
the Corporation or any part thereof.
ARTICLE IX
CALL OF SPECIAL SHAREHOLDERS MEETING. Except as otherwise required by
law and subject to the rights of the holders of the Preferred Stock, special
meetings of shareholders of the Corporation may be called only by (i) the Board
pursuant to a resolution approved by a majority of the entire Board, (ii) the
Company's Chief Executive Officer or (iii) the holders of not less than fifty
(50) percent of all the votes entitled to be cast on any issue proposed to be
considered at the proposed special meeting, but only if such holders first
deliver to the Corporation's secretary one or more written demands (which shall
be signed and dated) describing the purpose or purposes for which the special
meeting is to be held, in accordance with all requirements of applicable law.
Notwithstanding anything contained in these Articles of Incorporation to the
contrary, this Article IX shall not be altered, amended or repealed except by an
affirmative vote of at least two-thirds of the outstanding shares of all capital
stock entitled to vote at a shareholders' meeting duly called for such purpose.
IN WITNESS WHEREOF, the undersigned, being the Incorporator named
above, for the purpose of forming a corporation pursuant to the laws of the
State of Florida, has executed these Articles of Incorporation this 17th day of
May, 1996.
/s/ Brian J. Walsh
------------------
Brian J. Walsh
5
<PAGE>
FILED
SECRETARY OF STATE
DIVISION OF CORPORATIONS
96 MAY 20 PM 2:22
ACCEPTANCE OF APPOINTMENT OF REGISTERED AGENT
The undersigned, having been named the Registered Agent of Sunglass Hut
International Acquisition, Inc., a Florida corporation, hereby accepts such
designation and is familiar with, and accepts, the obligations of such position,
as provided in Section 607.0505 of the Florida Business Corporation Act.
/s/ Brian J. Walsh
------------------
Brian J. Walsh
Registered Agent
DATED: May 17, 1996
6
<PAGE>
FILED
96 JUL -1 AM 9:23
SECRETARY OF STATE
TALLAHASSEE, FLORIDA
EFFECTIVE DATE
7-7-96
ARTICLES OF MERGER
OF
SUNGLASS HUT INTERNATIONAL, INC., A DELAWARE CORPORATION
INTO
SUNGLASS HUT INTERNATIONAL ACQUISITION, INC., A FLORIDA CORPORATION
Pursuant to the provisions of Section 607.1101 and Section 607.1105 of
the Florida Business Corporation Act, SUNGLASS HUT INTERNATIONAL, INC., a
Delaware corporation ("Sunglass"), and SUNGLASS HUT INTERNATIONAL ACQUISITION,
INC., a Florida corporation ("Acquisition"), hereby adopt the following Articles
of Merger for the purpose of merging Sunglass with and into Acquisition (the
"Merger").
FIRST: The plan of merger, pursuant to Section 607.1101 of the Florida
Business Corporation Act ("the "FBCA"), is as set forth in these Articles of
Merger, including Exhibits A and B hereto (the "Plan of Merger").
SECOND: The Merger shall not be effective until 12:01 A.M. on Sunday,
July 7, 1996 (the "Effective Time"). At the Effective Time, Sunglass shall be
merged with and into Acquisition, with Acquisition being the surviving
corporation of the Merger (the "Surviving Corporation") and the separate
existence of Sunglass shall thereupon cease. The Merger shall have the effects
set forth in Section 607.1106 and Section 607.1107 of the FBCA.
THIRD: The Articles of Incorporation of Acquisition as in effect at the
Effective Time shall be the Articles of Incorporation of the Surviving
Corporation; provided, however, that Article I of the Surviving Corporation's
Articles of Incorporation is hereby amended and restated in its entirety,
effective as of the Effective Time, to read as follows: "The name of the
Corporation is Sunglass Hut International, Inc. (hereinafter called the
"Corporation")." Exhibit B hereto sets forth the names and addresses of the
officers and directors of Sunglass, which persons shall become the officers and
directors of the Surviving Corporation at the Effective Time in accordance with
Section 6 of the Agreement and Plan of Merger attached as Exhibit A hereto.
<PAGE>
FOURTH: The Plan of Merger was approved at a meeting of the
shareholders of Sunglass held on June 4, 1996 by the affirmative vote of a
majority of the outstanding shares of Sunglass common stock, and by written
consent of the Board of Directors and sole shareholder of Acquisition dated as
of May 20, 1996.
IN WITNESS WHEREOF, each of Sunglass and Acquisition have caused these
Articles of Merger to be signed in their respective corporate names and on their
behalf by an authorized officer, on this 28th day of June, 1996.
SUNGLASS HUT INTERNATIONAL, INC.
By: /s/ Jack B. Chadsey
------------------------------------
Jack B. Chadsey
President and Chief Executive Officer
SUNGLASS HUT INTERNATIONAL
ACQUISITION, INC.
By: /s/ Larry G. Petersen
-----------------------------------
Larry G. Petersen
Vice President
2
<PAGE>
EXHIBIT A
AGREEMENT AND PLAN OF MERGER
THIS PLAN AND AGREEMENT OF MERGER, dated as of June 4, 1996 (the
"Agreement"), is entered into between SUNGLASS HUT INTERNATIONAL ACQUISITION,
INC., a Florida corporation ("FLORIDA"), and SUNGLASS HUT INTERNATIONAL, INC., a
Delaware corporation ("DELAWARE").
A. DELAWARE has an aggregate authorized capital of 101,000,000 shares
of capital stock, consisting of (i) 100,000,000 shares of common stock, $0.01
par value (the "Delaware Common Stock"), and (ii) 1,000,000 shares of preferred
stock, par value $0.01 per share (the "Delaware Preferred Stock").
B. FLORIDA has an aggregate authorized capital of 101,000,000 shares of
capital stock, consisting of (i) 100,000,000 shares of common stock, $0.01 par
value (the "Florida Common Stock"), and (ii) 1,000,000 shares of preferred
stock, par value $0.01 per share (the "Florida Preferred Stock").
C. The respective Boards of Directors of FLORIDA and DELAWARE believe
that it is in the best interests of FLORIDA and DELAWARE and their respective
shareholders to merge DELAWARE with and into FLORIDA under and pursuant to the
provisions of this Agreement, the Delaware General Corporation Law and the
Florida Business Corporation Act.
AGREEMENT
In consideration of the Recitals and of the mutual agreements contained
in this Agreement, the parties hereto agree as set forth below.
1. MERGER. DELAWARE shall be merged with and into FLORIDA (the
"Merger").
2. EFFECTIVE DATE. The Merger shall become effective immediately upon
the later of the filing of this Agreement or a certificate of merger with the
Secretary of State of Delaware in accordance with the Delaware General
Corporation Law and the filing of articles of merger with the Secretary of State
of Florida in accordance with the Florida Business Corporation Act (the
"Articles of Merger"); PROVIDED, HOWEVER, that if such certificate of merger and
articles of merger specify a later time, then the Merger shall become effective
upon such specified later time. The time of such effectiveness is hereinafter
called the "Effective Date."
3. SURVIVING CORPORATION. FLORIDA shall be the surviving corporation of
the Merger and shall continue to be governed by the laws of the State of
Florida. On the Effective Date, the separate corporate existence of DELAWARE
shall cease.
4. ARTICLES OF INCORPORATION. The Articles of Incorporation of FLORIDA
as it exists on the Effective Date shall be the Articles of Incorporation of
FLORIDA following the Effective Date, unless and until the same shall thereafter
be amended or repealed in accordance with the laws of the State of Florida;
provided, however, that pursuant to and upon the filing of the Articles of
Merger the name of Florida shall be changed to "Sunglass Hut International,
Inc."
5. BYLAWS. The Bylaws of FLORIDA as they exist on the Effective Date
shall be the Bylaws of FLORIDA following the Effective Date, unless and until
the same shall be amended or repealed in accordance with the provisions thereof
and the laws of the State of Florida.
6. BOARD OF DIRECTORS AND OFFICERS. The members of the Board of
Directors and the officers of DELAWARE immediately prior to the Effective Date
shall be the members of the Board of Directors and the officers of FLORIDA
following the Effective Date, and such persons shall serve in such offices for
the
<PAGE>
terms provided by law or in Florida's Articles of Incorporation and Bylaws, or
until their respective successors are elected and qualified.
7. RETIREMENT OF OUTSTANDING FLORIDA STOCK. Upon the Effective Date,
each of the 100 shares of the FLORIDA Common Stock presently issued and
outstanding shall be retired, and no shares of FLORIDA Common Stock or other
securities of FLORIDA shall be issued in respect thereof.
8. CONVERSION OF OUTSTANDING DELAWARE STOCK. Upon the Effective Date,
each issued and outstanding share of DELAWARE Common Stock and all rights in
respect thereof shall be converted into one fully-paid and nonassessable share
of FLORIDA Common Stock, and each certificate representing shares of DELAWARE
Common Stock shall for all purposes be deemed to evidence the ownership of the
same number of shares of FLORIDA Common Stock as are set forth in such
certificate. After the Effective Date, each holder of an outstanding certificate
representing shares of DELAWARE Common Stock may, at such shareholder's option,
surrender the same to FLORIDA's registrar and transfer agent for cancellation,
and each such holder shall be entitled to receive in exchange therefor a
certificate evidencing the ownership of the same number of shares of FLORIDA
Common Stock as are represented by the DELAWARE certificate surrendered to
FLORIDA's registrar and transfer agent.
9. CONDITIONS TO CONSUMMATION OF THE MERGER. Consummation of the Merger
is subject to the satisfaction prior to the Effective Date of the following
conditions: (a) This Agreement and the Merger shall have been adopted and
approved by the affirmative vote of the holders of a majority of the votes
represented by the shares of Delaware Common Stock outstanding on the record
date fixed for determining the shareholders of DELAWARE entitled to vote
thereon; (b) DELAWARE and FLORIDA shall have received all consents, orders and
approvals and satisfaction of all other requirements prescribed by law that are
necessary for the consummation of the Merger; and (c) The Nasdaq National Market
shall have authorized the listing, upon official notice of issuance, of the
shares of Florida Common Stock to be issued or delivered in connection with the
Merger and such authorization shall be in full force and effect on such date.
10. STOCK OPTIONS, WARRANTS AND CONVERTIBLE DEBT. Upon the Effective
Date, each stock option, stock warrant, convertible debt instrument and other
right to subscribe for or purchase shares of DELAWARE Common Stock shall be
converted into a stock option, stock warrant, convertible debt instrument or
other right to subscribe for or purchase the same number of shares of FLORIDA
Common Stock and each certificate, agreement, note or other document
representing such stock option, stock warrant, convertible debt instrument or
other right to subscribe for or purchase shares of DELAWARE Common Stock shall
for all purposes be deemed to evidence the ownership of a stock option, stock
warrant, convertible debt instrument or other right to subscribe for or purchase
shares of FLORIDA Common Stock.
11. RIGHTS AND LIABILITIES OF FLORIDA. At and after the Effective Date,
and all in the manner of and as more fully set forth in Section 607.1106 of the
Florida Business Corporation Act and Section 259 of the Delaware General
Corporation Law, the title to all real estate and other property, or any
interest therein, owned by each of DELAWARE and FLORIDA shall be vested in
FLORIDA without reversion or impairment; FLORIDA shall succeed to and possess,
without further act or deed, all estates, rights, privileges, powers and
franchises, both public and private, and all of the property, real, personal and
mixed, of each of DELAWARE and FLORIDA without reversion or impairment; FLORIDA
shall thenceforth be responsible and liable for all the liabilities and
obligations of each of DELAWARE and FLORIDA; any claim existing or action or
proceeding pending by or against DELAWARE or FLORIDA may be continued as if the
Merger did not occur or FLORIDA may be substituted for DELAWARE in the
proceeding; neither the rights of creditors nor any liens upon the property of
DELAWARE or FLORIDA shall be impaired by the Merger; and FLORIDA shall indemnify
and hold harmless the officers and directors of each of the parties hereto
against all such debts, liabilities and duties and against all claims and
demands arising out of the Merger.
-2-
<PAGE>
12. TERMINATION. This Agreement may be terminated and abandoned by
action of the respective Board of Directors of DELAWARE and FLORIDA at any time
prior to the Effective Date, whether before or after approval by the
shareholders of either or both of the parties hereto.
13. AMENDMENT. The Boards of Directors of the parties hereto may amend
this Agreement at any time prior to the Effective Date; provided, that an
amendment made subsequent to the approval of this Agreement by the shareholders
of either of the parties hereto shall not: (a) change the amount or kind of
shares, securities, cash, property or rights to be received in exchange for or
on conversion of all or any of the shares of the parties hereto, (b) change any
term of the Articles of Incorporation of FLORIDA or (c) change any other terms
or conditions of this Agreement if such change would adversely affect the
holders of any capital stock of either party hereto.
14. INSPECTION OF AGREEMENT. Executed copies of this Agreement will be
on file at the principal place of business of FLORIDA at 255 Alhambra Circle,
Coral Gables, Florida 33134. A copy of this Agreement shall be furnished by
FLORIDA, on request and without cost, to any shareholder of either DELAWARE or
FLORIDA.
15. GOVERNING LAW. This Agreement shall in all respects be construed,
interpreted and enforced in accordance with and governed by the laws of the
State of Florida.
16. SERVICE OF PROCESS. On and after the Effective Date, FLORIDA agrees
that it may be served with process in Delaware in any proceeding for enforcement
of any obligation of DELAWARE or FLORIDA arising from the Merger.
17. DESIGNATION OF DELAWARE SECRETARY OF STATE AS AGENT FOR SERVICE OF
PROCESS. On and after the Effective Date, FLORIDA irrevocably appoints the
Secretary of State of Delaware as its agent to accept service of process in any
suit or other proceeding to enforce the rights of any shareholders of DELAWARE
or FLORIDA arising from the Merger. The Delaware Secretary of State is requested
to mail a copy of any such process to FLORIDA at 255 Alhambra Circle, Coral
Gables, Florida 33134 Attention: President.
18. REMEDIES. Any rights and remedies belonging to DELAWARE or FLORIDA
and arising in connection with the actions contemplated by this Agreement shall
be pursued solely against DELAWARE or FLORIDA, and not against their respective
officers, directors or employees. In the event that any officer, director or
employee of DELAWARE or FLORIDA becomes involved in any capacity in any action,
proceeding or investigation in connection with the Merger or this Agreement,
DELAWARE and/or FLORIDA shall advance to such person(s) all reasonable legal and
other expenses incurred in connection therewith and shall also indemnify such
person(s) against any losses, claims, damages or liabilities to which such
person(s) may become subject in connection with the Merger or this Agreement,
except to the extent that such indemnification is prohibited by law.
-3-
<PAGE>
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement and Plan of Merger to be executed on its behalf by its officers duly
authorized, all as of the date first above written.
SUNGLASS HUT INTERNATIONAL ACQUISITION,
INC., a Florida corporation
By: /s/ LARRY G. PETERSEN
-----------------------------------
Larry G. Petersen
Vice President
SUNGLASS HUT INTERNATIONAL, INC.,
a Delaware corporation
By: /s/ JACK B. CHADSEY
-----------------------------------
Jack B. Chadsey
President and Chief Executive Officer
-4-
<PAGE>
EXHIBIT B
The following persons are the officers and directors of Sunglass, with the
respective positions as indicated below, and shall become the officers and
directors of the Surviving Corporation in such respective positions at the
Effective Time:
NAME AND ADDRESS POSITION(S)
- ---------------- -----------
Jack B. Chadsey* President, Chief Executive Officer and Director
Sheila S. Arnold* Senior Vice President-Merchandising and
Marketing
Edward L. Grund* Senior Vice President-Store Operations, Real
Estate and Construction
Larry G. Petersen* Senior Vice President-Finance, Chief Financial
Officer, Secretary and Treasurer
Lesley M. Berkovitz* Vice President-Human Resources
Martyn E. Holland* Vice President-Management Information Systems
Charles W. Mineo* Vice President-Real Estate and Construction
George L. Pita* Vice President-Finance and International
Development, Assistant Secretary and Assistant
Treasurer
Marlene M. Marban* Assistant Secretary
James N. Hauslein* Chairman of the Board and Director
Rohit M. Desai Director
540 Madison Avenue, 36th Floor
New York, NY 10022
John H. Duerden* Director
William S. Field* Director
Robert C. Grayson* Director
William E. Phillips* Director
*Unless otherwise indicated, the address of each of the officers and directors
listed above is 255 Alhambra Circle, Coral Gables, Florida 33134.
BYLAWS
OF
SUNGLASS HUT INTERNATIONAL ACQUISITION, INC.
(A FLORIDA CORPORATION)
(MAY 20, 1996)
<PAGE>
INDEX
PAGE
NUMBER
ARTICLE ONE OFFICES................................................ 1
1. Registered Office...................................... 1
2. Other Offices.......................................... 1
ARTICLE TWO MEETINGS OF SHAREHOLDERS............................... 1
1. Place.................................................. 1
2. Time of Annual Meeting................................. 1
3. Call of Special Meetings............................... 1
4. Conduct of Meetings.................................... 1
5. Notice and Waiver of Notice............................ 2
6. Business of Special Meeting............................ 2
7. Quorum................................................. 2
8. Voting of Shares....................................... 3
9. Proxies................................................ 3
10. Shareholder List....................................... 3
11. Action Without Meeting................................. 4
12. Fixing Record Date..................................... 4
13. Inspectors and Judges.................................. 4
14. Advance Notice of Shareholder-Proposed Business at
Annual Meeting......................................... 5
ARTICLE THREE DIRECTORS.............................................. 6
1. Number and Term........................................ 6
2. Vacancies; Removal..................................... 6
3. Powers................................................. 6
4. Place of Meetings...................................... 6
5. Annual Meeting......................................... 6
6. Regular Meetings....................................... 6
7. Special Meetings and Notice............................ 6
8. Quorum and Required Vote............................... 7
9. Action Without Meeting................................. 7
10. Telephone Meetings..................................... 7
11. Committees............................................. 7
12. Compensation of Directors.............................. 8
13. Chairman of the Board.................................. 8
14. Shareholder Nominations for Director Candidates........ 8
i
<PAGE>
PAGE
NUMBER
ARTICLE FOUR OFFICERS............................................... 9
1. Positions.............................................. 9
2. Election of Specified Officers by Board................ 9
3. Election or Appointment of Other Officers.............. 9
4. Salaries............................................... 9
5. Term................................................... 9
6. President.............................................. 10
7. Vice Presidents........................................ 10
8. Secretary.............................................. 10
ARTICLE FIVE CERTIFICATES FOR SHARES................................ 10
1. Issue of Certificates.................................. 10
2. Legends for Preferences and Restrictions on Transfer... 11
3. Facsimile Signatures................................... 11
4. Lost Certificates...................................... 12
5. Transfer of Shares..................................... 12
6. Registered Shareholders................................ 12
7. Redemption of Control Shares........................... 12
ARTICLE SIX GENERAL PROVISIONS..................................... 12
1. Dividends.............................................. 12
2. Reserves............................................... 12
3. Checks................................................. 13
4. Fiscal Year............................................ 13
5. Seal................................................... 13
ARTICLE SEVEN AMENDMENT OF BYLAWS.................................... 13
ii
<PAGE>
SUNGLASS HUT INTERNATIONAL ACQUISITION, INC.
BYLAWS
ARTICLE ONE
OFFICES
Section 1. REGISTERED OFFICE. The registered office of SUNGLASS HUT
INTERNATIONAL ACQUISITION, INC., a Florida corporation (the "Corporation"),
shall be located in the City of Coral Gables, State of Florida, unless otherwise
determined by the Board of Directors of the Corporation (the "Board of
Directors") in accordance with applicable law.
Section 2. OTHER OFFICES. The Corporation may also have offices at such
other places, either within or without the State of Florida, as the Board of
Directors may from time to time determine or as the business of the Corporation
may require.
ARTICLE TWO
MEETINGS OF SHAREHOLDERS
Section 1. PLACE. All annual meetings of shareholders shall be held at
such place, within or without the State of Florida, as may be designated by the
Board of Directors and stated in the notice of the meeting or in a duly executed
waiver of notice thereof. Special meetings of shareholders may be held at such
place, within or without the State of Florida, and at such time as shall be
stated in the notice of the meeting or in a duly executed waiver of notice
thereof.
Section 2. TIME OF ANNUAL MEETING. Annual meetings of shareholders
shall be held on such date and at such time fixed, from time to time, by the
Board of Directors, provided, that there shall be an annual meeting held every
calendar year at which the shareholders shall elect a board of directors and
transact such other business as may properly be brought before the meeting.
Section 3. CALL OF SPECIAL MEETINGS. Special meetings of the
shareholders shall be held if called in accordance with the procedures set forth
in the Corporation's Articles of Incorporation (the "Articles of Incorporation")
for the call of a special meeting of shareholders.
<PAGE>
Section 4. CONDUCT OF MEETINGS. The Chairman of the Board (or in his
absence, the President or such other designee of the Chairman of the Board)
shall preside at the annual and special meetings of shareholders and shall be
given full discretion in establishing the rules and procedures to be followed in
conducting the meetings, except as otherwise provided by law or in these Bylaws.
Section 5. NOTICE AND WAIVER OF NOTICE. Except as otherwise provided by
law, written or printed notice stating the place, date and time of the meeting
and, in the case of a special meeting, the purpose or purposes for which the
meeting is called, shall be delivered not less than ten (10) nor more than sixty
(60) days before the date of the meeting, either personally or by first-class
mail or other legally sufficient means, by or at the direction of the President,
the Secretary, or the officer or person calling the meeting, to each shareholder
of record entitled to vote at such meeting. If the notice is mailed at least
thirty (30) days before the date of the meeting, it may be done by a class of
United States mail other than first class. If mailed, such notice shall be
deemed to be delivered when deposited in the United States mail addressed to the
shareholder at his address as it appears on the stock transfer books of the
Corporation, with postage thereon prepaid. If a meeting is adjourned to another
time and/or place, and if an announcement of the adjourned time and/or place is
made at the meeting, it shall not be necessary to give notice of the adjourned
meeting unless the Board of Directors, after adjournment, fixes a new record
date for the adjourned meeting. Whenever any notice is required to be given to
any shareholder, a waiver thereof in writing signed by the person or persons
entitled to such notice, whether signed before, during or after the time of the
meeting stated therein, and delivered to the Corporation for inclusion in the
minutes or filing with the corporate records, shall constitute an effective
waiver of such notice. Neither the business to be transacted at, nor the purpose
of, any regular or special meeting of the shareholders need be specified in any
written waiver of notice. Attendance of a person at a meeting shall constitute a
waiver of (a) lack of or defective notice of such meeting, unless the person
objects at the beginning to the holding of the meeting or the transacting of any
business at the meeting, or (b) lack of defective notice of a particular matter
at a meeting that is not within the purpose or purposes described in the meeting
notice, unless the person objects to considering such matter when it is
presented.
Section 6. BUSINESS OF SPECIAL MEETING. Business transacted at any
special meeting shall be confined to the purposes stated in the notice thereof.
Section 7. QUORUM. Shares entitled to vote as a separate voting group
may take action on a matter at a meeting only if a quorum of those shares exists
with respect to that matter. Except as otherwise provided in the Articles of
Incorporation or applicable law, a majority of the votes entitled to be cast on
the matter by the voting group constitutes a quorum of that voting group for
action on that matter; provided, however, that in no event shall a quorum
consist of less than one-third (1/3) of the shares of each voting group entitled
to vote. If less than a quorum of shares are represented at a meeting, the
holders of a majority of the shares so represented may adjourn the meeting from
time to time.
2
<PAGE>
After a quorum has been established at any shareholders' meeting, the subsequent
withdrawal of shareholders, so as to reduce the number of shares entitled to
vote at the meeting below the number required for a quorum, shall not affect the
validity of any action taken at the meeting or any adjournment thereof. Once a
share is represented for any purpose at a meeting, it is deemed present for
quorum purposes for the remainder of the meeting and for any adjournment of that
meeting unless a new record date is or must be set for that adjourned meeting.
Section 8. VOTING OF SHARES. Each outstanding share, regardless of
class, shall be entitled to vote on each matter submitted to a vote at a meeting
of shareholders, except to the extent that the voting rights of the shares of
any class are limited or denied by or pursuant to the Articles of Incorporation
or the Florida Business Corporation Act.
Section 9. PROXIES. Any shareholder of the Corporation, other person
entitled to vote on behalf of a shareholder pursuant to law, or attorney-in-fact
for such persons may vote the shareholder's shares in person or by proxy. Any
shareholder of the Corporation may appoint a proxy to vote or otherwise act for
him by signing an appointment form, either personally or by his
attorney-in-fact. An executed telegram or cablegram appearing to have been
transmitted by such person, or a photographic, photostatic, or equivalent
reproduction of an appointment form, shall be deemed a sufficient appointment
form. An appointment of a proxy is effective when received by the Secretary of
the Corporation (the "Secretary") or such other officer or agent which is
authorized to tabulate votes, and shall be valid for up to 11 months, unless a
longer period is expressly provided in the appointment form. The death or
incapacity of the shareholder appointing a proxy does not affect the right of
the Corporation to accept the proxy's authority unless notice of the death or
incapacity is received by the Secretary or other officer or agent authorized to
tabulate votes before the proxy exercises his authority under the appointment.
An appointment of a proxy is revocable by the shareholder unless the appointment
form conspicuously states that it is irrevocable and the appointment is coupled
with an interest.
Section 10. SHAREHOLDER LIST. After fixing a record date for a meeting
of shareholders, the Corporation shall prepare an alphabetical list of the names
of all its shareholders who are entitled to notice of the meeting, arranged by
voting group with the address of, and the number and class and series, if any,
of shares held by each. The shareholders' list must be available for inspection
by any shareholder for a period of ten (10) days prior to the meeting or such
shorter time as exists between the record date and the meeting and continuing
through the meeting at the Corporation's principal office, at a place identified
in the meeting notice in the city where the meeting will be held, or at the
office of the Corporation's transfer agent or registrar. Any shareholder of the
Corporation or his agent or attorney is entitled on written demand to inspect
the shareholders' list (subject to the requirements of law), during regular
business hours and at his expense, during the period it is available for
inspection. The Corporation shall make the shareholders' list available at the
meeting of shareholders, and any shareholder or his agent or attorney is
entitled to inspect the list at any time during the meeting or any adjournment.
3
<PAGE>
The shareholders' list is prima facie evidence of the identity of shareholders
entitled to examine the shareholders' list or to vote at a meeting of
shareholders.
Section 11. ACTION WITHOUT MEETING. Any action required or permitted by
law to be taken at a meeting of shareholders may be taken without a meeting or
notice if a consent, or consents, in writing, setting forth the action so taken,
shall be dated and signed by the holders of outstanding stock having not less
than the minimum number of votes that would be necessary to authorize or take
such action at a meeting at which all voting groups and shares entitled to vote
thereon were present and voted with respect to the subject matter thereof, and
such consent shall be delivered to the Corporation, within the period required
by Section 607.0704 of the Florida Business Corporation Act, by delivery to its
principal office in the State of Florida, its principal place of business, the
Secretary or another officer or agent of the Corporation having custody of the
book in which proceedings of meetings of shareholders are recorded. Within ten
(10) days after obtaining such authorization by written consent, notice must be
given to those shareholders who have not consented in writing or who are not
entitled to vote on the action, in accordance with the requirements of Section
607.0704 of the Florida Business Corporation Act.
Section 12. FIXING RECORD DATE. For the purpose of determining
shareholders entitled to notice of or to vote at any meeting of shareholders or
any adjournment thereof, or entitled to receive payment of any dividend, or in
order to make a determination of shareholders for any other proper purposes, the
Board of Directors may fix in advance a date as the record date for any such
determination of shareholders, such date in any case to be not more than seventy
(70) days, and, in case of a meeting of shareholders, not less than ten (10)
days, before the meeting or action requiring such determination of shareholders.
If no record date is fixed for the determination of shareholders entitled to
notice of or to vote at a meeting of shareholders or the determination of
shareholders entitled to receive payment of a dividend, the date before the day
on which the first notice of the meeting is mailed or the date on which the
resolutions of the Board of Directors declaring such dividend is adopted, as the
case may be, shall be the record date for such determination of shareholders.
When a determination of shareholders entitled to vote at any meeting of
shareholders has been made as provided in this Section, such determination shall
apply to any adjournment thereof, except where the Board of Directors fixes a
new record date for the adjourned meeting.
Section 13. INSPECTORS AND JUDGES. The Board of Directors in advance of
any meeting may, but need not, appoint one or more inspectors of election or
judges of the vote, as the case may be, to act at the meeting or any adjournment
thereof. If any inspector or inspectors, or judge or judges, are not appointed,
the person presiding at the meeting may, but need not, appoint one or more
inspectors or judges. In case any person who may be appointed as an inspector or
judge fails to appear or act, the vacancy may be filled by the Board of
Directors in advance of the meeting, or at the meeting by the person presiding
thereat. The inspectors or judges, if any, shall determine the number of shares
of stock outstanding and the voting power of each, the shares of stock
represented at the meeting,
4
<PAGE>
the existence of a quorum, the validity and effect of proxies, and shall receive
votes, ballots and consents, hear and determine all challenges and questions
arising in connection with the right to vote, count and tabulate votes, ballots
and consents, determine the result, and do such acts as are proper to conduct
the election or vote with fairness to all shareholders. On request of the person
presiding at the meeting, the inspector or inspectors or judge or judges, if
any, shall make a report in writing of any challenge, question or matter
determined by him or them, and execute a certificate of any fact found by him or
them.
Section 14. ADVANCE NOTICE OF SHAREHOLDER-PROPOSED BUSINESS AT ANNUAL
MEETING. At an annual meeting of the shareholders, only such business shall be
conducted as shall have been properly brought before the meeting. To be properly
brought before an annual meeting, business must be either (a) specified in the
notice of meeting (or any supplement thereto) given by or at the direction of
the Board of Directors, (b) otherwise properly brought before the meeting by or
at the direction of the Board of Directors, or (c) otherwise properly brought
before the meeting by a shareholder. In addition to any other applicable
requirements, for business to be properly brought before an annual meeting by a
shareholder, the shareholder must have given timely notice thereof in writing to
the Secretary of the Corporation. To be timely, a shareholder's notice must be
delivered to or mailed and received at the principal executive offices of the
Corporation, not less than sixty (60) days nor more than ninety (90) days prior
to the meeting; provided, however, that in the event that less than seventy (70)
days' notice or prior public disclosure of the date of the meeting is given or
made to shareholders, notice by the shareholder to be timely must be so received
not later than the close of business on the tenth (10th) day following the date
on which such notice of the date of the annual meeting was mailed or such public
disclosure was made, whichever first occurs. A shareholder's notice to the
Secretary shall set forth as to each matter the shareholder proposes to bring
before the annual meeting (i) a brief description of the business desired to be
brought before the annual meeting and the reasons for conducting such business
at the annual meeting, (ii) the name and record address of the shareholder
proposing such business, (iii) the class and number of shares of the Corporation
which are beneficially owned by the shareholder, and (iv) any material interest
of the shareholder in such business.
Notwithstanding anything in the Bylaws to the contrary, no business
shall be conducted at the annual meeting except in accordance with the
procedures set forth in this Article Two, Section 14; provided, however, that
nothing in this Article Two, Section 14 shall be deemed to preclude discussion
by any shareholder of any business properly brought before the annual meeting in
accordance with said procedure.
The Chairman of an annual meeting shall, if the facts warrant,
determine and declare to the meeting that business was not properly brought
before the meeting in accordance with the provisions of this Article Two,
Section 14, and if he should so determine, he shall so declare to the meeting,
and any such business not properly brought before the meeting shall not be
transacted.
5
<PAGE>
ARTICLE THREE
DIRECTORS
Section 1. NUMBER AND TERM. The number of directors of the Corporation
and the term of such directors shall be determined in the manner and within the
limits set forth in the Corporation's Articles of Incorporation.
Section 2. VACANCIES; REMOVAL. A director may resign at any time by
giving written notice to the Board of Directors or the Chairman of the Board.
Such resignation shall take effect at the date of receipt of such notice or at
any later time specified therein; and, unless otherwise specified therein, the
acceptance of such resignation shall not be necessary to make it effective.
Director vacancies shall be filled in the manner prescribed in the Corporation's
Articles of Incorporation.
Section 3. POWERS. The business and affairs of the Corporation shall be
managed by its Board of Directors, which may exercise all such powers of the
Corporation and do all such lawful acts and things as are not by statute or by
the Articles of Incorporation or by these Bylaws directed or required to be
exercised and done by the shareholders.
Section 4. PLACE OF MEETINGS. Meetings of the Board of Directors,
regular or special, may be held either within or without the State of Florida.
Section 5. ANNUAL MEETING. Unless scheduled for another time by the
Board of Directors, the first meeting of each newly elected Board of Directors
shall be held, without call or notice, immediately following each annual meeting
of shareholders.
Section 6. REGULAR MEETINGS. Regular meetings of the Board of Directors
may also be held without notice at such time and at such place as shall from
time to time be determined by the Board of Directors.
Section 7. SPECIAL MEETINGS AND NOTICE. Special meetings of the Board
of Directors may be called by the President or Chairman of the Board and shall
be called by the Secretary on the written request of any two directors. At least
2 days' written notice of the date, time and place of special meetings of the
Board of Directors shall be given to each director. Except as required by law,
neither the business to be transacted at, nor the purpose of, any regular or
special meeting of the Board of Directors need be specified in the notice or
waiver of notice of such meeting. Notices to directors shall be in writing and
delivered to the directors at their addresses appearing on the books of the
Corporation by personal delivery, mail or other legally sufficient means. Notice
by mail shall be deemed to be given at the time when the same shall be received.
Notice to directors may also be given by telegram, teletype or other form of
electronic communication. Whenever any notice is required to be given to any
director, a waiver thereof in writing signed by the person or persons entitled
to such notice, whether before, during or after the meeting, shall
6
<PAGE>
constitute an effective waiver of such notice. Attendance of a director at a
meeting shall constitute a waiver of notice of such meeting, except for the
express purpose of objecting to the transaction of any business on the ground
that the meeting is not lawfully called or convened.
Section 8. QUORUM AND REQUIRED VOTE. A majority of the prescribed
number of directors determined as provided in the Articles of Incorporation
shall constitute a quorum for the transaction of business and the act of the
majority of the directors present at a meeting at which a quorum is present
shall be the act of the Board of Directors, unless a greater number is required
by the Articles of Incorporation. If a quorum shall not be present at any
meeting of the Board of Directors, a majority of the directors present thereat
may adjourn the meeting to another time and place, without notice other than
announcement at the time of adjournment. At such adjourned meeting at which a
quorum shall be present, any business may be transacted that might have been
transacted at the meeting as originally notified and called.
Section 9. ACTION WITHOUT MEETING. Any action required or permitted to
be taken at a meeting of the Board of Directors or committee thereof may be
taken without a meeting if a consent in writing, setting forth the action taken,
is signed by all of the members of the Board of Directors or the committee, as
the case may be, and such consent shall have the same force and effect as a
unanimous vote at a meeting.
Section 10. TELEPHONE MEETINGS. Directors and committee members may
participate in and hold a meeting by means of conference telephone or similar
communication equipment by means of which all persons participating in the
meeting can hear each other. Participation in such a meetings shall constitute
presence in person at the meeting, except where a person participates in the
meeting for the express purpose of objecting to the transaction of any business
on the ground the meeting is not lawfully called or convened.
Section 11. COMMITTEES. The Board of Directors, by resolution adopted
by a majority of the whole Board of Directors, may designate from among its
members an executive committee and one or more other committees, each of which,
to the extent provided in such resolution, shall have and may exercise all of
the authority of the Board of Directors in the business and affairs of the
Corporation except where the action of the full Board of Directors is required
by statute. Each committee must have two or more members who serve at the
pleasure of the Board of Directors. Vacancies in the membership of a committee
shall be filled by the Board of Directors at a regular or special meeting of the
Board of Directors. The executive committee shall keep regular minutes of its
proceedings and report the same to the Board of Directors when required. The
designation of any such committee and the delegation thereto of authority shall
not operate to relieve the Board of Directors, or any member thereof, of any
responsibility imposed upon it or him by law.
7
<PAGE>
Section 12. COMPENSATION OF DIRECTORS. The directors may be paid their
expenses, if any, of attendance at each meeting of the Board of Directors and
may be paid a fixed sum for attendance at each meeting of the Board of Directors
or a stated salary as director. No such payment shall preclude any director from
serving the Corporation in any other capacity and receiving compensation
therefor. Members of special or standing committees may be allowed like
compensation for attending committee meetings.
Section 13. CHAIRMAN OF THE BOARD. The Board of Directors may, in its
discretion, choose a chairman of the board who shall preside at meetings of the
shareholders and of the directors. The Chairman of the Board shall have such
other powers and shall perform such other duties as shall be designated by the
Board of Directors. The Chairman of the Board shall be a member of the Board of
Directors but no other officers of the Corporation need be a director. The
Chairman of the Board shall serve until his successor is chosen and qualified,
but he may be removed at any time by the affirmative vote of a majority of the
Board of Directors.
Section 14. SHAREHOLDER NOMINATIONS FOR DIRECTOR CANDIDATES. Only
persons who are nominated in accordance with the following procedures shall be
eligible for election as directors. Nominations of persons for election to the
Board of Directors of the Corporation may be made at a meeting of shareholders
(i) by or at the direction of the Board of Directors by any nominating committee
or person appointed by the Board of Directors or (ii) by any shareholder of the
Corporation entitled to vote for the election of directors at the meeting which
complies with the notice procedures set forth in this Article Three, Section 14;
provided, however, that nominations of persons for election to the Board at a
special meeting may be made only if the election of directors is one of the
purposes described in the special meeting notice required by Section 607.0705 of
the Florida Business Corporation Act. Nominations, other than those made by or
at the direction of the Board of Directors, shall be made pursuant to timely
notice in writing to the Secretary of the Corporation. To be timely, a
shareholder's notice must be delivered to or mailed and received at the
principal executive offices of the Corporation not less than seventy (70) days
nor more than ninety (90) days prior to the meeting; provided, however, that in
the event that less than seventy (70) days' notice or prior public disclosure of
the date of the meeting is given or made to shareholders, notice by the
shareholder to be timely must be so received not later than the close of
business on the tenth (10th) day following the date on which such notice of the
date of the meeting was mailed or such public disclosure was made, whichever
first occurs. Such shareholder's notice to the Secretary shall set forth (a) as
to each person whom the shareholder proposes to nominate for election or
re-election as a director, (i) the name, age, business address and residence
address of the person, (ii) the principal occupation or employment of the
persons, (iii) the class and number of shares of capital stock of the
Corporation which are beneficially owned by the person, and (iv) any other
information relating to the person that is required to be disclosed in
solicitations for proxies for election of directors pursuant to Rule 14a under
the Securities Exchange Act of 1934, as amended; and (b) as to the shareholder
giving the notice, (i) the name and record address of such shareholder, and (ii)
the class and number of shares of capital stock of the
8
<PAGE>
Corporation which are beneficially owned by the shareholder. The Corporation may
require any proposed nominee to furnish such other information as may reasonably
be required by the Corporation to determine the eligibility of such proposed
nominee to serve as director of the Corporation. No person shall be eligible for
election as a director of the Corporation unless nominated in accordance with
the procedures set forth herein. The Chairman of the meeting shall, if the facts
warrant, determine and declare to the meeting that a nomination was not made in
accordance with the requirements of this Article Three, Section 14, and if he
should so determine, he shall so declare to the meeting, and the defective
nomination shall be disregarded.
ARTICLE FOUR
OFFICERS
Section 1. POSITIONS. The officers of the Corporation shall consist of
a President, one or more Vice Presidents and a Secretary and, if elected by the
Board of Directors by resolution, a Chairman of the Board. Any two or more
offices may be held by the same person.
Section 2. ELECTION OF SPECIFIED OFFICERS BY BOARD. The Board of
Directors at its first meeting after each annual meeting of shareholders shall
elect a President, one or more Vice Presidents and a Secretary.
Section 3. ELECTION OR APPOINTMENT OF OTHER OFFICERS. Such other
officers and assistant officers and agents as may be deemed necessary may be
elected or appointed by the Board of Directors, or, unless otherwise specified
herein, appointed by the President of the Corporation. The Board of Directors
shall be advised of appointments by the President at or before the next
scheduled Board of Directors meeting.
Section 4. SALARIES. The salaries of all officers of the Corporation to
be elected by the Board of Directors pursuant to Article Four, Section 2 hereof
shall be fixed from time to time by the Board of Directors or pursuant to its
discretion. The salaries of all other elected or appointed officers of the
Corporation shall be fixed from time to time by the President of the Corporation
or pursuant to his direction.
Section 5. TERM. The officers of the Corporation shall hold office
until their successors are chosen and qualified. Any officer or agent elected or
appointed by the Board of Directors or the President of the Corporation may be
removed, with or without cause, by the Board of Directors whenever in its
judgment the best interests of the Corporation will be served thereby, but such
removal shall be without prejudice to the contract rights, if any, of the person
so removed. Any officers or agents appointed by the President of the Corporation
pursuant to Section 3 of this Article Four may also be removed from such officer
positions by the President, with or without cause. Any vacancy occurring in any
9
<PAGE>
office of the Corporation by death, resignation, removal or otherwise shall be
filled by the Board of Directors, or, in the case of an officer appointed by the
President of the Corporation, by the President or the Board of Directors.
Section 6. PRESIDENT. The President shall be the Chief Executive
Officer of the Corporation, shall have general and active management of the
business of the Corporation and shall see that all orders and resolutions of the
Board of Directors are carried into effect. In the absence of the Chairman of
the Board or in the event the Board of Directors shall not have designated a
chairman of the board, the President shall preside at meetings of the
shareholders and the Board of Directors.
Section 7. VICE PRESIDENTS. The Vice Presidents in the order of their
seniority, unless otherwise determined by the Board of Directors, shall, in the
absence or disability of the President, perform the duties and exercise the
powers of the President. They shall perform such other duties and have such
other powers as the Board of Directors shall prescribe or as the President may
from time to time delegate.
Section 8. SECRETARY. The Secretary shall attend all meetings of the
Board of Directors and all meetings of the shareholders and record all the
proceedings of the meetings of the shareholders and of the Board of Directors in
a book to be kept for that purpose and shall perform like duties for the
standing committees when required. He shall give, or cause to be given, notice
of all meetings of the shareholders and special meetings of the Board of
Directors, and shall perform such other duties as may be prescribed by the Board
of Directors or President, under whose supervision he shall be. He shall keep in
safe custody the seal of the Corporation and, when authorized by the Board of
Directors, affix the same to any instrument requiring it.
ARTICLE FIVE
CERTIFICATES FOR SHARES
Section 1. ISSUE OF CERTIFICATES. The shares of the Corporation shall
be represented by certificates, provided that the Board of Directors of the
Corporation may provide by resolution or resolutions that some or all of any or
all classes or series of its stock shall be uncertificated shares. Any such
resolution shall not apply to shares represented by a certificate until such
certificate is surrendered to the Corporation. Notwithstanding the adoption of
such a resolution by the Board of Directors, every holder of stock represented
by certificates (and upon request every holder of uncertificated shares) shall
be entitled to have a certificate signed by, or in the name of the Corporation
by the Chairman or Vice-Chairman of the Board of Directors, or the President or
Vice President, and by the Treasurer or an Assistant Treasurer, or the Secretary
or an Assistant Secretary of the Corporation, representing the number of shares
registered in certificate form.
10
<PAGE>
Section 2. LEGENDS FOR PREFERENCES AND RESTRICTIONS ON TRANSFER. If the
Corporation shall be authorized to issue more than one class of stock or more
than one series of any class, the powers, designations, preferences and
relative, participating, optional, or other special rights of each class of
stock or series thereof and the qualifications or restrictions of such
preferences and/or rights shall be set forth in full or summarized on the face
or back of the certificate which the Corporation shall issue to represent such
class or series of stock, provided that, except as otherwise provided by law, in
lieu of the foregoing requirements, there may be set forth on the face or back
of the certificate which the Corporation shall issue to represent such class or
series of stock, a statement that the Corporation will furnish without charge to
each shareholder who so requests the powers, designations, preferences and
relative, participating, optional, or other special rights of each class of
stock or series thereof and the qualifications, limitations or restrictions of
such preferences and/or rights.
A written restriction on the transfer or registration of transfer of a
security of the Corporation, if permitted by law and noted conspicuously on the
certificate representing the security may be enforced against the holder of the
restricted security or any successor or transferee of the holder including an
executor, administrator, trustee, guardian or other fiduciary entrusted with
like responsibility for the person or estate of the holder. Unless noted
conspicuously on the certificate representing the security, a restriction, even
though permitted by law, is ineffective except against a person with actual
knowledge of the restriction. If the Corporation issues any shares that are not
registered under the Securities Act of 1933, as amended, or not registered or
qualified under the applicable state securities laws, the transfer of any such
shares shall be restricted substantially in accordance with the following
legend:
"THESE SHARES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933 OR UNDER ANY APPLICABLE STATE LAW. THEY MAY NOT BE
OFFERED FOR SALE, SOLD, TRANSFERRED OR PLEDGED WITHOUT (1)
REGISTRATION UNDER THE SECURITIES ACT OF 1933 AND ANY
APPLICABLE STATE LAW, OR (2) AT HOLDER'S EXPENSE, AN OPINION
(SATISFACTORY TO THE CORPORATION) OF COUNSEL (SATISFACTORY TO
THE CORPORATION) THAT REGISTRATION IS NOT REQUIRED."
Section 3. FACSIMILE SIGNATURES. Any and all signatures on the
certificate may be a facsimile. In case any officer, transfer agent or registrar
who has signed or whose facsimile signature has been placed upon such
certificate shall have ceased to be such officer, transfer agent or registrar
before such certificate is issued, it may be issued by the Corporation with the
same effect as if he were such officer, transfer agent or registrar at the date
of the issue.
11
<PAGE>
Section 4. LOST CERTIFICATES. The Corporation may issue a new
certificate of stock in place of any certificate therefore issued by it, alleged
to have been lost, stolen or destroyed, and the Corporation may require the
owner of the lost, stolen, or destroyed certificate, or his legal representative
to give the Corporation a bond sufficient to indemnify it against any claim that
may be made against it on account of the alleged loss, theft or destruction of
any such certificate or the issuance of such new certificate.
Section 5. TRANSFER OF SHARES. Upon surrender to the Corporation or the
transfer agent of the Corporation of a certificate for shares duly endorsed or
accompanied by proper evidence of succession, assignment or authority to
transfer, it shall be the duty of the Corporation to issue a new certificate to
the person entitled thereto, cancel the old certificate and record the
transaction upon its books.
Section 6. REGISTERED SHAREHOLDERS. The Corporation shall be entitled
to recognize the exclusive rights of a person registered on its books as the
owner of shares to receive dividends, and to vote as such owner, and shall not
be bound to recognize any equitable or other claim to or interest in such share
or shares on the part of any other person, whether or not it shall have express
or other notice thereof, except as otherwise provided by the laws of the State
of Florida.
Section 7. REDEMPTION OF CONTROL SHARES. As provided by the Florida
Business Corporation Act, if a person acquiring control shares of the
Corporation does not file an acquiring person statement with the Corporation,
the Corporation may, at the discretion of the Board of Directors, redeem the
control shares at the fair value thereof at any time during the 60-day period
after the last acquisition of such control shares. If a person acquiring control
shares of the Corporation files an acquiring person statement with the
Corporation, the control shares may be redeemed by the Corporation, at the
discretion of the Board of Directors, only if such shares are not accorded full
voting rights by the shareholders as provided by law.
ARTICLE SIX
GENERAL PROVISIONS
Section 1. DIVIDENDS. The Board of Directors may from time to time
declare, and the Corporation may pay, dividends on its outstanding shares in
cash, property, or its own shares pursuant to law and subject to the provisions
of the Articles of Incorporation.
Section 2. RESERVES. The Board of Directors may by resolution create a
reserve or reserves out of earned surplus for any proper purpose or purposes,
and may abolish any such reserve in the same manner.
12
<PAGE>
Section 3. CHECKS. All checks or demands for money and notes of the
Corporation shall be signed by such officer or officers or such other person or
persons as the Board of Directors may from time to time designate.
Section 4. FISCAL YEAR. The fiscal year of the Corporation shall end on
the Saturday nearest January 31 of each year, unless otherwise fixed by
resolution of the Board of Directors.
Section 5. SEAL. The corporate seal shall have inscribed thereon the
name and state of incorporation of the Corporation. The seal may be used by
causing it or a facsimile thereof to be impressed or affixed or in any other
manner reproduced.
ARTICLE SEVEN
AMENDMENT OF BYLAWS
These Bylaws may be altered, amended or repealed or new Bylaws may be
adopted at any meeting of the Board of Directors at which a quorum is present,
by the affirmative vote of a majority of the directors present at such meeting.
13
EXHIBIT 4.1
COMMON STOCK COMMON STOCK
NUMBER SHARES
SH
SUNGLASS HUT
INTERNATIONAL
SEE REVERSE FOR CERTAIN DEFINITIONS
CUSIP 86736F 10 6
INCORPORATED UNDER THE LAWS OF THE STATE OF FLORIDA
This Certifies that
is the Registered Holder of
FULLY PAID AND NONASSESSABLE SHARES OF COMMON STOCK, PAR VALUE $.01 PER SHARE,
OF
SUNGLASS HUT INTERNATIONAL, INC.
transferable on the books of the Corporation by the holder hereof in person or
by duly authorized attorney upon surrender of this Certificate properly
endorsed. This Certificate is not valid unless countersigned and registered by
the Transfer Agent and Registrar.
WITNESS the facsimile seal of the Corporation and the facsimile signatures
of its duly authorized officers.
Dated:
CORPORATE SEAL 1996 FLORIDA
/s/ [ILLEGIBLE] /s/ [ILLEGIBLE]
PRESIDENT AND CHAIRMAN OF THE BOARD AND
CHIEF EXECUTIVE OFFICER SECRETARY
Countersigned and Registered:
AMERICAN STOCK TRANSFER AND TRUST COMPANY
Transfer Agent and Registrar
BY
Authorized Signature
<PAGE>
SUNGLASS HUT INTERNATIONAL, INC.
THE CORPORATION WILL FURNISH TO ANY SHAREHOLDER UPON REQUEST AND WITHOUT CHARGE
A FULL STATEMENT OF (A) THE DESIGNATIONS, RELATIVE RIGHTS, PREFERENCES AND
LIMITATIONS APPLICABLE TO EACH CLASS OF CAPITAL STOCK AUTHORIZED TO BE ISSUED;
(B) THE VARIATIONS IN RIGHTS, PREFERENCES AND LIMITATIONS DETERMINED FOR EACH
SERIES AUTHORIZED TO BE ISSUED WITHIN EACH SUCH CLASS AND (C) THE AUTHORITY OF
THE BOARD OF DIRECTORS TO DETERMINE SUCH VARIATIONS FOR SUBSEQUENT SERIES.
The following abbreviations, when used in the inscription on the face of this
certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM -- as tenants in common
TEN ENT -- as tenants by the entireties
JT TEN -- as joint tenants with right of survivorship and not as tenants in
common
UNIF GIFT MIN ACT -- (Cust) _____ Custodian (Minor) _____ under Uniform Gifts to
Minors Act (State) _____________________
Additional abbreviations may also be used though not in the above list.
FOR VALUE RECEIVED ____________________ HEREBY SELLS, ASSIGNS AND TRANSFERS UNTO
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
- --------------------------------------------------------------------------------
(PLEASE PRINT OR TYPE NAME AND ADDRESS INCLUDING ZIP CODE OF ASSIGNEE)
________________________________ shares of the capital stock represented by the
within Certificate and does hereby irrevocable constitute and appoint __________
Attorney to transfer the said stock on the books of the within-named corporation
with full power of substitution in the premises.
DATED: __________________________ SIGNED: _____________________________________
SIGNED: _____________________________________
NOTICE: The signature(s) on this assignment
must conform in all respects with the name as
written upon the face of the certificate.
IMPORTANT: SIGNATURE(S) MUST BE GUARANTEED BY A PARTICIPANT IN A RECOGNIZED
SIGNATURE GUARANTEE PROGRAM.
EXHIBIT 4.7
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made
and entered into as of June 26, 1996 by and among Sunglass Hut International,
Inc., a Delaware corporation (the "Company"), and Morgan Stanley & Co.
Incorporated, Montgomery Securities, Alex. Brown & Sons Incorporated and Smith
Barney Inc. (the "Placement Agents") pursuant to the Placement Agreement, dated
as of June 20, 1996 (the "Placement Agreement"), between the Company and the
Placement Agents. In order to induce the Placement Agents to enter into the
Placement Agreement, the Company has agreed to provide the registration rights
set forth in this Agreement. The execution of this Agreement is a condition to
the closing under the Placement Agreement.
The Company agrees with the Placement Agents, (i) for their
benefit as Placement Agents and (ii) for the benefit of the holders from time to
time of the Notes (including the Placement Agents) and the holders from time to
time of the Common Stock issued upon conversion of the Notes (each of the
foregoing a "Holder" and together the "Holders"), as follows:
1. DEFINITIONS. Capitalized terms used herein without
definition shall have their respective meanings set forth in the Placement
Agreement. As used in this Agreement, the following terms shall have the
following meanings:
AFFILIATE: "Affiliate" means, with respect to any specified
person, (i) any other person directly or indirectly controlling or
controlled by, or under direct or indirect common control with, such
specified person or (ii) any officer or director of such other person.
For purposes of this definition, the term "control" (including the
terms "controlled by" and "under common control with") of a person
means the possession, direct or indirect, of the power (whether or not
exercised) to direct or cause the direction of the management and
policies of a person, whether through the ownership of voting
securities, by contract, or otherwise.
BUSINESS DAY: Each Monday, Tuesday, Wednesday, Thursday and
Friday that is not a day on which banking institutions in The City of
New York are authorized or obligated by law or executive order to
close.
COMMON STOCK: The shares of common stock, $.01 par value per
share, of the Company and any other shares of common stock as may
constitute "Common Stock" for purposes of the Indenture, in each case,
as issuable or issued upon conversion of the Notes.
DAMAGES ACCRUAL PERIOD: See Section 2(e) hereof.
<PAGE>
DAMAGES PAYMENT DATE: Each of the semi-annual interest
payment dates provided in the Indenture.
DEFERRAL PERIOD: See Section 2(d) hereof.
EFFECTIVENESS PERIOD: The period commencing with the date
hereof and ending on the earlier of the expiration of the time period
referred to in Rule 144(k) (taking into account the provisions of Rule
144(d) under the Securities Act) and the date that all Registrable
Securities have ceased to be Registrable Securities.
EVENT: See Section 2(e) hereof.
EVENT DATE: See Section 2(e) hereof.
EXCHANGE ACT: The Securities Exchange Act of 1934, as
amended, and the rules and regulations of the SEC promulgated
thereunder.
FILING DATE: See Section 2(a) hereof.
HOLDER: See the second paragraph of this Agreement.
INDENTURE: The Indenture, dated as of June 26, 1996, between
the Company and The Bank of New York, as Trustee, pursuant to which the
Notes are being issued, as amended or supplemented from time to time in
accordance with the terms thereof.
INITIAL PURCHASERS: Morgan Stanley & Co. Incorporated,
Montgomery Securities, Alex. Brown & Sons Incorporated and Smith
Barney Inc.
INITIAL SHELF REGISTRATION: See Section 2(a) hereof.
LIQUIDATED DAMAGES: See Section 2(e) hereof.
NOTES: The 5 1/4% Convertible Senior Subordinated Notes due
2003 of the Company being issued and sold pursuant to the Placement
Agreement and the Indenture.
NOTICE HOLDER: See the second paragraph of Section 2(d)(i)
hereof.
PLACEMENT AGREEMENT: See the first paragraph of this
Agreement.
-2-
<PAGE>
PROSPECTUS: The prospectus included in any Registration
Statement (including, without limitation, a prospectus that discloses
information previously omitted from a prospectus filed as part of an
effective registration statement in reliance upon Rule 430A promulgated
under the Securities Act), as amended or supplemented by any amendment
or prospectus supplement, including post-effective amendments, and all
material incorporated by reference or deemed to be incorporated by
reference in such Prospectus.
RECORD HOLDER: (i) with respect to any Damages Payment Date
relating to any Note as to which any such Liquidated Damages have
accrued, the registered holder of such Note on the record date with
respect to the interest payment date under the Indenture on which such
Damages Payment Date shall occur and (ii) with respect to any Damages
Payment Date relating to any Common Stock as to which any such
Liquidated Damages have accrued, the registered holder of such Common
Stock 15 days prior to the next succeeding Damages Payment Date.
REGISTRABLE SECURITIES: (A) The Common Stock of the Company
into which the Notes are convertible or converted, whether or not such
Notes have been converted (and associated rights), and at all times
subsequent thereto, and any Common Stock issued with respect thereto
upon any stock dividend, split or similar event until, in the case of
any such Common Stock, (i) it is effectively registered under the
Securities Act and disposed of in accordance with the Registration
Statement covering it, (ii) it is saleable by the holder thereof
pursuant to Rule 144(k) or (iii) it is sold to the public pursuant to
Rule 144, and, as a result of the event or circumstance described in
any of the foregoing clauses (i) through (iii), the legends with
respect to transfer restrictions required under the Indenture (other
than any such legends required solely as the consequences of the fact
that such Common Stock (or the Notes upon the conversion of which such
Common Stock was issued or is issuable) is owned by, or was previously
owned by, the Company or an Affiliate of the Company) are removed or
removable in accordance with the terms of the Indenture; and (B) the
Notes, until, in the case of any such Note, (i) it is converted into
shares of Common Stock in accordance with the terms of the Indenture,
(ii) it is effectively registered under the Securities Act and disposed
of in accordance with the Registration Statement covering it, (iii) it
is saleable by the holder thereof pursuant to Rule 144(k) or (iv) it is
sold to the public pursuant to Rule 144, and, as a result of the event
or circumstance described in any of the foregoing clauses (ii) through
(iv), the legends with respect to transfer restrictions required under
the Indenture (other than any such legends required solely as the
consequences of the fact that such Note is owned by, or was previously
owned by, the Company or an Affiliate of the Company) are removed or
removable in accordance with the terms of the Indenture.
-3-
<PAGE>
REGISTRATION EXPENSES: See Section 5 hereof.
REGISTRATION STATEMENT: Any registration statement of the
Company which covers any of the Registrable Securities pursuant to the
provisions of this Agreement, including the Prospectus, amendments and
supplements to such registration statement, including post-effective
amendments, all exhibits, and all material incorporated by reference or
deemed to be incorporated by reference in such registration statement.
REQUISITE INFORMATION: See Section 2(d) hereof.
RULE 144: Rule 144 under the Securities Act, as such Rule may
be amended from time to time, or any similar rule or regulation
hereafter adopted by the SEC.
RULE 144(K): Rule 144(k) under the Securities Act, as such
Rule may be amended from time to time, or any similar rule or
regulation hereafter adopted by the SEC.
RULE 144A: Rule 144A under the Securities Act, as such Rule
may be amended from time to time, or any similar rule or regulation
hereafter adopted by the SEC.
SEC: The Securities and Exchange Commission.
SECURITIES ACT: The Securities Act of 1933, as amended, and
the rules and regulations promulgated by the SEC thereunder.
SELLING PERIOD: See the second paragraph of Section 2(d)(i)
hereof.
SHELF REGISTRATION: See Section 2(a) hereof.
SPECIAL COUNSEL: Such counsel as shall be specified by the
Holders of a majority of the Registrable Securities, the fees and
expenses of which will be paid by the Company pursuant to Section 5
hereof.
SUBSEQUENT SHELF REGISTRATION: See Section 2(b) hereof.
TIA: The Trust Indenture Act of 1939, as amended.
TRUSTEE: The Trustee under the Indenture.
-4-
<PAGE>
2. SHELF REGISTRATION.
(a) SHELF REGISTRATION. The Company shall prepare and file
with the SEC, as soon as practicable but in any event on or prior to the date
ninety (90) days following the latest date of original issuance of the Notes
(the "Filing Date"), a Registration Statement for an offering to be made on a
continuous basis pursuant to Rule 415 under the Securities Act (a "Shelf
Registration") registering the resale from time to time by the Holders thereof
of all of the Registrable Securities (the "Initial Shelf Registration"). The
Initial Shelf Registration shall be on Form S-1 or S-3 (as appropriate) or
another appropriate form permitting registration of the Registrable Securities
for resale by the Holders in the manner or manners designated by the Company or,
at the request of the Holders, in the manner or manners designated by them.
The Company shall use its reasonable efforts to cause the
Initial Shelf Registration to be declared effective under the Securities Act as
soon as practicable and to keep the Initial Shelf Registration continuously
effective under the Securities Act until the earlier of the expiration of the
Effectiveness Period or the date a Subsequent Shelf Registration (as defined
below) covering all of the Registrable Securities has been declared effective
under the Securities Act.
(b) If the Initial Shelf Registration or any Subsequent Shelf
Registration, as defined below, ceases to be effective for any reason as a
result of the issuance of a Stop order by the SEC at any time during the
Effective Period, the Company shall use its reasonable efforts to obtain the
prompt withdrawal of any order suspending the effectiveness thereof, and in any
event shall within thirty (30) days of such cessation of effectiveness amend the
Shelf Registration in a manner reasonably expected to obtain the withdrawal of
the order suspending the effectiveness thereof, or file an additional Shelf
Registration covering all of the Registrable Securities (a "Subsequent Shelf
Registration"). If a Subsequent Shelf Registration is filed, the Company shall
use its reasonable efforts to cause such Subsequent Shelf Registration to be
declared effective as soon as practicable after such filing and to keep such
Registration Statement continuously effective until the end of the Effectiveness
Period.
(c) The Company shall supplement and amend the Shelf
Registration if required by the rules, regulations or instructions applicable to
the registration form used by the Company for such Shelf Registration, if
required by the Securities Act or if reasonably requested by the Initial
Purchasers or by the Trustee on behalf of a majority of the Holders of the
Registrable Securities covered by such Registration Statement.
(d) Each Holder of Registrable Securities agrees that if such
Holder wishes to sell its Registrable Securities pursuant to a Shelf
Registration and related
-5-
<PAGE>
Prospectus, it will do so only in accordance with this Section 2(d). Each Holder
of Registrable Securities agrees to give written notice to the Company at least
three Business Days prior to any intended distribution of Registrable Securities
under the Shelf Registration, which notice shall specify the date on which such
Holder intends to begin such distribution and any information with respect to
such Holder and the intended distribution of Registrable Securities by such
Holder as may be required to amend the Registration Statement or supplement the
related Prospectus with respect to such intended distribution of Registrable
Securities by such Holder (the "Requisite Information"). In the event the Holder
fails to provide the Requisite Information in its initial notice of its
intention to distribute the Registrable Securities pursuant to the Registration
Statement, the Company will promptly request such Holder to provide such
Requisite Information. As soon as practicable after the date such notice is
provided, and in any event within two Business Days after such date, the Company
shall either:
(i) (A) If necessary, prepare and file with the
Commission a post-effective amendment to the Shelf Registration or a
supplement to the related Prospectus or a supplement or amendment to
any document incorporated therein by reference or file any other
required document so that such Registration Statement will not contain
an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading, and so that, as thereafter delivered to
purchasers of the Registrable Securities being sold thereunder, such
Prospectus will not contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading; (B) provide the Notice
Holders (as defined below) copies of any documents filed pursuant to
Section 2(d)(i)(A); and (C) inform each Notice Holder that the Company
has complied with its obligations in Section 2(d)(i)(A) (or that, if
the Company has filed a post-effective amendment to the Shelf
Registration which has not yet been declared effective, the Company
will notify each Notice Holder to that effect, will use its reasonable
efforts to secure the effectiveness of such post-effective amendment
and will immediately notify each Notice Holder when the amendment has
become effective).
Each Holder who has given notice of intention to
distribute such Holder's Registrable Securities in accordance with this
Section 2(d) (a "Notice Holder") will sell all or any such Registrable
Securities pursuant to the Shelf Registration and related Prospectus
only during the 45-day period commencing with the date on which the
Company gives such notice, pursuant to Section 2(d)(i)(C), that the
Registration Statement and Prospectus may be used for such purpose
(such 45-day period is referred to as a "Selling Period"). The Notice
Holders will not sell any Registrable Securities pursuant to such
Registration
-6-
<PAGE>
Statement or Prospectus after such Selling Period without giving a new
notice of intention to sell pursuant to Section 2(d) hereof and
receiving a further notice from the Company pursuant to Section
2(d)(i)(C) hereof.
(ii) In the event (A) of the happening of any event
of the kind described in Section 3(c)(ii), 3(c)(iii), 3(c)(iv), 3(c)(v)
or 3(c)(vi) hereof or (B) that, in the judgment of the Company, it is
advisable to suspend use of the Prospectus for a discrete period of
time due to pending material corporate developments or similar material
events that have not yet been publicly disclosed and as to which the
Company believes public disclosure will be prejudicial to the Company,
the Company shall deliver a certificate in writing, signed by an
authorized executive officer of the Company, to the Notice Holders and
the Special Counsel _________________________ to the effect of the
foregoing and, upon receipt of such certificate, each such Notice
Holder's Selling Period will not commence until such Notice Holder's
receipt of copies of the supplemented or amended Prospectus provided
for in Section 2(d)(i)(A) hereof, or until it is advised in writing by
the Company that the Prospectus may be used, and it has received copies
of any additional or supplemental filings that are incorporated or
deemed incorporated by reference in such Prospectus. The Company will
use its reasonable efforts to ensure that the use of the Prospectus may
be resumed, and the Selling Period will commence, as soon as
practicable and, in the case of a pending development or event referred
to in Section 2(d)(ii)(B) hereof, as soon as the earlier of (x) public
disclosure of such pending material corporate development or similar
material event or (y) the date upon which, in the judgment of the
Company, public disclosure of such material corporate development or
similar material event would not be prejudicial to the Company.
Notwithstanding the foregoing, the Company shall not under any
circumstances be entitled to exercise its right under this Section
2(d)(ii) to defer the commencement of a Selling Period except as
follows: the Company may defer the commencement of a Selling Period in
accordance with this Section 2(d)(ii) for a period not to exceed 30
days in any three-month period, or not to exceed an aggregate of 60
days in any 12-month period, and the period in which a Selling Period
is suspended shall not exceed fifteen (15) days unless the Company
shall deliver to such Notice Holders a second notice to the effect set
forth above, which shall have the effect of extending the period during
which such Selling Period is deferred by up to an additional fifteen
(15) days, or such shorter period of time as is specified in such
second notice. In no event shall the Company be permitted to extend the
period during which such Selling Period is deferred (a "Deferral
Period") beyond such thirty (30) day period from and after the date a
Notice Holder provides notice to the Company in accordance with this
Section 2(d) of its intention to distribute Registrable Securities.
-7-
<PAGE>
(e) The parties hereto agree that the Holders of Registrable
Securities will suffer damages, and that it would not be feasible to ascertain
the extent of such damages with precision, if (i) the Initial Shelf Registration
has not been filed on or prior to the Filing Date, (ii) prior to the end of the
Effectiveness Period, the SEC shall have issued a stop order suspending the
effectiveness of the Shelf Registration or proceedings have been initiated with
respect to the Shelf Registration under Section 8(d) or 8(e) of the Securities
Act or (iii) the aggregate number of days in any Deferral Period exceeds the
number permitted pursuant to Section 2(d)(ii) hereof (each of the events of a
type described in any of the foregoing clauses (i) through (iii) are
individually referred to herein as an "Event," and the Filing Date in the case
of clause (i), the date on which the effectiveness of the Shelf Registration has
been suspended or proceedings with respect to the Shelf Registration under
Section 8(d) or 8(e) of the Securities Act have been commenced in the case of
clause (ii), and the date on which the number of days in any Deferral Period
exceeds the number permitted by Section 2(d)(ii) hereof in the case of clause
(iii), being referred to herein as an "Event Date"). Events shall be deemed to
continue until the date of the termination of such Event, which shall be the
following dates with respect to the respective types of Events: the date the
Initial Registration Statement is filed in the case of an Event of the type
described in clause (i), the date that all stop orders suspending effectiveness
of the Shelf Registration have been removed and the proceedings initiated with
respect to the Shelf Registration under Section 8(d) or 8(e) of the Securities
Act have terminated, as the case may be, in the case of Events of the types
described in clause (ii), and termination of the Deferral Period which caused
the aggregate number of days in any Deferral Period to exceed the number
permitted by Section 2(d)(ii) to be exceeded in the case of Events of the type
described in clause (iii).
Accordingly, upon the occurrence of any Event and until such
time as there are no Events which have occurred and are continuing (a "Damages
Accrual Period"), commencing on the Event Date on which such Damages Accrual
Period began, the Company agrees to pay, as liquidated damages, and not as a
penalty, an additional amount (the "Liquidated Damages"): (A)(i) to each holder
of a Note that is a Notice Holder, accruing at a rate equal to one-half of one
percent per annum (50 basis points) on the aggregate principal amount of Notes
held by such Notice Holder and (ii) to each holder of Common Stock that is a
Notice Holder, accruing at a rate equal to one-half of one percent per annum (50
basis points) calculated on an amount equal to the product of (x) the
then-applicable Conversion Price (as defined in the Indenture) times (y) the
number of shares of Common Stock held by such holder; and (B) if the Damages
Accrual Period continues for a period in excess of thirty (30) days from the
Event Date, from and after the end of such thirty (30) day period until such
time as there are no Events which have occurred and are continuing, (i) to each
holder of a Note (whether or not a Notice Holder), accruing at a rate equal to
one-half of one percent per annum (50 basis points) on the aggregate principal
amount of Notes held by such holder and (ii) to each holder of
-8-
<PAGE>
Common Stock (whether or not a Notice Holder), accruing at a rate equal to
one-half of one percent per annum (50 basis points) calculated on an amount
equal to the product of (x) the then-applicable Conversion Price (as defined in
the Indenture) times (y) the number of shares of Common Stock held by such
holder. Notwithstanding the foregoing, no Liquidated Damages shall accrue under
clause (A) of the preceding sentence during any period for which Liquidated
Damages accrue under Clause (B) of the preceding sentence or as to any
Registrable Securities from and after the earlier of (x) the date such
securities are no longer Registrable Securities and (y) expiration of the
Effectiveness Period. The rate of accrual of the Liquidated Damages with respect
to any period shall not exceed the rate provided for in this paragraph
notwithstanding the occurrence of multiple concurrent Events.
The Company shall pay the Liquidated Damages due on any Notes
or Common Stock by depositing with the Trustee under the Indenture (with respect
to payments to be made to holders of Notes) or with the Registrar of the Common
Stock (with respect to payments to be made to holders of Common Stock), in
trust, for the benefit of the holders of Notes or Common Stock or Notice
Holders, as the case may be, entitled thereto, at least one Business Day prior
to the applicable Damages Payment Date, sums sufficient to pay the Liquidated
Damages accrued or accruing since the last preceding Damages Payment Date
through such Damages Payment Date. The Liquidated Damages due shall be paid by
the Company to the Record Holders on each Damages Payment Date by wire transfer
of immediately available funds to the accounts specified by them or by mailing
checks to their registered addresses as they appear in the Note register (as
defined in the Indenture), in the case of the Notes, and in the register of the
Company for the Common Stock, in the case of the Common Stock, if no such
accounts have been specified on or before the Damage Payment Date; PROVIDED,
HOWEVER, that any Liquidated Damages accrued with respect to any Note or portion
thereof called for redemption on a redemption date, or redeemed or repurchased
in connection with a Fundamental Change (as defined in the Indenture) on a
repurchase date, or converted into Common Stock on a conversion date prior to
the Damages Payment Date, shall, in any such event, be paid instead to the
holder who submitted such Note or portion thereof for redemption, repurchase or
conversion on the applicable redemption date, repurchase date or conversion
date, as the case may be, on such date (or promptly following the conversion
date, in the case of conversion of a Note). The Trustee or Registrar of Common
Stock, as applicable, shall be entitled, on behalf of the holders of the Notes,
holders of Common Stock and Notice Holders, to seek any available remedy for the
enforcement of this Agreement, including for the payment of such Liquidated
Damages. Notwithstanding the foregoing, the parties agree that the sole damages
payable for a violation of the terms of this Agreement with respect to which
Liquidated Damages are expressly provided shall be such Liquidated Damages.
Nothing shall preclude a Notice Holder or Holder of Registrable Securities from
pursuing or obtaining specific
-9-
<PAGE>
performance or other equitable relief with respect to this Agreement, in
addition to the payment of the Liquidated Damages.
All of the Company's obligations set forth in this Section
2(e) which are outstanding with respect to any Registrable Securities at the
time such security ceases to be a Registrable Security shall survive until such
time as all such obligations with respect to such security have been satisfied
in full (notwithstanding termination of this Agreement pursuant to Section
8(o)).
The parties hereto agree that the Liquidated Damages provided
for in this Section 2(e) constitute a reasonable estimate of the damages that
may be incurred by Holders of Registrable Securities (other than the Initial
Purchasers) by reason of the failure of the Shelf Registration to be filed or
declared effective or unavailable (absolutely or as a practical matter) for
effecting resales of Registrable Securities, as the case may be, in accordance
with the provisions hereof.
3. REGISTRATION PROCEDURES. In connection with the Company's
registration obligations under Section 2 hereof, the Company shall effect such
registrations to permit the sale of the Registrable Securities in accordance
with the intended method or methods of disposition thereof, and pursuant thereto
the Company shall as expeditiously as possible:
(a) As described in Section 2(a), prepare and file with the
SEC a Registration Statement or Registration Statements on any appropriate form
under the Securities Act available for the sale of the Registrable Securities by
the Holders thereof in accordance with the intended method or methods of
distribution thereof, and use its reasonable efforts to cause each such
Registration Statement to become effective and remain effective as provided
herein; PROVIDED, that before filing any such Registration Statement or
Prospectus or any amendments or supplements thereto (other than documents that
would be incorporated or deemed to be incorporated therein by reference and that
the Company is required by applicable securities laws or stock exchange
requirements to file), the Company shall furnish to the Initial Purchasers and
the Special Counsel _______________________ of such offering, if any, copies of
all such documents proposed to be filed, which documents will be subject to the
review of the Initial Purchasers and the Special Counsel, and the Company shall
not file any such Registration Statement or amendment thereto or any Prospectus
or any supplement thereto (other than such documents which, upon filing, would
be incorporated or deemed to be incorporated by reference therein and that the
Company is required by applicable securities laws or stock exchange requirements
to file) to which the Holders of a majority of the Registrable Securities
covered by such Registration Statement, the Initial Purchasers or the Special
Counsel shall reasonably object in writing within two full Business Days.
-10-
<PAGE>
(b) Subject to Section 3(a), (i) prepare and file with the SEC
such amendments and post-effective amendments to each Registration Statement as
may be necessary to keep such Registration Statement continuously effective
throughout the Effectiveness Period, (ii) cause the related Prospectus to be
supplemented by any required Prospectus supplement, and as so supplemented to be
filed pursuant to Rule 424 (or any similar provisions then in force) under the
Securities Act, and (iii) comply with the provisions of the Securities Act with
respect to the disposition of all securities covered by such Registration
Statement and Prospectus during the applicable period in accordance with the
intended methods of disposition by the sellers thereof set forth in such
Registration Statement as so amended or such Prospectus as so supplemented.
(c) Notify the selling Holders, the Initial Purchasers and the
Special Counsel, ___________________ promptly, and (if requested by any such
person) confirm such notice in writing, (i) when a Prospectus, any Prospectus
supplement, a Registration Statement or a post-effective amendment to a
Registration Statement has been filed with the SEC, and, with respect to a
Registration Statement or any post-effective amendment, when the same has become
effective, (ii) of any request by the SEC or any other federal or state
governmental authority for amendments or supplements to a Registration Statement
or related Prospectus or for additional information, (iii) of the issuance by
the SEC or any other federal or state governmental authority of any stop order
suspending the effectiveness of a Registration Statement or the initiation or
threatening of any proceedings for that purpose, (iv) of the receipt by the
Company of any notification with respect to the suspension of the qualification
or exemption from qualification of any of the Registrable Securities for sale in
any jurisdiction or the initiation or threatening of any proceeding for such
purpose, (v) of the existence of any fact or happening of any event which makes
any statement of a material fact in such Registration Statement or related
Prospectus or any document incorporated or deemed to be incorporated therein by
reference untrue or which would require the making of any changes in the
Registration Statement or Prospectus in order that, in the case of the
Registration Statement, it will not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, and that in the case of
the Prospectus, it will not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading, and (vi) of the Company's determination that a
post-effective amendment to a Registration Statement would be appropriate.
(d) Use its reasonable efforts to obtain the withdrawal of any
order suspending the effectiveness of a Registration Statement, or the lifting
of any suspension of the qualification (or exemption from qualification) of any
of the Registrable Securities for sale in any jurisdiction, at the earliest
possible moment.
-11-
<PAGE>
(e) If reasonably requested by the Initial Purchasers or the
Holders of a majority of the Registrable Securities being sold, (i) promptly
incorporate in a Prospectus supplement or post-effective amendment to a
Registration Statement such information as the Initial Purchasers, the Special
Counsel, ___________________ or such Holders, in connection with any offering of
Registrable Securities, agree should be included therein as required by
applicable law, and (ii) make all required filings of such Prospectus supplement
or such post-effective amendment as soon as practicable after the Company has
received notification of the matters to be incorporated in such Prospectus
supplement or post-effective amendment; PROVIDED, that the Company shall not be
required to take any actions under this Section 3(e) that are not, in the
reasonable opinion of counsel for the Company, in compliance with applicable
law.
(f) Furnish to each selling Holder, the Initial Purchasers and
the Special Counsel, _______________________ without charge, at least one
conformed copy of the Registration Statement or Statements and any amendment
thereto, including financial statements but excluding schedules, all documents
incorporated or deemed to be incorporated therein by reference and all exhibits
(unless requested in writing by such Holder, counsel, Initial Purchasers or
underwriter).
(g) Deliver to each selling Holder, the Initial Purchasers and
the Special Counsel and each Managing Underwriter, if any, in connection with
any offering of Registrable Securities, without charge, as many copies of the
Prospectus or Prospectuses relating to such Registrable Securities (including
each preliminary prospectus) and any amendment or supplement thereto as such
persons may reasonably request; and the Company hereby consents to the use of
such Prospectus or each amendment or supplement thereto by each of the selling
Holders of Registrable Securities and the underwriters, if any, in connection
with any offering and sale of the Registrable Securities covered by such
Prospectus or any amendment or supplement thereto.
(h) Prior to any public offering of Registrable Securities, to
register or qualify or cooperate with the selling Holders, ___________________
and the Special Counsel in connection with the registration or qualification (or
exemption from such registration or qualification) of such Registrable
Securities for offer and sale under the securities or Blue Sky laws of such
jurisdictions within the United States as any selling Holder
__________________________ reasonably requests in writing, keep each such
registration or qualification (or exemption therefrom) effective during the
period such Registration Statement is required to be kept effective and do any
and all other acts or things necessary or advisable to enable the disposition in
such jurisdictions of the Registrable Securities covered by the applicable
Registration Statement; PROVIDED, that the Company shall not be required to (A)
qualify generally to do business in any jurisdiction where it is not then so
qualified or (B) take any action that would subject it to
-12-
<PAGE>
general service of process in suits or to taxation in any such jurisdiction
where it is not then so subject.
(i) Cause the Registrable Securities covered by the applicable
Registration Statement to be registered with or approved by such other
governmental agencies or authorities within the United States, except as may be
required solely as a consequence of the nature of such selling Holder, in which
case the Company will cooperate in all reasonable respects with the filing of
such Registration Statement and the granting of such approvals as may be
necessary to enable the selling Holder or Holders thereof __________________ to
consummate the disposition of such Registrable Securities.
(j) During any Selling Period (other than during a Deferral
Period), immediately upon the existence of any fact or the occurrence of any
event as a result of which a Registration Statement shall contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading, or a
Prospectus shall contain any untrue statements of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, promptly prepare and file (subject to the proviso in
Section 3(a)) a post-effective amendment to each Registration Statement or a
supplement to the related Prospectus or any document incorporated therein by
reference or file any other required document (such as a Current Report on Form
8-K) that would be incorporated by reference into the Registration Statement so
that the Registration Statement shall not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading, and so that the
Prospectus will not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, as thereafter delivered to the purchasers of the
Registrable Securities being sold thereunder, and, in the case of a
post-effective amendment to a Registration Statement, use its reasonable efforts
to cause it to become effective as soon as practicable.
-13-
<PAGE>
(l) If requested in connection with a disposition of
Registrable Securities pursuant to a Registration Statement, make available for
inspection by a representative of the Holders of Registrable Securities being
sold, ________________________ and any attorney or accountant retained by such
selling Holders or underwriter, financial and other records, pertinent corporate
documents and properties of the Company and its subsidiaries, and cause the
executive officers, directors and employees of the Company and its subsidiaries
to supply all information reasonably requested by any such representative,
attorney or accountant in connection with such disposition, in any case subject
to reasonable assurances by each such person that such information will only be
used in connection with matters relating to such Registration Statement;
PROVIDED, HOWEVER, that such persons shall first agree in writing with the
Company that any information that is reasonably and in good faith designated by
the Company in writing as confidential at the time of delivery of such
information shall be
-14-
<PAGE>
kept confidential by such persons, unless (i) disclosure of such information is
required by court or administrative order or is necessary to respond to
inquiries of regulatory authorities, (ii) disclosure of such information is
required by law (including any disclosure requirements pursuant to Federal
securities laws in connection with the filing of any Registration Statement or
the use of any Prospectus referred to in this Agreement), (iii) such information
becomes generally available to the public other than as a result of a disclosure
or failure to safeguard by any such person or (iv) such information becomes
available to any such person from a source other than the Company and such
source is not bound by a confidentiality agreement.
(m) Comply with all applicable rules and regulations of the
SEC and make generally available to the holders of its securities earning
statements (which need not be audited) satisfying the provisions of Section
11(a) of the Securities Act and Rule 158 thereunder (or any similar rule
promulgated under the Securities Act) no later than 45 days after the end of any
12-month period (or 90 days after the end of any 12-month period if such period
is a fiscal year) (i) commencing at the end of any fiscal quarter in which
Registrable Securities are sold to underwriters in a firm commitment or best
efforts underwritten offering, and (ii) if not sold to underwriters in such an
offering, commencing on the first day of the first fiscal quarter of the Company
commencing after the effective date of a Registration Statement, which
statements shall cover said 12-month periods.
(n) Cooperate with the selling Holders of Registrable
Securities to facilitate the timely preparation and delivery of certificates
representing Registrable Securities to be sold and not bearing any restrictive
legends; and enable such Registrable Securities to be in such denominations and
registered in such names as such Holders may request.
(o) Provide the Trustee under the Indenture and the transfer
agent for the Common Stock with printed certificates for the Registrable
Securities which are in a form eligible for deposit with The Depository Trust
Company.
(p) Cause all Registrable Securities covered by the
Registration Statement to be listed and registered on a national securities
exchange or quoted on the automated quotation system of a national securities
association (and, in the case of the Registrable Securities that are Common
Stock, to be listed on each securities exchange or quotation system on which any
of the Company's "Common Stock," as that term is defined in the Indenture, is
then listed) no later than the date the Registration Statement is declared
effective and, in connection therewith, to the extent applicable, to make such
filings under the Exchange Act (e.g., the filing of a Registration Statement on
Form 8-A) and to have such filings declared effective thereunder.
-15-
<PAGE>
(q) Cooperate and assist in any filings required to be made
with the National Association of Securities Dealers, Inc.
4. HOLDER'S OBLIGATIONS. Each Holder agrees, by acquisition of
the Notes and Registrable Securities, that no Holder of Registrable Securities
shall be entitled to sell any of such Registrable Securities pursuant to a
Registration Statement or to receive a Prospectus relating thereto, unless such
Holder has furnished the Company with the notice required pursuant to Section
2(d) hereof such other information regarding such Holder and the distribution of
such Registrable Securities as may be required to be included in the
Registration Statement or the Prospectus or as the Company may from time to time
reasonably request. The Company may exclude from such registration the
Registrable Securities of any Holder who does not furnish such information
provided above for so long as such information is not so furnished. Each Holder
of Registrable Securities as to which any Registration Statement is being
effected agrees promptly to furnish to the Company all information required to
be disclosed in order to make the information previously furnished to the
Company by such Holder not misleading. Any sale of any Registrable Securities by
any Holder shall constitute a representation and warranty by such Holder that
the information relating to such Holder and its plan of distribution is as set
forth in the Prospectus delivered by such Holder in connection with such
deposition, that such Prospectus does not as of the time of such sale contain
any untrue statement of a material fact relating to such Holder or its plan of
distribution and that such Prospectus does not as of the time of such sale omit
to state any material fact relating to such Holder or its plan of distribution
necessary to make the statements in such Prospectus, in light of the
circumstances under which they were made, not misleading.
5. REGISTRATION EXPENSES. All fees and expenses incident to
the Company's performance of or compliance with this Agreement shall be borne by
the Company whether or not any of the Registration Statements becomes effective.
Such fees and expenses shall include, without limitation, (i) all registration
and filing fees (including, without limitation, fees and expenses (x) with
respect to filings required to be made with the SEC or the National Association
of Securities Dealers, Inc. and (y) relating to compliance with federal
securities or Blue Sky laws (including, without limitation, fees and
disbursements of Special Counsel in connection with Blue Sky qualifications of
the Registrable Securities under laws of such jurisdictions as may be required
under Section 3(h) hereof or as the _____________________ Holders or a majority
of the Registrable Securities being sold may designate)), (ii) all expenses
incurred in connection with the preparation, word processing, printing and
distribution of any Registration Statement, any Prospectus, any amendments or
supplements thereto, any underwriting agreements, certificates for Registrable
Securities in a form eligible for deposit with The Depository Trust Company,
securities sales agreements and other documents relating to the performance of
and compliance with this Agreement, (iii) the reasonable fees and disbursements
of the Trustee and its counsel and of the registrar and transfer agent for the
-16-
<PAGE>
Common Stock, (iv) messenger, telephone and delivery expenses relating to the
performance of the Company's obligations hereunder, (v) reasonable fees and
disbursements of counsel for the Company and the Special Counsel in connection
with the Shelf Registration (PROVIDED, that the Company shall not be liable for
the fees and expenses of more than one separate firm for all parties
participating in any transaction hereunder), (vi) fees and disbursements of all
independent certified public accountants referred to in Section 3(k)(iii) hereof
(including the expenses of any special audit and "cold comfort" letters required
by or incident to such performance) and (vii) Securities Act liability insurance
obtained by the Company in its sole discretion. In addition, the Company shall
pay its internal expenses (including, without limitation, all salaries and
expenses of its officers and employees performing legal or accounting duties),
the expense of any annual audit, the fees and expenses incurred in connection
with the listing of the securities to be registered on any securities exchange
on which similar securities issued by the Company are then listed and the fees
and expenses of any person, including special experts, retained by the Company.
Notwithstanding the provisions of this Section 5, each seller of Registrable
Securities shall pay all selling expenses and all registration expenses to the
extent that the Company is prohibited by applicable Blue Sky laws from paying
such expenses for on behalf of such seller of Registrable Securities.
6. INDEMNIFICATION.
(a) INDEMNIFICATION BY THE COMPANY. The Company agrees to
indemnify and hold harmless each Initial Purchaser, each Holder and each person,
if any, who controls any Initial Purchaser or any Holder within the meaning of
either Section 15 of the Securities act or Section 20(a) of the Exchange Act, or
is under common control with, or is controlled by, any Initial Purchaser or any
Holder, from and against all losses, claims, damages and liabilities (including,
without limitation, any legal or other expenses reasonably incurred by any
Initial Purchaser, any Holder or any such controlling or affiliated person in
connection with defending or investigating any such action or claim)
(collectively, "Losses") caused by any untrue statement or alleged untrue
statement of a material fact contained in any Registration Statement (or any
amendment thereto) pursuant to which Registrable Securities were registered
under the Securities Act, including all documents incorporated therein by
reference, or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, or caused by any untrue statement or alleged untrue
statement of a material fact contained in any Prospectus (as amended or
supplemented), or caused by any omission or alleged omission to state therein a
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; PROVIDED, that the
Company shall not be liable to any Holder of Registrable Securities (or any
person controlling such Holder) to the extent that any such Losses arise out of
or are based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in any preliminary prospectus if either
-17-
<PAGE>
(A)(i) such Holder failed to send or deliver a copy of the Prospectus with or
prior to the delivery of written confirmation of the sale by such Holder to the
person asserting the claims from which such Losses arise and (ii) the Prospectus
would have corrected such untrue statement or alleged untrue statement or such
omission or alleged omission, or (B)(x) such untrue statement or alleged untrue
statement, omission or alleged omission is corrected in an amendment or
supplement to the Prospectus and (y) having previously been furnished by or on
behalf of the Company with copies of the Prospectus as so amended or
supplemented, such Holder thereafter fails to deliver such Prospectus as so
amended or supplemented, with or prior to the delivery of written confirmation
of the sale of a Registrable Security to the person asserting the claim from
which such Losses arise.
(b) INDEMNIFICATION BY HOLDERS. Each Holder agrees, and such
agreement shall be evidenced by the Holder delivering to the Company the notice
described in Section 2(d) hereof, severally and not jointly, to indemnify and
hold harmless the Company, the Initial Purchasers and the other selling Holders,
and each of their respective directors, officers who sign the Registration
Statement and each person, if any, who controls the Company, the Initial
Purchasers and any other selling Holder within the meaning of either Section 15
of the Securities Act or Section 20(a) of the Exchange Act, from and against all
Losses arising out of or based upon any untrue statement of a material fact
contained in any Registration Statement, Prospectus or preliminary prospectus or
arising out of or based upon any omission of a material fact required to be
stated therein or necessary to make the statements therein not misleading, to
the extent, but only to the extent, that such untrue statement or omission is
contained in any information relating to such Holder so furnished in writing by
such Holder to the Company expressly for use in such Registration Statement or
Prospectus. In no event shall the liability of any selling Holder of Registrable
Securities hereunder be greater in amount than the dollar amount of the proceeds
received by such Holder upon the sale of the Registrable Securities giving rise
to such indemnification obligation.
(c) CONDUCT OF INDEMNIFICATION PROCEEDINGS. In case any
proceeding (including any governmental investigation) shall be instituted
involving any person in respect of which indemnity may be sought pursuant to
either paragraph (a) or paragraph (b) above, such person (the "indemnified
party") shall promptly notify the person against whom such indemnity may be
sought (the "indemnifying party") in writing. In such event, the indemnifying
party, upon request of the indemnified party, shall retain counsel reasonably
satisfactory to the indemnified party to represent the indemnified party and any
others the indemnifying party may designate in such proceeding and shall pay the
fees and disbursements of such counsel related to such proceeding. In any such
proceeding, any indemnified party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including
-18-
<PAGE>
any impleaded parties) include both the indemnifying party and the indemnified
party and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them. It is
understood that the indemnifying party shall not, in connection with any
proceeding or related proceedings in the same jurisdiction, be liable for (a)
the fees and expenses of more than one separate firm (in addition to any local
counsel) for the Initial Purchasers and all persons, if any, who control the
Initial Purchasers within the meaning of either Section 15 of the Securities Act
or Section 20 of the Exchange Act, (b) the fees and expenses of more than one
separate firm (in addition to any local counsel) for the Company, its directors,
its officers who sign the Registration Statement and each person, if any, who
controls the Company within the meaning of either such Section and (c) the fees
and expenses of more than one separate firm (in addition to any local counsel)
for all Holders and all persons, if any, who control any Holders within the
meaning of either such Section, and that all such fees and expenses shall be
reimbursed as they are incurred. In such case involving the Initial Purchasers
and persons who control the Initial Purchasers, such firm shall be designated in
writing by Morgan Stanley & Co. Incorporated. In such case involving the Holders
and such persons who control Holders, such firm shall be designated in writing
by the Holders of the majority of Registrable Securities sold pursuant to the
Registration Statement. In such case involving the Company, such firm shall be
designated by the Company. The indemnifying party shall not be liable for any
settlement of any proceeding effected without its written consent, but if
settled with such consent or if there be a final judgment for the plaintiff, the
indemnifying party agrees to indemnify the indemnified party from and against
any loss or liability by reason of such settlement or judgment. Notwithstanding
the foregoing sentence, if at any time an indemnified party shall have requested
an indemnifying party to reimburse the indemnified party for fees and expenses
of counsel as contemplated by the second and third sentences of this paragraph,
the indemnifying party agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more that 30 days after receipt by such indemnifying party of the
aforesaid request and (ii) such indemnifying party shall not have reimbursed the
indemnified party for such fees and expenses of counsel in accordance with such
request prior to the date of such settlement. No indemnifying party shall,
without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such proceeding.
-19-
<PAGE>
(d) CONTRIBUTION. To the extent the indemnification provided
for in paragraph (a) or paragraph (b) of this Section 6 is unavailable to an
indemnified party or insufficient in respect of any losses, claims, damages or
liabilities, then each indemnifying party under such paragraph, in lieu of
indemnifying such indemnified party thereunder, shall contribute to the amount
paid or payable by such indemnified party as a result of such losses, claims,
damages or liabilities (i) in such proportion as is appropriate to reflect the
relative benefits received by the indemnifying party or parties on the one hand
and the indemnified party or parties on the other hand from the distribution of
Registrable Securities pursuant to a Registration Statement or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the indemnifying
party or parties on the one hand and of the indemnified party or parties on the
other hand in connection with the statements or omissions that resulted in such
losses, claims, damages or liabilities, as well as any other relevant equitable
considerations. Benefits received by the Company shall be deemed to be equal to
the total net proceeds from the initial placement (before deducting expenses) of
the Notes pursuant to the Placement Agreement. Benefits received by the Initial
Purchasers shall be deemed to be equal to the total purchase discounts and
commissions received by them pursuant to the Placement Agreement and benefits
received by any other Holders shall be deemed to be equal to the value of having
the resale of Registrable Securities by such Holders registered under the
Securities Act. Benefits received by any underwriter shall be deemed to be equal
to the total underwriting discounts and commissions as set forth on the cover
page of the Prospectus forming a part of the Registration Statement which
resulted in such losses. The relative fault of the Company and the Holders shall
be determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company or by the Holders
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Holders'
respective obligations to contribute pursuant to this Section 6(d) are several
in proportion to the respective number of Registrable Securities of such Holder
that were registered pursuant to a Registration Statement, and not joint.
(e) The parties hereto agree that it would not be just or
equitable if contribution pursuant to this Section 6 were determined by PRO RATA
allocation or by any other method of allocation that does not take account of
the equitable considerations referred to in paragraph (d) above. The amount paid
or payable by an indemnified party as a result of the losses, claims, damages
and liabilities referred to in paragraph (d) above shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
Section 6,
-20-
<PAGE>
no Holder shall be required to indemnify or contribute any amount in excess of
the amount by which the total price at which Registrable Securities were sold by
such Holder exceeds the amount of any damages that such Holder has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The remedies provided for in this Section 6 are not exclusive
and shall not limit any rights or remedies which may otherwise be available to
any indemnified party at law or in equity.
The indemnity and contribution provisions contained in this
Section 6 shall remain operative and in full force and effect regardless of (i)
any termination of this Agreement, (ii) any investigation made by or on behalf
of the Initial Purchasers, any Holder or any person controlling the Initial
Purchasers or any Holder, or by or on behalf of the Company, its officers or
directors or any person controlling the Company, (iii) acceptance of any of the
Registrable Securities and (iv) any sale of Registrable Securities pursuant to a
Registration Statement.
The indemnity, contribution and expense reimbursement
obligations of the Company hereunder shall be in addition to any liability the
Company may otherwise have hereunder, under the Placement Agreement or
otherwise. The provisions of this Section 6 shall survive so long as Registrable
Securities remain outstanding, notwithstanding any transfer of the Registrable
Securities by any Holder or any termination of this Agreement.
7. INFORMATION REQUIREMENTS.
(a) The Company shall file the reports required to be filed by
it under the Securities Act and the Exchange Act, and if at any time the Company
is not required to file such reports, it will, upon the request of any Holder of
Registrable Securities, make publicly available other information so long as
necessary to permit sales pursuant to Rule 144 and Rule 144A under the
Securities Act. The Company further covenants that it will cooperate with any
Holder of Registrable Securities and take such further reasonable action as any
Holder of Registrable Securities may reasonably request (including, without
limitation, making such reasonable representations as any such Holder may
reasonably request), all to the extent required from time to time to enable such
Holder to sell Registrable Securities without registration under the Securities
Act pursuant to Rule 144 or Rule 144A under the Securities Act. Upon the request
of any Holder of Registrable Securities, the Company shall deliver to such
Holder a written statement as to whether it has complied with such filing
requirements. Notwithstanding the foregoing, nothing in this Section 7 shall be
deemed to require the Company to register any of its securities under any
section of the Exchange Act.
-21-
<PAGE>
(b) The Company shall file the reports required to be filed by
it under the Exchange Act and shall comply with all other requirements set forth
in the instructions to Form S-1 or S-3 (as appropriate) in order to allow the
Company to continue to be eligible to file registration statements on Form S-1
or S-3 (as appropriate) during the Effectiveness Period.
8. MISCELLANEOUS.
(a) REMEDIES. In the event of a breach by the Company of its
obligations under this Agreement, each Holder of Registrable Securities, in
addition to being entitled to exercise all rights granted by law, including
recovery of damages, will be entitled to specific performance of its rights
under this Agreement; PROVIDED, that the sole damages payable for a violation of
the terms of this Agreement for which Liquidated Damages are expressly provided
pursuant to Section 2(e) hereof shall be such Liquidated Damages. The Company
agrees that monetary damages would not be adequate compensation for any loss
incurred by reason of a breach by it of any of the provisions of this Agreement
and hereby further agrees that, in the event of any action for specific
performance in respect of such breach, it shall waive the defense that a remedy
at law would be adequate.
(b) NO CONFLICTING AGREEMENTS. The Company has not, as of the
date hereof, and shall not, on or after the date of this Agreement, enter into
any agreement with respect to its securities which conflicts with the rights
granted to the Holders of Registrable Securities in this Agreement. The Company
represents and warrants that the rights granted to the Holders of Registrable
Securities hereunder do not in any way conflict with the rights granted to the
holders of the Company's securities under any other or agreements.
(c) AMENDMENTS AND WAIVERS. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers onsets to departures from the provisions hereof may
not be given, unless the Company has obtained the written consent of holders of
a majority of the then outstanding Common Stock constituting Registrable
Securities (with holders of Notes deemed to be the holders, for purposes of this
Section, of the number of outstanding shares of Common Stock into which such
Notes are convertible). Notwithstanding the foregoing, a waiver or consent to
depart from the provisions hereof with respect to a matter that relates
exclusively to the rights of Holders of Registrable Securities whose securities
are being sold pursuant to a Registration Statement and that does not directly
or indirectly affect the rights of other Holders of Registrable Securities may
be given by Holders of at least a majority of the Registrable Securities being
sold by such Holders; PROVIDED, that the provisions of this sentence may not be
amended,
-22-
<PAGE>
modified or supplemented except in accordance with the provisions of the
immediately preceding sentence.
(d) NOTICES. All notices and other communications provided for
or permitted hereunder shall be made in writing and shall be deemed given (i)
when made, if made by hand delivery, (ii) upon confirmation, if made by
telecopier or (iii) one business day after being deposited with a reputable
next-day courier, postage prepaid, to the parties as follows:
(x) if to a Holder of Registrable Securities, at
the most current address given by such Holder to the Company in
accordance with the provisions of Section 8(e); and
(y) if to the Company, to:
Sunglass Hut International, Inc.
255 Alhambra Circle
Coral Gables, Florida 33134
Attention: Larry G. Petersen
Telephone: 305-461-6100
Telecopy: 305-461-6282
with a copy to:
Greenberg, Traurig, Hoffman, Lipoff, Rosen &
Quentel, P.A.
1221 Brickell Avenue
Miami, Florida 33131
Attention: Bruce E. Macdonough
Telephone: 305-579-0500
Telecopy: 305-579-0717
or to such other address as such person may have furnished to the other persons
identified in this Section 8(d) in writing in accordance herewith.
(e) OWNER OF REGISTRABLE SECURITIES. The Company will
maintain, or will cause its registrar and transfer agent to maintain, a register
with respect to the Registrable Securities in which all transfers of Registrable
Securities of which the Company has received notice will be recorded. The
Company may deem and treat the person in whose name Registrable Securities are
registered in such register of the
-23-
<PAGE>
Company as the owner thereof for all purposes, including, without limitation,
the giving of notices under this Agreement.
(f) APPROVAL OF HOLDERS. Whenever the consent or approval of
Holders of a specified percentage of Registrable Securities is required
hereunder, Registrable Securities held by the Company or its Affiliates (other
than the Initial Purchasers or subsequent Holders of Registrable Securities if
such subsequent Holders are deemed to be such Affiliates solely by reason of
their holdings of such Registrable Securities) shall not be counted in
determining whether such consent or approval was given by the Holders of such
required percentage.
(g) SUCCESSORS AND ASSIGNS. Any person who purchases any
Registrable Securities from an Initial Purchaser shall be deemed, for purposes
of this Agreement, to be an assignee of such Initial Purchaser. This Agreement
shall inure to the benefit of and be binding upon the successors and assigns of
each of the parties and shall inure to the benefit of and be binding upon each
Holder of any Registrable Securities.
(h) COUNTERPARTS. This Agreement 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 the original and all of which taken
together shall constitute one and the same agreement.
(i) HEADINGS. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
(j) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO
CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK WITHOUT REGARD TO
PRINCIPLES OF CONFLICT OF LAWS.
(k) SEVERABILITY. If any term, provision, covenant or
restriction of this Agreement is held to be invalid, illegal, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions set forth herein shall remain in full force and effect and shall in
no way be affected, impaired or invalidated thereby, and the parties hereto
shall use their best efforts to find and employ an alternative means to achieve
the same or substantially the same result as that contemplated by such term,
provision, covenant or restriction. It is hereby stipulated and declared to be
the intention of the parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of such which may
be hereafter declared invalid, illegal, void or unenforceable.
-24-
<PAGE>
(l) ENTIRE AGREEMENT. This Agreement is intended by the
parties as a final expression of their agreement and is intended to be a
complete and exclusive statement of the agreement and understanding of the
parties hereto in respect of the subject matter contained herein and the
registration rights granted by the Company with respect to the Registrable
Securities. Except as provided in the Placement Agreement, there are no
restrictions, promises, warranties or undertakings, other than those set forth
or referred to herein, with respect to the registration rights granted by the
Company with respect to the Registrable Securities. This Agreement supersedes
all prior agreements and understandings among the parties with respect to such
registration rights.
(m) ATTORNEYS' FEES. In any action or proceeding brought to
enforce a provision of this Agreement, or where any provision hereof is validly
asserted as a defense, the prevailing party, as determined by the court, shall
be entitled to recover reasonable attorneys' fees in addition to any other
available remedy.
(n) FURTHER ASSURANCES. Each of the parties hereto shall use
all reasonable efforts to take, or cause to be taken, all appropriate action, do
or cause to be done all things reasonably necessary, proper or advisable under
applicable law, and execute and deliver such documents and other papers as may
be required to carry out the provisions of this Agreement and the other
documents contemplated hereby and consummate and make effective the transactions
contemplated hereby.
(o) TERMINATION. This Agreement and the obligations of the
parties hereunder shall terminate upon the end of the Effectiveness Period,
except for any liabilities or obligations under Sections 4, 5 or 6 hereof and
the obligations to make payments of and provide for Liquidated Damages under
Section 2(e) hereof to the extent such damages accrue prior to the end of the
Effectiveness Period, each of which shall remain in effect in accordance with
its terms.
-25-
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first written above.
SUNGLASS HUT INTERNATIONAL,
INC.
By: /S/ GEORGE PITA
--------------------------
Name: GEORGE PITA
Title: VP/Asst Secretary
Accepted as of the date first
above written:
MORGAN STANLEY & CO. INCORPORATED
By: /S/ CANDICE KOEDERITZ
------------------------------
Name: Candice Koederitz
Title: Managing Director
MONTGOMERY SECURITIES
By: /S/ FRANK DUNLEVY
------------------------------
Name: Frank Dunlevy
Title: Managing Director
ALEX. BROWN & SONS INCORPORATED
By: [illegible]
------------------------------
Name:
Title:
SMITH BARNEY INC.
By: /S/ PETER M. PHELN
------------------------------
Name: Peter M. Pheln
Title: Director
SUNGLASS HUT INTERNATIONAL, INC.
TO
THE BANK OF NEW YORK
as Trustee
INDENTURE
Dated as of June 26, 1996
5 1/4% Convertible Subordinated Notes due 2003
<PAGE>
TABLE OF CONTENTS
PAGE
----
ARTICLE I DEFINITIONS................................1
Section 1.1 Definitions............................1
Affiliate..............................2
Applicable Price.......................2
Board of Directors.....................2
Business Day...........................2
Closing Price..........................3
Commission.............................3
Common Stock...........................3
Company................................3
Company Notice.........................3
Conversion Price.......................3
Corporate Trust Office.................3
Current Market Price...................3
Custodian..............................3
default................................4
Defaulted Interest.....................4
Depositary.............................4
Designated Senior Indebtedness.........4
Event of Default.......................4
Exchange Act...........................4
fair market value......................4
Fundamental Change.....................4
Fundamental Change Expiration Time.....5
Indebtedness...........................5
Indenture..............................6
Initial Purchasers.....................6
NationsBank Credit Facility............6
nonelecting share......................6
Non-U.S. Person........................6
Note or Notes..........................6
Noteholder or holder...................6
Note register..........................7
Note registrar.........................7
Officers' Certificate..................7
Opinion of Counsel.....................7
i
<PAGE>
outstanding............................7
Payment Blockage Notice................7
Person.................................8
PORTAL Market..........................8
Predecessor Note.......................8
QIB....................................8
Reference Market Price.................8
Regulation S...........................8
Regulation S Exchange Certificate......8
Regulation S Global Note...............8
Regulation S Transfer Certificate......8
Representative.........................8
Repurchase Date........................9
Responsible Officer....................9
Restricted Securities..................9
Rule 144A..............................9
Rule 144A Exchange Certificate.........9
Rule 144A Global Note..................9
Rule 144A Transfer Certificate.........9
Securities Act.........................9
Senior Indebtedness....................9
Subsidiary............................10
Trading Day...........................10
Trigger Event.........................10
Trust Indenture Act...................10
Trustee...............................10
Unrestricted Date.....................10
ARTICLE II ISSUE, DESCRIPTION, EXECUTION,
REGISTRATION AND EXCHANGE OF
NOTES.................................11
Section 2.1 Designation, Amount and Issue
of Notes..............................11
Section 2.2 Form of Notes.........................11
Section 2.3 Date and Denomination of Notes;
Payments of Interest..................12
Section 2.4 Execution of Notes....................13
Section 2.5 Exchange and Registration of
Transfer of Notes; Restriction
on Transfer; Depositary..............14
Section 2.6 Mutilated, Destroyed, Lost or
Stolen Notes.........................27
Section 2.7 Temporary Notes.......................28
ii
<PAGE>
Section 2.8 Cancellation of Notes Paid, Etc.......29
Section 2.9 CUSIP Numbers.........................29
ARTICLE III REDEMPTION OF NOTES...................29
Section 3.1 Redemption Prices.....................29
Section 3.2 Notice of Redemption: Selection
of Notes.............................29
Section 3.3 Payment of Notes Called for
Redemption............................31
Section 3.4 Conversion Arrangement on Call
for Redemption.......................32
Section 3.5 Redemption at Option of Holders.......33
ARTICLE IV SUBORDINATION OF NOTES................35
Section 4.1 Agreement of Subordination............35
Section 4.2 Payments to Noteholders...............36
Section 4.3 Subrogation of Notes..................39
Section 4.4 Authorization to Effect
Subordination.........................40
Section 4.5 Notice to Trustee.....................40
Section 4.6 Trustee's Relation to Senior
Indebtedness..........................41
Section 4.7 No Impairment of Subordination........41
Section 4.8 Certain Conversions Deemed
Payment...............................42
Section 4.9 Article Applicable to Paying
Agents................................42
Section 4.10 Senior Indebtedness Entitled to
Rely..................................42
ARTICLE V PARTICULAR COVENANTS OF THE
COMPANY...............................43
Section 5.1 Payment of Principal, Premium
and Interest.........................43
Section 5.2 Maintenance of Office or Agency.......43
Section 5.3 Appointments to Fill Vacancies
in Trustee's Office..................44
Section 5.4 Provisions as to Paying Agent.........44
Section 5.5 Corporate Existence...................45
Section 5.6 Rule 144A Information
Requirement...........................45
Section 5.7 Stay, Extension and Usury Laws........45
ARTICLE VI NOTEHOLDERS' LISTS AND REPORTS BY
THE COMPANY AND THE TRUSTEE..........46
Section 6.1 Noteholders' Lists....................46
Section 6.2 Preservation and Disclosure of
Lists.................................46
iii
<PAGE>
Section 6.3 Reports by Trustee....................47
Section 6.4 Reports by Company....................47
ARTICLE VII REMEDIES OF THE TRUSTEE AND
NOTEHOLDERS ON AN EVENT OF
DEFAULT...............................48
Section 7.1 Events of Default.....................48
Section 7.2 Payments of and Suits for
Payments of Notes Upon Default.......51
Section 7.3 Application of Monies Collected
by Trustee...........................53
Section 7.4 Proceedings by Noteholder.............53
Section 7.5 Proceedings by Trustee................54
Section 7.6 Remedies Cumulative and
Continuing............................54
Section 7.7 Direction of Proceedings and
Waiver of Defaults by Majority
Noteholders...........................55
Section 7.8 Notice of Defaults....................55
Section 7.9 Undertaking to Pay Costs..............56
ARTICLE VIII CONCERNING THE TRUSTEE................56
Section 8.1 Duties and Responsibilities of
Trustee...............................56
Section 8.2 Reliance on Documents,
Opinions. Etc........................57
Section 8.3 No Responsibility for Recitals,
Etc 59
Section 8.4 Trustee, Paying Agents,
Conversion Agents or Registrar
May Own Notes.........................59
Section 8.5 Monies to Be Held in Trust............59
Section 8.6 Compensation and Expenses of
Trustee...............................59
Section 8.7 Officers' Certificate as
Evidence..............................60
Section 8.8 Conflicting Interests of Trustee......60
Section 8.9 Eligibility of Trustee................60
Section 8.10 Resignation or Removal of
Trustee...............................60
Section 8.11 Acceptance by Successor Trustee.......62
Section 8.12 Succession by Merger, Etc.............63
Section 8.13 Limitation on Rights of Trustee
as Creditor..........................63
Section 8.14 Trustee's Application for
Instructions from the Company........63
ARTICLE IX CONCERNING THE NOTEHOLDERS...........64
Section 9.1 Action by Noteholders.................64
Section 9.2 Proof of Execution by
Noteholders...........................64
iv
<PAGE>
Section 9.3 Who Are Deemed Absolute Owners........64
Section 9.4 Company-Owned Notes Disregarded.......65
Section 9.5 Revocation of Consents: Future
Holders Bound.........................65
ARTICLE X NOTEHOLDERS' MEETINGS.................66
Section 10.1 Purpose of Meetings...................66
Section 10.2 Call of Meetings by Trustee...........66
Section 10.3 Call of Meetings by Company or
Noteholders...........................66
Section 10.4 Qualifications for Voting.............67
Section 10.5 Regulations...........................67
Section 10.6 Voting................................68
Section 10.7 No Delay of Rights by Meeting.........68
ARTICLE XI SUPPLEMENTAL INDENTURES...............68
Section 11.1 Supplemental Indentures Without
Consent of Noteholders...............68
Section 11.2 Supplemental Indentures with
Consent of Noteholders................70
Section 11.3 Effect of Supplemental
Indenture.............................71
Section 11.4 Notation on Notes.....................71
Section 11.5 Evidence of Compliance of
Supplemental Indenture to Be
Furnished Trustee.....................72
ARTICLE XII CONSOLIDATION, MERGER, SALE,
CONVEYANCE AND LEASE.................72
Section 12.1 Company May Consolidate Etc. on
Certain Terms........................72
Section 12.2 Successor Corporation to Be
Substituted...........................72
Section 12.3 Opinion of Counsel to Be Given
Trustee...............................73
ARTICLE XIII SATISFACTION AND DISCHARGE OF
INDENTURE.............................73
Section 13.1 Discharge of Indenture................73
Section 13.2 Deposited Monies to Be Held in
Trust by Trustee......................74
Section 13.3 Paying Agent to Repay Monies
Held..................................74
Section 13.4 Return of Unclaimed Monies............74
v
<PAGE>
Section 13.5 Reinstatement.........................75
ARTICLE XIV IMMUNITY OF INCORPORATORS,
STOCKHOLDERS, OFFICERS AND
DIRECTORS.............................75
Section 14.1 Indenture and Notes Solely
Corporate Obligations................75
ARTICLE XV CONVERSION OF NOTES...................75
Section 15.1 Right to Convert......................75
Section 15.2 Exercise of Conversion
Privilege; Issuance of Common
Stock on Conversion; No
Adjustment for Interest or
Dividends.............................76
Section 15.3 Cash Payments in Lieu of
Fractional Shares....................78
Section 15.4 Conversion Price......................78
Section 15.5 Adjustment of Conversion Price........78
Section 15.6 Effect of Reclassification,
Consolidation, Merger or Sale.........90
Section 15.7 Taxes on Shares Issued................91
Section 15.8 Reservation of Shares; Shares
to Be Fully Paid; Compliance
with Governmental
Requirements; Listing of
Common Stock..........................91
Section 15.9 Responsibility of Trustee.............92
Section 15.10 Notice to Holders Prior to
Certain Actions......................92
ARTICLE XVI MISCELLANEOUS PROVISIONS..............93
Section 16.1 Provisions Binding on Company's
Successors...........................93
Section 16.2 Official Acts by Successor
Corporation...........................93
Section 16.3 Addresses for Notices, Etc............94
Section 16.4 Governing Law.........................94
Section 16.5 Evidence of Compliance with
Conditions Precedent;
Certificates to Trustee..............94
Section 16.6 Legal Holidays........................95
Section 16.7 Trust Indenture Act...................95
Section 16.8 No Security Interest Created..........95
Section 16.9 Benefits of Indenture.................95
Section 16.10 Table of Contents,
Headings, Etc.........................96
Section 16.11 Authenticating Agent.............96
vi
<PAGE>
Section 16.12 Paying Agent.....................97
Section 16.13 Execution in Counterparts........97
vii
<PAGE>
INDENTURE dated as of June 26, 1996, between Sunglass Hut International,
Inc., a Delaware corporation (hereinafter sometimes called the "Company", as
more fully set forth in Section 1.1), and The Bank of New York, a New York
banking corporation, as trustee hereunder (hereinafter sometimes called the
"Trustee," as more fully set forth in Section 1.1).
WITNESSETH:
WHEREAS, for its lawful corporate purposes, the Company has duly
authorized the issue of its Convertible Subordinated Notes due 2003 (hereinafter
sometimes called the "Notes"), in an aggregate principal amount not to exceed
$115,000,000, and, to provide the terms and conditions upon which the Notes are
to be authenticated, issued and delivered, the Company has duly authorized the
execution and delivery of this Indenture; and
WHEREAS, the Notes, a certificate of authentication to be borne by the
Notes, a notice of conversion, a notice of option to elect repayment upon a
Fundamental Change (as defined herein) and a notice of assignment are to be
substantially in the forms hereinafter provided; and
WHEREAS, all acts and things necessary to make the Notes, when executed
by the Company and authenticated and delivered by the Trustee or a duly
authorized authenticating agent, as provided in this Indenture, the valid,
binding and legal obligations of the Company, and to constitute these presents a
valid agreement according to its terms, have been done and performed, and the
execution of this Indenture and the issue hereunder of the Notes have in all
respects been duly authorized.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
That in order to declare the terms and conditions upon which the Notes
are, and are to be, authenticated, issued and delivered, and in consideration of
the premises and of the purchase and acceptance of the Notes by the holders
thereof, the Company covenants and agrees with the Trustee for the equal and
proportionate benefit of the respective holders from time to time of the Notes
(except as otherwise provided below) as follows:
ARTICLE I
DEFINITIONS
Section 1.1 DEFINITIONS. The terms defined in this Section 1.1 (except
as herein otherwise expressly provided or unless the context otherwise requires)
for all purposes of this Indenture and of any indenture supplemental hereto
shall have the respective
<PAGE>
meanings specified in this Section 1.1. All other terms used in this Indenture
that are defined in the Trust Indenture Act or which are by reference therein
defined in the Securities Act (except as herein otherwise expressly provided or
unless the context otherwise requires) shall have the meanings assigned to such
terms in said Trust Indenture Act and in said Securities Act as in force at the
date of the execution of this Indenture. The words "herein," "hereof,"
"hereunder," and words of similar import refer to this Indenture as a whole and
not to any particular Article, Section or other Subdivision. The terms defined
in this Article include the plural as well as the singular.
AFFILIATE: The term "Affiliate" of any specified Person shall mean any
other Person directly or indirectly controlling or controlled by or under direct
or indirect common control with such specified Person. For the purposes of this
definition, (i) the term "control," when used with respect to any specified
Person, means the power to direct or cause the direction of the management and
policies of such Person, directly or indirectly, whether through the ownership
of voting securities, by contract or otherwise, and (ii) the terms "controlling"
and "controlled" have meanings correlative to the foregoing.
APPLICABLE PRICE: The term "Applicable Price" shall mean (i) in the
event of a Fundamental Change in which the holders of the Company's Common Stock
receive only cash, the amount of cash received by the holder of one share of
Common Stock and (ii) in the event of any other Fundamental Change, the
arithmetic average of the Closing Price for the Company's Common Stock
(determined as set forth in Section 15.5(i)(1)) during the ten Trading Days (as
defined in Section 15.5(i)(5)) prior to the record date for the determination of
the holders of Common Stock entitled to receive cash, securities, property or
other assets in connection with such Fundamental Change, or, if there is no such
record date, the date upon which the holders of the Common Stock shall have the
right to receive such cash, securities, property or other assets in connection
with such Fundamental Change or, if no record date exists, the date upon which
the holders of the Common Stock shall have the right to receive such cash,
securities, property or other assets in connection with the Fundamental Change.
BOARD OF DIRECTORS: The term "Board of Directors" shall mean the Board
of Directors of the Company or a committee of such Board of Directors duly
authorized to act for it hereunder.
BUSINESS DAY: The term "Business Day" means each Monday, Tuesday,
Wednesday, Thursday and Friday which is not a day on which the banking
institutions in The City of New York, The City of Coral Gables, Florida or the
city in which the Corporate Trust Office is located are authorized or obligated
by law or executive order to close or be closed.
-2-
<PAGE>
CLOSING PRICE: The term "Closing Price" shall have the meaning specified
in Section 15.5(i)(1).
COMMISSION: The term "Commission" shall mean the Securities and
Exchange Commission.
COMMON STOCK: The term "Common Stock" shall mean any stock of any class
of the Company which has no preference in respect of dividends or of amounts
payable in the event of any voluntary or involuntary liquidation, dissolution or
winding up of the Company and which is not subject to redemption by the Company.
Subject to the provisions of Section 15.6, however, shares issuable on
conversion of Notes shall include only shares of the class designated as common
stock of the Company at the date of this Indenture or shares of any class or
classes resulting from any reclassification or reclassifications thereof and
which have no preference in respect of dividends or of amounts payable in the
event of any voluntary or involuntary liquidation, dissolution or winding up of
the Company and which are not subject to redemption by the Company; PROVIDED
that if at any time there shall be more than one such resulting class, the
shares of each such class then so issuable shall be substantially in the
proportion which the total number of shares of such class resulting from all
such reclassifications bears to the total number of shares of all such classes
resulting from all such reclassifications.
COMPANY: The term "Company" shall mean Sunglass Hut International, Inc.,
a Delaware corporation, and subject to the provisions of Article XII, shall
include its successors and assigns.
COMPANY NOTICE: The term "Company Notice" has the meaning specified in
Section 3.5(b).
CONVERSION PRICE: The term "Conversion Price" shall have the meaning
specified in Section 15.4.
CORPORATE TRUST OFFICE: The term "Corporate Trust Office," or other
similar term, shall mean the principal office of the Trustee at which at any
particular time its corporate trust business shall be principally administered,
which office is, at the date as of which this Indenture is dated, located at 101
Barclay Street, Floor 21 West, New York, New York 10286, Attention: Corporate
Trust Trustee Administration (Sunglass Hut International, Inc., Convertible
Subordinated Notes due 2003).
CURRENT MARKET PRICE: The term "Current Market Price" has
the meaning specified in Section 15.5(i)(2).
CUSTODIAN: The term "Custodian" shall mean The Bank of New York, as
custodian with respect to the Notes in global form, or any successor entity
thereto.
-3-
<PAGE>
DEFAULT: The term "default" shall mean any event that is, or after
notice or passage of time, or both, would be, an Event of Default.
DEFAULTED INTEREST: The term "Defaulted Interest" shall have the
meaning set forth in Section 2.3.
DEPOSITARY: The term "Depositary" means, with respect to the Notes
issuable or issued in whole or in part in global form, The Depository Trust
Company, until a successor shall have been appointed and become such pursuant to
the applicable provisions of this Indenture, and thereafter, "Depositary" shall
mean or include such successor.
DESIGNATED SENIOR INDEBTEDNESS: The term "Designated Senior
Indebtedness" means the NationsBank Credit Facility and any particular Senior
Indebtedness in which the instrument creating or evidencing the same or the
assumption or guarantee thereof (or related agreements or documents to which the
Company is a party) expressly provides that such Indebtedness shall be
"Designated Senior Indebtedness" for purposes of the Indenture (provided that
such instrument, agreement or other document may place limitations and
conditions on the right of such Senior Indebtedness to exercise the rights of
Designated Senior Indebtedness). If any payment made to any holder of any
Designated Senior Indebtedness or its Representative with respect to such
Designated Senior Indebtedness is rescinded or must otherwise be returned by
such holder or Representative upon the insolvency, bankruptcy or reorganization
of the Company or otherwise, the reinstated Indebtedness of the Company arising
as a result of such rescission or return shall constitute Designated Senior
Indebtedness effective as of the date of such rescission or return.
EVENT OF DEFAULT: The term "Event of Default" shall mean any event
specified in Section 7.1(a), (b), (c), (d) or (e).
EXCHANGE ACT: The term "Exchange Act" shall mean the Securities Exchange
Act of 1934, as amended, and the rules and regulations promulgated thereunder,
as in effect from time to time.
FAIR MARKET VALUE: The term "fair market value" has the
meaning specified in Section 15.5(i)(3).
FUNDAMENTAL CHANGE: The term "Fundamental Change" means the occurrence
of any transaction or events in connection with which all or substantially all
the Common Stock shall be exchanged for, converted into, acquired for or
constitute solely the right to receive consideration (whether by means of an
exchange offer, liquidation, tender offer, consolidation, merger, combination,
reclassification, recapitalization or otherwise) which is not all or
substantially all common stock which is (or, upon consummation of or
-4-
<PAGE>
immediately following such transaction or event, will be) listed on a United
States national securities exchange or approved for quotation on the Nasdaq
National Market or any similar United States system of automated dissemination
of quotations of securities prices.
FUNDAMENTAL CHANGE EXPIRATION TIME: The term "Fundamental
Change Expiration Time" has the meaning specified in Section 3.5(b).
INDEBTEDNESS: The term "Indebtedness" means, with respect to any Person,
and without duplication:
(a) all indebtedness, obligations and other liabilities
(contingent or otherwise) of such Person for borrowed money (including
obligations of the Company in respect of overdrafts, foreign exchange
contracts, currency exchange agreements, interest rate protection
agreements, and any loans or advances from banks, whether or not
evidenced by notes or similar instruments) or evidenced by bonds,
debentures, notes or similar instruments (whether or not the recourse of
the lender is to the whole of the assets of such Person or to only a
portion thereof) (other than any account payable or other accrued
current liability or obligation incurred in the ordinary course of
business in connection with the obtaining of materials or services),
(b) all reimbursement obligations and other liabilities
(contingent or otherwise) of such Person with respect to letters of
credit, bank guarantees or bankers' acceptances,
(c) all obligations and liabilities (contingent or otherwise) in
respect of leases of such Person required, in conformity with generally
accepted accounting principles, to be accounted for as capitalized lease
obligations on the balance sheet of such Person and all obligations and
other liabilities (contingent or otherwise)
under any lease or related document (including a purchase agreement) in
connection with the lease of real property which provides that such
Person is contractually obligated to purchase or cause a third party to
purchase the leased property and thereby guarantee a minimum residual
value of the leased property to the lessor and the obligations of such
Person under such lease or related document to purchase or to cause a
third party to purchase such leased property,
(d) all obligations of such Person (contingent or otherwise) with
respect to an interest rate or other swap, cap or collar agreement or
other similar instrument or agreement or foreign currency hedge,
exchange, purchase or similar instrument or agreement,
-5-
<PAGE>
(e) all direct or indirect guaranties or similar agreements by
such Person in respect of, and obligations or liabilities (contingent or
otherwise) of such Person to purchase or otherwise acquire or otherwise
assure a creditor against loss in respect of, indebtedness, obligations
or liabilities of another Person of the kind described in clauses (a)
through (d),
(f) any indebtedness or other obligations described in clauses
(a) through (d) secured by any mortgage, pledge, lien or other
encumbrance existing on property which is owned or held by such Person,
regardless of whether the indebtedness or other obligation secured
thereby shall have been assumed by such Person and
(g) any and all deferrals, renewals, extensions and refundings
of, or amendments, modifications or supplements to, any indebtedness,
obligation or liability of the kind described in clauses (a) through
(f).
INDENTURE: The term "Indenture" shall mean this instrument as originally
executed or, if amended or supplemented as herein provided, as so amended or
supplemented.
INITIAL PURCHASERS: The term "Initial Purchasers" means Morgan Stanley
& Co. Incorporated, Montgomery Securities, Alex. Brown & Sons Incorporated, and
Smith Barney Inc.
NATIONSBANK CREDIT FACILITY: The term "NationsBank Credit Facility"
means that certain Revolving Credit and Reimbursement Agreement, dated as of
October 25, 1994, by and between the Company and NationsBank of Florida,
National Association, as amended, amended and restated, supplemented or
otherwise modified (including without limitation any increases in the principal
amount owed thereunder from time to time) from time to time.
NONELECTING SHARE: The term "nonelecting share" has the meaning
specified in Section 15.6.
NON-U.S. PERSON: The term "Non-U.S. Person" shall have the meaning
specified in Section 2.5(b).
NOTE or NOTES: The terms "Note" or "Notes" shall mean any Note or Notes,
as the case may be, authenticated and delivered under this Indenture.
NOTEHOLDER or HOLDER: The terms "Noteholder" or "holder" as applied to
any Note, or other similar terms (but excluding the term "beneficial holder"),
shall mean any Person in whose name at the time a particular Note is registered
on the Note registrar's books.
-6-
<PAGE>
NOTE REGISTER: The term "Note register" shall have the meaning specified
in Section 2.5(a).
NOTE REGISTRAR: The term "Note registrar" shall have the meaning
specified in ss. 2.5(a).
OFFICERS' CERTIFICATE: The term "Officers' Certificate," when used with
respect to the Company, shall mean a certificate signed by both (a) the
President, the Chief Executive Officer, any Executive or Senior Vice President
or any Vice President (whether or not designated by a number or numbers or word
or words added before or after the title "Vice President") and (b) by the
Treasurer or any Assistant Treasurer or Secretary or any Assistant Secretary of
the Company.
OPINION OF COUNSEL: The term "Opinion of Counsel" shall mean an opinion
in writing signed by legal counsel, who may be an employee of or counsel to the
Company, or other counsel acceptable to the Trustee.
OUTSTANDING: The term "outstanding," when used with reference to Notes,
shall mean, subject to the provisions of Section 9.4, as of any particular time,
all Notes authenticated and delivered by the Trustee under this Indenture,
except for the following:
(a) Notes theretofore canceled by the Trustee or delivered to the
Trustee for cancellation;
(b) Notes, or portions thereof, for the redemption of which
monies in the necessary amount shall have been deposited in trust with
the Trustee or with any paying agent (other than the Company) or shall
have been set aside and segregated in trust by the Company (if the
Company shall act as its own paying agent); PROVIDED that if such Notes
are to be redeemed prior to the maturity thereof, notice of such
redemption shall have been given as provided in Article III, or
provision satisfactory to the Trustee shall have been made for giving
such notice;
(c) Notes in lieu of which, or in substitution for which, other
Notes shall have been authenticated and delivered pursuant to the terms
of Section 2.6 unless proof satisfactory to the Trustee is presented
that any such Notes are held by bona fide holders in due course; and
(d) Notes converted into Common Stock pursuant to Article XV and
Notes deemed not outstanding pursuant to Section 3.2.
PAYMENT BLOCKAGE NOTICE: The term "Payment Blockage Notice" has the
meaning specified in Section 4.2.
-7-
<PAGE>
PERSON: The term "Person" shall mean a corporation, an association, a
partnership, an individual, a joint venture, a joint stock company, a trust, an
unincorporated organization or a government or an agency or a political
subdivision thereof.
PORTAL MARKET: The term "PORTAL Market" shall mean the Private
Offerings, Resales and Trading through Automated Linkages Market operated by the
National Association of Securities Dealers, Inc. or any successor thereto.
PREDECESSOR NOTE: The term "Predecessor Note" of any particular Note
shall mean every previous Note evidencing all or a portion of the same debt as
that evidenced by such particular Note; for the purposes of this definition, any
Note authenticated and delivered under Section 2.6 in lieu of a lost, destroyed
or stolen Note shall be deemed to evidence the same debt as the lost, destroyed
or stolen Note that it replaces.
QIB: The term "QIB" shall mean a "qualified institutional buyer" as
defined in Rule 144A of the Securities Act.
REFERENCE MARKET PRICE: The term "Reference Market Price" shall
initially mean $16.08 and in the event of any adjustment to the Conversion Price
pursuant to Sections 15.5(a), (b), (c), (d), (e), (f), (g) or (h), the Reference
Market Price shall also be adjusted so that the ratio of the Reference Market
Price to the Conversion Price after giving effect to any such adjustment shall
always be the same as the ratio of $16.08 to the initial Conversion Price
specified in the form of Note attached hereto (without regard to any adjustment
thereto).
REGULATION S: The term "Regulation S" shall mean Regulation S as
promulgated under the Securities Act.
REGULATION S EXCHANGE CERTIFICATE: The term "Regulation S Exchange
Certificate" shall have the meaning specified in Section 2.5(c).
REGULATION S GLOBAL NOTE: The term "Regulation S Global Note" shall mean
that global note that meets the requirements of this Indenture and that
evidences Notes sold by the Initial Purchases to Non-U.S. Persons in reliance on
Regulation S.
REGULATION S TRANSFER CERTIFICATE: The term "Regulation S Transfer
Certificate" shall have the meaning specified in Section 2.5(h).
REPRESENTATIVE: The term "Representative" means the (a) indenture
trustee or other trustee, agent or representative for any Senior Indebtedness or
(b) with respect to any Senior Indebtedness that does not have any such trustee,
agent or other representative, (i) in the case of such Senior Indebtedness
issued pursuant to an agreement providing for voting arrangements as among the
holders or owners of such Senior Indebtedness, any holder or owner of such
Senior
-8-
<PAGE>
Indebtedness acting with the consent of the required Persons necessary to bind
such holders or owners of such Senior Indebtedness, and (ii) in the case of all
other such Senior Indebtedness, the holder or owner of such Senior Indebtedness.
REPURCHASE DATE: The term "Repurchase Date" has the
meaning specified in Section 3.5(a).
RESPONSIBLE OFFICER: The term "Responsible Officer," when used with
respect to the Trustee, shall mean an officer of the Trustee in the Corporate
Trust Office assigned and duly authorized by the Trustee to administer its
corporate trust matters.
RESTRICTED SECURITIES: The term "Restricted Securities" has the meaning
specified in Section 2.5(d).
RULE 144A: The term "Rule 144A" shall mean Rule 144A as promulgated
under the Securities Act.
RULE 144A EXCHANGE CERTIFICATE: The term "Rule 144A Exchange
Certificate" shall have the meaning specified in Section 2.5(c).
RULE 144A GLOBAL NOTE: The term "Rule 144A Global Note" shall mean that
global note that meets the requirements of this Indenture and that evidences
Notes sold by the Initial Purchasers to QIBs in reliance on Rule 144A.
RULE 144A TRANSFER CERTIFICATE: The term "Rule 144A Transfer
Certificate" shall have the meaning specified in Section 2.5(h).
SECURITIES ACT: The term "Securities Act" shall mean the Securities Act
of 1933, as amended, and the rules and regulations promulgated thereunder.
SENIOR INDEBTEDNESS: The term "Senior Indebtedness" means the principal
of, premium, if any, interest (including all interest accruing subsequent to the
commencement of any bankruptcy or similar proceeding, whether or not a claim for
post- petition interest is allowable as a claim in any such proceeding) and rent
payable on or in connection with, and all fees, costs, expenses and other
amounts accrued or due on or in connection with, Indebtedness of the Company,
whether outstanding on the date of this Indenture or thereafter created,
incurred, assumed, guaranteed or in effect guaranteed by the Company (including
all deferrals, renewals, extensions or refundings of, or amendments,
modifications or supplements to, the foregoing), unless in the case of any
particular Indebtedness the instrument creating or evidencing the same or the
assumption or guarantee thereof expressly provides that such Indebtedness shall
not be senior in right of payment to the Notes or expressly provides that such
Indebtedness is PARI PASSU or
-9-
<PAGE>
junior to the Notes. Notwithstanding the foregoing, the term Senior Indebtedness
shall not include any Indebtedness of the Company to any subsidiary of the
Company, a majority of the voting stock of which is owned, directly or
indirectly, by the Company. If any payment made to any holder of any Senior
Indebtedness or its Representative with respect to such Senior Indebtedness is
rescinded or must otherwise be returned by such holder or Representative upon
the insolvency, bankruptcy or reorganization of the Company or otherwise, the
reinstated Indebtedness of the Company arising as a result of such rescission or
return shall constitute Senior Indebtedness effective as of the date of such
rescission or return.
SUBSIDIARY: The term "Subsidiary" means, with respect to any Person,
(i) any corporation, association or other business entity of which more than 50%
of the total voting power of shares of capital stock entitled (without regard to
the occurrence of any contingency) to vote in the election of directors,
managers or trustees thereof is at the time owned or controlled, directly or
indirectly, by such Person or one or more of the other subsidiaries of that
Person (or a combination thereof) and (ii) any partnership (a) the sole general
partner or managing general partner of which is such Person or a subsidiary of
such Person or (b) the only general partners of which are such Person or one or
more subsidiaries of such Person (or any combination thereof).
TRADING DAY: The term "Trading Day" shall have the meaning specified in
Section 15.5(i)(5).
TRIGGER EVENT: The term "Trigger Event" shall have the meaning specified
in Section 15.5(d).
TRUST INDENTURE ACT: The term "Trust Indenture Act" shall mean the Trust
Indenture Act of 1939, as amended, as it was in force at the date of execution
of this Indenture, except as provided in Sections 3.5(e), 11.3 and 15.6;
PROVIDED, HOWEVER, that in the event the Trust Indenture Act of 1939 is amended
after the date hereof, the term "Trust Indenture Act" shall mean, to the extent
required by such amendment, the Trust Indenture Act of 1939 as so amended.
TRUSTEE: The term "Trustee" shall mean The Bank of New York and its
successors and any corporation resulting from or surviving any consolidation or
merger to which it or its successors may be a party and any successor trustee at
the time serving as successor trustee hereunder.
UNRESTRICTED DATE: The term "Unrestricted Date" shall have
the meaning specified in Section 2.5(d).
The definitions of certain other terms are as specified in Article XV.
-10-
<PAGE>
ARTICLE II
ISSUE, DESCRIPTION, EXECUTION, REGISTRATION
AND EXCHANGE OF NOTES
Section 2.1 DESIGNATION, AMOUNT AND ISSUE OF NOTES. The Notes shall be
designated as "5 1/4% Convertible Subordinated Notes due 2003." Notes not to
exceed the aggregate principal amount of $100,000,000 (or $115,000,000 if the
over-allotment option set forth in Section 3 of the Placement Agreement dated
June 20, 1996 (as amended from time to time by the parties thereto) by and
between the Company and the Initial Purchasers is exercised in full) (except
pursuant to Sections 2.5, 2.6, 3.3, 3.5 and 15.2 hereof) upon the execution of
this Indenture, or from time to time thereafter, may be executed by the Company
and delivered to the Trustee for authentication, and the Trustee
shall thereupon authenticate and make available for delivery said Notes to or
upon the written order of the Company, signed by its (a) President, any
Executive or Senior Vice President or any Vice President (whether or not
designated by a number or numbers or word or words added before or after the
title "Vice President") and (b) Treasurer or any Assistant Treasurer or
Secretary or any Assistant Secretary, without any further action by the Company
hereunder.
Section 2.2 FORM OF NOTES. The Notes and the Trustee's certificate of
authentication to be borne by such Notes shall be substantially in the form set
forth in Exhibit A, which is incorporated in and made a part of this Indenture.
Any of the Notes may have such letters, numbers or other marks of
identification and such notations, legends and endorsements as the officers
executing the same may approve (execution thereof to be conclusive evidence of
such approval) and as are not inconsistent with the provisions of this
Indenture, or as may be required to comply with any law or with any rule or
regulation made pursuant thereto or with any rule or
regulation of any securities exchange or automated quotation system on which
the Notes may be listed, or to conform to usage.
Any Note in global form shall represent such of the outstanding Notes as
shall be specified therein and shall provide that it shall represent the
aggregate amount of outstanding Notes from time to time endorsed thereon and
that the aggregate amount of outstanding Notes represented thereby may from time
to time be increased or reduced to reflect transfers or exchanges permitted
hereby. Any endorsement of a Note in global form to reflect the amount of any
increase or decrease in the amount of outstanding Notes represented thereby
shall be made by the Trustee or the Custodian, at the direction of the Trustee,
in such manner and upon instructions given by the holder of such Notes in
accordance with this Indenture. Payment of principal of and interest and
premium, if any, on any Note in global form shall be made to the holder of such
Note.
-11-
<PAGE>
The terms and provisions contained in the form of Note attached as
Exhibit A hereto shall constitute, and are hereby expressly made, a part of this
Indenture and, to the extent applicable, the Company and the Trustee, by their
execution and delivery of this Indenture, expressly agree to such terms and
provisions and to be bound thereby.
Section 2.3 DATE AND DENOMINATION OF NOTES; PAYMENTS OF INTEREST. The
Notes shall be issuable in registered form without coupons in denominations of
$1,000 principal amount and integral multiples thereof. Every Note shall be
dated the date of its authentication and shall bear interest from the applicable
date in each case as specified on the face of the form of Note attached as
Exhibit A hereto. Interest on the Notes shall be computed on the basis of a
360-day year comprised of twelve 30-day months.
The Person in whose name any Note (or its Predecessor Note) is
registered at the close of business on any record date with respect to any
interest payment date (including any Note that is converted after the record
date and on or before the interest payment date) shall be entitled to receive
the interest payable on such interest payment date notwithstanding the
cancellation of such Note upon any transfer, exchange or conversion subsequent
to the record date and on or prior to such interest payment date; PROVIDED, that
in the case of any Note, or portion thereof, called for redemption on a
redemption date or redeemed in connection with a Fundamental Change on a
Repurchase Date that is after a record date and prior to (but excluding) the
next succeeding interest payment date, interest shall not be paid to the Person
in whose name the Note, or portion thereof, is registered on the close of
business on such record date and the Company shall have no obligation to pay
interest on such Note or such portion except to the extent required to be
paid upon redemption of such Note or portion thereof pursuant to Section 3.3 or
3.5 hereof. Interest may, at the option of the Company, be paid either (i) by
check mailed to the address of the Person entitled thereto as it appears in the
Note register or (ii) by wire transfer to an account maintained by such Person
located in the United States; PROVIDED, HOWEVER, that payments to The Depository
Trust Company will be made by wire transfer of immediately available funds to
the account of The Depository Trust Company or its nominee in accordance with
the wire transfer instructions supplied by such holder to the Trustee and paying
agent (if different from the Trustee). The term "record date" with respect to
any interest payment date shall mean the June 1 or December 1 preceding said
June 15 or December 15, respectively. Holders electing to receive wire transfers
must provide the Trustee with written instructions at least five days prior to
the record date for such interest payment date.
Any interest on any Note which is payable, but is not punctually paid or
duly provided for, on any said June 15 or December 15 (herein called "Defaulted
Interest") shall forthwith cease to be payable to the Noteholder on the relevant
record date by virtue of his having been such Noteholder; and such Defaulted
Interest shall be paid by the Company, at its election in each case, as provided
in clause (1) or (2) below:
-12-
<PAGE>
(1) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Notes (or their respective
Predecessor Notes) are registered at the close of business on a special
record date for the payment of such Defaulted Interest, which shall be
fixed in the following manner. The Company shall notify the Trustee in
writing of the amount of Defaulted Interest to be paid on each Note and
the date of the payment (which shall be not less than twenty-five (25)
days after the receipt by the Trustee of such notice, unless the Trustee
shall consent to an earlier date), and at the same time the Company
shall deposit with the Trustee an amount of money equal to the aggregate
amount to be paid in respect of such Defaulted Interest or shall make
arrangements satisfactory to the Trustee for such deposit prior to the
date of the proposed payment, such money when deposited to be held in
trust for the benefit of the Persons entitled to such Defaulted Interest
as in this clause provided. Thereupon the Trustee shall fix a special
record date for the payment of such Defaulted Interest which shall be
not more than fifteen (15) days and not less than ten (10) days prior to
the date of the proposed payment and not less than ten (10) days after
the receipt by the Trustee of the notice of the proposed payment. The
Trustee shall promptly notify the Company of such special record date
and, in the name and at the expense of the Company, shall cause notice
of the proposed payment of such Defaulted Interest and the special
record date therefor to be mailed, first-class postage prepaid, to each
Noteholder, at his address as it appears in the Note register, not less
than ten (10) days prior to such special record date. Notice of the
proposed payment of such Defaulted Interest and the special record date
therefor having been so mailed, such Defaulted Interest shall be paid to
the Persons in whose names the Notes (or their respective Predecessor
Notes) were registered at the close of business on such special record
date and shall no longer be payable pursuant to the following clause
(2).
(2) The Company may make payment of any Defaulted Interest in any
other lawful manner not inconsistent with the requirements of any
securities exchange and automated quotation system on which the Notes
may be listed or designated for issuance, and upon such notice as may be
required by such exchange and automated quotation system, if, after
notice given by the Company to the Trustee of the proposed payment
pursuant to this clause, such manner of payment shall be deemed
practicable by the Trustee.
Section 2.4 EXECUTION OF NOTES. The Notes shall be signed in the name
and on behalf of the Company by the manual or facsimile signature of its
President, any Executive or Senior Vice President or any Vice President (whether
or not designated by a number or numbers or word or words added before or after
the title "Vice President") and attested by the manual or facsimile signature of
its Secretary or any of its Assistant Secretaries (which may be printed,
engraved or otherwise reproduced thereon, by
-13-
<PAGE>
facsimile or otherwise). Only such Notes as shall bear thereon a certificate of
authentication substantially in the form set forth on the form of Note attached
as Exhibit A hereto, manually executed by the Trustee (or an authenticating
agent appointed by the Trustee as provided by Section 16.11), shall be entitled
to the benefits of this Indenture or be valid or obligatory for any purpose.
Such certificate by the Trustee (or such an authenticating agent) upon any Note
executed by the Company shall be conclusive evidence that the Note so
authenticated has been duly authenticated and delivered hereunder and that the
holder is entitled to the benefits of this Indenture.
In case any officer of the Company who shall have signed any of the
Notes shall cease to be such officer before the Notes so signed shall have been
authenticated and delivered by the Trustee, or disposed of by the Company, such
Notes nevertheless may be authenticated and delivered or disposed of as though
the person who signed such Notes had not ceased to be such officer of the
Company; and any Note may be signed on behalf of the Company by such persons as
shall be, at the actual date of the execution of such Note, the proper officers
of the Company, although at the date of the execution of this Indenture any such
person was not such an officer.
Section 2.5 EXCHANGE AND REGISTRATION OF TRANSFER OF NOTES;
RESTRICTIONS ON TRANSFER; DEPOSITARY.
(a) The Company shall cause to be kept at the Corporate Trust
Office a register (the register maintained in such office and in any
other office or agency of the Company designated pursuant to Section 5.2
being herein sometimes collectively referred to as the "Note register")
in which, subject to such reasonable regulations as it may prescribe,
the Company shall provide for the registration of Notes and of transfers
of Notes. The Note register shall be in written form or in any form
capable of being converted into written form within a reasonably prompt
period of time. The Trustee is hereby appointed "Note registrar" for the
purpose of registering Notes and transfers of Notes as herein provided.
The Company may appoint one or more co-registrars in accordance with
Section 5.2.
Upon surrender for registration of transfer of any Note to the
Note registrar or any co-registrar, and satisfaction of the requirements
for such transfer set forth in this Section 2.5, the Company shall
execute, and the Trustee shall authenticate and make available for
delivery, in the name of the designated transferee or transferees, one
or more new Notes of any authorized denominations and of a like
aggregate principal amount and bearing such restrictive legends as may
be required by this Indenture.
Notes may be exchanged for other Notes of any authorized
denominations and of a like aggregate principal amount upon surrender of
the Notes to be
-14-
<PAGE>
exchanged at any such office or agency maintained by the Company
pursuant to Section 5.2. Whenever any Notes are so surrendered for
exchange, the Company shall execute, and the Trustee shall authenticate
and make available for delivery, the Notes which the Noteholder making
the exchange is entitled to receive bearing registration numbers not
contemporaneously outstanding.
All Notes issued upon any registration of transfer or exchange of
Notes shall be the 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.
All Notes presented or surrendered for registration of transfer
or for exchange, redemption or conversion shall (if so required by the
Company or the Note registrar) be duly endorsed, or be accompanied by a
written instrument or
instruments of transfer in form satisfactory to the Company, and the
Notes shall be duly executed by the Noteholder thereof or his attorney
duly authorized in writing.
No service charge shall be made for any registration of transfer
or exchange of Notes, but the Company may require payment of a sum
sufficient to cover any tax, assessment or other governmental charge
that may be imposed in connection with any registration of transfer or
exchange of Notes.
Neither the Company nor the Trustee nor any Note registrar nor
any Company registrar shall be required to exchange or register a
transfer of (a) any Notes for a period of fifteen (15) days next
preceding any selection of Notes to be redeemed or (b) any Notes or
portions thereof called for redemption pursuant to Article III or (c)
any Notes or portion thereof surrendered for conversion pursuant to
Article XV.
(b) So long as the Notes are eligible for book-entry settlement
with the Depositary, unless otherwise required by law or as otherwise
set forth herein, all Notes sold by the Initial Purchasers to QIBs shall
be represented by the Rule 144A Global Note and all Notes sold by the
Initial Purchasers to Persons who are not U.S. Persons (as defined in
Regulation S) who are acquiring the Notes in an offshore transaction
(each a "Non-U.S. Person") in accordance with Regulation S shall be
represented by the Regulation S Global Note, each to be registered in
the name of the Depositary or the nominee of the Depositary. The
transfer and exchange of beneficial interests in such Notes in global
form, which does not involve the issuance of a Note in certificated
form, shall be effected through the Depositary, in accordance with this
Indenture (including the restrictions on transfer set forth herein) and
the procedures of the Depositary therefor. Upon transfer of a beneficial
interest in a Note in global form to a transferee which takes delivery
in
-15-
<PAGE>
the form of a beneficial interest in the other Note in global form as
set forth in Section 2.5(h), the Trustee, or the Custodian at the
direction of the Trustee, will cause, in accordance with the standing
instructions and procedures existing between the Depositary and the
Custodian, the aggregate principal amount of the Note in global form
from which the beneficial interest is being transferred to be reduced,
and the aggregate principal amount of the Note in global form to which
the beneficial interest is being transferred to be increased, by the
principal amount of the beneficial interest being so transferred.
At any time at the request of the beneficial holder of an
interest in a Note in global form to obtain a Note in certificated form,
such beneficial holder shall be entitled to obtain a Note in
certificated form upon written request to the Trustee and the Custodian
in accordance with the standing instructions and procedures existing
between the Custodian and Depositary for the issuance thereof. Upon
receipt of any such request, the Trustee, or the Custodian at the
direction of the Trustee, will cause, in accordance with the standing
instructions and procedures existing between the Depositary and the
Custodian, the aggregate principal amount of the respective Note in
global form to be reduced by the principal amount of the Note in
certificated form issued upon such request to such beneficial holder
and, following such reduction, the Company will execute and the Trustee
will authenticate and make available for delivery to such beneficial
holder (or its nominee) a Note or Notes in certificated form in the
appropriate aggregate principal amount in the name of such beneficial
holder (or its nominee) and bearing such restrictive legends as may be
required by this Indenture.
Any transfer of a beneficial interest in a Note in global form
which cannot be effected through book-entry settlement must be effected
by the delivery to the transferee (or its nominee) of a Note or Notes in
certificated form registered in the name of the transferee (or its
nominee) on the books maintained by the Note registrar in accordance
with the transfer restrictions set forth herein. With respect to any
such transfer, the Trustee, or the Custodian at the direction of the
Trustee, will cause, in accordance with the standing instructions and
procedures existing between the Depositary and the Custodian, the
aggregate principal amount of the respective Note in global form to be
reduced by the principal amount of the beneficial interest in the Note
in global form being transferred and, following such reduction, the
Company will execute and the Trustee will authenticate and make
available for delivery to the transferee (or such transferee's nominee,
as the case may be), a Note or Notes in certificated form in the
appropriate aggregate principal amount in the name of such transferee
(or its nominee) and bearing such restrictive legends as may be required
by this Indenture.
-16-
<PAGE>
(c) Any holder desiring to exchange a Note in certificated form
legended in accordance with this Section 2.5 for a beneficial interest
in Notes represented by the Rule 144A Global Note must provide a
certification that it is a qualified institutional buyer (a "Rule 144A
Exchange Certificate"), or alternatively, after the Unrestricted Date,
that the Note was purchased in a transaction complying with Rule 903 or
Rule 904 of Regulation S (a "Regulation S Exchange Certificate"). Any
holder desiring to exchange a Note in certificated form legended in
accordance with this Section 2.5 for a beneficial interest in Notes
represented by the Regulation S Global Note must provide a Regulation S
Exchange Certificate.
Any holder desiring to transfer a Note in certificated form
legended in accordance with this Section 2.5 to a transferee which takes
delivery in the form of a beneficial interest in Notes represented by
the Rule 144A Global Note must provide a Rule 144A Transfer Certificate,
or alternatively, provided that the transfer takes place after the
Unrestricted Date, a Regulation S Transfer Certificate. Any holder
desiring to transfer a Note in certificated form legended in accordance
with this Section 2.5 to a transferee which takes delivery in the form
of a beneficial interest in Notes represented by the Regulation S Global
Note must provide a Regulation S Transfer Certificate.
Any holder desiring to exchange an unlegended certificated Note
for, or transfer an unlegended certificated Note to a transferee which
takes delivery in the form of, a beneficial interest in Notes
represented by either Global Note may do so without need for such
certification, except that on and until the Unrestricted Date, if such
holder desires to exchange for, or transfer to a transferee which takes
delivery in the form of, a beneficial interest in Notes represented by
the Rule 144A Global Note, such holder must certify, in the case of an
exchange, in the form of a Rule 144A Exchange Certificate or, in the
case of a transfer, in the form of a Rule 144A Transfer Certificate.
So long as the Notes are eligible for book-entry settlement, or
unless otherwise required by law, upon any transfer or exchange of a
Note in certificated form as set forth in this Section 2.5(c) and upon
receipt of the Note or Notes in certificated form being so transferred,
together with any certification required by this Section 2.5(c) (or
other evidence satisfactory to the Trustee), the Trustee shall make, or
direct the Custodian to make, an endorsement on the relevant Note in
global form to reflect an increase in the aggregate principal amount of
the Notes represented by such Note in global form, and the Trustee shall
cancel such Note or Notes in certificated form and cause, or direct the
Custodian to cause, in accordance with the standing instructions and
procedures existing between the Depositary and the Custodian, the
aggregate principal amount of Notes represented by such Note in global
form to be increased accordingly; PROVIDED that no Note in
-17-
<PAGE>
certificated form, or portion thereof, in respect of which the Company
or an Affiliate of the Company held any beneficial interest shall be
included in such Note in global form until such Note in certificated
form is freely tradable in accordance with Rule 144(k) of the Securities
Act; PROVIDED FURTHER that the Trustee shall issue Notes in certificated
form upon any transfer of a beneficial interest in a Note in global form
to the Company or an Affiliate of the Company.
Any Note in global form may be endorsed with or have
incorporated in the text thereof such legends or recitals or changes not
inconsistent with the provisions of this Indenture as may be required by
the Custodian, the Depositary or by the National Association of
Securities Dealers, Inc. in order for the Notes to be tradable on the
PORTAL Market or as may be required for the Notes to be tradable on any
other market developed for trading of securities pursuant to Rule 144A
or Regulation S under the Securities Act or required to comply with any
applicable law or any regulation thereunder or with the rules and
regulations of any securities exchange or automated quotation system
upon which the Notes may be listed or traded or to conform with any
usage with respect thereto, or to indicate any special limitations or
restrictions to which any particular Notes are subject.
(d) Every Note that bears or is required under this Section
2.5(d) to bear the legend set forth in this Section 2.5(d) (together
with any Common Stock issued upon conversion of the Notes and required
to bear the legend set forth in Section 2.5(e), collectively, the
"Restricted Securities") shall be subject to the restrictions on
transfer set forth in this Section 2.5(d) (including those set forth in
the legend set forth below) unless such restrictions on transfer shall
be waived by written consent of the Company, and the holder of each such
Restricted Note, by such Noteholder's acceptance thereof, agrees to be
bound by all such restrictions on transfer. As used in Sections 2.5(d)
and 2.5(e), the term "transfer" encompasses any sale, pledge, transfer
or other disposition whatsoever of any Restricted Security.
Unless determined otherwise by the Company in accordance with
applicable law, until three (3) years after the original issuance date
of any Note, any certificate evidencing such Note (and all securities
issued in exchange therefor or substitution thereof, other than Common
Stock, if any, issued upon conversion thereof, which shall bear the
legend set forth in Section 2.5(e), if applicable) shall bear a legend
in substantially the following form, unless otherwise agreed by the
Company in writing, with written notice thereof to the Trustee:
THE NOTE EVIDENCED HEREBY HAS NOT BEEN REGISTERED
UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR ANY STATE SECURITIES LAWS, AND,
-18-
<PAGE>
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES
OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS
SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF,
THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) OR (B) IT IS AN INSTITUTIONAL "ACCREDITED
INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2), (3) OR (7) UNDER
THE SECURITIES ACT) ("INSTITUTIONAL ACCREDITED INVESTOR") OR (C)
IT IS NOT A U.S. PERSON AND IS ACQUIRING THE NOTE EVIDENCED
HEREBY IN AN OFFSHORE TRANSACTION; (2) AGREES THAT IT WILL NOT,
WITHIN THREE YEARS AFTER THE ORIGINAL ISSUANCE OF THE NOTE
EVIDENCED HEREBY, RESELL OR OTHERWISE TRANSFER THE NOTE EVIDENCED
HEREBY OR THE COMMON STOCK ISSUABLE UPON CONVERSION OF SUCH NOTE
EXCEPT (A) TO SUNGLASS HUT INTERNATIONAL, INC. OR ANY SUBSIDIARY
THEREOF, (B) INSIDE THE UNITED STATES TO A QUALIFIED
INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE
SECURITIES ACT, (C) INSIDE THE UNITED STATES TO AN INSTITUTIONAL
ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO
THE BANK OF NEW YORK, AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS
APPLICABLE), A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS
AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THE
NOTE EVIDENCED HEREBY (THE FORM OF WHICH LETTER CAN BE OBTAINED
FROM SUCH TRUSTEE OR A SUCCESSOR TRUSTEE, AS APPLICABLE), (D)
OUTSIDE THE UNITED STATES IN COMPLIANCE WITH RULE 904 UNDER THE
SECURITIES ACT, (E) PURSUANT TO THE EXEMPTION FROM REGISTRATION
PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR
(F) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED
EFFECTIVE UNDER THE SECURITIES ACT (AND WHICH CONTINUES TO BE
EFFECTIVE AT THE TIME OF SUCH TRANSFER); AND (3) AGREES THAT IT
WILL DELIVER TO EACH PERSON TO WHOM THE NOTE EVIDENCED HEREBY IS
TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.
IN CONNECTION WITH ANY TRANSFER OF THE NOTE EVIDENCED HEREBY
WITHIN THREE YEARS AFTER THE ORIGINAL ISSUANCE OF SUCH NOTE, THE
HOLDER MUST
-19-
<PAGE>
CHECK THE APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF
RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS
CERTIFICATE TO THE BANK OF NEW YORK, AS TRUSTEE (OR A SUCCESSOR
TRUSTEE, AS APPLICABLE). IF THE PROPOSED TRANSFEREE IS AN
INSTITUTIONAL ACCREDITED INVESTOR OR A PURCHASER WHO IS NOT A
U.S. PERSON, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO
THE BANK OF NEW YORK, AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS
APPLICABLE), SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER
INFORMATION AS IT MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH
TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT. THIS LEGEND WILL BE REMOVED UPON ANY TRANSFER OF
THE NOTE EVIDENCED HEREBY AFTER THE EXPIRATION OF THREE YEARS
FROM THE ORIGINAL ISSUANCE OF THE NOTE EVIDENCED HEREBY. AS USED
HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND
"U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S
UNDER THE SECURITIES ACT.
Notwithstanding the foregoing, unless determined otherwise by the
Company in accordance with applicable law, after the fortieth day
following the later of the commencement of the offering and the closing
date (as those terms are used in Regulation S) (the "Unrestricted Date")
relating to such Note, any Note in certificated form issued upon
transfer or exchange of beneficial interests in Notes represented by the
Regulation S Global Note will not bear the foregoing legend. Prior to
the Unrestricted Date, the Company shall provide to the Trustee an
Officers' Certificate informing the Trustee of the date that will be the
Unrestricted Date.
Any Note (or security issued in exchange or substitution
therefor) as to which such restrictions on transfer shall have expired
in accordance with their terms or as to the conditions for removal of
the foregoing legend set forth therein have been satisfied may, upon
surrender of such Note for exchange to the Note registrar in accordance
with the provisions of this Section 2.5, be exchanged for a new Note or
Notes, of like tenor and aggregate principal amount, which shall not
bear the restrictive legend required by this Section 2.5(d); provided,
that there is delivered to the Company and the Trustee such satisfactory
evidence, in the form of a Regulation S Transfer Certificate or an
Opinion of Counsel, that neither the legend nor the restrictions on
transfer set forth therein are required to ensure compliance with the
provisions of the Securities Act.
-20-
<PAGE>
Notwithstanding any other provisions of this Indenture (other
than the provisions set forth in the second and third paragraphs of
Section 2.5(b) and in this Section 2.5(d)), record ownership of a Note
in global form may not be transferred as a whole or in part except by
the Depositary to a nominee of the Depositary or by a nominee of the
Depositary to the Depositary or another nominee of the Depositary or by
the Depositary or any such nominee to a successor Depositary or a
nominee of such successor Depositary.
The Depositary shall be a clearing agency registered under the
Exchange Act. The Company initially appoints The Depository Trust
Company to act as Depositary with respect to the Notes in global form.
Initially, the global Note shall be issued to the Depositary, registered
in the name of Cede & Co., as the nominee of the Depositary, and
deposited with the Custodian for Cede & Co.
If at any time the Depositary for a Note in global form notifies
the Company that it is unwilling or unable to continue as Depositary for
such Note, the Company may appoint a successor Depositary with respect
to such Note. If a successor Depositary is not appointed by the Company
within ninety (90) days after the Company receives such notice, the
Company will execute, and the Trustee, upon receipt of an Officers'
Certificate for the authentication and delivery of Notes, will
authenticate and deliver, Notes in certificated form, in an aggregate
principal amount equal to the principal amount of such Note in global
form, in exchange for such Note in global form.
If a Note in certificated form is issued in exchange for any
portion of a Note in global form after the close of business at the
office or agency where such exchange occurs on any record date and
before the opening of business at such office or agency on the next
succeeding interest payment date, interest will not be payable on such
interest payment date in respect of such Note, but will be payable on
such interest payment date only to the Person to whom interest in
respect of such portion of such Note in global form is payable in
accordance with the provisions of this Indenture.
Notes in certificated form issued in exchange for all or a part
of a Note in global form pursuant to this Section 2.5 shall be
registered in such names and in such authorized denominations as the
Depositary, pursuant to instructions from its direct or indirect
participants or otherwise, shall instruct the Trustee in writing. Upon
execution and authentication, the Trustee shall make available for
delivery such Notes in certificated form to the Persons in whose names
such Notes in certificated form are so registered.
-21-
<PAGE>
At such time as all interests in a Note in global form have been
redeemed, converted, canceled, exchanged for Notes in certificated form,
or transferred to a transferee who receives Notes in certificated form
thereof, such Note in global form shall, upon receipt thereof, be
canceled by the Trustee in accordance with standing procedures and
instructions existing between the Depositary and the Custodian. At any
time prior to such cancellation, if any interest in a global Note is
exchanged for Notes in certificated form, redeemed, converted,
repurchased or canceled, exchanged for Notes in certificated form or
transferred to a transferee who receives Notes in certificated form
therefor or any Note in certificated form is exchanged or transferred
for part of a Note in global form, the principal amount of such Note in
global form shall, in accordance with the standing procedures and
instructions existing between the Depositary and the Custodian, be
appropriately reduced or increased, as the case may be, and an
endorsement shall be made on such Note in global form, by the Trustee or
the Custodian, at the direction of the Trustee, to reflect such
reduction or increase.
(e) Unless determined otherwise by the Company in accordance with
applicable law, until three (3) years after the original issuance date
of any Note, any stock certificate representing Common Stock issued upon
conversion of such Note shall bear a legend in substantially the
following form, unless such Common Stock has been sold pursuant to a
registration statement that has been declared effective under the
Securities Act (and which continues to be effective at the time of such
transfer) or such Common Stock has been issued upon conversion of Notes
that have been transferred pursuant to a registration statement that has
been declared effective under the Securities Act, or unless otherwise
agreed by the
Company in writing with written notice thereof to the transfer agent:
THE COMMON STOCK EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER
THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), OR ANY STATE SECURITIES LAWS, AND, ACCORDINGLY, MAY NOT BE
OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE
ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH IN THE
FOLLOWING SENTENCE. THE HOLDER HEREOF AGREES THAT UNTIL THE
EXPIRATION OF THREE YEARS AFTER THE ORIGINAL ISSUANCE OF THE NOTE
UPON THE CONVERSION OF WHICH THE COMMON STOCK EVIDENCED HEREBY
WAS ISSUED, (1) IT WILL NOT RESELL OR OTHERWISE TRANSFER THE
COMMON STOCK EVIDENCED HEREBY EXCEPT (A) TO SUNGLASS HUT
INTERNATIONAL, INC. OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE
UNITED STATES TO A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN
RULE 144A UNDER
-22-
<PAGE>
THE SECURITIES ACT) IN COMPLIANCE WITH RULE 144A, (C) INSIDE THE
UNITED STATES TO AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS
DEFINED IN RULE 501(A)(1), (2), (3) OR (7) UNDER THE SECURITIES
ACT) THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO AMERICAN STOCK
TRANSFER & TRUST COMPANY, AS TRANSFER AGENT (OR A SUCCESSOR
TRANSFER AGENT, AS APPLICABLE), A SIGNED LETTER CONTAINING
CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE
RESTRICTIONS ON TRANSFER OF THE COMMON STOCK EVIDENCED HEREBY
(THE FORM OF WHICH LETTER CAN BE OBTAINED FROM SUCH TRANSFER
AGENT OR A SUCCESSOR TRANSFER AGENT, AS APPLICABLE), (D) OUTSIDE
THE UNITED STATES IN COMPLIANCE WITH RULE 904 UNDER THE
SECURITIES ACT, (E) PURSUANT TO THE EXEMPTION FROM REGISTRATION
PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE), OR
(F) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED
EFFECTIVE UNDER THE SECURITIES ACT (AND WHICH CONTINUES TO BE
EFFECTIVE AT THE TIME OF SUCH TRANSFER); (2) PRIOR TO SUCH
TRANSFER (OTHER THAN A TRANSFER PURSUANT TO CLAUSE 1(F) ABOVE),
IT WILL FURNISH TO AMERICAN STOCK TRANSFER & TRUST COMPANY, AS
TRANSFER AGENT (OR A SUCCESSOR TRANSFER AGENT, AS APPLICABLE),
SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS IT
MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING
MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT
AND (3) IT WILL DELIVER TO EACH PERSON TO WHOM THE COMMON STOCK
EVIDENCED HEREBY IS TRANSFERRED (OTHER THAN A TRANSFER PURSUANT
TO CLAUSE 1(F) ABOVE) A NOTICE SUBSTANTIALLY TO THE EFFECT OF
THIS LEGEND. THIS LEGEND WILL BE REMOVED UPON THE EARLIER OF THE
TRANSFER OF THE COMMON STOCK EVIDENCED HEREBY PURSUANT TO CLAUSE
1(F) ABOVE OR UPON ANY TRANSFER OF THE COMMON STOCK EVIDENCED
HEREBY AFTER THE EXPIRATION OF THREE YEARS FROM THE ORIGINAL
ISSUANCE OF THE NOTE UPON THE CONVERSION OF WHICH THE COMMON
STOCK EVIDENCED HEREBY WAS ISSUED OR UPON THE EARLIER
SATISFACTION OF AMERICAN STOCK TRANSFER & TRUST COMPANY, AS
TRANSFER AGENT (OR A SUCCESSOR
-23-
<PAGE>
TRANSFER AGENT, AS APPLICABLE), THAT THE COMMON STOCK HAS BEEN OR
IS BEING OFFERED AND SOLD IN COMPLIANCE WITH RULE 904 UNDER THE
SECURITIES ACT. AS USED HEREIN, THE TERMS "UNITED STATES" AND
"U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S
UNDER THE SECURITIES ACT.
Notwithstanding the foregoing, unless determined otherwise by the
Company in accordance with applicable law, after the Unrestricted Date,
any Common Stock issued upon conversion of a Note not bearing the legend
set forth in Section 2.5(d) or upon conversion of a Note issued upon
transfer or exchange of beneficial interests in Notes represented by the
Regulation S Global Note will not bear the foregoing legend.
Any such Common Stock as to which such restrictions on transfer
shall have expired in accordance with their terms or as to which the
conditions for removal of the foregoing legend set forth therein have
been satisfied may, upon surrender of the certificates representing such
shares of Common Stock for exchange in accordance with the procedures of
the transfer agent for the Common Stock, be exchanged for a new
certificate or certificates for a like number of shares of Common Stock,
which shall not bear the restrictive legend required by this Section
2.5(e); PROVIDED, that there is delivered to the Company and the Trustee
such satisfactory evidence, in the form of a Regulation S Transfer
Certificate or an Opinion of Counsel, that neither the legend nor the
restrictions on transfer set forth therein are required to ensure
compliance with the provisions of the Securities Act.
(f) Unless determined otherwise by the Company in accordance with
applicable law, any certificate evidencing a Note that has been
transferred to an Affiliate of the Company within three years after the
original issuance date of the Note, as evidenced by a notation on the
form of Assignment provided for herein for such transfer or in the
representation letter delivered in respect thereof, shall, until three
years after the last date on which the Company or any Affiliate of the
Company was an owner of such Note, bear a legend in substantially the
following form, unless otherwise agreed by the Company (with written
notice thereof to the Trustee):
THE NOTE EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY
STATE SECURITIES LAWS, AND, ACCORDINGLY, MAY NOT BE OFFERED OR
SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR
BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING
-24-
<PAGE>
SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER AGREES (1) THAT
IT WILL NOT RESELL OR OTHERWISE TRANSFER THE NOTE EVIDENCED
HEREBY OR THE COMMON STOCK ISSUABLE UPON CONVERSION OF SUCH NOTE
EXCEPT (A) TO SUNGLASS HUT INTERNATIONAL, INC. OR ANY SUBSIDIARY
THEREOF, (B) IN A TRANSACTION REGISTERED UNDER THE SECURITIES ACT
OR (C) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY
RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) AND (2) THAT IT
WILL DELIVER TO EACH PERSON TO WHOM THE NOTE EVIDENCED HEREBY IS
TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.
THIS LEGEND SHALL BE REMOVED UPON THE TRANSFER OF THE NOTE
EVIDENCED HEREBY, OR THE COMMON STOCK ISSUABLE UPON CONVERSION OF
SUCH NOTE, PURSUANT TO THE IMMEDIATELY PRECEDING SENTENCE. IF THE
PROPOSED TRANSFER IS PURSUANT TO THE EXEMPTION FROM REGISTRATION
PROVIDED BY RULE 144 UNDER THE SECURITIES ACT, THE HOLDER MUST,
PRIOR TO SUCH TRANSFER, FURNISH TO THE BANK OF NEW YORK, AS
TRUSTEE (OR A SUCCESSOR TRUSTEE, AS APPLICABLE), SUCH
CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS IT MAY
REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE
PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT
TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. AS USED
HEREIN, THE TERMS "UNITED STATES" AND "U.S. PERSON" HAVE THE
MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.
Any stock certificate representing Common Stock issued upon
conversion of such Note shall also bear a legend in substantially the
form indicated above, unless otherwise agreed by the Company (with
written notice thereof to the Trustee).
(g) Notwithstanding any provision of Section 2.5 to the contrary,
in the event Rule 144(k) as promulgated under the Securities Act (or any
successor rule) is amended to shorten the three-year period under Rule
144(k) (or the corresponding period under any successor rule), from and
after receipt by the Trustee of the Officers' Certificate and Opinion of
Counsel provided for in this Section 2.5(g), (i) the references in the
first sentence of the second paragraph of Section 2.5(d) to "three (3)
years" and in the restrictive legend set forth in such paragraph to
"THREE YEARS" shall be deemed for all purposes hereof to be references
to such shorter period, (ii) the references in the first paragraph of
Section 2.5(e) to "three (3) years" and in the restrictive legend set
forth in such
-25-
<PAGE>
paragraph to "THREE YEARS" shall be deemed for all purposes hereof to be
references to such shorter period and (iii) all corresponding references
in the Notes and the restrictive legends on the Restricted Securities
shall be deemed for all purposes hereof to be references to such shorter
period, provided that such changes shall not become effective if they
are otherwise prohibited by, or would otherwise cause a violation of,
the then-applicable federal securities laws. As soon as practicable
after the Company has knowledge of the effectiveness of any such
amendment to shorten the three-year period under Rule 144(k) (or the
corresponding period under any successor rule), unless such changes
would otherwise be prohibited by, or would otherwise cause a violation
of, the then-applicable securities laws, the Company shall provide to
the Trustee an Officers' Certificate and Opinion of Counsel informing
the Trustee of the effectiveness of such amendment and the effectiveness
of the foregoing changes to Sections 2.5(d) and 2.5(e) and the
restrictive legends on the Restricted Securities. This Section 2.5(g)
shall apply to successive amendments to Rule 144(k) (or any successor
rule) shortening the holding period thereunder.
(h) On and prior to the Unrestricted Date, a beneficial interest
in the Notes represented by the Regulation S Global Note may be
transferred to a person who takes delivery in the form of a beneficial
interest in the Notes represented by Rule 144A Global Note only upon
receipt by the Trustee from the transferor of a written certification (a
"Rule 144A Transfer Certificate") to the effect that such transfer is
being made to a person who the transferor reasonably believes is
purchasing for its own account or accounts as to which its exercises
sole investment discretion and that such person and each such account is
a qualified institutional buyer within the meaning of Rule 144A, in each
case in a transaction meeting the requirements of Rule 144A and in
accordance with any applicable securities laws of any state of the
United States or any other jurisdiction. After the Unrestricted Date,
such certification requirements will no longer apply to such transfers.
Beneficial interests in the Notes represented by the 144A Global
Note may be transferred to a person who takes delivery in the form of a
beneficial interest in the Notes represented by the Regulations S Global
Note, whether before, on or after the Unrestricted Date, only upon
receipt by the Trustee from the transferor of a written certification (a
"Regulation S Transfer Certificate") to the effect that such transfer is
being made in accordance with Rule 904 of Regulation S and that, if such
transfer occurs on or prior to the Unrestricted Date, the interest
transferred
-26-
<PAGE>
will be held immediately thereafter, until after the Unrestricted Date,
through the Euroclear System or Cedel Bank, S.A.
Any beneficial interest in Notes represented by either of the
foregoing global notes that is transferred to a person who takes
delivery in the form of a beneficial interest in Notes represented by
the other global note will, upon transfer, cease to be a beneficial
interest in Notes represented by such global note and become a
beneficial interest in Notes represented by the other global note and,
accordingly, will thereafter be subject to all transfer restrictions and
other procedures applicable to beneficial interests in Notes represented
by such other global note for as long as it remains such an interest.
Any beneficial interest in Notes represented by the 144A Global
Note that is transferred to an institutional accredited investor which
is not a QIB will be delivered in the form of a definitive note in
registered and certificated form and shall cease to be an interest in
Notes represented by such 144A Global Note and, accordingly, will
thereafter be subject to all transfer restrictions and other procedures
applicable to a certificated held by institutional accredited investors.
No person other than a QIB or a Non-U.S. Person may own a
beneficial interest in the 144A Global Note.
Section 2.6 MUTILATED, DESTROYED, LOST OR STOLEN NOTES. In case any Note
shall become mutilated or be destroyed, lost or stolen, the Company in its
discretion may execute, and upon delivery by it of a written order pursuant to
Section 2.1 hereof, the Trustee or an authenticating agent appointed by the
Trustee shall authenticate and deliver, a new Note, bearing a number not
contemporaneously outstanding, in exchange and substitution for the mutilated
Note, or in lieu of and in substitution for the Note so destroyed, lost or
stolen. In every case the applicant for a substituted Note shall furnish to the
Company, to the Trustee and, if applicable, to such authenticating agent such
security or indemnity as may be required by them to save each of them harmless
for any loss, liability, cost or expense caused by or connected with such
substitution, and, in every case of destruction, loss or theft, the applicant
shall also furnish to the Company, to the Trustee and, if applicable, to such
authenticating agent evidence to their satisfaction of the destruction, loss or
theft of such Note and of the ownership thereof.
The Trustee or such authenticating agent may authenticate any such
substituted Note and deliver the same upon the receipt of such security or
indemnity as the Trustee, the Company and, if applicable, such authenticating
agent may require. Upon the issuance of any substituted Note, the Company may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses connected
therewith. In case any Note which has matured
-27-
<PAGE>
or is about to mature or has been called for redemption or is about to be
converted into Common Stock shall become mutilated or be destroyed, lost or
stolen, the Company may, instead of issuing a substitute Note, pay or authorize
the payment of or convert or authorize the conversion of the same (without
surrender thereof except in the case of a mutilated Note), as the case may be,
if the applicant for such payment or conversion shall furnish to the Company, to
the Trustee and, if applicable, to such authenticating agent such security or
indemnity as may be required by them to save each of them harmless for any loss,
liability, cost or expense caused by or connected with such substitution, and,
in case of destruction, loss or theft, evidence satisfactory to the Company, the
Trustee and, if applicable, any paying agent or conversion agent of the
destruction, loss or theft of such Note and of the ownership thereof.
Every substitute Note issued pursuant to the provisions of this Section
2.6 by virtue of the fact that any Note is mutilated, destroyed, lost or stolen
shall constitute an additional contractual obligation of the Company, whether or
not the destroyed, lost or stolen Note shall be found at any time, and shall be
entitled to all the benefits of (but shall be subject to all the limitations set
forth in) this Indenture equally and proportionately with any and all other
Notes duly issued hereunder. To the extent permitted by law, all Notes shall be
held and owned upon the express condition that the foregoing provisions are
exclusive with respect to the replacement or payment or conversion of mutilated,
destroyed, lost or stolen Notes and shall preclude any and all other rights or
remedies notwithstanding any law or statute existing or hereafter enacted to the
contrary with respect to the replacement or payment or conversion of negotiable
instruments or other securities without their surrender.
Section 2.7 TEMPORARY NOTES. Pending the preparation of Notes in
certificated forms, the Company may execute and the Trustee or an authenticating
agent appointed by the Trustee shall, upon the written request of the Company,
authenticate and deliver temporary Notes (printed or lithographed). Temporary
Notes shall be issuable in any authorized denomination, and substantially in the
form of the Notes in certificated form, but with such omissions, insertions and
variations as may be appropriate for temporary Notes, all as may be determined
by the Company. Every such temporary Note shall be executed by the Company and
authenticated by the Trustee or such authenticating agent upon the same
conditions and in substantially the same manner, and with the same effect, as
the Notes in certificated form. Without unreasonable delay the Company will
execute and deliver to the Trustee or such authenticating agent Notes in
certificated form (other than in the case of Notes in global form), and
thereupon any or all temporary Notes (other than any such Note in global form)
may be surrendered in exchange therefor at each office or agency maintained by
the Company pursuant to Section 5.2, and the Trustee or such authenticating
agent shall authenticate and deliver in exchange for such temporary Notes an
equal aggregate principal amount of Notes in certificated form. Such exchange
shall be made by the Company at its own expense and without any charge therefor.
Until
-28-
<PAGE>
so exchanged, the temporary Notes shall in all respects be entitled to the same
benefits and subject to the same limitations under this Indenture as Notes in
certificated form authenticated and delivered hereunder.
Section 2.8 CANCELLATION OF NOTES PAID, ETC. All Notes surrendered for
the purpose of payment, redemption, conversion, exchange or registration of
transfer shall, if surrendered to the Company or any paying agent or any Note
registrar or any conversion agent, be surrendered to the Trustee and promptly
canceled by it, or, if surrendered to the Trustee, shall be promptly canceled by
it, and no Notes shall be issued in lieu thereof except as expressly permitted
by any of the provisions of this Indenture. The Trustee shall return such
canceled Notes to the Company (unless the Company directs it to do otherwise).
If the Company shall acquire any of the Notes, such acquisition shall not
operate as a redemption or satisfaction of the indebtedness represented by such
Notes unless and until the same are delivered to the Trustee for cancellation.
Section 2.9 CUSIP NUMBERS. The Company in issuing the Notes may use
"CUSIP" numbers (if then generally in use), and, if so, the Trustee shall use
"CUSIP" numbers in notices of redemption as a convenience to holders; PROVIDED
that any such notice may state that no representation is made as to the
correctness of such numbers either as printed on the Notes or as contained in
any notice of a redemption and that reliance may be placed only on the other
identification numbers printed on the Notes, and any such redemption shall not
be affected by any defect in or omission of such numbers. The Company will
promptly notify the Trustees of any change in the CUSIP numbers.
ARTICLE III
REDEMPTION OF NOTES
Section 3.1 REDEMPTION PRICES. The Company may not redeem the Notes
prior to June 17, 1998. At any time on or after June 17, 1998, the Company may,
at its option, redeem all or from time to time any part of the Notes on any date
prior to maturity, upon notice as set forth in Section 3.2, and at the optional
redemption price set forth in the form of Note attached as Exhibit A hereto,
together with accrued interest to and including the date fixed for redemption,
except that prior to June 17, 1999, the Notes will not be redeemable at the
option of the Company unless the Closing Price of the Common Stock shall have
exceeded the product of the Conversion Price then in effect times 140% (rounded
to the nearest cent) for 20 Trading Days within a period of 30 consecutive
Trading Days ending within five Trading Days prior to the notice of redemption.
Section 3.2 NOTICE OF REDEMPTION: SELECTION OF NOTES. In case the
Company shall desire to exercise the right to redeem all or, as the case may be,
any part of the Notes pursuant to Section 3.1, it shall fix a date for
redemption and it or, at its request, the
-29-
<PAGE>
Trustee, in the name of and at the expense of the Company, shall mail or cause
to be mailed a notice of such redemption at least 30 days prior to the date
fixed for redemption to the holders of Notes so to be redeemed as a whole or in
part at their last addresses as the same appear on the Note register (PROVIDED
that if the Company shall give such notice, it shall also give written notice,
and written notice of the Notes to be redeemed, to the Trustee). Such mailing
shall be by first class mail. The notice if mailed in the manner herein provided
shall be conclusively presumed to have been duly given, whether or not the
holder receives such notice. In any case, failure to give such notice by mail or
any defect in the notice to the holder of any Note designated for redemption as
a whole or in part shall not affect the validity of the proceedings for the
redemption of any other Note.
Each such notice of redemption shall specify the aggregate principal
amount of Notes to be redeemed, the CUSIP numbers, if any, the date fixed for
redemption, the redemption price at which Notes are to be redeemed, the place or
places of payment, that payment will be made upon presentation and surrender of
such Notes, that interest accrued to the date fixed for redemption will be paid
as specified in said notice, and that on and after said date interest thereon or
on the portion thereof to be redeemed will cease to accrue. Such notice shall
also state the current Conversion Price and the date on which the right to
convert such Notes or portions thereof into Common Stock will expire. If fewer
than all the Notes are to be redeemed, the notice of redemption shall identify
the Notes to be redeemed. In case any Note is to be redeemed in part only, the
notice of redemption shall state the portion of the principal amount thereof to
be redeemed and shall state that on and after the date fixed for redemption,
upon surrender of such Note, a new Note or Notes in principal amount equal to
the unredeemed portion thereof will be issued.
On or prior to the redemption date specified in the notice of redemption
given as provided in this Section 3.2, the Company will deposit with the Trustee
or with one or more paying agents (or, if the Company is acting as its own
paying agent, set aside, segregate and hold in trust as provided in Section 5.4)
an amount of money sufficient to redeem on the redemption date all the Notes (or
portions thereof) so called for redemption (other than those theretofore
surrendered for conversion into Common Stock) at the appropriate redemption
price, together with accrued interest to and including the date fixed for
redemption; PROVIDED that if such payment is made on the redemption date it must
be received by the Trustee or paying agent, as the case may be, by 10:00 a.m.,
New York City time, on such date. If any Note called for redemption is converted
pursuant hereto, any money deposited with the Trustee or any paying agent or so
segregated and held in trust for the redemption of such Note shall be paid to
the Company upon its written request, or, if then held by the Company, shall be
discharged from such trust. The Company will give the Trustee written notice in
the form of an Officers' Certificate not fewer than forty-five (45) days (or
such shorter period of time as may be acceptable to the
-30-
<PAGE>
Trustee) prior to the redemption date as to the aggregate principal amount of
Notes to be redeemed.
If fewer than all the Notes are to be redeemed, the Trustee shall select
the Notes or portions thereof to be redeemed (in principal amounts of $1,000 or
integral multiples thereof) by lot or, in its discretion, on a PRO RATA basis.
If any Note selected for partial redemption is converted in part after such
selection, the converted portion of such Note shall be deemed (so far as may be)
to be the portion to be selected for redemption. The Notes (or portions thereof)
so selected shall be deemed duly selected for redemption for all purposes
hereof, notwithstanding that any such Note is converted as a whole or in part
before the mailing of the notice of redemption.
Upon any redemption of less than all Notes, the Company and the Trustee
may (but need not) treat as outstanding any Notes surrendered for conversion
during the period of fifteen (15) days next preceding the mailing of a notice of
redemption and may (but need not) treat as outstanding any Note authenticated
and delivered during such period in exchange for the unconverted portion of any
Note converted in part during such period.
Section 3.3 PAYMENT OF NOTES CALLED FOR REDEMPTION. If notice of
redemption has been given as above provided, the Notes or portion of Notes with
respect to which such notice has been given shall, unless converted into Common
Stock pursuant to the terms hereof, become due and payable on the date and at
the place or places stated in such notice at the applicable redemption price,
together with interest accrued to and including the date fixed for redemption,
and after said date (unless the Company shall default in the payment of such
Notes at the redemption price, together with interest accrued to said date)
interest on the Notes or portion of Notes so called for redemption shall cease
to accrue, and such Notes shall cease after the close of business on the
Business Day next preceding the date fixed for redemption to be convertible into
Common Stock and, except as provided in Sections 8.5 and 13.4, to be entitled to
any benefit or security under this Indenture, and the holders thereof shall have
no right in respect of such Notes except the right to receive the redemption
price thereof and unpaid interest to and including the date fixed for
redemption. On presentation and surrender of such Notes at a place of payment
specified in said notice, the said Notes or the specified portions thereof shall
be paid and redeemed by the Company at the applicable redemption price, together
with interest accrued thereon to and including the date fixed for redemption;
PROVIDED that, if the applicable redemption date is an interest payment date,
the semi-annual payment of interest becoming due on such date shall be payable
to the holders of such Notes registered as such on the relevant record date
instead of the holders surrendering such Notes for redemption on such date.
Upon presentation of any Note redeemed in part only, the Company shall
execute and the Trustee shall authenticate and deliver to the holder thereof, at
the expense of the
-31-
<PAGE>
Company, a new Note or Notes, of authorized denominations, in principal amount
equal to the unredeemed portion of the Notes so presented.
Notwithstanding the foregoing, the Trustee shall not redeem any Notes or
mail any notice of optional redemption during the continuance of a default in
payment of interest or premium on the Notes or of any Event of Default of which,
in the case of any Event of Default other than under Sections 7.1(a) or 7.1(b),
a Responsible Officer of the Trustee has knowledge. If any Note called for
redemption shall not be so paid upon surrender thereof for redemption, the
principal and premium, if any, shall, until paid or duly provided for, bear
interest from the date fixed for redemption at the rate borne by the Note and
such Note shall remain convertible into Common Stock until the principal and
premium, if any, shall have been paid or duly provided for.
Section 3.4 CONVERSION ARRANGEMENT ON CALL FOR Redemption. In connection
with any redemption of Notes, the Company may arrange for the purchase and
conversion of any Notes by an agreement with one or more investment bankers or
other purchasers to purchase such Notes by paying to the Trustee in trust for
the Noteholders, on or before the date fixed for redemption, an amount not less
than the applicable redemption price, together with interest accrued to and
including the date fixed for redemption, of such Notes. Notwithstanding anything
to the contrary contained in this Article III, the obligation of the Company to
pay the redemption price of such Notes, together with interest accrued to and
including the date fixed for redemption, shall be deemed to be satisfied and
discharged to the extent such amount is so paid by such purchasers. If such an
agreement is entered into, a copy of which will be filed with the Trustee prior
to the date fixed for redemption, any Notes not duly surrendered for conversion
by the holders thereof may, at the option of the Company, be deemed, to the
fullest extent permitted by law, acquired by such purchasers from such holders
and (notwithstanding anything to the contrary contained in Article XV)
surrendered by such purchasers for conversion, all as of immediately prior to
the close of business on the date fixed for redemption (and the right to convert
any such Notes shall be extended through such time), subject to payment of the
above amount as aforesaid. At the written direction of the Company, the Trustee
shall hold and dispose of any such amount paid to it in the same manner as it
would monies deposited with it by the Company for the redemption of Notes.
Without the Trustee's prior written consent, no arrangement between the Company
and such purchasers for the purchase and conversion of any Notes shall increase
or otherwise affect any of the powers, duties, responsibilities or obligations
of the Trustee as set forth in this Indenture, and the Company agrees to
indemnify the Trustee from, and hold it harmless against, any loss, liability or
expense arising out of or in connection with any such arrangement for the
purchase and conversion of any Notes between the Company and such purchasers to
which the Trustee has not consented in writing, including the costs and
expenses, including reasonable legal fees, incurred by the Trustee in the
defense of any claim or
-32-
<PAGE>
liability arising out of or in connection with the exercise or performance of
any of its powers, duties, responsibilities or obligations under this Indenture.
Section 3.5 REDEMPTION AT OPTION OF HOLDERS.
(a) If, at any time prior to the maturity of the Notes, there
shall occur a Fundamental Change, then each Noteholder shall have the
right, at such holder's option, to require the Company to redeem all of
such holder's Notes, or any portion thereof that is an integral multiple
of $1,000 principal amount, on the date (the "Repurchase Date") that is
30 days after the date of the Company Notice (as defined in Section
3.5(b) below) of such Fundamental Change (or, if such 30th day is not a
Business Day, the next succeeding Business Day). The Company shall
redeem such Notes at the mandatory redemption price (expressed as a
percentage of the principal amount) set forth in the form of Note
attached as Exhibit A hereto; PROVIDED that, if the Applicable Price
with respect to the Fundamental Change is less than the Reference Market
Price, the Company shall redeem such Notes at a price equal to the
mandatory redemption price set forth in the form of Note attached as
Exhibit A hereto multiplied by the fraction obtained by dividing the
Applicable Price by the Reference Market Price. In each case, the
Company shall also pay to such holders accrued interest to, but
excluding, the Repurchase Date on the redeemed Notes; PROVIDED that, if
such Repurchase Date is June 15 or December 15, then the interest
payable on such date shall be paid to the holder of record of the Note
on the next preceding June 1 or December 1.
Upon presentation of any Note redeemed in part only, the Company
shall execute and the Trustee shall authenticate and deliver to the
holder thereof, at the expense of the Company, a new Note or Notes, of
authorized denominations, in principal amount equal to the unredeemed
portion of the Notes so presented.
(b) On or before the tenth day after the occurrence of a
Fundamental Change, the Company, or, at its written request (which must
be received by the Trustee at least five Business Days prior to the date
the Trustee is requested to give notice as described below), the
Trustee, in the name of and at the expense of the Company, shall mail or
cause to be mailed to all holders of record on the date of the
Fundamental Change a notice (the "Company Notice") of the occurrence of
such Fundamental Change and of the redemption right at the option of the
holders arising as a result thereof. Such notice shall be mailed in the
manner and with the effect set forth in the first paragraph of Section
3.2. The Company shall also deliver a copy of the Company Notice to the
Trustee at such time as it is mailed to Noteholders.
-33-
<PAGE>
Each Company Notice shall specify the circumstances constituting
the Fundamental Change, the Repurchase Date, the price at which the
Company shall be obligated to redeem Notes, the latest time on the
Repurchase Date by which the holder must exercise the redemption right
(the "Fundamental Change Expiration Time"), that the holder shall have
the right to withdraw any Notes surrendered prior to the Fundamental
Change Expiration Time, a description of the procedure which a
Noteholder must follow to exercise such redemption right and to withdraw
any surrendered Notes, the place or places where the holder is to
surrender such holder's Notes, and the amount of interest accrued on
each Note to, but excluding, the Repurchase Date.
No failure of the Company to give the foregoing notices and no
defect therein shall limit the Noteholders' redemption rights or affect
the validity of the proceedings for the repurchase of the Notes pursuant
to this Section 3.5.
(c) For a Note to be so repaid at the option of the holder, the
Company must receive at the office or agency of the Company maintained
for that purpose in the Borough of Manhattan, The City of New York, or,
at the option of such holder, the Corporate Trust Office, such Note with
the form entitled "Option to Elect Repayment Upon A Fundamental Change"
on the reverse thereof duly completed, together with such Notes duly
endorsed for transfer, on or before the Fundamental Change Expiration
Time. All questions as to the validity, eligibility (including time of
receipt) and acceptance of any Note for repayment shall be determined by
the Company, whose determination shall be final and binding absent
manifest error.
(d) On or prior to the Repurchase Date, the Company will deposit
with the Trustee or with one or more paying agents (or, if the Company
is acting as its own paying agent, set aside, segregate and hold in
trust as provided in Section 5.4) an amount of money sufficient to repay
on the Repurchase Date all the Notes to be repaid on such date at the
appropriate redemption price, together with accrued interest to, but
excluding, the Repurchase Date; provided that if such payment is made on
the Repurchase Date it must be received by the Trustee or paying agent,
as the case may be, by 10:00 a.m., New York City time, on such date.
Payment for Notes surrendered for redemption (and not withdrawn) prior
to the Fundamental Change Expiration Time will be made promptly (but in
no event more than three Business Days) following the Repurchase Date by
mailing checks for the amount payable to the holders of such Notes
entitled thereto as they shall appear on the registry books of the
Company.
(e) In the case of consolidation, merger, conveyance, transfer or
lease to which Section 15.6 applies and as a result of which -- (i) the
Common Stock of the
-34-
<PAGE>
Company is changed or exchanged into the right to receive securities,
cash or other property, (ii) such securities, cash or other property
includes shares of Common Stock of the Company or common stock of
another Person, (iii) such shares are, or upon issuance will be, traded
on a United States national securities exchange or approved for trading
on an established automated over-the-counter trading market in the
United States, and (iv) such shares constitute, at the time such change
or exchange becomes effective, in excess of 50% of the aggregate fair
market value of such securities, cash and other property (as determined
by the Company, which determination shall be conclusive and binding) --
then the Person formed by such consolidation or resulting from such
merger or which acquires such assets, as the case may be, shall execute
and deliver to the Trustee a supplemental indenture (which shall comply
with the Trust Indenture Act as in force at the date of execution of
such supplemental indenture) modifying the provisions of this Indenture
relating to the right of holders of the Notes to cause the Company to
repurchase the Notes following a Fundamental Change, including without
limitation the applicable provisions of this Section 3.5 and the
definitions of Applicable Price, Common Stock, Fundamental Change and
Reference Market Price, as appropriate, as determined in good faith by
the Company (which determination shall be conclusive and binding), to
make such provisions apply to the shares of common stock referred to in
clause (ii) above and the issuer thereof, if different from the Common
Stock and the Company, in lieu of the Common Stock and the Company.
(f) The Company shall comply with the tender offer rules under
the Exchange Act which may then be applicable and will file Schedule
13E-4 or any other schedule required thereunder in connection with any
offer by the Company to purchase Notes at the option of Note holders
upon a Fundamental Change.
ARTICLE IV
SUBORDINATION OF NOTES
Section 4.1 AGREEMENT OF SUBORDINATION. The Company covenants and
agrees, and each holder of Notes issued hereunder by his acceptance thereof
likewise covenants and agrees, that all Notes shall be issued subject to the
provisions of this Article IV; and each Person holding any Note, whether upon
original issue or upon transfer, assignment or exchange thereof, accepts and
agrees to be bound by such provisions.
The payment of the principal of, premium, if any, and interest on all
Notes (including, but not limited to, the redemption price with respect to the
Notes called for redemption in accordance with Section 3.2 or submitted for
redemption in accordance
-35-
<PAGE>
with Section 3.5, as the case may be, as provided in the Indenture) issued
hereunder shall, to the extent and in the manner hereinafter set forth, be
subordinated and subject in right of payment to the prior payment in full of
all Senior Indebtedness, whether outstanding at the date of this Indenture or
thereafter incurred.
No provision of this Article IV shall prevent the occurrence of any
default or Event of Default hereunder.
Section 4.2 PAYMENTS TO NOTEHOLDERS. No payment shall be made with
respect to the principal of, or premium, if any, or interest on the Notes
(including, but not limited to, the redemption price with respect to the Notes
to be called for redemption in accordance with Section 3.2 or submitted for
redemption in accordance with Section 3.5, as the case may be, as provided in
the Indenture), except payments and distributions made by the Trustee as
permitted by the first or second paragraph of Section 4.5, if:
(i) a default in the payment of principal, premium, interest,
rent or other obligations due on any Senior Indebtedness occurs and is
continuing (or, in the case of Senior Indebtedness for which there is a
period of grace, such a default occurs and is continuing beyond the
period of grace specified in the instrument or lease evidencing such
Senior Indebtedness), unless and until such default shall have been
cured or waived or shall have ceased to exist; or
(ii) a default, other than a payment default, on a Designated
Senior Indebtedness occurs and is continuing that then permits holders
of such Designated Senior Indebtedness to accelerate its maturity and
the Trustee receives a notice of the default (a "Payment Blockage
Notice") from a Representative or the Company.
If the Trustee receives any Payment Blockage Notice pursuant to clause
(ii) above, no subsequent Payment Blockage Notice shall be effective for
purposes of this Section unless and until (A) at least 365 days shall have
elapsed since the initial effectiveness of the immediately prior Payment
Blockage Notice and (B) all scheduled payments of principal, premium, if any,
and interest on the Notes that have come due have been paid in full in cash.
During any period of payment blockage pursuant to a Payment Blockage Notice, any
payment on a Note that otherwise would have been made during such period will
accrue interest, to the extent legally permissible, at the annual rate of
interest borne by such Note from the date on which such payment was required
under the terms of this Indenture until the date of payment. No nonpayment
default that existed or was continuing on the date of delivery of any Payment
Blockage Notice to the Trustee shall be, or shall be made, the basis for a
subsequent Payment Blockage Notice.
The Company may and shall resume payments on and
distributions in respect of the Notes upon the earlier of --
-36-
<PAGE>
(1) the date upon which the default is cured or waived or ceases to
exist, or
(2) in the case of a default referred to in clause (ii) above, 179 days
pass after notice is received if the maturity of such Designated Senior
Indebtedness has not been accelerated,
- -- unless this Article IV otherwise prohibits the payment or distribution at the
time of such payment or distribution.
Upon any payment by the Company, or distribution of assets of the
Company of any kind or character, whether in cash, property or securities, to
creditors upon any dissolution or winding-up or liquidation or reorganization of
the Company, whether voluntary or involuntary or in bankruptcy, insolvency,
receivership or other proceedings, all amounts due or to become due upon all
Senior Indebtedness shall first be paid in full in cash or other payment
satisfactory to the holders of such Senior Indebtedness, or provision shall be
made for such payment of Senior Indebtedness in accordance with its terms in
cash or other payment satisfactory to the holders of such Senior Indebtedness,
before any payment is made on account of the principal of, premium, if any, or
interest on the Notes (except payments made pursuant to Article XIII from monies
deposited with the Trustee pursuant thereto prior to commencement of proceedings
for such dissolution, winding-up, liquidation or reorganization). Upon any such
dissolution or winding-up or liquidation or reorganization of the Company or
bankruptcy, insolvency, receivership or other proceeding, any payment by the
Company, or distribution of assets of the Company of any kind or character,
whether in cash, property or securities, to which the holders of the Notes or
the Trustee would be entitled, except for the provision of this Article IV,
shall (except as aforesaid) be paid by the Company or by any receiver, trustee
in bankruptcy, liquidating trustee, agent or other Person making such payment or
distribution, or by the holders of the Notes or by the Trustee under this
Indenture if received by them or it, directly to the holders of Senior
Indebtedness (PRO RATA to such holders on the basis of the respective amounts of
Senior Indebtedness held by such holders, or as otherwise required by law or a
court order) or their representative or representatives, or to the trustee or
trustees under any indenture pursuant to which any instruments evidencing any
Senior Indebtedness may have been issued, as their respective interests may
appear, to the extent necessary to pay all Senior Indebtedness in full, in cash
or other payment satisfactory to the holders of such Senior Indebtedness, after
giving effect to any concurrent payment or distribution to or for the holders of
Senior Indebtedness, before any payment or distribution is made to the holders
of the Notes or to the Trustee.
For purposes of this Article IV, the words, "cash, property or
securities" shall not be deemed to include shares of stock of the Company as
reorganized or readjusted, or securities of the Company or any other corporation
provided for by a plan of
-37-
<PAGE>
reorganization or readjustment, the payment of which is subordinated at least to
the extent provided in this Article IV with respect to the Notes to the payment
of all Senior Indebtedness which may at the time be outstanding; PROVIDED that
(i) the Senior Indebtedness is assumed by the new corporation, if any, resulting
from any reorganization or readjustment, and (ii) the rights of the holders of
Senior Indebtedness (other than leases which are not assumed by the Company or
the new corporation, as the case may be) are not, without the consent of such
holders, altered by such reorganization or readjustment. The consolidation of
the Company with, or the merger of the Company into, another corporation or the
liquidation or dissolution of the Company following the conveyance or transfer
of its property as an entirety, or substantially as an entirety, to another
corporation upon the terms and conditions provided for in Article XII shall not
be deemed a dissolution, winding-up, liquidation or reorganization for the
purposes of this Section 4.2 if such other corporation shall, as a part of such
consolidation, merger, conveyance or transfer, comply with the conditions stated
in Article XII.
In the event of the acceleration of the Notes because of an Event of
Default, no payment or distribution shall be made to the Trustee or any holder
of Notes in respect of the principal of, premium, if any, or interest on the
Notes (including, but not limited to, the redemption price with respect to the
Notes called for redemption in accordance with Section 3.2 or submitted for
redemption in accordance with Section 3.5, as the case may be, as provided in
the Indenture), except payments and distributions made by the Trustee as
permitted by the first or second paragraph of Section 4.5, until all Senior
Indebtedness has been paid in full in cash or other payment satisfactory to the
holders of Senior Indebtedness or such acceleration is rescinded in accordance
with the terms of this Indenture. If payment of the Notes is accelerated because
of an Event of Default, the Company shall promptly notify holders of Senior
Indebtedness of the acceleration.
In the event that, notwithstanding the foregoing provisions, any payment
or distribution of assets of the Company of any kind or character, whether in
cash, property or securities (including, without limitation, by way of setoff or
otherwise), prohibited by the foregoing shall be received by the Trustee or the
holders of the Notes before all Senior Indebtedness is paid in full in cash or
other payment satisfactory to the holders of such Senior Indebtedness, or before
provision is made for such payment of Senior Indebtedness in accordance with its
terms in cash or other payment satisfactory to the holders of such Senior
Indebtedness, such payment or distribution shall be held in trust for the
benefit of and shall be paid over or delivered to the holders of Senior
Indebtedness or their Representative or Representatives as their respective
interests may appear, as calculated by the Company, for application to the
payment of all Senior Indebtedness remaining unpaid to the extent necessary to
pay all Senior Indebtedness in full in cash or other payment satisfactory to the
holders of such Senior Indebtedness, after giving effect to any concurrent
payment or distribution to or for the holders of such Senior Indebtedness.
-38-
<PAGE>
Nothing in this Section 4.2 shall apply to claims of, or payments to,
the Trustee under or pursuant to Section 8.6. This Section 4.2 shall be subject
to the further provisions of Section 4.5.
Section 4.3 SUBROGATION OF NOTES. Subject to the payment in full of all
Senior Indebtedness, the rights of the holders of the Notes 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 IV (equally and
ratably with the holders of all indebtedness of the Company which by its express
terms is subordinated to other indebtedness of the Company to substantially the
same extent as the Notes are subordinated and is entitled to like rights of
subrogation), to the rights of the holders of Senior Indebtedness to receive
payments or distributions of cash, property or securities of the Company
applicable to the Senior Indebtedness until the principal, premium, if any, and
interest on the Notes shall be paid in full. For the purposes of such
subrogation, (i) no payments or distributions to the holders of the Senior
Indebtedness of any cash, property or securities to which the holders of the
Notes or the Trustee would be entitled except for the provisions of this Article
IV, and no payment over pursuant to the provisions of this Article IV to or for
the benefit of the holders of Senior Indebtedness by holders of the Notes or the
Trustee, shall, as between the Company, its creditors other than holders of
Senior Indebtedness, and the holders of the Notes, be deemed to be a payment by
the Company to or on account of the Senior Indebtedness, and (ii) no payments or
distributions of cash, property or securities to or for the benefit of the
holders of the Notes pursuant to the subrogation provisions of this Article IV
which would otherwise have been paid to the holders of Senior Indebtedness shall
be deemed to be a payment by the Company to or for the account of the Notes. It
is understood that the provisions of this Article IV are and are intended solely
for the purposes of defining the relative rights of the holders of the Notes, on
the one hand, and the holders of the Senior Indebtedness, on the other hand.
Nothing contained in this Article IV or elsewhere in this Indenture or
in the Notes is intended to or shall impair, as among the Company, its creditors
other than the holders of Senior Indebtedness, and the holders of the Notes, the
obligation of the Company, which is absolute and unconditional, to pay to the
holders of the Notes the principal of (and premium, if any) and interest on the
Notes as and when the same shall become due and payable in accordance with their
terms, or is intended to or shall affect the relative rights of the holders of
the Notes and creditors of the Company other than the holders of the Senior
Indebtedness, nor shall anything herein or therein prevent the Trustee or the
holder of any Note from exercising all remedies otherwise permitted by
applicable law upon default under this Indenture, subject to the rights, if any,
under this Article IV of the holders of Senior Indebtedness in respect of cash,
property or securities of the Company received upon the exercise of any such
remedy.
-39-
<PAGE>
Upon any payment or distribution of assets of the Company referred to in
this Article IV, the Trustee, subject to the provisions of Section 8. 1, and the
holders of the Notes shall be entitled to rely upon any order or decree made by
any court of competent jurisdiction in which such bankruptcy, dissolution,
winding-up, liquidation or reorganization proceedings are pending, or a
certificate of the receiver, trustee in bankruptcy, liquidating trustee, agent
or other Person making such payment or distribution, delivered to the Trustee or
to the holders of the Notes, for the purpose of ascertaining the Persons
entitled to participate in such distribution, the holders of the Senior
Indebtedness and other indebtedness of the Company, the amount thereof or
payable thereon and all other facts pertinent thereto or to this Article IV.
Section 4.4 AUTHORIZATION TO EFFECT SUBORDINATION. Each holder of a Note
by the holder's acceptance thereof authorizes and directs the Trustee on the
holder's behalf to take such action as may be necessary or appropriate to
effectuate the subordination as provided in this Article IV and appoints the
Trustee to act as the holder's attorney-in-fact for any and all such purposes.
If the Trustee does not file a proper proof of claim or proof of debt in the
form required in any proceeding referred to in the third paragraph of Section
7.2 hereof at least 30 days before the expiration of the time to file such
claim, the holders of any Senior Indebtedness or their representatives are
hereby authorized to file an appropriate claim for and on behalf of the holders
of the Notes.
Section 4.5 NOTICE TO TRUSTEE. The Company shall give prompt written
notice in the form of an Officers' Certificate to a Responsible Officer of the
Trustee and to any paying agent of any fact known to the Company which would
prohibit the making of any payment of monies to or by the Trustee or any paying
agent in respect of the Notes pursuant to the provisions of this Article IV.
Notwithstanding the provisions of this Article IV 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 of monies to or by the
Trustee in respect of the Notes pursuant to the provisions of this Article IV
unless and until a Responsible Officer of the Trustee shall have received
written notice thereof at the Corporate Trust Office from the Company (in the
form of an Officers' Certificate) or a Representative or a holder or holders of
Senior Indebtedness or from any trustee thereof, and before the receipt of any
such written notice, the Trustee, subject to the provisions of Section 8.1,
shall be entitled in all respects to assume that no such facts exist; PROVIDED
that if on a date not fewer than one Business Day prior to the date upon which
by the terms hereof any such monies may become payable for any purpose
(including, without limitation, the payment of the principal of, or premium, if
any, or interest on any Note) the Trustee shall not have received, with respect
to such monies, the notice provided for in this Section 4.5, then, anything
herein contained to the contrary notwithstanding, the Trustee shall have full
power and authority to receive such monies and to apply the same to the purpose
for which they were received, and shall not
-40-
<PAGE>
be affected by any notice to the contrary which may be received by it on or
after such prior date.
Notwithstanding anything in this Article IV to the contrary, nothing
shall prevent any payment by the Trustee to the Noteholders of monies deposited
with it pursuant to Section 13.1, and any such payment shall not be subject to
the provisions of Section 4.1 or 4.2.
The Trustee, subject to the provisions of Section 8. 1, shall be
entitled to rely on the delivery to it of a written notice by a Representative
or a Person representing himself to be a holder of Senior Indebtedness to
establish that such notice has been given by a Representative or a holder of
Senior Indebtedness on behalf of any such holder or holders. In the event that
the Trustee determines in good faith that further evidence is required with
respect to the right of any Person as a holder of Senior Indebtedness to
participate in any payment or distribution pursuant to this Article IV, 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 IV, 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 4.6 TRUSTEE'S RELATION TO SENIOR INDEBTEDNESS. The Trustee in
its individual capacity shall be entitled to all the rights set forth in this
Article IV in respect of any Senior Indebtedness at any time held by it, to the
same extent as any other holder of Senior Indebtedness, and nothing in Section
8.13 or elsewhere in this Indenture shall deprive the Trustee of any of its
rights as such holder.
With respect to the holders of Senior Indebtedness, the Trustee
undertakes to perform or to observe only such of its covenants and obligations
as are specifically set forth in this Article IV, and no implied covenants or
obligations with respect to the holders of Senior Indebtedness shall be read
into this Indenture against the Trustee. The Trustee shall not be deemed to owe
any fiduciary duty to the holders of Senior Indebtedness and, subject to the
provisions of Section 8.1, the Trustee shall not be liable to any holder of
Senior Indebtedness if it shall pay over or deliver to holders of Notes, the
Company or any other Person money or assets to which any holder of Senior
Indebtedness shall be entitled by virtue of this Article IV or otherwise.
Section 4.7 NO IMPAIRMENT OF SUBORDINATION. No right of any present or
future holder of any Senior Indebtedness to enforce subordination as herein
provided shall at any time in any way be prejudiced or impaired by any act or
failure to act on the part of the Company or by any act or failure to act, in
good faith, by any such holder, or by any
-41-
<PAGE>
noncompliance by the Company with the terms, provisions and covenants of this
Indenture, regardless of any knowledge thereof which any such holder may have or
with which such holder may otherwise be charged.
Section 4.8 CERTAIN CONVERSIONS DEEMED PAYMENT. For the purposes of
this Article IV only, (1) the issuance and delivery of junior securities upon
conversion of Notes in accordance with Article XV shall not be deemed to
constitute a payment or distribution on account of the principal of (or premium,
if any) or interest on Notes or on account of the purchase or other acquisition
of Notes, and (2) the payment, issuance or delivery of cash (except in
satisfaction of fractional shares pursuant to Section 15.2 and 15.3), 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. For the
purposes of this Section 4.8, the term "junior securities" means (a) shares of
any stock of any class of the Company, or (b) securities of the Company which
are subordinated in right of payment to all Senior Indebtedness which may be
outstanding at the time of issuance or delivery of such securities to
substantially the same extent as, or to a greater extent than, the Notes are so
subordinated as provided in this Article. Nothing contained in this Article IV
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 Noteholders, the right, which is absolute and unconditional, of the
holder of any Note to convert such Note in accordance with Article XV.
Section 4.9 ARTICLE APPLICABLE TO PAYING AGENTS. If at any time any
paying agent other than the Trustee shall have been appointed by the Company and
be then acting hereunder, the term "Trustee" as used in this Article shall be
construed (unless the context otherwise requires) as extending to and including
such paying agent within its meaning as fully for all intents and purposes as if
such paying agent were named in this Article in addition to or in place of the
Trustee; PROVIDED, HOWEVER, that the first paragraph of Section 4.5 shall not
apply to the Company or any Affiliate of the Company if it or such Affiliate
acts as paying agent.
Section 4.10 SENIOR INDEBTEDNESS ENTITLED TO RELY. The holders of Senior
Indebtedness (including, without limitation, Designated Senior Indebtedness)
shall have the right to rely upon this Article IV, and no amendment or
modification of the provisions contained herein shall diminish the rights of
such holders unless such holders shall have agreed in writing thereto.
-42-
<PAGE>
ARTICLE V
PARTICULAR COVENANTS OF THE COMPANY
Section 5.1 PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST. The Company
covenants and agrees that it will duly and punctually pay or cause to be paid
the principal of and premium, if any, and interest on each of the Notes at the
places, at the respective times and in the manner provided herein and in the
Notes. Each installment of interest on the Notes due on any semi-annual interest
payment date may, at the option of the Company, be paid either (i) by check
mailed to the address of the Person entitled thereto as it appears in the Note
register or (ii) by wire transfer to an account maintained by such Person
located in the United States; PROVIDED, HOWEVER, that payments to The Depository
Trust Company will be made by wire transfer of immediately available funds to
the account of The Depository Trust Company or its nominee in accordance with
the wire transfer instructions supplied by such holder to the Trustee and paying
agent (if different from the Trustee). Holders electing to receive wire
transfers must provide the Trustee with written instructions at least five days
prior to the record date for such interest payment date.
Section 5.2 MAINTENANCE OF OFFICE OR AGENCY. The Company will maintain
in the Borough of Manhattan, The City of New York, an office or agency where the
Notes may be surrendered for registration of transfer or exchange or for
presentation for payment or for conversion or redemption and where notices and
demands to or upon the Company in respect of the Notes and this Indenture may be
served. The Company will give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency not
designated or appointed by the Trustee. If at any time the Company shall fail to
maintain any such required office or agency or shall fail to furnish the Trustee
with the address thereof, such presentations, surrenders, notices and demands
may be made or served at the Corporate Trust Office or the office or agency of
the Trustee in the Borough of Manhattan, The City of New York.
The Company may also from time to time designate one or more other
offices or agencies where the Notes may be presented or surrendered for any or
all such purposes and may from time to time rescind such designations; PROVIDED
that no such designation or rescission shall in any manner relieve the Company
of its obligation to maintain an office or agency in the Borough of Manhattan,
The City of New York, for such purposes. The Company will give prompt written
notice of any such designation or rescission and of any change in the location
of any such other office or agency.
The Company hereby initially designates the Trustee as paying agent,
Note registrar, Custodian and conversion agent, and the Corporate Trust Office
of the Trustee one such office or agency of the Company for each of the
aforesaid purposes.
-43-
<PAGE>
So long as the Trustee is the Note registrar, the Trustee agrees to
mail, or cause to be mailed, the notices set forth in Section 8.10(a) and the
third paragraph of Section 8.11 as required.
Section 5.3 APPOINTMENTS TO FILL VACANCIES IN TRUSTEE'S OFFICE. The
Company, whenever necessary to avoid or fill a vacancy in the office of Trustee,
will appoint, in the manner provided in Section 8.10, a Trustee, so that there
shall at all times be a Trustee hereunder.
Section 5.4 PROVISIONS AS TO PAYING AGENT.
(a) If the Company shall appoint a paying agent other than the
Trustee, or if the Trustee shall appoint such a paying agent, it will
cause such paying agent to execute and deliver to the Trustee an
instrument in which such agent shall agree with the Trustee, subject to
the provisions of this Section 5.4:
(1) that it will hold all sums held by it as such agent
for the payment of the principal of and premium, if any, or
interest on the Notes (whether such sums have been paid to it by
the Company or by any other obligor on the Notes) in trust for
the benefit of the holders of the Notes;
(2) that it will give the Trustee notice of any failure by
the Company (or by any other obligor on the Notes) to make any
payment of the principal of and premium, if any, or interest on
the Notes when the
same shall be due and payable; and
(3) that at any time during the continuance of an Event of
Default, upon request of the Trustee, it will forthwith pay to
the Trustee all sums so held in trust.
The Company shall, on or before each due date of the principal
of, premium, if any, or interest on the Notes, deposit with the paying
agent a sum sufficient to pay such principal, premium, if any, or
interest, and (unless such paying agent is the Trustee) the Company will
promptly notify the Trustee in writing of any failure to take such
action; PROVIDED that if such deposit is made on the due date, such
deposit shall be received by the paying agent by 10:00 a.m., New York
City time, on such date.
(b) If the Company shall act as its own paying agent, it will, on
or before each due date of the principal of, premium, if any, or
interest on the Notes, set aside, segregate and hold in trust for the
benefit of the holders of the Notes a sum sufficient to pay such
principal, premium, if any, or interest so becoming due and will notify
the Trustee in writing of any failure to take such action and of any
-44-
<PAGE>
failure by the Company (or any other obligor under the Notes) to make
any payment of the principal of, premium, if any, or interest on the
Notes when the same shall become due and payable.
(c) Anything in this Section 5.4 to the contrary notwithstanding,
the Company may, at any time, for the purpose of obtaining a
satisfaction and discharge of this Indenture, or for any other reason,
pay or cause to be paid to the Trustee all sums held in trust by the
Company or any paying agent hereunder as required by this Section 5.4,
such sums to be held by the Trustee upon the trusts herein contained,
and upon such payment by the Company or any paying agent to the Trustee,
the Company or such paying agent shall be released from all further
liability with respect to such sums.
(d) Anything in this Section 5.4 to the contrary notwithstanding,
the agreement to hold sums in trust as provided in this Section 5.4 is
subject to Sections 13.3 and 13.4.
Section 5.5 CORPORATE EXISTENCE. Subject to Article XII, the Company
will do or cause to be done all things necessary to preserve and keep in full
force and effect its corporate existence.
Section 5.6 RULE 144A INFORMATION REQUIREMENT. During the period
beginning on the latest date of the original issuance of the Notes and ending on
the date that is three years from such date, the Company covenants and agrees
that it shall, during any period in which it is not subject to Section 13 or
15(d) under the Exchange Act, make available, to any holder or beneficial holder
of Notes or any Common Stock issued upon conversion thereof which continue to be
Restricted Securities in connection with any sale thereof and any prospective
purchaser of Notes or such Common Stock from such holder or beneficial holder,
the information required pursuant to Rule 144A(d)(4) under the Securities Act
upon the request of any holder or beneficial holder of the Notes or such Common
Stock and it will take such further action as any holder or beneficial holder of
such Notes or such Common Stock may reasonably request, all to the extent
required from time to time to enable such holder or beneficial holder to sell
its Notes or Common Stock without registration under the Securities Act within
the limitation of the exemption provided by Rule 144A, as such Rule may be
amended from time to time. Upon the request of any holder or any beneficial
holder of the Notes or such Common Stock, the Company will deliver to such
holder a written statement as to whether it has complied with such requirements.
Section 5.7 STAY, EXTENSION AND USURY LAWS. The Company covenants (to
the extent that it may lawfully do so) that it shall not at any time insist
upon, plead or in any manner whatsoever claim or take the benefit or advantage
of any stay, extension or usury
-45-
<PAGE>
law or other law which would prohibit or forgive the Company from paying all or
any portion of the principal of or interest on the Notes as contemplated herein,
wherever enacted, now or at any time hereafter in force, or which may affect the
covenants or the performance of this Indenture. 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.
ARTICLE VI
NOTEHOLDERS' LISTS AND REPORTS BY
THE COMPANY AND THE TRUSTEE
Section 6.1 NOTEHOLDERS' LISTS. The Company covenants and agrees that it
will furnish or cause to be furnished to the Trustee, semiannually, not more
than fifteen (15) days after each June 1 and December 1 in each year beginning
with December 1, 1996, and at such other times as the Trustee may request in
writing, within thirty (30) days after receipt by the Company of any such
request (or such lesser time as the Trustee may reasonably request in order to
enable it to timely provide any notice to be provided by it hereunder), a list
in such form as the Trustee may reasonably require of the names and addresses of
the holders of Notes as of a date not more than fifteen (15) days (or such other
date as the Trustee may reasonably request in order to so provide any such
notices) prior to the time such information is furnished, except that no such
list need be furnished so long as the Trustee is acting as Note registrar.
Section 6.2 PRESERVATION AND DISCLOSURE OF LISTS.
(a) The Trustee shall preserve, in as current a form as is
reasonably practicable, all information as to the names and addresses of
the holders of Notes contained in the most recent list furnished to it
as provided in Section 6.1 or maintained by the Trustee in its capacity
as Note registrar, if so acting, or received by the Trustee in its
capacity as paying agent, if so acting. The Trustee may destroy any list
furnished to it as provided in Section 6.1 upon receipt of a new list so
furnished.
(b) The rights of Noteholders to communicate with other holders
of Notes with respect to their rights under this Indenture or under the
Notes, and the corresponding rights and duties of the Trustee, shall be
as provided by the Trust Indenture Act, including without limitation
Section 312(b) thereof.
-46-
<PAGE>
(c) Every Noteholder, by receiving and holding the same, agrees
with the Company and the Trustee that neither the Company nor the
Trustee nor any agent of either of them shall be held accountable by
reason of any disclosure of information as to names and addresses of
holders of Notes made pursuant to the Trust Indenture Act.
Section 6.3 REPORTS BY TRUSTEE.
(a) In accordance with Section 313(c) of the Trust Indenture Act,
the Trustee shall transmit to holders of Notes (i) within 60 days after
September 15 of each year, commencing with the year 1996, such reports,
dated as of September 15 of the year in which such reports are made,
concerning the Trustee and its actions under this Indenture as may be
required pursuant to Section 313(a) of the Trust Indenture Act and (ii)
such other reports at the times and in the manner provided pursuant to
Section 313(b) of the Trust Indenture Act.
(b) A copy of such report shall, at the time of such transmission
to holders of Notes, be filed by the Trustee with each stock exchange
and automated quotation system upon which the Notes are listed and with
the Company. The Company will notify the Trustee within a reasonable
time when the Notes are listed on any stock exchange and automated
quotation system.
Section 6.4 REPORTS BY COMPANY. The Company shall file with the Trustee
(and the Commission if at any time after the Indenture becomes qualified under
the Trust Indenture Act) and transmit to holders of Notes such information,
documents and other reports and such summaries thereof as may be required
pursuant to the Trust Indenture Act at the times and in the manner provided
pursuant to such Act, including without limitation as follows:
(a) The Company shall file with the Trustee, within 15 days after
the Company is required to file the same with the Commission, copies of
the annual reports and of the information, documents and other reports
(or copies of such portions of any of the foregoing as the Commission
may from time to time by rules and regulations prescribe) which the
Company may be required to file with the Commission pursuant to Section
13 or Section 15(d) of the Exchange Act; or, if the Company is not
required to file information, documents or reports pursuant to either of
such Sections, then it shall file with the Trustee and the Commission,
in accordance with rules and regulations prescribed from time to time by
the Commission, such of the supplementary and periodic information,
documents and reports which may be required pursuant to Section 13 of
the Exchange Act in respect of a security listed and registered on a
national securities exchange as may be prescribed from time to time in
such rules and regulations.
-47-
<PAGE>
(b) The Company shall file with the Trustee and the Commission,
in accordance with rules and regulations prescribed from time to time by
the Commission, such additional information, documents and reports with
respect to compliance by the Company with the conditions and covenants
of this Indenture, as may be required from time to time by such rules
and regulations.
(c) The Company shall transmit to all holders of Notes, in the
manner and to the extent provided in Section 313(c) of the Trust
Indenture Act, within 30 days after the filing thereof with the Trustee,
such summaries of any information, documents and reports required to be
filed by the Company pursuant to paragraphs (a) or (b) of this Section
6.4 as may be required by rules and regulations prescribed from time to
time by the Commission.
(d) The Company shall furnish to the Trustee, not less often than
annually, a brief certificate from the principal executive officer,
principal financial officer or principal accounting officer as to his or
her knowledge of the Company's compliance with all conditions and
covenants under this Indenture. For purposes of this clause (d), such
compliance shall be determined without regard to any period of grace or
requirement of notice provided under this Indenture.
Delivery of such reports, information and documents to the Trustee is
for informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
ARTICLE VII
REMEDIES OF THE TRUSTEE AND NOTEHOLDERS
ON AN EVENT OF DEFAULT
Section 7.1 EVENTS OF DEFAULT. In case one or more of the following
Events of Default (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body) shall have occurred and be
continuing --
(a) default in the payment of any installment of interest upon
any of the Notes as and when the same shall become due and payable, and
continuance of
-48-
<PAGE>
such default for a period of thirty (30) days, whether or not such
payment is permitted under Article IV hereof, or
(b) default in the payment of the principal of and premium, if
any, on any of the Notes as and when the same shall become due and
payable either at maturity or in connection with any redemption pursuant
to Article III, by
acceleration or otherwise, whether or not such payment is
permitted under Article IV hereof, or
(c) failure on the part of the Company duly to observe or perform
any other of the covenants or agreements on the part of the Company in
the Notes or in this Indenture (other than a covenant or agreement a
default in whose performance or whose breach is elsewhere in this
Section 7.1 specifically dealt with) continued for a period of sixty
(60) days after the date on which written notice of such failure,
requiring the Company to remedy the same, shall have been given to the
Company by the Trustee, or to the Company and a Responsible Officer of
the Trustee by the holders of at least 25 percent in aggregate principal
amount of the Notes at the time outstanding determined in accordance
with Section 9.4, or
(d) the Company shall commence a voluntary case or other
proceeding seeking liquidation, reorganization or other relief with
respect to itself or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect or seeking the appointment of a
trustee, receiver, liquidator, custodian or other similar official of it
or any substantial part of its property, or shall consent to any such
relief or to the appointment of or taking possession by any such
official in an involuntary case or other proceeding commenced against
it, or shall make a general assignment for the benefit of creditors, or
shall fail generally to pay its debts as they become due, or
(e) an involuntary case or other proceeding shall be commenced
against the Company seeking liquidation, reorganization or other relief
with respect to it or its debts under any bankruptcy, insolvency or
other similar law now or hereafter in effect or seeking the appointment
of a trustee, receiver, liquidator, custodian or other similar official
of it or any substantial part of its property, and such involuntary case
or other proceeding shall remain undismissed and unstayed for a period
of ninety (90) consecutive days
- -- then, and in each and every such case (other than an Event of Default
specified in Section 7.1(d) or (e)), unless the principal of all of the Notes
shall have already become due and payable, either the Trustee or the holders of
not less than 25 percent in aggregate principal amount of the Notes then
outstanding hereunder determined in accordance with Section 9.4, by notice in
writing to the Company (and to the Trustee if given by
-49-
<PAGE>
Noteholders), may declare the principal of all the Notes and the interest
accrued thereon to be due and payable immediately, and upon any such declaration
the same shall become and shall be immediately due and payable, notwithstanding
anything to the contrary contained in this Indenture or in the Notes. If an
Event of Default specified in Section 7.1(d) or (e) occurs, the principal of all
the Notes and the interest accrued thereon shall be immediately and
automatically due and payable without necessity of further action. The foregoing
provisions of this Section 7.1, however, are subject to the conditions that --
(i) if, at any time after the principal of the Notes shall have
been so declared due and payable, and before any judgment or decree for
the payment of the monies due shall have been obtained or entered as
hereinafter provided, the Company shall pay or shall deposit with the
Trustee a sum sufficient to pay all matured installments of interest
upon all Notes and the principal of and premium, if any, on any and all
Notes which shall have become due otherwise than by acceleration (with
interest on overdue installments of interest (to the extent that payment
of such interest is enforceable under applicable law) and on such
principal and premium, if any, at the rate borne by the Notes, to the
date of such payment or deposit) and amounts due to the Trustee pursuant
to Section 8.6, and
(ii) if any and all defaults under this Indenture, other than the
nonpayment of principal of and premium, if any, and accrued interest on
Notes which shall have become due by acceleration, shall have been cured
or waived pursuant to Section 7.7
- -- then, and in every such case, the holders of a majority in aggregate
principal amount of the Notes then outstanding, by written notice to the Company
and to the Trustee, may waive all defaults or Events of Default and rescind and
annul such declaration and its consequences; PROVIDED, HOWEVER, that no such
waiver or rescission and annulment shall extend to or shall affect any
subsequent default or Event of Default, or shall impair any right consequent
thereon. The Company shall notify a Responsible Officer of the Trustee, promptly
upon becoming aware thereof, of any Event of Default.
In case the Trustee shall have proceeded to enforce any right under this
Indenture and such proceedings shall have been discontinued or abandoned because
of such waiver or rescission and annulment or for any other reason or shall have
been determined adversely to the Trustee, then and in every such case the
Company, the holders of Notes, and the Trustee shall be restored respectively to
their several positions and rights hereunder, and all rights, remedies and
powers of the Company, the holders of Notes, and the Trustee shall continue as
though no such proceeding had been taken.
-50-
<PAGE>
Section 7.2 PAYMENTS OF AND SUITS FOR PAYMENTS OF NOTES UPON DEFAULT.
The Company covenants that --
(a) in case default shall be made in the payment of any
installment of interest upon any of the Notes as and when the same shall
become due and payable, and such default shall have continued for a
period of thirty (30) days, or
(b) in case default shall be made in the payment of the principal
of or premium, if any, on any of the Notes as and when the same shall
have become due and payable, whether at maturity of the Notes or in
connection with any redemption, by or under this Indenture declaration
or otherwise
- -- then, upon demand of the Trustee, the Company will pay to the Trustee, for
the benefit of the holders of the Notes, (i) the whole amount that then shall
have become due and payable on all such Notes for principal and premium, if any,
or interest, or both, as the case may be, (ii) interest upon the overdue
principal and premium, if any, and (to the extent that payment of such interest
is enforceable under applicable law) upon the overdue installments of interest
at the rate borne by the Notes, and (iii) such further amount as shall be
sufficient to cover the costs and expenses of collection, including reasonable
compensation to the Trustee, its agents, attorneys and counsel, and any expenses
or liabilities incurred by the Trustee hereunder other than through its
negligence or bad faith. Until such demand by the Trustee, the Company may pay
the principal of and premium, if any, and interest on the Notes to the
registered holders, whether or not the Notes are overdue.
In case the Company shall fail forthwith to pay such amounts upon such
demand, the Trustee, in its own name and as trustee of an express trust, shall
be entitled and empowered to institute any actions or proceedings at law or in
equity for the collection of the sums so due and unpaid, and may prosecute any
such action or proceeding to judgment or final decree, and may enforce any such
judgment or final decree against the Company or any other obligor on the Notes
and collect in the manner provided by law out of the property of the Company or
any other obligor on the Notes wherever situated the monies adjudged or decreed
to be payable.
In the case there shall be pending proceedings for the bankruptcy or for
the reorganization of the Company or any other obligor on the Notes under Title
11 of the United States Code, or any other applicable law, or in case a
receiver, assignee or trustee in bankruptcy or reorganization, liquidator,
sequestrator or similar official shall have been appointed for or taken
possession of the Company or such other obligor, the property of the Company or
such other obligor, or in the case of any other judicial proceedings relative to
the Company or such other obligor upon the Notes, or to the creditors or
property of the Company or such other obligor, (x) the Trustee, irrespective of
whether
-51-
<PAGE>
the principal of the Notes shall then be due and payable as therein expressed or
by declaration or otherwise and irrespective of whether the Trustee shall have
made any demand pursuant to the provisions of this Section 7.2, shall be
entitled and empowered, by intervention in such proceedings or otherwise, to
file and prove a claim or claims for the whole amount of principal, premium, if
any, and interest owing and unpaid in respect of the Notes, and, in case of any
judicial proceedings, to file such proofs of claim and other papers or documents
as may be necessary or advisable in order to have the claims of the Trustee and
of the Noteholders allowed in such judicial proceedings relative to the Company
or any other obligor on the Notes, its or their creditors, or its or their
property, and to collect and receive any monies or other property payable or
deliverable on any such claims, and to distribute the same after the deduction
of any amounts due the Trustee under Section 8.6, and (y) any receiver, assignee
or trustee in bankruptcy or reorganization, liquidator, custodian or similar
official is hereby authorized by each of the Noteholders to make such payments
to the Trustee, and, in the event that the Trustee shall consent to the making
of such payments directly to the Noteholders, to pay to the Trustee any amount
due it for reasonable compensation, expenses, advances and disbursements,
including counsel fees incurred by it up to the date of such distribution. To
the extent that such payment of reasonable compensation, expenses, advances and
disbursements out of the estate in any such proceedings shall be denied for any
reason, payment of the same shall be secured by a lien on, and shall be paid out
of, any and all distributions, dividends, monies, securities and other property
which the holders of the Notes may be entitled to receive in such proceedings,
whether in liquidation or under any plan of reorganization or arrangement or
otherwise.
All rights of action and of asserting claims under this Indenture, or
under any of the Notes, may be enforced by the Trustee without the possession of
any of the Notes, or the production thereof at any trial or other proceeding
relative thereto, and any such suit or proceeding instituted by the Trustee
shall be brought in its own name as trustee of an express trust, and any
recovery of judgment shall, after provision for the payment of the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, be for the ratable benefit of the holders of the Notes.
In any proceedings brought by the Trustee (and in any proceedings
involving the interpretation of any provision of this Indenture to which the
Trustee shall be a party), the Trustee shall be held to represent all the
holders of the Notes, and it shall not be necessary to make any holders of the
Notes parties to any such proceedings.
The Company shall file with the Trustee written notice of the occurrence
of any default or Event of Default within five Business Days of its becoming
aware of any such default or Event of Default.
-52-
<PAGE>
Section 7.3 APPLICATION OF MONIES COLLECTED BY TRUSTEE. Any monies
collected by the Trustee pursuant to this Article VII shall be applied in the
order following, at the date or dates fixed by the Trustee for the distribution
of such monies, upon presentation of the several Notes and stamping thereon the
payment, if only partially paid, and upon surrender thereof, if fully paid:
First: To the payment of all amounts due the Trustee
under Section 8.6;
Second: Subject to the provisions of Article IV, in case the
principal of the outstanding Notes shall not have become due and be
unpaid, to the payment of interest on the Notes in default in the order
of the maturity of the installments of such interest, with interest (to
the extent that such interest has been collected by the Trustee) upon
the overdue installments of interest at the rate borne by the Notes,
such payments to be made ratably to the Persons entitled thereto;
Third: Subject to the provisions of Article IV, in case the
principal of the outstanding Notes shall have become due, by declaration
or otherwise, and be unpaid, to the payment of the whole amount then
owing and unpaid upon the Notes for principal and premium, if any, and
interest, with interest on the overdue principal and premium, if any,
and (to the extent that such interest has been collected by the Trustee)
upon overdue installments of interest at the rate borne by the Notes;
and in case such monies shall be insufficient to pay in full the whole
amounts so due and unpaid upon the Notes, then to the payment of such
principal and premium, if any, and interest without preference or
priority of principal and premium, if any, over interest, or of interest
over principal and premium, if any, or of any installment of interest
over any other installment of interest, or of any Note over any other
Note, ratably to the aggregate of such principal and premium, if any,
and accrued and unpaid interest; and
Fourth: Subject to the provisions of Article IV, to the payment
of the remainder, if any, to the Company or any other Person lawfully
entitled thereto.
Section 7.4 PROCEEDINGS BY NOTEHOLDER. No holder of any Note shall have
any right by virtue of or by availing of any provision of this Indenture to
institute any suit, action or proceeding in equity or at law upon or under or
with respect to this Indenture, or for the appointment of a receiver, trustee,
liquidator, custodian or other similar official, or for any other remedy
hereunder, unless (a) such holder previously shall have given to the Trustee
written notice of an Event of Default and of the continuance thereof, as herein
before provided, (b) the holders of not less than 25 percent in aggregate
principal amount of the Notes then outstanding shall have made written request
upon the Trustee to institute such action, suit or proceeding in its own name as
Trustee hereunder and shall have offered to the Trustee such reasonable
indemnity as it may require against the costs,
-53-
<PAGE>
expenses and liabilities to be incurred therein or thereby, (c) the Trustee for
(60) days after its receipt of such notice, request and offer of indemnity shall
have neglected or refused to institute any such action, suit or proceeding and
(d) no direction inconsistent with such written request shall have been given to
the Trustee pursuant to Section 7.7. It is understood and intended, and hereby
expressly covenanted by the taker and holder of every Note with every other
taker and holder and the Trustee, that no one or more holders of Notes shall
have any right in any manner whatever by virtue of or by availing of any
provision of this Indenture to affect, disturb or prejudice the rights of any
other holder of Notes, or to obtain or seek to obtain priority over or
preference to any other such holder, or to enforce any right under this
Indenture, except in the manner herein provided and for the equal, ratable and
common benefit of all holders of Notes (except as otherwise provided herein).
For the protection and enforcement of this Section 7.4, each and every
Noteholder and the Trustee shall be entitled to such relief as can be given
either at law or in equity.
Notwithstanding any other provision of this Indenture and any provision
of any Note, the right of any holder of any Note to receive payment of the
principal of and premium, if any, and interest on such Note on or after the
respective due dates expressed in such Note, or to institute 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 anything in this Indenture or the Notes to the contrary,
the holder of any Note, without the consent of either the Trustee or the holder
of any other Note, in his own behalf and for his own benefit, may enforce, and
may institute and maintain any proceeding suitable to enforce, his rights of
conversion as provided herein.
Section 7.5 PROCEEDINGS BY TRUSTEE. In case of an Event of Default, the
Trustee may, in its discretion, proceed to protect and enforce the rights vested
in it by this Indenture by such appropriate judicial proceedings as the Trustee
shall deem most effectual to protect and enforce any of such rights, either by
suit in equity or by action at law or by proceeding in bankruptcy or otherwise,
whether for the specific enforcement of any covenant or agreement contained in
this Indenture or in aid of the exercise of any power granted in this Indenture,
or to enforce any other legal or equitable right vested in the Trustee by this
Indenture or by law.
Section 7.6 REMEDIES CUMULATIVE AND CONTINUING. Except as provided in
Section 2.6, all powers and remedies given by this Article VII to the Trustee or
to the Noteholders shall, to the extent permitted by law, be deemed cumulative
and not exclusive of any other powers and remedies thereof or of any other
powers and remedies available to the Trustee or the holders of the Notes, by
judicial proceedings or otherwise, to enforce the performance or observance of
the covenants and agreements contained in this Indenture, and no delay or
omission of the Trustee or of any holder of any of the
-54-
<PAGE>
Notes to exercise any right or power accruing upon any default or Event of
Default occurring and continuing as aforesaid shall impair any such right or
power, or shall be construed to be a waiver of any such default or any
acquiescence therein. Subject to the provisions of Section 7.4, every power and
remedy given by this Article VII or by law to the Trustee or to the Noteholders
may be exercised from time to time, and as often as shall be deemed expedient,
by the Trustee or by the Noteholders.
Section 7.7 DIRECTION OF PROCEEDINGS AND WAIVER OF DEFAULTS BY MAJORITY
OF NOTEHOLDERS. The holders of a majority in aggregate principal amount of the
Notes at the time outstanding, determined in accordance with Section 9.4, shall
have the right to direct the time, method, and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any trust or
power conferred on the Trustee, under this Indenture; PROVIDED, HOWEVER, that
(a) such direction shall not be in conflict with any rule of law or with this
Indenture, and (b) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction. The holders of a majority
in aggregate principal amount of the Notes at the time outstanding, determined
in accordance with Section 9.4, may, on behalf of the holders of all of the
Notes, waive any past default or Event of Default hereunder and its consequences
except (i) a default in the payment of interest or premium, if any, on, or the
principal of, the Notes, (ii) a failure by the Company to convert any Notes into
Common Stock, (iii) a default in the payment of redemption price pursuant to
Article III or (iv) a default in respect of a covenant or provisions hereof
which under Article XI cannot be modified or amended without the consent of the
holders of all Notes then outstanding. Upon any such waiver the Company, the
Trustee and the holders of the Notes shall be restored to their former positions
and rights hereunder, but no such waiver shall extend to any subsequent or other
default or Event of Default or impair any right consequent thereon. Whenever any
default or Event of Default hereunder shall have been waived as permitted by
this Section 7.7, said default or Event of Default shall for all purposes of the
Notes and this Indenture be deemed to have been cured and to be not continuing,
but no such waiver shall extend to any subsequent or other default or Event of
Default or impair any right consequent thereon. It is hereby expressly provided
that any provision of Section 316(a)(1) of the Trust Indenture Act that
conflicts with the provisions of this Section 7.7 is excluded from this
Indenture.
Section 7.8 NOTICE OF DEFAULTS. The Trustee shall, within ninety (90)
days after it has knowledge of the occurrence of a default, mail to all
Noteholders, as the names and addresses of such holders appear upon the Note
register, notice of all defaults known to a Responsible Officer, unless such
defaults shall have been cured or waived before the giving of such notice;
PROVIDED that, except in the case of default in the payment of the principal of,
or premium, if any, or interest on any of the Notes, the Trustee shall be
protected in withholding such notice if and so long as the board of directors,
the executive committee, or a trust committee of directors and/or Responsible
Officers of the Trustee in
-55-
<PAGE>
good faith determine that the withholding of such notice is in the interests of
the Noteholders.
Section 7.9 UNDERTAKING TO PAY COSTS. All parties to this Indenture
agree, and each holder of any Note by his acceptance thereof shall be deemed to
have agreed, (a) that any court may require, in its discretion, in any suit for
the enforcement of any right or remedy under this Indenture, or in any suit
against the Trustee for any action taken or omitted by it as Trustee, the filing
by any party litigant in such suit of an undertaking to pay the costs of such
suit and (b) that such court may assess, in its discretion, reasonable costs,
including reasonable attorneys' fees, against any party litigant in such suit,
having due regard to the merits and good faith of the claims or defenses made by
such party litigant; PROVIDED that the provisions of this Section 7.9 (to the
extent permitted by law) shall not apply (i) to any suit instituted by the
Trustee, (ii) to any suit instituted by any Noteholder or group of Noteholders
holding in the aggregate more than ten percent in principal amount of the Notes
at the time outstanding determined in accordance with Section 9.4, (iii) to any
suit instituted by any Noteholder for the enforcement of the payment of the
principal of or premium, if any, or interest on any Note on or after the due
date expressed in such Note or (iv) to any suit for the enforcement of the right
to convert any Note in accordance with the provisions of Article XV.
ARTICLE VIII
CONCERNING THE TRUSTEE
Section 8.1 DUTIES AND RESPONSIBILITIES OF TRUSTEE. The Trustee, prior
to the occurrence of an Event of Default and after the curing of all Events of
Default which may have occurred, undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture. In case an Event of
Default has occurred (which has not been cured or waived), the Trustee shall
exercise such of the rights and powers vested in it by this Indenture, and use
the same degree of care and skill in their exercise, as a prudent man would
exercise or use under the circumstances in the conduct of his own affairs.
No provision of this Indenture shall be construed to relieve the Trustee
from liability for its own negligent action, its own negligent failure to act or
its own willful misconduct, except that --
(a) prior to the occurrence of an Event of Default and after the
curing or waiving of all Events of Default which may have occurred:
(1) the duties and obligations of the Trustee shall be
determined solely by the express provisions of this Indenture and
the Trust Indenture Act, and the Trustee shall not be liable
except for the performance of such
-56-
<PAGE>
duties and obligations as are specifically set forth in this
Indenture, and no implied covenants or obligations shall be read
into this Indenture and the Trust Indenture Act against the
Trustee; and
(2) in the absence of bad faith and willful misconduct on
the part of the Trustee, the Trustee may conclusively rely, as to
the truth of the statements and the correctness of the opinions
expressed therein, upon any certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture;
but, in the case of any such certificates or opinions which by
any provisions hereof are specifically required to be furnished
to the Trustee, the Trustee shall be under a duty to examine the
same to determine whether or not they conform to the requirements
of this Indenture (but need not confirm or investigate the
accuracy of mathematical calculations or other facts stated
therein);
(b) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer or Responsible Officers of
the Trustee, unless the Trustee was negligent in ascertaining the
pertinent facts;
(c) the Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with the
direction of the holders of not less than a majority in principal amount
of the Notes at the time outstanding determined as provided in Section
9.4 relating to the time, method and place of conducting any proceeding
for any remedy available to the Trustee, or exercising any trust or
power conferred upon the Trustee, under this Indenture; and
(d) whether or not therein provided, every provision of this
Indenture relating to the conduct or affecting the liability of, or
affording protection to, the Trustee shall be subject to the provisions
of this Section.
None of the provisions contained in this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur personal financial
liability in the performance of any of its duties, or in the exercise of any of
its rights or powers, if there is reasonable ground for believing that the
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.
Section 8.2 RELIANCE ON DOCUMENTS, OPINIONS, ETC. Except as otherwise
provided in Section 8.1:
(a) the Trustee may rely and shall be protected in acting upon
any resolution, certificate, statement, instrument, opinion, report,
notice, request, consent, order, bond, debenture, note, coupon or other
paper or document believed
-57-
<PAGE>
by it in good faith to be genuine and to have been signed or presented
by the proper party or parties;
(b) any request, direction, order or demand of the Company
mentioned herein shall be sufficiently evidenced by an Officers'
Certificate (unless other evidence in respect thereof is herein
specifically prescribed); and any resolution of the Board of Directors
may be evidenced to the Trustee by a copy thereof certified by the
Secretary or an Assistant Secretary of the Company;
(c) the Trustee may consult with counsel of its selection and any
advice or Opinion of Counsel shall be full and complete authorization
and protection in respect of any action taken or omitted by it hereunder
in good faith and in accordance with such advice or Opinion of Counsel;
(d) the Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Indenture at the request,
order or direction of any of the Noteholders pursuant to the provisions
of this Indenture, unless such Noteholders shall have offered to the
Trustee reasonable security or indemnity against the costs, expenses and
liabilities which may be incurred therein or thereby;
(e) the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture or other paper or document, but the Trustee, in its
discretion, may make such further inquiry or investigation into such
facts or matters as it may see fit, and, if the Trustee shall determine
to make such further inquiry or investigation, it shall be entitled to
examine the books, records and premises of the Company, personally or by
agent or attorney; PROVIDED, HOWEVER, that if the payment within a
reasonable time to the Trustee of the costs, expenses or liabilities
likely to be incurred by it in the making of such investigation is, in
the opinion of the Trustee, not reasonably assured to the Trustee by the
security afforded to it by the terms of this Indenture, the Trustee may
require reasonable indemnity against such expenses or liability as a
condition to so proceeding; the reasonable expenses of every such
examination shall be paid by the Company or, if paid by the Trustee or
any predecessor Trustee, shall be repaid by the Company upon demand; and
(f) the Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through agents
or attorneys and the Trustee shall not be responsible for any misconduct
or negligence on the part of any agent or attorney appointed by it with
due care hereunder.
-58-
<PAGE>
Section 8.3 NO RESPONSIBILITY FOR RECITALS, ETC. The recitals contained
herein and in the Notes (except in the Trustee's certificate of authentication)
shall be taken as the statements of the Company, and the Trustee assumes no
responsibility for the correctness of the same. The Trustee makes no
representations as to the validity or sufficiency of this Indenture or of the
Notes. The Trustee shall not be accountable for the use or application by the
Company of any Notes or the proceeds of any Notes authenticated and delivered by
the Trustee in conformity with the provisions of this Indenture.
Section 8.4 TRUSTEE, PAYING AGENTS, CONVERSION AGENTS OR REGISTRAR MAY
OWN NOTES. The Trustee, any paying agent, any conversion agent or the Note
registrar, in its individual or any other capacity, may become the owner or
pledgee of Notes with the same rights it would have if it were not Trustee,
paying agent, conversion agent or Note registrar.
Section 8.5 MONIES TO BE HELD IN TRUST. Subject to the provisions of
Section 13.4, all monies received by the Trustee shall, until used or applied as
herein provided, be held in trust for the purposes for which they were received.
Money held by the Trustee in trust hereunder need not be segregated from other
funds except to the extent required by law. The Trustee shall be under no
liability for interest on any money received by it hereunder except as may be
agreed from time to time by the Company and the Trustee.
Section 8.6 COMPENSATION AND EXPENSES OF TRUSTEE. The Company covenants
and agrees to pay to the Trustee from time to time, and the Trustee shall be
entitled to, such compensation as the Company and the Trustee shall from time to
time agree in writing for all services rendered by it hereunder in any capacity
(which shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust), and the Company will pay or
reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances reasonably incurred or made by the Trustee in
accordance with any of the provisions of this Indenture (including the
reasonable compensation and the expenses and disbursements of its counsel and of
all Persons not regularly in its employ) except any such expense, disbursement
or advance as may arise from its negligence, willful misconduct, recklessness or
bad faith. The Company also covenants to indemnify the Trustee in any capacity
under this Indenture and its agents and any authenticating agent for, and to
hold them harmless against, any loss, liability or expense incurred without
negligence, willful misconduct, recklessness, or bad faith on the part of the
Trustee or such agent or authenticating agent, as the case may be, and arising
out of or in connection with the acceptance or administration of this trust or
in any other capacity hereunder, including the costs and expenses of defending
themselves against any claim of liability in the premises. The obligations of
the Company under this Section 8.6 to compensate or indemnify the Trustee and to
pay or reimburse the Trustee for expenses, disbursements and advances shall be
secured by a lien prior to that of the Notes upon all property and funds held or
collected by the Trustee
-59-
<PAGE>
as such, except funds held in trust for the benefit of the holders of particular
Notes. The obligation of the Company under this Section shall survive the
satisfaction and discharge of this Indenture.
When the Trustee and its agents and any authenticating agent incur
expenses or render services after the occurrence of an Event of Default
specified in Section 7.1 (d) or (e) the expenses and the compensation for the
services are intended to constitute expenses of administration under any
bankruptcy, insolvency or similar laws.
The provisions of this Section shall survive the termination of this
Indenture.
Section 8.7 OFFICERS' CERTIFICATE AS EVIDENCE. Except as otherwise
provided in Section 8.1, whenever in the administration of the provisions of
this Indenture the Trustee shall deem it necessary or desirable that a matter be
proved or established prior to taking or omitting any action hereunder, such
matter (unless other evidence in respect thereof be herein specifically
prescribed) may, in the absence of negligence, willful misconduct, recklessness,
or bad faith on the part of the Trustee, be deemed to be conclusively proved and
established by an Officers' Certificate delivered to the Trustee.
Section 8.8 CONFLICTING INTERESTS OF TRUSTEE. If the Trustee has or
shall acquire a conflicting interest within the meaning of Section 310(b) of the
Trust Indenture Act, the Trustee shall either eliminate such interest or resign,
to the extent and in the manner provided by this Indenture, subject to the
provisions of the Trust Indenture Act.
Section 8.9 ELIGIBILITY OF TRUSTEE. There shall at all times be a
Trustee hereunder which shall be a Person that is eligible pursuant to the Trust
Indenture Act to act as such and has a combined capital and surplus of at least
$50,000,000. If such Person publishes reports of condition at least annually,
pursuant to law or to the requirements of any supervising or examining
authority, then for the purposes of this Section, the combined capital and
surplus of such Person shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time
the Trustee shall cease to be eligible in accordance with the provisions of this
Section, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article.
Section 8.10 RESIGNATION OR REMOVAL OF TRUSTEE. Subject to the
provisions of Section 310(b) of the Trust Indenture Act concerning the
resignation or removal of a trustee that has or shall acquire a conflicting
interest:
(a) The Trustee may at any time resign by giving written notice
of such resignation to the Company and to the holders of Notes. Upon
receiving such notice of resignation, the Company shall promptly appoint
a successor trustee by written instrument, in duplicate, executed by
order of the Board of Directors, one copy of which instrument shall be
delivered to the resigning Trustee and one copy
-60-
<PAGE>
to the successor trustee. If no successor trustee shall have been so
appointed and have accepted appointment thirty (30) days after the
mailing of such notice of resignation to the Noteholders, the resigning
Trustee may petition any court of competent jurisdiction for the
appointment of a successor trustee, or any Noteholder who has been a
bona fide holder of a Note or Notes for at least six months may, subject
to the provisions of Section 7.9, on behalf of himself and all others
similarly situated, petition any such court for the appointment of a
successor trustee. Such court may thereupon, after such notice, if any,
as it may deem proper and prescribe, appoint a successor trustee.
(b) In case at any time any of the following shall
occur --
(1) the Trustee shall fail to comply with Section 8.8
after written request therefor by the Company or by any
Noteholder who has been a bona fide holder of a Note or Notes for
at least six months; or
(2) the Trustee shall cease to be eligible in accordance
with the provisions of Section 8.9 and shall fail to resign after
written request therefor by the Company or by any such
Noteholder; or
(3) the Trustee shall become incapable of acting, or
shall be adjudged a bankrupt or insolvent, or a receiver of the
Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Trustee or of its
property or affairs for the purpose of rehabilitation,
conservation or liquidation
-- then, in any such case, the Company may remove the Trustee and
appoint a successor trustee by written instrument, in duplicate,
executed by order of the Board of Directors, one copy of which
instrument shall be delivered to the Trustee so removed and one copy to
the successor trustee, or, subject to the provisions of Section 7.9, any
Noteholder who has been a bona fide holder of a Note or Notes for at
least six months may, on behalf of himself and all others similarly
situated, petition any court of competent jurisdiction for the removal
of the Trustee and the appointment of a successor trustee. Such court
may thereupon, after such notice, if any, as it may deem proper and
prescribe, remove the Trustee and appoint a successor trustee. If a
successor trustee shall not have been so appointed by the Company or any
Noteholder, or shall not have accepted such appointment, within thirty
(30) days after the Trustee's removal is requested, the Trustee being
removed may petition any court of competent jurisdiction for the
appointment of a successor trustee. Such court may thereupon, after such
notice, if any, as it may deem proper and prescribe, appoint a successor
trustee.
-61-
<PAGE>
(c) The holders of a majority in aggregate principal amount of
the Notes at the time outstanding may at any time remove the Trustee and
nominate a successor trustee, by giving notice to the Company and the
Trustee, which shall be deemed appointed as successor trustee unless
within ten (10) days after notice to the Company of such nomination the
Company objects thereto, in which case the Trustee so removed or any
Noteholder, upon the terms and conditions and otherwise as in Section
8.10(a) provided, may petition any court of competent jurisdiction for
an appointment of a successor trustee.
(d) Any resignation or removal of the Trustee and appointment of
a successor trustee pursuant to any of the provisions of this Section
8.10 shall become effective upon acceptance of appointment by the
successor trustee as provided in Section 8.11.
Section 8.11 ACCEPTANCE BY SUCCESSOR TRUSTEE. Any successor trustee
appointed as provided in Section 8.10 shall execute, acknowledge and deliver to
the Company and to its predecessor trustee an instrument accepting such
appointment hereunder, and thereupon the resignation or removal of the
predecessor trustee shall become effective and such successor trustee, without
any further act, deed or conveyance, shall become vested with all the rights,
powers, duties and obligations of its predecessor hereunder, with like effect as
if originally named as trustee herein. Notwithstanding the preceding sentence,
on the written request of the Company or of the successor trustee, the trustee
ceasing to act shall, upon payment of any amounts then due it pursuant to the
provisions of Section 8.6, execute and deliver an instrument transferring to
such successor trustee all the rights and powers of the trustee so ceasing to
act. Upon request of any such successor trustee, the Company shall execute any
and all instruments in writing for more fully and certainly vesting in and
confirming to such successor trustee all such rights and powers. Any trustee
ceasing to act shall, nevertheless, retain a lien upon all property and funds
held or collected by such trustee as such, except for funds held in trust for
the benefit of holders of particular Notes, to secure any amounts then due it
pursuant to the provisions of Section 8.6.
No successor trustee shall accept appointment as provided in this
Section 8.11 unless at the time of such acceptance such successor trustee shall
be qualified under the provisions of Section 8.8 and be eligible under the
provisions of Section 8.9.
Upon acceptance of appointment by a successor trustee as provided in
this Section 8.11, the Company (or the former trustee, at the written direction
of the Company) shall mail or cause to be mailed notice of the succession of
such trustee hereunder to the holders of Notes at their addresses as they shall
appear on the Note register. If the Company fails to mail such notice within ten
(10) days after acceptance of appointment
-62-
<PAGE>
by the successor trustee, the successor trustee shall cause such notice to be
mailed at the expense of the Company.
Section 8.12 SUCCESSION BY MERGER, ETC. Any corporation into which the
Trustee may be merged or converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or consolidation to which the
Trustee shall be a party, or any corporation succeeding to all or substantially
all of the corporate trust business of the Trustee (including any trust created
by this Indenture), shall be the successor to the Trustee hereunder without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, provided that in the case of any corporation succeeding to all
or substantially all of the corporate trust business of the Trustee such
corporation shall be qualified under the provisions of Section 8.8 and eligible
under the provisions of Section 8.9.
In case, at the time such successor to the Trustee shall succeed to the
trusts created by this Indenture, any of the Notes shall have been authenticated
but not delivered, any such successor to the Trustee may adopt the certificate
of authentication of any predecessor trustee or authenticating agent appointed
by such predecessor trustee, and deliver such Notes so authenticated; and in
case at that time any of the Notes shall not have been authenticated, any
successor to the Trustee or an authenticating agent appointed by such successor
trustee may authenticate such Notes either in the name of any predecessor
trustee hereunder or in the name of the successor trustee; and in all such cases
such certificates shall have the full force which it is anywhere in the Notes or
in this Indenture provided that the certificate of the Trustee shall have;
PROVIDED, HOWEVER, that the right to adopt the certificate of authentication of
any predecessor Trustee or authenticate Notes in the name of any predecessor
Trustee shall apply only to its successor or successors by merger, conversion or
consolidation.
Section 8.13 LIMITATION ON RIGHTS OF TRUSTEE AS Creditor. If and when
the Trustee shall be or become a creditor of the Company (or any other obligor
upon the Notes), the Trustee shall be subject to the provisions of Section 311
of the Trust Indenture Act regarding the collection of the claims against the
Company (or any such other obligor).
Section 8.14 TRUSTEE'S APPLICATION FOR INSTRUCTIONS FROM THE COMPANY.
Any application by the Trustee for written instructions from the Company may, at
the option of the Trustee, set forth in writing any action proposed to be taken
or omitted by the Trustee under this Indenture and the date on and/or after
which such action shall be taken or such omission shall be effective. The
Trustee shall not be liable for any action taken by, or omission of, the Trustee
in accordance with a proposal included in such application on or after the date
specified in such application (which date shall not be less than three Business
Days after the date any officer of the Company actually receives such
application, unless any such officer shall have consented in writing to any
earlier date)
-63-
<PAGE>
unless prior to taking any such action (or the effective date in the case of an
omission), the Trustee shall have received written instructions in response to
such application specifying the action to be taken or omitted.
ARTICLE IX
CONCERNING THE NOTEHOLDERS
Section 9.1 ACTION BY NOTEHOLDERS. 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 Noteholders
in person or by agent or proxy appointed in writing, or (b) by the record of the
holders of Notes voting in favor thereof at any meeting of Noteholders duly
called and held in accordance with the provisions of Article X, or (c) by a
combination of such instrument or instruments and any such record of such a
meeting of Noteholders. Whenever the Company or the Trustee solicits the taking
of any action by the holders of the Notes, the Company or the Trustee may fix,
in advance of such solicitation, a date as the record date for determining
holders entitled to take such action. The record date shall be not more than
fifteen (15) days prior to the date of commencement of solicitation of such
action.
Section 9.2 PROOF OF EXECUTION BY NOTEHOLDERS. Subject to the provisions
of Sections 8.1, 8.2 and 10.5, proof of the execution of any instrument by a
Noteholder or his agent or proxy shall be sufficient if made in accordance with
such reasonable rules and regulations as may be prescribed by the Trustee or in
such manner as shall be satisfactory to the Trustee. The holding of Notes shall
be proved by the registry of such Notes or by a certificate of the Note
registrar.
The record of any Noteholders' meeting shall be proved in the manner
provided in Section 10.6.
Section 9.3 WHO ARE DEEMED ABSOLUTE OWNERS. The Company, the Trustee,
any paying agent, any conversion agent and any Note registrar may deem the
Person in whose name such Note shall be registered upon the Note register to be,
and may treat him as, the absolute owner of such Note (whether or not such Note
shall be overdue and notwithstanding any notation of ownership or other writing
thereon) for the purpose of receiving payment of or on account of the principal
of, premium, if any, and interest on such Note, for conversion of such Note and
for all other purposes; and neither the Company nor the Trustee nor any paying
agent nor any conversion agent nor any Note
-64-
<PAGE>
registrar shall be affected by any notice to the contrary. All such payments so
made to any holder for the time being, or upon his order, shall be valid and, to
the extent of the sum or sums so paid, effectual to satisfy and discharge the
liability for monies payable upon any such Note.
Section 9.4 COMPANY-OWNED NOTES DISREGARDED. In determining whether the
holders of the requisite aggregate principal amount of Notes have concurred in
any direction, consent, waiver or other action under this Indenture, Notes which
are owned by the Company or any other obligor on the Notes or by any Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with the Company or any other obligor on the Notes shall be
disregarded and deemed not to be outstanding for the purpose of any such
determination; PROVIDED that for the purposes of determining whether the Trustee
shall be protected in relying on any such direction, consent, waiver or other
action, only Notes which a Responsible Officer knows are so owned shall be so
disregarded. Notes so owned which have been pledged in good faith may be
regarded as outstanding for the purposes of this Section 9.4 if the pledgee
shall establish to the satisfaction of the Trustee the pledgee's right to vote
such Notes and that the pledgee is not the Company, any other obligor on the
Notes or a Person directly or indirectly controlling or controlled by or under
direct or indirect common control with the Company or any such other obligor. In
the case of a dispute as to such right, any decision by the Trustee taken upon
the advice of counsel shall be full protection to the Trustee. Upon request of
the Trustee, the Company shall furnish to the Trustee promptly an Officers'
Certificate listing and identifying all Notes, if any, known by the Company to
be owned or held by or for the account of any of the above described Persons;
and, subject to Section 8.1, the Trustee shall be entitled to accept such
Officers' Certificate as conclusive evidence of the facts therein set forth and
of the fact that all Notes not listed therein are outstanding for the purpose of
any such determination.
Section 9.5 REVOCATION OF CONSENTS: FUTURE HOLDERS Bound. At any time
prior to (but not after) the evidencing to the Trustee, as provided in Section
9.1, of the taking of any action by the holders of the percentage in aggregate
principal amount of the Notes specified in this Indenture in connection with
such action, any holder of a Note which is shown by the evidence to be included
in the Notes the holders of which have consented to such action may, by filing
written notice with the Trustee at its Corporate Trust Office and upon proof of
holding as provided in Section 9.2, revoke such action so far as concerns such
Note. Except as aforesaid, any such action taken by the holder of any Note shall
be conclusive and binding upon such holder and upon all future holders and
owners of such Note and of any Notes issued in exchange or substitution
therefor, irrespective of whether any notation in regard thereto is made upon
such Note or any Note issued in exchange or substitution therefor.
-65-
<PAGE>
ARTICLE X
NOTEHOLDERS' MEETINGS
Section 10.1 PURPOSE OF MEETINGS. A meeting of Noteholders may be called
at any time and from time to time pursuant to the provisions of this Article X
for any of the following purposes:
(1) to give any notice to the Company or to the Trustee or to
give any directions to the Trustee permitted under this Indenture, or to
consent to the waiving of any default or Event of Default hereunder and
its consequences, or to take any other action authorized to be taken by
Noteholders pursuant to any of the provisions of Article VII;
(2) to remove the Trustee and nominate a successor trustee
pursuant to the provisions of Article VIII;
(3) to consent to the execution of an indenture or indentures
supplemental hereto pursuant to the provisions of Section 11.2; or
(4) to take any other action authorized to be taken by or on
behalf of the holders of any specified aggregate principal amount of the
Notes under any other provision of this Indenture or under applicable
law.
Section 10.2 CALL OF MEETINGS BY TRUSTEE. The Trustee may at any time
call a meeting of Noteholders to take any action specified in Section 10.1, to
be held at such time and at such place at a location within 10 miles of the
Corporate Trust Office or the Borough of Manhattan, The City of New York, as the
Trustee shall determine. Notice of every meeting of the Noteholders, setting
forth the time and the place of such meeting and in general terms the action
proposed to be taken at such meeting and the establishment of any record date
pursuant to Section 9.1, shall be mailed to holders of Notes at their addresses
as they shall appear on the Note register. Such notice shall also be mailed to
the Company. Such notices shall be mailed not less than twenty (20) nor more
than ninety (90) days prior to the date fixed for the meeting.
Any meeting of Noteholders 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 the holders of all Notes outstanding, and
if the Company and the Trustee are either present by duly authorized
representatives or have, before or after the meeting, waived notice.
Section 10.3 CALL OF MEETINGS BY COMPANY OR NOTEHOLDERS. In case at any
time the Company, pursuant to a resolution of its Board of Directors, or the
holders of at least
-66-
<PAGE>
ten percent in aggregate principal amount of the Notes then outstanding, shall
have requested the Trustee to call a meeting of Noteholders, by written request
setting forth in reasonable detail the action proposed to be taken at the
meeting, and the Trustee shall not have mailed the notice of such meeting within
twenty (20) days after receipt of such request, then the Company or such
Noteholders may determine the time and the place at any location within 10 miles
of the Corporate Trust Office or the Borough of Manhattan, The City of New York,
for such meeting and may call such meeting to take any action authorized in
Section 10.1, by mailing notice thereof as provided in Section 10.2.
Section 10.4 QUALIFICATIONS FOR VOTING. To be entitled to vote at any
meeting of Noteholders a Person shall (a) be a holder of one or more Notes on
the record date pertaining to such meeting or (b) be a Person appointed by an
instrument in writing as proxy by a holder of one or more Notes. The only
Persons who shall be entitled to be present or to speak at any meeting of
Noteholders 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 10.5 REGULATIONS. Notwithstanding any other provisions of this
Indenture, the Trustee may make such reasonable regulations as it may deem
advisable for any meeting of Noteholders, 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 think fit.
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 Noteholders as provided in Section 10.3, in which case the Company
or the Noteholders calling the meeting, as the case may be, shall in like manner
appoint a temporary chairman. A permanent chairman and a permanent secretary of
the meeting shall be elected by vote of the holders of a majority in principal
amount of the Notes represented at the meeting and entitled to vote at the
meeting.
Subject to the provisions of Section 9.4, at any meeting each Noteholder
or proxy holder shall be entitled to one vote for each $1,000 principal amount
of Notes held or represented by him; PROVIDED, HOWEVER, that no vote shall be
cast or counted at any meeting in respect of any Note 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 him or instruments in writing as aforesaid duly designating him as
the proxy to vote on behalf of other Noteholders. Any meeting of Noteholders
duly called pursuant to the provisions of Section 10.2 or 10.3 may be adjourned
from time to time by the holders of a majority of the aggregate principal
-67-
<PAGE>
amount of Notes represented at the meeting, whether or not constituting a
quorum, and the meeting may be held as so adjourned without further notice.
Section 10.6 VOTING. The vote upon any resolution submitted to any
meeting of Noteholders shall be by written ballot on which shall be subscribed
the signatures of the holders of Notes or of their representatives by proxy and
the principal amount of the Notes held or represented by them. The permanent
chairman of the meeting shall appoint two inspectors of votes who shall count
all votes cast at the meeting for or against any resolution and who shall make
and file with the secretary of the meeting their verified written reports in
duplicate of all votes cast at the meeting. A record in duplicate of the
proceedings of each meeting of Noteholders shall be prepared by the secretary of
the meeting and there shall be attached to said record the original reports of
the inspectors of votes on any vote by ballot taken thereat and affidavits by
one or more persons having knowledge of the facts setting forth a copy of the
notice of the meeting and showing that said notice was mailed as provided in
Section 10.2. The record shall show the principal amount of the Notes voting in
favor of or against any resolution. The record shall be signed and verified by
the affidavits of the permanent chairman and secretary of the meeting and one of
the duplicates shall be delivered to the Company and the other to the Trustee to
be preserved by the Trustee, the latter to have attached thereto the ballots
voted at the meeting.
Any record so signed and verified shall be conclusive evidence of the
matters therein stated.
Section 10.7 NO DELAY OF RIGHTS BY MEETING. Nothing in this Article X
contained shall be deemed or construed to authorize or permit, by reason of any
call of a meeting of Noteholders 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 Noteholders under
any of the provisions of this Indenture or of the Notes.
ARTICLE XI
SUPPLEMENTAL INDENTURES
Section 11.1 SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF NOTEHOLDERS. The
Company, when authorized by the resolutions of the Board of Directors, and the
Trustee may from time to time and at any time enter into an indenture or
indentures supplemental hereto for one or more of the following purposes:
-68-
<PAGE>
(a) to make provision with respect to the conversion rights of
the holders of Notes pursuant to the requirements of Section 15.6 and
the redemption obligations of the Company pursuant to the requirements
of Section 3.5(e);
(b) subject to Article IV, to convey, transfer, assign, mortgage
or pledge to the Trustee, as security for the Notes, any property or
assets;
(c) to evidence the succession of another corporation to the
Company, or successive successions, and the assumption by the successor
corporation of the covenants, agreements and obligations of the Company
pursuant to Article XII;
(d) to add to the covenants of the Company such further
covenants, restrictions or conditions as the Board of Directors and the
Trustee shall consider to be for the benefit of the holders of Notes,
and to make the occurrence, or the occurrence and continuance, of a
default in any such additional covenants, restrictions or conditions a
default or an Event of Default permitting the enforcement of all or any
of the several remedies provided in this Indenture as herein set forth;
PROVIDED, HOWEVER, that in respect of any such additional covenant,
restriction or condition such supplemental indenture may provide for a
particular period of grace after default (which period may be shorter or
longer than that allowed in the case of other defaults) or may provide
for an immediate enforcement upon such default or may limit the remedies
available to the Trustee upon such default;
(e) to provide for the issuance under this Indenture of Notes in
coupon form (including Notes registrable as to principal only) and to
provide for exchangeability of such Notes with the Notes issued
hereunder in fully registered form and to make all appropriate changes
for such purpose;
(f) to cure any ambiguity or to correct or supplement any
provision contained herein or in any supplemental indenture which may be
defective or inconsistent with any other provision contained herein or
in any supplemental indenture, or to make such other provisions in
regard to matters or questions arising under this Indenture which shall
not materially adversely affect the interests of the holders of the
Notes;
(g) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Notes; or
(h) to modify, eliminate or add to the provisions of this
Indenture to such extent as shall be necessary to effect the
qualifications of this Indenture under the Trust Indenture Act or under
any similar federal statute hereafter enacted.
-69-
<PAGE>
The Trustee is hereby authorized to join with the Company in the
execution of any such supplemental indenture, to make any further appropriate
agreements and stipulations which may be therein contained and to accept the
conveyance, transfer and assignment of any property thereunder, but the Trustee
shall not be obligated to, but may in its discretion, enter into any
supplemental indenture which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
Any supplemental indenture authorized by the provisions of this Section
11.1 may be executed by the Company and the Trustee without the consent of the
holders of any of the Notes at the time outstanding, notwithstanding any of the
provisions of Section 11.2.
Section 11.2 SUPPLEMENTAL INDENTURES WITH CONSENT OF NOTEHOLDERS. With
the consent (evidenced as provided in Article IX) of the holders of not less
than a majority in aggregate principal amount of the Notes at the time
outstanding, the Company, when authorized by the resolutions of the Board of
Directors, and the Trustee may from time to time and at any time enter into an
indenture or indentures supplemental hereto for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Indenture or any supplemental indenture or of modifying in any manner the
rights of the holders of the Notes; PROVIDED, HOWEVER, that no such supplemental
indenture shall, without the consent of the holders of all Notes then
outstanding, (i) extend the fixed maturity of any Note, or reduce the rate or
extend the time of payment of interest thereon, or reduce the principal amount
thereof or premium, if any, thereon, or reduce any amount payable on redemption
thereof, or impair the right of any Noteholder to institute suit for the payment
thereof, or make the principal thereof or interest or premium, if any, thereon
payable in any coin or currency other than that provided in the Notes, or modify
the provisions of this Indenture with respect to the subordination of the Notes
in a manner adverse to the Noteholders in any material respect, or change the
obligation of the Company to redeem any Note upon the happening of a Fundamental
Change in a manner adverse to the holder of Notes, or impair the right to
convert the Notes into Common Stock subject to the terms set forth herein,
including Section 15.6, without the consent of the holder of each Note so
affected, or (ii) reduce the aforesaid percentage of Notes whose holders are
required to consent to any such supplemental indenture.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Persons entitled to consent to any indenture
supplemental hereto. If a record date is fixed, the holders on such record date,
or their duly designated proxies, and only such Persons, shall be entitled to
consent to such supplemental indenture, whether or not such holders remain
holders after such record date; PROVIDED, that unless such consent shall have
become effective by virtue of the requisite percentage having been obtained
prior to the date which is 90 days after such record date, any such consent
-70-
<PAGE>
previously given shall automatically and without further action by any holder be
cancelled and of no further effect.
Upon the request of the Company, accompanied by a copy of the
resolutions of the Board of Directors certified by its Secretary or Assistant
Secretary authorizing the execution of any such supplemental indenture, and upon
the filing with the Trustee of evidence of the consent of Noteholders as
aforesaid, the Trustee shall join with the Company in the execution of such
supplemental indenture unless such supplemental indenture affects the Trustee's
own rights, duties or immunities under this Indenture or otherwise, in which
case the Trustee may in its discretion, but shall not be obligated to, enter
into such supplemental indenture.
It shall not be necessary for the consent of the Noteholders under this
Section 11.2 to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such consent shall approve the
substance thereof.
Section 11.3 EFFECT OF SUPPLEMENTAL INDENTURE. Any supplemental
indenture executed pursuant to the provisions of this Article XI shall comply
with the Trust Indenture Act, as then in effect; PROVIDED that this Section 11.3
shall not require such supplemental indenture or the Trustee to be qualified
under the Trust Indenture Act prior to the time such qualification is in fact
required under the terms of the Trust Indenture Act or the Indenture has been
qualified under the Trust Indenture Act, nor shall it constitute any admission
or acknowledgment by any party to such supplemental indenture that any such
qualification is required prior to the time such qualification is in fact
required under the terms of the Trust Indenture Act or the Indenture has been
qualified under the Trust Indenture Act. Upon the execution of any supplemental
indenture pursuant to the provisions of this Article XI, this Indenture shall be
and be deemed to be modified and amended in accordance therewith and the
respective rights, limitation of rights, obligations, duties and immunities
under this Indenture of the Trustee, the Company and the holders of Notes shall
thereafter be determined, exercised and enforced hereunder subject in all
respects to such modifications and amendments and all the terms and conditions
of any such supplemental indenture shall be and be deemed to be part of the
terms and conditions of this Indenture for any and all purposes.
Section 11.4 NOTATION ON NOTES. Notes authenticated and delivered after
the execution of any supplemental indenture pursuant to the provisions of this
Article XI may bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company or the Trustee shall
so determine, new Notes so modified as to conform, in the opinion of the Trustee
and the Board of Directors, to any modification of this Indenture contained in
any such supplemental indenture may, at the Company's expense, be prepared and
executed by the Company, authenticated by the Trustee (or an authenticating
agent duly appointed by the Trustee pursuant to Section
-71-
<PAGE>
16.11) and delivered in exchange for the Notes then outstanding, upon surrender
of such Notes then outstanding.
Section 11.5 EVIDENCE OF COMPLIANCE OF SUPPLEMENTAL INDENTURE TO BE
FURNISHED TRUSTEE. The Trustee, subject to the provisions of Sections 8.1 and
8.2, may receive an Officers' Certificate and an Opinion of Counsel as
conclusive evidence that any supplemental indenture executed pursuant hereto
complies with the requirements of this Article XI.
ARTICLE XII
CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE
Section 12.1 COMPANY MAY CONSOLIDATE ETC. ON CERTAIN Terms. Subject to
the provisions of Section 12.2, nothing contained in this Indenture or in any of
the Notes shall prevent any consolidation or merger of the Company with or into
any other corporation or corporations (whether or not affiliated with the
Company), or shall prevent any successive consolidations or mergers in which the
Company or its successor or successors shall be a party or parties, or shall
prevent any sale, conveyance or lease (or successive sales, conveyances or
leases) of all or substantially all of the property of the Company to any other
corporation (whether or not affiliated with the Company) authorized to acquire
and operate the same and organized under the laws of the United States of
America, any state thereof or the District of Columbia; PROVIDED that upon any
such consolidation, merger, sale, conveyance or lease, the due and punctual
payment of the principal of and premium, if any, and interest on all of the
Notes, according to their tenor, and the due and punctual performance and
observance of all of the covenants and conditions of this Indenture to be
performed by the Company, shall be expressly assumed, by supplemental indenture
satisfactory in form to the Trustee, executed and delivered to the Trustee by
the corporation (if other than the Company) formed by such consolidation, or by
the corporation into which the Company shall have been merged, or by the
corporation which shall have acquired or leased such property, and such
supplemental indenture shall provide for the applicable conversion rights set
forth in Section 15.6.
Section 12.2 SUCCESSOR CORPORATION TO BE SUBSTITUTED. In case of any
such consolidation, merger, sale, conveyance or lease and upon the assumption by
the successor corporation, by supplemental indenture executed and delivered to
the Trustee and satisfactory in form to the Trustee, of the due and punctual
payment of the principal of and premium, if any, and interest on all of the
Notes and the due and punctual performance of all of the covenants and
conditions of this Indenture to be performed by the Company, such successor
corporation shall succeed to and be substituted for the Company with the same
effect as if it had been named herein as the party of the first part.
-72-
<PAGE>
Such successor corporation thereupon may cause to be signed, and may issue
either in its own name or in the name of Sunglass Hut International, Inc., any
or all of the Notes issuable hereunder which theretofore shall not have been
signed by the Company and delivered to the Trustee. Upon the order of such
successor corporation instead of the Company and subject to all the terms,
conditions and limitations in this Indenture prescribed, the Trustee shall
authenticate and shall deliver, or cause to be authenticated and delivered, any
Notes which previously shall have been signed and delivered by the officers of
the Company to the Trustee for authentication, and any Notes which such
successor corporation thereafter shall cause to be signed and delivered to the
Trustee for that purpose. All the Notes so issued shall in all respects have the
same legal rank and benefit under this Indenture as the Notes theretofore or
thereafter issued in accordance with the terms of this Indenture as though all
of such Notes had been issued at the date of the execution hereof. In the event
of any such consolidation, merger, sale, conveyance or lease, Sunglass Hut
International, Inc. or any successor which shall thereafter have become such in
the manner prescribed in this Article XII may be dissolved, wound up and
liquidated at any time thereafter and such Person shall be released from its
liabilities as obligor and maker of the Notes and from its obligations under
this Indenture.
In case of any such consolidation, merger, sale, conveyance or lease,
such changes in phraseology and form (but not in substance) may be made in the
Notes thereafter to be issued as may be appropriate.
Section 12.3 OPINION OF COUNSEL TO BE GIVEN TRUSTEE. The Trustee,
subject to Sections 8.1 and 8.2, shall receive an Officers' Certificate and an
Opinion of Counsel as conclusive evidence that any such consolidation, merger,
sale, conveyance or lease and any such assumption complies with the provisions
of this Article XII.
ARTICLE XIII
SATISFACTION AND DISCHARGE OF INDENTURE
Section 13.1 DISCHARGE OF INDENTURE. When (a) the Company shall deliver
to the Trustee for cancellation all Notes theretofore authenticated (other than
any Notes which have been destroyed, lost or stolen and in lieu of or in
substitution for which other Notes shall have been authenticated and delivered)
and not theretofore canceled, or (b) all the Notes not theretofore canceled or
delivered to the Trustee for cancellation shall have become due and payable, or
are by their terms to become due and payable within one year or are to be called
for redemption within one year under arrangements satisfactory to the Trustee
for the giving of notice of redemption, and the Company shall deposit with the
Trustee, in trust, funds sufficient to pay at maturity or upon redemption of all
of the Notes (other than any Notes which shall have been mutilated, destroyed,
lost or stolen and in
-73-
<PAGE>
lieu of or in substitution for which other Notes shall have been authenticated
and delivered) not theretofore canceled or delivered to the Trustee for
cancellation, including principal and premium, if any, and interest due or to
become due to such date of maturity or redemption date, as the case may be, and
if in either case the Company shall also pay or cause to be paid all other sums
payable hereunder by the Company, then this Indenture shall cease to be of
further effect (except as to (i) remaining rights of registration of transfer,
substitution and exchange and conversion of Notes, (ii) rights hereunder of
Noteholders to receive payments of principal of, and premium, if any, and
interest on the Notes and the other rights, duties and obligations of
Noteholders as beneficiaries hereof with respect to the amounts, if any, so
deposited with the Trustee and (iii) the rights, obligations and immunities of
the Trustee hereunder), and the Trustee, on demand of the Company accompanied by
an Officers' Certificate and an Opinion of Counsel as required by Section 16.5
and at the cost and expense of the Company, shall execute proper instruments
acknowledging satisfaction of and discharging this Indenture. The Company,
however, hereby agrees to reimburse the Trustee for any costs or expenses
thereafter reasonably and properly incurred by the Trustee and to compensate the
Trustee for any services thereafter reasonably and properly rendered by the
Trustee in connection with this Indenture or the Notes.
Section 13.2 DEPOSITED MONIES TO BE HELD IN TRUST BY TRUSTEE. Subject to
Section 13.4, all monies deposited with the Trustee pursuant to Section 13.1 and
not in violation of Article IV shall be held in trust for the sole benefit of
the Noteholders and shall not be subject to the subordination provisions of
Article IV, and such monies shall be applied by the Trustee to the payment,
either directly or through any paying agent (including the Company if acting as
its own paying agent), to the holders of the particular Notes for the payment or
redemption of which such monies have been deposited with the Trustee, of all
sums due and to become due thereon for principal and interest and premium, if
any.
Section 13.3 PAYING AGENT TO REPAY MONIES HELD. Upon the satisfaction
and discharge of this Indenture, all monies then held by any paying agent of the
Notes (other than the Trustee) shall, upon written request of the Company, be
repaid to it or paid to the Trustee, and thereupon such paying agent shall be
released from all further liability with respect to such monies.
Section 13.4 RETURN OF UNCLAIMED MONIES. Subject to the requirements of
applicable law, any monies deposited with or paid to the Trustee for payment of
the principal of, premium, if any, or interest on Notes and not applied but
remaining unclaimed by the holders of Notes for two years after the date upon
which the principal of, premium, if any, or interest on such Notes, as the case
may be, shall have become due and payable, shall be repaid to the Company by the
Trustee on written demand and all liability of the Trustee shall thereupon cease
with respect to such monies. The holder of
-74-
<PAGE>
any of the Notes shall thereafter look only to the Company for any payment which
such holder may be entitled to collect unless an applicable abandoned property
law designates another Person.
Section 13.5 REINSTATEMENT. If the Trustee or the paying agent is unable
to apply any money in accordance with Section 13.2 by reason of any order or
judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, the Company's obligations under this
Indenture and the Notes shall be revived and reinstated as though no deposit had
occurred pursuant to Section 13.1 until such time as the Trustee or the paying
agent is permitted to apply all such money in accordance with Section 13.2;
PROVIDED, HOWEVER, that if the Company makes any payment of interest on or
principal of any Note following the reinstatement of its obligations, the
Company shall be subrogated to the rights of the holders of such Notes to
receive such payment from the money held by the Trustee or paying agent.
ARTICLE XIV
IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
OFFICERS AND DIRECTORS
Section 14.1 INDENTURE AND NOTES SOLELY CORPORATE OBLIGATIONS. No
recourse for the payment of the principal of, or premium, if any, or interest
on, any Note, or for any claim based thereon or otherwise in respect thereof,
and no recourse under or upon any obligation, covenant or agreement of the
Company in this Indenture or in any supplemental indenture or in any Note, or
because of the creation of any indebtedness represented thereby, shall be had
against any incorporator, stockholder, employee, agent, officer, director or
subsidiary, as such, past, present or future, of the Company or of any successor
corporation, either directly or through the Company or any successor
corporation, whether by virtue of any constitution, statute or rule of law or by
the enforcement of any assessment or penalty or otherwise; it being expressly
understood that all such liability is hereby expressly waived and released as a
condition of, and as a consideration for, the execution of this Indenture and
the issue of the Notes.
ARTICLE XV
CONVERSION OF NOTES
Section 15.1 RIGHT TO CONVERT. Subject to and upon compliance with the
provisions of this Indenture, the holder of any Note shall have the right, at
his option, at any time after ninety (90) days following the date of original
issuance of the Notes and prior to the close of business on June 15, 2003
(except that, with respect to any Note or
-75-
<PAGE>
portion of a Note which shall be called for redemption, such right shall
terminate, except as provided in Section 15.2 or Section 3.4, at the close of
business on the Business Day next preceding the date fixed for redemption of
such Note or portion of a Note unless the Company shall default in payment due
upon redemption thereof) to convert the principal amount of any such Note, or
any portion of such principal amount which is $1,000 or an integral multiple
thereof, into that number of fully paid and non-assessable shares of Common
Stock (as such shares shall then be constituted) obtained by dividing the
principal amount of the Note or portion thereof surrendered for conversion by
the Conversion Price in effect at such time, by surrender of the Note so to be
converted in whole or in part in the manner provided, together with any required
funds, in Section 15.2. A holder of Notes is not entitled to any rights of a
holder of Common Stock until such holder has converted his Notes to Common
Stock, and only to the extent such Notes are deemed to have been converted to
Common Stock under this Article XV.
Section 15.2 EXERCISE OF CONVERSION PRIVILEGE; ISSUANCE OF COMMON STOCK
ON CONVERSION; NO ADJUSTMENT FOR INTEREST OR DIVIDENDS. In order to exercise the
conversion privilege with respect to any Note in certificated form, the holder
of any such Note to be converted in whole or in part shall surrender such Note,
duly endorsed, at an office or agency maintained by the Company pursuant to
Section 5.2, accompanied by the funds, if any, required by the penultimate
paragraph of this Section 15.2, and shall give written notice of conversion in
the form provided on the Notes (or such other notice which is acceptable to the
Company) to the office or agency that the holder elects to convert such Note or
the portion thereof specified in said notice. Such notice shall also state the
name or names (with address or addresses) in which the certificate or
certificates for shares of Common Stock which shall be issuable on such
conversion shall be issued and shall be accompanied by any transfer taxes
required pursuant to Section 15.7. Each such Note surrendered for conversion
shall, unless the shares issuable on conversion are to be issued in the same
name as the registration of such Note, be duly endorsed by, or be accompanied by
instruments of transfer in form satisfactory to the Company duly executed by,
the holder or his duly authorized attorney.
In order to exercise the conversion privilege with respect to any
interest in a Note in global form, the beneficial holder must complete the
appropriate instruction form for conversion pursuant to the Depositary's
book-entry conversion program, deliver by book- entry delivery an interest in
such Note in global form, furnish appropriate endorsements and transfer
documents if required by the Company or the Trustee or conversion agent, and pay
the funds, if any, required by this Section 15.2 and any transfer taxes required
pursuant to Section 15.7.
As promptly as practicable after satisfaction of the requirements for
conversion set forth above, subject to compliance with any restrictions on
transfer if shares issuable on conversion are to be issued in a name other than
that of the Noteholder (as if such transfer
-76-
<PAGE>
were a transfer of the Note or Notes (or portion thereof) so converted), the
Company shall issue and shall deliver to such holder, at the office or agency
maintained by the Company for such purpose pursuant to Section 5.2, a
certificate or certificates for the number of full shares of Common Stock
issuable upon the conversion of such Note or portion thereof in accordance with
the provisions of this Article and a check or cash in respect of any fractional
interest in respect of a share of Common Stock arising upon such conversion, as
provided in Section 15.3. In case any Note of a denomination greater than $1,000
shall be surrendered for partial conversion, and subject to Section 2.3, the
Company shall execute and the Trustee shall authenticate and deliver to the
holder of the Note so surrendered, without charge to him, a new Note or Notes in
authorized denominations in an aggregate principal amount equal to the
unconverted portion of the surrendered Note.
Each conversion shall be deemed to have been effected as to any such
Note (or portion thereof) on the date on which the requirements set forth above
in this Section 15.2 have been satisfied as to such Note (or portion thereof),
and the Person in whose name any certificate or certificates for shares of
Common Stock shall be issuable upon such conversion shall be deemed to have
become on said date the holder of record of the shares represented thereby;
PROVIDED, HOWEVER, that any such surrender on any date when the stock transfer
books of the Company shall be closed shall constitute the Person in whose name
the certificates are to be issued as the record holder thereof for all purposes
on the next succeeding day on which such stock transfer books are open, but such
conversion shall be at the Conversion Price in effect on the date upon which
such Note shall be surrendered.
Any Note or portion thereof surrendered for conversion during the period
from the close of business on the record date for any interest payment date to
the close of business on the Business Day next preceding the following interest
payment date (unless such Note or portion thereof being converted shall have
been called for redemption during the period from the close of business on such
record date to the close of business on the Business Day next preceding the
following interest payment date) shall be accompanied by payment, in New York
Clearing House funds or other funds acceptable to the Company, of an amount
equal to the interest otherwise payable on such interest payment date on the
principal amount being converted; PROVIDED, however, that no such payment need
be made if the Company exercises its right to redeem such Notes on a redemption
date that is an interest payment date. Except as provided above in this Section
15.2, no adjustment shall be made for interest accrued on any Note converted or
for dividends on any shares issued upon the conversion of such Note as provided
in this Article.
Upon the conversion of an interest in a Note in global form, the
Trustee, or the Custodian at the direction of the Trustee, shall make a notation
on such Note in global form as to the reduction in the principal amount
represented thereby.
-77-
<PAGE>
Section 15.3 CASH PAYMENTS IN LIEU OF FRACTIONAL SHARES. No fractional
shares of Common Stock or scrip representing fractional shares shall be issued
upon conversion of Notes. If more than one Note shall be surrendered for
conversion at one time by the same holder, the number of full shares which shall
be issuable upon conversion shall be computed on the basis of the aggregate
principal amount of the Notes (or specified portions thereof to the extent
permitted hereby) so surrendered. If any fractional share of stock would be
issuable upon the conversion of any Note or Notes, the Company shall make an
adjustment and payment therefor in cash at the current market value thereof to
the holder of Notes. The current market value of a share of Common Stock shall
be the Closing Price on the first Business Day immediately preceding the day on
which the Notes (or specified portions thereof) are deemed to have been
converted.
Section 15.4 CONVERSION PRICE. The conversion price shall be as
specified in the form of Note (herein called the "Conversion Price") attached as
Exhibit A hereto, subject to adjustment as provided in this Article XV.
Section 15.5 ADJUSTMENT OF CONVERSION PRICE. The Conversion Price shall
be adjusted from time to time by the Company as follows:
(a) In case the Company shall hereafter pay a dividend or make a
distribution to all holders of the outstanding Common Stock in shares of
Common Stock, the Conversion Price in effect at the opening of business
on the date following the date fixed for the determination of
stockholders entitled to receive such dividend or other distribution
shall be reduced by multiplying such Conversion Price by a fraction of
which the numerator shall be the number of shares of Common Stock
outstanding at the close of business on the date fixed for such
determination and the denominator shall be the sum of such number of
shares and the total number of shares constituting such dividend or
other distribution, such reduction to become effective immediately after
the opening of business on the day following the date fixed for such
determination. The Company will not pay any dividend or make any
distribution on shares of Common Stock held in the treasury of the
Company. If any dividend or distribution of the type described in this
Section 15.5(a) is declared but not so paid or made, the Conversion
Price shall again be adjusted to the Conversion Price which would then
be in effect if such dividend or distribution had not been declared.
(b) In case the Company shall issue rights or warrants to all
holders of its outstanding shares of Common Stock entitling them (for a
period expiring within 45 days after the date fixed for determination of
stockholders entitled to receive such rights or warrants) to subscribe
for or purchase shares of Common Stock at a price per share less than
the Current Market Price (as defined below) on the date fixed for
determination of stockholders entitled to receive such rights or
-78-
<PAGE>
warrants, the Conversion Price shall be adjusted so that the same shall
equal the price determined by multiplying the Conversion Price in effect
immediately prior to the date fixed for determination of stockholders
entitled to receive such rights or warrants by a fraction, of which the
numerator shall be the number of shares of Common Stock outstanding at
the close of business on the date fixed for determination of
stockholders entitled to receive such rights and warrants plus the
number of shares which the aggregate offering price of the total number
of shares so offered would purchase at such Current Market Price, and of
which the denominator shall be the number of shares of Common Stock
outstanding on the date fixed for determination of stockholders entitled
to receive such rights and warrants plus the total number of additional
shares of Common Stock offered for subscription or purchase. Such
adjustment shall be successively made whenever any such rights and
warrants are issued, and shall become effective immediately after the
opening of business on the day following the date fixed for
determination of stockholders entitled to receive such rights or
warrants. To the extent that shares of Common Stock are not delivered
after the expiration of such rights or warrants, the Conversion Price
shall be readjusted to the Conversion Price which would then be in
effect had the adjustments made upon the issuance of such rights or
warrants been made on the basis of delivery of only the number of shares
of Common Stock actually delivered. In the event that such rights or
warrants are not so issued, the Conversion Price shall again be adjusted
to be the Conversion Price which would then be in effect if such date
fixed for the determination of stockholders entitled to receive such
rights or warrants had not been fixed. In determining whether any rights
or warrants entitle the holders to subscribe for or purchase shares of
Common Stock at less than such Current Market Price, and in determining
the aggregate offering price of such shares of Common Stock, there shall
be taken into account any consideration received by the Company for such
rights or warrants, the value of such consideration, if other than cash,
to be determined by the Board of Directors.
(c) In case outstanding shares of Common Stock shall be
subdivided into a greater number of shares of Common Stock, the
Conversion Price in effect at the opening of business on the day
following the day upon which such subdivision becomes effective shall be
proportionately reduced, and conversely, in case outstanding shares of
Common Stock shall be combined into a smaller number of shares of Common
Stock, the Conversion Price in effect at the opening of business on the
day following the day upon which such combination becomes effective
shall be proportionately increased, such reduction or increase, as the
case may be, to become effective immediately after the opening of
business on the day following the day upon which such subdivision or
combination becomes effective.
-79-
<PAGE>
(d) In case the Company shall, by dividend or otherwise,
distribute to all holders of its Common Stock shares of any class of
capital stock of the Company (other than any dividends or distributions
to which Section 15.5(a) applies) or evidences of its indebtedness or
assets (including securities, but excluding any rights or warrants
referred to in Section 15.5(b), and excluding any dividend or
distribution (x) paid exclusively in cash or (y) referred to in Section
15.5(a) (any of the foregoing hereinafter in this Section 15.5(d) called
the "Securities")), then, in each such case (unless the Company elects
to reserve such Securities for distribution to the Noteholders upon the
conversion of the Notes so that any such holder converting Notes will
receive upon such conversion, in addition to the shares of Common Stock
to which such holder is entitled, the amount and kind of such Securities
which such holder would have received if such holder had converted its
Notes into Common Stock immediately prior to the Record Date (as defined
in Section 15.5(i) for such distribution of the Securities)), the
Conversion Price shall be reduced so that the same shall be equal to the
price determined by multiplying the Conversion Price in effect on the
Record Date with respect to such distribution by a fraction of which the
numerator shall be the Current Market Price per share of the Common
Stock on such Record Date less the fair market value (as determined by
the Board of Directors, whose determination shall be conclusive, and
described in a resolution of the Board of Directors) on the Record Date
of the portion of the Securities so distributed applicable to one share
of Common Stock and the denominator shall be the Current Market Price
per share of the Common Stock, such reduction to become effective
immediately prior to the opening of business on the day following such
Record Date; PROVIDED, HOWEVER, that in the event the then fair market
value (as so determined) of the portion of the Securities so distributed
applicable to one share of Common Stock is equal to or greater than the
Current Market Price of the Common Stock on the Record Date, in lieu of
the foregoing adjustment, adequate provision shall be made so that each
Noteholder shall have the right to receive upon conversion the amount of
Securities such holder would have received had such holder converted
each Note on the Record Date. In the event that such dividend or
distribution is not so paid or made, the Conversion Price shall again be
adjusted to be the Conversion Price which would then be in effect if
such dividend or distribution had not been declared. If the Board of
Directors determines the fair market value of any distribution for
purposes of this Section 15.5(d) by reference to the actual or when
issued trading market for any securities, it must in doing so consider
the prices in such market over the same period used in computing the
Current Market Price of the Common Stock.
Rights or warrants distributed by the Company to all holders of
Common Stock entitling the holders thereof to subscribe for or purchase
shares of the
-80-
<PAGE>
Company's capital stock (either initially or under certain
circumstances), which rights or warrants, until the occurrence of a
specified event or events ("Trigger Event"), (i) are deemed to be
transferred with such shares of Common Stock, (ii) are not exercisable,
and (iii) are also issued in respect of future issuances of Common
Stock, shall be deemed not to have been distributed for purposes of this
Section 15.5 (and no adjustment to the Conversion Price under this
Section 15.5 will be required) until the occurrence of the earliest
Trigger Event, whereupon such rights and warrants shall be deemed to
have been distributed and an appropriate adjustment (if any is required)
to the Conversion Price shall be made under this Section 15.5(d). If any
such right or warrant, including any such existing rights or warrants
distributed prior to the date of this Indenture, are subject to events
upon the occurrence of which such rights or warrants become exercisable
to purchase different securities, evidences of indebtedness or other
assets, then the date of the occurrence of any and each such event shall
be deemed to be the date of distribution and record date with respect to
new rights or warrants with such rights (and a termination or expiration
of the existing rights or warrants without exercise by any of the
holders thereof). In addition, in the event of any distribution (or
deemed distribution) of rights or warrants, or any Trigger Event or
other event (of the type described in the preceding sentence) with
respect thereto that was counted for purposes of calculating a
distribution amount for which an adjustment to the Conversion Price
under this Section 15.5 was made, (1) in the case of any such rights or
warrants which shall all have been redeemed or repurchased without
exercise by any holders thereof, the Conversion Price shall be
readjusted upon such final redemption or repurchase to give effect to
such distribution or Trigger Event, as the case may be, as though it
were a cash distribution, equal to the per share redemption or
repurchase price received by a holder or holders of Common Stock with
respect to such rights or warrants (assuming such holder had retained
such rights or warrants), made to all holders of Common Stock as of the
date of such redemption or repurchase, and (2) in the case of such
rights or warrants which shall have expired or been terminated without
exercise by any holders thereof, the Conversion Price shall be
readjusted as if such rights and warrants had not been issued.
For purposes of this Section 15.5(d) and Sections 15.5(a) and
(b), any dividend or distribution to which this Section 15.5(d) is
applicable that also includes shares of Common Stock, or rights or
warrants to subscribe for or purchase shares of Common Stock (or both),
shall be deemed instead to be (1) a dividend or distribution of the
evidences of indebtedness, assets or shares of capital stock other than
such shares of Common Stock or rights or warrants (and any Conversion
Price reduction required by this Section 15.5(d) with respect to such
dividend or distribution shall then be made) immediately followed by (2)
a
-81-
<PAGE>
dividend or distribution of such shares of Common Stock or such rights
or warrants (and any further Conversion Price reduction required by
Sections 15.5(a) and (b) with respect to such dividend or distribution
shall then be made), except (A) the Record Date of such dividend or
distribution shall be substituted as "the date fixed for the
determination of stockholders entitled to receive such dividend or other
distribution" and "the date fixed for such determination" within the
meaning of Sections 15.5(a) and (b) and (B) any shares of Common Stock
included in such dividend or distribution shall not be deemed
"outstanding at the close of business on the date fixed for such
determination" within the meaning of Section 15.5(a).
(e) In case the Company shall, by dividend or otherwise,
distribute to all holders of its Common Stock cash (excluding (x) any
quarterly cash dividend on the Common Stock to the extent the aggregate
cash dividend per share of Common Stock in any fiscal quarter does not
exceed the greater of (A) the amount per share of Common Stock of the
next preceding quarterly cash dividend on the Common Stock to the extent
that such preceding quarterly dividend did not require any adjustment of
the Conversion Price pursuant to this Section 15.5(e) (as adjusted to
reflect subdivisions or combinations of the Common Stock), and (B) 3.75%
of the arithmetic average of the Closing Price (determined as set forth
in Section 15.5(i)) during the ten Trading Days (as defined in Section
15.5(i)) immediately prior to the date of declaration of such dividend,
and (y) any dividend or distribution in connection with the liquidation,
dissolution or winding up of the Company, whether voluntary or
involuntary), then, in such case, the Conversion Price shall be reduced
so that the same shall equal the price determined by multiplying the
Conversion Price in effect immediately prior to the close of business on
such Record Date by a fraction of which the numerator shall be the
Current Market Price of the Common Stock on the Record Date less the
amount of cash so distributed (and not excluded as provided above)
applicable to one share of Common Stock and the denominator shall be
such Current Market Price of the Common Stock, such reduction to be
effective immediately prior to the opening of business on the day
following the Record Date; PROVIDED, HOWEVER, that in the event the
portion of the cash so distributed applicable to one share of Common
Stock is equal to or greater than the Current Market Price of the Common
Stock on the Record Date, in lieu of the foregoing adjustment, adequate
provision shall be made so that each Noteholder shall have the right to
receive upon conversion the amount of cash such holder would have
received had such holder converted each Note on the Record Date. In the
event that such dividend or distribution is not so paid or made, the
Conversion Price shall again be adjusted to be the Conversion Price
which would then be in effect if such dividend or distribution had not
been declared. If any adjustment is required to be made as set forth in
this Section
-82-
<PAGE>
15.5(e) as a result of a distribution that is a quarterly dividend, such
adjustment shall be based upon the amount by which such distribution
exceeds the amount of the quarterly cash dividend permitted to be
excluded pursuant hereto. If an adjustment is required to be made as set
forth in this Section 15.5(e) above as a result of a distribution that
is not a quarterly dividend, such adjustment shall be based upon the
full amount of the distribution.
(f) In case a tender or exchange offer made by the Company or any
subsidiary of the Company for all or any portion of the Common Stock
shall expire and such tender or exchange offer (as amended upon the
expiration thereof) shall require the payment to stockholders of
consideration per share of Common Stock having a fair market value (as
determined by the Board of Directors, whose determination shall be
conclusive and described in a resolution of the Board of Directors) as
of the last time (the "Expiration Time") tenders or exchanges may be
made pursuant to such tender or exchange offer (as it may be amended)
that exceeds the Current Market Price of the Common Stock on the Trading
Day next succeeding the Expiration Time, the Conversion Price shall be
reduced so that the same shall equal the price determined by multiplying
the Conversion Price in effect immediately prior to the Expiration Time
by a fraction of which the numerator shall be the number of shares of
Common Stock outstanding (including any tendered or exchanged shares) on
the Expiration Time multiplied by the Current Market Price of the Common
Stock on the Trading Day next succeeding the Expiration Time and the
denominator shall be the sum of (x) the fair market value (determined as
aforesaid) of the aggregate consideration payable to shareholders based
on the acceptance (up to any maximum specified in the terms of the
tender or exchange offer) of all shares validly tendered or exchanged
and not withdrawn as of the Expiration Time (the shares deemed so
accepted, up to any such maximum, being referred to as the "Purchased
Shares") and (y) the product of the number of shares of Common Stock
outstanding (less any Purchased Shares) on the Expiration Tune and the
Current Market Price of the Common Stock on the Trading Day next
succeeding the Expiration Time, such reduction to become effective
immediately prior to the opening of business on the day following the
Expiration Time. In the event that the Company is obligated to purchase
shares pursuant to any such tender or exchange offer, but the Company is
permanently prevented by applicable law from effecting any such
purchases or all such purchases are rescinded, the Conversion Price
shall again be adjusted to be the Conversion Price which would then be
in effect if such tender or exchange offer had not been made.
(g) In case of a tender or exchange offer made by a Person other
than the Company or any Subsidiary for an amount which increases the
offeror's ownership of Common Stock to more than 25% of the Common Stock
outstanding and which
-83-
<PAGE>
shall involve the payment by such Person of consideration per share of
Common Stock having a fair market value (as determined by the Board of
Directors, whose determination shall be conclusive, and described in a
resolution of the Board of Directors) at the last time (the "Expiration
Time") tenders or exchanges may be made pursuant to such tender or
exchange offer (as it shall have been amended) that exceeds the Current
Market Price of the Common Stock on the Trading Day next succeeding the
Expiration Time, and in which, as of the Expiration Time, the Board of
Directors is not recommending rejection of the offer, the Conversion
Price shall be reduced so that the same shall equal the price determined
by multiplying the Conversion Price in effect immediately prior to the
Expiration Time by a fraction of which the numerator shall be the number
of shares of Common Stock outstanding (including any tendered or
exchanged shares) at the Expiration Time multiplied by the Current
Market Price of the Common Stock on the Trading Day next succeeding the
Expiration Time and the denominator shall be the sum of (x) the fair
market value (determined as aforesaid) of the aggregate consideration
payable to stockholders based on the acceptance (up to any maximum
specified in the terms of the tender or exchange offer) of all shares
validly tendered or exchanged and not withdrawn as of the Expiration
Time (the shares deemed so accepted, up to any such maximum, being
referred to as the "Purchased Shares") and (y) the product of the number
of shares of Common Stock outstanding (less any Purchased Shares) on the
Expiration Time and the Current Market Price of the Common Stock on the
Trading Day next succeeding the Expiration Time, such reduction to
become effective immediately prior to the opening of business on the day
following the Expiration Time. In the event that such Person is
obligated to purchase shares pursuant to any such tender or exchange
offer, but such Person is permanently prevented by applicable law from
effecting any such purchases or all such purchases are rescinded, the
Conversion Price shall again be adjusted to be the Conversion Price
which would then be in effect if such tender or exchange offer had not
been made. Notwithstanding the foregoing, the adjustment described in
this Section 15.5(g) shall not be made if, as of the Expiration Time,
the offering documents with respect to such offer disclose a plan or
intention to cause the Company to engage in any transaction described in
Article XII.
(h) In case the Company shall issue (i) shares of Common Stock at
a price per share that is less than the then Current Market Price of the
Common Stock or (ii) securities convertible into or exchangeable for
Common Stock having a conversion or exchange price per share that is
less than the Current Market Price of the Common Stock on the date of
issuance of such securities, then in either such case, the Conversion
Price shall be adjusted so that the same shall equal the price
-84-
<PAGE>
determined by multiplying the Conversion Price in effect immediately
prior to the date of issuance of such shares or securities by a
fraction, of which the numerator shall be the number of shares of Common
Stock outstanding at the close of business on the date of issuance of
such shares or securities plus the number of shares of Common Stock
which the aggregate offering price of the total number of shares of
Common Stock so offered would purchase at such Current Market Price, and
of which the denominator shall be the number of shares of Common Stock
outstanding on the date of issuance of such shares or securities plus
the total number of additional shares of Common Stock so offered. Such
adjustment shall be successively made whenever any such shares or
securities are issued, and shall become effective immediately after the
opening of business on the day following the date of issuance of such
shares or securities. To the extent that shares of Common Stock offered
pursuant to the foregoing are not delivered after the expiration of such
offer, the Conversion Price shall be readjusted to the Conversion Price
which would then be in effect had the adjustments made upon the issuance
of such shares or such securities been made on the basis of delivery of
only the number of shares of Common Stock actually delivered. In the
event that such shares or such securities are not so issued, the
Conversion Price shall again be adjusted to be the Conversion Price
which would then be in effect if the date of issuance of such shares or
securities had not been fixed. In determining whether any securities are
exchangeable into or convertible for shares of Common Stock at less than
such Current Market Price, and in determining the aggregate offering
price of such shares of Common Stock, there shall be taken into account
any consideration received by the Company for such shares or such
securities, the value of such consideration, if other than cash, to be
determined by the Board of Directors.
Notwithstanding the foregoing, the provisions of this clause (h)
shall not apply to any issuance of Common Stock or securities
convertible into or exchangeable for Common Stock for the following
reasons:
(1) pursuant to any bona fide plan for the benefit of
employees, directors or consultants of the Company now or
hereafter in effect;
(2) to acquire all or any portion of a business in an
arm's-length transaction between the Company and an unaffiliated
third party including, if applicable, issuances upon exercise of
options or warrants assumed in connection with such a
transaction;
-85-
<PAGE>
(3) in a bona fide public offering pursuant to a firm
commitment underwriting or sales at the market pursuant to a
continuous offering stock program;
(4) pursuant to the exercise of warrants, rights
(including, without limitation, earnout rights) or options, or
upon the conversion of convertible securities, which are issued
and outstanding on the date hereof, or which may be issued in the
future for fair market value and with an exercise price or
conversion price at least equal to the Current Market Price of
the Common Stock at the time of issuance of such warrant, right,
option or convertible security; and
(5) pursuant to a dividend reinvestment plan or other plan
now or hereafter in effect for the reinvestment of dividends or
interest provided that such Common Stock is issued at a price at
least equal to 95% of the Current Market Price of the Common
Stock at the time of such issuance.
(i) For purposes of this Section 15.5, the following terms shall
have the meaning indicated:
(1) "Closing Price" with respect to any securities on any
day shall mean the closing sale price, regular way, on such day
or, in case no such sale takes place on such day, the average of
the reported closing bid and asked prices, regular way, in each
case on the New York Stock Exchange, or, if such security is not
listed or admitted to trading on such exchange, on the principal
national security exchange or quotation system on which such
security is quoted or listed or admitted to trading, or, if not
quoted or listed or admitted to trading on any national
securities exchange or quotation system, the average of the
closing bid and asked prices of such security on the
over-the-counter market on the day in question as reported by the
National Quotation Bureau Incorporated, or a similar generally
accepted reporting service, or if not so available, in such
manner as furnished by any New York Stock Exchange member firm
selected from time to time by the Board of Directors for that
purpose, or a price determined in good faith by the Board of
Directors or, to the extent permitted by applicable law, a duly
authorized committee thereof, whose determination shall be
conclusive.
(2) "Current Market Price" shall mean the average of the
daily Closing Prices per share of Common Stock for the ten
consecutive Trading Days immediately prior to the date in
question; PROVIDED, HOWEVER, that (i) if the "ex" date (as
hereinafter defined) for any event (other than the issuance or
distribution or Fundamental Change requiring such
-86-
<PAGE>
computation) that requires an adjustment to the Conversion Price
pursuant to Section 15.5(a) through (h) occurs during such ten
consecutive Trading Days, the Closing Price for each Trading Day
prior to the "ex" date for such other event shall be adjusted by
multiplying such Closing Price by the same fraction by which the
Conversion Price is so required to be adjusted as a result of
such other event, (ii) if the "ex" date for any event (other than
the issuance, distribution or Fundamental Change requiring such
computation) that requires an adjustment to the Conversion Price
pursuant to Section 15.5(a) through (h) occurs on or after the
"ex" date for the issuance or distribution requiring such
computation and prior to the day in question, the Closing Price
for each Trading Day on and after the "ex" date for such other
event shall be adjusted by multiplying such Closing Price by the
reciprocal of the fraction by which the Conversion Price is so
required to be adjusted as a result of such other event, and
(iii) if the "ex" date for the issuance, distribution or
Fundamental Change requiring such computation is prior to the day
in question, after taking into account any adjustment required
pursuant to clause (i) or (ii) of this proviso, the Closing Price
for each Trading Day on or after such "ex" date shall be adjusted
by adding thereto the amount of any cash and the fair market
value (as determined by the Board of Directors or, to the extent
permitted by applicable law, a duly authorized committee thereof
in a manner consistent with any determination of such value for
purposes of Section 15.5(d), (f) or (g), whose determination
shall be conclusive and described in a resolution of the Board of
Directors or such duly authorized committee thereof, as the case
may be) of the evidences of indebtedness, shares of capital stock
or assets being distributed applicable to one share of Common
Stock as of the close of business on the day before such "ex"
date. For purposes of any computation under Section 15.5(f) or
(g), the Current Market Price of the Common Stock on any date
shall be deemed to be the average of the daily Closing Prices per
share of Common Stock for such day and the next two succeeding
Trading Days; PROVIDED, HOWEVER, that if the "ex" date for any
event (other than the tender or exchange offer requiring such
computation) that requires an adjustment to the Conversion Price
pursuant to Section 15.5(a) through (h) occurs on or after the
Expiration Time for the tender or exchange offer requiring such
computation and prior to the day in question, the Closing Price
for each Trading Day on and after the "ex" date for such other
event shall be adjusted by multiplying such Closing Price by the
reciprocal of the fraction by which the Conversion Price is so
required to be adjusted as a result of such other event. For
purposes of this paragraph, the term "ex" date (x) when used with
respect to any issuance or distribution, means the first date on
which the Common Stock trades regular way on the
-87-
<PAGE>
relevant exchange or in the relevant market from which the
Closing Price was obtained without the right to receive such
issuance or distribution, (y) when used with respect to any
subdivision or combination of shares of Common Stock, means the
first date on which the Common Stock trades regular way on such
exchange or in such market after the time at which such
subdivision or combination becomes effective, and (z) when used
with respect to any tender or exchange offer, means the first
date on which the Common Stock trades regular way on such
exchange or in such market after the Expiration Time of such
offer.
(3) "fair market value" shall mean the amount which a
willing buyer would pay a willing seller in an arm's length
transaction.
(4) "Record Date" shall mean, with respect to any
dividend, distribution or other transaction or event in which the
holders of Common Stock have the right to receive any cash,
securities or other property or in which the Common Stock (or
other applicable security) is exchanged for or converted into any
combination of cash, securities or other property, the date fixed
for determination of shareholders entitled to receive such cash,
securities or other property (whether such date is fixed by the
Board of Directors or by statute, contract or otherwise).
(5) "Trading Day" shall mean (x) if the applicable
security is listed or admitted for trading on the New York Stock
Exchange or another national security exchange, a day on which
the New York Stock Exchange or another national security exchange
is open for business or (y) if the applicable security is quoted
on the Nasdaq National Market, a day on which trades may be made
thereon or (z) if the applicable security is not so listed,
admitted for trading or quoted, any day other than a Saturday or
Sunday or a day on which banking institutions in the State of New
York are authorized or obligated by law or executive order to
close.
(j) The Company may make such reductions in the Conversion Price,
in addition to those required by Sections 15.5(a) through (h), as the
Board of Directors considers to be advisable to avoid or diminish any
income tax to holders of Common Stock or rights to purchase Common Stock
resulting from any dividend or distribution of stock (or rights to
acquire stock) or from any event treated as such for income tax
purposes.
To the extent permitted by applicable law, the Company from time
to time may reduce the Conversion Price by any amount for any period of
time if the period is at least twenty (20) days, the reduction is
irrevocable during the period
-88-
<PAGE>
and the Board of Directors shall have made a determination that such
reduction would be in the best interests of the Company, which
determination shall be conclusive. Whenever the Conversion Price is
reduced pursuant to the preceding sentence, the Company shall mail to
holders of record of the Notes a notice of the reduction at least
fifteen (15) days prior to the date the reduced Conversion Price takes
effect, and such notice shall state the reduced Conversion Price and the
period during which it will be in effect.
(k) No adjustment in the Conversion Price shall be required
unless such adjustment would require an increase or decrease of at least
1% in such price; PROVIDED, however, that any adjustments which by
reason of this Section 15.5(k) are not required to be made shall be
carried forward and taken into account in any subsequent adjustment. All
calculations under this Article XV shall be made by the Company and
shall be made to the nearest cent or to the nearest one hundredth of a
share, as the case may be. No adjustment need be made for rights to
purchase Common Stock pursuant to a Company plan for reinvestment of
dividends or interest. To the extent the Notes become convertible into
cash, assets, property or securities (other than capital stock of the
Company), no adjustment need be made thereafter as to the cash, assets,
property or such securities. Interest will not accrue on the cash.
(l) Whenever the Conversion Price is adjusted as herein provided,
the Company shall promptly file with the Trustee and any conversion
agent other than the Trustee an Officers' Certificate setting forth the
Conversion Price after such adjustment and setting forth a brief
statement of the facts requiring such adjustment. Promptly after
delivery of such certificate, the Company shall prepare a notice of such
adjustment of the Conversion Price setting forth the adjusted Conversion
Price and the date on which each adjustment becomes effective, and
within 20 days after execution thereof, the Company shall mail such
notice of such adjustment of the Conversion Price to the holder of each
Note at his last address appearing on the Note register provided for in
Section 2.5 of this Indenture. Failure to deliver such notice shall not
affect the legality or validity of any such adjustment.
(m) In any case in which this Section 15.5 provides that an
adjustment shall become effective immediately after a record date for an
event, the Company may defer until the occurrence of such event (i) the
issuance to the holder of any Note converted after such record date and
before the occurrence of such event of the additional shares of Common
Stock issuable upon such conversion by reason of the adjustment required
by such event over and above the Common Stock issuable upon such
conversion before giving effect to such adjustment and (ii) the
-89-
<PAGE>
payment to such holder of any amount in cash in lieu of any fraction
pursuant to Section 15.3.
(n) For purposes of this Section 15.5, the number of shares of
Common Stock at any time outstanding shall not include shares held in
the treasury of the Company but shall include shares issuable in respect
of scrip certificates issued in lieu of fractions of shares of Common
Stock. The Company will not pay any dividend or make any distribution on
shares of Common Stock held in the treasury of the Company.
Section 15.6 EFFECT OF RECLASSIFICATION, CONSOLIDATION, MERGER OR SALE.
If any of the following events occur, namely (i) any reclassification or change
of the outstanding shares of Common Stock (other than a subdivision or
combination to which Section 15.5(c) applies), (ii) any consolidation, merger or
combination of the Company with another corporation as a result of which holders
of Common Stock shall be entitled to receive stock, securities or other property
or assets (including cash) with respect to or in exchange for such Common Stock,
or (iii) any sale or conveyance of the properties and assets of the Company as,
or substantially as, an entirety to any other corporation as a result of which
holders of Common Stock shall be entitled to receive stock, securities or other
property or assets (including cash) with respect to or in exchange for such
Common Stock, then the Company or the successor or purchasing corporation, as
the case may be, shall execute with the Trustee a supplemental indenture (which
shall comply with the Trust Indenture Act as in force at the date of execution
of such supplemental indenture). Such supplemental indenture shall provide that
such Note shall be convertible into the kind and amount of shares of stock and
other securities or property or assets (including cash) that are receivable upon
such reclassification, change, consolidation, merger, combination, sale or
conveyance by a holder of the number of shares of Common Stock issuable upon
conversion of such Notes (assuming, for such purposes, a sufficient number of
authorized shares of Common Stock available to convert all such Notes)
immediately prior to such reclassification, change, consolidation, merger,
combination, sale or conveyance, assuming such holder of Common Stock did not
exercise his rights of election, if any, as to the kind or amount of securities,
cash or other property receivable upon such consolidation, merger, statutory
exchange, sale or conveyance (PROVIDED that, if the kind or amount of
securities, cash or other property receivable upon such consolidation, merger,
statutory exchange, sale or conveyance is not the same for each share of Common
Stock in respect of which such rights of election shall not have been exercised
("nonelecting share"), then for the purposes of this Section 15.6 the kind and
amount of securities, cash or other property receivable upon such consolidation,
merger, statutory exchange, sale or conveyance for each nonelecting share shall
be deemed to be the kind and amount so receivable per share by a plurality of
the nonelecting shares). 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.
-90-
<PAGE>
The Company shall cause notice of the execution of such supplemental
indenture to be mailed to each holder of Notes, at his address appearing on the
Note register provided for in Section 2.5 of this Indenture, within twenty (20)
days after execution thereof. Failure to deliver such notice shall not affect
the legality or validity of such supplemental indenture.
The above provisions of this Section shall similarly apply to successive
reclassifications, changes, consolidations, mergers, combinations, sales and
conveyances.
If this Section 15.6 applies to any event or occurrence, Section 15.5
shall not apply.
Section 15.7 TAXES ON SHARES ISSUED. The issue of stock certificates on
conversions of Notes shall be made without charge to the converting Noteholder
for any tax in respect of the issue thereof. The Company shall not, however, be
required to pay any tax which may be payable in respect of any transfer involved
in the issue and delivery of stock in any name other than that of the holder of
any Note converted, and the Company shall not be required to issue or deliver
any such stock certificate unless and until any Person requesting the issue
thereof shall have paid to the Company the amount of such tax or shall have
established to the satisfaction of the Company that such tax has been paid.
Section 15.8 RESERVATION OF SHARES; SHARES TO BE FULLY PAID; COMPLIANCE
WITH GOVERNMENTAL REQUIREMENTS; LISTING OF COMMON STOCK. The Company shall
provide, free from preemptive rights, out of its authorized but unissued shares
or shares held in treasury, sufficient shares of Common Stock to provide for the
conversion of the Notes from time to time as such Notes are presented for
conversion.
Before taking any action which would cause an adjustment reducing the
Conversion Price below the then par value, if any, of the shares of Common Stock
issuable upon conversion of the 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 shares of such Common Stock at such
adjusted Conversion Price.
The Company covenants that all shares of Common Stock which may be
issued upon conversion of Notes will upon issue be fully paid and non-assessable
by the Company and free from all taxes, liens and charges with respect to the
issue thereof.
The Company covenants that if any shares of Common Stock to be provided
for the purpose of conversion of Notes hereunder require registration with or
approval of any governmental authority under any federal or state law before
such shares may be validly issued upon conversion, the Company will endeavor, in
good faith and as expeditiously as possible, to secure such registration or
approval, as the case may be.
-91-
<PAGE>
The Company further covenants that, if at any time the Common Stock
shall be listed on the Nasdaq National Market or any other national securities
exchange or automated quotation system, the Company will, if permitted by the
rules of such exchange or automated quotation system, list and keep listed, so
long as the Common Stock shall be so listed on such exchange or automated
quotation system, all Common Stock issuable upon conversion of the Notes;
PROVIDED, HOWEVER, that if rules of such exchange or automated quotation system
permit the Company to defer the listing of such Common Stock until the first
conversion of the Notes into Common Stock in accordance with the provisions of
this Indenture, the Company covenants to list such Common Stock issuable upon
conversion of the Notes in accordance with the requirements of such exchange or
automated quotation system at such time.
Section 15.9 RESPONSIBILITY OF TRUSTEE. The Trustee and any other
conversion agent shall not at any time be under any duty or responsibility to
any holder of Notes to determine whether any facts exist which may require any
adjustment of the Conversion Price, or with respect to the nature or extent or
calculation of any such adjustment when made, or with respect to the method
employed, or herein or in any supplemental indenture provided to be employed, in
making the same. The Trustee and any other conversion agent shall not be
accountable with respect to the validity or value (or the kind or amount) of any
shares of Common Stock, or of any securities or property, which may at any time
be issued or delivered upon the conversion of any Note; and the Trustee and any
other conversion agent make no representations with respect thereto. Subject to
the provisions of Section 8.1, neither the Trustee nor any conversion agent
shall be responsible for any failure of the Company to issue, transfer or
deliver any shares of Common Stock or stock certificates or other securities or
property or cash upon the surrender of any Note for the purpose of conversion or
to comply with any of the duties, responsibilities or covenants of the Company
contained in this Article. 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 15.6 relating either to the kind or
amount of shares of stock or securities or property (including cash) receivable
by Noteholders upon the conversion of their Notes after any event referred to in
such Section 15.6 or to any adjustment to be made with respect thereto, but,
subject to the provisions of Section 8.1, may accept as conclusive evidence of
the correctness of any such provisions, and shall be protected in relying upon,
the Officers' Certificate (which the Company shall be obligated to file with the
Trustee prior to the execution of any such supplemental indenture) with respect
thereto.
Section 15.10 NOTICE TO HOLDERS PRIOR TO CERTAIN ACTIONS. In case:
(a) the Company shall declare a dividend (or any other
distribution) on its Common Stock, or shall issue Common Stock or
securities convertible into or
-92-
<PAGE>
exchangeable for Common Stock, in a manner that would require an
adjustment in the Conversion Price pursuant to Section 15.5; or
(b) the Company shall authorize the granting to the holders of
its Common Stock of rights or warrants to subscribe for or purchase any
share of any class or any other rights or warrants; or
(c) of any reclassification or reorganization of the Common Stock
of the Company (other than a subdivision or combination of its
outstanding Common Stock, or a change in par value, or from par value to
no par value, or from no par value to par value), or of any
consolidation or merger to which the Company is a party and for which
approval of any shareholders of the Company is required, or of the sale
or transfer of all or substantially all of the assets of the Company; or
(d) of the voluntary or involuntary dissolution, liquidation or
winding-up of the Company;
the Company shall cause to be filed with the Trustee and to be mailed to each
holder of Notes at his address appearing on the Note register provided for in
Section 2.5 of this Indenture, as promptly as possible but in any event at least
fifteen (15) days prior to the applicable date hereinafter specified, a notice
stating (x) the date on which a record is to be taken for the purpose of such
dividend, distribution or rights or warrants, or, if a record is not to be
taken, the date as of which the holders of Common Stock of record to be entitled
to such dividend, distribution or rights are to be determined, or (y) the date
on which such reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding-up is expected to become effective or occur,
and the date as of which it is expected that holders of Common Stock of record
shall be entitled to exchange their Common Stock for securities or other
property deliverable upon such reclassification, consolidation, merger, sale,
transfer, dissolution, liquidation or winding-up. Failure to give such notice,
or any defect therein, shall not affect the legality or validity of such
dividend, distribution, reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding-up.
ARTICLE XVI
MISCELLANEOUS PROVISIONS
Section 16.1 PROVISIONS BINDING ON COMPANY'S SUCCESSORS. All the
covenants, stipulations, promises and agreements by the Company contained in
this Indenture shall bind its successors and assigns whether so expressed or
not.
-93-
<PAGE>
Section 16.2 OFFICIAL ACTS BY SUCCESSOR CORPORATION. Any act or
proceeding by any provision of this Indenture authorized or required to be done
or performed by any board, committee or officer of the Company shall and may be
done and performed with like force and effect by the like board, committee or
officer of any corporation that shall at the time be the lawful sole successor
of the Company.
Section 16.3 ADDRESSES FOR NOTICES, ETC. Any notice or demand which by
any provision of this Indenture is required or permitted to be given or served
by the Trustee or by the holders of Notes on the Company shall be deemed to have
been sufficiently given or made, for all purposes, if given or served by being
deposited postage prepaid by registered or certified mail in a post office
letter box addressed (until another address is filed by the Company with the
Trustee) to Sunglass Hut International, Inc., 255 Alhambra Circle, Coral Gables,
Florida 33134, Attention: Chief Financial Officer. Any notice, direction,
request or demand hereunder to or upon the Trustee shall be deemed to have been
sufficiently given or made, for all purposes, if given or served by being
deposited postage prepaid by registered or certified mail in a post office
letter box addressed to the Corporate Trust Office, which office is, at the date
as of which this Indenture is dated, located at The Bank of New York, 101
Barclay Street, Floor 21 West, New York, New York 10286, Attention: Corporate
Trust Trustee Administration (Sunglass Hut International, Inc., Convertible
Subordinated Notes due 2003).
The Trustee, by notice to the Company, may designate additional or
different addresses for subsequent notices or communications.
Any notice or communication mailed to a Noteholder shall be mailed to
him by first class mail, postage prepaid, at his address as it appears on the
Note register and shall be sufficiently given to him if so mailed within the
time prescribed.
Failure to mail a notice or communication to a Noteholder or any defect
in it shall not affect its sufficiency with respect to other Noteholders. If a
notice or communication is mailed in the manner provided above, it is duly
given, whether or not the addressee receives it.
Section 16.4 GOVERNING LAW. This Indenture and each Note shall be deemed
to be a contract made under the laws of New York, and for all purposes shall be
construed in accordance with the laws of New York.
Section 16.5 EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT;
CERTIFICATES TO TRUSTEE. Upon any application or demand by the Company to the
Trustee to take any action under any of the provisions of this Indenture, the
Company shall furnish to the Trustee an Officers' Certificate stating that all
conditions precedent, if any, provided for in this Indenture (including any
covenants compliance with which constitutes a condition
-94-
<PAGE>
precedent) relating to the proposed action have been complied with, and an
Opinion of Counsel stating that, in the opinion of such counsel, all such
conditions precedent have been complied with.
Each certificate or opinion provided for in this Indenture and delivered
to the Trustee with respect to compliance with a condition or covenant provided
for in this Indenture (other than certificates provided pursuant to Section
6.4(d) hereof) shall include (1) a statement that the person making such
certificate or opinion has read such covenant or condition, (2) a brief
statement as to the nature and scope of the examination or investigation upon
which the statement or opinion contained in such certificate or opinion is
based, (3) a statement that, in the opinion of such person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with, and (4) a statement as to whether or not, in the opinion of such
person, such condition or covenant has been complied with.
Section 16.6 LEGAL HOLIDAYS. In any case where the date of maturity of
interest on or principal of the Notes or the date fixed for redemption of any
Note will not be a Business Day, then payment of such interest on or principal
of the Notes need not be made on such date, but may be made on the next
succeeding Business Day with the same force and effect as if made on the date of
maturity or the date fixed for redemption, and no interest shall accrue for the
period from and after such date.
Section 16.7 TRUST INDENTURE ACT. This Indenture is hereby made subject
to, and shall be governed by, the provisions of the Trust Indenture Act required
to be part of and to govern indentures qualified under the Trust Indenture Act;
PROVIDED, HOWEVER, that this Section 16.7 shall not require this Indenture or
the Trustee to be qualified under the Trust Indenture Act prior to the time such
qualification is in fact required under the terms of the Trust Indenture Act,
nor shall it constitute any admission or acknowledgment by any party to such
supplemental indenture that any such qualification is required prior to the time
such qualification is in fact required under the terms of the Trust Indenture
Act. If any provision hereof limits, qualifies or conflicts with another
provision hereof which is required to be included in an indenture qualified
under the Trust Indenture Act, such required provision shall control.
Section 16.8 NO SECURITY INTEREST CREATED. Nothing in this Indenture or
in the Notes, expressed or implied, shall be construed to constitute a security
interest under the Uniform Commercial Code or similar legislation, as now or
hereafter enacted and in effect, in any jurisdiction where property of the
Company or its subsidiaries is located.
Section 16.9 BENEFITS OF INDENTURE. Nothing in this Indenture or in the
Notes, expressed or implied, shall give to any Person, other than the parties
hereto, any paying
-95-
<PAGE>
agent, any authenticating agent, any Note registrar and their successors
hereunder, the holders of Notes and the holders of Senior Indebtedness any
benefit or any legal or equitable right, remedy or claim under this Indenture.
Section 16.10 TABLE OF CONTENTS, HEADINGS, ETC. The table of contents and
the titles and headings of the articles and sections of this Indenture have been
inserted for convenience of reference only, are not to be considered a part
hereof, and shall in no way modify or restrict any of the terms or provisions
hereof.
Section 16.11 AUTHENTICATING AGENT. The Trustee may appoint an
authenticating agent which shall be authorized to act on its behalf and subject
to its direction in the authentication and delivery of Notes in connection with
the original issuance thereof and transfers and exchanges of Notes hereunder,
including under Sections 2.4, 2.5, 2.6, 2.7, 3.3, 3.5 and 15.2, as fully to all
intents and purposes as though the authenticating agent had been expressly
authorized by this Indenture and those Sections to authenticate and deliver
Notes. For all purposes of this Indenture, the authentication and delivery of
Notes by the authenticating agent shall be deemed to be authentication and
delivery of such Notes "by the Trustee," and a certificate of authentication
executed on behalf of the Trustee by an authenticating agent shall be deemed to
satisfy any requirement hereunder or in the Notes for the Trustee's certificate
of authentication. Such authenticating agent shall at all times be a Person
eligible to serve as trustee hereunder pursuant to Section 8.9.
Any corporation into which any authenticating agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, consolidation or conversion to which any authenticating agent
shall be a party, or any corporation succeeding to the corporate trust business
of any authenticating agent, shall be the successor of the authenticating agent
hereunder, if such successor corporation is otherwise eligible under this
Section 16.11, without the execution or filing of any paper or any further act
on the part of the parties hereto or the authenticating agent or such successor
corporation.
Any authenticating agent may at any time resign by giving written notice
of resignation to the Trustee and to the Company. The Trustee may at any time
terminate the agency of any authenticating agent by giving written notice of
termination to such authenticating agent and to the Company. Upon receiving such
a notice of resignation or upon such a termination, or in case at any time any
authenticating agent shall cease to be eligible under this Section, the Trustee
shall either promptly appoint a successor authenticating agent or itself assume
the duties and obligations of the former authenticating agent under this
Indenture, and upon such appointment of a successor authenticating agent, if
made, the Trustee shall give written notice of such appointment of a successor
authenticating agent to the Company and shall mail notice of such
-96-
<PAGE>
appointment of a successor authenticating agent to all holders of Notes as the
names and addresses of such holders appear on the Note register.
The Trustee agrees to pay to the authenticating agent from time to time
reasonable compensation for its services (to the extent pre-approved by the
Company in writing), and the Trustee shall be entitled to be reimbursed for such
pre-approved payments, subject to Section 8.6.
The provisions of Sections 8.2, 8.3, 8.4, 9.3 and this Section 16.11
shall be applicable to any authenticating agent.
Section 16.12 PAYING AGENT. Each paying agent appointed pursuant to the
terms of this Indenture and the Trust Indenture Act shall hold in trust, for the
benefit of the Noteholders or the Trustee, all sums held by such paying agent
for the payment of the principal of or interest on the Notes, and shall give to
the Trustee notice of any default of the Company or any other obligor upon the
Notes in the making of any such payment.
Section 16.13 EXECUTION IN COUNTERPARTS. This Indenture may be executed
in any number of counterparts, each of which shall be an original, but such
counterparts shall together constitute but one and the same instrument.
The Bank of New York hereby accepts the trusts in this Indenture
declared and provided, upon the terms and conditions hereinabove set forth.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly signed as of the date first written above.
SUNGLASS HUT INTERNATIONAL,
INC.
By: /s/ GEORGE PITA
---------------------------------
Name: George Pita
Title: VP Finance
THE BANK OF NEW YORK
as Trustee
By: /s/ PAUL J. SCHMELZEL
---------------------------------
Name: Paul J. Schmelzel
Title: Assistant Treasurer
-97-
[For global Note only:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK NEW YORK) (THE "DEPOSITARY,"
WHICH TERM INCLUDES ANY SUCCESSOR DEPOSITARY FOR THE CERTIFICATES) TO THE
COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME
AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DEPOSITARY AND ANY PAYMENT
HEREON IS MADE TO CEDE & CO. (OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY), ANY TRANSFER, PLEDGE, OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
THE NOTE EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS, AND,
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR
THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING
SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT) OR (B) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE
501(A)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT) ("INSTITUTIONAL ACCREDITED
INVESTOR") OR (C) IT IS NOT A U.S. PERSON AND IS ACQUIRING THE NOTE EVIDENCED
HEREBY IN AN OFFSHORE TRANSACTION; (2) AGREES THAT IT WILL NOT, WITHIN THREE
YEARS AFTER THE ORIGINAL ISSUANCE OF THE NOTE EVIDENCED HEREBY, RESELL OR
OTHERWISE TRANSFER THE NOTE EVIDENCED HEREBY OR THE COMMON STOCK ISSUABLE UPON
CONVERSION OF SUCH NOTE EXCEPT (A) TO SUNGLASS HUT INTERNATIONAL, INC. OR ANY
SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO A QUALIFIED INSTITUTIONAL
BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C) INSIDE THE
UNITED STATES TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH
TRANSFER, FURNISHES TO THE BANK OF NEW YORK, AS TRUSTEE (OR A SUCCESSOR TRUSTEE,
AS APPLICABLE), A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND
AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THE NOTE EVIDENCED HEREBY
<PAGE>
(THE FORM OF WHICH LETTER CAN BE OBTAINED FROM SUCH TRUSTEE OR A SUCCESSOR
TRUSTEE, AS APPLICABLE), (D) OUTSIDE THE UNITED STATES IN COMPLIANCE WITH RULE
904 UNDER THE SECURITIES ACT, (E) PURSUANT TO THE EXEMPTION FROM REGISTRATION
PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR (F) PURSUANT TO
A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES
ACT (AND WHICH CONTINUES TO BE EFFECTIVE AT THE TIME OF SUCH TRANSFER); AND (3)
AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THE NOTE EVIDENCED HEREBY IS
TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION
WITH ANY TRANSFER OF THE NOTE EVIDENCED HEREBY WITHIN THREE YEARS AFTER THE
ORIGINAL ISSUANCE OF SUCH NOTE, THE HOLDER MUST CHECK THE APPROPRIATE BOX SET
FORTH ON THE REVERSE HEREOF RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT
THIS CERTIFICATE TO THE BANK OF NEW YORK, AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS
APPLICABLE). IF THE PROPOSED TRANSFEREE IS AN INSTITUTIONAL ACCREDITED INVESTOR
OR A PURCHASER WHO IS NOT A U.S. PERSON, THE HOLDER MUST, PRIOR TO SUCH
TRANSFER, FURNISH TO THE BANK OF NEW YORK, AS TRUSTEE (OR A SUCCESSOR TRUSTEE,
AS APPLICABLE), SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS IT
MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO
AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. THIS LEGEND WILL BE REMOVED UPON ANY
TRANSFER OF THE NOTE EVIDENCED HEREBY AFTER THE EXPIRATION OF THREE YEARS FROM
THE ORIGINAL ISSUANCE OF THE NOTE EVIDENCED HEREBY. AS USED HEREIN, THE TERMS
"OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS
GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.
-2-
<PAGE>
SUNGLASS HUT INTERNATIONAL, INC.
CONVERTIBLE SUBORDINATED NOTE DUE 2003
No. __ CUSIP ________
Sunglass Hut International, Inc., a corporation duly organized and
validly existing under the laws of the State of Delaware (herein called the
"Company), which term includes any successor corporation under the Indenture
referred to on the reverse hereof, for value received hereby promises to pay to
[for global Note, insert: CEDE & CO.] or registered assigns, the principal sum
of ________________ ($________________) on June 15, 2003, at the office or
agency of the Company maintained for that purpose in the Borough of Manhattan,
The City of New York, or, at the option of the holder of this Note, at the
Corporate Trust Office, in such coin or currency of the United States of America
as at the time of payment shall be legal tender for the payment of public and
private debts, and to pay interest, semi-annually on June 15 and December 15 of
each year, commencing December 15, 1996, on said principal sum at said office or
agency, in like coin or currency, at the rate per annum of 5 1/4%, from June 15
or December 15, as the case may be, immediately preceding the date of this Note
to which interest has been paid or duly provided for, unless the date hereof is
a date to which interest has been paid or duly provided for, in which case from
the date of this Note, or unless no interest has been paid or duly provided for
on the Notes, in which case from June 26, 1996, until payment of said principal
sum has been made or duly provided for. Notwithstanding the foregoing, if the
date hereof is after any June 1 or December 1, as the case may be, and before
the following June 15 or December 15, this Note shall bear interest from such
June 15 or December 15; PROVIDED, HOWEVER, that if the Company shall default in
the payment of interest due on such June 15 or December 15, then this Note shall
bear interest from the next preceding June 15 or December 15 to which interest
has been paid or duly provided for or, if no interest has been paid or duly
provided for on such Note, from June 26, 1996. The interest payable on the Note
pursuant to the Indenture on any June 15 or December 15 will be paid to the
Person in whose name this Note (or one or more Predecessor Notes) is registered
at the close of business on the record date, which shall be the June 1 or
December 1 (whether or not a Business Day) next preceding such June 15 or
December 15, as provided in the Indenture; PROVIDED that any such interest not
punctually paid or duly provided for shall be payable as provided in the
Indenture. Interest may, at the option of the Company, be paid by either (i) by
check mailed to the address of the Person entitled thereto as it appears in the
Note register or (ii) by wire transfer to an account maintained by such Person
located in the United States; PROVIDED, HOWEVER, that payments to The Depository
Trust Company will be made by wire transfer of immediately available funds to
the account of The Depository Trust Company or its nominee in accordance with
the wire transfer instructions supplied by such holder to the Trustee and paying
agent (if different from the Trustee). Holders electing to receive wire
-3-
<PAGE>
transfers must provide the Trustee with written instructions at least five days
prior to the record date for such interest payment date.
Reference is made to the further provisions of this Note set forth on
the reverse hereof, including, without limitation, provisions subordinating the
payment of principal of and premium, if any, and interest on the Notes to the
prior payment in full of all Senior Indebtedness, as defined in the Indenture,
and provisions giving the holder of this Note the right to convert this Note
into Common Stock of the Company on the terms and subject to the limitations
referred to on the reverse hereof and as more fully specified in the Indenture.
Such further provisions shall for all purposes have the same effect as though
fully set forth at this place.
This Note shall be deemed to be a contract made under the laws of the
State of New York, and for all purposes shall be construed in accordance with
and governed by the laws of said State.
This Note shall not be valid or become obligatory for any purpose until
the certificate of authentication hereon shall have been manually signed by the
Trustee or a duly authorized authenticating agent under the Indenture.
IN WITNESS WHEREOF, the Company has caused this Note to be duly executed
under its corporate seal.
SUNGLASS HUT INTERNATIONAL,
INC.
By:_____________________________
Attest:_________________________
-4-
<PAGE>
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes described in the within-named Indenture.
Dated:
THE BANK OF NEW YORK, as Trustee
By: -----------------------------------------
Authorized Signatory
By: -----------------------------------------
As Authenticating Agent (if different from Trustee)
-5-
<PAGE>
[FORM OF REVERSE OF NOTE]
SUNGLASS HUT INTERNATIONAL, INC.
CONVERTIBLE SUBORDINATED NOTE DUE 2003
This Note is one of a duly authorized issue of Notes of the Company,
designated as its Convertible Subordinated Notes due 2003 (herein called the
"Notes"), limited to the aggregate principal amount of $115,000,000, all issued
or to be issued under and pursuant to an indenture dated as of June 26, 1996
(herein called the "Indenture"), between the Company and The Bank of New York as
trustee (herein called the "Trustee"), to which Indenture and all indentures
supplemental thereto reference is hereby made for a description of the rights,
limitations of rights, obligations, duties and immunities thereunder of the
Trustee, the Company and the holders of the Notes.
In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal of and accrued interest on all Notes
may be declared, and upon said declaration shall become due and payable, in the
manner, with the effect and subject to the conditions provided in the Indenture.
The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the holders of not less than a majority in
aggregate principal amount of the Notes at the time outstanding, evidenced as in
the Indenture provided, to execute supplemental indentures adding any provisions
to or changing in any manner or eliminating any of the provisions of the
Indenture or of any supplemental indenture or modifying in any manner the rights
of the holders of the Notes; PROVIDED, HOWEVER, that no such supplemental
indenture shall (i) extend the fixed maturity of any Note, or reduce the rate or
extend the time of payment of interest thereon, or reduce the principal amount
thereof or premium, if any, thereon, or reduce any amount payable on redemption
thereof, or impair the right of any Noteholder to institute suit for the payment
thereof, or make the principal thereof or interest or premium, if any, thereon
payable in any coin or currency other than that provided in the Note, or modify
the provisions of the Indenture with respect to the subordination of the Notes
in a manner adverse to the Noteholders in any material respect, or change the
obligation of the Company to make redemption of any Note upon the happening of a
Fundamental Change in a manner adverse to the holder of the Notes, or impair the
right to convert the Notes into Common Stock subject to the terms set forth in
the Indenture, including Section 15.6 thereof, without the consent of the holder
of each Note so affected, or (ii) reduce the aforesaid percentage of Notes, the
holders of which are required to consent to any such supplemental indenture,
without the consent of the holders of all Notes then outstanding. It is also
provided in the Indenture that, prior to any declaration accelerating the
maturity of the Notes, the holders of a
<PAGE>
majority in aggregate principal amount of the Notes at the time outstanding may
on behalf of the holders of all of the Notes waive any past default or Event of
Default under the Indenture and its consequences except a default in the payment
of interest or any premium on or the principal of any of the Notes, a default in
the payment of redemption price pursuant to Article III or a failure by the
Company to convert any Notes into Common Stock of the Company. Any such consent
or waiver by the holder of this Note (unless revoked as provided in the
Indenture) shall be conclusive and binding upon such holder and upon all future
holders and owners of this Note and any Notes which may be issued in exchange or
substitute hereof, irrespective of whether or not any notation thereof is made
upon this Note or such other Notes.
To the extent and in the manner provided in the Indenture, the
indebtedness evidenced by the Notes is expressly subordinate and subject in
right of payment to the prior payment in full of all Senior Indebtedness of the
Company, as defined in the Indenture, whether outstanding at the date of the
Indenture or thereafter incurred, and this Note is issued subject to the
provisions of the Indenture with respect to such subordination. Each holder of
this Note, by accepting the same, agrees to and shall be bound by such
provisions and authorizes the Trustee on his behalf to take such action as may
be necessary or appropriate to effectuate the subordination so provided and
appoints the Trustee his attorney-in-fact for such purpose.
No reference herein to the Indenture and no provision of this Note or of
the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and any premium and interest
on this Note at the place, at the respective times, at the rate and in the coin
or currency herein prescribed.
Interest on the Notes shall be computed on the basis of a 360-day year
of twelve 30-day months.
The Notes are issuable in registered form without coupons in
denominations of $1,000 and any integral multiple of $ 1,000. At the office or
agency of the Company referred to on the face hereof, and in the manner and
subject to the limitations provided in the Indenture, without payment of any
service charge but with payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any registration or
exchange of Notes, Notes may be exchanged for a like aggregate principal amount
of Notes of other authorized denominations.
The Notes will not be redeemable at the option of the Company prior to
June 17, 1998. At any time on or after June 17, 1998, and prior to maturity the
Notes may be redeemed at the option of the Company as a whole, or from time to
time in part, upon mailing a notice of such redemption not less than 30 days
before the date fixed for redemption to the holders of Notes at their last
registered addresses, all as provided in the
-2-
<PAGE>
Indenture, at the following optional redemption prices (expressed as percentages
of the principal amount), together in each case with accrued interest to and
including the date fixed for redemption, except that prior to June 17, 1999, the
Notes will not be redeemable at the option of the Company unless the Closing
Price of the Common Stock shall have exceeded the product of the Conversion
Price then in effect times 140% (rounded to the nearest cent) for 20 Trading
Days within a period of 30 consecutive Trading Days ending within five Trading
Days prior to the notice of redemption.
If redeemed during the 12-month period beginning June 15:
YEAR PERCENTAGE
---- ----------
1998...................................................... 103.75%
1999...................................................... 103.00
2000...................................................... 102.25
2001...................................................... 101.50
2002...................................................... 100.75
and 100% at June 15, 2003; PROVIDED that if the date fixed for redemption is on
June 15 or December 15, then the interest payable on such date shall be paid to
the holder of record on the immediately preceding June 1 or December 1,
respectively.
The Notes are not subject to redemption through the operation of any
sinking fund.
If a Fundamental Change (as defined in the Indenture) occurs at any time
prior to June 15, 2003, the Notes will be redeemable on the 30th day after
notice thereof at the option of the holder. The Company shall redeem such Notes
at the following mandatory redemption prices (expressed as percentages of the
principal amount); PROVIDED that, if the Applicable Price (as defined in the
Indenture) with respect to the Fundamental Change is less than the Reference
Market Price (as defined in the Indenture), the Company shall redeem such Notes
at a price equal to the mandatory redemption price set forth below multiplied by
the fraction obtained by dividing the Applicable Price by the Reference Market
Price.
If redeemed during the 12-month period beginning June 15:
YEAR PERCENTAGE
---- ----------
1996...................................................... 105.25%
1997...................................................... 104.50
1998...................................................... 103.75
1999...................................................... 103.00
2000...................................................... 102.25
2001...................................................... 101.50
2002...................................................... 100.75
-3-
<PAGE>
and 100% at June 15, 2003. In each case, the Company shall also pay accrued and
unpaid interest, if any, on such Notes to, but excluding, the repurchase date;
PROVIDED that if such repurchase date is June 15 or December 15, then the
interest payable on such date shall be paid to the holder of record of the Note
on the immediately preceding June 1 or December 1. The Company shall mail or
cause to be mailed to all holders of record of the Notes a notice of the
occurrence of a Fundamental Change and of the redemption right arising as a
result thereof on or before the 10th day after the occurrence of such
Fundamental Change. For a Note to be so repaid at the option of the holder, the
Company must receive at the office or agency of the Company maintained for that
purpose in the Borough of Manhattan, The City of New York, such Note with the
form entitled "Option to Elect Repayment Upon a Fundamental Change" on the
reverse thereof duly completed, together with such Notes duly endorsed for
transfer, on or before the 30th day after the date of such notice (or if such
30th day is not a Business Day, the immediately preceding Business Day).
Subject to the provisions of the Indenture, the holder hereof has the
right, at its option, at any time after ninety (90) days following the date of
original issuance of the Notes and prior to the close of business on June 15,
2003, or, as to all or any portion hereof called for redemption, prior to the
close of business on the Business Day immediately preceding the date fixed for
redemption (unless the Company shall default in payment due upon redemption
thereof), to convert the principal hereof or any portion of such principal which
is $1,000 or an integral multiple thereof into that number of shares of
Company's Common Stock, as said shares shall be constituted at the date of
conversion, obtained by dividing the principal amount of this Note or portion
thereof to be converted by the Conversion Price of $30.25 or such Conversion
Price as adjusted from time to time as provided in the Indenture, upon surrender
of this Note, together with a conversion notice as provided in the Indenture, to
the Company at the office or agency of the Company maintained for that purpose
in the Borough of Manhattan, The City of New York, or at the option of such
holder, the Corporate Trust Office, and, unless the shares issuable on
conversion are to be issued in the same name as this Note, duly endorsed by, or
accompanied by instruments of transfer in form satisfactory to the Company duly
executed by, the holder or by his duly authorized attorney. No adjustment in
respect of interest or dividends will be made upon any conversion; provided,
HOWEVER, that if this Note shall be surrendered for conversion during the period
from the close of business on any record date for the payment of interest to the
close of business on the Business Day preceding the interest payment date, this
Note (unless it or the portion being converted shall have been called for
redemption during the period from the close of business on any record date for
the payment of interest to the close of business on the Business Day preceding
the interest payment date) must be accompanied by an amount, in New York
Clearing House funds or other funds acceptable to the Company, equal to the
interest payable on such interest payment date on the principal amount being
-4-
<PAGE>
converted. No fractional shares will be issued upon any conversion, but an
adjustment in cash will be made, as provided in the Indenture, in respect of any
fraction of a share which would otherwise be issuable upon the surrender of any
Note or Notes for conversion.
Any Notes called for redemption, unless surrendered for conversion on
or before the close of business on the date fixed for redemption, may be deemed
to be purchased from the holder of such Notes at an amount equal to the
applicable redemption price, together with accrued interest to the date fixed
for redemption, by one or more investment bankers or other purchasers who may
agree with the Company to purchase such Notes from the holders thereof and
convert them into Common Stock of the Company and to make payment for such Notes
as aforesaid to the Trustee in trust for such holders.
Upon due presentment for registration of transfer of this Note at the
office or agency of the Company in the Borough of Manhattan, The City of New
York, or at the option of the holder of this Note, at the Corporate Trust
Office, a new Note or Notes of authorized denominations for an equal aggregate
principal amount will be issued to the transferee in exchange thereof, subject
to the limitations provided in the Indenture, without charge except for any tax
or other governmental charge imposed in connection therewith.
The Company, the Trustee, any authenticating agent, any paying agent,
any conversion agent and any Note registrar may deem and treat the registered
holder hereof as the absolute owner of this Note (whether or not this Note shall
be overdue and notwithstanding any notation of ownership or other writing hereon
made by anyone other than the Company or any Note registrar), for the purpose of
receiving payment hereof, or on account hereof, for the conversion hereof and
for all other purposes, and neither the Company nor the Trustee nor any other
authenticating agent nor any paying agent nor any other conversion agent nor any
Note registrar shall be affected by any notice to the contrary. All payments
made to or upon the order of such registered holder shall, to the extent of the
sum or sums paid, satisfy and discharge liability for monies payable on this
Note.
No recourse for the payment of the principal of or any premium or
interest on this Note, or for any claim based hereon or otherwise in respect
hereof, and no recourse under or upon any obligation, covenant or agreement of
the Company in the Indenture or any indenture supplemental thereto or in any
Note, or because of the creation of any indebtedness represented thereby, shall
be had against any incorporator, stockholder, employee, agent, officer or
director or subsidiary, as such, past, present or future, of the Company or of
any successor corporation, either directly or through the Company or any
successor corporation, whether by virtue of any constitution, statute or rule of
law or by the enforcement of any assessment or penalty or otherwise, all such
liability being, by the
-5-
<PAGE>
acceptance hereof and as part of the consideration for the issue hereof,
expressly waived and released.
Terms used in this Note and defined in the Indenture are used herein as
therein defined.
-6-
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription of the face of
this Note, shall be construed as though they were written out in full according
to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - ______ Custodian _______
TEN ENT - as tenants by the (Cust) (Minor)
entireties under Uniform Gifts to Minors Act
JT TEN - as joint tenants with
right of survivorship ________________________________________
and not as tenants in (State)
common
Additional abbreviations may also be used though
not in the above list.
<PAGE>
CONVERSION NOTICE
To: SUNGLASS HUT INTERNATIONAL, INC.
The undersigned registered owner of this Note hereby irrevocably
exercises the option to convert this Note, or the portion hereof (which is
$1,000 or an integral multiple thereof) below designated, into shares of Common
Stock of Sunglass Hut International, Inc. in accordance with the terms of the
Indenture referred to in this Note, and directs that the shares issuable and
deliverable upon such conversion, together with any check in payment for
fractional shares and any Notes representing any unconverted principal amount
hereof, be issued and delivered to the registered holder hereof unless a
different name has been indicated below. If shares or any portion of this Note
not converted are to be issued in the name of a person other than the
undersigned, the undersigned will check the appropriate box below, fill in the
appropriate information and pay all transfer taxes payable with respect thereto.
Any amount required to be paid to the undersigned on account of interest
accompanies this Note.
Dated: ---------------------
------------------------------------------
------------------------------------------
Signature(s)
--------------------------------
Signature Guarantee
<PAGE>
[_] Fill in for registration of shares of Common Stock if to be issued, and
Notes if to be delivered, other than to and in the name of the
registered holder:
-------------------------------------
(Name)
-------------------------------------
(Street Address)
-------------------------------------
(City, State and Zip Code)
Please print name and address
Principal amount to be converted (if less
than all): $________________
-----------------------------------------
Social Security or Other Taxpayer
Identification Number
- 2 -
<PAGE>
OPTION TO ELECT REPAYMENT
UPON A FUNDAMENTAL CHANGE
To: SUNGLASS HUT INTERNATIONAL, INC.
The undersigned registered owner of this Note hereby irrevocably
acknowledges receipt of a notice from Sunglass Hut International, Inc. (the
"Company') as to the occurrence of a Fundamental Change with respect to the
Company and requests and instructs the Company to repay the entire principal
amount of this Note, or the portion thereof (which is $1,000 or an integral
multiple thereof) below designated, in accordance with the terms of the
Indenture referred to in this Note at the redemption price, together with
accrued interest to, but excluding, such date, to the registered holder hereof.
If any portion of this Note not being repaid is to be issued in the name of a
person other than the undersigned, the undersigned will check the appropriate
box below, fill in the appropriate information and pay all transfer taxes
payable with respect thereto. Any amount required to be paid to the undersigned
on account of interest accompanies this Note.
Dated: _____________
--------------------------------------------
--------------------------------------------
Signature(s)
NOTICE: The above signatures of the
holder(s) hereof must correspond with the
name as written upon the face of the Note in
every particular without alteration or
enlargement or any change whatever.
<PAGE>
[_] Fill in for registration of Notes if to be
delivered other than to and in the name
of the registered holder:
----------------------------------------
(Name)
----------------------------------------
(Street Address)
----------------------------------------
(City, State and Zip Code)
Please print name and address
Principal amount to be repaid (if less
than all): $__________________
----------------------------------------
Social Security or Other Taxpayer
Identification Number
<PAGE>
ASSIGNMENT
For value received _____________________ hereby sell(s), assign(s) and
transfer(s) unto _____________________ (Please insert social security or other
Taxpayer Identification Number of assignee) the within Note, and hereby
irrevocably constitutes and appoints _____________________ attorney to transfer
the said Note on the books of the Company, with full power of substitution in
the premises.
In connection with any transfer of the within Note within three years of
the date of original issuance of such Note, the undersigned confirms that such
Note is being transferred:
(1) [_] To Sunglass Hut International, Inc. or a subsidiary
thereof; or
(2) [_] Pursuant to and in compliance with Rule 144A under the
Securities Act of 1933, as amended; or
(3) [_] To an Institutional Accredited Investor pursuant to and in
compliance with the Securities Act of 1933, as amended; or
(4) [_] Pursuant to and in compliance with Regulation S under the
Securities Act of 1933, as amended;
(5) [_] Pursuant to and in compliance with Rule 144 under the
Securities Act of 1933, as amended; or
(6) [_] Pursuant to and in compliance with a registration statement
which has been declared effective under the Securities Act
of 1933, as amended (and which continues to be effective on
the date hereof);
and unless the box below is checked, the undersigned confirms that such Note is
not being transferred to an "affiliate" of the Company as defined in Rule 144
under the Securities Act of 1933, as amended (an "Affiliate").
[_] The transferee is an Affiliate of the Company.
Dated: _____________
----------------------------------------------
----------------------------------------------
Signature(s)
Signature Guarantee
----------------------------------------------
<PAGE>
Unless one of the boxes above is checked, the Trustee will refuse to
register any of the Notes evidenced by this certificate in the name of any
person other than the registered holder thereof. If box (4) or (5) is checked,
the Trustee may require, prior to registering any such transfer of the Notes,
such legal opinions, certifications and other information as the Trustee or the
Company shall reasonably request to confirm that such transfer is being made
pursuant to an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act of 1933, as amended (the
"Securities Act"), such as pursuant to an exemption provided by Rule 144 or
Regulation S under the Securities Act.
TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED.
The undersigned represents and warrants that (a) it is purchasing this
Note for its own account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act,
(b) it is aware that the sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding the Indenture and
the Notes issued thereunder as the undersigned has requested pursuant to Rule
144A, or the undersigned has determined not to request such information, and (c)
it is aware that the transferor is relying upon the undersigned's foregoing
representations and warranties in order to claim the exemption from registration
provided by Rule 144A.
Dated: _____________________ ______________________________________________
NOTICE: To be executed by an executive officer
