<PAGE> 1
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
------------------------
FORM 10-Q/A
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1998
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER 0-22336
ANTEC CORPORATION
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 36-3892082
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)
</TABLE>
5720 PEACHTREE PARKWAY, NW
NORCROSS, GA 30092
(770) 441-0007
(Address, including zip code and telephone number, including
area code, of registrant's principal executive offices)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No ____
At April 30, 1998, there were 39,384,506 shares of Common Stock, $0.01 par
value, of the registrant outstanding.
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<PAGE> 2
PART I. FINANCIAL INFORMATION
ANTEC CORPORATION
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1998 1997
--------- ------------
(UNAUDITED)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents................................. $ 1,400 $ 7,244
Accounts receivable (net of allowance for doubtful
accounts of $3,818 in 1998 and $4,289 in 1997)......... 98,431 87,800
Inventories, primarily finished goods..................... 121,234 111,698
Other current assets...................................... 3,498 2,319
-------- --------
Total current assets................................... 224,563 209,061
Property, plant and equipment, net.......................... 38,028 36,108
Goodwill (net of accumulated amortization of $38,012 in 1998
and $36,785 in 1997)...................................... 158,465 159,692
Deferred income taxes, net.................................. 24,021 19,281
Other assets................................................ 22,540 19,741
-------- --------
$467,617 $443,883
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable.......................................... $ 46,377 $ 38,404
Accrued compensation, benefits and related taxes.......... 16,884 15,958
Other current liabilities................................. 33,076 21,397
-------- --------
Total current liabilities.............................. 96,337 75,759
Long-term debt.............................................. 80,335 72,339
-------- --------
Total liabilities......................................... 176,672 148,098
Stockholders' equity:
Preferred stock, par value $1.00 per share, 5 million
shares authorized, none issued and outstanding......... -- --
Common stock, par value $0.01 per share, 50 million shares
authorized; 39.4 million and 39.3 million shares issued
and outstanding in 1998 and 1997, respectively......... 394 393
Capital in excess of par value............................ 261,742 261,081
Retained earnings......................................... 28,832 34,365
Cumulative translation adjustments........................ (23) (54)
-------- --------
Total stockholders' equity............................. 290,945 295,785
-------- --------
46$7,617... $443,883
======== ========
</TABLE>
See accompanying notes to the consolidated financial statements.
2
<PAGE> 3
ANTEC CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
--------------------
1998 1997
---- ----
<S> <C> <C>
Net sales................................................... $123,441 $120,034
Cost of sales............................................... 90,614 93,906
-------- --------
Gross profit................................................ 32,827 26,128
Operating expenses:
Selling, general and administrative expenses.............. 26,279 27,065
Amortization of goodwill.................................. 1,226 1,244
Non-recurring items....................................... 12,000 21,550
-------- --------
39,505 49,859
-------- --------
Operating loss.............................................. (6,678 (23,731)
Interest expense and other, net............................. 1,355 1,362
-------- --------
Loss before income tax benefit.............................. (8,033 (25,093)
Income tax benefit.......................................... 2,501 8,969
-------- --------
Net loss.................................................... $ (5,532) $(16,124)
======== ========
Net loss per common share................................... $(.14) $(.42)
======== ========
Weighted average common shares.............................. 39,348 38,420
======== ========
</TABLE>
See accompanying notes to the consolidated financial statements.
3
<PAGE> 4
ANTEC CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
--------------------
1998 1997
---- ----
<S> <C> <C>
Operating activities:
Net loss.................................................. $ (5,532) $(16,124)
Adjustments to reconcile net loss to net cash used by
operating activities:
Depreciation and amortization.......................... 3,427 3,705
Deferred income taxes.................................. (4,740) (5,533)
Changes in operating assets and liabilities:
Accounts receivable.................................. (10,631) 12,168
Inventories.......................................... (9,536) 11,151
Accounts payable and accrued liabilities............. 20,707 (25,174)
Other, net........................................... (987) 4,270
-------- --------
Net cash used by operating activities............. (7,292) (15,537)
Investing activities:
Purchases of property, plant and equipment................ (4,121) (2,880)
Investments in/advances to joint ventures................. (3,300) (750)
Other..................................................... 211 (68)
-------- --------
Net cash used by investing activities............. (7,210) (3,698)
-------- --------
Net cash used before financing activities......... (14,502) (19,235)
Financing activities:
Borrowings................................................ 32,500 39,000
Reductions in borrowings.................................. (24,504) (46,268)
Proceeds from issuance of common stock.................... 662 --
-------- --------
Net cash provided (used) by financing
activities....................................... 8,658 (7,268)
-------- --------
Net decrease in cash and cash equivalents................... (5,844) (26,503)
Cash and cash equivalents at beginning of period............ 7,244 27,398
-------- --------
Cash and cash equivalents at end of period.................. $ 1,400 $ 895
======== ========
Supplemental cash flow information:
Interest paid during the period........................... $ 1,322 $ 1,714
======== ========
Income taxes paid during the period....................... $ 19 $ 54
======== ========
</TABLE>
See accompanying notes to the consolidated financial statements.
4
<PAGE> 5
ANTEC CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1. BASIS OF PRESENTATION
ANTEC Corporation ("ANTEC" or herein together with its consolidated
subsidiaries called the "Company") is an international communications technology
company, headquartered in Atlanta, Georgia, with a major office in Denver. The
consolidated financial statements include the accounts of the Company after
elimination of intercompany transactions. The consolidated financial statements
furnished herein reflect all adjustments (consisting of normal recurring
accruals) which are, in the opinion of management, necessary for a fair
presentation of the consolidated financial statements for the periods shown.
These interim financial statements should be read in conjunction with the
Company's audited consolidated financial statements and notes thereto included
in the Company's Annual Report on Form 10-K for the Company's year ended
December 31, 1997.
NOTE 2. NON-RECURRING ITEMS
In January 1998, ANTEC announced a consolidation plan being implemented
concurrently with the creation of the new President and Chief Operating Officer
organization in Atlanta. ANTEC will consolidate all of its Rolling Meadows,
Illinois corporate and administrative functions into either the Atlanta
Technology Center or the Englewood, Colorado Telewire Supply division
headquarters during 1998 and 1999. It is also anticipated as part of this
consolidation that the two principal facilities located in Atlanta will be
consolidated and that certain international operating and administrative
functions located in Miami and Chicago will also be consolidated in Atlanta. In
connection with these consolidations, ANTEC recorded a charge of approximately
$12 million in the first quarter of 1998. The components of the non-recurring
charge included approximately $8.0 million related to personnel costs; and
approximately $4.0 million related to facilities and other costs. The
personnel-related costs included charges related to the termination of
approximately 170 employees. The Company anticipates that these consolidations
will reduce annual operating costs by as much as $10 million however, the impact
of these savings is not expected to be realized in full until 1999.
In the first quarter of 1997, in connection with the February 6, 1997
merger between ANTEC Corporation and TSX Corporation ("Merger"), the Company
recorded merger/integration costs aggregating approximately $28 million. The
components of the non-recurring charge included $6.9 million related to the
investment banking, legal, accounting and contractual change of control payments
associated with the Merger; $11.2 million related to facility and operational
consolidation and reorganization due to the combining of various manufacturing
operations; and $3.4 million related to severance costs resulting from the
elimination of positions duplicated by the Merger and integration. The
personnel-related costs included charges related to the termination of
approximately 200 employees primarily resulting from the factors described
above. Also included in the total merger/integration charge was a write-off of
redundant inventories totaling approximately $6.5 million which has been
reflected in cost of sales for the three months ended March 31, 1997. The costs
related to the facility and operational consolidation and reorganization were
comprised of costs associated with the shutdown of several of the Company's
operating locations. These costs consisted of lease termination payments, losses
on sale and disposal of building and equipment and other related fixed assets.
All of the planned facility closings were completed and related cash costs were
expended by the end of 1997. In 1997 and 1998, the Company paid in aggregate
approximately $2.6 million relating to personnel-related costs which represented
the termination of approximately 175 employees. As of March 31, 1998,
approximately $1.0 million of cash costs had yet to be expended which consisted
of contractual obligations resulting from the Merger and other personnel-related
costs. The Company anticipates these costs will be expended in 1998. As of March
31, 1998, there have been no significant adjustments to the liability.
5
<PAGE> 6
ANTEC CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
NOTE 3. IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS
In the first quarter of 1998, the Company adopted FASB Statement No. 130,
Reporting Comprehensive Income. The impact of this Statement on the financial
statements was immaterial.
In June 1997, the FASB issued Statement No. 131, Disclosures about Segments
of an Enterprise and Related Information, which establishes standards for the
way that public business enterprises report information about operating segments
and related disclosures about products and services, geographic areas, and major
customers. Statement 131 is effective for the 1998 annual financial statements
of the Company. Management has not completed its review of Statement 131, but
does not anticipate that the adoption of this statement will have a significant
effect on the Company's financial statements.
NOTE 4. SUBSEQUENT EVENTS
In April 1998, the Company obtained the right to repurchase all of its
common stock owned by Anixter International Inc. ("Anixter") at $14.50 per
share. Anixter currently owns approximately 4.9 million shares of ANTEC common
stock ("Common Stock"). It is anticipated ANTEC will acquire approximately 4.4
million of these shares, and TCI Ventures Group will acquire the remaining
500,000 shares.
In April 1998, the Company obtained non-cancelable commitments for a new
four-year credit facility ("New Credit Facility") from a group of banks
aggregating approximately $85 million. As a result of these commitments and the
issuance of the debt discussed below, the Company has classified borrowings
under its existing credit facility ("Existing Credit Facility") as a long-term
liability.
In May 1998, the Company issued $115.0 million of 4 1/2% Convertible
Subordinated Notes ("Notes") due May 15, 2003 (the "Offering"). The Notes are
convertible, at the option of holder, into the Company's common stock at a
conversion price of $24.00 per share. The Notes are redeemable, in whole or in
part, at the Company's option, at any time on or after May 15, 2001. The net
proceeds from the Offering were used to repay all outstanding amounts under the
Company's Existing Credit Facility, and the remainder of the net proceeds were
invested in government securities, certificates of deposits or similar
investment grade securities pending the application thereof to the Company's
repurchase of its Common Stock from Anixter described above. The Company has
until July 1, 1998 to complete such repurchase. On or prior to July 1, 1998, the
Company will use the previously invested proceeds from the Offering, and expects
to borrow the remaining funds under the New Credit Facility to complete the
Company's repurchase of Common Stock from Anixter.
6
<PAGE> 7
ANTEC CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
COMPARISON OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997
Net Sales. Net sales for the first three months of 1998 were $123.4 million
as compared to $120.0 million for the first three months of 1997, an increase of
2.8%. This increase primarily reflects an increase in capital spending by
ANTEC's largest customer, Tele-Communications, Inc. ("TCI") largely offset by
lower international sales.
Gross Profit. Gross profit for the first three months of 1998 was $32.8
million as compared to $26.1 million for the first three months of 1997. First
quarter 1997 includes a $6.5 million write-off of redundant inventories relating
to overlapping product lines and product development efforts in connection with
the Merger. Excluding the inventory charge, gross profit as a percentage of net
sales for the first three months of 1998 was 26.6% as compared to 27.1% for the
first three months of 1997. The decreased gross profit percentage for the
three-month period is a result of product mix, notably a decrease in ANTEC
manufactured product.
Selling, General and Administrative ("SG&A") Expenses. SG&A expenses for
the first three months of 1998 were $26.3 million compared to $27.1 million for
the first three months of 1997. This represents a decrease of 2.9% and reflects
ongoing expense controls.
Non-Recurring Items. In the first quarter of 1998, ANTEC recorded a
one-time charge of approximately $12.0 million. The non-recurring charge
included the severance, relocation and real estate costs associated with: the
consolidation of the Company's Rolling Meadows, Illinois corporate and
administrative functions into either the Atlanta Technology Center or the
Englewood, Colorado Telewire Supply division headquarters; the consolidation of
the Company's two principal facilities in Atlanta into one; and the
consolidation of certain international operating and administrative functions
located in Miami and Chicago into Atlanta. (See Note 2 of the Notes to the
Consolidated Financial Statements.)
In the first quarter of 1997, the Company recorded merger/integration costs
aggregating approximately $28 million. The non-recurring charge included
investment banking, legal, accounting and contractual change of control payments
associated with the Merger; facility and operational consolidation and
reorganization costs due to the combining of various manufacturing operations;
and severance costs resulting from the elimination of positions duplicated by
the Merger and integration. Also included in the total merger/integration charge
was a write-off of redundant inventories relating to overlapping product lines
and product development efforts totaling approximately $6.5 million which has
been reflected in cost of goods sold for the three months ended March 31, 1997.
(See Note 2 of the Notes to the Consolidated Financial Statements.)
Interest Expense and Other, Net. Interest expense and other, net remained
unchanged at $1.4 million in the first three months of 1998 from the first three
months of 1997. This level performance reflects improved working capital levels
offset by a higher average interest rate under the Company's Credit Facility.
Net Loss. Net loss was $5.5 million for the first three months of 1998 as
compared to net loss of $16.1 million for the first three months of 1997.
Included in the net losses for 1998 and 1997 were non-recurring items of
approximately $12.0 and $28.0 million, respectively. (See Note 2 of the Notes to
the Consolidated Financial Statements.) The decrease in net loss from the same
period in 1997 was due to the factors described above.
FINANCIAL LIQUIDITY AND CAPITAL RESOURCES
REORGANIZATION/MERGER COSTS
In January 1998, ANTEC announced a consolidation plan being implemented
concurrently with the creation of the new President and Chief Operating Officer
organization in Atlanta. ANTEC will consolidate all of its Rolling Meadows,
Illinois corporate and administrative functions into either the Atlanta
Technology
7
<PAGE> 8
ANTEC CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS -- (CONTINUED)
Center or the Englewood, Colorado Telewire Supply division headquarters during
1998 and 1999. It is also anticipated as part of this consolidation that the two
principal facilities located in Atlanta will be consolidated and that certain
international operating and administrative functions located in Miami and
Chicago will also be consolidated into Atlanta. In connection with these
consolidations, ANTEC recorded a charge of approximately $12 million in the
first quarter of 1998. The components of the non-recurring charge included
approximately $8.0 million related to personnel costs; and approximately $4.0
million related to facilities and other costs. The personnel-related costs
included charges related to the termination of approximately 170 employees. The
Company anticipates that these consolidations will reduce annual operating costs
by as much as $10 million however, the impact of these savings is not expected
to be realized in full until 1999.
In the first quarter of 1997, in connection with the Merger discussed in
Note 2 of the Notes to the Consolidated Financial Statements, the Company
recorded merger/integration costs aggregating approximately $28 million. The
components of the non-recurring charge included $6.9 million related to the
investment banking, legal, accounting and contractual change of control payments
associated with the Merger; $11.2 million related to facility and operational
consolidation and reorganization due to the combining of various manufacturing
operations; and $3.4 million related to severance costs resulting from the
elimination of positions duplicated by the Merger and integration. The
personnel-related costs included charges related to the termination of
approximately 200 employees primarily resulting from the factors described
above. Also included in the total merger/integration charge was a write-off of
redundant inventories totaling approximately $6.5 million which has been
reflected in cost of sales for the three months ended March 31, 1997. The costs
related to the facility and operational consolidation and reorganization were
comprised of costs associated with the shutdown of several of the Company's
operating locations. These costs consisted of lease termination payments, losses
on sale and disposal of building and equipment and other related fixed assets.
All of the planned facility closings were completed and related cash costs were
expended by the end of 1997. In 1997 and 1998, the Company paid in aggregate
approximately $2.6 million relating to personnel-related costs which represented
the termination of approximately 175 employees. As of March 31, 1998,
approximately $1.0 million of cash costs had yet to be expended which consisted
of contractual obligations resulting from the Merger and other personnel-related
costs. The Company anticipates these costs will be expended in 1998. As of March
31, 1998 there have been no significant adjustments to the liability.
FINANCING
As of March 31, 1998, the Company had a balance of $78 million outstanding
under its existing credit facility ("Existing Credit Facility"). At March 31,
1998, the Company had approximately $107 million of available borrowings under
its Existing Credit Facility. The average interest rate on its outstanding
borrowings was 6.5% at March 31, 1998. The commitment fee on unused borrowings
is approximately 1/4 of 1%. In April 1998, the Company obtained non-cancelable
commitments for a new four-year credit facility ("New Credit Facility") from a
group of banks aggregating approximately $85 million. The New Credit Facility
will have higher interest costs and will require the Company to pledge certain
assets.
In April 1998, the Company obtained the right to repurchase all of its
common stock owned by Anixter International Inc. ("Anixter") at $14.50 per
share. Anixter currently owns approximately 4.9 million shares of ANTEC common
stock ("Common Stock"). It is anticipated ANTEC will acquire approximately 4.4
million of these shares, and TCI Ventures Group will acquire the remaining
500,000 shares.
In May 1998, the Company issued $115.0 million of 4 1/2% Convertible
Subordinated Notes ("Notes") due May 15, 2003 (the "Offering"). The Notes are
convertible, at the option of the holder, into the Company's common stock at a
conversion price of $24.00 per share. The Notes are redeemable, in whole or in
part, at the Company's option, at any time on or after May 15, 2001. The net
proceeds from the Offering were used to repay all outstanding amounts under the
Company's Existing Credit Facility, and the remainder of the
8
<PAGE> 9
ANTEC CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS -- (CONTINUED)
net proceeds were invested in government securities, certificates of deposits or
similar investment grade securities pending the application thereof to the
Company's repurchase of its Common Stock from Anixter described above. The
Company has until July 1, 1998 to complete such repurchase. On or prior to July
1, 1998, the Company will use the previously invested proceeds from the
Offering, and expects to borrow the remaining funds under the New Credit
Facility to complete the Company's repurchase of Common Stock from Anixter.
CAPITAL EXPENDITURES
The Company's capital expenditures were $4.1 million and $2.9 million in
the three months ended March 31, 1998 and 1997, respectively. Except for the
impact of the Year 2000 discussed below, the Company had no significant
commitments for capital expenditures at March 31, 1998.
CASH FLOW
Cash flows used by operating activities were $7.3 million and $15.5 million
for the three months ended March 31, 1997 and 1996, respectively. 1998 primarily
reflects increased working capital levels due to higher sales volumes. 1997
includes the impact of merger/integration costs and a reduction in accounts
payable.
Cash flows used by investing activities were $7.2 million and $3.7 million
for the three months ended March 31, 1998 and 1997, respectively. 1998 and 1997
include investments in/advances to joint ventures of approximately $3.3 million
and $0.8 million, respectively. Both periods include the impact of planned sales
and warehouse improvements.
Cash flows provided (used) by financing activities were $8.7 million and
($7.3) million for the three months ended March 31, 1998 and 1997, respectively.
Both periods reflect their respective trends in operating and investing
activities, as well as significant reductions in cash balances.
IMPACT OF YEAR 2000
The Year 2000 Issue is the result of computer programs being written using
two digits rather than four to define the applicable year. Any of the Company's
computer programs that have time-sensitive software may recognize a date using
"00" as the year 1900 rather than the year 2000. This could result in a system
failure or miscalculations causing disruptions of operations, including, among
other things, a temporary inability to process transactions, send invoices or
engage in similar normal business activities.
Based on a recent assessment, and the Company's ongoing assessment of its
computer processing systems, the Company determined that it will be required to
modify or replace significant portions of its software to significantly improve
those systems and to enable these systems to function properly with respect to
dates in the year 2000 and thereafter. The Company presently believes that with
modifications to existing software and conversions to new software, the Year
2000 Issue will not pose significant operational problems for its computer
systems. However, if such modifications and conversions are not made, or are not
completed timely, the Year 2000 Issue could have a material impact on the
operations of the Company.
The Company's total Year 2000 project cost and estimates to complete
include the estimated costs and time associated with the impact of third party
Year 2000 Issues based on presently available information. However, there can be
no guarantee that the systems of other companies on which the Company's systems
rely will be timely converted and would not have an adverse effect on the
Company's systems. The Company has determined it has no exposure to
contingencies related to the Year 2000 Issue for the products it has sold.
If any of the Company's suppliers or customers do not, or if the Company
itself does not, successfully deal with the Year 2000 Issue, the Company could
experience delays in receiving or sending goods that would
9
<PAGE> 10
ANTEC CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS -- (CONTINUED)
increase its costs and that could cause the Company to lose business and even
customers and could subject the Company to claims for damages. Problems with the
Year 2000 Issue could also result in delays in the Company invoicing its
customers or in the Company receiving payments from them that would affect the
Company's liquidity. Problems with the Year 2000 Issue could affect the
activities of the Company's customers to the point that their demand for the
Company's products is reduced. The severity of these possible problems would
depend on the nature of the problem and how quickly it could be corrected or an
alternative implemented, which is unknown at this time. In the extreme such
problems could bring the Company to a standstill.
The Company, based on its normal interaction with its customers and
suppliers and the wide attention the Year 2000 Issue has received, believes that
its suppliers and customers will be prepared for the Year 2000 Issue. There can,
however, be no assurance that this will be so. The Company has not sought any
written assurances from its suppliers or customers because it does not belief
that any such assurances would be meaningful. The Company has not yet seen any
need for contingency plans for the Year 2000 Issue, but this need will be
continuously monitored as the Company acquires more information about the
preparations of its suppliers and customers. Some risks of the Year 2000 Issue
are beyond the control of the Company and its suppliers and customers. For
example no preparations or contingency plan will protect the Company from a down
turn in economic activity caused by the possible ripple effect through out the
entire economy that could be caused by problems of others with the Year 2000
Issue.
The Company will utilize both internal and external resources to reprogram,
or replace, and test the software for the system improvement and Year 2000
modifications. The Company anticipates completing the system improvement and the
Year 2000 project within one year but no later than March 31, 1999, which is
prior to any anticipated impact on its operating systems. The total cost of the
system improvement and the Year 2000 project is estimated at approximately $5.0
million and is being funded through operating cash flows.
Of the total project cost, approximately $2.0 million is attributable to
the purchase of new software and hardware which will be capitalized. The
remaining $3.0 million, which will be expensed as incurred, is not expected to
have a material effect on the results of operations. To date, the Company has
incurred approximately $2.6 million ($1.0 million expensed and $1.6 million
capitalized for new systems) related to its system improvement and the Year 2000
project.
The costs of the project and the date on which the Company believes it will
complete the Year 2000 modifications are based on management's best estimates,
which were derived utilizing numerous assumptions of future events, including
the continued availability of certain resources, third party modification plans
and other factors. However, there can be no guarantee that these estimates will
be achieved, and actual results could differ materially from those anticipated.
Specific factors that might cause such material differences include, but are not
limited to, the availability and cost of personnel trained in this area, the
ability to locate and correct all relevant computer codes, and similar
uncertainties.
FORWARD LOOKING STATEMENTS
Any of the above statements that are not statements about historical facts
are forward looking statements. The forward looking statements, as outlined in
the Private Securities Litigation Reform Act of 1995 ("the Act"), can be
identified by the use of terms such as "may," "expect," "anticipate," "intend,"
"estimate," "believe," "continue," or similar variations or the negative
thereof. Such forward looking statements are based on current expectations but
involve risks and uncertainties. The Company's business is dependent upon
general economic conditions as well as competitive, technological, and
regulatory developments and trends specific to the Company's industry and
customers. These conditions and events could be substantially different than
believed or expected and these differences may cause actual results to vary
materially from the forward looking statements made or the results which could
be expected to accompany such statements. Specific
10
<PAGE> 11
ANTEC CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS -- (CONTINUED)
factors which could cause such material differences include the following:
Design or manufacturing defects in the Company's products which could curtail
sales and subject the Company to substantial costs for removal, replacement and
reinstallation of such products; manufacturing or product development problems
that the Company does not anticipate because of the Company's relative
experience with these activities; an inability to absorb or adjust costs in
response to lower than anticipated sales volumes; unanticipated costs or
inefficiencies from the ongoing consolidation of certain activities; loss of key
management, sales or technical employees; decisions, by the Company's larger
customers, to cancel contracts or orders as they are entitled to do or not enter
into new contracts or orders with the Company because of dissatisfaction,
technological or competitive changes, changes in control or other reasons; and
the Company's inability, as a result of the Company's relative experience, to
deliver construction services within anticipated costs and time frames which
could cause loss of business, operating losses and damage claims. The above list
is representative of the factors which could affect the Company's forward
looking statements and is not intended as an all encompassing list of such
factors. In providing forward looking statements, the Company is not undertaking
any obligation to update publicly or otherwise these statements, whether as a
result of new information, future events or otherwise.
11
<PAGE> 12
PART II. OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTER TO A VOTE OF SECURITY HOLDERS
At the Annual Meeting of Stockholders of ANTEC Corporation held May 7,
1998:
An election of eight directors was held, and the shares so present were
voted as follows for the election of the following:
<TABLE>
<CAPTION>
NUMBER OF NUMBER OF
SHARES VOTED FOR SHARES WITHHELD
---------------- ---------------
<S> <C> <C>
Rod F. Dammeyer........................................ 30,905,833 207,061
John M. Egan........................................... 30,642,689 470,205
James L. Faust......................................... 30,917,812 195,082
William H. Lambert..................................... 30,918,629 194,265
John R. Petty.......................................... 30,902,970 209,924
Samuel K. Skinner...................................... 30,643,954 468,940
Robert J. Stanzione.................................... 30,920,835 192,059
Bruce Van Wagner....................................... 30,601,065 511,829
</TABLE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
10.28 4 1/2% Convertible Subordinated Notes due 2003 dated May 5, 1998
(b) Reports on Form 8-K
On April 29, 1998, ANTEC filed a report on Form 8-K relating to Item 5,
Other Events, to describe the Company's obtained right to repurchase
all of its shares owned by Anixter International, Inc. and its proposed
issue of Convertible Subordinated Notes.
12
<PAGE> 13
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
ANTEC CORPORATION
By: /s/ LAWRENCE A. MARGOLIS
------------------------------------
Lawrence A. Margolis
Executive Vice President
(Principal Financial Officer, duly
authorized to sign on behalf of
the registrant)
Dated: August , 1998
13
<PAGE> 1
EXHIBIT 10.28
EXECUTION COPY
ANTEC CORPORATION
ISSUER,
AND
THE BANK OF NEW YORK,
TRUSTEE
-----------------------
INDENTURE
Dated as of May 8, 1998
-------------------------
$115,000,000
4 1/2% Convertible Subordinated Notes due 2003
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
ARTICLE I.
DEFINITIONS AND INCORPORATION BY REFERENCE.............................................. 1
Section 1.1. Definitions............................................................ 1
Section 1.2. Incorporation by Reference of TIA...................................... 12
Section 1.3. Rules of Construction.................................................. 12
ARTICLE II.
THE SECURITIES.......................................................................... 13
Section 2.1. Form and Dating........................................................ 13
Section 2.2. Execution and Authentication........................................... 14
Section 2.3. Registrar and Paying Agent............................................. 15
Section 2.4. Paying Agent to Hold Assets in Trust................................... 15
Section 2.5. Securityholder Lists................................................... 16
Section 2.6. Transfer and Exchange.................................................. 16
Section 2.7. Replacement Securities................................................. 24
Section 2.8. Outstanding Securities................................................. 25
Section 2.9. Treasury Securities.................................................... 25
Section 2.10. Temporary Securities................................................... 26
Section 2.11. Cancellation........................................................... 26
Section 2.12. Defaulted Interest..................................................... 26
Section 2.13. CUSIP Number...........................................................
ARTICLE III.
REDEMPTION.............................................................................. 28
Section 3.1. Right of Redemption..................................................... 28
Section 3.2. Notices to Trustee...................................................... 29
Section 3.3. Selection of Securities to Be Redeemed.................................. 29
Section 3.4. Notice of Redemption.................................................... 30
Section 3.5. Effect of Notice of Redemption.......................................... 31
Section 3.6. Deposit of Redemption Price............................................. 32
</TABLE>
i
<PAGE> 3
<TABLE>
<S> <C>
ARTICLE IV.
COVENANTS................................................................................... 33
Section 4.1. Payment of Securities....................................................... 33
Section 4.2. Maintenance of Office or Agency............................................. 33
Section 4.3. Corporate Existence......................................................... 34
Section 4.4. Payment of Taxes and Other Claims........................................... 34
Section 4.5. Maintenance of Properties and Insurance..................................... 34
Section 4.6. Compliance Certificate; Notice of Default................................... 35
Section 4.7. Reports..................................................................... 36
Section 4.9. Waiver of Stay, Extension or Usury Laws..................................... 37
Section 4.10. Rule 144A Information Requirement........................................... 37
ARTICLE V.
SUCCESSOR CORPORATION....................................................................... 37
Section 5.1. Limitation on Merger, Sale or Consolidation................................. 37
Section 5.2. Successor Corporation Substituted........................................... 38
ARTICLE VI.
EVENTS OF DEFAULT AND REMEDIES.............................................................. 39
Section 6.1. Events of Default........................................................... 39
Section 6.2. Acceleration of Maturity Rescission and
Annulment................................................................... 41
Section 6.3. Collection of Indebtedness and Suits for Enforcement
by Trustee.................................................................. 43
Section 6.4. Trustee May File Proofs of Claim............................................ 44
Section 6.5. Trustee May Enforce Claims Without Possession of
Securities.................................................................. 45
Section 6.6. Priorities.................................................................. 45
Section 6.7. Limitation on Suits......................................................... 46
Section 6.8. Unconditional Right of Holders to Receive Principal, Premium, and Interest
Section 6.9. Rights and Remedies Cumulative.............................................. 47
Section 6.10. Delay or Omission Not Waiver................................................ 47
Section 6.11. Control by Holders.......................................................... 48
Section 6.12. Waiver of Past Default...................................................... 48
Section 6.13. Undertaking for Costs....................................................... 49
</TABLE>
ii
<PAGE> 4
<TABLE>
<S> <C>
Section 6.14. Restoration of Rights and Remedies.......................................... 49
ARTICLE VII.
TRUSTEE..................................................................................... 49
Section 7.1. Duties of Trustee........................................................... 50
Section 7.2. Rights of Trustee........................................................... 51
Section 7.3. Individual Rights of Trustee................................................ 53
Section 7.4. Trustee's Disclaimer........................................................ 53
Section 7.5. Notice of Default........................................................... 53
Section 7.6. Reports by Trustee to Holders............................................... 54
Section 7.7. Compensation and Indemnity.................................................. 54
Section 7.8. Replacement of Trustee...................................................... 55
Section 7.9. Successor Trustee by Merger, Etc............................................ 57
Section 7.10. Eligibility; Disqualification............................................... 57
Section 7.11. Preferential Collection of Claims Against
Company..................................................................... 57
Section 7.12. Other Capacities............................................................ 57
ARTICLE VIII.
SATISFACTION AND DISCHARGE.................................................................. 58
Section 8.1. Satisfaction and Discharge of Indenture..................................... 58
Section 8.2. Repayment to the Company.................................................... 58
ARTICLE IX.
AMENDMENTS, SUPPLEMENTS AND WAIVERS......................................................... 59
Section 9.1. Supplemental Indentures Without Consent of
Holders..................................................................... 59
Section 9.2. Amendments, Supplemental Indentures and Waivers
with Consent of Holders..................................................... 60
Section 9.3. Compliance with TIA......................................................... 61
Section 9.4. Revocation and Effect of Consents........................................... 61
Section 9.5. Notation on or Exchange of Securities....................................... 62
Section 9.6. Trustee to Sign Amendments, Etc............................................. 62
</TABLE>
iii
<PAGE> 5
<TABLE>
<S> <C>
ARTICLE X.
MEETINGS OF SECURITYHOLDERS................................................................... 63
Section 10.1. Purposes for Which Meetings May Be Called..................................... 63
Section 10.2. Manner of Calling Meetings.................................................... 63
Section 10.3. Calling of Meetings by the Company or Holders................................. 64
Section 10.4. Who May Attend and Vote at Meetings........................................... 64
Section 10.5. Regulations May Be Made by Company; Conduct of
the Meeting: Voting Rights: Adjournment....................................... 65
Section 10.6. Voting at the Meeting and Record to Be Kept................................... 66
Section 10.7. Exercise of Rights of Trustee or Holders May Not Be
Hindered or Delayed by Call of Meeting........................................ 66
ARTICLE XI.
RIGHT TO REQUIRE REPURCHASE UPON A CHANGE OF CONTROL.......................................... 67
Section 11.1. Repurchase of Securities at Option of the Holder
Upon a Change of Control...................................................... 67
Section 11.2. Rescission of Change of Control Determination................................. 70
ARTICLE XII.
SUBORDINATION................................................................................. 70
Section 12.1. Securities Subordinated to Senior Indebtedness............................... 70
Section 12.2. No Payment on Securities in Certain
Circumstances................................................................ 71
Section 12.3. Securities Subordinated to Prior Payment of All
Senior Indebtedness on Dissolution Liquidation or
Reorganization............................................................... 73
Section 12.4. Securityholders to Be Subrogated to Rights of
Holders of Senior Indebtedness............................................... 74
Section 12.5. Obligations of the Company Unconditional..................................... 74
Section 12.6. Trustee and Other Agents Entitled to Assume
Payments Not Prohibited in Absence of Notice................................. 75
Section 12.7. Subordination Rights Not Impaired by Acts or
Omissions of the Company or Holders of Senior
Indebtedness................................................................. 76
</TABLE>
iv
<PAGE> 6
<TABLE>
<S> <C>
Section 12.8. Securityholders Authorize Trustee to Effectuate
Subordination of Securities............................................... 76
Section 12.9. Right of Trustee to Hold Senior Indebtedness.............................. 77
Section 12.10. Article XII Not to Prevent Events of Default.............................. 77
Section 12.11. No Duty of Trustee and Other Agents to Holders of Senior
Indebtedness.............................................................. 77
Section 12.12. Amendments................................................................ 77
ARTICLE XIII.
CONVERSION OF SECURITIES................................................................... 78
Section 13.1. Conversion Privilege....................................................... 78
Section 13.2. Exercise of Conversion Privilege........................................... 78
Section 13.3. Fractional Interests....................................................... 79
Section 13.4. Conversion Price........................................................... 80
Section 13.5. Adjustment of Conversion Price............................................. 80
Section 13.6. Continuation of Conversion Privilege in Case of
Reclassification, Change, Merger, Consolidation
or Sale of Assets.......................................................... 86
Section 13.7. Notice of Certain Events................................................... 88
Section 13.8. Taxes on Conversion........................................................ 89
Section 13.10. Disclaimer of Responsibility for Certain Matters........................... 90
Section 13.11. Return of Funds Deposited for Redemption of
Converted Securities....................................................... 91
ARTICLE XIV.
MISCELLANEOUS.............................................................................. 91
Section 14.1. TIA Controls............................................................... 91
Section 14.2. Notices.................................................................... 91
Section 14.3. Communications by Holders with Other Holders............................... 92
Section 14.5. Statements Required in Certificate or Opinion.............................. 93
Section 14.6. Rules by Trustee, Paying Agent, Registrar.................................. 93
Section 14.7. Legal Holidays............................................................. 94
Section 14.9. No Adverse Interpretation of Other Agreements.............................. 94
Section 14.10. No Recourse Against Others................................................. 95
Section 14.11. Successors................................................................. 95
Section 14.12. Duplicate Originals........................................................ 95
Section 14.13. Severability............................................................... 95
</TABLE>
v
<PAGE> 7
<TABLE>
<S> <C>
Section 14.14. Table of Contents, Headings, Etc........................................... 95
Section 14.15. Qualification of Indenture................................................. 96
Section 14.16. Registration Rights........................................................ 96
EXHIBIT A - Form of Security............................................................... A-1
EXHIBIT B - Accredited Investor Letter..................................................... B-1
EXHIBIT C - Form of Conversion Notice...................................................... C-1
</TABLE>
vi
<PAGE> 8
CROSS-REFERENCE TABLE
TIA
INDENTURE
SECTION SECTION
- ------- -----------
310(a)(1) 7.10
(a)(2) 7.10
(a)(3) N.A.
(a)(4) N.A.
(a)(5) 7.10
(b) 7.8;
7.10;
14.2
(c) N.A.
311(a) 7.11
(b) 7.11
(c) N.A.
312(a) 2.5
(b) 14.3
(c) 14.3
313(a) 7.6
(b)(1) N.A.
(b)(2) 7.6
(c) 7.6;
14.2
(d) 7.6
314(a) 4.6;
13.2
(b) N.A.
(c)(1) 2.2;
7.2;
14.4
(c)(2) 7.2;
14.4
(c)(3) N.A.
(d) N.A.
(e) 14.5
vii
<PAGE> 9
(f) N.A.
315(a) 7.1(b)
(b) 7.5;
7.6;
14.2
(c) 7.1(a)
(d) 2.8;
6.11;
7.1(b)(c)
(e) 6.13
316(a)(last sentence) 2.9
(a)(1)(A) 6.11
(a)(1)(B) 6.12
(a)(2) N.A.
(b) 6.12;
6.7
317(a)(1) 6.3
(a)(2) 6.4
(b) 2.4
318(a) 14.1
_______________
N.A. means Not Applicable
Note: This Cross-Reference Table shall not, for any purpose, be deemed a
part of the Indenture.
viii
<PAGE> 10
INDENTURE, dated as of May 8, 1998, between ANTEC Corporation,
a Delaware corporation (the "Company"), and The Bank of New York banking
corporation, as Trustee.
Each party hereto agrees as follows for the benefit of each
other party and for the equal and ratable benefit of the Holders of the
Company's 4 1/4% Convertible Subordinated Notes due 2003:
ARTICLE I.
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.1. Definitions.
"Acceleration Notice" shall have the meaning specified in
Section 6.2.
"Affiliate" means any person directly or indirectly
controlling or controlled by or under direct or indirect common control with
the Company. For purposes of this definition, the terms "control,"
"controlling" and "controlled" mean the power to direct the management and
policies of a person, directly or through one or more intermediaries, whether
through the ownership of voting securities, by contract, or otherwise.
"Agent" means the Trustee and any Registrar, Paying Agent,
co-Registrar, authenticating agent or Securities Custodian.
"Bankruptcy Law" means Title 11, U.S. Code, or any similar
federal, state or foreign law for the relief of debtors.
"Beneficial Owner" for purposes of the definition of Change of
Control has the meaning attributed to it in Rules 13d-3 and 13d-5 under the
Exchange Act, whether or not applicable.
"Board of Directors" means, with respect to any person, the
Board of Directors of such person or any committee of the Board of Directors of
such person
<PAGE> 11
authorized, with respect to any particular matter, to exercise the
power of the Board of Directors of such person.
"Board Resolution" means, with respect to any person,
a duly adopted resolution of the Board of Directors of such person.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday
and Friday that is not a day on which banking institutions in New York, New
York are authorized or obligated by law or executive order to close.
"Capitalized Lease Obligation" means, as to any Person, the
obligation of such Person to pay rent or other amounts under a lease to which
such Person is a party that is required to be classified and accounted for as a
capital lease obligation under GAAP.
"Capital Stock" means, with respect to any Person, any and all
shares, interests, rights to purchase (other than convertible or exchangeable
Indebtedness), warrants, options, participations or other equivalents of or
interests (however designated) in stock issued by that Person.
"Cash" means 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.
"Change of Control" means (i) an event or series of events as
a result of which any "person" or "group" (as such terms are used in Sections
13(d)(3) and 14(d) of the Exchange Act) (excluding the Company or any wholly
owned Subsidiary thereof or any employee benefit plan of the Company or any
such Subsidiary) is or becomes, directly or indirectly, the Beneficial Owner of
more than 50.0% of the Voting Stock, (ii) the completion of any consolidation
or merger of the Company with or into any other Person, or sale, conveyance,
transfer or lease by the Company of all or substantially all of its assets to
any Person, or any merger of any other Person into the Company in a single
transaction or series of related transactions, and, in the case of any such
transaction or series of related transactions, the outstanding Common Stock of
the Company is changed or exchanged as a result, unless the shareholders of the
Company immediately before such transaction own, directly or indirectly,
immediately following such transaction, at least a majority of the combined
voting power of the outstanding voting securities of the Person resulting from
such transaction in substantially the same proportion as their ownership of the
Voting
2
<PAGE> 12
Stock immediately before such transaction, or (iii) such time as the
Continuing Directors do not constitute a majority of the Board of Directors of
the Company (or, if applicable, a successor corporation to the Company).
"Code" means the Internal Revenue Code of 1986, as amended.
"Common Stock" means the Company's common stock, $0.01 par
value per share, or as such stock may be reconstituted from time to time.
"Company" means the party named as such in this Indenture
until a successor replaces it pursuant to the Indenture, and thereafter means
such successor.
"Continuing Director" means at any date a member of the
Company's Board of Directors (i) who was a member of such board on the Issue
Date or (ii) who was nominated or elected by at least a majority of the
directors who were Continuing Directors (as described in clause (i) hereto) at
the time of such nomination or election or whose election to the Company's
Board of Directors was recommended or endorsed by at least a majority of the
directors who were Continuing Directors (as described in clause (i) hereto) at
the time of such nomination or election.
"Conversion Price" shall have the meaning specified in Section
13.4.
"Conversion Shares" shall have the meaning specified in Section 13.5(1).
"Credit Facility" shall mean that certain Credit and Guarantee
Agreement, to be entered into pursuant to a commitment letter dated as of April
21, 1998, among the Company, the subsidiary guarantors party thereto, the
various lenders party thereto, Bank of America National Trust and Savings
Association, as Collateral Agent, and The Bank of New York, as administrative
agent, as such agreement may be amended, restated, modified, renewed, refunded,
replaced or refinanced from time to time thereafter, including any notes,
guaranties, security or pledge agreements, letters of credit and other
documents or instruments executed pursuant thereto and any exhibits or
schedules to any of the foregoing, as the same may be in effect from time to
time, in each case, as such agreements may be amended, modified, supplemented,
renewed, refunded, replaced, refinanced, extended or restated from time to time
(whether with the original agents and lenders or other agents an lenders or
otherwise, and whether provided under the original credit
3
<PAGE> 13
agreement or other credit agreements or otherwise), including any appendices,
exhibits or schedules to any of the foregoing.
"Custodian" means any receiver, trustee, assignee, liquidator,
sequestrator or similar official under any Bankruptcy Law.
"Date of Conversion" shall have the meaning specified in
Section 13.2.
"Default" means any event or condition that is, or after
notice or passage of time or both would be, an Event of Default.
"Defaulted Interest" shall have the meaning specified in
Section 2.12.
"Definitive Securities" means Securities that are in the form
of Security attached hereto as Exhibit A that do not include the information
called for by footnotes 1 and 3 thereof.
"Depositary" means, with respect to the Securities issuable or
issued in whole or in part in global form, the person specified in Section 2.3
as the Depositary with respect to the Securities, until a successor shall have
been appointed and become such pursuant to the applicable provision of this
Indenture, and, thereafter, "Depositary" shall mean or include such successor.
"Designated Senior Debt" means (i) any Indebtedness
outstanding under the Credit Facility and (ii) any other Senior Indebtedness,
the principal amount of which is $10 million or more and that has been
designated by the Company as "Designated Senior Debt."
"Disqualified Capital Stock" means, with respect to the
Company, Capital Stock of the Company that, by its terms or by the terms of any
security into which it is convertible, exercisable or exchangeable, is, or upon
the happening of an event or the passage of time would be, required to be
redeemed or repurchased (including at the option of the holder thereof) by the
Company, in whole or in part, on or prior to the Stated Maturity of the Notes,
provided that only the portion of such Capital Stock which is so convertible,
exercisable, exchangeable or redeemable or subject to repurchase prior to such
Stated Maturity shall be deemed to be Disqualified Capital Stock.
4
<PAGE> 14
"Distribution Date" shall have the meaning specified in Section
13.5(1).
"DTC" shall have the meaning specified in Section 2.3.
"Event of Default" shall have the meaning specified in Section
6.1.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated by the SEC thereunder.
"Expiration Time" shall have the meaning specified in Section
13.5(f).
"GAAP" means United States generally accepted accounting
principles set forth in the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards Board or in
such other statements by such other entity as approved by a significant segment
of the accounting profession which are in effect in the United States;
provided, however, that for purposes of determining compliance with covenants
in the Indenture, "GAAP" means such generally accepted accounting principles
which are in effect as of the Issue Date.
"Global Security" means a Security that contains the paragraph
referred to in footnote 1 and the additional schedule referred to in footnote 3
to the form of Security attached hereto as Exhibit A.
"Holder" or "Securityholder" means the person in whose name a
Security is registered on the Registrar's books.
"Indebtedness" of any person means, without duplication, (a)
all liabilities and obligations, contingent or otherwise, of any such Person,
(i) in respect of borrowed money (whether or not the lender has recourse to all
or any portion of the assets of such Person), (ii) evidenced by credit or loan
agreements, bonds, notes, debentures or similar instruments (including, without
limitation, notes or similar instruments given in connection with the
acquisition of any business, properties or assets of any kind), (iii) evidenced
by bankers' acceptances or similar instruments issued or accepted by banks,
(iv) for the payment of money relating to a Capitalized Lease Obligation, or
(v) evidenced by a letter of credit, bank guarantee or a reimbursement
obligation of such Person with respect to any letter of credit; (b) all
5
<PAGE> 15
obligations of such Person issued or assumed as the deferred purchase price of
property or services (but excluding trade accounts payable or accrued
liabilities arising in the ordinary course of business); (c) all net
obligations of such person under Interest Swap and Hedging Obligations; (d) all
liabilities of others of the kind described in the preceding clauses (a), (b)
or (c) that such Person has guaranteed or that is otherwise its legal
liability, or which is secured by a lien on property of such Person, and all
obligations to purchase, redeem or acquire any Capital Stock; and (e) any and
all deferrals, renewals, extensions, modifications, replacements,
restatements, refinancings and refundings (whether direct or indirect) of, or
any indebtedness or obligation issued in exchange for, any liability of the
kind described in any of the preceding clauses (a), (b), (c) or (d), or this
clause (e), whether or not between or among the same parties.
"Indenture" means this Indenture, as amended or supplemented
from time to time in accordance with the terms hereof.
"Initial Purchaser" means Donaldson, Lufkin & Jenrette
Securities Corporation.
"Interest Payment Date" means the stated due date of an
installment of interest on the Securities.
"Interest Swap and Hedging Obligation" means the obligations
of any Person under any interest rate or currency protection agreement, future
agreement, option agreement, swap agreement, cap agreement or other interest
rate or currency hedge agreement, collar agreement or other similar agreement
or arrangement to which such Person is a party or beneficiary.
"Issue Date" means the date of first issuance of the
Securities under this Indenture.
"Junior Securities" means any Qualified Capital Stock of the
Company and any Indebtedness of the Company, in each case that is fully
subordinated to all Senior Indebtedness (and any debt securities issued in
exchange for Senior Indebtedness) to substantially the same extent as, or to a
greater extent than, the Notes are subordinated to Senior Indebtedness pursuant
to the Indenture.
"Last Sale Price" shall have the meaning specified in Section
13.3.
6
<PAGE> 16
"Legal Holiday" shall have the meaning specified in Section
14.7.
"Lien" means any mortgage, lien, pledge, charge, security
interest or other encumbrance of any kind, whether or not filed, recorded or
otherwise perfected under applicable law (including any conditional sale or
other title retention agreement and any lease deemed to constitute a security
interest and any option or other agreement to give any security interest).
"Liquidated Damages" shall have the meaning specified in the
Registration Rights Agreement.
"non-electing share" shall have the meaning specified in
Section 13.6.
"Non-Payment Default" shall have the meaning specified in
Section 12.2(b).
"Notice of Default" shall have the meaning specified in
Section 6.1(3), (4) or (5).
"Offer" shall have the meaning specified in Section 13.5(f).
"Offering Memorandum" means the final Offering Memorandum,
dated as of May 5, 1998, in connection with which the Securities were offered
and sold by the Company.
"Officer" means, with respect to the Company, the Chief
Executive Officer, the President, any Vice President, the Chief Financial
Officer, the Treasurer, the Controller, or the Secretary or the Assistant
Secretary of the Company.
"Officers' Certificate" means, with respect to the Company, a
certificate signed by two Officers of the Company and otherwise complying with
the requirements of Section 2.2, if applicable, and Sections 14.4 and 14.5.
"Opinion of Counsel" means a written opinion from legal
counsel who is reasonably acceptable to the Trustee and which complies with the
requirements of Sections 14.4 and 14.5.
"Paying Agent" shall have the meaning specified in Section
2.3.
7
<PAGE> 17
"Payment Blockage Period" shall have the meaning specified in
Section 12.2(b).
"Payment Default" shall have the meaning specified in
Section 12.2(a).
"Payment Notice" shall have the meaning specified in Section
12.2(b).
"Person" or "person" means any corporation, individual,
limited liability company, joint stock company, joint venture, partnership,
unincorporated association, governmental regulatory entity, country, state or
political subdivision thereof, trust, municipality or other entity.
"principal" of any Indebtedness means the principal of such
Indebtedness plus, without duplication, any applicable premium, if any, on such
Indebtedness.
"property" means any right or interest in or to property or
assets of any kind whatsoever, whether real, personal or mixed and whether
tangible or intangible.
"Purchase Agreement" means that certain Purchase Agreement,
dated May 5, 1998, by and among the Company and the Initial Purchaser.
"Purchased Shares" shall have the meaning specified in Section
13.5(f).
"Qualified Capital Stock" means any Capital Stock of the
Company that is not Disqualified Capital Stock.
"Record Date" means a record date specified in the Securities
whether or not such record date is a Business Day.
"Redemption Date," when used with respect to any Security to
be redeemed, means the date fixed for such redemption pursuant to Article III
of this Indenture and Paragraph 5 in the form of Security attached hereto as
Exhibit A.
"Redemption Price," when used with respect to any Security to
be redeemed, means the redemption price for such redemption pursuant to
Paragraph 5 in the form of Security attached hereto as Exhibit A, which shall
include, without
8
<PAGE> 18
duplication, in each case, accrued and unpaid interest and
Liquidated Damages, if any, to but excluding, the Redemption Date.
"Registrar" shall have the meaning specified in Section 2.3.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated the date hereof, by and among the Initial Purchaser and the
Company, as such agreement may be amended, modified or supplemented from time
to time in accordance with the terms thereof.
"Repurchase Date" shall have the meaning specified in Section
11.1 (a).
"Repurchase Offer" shall have the meaning specified in
Section 11.1(b).
"Repurchase Offer Period" shall have the meaning specified in
Section 11.1(b).
"Repurchase Price" shall have the meaning specified in Section
11.1(a).
"Repurchase Put Date" shall have the meaning specified in
Section 11.1(b).
"Restricted Security" means a Security, unless or until it has
been (i) disposed of in a transaction effectively registered under the
Securities Act or (ii) distributed to the public pursuant to Rule 144 (or any
similar provision then in force) under the Securities Act.
"SEC" means the Securities and Exchange Commission.
"Securities" means, collectively, 4 1/2% Convertible
Subordinated Notes due 2003, as supplemented from time to time in accordance
with the terms hereof, issued under this Indenture.
"Securities Act" means the Securities Act of 1933, as amended,
and the rules and regulations of the SEC promulgated thereunder.
9
<PAGE> 19
"Securities Custodian" means the Trustee, as custodian with
respect to the Securities in global form, or any successor entity thereto.
"Senior Indebtedness" means all obligations of the Company to
pay the principal of, premium, if any, interest (including all interest
accruing subsequent to the commencement of any bankruptcy or similar
proceeding, whether or not a claim for post-petition interest is allowed as a
claim in any such proceeding) and rent payable on or in connection with, and
all letters of credit, reimbursement obligations and fees, costs, expenses and
other amounts and liabilities accrued or due on or in connection with the
Credit Facility and any other Indebtedness of the Company, whether outstanding
on the date of the Indenture or thereafter created, incurred,
assumed, guaranteed or in effect guaranteed by the Company, unless the
instrument creating or evidencing such Indebtedness expressly provides that
such Indebtedness is not senior or superior in right of payment to the
Securities or is pari passu with, or subordinated to, the Securities; provided
that in no event shall Senior Indebtedness include (a) Indebtedness of the
Company owed or owing to any Subsidiary of the Company, (b) Indebtedness of the
Company representing or with respect to 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, (c) any liability for
taxes owed or owing by the Company or any Subsidiary of the Company, or (d) the
Securities.
"Shelf Registration Statement" shall have the meaning
specified in the Registration Rights Agreement.
"Significant Subsidiary" means any Subsidiary which is a
"significant subsidiary" of the Company within the meaning of Rule 1-02(w) of
Regulation S-X promulgated by the Commission as in effect as of the date of the
Indenture.
"Special Record Date" for payment of any Defaulted Interest
means a date fixed by the Trustee pursuant to Section 2.12.
"Stated Maturity," when used with respect to any Security,
means May 15, 2003.
"Subordinated Obligations" shall have the meaning set forth
in Article XII.
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"Subsidiary" with respect to any Person, means (i) a
corporation a majority of whose Capital Stock with voting power normally
entitled to vote in the election of directors is at the time, directly or
indirectly, owned by such Person, by such Person and one or more Subsidiaries
of such Person or by one or more Subsidiaries of such Person, (ii) a
partnership in which such Person or a Subsidiary of such Person is, at the
time, a general partner and owns alone or together with one or more
Subsidiaries of such Person a majority of the partnership interests, or (iii)
any other Person (other than a corporation) in which such Person, one or more
Subsidiaries of such Person, or such Person and one or more Subsidiaries of
such Person, directly or indirectly, at the date of determination thereof has
at least majority ownership interest.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code
Section Section 77aaa-77bbbb) as in effect on the date of the execution of
this Indenture, except as provided by Section 9.3 hereof pursuant to which the
term "TIA" will mean such Trust Indenture Act as amended through and including
the date specified by such Section 9.3 for purposes thereof.
"Trading Day" means each Monday, Tuesday, Wednesday, Thursday
and Friday, other than any day on which securities are not traded on the Nasdaq
National Market (or, if the Common Stock is not listed thereon, on the
principal national securities exchange on which the Common Stock is listed or
admitted to trading).
"Transfer Restricted Securities" means Securities that bear or
are required to bear the legend set forth in Section 2.6 hereof.
"Trustee" means the party named as such in this Indenture
until a successor replaces it in accordance with the provisions of this
Indenture and thereafter means such successor.
"Trust Officer" means any officer within the corporate trust
division (or any successor group) of the Trustee or any other officer of the
Trustee customarily performing functions similar to those performed by the
Persons who at that time shall be such officers, and also means, with respect
to a particular corporate trust matter, any other officer of the Trustee to
whom such trust matter is referred because of his knowledge of and familiarity
with the particular subject.
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"U.S. Government Obligations" means direct noncallable
obligations of, or noncallable obligations guaranteed by, the United States of
America for the payment of which obligation or guarantee the full faith and
credit of the United States of America is pledged.
"Voting Stock" means the combined voting power of the then
outstanding securities entitled to vote generally in elections of directors,
managers or trustees, as applicable, of the Company or any successor entity.
Section 1.2. Incorporation by Reference of TIA.
Whenever this Indenture refers to a provision of the TIA, such
provision is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following meanings:
"Commission" means the SEC.
"Indenture securities" means the Securities.
"Indenture securityholder" means a Holder or a Securityholder.
"Indenture to be qualified" means this Indenture.
"Indenture trustee" or "institutional trustee" means the
Trustee.
"Obligor" on the indenture securities means the Company and
any other obliger on the Securities.
All other TIA terms used in this Indenture that are defined by
the TIA, defined by TIA reference to another statute or defined by SEC rule and
not otherwise defined herein have the meanings assigned to them thereby.
Section 1.3. Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
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(2) an accounting term not otherwise defined has the
meaning assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and
words in the plural include the singular;
(5) provisions apply to successive events and
transactions;
(6) "herein," "hereof" and other words of similar
import refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision; and
(7) references to Sections or Articles means reference
to such Section or Article in this Indenture, unless stated
otherwise.
ARTICLE II.
THE SECURITIES
Section 2.1. Form and Dating.
The Securities and the Trustee's certificate of
authentication, in respect thereof, shall be substantially in the form of
Exhibit A hereto, which Exhibit is part of this Indenture. The Securities may
have notations, legends or endorsements required by law, stock exchange rule or
usage. The Company shall approve the form of the Securities and any notation,
legend or endorsement on them. Any such notations, legends or endorsements not
contained in the form of Security attached as Exhibit A hereto shall be
delivered in writing to the Trustee. Each Security shall be dated the date of
its authentication.
The terms and provisions contained in the forms of Securities
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. If any term or provision of a Security limits, qualifies, or
conflicts with the terms of this Indenture, the terms of this Indenture shall
control.
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Section 2.2. Execution and Authentication.
Two Officers shall sign the Security for the Company by manual
or facsimile signature. The Company's seal may be, but is not required to be,
impressed, affixed, imprinted or reproduced on the Securities and may be in
facsimile form.
If an Officer whose signature is on a Security was an Officer
at the time of such execution but no longer holds that or any office at the
time the Trustee authenticates the Security, the Security shall be valid
nevertheless and the Company shall nevertheless be bound by the terms of the
Securities and this Indenture.
A Security shall not be valid until an authorized signatory of
the Trustee manually signs the certificate of authentication on the Security
but such signature shall be conclusive evidence that the Security has been
authenticated pursuant to the terms of this Indenture.
The Trustee shall authenticate the Securities for original
issue in the aggregate principal amount of up to $115,000,000 upon a
written order of the Company. The order shall specify (i) the amount of
Securities to be authenticated and (ii) the date on which the Securities are to
be authenticated. The aggregate principal amount of Securities outstanding at
any time may not exceed $115,000,000 except as provided in Section 2.7. Upon
the written order of the Company in the form of an Officers' Certificate, the
Trustee shall authenticate Securities in substitution of Securities originally
issued to reflect any name change of the Company.
The Trustee may appoint an authenticating agent acceptable to
the Company to authenticate Securities. Unless otherwise provided in the
appointment, an authenticating agent may authenticate Securities whenever the
Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such agent. An authenticating agent has the
same rights as an Agent to deal with the Company, any Affiliate of the Company,
or any of their respective Subsidiaries, and has the same protections under the
Indenture.
Securities shall be issuable only in registered form without
coupons in denominations of $1,000 and any integral multiple thereof.
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Section 2.3. Registrar and Paying Agent.
The Company shall maintain an office or agency in NewYork, New
York, where Securities may be presented for registration of transfer or for
exchange ("Registrar") and an office or agency where Securities may be
presented for payment ("Paying Agent") and where notices and demands to or upon
the Company in respect of the Securities may be served. The Company may act as
Registrar or Paying Agent, except that, for the purposes of Articles III, VIII
and XI and as otherwise specified in the Indenture, neither the Company nor any
Affiliate of the Company shall act as Paying Agent. The Registrar shall keep a
register of the Securities and of their transfer and exchange. The Company may
have one or more co-Registrars and one or more additional Paying Agents. The
term "Paying Agent" includes any additional Paying Agent. The Company hereby
initially appoints the Trustee as Registrar and Paying Agent, and the Trustee
hereby initially agrees so to act.
The Company shall enter into an appropriate written agency
agreement with any Agent not a party to this Indenture, which agreement shall
implement the provisions of this Indenture that relate to such Agent. The
Company shall promptly notify the Trustee in writing of the name and address of
any such Agent. If the Company fails to maintain a Registrar or Paying Agent,
the Trustee shall act as such.
The Company initially appoints The Depository Trust Company
("DTC") to act as Depositary with respect to the Global Securities.
The Company initially appoints the Trustee to act as
Securities Custodian with respect to the Global Securities.
Section 2.4. Paying Agent to Hold Assets in Trust.
The Company shall require each Paying Agent other than the
Trustee to agree in writing that each Paying Agent shall hold in trust for the
benefit of Holders or the Trustee all assets held by the Paying Agent for the
payment of principal of, premium, if any, interest on or Liquidated Damages
with respect to, the Securities (whether such assets have been distributed to
it by the Company or any other obligor on the Securities), and shall notify the
Trustee in writing of any Default in making any such payment. If either of the
Company or a Subsidiary of the Company acts as Paying Agent, it shall segregate
such assets and hold them as a
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separate trust fund for the benefit of the Holders or the Trustee. The
Company at any time may require a Paying Agent to distribute all assets held by
it to the Trustee and account for any assets disbursed and the Trustee may at
any time during the continuance of any Payment Default, upon written request to
a Paying Agent, require such Paying Agent to distribute all assets held by it
to the Trustee and to account for any assets distributed. Upon distribution to
the Trustee of all assets that shall have been delivered by the Company to the
Paying Agent, the Paying Agent (if other than the Company or an Affiliate of
the Company) shall have no further liability for such assets.
Section 2.5. Securityholder Lists.
The Trustee shall preserve in as current a form as is
reasonably practicable the most recent list available to it of the names and
addresses of Holders. If the Trustee is not the Registrar, the Company shall
furnish to the Trustee on or before the third Business Day preceding each
Interest Payment Date and at such other times as the Trustee may request in
writing a list in such form and as of such date as the Trustee reasonably may
require of the names and addresses of Holders.
Section 2.6. Transfer and Exchange.
(a) Transfer and Exchange of Definitive Securities. When
Definitive Securities are presented to the Registrar or a co-Registrar with a
request:
(x) to register the transfer of such Definitive
Securities; or
(y) to exchange such Definitive Securities for an equal
principal amount of Definitive Securities of other authorized denominations;
the Registrar or co-Registrar shall register the transfer or make the exchange
as requested if its reasonable requirements for such transaction are met;
provided, however, that the Definitive Securities surrendered for transfer or
exchange:
(i) shall be duly endorsed or accompanied by a
written instrument of transfer in form reasonably satisfactory
to the Company and the Registrar or co-Registrar, duly
executed by the Holder thereof or his attorney duly authorized
in writing; and
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(ii) in the case of a Definitive Security that is a
Transfer Restricted Security, shall be accompanied by the
following additional information and documents, as applicable:
(A) if such Definitive Security is being delivered to
the Registrar by a Holder for registration in the name of such
Holder, without transfer, a certification from such Holder to
that effect (in substantially the form set forth on the
reverse of the Security); or
(B) if such Definitive Security is being transferred
to a "qualified institutional buyer" (as defined in Rule 144A
under the Securities Act) in accordance with Rule 144A under
the Securities Act, a certification to that effect (in
substantially the form set forth on the reverse of the
Security); or
(C) if such Definitive Security is being transferred
to an institutional investor that is an "accredited investor"
within the meaning of Rule 501(a)(1), (2), (3) or (7) under
the Securities Act, a certification to that effect (in
substantially the form set forth on the Security) accompanied
by a certificate in the form of Exhibit B to the Indenture to
the Trustee and if either the Trustee or the Company so
requests, an Opinion of Counsel satisfactory to the Company to
the effect that such transfer is in compliance with the
Securities Act;
(D) if such Definitive Security is being transferred
in accordance with Regulation S under the Securities Act, a
certification to that effect (in substantially the form set
forth on the Security) and if either the Trustee or the
Company so requests, an Opinion of Counsel satisfactory to the
Company to the effect that such transfer is in compliance with
the Securities Act; or
(E) if such Definitive Security is being transferred
in reliance on another exemption from the registration
requirements of the Securities Act, a certification to that
effect (in substantially the form set forth on the Security)
and if either the Trustee or the Company so requests, an
Opinion of Counsel satisfactory to the Company to the effect
that such transfer is in compliance with the Securities Act.
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(b) Restrictions on Transfer of a Definitive
Security for a Beneficial Interest in a Global Security. A Definitive Security
may not be exchanged for a beneficial interest in a Global Security, except
upon satisfaction of the requirements set forth below. Upon receipt by the
Trustee of a Definitive Security, duly endorsed or accompanied by appropriate
instruments of transfer in form reasonably satisfactory to the Company and the
Registrar or Co-Registrar, duly executed by the Holder thereof or his attorney
duly authorized in writing, together with:
(i) if such Definitive Security is a Transfer
Restricted Security, certification, substantially in the form
set forth on the Security, that such Definitive Security is
being transferred (x) to a "qualified institutional buyer" (as
defined in Rule 144A under the Securities Act) in accordance
with Rule 144A under the Securities Act or (y) in accordance
with Regulation S under the Securities Act; and
(ii) whether or not such Definitive Security is a
Transfer Restricted Security, written instructions directing
the Trustee to make, or to direct the Securities Custodian to
make, an endorsement on the Global Security to reflect an
increase in the aggregate principal amount of the Securities
represented by the applicable Global Security;
then the Trustee shall cancel such Definitive Security and cause, or direct the
Securities Custodian to cause, in accordance with the standing instructions and
procedures existing between the Depositary and the Securities Custodian, the
aggregate principal amount of Securities represented by the appropriate Global
Security to be increased accordingly. If no Global Securities are then
outstanding, the Company shall issue and the Trustee, upon receipt of the
authentication order of the Company in the form of an Officers' Certificate,
shall authenticate an appropriate new Global Security in the appropriate
principal amount.
(c) Transfer and Exchange of Global Securities.
The transfer and exchange of Global Securities or beneficial interests therein
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.
(d) Transfer of a Beneficial Interest in a Global
Security for a Definitive Security.
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(i) Upon receipt by the Trustee of written instructions
or such other form of instructions as is customary for the
Depositary from the Depositary or its nominee on behalf of any
Person having a beneficial interest in a Global Security and
upon receipt by the Trustee of a written order or such other
form of instructions as is customary for the Depositary or the
Person designated by the Depositary as having such a
beneficial interest in a Transfer Restricted Security only,
the following additional information and documents (all of
which may be submitted by facsimile):
(A) if such beneficial interest is being
transferred to the Person designated by the
Depositary as being the beneficial owner, a
certification from such person to that effect (in
substantially the form set forth on the reverse of
the Security); or
(B) if such beneficial interest is being
transferred to a "qualified institutional buyer"
(as defined in Rule 144A under the Securities Act)
in accordance with Rule 144A under the Securities
Act, a certification to that effect from the
transferor (in substantially the form set forth on
the reverse of the Security); or
(C) if such beneficial interest is being
transferred to an institutional investor that is
an "accredited investor" within the meaning of
Rule 501(a)(1), (2), (3) or (7) under the
Securities Act, a certification to that effect (in
substantially the form set forth on the reverse of
the Security) accompanied by a certificate in the
form of Exhibit B to the Indenture to the Trustee
and if either the Trustee or the Company so
requests, an Opinion of Counsel satisfactory to
the Company to the effect that such transfer is in
compliance with the Securities Act;
(D) if such beneficial interest is being
transferred in accordance with Regulation S under
the Securities Act, a certification to that effect
(in substantially the form set forth on the reverse
of the Security) and if either the Trustee or the
Company so requests, an Opinion of Counsel
satisfactory to the Company to the effect that
such transfer is in compliance with the Securities
Act; or
(E) if such beneficial interest is being
transferred in reliance on another exemption from
the registration requirements of the
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Securities Act, a certification to that effect
from the transferee or transferor (in
substantially the form set forth on the reverse of
the Security) and if either the Trustee or
the Company so requests, an Opinion of Counsel
satisfactory to the Company to the effect that
such transfer is in compliance with the Securities
Act;
then the Trustee or the Securities Custodian, at the direction of the Trustee,
will cause, in accordance with the standing instructions and procedures
existing between the Depositary and the Securities Custodian, the aggregate
principal amount of the applicable Global Security to be reduced and, following
such reduction, the Company will execute and, upon receipt of an authentication
order in the form of an Officers' Certificate, the Trustee will authenticate
and deliver to the transferee a Definitive Security.
(ii) Definitive Securities issued in exchange for
a beneficial interest in a Global Security pursuant to this
Section 2.6(d) 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. The Trustee shall make
such Definitive Securities available for delivery to the
persons in whose names such Securities are so registered.
(e) Restrictions on Transfer and Exchange of Global
Securities. Notwithstanding any other provisions of this Indenture (other than
the provisions set forth in subsection (f) of this Section 2.6), a Global
Security may not be transferred as a whole except (i) by the Depositary to a
nominee of the Depositary, (ii) by a nominee of the Depositary to the
Depositary or another nominee of the Depositary or (iii) by the Depositary or
any such nominee to a successor Depositary or a nominee of such successor
Depositary.
(f) Authentication of Definitive Securities in
Absence of Depositary. If at any time:
(i) the Depositary for the Securities notifies the
Company and the Company notifies the Trustee in writing
that the Depositary is no longer willing or able to continue
as Depositary for the Global Securities and a successor
Depositary for the Global Securities is not appointed by the
Company within 90 days after delivery of such notice; or
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(ii) the Company, in its sole discretion, notifies
the Trustee in writing that it elects to cause the issuance of
Definitive Securities under this Indenture;
then the Company will execute, and the Trustee, upon receipt of an Officers'
Certificate requesting the authentication and delivery of Definitive
Securities, will authenticate and make available for delivery Definitive
Securities, in an aggregate principal amount equal to the principal amount of
the Global Securities, in exchange for such Global Securities.
(g) Legends.
(i) Except as permitted by the following paragraph
(ii), each Security certificate evidencing the Global
Securities and the Definitive Securities (and all Securities
issued in exchange therefor or substitution thereof) shall
bear a legend in substantially the following form:
THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
AND, ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR
BENEFIT OF, U.S. PERSONS, EXCEPT AS SET FORTH BELOW. BY ITS
ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE HOLDER (1)
REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT) (A "QIB"), (B) IT IS AN
INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1),
(2), (3) OR (7) UNDER THE SECURITIES ACT) (AN "IAI")), (2) AGREES THAT
IT WILL NOT RESELL OR OTHERWISE TRANSFER THIS SECURITY EXCEPT (A) TO
THE COMPANY OR ANY OF ITS SUBSIDIARIES, (B) TO A PERSON WHOM THE
SELLER REASONABLY BELIEVES IS A QIB PURCHASING FOR ITS OWN ACCOUNT OR
FOR THE ACCOUNT OF A QIB IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144A UNDER THE SECURITIES ACT, (C) TO AN IAI THAT, PRIOR TO SUCH
TRANSFER, FURNISHES THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE TRANSFER OF THIS
SECURITY (THE FORM OF WHICH CAN BE
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OBTAINED FROM THE TRUSTEE) AND, IF THE COMPANY SO REQUESTS, AN
OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY THAT SUCH TRANSFER IS IN
COMPLIANCE WITH THE SECURITIES ACT, IT IS ACQUIRING THIS SECURITY IN
AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE
SECURITIES ACT, (D) IN AN OFFSHORE TRANSACTION MEETING THE
REQUIREMENTS OF RULE 903 OR 904 UNDER THE SECURITIES ACT, (E) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES
ACT, (F) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF
COUNSEL ACCEPTABLE TO THE COMPANY) OR (G) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH THE
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY
OTHER APPLICABLE JURISDICTION AND (3) AGREES THAT IT WILL DELIVER TO
EACH PERSON TO WHOM THIS SECURITY OR AN INTEREST HEREIN IS TRANSFERRED
A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. AS USED HEREIN,
THE TERMS "OFFSHORE TRANSACTION" AND "UNITED STATES" HAVE THE MEANINGS
GIVEN TO THEM BY RULE 902 OF REGULATION S UNDER THE SECURITIES ACT.
THE INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO
REGISTER ANY TRANSFER OF THIS SECURITY IN VIOLATION OF THE
FOREGOING."
(ii) Upon any sale or transfer of a Transfer Restricted
Security (including any Transfer Restricted Security represented by a
Global Security) pursuant to Rule 144 under the Securities Act or an
effective registration statement under the Securities Act:
(A) in the case of any Transfer Restricted Security
that is a Definitive Security or that is represented by a
Global Security, the Registrar shall permit the Holder
thereof to exchange such Transfer Restricted Security for a
Definitive Security that does not bear the legend set forth
above and rescind any restriction on the transfer of such
Transfer Restricted Security (1) in the case of a sale or
transfer pursuant to Rule 144 under the Securities Act, after
delivery of a customary Opinion of Counsel satisfactory to the
Company to the
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<PAGE> 32
effect that such transfer is in compliance with the
Securities Act or (2) in the case of a sale or transfer
pursuant to an effective registration statement under
the Securities Act; and
(B) any such Transfer Restricted Security
represented by a Global Security shall not be subject
to the provisions set forth in (i) above (such sales or
transfers being subject only to the provisions of
Section 2.6(c) hereof).
(h) Cancellation and/or Adjustment of Global
Security. At such time as all beneficial interests in a Global Security have
either been exchanged for Definitive Securities, redeemed, repurchased or
canceled, such Global Security shall be returned to or retained and canceled by
the Trustee. At any time prior to such cancellation, if any beneficial interest
in a Global Security is exchanged for Definitive Securities, redeemed,
repurchased or canceled, the principal amount of Securities represented by such
Global Security shall be reduced and an endorsement shall be made on such
Global Security, by the Trustee or the Securities Custodian, at the written
direction of the Trustee, to reflect such reduction.
(i) Obligations with respect to Transfers and
Exchanges of Definitive Securities.
(1) To permit registrations of transfers and
exchanges, the Company shall execute and the Trustee,
upon receipt of the authentication order of the Company
in the form of an Officers' Certificate, shall
authenticate Definitive Securities and Global
Securities at the Registrar's or co-Registrar's written
request.
(2) No service charge shall be made for any
registration of transfer or exchange, but the Company
may require payment of a sum sufficient to cover any
transfer tax, assessments, or similar governmental
charge payable in connection therewith (other than any
such transfer taxes, assessments, or similar
governmental charge payable upon exchanges or transfers
pursuant to Section 2.2 (fourth paragraph), 2.10, 3.7,
9.5, or 1 1.1 (final paragraph)).
(3) The Registrar or co-Registrar shi18 all
not be required to register the transfer of or exchange
of (a) any Definitive Security selected for redemption
in whole or in part pursuant to Article III,
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except the unredeemed portion of any Definitive Security being
redeemed in part, or (b) any Security for a period beginning
15 days before the mailing of a notice of an offer to
repurchase pursuant to Article XI hereof or the mailing of a
notice of redemption of Securities pursuant to Article III
hereof and ending at the close of business on the day of such
mailing.
(j) General.
The Trustee shall have no obligation or duty
to monitor, determine or inquire as to compliance with any restrictions
on transfer imposed under this Indenture or under applicable law with respect
to any transfer of any interest in any Security (including any transfers
between or among Depositary participants or beneficial owners of interests in
any Global Security) other than to require delivery of such certificates and
other documentation or evidence as are expressly required by, and to do so if
and when expressly required by the terms of, this Indenture, and to examine the
same to determine substantial compliance as to form with the express
requirements hereof.
Section 2.7. Replacement Securities.
If a mutilated Security is surrendered to the Trustee or if
the Holder of a Security claims and submits an affidavit or other evidence,
satisfactory to the Trustee, to the effect that the Security has been lost,
destroyed or wrongfully taken, the Company shall issue and the Trustee, upon
receipt of the authentication order of the Company in the form of an Officers'
Certificate, shall authenticate a replacement Security if the Trustee's
requirements are met. If required by the Trustee or the Company, such Holder
must provide an indemnity bond or other indemnity, sufficient in the
judgment of both the Company and the Trustee, to protect the Company, the
Trustee or any Agent from any loss which any of them may suffer if a Security
is replaced. The Company may charge such Holder for its reasonable,
out-of-pocket expenses in replacing a Security.
In case any such mutilated, destroyed, lost or stolen Security
has become or is about to become due and payable, the Company in its
discretion, but subject to any conversion rights, may, instead of issuing a new
Security, pay such Security, upon satisfaction of the conditions set forth in
the preceding paragraph.
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Every new Security issued pursuant to this Section 2.7 in lieu
of any mutilated, destroyed, lost or stolen Security shall constitute an
original additional contractual obligation of the Company, whether or not the
mutilated, destroyed, lost or stolen Security shall be at any time enforceable
by anyone, and such new Security shall be entitled to all the benefits of this
Indenture equally and proportionately with any and all other Securities duly
issued hereunder.
The provisions of this Section 2.7 are exclusive and shall
preclude (to the extent lawful) all other rights and remedies of any Holder
with respect to the replacement or payment of mutilated, destroyed, lost or
stolen Securities.
Section 2.8. Outstanding Securities.
Securities outstanding at any time are all the Securities that
have been authenticated by the Trustee (including any Security represented by a
Global Security) except those canceled by it, those delivered to it for
cancellation, those reductions in the interest in a Global Security effected by
the Trustee hereunder and those described in this Section 2.8 as not
outstanding. A Security does not cease to be outstanding because the Company
or an Affiliate of the Company holds the Security, except as provided in
Section 2.9.
If a Security is replaced or paid pursuant to Section 2.7
(other than a mutilated Security surrendered for replacement), the replaced or
paid Security ceases to be outstanding unless the Trustee receives proof
satisfactory to it that the replaced or paid Security is held by a bona fide
purchaser. A mutilated Security ceases to be outstanding upon surrender of
such Security and replacement thereof pursuant to Section 2.7.
If on a Redemption Date the Paying Agent (other than the
Company or an Affiliate of the Company) holds Cash or U.S. Government
Obligations sufficient to pay all of the principal and interest due on
the Securities payable on that date in accordance with Section 3.6 hereof and
payment of the Securities called for redemption is not otherwise prohibited
pursuant to Article XII hereof or otherwise, then on and after that date, such
Securities cease to be outstanding and interest on them ceases to accrue.
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Section 2.9. Treasury Securities.
In determining whether the Holders of the required principal
amount of Securities have concurred in any direction, amendment, supplement,
waiver or consent, Securities owned by the Company or an Affiliate of the
Company (including any Person that would become an Affiliate of the Company (or
its successor) as a consequence of the event or series of events that otherwise
would be treated as a Change of Control for purposes of the Indenture) shall be
disregarded, except that, for the purposes of determining whether the Trustee
shall be protected in relying on any such direction, amendment, supplement,
waiver or consent, only Securities that a Trust Officer of the Trustee actually
knows are so owned shall be disregarded.
Section 2.10. Temporary Securities.
Until Definitive Securities are ready for delivery, the
Company may prepare and the Trustee shall authenticate temporary Securities.
Temporary Securities shall be substantially in the form of Definitive
Securities but may have variations that the Company reasonably and in good
faith considers appropriate for temporary Securities. Without unreasonable
delay, the Company shall prepare and the Trustee shall authenticate Definitive
Securities in exchange for temporary Securities. Until so exchanged, the
temporary Securities shall in all respects be entitled to the same benefits
under this Indenture as permanent Securities authenticated and delivered
hereunder.
Section 2.11. Cancellation.
The Company at any time may deliver Securities to the Trustee
for cancellation. The Registrar and the Paying Agent shall forward to the
Trustee any Securities surrendered to them for transfer, exchange or payment.
The Trustee, or at the direction of the Trustee, the Registrar or the Paying
Agent (other than the Company or an Affiliate of the Company), and no one else,
shall cancel and return all Securities surrendered for transfer, exchange,
payment or cancellation to the Company. Subject to Section 2.7, the Company
may not issue new Securities to replace Securities that have been paid or
delivered to the Trustee for cancellation. No Securities shall be
authenticated in lieu of or in exchange for any Securities canceled as provided
in this Section 2.11, except as expressly permitted in the form of Securities
and as permitted by this Indenture.
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Section 2.12. Defaulted Interest.
Interest on any Security which is payable, and is punctually
paid or duly provided for, on any Interest Payment Date shall be paid to the
person in whose name that Security (or one or more predecessor Securities) is
registered at the close of business on the Record Date for such interest.
Any interest on any Security which is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date plus, to the
extent lawful, any interest payable on the defaulted interest (collectively,
herein called "Defaulted Interest") shall forthwith cease to be payable to the
registered holder on the relevant Record Date, and such Defaulted Interest
shall be paid by the Company, at its election in each case, as provided in
clause (1) or (2) below:
(1) The Company may elect to make payment of any
Defaulted Interest to the persons in whose names the
Securities (or their respective predecessor Securities) 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
proposed to be paid on each Security and the date of the
proposed payment, and at the same time the Company shall
deposit with the Trustee an amount of Cash equal to the
aggregate amount proposed 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 Cash when deposited to be held in trust for the
benefit of the persons entitled to such Defaulted Interest as
provided in this clause (1). Thereupon the Trustee shall fix
a special record date for the payment of such Defaulted
Interest which shall be not more than 15 Business Days and not
less than 10 Business Days prior to the date of the proposed
payment and not less than 10 Business Days after the receipt
by the Trustee of the notice of the proposed payment ("Special
Record Date"). The Trustee shall promptly notify the Company
in writing 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
Holder at his address as it appears in the Security register
not less than 10 Business
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Days prior to such Special Record Date. Notice of the
proposed payment of such Defaulted Interest and the Special
Record Date therefor having been mailed as aforesaid, such
Defaulted Interest shall be paid to the persons in whose names
the Securities (or their respective predecessor Securities)
are registered 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 on which the
Securities may be listed, and upon such notice as may be
required by such exchange, if, after written notice given by
the Company to the Trustee of the proposed payment pursuant to
this clause, such manner shall be deemed practicable by the
Trustee.
Subject to the foregoing provisions of this Section 2.12, each
Security delivered under this Indenture upon transfer of or in exchange for or
in lieu of any other Security shall carry the rights to interest accrued and
unpaid, and to accrue, which were carried by such other Security.
Notwithstanding the foregoing, any interest which is paid
prior to the expiration of the grace period provided in Section 6.1 shall be
paid to the Holders of the Securities as of the regular Record Date for such
Interest Payment Date for which interest has not been paid.
Section 2.13. CUSIP Numbers.
The Company in issuing the Securities 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 Securities or as contained in any notice of a
redemption and that reliance may be placed only on the other identification
numbers printed on the Securities, and any such redemption shall not be
affected by any defect in or omission of such numbers. The Company will
promptly notify the Trustee of any change in the "CUSIP" numbers.
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ARTICLE III.
REDEMPTION
Section 3.1. Right of Redemption.
Redemption of Securities, as permitted by any provision of
this Indenture, shall be made in accordance with Paragraph 5 of the Securities
and this Article III. The Company will not have the right to redeem any
Securities prior to May 15, 2001. On or after May 15, 2001, the Company will
have the right to redeem all or any part of the Securities at the Redemption
Prices specified in Paragraph 5 therein under the caption "Redemption," in each
case including accrued and unpaid interest and Liquidated Damages, if any, to,
but excluding, the Redemption Date.
Section 3.2. Notices to Trustee.
If the Company elects to redeem Securities pursuant to
Paragraph 5 of the Securities, it shall notify the Trustee in writing of the
Redemption Date, the principal amount of Securities to be redeemed, the
Redemption Price and whether it wants the Trustee, on behalf of the Company, to
give notice of redemption to the Holders.
If the Company elects to reduce the principal amount of
Securities to be redeemed pursuant to Paragraph 5 of the Securities by
crediting against any such redemption Securities it has not previously
delivered to the Trustee for cancellation, it shall so notify the Trustee in
writing of the amount of the reduction and deliver such Securities with such
notice.
The Company shall give each notice to the Trustee provided for
in this Section 3.2 at least 45 days but not more than 60 days before the
Redemption Date (unless a shorter notice period shall be satisfactory to the
Trustee). Any such notice to the Trustee may be canceled at any time prior to
notice of such redemption being mailed to any Holder and shall thereby be void
and of no effect.
Section 3.3. Selection of Securities to Be Redeemed.
If less than all of the Securities are to be redeemed pursuant
to Paragraph 5 thereof, the Trustee shall select the Securities to be
redeemed on a pro rata basis, by lot or by such other method as the Trustee
shall determine to be fair and appropriate and in such manner as complies with
any applicable depositary, legal and stock exchange or automated quotation
system requirements.
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The Trustee shall make the selection from the Securities
outstanding and not previously called for redemption and shall promptly notify
the Company in writing of the Securities selected for redemption and, in the
case of any Security selected for partial redemption, the principal amount
thereof to be redeemed. Securities in denominations of $1,000 may be redeemed
only in whole. The Trustee may select for redemption portions (equal to $1,000
or any integral multiple thereof) of the principal of Securities that have
denominations larger than $1,000. Provisions of this Indenture that apply to
Securities called for redemption also apply to portions of Securities called
for redemption.
Section 3.4. Notice of Redemption.
At least 30 days but not more than 60 days before a Redemption
Date, the Company shall mail a notice of redemption by first-class mail,
postage prepaid, to the Trustee and each Holder whose Securities are to be
redeemed at such Holder's address as it appears on the security register
maintained by the Registrar. At the Company's request, the Trustee shall give
the notice of redemption in the Company's name and at the Company's expense.
Each notice of redemption shall identify the Securities to be redeemed and
shall state:
(1) the Redemption Date, and that the Securities
called for redemption may not be converted after the Business
Day immediately prior to the Redemption Date;
(2) the Redemption Price, including the amount
of accrued and unpaid interest and Liquidated Damages, if any,
to be paid upon such redemption;
(3) the name, address and telephone number of the
Paying Agent;
(4) that Securities called for redemption must be
surrendered to the Paying Agent at the address specified in
such notice to collect the Redemption Price;
(5) that, unless (a) the Company defaults in its
obligation to deposit Cash with the Paying Agent in
accordance with Section 3.6 hereof or (b) such redemption
payment is prohibited pursuant to Article XII hereof or
otherwise, interest on, and Liquidated Damages
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with respect to, Securities called for redemption ceases to
accrue on and after the Redemption Date and the only remaining
right of the Holders of such Securities is to receive payment
of the Redemption Price, including accrued and unpaid interest
and Liquidated Damages, if any, to, but excluding the
Redemption Date, upon surrender to the Paying Agent of the
Securities called for redemption and to be redeemed;
(6) if any Security is being redeemed in part,
the portion of the principal amount, equal to $1,000 or
any integral multiple thereof, of such Security to be redeemed
and that, on or after the Redemption Date, upon surrender of
such Security, a new Security or Securities in aggregate
principal amount equal to the unredeemed portion thereof will
be issued;
(7) if less than all the Securities are to be
redeemed, the identification of the particular Securities (or
portion thereof) to be redeemed, as well as the aggregate
principal amount of such Securities to be redeemed and the
aggregate principal amount of Securities to be outstanding
after such partial redemption;
(8) the CUSIP number of the Securities to be
redeemed; and
(9) that the notice is being sent pursuant to this
Section 3.4 and pursuant to the redemption provisions of
Paragraph 5 of the Securities.
Section 3.5. Effect of Notice of Redemption.
Once notice of redemption is mailed in accordance with Section
3.4, Securities called for redemption become due and payable on the Redemption
Date and at the Redemption Price, including accrued and unpaid interest and
Liquidated Damages, if any, to, but excluding, the Redemption Date. Upon
surrender to the Trustee or Paying Agent, such Securities called for redemption
shall be paid at the Redemption Price, including accrued and unpaid interest
and Liquidated Damages, if any, to, but excluding, the Redemption Date;
provided that if the Redemption Date is after a regular Record Date and on or
prior to the corresponding Interest Payment Date, the accrued interest
and Liquidated Damages, if any, shall be payable to the
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Holder of the redeemed Securities registered on the relevant Record
Date; and provided, further, that if a Redemption Date is a Legal Holiday,
payment shall be made on the next succeeding Business Day and no interest shall
accrue for the period from such Redemption Date to such succeeding Business
Day.
Section 3.6. Deposit of Redemption Price.
Prior to 10:00 a.m. New York time on the Redemption Date, the
Company shall deposit with the Paying Agent (other than the Company or an
Affiliate of the Company) Cash sufficient to pay the Redemption Price of,
including accrued and unpaid interest on, and Liquidated Damages, if any, with
respect to, all Securities to be redeemed on such Redemption Date (other than
Securities or portions thereof called for redemption on that date that have
been delivered by the Company to the Trustee for cancellation). The Paying
Agent shall promptly return to the Company any Cash so deposited which is not
required for that purpose upon the written request of the Company.
If the Company complies with the preceding paragraph and the
other provisions of this Article III and payment of the Securities called for
redemption is not prohibited under Article XII or otherwise, interest on the
Securities to be redeemed will cease to accrue on and after the applicable
Redemption Date, whether or not such Securities are presented for payment.
Notwithstanding anything herein to the contrary, if any Security surrendered
for redemption in the manner provided in the Securities shall not be so paid
upon surrender for redemption because of the failure of the Company to comply
with the preceding paragraph, interest shall continue to accrue and be paid
from the Redemption Date until such payment is made on the unpaid principal,
and, to the extent lawful, on any interest not paid on such unpaid principal,
in each case at the rate and in the manner provided in Section 4.1 hereof and
the Security.
Section 3.7. Securities Redeemed in Part.
Upon surrender of a Security that is to be redeemed in part,
the Company shall execute and the Trustee, upon receipt of a written order of
the Company in the form of an Officers' Certificate, shall thereafter
authenticate and make available for delivery to the Holder, without service
charge to the Holder, a new Security or Securities equal in principal amount to
the unredeemed portion of the Security surrendered.
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ARTICLE IV.
COVENANTS
Section 4.1 Payment of Securities.
The Company shall pay the principal of, interest on, and
Liquidated Damages with respect to, the Securities on the dates and in the
manner provided in this Indenture and the Securities, as applicable. An
installment of principal of, interest on, or Liquidated Damages with respect
to, the Securities shall be considered paid on the date it is due if the
Trustee or Paying Agent (other than the Company or an Affiliate of the Company)
holds for the benefit of the Holders, on or before 10:00 a.m. New York time on
that date, Cash deposited and designated for and sufficient to pay the
installment.
The Company shall pay interest on overdue principal and on
overdue installments of interest at the rate specified in the Securities
compounded semi-annually, to the extent lawful.
Section 4.2. Maintenance of Office or Agency.
The Company shall maintain in New York, New York, an office or
agency where Securities may be presented or surrendered for payment, where
Securities may be surrendered for registration of transfer or exchange and for
conversion and where notices and demands to or upon the Company in respect of
the Securities and this Indenture may be served. The Company shall give prompt
written notice to the Trustee of the location, and any change in the location,
of such office or agency. If at any time the Company shall fail to maintain any
such required office or agency or shall fail to furnish the Trustee with the
address thereof, such presentations, surrenders, notices and demands may be
made or served at the address of the Trustee set forth in Section 14.2.
The Company may also from time to time designate one or more
other offices or agencies where the Securities may be presented or surrendered
for any or all such purposes and may from time to time rescind such
designations; provided, however, that no such designation or rescission shall
in any manner relieve the Company of its obligation to maintain an office or
agency in New York, New York, for such purposes. The Company shall give prior
written notice to the Trustee of any such designation or rescission and of any
change in the location of any such other
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office or agency. The Company hereby initially designates the corporate trust
office of the Trustee in New York, New York, as such office.
Section 4.3. Corporate Existence.
Subject to Article V, the Company shall do or cause to be done
all things necessary to preserve and keep in full force and effect its
corporate existence in accordance with its organizational documents and the
rights (charter and statutory) and corporate franchises of the Company;
provided, however, that the Company shall not be required to preserve, with
respect to itself, any right or franchise, if (a) the Company shall, in good
faith, reasonably determine that the preservation thereof is no longer
desirable in the conduct of the business of such entity and (b) the loss
thereof is not disadvantageous in any material respect to the Holders.
Section 4.4. Payment of Taxes and Other Claims.
Except with respect to immaterial items, the Company shall,
and shall cause each of its Subsidiaries to, pay or discharge or cause to be
paid or discharged, before the same shall become delinquent, (i) all taxes,
assessments and governmental charges (including withholding taxes and any
penalties, interest and additions to taxes) levied or imposed upon the Company
or any of its Subsidiaries or any of their respective properties and assets and
(ii) all lawful claims, whether for labor, materials, supplies, services or
anything else, which have become due and payable and which by law have or may
become a Lien upon the property and assets of the Company or any of its
Subsidiaries; provided, however, that neither the Company nor any Subsidiary
shall be required to pay or discharge or cause to be paid or discharged any
such tax, assessment, charge or claim whose amount, applicability or validity
is being contested in good faith by appropriate proceedings and for which
disputed amounts adequate reserves have been established in accordance with
GAAP.
Section 4.5. Maintenance of Properties and Insurance.
The Company shall cause all material properties used or useful
to the conduct of its business and the business of each of its Subsidiaries to
be maintained and kept in good condition, repair and working order (reasonable
wear and tear excepted) and supplied with all necessary equipment and shall
cause to be made all necessary repairs, renewals and replacements thereof, all
as in its reasonable judgment may be necessary, so that the business carried on
in connection therewith may
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be properly conducted at all times; provided, however, that nothing in this
Section 4.5 shall prevent the Company or any Subsidiary from discontinuing any
operation or maintenance of any of such properties, or disposing of any of
them, if such discontinuance or disposal is (a), in the judgment of the
Company, desirable in the conduct of the business of such entity and (b) would
not have a material adverse effect on the financial condition of the Company or
on the Company's ability to perform its obligations hereunder or under the
Securities.
The Company shall provide, or cause to be provided, for itself
and each of its Subsidiaries, insurance (including appropriate self-insurance)
against loss or damage of the kinds that, in the reasonable, good faith opinion
of the Company is adequate and appropriate for the conduct of the business of
the Company and such Subsidiaries in a prudent manner, with (except for
self-insurance) reputable insurers or with the government of the United States
of America or an agency or instrumentality thereof, in such amounts, with such
deductibles, and by such methods as shall be customary, in the reasonable, good
faith opinion of the Company and adequate and appropriate for the conduct of
the business of the Company and such Subsidiaries in a prudent manner for
entities similarly situated in the industry, unless failure to provide such
insurance (together with all other such failures) would not have a material
adverse effect on the financial condition or results of operations of the
Company or such Subsidiary.
Section 4.6. Compliance Certificate; Notice of Default.
(a) The Company shall deliver to a Trust Officer of the
Trustee within 120 days after the end of its fiscal year an Officers'
Certificate complying with Section 314(a)(4) of the TIA and stating that a
review of its activities and the activities of its Subsidiaries during the
preceding fiscal year has been made under the supervision of the signing
Officers with a view to determining, without regard to notice periods or
periods of grace, whether the Company has kept, observed, performed and
fulfilled its obligations under this Indenture and further stating, as to each
such Officer signing such certificate, whether or not the signer knows of any
failure by the Company or any Subsidiary of the Company to comply with any
conditions or covenants in this Indenture and, if such signor does know of such
a failure to comply, the certificate shall describe such failure with
reasonable particularity. The Officers' Certificate shall also notify the
Trustee should the relevant fiscal year end on any date other than the current
fiscal year end date.
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(b) The Company shall, so long as any of the Securities are
outstanding, deliver to a Trust Officer of the Trustee, promptly upon becoming
aware of any Default, Event of Default or fact which would prohibit the making
of any payment to or by the Trustee in respect of the Securities, an Officers'
Certificate specifying such Default, Event of Default or fact and what action
the Company is taking or proposes to take with respect thereto. The Trustee
shall not be deemed to have knowledge of any Default, any Event of Default or
any such fact unless one of its Trust Officers receives written notice thereof
from the Company or any of the Holders.
Section 4.7. Reports.
Whether or not the Company is subject to the reporting
requirements of Section 13 or 15(d) of the Exchange Act, the Company shall
deliver to the Trustee and to each Holder, as their names and addresses appear
on the security register maintained by the Registrar, within 15 days after it
is or would have been required to file such with the SEC, annual and quarterly
consolidated financial statements substantially equivalent to financial
statements that would have been included in reports filed with the SEC if the
Company were subject to the requirements of Section 13 or 15(d) of the Exchange
Act, including, with respect to annual information only, a report thereon by
the Company's certified independent public accountants as such would be
required in such reports to the SEC and, in each case, together with a
management's discussion and analysis of financial condition and results of
operations which would be so required.
Delivery of such reports, information and documents to the
Trustee is for informational purposes only and the Trustee's receipt of such
shall not constitute constructive notice of any information contained therein
or determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
Section 4.8. Limitation on Status as Investment Company.
Neither the Company nor any of its Subsidiaries shall become
an "investment company" (as that term is defined in the Investment Company Act
of 1940, as amended), or otherwise become subject to regulation under the
Investment Company Act.
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Section 4.9. Waiver of Stay, Extension or Usury Laws.
The Company covenants (to the extent that it may lawfully do
so) that it will not at any time insist upon, plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay or extension law
or any usury law or other law which would prohibit or forgive the Company from
paying all or any portion of the principal of, premium of, interest on, or
Liquidated Damages with respect to, the Securities 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; and (to the extent that it
may lawfully do so) the Company hereby expressly waives all benefit or
advantage of any such law, and covenants that it will not hinder, delay or
impede the execution of any power herein granted to the Trustee, but will
suffer and permit the execution of every such power as though no such law had
been enacted.
Section 4.10. Rule 144A Information Requirement.
If at any time there are Transfer Restricted Securities
outstanding and the Company shall cease to have a class of equity securities
registered under Section 12(g) of the Exchange Act or shall cease to be subject
to Section 15(d) of the Exchange Act, the Company shall furnish, within a
reasonable period of time, to the Holders or beneficial holders of the
Securities or the underlying Common Stock and prospective purchasers of
Securities or the underlying Common Stock designated by the Holders of Transfer
Restricted Securities, upon their written request, the information required to
be delivered pursuant to Rule 144A(d)(4) under the Securities Act until such
time as the Shelf Registration Statement has become effective under the
Securities Act. The Company shall also furnish such information during the
pendency of any suspension of effectiveness of the Shelf Registration
Statement.
ARTICLE V.
SUCCESSOR CORPORATION
Section 5.1. Limitation on Merger, Sale or Consolidation.
(a) The Company shall not, directly or indirectly, consolidate
with or merge with or into another Person or sell, lease, convey or transfer
all or substantially all of its assets (computed on a consolidated basis),
whether in a single transaction or a series of related transactions, to another
Person or group of affiliated
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Persons (other than to its wholly owned Subsidiaries), unless (i)
either (a) in the case of a merger or consolidation, the Company is the
surviving entity or (b) the resulting, surviving or transferee entity is a
corporation organized under the laws of the United States, any state thereof or
the District of Columbia and expressly assumes by supplemental indenture all of
the obligations of the Company in connection with the Securities and the
Indenture; (ii) no Default or Event of Default shall exist or shall occur
immediately before or after giving effect to such transaction; and (iii) the
Company has delivered to the Trustee an Officers' Certificate and an Opinion of
Counsel, each stating that such consolidation, merger or transfer and, if a
supplemental indenture is required, such supplemental indenture comply with the
Indenture and that all conditions precedent relating to such transactions have
been satisfied.
(b) For purposes of clause (a) of this Section 5.1 and Section
13.6, the sale, lease, conveyance, assignment, transfer, or other disposition
of all or substantially all of the properties and assets of one or more
Subsidiaries of the Company, which properties and assets, if held by the
Company instead of such Subsidiaries, would constitute all or substantially all
of the properties and assets of the Company on a consolidated basis, shall be
deemed to be the transfer of all or substantially all of the properties and
assets of the Company, unless such disposition is to the Company.
Section 5.2. Successor Corporation Substituted.
Upon any permitted consolidation or merger or any permitted
sale, lease, conveyance or transfer of all or substantially all of the assets
of the Company in accordance with the foregoing, the successor corporation
formed by such consolidation or into which the Company is merged or to which
such sale, lease, conveyance or transfer is made, shall succeed to, and be
substituted for, and may exercise every right and power of, the Company under
the Indenture with the same effect as if such successor corporation had been
named therein as the Company, and when a successor corporation duly assumes all
of the obligations of the Company pursuant hereto and pursuant to the
Securities, the predecessor shall be released from such obligations (except
with respect to any obligations that arise from or as a result of such
transaction).
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ARTICLE VI.
EVENTS OF DEFAULT AND REMEDIES
Section 6.1. Events of Default.
"Event of Default," wherever used herein, means any one of the
following events (whatever the reason for such Event of Default and whether it
shall be caused voluntarily or involuntarily or effected, without limitation,
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):
(1) failure to pay any installment of
interest on the Securities as and when the same becomes due
and payable, or to perform any conversion of the Securities
required under this Indenture, and the continuance of such
failure for a period of 30 days, whether or not such payment
is prohibited by Article XII;
(2) failure to pay all or any part of the
principal of, or premium, if any on the Securities when
and as the same become due and payable at maturity,
redemption, by acceleration or otherwise, including, without
limitation, failure to pay all or any part of the Repurchase
Price on the Repurchase Date in accordance with Article XI,
whether or not such payment is prohibited by Article XII;
(3) failure by the Company to observe or perform
any covenant or agreement contained in the Securities
or this Indenture (other than a default in the performance of
any covenant or agreement which is specifically dealt with
elsewhere in this Section 6.1), and continuance of such
failure for a period of 60 days after there has been given, by
registered or certified mail, to the Company by the Trustee,
or to the Company and the Trustee by Holders of at least 25%
in aggregate principal amount of the then outstanding
Securities, a written notice;
(4) failure by the Company or any Significant
Subsidiary to pay principal, premium or interest when
due (after giving effect to any applicable period of grace) at
maturity of any Indebtedness (other
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than non-recourse obligations), in an amount in excess
of $10,000,000 and the continuance of such failure for 30 days
after there has been given, by registered or certified mail,
to the Company by the Trustee or to the Company and the
Trustee by the Holders of at least 25% in aggregate principal
amount of the then outstanding Securities, a written notice;
(5) default by the Company or any Significant
Subsidiary with respect to any Indebtedness (other than
non-recourse obligations), which default results in the
acceleration of Indebtedness having a principal amount in
excess of $10,000,000 without such Indebtedness having been
discharged or such acceleration having been rescinded or
annulled for 30 days after there has been given, by registered
or certified mail, to the Company by the Trustee or to the
Company and the Trustee by the Holders of at least 25%
in aggregate principal amount of the then outstanding
Securities, a written notice;
(6) a decree, judgment, or order by a court of
competent jurisdiction shall have been entered
adjudging the Company or any of its Significant Subsidiaries
as bankrupt or insolvent, or approving as properly filed a
petition seeking reorganization of the Company or any of its
Significant Subsidiaries under any bankruptcy or similar law,
and such decree or order shall have continued undischarged and
unstayed for a period of 60 days; or a decree or order of a
court of competent jurisdiction over the appointment of a
receiver, liquidator, trustee, or assignee in bankruptcy or
insolvency of the Company, any of its Significant
Subsidiaries, or of the property of any such Person, or for
the winding up or liquidation of the affairs of any such
Person, shall have been entered, and such decree, judgment, or
order shall have remained in force undischarged and unstayed
for a period of 60 days;
(7) the Company or any of its Significant
Subsidiaries shall institute proceedings to be
adjudicated a voluntary bankrupt, or shall consent to the
filing of a bankruptcy proceeding against it, or shall file a
petition or answer or consent seeking reorganization under any
bankruptcy or similar law or similar statute, or shall consent
to the filing of any such petition, or shall consent to the
appointment of a Custodian, receiver, liquidator, trustee, or
assignee in bankruptcy or
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insolvency of it or any of its assets or property, or
shall make a general assignment for the benefit of creditors,
or shall admit in writing its inability to pay its debts
generally as they become due, or shall, within the meaning of
any Bankruptcy Law, become insolvent, fail generally to pay
its debts as they become due, or take any corporate action in
furtherance of or to facilitate, conditionally or otherwise,
any of the foregoing; or
(8) final unsatisfied judgments not covered by
insurance of, or the execution of a writ against the
Company or any of its Significant Subsidiaries, aggregating in
excess of $10,000,000 at any one time shall have been rendered
against the Company or any of its Significant Subsidiaries and
not have been stayed, bonded or discharged for a period
(during which execution shall not be effectively stayed) of 60
days after the right to appeal such judgment has expired (or,
in the case of any such final judgment which provides for
payment over time, which shall so remain unstayed, unhanded or
undischarged beyond any applicable payment date provided
therein).
Notwithstanding the 60-day period and notice requirement
contained in Section 6. 1(3) above, with respect to a default under Article XI
the 60-day period referred to in Section 6.1(3) shall be deemed to have begun
as of the date the Change of Control notice is required to be sent in the event
that the Company has not complied with the provisions of Section 11.1 and the
Trustee or Holders of at least 25% in principal amount of the outstanding
Securities thereafter give the Notice of Default referred to in Section 6.1(3)
to the Company and, if applicable, the Trustee; provided, however, that if the
breach or default is a result of a default in the payment when due of the
Repurchase Price on the Repurchase Date, such Event of Default shall be deemed,
for purposes of this Section 6.1, to arise no later than on the final
Repurchase Date.
Section 6.2. Acceleration of Maturity Rescission and Annulment.
If an Event of Default (other than an Event of Default
specified in Section 6.1(6) or (7) relating to the Company) occurs and is
continuing, then in every such case, unless the principal of all of the
Securities shall have already become due and payable, either the Trustee or the
Holders of at least 25% in aggregate principal amount of then outstanding
Securities, by a notice in writing to the Company (and to the Trustee if given
by Holders) (an "Acceleration Notice"), may declare all princi-
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pal, premium, if any, accrued interest and Liquidated Damages, if any, of
the Securities (or the Repurchase Price if the Event of Default includes
failure to pay the Repurchase Price, determined as set forth below), with
respect thereto, to be due and payable immediately. If an Event of Default
specified in Section 6.1(6) or (7) relating to the Company occurs, all
principal, premium, if any, accrued interest and Liquidated Damages on or with
respect thereto will be immediately due and payable on all outstanding
Securities without any declaration or other act on the part of Trustee or the
Holders.
At any time after such a declaration of acceleration has been
made and before a judgment or decree for payment of the money due has been
obtained by the Trustee as hereinafter provided in this Article VI, the Holders
of no less than a majority in aggregate principal amount of then outstanding
Securities, by written notice to the Company and the Trustee, may rescind, on
behalf of all Holders, any such declaration of acceleration if:
(1) the Company has paid or deposited with the
Trustee Cash sufficient to pay
(A) all overdue interest on, and overdue
Liquidated Damages with respect to, all Securities,
(B) the principal of (and premium, if any,
applicable to) any Securities which would then be due
otherwise than by such declaration of acceleration, and
interest thereon at the rate borne by the Securities,
(C) to the extent that payment of such
interest is lawful, interest upon overdue interest and
Liquidated Damages at the rate borne by the Securities,
(D) all sums paid or advanced by the
Trustee hereunder and the compensation, expenses,
disbursements and advances of the Trustee, its agents and
counsel, and
(2) all Events of Default, other than the
non-payment of the principal of, premium, if any, interest on
and Liquidated Damages with respect to Securities that have
become due solely by such declaration of acceleration, have
been cured or waived as provided in
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Section 6.12, including, if applicable, any Event of
Default relating to the covenants contained in Section 11.1.
Notwithstanding the previous sentence of this Section 6.2, no waiver shall be
effective against any Holder for any Event of Default or event which with
notice or lapse of time or both would be an Event of Default with respect to
any covenant or provision which cannot be modified or amended without the
consent of the Holder of each outstanding Security affected thereby, unless all
such affected Holders agree, in writing, to waive such Event of Default or
other event. No such waiver shall cure or waive any subsequent Default or
Event of Default or impair any right consequent thereon.
Section 6.3. Collection of Indebtedness and Suits for Enforcement by
Trustee.
The Company covenants that if an Event of Default in payment
of principal, premium, interest or Liquidated Damages specified in clause (1)
or (2) of Section 6.1 occurs and is continuing, the Company shall, upon demand
of the Trustee, pay to it, for the benefit of the Holders of such
Securities, the whole amount then due and payable on such Securities for
principal, premium (if any), interest, Liquidated Damages and, to the extent
that payment of such interest shall be legally enforceable, interest on any
overdue principal (and premium, if any), Liquidated Damages and on any overdue
interest, at the rate borne by the Securities, and, in addition thereto, such
further amount as shall be sufficient to cover the costs, fees and expenses of
collection, including compensation to, and expenses, disbursements and advances
of the Trustee, its agents and counsel.
If the Company fails to pay such amounts forthwith upon such
demand, the Trustee, in its own name and as trustee of an express trust in
favor of the Holders, may institute a judicial proceeding for the collection of
the sums so due and unpaid, may prosecute such proceeding to judgment or final
decree and may enforce the same against the Company or any other obligor upon
the Securities and collect the moneys adjudged or decreed to be payable in the
manner provided by law out of the property of the Company or any other obligor
upon the Securities, wherever situated.
If an Event of Default occurs and is continuing, the Trustee
may in its discretion proceed to protect and enforce its rights and the rights
of the Holders by such appropriate judicial proceedings as the Trustee shall
deem most effective to protect and enforce any such rights, whether for the
specific enforcement of any
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covenant or agreement in this Indenture or in aid of the exercise of
any power granted herein, or to enforce any other proper remedy.
Section 6.4. Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, composition
or other judicial proceeding relative to the Company or any other obligor upon
the Securities or the property of the Company or of such other obligor or their
creditors, the Trustee (which term as used in this Section shall include any
predecessor Trustee) (irrespective of whether the principal of the Securities
shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any demand on
the Company for the payment of overdue principal, interest or Liquidated
Damages) shall be entitled and empowered, by intervention in such proceeding or
otherwise to take any and all actions under the TIA, including
(1) to file and prove a claim for the
whole amount of principal (and premium, if any), interest and
Liquidated Damages owing and unpaid in respect of the
Securities and to file such other papers or documents as may
be necessary or advisable in order to have the claims of the
Trustee (including any claim under Section 7.7 for the
compensation, fees, expenses, disbursements and advances of
the Trustee, its agent and counsel) and of the Holders allowed
in such judicial proceeding, and
(2) To collect and receive any moneys or
other property payable or deliverable on any such claims and
to distribute the same in accordance with Section 6.6;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the Holders,
to pay to the Trustee any amount due it for the compensation, expenses, fees,
disbursements and advances of the Trustee, its agents and counsel, and any
other amounts due the Trustee under Section 7.7. To the extent that the
payment of such compensation, expenses, fees, disbursements and advances of
Trustee, its agents and counsel and any other amounts due to the Trustee under
Section 7.7 hereof out of the estate in any such judicial proceeding shall be
denied for any reason, payment of the same shall be secured by a perfected
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first priority security interest in and lien on, and shall be paid out of, any
and all distributions, dividends, money securities and other properties that
the Holders may be entitled to receive in such proceeding whether in
liquidation or under any plan of reorganization or arrangement or otherwise,
and any such security interest and lien in favor of any predecessor Trustee
shall be senior to the security interest and lien in favor of the current
Trustee.
Nothing herein contained shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any Holder
any plan of reorganization, arrangement, adjustment, or composition affecting
the Securities or the rights of any Holder thereof or to authorize the Trustee
to vote in respect of the claim of any Holder in any such proceeding.
Section 6.5. Trustee May Enforce Claims Without Possession of Securities.
All rights of action and claims under this Indenture or the
Securities may be prosecuted and enforced by the Trustee without the possession
of any of the Securities or the production thereof in any proceeding
relating thereto, and any such proceeding instituted by the Trustee shall be
brought in its own name as trustee of an express trust in favor of the Holders,
and any recovery of judgment shall, after provision for the payment of
compensation to, and expenses, fees, disbursements and advances of the Trustee,
its agents and counsel, be for the ratable benefit of the Holders of the
Securities in respect of which such judgment has been recovered.
Section 6.6. Priorities.
Any money collected by the Trustee pursuant to this Article VI
shall be applied in the following order, at the date or dates fixed by the
Trustee and, in case of the distribution of such money on account of principal,
premium (if any), interest or Liquidated Damages, upon presentation of the
Securities and the notation thereon of the payment if only partially paid and
upon surrender thereof if fully paid:
FIRST: To the Trustee (including any predecessor Trustee) in
payment of all amounts due pursuant to Section 7.7;
SECOND: To the holders of Senior Indebtedness of the Company
to the extent provided in Article XII;
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THIRD: To the Holders in payment of the amounts then due and
unpaid for principal of, premium (if any), interest on and Liquidated Damages
with respect to, the Securities in respect or for the benefit of which such
money has been collected, ratably, without preference or priority of any kind,
according to the amounts due and payable on such Securities for principal,
premium (if any), interest and Liquidated Damages, respectively; and
FOURTH: To whomsoever may be lawfully entitled thereto, the
remainder, if any.
Section 6.7. Limitation on Suits.
No Holder of any Security shall have any right to order or
direct the Trustee to institute any proceeding, judicial or otherwise, with
respect to this Indenture, or for the appointment of a receiver or trustee, or
for any other remedy hereunder, unless
(A) such Holder has previously given written
notice to the Trustee of a continuing Event of Default;
(B) the Holders of not less than 25% in
principal amount of then outstanding Securities shall have
made written request to the Trustee to institute proceedings
in respect of such Event of Default in its own name as Trustee
hereunder;
(C) such Holder or Holders have offered to
the Trustee reasonable security or indemnity against the
costs, expenses and liabilities to be incurred or reasonably
probable to be incurred in compliance with such request;
(D) the Trustee for 60 days after its
receipt of such notice, request and offer of indemnity has
failed to institute any such proceeding; and
(E) no direction inconsistent with such
written request has been given to the Trustee during such
60-day period by the Holders of a majority in principal amount
of then outstanding Securities;
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it being understood and intended that no one or more Holders 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 Holders,
or to obtain or to seek to obtain priority or preference over any other Holders
or to enforce any right under this Indenture, except in the manner herein
provided and for the equal and ratable benefit of all the Holders.
Section 6.8. Unconditional Right of Holders to Receive Principal, Premium,
and Interest.
Notwithstanding any other provision of this Indenture, the
Holder of any Security shall have the right, which is absolute and
unconditional, to receive payment of the principal of, and premium (if any),
and interest on, such Security when due (including, in the case of redemption,
the Redemption Price on the applicable Redemption Date, and in the case of the
Repurchase Price, on the applicable Repurchase Date), to convert such Security
in accordance with Article XIII, and to institute suit for the enforcement of
any such payment and right to convert after such respective dates, and such
rights shall not be impaired without the consent of such Holder.
Section 6.9. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities in Section 2.7,
no right or remedy herein conferred upon or reserved to the Trustee or to the
Holders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
Section 6.10. Delay or Omission Not Waiver.
No delay or omission by the Trustee or by any Holder of any
Security to exercise any right or remedy arising upon any Event of Default
shall impair the exercise of any such right or remedy or constitute a waiver of
any such Event of Default. Every right and remedy given by this Article VI or
by law to the Trustee or
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to the Holders may be exercised from time to time, and as often as may
be deemed expedient, by the Trustee or by the Holders, as the case may be.
Section 6.11. Control by Holders.
The Holder or Holders of no less than a majority in aggregate
principal amount of then outstanding Securities 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 upon the
Trustee, provided that
(1) such direction shall be made in writing to
the Trustee and shall not be in conflict with any rule of law
or with this Indenture,
(2) the Trustee shall not determine that the
action so directed would be unjustly prejudicial to the Holders
not taking part in such direction, and
(3) the Trustee may take any other action deemed
proper by the Trustee which is not inconsistent with such
direction.
Section 6.12. Waiver of Past Default.
The Holder or Holders of not less than a majority in aggregate
principal amount of then outstanding Securities may, on behalf of all Holders,
prior to the declaration of acceleration of the maturity of the Securities,
waive any past default hereunder and its consequences, except a default
(A) in the payment of the principal of,
premium, if any, interest on any Security not yet cured as
specified in clauses (1) and (2) of Section 6.1, or
(B) in respect of a covenant or provision
hereof which, under Article IX, cannot be modified or amended
without the consent of the Holder of each outstanding Security
affected.
Upon any such waiver, such default shall cease to exist, and
any Event of Default arising therefrom shall be deemed to have been cured, for
every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other default or impair the exercise of any right arising
therefrom.
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Section 6.13. Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any
Security by his acceptance thereof shall be deemed to have agreed, that any
court may in its discretion require, in any suit for the enforcement of any
right or remedy under this Indenture, or in any suit against the Trustee for
any action taken, suffered or omitted to be taken by it as Trustee, the filing
by any party litigant in such suit of an undertaking to pay the costs of such
suit, and that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees and expenses, against any party litigant
in such suit, having due regard to the merits and good faith of the claims or
defenses made by such party litigant; but the provisions of this Section 6.13
shall not apply to any suit instituted by the Company, to any suit instituted
by the Trustee, to any suit instituted by any Holder, or group of Holders,
holding in the aggregate more than 10% in aggregate principal amount of then
outstanding Securities, or to any suit instituted by any Holder for enforcement
of the payment of principal of, premium (if any), interest on or Liquidated
Damages with respect to, any Security on or after the respective Stated
Maturity of such Security (including, in the case of redemption, on or after
the Redemption Date).
Section 6.14. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to
enforce any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, then and in every case, subject to
any determination in such proceeding, the Company, the Trustee and the Holders
shall be restored severally and respectively to their former positions
hereunder and thereafter all rights and remedies of the Trustee and the Holders
shall continue as though no such proceeding had been instituted.
ARTICLE VII.
TRUSTEE
The Trustee hereby accepts the trust imposed upon it by this
Indenture and covenants and agrees to perform the same, as herein expressed.
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Section 7.1. Duties of Trustee.
(a) If a Default or an Event of Default has occurred and is
continuing, the Trustee shall exercise such of the rights and powers vested in
it by this Indenture and use the same degree of care and skill in their
exercise as a prudent Person would exercise or use under the circumstances in
the conduct of such Person's own affairs.
(b) Except during the continuance of a Default or an Event of
Default:
(1) The Trustee need perform only those duties as are
specifically set forth in this Indenture and no others, and no
covenants or obligations shall be implied in or read into this
Indenture which are adverse to the Trustee.
(2) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates
or opinions furnished to the Trustee and conforming to the
requirements of this Indenture. However, in the case of any such
certificates or opinions which by any provision hereof are
specifically required to be furnished to the Trustee, the Trustee
shall 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 purported to be stated therein).
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(1) This paragraph does not limit the effect of
paragraph (b) of this Section 7.1.
(2) The Trustee shall not be liable for any error
of judgment made in good faith by a Trust Officer, unless it
is proved that the Trustee was negligent in ascertaining the
pertinent facts.
(3) The Trustee shall not be liable with respect
to any action it takes or omits to take in good faith in
accordance with a written direction received by it pursuant to
Section 6.11.
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(d) No provision of this Indenture shall require the Trustee
to expend or risk its own funds or otherwise incur any liability. The
Trustee shall be under no obligation to perform any of its rights or
duties hereunder or to take or omit to take any action under this
Indenture or at the request, order or direction of the Holders or in
the exercise of any of its rights or powers unless such Holders shall
have offered to the Trustee security and indemnity satisfactory to it
against any loss, liability or expense.
(e) Whether or not therein expressly so provided, every
provision of this Indenture that in any way relates to the Trustee is
subject to paragraphs (a), (b), (c), (d) and (f) of this Section 7.1.
(f) The Trustee shall not be liable for interest on any
assets received by it except as the Trustee may agree in writing with
the Company. Assets held in trust by the Trustee need not be
segregated from other assets except to the extent required by law.
Section 7.2. Rights of Trustee.
Subject to Section 7.1:
(a) The Trustee may conclusively rely on any document
believed by it to be genuine and to have been signed or presented by
the proper Person. The Trustee need not investigate any fact or
matter stated in the document, but the Trustee, in its discretion, may
make such further inquiry or investigation into such facts or matters
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 at the sole cost of the Company and shall incur no liability
or additional liability of any kind by reason of such inquiry or
investigation.
(b) Before the Trustee acts or refrains from acting, it may
consult with counsel of its selection and may require an Officers'
Certificate or an Opinion of Counsel. The Trustee shall not be
liable for any action it takes or omits to take in good faith in
reliance on any such Officers' Certificate or Opinion of Counsel.
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(c) The Trustee may act through its attorneys and
agents and shall not be responsible for the misconduct or negligence of any
attorney or agent appointed with due care.
(d) The Trustee shall not be liable for any action it
takes or omits to take in good faith which it believes to be authorized or
within its discretion, rights or powers conferred upon it by this Indenture.
(e) The Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, 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.
(f) The Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Indenture at the
request, order or direction of any of the Holders, pursuant to the provisions
of this Indenture, unless such Holders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and liabilities
which may be incurred therein or thereby.
(g) Unless otherwise specifically provided for in
this Indenture, any demand, request, direction or notice from the Company shall
be sufficient if signed by an Officer of the Company.
(h) The Trustee shall have no duty to inquire as
to the performance of the Company's covenants in Article IV hereof. In
addition, the Trustee shall not be deemed to have knowledge of any Default or
Event of Default, except (i) any Event of Default occurring pursuant to
Sections 6.1(1) or 6.1(2), or (ii) any Default or Event of Default of which a
Trust Officer of the Trustee shall have received written notification or
obtained actual knowledge.
(i) No permissive right of the Trustee to act
hereunder shall be construed as a duty.
(j) If in the administration of this Indenture
the Trustee deems it desirable that a matter be proved or established prior to
taking, suffering or omitting to take any action hereunder, the Trustee (unless
other evidence be herein specifically prescribed) may, in the absence of bad
faith on its part, rely upon an Officers' Certificate, an Opinion of Counsel,
or both.
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(k) The Trustee shall not be deemed to have notice or knowledge
(including actual knowledge) of any matter unless a Trust Officer has actual
knowledge thereof or unless written notice thereof is received by the Trustee
at the office specified in Section 14.2 and such notice references the
Securities generally, the Company or this Indenture.
Section 7.3. Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become
the owner or pledgee of Securities and may otherwise deal with the Company, any
of its Subsidiaries, or their respective Affiliates with the same rights it
would have if it were not Trustee. Any Agent may do the same with like rights.
However, the Trustee must comply with Sections 7.10 and 7.11.
Section 7.4. Trustee's Disclaimer.
The Trustee makes no representation as to the validity or
adequacy of this Indenture, the Registration Rights Agreement, the Offering
Memorandum or the Securities and it shall not be accountable for the Company's
use of the proceeds from the Securities, and it shall not be responsible for
any statement in the Securities, other than the Trustee's certificate of
authentication, or the use or application of any funds received by a Paying
Agent other than the Trustee.
Section 7.5. Notice of Default.
If a Default or an Event of Default occurs and is continuing
and if it is actually known to the Trustee, the Trustee shall mail to each
Holder notice of the uncured Default or Event of Default within 90 days after
the later to occur of (i) the occurrence of such Default or Event of Default or
(ii) the date the Trustee becomes aware of such Default or Event of Default.
Except in the case of a Default or an Event of Default in payment of principal
(or premium, if any) of, interest on or Liquidated Damages with respect to, any
Security (including the payment of the Repurchase Price on the Repurchase Date
and the payment of the Redemption Price on the Redemption Date), the Trustee
may withhold the notice if and so long as a Trust Officer in good faith
determines that withholding the notice is in the interest of the Holders.
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Section 7.6. Reports by Trustee to Holders.
Within 60 days after each May 15 beginning with the May 15
following the date of this Indenture, the Trustee shall, if required by law,
mail to each Holder a brief report dated as of such May 15 that complies with
TIA Section 313(a). The Trustee also shall comply with TIA Section Section
313(b) and 313(c).
A copy of each report at the time of its mailing to Holders
shall be mailed to the Company and, if required, filed with the SEC and each
stock exchange, if any, on which the Securities are listed.
The Company shall promptly notify the Trustee in writing if
the Securities become listed on any stock exchange or automatic quotation
system or of any delisting thereof.
Section 7.7. Compensation and Indemnity.
The Company agrees to pay to the Trustee from time to time
such compensation for its services as the parties shall agree from time to time
in writing and, in the absence of such agreement, reasonable compensation for
its acceptance of this Indenture and services hereunder. The Trustee's
compensation shall not be limited by any law on compensation of a trustee of an
express trust. The Company shall reimburse the Trustee upon request for all
reasonable disbursements, expenses, fees and advances incurred or made by it.
Such expenses shall include the reasonable compensation, disbursements, fees
and expenses of the Trustee's agents, accountants, experts and counsel.
The Company agrees to indemnify the Trustee (in its capacity
as Trustee) and each of its officers, directors, employees, attorneys-in-fact
and agents for, and hold them harmless against, any and all claims, demands,
expenses (including but not limited to reasonable compensation, fees,
disbursements and expenses of the Trustee's agents and counsel), losses,
damages or liabilities incurred by it without negligence, bad faith or willful
misconduct on its part, arising out of, related to, or in connection with the
acceptance or administration of this trust and its rights or duties hereunder
including the reasonable costs and expenses, the costs and expenses of
enforcing this Indenture against the Company and of defending itself against
any claim (whether asserted by the Company, or any Holder or any other person)
or liability in connection with the exercise or performance of any of its
powers or duties
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hereunder. The Trustee shall notify the Company promptly of any claim asserted
against the Trustee for which it may seek indemnity. The Company shall defend
the claim and the Trustee shall provide reasonable cooperation at the Company's
expense in the defense. The Trustee may have separate counsel and the Company
shall pay the reasonable fees and expenses of such counsel; provided that the
Company will not be required to pay such fees and expenses if it assumes the
Trustee's defense and there is no conflict of interest between the Company and
the Trustee in connection with such defense. The Company need not pay for any
settlement made without its written consent. The Company need not reimburse
any expense or indemnify against any loss or liability to the extent
attributable to the negligence, bad faith or willful misconduct of the Trustee.
To secure the Company's payment obligations in this Section
7.7, the Trustee and each predecessor Trustee shall have a perfected lien prior
to the Securities on all assets held or collected by the Trustee, in its
capacity as Trustee, except assets held in trust to pay principal and premium,
if any, of or interest on particular Securities. Any lien in favor of a
predecessor Trustee shall be senior to any lien in favor of the current
Trustee.
When the Trustee incurs expenses or fees or renders services
after an Event of Default specified in Section 6.1(6) or (7) occurs, the
expenses and the compensation for the services are intended to constitute
expenses of administration under any Bankruptcy Law.
The Company's obligations under this Section 7.7 and any lien
arising hereunder shall survive indefinitely, including upon the resignation or
removal of the Trustee, the discharge of the Company's obligations pursuant to
Article VIII of this Indenture and any rejection or termination of this
Indenture under any Bankruptcy Law.
Section 7.8. Replacement of Trustee.
The Trustee may resign by so notifying the Company in writing.
The Holder or Holders of a majority in principal amount of then outstanding
Securities may remove the Trustee by so notifying the Company and the Trustee
in writing. The Company, by Board of Directors resolution, may remove the
Trustee if:
(a) the Trustee fails to comply with Section 7.10;
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(b) the Trustee is adjudged bankrupt or insolvent;
(c) a receiver, Custodian, or other public officer takes charge of
the Trustee or its property; or
(d) the Trustee becomes incapable of acting.
No resignation or removal of the Trustee and no appointment of
a successor Trustee pursuant to this Article shall become effective
until the acceptance of appointment by the successor Trustee in accordance with
the applicable requirements of this Section 7.8.
If the Trustee resigns or is removed or if a vacancy exists in
the office of Trustee for any reason, the Company shall promptly appoint a
successor Trustee. Within one year after the successor Trustee takes office,
the Holder or Holders of a majority in principal amount of then outstanding
Securities may, with the Company's consent, appoint a successor Trustee to
replace the successor Trustee appointed by the Company.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Immediately upon
delivery of such notice and provided that all sums owing to the retiring
Trustee provided for in Section 7.7 have been paid, the retiring Trustee shall
transfer all property held by it as trustee to the successor Trustee, subject
to the lien provided in Section 7.7, the resignation or removal of the retiring
Trustee shall become effective, and the successor Trustee shall have all the
rights, powers and duties of the Trustee under this Indenture. A successor
Trustee shall mail notice of its succession to each Holder.
If a successor Trustee does not take office within 30 days
after the retiring Trustee resigns or is removed, the retiring Trustee, the
Company or the Holder or Holders of at least 10% in principal amount of then
outstanding Securities may, at the expense of the Company, petition any court
of competent jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any bona
fide Holder may petition any court of competent jurisdiction for the removal of
the Trustee and the appointment of a successor Trustee.
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Notwithstanding replacement of the Trustee pursuant to this
Section 7.8, the Company's obligations under Section 7.7 shall continue
indefinitely for the benefit of the retiring Trustee.
Section 7.9. Successor Trustee by Merger, Etc.
If the Trustee consolidates with, merges or converts into, or
transfers all or substantially all of its corporate trust business to,
another corporation, the resulting, surviving or transferee corporation without
any further act shall, if such resulting, surviving or transferee corporation
is otherwise eligible hereunder, be the successor Trustee.
Section 7.10. Eligibility; Disqualification.
The Trustee shall at all times satisfy the requirements of TIA
Section 310(a)(1), (2) and (5). The Trustee and its direct parent or, in the
case of a corporation included in a bank holding company system, the related
bank holding company, shall have a combined capital and surplus of at least
$50,000,000 as set forth in its most recent published annual report of
condition. The Trustee shall comply with TIA Section 310(b).
Section 7.11. Preferential Collection of Claims Against Company.
The Trustee shall comply with TIA Section 311(a), excluding
any creditor relationship listed in TIA Section 311(b). A Trustee who has
resigned or been removed shall be subject to TIA Section 311(a) to the extent
indicated.
Section 7.12. Other Capacities.
All references in this Indenture to the Trustee shall be
deemed to refer to the Trustee in its capacity as Trustee and in its capacities
as any Agent, to the extent acting in such capacities, and every provision of
this Indenture relating to the conduct or affecting the liability or offering
protection, immunity or indemnity to the Trustee shall be deemed to apply with
the same force and effect to the Trustee acting in its capacity as any Agent.
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ARTICLE VIII.
SATISFACTION AND DISCHARGE
Section 8.1. Satisfaction and Discharge of Indenture.
The Company may terminate its obligations under this Indenture
(subject to the provisions of this Article VIII and Section 7.7) when it shall
have delivered to the Trustee for cancellation all Securities theretofore
authenticated (other than any Securities which shall have been destroyed, lost
or stolen and which shall have been replaced or paid as provided in Article II
hereof) and the following conditions shall be satisfied:
(1) The Company has paid all sums payable under the
Indenture; and
(2) The Company shall have delivered to the
Trustee an Officers' Certificate and an Opinion of
Counsel in the United States, each stating that all conditions
precedent have been complied with as contemplated by this
Section 8.1.
Section 8.2. Repayment to the Company.
Any money deposited with the Trustee or any Paying Agent, or
then held by the Company, for the payment of the principal of, premium, if any,
interest on or Liquidated Damages with respect to any Security and remaining
unclaimed for two years after such principal, premium, if any, interest or
Liquidated Damages has become due and payable shall be paid to the Company on
its written request; and the Holder of such Security shall thereafter look only
to the Company for payment thereof, and all liability of the Trustee or such
Paying Agent with respect to such trust money shall thereupon cease.
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ARTICLE IX.
AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 9.1. Supplemental Indentures Without Consent of Holders.
Without the consent of any Holder, the Company, when
authorized by Board Resolutions, and the Trustee, at any time and from time to
time, may enter into one or more indentures supplemental hereto, in form
satisfactory to the Trustee, for any of the following purposes:
(1) to cure any ambiguity, defect, or
inconsistency, or to make any other provisions with respect to
matters or questions arising under this Indenture which shall
not be inconsistent with the provisions of this Indenture,
provided that such action pursuant to this clause (1) does not
adversely affect the interests of any Holder in any respect;
(2) to create additional covenants of the Company
for the benefit of the Holders, or to surrender any right or
power herein conferred upon the Company or to make any other
change that does not adversely affect the rights of any
Holder, provided that the Company has delivered to the Trustee
an Opinion of Counsel stating that such change pursuant to
this clause (2) does not adversely affect the rights of any
Holder;
(3) to provide for collateral for or
guarantors of the Securities;
(4) to evidence the succession of another
Person to the Company and the assumption by any such successor
of the obligations of the Company herein and in the Securities
in accordance with Article V; or
(5) to comply with the TIA.
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Section 9.2. Amendments, Supplemental Indentures and Waivers with Consent
of Holders.
Subject to the last sentence of this paragraph, with the
consent of the Holders of not less than a majority in aggregate principal
amount of the Securities at the time outstanding, by written act of said
Holders delivered to the Company and the Trustee, the Company, when authorized
by Board Resolutions, and the Trustee may amend or supplement this Indenture or
the Securities or 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 the Securities or of
modifying in any manner the rights of the Holders under this Indenture or the
Securities. Subject to the last sentence of this paragraph, the Holder or
Holders of not less than a majority in aggregate principal amount of then
outstanding Securities may, in writing, waive compliance by the Company with
any provision of this Indenture or the Securities. Notwithstanding any of the
above, however, no such amendment, supplemental indenture or waiver shall,
without the consent of the Holder of each outstanding Security affected
thereby:
(1) change the Stated Maturity of any
Security or reduce the principal amount thereof or the rate
(or extend the time for payment) of interest thereon or any
premium payable upon the redemption thereof, or change the
place of payment where, or the coin or currency in which, any
Security or any premium or the interest thereon with respect
thereto is payable, or impair the right to institute suit for
the conversion of any Security or the enforcement of any such
payment on or after the due date thereof (including, in
the case of redemption, on or after the Redemption Date), or
reduce the Repurchase Price, or alter the Repurchase Offer or
redemption provisions in a manner adverse to the Holders;
(2) reduce the percentage in principal amount of
the outstanding Securities, the consent of whose Holders is
required for any such amendment, supplemental indenture or
waiver provided for in the Indenture;
(3) adversely affect the right of such
Holder to convert Securities or the rights of any holder
conferred by Article XIII; or
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(4) modify any of the waiver provisions, except
to increase any required percentage or to provide that
certain other provisions of the Indenture cannot be modified
or waived without the consent of the Holder of each
outstanding Security affected thereby.
It shall not be necessary for the consent of the Holders under
this Section 9.2 to approve the particular form of any proposed amendment,
supplement or waiver, but it shall be sufficient if such consent approves the
substance thereof.
After an amendment, supplement or waiver under this Section
9.2 becomes effective, the Company shall mail to the Holders affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure of
the Company to mail such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such supplemental indenture or
waiver.
After an amendment, supplement or waiver under this Section
9.2 or Section 9.4 becomes effective, it shall bind each Holder.
In connection with any amendment, supplement or waiver under
this Article IX, the Company may, but shall not be obligated to, offer to any
Holder who consents to such amendment, supplement or waiver, or (at the option
of the Company) to all Holders, consideration for consent to such amendment,
supplement or waiver.
Section 9.3. Compliance with TIA.
Every amendment, waiver or supplement of this Indenture or the
Securities shall comply with the TIA as then in effect.
Section 9.4. Revocation and Effect of Consents.
Until an amendment, waiver or supplement becomes effective, a
consent to it by a Holder is a continuing consent by the Holder and every
subsequent Holder of a Security or portion of a Security that evidences the
same debt as the consenting Holder's Security, even if notation of the consent
is not made on any Security. However, any such Holder or subsequent Holder may
revoke the consent as to his Security or portion of his Security by written
notice to the Company, the Trustee or the Person designated by the Company as
the Person to whom consents should be sent if such revocation is received by
the Company or such Person before
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the date on which the Trustee receives an Officers' Certificate
certifying that the Holders of the requisite principal amount of Securities
have consented (and not theretofore revoked such consent) to the amendment,
supplement or waiver.
The Company may, but shall not be obligated to, fix a record
date for the purpose of determining the Holders entitled to consent to any
amendment, supplement or waiver, which record date shall be the date so fixed
by the Company notwithstanding the provisions of the TIA. If a record date is
fixed, then notwithstanding the last sentence of the immediately preceding
paragraph, those Persons who were Holders at such record date, and only those
Persons (or their duly designated proxies), shall be entitled to revoke any
consent previously given, whether or not such Persons continue to be Holders
after such record date. No such consent shall be valid or effective for more
than 90 days after such record date.
Notwithstanding the preceding paragraph, after an amendment,
supplement or waiver becomes effective, it shall bind every Holder, unless it
makes a change described in any of clauses (1) through (4) of Section 9.2, in
which case, the amendment, supplement or waiver shall bind only each Holder of
a Security who has consented to it and every subsequent Holder of a Security or
portion of a Security that evidences the same debt as the consenting Holder's
Security unless consent of all Holders has been obtained pursuant to clauses
(1) through (4) of Section 9.2.
Section 9.5. Notation on or Exchange of Securities.
If an amendment, supplement or waiver changes the terms of a
Security, the Trustee may require the Holder of the Security to deliver it to
the Trustee or require the Holder to put an appropriate notation on the
Security. The Trustee may place an appropriate notation on the Security about
the changed terms and return it to the Holder. Alternatively, if the Company
or the Trustee so determines, the Company in exchange for the Security shall
issue and the Trustee shall authenticate a new Security that reflects the
changed terms. Any failure to make the appropriate notation or to issue a new
Security shall not affect the validity of such amendment, supplement or waiver.
Section 9.6. Trustee to Sign Amendments, Etc.
The Trustee shall execute any amendment, supplement or waiver
authorized pursuant to this Article IX; provided that the Trustee may, but
shall not be obligated to, execute any such amendment, supplement or waiver
which affects the
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Trustee's own rights, duties or immunities under this Indenture. The
Trustee shall be entitled to receive, and shall be fully protected in relying
upon, an Opinion of Counsel stating that the execution of any amendment,
supplement or waiver authorized pursuant to this Article IX is authorized or
permitted by this Indenture.
ARTICLE X.
MEETINGS OF SECURITYHOLDERS
Section 10.1. Purposes for Which Meetings May Be Called.
A meeting of Securityholders 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:
(a) to give any notice to the Company or to the Trustee,
or to give any directions to the Trustee, or to waive 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 Securityholders pursuant to
any of the provisions of Article VI;
(b) to remove the Trustee or appoint a successor Trustee pursuant
to the provisions of Article VII;
(c) to consent to an amendment, supplement or waiver pursuant to
provisions of Section 9.2; or
(d) to take any other action (i) authorized to be taken by or on
behalf of the Holder or Holders of any specified aggregate principal
amount of the Securities under any other provision of this Indenture, or
authorized or permitted by law or (ii) which the Trustee deems necessary or
appropriate in connection with the administration of this Indenture.
Section 10.2. Manner of Calling Meetings.
The Trustee may at any time call a meeting of Securityholders
to take any action specified in Section 10.1, to be held at such time and at
such place in New York, New York or elsewhere as the Trustee shall determine.
Notice of every meeting of Securityholders, setting forth the time and place of
such meeting and in general terms the action proposed to be taken at such
meeting, shall be mailed at the Company's expense by the Trustee, first-class
postage prepaid, to the Company and
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to the Holders at their last addresses as they shall appear on the
registration books of the Registrar, not less than 10 nor more than 60 days
prior to the date fixed for a meeting.
Any meeting of Securityholders shall be valid without notice
if the Holders of all Securities then outstanding are present in Person or by
proxy, or if notice is waived before or after the meeting by the Holders of all
Securities 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. Calling of Meetings by the Company or Holders.
In case at any time the Company or the Holders of not less
than 10% in aggregate principal amount of the Securities then outstanding,
shall have requested the Trustee to call a meeting of Securityholders to take
any action specified in Section 10.1, by written request setting forth in
reasonable detail the action proposed to be taken at the meeting, and the
Trustee shall not have mailed the notice of such meeting within 20 days after
receipt of such written request, then the Company or the Holders of Securities
in the amount above specified may determine the time and place in New York, New
York or elsewhere for such meeting and may call such meeting for the purpose of
taking such action, by mailing or causing to be mailed notice thereof as
provided in Section 10.2, or by causing notice thereof to be published at least
once in each of two successive calendar weeks (on any Business Day during such
week) in a newspaper or newspapers printed in the English language, customarily
published at least five days a week of a general circulation in the City of New
York, State of New York, the first such publication to be not less than 10 nor
more than 60 days prior to the date fixed for the meeting.
Section 10.4. Who May Attend and Vote at Meetings.
To be entitled to vote at any meeting of Securityholders, a
Person shall (a) be a registered Holder of one or more Securities, or (b) be a
Person appointed by an instrument in writing as proxy for the registered Holder
or Holders of Securities. The only Persons who shall be entitled to be present
or to speak at any meeting of Securityholders 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.
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Section 10.5. Regulations May Be Made by Company; Conduct of the
Meeting: Voting Rights: Adjournment.
Notwithstanding any other provision of this Indenture, the
Company may make such reasonable regulations as it may deem advisable for any
action by or any meeting of Securityholders, in regard to proof of the holding
of Securities and of the appointment of proxies, and in regard to the
appointment and duties of inspectors of votes, and 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
appropriate. Such regulations may fix a record date and time for determining
the Holders of record of Securities entitled to vote at such meeting, in which
case those and only those Persons who are Holders of Securities at the record
date and time so fixed, or their proxies, shall be entitled to vote at such
meeting whether or not they shall be such Holders at the time of the meeting.
The Holders 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 Securityholders as provided in Section 10.3, in which case
the Company or the Securityholders 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 Securities represented at the meeting and
entitled to vote.
At any meeting each Securityholder or proxy shall be entitled
to one vote for each $1,000 principal amount of Securities held or
represented by him, in whole vote increments; provided, however, that no vote
shall be cast or counted at any meeting in respect of any Securities challenged
as not outstanding and ruled by the chairman of the meeting to be not then
outstanding. The chairman of the meeting shall have no right to vote other
than by virtue of Securities held by him or instruments in writing as aforesaid
duly designating him as the proxy to vote on behalf of other Securityholders.
Any meeting of Securityholders duly called pursuant to the provisions of
Section 10.2 or Section 10.3 may be adjourned from time to time by vote of the
Holder or Holders of a majority in aggregate principal amount of the Securities
represented at the meeting and entitled to vote, and the meeting may be held as
so adjourned without further notice.
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Section 10.6. Voting at the Meeting and Record to Be Kept.
The vote upon any resolution submitted to any meeting of
Securityholders shall be by written ballots on which shall be subscribed the
signatures of the Holders of Securities or of their representatives by proxy
and the principal amount of the Securities voted by the ballot. The permanent
chairman of the meeting shall appoint two inspectors of votes, who shall count
all votes cast at the meeting for or against any resolution and who shall make
and file with the secretary of the meeting their verified written reports in
duplicate of all votes cast at the meeting. A record in duplicate of the
proceedings of each meeting of Securityholders shall be prepared by the
secretary of the meeting and there shall be attached to such record the
original reports of the inspectors of votes on any vote by ballot taken thereat
and affidavits by one or more Persons having knowledge of the facts, setting
forth a copy of the notice of the meeting and showing that such notice was
mailed as provided in Section 10.2 or published as provided in Section 10.3.
The record shall be signed and verified by the affidavits of the permanent
chairman and the secretary of the meeting and one of the duplicates shall be
delivered to the Company and the other to the Trustee to be preserved by the
Trustee, the latter to have attached thereto the ballots voted at the meeting.
Any record so signed and verified shall be conclusive evidence
of the matters therein stated.
Section 10.7. Exercise of Rights of Trustee or Holders May Not Be
Hindered or Delayed by Call of Meeting.
Nothing contained in this Article X shall be deemed or
construed to authorize or permit, by reason of any call of a meeting of
Securityholders 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 Securityholders under any
of the provisions of this Indenture or of the Securities.
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ARTICLE XI.
RIGHT TO REQUIRE REPURCHASE UPON A CHANGE OF CONTROL
Section 11.1. Repurchase of Securities at Option of the Holder Upon a Change
of Control.
(a) Subject to Section 11.2, in the event that a Change
of Control occurs, the Company shall offer, subject to the terms and conditions
of this Indenture, to purchase all or any part of each Holder's Securities
(provided that the principal amount of such Securities must be $1,000 or an
integral multiple thereof) on the date (the "Repurchase Date") that is no later
than 45 Business Days (except as hereinafter provided) after the occurrence of
such Change of Control, at a cash price (the "Repurchase Price") equal to 100%
of the principal amount thereof, together with accrued and unpaid interest and
Liquidated Damages, if any, to (but excluding) the Repurchase Date.
(b) In the event that, pursuant to this Section 11.1, the Company
shall be required to commence an offer to purchase Securities (a
"Repurchase Offer"), the Company shall follow the procedures set forth in this
Section 11.1 as follows:
(1) the Repurchase Offer shall commence within
25 Business Days following a Change of Control;
(2) the Repurchase Offer shall remain open for 20
Business Days following its commencement, except to the extent
that a longer period is required by applicable law (the
"Repurchase Offer Period");
(3) upon the expiration of a Repurchase Offer, the
Company shall purchase all Securities tendered in response to
the Repurchase Offer;
(4) if the Repurchase Date is on or after an
interest payment Record Date and on or before the related
Interest Payment Date, any accrued interest and Liquidated
Damages will be paid to the Person in whose name a Security is
registered at the close of business on such Record Date, and
no additional interest or Liquidated Dam-
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ages will be payable to Securityholders who tender Securities
pursuant to the Repurchase Offer;
(5) the Company shall provide the Trustee with
written notice of the Repurchase Offer at least 5
Business Days before the commencement of any Repurchase Offer
(or such shorter period that is satisfactory to the Trustee);
and
(6) on or before the commencement of any
Repurchase Offer, the Company or the Trustee (upon the request
and at the expense of the Company) shall send, by
first-class mail, a notice to each of the Securityholders,
which (to the extent consistent with this Indenture) shall
govern the terms of the Repurchase Offer and shall state:
(i) that the Repurchase Offer is being made pursuant to such
notice and this Section 11.1 and that all Securities, or portions
thereof, tendered will be accepted for payment;
(ii) the Repurchase Price (including the amount of
accrued and unpaid interest and Liquidated Damages, if any), the
Repurchase Date and the Repurchase Put Date;
(iii) that any Security, or portion thereof, not tendered
and accepted for payment will continue to accrue interest and
Liquidated Damages, if any;
(iv) that, unless the Company defaults in depositing Cash
with the Paying Agent in accordance with the last paragraph of
this clause (b) or such payment is prevented pursuant to Article XII,
any Security, or portion thereof, accepted for payment pursuant to
the Repurchase Offer shall cease to accrue interest after the
Repurchase Date;
(v) that Holders electing to have a Security, or portion
thereof, purchased pursuant to a Repurchase Offer will be required to
surrender the Security, with the form entitled "Option of Holder to
Elect Purchase" on the reverse of the Security completed, to the
Paying Agent (which may not for purposes of this Section 11.1,
notwithstanding anything in this Indenture to the contrary, be the
Company or any Affiliate of the Company) at the address specified in
the notice prior to the close of business on the earlier of (a) the
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third Business Day prior to the Repurchase Date and (b) the third
Business Day following the expiration of the Repurchase Offer (such
earlier date being the "Repurchase Put Date");
(vi) that Holders will be entitled to withdraw their
election, in whole or in part, if the Paying Agent (which may not for
purposes of this Section 11.1, notwithstanding anything in this
Indenture to the contrary, be the Company or any Affiliate of the
Company) receives, up to the close of business on the Repurchase Put
Date, facsimile transmission or letter setting forth the name of the
Holder, the principal amount of the Securities the Holder is
withdrawing and a statement that such Holder is withdrawing his
election to have such principal amount of Securities purchased; and
(vii) a brief description of the events resulting in
such Change of Control.
Any such Repurchase Offer shall comply with all applicable
provisions of federal and state laws, including those regulating tender offers,
if applicable, and any provisions of this Indenture which conflict with such
laws shall be deemed to be superseded by the provisions of such laws.
On or before the Repurchase Date, the Company will (i) accept
for payment Securities or portions thereof properly tendered pursuant to the
Repurchase Offer on or before the Repurchase Put Date, (ii) deposit with the
Paying Agent Cash sufficient to pay the Repurchase Price (together with accrued
and unpaid interest and Liquidated Damages, if any) of all Securities or
portions thereof so tendered and (iii) deliver to the Trustee the Securities so
accepted together with an Officers' Certificate listing the Securities or
portions thereof being purchased by the Company. The Paying Agent shall
promptly mail to Holders of Securities so accepted payment in an amount equal
to the Repurchase Price (together with accrued and unpaid interest and
Liquidated Damages, if any), and the Trustee will promptly authenticate and
mail or deliver to such Holders a new Security or Securities equal in principal
amount to any unpurchased portion of the Securities surrendered. Any
Securities not so accepted shall be promptly mailed or delivered by the Company
to the Holder thereof. The Company shall publicly announce the results of the
Repurchase Offer on or as soon as practicable after the Repurchase Date.
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Section 11.2. Rescission of Change of Control Determination.
At any time prior to the close of business on the Business day
immediately preceding the Repurchase Date, the Holders of more than 66-2/3% in
aggregate principal amount of the then outstanding Securities, by written act
of said Holders delivered to the Company and the Trustee, may determine that
the event giving rise to the Change of Control shall not be treated as a Change
of Control for purposes of Section 11.1, in which event:
(1) the provisions of Section 11.1(a)
shall not apply;
(2) if a Repurchase Offer has been made by the
Company pursuant to Section 11.1(b), such Repurchase
Offer shall be deemed revoked; and
(3) if any Securities have been tendered in
response to the revoked Repurchase Offer, such tenders
shall be deemed rescinded and the Securities promptly returned
to the Holders thereof.
Following a determination by the Holders pursuant to this
Section 11.2, the Company shall mail to all Holders a notice briefly describing
such determination. Any failure of the Company to mail such notice, or any
defect therein, shall not, however, in any way impair or affect the validity of
any such determination. An effective determination under this Section 11.2
shall be binding on all holders.
ARTICLE XII.
SUBORDINATION
Section 12.1. Securities Subordinated to Senior Indebtedness.
The Company and each Holder, by its acceptance of Securities,
agree that (a) the payment of the principal of, premium, if any, and interest
on and Liquidated Damages with respect to, the Securities and (b) any other
payment in respect of the Securities, including on account of the acquisition
or redemption of the Securities by the Company (but specifically excluding
payments to the Trustee for its own benefit), is subordinated, to the extent
and in the manner provided in this Article XII, to the prior payment in full of
all Senior Indebtedness of the Company, whether
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outstanding at the date of this Indenture or thereafter created, incurred,
assumed or guaranteed, and that these subordination provisions are for the
benefit of the holders of Senior Indebtedness.
This Article XII shall constitute a continuing offer to all
Persons who, in reliance upon such provisions, become holders of, or
continue to hold, Senior Indebtedness, and such provisions are made for the
benefit of the holders of Senior Indebtedness, and such holders are made
obligees hereunder and any one or more of them may enforce such provisions. In
addition, the payment of cash, property or securities (other than Junior
Securities) upon conversion of a Security pursuant to Article XIII will
constitute payment on a Security and therefore will be subject to the
subordination provisions contained in this Indenture.
Section 12.2. No Payment on Securities in Certain Circumstances.
(a) No payment may be made by the Company on account of the
principal of, premium, if any, interest on, or Liquidated Damages or any other
obligations under or with respect to, the Securities, or to acquire any of the
Securities (including repurchases of Securities at the option of the Holder)
for cash or property (other than Junior Securities), or on account of the
redemption provisions of the Securities (collectively, the "Subordinated
Obligations"), (i) upon the maturity of any Senior Indebtedness by lapse of
time, acceleration (unless waived) or otherwise, unless and until all principal
of, premium, if any, and interest on, and fees, charges, expenses,
indemnifications and all other amounts payable in respect of Designated Senior
Indebtedness are first paid in full, or (ii) in the event of default in the
payment of any principal of, premium, if any, or interest in respect of
Designated Senior Indebtedness when it becomes due and payable, whether at
maturity or at a date fixed for prepayment or by declaration or otherwise
(collectively, a "Payment Default"), unless and until such Payment Default has
been cured or waived or otherwise has ceased to exist.
(b) Upon (i) the happening of an event of default
(other than a Payment Default) that permits, or would permit, with (w) the
passage of time, (x) the giving of notice, (y) the making of any payment of the
Securities then required to be made, or (z) any combination thereof
(collectively, a "Non-Payment Default"), the holders of Designated Senior
Indebtedness or their representative immediately to accelerate its maturity and
(ii) written notice of such Non-Payment Default given to the Company and the
Trustee by the holders of Designated Senior Indebtedness or their
representative (a "Payment Notice"), then, unless and until such Non-Payment
Default has been
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cured or waived or otherwise has ceased to exist, no payment (by set-off or
otherwise) may be made by or on behalf of the Company directly or through any
Subsidiary on account of the Subordinated Obligations, in any such case other
than payments made with Junior Securities. Notwithstanding the foregoing,
unless (i) the Designated Senior Indebtedness in respect of which such
Non-Payment Default exists has been declared due and payable in its entirety
within 179 days after the Payment Notice is delivered as set forth above (the
"Payment Blockage Period"), and (ii) such declaration has not been
rescinded or waived, at the end of the Payment Blockage Period, the Company
shall be required to pay to the Holders of the Securities all sums not paid to
the Holders of the Securities during the Payment Blockage Period due to the
foregoing prohibitions (and upon the making of such payments any acceleration
of the Securities made during the Payment Blockage Period shall be of no
further force or effect) and to resume all other payments as and when due on
the Securities. Not more than one Payment Notice may be given in any
consecutive 365-day period, irrespective of the number of defaults with respect
to Senior Indebtedness during such period. In no event, however, may the total
number of days during which any Payment Blockage Period is or Payment Blockage
Periods are in effect exceed 179 days in the aggregate during any consecutive
365 day period.
(c) In furtherance of the provisions of Section 12.1, in the event
that, notwithstanding the foregoing provisions of this Section 12.2, any
payment or distribution of assets of the Company (other than Junior Securities)
shall be received by the Trustee on behalf of the Holders or any Paying Agent
for the benefit of the Holders at a time when such payment or distribution is
prohibited by the provisions of this Section 12.2, such payment or distribution
(subject to the provisions of Sections 12.6 and 12.9) shall be held in trust
for the benefit of the holders of Senior Indebtedness, and shall be paid or
delivered by such Holders or the Trustee or such Paying Agent, as the case may
be, to the holders of Senior Indebtedness of the Company remaining unpaid or
their representative or representatives, or to the trustee or trustees under
any indenture pursuant to which any instruments evidencing any of such Senior
Indebtedness of the Company may have been issued, ratably according to the
aggregate amounts remaining unpaid on account of the Senior Indebtedness of the
Company held or represented by each, for application to the payment of all
Senior Indebtedness of the Company in full after giving effect to any
concurrent payment and distribution to the holders of such Senior Indebtedness.
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Section 12.3. Securities Subordinated to Prior Payment of All Senior
Indebtedness on Dissolution Liquidation or Reorganization.
Upon any distribution of assets of the Company upon any
dissolution, winding up, total or partial liquidation or reorganization of the
Company, whether voluntary or involuntary, in bankruptcy, insolvency,
receivership or a similar proceeding or upon assignment for the benefit of
creditors or any marshaling of assets or liabilities:
(a) the holders of all Senior Indebtedness of the Company shall
first be entitled to receive payments in full before the Holders are entitled
to receive any payment on account of the Subordinated Obligations (other than
Junior Securities);
(b) any payment or distribution of assets of the Company of any
kind or character, whether in cash, property or securities (other than Junior
Securities) to which the Holders or the Trustee on behalf of the Holders would
be entitled (by setoff or otherwise), except for the provisions of this Article
XII, shall be paid by the liquidating trustee or agent or other Person making
such a payment or distribution directly to the holders of Senior Indebtedness
or their representative to the extent necessary to make payment in full of all
such Senior Indebtedness remaining unpaid, after giving effect to any
concurrent payment or distribution to the holders of such Senior Indebtedness
(but this Section 12.3(b) shall not apply to payments or distributions to the
Trustee for its own benefit); and
(c) in the event that, notwithstanding the foregoing, any payment
or distribution of assets of the Company of any kind or character, whether in
cash, property or securities (other than Junior Securities), shall be received
by the Trustee for the benefit of the Holders or the Holders or any Paying Agent
for the benefit of the Holders (or, if the Company or any Affiliate of the
Company is acting as its own Paying Agent, money for any such payment or
distribution shall be segregated or held in trust) on account of Subordinated
Obligations before all Senior Indebtedness is paid in full, such payment or
distribution (subject to the provisions of Sections 12.6 and 12.9) shall be
received and held in trust by the Trustee or such Holder or Paying Agent for
the benefit of the holders of such Senior Indebtedness, or their respective
representative, and shall be paid over to or delivered to the holders of the
Senior Indebtedness, ratably according to the respective amounts of such Senior
Indebtedness held or represented by each, to the extent necessary to make
payment as provided herein of all such Senior Indebtedness remaining unpaid
after giving effect
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