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STERLING HOUSE CORPORATION
$35,000,000
6.75% Convertible Subordinated Debentures due 2006
INDENTURE
Dated as of May 23, 1996
FLEET NATIONAL BANK,
AS TRUSTEE
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CROSS-REFERENCE TABLE
STERLING HOUSE CORPORATION
Trust Indenture
ACT Section Indenture
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Section 310(a)(1) 7.10; 12.1
(a)(2) 12.1
(a)(3) 12.1
(a)(4) 12.1
(a)(5) 12.1
(b) 7.10; 12.1
(c) 12.1
Section 311(a) 7.11; 12.1
(b) 7.11; 12.1
(c) 12.1
Section 312(a) 12.1
(b) 12.1; 12.3
(c) 12.1; 12.3
Section 313(a) 7.6; 12.1
(b) 7.6; 12.1
(c) 7.6; 12.1
(d) 7.6; 12.1
Section 314(a) 4.2; 12.1
(b) 12.1
(c) 12.1
(d) 12.1
(e) 12.1
(f) 12.1
Section 315(a) 7.1; 12.1
(b) 7.1; 12.1
(c) 7.1; 12.1
(d) 7.1; 12.1
(e) 7.1; 12.1
Section 316(a) 7.1; 12.1
(b) 7.1; 12.1
(c) 7.1; 12.1
Section 317(a) 12.1
(b) 12.1
Section 318(a) Not Applicable
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Note: This Cross-Reference Table shall not, for any purpose, be deemed to be
a part of the Indenture.
TABLE OF CONTENTS
PAGE
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ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE. . . . . . . . . 1
SECTION 1.1 Definitions. . . . . . . . . . . . . 1
SECTION 1.2 Other Definitions. . . . . . . . . . 5
SECTION 1.3 Incorporation by Reference to Trust
Indenture Act. . . . . . . . . . . . 5
SECTION 1.4 Rules of Construction. . . . . . . . 6
ARTICLE 2
THE SECURITIES. . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 2.1 Form; Dating; Incorporation of Form
in Indenture . . . . . . . . . . . . 6
SECTION 2.2 Execution and Authentication . . . . 8
SECTION 2.3 Registrar and Agents . . . . . . . . 9
SECTION 2.4 Paying Agent to Hold Money in Trust. 9
SECTION 2.5 Transfer and Exchange. . . . . . . . 10
SECTION 2.6 Replacement Securities . . . . . . . 15
SECTION 2.7 Outstanding Securities . . . . . . . 15
SECTION 2.8 Temporary Securities . . . . . . . . 16
SECTION 2.9 Cancellation . . . . . . . . . . . . 17
SECTION 2.10 Defaulted Interest . . . . . . . . . 17
SECTION 2.11 Securityholder Lists . . . . . . . . 17
SECTION 2.12 Persons Deemed Owners. . . . . . . . 18
SECTION 2.13 CUSIP Number . . . . . . . . . . . . 18
ARTICLE 3
REDEMPTION. . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 3.1 Notices to Trustee . . . . . . . . . 18
SECTION 3.2 Selection of Securities to be
Redeemed . . . . . . . . . . . . . . 18
SECTION 3.3 Notice of Redemption by the Company. 19
SECTION 3.4 Effect of Notice of Redemption . . . 20
SECTION 3.5 Deposit of Redemption Price. . . . . 20
SECTION 3.6 Securities Redeemed in Part. . . . . 20
ARTICLE 4
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COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 4.1 Payment of the Securities. . . . . . 20
SECTION 4.2 Commission Reports . . . . . . . . . 21
SECTION 4.3 Waiver of Stay, Extension or
Usury Laws . . . . . . . . . . . . . 21
SECTION 4.4 Notice of Default. . . . . . . . . . 22
SECTION 4.5 Compliance Certificates. . . . . . . 22
SECTION 4.6 Limitation on Dividends and Other
Distributions. . . . . . . . . . . . 22
ARTICLE 5
SUCCESSOR CORPORATION . . . . . . . . . . . . . . . . . . . 23
SECTION 5.1 When Company May Merge, etc. . . . . 23
SECTION 5.2 Successor Corporation or Trust
Substituted. . . . . . . . . . . . . 23
ARTICLE 6
DEFAULTS AND REMEDIES . . . . . . . . . . . . . . . . . . . 24
SECTION 6.1 Events of Default. . . . . . . . . . 24
SECTION 6.2 Acceleration . . . . . . . . . . . . 26
SECTION 6.3 Other Remedies . . . . . . . . . . . 26
SECTION 6.4 Waiver of Defaults and Events of
Default. . . . . . . . . . . . . . . 27
SECTION 6.5 Control by Majority. . . . . . . . . 27
SECTION 6.6 Rights of Holders to Receive
Payment. . . . . . . . . . . . . . . 27
SECTION 6.7 Collection Suit by Trustee . . . . . 28
SECTION 6.8 Trustee May File Proofs of Claim . . 28
SECTION 6.9 Priorities . . . . . . . . . . . . . 29
SECTION 6.10 Undertaking for Costs. . . . . . . . 29
SECTION 6.11 Limitation on Suits. . . . . . . . . 29
ARTICLE 7
TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 7.1 Duties of Trustee. . . . . . . . . . 30
SECTION 7.2 Rights of Trustee. . . . . . . . . . 31
SECTION 7.3 Individual Rights of Trustee . . . . 32
SECTION 7.4 Trustee's Disclaimer . . . . . . . . 32
SECTION 7.5 Notice of Defaults . . . . . . . . . 33
SECTION 7.6 Reports by Trustee to Holders. . . . 33
SECTION 7.7 Compensation and Indemnity . . . . . 33
SECTION 7.8 Replacement of Trustee . . . . . . . 34
SECTION 7.9 Successor Trustee by Merger, etc.. . 35
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SECTION 7.10 Eligibility; Disqualification. . . . 35
SECTION 7.11 Preferential Collection of Claims
Against Company. . . . . . . . . . . 36
ARTICLE 8
SATISFACTION AND DISCHARGE OF INDENTURE . . . . . . . . . . 36
SECTION 8.1 Satisfaction, Discharge and
Defeasance of the Securities . . . . 36
SECTION 8.2 Satisfaction and Discharge of
Indenture. . . . . . . . . . . . . . 37
SECTION 8.3 Survival of Certain Obligations. . . 37
SECTION 8.4 Application of Trust Money . . . . . 38
SECTION 8.5 Paying Agent to Repay Monies Held. . 38
SECTION 8.6 Return of Unclaimed Monies . . . . . 38
SECTION 8.7 Reinstatement. . . . . . . . . . . . 39
ARTICLE 9
AMENDMENTS AND WAIVERS. . . . . . . . . . . . . . . . . . . 39
SECTION 9.1 Amendments and Waivers Without
Consent of Holders . . . . . . . . . 39
SECTION 9.2 Amendments and Waivers with Consent
of Holders . . . . . . . . . . . . . 40
SECTION 9.3 Compliance with Trust Indenture Act. 41
SECTION 9.4 Revocation and Effect of Consents. . 41
SECTION 9.5 Notation on or Exchange of
Securities . . . . . . . . . . . . . 42
SECTION 9.6 Trustee to Sign Amendments, etc. . . 42
ARTICLE 10
CONVERSION OF SECURITIES. . . . . . . . . . . . . . . . . . 42
SECTION 10.1 Right of Conversion; Conversion
Price. . . . . . . . . . . . . . . . 42
SECTION 10.2 Issuance of Shares on Conversion . . 43
SECTION 10.3 No Adjustment for Interest or
Dividends. . . . . . . . . . . . . . 44
SECTION 10.4 Adjustment of Conversion Price . . . 44
SECTION 10.5 Notice of Adjustment of Conversion
Price. . . . . . . . . . . . . . . . 47
SECTION 10.6 Notice of Certain Corporate Action . 48
SECTION 10.7 Taxes on Conversions . . . . . . . . 49
SECTION 10.8 Fractional Shares. . . . . . . . . . 49
SECTION 10.9 Cancellation of Converted Securities 49
SECTION 10.10 Provisions in Case of Consolidation,
Merger or Sale of Assets . . . . . . 50
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SECTION 10.11 Disclaimer by Trustee of
Responsibility for Certain Matters . 50
SECTION 10.12 Covenant to Reserve Shares . . . . . 51
ARTICLE 11
SUBORDINATION; SENIORITY. . . . . . . . . . . . . . . . . . 51
SECTION 11.1 Securities Subordinated to Senior
Indebtedness . . . . . . . . . . . . 51
SECTION 11.2 Company Not to Make Payments with
Respect to Securities in Certain
Circumstances. . . . . . . . . . . . 52
SECTION 11.3 Subrogation of Securities. . . . . . 54
SECTION 11.4 Authorization by Holders of
Securities . . . . . . . . . . . . . 56
SECTION 11.5 Notices to Trustee . . . . . . . . . 56
SECTION 11.6 Trustee's Relation to Senior
Indebtedness . . . . . . . . . . . . 57
SECTION 11.7 No Impairment of Subordination . . . 57
SECTION 11.8 Article 11 Not To Prevent Events
of Default . . . . . . . . . . . . . 58
SECTION 11.9 Paying Agents other than the
Trustee. . . . . . . . . . . . . . . 58
SECTION 11.10 Securities Senior to Subordinated
Indebtedness . . . . . . . . . . . . 58
ARTICLE 12
MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 12.1 Trust Indenture Act Controls . . . . 58
SECTION 12.2 Notices. . . . . . . . . . . . . . . 58
SECTION 12.3 Communications by Holders with Other
Holders. . . . . . . . . . . . . . . 60
SECTION 12.4 Certificate and Opinion as to
Conditions Precedent . . . . . . . . 60
SECTION 12.5 Statements Required in Certificate
and Opinion. . . . . . . . . . . . . 60
SECTION 12.6 Rules by Trustee and Agents. . . . . 61
SECTION 12.7 Record Date. . . . . . . . . . . . . 61
SECTION 12.8 Legal Holidays . . . . . . . . . . . 61
SECTION 12.9 Governing Law. . . . . . . . . . . . 61
SECTION 12.10 No Adverse Interpretation of Other
Agreements . . . . . . . . . . . . . 61
SECTION 12.11 No Recourse Against Others . . . . . 61
SECTION 12.12 Successors . . . . . . . . . . . . . 62
SECTION 12.13 Multiple Counterparts. . . . . . . . 62
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SECTION 12.14 Table of Contents, Headings, etc.. . 62
SECTION 12.15 Severability . . . . . . . . . . . . 62
EXHIBIT A
FORM OF SECURITY. . . . . . . . . . . . . . . . . . . . . . 64
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INDENTURE dated as of May 23, 1996 by and between Sterling House
Corporation, a Kansas corporation (the "Company"), and Fleet National Bank, a
national banking association, as trustee ("Trustee").
RECITALS OF THE COMPANY
Each party agrees as follows for the benefit of the other party and for
the equal and ratable benefit of the Holders of the Company's 6.75%
Convertible Subordinated Debentures due 2006 (the "Securities"):
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1 DEFINITIONS.
"Affiliate" means any Person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company.
For the purposes of this definition, "control" (including, with correlative
meanings, the terms "controlled by" and "under common control with"), as used
with respect to any Person, shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of the management
or policies of such Person, whether through the ownership of voting
securities or by agreement or otherwise.
"Agent" means any Registrar, Paying Agent, Conversion Agent, co-registrar
or agent for service of notices and demands.
"Bankruptcy Law" means Title 11 of the U.S. Code or any similar Federal or
State law for the relief of debtors.
"Board of Directors of the Company" means the Board of Directors of the
Company or any committee of the Board of Directors of the Company.
"Board Resolution" means a resolution certified by the Secretary or an
Assistant Secretary of the Company to have been duly adopted by the Board of
Directors of the Company and to be in full force and effect on the date of
such certification, and delivered to the Trustee.
"Business Day" means a day that is not a Legal Holiday.
"Capital Stock" means any and all shares or other equivalents (however
designated) of capital stock, including all common stock and all preferred
stock, in the case of corporation, or partnership interests or other
equivalents (however designated) in the case of a partnership or common
shares of beneficial interest or other equivalents (however designated) in
the case of a trust.
"Closing Price" means with respect to the shares of Capital Stock of the
Company on any day, (i) the reported last sale price regular way or, in case
no such reported sale takes place on such day, the average of the reported
closing bid and asked prices regular way, in either case on the American
Stock Exchange, or (ii) if the shares of Capital Stock are not listed or
admitted to trading on the American Stock Exchange, the reported last sale
price regular way or, in case no such reported sale takes place on such day,
the average of the reported closing bid and asked prices regular way, in
either case on the principal national securities exchange on which the shares
of Capital Stock are listed or admitted to trading, or (iii) if the shares of
Capital Stock are not listed or admitted to trading on any national
securities exchange, the average of the closing bid and asked prices as
furnished by any New York Stock Exchange member firm selected from time to
time by the Company for that purpose.
"Company" means the party named as such in this Indenture until a
successor replaces it pursuant to this Indenture and thereafter means the
successor.
"Corporate Trust Office" means the office of the Trustee at which at any
particular time its corporate trust business shall be principally
administered, which office at the date of execution of this Indenture is
located at 000 Xxxxxxxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxx Xxxxxx 00000.
"Custodian" means any receiver, trustee, liquidator or similar official
under any Bankruptcy Law.
"Default" means any event which is, or after notice or passage of time or
both would be, an Event of Default.
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"Dollar" or "$" means the lawful money of the United States of America.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Holder" or "Securityholder" means the Person in whose name a Security is
registered on the Security Register.
"Indebtedness" as applied to any Person, means, without duplication: (i)
all indebtedness for borrowed money whether or not evidenced by a promissory
note, draft or similar instrument; (ii) that portion of obligations with
respect to any lease that is properly classified as a liability on a balance
sheet in accordance with generally accepted accounting principles; (iii)
notes payable and drafts accepted representing extensions of credit; (iv) any
balance owed for all or any part of the deferred purchase price of property
or services, which purchase price is due more than six months from the date
of incurrence of the obligation in respect thereof (except any such balance
that constitutes (a) a trade payable or an accrued liability arising in the
ordinary course of business or (b) a trade draft or note payable issued in
the ordinary course of business in connection with the purchase of goods or
services), if and to the extent such debt would appear as a liability upon a
balance sheet of such Person prepared in accordance with generally accepted
accounting principles; (v) any debt of others described in the preceding
clauses (i) through (iv) which such Person has guaranteed or for which it is
otherwise liable; and (vi) any deferral, amendment, renewal, extension,
supplement or refunding of any of the foregoing indebtedness; PROVIDED,
HOWEVER, that, in computing the "Indebtedness" of any Person, there shall be
excluded any particular indebtedness if, upon or prior to the maturity
thereof and at the time of determination of such indebtedness, there shall
have been deposited with a depository in trust money (or evidences of
indebtedness if permitted by the instrument creating such indebtedness) in
the necessary amount to pay, redeem or satisfy such indebtedness as it
becomes due, and the amount so deposited shall not be included in any
computation of the assets of such Person.
"Indenture" means this Indenture as amended or supplemented from time to
time.
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"Officer" means the Chairman of the Board, the President, any Vice
President, the Treasurer, the Secretary or the Controller of the Company.
"Officers' Certificate" means a certificate signed by two Officers or by
an Officer and an Assistant Treasurer, Assistant Secretary or Assistant
Controller of the Company. See Sections 12.4 and 12.5.
"Opinion of Counsel" means a written opinion from Xxxxxxx & Xxxxxx or any
other legal counsel who is reasonably acceptable to the Trustee. The counsel
may be an employee of or counsel to the Company or the Trustee. See Sections
12.4 and 12.5.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government (or any agency, instrumentality or political subdivision thereof).
"Redemption Date" when used with respect to any Security to be redeemed,
means the date fixed for such redemption pursuant to this Indenture.
"Redemption Price" when used with respect to any Security to be redeemed,
means the price fixed for such redemption pursuant to this Indenture as
specified in the form of Security annexed hereto as Exhibit A.
"Registration Statement" means the registration statement that the Company
is required to file with the Securities and Exchange Commission pursuant to
that certain Registration Rights Agreement, dated as of May 17, 1996, by and
between the Company and the Holders from time to time of the Securities.
"Restricted Security", means the Securities, upon original issuance
thereof, and all Securities issued upon registration of transfer thereof or
in exchange therefor, and at all times subsequent thereto, until, in the case
of any such Securities the earlier of the following: (i) such Securities
have been effectively registered under Section 5 of the Securities Act and
disposed of in accordance with a registration statement covering them or (ii)
such Securities have been
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distributed to the public pursuant to Rule 144 of the Securities Act (or any
similar provisions then in force). When any Security which is a Restricted
Security ceases to be a Restricted Security, such Restricted Security shall
no longer be subject to the transfer restrictions as imposed by Section
2.5(2) hereof.
"Securities Act" means the Securities Act of 1933, as amended from time to
time.
"Securities" means the securities in the form of Exhibit A hereto that are
issued under this Indenture as amended or supplemented from time to time.
"Senior Indebtedness" means the principal, premium, if any, and unpaid
interest (including interest accruing on or after the filing of any petition
in bankruptcy or for reorganization relating to the Company whether or not a
claim for post-filing interest is allowed in such proceeding), fees, charges,
expenses, reimbursement and indemnification obligations, and all other
amounts payable under or in respect of Indebtedness of the Company, whether
any such Indebtedness exists as of the date of this Indenture or shall
hereafter be created, incurred, assumed or guaranteed; PROVIDED, HOWEVER,
that Senior Indebtedness shall not include (A) Indebtedness owed to a
Subsidiary, (B) Indebtedness of the Company which is expressly pari passu to
the Securities or (C) Subordinated Indebtedness.
"Subordinated Indebtedness" means the principal, premium, if any, and
interest on any Indebtedness of the Company which by its terms is expressly
subordinated in right of payment to the Securities.
"Subsidiary" means a Person the majority of whose voting stock is owned by
the Company or a subsidiary of the Company. Voting stock is Capital Stock
having voting power under ordinary circumstances to elect directors or
similar positions.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code Sections 77aaa
-77bbbb) as amended by the Trust Indenture Reform Act of 1990 and as in
effect on the date of this Indenture.
"Trustee" means the party named as such in this Indenture until a
successor replaces it pursuant to this Indenture and thereafter means the
successor.
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"Trust Officer", when used with respect to the Trustee, means an officer
of the Trustee customarily performing functions in corporate trust matters or
any other officer of the Trustee to whom such matter is referred because of
his knowledge of and familiarity with the particular subject.
"United States" means the United States of America.
SECTION 1.2 OTHER DEFINITIONS.
TERM DEFINED IN SECTION
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"Company Order" 2.2
"Conversion Agent" 2.3
"conversion price" 10.1
"current market price" 10.4
"DTC" 2.3
"Depository" 2.3
"Event of Default" 6.1
"Legal Holiday" 12.8
"Paying Agent" 2.3
"Payment or Distribution" 11.1
"Registered Accredited
Investor Securities" 2.1
"Registrar" 2.3
"Rule 144A Securities" 2.1
"Rule 13e-3 Transaction" 10.6
"Security Register" 2.3
"U.S. Government Obligations" 8.1
SECTION 1.3 INCORPORATION BY REFERENCE TO TRUST INDENTURE ACT.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture. The
following TIA terms used in this Indenture have the following meanings:
"Commission" means the Securities and Exchange Commission.
"indenture securities" means the Securities.
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"indenture security holder" means 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 or any other
obligor on the indenture securities.
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by Commission rules
have the meanings assigned to them therein.
SECTION 1.4 RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned
to it in accordance with United States generally accepted accounting
principles in effect as of the time as to which such accounting principles
are to be applied;
(3) "or" is not exclusive; and
(4) words in the singular include the plural, and in the plural
include the singular.
ARTICLE 2
THE SECURITIES
SECTION 2.1 FORM; DATING; INCORPORATION OF FORM IN INDENTURE.
The aggregate principal amount of Securities which may be authenticated
and delivered under this Indenture is limited to $35,000,000, except for
Securities authenticated and delivered upon registration of transfer of, or
in exchange for, or in lieu
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of, other Securities pursuant to Sections 2.3, 2.5, 2.6, 2.8, 3.6, 9.5 or
10.1.
The Securities shall be known and designated as the 6.75% Convertible
Subordinated Notes Due 2006 of the Company. Their fixed maturity shall be
June 30, 2006, and they shall bear interest at the rate per annum of 6.75%,
from and including the date of issuance thereof until maturity or earlier
redemption, payable semiannually on June 30 and December 30 commencing
December 30, 1996, until the principal thereof is paid or made available for
payment.
The principal of and premium, if any, and interest on the Securities shall
be payable at the office or agency of the Company in the Borough of
Manhattan, the City of New York maintained for such purpose and at any other
office or agency maintained by the Company for such purpose; provided,
however, that at the option of the Company payment of interest may be made by
check mailed to the address of the Person entitled thereto as such address
shall appear in the Security Register.
The Securities shall be redeemable as provided in Article 3.
The Securities shall be subordinated in right of payment to Senior
Indebtedness, to the extent provided in Article 11.
The Securities shall be convertible as provided in Article 10.
The Securities and the Trustee's certificate of authentication shall be
substantially in the form of Exhibit A which is incorporated in and made part
of this Indenture. The Securities may have notations, legends or
endorsements required by law, stock exchange rules, agreements to which the
Company is subject, or usage. The Company shall approve the form of the
Securities and any notation, legend or endorsement on them. Each Security
shall be dated the date of its authentication.
The terms and provisions contained in the 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,
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expressly agree to such terms and provisions and to be bound thereby.
The Securities (the "Rule 144A Securities") issued to "qualified
institutional buyers"(as such term is defined in Rule 144A under the
Securities Act) will initially be issued in the form of a global Security in
the aggregate principal amount of the Rule 144A Securities, which Security
shall be in substantially the form of Exhibit A hereto, including the
paragraphs referred to in footnotes 1 and 2, and is hereinafter referred to
as the "Rule 144A Global Security."
All other Securities will be issued in fully registered form in
denominations of U.S. $1,000 and integral multiples thereof, which Securities
shall be in substantially the form of Exhibit A hereto, excluding the
information called for by footnote 1 thereto but including the information
called for by footnote 2 thereto, and are hereinafter collectively referred
to as "Registered Accredited Investor Securities."
SECTION 2.2 EXECUTION AND AUTHENTICATION.
Two Officers shall sign the Securities for the Company by manual or
facsimile signature.
If an Officer whose signature is on a Security no longer holds that office
at the time the Trustee authenticates the Security, the Security shall
nevertheless be valid.
A Security shall not be valid until the Trustee manually signs the
certificate of authentication on the Security. Such signature shall be
conclusive evidence that the Security has been authenticated under this
Indenture. Notwithstanding the foregoing, if any Security shall have been
authenticated and delivered hereunder but never issued and sold by the
Company, and the Company shall deliver such Security to the Trustee for
cancellation as provided in Section 2.9, for all purposes of this Indenture
such Security shall be deemed never to have been authenticated and delivered
hereunder and shall never be entitled to the benefits of this Indenture.
The Trustee shall authenticate Securities for original issue in the
aggregate principal amount of up to $35,000,000 upon the execution of the
Indenture and a written order or orders of
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the Company signed by two Officers or by an Officer and an Assistant
Treasurer of the Company (a "Company Order"). The aggregate principal amount
of the Securities outstanding at any time may not exceed that amount.
The Trustee may appoint an authenticating agent to authenticate
Securities. An authenticating agent may authenticate Securities whenever the
Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such agent. An authenticating agent has
the same rights as an Agent to deal with the Company or an Affiliate.
The Securities shall be issuable only in registered form without coupons.
The Securities shall be issuable only in denominations of $1,000 principal
amount and any whole multiples thereof.
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SECTION 2.3 REGISTRAR AND AGENTS.
The Company shall maintain an office or agency where Securities may be
presented for registration of transfer or for exchange ("Registrar"), an
office or agency where Securities may be presented for payment ("Paying
Agent"), an office or agency where Securities may be presented for conversion
("Conversion Agent") and an office or agency where notices and demands to or
upon the Company in respect of the Securities and this Indenture may be
served. The Registrar shall keep a register of the Securities (the "Security
Register") and of their transfer and exchange. The Company may have one or
more co-registrars, one or more additional Paying Agents and one or more
additional Conversion Agents. The Company or any Subsidiary may act as
Paying Agent and/or Conversion Agent. The term "Paying Agent" includes any
additional paying agent and the term "Conversion Agent" includes any
additional conversion agent.
The Company may change any Paying Agent, Registrar, Conversion Agent or
Co-Registrar on sixty (60) days' prior written notice to the Trustee. The
Company shall notify the Trustee in writing of the name and address of any
such Agent. If the Company fails to maintain a Registrar, Paying Agent,
Conversion Agent or agent for service of notices and demands, or fails to
give the foregoing notice, the Trustee shall act as such.
The Company initially appoints the Trustee as Registrar, Paying Agent,
Conversion Agent and agent for service of notices and demands.
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With respect to the Securities issuable or issued in whole or in part in
the form of Rule 144A Global Securities, the Company hereby appoints The
Depository Trust Company ("DTC"), at present located at 00 Xxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx, 00000 as the depository for the Rule 144A Global Securities
upon the terms and subject to the conditions herein set forth. (DTC and its
successor or successors as such depository are herein called the
"Depository.")
SECTION 2.4 PAYING AGENT TO HOLD MONEY IN TRUST.
At least one Business Day prior to each due date of the principal of,
premium if any, and interest on any Securities, the Company shall deposit
with each Paying Agent a sum sufficient to pay such principal, premium, if
any, and interest so becoming due. The Company shall require each Paying
Agent other than the Trustee to agree in writing that it will hold in trust
for the benefit of Holders of Securities or the Trustee all money held by the
Paying Agent for the payment of principal of, premium if any, or interest on
the Securities and to notify the Trustee of any default by the Company (or
any other obligor on the Securities) in making any such payment. If the
Company or a Subsidiary acts as Paying Agent, it shall on or before each due
date of the principal of, premium, if any, or interest on any Securities
segregate the money and hold it as a separate trust fund. The Company at any
time may require a Paying Agent to pay all money held by it to the Trustee
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
forthwith pay to the Trustee all sums so held in trust by such Paying Agent.
Upon doing so, the Paying Agent (if other than the Company or a Subsidiary
thereof) shall have no further liability for the money.
The final installment of principal of and premium, if any, on this Security
shall be payable only upon surrender of this Security at the office or agency of
the Company maintained for such purpose. Payments of principal of and premium,
if any, and interest on this Security shall be made at the office or agency of
the Company maintained for such purpose, or, in the case of any such payments
other than the final payment of principal and premium, if any, at the Company's
option, by check mailed to the Person entitled thereto at such Person's address
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last appearing on the Security Register maintained by the Registrar.
SECTION 2.5 TRANSFER AND EXCHANGE.
(1) When a Security is presented to the Registrar or a co-registrar with
a request to register the transfer thereof, the Registrar or co-registrar
shall register the transfer as requested, and when Securities are presented
to the Registrar or a co-registrar with a request to exchange them for an
equal principal amount of Securities of other authorized denominations, the
Registrar shall make the exchange as requested provided that every Security
represented or surrendered for registration of transfer or exchange shall be
duly endorsed and accompanied by a written instrument of transfer
satisfactory to the Company and the Registrar duly executed by the Company or
such Holder's attorney-in-fact duly authorized in writing; PROVIDED, FURTHER,
that the Registrar or co-registrar, as the case may be, shall not register
the transfer of such Security if such Security is a Restricted Security
unless the conditions in Section 2.5(2) hereof shall have been satisfied.
The Holder of each Security, including each Restricted Security, by such
Holder's acceptance thereof, agrees to be bound by the transfer restrictions
set forth herein and in the legend on such Security.
(2) Whenever any Restricted Security is presented or surrendered for
registration of transfer or exchange for a Security registered in a name
other than that of the holder, no registration of transfer or exchange shall
be made unless:
(a) The registered Holder presenting such Restricted Security for
transfer shall have certified to the Trustee in writing that the registered
Holder is transferring the Restricted Security to the Company;
(b) The Trustee has received written certification from the
registered Holder, and a written opinion of counsel acceptable in form and
substance to the Company and the Trustee, indicating that the transfer is
being made pursuant to an available exemption from, or a transaction not
otherwise subject to, the registration requirements of the Securities Act;
or
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(c) In the case of Rule 144A Securities, the registered Holder
presenting such Restricted Security for transfer shall have certified to
the Trustee in writing that such registered Holder is transferring such
Restricted Securities to a "qualified institutional buyer" (as defined in
Rule 144A under the Securities Act) in compliance with the exemption from
registration as provided by Rule 144A under the Securities Act.
For purposes of this Section 2.5(2), such certification to the Trustee in
writing shall be in the form of the Transfer Notice set forth on the reverse
of such Security.
(3) Each certificate evidencing Restricted Securities shall bear a legend
in substantially the following form:
THIS SECURITY HAS BEEN ACQUIRED BY THE HOLDER FOR THE PURPOSE OF INVESTMENT
AND NOT WITH A VIEW TO OR FOR SALE IN CONNECTION WITH ANY DISTRIBUTION.
THIS SECURITY (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS AND NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION
HEREIN MAY BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS
SECURITY IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION
FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE
144A THEREUNDER. THE HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE HEREOF,
REPRESENTS, ACKNOWLEDGES AND AGREES FOR THE BENEFIT OF THE COMPANY THAT:
(I) IT HAS ACQUIRED A "RESTRICTED" SECURITY WHICH HAS NOT BEEN REGISTERED
UNDER THE SECURITIES ACT; (II) IT WILL NOT OFFER, SELL OR OTHERWISE
TRANSFER THIS SECURITY EXCEPT (A) TO STERLING HOUSE CORPORATION, (B)
PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE
UNDER THE SECURITIES ACT, (C) IN THE CASE OF A HOLDER WHO IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT),
FOR SO LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A,
TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE
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144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS
OF RULE 144A, OR (D) IN ACCORDANCE WITH RULE 144 UNDER THE SECURITIES
ACT OR PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT, (AND CONFIRMED IN AN OPINION OF
COUNSEL ACCEPTABLE IN FORM AND SUBSTANCE TO THE ISSUER OF THIS SECURITY
IF THE ISSUER SO REQUESTS) AND, IN EACH CASE, IN ACCORDANCE WITH THE
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY
OTHER APPLICABLE JURISDICTION; AND (III) IT WILL, AND EACH SUBSEQUENT
HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS SECURITY FROM IT OF
THE RESALE RESTRICTIONS SET FORTH IN (II) ABOVE.
The above legend may be removed from a certificate when it no longer
evidences a Security which is a Restricted Security.
(4) To permit registrations of transfers and exchanges, the Company shall
issue and the Trustee or any authenticating agent shall authenticate
Securities at the Registrar's or co-registrar's request. No service charge
shall be made for any registration of transfer or exchange of Securities but
the Company may require payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto, but this
provision shall not apply to any exchange pursuant to Section 2.8, 3.6, 9.5
or 10.2 not involving any transfer.
(5) The Registrar shall not be required (i) to issue, register the
transfer of or exchange Securities during a period beginning at the opening
of business 15 days before the day of any selection of Securities for
redemption under Section 3.2 and ending at the close of business on the day
of selection, or (ii) to register the transfer or exchange of any Security so
selected for redemption in whole or in part, except the unredeemed portion of
any Security being redeemed in part.
(6) Any Restricted Security as to which the restrictions on transfer set
forth in Section 2.5(2) hereof shall have expired in accordance with their terms
or shall have terminated may, upon surrender of such Restricted Security for
exchange to the Trustee in accordance with the provisions of this Section 2.5(6)
(accompanied, in the event that such restrictions on transfer have terminated by
reason of a transfer pursuant to
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Rule 144 (or any successor provision), by an opinion of counsel reasonably
acceptable to the Company, addressed to the Company and the Trustee and in
form and scope satisfactory to the Company, to the effect that the transfer
of such Restricted Security has been made in compliance with Rule 144 (or
such successor provision)), be exchanged for a new Security, of like tenor
and aggregate principal amount, which shall not bear the restrictive legend
required by Section 2.5(3) hereof. The Company shall promptly inform the
Trustee in writing of the effective date of any registration statement
registering the Securities under the Securities Act.
(7) If the Security so surrendered for exchange is a Registered
Accredited Investor Security and the Holder thereof requests in writing that
such Registered Accredited Investor Security be exchanged for an interest in
the Rule 144A Global Security, such Registered Accredited Investor Security
will be exchangeable into an equal aggregate principal amount of beneficial
interests in the Rule 144A Global Security; PROVIDED, HOWEVER, that, if such
Registered Accredited Investor Security is a Restricted Security, such
exchange may only be made if such Holder certifies to the Trustee in writing
that such Holder is a "qualified institutional buyer" (as defined in Rule
144A under the Securities Act) by completing the Transfer Notice on the
reverse of such Security. Upon any exchange as provided in the immediately
preceding sentence, the Trustee shall cancel such Registered Accredited
Investor Security and cause, or direct any custodian for the Rule 144A Global
Security to cause, in accordance with the standing instructions and
procedures existing between the Depository and any such custodian, the
aggregate principal amount of Securities represented by the Rule 144A Global
Security to be increased accordingly. If no Rule 144A Global Securities are
then outstanding, the Company shall issue and the Trustee shall authenticate
a new Rule 144A Global Security in the appropriate principal amount.
Any person having a beneficial interest in a Rule 144A Global Security may
upon request exchange such beneficial interest for a Registered Accredited
Investor Security only as provided in this paragraph. Upon receipt by the
Company and the Trustee of (i) written instructions (or such other form of
instructions as is customary) on behalf of any person having a beneficial
interest in a Rule 144A Global Security and (ii) in the case of a Restricted
Security, the following additional
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information and documents (all of which may be submitted by facsimile):
(A) if such beneficial interest is being transferred to the person
designated as being the beneficial owner, a certification to that
effect from such person; or
(B) if such beneficial interest is being transferred to a person
other than the person designated as being the beneficial owner,
the provisions of Section 3(b) hereof have been satisfied;
in which case the Trustee or any custodian for the Rule 144A Global Security,
at the direction of the Trustee, shall, in accordance with the standing
instructions and procedures existing between the Depository and such
custodian, cause the aggregate principal amount of the Rule 144A Global
Security to be reduced accordingly and, following such reduction, the Company
shall execute and the Trustee shall authenticate and deliver to the
transferee a Registered Security in the appropriate principal amount and, if
such Security is a Restricted Security, including the appropriate legend.
Securities issued in exchange for a beneficial interest in the Rule 144A
Global Security pursuant to this paragraph shall be registered in such names
and in such authorized denominations as shall be instructed to the Trustee.
The Trustee shall deliver such Securities to the persons in whose names such
Securities are so registered.
(8) Notwithstanding any other provision of this Agreement (other than the
provisions set forth in Section 3(c) hereof), the Rule 144A Global Security
may not be transferred as a whole except by the Depository to a nominee of
the Depository or by a nominee of the Depository to the Depository or another
nominee of the Depository or by Depository or any such nominee to a successor
Depository or a nominee of such successor Depository.
(9) If at any time either (i) the Depository for the Rule 144A Global
Security notifies the Company that the Depository is unwilling or unable to
continue as Depository for the Rule 144A Global Security and a successor
Depository for the Rule 144A Global Security is not appointed by the Company
within 90 days after delivery of such notice, or (ii) the Company, at
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its sole discretion, notifies the Trustee in writing that it elects to cause
the issuance of Registered Securities under this Indenture, then the Company
shall execute, and the Trustee shall authenticate and deliver, Registered
Securities in an aggregate principal amount equal to the principal amount of
the Rule 144A Global Security in exchange for such Rule 144A Global Security.
(10) At such time as all beneficial interests in the Rule 144A Global
Security have either been exchanged for Registered Securities, redeemed,
repurchased or canceled, the Rule 144A 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 the Rule 144A Global Security is
exchanged for Registered Securities, redeemed, repurchased or canceled, the
principal amount of Securities represented by the Rule 144A Global Security
shall be reduced accordingly and an endorsement shall be made on the Rule
144A Global Security, by the Trustee or any custodian therefor, at the
direction of the Trustee, to reflect such reduction.
(11) The transfer and exchange of the Rule 144A Global Security or
beneficial interests therein shall be effected through the Depository, in
accordance with this Indenture and the procedures of the Depository therefor,
which shall include restrictions on transfer comparable to those set forth
herein to the extent required by the Securities Act.
SECTION 2.6 REPLACEMENT SECURITIES.
If a mutilated Security is surrendered to the Trustee or if the Holder of a
Security presents evidence to the satisfaction of the Company and the Trustee
that the Security has been lost, destroyed or wrongfully taken, the Company
shall issue and the Trustee shall authenticate a new Security in replacement
of and substitution for such Security if the requirements of the Trustee and
the Company are met. An indemnity bond may be required by the Company or the
Trustee that is sufficient in the judgment of the Company to protect the
Company and is sufficient in the judgment of the Trustee to protect the
Trustee or any Agent from any loss which it may suffer if a Security is
replaced pursuant to this Section 2.6. The Company and the Trustee may
charge for its expense in replacing a Security.
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In case any such mutilated, destroyed, lost or stolen Security has become
or is about to become due and payable, the Company in its sole discretion may,
instead of issuing a new Security, pay or authorize the payment or convert or
authorize the conversion of such Security.
Every new Security issued pursuant to this Section in lieu of any
destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities duly issued hereunder.
SECTION 2.7 OUTSTANDING SECURITIES.
Securities outstanding at any time are all Securities theretofore
authenticated and delivered under this Indenture except: (a) Securities
theretofore canceled by the Trustee or delivered to the Trustee for
cancellation; and (b) Securities in exchange for or in lieu of which other
Securities have been authenticated and delivered pursuant to this Indenture,
other than any Securities in respect of which there shall have been presented to
the Trustee proof satisfactory to it that such Securities are held by a bona
fide purchaser in whose hands such Securities are valid obligations of the
Issuer; PROVIDED, that in determining whether the Securityholders of the
requisite principal amount of outstanding Securities are present at a meeting of
Securityholders for quorum purposes or have voted or taken or concurred in any
action under this Indenture, including the making of any request, demand,
authorization, direction, notice, consent or waiver hereunder, Securities owned
by the Company or any other obligor upon the Securities or any Affiliate of the
Company or such other obligor shall be disregarded and deemed not outstanding,
except that, in determining whether the Trustee shall be protected in relying
upon any such determination as to the presence of a quorum or upon any such
request, demand, authorization, direction, notice, consent or waiver, only
Securities which a Trust Officer of the Trustee actually knows to be so owned
shall be disregarded.
If a Security is replaced pursuant to Section 2.7, it ceases to be
outstanding until the Trustee receives proof
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satisfactory to it that the replaced Security is held by a bona fide
purchaser.
If the Paying Agent (other than the Company or a Subsidiary) holds on a
Redemption Date or maturity date money deposited with it by or on behalf of the
Company sufficient to pay the principal of, premium, if any, and accrued
interest on Securities payable on that date, then on and after that date such
Securities cease to be outstanding and interest on them ceases to accrue.
A Security does not cease to be outstanding because the Company or an
Affiliate holds the Security.
SECTION 2.8 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 non-material variations that the Company considers appropriate for
temporary Securities. Without unreasonable delay, the Company shall prepare
and the Trustee shall authenticate definitive Securities in exchange for
temporary Securities upon written order of the Company signed by two
Officers. Until so exchanged, temporary Securities represent the same rights
as definitive Securities. Upon request of the Trustee, the Company shall
provide a certificate to the effect that the temporary Securities meet the
requirements of the second sentence of this Section 2.8.
SECTION 2.9 CANCELLATION.
The Company at any time may deliver Securities to the Trustee for
cancellation. The Registrar, the Paying Agent and the Conversion Agent shall
forward to the Trustee any Securities surrendered to them for transfer,
exchange, payment or conversion. The Trustee shall cancel all Securities
surrendered for transfer, exchange, payment or conversion and destroy canceled
Securities and deliver a certificate of such destruction to the Company unless
the Company directs the Trustee in writing prior to such destruction to deliver
canceled Securities to the Company. Subject to Sections 2.6, 3.6 and the second
paragraph of Section 10.2, the Company may not issue Securities to replace
Securities that it has previously paid or delivered to the
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Trustee for cancellation or that a Securityholder has converted pursuant to
Article 10 hereof.
SECTION 2.10 DEFAULTED INTEREST.
If the Company defaults in a payment of interest on Securities, it shall
pay the defaulted interest to the Persons who are Holders of the Securities on a
subsequent special record date. After the deposit by the Company with the
Trustee of money sufficient to pay such defaulted interest, the Trustee shall
fix the special record date and payment date. Each such special record date
shall be not less than 10 days prior to such payment date. Each such payment
date shall be not more than 60 days after the deposit by the Company of money to
pay the defaulted interest. At least 15 days before the special record date,
the Company shall mail to each Holder of a Security, with a copy to the Trustee,
a notice that states the special record date, the payment date, and the amount
of defaulted interest to be paid.
SECTION 2.11 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
Securityholders. If the Trustee is not the Registrar, the Registrar shall
furnish to the Trustee at least seven Business Days prior to each semiannual
interest payment date and at such other times as the Trustee may reasonably
request in writing a list in such form and as of such date as the Trustee may
require of the names and addresses of Securityholders upon which the Trustee may
conclusively rely. The Trustee may destroy any such list upon receipt of a
replacement list. The Paying Agent will solicit from each Securityholder a
certification of social security number or taxpayer identification number in
accordance with its customary practice and as required by law, unless the Paying
Agent is in possession of such certification. Each Paying Agent is authorized
to impose back-up withholding with respect to payments to be made to
Securityholders to the extent required by law.
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SECTION 2.12 PERSONS DEEMED OWNERS.
Prior to registration of transfer, the Company, the Trustee and any agent
of the Company or the Trustee may treat the Person in whose name such Security
is registered as the owner of such Security and neither the Company, the Trustee
nor any agent of the Company or the Trustee shall be affected by notice to the
contrary.
SECTION 2.13 CUSIP NUMBER.
The Company shall use a "CUSIP" number when issuing the Rule 144A
Securities, but shall not use a "CUSIP" number when issuing Registered
Accredited Investor Securities. The Trustee may use the CUSIP number in notices
of redemption or exchange as a convenience to Securityholders; provided that any
such notice may state that no representation is made as to the correctness or
accuracy of the CUSIP number printed in the notice or on the Securities and that
reliance may be placed only on the other identification numbers printed on the
Securities.
ARTICLE 3
REDEMPTION
SECTION 3.1 NOTICES TO TRUSTEE.
If the Company wants to redeem the Securities pursuant to the optional
redemption provisions of Paragraph 5 of the Securities, it shall notify the
Trustee of the Redemption Date and the principal amount of Securities to be
redeemed. The notice shall be in writing and accompanied by an Officers'
Certificate stating that the redemption complies with the provisions of this
Indenture. Redemptions provided for in Paragraph 5 of the Securities shall be
effected as provided in said Paragraph 5 or as otherwise agreed upon by the
Company and the Trustee.
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SECTION 3.2 SELECTION OF SECURITIES TO BE REDEEMED.
If less than all the Securities are to be redeemed, the Trustee shall
select the Securities to be redeemed pro rata or by lot or by any other method
that the Trustee considers fair and appropriate under the circumstances. The
Trustee shall promptly notify the Company of the Securities to be so called for
redemption. The Trustee shall make the selection from Securities outstanding
and not previously called for redemption. The Trustee may select for redemption
portions of the principal of Securities that have denominations larger than
$1,000 principal amount. Securities and portions of them it selects shall be in
principal amounts of $1,000 or multiples thereof. Provisions of this Indenture
that apply to Securities called for redemption also apply to portions of
Securities called for redemption. The Trustee's selection of Securities for
redemption by any method authorized by this Section 3.2 shall be conclusively
deemed reasonable.
Upon any redemption of less than all the Securities, the Company and the
Trustee, for the purpose of selecting Securities to be redeemed, may treat as
outstanding any Securities surrendered for conversion during the period of 15
days next preceding the selection of the Securities and need not treat as
outstanding any Security authenticated and delivered during such period in
exchange for the unconverted portion of any Security converted in part during
such period.
SECTION 3.3 NOTICE OF REDEMPTION BY THE COMPANY.
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 to each Holder of
Securities to be redeemed, with a copy to the Trustee.
The notice shall identify the Securities to be redeemed and shall state:
(1) the Redemption Date;
(2) the Redemption Price;
(3) the Conversion Price;
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(4) the name and address of the Paying Agent and the Conversion
Agent;
(5) that Securities called for redemption may be converted at any
time before the close of business on the Redemption Date and, if not
converted prior to the close of business on the Redemption Date, the right
of conversion will be lost;
(6) that Holders who want to convert Securities must satisfy the
requirements of Paragraph 7 thereof;
(7) that Securities called for redemption must be surrendered to the
Paying Agent to collect the Redemption Price;
(8) that interest on Securities called for redemption ceases to
accrue on and after the Redemption Date; and
(9) if any Security is being redeemed in part, the portion of the
principal amount of such Security to be redeemed and that, after the
Redemption Date, upon surrender of such Security, a new Security or
Securities in principal amount equal to the unredeemed portion thereof will
be issued.
At the Company's written request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense. If a CUSIP
number is listed in such notice or printed on the Security, the notice shall
state that no representation is made as to the correctness or accuracy of such
CUSIP number.
SECTION 3.4 EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is mailed, Securities called for redemption
become due and payable on the applicable Redemption Date and at the applicable
Redemption Price. Upon surrender to the Paying Agent, such Securities shall be
paid at the Redemption Price, plus accrued interest to the Redemption Date.
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SECTION 3.5 DEPOSIT OF REDEMPTION PRICE.
On or before the Redemption Date, the Company shall deposit with the Paying
Agent (or if the Company or a Subsidiary is the Paying Agent, shall segregate
and hold in trust or cause such Subsidiary to segregate and hold in trust) in
immediately available funds money sufficient to pay the Redemption Price of and
accrued interest on all Securities to be redeemed on that date. The Trustee or
the Paying Agent shall return to the Company any money so deposited not required
for that purpose.
SECTION 3.6 SECURITIES REDEEMED IN PART.
Upon surrender of a Security that is redeemed in part, the Trustee shall
authenticate for the Holder, at the expense of the Company, a new Security equal
in principal amount to the unredeemed portion of the Security surrendered.
ARTICLE 4
COVENANTS
SECTION 4.1 PAYMENT OF THE SECURITIES.
The Company shall pay the principal of, premium, if any, and interest on
the Securities on the dates and in the manner provided in the Securities and
this Indenture. An installment of principal, premium, if any, or interest shall
be considered paid on the date it is due if the Trustee or Paying Agent (if
other than the Company or a Subsidiary) holds on that date money designated for
and sufficient to pay the installment. The Company shall pay interest on
overdue principal and premium, if any, at the rate borne by the Security; it
shall pay interest, including post-petition interest in the event of a
proceeding under any Bankruptcy Law, on overdue installments of interest at the
same rate to the extent lawful.
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SECTION 4.2 COMMISSION REPORTS.
The Company shall file with the Trustee, promptly after filing with the
Commission, copies of the annual reports and of the information, documents and
other reports (or copies of such portions of any of the foregoing as the
Commission may by rules and regulations prescribe) which the Company is required
to file with the Commission pursuant to Section 13 or 15(d) of the Exchange Act.
The Company shall also comply with the other provisions of TIA Section 314(a).
So long as the Securities remain outstanding, the Company shall cause its
annual reports to shareholders (containing audited financial statements) and any
other financial reports furnished by it to shareholders to be mailed to the
Holders at their addresses appearing in the Security Register maintained by the
Registrar.
For so long as any of the Rule 144A Securities remain outstanding and are
"restricted securities" within the meaning of Rule 144(a)(3) under the
Securities Act, the Company covenants and agrees that it shall, during any
period in which it is not subject to Section 13 or 15(d) of the Exchange Act,
make available to any holder or beneficial holder of securities which continue
to be restricted securities in connection with any sale thereof to any
prospective purchase of such securities from such holder or beneficial holder,
the information specified in, and meeting the requirements of the Rule
144A(d)(4) under the Securities Act.
SECTION 4.3 WAIVER OF STAY, EXTENSION OR USURY LAWS.
The Company expressly waives (to the extent that it may lawfully do so) any
stay or extension law or any usury law or other law that would prohibit or
forgive the Company from paying all or any portion of the principal of, premium,
if any, or interest on Securities as contemplated herein, wherever enacted, now
or at any time hereafter in force, or that may affect the covenants or the
performance of this Indenture, and the Company (to the extent that it may
lawfully do so) 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
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the execution of every such power as though no such law had been enacted.
SECTION 4.4 NOTICE OF DEFAULT.
The Company will, so long as any Securities are outstanding, deliver to the
Trustee, within 10 days of becoming aware of any Default or Event of Default in
the performance of any covenant, agreement or condition in this Indenture, an
Officers' Certificate specifying such Default or Event of Default, the period of
existence thereof and what action the Company is taking or proposes to take with
respect thereto.
SECTION 4.5 COMPLIANCE CERTIFICATES.
The Company will deliver to the Trustee, within 120 days after the end of
each fiscal year of the Company (which as of the date hereof is December 31), a
written statement signed by the principal executive officer, principal financial
officer or principal accounting officer of the Company, stating, as to each
signer thereof:
(1) that a review of the activities of the Company during such year
and of performance under this Indenture has been made under his or her
supervision;
(2) that to the best of his or her knowledge, based on such review,
the Company has kept, observed, performed and fulfilled in all material
respects each and every condition and covenant contained in this Indenture
throughout such year, or, if there has been a default in the fulfillment of
any such condition or covenant, specifying each such default known to him
or her and the nature and status thereof; and
(3) the conversion price (as described in Article 10 of this
Indenture) then in effect.
The Company will give the Trustee written notice of a change in the fiscal
year of the Company, within a reasonable time after such change is effected.
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SECTION 4.6 LIMITATION ON DIVIDENDS AND OTHER DISTRIBUTIONS.
The Company will not declare or pay any dividends or make any distribution
to holders of its Capital Stock (other than dividends or distributions payable
in Capital Stock of the Company), or purchase, redeem or otherwise acquire or
retire for value any of its Capital Stock or permit any Subsidiary to purchase,
redeem or otherwise acquire or retire for value any of the Company's Capital
Stock if at the time of any of the aforementioned actions an Event of Default
has occurred and is continuing or would exist immediately after giving effect to
such action.
Notwithstanding the foregoing, the provisions of this Section 4.6 will not
prevent (i) the payment of any dividend within 60 days after the date of
declaration when the payment would have complied with the foregoing provisions
on the date of declaration; or (ii) the retirement of any share of the Company's
Capital Stock by exchange for, or out of the proceeds of the substantially
concurrent sale (other than to a Subsidiary) of, other shares of its Capital
Stock.
ARTICLE 5
SUCCESSOR CORPORATION
SECTION 5.1 WHEN COMPANY MAY MERGE, ETC.
The Company shall not consolidate with or merge into, or transfer all or
substantially all of its assets to, another Person in any transaction in which
the Company is not the continuing or surviving entity unless (i) the resulting,
surviving or transferee Person is a corporation which assumes by supplemental
indenture, in form satisfactory to the Trustee, all the obligations of the
Company under the Securities and this Indenture; (ii) such corporation is
organized and existing under the laws of the United States, a State thereof or
the District of Columbia although it in turn may be owned by a foreign entity;
(iii) immediately after giving effect to such transaction no Default or Event of
Default shall have happened and be continuing and the Officers' Certificate
referred to in the following clause reflects that such Officers are not aware of
any such Default or
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Event of Default that shall have happened and be continuing, and (iv) the
Company shall have delivered to the Trustee an Officers' Certificate and an
Opinion of Counsel, each stating that such consolidation, merger or transfer
and such supplemental indenture comply with this Indenture, and thereafter
all obligations of the Company shall terminate.
SECTION 5.2 SUCCESSOR CORPORATION OR TRUST SUBSTITUTED.
Upon any consolidation or merger, or any transfer of all or substantially
all of the assets of the Company in accordance with Section 5.1, the successor
corporation formed by such consolidation or into which the Company is merged or
to which such transfer is made shall succeed to, and be substituted for, and may
exercise every right and power of, the Company under this Indenture with the
same effect as if such successor corporation has been named as the Company
herein; the Company shall thereupon be relieved of any further obligation or
liability hereunder or upon the Securities; and the Company as the predecessor
corporation may thereupon or at any time thereafter be dissolved, wound up or
liquidated. Such successor corporation thereupon may cause to be signed, and
may issue either in its own name or in the name of Sterling House Corporation,
any or all of the Securities issuable hereunder which theretofore shall not have
been signed by the Company and delivered to the Trustee; and, upon the order of
such successor corporation, instead of the Company, and subject to all the
terms, conditions and limitations in this Indenture prescribed, the Trustee
shall authenticate and shall deliver any Securities which previously shall have
been signed and delivered by the Officers to the Trustee for authentication, and
any Securities which such successor corporation thereafter shall cause to be
signed and delivered to the Trustee for that purpose. All the Securities so
issued shall in all respects have the same legal rank and benefit under this
Indenture as the Securities
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theretofore or thereafter issued in accordance with the terms of this
Indenture as though all such Securities had been issued at the date of the
execution hereof.
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.1 EVENTS OF DEFAULT.
An "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
occasioned by the provisions of Article 11 or be voluntary or involuntary or be
effected by operation of law or pursuant to any judgment, decree or order or any
court or any order, rule or regulation of any administrative or governmental
body):
(1) the Company defaults in the payment of interest on any Security
when the same becomes due and payable and such default continues for a
period of 30 days;
(2) the Company defaults in the payment of the principal of or
premium, if any, on any Security when the same becomes due and payable at
maturity, upon redemption or otherwise, and such default continues for five
Business Days;
(3) the Company fails to comply with any of its other covenants,
agreements or conditions in the Securities or this Indenture and such
default continues for the period and after the notice specified in the last
paragraph of this Section 6.1;
(4) there shall be a default under any bond, debenture, note or other
evidence of Indebtedness or under any mortgage, indenture or other
instrument under which there may be issued or by which there may be secured
or evidenced any Indebtedness of the Company or any Subsidiary, whether any
such Indebtedness now exists or shall hereafter be created, if (a) either
(i) such event of default results from the failure to
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pay any such Indebtedness at maturity or (ii) as a result of such event
of default, the maturity of such Indebtedness has been accelerated prior
to its stated maturity and such acceleration shall not be rescinded or
annulled or the accelerated amount paid within ten days after notice to
the Company of such acceleration, or such Indebtedness having been
discharged and (b) the principal amount of such Indebtedness, together
with the principal amount of any other such Indebtedness in default for
failure to pay principal or interest thereon, or the maturity of which
has been so accelerated, aggregates $1,000,000 or more;
(5) the Company pursuant to or within the meaning of any Bankruptcy
Law:
(a) commences a voluntary case or proceeding,
(b) consents to the entry of an order for relief against it in
an involuntary case or proceeding,
(c) consents to the appointment of a Custodian of it or for all
or substantially all of its property, or
(d) makes a general assignment for the benefit of its creditors;
or
(6) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law:
(a) for relief against the Company in an involuntary case or
proceeding,
(b) appointing a Custodian of the Company or for all or
substantially all of its property, or
(c) ordering the liquidation of the Company,
and the order or decree remains unstayed and in effect for 90 days.
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A default under clause (3) is not an Event of Default until the Trustee
notifies the Company, or the Holders of a majority in principal amount of the
Securities then outstanding notify the Company and the Trustee in writing, of
the default and the Company does not cure the default within 60 days after
receipt of such notice. The notice must specify the default, demand that it be
remedied and state that the notice is a "Notice of Default." The Trustee shall
give such notice to the Company only if directed to do so in writing by the
Holders of a majority in principal amount of the Securities then outstanding.
Such notice by the Trustee shall not be deemed to be a certification by the
Trustee as to whether an Event of Default has occurred.
SECTION 6.2 ACCELERATION.
If an Event of Default (other than an Event of Default specified in Section
6.1(5) or 6.1(6) occurs and is continuing, the Trustee by notice to the Company,
or the Holders of a majority in principal amount of the Securities then
outstanding by notice to the Company and the Trustee, may declare to be due and
payable immediately the principal amount of the Securities plus accrued interest
to the date of acceleration. Upon any such declaration, such amount shall be
due and payable immediately, and upon payment of such amount all of the
Company's obligations with respect to the Securities, other than obligations
under Section 7.7, shall terminate. If an Event of Default specified in Section
6.1(5) or 6.1(6) occurs, all unpaid principal and accrued interest on the
Securities then outstanding shall become and be immediately due and payable
without any declaration or the act on the part of the Trustee or any Holder.
The Holders of a majority in principal amount of the outstanding Securities by
written notice to the Trustee may rescind an acceleration and its consequences
if (x) all existing Events of Default, other than the non-payment of the
principal of the Securities, which have become due solely by such declaration of
acceleration, have been cured or waived, (y) to the extent the payment of such
interest is lawful, interest on overdue installments of interest and overdue
principal and premium, if any, which has become due otherwise than by such
declaration of acceleration, has been paid, and (z) the rescission would not
conflict with any judgment or decree of a court of competent jurisdiction. The
Trustee may rely upon such notice of rescission without any independent
investigation as to the satisfaction of conditions (x), (y) and (z).
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SECTION 6.3 OTHER REMEDIES.
If an Event of Default occurs and is continuing, the Trustee may pursue any
available remedy by proceeding at law or in equity to collect the payment of
principal of and premium, if any, or interest on the Securities or to enforce
the performance of any provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any of
the Securities or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Securityholder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative.
SECTION 6.4 WAIVER OF DEFAULTS AND EVENTS OF DEFAULT.
Subject to Section 9.2, the Holders of a majority in principal amount of
the Securities then outstanding, on behalf of all the Securityholders, by
written notice to the Trustee may waive a Default or Event of Default with
respect to the Securities and its consequences. When a Default or Event of
Default is waived, it is considered to be cured and ceases to exist; but no such
waiver shall extend to any subsequent or other Default or impair any right
consequent thereon.
SECTION 6.5 CONTROL BY MAJORITY.
The Holders of a majority in principal amount of the Securities then
outstanding may direct in writing the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any trust or
power conferred on it. The Trustee, however, may refuse to follow any direction
that conflicts with law or this Indenture, that the Trustee determines may be
unduly prejudicial to the rights of other Securityholders, it being understood
that (subject to Section 7.1) the Trustee shall have no duty to ascertain
whether or not such actions or forbearances are unduly prejudicial to such
Securityholders or that may involve the Trustee in personal liability or for
which the Trustee does not have adequate indemnification pursuant to Sections
7.1(5) and 7.2(6); PROVIDED
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that, the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction.
SECTION 6.6 RIGHTS OF HOLDERS TO RECEIVE PAYMENT.
Subject to Article 11, notwithstanding any other provision of this
Indenture, the right of any Securityholder to receive payment of principal of,
premium, if any, and interest on the Security, on or after the respective due
dates expressed in the Security, or to bring suit for the enforcement of any
such payment on or after such respective dates, is absolute and unconditional
and shall not be impaired or affected without the consent of the Holder.
Notwithstanding any other provision of this Indenture, the right of any
Holder of any Security to convert such Security or to bring suit for the
enforcement of such right shall not be impaired or affected without the written
consent of the Holder.
SECTION 6.7 COLLECTION SUIT BY TRUSTEE.
If an Event of Default in payment of interest or principal, and premium, if
any, specified in Section 6.1(1) or (2) occurs and is continuing, the Trustee
may recover judgment in its own name and as trustee of an express trust against
the Company or any other obligor on the Securities for the whole amount of
unpaid principal, and premium, if any, and accrued interest remaining unpaid on
the Securities, together with interest on overdue principal, and premium, if
any, and to the extent that payment of such interest is lawful, interest on
overdue installments of interest, in each case at the rate borne by the
Securities and such further amount as shall be sufficient to cover the costs and
expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.
SECTION 6.8 TRUSTEE MAY FILE PROOFS OF CLAIM.
The Trustee may file such proofs of claim and other papers or documents as
may be necessary or advisable in order to have the claims of the Trustee
(including any claim for the reasonable compensation, expenses, disbursements
and advances of the Trustee, its agents and counsel) and the Holders of
Securities allowed in any judicial proceedings relative to the
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Company (or any other obligor upon the Securities), its creditors or its
property and shall be entitled and empowered to collect and receive any
monies or other property payable or deliverable on any such claims and
to distribute the same. Any Custodian in any such judicial proceeding
is hereby authorized by each Securityholder 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 of Securities, to pay to the
Trustee any amount due to it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and
any other amounts due the Trustee under Section 7.7.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Securityholder any
plan or 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 Securityholder in any such proceedings.
SECTION 6.9 PRIORITIES.
If the Trustee collects any money pursuant to this Article 6, it shall pay
out the money in the following order:
FIRST: to the Trustee amounts due under Section 7.7;
SECOND: to holders of any Senior Indebtedness as required by Article 11;
and
THIRD: to the Holders of the Securities for amounts due and unpaid on
the Securities for principal, premium, if any, and interest, ratably,
without preference or priority of any kind, according to the amounts due
and payable on the Securities for principal, premium, if any, and interest,
respectively; and
FOURTH: to the Company.
The Trustee may fix a record date and payment date for any payment to
Holders of Securities pursuant to this Section 6.9.
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SECTION 6.10 UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy under this Indenture
or in any suit against the Trustee for any action taken or omitted by it as
Trustee, a court in its discretion may require the filing by any party litigant
in the suit of an undertaking to pay the costs of the suit, and the court in its
discretion may assess reasonable costs, including reasonable attorney's fees,
against any party litigant in the suit, having due regard to the merits and good
faith of the claims or defenses made by the party litigant. This Section 6.10
does not apply to a suit by the Trustee, a suit by a Holder pursuant to Section
6.6 or a suit by Holders of more than 10% in principal amount of the Securities
then outstanding or a suit by any holder of Senior Indebtedness.
SECTION 6.11 LIMITATION ON SUITS.
A Securityholder may not pursue any remedy with respect to this Indenture
or the Securities unless:
(1) the Holder gives to the Trustee written notice stating that an
Event of Default is continuing;
(2) the Holders of at least 25% in aggregate principal amount of the
Securities at the time outstanding make a written request to the Trustee to
pursue the remedy;
(3) such Holder or Holders offer to the Trustee reasonable security
or indemnity against any loss, liability or expense satisfactory to the
Trustee;
(4) the Trustee does not comply with the request within 60 days after
receipt of notice, the request and the offer of security or indemnity; and
(5) the Holders of a majority in aggregate principal amount of the
Securities at the time outstanding do not give the Trustee a direction
inconsistent with the request during such 60-day period.
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A Securityholder may not use this Indenture to prejudice the rights of
any other Securityholder or to obtain a preference or priority over any
other Securityholder.
ARTICLE 7
TRUSTEE
SECTION 7.1 DUTIES OF TRUSTEE.
(1) The duties and responsibilities of the Trustee shall be as provided
by the TIA. If an Event of Default has occurred and is continuing, the
Trustee shall exercise its rights and powers vested in it by this Indenture
and use the same degree of care and skill in their exercise as a prudent
Person would exercise or use under the circumstances in the conduct of his
own affairs.
(2) Except during the continuance of an Event of Default and after the
curing or waiving of all such Events of Default which may have occurred:
(a) The Trustee need perform only those duties that are specifically
set forth in this Indenture, and the Trustee shall not be liable except for
the performance of such duties as are specifically set forth in this
Indenture, and no others, and no implied covenants or obligation shall be
read into this Indenture against the Trustee.
(b) 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 any statements certificates or
opinions furnished to the Trustee and conforming to the requirements of
this Indenture. The Trustee, however, shall examine the certificates and
opinions to determine whether or not they conform to the requirements of
this Indenture.
(3) 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:
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(a) This paragraph does not limit the effect of paragraph (2) of this
Section 7.1.
(b) The Trustee shall not be liable for any error in judgment made in
good faith by a Trust Officer, unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts.
(c) The Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.5.
(d) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder or in the exercise of any of
its rights or powers, if it shall have reasonable grounds for believing
that repayment of such funds or adequate indemnity against such risk or
liability is not reasonably assured to it.
(4) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (1), (2) and (3) of this Section 7.1 and
subject to Sections 315 and 316 of the TIA.
(5) Subject to subsection (3), the Trustee may refuse to perform any
duty or exercise any right or power unless, subject to the provisions of the
TIA, it receives indemnity satisfactory to it against any loss, liability,
expense or fee.
(6) The Trustee shall not be liable for interest on any money received
by it. Money held in trust by the Trustee need not be segregated from other
funds except to the extent required by law.
SECTION 7.2 RIGHTS OF TRUSTEE.
(1) The Trustee may rely on and shall be protected in acting or
refraining from acting upon 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.
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(2) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel, or both, which shall conform
to Section 12.5. The Trustee shall not be liable for any action it takes or
omits to take in good faith in reliance on such Officers' Certificate or
Opinion of Counsel.
(3) The Trustee may act through agents or attorneys and shall not be
responsible for the misconduct or negligence of such agents or attorneys
appointed with due care and shall not be responsible for their supervision.
(4) The Trustee shall not be liable for any action it takes or omits to
take in good faith which it believes to be authorized or within its rights or
powers.
(5) The Trustee may consult with counsel of its choice and the written
advice of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by the Trustee hereunder in good faith and reliance thereon.
(6) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction
of any of the Holders of Securities pursuant to this Indenture, unless such
Holders shall have offered to the Trustee reasonable security or indemnity
against the costs, expenses and liabilities which might be incurred by it in
compliance with such request or direction.
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 or its
Affiliates with the same rights it would have if it were not Trustee. Any
Agent may do the same with like rights. The Trustee, however, is subject to
Sections 7.10 and 7.11.
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SECTION 7.4 TRUSTEE'S DISCLAIMER.
The Trustee makes no representation as to the validity or adequacy of
this Indenture or the Securities, it shall not be accountable for the
Company's use of the proceeds from the Securities, and it shall not be
responsible for any statement of the Company in the Indenture or any
statement in the Securities other than its certificate of authentication or
in any document used in the sale of the Securities other than any statement
in writing provided by the Trustee expressly for use in such document.
SECTION 7.5 NOTICE OF DEFAULTS.
If a Default or Event of Default occurs and is continuing and if it is
actually known to the Trustee, the Trustee shall mail to each Holder of
Securities notice of the Default or Event of Default within 90 days after it
becomes known to the Trustee. Except in the case of a default in payment of
principal of, premium, if any, or interest on any Security, the Trustee may
withhold the notice if and so long as a committee of its Trust Officers in
good faith determines that withholding the notice is in the interests of
Holders of Securities. Notwithstanding anything to the contrary expressed in
this Indenture, the Trustee shall not be deemed to have knowledge of any
Event of Default hereunder unless and until a Trust Officer shall have actual
knowledge thereof, or shall have received written notice thereof from the
Company at its principal Corporate Trust Office as specified in Section 12.1.
The Trustee shall not be deemed to have actual knowledge of an Event of
Default hereunder, except in the case of an Event of Default under Sections
6.1(1) or 6.1(2) (provided that the Trustee is the Paying Agent), until a
Trust Officer receives written notice thereof from the Company or any
Securityholder that such a Default or an Event of Default has occurred.
SECTION 7.6 REPORTS BY TRUSTEE TO HOLDERS.
Within 60 days after each May 15 beginning with May 15 of the first year
in which Securities are outstanding hereunder, the Trustee, if required by
the provisions of TIA Section 313(a), shall mail to each Securityholder a
brief report dated as of January 15
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of such year that complies with TIA Section 313(a). The Trustee also shall
comply with TIA Section 313(b), Section 313(c) and Section 313(d).
A copy of each report at the time of its mailing to Securityholders
shall be filed with the Securities and Exchange Commission and each
securities exchange, if any, on which the Securities are listed. The Company
agrees to notify the Trustee in writing whenever the Securities become listed
or delisted on or from any securities exchange.
SECTION 7.7 COMPENSATION AND INDEMNITY.
The Company shall pay to the Trustee from time to time, and the Trustee
shall be entitled to, reasonable compensation for its services (which
compensation shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust). The Company shall reimburse
the Trustee upon request for all reasonable disbursements, expenses and
advances incurred or made by it. Such expenses may include, but shall not be
limited to, the reasonable compensation, disbursements and expenses of the
Trustee's agents and counsel.
The Company shall indemnify the Trustee for, and hold it harmless
against, any loss or liability incurred by it in connection with the
acceptance or administration of this trust, including the costs and expenses
of defending itself against any claim or liability in connection with the
Securities or the exercise or performance of any of its powers or duties
hereunder. The Trustee shall notify the Company promptly of any claim
asserted against the Trustee for which it may seek indemnity and the Company
may elect by written notice to the Trustee to assume the defense of any such
claim at the Company's expense with counsel reasonably satisfactory to the
Trustee; provided, however, that if the Trustee is advised by counsel that
the interests of the Company and the Trustee conflict, the Trustee shall have
the right to retain separate counsel.
The Company need not reimburse the Trustee for any expense or indemnify
it against any loss or liability incurred by it through the Trustee's
negligence or willful misconduct. The Company shall not be liable for any
settlement of any claim or action effected without the Company's consent,
which consent
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shall not be unreasonably withheld. To secure the Company's payment
obligations in this Section, the Trustee shall have a lien prior to the
Securities on all money or property held or collected by the Trustee.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.1 occurs, the expenses and the compensation
for the services are intended to constitute expenses of administration under
any applicable bankruptcy or comparable law. The provisions of this Section
shall survive termination of this Indenture.
SECTION 7.8 REPLACEMENT OF TRUSTEE.
A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance
of appointment as provided in this Section 7.8.
The Trustee may resign by so notifying the Company. The Holders of a
majority in principal amount of the Securities then outstanding may remove
the Trustee by so notifying the Trustee and may appoint a successor Trustee
with the Company's written consent. The Company may remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged a bankrupt or an insolvent;
(3) a receiver or other public officer takes charge of the Trustee
or its property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a
successor Trustee.
If a successor Trustee does not take office within 45 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or
the Holders of a majority in
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principal amount of the Securities then outstanding may petition any court of
competent jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any Securityholder may
petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Immediately after
that, the retiring Trustee shall, upon payment of its fees and expenses,
transfer all property held by it as Trustee to the successor Trustee, subject
to the lien provided for 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.
Notwithstanding the replacement of the Trustee pursuant to this Section 7.8,
the Company's obligations under Section 7.7 shall continue for the benefit of
the retiring Trustee with respect to expenses and liabilities incurred by it
and compensation earned by it prior to such replacement or otherwise or the
Indenture. A successor Trustee shall mail notice of its succession to each
Holder of Securities.
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 assets to, another
corporation, the successor corporation without any further act shall be the
successor Trustee.
SECTION 7.10 ELIGIBILITY; DISQUALIFICATION.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA Section 310(a)(1). The Trustee 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), including the optional provision permitted by the second
sentence of TIA Section 310(b)(9).
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SECTION 7.11 PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
The Trustee is subject to TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated therein.
ARTICLE 8
SATISFACTION AND DISCHARGE OF INDENTURE
SECTION 8.1 SATISFACTION, DISCHARGE AND DEFEASANCE OF THE SECURITIES.
The Company shall be deemed to have paid and discharged the entire
indebtedness on the Securities after the date of the deposit referred to in
paragraph (1) below, the provisions of this Indenture shall no longer be in
effect in respect of the Securities, and the Trustee, at the expense of the
Company, shall execute proper instruments acknowledging satisfaction and
discharge of such indebtedness; PROVIDED that the following conditions shall
have been satisfied:
(1) the Company has deposited or caused to be deposited with the
Trustee irrevocably as trust funds in trust, specifically pledged as
security for, and dedicated solely to, the benefit of the Holders of the
Securities, with reference to this Section 8.1, (a) money or (b) U.S.
Government Obligations or (c) a combination thereof, sufficient, in the
opinion of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee, to
pay and discharge the entire indebtedness on all the Securities for
principal, premium, if any, and interest, if any, to the maturity date of
the Securities as such principal, premium, if any, or interest becomes due
and payable in accordance with the terms of this Indenture and the
Securities;
(2) the Company has paid or caused to be paid all other sums payable
hereunder by the Company in
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connection with all of the Securities, including all fees and expenses of
the Trustee; and
(3) the Company has delivered to the Trustee an Opinion of Counsel
and an Officers' Certificate, each stating that all conditions precedent
herein provided for relating to the satisfaction and discharge of the
entire Indebtedness on the Securities and the discharge of this Indenture
and the termination of the Company's obligations hereunder have been
complied with.
"U.S. Government Obligations" means direct, non-callable obligations of, or
non-callable obligations guaranteed by, the United States of America for the
timely payment of which obligation or guarantee the full faith and credit of the
United States of America is pledged.
SECTION 8.2 SATISFACTION AND DISCHARGE OF INDENTURE.
In addition to its rights under Section 8.1, the Company may terminate all
of its obligations under this Indenture when:
(1) all of the Securities theretofore authenticated and delivered
(other than (a) Securities which have been destroyed, lost or stolen and
which have been replaced or paid as provided in Section 2.7 hereof and (b)
Securities for whose payment money has theretofore been deposited with the
Trustee or the Paying Agent in trust or segregated and held in trust by the
Company and thereafter repaid to the Company or discharged from such trust,
as provided in Section 2.4 and Section 8.6 hereof) have been delivered to
the Trustee for cancellation; and
(2) the Company has paid or caused to be paid all other sums payable
hereunder by the Company in connection with the outstanding Securities,
including all fees and expenses of the Trustee.
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SECTION 8.3 SURVIVAL OF CERTAIN OBLIGATIONS.
Notwithstanding the satisfaction and discharge of this Indenture pursuant
to Section 8.1, the respective obligations of the Company specified in Sections
2.3, 2.4, 2.5, 2.6, 2.11, 4.1, 7.7, 8.5, 8.6, 8.7 and in Article 10 shall
survive until the Securities are no longer outstanding, and after the Securities
are no longer outstanding, or upon compliance with Section 8.2, only the
obligations of the Company in such Sections 7.7 and 8.6 shall survive. Nothing
contained in this Article 8 shall abrogate any of the obligations or duties of
the Trustee under this Indenture.
SECTION 8.4 APPLICATION OF TRUST MONEY.
(1) Subject to the provisions of Section 8.6, all money and U.S.
Government Obligations deposited with the Trustee for the Securities pursuant to
Section 8.1 or Section 8.2, and all money received by the Trustee in respect of
U.S. Government Obligations deposited with the Trustee for the Securities
pursuant to Section 8.1 or Section 8.2 shall be held in trust and reinvested by
the Trustee in (a) U.S. Government Obligations or (b) beneficial interests in
one or more mutual funds which invest solely in U.S. Government Obligations and
which are rated in the highest applicable rating category by a nationally-
recognized statistical rating organization in accordance with the Company's
written instructions and applied by the Trustee in accordance with the
provisions of the Securities and this Indenture, to the payment, either directly
or through any Paying Agent (including the Company or any Subsidiary acting as
Paying Agent) as the Trustee may determine, to the Persons entitled thereto, of
the principal, premium, if any, and interest, if any, on the Securities; but
such money need not be segregated from other funds except to the extent required
by law. Money and U.S. Government Obligations so held in trust are not subject
to the subordination provisions of Article 11.
(2) The Trustee shall deliver or pay to the Company from time to time upon
the Company's written request any U.S. Government Obligations or money held by
it as provided in Section 8.1 or Section 8.2 which, in the written opinion of a
nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, are then
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in excess of the amount thereof which then would have been required to
be deposited for the purpose for which such U.S. Government Obligations,
or money, were deposited or received.
SECTION 8.5 PAYING AGENT TO REPAY MONIES HELD.
Upon the satisfaction and discharge of this Indenture, all monies then held
by any Paying Agent under the provisions of this Indenture shall, upon written
demand of the Company, be repaid to it or paid to the Trustee, and thereupon
such Paying Agent shall be released from all further liability with respect to
such monies.
SECTION 8.6 RETURN OF UNCLAIMED MONIES.
Any monies deposited with or paid to the Trustee or any Paying Agent for
the Securities, or then held by the Company in trust, for the payment of any
principal, premium, if any, and interest, if any, on the Securities and not
applied but remaining unclaimed by the Holders of the Securities for two years
after the date upon which the principal of, premium, if any, and interest, if
any, on the Securities, as the case may be, shall have become due and payable,
shall, unless otherwise required by mandatory provisions of applicable escheat
or abandoned or unclaimed property law, be repaid to the Company by such Trustee
or any Paying Agent on written demand by the Company or (if then held by the
Company or any Affiliate) shall be discharged from such trust; and the Holders
of the Securities entitled to receive such payment shall thereafter look only to
the Company for the payment thereof; PROVIDED, HOWEVER, that, before being
required to make any such repayment, the Trustee may, or shall at the written
request of the Company, at the expense of the Company, cause to be published
once in an authorized newspaper in the same city in which the place of payment
with respect to the Securities shall be located and in an authorized newspaper
in the City of New York, or mail to each such Holder, a notice (in such form as
may be deemed appropriate by the Trustee) that said monies remain unclaimed and
that, after a date named therein, any unclaimed balance of said monies then
remaining will be returned to the Company.
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SECTION 8.7 REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any money or U.S.
Government Obligations in accordance with Section 8.1 by reason of any legal
proceeding or by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, the
Company's obligations under this Indenture and the Securities shall be revived
and reinstated as though no deposit had occurred pursuant to Section 8.1 until
such time as the Trustee or Paying Agent is permitted to apply all such money or
U.S. Government Obligations in accordance with Section 8.4; PROVIDED, HOWEVER,
that if the Company has made any payment of principal of, premium, if any, or
interest on the Securities because of the reinstatement of its obligations, the
Company shall be subrogated to the rights of the Holders of such Securities to
receive such payment from the money or U.S. Government Obligations held by the
Trustee or Paying Agent.
ARTICLE 9
AMENDMENTS AND WAIVERS
SECTION 9.1 AMENDMENTS AND WAIVERS WITHOUT CONSENT OF HOLDERS.
The Company, when authorized by Board Resolution, and the Trustee at any
time and from time to time, may amend or supplement this Indenture, (any such
amendment or supplement to be in a form satisfactory to the Trustee) or the
Securities without notice to or consent of any Securityholder for any of the
following purposes:
(1) to comply with Section 5.1; or
(2) to provide for uncertificated Securities in addition to or in
place of certificated Securities; or
(3) to cure any ambiguity, defect or inconsistency, or to make any
other change that does not adversely affect the interests of the Holders of
Securities in any material respect; or
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(4) to add to the covenants of the Company, for the benefit of the
Holders or to surrender any right or power herein conferred upon the
Company; or
(5) to add any Event of Default.
The Trustee shall be entitled to receive upon request an Opinion of Counsel
to its satisfaction with respect to any supplement to this Indenture without
consent of the Holders that all conditions precedent have been satisfied.
SECTION 9.2 AMENDMENTS AND WAIVERS WITH CONSENT OF HOLDERS.
With the written consent of the Holders of not less than 66-2/3% in
aggregate principal amount of the Securities at the time outstanding, the
Company, when authorized by Board Resolution, and the Trustee may amend or
supplement this Indenture (any such amendment or supplement to be in a form
satisfactory to the Trustee) or the Securities for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Indenture or of any supplemental indenture or of modifying in any manner
the rights of the Holders of the Securities. The Holders of a majority in
principal amount of the Securities then outstanding may waive compliance in a
particular instance by the Company with any provision of this Indenture or the
Securities without notice to any Securityholder. Subject to Section 9.4,
without the consent of each Holder of Securities affected, however, an
amendment, supplement or waiver, including a waiver pursuant to Section 6.4, may
not:
(1) reduce the amount of Securities whose Holders must consent to an
amendment or waiver;
(2) reduce the rate of or extend the time for payment of interest on
any Security;
(3) reduce the principal of or extend the fixed maturity of any
Security;
(4) waive (except unless theretofore cured) a default in the payment
of the principal of (and premium, if any on), interest on or redemption
amounts with respect to any Security;
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(5) make any Security payable in currency other than that stated in
the Security;
(6) make any change in Sections 6.4, 6.6 or 9.2;
(7) make any change that adversely affects the right to convert any
Security; or
(8) make any change in Article 11 that adversely affects the rights
of any Securityholder.
To secure a consent of the Holders under this Section, it shall not be
necessary for the Holders to approve the particular form of any proposed
amendment or waiver; rather, it shall be sufficient if such consent approves the
substance thereof.
After an amendment under this Section becomes effective, the Company shall
mail to Securityholders a notice briefly describing such amendment.
SECTION 9.3 COMPLIANCE WITH TRUST INDENTURE ACT.
Every amendment or supplement to this Indenture or the Securities shall
comply with the TIA as then in effect.
SECTION 9.4 REVOCATION AND EFFECT OF CONSENTS.
Subject to this Indenture, each amendment, supplement or waiver evidencing
other action shall become effective in accordance with its terms. Until an
amendment, supplement or waiver becomes effective, a consent to it by a Holder
of a Security is a continuing consent by the Holder even if notation of the
consent is not made on any Security. Any such Holder or subsequent Holder,
however, may revoke the consent as to his Security or portion of a Security, if
the Trustee receives the notice of revocation before the date the amendment,
waiver or other action becomes effective.
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. If a record date is fixed, then notwithstanding the
provisions of the immediately preceding paragraph, those Persons who were
Holders
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at such record date (or their duly designated proxies) and only those
Persons, shall be entitled to consent to such amendment, supplement or waiver or
to revoke any consent previously given, whether or not such Persons continue to
be Holders after such record date. No consent shall be valid or effective for
more than 90 days after such record date unless consent from Holders of the
principal amount of Securities then outstanding required hereunder for such
amendment, supplement or waiver to be effective shall have also been given and
not revoked within such 90-day period.
After an amendment, waiver or other action becomes effective, pursuant to
Section 9.1 or Section 9.2, as the case may be, it shall bind every Holder of a
Security.
SECTION 9.5 NOTATION ON OR EXCHANGE OF SECURITIES.
If an amendment, supplement or waiver changes the terms of a Security, the
Trustee may request the Holder of the Security to deliver it to the Trustee.
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 determine, the Company in exchange for the Security shall issue and the
Trustee shall authenticate a new Security that reflects the changed terms the
cost and expense of which will be borne by the Company.
SECTION 9.6 TRUSTEE TO SIGN AMENDMENTS, ETC.
The Trustee need not sign any amendment that adversely affects its rights
or interests, as determined by the Trustee in its sole discretion. In signing
or refusing to sign any amendment the Trustee shall be entitled to receive and
shall be fully protected in relying upon, an Opinion of Counsel stating that
such amendment is authorized or permitted by this Indenture. The Company may
not sign an amendment until its Board of Directors approves it.
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ARTICLE 10
CONVERSION OF SECURITIES
SECTION 10.1 RIGHT OF CONVERSION; CONVERSION PRICE.
Subject to the provisions of Section 7 of the Securities, the Holder of any
Security or Securities shall have the right, at such Holder's option, at any
time after the effective date of the Registration Statement and before the close
of business on June 30, 2006 (except that, with respect to any Security or
portion of a Security which shall be called for redemption, such right shall
terminate at the close of business on the Redemption Date fixed for redemption
of such Security or portion of a Security unless the Company shall default in
payment due upon redemption thereof), to convert, subject to the terms and
provisions of this Article 10, the principal of any such Security or Securities
or any portion thereof which is $1,000 principal amount or an integral multiple
thereof into shares of common stock of the Company, no par value ("Common
Stock"), initially at the conversion price per share of $22.42 or, in case an
adjustment of such price has taken place pursuant to the provisions of Section
10.4, then at the price as last adjusted (such price or adjusted price being
referred to herein as the "conversion price"), upon surrender of the Security or
Securities, the principal of which is so to be converted, accompanied by written
notice of conversion duly executed, to the Company, at any time during usual
business hours at the office or agency maintained by it for such purpose, and,
if so required by the Conversion Agent or Registrar, accompanied by a written
instrument or instruments of transfer in form satisfactory to the Conversion
Agent or Registrar duly executed by the Holder or his duly authorized
representative in writing. For convenience, the conversion of any portion of
the principal of any Security or Securities into shares of Common Stock is
hereinafter sometimes referred to as the conversion of such Security or
Securities.
SECTION 10.2 ISSUANCE OF SHARES ON CONVERSION.
As promptly as practicable after the surrender, as herein provided, of any
Security or Securities for conversion, the Company shall deliver or cause to be
delivered at its said office or agency, to or upon the written order of the
Holder of the Security or Securities so surrendered, certificates
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representing the number of fully paid and nonassessable shares of Common
Stock into which such Security or Securities may be converted in
accordance with the provisions of this Article 10. Such conversion
shall be deemed to have been made as of the close of business on the
date that such Security or Securities shall have been surrendered for
conversion by delivery thereof with a written notice of conversion duly
executed, so that the rights of the Holder of such Security or
Securities as a Securityholder shall cease at such time and, subject to
the following provisions of this paragraph, the Person or Persons
entitled to receive the shares of Common Stock upon conversion of such
Security or Securities shall be treated for all purposes as having
become the record holder or holders of such shares of Common Stock at
such time and such conversion shall be at the conversion price in effect
at such time; PROVIDED, HOWEVER, that no such surrender on any date when
the stock transfer books of the Company shall be closed shall be
effective to constitute the Person or Persons entitled to receive the
shares of Common Stock upon such conversion as the record holder or
holders of such shares of Common Stock on such date, but such surrender
shall be effective to constitute the Person or Persons entitled to
receive such shares of Common Stock as the record holder or holders
thereof for all purposes at the close of business on the next succeeding
day on which such stock transfer books are open; and PROVIDED, FURTHER,
that in such event such conversion shall be at the conversion price in
effect on the date that such Security or Securities shall have been
surrendered for conversion by delivery thereof, as if the stock transfer
books of the Company had not been closed. The Company shall give or
cause to be given to the Trustee written notice whenever the stock
transfer books of the Company shall be closed.
Upon Conversion of any Security which is converted in part only, the
Company shall execute and the Trustee shall authenticate and deliver to or on
the order of the Holder thereof, at the expense of the Company, a new Security
or Securities of authorized denominations in principal amount equal to the
unconverted portion of such Security.
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SECTION 10.3 NO ADJUSTMENT FOR INTEREST OR DIVIDENDS.
No payment or adjustment in respect of interest on the Securities or
dividends on the shares of Common Stock shall be made upon the conversion of any
Security or Securities; PROVIDED, HOWEVER, that if a Security or any portion
thereof shall be converted subsequent to any regular record date and on or prior
to the next succeeding interest payment date, the interest falling due on such
interest payment date shall be payable on such interest payment date
notwithstanding such conversion, and such interest (whether or not punctually
paid or duly provided for) shall be paid to the Person in whose name such
Security is registered at the close of business on such regular record date and
Securities surrendered for conversion during the period from the close of
business on any regular record date to the opening of business on the
corresponding interest payment date must be accompanied by payment of an amount
equal to the interest payable on such interest payment date.
SECTION 10.4 ADJUSTMENT OF CONVERSION PRICE.
(1) In case the Company shall pay or make a dividend or other distribution
on any class of Capital Stock of the Company in shares of Common Stock, the
conversion price in effect at the opening of business on the day following the
date fixed for the determination of shareholders entitled to receive such
dividend or other distribution shall be reduced by multiplying such conversion
price by a fraction of which the numerator shall be the number of shares of
Common Stock outstanding at the close of business on the date fixed for such
determination and the denominator shall be the sum of such number of shares and
the total number of shares constituting such dividend or other distribution,
such reduction to become effective immediately after the opening of business on
the day following the date fixed for such determination.
(2) In case the Company shall issue rights or warrants to all or
substantially all holders of its shares of Common Stock entitling them to
subscribe for or purchase shares of Common Stock (or securities convertible into
or exchangeable for Common Stock) at a price per share (or having a conversion
or exchange price per share) less than the current market price per share
(determined as provided in paragraph (6) of this Section 10.4) of
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the shares of Common Stock on the date fixed for the determination of
shareholders entitled to receive such rights or warrants, the conversion
price in effect at the opening of business on the day following the date
fixed for such determination shall be reduced by multiplying such
conversion price by a fraction of which the numerator shall be the
number of shares of Common Stock outstanding at the close of business on
the date fixed for such determination plus the number of shares of
Common Stock which the aggregate of the subscription price of the total
number of shares of Common Stock so offered for subscription or purchase
(or the aggregate conversion of exchange price of the convertible or
exchangeable securities so offered) would purchase at such current
market price and the denominator shall be the number of shares of Common
Stock outstanding at the close of business on the date fixed for such
determination plus the number of shares of Common Stock so offered for
subscription or purchase, such reduction to become effective immediately
after the opening of business on the day following the date fixed for
such determination. In the event that all of the shares of Common Stock
subject to such rights or warrants have not been issued when such rights
or warrants expire, then the conversion price shall promptly be
readjusted to the conversion price which would then be in effect had the
adjustment upon the issuance of such rights or warrants been made on the
basis of the actual number of shares of Common Stock issued upon the
exercise of such rights or warrants. For the purposes of this paragraph
(2), the number of shares of Common Stock at any time outstanding shall
not include shares held in the treasury of the Company but shall include
shares issuable in respect of scrip certificates issued in lieu of
fractions of shares of Common Stock. The Company will not issue any
rights or warrants in respect of shares of Common Stock held in the
treasury of the Company.
(3) In case the outstanding shares of Common Stock shall be subdivided
into a greater number of shares, the conversion price in effect at the opening
of business on the day following the day upon which such subdivision becomes
effective shall be proportionately reduced, and, conversely, in case outstanding
shares of Common Stock shall each be combined into a smaller number of shares,
the conversion price in effect at the opening of business on the day following
the day upon which such combination becomes effective shall be proportionately
increased, such reduction or increase, as the case may be, to become effective
immediately after the opening of business on the day
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following the day upon which such subdivision or combination becomes
effective.
(4) In case the Company shall, by dividend or otherwise, distribute to all
or substantially all holders of shares of Common Stock evidences of indebtedness
or assets (including securities, but excluding any (a) rights or warrants
referred to in paragraph (2) of this Section 10.4, (b) any dividend or
distribution not prohibited by Section 4.6 hereof and (c) any dividend or
distribution referred to in paragraph (1) of this Section 10.4), the conversion
price shall be adjusted so that the same shall equal the price determined by
multiplying the conversion price in effect immediately prior to the close of
business on the day fixed for the determination of shareholders entitled to
receive such distribution by a fraction of which the numerator shall be the
current market price per share (determined as provided in paragraph (6) of this
Section) of the shares of Common Stock on the date fixed for such determination
less the then fair market value as determined by the Board of Directors of the
Company (whose determination shall be conclusive and described in a resolution
of the Board of Directors of the Company filed with the Trustee) of the portion
of the assets or evidences of indebtedness so distributed allocable to one share
of Common Stock and the denominator shall be such current market price per share
of the shares of Common Stock, such adjustment to become effective immediately
prior to the opening of business on the day following the date fixed for the
determination of shareholders entitled to receive such distribution.
(5) In case the shares of Common Stock shall be changed into the same or a
different number of shares of any class or classes of stock, whether by capital
reorganization, reclassification, or otherwise (other than a subdivision or
combination of shares or a stock dividend described in paragraph (1) or (3) of
this Section 10.4, or a consolidation, merger or sale of assets described in
Section 10.10), then and in each such event the Holders of Securities shall have
the right thereafter to convert such Securities into the kind and amount of
shares of stock and other securities and property receivable upon such
reorganization, reclassification or other change, by holders of the number of
shares of Common Stock into which such Securities might have been converted
immediately prior to such reorganization, reclassification or change.
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(6) For the purpose of any computation under paragraphs (2) and (4) for
this Section, the current market price per share of Common Stock on any date
shall be deemed to be the average of the Closing Prices for the 15 consecutive
Business Days selected by the Company commencing not more than 30 and not less
than 20 Business Days before the date in question.
(7) No adjustment in the conversion price shall be required unless such
adjustment (plus any adjustments not previously made by reason of this paragraph
(7)) would require an increase or decrease of at least 1% in such price;
provided, however, that any adjustments which by reason of this paragraph (7)
are not required to be made shall be carried forward and taken into account in
any subsequent adjustment. All calculations under this paragraph (7) shall be
made to the nearest cent.
(8) The Company may, but shall not be required to, make such reductions in
the conversion price, in addition to those required by paragraph (1), (2), (3),
(4) and (5) of this Section 10.4 as the Company's Board of Directors considers
to be advisable in order to avoid or diminish any income tax to any holders of
shares of Common Stock resulting from any dividend or distribution of stock or
issuance of rights or warrants to purchase or subscribe for stock or from any
event treated as such for income tax purposes or for any other reasons. The
Board of Directors shall have the power to resolve any ambiguity or correct any
error in the adjustments made pursuant to this Section 10.4 and its actions in
so doing shall be final and conclusive.
(9) The adjustments provided for in this Section 10.4 shall be made
successively whenever any event listed above shall occur.
SECTION 10.5 NOTICE OF ADJUSTMENT OF CONVERSION PRICE.
Whenever the conversion price for the Securities is adjusted as herein
provided:
(1) the Company shall compute the adjusted conversion price in
accordance with Section 10.4 and shall prepare an Officers' Certificate
setting forth the adjusted conversion price and showing in reasonable
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detail the facts upon which such adjustment is based and the computation
thereof, and such certificate shall forthwith be filed at each office or
agency maintained for the purpose of conversion of the Securities pursuant
to Section 2.4 and with the Trustee; and
(2) a notice stating that the conversion price has been adjusted and
setting forth the adjusted conversion price shall as soon as practicable be
mailed by the Company to all Holders of the Securities at their last
addresses as they shall appear in the Security Register.
(3) If the conversion price is adjusted and the Company fails to file
an Officers' Certificate with the Trustee as provided by Section 10.5(1)
and the Trustee is acting as the Conversion Agent, the Trustee shall be
entitled to rely conclusively on the conversion price set forth in the
Officer's Certificate most recently received by the Trustee (or as set
forth in the Securities and this Indenture if the conversion price shall
not have been adjusted).
SECTION 10.6 NOTICE OF CERTAIN CORPORATE ACTION.
(1) In case:
(a) the Company shall authorize the granting to holders of its shares
of Common Stock of rights or warrants entitling them to subscribe for or
purchase any shares of Capital Stock of any class or of any other rights;
or
(b) of any reclassification of the shares of Common Stock of the
Company, or of any consolidation or merger to which the Company is a party
and for which approval of any shareholders of the Company is required, or
of the sale or transfer of all or substantially all of the assets of the
Company; or
(c) of the voluntary or involuntary dissolution, liquidation or
winding up of the Company;
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then the Company shall cause to be filed at each office or agency maintained for
the purpose of conversion of the Securities pursuant to Section 2.3 and shall
cause to be mailed to the Trustee and all Holders of the Securities at their
last addresses as they shall appear in the Security Register, at least 20 days
(or 10 days in any case specified in clause (a) or (b) above) prior to the
applicable record date hereinafter specified, a notice stating (x) the date on
which a record is to be taken for the purpose of such dividend, distribution,
rights or warrants, or, if a record is not to be taken, the date as of which the
Holders of shares of Common Stock of record to be entitled to such dividend,
distribution, rights or warrants are to be determined, or (y) the date on which
such reclassification, consolidation, merger, sale, transfer, dissolution,
liquidation or winding up is expected to become effective, and the date as of
which it is expected that holders of shares of Common Stock of record shall be
entitled to exchange their shares of Common Stock for securities, cash or other
property deliverable upon such reclassification, consolidation, merger, sale,
transfer, dissolution, liquidation or winding up. Such notice shall also state
whether such transaction will result in any adjustment in the conversion price
applicable to the Securities and, if so, shall state what the adjusted
conversion price will be and when it will become effective. Neither the failure
to give the notice required by this Section, nor any defect therein, to any
particular Holder shall affect the sufficiency of the notice or the legality or
validity of any such dividend, distribution, right, warrant, reclassification,
consolidation, merger, sale, transfer, liquidation, dissolution or winding-up,
or the vote on any action authorizing such with respect to the other holders.
(2) In case the Company or any Affiliate of the Company shall propose to
engage in a "Rule 13e-3 Transaction" as defined in the Commission's Rule 13e-3
under the Exchange Act, the Company shall, no later than the date on which any
information with respect to such Rule 13e-3 Transaction is first required to be
given to the Commission or any other Person pursuant to such Rule 13e-3, cause
to be mailed to all Holders at their last addresses as they shall appear in the
Security Register, a copy of all information required to be given to the holders
of the Company's Capital Stock pursuant to such Rule 13e-3. The information
required to be given under this paragraph shall be in addition to and not in
lieu of any other information
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required to be given by the Company pursuant to this Section 10.6 or any
other provision of the Securities or this Indenture.
SECTION 10.7 TAXES ON CONVERSIONS.
The Company will pay any and all stamp or similar taxes that may be payable
in respect of the issuance or delivery of shares of Common Stock on conversion
of the Securities pursuant hereto. The Company shall not, however, be required
to pay any tax which may be payable in respect of any transfer involved in the
issuance and delivery of shares of Common Stock in a name other than that of the
Holder of the Security or Securities to be converted, and no such issuance or
delivery shall be made unless and until the Person requesting such issuance has
paid to the Company the amount of any such tax, or has established to the
satisfaction of the Company that such tax has been paid.
SECTION 10.8 FRACTIONAL SHARES.
No fractional shares or scrip representing fractional shares shall be
issued upon any conversion of the Securities. If any such conversion would
otherwise require the issuance of a fractional share an amount equal to such
fraction multiplied by the current market price per share of Common Stock
(determined as provided in paragraph (6) of Section 10.4) on the day of
conversion shall be paid to the Holder in cash by the Company.
SECTION 10.9 CANCELLATION OF CONVERTED SECURITIES.
All Securities delivered for conversion shall be delivered to the Trustee
or the Conversion Agent to be canceled by or at the direction of the Trustee or
the Conversion Agent, which shall dispose of the same as provided in Section
2.10.
SECTION 10.10 PROVISIONS IN CASE OF CONSOLIDATION, MERGER OR SALE OF ASSETS.
(1) In case of any consolidation of the Company with, or merger of the
Company into, any Person, or in case of any merger of another Person into the
Company (other than a consolidation or merger which does not result in any
reclassification, conversion, exchange or cancellation of outstanding shares of
Common Stock), or in case of any sale or transfer of all or substantially all of
the assets of the
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Company, the Person formed by such consolidation or resulting from such
merger or which acquires such assets, as the case may be, shall execute
and deliver to the Trustee a supplemental indenture providing that the
Holder of each Security then outstanding shall have the right
thereafter, during the period such Security shall be convertible as
specified in Section 10.1 to convert such Security only into the kind
and amount of securities, cash and other property receivable upon such
consolidation, merger, sale or transfer by a holder of the number of
shares of Common Stock into which such Security might have been
converted immediately prior to such consolidation, merger, sale or
transfer. Such supplemental indenture shall provide for adjustments
which, for events subsequent to the effective date of such supplemental
indenture, shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Article 10. The above provisions of
this Section 10.10 shall similarly apply to successive consolidations,
mergers, sales or transfers.
(2) The Trustee shall not be under any responsibility to determine the
correctness of any provisions contained in any such supplemental indenture
relating either to the kind or amount of shares of stock or securities or
property receivable by Holders upon the conversion of their Securities after
any such reclassification, change, consolidation, merger, sale or conveyance
or to any adjustment to be made with respect thereto.
SECTION 10.11 DISCLAIMER BY TRUSTEE OF RESPONSIBILITY FOR CERTAIN MATTERS.
The Trustee and each Conversion Agent (other than the Company or any
Subsidiary) shall not at any time be under any duty or responsibility to any
Holder of the Securities to determine whether any facts exist which may require
any adjustment of the conversion price, how it should be calculated or what it
should be, or with respect to the nature or extent of any such adjustment when
made, or with respect to the method employed, or herein or in any supplemental
indenture provided to be employed, in making the same. The Trustee and each
Conversion Agent (other than the Company or any Subsidiary) shall not be
accountable with respect to the validity, value, kind or amount of any shares of
Common Stock, or of any securities or property, which may at any time be issued
or delivered upon the conversion of any Security; and it makes no representation
with respect thereto. The Trustee and each Conversion Agent (other than the
Company or any Subsidiary) shall not be responsible for any
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failure of the Company to issue, transfer or deliver any shares of
Common Stock or stock certificates or other securities or property upon
the surrender of any Security for the purpose of conversion or, subject
to Section 7.1, to comply with any of the covenants of the Company
contained in this Article 10.
SECTION 10.12 COVENANT TO RESERVE SHARES.
The Company covenants that it will at all times reserve and keep available,
free from preemptive rights, out of its authorized shares of Common Stock,
solely for the purpose of issuance upon conversion of the Securities as herein
provided, such number of shares of Common Stock as shall then be issuable upon
the conversion of all outstanding Securities. The Company covenants that all
shares of Common Stock which shall be so issuable shall be, when issued, duly
and validly issued and fully paid and non-assessable. For purposes of this
Section 10.12, the number of shares of Common Stock which shall be deliverable
upon the conversion of all outstanding Securities shall be computed as if at the
time of computation all outstanding Securities were held by a single holder.
ARTICLE 11
SUBORDINATION; SENIORITY
SECTION 11.1 SECURITIES SUBORDINATED TO SENIOR INDEBTEDNESS.
(1) The Company agrees, and each Holder of the Securities by his
acceptance thereof likewise agrees, that the payment of the principal of,
premium, if any, and interest on the Securities (all of the foregoing, a
"Payment or Distribution") is subordinated and junior in right of payment, to
the extent and in the manner provided in this Article 11, except as provided in
Article 8, to the prior payment in full in cash of all Senior Indebtedness
whether outstanding on the date hereof or hereafter created, incurred, assumed
or guaranteed.
A Payment or Distribution shall include any asset of any kind or character,
and may consist of cash, securities or other property, by set-off or otherwise,
and shall include, without limitation, any purchase, redemption or other
acquisition of Securities or the making of any deposit of funds or securities
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pursuant to this Indenture (including, without limitation, any deposit pursuant
to Article 8 hereof).
(2) The Senior Indebtedness of the Company shall continue to be Senior
Indebtedness and entitled to the benefit of these subordination provisions
irrespective of any amendment, modification or waiver of any term of any
instrument relating to refinancing of the Senior Indebtedness.
(3) All the provisions of this Indenture and the Securities shall be
subject to the provisions of this Article 11 so far as they may be applicable
thereto, except that nothing in this Article 11 shall apply to claims for, or
payments to, the Trustee under or pursuant to Section 7.7.
(4) No right of any holder of any Senior Indebtedness to enforce
subordination as herein provided shall at any time or in any way be affected or
impaired by any failure to act on the part of the Company, any Paying Agent, the
Holders of the Securities, the Trustee or the holders of the Senior
Indebtedness, or by any noncompliance by the Company, any Paying Agent, the
Holders of the Securities or the Trustee with any of the terms, provisions and
covenants of the Securities or this Indenture, regardless of any knowledge
thereof that any such holder of Senior Indebtedness may have or be otherwise
charged with.
SECTION 11.2 COMPANY NOT TO MAKE PAYMENTS WITH RESPECT TO SECURITIES IN
CERTAIN CIRCUMSTANCES.
No Payment or Distribution shall be made by the Company, the Trustee or any
Paying Agent on account of principal of, premium, if any, or interest on the
Securities, whether upon stated maturity, upon redemption or acceleration, or
otherwise, or on account of the purchase or other acquisition of Securities,
whether upon stated maturity, upon redemption or acceleration, or otherwise, if
there shall have occurred and be continuing a default with respect to any Senior
Indebtedness permitting the acceleration thereof or with respect to the payment
of any Senior Indebtedness and (a) such default is the subject of a judicial
proceeding or (b) notice of such default in writing or by telegram has been
given to the Company by any holder or holders of any Senior Indebtedness, unless
and until the Company shall have received written notice from such holder or
holders that
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such default or event of default shall have been cured or waived or
shall have ceased to exist.
Upon any acceleration of the principal of the Securities or any payment by
the Company or distribution of assets of the Company of any kind or character,
whether in cash, property or securities, to creditors upon any dissolution or
winding up or liquidation or reorganization of the Company, whether voluntary or
involuntary, or in bankruptcy, insolvency, receivership or other proceedings,
all amounts due or to become due upon all Senior Indebtedness shall first be
paid in full in cash, or payment thereof provided for to the satisfaction of the
holders thereof, before any Payment or Distribution is made on account of the
redemption price or principal of (and premium, if any) or interest on the
Securities; and (subject to the power of a court of competent jurisdiction to
make other equitable provision, which shall have been determined by such court
to give effect to the rights conferred in this Article upon the Senior
Indebtedness and the holders thereof with respect to the Securities or the
Holders thereof or the Trustee, by a lawful plan of reorganization or
readjustment under applicable law) upon any such dissolution or winding up or
liquidation or reorganization, any Payment or Distribution by the Company or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities (other than securities of the Company as reorganized or
readjusted or securities of the Company or any other company, trust or
corporation provided for by a plan of reorganization or readjustment, the
payment of which is junior or otherwise subordinate, at least to the extent
provided in this Article 11 with respect to the Securities to the payment of all
Senior Indebtedness at the time outstanding and to the payment of all securities
issued in exchange therefor to the holders of the Senior Indebtedness at the
time outstanding), to which the Holders of the Securities or the Trustee would
be entitled except for the provisions of this Article 11, shall be paid by the
Company or by any receiver, trustee in bankruptcy, liquidating trustee, agent or
other Person making such Payment or Distribution directly to the holders of
Senior Indebtedness of the Company or their representative or representatives,
or to the trustee or trustees under any indenture pursuant to which any
instruments evidencing any Senior Indebtedness may have been issued, as their
respective interests may appear, to the extent necessary to pay all Senior
Indebtedness in full in cash, after giving effect to any concurrent payment or
distribution to or for
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the holders of Senior Indebtedness, before any Payment or Distribution
is made to the Holders of the Securities or to the Trustee, except that
the Trustee will have a lien for the payment of its fees and expenses.
In the event that, notwithstanding the foregoing, any Payment or
Distribution by the Company of any kind or character, whether such payment shall
be in cash, property or securities, prohibited by the foregoing, and the Company
shall have made payment to the Trustee or the Holders of the Securities before
all Senior Indebtedness is paid in full in cash, or provision is made for such
payment to the satisfaction of the holders thereof, and if such fact shall then
have been or thereafter be made known to a Trust Officer of the Trustee or, as
the case may be, such Holder, then and in such event such Payment or
Distribution shall be paid over by the Trustee (if the Notice required by
Section 11.5 has been received by the Trustee) or such Holder or delivered to
the holders of Senior Indebtedness or their representative or representatives,
or to the trustee or trustees under any indenture pursuant to which any
instruments evidencing any Senior Indebtedness may have been issued, as their
respective interests may appear, for application to the payment of all Senior
Indebtedness remaining unpaid to the extent necessary to pay all Senior
Indebtedness in full in cash, after giving effect to any concurrent Payment or
Distribution to or for the holders of such Senior Indebtedness, and, until so
delivered, the same shall be held in trust by any Holder of a Security as the
property of the holders of Senior Indebtedness.
The consolidation of the Company with, or the merger of the Company into,
another Person or the liquidation or dissolution of the Company following the
conveyance or transfer of its property as an entirety, or substantially as an
entirety, to another corporation upon the terms and conditions provided in
Article 5 shall not be deemed a dissolution, winding up, liquidation or
reorganization for the purposes of this Section 10.2 if such other Person shall,
as a part of such consolidation, merger, conveyance or transfer, comply with the
conditions stated in Article 5. Nothing in this Section shall apply to claims
of, or payments to, the Trustee under or pursuant to Section 7.7.
The holders of Senior Indebtedness may, at any time and from time to time,
without the consent of or notice to the Holders of the Securities, without
incurring responsibility to
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the Holders of the Securities and without impairing or releasing the
obligations of the Holders of the Securities hereunder to the holders of
Senior Indebtedness: (i) change the manner, place or terms of payment or
change or extend the time of payment of, or renew or alter, Senior
Indebtedness, or otherwise amend in any manner Senior Indebtedness or
any instrument evidencing the same or any agreement under which Senior
Indebtedness is outstanding; (ii) sell, exchange, release or otherwise
deal with any property pledged, mortgaged or otherwise securing Senior
Indebtedness; (iii) release any Person liable in any manner for the
collection of Senior Indebtedness; (iv) apply any amounts received to
any liability of the Company owing to holders of Senior Indebtedness;
and/or (v) exercise or refrain from exercising any rights against the
Company and any other Person.
SECTION 11.3 SUBROGATION OF SECURITIES.
Subject to the payment in full in cash of all amounts then due (whether by
acceleration of the maturity thereof or otherwise) on account of all Senior
Indebtedness at the time outstanding, the Holders of the Securities shall be
subrogated to the rights of the holders of Senior Indebtedness to receive
Payments or Distributions of cash, property or securities of the Company
applicable to the Senior Indebtedness until the principal of, premium, if any,
and interest on the Securities shall be paid in full; and, for the purposes of
such subrogation, no Payments or Distributions to the holders of Senior
Indebtedness to which the Holders of the Securities or the Trustee would be
entitled except for the provisions of this Article 11, and no payments over
pursuant to the provisions of this Article 11 to the holders of Senior
Indebtedness by Holders of the Securities or the Trustee, shall, as between the
Company, the Company's creditors other than holders of Senior Indebtedness, and
the Holders of the Securities, be deemed to be a payment by the Company to or on
account of the Senior Indebtedness. It is understood that the provisions of
this Article 11 are and are intended solely for the purpose of defining the
relative rights of the Holders of the Securities, on the one hand, and the
holders of Senior Indebtedness, on the other hand.
Nothing contained in this Article 11 or elsewhere in this Indenture or in
the Securities is intended to or shall impair, as among the Company, its
creditors other than the holders of Senior Indebtedness, and the Holders of the
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Securities, the obligation of the Company, which is absolute and unconditional,
to pay to the Holders of the Securities the principal of, premium, if any, and
interest on the Securities as and when the same shall become due and payable in
accordance with their terms, or is intended to or shall affect the relative
rights of the Holders of the Securities and creditors of the Company other than
the holders of Senior Indebtedness, nor shall anything herein or therein prevent
the Trustee or the Holder of any Security from exercising all remedies otherwise
permitted by applicable law upon default under this Indenture, subject to the
rights, if any, under this Article 11 of the holders of Senior Indebtedness in
respect of cash, property or securities of the Company received upon the
exercise of any such remedy. Nothing in this Article 11 shall prevent
conversions of Securities pursuant to Article 10.
Upon any payment or distribution of assets of the Company referred to in
this Article 11, the Trustee, subject to the provisions of Section 7.1, and the
Holders of the Securities shall be entitled to rely upon any order or decree
made by any court of competent jurisdiction in which any dissolution, winding
up, liquidation or reorganization proceedings are pending, or certificate of the
receiver, trustee in bankruptcy, liquidating trustee, agent or other Person
making such payment or distribution, delivered to the Trustee or to the Holders
of the Securities, for the purpose of ascertaining the Persons entitled to
participate in such distribution, the holders of Senior Indebtedness and other
indebtedness of the Company, the amount thereof or payable thereon, the amount
or amounts paid or distributed thereon and all other facts pertinent thereto or
to this Article 11.
SECTION 11.4 AUTHORIZATION BY HOLDERS OF SECURITIES.
Each holder of a Security by his acceptance thereof authorizes and directs
the Trustee on his behalf to take such action as may be necessary or appropriate
to effectuate, as between the Holder of the Security and the holders of Senior
Indebtedness, the subordination provided in this Article 11 and appoints the
Trustee his attorney-in-fact for any and all such purposes including, without
limitation, to execute, verify, deliver and file any proofs of claim which any
holder of Senior Indebtedness may at any time require in order to prove and
realize upon any rights or claims pertaining to the Securities
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and to effectuate the full benefit of the subordination contained
herein. Upon failure of the Trustee so to do, any such holder of Senior
Indebtedness shall be deemed to be irrevocably appointed the agent and
attorney-in-fact of the Holder to execute, verify, deliver and file any
such proofs of claim.
SECTION 11.5 NOTICES TO TRUSTEE.
The Company shall give prompt written notice to the Trustee of any fact
known to it which would prohibit the making of any payment of moneys to or by
the Trustee in respect of the Securities pursuant to the provisions of this
Article 11. Notwithstanding the provisions of this Article 11 or any other
provision of this Indenture, the Trustee shall not be charged with knowledge of
the existence of any facts which would prohibit the making of any payment of
moneys to or by the Trustee in respect of the Securities pursuant to the
provisions of this Article 11 unless and until a Trust Officer of the Trustee
shall have received at its Corporate Trust Office written notice thereof from
the Company or a holder or holders of Senior Indebtedness or from any trustee or
agent therefor; and, prior to the receipt of any such written notice, the
Trustee, subject to the provisions of Section 7.1, shall be entitled in all
respects to assume that no such facts exist; PROVIDED, HOWEVER, that if a Trust
Officer of the Trustee shall not have received at least three Business Days
prior to the date upon which by the terms hereof any such moneys may become
payable for any purpose (including, without limitation, the payment of the
principal of, premium, if any, or interest on any Security) with respect to such
moneys the notice provided for in this Section 11.5, then, anything herein
contained to the contrary notwithstanding, the Trustee shall have the full power
and authority to receive such moneys and to apply the same to the purpose for
which they were received and shall not be affected by any notice to the contrary
which may be received by it within three Business Days prior to such date.
The Trustee shall be entitled to rely conclusively on the delivery to it of
a written notice by a Person representing himself to be a holder of Senior
Indebtedness (or a trustee on behalf of such holder) to establish that such
notice has been given by a holder of Senior Indebtedness or a trustee or agent
on behalf of any such holder. In the event that the Trustee determines in good
faith that further evidence is required with
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respect to the right of any Person as a holder of Senior Indebtedness to
participate in any payment or distribution pursuant to this Article 11,
the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of Senior
Indebtedness held by such Person, the extent to which such Person is
entitled to participate in such payment or distribution and any other
facts pertinent to the rights of such Person under this Article 11, and
if such evidence is not furnished, the Trustee may defer any payment to
such Person pending judicial determination as to the right of such
Person to receive such payment.
SECTION 11.6 TRUSTEE'S RELATION TO SENIOR INDEBTEDNESS.
The Trustee in its individual capacity shall be entitled to all the rights
set forth in this Article 11 in respect of any Senior Indebtedness at any time
held by it, to the same extent as any other holder of Senior Indebtedness, and
nothing in Section 7.11 or elsewhere in this Indenture shall deprive the Trustee
of any of its rights as such holder.
With respect to the holders of Senior Indebtedness, the Trustee undertakes
to perform or to observe only such of its covenants and obligations as are
specifically set forth in this Article 11, and no implied covenants or
obligations with respect to the holders of Senior Indebtedness shall be read
into this Indenture against the Trustee. The Trustee shall not owe any
fiduciary duty to the holders of Senior Indebtedness and shall not be liable to
any such holder if it shall mistakenly pay over or distribute to Holders of the
Securities or the Company or any other Person money or assets to which any
holder of Senior Indebtedness shall be entitled by virtue of this Article 11 or
otherwise.
SECTION 11.7 NO IMPAIRMENT OF SUBORDINATION.
No right of any present or future holder of any Senior Indebtedness to
enforce subordination as herein provided shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of the Company,
the Trustee or the Holder of any of the Securities or by any act, or failure to
act, in good faith, by any such holder of Senior Indebtedness, or by any
noncompliance by the Company, the Trustee or the Holder of any of the Securities
with the terms, provisions and covenants of
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this Indenture, regardless of any knowledge thereof which any such
holder may have or otherwise be charged with.
SECTION 11.8 ARTICLE 11 NOT TO PREVENT EVENTS OF DEFAULT.
The failure to make a payment on account of principal of, premium, if any,
or interest on the Securities by reason of any provision in this Article 11
shall not be construed as preventing the occurrence of an Event of Default with
respect to such Securities under Section 6.1.
SECTION 11.9 PAYING AGENTS OTHER THAN THE TRUSTEE.
In any case at any time any Paying Agent other than the Trustee shall have
been appointed by the Company and be then acting hereunder, the term "Trustee"
as used in this Article 11 shall in such case (unless the context shall
otherwise require) be construed as extending to and including such Paying Agent
within its meaning as fully for all intents and purposes as if such Paying Agent
were named in this Article 11 in addition to or in place of the Trustee.
SECTION 11.10 SECURITIES SENIOR TO SUBORDINATED INDEBTEDNESS.
The indebtedness represented by the Securities will be senior and prior in
right of payment to all Subordinated Indebtedness, to the extent and in the
manner provided in such Subordinated Indebtedness.
ARTICLE 12
MISCELLANEOUS
SECTION 12.1 TRUST INDENTURE ACT CONTROLS.
If any provision of this Indenture limits, qualifies or conflicts with
another provision which is required to be included in this Indenture by the TIA,
the required provisions shall control. The provisions of TIA Sections 310
through 317 that
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impose duties on any Person (including the provisions automatically
deemed included herein unless expressly excluded by this Indenture) are
a part of and govern this Indenture, whether or not physically contained
herein.
SECTION 12.2 NOTICES.
Any notices or other communications required or permitted hereunder shall
be in writing, and shall be sufficiently given if made by hand delivery, or
first class mail, postage prepaid (except that any notice by the Trustee to the
Company of a default or an Event of Default under this Indenture shall be by
registered or certified mail, postage prepaid, return receipt requested), or by
a nationally-recognized overnight express courier service (which notices or
communications shall be deemed received, in the case of the Company, the
business day after the receipt thereof by such service and, in the case of the
Trustee, upon receipt), addressed as follows:
if to the Company:
Sterling House Corporation
000 Xxxxx Xxxx Xxxx
Xxxxx 000
Xxxxxxx, Xxxxxx 00000
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
if to the Trustee:
Fleet National Bank
000 Xxxxxxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxx Xxxxxx 00000
Attention: Xxxxxxx Xxxxxxxx
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
The Company or the Trustee by notice to the other may designate additional or
different addresses as shall be furnished in writing by either party. Any
notice or communication to the Company or the Trustee shall be deemed to have
been given or made as of the date so delivered if personally delivered, and five
(5) calendar days after mailing if sent by registered or certified
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mail (except that a notice of change of address shall not be deemed to
have been given until actually received by the addressee).
Any notice or communication mailed to a Securityholder shall be mailed to
the address of such Securityholder as it appears on the registration books of
the Registrar and shall be sufficiently given if so mailed within the time
prescribed.
Failure to mail a notice or communication to a Securityholder or any defect
in it shall not affect its sufficiency with respect to other Securityholders.
If a notice or communication is mailed in the manner provided above, it is duly
given, whether or not the addressee receives it.
In case by reason of the suspension of regular mail service, or by reason
of any other cause, it shall be impossible to mail any notice, as required by
this Indenture, then such method of notification as shall be made with the
approval of the Trustee shall constitute a sufficient mailing of such notice.
If the Company mails any notice or communication to Securityholders, it
shall mail a copy to the Trustee and all Agents at the same time.
SECTION 12.3 COMMUNICATIONS BY HOLDERS WITH OTHER HOLDERS.
Securityholders may communicate pursuant to TIA Section 312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Trustee, the Registrar and anyone else shall have
the protection of TIA Section 312(c).
SECTION 12.4 CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Company to the Trustee to take any
action under this Indenture, the Company shall furnish to the Trustee:
(1) an Officers' Certificate (which shall include the statements set
forth in Section 12.5) stating that, in the opinion of the signers, all
conditions precedent, if any, provided for in this Indenture
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relating to the proposed action have been complied with; and
(2) an Opinion of Counsel (which shall include the statements set
forth in Section 12.5) stating that, in the opinion of such counsel, all
such conditions precedent have been complied with.
SECTION 12.5 STATEMENTS REQUIRED IN CERTIFICATE AND OPINION.
Each Certificate and Opinion with respect to compliance with a condition or
covenant provided for in this Indenture shall include:
(1) a statement that the Person making such certificate or opinion
has read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of such Person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and
(4) a statement as to whether or not, in the opinion of such Person,
such covenant or condition has been complied with.
SECTION 12.6 RULES BY TRUSTEE AND AGENTS.
The Trustee may make reasonable rules for action by or at a meeting of
Securityholders. The Registrar, Paying Agent or Conversion Agent may make
reasonable rules for its functions.
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SECTION 12.7 RECORD DATE.
Whenever the Company or the Trustee solicits an act of Securityholders,
the Company or the Trustee may fix in advance of the solicitation of such act
a date as the record date for determining Securityholders entitled to perform
said act. The record date shall be not more than 15 days prior to the date
fixed for the solicitation of said act.
SECTION 12.8 LEGAL HOLIDAYS.
A "Legal Holiday" is a Saturday, a Sunday or a day on which banks or
trust companies in the city in which either the Trustee or the Company is
located are not required to be open. If a payment date is a Legal Holiday at
a place of payment, payment may be made at that place on the next succeeding
day that is not a Legal Holiday, and no interest shall accrue for the
intervening period.
SECTION 12.9 GOVERNING LAW.
The laws of the State of New York shall govern this Indenture and the
Securities without regard to principles of conflicts of law.
SECTION 12.10 NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret another indenture, loan or
debt agreement of the Company or a Subsidiary. Any such indenture, loan or
debt agreement may not be used to interpret this Indenture.
SECTION 12.11 NO RECOURSE AGAINST OTHERS.
No shareholder, director or officer, as such, past, present or future,
of the Company or of any successor corporation or trust shall have any
liability for any obligation of the Company under the Securities or the
Indenture or for any claim based on, in respect of or by reason of, such
obligations or their creation. Each Holder of a Security by accepting a
Security waives and releases all such liability. The waiver and release are
part of the consideration for the issuance of the Securities.
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SECTION 12.12 SUCCESSORS.
All agreements of the Company in this Indenture and the Securities shall
bind its successor. All agreements of the Trustee in this Indenture shall
bind its successor.
SECTION 12.13 MULTIPLE COUNTERPARTS.
The parties may sign multiple counterparts of this Indenture. Each
signed counterpart shall be deemed an original, but all of them together
represent the same agreement.
SECTION 12.14 TABLE OF CONTENTS, HEADINGS, ETC.
The table of contents, cross-reference sheet and headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part hereof, and shall in no way
modify or restrict any of the terms or provisions hereof.
SECTION 12.15 SEVERABILITY.
In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby, and a Holder shall have no claim therefor against any party hereto.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, all as of the date first written above.
STERLING HOUSE CORPORATION,
a Kansas corporation
By: /s/ Xxxxxxx X. Xxxxxxxx
------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Chairman and CEO
FLEET NATIONAL BANK,
as Trustee
By: /s/
------------------------------
Name:
Title:
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EXHIBIT A
FORM OF SECURITY
-77-
[FORM OF FACE OF SECURITY]
Unless and until it is exchanged in whole or in part for Securities in
definitive form, this Security may not be transferred except as a whole by
the Depository to a nominee of the Depository or by a nominee of the
Depository to the Depository or another nominee of the Depository or by the
Depository or any such nominee to a successor Depository or a nominee of such
successor Depository. Unless this certificate is presented by an authorized
representative of The Depository Trust Company, a New York corporation (55
Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx) ("XXX"), to the issuer or its agent for
registration of transfer, exchange or payment, and any certificate issued is
registered in the name of Cede & Co. or such other name as may be requested
by an authorized representative of DTC (and any payment is made to Cede & Co.
or such other entity as may be requested by an authorized representative of
DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR
TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede &
Co., has an interest herein.(1)
[THIS SECURITY HAS BEEN ACQUIRED BY THE HOLDER FOR THE PURPOSE OF INVESTMENT
AND NOT WITH A VIEW TO OR FOR SALE IN CONNECTION WITH ANY DISTRIBUTION. THIS
SECURITY (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS
AND NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE
OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR
AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS SECURITY IS HEREBY
NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS
OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE
HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE HEREOF, REPRESENTS, ACKNOWLEDGES
AND AGREES FOR THE BENEFIT OF THE COMPANY THAT: (I) IT HAS ACQUIRED A
"RESTRICTED" SECURITY WHICH HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT;
(II) IT WILL NOT OFFER, SELL OR OTHERWISE TRANSFER THIS SECURITY EXCEPT (A)
TO STERLING HOUSE CORPORATION, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH
HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) IN THE CASE OF A
HOLDER WHO IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A
--------------------------
(1) This paragraph should be included only if the Security is issued in
global form.
UNDER THE SECURITIES ACT), FOR SO LONG AS THIS SECURITY IS ELIGIBLE FOR
RESALE PURSUANT TO RULE 144A, TO A PERSON WHO THE SELLER REASONABLY BELIEVES
IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, OR
(D) IN ACCORDANCE WITH RULE 144 UNDER THE SECURITIES ACT OR PURSUANT TO
ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT, (AND CONFIRMED IN AN OPINION OF COUNSEL ACCEPTABLE IN FORM
AND SUBSTANCE TO THE ISSUER OF THIS SECURITY IF THE ISSUER SO REQUESTS) AND,
IN EACH CASE, IN ACCORDANCE WITH THE APPLICABLE SECURITIES LAWS OF ANY STATE
OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION; AND (III) IT WILL,
AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS
SECURITY FROM IT OF THE RESALE RESTRICTIONS SET FORTH IN (II) ABOVE.](2)
STERLING HOUSE CORPORATION
6.75% Convertible Subordinated Debenture Due 2006
STERLING HOUSE CORPORATION, a Kansas corporation, promises to pay to
6.75% S P E C I M E N 6.75%
DUE 2006 DUE 2006
or registered assigns, the principal sum of _____________________ Dollars, on
June 30, 2006
Interest Payment Dated: June 30 and December 30
Record Dates: June 15 and December 15
Additional provisions of this Security are set forth on other side
of this Security.
--------------------------
(2) To be included on all Securities which
are Restricted Securities.
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Dated:
CERTIFICATE OF AUTHENTICATION STERLING HOUSE CORPORATION
FLEET NATIONAL BANK,
as Trustee, certifies that this
is one of the Securities referred
to in the within mentioned
Indenture.
By: By:
By:
Authorized Signatory SEAL Chairman of the Board
President
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[FORM OF REVERSE OF SECURITY]
STERLING HOUSE CORPORATION
6.75% Convertible Subordinated Debenture Due 2006
1. INTEREST. Sterling House Corporation, a Kansas corporation (the
"Company"), promises to pay interest on the principal amount of this Security at
the rate per annum shown above. The Company will pay interest semiannually on
June 30 and December 30 of each year beginning December 30, 1996. Interest on
the Securities will accrue from the most recent date to which interest has been
paid or, if no interest has been paid, from May 23, 1996; provided that, if
there is no existing Default in the payment of interest, and if this Security is
authenticated between a record date referred to on the face hereof and the next
succeeding interest payment date, interest shall accrue from such interest
payment date. Interest will be computed on the basis of a 360 day year of
twelve 30-day months.
2. METHOD OF PAYMENT. The Company will pay interest on the Securities
(except defaulted interest) to the persons who are the registered Holders of the
Securities at the close of business on the December 15 or June 15 next preceding
the interest payment date. Holders must surrender Securities to a Paying Agent
to collect principal and premium payments. The Company will pay principal,
premium and interest in money of the United States that at the time of payment
is legal tender for payment of public and private debts. The Company, however,
may pay principal, premium and interest by its check payable in such money. It
may mail an interest check to a Holder's registered address.
The payment of principal of and premium, if any, on this Security shall
be payable only upon surrender of this Security at the office or agency of the
Paying Agent in the Borough of Manhattan, City and State of New York or the City
of Providence, State of Rhode Island. Payments of principal of, premium, if
any, and interest on this Security shall be made at the office or agency of the
Trustee maintained in the Borough of Manhattan, City and State of New York or
the City of Providence, State of Rhode Island, or, in the case of any such
payments other than the payment of principal and premium, if any, at the
Company's option, by check mailed to the Person entitled thereto
at such Person's address last appearing on the Company's register.
3. REGISTRAR AND AGENTS. Initially, Fleet National Bank will act as
Registrar, Paying Agent, Conversion Agent and agent for service of notices and
demands. The Company may change any Registrar, co-registrar, Paying Agent,
Conversion Agent and agent for service of notices and demands without notice.
The Company or any of its Subsidiaries may act as Paying Agent or Conversion
Agent. The address of Fleet National Bank is 000 Xxxxxxxxxxx Xxxxxx,
Xxxxxxxxxx, Xxxxx Xxxxxx 00000.
4. INDENTURE; LIMITATIONS. The Company issued the Securities under an
Indenture, dated as of May 23, 1996 (the "Indenture"), between the Company and
Fleet National Bank (the "Trustee"). Capitalized terms herein are used as
defined in the Indenture unless otherwise defined herein. The terms of the
Securities include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939 (15 U.S. Code Sections
77aaa-77bbbb) as in effect on the date of the Indenture. The Securities are
subject to all such terms, and the Holders of the Securities are referred to the
Indenture and said Act for a statement of them.
The Securities are general unsecured obligations of the Company
limited to $35,000,000 principal amount. The Indenture imposes certain
limitations on the ability of the Company to, among other things, make
payments in respect of its Capital Stock, merge or consolidate with any other
Person and sell, lease, transfer or otherwise dispose of its properties or
assets.
5. OPTIONAL REDEMPTION BY THE COMPANY. The Company may, at its
option, redeem the Securities at any time, in whole or in part, together with
accrued and unpaid interest to the Redemption Date, after July 15, 1999 in
accordance with the following schedule:
Redemption
After July 15, Price
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1999 102%
2000 101%
2001 and thereafter 100%
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6. NOTICE OF REDEMPTION. Notice of redemption will be mailed at least
30 days but not more than 60 days before the Redemption Date to each Holder of
Securities to be redeemed at his registered address. Securities in
denominations larger than $1,000 principal amount may be redeemed in part, but
only in whole multiples thereof. On and after the Redemption Date interest
ceases to accrue on Securities or portions of them called for redemption.
7. CONVERSION. A Holder of a Security may convert such Security into
shares of common stock of the Company after the effective date of the
Registration Statement and before June 30, 2006. If the Security is called for
redemption, the Holder may convert it at any time before the close of business
on the date fixed for such redemption. The initial conversion price is $22.42
per share, subject to adjustment in certain events. To determine the number of
shares issuable upon conversion of a Security, divide the principal amount to be
converted by the conversion price in effect on the conversion date. The Company
will deliver a check for any fractional share.
To convert a Security, a Holder must (1) complete and sign the conversion
notice on the back of the Security, (2) surrender the Security to the Conversion
Agent, (3) furnish appropriate endorsements and transfer documents if required
by the Registrar or Conversion Agent and (4) pay any transfer or similar tax if
required. No payment or adjustment is to be made on conversion for interest
accrued hereon or for dividends on shares of common stock issued on conversion;
PROVIDED, HOWEVER, that if a Security is surrendered for conversion after the
record date for a payment of interest and on or before the interest payment
date, then, notwithstanding such conversion, the interest falling due to such
interest payment date will be paid to the Person in whose name the Security is
registered at the close of business on such record date and any Security
surrendered for conversion during the period from the close of business on any
regular record date to the opening of business on the corresponding interest
payment date must be accompanied by payment of an amount equal to the interest
payable on such interest payment date. A Holder may convert a portion of a
Security if the portion is $1,000 principal amount or an integral multiple
thereof.
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If the Company is a party to a consolidation or merger or a transfer or
lease of all or substantially all of its assets, the right to convert a Security
into shares of common stock may be changed into a right to convert it into
securities, cash or other assets of the Company or another Person.
8. SUBORDINATION. This Security is subordinated to all Senior
Indebtedness of the Company. To the extent and in the manner provided in the
Indenture, Senior Indebtedness must be paid before any payment may be made to
any Holders of Securities. Any Securityholder by accepting this Security agrees
to such subordination and authorizes the Trustee to give it effect.
In addition to all other rights of Senior Indebtedness described in the
Indenture, the Senior Indebtedness shall continue to be Senior Indebtedness and
entitled to the benefits of the subordination provisions irrespective of any
amendment, modification or waiver of any term of any instrument relating to the
Senior Indebtedness or extension or renewal of the Senior Indebtedness.
9. DENOMINATIONS, TRANSFER, EXCHANGE. The Securities issued under the
Indenture are in the aggregate principal amount of up to $35,000,000. The
Securities are in registered form without coupons in denominations of $1,000
principal amount and integral multiples thereof. A Holder may register the
transfer of or exchange Securities in accordance with the Indenture. The
Registrar may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents and to pay any taxes and fees required by
law or permitted by the Indenture. The Registrar need not register the transfer
of or exchange any Securities selected for redemption or register the transfer
of or exchange any Securities for a period of 15 days before a selection of
Securities to be redeemed.
10. PERSONS DEEMED OWNERS. The registered Holder of a Security may be
treated as its owner for all purposes.
11. UNCLAIMED MONEY. If money for the payment of principal or
interest on any Securities remains unclaimed for two years, the Trustee and
the Paying Agent will pay the money back to the Company at its written
request. After that, Holders may look only to the Company for payment.
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12. DISCHARGE PRIOR TO REDEMPTION OR MATURITY. The Indenture will be
discharged and canceled except for certain sections thereof upon payment of all
the Securities, or upon the irrevocable deposit with the Trustee of funds or
U.S. Government Obligations maturing on or before such payment date or
Redemption Date, sufficient to pay principal, premium, if any, and interest on
such payment or redemption.
13. AMENDMENT AND WAIVER. Subject to certain exceptions, without notice
to the Holders of the Securities, the Indenture or the Securities may be amended
with the consent of the Holders of at least 66-2/3% in principal amount of the
Securities then outstanding and any existing default or compliance with any
provision may be waived with the consent of the Holders of a majority in
principal amount of the Securities then outstanding. Without the consent of or
notice to any Securityholder, the Company may amend or supplement the Indenture
or the Securities to, among other things, provide for uncertificated Securities,
to cure any ambiguity, defect or inconsistency or make any other change that
does not adversely affect the rights of any Securityholder.
14. SUCCESSORS. When a successor assumes all the obligations of its
predecessor under the Securities and the Indenture, the predecessor will be
released from those obligations.
15. DEFAULTS AND REMEDIES. If an Event of Default, as defined in the
Indenture (other than a Event of Default relating to bankruptcy of the Company),
occurs and is continuing, the Trustee or the Holders of a majority in principal
amount of Securities may declare all the Securities to be due and payable
immediately in the manner and with the effect provided in the Indenture. If an
Event of Default relating to bankruptcy of the Company occurs, then all
Securities shall become immediately due and payable without any declaration or
act on the part of the Trustee or any Holder. Holders of Securities may not
enforce the Indenture or the Securities except as provided in the Indenture.
The Trustee may require indemnity satisfactory to it, subject to the provisions
of the TIA, before it enforces the Indenture or the Securities. Subject to
certain limitations, Holders of a majority in principal amount of the Securities
then outstanding may direct the Trustee in its exercise of any trust or power.
The Trustee may withhold from Holders of Securities notice of any continuing
default (except a default in payment of
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principal or interest) if it determines that withholding notice is in
their interests. The Company is required to file periodic reports with
the Trustee as to the absence of any Default or Event of Default.
16. TRUSTEE DEALINGS WITH THE COMPANY. Fleet National Bank, the Trustee
under the Indenture, in its individual or any other capacity, may make loans to,
accept deposits from, and perform services for the Company or its Affiliates,
and may otherwise deal with the Company or its Affiliates, as if it were not
Trustee.
17. NO RECOURSE AGAINST OTHERS. No shareholder, director, officer or
incorporator, as such, past, present or future, of the Company or any successor
corporation shall have any liability for any obligation of the Company under the
Securities or the Indenture or for any claim based on, in respect of or by
reason of, such obligations or their creation. Each Holder of a Security by
accepting a Security waives and releases all such liability. The waiver and
release are part of the consideration for the issuance of the Securities.
18. AUTHENTICATION. This Security shall not be valid until the Trustee
signs the certificate of authentication on the other side of this Security.
19. ABBREVIATIONS. Customary abbreviations may be used in the name of a
Securityholder or an assignee, such as: TEN COM (=tenants in common), TEN ENT
(=tenants by the entireties), JT TEN (=joint tenants with rights of survivorship
and not as tenants in common), CUST (=Custodian), and U/G/M/A (=Uniform Gifts to
Minors Act).
The Company will furnish to any Securityholder upon written request and
without charge a copy for the Indenture. It also will furnish the text of this
Security in larger type. Requests may be made to: Sterling House Corporation,
000 Xxxxx Xxxx Xxxx, Xxxxx 000, Xxxxxxx, Xxxxxx 00000. Attention: President.
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TRANSFER NOTICE
If you the Holder wants to assign this Security, fill in the form below and have
your signature guaranteed:
For value received, I or we assign and transfer this Security to
(INSERT ASSIGNEE'S SOCIAL SECURITY OR
TAX IDENTIFICATION NUMBER)
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...............................................................................
...............................................................................
...............................................................................
...............................................................................
(Print or type assignee's name, address and zip code)
.............................................................. agent to
transfer agent to transfer this Security on the books of the Company. The
agent may substitute another to act for him.
In connection with the transfer of this Security, the undersigned
certifies that:
(Check one)
/ / (a) This Security is being transferred to a "qualified
institutional buyer" (as defined in Rule 144A under the
Securities Act) in compliance with the exemption from
registration under the Securities Act provided by Rule
144A.
/ / (b) This Security is being transferred to Sterling House
Corporation.
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/ / (c) Transfer other than those above in connection with which
the Company has received an opinion of counsel
(satisfactory to it in form and substance) to the effect
that the transfer is being made pursuant to an exemption
from, or in a transaction not subject to, the
registration requirements of the Securities Act.
/ / (d) This Security is being exchanged for a beneficial interest
in the Rule 144A Global Security and the undersigned is a
"qualified institutional buyer" (as defined in Rule 144A
under the Securities Act of 1933).
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Date:
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Your signature:
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(Sign exactly as your name appears on the other
side of this Security)
Signature Guarantee*:
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*Signature must be guaranteed by an eligible guarantor institution within the
meaning of Securities and Exchange Commission Rule 17Ad-15 (including banks,
stock brokers, savings and loan associations, national securities exchanges,
registered securities associations, clearing agencies and credit unions) with
membership or participation in an approved signature guarantee medallion program
if this Security is to be delivered other than to and in the name of the
registered holder.
IF NONE OF THE FOREGOING BOXES IS CHECKED, THE TRUSTEE SHALL NOT BE OBLIGATED TO
REGISTER THE TRANSFER OF THIS SECURITY UNLESS AND UNTIL THE CONDITIONS TO ANY
SUCH TRANSFER OF REGISTRATION SET FORTH HEREIN, ON THE FACE HEREOF AND IN THE
INDENTURE SHALL HAVE BEEN SATISFIED.
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CONVERSION NOTICE
To convert this Security into shares of common stock of the Company,
check the box:
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To convert only part of this Security, state the principal amount to be
converted (which must be a minimum of $1,000 or any multiple thereof):
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$
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If you want the Security certificate, if any, made out in another person's name,
fill in the form below:
(INSERT OTHER PERSON'S SOCIAL SECURITY OR
TAX IDENTIFICATION NUMBER)
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(Print or type assignee's name, address and zip code)
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Date:
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Your signature:
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(Sign exactly as your name appears on the other side of this Security)
Signature Guaranteed By:
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Note: Signature must be guaranteed
by a member firm of the New York
Stock Exchange or a commercial
bank or trust company.
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