EXHIBIT 10.1
------------------------------------
INTEGRATED ELECTRICAL SERVICES, INC.
AND EACH OF THE GUARANTORS PARTY HERETO
------------------
THE BANK OF NEW YORK
TRUSTEE
------------------
INDENTURE
DATED AS OF NOVEMBER 24, 2004
-------------------
SERIES A 6.5% SENIOR CONVERTIBLE NOTES DUE 2014
SERIES B 6.5% SENIOR CONVERTIBLE NOTES DUE 2014
---------------------------------------
TABLE OF CONTENTS
Page
----
Article I Definitions and Incorporation by Reference............................................................. 1
Section 1.1 Definitions............................................................................. 1
Section 1.2 Other Definitions....................................................................... 8
Section 1.3 Incorporation by Reference of Trust Indenture Act....................................... 9
Section 1.4 Rules of Construction................................................................... 10
Section 1.5 Acts of Holders......................................................................... 10
Article II The Securities........................................................................................ 11
Section 2.1 Form and Dating......................................................................... 11
Section 2.2 Execution and Authentication............................................................ 12
Section 2.3 Registrar, Paying Agent and Conversion Agent............................................ 13
Section 2.4 Paying Agent to Hold Money and Securities in Trust...................................... 13
Section 2.5 Securityholder Lists.................................................................... 13
Section 2.6 Transfer and Exchange................................................................... 14
Section 2.7 Replacement Securities.................................................................. 15
Section 2.8 Outstanding Securities; Determination of Holder's Action................................ 16
Section 2.9 Temporary Securities.................................................................... 17
Section 2.10 Cancellation............................................................................ 17
Section 2.11 Persons Deemed Owners................................................................... 17
Section 2.12 Special Transfer Provisions............................................................. 18
Section 2.13 CUSIP Numbers........................................................................... 22
Section 2.14 Re-Issuance as Same Series.............................................................. 22
Section 2.15 Issuance of Additional Securities....................................................... 23
Article III Repurchase of Securities............................................................................. 23
Section 3.1 Purchase of Securities at Option of the Holder.......................................... 23
Section 3.2 Purchase of Securities at Option of the Holder upon a Fundamental Change................ 23
Section 3.3 Conditions to the Company's Election to Pay the Repurchase Price or the
Fundamental Change Repurchase Price in Common Stock..................................... 24
Section 3.4 Notices; Method of Exercising Repurchase Right, Etc. ................................... 26
Section 3.5 Deposit of Repurchase Price or Fundamental Change Repurchase Price...................... 31
Section 3.6 Covenant to Comply With Securities Laws Upon Purchase of Securities..................... 31
Article IV Redemption of Securities.............................................................................. 32
Section 4.1 Optional Redemption..................................................................... 32
Section 4.2 Election to Redeem; Notice to Trustee................................................... 32
Section 4.3 Selection by Trustee of Securities to Be Redeemed....................................... 32
i
Section 4.4 Notice of Redemption.................................................................... 33
Section 4.5 Deposit of Redemption Price............................................................. 34
Section 4.6 Securities Payable on Redemption Date................................................... 34
Section 4.7 Conversion Arrangement on Call for Redemption........................................... 34
Article V Covenants.............................................................................................. 35
Section 5.1 Payment of Securities................................................................... 35
Section 5.2 SEC and Other Reports................................................................... 35
Section 5.3 Compliance Certificate.................................................................. 36
Section 5.4 Further Instruments and Acts............................................................ 36
Section 5.5 Maintenance of Office or Agency......................................................... 37
Section 5.6 Delivery of Certain Information......................................................... 37
Section 5.7 Existence............................................................................... 37
Section 5.8 Resale of Certain Securities............................................................ 37
Section 5.9 Liquidated Damages Under the Registration Rights Agreement.............................. 37
Section 5.10 Information for IRS Filings............................................................. 38
Section 5.11 Additional Subsidiary Guarantees........................................................ 38
Section 5.12 Book-Entry System....................................................................... 38
Article VI Make-Whole Premium and Redemption Premium............................................................. 38
Section 6.1 Entitlement to Make-Whole Premium and Redemption Premium................................ 38
Section 6.2 Payment of Make-Whole Premium and Redemption Premium.................................... 43
Section 6.3 Adjustment to the Make-Whole Premium.................................................... 43
Article VII Successor Corporation................................................................................ 44
Section 7.1 When Company May Merge or Transfer Assets............................................... 44
Article VIII Defaults and Remedies............................................................................... 45
Section 8.1 Events of Default....................................................................... 45
Section 8.2 Acceleration............................................................................ 47
Section 8.3 Other Remedies.......................................................................... 47
Section 8.4 Waiver of Past Defaults................................................................. 47
Section 8.5 Control by Majority..................................................................... 47
Section 8.6 Limitation on Suits..................................................................... 48
Section 8.7 Rights of Holders to Receive Payment.................................................... 48
Section 8.8 Collection Suit by Trustee.............................................................. 48
Section 8.9 Trustee May File Proofs of Claim........................................................ 48
Section 8.10 Priorities.............................................................................. 49
Section 8.11 Undertaking for Costs................................................................... 49
Section 8.12 Waiver of Stay, Extension or Usury Laws................................................. 50
Section 8.13 Restoration of Rights and Remedies...................................................... 50
Section 8.14 Rights and Remedies Cumulative.......................................................... 50
Section 8.15 Delay or Omission Not Waiver............................................................ 50
ii
Article IX Trustee............................................................................................... 51
Section 9.1 Duties of Trustee....................................................................... 51
Section 9.2 Rights of Trustee....................................................................... 52
Section 9.3 Individual Rights of Trustee............................................................ 53
Section 9.4 Trustee's Disclaimer.................................................................... 53
Section 9.5 Notice of Defaults...................................................................... 53
Section 9.6 Reports by Trustee to Holders........................................................... 54
Section 9.7 Compensation and Indemnity.............................................................. 54
Section 9.8 Replacement of Trustee.................................................................. 55
Section 9.9 Successor Trustee by Merger............................................................. 56
Section 9.10 Eligibility; Disqualification........................................................... 56
Section 9.11 Preferential Collection of Claims Against Company....................................... 56
Article X Discharge of Indenture................................................................................. 56
Section 10.1 Discharge of Liability on Securities.................................................... 56
Section 10.2 Repayment to the Company................................................................ 56
Article XI Amendments............................................................................................ 57
Section 11.1 Without Consent of Holders.............................................................. 57
Section 11.2 With Consent of Holders................................................................. 57
Section 11.3 Compliance with Trust Indenture Act..................................................... 59
Section 11.4 Revocation and Effect of Consents, Waivers and Actions.................................. 59
Section 11.5 Notation on or Exchange of Securities................................................... 59
Section 11.6 Trustee to Sign Supplemental Indentures................................................. 59
Section 11.7 Effect of Supplemental Indentures....................................................... 59
Article XII Subsidiary Guarantees................................................................................ 59
Section 12.1 Guarantee............................................................................... 59
Section 12.2 Limitation on Guarantor Liability....................................................... 61
Section 12.3 Execution and Delivery of Subsidiary Guarantee.......................................... 61
Section 12.4 Guarantors May Consolidate, Etc. on Certain Terms...................................... 62
Section 12.5 Releases................................................................................ 62
Article XIII Conversions......................................................................................... 63
Section 13.1 Conversion Privilege; Limitations on Conversion......................................... 63
Section 13.2 Conversion Procedure; Fractional Shares; Cash Settlement................................ 67
Section 13.3 Adjustment of Conversion Price.......................................................... 69
Section 13.4 Consolidation or Merger of the Company.................................................. 77
Section 13.5 Notice of Adjustment.................................................................... 78
Section 13.6 Notice in Certain Events................................................................ 79
Section 13.7 Company To Reserve Stock................................................................ 79
Section 13.8 Taxes on Conversion..................................................................... 80
Section 13.9 Conversion After Record Date............................................................ 80
iii
Section 13.10 Responsibility of Trustee for Conversion Provisions..................................... 81
Section 13.11 Unconditional Right of Holders to Convert............................................... 81
Section 13.12 Common Stock Restricted Securities Legends.............................................. 81
Article XIV Miscellaneous........................................................................................ 82
Section 14.1 Trust Indenture Act Controls............................................................ 82
Section 14.2 Notices................................................................................. 82
Section 14.3 Communication by Holders with Other Holders............................................. 83
Section 14.4 Certificate and Opinion as to Conditions Precedent...................................... 83
Section 14.5 Statements Required in Certificate or Opinion........................................... 83
Section 14.6 Separability Clause..................................................................... 84
Section 14.7 Rules by Trustee, Paying Agent, Conversion Agent and Registrar.......................... 84
Section 14.8 Governing Law........................................................................... 84
Section 14.9 No Recourse Against Others.............................................................. 84
Section 14.10 Successors.............................................................................. 84
Section 14.11 Multiple Originals...................................................................... 84
Section 14.12 Designated Senior Indebtedness.......................................................... 84
SCHEDULE I Existing Guarantors
EXHIBIT A Form of Global Security
EXHIBIT B Form of Certificated Security
EXHIBIT C Transfer Certificate
EXHIBIT D Institutional Accredited Investor Letter
EXHIBIT E Exchange Certificate
EXHIBIT F Common Stock Restricted Securities Legend
EXHIBIT G Form of Notation of Subsidiary Guarantee
EXHIBIT H Form of Supplemental Indenture
iv
INDENTURE, dated as of November 24, 2004, among INTEGRATED ELECTRICAL
SERVICES, INC., a corporation duly organized and existing under the laws of the
State of Delaware, having its principal office at 0000 Xxxx Xxxx Xxxxx, Xxxxx
000, Xxxxxxx, Xxxxx 00000 (the "Company"), the Guarantors (as defined) and THE
BANK OF NEW YORK, a New York banking corporation, as Trustee hereunder (the
"Trustee").
Each party agrees as follows for the benefit of the other parties and for
the equal and ratable benefit of the Holders of the Company's Series A 6.5%
Senior Convertible Notes due 2014 (the "Series A Securities") and the Company's
Series B 6.5% Senior Convertible Notes due 2014 (the "Series B Securities" and
together with the Series A Securities, the "Securities"):
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.1 Definitions.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct or cause the direction of the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
"AMEX" means American Stock Exchange LLC.
"Applicable Procedures" means, with respect to any transfer or transaction
involving a Global Security or beneficial interest therein, the rules and
procedures of the Depositary for such Security, in each case to the extent
applicable to such transaction and as in effect from time to time.
"Bankruptcy Code" means Title 11 of the United States Code entitled
"Bankruptcy", as now or hereafter in effect, or any successor thereto.
"Board of Directors" means either the board of directors of the Company or
any duly authorized committee of such board.
"Board Resolution" means a resolution of the Board of Directors.
"Business Day" means a day other than a Saturday or Sunday or any day on
which banking institutions in The City of New York, New York or Houston, Texas
are authorized or obligated by law or regulation to close.
"Capital Lease Obligation" means, at the time any determination thereof is
to be made, the amount of the liability in respect of a capital lease that would
at such time be required to be capitalized on a balance sheet in accordance with
GAAP.
"Capital Stock" means, with respect to any Person, any and all shares,
interests, membership interests, rights to purchase, warrants, options,
participations or other equivalents of or interests in (however designated) the
equity of such Person, whether now outstanding or issued after the date hereof,
including without limitation, all common stock and preferred stock.
"Certificated Securities" means Securities that are issued in
certificated, fully registered form, in the form attached hereto as Exhibit B.
"Change of Control" means the occurrence of one or more of the following
events:
(1) any sale, lease, exchange or other transfer (in one transaction
or a series of related transactions) of all or substantially all of the
Company's assets to any Person or group of related Persons (other than to
any of the Company's wholly owned Subsidiaries) as defined in Section
13(d) of the Exchange Act;
(2) the approval by the holders of the Company's Capital Stock of
any plan or proposal for liquidation or dissolution;
(3) if any Person or group shall become the beneficial owner (as
defined in Rule 13d-3 under the Exchange Act) of shares representing more
than 50% of the aggregate ordinary voting power represented by issued and
outstanding Voting Stock of the Company; or
(4) any consolidation or merger by the Company where Persons who are
beneficial owners (as defined in Rule 13d-3 under the Exchange Act) of the
Company's shares of Voting Stock immediately prior to such transaction no
longer own at least a majority of the total voting power of the continuing
or surviving corporation or entity.
Notwithstanding anything in this Indenture to the contrary, a "Change of
Control" will not be deemed to have occurred in respect of any of the foregoing
if at least 90% of the consideration, excluding cash payments for fractional
shares, in the subject transaction or event consists of shares of Capital Stock
or American Depositary Shares that are (A) listed on, or immediately after the
transaction or event will be listed on the NYSE or another United States
national securities exchange, or (B) approved, or immediately after the
transaction or event will be approved, for quotation on the NASDAQ National
Market or any similar United States system of automated dissemination of
quotations of securities prices.
"Closing Date" means the date of this Indenture.
"Closing Price" means, for any security as of any date, the last closing
trade price for such security on the principal United States securities market
on which such security is traded (which is currently the NYSE with respect to
the Common Stock) as reported by Bloomberg Financial Markets (or any successor
thereto, "Bloomberg"), or, if such exchange begins to operate on an extended
hours basis and does not designate the closing trade price, then the last trade
price of such security prior to 4:00:00 p.m. (New York City time) as reported by
Bloomberg, or, if such exchange is not the principal securities exchange or
trading market for such security, the last trade price of such security on the
principal securities exchange or trading market where such security is listed or
traded as reported by Bloomberg, or if the foregoing do
2
not apply, the last trade price of such security in the over-the-counter market
on the electronic bulletin board for such security as reported by Bloomberg, or,
if no last trade price is reported for such security by Bloomberg, the average
of the highest bid prices and the lowest ask prices of any market makers for
such security as reported in the "pink sheets" by Pink Sheets LLC (formerly the
National Quotation Bureau, Inc.). If the Closing Price cannot be calculated for
a security on a particular date on any of the foregoing bases, the Closing Price
of such security on such date shall be the fair market value as mutually
determined by the Company and the Majority Holders.
"Closing Price Per Share" means, with respect to the Common Stock, for any
day, the Closing Price per share of Common Stock.
"Common Stock" means the Common Stock, par value $0.01 per share, of the
Company existing on the date of this Indenture or any other shares of Capital
Stock of the Company into which such Common Stock shall be reclassified or
changed.
"Company" means the party named as the "Company" in the first introductory
paragraph of this Indenture, until a successor replaces it pursuant to the
applicable provisions of this Indenture and, thereafter, shall mean such
successor. The foregoing sentence shall likewise apply to any subsequent such
successor or successors.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by any two Officers.
"Conversion Date" means, with respect to any Holder, the date on which
such Holder has satisfied all the requirements to convert its Securities
pursuant to Section 13.2.
"Corporate Trust Office" means the principal office of the Trustee at
which at any time its corporate trust business shall be administered, which
office at the date hereof is located at 000 Xxxxxxx Xx., 0xx Xxxxx Xxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Corporate Trust Services, or such other address
as the Trustee may designate from time to time by notice to the Holders and the
Company, or the principal corporate trust office of any successor Trustee (or
such other address as a successor Trustee may designate from time to time by
notice to the Holders and the Company).
"Default" means an event which is, or after notice or lapse of time or
both would be, an Event of Default.
"Domestic Subsidiary" means any Subsidiary of the Company formed under the
laws of the United States or any state of the United States or the District of
Columbia or that guarantees or otherwise provides direct credit support for any
Indebtedness of the Company.
"DTC" means The Depository Trust Company.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Fundamental Change" means any Change of Control or Termination of
Trading.
3
"Fundamental Change Conversion Period" means the period from and including
the fifteenth (15th) Trading Day before the Effective Date of a Fundamental
Change to and including the fifteenth (15th) Trading Day after the Effective
Date of the Fundamental Change.
"GAAP" means generally accepted accounting principles in the United States
of America in effect from time to time.
"Global Security" means a Security that is registered in the register of
Securities in the name of a Depositary or a nominee thereof, in the form
attached hereto as Exhibit A.
"Guarantee" means a guarantee other than by endorsement of negotiable
instruments for collection in the ordinary course of business, direct or
indirect, in any manner including, without limitation, by way of a pledge of
assets or through letters of credit or reimbursement agreements in respect
thereof, of all or any part of any Indebtedness (whether arising by virtue of
partnership arrangements, or by agreements to keep-well, to purchase assets,
goods, securities or services, to take or pay or to maintain financial statement
conditions or otherwise).
"Guarantors" means each Subsidiary of the Company that is bound by a
Subsidiary Guarantee in accordance with the provisions of this Indenture, and
their respective successors and assigns, in each case, until the Subsidiary
Guarantee of such Person has been released in accordance with the provisions of
this Indenture.
"Hedging Obligations" means, with respect to any Person, the net payment
obligations of such Person under (i) interest rate swap agreements, interest
rate cap agreements and interest rate collar agreements and (ii) other similar
agreements or arrangements in each case entered into in the ordinary course of
business and pursuant to past practices designed to protect such Person against
fluctuations in commodity prices, interest rates or currency exchange rates.
"Holder" or "Securityholder" means a Person in whose name a Security is
registered on the Registrar's books.
"Indebtedness" of any Person means (a) any indebtedness, whether or not
contingent, (i) in respect of borrowed money, (ii) evidenced by bonds, notes,
debentures or similar instruments, (iii) letters of credit (or reimbursement
agreements in respect thereof), (iv) banker's acceptances, (v) representing
Capital Lease Obligations, (vi) the unpaid balance of the deferred purchase
price of any property, except to the extent that any such balance that
constitutes an accrued expense or trade payable in accordance with GAAP, (vii)
representing any Hedging Obligation, in each case, if and to the extent any of
the foregoing indebtedness (other than letters of credit and Hedging
Obligations) would appear as a liability upon a balance sheet prepared in
accordance with GAAP, as well as all Indebtedness of others secured by a lien on
any asset of such Person (whether or not such Indebtedness is assumed by such
Person) and, (b) to the extent not otherwise included in clause (a) hereof, the
Guarantee by such Person of any Indebtedness of any other Person. The amount of
any Indebtedness outstanding as of any date shall be (i) the accreted value
thereof, in the case of any Indebtedness that does not require current payments
of interest, and (ii) the principal amount thereof, together with any interest
thereon that is more than 30 days past due, in the case of any other
Indebtedness.
4
"Indenture" means this Indenture, as amended or supplemented from time to
time in accordance with the terms hereof.
"Interest Payment Dates" shall mean each May 1 and November 1, commencing
on May 1, 2005.
"Interest Rate" means 6.5%.
"Issue Date" of any Security means the date on which the Security was
originally issued or deemed issued as set forth on the face of the Security.
"Liquidated Damages" shall mean all liquidated damages then owing pursuant
to the Registration Rights Agreement and all Conversion Block Liquidated Damages
then owning pursuant to the provisions of Section 13.1(c).
"Majority Holders" shall mean the Holders of more than 50% of the
aggregate principal amount of the Securities at the time outstanding.
"NYSE" means The New York Stock Exchange, Inc.
"Officer" means the Chairman of the Board, the Vice Chairman, the Chief
Executive Officer, the President, the Chief Financial Officer, the Chief
Accounting Officer, any Vice President, the Treasurer, the Controller, or the
Secretary of the Company.
"Officers' Certificate" means a written certificate containing the
information specified in Section 14.4 and Section 14.5, signed in the name of
the Company by any two Officers, and delivered to the Trustee. An Officers'
Certificate given pursuant to Section 5.3 shall be signed by the Chief Executive
Officer, Chief Financial Officer, Chief Accounting Officer, Treasurer or
Controller of the Company but need not contain the information specified in
Section 14.4 and Section 14.5. Upon request of the Trustee from time to time,
the Company shall deliver incumbency certificates of the Officers who are
authorized to deal with the Trustee on behalf of the Company, and such
certificates shall contain specimen or facsimile signatures of such Officers.
"Opinion of Counsel" means a written opinion containing the information
specified in Section 14.4 and Section 14.5, from legal counsel who is reasonably
acceptable to the Trustee. The counsel may be an employee of, or counsel to, the
Company or the Trustee.
"Person" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization, or government or any agency or political
subdivision thereof.
"Purchase Agreement" means that certain Purchase Agreement dated as of
November 22, 2004 among the Company, the Guarantors (on the Closing Date) and
the Initial Purchasers.
"QIB" means a Qualified Institutional Buyer as defined in Rule 144A of the
Securities Act.
5
"Redemption Conversion Period" means, with respect to any redemption of
Securities pursuant to Article IV and a related conversion of Securities
pursuant to Article XIII, the period from and including the date of the
applicable Redemption Notice to and including the last Trading Day prior to the
Redemption Date specified in such Redemption Notice. Notwithstanding the
foregoing or any other provision of this Indenture, a Redemption Conversion
Period shall be deemed not to include any day that occurs within a Fundamental
Change Conversion Period, and the Company shall not be obligated to pay any
Redemption Premium in respect of, or otherwise by reason of, any conversion of
Securities that gives rise to an obligation on the part of the Company to pay a
Make-Whole Premium.
"Redemption Premium" means, with respect to any redemption of Securities
pursuant to Article IV and with respect to a conversion of such Securities
pursuant to Article XIII during the related Redemption Conversion Period, the
aggregate net present value of the remaining scheduled payments of interest
that, but for the redemption or conversion of such Securities hereunder, would
have accrued on such Securities during the period from the Redemption Date (in
the case of a redemption) or the Conversion Date (in the case of a conversion)
through the Stated Maturity, calculated using a discount rate equal to the
Treasury Yield at 5:00 p.m. on the third Business Day preceding such Redemption
Date or Conversion Date, as the case may be.
"Registration Rights Agreement" means the Registration Rights Agreement,
dated as of the date hereof, among the Company and the Initial Purchasers.
"Responsible Officer" means any officer within the corporate trust
department of the Trustee, including any vice president, assistant vice
president, assistant treasurer, trust officer or any other officer of the
Trustee who customarily performs functions similar to those performed by the
Persons who at the time shall be such officers, or to whom any corporate trust
matter is referred because of such Person's knowledge of and familiarity with
the particular subject and who shall have direct responsibility for the
administration of this Indenture.
"Restricted Security" means a Security required to bear the restrictive
legend set forth in the form of Security set forth in Exhibits A or B of this
Indenture, as applicable.
"Rule 144" means Rule 144 under the Securities Act (or any successor
provision), as it may be amended from time to time.
"Rule 144A" means Rule 144A under the Securities Act (or any successor
provision), as it may be amended from time to time.
"SEC" means the Securities and Exchange Commission.
"Securities" has the meaning assigned to it in the preamble to this
Indenture and shall include the Securities issued pursuant to Section 2.2
hereof.
"Securities Act" means the Securities Act of 1933, as amended.
"Securityholder" or "Holder" means a Person in whose name a Security is
registered on the Registrar's books.
6
"Series A Securities" has the meaning assigned to it in the preamble to
this Indenture.
"Series B Securities" has the meaning assigned to it in the preamble to
this Indenture.
"Share Limitation" means the Xxxxxxxx Act Limitation and, if and only if
the provisions of Section 13.1(c) are applicable as set forth in the first
sentence of Section 13.1(c), the limitations set forth in Section 13.1(c).
"Significant Subsidiary" shall have the meaning ascribed to such term in
Rule 405 of the Securities Act.
"Stated Maturity," when used with respect to any Security, means November
1, 2014.
"Subsidiary" means any Person of which at least a majority of the
outstanding Voting Stock shall at the time directly or indirectly be owned or
controlled by the Company or by one or more Subsidiaries or by the Company and
one or more Subsidiaries.
"Subsidiary Guarantee" means the Guarantee by each Guarantor of the
Company's obligations under this Indenture and the Securities pursuant to the
terms of this Indenture.
"Termination of Trading" shall be deemed to have occurred if the Common
Stock or other Capital Stock into which the Securities are convertible is
neither listed for trading on the NYSE or the AMEX nor approved for listing on
the NASDAQ National Market or the NASDAQ SmallCap Market, and no American
Depositary Shares or similar instruments for such common stock are so listed or
approved for listing in the United States.
"TIA" means the Trust Indenture Act of 1939 as in effect on the date of
this Indenture, provided, however, that in the event the TIA is amended after
such date, TIA means, to the extent required by any such amendment, the TIA as
so amended.
"Trading Day" means (x) if the applicable security is quoted on the Nasdaq
National Market System, a day on which trades may be made thereon or (y) if the
applicable security is listed or admitted for trading on the NYSE, the AMEX or
another national securities exchange, a day on which the NYSE, the AMEX or such
other national securities exchange is open for business or (z) if the applicable
security is not so listed, admitted for trading or quoted, any day other than a
Saturday or Sunday or a day on which banking institutions in the State of New
York are authorized or obligated by law or executive order to close.
"Treasury Yield" means the yield to maturity at the time of computation of
United States Treasury securities with a constant maturity (as compiled and
published in the most recent Federal Reserve Statistical Release H.15 (519) that
has become publicly available on the third Business Day prior to the Redemption
Date (or, if such Statistical Release is no longer published, any publicly
available source for similar market data)) most nearly equal to the then
remaining term of the Securities to the Stated Maturity; provided, however, that
if the then remaining term of the Securities to the Stated Maturity is not equal
to the constant maturity of a United States Treasury security for which a weekly
average yield is given, the Treasury Yield shall be obtained by linear
interpolation (calculated to the nearest one-twelfth of a year) from the weekly
average yields of United States Treasury securities for which such yields are
given, except that if the then
7
remaining term of the Securities to the Stated Maturity is less than one year,
the Treasury Yield will be the weekly average yield on actually traded United
States Treasury securities adjusted to a constant maturity of one year.
"Trustee" means the party named as the "Trustee" in the first paragraph of
this Indenture until a successor replaces it pursuant to the applicable
provisions of this Indenture and, thereafter, shall mean such successor. The
foregoing sentence shall likewise apply to any subsequent such successor or
successors.
"Voting Stock" of a Person means Capital Stock of such Person of the class
or classes pursuant to which the holders thereof have the general voting power
to elect, or the general power to appoint, at least a majority of the board of
directors, managers or trustees of such Person (other than by reason of the
happening of any contingency).
"Weighted Average Price" means, for any security as of any date, the
dollar volume-weighted average price for such security on the principal United
States securities market on which such security is traded (which is currently
the NYSE with respect to the Common Stock) as reported by Bloomberg through its
"Volume at Price" functions during the period beginning at 9:30:01 a.m. (New
York City time) (or such other time as such market publicly announces is the
official open of trading), and ending at 4:00:00 p.m. (New York City time) (or
such other time as such market publicly announces is the official close of
trading), or, if such exchange is not the principal securities exchange or
trading market for such security, the dollar volume-weighted average price of
such security on the principal securities exchange or trading market where such
security is listed or traded as reported by Bloomberg, or if the foregoing do
not apply, the dollar volume-weighted average price of such security in the
over-the-counter market on the electronic bulletin board for such security as
reported by Bloomberg, or, if the dollar volume-weighted average price of such
security is not reported for such security by Bloomberg, the average of the
highest bid prices and the lowest ask prices of any market makers for such
security as reported in the "pink sheets" by Pink Sheets LLC (formerly the
National Quotation Bureau, Inc.). If the Weighted Average Price cannot be
calculated for a security on a particular date on any of the foregoing bases,
the Weighted Average Price of such security on such date shall be the fair
market value as mutually determined by the Company and the Majority Holders.
Section 1.2 Other Definitions.
Term: Defined in:
---- ----------
"Agent Members"................................................... Section 2.12(e)(v)
"Aggregate Cap"................................................... Section 13.1(c)
"Available Treasury Shares" ...................................... Section 13.1(c)
"Bankruptcy Law".................................................. Section 12.2
"beneficial owner"................................................ Section 3.4(j)
"Calculation Agent"............................................... Section 6.1(b)
"Cash Settlement Amount".......................................... Section 13.2
"Cash Settlement Notice Period"................................... Section 13.2
"Common Stock Restricted Securities Legend"....................... Section 13.12
"Company Notice".................................................. Section 3.4(a)
8
Term: Defined in:
---- ----------
"Conversion Agent"................................................ Section 2.3
"Conversion Block Liquidated Damages"............................. Section 13.1(c)
"Conversion Obligation"........................................... Section 13.2
"Conversion Price"................................................ Section 13.1(a)
"Conversion Retraction Period".................................... Section 13.2
"Depositary"...................................................... Section 2.1
"Effective Date".................................................. Section 6.1(a)(i)
"Election of Holder to Require Repurchase"........................ Section 2.1
"Event of Default"................................................ Section 8.1
"Exchange Cap".................................................... Section 13.1(c)
"Expiration Time"................................................. Section 13.3(f)
"Fundamental Change Repurchase Date".............................. Section 3.2
"Fundamental Change Repurchase Notice"............................ Section 3.4(b)
"Fundamental Change Repurchase Price"............................. Section 3.2
"Holder's Conversion Notice"...................................... Section 13.2
"Initial Purchasers".............................................. Section 2.15
"Legend".......................................................... Section 2.6(f)
"Make-Whole Premium".............................................. Section 6.1(a)(iii)
"Make-Whole Premium Table"........................................ Section 6.1(a)(iii)(C)
"Non-Electing Share" ............................................. Section 13.4
"Non-Stock-Converted Principal Amount"............................ Section 13.2
"Notice of Default"............................................... Section 8.1
"Optional Redemption Price"....................................... Section 4.1
"Paying Agent".................................................... Section 2.3
"Purchasers"...................................................... Section 4.7
"Purchased Shares" ............................................... Section 13.3(f)
"Redemption Date"................................................. Section 4.4(a)
"Redemption Notice"............................................... Section 4.4(a)
"Registrar"....................................................... Section 2.3
"Repurchase Date"................................................. Section 3.1
"Repurchase Notice"............................................... Section 3.4(b)
"Repurchase Price"................................................ Section 3.1
"Rule 144A Information"........................................... Section 5.6
"Stockholder Approval"............................................ Section 13.1(c)
"Stock Price"..................................................... Section 6.1(a)(ii)
"Stock Price Cap" ................................................ Section 6.1(a)(iii)(B)
"Stock Price Threshold" .......................................... Section 6.1(a)(iii)(A)
"transfer" ....................................................... Section 2.6(g)
"Trigger Event" .................................................. Section 13.3(d)
"Xxxxxxxx Act Limitation"......................................... Section 13.1(b)
Section 1.3 Incorporation by Reference of 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:
9
"Commission" means the SEC.
"indenture securities" means the Securities.
"indenture security holder" means a Securityholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the Securities and the Subsidiary Guarantees means the
Company and the Guarantors, respectively, and any successor obligor upon
the Securities and the Subsidiary Guarantees, respectively.
All other TIA terms used in this Indenture that are not defined herein and
that are defined by the TIA, defined by TIA reference to another statute or
defined by SEC rule have the meanings assigned to them by such definitions.
Section 1.4 Rules of Construction. Unless the context otherwise requires:
(a) a term has the meaning assigned to it;
(b) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(c) "or" is not exclusive;
(d) "including" means including, without limitation; and
(e) words in the singular include the plural, and words in the
plural include the singular.
Section 1.5 Acts of Holders.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by an
agent duly appointed in writing; and, except as herein otherwise expressly
provided, such action shall become effective when such instrument or
instruments are delivered to the Trustee and, where it is hereby expressly
required, to the Company and/or the Guarantors, as described in Section
14.2. Such instrument or instruments (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the "Act" of
Holders signing such instrument or instruments. Proof of execution of any
such instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Indenture and conclusive in favor of
the Trustee, the Company and the Guarantors, if made in the manner
provided in Section 1.5(b).
10
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer
authorized by law to take acknowledgments of deeds, certifying that the
individual signing such instrument or writing acknowledged to such officer
the execution thereof. Where such execution is by a signer acting in a
capacity other than such signer's individual capacity, such certificate or
affidavit shall also constitute sufficient proof of such signer's
authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be
proved in any other manner which the Trustee deems sufficient.
(c) The principal amount and serial number of any Security and the
ownership of Securities shall be proved by the Registrar.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Security shall bind every future
Holder of the same Security and the Holder of every Security issued upon
the registration of transfer thereof or in exchange therefor or in lieu
thereof in respect of anything done, omitted or suffered to be done by the
Trustee or the Company in reliance thereon, whether or not notation of
such action is made upon such Security.
(e) If the Company shall solicit from the Holders any request,
demand, authorization, direction, notice, consent, waiver or other Act,
the Company may, at its option, by or pursuant to a Board Resolution, fix
in advance a record date for the determination of Holders entitled to give
such request, demand, authorization, direction, notice, consent, waiver or
other Act, but the Company shall have no obligation to do so. If such a
record date is fixed, such request, demand, authorization, direction,
notice, consent, waiver or other Act may be given before or after such
record date, but only the Holders of record at the close of business on
such record date shall be deemed to be Holders for the purposes of
determining whether Holders of the requisite proportion of outstanding
Securities have authorized or agreed or consented to such request, demand,
authorization, direction, notice, consent, waiver or other Act, and for
that purpose the outstanding Securities shall be computed as of such
record date; provided, however, that no such authorization, agreement or
consent by the Holders on such record date shall be deemed effective
unless it shall become effective pursuant to the provisions of this
Indenture not later than six months after the record date.
ARTICLE II
THE SECURITIES
Section 2.1 Form and Dating. The Securities (including the form of
election to require repurchase (the "Election of Holder to Require Repurchase")
and the Trustee's certificate of authentication) shall be substantially in the
form of Exhibits A and B, which are a part of this Indenture. The Securities may
have such other notations, legends or endorsements required by law, stock
exchange rule or usage (provided, however, that any such notation, legend or
endorsement required by usage is in a form reasonably acceptable to the
Company). The
11
Company shall provide any such other notations, legends or endorsements to the
Trustee in writing. Each Security shall be dated the date of its authentication.
The Securities shall initially be issued in the form of a Global Security,
which shall be (a) substantially in the form of Exhibit A attached hereto, (b)
registered in the name of DTC or the nominee thereof (DTC, or any successor
thereto, and any such nominee being hereinafter referred to as the
"Depositary"), (c) executed by the Company, and authenticated and delivered by
the Trustee, in accordance with this Section 2.1 and with Section 2.2 and (d)
deposited with the Trustee at its Corporate Trust Office, as custodian for the
Depositary.
Each Global Security shall represent such of the outstanding Securities as
shall be specified therein and each shall provide that it shall represent the
aggregate amount of outstanding Securities from time to time endorsed thereon
and that the aggregate amount of outstanding Securities represented thereby may
from time to time be reduced or increased, as appropriate, to reflect exchanges,
repurchases and conversions. Any adjustment of the aggregate principal amount of
a Global Security to reflect the amount of any increase or decrease in the
amount of outstanding Securities represented thereby shall be made by the
Trustee in accordance with instructions given by the Holder thereof as required
by Section 2.12 hereof and shall be made on the records of the Trustee, the
Registrar and the Depositary.
Section 2.2 Execution and Authentication. The Securities shall be executed
on behalf of the Company by any Officer. The signature of the Officer on the
Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals who
were, at the time of the execution of the Securities, Officers shall bind the
Company, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such Securities or
did not hold such offices at the date of authentication of such Securities.
No Security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein duly
executed by the Trustee by manual signature of an authorized signatory, and such
certificate upon any Security shall be conclusive evidence, and the only
evidence, that such Security has been duly authenticated and delivered
hereunder.
The Trustee shall authenticate and deliver for original issue, without any
further action by the Company (notwithstanding anything to the contrary set
forth in this Indenture), (a) on the Closing Date, Securities with an aggregate
principal amount not to exceed $36,000,000 and (b) then thereafter in accordance
with the provisions of Section 2.15, Securities (with an aggregate principal
amount not to exceed $14,000,000) in an aggregate principal amount specified in
one or more Company Orders (such Securities issued after the Closing Date, the
"Additional Securities").
The Securities shall be issued only in registered form without coupons and
only in denominations of $1,000 of principal amount and any integral multiple of
$1,000.
12
Section 2.3 Registrar, Paying Agent and Conversion Agent. 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 in
the Borough of Manhattan, The City of New York, where Securities may be
presented for purchase or payment ("Paying Agent") and an office or agency where
Securities may be presented for conversion ("Conversion Agent"). The Registrar
shall keep a register of the Securities and of their transfer and exchange. The
Company may have one or more co-registrars, one or more additional paying agents
and one or more additional conversion agents. The term Paying Agent includes any
additional paying agent, including any named pursuant to Section 5.5. The term
Conversion Agent includes any additional conversion agent, including any named
pursuant to Section 5.5.
The Company shall enter into an appropriate agency agreement with any
Registrar, Paying Agent, Conversion Agent or co-registrar (in each case, if such
Registrar, agent or co-registrar is a Person other than the Trustee). The
agreement shall implement the provisions of this Indenture that relate to such
agent. The Company shall notify the Trustee of the name and address of any such
agent. If the Company fails to maintain a Registrar, Paying Agent or Conversion
Agent, the Trustee shall act as such and shall be entitled to appropriate
compensation therefor pursuant to Section 9.7. The Company or any Subsidiary or
an Affiliate of either of them may not act as Paying Agent, Registrar,
Conversion Agent or co-registrar under this Indenture.
The Company initially appoints the Trustee as Registrar, Conversion Agent
and Paying Agent in connection with the Securities.
Section 2.4 Paying Agent to Hold Money and Securities in Trust. Except as
otherwise provided herein, on or prior to each due date of payments in respect
of any Security, the Company shall deposit with the Paying Agent a sum of money
(in immediately available funds if deposited on the due date) sufficient to make
such payments when so becoming due. The Company shall require each Paying Agent
(other than the Trustee) to agree in writing that the Paying Agent shall hold in
trust for the benefit of Securityholders or the Trustee all money held by the
Paying Agent for the making of payments in respect of the Securities and shall
notify the Trustee of any default by the Company in making any such payment. At
any time during the continuance of any such default, the Paying Agent shall,
upon the written request of the Trustee, forthwith pay to the Trustee all money
so held in trust. The Company at any time may require a Paying Agent to pay all
money held by it to the Trustee and to account for any funds and Common Stock
disbursed by it. Upon doing so, the Paying Agent shall have no further liability
for the money.
Section 2.5 Securityholder Lists. If the Trustee is not the Registrar, the
Company shall cause to be furnished to the Trustee at least semi-annually on
January 1 and July 1 all information in the possession or control of the Company
as to the names and addresses of the Securityholders dated within 15 days of the
date on which the list is furnished and at such other times as the Trustee may
request in writing a list in such form and as of such date as the Trustee may
reasonably require of the names and addresses of Securityholders. The Trustee
shall preserve in as current a form as is reasonably practicable all information
received from the Company as to the names and addresses of Securityholders.
13
Section 2.6 Transfer and Exchange.
(a) Subject to Section 2.12 hereof, upon surrender for registration
of transfer of any Security, together with a written instrument of
transfer satisfactory to the Registrar duly executed by the Securityholder
or such Securityholder's attorney duly authorized in writing, at the
office or agency of the Company designated as Registrar or co-registrar
pursuant to Section 2.3, the Company shall execute, and the Trustee shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Securities of any authorized denomination or
denominations, of a like aggregate principal amount and of like series.
The Company shall not charge a service charge for any registration of
transfer or exchange, but the Company may require payment of a sum
sufficient to pay all taxes, assessments or other governmental charges
that may be imposed in connection with the transfer or exchange of the
Securities from the Securityholder requesting such transfer or exchange,
other than exchanges pursuant to Section 2.9 not involving any transfer.
At the option of the Holder, Securities may be exchanged for other
Securities of any authorized denomination or denominations, of a like
aggregate principal amount and series upon surrender of the Securities to
be exchanged, together with a written instrument of exchange satisfactory
to the Registrar duly executed by the Securityholder or such
Securityholder's attorney duly authorized in writing, at such office or
agency. Whenever any Securities are so surrendered for exchange, the
Company shall execute, and the Trustee shall authenticate and deliver, the
Securities which the Holder making the exchange is entitled to receive.
The Company shall not be required to make, and the Registrar need
not register, transfers or exchanges of any Securities in respect of which
a Repurchase Notice or Fundamental Change Repurchase Notice has been given
and not withdrawn by the Holder thereof in accordance with the terms of
this Indenture.
(b) Notwithstanding any provision to the contrary herein, so long as
a Global Security remains outstanding and is held by or on behalf of the
Depositary, transfers of a Global Security, in whole or in part, shall be
made only in accordance with Section 2.12 and this Section 2.6(b).
Transfers of a Global Security shall be limited to transfers of such
Global Security in whole or in part, to the Depositary, to nominees of the
Depositary or to a successor of the Depositary or such successor's
nominee.
(c) Successive registrations and registrations of transfers and
exchanges as aforesaid may be made from time to time as desired, and each
such registration shall be noted on the register for the Securities.
(d) Any Registrar appointed pursuant to Section 2.3 hereof shall
provide to the Trustee such information as the Trustee may reasonably
require in connection with the delivery by such Registrar of Securities
upon transfer or exchange of Securities.
14
(e) No Registrar shall be required to make registrations of transfer
or exchange of Securities during any periods designated in the text of the
Securities or in this Indenture as periods during which such registration
of transfers and exchanges need not be made.
(f) If Securities are issued upon the registration of transfer,
exchange or replacement of Securities subject to restrictions on transfer
and bearing the legends set forth on the forms of Securities attached
hereto as Exhibits A and B setting forth such restrictions (collectively,
the "Legend"), or if a request is made to ------ remove the Legend on a
Security, the Securities so issued shall bear the Legend, or the Legend
shall not be removed, as the case may be, unless there is delivered to the
Company and the Registrar such satisfactory evidence, which shall include
an Opinion of Counsel, as may be reasonably required by the Company and
the Registrar, that neither the Legend nor the restrictions on transfer
set forth therein are required to ensure that transfers thereof comply
with the provisions of Rule 144A or Rule 144 or that such Securities are
not "restricted" within the meaning of Rule 144. Upon (i) provision of
such satisfactory evidence or (ii) notification by the Company to the
Trustee and Registrar of the sale of such Security pursuant to a
registration statement that is effective at the time of such sale, the
Trustee, upon receipt of a Company Order, shall authenticate and deliver a
Security that does not bear the Legend. If the Legend is removed from the
face of a Security and the Security is subsequently held by an Affiliate
of the Company, the Company shall use its reasonable best efforts to
reinstate the Legend.
The Trustee and the Registrar shall have no obligation or duty to
monitor, determine or inquire as to compliance with any restrictions on
transfer imposed under this Indenture or under applicable law with respect
to any transfer of any interest in any Security (including any transfers
between or among Depositary participants or beneficial owners of interests
in any Global Security) other than to require delivery of such
certificates and other documentation or evidence as are expressly required
by, and to do so if and when expressly required by the terms of, this
Indenture, and to examine the same to determine substantial compliance as
to form with the express requirements hereof.
(g) Notwithstanding the provisions of Section 2.6(a) above or
Section 2.12(b) and (c) below, a pledge or other hypothecation of any
Security to a bank or other financial institution that is either an
accredited investor or a QIB, in connection with any bona fide margin
agreement or other loan or financing arrangement shall not be deemed to
constitute a "transfer" for purposes of this Indenture. Any foreclosure or
other disposition of any Securities so pledged or otherwise hypothecated
by such bank or other financial institution shall constitute a "transfer"
for all purposes hereunder and shall be made only in accordance with the
applicable provisions hereof.
Section 2.7 Replacement Securities. If (a) any mutilated Security is
surrendered to the Trustee, or (b) the Company and the Trustee receive evidence
to their satisfaction of the destruction, loss or theft of any Security, and
there is delivered to the Company and the Trustee such security or indemnity as
may be required by them to save each of them harmless, then, in the absence of
notice to the Company or the Trustee that such Security has been acquired by a
bona fide purchaser, the Company shall execute and upon its written request the
Trustee shall
15
authenticate and deliver, in exchange for any such mutilated Security or in lieu
of any such destroyed, lost or stolen Security, a new Security of like tenor and
principal amount and series, bearing a certificate number not contemporaneously
outstanding.
In case any such mutilated, destroyed, lost or stolen Security has become
or is about to become due and payable, or is about to be purchased by the
Company pursuant to Article III hereof, the Company in its discretion may,
instead of issuing a new Security, pay or purchase such Security, as the case
may be.
Upon the issuance of any new Securities under this Section 2.7, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security issued pursuant to this Section 2.7 in lieu of any
mutilated, destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Company, whether or not the destroyed,
lost or stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all benefits of this Indenture equally and proportionately with any
and all other Securities duly issued hereunder.
The provisions of this Section 2.7 are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities.
Section 2.8 Outstanding Securities; Determination of Holder's Action.
Securities outstanding at any time are all the Securities authenticated by the
Trustee except for those cancelled by it, those paid pursuant to Section 2.7,
those delivered to it for cancellation and those described in this Section 2.8
as not outstanding. A Security does not cease to be outstanding because the
Company or an Affiliate thereof holds the Security; provided, however, that in
determining whether the Holders of the requisite principal amount of Securities
have given or concurred in any request, demand, authorization, direction,
notice, consent, waiver, or other Act 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 to be outstanding, except
that, in determining whether the Trustee shall be protected in relying upon any
such request, demand, authorization, direction, notice, consent, waiver or other
Act, only Securities which a Responsible Officer knows are so owned shall be so
disregarded. Subject to the foregoing, only Securities outstanding at the time
of such determination shall be considered in any such determination (including,
without limitation, determinations pursuant to Article VIII and Article XI).
If a Security is replaced pursuant to Section 2.7, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Security is held by a bona fide purchaser.
If the Paying Agent holds, in accordance with this Indenture, on the
Business Day following a Repurchase Date or Fundamental Change Repurchase Date,
or on Stated Maturity, money sufficient to pay Securities payable on that date,
then immediately after such Xxxxxxxxxx
00
Xxxx, Xxxxxxxxxxx Xxxxxx Xxxxxxxxxx Date or Stated Maturity, as the case may be,
such Securities shall cease to be outstanding and interest and Liquidated
Damages, if any, on such Securities shall cease to accrue.
If a Security is converted in accordance with Article XIII, then from and
after the time of conversion on the date of conversion, such Security shall
cease to be outstanding and interest, and Liquidated Damages, if any, shall
cease to accrue on such Security.
Section 2.9 Temporary Securities. Pending the preparation of definitive
Securities, the Company may execute, and upon Company Order the Trustee shall
authenticate and deliver, temporary Securities that are printed, lithographed,
typewritten, mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Securities in lieu of which they
are issued and with such appropriate insertions, omissions, substitutions and
other variations as the officers executing such Securities may determine, as
conclusively evidenced by their execution of such Securities.
If temporary Securities are issued, the Company will cause definitive
Securities to be prepared without unreasonable delay. After the preparation of
definitive Securities, the temporary Securities shall be exchangeable for
definitive Securities upon surrender of the temporary Securities at the office
or agency of the Company designated for such purpose pursuant to Section 2.3,
without charge to the Holder. Upon surrender for cancellation of any one or more
temporary Securities, the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor a like principal amount of
definitive Securities of authorized denominations. Until so exchanged the
temporary Securities shall in all respects be entitled to the same benefits
under this Indenture as definitive Securities.
Section 2.10 Cancellation. All Securities surrendered for payment,
purchased by the Company pursuant to Article III, conversion or registration of
transfer or exchange shall, if surrendered to any Person other than the Trustee,
be delivered to the Trustee and shall be promptly cancelled by it. The Company
may at any time deliver to the Trustee for cancellation any Securities
previously authenticated and delivered hereunder that the Company may have
acquired in any manner whatsoever, and all Securities so delivered shall be
promptly cancelled by the Trustee. The Company may not issue new Securities to
replace Securities it has repurchased, paid for or delivered to the Trustee for
cancellation, or that any Holder has converted pursuant to Article XIII. No
Securities shall be authenticated in lieu of or in exchange for any Securities
cancelled as provided in this Section 2.10, except as expressly permitted by
this Indenture. All cancelled Securities held by the Trustee shall be disposed
of by the Trustee in accordance with the Trustee's customary procedure.
Section 2.11 Persons Deemed Owners. Prior to due presentment of a Security
for registration of transfer, the Company, the Trustee and any agent of the
Company or the Trustee may deem and treat the Person in whose name such Security
is registered as the owner of such Security for the purpose of receiving payment
of principal of the Security or the payment of any Repurchase Price or
Fundamental Change Repurchase Price in respect thereof, and interest thereon,
for the purpose of conversion and for all other purposes whatsoever, whether or
not such Security be overdue, and neither the Company, the Trustee nor any agent
of the Company or the Trustee shall be affected by notice to the contrary.
17
Section 2.12 Special Transfer Provisions.
(a) Notwithstanding any other provisions of this Indenture or the
Securities, (A) transfers of a Global Security, in whole or in part, shall
be made only in accordance with Section 2.6 and Section 2.12(a)(i) below,
(B) transfers of a beneficial interest in a Global Security in exchange
for a Certificated Security shall comply with Section 2.6, Section
2.12(a)(ii) below and Section 2.12(e)(i) below, and (C) transfers of a
Certificated Security shall comply with Section 2.6 and Section
2.12(a)(iii) and (iv) below.
(i) Transfer of Global Security. A Global Security may not be
transferred, in whole or in part, to any Person other than the
Depositary or a nominee or any successor thereof, and no such
transfer to any such other Person may be registered; provided,
however, that this clause (i) shall not prohibit any transfer of a
Security that is issued in exchange for a Global Security but is not
itself a Global Security. No transfer of a Security to any Person
shall be effective under this Indenture or the Securities unless and
until such Security has been registered in the name of such Person.
Nothing in this Section 2.12(a)(i) shall prohibit or render
ineffective any transfer of a beneficial interest in a Global
Security effected in accordance with the other provisions of this
Section 2.12(a).
(ii) Restrictions on Transfer of a Beneficial Interest in a
Global Security in Exchange for a Certificated Security. A
beneficial interest in a Global Security may not be exchanged for a
Certificated Security except upon satisfaction of the requirements
set forth below and in Section 2.12(e)(i) below. Upon receipt by the
Trustee of a transfer of a beneficial interest in a Global Security
in accordance with Applicable Procedures for a Certificated Security
in the form satisfactory to the Trustee, together with:
(A) so long as the Securities are Restricted Securities,
certification in the form set forth in Exhibit C;
(B) written instructions to the Trustee to make, or
direct the Registrar to make, an adjustment on its books and
records with respect to such Global Security to reflect a
decrease in the aggregate principal amount of the Securities
represented by the Global Security, such instructions to
contain information regarding the Depositary account to be
credited with such decrease; and
(C) if the Company so reasonably requests, an opinion of
counsel or other evidence reasonably satisfactory to it as to
the compliance with the restrictions set forth in the Legend,
then the Trustee shall cause, or direct the Registrar to cause, in
accordance with the standing instructions and procedures existing
between the Depositary and the Registrar, the aggregate principal
amount of the Securities represented by the Global Security to be
decreased by the aggregate principal amount of the Certificated
Security to be issued, shall issue such Certificated Security and
shall
18
debit or cause to be debited to the account of the Person specified
in such instructions a beneficial interest in the Global Security
equal to the principal amount of the Certificated Security so
issued.
(iii) Transfer and Exchange of Certificated Securities. When
Certificated Securities are presented to the Registrar with a
request:
(y) to register the transfer of such Certificated
Securities; or
(z) to exchange such Certificated Securities for an
equal principal amount of Certificated Securities of other
authorized denominations,
the Registrar shall register the transfer or make the exchange as
requested if its reasonable requirements for such transaction are
met; provided, however, that the Certificated Securities surrendered
for transfer or exchange:
(A) shall be duly endorsed or accompanied by a written
instrument of transfer in form reasonably satisfactory to the
Company and the Registrar, duly executed by the Holder thereof
or his attorney duly authorized in writing; and
(B) so long as such Securities are Restricted
Securities, such Securities are being transferred or exchanged
pursuant to an effective registration statement under the
Securities Act or pursuant to clause (1), (2) or (3) below,
and are accompanied by the following additional information
and documents, as applicable:
(1) if such Certificated Securities are being
delivered to the Registrar by a Holder for registration
in the name of such Holder, without transfer, a
certification from such Holder to that effect; or
(2) if such Certificated Securities are being
transferred to the Company, a certification to that
effect; or
(3) if such Certificated Securities are being
transferred pursuant to an exemption from registration,
(i) a certification to that effect (in the form set
forth in Exhibit C, if applicable) and (ii) if the
Company so requests, an opinion of counsel or other
evidence reasonably satisfactory to it as to the
compliance with the restrictions set forth in the
Legend.
(iv) Restrictions on Transfer of a Certificated Security for a
Beneficial Interest in a Global Security. A Certificated Security
may not be exchanged for a beneficial interest in a Global Security
except upon satisfaction of the requirements set forth below.
19
Upon receipt by the Trustee of a Certificated Security, duly
endorsed or accompanied by appropriate instruments of transfer, in form
satisfactory to the Trustee, together with:
(A) so long as the Securities are Restricted Securities,
certification, in the form set forth in Exhibit E, that either
(x) the Holder of such Certificated Security is a QIB and is
exchanging its Certificated Security for an interest in the
Global Security pursuant to Section 2.1 or (y) the Securities
represented by such Certificated Security are being
transferred in compliance with Rule 144A; and
(B) written instructions directing the Trustee to make,
or to direct the Registrar to make, an adjustment on its books
and records with respect to such Global Security to reflect an
increase in the aggregate principal amount of the Securities
represented by the Global Security, such instructions to
contain information regarding the Depositary account to be
credited with such increase, then the Trustee shall cancel
such Certificated Security and cause, or direct the Registrar
to cause, in accordance with the standing instructions and
procedures existing between the Depositary and the Registrar,
the aggregate principal amount of Securities represented by
the Global Security to be increased by the aggregate principal
amount of the Certificated Security to be exchanged, and shall
credit or cause to be credited to the account of the Person
specified in such instructions a beneficial interest in the
Global Security equal to the principal amount of the
Certificated Security so cancelled. If no Global Securities
are then outstanding, the Company shall issue and the Trustee
shall authenticate, upon written order of the Company in the
form of an Officers' Certificate, a new Global Security in the
appropriate principal amount.
(b) Subject to the succeeding Section 2.12(c), every Security shall
be subject to the restrictions on transfer provided in the Legend
including the delivery of an opinion of counsel, if so provided. Whenever
any Restricted Security is presented or surrendered for registration of
transfer or for exchange for a Security registered in a name other than
that of the Holder, such Security must be accompanied by a certificate in
substantially the form set forth in Exhibit C, dated the date of such
surrender and signed by the Holder of such Security, as to compliance with
such restrictions on transfer. The Registrar shall not be required to
accept for such registration of transfer or exchange any Security not so
accompanied by a properly completed certificate.
(c) The restrictions imposed by the Legend upon the transferability
of any Security shall cease and terminate when such Security has been sold
pursuant to an effective registration statement under the Securities Act
or transferred in compliance with Rule 144 or, if earlier, upon the
expiration of the holding period applicable to sales thereof under Rule
144(k). Any Security as to which such restrictions on transfer shall have
expired in accordance with their terms or shall have terminated may, upon
a surrender of such Security for exchange to the Registrar in accordance
with the
20
provisions of this Section 2.12 (accompanied, in the event that such
restrictions on transfer have terminated by reason of a transfer in
compliance with Rule 144, by an opinion of counsel having substantial
experience in practice under the Securities Act and otherwise reasonably
acceptable to the Company, addressed to the Company and in form reasonably
acceptable to the Company, to the effect that the transfer of such
Security has been made in compliance with Rule 144), be exchanged for a
new Security, of like tenor and aggregate principal amount, which shall
not bear the restrictive Legend. The Company shall inform the Trustee of
the effective date of any registration statement registering the
Securities under the Securities Act. The Trustee shall not be liable for
any action taken or omitted to be taken by it in good faith in accordance
with the aforementioned opinion of counsel or registration statement.
(d) As used in the preceding two paragraphs of this Section 2.12,
the term "transfer" encompasses any sale, transfer, loan or other
disposition of any Security; but subject to the provisions of Section
2.6(g) above.
(e) The provisions of this paragraph (e) shall apply only to Global
Securities:
(i) Notwithstanding any other provisions of this Indenture or
the Securities, a Global Security shall not be exchanged in whole or
in part for a Security registered in the name of any Person other
than the Depositary or one or more nominees thereof, provided,
however, that a Global Security may be exchanged for Securities
registered in the names of any Person designated by the Depositary
in the event that (x) the Depositary has notified the Company that
it is unwilling or unable to continue as Depositary for such Global
Security or such Depositary has ceased to be a "clearing agency"
registered under the Exchange Act, and a successor Depositary is not
appointed by the Company within 90 days or (y) an Event of Default
has occurred and is continuing with respect to the Securities. Any
Global Security exchanged pursuant to clause (x) above shall be so
exchanged in whole and not in part, and any Global Security
exchanged pursuant to clause (y) above may be exchanged in whole or
from time to time in part as directed by the Depositary. Any
Security issued in exchange for a Global Security or any portion
thereof shall be a Global Security; provided, however, that any such
Security so issued that is registered in the name of a Person other
than the Depositary or a nominee thereof shall not be a Global
Security.
(ii) Securities issued in exchange for a Global Security or
any portion thereof shall be issued in definitive, fully registered
form, without interest coupons, shall have an aggregate principal
amount equal to that of such Global Security or portion thereof to
be so exchanged, shall be registered in such names and be in such
authorized denominations as the Depositary shall designate and shall
bear the applicable legends provided for herein. Any Global Security
to be exchanged in whole shall be surrendered by the Depositary to
the Trustee, as Registrar. With regard to any Global Security to be
exchanged in part, either such Global Security shall be so
surrendered for exchange or, if the Trustee is acting as custodian
for the Depositary or its nominee with respect to such Global
Security, the principal amount thereof shall be reduced, by an
amount equal to the portion
21
thereof to be so exchanged, by means of an appropriate adjustment
made on the records of the Trustee. Upon any such surrender or
adjustment, the Trustee shall authenticate and deliver the Security
issuable on such exchange to or upon the order of the Depositary or
an authorized representative thereof.
(iii) Subject to the provisions of clause (v) below, the
registered Holder may grant proxies and otherwise authorize any
Person, including Agent Members (as defined below) and Persons that
may hold interests through Agent Members, to take any action which a
Holder is entitled to take under this Indenture or the Securities.
(iv) In the event of the occurrence of any of the events
specified in clause (i) above, the Company will promptly make
available to the Trustee a reasonable supply of Certificated
Securities in definitive, fully registered form, without interest
coupons.
(v) Neither any members of, or participants in, the Depositary
(collectively, the "Agent Members") nor any other Persons on whose
behalf Agent Members may act shall have any rights under this
Indenture with respect to any Global Security registered in the name
of the Depositary or any nominee thereof, or under any such Global
Security, and the Depositary or such nominee, as the case may be,
may be treated by the Company, the Trustee and any agent of the
Company or the Trustee as the absolute owner and Holder of such
Global Security for all purposes whatsoever. Notwithstanding the
foregoing, nothing herein shall prevent the Company, the Trustee or
any agent of the Company or the Trustee from giving effect to any
written certification, proxy or other authorization furnished by the
Depositary or such nominee, as the case may be, or impair, as
between the Depositary, its Agent Members and any other Person on
whose behalf an Agent Member may act, the operation of customary
practices of such Persons governing the exercise of the rights of a
Holder of any Security.
Section 2.13 CUSIP Numbers. The Company in issuing the Securities may use
"CUSIP" numbers (if then generally in use), and, if so, the Trustee shall use
"CUSIP" numbers in notices of redemption as a convenience to Holders; provided,
however, that any such notice may state that no representation is made as to the
correctness of such numbers either as printed on the Securities or as contained
in any notice of a redemption and that reliance may be placed only on the other
identification numbers printed on the Securities, and any such redemption shall
not be affected by any defect in or omission of such numbers. The Company will
promptly notify the Trustee of any change in the CUSIP numbers.
Section 2.14 Re-Issuance as Same Series. In the event the Company shall
issue new Securities or replacement Securities in connection with any exchange,
transfer or other re-issuance, the newly issued Securities shall be of the same
series as the Securities surrendered in such transfer, exchange or other
re-issuance.
22
Section 2.15 Issuance of Additional Securities. The Company will be
entitled to issue Securities under this Indenture in an aggregate principal
amount of $36 million on the Closing Date and up to an additional aggregate
principal amount not to exceed $14 million to the initial purchasers of the
Securities on such date (the "Initial Purchasers"), or a later date, pursuant to
the terms of the Purchase Agreement. Other than as set forth in the preceding
sentence, the Company shall not issue any Securities under this Indenture.
ARTICLE III
REPURCHASE OF SECURITIES
Section 3.1 Purchase of Securities at Option of the Holder. Each Holder
shall have the right, at the Holder's option, to require the Company to
repurchase, and upon the exercise of such right the Company shall repurchase,
all of such Holder's Securities not theretofore called for redemption, or any
portion of the principal amount thereof that is equal to $1,000 or any integral
multiple of $1,000 in excess thereof on November 1, 2008 (the "Repurchase
Date"), provided that no single Security may be repurchased in part unless the
portion of the principal amount of such Security to be outstanding after such
repurchase is equal to $1,000 or an integral multiple of U.S. $1,000 in excess
thereof), at a repurchase price equal to 100% of the principal amount of the
Securities to be repurchased plus interest (and Liquidated Damages, if any)
accrued but unpaid to, but excluding, the Repurchase Date (the "Repurchase
Price"). At the option of the Company, the Repurchase Price may be paid in cash,
or subject to the fulfillment by the Company of the conditions set forth in
Section 3.3 and subject to the Share Limitation, by delivery of shares of Common
Stock or a combination of cash and Common Stock. Each Holder whose Securities
are repurchased pursuant to this Section 3.1 shall receive the same
percentage(s) of cash and/or shares of Common Stock in payment of the Repurchase
Price for such Securities, except with regard to the payment of cash in lieu of
fractional shares of Common Stock. The number of shares of Common Stock to be
delivered shall equal such number of shares of Common Stock as have a fair
market value (as determined under Section 3.3 hereof) equal to the percentage of
the Repurchase Price to be paid in shares of Common Stock as set forth in the
applicable Company Notice. At any time prior to the delivery of the applicable
Company Notice, the Company may unilaterally irrevocably waive its right under
this Section 3.1 to pay all or any portion of the Repurchase Price in shares of
Common Stock by providing written notice of such waiver to the Trustee and the
Holders.
Section 3.2 Purchase of Securities at Option of the Holder upon a
Fundamental Change. In the event that a Fundamental Change shall occur, then
each Holder shall have the right, at the Holder's option, to require the Company
to repurchase, and upon the exercise of such right the Company shall repurchase,
all of such Holder's Securities not theretofore called for redemption, or any
portion of the principal amount thereof that is equal to $1,000 or any integral
multiple of $1,000 in excess thereof (provided, however, that no single Security
may be repurchased in part unless the portion of the principal amount of such
Security to be outstanding after such repurchase is equal to $1,000 or an
integral multiple of $1,000 in excess thereof), on the date (the "Fundamental
Change Repurchase Date") that is (i) in the event of a Fundamental Change
arising from a Change of Control, on the first Business Day after expiration of
the Fundamental Change Conversion Period and (ii) otherwise on the 35th Business
Day after a Termination of Trading, at a repurchase price equal to 100% of the
principal amount of the
23
Securities to be repurchased plus interest (and Liquidated Damages, if any)
accrued but unpaid to, but excluding, the Fundamental Change Repurchase Date
(the "Fundamental Change Repurchase Price"). Such right to require the
repurchase of the Securities shall not continue after a discharge of the Company
from its obligations with respect to the Securities in accordance with Article
X, unless a Fundamental Change shall have occurred prior to such discharge. The
Fundamental Change Repurchase Price shall be paid in cash; provided, that the
Company shall have the option to pay the Fundamental Change Repurchase Price,
subject to the fulfillment by the Company of the conditions set forth in Section
3.3 and subject to the Share Limitation, by delivery of shares of Common Stock
or a combination of cash and Common Stock. Each Holder whose Securities are
repurchased pursuant to this Section 3.2 shall receive the same percentage(s) of
cash and/or shares of Common Stock in payment of the Fundamental Change
Repurchase Price for such Securities, except with regard to the payment of cash
in lieu of fractional shares of Common Stock. The number of shares of Common
Stock to be delivered shall equal such number of shares of Common Stock as have
a fair market value (as determined under Section 3.3 hereof) equal to the
percentage of the Fundamental Change Repurchase Price to be paid in shares of
Common Stock as set forth in the applicable Company Notice. At any time prior to
the delivery of the applicable Company Notice, the Company may unilaterally
irrevocably waive its right under this Section 3.2 to pay all or any portion of
the Fundamental Change Repurchase Price in shares of Common Stock by providing
written notice of such waiver to the Trustee and the Holders.
Section 3.3 Conditions to the Company's Election to Pay the Repurchase
Price or the Fundamental Change Repurchase Price in Common Stock. The Company
may elect to pay all or any portion of the Repurchase Price or the Fundamental
Change Repurchase Price, as the case may be, in shares of Common Stock if and
only if the following conditions shall have been satisfied (or waived by the
applicable Holder):
(a) The shares of Common Stock deliverable in payment of the
Repurchase Price, or the Fundamental Change Repurchase Price, as the case
may be, shall not exceed the amount calculated pursuant to the provisions
of Section 3.3(f) below. For purposes of this Article III only, the "fair
market value" of shares of Common Stock means the product of (i) 0.97
times (ii) the arithmetic average of the Closing Prices per share of the
Common Stock for the fifteen (15) consecutive Trading Days immediately
preceding and including the third Trading Day prior to the Repurchase Date
or the Fundamental Change Repurchase Date, as the case may be,
appropriately adjusted to take into account the occurrence, during such
fifteen (15) Trading Day period, of any event described in Section 13.3;
(b) The Repurchase Price or the Fundamental Change Repurchase Price,
as the case may be, shall be paid only in cash (1) in the event of a
Termination of Trading or (2) in the event that any shares of Common Stock
to be issued upon repurchase of Securities hereunder (i) require
registration or approval under any federal securities law before such
shares may be freely transferable without being subject to any transfer
restrictions under the Securities Act upon repurchase and if such
registration is not completed or does not become effective prior to the
delivery of the Company Notice and such completion and effectiveness is
not maintained from after delivery of such Company Notice to the
Repurchase Date or the Fundamental Change Repurchase Date, as the case may
be, or (ii)
24
require registration or qualification under any state securities law
before such shares may be validly issued or delivered upon repurchase and
if such registration or qualification is not completed or does not become
effective prior to the delivery of the applicable Company Notice and such
completion and effectiveness is not maintained from after delivery of such
Company Notice to the Repurchase Date or the Fundamental Change Repurchase
Date, as the case may be, or (iii) violates any Federal or state
securities laws;
(c) The shares of Common Stock to be issued in respect of the
Repurchase Price or the Fundamental Change Repurchase Price, as the case
may be, is, or shall have been, listed or approved for listing on the
NYSE, the AMEX, the NASDAQ National Market or the NASDAQ SmallCap Market,
in either case, prior to the delivery of the applicable Company Notice;
(d) The Company shall have sufficient authorized but unissued (or
issued but not outstanding) shares of Common Stock (or, in the event of a
merger, consolidation or other similar transaction involving the Company
that is otherwise permitted under the terms of this Indenture in which the
Company is not the surviving entity, out of the authorized but unissued
Common Stock of the surviving entity or its direct or indirect parent
entity) to issue the shares of Common Stock to be issued upon repurchase
of the Securities on the Repurchase Date or the Fundamental Change
Repurchase Date, as the case may be, and, such Common Stock will upon
issue, be duly and validly issued and fully paid and nonassessable and
free of any preemptive rights;
(e) The Company has timely given a Company Notice containing all the
information required under Section 3.4 and such Company Notice shall set
forth the percentage of the Repurchase Price or the Fundamental Change
Repurchase Price, as the case may be, that will be paid in shares of
Common Stock;
(f) The total principal amount to be paid in shares of Common Stock
shall not exceed 20% of the product of (x) the total daily trading volume
of the Common Stock as reported by Bloomberg through its "HP" function
during the ten Trading Days immediately preceding the date of delivery of
the Company Notice and (y) the arithmetic average of the Weighted Average
Price per share of Common Stock on each of such ten Trading Days as
reported by Bloomberg through its "HP" function; and
(g) The Trustee shall receive at the time of delivery of the
applicable Company Notice and just prior to the Repurchase Date or the
Fundamental Change Repurchase Date, as the case may be, (i) an Officer's
Certificate stating that the terms of the issuance of the shares of Common
Stock are in conformity with this Indenture, (ii) an Opinion of Counsel to
the effect that the shares of Common Stock to be issued by the Company in
respect of the Repurchase Price or the Fundamental Change Repurchase
Price, as the case may be, have been duly authorized and, when issued and
delivered pursuant to the terms of this Indenture, will be validly issued,
fully paid and non-assessable and (iii) an Officer's Certificate stating
that the conditions to the issuance of the shares of Common Stock have
been satisfied.
25
Promptly after determination of the actual number of shares of Common Stock to
be issued upon repurchase of Securities, the Company shall disseminate a press
release through Dow Xxxxx & Company, Inc. or Bloomberg Business News containing
this information or publish the information on the Company's web site or through
such other public medium as the Company may use at that time.
Section 3.4 Notices; Method of Exercising Repurchase Right, Etc.
(a) Unless the Company shall have theretofore called for redemption
all of the outstanding Securities, the Company shall give to the Trustee,
the Paying Agent and all Holders of Securities, in the manner provided in
this Section 3.4, a notice containing the information required pursuant to
the following provisions of this Section 3.4(a) (the "Company Notice") (i)
on or before the 20th Business Day prior to the Repurchase Date or, in the
event of a Fundamental Change arising from a Change of Control, the
anticipated Effective Date (but in no event earlier than 45 days prior to
the Repurchase Date or anticipated Effective Date, as the case may be),
and (ii) within 15 Business Days after the Company knows or reasonably
should know of the occurrence of a Fundamental Change that arises as a
result of any Termination of Trading. Prior to or concurrently with the
delivery of any Company Notice, the Company will issue a press release or
publish such information on the Company's then existing website including
the information required to be included in such Company Notice hereunder.
The Company shall also deliver a copy of any Company Notice to the
Trustee. At the request and expense of the Company on or before the fifth
Business Day prior to the date on which the Company Notice is to be
mailed, the Trustee shall provide the Company Notice to the Holders in
accordance with the provisions of this Indenture.
Each Company Notice shall state:
(i) the Repurchase Date or the Fundamental Change Repurchase
Date, as the case may be,
(ii) the date by which the repurchase right must be exercised,
(iii) the Repurchase Price or the Fundamental Change
Repurchase Price, as the case may be, and whether the Repurchase
Price or the Fundamental Change Repurchase Price, as the case may
be, shall be paid by the Company in cash or by delivery of shares of
Common Stock, or a specified combination thereof and the percentage
of the Repurchase Price or the Fundamental Change Repurchase Price,
as the case may be, that will be paid in shares of Common Stock
(which indication shall be irrevocable, subject to the satisfaction
(or waiver) of the conditions set forth in Section 3.3),
(iv) if the notice relates to the occurrence of a Fundamental
Change, the events causing the Fundamental Change and the date of
the Fundamental Change,
(v) that Securities with respect to which a Holder gives a
Repurchase Notice or Fundamental Change Repurchase Notice may be
converted only if the
26
Holder withdraws the Repurchase Notice or Fundamental Change
Repurchase Notice as to such Securities in accordance with the terms
of this Indenture,
(vi) a description of the procedure that a Holder must follow
to exercise a repurchase right, and the place or places where such
Securities are to be surrendered for payment of the Repurchase Price
or the Fundamental Change Repurchase Price, as the case may be, and
accrued but unpaid interest (and Liquidated Damages), if any, to,
but excluding, the Repurchase Date or the Fundamental Change
Repurchase Date, as the case may be,
(vii) that on the Repurchase Date or the Fundamental Change
Repurchase Date, as the case may be, the Repurchase Price or the
Fundamental Change Repurchase Price, as the case may be, and accrued
but unpaid interest (and Liquidated Damages), if any, to, but
excluding, the Repurchase Date or the Fundamental Change Repurchase
Date, as the case may be, will become due and payable upon each such
Security designated by the Holder to be repurchased, and that
interest thereon shall cease to accrue on and after said date,
(viii) the Conversion Price then in effect,
(ix) the place or places that the Security certificate
(including the Election of Holder to Require Repurchase attached
thereto) and the Repurchase Notice (as defined below) shall be
delivered, and, if the Security is a Restricted Security, the place
or places that the Transfer Certificate in the form set forth in
Exhibit C, required by Section 2.12 shall be delivered,
(x) the name and address of the Paying Agent and Conversion
Agent, and
(xi) if the notice relates to a Fundamental Change, the
estimated amount of any Make-Whole Premium and the respective
percentages of such Make-Whole Premium that will be paid (as
contemplated by Section 6.1(b)) in shares of Common Stock and in
cash (which indication shall be irrevocable), subject to the
satisfaction (or waiver) of the conditions set forth in Section
6.1(c), in the event that a Holder should, in lieu of electing to
have Securities repurchased on the Fundamental Change Repurchase
Date, elect to convert such Securities during the Fundamental Change
Conversion Period, and
(xii) any other information to be included therein pursuant to
Section 6.1.
No failure of the Company to give the foregoing notices or defect therein
shall limit any Holder's right to exercise a repurchase right or affect
the validity of the proceedings for the repurchase of Securities.
If any of the foregoing provisions or other provisions of this Article III
are inconsistent with applicable law, such law shall govern.
27
(b) To exercise a repurchase right pursuant to Section 3.1 or
Section 3.2, a Holder shall deliver to the Paying Agent (i) written notice
(in the case of a repurchase pursuant to Section 3.1, a "Repurchase
Notice" and, in the case of a repurchase pursuant to Section 3.2, a
"Fundamental Change Repurchase Notice") of the Holder's exercise of such
right, which notice shall set forth the name of the Holder, the principal
amount of the Securities to be repurchased (and, if any Security is to
repurchased in part, the portion of the principal amount thereof to be
repurchased (which portion must be in principal amounts of $1,000 or a
whole multiple of $1,000) and the name of the Person in which the portion
thereof to remain outstanding after such repurchase is to be registered),
if certificated, the certificate numbers of the Securities to be
repurchased, and a statement that an election to exercise the repurchase
right pursuant to the terms and conditions specified in the Securities and
the Indenture is being made thereby, and, in the event that any portion of
the Repurchase Price or the Fundamental Change Repurchase Price, as the
case may be, shall be paid in shares of Common Stock, the name or names
(with addresses) in which the certificate or certificates for shares of
Common Stock shall be issued, and (ii) the Securities to which the
Repurchase Notice or Fundamental Change Repurchase Notice relates at any
time after delivery of the Repurchase Notice or the Fundamental Change
Repurchase Notice, as the case may be (together with all necessary
endorsements), at the offices of the Paying Agent, such delivery being a
condition to receipt by the Holder of the Repurchase Price or the
Fundamental Change Repurchase Price, as the case may be, thereof;
provided, however, that such Repurchase Price or Fundamental Change
Repurchase Price, as the case may be, shall be so paid pursuant to this
Section 3.4(b) only if the Securities so delivered to the Paying Agent
shall conform in all respects to the description thereof in the related
Repurchase Notice or Fundamental Change Repurchase Notice. In the case of
a repurchase right pursuant to Section 3.1 and Section 3.2, such delivery
shall be at any time from the opening of business on the date that is 20
Business Days prior to the Repurchase Date until the close of business on
the second Business Day prior to the Repurchase Date or the Fundamental
Change Repurchase Date, as the case may be, subject to extension to comply
with applicable law. Owners of beneficial interests in Global Securities
shall provide a Repurchase Notice or Fundamental Change Repurchase Notice
in accordance with the Applicable Procedures of the Depositary.
A Repurchase Notice or Fundamental Change Repurchase Notice given by a
Holder in accordance with this Section 3.4(b) may be withdrawn, in whole
or in part, by means of a written notice of withdrawal delivered to the
office of the Paying Agent at any time prior to the close of business on
the day that is one Business Day before the Repurchase Date or Fundamental
Change Repurchase Date, as the case may be, specifying:
(i) the certificate number, if any, of the Security in respect
of which such notice of withdrawal is being submitted, or the
appropriate Depositary procedures if Certificated Securities have
not been issued,
(ii) the principal amount of the Security with respect to
which such notice of withdrawal is being submitted, and
28
(iii) the principal amount, if any, of such Security which
remains subject to the original Repurchase Notice and which has been
or will be delivered for purchase by the Company.
The Company may, in its sole and complete discretion, accept a written
notice of withdrawal on or after the close of business on the day that is
one Business Day prior to the Repurchase Date or the Fundamental Change
Repurchase Date, as the case may be. The decision of the Company to accept
or reject such a withdrawal notice shall be conclusive and binding on the
Holder proposing to make the withdrawal.
(c) There shall be no purchase of any Securities pursuant to this
Article III if an Event of Default has occurred and is continuing (other
than a default that is cured by the payment of the Repurchase Price or
Fundamental Change Repurchase Price, as the case may be). The Paying Agent
shall promptly return to the respective Holders thereof any Securities (i)
with respect to which a Repurchase Notice or Fundamental Change Repurchase
Notice, as the case may be, has been withdrawn in compliance with this
Indenture or (ii) held by it during the continuance of an Event of Default
(other than a default that is cured by the payment of the Repurchase Price
or the Fundamental Change Repurchase Price, as the case may be) in which
case, upon such return, the Repurchase Notice or the Fundamental Change
Repurchase Notice with respect thereto shall be deemed to have been
withdrawn.
(d) In the event a repurchase right shall be exercised in accordance
with the terms hereof, the Company shall pay or cause to be paid to the
Trustee the Repurchase Price or the Fundamental Change Repurchase Price,
as the case may be, in cash and/or shares of Common Stock, subject to and
as provided in Section 3.3 and subject to the Share Limitation, for
payment to the Holder on the Repurchase Date or the Fundamental Change
Repurchase Date, as the case may be, together with accrued and unpaid
interest to, but excluding, the Repurchase Date or the Fundamental Change
Repurchase Date, as the case may be, payable with respect to the
Securities as to which the repurchase right has been exercised.
(e) If any Security (or portion thereof) surrendered for repurchase
shall not be so paid on the Repurchase Date or the Fundamental Change
Repurchase Date, as the case may be, the Repurchase Price or the
Fundamental Change Repurchase Price, as the case may be with respect to
such Security shall, until so repurchased, bear interest to the extent
permitted by applicable law from the Repurchase Date or the Fundamental
Change Repurchase Date, as the case may be, at a rate equal to the
Interest Rate on the Security plus 1% per annum, and such Security shall
remain convertible into Common Stock until the Repurchase Price or the
Fundamental Change Repurchase Price, as the case may be, plus any default
interest accrued under this Section 3.4(e), shall have been paid or duly
provided for.
(f) Any Security that is to be repurchased only in part shall be
surrendered to the Trustee (with, if the Company or the Trustee so
requires, due endorsement by, or a written instrument of transfer in form
satisfactory to the Company and the Trustee duly executed by, the Holder
thereof or his attorney duly authorized in writing), and the
29
Company shall execute, and the Trustee shall authenticate and make
available for delivery to the Holder of such Security without service
charge, a new Security or Securities, containing identical terms and
conditions, each in an authorized denomination in aggregate principal
amount equal to and in exchange for the unrepurchased portion of the
principal of the Security so surrendered.
(g) Any issuance of shares of Common Stock in respect of the
Repurchase Price or the Fundamental Change Repurchase Price, as the case
may be, shall be deemed to have been effected immediately prior to the
close of business on the Repurchase Date or the Fundamental Change
Repurchase Date, as the case may be, and the Person or Persons in whose
name or names any certificate or certificates for shares of Common Stock
shall be issuable upon such repurchase shall be deemed to have become on
the Repurchase Date or the Fundamental Change Repurchase Date, as the case
may be, the holder or holders of record of the shares represented thereby;
provided, however, that any surrender for repurchase on a date when the
stock transfer books of the Company shall be closed shall constitute the
Person or Persons in whose name or names the certificate or certificates
for such shares are to be issued as the record holder or holders thereof
for all purposes at the opening of business on the next succeeding day on
which such stock transfer books are open. No payment or adjustment shall
be made for dividends or distributions on any Common Stock issued upon
repurchase of any Security declared prior to the Repurchase Date or the
Fundamental Change Repurchase Date, as the case may be.
(h) No fractional shares shall be issued upon repurchase of
Securities. If more than one Security shall be repurchased from the same
Holder and the Repurchase Price or the Fundamental Change Repurchase
Price, as the case may be, shall be payable in shares of Common Stock,
then the number of full shares that shall be issuable upon such repurchase
shall be computed on the basis of the aggregate principal amount of the
Securities so repurchased. Instead of any fractional share of Common Stock
that would otherwise be issuable on the repurchase of any Security or
Securities, the Company will deliver to the applicable Holder its check
for the current market value of such fractional share. The current market
value of a fraction of a share is determined by multiplying the current
market price of a full share by the fraction, and rounding the result to
the nearest cent. For purposes of this Section 3.4(h), the current market
price of a share of Common Stock is the Closing Price Per Share on the
most recent Trading Day immediately preceding the Repurchase Date or the
Fundamental Change Repurchase Date, as the case may be.
(i) Any issuance and delivery of certificates for shares of Common
Stock on repurchase of Securities shall be made without charge to the
Holder of Securities being repurchased for such certificates or for any
tax or duty in respect of the issuance or delivery of such certificates or
the securities represented thereby; provided, however, that the Company
shall not be required to pay any tax or duty that may be payable in
respect of (1) income of the Holder or (2) any transfer involved in the
issuance or delivery of certificates for shares of Common Stock in a name
other than that of the Holder of the Securities being repurchased, and no
such issuance or delivery shall be made unless and until the Person
requesting such issuance or delivery has paid to the Company the amount
30
of any such tax or duty or has established, to the satisfaction of the
Company, that such tax or duty has been paid.
(j) If shares of Common Stock to be delivered upon repurchase of a
Restricted Security are to be registered in a name other than that of the
"beneficial owner" of such Security (determined in accordance with Rule
13d-3, as in effect on the date of the original execution of this
Indenture, promulgated by the SEC pursuant to the Exchange Act), then such
Holder must deliver to the Trustee a Transfer Certificate in the form set
forth in Exhibit C, dated the date of surrender of such Restricted
Security and signed by such beneficial owner, as to compliance with the
restrictions on transfer applicable to such Restricted Security. Neither
the Trustee nor any Registrar or Transfer Agent or other agents shall be
required to register in a name other than that of the beneficial owner
shares of Common Stock issued upon repurchase of any such Restricted
Security not so accompanied by a properly completed Transfer Certificate.
(k) All Securities delivered for repurchase shall be delivered to
the Trustee to be canceled at the direction of the Trustee.
Section 3.5 Deposit of Repurchase Price or Fundamental Change Repurchase
Price. Prior to 10:00 a.m. (New York City time) on the Repurchase Date or the
Fundamental Change Repurchase Date, as the case may be, the Company shall
deposit with the Paying Agent (or if the Company is the Paying Agent, shall
segregate and hold in trust) cash and/or Common Stock (if permitted pursuant to
Section 3.3) sufficient to pay the Repurchase Price or the Fundamental Change
Repurchase Price, as the case may be. The Company shall promptly notify the
Trustee in writing of the amount of any deposits of cash or Common Stock made
pursuant to this Section 3.5.
Upon payment of the Repurchase Price or the Fundamental Change Repurchase
Price, as the case may be, interest will cease to accrue on the Securities or
the portions of Securities repurchased and such Securities or portions thereof
shall cease to be outstanding. If a Security is repurchased on or after an
interest record date but on or prior to the related Interest Payment Date, then
any accrued and unpaid interest shall be paid to the Person in whose name such
Security was registered at the close of business on such record date.
Section 3.6 Covenant to Comply With Securities Laws Upon Purchase of
Securities. When complying with the provisions of Section 3.1 and Section 3.2
hereof, the Company shall comply with all Federal and state securities laws so
as to permit the rights and obligations under Section 3.1 and Section 3.2 to be
exercised in the time and in the manner specified in Section 3.1 and Section 3.2
and shall, provided that such offer or purchase constitutes an "issuer tender
offer" for purposes of Rule 13e-4 (which term, as used herein, includes any
successor provision thereto) under the Exchange Act at the time of such offer or
purchase, subject to any exemptions available under applicable law, (i) comply
with Rule 13e-4 and Rule 14e-1 (or any successor provision) under the Exchange
Act and (ii) file the related Schedule TO (or any successor schedule, form or
report) under the Exchange Act.
31
ARTICLE IV
REDEMPTION OF SECURITIES
Section 4.1 Optional Redemption. The Securities are not redeemable prior
to November 1, 2008. On and after November 1, 2008, the Company may, at its
option, redeem the Securities in whole at any time or in part from time to time,
on any date prior to the Stated Maturity of the Securities upon at least 30
days' notice and not more than 60 days' notice given in the manner set forth in
Section 4.4, at a redemption price (the "Optional Redemption Price") equal to
the sum of (i) 100% of the principal amount of the Securities to be redeemed
plus (ii) interest (and Liquidated Damages, if any) accrued but unpaid to, but
excluding the Redemption Date, plus (iii) the Redemption Premium; provided that
such redemption may only occur if (x) on the date that the Company gives such
notice, the Closing Price Per Share for at least 20 Trading Days of the 30
consecutive Trading Days immediately preceding such date is at least 150% of the
Conversion Price then in effect, appropriately adjusted to take into account the
occurrence, during such 30 Trading Day period, of any event described in Section
13.3 and (y) on the date that the Company delivers such Company Notice through
the date of redemption, the Common Stock issuable upon conversion of the
Securities is either (1) covered by a registration statement covering resales
thereof that is effective and available for use and is expected to remain
effective and available for use for the 30 days following the date of such
notice or (2) eligible to be resold by non-affiliates pursuant to Rule 144(k)
under the Securities Act.
Each Holder who elects to convert Securities pursuant to the provisions of
Article XIII during a Redemption Conversion Period shall be entitled to receive
the Redemption Premium in respect of the Securities so converted as provided in
Section 6.1.
Section 4.2 Election to Redeem; Notice to Trustee. The election of the
Company to redeem any Securities shall be evidenced by a Board Resolution. In
case of any redemption at the election of the Company of any of the Securities,
the Company shall, at least 35 days prior to the Redemption Date fixed by the
Company (unless a shorter notice shall be satisfactory to the Trustee), notify
the Trustee in writing of such Redemption Date, the Optional Redemption Price
and whether, if Holders elect to convert their Securities during the Redemption
Conversion Period, the Redemption Premium will be payable in cash or shares of
Common Stock valued at the Conversion Price or a specified combination thereof,
and, if less than all the Securities are being redeemed, the principal amount of
the Securities to be redeemed.
Section 4.3 Selection by Trustee of Securities to Be Redeemed. If less
than all the Securities are to be redeemed, the particular Securities to be
redeemed shall be selected (in principal amounts of $1,000 or integral multiples
thereof) by the Trustee on a pro rata basis, treating the Series A Securities
and the Series B Securities as a single series, within five Business Days after
it receives the notice described in Section 4.2, from the outstanding Securities
not previously called for redemption. If any Security selected for partial
redemption is converted in part before termination of the conversion right with
respect to the portion of the Security so selected, the converted portion of
such Security shall be deemed (so far as may be) to be the portion selected for
redemption. Securities which have been converted during a selection of
Securities to be redeemed may be treated by the Trustee as outstanding for the
purpose of such selection. The Trustee shall promptly notify the Company and
each Security Registrar in writing
32
of the Securities selected for redemption pursuant to this Section 4.3 and, in
the case of any Securities selected for partial redemption, the principal amount
thereof to be redeemed. For all purposes of this Indenture, unless the context
otherwise requires, all provisions relating to the redemption of Securities
shall relate, in the case of any Securities redeemed or to be redeemed only in
part, to the portion of the principal amount of such Securities which has been
or is to be redeemed.
Section 4.4 Notice of Redemption. Notice of redemption (a "Redemption
Notice") shall be given by the Company in the manner provided in this Section
4.4 to the Trustee, the Paying Agent and the Holders of Securities to be
redeemed not less than 30 nor more than 60 days prior to the Redemption Date,
and such notice shall be irrevocable. The Company shall, concurrently with the
giving of such notice, publish a press release including the information
required to be included in such Redemption Notice hereunder.
All Redemption Notices shall state:
(a) the date of redemption (the "Redemption Date"),
(b) the Optional Redemption Price and the amounts attributable to
each element thereof, as specified in clause (i), (ii) and (iii) of the
definition of "Optional Redemption Price" in Section 4.1,
(c) whether, if Holders elect to convert their Securities during the
Redemption Conversion Period, the Redemption Premium will be paid in cash
or shares of Common Stock valued a the Conversion Price or in a specified
combination thereof,
(d) if less than all outstanding Securities are to be redeemed, the
aggregate principal amount of Securities to be redeemed and the aggregate
principal amount of Securities that will be outstanding after such partial
redemption,
(e) that on the Redemption Date the Optional Redemption Price will
become due and payable upon each such Security to be redeemed, and that
interest thereon shall cease to accrue on and after said date,
(f) the Conversion Price, that the right to convert the Securities
to be redeemed will terminate on the Redemption Date and the places where
such Securities may be surrendered for conversion,
(g) the place or places where such Securities are to be surrendered
for payment of the Optional Redemption Price; and
(h) the CUSIP numbers of the Securities to be redeemed.
In case of a partial redemption, the notice shall specify the serial and CUSIP
numbers (if any) and the portions thereof called for redemption and that
transfers and exchanges may occur on or prior to the Redemption Date.
33
Notice of redemption of Securities to be redeemed at the election of the
Company shall be given by the Company or, at the Company's written request, by
the Trustee in the name of and at the expense of the Company. Notice of
redemption of Securities to be redeemed at the election of the Company received
by the Trustee shall be given by the Trustee to each Paying Agent in the name of
and at the expense of the Company.
Section 4.5 Deposit of Redemption Price. On or prior to 10:00 a.m. (New
York City time) on the Redemption Date, the Company shall deposit with the
Trustee an amount of money (which shall be in immediately available funds on
such Redemption Date) sufficient to pay the Optional Redemption Price of all the
Securities which are to be redeemed on that date other than any Securities
called for redemption on that date which have been converted prior to the date
of such deposit. If any Security called for redemption is converted, any money
deposited with the Trustee or so segregated and held in trust for the redemption
of such Security shall be paid to the Company on Company Request or, if then
held by the Company, shall be discharged from such trust.
Section 4.6 Securities Payable on Redemption Date. Notice of redemption
having been given as aforesaid, the Securities so to be redeemed shall, on the
Redemption Date, become due and payable at the Optional Redemption Price therein
specified and from and after such date (unless the Company shall default in the
payment of the Optional Redemption Price) such Securities shall cease to bear
interest. Upon surrender of any Security for redemption in accordance with said
notice such Security shall be paid by the Company at the Optional Redemption
Price.
If any Security called for redemption shall not be so paid upon surrender
thereof for redemption, the Optional Redemption Price with respect to such
Security, to the extent permitted by applicable law, shall, until paid, bear
interest from the Redemption Date at a rate equal to the Interest Rate on the
Security plus 1% per annum and such Security shall remain convertible into
Common Stock until the Optional Redemption Price plus any default interest
accrued under this Section 4.6, shall have been paid in full or duly provided
for.
Any Security that is to be redeemed only in part shall be surrendered at
the Corporate Trust Office or an office or agency of the Company designated for
that purpose pursuant to Section 5.5 (with, if the Company or the Trustee so
requires, due endorsement by, or a written instrument of transfer in form
satisfactory to the Company and the Trustee duly executed by, the Holder thereof
or his attorney duly authorized in writing), and the Company shall execute, and
the Trustee shall authenticate and make available for delivery to the Holder of
such Security without service charge, a new Security or Securities, of like
series and of any authorized denomination as requested by such Holder, in
aggregate principal amount equal to and in exchange for the unredeemed portion
of the principal of the Security so surrendered. Upon redemption, interests in
Global Securities shall be reduced in accordance with the Applicable Procedures.
Section 4.7 Conversion Arrangement on Call for Redemption. In connection
with any redemption of Securities, the Company may arrange for the purchase and
conversion of any Securities to be redeemed by an agreement with one or more
investment bankers or other purchasers (the "Purchasers") to purchase such
securities by paying to the Trustee in trust for the
34
Holders, on or before 10:00 a.m. (New York City time) on the Redemption Date, an
amount not less than the applicable Optional Redemption Price. Notwithstanding
anything to the contrary contained in this Article IV, the obligation of the
Company to pay the Optional Redemption Price shall be deemed to be satisfied and
discharged to the extent such amount is so paid by such Purchasers. If such an
agreement is entered into (a copy of which shall be filed with the Trustee prior
to the close of business on the Business Day immediately prior to the Redemption
Date), any Securities called for redemption that are not duly surrendered for
conversion by the Holders thereof may, at the option of the Company, be deemed,
to the fullest extent permitted by law, and consistent with any agreement or
agreements with such Purchasers, to be acquired by such Purchasers from such
Holders and (notwithstanding anything to the contrary contained in Article XIII)
surrendered by such Purchasers for conversion, all as of immediately prior to
the close of business on the Business Day prior to the Redemption Date, subject
to payment of the above amount as aforesaid. At the direction of the Company,
the Trustee shall hold and dispose of any such amount paid to it by the
Purchasers to the Holders in the same manner as it would monies deposited with
it by the Company for the redemption of Securities. Without the Trustee's prior
written consent, no arrangement between the Company and such Purchasers for the
purchase and conversion of any Securities shall increase or otherwise affect any
of the powers, duties, responsibilities or obligations of the Trustee as set
forth in this Indenture, and the Company agrees to indemnify the Trustee from,
and hold it harmless against, any loss, liability or expense arising out of or
in connection with any such arrangement for the purchase and conversion of any
Securities between the Company and such Purchasers, including the costs and
expenses, including reasonable legal fees, incurred by the Trustee in the
defense of any claim or liability arising out of or in connection with the
exercise or performance of any of its powers, duties, responsibilities or
obligations under this Indenture.
ARTICLE V
COVENANTS
Section 5.1 Payment of Securities. The Company shall promptly make all
payments in respect of the Securities on the dates and in the manner provided in
the Securities or pursuant to this Indenture. Any amounts of cash to be given to
the Trustee or Paying Agent shall be deposited with the Trustee or Paying Agent
by 10:00 a.m. (New York City time) on the applicable date by the Company.
Principal amount plus accrued interest, if any, including the Repurchase Price,
the Fundamental Change Repurchase Price, the Optional Redemption Price,
Liquidated Damages, if any, and interest, if any, shall be considered paid on
the applicable date due if on such date the Trustee or the Paying Agent holds,
in accordance with this Indenture, cash sufficient to pay all such amounts then
due.
Section 5.2 SEC and Other Reports. The Company shall file with the
Trustee, within 15 days after it is required to file such annual and quarterly
reports, information, documents and other reports with the SEC, copies of its
annual report and of the information, documents and other reports (or copies of
such portions of any of the foregoing as the SEC may by rules and regulations
prescribe) that the Company is required to file with the SEC pursuant to Section
13 or 15(d) of the Exchange Act. The Company also shall comply with the other
provisions of TIA Section 314(a), whether or not the Securities are governed by
the TIA. Delivery of such reports, information and documents to the Trustee is
for informational purposes only and the Trustee's
35
receipt of such shall not constitute constructive notice of any information
contained therein or determinable from information contained therein, including
the Company's compliance with any of its covenants hereunder (as to which the
Trustee is entitled to rely conclusively on Officers' Certificates). At any time
when the Company is not subject to Section 13 of 15(d) of the Exchange Act, the
Company shall furnish to the Trustee (i) quarterly financial statements on or
before the 45th day after the end of each fiscal quarter that are substantially
equivalent to those the Company would be required to file with the SEC in a
Quarterly Report on Form 10-Q, (ii) annual financial statements on or before the
90th day after the end of each fiscal year that are substantially equivalent to
those the Company would be required to file with the SEC in an Annual Report on
Form 10-K, including a report thereon by the Company's certified independent
accountants, (iii) accompanying each of the financial statements required by (i)
and (ii) above, information substantially equivalent to that required by
Regulation S-K Item 303, "Management Discussion and Analysis of Financial
Condition and Results of Operations;", and (iv) all reports that are
substantially equivalent to that which would be required to be filed with the
SEC on Form 8-K if the Company were required to file such reports, provided,
that in each case the delivery of materials to the Trustee by electronic means
shall be deemed "furnished" to the Trustee for purposes of this Section 5.2;
provided, further, that the Company shall be deemed to have satisfied its
obligations under each of (i), (ii), (iii) and (iv) above if it files such
information with the SEC (if the SEC will accept such filing) or otherwise makes
such financial statements and other information available on or through its web
site.
Notwithstanding anything to the contrary set forth in this Indenture, the
obligations of the Company set forth in the immediately preceding paragraph
shall commence on December 15, 2004, and the Company shall be under no
obligation to comply with the provisions of the immediately preceding paragraph
before such date.
Section 5.3 Compliance Certificate. The Company and each Guarantor (to the
extent that such Guarantor is so required under the TIA) shall deliver to the
Trustee on or before the 120th day after the end of each fiscal year of the
Company (beginning with the fiscal year ending on September 30, 2005) an
Officers' Certificate which complies with the requirements of the TIA, stating
whether or not to the knowledge of the signers thereof, the Company is in
default in the performance and observance of any of the terms, provisions and
conditions of this Indenture (without regard to any period of grace or
requirement of notice provided hereunder) and if the Company shall be in
default, specifying all such defaults and the nature and status thereof of which
they may have knowledge.
The Company will promptly deliver to the Trustee, forthwith upon becoming
aware of (i) any default in the performance or observance of any covenant,
agreement or condition contained in this Indenture, or (ii) any Event of
Default, an Officers' Certificate specifying with particularity such default or
Event of Default and further stating what action the Company has taken, is
taking or proposes to take with respect thereto.
Section 5.4 Further Instruments and Acts. Upon request of the Trustee, the
Company will execute and deliver such further instruments and do such further
acts as may be reasonably necessary or proper to carry out more effectively the
purposes of this Indenture.
36
Section 5.5 Maintenance of Office or Agency. The Company will maintain an
office or agency in the Borough of Manhattan, The City of New York, of the
Trustee, Registrar, Paying Agent and Conversion Agent where Securities may be
presented or surrendered for payment, where Securities may be surrendered for
registration of transfer, exchange, purchase or conversion and where notices and
demands to or upon the Company in respect of the Securities and this Indenture
may be served. The office of The Bank of New York, a New York banking
corporation, at 000 Xxxxxxx Xx., 0xx Xxxxx Xxxx, Xxx Xxxx, Xxx Xxxx 00000, shall
initially be such office or agency for all of the aforesaid purposes. The
Company shall give prompt written notice to the Trustee of the location, and of
any change in the location, of any such office or agency (other than a change in
the location of the office of the Trustee). If at any time the Company shall
fail to maintain any such required office or agency or shall fail to furnish the
Trustee with the address thereof, such presentations, surrenders, notices and
demands may be made or served at the address of the Trustee set forth in Section
14.2.
The Company may also from time to time designate one or more other offices
or agencies where the Securities may be presented or surrendered for any or all
such purposes and may from time to time rescind such designations.
Section 5.6 Delivery of Certain Information. Upon the request of a Holder
or any beneficial owner of Securities or holder or beneficial owner of shares of
Common Stock issued upon conversion thereof, the Company and the Guarantors will
promptly furnish or cause to be furnished Rule 144A Information (as defined
below) and any reports required to be filed by them under the Exchange Act or
the Securities Act to such Holder or any beneficial owner of Securities or
holder or beneficial owner of shares of Common Stock, or to a prospective
purchaser of any such security designated by any such holder, as the case may
be, to the extent required to permit compliance by such Holder or holder with
Rule 144A under the Securities Act in connection with the resale of any such
security. "Rule 144A Information" shall be such information as is specified
pursuant to Rule 144A(d)(4) under the Securities Act.
Section 5.7 Existence. Subject to Article VII, the Company shall do or
cause to be done all things necessary to preserve and keep in full force and
effect its existence, rights (charter and statutory) and franchises; provided,
however, that the Company shall not be required to preserve any such right or
franchise if the Board of Directors shall determine that the preservation
thereof is no longer desirable in the conduct of the business of the Company.
Section 5.8 Resale of Certain Securities. During the period beginning on
the Issue Date and ending on the date that is two years from the Issue Date, the
Company shall not, and shall not permit any of its "affiliates" (as defined in
Rule 144 under the Securities Act or any successor provision thereto) to, resell
any Securities which constitute "restricted securities" under Rule 144 that have
been reacquired by any of them.
Section 5.9 Liquidated Damages Under the Registration Rights Agreement. If
at any time Liquidated Damages become payable by the Company pursuant to the
Registration Rights Agreement, the Company shall promptly deliver to the Trustee
a certificate to that effect and stating (i) the amount of such Liquidated
Damages that are payable and (ii) the date on which such Liquidated Damages are
payable pursuant to the terms of the Registration Rights Agreement. Unless and
until a Responsible Officer of the Trustee receives such a certificate, the
37
Trustee may assume without inquiry that no Liquidated Damages are payable. If
the Company has paid Liquidated Damages directly to the Persons entitled to such
Liquidated Damages, the Company shall deliver to the Trustee a certificate
setting forth particulars of such payment.
Section 5.10 Information for IRS Filings. Upon request, the Company shall
provide to the Trustee on a timely basis such information as the Trustee
requires to enable the Trustee to prepare and file any form required to be
submitted by the Company with the Internal Revenue Service and the Holders of
the Securities.
Section 5.11 Additional Subsidiary Guarantees. If, after the date of this
Indenture, any Domestic Subsidiary of the Company that is not a Guarantor shall
be a Significant Subsidiary, then the Company shall cause such Significant
Subsidiary to become a Guarantor by executing a supplemental indenture in
substantially the form of Exhibit H hereto, and the Company shall deliver an
Opinion of Counsel satisfactory to the Trustee, within 10 Business Days of the
date on which such Domestic Subsidiary became a Significant Subsidiary to the
effect that such supplemental indenture has been duly authorized, executed and
delivered by that Significant Subsidiary and constitutes a valid and binding
agreement of that Significant Subsidiary, enforceable in accordance with its
terms (subject to customary exceptions).
Section 5.12 Book-Entry System. If the Securities cease to be traded in
the Depositary's book-entry settlement system, the Company covenants and agrees
that it shall use reasonable efforts to make other book entry arrangements that
it determines are reasonable for the Securities.
ARTICLE VI
MAKE-WHOLE PREMIUM AND REDEMPTION PREMIUM
Section 6.1 Entitlement to Make-Whole Premium and Redemption Premium. If a
Fundamental Change occurs, Holders who convert their Securities (in accordance
with the provisions of Article XIII) during the Fundamental Change Conversion
Period in which such Fundamental Change occurs shall receive from the Company
the Make-Whole Premium upon such conversion. If a Redemption Notice has been
provided in accordance with the provisions of Section 4.4, Holders who convert
their Securities (in accordance with the provisions of Article XIII) during the
Redemption Conversion Period beginning on the date of such Redemption Notice
shall receive from the Company the Redemption Premium upon such conversion, and
Holders who do not convert their Securities during the Redemption Conversion
Period shall receive from the Company the Redemption Premium upon redemption in
accordance with Article IV.
(a) The Make-Whole Premium shall be determined as follows:
(i) "Effective Date" means the date that the applicable
Fundamental Change becomes effective.
(ii) "Stock Price" means the price per share of Common Stock,
determined as follows:
38
(A) if, in connection with a transaction constituting a
Fundamental Change, holders of Common Stock receive only cash
pursuant to such Fundamental Change, the Stock Price shall be
the cash amount paid per share of Common Stock; or
(B) in all other circumstances, the Stock Price shall be
the arithmetic average of the Closing Prices Per Share of the
Common Stock on the five Trading Days prior to, but not
including, the Effective Date.
(iii) "Make-Whole Premium" means a number of additional shares
of Common Stock to be received upon conversion per $1,000 principal
amount of Securities during a Fundamental Change Conversion Period,
equal to:
(A) if the Stock Price is less than $2.16 (subject to
adjustment pursuant to Section 6.3) (the "Stock Price
Threshold"), no shares;
(B) if the Stock Price is more than $36.00 (subject to
adjustment pursuant to Section 6.3) (the "Stock Price Cap"),
no shares; and
(C) otherwise, consideration as determined in accordance
with the provisions of this Section 6.1 having a value equal
to the number of shares of Common Stock set forth in the
following table (the "Make-Whole Premium Table") corresponding
to the Stock Price and the Effective Date applicable pursuant
to the terms hereof, to the Fundamental Change to be
consummated during such Fundamental Change Conversion Period.
39
STOCK PRICE $2.16 $2.17 $2.44 $2.71 $2.98 $3.25 $6.00 $9.00 $12.00 $15.00 $18.00 $21.00 $24.00 $27.00 $30.00 $33.00 $36.00
----------- ----- ------ ------ ------ ----- ------ ----- ----- ------ ------ ------ ------ ------ ------ ------ ------ ------
EFFECTIVE DATE
November 24, 2004 0.00 155.25 131.97 113.73 99.94 89.04 39.76 22.04 13.74 9.07 6.18 4.27 2.96 2.04 1.39 0.91 0.00
November 15, 2005 0.00 155.12 131.81 113.52 99.09 88.16 38.72 21.51 13.46 8.93 6.11 4.24 2.96 2.02 1.38 0.90 0.00
November 15, 2006 0.00 154.90 131.74 113.43 98.78 86.91 37.48 20.84 13.09 8.73 6.00 4.18 2.93 2.01 1.38 0.90 0.00
November 15, 2007 0.00 154.66 131.62 113.18 97.75 85.39 35.72 19.84 12.51 8.37 5.78 4.05 2.84 1.99 1.37 0.89 0.00
November 15, 2008 0.00 154.30 118.48 102.06 89.20 78.89 33.34 18.46 11.68 7.85 5.44 3.82 2.69 1.89 1.30 0.87 0.00
November 15, 2009 0.00 137.89 115.27 98.20 84.99 74.53 30.19 16.61 10.55 7.14 4.98 3.52 2.49 1.75 1.21 0.81 0.00
November 15, 2010 0.00 136.16 111.85 93.76 79.95 69.18 26.14 14.21 9.06 6.17 4.33 3.08 2.19 1.54 1.06 0.71 0.00
November 15, 2011 0.00 134.33 107.53 87.91 73.21 61.97 20.77 11.09 7.12 4.90 3.47 2.48 1.77 1.25 0.86 0.56 0.00
November 15, 2012 0.00 133.31 102.55 80.42 64.23 52.21 13.82 7.21 4.70 3.29 2.36 1.71 1.23 0.87 0.59 0.39 0.00
November 15, 2013 0.00 133.20 96.96 70.00 50.88 37.35 4.80 2.49 1.67 1.19 0.87 0.64 0.46 0.33 0.22 0.13 0.00
November 15, 2014 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
40
If the Stock Price is between two Stock Price amounts on the Make-Whole Premium
Table or the Effective Date is between two dates on the Make-Whole Premium
Table, the Make-Whole Premium shall be determined by straight-line interpolation
between the number of additional shares set forth in the Make-Whole Premium
Table for the higher and lower Stock Price amounts and the two dates, as
applicable, based on a 365-day year. The Stock Prices set forth in the column
headers are subject to adjustment pursuant to Section 6.3.
(b) Subject to Section 6.1(c) and the Share Limitation, the Company
may pay any Make-Whole Premium required pursuant to Section 6.1(a): (i) in
shares of Common Stock (other than cash paid in lieu of fractional
shares), (ii) in cash, (iii) in the same form of consideration into which
shares of Common Stock have been converted in connection with the
applicable Fundamental Change; or (iv) in any combination of the
foregoing. The Company Notice delivered pursuant to Section 3.4 in
connection with the Fundamental Change shall state the percentage of any
Make-Whole Premium, that will be paid in shares of Common Stock (which
indication shall be irrevocable). If holders of Common Stock have the
right to elect the form of consideration received in a Fundamental Change,
then for purposes of the foregoing, the consideration into which a share
of Common Stock has been converted shall be deemed to equal the same
percentage of each form of consideration as encompasses the aggregate
consideration distributed in respect of all shares of Common Stock
participating in the distribution. Unless the Company gives notice to the
contrary, and provided that the applicable conditions set forth in Section
6.1(c) have been satisfied, the Make-Whole Premium shall be paid in shares
of Common Stock (or, if applicable, in the same form of consideration into
which shares of Common Stock have been converted in connection with the
applicable Fundamental Change). With respect to all or any portion of the
Make-Whole Premium to be paid in cash, the amount of cash to be paid by
the Company shall equal the product of (i) the portion of the Make-Whole
Premium to be paid in cash expressed as a number of shares of Common Stock
and (ii) the Stock Price.
The Company, in its sole discretion, may elect to pay all or any
portion of any Redemption Premium required pursuant to Section 6.1(a) to
be paid upon the conversion of Securities as described in Section 13.1
within the Redemption Conversion Period (i) in shares of Common Stock
(other than cash paid in lieu of fractional shares) valued at the
Conversion Price, (ii) in cash or (iii) in any combination of the
foregoing, in accordance with the provisions of Article XIII.
The Company may from time to time appoint a calculation agent with
respect to the calculation of the Make-Whole Premium (the "Calculation
Agent"). The Calculation Agent shall, on behalf of and upon request by the
Company or the Trustee, calculate (A) the Stock Price and (B) the
Make-Whole Premium with respect to such Stock Price based on the Effective
Date specified by the Company or the Trustee and shall deliver its
calculation of the Stock Price and Make-Whole Premium to the Company and
the Trustee within five Business Days of the request by the Company or the
Trustee. The Company, or at the Company's request, the Trustee in the name
and at the expense of the Company, (X) shall notify the Holders of the
Stock Price and the estimated Make-Whole Premium per $1,000 principal
amount of Securities with respect to a Fundamental Change as part of the
Company Notice delivered in connection with a Fundamental Change in
41
accordance with Section 3.4 and (Y) shall notify the Holders promptly upon
the opening of business on the Effective Date of the consideration
expressed as the number of additional shares (or, at the option of the
Company, cash or other securities, assets or property into which all or
substantially all of the shares of Common Stock have been converted as of
the Effective Date as described above) to be delivered in respect of the
Make-Whole Premium, if any, payable in connection with conversions during
the Fundamental Change Conversion Period.
(c) Provided that the Company has timely given a Company Notice
containing all the information required under Section 3.4 and subject to
compliance with the Share Limitation, the Company may elect to pay all or
any portion of the Make-Whole Premium in Common Stock rather than cash, if
and only if the following conditions shall have been satisfied (or waived
by the applicable Holder):
(i) From and after the delivery of the Company Notice relating
to the Make-Whole Premium through the payment of the Make-Whole
Premium, (i) the shares of Common Stock to be issued in connection
with the Make-Whole Premium are (x) either registered, approved
and/or qualified, as applicable, or exempt from any such
registration, approval and qualification, as applicable, under
applicable federal and state securities law such that such shares of
Common Stock shall be upon issue validly issued and delivered in
accordance with applicable federal and state securities laws and not
subject to any transfer restrictions under the Securities Act or
other securities laws and (y) listed or approved for listing on the
NYSE, the AMEX, the Nasdaq National Market or The Nasdaq SmallCap
Market; and (ii) there shall be sufficient authorized but unissued
(or issued but not outstanding) shares of Common Stock to issue the
shares of Common Stock in connection with the Make-Whole Premium,
and such Common Stock will upon issue, be duly and validly issued
and fully paid and nonassessable and free of any preemptive or
similar rights; and
(ii) The Trustee shall receive at the time of delivery of the
applicable Company Notice and just prior to the date of payment of
the Make-Whole Premium, (i) an Officer's Certificate stating that
the terms of the issuance of such shares of Common Stock are in
conformity with this Indenture, (ii) an Opinion of Counsel to the
effect that the shares of Common Stock in respect of the Make-Whole
Premium have been duly authorized and, when issued and delivered
pursuant to the terms of this Indenture, will be validly issued,
fully paid and non-assessable and (iii) an Officer's Certificate
stating that the conditions to the issuance of the shares of Common
Stock have been satisfied.
In the event of a Fundamental Change where the Company is not the
surviving entity, for each conversion by a Holder after the Effective
Date, such Holder shall receive in lieu of each share of Common Stock
payable as part of the Make-Whole Premium, consideration in the form and
amount payable in respect of a share of Common Stock pursuant to such
Fundamental Change (provided that any securities that are issuable as part
of such consideration shall meet the conditions set forth in this Section
6.1(c) as if such securities were "Common Stock" under this Section
6.1(c)).
42
Promptly after determination of the actual number of shares of
Common Stock to be issued in respect of the Make-Whole Premium, the
Company shall disseminate a press release through Dow Xxxxx & Company,
Inc. or Bloomberg Business News containing the information or publish this
information on the Company's web site or through such other public medium
as the Company may use at that time.
Section 6.2 Payment of Make-Whole Premium and Redemption Premium. On or
prior to 10:00 a.m. (New York City time) on the sixteenth (16th) Trading Day
following the Effective Date, the Company will deposit with the Trustee or with
one or more Paying Agents additional shares of Common Stock and/or cash
sufficient to satisfy the entitlement of the Holders of Securities under Section
6.1 to receive a Make-Whole Premium. Payment of the Make-Whole Premium pursuant
to Section 6.1 to Holders of Securities surrendered for conversion within a
Fundamental Change Conversion Period will be made promptly following the later
of the Effective Date of the Fundamental Change and the date of such surrender
for conversion, as the case may be, by delivering entitlements to securities,
mailing checks in respect of cash and/or delivering other assets or property for
the amount payable to the Holders of such Securities entitled thereto as they
(and their addresses) shall appear in the security register. To the extent that
the aggregate number of shares of Common Stock or amount of cash deposited by
the Company pursuant to this Section 6.2 exceeds the aggregate entitlement to
receive the Make-Whole Premium under Section 6.1 of the Holders of Securities
that are converted during a Fundamental Change Conversion Period, then, promptly
after the end of the Fundamental Change Conversion Period, as the case may be,
the Paying Agent shall return any such excess to the Company.
If the Company elects to pay all or any portion of the Redemption Premium
required pursuant to the provisions of Section 6.1 to be paid upon the
conversion of Securities as described in Section 13.1 within the Redemption
Conversion Period in cash, the Company will deposit with the Trustee or with one
or more Paying Agents on or prior to 10:00 am (New York City time) on the
Redemption Date cash sufficient to satisfy the portion of the entitlement of the
Holders of Securities under Section 6.1 to such Redemption Premium to be paid in
cash. Payment of such all or a portion of such entitlement in the form of cash
pursuant to Section 6.1 to Holders of Securities surrendered for conversion
within a Redemption Conversion Period will be made promptly following the
Conversion Date (but in no event later than the Redemption Date immediately
following the Redemption Conversion Period) by mailing checks in respect of cash
for the amount payable to the Holders of such Securities entitled thereto as
they (and their addresses) shall appear in the security register. To the extent
that the aggregate amount of cash deposited by the Company pursuant to this
Section 6.2 exceeds the aggregate entitlement to receive the Redemption Premium
under Section 6.1 of the Holders of Securities that are converted during a
Redemption Conversion Period, then, promptly after the end of the Redemption
Conversion Period, the Trustee or such Paying Agent shall return any such excess
to the Company. If the Company elects to pay all or any portion of the
Redemption Premium in shares of Common Stock, the number of shares of Common
Stock to be issued upon conversion of Securities during a Redemption Conversion
Period shall be increased pursuant to the provisions of Section 13.1.
Section 6.3 Adjustment to the Make-Whole Premium. Whenever the Conversion
Price shall be adjusted from time to time by the Company pursuant to Section
13.3, the Stock
43
Price Threshold and the Stock Price Cap shall be adjusted and each of the Stock
Prices set forth in the Make-Whole Premium Table shall be adjusted by
multiplying each such amount by a fraction the numerator of which is the
Conversion Price as so adjusted and the denominator of which is the Conversion
Price immediately prior to such adjustment. If an adjustment is made to the
Conversion Price pursuant to Section 13.3, the number of additional shares as
set forth in each entry on the Make-Whole Premium Table shall be adjusted by
multiplying each such amount by a fraction the numerator of which is the
Conversion Price immediately prior to such adjustment and the denominator of
which is the Conversion Price as so adjusted.
ARTICLE VII
SUCCESSOR CORPORATION
Section 7.1 When Company May Merge or Transfer Assets. The Company shall
not consolidate with or merge with or into any other Person or convey, transfer,
sell, lease or otherwise dispose of all or substantially all of its properties
and assets to any Person, unless:
(a) either (1) the Company shall be the continuing corporation or
(2) the Person (if other than the Company) formed by such consolidation or
into which the Company is merged or the Person which acquires by
conveyance, transfer or lease the all or substantially all of the
properties and assets of the Company (i) shall be organized and validly
existing under the laws of the United States or any State thereof or the
District of Columbia and (ii) shall expressly assume, by an indenture
supplemental hereto, executed and delivered to the Trustee, in form
reasonably satisfactory to the Trustee, all of the obligations of the
Company under the Securities and this Indenture;
(b) immediately after giving effect to such transaction, no Event of
Default, and no event that, after notice or lapse of time or both, would
become an Event of Default, shall have occurred and be continuing; and
(c) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, conveyance, transfer or lease and, if a
supplemental indenture is required in connection with such transaction,
such supplemental indenture, comply with this Article VII and that all
conditions precedent herein provided for relating to such transaction have
been satisfied.
The successor Person formed by such consolidation or into which the Company is
merged or the successor Person to which such conveyance, transfer or lease 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 had been named as the Company herein; and thereafter, the Company
shall be discharged from all obligations and covenants under this Indenture and
the Securities. Subject to Section 11.6, the Company, the Trustee and the
successor Person shall enter into a supplemental indenture to evidence the
succession and substitution of such successor Person and such discharge and
release of the Company.
44
ARTICLE VIII
DEFAULTS AND REMEDIES
Section 8.1 Events of Default. So long as any Securities are outstanding,
each of the following shall be an "Event of Default":
(a) default in the payment of the principal amount on any Security
when the same becomes due and payable, whether at Stated Maturity, upon
redemption or repurchase or otherwise;
(b) default in the payment of the Make-Whole Premium, if any, when
due and payable;
(c) default in the payment of any accrued and unpaid interest, or
the payment of any Liquidated Damages, if any, on any Security, or any
other amount due on any Securities (other than those referred to in
clauses (a) and (b) above), in each case when due and payable, and
continuance of such default for a period of 30 days;
(d) failure by the Company or any Guarantor to comply with any of
their respective agreements or covenants in the Securities or this
Indenture (other than those referred to in clauses (a) through (c) above)
and such failure continues for a period of 30 consecutive days after
receipt by the Company of a Notice of Default;
(e) except as provided in Section 8.1(b), the failure to deliver
shares of Common Stock, together with cash instead of fractional shares,
when those shares of Common Stock or cash instead of fractional shares is
required to be delivered following conversion of a Security, and that
failure continues for a period of 10 days;
(f) a default under any Indebtedness for money borrowed by the
Company or any Guarantor having a principal amount then outstanding,
individually or in the aggregate, of $25 million or more, for a period of
30 days after written notice of default is given to the Company by the
Trustee or to the Company and the Trustee by Holders of not less than 50%
in aggregate principal amount of the Securities then outstanding, which
default results in the acceleration of such Indebtedness, unless such
acceleration is waived, cured, rescinded or annulled or unless such
Indebtedness is discharged;
(g) the rendering of a final judgment or judgments (not subject to
appeal) against the Company or any of its Subsidiaries in an aggregate
amount in excess of $25 million which remains unstayed, undischarged or
unbonded for a period of 60 days thereafter;
(h) the Company fails to timely provide a Company Notice in
connection with a Fundamental Change in accordance with Section 3.4;
(i) the entry by a court having jurisdiction in the premises of (i)
a decree or order for relief in respect of the Company or any Subsidiary
that is a Significant Subsidiary, in an involuntary case or proceeding
under the Bankruptcy Code or any other applicable bankruptcy, insolvency,
reorganization or other similar law or (ii) a decree or order
45
adjudging the Company or any Subsidiary that is a Significant Subsidiary, as
bankrupt or insolvent, or approving as properly filed a petition seeking
reorganization, arrangement, adjustment or composition of or in respect of the
Company or any Subsidiary that is a Significant Subsidiary, under the Bankruptcy
Code or any other applicable law, or appointing a custodian, receiver,
liquidator, assignee, trustee, sequestrator or other similar official of the
Company or of any substantial part of its property, or ordering the winding up
or liquidation of its affairs, and the continuance of any such decree or order
for relief or any such other decree or order unstayed and in effect for a period
of 60 consecutive days; or
(j) the commencement by the Company or any Subsidiary that is a
Significant Subsidiary, of a voluntary case or proceeding under the Bankruptcy
Code or any other applicable bankruptcy, insolvency, reorganization or other
similar law or of any other case or proceeding to be adjudicated a bankrupt or
insolvent, or the consent by the Company or any Subsidiary that is a Significant
Subsidiary, to the entry of a decree or order for relief in respect of the
Company or any Subsidiary that is a Significant Subsidiary, in an involuntary
case or proceeding under the Bankruptcy Code or any other applicable bankruptcy,
insolvency, reorganization or other similar law or to the commencement of any
bankruptcy or insolvency case or proceeding against the Company, or the filing
by the Company or any Subsidiary that is a Significant Subsidiary, of a petition
or answer or consent seeking reorganization or relief under any applicable law,
or the consent by the Company to the filing of such petition or to the
appointment of or the taking possession by a custodian, receiver, liquidator,
assignee, trustee, sequestrator or other similar official of the Company or of
any substantial part of its property, or the making by the Company or any
Subsidiary that is a Significant Subsidiary, of an assignment for the benefit of
creditors, or the admission by the Company or any Subsidiary that is a
Significant Subsidiary, in writing of its inability to pay its debts generally
as they become due.
A Default under Section 8.1(d) above is not an Event of Default until the
Trustee notifies the Company, or the Holders of at least 25% in aggregate
principal amount of the Securities at the time outstanding notify the Company
and the Trustee, of the Default and the Company does not cure such Default (and
such Default is not waived) within the time specified in Section 8.1(d) above
after receipt of such notice. Any such notice must specify the Default, demand
that it be remedied and state that such notice is a "Notice of Default."
The Trustee shall, on or before the 90th day after the occurrence of a
Default, give to the Holders of the Securities notice of all uncured Defaults
known to it and written notice of any event which with the giving of notice or
the lapse of time, or both, would become an Event of Default, its status and
what action the Company is taking or proposes to take with respect thereto;
provided, however, the Trustee shall be protected in withholding such notice if
it, in good faith, determines that the withholding of such notice is in the best
interest of such Holders, except in the case of a Default under Section
8.1(a),(b) or (c).
46
Section 8.2 Acceleration. If an Event of Default (other than an Event of
Default specified in Section 8.1(i) or (j) with respect to the Company) occurs
and is continuing, the Trustee by notice to the Company, or the Holders of at
least 25% in aggregate principal amount of the Securities at the time
outstanding by notice to the Company and the Trustee, may declare the principal
amount plus accrued and unpaid interest, and Liquidated Damages, if any, on all
the Securities to be immediately due and payable in cash. To the extent
permitted by applicable law, if an Event of Default specified in Section 8.1(i)
or (j) occurs, the principal amount plus accrued and unpaid interest, and
Liquidated Damages, if any, on all the Securities shall become and be
immediately due and payable without any declaration or other act on the part of
the Trustee or any Holders. The Majority Holders or the Holders originally
causing such acceleration, by notice to the Trustee (and without notice to any
other Securityholder) may rescind an acceleration and its consequences if the
rescission would not violate any judgment or decree and if all existing Events
of Default have been cured or waived except nonpayment of the principal amount
plus accrued and unpaid interest, and Liquidated Damages, if any, that have
become due solely as a result of acceleration and if all amounts due to the
Trustee under Section 9.7 have been paid. No such rescission shall affect any
subsequent Default or impair any right consequent thereto.
Section 8.3 Other Remedies. If an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy to collect the payment
of the principal amount plus accrued and unpaid interest, including the
Repurchase Price, the Fundamental Change Repurchase Price, the Optional
Redemption Price, the Redemption Premium, the Make-Whole Premium and Liquidated
Damages, if any, 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 the Trustee does not possess
any of the Securities or does not produce any of the Securities 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 8.4 Waiver of Past Defaults. The Majority Holders, by notice to
the Trustee (and without notice to any other Securityholder), may waive an
existing Default and its consequences except (i) an Event of Default described
in Section 8.1(a), Section 8.1(b) or Section 8.1(c), (ii) a Default in respect
of a provision that under Section 11.2 cannot be amended without the consent of
each Securityholder affected or (iii) a Default which constitutes a failure to
deliver shares of Common Stock upon conversion of any Security in accordance
with the terms of Article XIII. When a Default is waived, it is deemed cured,
but no such waiver shall extend to any subsequent or other Default or impair any
consequent right. This Section 8.4 shall be in lieu of Section 316(a)(1)(B) of
the TIA and such Section 316(a)(1)(B) is hereby expressly excluded from this
Indenture, as permitted by the TIA.
Section 8.5 Control by Majority. The Majority Holders may direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee or of exercising any trust or power conferred on the Trustee. However,
the Trustee may refuse to follow any direction that violates law or this
Indenture or that the Trustee determines in good faith is unduly
47
prejudicial to the rights of other Securityholders or would involve the Trustee
in personal liability unless the Trustee is offered indemnity satisfactory to
it. This Section 8.5 shall be in lieu of Section 316(a)(1)(A) of the TIA and
such Section 316(a)(1)(A) is hereby expressly excluded from this Indenture, as
permitted by the TIA.
Section 8.6 Limitation on Suits. A Holder may not pursue any remedy with
respect to this Indenture or the Securities unless:
(a) the Holder gives to the Trustee written notice stating that an
Event of Default is continuing;
(b) the Majority Holders make a written request and offer
indemnification reasonably satisfactory to the Trustee to pursue the
remedy;
(c) the Trustee does not comply with the request within 60 days
after receipt of such notice, request and offer of security or indemnity;
and
(d) the Majority Holders do not give the Trustee a direction
inconsistent with the request during such 60-day period.
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.
Section 8.7 Rights of Holders to Receive Payment. The right of any Holder
to receive payment of the principal amount, the Repurchase Price, the
Fundamental Change Repurchase Price, the Optional Redemption Price, the
Make-Whole Premium, the Redemption Premium and Liquidated Damages, if any, or
interest in respect of the Securities held by such Holder, on or after the
respective due dates expressed in the Securities, and to convert the Securities
in accordance with Article XIII, or to bring suit for the enforcement of any
such payment on or after such respective dates or the right to convert, shall
not be impaired or affected adversely without the consent of such Holder.
Section 8.8 Collection Suit by Trustee. If an Event of Default described
in Section 8.1(a), (b) or (c) occurs and is continuing, the Trustee may recover
judgment in its own name and as trustee of an express trust against the Company
for the whole amount owing with respect to the Securities and the amounts
provided for in Section 9.7.
Section 8.9 Trustee May File Proofs of Claim. In case of the pendency of
any receivership, insolvency, liquidation, bankruptcy, reorganization,
arrangement, adjustment, composition or other judicial proceeding relative to
the Company or any other obligor upon the Securities or the property of the
Company or of such other obligor or their creditors, the Trustee (irrespective
of whether the principal amount, Repurchase Price, Fundamental Change Repurchase
Price, Make-Whole Premium, Liquidated Damages, if any, or interest in respect of
the Securities shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Trustee shall have made
any demand on the Company for the payment of any such amount) shall be entitled
and empowered, by intervention in such proceeding or otherwise,
48
(a) to file and prove a claim for the whole amount of the principal
amount, Repurchase Price, Fundamental Change Repurchase Price, Make-Whole
Premium, Liquidated Damages, if any or interest and to file such other
papers or documents as may be necessary or advisable in order to have the
claims of the Trustee (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its
agents and counsel or any other amounts due the Trustee under Section 9.7)
and of the Holders allowed in such judicial proceeding, and
(b) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same; and any
custodian, receiver, assignee, trustee, liquidator, sequestrator or
similar official in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Trustee and, in the event that
the Trustee shall consent to the making of such payments directly to the
Holders, to pay the Trustee any amount due 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
9.7.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof, or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.
Section 8.10 Priorities. If the Trustee collects any money pursuant to
this Article VIII, it shall pay out the money in the following order:
FIRST: to the Trustee for amounts due under Section 9.7;
SECOND: to Securityholders for amounts due and unpaid on the Securities
for the principal amount, Repurchase Price, Fundamental Change Repurchase Price,
Make-Whole Premium, Liquidated Damages, if any, or interest, or any other amount
due and owing on the Securities or to the Holders from the Company, as the case
may be, ratably, without preference or priority of any kind, according to such
amounts due and payable on the Securities; and
THIRD: the balance, if any, to the Company.
The Trustee may fix a record date and payment date for any payment to
Securityholders pursuant to this Section 8.10. At least 15 days before such
record date, the Trustee shall mail to each Securityholder and the Company a
notice that states the record date, the payment date and the amount to be paid.
Section 8.11 Undertaking for Costs. In any suit for the enforcement of any
right or remedy under this Indenture or in any suit against the Trustee for any
action taken or omitted by it as Trustee, a court in its discretion may require
the filing by any party litigant (other than the Trustee) in the suit of an
undertaking to pay the costs of the suit, and the court in its discretion may
assess reasonable costs, including reasonable attorneys' fees and expenses,
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 8.11
does not apply to a suit by the Trustee, a suit by a Holder pursuant to Section
9.7 or a suit by Holders of more than 10% in aggregate principal amount of
49
the Securities at the time outstanding. This Section 8.11 shall be in lieu of
Section 315(e) of the TIA and such Section 315(e) is hereby expressly excluded
from this Indenture, as permitted by the TIA.
Section 8.12 Waiver of Stay, Extension or Usury Laws. Each of the Company
and the Guarantors covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, or plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay or extension law or any usury or
other law wherever enacted, now or at any time hereafter in force, which would
prohibit or forgive the Company from paying all or any portion of the principal
amount or Repurchase Price, Fundamental Change Repurchase Price or Make-Whole
Premium in respect of Securities, Liquidated Damages or any interest on such
amounts, as contemplated herein, or which may affect the covenants or the
performance of this Indenture; and each of the Company and the Guarantors (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 the execution of every such power as though no such law had been enacted.
Section 8.13 Restoration of Rights and Remedies. If the Trustee or any
Holder has instituted any proceeding to enforce any right or remedy under this
Indenture and such proceeding has been discontinued or abandoned for any reason,
or has been determined adversely to the Trustee or to such Holder, then and in
every such case, subject to any determination in such proceeding, the Company,
the Trustee and the Holders shall be restored severally and respectively to
their former positions hereunder and thereafter all rights and remedies of the
Trustee and the Holders shall continue as though no such proceeding has been
instituted.
Section 8.14 Rights and Remedies Cumulative. Except as otherwise provided
with respect to the replacement or payment of mutilated, destroyed, lost or
stolen Securities in the last paragraph of Section 2.7, no right or remedy
herein conferred upon or reserved to the Trustee or to the Holders is intended
to be exclusive of any other right or remedy, and every right and remedy shall,
to the extent permitted by law, be cumulative and in addition to every other
right and remedy given hereunder or now or hereafter existing at law or in
equity or otherwise. The assertion or employment of any right or remedy
hereunder shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.
Section 8.15 Delay or Omission Not Waiver. No delay or omission of the
Trustee or of any Holder of any Security to exercise any right or remedy
accruing upon any Event of Default shall impair any right or remedy or
constitute a waiver of any such Event of Default or an acquiescence therein.
Every right and remedy given by this Article VIII or by law to the Trustee or to
the Holders may be exercised from time to time, and as often as may be deemed
expedient, by the Trustee or by the Holders, as the case may be.
50
ARTICLE IX
TRUSTEE
Section 9.1 Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise the rights and powers vested in it by this
Indenture and use the same degree of care and skill in its exercise as a
prudent Person would exercise or use under the circumstances in the
conduct of such Person's own affairs.
(b) Except during the continuance of an Event of Default:
(i) the Trustee need perform only those duties that are
specifically set forth in this Indenture and no others; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee conforming to the requirements of
this Indenture, but in the case of any such certificates or opinions
which by any provision hereof are specifically required to be
furnished to the Trustee, the Trustee shall examine the certificates
and opinions to determine whether or not they conform to the
requirements of this Indenture, but need not confirm or investigate
the accuracy of mathematical calculations or other facts stated
therein. This Section 9.1(b) shall be in lieu of Section 315(a) of
the TIA and such Section 315(a) is hereby expressly excluded from
this Indenture, as permitted by the TIA.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(i) this paragraph (c) does not limit the effect of paragraph
(b) of this Section 9.1;
(ii) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer unless it is proved that
the Trustee was negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 8.5.
Subparagraphs (c)(i), (ii) and (iii) shall be in lieu of Sections
315(d)(1), 315(d)(2) and 315(d)(3) of the TIA and such Sections 315(d)(1),
315(d)(2) and 315(d)(3) are hereby expressly excluded from this Indenture,
as permitted by the TIA.
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b), (c), (e) and (f) of this
Section 9.1.
51
(e) Subject to Section 9.1(c), the Trustee may refuse to perform any
duty or exercise any right or power or extend or risk its own funds or
otherwise incur any financial liability unless it receives indemnity
satisfactory to it against any loss, liability or expense.
(f) Money held by the Trustee in trust hereunder need not be
segregated from other funds except to the extent required by law. The
Trustee (acting in any capacity hereunder) shall be under no liability for
interest on any money received by it hereunder unless otherwise agreed in
writing with the Company.
Section 9.2 Rights of Trustee. Subject to its duties and responsibilities
under the TIA,
(a) the Trustee may conclusively rely and shall be protected in
acting or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness or
other paper or document believed by it in good faith to be genuine and to
have been signed or presented by the proper party or parties;
(b) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless
other evidence be herein specifically prescribed) may, in the absence of
bad faith on its part, conclusively rely upon an Officers' Certificate;
(c) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by
it hereunder;
(d) the Trustee shall not be liable for any action taken, suffered,
or omitted to be taken by it in good faith which it believes to be
authorized or within its rights or powers conferred under this Indenture;
(e) subject to Section 9.1(c), the Trustee may consult with counsel
selected by it and any advice or Opinion of Counsel shall be full and
complete authorization and protection in respect of any action taken or
suffered or omitted by it hereunder in good faith and in accordance with
such advice or Opinion of Counsel;
(f) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request, order or
direction of any of the Holders, pursuant to the provisions of this
Indenture, unless such Holders shall have offered to the Trustee
reasonable security or indemnity satisfactory to it against the costs,
expenses and liabilities which may be incurred therein or thereby;
(g) any request or direction of the Company mentioned herein shall
be sufficiently evidenced by an Officer's Certificate (unless other
evidence in respect thereof be herein specifically prescribed); and any
Board Resolution may be evidenced to
52
the Trustee by a copy thereof certified by the Secretary or an Assistant
Secretary of the Company;
(h) the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see fit,
and, if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and
premises of the Company, personally or by agent or attorney at the sole
cost of the Company and shall incur no liability or additional liability
of any kind by reason of such inquiry or investigation;
(i) the Trustee shall not be deemed to have notice of any Default or
Event of Default, except a Default under Section 8.1(a), (b) and (c),
unless written notice of any event which is in fact such a default is
received by the Trustee from the Company or the Holders of at least 25% of
the Securities then outstanding at the Corporate Trust Office of the
Trustee, and such notice references the Securities and this Indenture;
(j) the rights, privileges, protections, immunities and benefits
given to the Trustee, including, without limitation, its right to be
indemnified, are extended to, and shall be enforceable by, the Trustee in
each of its capacities hereunder, and to each agent, custodian and other
Person employed to act hereunder; and
(k) the Trustee may request that the Company deliver an Officers'
Certificate setting forth the names of individuals and/or titles of
officers authorized at such time to take specified actions pursuant to
this Indenture, which Officers' Certificate may be signed by any Person
authorized to sign an Officers' Certificate, including any Person
specified as so authorized in any such certificate previously delivered
and not superseded.
Section 9.3 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 Paying Agent, Registrar, Conversion Agent or
co-registrar may do the same with like rights. However, the Trustee must comply
with Section 9.10 and Section 9.11.
Section 9.4 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 or application of the proceeds from the
Securities, it shall not be responsible for any statement in any registration
statement for the Securities under the Securities Act or in any offering
document for the Securities, the Indenture or the Securities (other than its
certificate of authentication), or the determination as to which beneficial
owners are entitled to receive any notices hereunder.
Section 9.5 Notice of Defaults. If a Default occurs and if it is known to
the Trustee, the Trustee shall give to each Holder notice of the Default within
90 days after it occurs or, if later, within 15 days after it is known to the
Trustee, unless such Default shall have been cured or
53
waived before the giving of such notice. Notwithstanding the preceding sentence,
except in the case of a Default described in Section 8.1(a), (b) or (c), the
Trustee may withhold the notice if and so long as a committee of Responsible
Officers in good faith determines that withholding the notice is in the interest
of the Securityholders. The preceding sentence shall be in lieu of the proviso
to Section 315(b) of the TIA and such proviso is hereby expressly excluded from
this Indenture, as permitted by the TIA. The Trustee shall not be deemed to have
knowledge of a Default unless a Responsible Officer has received written notice
of such Default by the Company or the Holders of at least ten percent (10%) in
aggregate principal amount of the Securities then outstanding, which notice
specifically references this Indenture and the Securities.
Section 9.6 Reports by Trustee to Holders. Within 60 days after each May
15th beginning with the May 15th following the date of this Indenture, the
Trustee shall mail to each Securityholder and such others in compliance with TIA
Section 313(a) a brief report dated as of such May 15 that complies with TIA
Section 313(a), if required by such Section 313(a). The Trustee also shall
comply with TIA Section 313(b).
A copy of each report at the time of its mailing to Securityholders shall
be filed with the SEC and each securities exchange, if any, on which the
Securities are listed. The Company agrees to notify the Trustee promptly
whenever the Securities become listed on any securities exchange and of any
delisting therefrom.
Section 9.7 Compensation and Indemnity. The Company and the Guarantors
agree:
(a) to pay to the Trustee from time to time such compensation as the
Company and the Trustee shall from time to time agree in writing for all
services rendered by it hereunder (which compensation shall not be limited
(to the extent permitted by law) by any provision of law in regard to the
compensation of a trustee of an express trust);
(b) to reimburse the Trustee upon its request for all reasonable
expenses, disbursements and advances incurred or made by the Trustee in
accordance with any provision of this Indenture (including the reasonable
compensation and the expenses, advances and disbursements of its agents
and counsel), except any such expense, disbursement or advance as may be
attributable to its negligence or bad faith; and
(c) to indemnify the Trustee or any predecessor Trustee and their
agents for, and to hold them harmless against, any loss, damage, claim,
liability, cost or expense (including attorney's fees and expenses, and
taxes (other than taxes based upon, measured by or determined by the
income of the Trustee)) incurred without negligence or bad faith on its
part, arising out of or in connection with the acceptance or
administration of this trust, including the costs and expenses of
defending itself against any claim (whether asserted by the Company, a
Guarantor or any Holder or any other Person) or liability in connection
with the exercise or performance of any of its powers or duties hereunder.
To secure the Company's and the Guarantors' payment obligations in this
Section 9.7, the Trustee shall have a lien prior to the Securities on all money
or property held or collected by the Trustee, except amounts held in trust to
pay the principal amount, the Repurchase Price, the
54
Fundamental Change Repurchase Price, the Make-Whole Premium, the Liquidated
Damages, if any, or interest, as the case may be, on particular Securities.
The Company's and the Guarantors' payment obligations pursuant to this
Section 9.7 shall survive the discharge of this Indenture and the resignation or
removal of the Trustee. When the Trustee incurs expenses after the occurrence of
a Default specified in Section 8.1(i) or (j), the expenses including the
reasonable charges and expenses of its counsel, are intended to constitute
expenses of administration under any bankruptcy law.
Section 9.8 Replacement of Trustee. The Trustee may resign by so notifying
the Company and to the Holders of Securities; provided, however, no such
resignation shall be effective until a successor Trustee has accepted its
appointment pursuant to this Section 9.8. The Majority Holders may remove the
Trustee by so notifying the Trustee and the Company. The Company shall remove
the Trustee if:
(a) the Trustee fails to comply with Section 9.10;
(b) the Trustee is adjudged bankrupt or insolvent;
(c) a receiver or public officer takes charge of the Trustee or its
property; or
(d) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the office
of Trustee for any reason, the Company shall promptly appoint, by resolution of
its Board of Directors, a successor Trustee.
A successor Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the Company satisfactory in form and substance to
the retiring Trustee and the Company. Thereupon the resignation or removal of
the retiring Trustee shall become effective, and the successor Trustee shall
have all the rights, powers and duties of the Trustee under this Indenture. The
successor Trustee shall mail a notice of its succession to Securityholders. The
retiring Trustee shall promptly transfer all property held by it as Trustee to
the successor Trustee, subject to the lien provided for in Section 9.7.
If a successor Trustee does not take office within 30 days after the
retiring Trustee resigns or is removed, (i) the retiring Trustee may upon ten
Business Days' notice to the Company and the Securityholders, appoint a
successor identified in such notice, or (ii) the Trustee, the Company or the
Majority Holders may petition any court of competent jurisdiction at the expense
of the Company for the appointment of a successor Trustee.
The Majority Holders may upon removal of the Trustee nominate a successor
trustee that shall be deemed appointed as successor trustee unless, within ten
Business Days after notice to the Company of such nomination, the Company
objects thereto, in which case the Trustee so removed or any other
Securityholder, or if such Trustee so removed or any Securityholder fails to
act, the Company, upon the terms and conditions provided herein, may petition
any court of competent jurisdiction for an appointment of a successor trustee.
55
If the Trustee fails to comply with Section 9.10, any Securityholder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
No successor trustee shall accept appointment as provided in this Section
9.8 unless, at the time of such acceptance, such successor complies with Section
9.10 hereof.
Section 9.9 Successor Trustee by Merger. If the Trustee consolidates with,
merges or converts into, or transfers all or substantially all its corporate
trust business or assets to, another corporation, the resulting, surviving or
transferee corporation without any further act shall be the successor Trustee.
Section 9.10 Eligibility; Disqualification. The Trustee shall at all times
satisfy the requirements of TIA Sections 310(a)(1) and (5) and 310(b). The
Trustee (or its parent holding company) shall have a combined capital and
surplus of at least $50,000,000 as set forth in its most recent published annual
report of condition. Nothing herein contained shall prevent the Trustee from
filing with the SEC the application referred to in the penultimate paragraph of
TIA Section 310(b).
Section 9.11 Preferential Collection of Claims Against Company. The
Trustee shall comply with TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated therein.
ARTICLE X
DISCHARGE OF INDENTURE
Section 10.1 Discharge of Liability on Securities. If (i) the Company
delivers to the Trustee all outstanding Securities (other than Securities
replaced or repaid pursuant to Section 2.7) for cancellation or (ii) all
outstanding Securities shall become due and payable and, in each case, the
Company deposits with the Trustee cash sufficient to pay all amounts due and
owing on all outstanding Securities (other than Securities replaced pursuant to
Section 2.7), and if in each case the Company pays all other sums payable
hereunder by the Company or otherwise payable to the Holders in relation
thereto, then this Indenture shall, subject to Section 9.7, cease to be of
further effect. The Trustee shall join in the execution of a document prepared
by the Company acknowledging satisfaction and discharge of this Indenture on
demand of the Company accompanied by an Officers' Certificate and Opinion of
Counsel and at the cost and expense of the Company. Notwithstanding the
satisfaction and discharge of this Indenture, the obligations of the Company to
the Trustee under Section 9.7 and the obligations of the Trustee as to the
application and discharge of any funds deposited with it shall survive such
satisfaction and discharge.
Section 10.2 Repayment to the Company. The Trustee and the Paying Agent
shall return to the Company upon written request any money or securities held by
them with respect to the Securities and not applied that remains unclaimed for
two years, subject to applicable unclaimed property law. After return to the
Company, Holders entitled to the money or
56
securities must look to the Company for payment as general creditors unless an
applicable abandoned property law designates another Person and the Trustee and
the Paying Agent shall have no further liability to the Securityholders with
respect to such money or securities for that period commencing after the return
thereof.
ARTICLE XI
AMENDMENTS
Section 11.1 Without Consent of Holders. The Company, the Guarantors and
the Trustee may amend this Indenture, all (but not less than all) of the
Securities or the Subsidiary Guarantees without the consent of any
Securityholder to:
(a) add to the covenants of the Company for the benefit of the
Holders of Securities;
(b) surrender any right or power herein conferred upon the Company;
(c) provide for the assumption of the Company's or a Guarantor's
obligations to the Holders of Securities in the case of a merger,
consolidation, conveyance, transfer or lease pursuant to Article VII or
Section 13.4 hereof and in accordance with the terms of this Indenture;
(d) reduce the Conversion Price with respect to all outstanding
Securities; provided, however, that such reduction in the Conversion Price
shall be in accordance with the terms of this Indenture and shall not
adversely affect the interests of the Holders of Securities (including
after taking into account tax and other consequences of such reduction);
(e) cure any ambiguity, to correct or supplement any provision
herein which may be inconsistent with any other provision herein or which
is otherwise defective; provided, however, that such action pursuant to
this clause (e) does not adversely affect the interests of the Holders of
Securities in any material respect;
(f) add or modify any other provisions herein with respect to
matters or questions arising hereunder which the Company and the Trustee
may deem necessary or desirable and that will not adversely affect the
interests of the Holders of Securities;
(g) to add new Guarantors with respect to the Securities pursuant to
Section 5.11;
(h) add additional Events of Default; or
(i) convey, transfer, assign, mortgage or pledge to the Trustee as
security for the Securities any property or assets.
Section 11.2 With Consent of Holders. Except as provided below in this
Section 11.2, this Indenture, the Securities and the Subsidiary Guarantees may
be amended, modified or supplemented, and noncompliance in any particular
instance with any provision of this
57
Indenture, the Securities or Subsidiary Guarantees may be waived, in each case
with the written consent of the Majority Holders.
Without the written consent or the affirmative vote of each Holder of
Securities affected thereby, an amendment or waiver under this Section 11.2 may
not:
(a) change the Stated Maturity of the principal amount of, or the
date any installment of interest, or the payment of Liquidated Damages, is
due on, any Security;
(b) reduce the principal amount of, or interest, or the payment of
Liquidated Damages payable on, any Security;
(c) make any change that impairs the conversion rights of any
Securities under Article XIII;
(d) reduce the Repurchase Price, the Fundamental Change Repurchase
Price, the Optional Redemption Price, the Redemption Premium or the
Make-Whole Premium of any Security or amend or modify in any manner
adverse to the Holders of Securities the Company's obligation to make such
payments;
(e) modify the provisions of Section 4.1 in any manner adverse to
the Holders of Securities;
(f) reduce the quorum or voting requirements under this Indenture;
(g) change the currency of any amount owed or owing under the
Security or any interest thereon from U.S. Dollars;
(h) impair the right of any Holder, or the percentage of Holders
required hereunder, to institute suit or give instructions or directions
to the Trustee for the enforcement of any payment or with respect to, or
conversion of, any Security;
(i) modify any of the provisions of this Section 11.2 or Section 8.4
(Waiver of Past Defaults), except to provide that certain other provisions
of this Indenture cannot be modified or waived without the consent of the
Holder of each outstanding Security affected thereby; or
(j) reduce the percentage of the principal amount of the outstanding
Securities the consent of whose Holders is required for any such
supplemental indenture or the consent of whose Holders is required for any
waiver provided for in this Indenture.
It shall not be necessary for the consent of the Holders under this
Section 11.2 to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent approves the substance thereof.
After an amendment under this Section 11.2 becomes effective, the Company
shall mail to each Holder a notice briefly describing the amendment.
58
Section 11.3 Compliance with Trust Indenture Act. Every supplemental
indenture executed pursuant to this Article XI shall comply with the TIA.
Section 11.4 Revocation and Effect of Consents, Waivers and Actions. Until
an amendment, waiver or other action by Holders becomes effective, a consent
thereto by a Holder of a Security hereunder is a continuing consent by the
Holder and every subsequent Holder of that Security or portion of the Security
that evidences the same obligation as the consenting Holder's Security, even if
notation of the consent, waiver or action is not made on the Security. However,
any such Holder or subsequent Holder may revoke the consent, waiver or action as
to such Holder's Security or portion of the Security if the Trustee receives the
notice of revocation before the date the amendment, waiver or action becomes
effective. After an amendment, waiver or action becomes effective, it shall bind
every Securityholder.
Section 11.5 Notation on or Exchange of Securities. Securities
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article XI may, and shall if required by the Trustee, bear a
notation in form approved by the Trustee as to any matter provided for in such
supplemental indenture. If the Company shall so determine, new Securities so
modified as to conform, in the opinion of the Trustee and the Board of
Directors, to any such supplemental indenture may be prepared and executed by
the Company and authenticated and delivered by the Trustee in exchange for
outstanding Securities.
Section 11.6 Trustee to Sign Supplemental Indentures. In signing a
supplemental indenture permitted by this Article XI, the Trustee shall receive,
and (subject to the provisions of Section 9.1) shall be fully protected in
relying upon, an Officers' Certificate and an Opinion of Counsel stating that
such amendment is authorized or permitted by this Indenture. Subject to the
preceding sentence, the Trustee shall sign any supplemental indenture authorized
pursuant to this Article XI if the amendment contained therein does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
If it does, the Trustee may, but need not, sign such supplemental indenture.
Section 11.7 Effect of Supplemental Indentures. Upon the execution of any
supplemental indenture under this Article XI, this Indenture shall be modified
in accordance therewith, and such supplemental indenture shall form a part of
this Indenture for all purposes; and every Holder of Securities theretofore or
thereafter authenticated and delivered hereunder shall be bound thereby.
ARTICLE XII
SUBSIDIARY GUARANTEES
Section 12.1 Guarantee.
(a) Subject to this Article XII, each of the Guarantors hereby,
jointly and severally, fully and unconditionally guarantees to each Holder
of a Security authenticated and delivered by the Trustee and to the
Trustee and its successors and assigns, irrespective of the validity and
enforceability of the Securities or the obligations of the Company
hereunder or thereunder, that:
59
(i) the principal, the Repurchase Price, the Fundamental
Change Repurchase Price and the Optional Redemption Price of, and
the Redemption Premium, any Make-Whole Premium (only to the extent
not otherwise satisfied by the Company in other than cash in
accordance with the applicable Company Notice), Liquidated Damages,
if any, and interest on, the Securities will be promptly paid in
full when due, whether at Stated Maturity, by acceleration,
redemption, repurchase or otherwise, and interest on the overdue
principal of and interest on the Securities, if any, if lawful, and
all other cash payment obligations of the Company to the Holders or
the Trustee hereunder or thereunder will be promptly paid in full or
performed, all in accordance with the terms hereof and thereof; and
(ii) in case of any extension of time of payment or renewal of
any Securities or any of such other obligations, that same will be
promptly paid in full when due or performed in accordance with the
terms of the extension or renewal, whether at Stated Maturity, by
acceleration or otherwise;
Failing payment when due of any amount so guaranteed or any performance so
guaranteed for whatever reason, the Guarantors will be jointly and
severally obligated to pay the same immediately. Each Guarantor agrees
that this is a guarantee of payment and not a guarantee of collection. No
Guarantor shall have any obligation to guarantee the Company's performance
of its obligations under Article XIII.
(b) The Guarantors hereby agree that their obligations hereunder are
unconditional, irrespective of the validity, regularity or enforceability
of the Securities or this Indenture, the absence of any action to enforce
the same, any waiver or consent by any Holder of the Securities with
respect to any provisions hereof or thereof, the recovery of any judgment
against the Company, any action to enforce the same or any other
circumstance which might otherwise constitute a legal or equitable
discharge or defense of a Guarantor. Each Guarantor hereby waives
diligence, presentment, demand of payment, filing of claims with a court
in the event of insolvency or bankruptcy of the Company, any right to
require a proceeding first against the Company, protest, notice and all
demands whatsoever and covenant that this Subsidiary Guarantee will not be
discharged except by complete performance of the obligations contained in
the Securities and this Indenture (other than the Company's obligations
pursuant to Article XIII);
(c) If any Holder or the Trustee is required by any court or
otherwise to return to the Company, the Guarantors or any custodian,
trustee, liquidator or other similar official acting in relation to either
the Company or the Guarantors, any amount paid by either to the Trustee or
such Holder, this Subsidiary Guarantee, to the extent theretofore
discharged, will be reinstated in full force and effect.
(d) Each Guarantor agrees that it will not be entitled to exercise
any right of subrogation in relation to the Holders in respect of any
obligations guaranteed hereby until payment in full of all obligations
guaranteed hereby. Each Guarantor further agrees that, as between the
Guarantors, on the one hand, and the Holders and the Trustee, on the other
hand, (1) the maturity of the obligations guaranteed hereby may be
accelerated as
60
provided in Article VIII hereof for the purposes of this Subsidiary
Guarantee, notwithstanding any stay, injunction or other prohibition
preventing such acceleration in respect of the obligations guaranteed
hereby, and (2) in the event of any declaration of acceleration of such
obligations as provided in Article VIII hereof, such obligations (whether
or not due and payable) will forthwith become due and payable by the
Guarantors for the purpose of this Subsidiary Guarantee. The Guarantors
will have the right to seek contribution from any non-paying Guarantor so
long as the exercise of such right does not impair the rights of the
Holders under the Subsidiary Guarantee.
Section 12.2 Limitation on Guarantor Liability. Each Guarantor, and by its
acceptance of Securities, each Holder, hereby confirms that it is the intention
of all such parties that the Subsidiary Guarantee of such Guarantor not
constitute a fraudulent transfer or conveyance for purposes of Title 11, U.S.
Code or any similar federal or state law for the relief of debtors ("Bankruptcy
Law"), the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer
Act or any similar federal or state law to the extent applicable to any
Subsidiary Guarantee. To effectuate the foregoing intention, the Trustee, the
Holders and the Guarantors hereby irrevocably agree that the obligations of such
Guarantor will be limited to the maximum amount that will, after giving effect
to such maximum amount and all other contingent and fixed liabilities of such
Guarantor that are relevant under such laws, and after giving effect to any
collections from, rights to receive contribution from or payments made by or on
behalf of any other Guarantor in respect of the obligations of such other
Guarantor under this Article XII, result in the obligations of such Guarantor
under its Subsidiary Guarantee not constituting a fraudulent transfer or
conveyance.
Section 12.3 Execution and Delivery of Subsidiary Guarantee. To evidence
its Subsidiary Guarantee set forth in Section 12.1 hereof, each Guarantor hereby
agrees that a notation of such Subsidiary Guarantee substantially in the form
attached as Exhibit G hereto will be endorsed by an Officer of such Guarantor on
each Security authenticated and delivered by the Trustee and that this Indenture
will be executed on behalf of such Guarantor by one of its Officers.
Each Guarantor hereby agrees that its Subsidiary Guarantee set forth in
Section 12.1 hereof will remain in full force and effect notwithstanding any
failure to endorse on each Security a notation of such Subsidiary Guarantee.
If an Officer whose signature is on this Indenture or on the Subsidiary
Guarantee no longer holds that office at the time the Trustee authenticates the
Security on which a Security Guarantee is endorsed, the Subsidiary Guarantee
will be valid nevertheless.
The delivery of any Security by the Trustee, after the authentication
thereof hereunder, will constitute due delivery of the Subsidiary Guarantee set
forth in this Indenture on behalf of the Guarantors.
In the event that the Company creates or acquires any Domestic Subsidiary
after the date of this Indenture, if required by Section 5.11 hereof, the
Company will cause such Domestic Subsidiary to comply with the provisions of
Section 5.11 hereof and this Article XII, to the extent applicable.
61
Section 12.4 Guarantors May Consolidate, Etc. on Certain Terms. Except as
otherwise provided in Section 12.5 hereof, no Guarantor may sell or otherwise
dispose of all or substantially all of its assets to, or consolidate with or
merge with or into (whether or not such Guarantor is the surviving Person)
another Person, other than the Company or another Guarantor, unless:
(a) immediately after giving effect to such transaction, no Default
or Event of Default exists; and
(b) subject to Section 12.5 hereof, the Person acquiring the
property in any such sale or disposition or the Person formed by or
surviving any such consolidation or merger unconditionally assumes all the
obligations of that Guarantor under this Indenture and its Subsidiary
Guarantee on the terms set forth herein or therein, pursuant to a
supplemental indenture in form and substance reasonably satisfactory to
the Trustee.
In case of any such consolidation, merger, sale or conveyance and upon the
assumption by the successor Person, by supplemental indenture, executed and
delivered to the Trustee and satisfactory in form to the Trustee, of the
Subsidiary Guarantee endorsed upon the Securities and the due and punctual
performance of all of the covenants and conditions of this Indenture to be
performed by the Guarantor, such successor Person will succeed to and be
substituted for the Guarantor with the same effect as if it had been named
herein as a Guarantor. Such successor Person thereupon may cause to be signed
any or all of the Subsidiary Guarantees to be endorsed upon all of the
Securities issuable hereunder which theretofore shall not have been signed by
the Company and delivered to the Trustee. All the Subsidiary Guarantees so
issued will in all respects have the same legal rank and benefit under this
Indenture as the Subsidiary Guarantees theretofore and thereafter issued in
accordance with the terms of this Indenture as though all of such Subsidiary
Guarantees had been issued at the date of the execution hereof.
Except as set forth in Article V and Article VII hereof, and
notwithstanding clauses (a) and (b) above, nothing contained in this Indenture
or in any of the Securities will prevent any consolidation or merger of a
Guarantor with or into the Company or another Guarantor, or will prevent any
sale or conveyance of the property of a Guarantor as an entirety or
substantially as an entirety to the Company or another Guarantor.
Section 12.5 Releases.
(a) In the event of any sale or other disposition of all or
substantially all of the assets of any Guarantor, by way of merger,
consolidation or otherwise, or a sale or other disposition of all of the
Capital Stock of any Guarantor, in each case to a Person that is not
(either before or after giving effect to such transactions) the Company or
a Guarantor, then such Guarantor or the corporation acquiring the
property, as applicable, will be released and relieved of any obligations
under its Subsidiary Guarantee. Upon delivery by the Company to the
Trustee of an Officers' Certificate and an Opinion of Counsel to the
effect that such sale or other disposition was made by the Company in
accordance with the provisions of this Indenture, the Trustee will execute
any documents reasonably required in order to evidence the release of any
Guarantor from its obligations under its Subsidiary Guarantee.
62
(b) In the event that any Guarantor ceases to be a Significant
Subsidiary, such Guarantor will be released and relieved of any
obligations under its Subsidiary Guarantee immediately upon such
cessation.
(c) Upon satisfaction and discharge of this Indenture in accordance
with Article X hereof, each Guarantor will be released and relieved of any
obligations under its Subsidiary Guarantee.
Any Guarantor not released from its obligations under its Subsidiary Guarantee
as provided in this Section 12.5 will remain liable for the full amount of the
principal amount, the Repurchase Price, the Fundamental Change Repurchase Price
and the Optional Redemption Price of, and interest, any Make-Whole Premium (only
to the extent not otherwise satisfied by the Company in other than cash in
accordance with the applicable Company Notice), any Redemption Premium and any
Liquidated Damages on, the Securities and for the other obligations of any
Guarantor under this Indenture as provided in this Article XII.
ARTICLE XIII
CONVERSIONS
Section 13.1 Conversion Privilege; Limitations on Conversion.
(a) Subject to and upon compliance with the provisions of this
Article XIII, a Holder of a Security shall have the right, at such
Holder's option, at any time and from time to time, to convert all or any
portion (if the portion to be converted is $1,000 or an integral multiple
of $1,000) of the principal amount of such Security (the "Converted
Principal Amount") into a number of shares of Common Stock, equal to the
quotient of (i) the sum of (1) the Converted Principal Amount plus (2) the
Redemption Premium (or portion thereof), if any, payable in respect of
such Converted Principal Amount pursuant to the provisions of Section 6.1
and not paid in cash, divided by (ii) the Conversion Price in effect on
the date of conversion. The Conversion Price shall initially be $3.25 (the
"Conversion Price"), and shall be adjusted in certain instances as
provided in this Article XIII. In addition, pursuant to Article VI,
Holders may be entitled to a Make-Whole Premium if they elect to convert
their Securities within a Fundamental Change Conversion Period.
(b) The limitation set forth below in this Section 13.1(b) is
referred to herein as the "Xxxxxxxx Act Limitation." The Company shall not
(i) have the right to pay any amount due under this Indenture (including
the Repurchase Price, the Fundamental Change Repurchase Price, any
Make-Whole Premium and any Redemption Premium) in shares of Common Stock
or (ii) effect any conversion of any Security (and no Holder shall have
the right to convert any portion of any Security) to the extent that after
giving effect to any such payment in shares of Common Stock or conversion,
the Holder (together with the Holder's affiliates) receiving such payment
or effecting such conversion would beneficially own in excess of 4.99% of
the number of shares of Common Stock outstanding immediately after giving
effect to such payment in shares of Common Stock or such conversion. For
purposes of the foregoing sentence, the number of shares of Common Stock
beneficially owned by the Holder and its affiliates shall
63
include the number of shares of Common Stock issuable upon payments of any
amounts payable in shares of Common Stock pursuant to the terms of this
Indenture and the Securities and the number of shares issuable upon
conversion of any Security with respect to which the determination
pursuant to such sentence is being made, but shall exclude the number of
shares of Common Stock which would be issuable upon (A) conversion of the
remaining, nonconverted portion of any Security beneficially owned by the
Holder or any of its affiliates and (B) exercise or conversion of the
unexercised or nonconverted portion of any other securities of the Company
subject to a limitation on conversion or exercise analogous to the
limitation contained herein beneficially owned by the Holder or any of its
affiliates. Except as set forth in the preceding sentence, for purposes of
this Section, beneficial ownership shall be calculated in accordance with
Section 13(d) of the Exchange Act. For purposes of this Section 13.1(b),
in determining the number of outstanding shares of Common Stock, the
Holder may rely on the number of outstanding shares of Common Stock as
reflected in (x) the Company's most recent report on Form 10-K, Form 10-Q
or Form 8-K, as the case may be, (y) a more recent public announcement by
the Company or (z) any other notice by the Company (which shall be
provided upon request) setting forth the number of shares of Common Stock
outstanding. In any case, the number of outstanding shares of Common Stock
as of the date of any payment or conversion shall be determined after
giving effect to payment or conversion or exercise of securities of the
Company, including any Security, by the Holder or its affiliates since the
date as of which such number of outstanding shares of Common Stock was
reported. In order to facilitate compliance with the foregoing, each
Holder will be required, as a condition to any conversion of Securities
held by such Holder, to make a representation to the Company that such
Holder and its Affiliates shall be in compliance with the Xxxxxxxx Act
Limitation immediately after converting any Security and receipt of any
shares of Common Stock issuable upon such conversion. By written notice to
the Company, any Holder may increase or decrease the Xxxxxxxx Act
Limitation to any other percentage not in excess of 9.99% specified in
such notice; provided that (i) no such notice may be sent prior to the
second anniversary of the Issue Date, (ii) any such increase will not be
effective until the 61st day after such notice is delivered to the
Company, and (iii) any such increase or decrease will apply only to the
Holder sending such notice and not to any other holder of Securities.
Notwithstanding the foregoing, the Xxxxxxxx Act Limitation shall not be
applicable (i) on any of the ten Trading Days up to and including the
Stated Maturity, (ii) on any of the ten Trading Days up to and including
the Effective Date, or (iii) during the Fundamental Change Conversion
Period or the Redemption Conversion Period.
(c) Notwithstanding any contrary provision of this Indenture, the
following provisions shall apply (and any such contrary provisions shall
be qualified by the following provisions of this Section 13.1(c)), but
only until (and not on or after) the date on which Stockholder Approval
(as defined below) shall have been obtained:
(i) In connection with the Company's first annual meeting or
special meeting of stockholders next succeeding the Closing Date,
the Company shall (1) provide each stockholder entitled to vote at
such special or annual meeting of stockholders, a proxy statement
soliciting each such stockholder's affirmative vote for approval in
accordance with the Company's Certificate of Incorporation
64
and (if the Common Stock is then listed and admitted to trading on
the NYSE) the rules of the NYSE (such affirmative approval being
referred to as the "Stockholder Approval") of resolutions providing
for the issuance and delivery of all shares of Common Stock
(including, without limitation, shares in excess of the Exchange Cap
(as defined below)) issuable upon conversion, redemption or
repurchase of the aggregate principal amount of the Securities
issued or issuable under this Indenture or upon any election in
accordance with the terms hereof to pay any amounts due hereunder or
under the Securities in shares of Common Stock and (2) otherwise use
its best efforts to obtain the Stockholder Approval by February 24,
2005, and failing to obtain Stockholder Approval by such date, use
its best efforts to continue to seek and obtain the Stockholder
Approval at the earliest possible time thereafter. Upon receipt by
the Company of the Stockholder Approval, the Company shall deliver a
written notice thereof to the Trustee and the Paying Agent, and the
Trustee shall in turn give prompt written notice thereof to the
Holders in the manner set forth in this Indenture.
(ii) In addition to any authorized but unissued shares of
Common Stock that may be reserved for issuance upon conversion of
Securities in accordance with the provisions of this Article XIII,
the Company shall reserve for delivery upon such conversion all
Available Treasury Shares. "Available Treasury Shares" means all
shares of Common Stock held by the Company in treasury on the
Closing Date or acquired by the Company after the Closing Date and
held in treasury (other than 232,134 shares of Common Stock held in
treasury by the Company on the Closing Date and previously
reserved). If and for so long as any Available Treasury Shares
remain so held in treasury, the Company shall not (A) deliver any
such Available Treasury Shares to any Person other than Holders of
Securities, or for any purpose other than in connection with
conversion of Securities held by such Holders, or (B) issue or
deliver any shares of Common Stock (other than Available Treasury
Shares) to Holders of Securities upon conversion of such Securities.
(iii) The Company shall not issue or deliver any shares of
Common Stock in satisfaction of any obligation under this Indenture
or under the Securities (that it is otherwise entitled to deliver in
satisfaction of such obligation), other than pursuant to a
conversion by a Holder of a Security pursuant to the terms of this
Indenture.
(iv) If and only if the Stockholder Approval is not received
by March 1, 2006, liquidated damages ("Conversion Block Liquidated
Damages") shall accrue on all the issued and outstanding Securities
at the rate of 1.0% per annum (computed on the basis of a 360-day
year of twelve 30-day months) of the principal amount of such
Securities from and including March 1, 2006 until the Stated
Maturity. Conversion Block Liquidated Damages, if any, shall be
payable to the Holders semi-annually in arrears on each Interest
Payment Date, commencing on the first Interest Payment Date next
following March 1, 2006.
65
(v) The Company shall not issue or deliver shares of Common
Stock upon conversion of any Security to the extent that such
issuance of shares of Common Stock would result in the aggregate
number of shares of Common Stock issued or delivered in respect of
all conversions hereunder to exceed the Aggregate Cap. Subject to
clause (viii) and clause (ix) and to the other provisions of this
Section 13.1(c), if the preceding sentence precludes the Company
from issuing or delivering shares of Common Stock in complete
satisfaction of its obligations to convert a Security (or portion
thereof) surrendered for conversion, the Company shall settle such
conversion in cash or in a combination of cash and shares of Common
Stock (but only to the extent not prohibited by the preceding
sentence), in each case, pursuant to the provisions of Section 13.2.
(vi) "Exchange Cap" means an aggregate of 7,515,754 shares of
Common Stock, subject to adjustment as follows: In case outstanding
shares of Common Stock shall be subdivided into a greater number of
shares of Common Stock, the Exchange Cap in effect at the opening of
business on the day following the day upon which such subdivision
becomes effective shall be proportionately increased, and
conversely, in case outstanding shares of Common Stock shall be
combined into a smaller number of shares of Common Stock, the
Exchange Cap in effect at the opening of business on the day
following the day upon which such combination becomes effective
shall be proportionately reduced, such increase or reduction, as the
case may be, to become effective immediately after the opening of
business on the day following the day upon which such subdivision or
combination becomes effective.
(vii) "Aggregate Cap" means the Exchange Cap plus the number
of Available Treasury Shares.
(viii) Prior to March 1, 2006, the Company shall not convert
any Security (regardless of whether such conversion would be into
shares of Common Stock or settled for cash or any other property)
and no Holder shall have the right to convert any Security, to the
extent that effecting such conversion completely by issuing or
delivering shares of Common Stock would result in the Company
issuing or delivering shares of Common Stock in excess of the
Aggregate Cap in respect of such conversion when taken together with
all previous conversions of Securities.
(ix) On or after March 1, 2006 and prior to November 1, 2008,
if the Current Market Price (as defined in Section 13.3(g)) on any
Conversion Date is less than the Conversion Price on such Conversion
Date, then the Company shall not be required to convert any Security
into cash, and no Holder shall have the right to convert any such
Security into cash.
(x) In the event that the Company receives a Conversion Notice
from more than one Holder for the same Conversion Date and the
Company can convert into shares of Common Stock some, but not all,
of such portions of the Securities submitted for conversion, the
Company shall convert from each Holder
66
electing to have Securities converted on such date a pro rata amount
of such Holder's Securities submitted for conversion based on the
principal amount of Securities submitted for conversion on such date
relative to the aggregate principal amount of all Securities
submitted for conversion on such date.
(xi) Prior to March 1, 2006, as long as any Series A
Securities are issued and outstanding, the Company shall not convert
any Series B Security (regardless of whether such conversion would
be into shares of Common Stock or settled for cash or any other
property) and no Holder shall have the right to convert any Series B
Security.
(xii) Following the Initial Series B Conversion Date, the
maximum number of shares of Common Stock that the Company may
deliver in satisfaction of a Conversion Obligation in respect of
each $1,000 principal amount of Series B Securities shall not exceed
the Per Series B Security Allocation and the Company shall be
required to deliver cash in accordance with the provisions of
Section 13.2 in respect of the remaining portion of such Conversion
Obligation. "Initial Series B Conversion Date" shall mean the
earlier of the first date as of which no Series A Securities shall
remain outstanding and March 1, 2006. The "Per Series B Security
Allocation" shall mean a number of shares of Common Stock equal to
the product of (A) the quotient of $1,000 divided by the Conversion
Price, times (B) a fraction, the numerator of which shall be the
Series B Aggregate Cap and the denominator of which shall equal the
quotient of the aggregate principal amount of all Series B
Securities outstanding as of the applicable Conversion Date divided
by the Conversion Price. The "Series B Aggregate Cap" shall mean the
number of shares of Common Stock equal to the Aggregate Cap less the
sum of (A) all shares of Common Stock that as of the applicable
Conversion Date have been previously issued by the Company pursuant
to conversions of the Securities and (B) all shares of Common Stock
that would be deliverable upon conversion of all Series A Securities
outstanding as of the applicable Conversion Date.
Section 13.2 Conversion Procedure; Fractional Shares; Cash Settlement.
Subject to the Share Limitation and Section 13.1, each Security shall be
convertible at the office of the Conversion Agent into fully paid and
nonassessable shares (calculated to the nearest 1/100th of a share) of Common
Stock on the Conversion Date. The Security will be converted into shares of
Common Stock at the Conversion Price therefor. No payment or adjustment shall be
made in respect of dividends on the Common Stock or accrued interest on a
converted Security, except as described in Section 13.9 hereof. The Company
shall not issue any fraction of a share of Common Stock in connection with any
conversion of Securities, but instead shall make a cash payment (calculated to
the nearest cent) equal to such fraction multiplied by the Closing Price of the
Common Stock on the last Trading Day prior to the date of conversion.
Notwithstanding the foregoing, a Security in respect of which a Holder has
delivered a Repurchase Notice or Fundamental Change Repurchase Notice exercising
such Holder's option to require the Company to repurchase such Security may be
converted only if such notice of exercise is withdrawn as to such conversion
amount in accordance with Section 3.4 hereof.
67
Before any Holder of a Security shall be entitled to convert the same into
Common Stock, such Holder shall, in the case of Global Securities, comply with
the procedures of the Depositary in effect at that time, and in the case of
Certificated Securities, surrender such Securities, duly endorsed to the Company
or in blank, at the office of the Conversion Agent, and shall give written
notice ("Holder's Conversion Notice") to the Company at said office or place
that such Holder elects to convert the same and shall state in writing therein
the principal amount of Securities to be converted and the name or names (with
addresses) in which such Holder wishes the certificate or certificates for
Common Stock to be issued.
Before any such conversion, a Holder also shall pay all funds required, if
any, relating to interest on the Securities, as provided in Section 13.9, and
all taxes or duties, if any, as provided in Section 13.8.
If more than one Security shall be surrendered for conversion at one time
by the same Holder, the number of full shares of Common Stock which shall be
deliverable upon conversion shall be computed on the basis of the aggregate
principal amount of the Securities (or specified portions thereof to the extent
permitted thereby) so surrendered. Subject to the next succeeding sentence, the
Company will, as soon as practicable thereafter, issue and deliver at said
office or place to such Holder of a Security, or to such Holder's nominee or
nominees, certificates for the number of full shares of Common Stock to which
such Holder shall be entitled as aforesaid, together with cash in lieu of any
fraction of a share to which such Holder would otherwise be entitled. The
Company shall not be required to deliver certificates for shares of Common Stock
while the stock transfer books for such stock or the security register are duly
closed for any purpose, but certificates for shares of Common Stock shall be
issued and delivered as soon as practicable after the opening of such books or
security register.
A Security shall be deemed to have been converted as of the close of
business on the date of the surrender of such Securities for conversion as
provided above, and the Person or Persons entitled to receive the Common Stock
issuable upon such conversion shall be treated for all purposes as the record
Holder or Holders of such Common Stock as of the close of business on such date.
In case any Security shall be surrendered for partial conversion, the
Company shall execute and the Trustee shall authenticate and deliver to or upon
the written order of the Holder of the Security so surrendered, without charge
to such Holder (subject to the provisions of Section 13.8 hereof), a new
Security or Securities in authorized denominations in an aggregate principal
amount equal to the unconverted portion of the surrendered Securities.
In the case of a conversion during a Fundamental Change Conversion Period,
Holders electing to convert Securities shall also receive the Make-Whole Premium
payable upon such conversion as set forth in Article VI hereof. Holders may
surrender Securities for conversion at any time within the Fundamental Change
Conversion Period. In the case of a conversion during a Redemption Conversion
Period, Holders electing to convert Securities shall also receive the Redemption
Premium payable upon such conversion as set forth in Article IV and Article VI
hereof. Holders may surrender Securities for conversion at any time within the
Redemption Conversion Period.
68
Notwithstanding the foregoing, subject to the provisions of Section
13.1(c)(v), the Company, in its sole discretion, may satisfy all or any portion
of its obligation to convert the Securities (the "Conversion Obligation"), by
paying cash in lieu of issuing or delivering shares of Common Stock upon
conversion, including the Make-Whole Premium, if any. If the Company elects to
satisfy all or any portion of its Conversion Obligation in cash, the Company
shall deliver a written notice to the Trustee, who will in turn give written
notice to the Holders of the portion of the Conversion Obligation to be
satisfied in cash and the portion, if any, of the Conversion Obligation to be
satisfied in shares of Common Stock (which portions shall be expressed as a
number of shares of Common Stock), at any time on or before the date that is two
(2) Trading Days following receipt of the Holder's Conversion Notice (the "Cash
Settlement Notice Period"). If the Company timely elects to pay cash for any
portion of the Common Stock otherwise issuable to a Holder upon conversion, such
Holder may retract its Holder's Conversion Notice at any time during the six (6)
Trading Days following the final day of the Cash Settlement Notice Period (the
"Conversion Retraction Period") by delivering written notice of such retraction
to the Company and the Trustee during the Conversion Retraction Period. No such
retraction can be made (and a Holder's Conversion Notice shall be irrevocable)
if the Company does not elect to deliver cash (other than cash in lieu of
fractional shares) in lieu of all or a portion of the Common Stock otherwise to
be issued or delivered upon conversion. Upon the expiration of a Conversion
Retraction Period, a Holder's Conversion Notice shall be irrevocable. If the
Company is required to satisfy all or any portion of the Conversion Obligation
in cash, and one or more pending Conversion Notices have not been retracted,
then the Company shall deposit cash and/or shares of Common Stock sufficient to
satisfy the Conversion Obligation with the Trustee no later than the fifteenth
(15th) Trading Day following the last day of the Conversion Retraction Period.
Such settlement shall be distributed to the Holders as their interests may
appear upon surrender of their Securities.
If any portion of the Conversion Obligation is to be paid in cash, the
amount of cash (the "Cash Settlement Amount") payable in settlement of the
aggregate principal amount which will not be paid in shares of Common Stock
(such principal amount, the "Non-Stock-Converted Principal Amount") shall be
equal to the product of (a) the Non-Stock-Converted Principal Amount divided by
the Conversion Price times (b) the arithmetic average of the Closing Prices of
the Common Stock for the five (5) consecutive Trading Days following the last
day of the Conversion Retraction Period. The Company shall deliver a written
statement of the results of such calculation to the Trustee, and of any other
information relating thereto as the Trustee may reasonably request.
Section 13.3 Adjustment of Conversion Price. The Conversion Price shall be
adjusted from time to time by the Company as follows:
(a) In case the Company shall hereafter pay a dividend or make a
distribution to all Holders of the outstanding Common Stock in shares of
Common Stock, the Conversion Price in effect at the opening of business on
the date following the date fixed for the determination of stockholders
entitled to receive such dividend or other distribution shall be reduced
by multiplying such Conversion Price by a fraction, the numerator of which
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 of
which shall be the sum of such number of shares and the total number of
shares constituting
69
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. If any dividend or distribution of the type
described in this Section 13.3(a) is declared but not so paid or made, the
Conversion Price shall again be adjusted to the Conversion Price which
would then be in effect if such dividend or distribution had not been
declared.
(b) In case the Company shall issue rights or warrants to all
Holders of its outstanding shares of Common Stock entitling them (for a
period expiring within 45 days after the date fixed for determination of
stockholders entitled to receive such rights or warrants) to subscribe for
or purchase shares of Common Stock (or securities convertible into Common
Stock) at a price per share (or having a conversion price per share) less
than the Current Market Price (as defined below) on the date fixed for
determination of stockholders entitled to receive such rights or warrants,
the Conversion Price shall be adjusted so that the same shall equal the
price determined by multiplying the Conversion Price in effect immediately
prior to the date fixed for determination of stockholders entitled to
receive such rights or warrants by a fraction, the numerator of which
shall be the number of shares of Common Stock outstanding at the close of
business on the date fixed for determination of stockholders entitled to
receive such rights or warrants plus the number of shares which the
aggregate offering price of the total number of shares so offered would
purchase at such Current Market Price (or the aggregate conversion price
of the convertible securities so offered, which shall be determined by
multiplying the number of shares of Common Stock issuable upon conversion
of such convertible securities by the conversion price per share of Common
Stock pursuant to the terms of such convertible securities), and the
denominator of which shall be the number of shares of Common Stock
outstanding on the date fixed for determination of stockholders entitled
to receive such rights or warrants plus the total number of additional
shares of Common Stock offered for subscription or purchase or into which
convertible securities so offered are convertible; provided, however, the
Company may, at its option and in lieu of the foregoing adjustment, elect
to distribute or reserve for distribution the pro rata portion of such
rights or warrants so that each Holder of Securities shall receive, or
shall have the right to receive upon conversion, as the case may be, the
amount of such rights or warrants that such Holder of Securities would
have received if such Holder of Securities had converted such Securities
on the date fixed for determination of stockholders to receive such rights
or warrants. Such adjustment shall be successively made whenever any such
rights or warrants are issued, and shall become effective immediately
after the opening of business on the day following the date fixed for
determination of stockholders entitled to receive such rights or warrants.
To the extent that shares of Common Stock (or securities convertible into
Common Stock) are not delivered before the expiration of such rights or
warrants, then after the expiration of such rights or warrants the
Conversion Price shall be readjusted to the Conversion Price which would
then be in effect had the adjustments made upon the issuance of such
rights or warrants been made on the basis of delivery of only the number
of shares of Common Stock actually delivered (or the number of shares of
Common Stock issuable upon conversion of convertible securities actually
issued). In the event that such rights or warrants are not so issued, the
Conversion Price shall again be adjusted to be the Conversion Price which
would then be in effect if such date fixed for the determination of
stockholders entitled to receive such rights or warrants had not been
fixed. In
70
determining whether any rights or warrants entitle the Holders to
subscribe for or purchase shares of Common Stock at less than such Current
Market Price, and in determining the aggregate offering price of such
shares of Common Stock, there shall be taken into account any
consideration received by the Company for such rights or warrants or to be
received upon exercise of such rights or warrants, the value of such
consideration, if other than cash, to be determined in good faith by the
Board of Directors and set forth in a Board Resolution.
(c) In case outstanding shares of Common Stock shall be subdivided
into a greater number of shares of Common Stock, the Conversion Price in
effect at the opening of business on the day following the day upon which
such subdivision becomes effective shall be proportionately reduced, and
conversely, in case outstanding shares of Common Stock shall be combined
into a smaller number of shares of Common Stock, the Conversion Price in
effect at the opening of business on the day following the day upon which
such combination becomes effective shall be proportionately increased,
such reduction or increase, as the case may be, to become effective
immediately after the opening of business on the day following the day
upon which such subdivision or combination becomes effective.
(d) In case the Company shall, by dividend or otherwise, distribute
to all Holders of its Common Stock shares of any class of capital stock of
the Company (other than any dividends or distributions to which Section
13.3(a) applies) or evidences of its indebtedness or assets (including
securities, but excluding any rights or warrants referred to in Section
13.3(b), and excluding any dividend or distribution (x) paid exclusively
in cash or (y) referred to in Section 13.3(a)) (any of the foregoing
hereinafter in this Section 13.3(d) called the "Distributed Securities"),
then, in each such case, the Conversion Price shall be reduced so that the
same shall be equal to the price determined by multiplying the Conversion
Price in effect on the Record Date (as defined below) with respect to such
distribution by a fraction, the numerator of which shall be the Current
Market Price per share of the Common Stock on such Record Date less the
fair market value (as determined by the Board of Directors, whose good
faith determination shall be conclusive, and described in a resolution of
the Board if Directors) on the Record Date of the portion of the
Distributed Securities so distributed applicable to one share of Common
Stock and the denominator of which shall be the Current Market Price per
share of the Common Stock on such Record Date, such reduction to become
effective immediately prior to the opening of business on the day
following such Record Date. If the Board of Directors determines the fair
market value of any distribution for purposes of this Section 13.3(d) by
reference to the actual or when issued trading market for any securities,
it must in doing so consider the prices in such market over the same
period used in computing the Current Market Price of the Common Stock.
Each share of Common Stock issued upon conversion of securities pursuant
to this Article 13 shall be entitled to receive the appropriate number of
common stock or preferred stock purchase rights, if any, as may be
provided by the terms of any stockholder rights plan adopted by the
Company (notwithstanding the occurrence of an event causing such rights to
separate from the Common Stock at or prior to the time of conversion). Any
distribution of rights or warrants pursuant to a stockholder rights plan
complying with the requirements set forth in the immediately preceding
sentence of this paragraph shall not constitute a
71
distribution of rights or warrants for the purposes of Section 13.3(b) or
this Section 13.3(d).
Rights or warrants distributed by the Company to all holders of
Common Stock entitling the Holders thereof to subscribe for or purchase
shares of the Company's capital stock (either initially or under certain
circumstances), which rights or warrants, until the occurrence of a
specified event or events ("Trigger Event"): (i) are deemed to be
transferred with such shares of Common Stock; (ii) are not exercisable;
and (iii) are also issued in respect of future issuances of Common Stock,
shall be deemed not to have been distributed for purposes of this Section
13.3 (and no adjustment to the Conversion Price under this Section 13.3
will be required) until the occurrence of the earliest Trigger Event,
whereupon such rights and warrants shall be deemed to have been
distributed and an appropriate adjustment (if any is required) to the
Conversion Price shall be made under this Section 13.3(d). If any such
right or warrant, including any such existing rights or warrants
distributed prior to the date of this Indenture, are subject to events,
upon the occurrence of which such rights or warrants become exercisable to
purchase different securities, evidences of indebtedness or other assets,
then the date of the occurrence of any and each such event shall be deemed
to be the date of distribution and record date with respect to new rights
or warrants with such rights (and a termination or expiration of the
existing rights or warrants without exercise by any of the Holders
thereof). In addition, in the event of any distribution (or deemed
distribution) of rights or warrants, or any Trigger Event or other event
(of the type described in the preceding sentence) with respect thereto
that was counted for purposes of calculating a distribution amount for
which an adjustment to the Conversion Price under this Section 13.3 was
made, (1) in the case of any such rights or warrants which shall all have
been repurchased without exercise by any holders thereof, the Conversion
Price shall be readjusted upon such final repurchase to give effect to
such distribution or Trigger Event, as the case may be, as though it were
a cash distribution, equal to the per share repurchase price received by a
holder or holders of Common Stock with respect to such rights or warrants
(assuming such holder had retained such rights or warrants), made to all
applicable holders of Common Stock as of the date of such repurchase, and
(2) in the case of such rights or warrants which shall have expired or
been terminated without exercise by any holders thereof, the Conversion
Price shall be readjusted as if such rights and warrants had not been
issued.
For purposes of Section 13.3(a), Section 13.3(b) and this Section
13.3(d), any dividend or distribution to which this Section 13.3(d) is
applicable that also includes shares of Common Stock, or rights or
warrants to subscribe for or purchase shares of Common Stock (or both),
shall be deemed instead to be (1) a dividend or distribution of the
evidences of indebtedness, assets or shares of capital stock other than
such shares of Common Stock or rights or warrants (and any Conversion
Price reduction required by this Section 13.3(d) with respect to such
dividend or distribution shall then be made) immediately followed by (2) a
dividend or distribution of such shares of Common Stock or such rights or
warrants (and any further Conversion Price reduction required by Section
13.3(a) and Section 13.3(b) with respect to such dividend or distribution
shall then be made), except (A) the Record Date of such dividend or
distribution shall be substituted as "the date fixed for the determination
of stockholders entitled to receive
72
such dividend or other distribution" and "the date fixed for such
determination" within the meaning of Section 13.3(a) and Section 13.3(b)
and (B) any shares of Common Stock included in such dividend or
distribution shall not be deemed "outstanding at the close of business on
the date fixed for such determination" within the meaning of Section
13.3(a).
(e) In case the Company shall, by dividend or otherwise, distribute
to all Holders of its Common Stock cash (excluding any cash that is
distributed upon a merger or consolidation to which Section 13.4 applies
or as part of a distribution referred to in Section 13.3(d)), in an
aggregate amount that, combined together with (1) the aggregate amount of
any other such distributions to all Holders of its Common Stock made
exclusively in cash within the 12 months preceding the date of payment of
such distribution, and in respect of which no adjustment pursuant to this
Section 13.3(e) has been made, and (2) the aggregate of any cash plus the
fair market value (as determined by the Board of Directors, whose good
faith determination shall be conclusive and described in a resolution of
the Board of Directors) of consideration payable in respect of any tender
offer by the Company or any of its subsidiaries for all or any portion of
the Common Stock concluded within the 12 months preceding the date of
payment of such distribution, and in respect of which no adjustment
pursuant to Section 13.3(f) has been made, exceeds 12.5% of the product of
the Current Market Price on the Record Date with respect to such
distribution times the number of shares of Common Stock outstanding on
such date, then, and in each such case, immediately after the close of
business on such date, the Conversion Price shall be reduced so that the
same shall equal the price determined by multiplying the Conversion Price
in effect immediately prior to the close of business on such Record Date
by a fraction (i) the numerator of which shall be equal to the Current
Market Price on the Record Date less an amount equal to the quotient of
(x) the excess of such combined amount over such 12.5% and (y) the number
of shares of Common Stock outstanding on the Record Date and (ii) the
denominator of which shall be equal to the Current Market Price on such
date; provided, however, that in the event the portion of the cash so
distributed applicable to one share of Common Stock is equal to or greater
than the Current Market Price of the Common Stock on the Record Date, in
lieu of the foregoing adjustment, adequate provision shall be made so that
each Security holder shall have the right to receive upon conversion of a
Security (or any portion thereof) the amount of cash such Holder would
have received had such Holder converted such Security (or portion thereof)
immediately prior to such Record Date. In the event that such dividend or
distribution is not so paid or made, the Conversion Price shall again be
adjusted to be the Conversion Price which would then be in effect if such
dividend or distribution had not been declared. Any cash distribution to
all Holders of Common Stock as to which the Company makes the election
permitted by Section 13.3(m) and as to which the Company has complied with
the requirements of such Section shall be treated as not having been made
for all purposes of this Section 13.3(e).
(f) In case a tender offer made by the Company or any of its
subsidiaries for all or any portion of the Common Stock shall expire and
such tender offer (as amended upon the expiration thereof) shall require
the payment to stockholders (based on the acceptance (up to any maximum
specified in the terms of the tender offer) of Purchased Shares (as
defined below)) of an aggregate consideration having a fair market value
(as determined by the Board of Directors, whose good faith determination
shall be conclusive and described in a resolution of the Board of
Directors) that combined together with (1) the aggregate of the cash plus
the fair market value (as determined by the Board of Directors, whose good
faith determination shall be conclusive and
73
described in a resolution of the Board of Directors), as of the expiration
of such tender offer, of consideration payable in respect of any other
tender offers, by the Company or any of its subsidiaries for all or any
portion of the Common Stock expiring within the 12 months preceding the
expiration of such tender offer and in respect of which no adjustment
pursuant to this Section 13.3(f) has been made and (2) the aggregate
amount of any distributions to all Holders of the Common Stock made
exclusively in cash within 12 months preceding the expiration of such
tender offer and in respect of which no adjustment pursuant to Section
13.3(e) has been made, exceeds 12.5% of the product of the Current Market
Price as of the last time (the "Expiration Time") tenders could have been
made pursuant to such tender offer (as it may be amended) times the number
of shares of Common Stock outstanding (including any tendered shares) at
the Expiration Time, then, and in each such case, immediately prior to the
opening of business on the day after the date of the Expiration Time, the
Conversion Price shall be reduced so that the same shall equal the price
determined by multiplying the Conversion Price in effect immediately prior
to close of business on the date of the Expiration Time by a fraction of
which the numerator shall be the number of shares of Common Stock
outstanding (including any tendered shares) at the Expiration Time
multiplied by the Current Market Price of the Common Stock on the Trading
Day next succeeding the Expiration Time and the denominator shall be the
sum of (x) the fair market value (determined as aforesaid) of the
aggregate consideration payable to stockholders based on the acceptance
(up to any maximum specified in the terms of the tender offer) of all
shares validly tendered and not withdrawn as of the Expiration Time (the
shares deemed so accepted, up to any such maximum, being referred to as
the "Purchased Shares") and (y) the product of the number of shares of
Common Stock outstanding (less any Purchased Shares) at the Expiration
Time and the Current Market Price of the Common Stock on the Trading Day
next succeeding the Expiration Time, such reduction (if any) to become
effective immediately prior to the opening of business on the day
following the Expiration Time. In the event that the Company is obligated
to purchase shares pursuant to any such tender offer, but the Company is
permanently prevented by applicable law from effecting any such purchases
or all such purchases are rescinded, the Conversion Price shall again be
adjusted to be the Conversion Price which would then be in effect if such
tender offer had not been made. If the application of this Section 13.3(f)
to any tender offer would result in an increase in the Conversion Price,
no adjustment shall be made for such tender offer under this Section
13.3(f). Any cash distribution to all holders of Common Stock as to which
the Company has made the election permitted by Section 13.3(m) and as to
which the Company has complied with the requirements of such Section shall
be treated as not having been made for all purposes of this Section
13.3(f).
(g) For purposes of this Section 13.3, the following terms shall
have the meaning indicated:
(i) "Closing Price" with respect to any securities on any day
shall mean the closing sale price, regular way, on such day or, in
case no such sale takes place on such day, the average of the
reported closing bid and asked prices,
74
regular way, in each case on the principal national securities
exchange or quotation system on which such security is quoted or
listed or admitted to trading, or, if not quoted or listed or
admitted to trading on any national securities exchange or quotation
system, the average of the closing bid and asked prices of such
security on the over-the-counter market on the day in question as
reported by the National Quotation Bureau Incorporated, or a similar
generally accepted reporting service, or if not so available, in
such manner as furnished by any NYSE member firm selected from time
to time by the Board of Directors for that purpose, or a price
determined in good faith by the Board of Directors whose
determination shall be conclusive.
(ii) "Current Market Price" shall, for the purposes of any
computation under paragraphs (b), (d), (e) and (f) of this Section
13.3 relating to the current market price per share of Common Stock
at a specified date, mean the average of the Closing Prices for the
10 consecutive Trading Days (as defined below) preceding the day
before the record date (or, if earlier, the ex-dividend date) with
respect to any distribution, issuance or other event requiring such
computation.
(iii) "fair market value" shall mean the amount which a
willing buyer would pay a willing seller in an arm's length
transaction.
(iv) "Record Date" shall mean, with respect to any dividend,
distribution or other transaction or event in which the holders of
Common Stock have the right to receive any cash, securities or other
property or in which the Common Stock (or other applicable security)
is exchanged for or converted into any combination of cash,
securities or other property, the date fixed for determination of
stockholders entitled to receive such cash, securities or other
property (whether such date is fixed by the Board of Directors or by
statute, contract or otherwise).
(h) The Company may make such reductions in the Conversion Price, in
addition to those required by paragraphs (a), (b), (c), (d), (e) or (f) of
this Section 13.3, as the Board of Directors considers to be advisable to
avoid or diminish any income tax to Holders of Common Stock or rights to
purchase Common Stock resulting from any dividend or distribution of stock
(or rights to acquire stock) or from any event treated as such for income
tax purposes. To the extent permitted by applicable law, the Company from
time to time may reduce the Conversion Price by any amount for any period
of time if the period is at least 20 days, the reduction is irrevocable
during the period and the Board of Directors shall have made a
determination that such reduction would be in the best interests of the
Company, which determination shall be conclusive. Whenever the Conversion
Price is reduced pursuant to the preceding sentence, the Company shall
mail to Holders of record of the Securities a notice of the reduction at
least 15 days prior to the date the reduced Conversion Price takes effect,
and such notice shall state the reduced Conversion Price and the period
during which it will be in effect.
(i) No adjustment in the Conversion Price shall be required unless
such adjustment would require an increase or decrease of at least 1% in
such price; provided,
75
however, that any adjustments which by reason of this Section 13.3(i) are
not required to be made shall be carried forward and taken into account in
making the first subsequent adjustment made following the event which did
not result in an adjustment by reason of this Section 13.3(i). All
calculations under this Article XIII shall be made by the Company and
shall be made to the nearest cent or to the nearest one-hundredth of a
share, as the case may be. No adjustment need be made for rights to
purchase Common Stock pursuant to a Company plan for reinvestment of
dividends or interest. To the extent the Securities become convertible
into cash, assets, property or securities (other than capital stock of the
Company), no adjustment need be made thereafter as to the cash, assets,
property or such securities. Interest will not accrue on the cash.
(j) Whenever the Conversion Price is adjusted as herein provided,
the Company shall promptly file with the Conversion Agent an Officers'
Certificate setting forth the Conversion Price after such adjustment and
setting forth a brief statement of the facts requiring such adjustment.
Unless and until a Responsible Officer of the Trustee shall have received
such Officers' Certificate, the Trustee shall not be deemed to have
knowledge of any adjustment of the Conversion Price and may assume without
inquiry that the last Conversion Price of which it has knowledge is still
in effect. Promptly after delivery of such certificate, the Company shall
prepare a notice of such adjustment of the Conversion Price setting forth
the adjusted Conversion Price and the date on which each adjustment
becomes effective and shall mail such notice of such adjustment of the
Conversion Price to each Holder of Securities at such Holder's last
address appearing on the list of Security holders provided for in Section
2.5 of this Indenture, within 20 days after execution thereof. Failure to
deliver such notice shall not affect the legality or validity of any such
adjustment.
(k) In any case in which this Section 13.3 provides that an
adjustment shall become effective immediately after a Record Date for an
event, the Company may defer until the occurrence of such event (i)
issuing to the Holder of any Securities converted after such Record Date
and before the occurrence of such event the additional shares of Common
Stock issuable upon such conversion by reason of the adjustment required
by such event over and above the Common Stock issuable upon such
conversion before giving effect to such adjustment and (ii) paying to such
Holder any amount in cash in lieu of any fractional shares pursuant to
Section 13.2.
(l) For purposes of this Section 13.3, the number of shares of
Common Stock at any time outstanding shall not include shares held in the
treasury of the Company but shall include shares issuable in respect of
scrip certificates issued in lieu of fractions of shares of Common Stock.
The Company will not pay any dividend or make any distribution on shares
of Common Stock held in the treasury of the Company.
(m) In lieu of making any adjustment to the Conversion Price
pursuant to Section 13.3(e) or Section 13.3(f), the Company may elect to
reserve an amount of cash for distribution to the Holders of the
Securities upon the conversion of the Securities so that any such Holder
converting Securities will receive upon such conversion, in addition to
the shares of Common Stock and other items to which such Holder is
entitled, the full amount of cash which such Holder would have received if
such Holder had, immediately
76
prior to the Record Date for such distribution of cash or the Expiration
Time of the tender offer, as the case may be, converted its Securities
into Common Stock, together with any interest accrued with respect to such
amount, in accordance with this Section 13.3(m). The Company may make such
election by providing an Officers' Certificate to the Trustee to such
effect on or prior to the payment date for any such distribution and
depositing with the Trustee on or prior to such date an amount of cash
equal to the aggregate amount the Holders of the Securities would have
received if such Holders had, immediately prior to the Record Date for
such distribution or the Expiration Time, as the case may be, converted
all of the Securities into Common Stock. Any such funds so deposited by
the Company with the Trustee shall be invested by the Trustee pursuant to
written direction by the Company in marketable obligations issued or fully
guaranteed by the United States government with a maturity not more than 3
months from the date of issuance. Upon conversion of Securities by a
Holder, the Holder will be entitled to receive, in addition to the Common
Stock issuable upon conversion, an amount of cash equal to the amount such
Holder would have received if such Holder had, immediately prior to the
Record Date for such distribution or the Expiration Time, as the case may
be, converted its Security into Common Stock, along with such Holder's pro
rata share of any accrued interest earned as a consequence of the
investment of such funds. Promptly after making an election pursuant to
this Section 13.3(m), the Company shall give or shall cause to be given
notice to all Security holders of such election, which notice shall state
the amount of cash per $1,000 principal amount of Securities such Holders
shall be entitled to receive (excluding interest) upon conversion of the
Securities as a consequence of the Company having made such election.
Section 13.4 Consolidation or Merger of the Company.
If any of the following events occurs, namely:
(a) any reclassification or change of the outstanding Common Stock
(other than a change in par value, or from par value to no par value, or
from no par value to par value, or as a result of a subdivision or
combination);
(b) any merger, consolidation, statutory share exchange or
combination of the Company with another corporation as a result of which
holders of Common Stock shall be entitled to receive stock, securities or
other property or assets (including cash) with respect to or in exchange
for such Common Stock; or
(c) any sale or conveyance of the properties and assets of the
Company as, or substantially as, an entirety to any other corporation as a
result of which holders of Common Stock shall be entitled to receive
stock, securities or other property or assets (including cash) with
respect to or in exchange for such Common Stock;
the Company or the successor or purchasing corporation, as the case may be,
shall execute with the Trustee a supplemental indenture (which shall comply with
the Trust Indenture Act as in force at the date of execution of such
supplemental indenture, if such supplemental indenture is then required to so
comply) providing that such Securities shall be convertible into the kind and
amount of shares of stock and other securities or property or assets (including
cash) which such
77
Holder would have been entitled to receive upon such reclassification, change,
merger, consolidation, statutory share exchange, combination, sale or conveyance
had such Securities been converted into Common Stock immediately prior to such
reclassification, change, merger, consolidation, statutory share exchange,
combination, sale or conveyance assuming such holder of Common Stock did not
exercise its rights of election, if any, as to the kind or amount of securities,
cash or other property receivable upon such merger, consolidation, statutory
share exchange, sale or conveyance (provided, however, that if the kind or
amount of securities, cash or other property receivable upon such merger,
consolidation, statutory share exchange, sale or conveyance is not the same for
each share of Common Stock in respect of which such rights of election shall not
have been exercised ("Non-Electing Share"), then for the purposes of Section
13.3, the kind and amount of securities, cash or other property receivable upon
such merger, consolidation, statutory share exchange, sale or conveyance for
each Non-Electing Share shall be deemed to be the kind and amount so receivable
per share by a plurality of the Non-Electing Shares). Such supplemental
indenture shall provide for adjustments which shall be as nearly equivalent as
may be practicable to the adjustments provided for in this Article XIII. If, in
the case of any such reclassification, change, merger, consolidation, statutory
share exchange, combination, sale or conveyance, the stock or other securities
and assets receivable thereupon by a holder of Common Stock includes shares of
stock or other securities and assets of a corporation other than the successor
or purchasing corporation, as the case may be, in such reclassification, change,
merger, consolidation, statutory share exchange, combination, sale or
conveyance, then such supplemental indenture shall also be executed by such
other corporation and shall contain such additional provisions to protect the
interests of the Holders of the Securities as the Board of Directors shall
reasonably consider necessary by reason of the foregoing, including to the
extent practicable the provisions providing for the conversion rights set forth
in this Article XIII.
The Company shall cause notice of the execution of such supplemental
indenture to be mailed to each Holder, at the address of such Holder as it
appears on the register of the Securities maintained by the Registrar, within 20
days after execution thereof. Failure to deliver such notice shall not affect
the legality or validity of such supplemental indenture.
The above provisions of this Section 13.4 shall similarly apply to
successive reclassifications, mergers, consolidations, statutory share
exchanges, combinations, sales and conveyances. If this Section 13.4 applies to
any event or occurrence, Section 13.3 shall not apply.
Section 13.5 Notice of Adjustment.
Whenever an adjustment in the Conversion Price with respect to the
Securities is required:
(a) the Company shall forthwith place on file with the Trustee and
any Conversion Agent for such securities a certificate of the Treasurer of
the Company, stating the adjusted Conversion Price determined as provided
herein and setting forth in reasonable detail such facts as shall be
necessary to show the reason for and the manner of computing such
adjustment; and
78
(b) a notice stating that the Conversion Price has been adjusted and
setting forth the adjusted Conversion Price shall forthwith be given by
the Company or, at the Company's request, by the Trustee in the name and
at the expense of the Company, to each Holder in the manner provided in
Section 14.2. Any notice so given shall be conclusively presumed to have
been duly given, whether or not the Holder receives such notice.
Section 13.6 Notice in Certain Events.
In case:
(a) of a consolidation or merger to which the Company is a party and
for which approval of any stockholders of the Company is required, or of
the sale or conveyance to another Person or entity or group of Persons or
entities acting in concert as a partnership, limited partnership,
syndicate or other group (within the meaning of Rule 13d-3 under the
Securities Exchange Act of 1934, as amended) of all or substantially all
of the property and assets of the Company; or
(b) of the voluntary or involuntary dissolution, liquidation or
winding up of the Company; or
(c) of any action triggering an adjustment of the Conversion Price
referred to in clauses (x) or (y) below;
then, in each case, the Company shall cause to be filed with the Trustee and the
Conversion Agent, and shall cause to be given, to the Holders of the Securities
in the manner provided in Section 14.2, at least 15 days prior to the applicable
date hereinafter specified, a notice stating (x) the date on which a record is
to be taken for the purpose of any distribution or grant of rights or warrants
triggering an adjustment to the Conversion Price pursuant to this Article XIII,
or, if a record is not to be taken, the date as of which the holders of record
of Common Stock entitled to such distribution, rights or warrants are to be
determined, or (y) the date on which any reclassification, consolidation,
merger, sale, conveyance, dissolution, liquidation or winding up triggering an
adjustment to the Conversion Price pursuant to this Article XIII is expected to
become effective, and the date as of which it is expected that holders of Common
Stock of record shall be entitled to exchange their Common Stock for securities
or other property deliverable upon such reclassification, consolidation, merger
sale, conveyance, dissolution, liquidation or winding up.
Failure to give such notice or any defect therein shall not affect the
legality or validity of the proceedings described in clause (a), (b) or (c) of
this Section 13.6.
Section 13.7 Company To Reserve Stock. The Company shall, in accordance
with the laws of the State of Delaware, at all times reserve and keep available,
free from preemptive rights, out of its authorized but unissued shares of Common
Stock, for the purpose of effecting the conversion of the Securities, such
number of its duly authorized shares of Common Stock as shall from time to time
be sufficient to effect the conversion of all Securities then outstanding into
such Common Stock at any time; provided, however, that nothing contained herein
shall preclude the Company from satisfying its obligations in respect of the
conversion of the
79
Securities by delivery of purchased shares of Common Stock which are then held
in the treasury of the Company. The Company covenants that all shares of Common
Stock which may be issued upon conversion of Securities will upon issue be fully
paid and nonassessable and free from all liens and charges arising by, through
or under the Company, and, except as provided in Section 13.8, taxes with
respect to the issue thereof.
Section 13.8 Taxes on Conversion. The issue of stock certificates on
conversion of Securities shall be made without charge to the converting Holder
for any documentary, stamp or similar issue or transfer taxes in respect of the
issue thereof, and the Company shall pay any and all documentary, stamp or
similar issue or transfer taxes that may be payable in respect of the issue or
delivery of shares of Common Stock on conversion of Securities pursuant hereto.
The Company shall not, however, be required to pay any such tax which may be
payable in respect of any transfer involved in the issue or delivery of shares
of Common Stock or the portion, if any, of the Securities which are not so
converted in a name other than that in which the Securities so converted were
registered, and no such issue or delivery shall be made unless and until the
Person requesting such issue has paid to the Company the amount of such tax or
has established to the satisfaction of the Company that such tax has been paid.
Section 13.9 Conversion After Record Date. Except as provided in the next
succeeding paragraph of this Section 13.9 and in the proviso to this sentence,
upon surrender of Securities for conversion, the Holder of such Securities shall
not be entitled to receive any interest that has accrued on such Securities
since the prior Interest Payment Date; provided, however, that (a) if any
Securities are surrendered for conversion during a Fundamental Change Conversion
Period, then the Holder thereof shall be entitled to receive all interest that
has accrued on such Securities since the prior Interest Payment Date until the
Effective Date of the applicable Fundamental Change and (b) if any Securities
are surrendered for conversion during a Redemption Conversion Period, then the
Holder thereof shall be entitled to receive all interest that has accrued on
such Securities since the prior Interest Payment Date until the Redemption Date
immediately following the Redemption Conversion Period. Except as set forth in
the proviso to the preceding sentence, by delivery to the Holder of the number
of shares of Common Stock or other consideration issuable upon conversion in
accordance with this Article XIII, any accrued and unpaid interest on such
Securities will be deemed to have been paid in full.
If any Securities are surrendered for conversion subsequent to the record
date preceding an Interest Payment Date but on or prior to such Interest Payment
Date, the Holder of such Securities at the close of business on such record date
shall receive the interest payable on such Securities on such Interest Payment
Date notwithstanding the conversion thereof. Securities surrendered for
conversion during the period from the close of business on any record date
preceding any Interest Payment Date to the opening of business on such Interest
Payment Date shall, unless the Securities being converted (a) have been called
for redemption during such period or on such Interest Payment Date or (b) are
being converted during a Fundamental Change Conversion Period, be accompanied by
payment by the Holders thereof, for the account of the Company, of an amount
equal to the interest payable on such Interest Payment Date on the Securities
being surrendered for conversion. Except as provided in this Section 13.9, no
adjustments in respect of payments of interest on Securities surrendered for
conversion or any dividends or distributions or interest on the Common Stock
issued upon conversion shall be made upon the conversion of any Securities.
80
Section 13.10 Responsibility of Trustee for Conversion Provisions. The
Trustee has no duty to determine when an adjustment under this Article XIII
should be made, how it should be made or what it should be. The Trustee has no
duty to determine whether a supplemental indenture under Section 13.4 need be
entered into or whether any provisions of any supplemental indenture are
correct. The Trustee makes no representation as to the validity or value of any
securities or assets issued upon conversion of Securities. The Trustee shall not
be responsible for any failure of the Company to comply with this Article XIII.
Each Conversion Agent other than the Company shall have the same protection
under this Section 13.10 as the Trustee.
The rights, privileges, protections, immunities and benefits given to the
Trustee under the Indenture including, without limitation, its rights to be
indemnified, are extended to, and shall be enforceable by, the Trustee in each
of its capacities hereunder, and each Paying Agent or Conversion Agent acting
hereunder.
Section 13.11 Unconditional Right of Holders to Convert. Notwithstanding
any other provision in this Indenture, the Holder of any Security shall have the
right, which is absolute and unconditional, to convert its Security in
accordance with this Article XIII and to bring an action for the enforcement of
any such right to convert, and such rights shall not be impaired or affected
without the consent of such Holder.
Section 13.12 Common Stock Restricted Securities Legends. Unless such
Common Stock has been sold or otherwise transferred pursuant to a registration
statement that has been declared effective under the Securities Act or is
eligible for resale pursuant to Rule 144(k), each stock certificate representing
Common Stock issued upon conversion of the Securities will bear the legend set
forth on Exhibit F hereto (the "Common Stock Restricted Securities Legend"). The
Common Stock Restricted Securities Legend may be removed from any stock
certificate representing shares of the Common Stock issued upon conversion of
any Security only if there is delivered to the Company such satisfactory
evidence, which shall include an Opinion of Counsel, as may be reasonably
required by the Company and the transfer agent for the Common Stock, that
neither the Common Stock Restricted Securities Legend nor the restrictions on
transfer set forth therein are required to ensure that transfers thereof comply
with the provisions of Rule 144A or Rule 144 or that such shares of Common Stock
are not "restricted" within the meaning of Rule 144. Upon provision of such
satisfactory evidence, at the written direction of the Company, the transfer
agent for the Common Stock shall authenticate and deliver in exchange for the
stock certificate or stock certificates representing such shares of Common Stock
bearing such legend, one or more new stock certificates representing a like
aggregate number of shares of Common Stock that do not bear such legend. If the
Common Stock Restricted Securities Legend has been removed from a stock
certificate representing shares of the Common Stock issued upon conversion of
any Security as provided above, no other stock certificates representing shares
of the Common Stock issued upon conversion of such Security shall bear such
legend, unless the Company has reasonable cause to believe that such shares of
Common Stock are "restricted securities" within the meaning of Rule 144.
81
ARTICLE XIV
MISCELLANEOUS
Section 14.1 Trust Indenture Act Controls. If any provision of this
Indenture limits, qualifies, or violates another provision which is required to
be included in this Indenture by the TIA, the required provision shall control.
Section 14.2 Notices. Any request, demand, authorization, notice, waiver,
consent or communication shall be in writing and delivered in person or mailed
by first-class mail, postage prepaid, addressed as follows or transmitted by
facsimile transmission (confirmed by guaranteed overnight courier) to the
following facsimile numbers:
if to the Company and/or any Guarantor:
Integrated Electrical Services, Inc.
0000 Xxxx Xxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000-0000
Attention: Chief Financial Officer
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
with a copy (which shall not constitute notice) to:
Xxxxxxx Xxxxx LLP
000 Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxx 00000-0000
Attention: G. Xxxxxxx X'Xxxxx, Esq.
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
if to the Trustee:
The Bank of New York
101 Xxxxxxx St., 0xx Xxxxx Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Services
Facsimile.: (000) 000-0000
Telephone: (000) 000-0000
The Company, any Guarantor or the Trustee by notice given to the other in
the manner provided above may designate additional or different addresses for
subsequent notices or communications.
Any notice or communication given to a Securityholder shall be mailed to
the Securityholder, by first-class mail, postage prepaid, at the
Securityholder's address as it appears
82
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 received by the addressee.
If the Company mails a notice or communication to the Securityholders, it
shall mail a copy to the Trustee and each Registrar, Paying Agent, Conversion
Agent or co-registrar.
Section 14.3 Communication 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 Trustee
shall comply with TIA Section 312(b) relating to Securityholder communications.
The Company, the Trustee, the Registrar, the Paying Agent, the Conversion Agent
and anyone else shall have the protection of TIA Section 312(c).
Section 14.4 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:
(a) an Officers' Certificate stating that, in the opinion of the
signers, all conditions precedent, if any, provided for in this Indenture
relating to the proposed action have been complied with; or
(b) an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent have been complied with.
Section 14.5 Statements Required in Certificate or Opinion. Except as
otherwise herein provided, each Officers' Certificate or Opinion of Counsel with
respect to compliance with a covenant or condition provided for in this
Indenture shall include:
(a) a statement that each Person making such Officers' Certificate
or Opinion of Counsel has read such covenant or condition;
(b) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
Officers' Certificate or Opinion of Counsel are based;
(c) a statement that, in the opinion of each such Person, he has
made such examination or investigation as is reasonably necessary to
enable such Person to express an informed opinion as to whether or not
such covenant or condition has been complied with; and
(d) a statement that, in the opinion of such Person, such covenant
or condition has been complied with.
83
Section 14.6 Separability Clause. 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.
Section 14.7 Rules by Trustee, Paying Agent, Conversion Agent and
Registrar. The Trustee may make reasonable rules for action by or a meeting of
Securityholders. The Registrar, the Conversion Agent and the Paying Agent may
make reasonable rules for their functions.
Section 14.8 Governing Law. THIS INDENTURE, THE SECURITIES AND THE
SUBSIDIARY GUARANTEES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK.
Section 14.9 No Recourse Against Others. A director, officer, employee,
stockholder, member, manager, limited partner or general partner (and their
respective Affiliates, other than the Company or any Guarantor), as such, of the
Company or any Guarantor shall not have any liability for any obligations of the
Company under the Securities, Subsidiary Guarantees or this Indenture or for any
claim based on, in respect of or by reason of such obligations or their
creation. By accepting a Security, each Securityholder shall waive and release
all such liability. The waiver and release shall be part of the consideration
for the issue of the Securities.
Section 14.10 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. All agreements of each Guarantor in
this Indenture will bind its successors, except as otherwise provided in Section
9.5 hereof.
Section 14.11 Multiple Originals. The parties may sign any number of
copies of this Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement. One signed copy is enough to prove this
Indenture.
Section 14.12 Designated Senior Indebtedness. The Company hereby
designates all of the Securities as Designated Senior Indebtedness for purposes
of the Indenture dated as of January 28, 1999 under which the Company's 9-3/8%
Senior Subordinated Notes, Series A and Series B, due 2009 are issued and for
purposes of the Indenture dated as of May 29, 2001 under which the Company's
9-3/8% Senior Subordinated Notes, Series A and Series B, due 2009 are issued.
(Signature Pages Follow)
84
IN WITNESS WHEREOF, the undersigned, being duly authorized, have executed
this Indenture on behalf of the respective parties hereto as of the date first
above written.
COMPANY:
INTEGRATED ELECTRICAL SERVICES, INC.
By: /s/ Xxxxxxx X. Xxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Chief Executive Officer
[SIGNATURE PAGE TO INDENTURE]
GUARANTORS:
EACH OF THE GUARANTORS NAMED ON SCHEDULE
I HERETO
By: /s/ Xxxxxxx X. Xxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxx
Acting in his capacity as (i) the Chief
Executive Officer of the Guarantors
listed in Part I of Schedule I and (ii)
Sole Manager and Chief Executive Officer
of the general partner of each of the
Guarantors listed in Part II of Schedule
I (such general partners acting on
behalf of such Guarantors).
By: /s/ Xxxxxx Xxxx
---------------------------------
Name: Xxxxxx Xxxx
Acting in his capacity as the President
of the Guarantors listed in Part III of
Schedule I.
By: /s/ Xxxx Xxxx
---------------------------------
Name: Xxxx Xxxx
Acting in his capacity as the Manager of
the Guarantors listed in Part IV of
Schedule I.
[SIGNATURE PAGE TO INDENTURE]
THE BANK OF NEW YORK,
a New York banking corporation,
as Trustee
By: /s/ Xxxx X. Xxxxx
---------------------------------
Name: Xxxx X. Xxxxx
Title: Vice President
[SIGNATURE PAGE TO INDENTURE]
SCHEDULE I
EXISTING GUARANTORS
PART I:
NAME
Pan American Electric, Inc.
Xxxxxxx-Xxxxxxxx Electric Holdings III, Inc.
Xxxxx Electrical Contractors, Inc.
PART II:
NAME GENERAL PARTNER
Xxxxxxx-Xxxxxxxx Electrical Contractors XX Xxxxxxx-Xxxxxxxx Management LLC,
an Arizona limited liability
company
Xxxxx Electric XX Xxxxx Management LLC, an Arizona
limited liability company
PART III:
NAME
Xxxxxxx-Xxxxxxxx Holdings LLC
Xxxxx Electrical Holdings LLC
PART IV:
NAME
Xxxxxxx-Xxxxxxxx Holdings II LLC
Xxxxx Electrical Holdings II LLC
EXHIBIT A
[FORM OF FACE OF GLOBAL SECURITY]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY 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 IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS TO NOMINEES OF
THE DEPOSITORY TRUST COMPANY, OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S
NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO
TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN Article II OF
THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.
THE SECURITY EVIDENCED BY THIS CERTIFICATE AND ANY SHARES OF COMMON STOCK
ISSUABLE UPON THE CONVERSION OF THIS SECURITY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR ANY STATE
SECURITIES LAWS, AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED EXCEPT AS
SET FORTH IN THE FOLLOWING SENTENCE. BY ACQUISITION HEREOF, THE HOLDER:
(1) REPRESENTS THAT IT IS (A) A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT (A "QIB"); (B) AN INSTITUTIONAL "ACCREDITED
INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2), (3) OR (7) OF REGULATION D UNDER
THE SECURITIES ACT) (AN "IAI"); OR (C) NOT A U.S. PERSON AND IS ACQUIRING THIS
SECURITY IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE
SECURITIES ACT;
(2) AGREES THAT (I) IT WILL NOT, PRIOR TO THE EXPIRATION OF THE HOLDING PERIOD
APPLICABLE UNDER RULE 144(k) (TAKING INTO ACCOUNT THE PROVISIONS OF RULE 144(d)
UNDER THE SECURITIES ACT, IF APPLICABLE) UNDER THE SECURITIES ACT AS IN EFFECT
ON THE DATE OF THE TRANSFER OF THIS SECURITY, RESELL OR OTHERWISE TRANSFER THIS
SECURITY EXCEPT (A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, (B) TO A PERSON
WHOM SUCH SELLER REASONABLY BELIEVES TO BE A QIB PURCHASING FOR ITS OWN ACCOUNT
OR FOR THE ACCOUNT OF A QIB IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES
ACT, (C) TO PERSONS OTHER THAN U.S. PERSONS OUTSIDE THE UNITED STATES IN AN
OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT,
(D) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE
SECURITIES ACT (IF AVAILABLE), (E) TO A PERSON WHOM SUCH SELLER REASONABLY
BELIEVES TO BE AN IAI OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT, SUBJECT TO THE OBLIGATION OF SUCH HOLDER TO FURNISH
THE COMPANY AND THE TRUSTEE SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER
INFORMATION AS MAY BE REQUIRED PURSUANT TO THE INDENTURE AND, IN EACH CASE, IN
ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS, AND (II) IT WILL, AFTER THE
EXPIRATION OF THE HOLDING PERIOD REFERRED TO UNDER RULE 144(k) (TAKING INTO
ACCOUNT THE PROVISIONS OF RULE 144(d) UNDER THE SECURITIES ACT, IF APPLICABLE)
UNDER THE SECURITIES ACT AS IN EFFECT ON THE DATE OF THE TRANSFER OF THIS
SECURITY, PROVIDE A REPRESENTATION TO THE COMPANY THAT IT HAS HELD THE SECURITY
EVIDENCED BY THIS CERTIFICATE FOR A PERIOD OF TWO YEARS AND IS NOT AN AFFILIATE
(AS SUCH TERM IS DEFINED IN RULE 144 UNDER THE SECURITIES ACT) PRIOR TO ANY
RESALE OR TRANSFER OF THIS SECURITY;
A-1
(3) AGREES THAT IT WILL NOTIFY EACH PERSON TO WHOM THIS SECURITY OR AN INTEREST
HEREIN IS TRANSFERRED (OTHER THAN A TRANSFER PURSUANT TO CLAUSE (2)(I)(F) ABOVE)
OF THE RESALE RESTRICTIONS CONTAINED IN THIS LEGEND;
AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S.
PERSON" HAVE THE MEANING GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.
THE INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER
ANY TRANSFER OF THIS SECURITY IN VIOLATION OF THE FOREGOING RESTRICTIONS.
THE FOREGOING LEGEND MAY BE REMOVED FROM THIS SECURITY ON SATISFACTION OF THE
CONDITIONS SPECIFIED IN THE INDENTURE.
A-2
INTEGRATED ELECTRICAL SERVICES, INC.
[Series A] [Series B] 6.5% Senior Convertible Notes due 2014
No. CUSIP: ________
Issue Date: ________ __, 20__ Principal Amount: $
INTEGRATED ELECTRICAL SERVICES, INC., a Delaware corporation, promises to
pay to ______________________ or registered assigns, the principal amount of
______________________ DOLLARS ($_____________) on November 1, 2014.
Interest Payment Dates: May 1 and November 1, commencing May 1, 2005.
Record Dates: April 15 and October 15.
Reference is hereby made to the further provisions of this Security set
forth on the reverse side of this Security, which further provisions shall for
all purposes have the same effect as if set forth at this place.
The Company hereby designates this Security as "Designated Senior
Indebtedness" for purposes of the Indenture dated as of January 28, 1999 under
which the Company's 9-3/8% Senior Subordinated Notes, Series A and Series B, due
2009 are issued and for purposes of the Indenture dated as of May 29, 2001 under
which the Company's 9-3/8% Senior Subordinated Notes, Series A and Series B, due
2009 are issued.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
Dated: ________ __, 20__ INTEGRATED ELECTRICAL SERVICES, INC.
By: _______________________________________
Title: ____________________________________
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
THE BANK OF NEW YORK, a New York banking corporation, as Trustee, certifies that
this is one of the Securities referred to in the within-mentioned Indenture.
By __________________________________
Authorized Signatory
Dated: ________ __, 20__
A-3
[FORM OF REVERSE OF GLOBAL SECURITY]
[Series A] [Series B] 6.5% Senior Convertible Notes due 2014
This Security is one of a duly authorized issue of [Series A] [Series B]
6.5% Senior Convertible Notes due 2014 of Integrated Electrical Services, Inc.,
a Delaware corporation (including any successor corporation under the Indenture
hereinafter referred to, the "Company"), issued under an Indenture, dated as of
November 24, 2004 (together with any supplemental indenture thereto, the
"Indenture"), between the Company, the Guarantors and The Bank of New York, a
New York banking corporation, as trustee (the "Trustee"). The terms of the
Security include those stated in the Indenture, those made part of the Indenture
by reference to the Trust Indenture Act of 1939, as amended ("TIA"), and those
set forth in this Security. This Security is subject to all such terms, and
Holders are referred to the Indenture and the TIA for a statement of all such
terms. To the extent permitted by applicable law, in the event of any
inconsistency between the terms of this Security and the terms of the Indenture,
the terms of the Indenture shall control. Capitalized terms used but not defined
herein have the meanings assigned to them in the Indenture unless otherwise
indicated.
1. Interest.
The Company promises to pay interest on the principal amount of the
outstanding Securities at the interest rate of 6.5% per annum (the "Interest
Rate") from the Closing Date. The Company will pay Interest on this Security
semi-annually in arrears on May 1 and November 1 of each year (each, an
"Interest Payment Date"), commencing May 1, 2005.
Interest on the Securities shall be computed (i) for any full semi-annual
period for which a particular Interest Rate is applicable, on the basis of a
360-day year of twelve 30-day months and (ii) for any period for which a
particular Interest Rate is applicable for less than a full semiannual period
for which Interest is calculated, on the basis of a 30-day month and, for such
periods of less than a month, the actual number of days elapsed over a 30-day
month.
A Holder of any Security at the close of business on a record date will be
entitled to receive interest (and Liquidated Damages, if any) on such Security
on the corresponding Interest Payment Date; provided that if this Security is
repurchased by the Company on a date that is after the record date and prior to
the corresponding Interest Payment Date, interest and Liquidated Damages, if
any, accrued and unpaid hereon to but not including the applicable Repurchase
Date or Fundamental Change Repurchase Date, as the case may be, will be paid to
the same Holder to whom the Company pays the purchase price of this Security.
Interest on Securities converted after a record date but prior to the
corresponding Interest Payment Date (other than any Security whose maturity is
prior to such Interest Payment Date) will be paid on the next succeeding
Interest Payment Date to the Holder of the Securities on the record date but,
upon conversion, the converting Holder must pay the Company the interest, and
Liquidated Damages, if any, specified in Section 13.9 of the Indenture.
If the principal amount hereof, any portion thereof, any interest,
including the payment of Liquidated Damages, if any, or any Repurchase Price,
Fundamental Change Repurchase Price, Optional Redemption Price or Make-Whole
Premium, if applicable, on any Security is not paid when due (whether upon
acceleration pursuant to Section 8.2 of the Indenture, upon the date set for
payment of the Repurchase Price, the Fundamental Change Repurchase Price, the
Optional Redemption Price or the Make-Whole Premium hereof or upon the Stated
Maturity of this Security), then in each such case the overdue amount shall, to
the extent permitted by law, bear interest at 1% over the then Interest Rate,
which interest shall accrue from the date on which such overdue amount was
originally due to the date of payment of such amount, including interest
thereon, has been made or duly provided for. All such interest shall be payable
on demand.
2. Method of Payment.
Except as provided below, interest and Liquidated Damages will be paid (i)
on the Global Securities to DTC in immediately available funds, and (ii) with
respect to Certificated Securities, to the Person in whose name Securities are
registered at the close of business on the record date, (a) on any Certificated
Securities having an aggregate principal amount of $2,000,000 or less, by check
mailed to the Holders of such Securities; and (b) on any Securities having an
aggregate principal amount of more than $2,000,000, by wire transfer in
immediately available
A-4
funds at the election of the Holders of those Securities.
At Stated Maturity the Company will pay principal and interest in cash on
Securities, with respect to Global Securities in accordance with the Applicable
Procedures of DTC, and otherwise at the Company's office for payment, which
initially will be the Corporate Trust Office of the Trustee.
Subject to the terms and conditions of the Indenture, the Company will
make payments in cash in respect of the Repurchase Price, the Fundamental Change
Repurchase Price, the Optional Redemption Price, Liquidated Damages and amounts
payable at Stated Maturity to Holders who surrender Securities to the Paying
Agent to collect such payments in respect of the Securities. The Company will
pay cash amounts in money of the United States that at the time of payment is
legal tender for payment of public and private debts. However, the Company may
make such cash payments by check payable in such money.
3. Paying Agent, Conversion Agent and Registrar.
Initially, The Bank of New York, a New York banking corporation (the
"Trustee"), will act as Paying Agent, Conversion Agent and Registrar. The
Company may appoint and change any of the Paying Agent, Conversion Agent or
Registrar without notice, other than notice to the Trustee. Neither the Company
nor any of its Subsidiaries nor any of their Affiliates may act as Paying Agent,
Conversion Agent or Registrar.
4. Indenture.
This Security is one of a duly authorized issue of Securities of the
Company designated as its [Series A] [Series B] 6.5% Senior Convertible Notes
due 2014, issued under the Indenture. The terms of this Security include those
stated in the Indenture and those required by or made part of the Indenture by
reference to the Trust Indenture Act of 1939, as amended, as in effect on the
date of the Indenture. This Security is subject to all such terms, and the
Holder of this Security is referred to the Indenture and said Act for a
statement of them.
The Securities are general unsecured obligations of the Company. The
aggregate principal amount of Securities that may be issued under the Indenture
is limited to $50,000,000.
5. Repurchase of Securities at the Option of the Holder.
Subject to the terms and conditions of the Indenture, the Company shall
repurchase all or a portion of the Securities (any such portion being at least
$1,000 or an integral multiple of $1,000 in excess thereof and provided that no
single Security may be repurchased in part unless the portion of the principal
amount of such Security to be outstanding after such repurchase is equal to
$1,000 or integral multiples of $1,000 in excess thereof) at the option of the
Holder on November 1, 2008 (the "Repurchase Date"), at a repurchase price equal
to 100% of the principal amount of the Securities to be repurchased, plus
interest (and Liquidated Damages, if any) accrued but unpaid to, but excluding,
such Repurchase Date (the "Repurchase Price"). At the option of the Company and
subject to the provisions set forth in the Indenture, the Repurchase Price may
be paid in cash, or subject to the fulfillment by the Company of the conditions
set forth in the Indenture, by delivery of shares of Common Stock having a fair
market value determined as set forth in the Indenture.
If a Fundamental Change occurs, the Holder of this Security, at the
Holder's option, shall have the right, in accordance with the provisions of the
Indenture, to require the Company to repurchase this Security (or any portion of
the principal amount hereof that is at least $1,000 or an integral multiple of
$1,000 in excess thereof, provided that the portion of the principal amount of
this Security to be outstanding after such repurchase is at least equal to
$1,000) at a Fundamental Change Repurchase Price equal to 100% of the principal
amount thereof plus interest (and Liquidated Damages, if any) accrued to, but
excluding, the Fundamental Change Repurchase Date. At the option of the Company
and subject to the provisions set forth in the Indenture, the Fundamental Change
Repurchase Price may be paid in cash, by delivery of shares of Common Stock
having a fair market value equal to the Fundamental Change Repurchase Price
(subject to the conditions set forth in the Indenture), or any combination
thereof.
6. Optional Redemption
The Securities are not redeemable prior to November 1, 2008. On and after
November 1, 2008, the Company may, at its option, redeem the Securities in whole
at any time or in part from time to time, on any date
A-5
prior to the Stated Maturity upon at least 30 days' notice and not more than 60
days' notice given in the manner set forth in the Indenture, at a redemption
price (the "Optional Redemption Price") equal to 100% of the principal amount of
the Securities to be redeemed plus interest (and Liquidated Damages, if any)
accrued but unpaid to, but excluding the Redemption Date, plus the Redemption
Premium; provided, however, that each such optional redemption may occur only in
accordance with the terms set forth in the Indenture and only if (i) on the date
that the Company gives such notice, the Closing Price per share of the Common
Stock for at least 20 Trading Days of the 30 consecutive Trading Days
immediately preceding such date is at least 150% of the Conversion Price then in
effect, appropriately adjusted to take into account the occurrence, during such
30 Trading Day period, of any event described in Section 13.3 of the Indenture
and (ii) on the date that the Company delivers such Company Notice through the
date of redemption, the Common Stock issuable upon conversion of the Securities
is either (1) covered by a registration statement covering resales thereof that
is effective and available for use and is expected to remain effective and
available for use for the 30 days following the date of such notice or (2)
eligible to be resold by non-affiliates pursuant to Rule 144(k) under the
Securities Act.
7. Make-Whole Premium
If a Fundamental Change occurs, Holders of this Security will be entitled
to receive the Make-Whole Premium with respect to this Security to the extent
this Security is converted during the related Fundamental Change Conversion
Period. Subject to the provisions of the Indenture, the Company may, at its
option, pay the Make-Whole Premium in Common Stock, cash, the same form of
consideration into which all or substantially all of the Common Stock has been
converted in connection with the applicable Fundamental Change (valued as set
forth in the Indenture), or any combination of the foregoing. If holders of
Common Stock have the right to elect the form of consideration received in a
Fundamental Change, then for purposes of the foregoing the consideration into
which a share of Common Stock has been converted shall be deemed to equal the
same percentage of each form of consideration as encompasses the aggregate
consideration distributed in respect of all shares of Common Stock participating
in the distribution. Subject to the provisions of the Indenture, unless the
Company gives notice to the contrary, the Make-Whole Premium shall be paid in
shares of Common Stock (or, if applicable, in the same form of consideration
into which shares of Common Stock have been converted in connection with the
applicable Fundamental Change). The amount of cash to be received shall equal
the product of (i) the portion of the Make-Whole Premium to be paid in cash
expressed as a number of shares of Common Stock and (ii) the arithmetic average
of the Closing Prices per share of the Common Stock on the five Trading Days
prior to, but not including, the Effective Date.
8. Conversion.
(a) Subject to and in compliance with the provisions of the Indenture, a
Holder shall have the right, at such Holder's option, to convert all or any
portion (if the portion to be converted is $1,000 or an integral multiple
$1,000) of this Security into fully paid and nonassessable shares of Common
Stock at the Conversion Price in effect on the Conversion Date. The Conversion
Price is subject to adjustment from time to time as set forth in Section 13.3 of
the Indenture. In the case of a conversion during a Fundamental Change
Conversion Period, Holders electing to convert Securities shall also receive the
Make-Whole Premium payable upon such conversion as set forth in Article VI of
the Indenture. Holders may surrender Securities for conversion at any time
within the Fundamental Change Conversion Period. In the case of a conversion
during a Redemption Conversion Period, Holders electing to convert Securities
shall also receive the Redemption Premium payable upon such conversion as set
forth in Article IV and Article VI of the Indenture. Holders may surrender
Securities for conversion at any time within the Redemption Conversion Period.
Pursuant to the terms of the Indenture, the Redemption Premium, if any, payable
upon conversion of Securities may be paid in the form of cash or additional
shares of Common Stock.
(b) All conversions of this Security shall comply with the provisions of
Article XIII of the Indenture, including without limitation, the provisions
relating to the Share Limitation.
(c) A Security in respect of which a Holder has delivered a Repurchase
Notice or Fundamental Change Repurchase Notice, exercising the option of such
Holder to require the Company to purchase such Security, may be converted only
if such Repurchase Notice or Fundamental Change Repurchase Notice is withdrawn
in accordance with the terms of the Indenture.
A-6
(d) To surrender a Security for conversion, a Holder must (1) complete and
manually sign the conversion notice below (or complete and manually sign a
facsimile of such notice) and deliver such notice to the Conversion Agent, (2)
surrender the Security to the Conversion Agent, (3) furnish appropriate
endorsements and transfer documents and (4) pay any transfer or similar tax, if
required.
(e) No fractional shares of Common Stock shall be issued upon conversion
of any Security. Instead of any fractional share of Common Stock that would
otherwise be issued upon conversion of such Security, the Company shall pay a
cash adjustment as provided in the Indenture.
9. Denominations; Transfer; Exchange.
The Securities are in fully registered form, without coupons, in
denominations of $1,000 of principal amount and integral multiples of $1,000. A
Holder may register a transfer or exchange of Securities in accordance with the
Indenture. The Registrar may require a Holder, among other things, to furnish
appropriate endorsements, legal opinions and transfer documents and to pay any
taxes and fees required by law or permitted by the Indenture. The Registrar need
not transfer or exchange any Securities in respect of which a Repurchase Notice
or Fundamental Change Repurchase Notice has been given and not withdrawn.
10. Persons Deemed Owners.
The registered Holder of this Security shall be treated as the owner of
this Security for all purposes.
11. Unclaimed Money or Securities.
The Trustee and the Paying Agent shall pay to the Company upon written
request any money held by them for the payment of any amount with respect to the
Securities that remains unclaimed for two years after the date upon which such
payment shall have been due. After payment to the Company, Holders entitled to
the money or securities must look to the Company for payment as general
creditors unless an applicable abandoned property law designates another Person
after the date upon which such payment shall have become due.
12. Amendment; Waiver.
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture, all (but not less than all) of the Securities or the Subsidiary
Guarantees may be amended with the written consent of the Holders of at least a
majority in aggregate principal amount of the outstanding Securities and (ii)
certain defaults may be waived with the written consent of the Holders of a
majority in aggregate principal amount of the outstanding Securities. The
Indenture, all (but not less than all) of the Securities and the Subsidiary
Guarantees may also be amended by the Company and the Trustee, without the
consent of any Holder, in certain circumstances set forth in the Indenture;
provided, however, that certain provisions of the Indenture and the Securities
may not be amended without the consent of each affected Holder.
13. Defaults and Remedies.
If any Event of Default with respect to the Securities shall occur and be
continuing, the principal of all the Securities may be declared due and payable
in the manner and with the effect provided in the Indenture.
14. Trustee Dealings with the Company.
Subject to certain limitations imposed by the TIA, the Trustee under the
Indenture, in its individual or any other capacity, may become the owner or
pledgee of Securities and may otherwise deal with and collect obligations owed
to it by the Company or its Affiliates and may otherwise deal with the Company
or its Affiliates with the same rights it would have if it were not Trustee.
15. No Recourse Against Others.
A director, officer, employee, stockholder, member, manager, limited
partner or general partner (and their respective Affiliates, other than the
Company or any Guarantor), as such, of the Company or any Guarantor shall not
A-7
have any liability for any obligations of the Company under the Securities, the
Subsidiary Guarantees or the Indenture or for any claim based on, in respect of
or by reason of such obligations or their creation. By accepting this Security,
each Securityholder shall waive and release all such liability. The waiver and
release shall be part of the consideration for the issue of this Security.
16. Authentication.
This Security shall not be valid until an authorized signatory of the
Trustee manually signs the Trustee's Certificate of Authentication on the other
side of this Security.
17. 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 right of survivorship and not as
tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors
Act).
18. GOVERNING LAW.
THE LAWS OF THE STATE OF NEW YORK SHALL GOVERN THE INDENTURE AND THIS
SECURITY.
19. Requests for Copies.
The Company will furnish to any Securityholder upon written request and
without charge a copy of the Indenture and, if requested, a copy of this
Security in larger type. Requests may be made to:
Integrated Electrical Services, Inc.
0000 Xxxx Xxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000-0000
Attention: Chief Financial Officer
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
20. Registration Rights.
The Holders of the Securities are entitled to the benefits of the
Registration Rights Agreement, dated as of November 24, 2004, between the
Company and the purchasers identified on the signature pages thereto, including
the receipt of Liquidated Damages (as defined in such agreement).
A-8
ASSIGNMENT FORM CONVERSION NOTICE
To assign this Security, fill in the To convert this Security into Common
form below: Stock of the Company, check the box [
].
I or we assign and transfer this To convert only part of this
Security to Security, state the principal amount
_________________________ to be converted (which must be $1,000
_________________________ or an integral multiple of $1,000):
(Insert assignee's soc. sec. or tax
ID no.) If you want the stock certificate
_________________________ made out in another person's name
_________________________ fill in the form below:
_________________________
(Print or type assignee's name, _________________________
address and zip code) _________________________
and irrevocably appoint (Insert the other person's soc. sec.
tax ID no.)
____________________ agent to
transfer this Security on the books _________________________
of the Company. The agent may _________________________
substitute another to act for him. _________________________
_________________________
_________________________
(Print or type other person's name,
address and zip code)
The undersigned, on behalf of itself
and its affiliates, hereby represents
to the Company that upon and
immediately after the conversion of
Securities into shares of Common
Stock, it and its affiliates are and
will be in compliance with the Share
Limitation applicable to such
Securities pursuant to paragraph 8 of
this Security.
Date: __________ Your Signature: _________________________________
_________________________________________________________________________
(Sign exactly as your name appears on the other side of this Security)
Signature Guaranteed
_____________________________________
Participant in a Recognized Signature
Guarantee Medallion Program
By: _____________________________
Authorized Signatory
A-9
ELECTION OF HOLDER TO REQUIRE REPURCHASE
Pursuant to Section 3.4 of the Indenture, the undersigned hereby elects to
have this Security repurchased by the Company.
Dated:
__________________________________________
__________________________________________
Signature(s)
Signature(s) must be guaranteed by an
Eligible Guarantor Institution with
membership in an approved signature
guarantee program pursuant to Rule
17Ad-15 under the Securities Exchange
Act of 1934.
__________________________________________
Signature Guaranteed
Principal amount to be repurchased (at
least U.S. $1,000 or an integral
multiple of $1,000 in excess thereof):
___________________
Remaining principal amount following
such repurchase (not less than U.S.
$1,000):
-------------------
NOTICE: The signature to the foregoing Election must correspond to the Name as
written upon the face of this Security in every particular, without alteration
or any change whatsoever.
A-10
SCHEDULE OF INCREASES AND DECREASES OF GLOBAL SECURITY
Initial Principal Amount of Global Security: ____________($___________).
Principal Amount of
Amount of Increase Amount of Decrease in Global Security Notation by
in Principal Amount Principal Amount of After Increase or Registrar or
Date of Global Security Global Security Decrease Security Custodian
------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------
A-11
EXHIBIT B
[FORM OF FACE OF CERTIFICATED SECURITY]
THE SECURITY EVIDENCED BY THIS CERTIFICATE AND ANY SHARES OF COMMON STOCK
ISSUABLE UPON THE CONVERSION OF THIS SECURITY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR ANY STATE
SECURITIES LAWS, AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED EXCEPT AS
SET FORTH IN THE FOLLOWING SENTENCE. BY ACQUISITION HEREOF, THE HOLDER:
(1) REPRESENTS THAT IT IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE
144A UNDER THE SECURITIES ACT (A "QIB"); (B) IT IS AN INSTITUTIONAL "ACCREDITED
INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2), (3) OR (7) OF REGULATION D UNDER
THE SECURITIES ACT) (AN "IAI"); OR (C) IS NOT A U.S. PERSON AND IS ACQUIRING
THIS SECURITY IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER
THE SECURITIES ACT;
(2) AGREES THAT (I) IT WILL NOT, PRIOR TO THE EXPIRATION OF THE HOLDING PERIOD
APPLICABLE UNDER RULE 144(k) (TAKING INTO ACCOUNT THE PROVISIONS OF RULE 144(d)
UNDER THE SECURITIES ACT, IF APPLICABLE) UNDER THE SECURITIES ACT AS IN EFFECT
ON THE DATE OF THE TRANSFER OF THIS SECURITY, RESELL OR OTHERWISE TRANSFER THIS
SECURITY EXCEPT (A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, (B) TO A PERSON
WHOM SUCH SELLER REASONABLY BELIEVES TO BE A QIB PURCHASING FOR ITS OWN ACCOUNT
OR FOR THE ACCOUNT OF A QIB IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES
ACT, (C) TO PERSONS OTHER THAN U.S. PERSONS OUTSIDE THE UNITED STATES IN AN
OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT,
(D) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE
SECURITIES ACT (IF AVAILABLE), (E) TO A PERSON WHOM SUCH SELLER REASONABLY
BELIEVES TO BE AN IAI OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT, SUBJECT TO THE OBLIGATION OF SUCH HOLDER TO FURNISH
THE COMPANY AND THE TRUSTEE SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER
INFORMATION AS MAY BE REQUIRED PURSUANT TO THE INDENTURE AND, IN EACH CASE, IN
ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS, AND (II) IT WILL, AFTER THE
EXPIRATION OF THE HOLDING PERIOD REFERRED TO UNDER RULE 144(k) (TAKING INTO
ACCOUNT THE PROVISIONS OF RULE 144(d) UNDER THE SECURITIES ACT, IF APPLICABLE)
UNDER THE SECURITIES ACT AS IN EFFECT ON THE DATE OF THE TRANSFER OF THIS
SECURITY, PROVIDE A REPRESENTATION TO THE COMPANY THAT IT HAS HELD THE SECURITY
EVIDENCED BY THIS CERTIFICATE FOR A PERIOD OF TWO YEARS AND IS NOT AN AFFILIATE
(AS SUCH TERM IS DEFINED IN RULE 144 UNDER THE SECURITIES ACT) PRIOR TO ANY
RESALE OR TRANSFER OF THIS SECURITY;
(3) AGREES THAT IT WILL NOTIFY EACH PERSON TO WHOM THIS SECURITY OR AN INTEREST
HEREIN IS TRANSFERRED (OTHER THAN A TRANSFER PURSUANT TO CLAUSE (2)(I)(F) ABOVE)
OF THE RESALE RESTRICTIONS CONTAINED IN THIS LEGEND;
AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S.
PERSON" HAVE THE MEANING GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.
THE INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER
ANY TRANSFER OF THIS SECURITY IN VIOLATION OF THE FOREGOING RESTRICTIONS.
THE FOREGOING LEGEND MAY BE REMOVED FROM THIS SECURITY ON SATISFACTION OF THE
CONDITIONS SPECIFIED IN THE INDENTURE.
B-1
INTEGRATED ELECTRICAL SERVICES, INC.
[Series A] [Series B] 6.5% Senior Convertible Notes due 2014
No. CUSIP: ________
Issue Date: ________ __, 20__ Principal Amount: $
INTEGRATED ELECTRICAL SERVICES, INC., a Delaware corporation, promises to
pay to ______________________ or registered assigns, the principal amount of
______________________ DOLLARS ($_____________) on November 1, 2014.
Interest Payment Dates: May 1 and November 1, commencing May 1, 2005.
Record Dates: April 15 and October 15.
Reference is hereby made to the further provisions of this Security set
forth on the reverse side of this Security, which further provisions shall for
all purposes have the same effect as if set forth at this place.
The Company hereby designates this Security as "Designated Senior
Indebtedness" for purposes of the Indenture dated as of January 28, 1999 under
which the Company's 9-3/8% Senior Subordinated Notes, Series A and Series B, due
2009 are issued and for purposes of the Indenture dated as of May 29, 2001 under
which the Company's 9-3/8% Senior Subordinated Notes, Series A and Series B, due
2009 are issued.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
Dated: ________ __, 20__ INTEGRATED ELECTRICAL SERVICES, INC.
By:_________________________________
Title:______________________________
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
THE BANK OF NEW YORK, a New York banking corporation,
as Trustee, certifies that this
is one of the Securities referred
to in the within-mentioned Indenture.
By ________________________
Authorized Signatory
Dated: ________ __, 20__
B-2
[FORM OF REVERSE OF CERTIFICATED SECURITY IS IDENTICAL TO EXHIBIT A]
B-3
EXHIBIT C
Integrated Electrical Services, Inc.
[Series A] [Series B] 6.5% Senior Convertible Notes due 2014
Transfer Certificate
In connection with any transfer of any of the Securities within the period
prior to the expiration of the holding period applicable to the sales thereof
under Rule 144(k) under the Securities Act of 1933, as amended (the "Securities
Act") (or any successor provision) (other than any transfer pursuant to a
registration statement that has been declared effective under the Securities
Act), the undersigned registered owner of this Security hereby certifies with
respect to $____________ principal amount of the above-captioned Securities
presented or surrendered on the date hereof (the "Surrendered Securities") for
registration of transfer, or for exchange or conversion where the securities
issuable upon such exchange or conversion are to be registered in a name other
than that of the undersigned registered owner (each such transaction being a
"transfer"), that such transfer complies with the restrictive legend set forth
on the face of the Surrendered Securities for the reason checked below:
[_] A transfer of the Surrendered Securities is made to Integrated
Electrical Services, Inc. (the "Company") or any of its
Subsidiaries;
[_] The transfer of the Surrendered Securities complies with Rule 144A
under the Securities Act;
[_] The transfer of the Surrendered Securities is pursuant to an
effective registration statement under the Securities Act;
[_] The transfer of the Surrendered Securities is being effected to an
Institutional Accredited Investor and pursuant to an exemption from
the registration requirements of the Securities Act other than Rule
144A, Rule 144 or Rule 904, and the transferor hereby further
certifies that it has not engaged in any general solicitation within
the meaning of Regulation D under the Securities Act and the
transfer complies with the transfer restrictions applicable to
beneficial interests in a Restricted Security under the Indenture
and the requirements of the exemption claimed, which certification
is supported by (1) a certificate executed by the transferee in the
form of Exhibit D to the Indenture and (2) an opinion of counsel
provided by the transferor or the transferee (a copy of which the
transferor has attached to this certification), to the effect that
such transfer is in compliance with the Securities Act; or
[_] The transfer of the Surrendered Securities is pursuant to another
available exemption from the registration requirement of the
Securities Act;
and unless such Securities are being transferred to the Company or a subsidiary
thereof, the undersigned confirms that, to the undersigned's knowledge, such
Securities are not being transferred to an "affiliate" of the Company as defined
in
C-1
Rule 144 under the Securities Act (an "Affiliate"). Capitalized terms used
but not defined herein have the meanings set forth in the Indenture.
Unless one of the boxes above is checked, the Trustee will refuse to
register any of the Securities evidenced by this certificate in the name of any
person other than the registered holder thereof.
DATE: __________________________________
Signature(s)
Notice: Signature must conform to name written on face of Security.
(If the registered owner is a corporation, partnership or fiduciary, the
title of the person signing on behalf of such registered owner must be stated.)
Signature(s) must be guaranteed by an "eligible guarantor institution" meeting
the requirements of the Securities Registrar, which requirements include
membership or participation in the Security Transfer Agent Medallion Program
("STAMP") or such other "signature guarantee program" as may be determined by
the Securities Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.
_______________________
Signature Guarantee
C-2
EXHIBIT D
FORM OF CERTIFICATE FROM
ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
Integrated Electrical Services, Inc.
0000 Xxxx Xxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000-0000
Attention: Chief Financial Officer
[Registrar address block]
Re: [Series A] [Series B] 6.5% Senior Convertible Notes due 2014
Reference is hereby made to the Indenture, dated as of November 24, 2004
(the "Indenture"), among Integrated Electrical Services, Inc., as issuer (the
"Company"), the Guarantors party thereto and The Bank of New York, a New York
banking corporation, as trustee. Capitalized terms used but not defined herein
shall have the meanings given to them in the Indenture.
In connection with our proposed purchase of $____________ aggregate principal
amount of:
(a) [ ] a beneficial interest in a Global Security, or
(b) [ ] a Certificated Security,
we confirm that:
1. We understand that any subsequent transfer of the Securities or any
interest therein is subject to certain restrictions and conditions set forth in
the Indenture and the undersigned agrees to be bound by, and not to resell or
otherwise transfer the Securities or any interest therein except in compliance
with, such restrictions and conditions and the Securities Act of 1933, as
amended (the "Securities Act").
2. We understand that the offer and sale of the Securities have not been
registered under the Securities Act, and that the Securities and any interest
therein may not be offered or sold except as permitted in the following
sentence. We agree, on our own behalf and on behalf of any accounts for which we
are acting as hereinafter stated, that if we should sell the Securities or any
interest therein, we will do so only (A) to the Company or any subsidiary
thereof, (B) in accordance with Rule 144A under the Securities Act to a
"qualified institutional buyer" (as defined therein), (C) to an institutional
"accredited investor" (as defined below) that, prior to such transfer, furnishes
(or has furnished on its behalf by a U.S. broker-dealer) to you and to the
Company a signed letter substantially in the form of this letter and an opinion
of legal counsel in form reasonably acceptable to the Company to the effect that
such transfer is in compliance with the Securities Act, (D) outside the United
States in accordance with Rule 904 of Regulation S under the Securities Act, (E)
pursuant to the provisions of Rule 144(k) under the Securities Act or (F)
pursuant to an effective registration statement under the Securities Act, and we
further agree to provide to any Person purchasing the Certificated Security or
beneficial interest in a Global Security from us in a transaction meeting the
requirements of clauses (A) through (E) of this paragraph a notice advising such
purchaser that resales thereof are restricted as stated herein.
3. We understand that, on any proposed resale of the Securities or
beneficial interest therein, we will be required to furnish to you and the
Company such certifications, legal opinions and other information as you and the
Company may reasonably require to confirm that the proposed sale complies with
the foregoing restrictions. We further understand that the Securities purchased
by us will bear a legend to the foregoing effect.
4. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and have
such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of our investment in the Securities, and we
and any accounts for which we are acting are each able to bear the economic risk
of our or its investment.
D-1
5. We are acquiring the Securities or beneficial interest therein
purchased by us for our own account or for one or more accounts (each of which
is an institutional "accredited investor") as to each of which we exercise sole
investment discretion.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby.
______________________________________________
[Insert Name of Accredited Investor]
By:___________________________________________
Name:
Title:
Dated: _______________________
D-2
EXHIBIT E
Integrated Electrical Services, Inc.
[Series A] [Series B] 6.5% Senior Convertible Notes due 2014
Exchange Certificate
In connection with the exchange of a Certificated Security for an interest
in a Global Security pursuant to Section 2.12(a)(iv) of the Indenture
representing $____________ principal amount of the above-captioned Securities
presented or surrendered on the date hereof (the "Surrendered Securities"), the
undersigned registered owner of this Security hereby certifies that either:
[_] the undersigned is a "qualified institutional buyer" as defined in
Rule 144A under the Securities Act of 1933, as amended (the
"Securities Act"); or
[_] The Surrendered Securities are being transferred and such transfer
complies with Rule 144A under the Securities Act and unless the box
below is checked, the undersigned confirms that, to the
undersigned's knowledge, such Securities are not being transferred
to an "affiliate" of the Company as defined in Rule 144 under the
Securities Act (an "Affiliate").
[_] The transferee is an Affiliate of the Company.
DATE: __________________________________
Signature(s)
(If the registered owner is a corporation, partnership or fiduciary, the title
of the person signing on behalf of such registered owner must be stated.)
Signature Guaranteed
______________________________________
Participant in a Recognized Signature
E-1
EXHIBIT F
COMMON STOCK RESTRICTED SECURITIES LEGEND
THE SHARES OF COMMON STOCK EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT")
OR ANY STATE SECURITIES LAWS, AND MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ACQUISITION
HEREOF, THE HOLDER:
(1) REPRESENTS THAT IT IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE
144A UNDER THE SECURITIES ACT (A "QIB"); (B) IT IS AN INSTITUTIONAL "ACCREDITED
INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2), (3) OR (7) OF REGULATION D UNDER
THE SECURITIES ACT) (AN "IAI"); OR (C) IS NOT A U.S. PERSON AND IS ACQUIRING
THIS SECURITY IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER
THE SECURITIES ACT;
(2) AGREES THAT (I) IT WILL NOT, PRIOR TO THE EXPIRATION OF THE HOLDING PERIOD
APPLICABLE UNDER RULE 144(k) (TAKING INTO ACCOUNT THE PROVISIONS OF RULE 144(d)
UNDER THE SECURITIES ACT, IF APPLICABLE) UNDER THE SECURITIES ACT AS IN EFFECT
ON THE DATE OF THE TRANSFER OF THIS SECURITY, RESELL OR OTHERWISE TRANSFER THIS
SECURITY EXCEPT (A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, (B) TO A PERSON
WHOM SUCH SELLER REASONABLY BELIEVES TO BE A QIB PURCHASING FOR ITS OWN ACCOUNT
OR FOR THE ACCOUNT OF A QIB IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES
ACT, (C) TO PERSONS OTHER THAN U.S. PERSONS OUTSIDE THE UNITED STATES IN AN
OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT,
(D) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE
SECURITIES ACT (IF AVAILABLE), (E) TO A PERSON WHOM SUCH SELLER REASONABLY
BELIEVES TO BE AN IAI OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT, SUBJECT TO THE RIGHT OF THE COMPANY AND THE TRUSTEE TO
REQUIRE DELIVERY OF SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS
MAY BE NECESSARY TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND, IN EACH CASE, IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS, AND (II) IT WILL, AFTER THE EXPIRATION OF THE
HOLDING PERIOD REFERRED TO UNDER RULE 144(k) (TAKING INTO ACCOUNT THE PROVISIONS
OF RULE 144(d) UNDER THE SECURITIES ACT, IF APPLICABLE) UNDER THE SECURITIES ACT
AS IN EFFECT ON THE DATE OF THE TRANSFER OF THIS SECURITY, PROVIDE A
REPRESENTATION TO THE COMPANY THAT IT HAS HELD THE SECURITY EVIDENCED BY THIS
CERTIFICATE FOR A PERIOD OF TWO YEARS AND IS NOT AN AFFILIATE (AS SUCH TERM IS
DEFINED IN RULE 144 UNDER THE SECURITIES ACT) PRIOR TO ANY RESALE OR TRANSFER OF
THIS SECURITY;
(3) AGREES THAT IT WILL NOTIFY EACH PERSON TO WHOM THIS SECURITY OR AN INTEREST
HEREIN IS TRANSFERRED (OTHER THAN A TRANSFER PURSUANT TO CLAUSE (2)(I)(F) ABOVE)
OF THE RESALE RESTRICTIONS CONTAINED IN THIS LEGEND;
AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S.
PERSON" HAVE THE MEANING GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.
THE INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER
ANY TRANSFER OF THIS SECURITY IN VIOLATION OF THE FOREGOING RESTRICTIONS.
THE FOREGOING LEGEND MAY BE REMOVED FROM THIS SECURITY ON SATISFACTION OF THE
CONDITIONS SPECIFIED IN THE INDENTURE.
F-1
EXHIBIT G
FORM OF NOTATION OF SUBSIDIARY GUARANTEE
For value received, each Guarantor (which term includes any successor Person
under the Indenture) has, jointly and severally, fully and unconditionally and
irrevocably guaranteed, to the extent set forth in the Indenture and subject to
the provisions in the Indenture dated as of November 24, 2004 (the "Indenture")
among Integrated Electrical Services, Inc. (the "Company"), the Guarantors party
thereto and The Bank of New York, a New York banking corporation, as trustee
(the "Trustee"), (a) the due and punctual payment of the principal, Repurchase
Price or Fundamental Change Repurchase Price of, and the Make-Whole Premium
(only to the extent not otherwise satisfied by the Company in other than cash in
accordance with the applicable Company Notice), Redemption Premium, if any, and
Liquidated Damages, if any, and interest on, the Securities, whether at
maturity, by acceleration, redemption, repurchase or otherwise, the due and
punctual payment of interest on overdue principal of and interest on the
Securities, if any, and, to the extent permitted by law, the due and punctual
performance of all other obligations of the Company to the Holders (other than
the Company's obligations under Article XIII) or the Trustee all in accordance
with the terms of the Indenture and (b) in case of any extension of time of
payment or renewal of any Securities or any of such other obligations, that the
same will be promptly paid in full when due or performed in accordance with the
terms of the extension or renewal, whether at stated maturity, by acceleration
or otherwise. The obligations of the Guarantors to the Holders of Securities and
to the Trustee pursuant to the Subsidiary Guarantee and the Indenture are
expressly set forth in Article XII of the Indenture and reference is hereby made
to the Indenture for the precise terms of the Subsidiary Guarantee. The
Subsidiary Guarantee shall be governed by and construed in accordance with the
laws of the State of New York.
Capitalized terms used but not defined herein have the meanings given to them in
the Indenture.
[NAME OF GUARANTOR]
By:
Name:
Title:
G-1
EXHIBIT H
FORM OF SUPPLEMENTAL INDENTURE
TO BE DELIVERED BY SUBSEQUENT GUARANTORS
SUPPLEMENTAL INDENTURE (this "Supplemental Indenture"), dated as of
_______________, 200__, among [NAME OF SUBSIDIARY] (the "Guaranteeing
Subsidiary"), a subsidiary of Integrated Electrical Services, Inc. (or its
permitted successor), a Delaware corporation (the "Company"), the other
Guarantors (as defined in the Indenture referred to herein) and The Bank of New
York, a New York banking corporation, as trustee under the Indenture referred to
below (the "Trustee").
W I T N E S S E T H
WHEREAS, the Company and the Guarantors have heretofore executed and
delivered to the Trustee an indenture (the "Indenture"), dated as of November
24, 2004 providing for the issuance of Series A 6.5% Senior Convertible
Securities due 2014 and Series B 6.5% Senior Convertible Securities due 2014
(collectively, the "Securities");
WHEREAS, the Indenture provides that under certain circumstances the
Guaranteeing Subsidiary shall execute and deliver to the Trustee a supplemental
indenture pursuant to which the Guaranteeing Subsidiary shall unconditionally
guarantee all of the Company' obligations (only to the extent not otherwise
satisfied by the Company in other than cash in accordance with the applicable
Company Notice) under the Securities and the Indenture on the terms and
conditions set forth herein and in the Indenture (the "Subsidiary Guarantee");
and
WHEREAS, pursuant to Section 11 of the Indenture, the Trustee is
authorized to execute and deliver this Supplemental Indenture.
NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the
Guaranteeing Subsidiary and the Trustee mutually covenant and agree for the
equal and ratable benefit of the Holders of the Securities as follows:
1. CAPITALIZED TERMS. Capitalized terms used herein without definition
shall have the meanings assigned to them in the Indenture.
2. AGREEMENT TO GUARANTEE. The Guaranteeing Subsidiary hereby agrees to
provide an unconditional Guarantee on the terms and subject to the conditions
set forth in the Subsidiary Guarantee and in the Indenture including but not
limited to Article XII thereof. The obligations of the Guaranteeing Subsidiary
to the Holders of Securities and to the Trustee pursuant to the Subsidiary
Guarantee and the Indenture are expressly set forth in Article XII of the
Indenture and reference is hereby made to the Indenture for the precise terms of
the Subsidiary Guarantee. This Guarantee shall not be discharged except by
complete performance of the obligations contained in the Notes and the
Indenture.
4. NO RECOURSE AGAINST OTHERS. No past, present or future director,
officer, employee, incorporator, stockholder or agent of the Guaranteeing
Subsidiary, as such, shall have
H-1
any liability for any obligations of the Company or any Guaranteeing Subsidiary
under the Securities, any Subsidiary Guarantees, the Indenture or this
Supplemental Indenture or for any claim based on, in respect of, or by reason
of, such obligations or their creation. Each Holder of the Securities by
accepting a Security waives and releases all such liability. The waiver and
release are part of the consideration for issuance of the Securities.
5. THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
6. COUNTERPARTS. The parties may sign any number of copies of this
Supplemental Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement.
7. EFFECT OF HEADINGS. The Section headings herein are for convenience
only and shall not affect the construction hereof.
8. THE TRUSTEE. The Trustee shall not be responsible in any manner
whatsoever for or in respect of the validity or sufficiency of this Supplemental
Indenture or for or in respect of the recitals contained herein, all of which
recitals are made solely by the Guaranteeing Subsidiary and the Company.
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed and attested, all as of the date first above
written.
Dated: _______________, 20___
[GUARANTEEING SUBSIDIARY]
By: _______________________________
Name:
Title:
INTEGRATED ELECTRICAL SERVICES, INC.
By: _______________________________
Name:
Title:
[EXISTING GUARANTORS]
By: _______________________________
Name:
Title:
H-2
[TRUSTEE],
as Trustee
By: _______________________________
Authorized Signatory
H-3