TABLE OF CONTENTS

 

		Page
ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE		1
Section 1.01. Definitions		1
Section 1.02. Other Definitions		9
Section 1.03. Incorporation by Reference of Trust Indenture Act		9
Section 1.04. Rules of Construction		10
Section 1.05. Section 382 Interpretive Provisions		10
ARTICLE 2 THE SECURITIES		10
Section 2.01. Title; Amount and Issue of Securities; Principal and Interest		10
Section 2.02. Form of Securities		12
Section 2.03. Legends		12
Section 2.04. Execution and Authentication		13
Section 2.05. Registrar and Paying Agent		14
Section 2.06. Paying Agent to Hold Money in Trust		15
Section 2.07. Securityholder Lists		15
Section 2.08. General Provisions Relating to Transfer and Exchange		16
Section 2.09. Book-Entry Provisions for the Global Securities		16
Section 2.10. New Securities Upon Partial Conversion or After the Conversion Rights Termination Date		18
Section 2.11. Mutilated, Destroyed, Lost or Stolen Securities		18
Section 2.12. Outstanding Securities		19
Section 2.13. Temporary Securities		19
Section 2.14. Cancellation		20
Section 2.15. Payment of Interest; Defaulted Interest		20
Section 2.16. Computation of Interest and Make-Whole Payment		21
Section 2.17. Cusip and ISIN Numbers		21
ARTICLE 3 COVENANTS		21
Section 3.01. Payment of Securities		21
Section 3.02. Financial Statements		22
Section 3.03. Maintenance of Office or Agency		22
Section 3.04. Corporate Existence		23
Section 3.05. Payment of Taxes and Other Claims		23
Section 3.06. Compliance Certificate		23
Section 3.07. Further Instruments and Acts		23
Section 3.08. Statement by Officers as to Default		24
ARTICLE 4 SUCCESSOR COMPANY		24
Section 4.01. Consolidation, Merger and Sale of Assets		24
ARTICLE 5 REDEMPTION OF SECURITIES		25
Section 5.01. Optional Redemption		25

 

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Section 5.02. Election to Redeem; Notice to Trustee		25
Section 5.03. Selection by Trustee of Securities to be Redeemed		25
Section 5.04. Notice of Redemption		26
Section 5.05. Deposit of Redemption Price		27
Section 5.06. Securities Payable on Redemption Date		27
Section 5.07. Securities Redeemed in Part		27
ARTICLE 6 DEFAULTS AND REMEDIES		27
Section 6.01. Events of Default		27
Section 6.02. Acceleration		29
Section 6.03. Other Remedies		30
Section 6.04. Waiver of Past Defaults		30
Section 6.05. Control by Majority		30
Section 6.06. Limitation on Suits		30
Section 6.07. Rights of Holders to Receive Paym ent		31
Section 6.08. Collection Suit by Trustee		31
Section 6.09. Trustee May File Proofs of Claim		31
Section 6.10. Priorities		32
Section 6.11. Restoration of Rights and Remedies		32
Section 6.12. Undertaking of Costs		32
ARTICLE 7 TRUSTEE		32
Section 7.01. Duties of Trustee		32
Section 7.02. Rights of Trustee		34
Section 7.03. Individual Rights of Trus tee		34
Section 7.04. Trustee’s Disclaimer		35
Section 7.05. Notice of Defaults		35
Section 7.06. Reports by Trustee to Holders		35
Section 7.07. Compensation and Indemnity		35
Section 7.08. Replacement of Trustee		36
Section 7.09. Successor Trustee by Merger		37
Section 7.10. Eligibility; Disqualification		37
Section 7.11. Preferential Collection of Claims Against Company		37
Section 7.12. Trustee’s Application for Instruction from the Company		37
ARTICLE 8 DISCHARGE OF INDENTURE		38
Section 8.01. Discharge of Liability on Securities		38
Section 8.02. Reinstatement		39
Section 8.03. Officers’ Certificate; Opinion of Counsel		39
ARTICLE 9 AMENDMENTS		39
Section 9.01. Without Consent of Holders		39
Section 9.02. With Consent of Holders		40
Section 9.03. Compliance with Trust Indenture Act		41
Section 9.04. Revocation and Effect of Consents and Waivers		41
Section 9.05. Notation on or Exchange of Securities		42
Section 9.06. Trustee to Sign Amendments		42

 

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ARTICLE 10 SUBSIDIARY GUARANTEE		42
Section 10.01. Subsidiary Guarantee		42
Section 10.02. Limitation on Liability; Termination, Release and Discharge Upon Merger or Consolidation; Termination on Conversion		44
Section 10.03. Right of Contribution		45
Section 10.04. No Subrogation		45
ARTICLE 11 PURCHASE AT OPTION OF HOLDER UPON A FUNDAMENTAL CHANGE; PURCHASE AT THE OPTION OF HOLDERS		45
Section 11.01. Purchase at the Option of the Holder Upon a Fundamental Change		45
Section 11.02. Purchase of Securities at the Option of the Holder		47
Section 11.03. Further Conditions and Procedures for Purchase at the Option of the Holder Upon a Fundamental Change and Purchase of Securities at the Option of the Holder		49
ARTICLE 12 CONVERSION		52
Section 12.01. Conversion of Securities		52
Section 12.02. Adjustments to Conversion Rate		55
Section 12.03. [Reserved]		61
Section 12.04. [Reserved]		61
Section 12.05. Effect of Reclassification, Consolidation, Merger or Sale		61
Section 12.06. Responsibility of Trustee		63
Section 12.07. Notice to Holders Prior to Certain Actions		63
Section 12.08. Stockholder Rights Plan		64
Section 12.09. Additional Conversion Provisions		64
Section 12.10. Termination of Conversion and Additional Post-Termination Conversion Provisions		65
Section 12.11. 5% Shareholder Limitations		68
Section 12.12. Waiver of 5% Shareholder Provisions		69
Section 12.13. Limitation on Issuances of Common Stock		70
ARTICLE 13 MISCELLANEOUS		71
Section 13.01. Trust Indenture Act Controls		71
Section 13.02. Notices		71
Section 13.03. Communication by Holders with other Holders		72
Section 13.04. Certificate and Opinion as to Conditions Precedent		72
Section 13.05. Statements Required in Certificate or Opinion		72
Section 13.06. When Securities Disregarded		72
Section 13.07. Rules by Trustee, Paying Agent and Registrar		73
Section 13.08. Legal Holidays		73
Section 13.09. Governing Law; Waiver of Jury Trial		73
Section 13.10. No Recourse Against Others		73
Section 13.11. Successors		73
Section 13.12. Multiple Originals		73
Section 13.13. Table of Contents; Headings		73
Section 13.14. Severability Clause		74

 

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Section 13.15. Force Majeure		74
EXHIBIT A  Form of the Security
EXHIBIT B  Form of Indenture Supplement to Add Subsidiary Guarantors

 

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INDENTURE dated as of August 4, 2009, among PIER 1 IMPORTS, INC., a Delaware corporation (the “ Company ”), THE SUBSIDIARY GUARANTORS (as defined herein) and THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee (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 9.0% Convertible Senior Notes due 2036 (the “ Securities ”) on the date hereof and the guarantees thereof by the Subsidiary Guarantors.

 

ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE

 

Section 1.01.  Definitions .

 

“ 5% Shareholder ” has the meaning ascribed to “5-percent shareholder” in Section 382.

 

“ Additional Voluntary Conversion Interest Payment ” means, upon a conversion pursuant to Section 12.01(a)(i) of the Indenture, in respect of the Securities to be converted pursuant to such Section, a payment in an amount equal to the lesser of (i) the remaining scheduled interest payments at the interest rate specified herein attributable to such Securities from the last day through which interest has been paid on such Securities through and including the date that is two and one-half years after the Conversion Date and (ii) the remaining scheduled interest payments at the interest rate specified herein attributable to such Securities from the last day through which interest has been paid on such Securities through and including February 15, 2013.  The Company may, at its option, make the Additional Voluntary Conversion Interest Payment in cash, Common Stock, or a combination thereof; provided that all interest accrued from the last date through which interest was paid on the converted Securities through and including the Conversion Date shall be paid in cash.   In the event that the Company elects to make any portion of the Additional Voluntary Conversion Interest Payment in Common Stock, such Common Stock shall be valued at the higher of (i) $1.50 per share and (ii) the Make-Whole Five Day VWAP.

 

“ Additional Post-Termination Interest Payment ” means, upon a conversion pursuant to Section 12.01(a)(ii) of the Indenture, in respect of the Securities to be converted pursuant to such Section, a payment in an amount equal to the lesser of (i) the remaining scheduled interest payments at the interest rate specified herein attributable to such Securities from the last day through which interest has been paid on such Securities through and including the date that is one and one-half years after the Conversion Date and (ii) the remaining scheduled interest payments at the interest rate specified herein attributable to such Securities from the last day through which interest has been paid on such Securities through and including February 15, 2013.  The Company may, at its option, make the Additional Post-Termination Interest Payment in cash, Common Stock, or a combination thereof; provided that all interest accrued from the last date through which interest was paid on the converted Securities through and including the Conversion Date shall be paid in cash.  In the event that the Company elects to make any portion of the Additional Post-Termination Interest Payment in Common Stock, the Common Stock will be valued at 90% of the Termination Conversion Price in effect at that time.

 

 

“ Affiliate ” of any specified Person means any other Person directly or indirectly controlling, 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 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; provided, however, that the existence of a management contract by the Company or an Affiliate of the Company to manage another entity shall not be deemed to be control.

 

“ Bankruptcy Law ” means Title 11 of the United States Code or any similar federal or state law for the relief of debtors.

 

“ Beneficial Owner ” shall mean any person who is considered a beneficial owner of a security in accordance with Rule 13d-3 promulgated by the SEC under the Exchange Act.

 

“ Board of Directors ” means, as to any Person, the board of directors of such Person or any duly authorized committee thereof.

 

“ Board Resolution ” means a copy of a resolution certified by the Secretary or Assistant Secretary of a Person to have been duly adopted by the Board of Directors of such Person and to be in full force and effect on the date of such certification, and delivered to the Trustee.

 

“ Business Day ” means each day that is not a Saturday, Sunday or other day on which banking institutions in New York, New York, Dallas, Texas or Houston, Texas are authorized or required by law to close.

 

“ Capital Stock ” of any Person means any and all shares, interests, rights to purchase, warrants, options, participations or other equivalents of or interests in (however designated) equity of such Person, including any Preferred Stock, but excluding any debt securities convertible into such equity.

 

“ Code ” means the Internal Revenue Code of 1986, as amended.

 

“ Common Equity ” of any Person means Capital Stock of such Person that is generally entitled to (1) vote in the election of directors of such Person or (2) if such Person is not a corporation, vote or otherwise participate in the selection of the governing body, partners, managers or others that will control the management or policies of such Person.

 

“ Common Stock ” means the Company’s common stock, par value $0.001 per share.

 

“ Company ” means Pier 1 Imports, Inc. or its successors and assigns.

 

“ Company Stock ” means Common Stock and, to the extent specified in a notice from the Company to any Holder prior to any conversion, any other interest in the Company that the Company determines will be treated as stock of the Company for purposes of applying Section 382 to the Company.

 

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“ Continuing Director ” means a director who either was a member of the Company’s board of directors on August 4, 2009, or who becomes a director of the Company subsequent to that date and whose election, appointment or nomination for election by stockholders of the Company, is duly approved by a majority of the Continuing Directors on the board of directors of the Company at the time of such approval, either by a specific vote or by approval of the proxy statement issued by the Company on behalf of the entire board of directors of the Company in which such individual is named as nominee for director.

 

“ Conversion Agent ” means the office or agency appointed by the Company where Securities may be presented for conversion.  The Conversion Agent appointed by the Company shall initially be the Trustee.

 

“ Conversion Notice ” means the form of conversion notice attached to the back of the Securities.

 

“ Conversion Price ” means, in respect of each $1,000 principal amount of Securities, $1,000 divided by the Conversion Rate, as may be adjusted from time to time as set forth herein.

 

“ Conversion Rate ” means, in respect of each $1,000 principal amount of Securities, initially 399.2016 shares of Common Stock, subject to adjustments as set forth herein.

 

“Conversion Shares” means the Common Stock issuable upon conversion of the Securities in accordance with Section 12.01(c).

 

“ Custodian ” means any receiver, trustee, assignee, liquidator, custodian or similar official under any Bankruptcy Law.

 

“ Daily VWAP ” means the per share volume-weighted average price as displayed under the heading “Bloomberg VWAP” on Bloomberg page “PIR<equity> AQR”, or any successor page, in respect of the period from 9:30 a.m.  to 4:00 p.m., New York City time on such Trading Day (or if such volume-weighted average price is unavailable, the market value of one share of Common Stock on such Trading Day as the Board of Directors determines in good faith using a volume-weighted method).

 

“ Default ” means any event which is, or after notice or passage of time or both would be, an Event of Default.

 

“ Definitive Securities ” means certificated Securities that are not Global Securities.

 

“ DTC ” means The Depository Trust Company, its nominees and their respective successors and assigns, or such other depository institution hereinafter appointed by the Company pursuant to the terms of this Indenture.

 

“ Ex-Dividend Date ” means, in respect of a dividend or distribution to holders of Common Stock, the first date upon which a sale of the Common Stock does not automatically transfer the right to receive the relevant dividend or distribution from the seller of the Common Stock to its buyer.

 

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“ Excess of Specified Percentage Certifications ” means the certifications, set forth in Item 2 or Item 3 of the Conversion Notice, that, for purposes of applying Section 382 to the Company, the Holder or any of its Related Persons (i) is or was a 5% Shareholder with respect to the Company at any time during the Section 382 Testing Period ending on the applicable Conversion Date or (ii) would as a result of the conversion of the Securities the subject of such Conversion Notice become a 5% Shareholder with respect to the Company.

 

“ Exchange Act ” means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder.

 

“ Fair Market Value ” means the amount that a willing buyer would pay a willing seller in an arm’s length transaction.

 

“ Five Day VWAP ” means the arithmetic average of the Daily VWAP for the five consecutive Trading Days ending two Trading Days prior to the applicable Conversion Date.

 

A “ Fundamental Change ” shall be deemed to have occurred at such time after the original issuance of the Securities as any of the following occurs:

 

(1)                                   any “person” or “group” within the meaning of Section 13(d) of the Exchange Act, other than the Company, any Subsidiary of the Company or any employee benefit plan of the Company or any such Subsidiary, files a Schedule TO or any other schedule, form or report under the Exchange Act disclosing that such person or group has become the direct or indirect Beneficial Owner of Common Equity of the Company representing more than 50% of the voting power of the Company’s Common Equity;

 

(2)                                   consummation of any share exchange, consolidation or merger of the Company pursuant to which the Common Stock will be converted into cash, securities or other property or any sale, lease or other transfer (in one transaction or a series of transactions) of all or substantially all of the consolidated assets of the Company and its Subsidiaries, taken as a whole, to any Person other than one of the Company’s Subsidiaries; provided, however, that a transaction where the holders of more than 50% of all classes of the Company’s Common Equity immediately prior to such transaction own, directly or indirectly, more than 50% of all classes of Common Equity of the continuing or surviving corporation or transferee immediately after such event shall not be a Fundamental Change;

 

(3)                                   Continuing Directors cease to constitute at least a majority of the Company’s board of directors;

 

(4)                                   the stockholders of the Company approve any plan or proposal for the liquidation or dissolution of the Company; or

 

(5)                                   the Company’s Common Stock is neither listed on a national securities exchange nor quoted on an established electronic over-the-counter trading market in the United States;

 

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provided, however, that a Fundamental Change shall not be deemed to have occurred if at least 90% of the consideration, excluding cash payments for fractional shares, in the transaction or transactions constituting the Fundamental Change consists of shares of common stock traded on a national securities exchange or which shall be so traded or quoted when issued or exchanged in connection with such Fundamental Change (such securities being referred to as “ Publicly Traded Securities ”) and as a result of such transaction or transactions the Securities become convertible into such Publicly Traded Securities (excluding cash payments for fractional shares) pursuant to the terms of this Indenture.

 

“ GAAP ” means generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as may be approved by a significant segment of the accounting profession as in effect from time to time.

 

“ Global Securities ” means certificated Securities in global form, without interest coupons, substantially in the form of Exhibit A hereto and registered in the name of DTC or a nominee of DTC.

 

“ Holder ” or “ Securityholder ” means the Person in whose name a Security is registered in the Securities Register.

 

“ Indenture ” means this Indenture, as amended or supplemented from time to time.

 

“ Issue Date ” means August 4, 2009.

 

“ Last Reported Sale Price ” of the Common Stock on any date means the closing per-share sale price (or if no closing per-share sale price is reported, the average of the last bid and ask prices or, if more than one in either case, the average of the average last bid and the average last ask prices) on that date as reported on the New York Stock Exchange or, if the Common Stock is not listed on the New York Stock Exchange, then as reported by the NASDAQ Stock Market or the principal other national or regional securities exchange on which the shares of the Common Stock are then traded or, if the Common Stock is not listed or approved for trading on the NASDAQ Stock Market or another national or regional securities exchange, on the principal market (including any established electronic over-the-counter trading market in the United States) on which shares of the Common Stock are then traded. If the Common Stock is not so traded, the “Last Reported Sale Price” of the Common Stock will be the average of the midpoint of the last bid and ask prices for shares of the Common Stock on the relevant date from each of at least three nationally recognized independent investment banking firms selected by the Company for this purpose.

 

“ Make-Whole Five Day VWAP ” means the arithmetic average of the Daily VWAP for the five consecutive Trading Days ending on the sixth Trading Day after the applicable Conversion Date.

 

“ Make-Whole Payment ” means the Additional Voluntary Conversion Interest Payment and the Additional Post-Termination Interest Payment, as applicable.

 

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“ Market Disruption Event ” means (i) failure by the primary United States national securities exchange or market on which the Common Stock is listed, admitted to trading or quoted to open for trading during its regular trading session or (ii) the occurrence or existence prior to 1:00 p.m., New York City time, on any scheduled Trading Day for the Common Stock for an aggregate one half hour period of any suspension or limitation imposed on trading (by reason of movements in price exceeding limits permitted by the stock exchange or otherwise) in the Common Stock or in any options, contracts or future contracts relating to the Common Stock.

 

“ Officer ” means the Chief Executive Officer, the President, the Chief Financial Officer, any Vice President, the Treasurer or the Secretary of the Company.  The term Officer of any Subsidiary Guarantor has a correlative meaning.

 

“ Officers’ Certificate ” means a certificate signed by two Officers or attorneys-in-fact or by an Officer and either an Assistant Treasurer or an Assistant Secretary of the Company or the Subsidiary Guarantors, as applicable.

 

“ Opinion of Counsel ” means a written opinion from legal counsel who is acceptable to the Trustee.  The counsel may be an employee of or counsel to the Company.

 

“ Person ” means any individual, corporation, partnership, joint venture, association, joint-stock company, trust, unincorporated organization, limited liability company, government or any agency or political subdivision hereof or any other entity.

 

“ Preferred Stock ”, as applied to the Capital Stock of any corporation, means Capital Stock of any class or classes (however designated) which is preferred as to the payment of dividends, or as to the distribution of assets upon any voluntary or involuntary liquidation or dissolution of such corporation, over shares of Capital Stock of any other class of such corporation.

 

“ Publicly Traded Securities ” has the meaning provided in the definition of Fundamental Change in this Section 1.01.

 

“ Record Date ” means, in respect of a dividend or distribution to holders of Common Stock, the date fixed for determination of holders of Common Stock entitled to receive such dividend or distribution.

 

“ Redemption Date ” means, with respect to any redemption of Securities, the date of redemption with respect thereto.

 

“ Regular Record Date ” for the payment of interest on the Securities, means the February 1 (whether or not a Business Day) next preceding an interest payment date on February 15 and the August 1 (whether or not a Business Day) next preceding an interest payment date on August 15.

 

“ Related Person ” means, with respect to any Holder, any Person that would be treated as owning shares of Company Stock owned by such Holder at any time during the Section 382 Testing Period ending on the Conversion Date, applying the attribution rules in Section 382, but

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such term shall not include a “public group” as defined in Treasury Regulation Section 1.382-2T(f)(13).

 

“ SEC ” means the United States Securities and Exchange Commission.

 

“ Section 382 ” means Section 382 of the Code and the Treasury Regulations promulgated thereunder.

 

“ Section 382 Testing Period ” has the meaning ascribed to “testing period” in Section 382, as applied to the Company.

 

“ Securities ” has the meaning ascribed to it in the second introductory paragraph of this Indenture.

 

“ Securities Custodian ” means the custodian with respect to the Global Security (as appointed by DTC), or any successor Person thereto and shall initially be the Trustee.

 

“ Securities Register ” means the register of Securities, maintained by the Registrar, pursuant to Section 2.05.

 

“ Senior Credit Facility ” means (i) the Credit Agreement dated as of November 22, 2005, among Pier 1 Imports (U.S.), Inc., as borrower, Bank of America, N.A., as administrative and collateral agent, and the lenders named therein and (ii) any amendment, modification, renewal, extension or refinancing thereof.

 

“ Significant Subsidiary ” means any Subsidiary that would be a “ Significant Subsidiary” of the Company within the meaning of Rule 1-02 under Regulation S-X promulgated by the SEC.

 

“ Specified Percentage Certifications ” means the certifications, set forth in Item 1 of the Conversion Notice, that, for purposes of applying Section 382 to the Company, the Holder and each of its Related Persons, (i) is not and was not a 5% Shareholder with respect to the Company at any time during the Section 382 Testing Period ending on the applicable Conversion Date and (ii) would not as a result of the conversion of the Securities the subject of such Conversion Notice become a 5% Shareholder with respect to the Company.

 

“ Stated Maturity ” means, with respect to any security, the date specified in such security as the fixed date on which the payment of principal of such security is due and payable, including pursuant to any mandatory redemption provision, but shall not include any contingent obligations to repay, redeem or repurchase any such principal prior to the date originally scheduled for the payment thereof.

 

“ Stock Price ” means, in respect of a Fundamental Change, the price per share of Common Stock paid in connection with such Fundamental Change, which shall be equal to (i) if such Fundamental Change is a transaction set forth in clause (2) of the definition thereof, and holders of Common Stock receive only cash in such transaction, the cash amount paid per share of Common Stock and (ii) in all other cases, the average of the Last Reported Sale Prices of

 

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Common Stock over the five Trading-Day period ending on the Trading Day preceding the effective date of such Fundamental Change.

 

“ Subsidiary ” of the Company means (i) a corporation a majority of whose Capital Stock with voting power, under ordinary circumstances, to elect directors is at the time, directly or indirectly, owned by the Company, by the Company and one or more Subsidiaries of the Company or by one or more Subsidiaries of the Company or (ii) any other Person (other than a corporation) in which the Company, one or more Subsidiaries of the Company or the Company and one or more Subsidiaries of the Company, directly or indirectly, at the date of determination thereof, has greater than a 50% ownership interest.

 

“ Subsidiary Guarantee ” means, individually, the guarantee of payment of the Securities by a Subsidiary Guarantor pursuant to the terms of this Indenture and any supplemental indenture hereto (including pursuant to Exhibit B), and, collectively, all such guarantees.  Each such Subsidiary Guarantee will be in the form prescribed by this Indenture.

 

“ Subsidiary Guarantor ” means each Subsidiary of the Company that is a party to the Senior Credit Facility as of the date hereof, as set forth in Schedule A hereto, and any other Subsidiary that executes a Subsidiary Guarantee in accordance with the provisions of this Indenture; provided, however, that upon the release and discharge of any Person from its Subsidiary Guarantee in accordance with this Indenture, such Person shall cease to be a Subsidiary Guarantor;

 

“ Termination Conversion Price ” means, in respect of each $1,000 of Securities, 125% of the Conversion Price.

 

“ TIA ” or “ Trust Indenture Act ” means the Trust Indenture Act of 1939 (15 U.S.C. §§ 77aaa 77bbbb), as in effect on the date of this Indenture, except as provided in Section 9.03.

 

“ Trading Day ” means a day during which (i) trading in the Common Stock generally occurs, (ii) there is no Market Disruption Event and (iii) a Last Reported Sale Price for the Common Stock may be obtained for that day.

 

“ Trustee ” means the party named as such in this Indenture until a successor replaces it and, thereafter, means the successor.

 

“ Trust Officer ” means, when used with respect to the Trustee, the officer within the corporate trust department of the Trustee having direct responsibility for the administration of this Indenture.

 

“ UCC ” means the Uniform Commercial Code as in effect in the State of New York.

 

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Section 1.02.  Other Definitions .

 

Term		Defined in Section
“5% Shareholder Provision Waiver Notice”		12.12
“Adjustment Event”		12.02(l)
“Agent”		3.03
“Agent Members”		2.09
“Authenticating Agent”		2.04
“Certificate of Destruction”		2.14
“Company Notice”		11.03(a)
“Company Notice Date”		11.03(a)
“Company Order”		2.04
“Conversion Date”		12.01(b)
“Conversion Rights Termination Date”		12.10
“Conversion Termination Notice”		12.10(a)
“cross acceleration provision”		6.01
“Defaulted Interest”		2.15
“Determination Date”		12.02(l)
“Event of Default”		6.01
“Expiration Time”		12.02(e)
“Fundamental Change Purchase Date”		11.01
“Fundamental Change Purchase Notice”		11.01(b)
“Fundamental Change Purchase Price”		11.01
“Global Security Legend”		2.03
“Indenture Shares”		12.13(a)
“Initial Dividend Rate”		12.02(d)
“judgment default provision”		6.01
“Legal Holiday”		13.08
“Maximum Shares”		12.13(a)
“Obligations”		10.01
“Old Notes”		12.13(a)
“Paying Agent”		2.05
“Post-Termination Preservation of Conversion Rights Legend”		2.03
“Purchase Date”		11.02(a)
“Purchase Notice”		11.02(a)(i)
“Purchase Price”		11.02(a)
“Reorganization Event”		12.05(a)
“Reference Property”		12.05(a)
“Registrar”		2.05
“Redemption Price”		5.01
“Settlement Amount”		12.01(c)
“Special Interest Payment Date”		2.15(a)
“Special Record Date”		2.15(a)
“Spin-Off”		12.02(c)
“Successor Company”		4.01(a)

 

Section 1.03.  Incorporation by Reference of Trust Indenture Act .  Whenever this Indenture incorporates a provision of the TIA, the provision is incorporated by reference in and made a part of this Indenture. To the extent applicable, the following TIA terms used in this Indenture have the following meanings:

 

“ Commission ” means the SEC.

 

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“ 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 indenture securities means the Company and any other obligor on the Securities.

 

All other TIA terms used in this Indenture that are defined by the TIA, defined in the TIA by reference to another statute or defined by SEC rule have the meanings assigned to them by such definitions.

 

Section 1.04.  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 1.05.  Section 382 Interpretive Provisions .  For purposes of this Indenture:

 

(a)                                   ownership of Company Stock shall be determined using the rules applicable to the Company under Section 382;

 

(b)                                  the Securities shall not be treated as having been converted for purposes of Section 382 prior to the actual conversion thereof; and

 

(c)                                   Article 12 shall be interpreted and applied in a manner consistent with the intent of eliminating increases in the ownership of Company Stock by 5% Shareholders other than public groups as determined for purposes of applying Section 382 to the Company.

 

ARTICLE 2
THE SECURITIES

 

Section 2.01.  Title; Amount and Issue of Securities; Principal and Interest .  (a) The Securities shall be known and designated as the “9.0% Convertible Senior Notes due 2036” of the Company.  The aggregate principal amount of Securities which may be authenticated and delivered under this Indenture is initially limited to $86.059 million, except for Securities authenticated and delivered upon registration of, transfer of, or in exchange for, or in lieu of

 

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other Securities pursuant to Section 2.04, Section 2.08, 2.09, 2.10, 2.11, 2.13, 5.07, 9.05, 11.03, 12.01, 12.09 or 12.10; provided that additional Securities may be issued in an unlimited aggregate principal amount from time to time thereafter as set forth pursuant to Section 2.04.  The Securities shall be issuable in denominations of $1,000 or integral multiples thereof.

 

(b)            The Securities shall mature on February 15, 2036.

 

(c)            Interest on the Securities shall accrue from and including the date specified on the face of such Securities until the principal thereof is paid or made available for payment.  Interest shall be payable semi-annually in arrears on February 15 and August 15 in each year, commencing February 15, 2010.

 

(d)            A Holder of any Security after 5:00 p.m., New York City time, on a Regular Record Date shall be entitled to receive interest, on such Security on the corresponding interest payment date.  Holders of Securities after 5:00 p.m., New York City time, on a Regular Record Date will receive payment of interest payable on the corresponding interest payment date notwithstanding the conversion of such Securities at any time after the close of business on such Regular Record Date.  Securities surrendered for conversion during the period after 5:00 p.m., New York City time, on any Regular Record Date to 9:00 a.m., New York City time, on the corresponding interest payment date must be accompanied by payment of an amount equal to the interest that the Holder is to receive on the Securities.  Notwithstanding the foregoing, no such payment of interest need be made by any converting Holder (i) if the Company has specified a Redemption Date that is after a Regular Record Date and on or prior to the third Trading Day after the corresponding interest payment date, (ii) if the Company has specified a Fundamental Change Purchase Date during such period, or (iii) to the extent of any overdue interest existing at the time of conversion of such Security.  Except where Securities surrendered for conversion must be accompanied by payment as described above, no interest on converted Securities will be payable by the Company on any interest payment date subsequent to the date of conversion and delivery of the cash and shares of Common Stock, if applicable, pursuant to Article 12 hereunder, together with any cash payment for any fractional share, upon conversion will be deemed to satisfy the Company’s obligation to pay the principal amount of the Securities and accrued and unpaid interest, if any, to, but not including, the related Conversion Date.

 

(e)            Principal of (and any portion of the Make-Whole Payment and Settlement Amount payable in cash, if any) and interest on, Global Securities shall be payable to DTC in immediately available funds.

 

(f)             Principal on Definitive Securities shall be payable at the office or agency of the Company maintained for such purpose in the Borough of Manhattan, The City of New York, and the Company initially designates as such office the office of the Trustee acting through The Bank of New York Mellon at 101 Barclay Street, 7 East, New York, NY 10286, Attention: Corporate Trust.  Interest (and any portion of the Make-Whole Payment and Settlement Amount payable in cash, if any) on Definitive Securities will be payable (i) to Holders having an aggregate principal amount of $5,000,000 or less, by check mailed to the Holders of these Securities and (ii) to Holders having an aggregate principal amount of more than $5,000,000, either by check mailed to each Holder or, upon application by a Holder to the Registrar not later than the relevant Regular Record Date, by wire transfer in immediately available funds to that Holder’s account

 

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within the United States, which application shall remain in effect until the Holder notifies, in writing, the Registrar to the contrary.

 

Section 2.02.  Form of Securities .

 

(a)            Except as otherwise provided pursuant to this Section 2.02, the Securities are issuable in fully registered form without coupons in substantially the form of Exhibit A hereto, with such applicable legends as are provided for in Section 2.03.  The Securities are not issuable in bearer form.  The terms and provisions contained in the form of Security shall constitute, and are hereby expressly made, a part of this Indenture and to the extent applicable, the Company, the Subsidiary Guarantors and the Trustee, by their execution and delivery of this Indenture, expressly agree to such terms and provisions and to be bound thereby; provided, that to the extent that any provision of the Securities conflicts with the express provisions of this Indenture, this Indenture shall govern and be controlling.  Any of the Securities may have such letters, numbers or other marks of identification and such notations, legends and endorsements as the officers executing the same may approve (execution thereof to be conclusive evidence of such approval) and as are not inconsistent with the provisions of this Indenture, or as may be required to comply with any law or with any rule or regulation made pursuant thereto or with any rule or regulation of any securities exchange or automated quotation system on which the Securities may be listed or designated for issuance, or to conform to usage.

 

(b)            The Securities shall be issued initially in the form of one or more permanent Global Securities, with the applicable legends as provided in Section 2.03.  Each Global Security shall be duly executed by the Company and authenticated and delivered by the Trustee, and shall be registered in the name of DTC or its nominee and retained by the Trustee, as Securities Custodian, at its corporate trust office, for credit to the accounts of the Agent Members holding the Securities evidenced thereby.  The aggregate principal amount of the Global Securities may from time to time be increased or decreased by adjustments made on the records of the Trustee, as Securities Custodian, and of DTC or its nominee, as hereinafter provided.

 

Section 2.03.  Legends.

 

(a)            Global Security Legend

 

Each Global Security shall bear the following legend (the “ Global Security Legend ”) on the face thereof:

 

“UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), NEW YORK, NEW YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY

 

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PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

 

TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC 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 THE INDENTURE REFERRED TO IN THE TERMS OF SECURITIES ATTACHED HERETO.”

 

(b)            Legend for Definitive Securities

 

Definitive Securities shall bear a legend substantially in the following form:

 

“THIS SECURITY WILL NOT BE ACCEPTED IN EXCHANGE FOR A BENEFICIAL INTEREST IN A GLOBAL SECURITY UNLESS THE HOLDER OF THIS SECURITY, SUBSEQUENT TO SUCH EXCHANGE, WILL HOLD NO SECURITIES.”

 

(c)            Post-Termination Preservation of Conversion Rights Legend

 

In the event that after the date of delivery of the Conversion Termination Notice and prior to the Conversion Rights Termination Date, a Holder submits a Conversion Notice in respect of which such Holder provides the Excess of Specified Percentage Certifications, any Securities that such Holder consequently cannot convert shall bear a legend in substantially the following form:

 

“THE HOLDER OF THIS SECURITY CONTINUES TO POSSESS THE RIGHT TO CONVERT THIS SECURITY INTO COMMON STOCK ON AND AFTER THE CONVERSION RIGHTS TERMINATION DATE IN ACCORDANCE WITH THE TERMS OF ARTICLE 12 OF THE INDENTURE.”

 

Section 2.04.  Execution and Authentication .  One Officer shall sign the Securities for the Company by manual or facsimile signature.  If an Officer whose signature is on a Security no longer holds that office at the time the Trustee authenticates the Security, the Security shall be valid nevertheless.

 

A Security shall not be valid until an authorized signatory of the Trustee manually authenticates the Security.  The signature of the Trustee on a Security shall be conclusive evidence that such Security has been duly and validly authenticated and issued under this Indenture.  A Security shall be dated the date of its authentication.

 

At any time and from time to time after the execution and delivery of this Indenture, the Company may deliver Securities executed by the Company in an unlimited aggregate principal amount to the Trustee for authentication, together with a written order of the Company signed by two Officers or by an Officer and either an Assistant Treasurer or an Assistant Secretary of the Company (the “ Company Order ”) for the authentication and delivery of such Securities, and the Trustee in accordance with such Company Order shall authenticate and deliver such Securities as in this Indenture provided and not otherwise.  All Securities issued on the Issue

 

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Date shall be identical in all respects with any such Securities authenticated and delivered thereafter, other than issue dates, the date from which interest accrues, appropriate CUSIP numbers or other identifying notations and any changes relating thereto.  Notwithstanding anything to the contrary contained in this Indenture, subject to Section 2.12, all Securities issued under this Indenture shall vote and consent together on all matters as one class and no series of Securities will have the right to vote or consent as a separate class on any matter.

 

The Trustee may appoint an agent (the “ Authenticating Agent ”) reasonably acceptable to the Company to authenticate the Securities.  Initially, the Trustee will act as the Authenticating Agent.  Any such instrument shall be evidenced by an instrument signed by a Trust Officer of the Trustee, a copy of which shall be furnished to the Company.  Unless limited by the terms of such appointment, any such Authenticating Agent may authenticate Securities whenever the Trustee may do so.  Each reference in this Indenture to authentication by the Trustee includes authentication by the Authenticating Agent.  An Authenticating Agent has the same rights as any Registrar, Paying Agent or agent for service of notices and demands.

 

In case the Company or any Subsidiary Guarantor, pursuant to Article 4 or Section 10.02, shall be consolidated or merged with or into any other Person or shall convey, transfer, lease or otherwise dispose of its properties and assets substantially as an entirety to any Person, and the successor Person resulting from such consolidation, or surviving such merger, or into which the Company or any Subsidiary Guarantor shall have been merged, or the Person which shall have received a conveyance, transfer, lease or other disposition as aforesaid, shall have executed an indenture supplemental hereto with the Trustee pursuant to Article 4, any of the Securities authenticated or delivered prior to such consolidation, merger, conveyance, transfer, lease or other disposition may, from time to time, at the request of the successor Person, be exchanged for other Securities executed in the name of the successor Person with such changes in phraseology and form as may be appropriate, but otherwise in substance of like tenor as the Securities surrendered for such exchange and of like principal amount; and the Trustee, upon Company Order of the successor Person, shall authenticate and deliver Securities as specified in such order for the purpose of such exchange.  If Securities shall at any time be authenticated and delivered in any new name of a successor Person pursuant to this Section 2.04 in exchange or substitution for or upon registration of transfer of any Securities, such successor Person, at the option of the Holders but without expense to them, shall provide for the exchange of all Securities at the time outstanding for Securities authenticated and delivered in such new name.

 

Section 2.05.  Registrar and Paying Agent .  The Company shall maintain an office or agency where Securities may be presented for registration of transfer or for exchange (the “ Registrar ”) and an office or agency where Securities may be presented for payment (the “ Paying Agent ”).  The Company shall cause each of the Registrar and the Paying Agent to maintain an office or agency in the Borough of Manhattan, The City of New York, and the Company initially designates as Registrar and Paying Agent the Trustee acting through The Bank of New York Mellon at 101 Barclay Street, 7 East, New York, NY 10286, Attention: Corporate Trust.  The Registrar shall keep a register of the Securities and of their transfer and exchange (the “ Securities Register ”).  The Company may have one or more co-registrars and one or more additional paying agents.  The term “ Paying Agent ” includes any additional paying agent and the term “ Registrar ” includes any co-registrar.

 

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The Company shall enter into an appropriate agency agreement with any Registrar, Paying Agent or co-registrar not a party to this Indenture, which shall incorporate the terms of the TIA.  The agreement shall implement the provisions of this Indenture that relate to such agent.  The Company shall notify the Trustee of the name and address of each such agent.  If the Company fails to maintain a Registrar or Paying Agent, the Trustee shall act as such and shall be entitled to appropriate compensation therefor pursuant to Section 7.07.  The Company or any of its domestically organized, wholly owned Subsidiaries may act as Paying Agent, Registrar, co registrar or transfer agent.

 

The Company may remove any Registrar or Paying Agent upon written notice to such Registrar or Paying Agent and to the Trustee; provided, however, that no such removal shall become effective until (i) acceptance of any appointment by a successor as evidenced by an appropriate agreement entered into by the Company and such successor Registrar or successor Paying Agent, as the case may be, and delivered to the Trustee or (ii) notification to the Trustee that the Trustee shall serve as Registrar or Paying Agent until the appointment of a successor in accordance with clause (i) above.  The Registrar or Paying Agent may resign at any time upon written notice to the Company and the Trustee.

 

Section 2.06.  Paying Agent to Hold Money in Trust .  By no later than 11:00 a.m., New York City time, on the date on which any principal of or interest on any Security or any Additional Voluntary Conversion Interest Payment or Additional Post-Termination Interest Payment thereon is due and payable, the Company shall deposit with the Paying Agent a sum sufficient in immediately available funds to pay such principal or interest, Additional Voluntary Conversion Interest Payment or Additional Post-Termination Interest Payment when due.  The Company shall require each Paying Agent (other than the Trustee) to agree in writing that such Paying Agent shall hold in trust for the benefit of Securityholders or the Trustee all money held by such Paying Agent for the payment of principal of or interest on, or Additional Voluntary Conversion Interest Payment or Additional Post-Termination Interest Payment in respect of, the Securities and shall notify the Trustee in writing of any default by the Company or any Subsidiary Guarantor in making any such payment.  If the Company or a Subsidiary acts as Paying Agent, it shall segregate the money held by it as Paying Agent and hold it as a separate trust fund.  The Company at any time may require a Paying Agent (other than the Trustee) to pay all money held by it to the Trustee and to account for any funds disbursed by such Paying Agent.  Upon complying with this Section 2.06, the Paying Agent (if other than the Company or a Subsidiary) shall have no further liability for the money delivered to the Trustee.  Upon any bankruptcy, reorganization or similar proceeding with respect to the Company, the Trustee shall serve as Paying Agent for the Securities.

 

Section 2.07.  Securityholder Lists .  The Trustee shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of Securityholders and shall otherwise comply with TIA Section 312(a).  If the Trustee is not the Registrar, or to the extent otherwise required under the TIA, the Company, on its own behalf and on behalf of each of the Subsidiary Guarantors, shall furnish or cause the Registrar to furnish to the Trustee, in writing at least five Business Days before each interest payment date and at such other times as the Trustee may request in writing, a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of Securityholders and the Company shall otherwise comply with TIA Section 312(a).

 

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Section 2.08.  General Provisions Relating to Transfer and Exchange .  The Securities are issuable only in registered form.  A Holder may transfer a Security only by written application to the Registrar stating the name of the proposed transferee and otherwise complying with the terms of this Indenture.  No such transfer shall be effected until, and such transferee shall succeed to the rights of a Holder only upon, final acceptance and registration of the transfer by the Registrar in the Securities Register.  Furthermore, any Holder of a Global Security shall, by acceptance of such Global Security, agree that transfers of beneficial interests in such Global Security may be effected only through a book-entry system maintained by the Holder of such Global Security (or its agent) and that ownership of a beneficial interest in the Global Security shall be required to be reflected in a book-entry.

 

When Securities are presented to the Registrar with a request to register the transfer or to exchange them for an equal aggregate principal amount of Securities of other authorized denominations, the Registrar shall register the transfer or make the exchange as requested if its requirements for such transactions are met (including that such Securities are duly endorsed or accompanied by a written instrument of transfer duly executed by the Holder thereof or by an attorney who is authorized in writing to act on behalf of the Holder).  Subject to Section 2.04, to permit registrations of transfers and exchanges, the Company shall execute and the Trustee shall authenticate Securities at the Registrar’s request.  No service charge shall be made for any registration of transfer or exchange or redemption of the Securities, but the Company may require payment of a sum sufficient to cover any transfer tax or similar governmental charge payable in connection therewith (other than any such transfer taxes or other similar governmental charge payable upon exchanges in connection with which a Security is issued to a Person other than the Holder submitting the Security for exchange).

 

Neither the Company nor the Registrar shall be required to exchange or register a transfer of any Securities:

 

(a)            for a period of 15 days prior to the mailing of a notice of redemption of Securities selected for redemption under Article 5;

 

(b)            so selected for redemption or, if a portion of any Security is selected for redemption, the portion thereof selected for redemption; or

 

(c)            surrendered for conversion or, if a portion of any Security is surrendered for conversion, the portion thereof surrendered for conversion.

 

The Trustee shall have no obligation or duty to monitor, determine or inquire as to compliance with any restrictions on transfer imposed under this Indenture or under applicable law with respect to any transfer of any interest in any Security (including any transfers between beneficial owners of any Global Security) other than to require delivery of such certificates and other documentation or evidence as are expressly required by, and to do so if and when expressly required by the terms of, this Indenture, and to examine the same to determine substantial compliance as to form with the express requirements hereof.

 

Section 2.09.  Book-Entry Provisions for the Global Securities .   (a) The Global Securities initially shall:

 

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(i)             be registered in the name of DTC (or a nominee thereof);

 

(ii)            be delivered to the Trustee as custodian for DTC; and

 

(iii)           bear the Global Security Legend set forth in 2.03(a).

 

Members of, or participants in, DTC (“ Agent Members ”) shall have no rights under this Indenture with respect to any Global Security held on their behalf by DTC, or the Trustee as its custodian, or under such Global Security, and DTC may be treated by the Company, the Trustee and any agent of the Company or the Trustee as the absolute owner of such Global Security for all purposes whatsoever.  Notwithstanding the foregoing, nothing contained herein shall prevent the Company, the Trustee or any agent of the Company or Trustee from giving effect to any written certification, proxy or other authorization furnished by DTC or impair, as between DTC and the Agent Members, the operation of customary practices governing the exercise of the rights of a Holder of any Security.

 

(b)            The Holder of a Global Security may grant proxies and otherwise authorize any Person, including Agent Members 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.

 

(c)            A Global Security may not be transferred, in whole or in part, to any Person other than DTC (or a nominee thereof), and no such transfer to any such other Person may be registered.  Beneficial interests in a Global Security may be transferred in accordance with the rules and procedures of DTC.

 

(d)            If at any time:

 

(i)             DTC notifies the Company in writing that it is unwilling or unable to continue to act as depositary for the Global Securities and a successor depositary for the Global Securities is not appointed by the Company within 90 days of such notice;

 

(ii)            DTC ceases to be registered as a “ clearing agency ” under the Exchange Act and a successor depositary for the Global Securities is not appointed by the Company within 90 days of such cessation;

 

(iii)           the Company, at its option, notifies the Trustee in writing that it elects to cause the issuance of the Definitive Securities under this Indenture in exchange for all or any part of the Securities represented by a Global Security or Global Securities, subject to the procedures of DTC; or

 

(iv)           an Event of Default has occurred and is continuing and the Registrar has received a request from DTC for the issuance of Definitive Securities in exchange for such Global Security or Global Securities;

 

DTC shall surrender such Global Security or Global Securities to the Trustee for cancellation and the Company shall execute, and the Trustee, upon receipt of an Officers’ Certificate and Company Order for the authentication and delivery of Securities, shall authenticate and deliver in exchange for such Global Security or Global Securities, Definitive Securities in an aggregate

 

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principal amount equal to the aggregate principal amount of such Global Security or Global Securities.  Such Definitive Securities shall be registered in such names as DTC shall identify in writing as the beneficial owners of the Securities represented by such Global Security or Global Securities (or any nominee thereof).

 

(e)            Notwithstanding the foregoing, in connection with any transfer of beneficial interests in a Global Security to the beneficial owners thereof pursuant to Section 2.09(d), the Registrar shall reflect on its books and records the date and a decrease in the principal amount of such Global Security in an amount equal to the principal amount of the beneficial interests in such Global Security to be transferred.

 

Section 2.10.  New Securities Upon Partial Conversion or After the Conversion Rights Termination Date .  In the event that a Holder delivers Securities for conversion but is only able to convert a portion of such Securities pursuant the terms of this Indenture, the Company shall execute and the Trustee or the Authenticating Agent shall authenticate new Securities as set forth in Section 12.09(c) and Section 12.10(f).  In addition, the Company shall also execute and the Trustee or the Authenticating Agent shall also authenticate new Securities in the event that a Holder preserves its conversion rights in respect of its Securities on and after the Conversion Rights Termination Date in accordance with Section 12.10(h).

 

Section 2.11.  Mutilated, Destroyed, Lost or Stolen Securities .  If a mutilated Security is surrendered to the Registrar or if the Holder of a Security claims that the Security has been lost, destroyed or wrongfully taken, the Company shall issue and the Trustee shall authenticate a replacement Security if the requirements of Section 8-405 of the UCC are met, such that the Securityholder (a) satisfies the Company or the Trustee within a reasonable time after such Securityholder has notice of such loss, destruction or wrongful taking and the Registrar has not registered a transfer prior to receiving such notification, (b) makes such request to the Company or Trustee prior to the Security being acquired by a protected purchaser as defined in Section 8-303 of the UCC and (c) satisfies any other reasonable requirements of the Trustee.  Such Holder shall furnish an indemnity bond sufficient in the judgment of the Company and the Trustee to protect the Company, the Trustee, the Paying Agent and the Registrar from any loss which any of them may suffer if a Security is replaced, and, in the absence of notice to the Company, any Subsidiary Guarantor or the Trustee that such Security has been acquired by a bona fide purchaser, the Company shall execute and upon Company Order the Trustee shall authenticate and make available for delivery, 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, bearing a number not contemporaneously outstanding.

 

In case any such mutilated, destroyed, lost or stolen Security has become due and payable, the Company in its discretion may, instead of issuing a new Security, pay such Security.

 

Upon the issuance of any new Security under this Section 2.11, the Company may require the payment by the Holder 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) in connection therewith.

 

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Every new Security issued pursuant to this Section 2.11 in lieu of any mutilated, destroyed, lost or stolen Security shall constitute an original additional contractual obligation of the Company, any Subsidiary Guarantor (if applicable) and any other obligor upon the Securities, whether or not the mutilated, 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 ratably with any and all other Securities duly issued hereunder.

 

The provisions of this Section 2.11 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 2.12.  Outstanding Securities .  Securities outstanding at any time are all Securities authenticated by the Trustee except for those cancelled by it, those delivered to it for cancellation and those described in this Section 2.12 as not outstanding.  A Security does not cease to be outstanding in the event the Company or a Subsidiary of the Company holds the Security; provided, however, that (i) for purposes of determining which Securities are outstanding for consent or voting purposes hereunder, the provisions of Section 13.06 shall apply and (ii) in determining whether the Trustee shall be protected in making a determination whether the Holders of the requisite principal amount of outstanding Securities are present at a meeting of Holders of Securities for quorum purposes or have consented to or voted in favor of any request, demand, authorization, direction, notice, consent, waiver, amendment or modification hereunder, or relying upon any such quorum, consent or vote, only Securities which a Trust Officer of the Trustee actually knows to be held by the Company or an Affiliate of the Company shall not be considered outstanding.

 

If a Security is replaced or paid pursuant to Section 2.11, it ceases to be outstanding unless the Trustee and the Company receive proof satisfactory to them that the replaced Security is held by a bona fide purchaser.

 

If the Paying Agent segregates and holds in trust, in accordance with this Indenture, on a Redemption Date or at Stated Maturity, money sufficient to pay all principal and interest payable on that date with respect to the Securities (or portions thereof) to be redeemed or maturing, as the case may be, and the Paying Agent is not prohibited from paying such money to the Securityholders on that date pursuant to the terms of this Indenture, then on and after that date such Securities (or portions thereof) cease to be outstanding and interest on them ceases to accrue.

 

Section 2.13.  Temporary Securities .  In the event that Definitive Securities are to be issued under the terms of this Indenture, until such Definitive Securities are ready for delivery, the Company may prepare and upon receipt of a Company Order the Trustee shall authenticate temporary Securities.  Temporary Securities shall be substantially in the form of Definitive Securities but may have variations that the Company considers appropriate for temporary Securities.  Without unreasonable delay, the Company shall prepare and upon receipt of a Company Order the Trustee shall authenticate Definitive Securities.  After the preparation of Definitive Securities, the temporary Securities shall be exchangeable for Definitive Securities upon surrender of the temporary Securities at any office or agency maintained by the Company for that purpose and such exchange shall be without charge to the Holder.  Upon surrender for

 

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cancellation of any one or more temporary Securities, the Company shall execute, and the Trustee shall authenticate and make available for delivery in exchange therefor, one or more Definitive Securities representing an equal principal amount of Securities.  Until so exchanged, the Holder of temporary Securities shall in all respects be entitled to the same benefits under this Indenture as a Holder of Definitive Securities.

 

Section 2.14.  Cancellation .  The Company at any time may deliver Securities to the Trustee for cancellation.  The Registrar and the Paying Agent shall forward to the Trustee any Securities surrendered to them for registration of transfer, exchange or payment.  The Trustee and no one else shall cancel all Securities surrendered for registration of transfer, exchange, payment or cancellation and dispose of such Securities in accordance with its internal policies and customary procedures including delivery of a certificate (a “ Certificate of Destruction ”) describing such Securities disposed (subject to the record retention requirements of the Exchange Act) or deliver canceled Securities to the Company pursuant to written direction by an Officer.  The Company may not issue new Securities to replace Securities it has paid for or delivered to the Trustee for cancellation for any reason other than in connection with a transfer or exchange.

 

At such time as all beneficial interests in a Global Security have either been exchanged for Definitive Securities, transferred, redeemed, repurchased or canceled, such Global Security shall be returned by DTC to the Trustee for cancellation or retained and canceled by the Trustee.  At any time prior to such cancellation, if any beneficial interest in a Global Security is exchanged for Definitive Securities, transferred in exchange for an interest in another Global Security, redeemed, repurchased or canceled, the principal amount of Securities represented by such Global Security shall be reduced and an adjustment shall be made on the books and records of the Trustee (if it is then the Securities Custodian for such Global Security) with respect to such Global Security, by the Trustee or the Securities Custodian, to reflect such reduction.

 

Section 2.15.  Payment of Interest; Defaulted Interest .  Interest on any Security which is payable, and is punctually paid or duly provided for, on any interest payment date shall be paid to the Person in whose name such Security (or one or more predecessor Securities) is registered at the close of business on the Regular Record Date for such payment at the office or agency of the Company maintained for such purpose pursuant to Section 2.05.

 

Any interest on any Security which is payable, but is not paid when the same becomes due and payable and such nonpayment continues for a period of 30 days, shall forthwith cease to be payable to the Holder on the Regular Record Date, and such defaulted interest and (to the extent lawful) interest on such defaulted interest at the rate borne by the Securities (such defaulted interest and interest thereon herein collectively called “ Defaulted Interest ”) shall be paid by the Company, at its election in each case, as provided in clause (a) or (b) below:

 

(a)            The Company may elect to make payment of any Defaulted Interest to the Persons in whose names the Securities (or their respective predecessor Securities) are registered at the close of business on a Special Record Date (as defined below) for the payment of such Defaulted Interest, which shall be fixed in the following manner.  The Company shall notify the Trustee in writing of the amount of Defaulted Interest proposed to be paid on each Security and the date (not less than 30 days after such notice) of the proposed payment (the “ Special Interest Payment Date ”), and at the same time the Company shall deposit with the Trustee an amount of

 

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money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest or shall make arrangements satisfactory to the Trustee for such deposit prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the Persons entitled to such Defaulted Interest as in this clause provided.  Thereupon the Trustee shall fix a record date (the “ Special Record Date ”) for the payment of such Defaulted Interest which shall be not more than 15 days and not less than 10 days prior to the Special Interest Payment Date and not less than 10 days after the receipt by the Trustee of the notice of the proposed payment.  The Trustee shall promptly notify the Company of such Special Record Date, and in the name and at the expense of the Company, shall cause notice of the proposed payment of such Defaulted Interest and the Special Record Date and Special Interest Payment Date therefor to be given in the manner provided for in Section 13.02, not less than 10 days prior to such Special Record Date.  Notice of the proposed payment of such Defaulted Interest and the Special Record Date and Special Interest Payment Date therefor having been so given, such Defaulted Interest shall be paid on the Special Interest Payment Date to the Persons in whose names the Securities (or their respective predecessor Securities) are registered at the close of business on such Special Record Date and shall no longer be payable pursuant to the following clause (b).

 

(b)            The Company may make payment of any Defaulted Interest in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Securities may be listed, and upon such notice as may be required by such exchange, if, after notice given by the Company to the Trustee of the proposed payment pursuant to this clause, such manner of payment shall be deemed practicable by the Trustee.

 

Subject to the foregoing provisions of this Section 2.15, each Security delivered under this Indenture upon registration of, transfer of or in exchange for or in lieu of any other Security shall carry the rights to interest accrued and unpaid, and to accrue, which were carried by such other Security.

 

Section 2.16.  Computation of Interest and Make-Whole Payment .  Interest and Make-Whole Payment, if any, on the Securities shall be computed on the basis of a 360-day year of twelve 30-day months.

 

Section 2.17.  Cusip and ISIN Numbers .  The Company in issuing the Securities may use “CUSIP” and “ISIN” numbers (if then generally in use) and, if so, the Trustee shall use “CUSIP” and “ISIN” 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 CUSIP or ISIN numbers.  The Company shall promptly notify the Trustee in writing of any change in the CUSIP and ISIN numbers.

 

ARTICLE 3
COVENANTS

 

Section 3.01.  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 and in this

 

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Indenture.  All payments made or due pursuant to the Securities and this Indenture shall be considered paid on the date due if on such date the Trustee or the Paying Agent holds in accordance with this Indenture immediately available funds sufficient to pay all such amounts then due and the Trustee or the Paying Agent, as the case may be, is not prohibited from paying such money to the Securityholders on that date pursuant to the terms of this Indenture.

 

The Company shall pay interest on overdue principal at the rate specified therefor in the Securities, and it shall pay interest on overdue installments of interest at the same rate to the extent lawful.

 

Notwithstanding anything to the contrary contained in this Indenture, the Company may, to the extent it is required to do so by law, deduct or withhold income or other similar taxes imposed by the United States of America from all payments hereunder.

 

Section 3.02.  Financial Statements.  In the event and for so long as the Company is not subject to Section 13 or 15(d) of the Exchange Act, it shall file with the Trustee and cause to be mailed to each Holder at such Holder’s registered address, upon the request of any Holder or beneficial holder of the Securities or the Common Stock issued upon conversion thereof, and make available to such Holder or beneficial holder of such Securities or Common Stock in connection with any sale thereof and any prospective purchaser of Securities or Common Stock designated by such Holder or beneficial holder, the information required pursuant to Rule 144(c)(2) under the Securities Act and it will take such further action as any Holder or beneficial holder of such Securities or Common Stock may reasonably request, all to the extent required from time to time to enable such Holder or beneficial holder to sell its Securities or Common Stock without registration under the Securities Act within the limitation of the exemption provided by Rule 144 of the Securities Act, as such Rule may be amended from time to time.

 

Delivery of such reports, information and documents to the Trustee is for informational purposes only and the Trustee’s receipt of such shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Company’s compliance with any of its covenants hereunder (as to which the Trustee is entitled to rely exclusively on Officers’ Certificates).

 

Section 3.03.  Maintenance of Office or Agency .  The Company will maintain in the Borough of Manhattan, The City of New York, an office or agency where the Securities may be presented or surrendered for payment, where, if applicable, the Securities may be surrendered for registration of transfer or exchange and where notices and demands to or upon the Company in respect of the Securities and this Indenture may be served.  The agency of the Trustee (the “ Agent ”) currently located in The City of New York shall be such office or agency of the Company, unless the Company shall designate and maintain some other office or agency for one or more of such purposes.  The Company will give prompt written notice to the Trustee of any change in the location of any such office or agency.  If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Agent of the Trustee, and the Company hereby appoints the Trustee as its agent to receive all such presentations, surrenders, notices and demands.

 

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The Company may also from time to time designate one or more other offices or agencies (in or outside of The City of New York) where the Securities may be presented or surrendered for any or all such purposes and may from time to time rescind any such designation; provided, however, that no such designation or rescission shall in any manner relieve the Company of its obligation to maintain an office or agency in The City of New York for such purposes.  The Company will give prompt written notice to the Trustee of any such designation or rescission and any change in the location of any such other office or agency.

 

Section 3.04.  Corporate Existence .   Except as otherwise provided in Article 4 and Section 10.02(b), the Company will do or cause to be done all things necessary to preserve and keep in full force and effect its corporate existence and the corporate, partnership, limited liability company or other existence of each Subsidiary Guarantor and the rights (charter and statutory), licenses and franchises of the Company and each Subsidiary Guarantor; provided, however, that the Company shall not be required to preserve any such right, license or franchise or the corporate, partnership, limited liability company or other existence of any Subsidiary Guarantor if the Board of Directors of the Company shall determine that the preservation thereof is no longer desirable in the conduct of the business of the Company and each of its Subsidiaries, taken as a whole, and that the loss thereof is not, and will not be, disadvantageous in any material respect to the Holders.

 

Section 3.05.  Payment of Taxes and Other Claims .  The Company will pay or discharge or cause to be paid or discharged, before the same shall become delinquent, (i) all material taxes, assessments and governmental charges levied or imposed upon the Company or any Subsidiary or upon the income, profits or property of the Company or any Subsidiary and (ii) all lawful claims for labor, materials and supplies, which, if unpaid, might by law become a material liability or lien upon the property of the Company or any Subsidiary; provided, however, that the Company shall not be required to pay or discharge or cause to be paid or discharged any such tax, assessment, charge or claim whose amount, applicability or validity is being contested in good faith by appropriate proceedings and for which appropriate reserves, if necessary (in the good faith judgment of management of the Company), are being maintained in accordance with GAAP or where the failure to effect such payment will not be disadvantageous to the Holders.

 

Section 3.06.  Compliance Certificate .  The Company shall deliver to the Trustee within 120 days after the end of each fiscal year of the Company an Officers’ Certificate, one of the signers of which shall be the principal executive officer, principal financial officer or principal accounting officer of the Company, stating that in the course of the performance by the signers of their duties as Officers of the Company they would normally have knowledge of any Default or Event of Default and whether or not the signers know of any Default or Event of Default that occurred during such period.  If they do, the certificate shall describe the Default or Event of Default, its status and the action the Company is taking or proposes to take with respect thereto.  The Company also shall comply with TIA Section 314(a)(4).

 

Section 3.07.  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 purpose of this Indenture.

 

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Section 3.08.  Statement by Officers as to Default .  The Company shall deliver to the Trustee, as soon as possible and in any event within 30 days after the Company becomes aware of the occurrence of any Default or Event of Default, an Officers’ Certificate setting forth the details of such Default or Event of Default, its status and the action which the Company proposes to take with respect thereto.

 

ARTICLE 4
SUCCESSOR COMPANY

 

Section 4.01.  Consolidation, Merger and Sale of Assets .  The Company shall not consolidate with or merge with or into, or convey, transfer or lease all or substantially all its assets to, another Person, unless:

 

(a)            the resulting, surviving or transferee Person (the “ Successor Company ”) if not the Company shall be a corporation, partnership, trust or limited liability company organized and existing under the laws of the United States of America, any State thereof or the District of Columbia and the Successor Company (if not the Company) shall expressly assume, by supplemental indenture, executed and delivered to the Trustee, in form satisfactory to the Trustee, all the obligations of the Company under the Securities and this Indenture;

 

(b)            immediately after giving effect to such transaction, no Default or Event of Default shall have occurred and be continuing;

 

(c)            each Subsidiary Guarantor (unless it is the other party to the transactions described above, in which case clause (a) and Section 10.02 shall apply) shall have by supplemental indenture confirmed that its Subsidiary Guarantee shall apply for such Person’s obligations in respect of this Indenture and the Securities shall continue to be in effect; and

 

(d)            the Company shall have delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that such consolidation, merger or transfer and such supplemental indenture, if any, comply with this Indenture.

 

For purposes of this Section 4.01, the sale, lease, conveyance, assignment, transfer, or other disposition of all or substantially all of the properties and assets of one or more Subsidiaries of the Company, which properties and assets, if held by the Company instead of such Subsidiaries, would constitute all or substantially all of the properties and assets of the Company on a consolidated basis, shall be deemed to be the transfer of all or substantially all of the properties and assets of the Company.

 

The Successor Company will succeed to, and be substituted for, and may exercise every right and power of, the Company under this Indenture, but, in the case of a lease of all or substantially all its assets, the Company will not be released from the obligation to pay the principal of and interest on the Securities.

 

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ARTICLE 5
REDEMPTION OF SECURITIES

 

Section 5.01.  Optional Redemption .  Prior to February 15, 2012, the Securities shall not be redeemable.  On and after February 15, 2012, the Securities may be redeemed, as a whole or from time to time in part, subject to the conditions set forth herein, at a price (the “ Redemption Price ”) equal to 100% of the principal amount of Securities to be redeemed, plus accrued and unpaid interest to the Redemption Date; provided that if the Redemption Date occurs after a Regular Record Date for the payment of interest and on or prior to the related interest payment date, the Redemption Price for any such Securities to be redeemed shall be 100% of the principal amount of such Securities and accrued and unpaid interest shall be paid to the Holder on such Regular Record Date.

 

Section 5.02.  Election to Redeem; Notice to Trustee .  The election of the Company to redeem any Securities pursuant to Section 5.01 shall be evidenced by a Board Resolution.  In case of any redemption at the election of the Company, the Company shall, on or prior to the date that is 15 days prior to the date on which notice is given to the Holders (unless a shorter notice shall be satisfactory to the Trustee), notify the Trustee of such Redemption Date and of the principal amount of Securities to be redeemed and shall deliver to the Trustee such documentation and records as shall enable the Trustee to select the Securities to be redeemed pursuant to Section 5.03.  Any such notice may be cancelled at any time prior to notice of such redemption being mailed to any Holder and shall thereby be void and of no effect.

 

Section 5.03.  Selection by Trustee of Securities to be Redeemed .  If less than all the Securities are to be redeemed at any time pursuant to an optional redemption, the particular Securities to be redeemed shall be selected, not more than 60 days prior to the Redemption Date by the Trustee, from the outstanding Securities not previously called for redemption, by lot, or on a pro rata basis among the classes of Securities or by such other method as the Trustee shall deem fair and appropriate (and in such manner as is not prohibited by applicable legal requirements) and which may provide for the selection for redemption of portions of the principal of the Securities; provided, however, that no such partial redemption shall reduce the portion of the principal amount of a Security not redeemed to less than $1,000.

 

The Trustee shall promptly notify the Company in writing of the Securities selected for redemption 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 redemption of Securities shall relate, in the case of any Security redeemed or to be redeemed only in part, to the portion of the principal amount of such Security which has been or is to be redeemed.

 

If any Securities selected for partial redemption are thereafter surrendered for conversion in part before termination of the conversion right with respect to the portion of the Securities so selected, the converted portion of such Securities shall be deemed (so far as may be), solely for purposes of determining the aggregate principal amount of Securities to be redeemed by the Company, to be the portion selected for redemption. Securities which have been converted

 

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during a selection of Securities to be redeemed may be treated by the Trustee as outstanding for the purpose of such selection. Nothing in this Section 5.03 shall affect the right of any Holder to convert any Securities pursuant to Article 12 before the termination of the conversion right with respect thereto.

 

Section 5.04.  Notice of Redemption .  Notice of redemption shall be given in the manner provided for in Section 13.02 not less than 45 nor more than 60 days prior to the Redemption Date, to each Holder of Securities to be redeemed.  The Trustee shall give notice of redemption in the Company’s name and at the Company’s expense; provided, however, that the Company shall deliver to the Trustee, at least 60 days prior to the Redemption Date, an Officers’ Certificate requesting that the Trustee give such notice at the Company’s expense and setting forth the information to be stated in such notice as provided in the following items.

 

All notices of redemption shall state:

 

(a)            the Redemption Date,

 

(b)            the Redemption Price payable as provided in Section 5.06, if any,

 

(c)            the then current Conversion Rate, and provide a statement that the Securities called for redemption may be converted prior to the Redemption Date pursuant to the terms of the Indenture,

 

(d)            if less than all outstanding Securities are to be redeemed, the identification of the particular Securities (or portion thereof) to be redeemed, as well as the aggregate principal amount of Securities to be redeemed and the aggregate principal amount of Securities to be outstanding after such partial redemption,

 

(e)            in case any Security is to be redeemed in part only, the notice which relates to such Security shall state that on and after the Redemption Date, upon surrender of such Security, the Holder will receive, without charge, a new Security or Securities of authorized denominations for the principal amount thereof remaining unredeemed,

 

(f)             that on the Redemption Date the Redemption Price will become due and payable upon each such Security, or the portion thereof, to be redeemed, and, unless the Company defaults in making the redemption payment, that interest on Securities called for redemption (or the portion thereof) will cease to accrue on and after said date,

 

(g)            the place or places where such Securities are to be surrendered for payment of the Redemption Price,

 

(h)            the name and address of the Paying Agent and the Conversion Agent,

 

(i)             that Securities called for redemption must be surrendered to the Paying Agent to collect the Redemption Price,

 

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(j)             the CUSIP or ISIN number, and that no representation is made as to the accuracy or correctness of the CUSIP or ISIN number, if any, listed in such notice or printed on the Securities, and

 

(k)            the paragraph of the Securities pursuant to which the Securities are to be redeemed.

 

Section 5.05.  Deposit of Redemption Price .  Prior to any Redemption Date, the Company shall deposit with the Trustee or with a Paying Agent (or, if the Company is acting as its own Paying Agent, segregate and hold in trust as provided in Section 2.06) an amount of money sufficient to pay the Redemption Price of all the Securities which are to be redeemed on that date other than Securities or portions of Securities called for redemption that are beneficially owned by the Company and have been delivered by the Company to the Trustee for cancellation.

 

Section 5.06.  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 Redemption Price, and from and after such date (unless the Company shall default in the payment of the Redemption Price or accrued and unpaid interest) such Securities shall cease to bear interest.  Upon surrender of any such Security for redemption in accordance with said notice, such Security shall be paid by the Company at the Redemption Price.

 

If any Security called for redemption shall not be so paid upon surrender thereof for redemption, the principal shall, until paid, bear interest from the Redemption Date at the rate borne by the Securities.

 

Section 5.07.  Securities Redeemed in Part .  Any Security which is to be redeemed only in part (pursuant to the provisions of this Article 5) shall be surrendered at the office or agency of the Company maintained for such purpose pursuant to Section 3.03 (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 such Holder’s 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 at the expense of the Company, a new Security or Securities, of any authorized denomination as requested by such Holder, in an aggregate principal amount equal to and in exchange for the unredeemed portion of the principal of the Security so surrendered, provided that each such new Security will be in a principal amount of $1,000 or integral multiple thereof.

 

ARTICLE 6
DEFAULTS AND REMEDIES

 

Section 6.01.  Events of Default .  Each of the following is an “ Event of Default ”:

 

(a)            default in any payment of interest on any Security when the same becomes due and payable, and such default continues for a period of 30 days;

 

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(b)            default in the payment of the principal of any Security when the same becomes due and payable at its Stated Maturity, upon optional redemption, upon required repurchase, upon declaration or otherwise;

 

(c)            failure by the Company to comply with its obligation to convert the Securities into Common Stock (or, pursuant to Section 12.13, cash or a combination of cash and Common Stock) and to make the Make-Whole Payment, if any, upon exercise of a Holder’s conversion right and such failure continues for a period of five days;

 

(d)            failure by the Company to give a Fundamental Change notice to Holders when due;

 

(e)            failure by the Company or any Subsidiary Guarantor to comply with any of its obligations under Article 4 or Section 10.02;

 

(f)             default in the performance of or a breach by the Company of any other covenant or agreement in this Indenture or under the Securities (other than those referred to in Section 6.01(a) through Section 6.01(e) above or Section 6.01(g) through Section 6.01(i) below) and such default continues for 60 days after the notice specified below;

 

(g)            default by the Company or any Subsidiary in the payment of the principal or interest on any mortgage, agreement or other instrument under which there may be outstanding, or by which there may be secured or evidenced any indebtedness for money borrowed in excess of $10 million in the aggregate of the Company and/or any such Subsidiary, whether such indebtedness now exists or shall hereafter be created, resulting in such indebtedness becoming or being declared due and payable, and such acceleration shall not have been rescinded or annulled within 10 days after written notice of such acceleration has been received by the Company or such Subsidiary;

 

(h)            the Company or any Significant Subsidiary pursuant to or within the meaning of any Bankruptcy Law:

 

(i)             commences a voluntary case or proceeding;

 

(ii)            consents to the entry of judgment, decree or order for relief against it in an involuntary case or proceeding;

 

(iii)           consents to the appointment of a Custodian of it or for any substantial part of its property;

 

(iv)           makes a general assignment for the benefit of its creditors;

 

(v)            consents to or acquiesces in the institution of a bankruptcy or an insolvency proceeding against it;

 

(vi)           takes any corporate action to authorize or effect any of the foregoing; or

 

(vii)          takes any comparable action under any foreign laws relating to insolvency;

 

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(i)              a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that:

 

(i)             is for relief against the Company or any Significant Subsidiary in an involuntary case;

 

(ii)            appoints a Custodian of the Company for all or substantially all of the Company’s or any Significant Subsidiary’s property; or

 

(iii)           orders the winding up or liquidation of the Company or Significant Subsidiary;

 

and, in each case, the order or decree or relief remains unstayed and in effect for 90 days;

 

(j)             there has been entered in a court of competent jurisdiction a final judgment for the payment of $10.0 million or more (excluding any amounts covered by insurance) rendered against the Company or any Significant Subsidiary, which judgment is not discharged or stayed within 90 days after i) the date on which the right to appeal thereof has expired if no such appeal has commenced, or ii) the date on which all rights to appeal have been extinguished (“ judgment default provision ”); or

 

(k)            except as permitted by this Indenture, any Subsidiary Guarantee shall be held in any judicial proceeding to be unenforceable or invalid or shall cease for any reason to be in full force and effect, or any Subsidiary Guarantor, or any Person acting on its behalf, shall deny or disaffirm its obligation under the Subsidiary Guarantee.

 

The foregoing will constitute Events of Default whatever the reason for any such Event of Default and whether it is voluntary or involuntary or is effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body.

 

Notwithstanding the foregoing, a Default under clause (f) of this Section 6.01 will not constitute an Event of Default until the Trustee or the Holders of 25% or more in principal amount of the outstanding Securities notify the Company of the Default in writing and the Company does not cure such Default within the time specified in clause (f) of this Section 6.01 after receipt of such notice.

 

The Company shall deliver to the Trustee, within 30 days after the occurrence thereof, written notice in the form of an Officers’ Certificate of any Default or Event of Default under clauses (d), (e), (f), (g), (j) or (k) of this Section 6.01, which notice shall contain the status thereof and a description of the action being taken or proposed to be taken by the Company in respect thereof.

 

Section 6.02.  Acceleration .  If an Event of Default (other than an Event of Default specified in Section 6.01(h) or 6.01(i) above) occurs and is continuing, the Trustee by notice to the Company, or the Holders of at least 25% in outstanding principal amount of the outstanding Securities by notice to the Company and the Trustee, may, and the Trustee at the request of such Holders shall, declare the principal of and accrued and unpaid interest, if any, on (and any

 

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portion of the Make-Whole Payment and Settlement Amount payable in cash, if any, with respect to) all the Securities to be due and payable.  Upon such a declaration, such principal, premium, if any, and accrued and unpaid interest, if any (and any portion of the Make-Whole Payment and Settlement Amount payable in cash, if any), shall be due and payable immediately.  If an Event of Default specified in Section 6.01(h) or 6.01(i) above occurs and is continuing, the principal of and accrued and unpaid interest, if any, on all the Securities outstanding shall be immediately due and payable with no further action by the Trustee or the Holders.

 

Section 6.03.  Other Remedies .  If an Event of Default occurs and is continuing, the Trustee may pursue any available remedy to collect the payment of principal of or interest on (and any portion of the Make-Whole Payment and Settlement Amount payable in cash, if any, with respect to) the Securities or to enforce the performance of any provision of the Securities or this Indenture.

 

The Trustee may maintain a proceeding even if it does not possess any of the Securities or does not produce any of them in the proceeding.  A delay or omission by the Trustee or any Securityholder in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of or acquiescence in the Event of Default.  No remedy is exclusive of any other remedy.  All available remedies are cumulative.

 

Section 6.04.  Waiver of Past Defaults .  The Holders of a majority in principal amount of the outstanding Securities by notice to the Trustee may (a) waive, by their consent (including, without limitation, consents obtained in connection with a purchase of, or tender offer or exchange offer for, Securities), an existing Default or Event of Default and its consequences except (1) a Default or Event of Default in the payment of the principal of or interest on a Security or in the payment of any portion of the Make-Whole Payment and Settlement Amount payable in cash, if any, or (2) a Default or Event of Default in respect of a provision that under Section 9.02 cannot be amended without the consent of each Securityholder affected and (b) rescind any such acceleration with respect to the Securities and its consequences if (1) rescission would not conflict with any judgment or decree of a court of competent jurisdiction and (2) all existing Events of Default, other than the nonpayment of the principal of and interest on the Securities that have become due solely by such declaration of acceleration, have been cured or waived.  When a Default or Event of Default is waived, it is deemed cured, but no such waiver shall extend to any subsequent or other Default or Event of Default or impair any consequent right.

 

Section 6.05.  Control by Majority .  The Holders of a majority in principal amount of the outstanding Securities 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 conflicts with law or this Indenture or, subject to Sections 7.01 and 7.02, that the Trustee determines is unduly prejudicial to the rights of other Securityholders or would involve the Trustee in personal liability; provided, however, that the Trustee may take any other action deemed proper by the Trustee that is not inconsistent with such direction.

 

Section 6.06.  Limitation on Suits .  Subject to Section 6.07, a Securityholder may not pursue any remedy with respect to this Indenture or the Securities unless:

 

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(a)            such Holder has previously given to the Trustee written notice stating that an Event of Default is continuing;

 

(b)            Holders of at least 25% in principal amount of the outstanding Securities have requested that the Trustee pursue the remedy;

 

(c)            such Holders have offered to the Trustee security or indemnity reasonably satisfactory to it against any loss, liability or expense to be incurred in compliance with such request;

 

(d)            the Trustee has not complied with such request within 60 days after receipt of the request and the offer of security or indemnity; and

 

(e)            the Holders of a majority in principal amount of the outstanding Securities have not given the Trustee a direction that, in the opinion of the Trustee, is inconsistent with such request within such 60-day period.

 

A Securityholder may not use this Indenture to prejudice the rights of another Securityholder or to obtain a preference or priority over another Securityholder.

 

Section 6.07.  Rights of Holders to Receive Paym ent .  Notwithstanding any other provision of this Indenture (including, without limitation, Section 6.06), the right of any Holder to receive payment of principal of or interest on (or any portion of the Make-Whole Payment and Settlement Amount payable in cash, if any, with respect to) the Securities held by such Holder, on or after the respective due dates expressed in the Securities, or to bring suit for the enforcement of any such payment on or after such respective dates, shall not be impaired or affected without the consent of such Holder.

 

Section 6.08.  Collection Suit by Trustee .  If an Event of Default specified in clauses (a) or (b) of Section 6.01 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 then due and owing (together with interest on any unpaid interest to the extent lawful) and the amounts provided for in Section 7.07.

 

Section 6.09.  Trustee May File Proofs of Claim .  The Trustee may file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel) and the Securityholders allowed in any judicial proceedings relative to the Company, its Subsidiaries or its or their respective creditors or properties and, unless prohibited by law or applicable regulations, may be entitled and empowered to participate as a member of any official committee of creditors appointed in such matter, and may vote on behalf of the Holders in any election of a trustee in bankruptcy or other Person performing similar functions, and any Custodian in any such judicial proceeding is hereby authorized by each Holder to make payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and its counsel, and any other amounts due to the Trustee under Section 7.07.

 

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Section 6.10.  Priorities .  If the Trustee collects any money or property pursuant to this Article 6, it shall pay out the money or property in the following order:

 

FIRST:  to the Trustee for amounts due under Section 7.07;

 

SECOND:  to Securityholders for amounts due and unpaid on the Securities for principal and interest, ratably, without preference or priority of any kind, according to the amounts due and payable on the Securities for principal and interest (and any portion of the Make-Whole Payment and Settlement Amount payable in cash, if any), respectively; and

 

THIRD:  to the Company.

 

The Trustee may fix a record date and payment date for any payment to Securityholders pursuant to this Section 6.10.  At least 15 days before such record date, the Company shall mail to each Securityholder and the Trustee a notice that states the record date, the payment date and amount to be paid.

 

Section 6.11.  Restoration of Rights and Remedies .  If the Trustee or any Holder has instituted a proceeding to enforce any right or remedy under this Indenture and the proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee or to the Holder, then, subject to any determination in the proceeding, the Company, the Subsidiary Guarantors, the Trustee, any Subsidiaries and the Holders will be restored severally and respectively to their former positions hereunder and thereafter all rights and remedies of the Company, any Subsidiary Guarantors, the Trustee, any Subsidiaries and the Holders will continue as though no such proceeding had been instituted.

 

Section 6.12.  Undertaking of Costs .  In any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by it as Trustee, a court in its discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable 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 6.12 does not apply to a suit by the Trustee, a suit by the Company, a suit by a Holder pursuant to Section 6.07 or a suit by Holders of more than 10% in outstanding principal amount of the Securities.

 

ARTICLE 7

TRUSTEE

 

Section 7.01.  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; provided that if an Event of Default occurs and is continuing, the Trustee will be under no obligation to exercise any of the rights or powers under this Indenture at the request or direction of any of the Holders unless such Holders have offered to the Trustee reasonable indemnity or security against loss, liability or expense that might be incurred in compliance with such request or direction.

 

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(b)            Except during the continuance of an Event of Default:

 

(i)             the Trustee undertakes to perform such duties and only such duties as are specifically set forth in this Indenture and no implied covenants or obligations shall be read into this Indenture against the Trustee; 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, opinions or orders furnished to the Trustee and conforming to the requirements of this Indenture.  However, in the case of any such certificates, opinions or orders which by any provisions hereof are specifically required to be furnished to the Trustee, the Trustee shall examine such 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).

 

(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 does not limit the effect of paragraph (b) of this Section 7.01;

 

(ii)            the Trustee shall not be liable for any error of judgment made in good faith by a Trust Officer of the Trustee unless it is proved that the Trustee was negligent in ascertaining the pertinent facts; and

 

(iii)           the Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 6.05.

 

(d)            Every provision of this Indenture that in any way relates to the Trustee is subject to paragraphs (a), (b) and (c) of this Section 7.01.

 

(e)            The Trustee shall not be liable for interest on any money received by it except as the Trustee may agree in writing with the Company.

 

(f)             Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law.

 

(g)            No provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur financial liability in the performance of any of its duties hereunder or in the exercise of any of its rights or powers, if it shall have reasonable grounds to believe that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it.

 

(h)            Every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Section 7.01 and to the provisions of the TIA.

 

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(i)             Unless otherwise specifically provided in this Indenture, any demand, request, direction or notice from the Company shall be sufficient if signed by an Officer of the Company.

 

Section 7.02.  Rights of Trustee .  Subject to Section 7.01:

 

(a)            The Trustee may conclusively rely on any document (whether in its original or facsimile form) reasonably believed by it to be genuine and to have been signed or presented by the proper person.  The Trustee need not investigate any fact or matter stated in the document.  The Trustee shall receive and retain financial reports and statements of the Company as provided herein, but shall have no duty to review or analyze such reports or statements to determine compliance under covenants or other obligations of the Company.

 

(b)            Before the Trustee acts or refrains from acting, it may require an Officers’ Certificate and/or an Opinion of Counsel.  The Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on an Officers’ Certificate or Opinion of Counsel.

 

(c)            The Trustee may act through its attorneys and agents and shall not be responsible for the misconduct or negligence of any agent appointed with due care.

 

(d)            The Trustee shall not be liable for any action it takes or omits to take in good faith which it believes to be authorized or within its rights or powers, unless the Trustee’s conduct constitutes willful misconduct or negligence.

 

(e)            The Trustee may consult with counsel of its selection, and the advice or opinion of counsel with respect to legal matters relating to this Indenture and the Securities shall be full and complete authorization and protection from liability in respect to any action taken, omitted or suffered by it hereunder in good faith and in accordance with the advice or opinion of such counsel.

 

(f)             The Trustee shall not be responsible or liable for special, indirect, or consequential loss or damage of any kind whatsoever (including, but not limited to, loss of profit) resulting from actions taken in good faith and which the Trustee believes to be authorized or within its rights or powers, unless the Trustee’s conduct constitutes willful misconduct or negligence.

 

(g)            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 T