Indenture - The Men's Wearhouse Inc. and Texas Commerce Bank NA
Conformed Copy
--------------------------------------------------------------------------------
THE MEN'S WEARHOUSE, INC.
AND
TEXAS COMMERCE BANK NATIONAL ASSOCIATION, AS TRUSTEE
Indenture
Dated as of March 1, 1996
$50,000,000*
5 1/4% Convertible Subordinated Notes due 2003
--------------------------------------------------------------------------------
* Subject to increase up to $57,500,000
<PAGE> 2
CROSS REFERENCE TABLE*
Trust Indenture
Act Section Indenture Section
--------------- -----------------
310(a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.10
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.10
(a)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(a)(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(a)(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.10
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.08; 7.10
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
311(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.11
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.11
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
312(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.05
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.03
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.03
313(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.06
(b)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.06
(b)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.06
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.06; 12.02
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.06
314(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.08
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(c)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.04
(c)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.04
(c)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.05
(f) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
315(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.01(b)
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.05; 12.02
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.01(a)
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.01(c)
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.11
316(a)(last sentence) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.09
(a)(1)(A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.05
(a)(1)(B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.04
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.07
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.04
317(a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.08
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.09
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.04
318(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.01
N.A. Means Not Applicable
-------------------------
*This Cross-Reference Table is not part of the Indenture.
<PAGE> 3
TABLE OF CONTENTS
ARTICLE 1.
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01 Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.02 Other Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 1.03 Incorporation by Reference of Trust Indenture Act. . . . . . . . . . . . . . . . . 4
Section 1.04 Rules of Construction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
ARTICLE 2.
THE SECURITIES
Section 2.01 Form and Dating . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 2.02 Execution and Authentication. . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 2.03 Registrar and Paying Agent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 2.04 Paying Agent to Hold Money in Trust. . . . . . . . . . . . . . . . . . . . . . . . 6
Section 2.05 Holder Lists. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 2.06 Transfer and Exchange. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 2.07 Replacement Securities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 2.08 Outstanding Securities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 2.09 Treasury Securities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 2.10 Temporary Securities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 2.11 Cancellations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 2.12 Defaulted Interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
ARTICLE 3.
REDEMPTION
Section 3.01 Notices to Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 3.02 Selection of Securities to Be Redeemed . . . . . . . . . . . . . . . . . . . . . . 10
Section 3.03 Notice of Redemption. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 3.04 Effect of Notice of Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 3.05 Deposit of Redemption Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 3.06 Securities Redeemed in Part . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 3.07 Optional Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 3.08 Mandatory Redemption. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
ARTICLE 4.
COVENANTS
Section 4.01 Payment of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 4.02 Maintenance of Office or Agency . . . . . . . . . . . . . . . . . . . . . . . . . . 13
<PAGE> 4
Section 4.03 Compliance Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 4.04 Stay, Extension or Usury Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 4.05 Continued Existence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 4.06 Offer to Repurchase Upon Change of Control. . . . . . . . . . . . . . . . . . . . . 14
Section 4.07 Reports by Company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
ARTICLE 5.
SUCCESSORS
Section 5.01 When Company May Merge, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 5.02 Successor Corporation Substituted . . . . . . . . . . . . . . . . . . . . . . . . . 16
ARTICLE 6.
DEFAULTS AND REMEDIES
Section 6.01 Events of Default. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 6.02 Acceleration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 6.03 Other Remedies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 6.04 Waiver of Past Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 6.05 Control by Majority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 6.06 Limitation on Suits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 6.07 Rights of Holders to Receive Payment . . . . . . . . . . . . . . . . . . . . . . . 19
Section 6.08 Collection Suit by Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 6.09 Trustee May File Proofs of Claim . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 6.10 Priorities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 6.11 Undertaking for Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
ARTICLE 7.
TRUSTEE
Section 7.01 Duties of Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 7.02 Rights of Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 7.03 Individual Rights of Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 7.04 Trustee's Disclaimer. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 7.05 Notice of Defaults. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 7.06 Reports by Trustee to Holders. . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 7.07 Compensation and Indemnity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 7.08 Replacement of Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 7.09 Successor Trustee by Merger, etc. . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 7.10 Eligibility; Disqualification. . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 7.11 Preferential Collection of Claims Against Company. . . . . . . . . . . . . . . . . 25
<PAGE> 5
ARTICLE 8.
DISCHARGE OF INDENTURE
Section 8.01 Termination of Company's Obligations. . . . . . . . . . . . . . . . . . . . . . . . 25
Section 8.02 Application of Trust Money. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 8.03 Repayment to Company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 8.04 Reinstatement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
ARTICLE 9.
AMENDMENTS
Section 9.01 Without Consent of Holders. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 9.02 With Consent of Holders. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 9.03 Compliance with Trust Indenture Act. . . . . . . . . . . . . . . . . . . . . . . . 28
Section 9.04 Revocation and Effect of Consents. . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 9.05 Notation on or Exchange of Securities. . . . . . . . . . . . . . . . . . . . . . . 28
Section 9.06 Trustee Protected. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
ARTICLE 10.
CONVERSION
Section 10.01 Conversion Privilege. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 10.02 Conversion Procedure. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 10.03 Fractional Shares. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 10.04 Taxes on Conversion. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 10.05 Company to Reserve Stock. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 10.06 Adjustment of Conversion Price. . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 10.07 Notice of Adjustment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 10.08 Notice of Certain Transactions. . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 10.09 Reorganization of the Company. . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 10.10 Company Determination Final. . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 10.11 Trustee's Disclaimer. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
ARTICLE 11.
SUBORDINATION
Section 11.01 Agreement to Subordinate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 11.02 Certain Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 11.03 Liquidation; Dissolution; Bankruptcy. . . . . . . . . . . . . . . . . . . . . . . . 36
Section 11.04 Default on Senior Indebtedness. . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 11.05 When Distribution Must Be Paid Over. . . . . . . . . . . . . . . . . . . . . . . . 37
Section 11.06 Notice By Company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 11.07 Subrogation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
<PAGE> 6
Section 11.08 Relative Rights. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 11.09 Subordination May Not Be Impaired by Company. . . . . . . . . . . . . . . . . . . . 38
Section 11.10 Distribution or Notice to Representative. . . . . . . . . . . . . . . . . . . . . . 39
Section 11.11 Rights of Trustee and Paying Agent. . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 11.12 Authorization to Effect Subordination. . . . . . . . . . . . . . . . . . . . . . . 39
Section 11.13 Conversions Not Deemed Payment. . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 11.14 Amendments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 11.15 Trust Moneys Not Subordinated. . . . . . . . . . . . . . . . . . . . . . . . . . . 40
ARTICLE 12.
MISCELLANEOUS
Section 12.01 Trust Indenture Act Controls. . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 12.02 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 12.03 Communication by Holders with Other Holders. . . . . . . . . . . . . . . . . . . . 41
Section 12.04 Certificate and Opinion as to Conditions Precedent. . . . . . . . . . . . . . . . . 41
Section 12.05 Statements Required in Certificate or Opinion. . . . . . . . . . . . . . . . . . . 41
Section 12.06 Rules by Trustee and Agents. . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Section 12.07 Legal Holidays. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Section 12.08 No Recourse Against Others. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Section 12.09 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Section 12.10 Addresses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Section 12.11 Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Section 12.12 No Adverse Interpretation of Other Agreements. . . . . . . . . . . . . . . . . . . 43
Section 12.13 Successors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Section 12.14 Severability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Section 12.15 Table of Contents, Headings, Etc.. . . . . . . . . . . . . . . . . . . . . . . . . 43
<PAGE> 7
INDENTURE dated as of March 1, 1996 between The Men's Wearhouse, Inc.,
a Texas corporation (the "Company"), and Texas Commerce Bank National
Association, a national banking association duly organized and existing under
the laws of the United States of America, as Trustee (the "Trustee").
The Company and the Trustee mutually covenant and agree for the equal
and ratable benefit of the respective holders from time to time of the
Securities as follows:
ARTICLE 1.
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01 Definitions.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such Person. For the purposes of this definition, "control" when
used with respect to any Person means the possession, directly or indirectly,
of the power to direct or cause the direction of the management and policies of
such Person, whether through the ownership of voting securities, by contract or
otherwise, and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Agent" means any Registrar or Paying Agent.
"Board of Directors" means either the Board of Directors of the Company
or any committee of such Board duly authorized to act hereunder.
"Board Resolution" means a copy of a resolution certified by the
Secretary or Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day" means a day which in the Borough of Manhattan, City of
New York (or in any of the cities, if more than one, where amounts are payable
in respect of the Securities, as specified on the face of the form of Security)
is neither a legal holiday nor a day on which the banking institutions are
authorized by law or regulation to close.
"Capital Stock" of any Person means any and all shares, interests,
participations, or other equivalents (however designated) of such Person's
capital stock whether now outstanding or issued after the date hereof.
"Change of Control" means (i) any transaction (including a merger or
consolidation) the result of which is that any "Person" or "group" (within the
meaning of Sections 13(d) and 14(d)(2) of the Exchange Act) becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act) of more
than 50 percent (50%) of the total voting power of all classes of the voting
stock of the Company or the surviving Person and/or warrants or options to
acquire such voting stock, calculated on a fully
1
<PAGE> 8
diluted basis (a "Control Person"), other than any such transaction in which
the current executive officers of the Company who are also currently directors
and their Affiliates or The Zimmer Family Foundation become, individually or
collectively, a Control Person, provided that following such transaction at
least 30% of the outstanding voting stock of the Company is held by Persons who
are not Affiliates of such Control Person and such stock is registered pursuant
to Sections 12(b) or 12(g) of the Exchange Act or is required to file reports
pursuant to Section 15(d) of the Exchange Act; or (ii) the sale, lease or
transfer of all or substantially all of the Company's assets (which includes
the assets of its Subsidiaries) to any "Person" or "group" (within the meaning
of Sections 13(d) and 14(d)(2) of the Exchange Act) except to the Company or
one or more of its Subsidiaries.
"Commission" means the Securities and Exchange Commission, as from time
to time constituted, created under the Exchange Act or, if at any time after
the execution of this instrument such Commission is not existing and performing
the duties now assigned to it under the Trust Indenture Act, the body
performing such duties at such time.
"Common Stock" includes any stock of any class of the Company which has
no preference in respect of dividends or of amounts payable in the event of any
voluntary or involuntary liquidation, dissolution or winding-up of the Company
and which is not subject to redemption by the Company. However, subject to the
provisions of Section 10.09, shares issuable on conversion of Securities shall
include only shares of the class designated as Common Stock of the Company at
the date of the initial issuance of Securities by the Company or shares of any
class or classes resulting from any reclassification or reclassifications
thereof and which have no preference in respect of the dividends or of amounts
payable in the event of any voluntary or involuntary liquidation, dissolution,
winding-up of the Company and which are not subject to redemption by the
Company; provided that if at any time there shall be more than one such
resulting class, the shares of each such class then so issuable shall be
substantially in the proportion which the total number of shares of such class
resulting from all such reclassifications bears to the total number of shares
of all such classes resulting from all such reclassifications.
"Company" means The Men's Wearhouse, Inc., a Texas corporation, and
subject to Article 5, its successors and assigns.
"Corporate Trust Office" means the office of the Trustee at the address
of the Trustee specified in Section 12.10 or such other address as to which the
Trustee may give notice to the Company.
"Default" means any event which is, or after notice or passage of time
would be, an Event of Default.
"Depositary" means, with respect to Securities issuable in whole or in
part in the form of one or more Global Securities, the Depositary Trust Company
or such other clearing agency registered under the Exchange Act that is
designated by the Company to Act as Depositary for such Securities.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Holder," "Securityholder," or other similar terms means a Person in
whose name a Security is registered.
2
<PAGE> 9
"Global Security" means a Security that evidences all or a part of the
Securities and is authenticated and delivered to, and registered in the name
of, the Depositary for such Securities or a nominee thereof.
"Indenture" means this instrument as originally executed and delivered
or, if amended or supplemented as herein provided, as so amended or
supplemented.
"Officer" means the Chairman of the Board, the Chief Executive Officer,
the President, the Chief Financial Officer, the Treasurer, any Assistant
Treasurer, Controller, Secretary or any Vice President of the Company.
"Officers' Certificate" means a certificate signed by two Officers, one
of whom must be the principal executive officer, principal financial officer or
principal accounting officer of the Company.
"Opinion of Counsel" means an opinion in writing signed by legal
counsel who may be an employee of or counsel to the Company or who may be other
counsel satisfactory to the Trustee.
"Person" means any individual, corporation, partnership, joint venture
association, joint stock company, trust, unincorporated association or any
other entity or organization or government or political subdivision or an
agency or instrumentality thereof.
"principal" wherever used with reference to the Securities or any
Security or any portion thereof, shall be deemed to include "and premium, if
any."
"Responsible Officer" when used with respect to the Trustee means any
officer of the Trustee assigned by the Trustee to administer its corporate
trust matters.
"Security" or "Securities" means the 5 1/4% Convertible Subordinated
Notes due 2003, as amended or supplemented from time to time, authenticated and
delivered under this Indenture.
"Securities Act" means the Securities Act of 1933, as amended.
"Significant Subsidiary" means, at any time, any Subsidiary of the
Company whose total assets or consolidated revenues is equal to or greater than
10% of the consolidated total assets or consolidated revenues, as the case may
be, of the Company and its Subsidiaries as of the date of the latest available
consolidated financial statements of the Company.
"Subsidiary" of a Person means any corporation, association or other
business entity of which more than 50% of the total voting power of shares of
Capital Stock entitled (without regard to the occurrence of any contingency) to
vote in the election of directors, managers or trustees thereof is at the time
owned or controlled, directly or indirectly, by such Person or one or more of
the other Subsidiaries of that Person or a combination thereof.
"Trading Day" means (x) if the Common Stock is listed or admitted for
trading on any national securities exchange, days on which such national
securities exchange is open for business; or (y) if the Common Stock is not so
listed or admitted for trading but is quoted on the Nasdaq National Market or
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any similar system of automated dissemination of quotations of securities
prices, days on which trades may be made on such system.
"Trustee" means the entity identified as "Trustee" in the first
paragraph hereof and, subject to the provisions of Article 7, shall also
include any successor trustee.
"Trust Indenture Act" means the Trust Indenture act of 1939, as
amended, as in force at the date as of which this Indenture was originally
executed.
Section 1.02 Other Definitions.
Defined in
Term Section
---- -------
"Bankruptcy Law" . . . . . . . . . . . . . . . . . . . . . . . . 6.01
"Change of Control Offer" . . . . . . . . . . . . . . . . . . . 4.06
"Change of Control Pay" . . . . . . . . . . . . . . . . . . . . 4.06
"Change of Control Payment Date" . . . . . . . . . . . . . . . . 4.06
"Conversion Price" . . . . . . . . . . . . . . . . . . . . . . . 10.01
"Credit Agreement" . . . . . . . . . . . . . . . . . . . . . . . 4.07
"Custodian" . . . . . . . . . . . . . . . . . . . . . . . . . . 6.01
"Designated Senior Indebtedness" . . . . . . . . . . . . . . . . 11.02
"Event of Default" . . . . . . . . . . . . . . . . . . . . . . . 6.01
"Expiration Time" . . . . . . . . . . . . . . . . . . . . . . . 10.06
"Legal Holiday" . . . . . . . . . . . . . . . . . . . . . . . . 12.07
"Offer" . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.06
"Paying Agent" . . . . . . . . . . . . . . . . . . . . . . . . . 2.03
"Payment Default" . . . . . . . . . . . . . . . . . . . . . . . 6.01
"Purchased Shares" . . . . . . . . . . . . . . . . . . . . . . . 10.06
"Registrar" . . . . . . . . . . . . . . . . . . . . . . . . . . 2.03
"Representative" . . . . . . . . . . . . . . . . . . . . . . . . 11.02
"Securities Custodian" . . . . . . . . . . . . . . . . . . . . . 2.03
"Senior Indebtedness" . . . . . . . . . . . . . . . . . . . . . 11.02
"U.S. Government Obligations" . . . . . . . . . . . . . . . . . 8.01
Section 1.03 Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the Trust Indenture
Act, the provision is incorporated by reference in and made a part of this
Indenture.
The following Trust Indenture Act terms used in this Indenture have the
following meanings:
"indenture securities" means the Securities;
"indenture security holder" means a Holder of a Security;
"indenture to be qualified" means this Indenture;
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"indenture trustee" or "institutional trustee" means the Trustee;
"obligor" on the Securities means the Company and any successor obligor
upon the Trust Indenture Act.
All other terms used in this Indenture that are defined by the Trust
Indenture Act, defined by Trust Indenture Act reference to another statute or
defined by Commission rule under the Trust Indenture Act have the meanings so
assigned to them.
Section 1.04 Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with generally accepted accounting principles.
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the
plural include the singular; and
(5) provisions apply to successive events and transactions.
ARTICLE 2.
THE SECURITIES
Section 2.01 Form and Dating. The Securities and the Trustee's
certificates of authentication shall be substantially in the form of Exhibit A
to this Indenture. The Securities may have notations, legends or endorsements
required by law, stock exchange rules or usage. Each Security shall be dated
the date of its authentication. The Securities shall be in denominations of
$1,000 and integral multiples thereof.
The terms and provisions contained in the Securities shall constitute,
and are hereby expressly made, a part of this Indenture and to the extent
applicable, the Company and the Trustee, by their execution and delivery of
this Indenture, expressly agree to such terms and provisions and to be bound
thereby.
Section 2.02 Execution and Authentication. Two Officers shall sign
the Securities for the Company by manual or facsimile signature. The Company's
seal shall be reproduced on the Securities and may be in facsimile form.
If an Officer whose signature is on a Security no longer holds that
office at the time the Security is authenticated, the Security shall
nevertheless be valid.
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A Security shall not be valid until authenticated by the manual
signature of the Trustee. The signature of the Trustee shall be conclusive
evidence that the Security has been authenticated under this Indenture.
The Trustee shall authenticate Securities for original issue up to the
aggregate principal amount stated in paragraph 4 of the Securities, upon a
written order of the Company signed by an Officer and delivered to the Trustee.
The aggregate principal amount of Securities outstanding at any time may not
exceed such amount except as provided in Section 2.07 hereof.
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Securities. An authenticating agent may authenticate
Securities whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with the Company
or an Affiliate of the Company.
Section 2.03 Registrar and Paying Agent. The Company shall
maintain in the Borough of Manhattan, City of New York, the City of Dallas,
Texas and in such other locations as it shall determine, an office or agency
where (i) Securities may be presented for registration or transfer or for
exchange ("Registrar") and (ii) Securities may be presented for payment
("Paying Agent"). Notices and demands to or upon the Company in respect of
Securities and this Indenture may be served at the Corporate Trust Office. The
Company may also from time to time designate one or more other offices or
agencies where the Securities may be presented or surrendered for any or all
such purposes and may from time to time rescind such designations; provided,
however, that no such designation or rescission shall in any manner relieve the
Company of its obligations to maintain an office or agency in the Borough of
Manhattan, The City of New York and the City of Dallas, Texas for such
purposes. The Company or any of its Subsidiaries may act as Registrar or
Paying Agent except that for purposes of Article 8 and Section 4.06, neither
the Company nor any Subsidiary shall act as Paying Agent. The Registrar shall
keep a register of the Securities and of their transfer and exchange. The
Depositary may maintain a custodian (the "Securities Custodian") with respect
to any Global Securities so long as any Global Securities remain outstanding.
The Company may appoint one or more co-registrars and one or more additional
paying agents. The term "Registrar" includes any co-registrar and the term
"Paying Agent" includes any additional paying agent. The Company may change
any Paying Agent or Registrar without notice to any Holder. The Company shall
enter into an appropriate agency agreement with any Agent not a party to this
Indenture, which agreement shall implement the provisions of this Indenture
that relate to such Agent. The Company shall notify the Trustee, in advance,
of the name and address of such Agent. If the Company fails to maintain a
Registrar or Paying Agent, the Trustee shall act as such.
The Company initially appoints the Trustee to act as Registrar, Paying
Agent, and agent for service of notices and demands in connection with the
Securities.
Section 2.04 Paying Agent to Hold Money in Trust. The Company
shall require each Paying Agent other than the Trustee to agree in writing that
the Paying Agent will hold in trust for the benefit of Holders or the Trustee
all money held by the Paying Agent for the payment of principal or interest on
the Securities, and will notify the Trustee of any default by the Company in
making any such payment. While any such default continues, the Trustee may
require a Paying Agent to pay all money held by it to the Trustee. The Company
at any time may require a Paying Agent to pay all money held by it to the
Trustee. Upon payment over to the Trustee, the Paying Agent (if other than the
Company
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or a Subsidiary of the Company) shall have no further liability for the money.
If the Company or a Subsidiary of the Company acts as Paying Agent, it shall
segregate and hold in a separate trust fund for the benefit of the Holders all
money held by it as Paying Agent.
Section 2.05 Holder Lists. The Trustee shall preserve in as
current a form as is reasonably practicable the most recent list available to
it of the names and addresses of Holders and shall otherwise comply with Trust
Indenture Act Section 312(a). If the Trustee is not the Registrar, the
Company shall furnish to the Trustee 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 Holders and the Company shall otherwise
comply with Trust Indenture Act Section 312(a).
Section 2.06 Transfer and Exchange. (a) Where Securities are
presented to the Registrar or a co-registrar with a request to register a
transfer or to exchange them for an equal principal amount of Securities of
other denominations, the Registrar shall register the transfer or make the
exchange if its requirements for such transactions are met. To permit
registrations of transfers and exchanges, the Company shall issue and the
Trustee shall authenticate Securities at the Registrar's request. No service
charge shall be made for any registration of transfer or exchange (except as
otherwise expressly permitted herein), 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 tax or similar
governmental charge payable upon exchanges pursuant to Sections 2.10, 3.06,
9.05 or 10.02).
(b) Upon satisfaction of the requirements of this subparagraph
(b), any holder of a definitive Security may exchange such definitive Security
for an interest in a Global Security. Upon receipt by the Trustee of a
definitive Security, duly endorsed or accompanied by appropriate instruments of
transfer, in form satisfactory to the Trustee, together with written
instructions directing the Trustee to make, or to direct the Depositary to
cause the Securities Custodian to make, an endorsement on the Global Security
or reflect an increase in the aggregate principal amount of the Securities
represented by the Global Security by the principal amount for which Global
Securities have been requested and for which the requirements of this paragraph
have been satisfied, the Trustee shall cancel such definitive Security and
cause, or direct the Depositary to cause the Securities Custodian to cause, in
accordance with the standing instructions and procedures existing between the
Depositary and the Securities Custodian, the aggregate principal amount of
Securities represented by the Global Security to be increased accordingly. If
no Global Securities are then outstanding, the Company shall issue and the
Trustee shall authenticate a new Global Security in the appropriate principal
amount.
(c) The transfer and exchange of beneficial interests in Global
Securities shall be effected through the Depositary, in accordance with this
Indenture (including the restrictions on transfer set forth herein) and the
procedures of the Depositary therefor. Except as expressly provided in this
Indenture, the Trustee (in its capacity as Trustee or Securities Custodian, as
applicable) and the Registrar shall have no responsibility under this Indenture
for monitoring compliance with the terms of this Indenture with respect to any
transfer or exchange of Global Securities or beneficial interests therein.
(d) (i) Any Person having a beneficial interest in a Global
Security may, upon request, exchange such beneficial interest for a definitive
Security. Upon receipt by the Trustee of written instructions, or such other
form of instructions as is customary for the Depositary, from the Depositary or
its nominee on behalf of any Person having a beneficial interest in a Global
Security and upon receipt
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by the Trustee of a written order or such other form of instructions as is
customary for the Depositary or the Person designated by the Depositary as
having such a beneficial interest containing registration instructions, then
the Trustee will cause, or direct the Securities Custodian to cause, in
accordance with the standing instructions and procedures existing between the
Depositary and the Trustee, the aggregate principal amount of the Global
Security to be reduced and, following such reduction, the Company will execute
and, upon receipt of an authentication order from the Company, the Trustee will
authenticate and deliver to the transferee a definitive Security.
(ii) Definitive Securities issued in exchange for a
beneficial interest in a Global Security pursuant to this Section 2.06(d) shall
be registered in such names and in such authorized denominations as the
Depositary, pursuant to instructions from its direct or indirect participants
or otherwise, shall instruct the Trustee. The Trustee shall deliver such
definitive Securities to the persons in whose names such Securities are so
registered.
(e) Notwithstanding any other provisions herein (other than the
provisions set forth in subparagraph (f) of this Section 2.06), a Global
Security may not be transferred except as a whole by the Depositary to a
nominee of the Depositary or by a nominee of the Depositary to the Depositary
or another nominee of the Depositary or by the Depositary or any such nominee
to a successor Depositary or a nominee of such successor Depositary.
(f) If at any time (i) the Depositary for any Global Security
notifies the Company that it is unwilling or unable to continue as Depositary
for such Global Security and a successor Depositary for such Global Security is
not appointed by the Company within ninety (90) days after the Company receives
such notice, or (ii) the Company, in its sole discretion, notifies the Trustee
in writing that it elects to cause the issuance of definitive Securities under
this Indenture, then the Company will execute, and the Trustee, upon receipt of
an order form the Company requesting the authentication and delivery of
definitive Securities, will authenticate and deliver definitive Securities in
an aggregate principal amount equal to the principal amount of such Global
Security in exchange for such Global Security.
(g) Every Global Security authenticated and delivered hereunder
shall bear a legend in substantially the following form:
This Security is a Global Security within the meaning of the
Indenture hereinafter referred to and is registered in the
name of a Depositary or a nominee thereof. This Security may
not be transferred to, or registered or exchanged for
Securities registered in the name of, any Person other than
the Depositary or a nominee thereof and no such transfer may
be registered, except in the limited circumstances described
in the Indenture. Every Security authenticated and delivered
upon registration of transfer of, or in exchange for or in
lieu of, this Security shall be a Global Security subject to
the foregoing, except in such limited circumstances.
(h) At such time as all beneficial interests in a Global Security
have either been exchanged for definitive Securities, redeemed, repurchased by
the Company or cancelled, such Global Security shall be cancelled by the
Trustee. At any time prior to such cancellation, if any beneficial interest in
a Global Security is exchanged for definitive Securities, redeemed, repurchased
by the Company or cancelled, the principal amount of the securities represented
by such Global Security shall be reduced and an
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endorsement shall be made on such Global Security, by the Trustee or the
Securities Custodian, at the direction of the Trustee, to reflect such
reduction.
(i) The Company shall not be required (i) to register the transfer
of or exchange Securities during a period beginning at the opening of business
15 days before the day of any selection of Securities for redemption under
Section 3.02 and ending at the close of business on the day of the selection,
or (ii) to register the transfer or exchange of any Security so selected for
redemption in whole or in part, except the unredeemed portion of any Security
being redeemed in part.
Section 2.07 Replacement Securities. If any mutilated Security is
surrendered to the Trustee, or the Company and the Trustee receive evidence to
their satisfaction of the destruction, loss or theft of any Security, the
Company shall issue and the Trustee shall authenticate a replacement Security
if the Trustee's requirements are met. If required by the Trustee or the
Company, an indemnity bond must be supplied by the Holder that is sufficient in
the judgment of the Trustee and the Company to protect the Company, the
Trustee, any Agent or any authenticating agent from any loss which any of them
may suffer if a Security is replaced. The Company and the Trustee may charge
for its expenses in replacing a Security.
Every replacement Security is an additional obligation of the Company
and shall be entitled to all benefits of this Indenture equally and
proportionately with all other Securities duly issued hereunder.
Section 2.08 Outstanding Securities. The Securities outstanding at
any time are all the Securities authenticated by the Trustee except for those
cancelled by it, those delivered to it for cancellation and those described in
this Section as not outstanding.
If a Security is replaced pursuant to Section 2.07, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Security is held by a bona fide purchaser.
If the principal amount of any Security is considered paid under
Section 4.01, it ceases to be outstanding and interest on it ceases to accrue.
Except as set forth in Section 2.09, a Security does not cease to be
outstanding because the Company or an Affiliate holds the Security.
Section 2.09 Treasury Securities. In determining whether the
Holders of the required principal amount of Securities have concurred in any
direction, waiver or consent, Securities owned by the Company, any Subsidiary
of the Company or by any Affiliate of the Company (other than an officer or
director of the Company owning less than 1% of the outstanding Securities)
shall be considered as not outstanding, except that for the purposes of
determining whether the Trustee shall be protected in relying on any such
direction, waiver or consent, only Securities which a Trustee has been advised
in writing by the Company or the Holder are so owned shall be so disregarded.
Section 2.10 Temporary Securities. Until definitive Securities are
ready for delivery, the Company may prepare and the Trustee shall authenticate
temporary securities upon a written order of the Company signed by an Officer
and delivered or caused to be delivered to the Trustee. 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
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prepare and the Trustee shall authenticate in accordance with Section 2.02
definitive Securities in exchange for temporary Securities.
Holders of temporary Securities shall be entitled to all benefits of
this Indenture.
Section 2.11 Cancellations. The Company at any time may deliver
Securities to the Trustee for cancellation. The Registrar and Paying Agent
shall forward to the Trustee any Securities surrendered to them for
registration of transfer, exchange, payment or conversion. The Trustee and no
one else shall cancel all Securities surrendered for registration of transfer,
exchange, payment, replacement, cancellation or conversion and certification of
their destruction or retention, in accordance with the Trustee's standard
retention policy, shall be delivered to the Company unless, by a written order,
signed by an Officer, the Company shall direct that cancelled Securities be
returned to it. The Company may not issue new Securities to replace Securities
that it has paid or that have been delivered to the Trustee for cancellation or
that any Securityholder has converted pursuant to Article 10.
Section 2.12 Defaulted Interest. If the Company defaults in a
payment of interest on the Securities, it shall pay the defaulted interest in
any lawful manner plus, to the extent lawful, interest payable on the defaulted
interest, to the Persons who are Holders on a subsequent special record date,
in each case at the rate provided in the Securities and in Section 4.01 hereof.
The Company shall, with the consent of the Trustee, fix each such special
record date and special payment date. At least 15 days before the record date,
the Company (or the Trustee, in the name of and at the expense of the Company)
shall mail to Holders a notice that states the special record date, the related
payment date and the amount of such interest to be paid or shall cause the
defaulted interest to be paid by such other procedure as is mutually acceptable
to the Company and the Trustee.
ARTICLE 3.
REDEMPTION
Section 3.01 Notices to Trustee. If the Company elects to redeem
Securities pursuant to the optional redemption provisions of Section 3.07
hereof, it shall furnish to the Trustee, at least 45 days but not more than 60
days before a redemption date, an Officers' Certificate setting forth (i) the
Section of Indenture pursuant to which the redemption shall occur, (ii) the
redemption date, (iii) the principal amount of Securities to be redeemed, (iv)
the redemption price and (v) if the redemption occurs prior to March 1, 1999, a
statement that the requirements of Section 3.07 have been met.
Section 3.02 Selection of Securities to Be Redeemed. If less than
all of the Securities are to be redeemed, the Trustee shall select the
Securities to be redeemed among the Holders of the Securities on a pro rata
basis or in accordance with any other method the Trustee considers fair and
appropriate (and in such manner as complies with applicable legal and stock
exchange requirements, if any), provided that no Securities of $1,000 or less
shall be redeemed in part. In the event of partial redemption, the particular
Securities to be redeemed shall be selected, unless otherwise provided herein,
not less than 30 nor more than 60 days prior to the redemption date by the
Trustee from the outstanding Securities not previously called for redemption.
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If any Security selected for partial redemption is converted in part
before termination of the conversion right with respect to the portion of the
Security so selected, the converted portion of such Security shall be deemed
(so far as may be) to be the portion selected for redemption. Securities which
have been converted during a selection of Securities to be redeemed (as
described in the first paragraph of this Section 3.02) shall be treated by the
Trustee as outstanding for the purpose of such selection.
The Trustee shall promptly notify the Company in writing of the
Securities selected for redemption and, in the case of any Security selected
for partial redemption, the principal amount thereof to be redeemed.
Securities and portions of them selected shall be in amounts of $1,000 or whole
multiples of $1,000. Except as provided in the preceding sentence, provisions
of this Indenture that apply to Securities called for redemption also apply to
portions of Securities called for redemption.
Section 3.03 Notice of Redemption. At least 30 days but not more
than 60 days before a redemption date, the Company shall mail or cause to be
mailed, by first class mail, a notice of redemption to each Holder whose
Securities are to be redeemed at its registered address.
The notice shall identify the Securities to be redeemed and shall
state:
(a) the redemption date;
(b) the redemption price;
(c) if any Security is being redeemed in part, the portion of the
principal amount of such Security to be redeemed and that, after the redemption
date upon surrender of such Security, a new Security or Securities in principal
amount equal to the unredeemed portion shall be issued;
(d) the Conversion Price, the date on which the right to convert
the principal of the Securities to be redeemed will terminate and the place or
places where such Securities may be surrendered for conversion;
(e) the name and address of the Paying Agent;
(f) that Securities called for redemption must be surrendered to
the Paying Agent to collect the redemption price;
(g) that, unless the Company defaults in making such redemption
payment, interest on Securities called for redemption ceases to accrue on and
after the redemption date; and
(h) the paragraph of the Securities and/or Section of this
Indenture pursuant to which the Securities called for redemption are being
redeemed.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at its expense, based upon information
provided by the Company.
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Section 3.04 Effect of Notice of Redemption. Once notice of
redemption is mailed in accordance with Section 3.03 hereof, Securities so
called for redemption become due and payable on the redemption date at the
redemption price.
Section 3.05 Deposit of Redemption Price. On or before the
redemption date, the Company shall deposit with the Trustee or with the Paying
Agent money sufficient to pay the redemption price of and accrued interest on
all Securities to be redeemed on that date, other than any Securities called
for redemption on that date which have been converted prior to the date of such
deposit. The Trustee or the Paying Agent shall promptly return to the Company
any money deposited with the Trustee or the Paying Agent by the Company in
excess of the amounts necessary to pay the redemption price of, and accrued
interest on, all Securities to be redeemed.
If any Security called for redemption is converted, any money deposited
with the Trustee or with any Paying Agent and held in trust for the redemption
of such Security shall (subject to any right of the Holder of such Security or
any predecessor security to receive interest as provided in the last paragraph
of Section 4.01) be paid to the Company upon request or, if then held by the
Company, shall be discharged from such trust.
On and after the redemption date, interest shall cease to accrue on the
Securities or the portions of Securities called for redemption and any
conversion rights shall terminate. If a Security is redeemed on or after an
interest record date but on or prior to the related interest payment date, then
any accrued and unpaid interest shall be paid to the Person in whose name such
Security was registered at the close of business on such record date. If any
Security called for redemption shall not be so paid upon surrender for
redemption because of the failure of the Company to comply with this Section
3.05, interest shall be paid on the unpaid principal, and to the extent lawful
on any interest not paid on such unpaid principal, in each case at the rate
provided in the Securities and in Section 4.01 hereof, and such Security shall
remain convertible from the redemption date until such principal is paid.
Section 3.06 Securities Redeemed in Part. Upon surrender of a
Security that is redeemed in part, the Company shall issue and the Trustee
shall authenticate for the Holder of the Securities at the expense of the
Company a new Security equal in principal amount to the unredeemed portion of
the Security surrendered.
Section 3.07 Optional Redemption. The Securities are not
redeemable at the option of the Company prior to March 1, 1998. At any time on
or after that date and prior to March 1, 1999, the Securities may be redeemable
at the Company's option on at least 30 but not more than 60 days' notice to the
Holders, in whole at any time or in part from time to time, at 103.5% of the
principal amount, together with accrued interest to the date fixed for
redemption, but only if the average of the last reported sale prices (or
closing bid prices if no sale occurred) of the Common Stock on the Nasdaq
National Market (or, if the Common Stock is not traded on the Nasdaq National
Market, such other national securities exchange on which the Common Stock is
listed or admitted to trading or, if not listed or admitted to trading on any
national securities exchange, on any system of automated dissemination of
quotations of securities prices) for the Trading Days occurring during the
30-day period ending on the tenth calendar day before the first notice of such
redemption is given is greater than 140% of the Conversion Price immediately
prior to the time at which notice of such redemption is given. At any time on
or after March 1, 1999, the Securities may be redeemed at the Company's option
on at least 30 but
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not more than 60 days' notice to the Holders, in whole at any time or in part
from time to time, at the following prices (expressed in percentages of the
principal amount), together with accrued interest to the date fixed for
redemption:
If redeemed during the 12-month period beginning March 1:
Redemption
Date Price
---- ----------
1999 . . . . . . . . . . . . . . . . . . . . 102.6%
2000 . . . . . . . . . . . . . . . . . . . . 101.8%
2001 . . . . . . . . . . . . . . . . . . . . 100.9%
and 100% on or after March 1, 2002.
Section 3.08 Mandatory Redemption. Except as set forth under
Section 4.06 of this Indenture, the Company shall not be required to make
mandatory redemption payments with respect to the Securities. There are no
sinking fund payments with respect to the Securities.
ARTICLE 4.
COVENANTS
Section 4.01 Payment of Securities. The Company shall pay the
principal of and interest on the Securities on the dates and in the manner
provided in the Securities. Principal and interest shall be considered paid on
the date due if the Paying Agent (other than the Company or a Subsidiary of the
Company) holds on that date money designated for and sufficient to pay all
principal and interest then due; provided, however, that money held by the
Paying Agent for the benefit of holders of Senior Indebtedness pursuant to the
provisions of Article 11 hereof shall not be considered paid within the meaning
of this Section 4.01.
To the extent lawful, the Company shall pay interest (including
post-petition interest in any proceeding under any Bankruptcy Law) on (i)
overdue principal, at the rate borne by the Securities, compounded
semiannually, and (ii) overdue installments of interest (without regard to any
applicable grace period) at the same rate, compounded semiannually.
Section 4.02 Maintenance of Office or Agency. The Company will
maintain in the Borough of Manhattan, the City of New York, State of New York,
the office or agency required under Section 2.03. The Company will give prior
written notice to the Trustee of the location, and any change in the location,
of such office or agency. If at any time the Company fails to maintain any
such required office or agency or shall fail to furnish the Trustee with the
address thereof, such presentations, surrenders, notices and demands may be
made or served at the address of the Trustee as set forth in Section 12.10.
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Section 4.03 Compliance Certificate. The Company shall deliver to
the Trustee, within 120 days after the end of the fiscal year of the Company
commencing with the fiscal year ending February 1, 1997, an Officers'
Certificate stating that a review of the activities of the Company and its
Subsidiaries during the preceding fiscal year has been made under the
supervision of the signing Officers with a view to determining whether the
Company has kept, observed, performed and fulfilled its obligations under this
Indenture, and further stating, as to each such Officer signing such
certificate, that to the best of his knowledge the Company has kept, observed,
performed and fulfilled each and every covenant contained in this Indenture and
is not in default in the performance or observance of any of the terms,
provisions and conditions hereof (or, if a Default or Events of Default shall
have occurred, describing all such Defaults or Events of Default of which he
may have knowledge) and that to the best of his knowledge no event has occurred
and remains in existence by reason of which payments on account of the
principal of or interest, if any, on the Securities are prohibited.
The Company will, so long as any of the Securities are outstanding
deliver to the Trustee, forthwith upon becoming aware of (i) any Default, Event
of Default or default in the performance of any covenant, agreement or
condition in this Indenture or (ii) any event of default under any other
mortgage, indenture or instrument as that term is used in Section 6.01(4), an
Officers' Certificate specifying such Default, Event of Default or default.
Section 4.04 Stay, Extension or Usury Laws. The Company covenants
(to the extent that it may lawfully do so) that it will not at any time insist
upon, plead, or in any manner whatsoever claim or take the benefit or advantage
of any stay, extension or usury laws wherever enacted, now or at any time
hereafter in force, which may affect the covenants or the performance of this
Indenture and the Company (to the extent it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and covenants that
it will not resort to any such law, hinder, delay or impede the execution of
any power herein granted to the Trustee, but will suffer and permit the
execution of every such power as though no such law has been enacted.
Section 4.05 Continued Existence. Subject to Article 5 hereof, the
Company shall do or cause to be done all things necessary to preserve and keep
in full force and effect (i) its corporate existence, and the corporate,
partnership or other existence of any Subsidiary of the Company, in accordance
with the respective organizational documents (as the same may be amended from
time to time) of the Company or any such Subsidiary and (ii) the rights
(charter and statutory), licenses and franchises of the Company and its
Subsidiaries; provided, however, that the Company shall not be required to
preserve any such right, license or franchise, or the corporate, partnership or
other existence of any of its Subsidiaries if the Board of Directors shall
determine that the preservation thereof is no longer desirable in the conduct
of the business of the Company and its Subsidiaries, taken as a whole, and that
the loss thereof is not materially adverse to the Holders of the Securities.
Section 4.06 Offer to Repurchase Upon Change of Control.
(a) Upon the occurrence of a Change of Control, each Holder of
Securities shall have the right to require the Company to repurchase all or any
part (equal to $1,000 or an integral multiple thereof) of such Holder's
Securities pursuant to the offer described below (the "Change of Control
Offer") at a purchase price equal to 101% of the aggregate principal amount
thereof plus accrued and unpaid interest, if any, to the date of purchase (the
"Change of Control Payment"). Within 10 days following the Change of Control,
the Company shall issue a press release and mail a notice via first class mail,
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postage prepaid, to the Trustee and each Holder stating: (1) that the Change of
Control Offer is being made pursuant to this Section and that all Securities
tendered will be accepted for payment; (2) the Change of Control Payment and
the purchase date, which shall be no earlier than 30 days nor later than 40
days from the date such notice is mailed (the "Change of Control Payment
Date"); (3) that any Security not tendered will continue to accrue interest;
(4) that, unless the Company defaults in the payment of the Change of Control
Payment, all Securities accepted for payment pursuant to the Change of Control
Offer shall cease to accrue interest on and after the Change of Control Payment
Date; (5) that Holders electing to have any Securities purchased pursuant to a
Change of Control Offer will be required to surrender the Securities, with the
form entitled "Option of Holder to Elect Purchase" on the reverse of the
Securities completed, to the Paying Agent at the address specified in the
notice prior to the close of business on the third Business Day preceding the
Change of Control Payment Date; (6) that Holders will be entitled to withdraw
their election if the Paying Agent receives, not later than 5:00 p.m. New York
City time on the second Business Day preceding the Change of Control Payment
Date, a telegram, telex, facsimile transmission or letter setting forth the
name of the Holder, the principal amount of Securities delivered for purchase
and a statement that such Holder is withdrawing his election to have such
Securities purchased; and (7) that Holders whose Securities are being purchased
only in part will be issued new Securities equal in principal amount to the
unpurchased portion of the Securities surrendered, which unpurchased portion
must be equal to $1,000 in principal amount or an integral multiple thereof.
The Company shall comply with the requirements of Rules 13e-4 and 14e-1 under
the Exchange Act and any other securities laws and regulations thereunder to
the extent such laws and regulations are applicable in connection with the
repurchase of the Securities in connection with a Change of Control.
(b) On the Change of Control Payment Date, the Company shall, to
the extent lawful, (1) accept for payment Securities or portions thereof
tendered pursuant to the Change of Control Offer, (2) deposit with the Paying
Agent an amount equal to the Change of Control Payment in respect of all
Securities or portions thereof so tendered and (3) deliver or cause to be
delivered to the Trustee the Securities so accepted together with an Officers'
Certificate stating the Securities or portions thereof tendered to the Company.
The Paying Agent shall promptly mail to each Holder of Securities so accepted
the Change of Control Payment for such Securities, and the Trustee shall
promptly authenticate and mail to each Holder a new Security equal in principal
amount to any unpurchased portion of the Securities surrendered, if any;
provided, that each such new Security shall be in a principal amount of $1,000
or an integral multiple thereof. The Company will publicly announce the
results of the Change of Control Offer on or as soon as practicable after the
Change of Control Payment Date.
(c) Except as described above with respect to a Change of Control,
the Company shall not be required to repurchase or redeem the Securities from
the Holder of the Securities in the event of a takeover, recapitalization or
similar restructuring.
Section 4.07 Reports by Company. The Company shall deliver to the
Trustee, within 15 days after it files the same with the Commission, copies of
all reports and information (or copies of such portions of any of the foregoing
as the Commission may by rules and regulations prescribe), if any, which the
Company is required to file with the Commission pursuant to Section 13 or 15(d)
of the Exchange Act. The Company agrees to continue to be subject to and
comply with the filing and reporting requirements of the Commission as long as
any of the Securities are outstanding. The Company shall comply with the
provisions of Trust Indenture Act Section 314(a).
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ARTICLE 5.
SUCCESSORS
Section 5.01 When Company May Merge, etc. The Company, in a single
transaction or through a series of related transactions, shall not consolidate
with or merge with or into, or sell, lease, convey or otherwise dispose of all
or substantially all of its assets to any Person unless:
(1) the Person formed by or surviving any such
consolidation or merger (if other than the Company), or to which such
sale, lease, conveyance or other disposition shall have been made, is a
corporation organized and existing under the laws of the United States,
any state thereof or the District of Columbia;
(2) the corporation formed by or surviving any such
consolidation or merger (if other than the Company), or to which such
sale, lease, conveyance or other disposition shall have been made,
assumes by supplemental indenture all the obligations of the Company
under the Securities and this Indenture, except that it need not assume
the obligations of the Company as to conversion of Securities if,
pursuant to Section 10.09, the Company or another Person enters into a
supplemental indenture obligating it to deliver the securities, cash or
other assets deliverable upon conversion of Securities; and
(3) immediately after the transaction no Default or Event
of Default exists.
The Company shall deliver to the Trustee prior to the consummation of
the proposed transaction an Officers' Certificate to the foregoing effect and
an Opinion of Counsel stating that the proposed transaction and such
supplemental indenture comply with this Indenture.
Section 5.02 Successor Corporation Substituted. Upon any
consolidation or merger, or any sale, lease, conveyance or other disposition of
all or substantially all of the assets of the Company in accordance with
Section 5.01, the successor corporation formed by such consolidation or into or
with which the Company is merged or to which such sale, lease, conveyance or
other disposition is made shall succeed to, and be substituted for, and may
exercise every right and power of, the Company under this Indenture with the
same effect as if such successor person had been named as the Company herein;
provided, however, that the predecessor Company in the case of a sale, lease,
conveyance or other disposition shall not be released from the obligation to
pay the principal of and interest on the Securities.
ARTICLE 6.
DEFAULTS AND REMEDIES
Section 6.01 Events of Default. An "Event of Default" occurs if:
(1) the Company defaults in the payment of interest on any
Security when the same becomes due and payable and the Default
continues for a period of 30 days (whether or not prohibited by Article
11 hereof);
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(2) the Company defaults in the payment of the principal
and premium, if any, of any Security when the same becomes due and
payable at maturity, upon redemption or otherwise, including failure by
the Company to purchase the Securities when required pursuant to
Section 4.06 hereof (whether or not prohibited by Article 11 hereof);
(3) the Company fails to comply with any of its other
agreements or covenants in, or provisions of, the Securities or this
Indenture and the Default continues for the period and after the notice
specified below;
(4) an event of default occurs under any mortgage,
indenture or instrument under which there may be issued or by which
there may be secured or evidenced any indebtedness for money borrowed
by the Company or any of its Subsidiaries (or the payment of which is
guaranteed by the Company or any of its Subsidiaries), whether such
indebtedness or guarantee now exists or shall be created after the date
hereof, which default (i) is caused by a failure to pay principal or
interest on such indebtedness prior to the expiration of the grace
period provided in such indebtedness (a "Payment Default") or (ii)
results in the acceleration of such indebtedness prior to its expressed
maturity and, in each case, the principal amount of such indebtedness,
together with the principal amount of any other such indebtedness under
which there has been a Payment Default or the maturity of which has
been so accelerated, aggregates $10 million or more;
(5) final judgments or decrees shall be entered by a court
of competent jurisdiction against the Company or any Significant
Subsidiary involving liabilities of $10 million or more (singly or in
the aggregate) (after deducting the portion of such liabilities
accepted by a reputable insurance company) and such final judgments or
decrees shall not have been vacated, discharged, satisfied or stayed
pending appeal within 60 days from the entry thereof.
(6) the Company or any Significant Subsidiary pursuant to
or within the meaning of any Bankruptcy Law:
(A) commences a voluntary case;
(B) consents to the entry of an order for relief
against it in any involuntary case;
(C) consents to the appointment of a Custodian of
it or for all or substantially all of its property;
(D) makes a general assignment for the benefit
of its creditors; or
(E) generally is unable to pay its debts as the
same become due;
(7) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(A) is for relief against the Company or any
Significant Subsidiary in an involuntary case;
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(B) appoints a Custodian of the Company or any
Significant Subsidiary or for all or substantially all of its
property; or
(C) orders the liquidation of the Company or any
Significant Subsidiary;
and the order or decree remains unstayed and in effect for 60 days.
The term "Bankruptcy Law" means Title 11 U.S. Code or any similar
Federal or State Law for the relief of debtors. The term "Custodian" means any
receiver, trustee, assignee, liquidator or similar official under any
Bankruptcy Law.
A Default under clause (3) (other than Defaults under Section 4.05,
5.01 or 10.01 which Defaults shall be Events of Default with the notice but
without the passage of time specified in this paragraph) is not an Event of
Default until the Trustee or the Holders of at least 25% in principal amount of
the then outstanding Securities notify the Company of the Default and the
Company does not cure the Default within 60 days after receipt of the notice.
The notice must specify the Default, demand that it be remedied and state that
the notice is a "Notice of Default."
In the case of any Event of Default pursuant to the provisions of this
Section 6.01 occurring by reason of any willful action (or inaction) taken (or
not taken) by or on behalf of the Company with the intention of avoiding
payment of the premium which the Company would have had to pay if the Company
then had elected to redeem the Securities pursuant to paragraph 7 of the
Securities, an equivalent premium shall also become and be immediately due and
payable to the extent permitted by law, anything in this Indenture or in the
Securities contained to the contrary notwithstanding.
Section 6.02 Acceleration. If an Event of Default (other than an
Event of Default specified in clauses (6) and (7) of Section 6.01 with respect
to the Company) occurs and is continuing, the Trustee or the Holders of at
least 25% in principal amount of the then outstanding Securities by notice to
the Company and the Representative under the Credit Agreement (and to the
Trustee if such notice is given by the Holders), may declare the unpaid
principal of and accrued interest on all the Securities to be due and payable.
Upon such declaration the principal and interest shall be due and payable upon
the first to occur of an acceleration under the Credit Agreement or five
Business Days after receipt by the Company and the Representative under the
Credit Agreement of such written notice given hereunder. In the event of a
declaration of acceleration under the Indenture because of an Event of Default
set forth in Section 6.01(4) has occurred and is continuing, such declaration
of acceleration shall be automatically annulled if the holders of the
indebtedness which is the subject of such Event of Default have rescinded their
declaration of acceleration in respect of such indebtedness within 30 days
thereof and no other Event of Default has occurred during such 30-day period
which has not been cured or waived. If an Event of Default specified in clause
(6) or (7) of Section 6.01 occurs with respect to the Company, such an amount
shall ipso facto become and be immediately due and payable without any
declaration or other act on the part of the Trustee or any Holder. The Holders
of a majority in principal amount of the then outstanding Securities by notice
to the Trustee may rescind an acceleration and its consequences if the
rescission would not conflict with any judgment or decree and if all existing
Events of Default (except nonpayment of principal or interest that has become
due solely because of the acceleration) have been cured or waived.
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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 or interest on the Securities or to enforce the performance of any
provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Securities and 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. All
remedies are cumulative to the extent permitted by law.
Section 6.04 Waiver of Past Defaults. The Holders of a majority in
principal amount of the then outstanding Securities, by notice to the Trustee,
may waive an existing Default or Event of Default and its consequences except a
continuing Default or Event of Default in the payment of the principal of,
premium, if any, or interest on any Security or a Default or Event of Default
under Article 10.
Section 6.05 Control by Majority. The Holders of a majority in
principal amount of the then outstanding Securities may direct the time, method
and place of conducting any proceeding for any remedy available to the Trustee
or exercising any trust or power conferred on it. However, the Trustee may
refuse to follow any direction that conflicts with law or this Indenture, is
unduly prejudicial to the rights of other Securityholders, or would involve the
Trustee in personal liability.
Section 6.06 Limitation on Suits. A Securityholder may pursue a
remedy with respect to this Indenture or the Securities only if:
(1) the Holder gives to the Trustee notice of a continuing
Event of Default;
(2) the Holders of at least 25% in principal amount of the
then outstanding Securities make a request to the Trustee to pursue the
remedy;
(3) such Holder or Holders offer to the Trustee indemnity
satisfactory to the Trustee against any loss, liability or expense;
(4) the Trustee does not comply with the request within 60
days after receipt of the request and the offer of indemnity; and
(5) during such 60-day period the Holders of a majority in
principal amounts of the then outstanding Securities do not give the
Trustee a direction inconsistent with the request.
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 Payment. Notwithstanding
any other provision of this Indenture, the right of any Holder of a Security to
receive payment of principal and interest on the Security, on or after the
respective due dates expressed in the Security, or to bring suit for the
enforcement of any such payment on or after such respective dates, shall not be
impaired or affected without the consent of the Holder.
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Notwithstanding any other provision of this Indenture, the right of any
Holder of a Security to bring suit for the enforcement of the right to convert
the Security shall not be impaired or affected without the consent of the
Holder.
Section 6.08 Collection Suit by Trustee. If an Event of Default
specified in Section 6.01(1) or (2) occurs and is continuing, the Trustee may
recover judgment in its own name and as trustee of an express trust against the
Company for the whole amount of principal and interest remaining unpaid on the
Securities and interest on overdue principal and interest and such further
amount as shall be sufficient to cover the costs and, to the extent lawful,
expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.
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 and the Securityholders
allowed in any judicial proceedings relative to the Company, its creditors or
its property. Nothing contained herein shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any
Securityholder any plan of reorganization, arrangement, adjustment or
composition affecting the Securities or the rights of any Holder thereof, or to
authorize the Trustee to vote in respect of the claim of any Securityholder in
any such proceeding.
Section 6.10 Priorities. If the Trustee collects any money
pursuant to this Article, it shall pay out the money in the following order:
First: to the Trustee for amounts due under Section
7.07;
Second: to holder of Senior Indebtedness to the
extent required by Article 11;
Third: 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, respectively; and
Fourth: to the Company.
Notwithstanding Section 2.12 hereof, the Trustee may fix a record date
and payment date for any payment to Securityholders for purposes of making
payments under Article 6.
Section 6.11 Undertaking for Costs. In any suit for the
enforcement of any right or remedy under this Indenture or in any suit against
the Trustee for any action taken or omitted by it as a Trustee, a court in its
discretion may require the filing by a 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, 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 does not apply
to a suit by the Trustee, a suit by a Holder pursuant to Section 6.07, or a
suit by Holders of more than 10% in principal amount of the then outstanding
Securities.
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ARTICLE 7.
TRUSTEE
Section 7.01 Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their exercise, as a
prudent man would exercise or use under the circumstances in the conduct of his
own affairs.
(b) Except during the continuance of an Event of Default;
(1) The Trustee need perform only those duties that are
specifically set forth in this Indenture and no others.
(2) In the absence of bad faith on its part, the Trustee
may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements of
this Indenture. However, the Trustee shall examine the certificates
and opinions to determine whether or not they conform to the
requirements of this Indenture but need not confirm the correctness of
all mathematical computations or other facts or matters stated therein.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(1) This paragraph does not limit the effect of paragraph
(b) of this Section.
(2) The Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer, unless it is
proved that the Trustee was negligent in ascertaining the pertinent
facts.
(3) The Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 6.05 or any other
direction permitted by this Indenture.
(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.
(e) The Trustee may refuse to perform any duty or exercise any
right or power, and no provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur financial liability unless it
receives indemnity satisfactory to it against any loss, liability or expense.
(f) 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.
Money held in trust by the Trustee need not be segregated from other funds
except to the extent required by law.
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Section 7.02 Rights of Trustee.
Except as otherwise provided in Section 7.01:
(a) The Trustee may rely on any document believed by it to be
genuine and to have been signed or presented by the proper person. The Trustee
need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may
require an Officers' Certificate or an Opinion of Counsel, or both. The
Trustee shall not be liable for any action it takes or omits to take in good
faith in reliance on such Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through 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.
(e) The Trustee may consult with counsel, 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) For all purposes under this Indenture, the Trustee shall not
be deemed to have notice or knowledge of any Event of Default (other than under
Section 6.01(1) or (2)) unless a Responsible Officer knows of such Event of
Default or unless written notice of any Event of Default (other than under
Section 6.01(1) or (2)) is received by the Trustee at its address specified in
Section 12.10 hereof and such notice references the Securities generally, the
Company or this Indenture.
Section 7.03 Individual Rights of Trustee. The Trustee in its
individual or any other capacity may become the owner or pledgee of Securities
and may otherwise deal with the Company or an Affiliate with the same rights it
would have if it were not Trustee. However, in the event that the Trustee
acquires any conflicting interest it must eliminate such conflict within 90
days, apply to the Commission for permission to continue as Trustee or resign.
Any Agent may do the same with like rights. However, the Trustee is subject to
Sections 7.10 and 7.11.
Section 7.04 Trustee's Disclaimer. The Trustee makes no
representation as to the validity or adequacy of this Indenture or the
Securities, and it shall not be accountable for the Company's use of the
proceeds from the Securities, and it shall not be responsible for any statement
of the Company in the Indenture or any statement in the Securities other than
its authentication.
Section 7.05 Notice of Defaults. If a Default or Event of Default
occurs and is continuing and if it is known to the Trustee, the Trustee shall
mail to Securityholders a notice of the Default or Event of Default within 90
days after it occurs. Except in the case of a Default or Event of Default in
payment on any Security (including any failure to make any mandatory repurchase
payment required hereunder), the Trustee may withhold the notice if and so long
as a committee of its Responsible Officers in good faith determines that
withholding the notice is in the interests of Securityholders.
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Section 7.06 Reports by Trustee to Holders. Within 60 days after
each May 15th, commencing with May 15, 1996, the Trustee shall mail to
Securityholders a brief report dated as of such reporting date that complies
with Trust Indenture Act Section 313(a) (but if no event described in Trust
Indenture Act Section 313(a) has occurred within the twelve months preceding
the reporting date, no report need be transmitted). The Trustee also shall
comply with Trust Indenture Act Section 313(b). The Trustee shall also
transmit by mail all reports as required by Trust Indenture Act Section
313(c).
A copy of each report at the time of its mailing to Securityholders
shall be filed with the Commission and each stock exchange on which the
Securities are listed as required by Trust Indenture Act Section 313(d). The
Company shall notify the Trustee when the Securities are listed on any stock
exchange.
Section 7.07 Compensation and Indemnity. The Company shall pay to
the Trustee from time to time reasonable compensation for its services
hereunder. The Trustee's compensation shall not be limited by any law on
compensation of a trustee of an express trust. The Company shall reimburse the
Trustee upon request for all reasonable out-of-pocket expenses incurred by it.
Such expenses may include the reasonable compensation and out-of-pocket
expenses of the Trustee's agents and counsel.
The Company shall indemnify the Trustee, its officers, directors,
agents and employees, against any loss or liability incurred by it including,
to the extent provided herein, the costs and expenses of defending itself
against any claims or liability in connection with the exercise or performance
of any of its powers or duties hereunder. The Trustee shall notify the Company
promptly of any claim for which it may seek indemnity. If the Company defends
against any such claim, the Trustee shall cooperate in the defense. The
Trustee may have separate counsel, selected by it, at the Company's expense for
such counsel's reasonable fees and expenses before the Company assumes the
defense of such claim and at the Trustee's expense after the Company has
assumed such defense. If, however, the counsel selected by the Trustee advises
the Company and the Trustee as to such claim that the posture of the Company is
or may be inconsistent with the posture of the Trustee, then the Trustee may
resume the defense of such claim with its counsel and the Company shall pay the
reasonable fees and expenses of such counsel incurred after that time. The
Company need not pay for any settlement made without its consent, which consent
shall not be unreasonably withheld.
The Company need not reimburse any expense or indemnify against any
loss or liability incurred by the Trustee through negligence or bad faith. If
negligence or bad faith of the Trustee is established, the Trustee shall be
responsible for its own counsel fees.
To secure the Company's payment obligations in this Section, the
Trustee shall have a lien prior to the Securities on all money or property held
or collected by the Trustee, except that held in trust to pay principal and
interest on particular Securities.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(6) or (7) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under the Bankruptcy Law.
Section 7.08 Replacement of Trustee. A resignation or removal of
the Trustee and appointment of a successor Trustee shall become effective only
upon the successor Trustee's acceptance of appointment as provided in this
Section.
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The Trustee may resign by so notifying the Company. The Holders of a
majority in principal amount of the then outstanding Securities may remove the
Trustee by so notifying the Trustee and the Company. The Company may remove
the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged a bankrupt or an insolvent or
an order for relief is entered with respect to the Trustee under any
Bankruptcy Law;
(3) a Custodian or public officer takes charge of the
Trustee or its property; or
(4) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a
successor Trustee. Within one year after the successor Trustee takes office,
the Holders of a majority in principal amount of the then outstanding
Securities may appoint a successor Trustee to replace the successor Trustee
appointed by the Company.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or
the Holders of at least 10% in principal amount of the then outstanding
Securities may petition any court of competent jurisdiction for the appointment
of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any Securityholder
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Securityholders. The retiring Trustee shall promptly transfer
all property held by it as Trustee to the successor Trustee, subject to the
lien provided for in Section 7.07. Notwithstanding the replacement of the
Trustee pursuant to this Section 7.08, the Company's obligations under Section
7.07 hereof shall continue for the benefit of the retiring Trustee with respect
to expenses and liabilities incurred by it prior to such replacement.
Section 7.09 Successor Trustee by Merger, etc. If the Trustee
consolidates, merges or converts into, or transfers all or substantially all of
its corporate trust business to, another corporation, the successor corporation
without any further act shall be the successor Trustee. In case at the time
such successor or successors by merger, conversion or consolidation to the
Trustee shall succeed to the trusts created by this Indenture, any of the
Securities shall have been authenticated but not delivered, any such successor
to the Trustee may adopt the certificate of authentication of any predecessor
trustee, and deliver such Securities so authenticated; and in case at that time
any of the Securities shall not have been authenticated, any successor to the
Trustee may authenticate such Securities either in the name of any predecessor
hereunder or in the name of the successor to the Trustee; and in all such cases
such certificates shall have the full force and effect which this Indenture
provides for the certificate of authentication of the Trustee.
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Section 7.10 Eligibility; Disqualification. This Indenture shall
always have a Trustee who satisfies the requirements of Trust Indenture Act
Section 310(a)(1), (2) and (5). The Trustee shall always have a combined
capital and surplus of at least $100,000,000, as set forth in its most recently
published reports of condition. The Trustee is subject to and shall comply
with Trust Indenture Act Section 310(b);provided, however, that there shall be
excluded from the operation of Trust Indenture Act Section 310(b)(1) any
indenture or indentures under which other securities or certificates of
interest or participation in other securities of the Company are outstanding if
the requirements for such exclusion set forth in Trust Indenture Act Section
310(b)(1) are met.
Section 7.11 Preferential Collection of Claims Against Company.
The Trustee is subject to and shall comply with Trust Indenture Act Section
311(b). A Trustee who has resigned or been removed shall be subject to Trust
Indenture Act Section 311(a) to the extent indicated therein.
ARTICLE 8.
DISCHARGE OF INDENTURE
Section 8.01 Termination of Company's Obligations. This Indenture
shall cease to be of further effect (except that the Company's obligations
under Section 7.07 and 8.03 shall survive) when all outstanding Securities
theretofore authenticated and issued have been delivered to the Trustee for
cancellation and the Company has paid all sums payable hereunder. In addition,
the Company may terminate all of its obligations under this Indenture (except
the Company's obligations under Section 7.07 and 8.03) if:
(1) the Securities mature within one year or all of them
are to be called for redemption within one year under arrangements
satisfactory to the Trustee for giving the notice of redemption; and
(2) the Company irrevocably deposits in trust with the
Trustee money or U.S. Government Obligations sufficient to pay
principal, and premium, if any, and interest on the Securities to
maturity or redemption,as the case may be, and to pay all other sums
payable by it hereunder. The Company may make the deposit only during
the one-year period and only if Article 11 permits it.
However, the Company's obligations in Sections 2.03, 2.04, 2.05, 2.06, 2.07,
4.01, 7.07, 8.03, 8.04 and in Article 10, shall survive until the Securities
are no longer outstanding. Thereafter, only the Company's obligations in
Section 7.07 and 8.03 shall survive.
After a deposit made pursuant to this Section 8.01, the Trustee upon
request shall acknowledge in writing the discharge of the Company's obligations
under this Indenture except for those surviving obligations specified above.
"U.S. Government Obligations" means direct obligations of the United
States of America for the payment of which the full faith and credit of the
United States of America is pledged. In order to have money available on a
payment date to pay principal or interest on the Securities, the U.S.
Government Obligations shall be payable as to principal or interest on or
before such payment date in such amounts
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as will provide the necessary money. U.S. Government Obligations shall not be
callable at the issuer's option.
Section 8.02 Application of Trust Money. The Trustee shall hold in
trust money or U.S. Government Obligations deposited with it pursuant to
Section 8.01. It shall apply the deposited money and the money from U.S.
Government Obligations through the Paying Agent and in accordance with this
Indenture to the payment of principal and interest on the Securities. Money
and securities so held in trust are not subject to Article 11.
Section 8.03 Repayment to Company. The Trustee and the Paying
Agent shall promptly pay to the Company upon request any excess money or
securities held by them at any time.
The Trustee and the Paying Agent shall pay to the Company upon request
any money held by them for the payment of principal or interest that remains
unclaimed for two years after the date upon which such payment shall have
become due; provided, however, that the Company shall have first caused notice
of such payment to the Company to be mailed to each Securityholder entitled
thereto no less than 30 days prior to such payment. After payment to the
Company, Securityholders entitled to the money must look to the Company for
payment as general creditors unless an applicable abandoned property law
designates another person.
Section 8.04 Reinstatement. If (i) the Trustee or Paying Agent is
unable to apply any money in accordance with Section 8.02 by reason of any
order or judgment of any court or governmental authority enjoining, restraining
or otherwise prohibiting such application and (ii) the Holders of at least a
majority in principal amount of the then outstanding Securities so request by
written notice to the Trustee, the Company's obligations under this Indenture
and the Securities shall be revived and reinstated as though no deposit had
occurred pursuant to Section 8.01 until such time as the Trustee or Paying
Agent is permitted to apply all such money in accordance with Section 8.02;
provided, however, that if the Company makes any payment of interest on or
principal of any Security following the reinstatement of its obligations, the
Company shall be subrogated to the rights of the Holders of such Securities to
receive such payment from the money held by the Trustee or Paying Agent.
ARTICLE 9.
AMENDMENTS
Section 9.01 Without Consent of Holders. The Company and the
Trustee may amend this Indenture or the Securities without the consent of any
Securityholder:
(1) to cure any ambiguity, defect or inconsistency;
(2) to comply with Sections 5.01 and 10.09;
(3) to provide for uncertificated Securities in addition
to or in place of certificated Securities;
(4) to evidence and provide for the acceptance of
appointment by a successor trustee;
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(5) to make any change that would provide additional
rights or benefits to Securityholders or that does not adversely affect
the legal rights hereunder of any Securityholder; or
(6) to comply with the requirements of the Commission in
order to effect or maintain the qualification of the Indenture under
the Trust Indenture Act.
Section 9.02 With Consent of Holders. Subject to Section 6.07, the
Company and the Trustee may amend this Indenture or the Securities with the
written consent of the Holders of at least a majority in principal amount of
the then outstanding Securities. Subject to Sections 6.04 and 6.07, the
Holders of a majority in principal amount of the Securities then outstanding
may also waive compliance in a particular instance by the Company with any
provision of this Indenture or the Securities. However, without the consent of
each Securityholder affected, an amendment or waiver under this Section may
not:
(1) reduce the amount of Securities whose Holders must
consent to an amendment or waiver;
(2) reduce the rate of or change the time for payment of
interest on any Security;
(3) reduce the principal of or change the fixed maturity
of any Security or alter the redemption provisions with respect
thereto;
(4) make any Security payable in money other than that
stated in the Security;
(5) make any change in Sections 6.04, 6.07 or 9.02 (this
sentence);
(6) except as otherwise provided in Article 10, increase
the Conversion Price or otherwise modify or affect in any manner
adverse to the Securityholders the terms and conditions of Article 10;
(7) make any change in Article 11 that adversely affects
the rights of any Securityholder; or
(8) waive a Default in the payment of the principal of,
premium, if any, or interest on, any Security (except a rescission of
acceleration of the Securities by the Holders of at least a majority in
aggregate principal amount of the Securities and a waiver of the
payment default that resulted from such acceleration) or any Default
under Article 10.
To secure a consent of the Holders under this Section, it shall not be
necessary for the Holders to approve the particular form of any proposed
amendment or waiver, but it shall be sufficient if such consent approves the
substance thereof.
After an amendment or waiver under this Section becomes effective, the
Company shall mail to Securityholders a notice briefly describing the amendment
or waiver. If any Securityholder fails to
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receive any such notice, or if such notice contains a defect, such failure or
defect shall not impair or affect the validity of any such supplement or
waiver.
Section 9.03 Compliance with Trust Indenture Act. Every amendment
to this Indenture or the Securities shall be set forth in a supplemental
indenture that complies with the Trust Indenture Act as then in effect.
Section 9.04 Revocation and Effect of Consents. Until an amendment
or waiver becomes effective, a consent to it by a Holder of a Security is a
continuing consent by the Holder and every subsequent Holder of a Security or
portion of a Security that evidences the same debt as the consenting Holder's
Security, even if notation of the consent is not made on any Security.
However, any such Holder or subsequent Holder may revoke the consent as to his
Security or portion of a Security if the Trustee receives the notice of
revocation before the date on which the Trustee receives an Officers'
Certificate certifying that the Holders of the requisite principal amount of
Securities have consented to the amendment or waiver.
The Company may fix a record date for the purpose of determining the
Holders entitled to consent to any amendment or waiver. If the Company fixes a
record date, the record date shall be fixed at (i) the later of 30 days prior
to the first solicitation of such consent or the date of the most recent list
of Holders furnished to the Trustee prior to such solicitation pursuant to
Section 2.05 or (ii) such other date as the Company shall designate. If a
record date is fixed, then notwithstanding the foregoing, those Persons who
were Holders at such record date (or their duly designated proxies), and only
those Persons, shall be entitled to consent to such amendment or waiver or to
revoke any consent previously given, whether or not such Persons continue to be
Holders after such record date.
After an amendment or waiver becomes effective it shall bind every
Securityholder unless it is of the type described in any of clauses (1) through
(8) of Section 9.02. In such case, the amendment or waiver shall bind each
Holder of a Security who has consented to it and every subsequent Holder of a
Security that evidences the same debt as the consenting Holder's Security.
Section 9.05 Notation on or Exchange of Securities. The Trustee
may place an appropriate notation about an amendment or waiver on any Security
thereafter authenticated. The Company in exchange for all Securities may issue
and the Trustee shall authenticate new Securities that reflect the amendment or
waiver.
Section 9.06 Trustee Protected. The Trustee shall sign all
supplemental indentures, except that the Trustee need not sign any supplemental
indenture that adversely affects its rights. In signing such amendment the
Trustee shall be entitled to receive indemnity reasonably satisfactory to it
and to receive, and (subject to Section 7.01) shall be fully protected in
relying upon, an Officers' Certificate and an Opinion of Counsel stating that
such amendment is authorized or permitted by this Indenture and complies with
the provisions hereof (including Section 9.03).
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ARTICLE 10.
CONVERSION
Section 10.01 Conversion Privilege. A Holder of a Security may
convert it into Common Stock at any time during the period stated in paragraph
6 of the Securities. The number of shares issuable upon conversion of a
Security is determined as follows: Divide the principal amount to be converted
by the conversion price in effect on the conversion date. Round the result to
the nearest 1/100th of a share.
The initial conversion price is stated in paragraph 6 of the Securities
(the "Conversion Price"). The conversion price is subject to adjustment.
A holder may convert a portion of a Security if the portion is $1,000
or a multiple of $1,000. Provisions of this Indenture that apply to conversion
of all of a Security apply to conversion of a portion of it.
If a Security or portion thereof is called for redemption, such
conversion right in respect of the Security or portion thereof so called shall
expire at the close of business on the second Business Day prior to the date
fixed for such redemption unless the Company defaults in making the payment due
upon redemption, in which case such right of conversion shall be reinstated.
Section 10.02 Conversion Procedure. To convert a Security a Holder
must satisfy the requirements in paragraph 6 of the Securities. The date on
which the Holder satisfies all those requirements is the conversion date. As
soon as practical, the Company shall deliver a certificate for the number of
full shares of Common Stock issuable upon the conversion and a check for any
fractional share. The person in whose name the certificate is registered shall
be treated as a shareholder of record on and after the conversion date.
Securities surrendered for conversion during the period from the close
of business on any record date next preceding any interest payment date to the
opening of business on such interest payment date shall (except in the case of
Securities or portions thereof which have been called for redemption within
such period) be accompanied by payment in funds acceptable to the Company of an
amount equal to the interest payable on such interest payment date on the
principal amount of Securities being surrendered for conversion. Subject to
the provisions of Section 4.01 relating to the payment of defaulted interest by
the Company, the interest payment with respect to a Security (a) called for
redemption that is converted during the period from the close of business on
any record date to the opening of business on the corresponding interest
payment date will be payable on that interest payment date to the registered
Holder at the close of business on such record date, or (b) called for
redemption, if the record date preceding the redemption date is after the
latest date for conversion of such Securities, will be payable on the
corresponding interest payment date to the extent of accrued interest through
the conversion date to the registered Holder at the time of conversion, and the
Holder converting the Security need not make a payment equal to the interest
payment amount upon conversion of the Security for conversion. Except as
provided in the preceding sentence, no payment or adjustment shall be made upon
any conversion on account of any interest accrued on the Securities surrendered
for conversion or on account of any dividends on the Common Stock issued upon
conversion which were declared for payment to holders of Common Stock of record
as of a date prior to the conversion date.
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If a Holder converts more than one Security at the same time, the
number of full shares issuable upon the conversion shall be based on the total
principal amount of the Securities converted.
Upon the surrender of a security that is converted in part, the Company
shall issue and the Trustee shall authenticate for the Holder a new Security
equal in principal amount to the unconverted portion of the Security
surrendered.
If the last day on which a Security may be converted is a Legal
Holiday, the Security may be surrendered on the next succeeding day that is not
a Legal Holiday.
Section 10.03 Fractional Shares. The Company will not issue a
fractional share of Common Stock upon conversion of a Security. Any fractional
interest in a share of Common Stock which would otherwise be issuable upon
conversion of any Security or Securities (or specified portions thereof) shall
be paid in cash (computed to the nearest cent) based on the last reported sale
price (or closing bid price if no sale occurred) on the last Trading Day prior
to which such Securities are surrendered for conversion on the Nasdaq National
Market (or, if the Common Stock is not traded on the Nasdaq National Market,
such other national securities exchange on which the Common Stock is listed or
admitted to trading, or if not listed or admitted to trading on any national
securities exchange, on any system with automated dissemination of quotations
of securities prices).
Section 10.04 Taxes on Conversion. If a Holder of a Security
converts it, the Company shall pay any applicable documentary, stamp or similar
issue or transfer tax due on the issue of shares of Common Stock upon the
conversion. However, the Holder shall pay any such tax which is due because
the shares are issued in a name other than the Holder's name.
Section 10.05 Company to Reserve Stock. The Company has reserved
and shall continue to reserve out of its authorized but unissued Common Stock
or its Common Stock held in treasury enough shares of Common Stock to permit
the conversion of the Securities in full.
All shares of Common Stock which may be issued upon conversion of the
Securities shall be fully paid and non- assessable.
The Company will endeavor to comply with all securities laws regulating
the offer and delivery of shares of Common Stock upon conversion of Securities
and will endeavor to list such shares on each national securities exchange or
market on which the Common Stock is listed or quoted.
Section 10.06 Adjustment of Conversion Price.
(a) In case the Company shall pay or make a dividend or other
distribution on any class of Common Stock of the Company in Common Stock, the
Conversion Price in effect at the opening of business on the day following the
date fixed for the determination of shareholders entitled to receive such
dividend or other distribution shall be reduced by multiplying such Conversion
Price by a fraction the numerator of which shall be the number of shares of
Common Stock outstanding at the close of business on the date fixed for such
determination (on a fully diluted basis) and the denominator of which shall be
the sum of such number of shares and the total number of shares constituting
such dividend or other distribution, such reduction to become effective
immediately after the opening of business on the date following the date fixed
for such determination. For the purpose of this paragraph (a), the number of
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shares of Common Stock at any time outstanding shall not include shares held in
the treasury of the Company. The Company will not pay any dividend or make any
distribution on shares of Common Stock held in the treasury of the Company.
(b) In case the Company shall issue rights, warrants or other
securities convertible into Common Stock to all holders of its Common Stock
entitling them to subscribe for or purchase shares of Common Stock at a price
per share less than the current market price per share (determined as provided
in paragraph (h) of this Section) of the Common Stock on the date fixed for the
determination of shareholders entitled to receive such rights, warrants or
convertible securities, the Conversion Price in effect at the opening of
business on the date following the date fixed for such determination shall be
reduced by multiplying such Conversion Price by a fraction the numerator of
which shall be the number of shares of Common Stock outstanding at the close of
business on the date fixed for such determination (on a fully diluted basis)
plus the number of shares of Common Stock which the aggregate of the offering
price of the total number of shares of Common Stock so offered for subscription
or purchase would purchase at such current market price and the denominator of
which shall be the number of shares of Common Stock outstanding at the close of
business on the date fixed for such determination (on a fully diluted basis)
plus the number of shares of Common Stock so offered for subscription or
purchase, such reduction to become effective immediately after the opening of
business on the date following the date fixed for such determination. If at
the end of the period during which such warrants or rights are exercisable or
such securities are convertible, not all warrants or rights shall have been
exercised or not all securities shall have been converted, the Conversion Price
shall be readjusted to such price as would have been obtained had the
adjustment made on their issuance been made upon the basis of the issuance of
only the number of such warrants, rights or securities as were actually
exercised with respect to, or converted into, Common Stock. For the purposes
of this paragraph (b), the number of shares of Common Stock at any time
outstanding shall not include shares held in the treasury of the Company. The
Company will not issue any rights, warrants or convertible securities in
respect of shares of Common Stock held in the treasury of the Company.
(c) In case the outstanding shares of Common Stock shall be
subdivided into a greater number of shares of Common Stock, the Conversion
Price in effect at the opening of business on the day following the day upon
which such subdivision becomes effective shall be proportionately reduced, and,
conversely, in case the outstanding shares of Common Stock shall be combined
into a smaller number of shares of Common Stock, the Conversion Price in effect
at the opening of business on the day following the day upon which such
combination becomes effective shall be proportionately increased, such
reduction or increase, as the case may be, to become effective immediately
after the opening of business on the day following the day upon which such
subdivision or combination becomes effective.
(d) In case the Company or any Subsidiary of the Company shall, by
dividend or otherwise, distribute to all holders of its Common Stock (i)
evidences of its indebtedness and/or (ii) cash or other assets (including
securities, but excluding any rights or warrants referred to in paragraph (b)
of this Section, any dividend paid out of earned surplus payable solely in cash
that may from time to time be fixed by the Board of Directors and any dividend
or distribution referred to in paragraph (a) of this Section), then in such
case the Conversion Price shall be adjusted so that the same shall equal the
price determined by multiplying the Conversion Price in effect immediately
prior to the close of business on such record date by a fraction of which the
numerator shall be the current market price per share (determined as provided
in paragraph (h) of this Section) of the Common Stock on such record date less
the then fair market value as determined by the Board of Directors (whose
determination shall be
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conclusive and shall be described in a Board Resolution filed with the Trustee)
of the portion of the cash or other assets or evidences of indebtedness so
distributed (and for which an adjustment to the Conversion Price has not
previously been made pursuant to the terms of this Section 10.06) applicable to
one share of Common Stock and the denominator shall be such current market
price per share of the Common Stock, such adjustment to become effective
immediately prior to the opening of business on the day following such record
date.
(e) The reclassification of Common Stock into securities,
including securities other than Common Stock (other than any reclassification
upon a consolidation or merger to which Section 10.09 applies), shall be deemed
to involve (a) a distribution of such securities other than Common Stock to all
holders of Common Stock (and the effective date of such reclassification shall
be deemed to be "the date fixed for the determination of shareholders entitled
to receive such distribution" and the "date fixed for such determination"
within the meaning of paragraph (h) of this Section), and (b) a subdivision or
combination, as the case may be, of the number of shares of Common Stock
outstanding immediately prior to such reclassification into the number of
shares of Common Stock outstanding immediately thereafter (and the effective
date of such reclassification shall be deemed to be "the day upon which such
subdivision becomes effective" or "the day upon which such combination becomes
effective", as the case may be, and "the day upon which such subdivision or
combination becomes effective" within the meaning of paragraph (c) of this
Section).
(f) In case a tender or exchange offer made by the Company or any
Subsidiary of the Company for all or any portion of the Company's Common Stock
(any such tender or exchange offer being referred to as an "Offer") shall
expire and such Offer shall involve an aggregate consideration having a fair
market value as of the expiration of such Offer (the "Expiration Time") that,
together with the fair market value of consideration payable in respect of any
other Offer, as of the expiration of such other Offer, concluded within the 12
months preceding the expiration of such Offer and in respect for which no
conversion price adjustment pursuant to this paragraph (f) has been made,
exceeds 20% of the product of the current market price per share (determined as
provided in paragraph (h) of this Section) of the Common Stock at the
Expiration Time times the number of shares of Common Stock outstanding
(including any tendered shares) at the Expiration Time, the Conversion Price
shall be reduced by multiplying such Conversion Price in effect immediately
prior to the Expiration Time by a fraction of which the numerator shall be (i)
the product of the current market price per share (determined as provided in
paragraph (h) of this Section) of the Common Stock at the Expiration Time times
the number of shares of Common Stock outstanding (including any tendered
shares) at the Expiration Time minus (ii) the fair market value of the
aggregate consideration payable to shareholders based on the acceptance (up to
any maximum specified in the terms of the tender or exchange offer) of all
shares validly tendered and not withdrawn as of the Expiration Time (the shares
deemed so accepted being referred to as the "Purchased Shares") and the
denominator shall be the product of (i) such current market price per share at
the Expiration Time times (ii) such number of outstanding shares at the
Expiration Time less the number of Purchased Shares, such reduction to become
effective immediately prior to the opening of business on the day following the
Expiration Time.
For purposes of this paragraph (f), the fair market value of any
consideration with respect to an Offer shall be determined by the Board of
Directors, whose determination shall be conclusive and described in a Board
Resolution filed with the Trustee.
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(g) In case the Company shall issue Common Stock to an Affiliate
or Affiliates of the Company, other than pursuant to an employee benefit plan
approved by the Board of Directors and the Company's shareholders (if such
shareholder approval is required by law) or pursuant to the Employment
Agreement dated as of January 31, 1991 and the Option Issuance Agreement dated
as of September 30, 1993, each as amended, between the Company and David Edwab,
at a price per share less than the current market price per share (determined
as provided in paragraph (h) of this Section) of the Common Stock on the date
fixed for such issuance the Conversion Price in effect at the opening of
business on the date following the date fixed for such issuance shall be
reduced by multiplying such Conversion Price by a fraction the numerator of
which shall be the number of shares of Common Stock outstanding at the close of
business on the date fixed for such issuance (on a fully diluted basis) plus
the number of shares of Common Stock which the aggregate of the offering price
of the total number of shares of Common Stock so issued would purchase at such
current market price and the denominator of which shall be the number of shares
of Common Stock outstanding at the close of business on the date fixed for such
issuance (on a fully diluted basis) plus the number of shares of Common Stock
so issued, such reduction to become effective immediately after the opening of
business on the date following the date fixed for such issuance. For the
purposes of this paragraph (g), the number of shares of Common Stock at any
time outstanding shall not include shares held in the treasury of the Company.
(h) For the purpose of any combination under paragraphs (b), (d),
(f) and (g) of this Section, the current market price per share of Common Stock
on any day shall be deemed to be the average of the last reported sale price
(or closing bid price if no sale occurred) for the 20 consecutive Trading Days
selected by the Board of Directors commencing no more than 30 Trading Days
before and ending no later than the day before the day in question on the
Nasdaq National Market (or, if the Common Stock is not traded on the Nasdaq
National Market, such other national securities exchange on which the Common
Stock is listed or admitted to trading or, if not listed or admitted to trading
on any national securities exchange, on any system of automated dissemination
of quotations of securities prices).
(i) No adjustment in the Conversion Price shall be required unless
such adjustment (plus any adjustments not previously made by reason of this
paragraph (i)) would require an increase or decrease of at least 1% in such
price; provided, however, that adjustments which by reason of this paragraph
(i) are not required to be made shall be carried forward and taken into account
in any subsequent adjustment and provided, further, that adjustments shall be
required and made in accordance with the provisions of this Section 10.06
(other than this paragraph (i)) not later than such time as may be required in
order to preserve the tax-free nature of a distribution to the holders of
shares of Common Stock. Anything in this paragraph (i) to the contrary
notwithstanding, the Company shall be entitled to make such reductions in the
Conversion Price for a period of at least 20 days, in addition to those
required by this Section 10.06, as the Board of Directors determines, in its
discretion, shall be advisable in order that any stock dividend, subdivision or
combination of shares, distribution of capital stock, or rights or warrants, or
the purchase stock or securities, or distribution of evidences of indebtedness
or assets (other than cash dividends or distributions paid from retained
earnings) hereafter made by the Company to its shareholders shall be a tax-free
distribution for federal income tax purposes. All calculations under this
paragraph (i) shall be made to the nearest cent. Notwithstanding any other
provision of this Section 10.06, no adjustments to the Conversion Price shall
reduce the Conversion Price below the then par value per share of the Common
Stock, and any such purported adjustment shall instead reduce the Conversion
Price to such par value. The Company hereby covenants not to take any action
to increase the par value per share of the Common Stock.
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Section 10.07 Notice of Adjustment. Whenever the Conversion Price
is adjusted, the Company shall promptly mail to Securityholders and the Trustee
a notice of the adjustment. The Company shall file with the Trustee a
certificate from the Company's independent public accountants briefly stating
the facts requiring the adjustment and the manner of computing it. The
certificate shall be conclusive evidence that the adjustment is correct.
Section 10.08 Notice of Certain Transactions.
If:
(1) the Company takes any action that would require an adjustment
in the Conversion Price pursuant to Section 10.06;
(2) the Company takes any action that would require a supplemental
indenture pursuant to Section 10.09; or
(3) there is a liquidation or dissolution of the Company,
the Company shall mail to Securityholders and the Trustee a notice stating the
proposed record date for a dividend or distribution or the proposed effective
date of a subdivision, combination, reclassification, consolidation, merger,
transfer, lease, liquidation or dissolution. The Company shall mail the notice
at least 15 days before such date. Failure to mail the notice or any defect in
it shall not affect the validity of the transaction.
Section 10.09 Reorganization of the Company. If the Company is a
party to a transaction subject to Section 5.01, or a merger which reclassifies
or changes its outstanding Common Stock upon consummation of such transaction
the Securities shall automatically become convertible into the kind and amount
of securities, cash or other assets which the Holder of a Security would have
owned immediately after the consolidation, merger, transfer or lease if the
Holder had converted the Security immediately before the effective date of the
transaction.
Concurrently with the consummation of such transaction, the Person
obligated to issue securities or deliver cash or other assets upon conversion
of the Securities shall enter into a supplemental indenture so providing and
further providing for adjustments which shall be as nearly equivalent as may be
practical to the adjustments provided for in this Article. The successor
Company shall mail to Securityholders a notice describing the supplemental
indenture.
If securities deliverable upon conversion of Securities, as provided
above, are themselves convertible into the securities of an Affiliate of the
formed, surviving, transferee or lessee corporation, that issuer shall join in
the supplemental indenture which shall so provide.
If this Section applies, Section 10.06(e) does not apply.
Section 10.10 Company Determination Final. Any determination that
the Company or the Board of Directors must make pursuant to Section 10.06 is
conclusive.
34
<PAGE> 41
Section 10.11 Trustee's Disclaimer. The Trustee has no duty to
determine when an adjustment under this Article should be made, how it should
be made or what it should be. The Trustee has no duty to determine whether any
provisions of a supplemental indenture under Section 10.09 are correct. The
Trustee makes no representation as to the validity or value of any securities
or assets issued upon conversion of Securities. The Trustee shall not be
responsible for the Company's failure to comply with this Article.
ARTICLE 11.
SUBORDINATION
Section 11.01 Agreement to Subordinate. The Company agrees, and
each Securityholder by accepting a Security agrees, that the indebtedness
evidenced by the Security and the payment of the principal of and premium, if
any, and interest on any Security and any distribution with respect thereto, is
subordinated in right of payment, to the extent and in the manner provided in
this Article, to the prior payment in full of all Senior Indebtedness and that
the subordination is for the benefit of the holders of Senior Indebtedness.
Section 11.02 Certain Definitions.
"Representative" means the indenture trustee or other trustee, agent or
representative for any Senior Indebtedness.
"Senior Indebtedness" with respect to the Securities means the
principal of, premium, if any, and interest on, including interest accruing
after the filing of a petition in bankruptcy, and any fees, costs, expenses and
any other amounts (including indemnity payments) related to the following,
whether outstanding on the date hereof or hereafter incurred or created: (a)
indebtedness, matured or unmatured, whether or not contingent, of the Company
for money borrowed evidenced by notes or other written obligations, (b) any
foreign exchange or interest rate contract, currency or interest rate swap
agreement or other similar agreement or arrangement designed to protect the
Company or any of its Subsidiaries against fluctuations in currency values or
interest rates, (c) indebtedness, matured or unmatured, whether or not
contingent, of the Company evidenced by notes, debentures, bonds or similar
instruments, letters of credit (or reimbursement agreements in respect thereof)
or other written obligations, (d) obligations of the Company as lessee under
capitalized leases and under leases of property made as part of any sale and
leaseback transactions, (e) indebtedness of others of any of the kinds
described in the preceding clauses (a) through (d) assumed or guaranteed by the
Company and (f) renewals, extensions, modifications, amendments, and refundings
of, and indebtedness and obligations of a successor Person issued in exchange
for or in replacement of indebtedness and obligations of the kind described in
the preceding clauses (a) through (e), unless the agreement pursuant to which
any such indebtedness described in clauses (a) through (e) is created, issued,
assumed or guaranteed expressly provides that such indebtedness is not senior
or superior in right of payment to the Securities; provided, however, that the
following shall not constitute Senior Indebtedness: (i) any indebtedness or
obligation of the Company in respect of the Securities, (ii) any indebtedness
of the Company to any of its Subsidiaries or other Affiliates; (iii) any
indebtedness that is subordinated or junior in any respect to any other
indebtedness of the Company other than Senior Indebtedness; (iv) any
indebtedness incurred for the purchase of goods or materials in the ordinary
course of business (other than with the proceeds of borrowings from financial
35
<PAGE> 42
institutions) and (v) indebtedness of the Company that by its terms is pari
passu with, or subordinate or subject in right of payment to, the Securities.
"Designated Senior Indebtedness" means (a) indebtedness owed under the
Second Amended and Restated Credit Agreement dated as of March 14, 1995, among
the Company, the banks named therein, and NationsBank of Texas, N.A., as agent,
as such agreement may be restated, further amended, supplemented or otherwise
modified or replaced from time to time and (b) if the indebtedness referred to
in clause (a) is not outstanding, other Senior Indebtedness to a financial
institution for borrowed money with a principal amount of $25 million or more
that is designated by the Company as Designated Senior Indebtedness.
For the purposes of this Indenture, Senior Indebtedness shall not be
deemed to have been paid in full until the holders of the Senior Indebtedness
shall have indefeasibly received payment in full in cash of all Senior
Indebtedness; provided that if any holder of Senior Indebtedness agrees to
accept payment in full of such Senior Indebtedness for consideration other than
cash, such holder shall be deemed to have indefeasibly received payment in full
of such Senior Indebtedness. The provisions of this Article shall continue to
be effective or be reinstated, as the case may be, if at any time any payments
of any of the Senior Indebtedness is rescinded or must otherwise be returned by
any holder of Senior Indebtedness upon the insolvency, bankruptcy or
reorganization of the Company or otherwise, all as though such payment had not
been made.
A distribution may consist of cash, securities or other property, by
set-off or otherwise and, as such term is used herein, includes, without
limitation, any deposits with the Trustee pursuant to Article 8.
Section 11.03 Liquidation; Dissolution; Bankruptcy. Upon any
distribution to creditors of the Company in a liquidation or dissolution of the
Company or in a bankruptcy, reorganization, insolvency, receivership or similar
proceeding relating to the Company or its property, in an assignment for the
benefit of creditors or any marshalling of the Company's assets and
liabilities:
(1) holders of Senior Indebtedness shall be entitled to
receive payment in full of all such Senior Indebtedness (including
interest after the commencement of any such proceeding at the rate
specified in the applicable Senior Indebtedness) before Securityholders
shall be entitled to receive any payment or distribution with respect
to the Securities, or as a sinking fund for the Securities, or in
respect of any redemption, retirement, purchase or acquisition of the
Securities (except that Securityholders may receive securities that are
subordinated to at least the same extent as the Securities to (a)
Senior Indebtedness and (b) any securities issued in exchange for
Senior Indebtedness); and
(2) until all Senior Indebtedness (as provided in
subsection(1) above) is paid in full, any payment or distribution to
which Securityholders would be entitled but for this Article shall be
made to holders of Senior Indebtedness (except that Securityholders may
receive securities that are subordinated to at least the same extent as
the Securities to (a) Senior Indebtedness and (b) any securities issued
in exchange for Senior Indebtedness), as their interests may appear.
Section 11.04 Default on Senior Indebtedness. The Company may not
make any payment or distribution to the Trustee or any Securityholder in
respect of the Securities, or as a sinking fund for the
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<PAGE> 43
Securities, or in respect of any redemption, retirement, purchase or
acquisition of the Securities and may not acquire from the Trustee or any
Securityholder any Securities for cash or property (other than securities that
are subordinated to at least the same extent as the Securities to (a) Senior
Indebtedness and (b) any securities issued in exchange for Senior Indebtedness)
until all Senior Indebtedness has been paid in full if:
(i) a default in the payment of any principal of, premium,
if any, or interest on Senior Indebtedness occurs and is continuing
beyond any applicable grace period in the agreement, indenture or other
document governing such Senior Indebtedness; or
(ii) a default, other than a default referred to in
subsection (i) above, on Senior Indebtedness occurs and is continuing
that automatically accelerates or then permits holders of the Senior
Indebtedness to accelerate its maturity and the Trustee receives a
notice of the default from the Representative or Representatives of
Designated Senior Indebtedness or of the holders of at least a majority
in principal amount of Senior Indebtedness then outstanding, or if none
is outstanding, of at least a majority in principal amount of the
commitments therefor. If the Trustee receives any such notice of a
non-payment default, a subsequent notice received within 360 days
thereafter shall not be effective for purposes of this Section. No
nonpayment default that existed or was continuing on the date of
delivery of any such notice to the Trustee shall be, or be made, the
basis for a subsequent notice unless such default shall have been cured
or waived for a period of not less than 180 days.
The Company may and shall resume payments on and distributions in
respect of, and acquisitions from the Trustee or Securityholders of, the
Securities upon the earlier of:
(1) the date upon which the default is cured, pursuant to the
terms of the relevant Senior Indebtedness or waived in writing by the holders
of the relevant Senior Indebtedness in their sole discretion, or
(2) in the case of a default referred to in Section 11.04(ii)
hereof, the earlier of the date on which such default referred to in Section
11.04(ii) is cured or waived or 179 days pass after notice is received, unless
the maturity of such Senior Indebtedness has been accelerated,
if this Article otherwise permits the payment, distribution or acquisition at
the time of such payment, distribution or acquisition.
Section 11.05 When Distribution Must Be Paid Over. In the event
that the Trustee (or Paying Agent if other than the Trustee) or any
Securityholder receives any payment or distribution with respect to the
Securities at a time when such payment is prohibited by Sections 11.03 or 11.04
hereof, such payment or distribution shall be held by the Trustee (or Paying
Agent if other than the Trustee) or such Securityholder, in trust for the
benefit of, and immediately shall be paid over and delivered, upon written
request to, the holders of Senior Indebtedness as their interests may appear or
their Representative under the indenture or other agreement (if any) pursuant
to which Senior Indebtedness may have been issued, as their respective
interests may appear, for application to the payment of all Senior Indebtedness
remaining unpaid to the extent necessary to pay all Senior Indebtedness in full
in accordance with its terms, after giving effect to any concurrent payment or
distribution to or for the holders of Senior Indebtedness.
37
<PAGE> 44
With respect to the holders of Senior Indebtedness, the Trustee
undertakes to perform only such obligations on the part of the Trustee as are
specifically set forth in this Article 11, and no implied covenants or
obligations with respect to the holders of Senior Indebtedness shall be read
into this Indenture against the Trustee. The Trustee shall not be deemed to
owe any fiduciary duty to the holders of Senior Indebtedness, and shall not be
liable to any such holders if the Trustee shall pay over or distribute to or on
behalf of Securityholders or the Company or any other Person money or assets to
which any holders of Senior Indebtedness shall be entitled by virtue of this
Article 11, except if such payment is made as a result of the willful
misconduct or gross negligence of the Trustee.
Section 11.06 Notice By Company. The Company shall promptly notify
the Trustee and the Paying Agent in writing of any facts known to the Company
that would cause a payment or distribution with respect to the Securities to
violate this Article, but failure to give such notice shall not affect the
subordination of the Securities to the Senior Indebtedness as provided in this
Article. The Trustee shall not be charged with knowledge of the curing of any
Default or the elimination of any other fact or condition preventing such
payment or distribution unless and until the Trustee shall have actual
knowledge thereof or shall have received an Officers' Certificate or written
notice to that effect.
Section 11.07 Subrogation. After all Senior Indebtedness is paid in
full and until the Securities are paid in full, Securityholders shall be
subrogated (equally and ratably with all other Indebtedness pari passu with the
Securities) to the right of holders of Senior Indebtedness to receive
distributions applicable to Senior Indebtedness to the extent that
distributions otherwise payable to the Securityholders have been applied to the
payment of Senior Indebtedness. A distribution made under this Article to
holders of Senior Indebtedness that otherwise would have been made to
Securityholders is not, as between the Company and Securityholders, a payment
by the Company on the Securities.
Section 11.08 Relative Rights. This Article defines the relative
rights of Securityholders and holders of Senior Indebtedness. Nothing in this
Indenture shall:
(1) impair, as between the Company and Securityholders,
the obligation of the Company, which is absolute and unconditional, to
pay principal of and interest on the Securities in accordance with
their terms;
(2) affect the relative rights of Securityholders and
creditors of the Company other than their rights in relation to holders
of Senior Indebtedness; or
(3) prevent the Trustee or any Securityholder from
exercising its available remedies upon a Default or Event of Default,
subject to the rights of holders and owners of Senior Indebtedness to
receive distributions and payments otherwise payable to
Securityholders.
If the Company fails because of this Article to pay principal of or
interest on a Security on the due date, the failure is still a Default or Event
of Default.
Section 11.09 Subordination May Not Be Impaired by Company. No
right of any holder of Senior Indebtedness to enforce the subordination of the
indebtedness as evidenced by the Securities shall in any way be prejudiced or
impaired by any act or failure to act by the Company or any Holder or by the
failure of the Company or any Holder to comply with the Indenture, regardless
of any knowledge thereof any such holder may have or otherwise be charged with.
Without in any way limiting the
38
<PAGE> 45
generality of the foregoing, the holders of Senior Indebtedness may, at any
time and from time to time, without the consent of or notice to the Trustee or
the Holders of the Securities, without incurring responsibility to the Holders
of the Securities and without impairing or releasing the subordination provided
in this Article or the obligations hereunder of the Holders of the Securities
to the holders of Senior Indebtedness, do any one or more of the following: (1)
change the manner, place or terms of payment or extend the time of payment of,
or refund or refinance, or renew or alter, Senior Indebtedness or any
instrument evidencing the same or any agreement under which Senior Indebtedness
is outstanding; (2) sell, exchange, release or otherwise deal with any property
pledged, mortgaged or otherwise securing Senior Indebtedness; (3) release any
Person liable in any manner for the collection of Senior Indebtedness; and (4)
exercise or refrain from exercising any rights against the Company or any other
Person.
Section 11.10 Distribution or Notice to Representative. Whenever a
distribution is to be made or a notice given to holders of Senior Indebtedness,
the distribution may be made and the notice given to their Representative.
Upon any payment or distribution of assets of the Company referred to
in this Article 11, the Trustee and the Securityholders shall be entitled to
rely upon any order or decree made by any court of competent jurisdiction or
upon any certificate of such Representative or of the liquidating trustee or
agent or any Person making any distribution to the Trustee or to the
Securityholders for the purpose of ascertaining the Persons entitled to
participate in such distribution, the holders of the Senior Indebtedness and
other indebtedness of the Company, the amount thereof or payable thereon, the
amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article 11.
Section 11.11 Rights of Trustee and Paying Agent. Notwithstanding
the provisions of this Article 11 or any other provision of this Indenture, the
Trustee shall not be charged with knowledge of the existence of any facts that
would prohibit the making of any payment or distribution by the Trustee, and
the Trustee and the Paying Agent may continue to make payments on the
Securities, unless the Trustee shall have received at its Corporate Trust
Office at least three Business Days prior to the date of such payment written
notice of facts that would cause the payment of any principal and interest with
respect to the Securities to violate this Article. Only the Company or the
Representative may give the notice. Nothing in this Article 11 shall impair
the claims of, or payments to, the Trustee under or pursuant to Section 7.07
hereof.
The Trustee in its individual or any other capacity may hold Senior
Indebtedness with the same rights it would have if it were not Trustee. Any
Agent may do the same with like rights.
Section 11.12 Authorization to Effect Subordination. The Holders of
the Securities hereby undertake and agree to execute, verify, deliver and file
proofs of claims, consents, assignments or other instruments which any holder
of Senior Indebtedness may at any time reasonably require in order to provide
and realize upon any rights or claims pertaining to the Securities held by such
Holder and to effectuate the full benefit of the subordination contained
herein. Each holder of a Security by a Holder's acceptance thereof authorizes
and directs the Trustee on the Holder's behalf to take such action as may be
necessary or appropriate to effectuate the subordination as provided in this
Article 11, and appoints the Trustee to act as the Holder's attorney-in-fact
for any and all such purposes including, in the event of any dissolution,
winding-up, liquidation, or reorganization of the Company whether in
bankruptcy, insolvency, receivership proceedings, or otherwise, the timely
filing of a claim for the unpaid balance
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<PAGE> 46
of the indebtedness of Company owing to such Holder in the form required in
such proceedings and the causing of such claim to be approved. If the Trustee
does not file a proper claim or proof of debt in the form required in such
proceedings prior to thirty (30) calendar days before the expiration of the
time to file such claims or proofs, then any of the holders of Senior
Indebtedness, or their Representative, shall have the right to file such claims
or proofs. Without limiting the foregoing, each Representative is hereby
irrevocably authorized and empowered (in its own name or in the name of the
Securityholders or the Trustee or otherwise), and appointed to act as the
Holder's attorney-in-fact for any and all such purposes, but shall have no
obligation, to demand, sue for, collect and receive every payment or
distribution referred to in Section 11.03 above and give acquittance therefor
and to file claims and proofs of claim and take such other action as it may
deem necessary or advisable for the exercise or enforcement of any of the
rights or interests of the holders or owners of the Senior Indebtedness
hereunder; provided that for purposes of this Section 11.12 holders or owners
of Senior Indebtedness may act only through such Representative.
Section 11.13 Conversions Not Deemed Payment. For the purposes of
this Article only, the issuance and delivery of Common Stock upon conversion of
Securities in accordance with Article 10 shall not be deemed to constitute a
payment or distribution on account of the principal of or interest on the
Securities or on account of the purchase or other acquisition of Securities.
Nothing contained in this Article or elsewhere in this Indenture or in the
Securities is intended to or shall impair, as among the Company, its creditors
other than holders of Senior Indebtedness and the Holders, the right, which is
absolute and unconditional, of the holder of any Security to convert such
Security in accordance with Article 10.
Section 11.14 Amendments. The provisions of this Article 11 shall
not be amended or modified without the written consent of the holders of Senior
Indebtedness, except for amendments that would not adversely affect the rights
of Holders of Senior Indebtedness.
Section 11.15 Trust Moneys Not Subordinated. Notwithstanding
anything contained herein to the contrary, upon deposit made by the Company in
accordance with Section 8.01(2), money or the proceeds of U.S. Government
Obligations held in trust under Article 8 by the Trustee for the payment of
principal of and interest on the Securities shall not be subordinated to the
prior payment of any Senior Indebtedness or subject to the restrictions set
forth in this Article 11, and, unless such amounts were deposited in violation
of this Article 11, none of the Securityholders shall be obligated to pay over
any such amount to the Company or any holder of Senior Indebtedness of the
Company or any other creditor of the Company.
ARTICLE 12.
MISCELLANEOUS
Section 12.01 Trust Indenture Act Controls. If any provision of
this Indenture limits, qualifies, or conflicts with the duties imposed by Trust
Indenture Act Section 318(c), the imposed duties shall control.
Section 12.02 Notices. Any notice or communication by the Company
or the Trustee to the other is duly given if in writing and delivered in person
or mailed by first class mail (registered or certified, return receipt
requested), telecopier or overnight air courier guaranteeing next day delivery
to
40
<PAGE> 47
the other's address stated in Section 12.10. The Company or the Trustee by
notice to the other may designate additional or different address for
subsequent notices or communications.
All notices and communications (other than those sent to holders of
Securities) shall be deemed to have been duly given: at the time delivered by
hand, if personally delivered; five Business Days after being deposited in the
mail, postage prepaid, if mailed; when receipt acknowledged, if telecopied; and
the next Business Day after timely delivery to the courier, if sent by
overnight air courier guaranteeing next day delivery.
Any notice or communication to a Holder of a Security shall be mailed
by first class mail, certified or registered, return receipt requested, or by
overnight air courier guaranteeing next day delivery to its address shown on
the register kept by the Registrar. Any notice of communication shall also be
so mailed to any Person described in Trust Indenture Act Section 313(c) to the
extent required by the Trust Indenture Act. Failure to mail a notice or
communication to a Holder of a Security or any defect in it shall not affect
its sufficiency with respect to other Holders of Securities.
If a notice or communication is mailed in a manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it.
If the Company mails a notice or communication to Securityholders, it
shall mail a copy to the Trustee and each Agent at the same time.
All other notices or communications shall be in writing.
Section 12.03 Communication by Holders with Other Holders.
Securityholders may communicate pursuant to Trust Indenture Act Section 312(b)
with other Securityholders with respect to their rights under this Indenture or
the Securities. The Company, the Trustee, the Registrar and anyone else shall
have the protection of Trust Indenture Act Section 312(c).
Section 12.04 Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to take any
action under this Indenture, the Company shall furnish to the Trustee:
(a) an Officers' Certificate stating that, in the opinion
of the signers, all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with; and
(b) an Opinion of Counsel stating that, in the opinion of
such counsel, all such conditions precedent have been complied with.
Section 12.05 Statements Required in Certificate or Opinion. Each
certificate or opinion with respect to compliance with a condition or covenant
provided for in this Indenture shall include:
(1) a statement that the person making such certificate or
opinion has read such covenant or condition;
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<PAGE> 48
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such person, he
has made such examination or investigation as is necessary to enable
him to express an informed opinion as to whether or not such covenant
or condition has been satisfied; and
(4) a statement as to whether or not, in the opinion of
such person, such condition or covenant has been satisfied.
Section 12.06 Rules by Trustee and Agents. The Trustee may make
reasonable rules for action by or a meeting of Securityholders. The Registrar
or Paying Agent may make reasonable rules and set reasonable requirements for
its functions.
Section 12.07 Legal Holidays. A "Legal Holiday" is a Saturday, a
Sunday or a day on which banking institutions are not required to be open. If
a payment or redemption date is a Legal Holiday at a place of payment or
redemption, payment or redemption may be made at that place on the next
succeeding day that is not a Legal Holiday, and no interest shall accrue for
the intervening period.
Section 12.08 No Recourse Against Others. A director, officer,
employee or shareholder, as such, of the Company shall not have any liability
for any obligations of the Company under the Securities or the Indenture or for
any claim based on, in respect of or by reason of such obligations or their
creation. Each Securityholder by accepting a Security waives and releases all
such liability and claims. The waiver and release are part of the
consideration for the issue of the Securities.
Section 12.09 Counterparts. This Indenture may be executed in any
number of counterparts and by the parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement.
Section 12.10 Addresses.
The Company's address is:
The Men's Wearhouse
40650 Encyclopedia Circle
Fremont, California 94538
Attention: David Edwab
Telephone: (510) 657-9821
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<PAGE> 49
The Trustee's address is:
Texas Commerce Bank National Association
600 Travis Street
8th Floor
Houston, Texas 77002
Attention: Vice President, Corporate Trust Department
Telephone: (713) 216-4181
For purposes of the requirements of New York offices contained in
Sections 2.03, 4.02 and 4.06(a), the address of the Trustee's agent is:
Texas Commerce Trust Company of New York
55 Water Street, Room 234
Windows 20 and 21
New York, New York 10041
Securities may also be surrendered at:
Texas Commerce Bank National Association
1201 Main Street
Dallas, Texas 75202
Section 12.11 Governing Law. The internal laws of the State of New
York shall govern this Indenture and the Securities, without regard to the
conflicts of laws provisions thereof.
Section 12.12 No Adverse Interpretation of Other Agreements. This
Indenture may not be used to interpret another indenture, loan or debt
agreement of the Company or a Subsidiary, and such indenture, loans or debt
agreements may not be used to interpret this Indenture.
Section 12.13 Successors. All agreements of the Company in this
Indenture and the Securities shall bind its successor. All agreements of the
Trustee in this Indenture shall bind its successor.
Section 12.14 Severability. In case any provision of this Indenture
or in the Securities shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
Section 12.15 Table of Contents, Headings, Etc.. The Table of
Contents, Cross-Reference Table and headings of the Articles and Sections of
this Indenture have been inserted for convenience of reference only, are not to
be considered a part hereof, and shall in no way modify or restrict any of the
terms or provisions hereof.
[Signature page to follow]
43
<PAGE> 50
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, and their respective corporate seals to be hereunto affixed and
arrested, all as of the day and year first above written.
THE MEN'S WEARHOUSE, INC.
By: /s/ Gary Ckodre
-------------------------------------
Attest:
/s/ Harry Levy
------------------------------------
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
Trustee
By: /s/ Terry L. Stewart
-------------------------------------
Attest:
/s/ Susan Sult
-----------------------------------
44
<PAGE> 51
EXHIBIT A
[LEGEND FOR GLOBAL SECURITIES ONLY]
[This Security is a Global Security within the meaning of the Indenture
hereinafter referred to and is registered in the name of a Depositary or a
nominee thereof. This Security may not be transferred to, or registered or
exchanged for Securities registered in the name of, any Person other than the
Depositary or a nominee thereof and no such transfer may be registered, except
in the limited circumstances described in the Indenture. Every Security
authenticated and delivered upon registration of transfer of, or in exchange
for or in lieu of, this Security shall be a Global Security subject to the
foregoing, except in such limited circumstances.]
[FORM OF FACE OF SECURITY]
5 1/4% Convertible Subordinated Note
due 2003
CUSIP = 587118AA8
No.
$
----------------
THE MEN'S WEARHOUSE, INC.
promises to pay to
or registered assigns,
the principal sum of
Dollars
---------------------------
on March 1, 2003.
Interest Payment Dates: March 1 and September 1
Record Dates: February 15 and August 15
A-1
<PAGE> 52
Dated:
-----------------
THE MEN'S WEARHOUSE, INC.
By:
--------------------------------
Name:
Title:
By:
--------------------------------
Name:
Title:
(SEAL)
This is one of the Securities referred
to in the within mentioned Indenture:
TEXAS COMMERCE BANK NATIONAL ASSOCIATION,
as Trustee
By:
------------------------------
Authorized Signatory
A-2
<PAGE> 53
[FORM OF REVERSE OF SECURITY]
5 1/4% Convertible Subordinated Note due 2003
Capitalized terms used herein shall have the meanings ascribed to them
in the Indenture unless otherwise indicated.
1. Interest. The Men's Wearhouse, Inc., a Texas corporation (the
"Company"), promises to pay interest on the principal amount of this Security
at 5 1/4% per annum from March 4, 1996 until maturity. The Company will pay
interest semi-annually on March 1 and September 1 of each year, commencing
September 1, 1996, or if any such day is not a Business Day, on the next
succeeding Business Day (each an "Interest Payment Date"). Interest on the
Securities will accrue from the most recent date to which interest has been
paid or, if no interest has been paid, from March 4, 1996. To the extent
lawful the Company shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on (i) overdue principal and premium, if
any, at the same rate per annum on the Securities then in effect and (ii) on
overdue installments of interest (without regard to any applicable grace
period) at the same rate, compounded semiannually. Interest will be computed
on the basis of a 360-day year of twelve 30-day months.
2. Method of Payment The Company will pay interest on the
Securities (except defaulted interest) to the Persons who are registered
Holders of Securities at the close of business on the February 15 and August 15
next preceding the Interest Payment Date, even if such Holder hereof must
surrender this Security to a Paying Agent to collect principal payments. The
Securities will be payable both as to principal and interest at the offices or
agencies of the Company maintained for such purpose within the City and State
of New York, the City of Dallas, Texas, or, at the option of the Company,
payment of interest may be made by check mailed to the Holders of the
Securities at their addresses set forth in the register of Holders of
Securities.
3. Paying Agent and Registrar. Initially, Texas Commerce Bank
National Association, the Trustee under the Indenture, will act as Paying Agent
and Registrar. The Company may change any Paying Agent or Registrar without
notice to any Holder. Subject to certain limitations set forth in the
Indenture, the Company or any of its Subsidiaries may act in any such capacity.
4. Indenture. The Company issued the Securities under an
Indenture dated as of March 1, 1996 ("Indenture") between the Company and the
Trustee. The terms of the Securities include those stated in the Indenture and
those made part of the Indenture by reference to the Trust Indenture Act of
1939, as amended (15 U.S. Code Sections 77aaa-77bbbb). The Securities are
subject to all such terms, and Holders are referred to the Indenture and such
Act for a statement of such terms and in the event that there shall be any
inconsistency between such terms and this Security, the terms of the Indenture
shall govern. The Securities are general unsecured obligations of the Company
limited to $57,500,000 in aggregate principal amount (including $7,500,000
aggregate principal amount of Securities that may be sold by the Company
pursuant to the over-allotment option granted pursuant to the Underwriting
Agreement dated February 27, 1996, among the Company, Bear, Stearns & Co. Inc.,
Montgomery Securities, PaineWebber Incorporated and Robertson, Stephens &
Company LLC), plus amounts, if any, sufficient to pay interest and premium, if
any, on outstanding Securities as set forth in Paragraph 2.
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<PAGE> 54
5. Subordination. The Company's payments in respect of the
Securities, including without limitation the payment of the principal of,
premium, if any, and interest on the Securities is subordinated to the prior
payment in full of the Company's Senior Indebtedness. Each Holder of
Securities by his acceptance hereof covenants and agrees that all payments of
the principal of, premium, if any, and interest on the Securities by the
Company shall be subordinated in accordance with the provisions of Article 11
of the Indenture, and each Holder accepts and agrees to be bound by such
provisions.
6. Conversion Rights. Subject to and upon compliance with the
provisions of the Indenture the Holder of this Security is entitled, at his
option, at any time after 60 days following the latest date of original
issuance of the Securities subject to the Indenture until the close of business
on March 1, 2003 or in case this Security or a portion thereof is called for
redemption, then in respect of this Security or such portion hereof until and
including, but (unless the Company defaults in making the payment due upon
redemption) not after, the close of business on the second Business Day prior
to the date fixed for redemption, to convert this Security (or any portion of
the principal amount hereof which is $1,000 or an integral multiple thereof),
at the principal amount hereof, or of such portion, into that number of fully
paid and non-assessable shares (calculated as to each conversion to the nearest
1/100 of a share) of Common Stock of the Company obtained by dividing the
principal amount of the Securities or portion thereof surrendered for
conversion by a conversion price equal to $34 1/8 (or at the current adjusted
conversion price if an adjustment has been made as provided in the Indenture)
(the "Conversion Price") by surrender of this Security, duly endorsed or
assigned to the Company or in blank, to the Company at the Corporate Trust
Office or at another office or agency of the Company in the Borough of
Manhattan, City of New York, New York accompanied by written notice to the
Company that the Holder hereof elects to convert this Security, or if less than
the entire principal amount hereof to be converted, the portion hereof to be
converted. In case such surrender shall be made during the period from the
close of business on any record date next preceding any Interest Payment Date
to the opening of business on such Interest Payment Date (unless this Security
or the portion thereof being converted has been called for redemption on a
redemption date within such period), the Security being surrendered should also
be accompanied by payment in funds acceptable to the Company, of an amount
equal to the interest payable on such Interest Payment Date on the principal
amount of this Security then being converted. Subject to the provisions of
Section 4.01 of the Indenture relating to the payment of defaulted interest by
the Company, the interest payment with respect to a Security (a) called for
redemption that is converted during the period from the close of business on
any record date to the opening of business on the corresponding Interest
Payment Date will be payable on that Interest Payment Date to the registered
Holder at the close of business on such record date, or (b) called for
redemption, if the record date preceding the redemption date is after the
latest date for conversion of such Securities, will be payable on the
corresponding Interest Payment Date to the extent of accrued interest through
the conversion date to the registered Holder at the time of conversion, and the
Holder converting the Security need not make a payment equal to the interest
payment amount upon conversion of the Security for conversion. Except as
provided in the preceding sentence, no payment or adjustment is to be made on
conversion of interest accrued hereon or for dividends on the Common Stock
issued on conversion which were declared for payment to holders of Common Stock
of record as of a date prior to the conversion date.
No fractions of shares or scrip representing fractions of shares will
be issued on conversion, but instead of any fractional interest the Company
shall pay a cash adjustment as provided in the Indenture.
The Conversion Price is subject to adjustment as provided in the
Indenture. No adjustment in the Conversion Price will be required unless such
adjustment would require a change of at least 1% in the Conversion Price then
in effect; but any adjustment that would otherwise be required to be made shall
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<PAGE> 55
be carried forward and taken into account in any subsequent adjustment. In
addition, the Indenture provides that in case of certain consolidations or
mergers to which the Company is a party or the transfer of substantially all of
the assets of the Company, this Security, if then outstanding, will
automatically be convertible thereafter, during the period this Security shall
be convertible as specified above, only into the kind and amount of securities,
cash and other property receivable upon the consolidation, merger or transfer
by a Holder of the number of shares of Common Stock into which this Security
might have been converted immediately prior to such consolidation, merger or
transfer.
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of premium, if any, and
interest on this Security at the place, times, and rate, and in the currency
herein prescribed.
7. Optional Redemption. The Securities are not redeemable at the
option of the Company prior to March 1, 1998. At any time on or after that
date and prior to March 1, 1999, the Securities may be redeemable at the
Company's option on at least 30 but not more than 60 days' notice, in whole at
any time or in part from time to time, at 103.5% of the principal amount,
together with accrued interest to the date fixed for redemption, but only if
the average of the last reported sale prices (or closing bid prices if no sale
occurred) of the Common Stock on the Nasdaq National Market (or, if the Common
Stock is not traded on the Nasdaq National Market, such other national
securities exchange on which the Common Stock is listed or admitted to trading
or, if not listed or admitted to trading on any national securities exchange,
on any system of automated dissemination of quotations of securities prices)
for the Trading Days occurring during the 30-day period ending on the tenth
calendar day before the first notice of redemption is given is greater than
140% of the Conversion Price immediately prior to the time at which notice of
such redemption is given. At any time on or after March 1, 1999, the
Securities may be redeemed at the Company's option on at least 30 but not more
than 60 days' notice, in whole at any time or in part from time to time, at the
following prices (expressed in percentages of the principal amount), together
with accrued interest to the date fixed for redemption:
If redeemed during the 12-month period beginning March 1:
Redemption
Date Price
---- ----------
1999 . . . . . . . . . . . . . . . . . . 102.6 %
2000 . . . . . . . . . . . . . . . . . . 101.8 %
2001 . . . . . . . . . . . . . . . . . . 100.9 %
and 100% on or after March 1, 2002.
On or after the redemption date, interest will cease to accrue on the
Securities, or portion thereof, called for redemption.
Except as set forth in Section 8 below and Section 4.06 of the
Indenture, the Company will not be required to make any mandatory redemption
payments with respect to the Securities. No sinking fund is provided for the
Securities.
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<PAGE> 56
8. Offer to Repurchase Upon Change of Control. If a Change of
Control (as defined in the Indenture) occurs, each Holder of the Securities
shall have the right, at the Holder's option, to require the Company to
repurchase and upon the exercise of such right the Company shall purchase, all
or any part (equal to $1,000 or an integral multiple thereof) of such Holder's
Securities on the date (the "Change of Control Payment Date") that is no
earlier than 30 days nor later than 40 days after the date the Company Notice
(as defined below) is mailed, for cash at a purchase price equal to 101% of the
aggregate principal amount of such Securities to be repurchased plus accrued
and unpaid interest, if any, thereon to the Change of Control Payment Date.
Within 10 days after the occurrence of a Change of Control, the Company
is obligated to issue a press release and mail to the Trustee and all Holders
of record of the Securities a notice (the "Company Notice") (as set forth in
Section 4.06(a) of the Indenture) of the occurrence of such Change of Control
and of the details of the repurchase right arising as a result thereof.
Holders electing to have any Securities purchased pursuant to a Change of
Control will be required to surrender the Securities, with the form entitled
"Option of Holder to Elect Purchase" on the reverse of this Security completed,
to the Paying Agent at the address specified in the notice prior to the close
of business on the third Business Day preceding the Change of Control Payment
Date.
9. Notice of Redemption. Notice of redemption will be mailed at
least 30 and not more than 60 days prior to the date fixed for redemption to
such Holders of Securities at their last addresses as they shall appear upon
the registry books. Securities may be redeemed in part in multiples of $1,000
only. On and after the redemption date interest ceases to accrue on Securities
or portions thereof called for redemption.
10. Denominations, Transfer, Exchange. The Securities are in
registered form without coupons in denominations of $1,000 and integral
multiples of $1,000. The transfer of Securities may be registered and
Securities may be exchanged as provided in the Indenture. The Registrar and
the Trustee may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents and the Company may require a Holder to pay
any taxes and fees required by law or permitted by the Indenture. The Company
need not exchange or register the transfer of any Security or portion of a
Security selected for redemption, except for the unredeemed portion of any
Security being redeemed in part. Also, it need not exchange or register the
transfer of any Securities for a period of 15 days before a selection of
Securities to be redeemed.
11. Persons Deemed Owners. Prior to due presentment to the
Registrar for registration of the transfer of this Security, the Registrar, any
Agent and the Company may deem and treat the Person in whose name this Security
is registered as its absolute owner for all purposes. Neither the Trustee, the
Registrar, any Agent nor the Company shall be affected by notice to the
contrary.
12. Amendments and Waivers. Subject to certain exceptions, the
Indenture or the Securities may be amended or supplemented and any existing
Default under, or compliance with any provision of, the Indenture may be waived
with the written consent of the Holders of not less than a majority in
principal amount of the Securities then outstanding (including consents
obtained in connection with a tender offer or exchange offer for Securities).
Without the consent of any Holder, the Company and the Trustee may: (i) amend
or supplement the Indenture or the Securities to cure any ambiguity, defect or
inconsistency; (ii) amend or supplement the Indenture or the Securities to
comply with Sections 5.01 and 10.09 of the Indenture; (iii) provide for
uncertificated Securities in addition to or in place of certificated
Securities; (iv) to evidence and provide for the acceptance of appointment by a
successor trustee; (v)
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<PAGE> 57
make any change that would provide any additional rights or benefits to the
Holders or that does not adversely affect the rights under the Indenture of any
Holder; or (vi) comply with requirements of the Securities and Exchange
Commission in order to effect or maintain the qualification of the Indenture
under the Trust Indenture Act.
Without the consent of each Holder affected, an amendment or waiver may
not (with respect to any Securities held by a non-consenting Holder): (i)
reduce the amount of Securities whose Holders must consent to an amendment or
waiver; (ii) reduce the rate of or change the time for payment of interest on
any Security; (iii) reduce the principal of or change the fixed maturity of any
Security or alter the redemption provisions with respect thereto; (iv) make any
Security payable in money other than that stated in the Security; (v) make any
change in Sections 6.04, 6.07 or the third sentence of 9.02 of the Indenture;
(vi) except as otherwise provided in Article 10 of the Indenture, increase the
Conversion Price or otherwise modify or affect in any manner adverse to the
Securityholders the terms and conditions of Article 10 of the Indenture; (vii)
make any change in Article 11 that adversely affects the rights of any
Securityholder, or (viii) waive a default in the payment of the principal of,
premium, if any, or interest on, any Security (except a rescission of
acceleration of the Securities by the Holders of at least a majority in
aggregate principal amount of the Securities and a waiver of the payment
default that resulted from such acceleration) or any Default under Article 10
of the Indenture.
The right of any Holder to participate in any consent required or
sought pursuant to any provision of the Indenture (and the obligation of the
Company to obtain any such consent otherwise required from such Holder) may be
subject to the requirement that such Holder shall have been the Holder of
record of any Securities with respect to which such consent is required or
sought as of a date identified by the Trustee in a notice furnished to Holders
in accordance with the terms of the Indenture.
13. Defaults and Remedies. Events of Default include: failure to
pay any interest on any Securities when due, continued for 30 days, whether or
not such payment is prohibited by the subordination provisions of the
Indenture; failure to pay principal of (and premium, if any) with respect to
any Securities when due, upon redemption or otherwise, including failure to
purchase the Securities when required upon a Change of Control, whether or not
such payment is prohibited by the subordination provisions of the Indenture;
failure by the Company after written notice to it to comply with certain of its
other agreements in the Indenture or the Securities for 60 days; certain
defaults under and acceleration prior to maturity of other indebtedness;
certain final judgments entered against the Company or one or more of its
Significant Subsidiaries involving any liabilities of $10 million or more
(singly or in the aggregate) (after deducting the portion of such liability
accepted by a reputable insurance company) which have not been vacated,
discharged, satisfied or stayed pending appeal within 60 days after the entry
thereof; and certain events of bankruptcy or insolvency, all as more fully set
forth in Section 6.01 of the Indenture. If an Event of Default occurs and is
continuing, the Trustee or the Holders of at least 25% in principal amount of
the then outstanding Securities may declare all the Securities to be due and
payable on the first to occur of an acceleration under the Credit Agreement or
five Business Days after receipt by the Company and the Representative under
the Credit Agreement of written notice under the Indenture with the effect
provided in the Indenture. In the case of an Event of Default arising from
certain events of bankruptcy or insolvency with respect to the Company, all
outstanding Securities become due and payable immediately without further
action or notice. Securityholders may not enforce the Indenture or the
Securities except as provided in the Indenture. The Trustee may require
indemnity satisfactory to it before it enforces the Indenture or the
Securities. Subject to certain limitations, Holders of a majority in principal
amount of the then outstanding Securities may direct the Trustee in its
exercise of any trust or power. The Company must furnish annual compliance
certificates to the Trustee.
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<PAGE> 58
14. Trustee Dealings with Company. The Trustee under the
Indenture, in its individual or any other capacity, may make loans to, accept
deposits from, and perform services for the Company or its Affiliates, and may
otherwise deal with the Company or its Affiliates, as if it were not Trustee.
15. No Recourse Against Others. A director, officer, employee,
incorporator or shareholder, of the Company, as such, shall not have any
liability for any obligations of the Company under the Securities or the
Indenture or for any claim based on, in respect of, or by reason of, such
obligations of their creation. Each Holder by accepting a Security waives and
releases all such liability and claims. The waiver and release are part of the
consideration for the issuance of the Securities.
16. Authentication. This Security shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating
agent.
17. Abbreviations. Customary abbreviations may be used in the
name of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN
ENT (= tenants by the entireties), JT TEN (= joint tenants with right of
survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (=
Uniform Gifts to Minors Act).
The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture. Requests may be made to:
The Men's Wearhouse, Inc.
40650 Encyclopedia Circle
Fremont, California 94538
Attention: David Edwab
Telephone: (510) 657-9821
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<PAGE> 59
ASSIGNMENT FORM
To assign this Security, fill in the form below: (I) or (we) assign
and transfer this Security to
--------------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint
--------------------------------------------------------
to transfer this Security on the books of the Company. The agent may
substitute another to act for him.
--------------------------------------------------------------------------------
Date:
-----------------------------
Your Signature:
-------------------------
(Sign exactly as your
name appears on the
face of this Security)
Signature Guarantee:
-----------------------------------
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<PAGE> 60
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 4.06 of the Indenture, check the box: [ ]
If you want to elect to have only part of the Security purchased by the
Company pursuant to Section 4.06 of the Indenture, state the amount you elect
to have purchased: $ .
-------------------------
Date: Your Signature:
-------------------- -------------------------
(Sign exactly as your name appears on
the Security)
Tax Identification No.:
-----------------
Signature Guarantee:
------------------------------------------
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<PAGE> 61
EXHIBIT B
[FORM OF CONVERSION NOTICE]
To: The Men's Wearhouse, Inc.
The undersigned owner of this Security hereby: (i) irrevocably
exercises the option to convert this Security, or the portion hereof below
designated, for shares of Common Stock of The Men's Wearhouse, Inc. in
accordance with the terms of the Indenture referred to in this Security and
(ii) directs that such shares of Common Stock deliverable upon the conversion,
together with any check in payment for fractional shares and any Security(ies)
representing any unconverted principal amount hereof, be issued and delivered
to the registered holder hereof unless a different name has been indicated
below. Any amount required to be paid by the undersigned on account of
interest accompanies this Security.
Dated:
------------------------------
----------------------------------------
Signature
(Sign exactly as your name appears on
the face of this Security)
Fill in for registration of shares if to be delivered, and of
Securities if to be issued, otherwise than to and in the name of the registered
holder.
--------------------------------
Social Security or other
Taxpayer Identifying Number
----------------------------------
(Name)
----------------------------------
(Street Address)
----------------------------------
(City, State and Zip Code)
(Please print name and address)
Principal amount to be Converted:
(if less than all)
$
--------------------------------
B-1