Exhibit 99.1
================================================================================
IBASIS, INC.
AND
THE BANK OF NEW YORK, AS TRUSTEE
INDENTURE
DATED AS OF JUNE 18, 2004
6 3/4% CONVERTIBLE SUBORDINATED NOTES DUE 2009
================================================================================
ARTICLE 1. DEFINITIONS..............................................................................1
Section 1.1. DEFINITIONS.......................................................................1
ARTICLE 2. ISSUE, DESCRIPTION, EXECUTION, REGISTRATION AND EXCHANGE OF NOTES.......................15
Section 2.1. DESIGNATION, AMOUNT AND ISSUE OF NOTES...........................................15
Section 2.2. FORM OF NOTES....................................................................15
Section 2.3. DATE AND DENOMINATION OF NOTES; PAYMENTS OF INTEREST.............................16
Section 2.4. EXECUTION OF NOTES...............................................................17
Section 2.5. EXCHANGE AND REGISTRATION OF TRANSFER OF NOTES; DEPOSITARY.......................17
Section 2.6. MUTILATED, DESTROYED, LOST OR STOLEN NOTES.......................................20
Section 2.7. TEMPORARY NOTES..................................................................21
Section 2.8. CANCELLATION OF NOTES PAID, ETC..................................................22
ARTICLE 3. REDEMPTION OF NOTES.....................................................................22
Section 3.1. REDEMPTION PRICES................................................................22
Section 3.2. NOTICE OF REDEMPTION; SELECTION OF NOTES.........................................22
Section 3.3. PAYMENT OF NOTES CALLED FOR REDEMPTION...........................................24
Section 3.4. CONVERSION ARRANGEMENT ON CALL FOR REDEMPTION....................................25
ARTICLE 4. SUBORDINATION OF NOTES..................................................................25
Section 4.1. AGREEMENT OF SUBORDINATION.......................................................25
Section 4.2. PAYMENTS TO NOTEHOLDERS..........................................................26
Section 4.3. BANKRUPTCY AND DISSOLUTION, ETC..................................................27
Section 4.4. SUBROGATION OF NOTES.............................................................28
Section 4.5. AUTHORIZATION BY NOTEHOLDERS.....................................................29
Section 4.6. NOTICE TO TRUSTEE................................................................29
Section 4.7. TRUSTEE'S RELATION TO SENIOR INDEBTEDNESS........................................30
Section 4.8. NO IMPAIRMENT OF SUBORDINATION...................................................31
Section 4.9. CERTAIN CONVERSIONS DEEMED PAYMENT...............................................31
Section 4.10. ARTICLE APPLICABLE TO PAYING AGENTS..............................................31
ARTICLE 5. PARTICULAR COVENANTS OF THE COMPANY.....................................................32
Section 5.1. PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST.......................................32
Section 5.2. MAINTENANCE OF OFFICE OR AGENCY..................................................32
Section 5.3. APPOINTMENTS TO FILL VACANCIES IN TRUSTEE'S OFFICE...............................33
Section 5.4. PROVISIONS AS TO PAYING AGENT....................................................33
Section 5.5. EXISTENCE........................................................................34
Section 5.6. STAY, EXTENSION AND USURY LAWS...................................................34
-i-
Section 5.7. COMPLIANCE CERTIFICATE...........................................................34
Section 5.8. FURTHER INSTRUMENTS AND ACTS.....................................................34
Section 5.9. PAYMENT OF TAXES AND OTHER CLAIMS................................................34
Section 5.10. LIMITATION ON ADDITIONAL INDEBTEDNESS............................................34
Section 5.11. LIENS............................................................................35
Section 5.12. RESTRICTED PAYMENTS..............................................................36
Section 5.13. DISQUALIFIED STOCK; ISSUANCE OF PREFERRED STOCK..................................37
Section 5.14. DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING SUBSIDIARIES...................37
Section 5.15. TRANSACTIONS WITH AFFILIATES.....................................................38
Section 5.16 RESTRICTED INVESTMENTS...........................................................39
ARTICLE 6. NOTEHOLDERS' LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE...........................39
Section 6.1. NOTEHOLDERS' LISTS...............................................................39
Section 6.2. PRESERVATION AND DISCLOSURE OF LISTS.............................................39
Section 6.3. REPORTS BY TRUSTEE...............................................................39
Section 6.4. REPORTS BY COMPANY...............................................................40
ARTICLE 7. DEFAULTS AND REMEDIES...................................................................40
Section 7.1. EVENTS OF DEFAULT................................................................40
Section 7.2. PAYMENTS OF NOTES ON DEFAULT; SUIT THEREFOR......................................43
Section 7.3. APPLICATION OF MONIES COLLECTED BY TRUSTEE.......................................44
Section 7.4. PROCEEDINGS BY NOTEHOLDER........................................................45
Section 7.5. PROCEEDINGS BY TRUSTEE...........................................................46
Section 7.6. REMEDIES CUMULATIVE AND CONTINUING...............................................46
Section 7.7. DIRECTION OF PROCEEDINGS AND WAIVER OF DEFAULTS BY MAJORITY OF NOTEHOLDERS.......46
Section 7.8. NOTICE OF DEFAULTS...............................................................47
Section 7.9. UNDERTAKING TO PAY COSTS.........................................................47
Section 7.10. DELAY OR OMISSION NOT WAIVER.....................................................47
ARTICLE 8. CONCERNING THE TRUSTEE..................................................................47
Section 8.1. DUTIES AND RESPONSIBILITIES OF TRUSTEE...........................................47
Section 8.2. RELIANCE ON DOCUMENTS, OPINIONS, ETC.............................................49
Section 8.3. NO RESPONSIBILITY FOR RECITALS, ETC..............................................50
Section 8.4. TRUSTEE, PAYING AGENTS, CONVERSION AGENTS OR REGISTRAR MAY OWN NOTES.............50
Section 8.5. MONIES TO BE HELD IN TRUST.......................................................50
Section 8.6. COMPENSATION AND EXPENSES OF TRUSTEE.............................................51
Section 8.7. OFFICERS' CERTIFICATE AS EVIDENCE................................................51
Section 8.8. CONFLICTING INTERESTS OF TRUSTEE.................................................51
Section 8.9. ELIGIBILITY OF TRUSTEE...........................................................52
Section 8.10. RESIGNATION OR REMOVAL OF TRUSTEE................................................52
Section 8.11. ACCEPTANCE BY SUCCESSOR TRUSTEE..................................................53
-ii-
Section 8.12. SUCCESSION BY MERGER, ETC........................................................54
Section 8.13. LIMITATION ON RIGHTS OF TRUSTEE AS CREDITOR......................................54
ARTICLE 9. CONCERNING THE NOTEHOLDERS..............................................................54
Section 9.1. ACTION BY NOTEHOLDERS............................................................54
Section 9.2. PROOF OF EXECUTION BY NOTEHOLDERS................................................55
Section 9.3. WHO ARE DEEMED ABSOLUTE OWNERS...................................................55
Section 9.4. COMPANY-OWNED NOTES DISREGARDED..................................................55
Section 9.5. REVOCATION OF CONSENTS; FUTURE HOLDERS BOUND.....................................56
ARTICLE 10. NOTEHOLDERS' MEETINGS...................................................................56
Section 10.1. PURPOSE OF MEETINGS..............................................................56
Section 10.2. CALL OF MEETINGS BY TRUSTEE......................................................56
Section 10.3. QUORUM...........................................................................57
Section 10.4. CALL OF MEETINGS BY COMPANY OR NOTEHOLDERS.......................................57
Section 10.5. QUALIFICATIONS FOR VOTING........................................................58
Section 10.6. REGULATIONS......................................................................58
Section 10.7. VOTING...........................................................................58
Section 10.8. NO DELAY OF RIGHTS BY MEETING....................................................59
ARTICLE 11. SUPPLEMENTAL
INDENTURES.................................................................59
Section 11.1. SUPPLEMENTAL
INDENTURES WITHOUT CONSENT OF NOTEHOLDERS...........................59
Section 11.2. SUPPLEMENTAL
INDENTURES WITH CONSENT OF NOTEHOLDERS..............................60
Section 11.3. EFFECT OF SUPPLEMENTAL
INDENTURES................................................61
Section 11.4. NOTATION ON NOTES................................................................62
Section 11.5. EVIDENCE OF COMPLIANCE OF SUPPLEMENTAL
INDENTURE TO BE FURNISHED TRUSTEE.........62
ARTICLE 12. CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE.......................................62
Section 12.1. COMPANY MAY CONSOLIDATE, ETC. ON CERTAIN TERMS...................................62
Section 12.2. SUCCESSOR CORPORATION TO BE SUBSTITUTED..........................................63
Section 12.3. OPINION OF COUNSEL TO BE GIVEN TRUSTEE...........................................63
ARTICLE 13. SATISFACTION AND DISCHARGE OF
INDENTURE.................................................64
Section 13.1. DISCHARGE OF
INDENTURE...........................................................64
Section 13.2. DEPOSITED MONIES TO BE HELD IN TRUST BY TRUSTEE..................................64
-iii-
Section 13.3. PAYING AGENT TO REPAY MONIES HELD................................................64
Section 13.4. RETURN OF UNCLAIMED MONIES.......................................................64
Section 13.5. REINSTATEMENT....................................................................65
ARTICLE 14. IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS.........................65
Section 14.1.
INDENTURE AND NOTES SOLELY CORPORATE OBLIGATIONS.................................65
ARTICLE 15. CONVERSION OF NOTES.....................................................................65
Section 15.1. RIGHT TO CONVERT.................................................................65
Section 15.2. EXERCISE OF CONVERSION PRIVILEGE; ISSUANCE OF COMMON STOCK ON CONVERSION;
NO ADJUSTMENT FOR INTEREST OR DIVIDENDS..........................................66
Section 15.3. CASH PAYMENTS IN LIEU OF FRACTIONAL SHARES.......................................67
Section 15.4. CONVERSION PRICE.................................................................68
Section 15.5. ADJUSTMENT OF CONVERSION PRICE...................................................68
Section 15.6. EFFECT OF RECLASSIFICATION, CONSOLIDATION, MERGER OR SALE........................77
Section 15.7. TAXES ON SHARES ISSUED...........................................................79
Section 15.8. RESERVATION OF SHARES; SHARES TO BE FULLY PAID; LISTING OF COMMON STOCK..........79
Section 15.9. RESPONSIBILITY OF TRUSTEE........................................................79
Section 15.10. NOTICE TO HOLDERS PRIOR TO CERTAIN ACTIONS.......................................80
ARTICLE 16. REPURCHASE UPON A REPURCHASE EVENT......................................................80
Section 16.1. REPURCHASE RIGHT.................................................................80
Section 16.2. NOTICES; METHOD OF EXERCISING REPURCHASE RIGHT, ETC..............................81
Section 16.3. CONDITIONS TO THE COMPANY'S ELECTION TO PAY THE REPURCHASE PRICE IN COMMON STOCK.84
Section 16.4. CERTAIN DEFINITIONS..............................................................84
ARTICLE 17. MISCELLANEOUS PROVISIONS................................................................86
Section 17.1. PROVISIONS BINDING ON COMPANY'S SUCCESSORS.......................................86
Section 17.2. OFFICIAL ACTS BY SUCCESSOR CORPORATION...........................................86
Section 17.3. ADDRESSES FOR NOTICES, ETC.......................................................86
Section 17.4. GOVERNING LAW....................................................................86
Section 17.5. EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT; CERTIFICATES TO TRUSTEE........87
Section 17.6. LEGAL HOLIDAYS...................................................................87
Section 17.7. NO SECURITY INTEREST CREATED.....................................................87
Section 17.8. TRUST
INDENTURE ACT..............................................................87
-iv-
Section 17.9. BENEFITS OF INDENTURE............................................................87
Section 17.10. TABLE OF CONTENTS, HEADINGS, ETC.................................................87
Section 17.11. AUTHENTICATING AGENT.............................................................88
Section 17.12. EXECUTION IN COUNTERPARTS........................................................88
-v-
Reconciliation and tie between Trust Indenture Act of 1939 (the "TIA" or "Trust
Indenture Act") and this Indenture, dated as of June 18, 2004.
TRUST INDENTURE ACT SECTION INDENTURE SECTION
Section 310(a)(1).......................................................................................8.9
(a)(2)..................................................................................................8.9
(b).....................................................................................................8.8, 8.9
Section 311(a)..........................................................................................8.13
(b).....................................................................................................8.13
Section 312(a)..........................................................................................6.1
(b).....................................................................................................6.2
Section 313(a)..........................................................................................6.3
(b).....................................................................................................6.3
(c).....................................................................................................6.3
(d).....................................................................................................6.3
Section 314(a)..........................................................................................6.4
(a)(4)..................................................................................................5.8
(b).....................................................................................................N.A.
(c)(1)..................................................................................................17.5
(c)(2)..................................................................................................17.5
(c)(3)..................................................................................................17.8
(e).....................................................................................................17.5
Section 315(a)..........................................................................................8.1
(b).....................................................................................................7.8
(c).....................................................................................................8.1
(d).....................................................................................................8.1
(e).....................................................................................................7.9
Section 316(a) (last sentence)..........................................................................9.4
(a)(1)(A)...............................................................................................7.7
(a)(1)(B)...............................................................................................7.7
(b).....................................................................................................7.4
(c).....................................................................................................9.1
Section 317(a)(1).......................................................................................7.2
(a)(2)..................................................................................................7.2
(b).....................................................................................................5.4
Section 318(a)..........................................................................................17.8
(c).....................................................................................................17.8
-vi-
----------
NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of this Indenture.
Attention should also be directed to Section 318(c) of the Trust Indenture Act,
which provides that the provisions of Sections 310 to and including 317 of the
Trust Indenture Act are a part of and govern every qualified indenture, whether
or not physically contained therein.
-vii-
INDENTURE dated as of June 18, 2004 between IBASIS, INC., a Delaware
corporation (hereinafter sometimes called the "Company," as more fully set
forth in Section 1.1), and The Bank of
New York, a
New York banking
corporation, as trustee (hereinafter sometimes called the "Trustee," as more
fully set forth in Section 1.1).
W I T N E S S E T H:
WHEREAS, for its lawful corporate purposes, the Company has duly
authorized the issue of its 6 3/4% Convertible Subordinated Notes due 2009
(hereinafter sometimes called the "Notes"), in an aggregate principal amount
not to exceed $37,285,000 and to provide the terms and conditions upon which
the Notes are to be authenticated, issued and delivered, the Company has duly
authorized the execution and delivery of this Indenture; and
WHEREAS, the Notes, the certificate of authentication to be borne by the
Notes, a form of assignment, a form of option to elect repayment upon a
Repurchase Event, a form of conversion notice and a certificate of transfer to
be borne by the Notes are to be substantially in the forms hereinafter provided
for; and
WHEREAS, all acts and things necessary to make the Notes, when executed by
the Company and authenticated and delivered by the Trustee or a duly authorized
authenticating agent, as in this Indenture provided, the valid, binding and
legal obligations of the Company, and to constitute these presents a valid
agreement according to its terms, have been done and performed, and the
execution of this Indenture and the issue hereunder of the Notes have in all
respects been duly authorized.
That in order to declare the terms and conditions upon which the Notes are,
and are to be, authenticated, issued and delivered, and in consideration of the
premises and of the purchase and acceptance of the Notes by the holders thereof,
the Company covenants and agrees with the Trustee for the equal and
proportionate benefit of the respective holders from time to time of the Notes
(except as otherwise provided below), as follows:
ARTICLE 1.
DEFINITIONS
SECTION 1.1. DEFINITIONS. The terms defined in this Section 1.1 (except
as herein otherwise expressly provided or unless the context otherwise requires)
for all purposes of this Indenture and of any indenture supplemental hereto
shall have the respective meanings specified in this Section 1.1. All other
terms used in this Indenture, which are defined in the Trust Indenture Act or
which are by reference therein defined in the Securities Act (except as herein
otherwise expressly provided or unless the context otherwise requires) shall
have the meanings assigned to such terms in said Trust Indenture Act and in said
Securities Act as in force at the date of the execution of this Indenture. The
words "herein," "hereof," "hereunder," and words of similar import refer to this
Indenture as a whole and not to any particular Article, Section or other
Subdivision. The terms defined in this Article include the plural as well as the
singular.
ACQUIRED INDEBTEDNESS: The term "Acquired Indebtedness" means Indebtedness
of any Person existing at the time such Person became or becomes a Subsidiary of
the Company (or such Person is merged into the Company or one of the Company's
Subsidiaries), or assumed in connection with the acquisition of assets from any
such Person (other than assets acquired in the ordinary course of business),
excluding Indebtedness incurred in connection with, or in contemplation of, such
Person becoming a Subsidiary of the Company.
AFFILIATE: The term "Affiliate" of any specified person shall mean any
other person directly or indirectly controlling or controlled by or under direct
or indirect common control with such specified person. For the purposes of this
definition, "control," when used with respect to any specified person means the
power to direct or cause the direction of the management and policies of such
person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
ASSET SALE: The term "Asset Sale" means (i) the sale, lease, conveyance or
other disposition that does not constitute a Restricted Payment or an Investment
by such Person of any of its non-cash assets (including, without limitation, by
way of a sale and leaseback and including the issuance, sale or other transfer
of any of the capital stock of any Subsidiary of such Person) other than to the
Company or to any of its Wholly Owned Subsidiaries that is a Restricted
Subsidiary (including the receipt of proceeds of insurance paid on account of
the loss of or damage to any asset and awards of compensation for any asset
taken by condemnation, eminent domain or similar proceeding, and including the
receipt of proceeds of business interruption insurance); and (ii) the issuance
of Equity Interests in any Subsidiaries or the sale of any Equity Interests in
any Subsidiaries, in each case, in one or a series of related transactions,
provided, that notwithstanding the foregoing, the term "Asset Sale" shall not
include: (a) the sale, lease, conveyance, disposition or other transfer of all
or substantially all of the assets of the Company, as permitted pursuant to
Section 12.1; (b) the sale or lease of equipment, inventory, accounts receivable
or other assets in the ordinary course of business consistent with past practice
and to the extent that such sales or leases are not part of the sale of the
business in which such equipment was used or in which such inventory or accounts
receivable arose; (c) an issuance of Equity Interests by a Wholly Owned
Subsidiary to the Company or to another Wholly Owned Subsidiary that is a
Restricted Subsidiary; (d) the grant in the ordinary course of business of any
non-exclusive license of patents, trademarks, registrations therefor and other
similar intellectual property; or (e) Permitted Investments.
BOARD OF DIRECTORS: The term "Board of Directors" shall mean the Board of
Directors of the Company or a committee of such Board duly authorized to act for
it hereunder.
BOARD RESOLUTION: The term "Board Resolution" means a copy of a resolution
certified by the Secretary or an Assistant Secretary of the Company to have been
duly adopted by the Board of Directors, or duly authorized committee thereof (to
the extent permitted by applicable law), and to be in full force and effect on
the date of such certification, and delivered to the Trustee.
BUSINESS DAY: The term "Business Day" means each Monday, Tuesday,
Wednesday, Thursday and Friday which is not a day on which the banking
institutions in The City of New
-2-
York or the city in which the Corporate Trust Office is located are authorized
or obligated by law or executive order to close or be closed.
CAPITAL STOCK: The term "Capital Stock" of any Person means and includes
any and all shares, interests, rights to purchase, warrants or options (whether
or not currently exercisable), participations or other equivalents of or
interests (however designated) in the equity (which includes, but is not limited
to, common stock, preferred stock and partnership and joint venture interests)
of such Person (excluding any debt securities that are convertible into, or
exchangeable for such equity).
CAPITALIZED LEASE OBLIGATION: The term "Capitalized Lease Obligation" means
any obligation of a Person to pay rent or other amounts under a lease of
property, real or personal, that is required to be capitalized for financial
reporting purposes in accordance with GAAP; and the amount of such obligation
shall be the capitalized amount thereof determined in accordance with GAAP.
CASH EQUIVALENTS: The term "Cash Equivalents" means (a) securities issued
or directly and fully guaranteed or insured by the United States of America or
any agency or instrumentality thereof (provided that the full faith and credit
of the United States is pledged in support thereof) having maturities not more
than twelve months from the date of acquisition, (b) U.S. dollar denominated
time deposits, certificates of deposit, Eurodollar time deposits or Eurodollar
certificates of deposit of (i) any domestic commercial bank of recognized
standing having capital and surplus in excess of $500,000,000 or (ii) any bank
whose short-term commercial paper rating from S&P is at least A-1 or the
equivalent thereof or from Xxxxx'x is at least P-1 or the equivalent thereof
(any such bank being an "Approved Lender"), in each case with maturities of not
more than twelve months from the date of acquisition, (c) commercial paper and
variable or fixed rate notes issued by any Approved Lender (or by the parent
company thereof) or any variable rate notes issued by, or guaranteed by, any
domestic corporation rated A-2 (or the equivalent thereof) or better by S&P or
P-2 (or the equivalent thereof) or better by Moody's and maturing within twelve
months of the date of acquisition, (d) repurchase agreements with a bank or
trust company or recognized securities dealer having capital and surplus in
excess of $500,000,000 for direct obligations issued by or fully guaranteed by
the United States of America in which the Company shall have a perfected first
priority security interest (subject to no other Liens) and having, on the date
of purchase thereof, a fair market value of at least 100% of the amount of
repurchase obligations, and (e) interests in money market mutual funds which
invest solely in assets or securities of the type described in subparagraphs
(a), (b), (c) or (d) hereof.
CHANGE IN CONTROL: The term "Change in Control" shall have the meaning
specified in Section 16.4.
CLOSE OF BUSINESS: The term "close of business" means 5 p.m. (
New York City
time).
COMMISSION: The term "Commission" shall mean the Securities and Exchange
Commission.
-3-
COMMON STOCK: The term "Common Stock" shall mean 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.
Subject to the provisions of Section 15.6, however, shares issuable on
conversion of Notes shall include only shares of the class designated as common
stock of the Company at the date of this Indenture or shares of any class or
classes resulting from any reclassification or reclassifications thereof and
which have 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 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: The term "Company" shall mean iBasis, Inc., a Delaware
corporation, and subject to the provisions of Article 12, shall include its
successors and assigns.
CONSOLIDATED EBITDA: The term "Consolidated EBITDA" means, with respect to
the Company and its Subsidiaries for any period, subject to Section 5.14(d)
hereof, the sum of, without duplication, (i) the Consolidated Net Income for
such period, plus (ii) the Fixed Charges for such period, plus (iii) provision
for taxes based on income or profits for such period (to the extent such taxes
were included in computing Consolidated Net Income for such period), plus (iv)
consolidated depreciation, amortization and other non-cash charges of the
Company and its Subsidiaries required to be reflected as expenses on the books
and records of the Company (to the extent such expenses were included in
computing Consolidated Net Income for such period), minus (v) cash payments with
respect to any non-recurring, non-cash charges previously added back pursuant to
clause (iv), and (vi) excluding the impact of foreign currency translations.
Notwithstanding the foregoing, the Fixed Charges of, the provision for taxes
based on the income or profits of, and the depreciation and amortization and
other non-cash charges of, a Subsidiary of a Person shall be added to
Consolidated Net Income to compute Consolidated EBITDA only to the extent (and
in the same proportion) that the Net Income of such Subsidiary was included in
calculating the Consolidated Net Income of such Person and only if a
corresponding amount would be permitted at the date of determination to be
dividended to the Company by such Subsidiary without prior approval (that has
not been obtained), pursuant to the terms of its charter and all agreements,
instruments, judgments, decrees, orders, statutes, rules and governmental
regulations applicable to that Subsidiary or its stockholders.
CONSOLIDATED NET INCOME: The term "Consolidated Net Income" means, with
respect to any Person for any period, the aggregate of the Net Income of such
Person and its Subsidiaries for such period, on a consolidated basis, determined
in accordance with GAAP; provided that (i) the Net Income (but not loss) of any
Person that is not a Subsidiary or that is accounted for by the equity method of
accounting shall be included only to the extent of the amount of dividends or
distributions paid in cash to the referent Person or a Wholly Owned Subsidiary
thereof that is a Restricted Subsidiary, (ii) the Net Income of any Subsidiary
shall be excluded to the extent that the declaration or payment of dividends or
similar distributions by that Subsidiary of that Net Income is not at the date
of determination permitted without any prior governmental approval (which has
not been obtained) or, directly or indirectly, by operation of
-4-
the terms of its charter or any agreement, instrument, judgment, decree, order,
statute, rule or governmental regulation applicable to that Subsidiary or its
stockholders, (iii) the cumulative effect of a change in accounting principles
shall be excluded, and (iv) all other extraordinary gains and extraordinary
losses shall be excluded.
CONSOLIDATED NET TANGIBLE ASSETS: The term "Consolidated Net Tangible
Assets" means, as of the date of determination, Consolidated Total Assets after
deducting therefrom, to the extent included therein (with respect to clauses (i)
and (ii), in each case determined on a consolidated basis in accordance with
GAAP (without duplication)): (i) unamortized debt discount and expenses; and
(ii) goodwill, patents, trademarks, service marks, trade names, copyrights and
other items properly classified as intangible assets in accordance with GAAP;
and (iii) all liabilities properly classified as current liabilities in
accordance with GAAP (except liabilities that, by their terms, are extendible or
renewable at the option of the obligor to a date that is 12 months or more after
the date on which such current liabilities are determined).
CONSOLIDATED TOTAL ASSETS: The term "Consolidated Total Assets" means, as
of any date, the total assets of the Company and its Restricted Subsidiaries
that would be shown as assets on a consolidated balance sheet of the Company and
its Restricted Subsidiaries as of such date prepared in accordance with GAAP.
CONVERSION PRICE: The term "Conversion Price" shall have the meaning
specified in Section 15.4.
CORPORATE TRUST OFFICE: The term "Corporate Trust Office," or other
similar term, shall mean the office of the Trustee at which at any
particular time its corporate trust business shall be principally
administered, which office is, at the date as of which this Indenture is
dated, located at 000 Xxxxxxx Xxxxxx, 0X, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Corporate Trust Administration.
CURRENCY HEDGE OBLIGATIONS: The term "Currency Hedge Obligations" means, at
any time as to any Person, the obligations of such Person at such time that were
incurred pursuant to any foreign currency exchange agreement, option or futures
contract or other similar agreement or arrangement designed to protect against
or manage such Person's or any of its Subsidiaries' exposure to fluctuations in
foreign currency exchange rates.
CUSTODIAN: The term "Custodian" means the custodian with respect to respect
to the Notes in global form (as appointed by DTC), or any successor person
thereto and shall initially be the Trustee.
DEFAULT: The term "default" shall mean any event that is, or after notice
or passage of time, or both, would be, an Event of Default.
DEPOSITARY: The term "Depositary" means, with respect to the Notes issuable
or issued in whole or in part in global form, the person specified in Section
2.5(c) as the Depositary with respect to such Notes, until a successor shall
have been appointed and become such pursuant to the applicable provisions of
this Indenture, and thereafter, "Depositary" shall mean or include such
successor.
-5-
DESIGNATED SENIOR INDEBTEDNESS: The term "Designated Senior Indebtedness"
means the Company's obligations under any particular Senior Indebtedness in
which the instrument creating or evidencing the same or the assumption or
guarantee thereof (or related agreements or documents to which the Company is a
party) expressly provides that such Senior Indebtedness shall be "Designated
Senior Indebtedness" for purposes of this Indenture (provided that such
instrument, agreement or other document may place limitations and conditions on
the right of such Senior Indebtedness to exercise the rights of Designated
Senior Indebtedness). As of the date of this Indenture, Designated Senior
Indebtedness includes the SVB Indebtedness and Indebtedness of the Company or
any Subsidiary arising under or in connection with the Senior Secured Notes.
DISQUALIFIED STOCK: The term "Disqualified Stock" means any Capital Stock
that, by its terms (or by the terms of any security into which it is convertible
or for which it is exchangeable), or upon the happening of any event, matures or
is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise,
or redeemable at the option of the Holder thereof, in whole or in part, on or
prior to the date that is 91 days after the date on which the Notes mature.
EQUITY INTERESTS: The term "Equity Interests" means Capital Stock and all
warrants, options or other rights to acquire Capital Stock (but excluding any
debt security that is convertible into, or exchangeable for, Capital Stock).
EVENT OF DEFAULT: The term "Event of Default" shall mean any event
specified in Section 7.1, continued for the period of time, if any, and after
the giving of notice, if any, therein designated.
EXCHANGE ACT: The term "Exchange Act" means the Securities Exchange Act of
1934, as amended, and the rules and regulations promulgated thereunder.
EXISTING INDEBTEDNESS: The term "Existing Indebtedness" means the
Indebtedness of the Company and its Subsidiaries in existence on the Issue Date,
as listed on SCHEDULE 1.1 attached hereto, until such amounts are repaid.
EXPIRATION TIME: The term "Expiration Time" shall have the meaning
specified in Section 15.5(f).
FIXED CHARGES: The term "Fixed Charges" means, with respect to any Person
for any period, the sum, without duplication, of (i) the consolidated interest
expense of such Person and its Subsidiaries for such period, whether paid or
accrued (including, without limitation, amortization of original issue discount,
non-cash interest payments, the interest component of any deferred payment
obligations, the interest component of all payments associated with Capital
Lease Obligations, commissions, discounts and other fees and charges incurred in
respect of letter of credit or bankers' acceptance financings, and net payments
(if any) pursuant to Currency Hedge Obligations), and (ii) the consolidated
interest expense of such Person and its Subsidiaries that was capitalized during
such period, and (iii) any interest expense on Indebtedness of another Person
that is guaranteed by such Person or one of its Subsidiaries or secured by a
Lien on assets of such Person or one of its Subsidiaries (whether or not such
guarantee or Lien is called upon),
-6-
and (iv) the product of (a) all cash dividend payments (and non-cash dividend
payments in the case of a Person that is a Subsidiary) on any series of
preferred stock of such Person payable to a party other than the Company or a
Wholly Owned Subsidiary, times (b) a fraction, the numerator of which is one and
the denominator of which is one minus the then current combined federal, state
and local statutory tax rate of such Person, expressed as a decimal, on a
consolidated basis and in accordance with GAAP.
FIXED CHARGE COVERAGE RATIO: The term "Fixed Charge Coverage Ratio" means,
with respect to any Person for any period, the ratio of the Consolidated EBITDA
of such Person and its Subsidiaries for such period to the Fixed Charges of such
Person and its Subsidiaries for such period. In the event that the Company or
any of its Subsidiaries incurs, assumes, guarantees or redeems any Indebtedness
or issues or redeems preferred stock or Disqualified Stock subsequent to the
commencement of the four-quarter reference period for which the Fixed Charge
Coverage Ratio is being calculated but prior to the date on which the event for
which the calculation of the Fixed Charge Coverage Ratio is made (the
"Calculation Date"), then the Fixed Charge Coverage Ratio shall be calculated
giving pro forma effect to such incurrence, assumption, guarantee or redemption
of Indebtedness, or such issuance or redemption of preferred stock or
Disqualified Stock, as if the same had occurred at the beginning of the
applicable four-quarter reference period. For purposes of making the computation
referred to above, (i) acquisitions that have been made by the Company or any of
its Subsidiaries, including through mergers or consolidations and including any
related financing transactions, during the four-quarter reference period or
subsequent to such reference period and on or prior to the Calculation Date
shall be deemed to have occurred on the first day of the four-quarter reference
period, and (ii) the Consolidated EBITDA attributable to discontinued
operations, as determined in accordance with GAAP, and operations or businesses
disposed of prior to the Calculation Date, shall be excluded, and (iii) the
Fixed Charges attributable to discontinued operations, as determined in
accordance with GAAP, and operations or businesses disposed of prior to the
Calculation Date, shall be excluded, but only to the extent that the obligations
giving rise to such Fixed Charges shall not be obligations of the subject Person
or any of its Subsidiaries following the Calculation Date.
GAAP: The term "GAAP" means generally accepted accounting principles in the
United States as in effect on the Issue Date.
GLOBAL NOTE: The term "Global Note" shall have the meaning specified in
Section 2.5(b).
INDEBTEDNESS: The term "Indebtedness" shall mean any obligations of, or
guaranteed or assumed by, the Company or any Significant Subsidiary for borrowed
money.
INDENTURE: The term "Indenture" shall mean this instrument as originally
executed or, if amended or supplemented as herein provided, as so amended or
supplemented.
INVESTMENTS: The term "Investments" means, with respect to any Person, all
investments by such Person in other Persons (including Affiliates) in the forms
of direct or indirect loans (including guarantees of Indebtedness or other
obligations), advances or capital contributions (excluding commission, travel
and similar advances to officers and employees
-7-
made in the ordinary course of business), purchases or other acquisitions for
consideration of Indebtedness, Equity Interests or other securities and all
other items that are or would be classified as investments on a balance sheet
prepared in accordance with GAAP; PROVIDED that an acquisition of assets, Equity
Interests or other securities by the Company for consideration consisting of
common equity securities of the Company or any direct or indirect parent of the
Company shall not be deemed to be an Investment.
ISSUE DATE: The term "Issue Date" means the date on which the Notes are
first issued under this Indenture.
LIEN: The term "Lien" means, with respect to any property or asset, any
mortgage, lien, pledge, charge, security interest or encumbrance of any kind in
respect of such property or asset, whether or not filed, recorded or otherwise
perfected under applicable law, but excluding agreements to refrain from
granting Liens. For the purposes of this Indenture, a Person shall be deemed to
own subject to a Lien any property or asset that it has acquired or holds
subject to the interest of a vendor or lessor under any conditional sale
agreement, Capitalized Lease Obligation or other title retention agreement
relating to such asset; PROVIDED, HOWEVER, that "Lien" shall not include a trust
or similar arrangement established for the purpose of defeasing any Indebtedness
pursuant to the terms of the instrument evidencing or providing for the issuance
of such Indebtedness.
NET INCOME: The term "Net Income" means, with respect to any Person, the
net income (loss) of such Person, determined in accordance with GAAP and before
any reduction in respect of preferred stock dividends, excluding, however, (i)
any gain (but not loss), together with any related provision for taxes on such
gain (but not loss), realized in connection with (a) any Asset Sale (including,
without limitation, dispositions pursuant to sale and leaseback transactions) or
(b) the disposition of any securities by such Person or any of its Subsidiaries
or the extinguishment of any Indebtedness of such Person or any of its
Subsidiaries and (ii) any extraordinary or nonrecurring gain (but not loss),
together with any related provision for taxes on such extraordinary or
nonrecurring gain (but not loss).
NOTE OR NOTES: The terms "Note" or "Notes" shall mean any Note or Notes, as
the case may be, authenticated and delivered under this Indenture.
NOTEHOLDER, HOLDER OR HOLDER: The terms "Noteholder", "Holder" or "holder"
as applied to any Note, or other similar terms (but excluding the term
"beneficial holder"), shall mean any person in whose name at the time a
particular Note is registered on the Note register.
NOTE REGISTER: The term "Note register" shall have the meaning specified in
Section 2.5.
OFFICERS' CERTIFICATE: The term "Officers' Certificate", when used with
respect to the Company, shall mean a certificate signed by (a) one of the
President, the Chief Executive Officer, Executive Vice President or any Vice
President (whether or not designated by a word or words added after the title
"Vice President") and (b) by one of the Treasurer or any Assistant Treasurer,
Secretary or any Assistant Secretary or Controller of the Company, which is
delivered
-8-
to the Trustee. Each such certificate shall include the statements provided for
in Section 17.5 if and to the extent required by the provisions of such Section.
OPINION OF COUNSEL: The term "Opinion of Counsel" shall mean an opinion in
writing signed by legal counsel, who may be an employee of or counsel to the
Company, or other counsel acceptable to the Trustee, which is delivered to the
Trustee. Each such opinion shall include the statements provided for in Section
17.5 if and to the extent required by the provisions of such Section.
OUTSTANDING: The term "outstanding," when used with reference to Notes,
shall, subject to the provisions of Section 9.4, mean, as of any particular
time, all Notes authenticated and delivered by the Trustee under this Indenture,
except:
(a) Notes theretofore canceled by the Trustee or delivered to the
Trustee for cancellation;
(b) Notes, or portions thereof, for the payment, or redemption of
which monies in the necessary amount shall have been deposited in trust
with the Trustee or with any paying agent (other than the Company) or shall
have been set aside and segregated in trust by the Company (if the Company
shall act as its own paying agent); PROVIDED that if such Notes are to be
redeemed, as the case may be, prior to the maturity thereof, notice of such
redemption shall have been given as provided in Section 3.2, or provision
satisfactory to the Trustee shall have been made for giving such notice;
(c) Notes in lieu of which, or in substitution for which, other Notes
shall have been authenticated and delivered pursuant to the terms of
Section 2.6 unless proof satisfactory to the Trustee is presented that any
such Notes are held by bona fide holders in due course; and
(d) Notes converted into Common Stock pursuant to Article 15 and Notes
deemed not outstanding pursuant to Section 3.2.
PERSON OR PERSON: The term "person" or "Person" shall mean an individual, a
corporation, a limited liability company, an association, a partnership, an
individual, a joint venture, a joint stock company, a trust, an unincorporated
organization or a government or an agency or a political subdivision thereof.
PERMITTED EMPLOYEE REPURCHASE: The term "Permitted Employee Repurchase"
means the repurchase of Capital Stock of the Company from employees of the
Company or its Subsidiaries in connection with the termination of such
employees' employment with the Company in an amount not to exceed $250,000 per
annum.
PERMITTED INDEBTEDNESS: The term "Permitted Indebtedness" shall mean:
(i) Indebtedness under the Notes and any of the Company's 5 3/4
Convertible Subordinated Notes due 2005, if any;
-9-
(ii) Senior Indebtedness (including Indebtedness under the Senior
Secured Notes) not to exceed $45,200,000 in principal amount outstanding at
any time;
(iii) Existing Indebtedness not otherwise covered by any other
clause of this definition;
(iv) Indebtedness of the Company to any Subsidiary and Indebtedness
of any Subsidiary to the Company or another Subsidiary;
(v) Indebtedness secured by Company assets that is incurred by the
Company or a Restricted Subsidiary from any bank, commercial finance
company, other commercial lender or financial institution, including, but
not limited to, the SVB Indebtedness, in an amount not to exceed in the
aggregate the greater of (x) $15,000,000, or (y) an amount equal to the sum
of (i) eighty-five percent (85%) of the face amount of the Company's and
its Subsidiaries' accounts receivable aged less than ninety (90) days, and
(ii) forty percent (40%) of the net book value of the Company's and its
Subsidiaries' property, plant and equipment;
(vi) Refinancing Indebtedness;
(vii) Acquired Indebtedness, in an amount not to exceed $25,000,000
in the aggregate; and
(viii) additional Indebtedness that is PARI PASSU with or subordinate
to the Notes, not to exceed $114,540,000 in the aggregate.
For purposes of determining compliance with the covenant set forth in
Section 5.10, in the event that an item of proposed Indebtedness meets the
criteria of more than one of the categories of Permitted Indebtedness described
in clauses (i) through (viii) above, the Company will be permitted to classify
such item of Indebtedness on the date of the incurrence of such Indebtedness in
any manner that complies with such covenant.
PERMITTED INVESTMENTS: The term "Permitted Investments" means (a) any
Investments in the Company or in a Wholly Owned Subsidiary of the Company that
is a Restricted Subsidiary; (b) any Investments in Cash Equivalents; (c)
Investments by the Company or any Subsidiary of the Company in a Person if as a
result of such Investment (i) such Person becomes a Wholly Owned Subsidiary of
the Company that is a Restricted Subsidiary and that is engaged in the
development, manufacture, marketing, provision or sale of communications and
communications-related services and products or any other business conducted by
the Company on the Issue Date, or (ii) such Person is merged, consolidated or
amalgamated with or into, or transfers or conveys substantially all of its
assets to, or is liquidated into, the Company or a Wholly Owned Subsidiary of
the Company that is a Restricted Subsidiary and that is engaged in the
development, manufacture, marketing, provision or sale of communications and
communications-related services and products or any other business conducted by
the Company on the Issue Date; (d) Investments outstanding as of the Issue Date;
and (e)(i) other Investments that do not exceed $5,000,000 in the aggregate at
any time outstanding, and (ii) if the amount specified in clause (e)(i) above
has been fully utilized, other Investments (in addition to those permitted by
clause (e)(i) above) that (A) are each individually approved by the Board of
-10-
Directors as evidenced by a Board Resolution delivered to the Trustee
contemporaneously with such Investment, and (B) in the aggregate do not exceed
$5,000,000 at any time outstanding.
PREDECESSOR NOTE: The term "Predecessor Note" of any particular Note shall
mean every previous Note evidencing all or a portion of the same debt as that
evidenced by such particular Note; and, for the purposes of this definition, any
Note authenticated and delivered under Section 2.6 in lieu of a lost, destroyed
or stolen Note shall be deemed to evidence the same debt as the lost, destroyed
or stolen Note that it replaces.
PURCHASE MONEY LIEN: The term "Purchase Money Lien" means a Lien granted on
an asset or property to secure a Purchase Money Obligation permitted to be
incurred under this Indenture and incurred solely to finance the purchase, or
the cost of construction or improvement, of such asset or property; provided,
however, that such Lien encumbers only such asset or property and is granted
within 180 days of such acquisition.
PURCHASE MONEY OBLIGATIONS: The term "Purchase Money Obligations" of any
Person means any obligations of such Person to any seller or any other Person
incurred or assumed to finance the purchase, or the cost of construction or
improvement, of real or personal property to be used in the business of such
Person or any of its Subsidiaries in an amount that is not more than 100% of the
cost, or fair market value, as appropriate, of such property, and incurred
within 180 days after the date of such acquisition (excluding accounts payable
to trade creditors incurred in the ordinary course of business).
QUALIFIED REPURCHASE PLAN REPURCHASE. The term "Qualified Repurchase Plan
Repurchase" means a repurchase of Capital Stock of the Company in an open-market
transaction pursuant to a stock repurchase plan approved by the Board of
Directors, PROVIDED, that the aggregate amount of purchases pursuant to such
repurchase plan and any other stock repurchase plan does not exceed, in any
fiscal year, the sum of ten percent (10%) of the cash and Cash Equivalents of
the Company as of the beginning of such fiscal year, plus ten percent (10%) of
the Consolidated Net Income of the Company for such fiscal year.
REFINANCING INDEBTEDNESS: The term "Refinancing Indebtedness" means any
Indebtedness of the Company or any of its Subsidiaries incurred or issued in
exchange for, or the net proceeds of which are used to extend, refinance, renew,
replace, defease or refund other Indebtedness of the Company or any of its
Subsidiaries (other than intercompany Indebtedness); PROVIDED that:
(1) the principal amount (or accreted value, if applicable) of
such Refinancing Indebtedness does not exceed the principal amount (or
accreted value, if applicable) of the Indebtedness extended, refinanced,
renewed, replaced, defeased (whether legally or as to covenants only) or
refunded (plus all accrued interest on such Indebtedness and the amount of
all fees, expenses and premiums incurred in connection therewith);
(2) such Refinancing Indebtedness has a final maturity date on or
later than the final maturity date of, and has a Weighted Average Life to
Maturity equal to or greater than the Weighted Average Life to Maturity of,
the Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded;
-11-
(3) if the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded is subordinated in right of payment to the
Notes, such Refinancing Indebtedness is subordinated in right of payment
to, the Notes on terms at least as favorable to the Holders of Notes as
those contained in the documentation governing the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded; and
(4) such Indebtedness is incurred either by the Company or by the
Subsidiary of the Company which is the obligor on the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded.
REPURCHASE EVENT: The term "Repurchase Event" shall have the meaning
specified in Section 16.4.
REPURCHASE PRICE: The term "Repurchase Price" has the meaning specified in
Section 16.1.
RESPONSIBLE OFFICER: The term "Responsible Officer" shall mean, when used
with respect to the Trustee, any officer within the corporate trust department
of the Trustee, including any vice president, assistant vice president,
assistant secretary, assistant treasurer, trust officer or any other officer of
the Trustee who customarily performs functions similar to those performed by the
Persons who at the time shall be such officers, respectively, or to whom any
corporate trust matter is referred because of such person's knowledge of and
familiarity with the particular subject and who shall have direct responsibility
for the administration of this Indenture.
RESTRICTED INVESTMENT: The term "Restricted Investment" means an Investment
other than a Permitted Investment.
RESTRICTED SUBSIDIARY: The term "Restricted Subsidiary" means any
Subsidiary of the Company, whether existing on or after the Issue Date, other
than an Unrestricted Subsidiary.
SECURITIES ACT: The term "Securities Act" means the Securities Act of 1933,
as amended, and the rules and regulations promulgated thereunder.
SENIOR INDEBTEDNESS: The term "Senior Indebtedness" means the principal of,
premium, if any, interest on (including any interest accruing after the filing
of a petition by or against the Company under any bankruptcy law, whether or not
allowed as a claim after such filing in any proceeding under such bankruptcy
law) and any other payment due pursuant to, any of the following, whether
outstanding on the date of this Indenture or thereafter incurred or created:
(a) All Indebtedness of the Company for money borrowed that is
evidenced by notes, debentures, bonds or other securities (including, but
not limited to, those which are convertible or exchangeable for securities
of the Company);
(b) All Indebtedness of the Company due and owing with respect to
letters of credit (including, but not limited to, reimbursement obligations
with respect thereto), bankers' guarantees or bankers' acceptances;
-12-
(c) All Indebtedness or other obligations of the Company due and
owing with respect to interest rate and currency swap agreements, cap,
floor and collar agreements, currency spot and forward contracts and other
similar agreements and arrangements;
(d) All Indebtedness consisting of commitment or standby fees due
and payable to lending institutions with respect to credit facilities or
letters of credit available to the Company;
(e) All indebtedness or obligations of others of the kinds
described in any of the preceding clauses (a), (b), (c) or (d) assumed by
or guaranteed in any manner by the Company or in effect guaranteed
(directly or indirectly) by the Company through an agreement to purchase,
contingent or otherwise, and all obligations of the Company under any such
guarantee or other arrangements; and
(f) All renewals, extensions, refundings, deferrals, amendments or
modifications of indebtedness or obligations of the kinds described in any
of the preceding clauses (a), (b), (c), (d) or (e);
unless in the case of any particular indebtedness, obligation, renewal,
extension, refunding, amendment, modification or supplement, the instrument or
other document creating or evidencing the same or the assumption or guarantee of
the same expressly provides that such indebtedness, obligation, renewal,
extension, refunding, amendment, modification or supplement is subordinate to,
or is not superior to, or is PARI PASSU with, the Notes; PROVIDED that Senior
Indebtedness shall not include (i) any indebtedness of any kind of the Company
to any subsidiary of the Company, a majority of the voting stock of which is
owned, directly or indirectly, by the Company, (ii) indebtedness for trade
payables or constituting the deferred purchase price of assets or services
incurred in the ordinary course of business, or (iii) the Notes.
SENIOR SECURED NOTES: The term "Senior Secured Notes" means the Company's
(i) 11.5% Senior Secured Notes due 2005 and (ii) 8% Secured Convertible Notes
due 2007.
SIGNIFICANT SUBSIDIARY: The term "Significant Subsidiary" means, with
respect to any person, a Subsidiary of such person that would constitute a
"significant subsidiary" as such term is defined under Rule 1-02 of Regulation
S-X of the Securities and Exchange Commission.
SUBSIDIARY: The term "Subsidiary" means a corporation more than 50% of the
outstanding voting stock of which is owned, directly or indirectly, by the
Company or by one or more other Subsidiaries, or by the Company and one or more
other Subsidiaries. For the purposes of this definition, "voting stock" means
stock which ordinarily has voting power for the election of directors, whether
at all times or only so long as no senior class of stock has such voting power
by reason of any contingency.
SVB INDEBTEDNESS: The term "SVB Indebtedness" means Indebtedness of the
Company or any Subsidiary incurred at any time pursuant to that certain Amended
and Restated Loan and Security Agreement, dated as of December 29, 2003, between
Silicon Valley Bank, a California chartered bank and the Company, as amended
from time to time, and documents related thereto.
-13-
TRADING DAY: The term "Trading Day" has the meaning specified in Section
15.5(h)(5).
TRUST INDENTURE ACT: The term "Trust Indenture Act" shall mean the Trust
Indenture Act of 1939, as amended, as it was in force at the date of execution
of this Indenture, except as provided in Sections 11.3 and 15.6; PROVIDED,
HOWEVER, that in the event the Trust Indenture Act of 1939 is amended after the
date hereof, the term "Trust Indenture Act" shall mean, to the extent required
by such amendment, the Trust Indenture Act of 1939 as so amended.
TRUSTEE: The term "Trustee" shall mean The Bank of
New York, and its
successors and any corporation resulting from or surviving any consolidation or
merger to which it or its successors may be a party and any successor trustee at
the time serving as successor trustee hereunder.
UNRESTRICTED SUBSIDIARY: The term "Unrestricted Subsidiary" means (i) any
Subsidiary acquired or organized after the Issue Date that is designated as an
Unrestricted Subsidiary for purposes of this Indenture by a resolution of the
Board of Directors of the Company in accordance with the requirements of this
paragraph, and (ii) any Subsidiary of an Unrestricted Subsidiary, in each case
until such time as such Subsidiary is designated as a Restricted Subsidiary for
purposes of this Indenture by a resolution of the Board of Directors of the
Company in accordance with the requirements of this paragraph. The Company may
designate any Subsidiary that satisfies the requirements of this paragraph to be
an Unrestricted Subsidiary by a resolution of the Board of Directors of the
Company if after giving effect to such designation (a) such Subsidiary does not
own or hold any Capital Stock of, or any Lien on any property of, the Company or
any Restricted Subsidiary and (b) such Subsidiary is not liable, directly or
indirectly, with respect to any Indebtedness. The Company may designate any
Unrestricted Subsidiary to be a Restricted Subsidiary by a resolution of the
Board of Directors of the Company if immediately after giving effect to such
designation, no Default or Event of Default has occurred and is continuing.
WEIGHTED AVERAGE LIFE TO MATURITY: The term "Weighted Average Life to
Maturity" means, when applied to any Indebtedness at any date, the number of
years obtained by dividing:
(1) the sum of the products obtained by multiplying (i) the amount
of each then remaining installment, sinking fund, serial maturity or other
required payments of principal, including payment at final maturity, in
respect of the Indebtedness, by (ii) the number of years (calculated to the
nearest one-twelfth) that will elapse between such date and the making of
such payment; by
(2) the then outstanding principal amount of such Indebtedness.
WHOLLY OWNED SUBSIDIARY: The term "Wholly Owned Subsidiary" of any Person
means a Subsidiary of such Person all of the outstanding Capital Stock or other
ownership interests of which (other than directors' qualifying shares) shall at
the time be owned by such Person or by one or more Wholly Owned Subsidiaries of
such Person.
-14-
The definitions of certain other terms are contained herein, including
those specified in Article 15 and Article 16.
ARTICLE 2.
ISSUE, DESCRIPTION, EXECUTION, REGISTRATION AND EXCHANGE OF NOTES
SECTION 2.1. DESIGNATION, AMOUNT AND ISSUE OF NOTES. The Notes shall be
designated as "6 3/4% Convertible Subordinated Notes due 2009." Notes not to
exceed the aggregate principal amount of $37,285,000 upon the execution of
this Indenture, or (except pursuant to Sections 2.5, 2.6, 3.3, 15.2 and 16.2)
from time to time thereafter, may be executed by the Company and delivered to
the Trustee for authentication, and the Trustee shall thereupon authenticate and
deliver said Notes upon the written order of the Company, signed by the
Company's (a) President, Executive Vice President or any Vice President (whether
or not designated by a word or words added after the title "Vice President") and
(b) Treasurer or Assistant Treasurer or its Secretary or any Assistant
Secretary, without any further action by the Company hereunder other than the
provision to the Trustee of an Officer's Certificate and Opinion of Counsel.
SECTION 2.2. FORM OF NOTES. The Notes and the Trustee's certificate of
authentication to be borne by such Notes shall be substantially in the form set
forth in EXHIBIT A attached hereto, which is incorporated in and made a part of
this Indenture.
Any of the Notes may have such letters, numbers or other marks of
identification and such notations, legends and endorsements as the officers
executing the same may approve (execution thereof to be conclusive evidence of
such approval) and as are not inconsistent with the provisions of this
Indenture, or as may be required to comply with any law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any
securities exchange or automated quotation system on which the Notes may be
listed or designated for issuance, or to conform to usage.
The Global Note shall represent such of the outstanding Notes as shall be
specified therein and shall provide that it shall represent the aggregate amount
of outstanding Notes from time to time endorsed thereon and that the aggregate
amount of outstanding Notes represented thereby may from time to time be
increased or reduced to reflect transfers or exchanges permitted hereby. Any
endorsement of the Global Note to reflect the amount of any increase or decrease
in the amount of outstanding Notes represented thereby shall be made by the
Trustee or the Custodian, at the direction of the Trustee, in such manner and
upon instructions given by the holder of such Notes in accordance with this
Indenture. Payment of principal of and interest and premium, if any (including
any redemption price), on the Global Note shall be made to the holder of such
Note.
The terms and provisions contained in the form of Note attached as Exhibit
A hereto shall constitute, and is 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.
-15-
SECTION 2.3. DATE AND DENOMINATION OF NOTES; PAYMENTS OF INTEREST. The
Notes shall be issuable in registered form without coupons in denominations
of $1,000 principal amount and integral multiples thereof. Every Note shall
be dated the date of its authentication, and shall bear interest from the
applicable date and accrued interest shall be payable June 15 and December
15, commencing December 15, 2004 as specified on the face of the form of
Note, attached as EXHIBIT A attached hereto.
The person in whose name any Note (or its Predecessor Note) is
registered at the close of business on any record date with respect to any
interest payment date (including any Note that is converted after the record
date and on or before the interest payment date) shall be entitled to receive
the interest payable on such interest payment date notwithstanding the
cancellation of such Note upon any transfer, exchange or conversion
subsequent to the record date and on or prior to such interest payment date.
Interest may, at the option of the Company, be paid by check mailed to the
address of such person on the Note registry; PROVIDED that, with respect to
any holder of Notes with an aggregate principal amount equal to or in excess
of $2,000,000, at the request of such holder in writing to the Company,
interest on such holder's Notes shall be paid by wire transfer in immediately
available funds in accordance with the wire transfer instruction supplied by
such holder from time to time to the Trustee and paying agent (if different
from Trustee) at least two days prior to the applicable record date. The term
"record date" with respect to any interest payment date shall mean the June 1
or December 1 preceding said June 15 or December 15, respectively.
Interest on the Notes shall be computed on the basis of a 360-day year
comprised of twelve 30-day months compounded semi-annually.
Any interest on any Note which is payable, but is not punctually paid or
duly provided for, on any said June 15 or December 15 (herein called
"Defaulted Interest") shall forthwith cease to be payable to the Noteholder
on the relevant record date by virtue of his having been such Noteholder; and
such Defaulted Interest shall be paid by the Company, at its election in each
case, as provided in clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted
Interest to the persons in whose names the Notes (or their respective
Predecessor Notes) are registered at the close of business on a
special record date for the payment of such Defaulted Interest, which
shall be fixed in the following manner. The Company shall notify the
Trustee in writing of the amount of Defaulted Interest to be paid on
each Note and the date of the payment (which shall be not less than
twenty-five (25) days after the receipt by the Trustee of such notice,
unless the Trustee shall consent to an earlier date), and at the same
time the Company shall deposit with the Trustee an amount of money
equal to the aggregate amount to be paid in respect of such Defaulted
Interest or shall make arrangements satisfactory to the Trustee for
such deposit prior to the date of the proposed payment, such money
when deposited to be held in trust for the benefit of the persons
entitled to such Defaulted Interest as in this clause provided.
Thereupon the Trustee shall fix a special record date for the payment
of such Defaulted Interest which shall be not more than fifteen (15)
days and not less than ten (10)
-16-
days prior to the date of the proposed payment and not less than ten
(10) days after the receipt by the Trustee of the notice of the
proposed payment. The Trustee shall promptly notify the Company of
such special record date and, in the name and at the expense of the
Company, shall cause notice of the proposed payment of such Defaulted
Interest and the special record date therefor to be mailed,
first-class postage prepaid, to each Noteholder as of such special
record date at his address as it appears in the Note register, not
less than ten (10) days prior to such special record date. Notice of
the proposed payment of such Defaulted Interest and the special record
date therefor having been so mailed, such Defaulted Interest shall be
paid to the persons in whose names the Notes (or their respective
Predecessor Notes) were registered at the close of business on such
special record date and shall no longer be payable pursuant to the
following clause (2).
(2) The Company may make payment of any Defaulted Interest
in any other lawful manner not inconsistent with the requirements of
any securities exchange or automated quotation system on which the
Notes may be listed or designated for issuance, and upon such notice
as may be required by such exchange or automated quotation system, if,
after notice given by the Company to the Trustee of the proposed
payment pursuant to this clause, such manner of payment shall be
deemed practicable by the Trustee.
SECTION 2.4. EXECUTION OF NOTES. The Notes shall be signed in the name
and on behalf of the Company by either the facsimile or manual signature of
its President, its Chief Executive Officer, any of its Executive or Senior
Vice Presidents, or any of its Vice Presidents (whether or not designated
by a number or numbers or word or words added before or after the title
"Vice President") and attested by either the manual or facsimile signature
of its Secretary or any of its Assistant Secretaries (which may be printed,
engraved or otherwise reproduced thereon, by facsimile or otherwise). Only
such Notes as shall bear thereon a certificate of authentication
substantially in the form set forth on the form of Note attached as Exhibit
A hereto, manually executed by the Trustee (or an authenticating agent
appointed by the Trustee as provided by Section 17.11), shall be entitled
to the benefits of this Indenture or be valid or obligatory for any
purpose. Such certificate by the Trustee (or such an authenticating agent)
upon any Note executed by the Company shall be conclusive evidence that the
Note so authenticated has been duly authenticated and delivered hereunder
and that the holder is entitled to the benefits of this Indenture.
In case any officer of the Company who shall have signed any of the Notes
shall cease to be such officer before the Notes so signed shall have been
authenticated and delivered by the Trustee, or disposed of by the Company, such
Notes nevertheless may be authenticated and delivered or disposed of as though
the person who signed such Notes had not ceased to be such officer of the
Company; and any Note may be signed on behalf of the Company by such persons as,
at the actual date of the execution of such Note, shall be the proper officers
of the Company, although at the date of the execution of this Indenture any such
person was not such an officer.
-17-
SECTION 2.5. EXCHANGE AND REGISTRATION OF TRANSFER OF NOTES; DEPOSITARY.
(a)(1) The Company shall cause to be kept at the Corporate Trust
Office a register (the register maintained in such office and in any other
office or agency of the Company designated pursuant to Section 5.2 being
herein sometimes collectively referred to as the "Note register") in which,
subject to such reasonable regulations as it may prescribe, the Company
shall provide for the registration of Notes and of transfers of Notes. Such
register shall be in written form or in any form capable of being converted
into written form within a reasonable period of time. The Trustee is hereby
appointed "Note registrar" for the purpose of registering Notes and
transfers of Notes as herein provided. The Company may appoint one or more
co-registrars in accordance with Section 5.2.
(2) Upon surrender for registration of transfer of any Note
to the Note registrar or any co-registrar, and satisfaction of the
requirements for such transfer set forth in this Section 2.5, the
Company shall execute, and the Trustee shall authenticate and deliver,
in the name of the designated transferee or transferees, one or more
new Notes of any authorized denominations and of a like aggregate
principal amount and bearing such restrictive legends as may be
required by this Indenture.
(3) Notes may be exchanged for other Notes of any
authorized denominations and of a like aggregate principal amount,
upon surrender of the Notes to be exchanged at any such office or
agency. Whenever any Notes are so surrendered for exchange, the
Company shall execute, and the Trustee shall authenticate and deliver,
the Notes which the Noteholder making the exchange is entitled to
receive, bearing registration numbers not contemporaneously
outstanding.
(4) All Notes presented or surrendered for registration of
transfer or for exchange shall (if so required by the Company, the
Trustee, the Note registrar or any co-registrar) be duly endorsed, or
be accompanied by a written instrument or instruments of transfer in
form satisfactory to the Company and duly executed, by the Noteholder
thereof or his attorney-in-fact duly authorized in writing.
(5) No service charge shall be charged to the Noteholder
for any exchange or registration of transfer of Notes, but the Company
may require payment of a sum sufficient to cover any tax, assessments
or other governmental charges that may be imposed in connection
therewith other than stamp or other duties imposed with respect to the
issuance of the Notes, which shall be paid by the Company.
(6) None of the Company, the Trustee, the Note registrar or
any co-registrar shall be required to exchange or register a transfer
of (a) any Notes for a period of fifteen (15) days next preceding any
selection of Notes to be redeemed or (b) any Notes called for
redemption or, if a portion of any Note is selected or called for
redemption, such portion thereof selected or called for redemption or
(c) any Notes surrendered for conversion or, if a portion of any Note
is surrendered for conversion, such portion thereof surrendered for
conversion or (d)
-18-
any Notes, or a portion of any Note, surrendered for repurchase (and
not withdrawn) in connection with a Repurchase Event.
(7) All Notes issued upon any transfer or exchange of Notes
in accordance with this Indenture shall be the valid obligations of
the Company, evidencing the same debt, and entitled to the same
benefits under this Indenture as the Notes surrendered upon such
registration of transfer or exchange.
(b) So long as the Notes are eligible for book-entry settlement with
the Depositary, unless otherwise required by law, all Notes shall be
represented by a Note in global form (the "Global Note") registered in the
name of the Depositary or the nominee of the Depositary. The transfer and
exchange of beneficial interests in the Global Note shall be effected
through the Depositary (but not the Trustee or the Custodian) in accordance
with this Indenture (including the restrictions on transfer set forth
herein) and the procedures of the Depositary therefor.
(c) (1) Notwithstanding any other provisions of this Indenture
(other than the provisions set forth in this Section 2.5(c)), the Global
Note may not be transferred as a whole or in part except 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.
(2) The Depositary shall be a clearing agency registered
under the Exchange Act. The Company initially appoints The Depository
Trust Company to act as Depositary with respect to the Global Note.
Initially, the Global Note shall be issued to the Depositary,
registered in the name of Cede & Co., as the nominee of the
Depositary, and deposited with the Trustee as custodian for Cede & Co.
(3) If (i) the Depositary notifies the Company that it is
unwilling or unable to continue as, or ceases to be, a clearing agency
registered under Section 17A of the Exchange Act and a successor to
the Depositary registered as a clearing agency under Section 17A of
the Exchange Act is not able to be appointed by the Company within 90
calendar days, or (ii) the Depositary is at any time unwilling or
unable to continue as Depositary and a successor to the Depositary is
not able to be appointed by the Company within 90 calendar days, or
(iii) the Company, at its option, notifies the Trustee in writing that
it elects to cause the issuance of Notes in the form of definitive
Notes, the Company shall issue notes in denominations of $1,000 or an
integral multiple thereof to all beneficial owners of the Global Note
in exchange for their beneficial interests therein. If an Event of
Default occurs and is continuing, the Company shall, at the request of
the Noteholder thereof, exchange all or part of the Global Note for
one or more definitive Notes; PROVIDED that the principal amount of
each of such definitive Note and such Global Note, after such
exchange, shall be $1,000.00 or an integral multiple thereof. Whenever
a Global Note is exchanged as a whole for one or more definitive Notes
it shall be surrendered by the holder thereof to the Trustee for
cancellation.
-19-
(4) If a Note in definitive form is issued in exchange for
any portion of a Global Note after the close of business on any record
date at the office or agency where such exchange occurs and before the
opening of business at such office or agency on the next succeeding
interest payment date, interest will not be payable on such interest
payment date in respect of such definitive Note, but will be payable
on such interest payment date only with respect to the exchanged
portion of the Global Note in accordance with the provisions of this
Indenture.
(5) Definitive Notes issued in exchange for all or a part
of the Global Note pursuant to this Section 2.5(c) 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. Upon execution and
authentication, the Trustee shall deliver such definitive Notes to the
persons in whose names such definitive Notes are so registered.
(6) At such time as all interests in the Global Note have
been redeemed, converted, canceled, repurchased or transferred, the
Global Note shall be, upon receipt thereof, canceled by the Trustee in
accordance with standing procedures and instructions existing between
the Depositary and the Custodian. At any time prior to such
cancellation, if any interest in the Global Note is exchanged for
definitive Notes, redeemed, converted, canceled, repurchased or
transferred to a transferee who receives definitive Notes therefor or
any definitive Note is exchanged or transferred for part of the Global
Note, the principal amount of the Global Note shall, in accordance
with the standing procedures and instructions existing between the
Depositary and the Custodian, be appropriately reduced or increased,
as the case may be, and an endorsement shall be made on the Global
Note, by the Trustee or the Custodian, at the direction of the
Trustee, to reflect such reduction or increase.
SECTION 2.6. MUTILATED, DESTROYED, LOST OR STOLEN NOTES.
(a) In case any Note shall become mutilated or be destroyed, lost or
stolen, the Company in its discretion may execute, and upon its request the
Trustee or an authenticating agent appointed by the Trustee shall
authenticate and deliver, a new Note, bearing a number not
contemporaneously outstanding, in exchange and substitution for the
mutilated Note, or in lieu of and in substitution for the Note so
destroyed, lost or stolen. In every case the applicant for a substituted
Note shall furnish to the Company, to the Trustee and, if applicable, to
such authenticating agent such security or indemnity as may be required by
them to save each of them harmless for any loss, liability, cost or expense
caused by or connected with such substitution, and, in every case of
destruction, loss or theft, the applicant shall also furnish to the
Company, to the Trustee and, if applicable, to such authenticating agent
evidence to their satisfaction of the destruction, loss or theft of such
Note and of the ownership thereof.
(b) The Trustee or such authenticating agent may authenticate any such
substituted Note and deliver the same upon the receipt of such security or
indemnity as the Trustee, the Company and, if applicable, such
authenticating agent may require. Upon
-20-
the issuance of any substituted Note, the Company may require the payment
of a sum sufficient to cover any tax or other governmental charge that may
be imposed in relation thereto and any other expenses connected therewith.
In case any Note which has matured or is about to mature or has been called
for redemption or is about to be converted into Common Stock shall become
mutilated or be destroyed, lost or stolen, the Company may, instead of
issuing a substitute Note, pay or authorize the payment of or convert or
authorize the conversion of the same (without surrender thereof except in
the case of a mutilated Note), as the case may be, if the applicant for
such payment or conversion shall furnish to the Company, to the Trustee
and, if applicable, to such authenticating agent such security or indemnity
as may be required by them to save each of them harmless for any loss,
liability, cost or expense caused by or connected with such substitution,
and, in case of destruction, loss or theft, evidence satisfactory to the
Company, the Trustee and, if applicable, any paying agent or conversion
agent of the destruction, loss or theft of such Note and of the ownership
thereof.
(c) Every substitute Note issued pursuant to the provisions of this
Section 2.6 by virtue of the fact that any Note is destroyed, lost or
stolen shall constitute an additional contractual obligation of the
Company, whether or not the destroyed, lost or stolen Note shall be found
at any time, and shall be entitled to all the benefits of (but shall be
subject to all the limitations set forth in) this Indenture equally and
proportionately with any and all other Notes duly issued hereunder. To the
extent permitted by law, all Notes shall be held and owned upon the express
condition that the foregoing provisions are exclusive with respect to the
replacement or payment or conversion of mutilated, destroyed, lost or
stolen Notes and shall preclude any and all other rights or remedies
notwithstanding any law or statute existing or hereafter enacted to the
contrary with respect to the replacement or payment or conversion of
negotiable instruments or other securities without their surrender.
SECTION 2.7. TEMPORARY NOTES. Pending the preparation of definitive
Notes, the Company may execute and the Trustee or an authenticating agent
appointed by the Trustee shall, upon written request of the Company,
authenticate and deliver temporary Notes (printed or lithographed). Temporary
Notes shall be issuable in any authorized denomination, and substantially in the
form of the definitive Notes but with such omissions, insertions and variations
as may be appropriate for temporary Notes, all as may be determined by the
Company. Every such temporary Note shall be executed by the Company and
authenticated by the Trustee or such authenticating agent upon the same
conditions and in substantially the same manner, and with the same effect, as
the definitive Notes. Without unreasonable delay the Company will execute and
deliver to the Trustee or such authenticating agent definitive Notes (other than
in the case of Notes in global form) and thereupon any or all temporary Notes
(other than any the Global Note) may be surrendered in exchange therefor, at
each office or agency maintained by the Company pursuant to Section 5.2 and the
Trustee or such authenticating agent shall authenticate and deliver in exchange
for such temporary Notes an equal aggregate principal amount of definitive
Notes. Such exchange shall be made by the Company at its own expense and without
any charge therefor. Until so exchanged, the temporary Notes shall in all
respects be entitled to the same benefits and subject to the same limitations
under this Indenture as definitive Notes authenticated and delivered hereunder.
-21-
SECTION 2.8. CANCELLATION OF NOTES PAID, ETC. All Notes surrendered for
the purpose of payment, redemption, repurchase, conversion, exchange or
registration of transfer, shall, if surrendered to the Company or any paying
agent or any Note registrar or any conversion agent, be surrendered to the
Trustee and promptly canceled by it, or, if surrendered to the Trustee, shall be
promptly canceled by it, and no Notes shall be issued in lieu thereof except as
expressly permitted by any of the provisions of this Indenture. Upon written
instructions of the Company, the Trustee shall destroy canceled Notes and, after
such destruction, shall deliver a certificate of such destruction to the
Company. If the Company shall acquire any of the Notes, such acquisition shall
not operate as a redemption or satisfaction of the indebtedness represented by
such Notes unless and until the same are delivered to the Trustee for
cancellation.
ARTICLE 3.
REDEMPTION OF NOTES
SECTION 3.1. REDEMPTION PRICES.
(a) OPTIONAL REDEMPTION. The Company may, at its option, redeem all or
from time to time any part of the Notes on any date prior to maturity, upon
notice as set forth in Section 3.2, and at the optional redemption prices
set forth in the form of Note attached as EXHIBIT A attached hereto,
together with accrued interest, if any, to, but excluding, the date fixed
for redemption, PROVIDED, HOWEVER, that, other than as provided in Section
3.1(b), no such redemption shall be effected before June 18, 2007.
(b) PROVISIONAL REDEMPTION. The Notes may not be redeemed by the
Company, in whole or in part, pursuant to this Section 3.1(b) prior to
June 18, 2005. After such date, the Notes may be redeemed by the
Company (a "Provisional Redemption"), in whole or in part, at any time upon
notice as set forth in Section 3.2, at a redemption price equal to $1,000
per $1,000 principal amount of Notes to be redeemed plus accrued and unpaid
interest, if any, to the date of redemption (the "Provisional Redemption
Date") if the closing price of the Common Stock shall have exceeded 150% of
the Conversion Price then in effect for at least 20 Trading Days in any
consecutive 30-Trading Day period ending on the Trading Day prior to the
date of mailing of the notice of redemption pursuant to Section 3.2 (the
"Notice Date"). For purposes of this Article, the term "Conversion Price"
shall have the meaning given such term in Section 15.4 hereof.
SECTION 3.2. NOTICE OF REDEMPTION; SELECTION OF NOTES.
(a) In case the Company shall desire to exercise the right to redeem
all or, as the case may be, any part of the Notes pursuant to Section 3.1,
it shall fix a date for redemption, and it, or at its request (which must
be received by the Trustee at least ten (10) Business Days prior to the
date the Trustee is requested to give notice as described below unless a
shorter period is agreed to by the Trustee), the Trustee in the name of and
at the expense of the Company, shall mail or cause to be mailed a notice of
such redemption at least twenty (20) and not more than sixty (60) days
prior to the date fixed
-22-
for redemption to the holders of Notes so to be redeemed as a whole or in
part at their last addresses as the same appear on the Note register
(PROVIDED that if the Company shall give such notice, it shall also give
such notice, and notice of the Notes to be redeemed, to the Trustee). Such
mailing shall be by first class mail. The notice if mailed in the manner
herein provided shall be conclusively presumed to have been duly given,
whether or not the holder receives such notice. In any case, failure to
give such notice by mail or any defect in the notice to the holder of any
Note designated for redemption as a whole or in part shall not affect the
validity of the proceedings for the redemption of any other Note.
(b) Each such notice of redemption shall identify the Notes (including
CUSIP number(s)) to be redeemed, shall specify the aggregate principal
amount of Notes to be redeemed, the date fixed for redemption, the
redemption price at which Notes are to be redeemed, the place or places of
payment, that payment will be made upon presentation and surrender of such
Notes, that interest accrued to, but excluding, the date fixed for
redemption will be paid as specified in said notice, and that on and after
said date interest thereon or on the portion thereof to be redeemed will
cease to accrue. Such notice shall also state the current Conversion Price
and the date on which the right to convert such Notes or portions thereof
into Common Stock will expire. If fewer than all the Notes are to be
redeemed, the notice of redemption shall identify the Notes to be redeemed.
In case any Note is to be redeemed in part only, the notice of redemption
shall state the portion of the principal amount thereof to be redeemed and
shall state that on and after the date fixed for redemption, upon surrender
of such Note, a new Note or Notes in principal amount equal to the
unredeemed portion thereof will be issued.
(c) On or prior to the redemption date specified in the notice of
redemption given as provided in this Section, the Company will deposit with
the Trustee or with one or more paying agents (or, if the Company is acting
as its own paying agent, set aside, segregate and hold in trust as provided
in Section 5.4) an amount of money sufficient to redeem on the redemption
date all the Notes (or portions thereof) so called for redemption (other
than those theretofore surrendered for conversion into Common Stock) at the
appropriate redemption price, together with accrued interest to, but
excluding, the date fixed for redemption; PROVIDED that if such payment is
made on the redemption date it must be received by the Trustee or paying
agent, as the case may be, by 10:00 a.m.
New York City time, on such date.
If any Note called for redemption is converted pursuant hereto, any money
deposited with the Trustee or any paying agent or so segregated and held in
trust for the redemption of such Note shall be paid to the Company upon its
request, or, if then held by the Company shall be discharged from such
trust.
(d) If fewer than all the Notes are to be redeemed, the Company will
give the Trustee written notice in the form of an Officers' Certificate not
fewer than twenty-five (25) days (or such shorter period of time as may be
acceptable to the Trustee) prior to the redemption date as to the aggregate
principal amount of Notes to be redeemed. If fewer than all the Notes are
to be redeemed, the Trustee shall select the Notes or portions thereof to
be redeemed (in principal amounts of $1,000 or integral multiples thereof),
by lot, or by a method the Trustee considers fair and appropriate (as long
as such method is not prohibited by the rules of any United States national
securities exchange or of an established automated over-the-counter trading
market in the United States on which the
-23-
Notes are then listed). If any Note selected for partial redemption is
converted in part after such selection, the converted portion of such Note
shall be deemed (so far as is possible) to be the portion to be selected
for redemption. The Notes (or portions thereof) so selected shall be deemed
duly selected for redemption for all purposes hereof, notwithstanding that
any such Note is converted as a whole or in part before the mailing of the
notice of redemption.
(e) Upon any redemption of less than all Notes, the Company and the
Trustee may (but need not) treat as outstanding any Notes surrendered for
conversion during the period of fifteen (15) days next preceding the
mailing of a notice of redemption and may (but need not) treat as not
outstanding any Note authenticated and delivered during such period in
exchange for the unconverted portion of any Note converted in part during
such period.
SECTION 3.3. PAYMENT OF NOTES CALLED FOR REDEMPTION.
(a) If notice of redemption has been given as above provided, the
Notes or portion of Notes with respect to which such notice has been given
shall, unless converted into Common Stock pursuant to the terms hereof,
become due and payable on the date and at the place or places stated in
such notice at the applicable redemption price, together with interest
accrued to, but excluding, the date fixed for redemption, and on and after
said date (unless the Company shall default in the payment of such Notes at
the redemption price, together with interest accrued to, but excluding,
said date) interest on the Notes or portion of Notes so called for
redemption shall cease to accrue and such Notes shall cease after the close
of business on the Business Day next preceding the date fixed for
redemption to be convertible into Common Stock and, except as provided in
Sections 8.5 and 13.4, to be entitled to any benefit or security under this
Indenture, and the holders thereof shall have no right in respect of such
Notes except the right to receive the redemption price thereof and unpaid
interest to, but excluding, the date fixed for redemption. On presentation
and surrender of such Notes at a place of payment in said notice specified,
the said Notes or the specified portions thereof to be redeemed shall be
paid and redeemed by the Company at the applicable redemption price,
together with interest accrued thereon to, but excluding, the date fixed
for redemption; PROVIDED that, if the applicable redemption date is an
interest payment date, the semi-annual payment of interest becoming due on
such date shall be payable to the holders of such Notes registered as such
on the relevant record date subject to the terms and provisions of Section
2.3 hereof.
(b) Upon presentation of any Note redeemed in part only, the Company
shall execute and the Trustee shall authenticate and deliver to the holder
thereof, at the expense of the Company, a new Note or Notes, of authorized
denominations, in principal amount equal to the unredeemed portion of the
Notes so presented.
(c) Notwithstanding the foregoing, the Trustee shall not redeem any
Notes or mail any notice of optional redemption during the continuance of a
default in payment of interest or premium on the Notes or of any Event of
Default of which, in the case of any Event of Default other than under
Section 7.1(a), (b), (c) or (e), a Responsible Officer of
-24-
the Trustee has knowledge. If any Note called for redemption shall not be
so paid upon surrender thereof for redemption, the principal and premium,
if any, shall, until paid or duly provided for, bear interest from the date
fixed for redemption at the rate borne by the Note and such Note shall
remain convertible into Common Stock until the principal and premium, if
any, shall have been paid or duly provided for.
SECTION 3.4. CONVERSION ARRANGEMENT ON CALL FOR REDEMPTION. In connection
with any redemption of Notes, the Company may arrange for the purchase and
conversion of any Notes not converted prior to the expiration of such conversion
right by an agreement with one or more investment bankers or other purchasers to
purchase such Notes by paying to the Trustee in trust for the Noteholders, on or
before the date fixed for redemption, an amount not less than the applicable
redemption price, together with interest accrued to the date fixed for
redemption, of such Notes. Notwithstanding anything to the contrary contained in
this Article 3, the obligation of the Company to pay the redemption price of
such Notes, together with interest accrued to, but excluding, the date fixed for
redemption, shall be deemed to be satisfied and discharged to the extent such
amount is so paid by such purchasers. If such an agreement is entered into, a
copy of which, certified as true and correct by the Secretary or Assistant
Secretary of the Company will be filed with the Trustee prior to the date fixed
for redemption, any Notes not duly surrendered for conversion by the holders
thereof may, at the option of the Company, be deemed, to the fullest extent
permitted by law, acquired by such purchasers from such holders and
(notwithstanding anything to the contrary contained in Article 15) surrendered
by such purchasers for conversion, all as of immediately prior to the close of
business on the date fixed for redemption (and the right to convert any such
Notes shall be deemed to have been extended through such time), subject to
payment of the above amount as aforesaid. At the direction of the Company, the
Trustee shall hold and dispose of any such amount paid to it in the same manner
as it would monies deposited with it by the Company for the redemption of Notes.
Without the Trustee's prior written consent, no arrangement between the Company
and such purchasers for the purchase and conversion of any Notes shall increase
or otherwise affect any of the powers, duties, responsibilities or obligations
of the Trustee as set forth in this Indenture, and the Company agrees to
indemnify the Trustee from, and hold it harmless against, any and all loss,
liability, damage, claim or expense arising out of or in connection with any
such arrangement for the purchase and conversion of any Notes between the
Company and such purchasers, including the costs and expenses incurred by the
Trustee in the defense of any claim or liability arising out of or in connection
with the exercise or performance of any of its powers, duties, responsibilities
or obligations under this Indenture.
ARTICLE 4.
SUBORDINATION OF NOTES
SECTION 4.1. AGREEMENT OF SUBORDINATION. The Company covenants and
agrees, and each holder of Notes issued hereunder by his acceptance thereof
likewise covenants and agrees, that all Notes shall be issued subject to the
provisions of this Article 4; and each person holding any Note, whether upon
original issue or upon transfer, assignment or exchange thereof, accepts and
agrees to be bound by such provisions.
-25-
The payment of the principal of, premium, if any, and interest on all Notes
(including, but not limited to, the redemption price or repurchase price with
respect to the Notes to be redeemed or repurchased, as provided in this
Indenture) issued hereunder shall, to the extent and in the manner hereinafter
set forth, be subordinated to the prior payment in full, in cash or in such
other form of payment as may be acceptable to the holders of Senior
Indebtedness, of all Senior Indebtedness, whether outstanding at the date of
this Indenture or thereafter incurred or created.
No provision of this Article 4 shall prevent the occurrence of any default
or Event of Default hereunder.
SECTION 4.2. PAYMENTS TO NOTEHOLDERS. No payment (including pursuant
to any redemption or repurchase of Notes) shall be made with respect to the
principal of, or premium, if any, or interest on the Notes, except payments and
distributions made by the Trustee as permitted by Section 4.6, if:
(a) a default in the payment of principal, premium, if any, or
interest or other payment due on Designated Senior Indebtedness occurs and
is continuing beyond any applicable period of grace; or
(b) any other default occurs and is continuing with respect to
Designated Senior Indebtedness that then permits holders of the Designated
Senior Indebtedness as to which such default related to accelerate its
maturity and the Trustee and the Company receive a notice of such default
(a "Payment Blockage Notice") from a representative of Designated Senior
Indebtedness or a holder of Designated Senior Indebtedness or the Company.
The Company may and shall resume payments on the Notes (1) in the case of a
payment default, on the date upon which such default is cured or waived or
ceases to exist, and (2) in the case of a nonpayment default with respect to
Designated Senior Indebtedness, on the earlier of the date on which the
nonpayment default is cured or waived or ceases to exist or 179 days after the
date on which the applicable Payment Blockage Notice is received.
No new period of payment blockage may be commenced pursuant to a Payment
Blockage Notice unless (A) at least 365 days shall have elapsed since the first
day of effectiveness of the immediately prior Payment Blockage Notice and (B)
all scheduled payments of principal, premium, if any, and interest on the Notes
that have come due have been paid in full in cash, or in such other form of
payment as may be acceptable to the holders of the Notes. No default (whether or
not such event of default is on the same issue of Designated Senior
Indebtedness) that existed or was continuing on the date of delivery of any
Payment Blockage Notice to the Trustee shall be, or be made, the basis for a
subsequent Payment Blockage Notice.
In addition, in the event of any acceleration of the Notes because of an
Event of Default, no payment or distribution (including with respect to any
redemption or repurchase of the Notes) shall be made to the Trustee or any
holder of Notes with respect to the principal of, premium, if any, or interest
on the Notes, except payments and distributions made by the Trustee as permitted
by Section 4.6, until all Senior Indebtedness has been paid in full in cash or
other payment satisfactory to the holders of Senior Indebtedness or such
acceleration is rescinded in accordance
-26-
with the terms of this Indenture. If payment of the Notes is accelerated because
of an Event of Default, the Company shall promptly notify holders of Senior
Indebtedness of the acceleration.
Notwithstanding the foregoing, in the event that the Trustee or any holder
of Notes receives any payment or distribution of assets of the Company of any
kind in contravention of any term of this Indenture, whether in cash, property
or securities, including, without limitation, by way of setoff or otherwise,
before all Senior Indebtedness is paid in full, in cash or such other form of
payment as may be acceptable to the holders of Senior Indebtedness, then such
payment or distribution shall be held by the recipient or recipients in trust
for the benefit of, and shall immediately be paid over or delivered to, the
holders of Senior Indebtedness or their respective representative or
representatives, or to the trustee or trustees under any indenture pursuant to
which any instruments evidencing any Senior Indebtedness may have been issued,
as their respective interests may appear, as calculated by the Company, for
application to the payment of all Senior Indebtedness remaining unpaid to the
extent necessary to make payment in full, in cash or such other form of payment
as may be acceptable to the holders of Senior Indebtedness, of all Senior
Indebtedness remaining unpaid, after giving effect to any concurrent payment or
distribution, or provision therefor, to or for the holders of such Senior
Indebtedness.
Nothing in this Section 4.2 shall apply to claims of, or payments to, the
Trustee pursuant to Section 8.6. This Section 4.2 shall be subject to the
further provisions of Section 4.6.
SECTION 4.3. BANKRUPTCY AND DISSOLUTION, ETC. Upon any payment by the
Company, or distribution of assets of the Company of any kind or character,
whether in cash, property or securities, to creditors upon any dissolution,
winding-up, liquidation or reorganization of the Company, whether voluntary or
involuntary or in bankruptcy, insolvency, receivership or other proceedings, all
amounts due or to become due upon all Senior Indebtedness shall first be paid in
full, in cash or in such other form of payment as may be acceptable to the
holders of Senior Indebtedness, before any payment is made on account of the
principal or premium, if any, and interest on the Notes (except payments made
pursuant to Article 13 from monies deposited with the Trustee pursuant thereto
prior to the happening of such dissolution, winding-up, liquidation or
reorganization or bankruptcy, insolvency, receivership or other such
proceedings); and upon any such dissolution, winding-up, liquidation or
reorganization or bankruptcy, insolvency, receivership or other such
proceedings, any payment by the Company, or distribution of assets of the
Company of any kind or character, whether in cash, property or securities, to
which the holders of the Notes or the Trustee under this Indenture would be
entitled, except for the provision of this Article 4, shall (except as
aforesaid) be paid by the Company or by any receiver, trustee in bankruptcy,
liquidating trustee, agent or other person making such payment or distribution,
or by the holders of the Notes or by the Trustee under this Indenture if
received by them or it, directly to the holders of Senior Indebtedness (pro rata
to such holders on the basis of the respective amounts of Senior Indebtedness
held by such holders, or as otherwise required by law or a court order) or their
respective representative or representatives, or to the trustee or trustees
under any indenture pursuant to which any instruments evidencing any Senior
Indebtedness may have been issued, as their respective interests may appear, to
the extent necessary to pay all Senior Indebtedness in full in cash or in such
other form of payment as may be acceptable to the holders of Senior Indebtedness
after giving effect to any concurrent payment or distribution to or for the
holders of
-27-
Senior Indebtedness, before any payment or distribution is made to the holders
of the Notes or to the Trustee under this Indenture.
Notwithstanding the foregoing, in the event that the Trustee or any holder
of Notes receives any payment or distribution of assets of the Company of any
kind in contravention of any term of this Indenture, whether in cash, property
or securities, including, without limitation, by way of setoff or otherwise,
before all Senior Indebtedness is paid in full, in cash or such other form of
payment as may be acceptable to the holders of Senior Indebtedness, then such
payment or distribution shall be held by the recipient or recipients in trust
for the benefit of, and shall immediately be paid over or delivered to, the
holders of Senior Indebtedness or their respective representative or
representatives, or to the trustee or trustees under any indenture pursuant to
which any instruments evidencing any Senior Indebtedness may have been issued,
as their respective interests may appear, as calculated by the Company, for
application to the payment of all Senior Indebtedness remaining unpaid to the
extent necessary to make payment in full, in cash or such other form of payment
as may be acceptable to the holders of Senior Indebtedness, of all Senior
Indebtedness remaining unpaid, after giving effect to any concurrent payment or
distribution, or provision therefor, to or for the holders of such Senior
Indebtedness.
For purposes of Section 4.2 hereof and this Section 4.3, the words "cash,
property or securities" shall not be deemed to include shares of stock of the
Company as reorganized or readjusted, or securities of the Company or any other
corporation provided for by a plan of reorganization or readjustment, the
payment of which is subordinated (at least to the extent provided in this
Article 4 with respect to the Notes) to the payment of all Senior Indebtedness
which may at the time be outstanding; PROVIDED that (i) the Senior Indebtedness
is assumed by the new corporation, if any, resulting from such reorganization or
adjustment, and (ii) the rights of the holders of Senior Indebtedness (other
than leases which are not assumed by the Company or by the new corporation, as
the case may be) are not, without the consent of such holders, altered by such
reorganization or readjustment. The consolidation of the Company with, or the
merger of the Company into, another corporation or the liquidation or
dissolution of the Company following the conveyance or transfer of its property
as an entirety, or substantially as an entirety, to another corporation upon the
terms and conditions provided for in Article 12 shall not be deemed a
dissolution, winding-up, liquidation or reorganization for the purposes of this
Section 4.3 if such other corporation shall, as a part of such consolidation,
merger, conveyance or transfer, comply with the conditions stated in Article 12.
Nothing in this Section 4.3 shall apply to claims of, or payments to, the
Trustee under or pursuant to Section 8.6. This Section 4.3 shall be subject to
the further provisions of Section 4.6.
SECTION 4.4. SUBROGATION OF NOTES. Subject to the payment in full in cash
or in such other form of payment as may be acceptable to the holders of Senior
Indebtedness of all Senior Indebtedness, the rights of the holders of the Notes
shall be subrogated to the extent of the payments or distributions made to the
holders of such Senior Indebtedness pursuant to the provisions of this Article 4
(equally and ratably with the holders of all indebtedness of the Company which
by its express terms is subordinated to other indebtedness of the Company to
substantially the same extent as the Notes are subordinated and is entitled to
like rights of subrogation) to the rights of the holders of Senior Indebtedness
to receive payments or distributions of cash, property or securities of the
Company applicable to the Senior Indebtedness
-28-
until the principal of, and premium, if any, and interest on the Notes shall be
paid in full; and, for the purposes of such subrogation, no payments or
distributions to the holders of the Senior Indebtedness of any cash, property or
securities to which the holders of the Notes or the Trustee would be entitled
except for the provisions of this Article 4, and no payment over pursuant to the
provisions of this Article 4, to or for the benefit of the holders of Senior
Indebtedness by holders of the Notes or the Trustee, shall, as between the
Company, its creditors other than holders of Senior Indebtedness, and the
holders of the Notes, be deemed to be a payment by the Company to or on account
of the Senior Indebtedness; and no payments or distributions of cash, property
or securities to or for the benefit of the holders of the Notes pursuant to the
subrogation provisions of this Article 4, which would otherwise have been paid
to the holders of Senior Indebtedness shall be deemed to be a payment by the
Company to or for the account of the Notes. It is understood that the provisions
of this Article 4 are and are intended solely for the purposes of defining the
relative rights of the holders of the Notes, on the one hand, and the holders of
the Senior Indebtedness, on the other hand.
Nothing contained in this Article 4 or elsewhere in this Indenture or in
the Notes is intended to or shall impair, as among the Company, its creditors
other than the holders of Senior Indebtedness, and the holders of the Notes, the
obligation of the Company, which is absolute and unconditional, to pay to the
holders of the Notes the principal of, and premium, if any, and interest on the
Notes as and when the same shall become due and payable in accordance with their
terms, or is intended to or shall affect the relative rights of the holders of
the Notes and creditors of the Company other than the holders of the Senior
Indebtedness, nor shall anything herein or therein prevent the Trustee or the
holder of any Note from exercising all remedies otherwise permitted by
applicable law upon default under this Indenture, subject to the rights, if any,
under this Article 4 of the holders of Senior Indebtedness in respect of cash,
property or securities of the Company received upon the exercise of any such
remedy.
Upon any payment or distribution of assets of the Company referred to in
this Article 4, the Trustee, subject to the provisions of Section 8.1, and the
holders of the Notes shall be entitled to rely upon any order or decree made by
any court of competent jurisdiction in which such bankruptcy, dissolution,
winding-up, liquidation or reorganization proceedings are pending, or a
certificate of the receiver, trustee in bankruptcy, liquidating trustee, agent
or other person making such payment or distribution, delivered to the Trustee or
to the holders of the Notes, 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 4.
SECTION 4.5. AUTHORIZATION BY NOTEHOLDERS. Each holder of a Note by his
acceptance thereof authorizes and directs the Trustee on his behalf to take such
action as may be necessary or appropriate to effectuate the subordination
provided in this Article 4 and appoints the Trustee his attorney-in-fact for any
and all such purposes.
SECTION 4.6. NOTICE TO TRUSTEE. The Company shall give written
notice to the Trustee of the issuance of any Designated Senior Indebtedness. In
addition, the Company shall give prompt written notice in the form of an
Officers' Certificate to a Responsible Officer of the Trustee and to any paying
agent of any fact known to the Company which would prohibit the
-29-
making of any payment of monies to or by the Trustee or any paying agent in
respect of the Notes pursuant to the provisions of this Article 4.
Notwithstanding the provisions of this Article 4 or any other provision of this
Indenture, the Trustee shall not be charged with knowledge of the existence of
any Senior Indebtedness or of any default or event of default with respect to
any Senior Indebtedness or of any other facts which would prohibit the making of
any payment of monies to or by the Trustee in respect of the Notes pursuant to
the provisions of this Article 4, unless and until a Responsible Officer of the
Trustee shall have received written notice thereof at the Corporate Trust Office
from the Company (in the form of an Officers' Certificate) or a holder or
holders of Senior Indebtedness or from any trustee thereof who shall have been
certified by the Company or otherwise established to the reasonable satisfaction
of the Trustee to be such holder or trustee; and before the receipt of any such
written notice, the Trustee, subject to the provisions of Section 8.1, shall be
entitled in all respects to assume that no such facts exist; PROVIDED that if on
a date at least two (2) Business Days prior to the date upon which by the terms
hereof any such monies may become payable for any purpose (including, without
limitation, the payment of the principal of, or premium, if any, or interest on
any Note), the Trustee shall not have received with respect to such monies the
notice provided for in this Section 4.6, then, anything herein contained to the
contrary notwithstanding, the Trustee shall have full power and authority to
receive such monies and to apply the same to the purpose for which they were
received, and shall not be affected by any notice to the contrary which may be
received by it on or after such prior date.
Notwithstanding anything to the contrary hereinbefore set forth, nothing
shall prevent (a) any payment by the Company or the Trustee to the Noteholders
of amounts in connection with a redemption of Notes if (i) notice of such
redemption has been given to the Noteholders pursuant to Article 3 prior to the
receipt by the Trustee of written notice as aforesaid, and (ii) such notice of
redemption is given not earlier than sixty (60) days before the redemption date,
(b) any payment by the Company or the Trustee to the Noteholders of amounts in
connection with a repurchase of Notes if (i) notice of such repurchase has been
given pursuant to Article 16 prior to the receipt by the Trustee of written
notice as aforesaid, and (ii) such notice of repurchase is given not earlier
than forty (40) days before the repurchase date, or (c) any payment by the
Trustee to the Noteholders of monies deposited with it pursuant to Section 13.1.
The Trustee, subject to the provisions of Section 8.1, shall be entitled to
rely on the delivery to it of a written notice by a person representing himself
to be a holder of Senior Indebtedness (or a trustee on behalf of such holder) to
establish that such notice has been given by a holder of Senior Indebtedness or
a trustee on behalf of any such holder or holders. In the event that the Trustee
determines in good faith that further evidence is required with respect to the
right of any person as a holder of Senior Indebtedness to participate in any
payment or distribution pursuant to this Article 4, the Trustee may request such
person to furnish evidence to the reasonable satisfaction of the Trustee as to
the amount of Senior Indebtedness held by such person, the extent to which such
person is entitled to participate in such payment or distribution and any other
facts pertinent to the rights of such person under this Article 4, and if such
evidence is not furnished the Trustee may defer any payment to such person
pending judicial determination as to the right of such person to receive such
payment.
SECTION 4.7. TRUSTEE'S RELATION TO SENIOR INDEBTEDNESS. The Trustee and
any agent of the Company or the Trustee in its individual capacity shall be
entitled
-30-
to all the rights set forth in this Article 4 in respect of any Senior
Indebtedness at any time held by it, to the same extent as any other holder of
Senior Indebtedness, and nothing in Section 8.13 or elsewhere in this Indenture
shall deprive the Trustee or any such agent of any of its rights as such holder.
Nothing in this Article 4 shall apply to claims of, or payments to, the Trustee
under or pursuant to Section 8.6.
With respect to the holders of Senior Indebtedness, the Trustee undertakes
to perform or to observe only such of its covenants and obligations as are
specifically set forth in this Article 4, 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, subject to the
provisions of Section 4.2 and Section 8.1, the Trustee shall not be liable to
any holder of Senior Indebtedness if it shall pay over or deliver to holders of
Notes, the Company or any other person money or assets to which any holder of
Senior Indebtedness shall be entitled by virtue of this Article 4 or otherwise.
SECTION 4.8. NO IMPAIRMENT OF SUBORDINATION. No right of any present or
future holder of any Senior Indebtedness to enforce subordination as herein
provided shall at any time in any way be prejudiced or impaired by any act or
failure to act on the part of the Company or by any act or failure to act, in
good faith, by any such holder, or by any noncompliance by the Company with the
terms, provisions and covenants of this Indenture, regardless of any knowledge
thereof which any such holder may have or otherwise be charged with.
SECTION 4.9. CERTAIN CONVERSIONS DEEMED PAYMENT. For the purposes of this
Article 4 only, (1) the issuance and delivery of junior securities upon
conversion of Notes in accordance with Article 15 shall not be deemed to
constitute a payment or distribution on account of the principal of (or premium,
if any) or interest on Notes or on account of the purchase or other acquisition
of Notes, and (2) the payment, issuance or delivery of cash, property or
securities (other than junior securities) upon conversion of a Note shall be
deemed to constitute payment on account of the principal of such Note. For the
purposes of this Section, the term "junior securities" means (a) shares of any
stock of any class of the Company and (b) securities of the Company which are
subordinated in right of payment to all Senior Indebtedness which may be
outstanding at the time of issuance or delivery of such securities to
substantially the same extent as, or to a greater extent than, the Notes are so
subordinated as provided in this Article. Nothing contained in this Article or
elsewhere in this Indenture or in the Notes is intended to or shall impair, as
among the Company, its creditors other than holders of Senior Indebtedness and
the holders of the Notes, the right, which is absolute and unconditional, of the
holder of any Note to convert such Note in accordance with Article 15.
SECTION 4.10. ARTICLE APPLICABLE TO PAYING AGENTS. If at any time any
paying agent other than the Trustee shall have been appointed by the Company and
be then acting hereunder, the term Trustee as used in this Article 4 shall
(unless the context shall otherwise require) be construed as extending to and
including such paying agent within its meaning as fully for all intents and
purposes as if such paying agent were named in this Article in addition to or in
place of the Trustee; PROVIDED, HOWEVER, that the first sentence of Section 4.5
shall not apply to the Company or any Affiliate of the Company if it or such
Affiliate acts as paying agent.
-31-
ARTICLE 5.
PARTICULAR COVENANTS OF THE COMPANY
SECTION 5.1. PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST. The Company
covenants and agrees that it will duly and punctually pay or cause to be paid
the principal of and premium, if any, and interest on each of the Notes at the
places, at the respective times and in the manner provided herein and in the
Notes. Each installment of interest on the Notes due on any semi-annual interest
payment date may be paid by mailing checks for the interest payable to or upon
the written order of the holders of Notes entitled thereto as they shall appear
on the registry books of the Company, PROVIDED that, with respect to any holder
of Notes with an aggregate principal amount equal to or in excess of $2,000,000,
at the request of such holder in writing to the Company, interest on such
holder's Notes shall be paid by wire transfer in immediately available funds in
accordance with the wire transfer instructions supplied by such holder from time
to time to the Trustee and paying agent (if different from Trustee) at least two
days prior to the applicable record date; PROVIDED, FURTHER that any payment to
the Depositary or its nominee shall be made by wire transfer of immediately
available funds to the account of the Depositary or its nominee.
SECTION 5.2. MAINTENANCE OF OFFICE OR AGENCY. The Company will maintain
in the Borough of Manhattan, The City of
New York, an office or agency where the
Notes may be surrendered for registration of transfer or exchange or for
presentation for payment or for conversion, redemption or repurchase and where
notices and demands to or upon the Company in respect of the Notes and this
Indenture may be served. The Company will give prompt written notice to the
Trustee of the location, and any change in the location, of such office or
agency not designated or appointed by the Trustee. If at any time the Company
shall fail to maintain any such required office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the Corporate Trust Office or the
office or agency of the Trustee in the Borough of Manhattan, The City of
New
York.
The Company may also from time to time designate one or more other offices
or agencies where the Notes may be presented or surrendered for any or all such
purposes and may from time to time rescind such designations; PROVIDED that no
such designation or rescission shall in any manner relieve the Company of its
obligation to maintain an office or agency in the Borough of Manhattan, The City
of
New York, for such purposes. The Company will give prompt written notice to
the Trustee of any such designation or rescission and of any change in the
location of any such other office or agency.
The Company hereby initially designates the Trustee as paying agent, Note
registrar, Custodian and conversion agent and the Corporate Trust Office and the
office or agency of the Trustee in the Borough of Manhattan, The City of
New
York (which initially shall be the office of the Trustee located at 000 Xxxxxxx
Xxxxxx, 0X, Xxx Xxxx, Xxx Xxxx 10286) as one such office or agency of the
Company for each of the aforesaid purposes.
-32-
So long as the Trustee is the Note registrar, the Trustee agrees to mail,
or cause to be mailed, the notices set forth in Section 8.10(a) and the third
paragraph of Section 8.11.
SECTION 5.3. APPOINTMENTS TO FILL VACANCIES IN TRUSTEE'S OFFICE. The
Company, whenever necessary to avoid or fill a vacancy in the office of Trustee,
will appoint, in the manner provided in Section 8.10, a Trustee, so that there
shall at all times be a Trustee hereunder.
SECTION 5.4. PROVISIONS AS TO PAYING AGENT.
(a) If the Company shall appoint a paying agent other than the Trustee
or if the Trustee shall appoint such a paying agent, it will cause such
paying agent to execute and deliver to the Trustee an instrument in which
such agent shall agree with the Trustee, subject to the provisions of this
Section 5.4:
(1) that it will hold all sums held by it as such agent for
the payment of the principal of and premium, if any, or interest on
the Notes (whether such sums have been paid to it by the Company or by
any other obligor on the Notes) in trust for the benefit of the
holders of the Notes;
(2) that it will give the Trustee notice of any failure by
the Company (or by any other obligor on the Notes) to make any payment
of the principal of and premium, if any, or interest on the Notes when
the same shall be due and payable; and
(3) that at any time during the continuance of an Event of
Default, upon request of the Trustee, it will forthwith pay to the
Trustee all sums so held in trust.
The Company shall, on or before each due date of the principal of,
premium, if any, or interest on the Notes, deposit with the paying agent a
sum sufficient to pay such principal, premium, if any, or interest, and
(unless such paying agent is the Trustee) the Company will promptly notify
the Trustee of any failure to take such action, provided that if such
deposit is made on the due date, such deposit must be received by the
paying agent by 10:00 a.m., New York City time, on such date.
(b) If the Company shall act as its own paying agent, it will, on or
before each due date of the principal of, premium, if any, or interest on
the Notes, set aside, segregate and hold in trust for the benefit of the
holders of the Notes a sum sufficient to pay such principal, premium, if
any, or interest so becoming due and will notify the Trustee of any failure
to take such action and of any failure by the Company (or any other obligor
under the Notes) to make any payment of the principal of, premium, if any,
or interest on the Notes when the same shall become due and payable.
(c) Anything in this Section 5.4 to the contrary notwithstanding, the
Company may, at any time, for the purpose of obtaining a satisfaction and
discharge of this Indenture, or for any other reason, pay or cause to be
paid to the Trustee all sums held in trust by the Company or any paying
agent hereunder as required by this Section 5.4, such
-33-
sums to be held by the Trustee upon the trusts herein contained and upon
such payment by the Company or any paying agent to the Trustee, the Company
or such paying agent shall be released from all further liability with
respect to such sums.
(d) Anything in this Section 5.4 to the contrary notwithstanding, the
agreement to hold sums in trust as provided in this Section 5.4 is subject
to Sections 13.3 and 13.4.
SECTION 5.5. EXISTENCE. Subject to Article 12, the Company will do or
cause to be done all things necessary to preserve and keep in full force and
effect its corporate existence.
SECTION 5.6. STAY, EXTENSION AND USURY LAWS. The Company covenants (to
the extent that it may lawfully do so) that it shall 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 law or other law which would prohibit or
forgive the Company from paying all or any portion of the principal of or
interest on the Notes as contemplated herein, wherever enacted, now or at any
time hereafter in force, or which may affect the covenants or the performance of
this Indenture; and 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, by 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 5.7. COMPLIANCE CERTIFICATE. The Company shall deliver to the
Trustee within 120 days after the end of each fiscal year of the Company
(beginning with the fiscal year ending on December 31, 2004) an Officers'
Certificate one of the signers of which shall be the chief executive, chief
financial, or chief accounting officer, stating whether or not to the best of
their knowledge the signers know of any default or Event of Default that
occurred during such period. If they do, such Officers' Certificate shall
describe the default or Event of Default and its status.
SECTION 5.8. FURTHER INSTRUMENTS AND ACTS. Upon request of the Trustee,
the Company will execute and deliver such further instruments and do such
further acts as may be reasonably necessary or proper to carry out more
effectively the purposes of this Indenture.
SECTION 5.9. PAYMENT OF TAXES AND OTHER CLAIMS. The Company will pay or
discharge or cause to be paid or discharged, before the same shall become
delinquent, (1) all material taxes, assessments and governmental charges levied
or imposed upon it or any subsidiary or upon the income, profits or property of
the Company or any subsidiary, (2) all material lawful claims for labor,
materials and supplies which, if unpaid, might by law become a lien upon the
property of the Company or any subsidiary; and (3) all stamps and similar
duties, if any, which may be imposed by the United States, the United Kingdom or
any political subdivision thereof or therein in connection with the issuance,
transfer, exchange or conversion of any Notes or with respect to this Indenture;
provided, however, that, in the case of clauses (1) and (2) that the Company
shall not be required to pay or discharge or cause to be paid or discharged any
such tax, assessment, charge or claim whose amount, applicability or validity is
being contested in good faith by appropriate proceedings.
-34-
SECTION 5.10. LIMITATION ON ADDITIONAL INDEBTEDNESS. The Company agrees
that until the earlier of (i) June 18, 2009 or (ii) any conversion,
redemption or repurchase of all of the Notes hereunder, the Company shall not
create, incur, assume or guarantee, or otherwise become directly or
indirectly liable with respect to, any Indebtedness other than Permitted
Indebtedness.
SECTION 5.11. LIENS. The Company will not, and will not permit any
Restricted Subsidiary of the Company to, issue, assume or guarantee any
Indebtedness secured by any Lien on any property, or any improvements, additions
and accessions thereto and all proceeds thereof, now owned or hereafter acquired
by the Company or such Restricted Subsidiary. The foregoing restriction will
not, however, apply to the Company and its Restricted Subsidiaries with respect
to:
(i) Liens existing on the Issue Date or provided for
pursuant to agreements (and terms thereof) existing on the Issue Date
securing Indebtedness (A) existing on the Issue Date or (B) to be incurred
under agreements existing on the Issue Date;
(ii) Liens on the property of any Person existing at the
time such Person becomes a Restricted Subsidiary and not incurred as a
result of (or in connection with or in anticipation of) such Person
becoming a Restricted Subsidiary, PROVIDED that such Liens do not extend to
or cover any property of the Company or any of its Restricted Subsidiaries
other than the property encumbered at the time such Person becomes a
Restricted Subsidiary, all improvements, additions and accessions thereto
and all proceeds thereof;
(iii) Liens affecting property existing at the time it
becomes property of the Company or a Restricted Subsidiary, and all
improvements, additions and accessions thereto and all proceeds thereof;
(iv) Any Lien extending, renewing or replacing (or
successive extensions, renewals or replacements of) any Lien of any type
permitted under clauses (i) through (iii) above, including any Lien
securing any Refinancing Indebtedness relating to the Indebtedness
referenced in clauses (i) through (iii) above, PROVIDED that such Lien
extends to or covers only the property that is subject to the Lien being
extended, renewed or replaced and that the principal amount of Indebtedness
secured thereby shall not exceed the sum of (A) the principal amount of
Indebtedness so secured at the time of such extension, renewal or
replacement, (B) any additional Indebtedness incurred to pay the cost of
altering, improving or repairing such property and (C) any expenses of the
Company and its Restricted Subsidiaries (including any premium) incurred in
connection with any such extension, renewal or replacement;
(v) Liens securing Indebtedness of the Company or any
Restricted Subsidiary classified by the Company under clause (v) of the
definition of "Permitted Indebtedness"; and
-35-
(vi) Other Liens (exclusive of any Lien of any type
otherwise permitted under clauses (i) through (v) above) securing
Indebtedness of the Company or any of its Restricted Subsidiaries in an
aggregate principal amount that does not at the time such Indebtedness is
incurred exceed 20% of Consolidated Net Tangible Assets (as shown in the
most recent audited consolidated balance sheet of the Company and its
Restricted Subsidiaries).
SECTION 5.12. RESTRICTED PAYMENTS. The Company shall not, and shall not
permit any of its Subsidiaries to, directly or indirectly: (i) declare or pay
any dividend or make any distribution on account of the Company's or any of its
Subsidiaries' Equity Interests (other than dividends or distributions payable in
Equity Interests (other than Disqualified Stock) of the Company, dividends or
distributions payable to the Company or any Wholly Owned Subsidiary of the
Company that is a Restricted Subsidiary or dividends or distributions payable
with respect to any shares of Disqualified Stock issued in compliance with
Section 5.13); (ii) purchase, redeem or otherwise acquire or retire for value
any Equity Interests of the Company or any direct or indirect parent of the
Company or other Affiliate or Subsidiary of the Company (other than any such
Equity Interests owned by the Company or any Wholly Owned Subsidiary of the
Company that is a Restricted Subsidiary), other than any purchase, redemption,
acquisition or retirement of any Disqualified Stock issued in compliance with
Section 5.13, any Permitted Employee Repurchase or any Qualified Repurchase Plan
Repurchase; or (iii) make any principal payment on, or purchase, redeem, defease
or otherwise acquire or retire for value any Indebtedness that is contractually
subordinated to the Notes, except at final maturity, other than through the
purchase or acquisition by the Company of Indebtedness through the issuance in
exchange therefor of Equity Interests other than Disqualified Stock (all such
payments and other actions set forth in clauses (i) through (iii) above being
collectively referred to as "Restricted Payments"), unless, at the time of and
after giving effect to such Restricted Payment:
(a) no Default or Event of Default shall have occurred and
be continuing or would occur as a consequence thereof;
(b) the Company would, at the time of such Restricted
Payment and after giving pro forma effect thereto as if such
Restricted Payment had been made at the beginning of the applicable
four-quarter period, have been permitted to issue at least $1.00 of
Disqualified Stock pursuant to the Fixed Charge Coverage Ratio test
set forth in Section 5.13; and
(c) such Restricted Payment, together with the aggregate of
all other Restricted Payments made by the Company and its Subsidiaries
after the Issue Date (excluding Restricted Payments permitted by
clauses (ii) and (iii) of the next succeeding paragraph), is less than
the sum, without duplication, of (i) $5,000,000 plus (ii) 50% of the
Consolidated Net Income of the Company for the period (taken as one
accounting period) from June 1, 2004 to the end of the Company's most
recently ended fiscal quarter for which internal financial statements
are available at the time of such Restricted Payment (or, if such
Consolidated Net Income for such period is a deficit, less 100% of
such deficit), plus (iii) to the extent not
-36-
included in the amount described in clause (ii) above, 100% of the
aggregate net cash proceeds received after the Issue Date by the
Company from the issue or sale of, or from additional capital
contributions in respect of, Equity Interests of the Company or of
debt securities of the Company or any Subsidiary that have been
converted into, or cancelled in exchange for, Equity Interests of the
Company (other than Equity Interests (or convertible debt securities)
sold to a Subsidiary or an Affiliate of the Company and other than
Disqualified Stock or debt securities that have been converted into
Disqualified Stock).
The foregoing provisions shall not prohibit (i) the payment of any
dividend within 60 days after the date of declaration thereof, if at said date
of declaration such payment would have complied with the provisions of this
Indenture; (ii) the redemption, repurchase, retirement or other acquisition of
any Equity Interests of the Company or any direct or indirect parent of the
Company in exchange for, or out of the net cash proceeds of, the substantially
concurrent sale (other than to a Subsidiary or an Affiliate of the Company) of,
or from substantially concurrent additional capital contributions in respect of,
other Equity Interests of the Company (other than any Disqualified Stock);
PROVIDED that any net cash proceeds that are utilized for any such redemption,
repurchase, retirement or other acquisition, and any Net Income resulting
therefrom, shall be excluded from clauses (c)(ii) and (c)(iii) of the preceding
paragraph; and (iii) the defeasance, redemption or repurchase of Indebtedness
that is contractually subordinated to the Notes with the net cash proceeds from
an incurrence of Refinancing Indebtedness or the substantially concurrent sale
(other than to a Subsidiary or an Affiliate of the Company) of, or from
substantially concurrent additional capital contributions in respect of, Equity
Interests of the Company (other than Disqualified Stock); PROVIDED, that any net
cash proceeds that are utilized for any such defeasance, redemption or
repurchase, and any Net Income resulting therefrom, shall be excluded from
clauses (c)(ii) and (c)(iii) of the preceding paragraph.
The amount of all Restricted Payments (other than cash) shall be the
fair market value (evidenced by a Board Resolution delivered to the Trustee) on
the date of the Restricted Payment of the asset(s) proposed to be transferred by
the Company or such Subsidiary, as the case may be, pursuant to the Restricted
Payment. Not later than the date of making any Restricted Payment, the Company
shall deliver to the Trustee an Officers' Certificate stating that such
Restricted Payment is permitted and setting forth the basis upon which the
calculations required by this covenant were computed, which calculations may be
based upon the Company's latest available financial statements.
SECTION 5.13. DISQUALIFIED STOCK; ISSUANCE OF PREFERRED STOCK. The Company
shall not issue any Disqualified Stock and shall not permit any of its
Subsidiaries to issue any shares of preferred stock; PROVIDED, HOWEVER, that the
Company may issue shares of Disqualified Stock if: (i) the Fixed Charge Coverage
Ratio for the Company's most recently ended four full fiscal quarters for which
internal financial statements are available immediately preceding the date on
which such Disqualified Stock is issued would have been at least 1.5 to 1,
determined on a pro forma basis (including a pro forma application of the net
proceeds therefrom), as if the Disqualified Stock had been issued at the
beginning of such four-
-37-
quarter period; and (ii) no Default or Event of Default shall have occurred and
be continuing or would occur as a consequence thereof.
SECTION 5.14. DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING
SUBSIDIARIES. The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any encumbrance or restriction on the ability of any
Restricted Subsidiary to (i)(A) pay dividends or make any other distributions to
the Company or any of its Subsidiaries (1) on its Capital Stock or (2) with
respect to any other interest or participation in, or measured by, its profits,
or (B) pay any Indebtedness owed to the Company or any of its Subsidiaries, (ii)
make loans or advances to the Company or any of its Subsidiaries or (iii)
transfer any of its properties or assets to the Company or any of its
Subsidiaries, except for such encumbrances or restrictions existing under or by
reason of (a) Existing Indebtedness as in effect on the Issue Date, and any
amendments, modifications, restatements, renewals, supplements, refundings,
replacements or refinancings thereof, provided that such amendments,
modifications, restatements, renewals, supplements, refundings, replacement or
refinancings are no more restrictive with respect to such dividend and other
payment restrictions than those contained in the Existing Indebtedness as in
effect on the Issue Date, (b) this Indenture and the Notes, (c) applicable law,
(d) any instrument governing Acquired Indebtedness or Capital Stock of a Person
acquired by the Company or any of its Subsidiaries as in effect at the time of
such acquisition, which encumbrance or restriction is not applicable to any
Person, or the properties or assets of any Person, other than the Person, or the
property or assets of the Person, so acquired, (e) by reason of customary
non-assignment provisions in leases and licenses entered into in the ordinary
course of business and consistent with past practices, (f) Purchase Money
Obligations for property acquired in the ordinary course of business that impose
restrictions of the nature described in clause (iii) above on the property so
acquired, (g) agreements relating to the financing of the acquisition of real or
tangible personal property acquired after the Issue Date, provided, that such
encumbrance or restriction relates only to the property which is acquired and in
the case of any encumbrance or restriction that constitutes a Lien, such Lien
constitutes a Purchase Money Lien, (h) any restriction or encumbrance in the
nature of clause (iii) above contained in contracts for sale of assets permitted
by this Indenture in respect of the assets being sold pursuant to such contract,
or (i) Refinancing Indebtedness, PROVIDED that the restrictions contained in the
agreements governing such Refinancing Indebtedness are no more restrictive than
those contained in the agreements governing the Indebtedness being refinanced.
SECTION 5.15. TRANSACTIONS WITH AFFILIATES. The Company shall not, and
shall not permit any of its Restricted Subsidiaries to, sell, lease, transfer or
otherwise dispose of any of its properties or assets to, or purchase any
property or assets from, or enter into or make any contract, agreement,
understanding, loan, advance or guarantee with, or for the benefit of, any
Affiliate (each of the foregoing, an "Affiliate Transaction"), unless (i) such
Affiliate Transaction is on terms that are no less favorable to the Company or
the relevant Subsidiary than those that would have been obtained in a comparable
transaction by the Company or such Subsidiary with an unrelated Person and (ii)
the Company delivers to the Trustee (a) with respect to any Affiliate
Transaction entered into after the date of this Indenture involving aggregate
consideration in excess of $1,000,000, an Officers' Certificate certifying that
such Affiliate Transaction complies with clause (i) above and that such
Affiliate Transaction has been approved by a majority of the disinterested
members of the Board of Directors and (b) with
-38-
respect to any Affiliate Transaction involving aggregate consideration in excess
of $5,000,000, an opinion as to the fairness to the Company or such Subsidiary
of such Affiliate Transaction from a financial point of view issued by an
investment banking firm of national standing; provided that the following shall
not be deemed to be Affiliate Transactions: (x) any employment agreement entered
into by the Company or any of its Subsidiaries in the ordinary course of
business and consistent with the past practice of the Company or such
Subsidiary, (y) transactions between or among the Company and/or its Wholly
Owned Subsidiaries that are Restricted Subsidiaries, and (z) Restricted Payments
permitted by Section 5.12.
SECTION 5.16. RESTRICTED INVESTMENTS. The Company will not, and will not
permit any of its Restricted Subsidiaries to, make any Investments other than
Permitted Investments.
ARTICLE 6.
NOTEHOLDERS' LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE
SECTION 6.1. NOTEHOLDERS' LISTS. The Company covenants and agrees that
it will furnish or cause to be furnished to the Trustee, semi-annually, not
more than fifteen (15) days after each June 1 and December 1 in each year
beginning with December 1, 2004, and at such other times as the Trustee may
request in writing, within thirty (30) days after receipt by the Company of
any such request (or such lesser time as the Trustee may reasonably request
in order to enable it to timely provide any notice to be provided by it
hereunder), a list in such form as the Trustee may reasonably require of the
names and addresses of the holders of Notes as of a date not more than
fifteen (15) days (or such other date as the Trustee may reasonably request
in order to so provide any such notices) prior to the time such information
is furnished, except that no such list need be furnished so long as the
Trustee is acting as Note registrar.
SECTION 6.2. PRESERVATION AND DISCLOSURE OF LISTS.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, all information as to the names and addresses of the holders
of Notes contained in the most recent list furnished to it as provided in
Section 6.1 or maintained by the Trustee in its capacity as Note registrar,
if so acting. The Trustee may destroy any list furnished to it as provided
in Section 6.1 upon receipt of a new list so furnished.
(b) The rights of Noteholders to communicate with other holders of
Notes with respect to their rights under this Indenture or under the Notes
and the corresponding rights and duties of the Trustee, shall be as
provided by the Trust Indenture Act.
(c) Every Noteholder, by receiving and holding the same, agrees with
the Company and the Trustee that neither the Company nor the Trustee nor
any agent of either of them shall be held accountable by reason of any
disclosure of information as to names and addresses of holders of Notes
made pursuant to the Trust Indenture Act.
-39-
SECTION 6.3. REPORTS BY TRUSTEE.
(a) The Trustee shall transmit to holders of Notes such reports
concerning the Trustee and its actions under this Indenture as may be
required pursuant to the Trust Indenture Act at the times and in the manner
provided pursuant thereto.
(b) A copy of such report shall, at the time of such transmission to
holders of Notes, be filed by the Trustee with each stock exchange and
automated quotation system upon which the Notes are listed, if any, and
with the Company and the Commission. The Company will notify the Trustee
when the Notes are listed on any stock exchange or automated quotation
system and when any such listing is discontinued.
SECTION 6.4. REPORTS BY COMPANY.
(a) The Company shall file with the Trustee and the Commission, and
transmit to holders of Notes, such information, documents and other reports
and such summaries thereof, as may be required pursuant to the Trust
Indenture Act at the times and in the manner provided pursuant to such Act;
PROVIDED that any such information, documents or reports required to be
filed with the Commission pursuant to Section 13 or 15(d) of the Exchange
Act shall be filed with the Trustee within 15 days after the same is so
required to be filed with the Commission.
(b) The Company will deliver to the Trustee (i) as soon as available
and in any event within ninety (90) days after the end of each fiscal year
of the Company (x) a consolidated balance sheet of the Company and its
subsidiaries as of the end of such fiscal year and the related consolidated
statements of operations, stockholders' equity and cash flows for such
fiscal year, all reported on by an independent public accountant of
nationally recognized standing and (y) a report containing a management's
discussion and analysis of the financial condition and results of
operations and a description of the business and properties of the Company
and (ii) as soon as available and in any event within forty-five (45) days
after the end of each of the first three quarters of each fiscal year of
the Company an unaudited consolidated management's discussion and analysis
of the financial condition and results of operations of the Company for
such quarter; PROVIDED that the foregoing statements and reports shall not
be required for any fiscal year or quarter, as the case may be, with
respect to which the Company files or expects to file with the Trustee an
annual report or quarterly report, as the case may be, pursuant to the
preceding paragraph of this Section 6.4. Delivery of such reports is for
informational purposes only and the Trustee shall have no liability with
regard to the substance of the information provided by the Company or its
agents pursuant to this Section 6.4.
-40-
ARTICLE 7.
DEFAULTS AND REMEDIES
SECTION 7.1. EVENTS OF DEFAULT. In case one or more of the following
Events of Default (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body) shall have occurred and be
continuing:
(a) default in the payment of the principal of and premium, if any, on
any of the Notes as and when the same shall become due and payable either
at maturity or in connection with any redemption, by declaration or
otherwise, whether or not such payment is prohibited by the provisions of
Article 4; or
(b) default for thirty (30) days in the payment of any installment of
interest upon any of the Notes as and when the same shall become due and
payable, whether or not such payment is prohibited by the provisions of
Article 4; or
(c) failure on the part of the Company, within 5 days of the
satisfaction of the requirements for conversion set forth in Section 15.2
with respect to any Note, to deliver shares of its common stock, including
cash for fractional shares, to the holder of such Note; or
(d) failure on the part of the Company duly to observe or perform any
other of the covenants on the part of the Company in the Notes or in this
Indenture (other than a covenant a default in whose performance or whose
breach is elsewhere in this Section specifically dealt with) and the
continuance of such failure for a period of forty-five (45) days after the
date on which written notice of such failure, requiring the Company to
remedy the same, shall have been given to the Company by the Trustee, or to
the Company and a Responsible Officer of the Trustee by the holders of at
least 25% in aggregate principal amount of the outstanding Notes at the
time outstanding determined in accordance with Section 9.4; or
(e) a default in the payment of the Repurchase Price in respect of any
Note on the repurchase date therefor in accordance with the provisions of
Article 16, whether or not such payment in cash of the Repurchase Price is
prohibited by the provisions of Article 4; or
(f) failure on the part of the Company to provide a written notice of
a Repurchase Event in accordance with Section 16.2; or
(g) failure on the part of the Company or any Significant Subsidiary
to make any payment at maturity, including any applicable grace period, in
respect of Indebtedness of, or guaranteed or assumed by, the Company or any
Significant Subsidiary, in a principal amount then outstanding in excess of
U.S. $5,000,000, and the continuance of such failure for a period of thirty
(30) days after there shall have been given, by registered or certified
mail, to the Company by the Trustee or to the Company and the Trustee by
the
-41-
holders of not less than 25% in aggregate principal amount of the Notes
then outstanding, a written notice specifying such default and requiring
the Company to cause such default to be cured or waived and stating that
such notice is a "Notice of Default" hereunder; or
(h) default on the part of the Company or any Significant Subsidiary
with respect to any Indebtedness of, or guaranteed or assumed by, the
Company or any Significant Subsidiary, which default results in the
acceleration of Indebtedness in a principal amount then outstanding in
excess of U.S. $5,000,000, and such Indebtedness shall not have been
discharged or such acceleration shall not have been rescinded or annulled
for a period of thirty (30) days after there shall have been given, by
registered or certified mail, to the Company by the Trustee or to the
Company and the Trustee by the holders of not less than 25% in aggregate
principal amount of the Notes then outstanding, a written notice specifying
such default and requiring the Company to cause such Indebtedness to be
discharged or cause such default to be cured or waived or such acceleration
to be rescinded or annulled and stating that such notice is a "Notice of
Default" hereunder; or
(i) the Company or any Significant Subsidiary shall commence a
voluntary case or other proceeding seeking liquidation, reorganization or
other relief with respect to itself or its debts under any bankruptcy,
insolvency or other similar law now or hereafter in effect or seeking the
appointment of a trustee, receiver, liquidator, custodian or other similar
official of it or any substantial part of its property, or shall consent to
any such relief or to the appointment of or taking possession by any such
official in an involuntary case or other proceeding commenced against it,
or shall make a general assignment for the benefit of creditors, or shall
fail generally to pay its debts as they become due; or
(j) an involuntary case or other proceeding shall be commenced against
the Company or any Significant Subsidiary seeking liquidation,
reorganization or other relief with respect to it or its debts under any
bankruptcy, insolvency or other similar law now or hereafter in effect or
seeking the appointment of a trustee, receiver, liquidator, custodian or
other similar official of it or any substantial part of its property, and
such involuntary case or other proceeding shall remain undismissed and
unstayed for a period of ninety (90) consecutive days; then, and in each
and every such case (other than an Event of Default specified in Section
7.1(i) or (j) with respect to the Company), unless the principal of all of
the Notes shall have already become due and payable, either the Trustee or
the holders of not less than 25% in aggregate principal amount of the Notes
then outstanding hereunder determined in accordance with Section 9.4, by
notice in writing to the Company (and to the Trustee if given by
Noteholders), may declare the principal of and premium, if any, on all the
Notes and the interest accrued thereon to be due and payable immediately,
and upon any such declaration the same shall become and shall be
immediately due and payable, anything in this Indenture or in the Notes
contained to the contrary notwithstanding. If an Event of Default specified
in Section 7.1(i) or (j) occurs and is continuing with respect to the
Company, the principal of all the Notes and the interest accrued thereon
shall be immediately due and payable. This provision, however, is subject
to the conditions that if, at any time after the principal of the Notes
shall have been so declared due and payable, and before any judgment or
decree for the payment of the monies due shall have been obtained or
entered as hereinafter provided, the Company shall pay or shall deposit
with the Trustee a sum
-42-
sufficient to pay all matured installments of interest upon all Notes and
the principal of and premium, if any, on any and all Notes which shall have
become due otherwise than by acceleration (with interest on overdue
installments of interest (to the extent that payment of such interest is
enforceable under applicable law) and on such principal and premium, if
any, at the rate borne by the Notes, to the date of such payment or
deposit) and amounts due to the Trustee pursuant to Section 8.6, and if any
and all defaults under this Indenture, other than the nonpayment of
principal of and premium, if any, and accrued interest on Notes which shall
have become due by acceleration, shall have been cured or waived pursuant
to Section 7.7, then and in every such case the holders of a majority in
aggregate principal amount of the Notes then outstanding, by written notice
to the Company and to the Trustee, may waive all defaults or Events of
Default and rescind and annul such declaration and its consequences; but no
such waiver or rescission and annulment shall extend to or shall affect any
subsequent default or Event of Default, or shall impair any right
consequent thereon. The Company shall notify the Responsible Officer of the
Trustee, promptly upon becoming aware thereof, of any default or Event of
Default and shall deliver to the Trustee a statement specifying such
default or Event of Default and the action the Company has taken, is taking
or proposes to take with respect thereto.
In case the Trustee shall have proceeded to enforce any right under this
Indenture and such proceedings shall have been discontinued or abandoned because
of such waiver or rescission and annulment or for any other reason or shall have
been determined adversely to the Trustee, then and in every such case the
Company, the holders of Notes, and the Trustee shall be restored respectively to
their several positions and rights hereunder, and all rights, remedies and
powers of the Company, the holders of Notes, and the Trustee shall continue as
though no such proceeding had been instituted.
SECTION 7.2. PAYMENTS OF NOTES ON DEFAULT; SUIT THEREFOR. The Company
covenants that (a) in case default shall be made in the payment by the Company
of any installment of interest upon any of the Notes as and when the same shall
become due and payable, and such default shall have continued for a period of
thirty (30) days, or (b) in case default shall be made in the payment of the
principal of or premium, if any, on any of the Notes as and when the same shall
have become due and payable, whether at maturity of the Notes or in connection
with any redemption or repurchase, by declaration under this Indenture or
otherwise, then, upon demand of the Trustee, the Company will pay to the
Trustee, for the benefit of the holders of the Notes, the whole amount that then
shall have become due and payable on all such Notes for principal and premium,
if any, or interest, or both, as the case may be, with interest upon the overdue
principal and premium, if any, and (to the extent that payment of such interest
is enforceable under applicable law) upon the overdue installments of interest
at the rate borne by the Notes; and, in addition thereto, such further amount as
shall be sufficient to cover the costs and expenses of collection, including
reasonable compensation to the Trustee, its agents, attorneys and counsel, and
any expenses or liabilities incurred by the Trustee hereunder other than through
its negligence or bad faith. Until such demand by the Trustee, the Company may
pay the principal of and premium, if any, and interest on the Notes to the
registered holders, whether or not the Notes are overdue.
-43-
In case the Company shall fail forthwith to pay such amounts upon such
demand, the Trustee, in its own name and as trustee of an express trust, shall
be entitled and empowered to institute any actions or proceedings at law or in
equity for the collection of the sums so due and unpaid, and may prosecute any
such action or proceeding to judgment or final decree, and may enforce any such
judgment or final decree against the Company or any other obligor on the Notes
and collect in the manner provided by law out of the property of the Company or
any other obligor on the Notes wherever situated the monies adjudged or decreed
to be payable.
In the case there shall be pending proceedings for the bankruptcy or for
the reorganization of the Company or any other obligor on the Notes under Title
11 of the United States Code, or any other applicable law, or in case a
receiver, assignee or trustee in bankruptcy or reorganization, liquidator,
sequestrator or similar official shall have been appointed for or taken
possession of the Company or such other obligor, the property of the Company or
such other obligor, or in the case of any other judicial proceedings relative to
the Company or such other obligor upon the Notes, or to the creditors or
property of the Company or such other obligor, the Trustee, irrespective of
whether the principal of the Notes shall then be due and payable as therein
expressed or by declaration or otherwise and irrespective of whether the Trustee
shall have made any demand pursuant to the provisions of this Section 7.2, shall
be entitled and empowered, by intervention in such proceedings or otherwise, to
file and prove a claim or claims for the whole amount of principal, premium, if
any, and interest owing and unpaid in respect of the Notes, and, in case of any
judicial proceedings, to file such proofs of claim and other papers or documents
and to take such other actions as it may deem necessary or advisable in order to
have the claims of the Trustee and of the Noteholders allowed in such judicial
proceedings relative to the Company or any other obligor on the Notes, its or
their creditors, or its or their property, and to collect and receive any monies
or other property payable or deliverable on any such claims, and to distribute
the same after the deduction of any amounts due the Trustee under Section 8.6;
and any receiver, assignee or trustee in bankruptcy or reorganization,
liquidator, custodian or similar official is hereby authorized by each of the
Noteholders to make such payments to the Trustee, and, in the event that the
Trustee shall consent to the making of such payments directly to the
Noteholders, to pay to the Trustee any amount due it for reasonable
compensation, expenses, advances and disbursements, including agents and counsel
fees incurred by it up to the date of such distribution. To the extent that such
payment of reasonable compensation, expenses, advances and disbursements out of
the estate in any such proceedings shall be denied for any reason, payment of
the same shall be secured by a lien on, and shall be paid out of, any and all
distributions, dividends, monies, securities and other property which the
holders of the Notes may be entitled to receive in such proceedings, whether in
liquidation or under any plan of reorganization or arrangement or otherwise.
All rights of action and of asserting claims under this Indenture, or under
any of the Notes, may be enforced by the Trustee without the possession of any
of the Notes, or the production thereof on any trial or other proceeding
relative thereto, and any such suit or proceeding instituted by the Trustee
shall be brought in its own name as trustee of an express trust, and any
recovery of judgment shall, after provision for the payment of the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, be for the ratable benefit of the holders of the Notes.
-44-
In any proceedings brought by the Trustee (and in any proceedings involving
the interpretation of any provision of this Indenture to which the Trustee shall
be a party) the Trustee shall be held to represent all the holders of the Notes,
and it shall not be necessary to make any holders of the Notes parties to any
such proceedings.
SECTION 7.3. APPLICATION OF MONIES COLLECTED BY TRUSTEE. Any monies
collected by the Trustee pursuant to this Article 7 shall be applied in the
following order, at the date or dates fixed by the Trustee for the distribution
of such monies, upon presentation of the several Notes, and stamping thereon the
payment, if only partially paid, and upon surrender thereof, if fully paid:
First: To the payment of all amounts due the Trustee under Section 8.6;
Second: Subject to the provisions of Article 4, in case the principal of
the outstanding Notes shall not have become due and be unpaid, to the payment of
interest on the Notes in default in the order of the maturity of the
installments of such interest, with interest (to the extent that such interest
has been collected by the Trustee) upon the overdue installments of interest at
the rate borne by the Notes, such payments to be made ratably to the persons
entitled thereto;
Third: Subject to the provisions of Article 4, in case the principal of the
outstanding Notes shall have become due, by declaration or otherwise, and be
unpaid, to the payment of the whole amount then owing and unpaid upon the Notes
for principal and premium, if any, and interest, with interest on the overdue
principal and premium, if any, and (to the extent that such interest has been
collected by the Trustee) upon overdue installments of interest at the rate
borne by the Notes; and in case such monies shall be insufficient to pay in full
the whole amounts so due and unpaid upon the Notes, then to the payment of such
principal and premium, if any, and interest without preference or priority of
principal and premium, if any, over interest, or of interest over principal and
premium, if any, or of any installment of interest over any other installment of
interest, or of any Note over any other Note, ratably to the aggregate of such
principal and premium, if any, and accrued and unpaid interest; and
Fourth: Subject to the provisions of Article 4, to the payment of the
remainder, if any, to the Company or any other person lawfully entitled thereto.
SECTION 7.4. PROCEEDINGS BY NOTEHOLDER. No holder of any Note shall have
any right by virtue of or by availing of any provision of this Indenture to
institute any suit, action or proceeding in equity or at law upon or under or
with respect to this Indenture, or for the appointment of a receiver, trustee,
liquidator, custodian or other similar official, or for any other remedy
hereunder, unless such holder previously shall have given to the Trustee written
notice of an Event of Default and of the continuance thereof, as hereinbefore
provided, and unless also the holders of not less than 25% in aggregate
principal amount of the Notes then outstanding shall have made written request
upon the Trustee to institute such action, suit or proceeding in its own name as
Trustee hereunder and shall have offered to the Trustee such indemnity as may be
reasonably satisfactory to the Trustee against the costs, expenses and
liabilities to be incurred therein or thereby, and the Trustee for sixty (60)
days after its receipt of such notice, request and offer of indemnity, shall
have neglected or refused to institute any such action, suit or proceeding and
no direction inconsistent with such written request shall have been given to the
Trustee
-45-
pursuant to Section 7.7; it being understood and intended, and being expressly
covenanted by the taker and holder of every Note with every other taker and
holder and the Trustee, that no one or more holders of Notes shall have any
right in any manner whatever by virtue of or by availing of any provision of
this Indenture to affect, disturb or prejudice the rights of any other holder of
Notes, or to obtain or seek to obtain priority over or preference to any other
such holder, or to enforce any right under this Indenture, except in the manner
herein provided and for the equal, ratable and common benefit of all holders of
Notes (except as otherwise provided herein). For the protection and enforcement
of this Section 7.4, each and every Noteholder and the Trustee shall be entitled
to such relief as can be given either at law or in equity.
Notwithstanding any other provision of this Indenture and any provision of
any Note, the right of any holder of any Note to receive payment of the
principal of and premium, if any, and interest on such Note, on or after the
respective due dates expressed in such Note, or to institute suit for the
enforcement of any such payment on or after such respective dates against the
Company shall not be impaired or affected without the consent of such holder.
Anything in this Indenture or the Notes to the contrary notwithstanding,
the holder of any Note, without the consent of either the Trustee or the holder
of any other Note, in his own behalf and for his own benefit, may enforce, and
may institute and maintain any proceeding suitable to enforce, his rights of
conversion as provided herein.
SECTION 7.5. PROCEEDINGS BY TRUSTEE. In case of an Event of Default the
Trustee may in its discretion proceed to protect and enforce the rights vested
in it by this Indenture by such appropriate judicial proceedings as the Trustee
shall deem most effectual to protect and enforce any of such rights, either by
suit in equity or by action at law or by proceeding in bankruptcy or otherwise,
whether for the specific enforcement of any covenant or agreement contained in
this Indenture or in aid of the exercise of any power granted in this Indenture,
or to enforce any other legal or equitable right vested in the Trustee by this
Indenture or by law.
SECTION 7.6. REMEDIES CUMULATIVE AND CONTINUING. Except as provided in
the last paragraph of Section 2.6, all powers and remedies given by this Article
7 to the Trustee or to the Noteholders shall, to the extent permitted by law, be
deemed cumulative and not exclusive of any thereof or of any other powers and
remedies available to the Trustee or the holders of the Notes, by judicial
proceedings or otherwise, to enforce the performance or observance of the
covenants and agreements contained in this Indenture, and no delay or omission
of the Trustee or of any holder of any of the Notes to exercise any right or
power accruing upon any default or Event of Default occurring and continuing as
aforesaid shall impair any such right or power, or shall be construed to be a
waiver of any such default or any acquiescence therein; and, subject to the
provisions of Section 7.4, every power and remedy given by this Article 7 or by
law to the Trustee or to the Noteholders may be exercised from time to time, and
as often as shall be deemed expedient, by the Trustee or by the Noteholders.
SECTION 7.7. DIRECTION OF PROCEEDINGS AND WAIVER OF DEFAULTS BY MAJORITY
OF NOTEHOLDERS. The holders of a majority in aggregate principal amount of the
Notes at the time outstanding determined in accordance with Section 9.4 shall
have the right to direct the time, method, and place of conducting any
proceeding for any remedy
-46-
available to the Trustee or exercising any trust or power conferred on the
Trustee; PROVIDED, HOWEVER, that (a) such direction shall not be in conflict
with any rule of law or with this Indenture, and (b) the Trustee may take any
other action deemed proper by the Trustee which is not inconsistent with such
direction. The holders of a majority in aggregate principal amount of the Notes
at the time outstanding determined in accordance with Section 9.4 may on behalf
of the holders of all of the Notes waive any past default or Event of Default
hereunder and its consequences except (i) a default in the payment of interest
or premium, if any, on, or the principal of, the Notes when due, (ii) a failure
by the Company to convert any Notes into Common Stock or (iii) a default in
respect of a covenant or provisions hereof which under Article 11 cannot be
modified or amended without the consent of the holders of all Notes then
outstanding. Upon any such waiver the Company, the Trustee and the holders of
the Notes shall be restored to their former positions and rights hereunder; but
no such waiver shall extend to any subsequent or other default or Event of
Default or impair any right consequent thereon. Whenever any default or Event of
Default hereunder shall have been waived as permitted by this Section 7.7, said
default or Event of Default shall for all purposes of the Notes and this
Indenture be deemed to have been cured and to be not continuing; but no such
waiver shall extend to any subsequent or other default or Event of Default or
impair any right consequent thereon.
SECTION 7.8. NOTICE OF DEFAULTS. The Trustee shall, within ninety (90)
days after the occurrence of a default, mail to all Noteholders, as the names
and addresses of such holders appear upon the Note register, notice of all
defaults known to a Responsible Officer, unless such defaults shall have been
cured or waived before the giving of such notice; and provided that, except in
the case of default in the payment of the principal of, or premium, if any, or
interest on any of the Notes, including without limiting the generality of the
foregoing any default in the payment of any Repurchase Price or in the payment
of any amount due in connection with any redemption of Notes, then in any such
event the Trustee shall be protected in withholding such notice if and so long
as a trust committee of directors and/or Responsible Officers of the Trustee in
good faith determine that the withholding of such notice is in the interests of
the Noteholders.
SECTION 7.9. UNDERTAKING TO PAY COSTS. All parties to this Indenture
agree, and each holder of any Note by his acceptance thereof shall be deemed to
have agreed, that any court may, in its discretion, require, in any suit for the
enforcement of any right or remedy under this Indenture, or in any suit against
the Trustee for any action taken or omitted by it as Trustee, the filing by any
party litigant in such suit of an undertaking to pay the costs of such suit and
that such court may in its discretion assess reasonable costs, including
reasonable attorneys' fees, against any party litigant in such suit, having due
regard to the merits and good faith of the claims or defenses made by such party
litigant; PROVIDED that the provisions of this Section 7.9 shall not apply to
any suit instituted by the Trustee, to any suit instituted by any Noteholder, or
group of Noteholders, holding in the aggregate more than 10% in principal amount
of the Notes at the time outstanding determined in accordance with Section 9.4,
or to any suit instituted by any Noteholder for the enforcement of the payment
of the principal of or premium, if any, or interest on any Note (including, but
not limited to, the redemption price or repurchase price with respect to the
Notes being redeemed or repurchased as provided in this Indenture) on or after
the due date expressed in such Note or to any suit for the enforcement of the
right to convert any Note in accordance with the provisions of Article 15.
-47-
SECTION 7.10. DELAY OR OMISSION NOT WAIVER. No delay or omission of the
Trustee or of any holder of any Note to exercise any right or remedy accruing
upon any Event of Default shall impair any such right or remedy or constitute a
waiver of any such Event of Default or any acquiescence therein. Every right and
remedy given by this Article or by law to the Trustee or to the holders of Notes
may be exercised from time to time, and as often as may be deemed expedient, by
the Trustee or by the holders of Notes, as the case may be.
ARTICLE 8.
CONCERNING THE TRUSTEE
SECTION 8.1. DUTIES AND RESPONSIBILITIES OF TRUSTEE. The Trustee, prior
to the occurrence of an Event of Default and after the curing or waiver of all
Events of Default which may have occurred, undertakes to perform such duties and
only such duties as are specifically set forth in this Indenture. In case an
Event of Default has occurred (which has not been cured or waived) the Trustee
shall exercise such of the rights and powers vested in it by this Indenture, and
use the same degree of care and skill in their exercise, as a prudent person
would exercise or use under the circumstances in the conduct of such person's
own affairs.
No provision of this Indenture shall be construed to relieve the Trustee
from liability for its own negligent action, its own negligent failure to act or
its own willful misconduct, except that:
(a) prior to the occurrence of an Event of Default and after the
curing or waiving of all Events of Default which may have occurred:
(1) the duties and obligations of the Trustee shall be
determined solely by the express provisions of this Indenture and,
after it has been qualified thereunder, the Trust Indenture Act, and
the Trustee shall not be liable except for the performance of such
duties and obligations as are specifically set forth in this Indenture
and no implied covenants or obligations shall be read into this
Indenture and the Trust Indenture Act against the Trustee; and
(2) in the absence of bad faith and willful misconduct on
the part of the Trustee, the Trustee may conclusively rely, as to the
truth of the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the Trustee
and conforming to the requirements of this Indenture; but, in the case
of any such certificates or opinions which by any provisions hereof
are specifically required to be furnished to the Trustee, the Trustee
shall be under a duty to examine the same to determine whether or not
they conform to the requirements of this Indenture;
(b) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer or Officers of the Trustee, unless it
shall be provided that the Trustee was negligent in ascertaining the
pertinent facts;
(c) the Trustee shall not be liable to any Noteholder with respect to
any action taken or omitted to be taken by it in good faith in accordance
with the direction of the
-48-
holders of not less than a majority in principal amount of the Notes at the
time outstanding determined as provided in Section 9.4 relating to the
time, method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power conferred upon
the Trustee, under this Indenture; and
(d) whether or not therein provided, every provision of this Indenture
relating to the conduct or affecting the liability of, or affording
protection to, the Trustee shall be subject to the provisions of this
Section.
None of the provisions contained in this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur personal financial
liability in the performance of any of its duties or in the exercise of any of
its rights or powers, if there is reasonable ground for believing that the
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.
SECTION 8.2. RELIANCE ON DOCUMENTS, OPINIONS, ETC. Except as otherwise
provided in Section 8.1:
(a) the Trustee may rely and shall be protected in acting upon any
resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, order, bond, note, coupon or other paper or document
believed by it in good faith to be genuine and to have been signed or
presented by the proper party or parties;
(b) any request, direction, order or demand of the Company mentioned
herein shall be sufficiently evidenced by an Officers' Certificate (unless
other evidence in respect thereof be herein specifically prescribed); and
any resolution of the Board of Directors may be evidenced to the Trustee by
a copy thereof certified by the Secretary or an Assistant Secretary of the
Company;
(c) the Trustee may consult with counsel of its selection and any
advice of such counsel or Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken or omitted by
it hereunder in good faith and in accordance with such advice or Opinion of
Counsel;
(d) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request, order or
direction of any of the Noteholders pursuant to the provisions of this
Indenture, unless such Noteholders shall have offered to the Trustee
security or indemnity satisfactory to it against the costs, expenses and
liabilities which may be incurred therein or thereby;
(e) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture or other paper or document, but the Trustee, in its
discretion, may make such further inquiry or investigation into such facts
or matters as it may see fit, and, if the Trustee shall determine to make
such further inquiry or investigation, it shall be entitled to examine the
books, records and premises of the Company, personally or by agent or
attorney; PROVIDED, HOWEVER, that if the payment within a reasonable time
to the Trustee of the costs, expenses or liabilities likely
-49-
to be incurred by it in the making of such investigation is, in the opinion
of the Trustee, not reasonably assured to the Trustee by the security
afforded to it by the terms of this Indenture, the Trustee may require
indemnity reasonably satisfactory to the Trustee from the Noteholders
against such expenses or liability as a condition to so proceeding; the
reasonable expenses of every such examination shall be paid by the Company
or, if paid by the Trustee or any predecessor Trustee, shall be repaid by
the Company upon demand;
(f) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed by it with due
care hereunder;
(h) the Trustee shall not be liable for any action taken, suffered, or
omitted to be taken by it in good faith and reasonably believed by it to be
authorized or within the discretion or rights or powers conferred upon it
by this Indenture;
(i) the Trustee shall not be deemed to have notice of any Default or
Event of Default unless a Responsible Officer of the Trustee has actual
knowledge thereof or unless written notice of any event which is in fact
such a default is received by the Trustee at the Corporate Trust Office of
the Trustee, and such notice references the Securities and this Indenture;
(j) the rights, privileges, protections, immunities and benefits given
to the Trustee, including, without limitation, its right to be indemnified,
are extended to, and shall be enforceable by, the Trustee in each of its
capacities hereunder, and each agent, custodian and other Person employed
to act hereunder; and
(k) the Trustee may request that the Company deliver an Officers'
Certificate setting forth the names of individuals and/or titles of
officers authorized at such time to take specified actions pursuant to this
Indenture, which Officers' Certificate may be signed by any person
authorized to sign an Officers' Certificate, including any person specified
as so authorized in any such certificate previously delivered and not
superseded.
In no event shall the Trustee be liable for any consequential loss or damage of
any kind whatsoever (including but not limited to lost profits), even if the
Trustee has been advised of the likelihood of such loss or damage and regardless
of the form of action other than through the Trustee's willful misconduct or
gross negligence.
SECTION 8.3. NO RESPONSIBILITY FOR RECITALS, ETC. The recitals contained
herein and in the Notes (except in the Trustee's certificate of authentication)
shall be taken as the statements of the Company, and the Trustee assumes no
responsibility for the correctness of the same. The Trustee makes no
representations as to the validity or sufficiency of this Indenture or of the
Notes. The Trustee shall not be accountable for the use or application by the
Company of any Notes or the proceeds of any Notes authenticated and delivered by
the Trustee in conformity with the provisions of this Indenture.
SECTION 8.4. TRUSTEE, PAYING AGENTS, CONVERSION AGENTS OR REGISTRAR MAY
OWN NOTES. The Trustee, any paying agent, any conversion agent or
-50-
Note registrar, in its individual or any other capacity, may become the owner or
pledgee of Notes with the same rights it would have if it were not Trustee,
paying agent, conversion agent or Note registrar.
SECTION 8.5. MONIES TO BE HELD IN TRUST. Subject to the provisions of
Section 13.4, all monies received by the Trustee shall, until used or applied as
herein provided, be held in trust for the purposes for which they were received.
Money held by the Trustee in trust hereunder need not be segregated from other
funds except to the extent required by law. The Trustee shall be under no
liability for interest on any money received by it hereunder except as may be
agreed from time to time in writing by the Company and the Trustee.
SECTION 8.6. COMPENSATION AND EXPENSES OF TRUSTEE. The Company covenants
and agrees to pay to the Trustee from time to time, and the Trustee shall be
entitled to, such compensation for all services rendered by it hereunder in any
capacity as shall be agreed in writing between the Company and the Trustee
(which shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust), and the Company will pay or
reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances reasonably incurred or made by the Trustee in
accordance with any of the provisions of this Indenture (including the
reasonable compensation and the expenses and disbursements of its agents and
counsel and of all persons not regularly in its employ) except any such expense,
disbursement or advance as may arise from its negligence, willful misconduct or
bad faith. The Company also covenants to indemnify the Trustee in any capacity
under this Indenture and its agents and any authenticating agent for, and to
hold them harmless against, any and all loss, liability, damage, claim or
expense, including taxes (other than those based upon, measured by or determined
by the income of the Trustee), incurred without negligence, willful misconduct
or bad faith on the part of the Trustee or such agent or authenticating agent,
as the case may be, and arising out of or in connection with the acceptance or
administration of this trust or in any other capacity hereunder, including the
costs and expenses of defending themselves against any claim of liability
(whether asserted by the Company, any Holder or any other Person) in the
premises. The obligations of the Company under this Section 8.6 to compensate or
indemnify the Trustee and to pay or reimburse the Trustee for expenses,
disbursements and advances shall be secured by a lien prior to that of the Notes
upon all property and funds held or collected by the Trustee as such, except,
subject to the effect of Sections 4.3 and 7.6, funds held in trust herewith for
the benefit of the holders of particular Notes prior to the date of the accrual
of such unpaid compensation or indemnifiable claim. The obligation of the
Company under this Section shall survive the satisfaction and discharge of this
Indenture and the resignation or removal of the Trustee. The indemnification
provided in this Section 8.6 shall extend to the officers, directors, agents and
employees of the Trustee.
When the Trustee and its agents and any authenticating agent incur expenses
or render services after an Event of Default specified in Section 7.1(j) or (k)
occurs, the expenses and the compensation for the services are intended to
constitute expenses of administration under any bankruptcy, insolvency or
similar laws.
SECTION 8.7. OFFICERS' CERTIFICATE AS EVIDENCE. Except as otherwise
provided in Section 8.1, whenever in the administration of the provisions of
this Indenture the Trustee shall deem it necessary or desirable that a matter be
proved or established prior to taking
-51-
or omitting any action hereunder, such matter (unless other evidence in respect
thereof be herein specifically prescribed) may, in the absence of negligence,
willful misconduct, recklessness and bad faith on the part of the Trustee, be
deemed to be conclusively proved and established by an Officers' Certificate
delivered to the Trustee, and such Officers' Certificate, in the absence of
negligence, willful misconduct, recklessness and bad faith on the part of the
Trustee, shall be full warrant to the Trustee for any action taken or omitted by
it under the provisions of this Indenture upon the faith thereof.
SECTION 8.8. CONFLICTING INTERESTS OF TRUSTEE. If the Trustee has or
shall acquire a conflicting interest within the meaning of the Trust Indenture
Act, the Trustee shall either eliminate such interest or resign, to the extent
and in the manner provided by, and subject to the provisions of, the Trust
Indenture Act and this Indenture.
SECTION 8.9. ELIGIBILITY OF TRUSTEE. There shall at all times be a
Trustee hereunder which shall be a person that is eligible pursuant to the Trust
Indenture Act to act as such and has a combined capital and surplus (together
with its corporate parent) of at least $50,000,000. If such person publishes
reports of condition at least annually, pursuant to law or to the requirements
of any supervising or examining authority, then for the purposes of this
Section, the combined capital and surplus of such person shall be deemed to be
its combined capital and surplus as set forth in its most recent report of
condition so published. If at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section, it shall resign immediately in
the manner and with the effect hereinafter specified in this Article.
SECTION 8.10. RESIGNATION OR REMOVAL OF TRUSTEE.
(a) The Trustee may at any time resign by giving written notice of
such resignation to the Company and by mailing notice thereof to the
holders of Notes at their addresses as they shall appear on the Note
register. Upon receiving such notice of resignation, the Company shall
promptly appoint a successor trustee by written instrument, in duplicate,
executed by order of the Board of Directors, one copy of which instrument
shall be delivered to the resigning Trustee and one copy to the successor
trustee. If no successor trustee shall have been so appointed and have
accepted appointment sixty (60) days after the mailing of such notice of
resignation to the Noteholders, the resigning Trustee may petition any
court of competent jurisdiction at the expense of the Company for the
appointment of a successor trustee, or any Noteholder who has been a bona
fide holder of a Note or Notes for at least six months may, subject to the
provisions of Section 7.9, on behalf of himself and all others similarly
situated, petition any such court for the appointment of a successor
trustee. Such court may thereupon, after such notice, if any, as it may
deem proper and prescribe, appoint a successor trustee.
(b) In case at any time any of the following shall occur:
(1) the Trustee shall fail to comply with Section 8.8
within a reasonable time after written request therefor by the Company
or by any Noteholder who has been a bona fide holder of a Note or
Notes for at least six months, or
-52-
(2) the Trustee shall cease to be eligible in accordance
with the provisions of Section 8.9 and shall fail to resign after
written request therefor by the Company or by any such Noteholder, or
(3) the Trustee shall become incapable of acting, or shall
be adjudged a bankrupt or insolvent, or a receiver of the Trustee or
of its property shall be appointed, or any public officer shall take
charge or control of the Trustee or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation,
then, in any such case, the Company may by a Board resolution remove the
Trustee and appoint a successor trustee by written instrument, in
duplicate, executed by order of the Board of Directors, one copy of which
instrument shall be delivered to the Trustee so removed and one copy to the
successor trustee, or, subject to the provisions of Section 7.9, any
Noteholder who has been a bona fide holder of a Note or Notes for at least
six months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor trustee. Such court may thereupon, after
such notice, if any, as it may deem proper and prescribe, remove the
Trustee and appoint a successor trustee. If an instrument of acceptance by
a successor Trustee shall not have been delivered to the Trustee within
sixty (60) days after the giving of such notice of removal, the Trustee
being removed may petition, at the expense of the Company, any court of
competent jurisdiction for the appointment of a successor Trustee with
respect to the Securities of such series.
(c) The holders of a majority in aggregate principal amount of the
Notes at the time outstanding may at any time remove the Trustee and
nominate a successor trustee which shall be deemed appointed as successor
trustee unless within ten (10) days after notice to the Company of such
nomination the Company objects thereto, in which case the Trustee so
removed or any Noteholder, upon the terms and conditions and otherwise as
in Section 8.10(a) provided, may petition any court of competent
jurisdiction for an appointment of a successor trustee.
(d) Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section 8.10
shall become effective upon acceptance of appointment by the successor
trustee as provided in Section 8.11.
SECTION 8.11. ACCEPTANCE BY SUCCESSOR TRUSTEE. Any successor trustee
appointed as provided in Section 8.10 shall execute, acknowledge and deliver to
the Company and to its predecessor trustee an instrument accepting such
appointment hereunder, and thereupon the resignation or removal of the
predecessor trustee shall become effective and such successor trustee, without
any further act, deed or conveyance, shall become vested with all the rights,
powers, duties and obligations of its predecessor hereunder, with like effect as
if originally named as trustee herein; but, nevertheless, on the written request
of the Company or of the successor trustee, the trustee ceasing to act shall,
upon payment of any amounts then due it pursuant to the provisions of Section
8.6, execute and deliver an instrument transferring to such successor trustee
all the rights and powers of the trustee so ceasing to act. Upon request of any
such successor trustee, the Company shall execute any and all instruments in
writing for more fully and certainly vesting in and confirming to such successor
trustee all such rights and powers.
-53-
Any trustee ceasing to act shall, nevertheless, retain a lien upon all property
and funds held or collected by such trustee as such, except for funds held in
trust for the benefit of holders of particular Notes, to secure any amounts then
due it pursuant to the provisions of Section 8.6.
No successor trustee shall accept appointment as provided in this Section
8.11 unless at the time of such acceptance such successor trustee shall be
qualified under the provisions of Section 8.8 and be eligible under the
provisions of Section 8.9.
Upon acceptance of appointment by a successor trustee as provided in this
Section 8.11, each of the Company and the former trustee shall mail or cause to
be mailed notice of the succession of such trustee hereunder to the holders of
Notes at their addresses as they shall appear on the Note register. If the
Company fails to mail such notice within ten (10) days after acceptance of
appointment by the successor trustee, the successor trustee shall cause such
notice to be mailed at the expense of the Company.
SECTION 8.12. SUCCESSION BY MERGER, ETC. Any corporation or other entity
into which the Trustee may be merged or converted or with which it may be
consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any corporation or other
entity succeeding to all or substantially all of the corporate trust business of
the Trustee, shall be the successor to the Trustee hereunder without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, provided that in the case of any corporation succeeding to all
or substantially all of the corporate trust business of the Trustee such
corporation shall be qualified under the provisions of Section 8.8 and eligible
under the provisions of Section 8.9.
In case at the time such successor to the Trustee shall succeed to the
trusts created by this Indenture, any of the Notes shall have been authenticated
but not delivered, any such successor to the Trustee may adopt the certificate
of authentication of any predecessor trustee or authenticating agent appointed
by such predecessor trustee, and deliver such Notes so authenticated; and in
case at that time any of the Notes shall not have been authenticated, any
successor to the Trustee or an authenticating agent appointed by such successor
trustee may authenticate such Notes either in the name of any predecessor
trustee hereunder or in the name of the successor trustee; and in all such cases
such certificates shall have the full force which it is anywhere in the Notes or
in this Indenture provided that the certificate of the Trustee shall have;
PROVIDED, HOWEVER, that the right to adopt the certificate of authentication of
any predecessor Trustee or to authenticate Notes in the name of any predecessor
Trustee shall apply only to its successor or successors by merger, conversion or
consolidation.
SECTION 8.13. LIMITATION ON RIGHTS OF TRUSTEE AS CREDITOR. If and when the
Trustee shall be or become a creditor of the Company (or any other obligor upon
the Notes), the Trustee shall be subject to the provisions of the Trust
Indenture Act regarding the collection of the claims against the Company (or any
such other obligor).
-54-
ARTICLE 9.
CONCERNING THE NOTEHOLDERS
SECTION 9.1. ACTION BY NOTEHOLDERS. Whenever in this Indenture it is
provided that the holders of a specified percentage in aggregate principal
amount of the Notes may take any action (including the making of any demand or
request, the giving of any notice, consent or waiver or the taking of any other
action), the fact that at the time of taking any such action, the holders of
such specified percentage have joined therein may be evidenced (a) by any
instrument or any number of instruments of similar tenor executed by Noteholders
in person or by agent or proxy appointed in writing, or (b) by the record of the
holders of Notes voting in favor thereof at any meeting of Noteholders duly
called and held in accordance with the provisions of Article X, or (c) by a
combination of such instrument or instruments and any such record of such a
meeting of Noteholders. Whenever the Company or the Trustee solicits the taking
of any action by the holders of the Notes, the Company or the Trustee may fix in
advance of such solicitation, a date as the record date for determining holders
entitled to take such action. The record date shall be not more than fifteen
(15) days prior to the date of commencement of solicitation of such action.
SECTION 9.2. PROOF OF EXECUTION BY NOTEHOLDERS. Subject to the provisions
of Sections 8.1, 8.2 and 10.5, proof of the execution of any instrument by a
Noteholder or his agent or proxy shall be sufficient if made in accordance with
such reasonable rules and regulations as may be prescribed by the Trustee or in
such manner as shall be satisfactory to the Trustee. The holding of Notes shall
be proved by the Note register or by a certificate of the Note registrar. The
record of any Noteholders' meeting shall be proved in the manner provided in
Section 10.6.
SECTION 9.3. WHO ARE DEEMED ABSOLUTE OWNERS. The Company, the Trustee,
any authenticating agent, any paying agent, any conversion agent and any Note
registrar may deem the person in whose name such Note shall be registered upon
the Note register to be, and may treat him as, the absolute owner of such Note
(whether or not such Note shall be overdue and notwithstanding any notation of
ownership or other writing thereon) for the purpose of receiving payment of or
on account of the principal of, premium, if any, and interest on such Note, for
conversion of such Note and for all other purposes; and neither the Company nor
the Trustee nor any paying agent nor any conversion agent nor any Note registrar
shall be affected by any notice to the contrary. All such payments so made to
any holder for the time being, or upon his order, shall be valid, and, to the
extent of the sum or sums so paid, effectual to satisfy and discharge the
liability for monies payable upon any such Note.
SECTION 9.4. COMPANY-OWNED NOTES DISREGARDED. In determining whether the
holders of the requisite aggregate principal amount of Notes have concurred in
any direction, consent, waiver or other action under this Indenture, Notes which
are owned by the Company or any other obligor on the Notes or by any person
directly or indirectly controlling or controlled by or under direct or indirect
common control with the Company or any other obligor on the Notes shall be
disregarded and deemed not to be outstanding for the purpose of any such
determination; PROVIDED that for the purposes of determining whether the Trustee
shall be protected in relying on any such direction, consent, waiver or other
action only Notes which a Responsible Officer knows are so owned shall be so
disregarded. Notes so owned which have been pledged in good faith may be
regarded as outstanding for the purposes of this Section 9.4 if the pledgee
shall establish to the satisfaction of the Trustee the pledgee's right to vote
such Notes and that the pledgee is not the Company, any other obligor on the
Notes or a person directly or
-55-
indirectly controlling or controlled by or under direct or indirect common
control with the Company or any such other obligor. In the case of a dispute as
to such right, any decision by the Trustee taken upon the advice of counsel
shall be full protection to the Trustee. Upon request of the Trustee, the
Company shall furnish to the Trustee promptly an Officers' Certificate listing
and identifying all Notes, if any, known by the Company to be owned or held by
or for the account of any of the above described persons; and, subject to
Section 8.1, the Trustee shall be entitled to accept such Officers' Certificate
as conclusive evidence of the facts therein set forth and of the fact that all
Notes not listed therein are outstanding for the purpose of any such
determination.
SECTION 9.5. REVOCATION OF CONSENTS; FUTURE HOLDERS BOUND. At any time
prior to (but not after) the evidencing to the Trustee, as provided in Section
9.1, of the taking of any action by the holders of the percentage in aggregate
principal amount of the Notes specified in this Indenture in connection with
such action, any holder of a Note which is shown by the evidence to be included
in the Notes the holders of which have consented to such action may, by filing
written notice with the Trustee at its Corporate Trust Office and upon proof of
holding as provided in Section 9.2, revoke such action so far as concerns such
Note. Except as aforesaid, any such action taken by the holder of any Note shall
be conclusive and binding upon such holder and upon all future holders and
owners of such Note and of any Notes issued in exchange or substitution
therefor, irrespective of whether any notation in regard thereto is made upon
such Note or any Note issued in exchange or substitution therefor.
ARTICLE 10.
NOTEHOLDERS' MEETINGS
SECTION 10.1. PURPOSE OF MEETINGS. A meeting of Noteholders may be called
at any time and from time to time pursuant to the provisions of this Article 10
for any of the following purposes:
(a) to give any notice to the Company or to the Trustee or to give any
directions to the Trustee permitted under this Indenture, or to consent to
the waiving of any default or Event of Default hereunder and its
consequences, or to take any other action authorized to be taken by
Noteholders pursuant to any of the provisions of Article 7;
(b) to remove the Trustee and nominate a successor trustee pursuant to
the provisions of Article 8;
(c) to consent to the execution of an indenture or indentures
supplemental hereto pursuant to the provisions of Section 11.2;
(d) to take any other action authorized to be taken by or on behalf of
the holders of any specified aggregate principal amount of the Notes under
any other provision of this Indenture or under applicable law; or
(e) to take any other action authorized by this Indenture or under
applicable law.
-56-
SECTION 10.2. CALL OF MEETINGS BY TRUSTEE. The Trustee may at any time
call a meeting of Noteholders to take any action specified in Section 10.1, to
be held at such time and at such place in the Borough of Manhattan, The City of
New York, as the Trustee shall determine. Notice of every meeting of the
Noteholders, setting forth the time and the place of such meeting and in general
terms the action proposed to be taken at such meeting and the establishment of
any record date pursuant to Section 9.1, shall be mailed to holders of Notes at
their addresses as they shall appear on the Note register. Such notice shall
also be mailed to the Company. Such notices shall be mailed not less than twenty
(20) nor more than ninety (90) days prior to the date fixed for the meeting.
Any meeting of Noteholders shall be valid without notice if the holders of
all Notes then outstanding are present in person or by proxy or if notice is
waived before or after the meeting by the holders of all Notes outstanding, and
if the Company and the Trustee are either present by duly authorized
representatives or have, before or after the meeting, waived notice.
SECTION 10.3. QUORUM. The persons entitled to vote a majority in principal
amount of the outstanding Notes shall constitute a quorum. In the absence of a
quorum within 30 minutes of the time appointed for any such meeting, the meeting
shall, if convened at the request of Noteholders of Notes, be dissolved. In any
other case, the meeting may be adjourned for a period of not less than 10 days
as determined by the chairman of the meeting prior to the adjournment of such
meeting. In the absence of a quorum at any such adjourned meeting, such
adjourned meeting may be further adjourned for a period not less than 10 days as
determined by the chairman of the meeting prior to the adjournment of such
adjourned meeting (subject to repeated applications of this sentence). Notice of
the reconvening of any adjourned meeting shall be given as provided in Section
10.2 except that such notice need be given only once not less than five days
prior to the date on which the meeting is scheduled to be reconvened. Notice of
the reconvening of an adjourned meeting shall state expressly the percentage of
the principal amount of the outstanding Notes which shall constitute a quorum.
Subject to the foregoing, at the reconvening of any meeting adjourned for a
lack of a quorum, the Persons entitled to vote 25% in principal amount of the
outstanding Notes at the time shall constitute a quorum for the taking of any
action set forth in the notice of the original meeting.
At a meeting or an adjourned meeting duly reconvened and at which a quorum
is present as aforesaid, any resolution and all matters (except as limited by
the proviso to Section 11.2 and except to the extent Section 7.7 requires a
different vote) shall be effectively passed and decided if passed or decided by
the lesser of (i) the holders of not less than a majority in principal amount of
outstanding Notes and (ii) the persons entitled to vote not less than 66-2/3% in
principal amount of outstanding Notes represented and entitled to vote at such
meeting.
Any resolution passed or decisions taken at any meeting of holders of Notes
duly held in accordance with this Section shall be binding on all the holders of
Notes whether or not present or represented at the meeting. The Trustee shall,
in the name and at the expense of the Company, notify all the holders of Notes
of any such resolutions or decisions.
-57-
SECTION 10.4. CALL OF MEETINGS BY COMPANY OR NOTEHOLDERS. In case at any
time the Company, pursuant to a resolution of its Board of Directors, or the
holders of at least 10% in aggregate principal amount of the Notes then
outstanding, shall have requested the Trustee to call a meeting of Noteholders,
by written request setting forth in reasonable detail the action proposed to be
taken at the meeting, and the Trustee shall not have mailed the notice of such
meeting within twenty (20) days after receipt of such request, then the Company
or such Noteholders may determine the time and the place for such meeting and
may call such meeting to take any action authorized in Section 10.1, by mailing
notice thereof as provided in Section 10.2.
SECTION 10.5. QUALIFICATIONS FOR VOTING. To be entitled to vote at any
meeting of Noteholders a person shall (a) be a holder of one or more Notes on
the record date pertaining to such meeting or (b) be a person appointed by an
instrument in writing as proxy by a holder of one or more Notes. The only
persons who shall be entitled to be present or to speak at any meeting of
Noteholders shall be the persons entitled to vote at such meeting and their
counsel and any representatives of the Trustee and its counsel and any
representatives of the Company and its counsel.
SECTION 10.6. REGULATIONS. Notwithstanding any other provisions of this
Indenture, the Trustee may make such reasonable regulations as it may deem
advisable for any meeting of Noteholders, in regard to proof of the holding of
Notes and of the appointment of proxies, and in regard to the appointment and
duties of inspectors of votes, the submission and examination of proxies,
certificates and other evidence of the right to vote, and such other matters
concerning the conduct of the meeting as it shall think fit.
The Trustee shall, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called by the
Company or by Noteholders as provided in Section 10.3, in which case the Company
or the Noteholders calling the meeting, as the case may be, shall in like manner
appoint a temporary chairman. A permanent chairman and a permanent secretary of
the meeting shall be elected by vote of the holders of a majority in principal
amount of the Notes represented at the meeting and entitled to vote at the
meeting.
Subject to the provisions of Section 9.4, at any meeting each Noteholder or
proxyholder shall be entitled to one vote for each $1,000 principal amount of
Notes held or represented by him; PROVIDED, HOWEVER, that no vote shall be cast
or counted at any meeting in respect of any Note challenged as not outstanding
and ruled by the chairman of the meeting to be not outstanding. The chairman of
the meeting shall have no right to vote other than by virtue of Notes held by
him or instruments in writing as aforesaid duly designating him as the proxy to
vote on behalf of other Noteholders. Any meeting of Noteholders duly called
pursuant to the provisions of Section 10.2 or 10.3 may be adjourned from time to
time by the holders of a majority of the aggregate principal amount of Notes
represented at the meeting, whether or not constituting a quorum, and the
meeting may be held as so adjourned without further notice.
SECTION 10.7. VOTING. The vote upon any resolution submitted to any
meeting of Noteholders shall be by written ballot on which shall be subscribed
the signatures of the holders of Notes or of their representatives by proxy and
the principal amount of the Notes held or represented by them. The permanent
chairman of the meeting shall appoint two inspectors of
-58-
votes who shall count all votes cast at the meeting for or against any
resolution and who shall make and file with the secretary of the meeting their
verified written reports in duplicate of all votes cast at the meeting. A record
in duplicate of the proceedings of each meeting of Noteholders shall be prepared
by the secretary of the meeting and there shall be attached to said record the
original reports of the inspectors of votes on any vote by ballot taken thereat
and affidavits by one or more persons having knowledge of the facts setting
forth a copy of the notice of the meeting and showing that said notice was
mailed as provided in Section 10.2. The record shall show the principal amount
of the Notes voting in favor of or against any resolution. The record shall be
signed and verified by the affidavits of the permanent chairman and secretary of
the meeting and one of the duplicates shall be delivered to the Company and the
other to the Trustee to be preserved by the Trustee, the latter to have attached
thereto the ballots voted at the meeting.
Any record so signed and verified shall be conclusive evidence of the
matters therein stated.
SECTION 10.8. NO DELAY OF RIGHTS BY MEETING. Nothing in this Article 10
contained shall be deemed or construed to authorize or permit, by reason of any
call of a meeting of Noteholders or any rights expressly or impliedly conferred
hereunder to make such call, any hindrance or delay in the exercise of any right
or rights conferred upon or reserved to the Trustee or to the Noteholders under
any of the provisions of this Indenture or of the Notes.
ARTICLE 11.
SUPPLEMENTAL INDENTURES
SECTION 11.1. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF NOTEHOLDERS. The
Company, when authorized by the resolutions of the Board of Directors, and the
Trustee may from time to time and at any time enter into an indenture or
indentures supplemental hereto for one or more of the following purposes:
(a) to make provision with respect to the conversion rights of the
holders of Notes pursuant to the requirements of Section 15.6;
(b) subject to Article 4, to convey, transfer, assign, mortgage or
pledge to the Trustee as security for the Notes, any property or assets;
(c) to evidence the succession of another corporation to the Company,
or successive successions, and the assumption by the successor corporation
of the covenants, agreements and obligations of the Company pursuant to
Article 12;
(d) to add to the covenants of the Company such further covenants,
restrictions or conditions for the benefit of the holders of Notes, and to
make the occurrence, or the occurrence and continuance, of a default in any
such additional covenants, restrictions or conditions a default or an Event
of Default permitting the enforcement of all or any of the several remedies
provided in this Indenture as herein set forth; PROVIDED, HOWEVER, that in
respect of any such additional covenant, restriction or condition such
supplemental indenture may provide for a particular period of grace after
default (which
-59-
period may be shorter or longer than that allowed in the case of other
defaults) or may provide for an immediate enforcement upon such default or
may limit the remedies available to the Trustee upon such default;
(e) to provide for the issuance under this Indenture of Notes in
coupon form (including Notes registrable as to principal only) and to
provide for exchangeability of such Notes with the Notes issued hereunder
in fully registered form and to make all appropriate changes for such
purpose;
(f) to cure any ambiguity or to correct or supplement any provision
contained herein or in any supplemental indenture which may be defective or
inconsistent with any other provision contained herein or in any
supplemental indenture, or to make such other provisions in regard to
matters or questions arising under this Indenture which shall not
materially adversely affect the interests of the holders of the Notes;
(g) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Notes; or
(h) to modify, eliminate or add to the provisions of this Indenture to
such extent as shall be necessary to effect the qualifications of this
Indenture under the Trust Indenture Act, or under any similar federal
statute hereafter enacted.
The Trustee is hereby authorized to join with the Company in the execution
of any such supplemental indenture, to make any further appropriate agreements
and stipulations which may be therein contained and to accept the conveyance,
transfer and assignment of any property thereunder, but the Trustee shall not be
obligated to, but may in its discretion, enter into any supplemental indenture
which affects the Trustee's own rights, duties or immunities under this
Indenture or otherwise.
Any supplemental indenture authorized by the provisions of this Section
11.1 may be executed by the Company and the Trustee without the consent of the
holders of any of the Notes at the time outstanding, notwithstanding any of the
provisions of Section 11.2.
SECTION 11.2. SUPPLEMENTAL INDENTURES WITH CONSENT OF NOTEHOLDERS. With
the consent (evidenced as provided in Article 9) of the holders of not less than
a majority in aggregate principal amount of the Notes at the time outstanding
(determined in accordance with Section 9.4), the Company, when authorized by the
resolutions of the Board of Directors, and the Trustee may from time to time and
at any time enter into an indenture or indentures supplemental hereto for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of this Indenture or any supplemental indenture or of
modifying in any manner the rights of the holders of the Notes; PROVIDED,
HOWEVER, that no such supplemental indenture shall, without the consent of the
holders of all Notes then outstanding:
(a) extend the fixed maturity of any Note, or
(b) reduce the rate or extend the time of payment of interest on any
Note, or
-60-
(c) reduce the principal amount thereof or premium, if any, on any
Note, or
(d) reduce any amount payable on redemption or repurchase of any Note,
or
(e) impair, or change in any respect adverse to the holder of Notes,
the obligation of the Company to repurchase any Note at the option of the
holder upon the happening of a Repurchase Event, or
(f) impair or adversely affect the right of any Noteholder to
institute suit for the payment of his Note, or
(g) change the place where, or currency in which, the Notes are
payable, or
(h) impair or change in any respect adverse to the Noteholders the
right to convert the Notes into Common Stock subject to the terms set forth
herein, including Section 15.6, or
(i) modify the provisions of this Indenture with respect to the
subordination of the Notes in a manner adverse to the Noteholders, without
the consent of the holder of each Note so affected,
(j) reduce the requirements of Section 10.3 for quorum or voting or
the percentage in principal amount of the outstanding Notes of any series,
the consent of whose holders is required for any such supplemental
indenture, or the consent of whose holder is required for any waiver with
respect to such series (or compliance with certain provisions of this
Indenture or certain defaults hereunder and their consequences) provided
for in this Indenture, or
(k) modify any of the provisions of this Section or Section 7.7,
except to increase the required percentage to effect such action or to
provide that certain other provisions of this Indenture cannot be modified
or waived without the consent of the holder of each outstanding Note
affected thereby.
Upon the request of the Company, accompanied by a copy of the resolutions
of the Board of Directors certified by its Secretary or Assistant Secretary
authorizing the execution of any such supplemental indenture, and upon the
filing with the Trustee of evidence of the consent of Noteholders as aforesaid,
the Trustee shall join with the Company in the execution of such supplemental
indenture unless such supplemental indenture affects the Trustee's own rights,
duties or immunities under this Indenture or otherwise, in which case the
Trustee may in is discretion, but shall not be obligated to, enter into such
supplemental indenture.
It shall not be necessary for the consent of the Noteholders under this
Section 11.2 to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such consent shall approve the
substance thereof.
SECTION 11.3. EFFECT OF SUPPLEMENTAL INDENTURES. Any supplemental
indenture executed pursuant to the provisions of this Article 11 shall comply
with the Trust Indenture Act, as then in effect. Upon the execution of any
supplemental indenture pursuant to
-61-
the provisions of this Article 11, this Indenture shall be and be deemed to be
modified and amended in accordance therewith and the respective rights,
limitation of rights, obligations, duties and immunities under this Indenture of
the Trustee, the Company and the holders of Notes shall thereafter be
determined, exercised and enforced hereunder subject in all respects to such
modifications and amendments and all the terms and conditions of any such
supplemental indenture shall be and be deemed to be part of the terms and
conditions of this Indenture for any and all purposes.
SECTION 11.4. NOTATION ON NOTES. Notes authenticated and delivered after
the execution of any supplemental indenture pursuant to the provisions of this
Article 11 may bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company or the Trustee shall
so determine, new Notes so modified as to conform, in the opinion of the Trustee
and the Board of Directors, to any modification of this Indenture contained in
any such supplemental indenture may, at the Company's expense, be prepared and
executed by the Company, authenticated by the Trustee (or an authenticating
agent duly appointed by the Trustee pursuant to Section 17.11) and delivered in
exchange for the Notes then outstanding, upon surrender of such Notes then
outstanding.
SECTION 11.5. EVIDENCE OF COMPLIANCE OF SUPPLEMENTAL INDENTURE TO BE
FURNISHED TRUSTEE. The Trustee, subject to the provisions of Sections 8.1 and
8.2, shall receive an Officers' Certificate and an Opinion of Counsel as
conclusive evidence that any supplemental indenture executed pursuant hereto
complies with the requirements of this Article 11.
ARTICLE 12.
CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE
SECTION 12.1. COMPANY MAY CONSOLIDATE, ETC. ON CERTAIN TERMS. The Company
shall not, directly or indirectly, consolidate with or merge with or into any
other Person or sell, lease, convey or transfer all its properties and assets
substantially as an entirety, whether in a single transaction or a series of
related transactions, to any Person or group of affiliated Persons unless:
(a) either (i) in the case of a merger or consolidation that does not
involve a transfer of all or substantially all of the Company's properties
and assets, the Company is the surviving entity or (ii) in case the Company
shall consolidate with or merge into another Person or sell, lease, convey
or transfer all its properties and assets substantially as an entirety,
whether in a single transaction or a series of related transactions, to any
Person, the Person formed by such consolidation or into which the Company
is merged, or the Person which acquires by sale, conveyance or transfer, or
which leases the properties and assets of the Company substantially as an
entirety, shall be a corporation, limited liability company, partnership or
trust, shall be organized and validly existing under the laws of the United
States of America, any state thereof or the District of Columbia and shall
expressly assume, by an indenture supplemental hereto, executed and
delivered to the Trustee, in form satisfactory to the Trustee, the due and
punctual payment of the principal of, premium, if any, and interest on all
of the Notes as
-62-
applicable, and the performance or observance of every covenant of this
Indenture on the part of the Company to be performed or observed and shall
have provided for the applicable conversion rights set forth in Section
15.6 and the repurchase rights set forth in Article 16;
(b) immediately after giving effect to such transaction, no Event of
Default, and no event that after notice or lapse of time or both, would
become an Event of Default, shall have happened and be continuing; and
(c) the Company has delivered to the Trustee an Officers Certificate
and an Opinion of Counsel, each stating that such consolidation, merger,
conveyance, transfer or lease and, if a supplemental indenture is required
in connection with such transaction, such supplemental indenture comply
with this Article and that all conditions precedent herein provided for
relating to such transaction have been complied with, together with any
documents required under Article 9.
SECTION 12.2. SUCCESSOR CORPORATION TO BE SUBSTITUTED. In case of any such
consolidation, merger, sale, conveyance or lease in accordance with Section
12.1, and, where required in accordance with Section 12.1(a) upon the assumption
by the successor corporation, by supplemental indenture, executed and delivered
to the Trustee and satisfactory in form to the Trustee, of the due and punctual
payment of the principal of and premium, if any, and interest on all of the
Notes and the due and punctual performance of all of the covenants and
conditions of this Indenture to be performed by the Company, such successor
corporation shall succeed to and be substituted for the Company, with the same
effect as if it had been named herein as the party of the first part. Such
successor corporation thereupon may cause to be signed, and may issue either in
its own name or in the name of the Company any or all of the Notes issuable
hereunder which theretofore shall not have been signed by the Company and
delivered to the Trustee; and, upon the order of such successor corporation
instead of the Company and subject to all the terms, conditions and limitations
in this Indenture prescribed, the Trustee shall authenticate and shall deliver,
or cause to be authenticated and delivered, any Notes which previously shall
have been signed and delivered by the officers of the Company to the Trustee for
authentication, and any Notes which such successor corporation thereafter shall
cause to be signed and delivered to the Trustee for that purpose. All the Notes
so issued shall in all respects have the same legal rank and benefit under this
Indenture as the Notes theretofore or thereafter issued in accordance with the
terms of this Indenture as though all of such Notes had been issued at the date
of the execution hereof. In the event of any such consolidation, merger, sale,
conveyance or lease, the person named as the "Company" in the first paragraph of
this Indenture or any successor which shall thereafter have become such in the
manner prescribed in this Article 12 may be dissolved, wound up and liquidated
at any time thereafter and such person shall be released from its liabilities as
obligor and maker of the Notes and from its obligations under this Indenture.
In case of any such consolidation, merger, sale, conveyance or lease, such
changes in phraseology and form (but not in substance) may be made in the Notes
thereafter to be issued as may be appropriate.
-63-
SECTION 12.3. OPINION OF COUNSEL TO BE GIVEN TRUSTEE. The Trustee, subject
to Sections 8.1 and 8.2, shall receive an Officers' Certificate and an Opinion
of Counsel from the surviving company as conclusive evidence that any such
consolidation, merger, sale, conveyance or lease and any such assumption
complies with the provisions of this Article 12.
ARTICLE 13.
SATISFACTION AND DISCHARGE OF INDENTURE
SECTION 13.1. DISCHARGE OF INDENTURE. When (a) the Company shall deliver
to the Trustee for cancellation all Notes theretofore authenticated (other than
any Notes which have been destroyed, lost or stolen and in lieu of or in
substitution for which other Notes shall have been authenticated and delivered)
and not theretofore canceled, or (b) all the Notes not theretofore canceled or
delivered to the Trustee for cancellation shall have become due and payable, or
are by their terms to become due and payable within one year or are to be called
for redemption within one year under arrangements satisfactory to the Trustee
for the giving of notice of redemption, and the Company shall deposit with the
Trustee, in trust, funds sufficient to pay at maturity or upon redemption of all
of the Notes (other than any Notes which shall have been mutilated, destroyed,
lost or stolen and in lieu of or in substitution for which other Notes shall
have been authenticated and delivered) not theretofore canceled or delivered to
the Trustee for cancellation, including principal and premium, if any, and
interest due or to become due to such date of maturity or redemption date, as
the case may be, and if in either case the Company shall also pay or cause to be
paid all other sums payable hereunder by the Company, then this Indenture shall
cease to be of further effect (except as to (i) remaining rights of registration
of transfer, substitution and exchange and conversion of Notes, (ii) rights
hereunder of Noteholders to receive payments of principal of and premium, if
any, and interest on, the Notes and the other rights, duties and obligations of
Noteholders, as beneficiaries hereof with respect to the amounts, if any, so
deposited with the Trustee and (iii) the rights, obligations and immunities of
the Trustee hereunder), and the Trustee, on demand of the Company accompanied by
an Officers' Certificate and an Opinion of Counsel as required by Section 17.5
and at the cost and expense of the Company, shall execute proper instruments
acknowledging satisfaction of and discharging this Indenture; the Company,
however, hereby agreeing to reimburse the Trustee for any costs or expenses
thereafter reasonably and properly incurred by the Trustee and to compensate the
Trustee for any services thereafter reasonably and properly rendered by the
Trustee in connection with this Indenture or the Notes.
SECTION 13.2. DEPOSITED MONIES TO BE HELD IN TRUST BY TRUSTEE. Subject to
Section 13.4, all monies deposited with the Trustee pursuant to Section 13.1
shall be held in trust and applied by it to the payment, notwithstanding the
provisions of Article 4, either directly or through any paying agent (including
the Company if acting as its own paying agent), to the holders of the particular
Notes for the payment or redemption of which such monies have been deposited
with the Trustee, of all sums due and to become due thereon for principal and
interest and premium, if any.
SECTION 13.3. PAYING AGENT TO REPAY MONIES HELD. Upon the satisfaction and
discharge of this Indenture, all monies then held by any paying agent of the
Notes (other than the Trustee) shall, upon demand of the Company, be repaid to
it or paid to the Trustee, and
-64-
thereupon such paying agent shall be released from all further liability with
respect to such monies.
SECTION 13.4. RETURN OF UNCLAIMED MONIES. Subject to the requirements of
applicable law, any monies deposited with or paid to the Trustee for payment of
the principal of, premium, if any, or interest on Notes and not applied but
remaining unclaimed by the holders of Notes for two years after the date upon
which the principal of, premium, if any, or interest on such Notes, as the case
may be, shall have become due and payable, shall be repaid to the Company by the
Trustee on demand and all liability of the Trustee shall thereupon cease with
respect to such monies; and the holder of any of the Notes shall thereafter look
only to the Company for any payment which such holder may be entitled to collect
unless an applicable abandoned property law designates another person.
SECTION 13.5. REINSTATEMENT. If (i) the Trustee or the paying agent is
unable to apply any money in accordance with Section 13.2 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 Notes so request by written
notice to the Trustee, the Company's obligations under this Indenture and the
Notes shall be revived and reinstated as though no deposit had occurred pursuant
to Section 13.1 until such time as the Trustee or the paying agent is permitted
to apply all such money in accordance with Section 13.2; PROVIDED, HOWEVER, that
if the Company makes any payment of interest on or principal of any Note
following the reinstatement of its obligations, the Company shall be subrogated
to the rights of the holders of such Notes to receive such payment from the
money held by the Trustee or paying agent.
ARTICLE 14.
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS
SECTION 14.1. INDENTURE AND NOTES SOLELY CORPORATE OBLIGATIONS. No
recourse for the payment of the principal of or premium, if any, or interest on
any Note, or for any claim based thereon or otherwise in respect thereof, and no
recourse under or upon any obligation, covenant or agreement of the Company in
this Indenture or in any supplemental indenture or in any Note, or because of
the creation of any indebtedness represented thereby, shall be had against any
incorporator, stockholder, employee, agent, officer or director or subsidiary,
as such, past, present or future, of the Company or of any successor
corporation, either directly or through the Company or any successor
corporation, whether by virtue of any constitution, statute or rule of law, or
by the enforcement of any assessment or penalty or otherwise; it being expressly
understood that all such liability is hereby expressly waived and released as a
condition of, and as a consideration for, the execution of this Indenture and
the issue of the Notes.
-65-
ARTICLE 15.
CONVERSION OF NOTES
SECTION 15.1. RIGHT TO CONVERT. Subject to and upon compliance with the
provisions of this Indenture, the holder of any Note shall have the right, at
his option, at any time following the date of original issuance of the Notes
and prior to the close of business on June 18, 2009 (except that, with
respect to any Note or portion of a Note which shall be called for
redemption, such right shall terminate, except as provided in the fifth
paragraph of Section 15.2 and Section 3.4, at the close of business on the
Business Day next preceding the date fixed for redemption or repurchase of
such Note or portion of a Note unless the Company shall default in payment
due upon redemption or repurchase, as applicable, thereof) to convert the
principal amount of any such Note, or any portion of such principal amount
which is $1,000 or an integral multiple thereof, into that number of fully
paid and non-assessable shares of Common Stock (as such shares shall then be
constituted) obtained by dividing the principal amount of the Note or portion
thereof surrendered for conversion by the Conversion Price in effect at such
time, by surrender of the Note so to be converted in whole or in part in the
manner provided in Section 15.2. A holder of Notes is not entitled to any
rights of a holder of Common Stock until such holder has converted his Notes
to Common Stock, and only to the extent such Notes are deemed to have been
converted to Common Stock under this Article 15. A Note with respect to which
a holder has delivered a notice in accordance with Section 16.2 regarding
such holder's election to require the Company to repurchase such holder's
Notes following the occurrence of a Repurchase Event may be converted in
accordance with this Article 15 only if such holder withdraws such notice by
delivering a written notice of withdrawal to the Company prior to the close
of business on last Business Day prior to the day fixed for repurchase.
SECTION 15.2. EXERCISE OF CONVERSION PRIVILEGE; ISSUANCE OF COMMON STOCK
ON CONVERSION; NO ADJUSTMENT FOR INTEREST OR DIVIDENDS. In order to exercise the
conversion privilege with respect to any Note in definitive form, the holder of
any such Note to be converted in whole or in part shall surrender such Note,
duly endorsed, at an office or agency maintained by the Company pursuant to
Section 5.2, accompanied by the funds, if any, required by the penultimate
paragraph of this Section 15.2, and shall give written notice of conversion in
the form provided on the Notes (or such other notice which is acceptable to the
Company) to the office or agency that the holder elects to convert such Note or
such portion thereof specified in said notice. Such notice shall also state the
name or names (with address) in which the certificate or certificates for shares
of Common Stock which shall be issuable on such conversion shall be issued, and
shall be accompanied by transfer taxes, if required pursuant to Section 15.7.
Each such Note surrendered for conversion shall, unless the shares issuable on
conversion are to be issued in the same name as the registration of such Note,
be duly endorsed by, or be accompanied by instruments of transfer in form
satisfactory to the Company duly executed by, the holder or his duly authorized
attorney.
In order to exercise the conversion privilege with respect to any interest
in the Global Note, the beneficial holder must complete the appropriate
instruction form for conversion pursuant to the Depositary's book-entry
conversion program, deliver by book-entry delivery an interest in the Global
Note, furnish appropriate endorsements and transfer documents if required by the
Company or the Trustee or conversion agent, and pay the funds, if any, required
by the penultimate paragraph of this Section 15.2 and any transfer taxes, if
required pursuant to Section 15.7.
-66-
As promptly as practicable after satisfaction of the requirements for
conversion set forth above, subject to compliance with any restrictions on
transfer if shares issuable on conversion are to be issued in a name other than
that of the Noteholder (as if such transfer were a transfer of the Note or Notes
(or portion thereof) so converted), the Company shall issue and shall deliver to
such holder at the office or agency maintained by the Company for such purpose
pursuant to Section 5.2, a certificate or certificates for the number of full
shares of Common Stock issuable upon the conversion of such Note or portion
thereof in accordance with the provisions of this Article and a check or cash in
respect of any fractional interest in respect of a share of Common Stock arising
upon such conversion, as provided in Section 15.3 (which payment, if any, shall
be paid no later than five Business Days after satisfaction of the requirements
for conversion set forth above). In case any Note of a denomination greater than
$1,000 shall be surrendered for partial conversion, and subject to Section 2.3,
the Company shall execute and the Trustee shall authenticate and deliver to the
holder of the Note so surrendered, without charge to him, a new Note or Notes in
authorized denominations in an aggregate principal amount equal to the
unconverted portion of the surrendered Note.
Each conversion shall be deemed to have been effected as to any such Note
(or portion thereof) on the date on which the requirements set forth above in
this Section 15.2 have been satisfied as to such Note (or portion thereof), and
the person in whose name any certificate or certificates for shares of Common
Stock shall be issuable upon such conversion shall be deemed to have become on
said date the holder of record of the shares represented thereby; PROVIDED,
HOWEVER, that any such surrender on any date when the stock transfer books of
the Company shall be closed shall constitute the person in whose name the
certificates are to be issued as the record holder thereof for all purposes on
the next succeeding day on which such stock transfer books are open, but such
conversion shall be at the Conversion Price in effect on the date upon which
such Note shall be surrendered.
Any Note or portion thereof surrendered for conversion during the period
from the close of business on the record date for any interest payment date
through the opening of business on the Business Day next preceding such interest
payment date shall (unless such Note or portion thereof being converted shall
have been called for redemption pursuant to a redemption notice mailed to the
Noteholders in accordance with Section 3.2 or eligible for repurchase pursuant
to a Company Notice mailed to the Noteholders in accordance with Section 16.2)
be accompanied by payment, in New York Clearing House funds or other funds
acceptable to the Company, of an amount equal to the interest otherwise payable
on such interest payment date on the principal amount being converted; PROVIDED,
HOWEVER, that no such payment need be made if there shall exist at the time of
conversion a default in the payment of interest on the Notes. Except as provided
above in this Section 15.2, no adjustment shall be made for interest accrued on
any Note converted or for dividends on any shares issued upon the conversion of
such Note as provided in this Article.
Upon the conversion of an interest in the Global Note, the Trustee, or the
Custodian at the direction of the Trustee, shall make a notation on the Global
Note as to the reduction in the principal amount represented thereby.
SECTION 15.3. CASH PAYMENTS IN LIEU OF FRACTIONAL SHARES. No fractional
shares of Common Stock or scrip representing fractional shares shall be issued
upon
-67-
conversion of Notes. If more than one Note shall be surrendered for conversion
at one time by the same holder, the number of full shares which shall be
issuable upon conversion shall be computed on the basis of the aggregate
principal amount of the Notes (or specified portions thereof to the extent
permitted hereby) so surrendered for conversion. If any fractional share of
stock otherwise would be issuable upon the conversion of any Note or Notes, the
Company shall make an adjustment therefor in cash at the current market value
thereof to the holder of Notes. The current market value of a share of Common
Stock shall be the Closing Price on the first Trading Day immediately preceding
the day on which the Notes (or specified portions thereof) are deemed to have
been converted and such Closing Price shall be determined as provided in Section
15.5(h).
SECTION 15.4. CONVERSION PRICE. The conversion price shall be as specified
in the form of Note (herein called the "Conversion Price") attached as Exhibit A
hereto, subject to adjustment as provided in this Article 15.
SECTION 15.5. ADJUSTMENT OF CONVERSION PRICE. The Conversion Price shall
be adjusted from time to time by the Company as follows:
(a) In case the Company shall hereafter pay a dividend or make a
distribution on any class of capital stock of the Company payable in shares
of Common Stock, the Conversion Price in effect at the opening of business
on the date following the date fixed for the determination of stockholders
entitled to receive such dividend or other distribution shall be reduced by
multiplying such Conversion Price by a fraction of which the numerator
shall be the number of shares of Common Stock outstanding at the close of
business on the Record Date (as defined in Section 15.5(h)) fixed for such
determination and the denominator shall be the sum of such number of shares
and the total number of shares constituting such dividend or other
distribution, such reduction to become effective immediately after the
opening of business on the day following the Record Date. If any dividend
or distribution of the type described in this Section 15.5(a) is declared
but not so paid or made, the Conversion Price shall again be adjusted to
the Conversion Price which would then be in effect if such dividend or
distribution had not been declared.
(b) In case the Company shall issue rights, options or warrants to all
holders of its outstanding shares of Common Stock (other than any rights,
options or warrants that by their terms will also be issued to any
Noteholder upon conversion of a Note into Common Stock without any action
required by the Company or any other person) entitling them to subscribe
for or purchase shares of Common Stock at a price per share less than the
Current Market Price (as defined in Section 15.5(h)) on the Record Date
fixed for the determination of stockholders entitled to receive such
rights, options or warrants, the Conversion Price shall be adjusted so that
the same shall equal the price determined by multiplying the Conversion
Price in effect at the opening of business on the date after such Record
Date by a fraction of which the numerator shall be the number of shares of
Common Stock outstanding at the close of business on the Record Date plus
the number of shares which the aggregate offering price of the total number
of shares so offered for subscription or purchase would purchase at such
Current Market Price, and of which the denominator shall be the number of
shares of Common Stock outstanding on
-68-
the close of business on the Record Date plus the total number of
additional shares of Common Stock so offered for subscription or purchase.
Such adjustment shall become effective immediately after the opening of
business on the day following the Record Date fixed for determination of
stockholders entitled to receive such rights or warrants. To the extent
that shares of Common Stock are not delivered pursuant to such rights,
options or warrants, upon the expiration or termination of such rights or
warrants the Conversion Price shall be readjusted to the Conversion Price
which would then be in effect had the adjustments made upon the issuance of
such rights or warrants been made on the basis of delivery of only the
number of shares of Common Stock actually delivered. In the event that such
rights or warrants are not so issued, the Conversion Price shall again be
adjusted to be the Conversion Price which would then be in effect if such
date fixed for the determination of stockholders entitled to receive such
rights or warrants had not been fixed. In determining whether any rights or
warrants entitle the holders to subscribe for or purchase shares of Common
Stock at less than such Current Market Price, and in determining the
aggregate offering price of such shares of Common Stock, there shall be
taken into account any consideration received for such rights or warrants,
the value of such consideration, if other than cash, to be determined by
the Board of Directors.
Not in limitation of the foregoing, in the event that the Company
implements a stockholder rights plan, such rights plan shall provide that upon
conversion of the Notes the holders will receive, in addition to the Common
Stock issuable upon such conversion, the rights issued under such rights plan
(notwithstanding the occurrence of an event causing such rights to separate from
the Common Stock at or prior to the time of conversion). Any distribution of
rights, options or warrants pursuant to a stockholder rights plan complying with
the requirements set forth in the immediately preceding sentence of this
paragraph shall not constitute a distribution of rights, options or warrants for
the purposes of this Section 15.5(d).
Rights, options or warrants distributed by the Company to all holders of
Common Stock entitling the holders thereof to subscribe for or purchase shares
of the Company's capital stock (either initially or under certain
circumstances), which rights, options or warrants, until the occurrence of a
specified event or events ("Trigger Event"): (i) are deemed to be transferred
with such shares of Common Stock; (ii) are not exercisable; and (iii) are also
issued in respect of future issuances of Common Stock, shall be deemed not to
have been distributed for purposes of this Section 15.5(b) (and no adjustment to
the Conversion Price under this Section 15.5(b) will be required) until the
occurrence of the earliest Trigger Event. If such right, option or warrant is
subject to subsequent events, upon the occurrence of which such right or warrant
shall become exercisable to purchase different securities, evidences of
indebtedness or other assets or entitle the holder to purchase a different
number or amount of the foregoing or to purchase any of the foregoing at a
different purchase price, then the occurrence of each such event shall be deemed
to be the date of issuance and record date with respect to a new right, option
or warrant (and a termination or expiration of the existing right, option or
warrant without exercise by the holder thereof). In addition, in the event of
any distribution (or deemed distribution) of rights, options or warrants, or any
Trigger Event or other event (of the type described in the preceding sentence)
with respect thereto, that resulted in an adjustment to the Conversion Price
under this Section 15.5(b), (1) in the case of any such rights, options or
warrants which shall all have been redeemed or repurchased without exercise by
any holders thereof, the Conversion Price shall be readjusted upon such final
redemption or repurchase to give effect to such distribution or Trigger
-69-
Event, as the case may be, as though it were a cash distribution, equal to the
per share redemption or repurchase price received by a holder of Common Stock
with respect to such rights or warrants (assuming such holder had retained such
rights, options or warrants), made to all holders of Common Stock as of the date
of such redemption or repurchase, and (2) in the case of such rights, options or
warrants all of which shall have expired or been terminated without exercise,
the Conversion Price shall be readjusted as if such rights and warrants had
never been issued.
(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 outstanding shares of Common Stock shall be combined
into a smaller number of shares of Common Stock, the Conversion Price in
effect at the opening of business on the day following the day upon which
such combination becomes effective shall be proportionately increased, such
reduction or increase, as the case may be, to become effective immediately
after the opening of business on the day following the day upon which such
subdivision or combination becomes effective.
(d) In case the Company shall, by dividend or otherwise, distribute to
all holders of its Common Stock shares of any class of capital stock of the
Company (other than any dividends or distributions to which Section 15.5(a)
applies) or evidences of its indebtedness, cash or other assets (including
securities, but excluding (1) any rights, options or warrants referred to
in Section 15.5(b) and, (2) dividends and distributions exclusively in cash
(the foregoing hereinafter in this Section 15.5(d) called the
"Securities")), unless the Company elects to reserve such Securities for
distribution to the Noteholders upon conversion of the Notes so that any
such holder converting Notes will receive upon such conversion, without any
additional action on the part of the Company or the Noteholder and in
addition to the shares of Common Stock to which such holder is entitled,
the amount and kind of such Securities which such holder would have
received if such holder had converted its Notes into Common Stock
immediately prior to the Record Date (as defined in Section 15.5(h) for
such distribution of the Securities) then, in each such case, the
Conversion Price shall be reduced so that the same shall be equal to the
price determined by multiplying the Conversion Price in effect immediately
prior to the close of business on the Record Date (as defined in Section
15.5(h)) with respect to such distribution by a fraction of which the
numerator shall be the Current Market Price (determined as provided in
Section 15.5(h)) on such date less the fair market value (as determined by
the Board of Directors, whose determination shall be conclusive and
described in a Board Resolution) on such date of the portion of the
Securities so distributed applicable to one share of Common Stock and the
denominator shall be such Current Market Price, such reduction to become
effective immediately prior to the opening of business on the day following
the Record Date; PROVIDED, HOWEVER, that in the event the then fair market
value (as so determined) of the portion of the Securities so distributed
applicable to one share of Common Stock is equal to or greater than the
Current Market Price on the Record Date, in lieu of the foregoing
adjustment, adequate provision shall be made so that each Noteholder shall
have the right to receive upon conversion of a Note (or any portion
thereof) the amount of Securities such holder
-70-
would have received had such holder converted such Note (or portion
thereof) immediately prior to such Record Date. In the event that such
dividend or distribution is not so paid or made, the Conversion Price shall
again be adjusted to be the Conversion Price which would then be in effect
if such dividend or distribution had not been declared. If the Board of
Directors determines the fair market value of any distribution for purposes
of this Section 15.5(d) by reference to the actual or when issued trading
market for any securities comprising all or part of such distribution, it
must in doing so consider the prices in such market over the same period
(the "Reference Period") used in computing the Current Market Price
pursuant to Section 15.5(h) to the extent possible, unless the Board of
Directors in a Board Resolution determines in good faith that determining
the fair market value during the Reference Period would not be in the best
interest of the Noteholder.
For purposes of this Section 15.5(d) and Sections 15.5(a) and (b), any
dividend or distribution to which this Section 15.5(d) is applicable that also
includes shares of Common Stock, or rights, options or warrants to subscribe for
or purchase shares of Common Stock to which Section 15.5(b) applies (or both),
shall be deemed instead to be (1) a dividend or distribution of the evidences of
indebtedness, assets, shares of capital stock, rights or warrants other than
such shares of Common Stock or rights or warrants to which Section 15.5(b)
applies (and any Conversion Price reduction required by this Section 15.5(d)
with respect to such dividend or distribution shall then be made) immediately
followed by (2) a dividend or distribution of such shares of Common Stock or
such rights or warrants (and any further Conversion Price reduction required by
Sections 15.5(a) and (b) with respect to such dividend or distribution shall
then be made, except (A) the Record Date of such dividend or distribution shall
be substituted as "the date fixed for the determination of stockholders entitled
to receive such dividend or other distribution", "Record Date fixed for such
determination" and "Record Date" within the meaning of Section 15.5(a) and as
"the date fixed for the determination of stockholders entitled to receive such
rights or warrants", "the Record Date fixed for the determination of the
stockholders entitled to receive such rights or warrants" and "such Record Date"
within the meaning of Section 15.5(b) and (B) any shares of Common Stock
included in such dividend or distribution shall not be deemed "outstanding at
the close of business on the date fixed for such determination" within the
meaning of Section 15.5(a).
(e) In case the Company shall, by dividend or otherwise, distribute to
all holders of its Common Stock cash (excluding any cash that is
distributed upon a merger or consolidation to which Section 15.6 applies or
as part of a distribution referred to in Section 15.5(d)), in an aggregate
amount that, combined together with (1) the aggregate amount of any other
such distributions to all holders of its Common Stock made exclusively in
cash within the twelve (12) months preceding the date of payment of such
distribution, and in respect of which no adjustment pursuant to this
Section 15.5(e) has been made, and (2) the aggregate of any cash plus the
fair market value (as determined by the Board of Directors, whose
determination shall be conclusive and described in a Board Resolution) of
consideration payable in respect of any tender offer by the Company or any
of its subsidiaries for all or any portion of the Common Stock concluded
within the twelve (12) months preceding the date of payment of such
distribution, and in respect of which no adjustment pursuant to Section
15.5(f) has been made, exceeds 10% of the product of the Current Market
Price (determined as provided in Section 15.5(h)) on the
-71-
Record Date with respect to such distribution times the number of shares of
Common Stock outstanding on such date, then, and in each such case,
immediately after the close of business on such date, the Conversion Price
shall be reduced so that the same shall equal the price determined by
multiplying the Conversion Price in effect immediately prior to the close
of business on such Record Date by a fraction (i) the numerator of which
shall be equal to the Current Market Price on the Record Date less an
amount equal to the quotient of (x) the excess of such combined amount over
such 10% and (y) the number of shares of Common Stock outstanding on the
Record Date and (ii) the denominator of which shall be equal to the Current
Market Price on such date; PROVIDED, HOWEVER, that in the event the portion
of the cash so distributed applicable to one share of Common Stock is equal
to or greater than the Current Market Price of the Common Stock on the
Record Date, in lieu of the foregoing adjustment, adequate provision shall
be made so that each Noteholder shall have the right to receive upon
conversion of a Note (or any portion thereof) the amount of cash such
holder would have received had such holder converted such Note (or portion
thereof) immediately prior to such Record Date. In the event that such
dividend or distribution is not so paid or made, the Conversion Price shall
again be adjusted to be the Conversion Price which would then be in effect
if such dividend or distribution had not been declared. Any cash
distribution to all holders of Common Stock as to which the Company makes
the election permitted by Section 15.5(n) and as to which the Company has
complied with the requirements of such Section shall be treated as not
having been made for all purposes of this Section 15.5(e)).
(f) In case a tender offer made by the Company or any Subsidiary for
all or any portion of the Common Stock shall expire and such tender offer
(as amended upon the expiration thereof) shall require the payment to
stockholders (based on the acceptance (up to any maximum specified in the
terms of the tender offer) of Purchased Shares (as defined below)) of an
aggregate consideration having a fair market value (as determined by the
Board of Directors, whose determination shall be conclusive and described
in a Board Resolution) that combined together with (1) the aggregate of the
cash plus the fair market value (as determined by the Board of Directors,
whose determination shall be conclusive and described in a Board
Resolution), as of the expiration of such tender offer, of consideration
payable in respect of any other tender offers, by the Company or any of its
subsidiaries for all or any portion of the Common Stock expiring within the
twelve (12) months preceding the expiration of such tender offer and in
respect of which no adjustment pursuant to this Section 15.5(f) has been
made and (2) the aggregate amount of any distributions to all holders of
the Company's Common Stock made exclusively in cash within twelve (12)
months preceding the expiration of such tender offer and in respect of
which no adjustment pursuant to Section 15.5(e) has been made, exceeds 10%
of the product of the Current Market Price (determined as provided in
Section 15.5(h)) as of the last time (the "Expiration Time") tenders could
have been made pursuant to such tender offer (as it may be amended) times
the number of shares of Common Stock outstanding (including any tendered
shares) on the Expiration Time, then, and in each such case, immediately
prior to the opening of business on the day after the date of the
Expiration Time, the Conversion Price shall be adjusted so that the same
shall equal the price determined by multiplying the Conversion Price in
effect immediately prior to close of business on the date of the Expiration
Time by a fraction of which the numerator shall
-72-
be the number of shares of Common Stock outstanding (including any tendered
shares) on the Expiration Time multiplied by the Current Market Price of
the Common Stock on the Trading Day next succeeding the Expiration Time and
the denominator shall be the sum of (x) the fair market value (determined
as aforesaid) of the aggregate consideration payable to stockholders based
on the acceptance (up to any maximum specified in the terms of the tender
offer) of all shares validly tendered and not withdrawn as of the
Expiration Time (the shares deemed so accepted, up to any such maximum,
being referred to as the "Purchased Shares") and (y) the product of the
number of shares of Common Stock outstanding (less any Purchased Shares) on
the Expiration Time and the Current Market Price of the Common Stock on the
Trading Day next succeeding the Expiration Time, such reduction (if any) to
become effective immediately prior to the opening of business on the day
following the Expiration Time. In the event that the Company is obligated
to purchase shares pursuant to any such tender offer, but the Company is
permanently prevented by applicable law from effecting any such purchases
or all such purchases are rescinded, the Conversion Price shall again be
adjusted to be the Conversion Price which would then be in effect if such
tender offer had not been made. If the application of this Section 15.5(f)
to any tender offer would result in an increase in the Conversion Price, no
adjustment shall be made for such tender offer under this Section 15.5(f).
Any cash distribution to all holders of Common Stock as to which the
Company has made the election permitted by Section 15.5(n) and as to which
the Company has complied with the requirements of such Section shall be
treated as not having been made for all purposes of this Section 15.5(f).
(g) In case of a tender or exchange offer made by a person other than
the Company or any Subsidiary for an amount which increases the offeror's
ownership of Common Stock to more than 25% of the Common Stock outstanding
and shall involve the payment by such person of consideration per share of
Common Stock having a fair market value (as determined by the Board of
Directors), whose determination shall be conclusive, and described in a
Board Resolution at the last time (the "Expiration Time") tenders or
exchanges may be made pursuant to such tender or exchange offer (as it
shall have been amended) that exceeds the Current Market Price of the
Common Stock on the Trading Day next succeeding the Expiration Time, and in
which, as of the Expiration Time the Board of Directors is not recommending
rejection of the offer, the Conversion Price shall be reduced so that the
same shall equal the price determined by multiplying the Conversion Price
in effect immediately prior to the Expiration Time by a fraction of which
the numerator shall be the number of shares of Common Stock outstanding
(including any tendered or exchanged shares) on the Expiration Time
multiplied by the current Market Price of the Common Stock on the Trading
Day next succeeding the Expiration Time and the denominator shall be the
sum of (x) the fair market value (determined as aforesaid) of the aggregate
consideration payable to stockholders based on the acceptance (up to any
maximum specified in the terms of the tender or exchange offer) of all
shares validly tendered or exchanged and not withdrawn as of the Expiration
Time (the shares deemed so accepted, up to any such maximum, being referred
to as the "Purchased Shares") and (y) the product of the number of shares
of Common Stock outstanding (less any Purchased Shares) on the Expiration
Time and the Current Market Price of the Common Stock on the Trading Day
next succeeding the Expiration Time, such reduction to become effective
immediately prior to the opening of business on the
-73-
day following the Expiration Time. In the event that such person is
obligated to purchase shares pursuant to any such tender or exchange offer,
but such person is permanently prevented by applicable law from effecting
any such purchases or all such purchases are rescinded, the Conversion
Price shall again be adjusted to be the Conversion Price which would then
be in effect if such tender or exchange offer had not been made.
Notwithstanding the foregoing, the adjustment described in this Section
15.5(g) shall not be made if, as of the Expiration Time, the offering
documents with respect to such offer disclose a plan or intention to cause
the Company to engage in any transaction described in Article 12.
(h) For purposes of this Section 15.5, the following terms shall have
the meaning indicated:
(1) "Closing Price" with respect to any securities on any
day shall mean the closing sale price regular way on such day or, in
case no such sale takes place on such day, the average of the reported
closing bid and asked prices, regular way, in each case on the Nasdaq
National Market or New York Stock Exchange, as applicable, or, if such
security is not listed or admitted to trading on such National Market
or Exchange, on the principal national security exchange or quotation
system on which such security is quoted or listed or admitted to
trading, or, if not quoted or listed or admitted to trading on any
national securities exchange or quotation system, the average of the
closing bid and asked prices of such security on the over-the-counter
market on the day in question as reported by the National Quotation
Bureau Incorporated, or a similar generally accepted reporting
service, or if not so available, in such manner as furnished by any
New York Stock Exchange member firm selected from time to time by the
Board of Directors for that purpose, or a price determined in good
faith by the Board of Directors, whose determination shall be
conclusive and described in a Board Resolution.
(2) "Current Market Price" shall mean the average of the
daily Closing Prices per share of Common Stock for the ten (10)
consecutive Trading Days immediately prior to the date in question;
PROVIDED, HOWEVER, that (1) if the "ex" date (as hereinafter defined)
for any event (other than the issuance or distribution requiring such
computation) that requires an adjustment to the Conversion Price
pursuant to Section 15.5(a), (b), (c), (d), (e), (f) or (g) occurs
during such ten (10) consecutive Trading Days, the Closing Price for
each Trading Day prior to the "ex" date for such other event shall be
adjusted by multiplying such Closing Price by the same fraction by
which the Conversion Price is so required to be adjusted as a result
of such other event, (2) if the "ex" date for any event (other than
the issuance or distribution requiring such computation) that requires
an adjustment to the Conversion Price pursuant to Section 15.5(a),
(b), (c), (d), (e), (f) or (g) occurs on or after the "ex" date for
the issuance or distribution requiring such computation and prior to
the day in question, the Closing Price for each Trading Day on and
after the "ex" date for such other event shall be adjusted by
multiplying such Closing Price by the reciprocal of the fraction by
which the Conversion Price is so required to be
-74-
adjusted as a result of such other event, and (3) if the "ex" date for
the issuance or distribution requiring such computation is prior to
the day in question, after taking into account any adjustment required
pursuant to clause (1) or (2) of this proviso, the Closing Price for
each Trading Day on or after such "ex" date shall be adjusted by
adding thereto the amount of any cash and the fair market value (as
determined by the Board of Directors in a manner consistent with any
determination of such value for purposes of Section 15.5(d), (f) or
(g), whose determination shall be conclusive and described in a Board
Resolution) of the evidences of indebtedness, shares of capital stock
or assets being distributed applicable to one share of Common Stock as
of the close of business on the day before such "ex" date. For
purposes of any computation under Sections 15.5(f) or (g), the Current
Market Price of the Common Stock on any date shall be deemed to be the
average of the daily Closing Prices per share of Common Stock for such
day and the next two succeeding Trading Days; PROVIDED, HOWEVER, that
if the "ex" date for any event (other than the tender offer requiring
such computation) that requires an adjustment to the Conversion Price
pursuant to Section 15.5(a), (b), (c), (d), (e), (f) and (g) occurs on
or after the Expiration Time for the tender or exchange offer
requiring such computation and prior to the day in question, the
Closing Price for each Trading Day on and after the "ex" date for such
other event shall be adjusted by multiplying such Closing Price by the
reciprocal of the fraction by which the Conversion Price is so
required to be adjusted as a result of such other event. For purposes
of this paragraph, the term "ex" date, (1) when used with respect to
any issuance or distribution, means the first date on which the Common
Stock trades regular way on the relevant exchange or in the relevant
market from which the Closing Price was obtained without the right to
receive such issuance or distribution, (2) when used with respect to
any subdivision or combination of shares of Common Stock, means the
first date on which the Common Stock trades regular way on such
exchange or in such market after the time at which such subdivision or
combination becomes effective, and (3) when used with respect to any
tender or exchange offer means the first date on which the Common
Stock trades regular way on such exchange or in such market after the
Expiration Time of such offer. Notwithstanding the foregoing, whenever
successive adjustments to the Conversion Price are called for pursuant
to this Section 15.5, such adjustments shall be made to the Current
Market Price as may be necessary or appropriate to effectuate the
intent of this Section 15.5 and to avoid unjust or inequitable results
as determined in good faith by the Board of Directors.
(3) "fair market value" shall mean the amount which a
willing buyer would pay a willing seller in an arm's length
transaction.
(4) "Record Date" shall mean, with respect to any dividend,
distribution or other transaction or event in which the holders of
Common Stock have the right to receive any cash, securities or other
property or in which the Common Stock (or other applicable security)
is exchanged for or converted into any combination of cash, securities
or other
-75-
property, the date fixed for determination of stockholders entitled to
receive such cash, securities or other property (whether such date is
fixed by the Board of Directors or by statute, contract or otherwise).
(5) "Trading Day" shall mean (x) if the applicable security
is listed or admitted for trading on the New York Stock Exchange or
another national security exchange, a day on which the New York Stock
Exchange or another national security exchange is open for business or
(y) if the applicable security is quoted on the Nasdaq National
Market, a day on which trades may be made thereon or (z) if the
applicable security is not so listed, admitted for trading or quoted,
any day other than a Saturday or Sunday or a day on which banking
institutions in the State of New York are authorized or obligated by
law or executive order to close.
(i) The Company may make such reductions in the Conversion Price, in
addition to those required by Sections 15.5(a), (b), (c), (d), (e), (f) and
(g), as the Board of Directors considers to be advisable to avoid or
diminish any income tax to holders of Common Stock or rights to purchase
Common Stock resulting from any dividend or distribution of stock (or
rights to acquire stock) or from any event treated as such for income tax
purposes.
To the extent permitted by applicable law, the Company from time to time
may reduce the Conversion Price by any amount for any period of time if the
period is at least twenty (20) days, the reduction is irrevocable during the
period and the Board of Directors shall have made a determination that such
reduction would be in the best interests of the Company, which determination
shall be conclusive and described in a Board Resolution. Whenever the Conversion
Price is reduced pursuant to the preceding sentence, the Company shall mail to
the holder of each Note at his last address appearing on the Note register
provided for in Section 2.5 a notice of the reduction at least fifteen (15) days
prior to the date the reduced Conversion Price takes effect, and such notice
shall state the reduced Conversion Price and the period during which it will be
in effect.
(j) No adjustment in the Conversion Price shall be required unless
such adjustment would require an increase or decrease of at least 1% in
such price; PROVIDED, HOWEVER, that any adjustments which by reason of this
Section 15.5(j) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment. All calculations under
this Article 15 shall be made by the Company and shall be made to the
nearest cent or to the nearest one hundredth of a share, as the case may
be. No adjustment need be made for a change in the par value or no par
value of the Common Stock.
(k) Whenever the Conversion Price is adjusted as herein provided, the
Company shall promptly file with the Trustee and any conversion agent other
than the Trustee an Officers' Certificate setting forth the Conversion
Price after such adjustment and setting forth a brief statement of the
facts requiring such adjustment. Promptly after delivery of such
certificate, the Company shall prepare a notice of such adjustment of the
Conversion Price setting forth the adjusted Conversion Price and the date
on which each adjustment becomes effective and shall mail such notice of
such adjustment of the Conversion Price
-76-
to the holder of each Note at his last address appearing on the Note
register provided for in Section 2.5, within twenty (20) days of the
effective date of such adjustment. Failure to deliver such notice shall not
effect the legality or validity of any such adjustment.
(l) In any case in which this Section 15.5 provides that an adjustment
shall become effective immediately after a Record Date for an event, the
Company may defer until the occurrence of such event (i) issuing to the
holder of any Note converted after such Record Date and before the
occurrence of such event the additional shares of Common Stock issuable
upon such conversion by reason of the adjustment required by such event
over and above the Common Stock issuable upon such conversion before giving
effect to such adjustment and (ii) paying to such holder any amount in cash
in lieu of any fraction pursuant to Section 15.3.
(m) For purposes of this Section 15.5, the number of shares of Common
Stock at any time outstanding shall not include shares held in the treasury
of the Company but shall include shares issuable in respect of scrip
certificates issued in lieu of fractions of shares of Common Stock. The
Company will not pay any dividend or make any distribution on shares of
Common Stock held in the treasury of the Company.
(n) In lieu of making any adjustment to the Conversion Price pursuant
to Section 15.5(e), the Company may elect to reserve an amount of cash for
distribution to the holders of the Notes upon the conversion of the Notes
so that any such holder converting Notes will receive upon such conversion,
in addition to the shares of Common Stock and other items to which such
holder is entitled, the full amount of cash which such holder would have
received if such holder had, immediately prior to the Record Date for such
distribution of cash, converted its Notes into Common Stock, together with
any interest accrued with respect to such amount, in accordance with this
Section 15.5(n). The Company may make such election by providing an
Officers' Certificate to the Trustee to such effect on or prior to the
payment date for any such distribution and depositing with the Trustee on
or prior to such date an amount of cash equal to the aggregate amount the
holders of the Notes would have received if such holders had, immediately
prior to the Record Date for such distribution, converted all of the Notes
into Common Stock. Any such funds so deposited by the Company with the
Trustee shall be invested by the Trustee in marketable obligations issued
or fully guaranteed by the United States government with a maturity not
more than three (3) months from the date of issuance. Upon conversion of
Notes by a holder, the holder will be entitled to receive, in addition to
the Common Stock issuable upon conversion, an amount of cash equal to the
amount such holder would have received if such holder had, immediately
prior to the Record Date for such distribution, converted its Note into
Common Stock, along with such holder's pro rata share of any accrued
interest earned as a consequence of the investment of such funds. Promptly
after making an election pursuant to this Section 15.5(n), the Company
shall give or shall cause to be given notice to all Noteholders of such
election, which notice shall state the amount of cash per $1,000 principal
amount of Notes such holders shall be entitled to receive (excluding
interest) upon conversion of the Notes as a consequence of the Company
having made such election.
-77-
SECTION 15.6. EFFECT OF RECLASSIFICATION, CONSOLIDATION, MERGER OR SALE.
If any of the following events occur, namely (i) any reclassification or change
of the outstanding shares of Common Stock (other than a change in par value, or
from par value to no par value, or from no par value to par value, or as a
result of a subdivision or combination), (ii) any consolidation, merger or
combination of the Company with another corporation as a result of which holders
of Common Stock shall be entitled to receive stock, securities or other property
or assets (including cash) with respect to or in exchange for such Common Stock,
or (iii) any sale or conveyance of the properties and assets of the Company as,
or substantially as, an entirety to any other corporation as a result of which
holders of Common Stock shall be entitled to receive stock, securities or other
property or assets (including cash) with respect to or in exchange for such
Common Stock, then the Company or the successor or purchasing corporation, as
the case may be, shall execute with the Trustee a supplemental indenture (which
shall comply with the Trust Indenture Act as in force at the date of execution
of such supplemental indenture if such supplemental indenture is then required
to so comply) providing that such Note shall be convertible into the kind and
amount of shares of stock and other securities or property or assets (including
cash) receivable upon such reclassification, change, consolidation, merger,
combination, sale or conveyance by a holder of a number of shares of Common
Stock issuable upon conversion of such Notes (assuming, for such purposes, a
sufficient number of authorized shares of Common Stock available to convert all
such Notes) immediately prior to such reclassification, change, consolidation,
merger, combination, sale or conveyance assuming such holder of Common Stock did
not exercise his rights of election, if any, as to the kind or amount of
securities, cash or other property receivable upon such consolidation, merger,
statutory exchange, sale or conveyance (provided that, if the kind or amount of
securities, cash or other property receivable upon such consolidation, merger,
statutory exchange, sale or conveyance is not the same for each share of Common
Stock in respect of which such rights of election shall not have been exercised
("non-electing share"), then for the purposes of this Section 15.6 the kind and
amount of securities, cash or other property receivable upon such consolidation,
merger, statutory exchange, sale or conveyance for each non-electing share shall
be deemed to be the kind and amount so receivable per share by a plurality of
the non-electing shares). Such supplemental indenture shall provide for
adjustments which shall be as nearly equivalent as may be practicable to the
adjustments PROVIDED for in this Article 15. If, in the case of any such
reclassification, change, consolidation, merger, combination, sale or
conveyance, the stock or other securities and assets receivable thereupon by a
holder of shares of Common Stock include shares of stock or other securities and
assets of a corporation other than the successor or purchasing corporation, as
the case may be, in such reclassification, change, consolidation, merger,
combination, sale or conveyance, then such supplemental indenture shall also be
executed by such other corporation and shall contain such additional provisions
to protect the interests of the holders of the Notes as the Board of Directors
shall reasonably consider necessary by reason of the foregoing, including to the
extent practicable the provisions providing for the repurchase rights set forth
in Article 16 herein.
The Company shall cause notice of the execution of such supplemental
indenture to be mailed to each holder of Notes, at his address appearing on the
Note register provided for in Section 2.5 of this Indenture, within twenty (20)
days after execution thereof. Failure to deliver such notice shall not affect
the legality or validity of such supplemental indenture.
-78-
The above provisions of this Section shall similarly apply to successive
reclassifications, changes, consolidations, mergers, combinations, sales and
conveyances.
If this Section 15.6 applies to any event or occurrence, Section 15.5 shall
not apply.
SECTION 15.7. TAXES ON SHARES ISSUED. The issue of stock certificates on
conversions of Notes shall be made without charge to the converting Noteholder
for any tax in respect of the issue thereof. The Company shall not, however, be
required to pay any tax which may be payable in respect of any transfer involved
in the issue and delivery of stock in any name other than that of the holder of
any Note converted, and the Company shall not be required to issue or deliver
any such stock certificate unless and until the person or persons requesting the
issue thereof shall have paid to the Company the amount of such tax or shall
have established to the satisfaction of the Company that such tax has been paid.
SECTION 15.8. RESERVATION OF SHARES; SHARES TO BE FULLY PAID; LISTING OF
COMMON STOCK. The Company shall provide, free from preemptive rights, out of its
authorized but unissued shares or shares held in treasury, sufficient shares to
provide for the conversion of the Notes from time to time as such Notes are
presented for conversion.
Before taking any action which would cause an adjustment reducing the
Conversion Price below the then par value, if any, of the shares of Common Stock
issuable upon conversion of the Notes, the Company will take all corporate
action which may, in the opinion of its counsel, be necessary in order that the
Company may validly and legally issue shares of such Common Stock at such
adjusted Conversion Price.
The Company covenants that all shares of Common Stock issued upon
conversion of Notes will be fully paid and non-assessable by the Company and
free from all taxes, liens and charges with respect to the issue thereof.
The Company further covenants that if at any time the Common Stock shall be
listed on the Nasdaq National Market or any other national securities exchange
or automated quotation system the Company will, if permitted by the rules of
such exchange or automated quotation system, list and keep listed, so long as
the Common Stock shall be so listed on such exchange or automated quotation
system, all Common Stock issuable upon conversion of the Notes.
SECTION 15.9. RESPONSIBILITY OF TRUSTEE. The Trustee and any other
conversion agent shall not at any time be under any duty or responsibility to
any holder of Notes to determine whether any facts exist which may require any
adjustment of the Conversion Price, or with respect to the nature or extent or
calculation of any such adjustment when made, or with respect to the method
employed, or herein or in any supplemental indenture provided to be employed, in
making the same. The Trustee and any other conversion agent shall not be
accountable with respect to the validity or value (or the kind or amount) of any
shares of Common Stock, or of any securities or property, which may at any time
be issued or delivered upon the conversion of any Note; and the Trustee and any
other conversion agent make no representations with respect thereto. Subject to
the provisions of Section 8.1, neither the Trustee nor any conversion agent
shall be responsible for any failure of the Company to issue, transfer or
deliver any shares of Common Stock or stock certificates or other securities or
property or cash
-79-
upon the surrender of any note for the purpose of conversion or to comply with
any of the duties, responsibilities or covenants of the Company contained in
this Article. Without limiting the generality of the foregoing, neither the
Trustee nor any conversion agent shall be under any responsibility to determine
the correctness of any provisions contained in any supplemental indenture
entered into pursuant to Section 15.6 relating either to the kind or amount of
shares of stock or securities or property (including cash) receivable by
Noteholders upon the conversion of their Notes after any event referred to in
such Section 15.6 or to any adjustment to be made with respect thereto, but,
subject to the provisions of Section 8.1, may accept as conclusive evidence of
the correctness of any such provisions, and shall be protected in relying upon,
the Officers' Certificate (which the Company shall be obligated to file with the
Trustee prior to the execution of any such supplemental indenture) with respect
thereto.
SECTION 15.10. NOTICE TO HOLDERS PRIOR TO CERTAIN ACTIONS. In case:
(a) the Company shall declare a dividend (or any other distribution)
on its Common Stock (that would require an adjustment in the Conversion
Price pursuant to Section 15.5); or
(b) the Company shall authorize the granting to the holders of its
Common Stock of rights or warrants to subscribe for or purchase any share
of any class or any other rights or warrants; or
(c) of any reclassification of the Common Stock of the Company (other
than a subdivision or combination of its outstanding Common Stock, or a
change in par value, or from par value to no par value, or from no par
value to par value), or of any consolidation or merger to which the Company
is a party and for which approval of any shareholders of the Company is
required, or of the sale or transfer of all or substantially all of the
assets of the Company; or
(d) of the voluntary or involuntary dissolution, liquidation or
winding-up of the Company;
the Company shall cause to be filed with the Trustee and to be mailed to each
holder of Notes at his address appearing on the Note register, provided for in
Section 2.5 of this Indenture, as promptly as possible but in any event at least
fifteen days prior to the applicable date hereinafter specified, a notice
stating (x) the date on which a record is to be taken for the purpose of such
dividend, distribution or rights or warrants, or, if a record is not to be
taken, the date as of which the holders of Common Stock of record to be entitled
to such dividend, distribution or rights are to be determined, or (y) the date
on which such reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding-up is expected to become effective or occur,
and the date as of which it is expected that holders of Common Stock of record
shall be entitled to exchange their Common Stock for securities or other
property deliverable upon such reclassification, consolidation, merger, sale,
transfer, dissolution, liquidation or winding-up. Failure to give such notice,
or any defect therein, shall not affect the legality or validity of such
dividend, distribution, reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding-up.
-80-
ARTICLE 16.
REPURCHASE UPON A REPURCHASE EVENT
SECTION 16.1. REPURCHASE RIGHT.
(a) If, at any time prior to June 18, 2009 there shall
occur a Repurchase Event, then each Noteholder shall have the right, at
such holder's option, to require the Company to repurchase all of such
holder's Notes, or any portion thereof (in principal amounts of $1,000 or
integral multiples thereof), on the date (the "repurchase date") that is
forty (40) calendar days after the date of the Company Notice (as defined
in Section 16.2 below) of such Repurchase Event (or, if such 40th day is
not a Business Day, the next succeeding Business Day). Such repurchase
shall be made in cash at a price equal to 105% of the principal amount of
Notes such holder elects to require the Company to repurchase, together
with accrued interest, if any, to the repurchase date (the "Repurchase
Price") (or, at the option of the Company, by delivery of Common Stock in
accordance with the provisions of Section 16.3); PROVIDED, HOWEVER, that if
such repurchase date is June 15 or December 15 then the interest
payable on such date shall be paid to the holder of record of the Note on
the next preceding June 15 or December 15, respectively. No Notes may
be redeemed at the option of holders upon a Repurchase Event if there has
occurred and is continuing an Event of Default, other than a default in the
payment of the Repurchase Price with respect to such Notes on the
repurchase date.
SECTION 16.2. NOTICES; METHOD OF EXERCISING REPURCHASE RIGHT, ETC.
(a) Unless the Company shall have theretofore called for redemption
all of the outstanding Notes, on or before the fifteenth (15th) calendar
day after the occurrence of a Repurchase Event, the Company or, at the
written request of the Company, the Trustee, shall mail to all holders of
record of the Notes a notice (the "Company Notice") in the form as prepared
by the Company of the occurrence of the Repurchase Event and of the
repurchase right set forth herein arising as a result thereof. The Company
shall also deliver a copy of such notice of a repurchase right to the
Trustee and cause a copy of such notice of a repurchase right, or a summary
of the information contained therein, to be published once in a newspaper
of general circulation in The City of New York. The Company Notice shall
contain the following information:
(1) the repurchase date,
(2) the date by which the repurchase right must be
exercised,
(3) the last date by which the election to require
repurchase, if submitted, must be revoked;
(4) the Repurchase Price and whether the Repurchase Price
shall be payable in cash or Common Stock and, if payable in Common
Stock, the method
-81-
of calculating the amount of the Common Stock to be delivered upon the
repurchase as provided in Section 16.3(a);
(5) a description of the procedure which a holder must
follow to exercise a repurchase right, and
(6) the Conversion Price then in effect, the date on which
the right to convert the principal amount of the Notes to be
repurchased will terminate and the place or places where Notes may be
surrendered for conversion.
No failure of the Company to give the foregoing notices or defect therein
shall limit any holder's right to exercise a repurchase right or affect the
validity of the proceedings for the repurchase of Notes.
If any of the foregoing provisions are inconsistent with applicable law,
such law shall govern.
(b) To exercise a repurchase right, a holder shall deliver to the
Trustee on or before the thirty-fifth (35th) day after the Company Notice
was delivered (i) written notice to the Company (or agent designated by the
Company for such purpose) of the holder's exercise of such right, which
notice shall set forth the name of the holder, the principal amount of the
Notes to be repurchased, a statement that an election to exercise the
repurchase right is being made thereby, and, in the event that the
Repurchase Price shall be paid in shares of Common Stock, the name or names
(with addresses) in which the certificate or certificates for shares of
Common Stock shall be issued, and (ii) the Notes with respect to which the
repurchase right is being exercised, duly endorsed for transfer to the
Company. Election of repurchase by a holder shall be revocable at any time
prior to, but excluding, the repurchase date, by delivering written notice
to that effect to the Trustee prior to the close of business on the
Business Day prior to the repurchase date.
(c) If the Company fails to repurchase on the repurchase date any
Notes (or portions thereof) as to which the repurchase right has been
properly exercised, then the principal of such Notes shall, until paid,
bear interest to the extent permitted by applicable law from the repurchase
date at the rate borne by the Note and each such Note shall be convertible
into Common Stock in accordance with this Indenture (without giving effect
to Section 16.2(b)) until the principal of such Note shall have been paid
or duly provided for.
(d) Any Note which is to be repurchased only in part shall be
surrendered to the Trustee duly endorsed for transfer to the Company and
accompanied by appropriate evidence of genuineness and authority
satisfactory to the Company and the Trustee duly executed by, the holder
thereof (or his attorney duly authorized in writing), and the Company shall
execute, and the Trustee shall authenticate and deliver to the holder of
such Note without service charge, a new Note or Notes, containing identical
terms and conditions, of any authorized denomination as requested by such
holder in aggregate
-82-
principal amount equal to and in exchange for the unrepurchased portion of
the principal of the Note so surrendered.
(e) On or prior to the repurchase date, the Company shall deposit with
the Trustee or with a paying agent (or, if the Company is acting as its own
paying agent, segregate and hold in trust as provided in Section 5.4) the
Repurchase Price in cash for payment to the holder on the repurchase date;
PROVIDED that if payment is to be made in cash, such cash payment is made
on the repurchase date it must be received by the Trustee or paying agent,
as the case may be, by 10:00 a.m., New York City time, on such date;
PROVIDED FURTHER that if the Repurchase Price is to be paid in shares of
Common Stock, such shares of Common Stock are to be issued as promptly
after the repurchase date as practicable.
(f) Any issuance of shares of Common Stock in respect of the
Repurchase Price shall be deemed to have been effected immediately prior to
the close of business on the repurchase date and the person or persons in
whose name or names any certificate or certificates for shares of Common
Stock shall be issuable upon such repurchase shall be deemed to have become
on the repurchase date the holder or holders of record of the shares
represented thereby; PROVIDED, HOWEVER, that any surrender for repurchase
on a date when the stock transfer books of the Company shall be closed
shall constitute the person or persons in whose name or names the
certificate or certificates for such shares are to be issued as the record
holder or holders thereof for all purposes at the opening of business on
the next succeeding day on which such stock transfer books are open. No
payment or adjustment shall be made for dividends or distributions on any
Common Stock issued upon repurchase of any Security declared prior to the
repurchase date.
(g) No fractions of shares shall be issued upon repurchase of Notes.
If more than one Note shall be repurchased from the same holder and the
Repurchase Price shall be payable in shares of Common Stock, the number of
full shares which shall be issuable upon such repurchase shall be computed
on the basis of the aggregate principal amount of the Notes so repurchased.
Instead of any fractional share of Common Stock which would otherwise be
issuable on the repurchase of any Note or Notes, the Company will deliver
to the applicable holder its check for the current market value of such
fractional share. The current market value of a fraction of a share is
determined by multiplying the current market price of a full share by the
fraction, and rounding the result to the nearest cent. For purposes of this
Section, the "current market price" of a share of Common Stock is the
Closing Price of the Common Stock on the Trading Day immediately preceding
the repurchase date.
(h) Any issuance and delivery of certificates for shares of Common
Stock on repurchase of Notes shall be made without charge to the holder of
Notes being repurchased for such certificates or for any tax or duty in
respect of the issuance or delivery of such certificates or the securities
represented thereby; PROVIDED, HOWEVER, that the Company shall not be
required to pay any tax or duty which may be payable in respect of (i)
income of the holder or (ii) any transfer involved in the issuance or
delivery of certificates for shares of Common Stock in a name other than
that of the
-83-
holder of the Notes being repurchased, and no such issuance or delivery
shall be made unless and until the person requesting such issuance or
delivery has paid to the Company the amount of any such tax or duty or has
established, to the satisfaction of the Company, that such tax or duty has
been paid.
(i) All Notes delivered for repurchase shall be delivered to the
Trustee to be canceled in accordance with the provisions of Section 2.8.
SECTION 16.3. CONDITIONS TO THE COMPANY'S ELECTION TO PAY THE REPURCHASE
PRICE IN COMMON STOCK.
The Company may elect to pay the Repurchase Price by delivery of shares of
Common Stock pursuant to Section 16.1 if and only if the following conditions
shall have been satisfied:
(a) The shares of Common Stock deliverable in payment of the
Repurchase Price shall have a fair market value as of the repurchase date
of not less than the Repurchase Price. For purposes of Section 16.1 and
this Section 16.3, the fair market value of shares of Common Stock shall be
determined by the Company and shall be equal to 95% of the average of the
Closing Prices of the Common Stock for the five consecutive Trading Days
immediately preceding and including the third Trading Day prior to the
repurchase date;
(b) The Repurchase Price shall be paid only in cash in the event any
shares of Common Stock to be issued upon repurchase of Notes hereunder (i)
require registration under any federal securities law before such shares
may be freely transferable without being subject to any transfer
restrictions under the Securities Act upon repurchase and if such
registration is not completed or does not become effective prior to the
repurchase date, and/or (ii) require registration with or approval of any
governmental authority under any state law or any other federal law before
such shares may be validly issued or delivered upon repurchase and if such
registration is not completed or does not become effective or such approval
is not obtained prior to the repurchase date;
(c) Payment of the Repurchase Price may not be made in Common Stock
unless such stock is, or shall have been, or approved for quotation on the
Nasdaq National Market or listed on a national securities exchange, in
either case, prior to the repurchase date; and
(d) All shares of Common Stock which may be issued upon repurchase of
the Notes will be issued out of the Company's authorized but unissued
Common Stock and, will upon issue, be duly and validly issued and fully
paid and non-assessable and free of any preemptive rights.
If all of the conditions set forth in this Section 16.3 are not satisfied
in accordance with the terms thereof, the Repurchase Price shall be paid by the
Company only in cash.
-84-
SECTION 16.4. CERTAIN DEFINITIONS. For purposes of this Article 16:
(a) the term "beneficial owner" shall be determined in accordance with
Rule 13d-3 and 13d-5, as in effect on the date of the original execution of
this Indenture, promulgated by the Securities and Exchange Commission
pursuant to the Exchange Act;
(b) the term "person" or "group" shall include any syndicate or group
which would be deemed to be a "person" under Section 13(d) and 14(d) of the
Exchange Act as in effect on the date of the original execution of this
Indenture; and
(c) the term "Continuing Director" means at any date a member of the
Company's Board of Directors (i) who was a member of such board on December
31, 2003 or (ii) who was nominated or elected by at least a majority of the
directors who were Continuing Directors at the time of such nomination or
election or whose election to the Company's Board of Directors was
recommended or endorsed by at least a majority of the directors who were
Continuing Directors at the time of such nomination or election or such
lesser number comprising a majority of a nominating committee if authority
for such nominations or elections has been delegated to a nominating
committee whose authority and composition have been approved by at least a
majority of the directors who were continuing directors at the time such
committee was formed. (Under this definition, if the Board of Directors of
the Company as of the date of this Indenture were to approve a new director
or directors and then resign, no Change in Control would occur even though
the current Board of Directors would thereafter cease to be in office).
(d) the term "Repurchase Event" means the occurrence of a Change in
Control or a Termination of Trading.
(e) a "Change in Control" shall be deemed to have occurred when (i)
any "person" or "group" (as such terms are used in Sections 13(d) and 14(d)
of the Exchange Act) is or becomes the "beneficial owner" (as defined in
Rules 13-d3 and 13-d5 under the Exchange Act) of shares representing more
than 50% of the combined voting power of the then outstanding securities
entitled to vote generally in elections of directors of the Company (the
"Voting Stock"); (ii) approval by stockholders of the Company of any plan
or proposal for the liquidation, dissolution or winding up of the Company;
(iii) the Company (A) consolidates with or merges into any other
corporation or any other corporation merges into the Company, and in the
case of any such transaction, the outstanding Common Stock of the Company
is changed or exchanged into other assets or securities as a result, unless
the stockholders of the Company immediately before such transaction own,
directly or indirectly immediately following such transaction, at least 51%
of the combined voting power of the outstanding voting securities of the
corporation resulting from such transaction in substantially the same
proportion as their ownership of the Voting Stock immediately before such
transaction, or (B) conveys, transfers or leases all or substantially all
of its assets to any person; or (iv) at any time Continuing Directors do
not constitute a majority of the Board of Directors of the Company (or, if
applicable, a successor corporation to the Company); PROVIDED that a Change
in Control shall not be deemed to have occurred if either (x) the Closing
Price (as defined in Section 15.5(h)(1) hereof) of the Common Stock for any
five Trading Days during the ten (10) Trading Days immediately preceding
the Change in Control is at least equal to 105% of the Conversion Price in
effect on the date on which the Change in Control occurs or (y)
-85-
in the case of a merger or consolidation otherwise constituting a Change in
Control, all of the consideration (excluding cash payments for fractional
shares) in such merger or consolidation constituting the Change in Control
consists of common stock traded on a United States national securities
exchange or quoted on the Nasdaq National Market (or which will be so
traded or quoted when issued or exchanged in connection with such Change in
Control) and as a result of such transaction or transactions such Notes
become convertible solely into such common stock.
(f) a "Termination of Trading" shall have occurred if the Common Stock
(or other common stock into which the Notes are then convertible) is
neither listed for trading on a United States national securities exchange
nor approved for trading on an established over the counter trading market
in the United States, including, without limitation, the Nasdaq
Over-the-Counter Bulletin Board.
ARTICLE 17.
MISCELLANEOUS PROVISIONS
SECTION 17.1. PROVISIONS BINDING ON COMPANY'S SUCCESSORS. All the
covenants, stipulations, promises and agreements of the Company in this
Indenture contained shall bind its successors and assigns whether so expressed
or not.
SECTION 17.2. OFFICIAL ACTS BY SUCCESSOR CORPORATION. Any act or
proceeding by any provision of this Indenture authorized or required to be done
or performed by any board, committee or officer of the Company shall and may be
done and performed with like force and effect by the like board, committee or
officer of any corporation that shall at the time be the lawful sole successor
of the Company.
SECTION 17.3. ADDRESSES FOR NOTICES, ETC. Any notice or demand which by
any provision of this Indenture is required or permitted to be given or served
by the Trustee or by the holders of Notes on the Company shall be deemed to have
been sufficiently given or made, for all purposes if given or served by being
deposited postage prepaid by registered or certified mail in a post office
letter box addressed (until another address is filed by the Company with the
Trustee) to 00 Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxxxxxxx 00000, Attention: Chief
Financial Officer. Any notice, direction, request or demand hereunder to or upon
the Trustee shall be deemed to have been sufficiently given or made, for all
purposes, if given or served by being deposited postage prepaid by registered or
certified mail in a post office letter box addressed to the Corporate Trust
Office.
The Trustee, by notice to the Company, may designate additional or
different addresses for subsequent notices or communications.
Any notice or communication mailed to a Noteholder shall be mailed to him
by first class mail, postage prepaid, at his address as it appears on the Note
register and shall be sufficiently given to him if so mailed within the time
prescribed.
-86-
Failure to mail a notice or communication to a Noteholder or any defect in
it shall not affect its sufficiency with respect to other Noteholders. If a
notice or communication is mailed in the manner provided above, it is duly
given, whether or not the addressee receives it.
SECTION 17.4. GOVERNING LAW. This Indenture and each Note shall be deemed
to be a contract made under the laws of New York, and for all purposes shall be
construed in accordance with the laws of New York (without regard to the
conflict of laws provisions thereof).
SECTION 17.5. EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT;
CERTIFICATES TO TRUSTEE. Upon any application or demand by the Company to the
Trustee to take any action under any of the provisions of this Indenture, the
Company shall furnish to the Trustee an Officers' Certificate stating that all
conditions precedent, if any, provided for in this Indenture relating to the
proposed action have been complied with, and an Opinion of Counsel stating that,
in the opinion of such counsel, all such conditions precedent have been complied
with.
Each certificate or opinion provided for by or on behalf of the Company in
this Indenture and delivered to the Trustee with respect to compliance with a
condition or covenant provided for in this Indenture shall include (1) a
statement that the person making such certificate or opinion has read such
covenant or condition; (2) a brief statement as to the nature and scope of the
examination or investigation upon which the statement or opinion contained in
such certificate or opinion is based; (3) a statement that, in the opinion of
such person, he has made such examination or investigation as is necessary to
enable him to express an informed opinion as to whether or not such covenant or
condition has been complied with; and (4) a statement as to whether or not, in
the opinion of such person, such condition or covenant has been complied with.
SECTION 17.6. LEGAL HOLIDAYS. In any case where the date of maturity of
interest on or principal of the Notes or the date fixed for redemption of any
Note will not be a Business Day, then payment of such interest on or principal
of the Notes need not be made on such date, but may be made on the next
succeeding Business Day with the same force and effect as if made on the date of
maturity or the date fixed for redemption, and no interest shall accrue for the
period from and after such date.
SECTION 17.7. NO SECURITY INTEREST CREATED. Nothing in this Indenture or
in the Notes, expressed or implied, shall be construed to constitute a security
interest under the Uniform Commercial Code or similar legislation, as now or
hereafter enacted and in effect, in any jurisdiction.
SECTION 17.8. TRUST INDENTURE ACT. This Indenture is hereby made
subject to, and shall be governed by, the provisions of the Trust Indenture Act
required to be part of and to govern indentures qualified under the Trust
Indenture Act. If any provision hereof limits, qualifies or conflicts with
another provision hereof which is required to be included in an indenture
qualified under the Trust Indenture Act, such required provision shall control.
-87-
SECTION 17.9. BENEFITS OF INDENTURE. Nothing in this Indenture or in the
Notes, expressed or implied, shall give to any person, other than the parties
hereto, any paying agent, any authenticating agent, any Note registrar and their
successors hereunder, the holders of Notes and the holders of Senior
Indebtedness, any benefit or any legal or equitable right, remedy or claim under
this Indenture.
SECTION 17.10. TABLE OF CONTENTS, HEADINGS, ETC. The table of contents and
the titles and headings of the articles and sections of this Indenture have been
inserted for convenience of reference only, are not to be considered a part
hereof, and shall in no way modify or restrict any of the terms or provisions
hereof.
SECTION 17.11. AUTHENTICATING AGENT. The Trustee may appoint an
authenticating agent which shall be authorized to act on its behalf and subject
to its direction in the authentication and delivery of Notes in connection with
the original issuance thereof and transfers and exchanges of Notes hereunder,
including under Sections 2.4, 2.5, 2.6, 2.7 and 3.3, as fully to all intents and
purposes as though the authenticating agent had been expressly authorized by
this Indenture and those Sections to authenticate and deliver Notes. For all
purposes of this Indenture, the authentication and delivery of Notes by the
authenticating agent shall be deemed to be authentication and delivery of such
Notes "by the Trustee" and a certificate of authentication executed on behalf of
the Trustee by an authenticating agent shall be deemed to satisfy any
requirement hereunder or in the Notes for the Trustee's certificate of
authentication. Such authenticating agent shall at all times be a person
eligible to serve as trustee hereunder pursuant to Section 8.9.
Any corporation into which any authenticating agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, consolidation or conversion to which any authenticating agent
shall be a party, or any corporation succeeding to the corporate trust business
of any authenticating agent, shall be the successor of the authenticating agent
hereunder, if such successor corporation is otherwise eligible under this
Section, without the execution or filing of any paper or any further act on the
part of the parties hereto or the authenticating agent or such successor
corporation.
Any authenticating agent may at any time resign by giving written notice of
resignation to the Trustee and to the Company. The Trustee may at any time
terminate the agency of any authenticating agent by giving written notice of
termination to such authenticating agent and to the Company. Upon receiving such
a notice of resignation or upon such a termination, or in case at any time any
authenticating agent shall cease to be eligible under this Section, the Trustee
shall promptly appoint a successor authenticating agent (which may be the
Trustee), shall give written notice of such appointment to the Company and shall
mail notice of such appointment to all holders of Notes as the names and
addresses of such holders appear on the Note register.
The Company agrees to pay to the authenticating agent from time to time
reasonable compensation for its services (to the extent pre-approved by the
Company in writing).
The provisions of Sections 8.2, 8.3, 8.4, 9.3 and this Section 17.11 shall
be applicable to any authenticating agent.
-88-
SECTION 17.12. EXECUTION IN COUNTERPARTS. This Indenture may be executed in
any number of counterparts, each of which shall be an original, but such
counterparts shall together constitute but one and the same instrument.
The Bank of New York hereby accepts the trusts in this Indenture declared
and provided, upon the terms and conditions hereinabove set forth.
-89-
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed as of the date first written above.
IBASIS, INC.
By: /s/ Xxxxxx X. XxxxxxXxxx
-------------------------------
Name: Xxxxxx X. XxxxxxXxxx
Title: Executive Vice President
Attest:
By: /s/ Xxxxxxx Xxxxxxx
----------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Vice President, Finance and
Chief Financial Officer
THE BANK OF NEW YORK, as Trustee
By: /s/ Geonvanni Xxxxxx
-------------------------------
Authorized Signatory
SCHEDULE 1.1
EXISTING INDEBTEDNESS
DEBTOR MAXIMUM AMOUNT MATURITY DATE
Silicon Valley Bank (1) $15,000,000 January 2005
11 1/2% Senior Secured Notes $25,175,000 January 2005
6 3/4% Convertible $38,180,000 March 2005
Subordinated Notes
Cisco Systems Capital Corp. $ 853,000 January 2005
XXX Xxxxxxxxxxx $ 68,000 March 2005
Enavis Networks Inc. $ 5,000 June 2004
-----------
Total $79,281,000
===========
(1) REPRESENTS AMOUNT OUTSTANDING UNDER STANDBY LETTERS OF CREDIT.
EXHIBIT A
FORM OF NOTE
[THE FOLLOWING LEGEND SHALL APPEAR ON THE FACE OF EACH GLOBAL NOTE:
THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE HEREINAFTER
REFERRED TO AND IS REGISTERED IN THE NAME OF THE DEPOSITARY OR A NOMINEE OF THE
DEPOSITARY, WHICH MAY BE TREATED BY THE COMPANY, THE TRUSTEE AND ANY AGENT
THEREOF AS OWNER AND HOLDER OF THIS NOTE FOR ALL PURPOSES.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN
DEFINITIVE REGISTERED FORM IN THE LIMITED CIRCUMSTANCES REFERRED TO IN THE
INDENTURE, THIS 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.]
A-1
IBASIS, INC.
6 3/4% CONVERTIBLE SUBORDINATED NOTE
DUE 2009
Xx. 0 X.X.x00,000,000
XXXXX XX. 000000XX0
IBASIS, INC., a corporation duly organized and existing under the laws
of the State of Delaware (herein called the "Company," which term includes
any successor person under the Indenture referred to on the reverse hereof),
for value received, hereby promises to pay to CEDE & Co., the principal sum
of Thirty-seven Xxxxxxx Xxx Xxxxxxx Xxxxxx-xxxx Xxxxxxxx Xxxxxx Xxxxxx
Dollars (U.S.$37,285,000) (which principal amount may from time to time be
increased or decreased to such other principal amounts (which, taken together
with the principal amounts of all other outstanding Notes under the
Indenture, shall not exceed U.S. $37,285,000 in the aggregate at any time)
by adjustments made on the records of the Trustee hereinafter referred to in
accordance with the Indenture) on June 18, 2009 and to pay interest thereon,
from June 18, 2004, or from the most recent Interest Payment Date (as defined
below) to which interest has been paid or duly provided for, semi-annually in
arrears on June 15 and December 15 in each year (each, an "Interest Payment
Date"), commencing December 15, 2004, at the rate of 6.75% per annum, until
the principal hereof is due, and at the rate of 8.75% per annum on any
overdue principal and premium, if any, and, to the extent permitted by law,
on any overdue interest. The interest so payable, and punctually paid or duly
provided for, on any Interest Payment Date will, as provided in the
Indenture, be paid to the Person in whose name this Note (or one or more
Predecessor Notes) is registered at the close of business on the record date
with respect to any Interest Payment Date, which shall be the June 1 or
December 1 (whether or not a Business Day), as the case may be, next
preceding such Interest Payment Date. Except as otherwise provided in the
Indenture, any such interest not so punctually paid or duly provided for
("Defaulted Interest") will forthwith cease to be payable to the Noteholder
on the relevant record date by virtue of his having been such Noteholder and
may either be paid to the Person in whose name this Note (or one or more
Predecessor Note) is registered at the close of business on a special record
date for the payment of such Defaulted Interest to be fixed in accordance
with the Indenture or be paid at any time in any other lawful manner not
inconsistent with the requirements of any automated quotation system or
securities exchange on which the Notes may be quoted or listed, and upon such
notice as may be required by such exchange, all as more fully provided in the
Indenture. Payments of principal shall be made upon the surrender of this
Note at the Corporate Trust Office of the Trustee, or at such other office or
agency of the Company as may be designated by the Company for such purpose in
the Borough of Manhattan, The City of New York, in such coin or currency of
the United States of America as at the time of payment shall be legal tender
for the payment of public and private debts, by United States Dollar check
drawn on, or transfer to, a United States Dollar account. Payments of
interest on this Note may be made by United States Dollar check, drawn on a
United States Dollar Account, mailed to the address of the Person entitled
thereto as such address shall appear in the Note Registry, or, upon written
application by the Noteholder to the Trustee setting forth wire instructions
not later than two days prior to the applicable record date, by transfer to a
United States Dollar account; provided, however, that transfers to United
A-2
States Dollar accounts will be made only to Noteholders of an aggregate
principal amount of Notes in excess of $2,000,000; provided, further that any
payment to the Depositary or its nominee shall be made by wire transfer of
immediately available funds to the account of the Depositary or its nominee.
Except as specifically provided herein and in the Indenture, the Company
shall not be required to make any payment with respect to any tax, assessment or
other governmental charge imposed by any government or any political subdivision
or taxing authority thereof or therein.
Reference is hereby made to the further provisions of this Note set forth
on the reverse hereof, which further provisions shall for all purposes have the
same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof or an authenticating agent by the
manual signature of one of their respective authorized signatories, this Note
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
A-3
IN WITNESS WHEREOF, the Company has caused this Note to be duly executed
and delivered under its corporate seal.
IBASIS, INC.
By:
--------------------------
Name:
Title:
By:
--------------------------
Name:
Title:
Attest:
By:
--------------------------
Name:
Title:
(Trustee's Certificate of Authentication)
This is one of the 6 3/4% Convertible Subordinated Notes due 2009 referred
to in the within-mentioned Indenture.
THE BANK OF NEW YORK, as Trustee
By:
--------------------------
Authorized Signatory
A-4
[FORM OF REVERSE]
This Note is one of a duly authorized issue of securities of the Company
designated as its "6 3/4% Convertible Subordinated Notes due 2009" (herein
called the "Notes"), limited in aggregate principal amount to U.S.
$37,285,000, issued and to be issued under an Indenture, dated as of June
18, 2004 (herein called the "Indenture"), between the Company and The Bank of
New York, as Trustee (herein called the "Trustee," which term includes any
successor trustee under the Indenture) to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the
respective rights, limitations of rights, duties and immunities thereunder of
the Company, the Trustee, the holders of senior indebtedness and the holders
of the Notes and of the terms upon which the Notes are, and are to be,
authenticated and delivered. As provided in the Indenture and subject to
certain limitations therein set forth, Notes are exchangeable for a like
aggregate principal amount of Notes of any authorized denominations as
requested by the holder surrendering the same upon surrender of the Note or
Notes to be exchanged, initially, at the Corporate Trust Office of the
Trustee. The Trustee upon such surrender by the holder will issue the new
Notes in the requested denominations.
No sinking fund is provided for the Notes.
The Notes are subject to Provisional Redemption by the Company, in whole
or in part, at any time on or after June 10, 2005, upon notice as set forth
in Section 3.2 of the Indenture, at a redemption price equal to $1,000 per
Note to be redeemed plus accrued and unpaid interest, if any, to the
Provisional Redemption Date if the closing price of the Common Stock shall
have exceeded 150% of the Conversion Price then in effect for at least 20
Trading Days in any consecutive 30-Trading Day period ending on the Trading
Day prior to the Notice Date.
The Notes are also subject to redemption at the option of the Company at
any time on or after June 18, 2007, in whole or in part, upon not less than
20 nor more than 60 days' notice to the holders prior to the date fixed for
redemption at the following optional redemption prices (expressed as
percentages of the principal amount) for the twelve-month period beginning on
June 18 of the following years:
YEAR REDEMPTION PRICE
2007 102%
2008 101%
together, in each case, with accrued and unpaid interest to (but excluding)
the date fixed for redemption; provided, however, that interest installments
on Notes will be payable to the holders of such Notes, or one or more
Predecessor Notes, of record at the close of business on the relevant record
dates referred to on the face hereof, all as provided in the Indenture.
A-5
None of the Company, the Trustee, the Note registrar or any co-registrar
shall be required to exchange or register a transfer of (a) any Notes for a
period of fifteen (15) days next preceding any selection of Notes to be redeemed
or (b) any Notes called for redemption or, if a portion of any Note is selected
or called for redemption, such portion thereof selected or called for redemption
or (c) any Notes surrendered for conversion or, if a portion of any Note is
surrendered for conversion, such portion thereof surrendered for conversion or
(d) any Notes, or a portion of any Note, surrendered for repurchase (and not
withdrawn) in connection with a Repurchase Event.
In any case where the due date for the payment of the principal of,
premium, if any, or interest on any Note or the last day on which a holder of a
Note has a right to convert his Note shall not be a Business Day, then payment
of principal, premium, if any, interest or delivery for conversion of such Note
need not be made on or by such date at such place but may be made on or by the
next succeeding Business Day, with the same force and effect as if made on the
date for such payment or the date fixed for redemption or repurchase, or by such
last day for conversion, and no interest shall accrue on the amount so payable
for the period after such date.
Subject to and upon compliance with the provisions of the Indenture, the
holder of this Note is entitled, at his option, at any time following the
original issue date of the Notes and on or before the close of business on
the Business Day immediately preceding June 18, 2009, or in case this Note or
a portion hereof is called for redemption or the holder hereof has exercised
his right to require the Company to repurchase this Note or such portion
hereof, then in respect of this Note until but (unless the Company defaults
in making the payment due upon redemption or repurchase, as the case may be)
not after, the close of business on Business Day immediately preceding the
any optional redemption date or Provisional Redemption Date or the date fixed
for repurchase, as the case may be, to convert this Note (or any portion of
the principal amount hereof that is an integral multiple of U.S.$1,000,
provided that the unconverted portion of such principal amount is U.S.$1,000
or any integral multiple of U.S.$1,000 in excess thereof) into fully paid and
nonassessable shares of Common Stock of the Company at an initial Conversion
Price of $1.85 per share of Common Stock (or at the current adjusted
Conversion Price if an adjustment has been made as provided in the Indenture,
including pursuant to Section 15.5 of the Indenture) by surrender of this
Note, duly endorsed and, 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 (except if this Note or portion thereof has been called for redemption
on a Provisional Redemption Date or optional redemption date or is
repurchasable on a date fixed for repurchase), also accompanied by payment in
New York Clearing House or other funds acceptable to the Company of an amount
equal to the interest payable on such interest payment date on the principal
amount of this Note then being converted, and also the conversion notice
hereon duly executed, to the Company at the Corporate Trust Office of the
Trustee, or at such other office or agency of the Company, subject to any
laws or regulations applicable thereto and subject to the right of the
Company to terminate the appointment of any Conversion Agent (as defined
below) as may be designated by it for such purpose in the Borough of
Manhattan, The City of New York, or at such other offices or agencies as the
Company may designate (each, a "Conversion Agent"), provided, however, that
if this Note or portion hereof has been called for redemption on a
Provisional Redemption Date or optional redemption date or is repurchasable
on a repurchase rate, then the holder of this Note on such record date will
be entitled to receive the interest
A-6
accruing hereon from the interest payment date next preceding the date of such
conversion to such succeeding interest payment date and the holder of this Note
who converts this Note or a portion hereof during such period shall not be
required to pay such interest upon surrender of this Note for conversion.
Subject to the provisions of the preceding sentence, no cash payment or
adjustment is to be made on conversion for interest accrued hereon from the
interest payment date next preceding the day of conversion, or for dividends on
the Common Stock issued on conversion hereof. The Company shall thereafter
deliver to the holder the fixed number of shares of Common Stock (together with
any cash adjustment, as provided in the Indenture) into which this Note is
convertible and such delivery will be deemed to satisfy the Company's obligation
to pay the principal amount of this Note. No fractions of shares or scrip
representing fractions of shares will be issued on conversion, but instead of
any fractional interest (calculated to the nearest 1/100th of a share) the
Company shall pay a cash adjustment as provided in the Indenture. The Conversion
Price is subject to adjustment as provided in the Indenture. In addition, the
Indenture provides that in case of certain consolidations or mergers to which
the Company is a party (other than a consolidation or merger that does not
result in any reclassification, conversion, exchange or cancellation of the
Common Stock) or the conveyance, transfer, sale or lease of all or substantially
all of the property and assets of the Company, the Indenture shall be amended,
without the consent of any holders of Notes, so that this Note, if then
outstanding, will be convertible thereafter, during the period this Note shall
be convertible as specified above, only into the kind and amount of securities,
cash and other property receivable upon such consolidation, merger, conveyance,
transfer, sale or lease by a holder of the number of shares of Common Stock of
the Company into which this Note could have been converted immediately prior to
such consolidation, merger, conveyance, transfer, sale or lease (subject to the
provisions of, and as more explicitly set forth in, the Indenture). No
adjustment in the Conversion Price will be made until such adjustment would
require an increase or decrease of at least one percent of such price, provided
that any adjustment that would otherwise be made will be carried forward and
taken into account in the computation of any subsequent adjustment.
If a Repurchase Event occurs, the holder of this Note, at the holder's
option, shall have the right, in accordance with the provisions of the
Indenture, to require the Company to repurchase this Note (or any portion of the
principal amount hereof that is at least $1,000 or an integral multiple) for
cash at a price equal to 105% of the principal amount thereof plus interest
accrued to the repurchase date. At the option of the Company, the Repurchase
Price may be paid in cash or, subject to the conditions provided in the
Indenture, by delivery of shares of Common Stock having a fair market value
equal to the Repurchase Price. For purposes of this paragraph, the fair market
value of shares of Common Stock shall be determined by the Company and shall be
equal to 95% of the average of the Closing Prices Per Share for the five
consecutive Trading Days immediately preceding and including the third Trading
Day prior to the repurchase date. Whenever in this Note there is a reference, in
any context, to the principal of any Note as of any time, such reference shall
be deemed to include reference to the Repurchase Price payable in respect of
such Note to the extent that such Repurchase Price is, was or would be so
payable at such time, and express mention of the Repurchase Price in any
provision of this Note shall not be construed as excluding the Repurchase Price
so payable in those provisions of this Note when such express mention is not
made; provided, however, that, for the purposes of the second succeeding
paragraph, such reference shall be deemed to include reference to the Repurchase
Price only to the extent the Repurchase Price is payable in cash.
A-7
[The following paragraph shall appear in each Global Security:
In the event of a deposit or withdrawal of an interest in this Note,
including an exchange, transfer, redemption, repurchase or conversion of this
Note in part only, the Trustee, as custodian of the Depositary, shall make an
adjustment on its records to reflect such deposit or withdrawal in accordance
with the rules and procedures of The Depository Trust Company applicable to, and
as in effect at the time of, such transaction.]
[The following paragraph shall appear in each Note that is not a Global
Security:
In the event of redemption, repurchase or conversion of this Note in part
only, a new Note or Notes for the unredeemed, unrepurchased or unconverted
portion hereof will be issued in the name of the holder hereof.]
The indebtedness evidenced by this Note is, to the extent and in the manner
provided in the Indenture, subordinate and subject in right of payment to the
prior payment in full in cash of all senior indebtedness of the Company, and
this Note is issued subject to such provisions of the Indenture with respect
thereto. Each holder of this Note, by accepting the same, (a) agrees to and
shall be bound by such provisions, (b) authorizes and directs the Trustee on his
behalf to take such action as may be necessary or appropriate to effectuate the
subordination so provided and (c) appoints the Trustee his attorney-in-fact for
any and all such purposes.
If an Event of Default shall occur and be continuing, the principal of all
the Notes, together with accrued interest to the date of declaration, may be
declared due and payable in the manner and with the effect provided in the
Indenture. Upon payment (i) of the amount of principal so declared due and
payable, together with accrued interest to the date of declaration, and (ii) of
interest on any overdue principal and, to the extent permitted by applicable
law, overdue interest, all of the Company's obligations in respect of the
payment of the principal of and interest on the Notes shall terminate.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the holders of the Notes under the Indenture at any
time by the Company and the Trustee with either (a) the written consent of the
holders of not less than a majority in principal amount of the Notes at the time
outstanding, or (b) by the adoption of a resolution, at a meeting of holders of
the Outstanding Notes at which a quorum is present, by the holders of at least
66-2/3% in aggregate principal amount of the Outstanding Notes represented and
entitled to vote at such meeting. The Indenture also contains provisions
permitting the holders of specified percentages in principal amount of the Notes
at the time outstanding, on behalf of the holders of all the Notes, to waive
compliance by the Company with certain provisions of the Indenture and certain
past defaults under the Indenture and their consequences. Any such consent or
waiver by the holder of this Note shall be conclusive and binding upon such
holder and upon all future holders of this Note and of any Note issued in
exchange herefor or in lieu hereof whether or not notation of such consent or
waiver is made upon this Note or such other Note.
As provided in and subject to the provisions of the Indenture, the holder
of this Note shall not have the right to institute any proceeding with respect
to the Indenture or for the appointment
A-8
of a receiver or trustee or for any other remedy thereunder, unless such holder
shall have previously given the Trustee written notice of a continuing Event of
Default, the holders of not less than 25% in principal amount of the outstanding
Notes shall have made written request to the Trustee to institute proceedings in
respect of such Event of Default as Trustee and offered the Trustee reasonable
indemnity and the Trustee shall not have received from the holders of a majority
in principal amount of the outstanding Notes a direction inconsistent with such
request, and shall have failed to institute any such proceeding, for 60 days
after receipt of such notice, request and offer of indemnity. The foregoing
shall not apply to any suit instituted by the holder of this Note for the
enforcement of any payment of principal hereof, premiums if any, or interest
hereon on or after the respective due dates expressed herein or for the
enforcement of the right to convert this Note as provided in the Indenture.
No reference herein to the Indenture and no provision of this Note 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 Note at the times, places and rate, and in the coin or
currency, herein prescribed or to convert this Note as provided in the
Indenture.
As provided in the Indenture and subject to certain limitations therein set
forth, the transfer of this Note is registrable on the Note register upon
surrender of this Note for registration of transfer at the Corporate Trust
Office of the Trustee or at such other office or agency of the Company as may be
designated by it for such purpose in the Borough of Manhattan, The City of New
York (which shall initially be an office or agency of the Trustee), or at such
other offices or agencies as the Company may designate, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Note registrar duly executed by, the holder thereof or his
attorney duly authorized in writing, and thereupon one or more new Notes, of
authorized denominations and for the same aggregate principal amount, will be
issued to the designated transferee or transferees by the Note registrar. No
service charge shall be made for any such registration of transfer or exchange,
but the Company may require payment of a sum sufficient to recover any tax or
other governmental charge payable in connection therewith, other than as
provided in the Indenture.
Prior to due presentation of this Note for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name Note is registered, as the owner thereof for all purposes,
whether or not such Note be overdue, and neither the Company, the Trustee nor
any such agent shall be affected by notice to the contrary.
No recourse for the payment of the principal (and premium, if any) or
interest on this Note and no recourse under or upon any obligation, covenant or
agreement of the Company in the Indenture or any indenture supplemental thereto
or in any Note, or because of the creation of any indebtedness represented
thereby, shall be had against any incorporator, stockholder, employee, agent,
officer or director or subsidiary, as such, past, present or future, of the
Company or of any successor corporation, either directly or through the Company
or any successor corporation, whether by virtue of any constitution, statute or
rule of law or by the enforcement of any assessment or penalty or otherwise, all
such liability being, by the acceptance hereof and as part of consideration for
the issue hereof, expressly waived and released.
A-9
THE INDENTURE AND THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, UNITED STATES OF AMERICA
(WITHOUT REGARD TO THE CONFLICT OF LAW PROVISIONS THEREOF).
All terms used in this Note which are defined in the Indenture shall have
the meanings assigned to them in the Indenture.
A-10
ABBREVIATIONS
The following abbreviations, when used in the inscription of the face of
this Note, shall be construed as though they were written out in full according
to applicable laws or regulations:
TEN COM - as tenants in common
TEN ENT - as tenants by the entireties (Cust)
JT TEN - as joint tenants with right of survivorship and not as tenants in
common
UNIF GIFT MIN ACT - _________________ Custodian _____________
(Minor) under Uniform Gifts to Minors Act _____________
(State)
Additional abbreviations may also be used though not in the above list.
A-11
ELECTION OF HOLDER TO REQUIRE REPURCHASE
(1) Pursuant to Article 16 of the Indenture, the undersigned hereby elects
to have this Note repurchased by the Company.
(2) The undersigned hereby directs the Trustee or the Company to pay to
the undersigned an amount in cash or, at the Company's election, Common Stock
valued as set forth in the Indenture, equal to 105% of the principal amount to
be repurchased (as set forth below), plus interest accrued to the Repurchase
Date, as provided in the Indenture.
Dated:
-----------------------------------------
-----------------------------------------
-----------------------------------------------
Signature(s)
Signature(s) must be guaranteed by an Eligible
Guarantor Institution with membership in an
approved signature guarantee program pursuant to
Rule 17Ad-15 under the Securities Exchange Act of
1934.
-----------------------------------------------
Signature Guaranteed
Principal amount to be repurchased (at least U.S. $1,000 or an integral multiple
thereof $1,000): -------------------------------
Remaining principal amount following such repurchase:
---------------------------
NOTICE: The signature to the foregoing Election must correspond to the Name as
written upon the face of this Note in every particular, without alteration or
any change whatsoever.
A-12
CONVERSION NOTICE
The undersigned holder of this Note hereby irrevocably exercises the option
to convert this Note, or any portion of the principal amount hereof (which is
U.S.$1,000 or an integral multiple of U.S.$1,000 in excess thereof, PROVIDED
that the unconverted portion of such principal amount is U.S. $1,000 or any
integral multiple of U.S. $1,000 in excess thereof) below designated, into
shares of Common Stock in accordance with the terms of the Indenture referred to
in this Note, and directs that such shares, together with a check in payment for
any fractional share and any Notes representing any unconverted principal amount
hereof, be delivered to and be registered in the name of the undersigned unless
a different name has been indicated below. If shares of Common Stock or Notes
are to be registered in the name of a Person other than the undersigned, (a) the
undersigned will pay all transfer taxes payable with respect thereto and (b)
signature(s) must be guaranteed by an Eligible Guarantor Institution with
membership in an approved signature guarantee program pursuant to Rule 17Ad-15
under the Securities Exchange Act of 1934. Any amount required to be paid by the
undersigned on account of interest accompanies this Note.
Dated:
------------------------------- -------------------------------------
-------------------------------------
Signature(s)
If shares or Notes are to be registered in the name of a Person other than the
holder, please print such Person's name and address:
---------------------------------------
Name
---------------------------------------
Address
---------------------------------------
Social Security or other Identification
Number, if any
---------------------------------------
Signature Guaranteed
If only a portion of the Notes is to be converted, please indicate:
1. Principal amount to be converted:
U.S. $ ___________
A-13
2. Principal amount and denomination of Notes representing unconverted
principal amount to be issued: Amount U.S. $___________ (U.S.$1,000 or any
integral multiple of U.S.$1,000 in excess thereof, provided that the
unconverted portion of such principal amount is U.S. $1,000 or any integral
multiple of U.S. $1,000 in excess thereof)
A-14
FORM OF ASSIGNMENT
For value received ________________ hereby sell(s), assign(s) and
transfer(s) unto ________________ (Please insert social security or other
identifying number of assignee) the within Note, and hereby irrevocably
constitutes and appoints ____________________ as attorney to transfer the said
Note on the books of the Company, with full power of substitution in the
premises.
Dated:
------------------------------- ----------------------------------------
----------------------------------------
Signature(s)
Signature(s) must be guaranteed by an
Eligible Guarantor Institution with
membership in an approved signature
guarantee program pursuant to Rule
17Ad-15 under the Securities Exchange
Act of 1934.
A-15
