EXHIBIT 4.1
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TiVo Inc., Issuer
The Bank of New York,
as Trustee
INDENTURE
Dated as of August 28, 2001
7% Convertible Senior Notes due 2006
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CROSS-REFERENCE SHEET/*/
Provisions of Trust Indenture Act of 1939 and Indenture, dated as of August
28, 2001, between TiVo Inc. and The Bank of New York, as Trustee, providing for
the 7% Convertible Senior Notes due 2006:
Section of the Act Section of Indenture
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310(a)(1) and (2)...................................... 8.9
310(a)(3) and (4)...................................... N.A./*/*
310(b)................................................. 8.8 and 8.10(b) and (d)
310(c)................................................. N.A.
311(a)................................................. 8.13
311(b)................................................. 8.13
311(c)................................................. N.A.
312(a)................................................. 6.1 and 6.2(a)
312(b)................................................. 6.2(b)
312(c)................................................. 6.2(c)
313(a)................................................. 6.3(a)
313(b)(1).............................................. N.A.
313(b)(2).............................................. 6.3(a)
313(c)................................................. 6.3(a)
313(d)................................................. 6.3(b)
314(a)................................................. 6.4
314(b)................................................. N.A.
314(c)(1) and (2)...................................... 17.5
314(c)(3).............................................. N.A.
314(d)................................................. N.A.
314(e)................................................. 17.5
314(f)................................................. N.A.
315(a), (c) and (d).................................... 8.1
315(b)................................................. 7.8
315(e)................................................. 7.9
316(a)(1).............................................. 7.7
316(a)(2).............................................. Not required
316(a) (last sentence)................................. 9.4
316(b)................................................. 11.2
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/*/This Cross-Reference Table shall not, for any purpose, be deemed a part of
this Indenture.
/**/ N.A. means Not Applicable.
TABLE OF CONTENTS
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ARTICLE I DEFINITIONS............................................................................................ 1
Section 1.1 Definitions.................................................................................. 1
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ARTICLE II ISSUE, DESCRIPTION, EXECUTION, REGISTRATION AND EXCHANGE OF NOTES..................................... 7
Section 2.1 Designation, Amount and Issue of Notes....................................................... 7
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Section 2.2 Form of Notes................................................................................ 7
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Section 2.3 Date and Denomination of Notes; Payments of Interest......................................... 8
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Section 2.4 Execution of Notes........................................................................... 9
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Section 2.5 Exchange and Registration of Transfer of Notes; Restrictions on Transfer..................... 10
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Section 2.6 Mutilated, Destroyed, Lost or Stolen Notes................................................... 17
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Section 2.7 Temporary Notes.............................................................................. 18
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Section 2.8 Cancellation of Notes Paid, Etc.............................................................. 18
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Section 2.9 CUSIP Numbers................................................................................ 19
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ARTICLE III PROVISIONAL REDEMPTION OF NOTES...................................................................... 19
Section 3.1 Redemption Price............................................................................. 19
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Section 3.2 Notice of Redemption; Selection of Notes..................................................... 20
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Section 3.3 Payment of Notes Called for Redemption....................................................... 21
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Section 3.4 Conversion Arrangement on Call for Redemption................................................ 22
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ARTICLE IV [Intentionally Omitted.].............................................................................. 23
ARTICLE V PARTICULAR COVENANTS OF THE COMPANY.................................................................... 23
Section 5.1 Payment of Principal, Premium and Interest................................................... 23
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Section 5.2 Maintenance of Office or Agency.............................................................. 23
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Section 5.3 Appointments to Fill Vacancies in Trustee's Office........................................... 24
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Section 5.4 Provisions as to Paying Agent................................................................ 24
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Section 5.5 Existence.................................................................................... 25
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Section 5.6 Information Requirement...................................................................... 25
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Section 5.7 Stay, Extension and Usury Laws............................................................... 25
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Section 5.8 Compliance Certificate....................................................................... 25
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Section 5.9 Further Instruments and Acts................................................................. 26
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Section 5.10 Limitation on Dividends and Distributions.................................................... 26
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Section 5.11 Limitation on Incurrence of Indebtedness of Subsidiaries..................................... 26
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ARTICLE VI NOTEHOLDERS' LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE......................................... 27
Section 6.1 Noteholders' Lists........................................................................... 27
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Section 6.2 Preservation and Disclosure of Lists......................................................... 27
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Section 6.3 Reports by Trustee........................................................................... 27
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Section 6.4 Reports by Company........................................................................... 28
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ARTICLE VII DEFAULTS AND REMEDIES................................................................................ 28
Section 7.1 Events of Default............................................................................ 28
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Section 7.2 Payments of Notes on Default; Suit Therefor.................................................. 31
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Section 7.3 Application of Monies Collected by Trustee................................................... 33
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Section 7.4 Proceedings by Noteholder.................................................................... 33
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Section 7.5 Proceedings by Trustee....................................................................... 34
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Section 7.6 Remedies Cumulative and Continuing........................................................... 34
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Section 7.7 Direction of Proceedings and Waiver of Defaults by Majority of Noteholders................... 34
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Section 7.8 Notice of Defaults........................................................................... 35
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Section 7.9 Undertaking to Pay Costs..................................................................... 35
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Section 7.10 Delay or Omission Not Waiver................................................................. 36
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ARTICLE VIII CONCERNING THE TRUSTEE.............................................................................. 36
Section 8.1 Duties and Responsibilities of Trustee....................................................... 36
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Section 8.2 Reliance on Documents, Opinions, Etc......................................................... 37
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Section 8.3 No Responsibility for Recitals, Etc.......................................................... 39
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Section 8.4 Trustee, Paying Agents, Conversion Agents or Registrar May Own Notes......................... 39
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Section 8.5 Monies to be Held in Trust................................................................... 39
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Section 8.6 Compensation and Expenses of Trustee......................................................... 39
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Section 8.7 Officer's Certificate as Evidence............................................................ 40
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Section 8.8 Conflicting Interests of Trustee............................................................. 40
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Section 8.9 Eligibility of Trustee....................................................................... 40
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Section 8.10 Resignation or Removal of Trustee............................................................ 40
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Section 8.11 Acceptance by Successor Trustee.............................................................. 42
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Section 8.12 Succession by Merger, Etc.................................................................... 42
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Section 8.13 Limitation on Rights of Trustee as Creditor.................................................. 43
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ARTICLE IX CONCERNING THE NOTEHOLDERS............................................................................ 43
Section 9.1 Action by Noteholders........................................................................ 43
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Section 9.2 Proof of Execution by Noteholders............................................................ 43
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Section 9.3 Who Are Deemed Absolute Owners............................................................... 43
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Section 9.4 Company-Owned Notes Disregarded.............................................................. 44
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Section 9.5 Revocation of Consents; Future Holders Bound................................................. 44
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ARTICLE X NOTEHOLDERS' MEETINGS.................................................................................. 45
Section 10.1 Purpose of Meetings.......................................................................... 45
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Section 10.2 Call of Meetings by Trustee.................................................................. 45
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Section 10.3 Call of Meetings by Company or Noteholders................................................... 45
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Section 10.4 Qualifications for Voting.................................................................... 46
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Section 10.5 Regulations.................................................................................. 46
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Section 10.6 Voting....................................................................................... 46
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Section 10.7 No Delay of Rights by Meeting................................................................ 47
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ARTICLE XI AMENDMENTS; SUPPLEMENTAL INDENTURES................................................................... 47
Section 11.1 Amendments; Supplemental Indentures without Consent of Noteholders........................... 47
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Section 11.2 Amendments; Supplemental Indentures with Consent of Noteholders.............................. 48
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Section 11.3 Effect of Amendments and Supplemental Indentures............................................. 49
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Section 11.4 Notation on Notes............................................................................ 49
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Section 11.5 Evidence of Compliance of Amendment or Supplemental Indenture to be Furnished to Trustee..... 50
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ARTICLE XII CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE.................................................... 50
Section 12.1 Company May Consolidate, Etc................................................................. 50
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Section 12.2 Successor Entity to be Substituted........................................................... 51
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Section 12.3 Opinion of Counsel to be Given Trustee....................................................... 51
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ARTICLE XIII SATISFACTION AND DISCHARGE OF INDENTURE............................................................. 51
Section 13.1 Discharge of Indenture....................................................................... 51
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Section 13.2 Deposited Monies to be Held in Trust by Trustee.............................................. 52
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Section 13.3 Paying Agent to Repay Monies Held............................................................ 52
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Section 13.4 Return of Unclaimed Monies................................................................... 52
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Section 13.5 Reinstatement................................................................................ 53
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ARTICLE XIV IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS...................................... 53
Section 14.1 Indenture and Notes Solely Corporate Obligations............................................. 53
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ARTICLE XV CONVERSION OF NOTES................................................................................... 53
Section 15.1 Right to Convert............................................................................. 53
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Section 15.2 Exercise of Conversion Privilege; Issuance of Common Stock on Conversion..................... 54
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Section 15.3 Cash Payments in Lieu of Fractional Shares................................................... 56
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Section 15.4 Conversion Price............................................................................. 56
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Section 15.5 Adjustment of Conversion Price............................................................... 56
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Section 15.6 Effect of Reclassification, Consolidation, Merger or Sale.................................... 65
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Section 15.7 Taxes on Shares Issued....................................................................... 67
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Section 15.8 Reservation of Shares; Shares to be Fully Paid; Listing of Common Stock...................... 67
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Section 15.9 Responsibility of Trustee.................................................................... 67
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Section 15.10 Notice to Holders Prior to Certain Actions................................................... 68
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Section 15.11 Additional Conversion Price Adjustments...................................................... 69
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ARTICLE XVI REPURCHASE UPON A REPURCHASE EVENT................................................................... 72
Section 16.1 Repurchase Right............................................................................. 72
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Section 16.2 Notices; Method of Exercising Repurchase Right, Etc.......................................... 73
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Section 16.3 [Reserved.................................................................................... 75
Section 16.4 Certain Definitions.......................................................................... 75
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ARTICLE XVII MISCELLANEOUS PROVISIONS............................................................................ 77
Section 17.1 Provisions Binding on Company's Successors................................................... 77
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Section 17.2 Official Acts by Successor Corporation....................................................... 77
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Section 17.3 Addresses for Notices, Etc................................................................... 77
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Section 17.4 Governing Law................................................................................ 77
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Section 17.5 Evidence of Compliance with Conditions Precedent; Certificates to Trustee.................... 77
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Section 17.6 Legal Holidays............................................................................... 78
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Section 17.7 No Security Interest Created................................................................. 78
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Section 17.8 Trust Indenture Act.......................................................................... 78
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Section 17.9 Benefits of Indenture........................................................................ 78
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Section 17.10 Table of Contents, Headings, Etc............................................................. 79
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Section 17.11 Authenticating Agent......................................................................... 79
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Section 17.12 Execution in Counterparts.................................................................... 80
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INDENTURE dated as of August 28, 2001 between TiVo 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 7% Convertible Senior Notes due 2006 (hereinafter sometimes
called the "Notes"), in an aggregate principal amount not to exceed $51,750,000
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, and a form of conversion notice and 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 provided in this Indenture, 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.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
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 I
DEFINITIONS
Section 1.1 Definitions. The terms defined in this Section 1.1 (except as
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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.
Affiliate: The term "Affiliate" of any specified person shall mean any
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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.
Board of Directors: The term "Board of Directors" shall mean the Board of
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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
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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,
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Wednesday, Thursday and Friday which is not a day on which the banking
institutions in The City of New 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.
Change in Control: The term "Change in Control" shall have the meaning
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specified in Section 16.4.
close of business: The term "close of business" means 5 p.m. (New York
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City time).
Commission: The term "Commission" shall mean the Securities and Exchange
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Commission.
Common Stock: The term "Common Stock" shall mean any stock of any class of
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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
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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
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all such reclassifications bears to the total number of shares of all such
classes resulting from all such reclassifications.
Common Stock Equivalent: The term "Common Stock Equivalent" shall mean (a)
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any evidence of indebtedness of the Company convertible into, exchangeable for
or exercisable for Common Stock; shares of capital stock (other than Common
Stock) of the Company convertible into, exchangeable for or exercisable for
Common Stock; or other securities of the Company convertible into, exchangeable
for or exercisable for Common Stock and (b) any rights, options or warrants to
subscribe for, purchase or otherwise acquire either Common Stock or any of the
securities described in the preceding clause (a).
Company: The term "Company" shall mean TiVo Inc., a Delaware corporation,
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and subject to the provisions of Article XII, shall include its successors and
assigns.
Conversion Price: The term "Conversion Price" shall have the meaning
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specified in Section 15.4.
Corporate Trust Office: The term "Corporate Trust Office," or other
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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, Xxxxx 00X, Xxx Xxxx, Xxx Xxxx 00000, Attention: Corporate Trust
Administration.
Current Market Price: The term "Current Market Price" shall have the
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meaning specified in Section 15.5(h).
default: The term "default" shall mean any event that is, or after notice
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or passage of time, or both, would be, an Event of Default.
Equity Interests: The term "Equity Interests" shall mean capital stock or
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warrants, options or other rights to acquire capital stock (but excluding any
debt security which is convertible into, or exchangeable for, capital stock).
Event of Default: The term "Event of Default" shall mean any event
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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
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1934, as amended, and the rules and regulations promulgated thereunder.
Expiration Time: The term "Expiration Time" shall have the meaning
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specified in Section 15.5(f).
Indebtedness: The term "Indebtedness" means the principal of, premium, if
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any, interest on (including any interest accruing after the filing of a petition
by or against the Company under any
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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 reimbursement obligations of the Company under letters of
credit, bank guarantees or bankers' acceptances;
(c) All indebtedness of the Company under 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 under
the Company's credit facilities or letters of credit available to the
Company;
(e) All obligations of the Company under leases required or permitted
to be capitalized under generally accepted accounting principles;
(f) All indebtedness or obligations of the kinds described in any of
the preceding clauses (a), (b), (c), (d) or (e) that have been 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
(g) All renewals, extensions, refundings, deferrals, amendments or
modifications of any indebtedness or obligations of the kinds described in
any of the preceding clauses (a), (b), (c), (d), (e) or (f);
if and to the extent that any of the indebtedness or obligations described in
the preceding clauses (a), (b), (c), (d), (e), (f), and (g) (other than the
letters of credit described in the preceding clause (b) and the indebtedness
described in the preceding clause (c)) would appear as a liability upon the
Company's balance sheet as prepared in accordance with generally accepted
accounting principles, but in the case of each of the items described in the
preceding clauses (a), (b), (c), (d), (e), (f) and (g), excluding indebtedness
for trade payables or the deferred purchase price of assets or services incurred
by the Company in the ordinary course of business (or refinancings thereof).
Indenture: The term "Indenture" shall mean this instrument as originally
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executed or, if amended or supplemented as herein provided, as so amended or
supplemented.
Individual Accredited Investor: The term "Individual Accredited Investor"
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shall mean an individual "accredited investor" as defined in Rule 501(a)(5) or
(6) of Regulation D under the Securities Act.
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Institutional Accredited Investor: The term "Institutional Accredited
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Investor" shall mean an institutional "accredited investor" as such term is
defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities
Act.
Liquidated Damages: The term "Liquidated Damages" means all liquidated
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damages then owing pursuant to Section 3(e) of the Registration Rights
Agreement.
Note or Notes: The terms "Note" or "Notes" shall mean any Note or Notes,
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as the case may be, authenticated and delivered under this Indenture.
Noteholder or holder: The terms "Noteholder" or "holder" as applied to any
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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
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in Section 2.5(a).
Officer's Certificate: The term "Officer's Certificate", when used with
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respect to the Company, shall mean a certificate signed by one of the President,
the Chief Executive Officer, Chief Financial Officer, Executive or Senior Vice
President or any Vice President (whether or not designated by a number or
numbers or word added before or after the title "Vice President"), that is
delivered 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
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writing signed by legal counsel, who may be an employee of or counsel to the
Company, 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,
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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
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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;
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(c) Notes paid pursuant to Section 2.6 and 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 XV and
Notes deemed not outstanding pursuant to Section 3.2.
person: The term "person" shall mean an individual, a corporation, a
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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.
Predecessor Note: The term "Predecessor Note" of any particular Note shall
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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.
Registration Rights Agreement: The term "Registration Rights Agreement"
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means that certain Registration Rights Agreement, dated as of August 28, 2001,
between the Company and the initial purchasers of the Notes as such agreement
may be amended from time to time.
Repurchase Event: The term "Repurchase Event" shall have the meaning
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specified in Section 16.4.
Repurchase Price: The term "Repurchase Price" has the meaning specified in
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Section 16.1.
Responsible Officer: The term "Responsible Officer", when used with
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respect to the Trustee, shall mean an officer of the Trustee in the Corporate
Trust Office assigned and duly authorized by the Trustee to administer its
obligations under this Indenture.
Restricted Securities: The term "Restricted Securities" has the meaning
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specified in Section 2.5(d).
Securities Act: The term "Securities Act" means the Securities Act of
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1933, as amended, and the rules and regulations promulgated thereunder.
Significant Subsidiary: The term "Significant Subsidiary" means, with
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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 Commission.
Subsidiary: The term "Subsidiary" means a corporation more than 50% of the
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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
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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.
Trading Day: The term "Trading Day" has the meaning specified in Section
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15.5(h)(5).
Trust Indenture Act: The term "Trust Indenture Act" shall mean the Trust
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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,
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however, that in the event the Trust Indenture Act of 1939 is amended after the
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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
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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.
The definitions of certain other terms are as specified in Article XV and
Article XVI.
ARTICLE II
ISSUE, DESCRIPTION, EXECUTION, REGISTRATION AND EXCHANGE OF NOTES
Section 2.1 Designation, Amount and Issue of Notes. The Notes shall be
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designated as "7% Convertible Senior Notes due 2006." Notes not to exceed the
aggregate principal amount of $51,750,000 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, Chief Executive Officer, Executive or Senior Vice President or any
Vice President (whether or not designated by a number or numbers or word or
words added before or after the title "Vice President") and (b) Chief Financial
Officer, Treasurer or Assistant Treasurer or its Secretary or any Assistant
Secretary, without any further action by the Company hereunder.
Section 2.2 Form of Notes. The Notes and the Trustee's certificate of
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authentication to be borne by such Notes shall be substantially in the form set
forth in Exhibit A, which is incorporated in and made a part of this Indenture.
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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.
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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.
Section 2.3 Date and Denomination of Notes; Payments of Interest. The
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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 on each August 15 and
February 15 of each year, commencing February 15, 2002, as specified on the face
of the form of Note attached as Exhibit A hereto.
---------
Interest on the Notes shall be deemed to have commenced accruing on August
24, 2001.
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; provided that, in the case of any
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Note, or portion thereof, called for redemption pursuant to Article III on a
redemption date, or repurchased by the Company pursuant to Article XVI on a
repurchase date, during the period from the close of business on the record date
to the close of business on the Business Day next preceding the following
interest payment date, interest shall not be paid to the person in whose name
the Note, or portion thereof, is registered on the close of business on such
record date, and the Company shall have no obligation to pay interest on such
Note or portion thereof except to the extent required to be paid upon such
redemption or repurchase in accordance with Article III or Article XVI.
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
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holder of Notes with an aggregate principal amount equal to or in excess of
$500,000, 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 to any bank located in the United States 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 August 1 or February 1 preceding said August 15 or
February 15, respectively.
Interest on the Notes shall be computed on the basis of a 360-day year
comprised of twelve 30-day months.
Any interest on any Note which is payable, but is not punctually paid or
duly provided for, on any said August 15 or February 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:
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(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) 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 the facsimile 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 the
facsimile signature of its Chief Financial Officer, Treasurer or its Assistant
Treasurer, or 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 authenticating agent) upon any Note executed by
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the Company shall be conclusive evidence that the Note so authenticated has been
duly authenticated and delivered hereunder and that the holder thereof 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.
Section 2.5 Exchange and Registration of Transfer of Notes; Restrictions
------------------------------------------------------------
on Transfer.
-----------
(a) 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.
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.
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 office or agency maintained or designated pursuant to
Section 5.2 for such purpose. 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.
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.
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Prior and as a condition to any sale or transfer of a Note or the
Common Stock issued upon conversion thereof that bears the restrictive
legend set forth in Section 2.5(b) or Section 2.5(c), respectively (other
than pursuant to a registration statement that has been declared effective
under the Securities Act), such transferee shall, unless the Company
otherwise agrees in writing and so notifies the Trustee, furnish to the
Company and the Trustee a signed letter containing representations and
agreements relating to restrictions on transfer substantially in the form
set forth in Exhibit B to this Indenture and an opinion of counsel if the
---------
Company so requests (other than with respect to a transfer pursuant to an
effective registration statement under the Securities Act) and such
certificates and other information as the Company and/or the Trustee
reasonably may require to confirm that any such transfer is being made
pursuant to an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act. If such sale or transfer
of a Note or the Common Stock issued upon conversion thereof that bears the
restrictive legend set forth in Section 2.5(b) or Section 2.5(c),
respectively, is made pursuant to a registration statement that has been
declared effective under the Securities Act, such transferor shall deliver
a broker's letter or other evidence satisfactory to the Trustee and the
Company as to compliance with the prospectus delivery requirements under
the Securities Act.
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.
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 the mailing of the
notice of redemption 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.
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) Every Note that bears or is required under this Section 2.5(b) to
bear the legend set forth in this Section 2.5(b) (together with any Common
Stock issued upon conversion of the Notes and required to bear the legend
set forth in Section 2.5(c), collectively, the "Restricted Securities")
shall be subject to the restrictions on transfer set forth in this Section
2.5(b) (including the legend set forth below), unless such restrictions on
transfer shall be waived by written consent of the Company, and the holder
of each such Restricted Security, by such holder's acceptance thereof,
agrees to be bound by all such
-11-
restrictions on transfer. As used in Sections 2.5(b) and 2.5(c), the term
"transfer" encompasses any sale, pledge, transfer or other disposition
whatsoever of any Restricted Security.
Until two (2) years after the original issuance date of any Note, any
certificate evidencing such Note (and all securities issued in exchange
therefor or substitution thereof, other than Common Stock, if any, issued
upon conversion thereof which shall bear the legend set forth in Section
2.5(c), if applicable) shall bear a legend in substantially the following
form (unless such Note has been transferred pursuant to a registration
statement that has been declared effective under the Securities Act (and
which continues to be effective at the time of such transfer), or the Note
has been transferred pursuant to the exemption from registration provided
by Rule 144 under the Securities Act, or unless otherwise agreed by the
Company in writing, with notice thereof to the Trustee):
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
(THE "SECURITIES ACT"). THE HOLDER HEREOF, BY PURCHASING THIS
SECURITY, AGREES FOR THE BENEFIT OF THE ISSUER THAT THIS SECURITY MAY
NOT BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED OTHER THAN (1) TO THE
ISSUER, (2) IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH REGULATION S
UNDER THE SECURITIES ACT (AS INDICATED BY THE BOX CHECKED BY THE
TRANSFEROR ON THE CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS
SECURITY), (3) TO A PERSON THAT IS AN ACCREDITED INVESTOR AS DEFINED
IN RULE 501(A)(1), (2), (3), (5), (6) OR (7) OF REGULATION D UNDER THE
SECURITIES ACT (AS INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON
THE CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS SECURITY) AND THAT
IS ACQUIRING THIS SECURITY FOR INVESTMENT PURPOSES AND NOT FOR
DISTRIBUTION, AND A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS
AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THE
SECURITY EVIDENCED HEREBY (THE FORM OF WHICH LETTER IS AN EXHIBIT TO
THE INDENTURE GOVERNING THIS SECURITY AND MAY BE OBTAINED FROM THE
TRUSTEE AND/OR THE TRANSFER AGENT) IS DELIVERED PRIOR TO SUCH TRANSFER
BY THE TRANSFEREE TO THE ISSUER AND THE TRUSTEE AND/OR THE TRANSFER
AGENT, (4) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY
RULE 144 (IF APPLICABLE) UNDER THE SECURITIES ACT, (5) PURSUANT TO AN
EFFECTIVE REGISTRATION
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STATEMENT UNDER THE SECURITIES ACT OR (6) IN ACCORDANCE WITH ANOTHER
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, IN
EACH CASE IN ACCORDANCE WITH ANY OTHER APPLICABLE SECURITIES LAWS. THE
HOLDER HEREOF AGREES THAT, PRIOR TO SUCH TRANSFER, IT WILL FURNISH TO
THE ISSUER AND THE TRUSTEE AN OPINION OF COUNSEL IF THE ISSUER SO
REQUESTS (OTHER THAN WITH RESPECT TO A TRANSFER PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT) AND SUCH
CERTIFICATES AND OTHER INFORMATION AS THEY MAY REASONABLY REQUIRE TO
CONFIRM THAT ANY TRANSFER BY IT OF THIS SECURITY COMPLIES WITH THE
FOREGOING RESTRICTIONS AND IS BEING MADE PURSUANT TO AN EXEMPTION
FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. THE HOLDER HEREOF AGREES THAT IT
WILL DELIVER TO EACH PERSON TO WHOM THIS SECURITY OR AN INTEREST
HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF SUCH
LEGEND. THE HOLDER HEREOF, BY PURCHASING THIS SECURITY, REPRESENTS AND
AGREES FOR THE BENEFIT OF THE ISSUER THAT IT IS (1) AN ACCREDITED
INVESTOR AS DEFINED IN RULE 501(A)(1), (2), (3), (5), (6) OR (7) OF
REGULATION D UNDER THE SECURITIES ACT AND THAT IT IS HOLDING THIS
SECURITY FOR INVESTMENT PURPOSES AND NOT FOR DISTRIBUTION OR (2) A
NON-U.S. PERSON OUTSIDE THE UNITED STATES WITHIN THE MEANING OF (OR AN
ACCOUNT SATISFYING THE REQUIREMENTS OF RULE 902 UNDER) REGULATION S
UNDER THE SECURITIES ACT.
The Company may, but is not obligated to, instruct the Trustee to
place the following legend on any Note held by or transferred to an
"affiliate" (as defined in Rule 501(b) of Regulation D under the Securities
Act):
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE HELD BY A PERSON
WHO MAY BE DEEMED TO BE AN AFFILIATE OF THE ISSUER FOR PURPOSES OF
RULE 144 PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"1933 ACT"), AND MAY BE SOLD ONLY IN COMPLIANCE WITH RULE 144,
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933 ACT OR
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PURSUANT TO A VALID EXEMPTION FROM REGISTRATION UNDER THE 1933 ACT.
Any Note (or security issued in exchange or substitution therefor) as
to which such restrictions on transfer shall have expired in accordance
with their terms may, upon surrender of such Note for exchange to the Note
registrar in accordance with the provisions of this Section 2.5, be
exchanged for a new Note or Notes, of like tenor and aggregate principal
amount, which shall not bear the restrictive legend required by this
Section 2.5(b).
(c) Until two (2) years after the original issuance date of any Note,
any stock certificate representing Common Stock issued upon conversion of
such Note shall bear a legend in substantially the following form (unless
such Common Stock has been transferred pursuant to a registration statement
that has been declared effective under the Securities Act (and which
continues to be effective at the time of such transfer), or the Notes from
which such Common Stock was converted were transferred pursuant to a
registration statement that has been declared effective under the
Securities Act and which was effective at the time of such transfer, or the
Common Stock has been transferred pursuant to an exemption from
registration provided by Rule 144 under the Securities Act, or unless
otherwise agreed by the Company in writing with written notice thereof to
the Trustee and any transfer agent for the Common Stock):
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
(THE "SECURITIES ACT"). THE HOLDER HEREOF, BY PURCHASING THIS
SECURITY, AGREES FOR THE BENEFIT OF THE ISSUER THAT THIS SECURITY MAY
NOT BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED OTHER THAN (1) TO THE
ISSUER, (2) IN THE EVENT THIS SECURITY BECOMES ELIGIBLE FOR RESALE
PURSUANT TO RULE 144A UNDER THE SECURITIES ACT (`RULE 144A'), TO A
PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL
BUYER WITHIN THE MEANING OF RULE 144A PURCHASING FOR ITS OWN ACCOUNT
OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE
IS GIVEN THAT THE RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN
RELIANCE ON RULE 144A (AS INDICATED BY THE BOX CHECKED BY THE
TRANSFEROR ON THE CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS
SECURITY), (3) IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH
REGULATION S UNDER THE SECURITIES ACT (AS INDICATED BY THE BOX CHECKED
BY THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER ON THE REVERSE OF
THIS SECURITY), (4) TO A PERSON THAT IS
-14-
AN ACCREDITED INVESTOR AS DEFINED IN RULE 501(A)(1), (2), (3), (5),
(6) OR (7) OF REGULATION D UNDER THE SECURITIES ACT (AS INDICATED BY
THE BOX CHECKED BY THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER ON
THE REVERSE OF THIS SECURITY) THAT IS ACQUIRING THIS SECURITY FOR
INVESTMENT PURPOSES AND NOT FOR DISTRIBUTION, AND A SIGNED LETTER
CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE
RESTRICTIONS ON TRANSFER OF THE SECURITY EVIDENCED HEREBY (THE FORM OF
WHICH LETTER IS AN EXHIBIT TO THE AGREEMENT GOVERNING THIS SECURITY
AND MAY BE OBTAINED FROM THE TRANSFER AGENT) IS DELIVERED PRIOR TO
SUCH TRANSFER BY THE TRANSFEREE TO THE ISSUER AND THE TRANSFER AGENT,
(5) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144
(IF APPLICABLE) UNDER THE SECURITIES ACT, (6) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR (7) IN ACCORDANCE
WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ANY OTHER APPLICABLE
SECURITIES LAWS. THE HOLDER HEREOF AGREES THAT, PRIOR TO SUCH
TRANSFER, IT WILL FURNISH TO THE ISSUER AND THE TRANSFER AGENT AN
OPINION OF COUNSEL IF THE ISSUER SO REQUESTS (OTHER THAN WITH RESPECT
TO A TRANSFER PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT) AND SUCH CERTIFICATES AND OTHER INFORMATION AS
THEY MAY REASONABLY REQUIRE TO CONFIRM THAT ANY TRANSFER BY THE HOLDER
OF THIS SECURITY COMPLIES WITH THE FOREGOING RESTRICTIONS AND IS BEING
MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT
TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THE HOLDER
HEREOF AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS
SECURITY OR AN INTEREST HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY
TO THE EFFECT OF THIS LEGEND. THE HOLDER HEREOF, BY PURCHASING THIS
SECURITY, REPRESENTS AND AGREES FOR THE BENEFIT OF THE ISSUER THAT IT
IS (1) AN ACCREDITED INVESTOR AS DEFINED IN RULE 501(A)(1), (2), (3),
(5), (6) OR (7) OF REGULATION D UNDER THE SECURITIES ACT AND THAT IT
IS HOLDING THIS SECURITY FOR
-15-
INVESTMENT PURPOSES AND NOT FOR DISTRIBUTION OR (2) A NON-U.S. PERSON
OUTSIDE THE UNITED STATES WITHIN THE MEANING OF (OR AN ACCOUNT
SATISFYING THE REQUIREMENTS OF RULE 902 UNDER) REGULATION S UNDER THE
SECURITIES ACT.
The Company may, but is not obligated to, instruct the transfer agent
for the Company's Common Stock to place the following legend on any
certificate evidencing shares of Common Stock held by or transferred to an
"affiliate" (as defined in Rule 501(b) of Regulation D under the Securities
Act) of the Company:
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE HELD BY A PERSON WHO
MAY BE DEEMED TO BE AN AFFILIATE OF THE ISSUER FOR PURPOSES OF RULE
144 PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"1933 ACT"), AND MAY BE SOLD ONLY IN COMPLIANCE WITH RULE 144,
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933 ACT OR
PURSUANT TO A VALID EXEMPTION FROM REGISTRATION UNDER THE 1933 ACT.
Any such Common Stock as to which such restrictions on transfer shall
have expired in accordance with their terms may, upon surrender of the
certificates representing such shares of Common Stock for exchange in
accordance with the procedures of the transfer agent for the Common Stock,
be exchanged for a new certificate or certificates for a like aggregate
number of shares of Common Stock, which shall not bear the restrictive
legend required by this Section 2.5(c).
(d) Any Note or Common Stock issued upon the conversion or exchange
of a Note that, prior to the expiration of the holding period applicable to
sales thereof under Rule 144(k) under the Securities Act (or any successor
rule), is purchased or owned by the Company or any Affiliate thereof may
not be resold by the Company or such Affiliate unless registered under the
Securities Act or resold pursuant to an exemption from the registration
requirements of the Securities Act in a transaction that results in such
Notes or Common Stock, as the case may be, no longer being "restricted
securities" (as defined under Rule 144).
(e) Notwithstanding any provision of Section 2.5 to the contrary, in
the event Rule 144(k) as promulgated under the Securities Act (or any
successor rule) is amended to change the two-year period under Rule 144(k)
(or the corresponding period under any successor rule), from and after
receipt by the Trustee of the Officer's Certificate and Opinion of Counsel
provided for in this Section 2.5(e), (i) each reference in Section 2.5(b)
to "two (2) years" shall be deemed for all purposes hereof to be references
to such changed period, (ii) each reference in Section 2.5(c) to "two (2)
years" shall be deemed for all purposes hereof to be references to such
changed period and (iii) all corresponding references in the Notes
-16-
shall be deemed for all purposes hereof to be references to such changed
period, provided that such changes shall not become effective if they are
otherwise prohibited by, or would otherwise cause a violation of, the then-
applicable federal securities laws. As soon as practicable after the
Company has knowledge of the effectiveness of any such amendment to change
the two-year period under Rule 144(k) (or the corresponding period under
any successor rule), unless such changes would otherwise be prohibited by,
or would otherwise cause a violation of, the then-applicable securities
law, the Company shall provide to the Trustee an Officer's Certificate and
Opinion of Counsel informing the Trustee of the effectiveness of such
amendment and the effectiveness of the foregoing changes to Sections 2.5(b)
and 2.5(c) and the Notes. The provisions of this Section 2.5(e) will not be
effective until such time as the Opinion of Counsel and Officer's
Certificate have been received by the Trustee hereunder. This Section
2.5(e) shall apply to successive amendments to Rule 144(k) (or any
successor rule) changing the holding period thereunder.
(f) The Trustee shall have no obligation or duty to monitor,
determine or inquire as to compliance with any restrictions on transfer
imposed under this Indenture or under applicable law with respect to any
transfer of any interest in any Note other than to require delivery of such
certificates and other documentation or evidence as are expressly required
by, and to do so if and when expressly required by the terms of, this
Indenture, and to examine the same to determine substantial compliance as
to form with the express requirements hereof.
Section 2.6 Mutilated, Destroyed, Lost or Stolen Notes. 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 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.
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 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
-17-
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 will 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.
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 and thereupon any or all temporary Notes
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.
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 dispose of canceled Notes in
accordance with its customary procedures. If the Company shall
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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.
Section 2.9 CUSIP Numbers. The Company in issuing the Securities may use
-------------
"CUSIP" numbers (if then generally in use), and, if so, the Trustee shall use
"CUSIP" numbers in notices of redemption as a convenience to Holders; provided
--------
that any such notice may state that no representation is made as to the
correctness of such numbers either as printed on the Notes or as contained in
any notice of a redemption and that reliance may be placed only on the other
identification numbers printed on the Notes, and any such redemption shall not
be affected by any defect in or omission of such numbers. The Company will
promptly notify the Trustee of any change in the "CUSIP" numbers.
ARTICLE III
PROVISIONAL REDEMPTION OF NOTES
Section 3.1 Redemption Price. The Company may, at its option, redeem all
----------------
or any part of the Notes on any date prior to maturity, upon notice as set forth
in Section 3.2, and at a redemption price equal to $1,000 per $1,000 principal
amount of the Notes to be redeemed, plus accrued and unpaid interest, if any,
to, but excluding, the date of redemption, provided, however, that, prior to
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August 28, 2004, the Company shall only have such right of redemption if (1) the
Closing Price (as defined in Section 15.5(h)) per share of the Common Stock has
exceeded 200% of the Conversion Price then in effect (not including the effect
of any adjustment to the Conversion Price made pursuant to Section 15.11) for at
least twenty (20) Trading Days (as defined in Section 15.5(h)) within a period
of thirty (30) consecutive Trading Days (the "Determination Period") and (2)
within ten (10) days following the Determination Period, the Company mails to
holders the notice required pursuant to Section 3.2 (the date of such notice,
the "Notice Date"), and provided further that prior to the last date on which
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the shelf registration statement (the "Shelf Registration Statement")
contemplated by the Registration Rights Agreement covering resales of the Notes
and the Common Stock issuable upon conversion of the Notes is required to remain
effective pursuant to the Registration Rights Agreement, such Shelf Registration
Statement is effective and available for use at all times during the period
beginning thirty (30) days prior to the Notice Date and ending on the earlier of
the redemption date or the last date on which the Shelf Registration Statement
is required to remain effective and available pursuant to the Registration
Rights Agreement, and is expected to remain effective and available for use
until the earlier of thirty (30) days following the redemption date or the last
date on which the Shelf Registration Statement is required to remain effective
pursuant to the Registration Rights Agreement. If the Company exercises such
right of redemption prior to August 28, 2002, the Company shall make an
additional payment in cash to holders of the redeemed Notes with respect to the
Notes called for redemption, in an amount (the "Provisional Payment") equal to
$70 per each $1,000 principal amount of the Note, less the amount of any
interest actually paid on such Notes prior to the date of notice of redemption
is mailed. The Company shall
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make this additional payment on all Notes called for redemption prior to August
28, 2002, including any Notes converted after the date the notice of redemption
is mailed and before the provisional redemption date.
Section 3.2 Notice of Redemption; Selection of Notes. 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 sixty (60) and not more than
ninety (90) days prior to the date fixed 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.
Each such notice of redemption shall specify the aggregate principal amount
of Notes to be redeemed, the "CUSIP" number or numbers of such Notes, if any,
the date fixed for redemption, the redemption price at which Notes are to be
redeemed, the amount of the Provisional Payment, if any, 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.
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
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of such Note, including the Provisional Payment, if any, shall be paid to the
Company upon its request, or, if then held by the Company shall be discharged
from such trust.
If fewer than all the Notes are to be redeemed, the Company will give the
Trustee written notice in the form of an Officer's 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), on a pro rata basis, 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 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.
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. 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 the Provisional Payment, if any, and 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 the Provisional Payment, if any, and 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 specified in said notice, 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 the Provisional Payment, if any, and
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.
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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.
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) or (e),
a Responsible Officer of the Trustee has actual 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 the Provisional Payment, if any, and interest
accrued to the date fixed for redemption, of such Notes. Notwithstanding
anything to the contrary contained in this Article III, the obligation of the
Company to pay the redemption price of such Notes, together with the Provisional
Payment, if any, and 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 XV) 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 loss, liability 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.
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ARTICLE IV
[Intentionally Omitted.]
ARTICLE V
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. Liquidated damages paid pursuant to Section 15.2 hereof, if any, shall be
paid within ten (10) Business Days of the date from which such liquidated
damages accrued pursuant to Section 15.2. Liquidated Damages on the Notes paid
pursuant to Section 3(e) of the Registration Rights Agreement, if any, shall be
paid at the times and in the manner provided therein. 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 $500,000, 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.
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 presented 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.
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The Company hereby initially designates the Trustee as paying agent, Note
registrar 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 Bank of New York, located at 000 Xxxxxxx Xxxxxx, Xxxxx
00X, Xxx Xxxx, Xxx Xxxx 00000, Attention: Corporate Trust Administration, as one
such office or agency of the Company for each of the aforesaid purposes.
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
(including Liquidated Damages, if any) 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
(including Liquidated Damages, if any) 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
(including Liquidated Damages, if any) 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 (including
Liquidated
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Damages, if any) 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 (including Liquidated Damages, if any) 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 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 XII, 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 Information Requirement. Within the period prior to the
-----------------------
expiration of the holding period applicable to sales thereof under Rule 144(k)
under the Securities Act (or any successor provision), the Company covenants and
agrees that it shall, during any period in which it is not subject to Section 13
or 15(d) under the Exchange Act, make available to any holder or beneficial
holder of Notes or any Common Stock issued upon conversion thereof, in each case
which continue to be Restricted Securities, in connection with any sale thereof
and any prospective purchaser of Notes or such Common Stock from such holder or
beneficial holder, the information required pursuant to Rule 144A(d)(4) under
the Securities Act upon the request of any holder or beneficial holder of the
Notes or such Common Stock and it will take such further action as any holder or
beneficial holder of such Notes or such Common Stock may reasonably request.
Section 5.7 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 that 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 5.8 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 January 31, 2002) an Officer's
Certificate stating whether or not to the best of their knowledge the
-25-
signers know of any default or Event of Default that occurred during such
period. If they do, such Officer's Certificate shall describe the default or
Event of Default and its status.
The Company shall deliver to the Trustee, as soon as possible and in any
event within five days after the Company becomes aware of the occurrence of any
Event of Default or an event which, with notice or the lapse of time or both,
would constitute an Event of Default, an Officer's Certificate setting forth the
details of such Event of Default or default and the action which the Company
proposes to take with respect thereto.
Section 5.9 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 5.10 Limitation on Dividends and Distributions. So long as
-----------------------------------------
$12,937,500.00 or more in aggregate principal amount of the Notes remain
outstanding, the Company shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly: (i) declare or pay any dividend on, or make any
distribution with respect to, its Common Stock or the common stock of any of its
Subsidiaries (other than such dividends or distributions by the Company made in
Common Stock or of rights pursuant to any stockholders' rights plan adopted by
the Company); or (ii) purchase, redeem or otherwise acquire for value any such
Common Stock or any such Subsidiary's common stock; provided, however, that the
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foregoing provisions shall not prohibit (A) the Company's compliance with
Section 1.4(b) of that certain Investment Agreement, dated as of June 9, 2000,
by and between the Company and America Online, Inc., as amended as of September
11, 2000 and as of January 30, 2001, pursuant to which the Company may be
required to repurchase shares of Common Stock held by America Online, Inc.; (B)
the repurchase, redemption or other acquisition for value of any Common Stock in
exchange for, or out of the net cash proceeds of the substantially concurrent
sale of, other Equity Interests of the Company; (C) the repurchase, redemption
or other acquisition for value of any Common Stock held by any employee,
consultant or director of the Company or any of its Subsidiaries pursuant to any
stock option plan or restricted stock plan, or any employee, consultant,
director or management equity subscription agreement or stock option agreement,
approved by the Board of Directors, (D) dividends or distributions by any such
Subsidiary to the Company or to another such Subsidiary; or (E) dividends or
distributions by any such Subsidiary to any other holder of its common stock
made pro rata to all holders of such Subsidiary's common stock.
--- ----
Section 5.11 Limitation on Incurrence of Indebtedness of Subsidiaries. The
--------------------------------------------------------
Company shall not permit any of its Subsidiaries to create, incur, issue,
assume, guarantee or otherwise become liable (including as a result of an
acquisition of property or any person, any of the foregoing, an "Incurrence"),
contingently or otherwise, with respect to any Indebtedness in an amount
exceeding $5,000,000. The foregoing shall not prohibit (i) the Incurrence by a
Subsidiary of the Company of any Indebtedness to the Company or any other
Subsidiary of the Company or (ii) the Incurrence of Indebtedness by any
Subsidiary of the Company to refund, refinance or repurchase outstanding
-26-
Indebtedness of a Subsidiary, provided that there is not outstanding immediately
--------
thereafter Indebtedness of Subsidiaries in an aggregate amount exceeding
$5,000,000.
ARTICLE VI
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 August 15 and February 15 in each year
beginning with February 15, 2002 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.
Section 6.3 Reports by Trustee.
------------------
(a) After this Indenture has been qualified under the Trust
Indenture Act, 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. If required by Section 313(a) of the Trust Indenture Act, the
Trustee shall, within sixty days after each January 15 following the date of
this Indenture deliver to holders a brief report, dated as of such January 15
which complies with the provisions of such Section 313(a).
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(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 and with the Company.
The Company will notify the Trustee as soon as practicable 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) After this Indenture has been qualified under the Trust
Indenture Act, 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) During any period in which the Company is not subject to
Section 13 or 15(d) under the Exchange Act, the Company will deliver to the
Trustee (a) as soon as available and in any event within ninety (90) days after
the end of each fiscal year of the Company (i) 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 (ii) 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 (b) 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 (i) 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, information and documents to the Trustee is for informational purposes
only and the Trustee's receipt of such shall not constitute constructive notice
of any information contained therein or determinable from information contained
therein, including the Company's compliance with any of its covenants hereunder
(as to which the Trustee is entitled to rely exclusively on Officer's
Certificates).
ARTICLE VII
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,
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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
(including, without limitation, the Provisional Payment), 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;
or
(b) default for thirty (30) days in the payment of any installment
of interest or Liquidated Damages, if any, upon any of the Notes as and
when the same shall become due and payable; or
(c) failure by the Company to deliver shares of Common Stock
required to be delivered upon conversion of a Note in accordance with
Article XV within thirty (30) calendar days of such Conversion Date; 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 sixty (60) 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 XVI; 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 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
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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 (including Liquidated Damages to the extent accrued and unpaid)
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. Notwithstanding the foregoing 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 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
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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
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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.
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
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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 (including Liquidated Damages, if any) 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.
In any proceedings brought by the Trustee (and in any proceedings involving
the interpretation of any provision of this Indenture to which the Trustee
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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 VII 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: 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: 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: To the payment of the remainder, if any, to the Company.
Section 7.4 Proceedings by Noteholder. No holder of any Note shall have
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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 pursuant to Section 7.7; it being understood and intended, and being
expressly covenanted by the taker and holder
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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 (including Liquidated Damages to
the extent accrued but unpaid) 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 VII
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 VII 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
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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
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of conducting any proceeding for any remedy available to the Trustee or
exercising any trust or power conferred on the Trustee; provided, however, that
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(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 not less
than 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 XI cannot be modified or
amended without the consent of all affected holders of 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 actually 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 (including Liquidated Damages to the extent accrued but unpaid)
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 and expenses, 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
(including Liquidated Damages to the extent accrued but unpaid) on any Note
(including, but not limited to, the redemption
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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 XV.
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 VIII
CONCERNING THE TRUSTEE
Section 8.1 Duties and Responsibilities of Trustee. The Trustee, prior to
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the occurrence of an Event of Default and after the curing or waiver of all
Events of Default that 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 that 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; provided, however, in the case of any such
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certificates or opinions that by any provisions hereof are specifically
required to be furnished to the Trustee, the Trustee
-36-
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 proved 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 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 conclusively 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 Officer's
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;
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(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
reasonable security or indemnity reasonably 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 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;
(g) 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;
(h) 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 Notes and this Indenture; and
(i) the rights, privileges, protections, immunities and benefits given
to the Trustee, including, without limitation, its right to be indemnified,
are extended to, and shall be enforceable by, the Trustee in each of its
capacities hereunder, and to each agent, custodian and other Person
employed to act hereunder.
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
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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 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 in writing from time to time 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 as the Company and the Trustee shall from time to
time agree in writing for all services rendered by it hereunder in any capacity
(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 or any
predecessor 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,
damages, claims, liability or expense 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 (whether asserted by the Company, a Holder or any other Person) of
liability 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 upon all
property and funds held or collected by the Trustee as such, except, subject to
the effect of Sections 4.3 and 7.5, funds held in
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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. 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(i) or (j)
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 Officer's 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 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 Officer's Certificate delivered to the Trustee, and such
Officer's 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. After qualification under
--------------------------------
the Trust Indenture Act, 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 that 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
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mailing of such notice of resignation to the Noteholders, the resigning
Trustee may, at the expense of the Company, petition any court of competent
jurisdiction 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
(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.
(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, at the expense of the Company, 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.
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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. 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 (including the trust created by this Indenture), 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
-42-
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), after qualification under the Trust Indenture Act, 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).
ARTICLE IX
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 (including
Liquidated Damages to the
-43-
extent accrued but unpaid) on such Note, for conversion of such Note and for all
other purposes; and neither the Company nor the Trustee nor any authenticating
agent 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 that
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 actually 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 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 Officer's
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
Officer's 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.
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ARTICLE X
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 X
for any of the following purposes:
(1) 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 VII;
(2) to remove the Trustee and nominate a successor trustee
pursuant to the provisions of Article VIII;
(3) to consent to the execution of an indenture or indentures
supplemental hereto pursuant to the provisions of Section 11.2;
(4) 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
(5) to take any other action authorized by this Indenture or
under applicable law.
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 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
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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 10.4 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 10.5 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 10.6 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 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
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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 10.7 No Delay of Rights by Meeting. Nothing contained in this
-----------------------------
Article X shall be deemed or construed to authorize or permit, by reason of any
call of a meeting of Noteholders or any rights expressly or implicitly 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 XI
AMENDMENTS; SUPPLEMENTAL INDENTURES
Section 11.1 Amendments; 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
amendments 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) 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, limited
liability company, partnership or trust to the Company, or successive
successions, and the assumption by the successor corporation, limited
liability company, partnership or trust of the covenants, agreements and
obligations of the Company pursuant to Article XII;
(d) to add to the covenants of the Company such further
covenants, restrictions or conditions as the Board of Directors and the
Trustee shall consider to be 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
-47-
grace after default (which 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; provided, however, the
-------- -------
Trustee shall not be obligated to and may, in its discretion, enter into any
supplemental indenture that affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
Any amendment or 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 Amendments; Supplemental Indentures with Consent of
---------------------------------------------------
Noteholders. With the consent (evidenced as provided in Article IX) 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 amendments 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 amendment or supplemental
-------- -------
indenture shall (i) extend the fixed maturity of any Note, or reduce the rate or
extend the time of payment of interest thereon, or reduce the principal amount
thereof or premium, if any, thereon, or reduce any amount payable on redemption
or repurchase thereof, impair, or change in any respect
-48-
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
impair or adversely affect the right of any Noteholder to institute suit for the
payment thereof, or change the currency in which the Notes are payable, or
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 subordinate in right of payment the Notes to any other
Indebtedness, without the consent of the holder of each Note so affected, or
(ii) reduce the aforesaid percentage of Notes, the holders of which are required
to consent to any such supplemental indenture, without the consent of the
holders of all Notes then outstanding.
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 amendment or 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
amendment or supplemental indenture unless such amendment or 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 amendment or 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 Amendments and Supplemental Indentures. Any
-------------------------------------------------
amendment or supplemental indenture executed pursuant to the provisions of this
Article XI shall comply with the Trust Indenture Act, as then in effect;
provided that this Section 11.3 shall not require such amendment or supplemental
indenture or the Trustee to be qualified under the Trust Indenture Act prior to
the time such qualification is in fact required under the terms of the Trust
Indenture Act or the Indenture has been qualified under the Trust Indenture Act,
nor shall it constitute any admission or acknowledgement by any party to such
amendment or supplemental indenture that any such qualification is required
prior to the time such qualification is in fact required under the terms of the
Trust Indenture Act or the Indenture has been qualified under the Trust
Indenture Act. Upon the execution of any amendment or supplemental indenture
pursuant to the provisions of this Article XI, 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 amendment or supplemental indenture pursuant to the
provisions of this Article XI may bear a notation in form approved by the
Trustee as to any matter provided for in such amendment or
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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 amendment
or 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 Amendment or Supplemental
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Indenture to be Furnished to Trustee. The Trustee, subject to the provisions
------------------------------------
of Sections 8.1 and 8.2, shall receive an Officer's Certificate and an Opinion
of Counsel as conclusive evidence that any amendment or supplemental indenture
executed pursuant hereto complies with the requirements of this Article XI.
ARTICLE XII
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 or substantially all its
assets, 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 or substantially all assets, 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 (including Liquidated Damages, if any) on all of the Notes as
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 XVI;
(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
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(c) the Company has delivered to the Trustee an Officer's
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 IX.
Section 12.2 Successor Entity 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 entity, 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 (including
Liquidated Damages, if any) 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 entity 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 entity thereupon may cause to be
signed, and may issue either in its own name or in the name of TiVo Inc. 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 entity 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 entity
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 XII 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.
Section 12.3 Opinion of Counsel to be Given Trustee. The Trustee, subject
--------------------------------------
to Sections 8.1 and 8.2, shall receive an Officer's Certificate and an Opinion
of Counsel as conclusive evidence that any such consolidation, merger, sale,
conveyance or lease and any such assumption complies with the provisions of this
Article XII.
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ARTICLE XIII
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 that 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 (including Liquidated Damages, if any) 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 Officer's 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, 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 thereupon such paying agent shall be released
from all further liability with respect to such monies.
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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 (including Liquidated
Damages, if any) on such Notes, as the case may be, shall have become due and
payable, shall be repaid to the Company by the Trustee on written 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
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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 XIV
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS
Section 14.1 Indenture and Notes Solely Corporate Obligations. No
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recourse for the payment of the principal of or premium, if any, or interest
(including Liquidated Damages, if any) 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.
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ARTICLE XV
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 August 15, 2006 (except that, with respect to
any Note or portion of a Note that 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 of such Note or portion of a Note unless the Company
shall default in payment due upon redemption 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 XV. 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 XV only if such holder withdraws such notice by delivering a written
notice of withdrawal to the Company prior to the close of business on the last
Business Day prior to the day fixed for repurchase.
Section 15.2 Exercise of Conversion Privilege; Issuance of Common Stock on
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Conversion. 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, shall give
written notice of conversion in the form provided on the Notes (or such other
notice that is acceptable to the Company), shall provide copies of such notice
via facsimile to the Company, attention General Counsel ((000) 000-0000) and
Xxxxxx & Xxxxxxx, attention Xxxx Xxxxxxx ((000) 000-0000), and shall provide
such additional documentation or certification as the Company and/or the Trustee
may reasonably request to the office or agency specified in said notice that the
holder elects to convert such Note or such portion thereof. Such notice shall
also state the name or names (with address) in which the 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 (including a broker's
letter regarding compliance with the prospectus delivery requirement, if
applicable) in form satisfactory to the Company duly executed by, the holder or
his duly authorized attorney.
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The Company shall use its reasonable best efforts to, within three (3)
Business Days after the Conversion Date (as defined below) with respect to any
Note, 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), issue and deliver to such holder at the office or agency maintained
by the Company for such purpose pursuant to Section 5.2, 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 ten (10) Business Days after the Conversion Date). 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.
If the Company shall not have delivered the number of shares of Common
Stock issued upon conversion of Notes by any holder within ten (10) Business
Days after the Conversion Date with respect to such Notes, the Company shall pay
liquidated damages to such holder in the amount of one percent (1%) of the
outstanding principal amount of Notes so converted by such holder.
The 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) (such
date, the "Conversion Date"), and the person in whose name any shares of Common
Stock shall be issuable upon such conversion shall be deemed to have become on
the Conversion Date the holder of record of the shares represented thereby;
provided, however, that any such surrender on any date when the stock transfer
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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. For purposes of determining satisfaction of the
requirement set forth above with respect to the Conversion Date for any Note,
any facsimile required to be sent shall be deemed to have been sent on a given
day if such facsimile was sent before 11:00 a.m., New York City time, on such
date, to the number listed above (unless a different number is specified in a
notice filed with the Trustee and mailed by the Trustee, at the Company's
expense, to each holder of the Notes at such holder's address appearing in the
Note register, as provided for in Section 2.5 of this Indenture) and a
confirmation of transmission of such facsimile is obtained.
The Company shall pay in cash, on any Note or portion thereof surrendered
for conversion during the period from the close of business on any interest
payment date to which interest has been fully paid through the close of business
on the Business Day preceding the record date for the next such interest payment
date, accrued and unpaid interest, if any, to, but excluding, the date of
conversion. Any such payment of interest shall be made with respect to such
Note within ten (10) Business Days after the Conversion Date. Notwithstanding
the foregoing, any Note or portion
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thereof surrendered for conversion during the period from the close of business
on the record date for any interest payment date through the close 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 shall have become due prior to such interest payment date as a
result of a Repurchase Event) 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
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shall exist at the time of conversion a default in the payment of interest on
the Notes. Except as provided 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.
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 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 thereof 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 calculate and pay a cash adjustment in lieu of such fractional
share 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 XV.
---------
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 to all holders of the outstanding Common Stock in shares of
Common Stock, the Conversion Price in effect at the opening of business on
the date following the date fixed for the determination of stockholders
entitled to receive such dividend or other distribution shall be reduced by
multiplying such Conversion Price by a fraction 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
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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 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.
(c) Subject to Section 15.11(b) hereof, in case the Company shall
issue rights or warrants to all holders of its outstanding shares of Common
Stock entitling them (for a period expiring within forty-five (45) days
after the date fixed for the determination of stockholders entitled to
receive such rights or warrants) 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 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 sum of the number of shares of Common Stock outstanding at the close
of business on the Record Date plus the number of shares that 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 sum of the number of shares of Common Stock
outstanding at 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 or warrants, upon the expiration or termination of such rights
or warrants the Conversion Price shall be readjusted to the Conversion
Price that 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 that 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.
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(d) Subject to Section 15.11(b) hereof, 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 or other assets (including securities, but excluding (1) any
rights or warrants referred to in Section 15.5(c) and (2) dividends and
distributions paid exclusively in cash (except as set forth in Section
15.5(e) and (f), (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, 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
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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 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 that determining the fair market value during the
Reference Period would not be in the best interest of the Noteholder.
In the event that the Company implements a new 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
or warrants
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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 or warrants for the purposes of this
Section 15.5(d).
Rights or warrants distributed by the Company to all holders of Common
Stock entitling the holders thereof to subscribe for or purchase shares of
the Company's capital stock (either initially or under certain
circumstances), which rights or warrants, until the occurrence of a
specified event or events ("Trigger Event"): (i) are deemed to be
transferred with such shares of Common Stock; (ii) are not exercisable; and
(iii) are also issued in respect of future issuances of Common Stock, shall
be deemed not to have been distributed for purposes of this Section 15.5(d)
(and no adjustment to the Conversion Price under this Section 15.5(d) will
be required) until the occurrence of the earliest Trigger Event. If such
right 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 or warrant (and a termination or expiration of
the existing right or warrant without exercise by the holder thereof). In
addition, in the event of any distribution (or deemed distribution) of
rights or warrants, or any Trigger Event or other event (of the type
described in the preceding sentence) with respect thereto, that resulted in
an adjustment to the Conversion Price under this Section 15.5(d), (1) in
the case of any such rights or warrants that 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 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 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 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.
For purposes of this Section 15.5(d) and Sections 15.5(a) and (c), any
dividend or distribution to which this Section 15.5(d) is applicable that
also includes shares of Common Stock, or rights or warrants to subscribe
for or purchase shares of Common Stock to which Section 15.5(c) 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(c) applies (and any Conversion Price reduction required
by this Section 15.5(e) 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 (c) with
respect to such dividend or distribution shall then be made, except (A) the
Record Date of such dividend or distribution shall be
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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(c) 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 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 that would then be in effect if such dividend or
distribution had not been declared.
(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
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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
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 that 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).
(g) In case of a tender or exchange offer made by a person other than
the Company or any Subsidiary for an amount that increases the offeror's
ownership of Common Stock to more than 25% of the Common Stock outstanding
and shall involve the payment by
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such person of consideration per share of Common Stock having a fair market
value (as determined by the Board of Directors in good faith, whose
determination shall be conclusive, and described in a resolution of the
Board of Directors) 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 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 that 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 XII.
(h) For purposes of this Section 15.5 and Section 15.11, 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
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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 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
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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 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 such other national security exchange, as applicable, 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) and Section 15.11, 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
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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 under
this Section 15.5 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 XV 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 provided in this
Section 15.5, the Company shall promptly file with the Trustee and any
conversion agent other than the Trustee an Officer's 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 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.
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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 person 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,
(iii) any statutory exchange as a result of which holders of Common Stock
generally shall be entitled to receive stock, securities or other property or
assets (including cash) with respect to or in exchange for such Common Stock
(such transaction, a "Statutory Exchange"), or (iv) any sale or conveyance of
the properties and assets of the Company as, or substantially as, an entirety to
any other person 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 person, 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, Statutory
Exchange, 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, Statutory Exchange, sale or conveyance assuming such holder
of Common Stock did not exercise his rights of election, if any, that holders of
Common Stock who were entitled to vote or consent to such transaction had as to
the kind or amount of securities, cash or other property receivable upon such
consolidation, merger, combination, Statutory Exchange, sale or conveyance
(provided that, if the kind or amount of securities, cash or other property
receivable upon such consolidation, merger, combination, 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,
combination, 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. If, in the case of any such
reclassification, change, consolidation, merger, combination, Statutory
Exchange, 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 person other than the successor or
purchasing person, as the case may be, in such reclassification, change,
consolidation, merger, combination, Statutory Exchange, sale or conveyance, then
such supplemental indenture shall also be executed by such other person 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 XVI herein.
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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.
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 New York Stock Exchange, 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
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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 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 whether a supplemental indenture need be entered into under Section
15.6 or the correctness of any provisions contained in any supplemental
indenture entered into pursuant to such section 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 Officer's 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
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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.
Section 15.11 Additional Conversion Price Adjustments
---------------------------------------
(a) In addition to any adjustments to the Conversion Price required
to be made pursuant to Section 15.5, the Conversion Price (1) shall be
adjusted on the date which is the earlier of (A) the date by which the
Company is required to have had the Shelf Registration Statement declared
effective by the Securities and Exchange Commission or be subject to
Liquidated Damages under the Registration Rights Agreement or (B) two
calendar days after the date on which the Commission declares effective the
Shelf Registration Statement (the earlier of such date, the "Registration
Date"), if the Current Market Price on the Registration Date is less than
the Conversion Price otherwise in effect on the Registration Date, to the
greater of such Current Market Price or 75% of the Benchmark Price (as
defined below) and (2) shall be adjusted on August 23, 2002 (the "August
23, 2002 Date" and, together with the Registration Date, the "Adjustment
Date"), if the Current Market Price on the August 23, 2002 Date is less
than the Conversion Price otherwise in effect on the August 23, 2002 Date,
to the greater of such Current Market Price or 75% of the Benchmark Price;
provided, however, that in no event shall the Conversion Price be increased
by any such adjustment. For purposes of this Section 15.11, the "Benchmark
Price" shall mean $5.61, which price shall be subject to adjustment as
provided in the following sentence. If, prior to the applicable Adjustment
Date, any event occurs that would require an adjustment to the Conversion
Price pursuant to Section 15.5 or Section 15.6 (without taking into account
the effect of Section 15.5(i)), then, for each such event, the Benchmark
Price shall be adjusted in substantially the same manner in accordance with
the Conversion Price adjustment provisions set forth in Section 15.5 as
determined in good faith by the Board of Directors and set forth in an
Officer's Certificate in accordance with Section 15.11(c) hereof. The
phrase "date in question" in Section 15.5(h)(2) used in determining the
Current Market Price for this Section 15.11 shall be the applicable
Adjustment Date, and the occurrence of any event of the type set forth in
Section 15.5(h)(2) that would require an adjustment in the Closing Price
for any Trading Day in such period of ten (10) consecutive Trading Days
prior to the applicable Adjustment Date pursuant to Section 15.5(h)(2) will
also result in an appropriate adjustment to the Current Market Price for
the purposes of this 15.11 in substantially the same manner as Section
15.5(h)(2) requires with regard to an event for which such Section
15.5(h)(2) designates an "ex" date, all as reasonably determined in good
faith by the Board of Directors.
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(b) In addition to any adjustments to the Conversion Price required
to be made pursuant to Section 15.5, Section 15.6 or Section 15.11(a):
(i) If, at any time prior to August 28, 2003, the Company
issues, in a single transaction, Additional Stock (as defined below)
consisting of (x) a Primary Security (as defined below) plus (y)
warrants to purchase Common Stock (such warrants, together with the
Primary Security, the "Combined Securities"), with an Effective
Primary Security Issuance Price (as defined below) that is less than
the Effective Conversion Price (as defined below) otherwise in effect
immediately prior to such issuance, the Conversion Price shall
thereupon be adjusted so that the Effective Conversion Price equals
the Effective Primary Security Issuance Price.
(ii) If, at any time prior to August 28, 2003, the Company
issues Additional Stock with a New Issuance Price (as defined below)
that is less than the Effective Conversion Price otherwise in effect
immediately prior to such issuance, the Conversion Price shall
thereupon be adjusted so that the Effective Conversion Price equals
the New Issuance Price; provided, however, that in the event that any
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Common Stock Equivalent constituting such newly issued Additional
Stock contains an adjustment provision pursuant to which the New
Issuance Price may itself be adjusted in certain circumstances and
such adjustment occurs, resulting in a reduction in the New Issuance
Price (such reduced price, the "Adjusted New Issuance Price") to a
price lower than the Conversion Price, regardless of whether such
adjustment occurs after August 28, 2003, the Conversion Price shall
thereupon be adjusted so that the Effective Conversion Price equals
the Adjusted New Issuance Price;
provided, however, that in no event shall the Conversion Price be increased
by any such adjustment.
In the event that an issuance by the Company of Additional Stock would
be covered by this Section 15.11(b) as well as either Section 15.5(a) or
Section 15.5(b), no adjustment pursuant to this Section 15.11(b) shall be
made, and the only adjustment to the Conversion Price for such issuance of
Additional Stock shall be made pursuant to Section 15.5(a) or Section
15.5(b), as applicable. In the event that an issuance by the Company of
Additional Stock would be covered by this Section 15.11(b) as well as
either Section 15.5(c) or Section 15.5(d), no adjustment pursuant to
Section 15.5(c) or Section 15.5(d) shall be made, and the only adjustment
to the Conversion Price for such issuance of Additional Stock shall be made
pursuant to this Section 15.11(b).
The term "Primary Security" shall mean the security (whether in the
form of Common Stock or a Common Stock Equivalent) to which the largest
percentage of the purchase price for the Combined Securities is allocated
for income tax purposes by the Company.
The term "Effective Conversion Price" shall mean the product of the
Conversion Price otherwise in effect (not including the effect of any
adjustments made pursuant to
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Section 15.11(a)) and the percentage of the aggregate purchase price for
the securities purchased under that certain Note, Unit and Warrant Purchase
Agreement, dated as of August 23, 2001, allocated to the Notes. The initial
Effective Conversion Price hereunder shall be $5.45.
The term "New Issuance Price" shall mean the per share price, the
conversion price or the exercise price, as applicable, of the Additional
Stock.
The term "Effective Primary Security Issuance Price" shall mean the
product of (i) the per share price, conversion price or exercise price, as
applicable, of the Primary Security and (ii) the percentage of the purchase
price for the Combined Securities allocated to the Primary Security for
income tax purposes by the Company.
The term "Additional Stock" shall mean any shares of Common Stock or
Common Stock Equivalents issued by the Company other than:
(A) shares of Common Stock or Common Stock Equivalents issued in
a transaction covered by the Conversion Price adjustments
described in Section 15.5;
(B) shares of Common Stock or Common Stock Equivalents issued
for noncash consideration in connection with any arm's
length commercial agreement approved by the Board of
Directors, so long as the market value of all such shares of
Common Stock, together, with respect to Common Stock
Equivalents, with the market value of all shares of Common
Stock into or for which such Common Stock Equivalents are
convertible, exchangeable or exercisable, which market value
for each such issuance shall be measured at the time of such
issuance, does not exceed a cumulative aggregate of
$20,000,000, as determined by the Board of Directors in
reasonable good faith;
(C) shares of Common Stock and Common Stock Equivalents issued
for cash consideration in connection with any arm's length
commercial agreement approved by the Board of Directors, so
long as the cumulative aggregate market value of all such
shares of Common Stock (or with respect to Common Stock
Equivalents, the cumulative aggregate market value of all
shares of Common Stock into or for which such Common Stock
Equivalents are convertible, exchangeable or exercisable),
at the time of each such issuance, does not exceed
$10,000,000;
(D) shares of Common Stock or Common Stock Equivalents issued or
issuable to the Company's employees, consultants or
directors directly
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or pursuant to a stock option plan or restricted stock plan
approved by the Board of Directors;
(E) warrants with an exercise price that is equal to or greater
than the Current Market Price on the date of issuance,
issued to financial institutions or lessors in connection
with commercial credit arrangements or equipment financings;
(F) shares of Common Stock or Common Stock Equivalents issuable
upon exercise of Common Stock Equivalents outstanding as of
the date hereof;
(G) shares of Common Stock or Common Stock Equivalents issued in
connection with bona fide acquisitions, mergers or similar
transactions, the terms of which are approved by the Board
of Directors; and
(H) shares of Common Stock issued or issuable upon conversion of
the Notes or exercise of the warrants issued pursuant to
those certain warrant agreements, dated as of the date
hereof, by and between the Company and The Bank of New York,
as warrant agent.
(c) Whenever the Conversion Price or Benchmark Price is adjusted as
provided in this Section 15.11, the Company shall promptly file with the
Trustee and any conversion agent other than the Trustee an Officer's
Certificate setting forth the Conversion Price or Benchmark Price, as the
case may be, 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 or Benchmark Price setting forth the adjusted Conversion
Price or Benchmark Price, as the case may be, and the date on which such
adjustment became effective and shall mail such notice of such adjustment
of the Conversion Price or Benchmark Price, as the case may be, 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 affect the
legality or validity of any such adjustment.
ARTICLE XVI
REPURCHASE UPON A REPURCHASE EVENT
Section 16.1 Repurchase Right. If, at any time prior to August 15, 2006
----------------
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
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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 110% 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"); provided, however, that if such repurchase date
-------- -------
is August 15 or February 15 then the interest payable on such date shall be paid
to the holder of record of the Note on the next preceding August 15 or February
15, respectively. Notwithstanding anything in this Article XVI to the contrary,
if a redemption date pursuant to Article III shall occur prior to any repurchase
date established pursuant to a Company Notice under Section 16.2 hereof,
provided that the Company shall have deposited or set aside an amount of money
sufficient to redeem such Notes as set forth in Section 3.2 on or before such
repurchase date, all such Notes shall be redeemed pursuant to Article III and
the repurchase rights hereunder shall have no effect.
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 and deposited or set aside an amount of money
sufficient to redeem such Notes on the redemption date as set forth in
Section 3.2, on or before the tenth (10th) 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;
(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.
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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 close of business on the thirty-fifth (35th) day
after the Company Notice was mailed (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 (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 that 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 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 and such cash payment is to
--------
be 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.
(f) If the Company is unable to repurchase on the repurchase date all
of the Notes (or portions thereof) as to which the repurchase right has
been properly exercised, the aggregate amount of Notes the Company may
repurchase shall be allocated pro rata among
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each Note (or portion thereof) surrendered for repurchase, based on the
principal amount of such Note, in proportion to the aggregate amount of
Notes surrendered for repurchase.
(g) [Reserved.]
(h) [Reserved.]
(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 [Reserved.]
Section 16.4 Certain Definitions. For purposes of this Article XVI:
-------------------
(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 August
28, 2001 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
all of the current members of the Board of Directors would thereafter cease
to be in office).
(d) the term "Repurchase Event" means 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 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 the stockholders of
the
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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) 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 (5) 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 and, if such Change in Control occurs on a date
which is prior to the last date on which the Shelf Registration Statement
is required to remain effective pursuant to the Registration Rights
Agreement, the Shelf Registration Statement is effective and available for
use or (y) in the case of a merger or consolidation or conveyance, transfer
or lease 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 listed for trading on a United States national securities
exchange or approved for trading on the Nasdaq National Market or the
Nasdaq SmallCap (or which will be so traded or approved for trading 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; provided, however, that the exception
-------- -------
contained in the preceding clause (y) shall only apply in the event that
(aa) the issuer of such common stock has a total market capitalization of
at least $150 million and (bb) the product of (i) the average daily trading
volume of such common stock for the ten (10) Trading Days immediately
preceding the date on which the Company either executes the definitive
agreement with respect to the transaction otherwise constituting a Change
in Control or, if no such definitive agreement is executed, the date on
which the transaction otherwise constituting a Change in Control is deemed
to have occurred, as determined by the Company in good faith (either of
such dates, as applicable, the "Measurement Date") and (ii) the average of
the daily volume-weighted average per share price of such common stock for
the ten (10) Trading Days immediately preceding the Measurement Date
exceeds $1.5 million.
(f) the term "market capitalization" in the proviso following clause
(y) of the preceding subsection 16.4(e) shall mean, with respect to such
issuer, the number of shares of common stock outstanding as of the
Measurement Date (which number shall include shares of common stock held by
affiliates of such issuer) multiplied by the closing price per share for
such common stock of such issuer on the Measurement Date.
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(g) the term "volume-weighted average per share price" shall mean the
volume-weighted average price of a share of common stock of an issuer
described in the proviso following clause (y) of the preceding subsection
16.4(e) on a given Trading Day as calculated by the AQR function by
Bloomberg.
(h) 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 the Nasdaq National Market or the Nasdaq
SmallCap Market.
ARTICLE XVII
MISCELLANEOUS PROVISIONS
Section 17.1 Provisions Binding on Company's Successors. All the
------------------------------------------
covenants, stipulations, promises and agreements of the Company contained in
this Indenture 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 TiVo Inc., 0000 Xxxx Xxxxxx, X.X. Xxx 0000, Xxxxxx, XX 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.
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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
governed by and construed in accordance with the laws of New York, including,
without limitation, Section 5-1401 of the New York General Obligations Law.
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 Officer's Certificate stating that in the opinion of
the person executing such Officer's Certificate all conditions precedent, if
any, provided for in this Indenture relating to the proposed action have been
satisfied, and an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent have been satisfied (except that an
Opinion of Counsel shall not be required for the initial issuance and
authentication of the Notes).
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 satisfied.
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;
provided, however, that, unless otherwise required by law, notwithstanding the
-------- -------
foregoing, this Indenture and the Notes issued hereunder shall not be subject to
the provisions of subsections (a)(1), (a)(2), and (a)(3) of Section 314 of the
Trust
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Indenture Act as now in effect as hereafter amended or modified; provided
--------
further that this Section 17.8 shall not require that this Indenture or the
-------
Trustee be qualified under the Trust Indenture Act prior to the time such
qualification is in fact required under the terms of the Trust Indenture Act,
nor shall it constitute any admission or acknowledgment by any party hereto that
any such qualification is required prior to the time such qualification is in
fact required under the terms of the Trust Indenture Act. If any provision
hereof limits, qualifies or conflicts with another provision hereof that is
required to be included in an indenture qualified under the Trust Indenture Act,
such required provision shall control.
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 for 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 all or substantially all of
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
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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.
The provisions of Sections 8.2, 8.3, 8.4, 9.3 and this Section 17.11 shall
be applicable to any authenticating agent.
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.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly signed all as of the date first written above.
TIVO INC.
By: /s/ Xxxxxxx Xxxxxx
--------------------------------------
Name: Xxxxxxx Xxxxxx
Title: President and Chief Executive
Officer
Attest:
/s/ Xxxxx X. Xxxxxxxx
-------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Senior Vice President
Finance and Administration
and Chief Financial Officer
THE BANK OF NEW YORK
as Trustee
By: /s/ Xxxxxxx Xxxxxxx
---------------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Assistant Treasurer
[SIGNATURE PAGE TO INDENTURE]
EXHIBIT A
---------
[FORM OF FACE OF NOTE]
[THE FOLLOWING PARAGRAPH SHALL APPEAR ON THE FACE OF EACH RESTRICTED NOTE.]
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE
"SECURITIES ACT"). THE HOLDER HEREOF, BY PURCHASING THIS SECURITY, AGREES FOR
THE BENEFIT OF THE ISSUER THAT THIS SECURITY MAY NOT BE RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED OTHER THAN (1) TO THE ISSUER, (2) IN AN OFFSHORE
TRANSACTION IN ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT (AS
INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER ON
THE REVERSE OF THIS SECURITY), (3) TO A PERSON THAT IS AN ACCREDITED INVESTOR AS
DEFINED IN RULE 501(A)(1), (2), (3), (5), (6) OR (7) OF REGULATION D UNDER THE
SECURITIES ACT (AS INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON THE
CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS SECURITY) AND THAT IS ACQUIRING
THIS SECURITY FOR INVESTMENT PURPOSES AND NOT FOR DISTRIBUTION, AND A SIGNED
LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE
RESTRICTIONS ON TRANSFER OF THE SECURITY EVIDENCED HEREBY (THE FORM OF WHICH
LETTER IS AN EXHIBIT TO THE INDENTURE GOVERNING THIS SECURITY AND MAY BE
OBTAINED FROM THE TRUSTEE AND/OR THE TRANSFER AGENT) IS DELIVERED PRIOR TO SUCH
TRANSFER BY THE TRANSFEREE TO THE ISSUER AND THE TRUSTEE AND/OR THE TRANSFER
AGENT, (4) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 (IF
APPLICABLE) UNDER THE SECURITIES ACT, (5) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OR (6) IN ACCORDANCE WITH ANOTHER EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, IN EACH CASE IN
ACCORDANCE WITH ANY OTHER APPLICABLE SECURITIES LAWS. THE HOLDER HEREOF AGREES
THAT, PRIOR TO SUCH TRANSFER, IT WILL FURNISH TO THE ISSUER AND THE TRUSTEE AN
OPINION OF COUNSEL IF THE ISSUER SO REQUESTS (OTHER THAN WITH RESPECT TO A
TRANSFER PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
ACT) AND SUCH CERTIFICATES AND OTHER INFORMATION AS THEY MAY REASONABLY REQUIRE
TO CONFIRM THAT ANY TRANSFER BY IT OF THIS SECURITY COMPLIES WITH THE FOREGOING
RESTRICTIONS AND IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.
THE HOLDER HEREOF AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS
SECURITY OR AN INTEREST HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE
EFFECT OF SUCH LEGEND. THE HOLDER HEREOF, BY PURCHASING THIS SECURITY,
REPRESENTS AND AGREES FOR THE BENEFIT OF THE
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ISSUER THAT IT IS (1) AN ACCREDITED INVESTOR AS DEFINED IN RULE 501(A)(1), (2),
(3), (5), (6) OR (7) OF REGULATION D UNDER THE SECURITIES ACT AND THAT IT IS
HOLDING THIS SECURITY FOR INVESTMENT PURPOSES AND NOT FOR DISTRIBUTION OR (2) A
NON-U.S. PERSON OUTSIDE THE UNITED STATES WITHIN THE MEANING OF (OR AN ACCOUNT
SATISFYING THE REQUIREMENTS OF RULE 902 UNDER) REGULATION S UNDER THE SECURITIES
ACT.
[THE COMPANY MAY, BUT IS NOT OBLIGATED TO, INSTRUCT THE TRUSTEE TO PLACE THE
FOLLOWING PARAGRAPH ON THE FACE OF EACH NOTE HELD BY OR TRANSFERRED TO AN
"AFFILIATE" (AS DEFINED IN RULE 501(B) OF REGULATION D UNDER THE SECURITIES ACT)
OF THE COMPANY:]
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE HELD BY A PERSON WHO MAY BE
DEEMED TO BE AN AFFILIATE OF THE ISSUER FOR PURPOSES OF RULE 144 PROMULGATED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"), AND MAY BE SOLD
ONLY IN COMPLIANCE WITH RULE 144, PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE 1933 ACT OR PURSUANT TO A VALID EXEMPTION FROM REGISTRATION
UNDER THE 1933 ACT.
A-2
TIVO INC.
7% Convertible Senior Notes due 2006
No. ___ $_______________
CUSIP No._____________
TiVo Inc., a corporation duly organized and validly existing under the laws
of the State of Delaware (herein called the "Company", which term includes any
successor corporation under the Indenture referred to on the reverse hereof),
for value received hereby promises to pay to ____________________, or registered
assigns, the principal sum of ___________ Dollars on August 15, 2006 and to pay
interest on said principal sum semi-annually on August 15 and February 15 of
each year, commencing February 15, 2002 at the rate per annum specified in the
title of this Note, accrued from August 24, 2001. The interest so payable on
any August 15 or February 15 will 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, which shall be the August 1 or February 1 (whether or not a
Business Day) next preceding such August 15 or February 15, respectively;
provided that any such interest not punctually paid or duly provided for shall
-------- ----
be payable as provided in the Indenture. Payment of the principal of and
interest accrued on this Note (including Liquidated Damages, if any) shall be
made at the office or agency of the Company maintained for that purpose in the
Borough of Manhattan, The City of New York, or at any other office or agency
permitted by the Indenture, in such lawful money of the United States of America
as at the time of payment shall be legal tender for the payment of public and
private debts; provided further, however, that, with respect to any holder of
-------------------------
Notes with an aggregate principal amount equal to or in excess of $500,000, 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 written wire transfer instruction supplied by such holder
from time to time to the Trustee and paying agent (if different from the
Trustee) at least two days prior to the applicable record date.
Reference is made to the further provisions of this Note set forth on the
reverse hereof, including, without limitation, provisions giving the holder of
this Note the right to convert this Note into Common Stock of the Company on the
terms and subject to the limitations referred to on the reverse hereof and as
more fully specified in the Indenture. Such further provisions shall for all
purposes have the same effect as though fully set forth at this place.
This Note shall be deemed to be a contract made under the laws of the State
of New York, and for all purposes shall be construed in accordance with and
governed by the laws of said State, including, without limitation, Section 5-
1401 of the New York General Obligations Law.
This Note shall not be valid or become obligatory for any purpose until the
certificate of authentication hereon shall have been manually signed by the
Trustee or a duly authorized authenticating agent under the Indenture.
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IN WITNESS WHEREOF, the Company has caused this Note to be duly executed.
TIVO INC.
By: ________________________________________
Name:
Title:
Attest:
By: ___________________________
Name:
Title:
[FORM OF CERTIFICATE OF AUTHENTICATION]
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
THE BANK OF NEW YORK,
as Trustee, certifies that this is one of the Notes described
in the within-named Indenture.
Dated:
By: ___________________________
Authorized Signatory
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[FORM OF REVERSE OF NOTE]
TIVO INC.
7% Convertible Senior Note Due 2006
This Note is one of a duly authorized issue of Notes of the Company,
designated as its 7% Convertible Senior Notes due 2006 (herein called the
"Notes"), limited to the aggregate principal amount of $__________ all issued or
to be issued under and pursuant to an Indenture dated as of August 28, 2001
(herein called the "Indenture"), between the Company and The Bank of New York,
(herein called the "Trustee"), to which the Indenture and all indentures
supplemental thereto reference is hereby made for a description of the rights,
limitations of rights, obligations, duties and immunities thereunder of the
Trustee, the Company and the holders of the Notes. All capitalized terms used
herein without definition shall have the meaning set forth in the Indenture.
In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal of, premium, if any, and accrued
interest on all Notes may be declared, and upon said declaration shall become,
due and payable, in the manner, with the effect and subject to the conditions
provided in the Indenture. Liquidated damages paid pursuant to Section 15.2 of
the Indenture, if any, shall be paid within ten (10) Business Days of the date
from which such liquidated damages accrued pursuant to Section 15.2. Liquidated
Damages on the Notes paid pursuant to Section 3(e) of the Registration Rights
Agreement, if any, shall be paid at the times and in the manner provided
therein.
The Indenture contains provisions permitting the Company and the Trustee in
certain limited circumstances, without the consent of the holders of the Notes,
and in other circumstances, with the consent of the holders of not less than a
majority in aggregate principal amount of the Notes at the time outstanding,
evidenced as in the Indenture provided, to execute amendments to the Indenture
or supplemental indentures adding any provisions to or changing in any manner or
eliminating any of the provisions of the Indenture or of any supplemental
indenture or modifying in any manner the rights of the holders of the Notes;
provided, however, that no such amendment or supplemental indenture shall (i)
-------- -------
extend the fixed maturity of any Note, or reduce the rate or extend the time of
payment of interest thereon, or reduce the principal amount thereof or premium,
if any, thereon, or reduce any amount payable on redemption or repurchase
thereof, 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 impair or adversely affect the
right of any Noteholder to institute suit for the payment thereof, or change the
currency in which the Notes are payable, or 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 in the Indenture, including Section 15.6 thereof,
or subordinate in right of payment the Notes to any other Indebtedness, without
the consent of the holder of each Note so affected, or (ii) reduce the aforesaid
percentage of Notes, the holders of which are required to consent to any such
supplemental indenture, without the consent of the holders of all Notes then
outstanding.
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It is also provided in the Indenture that the holders of not less than a
majority in aggregate principal amount of the Notes at the time outstanding may
on behalf of the holders of all of the Notes waive any past default or Event of
Default under the Indenture 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 of the Indenture which
under Article XI thereof cannot be modified or amended without the consent of
the holders of all Notes then outstanding. Any such consent or waiver by the
holder of this Note (unless revoked as provided in the Indenture) shall be
conclusive and binding upon such holder and upon all future holders and owners
of this Note and any Notes which may be issued in exchange or substitution
hereof, irrespective of whether any notation thereof is made upon this Note or
such other Notes.
No reference herein to the Indenture and no provision of this Note or of
the Indenture shall impair the obligation of the Company, which is absolute and
unconditional, to pay the principal of, premium, if any, and interest on this
Note as and when the same shall become due and payable in accordance with the
terms herein.
Interest on the Notes shall be computed on the basis of a 360-day year
comprised of twelve 30-day months.
The Notes are issuable in registered form without coupons in denominations
of $1,000 principal amount and integral multiples thereof. At the office or
agency of the Company referred to on the face hereof, and in the manner and
subject to the limitations provided in the Indenture, without payment of any
service charge but with payment of a sum sufficient to cover any tax,
assessments or other governmental charges that may be imposed in connection with
any registration or exchange of Notes, Notes may be exchanged for a like
aggregate principal amount of Notes of other authorized denominations.
The Company may, at its option, redeem all or any part of the Notes on any
date prior to maturity, upon mailing a notice of such redemption, and at a
redemption price equal to $1,000 per $1,000 principal amount of the Notes to be
redeemed, plus accrued and unpaid interest, if any, to, but excluding, the date
of redemption, provided, however, that, prior to August 28, 2004, the Company
shall only have such right of redemption if (1) the Closing Price per share of
the Company's Common Stock has exceeded 200% of the Conversion Price then in
effect (not including the effect of any adjustment to the Conversion Price made
pursuant to Section 15.11 of the Indenture) for at least 20 Trading Days within
a period of 30 consecutive Trading Days, and (2) within 10 days following the
Determination Period, the Company mails to holders the notice required pursuant
to Section 3.2 (the date of such notice, the "Notice Date"), and provided,
further, that, prior to the last date on which the shelf registration statement
covering resales of the Notes and the Common Stock issuable upon conversion of
the Notes is required to remain effective pursuant to the Registration Rights
Agreement, such shelf registration statement is effective and available for use
at all times during the period beginning 30 days prior to the Notice Date and
ending on the earlier of the redemption date or the last date on which the Shelf
Registration Statement is required to remain effective and available pursuant to
the Registration Rights Agreement, and is expected to remain effective and
available for use until the earlier of 30 days following the redemption date or
the last date on which the Shelf Registration Statement is required to remain
A-6
effective pursuant to the Registration Rights Agreement. If the Company
exercises such right of redemption prior to August 28, 2002, the Company shall
make an additional payment in cash to holders of the redeemed Notes with respect
to the Notes called for redemption, in an amount equal to $70 per each $1,000
principal amount of the Note, less the amount of any interest actually paid on
such Notes prior to the date of notice of redemption is mailed. The Company
shall make this additional payment on all Notes called for redemption prior to
August 28, 2002, including any Notes converted after the date the notice of
redemption is mailed and before the provisional redemption date.
If such notice of redemption has been given as provided in the Indenture,
the Notes or portion of Notes called for redemption shall, unless converted into
Common Stock pursuant to the terms of the Indenture, become due and payable on
the date and at the place or places stated in such notice at the applicable
redemption price, together with the Provisional Payment, if any, and interest
accrued to, but excluding, the date fixed for redemption, and on and after such
date (unless the Company shall default in the payment of such Notes at the
redemption price, together with the Provisional Payment, if any, and 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 of the Indenture, to be entitled to any benefit or
security under the Indenture, and the holders of such Notes shall have no right
in respect of such Notes except the right to receive the redemption price and
unpaid interest to, but excluding, the date fixed for redemption. On
presentation and surrender of such Notes at a place of payment specified in such
notice, such Notes or the specified portions thereof to be redeemed shall be
paid and redeemed by the Company at the applicable redemption price, together
with the Provisional Payment, if any, and 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 of the Indenture.
The Notes are not subject to redemption through the operation of any
sinking fund.
Upon the occurrence of a "Repurchase Event," the Noteholder has the right,
at such holder's option, to require the Company to repurchase all or any portion
of such holder's Notes on the 40th calendar day (or, if such 40th day is not a
Business Day, the next succeeding Business Day) after notice of such Repurchase
Event at a price equal to 110% of the principal amount of the Notes such holder
elects to require the Company to repurchase, together, in each case, with
accrued interest to the date fixed for repurchase; provided that if such
--------
repurchase date is August 15 or February 15, then the interest payable on such
date shall be paid to the holder of record of the Note on the next preceding
August 15 or February 15, respectively. The Company or, at the written request
of the Company, the Trustee shall mail to all holders of record of the Notes a
notice of the occurrence of a
X-0
Xxxxxxxxxx Event and of the repurchase right arising as a result thereof on or
before the tenth (10th) calendar day after the occurrence of such Repurchase
Event. If a redemption date pursuant to Article III of the Indenture shall occur
prior to any repurchase date established pursuant to a Company Notice under
Section 16.2 of the Indenture, provided that the Company shall have deposited or
set aside an amount of money sufficient to redeem such Notes as set forth in
Section 3.2 of the Indenture on or before such repurchase date, all such Notes
shall be redeemed pursuant to Article III of the Indenture and the repurchase
rights under Article XVI of the Indenture shall have no effect.
Subject to the provisions of the Indenture, the holder hereof has the
right, at its option, at any time following the date of original issuance of the
Notes and prior to the close of business on August 15, 2006, (except that, with
respect to any Note or portion of a Note that shall be called for redemption,
such right shall terminate, except as otherwise provided in the Indenture, at
the close of business on the Business Day next preceding the date fixed for
redemption unless the Company shall default in payment due upon redemption), to
convert the principal hereof or any portion of such principal which is $1,000 or
an integral multiple thereof, into that number of fully paid and non-assessable
shares of the Company's Common Stock, as said shares shall be constituted at the
date of conversion, obtained by dividing the principal amount of this Note or
portion thereof to be converted by the conversion price of $6.73 or such
conversion price as adjusted from time to time as provided in the Indenture,
upon surrender of this Note, together with a conversion notice as provided in
the Indenture and this Note, to the Company at the office or agency of the
Company maintained for that purpose in the Borough of Manhattan, The City of New
York, or at any other office or agency permitted by the Indenture, and, unless
the shares issuable on conversion are to be issued in the same name as this
Note, duly endorsed by, or accompanied by instruments of transfer in form
satisfactory to the Company duly executed by, the holder or by his duly
authorized attorney. Copies of such notice shall also be sent via facsimile to
the Company, attention General Counsel ((000) 000-0000) and Xxxxxx & Xxxxxxx,
attention Xxxx Xxxxxxx ((000) 000-0000). The Company shall pay in cash, on this
Note or portion thereof surrendered for conversion during the period from the
close of business on any interest payment date to which interest has been fully
paid through the close of business on the Business Day preceding the record date
for the next such interest payment date, accrued and unpaid interest, if any,
to, but excluding, the date of conversion. Any such payment of interest shall
be made with ten (10) Business Days after the Conversion Date. Notwithstanding
the foregoing, if this Note shall be surrendered for conversion during the
period from the close of business on any record date for any interest payment
date through the close of business on the Business Day next preceding such
interest payment date, this Note (unless the Note or the 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 of the Indenture or
shall have become due prior to such interest payment date as a result of a
Repurchase Event) must 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. No fractional shares of Common Stock will be issued upon any
conversion, but an adjustment in cash will be paid to the holder, as provided
A-8
in the Indenture, in respect of any fraction of a share which would otherwise be
issuable upon the surrender of any Note or Notes for conversion.
In addition to any adjustments to the Conversion Price required to be made
pursuant to Section 15.5 of the Indenture, the Conversion Price (1) shall be
adjusted on the date which is the earlier of (A) the date by which the Company
is required to have had the Shelf Registration Statement declared effective by
the Securities and Exchange Commission or be subject to Liquidated Damages under
the Registration Rights Agreement or (B) two calendar days after the date on
which the Commission declares effective the Shelf Registration Statement (the
earlier of such date, the "Registration Date"), if the Current Market Price on
the Registration Date is less than the Conversion Price otherwise in effect on
the Registration Date, to the greater of such Current Market Price or 75% of the
Benchmark Price and (2) shall be adjusted on August 23, 2002 (the "August 23,
2002 Date" and, together with the Registration Date, the "Adjustment Date"), if
the Current Market Price on the August 23, 2002 Date is less than the Conversion
Price otherwise in effect on the August 23, 2002 Date, to the greater of such
Current Market Price or 75% of the Benchmark Price, which Benchmark Price is
subject to adjustment as provided in the Indenture.
In addition to any adjustment to the Conversion Price required to be made
pursuant to Section 15.5, Section 15.6 or Section 15.11(a) of the Indenture, the
Conversion Price shall be adjusted in accordance with Section 15.11(b) of the
Indenture.
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 the Provisional Payment, if
any, and interest accrued to the date fixed for redemption, of such Notes.
Upon due presentment for registration of transfer of this Note and any
other documents as may be required to be delivered by the Indenture at the
office or agency of the Company in the Borough of Manhattan, The City of New
York, or at any other office or agency permitted by the Indenture, a new Note or
Notes of authorized denominations for an equal aggregate principal amount will
be issued to the transferee in exchange thereof, subject to the requirements and
limitations provided in the Indenture, without charge except for any tax or
other governmental charge imposed in connection therewith.
The Company, the Trustee, any authenticating agent, any paying agent, any
conversion agent and any Note registrar may deem and treat the registered holder
hereof as the absolute owner of this Note (whether or not this Note shall be
overdue and notwithstanding any notation of ownership or other writing hereon),
for the purpose of receiving payment hereof (including Liquidated Damages to the
extent accrued but unpaid), or on account hereof, for the conversion hereof and
for all other purposes; and neither the Company nor the Trustee nor any other
authenticating agent nor any paying agent nor any other conversion agent nor any
Note registrar shall be affected by any notice to the contrary. All such
payments so made to, or upon the order of, such registered holder for the time
A-9
being shall be valid, and, to the extent of the sum or sums so paid, effectual
to satisfy and discharge the liability for monies payable on this Note.
No recourse for the payment of the principal of or any premium or interest
on this Note (including Liquidated Damages, if any), or for any claim based
hereon or otherwise in respect hereof, 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, 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 the consideration for the issue hereof, expressly waived
and released.
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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 UNIF GIFT MIN ACT -
_____________________________ Custodian
(Cust)
TEN ENT - as tenants by the entireties _____________________________
(Minor)
JT TEN - as joint tenants with right
of survivorship and not as tenants Uniform Gifts to Minors Act ___________
in common (State)
Additional abbreviations may also be used
though not in the above list.
A-11
[FORM OF CONVERSION NOTICE]
To: TiVo Inc.
The undersigned registered owner of this Note hereby irrevocably exercises
the option to convert this Note, or the portion hereof (which is $1,000
principal amount or an integral multiple thereof) below designated, into shares
of Common Stock in accordance with the terms of the Indenture referred to in
this Note, and directs that the shares issuable and deliverable upon such
conversion, together with any check in payment for fractional shares and any
Notes representing any unconverted principal amount hereof, be issued and
delivered to the registered holder hereof unless a different name has been
indicated below. If shares or any portion of this Note not converted are to be
issued in the name of a person other than the undersigned, the undersigned will
pay all transfer taxes payable with respect thereto. Any amount required to be
paid by the undersigned on account of interest accompanies this Note.
Principal amount to be converted (if less
than all): $______,000
Dated: ________________________
________________________________
________________________________
Signature(s)
_______________________________
Signature Guarantee
Signature(s) must be guaranteed by an eligible Guarantor Institution (banks,
stock brokers, savings and loan associations and credit unions) with membership
in an approved signature guarantee medallion program pursuant to Securities and
Exchange Commission Rule 17Ad-15 if shares of Common Stock are to be issued, or
Notes to be delivered, other than to and in the name of the registered holder.
This form must be delivered to the Trustee at the Corporate Trust Office, which
initially shall be 000 Xxxxxxx Xxxxxx, Xxxxx 00X, Xxx Xxxx, X.X. 10286,
Attention: Corporate Trust Administration. Copies of this form must be sent by
facsimile to TiVo Inc., attention General Counsel ((000) 000-0000) and Xxxxxx &
Xxxxxxx, attention Xxxx Xxxxxxx ((000) 000-0000).
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1. COMMON STOCK AND/OR CHECK TO BE ISSUED TO:
IF IN CERTIFICATED FORM (Common Stock or Notes:
Social Security Number or identifying number: _____________________________
Name: _____________________________________________________________________
Street Address: ___________________________________________________________
City, State and Zip Code: _________________________________________________
IF IN BOOK-ENTRY FORM THROUGH DTC:
ACCOUNT NUMBER: ___________________________________________________________
ACCOUNT NAME: _____________________________________________________________
REMAINING UNCONVERTED PRINCIPAL AMOUNT OF NOTES TO BE ISSUED IN CERTIFICATED
FORM TO:
Social Security Number or identifying number: _____________________________
Name: _____________________________________________________________________
Street Address: ___________________________________________________________
City, State and Zip Code: _________________________________________________
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[FORM OF OPTION TO ELECT REPAYMENT
UPON A REPURCHASE EVENT]
To: TiVo Inc.
The undersigned registered owner of this Note hereby acknowledges receipt
of a notice from TiVo Inc. (the "Company") as to the occurrence of a Repurchase
Event with respect to the Company and requests and instructs the Company to
repay the entire principal amount of this Note, or the portion thereof (which is
$1,000 principal amount or an integral multiple thereof) below designated, in
accordance with the terms of the Indenture referred to in this Note, together
with accrued interest (including Liquidated Damages, if any) to, but excluding,
such date, to the registered holder hereof.
Dated: ________________________
___________________________________________
___________________________________________
Signature(s)
___________________________________________
Social Security or Other Taxpayer
Identification Number
Principal amount to be repaid (if less
than all): $______,000
NOTICE: The above signatures of the
holder(s) hereof must correspond with the
name as written upon the face of the Note
in every particular without alteration or
enlargement or any change whatever.
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[FORM OF ASSIGNMENT AND TRANSFER]
For value received ____________________________ hereby sell(s), assign(s)
and transfer(s) unto _________________ (Please insert social security or
Taxpayer Identification Number of assignee) the within Note, and hereby
irrevocably constitutes and appoints ________ _____________ attorney to transfer
the said Note on the books of the Company, with full power of substitution in
the premises.
In connection with any transfer of the within Note occurring within two
years (or such shorter holding period required under Rule 144(k) of the
Securities Act) of the original issuance of such Note (unless such Note is being
transferred pursuant to a registration statement that has been declared
effective under the Securities Act), the undersigned confirms that such Note is
being transferred:
[_] *To TiVo Inc. or a subsidiary thereof; or
[_] *To an Institutional Accredited Investor pursuant to and in compliance
with the Securities Act of 1933, as amended; or
[_] *To an Individual Accredited Investor pursuant to and in compliance
with the Securities Act of 1933, as amended; or
[_] *In an offshore transaction pursuant to and in compliance with
Regulation S under the Securities Act of 1933, as amended; or
[_] *Pursuant to and in compliance with Rule 144 under the Securities Act
of 1933, as amended;
and unless the box below is checked, the undersigned confirms that such Note is
not being transferred to an "affiliate" of the Company as defined in Rule 144
under the Securities Act of 1933, as amended (an "Affiliate"):
[_] *The transferee is an Affiliate of the Company.
A-15
Dated: ___________________
____________________________________
____________________________________
Signature(s)
____________________________________
Signature Guarantee
Signature(s) must be guaranteed by an eligible Guarantor Institution (banks,
stock brokers, savings and loan associations and credit unions) with membership
in an approved signature guarantee medallion program pursuant to Securities and
Exchange Commission Rule 17Ad-15 if shares of Common Stock are to be issued, or
Notes to be delivered, other than to and in the name of the registered holder.
NOTICE: The signature on the conversion notice, the option to elect
repurchase upon a Repurchase Event or the assignment must correspond with the
name as written upon the face of the Note in every particular without alteration
or enlargement or any change whatever.
A-16
EXHIBIT B
FORM OF TRANSFER LETTER OF REPRESENTATIONS
(TO BE DELIVERED BY HOLDER
UPON CERTAIN TRANSFERS OF NOTES WITHOUT
EFFECTIVE REGISTRATION STATEMENT)
We are delivering this letter in connection with the sale or transfer to us
of Notes (as defined in the Indenture, dated as of August 28, 2001, between TiVo
Inc., a Delaware corporation (the "Company") and The Bank of New York, a New
York banking corporation (the "Trustee")) other than pursuant to a registration
statement that has been declared effective under the Securities Act of 1933, as
amended (the "Securities Act").
We hereby confirm that:
(i) we are an "accredited investor" within the meaning of Rule
501(a)(1),(2), (3), (5), (6) or (7) under the Securities Act;
(ii) any purchase or receipt of the Notes by us will be for investment
purposes and for our own account, not as a nominee or agent;
(iii) we have such knowledge and experience in financial and business
matters that we are capable of evaluating the merits and risks of
purchasing or receiving the Notes;
(iv) we do not have need for liquidity in our investment in the Notes,
we have the ability to bear the economic risks of our investment in the
Notes for an indefinite period of time and we are able to afford the
complete loss of our investment in the Notes;
(v) we are not acquiring the Notes with a view to any distribution
thereof in a transaction that would violate the Securities Act or the
securities laws of any State of the United States or any other applicable
jurisdiction, and we have no present intention of selling, granting any
participation in, or otherwise distributing the same;
(vi) we have had access to such information regarding the Company
necessary in order for us to make an informed decision and any such
information which we have requested have been made available for us or our
attorney, accountant, or advisor; and
(vii) we or our attorney, accountant, or advisor have had a
reasonable opportunity to ask questions of and receive answers from a
person or persons acting on behalf of the Company concerning the business,
management and financial affairs of the Company and the terms and
conditions of the acquisition by us of the Notes and all such questions
have been answered to our full satisfaction, and we have acquired
sufficient information about the Company to make an informed and
knowledgeable decision to acquire the Notes.
B-1
We understand that the Notes have not been registered under the Securities
Act, and we agree, on our own behalf and on behalf of each account for which we
acquire any Notes, that such Notes may be offered, resold, pledged or otherwise
transferred only (i) in accordance with an exemption from the registration
requirements of the Securities Act, (ii) to the Company or (iii) pursuant to an
effective registration statement, and, in each case, in accordance with any
applicable securities laws of any State of the United States or any other
applicable jurisdiction. We agree that we will furnish the Company and the
Trustee an opinion of counsel, if the Company so requests, that the foregoing
restrictions on transfer have been complied with. We understand that the
Trustee will not be required to accept for registration of transfer any Notes,
except upon presentation of evidence satisfactory to the Company, including an
opinion of counsel if the Company so requests, that the foregoing restrictions
on transfer have been complied with.
We acknowledge that the Company and others will rely upon our
confirmations, acknowledgements and agreements set forth herein, and we agree to
notify you promptly in writing if any of our representations or warranties
herein ceases to be accurate and complete.
___________________________________________
(Name)
By:________________________________________
Name:
Title:
Address:
B-2
