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EXHIBIT 4.8
INDENTURE dated as of January 15, 1997 between HMT Technology
Corporation, a Delaware corporation (the "Company") and State Street Bank and
Trust Company of California, N.A., a national banking association organized
under the laws of the United States of America, as trustee (the "Trustee").
Each party agrees as follows for the benefit of the other party and for
the equal and ratable benefit of the Noteholders of the Company's 5 3/4%
Convertible Subordinated Notes due 2004 (the "Securities"):
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1 Definitions.
"Affiliate" of any specified person means any other person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified person. For the purposes of this definition,
"control" (including, with correlative meanings, the terms "controlling",
"controlled by" and "under common control with"), as used with respect to any
person, shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of such person,
whether through the ownership of voting securities or by agreement or otherwise;
provided, however, that beneficial ownership of 10% or more of the voting
securities of a person shall be deemed to be control.
"Agent" means any Registrar, Paying Agent, Conversion Agent or
co-registrar.
"Board of Directors" means the Board of Directors of the Company or any
authorized committee of the Board.
"Board Resolution" means a duly authorized resolution of the Board of
Directors.
"Business Day" means any day that is not a Legal Holiday.
"Capital Stock" means any and all shares, interests, participations,
rights or other equivalents (however designated) of equity interests in any
entity, including, without limitation, corporate stock and partnership
interests.
"Change of Control", means any event where: (i) any "person" or "group"
(as such terms are used in Section 13(d) and 14(d) of the Exchange Act) is or
becomes the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the
Exchange Act) of shares representing more than 50% of the combined voting power
of the then outstanding securities entitled to vote generally in elections of
directors of the Company ("Voting Stock"), (ii) the Company consolidates with or
merges into any other corporation, or any other corporation merges into the
Company, and, in the case of any such
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transaction, the outstanding Common Stock of the Company is reclassified into or
exchanged for any other property or security, unless the stockholders of the
Company immediately before such transaction own, directly or indirectly
immediately following such transaction, at least a majority 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, (iii) the Company conveys,
transfers or leases all or substantially all of its assets (other than to a
wholly-owned subsidiary of the Company) or (iv) any time the 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 of Control shall not be deemed to have occurred if at least 90% of the
consideration (excluding cash payments for fractional shares) in the transaction
or transactions constituting the Change of Control consists of shares of common
stock that are, or upon issuance will be, traded on a United States national
securities exchange or approved for trading on an established automated
over-the-counter trading market in the United States.
"Common Stock" means the common stock of the Company as the same exists
at the date of the execution of this Indenture or as such stock may be
constituted from time to time.
"Company" means the party named as such above until a successor
replaces it in accordance with Article VII and thereafter means the successor.
"Continuing Directors" means as of any date of determination, any
member of the Board of Directors of the Company who (i) was a member of such
Board of Directors on the date of this Indenture or (ii) was nominated for
election or elected to such Board of Directors with the approval of a majority
of the Continuing Directors who were members of such board at the time of such
nomination or election.
"Credit Agreement" means that certain Amended and Restated Revolving
Credit Agreement dated as of August 28, 1996, (as amended by that certain First
Amendment to Amended and Restated Revolving Credit Agreement dated as of January
14, 1997) by and among (i) the Company, (ii) the lending institutions listed on
Schedule 1.1 thereto, (iii) The First National Bank of Boston, as administrative
agent for itself, the lending institutions listed on Schedule 1.1 thereto and
the other Bank Agents (as defined therein), and (iv) Banque Paribas, as
co-syndication agent for itself, the lenders listed on Schedule 1.1 thereto and
the other Bank Agents, as the same may be amended, modified or supplemented from
time to time and any replacement facility so designated as the "Credit
Agreement" in the instrument related thereto.
"Custodian" means State Street Bank and Trust Company of California,
N.A., as custodian with respect to the Global Securities, or any successor
entity thereto.
"Daily Market Price" means the price of a share of Common Stock on the
relevant date, determined (a) on the basis of the last reported sale price
regular way of the Common Stock as reported on the NNM, or if the Common Stock
is not then listed on the NNM, as reported on such national securities exchange
upon which the Common Stock is listed, or (b) if there is no such reported sale
on the day in question, on the basis of the average of the closing bid and asked
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quotations regular way as so reported, or (c) if the Common Stock is not listed
on the NNM or on any national securities exchange, on the basis of the average
of the high bid and low asked quotations regular way on the day in question in
the over-the-counter market as reported by the National Association of
Securities Dealers Automated Quotation System, or if not so quoted, as reported
by National Quotation Bureau, Incorporated, or a similar organization.
"Default" means any event that is, or with the passage of time or the
giving of notice or both, would be an Event of Default.
"Depositary" means The Depository Trust Company, its nominees and their
respective successors.
"Designated Event" means the occurrence of a Change of Control or a
Termination of Trading.
"Designated Senior Debt" means (i) all obligations of the Company under
the Credit Agreement, and (ii) any other Senior Debt which, at the date of
determination, has an aggregate principal amount outstanding of, or commitments
to lend up to, at least $10 million and is specifically designated by the
Company in the instrument evidencing or governing such Senior Debt as
"Designated Senior Debt" for purposes of this Indenture (provided, that such
instrument may place limitations and conditions on the right of such Senior Debt
to exercise the rights of Designated Senior Debt).
"Excess Payment" means the excess of (a) the aggregate of the cash and
fair market value of other consideration paid by the Company or any of its
Subsidiaries with respect to the shares acquired in a tender offer or other
negotiated transaction over (b) the Daily Market Price of such acquired shares
on the Trading Day immediately after giving effect to the completion of such
tender offer or other negotiated transaction.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"40 day restricted period" shall have the meaning specified in Rule
902(m) and Rule 903(c) of Regulation S.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as approved by a significant segment of the accounting profession,
which are in effect on the Issuance Date.
"Global Securities" means, individually and collectively, the
Unrestricted Global Securities and the Restricted Global Securities.
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"Guarantee" means a guarantee (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), direct or
indirect, in any manner (including, without limitation, letters of credit and
reimbursement agreements in respect thereof), of all or any part of any
Indebtedness.
"Indebtedness" means, with respect to any person, all obligations,
whether or not contingent, of such person (i)(a) for borrowed money (including,
but not limited to, any indebtedness secured by a security interest, mortgage or
other lien on the assets of such person which is (1) given to secure all or part
of the purchase price of property subject thereto, whether given to the vendor
of such property or to another, or (2) existing on property at the time of
acquisition thereof), (b) evidenced by a note, debenture, bond or other written
instrument, (c) under a lease required to be capitalized on the balance sheet of
the lessee under GAAP or under any lease or related document (including a
purchase agreement) which provides that such person is contractually obligated
to purchase or to cause a third party to purchase such leased property, (d) in
respect of letters of credit, bank guarantees or bankers' acceptances, (e) with
respect to Indebtedness secured by a mortgage, pledge, lien, encumbrance, charge
or adverse claim affecting title or resulting in an encumbrance to which the
property or assets of such person are subject, whether or not the obligation
secured thereby shall have been assumed or Guaranteed by or shall otherwise be
such person's legal liability, (f) in respect of the balance of deferred and
unpaid purchase price of any property or assets, and (g) under interest rate or
currency swap agreements, cap, floor and collar agreements, spot and forward
contracts and similar agreements and arrangements; (ii) with respect to any
obligation of others of the type described in the preceding clause (i) or under
clause (iii) below, assumed by or guaranteed in any manner by such person or in
effect guaranteed by such person through an agreement to purchase (including,
without limitation, "take or pay" and similar arrangements), contingent or
otherwise (and the obligations of such person under any such assumptions,
Guarantees or other such arrangements); and (iii) any and all deferrals,
renewals, extensions, refinancings and refundings of, or amendments,
modifications or supplements to, any of the foregoing.
"Indenture" means this Indenture, as amended from time to time.
"Initial Purchasers" means, collectively Salomon Brothers Inc, Alex.
Brown & Sons Incorporated, Hambrecht & Quist LLC and Robertson, Stephens &
Company LLC.
"Issuance Date" means the date on which the Securities are first
authenticated and issued.
"Liquidated Damages" means any liquidated damages payable pursuant to
the Registration Agreement.
"Material Subsidiary" means any Subsidiary of the Company which is a
"significant subsidiary" as defined in Rule 1-02(w) of Regulation S-X under the
Securities Act and the Exchange Act (as such Regulation is in effect on the date
hereof).
"Noteholder" or "holder" means a person in whose name a Security is
registered.
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"NNM" means the Nasdaq National Market.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"Offering Memorandum" means the offering memorandum relating to the
Securities dated January 15, 1997.
"Officers' Certificate" means a certificate signed by two Officers, one
of whom must be the Chairman of the Board, the President, the Treasurer or a
Vice-President of the Company. See Sections 12.4 and 12.5 hereof.
"Opinion of Counsel" means a written opinion from legal counsel who is
reasonably acceptable to the Trustee. The counsel may be an employee of or
counsel to the Company or the Trustee. See Sections 12.4 and 12.5 hereof.
"person" means any individual, corporation, partnership, joint venture,
association, joint stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"principal" of a debt security means the principal of the security plus
the premium, if any, on the security.
"Registration Agreement" means the Registration Agreement relating to
the Securities dated as of January 15, 1996, between the Company and the Initial
Purchasers.
"Regulation S" means Regulation S promulgated under the Securities Act
(or any successor provision), as amended from time to time.
"Representative" means the trustee, agent or representative (if any)
for an issue of Senior Debt.
"Restricted Global Security" means a permanent global note that
contains the applicable clause referred to in footnote 1 and Schedule A to the
form of Security attached hereto as Exhibit A, and that is deposited with and
registered in the name of the Depositary, representing the Securities sold in
reliance on Rule 144A, which shall bear the Restricted Securities Legend set
forth in Exhibit A hereto.
"Rule 144" means Rule 144 promulgated under the Securities Act (or any
successor provision), as amended from time to time.
"Rule 144A" means Rule 144A promulgated under the Securities Act (or
any successor provision), as amended from time to time.
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"SEC" means the Securities and Exchange Commission.
"Securities" means the Company's 5 3/4% Convertible Subordinated Notes
due 2004 issued, authenticated and delivered under this Indenture.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Debt" means the principal of, interest on, fees costs and
expenses in connection with and other amounts due on Indebtedness of the
Company, whether outstanding on the date of the Indenture or thereafter created,
incurred, assumed or Guaranteed by the Company, unless, in the instrument
creating or evidencing or pursuant to which Indebtedness is outstanding, it is
expressly provided that such Indebtedness is not senior in right of payment to
the Securities. Senior Debt includes, with respect to the obligations described
above, interest accruing, pursuant to the terms of such Senior Debt, on or after
the filing of any petition in bankruptcy or for reorganization relating to the
Company, whether or not post-filing interest is allowed in such proceeding, at
the rate specified in the instrument governing the relevant obligation.
Notwithstanding anything to the contrary in the foregoing, Senior Debt shall not
include: (a) Indebtedness of or amounts owed by the Company for compensation to
employees, or for goods, services or materials purchased in the ordinary course
of business; (b) Indebtedness of the Company to a Subsidiary of the Company; (c)
any liability for Federal, state, local or other taxes owed or owing by the
Company; or (d) the Company's 12% Subordinated Notes issued November 30, 1995.
"Shelf Registration Statement" shall have the meaning set forth in the
Registration Agreement.
"Subsidiary" means any corporation, association or other business
entity of which more than 50% of the total voting power of shares of Capital
Stock entitled (without regard to the occurrence of any contingency) to vote in
the election of directors, managers or trustees thereof is at the time owned or
controlled, directly or indirectly, by any person or one or more of the other
Subsidiaries of that person or a combination thereof.
"Termination of Trading" means an event where the Common Stock (or
other common stock into which the Securities are then convertible) is neither
listed for trading on a United States national securities exchange nor approved
for trading on an established automated over-the-counter trading market in the
United States.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code
Sections 77aaa-77bbbb) as in effect on the date of execution of this
Indenture.
"Trading Day" shall mean (A) if the applicable security is listed or
admitted for trading on the New York Stock Exchange or another national
securities exchange, a day on which the New York Stock Exchange or another
national securities exchange is open for business, (B) if the applicable
security is quoted on the NNM, a day on which trades may be made thereon or (c)
if the applicable security is not so listed, admitted for trading or quoted, any
day other than a Saturday or Sunday or a
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day on which banking institutions in either the State of New York or the State
of California are authorized or obligated by law or executive order to close.
"Transfer Restricted Securities" means (i) the Restricted Global
Security and certificated Securities that bear or are required to bear the
legend set forth in Exhibit A as the "Restricted Securities Legend" and (ii)
prior to the expiration of the "40 day restricted period," the Unrestricted
Global Security.
"Trustee" means the party named as such above until a successor
replaces it in accordance with the applicable provisions of this Indenture and
thereafter means the successor.
"Trust Officer", when used with respect to the Trustee, means the
chairman or any vice chairman of the board of directors, the chairman or any
vice chairman of the executive committee of the board of directors, the chairman
of the trust committee, the president, any senior vice president, any vice
president, any assistant vice president, the secretary, the treasurer, any
assistant treasurer, the cashier, any assistant cashier, any senior trust
officer, any trust officer, the controller, any assistant controller, or any
other officer of the Trustee customarily performing functions similar to those
performed by the persons who at the time are such officers, respectively, and
also means, with respect to a particular corporate trust matter, any officer to
whom such corporate trust matter is referred because of his knowledge of and
familiarity with the particular subject.
"Unrestricted Global Security" means a permanent global note that
contains the applicable clause referred to in footnote 1 and Schedule A to the
form of Security attached hereto as Exhibit A, and that is deposited with and
registered in the name of the Depositary, representing the Securities sold in
reliance on Regulation S.
SECTION 1.2 Other Definitions.
DEFINED IN
TERM SECTION
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"Agent Members" 2.1
"Applicable Procedures" 2.6
"Bankruptcy Law" 8.1
"Bankruptcy Custodian" 8.1
"Cedel" 2.1
"Commencement Date" 3.8
"Conversion Agent" 2.3
"Conversion Date" 5.2
"Conversion Price" 5.1
"Conversion Shares" 5.6
"Current Market Price" 5.6
"Designated Event Offer" 4.7
"Designated Event Payment" 4.7
"Designated Event Payment Date" 3.8
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DEFINED IN
TERM SECTION
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"Distribution Date" 5.6
"Distribution Record Date" 5.6
"Euroclear" 2.1
"Event of Default" 8.1
"Institutional Accredited Investor" 2.1
"Legal Holiday" 12.7
"Notice of Default" 8.1
"Offer Amount" 3.8
"Officer" 12.10
"Paying Agent" 2.3
"Payment Blockage Notice" 6.2
"Payment Blockage Period" 6.2
"Payment Default" 8.1
"Purchase Agreement" 2.1
"Purchase Date" 5.6
"QIBs" 2.1
"Registrar" 2.3
"Rights" 5.6
"Tender Period" 3.8
SECTION 1.3 Incorporation by Reference of Trust Indenture Act. Whenever
this Indenture refers to a provision of the TIA, the provision is incorporated
by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following
meanings:
"indenture securities" means the Securities;
"indenture security holder" means a Noteholder;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee; and
"obligor" on the Securities means the Company or any other obligor on
the Securities.
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule under the TIA
have the meanings so assigned to them.
SECTION 1.4 Rules of Construction. Unless the context otherwise
requires:
(a) a term has the meaning assigned to it;
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(b) an accounting term not otherwise defined has the meaning assigned
to it in accordance with GAAP consistently applied;
(c) references to "GAAP" shall mean GAAP in effect as of the time when
and for the period as to which such accounting principles are to be applied;
(d) "or" is not exclusive;
(e) words in the singular include the plural, and words in the plural
include the singular; and
(f) provisions apply to successive events and transactions.
ARTICLE II
THE SECURITIES
SECTION 2.1 Form and Dating. The Securities and the Trustee's
certificate of authentication shall be substantially in the form of Exhibit A
which is hereby incorporated in and expressly made a part of this Indenture. The
Securities may have notations, legends or endorsements required by law, stock
exchange rule, agreements to which the Company is subject, if any, or usage
(provided that any such notation, legend or endorsement is in a form acceptable
to the Company). The Company shall furnish any such legend not contained in
Exhibit A to the Trustee in writing. Each Security shall be dated the date of
its authentication. The terms and provisions of the Securities set forth in
Exhibit A are part of the terms 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.
(a) Global Securities. The Securities are being offered and sold by the
Company pursuant to a Purchase Agreement relating to the Securities, dated
January 15, 1997, among the Company and the Initial Purchasers (the "Purchase
Agreement").
Securities offered and sold to Qualified Institutional Buyers as
defined in Rule 144A ("QIBs") in reliance on Rule 144A shall be issued initially
in the form of one or more Restricted Global Securities in definitive, fully
registered form without interest coupons, which shall be deposited on behalf of
the purchasers of the Securities represented thereby with the Trustee, at its
office in Los Angeles, California, as Custodian for the Depositary, and
registered in the name of the Depositary or a nominee of the Depositary, duly
executed by the Company and authenticated by the Trustee as hereinafter
provided. The aggregate principal amount of the Restricted Global Security may
from time to time be increased or decreased by adjustments made on the records
of the Trustee and the Depositary or its nominee as hereinafter provided.
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Securities offered and sold in reliance on Regulation S shall be issued
initially in the form of one or more Unrestricted Global Securities in
definitive, fully registered form without interest coupons, which shall be
deposited on behalf of the purchasers of the Securities represented thereby with
the Trustee, at its office in Los Angeles, California, as Custodian for the
Depositary, and registered in the name of the Depositary or a nominee of the
Depositary for the accounts of designated agents holding on behalf of the
Euroclear System ("Euroclear") or Cedel Bank Societe Anonyme ("Cedel") duly
executed by the Company and authenticated by the Trustee as hereinafter
provided. The aggregate principal amount of the Unrestricted Global Security may
from time to time be increased or decreased by adjustments made on the records
of the Trustee and the Depositary or its nominee as hereinafter provided.
Each Global Security shall represent such of the outstanding Securities
as shall be specified therein and each shall provide that it shall represent the
aggregate amount of outstanding Securities from time to time endorsed thereon
and that the aggregate amount of outstanding Securities represented thereby may
from time to time be reduced or increased, as appropriate, to reflect exchanges
and redemptions. Any endorsement of a Global Security to reflect the amount of
any increase or decrease in the amount of outstanding Securities represented
thereby shall be made by the Trustee or the Custodian, at the direction of the
Trustee, in accordance with instructions given by the holder thereof as required
by Section 2.6 hereof.
The provisions of the "Operating Procedures of the Euroclear System"
and "Terms and Conditions Governing Use of Euroclear" and the "Management
Regulations" and "Instructions to Participants" of Cedel shall be applicable to
interests in the Unrestricted Global Security that are held by the Agent Member
through Euroclear or Cedel.
In the event that the Custodian ceases to hold the Global Security or
Securities on behalf of the Depositary and such Global Security or Securities
are then held by the Depositary and the Depositary will not accept such Global
Security or Securities because it bears the Restricted Securities Legend, the
Company will promptly arrange for cancellation of such Global Security or
Securities and for a new Global Security or Securities to be delivered to the
Depositary in accordance with this Indenture that does not contain such
Restricted Securities Legend, and such Global Security or Securities, to the
extent that such Global Security or Securities are still Transfer Restricted
Securities, will remain subject to the provisions of the Restricted Securities
Legend as if such legend was set forth thereon.
(b) Book-Entry Provisions. This Section 2.1(b) shall apply only to a
Global Security deposited with or on behalf of the Depositary.
The Company shall execute and the Trustee shall, in accordance with
this Section 2.1(b), authenticate and deliver initially one or more Global
Securities that (a) shall be registered in the name of the Depositary or nominee
of the Depositary and (b) shall be delivered by the Trustee to such Depositary
or pursuant to such Depositary's instructions or held by the Trustee as
Custodian for the Depositary pursuant to a FAST Balance Certificate Agreement
between the Depositary and the Trustee.
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Members of, or participants in, the Depositary ("Agent Members") shall
have no rights under this Indenture with respect to any Global Security held on
their behalf by the Depositary or by the Trustee as the Custodian of the
Depositary or under such Global Security, and the Depositary may be treated by
the Company, the Trustee and any agent of the Company or the Trustee as the
absolute owner of such Global Security for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall prevent the Company, the
Trustee or any agent of the Company or the Trustee from giving effect to any
written certification, proxy or other authorization furnished by the Depositary
or impair, as between the Depositary and its Agent Members, the operation of
customary practices of such Depositary governing the exercise of the rights of a
holder of a beneficial interest in any Global Security.
(c) Certificated Securities. Except as provided in Sections 2.6(c) and
2.6(f), owners of beneficial interests in Global Securities will not be entitled
to receive physical delivery of certificated Securities. Purchasers of
Securities who are institutional "accredited investors" (as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act and are referred to as
"Institutional Accredited Investors") who are not QIBs will receive certificated
Securities bearing the Restricted Securities Legend set forth in Exhibit A
hereto.
After a sale of any Securities during the period of the effectiveness
of a Shelf Registration Statement with respect to the Securities, all
requirements pertaining to legends on such Security will cease to apply, the
requirements requiring any such Security issued to certain holders be issued in
global form will cease to apply, and a certificated Security without legends
will be available to the holder of such Securities.
SECTION 2.2 Execution and Authentication. Two Officers shall sign the
Securities for the Company by manual or facsimile signature. The Company's seal
shall be reproduced on the Securities.
If an Officer whose signature is on a Security no longer holds that
office at the time the Security is authenticated, the Security shall
nevertheless be valid.
A Security shall not be valid until authenticated by the manual
signature of an authorized officer of the Trustee. The signature shall be
conclusive evidence that the Security has been authenticated under this
Indenture.
Upon a written order of the Company signed by two Officers, the Trustee
shall authenticate the Securities for original issue up to an aggregate
principal amount of $200,000,000 (plus up to $30,000,000 aggregate principal
amount of Securities that may be sold by the Company pursuant to the
over-allotment option granted pursuant to the Purchase Agreement). The aggregate
principal amount of Securities outstanding at any time shall not exceed such
amount except as provided in Section 2.7.
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Securities. An authenticating agent may authenticate
Securities whenever the Trustee may do so.
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Each reference in this Indenture to authentication by the Trustee includes
authentication by such agent. An authenticating agent has the same rights as an
Agent to deal with the Company or an Affiliate.
SECTION 2.3 Registrar, Paying Agent and Conversion Agent. The Company
shall maintain in the Borough of Manhattan, City of New York, State of New York
(i) an office or agency where Securities may be presented for registration of
transfer or for exchange ("Registrar"), (ii) an office or agency where
Securities may be presented for payment ("Paying Agent") and (iii) an office or
agency where Securities may be presented for conversion ("Conversion Agent").
The Registrar shall keep a register of the Securities and of their transfer and
exchange. The Company may appoint the Registrar, the Paying Agent and the
Conversion Agent. The Company may appoint one or more co-registrars, one or more
additional paying agents and one or more additional conversion agents in such
other locations as it shall determine; provided that no such designation 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, State of New York, for
such purposes. The term "Paying Agent" includes any additional paying agent and
the term "Conversion Agent" includes any additional conversion agent. The
Company may change any Paying Agent, Registrar, co-registrar or Conversion Agent
without prior notice to any Noteholder. The Company shall notify the Trustee of
the name and address of any Agent not a party to this Indenture. If the Company
fails to appoint or maintain another entity as Registrar, Paying Agent or
Conversion Agent, the Trustee shall act as such. The Company or any of its
Affiliates may act as Paying Agent, Registrar, co-registrar or Conversion Agent.
The Company initially appoints the Trustee as Paying Agent, Registrar,
Conversion Agent and Custodian and the Trustee hereby accepts such appointments
and each of the corporate trust office of the Trustee in Los Angeles, California
and the office or agency of the Trustee in the Borough of Manhattan, The City of
New York, State of New York (which shall initially be State Street Bank and
Trust Company, N.A., an Affiliate of the Trustee located at 61 Broadway,
Concourse Level, Corporate Trust Window, New York, New York 10006), shall be
considered as one such office or agency of the Company for the aforesaid
purposes.
SECTION 2.4 Paying Agent to Hold Money in Trust. The Company shall
require each Paying Agent other than the Trustee to agree in writing that the
Paying Agent will hold in trust for the benefit of Noteholders or the Trustee
all money held by the Paying Agent for the payment of principal of, premium, if
any, or interest or Liquidated Damages on the Securities, and will notify the
Trustee of any default by the Company in making any such payment. While any such
default continues, the Trustee may require a Paying Agent to pay all money held
by it to the Trustee. The Company at any time may require a Paying Agent to pay
all money held by it to the Trustee and to account for any money disbursed by
it. Upon payment over to the Trustee, the Paying Agent (if other than the
Company or any Affiliate of the Company) shall have no further liability for the
money. If the Company or an Affiliate of the Company acts as Paying Agent, it
shall segregate and hold in a separate trust fund for the benefit of the
Noteholders all money held by it as Paying Agent.
SECTION 2.5 Noteholder Lists. The Trustee shall preserve in as current
a form as is reasonably practicable the most recent list available to it of the
names and addresses of Noteholders. If the Trustee is not the Registrar, the
Company shall furnish to the Trustee on or before each interest
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payment date and at such other times as the Trustee may request in writing a
list in such form and as of such date as the Trustee may reasonably require of
the names and addresses of Noteholders.
SECTION 2.6 Transfer and Exchange. Where Securities are presented to
the Registrar or a co-registrar with a request to register a transfer or to
exchange them for an equal principal amount of Securities of other
denominations, the Registrar shall register the transfer or make the exchange if
its requirements for such transactions are met. To permit registrations of
transfers and exchanges, the Company shall issue and the Trustee shall
authenticate Securities at the Registrar's request. No service charge shall be
made for any registration of transfer or exchange (except as otherwise expressly
permitted herein), but the Company may require payment of a sum sufficient to
cover any transfer tax or similar governmental charge payable in connection
therewith (other than any such transfer tax or similar governmental charge
payable upon exchanges pursuant to Sections 2.6(f), 2.10, 3.6 or 11.5 hereof).
The Company and the Registrar shall not be required (i) to issue,
register the transfer of, or exchange Securities during a period beginning at
the opening of business 15 days before the day of any selection of Securities
for redemption under Section 3.2 hereof and ending at the close of business on
the day of selection, (ii) to exchange or register the transfer of any Security
so selected for redemption in whole or in part, except the unredeemed portion of
any Security being redeemed in part or (iii) to issue, register the transfer of
or exchange Securities submitted for repurchase (and not withdrawn) under
Section 4.7 hereof.
(a) Transfer and Exchange of Global Securities. The transfer and
exchange of Global Securities or beneficial interests therein shall be effected
through the Depositary, in accordance with this Indenture and the procedures of
the Depositary therefor, which shall include, to the extent such Global Security
is a Transfer Restricted Security, restrictions on transfer comparable to those
set forth herein and in the "Restricted Securities Legend" set forth on Exhibit
A hereto to the extent required by the Securities Act. Beneficial interests in a
Global Security may be transferred to persons who take delivery thereof in the
form of a beneficial interest in the same Global Security in accordance with the
transfer restrictions set forth in the "Restricted Securities Legend" set forth
on Exhibit A hereto. Transfers of beneficial interests in the Global Securities
to persons required to take delivery thereof in the form of an interest in
another Global Security shall be permitted as follows:
(i) Restricted Global Security to Unrestricted Global
Security. If, at any time, an owner of a beneficial interest in a Restricted
Global Security deposited with the Depositary (or the Trustee as Custodian for
the Depositary) wishes to transfer its interest in such Restricted Global
Security to a person who is required or permitted to take delivery thereof in
the form of an interest in an Unrestricted Global Security, such owner shall,
subject to compliance with the applicable procedures described herein (the
"Applicable Procedures"), exchange or cause the exchange of such interest for an
equivalent beneficial interest in an Unrestricted Global Security as provided in
this Section 2.6(a)(i). Upon receipt by the Trustee of (1) instructions given in
accordance with the Applicable Procedures from an Agent Member directing the
Trustee to credit
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or cause to be credited a beneficial interest in the Unrestricted Global
Security in an amount equal to the beneficial interest in the Restricted Global
Security to be exchanged, (2) a written order given in accordance with the
Applicable Procedures containing information regarding the participant account
of the Depositary and the Euroclear or Cedel account to be credited with such
increase, and (3) a certificate in the form of Exhibit B-1 hereto given by the
owner of such beneficial interest stating that the transfer of such interest has
been made in compliance with the transfer restrictions applicable to the Global
Securities and pursuant to and in accordance with Rule 903 or Rule 904 of
Regulation S or Rule 144, then the Trustee, as Registrar, shall instruct the
Depositary to reduce or cause to be reduced the aggregate principal amount at
maturity of the applicable Restricted Global Security and to increase or cause
to be increased the aggregate principal amount at maturity of the applicable
Unrestricted Global Security by the principal amount at maturity of the
beneficial interest in the Restricted Global Security to be exchanged, to credit
or cause to be credited to the account of the person specified in such
instructions a beneficial interest in the Unrestricted Global Security equal to
the reduction in the aggregate principal amount at maturity of the Restricted
Global Security, and to debit, or cause to be debited, from the account of the
person making such exchange or transfer the beneficial interest in the
Restricted Global Security that is being exchanged or transferred.
(ii) Unrestricted Global Security to Restricted Global
Security. If, at any time, an owner of a beneficial interest in an Unrestricted
Global Security deposited with the Depositary or with the Trustee as Custodian
for the Depositary wishes to transfer its interest in such Unrestricted Global
Security to a person who is required or permitted to take delivery thereof in
the form of an interest in a Restricted Global Security, such owner shall,
subject to the Applicable Procedures, exchange or cause the exchange of such
interest for an equivalent beneficial interest in a Restricted Global Security
as provided in this Section 2.6(a)(ii). Upon receipt by the Trustee of (1)
instructions from Euroclear or Cedel, if applicable, and the Depositary,
directing the Trustee, as Registrar, to credit or cause to be credited a
beneficial interest in the Restricted Global Security equal to the beneficial
interest in the Unrestricted Global Security to be exchanged, such instructions
to contain information regarding the participant account with the Depositary to
be credited with such increase, (2) a written order given in accordance with the
Applicable Procedures containing information regarding the participant account
of the Depositary and (3) if such transfer is being effected prior to the
expiration of the "40 day restricted period," a certificate in the form of
Exhibit B-2 attached hereto given by the owner of such beneficial interest
stating (A) if the transfer is pursuant to Rule 144A, that the person
transferring such interest in an Unrestricted Global Security reasonably
believes that the person acquiring such interest in a Restricted Global Security
is a QIB and is obtaining such beneficial interest in a transaction meeting the
requirements of Rule 144A and any applicable blue sky or securities laws of any
state of the United States or any other jurisdiction or (B) if the transfer is
pursuant to any other exemption from the registration requirements of the
Securities Act, that the transfer of such interest has been made in compliance
with the transfer restrictions applicable to the Global Securities and pursuant
to and in accordance with the requirements of the exemption claimed and in
accordance with any applicable blue sky or securities laws of any state of the
nited States or any other jurisdiction, such statement to be supported by an
Opinion of Counsel from the
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transferee or the transferor in form reasonably acceptable to the Company and to
the Registrar then the Trustee, as Registrar, shall instruct the Depositary to
reduce or cause to be reduced the aggregate principal amount at maturity of such
Unrestricted Global Security and to increase or cause to be increased the
aggregate principal amount at maturity of the applicable Restricted Global
Security by the principal amount at maturity of the beneficial interest in the
Unrestricted Global Security to be exchanged, and the Trustee, as Registrar,
shall instruct the Depositary, concurrently with such reduction, to credit or
cause to be credited to the account of the person specified in such instructions
a beneficial interest in the applicable Restricted Global Security equal to the
reduction in the aggregate principal amount at maturity of such Unrestricted
Global Security and to debit or cause to be debited from the account of the
person making such transfer the beneficial interest in the Unrestricted Global
Security that is being transferred.
(b) Transfer and Exchange of Certificated Securities. When certificated
Securities are presented by a holder to the Registrar with a request:
(x) to register the transfer of the certificated Securities;
or
(y) to exchange such certificated Securities for an equal
principal amount of certificated Securities of other authorized denominations,
the Registrar shall register the transfer or make the exchange as requested;
provided, however, that the certificated Securities presented or surrendered for
register of transfer or exchange:
(i) shall be duly endorsed or accompanied by a written
instruction of transfer in form satisfactory to the Registrar duly
executed by such holder or by his attorney, duly authorized in writing;
and
(ii) in the case of a certificated Security that is a Transfer
Restricted Security, such request shall be accompanied by the following
additional information and documents, as applicable:
(A) if such Transfer Restricted Security is being
delivered to the Registrar by a holder for registration in the
name of such holder, without transfer, or such Transfer
Restricted Security is being transferred to the Company, no
certification is required;
(B) if such Transfer Restricted Security is being
transferred to a QIB in accordance with Rule 144A under the
Securities Act or pursuant to an exemption from registration
in accordance with Rule 144 or Rule 903 or Rule 904 under the
Securities Act or pursuant to an effective registration
statement under the Securities Act, a certification to that
effect from such holder (in substantially the form of Exhibit
B-3 hereto) and, in the case of a transfer pursuant to Rule
903 or Rule 904,
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a certificate from the transferee the form of which may be
obtained from the Trustee or the Company; or
(C) if such Transfer Restricted Security is being
transferred in reliance on any other exemption from the
registration requirements of the Securities Act, a
certification to that effect from such holder (in
substantially the form of Exhibit B-3 hereto) and an Opinion
of Counsel from such holder or the transferee reasonably
acceptable to the Company and to the Registrar to the effect
that such transfer is in compliance with the Securities Act
and applicable state law.
Any certificated Security issued upon transfer or exchange that is a Transfer
Restricted Security will bear the "Restricted Securities Legend" set forth on
Exhibit A hereto.
(c) Transfer of a Beneficial Interest in a Restricted Global
Security or Unrestricted Global Security for a Certificated
Security.
(i) Any person having a beneficial interest in a Restricted
Global Security or Unrestricted Global Security may upon request, subject to the
Applicable Procedures, exchange such beneficial interest for a certificated
Security. Upon receipt by the Trustee of written instructions or such other form
of instructions as is customary for the Depositary (or Euroclear or Cedel, if
applicable), from the Depositary or its nominee on behalf of any person having a
beneficial interest in a Restricted Global Security or Unrestricted Global
Security, and, in the case of a Transfer Restricted Security, the following
additional information and documents (all of which may be submitted by
facsimile):
(A) if such beneficial interest is being transferred
to the person designated by the Depositary as being the
beneficial owner, a certification to that effect from such
person (in substantially the form of Exhibit B-4 hereto);
(B) if such beneficial interest is being transferred
to a QIB in accordance with Rule 144A under the Securities Act
or pursuant to an exemption from registration in accordance
with Rule 144 or Rule 903 or 904 under the Securities Act or
pursuant to an effective registration statement under the
Securities Act, a certification to that effect from the
transferor (in substantially the form of Exhibit B-4 hereto);
or
(C) if such beneficial interest is being transferred
in reliance on any other exemption from the registration
requirements of the Securities Act, a certification to that
effect from the transferor (in substantially the form of
Exhibit B-4 hereto) and an Opinion of Counsel from the
transferee or the transferor reasonably acceptable to the
Company and to the Registrar to the effect that such transfer
is in compliance with the Securities Act and applicable state
law,
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in which case the Trustee or the Custodian, at the direction of the Trustee,
shall, in accordance with the standing instructions and procedures existing
between the Depositary and the Custodian, cause the aggregate principal amount
of Restricted Global Securities or Unrestricted Global Securities, as
applicable, to be reduced accordingly and to debit, or cause to be debited, from
the account of the person making such exchange or transfer the beneficial
interest in the Global Security that is being exchanged or transferred and,
following such reduction, the Company shall execute and the Trustee shall
authenticate and deliver to the transferee a certificated Security in a
principal amount equal to such reduction in the aggregate principal amount of
Restricted Global Securities or Unrestricted Global Securities; provided,
however, that any person transferring a beneficial interest in a Unrestricted
Global Security during the "40 day restricted period" shall deliver a
certificate substantially the form of Exhibit B-2 attached hereto given by the
owner of such beneficial interest stating (A) if the transfer is pursuant to
Rule 144A, that the person transferring such interest in an Unrestricted Global
Security reasonably believes that the person acquiring such interest in a
Restricted Global Security is a QIB and is obtaining such beneficial interest in
a transaction meeting the requirements of Rule 144A and any applicable blue sky
or securities laws of any state of the United States or any other jurisdiction
or (B) if the transfer is pursuant to any other exemption from the registration
requirements of the Securities Act, that the transfer of such interest has been
made in compliance with the transfer restrictions applicable to the Global
Securities and pursuant to and in accordance with the requirements of the
exemption claimed and in accordance with any applicable blue sky or securities
laws of any state of the United States or any other jurisdiction, such statement
to be supported by an Opinion of Counsel from the transferee or the transferor
in form reasonably acceptable to the Company and to the Registrar.
(ii) Certificated Securities issued in exchange for a
beneficial interest in a Restricted Global Security or Unrestricted
Global Security, as applicable, pursuant to this Section 2.6(c) shall
be registered in such names and in such authorized denominations as the
Depositary, pursuant to instructions from its direct or indirect
participants or otherwise, shall instruct the Trustee. The Trustee
shall deliver such certificated Securities to the persons in whose
names such Securities are so registered. Following any such issuance of
certificated Securities, the Trustee, as Registrar, shall instruct the
Depositary to reduce or cause to be reduced the aggregate principal
amount at maturity of the applicable Global Security to reflect the
transfer.
Any certificated Security issued upon transfer or exchange that is a
Transfer Restricted Security will bear the "Restricted Securities Legend" set
forth on Exhibit A hereto.
(d) Restrictions on Transfer and Exchange of Global Securities.
Notwithstanding any other provision of this Indenture (other than the provisions
set forth in subsection (f) of this Section 2.6), a Global Security may not be
transferred as a whole except by the Depositary to a nominee of the Depositary
or by a nominee of the Depositary to the Depositary or another nominee of the
Depositary or by the Depositary or any such nominee to a successor Depositary or
a nominee of such successor Depositary.
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(e) Transfer and Exchange of a Certificated Security for a Beneficial
Interest in a Global Security. A certificated Security may not be transferred or
exchanged for a beneficial interest in a Global Security except upon
satisfaction of the following requirements. Any holder having a certificated
Security may upon request, subject to the Applicable Procedures, exchange such
certificated Security for a beneficial interest in a Global Security. Upon
receipt by the Registrar of a certificated Security, duly endorsed or
accompanied by a written instruction of transfer in form satisfactory to the
Registrar duly executed by such holder or his attorney, duly authorized in
writing, and the following additional information and documents (all of which
may be submitted by facsimile):
(1) If such certificated Security is a Transfer Restricted
Security and is being transferred to a QIB in accordance with Rule 144A
under the Securities Act for a beneficial interest in the Restricted
Global Security a certification to that effect from such holder that
such transfer is pursuant to Rule 144A (in substantially the form of
Exhibit B-3 hereto);
(2) If such certificated Security is a Transfer Restricted
Security and is being transferred for a beneficial interest in the
Unrestricted Global Security, a certification to the effect from such
holder that such transfer is in accordance with Rule 903 or 904 of
Regulation S or Rule 144 (in substantially the form of Exhibit B-3);
provided, in the case of such transfer pursuant to Regulation S, a
certificate which may be obtained from the Company or the Trustee shall
be provided by the transferee; provided further, in the case of such
transfer in reliance on any other exemption from the registration
requirements of the Securities Act, a certificate to that effect from
the transferor (in substantially the form of Exhibit B-3 hereto) and an
Opinion of Counsel for the transferor or transferee reasonably
acceptable to the Company and to the Registrar to the effect that such
transfer is in compliance with the Securities Act and applicable state
law shall also be provided.
(3) Whether or not such certificated Security is a Transfer
Restricted Security, written instructions of the holder directing the
Trustee or the Custodian, at the direction of the Trustee, to make an
endorsement on the applicable Global Security to reflect an increase in
the aggregate principal amount of the Securities represented by such
Global Security,
then the Registrar shall cancel such certificated Security and the Trustee or
the Custodian, at the direction of the Trustee, shall, in accordance with the
standing instructions and procedures existing between the Depositary and the
Custodian, cause the aggregate principal amount of Restricted Global Securities
or Unrestricted Global Securities, as applicable, to be increased accordingly
and the Trustee, as Registrar, shall instruct the Depositary to credit or cause
to be credited to the account of the person specified in the instructions a
beneficial interest in the applicable Global Security. If no Global Securities
are then outstanding, the Company shall issue and the Trustee shall authenticate
a new Global Security in the appropriate principal amount.
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(f) Authentication of Certificated Security in Absence of Depositary.
If at any time:
(i) the Depositary for the Securities notifies the Company
that the Depositary is unwilling or unable to continue as Depositary
for the Global Securities and a successor Depositary for the Global
Securities is not appointed by the Company within 90 days after
delivery of such notice; or
(ii) an Event of Default has occurred and is continuing
then the Company shall execute, and the Trustee shall, upon receipt of an
authentication order in accordance with Section 2.2 hereof, authenticate and
deliver, certificated Securities in an aggregate principal amount equal to the
principal amount of the Global Securities in exchange for such Global
Securities, which shall, in the case of Transfer Restricted Securities, bear any
applicable legends.
In the event of the occurrence of either of the events specified in
this Section, the Company will promptly make available to the Trustee a
reasonable supply of certificated Securities in definitive, fully registered
form without interest coupons.
(g) Legends.
(i) Subject the provisions of this Section 2.6(g), each
Security certificate evidencing the Global Securities and the certificated
Securities (other than the Unrestricted Global Security) and all Securities
issued in exchange therefor or substitution therefor) shall bear a legend in
substantially the form set forth in Exhibit A as the "Restricted Securities
Legend"; provided that during the "40 day restricted period" the Unrestricted
Global Security shall be subject to the provisions of the legend set forth in
Exhibit A hereto as if such legend was set forth on the Unrestricted Global
Security and shall be a Transfer Restricted Security, provided further that from
and after the end of the "40 day restricted period" the Unrestricted Global
Security shall not be subject to the provisions of the legend set forth in
Exhibit A hereto and shall not be a Transfer Restricted Security.
(ii) Upon any sale or transfer of a Transfer Restricted
Security (whether in certificated or global form) pursuant to Rule 144 under the
Securities Act, the Registrar shall permit the holder thereof to exchange such
Transfer Restricted Security for a Security that does not bear the "Restricted
Securities Legend" set forth in Exhibit A hereto upon receipt of applicable
certification from the transferring holder substantially in the form of Exhibit
B-3 hereto (including any opinions required hereby or thereby).
(iii) Upon any sale or transfer of a Transfer Restricted
Security (whether in certificated or global form) in reliance on any exemption
from the registration requirements of the Securities Act (other than Rule 144
under the Securities Act) that permits such holder to remove the "Restricted
Securities Legend" set forth in Exhibit A hereto in compliance with federal and
state securities law, the Registrar shall permit the holder thereof to exchange
such Transfer Restricted Security for a Security that does not bear the
"Restricted Securities Legend" set forth in Exhibit A
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hereto upon receipt from such holder or transferee of an Opinion of
Counsel to the Company and the Registrar in form reasonably acceptable to the
Company and the Registrar (which Opinion of Counsel shall also state that the
transfer restrictions in the Restrictive Securities Legend are no longer
applicable);
(iv) Notwithstanding any other provisions set forth in this
Indenture, upon any sale of a Transfer Restricted Security (whether in
certificated or global form) pursuant to registration statement that is
effective at such time of transfer, the Registrar shall permit the holder
thereof to exchange such Transfer Restricted Security for a Security that does
not bear the "Restricted Securities Legend" set forth in Exhibit A hereto.
(v) Any Security that is a Transfer Restricted Security
(whether in certificated form or global form) sold or transferred pursuant to
(ii), (iii) or (iv) above will not bear, or be subject to the provisions of (in
the case of a beneficial interest in a Global Security), the "Restricted
Securities Legend" and will not be subject to any restrictions on transfer.
Transfers of beneficial interests in any Global Security will remain subject to
the procedures of the Depositary.
(h) Initial Purchasers. The Initial Purchasers shall not be required to
deliver, and neither the Company nor the Trustee shall demand therefrom, any of
the certifications or opinions described in this Section 2.6 in connection with
the initial issuance and delivery by the Company of the Securities on the
effective date hereof or on the date of any settlement in connection with the
exercise of the overallotment option granted to the Initial Purchasers in the
Purchase Agreement, including with respect to the issuance and delivery of
Securities that are Transfer Restricted Securities.
SECTION 2.7 Replacement Securities. If the holder of a Security claims
that the Security has been lost, destroyed or wrongfully taken or if such
Security is mutilated and is surrendered to the Trustee, the Company shall issue
and the Trustee shall authenticate a replacement Security if the Trustee's and
the Company's requirements are met. If required by the Trustee or the Company,
an indemnity bond must be sufficient in the judgment of both to protect and hold
harmless the Company, the Trustee, any Agent or any authenticating agent from
any loss, liability or expense which any of them may suffer if a Security is
replaced. The Company may charge for its expenses in replacing a Security.
In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, or is about to be redeemed or
purchased by the Company pursuant to Article III hereof or converted into shares
of Common Stock pursuant to Article V hereof, the Company in its discretion may,
instead of issuing a new Security, pay, redeem, purchase or convert such
Security, as the case may be.
Every replacement Security is an additional obligation of the Company
and shall be entitled to all the benefits provided under this Indenture equally
and proportionately with all other Securities duly issued hereunder.
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SECTION 2.8 Outstanding Securities. The Securities outstanding at any
time are all the Securities authenticated by the Trustee except for those
canceled by it, those delivered to it for cancellation, and those described in
this Section as not outstanding.
If a Security is replaced (including pursuant to Section 2.1(a)), paid
or purchased pursuant to Section 2.7 hereof, it ceases to be outstanding unless
the Trustee receives proof satisfactory to it that the replaced, paid or
purchased Security is held by a bona fide purchaser.
If Securities are considered paid under Section 4.1 hereof, they cease
to be outstanding and interest on them ceases to accrue.
A Security does not cease to be outstanding because the Company or an
Affiliate of the Company holds the Security.
SECTION 2.9 Treasury Securities. In determining whether the Noteholders
of the required principal amount of Securities have concurred in any direction,
waiver or consent, Securities owned by the Company or an Affiliate of the
Company shall be considered as though they are not outstanding, except that for
the purposes of determining whether the Trustee shall be protected in relying on
any such direction, waiver or consent, only Securities which a Trust Officer of
the Trustee actually knows are so owned shall be so disregarded.
SECTION 2.10 Temporary Securities. Until definitive Securities are
ready for delivery, the Company may prepare and the Trustee shall authenticate
temporary Securities. Temporary Securities shall be substantially in the form of
definitive Securities but may have variations that the Company considers
appropriate for temporary Securities. Without unreasonable delay, the Company
shall prepare and the Trustee shall authenticate definitive Securities in
exchange for temporary Securities.
SECTION 2.11 Cancellation. The Company at any time may deliver
Securities to the Trustee for cancellation. The Registrar, Paying Agent and
Conversion Agent shall forward to the Trustee any Securities surrendered to them
for registration of transfer, redemption, conversion, exchange or payment. The
Trustee shall promptly cancel all Securities surrendered for registration of
transfer, redemption, conversion, exchange, payment, replacement or
cancellation, shall destroy such canceled Securities and deliver to the Company
a certificate of a Trust Officer certifying as to such destruction. The Company
may not issue new Securities to replace Securities that it has paid or that have
been delivered to the Trustee for cancellation or that any holder has converted.
SECTION 2.12 Transfer of Interests in Global Securities.
(a) Any Global Security that is transferable to the beneficial owners
thereof in the form of certificated Securities pursuant to Section 2.6 shall be
surrendered by the Depositary to the Trustee located in New York, New York or
Los Angeles, California, to be so transferred, in whole or from time to time in
part, without charge, and the Trustee shall authenticate and deliver, upon such
transfer of each portion of such Global Security, an equal aggregate principal
amount at maturity of Securities of authorized denominations in the form of
certificated Securities. Any portion of a Global Security
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transferred pursuant to this Section shall be executed, authenticated and
delivered only in denominations of $1,000 and any integral multiple thereof and
registered in such names as the Depositary shall direct. Any Securities in the
form of certificated Securities delivered in exchange for an interest in the
Global Security shall, except as otherwise provided by Section 2.6(b), bear the
Restricted Securities Legend set forth in Exhibit A hereto.
(b) Subject to the provisions of Section 2.12(a), the registered holder
of a Global Security may grant proxies and otherwise authorize any person,
including Agent Members and persons that may hold interests through Agent
Members, to take any action which a holder is entitled to take under this
Indenture or the Securities.
SECTION 2.13 Defaulted Interest or Liquidated Damages. If the Company
fails to make a payment of interest or Liquidated Damages on the Securities, it
shall pay such defaulted interest or Liquidated Damages plus any interest
payable on the defaulted interest, in any lawful manner. It may pay such
defaulted interest or Liquidated Damages, plus any such interest payable on it,
to the persons who are Noteholders on a subsequent special record date. The
Company shall fix any such record date and payment date. At least 15 days before
any such record date, the Company shall cause to be mailed to Noteholders a
notice that states the record date, payment date, and amount of such interest or
Liquidated Damages to be paid.
ARTICLE III
REDEMPTION AND REPURCHASE
SECTION 3.1 Notices to Trustee. If the Company elects to redeem
Securities pursuant to the optional redemption provision of Section 3.7 hereof,
it shall notify the Trustee of the redemption date and the principal amount of
Securities to be redeemed. The Company shall give each notice provided for in
this Section 3.1 at least 20 days before the redemption date (unless a shorter
notice period shall be satisfactory to the Trustee).
SECTION 3.2 Selection of Securities to be Redeemed. If less than all
the Securities are to be redeemed, the Trustee shall select the Securities to be
redeemed in compliance with the requirements of the principal national
securities exchange, if any, on which the Securities are listed, or, if the
Securities are not so listed, on a pro rata basis. The Trustee shall make the
selection not more than 60 days and not less than 15 days before the redemption
date from Securities outstanding not previously called for redemption. The
Trustee may select for redemption portions of the principal of Securities that
have denominations larger than $1,000. Securities and portions of them it
selects shall be in amounts of $1,000 or integral multiples of $1,000.
Provisions of this Indenture that apply to Securities called for redemption also
apply to portions of Securities called for redemption. The Trustee shall notify
the Company promptly of the Securities or portions of Securities to be called
for redemption.
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If any Security selected for partial redemption is converted in part
after such selection, the converted portion of such Security shall be deemed (so
far as may be) to be the portion to be selected for redemption. The Securities
(or portions thereof) so selected shall be deemed duly selected for redemption
for all purposes hereof, notwithstanding that any such Security is converted in
whole or in part before the mailing of the notice of redemption. Upon any
redemption of less than all the Securities, the Company and the Trustee may
treat as outstanding any Securities surrendered for conversion during the period
15 days next preceding the mailing of a notice of redemption and need not treat
as outstanding any Security authenticated and delivered during such period in
exchange for the unconverted portion of any Security converted in part during
such period.
SECTION 3.3 Notice of Redemption. At least 15 days but not more than 60
days before a redemption date, the Company shall mail a notice of redemption to
each holder whose Securities are to be redeemed at such holder's registered
address.
The notice shall identify the Securities to be redeemed and shall
state:
(a) the redemption date;
(b) the redemption price;
(c) if any Security is being redeemed in part, the portion of the
principal amount of such Security to be redeemed and that, after the redemption
date, upon cancellation of such Security, a new Security or Securities in
principal amount equal to the unredeemed portion will be issued in the name of
the holder thereof;
(d) the name and address of the Paying Agent;
(e) that Securities called for redemption must be surrendered to the
Paying Agent to collect the redemption price plus accrued interest and
Liquidated Damages, if any;
(f) that, unless the Company defaults in making such redemption payment
or the Paying Agent is prohibited from making such payment pursuant to the terms
of this Indenture, interest and Liquidated Damages on Securities called for
redemption ceases to accrue on and after the redemption date; and
(g) the paragraph of the Securities pursuant to which the Securities
called for redemption are being redeemed.
Such notice shall also state the current Conversion Price and the date
on which the right to convert such Securities or portions thereof into Common
Stock of the Company will expire.
At the Company's request, the Trustee shall give notice of redemption
in the Company's name and at its expense.
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SECTION 3.4 Effect of Notice of Redemption. Once notice of redemption
is mailed, Securities called for redemption become due and payable on the
redemption date at the price set forth in the Security.
SECTION 3.5 Deposit of Redemption Price. On or before the redemption
date, the Company shall deposit with the Trustee or with the Paying Agent money
sufficient to pay the redemption price of and accrued interest and Liquidated
Damages, if any, up to but not including the redemption date on all Securities
to be redeemed on that date (subject to the right of holders of record on the
relevant record date to receive interest and Liquidated Damages, if any, due on
an interest payment date) unless theretofore converted into Common Stock
pursuant to the provisions hereof. The Trustee or the Paying Agent shall return
to the Company any money not required for that purpose.
SECTION 3.6 Securities Redeemed in Part. Upon cancellation of a
Security that is redeemed in part, the Company shall issue and the Trustee shall
authenticate for the holder at the expense of the Company a new Security equal
in principal amount to the unredeemed portion of the Security surrendered.
SECTION 3.7 Optional Redemption. The Company may redeem all or any
portion of the Securities, upon the terms and at the redemption prices set forth
in each of the Securities. Any redemption pursuant to this Section 3.7 shall be
made pursuant to the provisions of Section 3.1 through 3.6 hereof.
SECTION 3.8 Designated Event Offer.
(a) In the event that, pursuant to Section 4.7 hereof, the Company
shall commence a Designated Event Offer, the Company shall follow the procedures
in this Section 3.8.
(b) The Designated Event Offer shall remain open for a period specified
by the Company which shall be no less than 30 calendar days and no more than 40
calendar days following its commencement on the date of the mailing of notice in
accordance with Section 4.7(b) hereof (the "Commencement Date"), except to the
extent that a longer period is required by applicable law (the "Tender Period").
Upon the expiration of the Tender Period (the "Designated Event Payment Date"),
the Company shall purchase the principal amount of Securities required to be
purchased pursuant to Section 4.7 hereof (the "Offer Amount").
(c) If the Designated Event Payment Date is on or after an interest
payment record date and on or before the related interest payment date, any
accrued interest or Liquidated Damages will be paid to the person in whose name
a Security is registered at the close of business on such record date, and no
additional interest or Liquidated Damages will be payable to Noteholders who
tender Securities pursuant to the Designated Event Offer.
(d) The Company shall provide the Trustee with notice of the Designated
Event Offer at least 10 Business Days before the Commencement Date.
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(e) On or before the Commencement Date, the Company or the Trustee
(upon the request and at the expense of the Company) shall send, by first class
mail, a notice to each of the Noteholders, which shall govern the terms of the
Designated Event Offer and shall state:
(i) that the Designated Event Offer is being made pursuant to
this Section 3.8 and Section 4.7 hereof and that all Securities
tendered will be accepted for payment;
(ii) the purchase price (as determined in accordance with
Section 4.7 hereof), the length of time the Designated Event Offer will
remain open and the Designated Event Payment Date;
(iii) that any Security or portion thereof not tendered or
accepted for payment will continue to accrue interest and, if
applicable, Liquidated Damages;
(iv) that, unless the Company defaults in the payment of the
Designated Event Payment, any Security or portion thereof accepted for
payment pursuant to the Designated Event Offer shall cease to accrue
interest and, if applicable, Liquidated Damage, after the Designated
Event Payment Date;
(v) that Noteholders electing to have a Security or portion
thereof purchased pursuant to any Designated Event Offer will be
required to surrender the Security, with the form entitled "Option of
Noteholder To Elect Purchase" on the reverse of the Security completed,
to the Paying Agent at the address specified in the notice prior to the
close of business on the third Business Day preceding the Designated
Event Payment Date;
(vi) that Noteholders will be entitled to withdraw their
election if the Paying Agent receives, not later than the close of
business on the second Business Day preceding the Designated Event
Payment Date, or such longer period as may be required by law, a letter
or a telegram, telex or facsimile transmission (receipt of which is
confirmed and promptly followed by a letter) setting forth the name of
the Noteholder, the principal amount of the Security or portion thereof
the Noteholder delivered for purchase and a statement that such
Noteholder is withdrawing his election to have the Security or portion
thereof purchased; and
(vii) that Noteholders whose Securities are being purchased
only in part will be issued new Securities equal in principal amount to
the unpurchased portion of the Securities surrendered, which
unpurchased portion must be equal to $1,000 in principal amount or an
integral multiple thereof.
In addition, the notice shall contain all instructions and materials
that the Company shall reasonably deem necessary to enable such Noteholders to
tender Securities pursuant to the Designated Event Offer.
(f) On or prior to the Designated Event Payment Date, the Company shall
irrevocably deposit with the Trustee or a Paying Agent in immediately available
funds an amount equal to the
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Offer Amount to be held for payment in accordance with the terms of this Section
3.8. On the Designated Event Payment Date, the Company shall, to the extent
lawful, (i) accept for payment the Securities or portions thereof tendered
pursuant to the Designated Event Offer, (ii) deliver or cause to be delivered to
the Trustee Securities so accepted and (iii) deliver to the Trustee an Officers'
Certificate stating such Securities or portions thereof have been accepted for
payment by the Company in accordance with the terms of this Section 3.8. The
Paying Agent shall promptly (but in any case not later than ten (10) calendar
days after the Designated Event Payment Date) mail or deliver to each tendering
Noteholder an amount equal to the purchase price of the Securities tendered by
such Noteholder, and the Trustee shall promptly authenticate and mail or deliver
to such Noteholders a new Security equal in principal amount to any unpurchased
portion of the Security surrendered, if any; provided, that each new Security
shall be in a principal amount of $1,000 or an integral multiple thereof. Any
Securities not so accepted shall be promptly mailed or delivered by or on behalf
of the Company to the holder thereof. The Company will publicly announce the
results of the Designated Event Offer on, or as soon as practicable after, the
Designated Event Payment Date.
(g) The Designated Event Offer shall be made by the Company in
compliance with all applicable provisions of the Exchange Act, and all
applicable tender offer rules promulgated thereunder, and shall include all
instructions and materials that the Company shall reasonably deem necessary to
enable such Noteholders to tender their Securities.
ARTICLE IV
COVENANTS
SECTION 4.1 Payment of Securities. The Company shall pay the principal
of, premium, if any, Liquidated Damages, if any and interest on the Securities
on the dates and in the manner provided in the Securities. Principal and
interest shall be considered paid on the date due if the Paying Agent (other
than the Company or an Affiliate of the Company) holds on that date money
designated for and sufficient to pay all principal, premium, if any, Liquidated
Damages, if any and interest then due and such Paying Agent is not prohibited
from paying such money to the Noteholders on that date pursuant to the terms of
this Indenture. To the extent lawful, the Company shall pay interest and
Liquidated Damages (including post petition interest in any proceeding under any
Bankruptcy Law) on overdue installments of interest (without regard to any
applicable grace period) at the rate borne by the Securities, compounded
semiannually. The Company shall also pay all Liquidated Damages, if any, in the
manner, on the dates and in the amounts set forth in the Registration Agreement.
SECTION 4.2 SEC Reports. Whether or not required by the rules and
regulations of the SEC, so long as any Securities are outstanding, the Company
will file with the SEC and, if requested, furnish to the Trustee and to the
holders of Securities all quarterly and annual financial information required to
be contained in a filing with the SEC on Forms 10-Q and 10-K, including a
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and, with
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respect to annual information only, a report thereon by the Company's certified
independent accountants.
SECTION 4.3 Compliance Certificate. The Company shall deliver to the
Trustee, within 120 days after the end of each fiscal year of the Company, an
Officers' Certificate stating that a review of the activities of the Company and
its Subsidiaries during the preceding fiscal year has been made under the
supervision of the signing Officers with a view to determining whether the
Company has kept, observed, performed and fulfilled its obligations under, and
complied with the covenants and conditions contained in, this Indenture, and
further stating, as to each such Officer signing such certificate, that to the
best of his or her knowledge, the Company has kept, observed, performed and
fulfilled each and every covenant, and complied with the covenants and
conditions contained in this Indenture and is not in default in the performance
or observance of any of the terms, provisions and conditions hereof (or, if a
Default or Event of Default shall have occurred, describing all such Defaults or
Events of Default of which he or she may have knowledge) and that to the best of
his or her knowledge no event has occurred and remains in existence by reason of
which payments on account of the principal or of interest, if any, on the
Securities are prohibited.
One of the Officers signing such Officers' Certificate shall be either
the Company's principal executive officer, principal financial officer or
principal accounting officer.
The Company will, so long as any of the Securities are outstanding,
deliver to the Trustee, forthwith upon becoming aware of:
(a) any Default, Event of Default or default in the performance of any
covenant, agreement or condition contained in this Indenture; or
(b) any event of default under any other mortgage, indenture or
instrument described in Section 8.1(e), an Officers' Certificate specifying such
Default, Event of Default or default.
Immediately upon the occurrence of any event giving rise to Liquidated
Damages in respect of any of the Securities in accordance with Section 11 of the
form thereof or the termination of any such Liquidated Damages, the Company
shall give the Trustee notice of such Liquidated Damages or termination thereof,
of the interest rate borne by the Securities after giving effect to such
Liquidated Damages or termination thereof and of the event giving rise to such
Liquidated Damages or termination thereof (such notice to be contained in an
Officers' Certificate), and prior to receipt of such Officers' Certificate the
Trustee shall be entitled to assume that no such Liquidated Damages or
termination thereof has occurred, as the case may be.
SECTION 4.4 Stay, Extension and Usury Laws. The Company covenants (to
the extent that it may lawfully do so) that it will not at any time insist upon,
plead, or in any manner whatsoever claim or take the benefit or advantage of,
any stay, extension or usury law wherever enacted, now or at any time hereafter
in force, which may affect the covenants or the performance of this Indenture;
and the Company (to the extent it may lawfully do so) hereby expressly waives
all benefit or advantage of any such law, and covenants that it will not, by
resort to any such law, hinder, delay or
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impede the execution of any power herein granted to the Trustee, but will suffer
and permit the execution of every such power as though no such law has been
enacted.
SECTION 4.5 Corporate Existence. Subject to Article VII hereof, the
Company will do or cause to be done all things necessary to preserve and keep in
full force and effect its corporate existence and the corporate, partnership or
other existence of each Subsidiary of the Company in accordance with the
respective organizational documents of each Subsidiary and the rights (charter
and statutory), licenses and franchises of the Company and its Subsidiaries;
provided, however, that the Company shall not be required to preserve any such
right, license or franchise, or the corporate, partnership or other existence of
any Subsidiary, if the Board of Directors shall determine that the preservation
thereof is no longer desirable in the conduct of the business of the Company and
its Subsidiaries taken as a whole and that the loss thereof is not adverse in
any material respect to the Noteholders. Notwithstanding the foregoing, the
corporate existence of any Subsidiary may also be terminated in connection with
any Board approved corporate restructuring or reorganization.
SECTION 4.6 Taxes. The Company shall, and shall cause each of its
Subsidiaries to, pay prior to delinquency all taxes, assessments and
governmental levies, except as contested in good faith and by appropriate
proceedings.
SECTION 4.7 Designated Event.
(a) Upon the occurrence of a Designated Event, each holder of
Securities shall have the right, in accordance with this Section 4.7 and Section
3.8 hereof, to require the Company to repurchase all or any part (equal to
$1,000 or an integral multiple thereof) of such holder's Securities pursuant to
the terms of Section 3.8 (the "Designated Event Offer") at a purchase price
equal to 101% of the principal amount thereof, together with accrued and unpaid
interest thereon and Liquidated Damages, if any, to the Designated Event Payment
Date (the "Designated Event Payment").
(b) Within 30 days following any Designated Event, the Company shall
mail to each holder the notice provided by Section 3.8(e).
(c) Payment by the Company of the Designated Event Payment upon the
occurrence of a Designated Event is subject to the subordination provisions of
Article VI.
SECTION 4.8 Shareholder Rights Plan. In the event that the Company
implements a stockholder rights plan, such rights plan shall provide that upon
conversion of the Securities the holders will receive, in addition to the Common
Stock issuable upon such conversion, the rights issued under such rights plan
(whether or not such rights have separated from the Common Stock at the time of
such conversion), provided that a holder of Securities shall be subject to all
of the terms and conditions of any such rights plan.
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ARTICLE V
CONVERSION
SECTION 5.1 Conversion Privilege. A holder of a Security may convert
the principal amount thereof (or any portion thereof that is an integral
multiple of $1,000) into fully paid and nonassessable shares of Common Stock of
the Company at any time after 90 days following the date of original issuance
thereof and prior to the close of business (New York time) on the date of the
Security's maturity at the Conversion Price then in effect, except that, with
respect to any Security called for redemption, such conversion right shall
terminate at the close of business on the Business Day immediately preceding the
redemption date (unless the Company shall default in making the redemption
payment when it becomes due, in which case the conversion right shall terminate
on the date such default is cured). A Security in respect of which a holder has
delivered an "Option of Noteholder to Elect Purchase" form appearing in Exhibit
A attached hereto exercising the option of such holder to require the Company to
purchase such Security may be converted only if the notice of exercise is
withdrawn as provided in Section 3.8. The number of shares of Common Stock
issuable upon conversion of a Security is determined by dividing the principal
amount of the Security converted by the conversion price in effect on the
Conversion Date (the "Conversion Price").
The initial Conversion Price is stated in paragraph 10 of the
Securities and is subject to adjustment as provided in this Article V.
Provisions of this Indenture that apply to conversion of all of a
Security also apply to conversion of a portion of it. A holder of Securities is
not entitled to any rights of a holder of Common Stock (other than as provided
in Section 4.8 hereof) until such holder of Securities has converted such
Securities into Common Stock, and only to the extent that such Securities are
deemed to have been converted into Common Stock under this Article V.
SECTION 5.2 Conversion Procedure. To convert a Security, a holder must
satisfy the requirements in paragraph 10 of the Securities. The date on which
the holder satisfies all of those requirements is the conversion date (the
"Conversion Date"). As soon as practicable after the Conversion Date, the
Company shall deliver to the holder through the Conversion Agent a certificate
for the number of whole shares of Common Stock issuable upon the conversion and
a check for any fractional share determined pursuant to Section 5.3. Such
certificate shall bear any legends set forth on the converted Security, unless
and to the extent the restrictions contained in such legends no longer apply to
such Common Stock. The person in whose name the certificate is registered shall
become the stockholder of record on the Conversion Date and, as of such date,
such person's rights as a Noteholder shall cease; provided, however, that no
surrender of a Security on any date when the stock transfer books of the Company
shall be closed shall be effective to constitute the person entitled to receive
the shares of Common Stock upon such conversion as the stockholder of record of
such shares of Common Stock on such date, but such surrender shall be effective
to constitute the person entitled to receive such shares of Common Stock as the
stockholder of record thereof for all purposes at the close of business on the
next succeeding day on which such stock transfer books are open; provided
further, however, that such conversion shall be at the Conversion Price in
effect on the date
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that such Security shall have been surrendered for conversion, as if the stock
transfer books of the Company had not been closed.
No payment or adjustment will be made for accrued and unpaid interest
and Liquidated Damages on a converted Security or for dividends or distributions
on shares of Common Stock issued upon conversion of a Security, but if any
holder surrenders a Security for conversion after the close of business on the
record date for the payment of an installment of interest and Liquidated Damages
and prior to the opening of business on the next interest payment date, then,
notwithstanding such conversion, the interest and Liquidated Damages payable on
such interest payment date shall be paid to the holder of such Security on such
record date. In such event, such Security, when surrendered for conversion,
must be accompanied by payment in funds acceptable to the Company of an amount
equal to the interest and Liquidated Damages payable on such interest payment
date on the portion so converted.
If a holder converts more than one Security at the same time, the
number of whole shares of Common Stock issuable upon the conversion shall be
based on the total principal amount of Securities converted.
Upon surrender of a Security that is converted in part, the Trustee
shall authenticate for the holder a new Security equal in principal amount to
the unconverted portion of the Security surrendered.
SECTION 5.3 Fractional Shares. The Company will not issue fractional
shares of Common Stock upon conversion of a Security. In lieu thereof, the
Company will pay an amount in cash based upon the Daily Market Price of the
Common Stock on the trading day prior to the date of conversion.
SECTION 5.4 Taxes on Conversion. The issuance of certificates for
shares of Common Stock upon the conversion of any Security shall be made without
charge to the converting Noteholder for such certificates or for any tax in
respect of the issuance of such certificates, and such certificates shall be
issued in the respective names of, or in such names as may be directed by, the
holder or holders of the converted Security; provided, however, that in the
event that certificates for shares of Common Stock are to be issued in a name
other than the name of the holder of the Security converted, such Security, when
surrendered for conversion, shall be accompanied by an instrument of transfer,
in form satisfactory to the Company, duly executed by the registered holder
thereof or his duly authorized attorney; and provided further, however, that the
Company shall not be required to pay any tax which may be payable in respect of
any transfer involved in the issuance and delivery of any such certificates in a
name other than that of the holder of the converted Security, and the Company
shall not be required to issue or deliver such certificates unless or until the
person or persons requesting the issuance 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 or is not applicable.
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SECTION 5.5 Company to Provide Stock. The Company shall at all times
reserve and keep available, free from preemptive rights, out of its authorized
but unissued Common Stock, solely for the purpose of issuance upon conversion of
Securities as herein provided, a sufficient number of shares of Common Stock to
permit the conversion of all outstanding Securities for shares of Common Stock.
All shares of Common Stock which may be issued upon conversion of the
Securities shall be duly authorized, validly issued, fully paid and
nonassessable when so issued.
SECTION 5.6 Adjustment of Conversion Price. The Conversion Price shall
be subject to adjustment from time to time as follows:
(a) In case the Company shall (1) pay a dividend in shares of Common
Stock to holders of Common Stock, (2) make a distribution in shares of Common
Stock to holders of Common Stock, (3) subdivide its outstanding shares of Common
Stock into a greater number of shares of Common Stock or (4) combine its
outstanding shares of Common Stock into a smaller number of shares of Common
Stock, the Conversion Price in effect immediately prior to such action shall be
adjusted so that the holder of any Security thereafter surrendered for
conversion shall be entitled to receive the number of shares of Common Stock
which he would have owned immediately following such action had such Securities
been converted immediately prior thereto. Any adjustment made pursuant to this
subsection (a) shall become effective immediately after the record date in the
case of a dividend or distribution and shall become effective immediately after
the effective date in the case of a subdivision or combination.
(b) In case the Company shall issue rights or warrants to substantially
all holders of Common Stock entitling them (for a period commencing no earlier
than the record date for the determination of holders of Common Stock entitled
to receive such rights or warrants and expiring not more than 45 days after such
record date) to subscribe for or purchase shares of Common Stock (or securities
convertible into Common Stock) at a price per share less than the current market
price (as determined pursuant to subsection (f) below) of the Common Stock on
such record date, 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 such record date by a fraction of which the numerator shall
be the number of shares of Common Stock outstanding on such record date, plus
the number of shares of Common Stock which the aggregate offering price of the
offered shares of Common Stock (or the aggregate conversion price of the
convertible securities so offered) would purchase at such current market price,
and of which the denominator shall be the number of shares of Common Stock
outstanding on such record date plus the number of additional shares of Common
Stock offered (or into which the convertible securities so offered are
convertible). Such adjustments shall become effective immediately after such
record date.
(c) In case the Company shall distribute to all holders of Common Stock
shares of any class of Capital Stock of the Company other than Common Stock,
evidences of indebtedness or other assets (other than cash dividends out of
current or retained earnings), or shall distribute to substantially all holders
of Common Stock rights or warrants to subscribe for securities (other than
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those securities referred to in subsection (b) above), then in each such case
the Conversion Price shall be adjusted so that the same shall equal the price
determined by multiplying the Conversion Price in effect immediately prior to
the date of such distribution by a fraction of which the numerator shall be the
current market price (determined as provided in subsection (f) below) of the
Common Stock on the record date mentioned below less the then fair market value
(as determined by the Board of Directors, whose determination shall be
conclusive evidence of such fair market value and described in a Board
Resolution) of the portion of the assets so distributed or of such subscription
rights or warrants applicable to one share of Common Stock, and of which the
denominator shall be such current market price of the Common Stock. Such
adjustment shall become effective immediately after the record date for the
determination of the holders of Common Stock entitled to receive such
distribution. Notwithstanding the foregoing, in the event that the Company shall
distribute rights or warrants to subscribe for additional shares of the
Company's Capital Stock (other than the Common Stock referred to in subsection
(b) above) ("Rights") pro rata to holders of Common Stock, the Company may, in
lieu of making any adjustment pursuant to this Section 5.6, make proper
provision so that each holder of a Security who converts such Security (or any
portion thereof) after the record date for such distribution and prior to the
expiration or redemption of the Rights shall be entitled to receive upon such
conversion, in addition to the shares of Common Stock issuable upon such
conversion (the "Conversion Shares"), a number of Rights to be determined as
follows: (i) if such conversion occurs on or prior to the date for the
distribution to the holders of Rights of separate certificates evidencing such
Rights (the "Distribution Date")," the same number of Rights to which a holder
of a number of shares of Common Stock equal to the number of Conversion Shares
is entitled at the time of such conversion in accordance with the terms and
provisions of and applicable to the Rights; and (ii) if such conversion occurs
after the Distribution Date, the same number of Rights to which a holder of the
number of shares of Common Stock into which the principal amount of the Security
so converted was convertible immediately prior to the Distribution Date would
have been entitled on the Distribution Date in accordance with the terms and
provisions of and applicable to the Rights.
(d) In case the Company shall, by dividend or otherwise, at any time
distribute to all holders of its Common Stock cash (including any distributions
of cash out of current or retained earnings of the Company but excluding any
cash that is distributed as part of a distribution requiring a Conversion Price
adjustment pursuant to paragraph (c) of this Section) in an aggregate amount
that, together with the sum of (x) the aggregate amount of any other
distributions to all holders of its Common Stock made in cash plus (y) all
Excess Payments, in each case made within the 12 months preceding the date fixed
for determining the stockholders entitled to such distribution (the
"Distribution Record Date") and in respect of which no Conversion Price
adjustment pursuant to paragraphs (c) or (e) of this Section or this paragraph
(d) has been made, exceeds 15% of the product of the current market price per
share (determined as provided in paragraph (f) of this Section) of the Common
Stock on the Distribution Record Date times the number of shares of Common Stock
outstanding on the Distribution Record Date (excluding shares held in the
treasury of the Company), the Conversion Price shall be reduced so that the same
shall equal the price determined by multiplying such Conversion Price in effect
immediately prior to the effectiveness of the Conversion Price reduction
contemplated by this paragraph (d) by a fraction of which the numerator shall be
the current market price per share (determined as provided in paragraph (f) of
this Section) of the Common Stock on the Distribution Record Date less the
amount of such cash and other consideration (including any Excess Payments) so
distributed applicable to one share (based on the pro rata portion of the
aggregate amount of such cash and other consideration (including any Excess
Payments), divided by the shares of Common Stock outstanding on the Distribution
Record Date) of Common Stock and the denominator shall be such current market
price per share (determined as provided in paragraph (f) of this Section) of the
Common
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Stock on the Distribution Record Date, such reduction to become effective
immediately prior to the opening of business on the day following the
Distribution Record Date.
(e) In case a tender offer or other negotiated transaction made by the
Company or any Subsidiary of the Company for all or any portion of the Common
Stock shall be consummated, if an Excess Payment is made in respect of such
tender offer or other negotiated transaction and the amount of such Excess
Payment, together with the sum of (x) the aggregate amount of all Excess
Payments plus (y) the aggregate amount of all distributions to all holders of
the Common Stock made in cash (specifically including distributions of cash out
of retained earnings), in each case made within the 12 months preceding the date
of payment of such current negotiated transaction consideration or expiration of
such current tender offer, as the case may be (the "Purchase Date"), and as to
which no adjustment pursuant to paragraph (c) or paragraph (d) of this Section
or this paragraph (e) has been made, exceeds 15% of the product of the current
market price per share (determined as provided in paragraph (f) of this Section)
of the Common Stock on the Purchase Date times the number of shares of Common
Stock outstanding (including any tendered shares but excluding any shares held
in the treasury of the Company) on the Purchase Date, the Conversion Price shall
be reduced so that the same shall equal the price determined by multiplying such
Conversion Price in effect immediately prior to the effectiveness of the
Conversion Price reduction contemplated by this paragraph (e) by a fraction of
which the numerator shall be the current market price per share (determined as
provided in paragraph (f) of this Section) of the Common Stock on the Purchase
Date less the amount of such Excess Payments and such cash distributions, if
any, applicable to one share (based on the pro rata portion of the aggregate
amount of such Excess Payments and such cash distributions, divided by the
shares of Common Stock outstanding on the Purchase Date) of Common Stock and the
denominator shall be such current market price per share (determined as provided
in paragraph (f) of this Section) of the Common Stock on the Purchase Date, such
reduction to become effective immediately prior to the opening of business on
the day following the Purchase Date.
(f) The current market price per share of Common Stock on any date
shall be deemed to be the average of the Daily Market Prices for the shorter of
(i) 30 consecutive Business Days ending on the last full trading day on the
exchange or market referred to in determining such Daily Market Prices prior to
the time of determination or (ii) the period commencing on the date next
succeeding the first public announcement of the issuance of such rights or such
warrants or such other distribution or such negotiated transaction through such
last full trading day on the exchange or market referred to in determining such
Daily Market Prices prior to the time of determination.
(g) In any case in which this Section 5.6 shall require that an
adjustment be made immediately following a record date for an event, the Company
may elect to defer, until such event, issuing to the holder of any Security
converted after such record date the shares of Common Stock
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and other Capital Stock of the Company issuable upon such conversion over and
above the shares of Common Stock and other Capital Stock of the Company issuable
upon such conversion only on the basis of the Conversion Price prior to
adjustment; and, in lieu of the shares the issuance of which is so deferred, the
Company shall issue or cause its transfer agents to issue due bills or other
appropriate evidence of the right to receive such shares.
SECTION 5.7 No Adjustment. No adjustment in the Conversion Price shall
be required until cumulative adjustments amount to 1% or more of the Conversion
Price as last adjusted; provided, however, that any adjustments which by reason
of this Section 5.7 are not required to be made shall be carried forward and
taken into account in any subsequent adjustment. All calculations under this
Article V shall be made to the nearest cent or to the nearest one hundredth of a
share, as the case may be. No adjustment need be made for rights to purchase
Common Stock pursuant to a Company plan for reinvestment of dividends or
interest. No adjustment need be made for a change in the par value or no par
value of the Common Stock.
SECTION 5.8 Other Adjustments.
(a) In the event that, as a result of an adjustment made pursuant to
Section 5.6 above, the holder of any Security thereafter surrendered for
conversion shall become entitled to receive any shares of Capital Stock of the
Company other than shares of its Common Stock, thereafter the Conversion Price
of such other shares so receivable upon conversion of any Securities shall be
subject to adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to Common Stock
contained in this Article V.
(b) In the event that shares of Common Stock are not delivered after
the expiration of any of the rights or warrants referred to in Section 5.6(b)
and Section 5.6(c) hereof, the Conversion Price shall be readjusted to the
Conversion Price which would otherwise be in effect had the adjustment 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.
SECTION 5.9 Adjustments for Tax Purposes. The Company may, at its
option, make such reductions in the Conversion Price, in addition to those
required by Section 5.6 above, as it determines to be advisable in order that
any stock dividend, subdivision of shares, distribution of rights to purchase
stock or securities or distribution of securities convertible into or
exchangeable for stock made by the Company to its stockholders will not be
taxable to the recipients thereof.
SECTION 5.10 Adjustments by the Company. The Company from time to time
may, to the extent permitted by law, reduce the Conversion Price by any amount
for any period of at least 20 days, in which case the Company shall give at
least 15 day's, notice of such reduction in accordance with Section 5.11, if the
Board of Directors has made a determination that such reduction would be in the
best interests of the Company, which determination shall be conclusive.
SECTION 5.11 Notice of Adjustment. Whenever the Conversion Price is
adjusted, the Company shall promptly mail to Noteholders at the addresses
appearing on the Registrar's books a
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notice of the adjustment and file with the Trustee an Officer's Certificate
briefly stating the facts requiring the adjustment and the manner of computing
it. The certificate shall be conclusive evidence of the correctness of such
adjustment.
SECTION 5.12 Notice of Certain Transactions. In the event that:
(1) the Company takes any action which would require an adjustment in
the Conversion Price;
(2) the Company takes any action that would require a supplemental
indenture pursuant to Section 5.13; or
(3) there is a dissolution or liquidation of the Company;
a holder of a Security may wish to convert such Security into shares of Common
Stock prior to the record date for or the effective date of the transaction so
that he may receive the rights, warrants, securities or assets which a holder of
shares of Common Stock on that date may receive. Therefore, the Company shall
mail to Noteholders at the addresses appearing on the Registrar's books and the
Trustee a notice stating the proposed record or effective date, as the case may
be. The Company shall mail the notice at least 15 days before such date;
however, failure to mail such notice or any defect therein shall not affect the
validity of any transaction referred to in clause (1), (2) or (3) of this
Section 5.12.
SECTION 5.13 Effect of Reclassifications, Consolidations, Mergers or
Sales on Conversion Privilege. If any of the following shall occur, namely: (i)
any reclassification or change of outstanding shares of Common Stock issuable
upon conversion of Securities (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 or merger to which the
Company is a party other than a merger in which the Company is the continuing
corporation and which does not result in any reclassification of, or change
(other than a change in name, or 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) in, outstanding shares of Common Stock or (iii) any sale or
conveyance of all or substantially all of the property or business of the
Company as an entirety, then the Company, or such successor or purchasing
corporation, as the case may be, shall, as a condition precedent to such
reclassification, change, consolidation, merger, sale or conveyance, execute
and deliver to the Trustee a supplemental indenture in form satisfactory to the
Trustee providing that the holder of each Security then outstanding shall have
the right to convert such Security into the kind and amount of shares of stock
and other securities and property (including cash) receivable upon such
reclassification, change, consolidation, merger, sale or conveyance by a holder
of the number of shares of Common Stock deliverable upon conversion of such
Security immediately prior to such reclassification, change, consolidation,
merger, sale or con veyance. Such supplemental indenture shall provide for
adjustments of the Conversion Price which shall be as nearly equivalent as may
be practicable to the adjustments of the Conversion Price provided for in this
Article V. The foregoing, however, shall not in any way affect the right a
holder of a Security may otherwise have, pursuant to clause (ii) of the last
sentence of subsection (c) of
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Section 5.6, to receive Rights upon conversion of a Security. If, in the case of
any such consolidation, merger, sale or conveyance, the stock or other
securities and property (including cash) receivable thereupon by a holder of
Common Stock includes shares of stock or other securities and property of a
corporation other than the successor or purchasing corporation, as the case may
be, in such consolidation, merger, sale or conveyance, then such supplemental
indenture shall also be executed by such other corporation and shall contain
such additional provisions to protect the interests of the holders of the
Securities as the Board of Directors of the Company shall reasonably consider
necessary by reason of the foregoing. The provision of this Section 5.13 shall
similarly apply to successive consolidations, mergers, sales or conveyances.
In the event the Company shall execute a supplemental indenture
pursuant to this Section 5.13, the Company shall promptly file with the Trustee
an Officer's Certificate briefly stating the reasons therefor, the kind or
amount of shares of stock or securities or property (including cash) receivable
by holders of the Securities upon the conversion of their Securities after any
such reclassification, change, consolidation, merger, sale or conveyance and
any adjustment to be made with respect thereto.
SECTION 5.14 Trustee's Disclaimer. The Trustee has no duty to determine
when an adjustment under this Article V should be made, how it should be made or
what such adjustment should be, but may accept as conclusive evidence of the
correctness of any such adjustment, and shall be protected in relying upon the
Officer's Certificate with respect thereto which the Company is obligated to
file with the Trustee pursuant to Section 5.11. The Trustee makes no
representation as to the validity or value of any securities or assets issued
upon conversion of Securities, and the Trustee shall not be responsible for the
Company's failure to comply with any provisions of this Article V.
The Trustee shall not be under any responsibility to determine the
correctness of any provisions contained in any supplemental indenture executed
pursuant to Section 5.13, but may accept as conclusive evidence of the
correctness thereof, and shall be protected in relying upon, the Officers'
Certificate with respect thereto which the Company is obligated to file with the
Trustee pursuant to Section 5.13.
ARTICLE VI
SUBORDINATION
SECTION 6.1 Agreement to Subordinate. The Company, for itself and its
successors, and each Noteholder, by his acceptance of Securities, agree that the
payment of the principal of or interest or Liquidated Damages on or any other
amounts due on the Securities is subordinated in right of payment, to the extent
and in the manner stated in this Article VI, to the prior payment in full of all
existing and future Senior Debt.
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SECTION 6.2 No Payment on Securities if Senior Debt in Default.
Anything in this Indenture to the contrary notwithstanding, no payment on
account of principal of or redemption or repurchase of, interest or Liquidated
Damages on or other amounts due on the Securities, including any payments on a
Designated Event Offer, and no redemption, purchase, or other acquisition of the
Securities (including, without limitation, upon a Designated Event), shall be
made by or on behalf of the Company (i) unless full payment of amounts then due
for principal and interest and of all other amounts then due on all Senior Debt
has been made or duly provided for pursuant to the terms of the instrument
governing such Senior Debt, (ii) if, at the time of such payment, redemption,
purchase or other acquisition, or immediately after giving effect thereto, there
shall exist under any Senior Debt, or any agreement pursuant to which any Senior
Debt is issued, any default, which default shall not have been cured or waived
and which default shall have resulted in the full amount of such Senior Debt
being declared due and payable or (iii) if, at the time of such payment,
redemption, purchase or other acquisition, the Trustee shall have received
written notice from a Representative of the holders of Designated Senior Debt (a
"Payment Blockage Notice") that there exists under such Designated Senior Debt,
or any agreement pursuant to which such Designated Senior Debt is issued, any
default, which default shall not have been cured or waived, permitting the
holders thereof to declare any amounts of such Designated Senior Debt due and
payable, but only for the period (the "Payment Blockage Period") commencing on
the date of receipt of the Payment Blockage Notice and ending (unless earlier
terminated by notice given to the Trustee by a Representative of the holders of
such Designated Senior Debt) on the earlier of (a) the date on which such event
of default shall have been cured or waived or (b) 180 days from the receipt of
the Payment Blockage Notice. Notwithstanding the provisions described in the
immediately preceding sentence (other than in clauses (i) and (ii)), unless the
holders of such Designated Senior Debt or the Representative of such holders
shall have accelerated the maturity of such Designated Senior Debt, the Company
may resume payments on the Securities after the end of such Payment Blockage
Period. Not more than one Payment Blockage Notice may be given in any
consecutive 360-day period irrespective of the number of defaults with respect
to Senior Debt during such period.
In the event that, notwithstanding the provisions of this Section 6.2,
payments are made by or on behalf of the Company in contravention of the
provisions of this Section 6.2, such payments shall be held by the Trustee, any
Paying Agent or the holders, as applicable, in trust for the benefit of, and
shall be paid over to and delivered to, the Representative of the holders of
Senior Debt or the trustee under the indenture or other agreement (if any),
pursuant to which any instruments evidencing any Senior Debt may have been
issued for application to the payment of all Senior Debt ratably according to
the aggregate amounts remaining unpaid to the extent necessary to pay all Senior
Debt in full in accordance with the terms of such Senior Debt, after giving
effect to any concurrent payment or distribution to or for the holders of Senior
Debt.
The Company shall give prompt written notice to the Trustee and any
Paying Agent of any default or event of default under any Senior Debt or under
any agreement pursuant to which any Senior Debt may have been issued. The
Trustee and the Paying Agent may assume that all payments have been made with
respect to all Senior Debt unless the Trustee or the Paying Agent, as the case
may be, has received written notice that payment has not been made and three (3)
Business Days have expired.
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SECTION 6.3 Distribution on Acceleration of Securities; Dissolution and
Reorganization; Subrogation of Securities.
(a) If the Securities are declared due and payable because of the
occurrence of an Event of Default, the Company shall give prompt written notice
to the holders of all Senior Debt or to the trustee(s) for such Senior Debt of
such acceleration. The Company may not pay the principal of, premium, if any, or
interest or Liquidated Damages on or any other amounts due on the Securities
until five days after such holders or trustee(s) of Senior Debt receive such
notice and, thereafter, the Company may pay the principal of or interest or
Liquidated Damages on or any other amounts due on the Securities only if the
provisions of this Article VI, permit such payment.
(b) Upon (i) any acceleration of the principal amount due on the
Securities because of an Event of Default or (ii) any distribution of assets of
the Company upon any dissolution, winding up, liquidation or reorganization of
the Company (whether in bankruptcy, insolvency or receivership proceedings or
upon an assignment for the benefit of creditors or any other. dissolution,
winding up, liquidation or reorganization of the Company):
(1) the holders of all Senior Debt shall first be entitled to
receive payment in full of the principal thereof, the interest thereon and any
other amounts due thereon before the holders are entitled to receive payment on
account of the principal of or interest on or any other amounts due on the
Securities;
(2) any payment or distribution of assets of the Company of
any kind or character, whether in cash, property or securities (other than
securities of the Company as reorganized or readjusted or securities of the
Company or any other corporation provided for by a plan of reorganization or
readjustment the payment of which is subordinate, at least to the extent
provided in this Article with respect to the Securities, to the payment in full)
without diminution or modification by such plan of all Senior Debt), to which
the holders or the Trustee would be entitled except for the provisions of this
Article, shall be paid by the liquidating trustee or agent or other person
making such a payment or distribution, directly to the holders of Senior Debt
(or their representatives(s) or trustee(s) acting on their behalf), ratably
according to the aggregate amounts remaining unpaid on account of the principal
of or interest on and other amounts due on the Senior Debt held or represented
by each, to the extent necessary to make payment in full of all Senior Debt
remaining unpaid, after giving effect to any concurrent payment or distribution
to the holders of such Senior Debt; and
(3) in the event that, notwithstanding the foregoing, any
payment or distribution of assets of the Company of any kind or character,
whether in cash, property or securities (other than securities of the Company as
reorganized or readjusted, or securities of the Company or any other corporation
provided for by a plan of reorganization or readjustment the payment of which is
subordinate, at least to the extent provided in this Article with respect to
the Securities, to the payment in full without diminution or modification by
such plan of Senior Debt), shall be received by the Trustee or the holders
before all Senior Debt is paid in full, such payment or distribution shall be
held in trust for the benefit of, and be paid over to upon request by a holder
of the Senior Debt, the holders of the Senior Debt remaining unpaid (or their
representatives) or trustee(s) acting on their behalf, ratably as
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aforesaid, for application to the payment of such Senior Debt until all such
Senior Debt shall have been paid in full, after giving effect to any concurrent
payment or distribution to the holders of such Senior Debt.
Subject to the payment in full of all Senior Debt, the holders shall be
subrogated to the rights of the holders of Senior Debt to receive payments or
distributions of cash, property or securities of the Company applicable to the
Senior Debt until the principal of, premium, if any, and interest and Liquidated
Damages, if any, on the Securities shall be paid in full and, for purposes of
such subrogation, no such payments or distributions to the holders of Senior
Debt of cash, property or securities which otherwise would have been payable or
distributable to holders shall, as between the Company, its creditors other than
the holders of Senior Debt, and the holders, be deemed to be a payment by the
Company to or on account of the Senior Debt, it being understood that the
provisions of this Article are and are intended solely for the purpose of
defining the relative rights of the holders, on the one hand, and the holders of
Senior Debt, on the other hand.
Nothing contained in this Article or elsewhere in this Indenture or in
the Securities is intended to or shall (i) impair, as between the Company and
its creditors other than the holders of Senior Debt, the obligation of the
Company, which is absolute and unconditional, to pay to the holders the
principal of, premium, if any, and interest and Liquidated Damages, if any, on
the Securities as and when the same shall become due and payable in accordance
with the terms of the Securities, (ii) affect the relative rights of the holders
and creditors of the Company other than holders of Senior Debt or, as between
the Company and the Trustee, the obligations of the Company to the Trustee, or
(iii) prevent the Trustee or the holders from exercising all remedies otherwise
permitted by applicable law upon default under this Indenture, subject to the
rights, if any, under this Article of the holders of Senior Debt in respect of
cash, property and securities of the Company received upon the exercise of any
such remedy.
Upon distribution of assets of the Company referred to in this Article,
the Trustee, subject to the provisions of Section 9.1 hereof, and the holders
shall be entitled to rely upon a certificate of the liquidating trustee or agent
or other person making any distribution to the Trustee or to the holders for the
purpose of ascertaining the persons entitled to participate in such
distribution, the holders of the Senior Debt and other indebtedness of the
Company, the amount thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to this Article.
The Trustee, however, shall not be deemed to owe any fiduciary duty to the
holders of Senior Debt. Nothing contained in this Article or elsewhere in this
Indenture, or in any of the Securities, shall prevent the good faith application
by the Trustee of any moneys which shall have been deposited with it hereunder,
prior to its receipt of written notice of facts which would prohibit such
application, for the purpose of the payment of or on account of the principal
of, premium, if any, or interest or Liquidated Damages on, the Securities
unless, prior to the date on which such application is made by the Trustee, the
Trustee shall be charged with actual notice under Section 6.3(d) hereof of the
facts which would prohibit the making of such application.
(c) The provisions of this Article shall not be applicable to any cash,
properties or securities received by the Trustee or by any holder that are
received as a holder of Senior Debt and
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nothing in Section 9.11 hereof or elsewhere in this indenture shall deprive the
Trustee or such holder of any of its rights as such holder.
(d) The Company shall give prompt written notice to the Trustee of any
fact known to the Company which would prohibit the making of any payment of
money to or by the Trustee in respect of the Securities pursuant to the
provisions of this Article. The Trustee, subject to the provisions of Section
9.1 hereof, shall be entitled to assume that no such fact exists unless the
Company or any holder of Senior Debt or any trustee therefor has given written
notice thereof to the Trustee. Notwithstanding the provisions of this Article or
any other provisions of this indenture, the Trustee shall not be charged with
knowledge of the existence of any fact which would prohibit the making of any
payment of moneys to or by the Trustee in respect of the Securities pursuant to
the provisions in this Article, unless and until three Business Days after the
Trustee shall have received written notice thereof from the Company or any
holder or holders of Senior Debt or from any trustee therefor; and, prior to the
receipt of any such written notice, the Trustee, subject to the provisions of
Section 9.1 hereof, shall be entitled in all respects conclusively to assume
that no such facts exist; provided that if on a date not less than three
Business Days immediately preceding the date upon which, by the terms hereof,
any such moneys may become payable for any purpose (including, without
limitation, the principal of or interest on any Security), the Trustee shall not
have received with respect to such moneys the notice provided for in this
Section 6.3(d), then anything herein contained to the contrary notwithstanding,
the Trustee shall have full power and authority to receive such moneys and to
apply the same to the purpose for which they were received, and shall not be
affected by any notice to the contrary which may be received by it on or after
such prior date.
The Trustee shall be entitled to conclusively rely on the delivery to
it of a written notice by a person representing himself to be a holder of Senior
Debt (or a trustee on behalf of such holder) to establish that such notice has
been given by a holder of Senior Debt (or a trustee on behalf of any such holder
or holders). In the event that the Trustee determines in good faith that further
evidence is required with respect to the right of any person as a holder of
Senior Debt to participate in any payment or distribution pursuant to this
Article, the Trustee may request such person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of Senior Debt held by
such person, the extent to which such person is entitled to participate in such
payment or distribution and any other facts pertinent to the rights of such
person under this Article, and, if such evidence is not furnished, the Trustee
may defer any payment to such person pending judicial determination as to the
right of such person to receive such payment; nor shall the Trustee be charged
with knowledge of the curing or waiving of any default of the character
specified in Section 6.2 hereof or that any event or any condition preventing
any payment in respect of the Securities shall have ceased to exist, unless and
until the Trustee shall have received written notice to such effect.
(e) The provisions of this Section 6.3 applicable to the Trustee shall
(unless the context requires otherwise) also apply to any Paying Agent for the
Company.
SECTION 6.4 Reliance by Senior Debt on Subordination Provisions. Each
holder of any Security by his acceptance thereof acknowledges and agrees that
the foregoing subordination provisions are, and are intended to be, an
inducement and a consideration for each holder of any Senior
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Debt, whether such Senior Debt was created or acquired before or after the
issuance of the Securities, to acquire and continue to hold, or to continue to
hold, such Senior Debt, and such holder of Senior Debt shall be deemed
conclusively to have relied on such subordination provisions in acquiring and
continuing to hold, or in continuing to hold, such Senior Debt. Notice of any
default in the payment of any Senior Debt, except as expressly stated in this
Article, and notice of acceptance of the provisions hereof are hereby expressly
waived. Except as otherwise expressly provided herein, no waiver, forbearance or
release by any holder of Senior Debt under such Senior Debt or under this
Article shall constitute a release of any of the obligations or liabilities of
the Trustee or holders of the Securities provided in this Article.
SECTION 6.5 No Waiver of Subordination Provisions. Except as otherwise
expressly provided herein, no right of any present or future holder of any
Senior Debt to enforce subordination as herein provided shall at any time in any
way be prejudiced or impaired by any act or failure to act on the part of the
Company or by any act or failure to act, in good faith, by any such holder, or
by any noncompliance by the Company with the terms, provisions and covenants of
this Indenture, regardless of any knowledge thereof any such holder may have or
be otherwise charged with.
Without in any way limiting the generality of the foregoing paragraph,
the holders of Senior Debt may, at any time and from time to time, without the
consent of, or notice to, the Trustee or the holders of the Securities, without
incurring responsibility to the holders of the Securities and without impairing
or releasing the subordination provided in this Article VI or the obligations
hereunder of the holders of the Securities to the holders of Senior Debt, do any
one or more of the following: (i) change the manner, place or terms of payment
of, or renew or alter, Senior Debt, or otherwise amend or supplement in any
manner Senior Debt or any instrument evidencing the same or any agreement under
which Senior Debt, is outstanding; (ii) sell, exchange, release or otherwise
dispose of any property pledged, mortgaged or otherwise securing Senior Debt;
(iii) release any person liable in any manner for the collection of Senior Debt;
and (iv) exercise or refrain from exercising any rights against the Company or
any other person.
SECTION 6.6 Trustee's Relation to Senior Debt. The Trustee in its
individual capacity shall be entitled to all the rights set forth in this
Article in respect of any Senior Debt at any time held by it, to the same extent
as any holder of Senior Debt, and nothing in Section 9.11 hereof or elsewhere in
this Indenture shall deprive the Trustee of any of its rights as such holder.
With respect to the holders of Senior Debt, the Trustee undertakes to
perform or to observe only such of its covenants and obligations, as are
specifically set forth in this Article, and no implied covenants or obligations
with respect to the holders of Senior Debt shall be read into this Indenture
against the Trustee. The Trustee shall not owe any fiduciary duty to the holders
of Senior Debt but shall have only such obligations to such holders as are
expressly set forth in this Article.
Each holder of a Security by his acceptance thereof authorizes and
directs the Trustee on his behalf to take such action as may be necessary or
appropriate to effectuate the subordination provided in this Article and
appoints the Trustee his attorney-in-fact for any and all such purposes,
including, in the event of any dissolution, winding up or liquidation or
reorganization under any applicable bankruptcy
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law of the Company (whether in bankruptcy, insolvency or receivership
proceedings or otherwise), the timely filing of a claim for the unpaid balance
of such holder's Securities in the form required in such proceedings and the
causing of such claim to be approved. If the Trustee does not file a claim or
proof of debt in the form required in such proceedings prior to 30 days before
the expiration of the time to file such claims or proofs, then any holder or
holders of Senior Debt or their representative or representatives shall have the
right to demand, sue for, collect, receive and receipt for the payments and
distributions in respect of the Securities which are required to be paid or
delivered to the holders of Senior Debt as provided in this Article and to file
and prove all claims therefor and to take all such other action in the name of
the holders or otherwise, as such holders of Senior Debt or representative
thereof may determine to be necessary or appropriate for the enforcement of the
provisions of this Article.
SECTION 6.7 Other Provisions Subject Hereto. Except as expressly stated
in this Article, notwithstanding anything contained in this Indenture to the
contrary, all the provisions of this Indenture and the Securities are subject to
the provisions of this Article. However, nothing in this Article shall apply to
or adversely affect the claims of, or payment to, the Trustee pursuant to
Section 9.7. Notwithstanding the foregoing, the failure to make a payment on
account of principal of or interest on the Securities by reason of any provision
of this Article VI shall not be construed as preventing the occurrence of an
Event of Default under Section 8.1.
ARTICLE VII
SUCCESSORS
SECTION 7.1 Merger, Consolidation or Sale of Assets. The Company may
not consolidate or merge with or into any person (whether or not the Company is
the surviving corporation), or sell, assign, transfer, lease, convey or
otherwise dispose of all or substantially all of its properties or assets
unless:
(a) the Company is the surviving corporation or the entity or the
person formed by or surviving any such consolidation or merger (if other than
the Company) or to which such sale, assignment, transfer, lease, conveyance or
other disposition shall have been made is a corporation organized or existing
under the laws of the United States, any state thereof or the District of
Columbia;
(b) the entity or person formed by or surviving any such consolidation
or merger (if other than the Company) assumes all the Obligations of the
Company, pursuant to a supplemental indenture in a form reasonably satisfactory
to the Trustee, under the Securities and the Indenture;
(c) such sale, assignment, transfer, lease, conveyance or other
disposition of all or substantially all of the Company's properties or assets
shall be as an entirety or virtually as an entirety to one person and such
person shall have assumed all the Obligations of the Company, pursuant to a
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supplemental indenture in a form reasonably satisfactory to the Trustee, under
the Securities and the Indenture;
(d) immediately after such transaction no Default or Event of Default
exists; and
(e) the Company or such person shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that such
transaction and the supplemental indenture comply with the Indenture and that
all conditions precedent in the Indenture relating to such transaction have been
satisfied.
SECTION 7.2 Successor Corporation Substituted. Upon any consolidation
or merger, or any sale, assignment, transfer, lease, conveyance or other
disposition of all or substantially all of the assets of the Company in
accordance with Section 7.1 hereof, the successor corporation formed by such
consolidation or into or with which the Company is merged or to which such sale,
assignment, transfer, lease, conveyance or other disposition is made shall
succeed to, and be substituted for and may exercise every right and power of,
the Company under this indenture with the same effect as if such successor
person has been named as the Company herein; provided, however, that the
predecessor Company in the case of a sale, assignment, transfer, lease,
conveyance or other disposition shall not be released from the obligation to pay
the principal of and interest on the Securities.
ARTICLE VIII
DEFAULTS AND REMEDIES
SECTION 8.1 Events of Default. An "Event of Default" occurs if:
(a) the Company defaults in the payment of interest on any Security
when the same becomes due and payable, whether or not such payments shall be
prohibited by Article VI, and the Default continues for a period of 30 days
after the date due and payable;
(b) the Company defaults in the payment of the principal of any
Security when the same becomes due and payable at maturity, upon redemption or
otherwise, whether or not such payment shall be prohibited by Article VI;
(c) the Company defaults in the payment of the Designated Event Payment
when the same becomes due and payable, whether or not such payment may be
prohibited by Article VI;
(d) the Company fails to provide notice of any Designated Event in
accordance with Section 4.7;
(e) the Company fails to observe or perform any other covenant or
agreement contained in this Indenture or the Securities, required by it to be
performed and the Default continues for a
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period of 60 days after the receipt of written notice from the Trustee to the
Company or from the holders of 25% in aggregate principal amount of the then
outstanding Securities to the Company and the Trustee stating that such notice
is a "Notice of Default";
(f) there is a default under any mortgage, indenture or instrument
under which there may be issued or by which there may be secured or evidenced
any Indebtedness for money borrowed by the Company or any Subsidiary of the
Company (or the payment of which is guaranteed by the Company or any Subsidiary
of the Company), whether such Indebtedness or guarantee now exists or is created
after the Issuance Date, which default (i) is caused by a failure to pay when
due principal of or interest on such Indebtedness within the grace period
provided for in such Indebtedness (which failure continues beyond the longer of
any applicable grace period and 30 days) (a "Payment Default") or (ii) results
in the acceleration of such Indebtedness prior to its express maturity and, in
each case, the principal amount of any such Indebtedness, together with the
principal amount of any other such Indebtedness under which there is a Payment
Default or the maturity of which has been so accelerated, aggregates $10 million
or more;
(g) a final, non-appealable judgment or final, non-appealable judgments
(other than any judgment as to which a reputable insurance company has accepted
full liability) for the payment of money are entered by a court or courts of
competent jurisdiction against the Company or any Subsidiary of the Company and
remain undischarged for a period (during which execution shall not be
effectively stayed) of 60 days, provided that the aggregate of all such
judgments exceeds $10 million;
(h) the Company or any Material Subsidiary pursuant to or within the
meaning of any Bankruptcy Law: (i) commences a voluntary case, (ii) consents to
the entry of an order for relief against it in an involuntary case in which it
is the debtor, (iii) consents to the appointment of a Bankruptcy Custodian of it
or for all or substantially all of its property, (iv) makes a general assignment
for the benefit of its creditors, or (v) makes the admission in writing that it
generally is unable to pay its debts as the same become due; or
(i) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that: (i) is for relief against the Company or any Material
Subsidiary of the Company in an involuntary case, (ii) appoints a Bankruptcy
Custodian of the Company or any Material Subsidiary of the Company or for all or
substantially all of its property, and the order or decree remains unstayed and
in effect for 60 days, or (iii) orders the liquidation of the Company or any
Material Subsidiary of the Company, and the order or decree remains unstayed and
in effect for 60 days.
The term "Bankruptcy Law" means Title 11, U.S. Code or any similar
Federal or state law for the relief of debtors. The term "Bankruptcy Custodian"
means any receiver, trustee, assignee, liquidator or similar official under any
Bankruptcy Law.
SECTION 8.2 Acceleration. If an Event of Default (other than an Event
of Default specified in clauses (h) and (i) of Section 8.1 hereof) occurs and is
continuing, the Trustee by notice to the Company, or the Noteholders of at least
25% in principal amount of the then outstanding Securities by notice to the
Company and the Trustee, may declare all the Securities to be due and
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payable. Upon such declaration, the principal of, premium, if any, and accrued
and unpaid interest on the Securities shall be due and payable immediately. If
an Event of Default specified in clause (h) or (i) of Section 8.1 hereof occurs,
such an amount shall ipso facto become and be immediately due and payable
without any declaration or other act on the part of the Trustee or any
Noteholder. The Noteholders of a majority in aggregate principal amount of the
then outstanding Securities by notice to the Trustee may rescind an acceleration
and its consequences if the rescission would not conflict with any judgment or
decree and if all existing Events of Default have been cured or waived except
nonpayment of principal or interest that has become due solely because of the
acceleration.
SECTION 8.3 Other Remedies. If an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy to collect the payment
of principal or interest then due and payable on the Securities or to enforce
the performance of any provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Securities or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Noteholder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies are
cumulative to the extent permitted by law.
SECTION 8.4 Waiver of Past Defaults. The Noteholders of a majority in
aggregate principal amount of the then outstanding Securities by notice to the
Trustee may waive an existing Default or Event of Default and its consequences
except a continuing Default or Event of Default in the payment of the Designated
Event Payment or the principal of, or interest on, any Security. When a Default
or Event of Default is waived, it is cured and ceases; but no such waiver shall
extend to any subsequent or other Default or impair any right consequent
thereon.
SECTION 8.5 Control by Majority. The Noteholders of a majority in
principal amount of the then outstanding Securities may direct the time, method
and place of conducting any proceeding for any remedy available to the Trustee
or exercising any trust or power conferred on it. However, the Trustee may
refuse to follow any direction that conflicts with law or this Indenture, is
unduly prejudicial to the rights of other Noteholders, or would involve the
Trustee in personal liability.
SECTION 8.6 Limitation on Suits. A Noteholder may pursue a remedy with
respect to this Indenture or the Securities only if:
(a) the Noteholder gives to the Trustee notice of a continuing Event of
Default;
(b) the Noteholders of at least 25% in principal amount of the then
outstanding Securities make a request to the Trustee to pursue the remedy;
(c) such Noteholder or Noteholders offer to the Trustee indemnity
satisfactory to the Trustee against any loss, liability or expense;
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(d) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer of indemnity; and
(e) during such 60-day period the Noteholders of a majority in
principal amount of the then outstanding Securities do not give the Trustee a
direction inconsistent with the request.
A Noteholder may not use this Indenture to prejudice the rights of
another Noteholder or to obtain a preference or priority over another
Noteholder.
SECTION 8.7 Rights of Noteholders to Receive Payment. Notwithstanding
any other provision of this Indenture, the right of any Noteholder of a Security
to receive payment of principal and interest on the Security, on or after the
respective due dates expressed in the Security, or to bring suit for the
enforcement of any such payment on or after such respective dates, shall not be
impaired or affected without the consent of the Noteholder made pursuant to this
Section.
SECTION 8.8 Collection Suit by Trustee. If an Event of Default
specified in Section 8.1(a) or (b) occurs and is continuing, the Trustee may
recover judgment in its own name and as trustee of an express trust against the
Company for the whole amount of principal and interest remaining unpaid on the
Securities and interest on overdue principal and interest and such further
amount as shall be sufficient to cover the costs and, to the extent lawful,
expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.
SECTION 8.9 Trustee May File Proofs of Claim. The Trustee may file such
proofs of claim and other papers or documents as may be necessary or advisable
in order to have the claims of the Trustee and the Noteholders allowed in any
judicial proceedings relative to the Company, its creditors or its property.
Nothing contained herein shall be deemed to authorize the Trustee to authorize
or consent to or accept or adopt on behalf of any Noteholder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Noteholder thereof, or to authorize the Trustee to vote in
respect of the claim of any Noteholder in any such proceeding.
SECTION 8.10 Priorities. If the Trustee collects any money pursuant to
this Article, it shall pay out the money in the following order:
First: to the Trustee for amounts due under Section 9.7 hereof;
Second: to the holders of Senior Debt to the extent required by Article
VI;
Third: to Noteholders for amounts due and unpaid on the Securities for
principal and interest, ratably, without preference or priority of any kind,
according to the amounts due and payable on the Securities for principal and
interest, respectively; and
Fourth: to the Company.
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Except as otherwise provided in Section 2.12 hereof, the Trustee may
fix a record date and payment date for any payment to Noteholders made pursuant
to this Section.
SECTION 8.11 Undertaking for Costs. In any suit for the enforcement of
any right or remedy under this Indenture or in any suit against the Trustee for
any action taken or omitted by it as a Trustee, a court in its discretion may
require the filing by any party litigant in the suit of an undertaking to pay
the costs of the suit, and the court in its discretion may assess reasonable
costs, including reasonable attorneys' fees, against any party litigant in the
suit, having due regard to the merits and good faith of the claims or defenses
made by the party litigant. This Section does not apply to a suit by the
Trustee, a suit by a holder pursuant to Section 8.7 hereof, or a suit by
Noteholders of more than 10% in principal amount of the then outstanding
Securities.
ARTICLE IX
TRUSTEE
SECTION 9.1 Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise such of the rights and powers vested in it by this Indenture, and
use the same degree of care and skill in their exercise, as a prudent man would
exercise or use under the circumstances in the conduct of his own affairs.
(b) Except during the continuance of an Event of Default: (i) the
Trustee need perform only those duties that are specifically set forth in this
Indenture and no others and (ii) in the absence of bad faith on its part, the
Trustee may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed. therein, upon certificates or opinions
furnished to the Trustee and conforming to the requirements of this Indenture.
However, the Trustee shall examine the certificates and opinions to determine
whether or not they conform to the requirements of this Indenture.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act, or its own wilful
misconduct, except that (i) this paragraph does not limit the effect of
paragraph (b) of this Section 9.1; (ii) the Trustee shall not be liable for any
error of judgment made in good faith by a Trust Officer, unless it is proved
that the Trustee was negligent in ascertaining the pertinent facts and (iii) the
Trustee shall not be liable with respect to any action it takes or omits to take
in good faith in accordance with a direction received by it pursuant to Section
8.5 hereof.
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b) and (c) of this Section 9.1. No
provision of this Indenture shall require the Trustee to expend or risk its own
funds or otherwise incur any financial liability in the performance of any of
its duties hereunder, or in the exercise of any of its rights or powers, if it
shall have reasonable
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grounds for believing that repayment of such funds or adequate indemnity against
such risk or liability is not reasonably assured to it.
(e) The Trustee may refuse to perform any duty or exercise any right or
power unless it receives indemnity satisfactory to it against any loss,
liability or expense.
(f) The Trustee shall not be liable for interest on any money received
by it except as the Trustee may agree in writing with the Company. Money held in
trust by the Trustee need not be segregated from other funds except to the
extent required by law.
SECTION 9.2 Rights of Trustee.
(a) The Trustee may rely on any document reasonably believed by it to
be genuine and to have been signed or presented by the proper person. The
Trustee need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it (unless other
evidence be herein specifically prescribed) may require an Officer's Certificate
or an Opinion of Counsel, or both. The Trustee shall not be liable for any
action it takes or omits to take in good faith in reliance on such Officers'
Certificate or Opinion of Counsel.
(c) The Trustee may act through agents and nominees and shall not be
responsible for the misconduct or negligence of any agent appointed with due
care.
(d) The Trustee shall not be liable for any action that it takes or
omits to take in good faith, without negligence or wilful misconduct, and that
it reasonably believes to be authorized or within its rights or powers.
(e) The Trustee shall not be charged with knowledge of any Event of
Default under subsection (c), (d), (e), (f), (g), (h) or (i) of Section 8.1 or
of the identity of any material Subsidiary unless either (1) a Trust Officer
assigned to its Institutional Trust Administration shall have actual knowledge
thereof, or (2) the Trustee shall have received notice thereof in accordance
with Section 12.2 hereof from the Company or any holder.
SECTION 9.3 Individual Rights of Trustee. The Trustee in its individual
or any other capacity may become the owner or pledgee of Securities and may
otherwise deal with the Company or an Affiliate with the same rights it would
have if it were not Trustee. Any Agent may do the same with like rights.
However, the Trustee is subject to Sections 9.10 and 9.11 hereof.
SECTION 9.4 Trustee's Disclaimer. The Trustee makes no representation
as to the validity or adequacy of this Indenture or the Securities, it shall not
be accountable for the Company's use of the proceeds from any Securities
authenticated and delivered by the Trustee in conformity with the provisions of
this Indenture, and it shall not be responsible for any statement of the Company
in the Indenture or any statement in the Securities other than its
authentication.
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SECTION 9.5 Notice of Defaults. If a Default or Event of Default occurs
and is continuing and if it is actually known to the Trustee, the Trustee shall
mail to Noteholders a notice of the Default or Event of Default within 90 days
after it occurs. Except in the case of a Default or Event of Default in payment
on any Security, the Trustee may withhold the notice if and so long as a
committee of its Trust Officers in good faith determines that withholding the
notice is in the interests of Noteholders.
SECTION 9.6 Reports by Trustee to Noteholders. Within 60 days after the
reporting date stated in Section 12.10, the Trustee shall mail to Noteholders a
brief report dated as of such reporting date that complies with TIA Section
313(a) if and to the extent required by such Section 313(a). The Trustee also
shall comply with TIA Section 313(b)(2). The Trustee shall also transmit by mail
all reports as required by TIA Section 313(c).
A copy of each report at the time of its mailing to Noteholders shall
be filed with the SEC and each stock exchange on which the Securities are
listed. The Company shall notify the Trustee when the Securities are listed on
any stock exchange.
SECTION 9.7 Compensation and Indemnity. The Company shall pay to the
Trustee from time to time reasonable compensation for its services hereunder.
The Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Company shall reimburse the Trustee upon
request for all reasonable and duly documented disbursements, expenses and
advances incurred or made by it. Such disbursements and expenses may include the
reasonable and duly documented disbursements, compensation and expenses of the
Trustee's agents and counsel.
The Company shall indemnify the Trustee and its officers, directors,
employees and all other agents against any loss or liability incurred by it
except as set forth in the next paragraph. The Trustee shall notify the Company
promptly of any claim for which it may seek indemnity. The Company shall defend
the claim and the Trustee shall cooperate in the defense. The Trustee may have
separate counsel and the Company shall pay the reasonable and duly documented
fees, disbursements and expenses of such counsel. The Company need not pay for
any settlement made without its consent, which consent shall not be unreasonably
withheld.
The Company need not reimburse any expense or indemnify against any
loss or liability incurred by the Trustee through negligence, bad faith or
wilful misconduct.
To secure the Company's payment obligations in this Section, the
Trustee shall have a lien prior to the Securities on all money or property held
or collected by the Trustee, except money or property held in trust to pay
principal and interest on particular Securities.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 8.1(h) or (i) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.
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The provisions of this Section 9.7 shall survive the termination of
this Indenture, as provided by Section 10.1 hereof.
SECTION 9.8 Replacement of Trustee. A resignation or removal of the
Trustee and appointment of a successor Trustee shall become effective only upon
the successor Trustee's acceptance of appointment as provided in this Section.
The Trustee may resign by so notifying the Company. The Noteholders of
a majority in principal amount of the then outstanding Securities may remove the
Trustee by so notifying the Trustee and the Company. The Company may remove the
Trustee if:
(a) the Trustee fails to comply with Section 9.10 hereof, unless the
Trustee's duty to resign is stayed as provided in TIA Section 310(b);
(b) the Trustee is adjudged a bankrupt or an insolvent or an order for
relief is entered with respect to the Trustee under any Bankruptcy Law;
(c) a Bankruptcy Custodian or public officer takes charge of the
Trustee or its property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the
Noteholders of a majority in principal amount of the then outstanding Securities
may appoint a successor Trustee to replace the successor Trustee appointed by
the Company.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Noteholders of at least 10% in principal amount of the then outstanding
Securities may petition any court of competent jurisdiction for the appointment
of a successor Trustee.
If the Trustee fails to comply with Section 9.10 hereof, unless the
Trustee's duty to resign is stayed as provided in TIA Section 310(b), any
Noteholder who has been a bona fide holder of a Security for at least six months
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, the
Company shall promptly pay all amounts due and payable to the retiring Trustee
pursuant to Section 9.7 hereof and the successor Trustee shall have all the
rights, powers and duties of the Trustee under this Indenture. The successor
Trustee shall mail a notice of its succession to Noteholders. The retiring
Trustee shall promptly transfer all property held by it as Trustee to the
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successor Trustee, subject to the lien provided for in Section 9.7 hereof.
Notwithstanding replace ment of the Trustee pursuant to this Section 9.8, the
Company's obligations under Section 9.7 hereof shall continue for the benefit of
the retiring Trustee with respect to expenses and liabilities incurred by it
prior to such replacement.
SECTION 9.9 Successor Trustee by Merger, Etc. If the Trustee
consolidates, merges or converts into, or transfers all or substantially all of
its corporate trust business to, another corporation, the successor corporation
without any further act shall be the successor Trustee.
SECTION 9.10 Eligibility; Disqualification.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA Section 310(a)(1) and (5). The Trustee, or if the Trustee is
a member of a bank holding company system, its bank holding company shall always
have a combined capital and surplus as stated in Section 12.10 hereof.
The Trustee is subject to TIA Section 310(b).
SECTION 9.11 Preferential Collection of Claims Against Company. The
Trustee is subject to TIA Section 311(a), excluding any creditor relationship
listed in TIA Section 311(b). A Trustee who has resigned or been removed shall
be subject to TIA Section 311(a) to the extent indicated therein.
SECTION 9.12 Sections Applicable to Registrar, Paying Agent and
Conversion Agent. The term "Trustee" as used in Sections 6.3, 9.1, 9.2, 9.3, 9.4
and 9.7 hereof shall (unless the context requires otherwise) be construed as
extending to and including the Trustee acting in its capacity, if any, as
Registrar, Paying Agent and Conversion Agent.
ARTICLE X
DISCHARGE OF INDENTURE
SECTION 10.1 Termination of Company's Obligations. This Indenture shall
cease to be of further effect (except that the Company's obligations under
Sections 9.7 and 10.2 hereof shall survive) when all outstanding Securities
theretofore authenticated and issued have been delivered to the Trustee for
cancellation and the Company has paid all sums payable hereunder.
Thereupon, the Trustee upon request of the Company, shall acknowledge
in writing the discharge of the Company's obligations under this Indenture,
except for those surviving obligations specified above.
SECTION 10.2 Repayment to Company. The Trustee and the Paying Agent
shall promptly pay to the Company upon request any excess money or securities
held by them at any time.
The Trustee and the Paying Agent shall pay to the Company upon request
any money held by them for the payment of principal, premium, if any, or
interest or Liquidated Damages, if any, that
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remains unclaimed for the period ending on the earlier of 10 Business Days prior
to the date such funds would escheat to the State or two years after the date
upon which such payment shall have become due; provided, however, that the
Company, or the Trustee at the request of the Company, shall have first caused
notice of such payment to the Company to be mailed to each Noteholder entitled
thereto no less than 30 days prior to such payment. After payment to the
Company, the Trustee and the Paying Agent shall have no further liability with
respect to such money and Noteholders entitled to the money must look to the
Company for payment as general creditors unless any applicable abandoned
property law designates another person.
ARTICLE XI
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 11.1 Without Consent of Noteholders. The Company and the
Trustee may amend or supplement this Indenture or the Securities without the
consent of any Noteholder:
(a) to cure any ambiguity, defect or inconsistency;
(b) to comply with Sections 5.13 and 7.1 hereof;
(c) to provide for uncertificated Securities in addition to
certificated Securities;
(d) to make any change that does not adversely affect the legal rights
hereunder of any Noteholder;
(e) to qualify this Indenture under the TIA or to comply with the
requirements of the SEC in order to maintain the qualification of the Indenture
under the TIA; or
(f) to make any change that provides any additional rights or benefits
to the holders of Securities.
An amendment under this Section may not make any change that adversely
affects the rights under Article VI of any holder of Senior Debt then
outstanding unless the holders of such Senior Debt (or any group or
representative thereof authorized to give a consent) consent to such change.
SECTION 11.2 With Consent of Noteholders. Subject to Section 8.7
hereof, the Company and the Trustee may amend or supplement this Indenture or
the Securities with the written consent (including consents obtained in
connection with any tender offer or exchange offer for Securities) of the
Noteholders of at least a majority in principal amount of the then outstanding
Securities. Subject to Sections 8.4 and 8.7 hereof, the Noteholders of a
majority in principal amount of the Securities then outstanding may also by
their written consent (including consents obtained in connection with any tender
offer or exchange offer for Securities) waive any existing Default as provided
in Section 8.4 or waive compliance in a particular instance by the Company with
any provision of this
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Indenture or the Securities. However, without the consent of each Noteholder
affected, an amendment, supplement or waiver under this Section may not (with
respect to any Securities held by a nonconsenting Noteholder):
(a) reduce the amount of Securities whose Noteholders must consent to
an amendment, supplement or waiver;
(b) reduce the rate of or change the time for payment of interest on
any Security;
(c) reduce the principal of or change the fixed maturity of any
Security or alter the redemption provisions with respect thereto;
(d) make any Security payable in money other than that stated in the
Security;
(e) make any change in Section 8.4, 8.7 or 11.2 hereof (this sentence);
(f) waive a default in the payment of the Designated Event Payment or
the principal of, or interest on, any Security (other than as provided in
Section 8.4);
(g) waive a redemption payment payable on any Security;
(h) make any change that adversely affects the right of Noteholders to
convert Securities into Common Stock of the Company; or
(i) make any change in Articles V or VI hereof that adversely affects
the interests of the Noteholders.
To secure a consent of the Noteholders under this Section 11.2, it
shall not be necessary for the Noteholders to approve the particular form of any
proposed amendment supplement or waiver, but it shall be sufficient if such
consent approves the substance thereof.
An amendment under this Section may not make any change that adversely
affects the rights under Article VI of any holder of Senior Debt then
outstanding unless the holders of such Senior Debt (or any group or
representative thereof authorized to give a consent) consent to such change.
Neither the Company nor any of its Subsidiaries shall, directly or
indirectly, pay or cause to be paid any consideration, whether by way of
interest, fee or otherwise, to any holder of Securities or as an inducement to
any consent, waiver or amendment of any of the terms or provisions of this
Indenture or the Securities unless such consideration is offered to be paid or
agreed to be paid to all holders of the Securities that consent, waive or agree
to amend in the time frame set forth in the solicitation documents relating to
such consent, waiver or agreement.
After an amendment, supplement or waiver under this Section becomes
effective, the Company shall mail to Noteholders a notice briefly describing the
amendment or waiver.
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SECTION 11.3 Compliance with Trust Indenture Act. Every amendment to
this Indenture or the Securities shall be set forth in a supplemental indenture
that complies with the TIA as then in effect.
SECTION 11.4 Revocation and Effect of Consents. Until an amendment,
supplement or waiver becomes effective, a consent to it by a Noteholder of a
Security is a continuing consent by the Noteholder and every subsequent
Noteholder of a Security or portion of a Security that evidences the same debt
as the consenting Noteholder's Security, even if notation of the consent is not
made on any Security. However, any such Noteholder or subsequent Noteholder may
revoke the consent as to such Noteholder's Security or portion of a Security if
the Trustee receives the notice of revocation before the date on which the
Trustee receives an Officers' Certificate certifying that the Noteholders of the
requisite principal amount of Securities have consented to the amendment,
supplement or waiver.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Noteholders entitled to consent to any amendment,
supplement or waiver. If a record date is fixed, then notwithstanding the
provisions of the immediately preceding paragraph, those persons who were
Noteholders at such record date (or their duly designated proxies), and only
those persons, shall be entitled to consent to such amendment, supplement or
waiver or to revoke any consent previously given, whether or not such persons
continue to be Noteholders after such record date. No consent shall be valid or
effective for more than 90 days after such record date unless consents from
Noteholders of the principal amount of Securities required hereunder or such
amendment or waiver to be effective shall have also been given and not revoked
within such 90-day period.
After an amendment, supplement or waiver becomes effective it shall
bind every Noteholder, unless it is of the type described in any of clauses (a)
through (i) of Section 11.2 hereof. In such case, the amendment or waiver shall
bind each Noteholder who has consented to it and every subsequent Noteholder of
a Security or portion of a Security that evidences the same debt as the
consenting Noteholder's Security.
SECTION 11.5 Notation on or Exchange of Securities. The Trustee may
place an appropriate notation about an amendment or waiver on any Security
thereafter authenticated. The Company in exchange for all Securities may issue
and the Trustee shall authenticate new Securities that reflect the amendment or
waiver.
SECTION 11.6 Trustee Protected. The Trustee shall sign all supplemental
indentures, except that the Trustee may, but need not, sign any supplemental
indenture that adversely affects its rights.
ARTICLE XII
MISCELLANEOUS
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SECTION 12.1 Trust Indenture Act Controls. If any provision of this
Indenture limits, qualifies, or conflicts with another provision which is
automatically deemed to be incorporated in this Indenture by the TIA, the
incorporated provision shall control.
SECTION 12.2 Notices. Any notice or communication by the Company or the
Trustee to the other is duly given if in writing and delivered in person or
mailed by first class mail or nationally recognized courier to the other's
address stated in Section 12.10 hereof. The Company or the Trustee by notice to
the other may designate additional or different addresses for subsequent notices
or communications.
Any notice or communication to a Noteholder shall be mailed by first
class mail to his address shown on the register kept by the Registrar. 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
within the time prescribed, it is duly given, whether or not the addressee
receives it.
If the Company mails a notice or communication to Noteholders, it shall
mail a copy to the Trustee and each Agent at the same time.
All notices or communications shall be in writing.
In case by reason of the suspension of regular mail service, or by
reason of any other cause, it shall be impossible to mail any notice as required
by the Indenture, then such method of notification as shall be made with the
approval of the Trustee shall constitute a sufficient mailing of such notice.
SECTION 12.3 Communication by Noteholders with Other Noteholders.
Noteholders may communicate pursuant to TIA Section 312(b) with other
Noteholders with respect to their rights under this Indenture or the Securities.
The Company, the Trustee, the Registrar and anyone else shall have the
protection of TIA Section 312(c).
SECTION 12.4 Certificate and Opinion as to Conditions Precedent. Upon
any request or application by the Company to the Trustee to take any action
under this Indenture, the Company shall furnish to the Trustee:
(a) an Officers' Certificate stating that, in the opinion of the
signers, all conditions precedent, if any, provided for in this Indenture
relating to the proposed action have been complied with; and
(b) an Opinion of Counsel stating that, in the opinion of such counsel,
all such conditions precedent have been complied with.
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SECTION 12.5 Statements Required in Certificate or Opinion. Each
certificate or opinion with respect to compliance with a condition or covenant
provided for in this Indenture (other than pursuant to Section 4.3) shall
include:
(a) a statement that the person signing such certificate or rendering
such opinion has read such covenant or condition;
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of such person, such person has
made such examination or investigation as is necessary to enable such person to
express an informed opinion as to whether or not such covenant or condition has
been complied with; and
(d) a statement as to whether or not, in the opinion of such person,
such condition or covenant has been complied with.
SECTION 12.6 Rules by Trustee and Agents. The Trustee may make
reasonable rules for action by, or a meeting of, Noteholders. The Registrar or
Paying Agent may make reasonable rules and set reasonable requirements for its
functions.
SECTION 12.7 Legal Holidays. A "Legal Holiday" is a Saturday, a Sunday
or a day on which banking institutions either in the State of New York or the
State of California are not required to be open. If a payment date is a Legal
Holiday at a place of payment, payment may be made at that place on the next
succeeding day that is not a Legal Holiday, and no interest shall accrue for the
intervening period. If any other operative date for purposes of this Indenture
shall occur on a Legal Holiday then for all purposes the next succeeding day
that is not a Legal Holiday shall be such operative date.
SECTION 12.8 No Recourse Against Others. A director, officer, employee
or stockholder, as such of the Company shall not have any liability for any
obligations of the Company under the Securities or the Indenture or for any
claim based on, in respect of or by reason of such obligations or their
creation. Each Noteholder by accepting a Security waives and releases all such
liability. The waiver and release are part of the consideration for the issue of
the Securities.
SECTION 12.9 Counterparts. This Indenture may be executed in any number
of counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
SECTION 12.10 Variable Provisions. "Officer" means the Chairman of the
Board, the President, any Vice-President, the Treasurer, the Secretary, any
Assistant Treasurer or any Assistant Secretary of the Company.
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The first certificate pursuant to Section 4.3 hereof shall be for the
fiscal year ending on March 31, 1997.
The reporting date for Section 9.6 hereof is May 15 of each year. The
first reporting date is May 15, 1997.
The Trustee, or if the Trustee is a member of a bank holding company
system, its bank holding company, shall always have a combined capital and
surplus of at least $50,000,000 as set forth in its most recent published annual
report of condition.
The Company's address is: HMT Technology Corporation
1055 Page Avenue
Fremont, California 94538
Attention: Chief Financial Officer
Telephone number: (510) 490-3100
Telefax number: (510) 490-5538
with a copy to: James C. Kitch
Cooley Godward LLP
Five Palo Alto Square
3000 El Camino Real
Palo Alto, California 94306
Telephone number: (415) 843-5000
Telefax number: (415) 857-0663
The Trustee's address is: State Street Bank and Trust Company
of California, N.A.
725 South Figueroa Street
Suite 3100
Los Angles, California 90017
Attention: Corporate Trust Department
Telephone Number: (213) 362-7338
Telefax Number: (213) 362-7357
SECTION 12.11 Governing Law. THE INTERNAL LAWS OF THE STATE OF NEW YORK
SHALL GOVERN THIS INDENTURE AND THE SECURITIES, WITHOUT REGARD TO THE CONFLICT
OF LAWS PROVISIONS THEREOF.
SECTION 12.12 No Adverse Interpretation of Other Agreements. This
Indenture may not be used to interpret another indenture, loan or debt agreement
of the Company or an Affiliate. Any such indenture, loan or debt agreement may
not be used to interpret this Indenture.
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SECTION 12.13 Successors. All agreements of the Company in this
Indenture and the Securities shall bind its successor. All agreements of the
Trustee in this Indenture shall bind its successor.
SECTION 12.14 Severability. In case any provision in this Indenture or
in the Securities shall be, invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
SECTION 12.15 Table of Contents Headings, Etc. The Table of Contents,
Cross Reference Table, and headings of the Articles and Sections of this
Indenture have been inserted for convenience of reference only, are not to be
considered a part hereof, and shall in no way modify or restrict any of the
terms or provisions hereof.
IN WITNESS WHEREOF the parties hereto have caused this Indenture to be
duly executed, all as of the date first written above.
HMT Technology Corporation,
as Company,
/s/ Peter S. Norris
By:___________________________________________________
Name: Peter S. Norris
Title: Chief Financial Officer
State Street Bank and Trust Company of California, N.A.
as Trustee
/s/ Jeanie Mar
By:___________________________________________________
Name:
Title:
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HMT TECHNOLOGY CORPORATION
as Company
5 3/4% Convertible Subordinated Notes Due 2004
INDENTURE
Dated as of January 15, 1997
STATE STREET BANK AND TRUST COMPANY OF CALIFORNIA, N.A.
as Trustee
60
TABLE OF CONTENTS
(CONTINUED)
TABLE OF CONTENTS
PAGE
----
ARTICLE I - DEFINITIONS AND INCORPORATION BY REFERENCE ...............................................................1
SECTION 1.1 Definitions............................................................................1
SECTION 1.2 Other Definitions......................................................................7
SECTION 1.3 Incorporation by Reference of Trust Indenture Act......................................8
SECTION 1.4 Rules of Construction..................................................................8
ARTICLE II - THE SECURITIES...........................................................................................9
SECTION 2.1 Form and Dating........................................................................9
SECTION 2.2 Execution and Authentication..........................................................11
SECTION 2.3 Registrar, Paying Agent and Conversion Agent..........................................12
SECTION 2.4 Paying Agent to Hold Money in Trust...................................................12
SECTION 2.5 Noteholder Lists......................................................................12
SECTION 2.6 Transfer and Exchange.................................................................13
SECTION 2.7 Replacement Securities................................................................20
SECTION 2.8 Outstanding Securities................................................................20
SECTION 2.9 Treasury Securities...................................................................20
SECTION 2.10 Temporary Securities..................................................................21
SECTION 2.11 Cancellation..........................................................................21
SECTION 2.12 Transfer of Interests in Global Securities............................................21
SECTION 2.13 Defaulted Interest or Liquidated Damages..............................................21
ARTICLE III - REDEMPTION AND REPURCHASE..............................................................................22
SECTION 3.1 Notices to Trustee....................................................................22
SECTION 3.2 Selection of Securities to be Redeemed................................................22
SECTION 3.3 Notice of Redemption..................................................................22
SECTION 3.4 Effect of Notice of Redemption........................................................23
SECTION 3.5 Deposit of Redemption Price...........................................................23
SECTION 3.6 Securities Redeemed in Part...........................................................23
SECTION 3.7 Optional Redemption...................................................................24
SECTION 3.8 Designated Event Offer................................................................24
ARTICLE IV - COVENANTS...............................................................................................26
SECTION 4.1 Payment of Securities.................................................................26
SECTION 4.2 SEC Reports...........................................................................26
SECTION 4.3 Compliance Certificate................................................................26
SECTION 4.4 Stay, Extension and Usury Laws........................................................27
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TABLE OF CONTENTS
(CONTINUED)
SECTION 4.5 Corporate Existence...................................................................27
SECTION 4.6 Taxes.................................................................................28
SECTION 4.7 Designated Event......................................................................28
SECTION 4.8 Shareholder Rights Plan...............................................................28
ARTICLE V - CONVERSION...............................................................................................28
SECTION 5.1 Conversion Privilege..................................................................28
SECTION 5.2 Conversion Procedure..................................................................29
SECTION 5.3 Fractional Shares.....................................................................30
SECTION 5.4 Taxes on Conversion...................................................................30
SECTION 5.5 Company to Provide Stock..............................................................30
SECTION 5.6 Adjustment of Conversion Price........................................................30
SECTION 5.7 No Adjustment.........................................................................33
SECTION 5.8 Other Adjustments.....................................................................34
SECTION 5.9 Adjustments for Tax Purposes..........................................................34
SECTION 5.10 Adjustments by the Company............................................................34
SECTION 5.11 Notice of Adjustment..................................................................34
SECTION 5.12 Notice of Certain Transactions........................................................34
SECTION 5.13 Effect of Reclassifications, Consolidations, Mergers or Sales on
Conversion Privilege..................................................................35
SECTION 5.14 Trustee's Disclaimer..................................................................36
ARTICLE VI - SUBORDINATION...........................................................................................36
SECTION 6.1 Agreement to Subordinate..............................................................36
SECTION 6.2 No Payment on Securities if Senior Debt in Default....................................36
SECTION 6.3 Distribution on Acceleration of Securities; Dissolution and Reorganization;
Subrogation of Securities.............................................................37
SECTION 6.4 Reliance by Senior Debt on Subordination Provisions...................................40
SECTION 6.5 No Waiver of Subordination Provisions.................................................40
SECTION 6.6 Trustee's Relation to Senior Debt.....................................................41
SECTION 6.7 Other Provisions Subject Hereto.......................................................41
ARTICLE VII - SUCCESSORS.............................................................................................42
SECTION 7.1 Merger, Consolidation or Sale of Assets...............................................42
SECTION 7.2 Successor Corporation Substituted.....................................................42
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TABLE OF CONTENTS
(CONTINUED)
ARTICLE VIII - DEFAULTS AND REMEDIES.................................................................................43
SECTION 8.1 Events of Default.....................................................................43
SECTION 8.2 Acceleration..........................................................................44
SECTION 8.3 Other Remedies........................................................................44
SECTION 8.4 Waiver of Past Defaults...............................................................45
SECTION 8.5 Control by Majority...................................................................45
SECTION 8.6 Limitation on Suits...................................................................45
SECTION 8.7 Rights of Noteholders to Receive Payment..............................................45
SECTION 8.8 Collection Suit by Trustee............................................................46
SECTION 8.9 Trustee May File Proofs of Claim......................................................46
SECTION 8.10 Priorities............................................................................46
SECTION 8.11 Undertaking for Costs.................................................................46
ARTICLE IX - TRUSTEE.................................................................................................47
SECTION 9.1 Duties of Trustee.....................................................................47
SECTION 9.2 Rights of Trustee.....................................................................48
SECTION 9.3 Individual Rights of Trustee..........................................................48
SECTION 9.4 Trustee's Disclaimer..................................................................48
SECTION 9.5 Notice of Defaults....................................................................48
SECTION 9.6 Reports by Trustee to Noteholders.....................................................48
SECTION 9.7 Compensation and Indemnity............................................................49
SECTION 9.8 Replacement of Trustee................................................................49
SECTION 9.9 Successor Trustee by Merger, Etc......................................................50
SECTION 9.10 Eligibility; Disqualification.........................................................51
SECTION 9.11 Preferential Collection of Claims Against Company.....................................51
SECTION 9.12 Sections Applicable to Registrar, Paying Agent and Conversion Agent ..................51
ARTICLE X - DISCHARGE OF INDENTURE...................................................................................51
SECTION 10.1 Termination of Company's Obligations..................................................51
SECTION 10.2 Repayment to Company..................................................................51
ARTICLE XI - AMENDMENTS, SUPPLEMENTS AND WAIVERS.....................................................................52
SECTION 11.1 Without Consent of Noteholders........................................................52
SECTION 11.2 With Consent of Noteholders...........................................................52
SECTION 11.3 Compliance with Trust Indenture Act...................................................53
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TABLE OF CONTENTS
(CONTINUED)
SECTION 11.4 Revocation and Effect of Consents.....................................................53
SECTION 11.5 Notation on or Exchange of Securities.................................................54
SECTION 11.6 Trustee Protected.....................................................................54
ARTICLE XII - MISCELLANEOUS..........................................................................................54
SECTION 12.1 Trust Indenture Act Controls..........................................................54
SECTION 12.2 Notices...............................................................................54
SECTION 12.3 Communication by Noteholders with Other Noteholders...................................55
SECTION 12.4 Certificate and Opinion as to Conditions Precedent....................................55
SECTION 12.5 Statements Required in Certificate or Opinion.........................................55
SECTION 12.6 Rules by Trustee and Agents...........................................................56
SECTION 12.7 Legal Holidays........................................................................56
SECTION 12.8 No Recourse Against Others............................................................56
SECTION 12.9 Counterparts..........................................................................56
SECTION 12.10 Variable Provisions...................................................................56
SECTION 12.11 Governing Law.........................................................................57
SECTION 12.12 No Adverse Interpretation of Other Agreements.........................................57
SECTION 12.13 Successors............................................................................57
SECTION 12.14 Severability..........................................................................57
SECTION 12.15 Table of Contents Headings, Etc.......................................................57
EXHIBIT A FORM OF CONVERTIBLE SUBORDINATED NOTE
EXHIBIT B-1 FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION OF
TRANSFER FROM RESTRICTED GLOBAL NOTE TO UNRESTRICTED
GLOBAL NOTE
EXHIBIT B-2 FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION OF
TRANSFER FROM UNRESTRICTED GLOBAL NOTE TO RESTRICTED
GLOBAL NOTE
EXHIBIT B-3 FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION OF
TRANSFER OF CERTIFICATED NOTES AND FOR CERTAIN OTHER
PURPOSES
EXHIBIT B-4 FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION OF
TRANSFER FROM RESTRICTED GLOBAL NOTE OR UNRESTRICTED
GLOBAL NOTE TO CERTIFICATED CONVERTIBLE NOTE
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