EXHIBIT 4.1
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INDENTURE
BETWEEN
MINDSPEED TECHNOLOGIES, INC.
AND
WELLS FARGO BANK, N.A.,
AS TRUSTEE
3.75% CONVERTIBLE SENIOR NOTES DUE 2009
DATED AS OF DECEMBER 8, 2004
================================================================================
CROSS-REFERENCE TABLE*
Trust Indenture Act Section Indenture Section
- --------------------------- -----------------
310(a)(1)....................................................................... 5.11
(a)(2).................................................................... 5.11
(a)(3).................................................................... n/a
(a)(4).................................................................... n/a
(a)(5).................................................................... 5.11
(b)....................................................................... 5.3; 5.11
(c)....................................................................... n/a
311(a).......................................................................... 5.12
(b)....................................................................... 5.12
(c)....................................................................... n/a
312(a).......................................................................... 2.9
(b)....................................................................... 14.3
(c)....................................................................... 14.3
313(a).......................................................................... 5.7
(b)(1).................................................................... n/a
(b)(2).................................................................... 5.7
(c)....................................................................... 5.7; 14.2
(d)....................................................................... 5.7
314(a)(1), (2), (3)............................................................. 9.4; 14.2
(a)(4).................................................................... 9.5; 14.6
(b)....................................................................... 8.1(f)
(c)(1).................................................................... 14.5
(c)(2).................................................................... 14.5
(c)(3).................................................................... n/a
(d)....................................................................... 8.1(e)
(e)....................................................................... 14.6
(f)....................................................................... n/a
315(a).......................................................................... 5.1(a)
(b)....................................................................... 5.6; 14.2
(c)....................................................................... 5.1(b)
(d)....................................................................... 5.1(c)
(e)....................................................................... 4.14
316(a)(last sentence)........................................................... 7.2
(a)(1)(A)................................................................. 4.5
(a)(1)(B)................................................................. 4.4
(a)(2).................................................................... n/a
(b)....................................................................... 4.7
(c)....................................................................... 7.4
317(a)(1)....................................................................... 4.8
(a)(2).................................................................... 4.9
(b)....................................................................... 2.6
318(a).......................................................................... 14.1
(b)....................................................................... n/a
(c)....................................................................... 14.1
"n/a" means not applicable.
*This Cross-Reference Table shall not, for any purpose, be deemed to be a part
of the Indenture.
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TABLE OF CONTENTS
PAGE
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ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1. Definitions............................................................................................. 1
SECTION 1.2. Incorporation by Reference of Trust Indenture Act....................................................... 14
SECTION 1.3. Rules of Construction................................................................................... 14
ARTICLE 2
THE NOTES
SECTION 2.1. Title and Terms......................................................................................... 15
SECTION 2.2. Form of Notes........................................................................................... 16
SECTION 2.3. Legends................................................................................................. 17
SECTION 2.4. Execution, Authentication, Delivery and Dating of the Notes............................................. 22
SECTION 2.5. Registrar and Paying Agent.............................................................................. 23
SECTION 2.6. Paying Agent to Hold Assets in Trust.................................................................... 23
SECTION 2.7. General Provisions Relating to Registration, Transfer and Exchange...................................... 24
SECTION 2.8. Book-Entry Provisions for the Global Notes.............................................................. 25
SECTION 2.9. Holder Lists............................................................................................ 26
SECTION 2.10. Persons Deemed Owners................................................................................... 26
SECTION 2.11. Mutilated, Destroyed, Lost or Stolen Notes.............................................................. 26
SECTION 2.12. Treasury Notes.......................................................................................... 27
SECTION 2.13. Temporary Notes......................................................................................... 27
SECTION 2.14. Cancellation............................................................................................ 28
SECTION 2.15. CUSIP Numbers........................................................................................... 28
SECTION 2.16. Defaulted Interest...................................................................................... 28
SECTION 2.17. Transfer Provisions..................................................................................... 29
SECTION 2.18. Additional Interest Under the Registration Rights Agreement............................................. 30
ARTICLE 3
DISCHARGE OF INDENTURE
SECTION 3.1. Discharge of Liability on Notes......................................................................... 31
SECTION 3.2. Repayment to the Company................................................................................ 31
ARTICLE 4
DEFAULTS AND REMEDIES
SECTION 4.1. Events of Default....................................................................................... 31
SECTION 4.2. Acceleration of Maturity; Rescission and Annulment...................................................... 33
SECTION 4.3. Other Remedies.......................................................................................... 34
SECTION 4.4. Waiver of Past Defaults................................................................................. 34
SECTION 4.5. Control by Majority..................................................................................... 35
SECTION 4.6. Limitation on Suit...................................................................................... 35
SECTION 4.7. Unconditional Rights of Holders to Receive Payment and to Convert....................................... 36
SECTION 4.8. Collection of Indebtedness and Suits for Enforcement by the Trustee..................................... 36
SECTION 4.9. Trustee May File Proofs of Claim........................................................................ 37
SECTION 4.10. Restoration of Rights and Remedies...................................................................... 37
SECTION 4.11. Rights and Remedies Cumulative.......................................................................... 38
SECTION 4.12. Delay or Omission Not Waiver............................................................................ 38
SECTION 4.13. Priorities.............................................................................................. 38
SECTION 4.14. Undertaking for Costs................................................................................... 38
SECTION 4.15. Waiver of Stay or Extension Laws........................................................................ 39
ARTICLE 5
THE TRUSTEE
SECTION 5.1. Certain Duties and Responsibilities..................................................................... 39
SECTION 5.2. Certain Rights of Trustee............................................................................... 41
SECTION 5.3. Individual Rights of Trustee............................................................................ 41
SECTION 5.4. Money Held in Trust..................................................................................... 41
SECTION 5.5. Trustee's Disclaimer.................................................................................... 42
SECTION 5.6. Notice of Defaults...................................................................................... 42
SECTION 5.7. Reports by Trustee to Holders........................................................................... 42
SECTION 5.8. Compensation and Indemnification........................................................................ 42
SECTION 5.9. Replacement of Trustee.................................................................................. 43
SECTION 5.10. Successor Trustee by Merger, Etc........................................................................ 44
SECTION 5.11. Corporate Trustee Required; Eligibility................................................................. 44
SECTION 5.12. Collection of Claims Against the Company................................................................ 44
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ARTICLE 6
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER,
SALE, LEASE OR OTHER DISPOSITION
SECTION 6.1. Company May Consolidate, Etc., Only on Certain Terms.................................................... 45
SECTION 6.2. Successor Corporation Substituted....................................................................... 45
ARTICLE 7
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 7.1. Without Consent of Holders of Notes..................................................................... 46
SECTION 7.2. With Consent of Holders of Notes........................................................................ 47
SECTION 7.3. Compliance with Trust Indenture Act..................................................................... 47
SECTION 7.4. Revocation of Consents and Effect of Consents or Votes.................................................. 48
SECTION 7.5. Notation on or Exchange of Notes........................................................................ 48
SECTION 7.6. Trustee to Sign Amendment, Etc.......................................................................... 48
SECTION 7.7. Effect of Amendment..................................................................................... 49
ARTICLE 8
SECURITY
SECTION 8.1. Security................................................................................................ 50
ARTICLE 9
COVENANTS
SECTION 9.1. Payment of Principal, Premium, Repurchase Price and Interest............................................ 52
SECTION 9.2. Maintenance of Offices or Agencies...................................................................... 53
SECTION 9.3. Corporate Existence..................................................................................... 53
SECTION 9.4. Reports................................................................................................. 53
SECTION 9.5. Compliance Certificate.................................................................................. 54
SECTION 9.6. Resale of Certain Notes................................................................................. 54
ARTICLE 10
[INTENTIONALLY OMITTED]
ARTICLE 11
PURCHASE AT THE OPTION OF A HOLDER UPON A FUNDAMENTAL CHANGE
SECTION 11.1. Purchase Right.......................................................................................... 55
SECTION 11.2. Effect of Fundamental Change Purchase Notice; Withdrawal................................................ 57
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SECTION 11.3. Deposit of Fundamental Change Purchase Price............................................................ 58
SECTION 11.4. Notes Purchased in Part................................................................................. 58
SECTION 11.5. Covenant to Comply With Securities Laws Upon Purchase of Notes.......................................... 59
SECTION 11.6. Repayment to the Company................................................................................ 59
ARTICLE 12
CONVERSION OF notes
SECTION 12.1. Conversion Right; Expiration of Conversion Right; Conversion Price...................................... 59
SECTION 12.2. Exercise of Conversion Right............................................................................ 62
SECTION 12.3. Fractions of Shares..................................................................................... 63
SECTION 12.4. Adjustment of Conversion Price.......................................................................... 64
SECTION 12.5. Consolidation or Merger of the Company.................................................................. 73
SECTION 12.6. Notice of Adjustments of Conversion Price............................................................... 75
SECTION 12.7. Notice Prior to Certain Actions......................................................................... 75
SECTION 12.8. Company to Reserve Common Stock; Listing................................................................ 76
SECTION 12.9. Common Stock to be Fully Paid and Nonassessable......................................................... 77
SECTION 12.10. Taxes on Conversions.................................................................................... 77
SECTION 12.11. Cancellation of Converted Notes......................................................................... 77
SECTION 12.12. Option to Satisfy Conversion Obligation with Cash, Common Stock or Combination Thereof.................. 78
SECTION 12.13. Responsibility of Trustee for Conversion Provisions..................................................... 81
SECTION 12.14. Withholding Taxes on Adjustments of the Conversion Price................................................ 81
SECTION 12.15. Conversion After Public Acquirer Fundamental Change..................................................... 81
SECTION 12.16. Limitation on Conversion................................................................................ 82
ARTICLE 13
[INTENTIONALLY OMITTED]
ARTICLE 14
OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 14.1. Trust Indenture Act Controls............................................................................ 82
SECTION 14.2. Notices................................................................................................. 82
SECTION 14.3. Communication by Holders with Other Holders............................................................. 83
SECTION 14.4. Acts of Holders of Notes................................................................................ 84
SECTION 14.5. Certificate and Opinion as to Conditions Precedent...................................................... 84
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SECTION 14.6. Statements Required in Certificate or Opinion........................................................... 85
SECTION 14.7. Effect of Headings and Table of Contents................................................................ 85
SECTION 14.8. Successors and Assigns.................................................................................. 86
SECTION 14.9. Separability Clause..................................................................................... 86
SECTION 14.10. Benefits of Indenture................................................................................... 86
SECTION 14.11. Governing Law........................................................................................... 86
SECTION 14.12. Counterparts............................................................................................ 86
SECTION 14.13. Legal Holidays.......................................................................................... 86
SECTION 14.14. Recourse Against Others................................................................................. 87
SECTION 14.15. Tax Treatment........................................................................................... 87
EXHIBITS
EXHIBIT A Form of Note.................................................................................... A-1
EXHIBIT B Form of Fundamental Change Purchase Notice...................................................... B-1
EXHIBIT C Form of Conversion Notice....................................................................... C-1
EXHIBIT D Form of Transfer Notice ........................................................................ D-1
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INDENTURE, dated as of December 8, 2004 (this "INDENTURE"), between
Mindspeed Technologies, Inc., a corporation duly organized and existing under
the laws of the State of Delaware, having its principal office at 4000 MacArthur
Boulevard, East Tower, Newport Beach, California 92660-3095 (the "COMPANY") and
Wells Fargo Bank, N.A., a national banking association organized under the laws
of the United States, as Trustee (the "TRUSTEE"), having its corporate trust
office at Sixth Street and Marquette Avenue, Minneapolis, MN 55479.
RECITALS OF THE COMPANY
WHEREAS, the Company has duly authorized the creation of an issue of
its 3.75% Convertible Senior Notes due 2009 (the "NOTES") of substantially the
terms, tenor, amount and other provisions hereinafter set forth, and, to provide
therefor, the Company has duly authorized the execution and delivery of this
Indenture; and
WHEREAS, all things necessary to make the Notes, when the Notes are
duly executed by the Company and authenticated and delivered hereunder and duly
issued by the Company, the valid obligations of the Company, and to make this
Indenture a valid and binding agreement of the Company, in accordance with their
and its terms, have been done.
NOW, THEREFORE, for and in consideration of the premises and the
purchase of the Notes by the Holders (as defined below) thereof, it is mutually
covenanted and agreed, for the equal and proportionate benefit of all Holders,
as follows:
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1. Definitions.
For all purposes of this Indenture and the Notes, the following
terms are defined as follows:
"110% TRADING PRICE EXCEPTION" has the meaning set forth in the
definition of Fundamental Change.
"ACT", when used with respect to any Holder, has the meaning set
forth in Section 14.4(a).
"ADDITIONAL COMMON STOCK" has the meaning set forth in Section
12.1(b).
"ADDITIONAL INTEREST" means the interest, if any, payable on the
Notes pursuant to Section 3 of the Registration Rights Agreement.
"ADDITIONAL PLEDGED SECURITY ENTITLEMENTS" has the meaning specified
in the Pledge Agreement.
"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 purposes of this definition, "control," as used with respect to any
Person, means 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, by agreement or otherwise; provided
that beneficial ownership of 10% or more of the Voting Stock of a Person will be
deemed to be control. For purposes of this definition, the terms "controlling,"
"controlled by" and "under common control with" have correlative meanings.
"AGENT MEMBERS" has the meaning set forth in Section 2.8.
"APPLICABLE STOCK PRICE" has the meaning set forth in Section 12.12.
"BANKRUPTCY LAW" means Title 11 of the U.S. Code or any similar
federal or state law for the relief of debtors.
"BARRIER PRICE" means $1.89, subject to adjustment as provided in
Section 12.4(g).
"BOARD OF DIRECTORS" means either the board of directors of the
Company or any committee of the board of directors of the Company empowered to
act for it with respect to this Indenture.
"BOARD RESOLUTION" means a resolution duly adopted by the Board of
Directors, a copy of which, certified by the Secretary or an Assistant Secretary
of the Company to be in full force and effect on the date of such certification,
shall have been delivered to the Trustee.
"BUSINESS DAY" means, with respect to any Note, a day that in The
City of New York is not a day on which banking institutions are authorized by
law or regulation to close.
"CAPITAL LEASE OBLIGATION" means, at the time any determination is
to be made, the amount of the liability in respect of a capital lease that would
at that time be required to be capitalized on a balance sheet prepared in
accordance with GAAP, and the stated maturity (for purposes of this definition,
"stated maturity" means, with respect to any installment of interest or
principal on any series of Indebtedness, the date on which the payment of
interest or principal was scheduled to be paid in the documentation governing
such Indebtedness as of the date of this Indenture, and will not include any
contingent obligations to repay, redeem or repurchase any such interest or
principal prior to the date originally scheduled for the payment thereof)
thereof shall be the date of the last payment of rent or any other amount due
under such lease prior to the first date upon which such lease may be prepaid by
the lessee without payment of a penalty.
"CAPITAL STOCK" means:
(i) in the case of a corporation, corporate stock;
(ii) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents (however
designated) of corporate stock;
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(iii) in the case of a partnership or limited liability Company,
partnership interests (whether general or limited) or membership
interests; and
(iv) any other interest or participation that confers on a Person
the right to receive a share of the profits and losses of, or
distributions of assets of, the issuing Person, but excluding from all of
the foregoing any debt securities convertible into Capital Stock, whether
or not such debt securities include any right of participation with
Capital Stock.
"CASH AMOUNT" has the meaning set forth in Section 12.12.
"CLOSING DATE" means December 8, 2004 or such later date on which
the Notes may be delivered pursuant to the Purchase Agreement.
"CLOSING TIME" means the time at which the closing of the original
issuance of Notes is complete on the Closing Date.
"COMMISSION" means the Securities and Exchange Commission or any
successor agency.
"COMMON STOCK" means any stock of any class of the Company which has
no preference in respect of dividends or of amounts payable in the event of any
voluntary or involuntary liquidation, dissolution or winding up of the Company
and which is not subject to redemption by the Company. However, subject to the
provisions of Sections 12.5 and 12.7 hereof, shares issuable on conversion of
the Notes shall include only shares of the class designated as Common Stock,
$0.01 par value per share, of the Company at the date of execution of this
Indenture or shares of any class or classes resulting from any reclassification
or reclassifications thereof and which have no preference in respect of
dividends or of amounts payable in the event of any voluntary or involuntary
liquidation, dissolution or winding up of the Company and which are not subject
to redemption by the Company, provided that if at any time there shall be more
than one such resulting class, the shares of each such class then so issuable
shall be substantially in the proportion which the total number of shares of
such class resulting from all such reclassifications bears to the total number
of shares of all such classes resulting from all such reclassifications.
"COMMON STOCK RESTRICTED SECURITIES LEGEND" has the meaning set
forth in Section 2.3.
"COMPANY" means the corporation named as the "Company" in the first
paragraph of this instrument until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Person.
"COMPANY ORDER" means a written order signed in the name of the
Company by any Officer.
"CONTINUING DIRECTOR" means, as of any date of determination, any
member of the Board of Directors who:
3
(a) was a member of the Board of Directors of the Company on the
date hereof; or
(b) was nominated for election, appointed or elected to the Board of
Directors with the approval of a majority of the Continuing Directors who
were members of the Board of Directors at the time of the new director's
nomination, appointment or election, either by a specific vote or by
approval of the proxy statement issued by the Company on behalf of the
Company's entire Board of Directors in which such individual is named as a
nominee for director.
"CONTROL AGREEMENT" means the Control Agreement, dated as of
December 8, 2004, among the Company, the Trustee and Wells Fargo Bank, N.A., as
securities intermediary and depository bank, and as such agreement may be
amended, restated, supplemented or otherwise modified from time to time,
including all annexes and schedules attached thereto.
"CONVERSION AGENT" means any Person authorized by the Company to
convert Notes in accordance with Article 12. Initially, the Conversion Agent
shall be Wells Fargo Bank, N.A. The Company may change the Conversion Agent, but
in no event will the Conversion Agent be an affiliate of the Company.
"CONVERSION DATE" means, with respect to any Holder, the date on
which such Holder has satisfied all the requirements to convert its Notes
pursuant to Section 12.2.
"CONVERSION OBLIGATION" has the meaning set forth in Section 12.12.
"CONVERSION PERIOD" has the meaning set forth in Section 12.12.
"CONVERSION PRICE" has the meaning set forth in Section 12.1(a).
"CONVERSION RATE", at any time, shall equal $1,000 divided by the
Conversion Price at such time, rounded to three decimal places (rounded up if
the fourth decimal place thereof is 5 or more and otherwise rounded down).
"CONVERSION RECORD DATE" shall mean, with respect to any dividend,
distribution or other transaction or event in which the holders of Common Stock
have the right to receive any shares of any class of Capital Stock of the
Company or evidences of its Indebtedness, cash or other assets, or in which the
Common Stock (or other applicable security) is exchanged for or converted into
any combination of shares of any class of Capital Stock of the Company or
evidences of its Indebtedness, cash or other assets, the date fixed for
determination of stockholders entitled to receive such cash, securities or other
property (whether such date is fixed by the Board of Directors or by statute,
contract or otherwise).
"CONVERSION RETRACTION PERIOD" has the meaning set forth in Section
12.12.
"CONVERSION VALUE" has the meaning set forth in Section 12.12.
"CORPORATE TRUST OFFICE" means, for purposes of presentation or
surrender of Notes for payment, registration, transfer, exchange or conversion
or for service of notices or
4
demands upon the Company or for any other purpose of this Indenture, the office
or agent of the Trustee located at Sixth Street and Marquette Avenue,
Minneapolis, MN 55479.
"CORPORATION" means any corporation, association, limited liability
company, company and business trust.
"CURRENT MARKET PRICE" has the meaning set forth in Section 12.4(h).
"CUSTODIAN" means any receiver, trustee, assignee, liquidator,
sequestrator or similar official under any Bankruptcy Law.
"DEFAULT" means an event which is, or after notice or lapse of time
or both would constitute, an Event of Default.
"DEFAULTED PAYMENT" has the meaning set forth in Section 4.1(b).
"DEFAULTED INTEREST" has the meaning set forth in Section 2.16.
"DELIVERY DATE" has the meaning specified in the Purchase Agreement.
"DEPOSITARY" means The Depository Trust Company, its nominees and
their respective successors.
"DISTRIBUTED ASSETS" has the meaning set forth in Section 12.4(d).
"DOLLAR" or "$" means a U.S. dollar or other equivalent unit in such
coin or currency of the United States as at the time shall be legal tender for
the payment of public and private debts.
"EFFECTIVE DATE" has the meaning set forth in Section 12.1(b).
"EQUITY INTERESTS" means Capital Stock and all warrants, options or
other rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"EVENT OF DEFAULT" has the meaning set forth in Section 4.1.
"EX-DIVIDEND TIME" means, with respect to any issuance or
distribution on shares of Common Stock, the first date on which the shares of
Common Stock trade regular way on the principal securities market on which the
shares of Common Stock are then traded without the right to receive such
issuance or distribution.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission thereunder.
"EXPIRATION TIME" has the meaning set forth in Section 12.4(f).
"FAIR MARKET VALUE" means, if there is a current market for the
asset, debt or transaction in question, the amount that a willing buyer would
pay a willing seller in an arm's
5
length transaction or, in the absence of a current market for such asset, debt
or transaction, the amount determined in good faith by the Board of Directors
that represents its determination of the fair market value of the asset.
"FUNDAMENTAL CHANGE" means the occurrence of any of the following
events after the Closing Date:
(a) the acquisition by any Person, directly or indirectly, through a
purchase, merger or other acquisition transaction or series of purchases,
mergers or other acquisition transactions of beneficial ownership of
shares of the Capital Stock of the Company entitling that Person to
exercise 50% or more of the total Voting Stock of the Company, other than
any acquisition by the Company, any of its subsidiaries or any of their
employee benefit plans; or
(b) the first day on which a majority of the members of the board of
directors of the Company does not consist of Continuing Directors; or
(c) the Company consolidates or merges with or into any other
Person, any merger of another Person into the Company, or any conveyance,
transfer, sale, lease or other disposition of all or substantially all of
the Company's properties and assets to another Person, other than: (A) any
transaction: (1) that does not result in any reclassification, conversion,
exchange or cancellation of outstanding shares of the Company's Capital
Stock; and (2) pursuant to which the holders of 50% or more of the total
Voting Stock of the Company immediately prior to the transaction have the
right to exercise, directly or indirectly, 50% or more of the total Voting
Stock of the continuing or surviving Person immediately after giving
effect to such transaction; and (B) any merger primarily for the purpose
of changing the Company's jurisdiction of incorporation and resulting in a
reclassification, conversion or exchange of outstanding shares of Common
Stock, if at all, solely into shares of common stock of the surviving
entity; or
(d) the termination of trading of the Common Stock, which shall be
deemed to have occurred if the Common Stock or other common stock into
which the Notes are convertible is neither listed for trading on a U.S.
national securities exchange nor approved for listing on The Nasdaq
National Market or any similar U.S. system of automated dissemination of
quotations of securities prices or traded in over-the-counter securities
markets, and no American Depositary Shares or similar instruments for such
common stock are so listed or approved for listing in the United States.
Notwithstanding the foregoing, the Company shall not be required to
purchase the Notes of the Holders upon a Fundamental Change pursuant to Section
11.1 (and a Fundamental Change shall be deemed not to have occurred) if:
(I) the Market Price per share of Common Stock for any five Trading
Days within:
(1) the period of 10 consecutive Trading Days ending
immediately after the later of the Fundamental Change or the public
announcement of the
6
Fundamental Change, in the case of a Fundamental Change under clause
(a) or (b) of the definition of "Fundamental Change" above, or
(2) the period of 10 consecutive Trading Days ending
immediately before the Fundamental Change, in the case of a
Fundamental Change under clause (c) or (d) of the definition of
"Fundamental Change" above,
equals or exceeds 110% of the Conversion Price of the Notes in
effect on each of those five Trading Days (the "110% TRADING PRICE
EXCEPTION"); or
(II) more than 90% of the consideration in the transaction or
transactions (other than cash payments for fractional shares and cash
payments made in respect of dissenters' appraisal rights) which otherwise
would constitute a Fundamental Change under clause (a), (b) or (c) above
consists of shares of common stock, depositary receipts or other
certificates representing common equity interests traded or to be traded
immediately following such transaction on a national securities exchange
or quoted on The Nasdaq National Market, and, as a result of the
transaction or transactions, the Notes become convertible solely into such
Common Stock, depositary receipts or other certificates representing
common equity interests (and any rights attached thereto).
For the purposes of this definition (x) whether a Person is a "beneficial
owner" shall be determined in accordance with Rule 13d-3 and Rule 13d-5 under
the Exchange Act and (y) the term "Person" includes any syndicate or group that
would be deemed to be a "person" under Section 13(d)(3) of the Exchange Act.
"FUNDAMENTAL CHANGE PURCHASE DATE" has the meaning set forth in
Section 11.1 hereof.
"FUNDAMENTAL CHANGE PURCHASE NOTICE" has the meaning set forth in
Section 11.1 hereof.
"FUNDAMENTAL CHANGE PURCHASE PRICE" has the meaning set forth in
Section 11.1 hereof.
"GAAP" has the meaning set forth in Section 1.3.
"GLOBAL NOTE" has the meaning set forth in Section 2.2(a).
"GROUP" has the same meaning as that used for the purposes of
Section 13 under the Exchange Act.
"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, by way of a pledge of
assets or through letters of credit or reimbursement agreements in respect
thereof, of all or any part of any Indebtedness (whether arising by virtue of
partnership arrangements, or by agreements to keep-well, to purchase assets,
goods, securities or services, to take or pay or to maintain financial statement
conditions or otherwise).
7
"HEDGING OBLIGATIONS" means, with respect to any specified Person,
the obligations of such Person incurred in the normal course of business and not
for speculative purposes under:
(a) interest rate swap agreements (whether from fixed to floating or
from floating to fixed), interest rate cap agreements and interest rate
collar agreements;
(b) other agreements or arrangements designed to manage interest
rates or interest rate risk; and
(c) other agreements or arrangements designed to protect such Person
against fluctuations in currency exchange rates or commodity prices.
"HOLDER", when used with respect to any Note, including any Global
Note, means the Person in whose name the Note is registered in the Register.
"INDEBTEDNESS" means, with respect to any specified Person, any
indebtedness of such Person (excluding accrued expenses and trade payables),
whether or not contingent:
(i) in respect of borrowed money;
(ii) evidenced by bonds, notes, debentures or similar instruments or
letters of credit (or reimbursement agreements in respect thereof);
(iii) in respect of banker's acceptances;
(iv) representing Capital Lease Obligations;
(v) representing the balance deferred and unpaid of the purchase
price of any property or services due more than six months after such
property is acquired or such services are completed; or
(vi) representing any Hedging Obligations,
if and to the extent any of the preceding items (other than letters of credit
and Hedging Obligations) would appear as a liability upon a balance sheet of the
specified Person prepared in accordance with GAAP. In addition, the term
"Indebtedness" includes the Guarantee by the specified Person of any
Indebtedness of any other Person.
"INDENTURE" means this instrument as originally executed or as it
may from time to time be supplemented or amended by one or more supplemental
indentures entered into pursuant to the applicable provisions hereof.
"INITIAL PLEDGED SECURITIES" means the U.S. Treasury securities
identified in Schedule I to the Pledge Agreement.
"INITIAL PURCHASER" means Lehman Brothers Inc., as initial purchaser
under the Purchase Agreement.
8
"INTEREST" means, with respect to any Note, the interest payable on
such Note based upon the Interest Rate and, if applicable, any Defaulted
Interest.
"INTEREST PAYMENT DATE" means each May 18 and November 18, provided,
however, that, if any such date is not a Business Day, the Interest Payment Date
shall be the next succeeding Business Day.
"INTEREST RATE" has the meaning set forth in Section 2.1(c).
"LIEN" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset
given to secure Indebtedness, whether or not filed, recorded or otherwise
perfected under applicable law (including any conditional sale or other title
retention agreement, any lease in the nature thereof, any option or other
agreement to sell or give a security interest in and any filing of or agreement
to give any financing statement under the Uniform Commercial Code (or equivalent
statutes) of any jurisdiction with respect to any such lien, pledge, charge, or
security interest or encumbrance).
"MAJORITY OWNED" means having "beneficial ownership" (as defined in
Rule 13(d)(3) under the Exchange Act) of more than 50% of the total Voting Stock
of an entity. "MAJORITY OWNER" has the correlative meaning.
"MARKET PRICE" of a security on any date of determination means:
(i) the closing sale price (or, if no closing sale price is
reported, the last reported sale price) of such security (regular way) on
The Nasdaq National Market on such date;
(ii) if such security is not listed for trading on The Nasdaq
National Market on any such date, the closing sale price as reported in
the composite transactions for the principal U.S. securities exchange on
which such security is listed;
(iii) if such security is not so reported, the last price quoted by
Interactive Data Corporation for such security on such date or, if
Interactive Data Corporation is not quoting such price, a similar
quotation service selected by the Company;
(iv) if such security is not so quoted, the average of the mid-point
of the last bid and ask prices for such security on such date from at
least two dealers recognized as market-makers for such security selected
by the Company for this purpose; or
(v) if such security is not so quoted, the average of the last bid
and ask prices for such security on such date from a dealer engaged in the
trading of such securities selected by the Company for this purpose.
"MATURITY" means the date on which the Principal with respect to any
Outstanding Note becomes due and payable as therein or herein provided, whether
at the Stated Maturity or by acceleration, conversion, call for redemption,
exercise of a purchase right or otherwise.
9
"NASDAQ NATIONAL MARKET" means the National Association of
Securities Dealers Automated Quotation National Market or any successor national
securities exchange or automated over-the-counter trading market in the United
States.
"NON-ELECTING SHARE" has the meaning set forth in Section 12.5.
"NON-STOCK FUNDAMENTAL CHANGE" has the meaning set forth in Section
12.1(b).
"NOTE RESTRICTED SECURITIES LEGEND" has the meaning set forth in
Section 2.3.
"NOTES" has the meaning ascribed to it in the first paragraph under
the caption "Recitals of the Company".
"OFFICER" of the Company means the Chairman of the Board, the Chief
Executive Officer, the President, the Chief Operating Officer, the Chief
Financial Officer, the Treasurer, any Assistant Treasurer, any Vice President,
the Secretary or any Assistant Secretary of the Company.
"OFFICERS' CERTIFICATE" means, with respect to the Company, a
certificate signed by both (1) the Chairman of the Board, the Chief Executive
Officer, the President or a Vice President and (2) so long as not the same as
the officer signing pursuant to clause (1), the Chief Operating Officer, the
Chief Financial Officer, the Treasurer, any Assistant Treasurer, the Secretary
or any Assistant Secretary of the Company and delivered to the Trustee.
"OPINION OF COUNSEL" means a written opinion of counsel, who may be
counsel to the Company (and may include directors or employees of the Company)
and in form and substance acceptable to the Trustee, which acceptance shall not
be unreasonably withheld.
"OUTSTANDING", when used with respect to Notes, means, as of the
date of determination, all Notes theretofore authenticated and delivered under
this Indenture, except Notes:
(i) previously canceled by the Trustee or delivered to the Trustee
for cancellation; and
(ii) which have been paid in exchange for or in lieu of other Notes
which have been authenticated and delivered pursuant to this Indenture,
other than any such Notes in respect of which there shall have been
presented to the Trustee proof satisfactory to it that such Notes are held
by a bona fide purchaser in whose hands such Notes are valid obligations
of the Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of Outstanding Notes have consented to or voted in favor of any
request, demand, authorization, direction, notice, consent, waiver, amendment or
modification hereunder, Notes held for the account of the Company or of any of
its Affiliates shall be disregarded and deemed not to be Outstanding, except
that in determining whether the Trustee shall be protected in making such a
determination or relying upon any such consent or vote, only Notes which a
Responsible Officer of the Trustee actually knows to be so owned shall be so
disregarded.
10
"PAYING AGENT" has the meaning set forth in Section 2.5.
"PERSON" means any individual, corporation, limited liability
company, partnership, joint venture, association, joint-stock company, trust,
estate, unincorporated organization or government or any agency or political
subdivision thereof.
"PHYSICAL NOTES" means Notes issued in definitive, fully registered
form without interest coupons, substantially in the form of Exhibit A hereto,
with the applicable legends as provided in Section 2.3.
"PLACE OF CONVERSION" means any city in which any Conversion Agent
is located.
"PLACE OF PAYMENT" means any city in which any Paying Agent is
located.
"PLEDGED ACCOUNT" has the meaning specified in the Pledge Agreement.
"PLEDGE AGREEMENT" means the Pledge Agreement, dated as of December
8, 2004, between the Company and the Trustee, and as such agreement may be
amended, restated, supplemented or otherwise modified from time to time,
including all annexes and schedules attached thereto.
"PLEDGED SECURITIES" means the U.S. Treasury securities to be
purchased by the Company and held in the Pledged Account in accordance with the
Pledge Agreement.
"PREDECESSOR NOTE" of any particular Note, means every previous Note
evidencing all or a portion of the same debt as that evidenced by such
particular Note; and, for the purposes of this definition, any Note
authenticated and delivered under Section 2.11 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Note shall be deemed to evidence the same
debt as the mutilated, destroyed, lost or stolen Note.
"PRINCIPAL" means, with respect to any Outstanding Note, the
principal amount of that Note, including the Repurchase Price, if applicable,
payable with respect to that Note.
"PUBLIC ACQUIRER COMMON STOCK" has the meaning set forth in the
definition of Public Acquirer Fundamental Change.
"PUBLIC ACQUIRER FUNDAMENTAL CHANGE" means any event constituting a
Non-Stock Fundamental Change in which the acquirer has a class of common stock
traded on any U.S. national securities exchange or quoted on The Nasdaq National
Market or which will be so traded or quoted when issued or exchanged in
connection with such Fundamental Change (the "PUBLIC ACQUIRER COMMON STOCK"). If
an acquirer does not itself have a class of common stock satisfying the
foregoing requirement, it will be deemed to have Public Acquirer Common Stock if
a corporation that directly or indirectly is the Majority Owner of the acquirer
has a class of common stock satisfying the foregoing requirement, in such case,
all references to Public Acquirer Common Stock shall refer to such class of
common stock.
11
"PURCHASE AGREEMENT" means the Purchase Agreement, dated December 2,
2004, between the Company and the Initial Purchaser relating to the offering and
sale of the Notes.
"PURCHASE RIGHTS" has the meaning set forth in Section 11.1.
"PURCHASED SHARES" has the meaning set forth in Section 12.4(f).
"QIB" means a "qualified institutional buyer" as defined under Rule
144A.
"REFERENCE DEALER" means a dealer engaged in the trading of
convertible securities selected by the Company or its successor for the purpose
for which such dealers are quoted or otherwise to which they are referred
herein.
"REFERENCE PERIOD" has the meaning set forth in Section 12.4(d).
"REGISTER" has the meaning set forth in Section 2.5.
"REGISTRAR" has the meaning set forth in Section 2.5.
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights
Agreement, dated as of the date hereof, between the Company and the Initial
Purchaser.
"REGULAR RECORD DATE" for the Interest payable on the Notes means
the May 1 and the November 1 (whether or not a Business Day), as applicable,
next preceding the corresponding Interest Payment Date.
"RESET PRICE" means $2.31, subject to adjustment as provided in
Section 12.4(g).
"RESPONSIBLE OFFICER", when used with respect to the Trustee, means
any officer of the Trustee, including any vice president, any assistant vice
president, any treasurer, any assistant treasurer, any trust officer, or any
other officer of the Trustee customarily performing functions similar to those
performed by any of the above designated officers and also means, with respect
to a particular corporate trust matter, any other officer to whom such matter is
referred because of such officer's knowledge of and familiarity with the
particular subject.
"RESTRICTED SECURITIES" has the meaning set forth in Section 2.3(a).
"RESTRICTED SECURITIES LEGEND" has the meaning set forth in Section
2.3(a).
"RULE 144" means Rule 144 as promulgated under the Securities Act
(including any successor rule thereof), as the same may be amended from time to
time.
"RULE 144A" means Rule 144A as promulgated under the Securities Act
(including any successor rule thereof), as the same may be amended from time to
time.
"SECURITIES ACT" means the Securities Act of 1933, as amended, and
the rules and regulations of the Commission thereunder.
12
"SETTLEMENT NOTICE PERIOD" has the meaning set forth in Section
12.12.
"SHELF REGISTRATION STATEMENT" means the shelf registration
statement filed with the Commission pursuant to the Securities Act pursuant to
the Registration Rights Agreement.
"SIGNIFICANT SUBSIDIARY" has the meaning assigned to it under Rule
405 of the Securities Act.
"STATED MATURITY" has the meaning set forth in Section 2.1(b).
"STOCK PRICE" has the meaning set forth in Section 12.1(b).
"SUBSIDIARY" means, with respect to any specified Person:
(i) 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 and after
giving effect to any voting agreement or stockholders' agreement that
effectively transfers voting power) to vote in the election of directors,
managers or trustees of the corporation, association or other business
entity is at the time owned or controlled, directly or indirectly, by that
Person or one or more of the other Subsidiaries of that Person (or a
combination thereof); and
(ii) any partnership (a) the sole general partner or the managing
general partner of which is such Person or a Subsidiary of such Person or
(b) the only general partners of which are that Person or one or more
Subsidiaries of that Person (or any combination thereof).
"TIA" means the Trust Indenture Act of 1939, as amended (15 U.S.
Code Section 77aaa-77bbbb), as in effect on the date of this Indenture;
provided, however, that in the event the TIA is amended after such date, "TIA"
means, to the extent required by such amendment, the Trust Indenture Act of
1939, as so amended, or any successor statute.
"TRADING DAY" means:
(i) if the applicable security is listed or admitted for trading on
the Nasdaq National Market, a day on which The Nasdaq National Market is
open for business;
(ii) if that security is not listed on the Nasdaq National Market, a
day on which trades may be made on The Nasdaq National Market;
(iii) if that security is not so listed on The Nasdaq National
Market and not quoted on The Nasdaq National Market, a day on which the
principal U.S. securities exchange on which the securities are listed is
open for business; or
(iv) if the applicable security is not so listed, admitted for
trading or quoted, any day other than a Saturday or a Sunday or a day on
which banking institutions in the State of New York are authorized or
obligated by law or executive order to close.
13
"TRIGGER EVENT" has the meaning set forth in Section 12.4(d).
"TRUSTEE" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean such successor Trustee.
"VICE PRESIDENT", when used with respect to the Company, means any
vice president, whether or not designated by a number or a word or words added
before or after the title "vice president".
"VOTING STOCK" of any specified Person as of any date means the
Capital Stock of such Person that is at the time entitled to vote in the
election of the board of directors of such Person.
SECTION 1.2. 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 Notes;
"INDENTURE SECURITY HOLDER" means a Holder;
"INDENTURE TO BE QUALIFIED" means this Indenture;
"INDENTURE TRUSTEE" or "INSTITUTIONAL TRUSTEE" means the Trustee;
and
"OBLIGOR" on the Notes means the Company and any other obligor on
the indenture securities.
All other TIA terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by Commission rule
have the meanings assigned to them by such definitions.
SECTION 1.3. Rules of Construction.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;
(b) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles in the United States prevailing at the time of any relevant
computation hereunder ("GAAP");
14
(c) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision; and
(d) all references to section and article numbers in this Indenture
shall refer to sections and articles hereof, unless otherwise specified.
ARTICLE 2
THE NOTES
SECTION 2.1. Title and Terms.
(a) The Notes shall be designated as the "3.75% CONVERTIBLE SENIOR
NOTES DUE 2009" of the Company. The aggregate principal amount of Notes which
may be authenticated and delivered under this Indenture is limited to
$40,000,000 (or $46,000,000 if the Initial Purchaser's option to purchase
additional Notes as set forth in Section 2 of the Purchase Agreement is
exercised in full), except for Notes authenticated and delivered upon
registration of, transfer of, or in exchange for, or in lieu of other Notes
pursuant to Sections 2.7, 2.8, 2.17, 7.5, 11.1 or 12.2 hereof. The Notes shall
be issuable in denominations of $1,000 or integral multiples thereof.
(b) The Notes shall mature on November 18, 2009 (the "STATED
MATURITY").
(c) The Notes shall bear Interest from the date of their original
issuance until the principal amount thereof is paid or made available for
payment, or until such date on which the Notes are converted or purchased as
provided herein at a rate of 3.75% per annum (including the Default Rate, if
applicable, the "INTEREST RATE"). Interest shall be payable semi-annually, in
arrears, on each Interest Payment Date.
(d) Interest on the Notes shall be computed (i) for any full
semi-annual period for which a particular Interest Rate is applicable, on the
basis of a 360-day year comprised of twelve 30-day months and (ii) for any
period for which a particular Interest Rate is applicable for less than a full
semi-annual period for which Interest is calculated, on the basis of a 30-day
month and, for such periods of less than a month, the actual number of days
elapsed over a 30-day month.
(e) Interest shall be due and payable on a Note as follows:
(i) A registered Holder as of the close of business on a Regular
Record Date shall be entitled to receive and shall receive (except as
otherwise indicated in this Section 2.1(e)), accrued and unpaid Interest
on such Note from the preceding Interest Payment Date (or such earlier
date on which Interest was last paid) to the Interest Payment Date next
succeeding such Regular Record Date.
(ii) In the event that a Note becomes subject to purchase pursuant
to Article 11, a Holder who exercises a Purchase Right with respect to
such Note shall be entitled to receive and shall receive accrued and
unpaid Interest on such Note from the preceding Interest Payment Date (or
such earlier date to which Interest was last paid) to, but
15
excluding the applicable Repurchase Date for such Note, which amount shall
be included in the applicable Repurchase Price thereof pursuant to Article
11.
(iii) In the event that a Note is converted pursuant to Article 12,
the Holder who converts such Note after a Regular Record Date but prior to
the corresponding Interest Payment Date shall not be entitled to receive
accrued and unpaid Interest on such Note from the preceding Interest
Payment Date until the Conversion Date, such amounts being deemed to have
been paid by receipt of shares of Common Stock in full rather than
canceled, extinguished or forfeited. As a result, a Holder which converts
a Note after a Regular Record Date but prior to the next succeeding
Interest Payment Date will receive accrued and unpaid Interest on such
Note for such period on such Interest Payment Date but will be required to
remit to the Company an amount equal to that Interest at the time such
Holder surrenders the Note for conversion pursuant to Article 12.
(f) In addition to the amounts set forth in Section 2.1(e), Holders
shall be entitled to receive Additional Interest, if any, on such Note pursuant
and subject to the Registration Rights Agreement, but in no event shall a Holder
be required to repay any Additional Interest such Holder receives following the
remittance of Interest as specified in Section 2.1(e)(iii). Additional Interest
shall be paid on dates corresponding to the payment date of Interest on such
Note pursuant to the Registration Rights Agreement.
(g) Payment of any Principal or Interest (to the extent paid in
cash) or Additional Interest, if any, on Global Notes shall be payable by the
Company to the Depositary in immediately available funds.
(h) Payment of any Principal on Physical Notes shall be made at the
office or agency of the Company maintained for such purpose, initially the
Corporate Trust Office of the Trustee. Interest and Additional Interest, if any,
on Physical Notes will be payable by (i) a U.S. Dollar check drawn on a U.S.
bank mailed to the address of the Person entitled thereto as such address shall
appear in the Register, or (ii) upon application to the Registrar not later than
the relevant Regular Record Date by a Holder of an aggregate Principal amount of
Notes in excess of $5,000,000, wire transfer in immediately available funds,
which application shall remain in effect until the Holder notifies, in writing,
the Registrar to the contrary.
(i) The Notes shall be purchased by the Company at the option of
Holders as provided in and subject to Article 11.
(j) The Notes shall be convertible at the option of the Holders as
provided in and subject to Article 12.
SECTION 2.2. Form of Notes.
(a) Except as otherwise provided pursuant to this Section 2.2, the
Notes are issuable in fully registered form, without coupons, in denominations
of $1,000 and integral multiples of $1,000 above that amount with applicable
legends as are provided for in Section 2.3 and in the form of one or more
permanent global securities, except as provided herein (each a "GLOBAL NOTE"
and, collectively, the "GLOBAL NOTES"), the form of which is contained in
Exhibit A hereto. The Notes shall not be issuable in bearer form. The terms and
provisions
16
contained in the form of Note shall constitute, and are hereby expressly made, a
part of this Indenture and to the extent applicable, the Company, and the
Trustee, by their execution and delivery of this Indenture, expressly agree to
such terms and provisions and to be bound thereby.
(b) The Notes are being offered and sold by the Company pursuant to
the Purchase Agreement. Notes offered and sold to QIBs in accordance with Rule
144A, as provided in the Purchase Agreement, shall be issued initially in the
form of one or more permanent global Notes in fully registered form without
interest coupons, substantially in the form of Exhibit A hereto, with the
applicable legends as provided in Section 2.3. Each Global Note shall be duly
executed by the Company and authenticated and delivered by the Trustee, and
shall be registered in the name of the Depositary or its nominee and retained by
the Trustee, as custodian. The aggregate principal amount of the Global Notes
may from time to time be increased or decreased by adjustments made on the
records of the Trustee, as custodian, and of the Depositary or its nominee, as
hereinafter provided.
(c) Physical Notes acquired by QIBs in accordance with Rule 144A may
be exchanged for interests in Global Notes pursuant to Sections 2.8(e) and
2.17(a) only. Physical Notes shall be duly executed by the Company and
authenticated and delivered by the Trustee.
SECTION 2.3. Legends.
(a) Restricted Securities Legends.
Each Note issued hereunder prior to the date two years after the
last date of original issuance of any Notes shall, upon issuance, bear the
legend set forth in Section 2.3(a)(i) (the "NOTE RESTRICTED SECURITIES LEGEND").
Until two years after the last date of original issuance date of any Note, any
stock certificate representing Common Stock issued upon conversion of a Note
that bears a Note Restricted Securities Legend shall bear the legend set forth
in Section 2.3(a)(ii) (the "COMMON STOCK RESTRICTED SECURITIES LEGEND", and,
together with the Note Restricted Securities Legend, each a "RESTRICTED
SECURITIES LEGEND"), and such legend shall not be removed except as provided in
Section 2.3(a)(iii). Each Note that bears or is required to bear a Note
Restricted Securities Legend set forth in Section 2.3(a)(i) (together with each
share of Common Stock issued upon conversion of such Note that bears or is
required to bear the Common Stock Restricted Securities Legend set forth in
Section 2.3(a)(ii), collectively, the "RESTRICTED SECURITIES") shall be subject
to the restrictions on transfer set forth in this Section 2.3(a) (including the
Restricted Securities Legends set forth below), and the Holder of each such
Restricted Security, by such Holder's acceptance thereof, shall be deemed to
have agreed to be bound by the restrictions on transfer set forth herein.
As used in Section 2.3(a), the term "transfer" encompasses any sale,
pledge, transfer or other disposition whatsoever of any Restricted Security.
(i) Restricted Securities Legend for Notes.
Except as provided in Section 2.3(a)(iii), until two years after the
last date of original issuance of any Note, any certificate evidencing such Note
(and all Notes issued in
17
exchange therefor or substitution thereof, other than shares of Common Stock, if
any, issued upon conversion thereof which shall bear the legend set forth in
Section 2.3(a)(ii), if applicable) shall bear a Restricted Securities Legend in
substantially the following form:
THE NOTE EVIDENCED BY THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS, AND MAY NOT BE OFFERED, SOLD, ASSIGNED, TRANSFERRED,
PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF EXCEPT AS SET FORTH IN THE
FOLLOWING SENTENCE. BY ACQUISITION HEREOF, THE HOLDER:
(1) REPRESENTS THAT IT IS A "QUALIFIED INSTITUTIONAL BUYER" AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT;
(2) REPRESENTS THAT IT IS PURCHASING FOR ITS OWN ACCOUNT OR THE
ACCOUNT OF ONE OR MORE QUALIFIED INSTITUTIONAL BUYERS IN ACCORDANCE
WITH RULE 144A;
(3) AGREES THAT IT WILL NOT WITHIN TWO YEARS AFTER THE ORIGINAL
ISSUANCE OF THIS NOTE RESELL OR OTHERWISE TRANSFER THE NOTE
EVIDENCED HEREBY OR THE COMMON STOCK ISSUABLE UPON CONVERSION OF
SUCH NOTE EXCEPT (A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, (B)
TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A
UNDER THE SECURITIES ACT, (C) PURSUANT TO THE EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF
AVAILABLE), OR (D) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS
BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT AND WHICH CONTINUES
TO BE EFFECTIVE AT THE TIME OF SUCH TRANSFER; AND
(4) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THE NOTE
EVIDENCED HEREBY IS TRANSFERRED (OTHER THAN A TRANSFER PURSUANT TO
CLAUSE 3(C) OR 3(D) ABOVE) A NOTICE SUBSTANTIALLY TO THE EFFECT OF
THIS LEGEND.
IN CONNECTION WITH ANY TRANSFER OF THE NOTE EVIDENCED HEREBY WITHIN TWO
YEARS AFTER THE LAST DATE OF ORIGINAL ISSUANCE OF SUCH NOTE (OTHER THAN A
TRANSFER PURSUANT TO CLAUSE 3(D) ABOVE), THE HOLDER MUST CHECK THE
APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF RELATING TO THE MANNER OF
SUCH TRANSFER AND SUBMIT THIS CERTIFICATE TO THE TRUSTEE (OR ANY SUCCESSOR
TRUSTEE, AS APPLICABLE). IF
18
THE PROPOSED TRANSFER IS PURSUANT TO CLAUSE 3(C) ABOVE, THE HOLDER MUST,
PRIOR TO SUCH TRANSFER, FURNISH TO THE TRUSTEE (OR ANY SUCCESSOR TRUSTEE,
AS APPLICABLE), SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION
AS THE COMPANY OR THE TRUSTEE MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH
TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION
NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THIS
LEGEND WILL BE REMOVED UPON THE EARLIER OF THE TRANSFER OF THE NOTE
EVIDENCED HEREBY PURSUANT TO CLAUSE 3(C) OR 3(D) ABOVE OR THE EXPIRATION
OF TWO YEARS FROM THE LAST DATE OF ORIGINAL ISSUANCE OF THE NOTE EVIDENCED
HEREBY.
(ii) Restricted Securities Legend for Common Stock Issued Upon
Conversion of the Notes.
Until two years after the last date of original issuance of any
Note, any stock certificate representing Common Stock issued upon conversion of
a Note that bears a Note Restricted Securities Legend shall bear a Common Stock
Restricted Securities Legend in substantially the following form:
THE SHARES OF COMMON STOCK EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY
STATE SECURITIES LAWS, AND MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED
STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS SET
FORTH IN THE FOLLOWING SENTENCE. THE HOLDER HEREOF AGREES THAT UNTIL THE
EXPIRATION OF TWO YEARS AFTER THE LAST DATE OF ORIGINAL ISSUANCE OF THE
NOTE UPON THE CONVERSION OF WHICH THE SHARES OF COMMON STOCK EVIDENCED
HEREBY WERE ISSUED:
(1) IT WILL NOT OFFER, SELL, ASSIGN, TRANSFER, PLEDGE, ENCUMBER OR
OTHERWISE DISPOSE OF THE SHARES EXCEPT (A) TO THE COMPANY OR ANY
SUBSIDIARY THEREOF, (B) FOR SO LONG AS THE SHARES ARE ELIGIBLE FOR
RESALE PURSUANT TO RULE 144A, TO A QUALIFIED INSTITUTIONAL BUYER IN
COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C) PURSUANT TO
THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE
SECURITIES ACT (IF AVAILABLE), OR (D) PURSUANT TO A REGISTRATION
STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT
AND WHICH CONTINUES TO BE EFFECTIVE AT THE TIME OF SUCH TRANSFER;
19
(2) PRIOR TO ANY SUCH TRANSFER PURSUANT TO CLAUSE 1(C) ABOVE, IT
WILL FURNISH TO SUCH TRANSFER AGENT (OR ANY SUCCESSOR TRANSFER
AGENT, AS APPLICABLE), SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER
INFORMATION AS THE TRANSFER AGENT OR THE COMPANY MAY REASONABLY
REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT; AND
(3) IT WILL DELIVER TO EACH PERSON TO WHOM THE SHARES OF COMMON
STOCK EVIDENCED HEREBY ARE TRANSFERRED (OTHER THAN A TRANSFER
PURSUANT TO CLAUSE 1(C) OR 1(D) ABOVE) A NOTICE SUBSTANTIALLY TO THE
EFFECT OF THIS LEGEND.
THIS LEGEND WILL BE REMOVED UPON THE EARLIER OF THE TRANSFER OF THE COMMON
STOCK EVIDENCED HEREBY PURSUANT TO CLAUSE 1(C) OR 1(D) ABOVE OR THE
EXPIRATION OF TWO YEARS FROM THE LAST DATE OF ORIGINAL ISSUANCE OF THE
NOTE UPON THE CONVERSION OF WHICH THE SHARES OF COMMON STOCK EVIDENCED
HEREBY WERE ISSUED. AS USED HEREIN, THE TERMS "UNITED STATES" AND "U.S.
PERSON" HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE
SECURITIES ACT.
(iii) Removal of the Restricted Securities Legends.
Each Note or share of Common Stock issued upon conversion of any
Note (other than shares of Common Stock issued upon conversion of a Note that
previously was sold (a) pursuant to a registration statement that has been
declared effective under the Securities Act and which continues to be effective
at the time of such sale or (b) in compliance with Rule 144 (if available))
shall bear the applicable Restricted Securities Legend set forth in Section
2.3(a)(i) or 2.3(a)(ii), as applicable, until the earlier of:
(A) the date which is two years after the last date of original
issuance of the Note; and
(B) the date such Note has, or such shares of Common Stock issued
upon conversion thereof have, been sold (I) pursuant to a
registration statement that has been declared effective under
the Securities Act (and which continues to be effective at the
time of such sale) or (II) in compliance with Rule 144 (if
available).
The Holder must give notice thereof to the Trustee, as applicable.
In the event Rule 144(k) as promulgated under the Securities Act is
amended to shorten the two-year period under Rule 144(k), then the references in
the restrictive legends set forth above to "TWO YEARS", and in the corresponding
transfer restrictions described above,
20
and in the Notes and the shares of Common Stock, will be deemed to refer to such
shorter period, from and after receipt by the Trustee of an Officers'
Certificate and an Opinion of Counsel to that effect. As soon as reasonably
practicable after the Company knows of the effectiveness of any such amendment
to shorten the two-year period under Rule 144(k), unless such changes would
otherwise be prohibited by, or would cause a violation of, the federal
securities laws applicable at the time, the Company will provide to the Trustee
an Officers' Certificate and an Opinion of Counsel as to the effectiveness of
such amendment and the effectiveness of such change to the restrictive legends
and transfer restrictions.
Notwithstanding the foregoing, the Restricted Securities Legend may
be removed if there is delivered to the Company such satisfactory evidence,
which may include an opinion of independent counsel, as may be reasonably
required by the Company that neither such legend nor the restrictions on
transfer set forth therein are required to ensure that transfers of such Notes
or Common Stock will not violate the registration requirements of the Securities
Act. Upon provision of such satisfactory evidence, the Trustee, at the written
direction of the Company, shall authenticate and deliver in exchange for such
Notes another Note or Notes having an equal aggregate principal amount that does
not bear such legend. If the Restricted Securities Legend has been removed from
a Note as provided above, no other Note issued in exchange for all or any part
of such Note shall bear such legend, unless the Company has reasonable cause to
believe that such other Note is a "restricted security" within the meaning of
Rule 144 and instructs the Trustee in writing to cause a Restricted Securities
Legend to appear thereon.
Any Note (or security issued in exchange or substitution thereof) as
to which such restrictions on transfer shall have expired in accordance with
their terms or as to which the conditions for removal of the Restricted
Securities Legend set forth in Section 2.3(a)(i) as set forth therein have been
satisfied may, upon surrender of such Note for exchange to the Registrar in
accordance with the provisions of Section 2.7 hereof, be exchanged for a new
Note or Notes, have an equal aggregate principal amount which shall not bear the
Restricted Securities Legend required by Section 2.3(a)(i).
Any such Common Stock as to which such restrictions on transfer
shall have expired in accordance with their terms or as to which the conditions
for removal of the Restricted Securities Legend set forth in Section 2.3(a)(ii)
as set forth therein have been satisfied may, upon surrender of the certificates
representing such shares of Common Stock for exchange in accordance with the
procedures of the Transfer Agent, be exchanged for a new certificate or
certificates for a like aggregate number of shares of Common Stock, which shall
not bear the Restricted Securities Legend required by Section 2.3(a)(ii).
(b) Global Note Legend.
Each Global Note shall also bear the following legend on the face
thereof:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY TO THE COMPANY OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS
21
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH
OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS TO
NOMINEES OF THE DEPOSITORY TRUST COMPANY OR TO A SUCCESSOR THEREOF
OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL
NOTE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE
RESTRICTIONS SET FORTH IN ARTICLE TWO OF THE INDENTURE REFERRED TO
ON THE REVERSE HEREOF.
SECTION 2.4. Execution, Authentication, Delivery and Dating of the
Notes.
(a) One Officer shall execute the Notes on behalf of the Company by
manual or facsimile signature. Notes bearing the manual or facsimile signatures
of individuals who were at the time of the execution of the Notes the proper
Officers of the Company shall bind the Company, notwithstanding that such
individuals or any of them have ceased to hold such offices prior to the
authentication and delivery of such Notes or did not hold such offices at the
date of authentication of such Notes.
(b) At any time and from time to time after the execution and
delivery of this Indenture, the Company may deliver Notes executed by the
Company to the Trustee for authentication, together with a Company Order for the
authentication and delivery of such Notes, and the Trustee in accordance with
such Company Order shall authenticate and deliver such Notes as provided in this
Indenture and not otherwise. No Note shall be entitled to any benefit under this
Indenture, or be valid or obligatory for any purpose, unless there appears on
such Note a certificate of authentication substantially in the form provided for
herein executed by or on behalf of the Trustee by manual signature, and such
certificate upon any Note shall be conclusive evidence, and the only evidence,
that such Note has been duly authenticated and delivered hereunder. The Trustee
may appoint an authenticating agent or agents reasonably acceptable to the
Company with respect to the Notes. Unless limited by the terms of such
appointment, an authenticating agent may authenticate Notes whenever the Trustee
may do so. Each reference in this Indenture to authentication by the Trustee
includes authentication by such agent.
(c) Each Note shall be dated the date of its authentication. The
Trustee shall authenticate and deliver Notes for original issue in an aggregate
principal amount of up to $40,000,000 (or $46,000,000 if the Initial Purchaser's
option to purchase additional Notes as
22
forth in Section 2 of the Purchase Agreement is exercised in full) upon one or
more Company Orders without any further action by the Company.
SECTION 2.5. Registrar and Paying Agent.
The Company shall maintain an office or agency where Notes may be
presented for registration of transfer or for exchange (the "REGISTRAR") and an
office or agency where Notes may be presented for payment (the "PAYING AGENT").
The Registrar shall keep a register of the Notes (the "REGISTER") and of their
transfer and exchange. The Company may appoint one or more co-Registrars and one
or more additional Paying Agents for the Notes. The term "Paying Agent" includes
any additional paying agent and the term "Registrar" includes any additional
registrar. The Company may change any Paying Agent or Registrar without prior
notice to any Holder.
The Company will cause each Paying Agent (other than the Trustee) to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject to the provisions of this Section, that
such Paying Agent will:
(a) hold all sums of money or Common Stock held by it for the
payment of any amounts due and payable in respect of the Notes in trust
for the benefit of the Persons entitled thereto until such sums shall be
paid to such Persons or otherwise disposed of as provided in this
Indenture;
(b) give the Trustee notice of any Default by the Company in the
making of any such payment; and
(c) at any time during the continuance of any such Default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so
held in trust by such Paying Agent.
The Company shall give prompt written notice to the Trustee of the
name and address of any Paying Agent who is not a party to this Indenture. If
the Company fails to appoint or maintain another entity as Registrar or Paying
Agent, the Trustee shall act as such.
The Company hereby initially appoints the Trustee, as Registrar and
Paying Agent for the Notes.
SECTION 2.6. Paying Agent to Hold Assets in Trust.
Prior to 11:00 a.m., New York City time, on each due date for any
payments in respect of any Note, the Company shall deposit a sum of money in
immediately available funds sufficient to make such payments when so becoming
due or, in the case of the first four scheduled Interest payments on the Notes,
if the Company so elects, direct the Trustee to release from the Pledge Account
a sum sufficient to pay such Interest so becoming due. The Company
23
at any time may require a Paying Agent to pay all money held by it to the
Trustee. Upon payment over to the Trustee, the Paying Agent (if other than the
Company) shall have no further liability for the money so paid over to the
Trustee.
If the Company shall act as a Paying Agent, it shall, prior to or on
each such due date, segregate and hold in trust for the benefit of the Holders a
sum sufficient with monies held by all other Paying Agents, to pay such amounts
so becoming due until such sums shall be paid to such Persons or otherwise
disposed of as provided in this Indenture. Upon any bankruptcy or reorganization
of the Company, the Trustee shall act as Paying Agent.
SECTION 2.7. General Provisions Relating to Registration, Transfer
and Exchange.
The Notes are issuable only in registered form. A Holder may
transfer a Note only by written application to the Registrar stating the name of
the proposed transferee and otherwise complying with the terms of this
Indenture. No such transfer shall be effected until, and such transferee shall
succeed to the rights of a Holder only upon, final acceptance and registration
of the transfer by the Registrar in the Register. Furthermore, any Holder of a
Global Note shall, by acceptance of such Global Note, agree that transfers of
beneficial interests in such Global Note may be effected only through a
book-entry system maintained by the Holder of such Global Note (or its agent)
and that ownership of a beneficial interest in the Global Note shall be required
to be reflected in a book-entry. Notwithstanding the foregoing, in the case of a
Restricted Security, a beneficial interest in a Global Note that is transferred
in reliance on an exemption from the registration requirements of the Securities
Act other than in accordance with Rule 144 or Rule 144A may only be transferred
for a Physical Note.
When Notes are presented to the Registrar with a request to register
the transfer or to exchange them for an equal principal amount of Notes of other
authorized denominations, the Registrar shall register the transfer or make the
exchange as requested if the requirements hereunder for such transactions are
met (including that such Notes are duly endorsed or accompanied by a written
instrument of transfer duly executed by the Holder thereof or by an attorney who
is authorized in writing to act on behalf of the Holder). Subject to Section
2.4, to permit registrations of transfers and exchanges, the Company shall
execute and the Trustee shall authenticate Notes at the Registrar's request. No
service charge shall be made for any registration of transfer or exchange of the
Notes, but the Company may require payment of a sum sufficient to cover any
transfer tax or similar governmental charge payable in connection therewith
(other than any such transfer taxes or other similar governmental charge payable
upon exchanges pursuant to Sections 2.13 or 7.5).
Neither the Company nor the Registrar shall be required to exchange
or register a transfer of any Notes surrendered for conversion or, if a portion
of any Note is surrendered for conversion, such portion thereof surrendered for
conversion.
The Trustee shall have no obligation or duty to monitor, determine
or inquire as to compliance with any restrictions on transfer imposed under this
Indenture or under applicable law with respect to any transfer of any interest
in any Note (including any transfers between or among Agent Members or
beneficial owners of interests in any Global Note) other than to
24
require delivery of such certificates and other documentation or evidence as are
expressly required by, and to do so if and when expressly required by the terms
of, this Indenture, and to examine the same to determine substantial compliance
as to form with the express requirements hereof.
SECTION 2.8. Book-Entry Provisions for the Global Notes.
(a) The Global Notes initially shall:
(i) be registered in the name of the Depositary;
(ii) be delivered to the Trustee as custodian for such
Depositary, for credit to the accounts of the members of, and
participants in, the Depositary (the "AGENT MEMBERS") holding the
Notes evidenced thereby; and
(iii) bear the Restricted Securities Legend set forth in
Section 2.3(a)(i) until such time as such Restricted Securities
Legend may be removed in accordance with Section 2.3.
(b) Agent Members shall have no rights under this Indenture with
respect to any Global Note held on their behalf by the Depositary, or the
Trustee as its custodian, or under such Global Note, 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 Note for all purposes
whatsoever. Notwithstanding the foregoing, nothing contained herein shall
prevent the Company, the Trustee or any agent of the Company or Trustee
from giving effect to any written certification, proxy or other
authorization furnished by the Depositary or impair, as between the
Depositary and the Agent Members, the operation of customary practices
governing the exercise of the rights of a Holder of any Note.
(c) The registered Holder of a Global Note may grant proxies and
otherwise authorize any Person, including Agent Members and Persons that
may hold interests through Agent Members, to take any action that a Holder
is entitled to take under this Indenture or the Notes.
(d) A Global Note may not be transferred, in whole or in part, to
any Person other than the Depositary, and no such transfer to any such
other Person may be registered. Beneficial interests in a Global Note may
be transferred in accordance with the rules and procedures of the
Depositary and the provisions of Section 2.17 hereof.
(e) If at any time:
(i) the Depositary notifies the Company in writing that it is
no longer willing or able to continue to act as Depositary for the
Global Notes, or the Depositary ceases to be a "clearing agency"
registered under the Exchange Act and a successor depositary for the
Global Notes is not appointed by the Company within 90 days of such
notice or cessation;
25
(ii) the Company, at its option, notifies the Trustee in
writing that it elects to cause the issuance of the Physical Notes
under this Indenture in exchange for all or any part of the Notes
represented by a Global Note or Global Notes; or
(iii) an Event of Default has occurred and is continuing and
the Registrar has received a request from the Depositary for the
issuance of Physical Notes in exchange for such Global Note or
Global Notes,
then the Depositary shall surrender such Global Note or Global Notes to
the Trustee for cancellation and the Company shall execute, and the
Trustee, upon receipt of an Officers' Certificate and Company Order for
the authentication and delivery of Notes, shall authenticate and deliver
in exchange for such Global Note or Global Notes, Physical Notes in an
aggregate principal amount equal to the aggregate principal amount of such
Global Note or Global Notes. Such Physical Notes shall be registered in
such names as the Depositary shall identify in writing as the beneficial
owners of the Notes represented by such Global Note or Global Notes (or
any nominee thereof).
(f) Notwithstanding the foregoing, in connection with any transfer
of beneficial interests in a Global Note to the beneficial owners thereof
pursuant to Section 2.8(d) hereof, the Registrar shall reflect on its
books and records, and the custodian shall reflect on its books and
records and the schedule to the Global Note, the date and a decrease in
the aggregate principal amount of such Global Note in an amount equal to
the aggregate principal amount of the beneficial interest in such Global
Note to be transferred.
SECTION 2.9. Holder Lists.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Holders and shall otherwise comply with Section 312(a) of the TIA. If the
Trustee is not the Registrar, the Company shall furnish to the Trustee prior to
or on each Interest Payment Date and at such other times as the Trustee may
request in writing a list in such form and as of such date as the Trustee may
reasonably require of the names and addresses of Holders relating to such
Interest Payment Date or request, as applicable.
SECTION 2.10. Persons Deemed Owners.
Prior to due presentment of a Note for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name such Note is registered as the owner of such Note for the
purpose of receiving payment of principal of the Note or the payment of any
Repurchase Price in respect thereof and any Interest and Additional Interest
thereon, for any purpose under this Indenture, whether or not such Note is
overdue, and neither the Company, the Trustee nor any agent of the Company or
the Trustee shall be affected by notice to the contrary.
SECTION 2.11. Mutilated, Destroyed, Lost or Stolen Notes.
26
If any mutilated Note is surrendered to the Trustee, the Company
shall execute and the Trustee shall authenticate and deliver in exchange
therefor a new Note with the same aggregate principal amount and bearing a
number not contemporaneously outstanding.
If there is delivered to the Company and the Trustee:
(a) evidence to their satisfaction of the destruction, loss or theft
of any Note, and
(b) such security or indemnity as may be required by them to save
each of them and any agent of either of them harmless, then, in the
absence of actual notice to the Company or the Trustee that such Note has
been acquired by a bona fide purchaser, the Company shall execute and,
upon request, the Trustee shall authenticate and deliver, in lieu of any
such destroyed, lost or stolen Note, a new Note of like tenor and
principal amount, and bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Note has
become or is about to become due and payable, the Company in its discretion, but
subject to any conversion rights, may, instead of issuing a new Note, pay such
Note, upon satisfaction of the condition set forth in the preceding paragraph.
Upon the issuance of any new Note under this Section, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Note issued pursuant to this Section 2.11 in lieu of any
destroyed, lost or stolen Note shall constitute an original contractual
obligation of the Company, whether or not the destroyed, lost or stolen Note
shall be at any time enforceable by anyone, and such new Note shall be entitled
to all the benefits of this Indenture equally and proportionately with any and
all other Notes duly issued hereunder.
The provisions of this Section 2.11 are exclusive and shall preclude
(to the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Notes.
SECTION 2.12. Treasury Notes.
In determining whether the Holders of the requisite principal amount
of Outstanding Notes have given any request, demand, authorization, direction,
notice, consent or waiver hereunder, Notes owned by the Company or any Affiliate
of the Company shall be disregarded and deemed not to be Outstanding, except
that, in determining whether the Trustee shall be protected in relying upon any
such request, demand, authorization, direction, notice, consent or waiver, only
such Notes of which the Trustee has received written notice and are so owned
shall be so disregarded.
SECTION 2.13. Temporary Notes.
27
Pending the preparation of Notes in definitive form, the Company may
execute and the Trustee shall, upon written request of the Company, authenticate
and deliver temporary Notes (printed or lithographed). Temporary Notes shall be
issuable in any authorized denomination, and substantially in the form of the
Notes in definitive form but with such omissions, insertions and variations as
may be appropriate for temporary Notes, all as may be determined by the Company.
Every such temporary Note shall be executed by the Company and authenticated by
the Trustee upon the same conditions and in substantially the same manner, and
with the same effect, as the Notes in definitive form. Without unreasonable
delay, the Company will execute and deliver to the Trustee Notes in definitive
form (other than in the case of Notes in global form) and thereupon any or all
temporary Notes (other than any such Notes in global form) may be surrendered in
exchange therefor, at each office or agency maintained by the Company pursuant
to Section 9.2 and the Trustee shall authenticate and deliver in exchange for
such temporary Notes an equal principal amount of Notes in definitive form. Such
exchange shall be made by the Company at its own expense and without any charge
therefor. Until so exchanged, the temporary Notes shall in all respects be
entitled to the same benefits and subject to the same limitations under this
Indenture as Notes in definitive form authenticated and delivered hereunder.
SECTION 2.14. Cancellation.
All Notes surrendered for payment, purchase, conversion,
registration of transfer or exchange shall, if surrendered to any Person other
than the Trustee, be delivered to the Trustee. All Notes so delivered shall be
canceled promptly by the Trustee, and no Notes shall be issued in lieu thereof
except as expressly permitted by any of the provisions of this Indenture. Upon
written instructions of the Company, the Trustee shall dispose of canceled Notes
in accordance with its procedures for the disposition of cancelled securities in
effect as of the date of such disposition. If the Company shall acquire any of
the Notes, such acquisition shall not operate as satisfaction of the
Indebtedness represented by such Notes unless the same are delivered to the
Trustee for cancellation.
SECTION 2.15. CUSIP Numbers.
The Company in issuing the Notes may use "CUSIP" numbers (if then
generally in use), and, if CUSIP numbers are used, then the Trustee shall use
CUSIP numbers in notices as a convenience to Holders; provided that any such
notice shall state that no representation is made as to the correctness of such
numbers either as printed on the Notes or as contained in any such notice and
that reliance may be placed only on the other identification numbers printed on
the Notes. The Company shall promptly notify the Trustee of any change in the
CUSIP numbers.
SECTION 2.16. Defaulted Interest.
If the Company fails to make a payment of Principal of or Interest
and Additional Interest, if any, on any Note when due and payable, it shall pay
Interest on such amounts (to the extent lawful), which shall be calculated using
the Interest Rate (such amounts, the "DEFAULTED INTEREST"). It may elect to pay
such Defaulted Interest, plus any other overdue Interest payable on it, to the
Persons who are Holders on which the Interest is due on a subsequent special
record date. The Company shall notify the Trustee in writing of the amount of
Defaulted Interest the
28
Company proposes to pay on each such Note. The Company shall fix any such
special record date and payment date for such payment. At least 15 days before
any such special record date, the Company shall mail to Holders affected thereby
a notice that states the special record date, the payment date and amount to be
paid.
SECTION 2.17. Transfer Provisions.
Unless a Note is (i) transferred in compliance with Rule 144 or
after the time period referred to in Rule 144(k) under the Securities Act or
(ii) sold pursuant to a registration statement that has been declared effective
under the Securities Act (and which continues to be effective at the time of
such sale), the following provisions shall apply to any sale, pledge or other
transfer of Notes:
(a) Transfer of Notes.
The following provisions shall apply with respect to the
registration of any proposed transfer of Notes to a QIB:
(i) If the Notes to be transferred consist of a beneficial interest
in the Global Notes, the transfer of such interest may be effected only
through the book-entry systems maintained by the Depositary.
(ii) If the Notes to be transferred consist of Physical Notes, the
Registrar shall register the transfer if such transfer is being made by a
proposed transferor who has checked the box provided for on the form of
Note stating (or has otherwise advised the Company and the Registrar in
writing) that the sale has been made in compliance with the provisions of
Rule 144A to a transferee who has signed the certification provided for on
the form of Note stating or has otherwise advised the Company and the
Registrar in writing that:
(A) it is purchasing the Notes for its own account or an account
with respect to which it exercises sole investment discretion,
in each case for investment and not with a view to
distribution;
(B) it and any such account is a QIB within the meaning of Rule
144A;
(C) it is aware that the sale to it is being made in reliance on
Rule 144A;
(D) it acknowledges that it has received such information
regarding the Company as it has requested pursuant to Rule
144A or has determined not to request such information; and
(E) it is aware that the transferor is relying upon its foregoing
representations in order to claim the exemption from
registration provided by Rule 144A.
In addition, to the extent that the transferee wishes to take
delivery in the form of an interest in the Global Note, the Registrar shall
reflect on its books and records the date and an increase in the principal
amount of the Global Note in an amount equal to the aggregate principal
29
amount of the Physical Notes to be transferred, and the Trustee shall cancel the
Physical Notes so transferred. To the extent that the transferee wishes to take
delivery in the form of a new Physical Note, the Registrar shall reflect on its
books and records the date and issuance of a new Physical Note registered in the
name of the transferee in an amount equal to the aggregate principal amount of
the Physical Notes to be transferred, and the Trustee shall cancel the Physical
Notes so transferred.
(b) Other Exchanges.
In the event that Global Notes are exchanged for Notes in definitive
registered form pursuant to Section 2.7 prior to the effectiveness of a Shelf
Registration Statement with respect to such Notes, such Notes may be exchanged
only in accordance with the provisions of clause (a) above (including the
certification requirements intended to ensure that such transfers comply with
Rule 144A) and such other procedures as may from time to time be adopted by the
Company.
(c) General.
By its acceptance of any Note or shares of Common Stock issuable
upon conversion of the Notes bearing the Restricted Securities Legend, each
Holder of such Note or shares of Common Stock acknowledges the restrictions on
transfer of such Note or shares of Common Stock set forth in this Indenture and
agrees that it will transfer such Note and such Common Stock only as provided in
this Indenture. The Registrar shall not register a transfer of any Note unless
such transfer complies with the restrictions on transfer of such Note set forth
in this Indenture and any Restricted Securities Legend on such Note. The
Registrar shall be entitled to receive and conclusively rely on written
instructions from the Company verifying that such transfer complies with such
restrictions on transfer. In connection with any transfer of Notes, each Holder
agrees by its acceptance of the Notes to furnish the Registrar or the Company
such certifications, legal opinions or other information as either of them may
reasonably require to confirm that such transfer is being made pursuant to an
exemption from, or a transaction not subject to, the registration requirements
of the Securities Act; provided that the Registrar shall not be required to
determine (but may conclusively rely on a determination made by the Company with
respect to) the sufficiency of any such certifications, legal opinions or other
information.
The Registrar shall retain copies of all certifications, letters,
notices and other written communications received pursuant to Section 2.8 hereof
or this Section 2.17 in accordance with its customary procedures for the
retention of records relating to the transfer of securities. The Company shall
have the right to inspect and make copies of all such certifications, letters,
notices or other written communications at any reasonable time upon the giving
of reasonable written notice to the Registrar.
SECTION 2.18. Additional Interest Under the Registration Rights
Agreement.
Under certain circumstances, the Company may be obligated to pay
Additional Interest to Holders, all as and to the extent set forth in the
Registration Rights Agreement. The
30
terms thereof are hereby incorporated herein by reference and such Additional
Interest is deemed to be interest for purposes of this Indenture.
ARTICLE 3
DISCHARGE OF INDENTURE
SECTION 3.1. Discharge of Liability on Notes.
When (a) the Company delivers to the Trustee all Outstanding Notes
(other than Notes replaced pursuant to Section 2.11) for cancellation, (b) all
Outstanding Notes have become due and payable at their Stated Maturity or all
Outstanding Notes converted and the Company deposits with the Trustee cash and,
in the event of possible conversions pursuant to Article 12, Common Stock,
sufficient to pay all amounts due and owing on, and to satisfy all other
obligations of the Company with respect to, all Outstanding Notes on or before
the Stated Maturity (other than Notes replaced pursuant to Section 2.11) or (c)
when no Notes are Outstanding, and if in any such case the Company pays all
other sums payable hereunder by the Company, then this Indenture shall, subject
to Section 5.8, cease to be of further effect. The Trustee shall join in the
execution of a document prepared by the Company acknowledging satisfaction and
discharge of this Indenture on demand of the Company accompanied by an Officers'
Certificate and Opinion of Counsel and at the cost and expense of the Company.
SECTION 3.2. Repayment to the Company.
The Trustee and the Paying Agent shall return to the Company upon
written request any money or securities held by them for the payment of any
amount with respect to the Notes that remains unclaimed for two years, subject
to applicable unclaimed property law. After return to the Company, Holders
entitled to the money or securities must look to the Company for payment as
general creditors unless an applicable abandoned property law designates another
Person and the Trustee and the Paying Agent shall have no further liability to
the Holders with respect to such money or securities for that period commencing
after the return thereof.
ARTICLE 4
DEFAULTS AND REMEDIES
SECTION 4.1. Events of Default.
An "EVENT OF DEFAULT", wherever used herein, means any one of the
following events (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body):
(a) the Company fails to convert Notes into shares of its Common
Stock and/or cash consistent with the the settlement elections made by the
Company pursuant to Section 12.12 or as otherwise may be required pursuant to
Section 12.1(b) and such failure continues for 10 days after written notice of
default is given to the Company by the Trustee or to the Company and the Trustee
by the Holder of such Note;
31
(b) the Company defaults in the payment of the Principal amount of
any Outstanding Note (a "DEFAULTED Payment") when the same becomes due and
payable at its Stated Maturity, upon exercise of a Purchase Right or otherwise;
(c) subject to Section 8.1(b), the Company defaults in the payment
of Interest or Additional Interest, if any, on any Note when it becomes due and
payable and such default continues for a period of 30 days;
(d) the Company fails to provide notice of the occurrence of a
Fundamental Change on a timely basis;
(e) the Company fails to perform or observe any other term, covenant
or agreement contained in the Notes or this Indenture and the default continues
for a period of 60 days after written notice of such failure, requiring the
Company to remedy the same, shall have been given to the Company by the Trustee
or to the Company and the Trustee by the Holders of at least 25% in aggregate
principal amount of the Outstanding Notes;
(f) a default occurs under any Indebtedness for money borrowed by
the Company or any of its Subsidiaries that is a Significant Subsidiary or any
group of two or more Subsidiaries that, taken as a whole, would constitute a
Significant Subsidiary, the aggregate outstanding principal amount of which is
in an amount in excess of $5 million, for a period of 30 days after written
notice to the Company by the Trustee or to the Company and the Trustee by
Holders of at least 25% in aggregate principal amount of the Outstanding Notes,
which default (i) is caused by a failure to pay when due principal or interest
on such Indebtedness by the end of the applicable grace period, if any, unless
such Indebtedness is discharged or (ii) results in the acceleration of such
Indebtedness because of a default with respect to such Indebtedness without such
Indebtedness having been discharged or such non-payment or acceleration having
been cured, waived, rescinded or annulled;
(g) any of the following occurs in respect of the Company or any of
its Subsidiaries that is a Significant Subsidiary or any group of two or more
Subsidiaries that, taken as a whole, would constitute a Significant Subsidiary:
(i) the entry by a court having jurisdiction in the premises of a decree or
order for relief, in an involuntary case or proceeding under any applicable U.S.
federal or state bankruptcy, insolvency, reorganization or other similar law; or
(ii) the entry by a court having jurisdiction in the premises of a decree or
order adjudging such Person or Persons a bankrupt or insolvent, or approving as
properly filed a petition seeking reorganization, arrangement, adjustment or
composition of or in respect of such Person or Persons under any applicable U.S.
federal or state law, or appointing a custodian, receiver, liquidator, assignee,
trustee, sequestrator or other similar official of such Person or Persons or of
any substantial part of its or their property, or ordering the winding up or
liquidation of its or their affairs; or
(h) the Company or any of its Subsidiaries that is a Significant
Subsidiary or any group of two or more Subsidiaries that, taken as a whole,
would constitute a Significant Subsidiary, takes any of the following actions:
(i) commences a voluntary case or proceeding under any applicable U.S. federal
or state bankruptcy, insolvency, reorganization or other similar law; (ii)
consents to the entry of a decree or order for relief in respect of itself in an
involuntary
32
case or proceeding under any applicable U.S. federal or state bankruptcy,
insolvency, reorganization or other similar law or to the commencement of any
bankruptcy or insolvency case or proceeding against it of a petition or answer
or consent seeking reorganization or relief under any applicable U.S. federal or
state law in the context of a bankruptcy, insolvency or reorganization
proceeding; (iii) consents to the filing of a petition described in clause (ii)
above or to the appointment of or the taking possession by a custodian,
receiver, liquidator, assignee, trustee, sequestrator or other similar official
of such Person or Persons or of any substantial part of its or their property;
(iv) the making of an assignment for the benefit of creditors; (v) the admission
in writing by such Person or Persons of its inability to pay its debts generally
as they become due; or (vi) the taking of corporate action by such Person or
Persons expressly in furtherance of any action described in clause (i) through
(v) above; or
(i) the Pledge Agreement or the Control Agreement ceases to be in
full force and effect, or enforceable, prior to the expiration thereof in
accordance with its terms.
A Default under clause (e) or (f) above is not an Event of Default
until the Trustee notifies the Company, or the Holders of at least 25% of the
principal amount of the Notes at the time Outstanding notify the Company and the
Trustee, of the Default and the Company does not cure such Default (and such
Default is not waived) within the time specified in clause (e) or (f) above
after actual receipt of such notice. Any such notice must specify the Default,
demand that it be remedied and state that such notice is a "Notice of Default".
The Trustee shall, within 90 days of a Responsible Officer becoming
aware of the occurrence of a Default, give to the Holders notice of all uncured
Defaults known to it and written notice of any event which with the giving of
notice or the lapse of time, or both, would become an Event of Default, its
status and what action the Company is taking or proposes to take with respect
thereto; provided, however, the Trustee shall be protected in withholding such
notice if it, in good faith, determines that the withholding of such notice is
in the best interest of such Holders, except in the case of a Default in the
payment of the Principal of or Interest or Additional Interest, if any, on any
of the Notes when due or in the payment of any Fundamental Change Purchase
Price.
SECTION 4.2. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default with respect to Outstanding Notes (other than
an Event of Default specified in Section 4.1(g) or 4.1(h) hereof) occurs and is
continuing, the Trustee or the Holders of at least 25% in principal amount of
the Outstanding Notes, by written notice to the Company and the Trustee, may
declare due and payable 100% of the principal amount of all Outstanding Notes,
plus any accrued and unpaid Interest and Additional Interest to the date of
payment. Upon a declaration of acceleration, such Principal amount, and accrued
and unpaid Interest and Additional Interest to the date of payment shall be
immediately due and payable.
If an Event of Default specified in Section 4.1(g) and 4.1(h)
occurs, the Principal and accrued and unpaid Interest and Additional Interest,
if any, on the Outstanding Notes shall become and be immediately due and
payable, without any declaration or other act on the part of the Trustee or any
Holder.
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The Holders of not less than a majority of the principal amount of
the Outstanding Notes, may, through notice to the Trustee on behalf of the
Holders of all of the Notes, rescind and annul an acceleration and its
consequences (including waiver of any defaults) if:
(a) all existing Events of Default, other than the nonpayment of a
Defaulted Payment on the Notes which has become due solely because of the
acceleration, have been remedied, cured or waived, and
(b) the rescission would not conflict with any judgment or decree of
a court of competent jurisdiction;
provided, however, that in the event such declaration of acceleration has been
made based on the existence of an Event of Default under Section 4.1(f) and the
default with respect to Indebtedness for money borrowed which gave rise to such
Event of Default has been remedied, cured or waived, then, without any further
action by the Holders, such declaration of acceleration shall be rescinded
automatically and the consequences of such declaration shall be annulled. No
such rescission or annulment shall affect any subsequent Default or impair any
right consequent thereon.
SECTION 4.3. Other Remedies.
If an Event of Default with respect to Outstanding Notes occurs and
is continuing, the Trustee may pursue any available remedy by proceeding at law
or in equity to collect the Defaulted Payment or Interest and Additional
Interest, if any, due and payable on the Notes or to enforce the performance of
any provision of the Notes.
The Trustee may maintain a proceeding in which it may prosecute and
enforce all rights of action and claims under this Indenture or the Notes, even
if it does not possess any of the Notes or does not produce any of them in the
proceeding.
SECTION 4.4. Waiver of Past Defaults.
The Holders, through the written consent of not less than a majority
of the principal amount of the Outstanding Notes, may, on behalf of the Holders
of all of the Notes, waive an existing Default or Event of Default, except a
Default or Event of Default:
(a) set forth in Sections 4.1(b) and (c), provided, however, that
subject to Section 4.7, the Holders of a majority of the principal amount
of the Outstanding Notes may rescind an acceleration and its consequences,
including any related payment default that resulted from such
acceleration; or
(b) in respect of a covenant or provision hereof which, under
Section 7.2 hereof, cannot be modified or amended without the consent of
the Holders of each Outstanding Note affected.
Upon any such waiver, such Default shall cease to exist, and any
Event of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture;
34
provided, however, that no such waiver shall extend to any subsequent or other
Default or impair any right consequent thereon.
SECTION 4.5. Control by Majority.
The Holders of a majority of the principal amount of the Outstanding
Notes shall have the right to 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 the Trustee. However, the Trustee may refuse to follow any
direction that:
(a) conflicts with any law or with this Indenture;
(b) the Trustee determines may be unduly prejudicial to the rights
of the Holders not joining therein; or
(c) may expose the Trustee to personal liability.
The Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction.
SECTION 4.6. Limitation on Suit.
No Holder shall have any right to pursue any remedy with respect to
this Indenture or the Notes (including instituting any proceeding, judicial or
otherwise, with respect to this Indenture or for the appointment of a receiver
or trustee) unless:
(a) such Holder has previously given written notice to the Trustee
of an Event of Default that is continuing;
(b) the Holders of at least 25% of the principal amount of the
Outstanding Notes shall have made written request to the Trustee to pursue
the remedy;
(c) such Holder or Holders have offered to the Trustee indemnity
satisfactory to it against any costs, expenses and liabilities incurred in
complying with such request;
(d) the Trustee has failed to comply with the request for 60 days
after its receipt of such notice, request and offer of indemnity; and
(e) during such 60-day period, no direction inconsistent with such
written request has been given to the Trustee by the Holders of a majority
of the principal amount of the Outstanding Notes;
35
provided, however, that no one or more of such Holders may use this Indenture to
prejudice the rights of another Holder or to obtain preference or priority over
another Holder.
SECTION 4.7. Unconditional Rights of Holders to Receive Payment and
to Convert.
Notwithstanding any other provision in this Indenture, the Holder of
any Note shall have the right, which is absolute and unconditional, to receive
payment of the Principal of and Interest and Additional Interest, if any, in
respect of the Notes held by such Holder, on or after the respective due dates,
to convert the Notes in accordance with Article 12 or to bring suit for the
enforcement of any such payment on or after such respective dates or the right
to convert, and such rights shall not be impaired or affected adversely without
the consent of such Holder.
SECTION 4.8. Collection of Indebtedness and Suits for Enforcement by
the Trustee.
The Company covenants that if:
(a) a Default or Event of Default is made in the payment of Interest
and Additional Interest, if any, on any Note when such Interest and
Additional Interest, if any, becomes due and payable and such Default or
Event of Default continues for a period of 30 days; or
(b) a Default or Event of Default is made in the payment of the
Principal on any Note when the same becomes due and payable at its Stated
Maturity, upon declaration when due for purchase by the Company or
otherwise,
then the Company will, upon demand of the Trustee, pay to it, for the benefit of
the Holders of such Notes, the entire Principal then due and payable (as
expressed therein or as a result of any acceleration effected pursuant to
Section 4.2 hereof) on such Notes for any such amounts and, to the extent
legally enforceable, Interest or Additional Interest, if any, on such Notes,
and, in addition thereto, such further amount as shall be sufficient to cover
the costs and expenses of collection, including the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel.
If the Company fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, may
prosecute such proceeding to judgment or final decree and may enforce the same
against the Company and collect the monies adjudged or decreed to be payable in
the manner provided by law out of the property of the Company, wherever
situated.
If an Event of Default occurs and is continuing, the Trustee may in
its discretion proceed to protect and enforce its rights and the rights of the
Holders by such appropriate judicial
36
proceedings as the Trustee shall deem most effectual to protect and enforce any
such rights, whether for the specific enforcement of any covenant or agreement
in this Indenture or in aid of the exercise of any power granted herein, or to
enforce any other proper remedy.
SECTION 4.9. Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or
other judicial proceeding relative to the Company or the property of the Company
or its creditors, the Trustee (irrespective of whether the Principal, Interest
and Additional Interest, if any, shall then be due and payable as therein
expressed or by declaration or otherwise and irrespective of whether the Trustee
shall have made any demand on the Company for the payment of any such amount)
shall be entitled and empowered, by intervention in such proceeding or
otherwise:
(a) to file and prove a claim for the whole amount of the Principal
or Interest and Additional Interest, if any, owing and unpaid in respect
of the Notes and to file such other papers or documents as may be
necessary or advisable in order to have the claims of the Trustee
(including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and of
the Holders allowed in such judicial proceeding and
(b) to collect and receive any monies, Common Stock or other
property payable or deliverable on any such claim and to distribute the
same,
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceedings is hereby authorized by
each Holder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the Holders, to
pay to the Trustee any amount due to it for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel and
any other amounts due the Trustee under Section 5.8.
Nothing contained herein shall be deemed to authorize the Trustee to
authorize or consent to or accept, or adopt on behalf of any Holder, any plan of
reorganization, arrangement, adjustment or composition affecting the Notes or
the rights of any Holder thereof or to authorize the Trustee to vote in respect
of the claim of any Holder in any such proceeding.
SECTION 4.10. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to
enforce any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Company, the Trustee and the Holders shall
be restored severally and respectively to their former positions hereunder and
thereafter all rights and remedies of the Trustee and the Holders shall continue
as though no such proceeding had been instituted.
37
SECTION 4.11. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Notes in the last paragraph of
Section 2.11, no right or remedy conferred in this Indenture upon or reserved to
the Trustee or to the Holders is intended to be exclusive of any other right or
remedy, and every right and remedy shall, to the extent permitted by applicable
law, be cumulative and in addition to every other right and remedy given
hereunder or hereafter existing at law or in equity or otherwise. The assertion
or employment of any right or remedy hereunder, or otherwise, shall not prevent
the concurrent assertion or employment of any other appropriate right or remedy.
SECTION 4.12. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder to exercise any
right or remedy accruing upon any Event of Default shall impair any such right
or remedy or constitute a waiver of any such Event of Default or any
acquiescence therein. Every right and remedy given by this Article or by law to
the Trustee or to the Holders may be exercised from time to time, and as often
as may be deemed expedient, by the Trustee or by the Holders, as applicable.
SECTION 4.13. Priorities.
Any money and property collected by the Trustee pursuant to this
Article shall be applied in the following order, at the date or dates fixed by
the Trustee:
FIRST: to the payment of all amounts due to the Trustee under
Section 5.8;
SECOND: to Holders for amounts due and unpaid on the Notes for the
Principal or Interest or Additional Interest, if any, as applicable,
ratably, without preference or priority of any kind, according to such
amounts due and payable on the Notes (including, without limitation,
amounts due and property deliverable in relation to conversions of the
Notes); and
THIRD: any remaining amounts shall be repaid to the Company.
The Trustee may fix a special record date and payment date for any
payment to Holders pursuant to this Section 4.13. At least 15 days before such
special record date, the Trustee shall mail to each Holder and the Company a
notice that states the special record date, the payment date and the amount to
be paid.
SECTION 4.14. Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any Note by
such Holder's acceptance thereof shall be deemed to have agreed, that any court
may in its discretion require, in any suit for the enforcement of any right or
remedy under this Indenture, or in any suit against
38
the Trustee for any action taken, suffered or omitted by it as Trustee, the
filing by any party litigant in such suit of an undertaking to pay the costs of
such suit, and that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees, against any party litigant in such suit,
having due regard to the merits and good faith of the claims or defenses made by
such party litigant; but the provisions of this Section shall not apply to any
suit instituted by the Trustee, to any suit instituted by any Holder, or group
of Holders, holding in the aggregate more than 10% of the principal amount of
the Outstanding Notes, or to any suit instituted by any Holder for the
enforcement of (i) payments pursuant to Section 4.7, (ii) Purchase Rights in
accordance with Article 11 or (iii) conversion rights in accordance with Article
12. This Section 4.14 shall be in lieu of Section 315(e) of the TIA and such
Section 315(e) is hereby expressly excluded from this Indenture, as permitted by
the TIA.
SECTION 4.15. Waiver of Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do so)
that it will not at any time insist upon, or plead, or in any manner whatsoever
claim to take the benefit or advantage of, any stay or extension 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 that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
ARTICLE 5
THE TRUSTEE
SECTION 5.1. Certain Duties and Responsibilities.
(a) Except during the continuance of an Event of Default,
(i) The Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture or the TIA, and no
implied covenants or obligations shall be read into this Indenture against
the Trustee; and
(ii) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon certificates or opinions furnished
to the Trustee and conforming to the requirements of this Indenture;
provided, however, that in the case of any such certificates or opinions
which by any provision hereof are specifically required to be furnished to
the Trustee, the Trustee shall examine the certificates or opinions to
determine whether or not, on their face, they conform to the requirements
to this Indenture (but need not investigate or confirm the accuracy of any
facts stated therein).
(b) In case an Event of Default actually known to a Responsible
Officer of the Trustee 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 person would
exercise or use under the circumstances in the conduct of such person's own
affairs.
39
(c) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct, except that:
(i) This paragraph (c) shall not be construed to limit the effect of
paragraph (a) of this Section 5.1;
(ii) The Trustee shall not be liable for any error of judgment made
in good faith by a Responsible Officer, unless it shall be proved that the
Trustee was negligent in ascertaining the pertinent facts; and
(iii) The Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with a
direction received by it of the Holders of a majority of the principal
amount of the Outstanding Notes relating to the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee, under this
Indenture.
(d) Whether or not herein expressly so provided, every provision of
this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this
Section 5.1.
(e) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any liability in the performance
of any of its duties hereunder, or in the exercise of any of its rights or
powers. The Trustee may refuse to perform any duty or exercise any right or
power unless it receives indemnity reasonably satisfactory to it against any
loss, liability, cost or expense (including, without limitation, reasonable fees
and expenses of counsel).
(f) The Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture, note, coupon, other evidence of Indebtedness or other paper or
document, but the Trustee, in its discretion, may make such further inquiry or
investigation into such facts or matters as it may see fit, and, if the Trustee
shall determine to make such further inquiry or investigation, it shall be
entitled to examine the books, records and premises of the Company, personally
or by agent or attorney at the sole cost of the Company and shall incur no
liability or additional liability of any kind by reason of such inquiry or
investigation.
(g) The Trustee shall not be deemed to have notice or actual
knowledge of any Event of Default unless a Responsible Officer of the Trustee
has actual knowledge thereof or unless written notice of any event which is in
fact a Default is received by the Trustee pursuant to Section 14.2 hereof, and
such notice references the Notes and this Indenture.
(h) The rights, privileges, protections, immunities and benefits
given to the Trustee hereunder, including, without limitation, its right to be
indemnified, are extended to, and shall be enforceable by, the Trustee in each
of its capacities hereunder, and each Paying Agent, authenticating agent,
Conversion Agent or Registrar acting hereunder.
40
(i) The Trustee may request that the Company deliver an Officers'
Certificate setting forth the names of individuals and/or titles of officers
authorized at such time to take specified actions pursuant to this Indenture,
which Officers' Certificate may be signed by any person authorized to sign an
Officers' Certificate, including any person specified as so authorized in any
such certificate previously delivered and not superseded.
SECTION 5.2. Certain Rights of Trustee.
Subject to the provisions of Section 5.1 hereof and subject to
Section 315(a) through (d) of the TIA:
(a) The Trustee may conclusively rely on any document believed by it
to be genuine and to have been signed or presented by the proper person. The
Trustee need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require
an Officers' Certificate or an Opinion of Counsel, or both. The Trustee shall
not be liable for any action it takes or omits to take in good faith in reliance
on the Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through attorneys and agents and shall not
be responsible for the misconduct or negligence of any attorney or agent
appointed with due care.
(d) The Trustee shall not be liable for any action taken or omitted
to be taken by it in good faith that it believed to be authorized or within the
discretion or rights or powers conferred upon it by this Indenture, unless the
Trustee's conduct constitutes negligence.
(e) The Trustee may consult with counsel of its selection and the
advice of such counsel as to matters of law or legal interpretation shall be
full and complete authorization and protection in respect of any action taken,
omitted or suffered by it hereunder in good faith and in accordance with the
advice or opinion of such counsel.
(f) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Company shall be sufficient if
signed by an Officer of the Company.
(g) The permissive rights of the Trustee to do things enumerated in
this Indenture shall not be construed as a duty unless so specified herein.
SECTION 5.3. Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Notes and may otherwise deal with the Company or any
Affiliate of the Company with the same rights it would have if it were not
Trustee. However, in the event that the Trustee acquires any conflicting
interest (as such term is defined in Section 310(b) of the TIA), it must
eliminate such conflict within 90 days, apply to the Commission for permission
to continue as trustee (to the extent permitted under Section 310(b) of the TIA)
or resign. Any agent may do the same with like rights and duties. The Trustee is
also subject to Sections 5.11 and 5.12 hereof.
SECTION 5.4. Money Held in Trust.
41
Money held by the Trustee in trust hereunder shall not be segregated
from other funds except to the extent required by law. The Trustee shall be
under no liability for interest on any money received by it hereunder except as
otherwise expressly agreed with the Company.
SECTION 5.5. Trustee's Disclaimer.
The recitals contained herein and in the Notes (except for those in
the certificate of authentication) shall be taken as the statements of the
Company, and the Trustee assumes no responsibility for their correctness. The
Trustee makes no representation as to the validity or adequacy of this
Indenture, the Notes, the Pledge Agreement, the Control Agreement or the Pledged
Securities. The Trustee shall not be accountable for the use or application by
the Company of the Notes or the proceeds thereof.
SECTION 5.6. Notice of Defaults.
Within 90 days after a Responsible Officer of the Trustee has
received written notice of the occurrence of any Default or Event of Default
hereunder, the Trustee shall give notice to Holders, unless such Default or
Event of Default shall have been cured or waived; provided, however, that,
except in the case of a Default or Event of Default described in Sections 4.1(b)
or (c), the Trustee shall be protected in withholding such notice if and so long
as Responsible Officers of the Trustee in good faith determine that the
withholding of such notice is in the interest of the Holders. This Section 5.6
shall be in lieu of the proviso to Section 315(b) of the TIA and such proviso is
hereby expressly excluded from this Indenture, as permitted by the TIA.
SECTION 5.7. Reports by Trustee to Holders.
Within 60 days after each May 31(), beginning with the May 31()
following the date of this Indenture, the Trustee shall transmit to Holders such
reports concerning the Trustee and its actions under this Indenture as may be
required by Section 313 of the TIA and in the manner provided by the TIA.
A copy of each report at the time of its mailing to Holders shall be
filed with the Commission, if required, and each stock exchange, if any, on
which the Notes and the Common Stock are listed. The Company shall promptly
notify the Trustee when the Notes or the Common Stock become listed on any stock
exchange.
SECTION 5.8. Compensation and Indemnification.
The Company covenants and agrees to pay to the Trustee from time to
time, and the Trustee shall be entitled to, such compensation as agreed to in
writing by the Trustee and the Company (which shall not be limited by any
provision of law in regard to the compensation of a trustee of an express trust)
and the Company covenants and agrees to pay or reimburse the Trustee upon its
request for all expenses, disbursements and advances incurred or made by or on
behalf of it in accordance with any of the provisions of this Indenture
(including the reasonable compensation and the expenses and disbursements of its
counsel and of all agents and other persons not regularly in its employ), except
to the extent that any such expense, disbursement or advance is due to its
negligence or bad faith. When the Trustee incurs expenses or renders
42
services in connection with an Event of Default specified in Section 4.1, the
expenses (including the charges and expenses of its counsel) and the
compensation for the services are intended to constitute expenses of
administration under any bankruptcy law. The Company also covenants to indemnify
the Trustee and its officers, directors, employees and agents for, and to hold
such Persons harmless against, any loss, liability or expense incurred by them,
arising out of or in connection with the acceptance or administration of this
Indenture or the trusts hereunder or the performance of their duties hereunder,
including the reasonable costs and expenses of defending themselves against or
investigating any claim of liability in the premises, except to the extent that
any such loss, liability or expense was due to the negligence or willful
misconduct of such Persons. The obligations of the Company under this Section
5.8 to compensate and indemnify the Trustee and its officers, directors,
employees and agents and to pay or reimburse such Persons for expenses,
disbursements and advances shall constitute additional Indebtedness hereunder
and shall survive the satisfaction and discharge of this Indenture or the
earlier resignation or removal of the Trustee. Such additional Indebtedness
shall be a lien prior to that of the Notes upon all property and funds held or
collected by the Trustee as such, except the Pledged Securities and such money
or property held in trust for the benefit of the Holders of particular Notes,
and the Notes are hereby subordinated to such senior claim. "TRUSTEE" for
purposes of this Section 5.8 shall include any predecessor Trustee, in its
capacity as Trustee, but the negligence or willful misconduct of any Trustee
shall not affect the indemnification of any other Trustee.
SECTION 5.9. 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 5.9.
The Trustee may resign and be discharged from the trust hereby
created by so notifying the Company in writing. The Holders of at least a
majority of the principal amount of Outstanding Notes may remove the Trustee by
so notifying the Trustee and the Company in writing. The Company must remove the
Trustee if:
(a) the Trustee fails to comply with Section 5.11 hereof or Section
310 of the TIA;
(b) the Trustee becomes incapable of acting;
(c) 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; or
(d) a Custodian or public officer takes charge of the Trustee or its
property.
If the Trustee resigns or is removed or if a vacancy exists in the
office of the Trustee for any reason, the Company shall promptly appoint a
successor Trustee. The Trustee shall be entitled to payment of its fees and
reimbursement of its expenses while acting as Trustee.
43
Any Holder may petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor Trustee if the Trustee
fails to comply with Section 5.11.
If an instrument of acceptance by a successor Trustee shall not have
been delivered to the Trustee within 30 days after the giving of such notice of
resignation or removal, the resigning or removed Trustee, as applicable, may
petition, at the expense of the Company, any court of competent jurisdiction for
the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The Company shall issue a notice of the successor
Trustee's succession to the Holders. Upon payment of its charges, the retiring
Trustee shall promptly transfer all property held by it as Trustee to the
successor Trustee, subject nevertheless to its lien, if any, provided for in
Section 5.8 hereof. Notwithstanding replacement of the Trustee pursuant to this
Section 5.9 hereof, the Company's obligations under Section 5.8 hereof shall
continue for the benefit of the retiring Trustee with respect to expenses,
losses and liabilities incurred by it prior to such replacement.
SECTION 5.10. Successor Trustee by Merger, Etc.
Subject to Section 5.11 hereof, if the Trustee consolidates with,
merges or converts into, or transfers all or substantially all of its corporate
trust business to, another corporation or national banking association, the
successor entity without any further act shall be the successor Trustee as to
the Notes.
SECTION 5.11. Corporate Trustee Required; Eligibility.
The Trustee shall at all times satisfy the requirements of Section
310(a)(1), (2) and (5) of the TIA. The Trustee shall at all times have (or, in
the case of a corporation included in a bank holding company system, the related
bank holding company shall at all times have), a combined capital and surplus of
at least $50 million as set forth in its (or its related bank holding company's)
most recent published annual report of condition. The Trustee is subject to
Section 310(b) of the TIA.
SECTION 5.12. Collection of Claims Against the Company.
The Trustee is subject to Section 311(a) of the TIA, excluding any
creditor relationship listed in Section 311(b) of the TIA. A Trustee who has
resigned or been removed shall be subject to Section 311(a) of the TIA to the
extent indicated therein.
44
ARTICLE 6
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER,
SALE, LEASE OR OTHER DISPOSITION
SECTION 6.1. Company May Consolidate, Etc., Only on Certain Terms.
The Company shall not consolidate with or merge into any other
Person or convey, transfer, sell, lease or otherwise dispose of all or
substantially all of the properties and assets of the Company and its
Subsidiaries taken as a whole, to any Person, unless:
(a) the resulting, surviving or transferee Person is organized and
validly existing under the laws of the United States of America, any State
thereof or the District of Columbia;
(b) such surviving or transferee entity shall expressly assume, by
an indenture supplemental hereto, executed and delivered to the Trustee,
in form reasonably satisfactory to the Trustee, the due and punctual
payment of all and any amounts when due on all the Notes and the
performance of every covenant of this Indenture and the Notes and, to the
extent any obligations of the Company thereunder remain outstanding, the
Registration Rights Agreement, the Pledge Agreement and the Control
Agreement, on the part of the Company to be performed or observed and
shall have provided for conversion rights provided in Article 12; and
(c) immediately after giving effect to such transaction, no Default
or Event of Default shall have occurred and be continuing.
This Section 6.1 will not apply to a merger of the Company with an
Affiliate solely for the purpose of reincorporating the Company in another
jurisdiction.
SECTION 6.2. Successor Corporation Substituted.
Upon any consolidation or merger by the Company with or into any
other Person or any conveyance, transfer, sale, lease or other disposition of
all or substantially all of the properties and assets of the Company to any
Person, in accordance with Section 6.1 hereof, the successor Person formed by
such consolidation or into which the Company is merged or to which such
conveyance, transfer, sale, lease or disposition is made shall succeed to, and
be substituted for, and may exercise every right and power of, the Company under
this Indenture with the same effect as if such successor Person had been named
as the Company herein. In the event of any such conveyance, transfer, sale or
disposition to the Company (which term shall for this purpose mean the Person
named as the "Company" in the first paragraph of this Indenture or any successor
Person which shall theretofore become such in the manner described in Section
6.1 hereof), except in the case of a lease to another Person, the predecessor
Person shall be relieved of all obligations and covenants under this Indenture
and the Notes and may be dissolved and liquidated.
45
ARTICLE 7
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 7.1. Without Consent of Holders of Notes.
Without the consent of any Holders, the Company, when authorized by
a Board Resolution, and the Trustee, at any time and from time to time, may
amend this Indenture and the Notes to:
(a) add to the covenants of the Company for the benefit of the
Holders;
(b) surrender any right or power herein conferred upon the Company;
(c) provide for conversion rights of Holders if any reclassification
or change of the Company's Common Stock or any consolidation, merger or
sale of all or substantially all of the Company's assets occurs or a
Public Acquirer Fundamental Change occurs;
(d) provide for the assumption of the Company's obligations to the
Holders in the case of a merger, consolidation or conveyance, sale,
transfer or lease pursuant to Article 6 hereof;
(e) reduce the Conversion Price or increasing the Conversion Rate;
provided, however, that such reduction in the Conversion Price or increase
in the Conversion Rate shall not adversely affect the interest of the
Holders (after taking into account tax and other consequences of such
reduction or increase);
(f) comply with the requirements of the Commission in order to
effect or maintain the qualification of this Indenture under the TIA;
(g) make any changes or modifications to this Indenture or the Notes
necessary in connection with the registration of any Notes under the
Securities Act as contemplated in the Registration Rights Agreement;
provided, however, that such change or modification pursuant to this
clause (g) does not, in the good faith opinion of the Board of Directors
(as evidenced by a Board Resolution), adversely affect the interests of
the Holders in any material respect;
(h) cure any ambiguity or correct or supplement any provision herein
which may be inconsistent with any other provision herein or which is
otherwise defective; provided, however, that such action pursuant to this
clause (h) does not, in the good faith opinion of the Board of Directors
(as evidenced by a Board Resolution) and the Trustee, adversely affect the
interests of the Holders in any material respect;
(i) add guarantees with respect to the Notes; or
(j) add or modify any other provisions herein with respect to
matters or questions arising hereunder which the Company and the Trustee
may deem necessary or desirable and which will not adversely affect the
interests of the Holders in any material respect.
46
SECTION 7.2. With Consent of Holders of Notes.
Except as provided below in this Section 7.2, this Indenture or the
Notes may be amended, modified or supplemented, and noncompliance in any
particular instance with any provision of this Indenture or the Notes may be
waived, with the written consent of the Holders of at least a majority of the
principal amount of the Outstanding Notes.
Without the written consent or the affirmative vote of each Holder
of Notes affected thereby, an amendment or waiver under this Section 7.2 may
not:
(a) change the Stated Maturity of the Principal of or the date any
installment of Interest or Additional Interest, if any, is due on any
Note;
(b) reduce the Principal, Repurchase Price or Interest or Additional
Interest, if any, on any Note;
(c) change the place of payment or the currency of any amount owed
or owing under the Note from U.S. Dollars;
(d) alter the manner of calculation or rate of accrual of Interest
or Additional Interest, if any, on any Note or extend the payment of any
such amount;
(e) impair the right of any Holder to institute suit for the
enforcement of any payment in or with respect to any Note;
(f) except as otherwise permitted or contemplated by the Indenture,
adversely affect the right of the Holders to convert any Note as provided
in Article 12;
(g) modify the provisions of Article 11 in a manner adverse to the
Holders or to provide for redemption of the Notes;
(h) modify the provisions of the Indenture, the Pledge Agreement or
the Control Agreement relating to the pledge of securities as contemplated
under Article 8 in a manner adverse to the interests of the Holders of
Notes in any material respect;
(i) reduce the percentage of the principal amount of the Outstanding
Notes the consent of whose Holders is required for any supplemental
indenture or the consent of whose Holders is required for any waiver
provided for in this Indenture; or
(j) modify any of the provisions of this Section, except to provide
that certain other provisions of this Indenture cannot be modified or
waived without the consent of the Holder of each Outstanding Note affected
thereby.
It shall not be necessary for any Act of Holders under this Section
7.2 to approve the particular form of any proposed supplemental indenture, but
it shall be sufficient if such Act shall approve the substance thereof.
SECTION 7.3. Compliance with Trust Indenture Act.
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Every amendment to this Indenture or the Notes shall be set forth in
a supplemental indenture that complies with the TIA as then in effect.
SECTION 7.4. Revocation of Consents and Effect of Consents or Votes.
Until an amendment, supplement or waiver becomes effective, a
written consent to it by a Holder is a continuing consent by the Holder and
every subsequent Holder of a Note or portion of a Note that evidences the same
debt as the consenting Holder's Note, even if notation of the consent is not
made on any Note; provided, however, that unless a record date shall have been
established, any such Holder or subsequent Holder may revoke the consent as to
its Note or portion of a Note if the Trustee receives written notice of
revocation before the date the amendment, supplement or waiver becomes
effective.
An amendment, supplement or waiver becomes effective on receipt by
the Trustee of written consents from or affirmative votes by, as applicable, the
Holders of the requisite percentage of the principal amount of the Outstanding
Notes, and thereafter shall bind every Holder; provided, however, if the
amendment, supplement or waiver makes a change described in any of the clauses
(a) through (j) of Section 7.2, the amendment, supplement or waiver shall bind
only each Holder which has consented to it or voted for it, as applicable, and
every subsequent Holder of a Note or portion of a Note that evidences the same
Indebtedness as the Note of the consenting or affirmatively voting Holder, as
applicable.
SECTION 7.5. Notation on or Exchange of Notes.
If an amendment, supplement or waiver changes the terms of a Note:
(a) the Trustee may require the Holder of a Note to deliver such
Notes to the Trustee, the Trustee may place an appropriate notation on the Note
about the changed terms and return it to the Holder and the Trustee may place an
appropriate notation on any Note thereafter authenticated; or
(b) if the Company or the Trustee so determines, the Company in
exchange for the Note shall issue and the Trustee shall authenticate a new Note
that reflects the changed terms.
Failure to make the appropriate notation or issue a new Note shall not affect
the validity and effect of such amendment, supplement or waiver.
SECTION 7.6. Trustee to Sign Amendment, Etc.
The Trustee shall sign any amendment authorized pursuant to this
Article 7 if the Trustee reasonably determines the amendment does not adversely
affect the rights, duties, liabilities or immunities of the Trustee. If the
Trustee reasonably determines the amendment does adversely affect the rights,
duties, liabilities or immunities of the Trustee, the Trustee may but need not
sign it. In signing or refusing to sign any amendment hereunder, the Trustee
shall be entitled to receive and shall be fully protected in relying upon an
Officers' Certificate and an Opinion of Counsel as conclusive evidence that such
amendment is authorized or permitted by this Indenture and that all conditions
precedent relating thereto have been complied with.
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SECTION 7.7. Effect of Amendment.
Upon the execution of any supplemental amendment under this Article,
this Indenture shall be modified in accordance therewith, and such amendment
shall form a part of this Indenture for all purposes; and, except as otherwise
provided herein, every Holder of a Note theretofore or thereafter authenticated
and delivered hereunder shall be bound thereby.
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ARTICLE 8
SECURITY
SECTION 8.1. Security.
(a) At the Closing Time, the Company shall purchase and pledge to
the Trustee as security for the exclusive benefit of the Holders (and not
for the benefit of other creditors of the Company), the Initial Pledged
Securities in such amount as will be sufficient, upon receipt of scheduled
interest and principal payments of such Initial Pledged Securities, as
computed by the Company, to provide for payment in full of the first four
scheduled interest payments (up to and including the interest payment due
on November 18, 2006), but excluding Additional Interest, if any, on the
Notes when due.
(b) The Initial Pledged Securities shall be held by the Trustee in
the Pledged Account. The Company will advise the Trustee three Business
Days prior to each of the first four scheduled Interest payment Dates
whether the Company will separately fund the Interest payment or will
instruct the Trustee to release from the Pledged Account proceeds
sufficient to pay the Interest then due on the Notes if the Company has
not made other provision for the payment of such Interest. Immediately
prior to each of the first four scheduled Interest Payment Dates, the
Trustee shall release from the Pledged Account proceeds sufficient to pay
the interest then due on the Notes if the Company has not made other
provision for payment of such interest (including in circumstances where
the Company has indicated that it intends to fund separately the Interest
payment but no such funds are timely received by the Trustee) or if the
Company has requested that the Trustee do so. A failure to pay interest on
the Notes when due for any of the first four scheduled Interest Payment
Dates shall constitute an Event of Default pursuant to clause (c) of
Section 4.1, with no grace period (unless due solely to the fault of the
Trustee, in which case the Company will have a three Business Day grace
period); provided that, so long as the amount released pursuant to the
preceding sentence is sufficient to pay such interest, the release of
funds as provided shall not be deemed a failure to pay interest.
(c) The Initial Pledged Securities and the Pledged Account shall
also secure the repayment of the principal amount and Additional Interest,
if any, on the Notes but only to the extent expressly provided in the
Pledge Agreement.
(d) On each relevant Delivery Date (if such Delivery Date is
different from the Closing Time), the Company shall (1) enter into a
supplement to the Pledge Agreement and comply with the terms and
provisions thereof and (2) purchase the Additional Pledged Security
Entitlements to be pledged to the Trustee for the exclusive benefit of the
Holders in such amount as will be sufficient upon receipt of scheduled
interest and principal payments of such Additional Pledged Security
Entitlements, as computed by the Company, to provide for payment in full
of the first four scheduled interest payments due on the Notes issued in
connection therewith. The Additional Pledged Security Entitlements shall
be pledged by the Company to the Trustee for the exclusive benefit of
50
the Holders and shall be held by the Trustee in the Pledged Account
pending disposition pursuant to the Pledge Agreement.
(e) Each Holder, by its acceptance of a Note, consents and agrees to
the terms of the Pledge Agreement (including, without limitation, the
provisions providing for foreclosure and release of the Pledged
Securities) as the same may be in effect or may be amended from time to
time in writing by the parties thereto (provided that no amendment that
would materially adversely affect the rights of the Holders may be
effected without the consent of each Holder affected thereby), and
authorizes and directs the Trustee to enter into the Pledge Agreement and
to perform its obligations and exercise its rights thereunder in
accordance therewith. The Company shall do or cause to be done all such
acts and things as may be necessary or proper, or as may be required by
the provisions of the Pledge Agreement, to assure and confirm to the
Trustee the security interest in the Pledged Securities contemplated
hereby, by the Pledge Agreement or any part thereof, as from time to time
constituted, so as to render the same available for the security and
benefit of this Indenture and of the Notes secured hereby, according to
the intent and purpose herein expressed. The Company shall take, or shall
cause to be taken, upon request of the Trustee, any and all actions
reasonably required to cause the Pledge Agreement to create and maintain,
as security for the obligations of the Company under this Indenture and
the Notes as provided in the Pledge Agreement, valid and enforceable first
priority perfected liens in and on all the Pledged Securities, in favor of
the Trustee for the ratable benefit of the Holders, superior to and prior
to the rights of third Persons and subject to no other Liens.
(f) The release of any Pledged Securities pursuant to the Pledge
Agreement will not be deemed to impair the security under this Indenture
in contravention of the provisions hereof if and to the extent the Pledged
Securities are released pursuant to this Indenture and the Pledge
Agreement. To the extent applicable, the Company shall cause Section
314(d) of the TIA relating to the release of property or securities from
the Lien and security interest of the Pledge Agreement and relating to the
substitution therefor of any property or securities to be subjected to the
Lien and security interest of the Pledge Agreement to be complied with.
Any certificate or opinion required by Section 314(d) of the TIA may be
made by an Officer of the Company, except in cases where Section 314(d) of
the TIA requires that such certificate or opinion be made by an
independent Person, in which case such Person shall be an independent
appraiser or other expert selected by the Company.
(g) The Company shall cause Section 314(b) of the TIA, relating to
Opinions of Counsel regarding the Lien under the Pledge Agreement, to be
complied with. The Trustee may, to the extent permitted by Section 9.1 and
9.2, accept as conclusive evidence of compliance of the foregoing
provisions the appropriate statements contained in such Opinions of
Counsel.
(h) The Trustee may, in its sole discretion and without the consent
of the Holders, on behalf of the Holders, take all actions it deems
necessary or appropriate in order to (1) enforce any of the terms of the
Pledge Agreement and (2) collect and receive any and all amounts payable
in respect of the obligations of the Company thereunder. The Trustee
51
shall have the authority necessary to institute and maintain such suits
and proceedings as the Trustee may deem expedient to preserve or protect
the interests of the Holders in the Pledged Securities (including the
authority to institute and maintain suits or proceedings to restrain the
enforcement of, or compliance with, any legislative or other governmental
enactment, rule or order that may be unconstitutional or otherwise invalid
if the enforcement of, or compliance with, such enactment, rule or order
would impair the security interest hereunder or be prejudicial to the
interests of the Holders or the Trustee).
(i) Beyond the exercise of reasonable care in the custody and
preservation thereof, the Trustee shall have no duty as to any Pledged
Securities in its possession or any income thereon or as to preservation
of rights against prior parties or any other rights pertaining thereto,
and the Trustee shall not be responsible for filing any financing or
continuation statements or recording any documents or instruments in any
public office at any time or times or otherwise perfecting or maintaining
the perfection of any security interest in the Pledged Securities. The
Trustee shall be deemed to have exercised reasonable care in the custody
and preservation of the Pledged Securities in its possession if the
Pledged Securities are accorded treatment substantially equal to that
which it accords its own property or property held in similar accounts and
shall not be liable or responsible for any loss or diminution in the value
of any of the Pledged Securities, by reason of the act or omission of the
Trustee, any carrier, forwarding agency or other agent or bailee selected
by the Trustee in good faith.
(j) The Trustee shall not be responsible for the existence,
genuineness or value of any of the Pledged Securities or for the validity,
perfection, priority or enforceability of the Liens in any of the Pledged
Securities, whether impaired by operation of law or otherwise, for the
validity or sufficiency of the Pledged Securities or any agreement or
assignment contained therein, for the validity of the title of the Company
to the Pledged Securities, for insuring the Pledged Securities or for the
payment of taxes, charges, assessments or Liens upon the Pledged
Securities or otherwise as to the maintenance of the Pledged Securities.
The Trustee shall have no duty to ascertain or inquire as to the
performance or observance of any of the terms of the Pledge Agreement by
the Company.
ARTICLE 9
COVENANTS
SECTION 9.1. Payment of Principal, Repurchase Price and Interest.
The Company will duly and punctually pay the Principal of and the
Interest and Additional Interest, if any, on, and any other payments due with
respect to, the Notes when and if at any time any such foregoing amounts are due
and payable in accordance with the terms of the Notes and this Indenture. The
Company will deposit or cause to be deposited with the Trustee as directed by
the Trustee, no later than the day of the Stated Maturity, the date of any
installment of Interest or Additional Interest, if any, or any other date such
payment is otherwise due, the amount necessary to pay the amounts due. If
Additional Interest is payable by the Company pursuant to the Registration
Rights Agreement, the Company shall deliver to the Trustee a certificate to such
effect stating (i) the amount of Additional Interest so payable and (ii) the
date
52
on which such Additional Interest is payable. Unless and until a Responsible
Officer of the Trustee receives such a certificate, the Trustee may assume
without inquiry that no Additional Interest is payable.
SECTION 9.2. Maintenance of Offices or Agencies.
The Company hereby appoints the Trustee's Corporate Trust Office as
its office or agency in the Borough of Manhattan, The City of New York, where
Notes may be:
(a) presented or surrendered for payment;
(b) surrendered for registration of transfer or exchange;
(c) surrendered for conversion;
and where notices and demands to or upon the Company in respect of the Notes and
this Indenture may be served.
The Company will maintain in the Borough of Manhattan, The City of
New York, an office or agency where Notes may be presented or surrendered for
payment, where Notes may be surrendered for registration of transfer or
exchange, where Notes may be surrendered for conversion and where notices and
demands to or upon the Company in respect of the Notes and this Indenture may be
served. The Company will give prompt written notice to the Trustee, and notice
to the Holders in accordance with Section 14.2 hereof, of the appointment or
termination of any such agents and of the location and any change in the
location of any such office or agency.
If at any time the Company shall fail to maintain any such required
office or agency in the Borough of Manhattan, The City of New York, or shall
fail to furnish the Trustee with the address thereof, presentations and
surrenders may be made at, and notices and demands may be served on, the
Corporate Trust Office of the Trustee.
SECTION 9.3. Corporate Existence.
Subject to Article 6 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, rights (charter and statutory) and franchises of the Company and each
Subsidiary; provided, however, that the Company shall not be required to
preserve any such right or franchise if the Board of Directors shall determine
in good faith that the preservation thereof is no longer desirable in the
conduct of the business of the Company and its Subsidiaries as a whole and that
the loss thereof is not disadvantageous in any material respect to the Holders.
SECTION 9.4. Reports.
(a) The Company shall deliver to the Trustee within 15 days after it
files them with the Commission copies of Forms 10-K and 10-Q which the Company
is required to file with the Commission pursuant to Section 13 or 15(d) of the
Exchange Act; provided, however, the Company shall not be required to deliver to
the Trustee any materials for which the Company
53
has sought and received confidential treatment by the Commission. In the event
the Company is at any time no longer subject to the reporting requirements of
Section 13 or 15(d) of the Exchange Act, it shall continue to provide the
Trustee and shall provide the Holders with reports containing substantially the
same information as would have been required to be filed with the Commission had
the Company continued to have been subject to such reporting requirements. In
such event, such reports shall be provided at the times the Company would have
been required to provide reports had it continued to have been subject to such
reporting requirements. The Company also shall comply with the other provisions
of Section 314(a) of the TIA.
(b) If at any time the Company is not subject to Section 13 or 15(d)
of the Exchange Act, upon the request of a Holder, the Company will promptly
furnish or cause to be furnished to such Holder or to a prospective purchaser of
such Note designated by such Holder, as applicable, the information, if any,
required to be delivered by it pursuant to Rule 144A(d)(4) under the Securities
Act to permit compliance with Rule 144A in connection with the resale of such
Note; provided, however, that the Company shall not be required to furnish such
information in connection with any request made on or after the date which is
two years from the later of the date such security was last acquired from the
Company or an "affiliate" (as defined under Rule 144 under the Securities Act)
of the Company.
SECTION 9.5. Compliance Certificate.
The Company shall deliver to the Trustee, within 120 days after the
end of each fiscal year of the Company, an Officer's Certificate signed by two
Officers of the Company stating that, in the course of the performance by the
signers of their duties as Officers of the Company, they would normally have
knowledge of any failure by the Company to comply with all conditions, or
Default by the Company with respect to any covenants, under this Indenture, and
further stating whether or not they have knowledge of any such failure or
Default and, if so, specifying each such failure or Default and the nature
thereof. In the event an Officer of the Company comes to have actual knowledge
of a Default, regardless of the date, the Company shall deliver an Officers'
Certificate to the Trustee within five Business Days of obtaining such actual
knowledge specifying such Default and the nature and status thereof.
When any Registration Default (as defined in the Registration Rights
Agreement) occurs, the Company shall promptly deliver to the Trustee by
registered or certified mail or by telegram, telex or facsimile transmission an
Officer's Certificate specifying the nature of such Registration Default. In
addition, the Company shall deliver to the Trustee on each Interest Payment Date
during the continuance of a Registration Default and on the first Interest
Payment Date following the cure of a Registration Default (to the extent that
Additional Interest is then due and payable on such Interest Payment Date), an
Officers' Certificate specifying the Additional Interest which has accrued and
which is then owing under the Registration Rights Agreement.
SECTION 9.6. Resale of Certain Notes.
During the period of two years after the last date of original
issuance of any Notes, the Company shall not, and shall not register for
transfer any sales by any of its "affiliates" (as defined under Rule 144 under
the Securities Act) of any Notes, or shares of
54
Common Stock issuable upon conversion of the Notes, which constitute "restricted
securities" under Rule 144, except pursuant to an effective registration
statement under the Securities Act; provided, however, that the Company may
register for transfer sales of Notes, or shares of Common Stock issuable upon
conversion of the Notes, which constitute "restricted securities" under Rule
144, if the transferee thereof acknowledges that such Notes are Transfer
Restricted Securities (as defined in the Registration Rights Agreement). The
Trustee shall have no responsibility or liability in respect of the Company's
performance of its agreement in the preceding sentence.
ARTICLE 10
[INTENTIONALLY OMITTED]
ARTICLE 11
PURCHASE AT THE OPTION OF A HOLDER UPON A FUNDAMENTAL CHANGE
SECTION 11.1. Purchase Right.
(a) If a Fundamental Change occurs at any time prior to the Stated
Maturity (subject to certain exceptions set forth below), the Notes not
previously purchased by the Company shall be purchased by the Company for
cash, at the option of the Holder thereof upon exercise of its rights
under this Article 11 ("PURCHASE RIGHTS"), at a repurchase price equal to
100% of the Principal amount of the Notes being repurchased, plus accrued
and unpaid Interest to, but not including, the Repurchase Date (the
"FUNDAMENTAL CHANGE PURCHASE PRICE"), as of the date that is between 30
and 60 days after the date of a notice of Fundamental Change delivered by
the Company pursuant to Section 11.1(b) (the "FUNDAMENTAL CHANGE PURCHASE
DATE"), subject to satisfaction by or on behalf of the Holder of the
requirements set forth in Section 11.1(c).
(b) No later than 30 days after the occurrence of a Fundamental
Change, the Company shall mail a written notice of the Fundamental Change
by first class mail to the Trustee and to each Holder (and to beneficial
owners as required by applicable law). The notice shall include a form of
notice Fundamental Change Purchase Notice to be completed by the Holder
and shall state:
(i) briefly, the events causing a Fundamental Change and the
date of such Fundamental Change;
(ii) the date by which the Fundamental Change Purchase Notice
pursuant to this Section 11.1 must be delivered to the Paying Agent
in order for a Holder to exercise the Purchase Rights;
(iii) the Fundamental Change Purchase Date;
(iv) the Fundamental Change Purchase Price;
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(v) the name and address of the Paying Agent and the
Conversion Agent;
(vi) the Conversion Price and any adjustments thereto and
whether Notes surrendered for conversion within 30 days of the
notice of Fundamental Change will be settled in cash, shares of
Common Stock or a combination of cash and shares of Common Stock;
(vii) the date by which Holders must convert their Notes in
order to receive any Additional Common Stock or additional cash
payment pursuant to Section 12.1(b).
(viii) that the Notes as to which a Fundamental Change
Purchase Notice has been given may be converted only if the
Fundamental Change Purchase Notice has been withdrawn in accordance
with the terms of this Indenture;
(ix) that the Notes must be surrendered to the Paying Agent to
collect payment;
(x) that the Fundamental Change Purchase Price for any Note as
to which a Fundamental Change Purchase Notice has been duly given
and not withdrawn will be paid promptly following the later of the
Fundamental Change Purchase Date and the time of surrender of such
Note as described in clause (viii) above;
(xi) briefly, the procedures the Holder must follow to
exercise rights under this Section 11.1;
(xii) briefly, the conversion rights of the Notes;
(xiii) the procedures for withdrawing a Fundamental Change
Purchase Notice;
(xiv) that, unless the Company defaults in making payment of
such Fundamental Change Purchase Price, interest, and Additional
Interest, if any, on Notes surrendered for purchase by the Company
will cease to accrue on and after the Fundamental Change Purchase
Date; and
(xv) the CUSIP number(s) of the Notes.
Without otherwise limiting the Company's obligations pursuant to
this Section 11.1 in any way, the Company shall also issue a press release
through Dow Jones & Company, Inc. containing the relevant information and
otherwise make this information available on the Company's web site or through
another public medium as the Company may use at that time.
(c) A Holder may exercise its rights specified in Section 11.1(a)
upon delivery of a written notice of purchase (a "FUNDAMENTAL CHANGE
PURCHASE NOTICE") to the Paying Agent at any time on or prior to the close
of business on the second Business Day
56
preceding the Fundamental Change Purchase Date (unless the Company shall
specify a later date), specifying:
(i) the certificate number of the Note, if certificated, which
the Holder will deliver to be purchased or, if not certificated, the
notice must comply with the appropriate depositary procedures;
(ii) the portion of the principal amount of the Note to be
purchased, which portion must be $1,000 or an integral multiple of
$1,000; and
(iii) that such Note shall be purchased pursuant to the terms
and conditions specified in this Indenture and the Notes.
The delivery of such Note with the Fundamental Change Purchase
Notice (together with all necessary endorsements) to the Paying Agent at the
offices of the Paying Agent shall be a condition to the receipt by the Holder of
the Fundamental Change Purchase Price therefor; provided, however, that such
Fundamental Change Purchase Price shall be so paid pursuant to this Section 11.1
and Section 11.2 only if the Note so delivered to the Paying Agent shall conform
in all respects to the description thereof set forth in the related Fundamental
Change Purchase Notice.
The Company shall purchase from the Holder thereof, pursuant to this
Section 11.1 and Section 11.2, a portion of a Note if the principal amount of
such portion is $1,000 or an integral multiple of $1,000. Provisions of this
Indenture that apply to the purchase of all of a Note also apply to the purchase
of such portion of such Note.
Any purchase by the Company contemplated pursuant to the provisions
of this Section 11.1 and Section 11.2 shall be consummated by the delivery to
the Conversion Agent and/or the Paying Agent of the consideration to be received
by the Holder.
Notwithstanding anything herein to the contrary, any Holder
delivering to the Paying Agent the Fundamental Change Purchase Notice
contemplated by this Section 11.1(c) shall have the right to withdraw such
Fundamental Change Purchase Notice, in whole or in part, at any time prior to
the close of business on the Fundamental Change Purchase Date by delivery of a
written notice of withdrawal to the Paying Agent in accordance with Section
11.2.
The Paying Agent shall promptly notify the Company of the receipt by
it of any Fundamental Change Purchase Notice or written withdrawal thereof.
All Notes purchased by the Company pursuant to this Section 11.1
shall be canceled by the Trustee.
Upon completion of any repurchase pursuant to this Article 11, the
aggregate principal amount of the Global Notes shall be decreased by adjustments
made on the records of the Trustee, as custodian, and of the Depositary or its
nominee, to reflect the reduction in the outstanding Principal following such
repurchase.
SECTION 11.2. Effect of Fundamental Change Purchase Notice;
Withdrawal.
57
Upon receipt by the Paying Agent of the Fundamental Change Purchase
Notice specified in Section 11.1, the Holder of the Note in respect of which
such Fundamental Change Purchase Notice was given shall (unless such Fundamental
Change Purchase Notice is withdrawn as specified in the following two
paragraphs) thereafter be entitled to receive solely the Fundamental Change
Purchase Price with respect to such Note. Such Fundamental Change Purchase Price
shall be paid to such Holder, subject to the receipt of funds by the Paying
Agent, promptly following the later of (x) the Fundamental Change Purchase Date
(provided the conditions in Section 11.1(c) have been satisfied) and (y) the
time of delivery of such Note to the Paying Agent by the Holder thereof in the
manner required by Section 11.1(c). Notes in respect of which a Fundamental
Change Purchase Notice has been given by the Holder thereof may not be converted
pursuant to Article 12 hereof on or after the date of the delivery of such
Fundamental Change Purchase Notice unless such Fundamental Change Purchase
Notice has first been validly withdrawn as specified in the following paragraph.
A Fundamental Change Purchase Notice may be withdrawn by means of a
written notice of withdrawal delivered to the office of the Paying Agent in
accordance with the Fundamental Change Purchase Notice, at any time prior to the
close of business on the Fundamental Change Purchase Date, specifying:
(i) the principal amount of the Note with respect to which
such notice of withdrawal is being submitted,
(ii) the certificate number, if any, of the Note in respect of
which such notice of withdrawal is being submitted, or, if not
certificated, the notice must comply with the appropriate depositary
procedures, and
(iii) the principal amount, if any, of such Note which remains
subject to the original Fundamental Change Purchase Notice, and
which has been or will be delivered for purchase by the Company.
SECTION 11.3. Deposit of Fundamental Change Purchase Price.
Prior to 10:00 a.m., New York City time, on the Business Day
following the Fundamental Change Purchase Date, the Company shall deposit with
the Trustee or with the Paying Agent (or, if the Company or a Subsidiary or an
Affiliate of either of them is acting as the Paying Agent, shall segregate and
hold in trust as provided in Section 2.6) an amount of cash (in immediately
available funds if deposited on such Business Day) sufficient to pay the
aggregate Fundamental Change Purchase Price of all the Notes or portions thereof
which are to be purchased as of the Fundamental Change Purchase Date.Section
11.4. Notes Purchased in Part.
Any Certificated Note which is to be purchased only in part shall be
surrendered at the office of the Paying Agent (with, if the Company or the
Trustee so requires, due endorsement by, or a written instrument of transfer in
form satisfactory to the Company and the Trustee duly executed by, the Holder
thereof or such Holder's attorney duly authorized in writing) and the Company
shall execute and the Trustee shall authenticate and deliver to the Holder of
such Note, without service charge, a new Note or Notes, of any authorized
denomination as requested by such Holder in aggregate principal amount equal to,
and in
58
exchange for, the portion of the principal amount of the Note so surrendered
which is not purchased.
SECTION 11.5. Covenant to Comply With Securities Laws Upon Purchase
of Notes.
When complying with the provisions of Section 11.1 (provided that
such offer or purchase constitutes an "issuer tender offer" for purposes of Rule
13e-4 (which term, as used herein, includes any successor provision thereto)
under the Exchange Act at the time of such offer or purchase), and subject to
any exemptions available under applicable law, the Company shall (i) comply with
Rule 13e-4 and Rule 14e-1 (or any successor provision) under the Exchange Act,
(ii) file the related Schedule TO (or any successor schedule, form or report)
under the Exchange Act, and (iii) otherwise comply with all federal and state
securities laws so as to permit the rights and obligations under Section 11.1 to
be exercised in the time and in the manner specified in Section 11.1.
SECTION 11.6. Repayment to the Company.
The Trustee and the Paying Agent shall return to the Company any
cash that remains unclaimed as provided in Section 22 of the Notes, together
with interest or dividends, if any, thereon (subject to the provisions of
Section 5.4), held by them for the payment of the Fundamental Change Purchase
Price; provided, however, that to the extent that the aggregate amount of cash
deposited by the Company pursuant to Section 11.3 exceeds the aggregate
Fundamental Change Purchase Price of the Notes or portions thereof which the
Company is obligated to purchase as of the Fundamental Change Purchase Date,
then, unless otherwise agreed in writing with the Company, on the Business Day
following the Fundamental Change Purchase Date, the Trustee shall return any
such excess to the Company together with interest thereon (subject to the
provisions of Section 5.4).
ARTICLE 12
CONVERSION OF NOTES
SECTION 12.1. Conversion Right; Expiration of Conversion Right;
Conversion Price.
(a) Subject to and upon compliance with the provisions of this
Article, at the option of the Holder at any time and from time to time
prior to the close of business on the Business Day preceding the Stated
Maturity, any Note or any portion of the principal amount thereof which is
an integral multiple of $1,000 may be converted at the principal amount
thereof, or of such portion thereof, into duly authorized, fully paid and
nonassessable shares of Common Stock (or, at our election pursuant to
Section 12.12, cash or a combination of cash and shares of Common Stock),
at the Conversion Price, determined as hereinafter provided, in effect at
the time of conversion. The price at which shares of Common Stock shall be
delivered upon conversion (the "CONVERSION PRICE") shall be initially
equal to $2.81 per share of Common Stock, subject to adjustment, in
certain instances, as provided in this Section 12.1 and in Section 12.4.
59
(b) (i) Subject to Section 12.1(b)(ii), Section 12.5, Section 12.15,
if a Holder elects to convert a Note within 30 days after notice is given
with respect to a Fundamental Change of the type specified in connection
clauses (a) or (c) of the definition of Fundamental Change (or in
connection with a transaction that would have been a Fundamental Change
under such clause (a) or (c) of the definition of Fundamental Change but
for the existence of the 110% Trading Price Exception (as defined
therein)), pursuant to which 10% or more of the consideration for the
Common Stock (other than cash payments for fractional shares and cash
payments made in respect of dissenters' appraisal rights) in such
transaction consists of cash or securities (or other property) that are
not traded or scheduled to be traded immediately following such
transaction on a U.S. national securities exchange or The Nasdaq National
Market (a "NON-STOCK FUNDAMENTAL CHANGE"), the Company will increase the
number of shares of Common Stock issuable upon conversion of the Note by a
number of additional shares of Common Stock (the "ADDITIONAL COMMON
STOCK") as set forth below. The number of shares of Additional Common
Stock will be determined by reference to the table below, based on the
date on which the Non-Stock Fundamental Change becomes effective (the
"EFFECTIVE DATE") and the price (the "STOCK PRICE") paid per share for the
Common Stock in the Non-Stock Fundamental Change. If Holders of Common
Stock receive only cash in the Non-Stock Fundamental Change, the Stock
Price shall be the cash amount paid per share. Otherwise, the Stock Price
shall be the average of the Market Prices of the Common Stock on the five
Trading Days prior to but not including the Effective Date of such
Non-Stock Fundamental Change. In determining whether a Fundamental Change
constitutes a Non-Stock Fundamental Change, the value of the consideration
for the Common Stock consisting of securities (or other property) that are
not traded or scheduled to be traded immediately following such
transaction on a U.S. national securities exchange or The Nasdaq National
Market shall be the Fair Market Value thereof as determined by the Board
of Directors acting in good faith and the value of the consideration for
the Common Stock consisting of securities (or other property) that are
traded or scheduled to be traded immediately following such transaction on
a U.S. national securities exchange or The Nasdaq National Market shall be
the average of the Market Prices for such securities or other property
over the five Trading Days immediately preceding the Fundamental Change.
The Stock Prices and number of shares of Additional Common Stock set
forth in the table below will be adjusted as of any date on which the Conversion
Price is adjusted. On such date, the Stock Prices shall be adjusted by
multiplying:
(i) the Stock Prices applicable immediately prior to such
adjustment, by
(ii) a fraction, of which
(A) the numerator shall be the Conversion Price as so
adjusted, and
60
(B) the denominator shall be the Conversion Price
immediately prior to the adjustment giving rise to
the Stock Price adjustment.
On such date, the number of shares of Additional Common Stock shall be adjusted
by multiplying:
(i) the Additional Common Stock applicable immediately prior
to such adjustment, by
(ii) a fraction, of which
(A) the numerator shall be the Conversion Price
immediately prior to the adjustment giving rise to
the Stock Price adjustment, and
(B) the denominator shall be the Conversion Price as
so adjusted.
The following table sets forth the Stock Price and number of shares
of Additional Common Stock issuable per $1,000 aggregate principal amount of
Notes:
STOCK PRICE
EFFECTIVE DATE $ 2.30 $ 2.50 $ 3.00 $ 3.50 $ 4.00 $ 4.50 $ 5.00 $ 6.00 $ 8.00 $10.00
December 8, 2004 78.90 63.00 43.48 33.96 27.91 23.60 20.23 15.31 9.30 5.93
November 18, 2005 72.09 56.47 37.63 28.84 23.51 19.80 16.95 12.85 7.86 4.97
November 18, 2006 65.13 49.33 30.55 22.46 17.98 15.00 12.81 9.71 5.95 3.71
November 18, 2007 61.19 44.32 24.39 16.70 13.01 10.80 9.24 7.06 4.41 2.82
November 18, 2008 59.75 39.71 16.33 9.34 6.97 5.81 5.01 3.88 2.47 1.62
November 18, 2009 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
If the Stock Price and Effective Date are not set forth on the table
above and the Stock Price is:
(I) between two Stock Prices on the table or the Effective Date is
between two dates on the table, the number of shares of Additional Common
Stock will be determined by straight-line interpolation between the number
of shares of Additional Common Stock set forth for the higher and lower
Stock Price and the two Effective Dates, as applicable, based on a 360-day
year;
61
(II) in excess of $10.00 per share (subject to adjustment), no
shares of Additional Common Stock will be issued upon conversion; or
(III) less than $2.30 per share (subject to adjustment), no shares
of Additional Common Stock will be issued upon conversion.
Notwithstanding anything to the contrary contained in this Section
12.1(b), no Additional Common Stock shall be issued in connection with any
Fundamental Change occurring after an adjustment to the Conversion Price has
been made pursuant to Section 12.4(g) and in lieu of the Additional Common Stock
the Company shall make an additional cash payment upon any conversion of Notes
within 30 days after notice is given with respect to a Non-Stock Fundamental
Change which cash payment shall equal to the product of the Additional Common
Stock otherwise issuable multiplied by the average of Applicable Stock Prices
for the 20 Trading Days following the Conversion Date. In the event that a
Non-Stock Fundamental Change occurs and the Conversion Price has not been
previously adjusted pursuant to Section 12.4(g), the Company may, at its
election, issue the Additional Common Stock upon the conversion of Notes within
30 days after notice is given with respect to a Non-Stock Fundamental Change or
make an additional cash payment in lieu thereof on the basis described in the
preceding sentence, or a combination thereof, with the cash payment being
determined on the basis described in the preceding sentence with respect to any
Additional Common Stock that is not delivered; provided, however, that if the
number of shares of Additional Common Stock issuable in relation to a Non-Stock
Fundamental Change would result in the Company issuing shares of Additional
Common Stock in an amount resulting in the total number of shares of Common
Stock issuable upon conversion of the Notes exceeding 19.9% of the Common Stock
outstanding at the time of the initial issuance of the Notes, then the Company
shall be deemed to have elected to pay cash in respect of those shares of
Additional Common Stock as a result of which we would otherwise exceed the 19.9%
threshold, which cash payment shall be made on the same basis as the other cash
payments pursuant to this paragraph.
SECTION 12.2. Exercise of Conversion Right.
(a) To exercise the conversion right with respect to a Physical
Note, a Holder must (1) complete a conversion notice, the form of which is
provided in Exhibit C, to the Depositary stating that the Holder elects to
convert such Physical Note or, if less than the entire principal amount thereof
is to be converted, the portion thereof to be converted, (2) deliver duly signed
completed conversion notice and the Physical Note duly endorsed or assigned to
the Company or in blank, at the office of any Conversion Agent, (3) pay all
Interest and Additional Interest, if any, to which the Holder is not entitled,
if any, pursuant to Section 2.1(e) and (4) pay any transfer taxes or other
applicable taxes or duties, if required.
(b) To convert interests in a Global Note issued pursuant to Rule
144A, a Holder must deliver to the Depositary the appropriate instruction form
for conversion pursuant to the Depositary's conversion program.
(c) To the extent provided in Section 2.1(e), Notes surrendered for
conversion during the period from the close of business on any Regular Record
Date to the opening of business on the next succeeding Interest Payment Date
shall be accompanied by payment by
62
such Holder in immediately available funds to the Company of an amount equal to
the Interest to be received on such Interest Payment Date on principal amount of
Notes being surrendered for conversion.
(d) Notes shall be deemed to have been converted immediately prior
to the close of business on the day of surrender of such Notes for conversion
and completion of the other conversion requirements in accordance with the
foregoing provisions, and at such time the rights of the Holders of such Notes
as Holders shall cease, and the Person or Persons entitled to receive the shares
of Common Stock issuable (or, at our election pursuant to Section 12.12, cash or
a combination of cash and shares of Common Stock), upon conversion shall be
treated for all purposes as the record holder or holders of any such shares of
Common Stock at such time.
(e) In the case of any Note which is converted in part only, or a
Holder converts less than the principal amount it owns at such time, upon such
conversion the Company shall execute and the Trustee shall authenticate and
deliver to the Holder thereof, at the expense of the Company, a new Note or
Notes of authorized denominations in principal amount equal to the unconverted
portion of the principal amount of such Note.
(f) Subject to Section 12.12, as promptly as practicable on or after
the Conversion Date, the Company shall cause to be issued and delivered to such
Conversion Agent a certificate or certificates for the number of full shares of
Common Stock issuable upon conversion of such Notes, together with payment in
lieu of any fraction of a share as provided in Section 12.3 hereof. The Company
hereby initially appoints the Trustee as the Conversion Agent.
(g) A Note in respect of which a Holder has delivered a Fundamental
Change Purchase Notice exercising the option of such Holder to require the
Company to purchase such Note may be converted only if such notice of exercise
is withdrawn in accordance with Section 11.2.
(h) A Holder of Notes is not entitled to any rights of a holder of
Common Stock until such Holder has converted its Notes to Common Stock, and only
to the extent such Notes are deemed to have been converted into Common Stock
pursuant to this Article 12.
(i) If shares of Common Stock to be issued upon conversion of a Note
which is a Restricted Security, or shares of Common Stock to be issued upon
conversion of a Restricted Security in part only, are to be registered in a name
other than that of the Holder of such Restricted Security, such Holder must
deliver to the Conversion Agent a certificate in substantially the form set
forth in Exhibit D annexed hereto, dated the date of surrender of such Note and
signed by such Holder, as to compliance with the restrictions on transfer
applicable to such Note. None of the Trustee, any Conversion Agent, Registrar or
Transfer Agent shall be required to register in a name other than that of the
Holder of shares of Common Stock or Notes issued upon conversion of any such
Note not so accompanied by a properly completed certificate.
SECTION 12.3. Fractions of Shares.
No fractional shares of Common Stock shall be issued upon conversion
of any Note or Notes. If more than one Note shall be surrendered for conversion
at one time by the
63
same Holder, the number of full shares of Common Stock which shall be issued
upon conversion thereof shall be computed on the basis of the principal amount
of the Notes (or specified portions thereof) so surrendered. Instead of any
fractional shares of Common Stock which would otherwise be issued upon
conversion of any Note or Notes (or specified portions thereof), the Company
shall pay a cash adjustment in respect of such fraction (calculated to the
nearest 1/100th of a share) in an amount equal to the same fraction of the
Market Price of the shares of Common Stock as of the Trading Day preceding the
Conversion Date.
SECTION 12.4. Adjustment of Conversion Price.
The Conversion Price shall be subject to adjustment, calculated in
good faith by the Company, from time to time as follows:
(a) In case the Company shall hereafter pay a dividend or make a
distribution to all or substantially all holders of the outstanding Common Stock
in shares of Common Stock, the Conversion Price in effect at the opening of
business on the date following the date fixed for the determination of
stockholders entitled to receive such dividend or other distribution shall be
reduced by multiplying such Conversion Price by a fraction:
(i) the numerator of which shall be the number of shares of Common
Stock outstanding at the close of business on the Conversion Record Date
fixed for such determination; and
(ii) the denominator of which shall be the sum of such number of
shares and the total number of shares constituting such dividend or other
distribution.
Such reduction shall become effective immediately after the opening
of business on the day following the Conversion Record Date. If any dividend or
distribution of the type described in this Section 12.4(a) is declared but not
so paid or made, the Conversion Price shall again be adjusted to the Conversion
Price which would then be in effect if such dividend or distribution had not
been declared.
(b) In case the outstanding shares of Common Stock shall be
subdivided or reclassified into a greater number of shares of Common Stock, the
Conversion Price in effect at the opening of business on the day following the
day upon which such subdivision or reclassification becomes effective shall be
proportionately reduced, and conversely, in case outstanding shares of Common
Stock shall be combined or reclassified into a smaller number of shares of
Common Stock, the Conversion Price in effect at the opening of business on the
day following the day upon which such combination or reclassification becomes
effective shall be proportionately increased.
Such reduction or increase, as applicable, shall become effective
immediately after the opening of business on the day following the day upon
which such subdivision or combination or reclassification becomes effective.
(c) In case the Company shall issue rights or warrants (other than
any rights or warrants issued pursuant to a rights plan) referred to in Section
12.4(d)) to all or substantially all holders of its outstanding shares of Common
Stock entitling them to subscribe for or purchase
64
shares of Common Stock (or securities convertible into shares of Common Stock)
at a price per share (or having a conversion price per share) less than the
Current Market Price on the Conversion Record Date fixed for the determination
of stockholders entitled to receive such rights or warrants, the Conversion
Price shall be adjusted so that the same shall equal the price determined by
multiplying the Conversion Price in effect at the opening of business on the
date after such Conversion Record Date by a fraction:
(i) the numerator of which shall be the number of shares of Common
Stock outstanding at the close of business on the Conversion Record Date,
plus the number of shares which the aggregate offering price of the total
number of shares so offered for subscription or purchase (or the aggregate
conversion price of the convertible securities so offered) would purchase
at such Current Market Price; and
(ii) the denominator of which shall be the number of shares of
Common Stock outstanding on the close of business on the Conversion Record
Date, plus the total number of additional shares of Common Stock so
offered for subscription or purchase (or into which the convertible
securities so offered are convertible).
Such adjustment shall become effective immediately after the opening
of business on the day following the Conversion Record Date fixed for
determination of stockholders entitled to receive such rights or warrants. To
the extent that shares of Common Stock (or securities convertible into Common
Stock) are not delivered pursuant to such rights or warrants, upon the
expiration or termination of such rights or warrants, the Conversion Price shall
be readjusted to the Conversion Price which would then be in effect had the
adjustments made upon the issuance of such rights or warrants been made on the
basis of the delivery of only the number of shares of Common Stock (or
securities convertible into Common Stock) actually delivered. In the event that
such rights or warrants are not so issued, the Conversion Price shall again be
adjusted to be the Conversion Price which would then be in effect if such date
fixed for the determination of stockholders entitled to receive such rights or
warrants had not been fixed. In determining whether any rights or warrants
entitle the Holders to subscribe for or purchase Common Stock at less than such
Current Market Price, and in determining the aggregate offering price of such
shares of Common Stock, there shall be taken into account any consideration
received for such rights or warrants, the value of such consideration if other
than cash, to be determined by the Board of Directors.
(d) In case the Company shall, by dividend or otherwise, distribute
to all or substantially all holders of its Common Stock shares of any class of
Capital Stock of the Company (other than any dividends or distributions to which
Section 12.4(a) applies) or evidences of its Indebtedness, cash or other assets,
including securities, but excluding:
(i) any rights or warrants referred to in Section 12.4(c);
(ii) dividends or distributions of stock, securities or other
property or assets (including cash) in connection with a reclassification,
change, merger, consolidation, statutory share exchange, combination, sale
or conveyance to which Section 12.5 applies;
(iii) dividends and distributions paid exclusively in cash; and
65
(iv) distributions of Common Stock referred to in Section 12.4(a)
(such Capital Stock, evidence of its Indebtedness, cash, other assets or
securities being distributed hereinafter in this Section 12.4(d) called
the "DISTRIBUTED ASSETS"),
then, in each such case, the Conversion Price shall be reduced so that the same
shall be equal to the price determined by multiplying the Conversion Price in
effect immediately prior to the close of business on the Conversion Record Date
with respect to such distribution by a fraction:
(i) the numerator of which shall be the Current Market Price on such
date, less the Fair Market Value (as determined by the Board of Directors,
whose good faith determination shall be conclusive and set forth in a
Board Resolution) on such date of the portion of the distributed assets so
distributed applicable to one share of Common Stock (determined on the
basis of the number of shares of Common Stock outstanding on the
Conversion Record Date); and
(ii) the denominator of which shall be such Current Market Price on
such Conversion Record Date.
Such reduction shall become effective immediately prior to the opening of
business on the day following the Conversion Record Date. However, in the event
that the then Fair Market Value (as so determined) of the portion of the
distributed assets so distributed applicable to one share of Common Stock is
equal to or greater than the Current Market Price on the Conversion Record Date,
in lieu of the foregoing adjustment, adequate provision shall be made so that
each Holder shall have the right to receive upon conversion of a Note (or any
portion thereof) the amount of distributed assets such Holder would have
received had such Holder converted such Note (or portion thereof) immediately
prior to such Conversion Record Date. In the event that such dividend or
distribution is not so paid or made, the Conversion Price shall again be
adjusted to be the Conversion Price that would then be in effect if such
dividend or distribution had not been declared.
If the Board of Directors determines the Fair Market Value of any
distribution for purposes of this Section 12.4(d) by reference to the actual or
when issued trading market for any distributed assets comprising all or part of
such distribution, it must in doing so consider the prices in such market over
the same period (the "REFERENCE PERIOD") used in computing the Current Market
Price to the extent possible, unless the Board of Directors in a Board
Resolution determines in good faith that determining the Fair Market Value
during the Reference Period would not be in the best interest of the Holders.
Rights or warrants distributed by the Company to all holders of
Common Stock entitling the holders thereof to subscribe for or purchase shares
of the Company's Capital Stock (either initially or under certain
circumstances), which rights or warrants, until the occurrence of a specified
event or events specified in such rights or warrants or related instruments or
agreements governing the same (a "TRIGGER EVENT"):
(A) are deemed to be transferred with such shares of Common Stock;
(B) are not exercisable; and
66
(C) are also issued in respect of future issuances of Common Stock;
shall be deemed not to have been distributed for purposes of this Section
12.4(d) (and no adjustment to the Conversion Price under this Section 12.4(d)
will be required) until the occurrence of the earliest Trigger Event. If such
right or warrant is subject to subsequent events, upon the occurrence of which
such right or warrant shall become exercisable to purchase different distributed
assets, shares of Capital Stock, evidences of Indebtedness or other assets or
entitle the Holder to purchase a different number or amount of the foregoing or
to purchase any of the foregoing at a different purchase price, then the
occurrence of each such event shall be deemed to be the date of issuance and the
Conversion Record Date with respect to a new right or warrant (and a termination
or expiration of the existing right or warrant without exercise by the Holder
thereof). In addition, in the event of any distribution (or deemed distribution)
of rights or warrants, or any Trigger Event or other event (of the type
described in the preceding sentence) with respect thereto, that resulted in an
adjustment to the Conversion Price under this Section 12.4(d):
(i) in the case of any such rights or warrants which shall all have
been redeemed or purchased without exercise by any Holders thereof, the
Conversion Price shall be readjusted upon such final redemption or
purchase to give effect to such distribution or Trigger Event, as
applicable, as though it were a cash distribution, equal to the per share
redemption or purchase price received by a holder of Common Stock with
respect to such rights or warrants (assuming such holder had retained such
rights or warrants), made to all holders of Common Stock as of the date of
such redemption or purchase; and
(ii) in the case of such rights or warrants which shall have expired
or been terminated without exercise, the Conversion Price shall be
readjusted as if such rights and warrants had never been issued.
For purposes of this Section 12.4(d) and Sections 12.4(a), 12.4(b)
and 12.4(c), any dividend or distribution to which this Section 12.4(d) is
applicable that also includes shares of Common Stock, a subdivision or
combination of Common Stock to which Section 12.4(b) applies, or rights or
warrants to subscribe for or purchase shares of Common Stock to which Section
12.4(c) applies (or any combination thereof), shall be deemed instead to be:
(1) a dividend or distribution of the evidences of Indebtedness,
assets, shares of Capital Stock, rights or warrants, other than such
shares of Common Stock, such subdivision or combination or such rights or
warrants to which Sections 12.4(a), 12.4(b) and 12.4(c) apply,
respectively (and any Conversion Price reduction required by this Section
12.4(d) with respect to such dividend or distribution shall then be made),
immediately followed by
(2) a dividend or distribution of such shares of Common Stock, such
subdivision or combination or such rights or warrants (and any further
Conversion Price reduction required by Sections 12.4(a), 12.4(b) and
12.4(c) with respect to such dividend or distribution shall then be made),
except:
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(A) the Conversion Record Date of such dividend or distribution
shall be substituted as (x) "the date fixed for the
determination of stockholders entitled to receive such
dividend or other distribution", "Conversion Record Date fixed
for such determinations" and "Conversion Record Date" within
the meaning of Section 12.4(a), (y) "the day upon which such
subdivision becomes effective" and "the day upon which such
combination becomes effective" within the meaning of Section
12.4(b), and (z) as "the date fixed for the determination of
stockholders entitled to receive such rights or warrants",
"the Conversion Record Date fixed for the determination of the
stockholders entitled to receive such rights or warrants" and
such "Conversion Record Date" within the meaning of Section
12.4(c); and
(B) any shares of Common Stock included in such dividend or
distribution shall not be deemed "outstanding at the close of
business on the date fixed for such determination" within the
meaning of Section 12.4(a) and any reduction or increase in
the number of shares of Common Stock resulting from such
subdivision or combination shall be disregarded in connection
with such dividend or distribution.
In the event of any distribution referred to in Section 12.4(c) or
12.4(d), the Company will be required to give notice to the Holders at least 20
days prior to the Ex-Dividend Time for the distribution. No adjustment to the
Conversion Price or the ability of a Holder to convert will be made if the
Holder will otherwise participate in such distribution without conversion.
(e) In case the Company shall, by dividend or otherwise, make a
distribution to all or substantially all holders of its Common Stock consisting
exclusively of cash, other than any dividend or distribution made in connection
with the liquidation, dissolution or winding-up of the Company, whether
voluntary or involuntary, then, in such case, unless the Company elects to
reserve such cash for distribution to the Holders of the Notes upon the
conversion of the Notes so that any such Holder converting Notes will receive
upon such conversion, in addition to the shares of Common Stock to which such
Holder is entitled, the amount of cash which such Holder would have received if
such Holder had, immediately prior to the record date for such distribution of
cash, converted its Notes into Common Stock, the Conversion Price shall be
adjusted so that the same shall equal the rate determined by multiplying the
Conversion Price in effect immediately prior to the close of business on such
Conversion Record Date by a fraction of which the numerator shall be such
Current Market Price of the Common Stock on the record date less the amount of
cash so distributed (and not excluded as provided above) applicable to one share
of Common Stock and the denominator of which shall be the Current Market Price
of the Common Stock on such Conversion Record Date; such adjustment to be
effective immediately prior to the opening of business on the Business Day
following the record date; provided, however, that in the event the portion of
the cash so distributed applicable to one share of Common Stock is equal to or
greater than the Current Market Price of the Common Stock on the Conversion
Record Date, in lieu of the foregoing adjustment, adequate provision shall be
made so that each Holder of a Note shall have the right to receive upon
conversion the amount of cash such Holder would have received had such Holder
converted each Note on the Conversion
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Record Date. If such dividend or distribution is not so paid or made, the
Conversion Price shall again be adjusted to be the Conversion Price that would
then be in effect if such dividend or distribution had not been declared.
(f) In case a tender or exchange offer made by the Company or any
Subsidiary for all or any portion of the Common Stock shall expire and such
tender or exchange offer (as amended upon the expiration thereof) shall require
the payment to stockholders of consideration per share of Common Stock having a
Fair Market Value (as determined by the Board of Directors, whose good faith
determination shall be conclusive and described in a resolution of the Board of
Directors) that as of the last time (the "EXPIRATION TIME") tenders or exchanges
may be made pursuant to such tender or exchange offer (as it may be amended)
exceeds the Current Market Price of a share of Common Stock on the Trading Day
next succeeding the Expiration Time, the Conversion Price shall be reduced so
that the same shall equal the price determined by multiplying the Conversion
Price in effect immediately prior to the Expiration Time by a fraction,
(i) the numerator of which shall be the number of shares of
Common Stock Outstanding (including any tendered or exchanged shares) at
the Expiration Time multiplied by the Current Market Price of a share of
Common Stock on the Trading Day next succeeding the Expiration Time; and
(ii) the denominator of which shall be the sum of (x) the Fair
Market Value (determined as aforesaid) of the aggregate consideration
payable to stockholders based on the acceptance (up to any maximum
specified in the terms of the tender or exchange offer) of all shares
validly tendered or exchanged and not withdrawn as of the Expiration Time
(the shares deemed so accepted, up to any such maximum, being referred to
as the "PURCHASED SHARES"); and (y) the product of the number of shares of
Common Stock Outstanding (less any Purchased Shares) at the Expiration
Time and the Current Market Price of a share of Common Stock on the
Trading Day next succeeding the Expiration Time.
Such reduction (if any) shall become effective immediately after the
opening of business on the day following the Expiration Time. If the Company is
obligated to purchase shares pursuant to any such tender or exchange offer, but
the Company is permanently prevented by applicable law from effecting any such
purchases or all such purchases are rescinded, the Conversion Price shall again
be adjusted to be the Conversion Price that would then be in effect if such
tender or exchange offer had not been made.
For purposes of any computation under this Section 12.4(f), if the
"ex" date for any event (other than the tender offer requiring such computation)
that requires an adjustment to the Conversion Price pursuant to Section 12.4(a),
(b), (c), (d), (e) or (f) occurs on the Trading Day next succeeding the
Expiration Time for the tender or exchange offer requiring such computation, the
Current Market Price for such Trading Day shall be adjusted by multiplying such
Current Market Price by the reciprocal of the fraction by which the Conversion
Price is so required to be multiplied as a result of such other event. If the
application of this Section 12.4(f) to any tender offer would result in an
increase in the Conversion Price, no adjustment shall be made for such tender
offer under this Section 12.4(f).
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(g) (i) In addition, if, during the period beginning on the Closing
Date and ending on December 7, 2005, the Market Price of the Common Stock
is less than the Barrier Price then in effect for at least 20 Trading Days
during any 30 consecutive Trading Day period, the Conversion Price shall
immediately be reduced to a price equal to the Reset Price, with the
Conversion Price remaining subject to further adjustment pursuant to
Section 12.4(a)-(f) and Section 12.1(b); provided that there shall be no
more than one reduction of the Conversion Price pursuant to this Section
12.4(g) during the term of the Notes and provided, further, that no
adjustment shall be made pursuant to this Section 12.4(g) if a Fundamental
Change has previously occurred requiring the issuance of Additional Common
Stock or an additional cash payment in lieu thereof pursuant to Section
12.1(b) to Holders converting Notes within 30 days after notice of the
relevant Fundamental Change is given.
(ii) In the event that an adjustment to the Conversion Price is
otherwise required pursuant to Section 12.4(a)-(f), the Barrier Price and
the Reset Price shall each be adjusted at the same time as the Conversion
Price by multiplying each of the then prevailing Barrier Price and Reset
Price by a fraction, the numerator of which is the adjusted Conversion
Price and the denominator of which is the Conversion Price immediately
prior to such adjustment.
(h) For purposes of this Section 12.4, the following terms shall
have the meanings indicated:
"CURRENT MARKET PRICE" shall mean the average of the daily Market
Prices per share of Common Stock (or such other security as specified
herein) for the 10 consecutive Trading Days immediately prior to the date
in question; provided, however, that if:
(A) the "ex" date (as hereinafter defined) for any event (other
than the issuance or distribution requiring such computation)
that requires an adjustment to the Conversion Price pursuant
to Section 12.4(a), (b), (c), (d), (e) or (f) occurs during
such 10 consecutive Trading Days, the Market Price for each
Trading Day prior to the "ex" date for such other event shall
be adjusted by multiplying such Market Price by the same
fraction by which the Conversion Price is so required to be
adjusted as a result of such other event;
(B) the "ex" date for any event (other than the issuance or
distribution requiring such computation) that requires an
adjustment to the Conversion Price pursuant to Section
12.4(a), (b), (c), (d), (e) or (f) occurs on or after the "ex"
date for the issuance or distribution requiring such
computation and prior to the day in question, the Market Price
for each Trading Day on and after the "ex" date for such other
event shall be adjusted by multiplying such Market Price by
the reciprocal of the fraction by which the Conversion Price
is so required to be adjusted as a result of such other event;
and
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(C) the "ex" date for the issuance or distribution requiring
such computation is prior to the day in question, after taking
into account any adjustment required pursuant to clause (A) or
(B) of this proviso, the Market Price for each Trading Day on
or after such "ex" date shall be adjusted by adding thereto
the amount of any cash and the Fair Market Value (as
determined by the Board of Directors in a manner consistent
with any determination of such value for purposes of Section
12.4(d) or (f), whose determination shall be conclusive and
set forth in a Board Resolution) of the evidences of
Indebtedness, shares of Capital Stock or assets being
distributed applicable to one share of Common Stock as of the
close of business on the day before such "ex" date.
For purposes of any computation under Section 12.4(f), the Current
Market Price of the Common Stock on any date shall be deemed to be the average
of the daily Market Prices per share of Common Stock for such day and the next
two succeeding Trading Days; provided, however, that if the "ex" date for any
event (other than the tender offer requiring such computation) that requires an
adjustment to the Conversion Price pursuant to Section 12.4(a), (b), (c), (d),
(e) or (f) occurs on or after the Expiration Time for the tender or exchange
offer requiring such computation and prior to the day in question, the Market
Price for each Trading Day on and after the "ex" date for such other event shall
be adjusted by multiplying such Market Price by the reciprocal of the fraction
by which the Conversion Price is so required to be adjusted as a result of such
other event. For purposes of this paragraph, the term "ex" date, when used:
(1) with respect to any issuance or distribution, means the
first date on which the Common Stock trades regular way on the
relevant exchange or in the relevant market from which the Market
Price was obtained without the right to receive such issuance or
distribution;
(2) with respect to any subdivision or combination of shares
of Common Stock, means the first date on which the shares of Common
Stock trade regular way on such exchange or in such market after the
time at which such subdivision or combination becomes effective; and
(3) with respect to any tender or exchange offer, means the
first date on which the Common Stock trades regular way on such
exchange or in such market after the Expiration Time of such offer.
Notwithstanding the foregoing, whenever successive adjustments to
the Conversion Price are called for pursuant to this Section 12.4, such
adjustments shall be made to the Current Market Price as may be necessary or
appropriate to effectuate the intent of this Section 12.4 and to avoid unjust or
inequitable results as determined in good faith by the Board of Directors.
The Company may make such reductions in the Conversion Price, in
addition to those required by Sections 12.4(a), (b), (c), (d), (e) or (f), as
the Board of Directors considers to be advisable to avoid or diminish any income
tax to holders of Common Stock or rights to
71
purchase Common Stock resulting from any dividend or distribution of stock (or
rights to acquire stock) or from any event treated as such for income tax
purposes or otherwise.
(i) No adjustment need be made for (i) a transaction referred to in
Sections 12.4 or 12.5 if Holders participate in the transaction without
conversion on a basis and with notice that the Board of Directors determines to
be fair and appropriate in light of the basis and notice on which holders of
shares of Common Stock participate in the transaction; (ii) the issuance and
distribution of rights to purchase shares of Common Stock pursuant to (A) a
Company plan for reinvestment of dividends or interest, (B) a change in the par
value or no par value of the shares of Common Stock or (C) to the extent the
Notes become convertible pursuant to this Article 12 in whole or in part into
cash, with respect to such cash after such cash is distributed to the Holders in
satisfaction of such conversion right.
(j) To the extent permitted by applicable law, the Company from time
to time may reduce the Conversion Price by any amount for any period of time if
the period is at least 20 days and the reduction is irrevocable during the
period and the Board of Directors determines in good faith that such reduction
would be in the best interests of the Holders, which determination shall be
conclusive and set forth in a Board Resolution; provided, however, the Board of
Directors may not exercise such right to reduce the Conversion Price in such a
manner that will violate NASD Rule 4350(i) or any similar or successor rule as
then in effect. Whenever the Conversion Price is reduced pursuant to the
preceding sentence, the Company shall mail to the Trustee and the Conversion
Agent a notice of the reduction at least 15 days prior to the date the reduced
Conversion Price takes effect, and such notice shall state the reduced
Conversion Price and the period during which it will be in effect.
(k) No adjustment in the Conversion Price shall be required unless
such adjustment would require an increase or decrease of at least 1% in such
Conversion Price; provided, however, that any adjustments which by reason of
this Section 12.4(k) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment, regardless of whether the
aggregate adjustment is less than 1%, annually on the anniversary of the first
date of original issuance of Notes or if a Fundamental Change occurs. All
calculations under this Article 12 shall be made by the Company in good faith
and shall be made to the nearest cent or to the nearest one hundredth of a
share, as applicable.
(l) No adjustment in Conversion Price shall be required if the Fair
Market Value of any assets, debt securities or rights, warrants or options to
purchase the securities of the Company, including but not limited to Common
Stock, in each case applicable to each share of Common Stock are distributed to
the Company's stockholders and such Fair Market Value either equals or exceeds
the Current Market Price or such Current Market Price exceeds the such Fair
Market Price Value by an amount not exceeding $1.00; provided, however, that in
lieu of the adjustment foregone which by reason of this Section 12.4(l),
adequate provision shall be made so that each Holder shall have the right to
receive upon conversion of a Note, in addition to shares of Common Stock, the
kind and amount of such distribution such Holder would have received had such
Holder converted such Note immediately prior to the Record Date for determining
the shareholders entitled to receive the distribution.
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(m) In any case in which this Section 12.4 shall require that any
adjustment be made effective as of or retroactively immediately following a
Conversion Record Date, the Company may elect to defer (but only for five
Trading Days following the filing of the statement referred to in Section 12.6)
issuing to the Holder of any Notes converted after such Conversion Record Date
the shares of Common Stock issuable upon such conversion over and above the
shares of Common Stock issuable upon such conversion on the basis of the
Conversion Price prior to adjustment; provided, however, that the Company shall
deliver to such Holder a due bill or other appropriate instrument evidencing
such Holder's right to receive such additional shares upon the occurrence of the
event requiring such adjustment.
(n) For purposes of this Section 12.4, the number of shares of
Common Stock at any time outstanding shall not include shares held in the
treasury of the Company but shall include shares issuable in respect of scrip
certificates issued in lieu of fractions of shares of Common Stock. The Company
will not pay any dividend or make any distribution on shares of Common Stock
held in the treasury of the Company.
(o) If the distribution date for the rights provided in the
Company's rights agreement occurs prior to the date a Note is converted, the
Holder of the Note who converts such Note after the distribution date is not
entitled to receive the rights that would otherwise be attached (but for the
date of conversion) to the shares of Common Stock received upon such conversion;
provided, however, that an adjustment shall be made to the Conversion Price
pursuant to Section 12.4(d) as if the rights were being distributed to the
common stockholders of the Company immediately prior to such conversion. If such
an adjustment is made and the rights are later redeemed, invalidated or
terminated, then a corresponding reversing adjustment shall be made to the
Conversion Price, on an equitable basis, to take account of such event.
(p) In case the Company shall, by dividend or otherwise, distribute
to all holders of its Common Stock shares of any class of Capital Stock of a
Subsidiary, then the Conversion Price shall be reduced so that the same shall be
equal to the price determined by multiplying the Conversion Price in effect
immediately prior to the close of business on the Conversion Record Date with
respect to such distribution by a fraction:
(i) the numerator of which shall be the Current Market Price
less the Fair Market Value of the shares of Capital Stock of such
Subsidiary (as determined by the Board of Directors, whose good
faith determination shall be conclusive and set forth in a Board
Resolution) distributed per share of Common Stock, measured from the
date of such distribution; and
(ii) the denominator of which shall be the Current Market
Price of the Company's Common Stock, measured from the date of such
distribution.
SECTION 12.5. Consolidation or Merger of the Company.
If any of the following events occurs, namely:
(a) any reclassification or change of the outstanding Common Stock
(other than a change in par value, or from par value to no par value, or
from no par value to par value, or as a result of a subdivision or
combination) as a result of which holders of Common
73
Stock shall be entitled to receive Capital Stock, securities or other
property or assets (including cash) with respect to or in exchange for
such Common Stock;
(b) any merger, consolidation, statutory share exchange or
combination of the Company with another Person as a result of which
holders of Common Stock shall be entitled to receive stock, securities or
other property or assets (including cash or any combination thereof) with
respect to or in exchange for such Common Stock; or
(c) any sale or conveyance of all or substantially all of the
properties and assets of the Company to any other Person as a result of
which holders of Common Stock shall be entitled to receive stock,
securities or other property or assets (including cash or any combination
thereof) with respect to or in exchange for such Common Stock,
the Company or the successor or purchasing Person, as the case may be, shall
execute with the Trustee a supplemental indenture (which shall comply with the
Trust Indenture Act as in force at the date of execution of such supplemental
indenture, if such supplemental indenture is then required to so comply)
providing that such Notes shall be convertible into the kind and amount of
shares of stock and other securities or property or assets (including cash)
which such Holder would have been entitled to receive upon such
reclassification, change, merger, consolidation, statutory share exchange,
combination, sale or conveyance had such Notes been converted into Common Stock
immediately prior to such reclassification, change, merger, consolidation,
statutory share exchange, combination, sale or conveyance assuming such holder
of Common Stock did not exercise its rights of election, if any, as to the kind
or amount of securities, cash or other property receivable upon such merger,
consolidation, statutory share exchange, sale or conveyance (provided that if
the kind or amount of securities, cash or other property receivable upon such
merger, consolidation, statutory share exchange, sale or conveyance is not the
same for each share of Common Stock in respect of which such rights of election
shall not have been exercised ("NON-ELECTING SHARE"), then for the purposes of
this Section 12.5, the kind and amount of securities, cash or other property
receivable upon such merger, consolidation, statutory share exchange, sale or
conveyance for each Non-Electing Share shall be deemed to be the kind and amount
so receivable per share by a plurality of the Non-Electing Shares). Such
supplemental indenture shall provide for adjustments that shall be as nearly
equivalent as may be practicable to the adjustments provided for in this Article
12. If, in the case of any such reclassification, change, merger, consolidation,
statutory share exchange, combination, sale or conveyance, the stock or other
securities and assets receivable thereupon by a holder of Common Stock includes
shares of stock or other securities and assets of a Person other than the
successor or purchasing Person, as the case may be, in such reclassification,
change, merger, consolidation, statutory share exchange, combination, sale or
conveyance, then such supplemental indenture shall also be executed by such
other Person and shall contain such additional provisions to protect the
interests of the Holders as the Board of Directors shall reasonably consider
necessary by reason of the foregoing, including to the extent practicable the
provisions providing for the Purchase Rights set forth in Article 11 hereof. The
Company covenants that it will not become a party to any such transaction unless
its terms are consistent with the foregoing and that the Company will not become
a party to any transaction unless any securities issuable to Holders upon
conversion of Notes are freely transferable or will be freely transferable
following completion of registration by the issuer thereof, which registration
is required in connection with the transaction and subject to penalties
consistent with the Registration Rights Agreement.
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The Company shall cause notice of the execution of such supplemental
indenture to be mailed to each Holder, at the address of such Holder as it
appears on the register of the Notes maintained by the Registrar, within 20 days
after execution thereof. Failure to deliver such notice shall not affect the
legality or validity of such supplemental indenture.
The above provisions of this Section 12.5 shall similarly apply to
successive reclassifications, mergers, consolidations, statutory share
exchanges, combinations, sales and conveyances.
If this Section 12.5 applies to any event or occurrence, Section
12.4 shall not apply. Notwithstanding this Section 12.5, if a Public Acquirer
Fundamental Change occurs and the Company elects to adjust the Conversion Price
and its conversion obligation pursuant to Section 12.15, the provisions of
Section 12.15 shall apply to the conversion instead of this Section 12.5.
Any Additional Common Stock which a Holder is entitled to receive
upon conversion pursuant to Section 12.1(b), if applicable, shall not be payable
in shares of Common Stock, but will represent a right to receive the aggregate
amount of cash, securities or other property into which the Additional Common
Stock would convert as a result of such recapitalization, consolidation, merger,
share transfer, acquisition or share exchange.
SECTION 12.6. Notice of Adjustments of Conversion Price.
Whenever the Conversion Price is adjusted as herein provided, the
Company shall promptly file with the Trustee and any Conversion Agent other than
the Trustee an Officers' Certificate setting forth the adjusted Conversion Price
and showing in reasonable detail the facts upon which such adjustment is based.
Promptly after delivery of such Officers' Certificate, the Company shall prepare
a notice or press release stating that the Conversion Price has been adjusted
and setting forth the adjusted Conversion Price and the date on which each
adjustment becomes effective, shall issue such notice or press release through
Dow Jones & Company, Inc., Business Wire or Bloomberg Business News (or, if such
organizations are not in existence at the time of issuance of such press
release, such other news or press organization as is reasonably calculated to
broadly disseminate the relevant information to the public) and shall make the
information available on the Company's website or through another public medium
as the Company may use at such time. Failure to deliver such notice shall not
affect the legality or validity of any such adjustment.
SECTION 12.7. Notice Prior to Certain Actions.
In case at any time after the date hereof:
(a) the Company shall become party to a consolidation or merger for
which approval of any stockholders of the Company is required, or enters
into the sale or conveyance to another Person or entity or group of
Persons or entities acting in concert as a partnership, limited
partnership, syndicate or other group (within the meaning of Rule 13d-3
under the Exchange Act) of all or substantially all of the property and
assets of the Company;
75
(b) the Company shall declare a dividend (or any other distribution)
on its Common Stock payable otherwise than in cash out of its capital
surplus or its consolidated retained earnings;
(c) the Company shall authorize the granting to the holders of its
Common Stock of rights or warrants to subscribe for or purchase any shares
of Capital Stock of any class (or of securities convertible into shares of
Capital Stock of any class) or of any other rights;
(d) there shall occur any reclassification of the Common Stock of
the Company (other than a subdivision or combination of its outstanding
Common Stock, a change in par value, a change from par value to no par
value or a change from no par value to par value), or any merger,
consolidation, statutory share exchange or combination to which the
Company is a party and for which approval of any stockholders of the
Company is required, or the sale, transfer or conveyance of all or
substantially all of the assets of the Company; or
(e) there shall occur the voluntary or involuntary dissolution,
liquidation or winding up of the Company;
the Company shall cause to be filed at each office or agency maintained for the
purpose of conversion of securities pursuant to Section 9.2, and shall cause to
be provided to the Trustee and all Holders in accordance with Section 14.2, at
least 20 days (or 10 days in any case specified in clause (a) or (b) above)
prior to the applicable record or effective date hereinafter specified, a notice
stating:
(i) the date on which a record is to be taken for the purpose
of such dividend, distribution, rights or warrants, or, if a record
is not to be taken, the date as of which the holders of shares of
Common Stock of record to be entitled to such dividend,
distribution, rights or warrants are to be determined; or
(ii) the date on which such reclassification, merger,
consolidation, statutory share exchange, combination, sale,
transfer, conveyance, dissolution, liquidation or winding up is
expected to become effective, and the date as of which it is
expected that holders of shares of Common Stock of record shall be
entitled to exchange their shares of Common Stock for securities,
cash or other property deliverable upon such reclassification,
merger, consolidation, statutory share exchange, sale, transfer,
dissolution, liquidation or winding up.
Neither the failure to give such notice nor any defect therein shall
affect the legality or validity of the proceedings or actions described in
clauses (a) through (e) of this Section 12.7.
SECTION 12.8. Company to Reserve Common Stock; Listing.
(a) The Company shall, in accordance with the laws of the State of
Delaware, at all times reserve and keep available, free from preemptive
rights, out of its authorized but unissued shares of Common Stock, for the
purpose of effecting the conversion of the
76
Notes, such number of its duly authorized shares of Common Stock as shall
from time to time be sufficient to effect the conversion of all Notes then
outstanding into such Common Stock at any time (assuming that, at the time
of the computation of such number of shares or securities, all such Notes
would be held by a single Holder); provided, however, that nothing
contained herein shall preclude the Company from satisfying its
obligations in respect of the conversion of the Notes by delivery of
purchased shares of Common Stock which are then held in the treasury of
the Company.
(b) If any shares of Common Stock which would be issuable upon
conversion of Notes hereunder require registration with or approval of any
governmental authority before such shares or securities may be issued upon
such conversion, the Company will in good faith and as expeditiously as
possible endeavor to cause such shares or securities to be duly registered
or approved, as the case may be. The Company further covenants that so
long as the Common Stock shall be listed on The Nasdaq Stock Market, Inc.,
the Company will, if permitted by the rules of such exchange, list and
keep listed all Common Stock issuable upon conversion of the Notes, and
the Company will endeavor to list the shares of Common Stock required to
be delivered upon conversion of the Notes prior to such delivery upon any
other national securities exchange upon which the outstanding Common Stock
is listed at the time of such delivery.
SECTION 12.9. Common Stock to be Fully Paid and Nonassessable.
The Company covenants that all Common Stock which may be issued upon
conversion of Notes will upon issue be fully paid and nonassessable and, except
as provided in Section 12.10, the Company will pay all taxes, liens and charges
with respect to the issue thereof.
SECTION 12.10. Taxes on Conversions.
Except as provided in the next sentence, the Company will pay any
and all taxes (other than taxes on income) and duties that may be payable in
respect of the issue or delivery of shares of Common Stock on conversion of
Notes pursuant to Article 12. A Holder delivering a Note for conversion shall be
liable for and will be required to pay any tax or duty which may be payable in
respect of any transfer involved in the issue and delivery of shares of Common
Stock in a name other than that of the Holder of the Note or Notes to be
converted, and no such issue or delivery shall be made unless the Person
requesting such issue has paid to the Company the amount of any such tax or
duty, or has established to the satisfaction of the Company that such tax or
duty has been paid.
SECTION 12.11. Cancellation of Converted Notes.
All Notes delivered for conversion shall be delivered to the Trustee
to be canceled by or at the direction of the Trustee.
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SECTION 12.12. Option to Satisfy Conversion Obligation with Cash,
Common Stock or Combination Thereof.
(a) Except to the extent that the Company has irrevocably elected to
make a cash payment of principal upon conversion pursuant to Section
12.12(b), the Company may elect to deliver either shares of its Common
Stock, cash or a combination of cash and shares of Common Stock in
satisfaction of the Company's obligation upon conversion of the Notes (the
"CONVERSION OBLIGATION"). The Company shall notify the Holder or Holders,
as the case may be, through the Trustee, of the method the Company chooses
to satisfy its Conversion Obligation, (i) in the Company's notice of
Fundamental Change, if a Fundamental Change occurs, (ii) 26 Trading Days
immediately preceding the Maturity Date in respect of Notes to be
converted during the period beginning 25 Trading Days immediately
preceding the Maturity Date and ending one Trading Day immediately
preceding the Maturity Date, and (iii) no later than two Trading Days
immediately following the Conversion Date in all other cases (such period,
the "SETTLEMENT NOTICE PERIOD"). If the Company elects to satisfy any
portion of its Conversion Obligation by delivering cash, the Company shall
specify in such notice the portion to be paid in cash either as a
percentage of the Conversion Obligation or as the lesser of (a) a fixed
dollar amount and (b) the Conversion Value. The Company shall treat all
Holders converting on the same Trading Day in the same manner. The Company
shall not have any obligation to satisfy Conversion Obligations arising on
different Trading Days in the same manner.
If the Company elects to satisfy any portion of the Conversion
Obligation in cash (other than cash in lieu of fractional shares, if
applicable), a Holder may retract its conversion notice at any time during the
two Trading-Day period beginning on the Trading Day after the last Trading Day
of the Settlement Notice Period (the "CONVERSION RETRACTION PERIOD"); provided
that no such retraction can be made (and a conversion notice shall be
irrevocable) (x) if the Holder delivers the conversion notice in connection with
a Fundamental Change, (y) if the Holder delivers the conversion notice during
the period beginning 25 Trading Days immediately preceding the Maturity Date and
ending one Trading Day immediately preceding the Maturity Date or (z) if the
Company has irrevocably elected pursuant to Section 12.12(b) to make a cash
payment of principal upon conversion before such Holder delivers its conversion
notice. No retraction can be made and a conversion notice shall be irrevocable
if the Company does not elect to deliver cash upon conversion.
With respect to each Holder that exercises its conversion right in
accordance with the Indenture, if such Holder's conversion notice has not been
retracted, assuming all of the other requirements have been satisfied by such
Holder, then settlement (x) in Common Stock only shall occur as soon as
practicable after the Company notifies the Holder or Holders that settlement
shall be in Common Stock only, and (y) in cash or in a combination of cash and
Common Stock shall occur on the second Trading Day following the final Trading
Day of the Conversion Period.
Settlement amounts shall be computed as follows:
78
(i) if the Company elects to satisfy the entire Conversion
Obligation in Common Stock, the Company shall deliver to such Holder, for
each $1,000 Principal amount of Notes converted, a number of shares of
Common Stock equal to the quotient of $1,000 and the Conversion Price (the
"CONVERSION RATE") in effect on the Conversion Date (plus cash in lieu of
fractional shares, if applicable, calculated as provided in Section 12.3);
(ii) if the Company elects to satisfy the entire Conversion
Obligation in cash, the Company shall deliver to such holder for each
$1,000 principal amount of Notes converted cash in an amount equal to the
Conversion Value.
(iii) if the Company elects to satisfy the Conversion
Obligation in a combination of cash (excluding any cash paid for
fractional shares, if applicable) and Common Stock (including pursuant to
Section 12.12(b) hereof), the Company shall deliver to such Holder for
each $1,000 principal amount of Notes converted:
(A) an amount in cash (the "CASH AMOUNT") equal to (x)
the fixed dollar amount per $1,000 principal
amount of Notes of the Conversion Obligation to be
satisfied in cash specified in the notice
regarding the Company's chosen method of
settlement or, if lower, the Conversion Value in
cash, or (y) the percentage of the Conversion
Obligation to be satisfied in cash specified in
the notice regarding the Company's chosen method
of settlement multiplied by the Conversion Value,
as the case may be; and
(B) a number of shares of Common Stock for each of the
20 trading days in the Conversion Period equal to
1/20th of (x) the Conversion Rate in effect on
that day minus (y) the quotient of the Cash Amount
divided by the Applicable Stock Price for that day
(plus cash in lieu of fractional shares, if
applicable, calculated as provided in Section
12.3).
(b) Notwithstanding anything to the contrary in this Indenture, at
any time prior to the 26th Trading Day preceding the Maturity Date, the
Company may irrevocably elect, in its sole discretion without the consent
of the Holders of the Notes, by written notice to the Trustee and the
Holders of the Notes, to satisfy in cash the Conversion Obligation with
respect to the Principal amount of Notes to be converted after the date of
such election, with any remaining amount of the Conversion Obligation to
be satisfied in shares of Common Stock. The settlement amount will be
computed as described under clause (a)(iii) above, using the $1,000 as the
fixed dollar amount per $1,000 principal amount of Notes of the Conversion
Obligation to be satisfied in cash.
(c) For purposes of this Section 12.12, the following terms shall
have the meanings indicated:
79
(i) "APPLICABLE STOCK PRICE" on any Trading Day means (i) the
volume-weighted average price per share of the Common Stock on such
Trading Day as displayed under the heading "Bloomberg VWAP" on Bloomberg
(or any successor service) page MSPD <equity> AQR (or any successor page)
in respect of the period from 9:30 a.m. to 4:00 p.m., New York City time,
on that Trading Day or (ii), if such price is not available, the Market
Price per share of Common Stock on that day or (iii), if neither the price
contemplated by clause (i) nor (ii) is available, the market value per
share of Common Stock on that day as determined by a nationally recognized
independent investment banking firm retained for this purpose by the
Company.
(ii) "CONVERSION PERIOD" means the 20 Trading Day period:
(A) beginning on the Maturity Date, if the Holder
delivers the conversion notice during the period
beginning 25 Trading Days immediately preceding
the Maturity Date and ending one Trading Day
immediately preceding the Maturity Date (whether
or not the Company has irrevocably elected to make
a cash payment of principal upon conversion);
(B) beginning on the Trading Day following the
Company's receipt of the Holder's conversion
notice, if the Company has irrevocably elected
pursuant to Section 12.12(b) to make a cash
payment of principal upon conversion, provided
that if the Holder submits its conversion notice
during the period beginning 25 Trading Days
immediately preceding the Maturity Date and ending
one Trading Day immediately preceding the Maturity
Date, the Conversion Period shall begin on the
Maturity Date;
(C) beginning on the Trading Day following the
Company's receipt of the Holder's conversion
notice, if the Holder is exercising its conversion
right within 30 days following a Fundamental
Change; and
(D) beginning on the Trading Day following the final
Trading Day of the Conversion Retraction Period,
in all other cases.
(iii) "CONVERSION VALUE" for every $1,000 principal amount of
a Note being converted means an amount equal to the sum of the daily
conversion values for each of the 20 Trading Days in the Conversion
Period, where the "daily conversion value" for any Trading Day equals
1/20th of:
(A) the Conversion Rate in effect on that day
multiplied by
(B) the Applicable Stock Price on that day,
provided that, with respect any conversion (i) during the period beginning
25 Trading Days immediately preceding the Maturity Date and ending one
80
Trading Day immediately preceding the Maturity Day or (ii) of a Note
converted in the period 30 days after notice of a Fundamental Change is
given, if the Applicable Stock Price on the Conversion Date exceeds the
then applicable Conversion Price, the Conversion Value shall not be less
than $1,000.
SECTION 12.13. Responsibility of Trustee for Conversion Provisions.
(a) The Trustee and any Conversion Agent shall not at any time be
under any duty or responsibility to any Holder to determine whether any facts
exist which may require any adjustment of the Conversion Price, or with respect
to the nature or intent of any such adjustments when made, or with respect to
the method employed, or herein or in any supplemental indenture provided to be
employed, in making the same. Neither the Trustee nor any Conversion Agent shall
be accountable with respect to the validity or value (of the kind or amount) of
any Common Stock or of any other securities or property, which may at any time
be issued or delivered upon the conversion of any Note; and it or they do not
make any representation with respect thereto. Neither the Trustee nor any
Conversion Agent shall be responsible for any failure of the Company to make any
cash payment or to issue, transfer or deliver any shares of stock or share
certificates or other securities or property upon the surrender of any Note for
the purpose of conversion; and the Trustee and any Conversion Agent shall not be
responsible or liable for any failure of the Company to comply with any of the
covenants of the Company contained in this Article.
SECTION 12.14. Withholding Taxes on Adjustments of the Conversion
Price.
If a taxable distribution to holders of the Company's Common Stock
or other transaction occurs which results in any adjustment of the Conversion
Price, Holders of Notes may, in certain circumstances, be deemed to have
received a distribution subject to U.S. income tax as a dividend. Because a
constructive dividend deemed received by a holder that is not a U.S. person (as
defined by Section 7701(a)(30) of the Internal Revenue Code of 1986, as amended)
would not give rise to any cash from which any applicable withholding tax could
be satisfied, the Company may set-off any such withholding tax against cash
payments payable on the Notes.
SECTION 12.15. Conversion After Public Acquirer Fundamental Change..
(a) In the event of a Public Acquirer Fundamental Change, the
Company may, in lieu of issuing the Additional Common Stock or making an
additional cash payment pursuant to Section 12.1(b), elect to adjust the
Conversion Price and the related conversion obligation such that from and
after the Effective Date of such Public Acquirer Fundamental Change,
Holders of Notes will be entitled to convert their Notes, in accordance
with Section 12.2 hereof (but subject to Section 12.12), into a number of
shares of Public Acquirer Common Stock by adjusting the Conversion Price
in effect immediately before the Public Acquirer Fundamental Change by
multiplying it by a fraction:
81
(1) the numerator of which will be the average of the
Market Prices of the Public Acquirer Common Stock for the five
consecutive Trading Days commencing on the Trading Day next
succeeding the effective date of such Public Acquirer Fundamental
Change, and
(2) the denominator of which will be (A) in the case of
a share exchange, consolidation, merger or binding share exchange,
pursuant to which the Common Stock is converted into cash,
securities or other property, the average value of all cash and any
other consideration (as determined in good faith by the Board of
Directors) paid or payable per share of Common Stock or (B) in the
case of any other Public Acquirer Fundamental Change, the average of
the Market Prices of the Common Stock for the five consecutive
Trading Days prior to but excluding the Effective Date of such
Public Acquirer Fundamental Change.
(b) The Company will notify Holders of any election pursuant to this
Section 12.15 by providing notice as set forth in Section 12.1.
SECTION 12.16. Limitation on Conversion..
A Holder of Notes may only convert Notes to the extent that such
Holder and any Group in which it is a member will not own immediately following
such conversion, outstanding shares constituting more than 14.9% of the
outstanding shares of Common Stock. When a Holder delivers any Note for
conversion, such Holder will be deemed to represent that, immediately following
conversion, such Holder and any such Group will not own outstanding shares
constituting more than 14.9% of the outstanding shares of Common Stock. To the
extent a Holder attempts to convert Notes which would result in such Holder and
any such Group beneficially owning outstanding shares constituting more than
14.9% of the outstanding shares of Common Stock, the purported conversion will
be void and such Holder will not acquire any rights in the shares of Common
Stock that would result in such Holder and any such Group owning outstanding
shares constituting more than 14.9% of the outstanding shares of Common Stock.
ARTICLE 13
[INTENTIONALLY OMITTED]
ARTICLE 14
OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 14.1. Trust Indenture Act Controls.
This Indenture is subject to the provisions of the TIA which are
required to be part of this Indenture, and shall, to the extent applicable, be
governed by such provisions.
SECTION 14.2. Notices.
82
Any notice or communication to the Company or the Trustee is duly
given if in writing (which may be by facsimile with the original to follow) and
delivered in person or mailed by first-class mail to the address set forth
below:
(a) if to the Company:
Mindspeed Technologies, Inc.
4000 MacArthur Boulevard
East Tower
Newport Beach, California 92660-3095
Attention: Brandi Steege, Esq.
Fax: (949) 579-3439
Telephone: (949) 579-3010
With a copy to:
Morrison & Foerster LLP
19900 MacArthur Boulevard
Irvine, California 92612
Attention: Robert M. Mattson, Jr.
Fax: (949) 251-0900
Telephone: (949) 251-7500
(b) if to the Trustee:
Wells Fargo Bank, N.A.
Corporate Trust Services
Sixth Street and Marquette Avenue
Minneapolis, MN 55479
Attention: Jeffrey Rose
Fax: 612-667-9825
Telephone: 612-667-0337
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 Holder 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 Holder or any defect in such notice or
communication shall not affect its sufficiency with respect to other Holders. If
the Company mails a notice or communication to Holders, it shall mail a copy to
the Trustee at the same time.
If a notice or communication is mailed or sent in the manner
provided above within the time prescribed it is duly given as of the date it is
mailed, whether or not the addressee receives it, except that notice to the
Trustee shall only be effective upon receipt thereof by the Trustee.
SECTION 14.3. Communication by Holders with Other Holders.
83
Holders may communicate pursuant to Section 312(b) of the TIA with
other Holders with respect to their rights under the Notes or this Indenture.
The Company, the Trustee, the Registrar and anyone else shall have the
protection of Section 312(c) of the TIA.
SECTION 14.4. Acts of Holders of Notes.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agent or
proxy duly appointed in writing.
Except as herein otherwise expressly provided, such action shall
become effective when such instrument or instruments or record or both are
delivered to the Trustee and, where it is hereby expressly required, to the
Company. Such instrument or instruments and record (and the action embodied
therein and evidenced thereby) are herein sometimes referred to as the "ACT" of
the Holders signing such instrument or instruments. Proof of execution of any
such instrument or of a writing appointing any such agent or proxy, or of the
holding by any Person of a Note, shall be sufficient for any purpose of this
Indenture and (subject to Section 5.1) conclusive in favor of the Trustee and
the Company if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be provided in any manner that the Trustee reasonably
deems sufficient.
(c) The principal amount and serial numbers of Notes held by any
Person, and the date of such Person holding the same, shall be proved by the
Register.
(d) Any request, demand, authorization, direction, notice, consent,
election, waiver or other Act of the Holders of any Note shall bind every future
Holder of the same Note and the Holder of every Note issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done, omitted or suffered to be done by the Trustee, the
Company in reliance thereon, whether or not notation of such action is made upon
such Note.
SECTION 14.5. Certificate and Opinion as to Conditions Precedent.
In any case where several matters are required to be certified by,
or covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an Officer of the Company may be
based, insofar as it relates to legal matters, upon an Opinion of Counsel,
unless such Officer knows, or in the exercise of reasonable care should know,
that the Opinion of Counsel with respect to the matters upon which such
certificate or opinion is based is erroneous. Any such Opinion of Counsel may be
based, insofar as it relates to factual matters, upon a certificate or
representations by, an
84
Officer or Officers of the Company stating that the information with respect to
such factual matters is in the possession of the Company unless such counsel
knows, or in the exercise of reasonable care should know, that the certificate
or representations with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Upon any application or request by the Company to the Trustee to
take any action under any provision of this Indenture, the Company shall furnish
to the Trustee an Officers' Certificate stating that all conditions precedent,
if any, provided for in this Indenture relating to the proposed action have been
complied with and an Opinion of Counsel stating that in the opinion of such
Counsel all such conditions precedent, if any, have been complied with, except
that in the case of any such application or request as to which the furnishing
of such documents is specifically required by any provision of this Indenture
relating to such particular application or request, no additional certificate or
opinion need be furnished; provided, however, that, at any time that an Opinion
of Counsel is required to be delivered hereunder, the opining counsel may, with
the consent of the Trustee, deliver to the Trustee the Opinion of Counsel in
question addressed to a party other than the Trustee with text to the effect
that the Trustee may rely on such opinion rather than by delivering a separate
Opinion of Counsel to the Trustee directly.
SECTION 14.6. Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(a) a statement that each individual signing such certificate or
opinion on behalf of the Company, has read such covenant or condition and
the definitions herein relating thereto;
(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 each such individual, he has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(d) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
SECTION 14.7. Effect of Headings and Table of Contents.
85
The Article and Section headings herein and the Table of Contents
are for convenience only and shall not affect the construction hereof.
SECTION 14.8. Successors and Assigns.
ALL covenants and agreements in this Indenture by the Company shall
bind its successors and assigns, whether so expressed or not.
SECTION 14.9. Separability Clause.
In case any provision in this Indenture or the Notes 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 14.10. Benefits of Indenture.
Nothing contained in this Indenture or in the Notes, express or
implied, shall give to any Person, other than the parties hereto and their
successors hereunder and the Holders, any benefit or legal or equitable right,
remedy or claim under this Indenture.
SECTION 14.11. Governing Law.
This Indenture and the Notes shall be governed by, and construed in
accordance with, the laws of the State of New York (including Section 5-1401 of
the General Obligations Law of the State of New York but otherwise without
regard to conflict of laws principles).
SECTION 14.12. Counterparts.
This instrument may be executed in any number of counterparts, each
of which when so executed shall be deemed to be an original but all such
counterparts shall together constitute but one and the same instrument.
SECTION 14.13. Legal Holidays.
In any case where any Interest Payment Date, Repurchase Date or
Stated Maturity of any Note or the last day on which a Holder has a right to
convert such Note shall not be a Business Day at any Place of Payment or Place
of Conversion, then (notwithstanding any other provision of this Indenture or of
the Notes) payment of Principal on, or Interest or Additional Interest, if any,
on, conversion of the Notes, need not be made at such Place of Payment or Place
of Conversion on such day, but may be made on the next succeeding Business Day
at such Place of Payment or Place of Conversion with the same force and effect
as if made on the Interest Payment Date, Repurchase Date or at the Stated
Maturity or on such last day for conversion;
86
provided, however, that in the case that payment is made on such succeeding
Business Day, no Interest shall accrue on the amount so payable for the period
from and after such Interest Payment Date, Repurchase Date or Stated Maturity,
as applicable.
SECTION 14.14. Recourse Against Others.
No recourse for the payment of the Principal of or Interest or
Additional Interest, if any, on any Notes, or for any claim based thereon or
otherwise in respect thereof, shall be had against any incorporator,
stockholder, officer or director or manager, as such, past, present or future,
of the Company or any successor entity to either the Company or such successor
entity, whether by virtue of any constitution, statute or rule of law or by the
enforcement of any assessment or penalty or otherwise, all such liability being,
by the acceptance thereof and as part of the consideration for the issue
thereof, expressly waived and released.
SECTION 14.15. Tax Treatment.
The Company agrees, and by acceptance of beneficial ownership
interest in the Notes each beneficial holder of the Notes will be deemed to have
agreed, for United States federal income tax purposes to treat the Notes as
indebtedness that is not subject to the contingent payment debt instrument
regulations under Treas. Reg. Sec. 1.1275-4.
87
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed all as of the day and year first above written.
MINDSPEED TECHNOLOGIES, INC.
By: /s/ Simon Biddiscombe
--------------------------------
Name: Simon Biddiscombe
Title: Senior Vice President,
Chief Financial Officer,
Secretary and Treasurer
WELLS FARGO BANK, N.A.,
AS TRUSTEE AND NOT IN ITS INDIVIDUAL
CAPACITY
By: /s/ Jeffery Rose
--------------------------------
Name: Jeffery Rose
Title: Corporate Trust Officer
EXHIBIT A
FORM OF NOTE
[If a Global Note, insert:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS TO
NOMINEES OF THE DEPOSITORY TRUST COMPANY OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN
ARTICLE TWO OF THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.]
[If a Restricted Security, insert:
THE NOTE EVIDENCED BY THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS, AND MAY NOT BE OFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED,
ENCUMBERED OR OTHERWISE DISPOSED OF EXCEPT AS SET FORTH IN THE FOLLOWING
SENTENCE. BY ACQUISITION HEREOF, THE HOLDER:
(1) REPRESENTS THAT IT IS A "QUALIFIED INSTITUTIONAL BUYER" AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT;
(2) REPRESENTS THAT IT IS PURCHASING FOR ITS OWN ACCOUNT OR THE
ACCOUNT OF ONE OR MORE QUALIFIED INSTITUTIONAL BUYERS IN ACCORDANCE
WITH RULE 144A;
(3) AGREES THAT IT WILL NOT WITHIN TWO YEARS AFTER THE ORIGINAL
ISSUANCE OF THIS NOTE RESELL OR OTHERWISE TRANSFER THE NOTE
EVIDENCED HEREBY OR THE COMMON STOCK ISSUABLE UPON CONVERSION OF
SUCH NOTE EXCEPT (A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, (B)
TO A QUALIFIED INSTITUTIONAL BUYER IN
A-1
COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C) PURSUANT TO
THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE
SECURITIES ACT (IF AVAILABLE), OR (D) PURSUANT TO A REGISTRATION
STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT
AND WHICH CONTINUES TO BE EFFECTIVE AT THE TIME OF SUCH TRANSFER;
AND
(4) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THE NOTE
EVIDENCED HEREBY IS TRANSFERRED (OTHER THAN A TRANSFER PURSUANT TO
CLAUSE 3(C) OR 3(D) ABOVE) A NOTICE SUBSTANTIALLY TO THE EFFECT OF
THIS LEGEND.
IN CONNECTION WITH ANY TRANSFER OF THE NOTE EVIDENCED HEREBY WITHIN
TWO YEARS AFTER THE LAST DATE OF ORIGINAL ISSUANCE OF SUCH NOTE (OTHER THAN A
TRANSFER PURSUANT TO CLAUSE 3(D) ABOVE), THE HOLDER MUST CHECK THE APPROPRIATE
BOX SET FORTH ON THE REVERSE HEREOF RELATING TO THE MANNER OF SUCH TRANSFER AND
SUBMIT THIS CERTIFICATE TO THE TRUSTEE (OR ANY SUCCESSOR TRUSTEE, AS
APPLICABLE). IF THE PROPOSED TRANSFER IS PURSUANT TO CLAUSE 3(C) ABOVE, THE
HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE TRUSTEE (OR ANY SUCCESSOR
TRUSTEE, AS APPLICABLE), SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER
INFORMATION AS THE COMPANY OR THE TRUSTEE MAY REASONABLY REQUIRE TO CONFIRM THAT
SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION
NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THIS LEGEND
WILL BE REMOVED UPON THE EARLIER OF THE TRANSFER OF THE NOTE EVIDENCED HEREBY
PURSUANT TO CLAUSE 3(C) OR 3(D) ABOVE OR THE EXPIRATION OF TWO YEARS FROM THE
LAST DATE OF ORIGINAL ISSUANCE OF THE NOTE EVIDENCED HEREBY.]
A-2
MINDSPEED TECHNOLOGIES, INC.
3.75% CONVERTIBLE SENIOR NOTES DUE 2009
CUSIP NO. _________
NO. __ PRINCIPAL AMOUNT $____________
[if a Global Note, insert: as such
amount may be revised by the Schedule
of Increases and Decreases in Global
Note attached hereto]
Mindspeed Technologies, Inc., a Delaware corporation (including any
successor corporation under the Indenture hereinafter referred to, the
"COMPANY"), for value received, hereby promises to pay to _________________, or
its registered assigns, the principal sum of ____________ U.S. Dollars
($_____________), [if a Global Note, insert: as revised by the Schedule of
Increases and Decreases in Global Note attached hereto,] on November 18, 2009.
Interest Payment Dates: May 18 and November 18, commencing May 18,
2005.
Regular Record Dates: May 1 and November 1.
Reference is hereby made to the further provisions of this Note set
forth below, which further provisions shall for all purposes have the same
effect as if set forth at this place.
IN WITNESS WHEREOF, the Company has caused this Note to be duly
executed manually or by facsimile by its duly authorized officers.
Mindspeed Technologies, Inc.
By: ________________________________
Name:
Title:
Dated: _____ __, 200__
A-3
Trustee's Certificate of Authentication
This is one of the 3.75% Convertible Senior Notes due 2009 described in the
within-named Indenture.
Wells Fargo Bank, N.A., as TRUSTEE
By: _____________________________
Authorized Signatory
Dated: _____ __, 200__
A-4
MINDSPEED TECHNOLOGIES, INC.
3.75% CONVERTIBLE SENIOR NOTE DUE 2009
SECTION 1 Indenture; Notes.
This Note is one of a duly authorized series of the 3.75%
Convertible Senior Notes due 2009 (the "NOTES") of Mindspeed Technologies, Inc.,
a Delaware corporation (including any successor Person under the Indenture
hereinafter referred to, the "COMPANY"), issued under an Indenture, dated as of
December 8, 2004 (the "INDENTURE"), between the Company and Wells Fargo Bank,
N.A., as trustee (the "TRUSTEE"). The terms of the Note include those stated in
the Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939, as amended ("TIA"). This Note is subject to all such
terms, and Holders are referred to the Indenture and the TIA for a statement of
all such terms. To the extent permitted by applicable law, in the event of any
inconsistency or difference between the terms of this Note and the terms of the
Indenture, the terms of the Indenture shall control. Capitalized terms used but
not defined herein have the meanings assigned to them in the Indenture.
The Notes will be partially secured pursuant to the terms of the
Pledge Agreement by Pledged Securities (as defined in the Pledge Agreement).
SECTION 2 Principal and Interest.
The Company promises to pay Interest on the principal amount of the
Notes at the Interest Rate from the date of issuance until repayment in full at
Stated Maturity or repurchase. The Company will pay Interest on this Note
semi-annually, in arrears, on May 18 and November 18 of each year (each, an
"INTEREST PAYMENT DATE"), commencing May 18, 2005.
The Notes shall bear Interest from December 8, 2004 until the
Principal thereof is paid or made available for payment, or until such date on
which the Notes are converted or purchased as provided herein, at a rate of
3.75% per annum.
Interest on the Notes shall be computed (i) for any full semi-annual
period for which a particular Interest Rate is applicable, on the basis of a
360-day year comprised of twelve 30-day months and (ii) for any period for which
a particular Interest Rate is applicable for less than a full semiannual period
for which Interest is calculated, on the basis of a 30-day month and, for such
periods of less than a month, the actual number of days elapsed over a 30-day
month.
In addition, Holders shall be entitled to receive Additional
Interest, if any, on such Note pursuant and subject to the Registration Rights
Agreement, but in no event shall a Holder be required to repay any Additional
Interest such Holder receives following the remittance of Interest as specified
in Section 2.1(e)(iii) of the Indenture. Additional Interest shall be paid on
dates corresponding to the payment date of Interest on such Note pursuant to the
Registration Rights Agreement.
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Further reference is made to Sections 2.1 of the Indenture for other
provisions of the Notes relating to the payment of Interest.
If the Company fails to make a payment of Principal of or Interest
on any Note when due and payable, it shall pay such Interest on such amounts (to
the extent lawful), which shall be calculated using the applicable Interest Rate
(such amounts, the "DEFAULTED INTEREST"). It may elect to pay such Defaulted
Interest, plus any other Interest payable on it, to the Persons who are Holders
on which the Interest is due on a subsequent special record date. The Company
shall notify the Trustee in writing of the amount of Defaulted Interest proposed
to be paid on each such Note. The Company shall fix any such special record date
and payment date for such payment. At least 15 days before any such special
record date, the Company shall mail to Holders affected thereby a notice that
states the special record date, the Interest Payment Date and amount to be paid.
SECTION 3 Method of Payment.
Interest on this Note which is payable, and is punctually paid or
duly provided for, on any Interest Payment Date shall be paid to the Person in
whose name that Note (or one or more Predecessor Notes) is registered at the
close of business on the Regular Record Date for such Interest.
Principal of and Interest on Global Notes will be payable, for the
benefit of the Holders of this Note, to the Depositary in immediately available
funds.
Principal on Physical Notes will be payable at the office or agency
of the Company maintained for such purpose, initially the Corporate Trust Office
of the Trustee. Interest on Physical Notes will be payable by (i) a U.S. Dollar
check drawn on a U.S. bank mailed to the address of the Person entitled thereto
as such address shall appear in the Register, or (ii) upon application to the
Registrar not later than the 5 Business Days prior to the date of Stated
Maturity by a Holder of an aggregate Principal amount of Notes in excess of
$5,000,000, wire transfer in immediately available funds.
SECTION 4 Paying Agent and Registrar.
Initially, the Trustee will act as Paying Agent and Registrar. The
Company may change the Paying Agent or Registrar without notice to any Holder.
SECTION 5 Optional Redemption.
The Notes may not be redeemed by the Company prior to maturity.
SECTION 6 Purchase Right Upon a Fundamental Change.
Reference is made to Article 11 of the Indenture regarding the
Company's obligations to the Holders upon a Fundamental Change and the Holders'
rights to require the Company to repurchase their Notes upon a Fundamental
Change, which is incorporated into this Note by reference as if stated herein in
its entirety.
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SECTION 7 Conversion Right and Limitation on Conversion Right.
Reference is made to Article 12 of the Indenture regarding the
Holders' right to convert their Notes and related matters, which is incorporated
into this Note by reference as if stated herein in its entirety.
A Holder of Notes may only convert Notes to the extent that such
Holder and any Group of which it is a member will not own immediately following
such conversion, outstanding shares constituting more than 14.9% of the
outstanding shares of Common Stock and when a Holder delivers any Note for
conversion, such Holder will be deemed to represent that, immediately following
conversion, such Holder and any such Group will not own outstanding shares
constituting more than 14.9% of the outstanding shares of Common Stock. To the
extent a Holder attempts to convert Notes which would result in such Holder and
any such Group beneficially owning outstanding shares constituting more than
14.9% of the outstanding shares of Common Stock, the purported conversion will
be void and such Holder will not acquire any rights in the shares of Common
Stock that would result in such Holder and any such Group owning outstanding
shares constituting more than 14.9% of the outstanding shares of Common Stock.
SECTION 8 No Sinking Fund.
The Notes are not subject to a sinking fund.
SECTION 9 Absolute Obligation.
No reference herein to the Indenture and no provision of this Note
or of the Indenture shall alter or impair the obligation of the Company under
the Indenture and this Note which is absolute and unconditional, to pay the
Principal of or Interest on this Note at the place and time and in the coin or
currency herein prescribed.
SECTION 10 Denominations; Transfer; Exchange.
The Notes are issuable in registered form, without coupons, in
denominations of $1,000 and integral multiples of $1,000 in excess thereof. A
Holder may transfer and register the transfer or exchange of Notes in accordance
with the Indenture.
Pursuant to the Indenture, when this Note (or any portion thereof in
integral multiples of $1,000 in principle amount) is presented to the Registrar
with a request to register the transfer or to exchange it for an equal principal
amount of other authorized denominations, the Registrar shall register the
transfer or make the exchange as requested if the requirements hereunder for
such transactions are met (including that such portions thereof are duly
endorsed or accompanied by a written instrument of transfer duly executed by the
Holder thereof or by an attorney who is authorized in writing to act on behalf
of the Holder). Subject to Section 2.4 of the Indenture, to permit registrations
of transfers and exchanges, the Company shall execute and the Trustee shall
authenticate Notes at the Registrar's request. No service charge shall be made
for any registration of transfer or exchange of the Notes, but the Company may
require payment of a sum sufficient to cover any transfer tax or similar
governmental charge payable in
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connection therewith (other than any such transfer taxes or other similar
governmental charge payable upon exchanges pursuant to Sections 2.14 or 7.5 of
the Indenture).
Pursuant to the Indenture, neither the Company nor the Registrar
shall be required to exchange or register a transfer of this Note (or any
portion thereof) surrendered for conversion or, if a portion of this Note is
surrendered for conversion, such portion thereof surrendered for conversion.
In the event of conversion or purchase of the Notes in part only, a
new Note or Notes for the unconverted or unpurchased portion thereof will be
issued in the name of the Holder hereof.
SECTION 11 Persons Deemed Owners.
The registered Holder of this Note shall be treated as its owner for
all purposes.
SECTION 12 Discharge Prior to Stated Maturity.
Subject to certain conditions contained in the Indenture, the
Company may discharge its obligations under the Notes and the Indenture if
(1)(A) all of the Outstanding Notes shall become due and payable at their
scheduled Stated Maturity or (B) all of the Outstanding Notes have all been
converted, and (2) the Company shall have deposited with the Trustee cash or, in
the event of a conversion pursuant to the terms of the Indenture, cash and/or
Common Stock, sufficient to pay all amounts due and owing on all Outstanding
Notes on the date of their scheduled maturity or delivery of the converted Note.
SECTION 13 Amendment; Supplement; Waiver.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Notes under the Indenture at any
time by the Company and the Trustee with the consent of the Holders of a
majority of the aggregate principal amount of the Outstanding Notes. The
Indenture also contains provisions permitting the Holders of specified
percentages in principal amount of the Notes at the time Outstanding, on behalf
of the Holders of all the Notes, to waive compliance by the Company with certain
provisions of the Indenture and certain past defaults under the Indenture and
their consequences and to make any changes or modifications necessary in
connection with the registration of the Notes under the Securities Act as
contemplated in the Registration Rights Agreement.
No reference herein to the Indenture and no provision of this Note
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the Principal of and Interest on this Note
at the times, places and rate, and in the coin or currency, herein prescribed or
to convert this Note (or pay cash in lieu of conversion) as provided in the
Indenture.
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SECTION 14 Defaults and Remedies.
Reference is made to the Indenture for the Events of Default,
remedies and related provisions with respect to the Notes, which is incorporated
into this Note by reference as if stated herein in its entirety.
SECTION 15 Authentication.
This Note shall not be valid until the Trustee executes the
certificate of authentication in the space provided therefor on the Note.
SECTION 16 Abbreviations.
Customary abbreviations may be used in the name of a Holder or an
assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the
entireties), JT TEN (= joint tenants with right of survivorship and not as
tenants in common), CUST (= Custodian) and U/G/M/A (= Uniform Gifts to Minors
Act).
SECTION 17 CUSIP Numbers.
Pursuant to a recommendation promulgated by the Committee on Uniform
Note Identification Procedures, the Company has caused one or more CUSIP
numbers, as appropriate, to be printed on this Note and the Trustee may use
CUSIP numbers in notices as a convenience to Holders. No representation is made
as to the accuracy of such numbers either as printed on this Note or as
contained in any notice and reliance may be placed only on the other
identification numbers placed thereon.
SECTION 18 Governing Law.
The Indenture and this Note shall be governed by, and construed in
accordance with, the laws of the State of New York (including Section 5-1401 of
the General Obligations Law of the State of New York but otherwise without
regard to conflict of laws principles).
SECTION 19 Successor Corporation.
In the event a successor Person assumes all the obligations of the
Company under this Note pursuant to the terms hereof and of the Indenture, the
Company will be released from all such obligations.
SECTION 20 Registration Rights.
The Holders of the Notes are entitled to the benefits of a Resale
Registration Rights Agreement, dated as of December 8, 2004, between the Company
and Lehman Brothers Inc., including the receipt of Additional Interest upon a
registration default (as defined in such agreement).
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SECTION 21 Tax Treatment.
The Company agrees, and by acceptance of beneficial ownership
interest in the Notes each beneficial holder of the Notes will be deemed to have
agreed, for United States federal income tax purposes to treat the Notes as
indebtedness that is not subject to the contingent payment debt instrument
regulations under Treas. Reg. Sec. 1.1275-4.
SECTION 22 Unclaimed Money or Securities.
The Trustee and the Paying Agent shall return to the Company upon
written request any money held by them for the payment of any amount with
respect to the Notes that remains unclaimed for two years, subject to applicable
unclaimed property law. After return to the Company, Holders entitled to the
money or securities must look to the Company for payment as general creditors
unless an applicable abandoned property law designates another Person.
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ASSIGNMENT FORM
To assign this Note, fill in the form below and have your signature
guaranteed: (I) or (we) assign and transfer this Note to:
________________________________________________________________________________
(Insert assignee's social security or tax I.D. number)
________________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint ____________ to transfer this Note on the books of the
Company. The agent may substitute another to act for him.
Your Name: _________________________________________________
(Print your name exactly as it appears on the face of this Note)
In connection with any transfer of this Note occurring prior to the
date which is the end of the period referred to in Rule 144(k) under the
Securities Act (other than a transfer pursuant to an effective registration
statement under the Securities Act), the undersigned confirms that without
utilizing any general solicitation or general advertising that:
[Check One]
[ ] (a) this Note is being transferred in compliance with the
exemption from registration under the Securities Act of 1933, as amended,
provided by Rule 144A thereunder.
or
[ ] (b) this Note is being transferred other than in accordance with
(a) above and documents are being furnished which comply with the conditions of
transfer set forth in this Note and the Indenture.
If none of the foregoing boxes is checked, the Trustee or other Registrar shall
not be obligated to register this Note in the name of any Person other than the
Holder hereof unless the conditions to any such transfer of registration set
forth herein and in Sections 2.7, 2.8 and 2.17 of the Indenture shall have been
satisfied.
Dated:____________________________________________________
Your Signature:_____________________________________________________
(Sign exactly as your name appears on the face of this Note)
Signature Guarantee*:_____________________________________________________
_____________________
* Participant in a recognized Signature Guarantee Medallion Program (or
other signature guarantor acceptable to the Trustee).
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TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this
Note for its own account or an account with respect to which it exercises sole
investment discretion, in each case for investment and not with a view to
distribution, and that it and any such account is a "Qualified Institutional
Buyer" within the meaning of Rule 144A under the Securities Act of 1933 and is
aware that the sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding the Company as the
undersigned has requested pursuant to Rule 144A or has determined not to request
such information and that it is aware that the transferor is relying upon the
undersigned's foregoing representations in order to claim the exemption from
registration provided by Rule 144A.
Dated:________________________
NOTICE: To be executed by an executive officer.
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[TO BE ATTACHED TO GLOBAL NOTES]
SCHEDULE OF INCREASES AND DECREASES IN GLOBAL NOTE
The following increases or decreases in this Global Note have been made:
Principal Amount of Signature of
Amount of decrease in Amount of increase in this Global Note authorized signatory
Principal Amount of Principal Amount of following such of Trustee or
Date this Global Note this Global Note decrease or increase Securities Custodian
- ---- --------------------- --------------------- -------------------- --------------------
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EXHIBIT B
FORM OF FUNDAMENTAL CHANGE PURCHASE NOTICE
TO: Mindspeed Technologies, Inc.
4000 MacArthur Boulevard
East Tower
Newport Beach, California 92660-3095
The undersigned registered owner of this Note hereby irrevocably
acknowledges receipt of a notice from Mindspeed Technologies, Inc. (the
"COMPANY") as to the occurrence of a Fundamental Change with respect to the
Company and requests and instructs the Company to repay the entire principal
amount of this Note, or the portion thereof (which is $1,000 principal amount or
an integral multiple thereof) below designated, in accordance with the terms of
the Indenture referred to in this Note, together with Interest, if any, accrued
and unpaid to, but excluding, such date, to the registered Holder hereof.
Your Name:________________________________________________________________
(Print your name exactly as it appears on the face of this Note)
Dated:____________________________________________________________________
Your Signature:___________________________________________________________
(Sign exactly as your name appears on the face of this Note)
Signature Guarantee*:_____________________________________________________
Social Security or other Taxpayer Identification Number:__________________
Principal amount to be converted (if less than all): $____________________
Certificate number (if applicable):_______________________________________
- ----------------
* Participant in a recognized Signature Guarantee Medallion Program (or
other signature guarantor acceptable to the Trustee).
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EXHIBIT C
FORM OF CONVERSION NOTICE
TO: Mindspeed Technologies, Inc.
4000 MacArthur Boulevard
East Tower
Newport Beach, California 92660-3095
The undersigned registered owner of this Note hereby irrevocably
exercises the option to convert this Note, or the portion hereof (which is
$1,000 principal amount or an integral multiple thereof) below designated, in
accordance with the terms of the Indenture referred to in this Note, and directs
that any shares issuable and deliverable upon such conversion, together with any
check in payment for fractional shares or cash conversion option and any Notes
representing any unconverted principal amount hereof, be issued and delivered to
the registered Holder hereof unless a different name has been indicated below.
If any shares, or payment or any portion of this Note not converted are to be
issued in the name of a Person other than the undersigned, the undersigned will
pay all transfer taxes payable with respect thereto. To the extent provided in
the Indenture, any amount required to be paid to the undersigned on account of
Interest, if any, accompanies this Note.
The undersigned represents that, immediately following conversion
described above, the undersigned and any Group of which the undersigned is a
member will not own outstanding shares constituting more than 14.9% of the
outstanding shares of Common Stock.
Your Name:________________________________________________________________
(Print your name exactly as it appears on the face of this Note)
Dated:____________________________________________________________________
Your Signature:___________________________________________________________
(Sign exactly as your name appears on the face of this Note)
Signature Guarantee*:_____________________________________________________
Social Security or other Taxpayer Identification Number:__________________
Principal amount to be converted (if less than all): $____________________
Fill in for registration of shares (if to be issued) and Notes (if to be
delivered) other than to and in the name of the registered Holder
________________________________________________________________________________
(Name)
________________________________________________________________________________
(Street Address)
- -------------------
* Participant in a recognized Signature Guarantee Medallion Program (or
other signature guarantor acceptable to the Trustee).
C-1
________________________________________________________________________________
(City, State and Zip Code)
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EXHIBIT D
3.75% Convertible Senior Notes due 2009
TO: Mindspeed Technologies, Inc.
4000 MacArthur Boulevard
East Tower
Newport Beach, California 92660-3095
In connection with the conversion of $__________ principal
amount of the above-captioned Notes (the "Surrendered Notes") prior to the
expiration of the holding period applicable to the sales thereof under Rule
144(k) under the Securities Act of 1933, as amended (the "Securities Act") (or
any successor provision), the undersigned registered owner or beneficial owner
of this Note hereby certifies with respect to the registration of transfer, or
for exchange or conversion where the securities issuable upon such exchange or
conversion are to be registered in a name other than that of the undersigned
registered or beneficial owner (each such transaction being a "transfer"), that
such transfer complies with the restrictive legend set forth on the face of the
Surrendered Notes for the reason checked below:
[ ] A transfer of the Surrendered Notes is made to the
Company or any subsidiaries; or
[ ] The transfer of the Surrendered Notes complies with Rule
144A under the Securities Act; or
[ ] The transfer of the Surrendered Notes complies with Rule
144 under the Securities Act; or
[ ] The transfer of the Surrendered Notes is pursuant to an
effective registration statement under the Securities
Act.
DATE: __________________________________
Signature(s)
(If the registered owner is a corporation, partnership or
fiduciary, the title of the person signing on behalf of such
registered owner must be stated.)
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