EXHIBIT 4.1
EXECUTION COPY
Input/Output, Inc.
To
The Bank of New York Trust Company of Florida, N.A.,
as Trustee
INDENTURE
Dated as of
December 10, 2003
5.50% CONVERTIBLE SENIOR NOTES DUE 2008
CROSS-REFERENCE TABLE(1)
<Table>
<Caption>
Trust Indenture Indenture
Article Section Section
- --------------- ---------
310(a)(1)................................................................................... 6.09
(a)(2)................................................................................... 6.09
(a)(3)................................................................................... n/a
(a)(4)................................................................................... n/a
(a)(5)................................................................................... n/a
(b)...................................................................................... 6.08
(c)...................................................................................... n/a
311(a)...................................................................................... 6.13
(b)...................................................................................... 6.13
(c)...................................................................................... n/a
312(a)...................................................................................... 4.01, 4.02(a)
(b)...................................................................................... 4.02(b)
(c)...................................................................................... 4.02(c)
313(a)...................................................................................... 4.03(a)
(b)...................................................................................... 4.03(a)
(c)...................................................................................... 4.03(a)
(d)...................................................................................... 4.03(b)
314(a)...................................................................................... 4.04, 3.10
(b)...................................................................................... n/a
(c)(1)................................................................................... 13.05
(c)(2)................................................................................... 13.05
(c)(3)................................................................................... n/a
(d)...................................................................................... n/a
(e)...................................................................................... 13.05
(f)...................................................................................... n/a
315(a)...................................................................................... 6.01
(b)...................................................................................... 5.08
(c)...................................................................................... 6.01
(d)...................................................................................... 6.01
(e)...................................................................................... 5.09
316(a)(1)................................................................................... 5.07
(a)(2)................................................................................... n/a
(b)...................................................................................... 5.07, 5.04
(c)...................................................................................... 7.01
317(a)(1)................................................................................... 5.02
(a)(2)................................................................................... 5.02
(b)...................................................................................... 6.05
318(a)...................................................................................... 13.07
(b)...................................................................................... n/a
(c)...................................................................................... 13.07
</Table>
(1) This Cross Reference Table shall not, for any purpose, be deemed to be a
part of the Indenture.
"n/a" means not applicable
TABLE OF CONTENTS
PAGE
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ARTICLE 1
DEFINITIONS
Section 1.01. Definitions..................................................................... 1
ARTICLE 2
ISSUE, DESCRIPTION, EXECUTION, REGISTRATION AND EXCHANGE OF SECURITIES
Section 2.01. Designation Amount And Issue Of Securities...................................... 8
Section 2.02. Form of Securities.............................................................. 8
Section 2.03. Date And Denomination Of Securities; Payments Of Interest....................... 9
Section 2.04. Execution of Securities......................................................... 11
Section 2.05. Exchange and Registration of Transfer of Securities; Restrictions on Transfer... 11
Section 2.06. Mutilated, Destroyed, Lost or Stolen Securities................................. 16
Section 2.07. Temporary Securities............................................................ 17
Section 2.08. Cancellation of Securities...................................................... 18
Section 2.09. CUSIP Numbers................................................................... 18
ARTICLE 3
PARTICULAR COVENANTS OF THE COMPANY
Section 3.01. Payment of Principal, Premium and Interest...................................... 19
Section 3.02. Maintenance of Office or Agency................................................. 19
Section 3.03. Appointments to Fill Vacancies in Trustee's Office.............................. 19
Section 3.04. Provisions as to Paying Agent................................................... 19
Section 3.05. Existence....................................................................... 21
Section 3.06. Maintenance of Properties....................................................... 21
Section 3.07. Payment of Taxes and Other Claims............................................... 21
Section 3.08. Rule 144A Information Requirement............................................... 22
Section 3.09. Stay, Extension and Usury Laws.................................................. 22
Section 3.10. Compliance Certificate.......................................................... 22
Section 3.11. Additional Interest Notice...................................................... 23
ARTICLE 4
SECURITYHOLDERS' LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE
Section 4.01. Securityholders' Lists.......................................................... 23
Section 4.02. Preservation And Disclosure Of Lists............................................ 23
Section 4.03. Reports By Trustee.............................................................. 24
Section 4.04. Reports by Company.............................................................. 24
ARTICLE 5
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS ON AN EVENT OF DEFAULT
Section 5.01. Events of Default............................................................... 25
Section 5.02. Payments of Securities on Default; Suit Therefor................................ 27
Section 5.03. Application of Monies Collected By Trustee...................................... 29
Section 5.04. Proceedings by Securityholder................................................... 30
Section 5.05. Proceedings By Trustee.......................................................... 30
Section 5.06. Remedies Cumulative And Continuing.............................................. 31
Section 5.07. Direction of Proceedings and Waiver of Defaults By Majority of Securityholders.. 31
Section 5.08. Notice of Defaults.............................................................. 32
Section 5.09. Undertaking To Pay Costs........................................................ 32
ARTICLE 6
THE TRUSTEE
Section 6.01. Duties and Responsibilities of Trustee.......................................... 33
Section 6.02. Reliance on Documents, Opinions, Etc............................................ 34
Section 6.03. No Responsibility For Recitals, Etc............................................. 35
Section 6.04. Trustee, Paying Agents, Conversion Agents or Registrar May Own Securities....... 36
Section 6.05. Monies to Be Held in Trust...................................................... 36
Section 6.06. Compensation and Expenses of Trustee............................................ 36
Section 6.07. Officers' Certificate As Evidence............................................... 37
Section 6.08. Conflicting Interests of Trustee................................................ 37
Section 6.09. Eligibility of Trustee.......................................................... 37
Section 6.10. Resignation or Removal of Trustee............................................... 37
Section 6.11. Acceptance by Successor Trustee................................................. 39
Section 6.12. Succession By Merger............................................................ 40
Section 6.13. Preferential Collection of Claims............................................... 40
ARTICLE 7
THE SECURITYHOLDERS
Section 7.01. Action By Securityholders....................................................... 41
Section 7.02. Proof of Execution by Securityholders........................................... 41
Section 7.03. Who Are Deemed Absolute Owners.................................................. 41
Section 7.04. Company-owned Securities Disregarded............................................ 42
Section 7.05. Revocation Of Consents, Future Holders Bound.................................... 42
ARTICLE 8
MEETINGS OF SECURITYHOLDERS
Section 8.01. Purpose Of Meetings............................................................. 43
ii
Section 8.02. Call Of Meetings By Trustee..................................................... 43
Section 8.03. Call Of Meetings By Company Or Securityholders.................................. 43
Section 8.04. Qualifications For Voting....................................................... 44
Section 8.05. Regulations..................................................................... 44
Section 8.06. Voting.......................................................................... 45
Section 8.07. No Delay Of Rights By Meeting................................................... 45
ARTICLE 9
SUPPLEMENTAL INDENTURES
Section 9.01. Supplemental Indentures Without Consent of Securityholders...................... 45
Section 9.02. Supplemental Indenture With Consent Of Securityholders.......................... 47
Section 9.03. Effect Of Supplemental Indenture................................................ 48
Section 9.04. Notation On Securities.......................................................... 48
Section 9.05. Evidence Of Compliance Of Supplemental Indenture To Be Furnished To Trustee..... 49
ARTICLE 10
CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE
Section 10.01. Company May Consolidate On Certain Terms....................................... 49
Section 10.02. Successor To Be Substituted.................................................... 50
Section 10.03. Opinion Of Counsel To Be Given To Trustee...................................... 50
ARTICLE 11
SATISFACTION AND DISCHARGE OF INDENTURE
Section 11.01. Discharge Of Indenture......................................................... 51
Section 11.02. Deposited Monies To Be Held In Trust By Trustee................................ 51
Section 11.03. Paying Agent To Repay Monies Held.............................................. 52
Section 11.04. Return Of Unclaimed Monies..................................................... 52
Section 11.05. Reinstatement.................................................................. 52
ARTICLE 12
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS
Section 12.01. Indenture And Securities Solely Corporate Obligations.......................... 52
ARTICLE 13
GENERAL PROVISIONS
Section 13.01. Provisions Binding On Company's Successors..................................... 53
Section 13.02. Official Acts By Successor Corporation......................................... 53
Section 13.03. Addresses For Notices, Etc..................................................... 53
Section 13.04. Governing Law.................................................................. 54
iii
Section 13.05. Evidence Of Compliance With Conditions Precedent, Certificates To Trustee...... 54
Section 13.06. Legal Holidays................................................................. 54
Section 13.07. Trust Indenture Act............................................................ 54
Section 13.08. No Security Interest Created................................................... 55
Section 13.09. Benefits Of Indenture.......................................................... 55
Section 13.10. Table Of Contents, Headings, Etc............................................... 55
Section 13.11. Authenticating Agent........................................................... 55
Section 13.12. Execution In Counterparts...................................................... 56
Section 13.13. Severability................................................................... 56
ARTICLE 14
REPURCHASE OF SECURITIES
Section 14.01. Repurchase at Option of Holders Upon a Designated Event........................ 56
Section 14.02. Securities Repurchased in Part................................................. 61
Section 14.03. Repayment to the Company....................................................... 61
ARTICLE 15
CONVERSION OF SECURITIES
Section 15.01. Right To Convert............................................................... 61
Section 15.02. Exercise Of Conversion Privilege; Issuance Of Common
Stock On Conversion; No Adjustment For Interest Or Dividends.......................... 61
Section 15.03. Cash Payments in Lieu of Fractional Shares..................................... 63
Section 15.04. Conversion Rate................................................................ 64
Section 15.05. Adjustment Of Conversion Rate.................................................. 64
Section 15.06. Effect Of Reclassification, Consolidation, Merger or Sale...................... 74
Section 15.07. Taxes On Shares Issued......................................................... 75
Section 15.08. Reservation of Shares, Shares to Be Fully Paid; Compliance
With Governmental Requirements; Listing of Common Stock.............................. 76
Section 15.09. Responsibility Of Trustee...................................................... 77
Section 15.10. Notice To Holders Prior To Certain Actions..................................... 77
Section 15.11. Shareholder Rights Plans....................................................... 78
Section 15.12. Transfer Restrictions.......................................................... 78
Exhibit A Form of Security..................................................................... A-1
iv
INDENTURE
INDENTURE dated as of December 10, 2003 between Input/Output, Inc., a
Delaware corporation (hereinafter called the "COMPANY"), having its principal
office at 12300 Parc Crest Drive, Stafford, Texas 77477, and The Bank of New
York Trust Company of Florida, N.A., a national banking association organized
within the laws of the United States, as trustee hereunder (hereinafter called
the "TRUSTEE").
WHEREAS, for its lawful corporate purposes, the Company has duly
authorized the issue of its 5.50% Convertible Senior Notes Due 2008 (hereinafter
called the "SECURITIES"), in an aggregate principal amount not to exceed
$60,000,000 and, to provide the terms and conditions upon which the Securities
are to be authenticated, issued and delivered, the Company has duly authorized
the execution and delivery of this Indenture; and
WHEREAS, all acts and things necessary to make the Securities, when
executed by the Company and authenticated and delivered by the Trustee or a duly
authorized authenticating agent, as in this Indenture provided, the valid,
binding and legal obligations of the Company, and to constitute this Indenture a
valid agreement according to its terms, have been done and performed, and the
execution of this Indenture and the issue hereunder of the Securities have in
all respects been duly authorized,
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
That in order to declare the terms and conditions upon which the
Securities are, and are to be, authenticated, issued and delivered, and in
consideration of the premises and of the purchase and acceptance of the
Securities by the holders thereof, the Company covenants and agrees with the
Trustee for the equal and proportionate benefit of the respective holders from
time to time of the Securities (except as otherwise provided below), as follows:
ARTICLE 1
DEFINITIONS
Section 1.01 Definitions. The terms defined in this Section 1.01
(except as herein otherwise expressly provided or unless the context otherwise
requires) for all purposes of this Indenture and of any indenture supplemental
hereto shall have the respective meanings specified in this Section 1.01. All
other terms used in this Indenture that are defined in the Trust Indenture Act
or which are by reference therein defined in the Securities Act (except as
herein otherwise expressly provided or unless the context otherwise requires)
shall have the meanings assigned to such terms in the Trust Indenture Act (as
defined herein)
and in the Securities Act (as defined herein) as in force at the date of the
execution of this Indenture. The words "HEREIN", "HEREOF", "HEREUNDER" and words
of similar import refer to this Indenture as a whole and not to any particular
Article, Section or other Subdivision. The terms defined in this Article include
the plural as well as the singular.
"ADDITIONAL INTEREST" means "ADDITIONAL INTEREST AMOUNT" and
"LIQUIDATED DAMAGES AMOUNT" as defined in Section 2(e) of the Registration
Rights Agreement.
"ADDITIONAL INTEREST NOTICE" has the meaning specified in Section
3.11.
"ADJUSTMENT EVENT" has the meaning specified in Section 15.05(l).
"AGENT MEMBERS" has the meaning specified in Section 2.05(b).
"AFFILIATE" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"CONTROL", when used with respect to any specified Person means the power to
direct or cause the direction of the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise, and the terms "CONTROLLING" and "CONTROLLED" have
meanings correlative to the foregoing.
"BOARD OF DIRECTORS" means the Board of Directors of the Company or a
committee of such Board duly authorized to act for it hereunder.
"BUSINESS DAY" means any day except a Saturday, Sunday or legal holiday
on which banking institutions in The City of Dallas or The City of New York are
authorized or obligated by law, regulation or executive order to close.
"CLOSING SALE PRICE" of the shares of Common Stock on any date means
the closing sale price per share (or, if no closing sale price is reported, the
average of the closing bid and ask prices or, if more than one in either case,
the average of the average closing bid and the average closing ask prices) on
such date as reported in composite transactions for the principal United States
securities exchange on which shares of Common Stock are traded or, if the shares
of Common Stock are not listed on a United States national or regional
securities exchange, as reported by the Nasdaq or by the National Quotation
Bureau Incorporated. In the absence of such quotations, the Company shall be
entitled to determine the Closing Sale Price on the basis it considers
appropriate. The Closing Sale Price shall be determined without reference to
extended or after hours trading.
2
"COMMISSION" means the Securities and Exchange Commission, as from time
to time constituted, created under the Exchange Act, or, if at any time after
the execution of this Indenture such Commission is not existing and performing
the duties now assigned to it under the Trust Indenture Act, then the body
performing such duties at such time.
"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. Subject to the provisions
of Section 15.06, however, shares issuable on conversion of Securities shall
include only shares of the class designated as common stock of the Company at
the date of this Indenture (namely, the Common Stock, par value $0.01) 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 on conversion
shall be substantially in the proportion which the total number of shares of
such class resulting from all such reclassifications bears to the total number
of shares of all such classes resulting from all such reclassifications.
"COMPANY" means the corporation named as the "COMPANY" in the first
paragraph of this Indenture, and, subject to the provisions of Article 10 and
Section 15.06, shall include its successors and assigns.
"COMPANY STOCK" has the meaning specified in Section 15.05(d).
"CONVERSION PRICE" as of any day will equal $1,000 divided by the
Conversion Rate as of such date.
"CONVERSION RATE" has the meaning specified in Section 15.04.
"CORPORATE TRUST OFFICE" or other similar term, means the designated
office of the Trustee at which its corporate trust business as it relates to
this Indenture shall be administered, which office may be changed by the Trustee
at any time and which, at the date as of which this Indenture is dated, is
located at Plaza of the Americas, 600 North Pearl Street, Suite 420, Dallas,
Texas 75201.
"CURRENT MARKET PRICE" has the meaning specified in Section 15.05(h).
"CUSTODIAN" means The Bank of New York Trust Company of Florida, N.A.,
as custodian with respect to the Securities in global form, or any successor
entity thereto.
3
"DEFAULTED INTEREST" has the meaning specified in Section 2.03.
"DEPOSITARY" means, the clearing agency registered under the Exchange
Act that is designated to act as the Depositary for the Global Securities. The
Depository Trust Company shall be the initial Depositary, until a successor
shall have been appointed and become such pursuant to the applicable provisions
of this Indenture, and thereafter, "DEPOSITARY" shall mean or include such
successor.
"DESIGNATED EVENT" shall mean the occurrence of (a) a Fundamental
Change or (b) a Termination of Trading.
"DESIGNATED EVENT NOTICE" has the meaning specified in Section
14.01(b).
"DESIGNATED EVENT EXPIRATION TIME" has the meaning specified in
Section 14.01(b).
"DESIGNATED EVENT REPURCHASE DATE" has the meaning specified in
Section 14.01(a).
"DESIGNATED EVENT REPURCHASE NOTICE" has the meaning specified in
Section 14.01(a).
"DETERMINATION DATE" has the meaning specified in Section 15.05(l).
"DIVIDEND RECORD DATE" has the meaning specified in Section 15.05(h).
"EVENT OF DEFAULT" means any event specified in Section 5.01 as an
Event of Default.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder, as in effect from time to
time.
"EXPIRATION TIME" has the meaning specified in Section 15.05(f).
"FAIR MARKET VALUE" has the meaning specified in Section 15.05(h).
"FUNDAMENTAL CHANGE" means the occurrence of any transaction or event
(whether by means of an exchange offer, liquidation, tender offer,
consolidation, merger, combination, reclassification, recapitalization or
otherwise) in connection with which all or substantially all of the Common Stock
shall be exchanged for, converted into, acquired for or constitutes solely the
right to receive consideration which is not all or substantially all common
stock that is listed on, or immediately after such transaction or event will be
listed on, a United States national securities exchange, or is approved, or
immediately after such transaction or event will be
4
approved, for quotation on the Nasdaq National Market or any similar United
States system of automated dissemination of quotations of securities prices.
"GLOBAL SECURITY" has the meaning specified in Section 2.02.
"INDENTURE" means this instrument as originally executed or, if
amended or supplemented as herein provided, as so amended or supplemented.
"INITIAL PURCHASER" means Morgan Stanley & Co. Incorporated.
"INTEREST" means, when used with reference to the Securities, any
interest payable under the terms of the Securities, including Additional
Interest, if any, payable under the terms of the Registration Rights Agreement.
"NON-ELECTING SHARE" has the meaning specified in Section 15.06.
"OFFICERS' CERTIFICATE", when used with respect to the Company, means a
certificate signed by the Chairman of the Board, the Chief Executive Officer,
the President or any Vice President (whether or not designated by a number or
numbers or word or words added before or after the title "VICE PRESIDENT") and
the Treasurer or any Assistant Treasurer, or the Secretary or Assistant
Secretary of the Company.
"OPINION OF COUNSEL" means an opinion in writing signed by legal
counsel, who may be an employee of or counsel to the Company, or other counsel
reasonably acceptable to the Trustee.
"OUTSTANDING", when used with reference to Securities and subject to
the provisions of Section 7.04, means, as of any particular time, all
Securities authenticated and delivered by the Trustee under this Indenture,
except:
(a) Securities theretofore canceled by the Trustee or delivered to
the Trustee for cancellation;
(b) Securities, or portions thereof, (i) for the repurchase of
which monies in the necessary amount shall have been deposited in trust with the
Trustee or with any paying agent (other than the Company) or (ii) which shall
have been otherwise defeased in accordance with Article 11;
(c) Securities in lieu of which, or in substitution for which,
other Securities shall have been authenticated and delivered pursuant to the
terms of Section 2.06; and
(d) Securities converted into Common Stock (or for which payment
has been given in lieu of fractional shares) pursuant to Article 15 and
Securities deemed not outstanding pursuant to Article 14.
5
"PERSON" means a corporation, an association, a partnership, a limited
liability company, an individual, a joint venture, a joint stock company, a
trust, an unincorporated organization or a government or an agency or a
political subdivision thereof.
"PORTAL MARKET" means The Portal Market operated by the National
Association of Securities Dealers, Inc. or any successor thereto.
"PREDECESSOR SECURITY" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security, and, for the purposes of this definition, any Security
authenticated and delivered under Section 2.06 in lieu of a lost, destroyed or
stolen Security shall be deemed to evidence the same debt as the lost, destroyed
or stolen Security that it replaces.
"PURCHASED SHARES" has the meaning specified in Section 15.05(f).
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights
Agreement dated as of December 10, 2003 between the Company and the Initial
Purchaser, as amended from time to time in accordance with its terms.
"RESPONSIBLE OFFICER" shall mean, when used with respect to the
Trustee, any officer within the corporate trust department of the Trustee with
direct responsibility for the administration of this Indenture and also means,
with respect to a particular corporate trust matter, any other officer to whom
such matter is referred because of such person's knowledge of any familiarity
with the particular subject.
"RESTRICTED SECURITIES" has the meaning specified in Section 2.05(c).
"RESTRICTED SECURITIES LEGEND" means the legend labeled as such and
that is set forth in Exhibit A hereto.
"RULE 144A" means Rule 144A as promulgated under the Securities Act.
"SECURITIES" has the meaning specified in Section 15.05(d).
"SECURITIES ACT" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder, as in effect from time to time.
"SECURITY" or "SECURITIES" means any Security or Securities, as the
case may be, authenticated and delivered under this Indenture, including any
Global Security.
"SECURITY REGISTER" has the meaning specified in Section 2.05.
6
"SECURITY REGISTRAR" has the meaning specified in Section 2.05.
"SECURITYHOLDER" or "HOLDER" as applied to any Security, or other
similar terms (but excluding the term "BENEFICIAL HOLDER"), means any Person in
whose name at the time a particular Security is registered on the Security
Registrar's books.
"SIGNIFICANT SUBSIDIARY" means, as of any date of determination, a
Subsidiary of the Company that would constitute a "SIGNIFICANT SUBSIDIARY" as
such term is defined under Rule 1-02(w) of Regulation S-X of the Commission as
in effect on the date of this Indenture.
"SUBSIDIARY" means, with respect to any Person, (i) any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of capital stock or other equity interest entitled (without
regard to the occurrence of any contingency) to vote in the election of
directors, managers or trustees thereof is at the time owned or controlled,
directly or indirectly, by such Person or one or more of the other subsidiaries
of that Person (or a combination thereof) and (ii) any partnership (a) the sole
general partner or managing general partner of which is such Person or a
subsidiary of such Person or (b) the only general partners of which are such
Person or of one or more subsidiaries of such Person (or any combination
thereof).
"TERMINATION OF TRADING" will be deemed to have occurred if the Common
Stock is neither listed for trading on a United States national securities
exchange nor approved for trading on the Nasdaq National Market.
"TRADING DAY" has the meaning specified in Section 15.05(h).
"TRIGGER EVENT" has the meaning specified in Section 15.05(d).
"TRUST INDENTURE ACT" or "TIA" means the Trust Indenture Act of 1939,
as amended, as it was in force at the date of this Indenture, except as provided
in Sections 9.03 and 15.06; provided that if the Trust Indenture Act of 1939 is
amended after the date hereof, the term "TRUST INDENTURE ACT" or "TIA" shall
mean, to the extent required by such amendment, the Trust Indenture Act of 1939
as so amended.
"TRUSTEE" means The Bank of New York Trust Company of Florida, N.A.,
its successors and any corporation resulting from or surviving any consolidation
or merger to which it or its successors may be a party and any successor trustee
at the time serving as successor trustee hereunder.
7
Article 2
ISSUE, DESCRIPTION, EXECUTION, REGISTRATION AND EXCHANGE OF SECURITIES
Section 2.01 Designation Amount And Issue Of Securities. The Securities
shall be designated as "5.50% Convertible Senior Notes due 2008". Securities not
to exceed the aggregate principal amount of $60,000,000 (except pursuant to
Sections Section 2.05, Section 2.06, Section 9.01, Section 14.01 and Section
15.02 hereof) upon the execution of this Indenture, or from time to time
thereafter, may be executed by the Company and delivered to the Trustee for
authentication, and the Trustee shall thereupon authenticate and deliver said
Securities to or upon the written order of the Company, signed by its Chairman
of the Board, Chief Executive Officer, President or any Vice President (whether
or not designated by a number or numbers or word or words added before or after
the title "VICE PRESIDENT"), the Treasurer or any Assistant Treasurer or the
Secretary or Assistant Secretary, without any further action by the Company
hereunder.
Section 2.02 Form of Securities. The Securities and the Trustee's
certificate of authentication to be borne by such Securities shall be
substantially in the form set forth in Exhibit A. The terms and provisions
contained in the form of Security attached as Exhibit A hereto 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.
Any of the Securities may have such letters, numbers or other marks of
identification and such notations, legends, endorsements or changes as the
officers of the Company executing the same may approve (execution thereof to be
conclusive evidence of such approval) and as are not inconsistent with the
provisions of this Indenture, or as may be required by the Custodian, the
Depositary or by the National Association of Securities Dealers, Inc. in order
for the Securities to be tradable on The Portal Market or as may be required for
the Securities to be tradable on any other market developed for trading of
securities pursuant to Rule 144A or as may be required to comply with any
applicable law or with any rule or regulation made pursuant thereto or with any
rule or regulation of any securities exchange or automated quotation system on
which the Securities may be listed, or to conform to usage, or to indicate any
special limitations or restrictions to which any particular Securities are
subject.
So long as the Securities are eligible for book-entry settlement with
the Depositary, or unless otherwise required by law, or otherwise contemplated
by Section 2.05(b), all of the Securities will be represented by one or more
Securities in global form registered in the name of the Depositary or the
nominee of the Depositary (a "GLOBAL SECURITY"). The transfer and exchange of
beneficial interests in any such Global Security shall be effected through the
Depositary in accordance with this Indenture and the applicable procedures of
the Depositary.
8
Except as provided in Section 2.05(b), beneficial owners of a Global Security
will not receive physical delivery of certificates in definitive form and will
not be considered holders of such Global Security.
Any Global Security shall represent such of the outstanding Securities
as shall be specified therein and shall provide that it shall represent the
aggregate amount of outstanding Securities from time to time endorsed thereon
and that the aggregate amount of outstanding Securities represented thereby may
from time to time be increased or reduced to reflect repurchases, conversions,
transfers or exchanges permitted hereby. Any endorsement of a Global Security to
reflect the amount of any increase or decrease in the amount of outstanding
Securities represented thereby shall be made by the Trustee or the Custodian, at
the direction of the Trustee, in such manner and upon instructions given by the
holder of such Securities in accordance with this Indenture. Payment of
principal of and Interest and premium, if any, on any Global Security shall be
made to the holder of such Security.
Section 2.03 Date And Denomination Of Securities; Payments Of Interest.
The Securities shall be issuable in registered form without coupons in
denominations of $1,000 principal amount and multiples thereof. Each Security
shall be dated the date of its authentication and shall bear interest from the
date specified on the face of the form of Security attached as Exhibit A hereto.
Interest on the Securities shall be computed on the basis of a 360-day year
comprised of twelve 30-day months.
The Person in whose name any Security (or its Predecessor Security) is
registered on the Security Register at the close of business on any record date
with respect to any interest payment date shall be entitled to receive the
interest payable on such interest payment date. If any Security (or portion
thereof) is converted into Common Stock during the period after a record date
for the payment of interest to, but excluding, the next succeeding interest
payment date, then, notwithstanding the conversion, interest on such Security
will be payable on the corresponding interest payment date to the holders of
such Security (or portion thereof) registered as such at the close of business
on the record date. Interest payable upon repurchase of any Security will be
payable to the Person to whom principal is payable pursuant to such repurchase
(unless the repurchase date falls after a record date and on or prior to the
corresponding interest payment date, in which case the semi-annual payment of
interest becoming due on such interest payment date shall be payable to the
holders of such Securities registered as such on the applicable record date).
Interest shall be payable at the office of the Company maintained by
the Company for such purposes in the Borough of Manhattan, City of New York,
which shall initially be an office or agency of the Trustee. The Company shall
pay interest (i) on any Securities in certificated form by check mailed to the
9
address of the Person entitled thereto as it appears in the Security Register
(or upon written notice, by wire transfer in immediately available funds, if
such Person is entitled to interest on aggregate principal in excess of $2
million) or (ii) on any Global Security by wire transfer of immediately
available funds to the account of the Depositary or its nominee. The term
"RECORD DATE" with respect to any interest payment date shall mean the June 1 or
December 1 preceding the applicable June 15 or December 15 interest payment
date, respectively.
Any interest on any Security which is payable, but is not punctually
paid or duly provided for, on any June 1 or December 1 (herein called "DEFAULTED
INTEREST") shall forthwith cease to be payable to the Securityholder on the
relevant record date by virtue of his having been such Securityholder, and such
Defaulted Interest shall be paid by the Company, at its election in each case,
as provided in clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Securities (or their respective
Predecessor Securities) are registered at the close of business on a special
record date for the payment of such Defaulted Interest, which shall be fixed in
the following manner. The Company shall notify the Trustee in writing of the
amount of Defaulted Interest proposed to be paid on each Security and the date
of the proposed payment (which shall be not less than twenty-five (25) days
after the receipt by the Trustee of such notice, unless the Trustee shall
consent to an earlier date), and at the same time the Company shall deposit with
the Trustee an amount of money equal to the aggregate amount to be paid in
respect of such Defaulted Interest or shall make arrangements satisfactory to
the Trustee for such deposit on or prior to the date of the proposed payment,
such money when deposited to be held in trust for the benefit of the Persons
entitled to such Defaulted Interest as in this clause provided. Thereupon the
Trustee shall fix a special record date for the payment of such Defaulted
Interest which shall be not more than fifteen (15) days and not less than ten
(10) days prior to the date of the proposed payment, and not less than ten (10)
days after the receipt by the Trustee of the notice of the proposed payment. The
Trustee shall promptly notify the Company of such special record date and, in
the name and at the expense of the Company, shall cause notice of the proposed
payment of such Defaulted Interest and the special record date therefor to be
mailed, first-class postage prepaid, to each holder at his address as it appears
in the Security Register, not less than ten (10) days prior to such special
record date. Notice of the proposed payment of such Defaulted Interest and the
special record date therefor having been so mailed, such Defaulted Interest
shall be paid to the Persons in whose names the Securities (or their respective
Predecessor Securities) are registered at the close of business on such special
record date and shall no longer be payable pursuant to the following clause (2)
of this Section 2.03.
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(2) The Company may make payment of any Defaulted Interest in any
other lawful manner not inconsistent with the requirements of any securities
exchange or automated quotation system on which the Securities may be listed or
designated for issuance, and upon such notice as may be required by such
exchange or automated quotation system, if, after notice given by the Company to
the Trustee of the proposed payment pursuant to this clause, such manner of
payment shall be deemed practicable by the Trustee.
Section 2.04 Execution of Securities. The Securities shall be signed in
the name and on behalf of the Company by the manual or facsimile signature of
its Chairman of the Board, Chief Executive Officer, President or any Vice
President (whether or not designated by a number or numbers or word or words
added before or after the title "VICE PRESIDENT") and attested by the manual or
facsimile signature of its Secretary or any of its Assistant Secretaries or its
Treasurer or any of its Assistant Treasurers (which may be printed, engraved or
otherwise reproduced thereon, by facsimile or otherwise). Only such Securities
as shall bear thereon a certificate of authentication substantially in the form
set forth on the form of Security attached as Exhibit A hereto, manually
executed by the Trustee (or an authenticating agent appointed by the Trustee as
provided by Section 13.11), shall be entitled to the benefits of this Indenture
or be valid or obligatory for any purpose. Such certificate by the Trustee (or
such an authenticating agent) upon any Security executed by the Company shall be
conclusive evidence that the Security so authenticated has been duly
authenticated and delivered hereunder and that the holder is entitled to the
benefits of this Indenture.
In case any officer of the Company who shall have signed any of the
Securities shall cease to be such officer before the Securities so signed shall
have been authenticated and delivered by the Trustee, or disposed of by the
Company, such Securities nevertheless may be authenticated and delivered or
disposed of as though the person who signed such Securities had not ceased to be
such officer of the Company, and any Security may be signed on behalf of the
Company by such persons as, at the actual date of the execution of such
Security, shall be the proper officers of the Company, although at the date of
the execution of this Indenture any such person was not such an officer.
Section 2.05 Exchange and Registration of Transfer of Securities;
Restrictions on Transfer. The Company shall cause to be kept at the Corporate
Trust Office a register (the register maintained in such office and in any other
office or agency of the Company designated pursuant to Section 3.02 being
herein sometimes collectively referred to as the "SECURITY REGISTER") in which,
subject to such reasonable regulations as it may prescribe, the Company shall
provide for the registration of Securities and of transfers of Securities. The
Security Register shall be in written form or in any form capable of being
converted into written form within a reasonably prompt period of time. The
11
Trustee is hereby appointed "SECURITY REGISTRAR" for the purpose of registering
Securities and transfers of Securities as herein provided. The Company may
appoint one or more co-registrars in accordance with Section 3.02.
Subject to Section 2.05(b) hereof, upon surrender for registration of
transfer of any Security to the Security Registrar or any co-registrar, and
satisfaction of the requirements for such transfer set forth in this Section
2.05, the Company shall execute, and the Trustee shall authenticate and
deliver, in the name of the designated transferee or transferees, one or more
new Securities of any authorized denominations and of a like aggregate principal
amount and bearing such restrictive legends as may be required by this
Indenture.
Securities may be exchanged for other Securities of any authorized
denominations and of a like aggregate principal amount, upon surrender of the
Securities to be exchanged at any such office or agency maintained by the
Company pursuant to Section 3.02. Whenever any Securities are so surrendered
for exchange, the Company shall execute, and the Trustee shall authenticate and
deliver, the Securities which the Securityholder making the exchange is entitled
to receive bearing registration numbers not contemporaneously outstanding.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.
All Securities presented or surrendered for registration of transfer or
for exchange, repurchase or conversion shall (if so required by the Company or
the Security Registrar) be duly endorsed, or be accompanied by a written
instrument or instruments of transfer in form satisfactory to the Company, and
the Securities shall be duly executed by the Securityholder thereof or his
attorney duly authorized in writing.
No service charge shall be made to any holder for any registration of
transfer or exchange of Securities, but the Company may require payment by the
holder of a sum sufficient to cover any tax, assessment or other governmental
charge that may be imposed in connection with any registration of transfer or
exchange of Securities.
Neither the Company nor the Trustee nor any Security Registrar shall be
required to exchange or register a transfer of (a) any Securities or portions
thereof in respect of which a Conversion Notice has been given pursuant to
Article 15, or (b) any Securities or portions thereof in respect of which a
Designated Event Repurchase Notice has been given (and not withdrawn by the
Securityholder) pursuant to Section 14.01.
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(b) The following provisions shall apply only to Global
Securities:
(i) Each Global Security authenticated under this
Indenture shall be registered in the name of the Depositary or a
nominee thereof and delivered to such Depositary or a nominee thereof
or Custodian therefor, and each such Global Security shall constitute a
single Security for all purposes of this Indenture.
(ii) Notwithstanding any other provision in this
Indenture, no Global Security may be exchanged in whole or in part for
Securities registered, and no transfer of a Global Security in whole or
in part may be registered, in the name of any Person other than the
Depositary or a nominee thereof unless the Depositary (i) has notified
the Company that it is unwilling or unable to continue as Depositary
for such Global Security and a successor depositary has not been
appointed by the Company within 90 days or (ii) has ceased to be a
clearing agency registered under the Exchange Act and no successor
clearing agency has been appointed by the Company within 90 days, an
Event of Default has occurred and is continuing, or the Company, in
its sole discretion, notifies the Trustee in writing that it no longer
wishes to have all the Securities represented by Global Securities;
provided that beneficial interests in a Global Security may be
exchanged for definitive certificated Securities upon request by or on
behalf of the Depositary in accordance with customary procedures. Any
Global Security exchanged pursuant to clause (A) or (B) above shall be
so exchanged in whole and not in part and any Global Security exchanged
pursuant to clause (C) above may be exchanged in whole or from time to
time in part as directed by the Company. Any Security issued in
exchange for a Global Security or any portion thereof shall be a Global
Security; provided that any such Security so issued that is registered
in the name of a Person other than the Depositary or a nominee thereof
shall not be a Global Security.
(iii) Securities issued in exchange for a Global Security
or any portion thereof pursuant to clause (ii) above shall be issued in
definitive, fully registered form, without interest coupons, shall have
an aggregate principal amount equal to that of such Global Security or
portion thereof to be so exchanged, shall be registered in such names
and be in such authorized denominations as the Depositary shall
designate and shall bear any legends required hereunder. Any Global
Security to be exchanged in whole shall be surrendered by the
Depositary to the Trustee, as Security Registrar. With regard to any
Global Security to be exchanged in part, either such Global Security
shall be so surrendered for exchange or, if the Trustee is acting as
Custodian for the Depositary or its nominee with respect to such Global
Security, the principal amount thereof shall be reduced, by an amount
equal to the portion thereof to be so exchanged, by
13
means of an appropriate adjustment made on the records of the Trustee.
Upon any such surrender or adjustment, the Trustee shall authenticate
and make available for delivery the Security issuable on such exchange
to or upon the written order of the Depositary or an authorized
representative thereof.
(iv) In the event of the occurrence of any of the events
specified in clause (ii) above, the Company will promptly make
available to the Trustee a reasonable supply of certificated Securities
in definitive, fully registered form, without interest coupons.
(v) Neither any members of, or participants in, the
Depositary ("AGENT MEMBERS") nor any other Persons on whose behalf
Agent Members may act shall have any rights under this Indenture with
respect to any Global Security registered in the name of the Depositary
or any nominee thereof, and the Depositary or such nominee, as the case
may be, may be treated by the Company, the Trustee and any agent of the
Company or the Trustee as the absolute owner and holder of such Global
Security for all purposes whatsoever. Notwithstanding the foregoing,
nothing herein shall prevent the Company, the Trustee or any agent of
the Company or the Trustee from giving effect to any written
certification, proxy or other authorization furnished by the Depositary
or such nominee, as the case may be, or impair, as between the
Depositary, its Agent Members and any other Person on whose behalf an
Agent Member may act, the operation of customary practices of such
Persons governing the exercise of the rights of a holder of any
Security.
(vi) At such time as all interests in a Global Security
have been repurchased, converted, canceled or exchanged for Securities
in certificated form, such Global Security shall, upon receipt thereof,
be canceled by the Trustee in accordance with standing procedures and
instructions existing between the Depositary and the Custodian. At any
time prior to such cancellation, if any interest in a Global Security
is repurchased, converted, canceled or exchanged for Securities in
certificated form, the principal amount of such Global Security shall,
in accordance with the standing procedures and instructions existing
between the Depositary and the Custodian, be appropriately reduced, and
an endorsement shall be made on such Global Security, by the Trustee or
the Custodian, at the direction of the Trustee, to reflect such
reduction.
(c) Any certificate evidencing a Security (and all securities
issued in exchange therefor or in substitution thereof) and any stock
certificate representing Common Stock issued upon conversion of any Security
shall bear the Restricted Securities Legend, unless (1) such Security or such
Common Stock has been sold pursuant to a registration statement that has been
declared effective under the
14
Securities Act (and which continues to be effective at the time of such
transfer) or pursuant to Rule 144 under the Securities Act or any similar
provision then in force, or such Common Stock has been issued upon conversion of
Securities that have been transferred pursuant to a registration statement that
has been declared effective under the Securities Act or pursuant to Rule 144
under the Securities Act or any similar provision then in force, (2) such
Security or such Common Stock is eligible for resale pursuant to Rule 144(k)
under the Securities Act (or any successor provision) or (3) otherwise agreed by
the Company in writing, with written notice thereof to the Trustee.
Every Security that bears or is required under this Section 2.05(c) to
bear the Restricted Securities Legend (the "RESTRICTED SECURITIES") shall be
subject to the restrictions on transfer set forth in this Section 2.05(c)
(including those set forth in the Restricted Securities Legend) unless such
restrictions on transfer shall be waived by written consent of the Company, and
the holder of each such Restricted Security, by such Security holder's
acceptance thereof, agrees to be bound by all such restrictions on transfer. As
used in this Section 2.05(c), the term "TRANSFER" encompasses any sale, pledge,
loan, transfer or other disposition whatsoever of any Restricted Security or any
interest therein.
Any Security (or security issued in exchange or substitution therefor)
as to which such restrictions on transfer shall have expired in accordance with
their terms or as to conditions for removal of the Restricted Securities Legend
have been satisfied may, upon surrender of such Security for exchange to the
Security Registrar in accordance with the provisions of this Section 2.05, be
exchanged for a new Security or Securities, of like tenor and aggregate
principal amount, which shall not bear the Restricted Securities Legend. If the
Restricted Security surrendered for exchange is represented by a Global Security
bearing a Restricted Securities Legend, the principal amount of the Global
Security so legended shall be reduced by the appropriate principal amount and
the principal amount of a Global Security without the Restricted Securities
Legend shall be increased by an equal principal amount. If a Global Security
without the Restricted Securities Legend is not then outstanding, the Company
shall execute and the Trustee shall authenticate and deliver a Global Security
without the Restricted Securities Legend to the Depositary.
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 foregoing legend 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 for the Common
Stock, be exchanged for a new certificate or certificates for a like number of
shares of Common Stock, which shall not bear the Restricted Securities Legend.
15
(d) Any Security or Common Stock issued upon the conversion of a
Security that, prior to the expiration of the holding period applicable to sales
thereof under Rule 144(k) under the Securities Act (or any successor provision),
is purchased or owned by the Company or any Affiliate thereof may not be resold
by the Company or such Affiliate unless registered under the Securities Act or
resold pursuant to an exemption from the registration requirements of the
Securities Act in a transaction which results in such Securities or Common
Stock, as the case may be, no longer being "restricted securities" (as defined
under Rule 144).
(e) The Trustee shall have no responsibility or obligation to any
Agent Members or any other Person with respect to the accuracy of the books or
records, or the acts or omissions, of the Depository or its nominee or of any
participant or member thereof, with respect to any ownership interest in the
Securities or with respect to the delivery to any Agent Member or other Person
(other than the Depositary) of any notice (including any notice of repurchase)
or the payment of any amount, under or with respect to such Securities. All
notices and communications to be given to the Securityholders and all payments
to be made to Securityholders under the Securities shall be given or made only
to or upon the order of the registered Securityholders (which shall be the
Depository or its nominee in the case of a Global Security). The rights of
beneficial owners in any Global Security shall be exercised only through the
Depository subject to the customary procedures of the Depository. The Trustee
may rely and shall be fully protected in relying upon information furnished by
the Depository with respect to its Agent Members.
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 Security (including any transfers between or among Agent Members in any
Global Indenture) other than to require delivery of such certificates and other
documentation or evidence as are expressly required by, and to do so if and when
expressly required by, the terms of this Indenture, and to examine the same to
determine substantial compliance as to form with the express requirements
hereof.
Section 2.06 Mutilated, Destroyed, Lost or Stolen Securities. In case
any Security shall become mutilated or be destroyed, lost or stolen, the Company
in its discretion may execute, and upon its written request the Trustee or an
authenticating agent appointed by the Trustee shall authenticate and make
available for delivery, a new Security, bearing a number not contemporaneously
outstanding, in exchange and substitution for the mutilated Security, or in lieu
of and in substitution for the Security so destroyed, lost or stolen. In every
case, the applicant for a substituted Security shall furnish to the Company, to
the Trustee and, if applicable, to such authenticating agent such security or
indemnity as may be required by them to save each of them harmless for any loss,
liability, cost or
16
expense caused by or connected with such substitution, and, in every case of
destruction, loss or theft, the applicant shall also furnish to the Company, to
the Trustee and, if applicable, to such authenticating agent evidence to their
satisfaction of the destruction, loss or theft of such Security and of the
ownership thereof.
Following receipt by the Trustee or such authenticating agent, as the
case may be, of satisfactory security or indemnity and evidence, as described in
the preceding paragraph, the Trustee or such authenticating agent may
authenticate any such substituted Security and make available for delivery such
Security. Upon the issuance of any substituted Security, the Company may require
the payment by the holder of a sum sufficient to cover any tax, assessment or
other governmental charge that may be imposed in relation thereto and any other
expenses connected therewith. In case any Security which has matured or is about
to mature or has been tendered for repurchase upon a Designated Event (and not
withdrawn) or is to be converted into Common Stock shall become mutilated or be
destroyed, lost or stolen, the Company may, instead of issuing a substitute
Security, pay or authorize the payment of or convert or authorize the conversion
of the same (without surrender thereof except in the case of a mutilated
Security), as the case may be, if the applicant for such payment or conversion
shall furnish to the Company, to the Trustee and, if applicable, to such
authenticating agent such security or indemnity as may be required by them to
save each of them harmless for any loss, liability, cost or expense caused by or
in connection with such substitution, and, in every case of destruction, loss or
theft, the applicant shall also furnish to the Company, the Trustee and, if
applicable, any paying agent or conversion agent evidence to their satisfaction
of the destruction, loss or theft of such Security and of the ownership thereof.
Every substitute Security issued pursuant to the provisions of this
Section 2.06 by virtue of the fact that any Security is destroyed, lost or
stolen shall constitute an additional contractual obligation of the Company,
whether or not the destroyed, lost or stolen Security shall be found at any
time, and shall be entitled to all the benefits of (but shall be subject to all
the limitations set forth in) this Indenture equally and proportionately with
any and all other Securities duly issued hereunder. To the extent permitted by
law, all Securities shall be held and owned upon the express condition that the
foregoing provisions are exclusive with respect to the replacement or payment or
conversion or repurchase of mutilated, destroyed, lost or stolen Securities and
shall preclude any and all other rights or remedies notwithstanding any law or
statute existing or hereafter enacted to the contrary with respect to the
replacement or payment or conversion or repurchase of negotiable instruments or
other securities without their surrender.
Section 2.07 Temporary Securities. Pending the preparation of
Securities in certificated form, the Company may execute and the Trustee or an
authenticating agent appointed by the Trustee shall, upon the written request of
17
the Company, authenticate and deliver temporary Securities (printed or
lithographed). Temporary Securities shall be issuable in any authorized
denomination, and substantially in the form of the Securities in certificated
form, but with such omissions, insertions and variations as may be appropriate
for temporary Securities, all as may be determined by the Company. Every such
temporary Security shall be executed by the Company and authenticated by the
Trustee or such authenticating agent upon the same conditions and in
substantially the same manner, and with the same effect, as the Securities in
certificated form. Without unreasonable delay, the Company will execute and
deliver to the Trustee or such authenticating agent Securities in certificated
form and thereupon any or all temporary Securities may be surrendered in
exchange therefor, at each office or agency maintained by the Company pursuant
to Section 3.02 and the Trustee or such authenticating agent shall authenticate
and make available for delivery in exchange for such temporary Securities an
equal aggregate principal amount of Securities in certificated form. Such
exchange shall be made by the Company at its own expense and without any charge
therefor. Until so exchanged, the temporary Securities shall in all respects be
entitled to the same benefits and subject to the same limitations under this
Indenture as Securities in certificated form authenticated and delivered
hereunder.
Section 2.08 Cancellation of Securities. All Securities surrendered for
the purpose of payment, repurchase, conversion, exchange or registration of
transfer shall, if surrendered to the Company or any paying agent or any
Security Registrar or any conversion agent, be surrendered to the Trustee and
promptly canceled by it, or, if surrendered to the Trustee, shall be promptly
canceled by it, and no Securities shall be issued in lieu thereof except as
expressly permitted by any of the provisions of this Indenture. The Trustee
shall dispose of such canceled Securities in accordance with its customary
procedures. If the Company shall acquire any of the Securities, such acquisition
shall not operate as a repurchase or satisfaction of the indebtedness
represented by such Securities unless and until the same are delivered to the
Trustee for cancellation.
Section 2.09 CUSIP Numbers. The Company in issuing the Securities may
use "CUSIP" numbers (if then generally in use), and, if so, the Trustee shall
use "CUSIP" numbers in notice of repurchase as a convenience to Securityholders;
provided that any such notice may state that no representation is made as to the
correctness of such numbers either as printed on the Securities or as contained
in any notice of a repurchase and that reliance may be placed only on the other
identification numbers printed on the Securities, and any such repurchase shall
not be affected by any defect in or omission of such numbers. The Company will
promptly notify the Trustee of any change in the "CUSIP" numbers.
18
ARTICLE 3
PARTICULAR COVENANTS OF THE COMPANY
Section 3.01 Payment of Principal, Premium and Interest. The Company
will duly and punctually pay or cause to be paid the principal of and premium,
if any (including the repurchase price upon repurchase pursuant to Article 14),
and Interest, on each of the Securities at the places, at the respective times
and in the manner provided herein and in the Securities.
Section 3.02 Maintenance of Office or Agency. The Company will maintain
an office or agency in the Borough of Manhattan, the City of New York, where the
Securities may be surrendered for registration of transfer or exchange or for
presentation for payment or for conversion or repurchase and where notices and
demands to or upon the Company in respect of the Securities and this Indenture
may be served. The Company will give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency not
designated or appointed by the Trustee. If at any time the Company shall fail to
maintain any such required office or agency or shall fail to furnish the Trustee
with the address thereof, such presentations, surrenders, notices and demands
may be made or served at the Trustee's designated office in the Borough of
Manhattan, the City of New York. As of the date hereof, the Trustee's designated
office in the Borough of Manhattan, the City of New York, shall be located at
101 Barclay Street, New York, New York 10286; provided, however, that such
designated office may be changed by the Trustee, in its sole discretion, from
time to time so long as such office is located in the Borough of Manhattan, the
City of New York.
The Company may also from time to time designate co-registrars and one
or more offices or agencies where the Securities may be presented or surrendered
for any or all such purposes and may from time to time rescind such
designations. The Company will give prompt written notice of any such
designation or rescission and of any change in the location of any such other
office or agency.
The Company hereby initially designates the Trustee as paying agent,
Security Registrar, Custodian and conversion agent and the Trustee's designated
office in the Borough of Manhattan, the City of New York, shall be considered as
an office or agency of the Company for each of the aforesaid purposes.
Section 3.03 Appointments to Fill Vacancies in Trustee's Office. The
Company, whenever necessary to avoid or fill a vacancy in the office of Trustee,
will appoint, in the manner provided in Section 6.10, a Trustee, so that there
shall at all times be a Trustee hereunder.
Section 3.04 Provisions as to Paying Agent. If the Company shall
appoint a paying agent other than the Trustee, or if the Trustee shall appoint
such a paying agent, the Company will cause such paying agent to execute and
deliver
19
to the Trustee an instrument in which such agent shall agree with the Trustee,
subject to the provisions of this Section 3.04:
(1) that it will hold all sums held by it as such agent
for the payment of the principal of and premium, if any, or interest on
the Securities (whether such sums have been paid to it by the Company
or by any other obligor on the Securities) in trust for the benefit of
the holders of the Securities;
(2) that it will give the Trustee notice of any failure
by the Company (or by any other obligor on the Securities) to make any
payment of the principal of and premium, if any, or interest on the
Securities when the same shall be due and payable; and
(3) that at any time during the continuance of an Event
of Default, upon request of the Trustee, it will forthwith pay to the
Trustee all sums so held in trust.
The Company shall, on or before each due date of the principal of,
premium, if any, or interest on the Securities, deposit with the paying agent a
sum (in funds which are immediately available on the due date for such payment)
sufficient to pay such principal, premium, if any, or interest, and (unless such
paying agent is the Trustee) the Company will promptly notify the Trustee of any
failure to take such action; provided that if such deposit is made on the due
date, such deposit shall be received by the paying agent by 10:00 a.m. New York
City time, on such date.
(b) If the Company shall act as its own paying agent, it will, on
or before each due date of the principal of, premium, if any, or Interest on the
Securities, set aside, segregate and hold in trust for the benefit of the
holders of the Securities a sum sufficient to pay such principal, premium, if
any, or Interest so becoming due and will promptly notify the Trustee of any
failure to take such action and of any failure by the Company (or any other
obligor under the Securities) to make any payment of the principal of, premium,
if any, or Interest on the Securities when the same shall become due and
payable.
(c) Anything in this Section 3.04 to the contrary
notwithstanding, the Company may, at any time, for the purpose of obtaining a
satisfaction and discharge of this Indenture, or for any other reason, pay or
cause to be paid to the Trustee all sums held in trust by the Company or any
paying agent hereunder as required by this Section 3.04, such sums to be held
by the Trustee upon the trusts herein contained and upon such payment by the
Company or any paying agent to the Trustee, the Company or such paying agent
shall be released from all further liability with respect to such sums.
20
(d) Anything in this Section 3.04 to the contrary
notwithstanding, the agreement to hold sums in trust as provided in this
Section 3.04 is subject to Sections 11.03 and 11.04.
The Trustee shall not be responsible for the actions of any other
paying agents (including the Company if acting as its own paying agent) and
shall have no control of any funds held by such other paying agents.
Section 3.05 Existence. Except as otherwise permitted by Article 10,
the Company will do or cause to be done all things necessary to preserve and
keep in full force and effect its existence and rights (charter and statutory);
provided that the Company shall not be required to preserve any such right if
the Company shall determine that the preservation thereof is no longer desirable
in the conduct of the business of the Company and that the loss thereof is not
disadvantageous in any material respect to the Securityholders.
Section 3.06 Maintenance of Properties. The Company will cause all
properties used or useful in the conduct of its business or the business of any
Significant Subsidiary to be maintained and kept in good condition, repair and
working order and supplied with all necessary equipment and will cause to be
made all necessary repairs, renewals, replacements, betterments and improvements
thereof, all as is consistent with the Company's past practice and is in the
judgment of the Company may be necessary so that the business carried on in
connection therewith may be properly and advantageously conducted at all times;
provided that nothing in this Section shall prevent the Company from
discontinuing the operation or maintenance of any of such properties if such
discontinuance is, in the judgment of the Company, desirable in the conduct of
its business or the business of any subsidiary and not disadvantageous in any
material respect to the Securityholders.
Section 3.07 Payment of Taxes and Other Claims. The Company will pay or
discharge, or cause to be paid or discharged, before the same may become
delinquent, (i) all taxes, assessments and governmental charges levied or
imposed upon the Company or any Significant Subsidiary or upon the income,
profits or property of the Company or any Significant Subsidiary, (ii) all
claims for labor, materials and supplies which, if unpaid, might by law become a
lien or charge upon the property of the Company or any Significant Subsidiary
and (iii) all stamp taxes and other duties, if any, which may be imposed by the
United States or any political subdivision thereof or therein in connection with
the issuance, transfer, exchange, conversion or repurchase of any Securities or
with respect to this Indenture; provided that, in the case of clauses (i) and
(ii), the Company shall not be required to pay or discharge or cause to be paid
or discharged any such tax, assessment, charge or claim (A) if the failure to do
so will not, in the aggregate, have a material adverse impact on the Company and
its Subsidiaries, taken as a
21
whole, or (B) if the amount, applicability or validity is being contested in
good faith by appropriate proceedings.
Section 3.08 Rule 144A Information Requirement. Within the period prior
to the expiration of the holding period applicable to sales thereof under Rule
144(k) under the Securities Act (or any successor provision), the Company shall,
during any period in which it is not subject to Section 13 or 15(d) under the
Exchange Act, make available to any holder or beneficial holder of Securities or
any Common Stock issued upon conversion thereof which continue to be Restricted
Securities in connection with any sale thereof and any prospective purchaser of
Securities or such Common Stock designated by such holder or beneficial holder,
the information required pursuant to Rule 144A(d)(4) under the Securities Act
upon the request of any holder or beneficial holder of the Securities or such
Common Stock and it will take such further action as any holder or beneficial
holder of such Securities or such Common Stock may reasonably request, all to
the extent required from time to time to enable such holder or beneficial holder
to sell its Securities or Common Stock without registration under the Securities
Act within the limitation of the exemption provided by Rule 144A, as such Rule
may be amended from time to time. Upon the request of any holder or any
beneficial holder of the Securities or such Common Stock, the Company will
deliver to such holder a written statement as to whether it has complied with
such requirements.
Section 3.09 Stay, Extension and Usury Laws. The Company (if and to the
extent that it may lawfully do so) shall not at any time insist upon, plead, or
in any manner whatsoever claim or take the benefit or advantage of, any stay,
extension or usury law or other law which would prohibit or forgive the Company
from paying all or any portion of the principal of, premium, if any, or interest
on the Securities as contemplated herein, wherever enacted, now or at any time
hereafter in force, or which may affect the covenants or the performance of this
Indenture and the Company (to the extent it may lawfully do so) hereby expressly
waives all benefit or advantage of any such law, and covenants that it will not,
by resort to any such law, hinder, delay or impede the execution of any power
herein granted to the Trustee, but will suffer and permit the execution of every
such power as though no such law had been enacted.
Section 3.10 Compliance Certificate. The Company shall deliver to the
Trustee, within one hundred twenty (120) days after the end of each fiscal year
of the Company, a certificate signed by either the principal executive officer,
principal financial officer or principal accounting officer of the Company,
stating whether or not to the best knowledge of the signer thereof the Company
is in default in the performance and observance of any of the terms, provisions
and conditions of this Indenture (without regard to any period of grace or
requirement of notice provided hereunder) and, if the Company shall be in
default, specifying
22
all such defaults and the nature and the status thereof of which the signer may
have knowledge.
The Company will deliver to the Trustee, forthwith upon becoming aware
of (i) any default in the performance or observance of any covenant, agreement
or condition contained in this Indenture, or (ii) any Event of Default, an
Officers' Certificate specifying with particularity such default or Event of
Default and further stating what action the Company has taken, is taking or
proposes to take with respect thereto.
Any notice required to be given under this Section 3.10 shall be
delivered to a Responsible Officer of the Trustee at its Corporate Trust Office.
Section 3.11 Additional Interest Notice. If the Company is required to
pay Additional Interest to holders of Securities pursuant to the Registration
Rights Agreement, the Company will provide written notice ("ADDITIONAL INTEREST
NOTICE") to the Trustee of its obligation to pay Additional Interest no later
than fifteen (15) days prior to the proposed payment date for the Additional
Interest, and the Additional Interest Notice shall set forth the amount of
Additional Interest to be paid by the Company on such payment date. The Trustee
shall not at any time be under any duty or responsibility to any holder of
Securities to determine whether Additional Interest is due or the amount of
Additional Interest.
ARTICLE 4
SECURITYHOLDERS' LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE
Section 4.01 Securityholders' Lists. The Company will furnish or cause
to be furnished to the Trustee, semiannually, not more than fifteen (15) days
after each June 1 and December 1 in each year beginning with June 1, 2004, and
at such other times as the Trustee may request in writing, within fifteen (15)
days after receipt by the Company of any such request (or such lesser time as
the Trustee may reasonably request in order to enable it to timely provide any
notice to be provided by it hereunder), a list in such form as the Trustee may
reasonably require of the names and addresses of the holders of Securities as of
a date not more than fifteen (15) days (or such other date as the Trustee may
reasonably request in order to so provide any such notices) prior to the time
such information is furnished, except that no such list need be furnished by the
Company to the Trustee so long as the Trustee is acting as the sole Security
Registrar.
Section 4.02 Preservation And Disclosure Of Lists. The Trustee shall
preserve, in as current a form as is reasonably practicable, all information as
to the names and addresses of the holders of Securities contained in the most
recent list furnished to it as provided in Section 4.01 or maintained by the
Trustee in its capacity as Security Registrar or co-registrar in respect of the
Securities, if so
23
acting. The Trustee may destroy any list furnished to it as provided in Section
4.01 upon receipt of a new list so furnished.
(b) The rights of Securityholders to communicate with other
holders of Securities with respect to their rights under this Indenture or under
the Securities, and the corresponding rights and duties of the Trustee, shall be
as provided by the Trust Indenture Act.
(c) Every Securityholder, by receiving and holding the same,
agrees with the Company and the Trustee that neither the Company nor the Trustee
nor any agent of either of them shall be held accountable by reason of any
disclosure of information as to names and addresses of holders of Securities
made pursuant to the Trust Indenture Act, nor shall the Trustee be held
accountable by reason of mailing any material pursuant to a request made under
TIA Section 312(b).
Section 4.03 Reports By Trustee. Within sixty (60) days after June 15
of each year commencing with the year 2004, the Trustee shall transmit to
holders of Securities such reports dated as of June 15 of the year in which such
reports are made concerning the Trustee and its actions under this Indenture as
may be required pursuant to the Trust Indenture Act at the times and in the
manner provided pursuant thereto. In the event that no events have occurred
under the applicable sections of the Trust Indenture Act the Trustee shall be
under no duty or obligation to provide such reports.
(b) A copy of such report shall, at the time of such transmission
to holders of Securities, be filed by the Trustee with each stock exchange and
automated quotation system upon which the Securities are listed and with the
Commission. The Company will promptly notify the Trustee in writing when the
Securities are listed on any stock exchange or automated quotation system or
delisted therefrom.
Section 4.04 Reports by Company. The Company shall file with the
Trustee (and the Commission if at any time after the Indenture becomes qualified
under the Trust Indenture Act), and transmit to holders of Securities, such
information, documents and other reports and such summaries thereof, as may be
required pursuant to the Trust Indenture Act at the times and in the manner
provided pursuant thereto, whether or not the Securities are governed by the
Trust Indenture Act; provided that any such information, documents or reports
required to be filed with the Commission pursuant to Section 13 or 15(d) of the
Exchange Act shall be filed with the Trustee within fifteen (15) days after the
same is so required to be filed with the Commission. Delivery of such reports,
information and documents to the Trustee is for informational purposes only and
the Trustee's receipt of such shall not constitute constructive notice of any
information contained therein or determinable from information contained
therein, including
24
the Company's compliance with any of its covenants hereunder (as to which the
Trustee is entitled to rely exclusively on an Officers' Certificates).
ARTICLE 5
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS ON AN EVENT OF DEFAULT
Section 5.01 Events of Default. If one or more of the following Events
of Default (whatever the reason for such Event of Default and whether it shall
be voluntary or involuntary or be effected by operation of law or pursuant to
any judgment, decree or order of any court or any order, rule or regulation of
any administrative or governmental body) shall have occurred and be continuing:
(a) default in the payment of the principal of or premium, if any,
on any of the Securities as and when the same shall become due and payable
either at maturity or in connection with any repurchase or otherwise pursuant to
Article 14, by acceleration or otherwise;
(b) default in the payment of any installment of Interest upon any
of the Securities as and when the same shall become due and payable, and
continuance of such default for a period of thirty (30) days; or
(c) default in the Company's obligation to provide a Designated
Event Notice upon a Designated Event as provided in Section 14.01; or
(d) failure on the part of the Company duly to observe or perform
any other of the covenants or agreements on the part of the Company in the
Securities or in this Indenture (other than a covenant or agreement a default in
whose performance or whose breach is elsewhere in this Section 5.01
specifically dealt with) continued for a period of sixty (60) days after the
date on which written notice of such failure, requiring the Company to remedy
the same, shall have been given to the Company by the Trustee, or the Company
and a Responsible Officer of the Trustee by the holders of at least twenty-five
percent (25%) in aggregate principal amount of the Securities at the time
outstanding determined in accordance with Section 7.04; or
(e) default in payments or default in other obligations causing
acceleration of indebtedness prior to maturity, where the principal amount of
the indebtedness subject to such defaults aggregates $5 million or more, unless
such indebtedness is discharged or such acceleration is waived, cured, rescinded
or annulled; or
(f) failure by the Company to deliver shares of Common Stock upon
conversion of the Securities within the time period specified in Section 15.02,
and such failure continues for a period of five (5) days; or
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(g) the Company shall commence a voluntary case or other
proceeding seeking liquidation, reorganization or other relief with respect to
the Company or its debts under any bankruptcy, insolvency or other similar law
now or hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of the Company or any
substantial part of the property of the Company, or shall consent to any such
relief or to the appointment of or taking possession by any such official in an
involuntary case or other proceeding commenced against the Company, or shall
make a general assignment for the benefit of creditors, or shall fail generally
to pay its debts as they become due; or
(h) an involuntary case or other proceeding shall be commenced
against the Company seeking liquidation, reorganization or other relief with
respect to the Company or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of the Company or any
substantial part of the property of the Company, and such involuntary case or
other proceeding shall remain undismissed and unstayed for a period of sixty
(60) consecutive days;
then, and in each and every such case (other than an Event of Default specified
in Section 5.01(g) or 5.01(h)), unless the principal of all of the Securities
shall have already become due and payable, either the Trustee or the holders of
not less than twenty-five percent (25%) in aggregate principal amount of the
Securities then outstanding hereunder determined in accordance with Section
7.04, by notice in writing to the Company (and to the Trustee if given by
Securityholders), may declare the principal of and premium, if any, on all the
Securities and the Interest accrued thereon to be due and payable immediately,
and upon any such declaration the same shall become and shall be immediately due
and payable, anything in this Indenture or in the Securities contained to the
contrary notwithstanding. If an Event of Default specified in Section 5.01(g)
or 5.01(h) occurs, the principal of all the Securities and the Interest accrued
thereon shall be immediately and automatically due and payable without necessity
of further action. This provision, however, is subject to the conditions that
if, at any time after the principal of the Securities shall have been so
declared due and payable, and before any judgment or decree for the payment of
the monies due shall have been obtained or entered as hereinafter provided, the
Company shall pay or shall deposit with the Trustee a sum sufficient to pay all
matured installments of Interest upon all Securities and the principal of and
premium, if any, on any and all Securities which shall have become due otherwise
than by acceleration (with interest on overdue installments of Interest (to the
extent that payment of such interest is enforceable under applicable law) and on
such principal and premium, if any, at the rate borne by the Securities, to the
date of such payment or deposit) and amounts due to the Trustee pursuant to
Section 6.06, and if any and all defaults under this Indenture, other than the
nonpayment of principal of and premium, if any, and accrued Interest on
Securities which shall have become due by acceleration, shall have been cured or
waived pursuant to Section 5.07, then
26
and in every such case the holders of a majority in aggregate principal amount
of the Securities then outstanding, by written notice to the Company and to the
Trustee, may waive all defaults or Events of Default and rescind and annul such
declaration and its consequences; but no such waiver or rescission and annulment
shall extend to or shall affect any subsequent default or Event of Default, or
shall impair any right consequent thereon. The Company shall notify in writing a
Responsible Officer of the Trustee, promptly upon becoming aware thereof, of any
Event of Default.
In case the Trustee shall have proceeded to enforce any right under
this Indenture and such proceedings shall have been discontinued or abandoned
because of such waiver or rescission and annulment or for any other reason or
shall have been determined adversely to the Trustee, then and in every such case
the Company, the holders of Securities, and the Trustee shall be restored
respectively to their several positions and rights hereunder, and all rights,
remedies and powers of the Company, the holders of Securities, and the Trustee
shall continue as though no such proceeding had been taken.
Section 5.02 Payments of Securities on Default; Suit Therefor. The
Company covenants that in case default shall be made in the payment of any
installment of Interest upon any of the Securities as and when the same shall
become due and payable, and such default shall have continued for a period of
thirty (30) days, or the principal of or premium, if any, on any of the
Securities as and when the same shall have become due and payable, whether at
maturity of the Securities or in connection with any repurchase, by or under
this Indenture, by declaration (subject to Section 5.01) or otherwise, then,
upon demand of the Trustee, the Company will pay to the Trustee, for the benefit
of the holders of the Securities, the whole amount that then shall have become
due and payable on all such Securities for principal and premium, if any, or
Interest, as the case may be, with interest upon the overdue principal and
premium, if any, and (if and to the extent that payment of such interest is
enforceable under applicable law) upon the overdue installments of Interest at
the rate set forth in the Securities for overdue payments of principal and
interest and, in addition thereto, such further amount as shall be sufficient to
cover the costs and expenses of collection, including reasonable compensation to
the Trustee, its agents, attorneys and counsel, and all other amounts due the
Trustee under Section 6.06. Until such demand by the Trustee, the Company may
pay the principal of and premium, if any, and Interest on the Securities to the
registered holders, whether or not the Securities are overdue.
If the Company shall fail forthwith to pay such amounts upon such
demand, the Trustee, in its own name and as trustee of an express trust, shall
be entitled and empowered to institute any actions or proceedings at law or in
equity for the collection of the sums so due and unpaid, and may prosecute any
such action or proceeding to judgment or final decree, and may enforce any such
27
judgment or final decree against the Company or any other obligor on the
Securities and collect in the manner provided by law out of the property of the
Company or any other obligor on the Securities wherever situated the monies
adjudged or decreed to be payable.
If there shall be pending proceedings for the bankruptcy or for the
reorganization of the Company or any other obligor on the Securities under Title
11 of the United States Code, or any other applicable law, or in case a
receiver, assignee or trustee in bankruptcy or reorganization, liquidator,
sequestrator or similar official shall have been appointed for or taken
possession of the Company or such other obligor, the property of the Company or
such other obligor, or in the case of any other judicial proceedings relative to
the Company or such other obligor upon the Securities, or to the creditors or
property of the Company or such other obligor, the Trustee, irrespective of
whether the principal of the Securities shall then be due and payable as therein
expressed or by declaration or otherwise and irrespective of whether the Trustee
shall have made any demand pursuant to the provisions of this Section 5.02,
shall be entitled and empowered, by intervention in such proceedings or
otherwise, to file and prove a claim or claims for the whole amount of
principal, premium, if any, and Interest owing and unpaid in respect of the
Securities, and, in case of any judicial proceedings, to file such proofs of
claim and other papers or documents as may be necessary or advisable in order to
have the claims of the Trustee and of the Securityholders allowed in such
judicial proceedings relative to the Company or any other obligor on the
Securities, its or their creditors, or its or their property, and to collect and
receive any monies or other property payable or deliverable on any such claims,
and to distribute the same after the deduction of any amounts due the Trustee
under Section 6.06, and to take any other action with respect to such claims,
including participating as a member of any official committee of creditors, as
it reasonably deems necessary or advisable, and, unless prohibited by law or
applicable regulations, any receiver, assignee or trustee in bankruptcy or
reorganization, liquidator, custodian or similar official is hereby authorized
by each of the Securityholders to make such payments to the Trustee, and, if the
Trustee shall consent to the making of such payments directly to the
Securityholders, to pay to the Trustee any amount due it for reasonable
compensation, expenses, advances and disbursements, including counsel fees and
expenses incurred by it up to the date of such distribution. To the extent that
such payment of reasonable compensation, expenses, advances and disbursements
out of the estate in any such proceedings shall be denied for any reason,
payment of the same shall be secured by a lien on, and shall be paid out of, any
and all distributions, dividends, monies, securities and other property which
the holders of the Securities may be entitled to receive in such proceedings,
whether in liquidation or under any plan of reorganization or arrangement or
otherwise.
All rights of action and of asserting claims under this Indenture, or
under any of the Securities, may be enforced by the Trustee without the
possession of
28
any of the Securities, or the production thereof at any trial or other
proceeding relative thereto, and any such suit or proceeding instituted by the
Trustee shall be brought in its own name as trustee of an express trust, and any
recovery of judgment shall, after provision for the payment of the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, be for the ratable benefit of the holders of the Securities.
In any proceedings brought by the Trustee (and in any proceedings
involving the interpretation of any provision of this Indenture to which the
Trustee shall be a party) the Trustee shall be held to represent all the holders
of the Securities, and it shall not be necessary to make any holders of the
Securities parties to any such proceedings.
Section 5.03 Application of Monies Collected By Trustee. Any monies
collected by the Trustee pursuant to this Article 5 shall be applied in the
order following, at the date or dates fixed by the Trustee for the distribution
of such monies, upon presentation of the several Securities, and stamping
thereon the payment, if only partially paid, and upon surrender thereof, if
fully paid:
FIRST: To the payment of all amounts due the Trustee under Section
6.06;
SECOND: In case the principal of the outstanding Securities shall not
have become due and be unpaid, to the payment of due and unpaid Interest on any
Securities in the order of the maturity of the installments of such Interest,
with interest (to the extent that such interest has been collected by the
Trustee) upon the overdue installments of Interest at the rate borne by the
Securities, such payments to be made ratably to the Securityholders entitled
thereto;
THIRD: In case the principal of the outstanding Securities shall have
become due, by declaration or otherwise, and be unpaid, to the payment of the
whole amount then owing and unpaid upon the Securities for principal and
premium, if any, and interest, with interest on the overdue principal and
premium, if any, and (to the extent that such interest has been collected by the
Trustee) upon overdue installments of interest at the rate borne by the
Securities, and in case such monies shall be insufficient to pay in full the
whole amounts so due and unpaid upon the Securities, then to the payment of such
principal and premium, if any, and interest without preference or priority of
principal and premium, if any, over interest, or of interest over principal and
premium, if any, or of any installment of interest over any other installment of
Interest, or of any Security over any other Security, ratably to the aggregate
of such principal and premium, if any, and accrued and unpaid Interest; and
FOURTH: To the payment of the remainder, if any, to the Company or any
other Person lawfully entitled thereto.
29
Section 5.04 Proceedings by Securityholder. No holder of any Security
shall have any right by virtue of or by reference to any provision of this
Indenture to institute any suit, action or proceeding in equity or at law upon
or under or with respect to this Indenture, or for the appointment of a
receiver, trustee, liquidator, custodian or other similar official, or for any
other remedy hereunder, unless such holder previously shall have given to the
Trustee written notice of an Event of Default and of the continuance thereof, as
hereinbefore provided, and unless also the holders of not less than twenty-five
percent (25%) in aggregate principal amount of the Securities then outstanding
shall have made written request upon the Trustee to institute such action, suit
or proceeding in its own name as Trustee hereunder and shall have offered to the
Trustee such reasonable security or indemnity as it may require against the
costs, expenses and liabilities to be incurred therein or thereby, and the
Trustee for sixty (60) days after its receipt of such notice, request and offer
of indemnity, shall have neglected or refused to institute any such action, suit
or proceeding and no direction inconsistent with such written request shall have
been given to the Trustee pursuant to Section 5.07; it being understood and
intended, and being expressly covenanted by the taker and holder of every
Security with every other taker and holder and the Trustee, that no one or more
holders of Securities shall have any right in any manner whatever by virtue of
or by reference to any provision of this Indenture to affect, disturb or
prejudice the rights of any other holder of Securities, or to obtain or seek to
obtain priority over or preference to any other such holder, or to enforce any
right under this Indenture, except in the manner herein provided and for the
equal, ratable and common benefit of all holders of Securities (except as
otherwise provided herein). For the protection and enforcement of this Section
5.04, each and every Securityholder and the Trustee shall be entitled to such
relief as can be given either at law or in equity.
Notwithstanding any other provision of this Indenture and any provision
of any Security, the right of any holder of any Security to receive payment of
the principal of and premium, if any, and accrued Interest on such Security, on
or after the respective due dates expressed in such Security, or to institute
suit for the enforcement of any such payment on or after such respective dates
against the Company shall not be impaired or affected without the consent of
such holder.
Anything in this Indenture or the Securities to the contrary
notwithstanding, the holder of any Security, without the consent of either the
Trustee or the holder of any other Security, in its own behalf and for its own
benefit, may enforce, and may institute and maintain any proceeding suitable to
enforce, its rights of conversion as provided herein.
Section 5.05 Proceedings By Trustee. If an Event of Default has
occurred and is continuing, the Trustee may, in its discretion, proceed to
protect and enforce the rights vested in it by this Indenture by such
appropriate judicial proceedings as are necessary to protect and enforce any of
such rights, either by
30
suit in equity or by action at law or by proceeding in bankruptcy or otherwise,
whether for the specific enforcement of any covenant or agreement contained in
this Indenture or in aid of the exercise of any power granted in this Indenture,
or to enforce any other legal or equitable right vested in the Trustee by this
Indenture or by law.
Section 5.06 Remedies Cumulative And Continuing. Except as provided in
Section 2.06, all powers and remedies given by this Article 5 to the Trustee
or to the Securityholders shall, to the extent permitted by law, be deemed
cumulative and not exclusive of any thereof or of any other powers and remedies
available to the Trustee or the holders of the Securities, by judicial
proceedings or otherwise, to enforce the performance or observance of the
covenants and agreements contained in this Indenture, and no delay or omission
of the Trustee or of any holder of any of the Securities to exercise any right
or power accruing upon any default or Event of Default occurring and continuing
as aforesaid shall impair any such right or power, or shall be construed to be a
waiver of any such default or any acquiescence therein, and, subject to the
provisions of Section 5.04, every power and remedy given by this Article 5 or
by law to the Trustee or to the Securityholders may be exercised from time to
time, and as often as shall be deemed expedient, by the Trustee or by the
Securityholders.
Section 5.07 Direction of Proceedings and Waiver of Defaults By
Majority of Securityholders. The holders of a majority in aggregate principal
amount of the Securities at the time outstanding determined in accordance with
Section 7.04 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; provided that (a) such direction
shall not be in conflict with any rule of law or with this Indenture, (b) the
Trustee may take any other action which is not inconsistent with such direction,
(c) the Trustee may decline to take any action that would benefit some
Securityholder to the detriment of other Securityholders and (d) the Trustee may
decline to take any action that would involve the Trustee in personal liability.
Prior to taking any such action hereunder, the Trustee shall be entitled to such
reasonable security or indemnity as it may require against the costs, expenses
and liabilities that may be incurred by it in taking or declining to take any
such action hereunder. The holders of a majority in aggregate principal amount
of the Securities at the time outstanding determined in accordance with Section
7.04 may, on behalf of the holders of all of the Securities, waive any Event of
Default or past default hereunder and its consequences except (i) a default in
the payment of Interest or premium, if any, on, or the principal of, the
Securities, (ii) a failure by the Company to convert any Securities into Common
Stock, (iii) a default in the payment of the repurchase price pursuant to
Article 14 or (iv) a default in respect of a covenant or provision hereof which
under Article 9 cannot be modified or amended without the consent of each of
the holders of Securities then outstanding or affected thereby. Upon any such
waiver, the Company, the Trustee and the
31
holders of the Securities shall be restored to their former positions and rights
hereunder; but no such waiver shall extend to any subsequent or other default or
Event of Default or impair any right consequent thereon. Whenever any default or
Event of Default hereunder shall have been waived as permitted by this Section
5.07, said default or Event of Default shall for all purposes of the Securities
and this Indenture be deemed to have been cured and to be not continuing; but no
such waiver shall extend to any subsequent or other default or Event of Default
or impair any right consequent thereon.
Section 5.08 Notice of Defaults. The Trustee shall, within ninety (90)
days after a Responsible Officer of the Trustee has knowledge of the occurrence
of a default, mail to all Securityholders, as the names and addresses of such
holders appear upon the Security Register, notice of all defaults known to a
Responsible Officer, unless such defaults shall have been cured or waived before
the giving of such notice; provided that except in the case of default in the
payment of the principal of, or premium, if any, or Interest on any of the
Securities, the Trustee shall be protected in withholding such notice if and so
long as the board of directors, the executive committee, or a trust committee of
directors and/or Responsible Officers of the Trustee in good faith determines
that the withholding of such notice is in the interests of the Securityholders.
Section 5.09 Undertaking To Pay Costs. All parties to this Indenture
agree, and each holder of any Security by his acceptance thereof shall be deemed
to have agreed, that any court may, in its discretion, require, in any suit for
the enforcement of any right or remedy under this Indenture, or in any suit
against the Trustee for any action taken or omitted by it as Trustee, the filing
by any party litigant in such suit of an undertaking to pay the costs of such
suit and that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees and expenses, against any party litigant in
such suit, having due regard to the merits and good faith of the claims or
defenses made by such party litigant; provided that the provisions of this
Section 5.09 (to the extent permitted by law) shall not apply to any suit
instituted by the Trustee, to any suit instituted by any Securityholder, or
group of Securityholders, holding in the aggregate more than ten percent in
principal amount of the Securities at the time outstanding determined in
accordance with Section 7.04, or to any suit instituted by any Securityholder
for the enforcement of the payment of the principal of or premium, if any, or
Interest on any Security on or after the due date expressed in such Security or
to any suit for the enforcement of the right to convert any Security in
accordance with the provisions of Article 15.
32
ARTICLE 6
THE TRUSTEE
Section 6.01 Duties and Responsibilities of Trustee. The Trustee,
except during the continuance of an Event of Default, undertakes to perform such
duties and only such duties as are specifically set forth in this Indenture. In
case an Event of Default has occurred (which has not been cured or waived), the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their exercise, as a
prudent person would exercise or use under the circumstances in the conduct of
his own affairs.
No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own willful misconduct, except that:
(a) except during the continuance of an Event of Default:
(i) the duties and obligations of the Trustee shall be
determined solely by the express provisions of this Indenture and the
Trust Indenture Act, and the Trustee shall not be liable except for the
performance of such duties and obligations as are specifically set
forth in this Indenture and no implied covenants or obligations shall
be read into this Indenture and the Trust Indenture Act against the
Trustee; and
(ii) in the absence of bad faith and willful misconduct on
the part of the Trustee, the Trustee may conclusively rely as to the
truth of the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the Trustee and
conforming to the requirements of this Indenture; but, in the case of
any such certificates or opinions which by any provisions hereof are
specifically required to be furnished to the Trustee, the Trustee shall
be under a duty to examine the same to determine whether or not they
conform to the requirements of this Indenture;
(b) the Trustee shall not be liable for any error of judgment made
in good faith by a Responsible Officer or Responsible Officers of the Trustee,
unless the Trustee was negligent in ascertaining the pertinent facts;
(c) 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 the written
direction of the holders of not less than a majority in principal amount of the
Securities at the time outstanding determined as provided in Section 7.04
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;
33
(d) whether or not therein provided, every provision of this
Indenture relating to the conduct or affecting the liability of, or affording
protection to, the Trustee shall be subject to the provisions of this Section;
(e) the Trustee shall not be liable in respect of any payment (as
to the correctness of amount, entitlement to receive or any other matters
relating to payment) or notice effected by the Company or any paying agent or
any records maintained by any co-registrar with respect to the Securities;
(f) if any party fails to deliver a notice relating to an event
the fact of which, pursuant to this Indenture, requires notice to be sent to the
Trustee, the Trustee may conclusively rely on its failure to receive such notice
as reason to act as if no such event occurred; and
(g) the Trustee shall not be deemed to have knowledge of any Event
of Default hereunder unless it shall have been notified in writing of such Event
of Default by the Company or the holders of at least 10% in aggregate principal
amount of the Securities.
None of the provisions contained in this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur personal financial
liability in the performance of any of its duties or in the exercise of any of
its rights or powers, if there is reasonable ground for believing that the
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.
Section 6.02 Reliance on Documents, Opinions, Etc. Except as otherwise
provided in Section 6.01:
(a) the Trustee may conclusively rely and shall be protected in
acting upon any resolution, certificate, statement, instrument, opinion, report,
notice, request, consent, order, bond, Security, note, coupon or other paper or
document (whether in its original or facsimile form) believed by it in good
faith to be genuine and to have been signed or presented by the proper party or
parties;
(b) any request, direction, order or demand of the Company
mentioned herein shall be sufficiently evidenced by an Officers' Certificate
(unless other evidence in respect thereof be herein specifically prescribed);
and any resolution of the Board of Directors may be evidenced to the Trustee by
a copy thereof certified by the Secretary or an Assistant Secretary of the
Company;
(c) the Trustee may consult with counsel of its own selection and
any advice or Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken or omitted by it hereunder in good
faith and in accordance with such advice or Opinion of Counsel;
34
(d) the Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Indenture at the request, order or
direction of any of the Securityholders pursuant to the provisions of this
Indenture, unless such Securityholders shall have offered to the Trustee
reasonable security or indemnity satisfactory to it against the costs, expenses
and liabilities which may be incurred therein or thereby;
(e) the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
Security or other paper or document, but the Trustee 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;
(f) the Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed by it with due care
hereunder;
(g) the Trustee shall not be liable for any action taken, suffered
or omitted to be taken by it in good faith and reasonably believed by it to be
authorized or within the discretion or rights or powers conferred upon it by
this Indenture;
(h) the rights, privileges, protections, immunities and benefits
given to the Trustee, including, without limitation, its right to be
indemnified, are extended to, and shall be enforceable by, the Trustee in each
of its capacities hereunder, and each agent, custodian and other Person employed
to act hereunder;
(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; and
(j) Any permissive right or authority granted to the Trustee shall
not be construed as a mandatory duty.
Section 6.03 No Responsibility For Recitals, Etc. The recitals
contained herein and in the Securities (except in the Trustee's certificate of
authentication) shall be taken as the statements of the Company, and the Trustee
assumes no responsibility for the correctness of the same. The Trustee makes no
35
representations as to the validity or sufficiency of this Indenture or of the
Securities. The Trustee shall not be accountable for the use or application by
the Company of any Securities or the proceeds of any Securities authenticated
and delivered by the Trustee in conformity with the provisions of this
Indenture.
Section 6.04. Trustee, Paying Agents, Conversion Agents or Registrar
May Own Securities. The Trustee, any paying agent, any conversion agent or
Security Registrar, in its individual or any other capacity, may become the
owner or pledgee of Securities with the same rights it would have if it were not
Trustee, paying agent, conversion agent or Security Registrar.
Section 6.05. Monies to Be Held in Trust. Subject to the provisions of
Section 11.04, all monies received by the Trustee shall, until used or applied
as herein provided, be held in trust for the purposes for which they were
received. Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall be
under no liability for interest on any money received by it hereunder except as
may be agreed in writing from time to time by the Company and the Trustee.
Section 6.06. Compensation and Expenses of Trustee. The Company
covenants and agrees to pay to the Trustee from time to time, and the Trustee
shall be entitled to, such compensation for all services rendered by it
hereunder in any capacity (which shall not be limited by any provision of law in
regard to the compensation of a trustee of an express trust) as mutually agreed
to from time to time in writing between the Company and the Trustee, and the
Company will pay or reimburse the Trustee upon its request for all reasonable
expenses, disbursements and advances reasonably incurred or made by the Trustee
in accordance with any of the provisions of this Indenture (including the
reasonable compensation and the expenses and disbursements of its counsel and of
all Persons not regularly in its employ) except any such expense, disbursement
or advance as may arise from its negligence, willful misconduct, recklessness or
bad faith. The Company also covenants to indemnify the Trustee and any
predecessor Trustee (or any officer, director or employee of the Trustee), in
any capacity under this Indenture and its agents and any authenticating agent
for, and to hold them harmless against, any and all loss, liability, damage,
claim or expense including taxes (other than taxes based on the income of the
Trustee) incurred without negligence, willful misconduct, recklessness or bad
faith on the part of the Trustee or such officers, directors, employees and
agent or authenticating agent, as the case may be, and arising out of or in
connection with the acceptance or administration of this trust or in any other
capacity hereunder, including the costs and expenses of defending themselves
against any claim (whether asserted by the Company, any holder or any other
Person) of liability in connection with the exercise or performance of any of
its or their powers or duties hereunder. The obligations of the Company under
this Section 6.06 to compensate or indemnify the Trustee and to pay or reimburse
the Trustee for expenses, disbursements and
36
advances shall be secured by a lien prior to that of the Securities upon all
property and funds held or collected by the Trustee as such, except funds held
in trust for the benefit of the holders of particular Securities. The obligation
of the Company under this Section shall survive the satisfaction and discharge
of this Indenture.
When the Trustee and its agents and any authenticating agent incur
expenses or render services after an Event of Default specified in Section
5.01(g) or Section 5.01(h) with respect to the Company occurs, the expenses and
the compensation for the services are intended to constitute expenses of
administration under any bankruptcy, insolvency or similar laws.
Section 6.07. Officers' Certificate As Evidence. Except as otherwise
provided in Section 6.01, whenever in the administration of the provisions of
this Indenture the Trustee shall deem it necessary or desirable that a matter be
proved or established prior to taking or omitting any action hereunder, such
matter (unless other evidence in respect thereof be herein specifically
prescribed) may, in the absence of bad faith or willful misconduct on the part
of the Trustee, be deemed to be conclusively proved and established by an
Officers' Certificate delivered to the Trustee.
Section 6.08. Conflicting Interests of Trustee. If the Trustee has or
shall acquire a conflicting interest within the meaning of the Trust Indenture
Act, the Trustee shall (i) eliminate such interest within 90 days after
ascertaining that it has such conflicting interest, (ii) apply to the Commission
for permission to continue as trustee or (iii) resign, in each case to the
extent and in the manner provided by, and subject to the provisions of, the
Trust Indenture Act and this Indenture.
Section 6.09. Eligibility of Trustee. There shall at all times be a
Trustee hereunder which shall be a Person that is eligible pursuant to the Trust
Indenture Act to act as such and has a combined capital and surplus of at least
$50,000,000 (or if such Person is a member of a bank holding company system, its
bank holding company shall have a combined capital and surplus of at least
$50,000,000). If such Person publishes reports of condition at least annually,
pursuant to law or to the requirements of any supervising or examining
authority, then for the purposes of this Section the combined capital and
surplus of such Person shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time
the Trustee shall cease to be eligible in accordance with the provisions of this
Section 6.09, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article.
Section 6.10. Resignation or Removal of Trustee.
37
(a) The Trustee may at any time resign by giving written notice of
such resignation to the Company and to the holders of Securities. Upon receiving
such notice of resignation, the Company shall promptly appoint a successor
trustee by written instrument, in duplicate, executed by order of the Board of
Directors, one copy of which instrument shall be delivered to the resigning
Trustee and one copy to the successor trustee. If no successor trustee shall
have been so appointed and have accepted appointment sixty (60) days after the
mailing of such notice of resignation to the Securityholders, the resigning
Trustee may, upon ten (10) Business Days' notice to the Company and the
Securityholders, appoint a successor identified in such notice or may petition,
at the expense of the Company, any court of competent jurisdiction for the
appointment of a successor trustee, or, if any Securityholder who has been a
bona fide holder of a Security or Securities for at least six (6) months may,
subject to the provisions of Section 5.09, on behalf of himself and all others
similarly situated, petition any such court for the appointment of a successor
trustee. Such court may thereupon, after such notice, if any, as it may deem
proper and prescribe, appoint a successor trustee.
(b) In case at any time any of the following shall occur:
(i) the Trustee shall fail to comply with Section 6.08
after written request therefor by the Company or by any Securityholder
who has been a bona fide holder of a Security or Securities for at
least six (6) months; or
(ii) the Trustee shall cease to be eligible in
accordance with the provisions of Section 6.09 and shall fail to resign
after written request therefor by the Company or by any such
Securityholder; or
(iii) the Trustee shall become incapable of acting, or
shall be adjudged a bankrupt or insolvent, or a receiver of the Trustee
or of its property shall be appointed, or any public officer shall take
charge or control of the Trustee or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation;
then, in any such case, the Company may remove the Trustee and appoint a
successor trustee by written instrument, in duplicate, executed by order of the
Board of Directors, one copy of which instrument shall be delivered to the
Trustee so removed and one copy to the successor trustee, or, subject to the
provisions of Section 5.09, any Securityholder who has been a bona fide holder
of a Security or Securities for at least six (6) months may, on behalf of
himself and all others similarly situated, petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
trustee; provided that if no successor Trustee shall have been appointed and
have accepted appointment sixty (60) days after either the Company or the
Securityholders has removed the Trustee, or the Trustee resigns, the Trustee so
removed may petition, at the
38
expense of the Company, any court of competent jurisdiction for an appointment
of a successor trustee. Such court may thereupon, after such notice, if any, as
it may deem proper and prescribe, remove the Trustee and appoint a successor
trustee.
(c) The holders of a majority in aggregate principal amount of the
Securities at the time outstanding may at any time remove the Trustee and
nominate a successor trustee which shall be deemed appointed as successor
trustee unless, within ten (10) days after notice to the Company of such
nomination, the Company objects thereto, in which case the Trustee so removed or
any Securityholder, or if such Trustee so removed or any Securityholder fails to
act, the Company, upon the terms and conditions and otherwise as provided in
Section 6.10(a), may petition any court of competent jurisdiction for an
appointment of a successor trustee.
(d) Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section 6.10 shall
become effective upon acceptance of appointment by the successor trustee as
provided in Section 6.11.
(e) Notwithstanding the replacement of the Trustee pursuant to
this Section, the Company's obligations under Section 6.06 shall continue for
the benefit of the retiring Trustee.
Section 6.11. Acceptance by Successor Trustee. Any successor trustee
appointed as provided in Section 6.10 shall execute, acknowledge and deliver to
the Company and to its predecessor trustee an instrument accepting such
appointment hereunder, and thereupon the resignation or removal of the
predecessor trustee shall become effective and such successor trustee, without
any further act, deed or conveyance, shall become vested with all the rights,
powers, duties and obligations of its predecessor hereunder, with like effect as
if originally named as trustee herein; but, nevertheless, on the written request
of the Company or of the successor trustee, the trustee ceasing to act shall,
upon payment of any amount then due it pursuant to the provisions of Section
6.06, execute and deliver an instrument transferring to such successor trustee
all the rights and powers of the trustee so ceasing to act. Upon request of any
such successor trustee, the Company shall execute any and all instruments in
writing for more fully and certainly vesting in and confirming to such successor
trustee all such rights and powers. Any trustee ceasing to act shall,
nevertheless, retain a lien upon all property and funds held or collected by
such trustee as such, except for funds held in trust for the benefit of holders
of particular Securities, to secure any amounts then due it pursuant to the
provisions of Section 6.06.
No successor trustee shall accept appointment as provided in this
Section 6.11 unless, at the time of such acceptance, such successor trustee
shall be
39
qualified under the provisions of Section 6.08 and be eligible under the
provisions of Section 6.09.
Upon acceptance of appointment by a successor trustee as provided in
this Section 6.11, the Company (or the former trustee, at the written direction
of the Company) shall mail or cause to be mailed notice of the succession of
such trustee hereunder to the holders of Securities at their addresses as they
shall appear on the Security Register. If the Company fails to mail such notice
within ten (10) days after acceptance of appointment by the successor trustee,
the successor trustee shall cause such notice to be mailed at the expense of the
Company.
Section 6.12. Succession By Merger. Any corporation into which the
Trustee may be merged or converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or consolidation to which the
Trustee shall be a party, or any corporation succeeding to all or substantially
all of the corporate trust business of the Trustee (including any trust created
by this Indenture), shall be the successor to the Trustee hereunder without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, provided that in the case of any corporation succeeding to all
or substantially all of the corporate trust business of the Trustee, such
corporation shall be qualified under the provisions of Section 6.08 and eligible
under the provisions of Section 6.09.
In case at the time such successor to the Trustee shall succeed to the
trusts created by this Indenture, any of the Securities shall have been
authenticated but not delivered, any such successor to the Trustee may adopt the
certificate of authentication of any predecessor trustee or authenticating agent
appointed by such predecessor trustee, and deliver such Securities so
authenticated; and in case at that time any of the Securities shall not have
been authenticated, any successor to the Trustee or any authenticating agent
appointed by such successor trustee may authenticate such Securities in the name
of the successor trustee; and in all such cases such certificates shall have the
full force that is provided in the Securities or in this Indenture; provided
that the right to adopt the certificate of authentication of any predecessor
Trustee or authenticate Securities in the name of any predecessor Trustee shall
apply only to its successor or successors by merger, conversion or
consolidation.
Section 6.13. Preferential Collection of Claims. Except as otherwise
provided in TIA Section 311(b), if and when the Trustee shall be or become a
creditor of the Company (or any other obligor upon the Securities), the Trustee
shall be subject to the provisions of the Trust Indenture Act regarding the
collection of the claims against the Company (or any such other obligor).
40
ARTICLE 7
THE SECURITYHOLDERS
Section 7.01. Action By Securityholders. Whenever in this Indenture it
is provided that the holders of a specified percentage in aggregate principal
amount of the Securities may take any action (including the making of any demand
or request, the giving of any notice, consent or waiver or the taking of any
other action), the fact that at the time of taking any such action, the holders
of such specified percentage have joined therein may be evidenced (a) by any
instrument or any number of instruments of similar tenor executed by
Securityholders in person or by agent or proxy appointed in writing, or (b) by
the record of the holders of Securities voting in favor thereof at any meeting
of Securityholders duly called and held in accordance with the provisions of
Article 8, or (c) by a combination of such instrument or instruments and any
such record of such a meeting of Securityholders. Whenever the Company or the
Trustee solicits the taking of any action by the holders of the Securities, the
Company or the Trustee may fix in advance of such solicitation, a date as the
record date for determining holders entitled to take such action. The record
date shall be not more than fifteen (15) days prior to the date of commencement
of solicitation of such action.
Section 7.02. Proof of Execution by Securityholders. Subject to the
provisions of Sections 6.01, 6.02 and 8.05, proof of the execution of any
instrument by a Securityholder or its agent or proxy shall be sufficient if made
in accordance with such reasonable rules and regulations as may be prescribed by
the Trustee or in such manner as shall be satisfactory to the Trustee. The
holding of Securities shall be proved by the registry of such Securities or by a
certificate of the Security Registrar.
The record of any Securityholders' meeting shall be proved in the
manner provided in Section 8.06.
Section 7.03. Who Are Deemed Absolute Owners. The Company, the Trustee,
any paying agent, any conversion agent and any Security Registrar may deem the
Person in whose name such Security shall be registered upon the Security
Register to be, and may treat it as, the absolute owner of such Security
(whether or not such Security shall be overdue and notwithstanding any notation
of ownership or other writing thereon made by any Person other than the Company
or any Security Registrar) for the purpose of receiving payment of or on account
of the principal of, premium, if any, and interest on such Security, for
conversion of such Security and for all other purposes; and neither the Company
nor the Trustee nor any paying agent nor any conversion agent nor any Security
Registrar shall be affected by any notice to the contrary. All such payments so
made to any holder for the time being, or upon his order, shall be valid, and,
to the extent of the sum or sums so paid, effectual to satisfy and discharge the
liability for monies payable upon any such Security.
41
Section 7.04. Company-owned Securities Disregarded. In determining
whether the holders of the requisite aggregate principal amount of Securities
have concurred in any direction, consent, waiver or other action under this
Indenture, Securities which are owned by the Company or any other obligor on the
Securities or any Affiliate of the Company or any other obligor on the
Securities shall be disregarded and deemed not to be outstanding for the purpose
of any such determination; provided that for the purposes of determining whether
the Trustee shall be protected in relying on any such direction, consent, waiver
or other action, only Securities which a Responsible Officer knows are so owned
shall be so disregarded. Securities so owned which have been pledged in good
faith may be regarded as outstanding for the purposes of this Section 7.04 if
the pledgee shall establish to the satisfaction of the Trustee the pledgee's
right to vote such Securities and that the pledgee is not the Company, any other
obligor on the Securities or any Affiliate of the Company or any such other
obligor. In the case of a dispute as to such right, any decision by the Trustee
taken upon the advice of counsel shall be full protection to the Trustee. Upon
request of the Trustee, the Company shall furnish to the Trustee promptly an
Officers' Certificate listing and identifying all Securities, if any, known by
the Company to be owned or held by or for the account of any of the above
described Persons, and, subject to Section 6.01, the Trustee shall be entitled
to accept such Officers' Certificate as conclusive evidence of the facts therein
set forth and of the fact that all Securities not listed therein are outstanding
for the purpose of any such determination.
Section 7.05. Revocation Of Consents, Future Holders Bound. At any time
prior to (but not after) the evidencing to the Trustee, as provided in Section
7.01, of the taking of any action by the holders of the percentage in aggregate
principal amount of the Securities specified in this Indenture in connection
with such action, any holder of a Security which is shown by the evidence to be
included in the Securities the holders of which have consented to such action
may, by filing written notice with the Trustee at its Corporate Trust Office and
upon proof of holding as provided in Section 7.02, revoke such action so far as
concerns such Security. Except as aforesaid, any such action taken by the holder
of any Security shall be conclusive and binding upon such holder and upon all
future holders and owners of such Security and of any Securities issued in
exchange or substitution therefor, irrespective of whether any notation in
regard thereto is made upon such Security or any Security issued in exchange or
substitution therefor.
42
ARTICLE 8
MEETINGS OF SECURITYHOLDERS
Section 8.01. Purpose Of Meetings. A meeting of Securityholders may be
called at any time and from time to time pursuant to the provisions of this
Article 8 for any of the following purposes:
(1) to give any notice to the Company or to the Trustee
or to give any directions to the Trustee permitted under this
Indenture, or to consent to the waiving of any default or Event of
Default hereunder and its consequences, or to take any other action
authorized to be taken by Securityholders pursuant to any of the
provisions of Article 5;
(2) to remove the Trustee and nominate a successor
trustee pursuant to the provisions of Article 6;
(3) to consent to the execution of an indenture or
indentures supplemental hereto pursuant to the provisions of Section
9.02; or
(4) to take any other action authorized to be taken by or
on behalf of the holders of any specified aggregate principal amount of
the Securities under any other provision of this Indenture or under
applicable law.
Section 8.02. Call Of Meetings By Trustee. The Trustee may at any time
call a meeting of Securityholders to take any action specified in Section 8.01,
to be held at such time and at such place as the Trustee shall determine. Notice
of every meeting of the Securityholders, setting forth the time and the place of
such meeting and in general terms the action proposed to be taken at such
meeting and the establishment of any record date pursuant to Section 7.01, shall
be mailed to holders of Securities at their addresses as they shall appear on
the Security Register. Such notice shall also be mailed to the Company. Such
notices shall be mailed not less than twenty (20) nor more than ninety (90) days
prior to the date fixed for the meeting.
Any meeting of Securityholders shall be valid without notice if the
holders of all Securities then outstanding are present in person or by proxy or
if notice is waived before or after the meeting by the holders of all Securities
outstanding, and if the Company and the Trustee are either present by duly
authorized representatives or have, before or after the meeting, waived notice.
Section 8.03. Call Of Meetings By Company Or Securityholders. In case
at any time the Company, pursuant to a resolution of its Board of Directors, or
the holders of at least ten percent (10%) in aggregate principal amount of the
Securities then outstanding, shall have requested the Trustee to call a meeting
of
43
Securityholders, by written request setting forth in reasonable detail the
action proposed to be taken at the meeting, and the Trustee shall not have
mailed the notice of such meeting within twenty (20) days after receipt of such
request, then the Company or such Securityholders may determine the time and the
place for such meeting and may call such meeting to take any action authorized
in Section 8.01, by mailing notice thereof as provided in Section 8.02.
Section 8.04. Qualifications For Voting. To be entitled to vote at any
meeting of Securityholders a person shall (a) be a holder of one or more
Securities on the record date pertaining to such meeting or (b) be a person
appointed by an instrument in writing as proxy by a holder of one or more
Securities on the record date pertaining to such meeting. The only persons who
shall be entitled to be present or to speak at any meeting of Securityholders
shall be the persons entitled to vote at such meeting and their counsel and any
representatives of the Trustee and its counsel and any representatives of the
Company and its counsel.
Section 8.05. Regulations. Notwithstanding any other provisions of this
Indenture, the Trustee may make such reasonable regulations as it may deem
advisable for any meeting of Securityholders, in regard to proof of the holding
of Securities and of the appointment of proxies, and in regard to the
appointment and duties of inspectors of votes, the submission and examination of
proxies, certificates and other evidence of the right to vote, and such other
matters concerning the conduct of the meeting as it shall think fit.
The Trustee shall, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called by the
Company or by Securityholders as provided in Section 8.03, in which case the
Company or the Securityholders calling the meeting, as the case may be, shall in
like manner appoint a temporary chairman. A permanent chairman and a permanent
secretary of the meeting shall be elected by vote of the holders of a majority
in principal amount of the Securities represented at the meeting and entitled to
vote at the meeting.
Subject to the provisions of Section 7.04, at any meeting each
Securityholder or proxyholder shall be entitled to one vote for each $1,000
principal amount of Securities held or represented by him; provided that no vote
shall be cast or counted at any meeting in respect of any Security challenged as
not outstanding and ruled by the chairman of the meeting to be not outstanding.
The chairman of the meeting shall have no right to vote other than by virtue of
Securities held by him or instruments in writing as aforesaid duly designating
him as the proxy to vote on behalf of other Securityholders. Any meeting of
Securityholders duly called pursuant to the provisions of Section 8.02 or 8.03
may be adjourned from time to time by the holders of a majority of the aggregate
principal amount of Securities represented at the meeting, whether or not
44
constituting a quorum, and the meeting may be held as so adjourned without
further notice.
Section 8.06. Voting. The vote upon any resolution submitted to any
meeting of Securityholders shall be by written ballot on which shall be
subscribed the signatures of the holders of Securities or of their
representatives by proxy and the outstanding principal amount of the Securities
held or represented by them. The permanent chairman of the meeting shall appoint
two inspectors of votes who shall count all votes cast at the meeting for or
against any resolution and who shall make and file with the secretary of the
meeting their verified written reports in duplicate of all votes cast at the
meeting. A record in duplicate of the proceedings of each meeting of
Securityholders shall be prepared by the secretary of the meeting and there
shall be attached to said record the original reports of the inspectors of votes
on any vote by ballot taken thereat and affidavits by one or more persons having
knowledge of the facts setting forth a copy of the notice of the meeting and
showing that said notice was mailed as provided in Section 8.02. The record
shall show the principal amount of the Securities voting in favor of or against
any resolution. The record shall be signed and verified by the affidavits of the
permanent chairman and secretary of the meeting and one of the duplicates shall
be delivered to the Company and the other to the Trustee to be preserved by the
Trustee, the latter to have attached thereto the ballots voted at the meeting.
Any record so signed and verified shall be conclusive evidence of the
matters therein stated.
Section 8.07. No Delay Of Rights By Meeting. Nothing contained in this
Article 8 shall be deemed or construed to authorize or permit, by reason of any
call of a meeting of Securityholders or any rights expressly or impliedly
conferred hereunder to make such call, any hindrance or delay in the exercise of
any right or rights conferred upon or reserved to the Trustee or to the
Securityholders under any of the provisions of this Indenture or of the
Securities.
ARTICLE 9
SUPPLEMENTAL INDENTURES
Section 9.01. Supplemental Indentures Without Consent of
Securityholders. The Company and the Trustee may, from time to time, and at any
time enter into an indenture or indentures supplemental hereto for one or more
of the following purposes:
(a) make provision with respect to the conversion rights of the
holders of Securities pursuant to the requirements of Section 15.06 and the
repurchase obligations of the Company pursuant to the requirements of Section
14.01(e);
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(b) to convey, transfer, assign, mortgage or pledge to the Trustee
as security for the Securities, any property or assets;
(c) to evidence the succession of another Person to the Company,
or successive successions, and the assumption by the successor Person of the
covenants, agreements and obligations of the Company pursuant to Article 10;
(d) to add to the covenants of the Company such further covenants,
restrictions or conditions as the Board of Directors and the Trustee shall
consider to be for the benefit of the holders of Securities, and to make the
occurrence, or the occurrence and continuance, of a default in any such
additional covenants, restrictions or conditions a default or an Event of
Default permitting the enforcement of all or any of the several remedies
provided in this Indenture as herein set forth; provided that in respect of any
such additional covenant, restriction or condition, such supplemental indenture
may provide for a particular period of grace after default (which period may be
shorter or longer than that allowed in the case of other defaults) or may
provide for an immediate enforcement upon such default or may limit the remedies
available to the Trustee upon such default;
(e) to provide for the issuance under this Indenture of Securities
in coupon form (including Securities registrable as to principal only) and to
provide for exchangeability of such Securities with the Securities issued
hereunder in fully registered form and to make all appropriate changes for such
purpose;
(f) to cure any ambiguity or to correct or supplement any
provision contained herein or in any supplemental indenture that may be
defective or inconsistent with any other provision contained herein or in any
supplemental indenture,
(g) to make such other provisions in regard to matters or
questions arising under this Indenture that shall not materially adversely
affect the interests of the holders of the Securities or to conform the
provisions of this Indenture to the description of the Securities contained in
the Offering Memorandum dated December 4, 2003;
(h) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities; or
(i) to modify, eliminate or add to the provisions of this
Indenture to such extent as shall be necessary to effect the qualifications of
this Indenture under the Trust Indenture Act, or under any similar federal
statute hereafter enacted; or
46
(j) to reopen the Securities and issue additional Securities under
this Indenture having the same terms and CUSIP number as the Securities issued
hereby in an unlimited aggregate principal amount, provided that no additional
Securities may be issued unless such additional Securities are fungible with the
Securities issued hereby for United States federal income tax purposes.
Upon the written request of the Company, the Trustee is hereby
authorized to join with the Company in the execution of any such supplemental
indenture, to make any further appropriate agreements and stipulations that may
be therein contained and to accept the conveyance, transfer and assignment of
any property thereunder, but the Trustee shall not be obligated to, but may in
its discretion, enter into any supplemental indenture that affects the Trustee's
own rights, duties or immunities under this Indenture or otherwise.
Any supplemental indenture authorized by the provisions of this Section
9.01 may be executed by the Company and the Trustee without the consent of the
holders of any of the Securities at the time outstanding, notwithstanding any of
the provisions of Section 9.02.
Notwithstanding any other provision of the Indenture or the Securities,
the Registration Rights Agreement and the obligation to pay Additional Interest
thereunder may be amended, modified or waived in accordance with the provisions
of the Registration Rights Agreement.
Section 9.02. Supplemental Indenture With Consent Of Securityholders.
With the consent (evidenced as provided in Article 7) of the holders of at least
a majority in aggregate principal amount of the Securities at the time
outstanding, the Company, when authorized by the resolutions of the Board of
Directors, and the Trustee may, from time to time and at any time, enter into an
indenture or indentures supplemental hereto for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Indenture or any supplemental indenture or of modifying in any manner the
rights of the holders of the Securities; provided that no such supplemental
indenture shall, without the consent of the holders of all Securities then
outstanding, (i) extend the fixed maturity of any Security, or reduce the rate
or extend the time of payment of Interest thereon, or reduce the principal
amount thereof or premium, if any, thereon, or reduce any amount payable upon
repurchase thereof, or change the obligation of the Company to repurchase any
Security upon the happening of a Designated Event in a manner adverse to the
holders of Securities, or impair the right of any Securityholder to institute
suit for the payment thereof, or make the principal thereof or interest or
premium, if any, thereon payable in any coin or currency other than that
provided in the Securities, or impair the right to convert the Securities into
Common Stock or reduce the number of shares of Common Stock or any other
property receivable by a Securityholder upon conversion (subject to the terms
set forth herein, including Section 15.06) in each case,
47
without the consent of the holder of each Security so affected, or modify any of
the provisions of this Section 9.02 or Section 5.07, except to increase any such
percentage or to provide that certain other provisions of this Indenture cannot
be modified or waived without the consent of the holder of each Security so
affected, or reduce the quorum or voting requirements set forth in Article 8 or
(ii) reduce the aforesaid percentage of Securities, the holders of which are
required to consent to any such supplemental indenture.
Upon the written request of the Company, accompanied by a copy of the
resolutions of the Board of Directors certified by its Secretary or Assistant
Secretary authorizing the execution of any such supplemental indenture, and upon
the filing with the Trustee of evidence of the consent of Securityholders as
aforesaid, the Trustee shall join with the Company in the execution of such
supplemental indenture unless such supplemental indenture affects the Trustee's
own rights, duties or immunities under this Indenture or otherwise, in which
case the Trustee may in its discretion, but shall not be obligated to, enter
into such supplemental indenture.
It shall not be necessary for the consent of the Securityholders under
this Section 9.02 to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such consent shall approve the
substance thereof.
Section 9.03. Effect Of Supplemental Indenture. Any supplemental
indenture executed pursuant to the provisions of this Article 9 shall comply
with the Trust Indenture Act, as then in effect, provided that this Section 9.03
shall not require such supplemental indenture or the Trustee to be qualified
under the Trust Indenture Act prior to the time such qualification is in fact
required under the terms of the Trust Indenture Act or the Indenture has been
qualified under the Trust Indenture Act, nor shall it constitute any admission
or acknowledgment by any party to such supplemental indenture that any such
qualification is required prior to the time such qualification is in fact
required under the terms of the Trust Indenture Act or the Indenture has been
qualified under the Trust Indenture Act. Upon the execution of any supplemental
indenture pursuant to the provisions of this Article 9, this Indenture shall be
and be deemed to be modified and amended in accordance therewith and the
respective rights, limitation of rights, obligations, duties and immunities
under this Indenture of the Trustee, the Company and the holders of Securities
shall thereafter be determined, exercised and enforced hereunder, subject in all
respects to such modifications and amendments and all the terms and conditions
of any such supplemental indenture shall be and be deemed to be part of the
terms and conditions of this Indenture for any and all purposes.
Section 9.04. Notation On Securities. Securities authenticated and
delivered after the execution of any supplemental indenture pursuant to the
48
provisions of this Article 9 may bear a notation in form approved by the Trustee
as to any matter provided for in such supplemental indenture. If the Company or
the Trustee shall so determine, new Securities so modified as to conform, in the
opinion of the Trustee and the Board of Directors, to any modification of this
Indenture contained in any such supplemental indenture may, at the Company's
expense, be prepared and executed by the Company, authenticated by the Trustee
(or an authenticating agent duly appointed by the Trustee pursuant to Section
13.11) and delivered in exchange for the Securities then outstanding, upon
surrender of such Securities then outstanding.
Section 9.05. Evidence Of Compliance Of Supplemental Indenture To Be
Furnished To Trustee. Prior to entering into any supplemental indenture, the
Trustee shall be provided with an Officers' Certificate and an Opinion of
Counsel as conclusive evidence that any supplemental indenture executed pursuant
hereto complies with the requirements of this Article 9 and is otherwise
authorized or permitted by this Indenture.
ARTICLE 10
CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE
Section 10.01. Company May Consolidate On Certain Terms. Subject to the
provisions of Section 10.02, the Company shall not consolidate or merge with or
into any other Person or Persons (whether or not affiliated with the Company),
nor shall the Company or its successor or successors be a party or parties to
successive consolidations or mergers, nor shall the Company sell, convey,
transfer or lease the property and assets of the Company substantially as an
entirety, to any other Person (whether or not affiliated with the Company),
unless: (i) the Company is the surviving Person, or the resulting, surviving or
transferee Person is a corporation organized and existing under the laws of the
United States of America, any state thereof or the District of Columbia; (ii)
upon any such consolidation, merger, sale, conveyance, transfer or lease, the
due and punctual payment of the principal of and premium, if any, and interest
on all of the Securities, according to their tenor and the due and punctual
performance and observance of all of the covenants and conditions of this
Indenture to be performed by the Company, shall be expressly assumed, by
supplemental indenture satisfactory in form and substance to the Trustee,
executed and delivered to the Trustee by the Person (if other than the Company
and other than a Person who is a successor to the Company's obligations
hereunder and under the Security by operation of law) formed by such
consolidation, or into which the Company shall have been merged, or by the
Person that shall have acquired or leased such property, and such supplemental
indenture shall provide for the applicable conversion rights set forth in
Section 15.06; and (iii) immediately after giving effect to the transaction
described above, no Event of Default, and no event
49
which, after notice or lapse of time or both, would become an Event of Default,
shall have happened and be continuing.
Section 10.02. Successor To Be Substituted. In case of any such
consolidation, merger, sale, conveyance, transfer or lease and upon the
assumption by the successor Person, by supplemental indenture, executed and
delivered to the Trustee and satisfactory in form to the Trustee, of the due and
punctual payment of the principal of and premium, if any, and interest on all of
the Securities and the due and punctual performance of all of the covenants and
conditions of this Indenture to be performed by the Company, such successor
Person shall succeed to and be substituted for the Company, with the same effect
as if it had been named herein as the party of this first part. Such successor
Person thereupon may cause to be signed, and may issue either in its own name or
in the name of Input/Output Inc. any or all of the Securities, issuable
hereunder that theretofore shall not have been signed by the Company and
delivered to the Trustee; and, upon the order of such successor Person instead
of the Company and subject to all the terms, conditions and limitations in this
Indenture prescribed, the Trustee shall authenticate and shall deliver, or cause
to be authenticated and delivered, any Securities that previously shall have
been signed and delivered by the officers of the Company to the Trustee for
authentication, and any Securities that such successor Person thereafter shall
cause to be signed and delivered to the Trustee for that purpose. All the
Securities so issued shall in all respects have the same legal rank and benefit
under this Indenture as the Securities theretofore or thereafter issued in
accordance with the terms of this Indenture as though all of such Securities had
been issued at the date of the execution hereof. In the event of any such
consolidation, merger, sale, conveyance, transfer or lease, the Person named as
the "COMPANY" in the first paragraph of this Indenture or any successor that
shall thereafter have become such in the manner prescribed in this Article 10
may be dissolved, wound up and liquidated at any time thereafter and such Person
shall be released from its liabilities as obligor and maker of the Securities
and from its obligations under this Indenture.
In case of any such consolidation, merger, sale, conveyance, transfer
or lease, such changes in phraseology and form (but not in substance) may be
made in the Securities thereafter to be issued as may be appropriate.
Section 10.03. Opinion Of Counsel To Be Given To Trustee. The Trustee
shall receive an Officers' Certificate and an Opinion of Counsel as conclusive
evidence that any such consolidation, merger, sale, conveyance, transfer or
lease and any such assumption complies with the provisions of this Article 10.
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ARTICLE 11
SATISFACTION AND DISCHARGE OF INDENTURE
Section 11.01. Discharge Of Indenture. When the Company shall deliver
to the Trustee for cancellation all Securities theretofore authenticated (other
than any Securities that have been destroyed, lost or stolen and in lieu of or
in substitution for which other Securities shall have been authenticated and
delivered in each case pursuant to Section 2.06) and not theretofore canceled,
or all the Securities not theretofore canceled or delivered to the Trustee for
cancellation shall have become due and payable, or are by their terms to become
due and payable within one year, and the Company shall deposit with the Trustee,
in trust, funds sufficient to pay at maturity (other than any Securities that
shall have been mutilated, destroyed, lost or stolen and in lieu of or in
substitution for which other Securities shall have been authenticated and
delivered) not theretofore canceled or delivered to the Trustee for
cancellation, including principal and premium, if any, and interest due or to
become due to such date of maturity accompanied by a verification report or
certificate, as to the sufficiency of the deposited amount, from a nationally
recognized firm of independent certified accountants, or other financial
professional satisfactory to the Trustee, and if the Company shall also pay or
cause to be paid all other sums payable hereunder by the Company, then this
Indenture shall cease to be of further effect (except as to remaining rights of
registration of transfer, substitution and exchange and conversion of
Securities, rights hereunder of Securityholders to receive payments of principal
of and premium, if any, and interest on, the Securities and the other rights,
duties and obligations of Securityholders, as beneficiaries hereof with respect
to the amounts, if any, so deposited with the Trustee and the rights,
obligations and immunities of the Trustee hereunder), and the Trustee, on
written demand of the Company accompanied by an Officers' Certificate and an
Opinion of Counsel as required by Section 13.05 and at the cost and expense of
the Company, shall execute proper instruments acknowledging satisfaction of and
discharging this Indenture; the Company, however, hereby agrees to reimburse the
Trustee for any costs or expenses thereafter reasonably and properly incurred by
the Trustee and to compensate the Trustee for any services thereafter reasonably
and properly rendered by the Trustee in connection with this Indenture or the
Securities.
Section 11.02. Deposited Monies To Be Held In Trust By Trustee. Subject
to Section 11.04, all monies deposited with the Trustee pursuant to Section
11.01 shall be held in trust for the sole benefit of the Securityholders, and
such monies shall be applied by the Trustee to the payment, either directly or
through any paying agent (including the Company if acting as its own paying
agent), to the holders of the particular Securities for the payment of which
such monies have been deposited with the Trustee, of all sums due and to become
due thereon for principal and interest and premium, if any.
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Section 11.03. Paying Agent To Repay Monies Held. Upon the satisfaction
and discharge of this Indenture, all monies then held by any paying agent of the
Securities (other than the Trustee) shall, upon written request of the Company,
be repaid to it or paid to the Trustee, and thereupon such paying agent shall be
released from all further liability with respect to such monies.
Section 11.04. Return Of Unclaimed Monies. Subject to the requirements
of applicable law, any monies deposited with or paid to the Trustee for payment
of the principal of, premium, if any, or interest on Securities and not applied
but remaining unclaimed by the holders of Securities for two years after the
date upon which the principal of, premium, if any, or interest on such
Securities, as the case may be, shall have become due and payable, shall be
repaid to the Company by the Trustee on demand and all liability of the Trustee
shall thereupon cease with respect to such monies; and the holder of any of the
Securities shall thereafter look only to the Company for any payment that such
holder may be entitled to collect unless an applicable abandoned property law
designates another Person.
Section 11.05. Reinstatement. If the Trustee or the paying agent is
unable to apply any money in accordance with Section 11.02 by reason of any
order or judgment of any court or governmental authority enjoining, restraining
or otherwise prohibiting such application, the Company's obligations under this
Indenture and the Securities shall be revived and reinstated as though no
deposit had occurred pursuant to Section 11.01 until such time as the Trustee or
the paying agent is permitted to apply all such money in accordance with Section
11.02; provided that if the Company makes any payment of interest on or
principal of any Security following the reinstatement of its obligations, the
Company shall be subrogated to the rights of the holders of such Securities to
receive such payment from the money held by the Trustee or paying agent.
ARTICLE 12
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS
Section 12.01. Indenture And Securities Solely Corporate Obligations.
No recourse for the payment of the principal of or premium, if any, or interest
on any Security, or for any claim based thereon or otherwise in respect thereof,
and no recourse under or upon any obligation, covenant or agreement of the
Company in this Indenture or in any supplemental indenture or in any Security,
or because of the creation of any indebtedness represented thereby, shall be had
against any incorporator, stockholder, employee, agent, officer, director or
subsidiary, as such, past, present or future, of the Company or of any successor
corporation, either directly or through the Company or any successor
corporation, whether by virtue of any constitution, statute or rule of law, or
by the enforcement of any assessment or penalty or otherwise; it being expressly
understood that all such
52
liability is hereby expressly waived and released as a condition of, and as a
consideration for, the execution of this Indenture and the issue of the
Securities.
ARTICLE 13
GENERAL PROVISIONS
Section 13.01. Provisions Binding On Company's Successors. All the
covenants, stipulations, promises and agreements by the Company contained in
this Indenture shall bind its successors and assigns whether so expressed or
not.
Section 13.02. Official Acts By Successor Corporation. Any act or
proceeding by any provision of this Indenture authorized or required to be done
or performed by any board, committee or officer of the Company shall and may be
done and performed with like force and effect by the like board, committee or
officer of any Person that shall at the time be the lawful sole successor of the
Company.
Section 13.03. Addresses For Notices, Etc. Any notice or demand which
by any provision of this Indenture is required or permitted to be given or
served by the Trustee or by the holders of Securities on the Company shall be
deemed to have been sufficiently given or made, for all purposes, if given or
served by being deposited postage prepaid by registered or certified mail in a
post office letter box, or sent by express overnight air courier for next day
delivery or sent by telecopier transmission addressed as follows: to
Input/Output, Inc., 12300 Parc Crest Drive, Stafford, Texas 77477, Telecopier
No.: 281-879-3626, Attention: Corporate Secretary. Any notice, direction,
request or demand hereunder to or upon the Trustee shall be deemed to have been
sufficiently given or made, for all purposes, if given or served by being
deposited, postage prepaid, by registered or certified mail in a post office
letter box, or sent by express overnight air courier for next day delivery or
sent by telecopier transmission addressed as follows: The Bank of New York Trust
Company of Florida, N.A., Plaza of the Americas, 600 North Pearl Street, Suite
420, Dallas, Texas 75201, Telecopier No.: 214-880-8241, Attention: Corporate
Trust Department. As provided in Section 3.02 hereof, the Trustee's designated
office in the Borough of Manhattan, the City of New York shall initially be
located at 101 Barclay Street, New York, New York 10286.
The Trustee, by notice to the Company, may designate additional or
different addresses for subsequent notices or communications.
Any notice or communication mailed to a Securityholder shall be mailed
to him by first class mail, postage prepaid, or sent by express overnight air
courier for next day delivery at his address as it appears on the Security
Register and shall be sufficiently given to him if so mailed within the time
prescribed.
53
Failure to mail a notice or communication to a Securityholder or any
defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it.
Section 13.04. Governing Law. This Indenture and each Security shall be
deemed to be a contract made under the laws of the State of New York, and for
all purposes shall be construed in accordance with the laws of the State of New
York, without regard to conflicts of laws principles thereof.
Section 13.05. Evidence Of Compliance With Conditions Precedent,
Certificates To Trustee. Upon any application or demand by the Company to the
Trustee to take any action under any of the provisions of this Indenture, the
Company shall furnish to the Trustee an Officers' Certificate stating that all
conditions precedent, if any, provided for in this Indenture relating to the
proposed action have been complied with, and an Opinion of Counsel stating that,
in the opinion of such counsel, all such conditions precedent have been complied
with.
Each certificate or opinion provided for in this Indenture and
delivered to the Trustee with respect to compliance with a condition or covenant
provided for in this Indenture shall comply with the provisions of TIA Section
314(e) and shall include: (1) a statement that the person making such
certificate or opinion has read such covenant or condition; (2) a brief
statement as to the nature and scope of the examination or investigation upon
which the statements or opinions contained in such certificate or opinion are
based; (3) a statement that, in the opinion of such person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and (4) a statement as to whether or not, in the opinion of such
person, such condition or covenant has been complied with.
Section 13.06. Legal Holidays. In any case in which the date of
maturity of interest on or principal of the Securities will not be a Business
Day, then payment of such interest on or principal of the Securities need not be
made on such date, but may be made on the next succeeding Business Day with the
same force and effect as if made on the date of maturity, and no interest shall
accrue for the period from and after such date.
Section 13.07. Trust Indenture Act. This Indenture is hereby made
subject to, and shall be governed by, the provisions of the Trust Indenture Act
required to be part of and to govern indentures qualified under the Trust
Indenture Act; provided that this Section 13.07 shall not require this Indenture
or the Trustee to be qualified under the Trust Indenture Act prior to the time
such qualification is in fact required under the terms of the Trust Indenture
Act, nor
54
shall it constitute any admission or acknowledgment by any party to the
Indenture that any such qualification is required prior to the time such
qualification is in fact required under the terms of the Trust Indenture Act. If
any provision hereof limits, qualifies or conflicts with another provision
hereof which is required to be included in an indenture qualified under the
Trust Indenture Act, such required provision shall control.
Section 13.08. No Security Interest Created. Nothing in this Indenture
or in the Securities, expressed or implied, shall be construed to constitute a
security interest under the Uniform Commercial Code or similar legislation, as
now or hereafter enacted and in effect, in any jurisdiction in which property of
the Company or its subsidiaries is located.
Section 13.09. Benefits Of Indenture. Nothing in this Indenture or in
the Securities, express or implied, shall give to any Person, other than the
parties hereto, any paying agent, any authenticating agent, any Security
Registrar and their successors hereunder and the holders of Securities any
benefit or any legal or equitable right, remedy or claim under this Indenture.
Section 13.10. Table Of Contents, Headings, Etc. The table of contents
and the titles and headings of the Articles and Sections of this Indenture have
been inserted for convenience of reference only, are not to be considered a part
hereof, and shall in no way modify or restrict any of the terms or provisions
hereof.
Section 13.11. Authenticating Agent. The Trustee may appoint an
authenticating agent that shall be authorized to act on its behalf, and subject
to its direction, in the authentication and delivery of Securities in connection
with the original issuance thereof and transfers and exchanges of Securities
hereunder, including under Sections 2.04, 2.05, 2.06, 2.07 and 14.01, as fully
to all intents and purposes as though the authenticating agent had been
expressly authorized by this Indenture and those Sections to authenticate and
deliver Securities. For all purposes of this Indenture, the authentication and
delivery of Securities by the authenticating agent shall be deemed to be
authentication and delivery of such Securities "by the Trustee" and a
certificate of authentication executed on behalf of the Trustee by an
authenticating agent shall be deemed to satisfy any requirement hereunder or in
the Securities for the Trustee's certificate of authentication. Such
authenticating agent shall at all times be a Person eligible to serve as trustee
hereunder pursuant to Section 6.09.
Any corporation into which any authenticating agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, consolidation or conversion to which any authenticating agent
shall be a party, or any corporation succeeding to the corporate trust business
of any authenticating agent, shall be the successor of the authenticating agent
hereunder,
55
if such successor corporation is otherwise eligible under this Section 13.11,
without the execution or filing of any paper or any further act on the part of
the parties hereto or the authenticating agent or such successor corporation.
Any authenticating agent may at any time resign by giving written
notice of resignation to the Trustee and to the Company. The Trustee may at any
time terminate the agency of any authenticating agent by giving written notice
of termination to such authenticating agent and to the Company. Upon receiving
such a notice of resignation or upon such a termination, or in case at any time
any authenticating agent shall cease to be eligible under this Section, the
Trustee shall either promptly appoint a successor authenticating agent or itself
assume the duties and obligations of the former authenticating agent under this
Indenture and, upon such appointment of a successor authenticating agent, if
made, shall give written notice of such appointment of a successor
authenticating agent to the Company and shall mail notice of such appointment of
a successor authenticating agent to all holders of Securities as the names and
addresses of such holders appear on the Security Register.
The Company agrees to pay to the authenticating agent from time to time
such reasonable compensation for its services as shall be agreed upon in writing
between the Company and the authenticating agent.
The provisions of Sections 6.02, 6.03, 6.04 and 7.03 and this Section
13.11 shall be applicable to any authenticating agent.
Section 13.12. Execution In Counterparts. This Indenture may be
executed in any number of counterparts, each of which shall be an original, but
such counterparts shall together constitute but one and the same instrument.
Section 13.13. Severability. In case any provision in this Indenture or
in the Securities shall be invalid, illegal or unenforceable, then (to the
extent permitted by law) the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
The Bank of New York Trust Company of Florida, N.A. hereby accepts the
trusts in this Indenture declared and provided, upon the terms and conditions
herein above set forth.
ARTICLE 14
REPURCHASE OF SECURITIES
Section 14.01. Repurchase at Option of Holders Upon a Designated Event.
If there shall occur a Designated Event at any time prior to maturity of the
Securities, then each Securityholder shall have the right, at such holder's
56
option, to require the Company to repurchase all of such holder's Securities, or
any portion thereof that is a multiple of $1,000 principal amount, on the date
(the "DESIGNATED EVENT REPURCHASE DATE") specified by the Company that is not
less than twenty (20) Business Days and not more than thirty-five (35) Business
Days after the date of the Designated Event Notice (as defined in Section
14.01(b)) of such Designated Event at a repurchase price equal to 100% of the
principal amount thereof, together with accrued and unpaid Interest to, but
excluding, the Designated Event Repurchase Date; provided that if such
Designated Event Repurchase Date falls after a record date and on or prior to
the corresponding interest payment date, then the interest payable on such
interest payment date shall be paid to the holders of record of the Securities
on the applicable record date instead of the holders surrendering the Securities
for repurchase on such date. Repurchases of Securities under this Section 14.01
shall be made, at the option of the holder thereof, upon:
(i) delivery to the Trustee (or other paying agent
appointed by the Company) by a holder of a duly completed notice (the
"DESIGNATED EVENT REPURCHASE NOTICE") in the form set forth on the
reverse of the Security prior to the close of business on the
Designated Event Repurchase Date; and
(ii) delivery or book-entry transfer of the Securities to
the Trustee (or other paying agent appointed by the Company) at any
time after delivery of the Designated Event Repurchase Notice (together
with all necessary endorsements) at the Corporate Trust Office of the
Trustee (or other paying agent appointed by the Company) in the Borough
of Manhattan as provided in Section 3.02, such delivery being a
condition to receipt by the holder of the repurchase price therefor;
provided that such repurchase price shall be so paid pursuant to this
Section 14.01 only if the Security so delivered to the Trustee (or
other paying agent appointed by the Company) shall conform in all
respects to the description thereof in the related Designated Event
Repurchase Notice.
The Company shall purchase from the holder thereof, pursuant to this
Section 14.01, a portion of a Security, if the principal amount of such portion
is $1,000 or a whole multiple of $1,000. Provisions of this Indenture that apply
to the purchase of all of a Security also apply to the purchase of such portion
of such Security.
Any payment of the purchase price pursuant to the provisions of this
Section 14.01 shall be made promptly following the later of the Designated Event
Repurchase Date and the time of the book-entry transfer or delivery of the
Security.
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Notwithstanding anything herein to the contrary, any holder delivering
to the Trustee (or other paying agent appointed by the Company) the Designated
Event Repurchase Notice contemplated by this Section 14.01 shall have the right
to withdraw such Designated Event Repurchase Notice at any time prior to the
close of business on the Designated Event Repurchase Date by delivery of a
written notice of withdrawal to the Trustee (or other paying agent appointed by
the Company) in accordance with Section 14.01(c) below.
The Trustee (or other paying agent appointed by the Company) shall
promptly notify the Company of the receipt by it of any Designated Event
Repurchase Notice or written notice of withdrawal thereof.
(b) On or before the fifteenth day after the occurrence of a
Designated Event, the Company or at its written request (which must be received
by the Trustee at least five (5) Business Days prior to the date the Trustee is
requested to give notice as described below, unless the Trustee shall agree in
writing to a shorter period), the Trustee, in the name of and at the expense of
the Company, shall mail or cause to be mailed to all holders of record on the
date of the Designated Event a notice (the "DESIGNATED EVENT NOTICE") of the
occurrence of such Designated Event and of the repurchase right at the option of
the holders arising as a result thereof. Such mailing shall be by first class
mail. If the Company shall give such notice, the Company shall also deliver a
copy of the Designated Event Company Notice to the Trustee at such time as it is
mailed to Securityholders. Concurrently with the mailing of any Designated Event
Notice, the Company shall issue a press release announcing such Designated Event
referred to in the Designated Event Notice, the form and content of which press
release shall be determined by the Company in its sole discretion. The failure
to issue any such press release or any defect therein shall not affect the
validity of the Designated Event Notice or any proceedings for the repurchase of
any Security which any Securityholder may elect to have the Company repurchase
as provided in this Section 14.01.
Each Designated Event Notice shall specify the circumstances
constituting the Designated Event, the Designated Event Repurchase Date, the
price at which the Company shall be obligated to repurchase Securities, that the
holder must exercise the repurchase right on or prior to the close of business
on the Designated Event Repurchase Date (the "DESIGNATED EVENT EXPIRATION
TIME"), that the holder shall have the right to withdraw any Securities
surrendered prior to the Designated Event Expiration Time, a description of the
procedure which a Securityholder must follow to exercise such repurchase right
and to withdraw any surrendered Securities, the place or places where the holder
is to surrender such holder's Securities, the amount of interest accrued on each
Security to the Designated Event Repurchase Date and the CUSIP number or numbers
of the Securities (if then generally in use) and include a form of Designated
Event Repurchase Notice.
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No failure of the Company to give the foregoing notices and no defect
therein shall limit the Securityholders' repurchase rights or affect the
validity of the proceedings for the repurchase of the Securities pursuant to
this Section 14.01.
(c) A Designated Event Repurchase Notice may be withdrawn by means
of a written notice of withdrawal delivered to the office of the Trustee (or
other paying agent appointed by the Company) in accordance with the Designated
Event Repurchase Notice at any time prior to the close of business on the
Designated Event Repurchase Date, specifying:
(i) the certificate number, if any, of the Security in
respect of which such notice of withdrawal is being submitted,
or the appropriate Depositary information if the Security in respect of
which such notice of withdrawal is being submitted is represented by a
Global Security,
(ii) the principal amount of the Security with respect to
which such notice of withdrawal is being submitted, and
(iii) the principal amount, if any, of such Security which
remains subject to the original Designated Event Repurchase Notice and
which has been or will be delivered for purchase by the Company.
A written notice of withdrawal of a Designated Event Repurchase Notice
may be in the form set forth in the preceding paragraph or may be in the form of
a conditional withdrawal contained in a Designated Event Repurchase Notice
pursuant to the terms of Section 14.01(a).
(d) On or prior to the Designated Event Repurchase Date, the
Company will deposit with the Trustee (or other paying agent appointed by the
Company or if the Company is acting as its own paying agent, set aside,
segregate and hold in trust as provided in Section 3.04) an amount of money
sufficient to repurchase on the Designated Event Repurchase Date all the
Securities to be repurchased on such date at the appropriate repurchase price,
together with accrued Interest to, but excluding, the Designated Event
Repurchase Date; provided that if such payment is made on the Designated Event
Repurchase Date it must be received by the Trustee or paying agent, as the case
may be, by 10:00 a.m. New York City time, on such date. Subject to receipt of
funds and/or Securities by the Trustee (or other paying agent appointed by the
Company), payment for Securities surrendered for repurchase (and not withdrawn)
prior to the Designated Event Expiration Time will be made promptly (but in no
event more than five (5) Business Days) following the later of (x) the
Designated Event Repurchase Date with respect to such Security (provided the
holder has satisfied the conditions in this Section 14.01) and (y) the time of
delivery of such Security to the Trustee (or other paying agent appointed by the
Company) by the holder thereof in the manner required by this Section 14.01) by
mailing checks for the amount payable
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to the holders of such Securities entitled thereto as they shall appear in the
Security Register.
If the Trustee (or other paying agent appointed by the Company) holds
money sufficient to repurchase on the Designated Event Repurchase Date all the
Securities or portions thereof that are to be purchased as of the Designated
Event Repurchase Date, then on or after the Designated Event Repurchase Date (i)
the Securities will cease to be outstanding, (ii) interest on the Securities
will cease to accrue, and (iii) all other rights of the holders of such
Securities will terminate, whether or not book-entry transfer of the Securities
has been made or the Securities have been delivered to the Trustee or paying
agent, other than the right to receive the repurchase price upon delivery of the
Securities.
(e) In the case of a reclassification, change, consolidation,
merger, combination, sale or conveyance to which Section 15.06 applies, in which
the Common Stock of the Company is changed or exchanged as a result into the
right to receive stock, securities or other property or assets (including cash),
which includes shares of Common Stock of the Company or shares of common stock
of another Person that are, or upon issuance will be, traded on a United States
national securities exchange or approved for trading on an established automated
over-the-counter trading market in the United States and such shares constitute
at the time such change or exchange becomes effective in excess of 50% of the
aggregate fair market value of such stock, securities or other property or
assets (including cash) (as determined by the Company, which determination shall
be conclusive and binding), then the Person formed by such consolidation or
resulting from such merger or which acquires such assets, as the case may be,
shall execute and deliver to the Trustee a supplemental indenture (accompanied
by an Opinion of Counsel that such supplemental indenture complies with the
Trust Indenture Act as in force at the date of execution of such supplemental
indenture) modifying the provisions of this Indenture relating to the right of
holders of the Securities to cause the Company to repurchase the Securities
following a Designated Event, including without limitation the applicable
provisions of this Section 14.01 and the definitions of Common Stock and
Designated Event, as appropriate, as determined in good faith by the Company
(which determination shall be conclusive and binding), to make such provisions
apply to such other Person if different from the Company and the common stock
issued by such Person (in lieu of the Company and the Common Stock of the
Company).
(f) The Company will comply with the provisions of Rule 13e-4 and
any other tender offer rules under the Exchange Act to the extent then
applicable in connection with the repurchase rights of the holders of Securities
in the event of a Designated Event.
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Section 14.02. Securities Repurchased in Part. Upon presentation of any
Security repurchased pursuant to Section 14.01 only in part, the Company shall
execute and the Trustee shall authenticate and make available for delivery to
the holder thereof, at the expense of the Company, a new Security or Securities,
of any authorized denomination, in aggregate principal amount equal to the
unrepurchased portion of the Securities presented.
Section 14.03. Repayment to the Company. To the extent that the
aggregate amount of cash or money deposited by the Company pursuant to Section
14.01(d) exceeds the aggregate repurchase price of the Securities or portions
thereof which the Company is obligated to purchase as of the Designated Event
Repurchase Date, then, unless otherwise agreed in writing with the Company,
promptly after the Business Day following the Designated Event Repurchase Date
the Trustee shall return any such excess to the Company together with interest,
if any, thereon.
ARTICLE 15
CONVERSION OF SECURITIES
Section 15.01. Right To Convert. Subject to and upon compliance with
the provisions of this Indenture, at any time prior to December 15, 2008, the
holder of any Security shall have the right, at such holder's option, to convert
the principal amount of the Security, or any portion of such principal amount
which is a multiple of $1,000, into fully paid and non-assessable shares of
Common Stock (as such shares shall then be constituted) at the Conversion Rate
in effect at such time, by surrender of the Security to be so converted in whole
or in part, together with any required funds, in the manner provided in Section
15.02.
A Security in respect of which a holder is electing to exercise its
option to require the Company to repurchase such holder's Securities upon a
Designated Event pursuant to Section 14.01 may be converted only if such holder
withdraws its election in accordance with Section 14.01. A holder of Securities
is not entitled to any rights of a holder of Common Stock until such holder has
converted its Securities into Common Stock, and only to the extent such
Securities are deemed to have been converted into Common Stock under this
Article 15.
Section 15.02. Exercise Of Conversion Privilege; Issuance Of Common
Stock On Conversion; No Adjustment For Interest Or Dividends. In order to
exercise the conversion privilege with respect to any Security in certificated
form, the Company must receive at the office or agency of the Company maintained
for that purpose or, at the option of such holder, the Corporate Trust Office,
such Security with the original or facsimile of the form entitled "CONVERSION
NOTICE" on the reverse thereof, duly completed and manually signed, together
with such
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Securities duly endorsed for transfer, accompanied by the funds, if any,
required by the fifth paragraph of this Section 15.02. Such notice shall also
state the name or names (with address or addresses) in which the certificate or
certificates for shares of Common Stock which shall be issuable on such
conversion shall be issued, and shall be accompanied by transfer or similar
taxes, if required pursuant to Section 15.07.
In order to exercise the conversion privilege with respect to any
interest in a Global Security, the beneficial holder must complete, or cause to
be completed, the appropriate instruction form for conversion pursuant to the
Depositary's book-entry conversion program, deliver, or cause to be delivered,
by book-entry delivery an interest in such Global Security, furnish appropriate
endorsements and transfer documents if required by the Company or the Trustee or
conversion agent, and pay the funds, if any, required by this Section 15.02 and
any transfer taxes if required pursuant to Section 15.07.
As promptly as practicable after satisfaction of the requirements for
conversion set forth above, subject to compliance with any restrictions on
transfer if shares issuable on conversion are to be issued in a name other than
that of the Securityholder (as if such transfer were a transfer of the Security
or Securities (or portion thereof) so converted), the Company shall issue and
shall deliver to such Securityholder at the office or agency maintained by the
Company for such purpose pursuant to Section 3.02, a certificate or certificates
for the number of full shares of Common Stock issuable upon the conversion of
such Security or portion thereof as determined by the Company in accordance with
the provisions of this Article 15 and a check or cash in respect of any
fractional interest in respect of a share of Common Stock arising upon such
conversion, calculated by the Company as provided in Section 15.03. In case any
Security of a denomination greater than $1,000 shall be surrendered for partial
conversion, and subject to Section 2.03, the Company shall execute and the
Trustee shall authenticate and deliver to the holder of the Security so
surrendered, without charge to him, a new Security or Securities in authorized
denominations in an aggregate principal amount equal to the unconverted portion
of the surrendered Security.
Each conversion shall be deemed to have been effected as to any such
Security (or portion thereof) on the date on which the requirements set forth
above in this Section 15.02 have been satisfied as to such Security (or portion
thereof), and the Person in whose name any certificate or certificates for
shares of Common Stock shall be issuable upon such conversion shall be deemed to
have become on said date the holder of record of the shares represented thereby;
provided that any such surrender on any date when the stock transfer books of
the Company shall be closed shall constitute the Person in whose name the
certificates are to be issued as the record holder thereof for all purposes on
the next succeeding day on which such stock transfer books are open, but such
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conversion shall be at the Conversion Rate in effect on the date upon which such
Security shall be surrendered.
Any Security or portion thereof surrendered for conversion during the
period from the close of business on the record date for any interest payment
date to the close of business on the Business Day preceding the following
interest payment date shall be accompanied by payment, in immediately available
funds or other funds acceptable to the Company, of an amount equal to the
interest otherwise payable on such interest payment date on the principal amount
being converted; provided that no such payment need be made (1) if the Company
has specified a Designated Event Repurchase Date following a Designated Event
that is after a record date and on or prior to the next interest payment date or
(2) to the extent of any overdue interest, if any overdue interest exists at the
time of conversion with respect to such Security. Except as provided above in
this Section 15.02, no payment or other adjustment shall be made for interest
accrued on any Security converted or for dividends on any shares issued upon the
conversion of such Security as provided in this Article 15.
Upon the conversion of an interest in a Global Security, the Trustee
(or other conversion agent appointed by the Company), or the Custodian at the
direction of the Trustee (or other conversion agent appointed by the Company),
shall make a notation on such Global Security as to the reduction in the
principal amount represented thereby. The Company shall notify the Trustee in
writing of any conversions of Securities effected through any conversion agent
other than the Trustee.
Upon the conversion of a Security, any accrued but unpaid Interest to
the conversion date with respect to the converted Security shall not be
cancelled, extinguished or forfeited, but rather shall be deemed to be paid in
full to the holder thereof through delivery of the Common Stock (together with
the cash payment, if any in lieu of fractional shares) in exchange for the
Security being converted pursuant to the provisions hereof; and the fair market
value of such shares of Common Stock (together with any such cash payment in
lieu of fractional shares) shall be treated as issued, to the extent thereof,
first in exchange for and in satisfaction of our obligation to pay the principal
amount of the converted Security, the accrued but unpaid interest through the
conversion date, and the balance, if any, of such fair market value of such
Common Stock (and any such cash payment) shall be treated as issued in exchange
for and in satisfaction of the right to convert the Security being converted
pursuant to the provisions hereof.
Section 15.03. Cash Payments in Lieu of Fractional Shares. No
fractional shares of Common Stock or scrip certificates representing fractional
shares shall be issued upon conversion of Securities. If more than one Security
shall be surrendered for conversion at one time by the same holder, the number
of
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full shares that shall be issuable upon conversion shall be computed on the
basis of the aggregate principal amount of the Securities (or specified portions
thereof to the extent permitted hereby) so surrendered. If any fractional share
of stock would be issuable upon the conversion of any Security or Securities,
the Company shall make an adjustment and payment therefor in cash at the current
market price thereof to the holder of Securities. The current market price of a
share of Common Stock shall be the Closing Sale Price on the last Trading Day
immediately preceding the day on which the Securities (or specified portions
thereof) are deemed to have been converted.
Section 15.04. Conversion Rate. Each $1,000 principal amount of the
Securities shall be convertible into the number of shares of Common Stock
specified in the form of Security (herein called the "CONVERSION RATE") attached
as Exhibit A hereto, subject to adjustment as provided in this Article 15.
Section 15.05. Adjustment Of Conversion Rate. The Conversion Rate shall
be adjusted from time to time by the Company as follows:
(a) In case the Company shall hereafter pay a dividend or make a
distribution to all holders of the outstanding Common Stock in shares of Common
Stock, the Conversion Rate shall be increased so that the same shall equal the
rate determined by multiplying the Conversion Rate 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 by a
fraction,
(i) the numerator of which shall be the sum of the number
of shares of Common Stock outstanding at the close of business on the
date fixed for the determination of stockholders entitled to receive
such dividend or other distribution plus the total number of shares of
Common Stock constituting such dividend or other distribution; and
(ii) the denominator of which shall be the number of
shares of Common Stock outstanding at the close of business on the date
fixed for such determination,
such increase to become effective immediately after the opening of business on
the day following the date fixed for such determination. If any dividend or
distribution of the type described in this Section 15.05(a) is declared but not
so paid or made, the Conversion Rate shall again be adjusted to the Conversion
Rate that would then be in effect if such dividend or distribution had not been
declared.
(b) In case the Company shall issue rights or warrants to all
holders of its outstanding shares of Common Stock entitling them (for a period
expiring within forty-five (45) days after the date fixed for determination of
stockholders entitled to receive such rights or warrants) to subscribe for or
purchase shares of
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Common Stock at a price per share less than the average of the Closing Sale
Prices of the Common Stock for the 10 Trading Days immediately preceding the
date such distribution is first publicly announced by the Company, the
Conversion Rate shall be increased so that the same shall equal the rate
determined by multiplying the Conversion Rate in effect immediately prior to the
date fixed for determination of stockholders entitled to receive such rights or
warrants by a fraction,
(i) the numerator of which shall be the number of shares
of Common Stock outstanding on the date fixed for determination of
stockholders entitled to receive such rights or warrants plus the total
number of additional shares of Common Stock offered for subscription or
purchase, and
(ii) the denominator of which shall be the sum of the
number of shares of Common Stock outstanding at the close of business
on the date fixed for determination of stockholders entitled to receive
such rights or warrants plus the number of shares that the aggregate
offering price of the total number of shares so offered would purchase
at a price equal to the average of the Closing Sale Prices of the
Common Stock for the 10 Trading Days immediately preceding the date
such distribution is first publicly announced by the Company.
Such adjustment shall be successively made whenever any such rights or
warrants are issued, and shall become effective immediately after the opening of
business on the day following the date fixed for determination of stockholders
entitled to receive such rights or warrants. To the extent that shares of Common
Stock are not delivered after the expiration of such rights or warrants, the
Conversion Rate shall be readjusted to the Conversion Rate that would then be in
effect had the adjustments made upon the issuance of such rights or warrants
been made on the basis of delivery of only the number of shares of Common Stock
actually delivered. If such rights or warrants are not so issued, the Conversion
Rate shall again be adjusted to be the Conversion Rate that would then be in
effect if such date fixed for the determination of stockholders entitled to
receive such rights or warrants had not been fixed. In determining whether any
rights or warrants entitle the holders to subscribe for or purchase shares of
Common Stock at a price less than the average of the Closing Sale Prices of the
Common Stock for the 10 Trading Days immediately preceding the date such
distribution is first publicly announced by the Company, and in determining the
aggregate offering price of such shares of Common Stock, there shall be taken
into account any consideration received by the Company for such rights or
warrants and any amount payable on exercise or conversion thereof, the value of
such consideration, if other than cash, to be determined by the Board of
Directors.
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(c) In case outstanding shares of Common Stock shall be subdivided
into a greater number of shares of Common Stock, the Conversion Rate in effect
at the opening of business on the day following the day upon which such
subdivision becomes effective shall be proportionately increased, and
conversely, in case outstanding shares of Common Stock shall be combined into a
smaller number of shares of Common Stock, the Conversion Rate in effect at the
opening of business on the day following the day upon which such combination
becomes effective shall be proportionately reduced, such increase or reduction,
as the case may be, to become effective immediately after the opening of
business on the day following the day upon which such subdivision or combination
becomes effective.
(d) In case the Company shall, by dividend or otherwise,
distribute to all holders of its Common Stock shares of any class of capital
stock of the Company or evidences of its indebtedness or assets (including
securities, but excluding any rights or warrants referred to in Section
15.05(b), and excluding any dividend or distribution (x) paid exclusively in
cash or (y) referred to in Section 15.05(a) (any of the foregoing hereinafter in
this Section 15.05(d) called the "COMPANY STOCK")), then, in each such case
(unless the Company elects to reserve such Company Stock for distribution to the
Securityholders upon the conversion of the Securities so that any such holder
converting Securities will receive upon such conversion, in addition to the
shares of Common Stock to which such holder is entitled, the amount and kind of
such Company Stock which such holder would have received if such holder had
converted its Securities into Common Stock immediately prior to the Dividend
Record Date for such distribution of the Company Stock) the Conversion Rate
shall be increased so that the same shall be equal to the rate determined by
multiplying the Conversion Rate in effect on the Dividend Record Date with
respect to such distribution by a fraction,
(i) the numerator of which shall be the Current Market
Price on such Dividend Record Date; and
(ii) the denominator of which shall be the Current Market
Price on such Dividend Record Date less the fair market value (as
determined by the Board of Directors, whose determination shall be
conclusive, and described in a resolution of the Board of Directors) on
the Dividend Record Date of the portion of the Company Stock so
distributed applicable to one share of Common Stock,
such adjustment to become effective immediately prior to the opening of business
on the day following such Dividend Record Date; provided that if the then fair
market value (as so determined) of the portion of the Company Stock so
distributed applicable to one share of Common Stock is equal to or greater than
the Current Market Price on the Dividend Record Date, in lieu of the foregoing
adjustment, adequate provision shall be made so that each Securityholder shall
66
have the right to receive upon conversion the amount of Company Stock such
holder would have received had such holder converted each Security on the
Dividend Record Date. If such dividend or distribution is not so paid or made,
the Conversion Rate shall again be adjusted to be the Conversion Rate 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 15.05(d) by reference to the actual or when issued
trading market for any securities, it must in doing so consider the prices in
such market over the same period used in computing the Current Market Price on
the applicable Dividend Record Date.
Notwithstanding the foregoing, if the Company Stock distributed by the
Company to all holders of its Common Stock consist of capital stock of, or
similar equity interests in, a Subsidiary or other business unit, the Conversion
Rate shall be increased so that the same shall be equal to the rate determined
by multiplying the Conversion Rate in effect on the Dividend Record Date with
respect to such distribution by a fraction,
(i) the numerator of which shall be the sum of (A) the
average of the Closing Sale Prices of the Common Stock for the ten (10)
Trading Days commencing on and including the fifth Trading Day after
the date on which "ex-dividend trading" commences for such dividend or
distribution on the New York Stock Exchange or such other national or
regional exchange or market on which such securities are then listed or
quoted (the "EX-DIVIDEND DATE") plus (B) the fair market value of the
securities distributed in respect of each share of Common Stock for
which this Section 15.05(d) applies which shall equal the number of
securities distributed in respect of each share of Common Stock
multiplied by the average of the Closing Sale Prices of those
securities distributed for the ten (10) Trading Days commencing on and
including the fifth Trading Day after the Ex-Dividend Date; and
(ii) the denominator of which shall be the average of the
Closing Sale Prices of the Common Stock for the ten (10) Trading Days
commencing on and including the fifth Trading Day after the Ex-Dividend
Date,
such adjustment to become effective immediately prior to the opening of business
on the day following such Dividend Record Date; provided that the Company may in
lieu of the foregoing adjustment make adequate provision so that each
Securityholder shall have the right to receive upon conversion the amount of
Company Stock such holder would have received had such holder converted each
Security on the Dividend Record Date with respect to such distribution.
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Rights or warrants distributed by the Company to all holders of Common
Stock entitling the holders thereof to subscribe for or purchase shares of the
Company's capital stock (either initially or under certain circumstances), which
rights or warrants, until the occurrence of a specified event or events
("TRIGGER EVENT"): (i) are deemed to be transferred with such shares of Common
Stock; (ii) are not exercisable; and (iii) are also issued in respect of future
issuances of Common Stock, shall be deemed not to have been distributed for
purposes of this Section 15.05 (and no adjustment to the Conversion Rate under
this Section 15.05 will be required) until the occurrence of the earliest
Trigger Event, whereupon such rights and warrants shall be deemed to have been
distributed and an appropriate adjustment (if any is required) to the Conversion
Rate shall be made under this Section 15.05(d). If any such right or warrant,
including any such existing rights or warrants distributed prior to the date of
this Indenture, are subject to events, upon the occurrence of which such rights
or warrants become exercisable to purchase different securities, evidences of
indebtedness or other assets, then the date of the occurrence of any and each
such event shall be deemed to be the date of distribution and record date with
respect to new rights or warrants with such rights (and a termination or
expiration of the existing rights or warrants without exercise by any of the
holders 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 was counted
for purposes of calculating a distribution amount for which an adjustment to the
Conversion Rate under this Section 15.05 was made, (1) in the case of any such
rights or warrants that shall all have been redeemed or repurchased without
exercise by any holders thereof, the Conversion Rate shall be readjusted upon
such final redemption or repurchase to give effect to such distribution or
Trigger Event, as the case may be, as though it were a cash distribution, equal
to the per share redemption or repurchase price received by a holder or holders
of Common Stock with respect to such rights or warrants (assuming such holder
had retained such rights or warrants), made to all holders of Common Stock as of
the date of such redemption or repurchase, and (2) in the case of such rights or
warrants that shall have expired or been terminated without exercise by any
holders thereof, the Conversion Rate shall be readjusted as if such rights and
warrants had not been issued.
No adjustment of the Conversion Rate shall be made pursuant to this
Section 15.05(d) in respect of rights or warrants distributed or deemed
distributed on any Trigger Event to the extent that such rights or warrants are
actually distributed, or reserved by the Company for distribution to holders of
Securities upon conversion by such holders of Securities to Common Stock.
For purposes of this Section 15.05(d) and Section 15.05(a) and (b), any
dividend or distribution to which this Section 15.05(d) is applicable that also
includes shares of Common Stock, or rights or warrants to subscribe for or
purchase shares of Common Stock (or both), shall be deemed instead to be (1) a
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dividend or distribution of the evidences of indebtedness, assets or shares of
capital stock other than such shares of Common Stock or rights or warrants (and
any Conversion Rate adjustment required by this Section 15.05(d) with respect to
such dividend or distribution shall then be made) immediately followed by (2) a
dividend or distribution of such shares of Common Stock or such rights or
warrants (and any further Conversion Rate adjustment required by Sections
15.05(a) and 15.05(b) with respect to such dividend or distribution shall then
be made), except (A) the Dividend Record Date of such dividend or distribution
shall be substituted as "the date fixed for the determination of stockholders
entitled to receive such dividend or other distribution", "the date fixed for
the determination of stockholders entitled to receive such rights or warrants"
and "the date fixed for such determination" within the meaning of Section
15.05(a) and 15.05(b) and (B) any shares of Common Stock included in such
dividend or distribution shall not be deemed "outstanding at the close of
business on the date fixed for such determination" within the meaning of Section
15.05(a).
(e) In case the Company shall, by dividend or otherwise,
distribute to all holders of its Common Stock cash (excluding any dividend or
distribution in connection with the liquidation, dissolution or winding up of
the Company, whether voluntary or involuntary), then, in such case, the
Conversion Rate shall be increased so that the same shall equal the rate
determined by multiplying the Conversion Rate in effect immediately prior to the
close of business on such record date by a fraction,
(i) the numerator of which shall be the Current Market
Price on such record date; and
(ii) the denominator of which shall be the Current Market
Price on such record date less the amount of cash so distributed
applicable to one share of Common Stock,
such adjustment to be effective immediately prior to the opening of business on
the day following the record date; provided that if the portion of the cash so
distributed applicable to one share of Common Stock is equal to or greater than
the Current Market Price on the record date, in lieu of the foregoing
adjustment, adequate provision shall be made so that each Securityholder shall
have the right to receive upon conversion the amount of cash such holder would
have received had such holder converted each Security on the record date. If
such dividend or distribution is not so paid or made, the Conversion Rate shall
again be adjusted to be the Conversion Rate 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
69
the payment to stockholders of consideration per share of Common Stock having a
Fair Market Value (as determined by the Board of Directors, whose determination
shall be conclusive and described in a 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 Closing Sale Price of a share of Common Stock on the Trading Day next
succeeding the Expiration Time, the Conversion Rate shall be increased so that
the same shall equal the rate determined by multiplying the Conversion Rate in
effect immediately prior to the Expiration Time by a fraction,
(i) the numerator 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 Closing Sale 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 number of
shares of Common Stock outstanding (including any Purchased Shares) at
the Expiration Time multiplied by the Closing Sale Price of a share of
Common Stock on the Trading Day next succeeding the Expiration Time,
such adjustment to become effective immediately prior to 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 Rate shall again be adjusted to
be the Conversion Rate that would then be in effect if such tender or exchange
offer had not been made.
(g) In case of a tender or exchange offer made by a Person other
than the Company or any Subsidiary for an amount that increases the offeror's
ownership of Common Stock to more than twenty-five percent (25%) of the Common
Stock outstanding and shall involve the payment by such Person of consideration
per share of Common Stock having a Fair Market Value (as determined by the Board
of Directors, whose determination shall be conclusive, and described in a
resolution of the Board of Directors) that as of the last time (the "OFFER
EXPIRATION TIME") tenders or exchanges may be made pursuant to such tender or
exchange offer (as it shall have been amended) that exceeds the Closing Price of
a share of Common Stock on the Trading Day next succeeding the Offer Expiration
Time, and in which, as of the Offer Expiration Time the Board of
70
Directors is not recommending rejection of the offer, the Conversion Rate shall
be increased so that the same shall equal the rate determined by multiplying the
Conversion Rate in effect immediately prior to the Offer Expiration Time by a
fraction
(i) the numerator 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
Offer Expiration Time (the shares deemed so accepted, up to any such
maximum, being referred to as the "ACCEPTED PURCHASED SHARES") and (y)
the product of the number of shares of Common Stock outstanding (less
any Accepted Purchased Shares) at the Offer Expiration Time and the
Closing Sale Price of a share of Common Stock on the Trading Day next
succeeding the Offer Expiration Time, and
(ii) the denominator of which shall be the number of
shares of Common Stock outstanding (including any Accepted Purchased
Shares) at the Offer Expiration Time multiplied by the Closing Sale
Price of a share of Common Stock on the Trading Day next succeeding the
Offer Expiration Time,
such adjustment to become effective immediately prior to the opening of business
on the day following the Offer Expiration Time. If such Person is obligated to
purchase shares pursuant to any such tender or exchange offer, but such Person
is permanently prevented by applicable law from effecting any such purchases or
all such purchases are rescinded, the Conversion Rate shall again be adjusted to
be the Conversion Rate that would then be in effect if such tender or exchange
offer had not been made. Notwithstanding the foregoing, the adjustment described
in this Section 15.05(g) shall not be made if, as of the Offer Expiration Time,
the offering documents with respect to such offer disclose a plan or intention
to cause the Company to engage in any transaction described in Article 10.
(h) For purposes of this Section 15.05, the following terms shall
have the meaning indicated:
(i) "CURRENT MARKET PRICE" shall mean the average of the
daily Closing Sale Prices per share of Common Stock for the ten
consecutive Trading Days ending not later than the earlier of such date
of determination and the day before the "EX" date with respect to the
issuance, distribution, subdivision or combination requiring such
computation immediately prior to the date in question. For purpose of
this paragraph, the term "EX" date, (1) when used with respect to any
issuance or distribution, means the first date on which the Common
Stock trades,
71
regular way, on the relevant exchange or in the relevant market from
which the Closing Sale Price was obtained without the right to receive
such issuance or distribution, and (2) when used with respect to any
subdivision or combination of shares of Common Stock, means the first
date on which the Common Stock trades, regular way, on such exchange or
in such market after the time at which such subdivision or combination
becomes effective.
If another issuance, distribution, subdivision or combination
to which Section 15.05 applies occurs during the period applicable for
calculating "CURRENT MARKET PRICE" pursuant to the definition in the
preceding paragraph, "CURRENT MARKET PRICE" shall be calculated for
such period in a manner determined by the Board of Directors to reflect
the impact of such issuance, distribution, subdivision or combination
on the Closing Sale Price of the Common Stock during such period.
(ii) "FAIR MARKET VALUE" shall mean the amount which a
willing buyer would pay a willing seller in an arm's-length
transaction.
(iii) "DIVIDEND RECORD DATE" shall mean, with respect to
any dividend, distribution or other transaction or event in which the
holders of Common Stock have the right to receive any cash, securities
or other property or in which the Common Stock (or other applicable
security) is exchanged for or converted into any combination of cash,
securities or other property, the date fixed for determination of
stockholders entitled to receive such cash, securities or other
property (whether such date is fixed by the Board of Directors or by
statute, contract or otherwise).
(iv) "TRADING DAY" shall mean (x) if the applicable
security is quoted on the Nasdaq National Market, a day on which trades
may be made thereon or (y) if the applicable security is listed or
admitted for trading on the American Stock Exchange, New York Stock
Exchange or another national securities exchange, a day on which the
American Stock Exchange, New York Stock Exchange or another national
securities exchange is open for business or (z) if the applicable
security is not so listed, admitted for trading or quoted, any day
other than a Saturday or Sunday or a day on which banking institutions
in the State of New York are authorized or obligated by law or
executive order to close.
(i) The Company may make such increases in the Conversion Rate, in
addition to those required by Section 15.05(a), (b), (c), (d), (e), (f) or (g)as
the Board of Directors considers to be advisable to avoid or diminish any income
tax to holders of Common Stock or rights to purchase Common Stock resulting from
any dividend or distribution of stock (or rights to acquire stock) or from any
event treated as such for income tax purposes.
72
To the extent permitted by applicable law, the Company from time to
time may increase the Conversion Rate by any amount for any period of time if
the period is at least twenty (20) days, the increase is irrevocable during the
period and the Board of Directors shall have made a determination that such
increase would be in the best interests of the Company, which determination
shall be conclusive. Whenever the Conversion Rate is increased pursuant to the
preceding sentence, the Company shall mail to holders of record of the
Securities a notice of the increase at least fifteen (15) days prior to the date
the increased Conversion Rate takes effect, and such notice shall state the
increased Conversion Rate and the period during which it will be in effect.
(j) All calculations under this Article 15 shall be made by the
Company and shall be made to the nearest cent or to the nearest one-ten
thousandth (1/10,000) of a share, as the case may be. No adjustment need be made
for rights to purchase Common Stock pursuant to a Company plan for reinvestment
of dividends or interest or for any issuance of Common Stock or convertible or
exchangeable securities or rights to purchase Common Stock or convertible or
exchangeable securities. To the extent the Securities become convertible into
cash, assets, property or securities (other than capital stock of the Company),
no adjustment need be made thereafter as to the cash, assets, property or such
securities. Interest will not accrue on any cash into which the Securities are
convertible.
(k) Whenever the Conversion Rate is adjusted as herein provided,
the Company shall promptly file with the Trustee and any conversion agent other
than the Trustee an Officers' Certificate setting forth the Conversion Rate
after such adjustment and setting forth a brief statement of the facts requiring
such adjustment. Unless and until a Responsible Officer of the Trustee shall
have received such Officers' Certificate, the Trustee shall not be deemed to
have knowledge of any adjustment of the Conversion Rate and may assume that the
last Conversion Rate of which it has knowledge is still in effect. Promptly
after delivery of such certificate, the Company shall prepare a notice of such
adjustment of the Conversion Rate setting forth the adjusted Conversion Rate and
the date on which each adjustment becomes effective and shall mail such notice
of such adjustment of the Conversion Rate to the holder of each Security at his
last address appearing on the Security Register provided for in Section 2.05 of
this Indenture, within twenty (20) days after execution thereof. Failure to
deliver such notice shall not affect the legality or validity of any such
adjustment.
(l) In any case in which this Section 15.05 provides that an
adjustment shall become effective immediately after (1) a record date or
Dividend Record Date for an event, (2) the date fixed for the determination of
stockholders entitled to receive a dividend or distribution pursuant to Section
15.05(a), (3) a date fixed for the determination of stockholders entitled to
receive rights or warrants pursuant to Section 15.05(b), or (4) the Expiration
Time or Offer Expiration
73
Time, as the case may be, for any tender or exchange offer pursuant to Section
15.05(f) or Section 15.05(g), (each a "DETERMINATION DATE"), the Company may
elect to defer until the occurrence of the applicable Adjustment Event (as
hereinafter defined) (x) issuing to the holder of any Security converted after
such Determination Date and before the occurrence of such Adjustment Event, the
additional shares of Common Stock or other securities issuable upon such
conversion by reason of the adjustment required by such Adjustment Event over
and above the Common Stock issuable upon such conversion before giving effect to
such adjustment and (y) paying to such holder any amount in cash in lieu of any
fraction pursuant to Section 15.03. For purposes of this Section 15.05(l), the
term "ADJUSTMENT EVENT" shall mean:
(i) in any case referred to in clause (1) hereof, the
occurrence of such event,
(ii) in any case referred to in clause (2) hereof, the
date any such dividend or distribution is paid or made,
(iii) in any case referred to in clause (3) hereof, the
date of expiration of such rights or warrants, and
(iv) in any case referred to in clause (4) hereof, the
date a sale or exchange of Common Stock pursuant to such tender or
exchange offer is consummated and becomes irrevocable.
(m) For purposes of this Section 15.05, 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.
Section 15.06. Effect Of Reclassification, Consolidation, Merger or
Sale. If any of the following events occur, namely (i) any reclassification or
change of the outstanding shares of Common Stock (other than a subdivision or
combination to which Section 15.05(c) applies), (ii) any consolidation, merger
or combination of the Company with another Person as a result of which holders
of Common Stock shall be entitled to receive stock, other securities or other
property or assets (including cash) with respect to or in exchange for such
Common Stock, or (iii) any sale or conveyance of 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, other securities or
other property or assets (including cash) with respect to or in exchange for
such Common Stock, then the Company or the successor or purchasing Person, as
the case may be, shall execute with the Trustee a supplemental indenture (which
shall comply with the Trust Indenture
74
Act as in force at the date of execution of such supplemental indenture)
providing that each Security shall be convertible into the kind and amount of
shares of stock, other securities or other property or assets (including cash)
receivable upon such reclassification, change, consolidation, merger,
combination, sale or conveyance by a holder of a number of shares of Common
Stock issuable upon conversion of such Securities (assuming, for such purposes,
a sufficient number of authorized shares of Common Stock are available to
convert all such Securities) immediately prior to such reclassification, change,
consolidation, merger, combination, sale or conveyance assuming such holder of
Common Stock did not exercise his rights of election, if any, as to the kind or
amount of stock, other securities or other property or assets (including cash)
receivable upon such reclassification, change, consolidation, merger,
combination, sale or conveyance (provided that, if the kind or amount of stock,
other securities or other property or assets (including cash) receivable upon
such reclassification, change, consolidation, merger, combination, sale or
conveyance is not the same for each share of Common Stock in respect of which
such rights of election shall not have been exercised ("NON-ELECTING SHARE"),
then for the purposes of this Section 15.06 the kind and amount of stock, other
securities or other property or assets (including cash) receivable upon such
reclassification, change, consolidation, merger, combination, sale or conveyance
for each non-electing share shall be deemed to be the kind and amount so
receivable per share by a plurality of the non-electing shares). Such
supplemental indenture shall provide for adjustments which shall be as nearly
equivalent as may be practicable to the adjustments provided for in this Article
15.
The Company shall cause notice of the execution of such supplemental
indenture to be mailed to each holder of Securities, at its address appearing on
the Security Register provided for in Section 2.05 of this Indenture, within
twenty (20) days after execution thereof. Failure to deliver such notice shall
not affect the legality or validity of such supplemental indenture.
The above provisions of this Section shall similarly apply to
successive reclassifications, changes, consolidations, mergers, combinations,
sales and conveyances.
If this Section 15.06 applies to any event or occurrence, Section 15.05
shall not apply.
Section 15.07. Taxes On Shares Issued. The issuance of stock
certificates on conversions of Securities shall be made without charge to the
converting Securityholder for any documentary, stamp or similar issue or
transfer tax in respect of the issue thereof. The Company shall not, however, be
required to pay any such tax which may be payable in respect of any transfer
involved in the issue and delivery of stock in any name other than that of the
holder of any Security converted, and the Company shall not be required to issue
or deliver any such
75
stock certificate unless and until the Person or Persons requesting the issue
thereof shall have paid to the Company the amount of such tax or shall have
established to the satisfaction of the Company that such tax has been paid.
Section 15.08 . Reservation of Shares, Shares to Be Fully Paid;
Compliance With Governmental Requirements; Listing of Common Stock. The Company
shall provide, free from preemptive rights, out of its authorized but unissued
shares or shares held in treasury, sufficient shares of Common Stock to provide
for the conversion of the Securities from time to time as such Securities are
presented for conversion.
Before taking any action which would cause an adjustment increasing the
Conversion Rate to an amount that would cause the Conversion Price to be reduced
below the then par value, if any, of the shares of Common Stock issuable upon
conversion of the Securities, the Company will take all corporate action which
may, in the opinion of its counsel, be necessary in order that the Company may
validly and legally issue shares of such Common Stock at such adjusted
Conversion Rate.
The Company covenants that all shares of Common Stock which may be
issued upon conversion of Securities will upon issue be fully paid and
non-assessable by the Company and free from all taxes, liens and charges with
respect to the issue thereof.
The Company covenants that, if any shares of Common Stock to be
provided for the purpose of conversion of Securities hereunder require
registration with or approval of any governmental authority under any federal or
state law before such shares may be validly issued upon conversion, the Company
will in good faith and as expeditiously as possible, to the extent then
permitted by the rules and interpretations of the Commission (or any successor
thereto), endeavor to secure such registration or approval, as the case may be.
The Company covenants that, if at any time the Common Stock shall be
listed on the New York Stock Exchange or any other national securities exchange
or automated quotation system, the Company will, if permitted by the rules of
such exchange or automated quotation system, list and keep listed, so long as
the Common Stock shall be so listed on such exchange or automated quotation
system, all Common Stock issuable upon conversion of the Security; provided that
if the rules of such exchange or automated quotation system permit the Company
to defer the listing of such Common Stock until the first conversion of the
Securities into Common Stock in accordance with the provisions of this
Indenture, the Company covenants to list such Common Stock issuable upon
conversion of the Securities in accordance with the requirements of such
exchange or automated quotation system at such time.
76
Section 15.09 . Responsibility Of Trustee. The Trustee and any other
conversion agent shall not at any time be under any duty or responsibility to
any holder of Securities to determine the Conversion Rate or whether any facts
exist which may require any adjustment of the Conversion Rate, or with respect
to the nature or extent or calculation of any such adjustment when made, or with
respect to the method employed, or herein or in any supplemental indenture
provided to be employed, in making the same. The Trustee and any other
conversion agent shall not be accountable with respect to the validity or value
(or the kind or amount) of any shares of Common Stock, or of any securities or
property, which may at any time be issued or delivered upon the conversion of
any Security; and the Trustee and any other conversion agent make no
representations with respect thereto. Neither the Trustee nor any conversion
agent shall be responsible for any failure of the Company to issue, register the
transfer of or deliver any shares of Common Stock or stock certificates or other
securities or property or cash upon the surrender of any Security for the
purpose of conversion or to comply with any of the duties, responsibilities or
covenants of the Company contained in this Article 15. Without limiting the
generality of the foregoing, neither the Trustee nor any conversion agent shall
be under any responsibility to determine the correctness of any provisions
contained in any supplemental indenture entered into pursuant to Section 15.06
relating either to the kind or amount of shares of stock or securities or
property (including cash) receivable by Securityholders upon the conversion of
their Securities after any event referred to in such Section 15.06 or to any
adjustment to be made with respect thereto, but, subject to the provisions of
Section 6.01, may accept as conclusive evidence of the correctness of any such
provisions, and shall be protected in relying upon, the Officers' Certificate
(which the Company shall be obligated to file with the Trustee prior to the
execution of any such supplemental indenture) with respect thereto.
Section 15.10 . Notice To Holders Prior To Certain Actions. In case:
(a) the Company shall declare a dividend (or any other
distribution) on its Common Stock that would require an adjustment in the
Conversion Rate pursuant to Section 15.05; or
(b) the Company shall authorize the granting to the holders of all
or substantially all of its Common Stock of rights or warrants to subscribe for
or purchase any share of any class or any other rights or warrants; or
(c) of any reclassification or reorganization of the Common Stock
of the Company (other than a subdivision or combination of its outstanding
Common Stock, or a change in par value, or from par value to no par value, or
from no par value to par value), or of any consolidation or merger to which the
Company is a party and for which approval of any stockholders of the Company is
required, or of the sale or transfer of all or substantially all of the assets
of the Company; or
77
(d) of the voluntary or involuntary dissolution, liquidation or
winding up of the Company;
the Company shall cause to be filed with the Trustee and to be mailed to each
holder of Securities at his address appearing on the Security Register provided
for in Section 2.05 of this Indenture, as promptly as possible but in any event
at least ten (10) days prior to the applicable date hereinafter specified, a
notice stating (x) the date on which a record is to be taken for the purpose of
such dividend, distribution or rights or warrants, or, if a record is not to be
taken, the date as of which the holders of Common Stock of record to be entitled
to such dividend, distribution or rights are to be determined, or (y) the date
on which such reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding up is expected to become effective or occur,
and the date as of which it is expected that holders of Common Stock of record
shall be entitled to exchange their Common Stock for securities or other
property deliverable upon such reclassification, consolidation, merger, sale,
transfer, dissolution, liquidation or winding up. Failure to give such notice,
or any defect therein, shall not affect the legality or validity of such
dividend, distribution, reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding up.
Section 15.11 . Shareholder Rights Plans. Each share of Common Stock
issued upon conversion of Securities pursuant to this Article 15 shall be
entitled to receive the appropriate number of rights, if any, and the
certificates representing the Common Stock issued upon such conversion shall
bear such legends, if any, in each case as may be provided by the terms of any
shareholder rights plan adopted by the Company, as the same may be amended from
time to time. If at the time of conversion, however, the rights have separated
from the shares of Common Stock in accordance with the provisions of the
applicable shareholder rights agreement so that the holders of the Securities
would not be entitled to receive any rights in respect of Common Stock issuable
upon conversion of the Securities, the Conversion Rate will be adjusted as
provided in Section 15.05(d).
Section 15.12 . Transfer Restrictions. Shares of Common Stock issued
upon conversion of Restricted Securities (all shares of Common Stock issued in
exchange therefor or substitution thereof) shall be represented by certificates
bearing the Restricted Securities Legend and shall be subject to the
restrictions or transfer set forth in the Restricted Securities Legend.
(b) Any Common Stock as to which such restrictions on transfer as
to which the conditions for removal of the Restricted Securities Legend 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 for the Common Stock, be exchanged for a new certificate or certificates
for a like number of shares of Common Stock, which shall not bear the Restricted
Securities Legend.
78
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed.
INPUT/OUTPUT, INC.
By: /s/ Brad Eastman
------------------------
Name: Brad Eastman
Title: Vice President
THE BANK OF NEW YORK TRUST
COMPANY OF FLORIDA, N.A.,
as Trustee
By: /s/ Patrick T. Giordano
-----------------------
Name: Patrick T. Giordano
Title: Vice President
EXHIBIT A
[Global Securities Legend - include only for Global Securities]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) (THE
"DEPOSITARY", WHICH TERM INCLUDES ANY SUCCESSOR DEPOSITARY) 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
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY (AND ANY PAYMENT
HEREIN IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY), ANY TRANSFER, PLEDGE, OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
[Restricted Securities Legend - Include On Restricted Securities]
THIS SECURITY AND THE SHARES OF INPUT/OUTPUT, INC. (THE "COMPANY") COMMON STOCK
("COMMON STOCK") ISSUABLE UPON CONVERSION OF THIS SECURITY HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
OR ANY STATE SECURITIES LAWS. NEITHER THIS SECURITY, THE SHARES OF COMMON STOCK
ISSUABLE UPON CONVERSION OF THIS SECURITY NOR ANY INTEREST OR PARTICIPATION
HEREIN OR THEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED,
ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR
UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION.
THE HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE HEREOF, AGREES TO OFFER, SELL OR
OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE "RESALE RESTRICTION
TERMINATION DATE") THAT IS TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE
HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY AFFILIATE OF THE COMPANY
WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY) ONLY (A) TO
THE COMPANY OR ANY SUBSIDIARY THEREOF, (B) FOR SO LONG AS THE SECURITIES ARE
ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON IT REASONABLY
A-1
BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER TO WHICH NOTICE IS GIVEN THAT THE TRANSFER IS
BEING MADE IN RELIANCE ON RULE 144A, (C) PURSUANT TO A REGISTRATION STATEMENT
THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, OR (D) PURSUANT TO
ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT, SUBJECT TO THE RIGHTS OF THE COMPANY AND THE WITHIN MENTIONED TRUSTEE PRIOR
TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (D) TO REQUIRE THE
DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION
SATISFACTORY TO EACH OF THEM, AND IN EACH OF THE FOREGOING CASES WHERE
REGISTRATION OF TRANSFER OF THIS SECURITY IS REQUIRED, A CERTIFICATE OF TRANSFER
IN THE FORM APPEARING ON THE OTHER SIDE OF THIS SECURITY COMPLETED AND DELIVERED
BY THE TRANSFEROR TO THE TRUSTEE. THIS LEGEND WILL BE REMOVED AFTER THE RESALE
RESTRICTION TERMINATION DATE UPON THE REQUEST OF THE HOLDER AND THE DELIVERY OF
AN OPINION OF COUNSEL, CERTIFICATES AND/OR OTHER INFORMATION SATISFACTORY TO THE
COMPANY.
A-2
INPUT/OUTPUT, INC.
5.50% CONVERTIBLE SENIOR NOTE DUE 2008
CUSIP: 457652AA3
No. __ $___________
Input/Output, Inc., a corporation duly organized and validly existing
under the laws of the State of Delaware (herein called the "COMPANY", which term
includes any successor corporation under the Indenture referred to on the
reverse hereof), for value received hereby promises to pay to _____________ or
its registered assigns, [the principal sum of ___________ Dollars] [the
principal sum as set forth on Schedule I hereto](1) on December 15, 2008 at the
office or agency of the Company maintained for that purpose in accordance with
the terms of the Indenture, in such coin or currency of the United States of
America as at the time of payment shall be legal tender for the payment of
public and private debts, and to pay interest, semiannually on June 15 and
December 15 of each year, commencing June 15, 2004, on said principal sum at
said office or agency, in like coin or currency, at the rate per annum of 5.50%,
from the June 15 or December 15, as the case may be, next preceding the date of
this Security to which interest has been paid or duly provided for, unless the
date hereof is a date to which interest has been paid or duly provided for, in
which case from the date of this Security, or unless no interest has been paid
or duly provided for on the Securities, in which case from December 10, 2003
until payment of said principal sum has been made or duly provided for.
Notwithstanding the foregoing, if the date hereof is after any June 1 or
December 1, as the case may be, and before the following June 15 or December 15,
this Security shall bear interest from such June 15 or December 15; provided
that if the Company shall default in the payment of interest due on such June 15
or December 15, then this Security shall bear interest from the next preceding
June 15 or December 15 to which interest has been paid or duly provided for or,
if no interest has been paid or duly provided for on such Security, from
December 10, 2003. Except as otherwise provided in the Indenture, the interest
payable on the Security pursuant to the Indenture on any June 15 or December 15
will be paid to the Person entitled thereto as it appears in the Security
Register at the close of business on the record date, which shall be the June 1
or December 1 (whether or not a Business Day) next preceding such June 15 or
December 15, as provided in the Indenture; provided that any such interest not
punctually paid or duly provided for shall be payable as provided in the
Indenture. The Company shall pay interest (i) on any Securities in certificated
form by check mailed to the address of the Person
- --------
(1) Include in Global Security.
A-3
entitled thereto as it appears in the Security Register (provided that the
holder of Securities with an aggregate principal amount in excess of $2,000,000
shall, at the written election of such holder, be paid by wire transfer of
immediately available funds) or (ii) on any Global Security by wire transfer of
immediately available funds to the account of the Depositary or its nominee.
The Company promises to pay interest on overdue principal, premium, if
any, and Interest (to the extent that payment of such interest is enforceable
under applicable law) at the rate of 6.5% per annum.
Reference is made to the further provisions of this Security set forth
on the reverse hereof, including, without limitation, provisions giving the
holder of this Security the right to convert this Security into Common Stock of
the Company on the terms and subject to the limitations referred to on the
reverse hereof and as more fully specified in the Indenture. Such further
provisions shall for all purposes have the same effect as though fully set forth
at this place.
This Security shall be deemed to be a contract made under the laws of
the State of New York, and for all purposes shall be construed in accordance
with and governed by the laws of the State of New York, without regard to
conflicts of laws principles thereof.
This Security shall not be valid or become obligatory for any purpose
until the certificate of authentication hereon shall have been manually signed
by the Trustee or a duly authorized authenticating agent under the Indenture.
A-4
IN WITNESS WHEREOF, the Company has caused this Security to be duly
executed.
INPUT/OUTPUT, INC.
By: ________________________
Name:
Title:
Attest:
By: ___________________________
Name:
Title:
Dated:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities described in the within-named Indenture.
THE BANK OF NEW YORK TRUST
COMPANY OF FLORIDA, N.A., as Trustee
By: ____________________________
Authorized Signatory
, or
By: ____________________________
As Authenticating Agent
(if different from Trustee)
By: _____________________
Authorized Signatory
A-5
FORM OF REVERSE OF SECURITY
INPUT/OUTPUT, INC.
5.50% CONVERTIBLE SENIOR NOTE DUE 2008
This Security is one of a duly authorized issue of Securities of the
Company, designated as its "5.50% Convertible Senior Notes Due 2008" (herein
called the "SECURITIES"), limited in aggregate principal amount to $60,000,000,
issued and to be issued under and pursuant to an Indenture dated as of December
10, 2003 (herein called the "INDENTURE"), between the Company and The Bank of
New York Trust Company of Florida, N.A., as trustee (herein called the
"TRUSTEE"), to which Indenture and all indentures supplemental thereto reference
is hereby made for a description of the rights, limitations of rights,
obligations, duties and immunities thereunder of the Trustee, the Company and
the holders of the Securities.
In case an Event of Default shall have occurred and be continuing, the
principal of, premium, if any, and accrued and unpaid Interest on all Securities
may be declared by either the Trustee or the holders of not less than 25% in
aggregate principal amount of the Securities then outstanding, and upon said
declaration shall become, due and payable, in the manner, with the effect and
subject to the conditions provided in the Indenture.
The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the holders of at least a majority in aggregate
principal amount of the Securities at the time outstanding, to execute
supplemental indentures adding any provisions to or changing in any manner or
eliminating any of the provisions of the Indenture or of any supplemental
indenture or modifying in any manner the rights of the holders of the
Securities; provided that no such supplemental indenture shall, without the
consent of the holders of all Securities then outstanding, (i) extend the fixed
maturity of any Security, or reduce the rate or extend the time of payment of
Interest thereon, or reduce the principal amount thereof or premium, if any,
thereon, or reduce any amount payable upon repurchase thereof, or change the
obligation of the Company to repurchase any Security upon the happening of a
Designated Event in a manner adverse to the holders of Securities, or impair the
right of any Securityholder to institute suit for the payment thereof, or make
the principal thereof or interest or premium, if any, thereon payable in any
coin or currency other than that provided in the Securities, or impair the right
to convert the Securities into Common Stock or reduce the number of shares of
Common Stock or any other property receivable by a Securityholder upon
conversion (subject to the terms set forth in the Indenture, including Section
15.06 thereof) in each case, without the consent of the holder of each Security
so affected, or modify any of the provisions of Section 9.02 or Section 5.07
thereof, except to increase any such
A-6
percentage or to provide that certain other provisions of the Indenture cannot
be modified or waived without the consent of the holder of each Security so
affected, or reduce the quorum or voting requirements set forth in Article 8 or
(ii) reduce the aforesaid percentage of Securities, the holders of which are
required to consent to any such supplemental indenture. Subject to the
provisions of the Indenture, the holders of a majority in aggregate principal
amount of the Securities at the time outstanding may on behalf of the holders of
all of the Securities waive any past default or Event of Default under the
Indenture and its consequences except (A) a default in the payment of Interest,
or any premium on, or the principal of, any of the Securities, (B) a failure by
the Company to convert any Securities into Common Stock of the Company, (C) a
default in the payment of the repurchase price pursuant to Article 14 of the
Indenture, or (D) a default in respect of a covenant or provisions of the
Indenture which under Article 9 of the Indenture cannot be modified or amended
without the consent of the holders of each or all Securities then outstanding or
affected thereby. Any such consent or waiver by the holder of this Security
(unless revoked as provided in the Indenture) shall be conclusive and binding
upon such holder and upon all future holders and owners of this Security and any
Securities which may be issued in exchange or substitution hereof, irrespective
of whether or not any notation thereof is made upon this Security or such other
Securities.
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of and any premium and
Interest on this Security at the place, at the respective times, at the rate and
in the coin or currency herein prescribed.
Interest on the Securities shall be computed on the basis of a 360-day
year of twelve 30-day months.
The Securities are issuable in fully registered form, without coupons,
in denominations of $1,000 principal amount and any multiple of $1,000. At the
office or agency of the Company referred to on the face hereof, and in the
manner and subject to the limitations provided in the Indenture, without payment
of any service charge but with payment of a sum sufficient to cover any tax,
assessment or other governmental charge that may be imposed in connection with
any registration or exchange of Securities, Securities may be exchanged for a
like aggregate principal amount of Securities of any other authorized
denominations.
The Company may not redeem the Securities at its option in whole or in
part prior to maturity. The Securities are not subject to redemption through the
operation of any sinking fund.
If a Designated Event occurs at any time prior to maturity of the
Securities, the Company shall become obligated to purchase, at the option of the
A-7
holder, all or any portion of the Securities held by such holder, on a date
specified by the Company not less than twenty (20) and not more than thirty-five
(35) business days after notice thereof at a repurchase price of 100% of the
principal amount, plus any accrued and unpaid Interest, on such Security up to,
but excluding, the Designated Event Repurchase Date; provided that if the
repurchase date falls after a record date and on or prior the corresponding
interest payment date, then the Interest payable on such interest payment date
shall be paid to the holders of record of such Securities on the applicable
record date instead of the holders surrendering such Securities for repurchase
on such date. The Securities will be redeemable in multiples of $1,000 principal
amount. The Company shall mail to all holders of record of the Securities a
notice of the occurrence of a Designated Event and of the repurchase right
arising as a result thereof on or before the 15th day after the occurrence of
such Designated Event. To exercise such right, a holder shall deliver to the
Company such Security with the form entitled "DESIGNATED EVENT REPURCHASE
NOTICE" on the reverse thereof duly completed, together with the Security, duly
endorsed for transfer, at any time prior to the close of business on the
Designated Event Repurchase Date, and shall deliver the Securities to the
Trustee (or other paying agent appointed by the Company) as set forth in the
Indenture.
Holders have the right to withdraw any Designated Event Repurchase
Notice by delivering to the Trustee (or other paying agent appointed by the
Company) a written notice of withdrawal up to the close of business on the
Designated Event Repurchase Date all as provided in the Indenture.
If money or cash, sufficient to pay the repurchase price of all
Securities or portions thereof to be purchased as of the Designated Event
Repurchase Date is deposited with the Trustee (or other paying agent appointed
by the Company), on the Business Day following the Designated Event Repurchase
Date, interest will cease to accrue on such Securities (or portions thereof)
immediately after the Designated Event Repurchase Date, and the holder thereof
shall have no other rights as such other than the right to receive the
repurchase price upon surrender of such Security.
Subject to the provisions of the Indenture, at any time prior to the
final maturity date of the Securities, the holder hereof has the right, at its
option, to convert each $1,000 principal amount of the Securities into 231.4815
shares of the Company's Common Stock (a conversion price of $4.32 per share), as
such shares shall be constituted at the date of conversion and subject to
adjustment from time to time as provided in the Indenture, upon surrender of
this Security with the form entitled "CONVERSION NOTICE" on the reverse thereof
duly completed, to the Company at the office or agency of the Company maintained
for that purpose in accordance with the terms of the Indenture, or at the option
of such holder, the Corporate Trust Office, and, unless the shares issuable on
conversion are to be issued in the same name as this Security, duly endorsed by,
or accompanied by
A-8
instruments of transfer in form satisfactory to the Company duly executed by,
the holder or by his duly authorized attorney.
No adjustment in respect of interest on any Security converted or
dividends on any shares issued upon conversion of such Security will be made
upon any conversion except as set forth in the next sentence. If this Security
(or portion hereof) is surrendered for conversion during the period from the
close of business on any record date for the payment of interest to the close of
business on the Business Day preceding the following interest payment date, this
Security (or portion hereof being converted) must be accompanied by payment, in
immediately available funds or other funds acceptable to the Company, of an
amount equal to the interest otherwise payable on such interest payment date on
the principal amount being converted; provided that no such payment shall be
required (1) if the Company has specified a repurchase date following a
Designated Event that is during such period or (2) to the extent of any overdue
interest, if any overdue interest exists at the time of conversion with respect
to such Security.
No fractional shares will be issued upon any conversion, but an
adjustment and payment in cash will be made, as provided in the Indenture, in
respect of any fraction of a share which would otherwise be issuable upon the
surrender of any Security or Securities for conversion.
A Security in respect of which a holder is exercising its right to
require repurchase upon a Designated Event may be converted only if such holder
withdraws its election to exercise either such right in accordance with the
terms of the Indenture.
Upon due presentment for registration of transfer of this Security at
the office or agency of the Company maintained for that purpose in accordance
with the terms of the Indenture, a new Security or Securities of authorized
denominations for an equal aggregate principal amount will be issued to the
transferee in exchange thereof, subject to the limitations provided in the
Indenture, without charge except for any tax, assessment or other governmental
charge imposed in connection therewith.
The Company, the Trustee, any authenticating agent, any paying agent,
any conversion agent and any Security Registrar may deem and treat the
registered holder hereof as the absolute owner of this Security (whether or not
this Security shall be overdue and notwithstanding any notation of ownership or
other writing hereon made by anyone other than the Company or any Security
Registrar) for the purpose of receiving payment hereof, or on account hereof,
for the conversion hereof and for all other purposes, and neither the Company
nor the Trustee nor any other authenticating agent nor any paying agent nor
other conversion agent nor any Security Registrar shall be affected by any
notice to the
A-9
contrary. All payments made to or upon the order of such registered holder
shall, to the extent of the sum or sums paid, satisfy and discharge liability
for monies payable on this Security.
No recourse for the payment of the principal of or any premium or
Interest on this Security, or for any claim based hereon or otherwise in respect
hereof, and no recourse under or upon any obligation, covenant or agreement of
the Company in the Indenture or any supplemental indenture or in any Security,
or because of the creation of any indebtedness represented thereby, shall be had
against any incorporator, stockholder, employee, agent, officer or director or
subsidiary, as such, past, present or future, of the Company or of any successor
corporation, either directly or through the Company or any successor
corporation, whether by virtue of any constitution, statute or rule of law or by
the enforcement of any assessment or penalty or otherwise, all such liability
being, by acceptance hereof and as part of the consideration for the issue
hereof, expressly waived and released.
Terms used in this Security and defined in the Indenture are used
herein as therein defined.
A-10
ABBREVIATIONS
The following abbreviations, when used in the inscription of the face
of this Security, shall be construed as though they were written out in full
according to applicable laws or regulations.
TEN COM - as tenants in common UNIF GIFT MIN ACT-___ Custodian ___
TEN ENT - as tenant by the entireties (Cust) (Minor)
JT TEN - as joint tenants with right of under Uniform Gifts to Minors Act
survivorship and not as tenants in common ____________________________
(State)
Additional abbreviations may also be used though not in the above list.
CONVERSION NOTICE
TO: INPUT/OUTPUT, INC.
THE BANK OF NEW YORK TRUST COMPANY OF FLORIDA, N.A.
The undersigned registered owner of this Security hereby irrevocably
exercises the option to convert this Security, or the portion thereof (which is
$1,000 or a multiple thereof) below designated, into shares of Common Stock of
Input/Output, Inc. in accordance with the terms of the Indenture referred to in
this Security, and directs that the shares issuable and deliverable upon such
conversion, together with any check in payment for fractional shares and any
Securities representing any unconverted principal amount hereof, be issued and
delivered to the registered holder hereof unless a different name has been
indicated below. Capitalized terms used herein but not defined shall have the
meanings ascribed to such terms in the Indenture. If shares or any portion of
this Security not converted are to be issued in the name of a person other than
the undersigned, the undersigned will provide the appropriate information below
and pay all transfer taxes payable with respect thereto. Any amount required to
be paid by the undersigned on account of interest accompanies this Security.
Dated: ______________________
___________________________
___________________________
Signature(s)
Signature(s) must be
guaranteed by an "ELIGIBLE
GUARANTOR INSTITUTION"
meeting the requirements of
the Security Registrar,
which requirements include
membership or participation
in the Security Transfer
Agent Medallion Program
("STAMP") or such other
"SIGNATURE GUARANTEE
PROGRAM" as may be
determined by the Security
Registrar in addition to,
or in substitution for,
STAMP, all in accordance
with the Securities
Exchange Act of 1934, as
amended.
___________________________
Signature Guarantee
Fill in the registration of shares of Common Stock if to be issued, and
Securities if to be delivered, other than to and in the name of the registered
holder:
_______________________________
(Name)
_______________________________
(Street Address)
_______________________________
(City, State and Zip Code)
_______________________________
Please print name and address
Principal amount to be converted
(if less than all):
$______________________________
Social Security or Other Taxpayer
Identification Number:
_______________________________
DESIGNATED EVENT REPURCHASE NOTICE
TO: INPUT/OUTPUT, INC.
THE BANK OF NEW YORK TRUST COMPANY OF FLORIDA, N.A.
The undersigned registered owner of this Security hereby irrevocably
acknowledges receipt of a notice from Input/Output, Inc. (the "COMPANY")
regarding the right of holders to elect to require the Company to repurchase the
Securities upon the occurrence of a Designated Event with respect to the Company
and requests and instructs the Company to repay the entire principal amount of
this Security, or the portion thereof (which is $1,000 or an integral multiple
thereof) below designated, in accordance with the terms of the Indenture at the
price of 100% of such entire principal amount or portion thereof, together with
accrued Interest to, but excluding, the Designated Event Repurchase Date, to the
registered holder hereof. Capitalized terms used herein but not defined shall
have the meanings ascribed to such terms in the Indenture. The Securities (or
the portion thereof) shall be repurchased by the Company, together with accrued
interest to, but excluding, the Designated Event Repurchase Date pursuant to the
terms and conditions specified in the Indenture.
Dated:
Signature(s):
NOTICE: The above signatures of the holder(s) hereof must correspond
with the name as written upon the face of the Security in every particular
without alteration or enlargement or any change whatever.
Security Certificate Number (if applicable):
Principal amount to be repurchased (if less than all):
Social Security or Other Taxpayer Identification Number:
ASSIGNMENT
For value received ______________________________hereby sell(s)
assign(s) and transfer(s) unto ___________________________________ (Please
insert social security or other Taxpayer Identification Number of assignee) the
within Security, and hereby irrevocably constitutes and appoints
______________________________________ attorney to transfer said Security on the
books of the Company, with full power of substitution in the premises.
In connection with any transfer of the Security prior to the expiration
of the holding period applicable to sales thereof under Rule 144(k) under the
Securities Act (or any successor provision), the undersigned confirms that such
Security is being transferred:
[ ] To Input/Output, Inc. or a subsidiary thereof; or
[ ] To a "QUALIFIED INSTITUTIONAL BUYER" in compliance with Rule
144A under the Securities Act of 1933, as amended; or
[ ] Pursuant to and in compliance with Rule 144 under the
Securities Act of 1933, as amended; or
[ ] Pursuant to a Registration Statement which has been declared
effective under the Securities Act of 1933, as amended, and
which continues to be effective at the time of transfer;
and unless the Security has been transferred to Input/Output, Inc. or a
subsidiary thereof, the undersigned confirms that such Security is not being
transferred to an "AFFILIATE" of the Company as defined in Rule 144 under the
Securities Act of 1933, as amended.
Unless one of the boxes is checked, the Trustee will refuse to register
any of the Securities evidenced by this certificate in the name of any person
other than the registered holder thereof.
Dated: ______________________
___________________________
___________________________
Signature(s)
Signature(s) must be
guaranteed by an "ELIGIBLE
GUARANTOR INSTITUTION"
meeting the requirements of
the Security Registrar,
which requirements include
membership or participation
in the Security Transfer
Agent Medallion Program
("STAMP") or such other
"SIGNATURE GUARANTEE
PROGRAM" as may be
determined by the Security
Registrar in addition to,
or in substitution for,
STAMP, all in accordance
with the Securities
Exchange Act of 1934, as
amended.
___________________________
Signature Guarantee
NOTICE: The signature on the Conversion Notice, the Designated Event Repurchase
Notice or the Assignment must correspond with the name as written upon the face
of the Security in every particular without alteration or enlargement or any
change whatever.
Schedule I*
INPUT/OUTPUT, INC.
5.50% CONVERTIBLE SENIOR NOTE DUE 2008
No. _______
Notation Explaining Principal Authorized Signature of
Date Principal Amount Amount Recorded Trustee or Custodian
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* To be included only for a Global Security.