Exhibit 4.5
TERREMARK WORLDWIDE, INC.
and
THE BANK OF NEW YORK TRUST COMPANY, N.A., AS TRUSTEE
--------------------------
INDENTURE
Dated as of June 14, 2004
--------------------------
$75,000,000 PRINCIPAL AMOUNT
9% SENIOR CONVERTIBLE NOTES DUE 2009
TABLE OF CONTENTS
PAGE
----
I DEFINITIONS AND INCORPORATION BY REFERENCE...............................................................4
1.1 DEFINITIONS............................................................................................4
1.2 OTHER DEFINITIONS......................................................................................7
1.3 INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT......................................................8
1.4 RULES OF CONSTRUCTION..................................................................................8
II. THE SECURITIES...........................................................................................9
2.1 FORM AND DATING........................................................................................9
2.2 EXECUTION AND AUTHENTICATION...........................................................................9
2.3 REGISTRAR, PAYING AGENT AND CONVERSION AGENT..........................................................10
2.4 PAYING AGENT TO HOLD MONEY IN TRUST...................................................................10
2.5 SECURITYHOLDER LISTS..................................................................................10
2.6 TRANSFER AND EXCHANGE.................................................................................10
2.7 REPLACEMENT SECURITIES................................................................................11
2.8 OUTSTANDING SECURITIES................................................................................11
2.9 SECURITIES HELD BY THE COMPANY OR AN AFFILIATE........................................................12
2.10 TEMPORARY SECURITIES..................................................................................12
2.11 CANCELLATION..........................................................................................12
2.12 DEFAULTED INTEREST....................................................................................12
2.13 CUSIP NUMBERS.........................................................................................13
2.14 DEPOSIT OF MONEYS.....................................................................................13
2.15 BOOK-ENTRY PROVISIONS FOR GLOBAL SECURITIES...........................................................13
2.16 SPECIAL TRANSFER PROVISIONS...........................................................................14
2.17 RESTRICTIVE LEGENDS...................................................................................15
III. REDEMPTION; REPURCHASE..................................................................................15
3.1 RIGHT OF REDEMPTION, REPURCHASE.......................................................................15
3.2 NOTICES TO TRUSTEE....................................................................................19
3.3 SELECTION OF SECURITIES TO BE REDEEMED................................................................19
3.4 NOTICE OF REDEMPTION..................................................................................19
3.5 EFFECT OF NOTICE OF REDEMPTION........................................................................21
3.6 DEPOSIT OF REDEMPTION PRICE...........................................................................22
3.7 SECURITIES REDEEMED IN PART...........................................................................22
3.8 REPURCHASE AT OPTION OF HOLDER UPON A CHANGE IN CONTROL...............................................22
IV. COVENANTS...............................................................................................27
4.1 PAYMENT OF SECURITIES.................................................................................27
4.2 MAINTENANCE OF OFFICE OR AGENCY.......................................................................27
4.3 RULE 144A INFORMATION AND ANNUAL REPORTS..............................................................28
4.4 COMPLIANCE CERTIFICATE; STATEMENT BY OFFICERS AS TO DEFAULT...........................................28
4.5 STAY, EXTENSION AND USURY LAWS........................................................................28
4.6 CORPORATE EXISTENCE...................................................................................29
4.7 NOTICE OF DEFAULT.....................................................................................29
4.8 FURTHER INSTRUMENTS AND ACTS..........................................................................29
V. SUCCESSORS..............................................................................................29
5.1 WHEN COMPANY MAY MERGE, ETC...........................................................................29
5.2 SUCCESSOR SUBSTITUTED.................................................................................29
A-i
VI. DEFAULTS AND REMEDIES...................................................................................30
6.1 EVENTS OF DEFAULT.....................................................................................30
6.2 ACCELERATION..........................................................................................31
6.3 OTHER REMEDIES........................................................................................31
6.4 WAIVER OF PAST DEFAULTS...............................................................................31
6.5 CONTROL BY MAJORITY...................................................................................32
6.6 LIMITATION ON SUITS...................................................................................32
6.7 RIGHTS OF HOLDERS TO RECEIVE PAYMENT..................................................................32
6.8 COLLECTION SUIT BY TRUSTEE............................................................................33
6.9 TRUSTEE MAY FILE PROOFS OF CLAIM......................................................................33
6.10 PRIORITIES............................................................................................33
6.11 UNDERTAKING FOR COSTS.................................................................................33
VII. TRUSTEE.................................................................................................34
7.1 DUTIES OF TRUSTEE.....................................................................................34
7.2 RIGHTS OF TRUSTEE.....................................................................................35
7.3 INDIVIDUAL RIGHTS OF TRUSTEE..........................................................................36
7.4 TRUSTEE'S DISCLAIMER..................................................................................36
7.5 NOTICE OF DEFAULTS....................................................................................36
7.6 REPORTS BY TRUSTEE TO HOLDER OF THE SECURITIES........................................................36
7.7 COMPENSATION, REIMBURSEMENT AND INDEMNITY.............................................................36
7.8 REPLACEMENT OF TRUSTEE................................................................................37
7.9 SUCCESSOR TRUSTEE BY MERGER, ETC......................................................................38
7.10 ELIGIBILITY; DISQUALIFICATION.........................................................................38
7.11 PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.....................................................38
VIII. DISCHARGE OF INDENTURE..................................................................................38
8.1 TERMINATION OF THE OBLIGATIONS OF THE COMPANY.........................................................38
8.2 APPLICATION OF TRUST MONEY............................................................................39
8.3 REPAYMENT TO COMPANY..................................................................................39
8.4 REINSTATEMENT.........................................................................................39
IX. AMENDMENTS..............................................................................................39
9.1 WITHOUT CONSENT OF HOLDERS............................................................................39
9.2 WITH CONSENT OF HOLDERS...............................................................................40
9.3 COMPLIANCE WITH TRUST INDENTURE ACT...................................................................41
9.4 REVOCATION AND EFFECT OF CONSENTS.....................................................................41
9.5 NOTATION ON OR EXCHANGE OF SECURITIES.................................................................41
9.6 TRUSTEE PROTECTED.....................................................................................42
X. CONVERSION..............................................................................................42
10.1 CONVERSION PRIVILEGE; RESTRICTIVE LEGENDS.............................................................42
10.2 EARLY CONVERSION INCENTIVE PAYMENT....................................................................42
10.3 CONVERSION PROCEDURE..................................................................................43
10.4 FRACTIONAL SHARES.....................................................................................44
10.5 TAXES ON CONVERSION...................................................................................44
10.6 COMPANY TO PROVIDE STOCK..............................................................................44
10.7 ADJUSTMENT OF CONVERSION PRICE........................................................................44
10.8 NO ADJUSTMENT.........................................................................................46
10.9 ADJUSTMENTS FOR TAX PURPOSES..........................................................................47
10.10 NOTICE OF ADJUSTMENT..................................................................................47
10.11 NOTICE OF CERTAIN TRANSACTIONS........................................................................47
A-ii
10.12 EFFECT OF RECLASSIFICATIONS, CONSOLIDATIONS, MERGERS, BINDING SHARE EXCHANGES OR SALES ON
CONVERSION PRIVILEGE...........................................................................47
10.13 TRUSTEE'S DISCLAIMER..................................................................................48
XI. CONTINGENT INTEREST.....................................................................................48
11.1 CONTINGENT INTEREST...................................................................................48
11.2 PAYMENT OF CONTINGENT INTEREST........................................................................49
11.3 CONTINGENT INTEREST NOTIFICATION......................................................................49
XII. MISCELLANEOUS...........................................................................................49
12.1 TRUST INDENTURE ACT CONTROLS..........................................................................49
12.2 NOTICES...............................................................................................49
12.3 COMMUNICATION BY HOLDERS WITH OTHER HOLDERS...........................................................50
12.4 CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT....................................................50
12.5 STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.........................................................50
12.6 RULES BY TRUSTEE AND AGENTS...........................................................................50
12.7 LEGAL HOLIDAYS........................................................................................50
12.8 DUPLICATE ORIGINALS...................................................................................51
12.9 GOVERNING LAW.........................................................................................51
12.10 NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.........................................................51
12.11 SUCCESSORS............................................................................................51
12.12 SEPARABILITY..........................................................................................51
12.13 TABLE OF CONTENTS, HEADINGS, ETC......................................................................51
12.14 CALCULATIONS IN RESPECT OF THE SECURITIES.............................................................52
12.15 FORCE MAJEURE.........................................................................................52
12.16 WAIVER OF JURY TRIAL..................................................................................52
Exhibit A - Form of Global Security
Exhibit B-1 - Form of Private Placement Legend
Exhibit B-2 - Form of Legend for Global Security
Exhibit B-3 - Form of Legend Regarding Registration Rights Agreement
Exhibit C - Form of Notice of Transfer Pursuant to Registration Statement
Exhibit D - Form of Certificate
A-iii
INDENTURE, dated as of June 14, 2004, between Terremark Worldwide,
Inc., a Delaware corporation (the "COMPANY") and The Bank of New York Trust
Company, N.A., a national banking association, as trustee (the "Trustee").
Each party agrees as follows for the benefit of the other party and for
the equal and ratable benefit of the Holders of the Company's 9% Senior
Convertible Notes due 2009 (the "SECURITIES").
I DEFINITIONS AND INCORPORATION BY REFERENCE
1.1 DEFINITIONS.
"ADDITIONAL AMOUNTS" means the Liquidated Damages payable pursuant to
the Registration Rights Agreement.
"AFFILIATE" means any person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company. For
this purpose, "control" shall mean the power to direct the management and
policies of a person through the ownership of securities, by contract or
otherwise.
"BOARD OF DIRECTORS" means the Board of Directors of the Company or any
committee thereof authorized to act for it hereunder.
"BOARD RESOLUTION" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"CAPITAL STOCK" of any Person means any and all shares, interests,
participations or other equivalents (however designated) of capital stock of
such Person and all warrants or options to acquire such capital stock.
"CASH DIVIDEND(S)" means regular, fixed, annual, quarterly or other
periodic cash dividends as declared by the Company's Board of Directors as part
of the Company's dividend payment practice or stated cash dividend policy,
whether publicly announced or not.
"CLOSING SALE PRICE" means the price of a share of Common Stock on the
relevant date, determined (a) on the basis of the closing per share sale price
(or if no closing sale price is reported, the average of the bid and ask prices
or, if more than one in either case, the average of the average bid and the
average ask prices) on such date on the principal national securities exchange
on which the Common Stock is listed; or (b) if the Common Stock is not listed on
a national securities exchange, as reported by the National Association of
Securities Dealers Automated Quotation System; or (c) if not so quoted, as
reported by National Quotation Bureau, Incorporated or a similar organization.
In the absence of such a quotation or report, the Closing Sale Price shall be
such price as the Company shall reasonably determine on the basis of such
quotations as most accurately reflecting the price that a fully informed buyer,
acting on his own accord, would pay to a fully informed seller, acting on his
own accord in an arms-length transaction, for a share of such Common Stock.
"COMMON STOCK" means the common stock, $0.001 par value per share, of
the Company, or such other Capital Stock of the Company into which the Company's
common stock is reclassified or changed.
"COMPANY" means the party named as such above until a successor
replaces it pursuant to the applicable provision hereof and thereafter means the
successor.
"COMPANY ORDER" or "COMPANY REQUEST" means a written request or order
signed on behalf of the Company by its Chairman of the Board, its Chief
Executive Officer, its President, its Chief Operating Officer, its Chief
Financial Officer, any Executive Vice President or any Senior Vice President and
by its Treasurer or an Assistant Treasurer or its Secretary or an Assistant
Secretary, and delivered to the Trustee.
A-4
"CONVERSION PRICE" means $1.25, subject to adjustment as provided in
ARTICLE X.
"CORPORATE TRUST OFFICE OF THE TRUSTEE" shall be at the address of the
Trustee specified in SECTION 12.2 or such other address as the Trustee may give
notice of to the Company.
"DEFAULT" means any event which is, or after notice or passage of time
or both would be, an Event of Default.
"DEPOSITARY" means The Depository Trust Company, its nominees and
successors.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the SEC thereunder.
"HOLDER" or "SECURITYHOLDER" means a person in whose name a Security is
registered on the Registrar's books.
"INDEBTEDNESS" of a person means the principal of, premium, if any, and
interest on, and all other obligations in respect of (a) all indebtedness of
such person for borrowed money (including all indebtedness evidenced by notes,
bonds, debentures or other securities), (b) all obligations (other than trade
payables) incurred by such person in the acquisition (whether by way of
purchase, merger, consolidation or otherwise and whether by such person or
another person) of any business, real property or other assets, (c) all
reimbursement obligations of such person with respect to letters of credit,
bankers' acceptances or similar facilities issued for the account of such
person, (d) all capital lease obligations of such person, (e) all net
obligations of such person under interest rate swap, currency exchange or
similar agreements of such person, (f) all obligations and other liabilities,
contingent or otherwise, under any lease or related document, including a
purchase agreement, conditional sale or other title retention agreement, in
connection with the lease of real property or improvements thereon (or any
personal property included as part of any such lease) which provides that such
person is contractually obligated to purchase or cause a third party to purchase
the leased property or pay an agreed-upon residual value of the leased property,
including such person's obligations under such lease or related document to
purchase or cause a third party to purchase such leased property or pay an
agreed-upon residual value of the leased property to the lessor, (g) guarantees
by such person of indebtedness described in CLAUSES (A) THROUGH (F) of another
person, and (h) all renewals, extensions, refundings, deferrals, restructurings,
amendments and modifications of any indebtedness, obligation, guarantee or
liability of the kind described in CLAUSES (A) THROUGH (G).
"INDENTURE" means this Indenture as amended or supplemented from time
to time.
"INITIAL PURCHASER" means McMahan Securities Co. L.P.
The term "INTEREST" includes Contingent Interest and Additional
Amounts, if any, unless the context otherwise requires.
"ISSUE DATE" means June 14, 2004.
"LIEN" means any lien, mortgage, deed of trust, pledge, security
interest, charge or encumbrance of any kind.
"MATURITY DATE" means June 15, 2009.
"OFFICER" of a Person means the Chairman of the Board, the Chief
Executive Officer, the President, the Chief Operating Officer, the Chief
Financial Officer, any Vice President, the Treasurer or the Secretary of such
Person.
"OFFICERS' CERTIFICATE" means a certificate signed by two (2) Officers
A-5
of the Company or by an Officer and an Assistant Treasurer or an Assistant
Secretary of the Company.
"OPINION OF COUNSEL" means a written opinion from legal counsel who may
be an employee of or counsel for the Company, or other counsel reasonably
acceptable to the Trustee.
"OPTION" means the Initial Purchaser's option to acquire up to
$11,250,000 aggregate principal amount of additional Securities ("ADDITIONAL
SECURITIES") as provided for in the Purchase Agreement.
"PERSON" or "PERSON" means any individual, corporation, partnership,
limited liability company, joint venture, association, joint-stock company,
trust, unincorporated organization or government or other agency or political
subdivision thereof.
The term "PREMIUM" includes any Make-Whole Payment and Make-Whole
Premium, unless the context otherwise requires.
"PURCHASE AGREEMENT" means the Purchase Agreement dated June 9, 2004
between the Company and the Initial Purchaser.
"PURCHASE NOTICE" means a Purchase Notice in the form set forth in the
Securities.
"QIB" means a "qualified institutional buyer" within the meaning of
Rule 144A under the Securities Act.
"REDEMPTION" means a Provisional Redemption.
"REDEMPTION DATE" means the date specified for Provisional Redemption
of the Securities in accordance with the terms of the Securities and this
Indenture.
"REDEMPTION PRICE" shall equal, with respect to a Security redeemed
during the twelve (12) month period commencing on June 15 of the years set forth
below by the Company in accordance with ARTICLE III (expressed as a percentage
of the principal amount):
YEAR REDEMPTION PRICE
---- ----------------
2007 104.50%
2008 and thereafter 102.25%
"REGISTRATION DATE" has the meaning ascribed to it in the Registration
Rights Agreement.
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights
Agreement, dated as of the date hereof, among the Company and the Initial
Purchaser.
"REGISTRATION STATEMENT" has the meaning ascribed to it in the
Registration Rights Agreement.
"RESPONSIBLE OFFICER" means, when used with respect to the Trustee, any
officer within the corporate trust department of the Trustee, including any vice
president, assistant vice president, assistant secretary, assistant treasurer,
trust officer or any other officer of the Trustee who customarily performs
functions similar to those performed by the Persons who at the time shall be
such officers, respectively, or to whom any corporate trust matter is referred
because of such person's knowledge of and familiarity with the particular
subject and who shall have direct responsibility for the administration of this
Indenture.
"RESTRICTED SECURITY" means a Security that constitutes a "restricted
security" within the meaning of Rule 144(a)(3) under the Securities Act;
provided, however, that the Trustee shall be entitled to request and
conclusively rely on an Opinion of Counsel with respect to whether any Security
constitutes a Restricted Security.
A-6
"RULE 144A" means Rule 144A under the Securities Act.
"SEC" means the Securities and Exchange Commission.
"SECURITIES" means the 9% Senior Convertible Notes due 2009 issued by
the Company pursuant to this Indenture.
"SECURITIES ACT" means the Securities Act of 1933, as amended, and the
rules and regulations of the SEC thereunder.
"SECURITY AGENT" means any Registrar, Paying Agent, Conversion Agent or
co-Registrar or co-agent.
"SUBSIDIARY" means (i) a corporation a majority of whose Capital Stock
with voting power, under ordinary circumstances, to elect directors is at the
time, directly or indirectly, owned by the Company, by one or more subsidiaries
of the Company or by the Company and one or more of its subsidiaries or (ii) any
other person (other than a corporation) in which the Company, one or more its
subsidiaries or the Company and one or more its subsidiaries, directly or
indirectly, at the date of determination thereof, have at least majority
ownership interest.
"TIA" means the Trust Indenture Act of 1939 as amended and in effect
from time to time.
"TRADING DAY" means a day during which trading in securities generally
occurs on the principal national or regional securities exchange in the United
States on which the Common Stock is then listed or, if the Common Stock is not
listed on a national or regional securities exchange in the United States, on
the National Association of Securities Dealers Automated Quotation System or, if
the Common Stock is not quoted on the National Association of Securities Dealers
Automated Quotation System, on the principal other market on which the Common
Stock is then traded.
"TRUSTEE" means the party named as such in this Indenture until a
successor replaces it in accordance with the provisions hereof and thereafter
means the successor.
"VOTING STOCK" of any Person means the total voting power of all
classes of the Capital Stock of such Person entitled to vote generally in the
election of directors of such Person.
1.2 OTHER DEFINITIONS.
TERM DEFINED IN SECTION
---- ------------------
"Average 5-Day Closing Sale Price" 3.1
"Bankruptcy Law" 6.1
"Business Day" 12.7
"Change in Control Notice" 3.8
"Contingent Interest" 11.1
"Conversion Agent" 2.3
"Custodian" 6.1
"Early Conversion Incentive Payment" 10.2
"Global Security" 2.1
"Legal Holiday" 12.7
"Make-Whole Payment" 3.1
"Notice Date" 3.1
"Participants" 2.15
"Paying Agent" 2.3
"Physical Securities" 2.1
"Private Placement Legend" 2.17
A-7
"Provisional Redemption" 3.1
"Registrar" 2.3
"Repurchase at Holder's Option Upon a Change in 3.1
Control"
"Repurchase Date" 3.8
"Repurchase Price" 3.8
"Repurchase Right" 3.8
"Resale Restriction Termination Date" 2.17
1.3 INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
Whenever this Indenture refers to a provision of the TIA, the provision
is incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"COMMISSION" means the SEC;
"INDENTURE SECURITIES" means the Securities;
"INDENTURE SECURITY HOLDER" means a Securityholder or a Holder;
"INDENTURE TO BE QUALIFIED" means this Indenture;
"INDENTURE TRUSTEE" or "INSTITUTIONAL TRUSTEE" means the Trustee; and
"OBLIGOR" on the indenture securities means the Company (or any
successor).
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule under the TIA
and not otherwise defined herein have the meanings so assigned to them.
1.4 RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(i) a term has the meaning assigned to it;
(ii) an accounting term not otherwise defined has the meaning assigned
to it in accordance with generally accepted accounting principles in
effect from time to time;
(iii) "or" is not exclusive;
(iv) words in the singular include the plural and in the plural include
the singular;
(v) provisions apply to successive events and transactions;
(vi) "herein," "hereof" and other words of similar import refer to this
Indenture as a whole and not to any particular Article, Section or
other subdivision; and
(vii) references to currency shall mean the lawful currency of the
United States of America, unless the context requires otherwise.
A-8
II. THE SECURITIES
2.1 FORM AND DATING.
The Securities and the Trustee's certificate of authentication shall be
substantially in the form set forth in EXHIBIT A, which is incorporated in and
forms a part of this Indenture. The Securities may have notations, legends or
endorsements required by law, stock exchange rule or usage. Each Security shall
be dated the date of its authentication.
Securities offered and sold in reliance on Rule 144A shall be issued
initially in the form of one or more Global Securities, substantially in the
form set forth in EXHIBIT A (the "GLOBAL SECURITY"), deposited with the Trustee,
as custodian for the Depositary, duly executed by the Company and authenticated
by the Trustee as hereinafter provided and bearing the legends set forth in
EXHIBITS B-1 and B-2. The aggregate principal amount of the Global Security may
from time to time be increased or decreased by adjustments made on the records
of the Trustee, as custodian for the Depositary, as hereinafter provided;
provided, that in no event shall the aggregate principal amount of the Global
Security or Securities exceed $75,000,000 (or $86,250,000 if the Initial
Purchaser elects to purchase all of the Additional Securities pursuant to the
Option).
Securities issued in exchange for interests in a Global Security
pursuant to SECTION 2.15 may be issued in the form of permanent certificated
Securities in registered form in substantially the form set forth in EXHIBIT A
(the "PHYSICAL SECURITIES") and, if applicable, bearing any legends required by
SECTION 2.17.
The Securities shall bear the legends set forth in EXHIBIT B-3.
2.2 EXECUTION AND AUTHENTICATION.
One Officer shall sign the Securities for the Company by manual or
facsimile signature. If an Officer whose signature is on a Security no longer
holds that office at the time the Security is authenticated, the Security shall
nevertheless be valid. A Security shall not be valid until authenticated by the
manual signature of the Trustee. The signature shall be conclusive evidence that
the Security has been authenticated under this Indenture. Upon a written order
of the Company signed by two (2) Officers of the Company, the Trustee shall
authenticate Securities for original issue in the aggregate principal amount of
$75,000,000 and such additional principal amount, if any, as shall be determined
pursuant to the next sentence of this SECTION 2.2. Upon receipt by the Trustee
of a written order stating that the Initial Purchaser has elected to purchase
from the Company a specified principal amount of Additional Securities, not to
exceed $11,250,000, pursuant to the Option, the Trustee shall authenticate and
deliver such specified principal amount of Additional Securities to or upon the
written order of the Company signed as provided in the immediately preceding
sentence. Such written order must be received by the Trustee not later than the
proposed date for delivering of such Additional Securities. The aggregate
principal amount of Securities outstanding at any time may not exceed
$75,000,000 except as provided in this SECTION 2.2.
Upon a written order of the Company signed by two (2) Officers of the
Company, the Trustee shall authenticate Securities not bearing the Private
Placement Legend to be issued to the transferee when sold pursuant to an
effective Registration Statement under the Securities Act as set forth in
SECTION 2.16(b).
The Trustee shall act as the initial authenticating agent. Thereafter,
the Trustee may appoint an authenticating agent acceptable to the Company to
authenticate Securities. An authenticating agent may authenticate Securities
whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such authenticating
agent. An authenticating agent has the same rights as a Security Agent to deal
with the Company and its Affiliates.
A-9
If a written order of the Company pursuant to this SECTION 2.2 has
been, or simultaneously is, delivered, any instructions by the Company to the
Trustee with respect to endorsement, delivery or redelivery of a Security issued
in global form shall be in writing but need not comply with SECTION 12.4 hereof
and need not be accompanied by an Opinion of Counsel.
The Securities shall be issuable only in registered form without
interest coupons and only in denominations of $1,000 principal amount and any
integral multiple thereof.
2.3 REGISTRAR, PAYING AGENT AND CONVERSION AGENT.
The Company shall maintain an office or agency in the Borough of
Manhattan, The City of New York, where Securities may be presented for
registration of transfer or for exchange ("REGISTRAR"), an office or agency in
the Borough of Manhattan, The City of New York, where Securities may be
presented for payment ("PAYING AGENT") and an office or agency in the Borough of
Manhattan, The City of New York, where Securities may be presented for
conversion ("CONVERSION AGENT"). The Registrar shall keep a register of the
Securities and of their transfer and exchange. The Company may appoint or change
one or more co-Registrars, one or more additional paying agents and one or more
additional conversion agents without notice and may act in any such capacity on
its own behalf. The term "Registrar" includes any co-Registrar; the term "Paying
Agent" includes any additional paying agent; and the term "Conversion Agent"
includes any additional conversion agent.
The Company shall enter into an appropriate agency agreement with any
Security Agent not a party to this Indenture. The agreement shall implement the
provisions of this Indenture that relate to such Security Agent. The Company
shall notify the Trustee in writing of the name and address of any Security
Agent not a party to this Indenture. If the Company fails to maintain a
Registrar, Paying Agent or Conversion Agent, the Trustee shall act as such.
The Company initially appoints the Trustee as Paying Agent, Registrar
and Conversion Agent.
2.4 PAYING AGENT TO HOLD MONEY IN TRUST.
Each Paying Agent shall hold in trust for the benefit of the
Securityholders or the Trustee all moneys held by the Paying Agent for the
payment of the Securities, and shall notify the Trustee of any Default by the
Company in making any such payment. While any such Default continues, the
Trustee may require a Paying Agent to pay all money held by it to the Trustee.
The Company at any time may require a Paying Agent to pay all money held by it
to the Trustee. Upon payment over to the Trustee, the Paying Agent shall have no
further liability for the money. If the Company acts as Paying Agent, it shall
segregate and hold as a separate trust fund all money held by it as Paying
Agent.
2.5 SECURITYHOLDER LISTS.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Securityholders. If the Trustee is not the Registrar, the Company shall furnish
to the Trustee on or before each interest payment date and at such other times
as the Trustee may request in writing a list, in such form and as of such date
as the Trustee may reasonably require, of the names and addresses of
Securityholders.
2.6 TRANSFER AND EXCHANGE.
Subject to SECTIONS 2.15 and 2.16 hereof, when Securities are presented
to the Registrar with a request to register their transfer or to exchange them
for an equal principal amount of Securities of other authorized denominations,
the Registrar shall register the transfer or make the exchange if its
requirements for such transaction are met. To permit registrations of transfer
and exchanges, the Trustee shall authenticate Securities at the Registrar's
request. The Company, the Trustee and the Registrar shall not be required to
register the transfer of or exchange any Security (i) during a period beginning
A-10
at the opening of business fifteen (15) days before the mailing of a notice of
redemption of the Securities selected for Redemption under SECTION 3.4 and
ending at the close of business on the day of such mailing or (ii) that has been
selected for Repurchase or for which a Purchase Notice has been delivered, and
not withdrawn, in accordance with this Indenture, except the unredeemed or
unrepurchased portion of Securities being redeemed or repurchased in part.
No service charge shall be made for any transfer, exchange or
conversion of Securities, but the Company may require payment of a sum
sufficient to cover any transfer tax or similar governmental charge that may be
imposed in connection with any transfer, exchange or conversion of Securities,
other than exchanges pursuant to SECTIONS 2.10, 9.5 or 10.3, or ARTICLE III, not
involving any transfer.
2.7 REPLACEMENT SECURITIES.
If the Holder of a Security claims that the Security has been
mutilated, lost, destroyed or wrongfully taken, the Company shall issue and the
Trustee shall authenticate a replacement Security upon surrender to the Trustee
of the mutilated Security, or upon delivery to the Trustee of evidence of the
loss, destruction or theft of the Security satisfactory to the Trustee and the
Company. In the case of lost, destroyed or wrongfully taken Securities, an
indemnity bond must be provided by the Holder that is reasonably satisfactory to
the Trustee and the Company to protect the Company, the Trustee or any Security
Agent from any loss which any of them may suffer if a Security is replaced. The
Trustee may charge for its expenses in replacing a Security.
In case any such mutilated, lost, destroyed or wrongfully taken
Security has become or is about to become due and payable, the Company in its
discretion may, instead of issuing a new Security, pay such Security when due.
Every replacement Security is an additional obligation of the Company
only as provided in SECTION 2.8.
2.8 OUTSTANDING SECURITIES.
Securities outstanding at any time are all the Securities authenticated
by the Trustee except for those converted, those cancelled by it, those
delivered to it for cancellation, those paid pursuant to SECTION 2.7 and those
described in this SECTION 2.8 as not outstanding. Except to the extent provided
in SECTION 2.9, a Security does not cease to be outstanding because the Company
or one of its Subsidiaries or Affiliates holds the Security.
If a Security is replaced pursuant to SECTION 2.7, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it, or a court
holds, that the replaced Security is held by a protected purchaser.
If the Paying Agent (other than the Company) holds on a Redemption
Date, Repurchase Date or Maturity Date, money (and, if applicable as provided
herein and in accordance herewith, shares of Common Stock) sufficient to pay the
aggregate Redemption Price, Repurchase Price or principal amount, as the case
may be, with respect to all Securities to be redeemed, purchased or paid upon
Redemption, Repurchase Upon Change in Control or maturity, as the case may be,
in each case plus, if applicable, accrued and unpaid interest (including
Contingent Interest and Additional Amounts), if any, and, if applicable, any
Make-Whole Payment or Make-Whole Premium, payable as herein provided upon
Redemption, Repurchase Upon Change in Control or maturity, then (unless there
shall be a Default in the payment of such aggregate Redemption Price, Repurchase
Price or principal amount, or of such accrued and unpaid interest, Make-Whole
Payment or Make-Whole Premium, or, in the case of a Provisional Redemption on a
Redemption Date that is also an interest payment date, a Default in the payment
of the accrued and unpaid interest, if any, to, but excluding, the Redemption
Date to the Holder of record of such Security at the close of business on the
record date for such interest payment) on and after such date such Securities
shall be deemed to be no longer outstanding, interest on such Securities shall
cease to accrue, and such Securities shall be deemed paid whether or not such
Securities are delivered to the Paying Agent.
A-11
Thereafter, all rights of the Holders of such Securities shall terminate with
respect to such Securities, other than the right to receive the Redemption
Price, Repurchase Price or principal amount, as the case may be, plus, if
applicable, such accrued and unpaid interest (including Contingent Interest and
Additional Amounts, if any), Make-Whole Payment and Make-Whole Premium, in
accordance with this Indenture.
If a Security is converted in accordance with ARTICLE X, then, from and
after the time of such conversion on the Conversion Date, such Security shall
cease to be outstanding, and interest, if any, shall cease to accrue on such
Security; provided, however, that nothing in this paragraph shall affect the
provision in the Registration Rights Agreement for additional interest on shares
of Common Stock issued upon conversion of such Security.
2.9 SECURITIES HELD BY THE COMPANY OR AN AFFILIATE.
In determining whether the Holders of the required aggregate principal
amount of Securities have concurred in any direction, waiver or consent,
Securities owned by the Company or any of its Subsidiaries or Affiliates shall
be considered as though not outstanding, except that, for the purposes of
determining whether a Responsible Officer of the Trustee shall be protected in
relying on any such direction, waiver or consent, only Securities which a
Responsible Officer the Trustee actually knows are so owned shall be so
disregarded. Securities so owned which have been pledged in good faith may be
considered to be outstanding for purposes of this SECTION 2.9 if the pledgee
establishes, to the satisfaction of the Trustee, the pledgee's right so to
concur with respect to such Securities and that the pledgee is not, and is not
acting at the direction or on behalf of, the Company, any other obligor on the
Securities, an Affiliate of the Company or any such other obligor. In the event
of a dispute as to whether the pledgee has established the foregoing, the
Trustee may conclusively rely on the advice of counsel or on an Officers'
Certificate.
2.10 TEMPORARY SECURITIES.
Until definitive Securities are ready for delivery, the Company may
prepare and the Trustee shall authenticate temporary Securities. Temporary
Securities shall be substantially in the form of definitive Securities but may
have variations that the Company considers appropriate for temporary Securities.
Without unreasonable delay, the Company shall prepare and the Trustee shall
authenticate definitive Securities in exchange for such temporary Securities.
2.11 CANCELLATION.
The Company at any time may deliver Securities to the Trustee for
cancellation. The Registrar, Paying Agent and Conversion Agent shall forward to
the Trustee any Securities surrendered to them for transfer, exchange, payment
or conversion. The Trustee shall promptly cancel all Securities surrendered for
transfer, exchange, payment, conversion or cancellation in accordance with its
customary procedures. The Company may not issue new Securities to replace
Securities that it has paid or delivered to the Trustee for cancellation or that
any Securityholder has converted pursuant to ARTICLE X.
2.12 DEFAULTED INTEREST.
If and to the extent the Company defaults in a payment of interest on
the Securities, the Company shall pay the defaulted interest in any lawful
manner plus, to the extent not prohibited by applicable statute or case law,
interest on such defaulted interest at the rate provided in the Securities. The
Company may pay the defaulted interest (plus interest on such defaulted
interest) to the persons who are Securityholders on a subsequent special record
date. The Company shall fix such record date and payment date. At least fifteen
(15) calendar days before the record date, the Company shall mail to
Securityholders a notice that states the record date, payment date and amount of
interest to be paid.
A-12
2.13 CUSIP NUMBERS.
The Company in issuing the Securities may use one or more "CUSIP"
numbers, and, if so, the Trustee shall use the CUSIP numbers in notices of
redemption or exchange as a convenience to Holders; provided, however, that no
representation is hereby deemed to be made by the Trustee as to the correctness
or accuracy of the CUSIP numbers printed on the notice or on the Securities;
provided further, that reliance may be placed only on the other identification
numbers printed on the Securities, and the effectiveness of any such notice
shall not be affected by any defect in, or omission of, such CUSIP numbers. The
Company shall promptly notify the Trustee in writing of any change in the CUSIP
numbers.
2.14 DEPOSIT OF MONEYS.
Prior to 10:00 A.M., New York City time, on each interest payment date,
Maturity Date, Redemption Date or Repurchase Date, the Company shall deposit
with a Paying Agent (or, if the Company is acting as its own Paying Agent,
segregate and hold in trust in accordance with SECTION 2.4) money, in funds
immediately available on such date, (and, if applicable as provided herein and
in accordance herewith, shares of Common Stock) sufficient to make cash
payments, if any, due on such interest payment date, Maturity Date, Redemption
Date or Repurchase Date, as the case may be, in a timely manner which permits
the Paying Agent to remit payment to the Holders on such interest payment date,
Maturity Date, Redemption Date or Repurchase Date, as the case may be.
2.15 BOOK-ENTRY PROVISIONS FOR GLOBAL SECURITIES.
(a) The Global Securities initially shall (i) be registered in the name
of the Depositary or the nominee of such Depositary, (ii) be delivered to the
Trustee as custodian for such Depositary and (iii) bear legends as set forth in
SECTION 2.17.
Members of, or participants in, the Depositary ("PARTICIPANTS") shall
have no rights under this Indenture with respect to any Global Security held on
their behalf by the Depositary, or the Trustee as its custodian, or under the
Global Security, and the Depositary may be treated by the Company, the Trustee
and any agent of the Company or the Trustee as the absolute owner of the Global
Security for all purposes whatsoever. Notwithstanding the foregoing, nothing
herein shall prevent the Company, the Trustee or any agent of the Company or the
Trustee from giving effect to any written certification, proxy or other
authorization furnished by the Depositary or impair, as between the Depositary
and Participants, the operation of customary practices governing the exercise of
the rights of a Holder of any Security.
(b) Transfers of Global Securities shall be limited to transfers in
whole, but not in part, to the Depositary, its successors or their respective
nominees. In addition, Physical Securities shall be transferred to all
beneficial owners, as identified by the Depositary, in exchange for their
beneficial interests in Global Securities only if (i) the Depositary notifies
the Company that the Depositary is unwilling or unable to continue as depositary
for any Global Security (or the Depositary ceases to be a "clearing agency"
registered under Section 17A of the Exchange Act) and a successor Depositary is
not appointed by the Company within ninety (90) days of such notice or cessation
or (ii) an Event of Default has occurred and is continuing and the Registrar has
received a written request from the Depositary to issue Physical Securities.
(c) In connection with the transfer of a Global Security in its
entirety to beneficial owners pursuant to SECTION 2.15(b), such Global Security
shall be deemed to be surrendered to the Trustee for cancellation, and the
Company shall execute, and the Trustee shall upon written instructions from the
Company authenticate and deliver, to each beneficial owner identified by the
Depositary in exchange for its beneficial interest in such Global Security, an
equal aggregate principal amount of Physical Securities of authorized
denominations.
(d) Any Physical Security constituting a Restricted Security delivered
in exchange for an interest in a Global Security pursuant to SECTION 2.15(b)
shall, except as otherwise provided by SECTION 2.16, bear the Private Placement
Legend.
A-13
(e) The Holder of any Global Security may grant proxies and otherwise
authorize any Person, including Participants and Persons that may hold interests
through Participants, to take any action which a Holder is entitled to take
under this Indenture or the Securities.
2.16 SPECIAL TRANSFER PROVISIONS.
(a) RESTRICTIONS ON TRANSFER AND EXCHANGE OF GLOBAL SECURITIES.
Notwithstanding any other provisions of this Indenture, but except as provided
in SECTION 2.15(b), a Global Security may not be transferred except as a whole
by the Depositary to a nominee of the Depositary or by a nominee of the
Depositary to the Depositary or another nominee of the Depositary or by the
Depositary or any such nominee to a successor Depositary or a nominee of such
successor Depositary.
(b) PRIVATE PLACEMENT LEGEND. Upon the transfer, exchange or
replacement of Securities not bearing the Private Placement Legend, the
Registrar or co-Registrar shall deliver Securities that do not bear the Private
Placement Legend. Upon the transfer, exchange or replacement of Securities
bearing the Private Placement Legend, the Registrar or co-Registrar shall
deliver only Securities that bear the Private Placement Legend unless (i) the
requested transfer is after the Resale Restriction Termination Date, (ii) there
is delivered to the Trustee and the Company an opinion of counsel reasonably
satisfactory to the Company and addressed to the Company to the effect that
neither such legend nor the related restrictions on transfer are required in
order to maintain compliance with the provisions of the Securities Act or (iii)
such Security has been sold pursuant to an effective Registration Statement
under the Securities Act and the Holder that sold such Securities has delivered
to the Registrar or co-Registrar a notice in the form of EXHIBIT C hereto. Upon
the effectiveness, under the Securities Act, of a Registration Statement, the
Company shall deliver to the Trustee a notice of effectiveness, a Global
Security or Global Securities, which do not bear the Private Placement Legend,
an authentication order in accordance with SECTION 2.2 and an Opinion of Counsel
in a form reasonably satisfactory to the Trustee, and, if required by the
Depositary, the Company shall deliver to the Depositary a letter of
representations in a form reasonably acceptable to the Depositary. Upon the
effectiveness of any post-effective amendment to the Registration Statement and
upon the effectiveness, under the Securities Act, of any subsequent Registration
Statement, the Company shall deliver to the Trustee a notice of effectiveness
and an Opinion of Counsel in a form reasonably satisfactory to the Trustee. Upon
any sale, pursuant to a Registration Statement, of a beneficial interest in a
Global Security that theretofore constituted a Restricted Security and delivery
of appropriate evidence thereof to the Trustee, and upon any sale or transfer of
a beneficial interest in connection with which the Private Placement Legend will
be removed in accordance with this Indenture, the Trustee shall increase the
principal amount of the Global Security that does not constitute a Restricted
Security by the principal amount of such sale or transfer and likewise reduce
the principal amount of the Global Security that does constitute a Restricted
Security.
(c) GENERAL. By its acceptance of any Security bearing the Private
Placement Legend, each Holder of such a Security acknowledges the restrictions
on transfer of such Security set forth in this Indenture and in the Private
Placement Legend and agrees that it will transfer such Security only as provided
in this Indenture.
The Registrar shall retain copies of all letters, notices and other
written communications received pursuant to SECTION 2.15 or this SECTION 2.16.
The Company shall have the right to inspect and make copies of all such letters,
notices or other written communications at any reasonable time upon the giving
of reasonable written notice to the Registrar.
Each Holder of a Security agrees to indemnify the Company and the
Trustee against any liability that may result from the transfer, exchange or
assignment of such Holder's Security in violation of any provision of this
Indenture and/or applicable United States federal or state securities law.
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 Depositary
Participants or beneficial owners of interests in any Global Security) other
than to require delivery of such certificates and other documentation or
A-14
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.
Neither the Trustee nor any Security Agent shall have any
responsibility for any actions taken or not taken by the Depositary.
(d) TRANSFERS OF SECURITIES HELD BY AFFILIATES. Any certificate (i)
evidencing a Security that has been transferred to an Affiliate within two (2)
years after the Issue Date, as evidenced by a notation on the assignment form
for such transfer or in the representation letter delivered in respect thereof
or (ii) evidencing a Security that has been acquired from an Affiliate (other
than by an Affiliate) in a transaction or a chain of transactions not involving
any public offering, shall, until two (2) years after the last date on which the
Company or any of its Affiliates was an owner of such Security (or such longer
period of time as may be required under the Securities Act or applicable state
securities laws), in each case, bear the Private Placement Legend, unless
otherwise agreed by the Company (with written notice thereof to the Trustee).
2.17 RESTRICTIVE LEGENDS.
Each Global Security and Physical Security that constitutes a
Restricted Security shall bear the legend (the "PRIVATE PLACEMENT LEGEND") as
set forth in EXHIBIT B-1 on the face thereof until after the second anniversary
of the later of (i) the Issue Date and (ii) the last date on which the Company
or any Affiliate was the owner of such Security (or any predecessor security)
(or such shorter period of time as permitted by Rule 144(k) under the Securities
Act or any successor provision thereunder) (or such longer period of time as may
be required under the Securities Act or applicable state securities laws, as set
forth in an Opinion of Counsel, unless otherwise agreed between the Company and
the Holder thereof) (such date, the "RESALE RESTRICTION TERMINATION DATE").
Each Global Security shall also bear the legend as set forth in EXHIBIT
B-2.
III. REDEMPTION; REPURCHASE
3.1 RIGHT OF REDEMPTION, REPURCHASE.
(a) Redemption or repurchase of the Securities, as permitted by any
provision of this Indenture, shall be made (i) with respect to a Redemption at
the Company's option, in accordance with PARAGRAPHS 6 AND 7 of the Securities
and (ii) with respect to a repurchase at the Holder's option, in accordance with
PARAGRAPH 8 of the Securities (a "REPURCHASE AT HOLDER'S OPTION UPON A CHANGE IN
CONTROL"), in each case in accordance with the applicable provisions of this
ARTICLE III.
(b) The Company will comply with all federal and state securities laws,
and the applicable laws of any foreign jurisdiction, in connection with any
offer to sell or solicitations of offers to buy Securities pursuant to this
ARTICLE III.
(c)(i) The Company shall have the right, at the Company's option, at
any time, and from time to time, on a Redemption Date on or after June 15, 2007,
to redeem (a "PROVISIONAL REDEMPTION") all or any part of the Securities at a
price equal to the Redemption Price plus the Make-Whole Payment if:
(a) for each of at least twenty (20) Trading Days in any
consecutive thirty (30) Trading Days ending on, and including,
the Trading Day immediately preceding the date (the "NOTICE
DATE") of mailing of the notice of Provisional Redemption as
provided in SECTION 3.4, the Closing Sale Price exceeds two
hundred percent (200%) of the Conversion Price in effect on
such Trading Day;
A-15
(b) on the Redemption Date and for a period of at least thirty
(30) days thereafter, a Registration Statement covering the
Securities and the shares of Common Stock issuable upon
conversion of the Securities is effective and available for
use; and
(c) no continuing Default or Event of Default exists that has
not been cured or waived, in accordance herewith, on or before
such Redemption Date.
(ii) As used herein, the "MAKE-WHOLE PAYMENT" with respect to a
Security subject to a Provisional Redemption on a Redemption Date shall
mean an amount equal to the sum of: (a) fifty percent (50%) of all
remaining scheduled interest payments on such Security from, and
including, such Redemption Date through the Maturity Date; (b) any
defaulted interest that the Company shall have failed to pay with
respect to such Security on or prior to such Redemption Date, including
any unpaid interest that has accrued (including Contingent Interest, if
any), in accordance with SECTION 2.12, to, and including, such
Redemption Date on any such defaulted interest; (c) any unpaid
additional interest that has accrued with respect to such Security to,
but excluding, such Redemption Date. As soon as practicable after the
time the amount of the Make-Whole Payment shall have been calculated,
but no later than the second (2nd) Business Day immediately preceding
such Redemption Date, the Company shall publicly disseminate the amount
of the Make-Whole Payment in a press release or publish it on the
Company's website. The Make-Whole Payment shall be paid by the Company
on all Securities called for Provisional Redemption, including, without
limitation, any Securities that have been converted into shares of
Common Stock on or after the Notice Date and before such Redemption
Date. In no event shall the Make-Whole Payment with respect to a
Security that is called for Provisional Redemption be reduced by any
amount of accrued and unpaid interest; provided, however, that in the
event such Redemption Date is an interest payment date, then the
Make-Whole Payment shall be reduced by any accrued and unpaid interest
to, and including, the Redemption Date, which accrued and unpaid
interest shall instead be paid by the Company on the Redemption Date to
the Holder of record of such Security at the close of business on the
record date for such interest payment. In no event shall a Holder that
has converted, in accordance herewith, such Holder's Security into
shares of Common Stock, which Security has been called for Provisional
Redemption, be required to surrender any such shares of Common Stock in
order to be entitled to receive the Make-Whole Payment with respect to
such Security.
(iii) The Make-Whole Payment may be paid for, in whole or in part, at
the election of the Company, in cash or shares of Common Stock or in
any combination of cash and shares of Common Stock; provided, however,
that:
(a) no portion of the Make-Whole Payment shall be paid in
shares of Common Stock unless the conditions set forth in
SECTION 3.1(c)(ix) are satisfied;
(b) the Redemption Price shall be exclusively paid in cash;
and
(c) the Company will not issue fractional shares of Common
Stock in payment of the Make-Whole Payment and shall instead
deliver a check in an amount equal to the value of such
fraction computed on the basis of the Closing Sale Price on
the Trading Day immediately before the Redemption Date.
(iv) Except as provided in this SECTION 3.1(c), once the Company has
mailed the notice of Provisional Redemption specified in SECTION 3.4,
the Company shall not change its election set forth in such notice
pursuant SECTION 3.4(viii) with respect to the portion of the
Make-Whole Payment to be paid in cash or shares of Common Stock.
(v) Except as otherwise provided in this SECTION 3.1(c), each Holder
whose Securities are redeemed pursuant to a Provisional Redemption
shall receive the same percentage of cash and of shares of Common Stock
in payment of the Make-Whole Payment for such Securities.
A-16
(vi) The portion of the Make-Whole Payment to be paid in shares of
Common Stock, if payment in shares of Common Stock is permitted
pursuant to this SECTION 3.1(c), shall be paid by the issuance of a
number of shares of Common Stock equal to a fraction:
(a) whose numerator is the dollar amount of such portion of
the Make-Whole Payment (excluding the amounts specified in
SECTION 3.1(c)(iii)(c)) to be paid in shares of Common Stock;
and
(b) whose denominator is the product of (I) the average (the
"AVERAGE 5-DAY CLOSING SALE PRICE") of the Closing Sale Prices
for the five (5) consecutive Trading Days ending on, and
including, the third (3rd) Trading Day prior to the Redemption
Date, which average shall be appropriately adjusted in the
good faith determination of the Board of Directors (whose
determination shall be described in a Board Resolution) to
account for the occurrence, during such five (5) Trading Day
period, of a stock split, stock dividend or a subdivision or
combination of the Company's common stock; and (II) ninety
five percent (95%); provided, however, that fractional shares
of Common Stock shall be paid in cash as provided in SECTION
3.1(c)(iii)(c). Upon the determination of such Average 5-Day
Closing Sale Price, but in no event later than the Redemption
Date, the Company shall publicly disseminate in a press
release or publish on the Company's website the amount of such
Average 5-Day Closing Sale Price and the actual number of
shares of Common Stock to be delivered as provided in this
SECTION 3.1(c) in full or partial payment of the Make-Whole
Payment.
(vii) All shares of Common Stock delivered as full or partial payment
of the Make-Whole Payment pursuant to this SECTION 3.1(c) shall be
newly issued shares or treasury shares, shall be duly authorized,
validly issued, fully paid and non-assessable and shall be free from
preemptive rights and free of any lien or adverse claim.
(viii) If a Holder is paid in shares of Common Stock as full or partial
payment of the Make-Whole Payment pursuant to this SECTION 3.1(c), the
Company shall pay any documentary, stamp or similar issue or transfer
tax due on such issue of Common Stock. However, the Holder shall pay
any such tax which is due because the Holder requests the Common Stock
to be issued in a name other than the Holder's name. The Paying Agent
may refuse to deliver the certificates representing the shares of
Common Stock being issued in a name other than the Holder's name until
the Paying Agent receives a sum sufficient to pay any tax which will be
due because the shares of Common Stock are to be issued in a name other
than the Holder's name. Nothing herein shall preclude any income tax
withholding required by law or regulations.
(ix) The Company shall not be entitled to pay any portion of the
Make-Whole Payment in shares of Common Stock pursuant to this SECTION
3.1(c) unless all of the following conditions are satisfied:
(a) The Company shall have specified, in the notice of
Provisional Redemption specified in SECTION 3.4, which notice
shall have been timely mailed to each Holder whose Securities
are to be redeemed pursuant to the Provisional Redemption,
that the Company will pay all or a portion of the Make-Whole
Payment in shares of Common Stock and shall have specified in
such notice the percentages of the Make-Whole Payment in
respect of which the Company will pay in cash or shares of
Common Stock;
(b) before a notice of Provisional Redemption is mailed to
Holders pursuant to SECTION 3.4, the Company shall have
delivered an Officers' Certificate to the Trustee specifying
(I) the manner of payment selected by the Company, (II) the
information required by SECTION 3.4 to be included in the such
notice and (III) if the Company elects to pay all or a portion
of the Make-Whole Payment in shares of Common Stock, that the
conditions to such manner of payment set forth in this SECTION
3.1(c) have been, or will be, complied with;
A-17
(c) the information necessary to calculate the Average 5-Day
Closing Sale Price is published in a daily newspaper of
national circulation;
(d) the shares of Common Stock to be delivered as payment, in
whole or in part, of the Make-Whole Payment shall be either
(I) registered under the Securities Act for initial issuance,
unless such registration is not necessary to permit the
Holders who receive such shares and who are not Affiliates of
the Company to publicly resell such shares (for purposes of
this SECTION 3.1(c)(ix)(d), resales subject to the volume,
manner of sale or notice restrictions of Rule 144 under the
Securities Act are deemed not to be "public resales") or (II)
registered for resale pursuant to a Registration Statement,
which shall permit resales on a delayed and/or continuous
basis from time to time pursuant to Rule 415 under the
Securities Act, that has become effective under the Securities
Act and that is reasonably expected to remain effective and
available for use until at least the thirtieth (30th) day
after the Redemption Date, unless the shares may be publicly
sold without restriction pursuant to Rule 144(k) under the
Securities Act;
(e) the shares of Common Stock to be delivered as payment, in
whole or in part, of the Make-Whole Payment shall be duly
qualified or registered under applicable state securities laws
or shall be qualified for an available exemption from such
qualification and registration;
(f) the shares of Common Stock to be delivered as payment, in
whole or in part, of the Make-Whole Payment shall be approved
for listing on the American Stock Exchange or a U.S. national
securities exchange;
(g) before the close of business on the Business Day
immediately preceding the Redemption Date, the Trustee shall
have received an Officers' Certificate stating:
(1) that the conditions in clauses (a), (b), (c),
(d), (e) and (f) above have been satisfied; and
(2) the number of shares of Common Stock to be issued
for each $1,000 principal amount of Securities to be
redeemed and the Closing Sale Price per share of
Common Stock on each Trading Day in the period during
which the Average 5-Day Closing Sale Price is
calculated pursuant to this SECTION 3.1(c);
(h) before the close of business on the Business Day
immediately preceding the Redemption Date, the Trustee shall
have received an Opinion of Counsel stating that:
(1) the shares of Common Stock to be issued by the
Company in full or partial payment of the Make-Whole
Payment have been duly authorized and, when issued
and delivered pursuant to the terms of this Indenture
in payment of the Make-Whole Payment, will be validly
issued, fully paid and non-assessable and, to such
counsel's knowledge, free from preemptive rights; and
(2) the conditions specified in SECTIONS
3.1(c)(ix)(d), 3.1(c)(ix)(e) and 3.1(c)(ix)(f) have
been satisfied; provided, however, that such Opinion
of Counsel need not address whether the Registration
Statement referred to in SECTION 3.1(c)(ix)(d) is
reasonably expected to remain effective and available
for use until at least the thirtieth (30th) day after
the Redemption Date. If, prior to the close of
business on the Redemption Date, any of the foregoing
conditions are not satisfied with respect to a Holder
of Securities subject to the Provisional Redemption,
and the Company has elected, pursuant to this SECTION
3.1(c), to pay all or a portion of the Make-Whole
Payment in shares of Common Stock, the Company shall
pay the entire Make-Whole Payment for such Securities
in cash.
A-18
(d) All shares of Common Stock issued as payment, in whole or in part,
of the Make-Whole Payment shall be deemed, for purposes of the Registration
Rights Agreement, to constitute "Registrable Securities" (as defined in the
Registration Rights Agreement), unless either (i) such shares were registered
under the Securities Act for initial issuance and are able to be publicly resold
by the recipients of such shares without further registration under the
Securities Act or (ii) such registration was and is not necessary to permit the
Holders who receive such shares to publicly resell such shares (for purposes of
this SECTION 3.1(c)(x), resales subject to the volume, manner of sale or notice
restrictions of Rule 144 under the Securities Act are deemed not to be "public
resales").
(e) As used herein, the term "AGGREGATE REDEMPTION PAYMENT AMOUNT"
shall mean the sum of the Redemption Price and the Make-Whole Payment.
(f) Securities in denominations larger than $1,000 principal amount may
be redeemed in part but only in integral multiples of $1,000 principal amount.
3.2 NOTICES TO TRUSTEE.
If the Company elects to redeem Securities pursuant to PARAGRAPH 6 of
the Securities, it shall notify the Trustee at least fifteen (15) days prior to
the mailing, in accordance with SECTION 3.4, of the notice of Redemption (unless
a shorter notice period shall be satisfactory to the Trustee) of the Redemption
Date, the applicable provision of this Indenture pursuant to which the
Redemption is to be made and the aggregate principal amount of Securities to be
redeemed.
3.3 SELECTION OF SECURITIES TO BE REDEEMED.
If the Company has elected to redeem less than all the Securities
pursuant to PARAGRAPH 6 of the Securities, the Trustee shall, within five (5)
Business Days after receiving the notice specified in SECTION 3.2, select the
Securities to be redeemed by lot, on a pro rata basis or in accordance with any
other method the Trustee considers fair and appropriate. The Trustee shall make
such selection from Securities then outstanding and not already to be redeemed
by virtue of having been previously called for Redemption. The Trustee may
select for Redemption portions of the principal amount of Securities that have
denominations larger than $1,000 principal amount. Securities and portions of
them the Trustee selects for Redemption shall be in amounts of $1,000 principal
amount or integral multiples of $1,000 principal amount. The Trustee shall
promptly notify the Company in writing of the Securities selected for Redemption
and the principal amount thereof to be redeemed.
The Company, the Trustee and the Registrar need not register the
transfer of or exchange any Securities that have been selected for Redemption,
except the unredeemed portion of Securities being redeemed in part. The Company,
the Trustee and the Registrar need not issue, authenticate, register the
transfer of or exchange any Security for a period of fifteen (15) days before
the mailing of a notice of Redemption, pursuant to this ARTICLE III, of
Securities to be redeemed.
3.4 NOTICE OF REDEMPTION.
At least twenty (20) days but not more than sixty (60) days before a
Redemption Date, the Company shall mail, or cause to be mailed, a notice of
Redemption to each Holder whose Securities are to be redeemed, at the address of
such Holder appearing in the security register.
The notice shall identify the Securities and the aggregate principal
amount thereof to be redeemed pursuant to a Redemption and shall state:
(i) the Redemption Date;
A-19
(ii) the Aggregate Redemption Payment Amount;
(iii) the Conversion Price;
(iv) the names and addresses of the Paying Agent and the Conversion
Agent;
(v) that the right to convert the Securities called for Redemption will
terminate at the close of business on the second (2nd) Business Day
immediately preceding the Redemption Date, unless there shall be a
Default in the payment of the Aggregate Redemption Payment Amount or,
in the case of a Provisional Redemption of Securities on a Redemption
Date that is also an interest payment date, a Default in the payment of
the accrued and unpaid interest (including Contingent Interest and
Additional Amounts), if any, to, but excluding, the Redemption Date to
the Holder(s) of record of such Securities at the close of business on
the record date for such interest payment;
(vi) that Holders who want to convert Securities must satisfy the
requirements of ARTICLE X;
(vii) the paragraph of the Securities pursuant to which the Securities
are to be redeemed;
(viii) whether the Company will pay the Make-Whole Payment in cash or
shares of Common Stock or in a combination thereof, in each case
specifying the percentages of the Make-Whole Payment in respect of
which the Company will pay in cash or shares of Common Stock;
(ix) where the Company has stated in the notice, pursuant to SECTION
3.4(viii), that the Company will pay any portion of the Make-Whole
Payment in shares of Common Stock, that the Company will pay the entire
Make-Whole Payment in cash if the Company fails to satisfy the
conditions set forth in this Indenture for such payment in shares of
Common Stock;
(x) that Securities called for Redemption must be surrendered to the
Paying Agent to collect the Aggregate Redemption Payment Amount,
provided, that in no event shall a Holder that has converted, in
accordance herewith, such Holder's Security into shares of Common
Stock, which Security has been called for Provisional Redemption, be
required to surrender any such shares of Common Stock in order to be
entitled to receive the Make-Whole Payment with respect to such
Security;
(xi) that, unless there shall be a Default in the payment of the
Aggregate Redemption Payment Amount or, in the case of a Redemption
Date that is also an interest payment date, a Default in the payment of
the accrued and unpaid interest (including Contingent Interest and
Additional Amounts), if any, to, but excluding, the Redemption Date to
the Holder(s) of record of such Securities at the close of business on
the record date for such interest payment, interest on Securities
called for Redemption ceases to accrue on and after the Redemption
Date, such Securities will cease to be convertible after the close of
business on the Business Day immediately preceding the Redemption Date,
and all rights of the Holders of such Securities shall terminate on and
after the Redemption Date, other than the right to receive, upon
surrender of such Securities and in accordance with the Indenture, the
Aggregate Redemption Payment Amount, provided, that, in the event a
Security has been called for Provisional Redemption and has been
converted, in accordance herewith, into shares of Common Stock prior to
the Redemption Date, the Holder of record of such Security at the close
of business on the Notice Date shall, in any event and without any
surrender, be entitled to receive, on the Redemption Date, the
Make-Whole Payment with respect to such Security by wire transfer of
immediately available funds, in accordance with PARAGRAPH 3 of the
Security; and
(xii) the CUSIP number or numbers, as the case may be, of the
Securities.
A-20
The right, pursuant to ARTICLE X, to convert Securities called for
Redemption shall terminate at the close of business on the second (2nd) Business
Day immediately preceding the Redemption Date, unless there shall be a Default
in the payment of the Aggregate Redemption Payment Amount or, in the case of a
Provisional Redemption of Securities on a Redemption Date that is also an
interest payment date, a Default in the payment of the accrued and unpaid
interest (including Contingent Interest and Additional Amounts), if any, to, but
excluding, the Redemption Date to the Holder(s) of record of such Securities at
the close of business on the record date for such interest payment.
At the Company's request, upon reasonable prior notice agreed to by the
Trustee, the Trustee shall give the notice of Redemption in the Company's name
and at the Company's expense; provided, that the form and content of such notice
shall be prepared by the Company.
3.5 EFFECT OF NOTICE OF REDEMPTION.
Once notice of Redemption is mailed, Securities called for Redemption
become due and payable on the Redemption Date at the Aggregate Redemption
Payment Amount, and, on and after such Redemption Date (unless there shall be a
Default in the payment of the Aggregate Redemption Payment Amount or, in the
case of a Provisional Redemption of Securities on a Redemption Date that is also
an interest payment date, a Default in the payment of the accrued and unpaid
interest (including Contingent Interest and Additional Amounts), if any, to, but
excluding, the Redemption Date to the Holder(s) of record of such Securities at
the close of business on the record date for such interest payment), such
Securities shall cease to bear interest, and all rights of the Holders of such
Securities shall terminate, other than the right to receive, upon surrender of
such Securities and in accordance with the next sentence, the Aggregate
Redemption Payment Amount, provided, that, in the event a Security has been
called for Provisional Redemption and has been converted, in accordance
herewith, into shares of Common Stock prior to the Redemption Date, the Holder
of record of such Security at the close of business on the Notice Date shall, in
any event and without any surrender, be entitled to receive, on the Redemption
Date, the Make-Whole Payment with respect to such Security by wire transfer of
immediately available funds, in accordance with PARAGRAPH 3 of the Security.
Upon surrender to the Paying Agent of a Security subject to Redemption, such
Security shall be paid, to the Holder surrendering such Security, at the
Aggregate Redemption Payment Amount. If the Redemption Date is an interest
payment date, the Company shall pay, on such Redemption Date, the accrued and
unpaid interest (including Contingent Interest and Additional Amounts), if any,
to, but excluding, the Redemption Date to the Holder of record of such Security
at the close of business on the record date for such interest payment, and such
accrued and unpaid interest shall not be paid to the Holder submitting such
Security for Redemption (unless such Holder was the Holder of record of such
Security at the close of business on the record date for such interest payment).
If any Security shall not be fully and duly paid upon surrender thereof
for Redemption, the principal of, and accrued and unpaid interest on, such
Security shall, until paid, bear interest from the Redemption Date at the rate
borne by such Security on the principal amount of such Security, and such
Security shall continue to be convertible pursuant to ARTICLE X; provided,
however, that in the case of a Security that has been called for Provisional
Redemption and converted, in accordance herewith, into shares of Common Stock
prior to the Redemption Date, only the Make-Whole Payment with respect to such
Security shall bear interest at the rate borne by such Security prior to such
conversion.
Notwithstanding anything herein to the contrary, there shall be no
purchase of any Securities pursuant to a Redemption if there has occurred (prior
to, on or after, as the case may be, the mailing of the notice of Redemption
specified in SECTION 3.4) and is continuing an Event of Default (other than a
Default in the payment of the Aggregate Redemption Payment Amount or, in the
event the Redemption Date is an interest payment date, the accrued and unpaid
interest (including Contingent Interest and Additional Amounts), if any, to, but
excluding, the Redemption Date payable as herein provided). The Paying Agent
will promptly return to the respective Holders thereof any Securities held by it
during the continuance of such an Event of Default.
A-21
3.6 DEPOSIT OF REDEMPTION PRICE.
Prior to 10:00 A.M., New York City time on the Redemption Date, the
Company shall deposit with a Paying Agent (or, if the Company is acting as its
own Paying Agent, segregate and hold in trust in accordance with SECTION 2.4)
money, in funds immediately available on the Redemption Date, and, if applicable
as provided herein and in accordance herewith, shares of Common Stock,
sufficient to pay the Aggregate Redemption Payment Amount and, in the case of a
Provisional Redemption on a Redemption Date that is also an interest payment
date, the accrued and unpaid interest (including Contingent Interest and
Additional Amounts), if any, to, but excluding, the Redemption Date, of all
Securities to be redeemed on that date. The Paying Agent shall return to the
Company, as soon as practicable, any money not required for that purpose.
3.7 SECURITIES REDEEMED IN PART.
Any Security to be submitted for Redemption only in part shall be
delivered pursuant to SECTION 3.5 (with, if the Company or the Trustee so
requires, due endorsement by, or a written instrument of transfer in form
satisfactory to the Company and the Trustee duly executed by, the Holder thereof
or its attorney duly authorized in writing), and the Company shall execute, and
the Trustee shall authenticate and make available for delivery to the Holder of
such Security without service charge, a new Security or Securities, of any
authorized denomination as requested by such Holder, of the same tenor and in
aggregate principal amount equal to the portion of such Security not submitted
for Redemption.
If any Security selected for partial Redemption is converted in part,
the principal of such Security subject to Redemption shall be reduced by the
principal amount of such Security that is converted.
3.8 REPURCHASE AT OPTION OF HOLDER UPON A CHANGE IN CONTROL.
(a) In the event any Change in Control (as defined below) shall occur,
each Holder of Securities shall have the right (the "REPURCHASE RIGHT"), at the
Holder's option, to require the Company to repurchase all of such Holder's
Securities (or portions thereof that are integral multiples of $1,000 in
principal amount), on a date selected by the Company (the "REPURCHASE DATE"),
which Repurchase Date shall be no later than forty five (45) days after the date
of the Change in Control (as defined below), at a price, payable in cash, equal
to one hundred percent (100%) of the principal amount of the Securities (or
portions thereof) to be so repurchased (the "REPURCHASE PRICE"), plus accrued
and unpaid interest (including Contingent Interest and Additional Amounts), if
any, to, and including, the Repurchase Date, upon:
(i) delivery to the Company (if it is acting as its own Paying Agent),
or to a Paying Agent designated by the Company for such purpose in the
Change in Control Notice, no later than the close of business on the
Business Day immediately preceding the Repurchase Date, of a Purchase
Notice, in the form set forth in the Securities or any other form of
written notice substantially similar thereto, in each case, duly
completed and signed, with appropriate signature guarantee, stating:
(a) the certificate number(s) of the Securities which the
Holder will deliver to be repurchased;
(b) the principal amount of Securities to be repurchased,
which must be $1,000 or an integral multiple thereof; and
(c) that such principal amount of Securities are to be
repurchased pursuant to the terms and conditions specified in
PARAGRAPH 8 of the Securities and in this Indenture; and
(ii) delivery to the Company (if it is acting as its own Paying Agent),
or to a Paying Agent designated by the Company for such purpose in the
Change in Control Notice, at any time after the delivery of such
A-22
Purchase Notice, of such Securities (together with all necessary
endorsements) with respect to which the Repurchase Right is being
exercised, such delivery being a condition to receipt by the Holder of
the Repurchase Price therefor plus accrued and unpaid interest
(including Contingent Interest and Additional Amounts), if any, payable
as herein provided upon Repurchase Upon Change in Control.
If such Securities are held in book-entry form through the Depositary,
the Purchase Notice shall comply with applicable procedures of the Depositary.
Upon such delivery of Securities to the Company (if it is acting as its
own Paying Agent) or such Paying Agent, such Holder shall be entitled to receive
from the Company or such Paying Agent, as the case may be, a nontransferable
receipt of deposit evidencing such delivery.
Notwithstanding anything herein to the contrary, any Holder delivering
the Purchase Notice contemplated by this SECTION 3.8(a) to the Company (if it is
acting as its own Paying Agent) or to a Paying Agent designated by the Company
for such purpose in the Change in Control Notice shall have the right to
withdraw such Purchase Notice by delivery, at any time prior to the close of
business on the second (2nd) Business Day immediately preceding the Repurchase
Date, of a written notice of withdrawal to the Company (if acting as its own
Paying Agent) or the Paying Agent, which notice shall contain the information
specified in SECTION 3.8(c)(xi).
The Paying Agent shall promptly notify the Company of the receipt by it
of any Purchase Notice or written notice of withdrawal thereof.
(b) The Company may, at its option, in lieu of paying the Repurchase
Price in cash, pay the Repurchase Price in Common Stock valued at ninety-five
percent (95%) of the average of the Closing Sale Price of the Common Stock for
the five (5) Trading Days ending on and including the third (3rd) Trading Day
preceding the Repurchase Date. The Repurchase Price may be paid in shares of
Common Stock only if the following conditions are satisfied:
(i) such shares have been registered under the Securities Act or are
freely transferable without such registration;
(ii) the issuance of Common Stock does not require registration or
qualification with or approval of any governmental authority under
state law or any other federal law, which registration or qualification
or approval has not been made or obtained;
(iii) such shares have been approved for quotation or listing on a
national securities exchange; and
(iv) such shares will be issued out of the Company's authorized but
unissued common stock and upon issuance, will be duly and validly
issued and fully paid and non-assessable and free of any preemptive
rights.
(c) Within twenty five (25) days after the occurrence of a Change in
Control, the Company shall mail, or cause to be mailed, to all Holders of record
of the Securities at their addresses shown in the register of the Registrar, and
to beneficial owners as required by applicable law, a notice (the "CHANGE IN
CONTROL NOTICE") of the occurrence of such Change in Control and the Repurchase
Right arising as a result thereof. The Company shall deliver a copy of the
Change in Control Notice to the Trustee and shall cause a copy to be published
at the expense of the Company in THE NEW YORK TIMES or THE WALL STREET JOURNAL
or another newspaper of national circulation.
Each Change in Control Notice shall state:
(i) the events causing the Change in Control;
A-23
(ii) the date of such Change in Control;
(iii) the Repurchase Date;
(iv) the date by which the Repurchase Right must be exercised;
(v) the Repurchase Price plus accrued and unpaid interest (including
Contingent Interest and Additional Amounts), if any, to, but excluding,
the Repurchase Date;
(vi) whether the Company will pay the Repurchase Price in cash or
shares of Common Stock or in a combination thereof, in each case
specifying the percentages of the Repurchase Price in respect of which
the Company will pay in cash or shares of Common Stock;
(vii) the names and addresses of the Paying Agent and the Conversion
Agent;
(viii) a description of the procedure which a Holder must follow to
exercise the Repurchase Right;
(ix) that, in order to exercise the Repurchase Right, the Securities
must be surrendered for payment of the Repurchase Price plus accrued
and unpaid interest (including Contingent Interest and Additional
Amounts), if any, payable as herein provided upon Repurchase Upon
Change in Control;
(x) that the Repurchase Price, plus accrued and unpaid interest
(including Contingent Interest and Additional Amounts), if any, to, and
including, the Repurchase Date, for any Security as to which a Purchase
Notice has been given and not withdrawn will be paid as promptly as
practicable, but in no event more than three (3) Business Days,
following the later of the Repurchase Date or the time of delivery of
the Security as described in (ix);
(xi) that, on and after the Repurchase Date (unless there shall be a
Default in the payment of such Repurchase Price or such accrued and
unpaid interest), interest on Securities subject to Repurchase Upon
Change in Control will cease to accrue, and all rights of the Holders
of such Securities shall terminate, other than the right to receive,
upon surrender of such Securities, the Repurchase Price and such
accrued and unpaid interest;
(xii) that a Holder will be entitled to withdraw its election in the
Purchase Notice if the Company (if acting as its own Paying Agent), or
the Paying Agent receives, prior to the close of business on the
Business Day immediately preceding the Repurchase Date, or such longer
period as may be required by law, a letter or facsimile transmission
(receipt of which is confirmed and promptly followed by a letter)
setting forth (I) the name of such Holder, (II) a statement that such
Holder is withdrawing its election to have Securities repurchased,
(III) the principal amount of the Securities of such Holder to be so
withdrawn, which amount must be $1,000 or an integral multiple thereof,
(IV) the certificate number of such Securities to be so withdrawn, and
(V) the principal amount, if any, of the Securities of such Holder that
remain subject to the Purchase Notice delivered by such Holder in
accordance with this SECTION 3.8, which amount must be $1,000 or an
integral multiple thereof;
(xiii) the Conversion Price and any adjustments to the Conversion Price
that will result from the Change in Control;
(xiv) that Securities with respect to which a Purchase Notice is given
by a Holder may be converted pursuant to ARTICLE X, if otherwise
convertible in accordance with ARTICLE X, only if such Purchase Notice
has been withdrawn in accordance with this SECTION 3.8; and
(xv) the CUSIP number or numbers, as the case may be, of the
Securities.
A-24
At the Company's written request, the Trustee shall mail such Change in
Control Notice in the Company's name and at the Company's expense; provided,
however, that, in all cases, the text of such Change in Control Notice shall be
prepared by the Company.
No failure of the Company to give a Change in Control Notice shall
limit any Holder's right to exercise a Repurchase Right.
(d) Subject to the provisions of this SECTION 3.8, the Company shall
pay, or cause to be paid, the Repurchase Price, plus accrued and unpaid interest
(including Contingent Interest and Additional Amounts), if any, to, and
including, the Repurchase Date, with respect to each Security as to which the
Repurchase Right shall have been exercised to the Holder thereof as promptly as
practicable, but in no event more than three (3) Business Days, following the
later of the Repurchase Date and the time such Security is surrendered to the
Paying Agent.
(e) Prior to 10:00 A.M., New York City time on a Repurchase Date, the
Company shall deposit with a Paying Agent (or, if the Company is acting as its
own Paying Agent, segregate and hold in trust in accordance with SECTION 2.4)
money, in funds immediately available on the Repurchase Date, sufficient to pay
the Repurchase Price, plus accrued and unpaid interest (including Contingent
Interest and Additional Amounts), if any, to, and including, the Repurchase
Date, of all of the Securities that are to be repurchased by the Company on such
Repurchase Date pursuant to a Repurchase Upon Change in Control. The Paying
Agent shall return to the Company, as soon as practicable, any money not
required for that purpose.
(f) Once the Change in Control Notice and the Purchase Notice have been
duly given in accordance with this SECTION 3.8, the Securities to be repurchased
pursuant to a Repurchase Upon Change in Control shall, on the Repurchase Date,
become due and payable at the Repurchase Price (plus accrued and unpaid interest
(including Contingent Interest and Additional Amounts), if any, to, and
including, the Repurchase Date) applicable thereto, and, on and after such date
(unless there shall be a Default in the payment of the Repurchase Price or such
accrued and unpaid interest), such Securities shall cease to bear interest and
shall cease to be convertible pursuant to ARTICLE X, and all rights of the
Holders of such Securities shall terminate, other than the right to receive, in
accordance with this SECTION 3.8, the Repurchase Price and such accrued and
unpaid interest.
(g) Securities with respect to which a Purchase Notice has been duly
delivered in accordance with this SECTION 3.8 may be converted pursuant to
ARTICLE X, if otherwise convertible in accordance with ARTICLE X, only if such
Purchase Notice has been withdrawn in accordance with this SECTION 3.8 or if
there shall be a Default in the payment of the Repurchase Price or in the
accrued and unpaid interest (including Contingent Interest and Additional
Amounts), if any, payable as herein provided upon Repurchase Upon Change in
Control.
(h) If any Security shall not be paid upon surrender thereof for
Repurchase Upon Change in Control, the principal of, and accrued and unpaid
interest on, such Security shall, until paid, bear interest from the Repurchase
Date at the rate borne by such Security on the principal amount of such
Security, and such Security shall continue to be convertible pursuant to ARTICLE
X.
(i) Any Security which is to be submitted for Repurchase Upon Change in
Control only in part shall be delivered pursuant to this SECTION 3.8 (with, if
the Company or the Trustee so requires, due endorsement by, or a written
instrument of transfer in form satisfactory to the Company and the Trustee duly
executed by, the Holder thereof or its attorney duly authorized in writing), and
the Company shall execute, and the Trustee shall authenticate and make available
for delivery to the Holder of such Security without service charge, a new
Security or Securities, of any authorized denomination as requested by such
Holder, of the same tenor and in aggregate principal amount equal to the portion
of such Security not submitted for Repurchase Upon Change in Control.
(j) Notwithstanding anything herein to the contrary, there shall be no
purchase of any Securities pursuant to this SECTION 3.8 if there has occurred
(prior to, on or after, as the case may be, the giving, by the Holders of such
A-25
Securities, of the required Purchase Notice) and is continuing an Event of
Default (other than a Default in the payment of the Repurchase Price or accrued
and unpaid interest (including Contingent Interest and Additional Amounts), if
any, payable as herein provided upon Repurchase Upon Change in Control). The
Paying Agent will promptly return to the respective Holders thereof any
Securities held by it during the continuance of an Event of Default (other than
a Default in the payment of the Repurchase Price or such accrued and unpaid
interest), in which case, upon such return, the Purchase Notice with respect to
the Repurchase Upon Change in Control shall be deemed to have been withdrawn.
(k) Notwithstanding anything herein to the contrary, if the option
granted to Holders to require the repurchase of the Securities upon the
occurrence of a Change in Control is determined to constitute a tender offer,
the Company shall comply with all applicable tender offer rules under the
Exchange Act, including Rule 13e-4 and Regulation 14E, and with all other
applicable laws, and will file a Schedule TO or any other schedules required
under the Exchange Act or any other applicable laws.
(l) As used herein and in the Securities:
A "Change in Control" shall be deemed to have occurred at such time as:
(i) any "person" or "group" (as such terms are used for purposes of
Sections 13(d) and 14(d) of the Exchange Act) is or becomes the
"beneficial owner" (as such term is used in Rule 13d-3 under the
Exchange Act), directly or indirectly, of fifty percent (50%) or more
of the total voting power of all classes of the Company's Capital Stock
entitled to vote generally in the election of directors calculated on a
fully-diluted basis; provided, however, this does not include any
"person", or any persons acting together which would constitute a
"group" for purposes of Section 13(d) of the Exchange Act, together
with any affiliates thereof, that, as of June 14, 2004, beneficially
own (as defined in Rule 13d-3 under the Exchange Act) greater than
eight percent (8%) of the total voting power of all classes of the
Company's Capital Stock entitled to vote generally in the election of
directors calculated on a fully-diluted basis; or
(ii) the Company consolidates with, or merges with or into, another
person or any person consolidates with, or merges with or into, the
Company, in any such event other than pursuant to a transaction where
the persons that "beneficially owned," directly or indirectly, the
shares of the Company's Voting Stock immediately prior to such
transaction, "beneficially own," directly or indirectly, immediately
after such transaction, shares of the continuing, surviving or
acquiring corporation's Voting Stock representing at least a majority
of the total voting power of all outstanding classes of the Voting
Stock of the continuing, surviving or acquiring corporation; or
(iii) the sale, transfer, lease, conveyance or other disposition of all
or substantially all of the assets of the Company to any "person" or
"group" (as such terms are used in Sections 13(d) and 14(d) of the
Exchange Act), including any group acting for the purpose of acquiring,
holding, voting or disposing of securities within the meaning of Rule
13d-5(b)(1) under the Exchange Act;
provided, however, that a Change in Control will not be deemed to have occurred
if at least eighty percent (80%) of the consideration (other than cash payments
for fractional shares or pursuant to statutory appraisal rights) in the merger
or consolidation otherwise constituting the Change in Control consists of common
stock, depositary receipts or other certificates representing common equity
interests and any associated rights traded on a U.S. national securities
exchange or quoted on The Nasdaq National Market (or which will be so traded or
quoted when issued or exchanged in connection with such Change in Control), and,
as a result of such transaction or transactions, the Securities become
convertible solely into such common stock, depositary receipts or other
certificates representing common equity interests and associated rights.
(m) If a Change in Control occurs, and at least fifty percent (50%) of
the consideration for the Common Stock in the transaction or transactions
constituting the Change in Control consists of cash, the Holder may elect to
receive the greater of (x) the Total Redemption Amount (as defined below) or (y)
the Repurchase Price.
A-26
The "Total Redemption Amount" will equal the sum of: (i) the Cash
Buyout Redemption Price, which will equal the product of (x) the average Closing
Sale Price for the five (5) Trading Days immediately prior to the Company's
public announcement of the Change in Control and (y) the quotient of $1,000
divided by the then applicable Conversion Price; and (ii) the "Takeover
Make-Whole Premium," as set forth in the table below:
Period during which Takeover Make-Whole Premium
Change in Control occurs per $1,000 of principal
------------------------ -----------------------
Up to December 15, 2004 $270.0
December 16, 2004 - June 15, 2005 $225.0
June 16, 2005 - December 15, 2005 $180.0
December 16, 2005 - June 15, 2006 $135.0
June 16, 2006 - December 15, 2006 $90.0
December 16, 2006 - June 15, 2007 $90.0
June 16, 2007 - December 15, 2007 $90.0
December 16, 2007 - June 15, 2008 $90.0
June 16, 2008 - December 15, 2008 $45.0
December 16, 2008 - June 15, 2009 $0.0
The Total Redemption Amount shall be paid in cash. If a Holder elects
to receive the Takeover Make-Whole Premium as part of the Total Redemption
Amount, such payment will preclude any Early Conversion Incentive Payments under
the Securities.
IV. COVENANTS
4.1 PAYMENT OF SECURITIES.
The Company shall pay all amounts due with respect to the Securities on
the dates and in the manner provided in the Securities. All such amounts shall
be considered paid on the date due if the Paying Agent holds (or, if the Company
is acting as Paying Agent, the Company has segregated and holds in trust in
accordance with SECTION 2.4) on that date money (and, if applicable as provided
herein and in accordance herewith, shares of Common Stock) sufficient to pay the
amount then due with respect to the Securities (unless there shall be a Default
in the payment of such amounts to the respective Holder(s)). The Company shall
pay interest on any overdue amount (including, to the extent permitted by
applicable law, overdue interest) at the rate borne by the Securities.
4.2 MAINTENANCE OF OFFICE OR AGENCY.
The Company will maintain in the Borough of Manhattan, the City of New
York, an office or agency (which may be an office of the Trustee or an affiliate
of the Trustee, Registrar or co-Registrar) where Securities may be surrendered
for registration of transfer or exchange or conversion 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. 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 designated office
of the Trustee.
The Company may also from time to time designate one or more other
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;
provided, however, that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or agency in the
Borough of Manhattan, the City of New York for such purposes. The Company will
give prompt written notice to the Trustee of any such designation or rescission
and of any change in the location of any such other office or agency.
The Company hereby designates the designated office of the Trustee as
an agency of the Company in accordance with SECTION 2.3.
A-27
4.3 RULE 144A INFORMATION AND ANNUAL REPORTS.
(a) At any time when the Company is not subject to Sections 13 or 15(d)
of the Exchange Act, the Company shall promptly provide to the Trustee and
shall, upon request, provide to any Holder, beneficial owner or prospective
purchaser of Securities or shares of Common Stock issued upon conversion of any
Securities or issued pursuant to ARTICLE III, the information required to be
delivered pursuant to Rule 144A(d)(4) under the Securities Act to facilitate the
resale of such Securities or shares of Common Stock pursuant to Rule 144A. The
Company shall take such further action as any Holder or beneficial holder of
such Securities or shares of Common Stock may reasonably request to the extent
required from time to time to enable such Holder or beneficial holder to sell
its Securities or shares of Common Stock in accordance with Rule 144A, as such
rule may be amended from time to time.
(b) The Company shall, in accordance with TIA ss.ss. 314(a), deliver to
the Trustee, within thirty (30) calendar days after the Company files such
annual reports, information, documents and other reports with the SEC, copies of
the Company's annual reports (which shall contain audited financial statements
of the Company) and of the information, documents and other reports (or copies
of such portions of any of the foregoing as the SEC may by rules and regulations
prescribe) which the Company is required to file with the SEC pursuant to
Section 13 or Section 15(d) of the Exchange Act; provided, however, that the
Company shall not be required to deliver to the Trustee any material for which
the Company has sought and received confidential treatment by the SEC. In the
event the Company is at any time no longer subject to the reporting requirements
of Section 13 or Section 15(d) of the Exchange Act, the Company shall continue
to provide the Trustee and to each Holder, within thirty (30) calendar days
after the Company would have been required to file such reports with the SEC,
annual and quarterly consolidated financial statements substantially equivalent
to financial statements that would have been included in reports filed with the
SEC if the Company were subject to the reporting requirements of Section 13 or
Section 15(d) of the Exchange Act, including, with respect to annual information
only, a report thereon by the Company's certified independent public accountants
as such would be required in such reports filed with the SEC and, in each case,
together with a management's discussion and analysis of financial condition and
results of operations which would be so required. The Company also shall comply
with the other provisions of TIA ss.ss. 314(a).
(c) Delivery of such reports, information and documents to the Trustee
is for informational purposes only and the Trustee's receipt of such shall not
constitute. constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
4.4 COMPLIANCE CERTIFICATE; STATEMENT BY OFFICERS AS TO DEFAULT.
The Company shall deliver to the Trustee, within ninety (90) calendar
days after the end of each fiscal year of the Company, or, if earlier, by the
date the Company is, or would be, required to file with the SEC the Company's
annual report (whether on Form 10-K under the Exchange Act or another
appropriate form) for such fiscal year, an Officers' Certificate, one of the
signers of which shall be the principal executive officer, principal financial
officer or principal accounting officer of the Company, stating whether or not
the signers know of any Default or Event of Default by the Company in performing
any of its obligations under this Indenture or the Securities. If they do know
of any such Default or Event of Default, the certificate shall describe the
Default or Event of Default and its status.
4.5 STAY, EXTENSION AND USURY LAWS.
The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay, extension or usury law wherever
enacted, now or at any time hereafter in force, which may affect the covenants
or the performance of this Indenture; and the Company (to the extent that 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
A-28
impede the execution of any power herein granted to the Trustee, but will suffer
and permit the execution of every such power as though no such law has been
enacted.
4.6 CORPORATE EXISTENCE.
The Company will do or cause to be done all things necessary to
preserve and keep in full force and effect its corporate existence and the
rights (charter and statutory), licenses and franchises of the Company;
provided, however, that the Company shall not be required to preserve any such
right, license or franchise, if in the good faith judgment of the Board of
Directors the loss of such right, license or franchise does not have a material
adverse impact on the Holders.
4.7 NOTICE OF DEFAULT.
In the event that any Default or Event of Default shall occur, the
Company will give prompt written notice of such Default or Event of Default, and
any remedial action proposed to be taken, to the Trustee.
4.8 FURTHER INSTRUMENTS AND ACTS.
Upon request of the Trustee, the Company shall execute and deliver such
further instruments and do such further acts as may be reasonably necessary or
proper to carry out more effectively the purposes of this Indenture.
V. SUCCESSORS
5.1 WHEN COMPANY MAY MERGE, ETC.
The Company shall not consolidate with, or merge with or into, or sell,
transfer, lease, convey or otherwise dispose of all or substantially all of the
property or assets of the Company to, another person, whether in a single
transaction or series of related transactions, unless: (i) the Company is the
surviving person, or the resulting surviving person is organized and existing
under the laws of the United States, any State thereof or the District of
Columbia; or (ii) such person assumes by supplemental indenture all the
obligations of the Company under the Securities and this Indenture; and (iii)
immediately after giving effect to the transaction, no Default or Event of
Default shall exist.
The Company shall deliver to the Trustee prior to the consummation of
the proposed transaction an Officers' Certificate to the foregoing effect and an
Opinion of Counsel (which may rely upon such Officers' Certificate as to the
absence of Defaults and Events of Default) stating that the proposed transaction
and such supplemental indenture will, upon consummation of the proposed
transaction, comply with this Indenture.
5.2 SUCCESSOR SUBSTITUTED.
Upon any consolidation, merger or any sale, transfer, lease, conveyance
or other disposition of all or substantially all of the property or assets of
the Company, the successor person formed by such consolidation or into which the
Company is merged or to which such sale, transfer, lease, conveyance or other
disposition is made shall succeed to, and, except in the case of a lease, be
substituted for, and may exercise every right and power of, and shall assume
every duty and obligation of, the Company under this Indenture with the same
effect as if such successor had been named as the Company herein. When the
successor assumes all obligations of the Company hereunder, except in the case
of a lease, all obligations of the predecessor shall terminate.
A-29
VI. DEFAULTS AND REMEDIES
6.1 EVENTS OF DEFAULT.
An "EVENT OF DEFAULT" occurs if:
(i) the Company fails to pay the principal of any Security when the
same becomes due and payable, whether at maturity, upon Redemption, on
a Repurchase Date with respect to a Repurchase Upon Change in Control
or otherwise;
(ii) the Company fails to pay Interest on any Security when due, if
such failure continues for thirty (30) days after the date when due;
(iii) the Company fails to timely provide a Change in Control Notice,
as required by the provisions of this Indenture;
(iv) the Company defaults in its obligation to convert the Securities
into shares of Common Stock, cash or a combination of cash and Common
Stock upon exercise of a Holder's conversion right and such default
continues for ten (10) days;
(v) the Company defaults in its obligation to repurchase any Security
on a Repurchase Date with respect to a Repurchase Upon Change in
Control or otherwise;
(vi) the Company defaults in its obligation to redeem any Security
after exercise of its option to redeem;
(vii) the Company fails to perform or observe any of the covenants in
ARTICLE IV for sixty (60) days after written notice to the Company by
the Trustee or to the Company and the Trustee by Holders of at least
fifty percent (50%) in the aggregate principal amount of the Securities
then outstanding;
(viii) there occurs an event of default with respect to the Company's
or any of its Subsidiaries' indebtedness having a principal amount then
outstanding, individually or in the aggregate, of at least fifteen
million dollars ($15,000,000), whether such indebtedness now exists or
is hereafter incurred, which default or defaults: (a) shall have
resulted in such indebtedness becoming or being declared due and
payable prior to the date on which it would otherwise have become due
and payable; or (b) shall constitute the failure to pay such
indebtedness at the final stated maturity thereof (after expiration of
any applicable grace period);
(ix) any final judgment or judgments for the payment of money in excess
of fifteen million dollars ($15,000,000) shall be rendered against the
Company and shall not be discharged for any period of sixty (60)
consecutive days during which time a stay of enforcement shall not be
in effect or during which time an appeal has not been filed; or
(x) the Company pursuant to, or within the meaning of, any Bankruptcy
Law, insolvency law, or other similar law now or hereafter in effect or
otherwise:
(a) commences a voluntary case,
(b) consents to the entry of an order for relief against it in
an involuntary case,
(c) consents to the appointment of a Custodian of it or for
all or substantially all of its property or assets, or
(d) makes a general assignment for the benefit of its
creditors, or
A-30
(e) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(1) is for relief against the Company in an
involuntary case or proceeding, or adjudicates the
Company insolvent or bankrupt,
(2) appoints a Custodian of the Company for all or
substantially all of the property or assets of the
Company, or
(3) orders the winding up or liquidation of the
Company and, in the case of each of the foregoing
clauses (A), (B) and (C) of this SECTION 6.1(x), the
order or decree remains unstayed and in effect for at
least ninety (90) consecutive days.
The term "BANKRUPTCY LAW" means Title 11, U.S. Code or any similar
federal or state law for the relief of debtors. The term "CUSTODIAN" means any
receiver, trustee, assignee, liquidator or similar official under any Bankruptcy
Law.
When a Default is cured, it ceases.
6.2 ACCELERATION.
If an Event of Default (excluding an Event of Default specified in
SECTION 6.1(x) with respect to the Company (but including an Event of Default
specified in SECTION 6.1(ix)) occurs and is continuing, the Trustee by notice to
the Company, or the Holders of at least fifty percent (50%) in aggregate
principal amount of the Securities then outstanding by notice to the Company and
the Trustee, may declare the Securities to be immediately due and payable in
full. The notice must specify the Default, demand that it be remedied and state
that the notice is a "NOTICE OF DEFAULT". If the Holders of at least fifty
percent (50%) in aggregate principal amount of the outstanding Securities
request the Trustee to give such notice on their behalf, the Trustee shall do
so. Upon such declaration, the principal of, premium, if any, and any accrued
and unpaid interest on, all Securities shall be due and payable immediately. If
an Event of Default specified in SECTION 6.1(x) occurs, the principal of, and
accrued and unpaid interest on, all the Securities shall ipso facto become and
be immediately due and payable without any declaration or other act on the part
of the Trustee or any Holder. The Holders of a majority in aggregate principal
amount of the Securities then outstanding by written notice to the Trustee may
rescind or annul an acceleration and its consequences if (A) the rescission
would not conflict with any order or decree, (B) all existing Events of Default,
except the nonpayment of principal or interest that has become due solely
because of the acceleration, have been cured or waived and (C) all amounts due
to the Trustee under SECTION 7.7 have been paid.
6.3 OTHER REMEDIES.
Notwithstanding any other provision of this Indenture, if an Event of
Default occurs and is continuing, the Trustee may pursue any available remedy by
proceeding at law or in equity to collect the payment of amounts due with
respect to the Securities or to enforce the performance of any provision of the
Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Securities or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder in exercising any right or remedy accruing
upon an Event of Default shall not impair the right or remedy or constitute a
waiver of or acquiescence in the Event of Default. All remedies are cumulative.
6.4 WAIVER OF PAST DEFAULTS.
Subject to SECTIONS 6.7 and 9.2, the Holders of a majority in aggregate
principal amount of the Securities then outstanding may, by notice to the
Trustee, waive any past Default or Event of Default and its consequences, other
A-31
than (A) a Default or Event of Default in the payment of the principal of, or
premium, if any, or interest or additional interest on, any Security, or in the
payment of the Redemption Price or the Repurchase Price (or accrued and unpaid
interest, if any, payable as herein provided upon Redemption or Repurchase Upon
Change in Control), (B) a Default or Event of Default arising from a failure by
the Company to convert any Securities into shares of Common Stock in accordance
with this Indenture or (C) any Default or Event of Default in respect of any
provision of this Indenture or the Securities which, under SECTION 9.2, cannot
be modified or amended without the consent of the Holder of each outstanding
Security affected. When a Default or an Event of Default is waived, it is cured
and ceases. This SECTION 6.4 shall be in lieu of TIA ss. 316(a)(1)(B), and TIA
ss. 316(a)(1)(B) is hereby expressly excluded from this Indenture, as permitted
by the TIA.
6.5 CONTROL BY MAJORITY.
The Holders of a majority in aggregate principal amount of the
Securities then outstanding may direct the time, method and place of conducting
any proceeding for any remedy available to the Trustee or exercising any trust
or power conferred on it. However, the Trustee may refuse to follow any
direction that conflicts with law or this Indenture, is unduly prejudicial to
the rights of other Holders or would involve the Trustee in personal liability
unless the Trustee is offered indemnity reasonably satisfactory to it; provided,
that the Trustee may take any other action deemed proper by the Trustee which is
not inconsistent with such direction. This SECTION 6.5 shall be in lieu of TIA
ss. 316(a)(1)(A), and TIA ss. 316(a)(1)(A) is hereby expressly excluded from
this Indenture, as permitted by the TIA.
6.6 LIMITATION ON SUITS.
Except as provided in SECTION 6.7, a Securityholder may not institute
any proceeding under this Indenture, or for the appointment of a receiver or a
trustee, or for any other remedy under this Indenture unless:
(i) the Holder gives to the Trustee written notice of a continuing
Event of Default;
(ii) the Holders of at least fifty percent (50%) in aggregate principal
amount of the Securities then outstanding make a written request to the
Trustee to pursue the remedy;
(iii) such Holder or Holders offer and, if requested, provide to the
Trustee indemnity reasonably satisfactory to the Trustee against any
loss, liability or expense;
(iv) the Trustee does not comply with the request within sixty (60)
days after receipt of notice, the request and the offer of indemnity;
and
(v) during such sixty (60) day period, the Holders of a majority in
aggregate principal amount of the Securities then outstanding do not
give the Trustee a direction inconsistent with the request.
A Securityholder may not use this Indenture to prejudice the rights of
another Securityholder or to obtain a preference or priority over another
Securityholder (it being understood that the Trustee does not have an
affirmative duty to ascertain whether or not such actions or forbearances are
unduly prejudicial to such Holders).
6.7 RIGHTS OF HOLDERS TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Indenture, the right of any
Holder to receive payment of all amounts due with respect to the Securities, on
or after the respective due dates as provided herein, or to bring suit for the
enforcement of any such payment on or after such respective dates, shall not be
impaired or affected without the consent of the Holder.
A-32
Notwithstanding any other provision of this Indenture, the right of any
Holder to bring suit for the enforcement of the right to convert the Security in
accordance with this Indenture shall not be impaired or affected without the
consent of the Holder.
6.8 COLLECTION SUIT BY TRUSTEE.
If an Event of Default specified in SECTION 6.1(i) or (ii) occurs and
is continuing, the Trustee may recover judgment in its own name and as trustee
of an express trust against the Company for the whole amount due with respect to
the Securities, including any unpaid and accrued interest.
6.9 TRUSTEE MAY FILE PROOFS OF CLAIM.
The Trustee may file such proofs of claim and other papers or documents
as may be necessary or advisable in order to have the claims of the Trustee, any
predecessor Trustee and the Securityholders allowed in any judicial proceedings
relative to the Company or its creditors or properties.
The Trustee may collect and receive any moneys or other property
payable or deliverable on any such claims and to distribute the same, and any
custodian, receiver, assignee, trustee, liquidator, sequestrator or similar
official in any judicial proceeding is hereby authorized by each Holder to make
such payments to the Trustee and, in the event that the Trustee shall consent to
the making of such payments directly to the Holders, to pay the Trustee any
amount due it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, and any other amounts due the
Trustee under SECTION 7.7.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof, or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.
6.10 PRIORITIES.
If the Trustee collects any money pursuant to this ARTICLE VI, it shall
pay out the money in the following order:
First: to the Trustee for amounts due under SECTION 7.7;
Second: to Securityholders for all amounts due and unpaid on the
Securities, without preference or priority of any kind, according to the amounts
due and payable on the Securities; and
Third: to the Company.
The Trustee, upon prior written notice to the Company may fix a record
date and payment date for any payment by it to Securityholders pursuant to this
SECTION 6.10.
6.11 UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as Trustee, a court in its discretion may require the filing by any party
litigant in the suit other than the Trustee of an undertaking to pay the costs
of the suit, and the court in its discretion may assess reasonable costs,
including reasonable attorneys' fees and expenses, against any party litigant in
the suit, having due regard to the merits and good faith of the claims or
defenses made by the party litigant. This SECTION 6.11 does not apply to a suit
by the Trustee, a suit by a Holder pursuant to SECTION 6.7 or a suit by Holders
of more than ten percent (10%) in aggregate principal amount of the outstanding
Securities.
A-33
VII. TRUSTEE
7.1 DUTIES OF TRUSTEE.
If an Event of Default has occurred and is continuing, the Trustee
shall exercise such rights and powers vested in it by this Indenture, and use
the same degree of care and skill in its exercise thereof, as a prudent Person
would exercise or use under the circumstances in the conduct of such Person's
own affairs.
Except during the continuance of an Event of Default:
(a) the duties of the Trustee shall be determined solely by the express
provisions of this Indenture and the TIA and the Trustee need perform only those
duties that are specifically set forth in this Indenture and no others, and no
implied covenants or obligations shall be read into this Indenture or the TIA
against the Trustee; and
(b) in the absence of bad faith on its part, the Trustee may
conclusively rely, without investigation, as to the truth or the statements and
the correctness of the opinions expressed therein, upon and statements,
certificates or opinions furnished to the Trustee and conforming to the
requirements of this Indenture but need not verify the contents thereof.
However, in the case of any such certificates or opinions which by any
provision hereof are specifically required to be furnished to the Trustee, the
Trustee shall examine the certificates and opinions to determine whether or not
they conform on their face to the requirements of this Indenture (but need not
confirm or investigate the accuracy of mathematical calculations or other facts
stated therein).
The Trustee may not be relieved from liabilities for its own negligent
action, its own negligent failure to act, or its own willful misconduct, except
that:
(a) this paragraph does not limit the effect of paragraph (b) of this
Section;
(b) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer, unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts; and
(c) the Trustee shall not be liable with respect to any action it takes
or omits to take in good faith in accordance with a direction received by it
pursuant to SECTION 6.2, 6.4 or 6.5.
Whether or not therein expressly so provided, every provision of this
Indenture that in any way relates to the Trustee is subject to this paragraphs
(a), (b) and (c) of SECTION 7.1 and SECTION 7.2.
No provision of this Indenture shall require the Trustee to expend or
risk its own funds or otherwise incur any liability. The Trustee shall be under
no obligation to exercise any of its rights and powers under this Indenture at
the request of any Holders, pursuant to the provisions of this Indenture,
including, without limitation, SECTION 6.5, unless such Holder's shall have
offered to the Trustee security and indemnity satisfactory to it against any
loss, liability or expense which might be incurred by it in compliance with such
request or direction.
The Trustee shall not be liable for interest on any money received by
it except as the Trustee may agree in writing with the Company. Money held in
trust by the Trustee need not be segregated from other funds except to the
extent required by law.
A-34
7.2 RIGHTS OF TRUSTEE.
(a) The Trustee may conclusively rely and shall be protected in acting
or refraining from acting upon any document believed by it to be genuine and to
have been signed or presented by the proper Person. The Trustee need not
investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel or both. The Trustee shall not be
liable for any action it takes or omits to take in good faith in reliance on
such Officers' Certificate or Opinion of Counsel. The Trustee may consult with
counsel of its own selection and the advice of such counsel and Opinions of
Counsel with respect to legal matters relating to this Indenture and the
Securities shall be full and complete authorization and protection from
liability in respect of any action taken, suffered or omitted by it hereunder in
good faith and in reliance thereon.
(c) The Trustee may act through its attorneys, accountants, experts and
such other professionals as the Trustee deems necessary, advisable or
appropriate and shall not be responsible for the misconduct or negligence of any
attorney, accountant, expert or other such professional appointed with due care.
(d) The Trustee shall not be liable for any action it takes or omits to
take in good faith that it believes to be authorized or within the rights or
powers conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Company shall be sufficiently
evidenced by a written order signed by two (2) Officers of the Company.
(f) The Trustee shall not be charged with knowledge of any Default or
Event of Default under SECTION 6.1 (other than under SECTION 6.1(a) (subject to
the following sentence) or SECTION 6.1(b)) unless either (i) a Responsible
Officer shall have actual knowledge thereof, or (ii) the Trustee shall have
received notice thereof in accordance with SECTION 12.2 from the Company or any
Holder of the Securities. The Trustee shall not be charged with knowledge of the
Company's obligation to pay Contingent Interest, or the cessation of such
obligation, unless the Trustee receives written notice thereof from the Company
or any Holder.
(g) 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.
(h) In no event shall the Trustee be responsible or liable for special,
indirect, or consequential loss or damage of any kind whatsoever (including, but
not limited to, loss of profit) irrespective of whether the Trustee has been
advised of the likelihood of such loss or damage and regardless of the form of
action.
(i) The Trustee may request that the Company deliver a certificate
substantially in the form of EXHIBIT D setting forth the names of individuals
and/or titles of officers authorized at such time to take specified actions
pursuant to this Indenture, which certificate may be signed by any person
specified as so authorized in any such certificate previously delivered and not
superseded.
(j) 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.
A-35
7.3 INDIVIDUAL RIGHTS OF TRUSTEE.
The Trustee may become the owner or pledgee of Securities and may
otherwise deal with the Company or any Affiliate of the Company with the same
rights it would have if it were not Trustee. However, in the event that the
Trustee acquires any conflicting interest within the meaning of the TIA it must
eliminate such conflict within ninety (90) days, or apply (subject to the
consent of the Company) to the Commission for permission to continue as trustee
or resign. Any Agent may do the same with like rights and duties. The Trustee is
also subject to SECTIONS 7.10 and 7.11.
7.4 TRUSTEE'S DISCLAIMER.
The Trustee shall not be responsible for and makes no representation as
to the validity or adequacy of this Indenture, or the Securities, it shall not
be accountable for the Company's use of the proceeds from the Securities or any
money paid to the Company or upon the Company's direction under any provision of
this Indenture, it shall not be responsible for the use or application of any
money received by any Paying Agent other than the Trustee, and it shall not be
responsible for any statement or recital herein or any statement in the
Securities or any other document in connection with the sale of the Securities
or pursuant to this Indenture other than its certificate of authentication.
7.5 NOTICE OF DEFAULTS.
If a Default or Event of Default occurs and is continuing, the Trustee
shall mail to Holders of Securities a notice of the Default or Event of Default
within ninety (90) days after such Event of Default becomes known to the
Trustee. Except in the case of a Default in payment on any Security (including
the failure to make a mandatory repurchase pursuant hereto), the Trustee may
withhold the notice if and so long as a committee of its Responsible Officers in
good faith determines that withholding the notice is in the interests of the
Holders of the Securities.
7.6 REPORTS BY TRUSTEE TO HOLDER OF THE SECURITIES.
Within sixty (60) days after each May 15 beginning with the May 15
following the date of this Indenture, and for so long as Securities remain
outstanding, the Trustee shall mail to the Holders of the Securities a brief
report dated as of such reporting date that complies with TIA ss. 313(a) (but if
no event described in TIA ss. 313(a) has occurred within the twelve (12) months
preceding the reporting date, no report need be transmitted). The Trustee also
shall comply with TIA ss. 313(b). The Trustee shall also transmit by mail all
reports as required by TIA ss. 313(c).
A copy of each report at the time of its mailing to the Holders of
Securities shall be mailed to the Company and filed with the Commission and each
stock exchange on which the Securities are listed in accordance with TIA ss.
313(d). The Company shall promptly notify the Trustee in writing when the
Securities are listed on any stock exchange or of any delisting thereof.
7.7 COMPENSATION, REIMBURSEMENT AND INDEMNITY.
The Company shall pay to the Trustee from time to time such
compensation for its acceptance of this Indenture and the rendering by it of the
services required hereunder as shall be agreed upon in writing by the Company
and the Trustee. The Trustee's compensation shall not be limited by any law on
compensation of a trustee of an express trust. The Company shall reimburse the
Trustee promptly upon request for all reasonable disbursements, advances and
expenses incurred or made by or on behalf of it in addition to the compensation
for its services. Such expenses shall include the reasonable compensation,
disbursements and expenses of the Trustee's attorneys, accountants, experts and
such other professionals as the Trustee deems necessary, advisable or
appropriate.
The Company shall indemnify the Trustee and any predecessor Trustee
(which for purposes of this SECTION 7.7 shall include its officers, directors,
employees, agents and shareholders), and hold it harmless against, any and all
A-36
losses, liabilities, claims, damages or expenses, including taxes (other than
taxes based upon, measured by or determined by the income of the Trustee) and
reasonable attorneys' fees and expenses, incurred by it arising out of or in
connection with the acceptance or administration of its duties under this
Indenture (including its duties under SECTION 9.6), including the costs and
expenses of enforcing this Indenture against the Company (including this SECTION
7.7) and defending itself against or investigating any claim (whether asserted
by the Company, any Holder or any other Person) or liability in connection with
the exercise or performance of any of its powers or duties hereunder, except to
the extent any such loss, damage, claim, liability or expense shall have been
determined by a court of competent jurisdiction to have been caused by its own
negligence or willful misconduct. The Trustee shall notify the Company promptly
of any claim for which it may seek indemnity. Failure by the Trustee to so
notify the Company shall not relieve the Company of its obligations hereunder.
At the Trustee's sole discretion, the Company shall defend any claim or
threatened claim asserted against the Trustee, with counsel satisfactory to the
Trustee, and the Trustee shall cooperate in the defense at the Company's
expense. The Trustee may have separate counsel and the Company shall pay the
reasonable fees and expenses of such counsel. The Company need not pay for any
settlement made without its consent, which consent shall not be unreasonably
withheld.
The obligations of the Company under this SECTION 7.7 shall survive the
resignation or removal of the Trustee, the satisfaction and discharge of this
Indenture and the termination of this Indenture.
To secure the Company's payment obligations in this SECTION 7.7, the
Trustee shall have a Lien prior to the Securities on all money or property held
or collected by the Trustee, except that held in trust to pay principal,
Redemption Price or Purchase Price of or Contingent Interest, if any, or
interest on, particular Securities. Such Lien shall survive the resignation or
removal of the Trustee, the satisfaction and discharge of this Indenture and the
termination of this Indenture.
When the Trustee incurs expenses or renders services after an Event of
Default specified in SECTION 6.1(f) or (g) occurs, the expenses and the
compensation for the services (including the fees and expenses of its agents and
counsel) are intended to constitute expenses of administration under any
Bankruptcy Law.
7.8 REPLACEMENT OF TRUSTEE.
A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section.
The Trustee may resign in writing at any time and be discharged from
the trust hereby created by so notifying the Company. The Holders of Securities
of a majority in principal amount of the then outstanding Securities may remove
the Trustee by so notifying the Trustee and the Company in writing. The Company
may remove the Trustee if:
(a) the Trustee fails to comply with SECTION 7.10;
(b) the Trustee is adjudged a bankrupt or an insolvent or an order for
relief is entered with respect to the Trustee under any Bankruptcy Law;
(c) a custodian, receiver or public officer takes charge of the Trustee
or its property for the purpose of rehabilitation, conversation or liquidation;
or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the date on which the successor Trustee takes
office, the Holders of a majority in principal amount of the then outstanding
Securities may appoint a successor Trustee to replace the successor Trustee
appointed by the Company.
A-37
If a successor Trustee does not take office within thirty (30) days
after the retiring trustee resigns or is removed, the retiring Trustee, the
Company, or the Securityholders of at least 10% in principal amount of the then
outstanding Securities may petition any court of competent jurisdiction, in the
case of the Trustee, at the expense of the Company, for the appointment of a
successor Trustee.
If the Trustee, after written request by any Securityholder who has
been a bona fide holder of a Security or Securities for at least six (6) months,
fails to comply with SECTION 7.10, such Securityholder may petition any court of
competent jurisdiction for the removal of the Trustee and the appointment of a
successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The Company shall mail a notice of its succession to each
Holder of a Security. The retiring Trustee shall promptly transfer all property
held by it as Trustee to the successor Trustee; PROVIDED all sums owing to the
Trustee hereunder have been paid and subject to the Lien provided for in SECTION
7.7. Notwithstanding replacement of the Trustee pursuant to this SECTION 7.8,
the Company's obligations under SECTION 7.7 shall continue for the benefit of
the retiring Trustee.
7.9 SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Trustee consolidates, merges or converts into, or transfers all
or substantially all of its corporate trust business to, another corporation
that is eligible under SECTION 7.10, the successor corporation without any
further act shall be the successor Trustee.
7.10 ELIGIBILITY; DISQUALIFICATION.
There shall at all times be a Trustee hereunder that is a corporation
organized and doing business under the laws of the United States of America or
of any state thereof (including the District of Columbia) that is authorized
under such laws to exercise corporate trust power, that is subject to
supervision or examination by federal or state authorities and that has (or, in
the case of a corporation included in a bank holding company system, the related
bank holding company shall have) a combined capital and surplus of at least
fifty million dollars ($50,000,000) as set forth in its (or its related bank
holding company's) most recent published annual report of condition.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA ss.ss. 310(a)(1), (2) and (5). The Trustee is subject to TIA
ss. 310(b).
7.11 PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
The Trustee is subject to TIA ss. 311(a), excluding any creditor
relationship listed in TIA ss. 311(b). A Trustee who has resigned or been
removed shall be subject to TIA ss. 311(a) to the extent indicated therein.
VIII. DISCHARGE OF INDENTURE
8.1 TERMINATION OF THE OBLIGATIONS OF THE COMPANY.
This Indenture shall cease to be of further effect if (a) either (i)
all outstanding Securities (other than Securities replaced pursuant to SECTION
2.7 hereof) have been delivered to the Trustee for cancellation or (ii) all
outstanding Securities have become due and payable at their scheduled maturity
or upon Repurchase at Holder's Option, Redemption or Repurchase Upon Change in
Control, and in either case the Company irrevocably deposits, prior to the
applicable due date, with the Trustee or the Paying Agent (if the Paying Agent
is not the Company or any of its Affiliates) cash sufficient to pay all amounts
due and owing on all outstanding Securities (other than Securities replaced
pursuant to SECTION 2.7 hereof) on the Maturity Date or an Option Purchase Date,
A-38
Redemption Date or Repurchase Date, as the case may be; (b) the Company pays to
the Trustee all other sums payable hereunder by the Company and the Company has
otherwise satisfied in full all of its obligations under this Indenture; (c) no
Default or Event of Default with respect to the Securities shall exist on the
date of such deposit; (d) such deposit will not result in a breach or violation
of, or constitute a Default or Event of Default under, this Indenture or any
other agreement or instrument to which the Company is a party or by which it is
bound; and (e) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent provided
for herein relating to the satisfaction and discharge of this Indenture have
been complied with; provided, however, that SECTIONS 2.2, 2.3, 2.4, 2.5, 2.6,
2.7, 2.8, 2.15, 2.16, 2.17, 3.5, 3.8, 4.1, 4.2, 4.5, 7.7 and 7.8 and ARTICLES
VIII and X shall survive any discharge of this Indenture until such time as the
Securities have been paid in full and there are no Securities outstanding.
8.2 APPLICATION OF TRUST MONEY.
The Trustee shall hold in trust money deposited with it pursuant to
SECTION 8.1. It shall apply the deposited money through the Paying Agent and in
accordance with this Indenture to the payment of the principal of and any unpaid
and accrued interest on the Securities.
8.3 REPAYMENT TO COMPANY.
The Trustee and the Paying Agent shall promptly notify the Company of,
and pay to the Company upon the written request of the Company, any excess money
held by them at any time. The Trustee and the Paying Agent shall pay to the
Company upon the written request of the Company any money held by them for the
payment of the principal of, premium, if any, or any accrued and unpaid interest
or additional interest on, the notes that remains unclaimed for two (2) years;
provided, however, that the Trustee or such Paying Agent, before being required
to make any such repayment, shall at the expense of the Company, cause to be
published once in a newspaper of general circulation in the City of New York or
cause to be mailed to each Holder, notice stating that such money remains
unclaimed and that, after a date specified therein, which shall not be less than
thirty (30) days from the date of such publication or mailing, any unclaimed
balance of such money then remaining will be repaid to the Company. After
payment to the Company, Securityholders entitled to the money must look to the
Company for payment as general creditors, subject to applicable law, and all
liability of the Trustee and the Paying Agent with respect to such money and
payment shall, subject to applicable law, cease.
8.4 REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any money in
accordance with SECTIONS 8.1 and 8.2 by reason of any legal proceeding or by
reason of any order or judgment of any court or governmental authority
enjoining, restraining or otherwise prohibiting such application, the
obligations of the Company under this Indenture and the Securities shall be
revived and reinstated as though no deposit had occurred pursuant to SECTIONS
8.1 and 8.2 until such time as the Trustee or Paying Agent is permitted to apply
all such money in accordance with SECTIONS 8.1 and 8.2; provided, however, that
if the Company has made any payment of amounts due with respect to any
Securities because of 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.
IX. AMENDMENTS
9.1 WITHOUT CONSENT OF HOLDERS.
The Company, with the consent of the Trustee, may amend or supplement
this Indenture or the Securities without notice to or the consent of any
Securityholder:
(a) to evidence the assumption of the Company's obligations by a
successor;
A-39
(b) to evidence the acceptance of appointment by a successor trustee;
(c) to make any changes or modifications to this Indenture necessary to
cure and ambiguity or correct any error in this Indenture, so long as
such action will not adversely affect the interests of the Holders,
including any such amendment made solely to conform the provisions of
this Indenture to the Company's offering memorandum;
(d) to qualify or maintain the qualification of this Indenture under
the TIA;
(e) to secure the obligations of the Company in respect of the
Securities;
(f) to establish the forms or terms of the Securities;
(g) to add to the covenants of the Company described in this Indenture
for the benefit of Securityholders; or
(h) to make other changes to this Indenture or forms or terms of the
Securities, provided no such change individually or in the aggregate
with all other such changes has or will have a material adverse effect
on the interests of the Holders.
9.2 WITH CONSENT OF HOLDERS.
The Company, with the consent of the Trustee, may amend or supplement
this Indenture or the Securities without notice to any Securityholder but with
the written consent of the Holders of at least a majority in aggregate principal
amount of the outstanding Securities. Subject to SECTIONS 6.4 and 6.7, the
Holders of a majority in aggregate principal amount of the outstanding
Securities may, by notice to the Trustee, waive compliance by the Company with
any provision of this Indenture or the Securities without notice to any other
Securityholder. Notwithstanding anything herein to the contrary, without the
consent of each Holder of each outstanding Security affected, an amendment,
supplement or waiver, including a waiver pursuant to SECTION 6.4, may not:
(a) extend the Maturity Date of the principal of, or the payment date
of any installment of interest on, any Security;
(b) reduce the principal amount of, or any premium, interest or
additional interest on, any Security;
(c) change the currency in which any Security is payable;
(d) impair the right to institute suit for the enforcement of any
payment on, or with respect to, any Security;
(e) reduce any amount payable upon redemption or repurchase of any
Security;
(f) change the Company's obligation to maintain an office or agency in
the places and for the purposes specified in this Indenture;
(g) affect the Company's obligation to redeem any Securities on a
Redemption Date in a manner adverse to the Holders;
(h) affect the Company's obligation to repurchase any Securities upon a
Change in Control in a manner adverse to the Holders;
(i) impair the right of Holders to convert Securities or reduce the
number of shares of Common Stock, the amount of cash or the amount of any other
property receivable upon conversion;
A-40
(j) reduce the percentage of the aggregate principal amount of the
outstanding Securities whose Holders must consent to a modification to or
amendment of any provision of this Indenture;
(k) reduce the quorum or voting requirements under this Indenture;
(l) reduce the percentage of the aggregate principal amount of the
outstanding Securities whose Holders must consent to a waiver of compliance with
any provision of this Indenture or a waiver of any Default or Event of Default;
or
(m) modify the provisions of this Indenture with respect to
modification and waiver (including waiver of a Default or an Event of Default),
except to increase the percentage required for modification or waiver or to
provide for consent of each affected Holder.
Promptly after an amendment, supplement or waiver under SECTION 9.1 or
this SECTION 9.2 becomes effective, the Company shall mail, or cause to be
mailed, to Securityholders a notice briefly describing such amendment,
supplement or waiver. Any failure of the Company to mail such notice shall not
in any way impair or affect the validity of such amendment, supplement or
waiver.
It shall not be necessary for the consent of the Holders under this
SECTION 9.2 to approve the particular form of any proposed amendment, supplement
or waiver, but it shall be sufficient if such consent approves the substance
thereof.
9.3 COMPLIANCE WITH TRUST INDENTURE ACT.
Every amendment, waiver or supplement to this Indenture or the
Securities shall comply with the TIA as then in effect.
9.4 REVOCATION AND EFFECT OF CONSENTS.
Until an amendment, supplement or waiver becomes effective, a consent
to it by a Holder is a continuing consent by the Holder and every subsequent
Holder of a Security or portion of a Security that evidences the same debt as
the consenting Holder's Security, even if notation of the consent is not made on
any Security. However, any such Holder or subsequent Holder may revoke the
consent as to its Security or portion of a Security if the Trustee receives the
notice of revocation before the date the amendment, supplement or waiver becomes
effective. An amendment, supplement or waiver becomes effective in accordance
with its terms and thereafter binds every Holder.
After an amendment, supplement or waiver becomes effective with respect
to the Securities, it shall bind every Holder unless it makes a change that
requires, pursuant to SECTION 9.2, the consent of each Holder affected. In that
case, the amendment, supplement or waiver shall bind each Holder of a Security
who has consented to it and, provided that notice of such amendment, supplement
or waiver is reflected on a Security that evidences the same debt as the
consenting Holder's Security, every subsequent Holder of a Security or portion
of a Security that evidences the same debt as the consenting Holder's Security.
9.5 NOTATION ON OR EXCHANGE OF SECURITIES.
If an amendment, supplement or waiver changes the terms of a Security,
the Trustee may require the Holder of the Security to deliver it to the Trustee.
The Trustee may place an appropriate notation on the Security as directed and
prepared by the Company about the changed terms and return it to the Holder.
Alternatively, if the Company so determines, the Company in exchange for the
Security shall issue and the Trustee shall authenticate a new Security that
reflects the changed terms.
A-41
9.6 TRUSTEE PROTECTED.
The Trustee shall sign any amended or supplemental indenture authorized
pursuant to this ARTICLE IX if the amendment or supplement does not affect the
rights, duties, liabilities or immunities of the Trustee. The Company may not
sign an amended or supplemental indenture until the Board of Directors approves
such amended or supplemental indenture. In executing any amended or supplemental
indenture, the Trustee shall be provided with an Opinion of Counsel and an
Officers' Certificate, and, subject to SECTION 7.1, shall be fully protected in
conclusively relying upon such documents.
X. CONVERSION
10.1 CONVERSION PRIVILEGE; RESTRICTIVE LEGENDS.
(a) Subject to the provisions of SECTIONS 3.4, 3.7, and 3.8, the
Securities shall be convertible into shares of Common Stock at any time on or
after the earlier of (x) the Registration Date or (y) two hundred seventy (270)
days following the Issue Date but prior to the close of business on the Maturity
Date, in accordance with this ARTICLE X and as set forth below. A Security, or
portion of a Security, which has been called for Redemption pursuant to
PARAGRAPH 6 of the Securities may be surrendered for conversion into shares of
Common Stock; provided, however, that such Security or portion thereof may be
surrendered for conversion pursuant to this paragraph only until the close of
business on the second (2nd) Business Day immediately preceding the Redemption
Date.
(b) The initial Conversion Price shall be $1.25 per share of Common
Stock. The Conversion Price shall be subject to adjustment in accordance with
SECTIONS 10.7 through 10.12.
(c) Whenever any event described in SECTION 10.1 shall occur which
shall cause the Securities to become convertible into shares of Common Stock,
the Company shall (i) promptly deliver, in accordance with SECTION 12.2, written
notice of the convertibility of the Securities to the Trustee and each Holder;
and (ii) publicly announce that the Securities have become convertible. Such
written notice and public announcement shall include a description of such
event, a description of the periods during which the Securities shall be
convertible and the procedures by which a Holder may convert its Securities. At
the Company's request, upon reasonable prior notice agreed to by the Trustee,
the Trustee shall, in the Company's name and at the Company's expense, deliver
to each Holder the written notice of the convertibility of the Securities
required by this SECTION 10.1(c); provided, that the form and content of such
notice shall be prepared by the Company.
(d) A Holder may convert a portion of the principal of such Security if
the portion is $1,000 principal amount or an integral multiple of $1,000
principal amount. Provisions of this Indenture that apply to conversion of all
of a Security also apply to conversion of a portion of it.
(e) Any shares of Common Stock issued upon conversion of a Security
shall bear the Private Placement Legend until such shares are sold pursuant to
an effective Registration Statement or until after the second anniversary of the
later of the Issue Date and the last date on which the Company or any Affiliate
was the owner of such shares or the Security (or any predecessor security) from
which such shares were converted (or such shorter period of time as permitted by
Rule 144(k) under the Securities Act or any successor provision thereunder) (or
such longer period of time as may be required under the Securities Act or
applicable state securities laws, as set forth in an Opinion of Counsel, unless
otherwise agreed by the Company and the Holder thereof).
10.2 EARLY CONVERSION INCENTIVE PAYMENT.
(a) Should a Holder elect to convert a Security on or after December
16, 2004, but prior to June 15, 2007, such Holder will receive, in addition to
the shares of Common Stock issued upon conversion of the Security based on the
applicable Conversion Price, an Early Conversion Incentive Payment. The "EARLY
A-42
CONVERSION INCENTIVE PAYMENT" will equal fifty percent (50%) of the aggregate
remaining unpaid interest payments payable through June 15, 2007.
(b) The Early Conversion Incentive Payment may be paid for, in whole or
in part, at the election of the Company, in cash or shares of Common Stock or in
any combination of cash and shares of Common Stock; provided, however, that the
Company will not issue fractional shares of Common Stock in payment of the Early
Conversion Incentive Payment and shall instead deliver a check in an amount
equal to the value of such fraction computed on the basis of the Closing Sale
Price on the Trading Day immediately before the Conversion Date (as defined
below). The Company will inform the Holder of the method of payment of the Early
Conversion Incentive Payment within five (5) Business Days of the submission of
the Conversion Notice and will make such payment of the Early Conversion
Incentive Payment within five (5) Business Days thereafter.
(c) The portion of the Early Conversion Incentive Payment to be paid in
shares of Common Stock shall be paid by the issuance of a number of shares of
Common Stock equal to a fraction:
(i) whose numerator is the dollar amount of such Early Conversion
Incentive Payment; and
(ii) whose denominator is the product of (I) the average of the Closing
Sale Prices for the five (5) consecutive Trading Days ending on, and
including, the third (3rd) Trading Day immediately preceding the
Conversion Date and (II) ninety five percent (95%).
10.3 CONVERSION PROCEDURE.
To convert a Security, a Holder must satisfy the requirements of
PARAGRAPH 10 of the Securities. As soon as practicable following the date (the
"CONVERSION DATE") on which the Holder satisfies all those requirements, the
Company shall deliver to the Holder through the Conversion Agent a certificate
for the number of full shares of Common Stock issuable upon the conversion, as
provided in PARAGRAPH 10 of the Securities, and a check for the amount of cash
payable in lieu of any fractional share. On and after the Conversion Date, the
person in whose name such certificate is to be registered shall be treated as a
shareholder of record of the Company, and all rights of the Holder of the
Security to be converted shall terminate, other than the right to receive the
shares of Common Stock and cash deliverable as provided in the preceding
sentence. A Holder of Securities is not entitled to any rights of a holder of
Common Stock until such Holder has converted its Securities into shares of
Common Stock, or is deemed to be a shareholder of record of the Company, as
provided in this paragraph, and then only to the extent such Securities are
deemed to have been so converted or such Holder is so deemed to be a shareholder
of record.
Except as provided in the Securities or in this ARTICLE X or in ARTICLE
III, no payment or adjustment will be made for accrued interest on, or
additional interest with respect to, a converted Security or for dividends on
any Common Stock issued on or prior to conversion. If any Holder surrenders a
Security for conversion after the close of business on the record date for the
payment of an installment of interest and prior to the related interest payment
date, then, notwithstanding such conversion, the interest payable with respect
to such Security on such interest payment date shall be paid on such interest
payment date to the Holder of record of such Security at the close of business
on such record date; provided, however, that such Security, when surrendered for
conversion, must be accompanied by payment to the Conversion Agent on behalf of
the Company of an amount equal to the interest payable on such interest payment
date on the portion so converted; provided further, however, that such payment
to the Conversion Agent described in the immediately preceding proviso in
respect of a Security surrendered for conversion shall not be required if such
Security is called for Redemption pursuant to SECTION 3.4 and PARAGRAPHS 6 AND 7
of the Securities; provided further, that, if the Company shall have, prior to
the Conversion Date with respect to a Security, defaulted in a payment of
interest on such Security, then in no event shall the Holder of such Security
who surrenders such Security for conversion be required to pay such defaulted
interest or the interest that shall have accrued on such defaulted interest
pursuant to SECTION 2.12 (it being understood that nothing in this SECTION 10.3
shall affect the Company's obligations under SECTION 2.12).
A-43
If a Holder converts more than one Security at the same time, the
number of full shares of Common Stock issuable upon such conversion shall be
based on the total principal amount of all Securities converted. Upon surrender
of a Security that is converted in part, the Trustee shall authenticate for the
Holder a new Security equal in principal amount to the unconverted portion of
the Security surrendered.
If the last day on which a Security may be converted is a Legal Holiday
in a place where a Conversion Agent is located, the Security may be surrendered
to that Conversion Agent on the next succeeding day that is not a Legal Holiday.
10.4 FRACTIONAL SHARES.
The Company will not issue fractional shares of Common Stock upon
conversion of Securities and instead will deliver a check in an amount equal to
the value of such fraction computed on the basis of the Closing Sale Price on
the Trading Day immediately before the Conversion Date.
10.5 TAXES ON CONVERSION.
If a Holder converts its Security, the Company shall pay any
documentary, stamp or similar issue or transfer tax or duty due on the issue, if
any, of shares of Common Stock upon the conversion. However, such Holder shall
pay any such tax or duty which is due because such shares are issued in a name
other than such Holder's name. The Conversion Agent may refuse to deliver a
certificate representing the shares of Common Stock to be issued in a name other
than such Holder's name until the Conversion Agent receives a sum sufficient to
pay any tax or duty which will be due because such shares are to be issued in a
name other than such Holder's name. Nothing herein shall preclude any tax
withholding required by law or regulation.
10.6 COMPANY TO PROVIDE STOCK.
The Company shall at all times reserve out of its authorized but
unissued Common Stock or Common Stock held in its treasury enough shares of
Common Stock to permit the conversion of all of the Securities into shares of
Common Stock.
All shares of Common Stock which may be issued upon conversion of the
Securities shall be validly issued, fully paid and non-assessable and shall be
free of preemptive or similar rights and free of any lien or adverse claim.
The Company shall comply with all securities laws regulating the offer
and delivery of shares of Common Stock upon conversion of Securities and shall
list such shares on each national securities exchange or automated quotation
system on which the Common Stock is listed.
10.7 ADJUSTMENT OF CONVERSION PRICE.
The Conversion Price shall be subject to adjustment from time to time
as follows:
(a) In case the Company shall (1) pay a dividend in shares of Common
Stock to all holders of Common Stock, (2) make a distribution in shares of
Common Stock to all holders of Common Stock, (3) subdivide the outstanding
shares of Common Stock into a greater number of shares of Common Stock or (4)
combine the outstanding shares of Common Stock into a smaller number of shares
of Common Stock, the Conversion Price in effect immediately prior to such action
shall be adjusted so that the Holder of any Security thereafter surrendered for
conversion shall be entitled to receive the number of shares of Common Stock
which such Holder would have owned immediately following such action had such
Securities been converted immediately prior thereto. Any adjustment made
pursuant to this SECTION 10.7(a) shall become effective immediately after the
record date in the case of a dividend or distribution and shall become effective
immediately after the effective date in the case of a subdivision or
combination.
A-44
(b) In case the Company shall issue rights or warrants to all holders
of Common Stock, entitling them, for a period expiring not more than sixty (60)
days immediately following the record date for the determination of holders of
Common Stock entitled to receive such rights or warrants, to subscribe for or
purchase shares of Common Stock (or securities convertible into or exchangeable
or exercisable for Common Stock), at a price per share (or having a conversion,
exchange or exercise price per share) that is less than the current market price
(as determined pursuant to SECTION 10.7(e)) of Common Stock on the record date
for the determination of holders of Common Stock entitled to receive such rights
or warrants, the Conversion Price shall be increased by multiplying the
Conversion Price in effect immediately prior to such record date by a fraction
of which (A) the numerator shall be the sum of (I) the number of shares of
Common Stock outstanding at the close of business on such record date and (II)
the number of shares of Common Stock which the aggregate exercise, conversion,
exchange or other price at which the Underlying Shares (as defined below) may be
subscribed for or purchased pursuant to such rights or warrants would purchase
at such current market price and (B) the denominator shall be the sum of (I)
number of shares of Common Stock outstanding at the close of business on such
record date and (II) the aggregate number of shares (the "UNDERLYING SHARES") of
Common Stock underlying all such issued rights or warrants (whether by exercise,
conversion, exchange or otherwise). Such increase shall become effective
immediately prior to the opening of business on the day following such record
date. In no event shall the Conversion Price be increased pursuant to this
SECTION 10.7(b).
(c) In case the Company shall dividend or distribute to all holders of
Common Stock shares of Capital Stock of the Company (other than Common Stock),
evidences of Indebtedness or other assets, or shall dividend or distribute to
all holders of Common Stock rights or warrants to subscribe for or purchase
securities (other than those referred to in SECTION 10.7(b)), if these
distributions, aggregated on a rolling twelve (12) month basis, have a per share
value exceeding fifteen percent (15%) of the market price of the Company's
common stock on the Trading Day immediately preceding the declaration of the
distribution, then in each such case the Conversion Price shall be decreased by
multiplying the Conversion Price in effect immediately prior to the close of
business on the record date for the determination of shareholders entitled to
such dividend or distribution by a fraction of which (A) the numerator shall be
the current market price of Common Stock (as determined pursuant to SECTION
10.7(e)) on such record date and (B) the denominator shall be an amount equal to
(I) such current market price plus (II) the fair market value (as determined in
good faith by the Board of Directors, whose determination shall be conclusive
and described in a Board Resolution), on such record date, of the portion of the
shares of Capital Stock, evidences of Indebtedness, assets, rights and warrants
to be dividended or distributed applicable to one share of Common Stock, such
increase to become effective immediately prior to the opening of business on the
day following such record date; provided, however, that if such denominator is
equal to or less than one, then, in lieu of the foregoing adjustment to the
Conversion Price, adequate provision shall be made so that each Holder shall
have the right to receive upon conversion of its Securities, in addition to the
shares of Common Stock issuable (and cash, if any, payable) upon such
conversion, an amount of shares of Capital Stock, evidences of Indebtedness,
assets, rights and/or warrants that such Holder would have received had such
Holder converted all of its Securities on such record date.
(d) In addition to the foregoing adjustments in SUBSECTIONS (a), (b)
and (c) above, the Company, from time to time and to the extent permitted by
law, may decrease the Conversion Price by any amount for a period of at least
twenty (20) days or such longer period as may be required by law, if the Board
of Directors has made a determination, which determination shall be conclusive,
that such decrease would be in the best interests of the Company. Such
Conversion Price increase shall be irrevocable during such period. The Company
shall give notice to the Trustee and cause notice of such decrease to be mailed
to each Holder of Securities at such Holder's address as the same appears on the
registry books of the Registrar, at least fifteen (15) days prior to the date on
which such decrease commences.
(e) For the purpose of any computation under SUBSECTIONS (a), (b) or
(c) above of this SECTION 10.7, the current market price per share of Common
Stock on the date fixed for determination of the shareholders entitled to
receive the issuance or distribution requiring such computation (the
"DETERMINATION DATE") shall be deemed to be the average of the Closing Sale
Prices for the ten (10) consecutive Trading Days immediately preceding the
Determination Date; provided, however, that (i) if the "ex" date for any event
(other than the event requiring such computation) that requires an adjustment to
A-45
the Conversion Price pursuant to SUBSECTION (a), (b), or (c), above occurs on or
after the tenth (10th) Trading Day prior to the Determination Date, and prior to
the "ex" date for the issuance or distribution requiring such computation, the
Closing Sale Price for each Trading Day prior to the "ex" date for such other
event shall be adjusted by multiplying such Closing Sale Price by the reciprocal
of the fraction by which the Conversion Price is so required to be adjusted as a
result of such other event, (ii) if the "ex" date for any event (other than the
event requiring such computation) that requires an adjustment to the Conversion
Price pursuant to SUBSECTION (a), (b), or (c), above occurs on or after the "ex"
date for the issuance or distribution requiring such computation and on or prior
to the Determination Date, the Closing Sale Price for each Trading Day on and
after the "ex" date for such other event shall be adjusted by multiplying such
Closing Sale Price by the same fraction by which the Conversion Price is so
required to be adjusted as a result of such other event, and
(f) if the "ex" date for the event requiring such computation is on or
prior to the Determination Date, after taking into account any adjustment
required pursuant to CLAUSE (i) OR (ii) of this proviso, the Closing Sale Price
for each Trading Day on and after such "ex" date shall be adjusted by adding
thereto the amount of any cash and the fair market value (as determined in good
faith by the Board of Directors in a manner consistent with any determination of
such value for the purposes of this SECTION 10.7, whose determination shall be
conclusive and described in a Resolution of the Board of Directors) of the
evidences of Indebtedness, shares of Capital Stock or other securities or assets
or cash being distributed (in the event requiring such computation) applicable
to one share of Common Stock as of the close of business on the day before such
"ex" date.
For purposes of this subsection, the term "ex" date, (i) when used with
respect to any issuance or distribution, means the first date on which the
Common Stock trades the 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, (ii) when used with respect to any
subdivision or combination of shares of Common Stock, means the first date on
which the Common Stock trades the regular way on such exchange or in such market
after the time at which such subdivision or combination becomes effective, and
(iii) when used with respect to any tender offer or exchange offer means the
first date on which the Common Stock trades the regular way on such exchange or
in such market after the expiration time of such tender offer or exchange offer
(as it may be amended or extended).
10.8 NO ADJUSTMENT.
No adjustment in the Conversion Price shall be required if Holders may
participate in a transaction that would otherwise give rise to an adjustment
under SECTION 10.7, so long as the distributed assets or securities the Holders
would receive upon conversion of the Securities, if convertible, exchangeable,
or exercisable, are convertible, exchangeable, or exercisable, as applicable,
without any loss of rights or privileges for a period of at least sixty (60)
days following the Conversion Date.
No adjustment in the Conversion Price shall be required:
(a) upon the issuance of shares of Common Stock or any securities
exchangeable into Common Stock or carrying the right to purchase any of the
foregoing, except as stated above;
(b) for a change in the par value or no par value of the Common Stock;
or
(c) for accrued and unpaid interest, including contingent interest.
No adjustment in the Conversion Price shall be required unless the
adjustment would require an increase or decrease of at least one percent (1%) of
the Conversion Price as last adjusted (or, if never adjusted, the initial
Conversion Price); provided, however, that any adjustments which by reason of
this SECTION 10.8 are not required to be made shall be carried forward and taken
into account in any subsequent adjustment. All calculations under this ARTICLE X
shall be made to the nearest cent or to the nearest one-millionth of a share, as
the case may be.
A-46
10.9 ADJUSTMENTS FOR TAX PURPOSES.
The Company may make such increases in the Conversion Price, in
addition to those required by SECTION 10.7 hereof, as it determines to be
advisable in order that any stock dividend, subdivision of shares, distribution
or rights to purchase stock or securities or distribution of securities
convertible into or exchangeable for stock made by the Company or to its
shareholders will not be taxable to the recipients thereof.
10.10 NOTICE OF ADJUSTMENT.
Whenever the Conversion Price is adjusted, the Company shall promptly
mail to Holders at the addresses appearing on the Registrar's books a notice of
the adjustment and file with the Trustee an Officers' Certificate briefly
stating the facts requiring the adjustment and the manner of computing it. The
certificate shall be conclusive evidence of the correctness of such adjustment.
At the Company's request, upon reasonable prior notice agreed to by the Trustee,
the Trustee shall, in the Company's name and at the Company's expense, mail to
Holders at the addresses appearing on the Registrar's books such notice of
adjustment required by this SECTION 10.10; provided, that the form and content
of such notice shall be prepared by the Company.
10.11 NOTICE OF CERTAIN TRANSACTIONS.
In the event that:
(1) the Company takes any action, or becomes aware of any event, which
would require an adjustment in the Conversion Price,
(2) the Company takes any action that would require a supplemental
indenture pursuant to SECTION 10.12, or
(3) there is a dissolution or liquidation of the Company,
the Company shall mail to Holders at the addresses appearing on the Registrar's
books and the Trustee a written notice stating the proposed record, effective or
expiration date, as the case may be, of any transaction referred to in CLAUSE
(1), (2) or (3) of this SECTION 10.11. The Company shall mail such notice at
least twenty (20) days before such date; however, failure to mail such notice or
any defect therein shall not affect the validity of any transaction referred to
in CLAUSE (1), (2) or (3) of this SECTION 10.11. At the Company's request, upon
reasonable prior notice agreed to by the Trustee, the Trustee shall, in the
Company's name and at the Company's expense, mail to Holders at the addresses
appearing on the Registrar's books such written notice required by this SECTION
10.11; provided, that the form and content of such notice shall be prepared by
the Company.
10.12 EFFECT OF RECLASSIFICATIONS, CONSOLIDATIONS, MERGERS, BINDING
SHARE EXCHANGES OR SALES ON CONVERSION PRIVILEGE.
If any of the following shall occur, namely: (i) any reclassification
or change in the Common Stock issuable upon conversion of Securities (other than
a change in par value, or from par value to no par value, or from no par value
to par value, or as a result of a subdivision or combination), (ii) any
consolidation, merger or binding share exchange to which the Company is a party
other than a merger in which the Company is the continuing Person and which does
not result in any reclassification of, or change (other than a change in name,
or par value, or from par value to no par value, or from no par value to par
value or as a result of a subdivision or combination) in, the Common Stock or
(iii) any sale, transfer, lease, conveyance or other disposition of all or
substantially all of the property or assets of the Company, then the Company or
such successor or purchasing Person, as the case may be, shall, as a condition
precedent to such reclassification, change, consolidation, merger, binding share
exchange, sale, transfer, lease, conveyance or disposition, execute and deliver
to the Trustee a supplemental indenture in form reasonably satisfactory to the
Trustee providing that, at and after the effective time of such
A-47
reclassification, change, consolidation, merger, binding share exchange, sale,
transfer, lease, conveyance or disposition, the Holder of each Security then
outstanding shall have the right to convert such Security into the kind and
amount of shares of stock and other securities and property (including cash)
receivable upon such reclassification, change, consolidation, merger, binding
share exchange, sale, transfer, lease, conveyance or disposition by a holder of
the number of shares of Common Stock deliverable upon conversion of such
Security immediately prior to such reclassification, change, consolidation,
merger, binding share exchange, sale, transfer, lease, conveyance or
disposition, assuming that such Holder would not have exercised any rights of
election that such Holder would have had as a holder of Common Stock to select a
particular type of consideration. Such supplemental indenture shall provide for
adjustments of the Conversion Price which shall be as nearly equivalent as may
be practicable to the adjustments of the Conversion Price provided for in this
ARTICLE X. If, in the case of any such consolidation, merger, binding share
exchange, sale, transfer, lease, conveyance or disposition, the stock or other
securities and property (including cash) receivable thereupon by a holder of
Common Stock includes shares of stock or other securities and property of a
Person other than the successor or purchasing Person, as the case may be, in
such consolidation, merger, binding share exchange, sale, transfer, lease,
conveyance or disposition, then such supplemental indenture shall also be
executed by such other Person and shall contain such additional provisions to
protect the interests of the Holders of the Securities as the Board of Directors
in good faith shall reasonably determine necessary by reason of the foregoing
(which determination shall be described in a Board Resolution). The provision of
this SECTION 10.12 shall similarly apply to successive consolidations, mergers,
binding share exchanges, sales, transfers, leases, conveyances or dispositions.
In the event a supplemental indenture shall have been executed pursuant
to this SECTION 10.12, the Company shall promptly file with the Trustee an
Officers' Certificate briefly stating the reasons therefor, the kind or amount
of shares of stock or securities or property (including cash) receivable by
Holders of the Securities upon the conversion of their Securities after any such
reclassification, change, consolidation, merger, binding share exchange, sale,
transfer, lease, conveyance or disposition and any adjustment to be made with
respect thereto.
10.13 TRUSTEE'S DISCLAIMER.
The Trustee has no duty to make any calculations under this ARTICLE X,
to determine when an adjustment under this ARTICLE X should be made, how it
should be made or what such adjustment should be, but may accept as conclusive
evidence of the correctness of any such adjustment, and shall be protected in
conclusively relying upon, the Officers' Certificate with respect thereto which
the Company is obligated to file with the Trustee pursuant to SECTION 10.10
hereof. The Trustee makes no representation as to the validity or value of any
securities or assets issued upon conversion of Securities, and the Trustee shall
not be responsible for the failure by the Company to comply with any provisions
of this ARTICLE X.
The Trustee shall not be under any responsibility to determine the
correctness of any provisions contained in any supplemental indenture executed
pursuant to SECTION 10.12, but may accept as conclusive evidence of the
correctness thereof, and shall be protected in relying upon, the Officers'
Certificate with respect thereto which the Company is obligated to file with the
Trustee pursuant to SECTION 10.12 hereof.
XI. CONTINGENT INTEREST
11.1 CONTINGENT INTEREST.
(a) The Company shall pay Contingent Interest (as defined below) with
respect to the Securities in the event the Company pays Cash Dividends on its
Common Stock. The amount of "CONTINGENT INTEREST" payable will equal the product
of: (i) one hundred percent (100%) of the per share Cash Dividend paid on the
Common Stock and (ii) the number of shares of Common Stock issuable upon
conversion of each Holder's Security. The Company will pay Contingent Interest
only in cash.
(b) In the event of any merger, consolidation, or a sale of
substantially all of the Company's assets, whereby any one of the three
conditions set forth in SECTION 3.8(l) are met, yet the event is not deemed to
A-48
be a Change in Control, and subsequent to the event date, the Securities remain
an outstanding obligation of the surviving entity, notwithstanding any changes
to the payment obligations outlined in this Indenture, or any future
supplemental indenture, Holders will be entitled to receive dividend protection
in the form of Contingent Interest.
11.2 PAYMENT OF CONTINGENT INTEREST.
The Contingent Interest will be paid on the payment date for the
regular semi-annual interest payment.
11.3 CONTINGENT INTEREST NOTIFICATION.
In the event the Company is required to pay Contingent Interest, the
Company will shall publicly disseminate in a press release or publish on the
Company's website a notice the amount of the Cash Dividend and Contingent
Interest.
XII. MISCELLANEOUS
12.1 TRUST INDENTURE ACT CONTROLS.
If any provision of this Indenture limits, qualifies or conflicts with
another provision which is required to be included in this Indenture by the TIA,
the required provision of the TIA shall control.
12.2 NOTICES.
Any notice or communication by the Company or the Trustee to any other
is duly given if in writing and delivered in person, mailed by first-class mail
or by express delivery to the other party's address stated in this SECTION 12.2.
The Company or the Trustee by notice to the other may designate additional or
different addresses for subsequent notices or communications.
Any notice or communication to a Holder shall be mailed to its address
shown on the register kept by the Registrar. Failure to mail a notice or
communication to a Holder or any defect in it shall not affect its sufficiency
with respect to other Holders.
If a notice or communication is mailed in the manner provided above, it
is duly given, whether or not the addressee receives it.
If the Company mails a notice or communication to Holders, it shall
mail a copy to the Trustee and each Security Agent at the same time.
All notices or communications shall be in writing.
The Company's address is: Terremark Worldwide, Inc.
2601 South Bayshore Drive
Miami, Florida 33133
Attn: Chief Financial Officer
The Trustee's address is: The Bank of New York Trust Company, N.A.
10161 Centurion Parkway
Jacksonville, Florida 32256
Attention: Corporate Trust Administration
A-49
12.3 COMMUNICATION BY HOLDERS WITH OTHER HOLDERS.
Holders may communicate pursuant to TIA ss. 312(b) with other Holders
with respect to their rights under this Indenture or the Securities. The
Company, the Trustee, the Registrar and anyone else shall have the protection of
TIA ss. 312(c).
12.4 CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Company to the Trustee to take
any action under this Indenture, the Company shall furnish to the Trustee:
(i) an Officers' Certificate stating that, in the opinion of the
signers, all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with; and
(ii) an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent have been complied with.
Each signer of an Officers' Certificate or an Opinion of Counsel may
(if so stated) rely, effectively, upon an Opinion of Counsel as to legal matters
and an Officers' Certificate or certificates of public officials as to factual
matters if such signer reasonably and in good faith believes in the accuracy of
the document relied upon.
12.5 STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
Each Officers' Certificate or Opinion of Counsel with respect to
compliance with a condition or covenant provided for in this Indenture shall
include:
(i) a statement that the person making such certificate or opinion has
read such covenant or condition;
(ii) 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;
(iii) a statement that, in the opinion of such person, he or she has
made such examination or investigation as is necessary to enable him or
her to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(iv) a statement as to whether or not, in the opinion of such person,
such condition or covenant has been complied with.
12.6 RULES BY TRUSTEE AND AGENTS.
The Trustee may make reasonable rules for action by or at a meeting of
Holders. The Registrar, Paying Agent or Conversion Agent may make reasonable
rules and set reasonable requirements for their respective functions.
12.7 LEGAL HOLIDAYS.
A "LEGAL HOLIDAY" is a Saturday, a Sunday or a day on which banking
institutions are not required to be open in the City of New York, in the State
of New York or in the city in which the Trustee administers its corporate trust
business. If a payment date is a Legal Holiday at a place of payment, payment
may be made at that place on the next succeeding day that is not a Legal
Holiday, and no interest shall accrue on that payment for the intervening
period.
A "BUSINESS DAY" is a day other than a Legal Holiday.
A-50
12.8 DUPLICATE ORIGINALS.
The parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together represent the same
agreement. Delivery of an executed counterpart by facsimile shall be effective
as delivery of a manually executed counterpart thereof.
12.9 GOVERNING LAW.
The laws of the State of New York, without regard to principles of
conflicts of law, shall govern this Indenture and Securities.
12.10 NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret another indenture, loan or
debt agreement of the Company or any of its Subsidiaries. Any such indenture,
loan or debt agreement may not be used to interpret this Indenture.
12.11 SUCCESSORS.
All agreements of the Company in this Indenture and the Securities
shall bind its successors. All agreements of the Trustee in this Indenture shall
bind its successors.
12.12 SEPARABILITY.
In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby
and a Holder shall have no claim therefor against any party hereto.
12.13 TABLE OF CONTENTS, HEADINGS, ETC.
The Table of Contents, Cross-Reference Table and headings of the
Articles and SECTIONS of this Indenture have been inserted for convenience of
reference only, are not to be considered a part hereof and shall in no way
modify or restrict any of the terms or provisions hereof.
A-51
12.14 CALCULATIONS IN RESPECT OF THE SECURITIES.
The Company and its agents shall make all calculations under this
Indenture and the Securities in good faith. In the absence of manifest error,
such calculations shall be final and binding on all Holders. The Company shall
provide a copy of such calculations to the Trustee as required hereunder, and,
absent such manifest error, the Trustee shall be entitled to conclusively rely
on the accuracy of any such calculation without independent verification.
12.15 FORCE MAJEURE.
In no event shall the Trustee be responsible or liable for any failure
or delay in the performance of its obligations hereunder arising out of or
caused by, directly or indirectly, forces beyond its control, including, without
limitation strikes, work stoppages, accidents, acts of war or terrorism, civil
or military disturbances, nuclear or natural catastrophes or acts of God, and
interruptions, loss or malfunctions of utilities, communications or computer
(software and hardware) services; it being understood that the Trustee shall use
reasonable efforts which are consistent with accepted practices in the banking
industry to resume performance as soon as practicable under the circumstances.
12.16 WAIVER OF JURY TRIAL.
EACH OF THE COMPANY AND THE TRUSTEE HEREBY IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY
IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE, THE
SECURITIES OR THE TRANSACTION CONTEMPLATED HEREBY.
***THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK;
SIGNATURE PAGE FOLLOWS***
A-52
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed as of the date first above written.
TERREMARK WORLDWIDE, INC.
By:
-----------------------------------------
Name: Jose A. Segrera
Title: Executive Vice President and
Chief Financial Officer
THE BANK OF NEW YORK TRUST COMPANY, N.A.
By:
-----------------------------------------
Name:
Title:
A-53
EXHIBIT A
FORM OF SECURITY
TERREMARK WORLDWIDE, INC.
9% SENIOR CONVERTIBLE NOTE DUE 2009
13. INTEREST.
Terremark Worldwide, Inc., a Delaware corporation (the "COMPANY"),
promises to pay interest on the principal amount of this Security at the rate
per annum shown above. The Company will pay interest, payable semi-annually in
arrears, on June 15 and December 15 of each year, with the first payment to be
made on December 15, 2004. Interest on the Securities will accrue on the
principal amount from, and including, the most recent date to which interest has
been paid or provided for or, if no interest has been paid, from, and including,
June 14, 2004, in each case to, but excluding, the next interest payment date or
Maturity Date, as the case may be. Interest will be computed on the basis of a
360-day year of twelve 30-day months.
14. MATURITY.
The Securities will mature on June 15, 2009.
15. METHOD OF PAYMENT.
Except as provided in the Indenture (as defined below), the Company
will pay interest on the Securities to the persons who are Holders of record of
Securities at the close of business on the record date set forth on the face of
this Security next preceding the applicable interest payment date. Holders must
surrender Securities to a Paying Agent to collect the principal amount,
Redemption Price or Repurchase Price of the Securities, plus, if applicable,
accrued and unpaid interest, if any, or any Make-Whole Payment or Make-Whole
Premium, if applicable, payable as herein provided upon Redemption or Repurchase
Upon Change in Control, as the case may be (provided, that Holders that have
converted Securities that have been called for a Provisional Redemption shall be
entitled to receive the Make-Whole Payment in accordance with the terms of the
Indenture without any such surrender). The Company will pay, in money of the
United States that at the time of payment is legal tender for payment of public
and private debts, all amounts due in cash with respect to the Securities, which
amounts shall be paid (A) in the case this Security is in global form, by wire
transfer of immediately available funds to the account specified by the Holder
hereof and (B) in the case this Security is held in other than global form, by
wire transfer of immediately available funds to the account specified by the
Holder hereof or, if no such account is specified, by mailing a check to such
Holder's address shown in the register of the Registrar.
16. PAYING AGENT, REGISTRAR, CONVERSION AGENT.
Initially, The Bank of New York Trust Company, N.A., a national banking
association (the "TRUSTEE"), will act as Paying Agent, Registrar and Conversion
Agent. The Company may change any Paying Agent, Registrar or Conversion Agent
without notice.
17. INDENTURE.
The Company issued the Securities under an Indenture dated as of June
14, 2004 (the "INDENTURE") between the Company and the Trustee. The terms of the
Securities include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939 as amended and in
effect from time to time (the "TIA"). The Securities are subject to all such
terms, and Holders are referred to the Indenture and the TIA for a statement of
such terms. The Securities are general unsecured senior obligations of the
Company limited to $75,000,000 aggregate principal amount ($86,250,000 if the
A-1
Initial Purchaser has elected to exercise in full the Option to purchase up to
an additional $11,250,000 aggregate principal amount of the Securities), except
as otherwise provided in the Indenture (except for Securities issued in
substitution for destroyed, mutilated, lost or stolen Securities). Terms used
herein without definition and which are defined in the Indenture have the
meanings assigned to them in the Indenture.
18. PROVISIONAL REDEMPTION.
The Company shall have the right, at the Company's option, at any time,
and from time to time, on a Redemption Date on or after June 15, 2007, to redeem
(a "PROVISIONAL REDEMPTION") all or any part of the Securities at a price equal
to the "REDEMPTION PRICE" (as defined below) plus the Make-Whole Payment (as
defined below) if: (A) for each of at least twenty (20) Trading Days in any
consecutive thirty (30) Trading Days ending on, and including, the Trading Day
immediately preceding the date (the "NOTICE DATE") of mailing of the notice of
Provisional Redemption as provided in SECTION 3.4 of the Indenture, the Closing
Sale Price exceeds two hundred percent (200%) of the Conversion Price in effect
on such Trading Day; and (B) on the Redemption Date and for a period of at least
thirty (30) days thereafter, a registration statement covering the Securities
and the shares of Common Stock issuable upon conversion of the Securities is
effective and available for use; and (C) no continuing Default or Event of
Default exists that has not been cured or waived, in accordance herewith, on or
before such Redemption Date.
If redeemed during the twelve (12) month period commencing on June 15
of the years set forth below, the "REDEMPTION PRICE" shall be (expressed as a
percentage of principal amount):
YEAR REDEMPTION PRICE
---- ----------------
2007 104.50%
2008 and thereafter 102.25%
The "MAKE-WHOLE PAYMENT" with respect to a Security subject to a
Provisional Redemption on a Redemption Date shall mean an amount equal to the
sum of: (a) fifty percent (50%) of all remaining scheduled interest payments on
such Security from, and including, such Redemption Date through the Maturity
date; (b) any defaulted interest that the Company shall have failed to pay with
respect to such Security on or prior to such Redemption date, including any
unpaid interest that has accrued, in accordance with SECTION 2.12 of the
Indenture, to, and including, such Redemption Date on any such defaulted
interest; (c) any unpaid additional interest that has accrued with respect to
such Security to, but excluding, such Redemption Date. As soon as practicable
after the time the amount of the Make-Whole Payment shall have been calculated,
but no later than the second (2nd) Business Day immediately preceding such
Redemption Date, the Company shall publicly disseminate the amount of the
Make-Whole Payment in a press release or publish it on the Company's website.
The Make-Whole Payment shall be paid by the Company on all Securities called for
Provisional Redemption, including, without limitation, any Securities that have
been converted into shares of Common Stock on or after the Notice Date and
before such Redemption Date. In no event shall the Make-Whole Payment with
respect to a Security that is called for Provisional Redemption be reduced by
any amount of accrued and unpaid interest; provided, however, that in the event
such Redemption Date is an interest payment date, then the Make-Whole Payment
shall be reduced by any accrued and unpaid interest to, but excluding, the
Redemption Date, which accrued and unpaid interest shall instead be paid by the
Company on the Redemption Date to the Holder of record of such Security at the
close of business on the record date for such interest payment. In no event
shall a Holder that has converted, in accordance herewith, such Holder's
Security into shares of Common Stock, which Security has been called for
Provisional Redemption, be required to surrender any such shares of Common Stock
in order to be entitled to receive the Make-Whole Payment with respect to such
Security.
Subject to the terms and conditions of the Indenture, the Make-Whole
Payment may be paid for, in whole or in part, at the election of the Company, in
cash or shares of Common Stock or in any combination of cash and shares of
Common Stock; provided, however, that (a) no portion of the Make-Whole Payment
shall be paid in shares of Common Stock unless the conditions set forth in
SECTION 3.1(C)(ix) of the Indenture are satisfied; (b) the Redemption Price
shall be exclusively paid in cash; and (c) the Company will not issue fractional
shares of Common Stock in payment of the Make-Whole Payment and shall instead
A-2
deliver a check in an amount equal to the value of such fraction computed on the
basis of the Closing Sale Price on the Trading Day immediately before the
Redemption Date. Subject to the provisions of the Indenture, shares of Common
Stock issued as payment for any portion of the Make-Whole Payment shall be
valued at ninety five percent (95%) of the average Closing Sale Price for the
five (5) consecutive Trading Days ending on, and including, the third
(3rd)Trading Day prior to the Redemption Date, which average shall be
appropriately adjusted in the good faith determination of the Board of Directors
(whose determination shall be described in a Board Resolution) to account for
the occurrence, during such five (5) Trading Day period, of a stock split, stock
dividend or a subdivision or combination of the Company's Common Stock or a
similar event; provided, however, that fractional shares of Common Stock shall
be paid in cash as provided in SECTION 3.1(c)(iii)(c) of the Indenture.
Upon surrender to the Paying Agent of a Security subject to Redemption,
such Security shall be paid, to the Holder surrendering such Security, at the
Aggregate Redemption Payment Amount. If the Redemption Date is an interest
payment date, the Company shall pay, on such Redemption Date, the accrued and
unpaid interest, if any, to, but excluding, the Redemption Date to the Holder of
record of such Security at the close of business on the record date for such
interest payment, and such accrued and unpaid interest shall not be paid to the
Holder submitting such Security for Redemption (unless such Holder was the
Holder of record of such Security at the close of business on the record date
for such interest payment).
If the Paying Agent (other than the Company) holds on the Redemption
Date money (and, if applicable as provided in the Indenture and in accordance
with the Indenture, shares of Common Stock) sufficient to pay the Aggregate
Redemption Payment Amount with respect to all Securities to be redeemed, then
(unless there shall be a Default in the payment of the Aggregate Redemption
Payment Amount or, in the case of a Provisional Redemption on a Redemption Date
that is also an interest payment date, a Default in the payment of the accrued
and unpaid interest, if any, to, but excluding, the Redemption Date to the
Holder(s) of record of such Securities at the close of business on the record
date for such interest payment) on and after the Redemption Date such Securities
shall be deemed to be no longer outstanding, interest on such Securities shall
cease to accrue, and such Securities shall be deemed paid whether or not such
Securities are delivered to the Paying Agent. Thereafter, all rights of the
Holders of such Securities shall terminate with respect to such Security, other
than the right to receive the Aggregate Redemption Payment Amount.
7. NOTICE OF REDEMPTION.
Notice of Redemption will be mailed at least twenty (20) days but not
more than sixty (60) days before the Redemption Date to each Holder of
Securities to be redeemed at its address appearing in the security register.
Securities in denominations larger than $1,000 principal amount may be redeemed
in part but only in integral multiples of $1,000 principal amount.
8. REPURCHASE AT OPTION OF HOLDER UPON A CHANGE IN CONTROL.
Subject to the terms and conditions of the Indenture, in the event of a
Change in Control, each Holder of the Securities shall have the right, at the
Holder's option, to require the Company to repurchase such Holder's Securities
including any portion thereof which is $1,000 in principal amount or any
integral multiple thereof on a date selected by the Company (the "REPURCHASE
DATE"), which date is no later than forty five (45) days after the date of the
Change in Control, at a price payable in cash equal to one hundred percent
(100%) of the principal amount of such Security, plus accrued and unpaid
interest (including any Contingent Interest and additional amounts, if any) to,
and including, the Repurchase Date.
Within twenty five (25) days after the occurrence of the Change in
Control, the Company must mail, or cause to be mailed, notice of the occurrence
of such Change in Control to each Holder. Such notice shall include, among other
things, a description of the procedure which a Holder must follow to exercise
the Repurchase Right. To exercise the Repurchase Right, a Holder of Securities
must, in accordance with the provisions of the Indenture, (i) deliver, no later
than the close of business on the second (2nd) Business Day immediately
preceding the Repurchase Date, a Purchase Notice to the Company (if it is acting
as its own Paying Agent) or to the Paying Agent; and (ii) deliver, at any time
A-3
after the delivery of such Purchase Notice, the Securities with respect to which
the Holder is exercising its Repurchase Right (together with all necessary
endorsements).
A "CHANGE IN CONTROL" shall be deemed to have occurred at such time as:
(i) any "person" or "group" (as such terms are used for purposes of
SECTIONS 13(d) and 14(d) of the Exchange Act) is or becomes the
"beneficial owner" (as such term is used in Rule 13d-3 under the
Exchange Act), directly or indirectly, of fifty percent (50%) or more
of the total voting power of all classes of the Company's Capital Stock
entitled to vote generally in the election of directors calculated on a
fully-diluted basis; provided, however, this does not include any
"person", or any persons acting together which would constitute a
"group" for purposes of Section 13(d) of the Exchange Act, together
with any affiliates thereof, that, as of June 14, 2004, beneficially
own (as defined in Rule 13d-3 under the Exchange Act) greater than
eight percent (8%) of the total voting power of all classes of the
Company's Capital Stock entitled to vote generally in the election of
directors calculated on a fully-diluted basis; or
(ii) the Company consolidates with, or merges with or into, another
person or any person consolidates with, or merges with or into, the
Company, in any such event other than pursuant to a transaction where
the persons that "beneficially owned," directly or indirectly, the
shares of the Company's Voting Stock immediately prior to such
transaction, "beneficially own," directly or indirectly, immediately
after such transaction, shares of the continuing, surviving or
acquiring corporation's Voting Stock representing at least a majority
of the total voting power of all outstanding classes of the Voting
Stock of the continuing, surviving or acquiring corporation; or
(iii) the sale, transfer, lease, conveyance or other disposition of all
or substantially all of the assets of the Company to any "person" or
"group" (as such terms are used in SECTIONS 13(d) and 14(d) of the
Exchange Act), including any group acting for the purpose of acquiring,
holding, voting or disposing of securities within the meaning of Rule
13d-5(b)(1) under the Exchange Act;
provided, however, that a Change in Control will not be deemed to have occurred
if at least eighty percent (80%) of the consideration (other than cash payments
for fractional shares or pursuant to statutory appraisal rights) in the merger
or consolidation otherwise constituting the Change in Control consists of common
stock, depositary receipts or other certificates representing common equity
interests and any associated rights traded on a U.S. national securities
exchange or quoted on The Nasdaq National Market (or which will be so traded or
quoted when issued or exchanged in connection with such Change in Control), and,
as a result of such transaction or transactions, the Securities become
convertible solely into such common stock, depositary receipts or other
certificates representing common equity interests and associated rights.
If a Change in Control occurs, and at least fifty percent (50%) of the
consideration for the Common Stock in the transaction or transactions
constituting the Change in Control consists of cash, the Holder may elect to
receive the greater of (x) the Total Redemption Amount (as defined below) or (y)
the Repurchase Price.
The "Total Redemption Amount" will equal the sum of: (i) the Cash
Buyout Redemption Price, which will equal the product of (x) the average Closing
Sale Price for the five (5) Trading Days immediately prior to the Company's
public announcement of the Change in Control and (y) the quotient of $1,000
divided by the then applicable Conversion Price; and (ii) the "Takeover
Make-Whole Premium," as set forth in the table below:
Period during which Takeover Make-Whole Premium
Change in Control occurs per $1,000 of principal
------------------------ -----------------------
Up to December 15, 2004 $270.0
December 16, 2004 - June 15, 2005 $225.0
June 16, 2005 - December 15, 2005 $180.0
December 16, 2005 - June 15, 2006 $135.0
A-4
June 16, 2006 - December 15, 2006 $90.0
December 16, 2006 - June 15, 2007 $90.0
June 16, 2007 - December 15, 2007 $90.0
December 16, 2007 - June 15, 2008 $90.0
June 16, 2008 - December 15, 2008 $45.0
December 16, 2008 - June 15, 2009 $0.0
The Total Redemption Amount shall be paid in cash. If a Holder elects
to receive the Takeover Make-Whole Premium as part of the Total Redemption
Amount, such payment will preclude any Early Conversion Incentive Payments under
the Securities.
9. CONVERSION.
The Securities shall be convertible into shares of Common Stock at any
time on or after the earlier of (x) the Registration Date or (y) 270 days
following the Issue Date but prior to the close of business on the Maturity
Date, in accordance with the terms of the Indenture and as set forth below. A
Security, or portion of a Security, which has been called for Redemption
pursuant to PARAGRAPH 6 may be surrendered in integral multiples of $1,000
principal amount for conversion into shares of Common Stock; provided, however,
that such Security or portion thereof may be surrendered for conversion pursuant
to this paragraph only until the close of business on the second (2nd) Business
Day immediately preceding the Redemption Date.
The initial Conversion Price is $1.25 per share, subject to adjustment
in the event of certain circumstances as specified in the Indenture. The Company
will deliver a check in lieu of any fractional share. On conversion, no payment
or adjustment for any unpaid and accrued interest on, or additional interest
with respect to, the Securities will be made, except as specified in the
Indenture.
To convert a Security, a Holder must (1) complete and sign the
Conversion Notice, with appropriate signature guarantee, on the back of the
Security, (2) surrender the Security to a Conversion Agent, (3) furnish
appropriate endorsements and transfer documents if required by the Registrar or
Conversion Agent and (4) pay any tax or duty if required pursuant to the
Indenture. A Holder may convert a portion of a Security if the portion is $1,000
principal amount or an integral multiple of $1,000 principal amount.
Any shares of Common Stock issued upon conversion of a Security shall
bear the Private Placement Legend until such shares are sold pursuant to an
effective registration statement or after the second anniversary of the later of
the Issue Date and the last date on which the Company or any Affiliate was the
owner of such shares or the Security (or any predecessor security) from which
such shares were converted (or such shorter period of time as permitted by Rule
144(k) under the Securities Act or any successor provision thereunder) (or such
longer period of time as may be required under the Securities Act or applicable
state securities laws, as set forth in an Opinion of Counsel, unless otherwise
agreed by the Company and the Holder thereof).
10. EARLY CONVERSION INCENTIVE PAYMENT.
In the event that a Holder elects to convert a Security on or after
December 16, 2004, but prior to June 15, 2007, such Holder will be entitled to
receive, in addition to the shares of Common Stock issued upon conversion of the
Security based on the applicable Conversion Price, an Early Conversion Incentive
Payment. The "EARLY CONVERSION INCENTIVE PAYMENT" will equal fifty percent (50%)
of the aggregate remaining unpaid interest payments payable through June 15,
2007.
The Early Conversion Incentive Payment may be paid for, in whole or in
part, at the election of the Company, in cash or shares of Common Stock or in
any combination of cash and shares of Common Stock; provided, however, that the
Company will not issue fractional shares of Common Stock in payment of the Early
Conversion Incentive Payment and shall instead deliver a check in an amount
equal to the value of such fraction computed on the basis of the Closing Sale
Price on the Trading Day immediately before the Conversion Date (as defined
below). The Company will inform the Holder of the method of payment of the Early
A-5
Conversion Incentive Payment within five (5) Business Days of the submission of
the Conversion Notice and will make such payment of the Early Conversion
Incentive Payment within five (5) Business Days thereafter.
(a) The portion of the Early Conversion Incentive Payment to be paid in
shares of Common Stock shall be paid by the issuance of a number of shares of
Common Stock equal to a fraction:
(i) whose numerator is the dollar amount of such Early Conversion
Incentive Payment; and
(ii) whose denominator is the product of (I) the average of the Closing
Sale Prices for the five (5) consecutive Trading Days ending on, and
including, the third (3rd) Trading Day immediately preceding the
Conversion Date and (II) ninety five percent (95%).
11. CONTINGENT INTEREST.
The Company shall pay Contingent Interest (as defined below) with
respect to the Securities in the event the Company pays Cash Dividends on its
Common Stock. The amount of "CONTINGENT INTEREST" payable will equal the product
of: (i) one hundred percent (100%) of the per share Cash Dividend paid on the
Common Stock and (ii) the number of shares of Common Stock issuable upon
conversion of each Holder's Security. The Company will pay Contingent Interest
only in cash.
In the event of any merger, consolidation, or a sale of substantially
all of the Company's assets, whereby any one of the three conditions set forth
in SECTION 3.8(l) of the Indenture are met, yet the event is not deemed to be a
Change in Control, and subsequent to the event date, the Securities remain an
outstanding obligation of the surviving entity, notwithstanding any changes to
the payment obligations outlined in this Indenture, or any future supplemental
indenture, Holders will be entitled to receive dividend protection in the form
of Contingent Interest.
The Contingent Interest will be paid on the payment date for the
regular semi-annual interest payment.
In the event the Company is required to pay Contingent Interest, the
Company will shall publicly disseminate in a press release or publish on the
Company's website a notice the amount of the Cash Dividend and Contingent
Interest.
12. DENOMINATIONS, TRANSFER, EXCHANGE.
The Securities are in registered form, without coupons, in
denominations of $1,000 principal amount and integral multiples of $1,000
principal amount. The transfer of Securities may be registered and Securities
may be exchanged as provided in the Indenture. The Registrar may require a
Holder, among other things, to furnish appropriate endorsements and transfer
documents. No service charge shall be made for any such registration of transfer
or exchange, but the Company may require payment of a sum sufficient to cover
any tax or similar governmental charge that may be imposed in connection with
certain transfers or exchanges. The Company, the Trustee and the Registrar shall
not be required to register the transfer of or exchange any Security (i) during
a period beginning at the opening of business fifteen (15) days before the
mailing of a notice of redemption of the Securities selected for Redemption
under SECTION 3.4 of the Indenture and ending at the close of business on the
day of such mailing or (ii) that has been selected for Redemption or for which a
Purchase Notice has been delivered, and not withdrawn, in accordance with the
Indenture, except the unredeemed or unrepurchased portion of Securities being
redeemed or repurchased in part.
13. PERSONS DEEMED OWNERS.
The registered Holder of a Security may be treated as the owner of such
Security for all purposes.
A-6
14. MERGER OR CONSOLIDATION.
The Company shall not consolidate with, or merge with or into, or sell,
transfer, lease, convey or otherwise dispose of all or substantially all of the
property or assets of the Company to, another person, whether in a single
transaction or series of related transactions, unless (i) such other person is a
corporation organized under the laws of the United States, any State thereof or
the District of Columbia; (ii) such person assumes by supplemental indenture all
the obligations of the Company under the Securities and the Indenture; and (iii)
immediately after giving effect to the transaction, no Default or Event of
Default shall exist.
15. AMENDMENTS, SUPPLEMENTS AND WAIVERS.
Subject to certain exceptions and to the provisions of the Indenture,
the Indenture and the Securities may be amended or supplemented with the consent
of the Holders of at least a majority in aggregate principal amount of the
outstanding Securities, and certain existing Defaults or Events of Default may
be waived with the consent of the Holders of a majority in aggregate principal
amount of the Securities then outstanding. In accordance with the terms of the
Indenture, the Company, with the consent of the Trustee, may amend or supplement
the Indenture or the Securities without notice to or the consent of any
Securityholder:
(i) to evidence the assumption of the Company's obligations by a
successor; (ii) to evidence the acceptance of appointment by a successor
trustee; (iii) to make any changes or modifications to the Indenture necessary
to cure and ambiguity or correct any error in the Indenture, so long as such
action will not adversely affect the interests of the Holders, including any
such amendment made solely to conform the provisions of the Indenture to the
Company's offering memorandum; (iv) to qualify or maintain the qualification of
the Indenture under the TIA; (v) to secure the obligations of the Company in
respect of the Securities; (vi) to establish the forms or terms of the
Securities; (vii) to add to the covenants of the Company described in the
Indenture for the benefit of Securityholders; or (viii) to make other changes to
the Indenture or forms or terms of the Securities, provided no such change
individually or in the aggregate with all other such changes has or will have a
material adverse effect on the interests of the Holders. In accordance with the
terms of the Indenture, certain amendments, supplements and waivers cannot be
made without the consent of each Holder of each outstanding Security affected.
16. DEFAULTS AND REMEDIES.
Subject to the provisions of the Indenture, an "EVENT OF DEFAULT"
occurs if: (i) the Company fails to pay the principal of any Security when the
same becomes due and payable, whether at maturity, upon Redemption, on a
Repurchase Date with respect to a Repurchase Upon Change in Control or
otherwise; (ii) the Company fails to pay Interest on any Security when due, if
such failure continues for thirty (30) days after the date when due; (iii) the
Company fails to timely provide a Change in Control Notice, as required by the
provisions of this Indenture; (iv) the Company defaults in its obligation to
convert the Securities into shares of Common Stock, cash or a combination of
cash and Common Stock upon exercise of a Holder's conversion right and such
default continues for ten (10) days; (v) the Company defaults in its obligation
to repurchase any Security on a Repurchase Date with respect to a Repurchase
Upon Change in Control or otherwise; (vi) the Company defaults in its obligation
to redeem any Security after exercise of its option to redeem; (vii) the Company
fails to perform or observe any of the covenants in ARTICLE IV of the Indenture
for sixty (60) days after written notice to the Company by the Trustee or to the
Company and the Trustee by Holders of at least fifty percent (50%) in the
aggregate principal amount of the Securities then outstanding; (viii) there
occurs an event of default with respect to the Company's or any of its
Subsidiaries' indebtedness having a principal amount then outstanding,
individually or in the aggregate, of at least fifteen million ($15,000,000),
whether such indebtedness now exists or is hereafter incurred, which default or
defaults: (a) shall have resulted in such indebtedness becoming or being
declared due and payable prior to the date on which it would otherwise have
become due and payable; or (b) shall constitute the failure to pay such
indebtedness at the final stated maturity thereof (after expiration of any
applicable grace period); (ix) any final judgment or judgments for the payment
of money in excess of fifteen million ($15,000,000) shall be rendered against
the Company and shall not be discharged for any period of sixty (60) consecutive
A-7
days during which time a stay of enforcement shall not be in effect or during
which time an appeal has not been filed; or (x) certain events of bankruptcy,
insolvency or reorganization involving the Company.
If an Event of Default (excluding an Event of Default specified in
SECTION 6.1(x) of the Indenture (but including an Event of Default specified in
SECTION 6.1(ix) of the Indenture)) occurs and is continuing, the Trustee by
notice to the Company or the Holders of at least fifty percent (50%) in
aggregate principal amount of the Securities then outstanding by notice to the
Company and the Trustee, may declare the Securities to be immediately due and
payable in full. Upon such declaration, the principal of, premium, if any, and
any accrued and unpaid interest on, all Securities shall be due and payable
immediately. If an Event of Default specified in SECTION 6.1(x) of the Indenture
occurs, the principal of, and accrued and unpaid interest on, all the Securities
shall ipso facto become and be immediately due and payable without any
declaration or other act on the part of the Trustee or any Holder. The Holders
of a majority in aggregate principal amount of the Securities then outstanding
by written notice to the Trustee may rescind or annul an acceleration and its
consequences if (A) the rescission would not conflict with any order or decree,
(B) all existing Events of Default, except the nonpayment of principal or
interest that has become due solely because of the acceleration, have been cured
or waived and (C) all amounts due to the Trustee under SECTION 7.7 if the
Indenture have been paid.
Holders may not enforce the Indenture or the Securities except as
provided in the Indenture. The Holders of a majority in aggregate principal
amount of the Securities then outstanding may direct the time, method and place
of conducting any proceeding for any remedy available to the Trustee or
exercising any trust or power conferred on it. However, the Trustee may refuse
to follow any direction that conflicts with law or the Indenture, is unduly
prejudicial to the rights of other Holders or would involve the Trustee in
personal liability unless the Trustee is offered indemnity reasonably
satisfactory to it; provided, that the Trustee may take any other action deemed
proper by the Trustee which is not inconsistent with such direction.
If a Default or Event of Default occurs and is continuing as to which
the Trustee has received notice pursuant to the provisions of the Indenture, the
Trustee shall mail to each Holder a notice of the Default or Event of Default
within thirty (30) days after it occurs unless such Default or Event of Default
has been cured or waived. Except in the case of a Default or Event of Default in
payment of any amounts due with respect to any Security, the Trustee may
withhold the notice if, and so long as it in good faith determines that,
withholding the notice is in the best interests of Holders. The Company must
deliver to the Trustee an annual compliance certificate.
17. REGISTRATION RIGHTS.
The Holders are entitled to registration rights as set forth in the
Registration Rights Agreement. The Holders shall be entitled to receive
additional interest in certain circumstances, all as set forth in the
Registration Rights Agreement.
18. TRUSTEE DEALINGS WITH THE COMPANY.
The Trustee under the Indenture, or any banking institution serving as
successor Trustee thereunder, in its individual or any other capacity, may make
loans to, accept deposits from, and perform services for, the Company or its
Affiliates, and may otherwise deal with the Company or its Affiliates, as if it
were not Trustee.
19. NO RECOURSE AGAINST OTHERS.
No past, present or future director, officer, employee or shareholder,
as such, of the Company shall have any liability for any obligations of the
Company under the Securities or the Indenture or for any claim based on, in
respect of, or by reason of, such obligations or their creation. Each Holder, by
accepting a Security, waives and releases all such liability. The waiver and
release are part of the consideration for the issue of the Securities.
A-8
20. AUTHENTICATION.
This Security shall not be valid until authenticated by the manual
signature of the Trustee or an authenticating agent in accordance with the
Indenture.
21. ABBREVIATIONS.
Customary abbreviations may be used in the name of a Holder or an
assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the
entirety), JT TEN (= joint tenants with right of survivorship and not as tenants
in common), CUST (= Custodian), and U/G/M/A (Uniform Gifts to Minors Act).
THE COMPANY WILL FURNISH TO ANY HOLDER UPON WRITTEN REQUEST AND WITHOUT CHARGE A
COPY OF THE INDENTURE. REQUESTS MAY BE MADE TO:
Terremark Worldwide, Inc.
2601 South Bayshore Drive
Miami, Florida 33133
Attn: Chief Financial Officer
A-9
[FORM OF ASSIGNMENT]
I or we assign to
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER
- ---------------------------------
(please print or type name
- ---------------------------------------------------
and address)
the within Security and all rights
- ----------------------------------------------
thereunder, and hereby irrevocably constitutes and appoints
---------------------
- --------------------------------------------------------------- Attorney to
transfer the Security on the books of the Company with full power of
substitution in the premises.
Dated:
- ----------------------------------------
NOTICE: The signature on this assignment
must correspond with the name as it
appears upon the face of the within
Security in every particular without
alteration or enlargement or any change
whatsoever and be guaranteed by a
guarantor institution participating in
the Securities Transfer Agents Medallion
Program or in such other guarantee program
acceptable to the Trustee.
Signature Guarantee:
- ------------------------------------------
In connection with any transfer of this Security occurring prior to the
date which is the earlier of (i) the date of the declaration by the Commission
of the effectiveness of a registration statement under the Securities Act of
1933, as amended, covering resales of this Security (which effectiveness shall
not have been suspended or terminated at the date of the transfer) and (ii) the
Resale Restriction Termination Date, the undersigned confirms that it is making,
and it has not utilized any general solicitation or general advertising in
connection with, the transfer:
[Check One]
(1) ____to the Company or any Subsidiary thereof, or
(2) ____pursuant to, and in compliance with, the exemption from registration
provided by Rule 144A under the Securities Act of 1933, as amended, or
(3) ____pursuant to, and in compliance with, the exemption from registration
provided by Rule 144 under the Securities Act of 1933, as amended, or
(4) ____pursuant to, and in compliance with, an exemption from registration
under the Securities Act of 1933, as amended, other than Rule 144A or Rule 144,
or
(5) ____pursuant to an effective registration statement under the Securities Act
of 1933, as amended,
and, unless the box below is checked, the undersigned confirms that this
Security is not being transferred to an "affiliate" of the Company (an
"Affiliate") as defined in Rule 144 under the Securities Act of 1933, as
amended:
[ ] The transferee is an Affiliate of the Company. (If the Security is
transferred to an Affiliate, the restrictive legend must remain on the Security
for at least two (2) years following the date of the transfer.)
Unless one of the items (1) through (5) 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; provided, however,
that if item (3) or (4) is checked, the Company or the Trustee may require,
prior to registering any such transfer of the Securities, in their sole
discretion, such written legal opinions, certifications and other information as
the Trustee or the Company have reasonably requested to confirm that such
transfer is being made pursuant to an exemption from, or in a transaction not
subject to, the registration requirements of the Securities Act of 1933, as
amended. If item (2) is checked, the purchaser must complete the certification
below.
If none of the foregoing items are checked, the Trustee or Registrar
shall not be obligated to register this Security in the name of any person other
than the Holder hereof unless and until the conditions to any such transfer of
registration set forth herein and in the Indenture shall have been satisfied.
Dated:
--------------------------------------
Signed:
-------------------------------------
(Sign exactly as name appears on the other side of this Security)
Signature Guarantee:
- ------------------------------------
TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED
The undersigned represents and warrants that it is purchasing this
Security for its own account or an account with respect to which it exercises
sole investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act of
1933, as amended, and is aware that the sale to it is being made in reliance on
Rule 144A and acknowledges that it has received such information regarding the
Company as the undersigned has requested pursuant to Rule 144A and acknowledges
that the transferor is relying upon the undersigned's foregoing representations
in order to claim the exemption from registration provided by Rule 144A.
Dated:
-------------------------------------
NOTICE: To be executed by an executive officer
CONVERSION NOTICE
To convert this Security into Common Stock of the, check the box: [ ]
To convert only part of this Security, state the principal amount to be
converted (must be in multiples of $1,000):
$_______________________
If you want the stock certificate made out in another person's name, fill in the
form below:
_______________________________________________________________
(Insert other person's soc. sec. or tax I.D. no.)
_______________________________________________________________
_______________________________________________________________
_______________________________________________________________
(Print or type other person's name, address and zip code)
Date:
--------------------------------------
Signature(s):
------------------------------
(Sign exactly as your name(s) appear(s) on the other side of this Security)
Signature(s) guaranteed by:
_____________________________________
(All signatures must be guaranteed by a guarantor institution participating in
the Securities Transfer Agents Medallion Program or in such other guarantee
program acceptable to the Trustee.)
PURCHASE NOTICE
Certificate No. of Security:
- ------------------
If you want to elect to have this Security purchased by the Company pursuant to
SECTION 3.8 of the Indenture, check the box: [ ]
If you want to elect to have only part of this Security purchased by the Company
pursuant to SECTION 3.8 of the Indenture, state the principal amount to be so
purchased by the Company:
$___________________________________
(in an integral multiple of $1,000)
Date:
------------------------------
Signature(s):
____________________________________
____________________________________
(Sign exactly as your name(s) appear(s)
on the other side of this Security)
Signature(s) guaranteed by:
- -------------------------------------
(All signatures must be guaranteed by
a guarantor institution participating
in the Securities Transfer Agents
Medallion Program or in such other
guarantee program acceptable to the
Trustee.)
SCHEDULE A
SCHEDULE OF EXCHANGES OF INTERESTS
IN THE GLOBAL SECURITY(A)
The following exchanges of a part of this Global Security for an
interest in another Global Security or for Securities in certificated form, have
been made:
Principal amount of Amount of decrease Amount of Increase in this Global
Signature or in Principal amount Principal amount of Security following
authorized signatory of this Global this Global Security such decrease of
Trustee or Note Date of Exchange Security or increase Custodian
(a) This is included in Global Securities only.
EXHIBIT B-1
FORM OF PRIVATE PLACEMENT LEGEND
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED,
SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT AS SET FORTH IN THE NEXT SENTENCE.
BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE HOLDER: (2)
REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE
144A UNDER THE SECURITIES ACT) (A "QIB") OR (B) IT IS AN INSTITUTIONAL
"ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2), (3) OR (7) OF
REGULATION D UNDER THE SECURITIES ACT (AN "IAI"); (3) AGREES THAT IT WILL NOT
RESELL OR OTHERWISE TRANSFER THIS NOTE EXCEPT (A) TO THE COMPANY OR ANY OF ITS
SUBSIDIARIES, (B) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QIB
PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A, (C) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (D) TO AN IAI THAT, PRIOR TO
SUCH TRANSFER, FURNISHES THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATION AND AGREEMENTS RELATING TO THE TRANSFER OF THE NOTES (THE FORM OF
WHICH CAN BE OBTAINED FROM THE TRUSTEE) AND IF SUCH TRANSFER IS IN RESPECT OF AN
AGGREGATE PRINCIPAL AMOUNT OF NOTES LESS THAN $250,000, AN OPINION OF COUNSEL
ACCEPTABLE TO THE COMPANY THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE
SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY),
(E) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL ACCEPTABLE TO THE
COMPANY) OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH
CASE, IN ACCORDANCE WITH THE APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION, AND (4) AGREES THAT IT WILL
DELIVER TO EACH PERSON TO WHOM THIS NOTE OR AN INTEREST HEREIN IS TRANSFERRED A
NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. THE INDENTURE CONTAINS A
PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS NOTE
IN VIOLATION OF THE FOREGOING.
B-1-1
EXHIBIT B-2
FORM OF LEGEND FOR GLOBAL SECURITY
Any Global Security authenticated and delivered hereunder shall bear a
legend (which would be in addition to any other legends required in the case of
a Restricted Security) in substantially the following form:
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A
NOMINEE OF A DEPOSITARY OR A SUCCESSOR DEPOSITARY. THIS SECURITY IS NOT
EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE
DEPOSITARY OR ITS NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
INDENTURE, AND NO TRANSFER OF THIS SECURITY (OTHER THAN A TRANSFER OF THIS
SECURITY AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A
NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE
DEPOSITARY) MAY BE REGISTERED EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN
THE INDENTURE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE COMPANY OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR
SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL
BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN
SECTION 2.16 OF THE INDENTURE.
B-2-1
EXHIBIT B-3
FORM OF LEGEND REGARDING
REGISTRATION RIGHTS AGREEMENT
THIS SECURITY SHALL BE ENTITLED TO THE BENEFITS OF THAT CERTAIN REGISTRATION
RIGHTS AGREEMENT, DATED JUNE ___, 2004, AMONG TERREMARK WORLDWIDE, INC., MCMAHAN
SECURITIES CO. L.P. AND THE OTHER PARTIES NAMED THEREIN.
B-3-1
EXHIBIT C
FORM OF NOTICE OF TRANSFER PURSUANT TO REGISTRATION STATEMENT
Terremark Worldwide, Inc.
2601 South Bayshore Drive
Miami, Florida 33133
Attn: Chief Financial Officer
The Bank of New York Trust Company, N.A.
10161 Centurion Parkway
Jacksonville, Florida 32256
Attention: Corporate Trust Administration
Re: Terremark Worldwide, Inc. (the "COMPANY") 9% Senior
Convertible Notes due 2009 (the "SECURITIES")
Ladies and Gentlemen:
Please be advised that _____________ has transferred $_________
aggregate principal amount of the Securities and ________ shares of the Common
Stock, $0.001 par value per share, of the Company issued on conversion of the
Securities ("STOCK") pursuant to an effective Registration Statement on Form
____ (File No. 333-________).
We hereby certify that the prospectus delivery requirements, if any, of
the Securities Act of 1933 as amended, have been satisfied with respect to the
transfer described above and that the above-named beneficial owner of the
Securities or Stock is named as a "Selling Security Holder" in the Prospectus
dated _________, or in amendments or supplements thereto, and that the aggregate
principal amount of the Securities and the number of shares of Stock transferred
are [a portion of] the Securities and Stock listed in such Prospectus, as
amended or supplemented, opposite such owner's name.
Very truly yours,
- -------------------------------
(Name)
C-1
EXHIBIT D
FORM OF CERTIFICATE
TERREMARK WORLDWIDE, INC.
INCUMBENCY CERTIFICATE
The undersigned, ____________, being the ____________ of Terremark
Worldwide, Inc. (the "Company") does hereby certify that the individuals listed
below are qualified and acting officers of the Company as set forth in the right
column opposite their respective names and the signatures appearing in the
extreme right column opposite the name of each such officer is a true specimen
of the genuine signature of such officer and such individuals have the authority
to execute documents to be delivered to, or upon the request of, The Bank of New
York Trust Company, N.A., as Trustee under the Indenture dated as of __________,
2004, by and between the Company and The Bank of New York Trust Company, N.A..
NAME TITLE SIGNATURE
-------------------- --------------------- --------------------
-------------------- --------------------- --------------------
-------------------- --------------------- --------------------
IN WITNESS WHEREOF, the undersigned has duly executed and delivered
this Certificate as of the ____ day of ________, 20__.
------------------------------
Name:
Title:
D-1