Exhibit 4.7
SANDISK CORPORATION
To
The Bank of New York,
as Trustee
INDENTURE
Dated as of
December 24, 2001
4 1/2% Convertible Subordinated Notes due 2006
TABLE OF CONTENTS
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ARTICLE 1
Definitions
Section 1.01. Definitions 2
ARTICLE 2
Issue, Description, Execution, Registration and Exchange of Notes
Section 2.01. Designation Amount and Issue of Notes 10
Section 2.02. Form of Notes 10
Section 2.03. Date and Denomination of Notes, Payments of Interest 11
Section 2.04. Execution of Notes 12
Section 2.05. Exchange and Registration of Transfer of Notes; Restrictions
on Transfer, Depositary 13
Section 2.06. Mutilated, Destroyed, Lost or Stolen Notes 21
Section 2.07. Temporary Notes 22
Section 2.08. Cancellation of Notes Paid, Etc 23
Section 2.09. CUSIP Numbers 23
ARTICLE 3
Redemption of Notes
Section 3.01. Redemption of Notes 23
Section 3.02. Notice of Redemptions, Selection of Notes 24
Section 3.03. Payment of Notes Called for Redemption 25
Section 3.04. Conversion Arrangement on Call for Redemption 26
Section 3.05. Redemption at Option of Holders 27
ARTICLE 4
Subordination of Notes
Section 4.01. Agreement of Subordination 30
Section 4.02. Payments to Noteholders 30
Section 4.03. Subrogation of Notes 33
Section 4.04. Authorization to Effect Subordination 34
Section 4.05. Notice to Trustee 34
Section 4.06. Trustee's Relation to Senior Indebtedness 35
Section 4.07. No Impairment of Subordination 36
Section 4.08. Certain Conversions Not Deemed Payment 36
Section 4.09. Article Applicable to Paying Agents 37
Section 4.10. Senior Indebtedness Entitled to Rely 37
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Section 4.11. Reliance on Judicial Order or Certificate of Liquidating Agent 37
ARTICLE 5
Particular Covenants of the Company
Section 5.01. Payment of Principal, Premium and Interest 38
Section 5.02. Maintenance of Office or Agency 38
Section 5.03. Appointments to Fill Vacancies in Trustee's Office 38
Section 5.04. Provisions as to Paying Agent 39
Section 5.05. Existence 40
Section 5.06. Maintenance of Properties 40
Section 5.07. Payment of Taxes and Other Claims 40
Section 5.08. Rule 144A Information Requirement 41
Section 5.09. Stay, Extension and Usury Laws 41
Section 5.10. Compliance Certificate 41
Section 5.11. Liquidated Damages Notice 42
ARTICLE 6
Noteholders' Lists and Reports by the Company and the Trustee
Section 6.01. Noteholders' Lists 42
Section 6.02. Preservation and Disclosure of Lists 43
Section 6.03. Reports by Trustee 43
Section 6.04. Reports by Company 43
ARTICLE 7
Remedies of the Trustee and Noteholders on an Event of Default
Section 7.01. Events of Default 44
Section 7.02. Payments of Notes on Default; Suit Therefor 46
Section 7.03. Application of Monies Collected by Trustee 48
Section 7.04. Proceedings by Noteholder 49
Section 7.05. Proceedings by Trustee 50
Section 7.06. Remedies Cumulative and Continuing 50
Section 7.07. Direction of Proceedings and Waiver of Defaults by Majority of
Noteholders 50
Section 7.08. Notice of Defaults 51
Section 7.09. Undertaking to Pay Costs 51
ARTICLE 8
The Trustee
Section 8.01. Duties and Responsibilities of Trustee 52
Section 8.02. Reliance on Documents, Opinions, Etc 53
Section 8.03. No Responsibility for Recitals, Etc 54
Section 8.04. Trustee, Paying Agents, Conversion Agents or Registrar May Own
Notes 55
Section 8.05. Monies to Be Held in Trust 55
Section 8.06. Compensation and Expenses of Trustee 55
Section 8.07. Officers' Certificate as Evidence 56
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Section 8.08. Conflicting Interests of Trustee 56
Section 8.09. Eligibility of Trustee 56
Section 8.10. Resignation or Removal of Trustee 56
Section 8.11. Acceptance by Successor Trustee 58
Section 8.12. Succession by Merger, Etc 59
Section 8.13. Preferential Collection of Claims 59
Section 8.14. Trustee's Application for Instructions from the Company 59
ARTICLE 9
The Noteholders
Section 9.01. Action by Noteholders 60
Section 9.02. Proof of Execution by Noteholders 60
Section 9.03. Who Are Deemed Absolute Owners 60
Section 9.04. Company-owned Notes Disregarded 61
Section 9.05. Revocation of Consents, Future Holders Bound 61
ARTICLE 10
Meetings of Noteholders
Section 10.01. Purpose of Meetings 62
Section 10.02. Call of Meetings by Trustee 62
Section 10.03. Call of Meetings by Company or Noteholders 63
Section 10.04. Qualifications for Voting 63
Section 10.05. Regulations 63
Section 10.06. Voting 64
Section 10.07. No Delay of Rights by Meeting 64
ARTICLE 11
Supplemental Indentures
Section 11.01. Supplemental Indentures Without Consent of Noteholders 65
Section 11.02. Supplemental Indenture with Consent of Noteholders 66
Section 11.03. Effect of Supplemental Indenture 67
Section 11.04. Notation on Notes 68
Section 11.05. Evidence of Compliance of Supplemental Indenture to be
Furnished to Trustee 68
ARTICLE 12
Consolidation, Merger, Sale, Conveyance and Lease
Section 12.01. Company May Consolidate on Certain Terms 68
Section 12.02. Successor Corporation to Be Substituted 69
Section 12.03. Opinion of Counsel to Be Given Trustee 70
ARTICLE 13
Satisfaction and Discharge of Indenture
Section 13.01. Discharge of Indenture 70
Section 13.02. Deposited Monies to Be Held in Trust by Trustee 71
Section 13.03. Paying Agent to Repay Monies Held 71
Section 13.04. Return of Unclaimed Monies 71
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Section 13.05. Reinstatement 71
ARTICLE 14
Immunity of Incorporators, Stockholders, Officers and Directors
Section 14.01. Indenture and Notes Solely Corporate Obligations 72
ARTICLE 15
Conversion of Notes
Section 15.01. Right to Convert 72
Section 15.02. Exercise of Conversion Privilege; Issuance of Common Stock on
Conversion, No Adjustment for Interest or Dividends 73
Section 15.03. Cash Payments in Lieu of Fractional Shares 74
Section 15.04. Conversion Rate 75
Section 15.05. Adjustment of Conversion Rate 75
Section 15.06. Effect of Reclassification, Consolidation, Merger or Sale 86
Section 15.07. Taxes on Shares Issued 87
Section 15.08. Reservation of Shares, Shares to Be Fully Paid; Compliance with
Governmental Requirements; Listing of Common Stock 87
Section 15.09. Responsibility of Trustee 88
Section 15.10. Notice to Holders Prior to Certain Actions 89
Section 15.11. Rights Issued in Respect of Common Stock Issued upon
Conversion 90
ARTICLE 16
Miscellaneous Provisions
Section 16.01. Provisions Binding on Company's Successors 90
Section 16.02. Official Acts by Successor Corporation 90
Section 16.03. Addresses for Notices, Etc 90
Section 16.04. Governing Law 91
Section 16.05. Evidence of Compliance with Conditions Precedent, Certificates
to Trustee 91
Section 16.06. Legal Holidays 92
Section 16.07. Trust Indenture Act 92
Section 16.08. No Security Interest Created 92
Section 16.09. Benefits of Indenture 92
Section 16.10. Table of Contents, Headings, Etc 93
Section 16.11. Authenticating Agent 93
Section 16.12. Execution in Counterparts 94
Section 16.13. Severability 94
INDENTURE
INDENTURE dated as of December 24, 2001 between SanDisk Corporation, a Delaware
corporation (hereinafter called the "Company") and The Bank of New York, a New
York banking corporation, as trustee hereunder (hereinafter called the
"Trustee").
WITNESSETH:
WHEREAS, for its lawful corporate purposes, the Company has duly authorized the
issue of its 4 1/2% Convertible Subordinated Notes due 2006 (hereinafter called
the "Notes"), in an unlimited aggregate principal amount and, to provide the
terms and conditions upon which the Notes are to be authenticated, issued and
delivered, the Company has duly authorized the execution and delivery of this
Indenture; and
WHEREAS, the Notes, the certificate of authentication to be borne by the Notes,
a form of assignment, a form of option to elect repayment upon a Fundamental
Change, and a form of conversion notice to be borne by the Notes are to be
substantially in the forms hereinafter provided for; and
WHEREAS, all acts and things necessary to make the Notes, when executed by the
Company and authenticated and delivered by the Trustee or a duly authorized
authenticating agent, as in this Indenture provided, the valid, binding and
legal obligations of the Company, and to constitute this Indenture a valid
agreement according to its terms, have been done and performed, and the
execution of this Indenture and the issue hereunder of the Notes have in all
respects been duly authorized,
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
That in order to declare the terms and conditions upon which the Notes are, and
are to be, authenticated, issued and delivered, and in consideration of the
premises and of the purchase and acceptance of the Notes by the holders
thereof, the Company covenants and agrees with the Trustee for the equal and
proportionate benefit of the respective holders from time to time of the Notes
(except as otherwise provided below), as follows:
ARTICLE 1
Definitions
Section 1.01. Definitions. The terms defined in this Section 1.01 (except as
herein otherwise expressly provided or unless the context otherwise requires)
for all purposes of this Indenture and of any indenture supplemental hereto
shall have the respective meanings specified in this Section 1.01. All other
terms used in this Indenture that are defined in the Trust Indenture Act or
which are by reference therein defined in the Securities Act (except as herein
otherwise expressly provided or unless the context otherwise requires) shall
have the meanings assigned to such terms in said Trust Indenture Act and in
said Securities Act as in force at the date of the execution of this Indenture.
The words "herein", "hereof", "hereunder", and words of similar import refer to
this Indenture as a whole and not to any particular Article, Section or other
Subdivision. The terms defined in this Article include the plural as well as
the singular.
"Accepted Purchased Shares" has the meaning specified in Section 15.05(g).
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control", when used with respect to any specified Person means the power to
direct or cause the direction of the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise, and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
"Board of Directors" means the Board of Directors of the Company or a committee
of such Board duly authorized to act for it hereunder.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and Friday which
is not a day on which the banking institutions in The City of New York or the
city in which the Corporate Trust Office is located are authorized or obligated
by law or executive order to close or be closed.
"Closing Price" has the meaning specified in Section 15.05(h)(1).
"Commission" means the Securities and Exchange Commission, as from time to time
constituted, created under the Exchange Act, or, if at any time after the
execution of this Indenture such Commission is not existing and performing the
duties now assigned to it under the Trust Indenture Act, then the body
performing such duties at such time.
"Common Stock" means any stock of any class of the Company which has no
preference in respect of dividends or of amounts payable in the event of any
voluntary or involuntary liquidation, dissolution or winding up of the Company
and which is not subject to redemption by the Company. Subject to the
provisions of Section 15.06, however, shares issuable on conversion of Notes
shall include only shares of the class designated as common stock of the
Company at the date of this Indenture (namely, the Common Stock, no par value)
or shares of any class or classes resulting from any reclassification or
reclassifications thereof and which have no preference in respect of dividends
or of amounts payable in the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Company and which are not subject to
redemption by the Company; provided that if at any time there shall be more
than one such resulting class, the shares of each such class then so issuable
on conversion shall be substantially in the proportion which the total number
of shares of such class resulting from all such reclassifications bears to the
total number of shares of all such classes resulting from all such
reclassifications.
"Company" means the corporation named as the "Company" in the first paragraph
of this Indenture, and, subject to the provisions of Article 12 and Section
15.06, shall include its successors and assigns.
"Company Notice" has the meaning specified in Section 3.05(b).
"Conversion Price" as of any day will equal $1,000 divided by the Conversion
Rate as of such date.
"Conversion Rate" has the meaning specified in Section 15.04.
"Corporate Trust Office" or other similar term, means the designated office of
the Trustee at which at any particular time its corporate trust business as it
relates to this Indenture shall be administered, which office is, at the date
as of which this Indenture is dated, located at 101 Barclay Street, 21W, New
York, New York
10286.
"Current Market Price" has the meaning specified in Section 15.05(h)
"Custodian" means The Bank of New York, as custodian with respect to the Notes
in global form, or any successor entity thereto.
"default" means any event that is, or after notice or passage of time, or both,
would be, an Event of Default.
"Defaulted Interest" has the meaning specified in Section 2.03.
"Depositary" means, with respect to the Notes issuable or issued in whole or in
part in global form, the Person specified in Section 2.05(d) as the Depositary
with respect to such Notes, until a successor shall have been appointed and
become such pursuant to the applicable provisions of this Indenture, and
thereafter, "Depositary" shall mean or include such successor.
"Designated Senior Indebtedness" means (i) the Company's obligations under
Senior Indebtedness arising under that certain Guaranty dated as of December
27, 2000, made by the Company in favor of ABN AMRO Bank N.V. and certain other
parties, as amended, and (ii) the Company's obligations under any particular
Senior Indebtedness in which the instrument creating or evidencing the same or
the assumption or guarantee thereof (or related agreements or documents to
which the Company is a party) expressly provides that such Senior Indebtedness
shall be "Designated Senior Indebtedness" for purposes of this Indenture
(provided that such instrument, agreement or other document may place
limitations and conditions on the right of the creditor to exercise the rights
of Designated Senior Indebtedness).
"Event of Default" means any event specified in Section 7.01(a), (b), (c), (d)
or (e).
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder, as in effect from time to time.
"Expiration Time" has the meaning specified in Section 15.05(f).
"Fair Market Value" has the meaning specified in Section 15.05(h).
"Fundamental Change" means the occurrence of any transaction or event in
connection with which all or substantially all of the Common Stock shall be
exchanged for, converted into, acquired for or constitutes solely the right to
receive consideration (whether by means of an exchange offer, liquidation,
tender offer, consolidation, merger, combination, reclassification,
recapitalization or otherwise) which is not all or substantially all common
stock or depositary receipts that are (or, upon consummation of or immediately
following such transaction or event, which will be) listed on a United States
national securities exchange or approved (or, upon consummation of or
immediately following such transaction or event, which will be approved) for
quotation on the Nasdaq National Market or any similar United States system of
automated dissemination of quotations of securities prices.
"Global Note" has the meaning set forth in Section 2.05(b).
"Indebtedness" means, with respect to any Person, and without duplication, (a)
all indebtedness, obligations and other liabilities (contingent or otherwise)
of such Person for borrowed money (including obligations of the Company in
respect of overdrafts, foreign exchange contracts, currency exchange
agreements, interest
rate protection agreements, and any loans or advances from banks, whether or
not evidenced by notes or similar instruments) or evidenced by bonds,
debentures, notes or similar instruments (whether or not the recourse of the
lender is to the whole of the assets of such Person or to only a portion
thereof), other than any account payable or other accrued current liability or
obligation incurred in the ordinary course of business in connection with the
obtaining of materials or services; (b) all reimbursement obligations and other
liabilities (contingent or otherwise) of such Person with respect to letters of
credit, bank guarantees or bankers' acceptances; (c) all obligations and
liabilities (contingent or otherwise) in respect of leases of such Person
required, in conformity with generally accepted accounting principles, to be
accounted for as capitalized lease obligations on the balance sheet of such
Person and all obligations and other liabilities (contingent or otherwise)
under any lease or related document (including a purchase agreement) in
connection with the lease of real property which provides that such Person is
contractually obligated to purchase or cause a third party to purchase the
leased property and thereby guarantee a minimum residual value of the leased
property to the lessor and the obligations of such Person under such lease or
related document to purchase or to cause a third party to purchase such leased
property; (d) all obligations of such Person (contingent or otherwise) with
respect to an interest rate or other swap, cap or collar agreement or other
similar instrument or agreement or foreign currency hedge, exchange, purchase
or similar instrument or agreement; (e) all direct or indirect guaranties or
similar agreements by such Person in respect of, and obligations or liabilities
(contingent or otherwise) of such Person to purchase or otherwise acquire or
otherwise assure a creditor against loss in respect of, indebtedness,
obligations or liabilities of another Person of the kind described in clauses
(a) through (d); (f) any indebtedness or other obligations described in clauses
(a) through (e) secured by any mortgage, pledge, lien or other encumbrance
existing on property which is owned or held by such Person, regardless of
whether the indebtedness or other obligation secured thereby shall have been
assumed by such Person; and (g) any and all deferrals, renewals, extensions and
refundings of, or amendments, modifications or supplements to, any
indebtedness, obligation or liability of the kind described in clauses (a)
through (f).
"Indenture" means this instrument as originally executed or, if amended or
supplemented as herein provided, as so amended or supplemented.
"Initial Purchasers" means Morgan Stanley & Co. Incorporated and ABN AMRO
Rothschild LLC.
"interest" means, when used with reference to the Notes, any interest payable
under the terms of the Notes and Liquidated Damages, if any, payable under the
terms of the Registration Rights Agreement.
"Liquidated Damages" has the meaning specified for "Liquidated Damages Amount"
in Section 2(e) of the Registration Rights Agreement.
"Liquidated Damages Notice" has the meaning specified in Section 5.11.
"Note" or "Notes" means any Note or Notes, as the case may be, authenticated
and delivered under this Indenture, including the Global Note.
"Note register" has the meaning specified in Section 2.05(a).
"Note registrar" has the meaning specified in Section 2.05(a).
"Noteholder" or "holder" as applied to any Note, or other similar terms (but
excluding the term "beneficial holder"), means any Person in whose name at the
time a particular Note is registered on the Note registrar's books.
"Notice Date" means the date of mailing of the notice of redemption pursuant to
Section 3.02.
"Offer Expiration Time" has the meaning specified in Section 15.05(g).
"Officers' Certificate", when used with respect to the Company, means a
certificate signed by both (a) the Chairman of the Board, the Chief Executive
Officer, the President or any Vice President (whether or not designated by a
number or numbers or word or words added before or after the title "Vice
President") and (b) the Treasurer or any Assistant Treasurer, the Controller or
any Assistant Controller, or the Secretary or any Assistant Secretary of the
Company.
"Opinion of Counsel" means an opinion in writing signed by legal counsel, who
may be an employee of or counsel to the Company, or other counsel reasonably
acceptable to the Trustee.
"outstanding", when used with reference to Notes and subject to the provisions
of Section 9.04, means, as of any particular time, all Notes authenticated and
delivered by the Trustee under this Indenture, except:
(a) Notes theretofore canceled by the Trustee or delivered to the
Trustee for cancellation;
(b) Notes, or portions thereof, (i) for the redemption of which
monies in the necessary amount shall have been deposited in trust with the
Trustee or with any paying agent (other than the Company) or (ii) which shall
have been otherwise defeased in accordance with Article 13;
(c) Notes in lieu of which, or in substitution for which, other Notes
shall have been authenticated and delivered pursuant to the terms of Section
2.06;
(d) Notes paid pursuant to Section 2.06; and
(e) Notes converted into Common Stock pursuant to Article 15 and
Notes deemed not outstanding pursuant to Article 3.
"Person" means a corporation, an association, a partnership, a limited
liability company, an individual, a joint venture, a joint stock company, a
trust, an unincorporated organization or a government or an agency or a
political subdivision thereof.
"Portal Market" means The Portal Market operated by the National Association of
Securities Dealers, Inc. or any successor thereto.
"Predecessor Note" of any particular Note means every previous Note evidencing
all or a portion of the same debt as that evidenced by such particular Note,
and, for the purposes of this definition, any Note authenticated and delivered
under Section 2.06 in lieu of a lost, destroyed or stolen Note shall be deemed
to evidence the same debt as the lost, destroyed or stolen Note that it
replaces.
"premium" means any premium payable under the terms of the Notes.
"Principal Amount" has the meaning specified in Section 2.05(b).
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"Record Date" has the meaning specified in Section 15.05(h).
"Registration Rights Agreement" means the Registration Rights Agreement, dated
as of December 24, 2001, among the Company and the Initial Purchasers, as
amended from time to time in accordance with its terms.
"Representative" means (a) the indenture trustee or other trustee, agent or
representative for holders of Senior Indebtedness or (b) with respect to any
Senior Indebtedness that does not have any such trustee, agent or other
representative, (i) in the case of such Senior Indebtedness issued pursuant
to an agreement providing for voting arrangements as among the holders or
owners of such Senior Indebtedness, any holder or owner of such Senior
Indebtedness acting with the consent of the required persons necessary to bind
such holders or owners of such Senior Indebtedness and (ii) in the case of all
other such Senior Indebtedness, the holder or owner of such Senior Indebtedness.
"Repurchase Date" has the meaning specified in Section 3.05.
"Responsible Officer", when used with respect to the Trustee, means an officer
of the Trustee in the Corporate Trust Office assigned and duly authorized by
the Trustee to administer this Indenture.
"Restricted Securities" has the meaning specified in Section 2.05(d).
"Rule 144A" means Rule 144A as promulgated under the Securities Act.
"Securities" has the meaning specified in Section 15.05(d).
"Securities Act" means the Securities Act of 1933, as amended, and the rules
and regulations promulgated thereunder, as in effect from time to time.
"Senior Indebtedness" means the principal of, premium, if any, interest
(including all interest accruing subsequent to the commencement of any
bankruptcy or similar proceeding, whether or not a claim for post-petition
interest is allowable as a claim in any such proceeding) and rent payable on or
in connection with, and all fees, costs, expenses and other amounts accrued or
due on or in connection with, Indebtedness of the Company, whether outstanding
on the date of this Indenture or thereafter created, incurred, assumed,
guaranteed or in effect guaranteed by the Company (including all deferrals,
renewals, extensions or refundings of, or amendments, modifications or
supplements to, the foregoing), unless in the case of any particular
Indebtedness the instrument creating or evidencing the same or the assumption
or guarantee thereof expressly provides that such Indebtedness shall not be
senior in right of payment to the Notes or expressly provides that such
Indebtedness is "pari passu" with or "junior" to the Notes. Notwithstanding the
foregoing, the term Senior Indebtedness shall not include any Indebtedness of
the Company to any subsidiary of the Company, a majority of the voting stock of
which is owned, directly or indirectly, by the Company.
"Significant Subsidiary" means, as of any date of determination, a Subsidiary
of the Company that would constitute a "significant subsidiary" as such term is
defined under Rule 1-02 of Regulation S-X of the Commission as in effect on the
date of this Indenture
"Subsidiary" means, with respect to any Person, (i) any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of capital stock or other equity interest entitled (without
regard to the occurrence of any contingency) to vote in the election of
directors, managers or trustees thereof is at the time owned or controlled,
directly or indirectly, by such Person or one or more of the other Subsidiaries
of that Person (or a combination thereof) and (ii) any partnership (a) the sole
general partner or managing general partner of which is such Person or a
Subsidiary of such Person or (b) the only general partners of which are such
Person or one or more Subsidiaries of such Person (or any combination thereof).
"Trading Day" has the meaning specified in Section 15.05(h)(5).
"transfer" as used in Sections 2.05(d) and (e) and the legends thereunder to be
born by the Notes (and Common Stock issued upon conversion thereof) has the
meaning specified in Section 2.05(d).
"Trigger Event" has the meaning specified in Section 15.05(d).
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended, as it
was in force at the date of this Indenture, except as provided in Sections
11.03 and 15.06; provided that, in the event the Trust Indenture Act of 1939 is
amended after the date hereof, the term "Trust Indenture Act" shall mean, to
the extent required by such amendment, the Trust Indenture Act of 1939 as so
amended.
"Trustee" means The Bank of New York and its successors and any corporation
resulting from or surviving any consolidation or merger to which it or its
successors may be a party and any successor trustee at the time serving as
successor trustee hereunder.
The definitions of certain other terms are as specified in Sections 2.05 and
3.05 and Article 15.
ARTICLE 2
Issue, Description, Execution, Registration and Exchange of Notes
Section 2.01. Designation Amount and Issue of Notes. The Notes shall be
designated as "4 1/2% Convertible Subordinated Notes due 2006". Notes, upon the
execution of this Indenture, or from time to time thereafter, may be executed
by the Company and delivered to the Trustee for authentication, and the Trustee
shall thereupon authenticate and deliver said Notes to or upon the written
order of the Company, signed by (a) its Chairman of the Board, Chief Executive
Officer, President or any Vice President (whether or not designated by a number
or numbers or word or words added before or after the title "Vice President")
and (b) its Treasurer or any Assistant Treasurer, its Controller or any
Assistant Controller or its Secretary or any Assistant Secretary, without any
further action by the Company hereunder.
Section 2.02. Form of Notes. The Notes and the Trustee's certificate of
authentication to be borne by such Notes shall be substantially in the form set
forth in Exhibit A, which is incorporated in and made a part of this Indenture.
Any of the Notes may have such letters, numbers or other marks of
identification and such notations, legends and endorsements as the officers
executing the same
may approve (execution thereof to be conclusive evidence of such approval) and
as are not inconsistent with the provisions of this Indenture, or as may be
required to comply with any law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any securities exchange or automated
quotation system on which the Notes may be listed, or to conform to usage.
Any Global Note shall represent such of the outstanding Notes as shall be
specified therein and shall provide that it shall represent the aggregate
amount of outstanding Notes from time to time endorsed thereon and that the
aggregate amount of outstanding Notes represented thereby may from time to time
be increased or reduced to reflect transfers or exchanges permitted hereby. Any
endorsement of a Global Note to reflect the amount of any increase or decrease
in the amount of outstanding Notes represented thereby shall be made by the
Trustee or the Custodian, at the direction of the Trustee, in such manner and
upon instructions given by the holder of such Notes in accordance with this
Indenture. Payment of principal of and interest and premium, if any, on any
Global Note shall be made to the holder of such Note.
The terms and provisions contained in the form of Note attached as Exhibit A
hereto shall constitute, and are hereby expressly made, a part of this Indenture
and, to the extent applicable, the Company and the Trustee, by their execution
and delivery of this Indenture, expressly agree to such terms and provisions and
to be bound thereby.
Section 2.03. Date and Denomination of Notes, Payments of Interest. The
Notes shall be issuable in registered form without coupons in denominations of
$1,000 principal amount and multiples thereof. Every Note shall be dated the
date of its authentication and shall bear interest from the applicable date in
each case as specified on the face of the form of Note attached as Exhibit A
hereto. Interest on the Notes shall be computed on the basis of a 360-day year
comprised of twelve (12) 30-day months.
The Person in whose name any Note (or its Predecessor Note) is registered on the
Note register at the close of business on any record date with respect to any
interest payment date shall be entitled to receive the interest payable on such
interest payment date, except that the interest payable upon redemption will be
payable to the Person to whom principal is payable pursuant to such redemption
(unless the date of redemption is an interest payment date, in which case the
semi- annual payment of interest becoming due on such date shall be payable to
the holders of such Notes registered as such on the relevant record date).
Notwithstanding the foregoing, if any Note (or portion thereof) is converted
into Common Stock during the period from (but excluding) a record date to (but
excluding) the next succeeding interest payment date and such Note (or portion
thereof) has been called or tendered for redemption on a redemption date or
Repurchase Date which occurs during such period, the Company shall not be
required to pay interest on such interest payment date in respect of any such
Note (or portion thereof). Interest shall be payable at the office of the
Company maintained by the Company for such purposes in the Borough of Manhattan,
City of New York, which shall initially be an office or agency of the Trustee
and may, as the Company shall specify to the paying agent in writing by each
record date, be paid either (i) by check mailed to the address of the Person
entitled thereto as it
appears in the Note register (provided that any holder of Notes with an
aggregate principal amount in excess of $2,000,000 shall, at the written
election (such election to be made prior to the relevant record date and to
contain appropriate wire transfer information) of such holder, be paid by wire
transfer in immediately available funds) or (ii) by transfer to an account
maintained by such Person located in the United States; provided that payments
to the Depositary will be made by wire transfer of immediately available funds
to the account of the Depositary or its nominee. The term "record date" with
respect to any interest payment date shall mean the May 1 or November 1
preceding the relevant May 15 or November 15, respectively.
Any interest on any Note which is payable, but is not punctually paid or duly
provided for, on any May 15 or November 15 (herein called "Defaulted Interest")
shall forthwith cease to be payable to the Noteholder on the relevant record
date by virtue of his having been such Noteholder, and such Defaulted Interest
shall be paid by the Company, at its election in each case, as provided in
clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest
to the Persons in whose names the Notes (or their respective Predecessor Notes)
are registered at the close of business on a special record date for the
payment of such Defaulted Interest, which shall be fixed in the following
manner. The Company shall notify the Trustee in writing of the amount of
Defaulted Interest to be paid on each Note and the date of the payment (which
shall be not less than twenty-five (25) days after the receipt by the Trustee
of such notice, unless the Trustee shall consent to an earlier date), and at
the same time the Company shall deposit with the Trustee an amount of money
equal to the aggregate amount to be paid in respect of such Defaulted Interest
or shall make arrangements satisfactory to the Trustee for such deposit prior
to the date of the proposed payment, such money when deposited to be held in
trust for the benefit of the Person entitled to such Defaulted Interest as in
this clause provided. Thereupon the Trustee shall fix a special record date for
the payment of such Defaulted Interest which shall be not more than fifteen
(15) days and not less than ten (10) days prior to the date of the proposed
payment, and not less than ten (10) days after the receipt by the Trustee of
the notice of the proposed payment, the Trustee shall promptly notify the
Company of such special record date and, in the name and at the expense of the
Company, shall cause notice of the proposed payment of such Defaulted Interest
and the special record date therefor to be mailed, first-class postage prepaid,
to each Noteholder at his address as it appears in the Note register, not less
than ten (10) days prior to such special record date. Notice of the proposed
payment of such Defaulted Interest and the special record date therefor having
been so mailed, such Defaulted Interest shall be paid to the Persons in whose
names the Notes (or their respective Predecessor Notes) were registered at the
close of business on such special record date and shall no longer be payable
pursuant to the following clause (2) of this Section 2.03.
(2) The Company may make payment of any Defaulted Interest in any
other lawful manner not inconsistent with the requirements of any securities
exchange or automated quotation system on which the Notes may be listed or
designated for issuance, and upon such notice as may be required by such
exchange or automated quotation system, if, after notice given by the Company to
the Trustee of the proposed payment pursuant to this clause, such manner of
payment shall be deemed practicable by the Trustee.
Section 2.04. Execution of Notes. The Notes shall be signed in the name and on
behalf of the Company by the manual or facsimile signature of its Chairman of
the Board, Chief Executive Officer, President or any Vice President (whether or
not designated by a number or numbers or word or words added before or after
the title "Vice President") and attested by the manual or facsimile signature
of its Secretary or any of its Assistant Secretaries or its Treasurer or any of
its Assistant Treasurers (which may be printed, engraved or otherwise
reproduced thereon, by facsimile or otherwise). Only such Notes as shall bear
thereon a certificate of authentication substantially in the form set forth on
the form of Note attached as Exhibit A hereto, manually executed by the Trustee
(or an authenticating agent appointed by the Trustee as provided by Section
16.10), shall be entitled to the benefits of this Indenture or be valid or
obligatory for any purpose. Such certificate by the Trustee (or such an
authenticating agent) upon any Note executed by the Company shall be conclusive
evidence that the Note so authenticated has been duly authenticated and
delivered hereunder and that the holder is entitled to the benefits of this
Indenture.
In case any officer of the Company who shall have signed any of the
Notes shall cease to be such officer before the Notes so signed shall have been
authenticated and delivered by the Trustee, or disposed of by the Company, such
Notes nevertheless may be authenticated and delivered or disposed of as though
the person who signed such Notes had not ceased to be such officer of the
Company, and any Note may be signed on behalf of the Company by such persons as,
at the actual date of the execution of such Note, shall be the proper officers
of the Company, although at the date of the execution of this Indenture any such
person was not such an officer.
Section 2.05. Exchange and Registration of Transfer of Notes; Restrictions on
Transfer, Depositary. (a) The Company shall cause to be kept at the Corporate
Trust Office a register (the register maintained in such office and in any other
office or agency of the Company designated pursuant to Section 5.02 being herein
sometimes collectively referred to as the "Note register") in which, subject to
such reasonable regulations as it may prescribe, the Company shall provide for
the registration of Notes and of transfers of Notes. The Note register shall be
in written form or in any form capable of being converted into written form
within a reasonably prompt period of time. The Trustee is hereby appointed "Note
registrar" for the purpose of registering Notes and transfers of Notes as herein
provided. The Company may appoint one or more co-registrars in accordance with
Section 5.02.
Upon surrender for registration of transfer of any Note to the Note registrar or
any co-registrar, and satisfaction of the requirements for such transfer set
forth in this Section 2.05, the Company shall execute, and the Trustee shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Notes of any authorized denominations and of a like
aggregate principal amount
and bearing such restrictive legends as may be required by this Indenture.
Notes may be exchanged for other Notes of any authorized denominations
and of a like aggregate principal amount, upon surrender of the Notes to be
exchanged at any such office or agency maintained by the Company pursuant to
Section 5.02. Whenever any Notes are so surrendered for exchange, the Company
shall execute, and the Trustee shall authenticate and deliver, the Notes which
the Noteholder making the exchange is entitled to receive bearing registration
numbers not contemporaneously outstanding.
All Notes issued upon any registration of transfer or exchange of Notes shall be
the valid obligations of the Company, evidencing the same debt, and entitled to
the same benefits under this Indenture, as the Notes surrendered upon such
registration of transfer or exchange.
All Notes presented or surrendered for registration of transfer or for exchange,
redemption or conversion shall (if so required by the Company or the Note
registrar) be duly endorsed, or be accompanied by a written instrument or
instruments of transfer in form satisfactory to the Company, and the Notes shall
be duly executed by the Noteholder thereof or his attorney duly authorized in
writing.
No service charge shall be made to any holder for any registration of transfer
or exchange of Notes, but the Company may require payment by the holder of a sum
sufficient to cover any tax, assessment or other governmental charge that may be
imposed in connection with any registration of transfer or exchange of Notes.
Neither the Company nor the Trustee nor any Note registrar shall be
required to exchange or register a transfer of (a) any Notes for a period of
fifteen (15) days next preceding any selection of Notes to be redeemed, (b) any
Notes or portions thereof called for redemption pursuant to Section 3.02, (c)
any Notes or portions thereof surrendered for conversion pursuant to Article 15
or (d) any Notes or portions thereof tendered for redemption (and not withdrawn)
pursuant to Section 3.05.
(b) So long as the Notes are eligible for book-entry settlement with
the Depositary, or unless otherwise required by law, all of the Notes will be
represented by one or more Notes in global form registered in the name of the
Depositary or the nominee of the Depositary (the "Global Note"), except as
otherwise specified below. The transfer and exchange of beneficial interests in
any such Global Note shall be effected through the Depositary in accordance with
this Indenture and the applicable procedures of the Depositary. The Trustee
shall make appropriate endorsements to reflect increases or decreases in the
principal amounts of any such Global Note as set forth on the face of the Note
("Principal Amount") to reflect any such transfers. Except as provided below,
beneficial owners of a Global Note shall not be entitled to have certificates
registered in their names, will not receive or be entitled to receive physical
delivery of certificates in definitive form and will not be considered holders
of such Global Note.
(c) Any Global Note may be endorsed with or have incorporated in the
text thereof such legends or recitals or changes not inconsistent with the
provisions of this Indenture as may be required by the Custodian, the Depositary
or by the National Association of Securities Dealers, Inc. in order for the
Notes to be tradeable on the Portal Market or as may be required for the Notes
to be tradeable on any other market developed for trading of securities pursuant
to Rule 144A or required to comply with any applicable law or any regulation
thereunder or with the rules and regulations of any securities exchange or
automated quotation system upon which the Notes may be listed or traded or to
conform with any usage with respect thereto, or to indicate any special
limitations or restrictions to which any particular Notes are subject.
(d) Every Note that bears or is required under this Section 2.05(d)
to bear the legend set forth in this Section (together with any Common Stock
issued upon conversion of the Notes and required to bear the legend set forth
in Section 2.05(e), collectively, the "Restricted Securities") shall be subject
to the restrictions on transfer set forth in this Section 2.05(d) (including
those set forth in the legend set forth below) unless such restrictions on
transfer shall be waived by written consent of the Company, and the holder of
each such Restricted Security, by such Noteholder's acceptance thereof, agrees
to be bound by all such restrictions on transfer. As used in Sections 2.05(d)
and 2.05(e), the term "transfer" encompasses any sale, pledge, loan, transfer
or other disposition whatsoever of any Restricted Security or any interest
therein.
Until the expiration of the holding period applicable to sales thereof
under Rule 144(k) under the Securities Act (or any successor provision), any
certificate evidencing any Note (and all securities issued in exchange therefor
or substitution thereof, other than Common Stock, if any, issued upon
conversion thereof, which shall bear the legend set forth in Section 2.05(e),
if applicable) shall bear a legend in substantially the following form, unless
such Note has been sold pursuant to a registration statement that has been
declared effective under the Securities Act (and which continues to be
effective at the time of such transfer), or unless otherwise agreed by the
Company in writing, with written notice thereof to the Trustee:
THE NOTE EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR
ANY STATE SECURITIES LAWS, AND, ACCORDINGLY, MAY NOT BE OFFERED OR
SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT
OF, UNITED STATES PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING
SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER HEREOF OR OF ANY
BENEFICIAL INTEREST HEREIN, (1) REPRESENTS THAT IT IS (A) "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT), (B) AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE
501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT)
("INSTITUTIONAL ACCREDITED INVESTOR") OR (C) A NON-U.S. PERSON; (2)
AGREES THAT IT WILL NOT, PRIOR TO EXPIRATION OF THE HOLDING PERIOD
APPLICABLE TO SALES OF THE NOTE EVIDENCED HEREBY UNDER RULE 144(k)
UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION), RESELL OR
OTHERWISE TRANSFER THIS NOTE OR THE COMMON STOCK ISSUABLE UPON
CONVERSION OF THIS NOTE, OR ANY BENEFICIAL INTEREST HEREIN, EXCEPT
(A) TO SANDISK CORPORATION, OR ANY SUBSIDIARY THEREOF (OR THEIR
RESPECTIVE SUCCESSORS), (B) INSIDE THE UNITED STATES TO A QUALIFIED
INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE
SECURITIES ACT, (C) INSIDE THE UNITED STATES TO AN INSTITUTIONAL
ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE
BANK OF NEW YORK, AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS
APPLICABLE), A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND
AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THE NOTES
(THE FORM OF WHICH LETTER CAN BE OBTAINED FROM SUCH TRUSTEE OR A
SUCCESSOR TRUSTEE, AS APPLICABLE), (D) OUTSIDE THE UNITED STATES IN
COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT, (E) PURSUANT TO
THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE
SECURITIES ACT (IF AVAILABLE) OR (F) PURSUANT TO A REGISTRATION
STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT
(AND WHICH CONTINUES TO BE EFFECTIVE AT THE TIME OF SUCH TRANSFER);
(3) PRIOR TO SUCH TRANSFER (OTHER THAN A TRANSFER PURSUANT TO
CLAUSES 2(A) OR 2(F) ABOVE), IT WILL FURNISH TO THE BANK OF NEW
YORK, AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS APPLICABLE) AND SANDISK
CORPORATION (OR ITS SUCCESSORS), SUCH CERTIFICATIONS, LEGAL OPINIONS
OR OTHER INFORMATION AS THE TRUSTEE OR SANDISK CORPORATION (OR ITS
SUCCESSORS) MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS
BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT; AND
(4) AGREES THAT IT WILL DELIVER TO EACH PERSON
TO WHOM THIS NOTE OR OF ANY BENEFICIAL INTEREST HEREIN, IS
TRANSFERRED (OTHER THAN A TRANSFEREE UNDER CLAUSE 1(F) ABOVE) A
NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION
WITH ANY TRANSFER OF THIS NOTE PRIOR TO THE EXPIRATION OF THE
HOLDING PERIOD APPLICABLE TO SALES OF THIS NOTE UNDER RULE 144(k)
UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION), THE HOLDER
MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF
RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS CERTIFICATE
TO THE BANK OF NEW YORK, AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS
APPLICABLE). THIS LEGEND WILL BE REMOVED UPON THE EARLIER OF THE
TRANSFER OF THE NOTES EVIDENCED HEREBY, OR ANY BENEFICIAL INTEREST
THEREIN, PURSUANT TO CLAUSE 2(F) ABOVE OR UPON ANY TRANSFER OF THE
NOTES EVIDENCED HEREBY, OR ANY BENEFICIAL INTEREST THEREIN, UNDER
RULE 144(k) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION).
AS USED HEREIN, THE TERMS "UNITED STATES" AND "U.S. PERSON" HAVE THE
MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT. THE
INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO
REGISTER ANY TRANSFER OF THIS NOTE IN VIOLATION OF THE FOREGOING
RESTRICTION.
Any Note (or security issued in exchange or substitution therefor) as to which
such restrictions on transfer shall have expired in accordance with their terms
or as to conditions for removal of the foregoing legend set forth therein have
been satisfied may, upon surrender of such Note for exchange to the Note
registrar in accordance with the provisions of this Section 2.05, be exchanged
for a new Note or Notes, of like tenor and aggregate principal amount, which
shall not bear the restrictive legend required by this Section 2.05(d).
Notwithstanding any other provisions of this Indenture (other than the
provisions set forth in this Section 2.05(d)), a Global Note may not be
transferred as a whole or in part except by the Depositary to a nominee of the
Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary.
The Depositary shall be a clearing agency registered under the Exchange Act. The
Company initially appoints The Depository Trust Company to act as Depositary
with respect to the Notes in global form. Initially, the Global Note shall be
issued to the Depositary, registered in the name of Cede & Co., as the nominee
of the Depositary, and deposited with the Custodian for Cede & Co.
If at any time the Depositary for a Global Note notifies the Company that it is
unwilling or unable to continue as Depositary for such Note, the Company may
appoint a successor Depositary with respect to such Note. If a successor
Depositary is not appointed by the Company within ninety (90) days after the
Company receives such notice, the Company will execute, and the Trustee, upon
receipt of an Officers' Certificate for the authentication and delivery of
Notes, will authenticate and deliver, Notes in certificated form, in aggregate
principal amount equal to the principal amount of such Global Note, in exchange
for such Global Note.
Notes in certificated form issued in exchange for a Global Note pursuant to
this Section 2.05 shall be registered in such names and in such authorized
denominations as the Depositary, pursuant to instructions from its direct or
indirect participants or otherwise, shall instruct the Trustee. Upon execution
and authentication, the Trustee shall deliver such Notes in certificated form
to the Persons in whose names such Notes in certificated form are so registered.
At such time as all interests in a Global Note have been redeemed, converted,
canceled or the Global Note is exchanged for Notes in certificated form, such
Global Note shall, upon receipt thereof, be canceled by the Trustee in
accordance with standing procedures and instructions existing between the
Depositary and the Custodian. At any time prior to such cancellation, if any
interest in a Global Note is redeemed, converted, repurchased or canceled, the
principal amount of such Global Note shall, in accordance with the standing
procedures and instructions existing between the Depositary and the Custodian,
be appropriately reduced or increased, as the case may be, and an endorsement
shall be made on such Global Note, by the Trustee or the Custodian, at the
direction of the Trustee, to reflect such reduction or increase.
(e) Until the expiration of the holding period applicable to sales
thereof under Rule 144(k) under the Securities Act (or any successor provision),
any stock certificate representing Common Stock issued upon conversion of any
Note shall bear a legend in substantially the following form, unless such Common
Stock has been sold pursuant to a registration statement that has been declared
effective under the Securities Act (and which continues to be effective at the
time of such transfer) or such Common Stock has been issued upon conversion of
Notes that have been transferred pursuant to a registration statement that has
been declared effective under the Securities Act, or unless otherwise agreed by
the Company in writing with written notice thereof to the transfer agent:
THE COMMON STOCK EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), OR ANY STATE SECURITIES LAWS, AND, ACCORDINGLY, MAY NOT BE
OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT
OR BENEFIT OF, UNITED STATES PERSONS EXCEPT AS SET FORTH IN THE
FOLLOWING SENTENCE. THE HOLDER HEREOF, OR OF ANY
BENEFICIAL INTEREST HEREIN, AGREES THAT UNTIL THE EXPIRATION OF THE
HOLDING PERIOD APPLICABLE TO SALES OF THE SECURITY EVIDENCED HEREBY,
OR OF ANY BENEFICIAL INTEREST THEREIN, UNDER RULE 144(k) UNDER THE
SECURITIES ACT (OR ANY SUCCESSOR PROVISION), (1) IT WILL NOT RESELL
OR OTHERWISE TRANSFER THE COMMON STOCK EVIDENCED HEREBY, OR ANY
BENEFICIAL INTEREST THEREIN EXCEPT (A) TO SANDISK CORPORATION OR TO
ANY SUBSIDIARY THEREOF (OR THEIR RESPECTIVE SUCCESSORS), (B) INSIDE
THE UNITED STATES TO A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED
IN RULE 144A UNDER THE SECURITIES ACT) IN COMPLIANCE WITH RULE 144A,
(C) INSIDE THE UNITED STATES TO AN INSTITUTIONAL "ACCREDITED
INVESTOR" (AS DEFINED IN RULE 501(a)(1), (2), (3) OR (7) UNDER THE
SECURITIES ACT) THAT PRIOR TO SUCH TRANSFER, FURNISHES TO
COMPUTERSHARE INVESTOR SERVICES, L.L.C., AS TRANSFER AGENT (OR A
SUCCESSOR TRANSFER AGENT, AS APPLICABLE), AND SANDISK CORPORATION
(OR ITS SUCCESSORS) A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON
TRANSFER OF THE COMMON STOCK EVIDENCED HEREBY (THE FORM OF WHICH
LETTER CAN BE OBTAINED FROM SUCH TRANSFER AGENT OR A SUCCESSOR
TRANSFER AGENT, AS APPLICABLE), (D) OUTSIDE THE UNITED STATES IN
COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT, (E) PURSUANT TO
THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE
SECURITIES ACT (IF AVAILABLE), OR (F) PURSUANT TO A REGISTRATION
STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT
(AND WHICH CONTINUES TO BE EFFECTIVE AT THE TIME OF SUCH TRANSFER);
(2) PRIOR TO SUCH TRANSFER (OTHER THAN A TRANSFER PURSUANT TO
CLAUSES 1(A) OR 1(F) ABOVE), IT WILL FURNISH TO COMPUTERSHARE
INVESTOR SERVICES, L.L.C., AS TRANSFER AGENT (OR A SUCCESSOR
TRANSFER AGENT, AS APPLICABLE), AND SANDISK CORPORATION (OR ITS
SUCCESSORS) SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION
AS IT OR SANDISK CORPORATION (OR ITS SUCCESSORS) MAY
REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE
PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND (3) IT WILL
DELIVER TO EACH PERSON TO WHOM THE COMMON STOCK EVIDENCED HEREBY, OR
ANY BENEFICIAL INTEREST THEREIN, IS TRANSFERRED (OTHER THAN A
TRANSFEREE UNDER CLAUSE 1(F) ABOVE) A NOTICE SUBSTANTIALLY TO THE
EFFECT OF THIS LEGEND. THIS LEGEND WILL BE REMOVED UPON THE EARLIER
OF THE TRANSFER OF THE COMMON STOCK EVIDENCED HEREBY, OR ANY
BENEFICIAL INTEREST THEREIN, PURSUANT TO CLAUSE 1(F) ABOVE OR UPON
ANY TRANSFER OF THE COMMON STOCK EVIDENCED HEREBY, OR OF ANY
BENEFICIAL INTEREST THEREIN, AFTER THE EXPIRATION OF THE HOLDING
PERIOD APPLICABLE TO SALES OF THE SECURITY EVIDENCED HEREBY UNDER
RULE 144(k) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION).
AS USED HEREIN, THE TERMS "UNITED STATES" AND "U.S. PERSON" HAVE THE
MEANING GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.
Any such Common Stock as to which such restrictions on transfer shall have
expired in accordance with their terms or as to which the conditions for
removal of the foregoing legend set forth therein have been satisfied may, upon
surrender of the certificates representing such shares of Common Stock for
exchange in accordance with the procedures of the transfer agent for the Common
Stock, be exchanged for a new certificate or certificates for a like number of
shares of Common Stock, which shall not bear the restrictive legend required by
this Section 2.05(e).
(f) Any Note or Common Stock issued upon the conversion or exchange of a
Notethat, prior to the expiration of the holding period applicable to sales
thereof under Rule 144(k) under the Securities Act (or any successor
provision), is purchased or owned by the Company or any Affiliate thereof may
not be resold by the Company or such Affiliate unless registered under the
Securities Act or resold pursuant to an exemption from the registration
requirements of the Securities Act in a transaction which results in such Notes
or Common Stock, as the case may be, no longer being "restricted securities"
(as defined under Rule 144).
Section 2.06. Mutilated, Destroyed, Lost or Stolen Notes. In case any Note
shall become mutilated or be destroyed, lost or stolen, the Company in its
discretion may execute, and upon its written request the Trustee or an
authenticating agent appointed by the Trustee shall authenticate and make
available for delivery, a new
Note, bearing a number not contemporaneously outstanding, in exchange and
substitution for the mutilated Note, or in lieu of and in substitution for the
Note so destroyed, lost or stolen. In every case the applicant for a
substituted Note shall furnish to the Company, to the Trustee and, if
applicable, to such authenticating agent such security or indemnity as may be
required by them to save each of them harmless for any loss, liability, cost or
expense caused by or connected with such substitution, and, in every case of
destruction, loss or theft, the applicant shall also furnish to the Company, to
the Trustee and, if applicable, to such authenticating agent evidence to their
satisfaction of the destruction, loss or theft of such Note and of the
ownership thereof.
Following receipt by the Trustee or such authenticating agent, as the case may
be, of satisfactory security or indemnity and evidence, as described in the
preceding paragraph, the Trustee or such authenticating agent may authenticate
any such substituted Note and make available for delivery such Note. Upon the
issuance of any substituted Note, the Company may require the payment by the
holder of a sum sufficient to cover any tax, assessment or other governmental
charge that may be imposed in relation thereto and any other expenses connected
therewith. In case any Note which has matured or is about to mature or has been
called for redemption or has been tendered for redemption (and not withdrawn)
or is to be converted into Common Stock shall become mutilated or be destroyed,
lost or stolen, the Company may, instead of issuing a substitute Note, pay or
authorize the payment of or convert or authorize the conversion of the same
(without surrender thereof except in the case of a mutilated Note), as the case
may be, if the applicant for such payment or conversion shall furnish to the
Company, to the Trustee and, if applicable, to such authenticating agent such
security or indemnity as may be required by them to save each of them harmless
for any loss, liability, cost or expense caused by or connected with such
substitution, and, in every case of destruction, loss or theft, the applicant
shall also furnish to the Company, the Trustee and, if applicable, any paying
agent or conversion agent evidence to their satisfaction of the destruction,
loss or theft of such Note and of the ownership thereof.
Every substitute Note issued pursuant to the provisions of this Section 2.06 by
virtue of the fact that any Note is destroyed, lost or stolen shall constitute
an additional contractual obligation of the Company, whether or not the
destroyed, lost or stolen Note shall be found at any time, and shall be
entitled to all the benefits of (but shall be subject to all the limitations
set forth in) this Indenture equally and proportionately with any and all other
Notes duly issued hereunder. To the extent permitted by law, all Notes shall be
held and owned upon the express condition that the foregoing provisions are
exclusive with respect to the replacement or payment or conversion of
mutilated, destroyed, lost or stolen Notes and shall preclude any and all other
rights or remedies notwithstanding any law or statute existing or hereafter
enacted to the contrary with respect to the replacement or payment or
conversion of negotiable instruments or other securities without their
surrender.
Section 2.07. Temporary Notes. Pending the preparation of Notes in certificated
form, the Company may execute and the Trustee or an authenticating agent
appointed by the Trustee shall, upon the written request of the Company,
authenticate and deliver temporary Notes (printed or lithographed). Temporary
Notes shall be issuable in any authorized denomination, and substantially in
the form of the Notes in certificated form, but with such omissions, insertions
and variations as may be appropriate for temporary Notes, all as may be
determined by the Company. Every such temporary Note shall be executed by the
Company and authenticated by the Trustee or such authenticating agent upon the
same conditions and in substantially the same manner, and with the same effect,
as the Notes in certificated form. Without unreasonable delay the Company will
execute and deliver to the Trustee or such authenticating agent Notes in
certificated form and thereupon any or all temporary Notes may be surrendered
in exchange therefor, at each office or agency maintained by the Company
pursuant to Section 5.02 and the Trustee or such authenticating agent shall
authenticate and make available for delivery in exchange for such temporary
Notes an equal aggregate principal amount of Notes in certificated form. Such
exchange shall be made by the Company at its own expense and without any charge
therefor. Until so exchanged, the temporary Notes shall in all respects be
entitled to the same benefits and subject to the same limitations under this
Indenture as Notes in certificated form authenticated and delivered hereunder.
Section 2.08. Cancellation of Notes Paid, Etc. All Notes surrendered for the
purpose of payment, redemption, conversion, exchange or registration of
transfer shall, if surrendered to the Company or any paying agent or any Note
registrar or any conversion agent, be surrendered to the Trustee and promptly
canceled by it, or, if surrendered to the Trustee, shall be promptly canceled
by it, and no Notes shall be issued in lieu thereof except as expressly
permitted by any of the provisions of this Indenture. The Trustee shall dispose
of such canceled Notes in accordance with its customary procedures. If the
Company shall acquire any of the Notes, such acquisition shall not operate as a
redemption or satisfaction of the indebtedness represented by such Notes unless
and until the same are delivered to the Trustee for cancellation.
Section 2.09. CUSIP Numbers. The Company in issuing the Notes may use "CUSIP"
numbers (if then generally in use), and, if so, the Trustee shall use "CUSIP"
numbers in notices of redemption as a convenience to Noteholders; provided that
any such notice may state that no representation is made as to the correctness
of such numbers either as printed on the Notes or as contained in any notice of
a redemption and that reliance may be placed only on the other identification
numbers printed on the Notes, and any such redemption shall not be affected by
any defect in or omission of such numbers. The Company will promptly notify the
Trustee of any change in the "CUSIP" numbers.
ARTICLE 3
Redemption of Notes
Section 3.01. Redemption of Notes. (a) Initial Prohibition on Redemption.
Except as otherwise provided in Section 3.05, the Notes may not be redeemed by
the Company, in whole or in part, at any time prior to November 17, 2004.
(b) Optional Redemption by the Company. At any time on or after
November 17, 2004 and prior to maturity, the Notes may be redeemed at the option
of the Company, in whole or in part, upon notice as set forth in Section
3.02, at the redemption prices set forth in the Form of Note attached as
Exhibit A hereto, together with accrued and unpaid interest, if any, to, but
excluding, the date fixed for redemption.
Section 3.02. Notice of Redemptions, Selection of Notes. In case the Company
shall desire to exercise the right to redeem all or, as the case may be, any
part of the Notes pursuant to Section 3.01, it shall fix a date for redemption
and it or, at its written request received by the Trustee not fewer than
forty-five (45) days prior (or such shorter period of time as may be acceptable
to the Trustee) to the date fixed for redemption, the Trustee in the name of
and at the expense of the Company, shall mail or cause to be mailed a notice of
such redemption not fewer than thirty (30) nor more than sixty (60) days prior
to the date fixed for redemption to the holders of Notes so to be redeemed as a
whole or in part at their last addresses as the same appear on the Note
register; provided that if the Company shall give such notice, it shall also
give written notice, and written notice of the Notes to be redeemed, to the
Trustee. Such mailing shall be by first class mail. The notice if mailed in the
manner herein provided shall be conclusively presumed to have been duly given,
whether or not the holder receives such notice. In any case, failure to give
such notice by mail or any defect in the notice to the holder of any Note
designated for redemption as a whole or in part shall not affect the validity
of the proceedings for the redemption of any other Note. Concurrently with the
mailing of any such notice of redemption, the Company shall issue a press
release announcing such redemption, the form and content of which press release
shall be determined by the Company in its sole discretion. The failure to issue
any such press release or any defect therein shall not affect the validity of
the redemption notice or any of the proceedings for the redemption of any Note
called for redemption.
Each such notice of redemption shall specify the aggregate principal amount of
Notes to be redeemed, the CUSIP number or numbers of the Notes being redeemed,
the date fixed for redemption (which shall be a Business Day), the redemption
price at which Notes are to be redeemed, the place or places of payment, that
payment will be made upon presentation and surrender of such Notes, whether
interest accrued to the date fixed for redemption will be paid as specified in
said notice, and that on and after said date interest thereon or on the portion
thereof to be redeemed will cease to accrue. Such notice shall also state the
current Conversion Rate and the date on which the right to convert such Notes
or portions thereof into Common Stock will expire. If fewer than all the Notes
are to be redeemed, the notice of redemption shall identify the Notes to be
redeemed (including CUSIP numbers, if any). In case any Note is to be redeemed
in part only, the notice of redemption shall state the portion of the principal
amount thereof to be redeemed and shall state that, on and after the date fixed
for redemption, upon surrender of such Note, a new Note or Notes in principal
amount equal to the unredeemed portion thereof will be issued.
On or prior to the redemption date specified in the notice of redemption given
as provided in this Section 3.02, the Company will deposit with the Trustee or
with one or more paying agents (or, if the Company is acting as its own paying
agent, set aside, segregate and hold in trust as provided in Section 5.04)
an amount of
money in immediately available funds sufficient to redeem on the redemption
date all the Notes (or portions thereof) so called for redemption (other than
those theretofore surrendered for conversion into Common Stock) at the
appropriate redemption price, together with accrued interest to, but excluding,
the date fixed for redemption; provided that if such payment is made on the
redemption date it must be received by the Trustee or paying agent, as the case
may be, by 10:00 a.m. New York City time on such date. The Company shall be
entitled to retain any interest, yield or gain on amounts deposited with the
Trustee or any paying agent pursuant to this Section 3.02 in excess of amounts
required hereunder to pay the redemption price and accrued interest to, but
excluding, the date fixed for redemption. If any Note called for redemption is
converted pursuant hereto prior to such redemption, any money deposited with
the Trustee or any paying agent or so segregated and held in trust for the
redemption of such Note shall be paid to the Company upon its written request,
or, if then held by the Company, shall be discharged from such trust. Whenever
any Notes are to be redeemed, the Company will give the Trustee written notice
in the form of an Officers' Certificate not fewer than forty-five (45) days (or
such shorter period of time as may be acceptable to the Trustee) prior to the
redemption date as to the aggregate principal amount of Notes to be redeemed.
If less than all of the outstanding Notes are to be redeemed, the Trustee shall
select the Notes in certificated form or portions thereof or portions of the
Notes, evidenced by a Global Note, as the case may be, to be redeemed (in
principal amounts of $1,000 or multiples thereof) by lot, on a pro rata basis
or by another method the Trustee deems fair and appropriate. If any Note
selected for partial redemption is submitted for conversion in part after such
selection, the portion of such Note submitted for conversion shall be deemed
(so far as may be) to be the portion to be selected for redemption. The Notes
(or portions thereof) so selected shall be deemed duly selected for redemption
for all purposes hereof, notwithstanding that any such Note is submitted for
conversion in part before the mailing of the notice of redemption.
Upon any redemption of less than all of the outstanding Notes, the Company and
the Trustee may (but need not), solely for purposes of determining the pro rata
allocation among such Notes as are unconverted and outstanding at the time of
redemption, treat as outstanding any Notes surrendered for conversion during the
period of fifteen (15) days next preceding the mailing of a notice of redemption
and may (but need not) treat as outstanding any Note authenticated and delivered
during such period in exchange for the unconverted portion of any Note converted
in part during such period.
Section 3.03. Payment of Notes Called for Redemption. If notice of redemption
has been given as above provided, the Notes or portion of Notes with respect to
which such notice has been given shall, unless converted into Common Stock
pursuant to the terms hereof, become due and payable on the date fixed for
redemption and at the place or places stated in such notice at the applicable
redemption price, together with interest accrued to (but excluding) the date
fixed for redemption, and on and after said date (unless the Company shall
default in the payment of such Notes at the redemption price, together with
interest accrued to said date) interest on the Notes or portion of Notes so
called for redemption
shall cease to accrue and, after the close of business on the Business Day next
preceding the date fixed for redemption, such Notes shall cease to be
convertible into Common Stock and, except as provided in Sections 8.05 and
13.04, to be entitled to any benefit or security under this Indenture, and the
holders thereof shall have no right in respect of such Notes except the right
to receive the redemption price thereof and unpaid interest to (but excluding)
the date fixed for redemption. On presentation and surrender of such Notes at a
place of payment in said notice specified, the said Notes or the specified
portions thereof shall be paid and redeemed by the Company at the applicable
redemption price, together with interest accrued thereon to (but excluding) the
date fixed for redemption; provided that if the applicable redemption date is
an interest payment date, the interest payable on such interest payment date
shall be payable to the holders of record of such Notes on the applicable
record date instead of the holders surrendering such Notes for redemption on
such date.
Upon presentation of any Note redeemed in part only, the Company shall execute
and the Trustee shall authenticate and make available for delivery to the
holder thereof, at the expense of the Company, a new Note or Notes, of
authorized denominations, in principal amount equal to the unredeemed portion
of the Notes so presented.
Notwithstanding the foregoing, the Trustee shall not redeem any Notes or mail
any notice of redemption during the continuance of a default in payment of
interest or premium, if any, on the Notes. If any Note called for redemption
shall not be so paid upon surrender thereof for redemption, the principal and
premium, if any, shall, until paid or duly provided for, bear interest from the
date fixed for redemption at the rate borne by the Note and such Note shall
remain convertible into Common Stock until the principal and premium, if any,
and interest shall have been paid or duly provided for.
Section 3.04. Conversion Arrangement on Call for Redemption. In connection with
any redemption of Notes, the Company may arrange for the purchase and conversion
of any Notes by an agreement with one or more investment bankers or other
purchasers to purchase such Notes by paying to the Trustee in trust for the
Noteholders, on or before the date fixed for redemption, an amount not less than
the applicable redemption price, together with interest accrued to (but
excluding) the date fixed for redemption, of such Notes. Notwithstanding
anything to the contrary contained in this Article 3, the obligation of the
Company to pay the redemption price of such Notes, together with interest
accrued to (but excluding) the date fixed for redemption, shall be deemed to be
satisfied and discharged to the extent such amount is so paid by such
purchasers. If such an agreement is entered into, a copy of which will be filed
with the Trustee prior to the date fixed for redemption, any Notes not duly
surrendered for conversion by the holders thereof may, at the option of the
Company, be deemed, to the fullest extent permitted by law, acquired by such
purchasers from such holders and (notwithstanding anything to the contrary
contained in Article 15) surrendered by such purchasers for conversion, all as
of immediately prior to the close of business on the date fixed for redemption
(and the right to convert any such Notes shall be extended through such time),
subject to payment of the above amount as aforesaid. At the direction of the
Company, the Trustee shall hold and dispose of
any such amount paid to it in the same manner as it would monies deposited with
it by the Company for the redemption of Notes. Without the Trustee's prior
written consent, no arrangement between the Company and such purchasers for the
purchase and conversion of any Notes shall increase or otherwise affect any of
the powers, duties, responsibilities or obligations of the Trustee as set forth
in this Indenture.
Section 3.05. Redemption at Option of Holders. (a) If there shall occur a
Fundamental Change at any time prior to maturity of the Notes, then each
Noteholder shall have the right, at such holder's option, to require the Company
to redeem all of such holder's Notes, or any portion thereof that is a multiple
of $1,000 principal amount, on the date (the "Repurchase Date") that is thirty
(30) days after the date of the Company Notice (as defined in Section 3.05(b)
below) of such Fundamental Change (or, if such 30th day is not a Business Day,
the next succeeding Business Day) at a redemption price equal to 100% of the
principal amount thereof, together with accrued interest to (but excluding) the
Repurchase Date; provided that, if such Repurchase Date is an interest payment
date, then the interest payable on such interest payment date shall be paid to
the holders of record of the Notes on the applicable record date instead of the
holders surrendering the Notes for redemption on such date.
Upon presentation of any Note redeemed in part only, the Company shall execute
and, upon the Company's written direction to the Trustee, the Trustee shall
authenticate and deliver to the holder thereof, at the expense of the Company, a
new Note or Notes, of authorized denominations, in principal amount equal to the
unredeemed portion of the Notes so presented.
(b) On or before the tenth day after the occurrence of a Fundamental
Change, the Company or at its written request (which must be received by the
Trustee at least five (5) Business Days prior to the date the Trustee is
requested to give notice as described below, unless the Trustee shall agree in
writing to a shorter period), the Trustee, in the name of and at the expense of
the Company, shall mail or cause to be mailed to all holders of record on the
date of the Fundamental Change a notice (the "Company Notice") of the
occurrence of such Fundamental Change and of the redemption right at the option
of the holders arising as a result thereof. Such notice shall be mailed in the
manner and with the effect set forth in the first paragraph of Section 3.02
(without regard for the time limits set forth therein). If the Company shall
give such notice, the Company shall also deliver a copy of the Company Notice
to the Trustee at such time as it is mailed to Noteholders. Concurrently with
the mailing of any Company Notice, the Company shall issue a press release
announcing such Fundamental Change referred to in the Company Notice, the form
and content of which press release shall be determined by the Company in its
sole discretion. The failure to issue any such press release or any defect
therein shall not affect the validity of the Company Notice or any proceedings
for the redemption of any Note which any Noteholder may elect to have the
Company redeem as provided in this Section 3.05.
Each Company Notice shall specify the circumstances constituting the Fundamental
Change, the Repurchase Date, the price at which the Company shall
be obligated to redeem Notes, that the holder must exercise the redemption right
on or prior to the close of business on the Repurchase Date (the "Fundamental
Change Expiration Time"), that the holder shall have the right to withdraw any
Notes surrendered prior to the Fundamental Change Expiration Time, a description
of the procedure which a Noteholder must follow to exercise such redemption
right and to withdraw any surrendered Notes, the place or places where the
holder is to surrender such holder's Notes, the amount of interest accrued on
each Note to the Repurchase Date and the "CUSIP" number or numbers of the Notes
(if then generally in use).
No failure of the Company to give the foregoing notices and no defect therein
shall limit the Noteholders' redemption rights or affect the validity of the
proceedings for the redemption of the Notes pursuant to this Section 3.05.
(c) For a Note to be so redeemed at the option of the holder, the
Company must receive at the office or agency of the Company maintained for that
purpose or, at the option of such holder, the Corporate Trust Office, such Note
with the form entitled "Option to Elect Repayment Upon A Fundamental Change" on
the reverse thereof duly completed, together with such Notes duly endorsed for
transfer, on or before the Fundamental Change Expiration Time. All questions as
to the validity, eligibility (including time of receipt) and acceptance of any
Note for repayment shall be determined by the Company, whose determination shall
be final and binding absent manifest error.
(d) On or prior to the Repurchase Date, the Company will deposit with
the Trustee or with one or more paying agents (or, if the Company is acting as
its own paying agent, set aside, segregate and hold in trust as provided in
Section 5.04) an amount of money sufficient to redeem on the Repurchase Date all
the Notes to be redeemed on such date at the appropriate redemption price,
together with accrued interest to (but excluding) the Repurchase Date; provided
that if such payment is made on the Repurchase Date it must be received by the
Trustee or paying agent, as the case may be, by 10:00 a.m. New York City time,
on such date. Payment for Notes surrendered for redemption (and not withdrawn)
prior to the Fundamental Change Expiration Time will be made promptly (but in no
event more than five (5) Business Days) following the Repurchase Date by mailing
checks for the amount payable to the holders of such Notes entitled thereto as
they shall appear on the registry books of the Company.
(e) In the case of a reclassification, change, consolidation, merger,
combination, sale or conveyance to which Section 15.06 applies, in which the
Common Stock of the Company is changed or exchanged as a result into the right
to receive stock, securities or other property or assets (including cash), which
includes shares of common stock of another Person that are, or upon issuance
will be, traded on a United States national securities exchange or approved for
trading on an established automated over-the-counter trading market in the
United States and such shares constitute at the time such change or exchange
becomes effective in excess of 50% of the aggregate fair market value of such
stock, securities or other property or assets (including cash) (as determined by
the Company, which determination shall be conclusive and binding), then the
Person formed by such
consolidation or resulting from such merger or which acquires such assets or is
the issuer of such shares of common stock, as the case may be, shall execute and
deliver to the Trustee a supplemental indenture (accompanied by an Opinion of
Counsel that such supplemental indenture complies with the Trust Indenture Act
as in force at the date of execution of such supplemental indenture) modifying
the provisions of this Indenture relating to the right of holders of the Notes
to cause the Company to repurchase the Notes following a Fundamental Change,
including without limitation the applicable provisions of this Section 3.05 and
the definitions of Common Stock and Fundamental Change, as appropriate, as
determined in good faith by the Company (which determination shall be conclusive
and binding), to make such provisions apply to such other Person if different
from the Company and the common stock issued by such Person (in lieu of the
Company and the Common Stock of the Company).
(f) The Company will comply with the provisions of Rule 13e-4 and any
other tender offer rules under the Exchange Act to the extent then applicable in
connection with the redemption rights of the holders of Notes in the event of a
Fundamental Change.
ARTICLE 4
Subordination of Notes
Section 4.01. Agreement of Subordination. The Company covenants and agrees, and
each holder of Notes issued hereunder by its acceptance thereof likewise
covenants and agrees, that all Notes shall be issued subject to the provisions
of this Article Four, and each Person holding any Note, whether upon original
issue or upon registration of transfer, assignment or exchange thereof, accepts
and agrees to be bound by such provisions.
The payment of the principal of, premium, if any, and interest on all Notes
(including, but not limited to, the redemption price with respect to the Notes
called for redemption in accordance with Section 3.02 or submitted for
redemption in accordance with Section 3.05, as the case may be, as provided in
this Indenture) issued hereunder shall, to the extent and in the manner
hereinafter set forth, be subordinated and subject in right of payment to the
prior payment in full of all Senior Indebtedness, whether outstanding at the
date of this Indenture or thereafter incurred.
No provision of this Article Four shall prevent the occurrence of any default
or Event of Default hereunder.
Section 4.02. Payments to Noteholders. No payment shall be made with respect to
the principal of, premium, if any, or interest on the Notes (including, but not
limited to, the redemption price with respect to the Notes to be called for
redemption in accordance with Section 3.02 or submitted for redemption in
accordance with Section 3.05, as the case may be, as provided in this
Indenture), except payments and distributions made by the Trustee as permitted
by the first or second paragraph of Section 4.05, if:
(i) a default in the payment of principal, premium, if any,
interest, rent or other obligations in respect of Designated Senior
Indebtedness occurs and is continuing (or, in the case of
Designated Senior Indebtedness for which there is a period of grace,
in the event of such a default that continues beyond the period of
grace, if any, specified in the instrument or lease evidencing such
Designated Senior Indebtedness) (a "Payment Default"), unless and
until such Payment Default shall have been cured or waived or shall
have ceased to exist; or
(ii) a default, other than a Payment Default, on any Designated
Senior Indebtedness occurs and is continuing that then permits
holders of such Designated Senior Indebtedness to accelerate its
maturity (or in the case of any lease, a default occurs and is
continuing that permits the lessor to either terminate the lease or
require the Company to make an irrevocable offer to terminate the
lease following an event of default thereunder) and the Trustee
receives a notice of the default (a "Payment Blockage Notice") from
a holder of Designated Senior Indebtedness, a Representative of
Designated Senior Indebtedness or the Company (a "Non-Payment
Default").
If the Trustee receives any Payment Blockage Notice pursuant to clause (ii)
above, no subsequent Payment Blockage Notice shall be effective for purposes of
this Section 4.02 unless and until at least 365 days shall have elapsed since
the initial effectiveness of the immediately prior Payment Blockage Notice. No
Non-Payment Default that existed or was continuing on the date of delivery of
any Payment Blockage Notice to the Trustee shall be, or be made, the basis for
a subsequent Payment Blockage Notice.
The Company may and shall resume payments on and distributions in respect of
the Notes upon the earlier of:
(1) the date upon which any such Payment Default is cured or
waived or ceases to exist, or
(2) in the case of a Non-Payment Default, the earlier of (a) the
date upon which such default is cured or waived or ceases to exist
or (b) 179 days after the applicable Payment Blockage Notice is
received by the Trustee if the maturity of such Designated Senior
Indebtedness has not been accelerated (or in the case of any lease,
179 days after notice is received if the Company has not received
notice that the lessor under such lease has exercised its right to
terminate the lease or require the Company to make an irrevocable
offer to terminate the lease following an event of default
thereunder), unless this Article Four otherwise prohibits the
payment or distribution at the time of such payment or distribution.
Upon any payment by the Company, or distribution of assets of the Company of
any kind or character, whether in cash, property or securities, to creditors
upon any dissolution or winding up or liquidation or reorganization of the
Company, whether voluntary or involuntary or in bankruptcy, insolvency,
receivership or other proceedings, all amounts due or to become due upon all
Senior Indebtedness shall first be paid in full in cash or other payment
satisfactory to the holders of
such Senior Indebtedness, or payment thereof in accordance with its terms shall
be provided for in cash or other payment satisfactory to the holders of such
Senior Indebtedness before any payment is made on account of the principal of,
premium, if any, or interest on the Notes (except payments made pursuant to
Article Thirteen from monies deposited with the Trustee pursuant thereto prior
to commencement of proceedings for such dissolution, winding up, liquidation or
reorganization), and upon any such dissolution or winding up or liquidation or
reorganization of the Company or bankruptcy, insolvency, receivership or other
similar proceeding, any payment by the Company, or distribution of assets of the
Company of any kind or character, whether in cash, property or securities, to
which the holders of the Notes or the Trustee would be entitled, except for the
provisions of this Article Four, shall (except as aforesaid) be paid by the
Company or by any receiver, trustee in bankruptcy, liquidating trustee, agent or
other Person making such payment or distribution, or by the holders of the Notes
or by the Trustee under this Indenture if received by them or it, directly to
the holders of Senior Indebtedness (pro rata to such holders on the basis of the
respective amounts of Senior Indebtedness held by such holders, or as otherwise
required by law or a court order) or their Representative or Representatives, as
their respective interests may appear, to the extent necessary to pay all Senior
Indebtedness in full, in cash or other payment satisfactory to the holders of
such Senior Indebtedness, after giving effect to any concurrent payment or
distribution to or for the holders of Senior Indebtedness, before any payment or
distribution is made to the holders of the Notes or to the Trustee.
For purposes of this Article Four, the words, "cash, property or securities"
shall not be deemed to include shares of stock of the Company as reorganized or
readjusted, or securities of the Company or any other corporation provided for
by a plan of reorganization or readjustment, the payment of which is
subordinated at least to the extent provided in this Article Four with respect
to the Notes to the payment of all Senior Indebtedness which may at the time be
outstanding provided that (i) the Senior Indebtedness is assumed by the new
corporation, if any, resulting from any reorganization or readjustment, and (ii)
the rights of the holders of Senior Indebtedness (other than leases which are
not assumed by the Company or the new corporation, as the case may be) are not,
without the consent of such holders, altered by such reorganization or
readjustment. The consolidation of the Company with, or the merger of the
Company into, another corporation or the liquidation or dissolution of the
Company following the conveyance or transfer of its property as an entirety, or
substantially as an entirety, to another Person upon the terms and conditions
provided for in Article Twelve shall not be deemed a dissolution, winding-up,
liquidation or reorganization for the purposes of this Section 4.02 if such
other Person shall, as a part of such consolidation, merger, conveyance or
transfer, comply with the conditions stated in Article Twelve.
In the event of the acceleration of the Notes because of an Event of Default, no
payment or distribution shall be made to the Trustee or any holder of Notes in
respect of the principal of, premium, if any, or interest on the Notes
(including, but not limited to, the redemption price with respect to the Notes
called for redemption in accordance with Section 3.02 or submitted for
redemption in
accordance with Section 3.05, as the case may be, as provided in this
Indenture), except payments and distributions made by the Trustee as permitted
by the first or second paragraph of Section 4.05, until all Senior Indebtedness
has been paid in full in cash or other payment satisfactory to the holders of
Senior Indebtedness or such acceleration is rescinded in accordance with the
terms of this Indenture. If payment of the Notes is accelerated because of an
Event of Default, the Company or the Trustee shall promptly notify holders of
Senior Indebtedness of the acceleration.
In the event that, notwithstanding the foregoing provisions, any payment or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities (including, without limitation, by way of setoff or
otherwise), prohibited by the foregoing provisions in this Section 4.02, shall
be received by the Trustee or the holders of the Notes before all Senior
Indebtedness is paid in full in cash or other payment satisfactory to the
holders of such Senior Indebtedness, or provision is made for such payment
thereof in accordance with its terms in cash or other payment satisfactory to
the holders of such Senior Indebtedness, such payment or distribution shall be
held in trust for the benefit of and shall be paid over or delivered to the
holders of Senior Indebtedness or their Representative or Representatives, as
their respective interests may appear, as calculated by the Company, for
application to the payment of any Senior Indebtedness remaining unpaid to the
extent necessary to pay all Senior Indebtedness in full in cash or other payment
satisfactory to the holders of such Senior Indebtedness, after giving effect to
any concurrent payment or distribution to or for the holders of such Senior
Indebtedness.
Nothing in this Section 4.02 shall apply to claims of, or payments to, the
Trustee under or pursuant to Section 8.06. This Section 4.02 shall be subject to
the further provisions of Section 4.05.
Section 4.03. Subrogation of Notes. Subject to the payment in full of all Senior
Indebtedness, the rights of the holders of the Notes shall be subrogated to the
extent of the payments or distributions made to the holders of such Senior
Indebtedness pursuant to the provisions of this Article Four (equally and
ratably with the holders of all indebtedness of the Company which by its express
terms is subordinated to other indebtedness of the Company to substantially the
same extent as the Notes are subordinated and is entitled to like rights of
subrogation) to the rights of the holders of Senior Indebtedness to receive
payments or distributions of cash, property or securities of the Company
applicable to the Senior Indebtedness until the principal, premium, if any, and
interest on the Notes shall be paid in full, and, for the purposes of such
subrogation, no payments or distributions to the holders of the Senior
Indebtedness of any cash, property or securities to which the holders of the
Notes or the Trustee would be entitled except for the provisions of this Article
Four, and no payment pursuant to the provisions of this Article Four, to or for
the benefit of the holders of Senior Indebtedness by holders of the Notes or the
Trustee, shall, as among the Company, its creditors other than holders of Senior
Indebtedness, and the holders of the Notes, be deemed to be a payment by the
Company to or on account of the Senior Indebtedness, and no payments or
distributions of cash, property or securities to or for the benefit of the
holders of the Notes pursuant to the
subrogation provisions of this Article Four, which would otherwise have been
paid to the holders of Senior Indebtedness, shall be deemed to be a payment by
the Company to or for the account of the Notes. It is understood that the
provisions of this Article Four are intended solely for the purposes of defining
the relative rights of the holders of the Notes, on the one hand, and the
holders of the Senior Indebtedness, on the other hand.
Nothing contained in this Article Four or elsewhere in this Indenture or in the
Notes is intended to or shall impair, as among the Company, its creditors other
than the holders of Senior Indebtedness, and the holders of the Notes, the
obligation of the Company, which is absolute and unconditional, to pay to the
holders of the Notes the principal of, premium, if any, and interest on the
Notes as and when the same shall become due and payable in accordance with their
terms, or is intended to or shall affect the relative rights of the holders of
the Notes and creditors of the Company other than the holders of the Senior
Indebtedness, nor shall anything herein or therein prevent the Trustee or the
holder of any Note from exercising all remedies otherwise permitted by
applicable law upon default under this Indenture, subject to the rights, if any,
under this Article Four of the holders of Senior Indebtedness in respect of
cash, property or securities of the Company received upon the exercise of any
such remedy.
Section 4.04. Authorization to Effect Subordination. Each holder of a Note by
the holder's acceptance thereof authorizes and directs the Trustee on the
holder's behalf to take such action as may be necessary or appropriate to
effectuate the subordination as provided in this Article Four and appoints the
Trustee to act as the holder's attorney-in-fact for any and all such purposes.
If the Trustee does not file a proper proof of claim or proof of debt in the
form required in any proceeding referred to in the third paragraph of Section
7.02 hereof at least thirty (30) days before the expiration of the time to file
such claim, the holders of any Senior Indebtedness or their Representatives are
hereby authorized to file an appropriate claim for and on behalf of the holders
of the Notes.
Section 4.05. Notice to Trustee. The Company shall give prompt written notice in
the form of an Officers' Certificate to a Responsible Officer of the Trustee and
to any paying agent of any fact known to the Company that would prohibit the
making of any payment of monies to or by the Trustee or any paying agent in
respect of the Notes pursuant to the provisions of this Article Four.
Notwithstanding the provisions of this Article Four or any other provision of
this Indenture, the Trustee shall not be charged with knowledge of the existence
of any facts that would prohibit the making of any payment of monies to or by
the Trustee in respect of the Notes pursuant to the provisions of this Article
Four, unless and until a Responsible Officer of the Trustee shall have received
written notice thereof at the Corporate Trust Office from the Company (in the
form of an Officers' Certificate) or a Representative or a holder or holders of
Senior Indebtedness, and before the receipt of any such written notice, the
Trustee, subject to the provisions of Section 8.01, shall be entitled in all
respects to assume that no such facts exist; provided, however, that if on a
date not less than three Business Days prior to the date upon which by the terms
hereof any such monies may become payable for any purpose (including, without
limitation, the payment of the principal of, or premium, if any, or interest on
any Note) the Trustee shall
not have received, with respect to such monies, the notice provided for in this
Section 4.05, then, anything herein contained to the contrary notwithstanding,
the Trustee shall have full power and authority to apply monies received to the
purpose for which they were received, and shall not be affected by any notice to
the contrary that may be received by it on or after such prior date.
Notwithstanding anything in this Article Four to the contrary, nothing shall
prevent any payment by the Trustee to the Noteholders of monies deposited with
it pursuant to Section 13.01, if a Responsible Officer of the Trustee shall not
have received written notice at the Corporate Trust Office on or before one
Business Day prior to the date such payment is due that such payment is not
permitted under Section 4.01 or 4.02.
The Trustee, subject to the provisions of Section 8.01, shall be entitled to
rely on the delivery to it of a written notice by a Representative or a person
representing himself to be a holder of Senior Indebtedness (or a trustee on
behalf of such holder) to establish that such notice has been given by a
Representative or a holder of Senior Indebtedness or a trustee on behalf of any
such holder or holders. The Trustee shall not be required to make any payment or
distribution to or on behalf of a holder of Senior Indebtedness pursuant to this
Article Four unless it has received satisfactory evidence as to the amount of
Senior Indebtedness held by such Person, the extent to which such Person is
entitled to participate in such payment or distribution and any other facts
pertinent to the rights of such Person under this Article Four.
Section 4.06. Trustee's Relation to Senior Indebtedness. The Trustee, in its
individual capacity, shall be entitled to all the rights set forth in this
Article Four in respect of any Senior Indebtedness at any time held by it, to
the same extent as any other holder of Senior Indebtedness, and nothing in
Section 8.13 or elsewhere in this Indenture shall deprive the Trustee of any of
its rights as such holder.
With respect to the holders of Senior Indebtedness, the Trustee undertakes to
perform or to observe only such of its covenants and obligations as are
specifically set forth in this Article Four, and no implied covenants or
obligations with respect to the holders of Senior Indebtedness shall be read
into this Indenture against the Trustee. The Trustee shall not be deemed to owe
any fiduciary duty to the holders of Senior Indebtedness and, subject to the
provisions of Section 8.01, the Trustee shall not be liable to any holder of
Senior Indebtedness (i) for any failure to make any payments or distributions to
such holder or (ii) if it shall pay over or deliver to holders of Notes, the
Company or any other Person money in compliance with this Article Four.
Section 4.07. No Impairment of Subordination. No right of any present or future
holder of any Senior Indebtedness to enforce subordination as herein provided
shall at any time in any way be prejudiced or impaired by any act or failure to
act on the part of the Company or by any act or failure to act, in good faith,
by any such holder, or by any noncompliance by the Company with the terms,
provisions and covenants of this Indenture, regardless of any knowledge thereof
which any such holder may have or otherwise be charged with. Senior Indebtedness
may be created, renewed or extended and holders of Senior Indebtedness may
exercise any rights under any instrument creating or evidencing such Senior
Indebtedness, including, without limitation, any waiver of default thereunder,
without any
notice to or consent from the holders of the Notes or the Trustee. No
compromise, alteration, amendment, modification, extension, renewal or other
change of, or waiver, consent or other action in respect of, any liability or
obligation under or in respect of the Senior Indebtedness or any terms or
conditions of any instrument creating or evidencing such Senior Indebtedness
shall in any way alter or affect any of the provisions of this Article Four or
the subordination of the Notes provided thereby.
Section 4.08. Certain Conversions Not Deemed Payment. For the purposes of this
Article Four only, (1) the issuance and delivery of junior securities upon
conversion of Notes in accordance with Article Fifteen shall not be deemed to
constitute a payment or distribution on account of the principal of, premium, if
any, or interest on Notes or on account of the purchase or other acquisition of
Notes, and (2) the payment, issuance or delivery of cash (except in satisfaction
of fractional shares pursuant to Section 15.03), property or securities (other
than junior securities) upon conversion of a Note shall be deemed to constitute
payment on account of the principal of, premium, if any, or interest on such
Note. For the purposes of this Section 4.08, the term "junior securities" means
(a) shares of any stock of any class of the Company or (b) securities of the
Company that are subordinated in right of payment to all Senior Indebtedness
that may be outstanding at the time of issuance or delivery of such securities
to substantially the same extent as, or to a greater extent than, the Notes are
so subordinated as provided in this Article Four. Nothing contained in this
Article Four or elsewhere in this Indenture or in the Notes is intended to or
shall impair, as among the Company, its creditors (other than holders of Senior
Indebtedness) and the Noteholders, the right, which is absolute and
unconditional, of the Holder of any Note to convert such Note in accordance with
Article Fifteen.
Section 4.09. Article Applicable to Paying Agents. If at any time any paying
agent other than the Trustee shall have been appointed by the Company and be
then acting hereunder, the term "Trustee" as used in this Article Four shall
(unless the context otherwise requires) be construed as extending to and
including such paying agent within its meaning as fully for all intents and
purposes as if such paying agent were named in this Article Four in addition to
or in place of the Trustee; provided, however, that the first paragraph of
Section 4.05 shall not apply to the Company or any Affiliate of the Company if
it or such Affiliate acts as paying agent.
The Trustee shall not be responsible for the actions or inactions of any other
paying agents (including the Company if acting as its own paying agent) and
shall have no control of any funds held by such other paying agents.
Section 4.10. Senior Indebtedness Entitled to Rely. The holders of Senior
Indebtedness shall have the right to rely upon this Article Four, and no
amendment or modification of the provisions contained herein shall diminish the
rights of such holders unless such holders shall have agreed in writing thereto.
Section 4.11. Reliance on Judicial Order or Certificate of Liquidating Agent.
Upon any payment or distribution of assets of the Company referred to in this
Article Four, the Trustee and the Noteholders shall be entitled to rely upon any
order or decree entered by any court of competent jurisdiction in which such
insolvency, bankruptcy, receivership, liquidation, reorganization, dissolution,
winding up or similar case or proceeding is pending, or a certificate of the
trustee in bankruptcy, liquidating trustee, custodian, receiver, assignee for
the benefit of creditors, agent or other Person making such payment or
distribution, delivered to the Trustee or to the Noteholders, for the purpose of
ascertaining the Persons entitled to participate in such payment or
distribution, the holders of Senior Indebtedness and other indebtedness of the
Company, the amount thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to this Article
Four.
ARTICLE 5
Particular Covenants of the Company
Section 5.01. Payment of Principal, Premium and Interest. The Company covenants
and agrees that it will duly and punctually pay or cause to be paid the
principal of and premium, if any (including the redemption price upon redemption
pursuant to Article 3), and interest, on each of the Notes at the places, at the
respective times and in the manner provided herein and in the Notes.
Section 5.02. Maintenance of Office or Agency. The Company will maintain an
office or agency in the Borough of Manhattan, the City of New York, where the
Notes may be surrendered for registration of transfer or exchange or for
presentation for payment or for conversion or redemption and where notices and
demands to or upon the Company in respect of the Notes and this Indenture may be
served. The Company will give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency not
designated or appointed by the Trustee. If at any time the Company shall fail to
maintain any such required office or agency or shall fail to furnish the Trustee
with the address thereof, such presentations, surrenders, notices and demands
may be made or served at the Corporate Trust Office or the office of agency of
the Trustee in The Borough of Manhattan.
The Company may also from time to time designate co-registrars and one or more
offices or agencies where the Notes may be presented or surrendered for any or
all such purposes and may from time to time rescind such designations. The
Company will give prompt written notice of any such designation or rescission
and of any change in the location of any such other office or agency.
The Company hereby initially designates the Trustee as paying agent, Note
registrar, Custodian and conversion agent and each of the Corporate Trust Office
and the office of agency of the Trustee in The Borough of Manhattan, shall be
considered as one such office or agency of the Company for each of the aforesaid
purposes.
So long as the Trustee is the Note registrar, the Trustee agrees to mail, or
cause to be mailed, the notices set forth in Section 8.10(a) and the third
paragraph of Section 8.11. If co-registrars have been appointed in accordance
with this Section, the Trustee shall mail such notices only to the Company and
the holders of Notes it can identify from its records.
Section 5.03. Appointments to Fill Vacancies in Trustee's Office. The Company,
whenever necessary to avoid or fill a vacancy in the office of Trustee, will
appoint, in the manner provided in Section 8.10, a Trustee, so that there shall
at all times be a Trustee hereunder.
Section 5.04. Provisions as to Paying Agent. (a) If the Company shall appoint a
paying agent other than the Trustee, or if the Trustee shall appoint such a
paying agent, the Company will cause such paying agent to execute and deliver to
the Trustee an instrument in which such agent shall agree with the Trustee,
subject to the provisions of this Section 5.04:
(1) that it will hold all sums held by it as such agent for the
payment of the principal of and premium, if any, or interest on the
Notes (whether such sums have been paid to it by the Company or by
any other obligor on the Notes) in trust for the benefit of the
holders of the Notes;
(2) that it will give the Trustee notice of any failure by the
Company (or by any other obligor on the Notes) to make any payment
of the principal of and premium, if any, or interest on the Notes
when the same shall be due and payable; and
(3) that at any time during the continuance of an Event of
Default, upon request of the Trustee, it will forthwith pay to the
Trustee all sums so held in trust.
The Company shall, on or before each due date of the principal of, premium, if
any, or interest on the Notes, deposit with the paying agent a sum (in funds
which are immediately available on the due date for such payment) sufficient to
pay such principal, premium, if any, or interest, and (unless such paying agent
is the Trustee) the Company will promptly notify the Trustee of any failure to
take such action; provided that if such deposit is made on the due date, such
deposit shall be received by the paying agent by 10:00 a.m. New York City time,
on such date.
(b) If the Company shall act as its own paying agent, it will, on or
before each due date of the principal of, premium, if any, or interest on the
Notes, set aside, segregate and hold in trust for the benefit of the holders of
the Notes a sum sufficient to pay such principal, premium, if any, or interest
so becoming due and will promptly notify the Trustee of any failure to take such
action and of any failure by the Company (or any other obligor under the Notes)
to make any payment of the principal of, premium, if any, or interest on the
Notes when the same shall become due and payable.
(c) Anything in this Section 5.04 to the contrary notwithstanding,
the Company may, at any time, for the purpose of obtaining a satisfaction and
discharge of this Indenture, or for any other reason, pay or cause to be paid to
the Trustee all sums held in trust by the Company or any paying agent hereunder
as required by this Section 5.04, such sums to be held by the Trustee upon the
trusts herein contained and upon such payment by the Company or any paying
agent to the Trustee, the Company or such paying agent shall be released from
all further liability with respect to such sums.
(d) Anything in this Section 5.04 to the contrary notwithstanding,
the agreement to hold sums in trust as provided in this Section 5.04 is subject
to Sections 13.03 and 13.04.
The Trustee shall not be responsible for the actions of any other paying agents
(including the Company if acting as its own paying agent) and shall have no
control of any funds held by such other paying agents.
Section 5.05. Existence. Subject to Article 12, the Company will do or cause to
be done all things necessary to preserve and keep in full force and effect its
existence and rights (charter and statutory); provided that the Company shall
not be required to preserve any such right if the Company shall determine that
the preservation thereof is no longer desirable in the conduct of the business
of the Company and that the loss thereof is not disadvantageous in any material
respect to the Noteholders.
Section 5.06. Maintenance of Properties. The Company will cause all properties
used or useful in the conduct of its business or the business of any Significant
Subsidiary to be maintained and kept in good condition, repair and working order
and supplied with all necessary equipment and will cause to be made all
necessary repairs, renewals, replacements, betterments and improvements thereof,
all as in the judgment of the Company may be necessary so that the business
carried on in connection therewith may be properly and advantageously conducted
at all times; provided that nothing in this Section shall prevent the Company
from discontinuing the operation or maintenance of any of such properties if
such discontinuance is, in the judgment of the Company, desirable in the conduct
of its business or the business of any subsidiary and not disadvantageous in any
material respect to the Noteholders.
Section 5.07. Payment of Taxes and Other Claims. The Company will pay or
discharge, or cause to be paid or discharged, before the same may become
delinquent, (i) all taxes, assessments and governmental charges levied or
imposed upon the Company or any Significant Subsidiary or upon the income,
profits or property of the Company or any Significant Subsidiary, (ii) all
claims for labor, materials and supplies which, if unpaid, might by law become a
lien or charge upon the property of the Company or any Significant Subsidiary
and (iii) all stamps and other duties, if any, which may be imposed by the
United States or any political subdivision thereof or therein in connection with
the issuance, transfer, exchange or conversion of any Notes or with respect to
this Indenture; provided that, in the case of clauses (i) and (ii), the Company
shall not be required to pay or discharge or cause to be paid or discharged any
such tax, assessment, charge or claim (A) if the failure to do so will not, in
the aggregate, have a material adverse impact on the Company, or (B) if the
amount, applicability or validity is being contested in good faith by
appropriate proceedings.
Section 5.08. Rule 144A Information Requirement. Within the period prior to the
expiration of the holding period applicable to sales thereof under Rule 144(k)
under the Securities Act (or any successor provision), the Company covenants and
agrees that it shall, during any period in which it is not subject to Section 13
or 15(d) under the Exchange Act, make available to any holder or beneficial
holder of Notes or any Common Stock issued upon conversion thereof which
continue to be Restricted Securities in connection with any sale thereof and any
prospective purchaser of Notes or such Common Stock designated by such holder or
beneficial holder, the information required pursuant to Rule 144A(d)(4) under
the Securities Act upon the request of any such holder or beneficial holder of
the
Notes or such Common Stock and it will take such further action as any such
holder or beneficial holder of such Notes or such Common Stock may reasonably
request, all to the extent required from time to time to enable such holder or
beneficial holder to sell its interest in Notes or Common Stock without
registration under the Securities Act within the limitation of the exemption
provided by Rule 144A, as such Rule may be amended from time to time. Upon the
request of any such holder or any beneficial holder of the Notes or such Common
Stock, the Company will deliver to such holder or beneficial holder a written
statement as to whether it has complied with such requirements.
Section 5.09. Stay, Extension and Usury Laws. The Company covenants (to the
extent that it may lawfully do so) that it shall not at any time insist upon,
plead, or in any manner whatsoever claim or take the benefit or advantage of,
any stay, extension or usury law or other law which would prohibit or forgive
the Company from paying all or any portion of the principal of, premium, if any,
or interest on the Notes as contemplated herein, wherever enacted, now or at any
time hereafter in force, or which may affect the covenants or the performance of
this Indenture and the Company (to the extent it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and covenants that it
will not, by resort to any such law, hinder, delay or impede the execution of
any power herein granted to the Trustee, but will suffer and permit the
execution of every such power as though no such law had been enacted.
Section 5.10. Compliance Certificate. The Company shall deliver to the Trustee,
within one hundred twenty (120) days after the end of each fiscal year of the
Company, a certificate signed by either the principal executive officer,
principal financial officer or principal accounting officer of the Company,
stating whether or not to the best knowledge of the signer thereof the Company
is in default in the performance and observance of any of the terms, provisions
and conditions of this Indenture (without regard to any period of grace or
requirement of notice provided hereunder) and, if the Company shall be in
default, specifying all such defaults and the nature and the status thereof of
which the signer may have knowledge.
The Company will deliver to the Trustee, forthwith upon becoming aware of (i)
any default in the performance or observance of any covenant, agreement or
condition contained in this Indenture, or (ii) any Event of Default, an
Officers' Certificate specifying with particularity such default or Event of
Default and further stating what action the Company has taken, is taking or
proposes to take with respect thereto.
Any notice required to be given under this Section 5.10 or Section 4.05 shall be
delivered to a Responsible Officer of the Trustee at its Corporate Trust Office.
In the event that the payment of the Notes is accelerated because of an Event of
Default, the Company shall promptly provide written notice to the Trustee
specifying the names and addresses of the holders of Senior Indebtedness if the
Trustee (and not the Company) is to provide holders of Senior Indebtedness
notice of such acceleration.
Section 5.11. Liquidated Damages Notice. In the event that the Company is
required to pay Liquidated Damages to holders of Notes pursuant to the
Registration Rights Agreement, the Company will provide written notice ("
Liquidated Damages Notice") to the Trustee of its obligation to pay Liquidated
Damages no later than fifteen days prior to the proposed payment date for the
Liquidated Damages, and the Liquidated Damages Notice shall set forth the amount
of Liquidated Damages to be paid by the Company on such payment date. The
Trustee shall not at any time be under any duty or responsibility to any holder
of Notes to determine the Liquidated Damages, or with respect to the nature,
extent or calculation of the amount of Liquidated Damages when made, or with
respect to the method employed in such calculation of the Liquidated Damages.
ARTICLE 6
Noteholders' Lists and Reports by the Company and the Trustee
Section 6.01. Noteholders' Lists. The Company covenants and agrees that it will
furnish or cause to be furnished to the Trustee, semiannually, not more than
fifteen (15) days after each May 15 and November 15 in each year beginning with
May 15, 2002, and at such other times as the Trustee may request in writing,
within thirty (30) days after receipt by the Company of any such request (or
such lesser time as the Trustee may reasonably request in order to enable it to
timely provide any notice to be provided by it hereunder), a list in such form
as the Trustee may reasonably require of the names and addresses of the holders
of Notes as of a date not more than fifteen (15) days (or such other date as the
Trustee may reasonably request in order to so provide any such notices) prior to
the time such information is furnished, except that no such list need be
furnished by the Company to the Trustee so long as the Trustee is acting as the
sole Note registrar.
Section 6.02. Preservation and Disclosure of Lists. (a) The Trustee shall
preserve, in as current a form as is reasonably practicable, all information as
to the names and addresses of the holders of Notes contained in the most recent
list furnished to it as provided in Section 6.01 or maintained by the Trustee in
its capacity as Note registrar or co-registrar in respect of the Notes, if so
acting. The Trustee may destroy any list furnished to it as provided in Section
6.01 upon receipt of a new list so furnished.
(b) The rights of Noteholders to communicate with other holders of Notes
with respect to their rights under this Indenture or under the Notes, and the
corresponding rights and duties of the Trustee, shall be as provided by the
Trust Indenture Act.
(c) Every Noteholder, by receiving and holding the same, agrees with the
Company and the Trustee that neither the Company nor the Trustee nor any agent
of either of them shall be held accountable by reason of any disclosure of
information as to names and addresses of holders of Notes made pursuant to the
Trust Indenture Act.
Section 6.03. Reports by Trustee. (a) Within sixty (60) days after December 15
of each year commencing with the year 2002, the Trustee shall transmit to
holders of Notes such reports dated as of December 15 of the year in which such
reports are made concerning the Trustee and its actions under this Indenture as
may be required pursuant to the Trust Indenture Act at the times and in the
manner
provided pursuant thereto.
(b) A copy of such report shall, at the time of such transmission to
holders of Notes, be filed by the Trustee with each stock exchange and automated
quotation system upon which the Notes are listed and with the Company. The
Company will promptly notify the Trustee in writing when the Notes are listed on
any stock exchange or automated quotation system or delisted therefrom.
Section 6.04. Reports by Company. The Company shall file with the Trustee (and
the Commission if at any time after the Indenture becomes qualified under the
Trust Indenture Act), and transmit to holders of Notes, such information,
documents and other reports and such summaries thereof, as may be required
pursuant to the Trust Indenture Act at the times and in the manner provided
pursuant to such Act, whether or not the Notes are governed by such Act;
provided that any such information, documents or reports required to be filed
with the Commission pursuant to Section 13 or 15(d) of the Exchange Act shall be
filed with the Trustee within fifteen (15) days after the same is so required to
be filed with the Commission. Delivery of such reports, information and
documents to the Trustee is for informational purposes only and the Trustee's
receipt of such shall not constitute constructive notice of any information
contained therein or determinable from information contained therein, including
the Company's compliance with any of its covenants hereunder (as to which the
Trustee is entitled to rely exclusively on Officers' Certificates).
ARTICLE 7
Remedies of the Trustee and Noteholders on an Event of Default
Section 7.01. Events of Default. In case one or more of the following Events of
Default (whatever the reason for such Event of Default and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body) shall have occurred and be continuing:
(a) default in the payment of any installment of interest upon any of the
Notes as and when the same shall become due and payable, and continuance of such
default for a period of thirty (30) days, whether or not such payment is
permitted under Article 4 hereof; or
(b) default in the payment of the principal of or premium, if any, on any
of the Notes as and when the same shall become due and payable either at
maturity or in connection with any redemption pursuant to Article 3, by
acceleration or otherwise, whether or not such payment is permitted under
Article 4 hereof; or
(c) failure on the part of the Company duly to observe or perform any other
of the covenants or agreements on the part of the Company in the Notes or in
this Indenture (other than a covenant or agreement a default in whose
performance or whose breach is elsewhere in this Section 7.01 specifically dealt
with) continued for a period of sixty (60) days after the date on which written
notice of such failure, requiring the Company to remedy the same, shall have
been
given to the Company by the Trustee, or the Company and a Responsible Officer of
the Trustee by the holders of at least twenty-five percent (25%) in aggregate
principal amount of the Notes at the time outstanding determined in accordance
with Section 9.04; or
(d) the Company shall commence a voluntary case or other proceeding seeking
liquidation, reorganization or other relief with respect to the Company or its
debts under any bankruptcy, insolvency or other similar law now or hereafter in
effect or seeking the appointment of a trustee, receiver, liquidator, custodian
or other similar official of the Company or any substantial part of the property
of the Company, or shall consent to any such relief or to the appointment of or
taking possession by any such official in an involuntary case or other
proceeding commenced against the Company, or shall make a general assignment for
the benefit of creditors, or shall fail generally to pay its debts as they
become due; or
(e) an involuntary case or other proceeding shall be commenced against the
Company seeking liquidation, reorganization or other relief with respect to the
Company or its debts under any bankruptcy, insolvency or other similar law now
or hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of the Company or any
substantial part of the property of the Company, and such involuntary case or
other proceeding shall remain undismissed and unstayed for a period of ninety
(90) consecutive days;
then, and in each and every such case (other than an Event of Default specified
in Section 7.01(d) or 7.01(e)), unless the principal of all of the Notes shall
have already become due and payable, either the Trustee or the holders of not
less than twenty-five percent (25%) in aggregate principal amount of the Notes
then outstanding hereunder determined in accordance with Section 9.04, by notice
in writing to the Company (and to the Trustee if given by Noteholders), may
declare the principal of and premium, if any, on all the Notes and the interest
accrued thereon to be due and payable immediately, and upon any such declaration
the same shall become and shall be immediately due and payable, anything in this
Indenture or in the Notes contained to the contrary notwithstanding. If an Event
of Default specified in Section 7.01(d) or (e) occurs, the principal of all the
Notes and the interest accrued thereon shall be immediately and automatically
due and payable without necessity of further action. This provision, however, is
subject to the conditions that if, at any time after the principal of the Notes
shall have been so declared due and payable, and before any judgment or decree
for the payment of the monies due shall have been obtained or entered as
hereinafter provided, the Company shall pay or shall deposit with the Trustee a
sum sufficient to pay all matured installments of interest upon all Notes and
the principal of and premium, if any, on any and all Notes which shall have
become due otherwise than by acceleration (with interest on overdue installments
of interest (to the extent that payment of such interest is enforceable under
applicable law) and on such principal and premium, if any, at the rate borne by
the Notes, to the date of such payment or deposit) and amounts due to the
Trustee pursuant to Section 8.06, and if any and all defaults under this
Indenture, other than the nonpayment of
principal of and premium, if any, and accrued interest on Notes which shall have
become due by acceleration, shall have been cured or waived pursuant to Section
7.07, then and in every such case the holders of a majority in aggregate
principal amount of the Notes then outstanding, by written notice to the Company
and to the Trustee, may waive all defaults or Events of Default and rescind and
annul such declaration and its consequences; but no such waiver or rescission
and annulment shall extend to or shall affect any subsequent default or Event of
Default, or shall impair any right consequent thereon. The Company shall notify
in writing a Responsible Officer of the Trustee, promptly upon becoming aware
thereof, of any Event of Default.
In case the Trustee shall have proceeded to enforce any right under this
Indenture and such proceedings shall have been discontinued or abandoned because
of such waiver or rescission and annulment or for any other reason or shall have
been determined adversely to the Trustee, then and in every such case the
Company, the holders of Notes, and the Trustee shall be restored respectively to
their several positions and rights hereunder, and all rights, remedies and
powers of the Company, the holders of Notes, and the Trustee shall continue as
though no such proceeding had been taken.
Section 7.02. Payments of Notes on Default; Suit Therefor. The Company covenants
that (a) in case default shall be made in the payment of any installment of
interest upon any of the Notes as and when the same shall become due and
payable, and such default shall have continued for a period of thirty (30) days,
or (b) in case default shall be made in the payment of the principal of or
premium, if any, on any of the Notes as and when the same shall have become due
and payable, whether at maturity of the Notes or in connection with any
redemption, by or under this Indenture declaration or otherwise, then, upon
demand of the Trustee, the Company will pay to the Trustee, for the benefit of
the holders of the Notes, the whole amount that then shall have become due and
payable on all such Notes for principal and premium, if any, or interest, as the
case may be, with interest upon the overdue principal and premium, if any, and
(to the extent that payment of such interest is enforceable under applicable
law) upon the overdue installments of interest at the rate borne by the Notes,
and, in addition thereto, such further amount as shall be sufficient to cover
the costs and expenses of collection, including reasonable compensation to the
Trustee, its agents, attorneys and counsel, and all other amounts due the
Trustee under Section 8.06. Until such demand by the Trustee, the Company may
pay the principal of and premium, if any, and interest on the Notes to the
registered holders, whether or not the Notes are overdue.
In case the Company shall fail forthwith to pay such amounts upon such demand,
the Trustee, in its own name and as trustee of an express trust, shall be
entitled and empowered to institute any actions or proceedings at law or in
equity for the collection of the sums so due and unpaid, and may prosecute any
such action or proceeding to judgment or final decree, and may enforce any such
judgment or final decree against the Company or any other obligor on the Notes
and collect in the manner provided by law out of the property of the Company or
any other obligor on the Notes wherever situated the monies adjudged or decreed
to be payable.
In case there shall be pending proceedings for the bankruptcy or for the
reorganization of the Company or any other obligor on the Notes under Title 11
of the United States Code, or any other applicable law, or in case a receiver,
assignee or trustee in bankruptcy or reorganization, liquidator, sequestrator or
similar official shall have been appointed for or taken possession of the
Company or such other obligor, the property of the Company or such other
obligor, or in the case of any other judicial proceedings relative to the
Company or such other obligor upon the Notes, or to the creditors or property of
the Company or such other obligor, the Trustee, irrespective of whether the
principal of the Notes shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Trustee shall have made
any demand pursuant to the provisions of this Section 7.02, shall be entitled
and empowered, by intervention in such proceedings or otherwise, to file and
prove a claim or claims for the whole amount of principal, premium, if any, and
interest owing and unpaid in respect of the Notes, and, in case of any judicial
proceedings, to file such proofs of claim and other papers or documents as may
be necessary or advisable in order to have the claims of the Trustee and of the
Noteholders allowed in such judicial proceedings relative to the Company or any
other obligor on the Notes, its or their creditors, or its or their property,
and to collect and receive any monies or other property payable or deliverable
on any such claims, and to distribute the same after the deduction of any
amounts due the Trustee under Section 8.06, and any receiver, assignee or
trustee in bankruptcy or reorganization, liquidator, custodian or similar
official is hereby authorized by each of the Noteholders to make such payments
to the Trustee, and, in the event that the Trustee shall consent to the making
of such payments directly to the Noteholders, to pay to the Trustee any amount
due it for reasonable compensation, expenses, advances and disbursements,
including counsel fees and expenses incurred by it up to the date of such
distribution. To the extent that such payment of reasonable compensation,
expenses, advances and disbursements out of the estate in any such proceedings
shall be denied for any reason, payment of the same shall be secured by a lien
on, and shall be paid out of, any and all distributions, dividends, monies,
securities and other property which the holders of the Notes may be entitled to
receive in such proceedings, whether in liquidation or under any plan of
reorganization or arrangement or otherwise.
All rights of action and of asserting claims under this Indenture, or under any
of the Notes, may be enforced by the Trustee without the possession of any of
the Notes, or the production thereof at any trial or other proceeding relative
thereto, and any such suit or proceeding instituted by the Trustee shall be
brought in its own name as trustee of an express trust, and any recovery of
judgment shall, after provision for the payment of the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, be
for the ratable benefit of the holders of the Notes.
In any proceedings brought by the Trustee (and in any proceedings involving the
interpretation of any provision of this Indenture to which the Trustee shall be
a party) the Trustee shall be held to represent all the holders of the Notes,
and it shall not be necessary to make any holders of the Notes parties to any
such proceedings.
Section 7.03. Application of Monies Collected by Trustee. Any monies collected
by the Trustee pursuant to this Article 7 shall be applied in the order
following, at the date or dates fixed by the Trustee for the distribution of
such monies, upon presentation of the several Notes, and stamping thereon the
payment, if only partially paid, and upon surrender thereof, if fully paid:
FIRST: To the payment of all amounts due the Trustee under Section
8.06;
SECOND: Subject to the provisions of Article 4, in case the principal
of the outstanding Notes shall not have become due and be unpaid, to the
payment of interest on the Notes in default in the order of the maturity of
the installments of such interest, with interest (to the extent that such
interest has been collected by the Trustee and to the extent that such
interest is enforceable under applicable law) upon the overdue installments
of interest at the rate borne by the Notes, such payments to be made
ratably to the Persons entitled thereto;
THIRD: Subject to the provisions of Article 4, in case the principal
of the outstanding Notes shall have become due, by declaration or
otherwise, and be unpaid to the payment of the whole amount then owing and
unpaid upon the Notes for principal and premium, if any, and interest, with
interest on the overdue principal and premium, if any, and (to the extent
that such interest has been collected by the Trustee and to the extent that
such interest is enforceable under applicable law) upon overdue
installments of interest at the rate borne by the Notes, and in case such
monies shall be insufficient to pay in full the whole amounts so due and
unpaid upon the Notes, then to the payment of such principal and premium,
if any, and interest without preference or priority of principal and
premium, if any, over interest, or of interest over principal and premium,
if any, or of any installment of interest over any other installment of
interest, or of any Note over any other Note, ratably to the aggregate of
such principal and premium, if any, and accrued and unpaid interest; and
FOURTH: Subject to the provisions of Article 4, to the payment of the
remainder, if any, to the Company or any other Person lawfully entitled
thereto.
Section 7.04. Proceedings by Noteholder. No holder of any Note shall have any
right by virtue of or by reference to any provision of this Indenture to
institute any suit, action or proceeding in equity or at law upon or under or
with respect to this Indenture, or for the appointment of a receiver, trustee,
liquidator, custodian or other similar official, or for any other remedy
hereunder, unless such holder previously shall have given to the Trustee written
notice of an Event of Default and of the continuance thereof, as hereinbefore
provided, and unless also the holders of not less than twenty-five percent (25%)
in aggregate principal amount of the Notes then outstanding shall have made
written request upon the Trustee to institute such action, suit or proceeding in
its own name as Trustee hereunder and shall have offered to the Trustee such
reasonable indemnity as it may require against the costs, expenses and
liabilities to be incurred therein or thereby, and the Trustee for sixty (60)
days after its receipt of such notice, request and offer of
indemnity, shall have neglected or refused to institute any such action, suit or
proceeding and no direction inconsistent with such written request shall have
been given to the Trustee pursuant to Section 7.07; it being understood and
intended, and being expressly covenanted by the taker and holder of every Note
with every other taker and holder and the Trustee, that no one or more holders
of Notes shall have any right in any manner whatever by virtue of or by
reference to any provision of this Indenture to affect, disturb or prejudice the
rights of any other holder of Notes, or to obtain or seek to obtain priority
over or preference to any other such holder, or to enforce any right under this
Indenture, except in the manner herein provided and for the equal, ratable and
common benefit of all holders of Notes (except as otherwise provided herein).
For the protection and enforcement of this Section 7.04, each and every
Noteholder and the Trustee shall be entitled to such relief as can be given
either at law or in equity.
Notwithstanding any other provision of this Indenture and any provision of any
Note, the right of any holder of any Note to receive payment of the principal of
and premium, if any (including the redemption price upon redemption pursuant to
Article 7), and accrued interest on such Note, on or after the respective due
dates expressed in such Note or in the event of redemption, or to institute suit
for the enforcement of any such payment on or after such respective dates
against the Company shall not be impaired or affected without the consent of
such holder.
Anything in this Indenture or the Notes to the contrary notwithstanding, the
holder of any Note, without the consent of either the Trustee or the holder of
any other Note, in its own behalf and for its own benefit, may enforce, and may
institute and maintain any proceeding suitable to enforce, its rights of
conversion as provided herein.
Section 7.05. Proceedings by Trustee. In case of an Event of Default, the
Trustee may, in its discretion, proceed to protect and enforce the rights vested
in it by this Indenture by such appropriate judicial proceedings as are
necessary to protect and enforce any of such rights, either by suit in equity or
by action at law or by proceeding in bankruptcy or otherwise, whether for the
specific enforcement of any covenant or agreement contained in this Indenture or
in aid of the exercise of any power granted in this Indenture, or to enforce any
other legal or equitable right vested in the Trustee by this Indenture or by
law.
Section 7.06. Remedies Cumulative and Continuing. Except as provided in Section
2.06, all powers and remedies given by this Article 7 to the Trustee or to the
Noteholders shall, to the extent permitted by law, be deemed cumulative and not
exclusive of any thereof or of any other powers and remedies available to the
Trustee or the holders of the Notes, by judicial proceedings or otherwise, to
enforce the performance or observance of the covenants and agreements contained
in this Indenture, and no delay or omission of the Trustee or of any holder of
any of the Notes to exercise any right or power accruing upon any default or
Event of Default occurring and continuing as aforesaid shall impair any such
right or power, or shall be construed to be a waiver of any such default or any
acquiescence therein, and, subject to the provisions of Section 7.04, every
power and remedy given by this Article 7 or by law to the Trustee or to the
Noteholders may be exercised from time to time, and as often as shall be deemed
expedient, by the Trustee or by the Noteholders.
Section 7.07. Direction of Proceedings and Waiver of Defaults by Majority of
Noteholders. The holders of a majority in aggregate principal amount of the
Notes at the time outstanding determined in accordance with Section 9.04 shall
have the right to direct the time, method and place of conducting any proceeding
for any remedy available to the Trustee or exercising any trust or power
conferred on the Trustee; provided that (a) such direction shall not be in
conflict with any rule of law or with this Indenture, (b) the Trustee may take
any other action which is not inconsistent with such direction and (c) the
Trustee may decline to take any action that would benefit some Noteholder to the
detriment of other Noteholders. The holders of a majority in aggregate principal
amount of the Notes at the time outstanding determined in accordance with
Section 9.04 may, on behalf of the holders of all of the Notes, waive any past
default or Event of Default hereunder and its consequences except (i) a default
in the payment of interest or premium, if any, on, or the principal of, the
Notes, (ii) a failure by the Company to convert any Notes into Common Stock,
(iii) a default in the payment of redemption price pursuant to Article 3 or (iv)
a default in respect of a covenant or provisions hereof which under Article 11
cannot be modified or amended without the consent of the holders of each or all
Notes then outstanding or affected thereby. Upon any such waiver, the Company,
the Trustee and the holders of the Notes shall be restored to their former
positions and rights hereunder; but no such waiver shall extend to any
subsequent or other default or Event of Default or impair any right consequent
thereon. Whenever any default or Event of Default hereunder shall have been
waived as permitted by this Section 7.07, said default or Event of Default shall
for all purposes of the Notes and this Indenture be deemed to have been cured
and to be not continuing; but no such waiver shall extend to any subsequent or
other default or Event of Default or impair any right consequent thereon.
Section 7.08. Notice of Defaults. The Trustee shall, within ninety (90) days
after a Responsible Officer of the Trustee has knowledge of the occurrence of a
default, mail to all Noteholders, as the names and addresses of such holders
appear upon the Note register, notice of all defaults known to a Responsible
Officer, unless such defaults shall have been cured or waived before the giving
of such notice; provided that except in the case of default in the payment of
the principal of, or premium, if any, or interest on any of the Notes, the
Trustee shall be protected in withholding such notice if and so long as a trust
committee of directors and/or Responsible Officers of the Trustee in good faith
determines that the withholding of such notice is in the interests of the
Noteholders.
Section 7.09. Undertaking to Pay Costs. All parties to this Indenture agree, and
each holder of any Note by his acceptance thereof shall be deemed to have
agreed, that any court may, in its discretion, require, in any suit for the
enforcement of any right or remedy under this Indenture, or in any suit against
the Trustee for any action taken or omitted by it as Trustee, the filing by any
party litigant in such suit of an undertaking to pay the costs of such suit and
that such court may in its discretion assess reasonable costs, including
reasonable attorneys' fees and expenses, against any party litigant in such
suit, having due regard to the merits and good faith of the claims or defenses
made by such party litigant; provided that the provisions of this Section 7.09
(to the extent permitted by law)
shall not apply to any suit instituted by the Trustee, to any suit instituted by
any Noteholder, or group of Noteholders, holding in the aggregate more than ten
percent in principal amount of the Notes at the time outstanding determined in
accordance with Section 9.04, or to any suit instituted by any Noteholder for
the enforcement of the payment of the principal of or premium, if any, or
interest on any Note on or after the due date expressed in such Note or to any
suit for the enforcement of the right to convert any Note in accordance with the
provisions of Article 15.
ARTICLE 8
The Trustee
Section 8.01. Duties and Responsibilities of Trustee. The Trustee, prior to the
occurrence of an Event of Default and after the curing of all Events of Default
which may have occurred, undertakes to perform such duties and only such duties
as are specifically set forth in this Indenture. In case an Event of Default has
occurred (which has not been cured or waived), the Trustee shall exercise such
of the rights and powers vested in it by this Indenture, and use the same degree
of care and skill in their exercise, as a prudent person would exercise or use
under the circumstances in the conduct of his own affairs.
No provision of this Indenture shall be construed to relieve the Trustee from
liability for its own negligent action, its own negligent failure to act or its
own willful misconduct, except that:
(a) prior to the occurrence of an Event of Default and after the curing
or waiving of all Events of Default which may have occurred:
(i) the duties and obligations of the Trustee shall be determined
solely by the express provisions of this Indenture and the Trust Indenture
Act, and the Trustee shall not be liable except for the performance of such
duties and obligations as are specifically set forth in this Indenture and
no implied covenants or obligations shall be read into this Indenture and
the Trust Indenture Act against the Trustee; and
(ii) in the absence of bad faith and willful misconduct on the part of
the Trustee, the Trustee may conclusively rely as to the truth of the
statements and the correctness of the opinions expressed therein, upon any
certificates or opinions furnished to the Trustee and conforming to the
requirements of this Indenture; but, in the case of any such certificates
or opinions which by any provisions hereof are specifically required to be
furnished to the Trustee, the Trustee shall be under a duty to examine the
same to determine whether or not they conform to the requirements of this
Indenture;
(b) the Trustee shall not be liable for any error of judgment made in good
faith by a Responsible Officer or Officers of the Trustee, unless the Trustee
was negligent in ascertaining the pertinent facts;
(c) the Trustee shall not be liable with respect to any action taken or
omitted to be taken by it in good faith in accordance with the written direction
of
the holders of not less than a majority in principal amount of the Notes at the
time outstanding determined as provided in Section 9.04 relating to the time,
method and place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred upon the Trustee, under this
Indenture;
(d) whether or not therein provided, every provision of this Indenture
relating to the conduct or affecting the liability of, or affording protection
to, the Trustee shall be subject to the provisions of this Section;
(e) the Trustee shall not be liable in respect of any payment (as to the
correctness of amount, entitlement to receive or any other matters relating to
payment) or notice effected by the Company or any paying agent or any records
maintained by any co-registrar with respect to the Notes;
(f) if any party fails to deliver a notice relating to an event the fact of
which, pursuant to this Indenture, requires notice to be sent to the Trustee,
the Trustee may conclusively rely on its failure to receive such notice as
reason to act as if no such event occurred; and
(g) the Trustee shall not be deemed to have knowledge of any Event of
Default hereunder unless it shall have been notified in writing of such Event of
Default by the Company or the holders of at least 10% in aggregate principal
amount of the Notes.
None of the provisions contained in this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur personal financial liability in
the performance of any of its duties or in the exercise of any of its rights or
powers, if there is reasonable ground for believing that the repayment of such
funds or adequate indemnity against such risk or liability is not reasonably
assured to it.
Section 8.02. Reliance on Documents, Opinions, Etc. Except as otherwise provided
in Section 8.01:
(a) the Trustee may conclusively rely and shall be protected in acting upon
any resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, order, bond, debenture, note, coupon or other paper or
document (whether in its original or facsimile form) believed by it in good
faith to be genuine and to have been signed or presented by the proper party or
parties;
(b) any request, direction, order or demand of the Company mentioned
herein shall be sufficiently evidenced by an Officers' Certificate (unless
other evidence in respect thereof be herein specifically prescribed); and any
resolution of the Board of Directors may be evidenced to the Trustee by a copy
thereof certified by the Secretary or an Assistant Secretary of the Company;
(c) the Trustee may consult with counsel of its own selection and any
advice or Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken or omitted by it hereunder in good
faith and in accordance with such advice or Opinion of Counsel;
(d) the Trustee shall be under no obligation to exercise any of the rights
or powers vested in it by this Indenture at the request, order or direction of
any of the Noteholders pursuant to the provisions of this Indenture, unless such
Noteholders shall have offered to the Trustee security or indemnity satisfactory
to it against the costs, expenses and liabilities which may be incurred therein
or thereby;
(e) the Trustee shall not be bound to make any investigation into the facts
or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture or
other paper or document, but the Trustee, in its discretion, may make such
further inquiry or investigation into such facts or matters as it may see fit,
and, if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and premises
of the Company, personally or by agent or attorney;
(f) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed by it with due care
hereunder;
(g) the 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;
and
(h) the Trustee may request that the Company deliver an Officers'
Certificate setting forth the names of individuals and/or titles of officers
authorized at such time to take specified actions pursuant to this indenture,
which Officers' Certificate may be signed by any person authorized to sign an
Officers' Certificate, including any person specified as so authorized in any
such certificate previously delivered and not superseded.
Section 8.03. No Responsibility for Recitals, Etc. The recitals contained herein
and in the Notes (except in the Trustee's certificate of authentication) shall
be taken as the statements of the Company, and the Trustee assumes no
responsibility for the correctness of the same. The Trustee makes no
representations as to the validity or sufficiency of this Indenture or of the
Notes. The Trustee shall not be accountable for the use or application by the
Company of any Notes or the proceeds of any Notes authenticated and delivered by
the Trustee in conformity with the provisions of this Indenture.
Section 8.04. Trustee, Paying Agents, Conversion Agents or Registrar May Own
Notes. The Trustee, any paying agent, any conversion agent or Note registrar, in
its individual or any other capacity, may become the owner or pledgee of Notes
with the same rights it would have if it were not Trustee, paying agent,
conversion agent or Note registrar.
Section 8.05. Monies to Be Held in Trust. Subject to the provisions of Section
13.04 and Section 4.02, all monies received by the Trustee shall, until used or
applied as herein provided, be held in trust for the purposes for which they
were
received. Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall be
under no liability for interest on any money received by it hereunder except as
may be agreed in writing from time to time by the Company and the Trustee.
Section 8.06. Compensation and Expenses of Trustee. The Company covenants and
agrees to pay to the Trustee from time to time, and the Trustee shall be
entitled to, such compensation as shall be agreed to in writing between the
Company and the Trustee for all services rendered by it hereunder in any
capacity (which shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust) as mutually agreed to from time
to time in writing between the Company and the Trustee, and the Company will pay
or reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances reasonably incurred or made by the Trustee in
accordance with any of the provisions of this Indenture (including the
reasonable compensation and the expenses and disbursements of its counsel and of
all Persons not regularly in its employ) except any such expense, disbursement
or advance as may arise from its negligence, willful misconduct, recklessness or
bad faith. The Company also covenants to indemnify the Trustee (or any officer,
director or employee of the Trustee), in any capacity under this Indenture and
its agents and any authenticating agent for, and to hold them harmless against,
any and all loss, liability, damage, claim or expense, including taxes (other
than taxes based on the income of the Trustee) incurred without negligence,
willful misconduct, recklessness or bad faith on the part of the Trustee or such
officers, directors, employees and agent or authenticating agent, as the case
may be, and arising out of or in connection with the acceptance or
administration of this trust or in any other capacity hereunder, including the
costs and expenses of defending themselves against any claim (whether asserted
by the Company, the Noteholders or any other Person) of liability in the
premises. The obligations of the Company under this Section 8.06 to compensate
or indemnify the Trustee and to pay or reimburse the Trustee for expenses,
disbursements and advances shall be secured by a lien prior to that of the Notes
upon all property and funds held or collected by the Trustee as such, except
funds held in trust for the benefit of the holders of particular Notes. The
obligation of the Company under this Section shall survive the satisfaction and
discharge of this Indenture.
When the Trustee and its agents and any authenticating agent incur expenses or
render services after an Event of Default specified in Section 7.01(d) or (e)
with respect to the Company occurs, the expenses and the compensation for the
services are intended to constitute expenses of administration under any
bankruptcy, insolvency or similar laws.
Section 8.07. Officers' Certificate as Evidence. Except as otherwise provided in
Section 8.01, whenever in the administration of the provisions of this Indenture
the Trustee shall deem it necessary or desirable that a matter be proved or
established prior to taking or omitting any action hereunder, such matter
(unless other evidence in respect thereof be herein specifically prescribed)
may, in the absence of bad faith or willful misconduct on the part of the
Trustee, be deemed to be conclusively proved and established by an Officers'
Certificate delivered to the Trustee.
Section 8.08. Conflicting Interests of Trustee. If the Trustee has or shall
acquire a conflicting interest within the meaning of the Trust Indenture Act,
the Trustee shall either eliminate such interest or resign, to the extent and in
the manner provided by, and subject to the provisions of, the Trust Indenture
Act and this Indenture.
Section 8.09. Eligibility of Trustee. There shall at all times be a Trustee
hereunder which shall be a Person that is eligible pursuant to the Trust
Indenture Act to act as such and has a combined capital and surplus of at least
$50,000,000 (or if such Person is a member of a bank holding company system, its
bank holding company shall have a combined capital and surplus of at least
$50,000,000). If such Person publishes reports of condition at least annually,
pursuant to law or to the requirements of any supervising or examining
authority, then for the purposes of this Section the combined capital and
surplus of such Person shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time
the Trustee shall cease to be eligible in accordance with the provisions of this
Section 8.09, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article.
Section 8.10. Resignation or Removal of Trustee.
(a) The Trustee may at any time resign by giving written notice of
such resignation to the Company and to the holders of Notes. Upon receiving such
notice of resignation, the Company shall promptly appoint a successor trustee by
written instrument, in duplicate, executed by order of the Board of Directors,
one copy of which instrument shall be delivered to the resigning Trustee and one
copy to the successor trustee. If no successor trustee shall have been so
appointed and have accepted appointment sixty (60) days after the mailing of
such notice of resignation to the Noteholders, the resigning Trustee may, upon
ten (10) Business Days' notice to the Company and the Noteholders, appoint a
successor identified in such notice or may petition, at the expense of the
Company, any court of competent jurisdiction for the appointment of a successor
trustee, or, if any Noteholder who has been a bona fide holder of a Note or
Notes for at least six (6) months may, subject to the provisions of Section
7.09, on behalf of himself and all others similarly situated, petition any such
court for the appointment of a successor trustee. Such court may thereupon,
after such notice, if any, as it may deem proper and prescribe, appoint a
successor trustee.
(b) In case at any time any of the following shall occur:
(i) the Trustee shall fail to comply with Section 8.08 after
written request therefor by the Company or by any Noteholder who has
been a bona fide holder of a Note or Notes for at least six (6)
months; or
(ii) the Trustee shall cease to be eligible in accordance
with the provisions of Section 8.09 and shall fail to resign after
written request therefor by the Company or by any such Noteholder; or
(iii) the Trustee shall become incapable of acting, or shall
be adjudged a bankrupt or insolvent, or a receiver of the Trustee or
of its
property shall be appointed, or any public officer shall take charge
or control of the Trustee or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation;
then, in any such case, the Company may remove the Trustee and appoint a
successor trustee by written instrument, in duplicate, executed by order of the
Board of Directors, one copy of which instrument shall be delivered to the
Trustee so removed and one copy to the successor trustee, or, subject to the
provisions of Section 7.09, any Noteholder who has been a bona fide holder of a
Note or Notes for at least six (6) months may, on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor trustee; provided that
if no successor Trustee shall have been appointed and have accepted appointment
sixty (60) days after either the Company or the Noteholders has removed the
Trustee, the Trustee so removed may petition, at the expense of the Company, any
court of competent jurisdiction for an appointment of a successor trustee. Such
court may thereupon, after such notice, if any, as it may deem proper and
prescribe, remove the Trustee and appoint a successor trustee.
(c) The holders of a majority in aggregate principal amount of the
Notes at the time outstanding may at any time remove the Trustee and nominate a
successor trustee which shall be deemed appointed as successor trustee unless,
within ten (10) days after notice to the Company of such nomination, the Company
objects thereto, in which case the Trustee so removed or any Noteholder, or if
such Trustee so removed or any Noteholder fails to act, the Company, upon the
terms and conditions and otherwise as in Section 8.10(a) provided, may petition
any court of competent jurisdiction for an appointment of a successor trustee.
(d) Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section 8.10 shall
become effective upon acceptance of appointment by the successor trustee as
provided in Section 8.11.
Section 8.11. Acceptance by Successor Trustee. Any successor trustee appointed
as provided in Section 8.10 shall execute, acknowledge and deliver to the
Company and to its predecessor trustee an instrument accepting such appointment
hereunder, and thereupon the resignation or removal of the predecessor trustee
shall become effective and such successor trustee, without any further act, deed
or conveyance, shall become vested with all the rights, powers, duties and
obligations of its predecessor hereunder, with like effect as if originally
named as trustee herein; but, nevertheless, on the written request of the
Company or of the successor trustee, the trustee ceasing to act shall, upon
payment of any amount then due it pursuant to the provisions of Section 8.06,
execute and deliver an instrument transferring to such successor trustee all the
rights and powers of the trustee so ceasing to act. Upon request of any such
successor trustee, the Company shall execute any and all instruments in writing
for more fully and certainly vesting in and confirming to such successor trustee
all such rights and
powers. Any trustee ceasing to act shall, nevertheless, retain a lien upon all
property and funds held or collected by such trustee as such, except for funds
held in trust for the benefit of holders of particular Notes, to secure any
amounts then due it pursuant to the provisions of Section 8.06. No successor
trustee shall accept appointment as provided in this Section 8.11 unless, at the
time of such acceptance, such successor trustee shall be qualified under the
provisions of Section 8.08 and be eligible under the provisions of Section 8.09.
Upon acceptance of appointment by a successor trustee as provided in this
Section 8.11, the Company (or the former trustee, at the written direction of
the Company) shall mail or cause to be mailed notice of the succession of such
trustee hereunder to the holders of Notes at their addresses as they shall
appear on the Note register. If the Company fails to mail such notice within ten
(10) days after acceptance of appointment by the successor trustee, the
successor trustee shall cause such notice to be mailed at the expense of the
Company.
Section 8.12. Succession by Merger, Etc. Any corporation into which the Trustee
may be merged or converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or consolidation to which the
Trustee shall be a party, or any corporation succeeding to all or substantially
all of the corporate trust business of the Trustee (including any trust created
by this Indenture), shall be the successor to the Trustee hereunder without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, provided that in the case of any corporation succeeding to all
or substantially all of the corporate trust business of the Trustee, such
corporation shall be qualified under the provisions of Section 8.08 and eligible
under the provisions of Section 8.09.
In case at the time such successor to the Trustee shall succeed to the trusts
created by this Indenture, any of the Notes shall have been authenticated but
not delivered, any such successor to the Trustee may adopt the certificate of
authentication of any predecessor trustee or authenticating agent appointed by
such predecessor trustee, and deliver such Notes so authenticated; and in case
at that time any of the Notes shall not have been authenticated, any successor
to the Trustee or any authenticating agent appointed by such successor trustee
may authenticate such Notes in the name of the successor trustee; and in all
such cases such certificates shall have the full force that is provided in the
Notes or in this Indenture; provided that the right to adopt the certificate of
authentication of any predecessor Trustee or authenticate Notes in the name of
any predecessor Trustee shall apply only to its successor or successors by
merger, conversion or consolidation.
Section 8.13. Preferential Collection of Claims. If and when the Trustee shall
be or become a creditor of the Company (or any other obligor upon the Notes),
the Trustee shall be subject to the provisions of the Trust Indenture Act
regarding the collection of the claims against the Company (or any such other
obligor).
Section 8.14. Trustee's Application for Instructions from the Company. Any
application by the Trustee for written instructions from the Company (other than
with regard to any action proposed to be taken or omitted to be taken by the
Trustee that affects the rights of the holders of the Notes or holders of Senior
Indebtedness under this Indenture, including, without limitation, under Article
4 hereof) may, at the option of the Trustee, set forth in writing any action
proposed to be taken or omitted by the Trustee under this Indenture and the date
on and/or after which such action shall be taken or such omission shall be
effective. The Trustee shall not be liable for any action taken by, or omission
of, the Trustee in accordance with a proposal included in such application on or
after the date specified in such application (which date shall not be less than
three (3) Business Days after the date any officer of the Company actually
receives such application, unless any such officer shall have consented in
writing to any earlier date) unless prior to taking any such action (or the
effective date in the case of an omission), the Trustee shall have received
written instructions in response to such application specifying the action to be
taken or omitted.
ARTICLE 9
The Noteholders
Section 9.01. Action by Noteholders. Whenever in this Indenture it is provided
that the holders of a specified percentage in aggregate principal amount of the
Notes may take any action (including the making of any demand or request, the
giving of any notice, consent or waiver or the taking of any other action), the
fact that at the time of taking any such action, the holders of such specified
percentage have joined therein may be evidenced (a) by any instrument or any
number of instruments of similar tenor executed by Noteholders in person or by
agent or proxy appointed in writing, or (b) by the record of the holders of
Notes voting in favor thereof at any meeting of Noteholders duly called and held
in accordance with the provisions of Article 10, or (c) by a combination of such
instrument or instruments and any such record of such a meeting of Noteholders.
Whenever the Company or the Trustee solicits the taking of any action by the
holders of the Notes, the Company or the Trustee may fix in advance of such
solicitation, a date as the record date for determining holders entitled to take
such action. The record date shall be not more than fifteen (15) days prior to
the date of commencement of solicitation of such action.
Section 9.02. Proof of Execution by Noteholders. Subject to the provisions of
Sections 8.01, 8.02 and 10.05, proof of the execution of any instrument by a
Noteholder or its agent or proxy shall be sufficient if made in accordance with
such reasonable rules and regulations as may be prescribed by the Trustee or in
such manner as shall be satisfactory to the Trustee. The holding of Notes shall
be proved by the registry of such Notes or by a certificate of the Note
registrar.
The record of any Noteholders' meeting shall be proved in the manner provided in
Section 10.06.
Section 9.03. Who Are Deemed Absolute Owners. The Company, the Trustee, any
paying agent, any conversion agent and any Note registrar may deem the Person in
whose name such Note shall be registered upon the Note register to be, and may
treat it as, the absolute owner of such Note (whether or not such Note shall be
overdue and notwithstanding any notation of ownership or other writing thereon
made by any Person other than the Company or any Note registrar) for the purpose
of receiving payment of or on account of the principal of, premium, if any, and
interest on such Note, for conversion of such Note and for all other
purposes; and neither the Company nor the Trustee nor any paying agent nor any
conversion agent nor any Note registrar shall be affected by any notice to the
contrary. All such payments so made to any holder for the time being, or upon
his order, shall be valid, and, to the extent of the sum or sums so paid,
effectual to satisfy and discharge the liability for monies payable upon any
such Note.
Section 9.04. Company-owned Notes Disregarded. In determining whether the
holders of the requisite aggregate principal amount of Notes have concurred in
any direction, consent, waiver or other action under this Indenture, Notes which
are owned by the Company or any other obligor on the Notes or any Affiliate of
the Company or any other obligor on the Notes shall be disregarded and deemed
not to be outstanding for the purpose of any such determination; provided that,
for the purposes of determining whether the Trustee shall be protected in
relying on any such direction, consent, waiver or other action, only Notes which
a Responsible Officer actually knows are so owned shall be so disregarded. Notes
so owned which have been pledged in good faith may be regarded as outstanding
for the purposes of this Section 9.04 if the pledgee shall establish to the
satisfaction of the Trustee the pledgee's right to vote such Notes and that the
pledgee is not the Company, any other obligor on the Notes or any Affiliate of
the Company or any such other obligor. In the case of a dispute as to such
right, any decision by the Trustee taken upon the advice of counsel shall be
full protection to the Trustee. Upon request of the Trustee, the Company shall
furnish to the Trustee promptly an Officers' Certificate listing and identifying
all Notes, if any, known by the Company to be owned or held by or for the
account of any of the above described Persons, and, subject to Section 8.01, the
Trustee shall be entitled to accept such Officers' Certificate as conclusive
evidence of the facts therein set forth and of the fact that all Notes not
listed therein are outstanding for the purpose of any such determination.
Section 9.05. Revocation of Consents, Future Holders Bound. At any time prior to
(but not after) the evidencing to the Trustee, as provided in Section 9.01, of
the taking of any action by the holders of the percentage in aggregate principal
amount of the Notes specified in this Indenture in connection with such action,
any holder of a Note which is shown by the evidence to be included in the Notes
the holders of which have consented to such action may, by filing written notice
with the Trustee at its Corporate Trust Office and upon proof of holding as
provided in Section 9.02, revoke such action so far as concerns such Note.
Except as aforesaid, any such action taken by the holder of any Note shall be
conclusive and binding upon such holder and upon all future holders and owners
of such Note and of any Notes issued in exchange or substitution therefor,
irrespective of whether any notation in regard thereto is made upon such Note or
any Note issued in exchange or substitution therefor.
ARTICLE 10
Meetings of Noteholders
Section 10.01. Purpose of Meetings. A meeting of Noteholders may be called at
any time and from time to time pursuant to the provisions of this Article 10 for
any of the following purposes:
(1) to give any notice to the Company or to the Trustee or to
give
any directions to the Trustee permitted under this Indenture, or to
consent to the waiving of any default or Event of Default hereunder
and its consequences, or to take any other action authorized to be
taken by Noteholders pursuant to any of the provisions of Article 7;
(2) to remove the Trustee and nominate a successor trustee
pursuant to the provisions of Article 8;
(3) to consent to the execution of an indenture or indentures
supplemental hereto pursuant to the provisions of Section 11.02; or
(4) to take any other action authorized to be taken by or on
behalf of the holders of any specified aggregate principal amount of
the Notes under any other provision of this Indenture or under
applicable law.
Section 10.02. Call of Meetings by Trustee. The Trustee may at any time call a
meeting of Noteholders to take any action specified in Section 10.01, to be held
at such time and at such place as the Trustee shall determine. Notice of every
meeting of the Noteholders, setting forth the time and the place of such meeting
and in general terms the action proposed to be taken at such meeting and the
establishment of any record date pursuant to Section 9.01, shall be mailed to
holders of Notes at their addresses as they shall appear on the Note register.
Such notice shall also be mailed to the Company. Such notices shall be mailed
not less than twenty (20) nor more than ninety (90) days prior to the date fixed
for the meeting.
Any meeting of Noteholders shall be valid without notice if the holders of all
Notes then outstanding are present in person or by proxy or if notice is waived
before or after the meeting by the holders of all Notes outstanding, and if the
Company and the Trustee are either present by duly authorized representatives or
have, before or after the meeting, waived notice.
Section 10.03. Call of Meetings by Company or Noteholders. In case at any time
the Company, pursuant to a resolution of its Board of Directors, or the holders
of at least ten percent (10%) in aggregate principal amount of the Notes then
outstanding, shall have requested the Trustee to call a meeting of Noteholders,
by written request setting forth in reasonable detail the action proposed to be
taken at the meeting, and the Trustee shall not have mailed the notice of such
meeting within twenty (20) days after receipt of such request, then the Company
or such Noteholders may determine the time and the place for such meeting and
may call such meeting to take any action authorized in Section 10.01, by mailing
notice thereof as provided in Section 10.02.
Section 10.04. Qualifications for Voting. To be entitled to vote at any meeting
of Noteholders a person shall (a) be a holder of one or more Notes on the record
date pertaining to such meeting or (b) be a person appointed by an instrument in
writing as proxy by a holder of one or more Notes on the record date pertaining
to such meeting. The only persons who shall be entitled to be present or to
speak at any meeting of Noteholders shall be the persons entitled to vote at
such meeting and their counsel and any representatives of the Trustee and its
counsel and any representatives of the Company and its counsel.
Section 10.05. Regulations. Notwithstanding any other provisions of this
Indenture, the Trustee may make such reasonable regulations as it may deem
advisable for any meeting of Noteholders, in regard to proof of the holding of
Notes and of the appointment of proxies, and in regard to the appointment and
duties of inspectors of votes, the submission and examination of proxies,
certificates and other evidence of the right to vote, and such other matters
concerning the conduct of the meeting as it shall think fit.
The Trustee shall, by an instrument in writing, appoint a temporary chairman of
the meeting, unless the meeting shall have been called by the Company or by
Noteholders as provided in Section 10.03, in which case the Company or the
Noteholders calling the meeting, as the case may be, shall in like manner
appoint a temporary chairman. A permanent chairman and a permanent secretary of
the meeting shall be elected by vote of the holders of a majority in principal
amount of the Notes represented at the meeting and entitled to vote at the
meeting.
Subject to the provisions of Section 9.04, at any meeting each Noteholder or
proxyholder shall be entitled to one vote for each $1,000 principal amount of
Notes held or represented by him; provided that no vote shall be cast or counted
at any meeting in respect of any Note challenged as not outstanding and ruled by
the chairman of the meeting to be not outstanding. The chairman of the meeting
shall have no right to vote other than by virtue of Notes held by him or
instruments in writing as aforesaid duly designating him as the proxy to vote on
behalf of other Noteholders. Any meeting of Noteholders duly called pursuant to
the provisions of Section 10.02 or 10.03 may be adjourned from time to time by
the holders of a majority of the aggregate principal amount of Notes represented
at the meeting, whether or not constituting a quorum, and the meeting may be
held as so adjourned without further notice.
Section 10.06. Voting. The vote upon any resolution submitted to any meeting of
Noteholders shall be by written ballot on which shall be subscribed the
signatures of the holders of Notes or of their representatives by proxy and the
outstanding principal amount of the Notes held or represented by them. The
permanent chairman of the meeting shall appoint two inspectors of votes who
shall count all votes cast at the meeting for or against any resolution and who
shall make and file with the secretary of the meeting their verified written
reports in duplicate of all votes cast at the meeting. A record in duplicate of
the proceedings of each meeting of Noteholders shall be prepared by the
secretary of the meeting and there shall be attached to said record the original
reports of the inspectors of votes on any vote by ballot taken thereat and
affidavits by one or more persons having knowledge of the facts setting forth a
copy of the notice of the meeting and showing that said notice was mailed as
provided in Section 10.02. The record shall show the principal amount of the
Notes voting in favor of or against any resolution. The record shall be signed
and verified by the affidavits of the permanent chairman and secretary of the
meeting and one of the duplicates shall be delivered to the Company and the
other to the Trustee to be preserved by the Trustee, the latter to have attached
thereto the ballots voted at the meeting.
Any record so signed and verified shall be conclusive evidence of the matters
therein stated.
Section 10.07. No Delay of Rights by Meeting. Nothing contained in this Article
10 shall be deemed or construed to authorize or permit, by reason of any call
of a meeting of Noteholders or any rights expressly or impliedly conferred
hereunder to make such call, any hindrance or delay in the exercise of any
right or rights conferred upon or reserved to the Trustee or to the Noteholders
under any of the provisions of this Indenture or of the Notes.
ARTICLE 11
Supplemental Indentures
Section 11.01. Supplemental Indentures Without Consent of Noteholders. The
Company, when authorized by the resolutions of the Board of Directors, and the
Trustee may, from time to time, and at any time enter into an indenture or
indentures supplemental hereto for one or more of the following purposes:
(a) make provision with respect to the conversion rights of the
holders of Notes pursuant to the requirements of Section 15.06 and the
redemption obligations of the Company pursuant to the requirements of Section
3.05(e);
(b) subject to Article 4, to convey, transfer, assign, mortgage or
pledge to the Trustee as security for the Notes, any property or assets;
(c) to evidence the succession of another Person to the Company, or
successive successions, and the assumption by the successor Person of the
covenants, agreements and obligations of the Company pursuant to Article 12;
(d) to add to the covenants of the Company such further covenants,
restrictions or conditions as the Board of Directors and the Trustee shall
consider to be for the benefit of the holders of Notes, and to make the
occurrence, or the occurrence and continuance, of a default in any such
additional covenants, restrictions or conditions a default or an Event of
Default permitting the enforcement of all or any of the several remedies
provided in this Indenture as herein set forth; provided that in respect of any
such additional covenant, restriction or condition, such supplemental indenture
may provide for a particular period of grace after default (which period may be
shorter or longer than that allowed in the case of other defaults) or may
provide for an immediate enforcement upon such default or may limit the remedies
available to the Trustee upon such default;
(e) to provide for the issuance under this Indenture of Notes in
coupon form (including Notes registrable as to principal only) and to provide
for exchangeability of such Notes with the Notes issued hereunder in fully
registered form and to make all appropriate changes for such purpose;
(f) to cure any ambiguity or to correct or supplement any provision
contained herein or in any supplemental indenture that may be defective or
inconsistent with any other provision contained herein or in any supplemental
indenture, or to make such other provisions in regard to matters or questions
arising under this Indenture that shall not materially adversely affect the
interests of the holders of the Notes;
(g) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Notes; or
(h) to modify, eliminate or add to the provisions of this Indenture
to such extent as shall be necessary to effect the qualifications of this
Indenture under the Trust Indenture Act, or under any similar federal statute
hereafter enacted.
Upon the written request of the Company, accompanied by a copy of the
resolutions of the Board of Directors certified by its Secretary or Assistant
Secretary authorizing the execution of any supplemental indenture, the Trustee
is hereby authorized to join with the Company in the execution of any such
supplemental indenture, to make any further appropriate agreements and
stipulations that may be therein contained and to accept the conveyance,
transfer and assignment of any property thereunder, but the Trustee shall not be
obligated to, but may in its discretion, enter into any supplemental indenture
that affects the Trustee's own rights, duties or immunities under this Indenture
or otherwise.
Any supplemental indenture authorized by the provisions of this Section 11.01
may be executed by the Company and the Trustee without the consent of the
holders of any of the Notes at the time outstanding, notwithstanding any of the
provisions of Section 11.02.
Notwithstanding any other provision of the Indenture or the Notes, the
Registration Rights Agreement and the obligation to pay Liquidated Damages
thereunder may be amended, modified or waived in accordance with the provisions
of the Registration Rights Agreement.
Section 11.02. Supplemental Indenture with Consent of Noteholders. With the
consent (evidenced as provided in Article 9) of the holders of not less than a
majority in aggregate principal amount of the Notes at the time outstanding, the
Company, when authorized by the resolutions of the Board of Directors, and the
Trustee may, from time to time and at any time, enter into an indenture or
indentures supplemental hereto for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Indenture or
any supplemental indenture or of modifying in any manner the rights of the
holders of the Notes; provided that no such supplemental indenture shall (i)
extend the fixed maturity of any Note, or reduce the rate or extend the time of
payment of interest thereon, or reduce the principal amount thereof or premium,
if any, thereon, or reduce any amount payable on redemption thereof, or impair
the right of any Noteholder to institute suit for the payment thereof, or make
the principal thereof or interest or premium, if any, thereon payable in any
coin or currency other than that provided in the Notes, or modify the provisions
of this Indenture with respect to the subordination of the Notes in a manner
adverse to the Noteholders in any material respect, or change the obligation of
the Company to redeem any Note upon the happening of a Fundamental Change in a
manner adverse to the holder of Notes, or impair the right to convert the Notes
into Common Stock subject to the terms set forth herein, including Section
15.06, in each case, without the consent of the holder of each Note so affected,
or (ii) modify any of the provisions of this Section 11.02 or Section 7.07,
except to
increase any such percentage or to provide that certain other provisions of this
Indenture cannot be modified or waived without the consent of the holder of each
Note so affected, or change any obligation of the Company to maintain an office
or agency in the places and for the purposes set forth in Section 5.01, or
reduce the aforesaid percentage of Notes, the holders of which are required to
consent to any such supplemental indenture, in each case without the consent of
the holders of all Notes then outstanding.
Upon the written request of the Company, accompanied by a copy of the
resolutions of the Board of Directors certified by its Secretary or Assistant
Secretary authorizing the execution of any such supplemental indenture, and upon
the filing with the Trustee of evidence of the consent of Noteholders as
aforesaid, the Trustee shall join with the Company in the execution of such
supplemental indenture unless such supplemental indenture affects the Trustee's
own rights, duties or immunities under this Indenture or otherwise, in which
case the Trustee may in its discretion, but shall not be obligated to, enter
into such supplemental indenture.
It shall not be necessary for the consent of the Noteholders under this Section
11.02 to approve the particular form of any proposed supplemental indenture, but
it shall be sufficient if such consent shall approve the substance thereof.
Section 11.03. Effect of Supplemental Indenture. Any supplemental indenture
executed pursuant to the provisions of this Article 11 shall comply with the
Trust Indenture Act, as then in effect, provided that this Section 11.03 shall
not require such supplemental indenture or the Trustee to be qualified under the
Trust Indenture Act prior to the time such qualification is in fact required
under the terms of the Trust Indenture Act or the Indenture has been qualified
under the Trust Indenture Act, nor shall it constitute any admission or
acknowledgment by any party to such supplemental indenture that any such
qualification is required prior to the time such qualification is in fact
required under the terms of the Trust Indenture Act or the Indenture has been
qualified under the Trust Indenture Act. Upon the execution of any supplemental
indenture pursuant to the provisions of this Article 11, this Indenture shall be
and be deemed to be modified and amended in accordance therewith and the
respective rights, limitation of rights, obligations, duties and immunities
under this Indenture of the Trustee, the Company and the holders of Notes shall
thereafter be determined, exercised and enforced hereunder, subject in all
respects to such modifications and amendments and all the terms and conditions
of any such supplemental indenture shall be and be deemed to be part of the
terms and conditions of this Indenture for any and all purposes.
Section 11.04. Notation on Notes. Notes authenticated and delivered after the
execution of any supplemental indenture pursuant to the provisions of this
Article 11 may bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company or the Trustee shall
so determine, new Notes so modified as to conform, in the opinion of the Trustee
and the Board of Directors, to any modification of this Indenture contained in
any such supplemental indenture may, at the Company's expense, be prepared and
executed by the Company, authenticated by the Trustee (or an authenticating
agent duly appointed by the Trustee pursuant to Section 16.10) and delivered in
exchange for the Notes then outstanding, upon surrender of such Notes then
outstanding.
Section 11.05. Evidence of Compliance of Supplemental Indenture to be Furnished
to Trustee. Prior to entering into any supplemental indenture, the Trustee may
request an Officers' Certificate and an Opinion of Counsel as conclusive
evidence that any supplemental indenture executed pursuant hereto complies with
the requirements of this Article 11.
ARTICLE 12
Consolidation, Merger, Sale, Conveyance and Lease
Section 12.01. Company May Consolidate on Certain Terms. Subject to the
provisions of Section 12.02, nothing contained in this Indenture or in any of
the Notes shall prevent any consolidation or merger of the Company with or into
any other Person or Persons (whether or not affiliated with the Company), or
successive consolidations or mergers in which the Company or its successor or
successors shall be a party or parties, or shall prevent any sale, conveyance or
lease (or successive sales, conveyances or leases) of all or substantially all
of the property of the Company, to any other Person (whether or not affiliated
with the Company), authorized to acquire and operate the same and that, in the
case of any such consolidation, merger, sale, conveyance or lease, the
resulting, surviving or transferee Person, if other than the Company, shall be
organized under the laws of (a) the United States of America, any state thereof
or the District of Columbia or (b) if the merger, consolidation or other
transaction would not impair the rights of holders, including without limitation
result in adverse tax consequences to U.S. holders, any other country; provided
that upon any such consolidation, merger, sale, conveyance or lease, the due and
punctual payment of the principal of and premium, if any, and interest on all of
the Notes, according to their tenor and the due and punctual performance and
observance of all of the covenants and conditions of this Indenture to be
performed by the Company, shall be expressly assumed, by supplemental indenture
satisfactory in form to the Trustee, executed and delivered to the Trustee by
the Person (if other than the Company) formed by such consolidation, or into
which the Company shall have been merged, or by the Person that shall have
acquired or leased such property, and such supplemental indenture shall provide
for the applicable conversion rights set forth in Section 15.06; provided
further that immediately after giving effect to the transaction described above,
no Event of Default, and no event which, after notice or lapse of time or both,
would become an Event of Default, shall have happened and be continuing.
Section 12.02. Successor Corporation to Be Substituted. In case of any such
consolidation, merger, sale, conveyance or lease and upon the assumption by the
successor Person, by supplemental indenture, executed and delivered to the
Trustee and satisfactory in form to the Trustee, of the due and punctual payment
of the principal of and premium, if any, and interest on all of the Notes and
the due and punctual performance of all of the covenants and conditions of this
Indenture to be performed by the Company, such successor Person shall succeed to
and be substituted for the Company, with the same effect as if it had been named
herein as the party of this first part. Such successor Person thereupon may
cause to be signed, and may issue either in its own name or in the name of
SanDisk Corporation any or all of the Notes, issuable hereunder that theretofore
shall not have been signed by the Company and delivered to the Trustee; and,
upon the order of such successor Person instead of the Company and subject to
all the terms, conditions and limitations in this Indenture prescribed, the
Trustee shall authenticate and shall deliver, or cause to be authenticated and
delivered, any Notes that previously shall have been signed and delivered by the
officers of the Company to the Trustee for authentication, and any Notes that
such successor Person thereafter shall cause to be signed and delivered to the
Trustee for that purpose. All the Notes so issued shall in all respects have the
same legal rank and benefit under this Indenture as the Notes theretofore or
thereafter issued in accordance with the terms of this Indenture as though all
of such Notes had been issued at the date of the execution hereof. In the event
of any such consolidation, merger, sale, conveyance or lease, the Person named
as the "Company" in the first paragraph of this Indenture or any successor that
shall thereafter have become such in the manner prescribed in this Article 12
prior to such consolidation may be dissolved, wound up and liquidated at any
time thereafter and such Person shall be released from its liabilities as
obligor and maker of the Notes and from its obligations under this Indenture.
In case of any such consolidation, merger, sale, conveyance or lease, such
changes in phraseology and form (but not in substance) may be made in the Notes
thereafter to be issued as may be appropriate.
Section 12.03. Opinion of Counsel to Be Given Trustee. The Trustee shall receive
an Officers' Certificate and an Opinion of Counsel as conclusive evidence that
any such consolidation, merger, sale, conveyance or lease and any such
assumption complies with the provisions of this Article 12.
ARTICLE 13
Satisfaction and Discharge of Indenture
Section 13.01. Discharge of Indenture. When (a) the Company shall deliver to the
Trustee for cancellation all Notes theretofore authenticated (other than any
Notes that have been destroyed, lost or stolen and in lieu of or in substitution
for which other Notes shall have been authenticated and delivered) and not
theretofore canceled, or (b) all the Notes not theretofore canceled or delivered
to the Trustee for cancellation shall have become due and payable, or are by
their terms to become due and payable within one year or are to be called for
redemption within one year under arrangements satisfactory to the Trustee for
the giving of notice of redemption, and the Company shall deposit with the
Trustee, in trust, funds sufficient to pay at maturity or upon redemption of all
of the Notes (other than any Notes that shall have been mutilated, destroyed,
lost or stolen and in lieu of or in substitution for which other Notes shall
have been authenticated and delivered) not theretofore canceled or delivered to
the Trustee for cancellation, including principal and premium, if any, and
interest due or to become due to such date of maturity or redemption date, as
the case may be, accompanied by a verification report, as to the sufficiency of
the deposited amount, from an independent certified accountant or other
financial professional satisfactory to the Trustee, and if the Company shall
also pay or cause to be paid
all other sums payable hereunder by the Company, then this Indenture shall cease
to be of further effect (except as to (i) remaining rights of registration of
transfer, substitution and exchange and conversion of Notes, (ii) rights
hereunder of Noteholders to receive payments of principal of and premium, if
any, and interest on, the Notes and the other rights, duties and obligations of
Noteholders, as beneficiaries hereof with respect to the amounts, if any, so
deposited with the Trustee and (iii) the rights, obligations and immunities of
the Trustee hereunder), and the Trustee, on written demand of the Company
accompanied by an Officers' Certificate and an Opinion of Counsel as required by
Section 16.04 and at the cost and expense of the Company, shall execute proper
instruments acknowledging satisfaction of and discharging this Indenture; the
Company, however, hereby agrees to reimburse the Trustee for any costs or
expenses thereafter reasonably and properly incurred by the Trustee and to
compensate the Trustee for any services thereafter reasonably and properly
rendered by the Trustee in connection with this Indenture or the Notes.
Section 13.02. Deposited Monies to Be Held in Trust by Trustee. Subject to
Section 13.04, all monies deposited with the Trustee pursuant to Section 13.01,
provided such deposit was not in violation of Article 4, shall be held in trust
for the sole benefit of the Noteholders and not to be subject to the
subordination provisions of Article 4, and such monies shall be applied by the
Trustee to the payment, either directly or through any paying agent (including
the Company if acting as its own paying agent), to the holders of the particular
Notes for the payment or redemption of which such monies have been deposited
with the Trustee, of all sums due and to become due thereon for principal and
interest and premium, if any.
Section 13.03. Paying Agent to Repay Monies Held. Upon the satisfaction and
discharge of this Indenture, all monies then held by any paying agent of the
Notes (other than the Trustee) shall, upon written request of the Company, be
repaid to it or paid to the Trustee, and thereupon such paying agent shall be
released from all further liability with respect to such monies.
Section 13.04. Return of Unclaimed Monies. Subject to the requirements of
applicable law, any monies deposited with or paid to the Trustee for payment of
the principal of, premium, if any, or interest on Notes and not applied but
remaining unclaimed by the holders of Notes for two years after the date upon
which the principal of, premium, if any, or interest on such Notes, as the case
may be, shall have become due and payable, shall be repaid to the Company by the
Trustee on demand and all liability of the Trustee shall thereupon cease with
respect to such monies; and the holder of any of the Notes shall thereafter look
only to the Company for any payment that such holder may be entitled to collect
unless an applicable abandoned property law designates another Person.
Section 13.05. Reinstatement. If the Trustee or the paying agent is unable to
apply any money in accordance with Section 13.02 by reason of any order or
judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, the Company's obligations under this
Indenture and the Notes shall be revived and reinstated as though no deposit had
occurred pursuant to Section 13.01 until such time as the Trustee or the paying
agent is permitted to apply all such money in accordance with Section 13.02;
provided that if the Company makes any payment of interest on or principal of
any Note following the reinstatement of its obligations, the Company shall be
subrogated to the rights of the holders of such Notes to receive such payment
from the money held by the Trustee or paying agent.
ARTICLE 14
Immunity of Incorporators, Stockholders, Officers and Directors
Section 14.01. Indenture and Notes Solely Corporate Obligations. No recourse for
the payment of the principal of or premium, if any, or interest on any Note, or
for any claim based thereon or otherwise in respect thereof, and no recourse
under or upon any obligation, covenant or agreement of the Company in this
Indenture or in any supplemental indenture or in any Note, or because of the
creation of any indebtedness represented thereby, shall be had against any
incorporator, stockholder, employee, agent, officer, director or subsidiary, as
such, past, present or future, of the Company or of any successor corporation,
either directly or through the Company or any successor corporation, whether by
virtue of any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise; it being expressly understood that all such
liability is hereby expressly waived and released as a condition of, and as a
consideration for, the execution of this Indenture and the issue of the Notes.
ARTICLE 15
Conversion of Notes
Section 15.01. Right to Convert. Subject to and upon compliance with the
provisions of this Indenture, including, without limitation, Article 4, the
holder of any Note shall have the right, at its option, at any time after the
original issuance of the Notes hereunder through the close of business on the
Business Day immediately preceding the final maturity date of such Note (except
that, with respect to any Note or portion of a Note that shall be called for
redemption, such right shall terminate, except as provided in Section 15.02,
Section 3.02, Section 3.03 or Section 3.04, at the close of business on the
Business Day immediately preceding the date fixed for redemption of such Note or
portion of a Note unless the Company shall default in payment due upon
redemption thereof) to convert the principal amount of the Note, or any portion
of such principal amount which is a multiple of $1,000, into fully paid and
non-assessable shares of Common Stock (as such shares shall then be constituted)
at the Conversion Rate in effect at such time, by surrender of the Note so to be
converted in whole or in part in the manner provided, together with any required
funds, in Section 15.02. A Note in respect of which a holder is exercising its
option to require redemption upon a Fundamental Change pursuant to Section
3.05(a) may be converted only if such holder withdraws its election to exercise
its repurchase right in accordance with the Company Notice pertaining thereto
provided for in Section 3.05(b). A holder of Notes is not entitled to any rights
of a holder of Common Stock until such holder has converted his Notes to Common
Stock, and only to the extent such Notes are deemed to have been converted to
Common Stock under this Article 15.
Section 15.02. Exercise of Conversion Privilege; Issuance of Common Stock on
Conversion, No Adjustment for Interest or Dividends. In order to exercise the
conversion privilege with respect to any Note in certificated form, the holder
of any such Note to be converted in whole or in part shall surrender such Note,
duly endorsed, at an office or agency maintained by the Company for such purpose
pursuant to Section 5.02, accompanied by the funds, if any, required by the
penultimate paragraph of this Section 15.02, and shall give written notice of
conversion in the form provided on the Notes (or such other notice which is
acceptable to the Company) to the office or agency that the holder elects to
convert such Note or the portion thereof specified in said notice. Such notice
shall also state the name or names (with address or addresses) in which the
certificate or certificates for shares of Common Stock which shall be issuable
on such conversion shall be issued, and shall be accompanied by transfer taxes,
if required pursuant to Section 15.07. Each such Note surrendered for conversion
shall, unless the shares issuable on conversion are to be issued in the same
name as the registration of such Note, be duly endorsed by, or be accompanied by
instruments of transfer in form satisfactory to the Company duly executed by,
the holder or his duly authorized attorney.
In order to exercise the conversion privilege with respect to any interest in a
Global Note, the beneficial holder must complete, or cause to be completed, the
appropriate instruction form for conversion pursuant to the Depositary's book-
entry conversion program, deliver, or cause to be delivered, by book-entry
delivery an interest in such Global Note, furnish appropriate endorsements and
transfer documents if required by the Company or the Trustee or conversion
agent, and pay the funds, if any, required by this Section 15.02 and any
transfer taxes if required pursuant to Section 15.07.
As promptly as practicable after satisfaction of the requirements for conversion
set forth above, subject to compliance with any restrictions on transfer if
shares issuable on conversion are to be issued in a name other than that of the
Noteholder (as if such transfer were a transfer of the Note or Notes (or portion
thereof) so converted), the Company shall issue and shall deliver to such
Noteholder at the office or agency maintained by the Company for such purpose
pursuant to Section 5.02, a certificate or certificates for the number of full
shares of Common Stock issuable upon the conversion of such Note or portion
thereof as determined by the Company in accordance with the provisions of this
Article 15 and a check or cash in respect of any fractional interest in respect
of a share of Common Stock arising upon such conversion, calculated by the
Company as provided in Section 15.03. In case any Note of a denomination greater
than $1,000 shall be surrendered for partial conversion, and subject to Section
2.03, the Company shall execute and the Trustee shall authenticate and deliver
to the holder of the Note so surrendered, without charge to him, a new Note or
Notes in authorized denominations in an aggregate principal amount equal to the
unconverted portion of the surrendered Note.
Each conversion shall be deemed to have been effected as to any such Note (or
portion thereof) on the date on which the requirements set forth above in this
Section 15.02 have been satisfied as to such Note (or portion thereof), and the
Person in whose name any certificate or certificates for shares of Common Stock
shall be issuable upon such conversion shall be deemed to have become on said
date the holder of record of the shares represented thereby; provided that in
the
case of any such surrender on any date when the stock transfer books of the
Company shall be closed, such Person shall constitute the Person in whose name
the certificates are to be issued as the record holder thereof for all purposes
on the next succeeding day on which such stock transfer books are open, but such
conversion shall be at the Conversion Rate in effect on the date upon which such
Note shall be surrendered.
Any Note or portion thereof surrendered for conversion during the period from
the close of business on the record date for any interest payment date to the
close of business on the Business Day preceding the following interest payment
date that has not been called or tendered for redemption on a redemption date or
Repurchase Date occurring during such period shall be accompanied by payment, in
immediately available funds or other funds acceptable to the Company, of an
amount equal to the interest otherwise payable on such interest payment date on
the principal amount being converted; provided that no such payment need be made
if there shall exist at the time of conversion a default in the payment of
interest on the Notes. Except as provided above in this Section 15.02, no
payment or other adjustment shall be made for interest accrued on any Note
converted or for dividends on any shares issued upon the conversion of such Note
as provided in this Article.
Upon the conversion of an interest in a Global Note, the Trustee (or other
conversion agent appointed by the Company), or the Custodian at the direction of
the Trustee (or other conversion agent appointed by the Company), shall make a
notation on such Global Note as to the reduction in the principal amount
represented thereby. The Company shall notify the Trustee in writing of any
conversions of Notes effected through any conversion agent other than the
Trustee.
Section 15.03. Cash Payments in Lieu of Fractional Shares. No fractional shares
of Common Stock or scrip representing fractional shares shall be issued upon
conversion of Notes. If more than one Note shall be surrendered for conversion
at one time by the same holder, the number of full shares that shall be issuable
upon conversion shall be computed on the basis of the aggregate principal amount
of the Notes (or specified portions thereof to the extent permitted hereby) so
surrendered. If any fractional share of stock would be issuable upon the
conversion of any Note or Notes, the Company shall not issue such fractional
share but shall in lieu of such issuance make payment therefor in cash at the
current market price thereof to the holder of Notes. The current market price of
a share of Common Stock shall be the Closing Price (as defined in Section
15.05(h)) on the last Business Day immediately preceding the day on which the
Notes (or specified portions thereof) are deemed to have been converted.
Section 15.04. Conversion Rate. Each $1,000 principal amount of the Notes shall
be convertible into the number of shares of Common Stock specified in the form
of Note (herein called the "Conversion Rate") attached as Exhibit A hereto,
subject to adjustment as provided in this Article 15.
Section 15.05. Adjustment of Conversion Rate. The Conversion Rate shall be
adjusted from time to time by the Company as follows:
(a) In case the Company shall hereafter pay a dividend or make a distribution to
all holders of the outstanding Common Stock in shares of Common Stock, the
Conversion Rate shall be increased so that the same shall equal the rate
determined by multiplying the Conversion Rate in effect at the opening of
business on the Business Day immediately following the date fixed for the
determination of stockholders entitled to receive such dividend or other
distribution by a fraction,
(i) the numerator of which shall be the sum of the number of
shares of Common Stock outstanding at the close of business on the date
fixed for the determination of stockholders entitled to receive such
dividend or other distribution plus the total number of shares of
Common Stock constituting such dividend or other distribution; and
(ii) the denominator of which shall be the number of shares of
Common Stock outstanding at the close of business on the date fixed for
such determination,
such increase to become effective immediately after the opening of business on
the Business Day immediately following the date fixed for such determination.
For the purpose of this paragraph (a), the number of shares of Common Stock at
any time outstanding shall not include shares held in the treasury of the
Company. The Company will not pay any dividend or make any distribution on
shares of Common Stock held in the treasury of the Company. If any dividend or
distribution of the type described in this Section 15.05(a) is declared but not
so paid or made, the Conversion Rate shall again be adjusted to the Conversion
Rate that would then be in effect if such dividend or distribution had not been
declared.
(b) In case the Company shall issue rights or warrants to all holders
of its outstanding shares of Common Stock entitling them (for a period expiring
within forty-five (45) days after the date fixed for determination of
stockholders entitled to receive such rights or warrants) to subscribe for or
purchase shares of Common Stock at a price per share less than the Current
Market Price (as defined below) on the date fixed for determination of
stockholders entitled to receive such rights or warrants, the Conversion Rate
shall be increased so that the same shall equal the rate determined by
multiplying the Conversion Rate in effect immediately prior to the date fixed
for determination of stockholders entitled to receive such rights or warrants by
a fraction,
(i) the numerator of which shall be the sum of the number of
shares of Common Stock outstanding on the date fixed for determination
of stockholders entitled to receive such rights or warrants plus the
total number of additional shares of Common Stock offered for
subscription or purchase, and
(ii) the denominator of which shall be the sum of the number of
shares of Common Stock outstanding at the close of business on the date
fixed for determination of stockholders entitled to receive such rights
or warrants plus the number of shares that the aggregate offering price
of the total number of shares so offered would purchase at such Current
Market Price.
Such adjustment shall be successively made whenever any such rights or warrants
are issued, and shall become effective immediately after the opening of business
on the Business Day immediately following the date fixed for determination of
stockholders entitled to receive such rights or warrants. To the extent that
shares of Common Stock are not delivered after the expiration of such rights or
warrants, the Conversion Rate shall be readjusted to the Conversion Rate that
would then be in effect had the adjustments made upon the issuance of such
rights or warrants been made on the basis of delivery of only the number of
shares of Common Stock actually delivered. If such rights or warrants are not so
issued, the Conversion Rate shall again be adjusted to be the Conversion Rate
that would then be in effect if such date fixed for the determination of
stockholders entitled to receive such rights or warrants had not been fixed. In
determining whether any rights or warrants entitle the holders to subscribe for
or purchase shares of Common Stock at less than such Current Market Price, and
in determining the aggregate offering price of such shares of Common Stock,
there shall be taken into account any consideration received by the Company for
such rights or warrants and any amount payable on exercise or conversion
thereof, the value of such consideration, if other than cash, to be determined
by the Board of Directors, whose determination shall be conclusive, and
described in a resolution of the Board of Directors.
(c) In case outstanding shares of Common Stock shall be subdivided
into a greater number of shares of Common Stock, the Conversion Rate in effect
at the opening of business on the Business Day immediately following the day
upon which such subdivision becomes effective shall be proportionately
increased, and conversely, in case outstanding shares of Common Stock shall be
combined into a smaller number of shares of Common Stock, the Conversion Rate in
effect at the opening of business on the Business Day immediately following the
day upon which such combination becomes effective shall be proportionately
reduced, such increase or reduction, as the case may be, to become effective
immediately after the opening of business on the Business Day immediately
following the day upon which such subdivision or combination becomes effective.
(d) In case the Company shall, by dividend or otherwise, distribute
to all holders of its Common Stock shares of any class of capital stock of the
Company or evidences of its indebtedness or assets (including securities, but
excluding any rights or warrants referred to in Section 15.05(b), and excluding
any dividend or distribution (x) paid exclusively in cash or (y) referred to in
Section 15.05(a) (any of the foregoing hereinafter in this Section 15.05(d)
called the "Securities")), then, in each such case (unless the Company elects to
reserve such Securities for distribution to the Noteholders upon the conversion
of the Notes so that any such holder converting Notes will receive upon such
conversion, in addition to the shares of Common Stock to which such holder is
entitled, the amount and kind of such Securities which such holder would have
received if such holder had converted its Notes into Common Stock immediately
prior to the Record Date (as defined in Section 15.05(h)(4)) for such
distribution of the Securities), the Conversion Rate shall be increased so that
the same shall be equal to the rate
determined by multiplying the Conversion Rate in effect on the Record Date with
respect to such distribution by a fraction,
(i) the numerator of which shall be the Current Market Price on
such Record Date; and
(ii) the denominator of which shall be the Current Market Price on
such Record Date less the fair market value (as determined by the Board of
Directors, whose determination shall be conclusive, and described in a
resolution of the Board of Directors) on the Record Date of the portion of
the Securities so distributed applicable to one share of Common Stock,
such adjustment to become effective immediately prior to the opening of business
on the Business Day immediately following such Record Date; provided that if the
then fair market value (as so determined) of the portion of the Securities so
distributed applicable to one share of Common Stock is equal to or greater than
the Current Market Price on the Record Date, in lieu of the foregoing
adjustment, adequate provision shall be made so that each Noteholder shall have
the right to receive upon conversion the amount of Securities such holder would
have received had such holder converted each Note on the Record Date. If such
dividend or distribution is not so paid or made, the Conversion Rate shall again
be adjusted to be the Conversion Rate that would then be in effect if such
dividend or distribution had not been declared. If the Board of Directors
determines the fair market value of any distribution for purposes of this
Section 15.05(d) by reference to the actual or when issued trading market for
any securities, it must in doing so consider the prices in such market over the
same period used in computing the Current Market Price on the applicable Record
Date.
Rights or warrants distributed by the Company to all holders of Common Stock
entitling the holders thereof to subscribe for or purchase shares of the
Company's capital stock (either initially or under certain circumstances), which
rights or warrants, until the occurrence of a specified event or events
("Trigger Event"): (i) are deemed to be transferred with such shares of Common
Stock; (ii) are not exercisable; and (iii) are also issued in respect of future
issuances of Common Stock, shall be deemed not to have been distributed for
purposes of this Section 15.05 (and no adjustment to the Conversion Rate under
this Section 15.05 will be required) until the occurrence of the earliest
Trigger Event, whereupon such rights and warrants shall be deemed to have been
distributed and an appropriate adjustment (if any is required) to the Conversion
Rate shall be made under this Section 15.05(d). If any such right or warrant,
including any such existing rights or warrants distributed prior to the date of
this Indenture, are subject to events, upon the occurrence of which such rights
or warrants become exercisable to purchase different securities, evidences of
indebtedness or other assets, then the date of the occurrence of any and each
such event shall be deemed to be the date of distribution and record date with
respect to new rights or warrants with such rights (and a termination or
expiration of the existing rights or warrants without exercise by any of the
holders thereof). In addition, in the event of any
distribution (or deemed distribution) of rights or warrants, or any Trigger
Event or other event (of the type described in the preceding sentence) with
respect thereto that was counted for purposes of calculating a distribution
amount for which an adjustment to the Conversion Rate under this Section 15.05
was made, (1) in the case of any such rights or warrants that shall all have
been redeemed or repurchased without exercise by any holders thereof, the
Conversion Rate shall be readjusted upon such final redemption or repurchase to
give effect to such distribution or Trigger Event, as the case may be, as though
it were a cash distribution, equal to the per share redemption or repurchase
price received by a holder or holders of Common Stock with respect to such
rights or warrants (assuming such holder had retained such rights or warrants),
made to all holders of Common Stock as of the date of such redemption or
repurchase, and (2) in the case of such rights or warrants that shall have
expired or been terminated without exercise by any holders thereof, the
Conversion Rate shall be readjusted as if such rights and warrants had not been
issued.
No adjustment of the Conversion Rate shall be made pursuant to this Section
15.05(d) in respect of rights or warrants distributed or deemed distributed on
any Trigger Event to the extent that such rights or warrants are actually
distributed, or reserved by the Company for distribution to holders of Notes
upon conversion by such holders of Notes to Common Stock.
For purposes of this Section 15.05(d) and Sections 15.05(a) and (b), any
dividend or distribution to which this Section 15.05(d) is applicable that also
includes shares of Common Stock, or rights or warrants to subscribe for or
purchase shares of Common Stock (or both), shall be deemed instead to be (1) a
dividend or distribution of the evidences of indebtedness, assets or shares of
capital stock other than such shares of Common Stock or rights or warrants (and
any Conversion Rate adjustment required by this Section 15.05(d) with respect to
such dividend or distribution shall then be made) immediately followed by (2) a
dividend or distribution of such shares of Common Stock or such rights or
warrants (and any further Conversion Rate adjustment required by Sections
15.05(a) and (b) with respect to such dividend or distribution shall then be
made), except (A) the Record Date of such dividend or distribution shall be
substituted as "the date fixed for the determination of stockholders entitled to
receive such dividend or other distribution", "the date fixed for the
determination of stockholders entitled to receive such rights or warrants" and
"the date fixed for such determination" within the meaning of Sections 15.05(a)
and (b), and (B) any shares of Common Stock included in such dividend or
distribution shall not be deemed "outstanding at the close of business on the
date fixed for such determination" within the meaning of Section 15.05(a).
(e) In case the Company shall, by dividend or otherwise, distribute to all
holders of its Common Stock cash (excluding (x) any quarterly cash dividend on
the Common Stock to the extent the aggregate cash dividend per share of Common
Stock in any fiscal quarter does not exceed the greater of (A) the amount per
share of Common Stock of the next preceding quarterly cash dividend on the
Common Stock to the extent that such preceding quarterly dividend did not
require any adjustment of the Conversion Rate pursuant to this Section 15.05(e)
(as adjusted to reflect subdivisions, or combinations of the Common Stock), and
(B) 3.75% of the arithmetic average of the Closing Price (determined as set
forth in Section 15.05(h)) during the ten Trading Days (as defined in Section
15.05(h)) immediately prior to the date of declaration of such dividend, and
(y) any dividend or distribution in connection with the liquidation,
dissolution or winding up of the Company, whether voluntary or involuntary),
then, in such case, the Conversion Rate shall be increased so that the same
shall equal the rate determined by multiplying the Conversion Rate in effect
immediately prior to the close of business on the record date for such
distribution of cash by a fraction,
(i) the numerator of which shall be the Current Market Price on such
record date; and
(ii) the denominator of which shall be the Current Market Price on
such record date less the amount of cash so distributed (and not excluded
as provided above) applicable to one share of Common Stock,
such adjustment to be effective immediately prior to the opening of business on
the day following the record date; provided that if the portion of the cash so
distributed applicable to one share of Common Stock is equal to or greater than
the Current Market Price on the record date, in lieu of the foregoing
adjustment, adequate provision shall be made so that each Noteholder shall have
the right to receive upon conversion the amount of cash such holder would have
received had such holder converted each Note on the record date. If such
dividend or distribution is not so paid or made, the Conversion Rate shall again
be adjusted to be the Conversion Rate that would then be in effect if such
dividend or distribution had not been declared. If any adjustment is required to
be made as set forth in this Section 15.05(e) as a result of a distribution that
is a quarterly dividend, such adjustment shall be based upon the amount by which
such distribution exceeds the amount of the quarterly cash dividend permitted to
be excluded pursuant hereto. If an adjustment is required to be made as set
forth in this Section 15.05(e) above as a result of a distribution that is not a
quarterly dividend, such adjustment shall be based upon the full amount of the
distribution.
(f) In case a tender or exchange offer made by the Company or any
Subsidiary for all or any portion of the Common Stock shall expire and such
tender or exchange offer (as amended upon the expiration thereof) shall require
the payment to stockholders of consideration per share of Common Stock having a
Fair Market Value (as defined in Section 15.05(h)(3)) (as determined by the
Board of Directors, whose determination shall be conclusive and described in a
resolution of the Board of Directors) that as of the last time (the "Expiration
Time") tenders or exchanges may be made pursuant to such tender or exchange
offer (as it may be amended) exceeds the Closing Price of a share of Common
Stock on the Trading Day next succeeding the Expiration Time, the Conversion
Rate shall be increased so that the same shall equal the rate determined by
multiplying the Conversion Rate in effect immediately prior to the Expiration
Time by a fraction,
(i) the numerator of which shall be the sum of (x) the Fair
Market Value (determined as aforesaid) of the aggregate consideration
payable to stockholders based on the acceptance (up to any maximum
specified in the terms of the tender or exchange offer) of all shares
validly tendered or exchanged and not withdrawn as of the Expiration Time
(the shares deemed so accepted up to any such maximum, being referred to as
the "Purchased Shares") and (y) the product of the number of shares of
Common Stock outstanding (less any Purchased Shares) at the Expiration Time
and the Closing Price of a share of Common Stock on the Trading Day next
succeeding the Expiration Time, and
(ii) the denominator of which shall be the number of shares of
Common Stock outstanding (including any tendered or exchanged shares) at
the Expiration Time multiplied by the Closing Price of a share of Common
Stock on the Trading Day next succeeding the Expiration Time
such adjustment to become effective immediately prior to the opening of business
on the Business Day immediately following the Expiration Time. If the Company is
obligated to purchase shares pursuant to any such tender or exchange offer, but
the Company is permanently prevented by applicable law from effecting any such
purchases or all such purchases are rescinded, the Conversion Rate shall again
be adjusted to be the Conversion Rate that would then be in effect if such
tender or exchange offer had not been made.
(g) In case of a tender or exchange offer made by a Person other than the
Company or any Subsidiary of the Company for an amount that increases the
offeror's ownership of Common Stock to more than twenty-five percent (25%) of
the Common Stock outstanding and shall involve the payment by such Person of
consideration per share of Common Stock having a Fair Market Value (as
determined by the Board of Directors, whose determination shall be conclusive,
and described in a resolution of the Board of Directors) that as of the last
time (the "Offer Expiration Time") tenders or exchanges may be made pursuant to
such tender or exchange offer (as it shall have been amended) that exceeds the
Closing Price of a share of Common Stock on the Trading Day next succeeding the
Offer Expiration Time, and in which, as of the Offer Expiration Time the Board
of Directors is not recommending rejection of the offer, the Conversion Rate
shall be increased so that the same shall equal the rate determined by
multiplying the Conversion Rate in effect immediately prior to the Offer
Expiration Time by a fraction
(i) the numerator of which shall be the sum of (x) the Fair Market
Value (determined as aforesaid) of the aggregate consideration payable to
stockholders based on the acceptance (up to any maximum specified in the
terms of the tender or exchange offer) of all shares validly tendered or
exchanged and not withdrawn as of the Offer Expiration Time (the shares
deemed so accepted, up to any such maximum, being referred to as the
"Accepted Purchased Shares") and (y) the product of the number of shares of
Common Stock outstanding (less any Accepted Purchased Shares) at the Offer
Expiration Time and the Closing Price of a
share of Common Stock on the Trading Day next succeeding the Offer
Expiration Time, and
(ii) the denominator of which shall be the number of shares of
Common Stock outstanding (including any tendered or exchanged shares) at
the Offer Expiration Time multiplied by the Closing Price of a share of
Common Stock on the Trading Day next succeeding the Offer Expiration Time,
such adjustment to become effective immediately prior to the opening of business
on the Business Day immediately following the Offer Expiration Time. If such
Person is obligated to purchase shares pursuant to any such tender or exchange
offer, but such Person is permanently prevented by applicable law from effecting
any such purchases or all such purchases are rescinded, the Conversion Rate
shall again be adjusted to be the Conversion Rate that would then be in effect
if such tender or exchange offer had not been made. Notwithstanding the
foregoing, the adjustment described in this Section 15.05(g) shall not be made
if, as of the Offer Expiration Time, the offering documents with respect to such
offer disclose a plan or intention to cause the Company to engage in any
transaction described in Article 12.
(h) For purposes of this Section 15.05, the following terms shall have the
meaning indicated:
(1) "Closing Price" with respect to any security on any day shall
mean the closing sale price, regular way, on such day or, in case no such
sale takes place on such day, the average of the reported closing bid and
asked prices, regular way, in each case as quoted on the Nasdaq National
Market or, if such security is not quoted or listed or admitted to trading
on such Nasdaq National Market, on the principal national securities
exchange or quotation system on which such security is quoted or listed or
admitted to trading or, if not quoted or listed or admitted to trading on
any national securities exchange or quotation system, the average of the
closing bid and asked prices of such security on the over-the-counter
market on the day in question as reported by the National Quotation Bureau
Incorporated, or a similar generally accepted reporting service, or if not
so available, in such manner as furnished by any New York Stock Exchange
member firm selected from time to time by the Board of Directors for that
purpose, or a price determined in good faith by the Board of Directors or,
to the extent permitted by applicable law, a duly authorized committee
thereof, whose determination shall be conclusive.
(2) "Current Market Price" shall mean the average of the daily
Closing Prices per share of Common Stock for the ten consecutive Trading
Days selected by the Company commencing no more than 30 Trading Days
before and ending not later than the earlier of such date of determination
and the day before the "ex" date with respect to the issuance,
distribution, subdivision or combination requiring such
computation immediately prior to the date in question. For purpose of this
paragraph, the term "ex" date, (1) when used with respect to any issuance
or distribution, means the first date on which the Common Stock trades,
regular way, on the relevant exchange or in the relevant market from which
the Closing Price was obtained without the right to receive such issuance
or distribution, and (2) when used with respect to any subdivision or
combination of shares of Common Stock, means the first date on which the
Common Stock trades, regular way, on such exchange or in such market after
the time at which such subdivision or combination becomes effective.
If another issuance, distribution, subdivision or combination to
which Section 15.05 applies occurs during the period applicable for
calculating "Current Market Price" pursuant to the definition in the
preceding paragraph, "Current Market Price" shall be calculated for such
period in a manner determined by the Board of Directors to reflect the
impact of such issuance, distribution, subdivision or combination on the
Closing Price of the Common Stock during such period.
(3) "Fair Market Value" shall mean the amount which a willing
buyer would pay a willing seller in an arm's-length transaction.
(4) "Record Date" shall mean, with respect to any dividend,
distribution or other transaction or event in which the holders of Common
Stock have the right to receive any cash, securities or other property or
in which the Common Stock (or other applicable security) is exchanged for
or converted into any combination of cash, securities or other property,
the date fixed for determination of stockholders entitled to receive such
cash, securities or other property (whether such date is fixed by the
Board of Directors or by statute, contract or otherwise).
(5) "Trading Day" shall mean (x) if the applicable security is
quoted on the Nasdaq National Market, a day on which trades may be made
thereon or (y) if the applicable security is listed or admitted for
trading on the New York Stock Exchange or another national securities
exchange, a day on which the New York Stock Exchange or another national
securities exchange is open for business or (z) if the applicable security
is not so listed, admitted for trading or quoted, any day other than a
Saturday or Sunday or a day on which banking institutions in the State of
New York are authorized or obligated by law or executive order to close.
(i) The Company may make such increases in the Conversion Rate, in
addition to those required by Sections 15.05(a), (b), (c), (d), (e), (f) or (g)
as the Board of Directors considers to be advisable to avoid or diminish any
income tax to holders of Common Stock or rights to purchase Common Stock
resulting from any dividend or distribution of stock (or rights to acquire
stock) or from any event
treated as such for income tax purposes.
To the extent permitted by applicable law, the Company from time to time may
increase the Conversion Rate by any amount for any period of time if the period
is at least twenty (20) days, the increase is irrevocable during the period and
the Board of Directors shall have made a determination that such increase would
be in the best interests of the Company, which determination shall be
conclusive. Whenever the Conversion Rate is increased pursuant to the preceding
sentence, the Company shall mail to holders of record of the Notes a notice of
the increase at least fifteen (15) days prior to the date the increased
Conversion Rate takes effect, and such notice shall state the increased
Conversion Rate and the period during which it will be in effect.
(j) No adjustment in the Conversion Rate shall be required unless such
adjustment would require an increase or decrease of at least one percent (1%)
in such rate; provided that any adjustments that by reason of this Section
15.05(j)) are not required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations under this Article 15
shall be made by the Company and shall be made to the nearest cent or to the
nearest one-ten thousandth (1/10,000) of a share, as the case may be. No
adjustment need be made for rights to purchase Common Stock pursuant to a
Company plan for reinvestment of dividends or interest. To the extent the Notes
become convertible into cash, assets, property or securities (other than
capital stock of the Company), no adjustment need be made thereafter as to the
cash, assets, property or such securities. Interest will not accrue on any cash
into which the Notes are convertible.
(k) Whenever the Conversion Rate is adjusted as herein provided, the
Company shall promptly file with the Trustee and any conversion agent other
than the Trustee an Officers' Certificate setting forth the Conversion Rate
after such adjustment and setting forth a brief statement of the facts
requiring such adjustment. Unless and until a Responsible Officer of the
Trustee shall have received such Officers' Certificate, the Trustee shall not
be deemed to have knowledge of any adjustment of the Conversion Rate and may
assume that the last Conversion Rate of which it has knowledge is still in
effect. Promptly after delivery of such certificate, the Company shall prepare
a notice of such adjustment of the Conversion Rate setting forth the adjusted
Conversion Rate and the date on which each adjustment becomes effective and
shall mail such notice of such adjustment of the Conversion Rate to the holder
of each Note at his last address appearing on the Note register provided for in
Section 2.05 of this Indenture, within twenty (20) days after execution
thereof. Failure to deliver such notice shall not affect the legality or
validity of any such adjustment.
(l) In any case in which this Section 15.05 provides that an adjustment
shall become effective immediately after (1) a record date or Record Date for
an event, (2) the date fixed for the determination of stockholders entitled to
receive a dividend or distribution pursuant to Section 15.05(a), (3) a date
fixed for the determination of stockholders entitled to receive rights or
warrants pursuant to
Section 15.05(b), (4) the Expiration Time for any tender or exchange offer
pursuant to Section 15.05(f), or (5) the Offer Expiration Time for a tender or
exchange offer pursuant to Section 15.05(g) (each a "Determination Date"), the
Company may elect to defer until the occurrence of the applicable Adjustment
Event (as hereinafter defined) (x) issuing to the holder of any Note converted
after such Determination Date and before the occurrence of such Adjustment
Event, the additional shares of Common Stock or other securities issuable upon
such conversion by reason of the adjustment required by such Adjustment Event
over and above the Common Stock issuable upon such conversion before giving
effect to such adjustment and (y) paying to such holder any amount in cash in
lieu of any fraction pursuant to Section 15.03. For purposes of this Section
15.05(l), the term "Adjustment Event" shall mean:
(i) in any case referred to in clause (1) hereof, the occurrence
of such event,
(ii) in any case referred to in clause (2) hereof, the date any
such dividend or distribution is paid or made,
(iii) in any case referred to in clause (3) hereof, the date of
expiration of such rights or warrants, and
(iv) in any case referred to in clause (4) or clause (5) hereof,
the date a sale or exchange of Common Stock pursuant to such tender or
exchange offer is consummated and becomes irrevocable.
(m) For purposes of this Section 15.05, the number of shares of Common
Stock at any time outstanding shall not include shares held in the treasury of
the Company but shall include shares issuable in respect of scrip certificates
issued in lieu of fractions of shares of Common Stock. The Company will not pay
any dividend or make any distribution on shares of Common Stock held in the
treasury of the Company.
Section 15.06. Effect of Reclassification, Consolidation, Merger or Sale. If any
of the following events occur, namely (i) any reclassification or change of the
outstanding shares of Common Stock (other than a subdivision or combination to
which Section 15.05(c) applies), (ii) any consolidation, merger or combination
of the Company with another Person as a result of which holders of Common Stock
shall be entitled to receive stock, other securities or other property or assets
(including cash) with respect to or in exchange for such Common Stock, or (iii)
any sale or conveyance of all or substantially all of the properties and assets
of the Company to any other Person as a result of which holders of Common Stock
shall be entitled to receive stock, other securities or other property or assets
(including cash) with respect to or in exchange for such Common Stock, then the
Company or the successor or purchasing Person, as the case may be, shall execute
with the Trustee a supplemental indenture (which shall comply with the Trust
Indenture Act as in force at the date of execution of such supplemental
indenture) providing
that each Note shall be convertible into the kind and amount of shares of stock,
other securities or other property or assets (including cash) receivable upon
such reclassification, change, consolidation, merger, combination, sale or
conveyance by a holder of a number of shares of Common Stock issuable upon
conversion of such Notes (assuming, for such purposes, a sufficient number of
authorized shares of Common Stock are available to convert all such Notes)
immediately prior to such reclassification, change, consolidation, merger,
combination, sale or conveyance assuming such holder of Common Stock did not
exercise his rights of election, if any, as to the kind or amount of stock,
other securities or other property or assets (including cash) receivable upon
such reclassification, change, consolidation, merger, combination, sale or
conveyance (provided that, if the kind or amount of stock, other securities or
other property or assets (including cash) receivable upon such reclassification,
change, consolidation, merger, combination, sale or conveyance is not the same
for each share of Common Stock in respect of which such rights of election shall
not have been exercised ("nonelecting share"), then for the purposes of this
Section 15.06 the kind and amount of stock, other securities or other property
or assets (including cash) receivable upon such reclassification, change,
consolidation, merger, combination, sale or conveyance for each non-electing
share shall be deemed to be the kind and amount so receivable per share by a
plurality of the non-electing shares). Such supplemental indenture shall provide
for adjustments which shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Article 15. If, in the case of any such
reclassification, change, consolidation, merger, combination, sale or
conveyance, the stock or other securities or assets receivable thereupon by a
holder of shares of Common Stock include shares of stock or other securities or
assets of a Person other than the successor to the Company or purchaser of the
Company's assets, as the case may be, in such reclassification, change,
consolidation, merger, combination, sale or conveyance, then such supplemental
indenture shall also be executed by such other Person and shall contain such
additional provisions to protect the interest of the holders of the Notes as the
Board of Directors shall reasonably consider necessary by reason of the
foregoing, including to the extent practicable the provisions providing for the
redemption rights at the option of holder set forth in Section 3.05 hereof and
changes to the defined terms Common Stock and Company and provisions applicable
in respect of such terms to accommodate bifurcation of provisions applicable in
respect of the issuer of the Notes and such issuer's rights and obligations
thereunder, on the one hand, and provisions applicable in respect of the
property into which the Notes are convertible and the issuer or furnisher of
such property, on the other hand.
The Company shall cause notice of the execution of such supplemental indenture
to be mailed to each holder of Notes, at its address appearing on the Note
register provided for in Section 2.05 of this Indenture, within twenty (20) days
after execution thereof. Failure to deliver such notice shall not affect the
legality or validity of such supplemental indenture.
The above provisions of this Section shall similarly apply to successive
reclassifications, changes, consolidations, mergers, combinations, sales and
conveyances.
If this Section 15.06 applies to any event or occurrence, Section 15.05 shall
not apply.
Section 15.07. Taxes on Shares Issued. The issue of stock certificates on
conversions of Notes shall be made without charge to the converting Noteholder
for any documentary, stamp or similar issue or transfer tax in respect of the
issue thereof. The Company shall not, however, be required to pay any such tax
which may be payable in respect of any transfer involved in the issue and
delivery of stock in any name other than that of the holder of any Note
converted, and the Company shall not be required to issue or deliver any such
stock certificate unless and until the Person or Persons requesting the issue
thereof shall have paid to the Company the amount of such tax or shall have
established to the satisfaction of the Company that such tax has been paid.
Section 15.08. Reservation of Shares, Shares to Be Fully Paid; Compliance with
Governmental Requirements; Listing of Common Stock. The Company shall provide,
free from preemptive rights, out of its authorized but unissued shares or shares
held in treasury, sufficient shares of Common Stock to provide for the
conversion of the Notes from time to time as such Notes are presented for
conversion.
Before taking any action which would cause an adjustment increasing the
Conversion Rate to an amount that would cause the Conversion Price to be reduced
below the then par value, if any, of the shares of Common Stock issuable upon
conversion of the Notes, the Company will take all corporate action which may,
in the opinion of its counsel, be necessary in order that the Company may
validly and legally issue shares of such Common Stock at such adjusted
Conversion Rate.
The Company covenants that all shares of Common Stock which may be issued upon
conversion of Notes will upon issue be fully paid and non-assessable by the
Company and free from all taxes, liens and charges with respect to the issue
thereof.
The Company covenants that, if any shares of Common Stock to be provided for the
purpose of conversion of Notes hereunder require registration with or approval
of any governmental authority under any federal or state law before such shares
may be validly issued upon conversion, the Company will in good faith and as
expeditiously as possible, to the extent then permitted by the rules and
interpretations of the Securities and Exchange Commission (or any successor
thereto), endeavor to secure such registration or approval, as the case may be.
The Company further covenants that, if at any time the Common Stock shall be
listed on the Nasdaq National Market or any other national securities exchange
or automated quotation system, the Company will, if permitted by the rules of
such exchange or automated quotation system, list and keep listed, so long as
the Common Stock shall be so listed on such exchange or automated quotation
system, all Common Stock issuable upon conversion of the Note; provided that, if
the rules of such exchange or automated quotation system permit the Company to
defer the listing of such Common Stock until the first conversion of the Notes
into Common Stock in accordance with the provisions of this Indenture, the
Company covenants to list such Common Stock issuable upon conversion of the
Notes in accordance with the requirements of such exchange or automated
quotation
system at such time; provided, however, that the foregoing shall not be
-------- -------
construed to provide in any respect inconsistent with the Registration Rights
Agreement for registration under the Securities Act or other applicable
securities laws of transfers of the Common Stock issuable upon conversion of the
Notes.
Section 15.09. Responsibility of Trustee. The Trustee and any other conversion
agent shall not at any time be under any duty or responsibility to any holder of
Notes to determine the Conversion Rate or whether any facts exist which may
require any adjustment of the Conversion Rate, or with respect to the nature or
extent or calculation of any such adjustment when made, or with respect to the
method employed, or herein or in any supplemental indenture provided to be
employed, in making the same. The Trustee and any other conversion agent shall
not be accountable with respect to the validity or value (or the kind or amount)
of any shares of Common Stock, or of any securities or property, which may at
any time be issued or delivered upon the conversion of any Note; and the Trustee
and any other conversion agent make no representations with respect thereto.
Neither the Trustee nor any conversion agent shall be responsible for any
failure of the Company to issue, transfer or deliver any shares of Common Stock
or stock certificates or other securities or property or cash upon the surrender
of any Note for the purpose of conversion or to comply with any of the duties,
responsibilities or covenants of the Company contained in this Article 15.
Without limiting the generality of the foregoing, neither the Trustee nor any
conversion agent shall be under any responsibility to determine the correctness
of any provisions contained in any supplemental indenture entered into pursuant
to Section 15.06 relating either to the kind or amount of shares of stock or
securities or property (including cash) receivable by Noteholders upon the
conversion of their Notes after any event referred to in such Section 15.06 or
to any adjustment to be made with respect thereto, but, subject to the
provisions of Section 8.01, may accept as conclusive evidence of the correctness
of any such provisions, and shall be protected in relying upon, the Officers'
Certificate (which the Company shall be obligated to file with the Trustee prior
to the execution of any such supplemental indenture) with respect thereto.
Section 15.10. Notice to Holders Prior to Certain Actions. In case:
(a) the Company shall declare a dividend (or any other distribution) on
its Common Stock that would require an adjustment in the Conversion Rate
pursuant to Section 15.05; or
(b) the Company shall authorize the granting to the holders of all or
substantially all of its Common Stock of rights or warrants to subscribe for or
purchase any share of any class or any other rights or warrants; or
(c) of any reclassification or reorganization of the Common Stock of the
Company (other than a subdivision or combination of its outstanding Common
Stock, or a change in par value, or from par value to no par value, or from no
par value to par value), or of any consolidation or merger to which the Company
is a party and for which approval of any stockholders of the Company is
required, or of the sale or transfer of all or substantially all of the assets
of the Company; or
(d) of the voluntary or involuntary dissolution, liquidation or winding up
of the Company;
the Company shall cause to be filed with the Trustee and to be mailed to each
holder of Notes at his address appearing on the Note register provided for in
Section 2.05 of this Indenture, as promptly as possible but in any event at
least ten (10) days prior to the applicable date hereinafter specified, a notice
stating (x) the date on which a record is to be taken for the purpose of such
dividend, distribution or rights or warrants, or, if a record is not to be
taken, the date as of which the holders of Common Stock of record to be entitled
to such dividend, distribution or rights are to be determined, or (y) the date
on which such reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding up is expected to become effective or occur,
and the date as of which it is expected that holders of Common Stock of record
shall be entitled to exchange their Common Stock for securities or other
property deliverable upon such reclassification, consolidation, merger, sale,
transfer, dissolution, liquidation or winding up. Failure to give such notice,
or any defect therein, shall not affect the legality or validity of such
dividend, distribution, reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding up.
Section 15.11. Rights Issued in Respect of Common Stock Issued upon Conversion.
Each share of Common Stock issued upon conversion of Notes pursuant to this
Article 15 shall be entitled to receive the appropriate number of rights, if
any, and the certificates representing the Common Stock issued upon such
conversion shall bear such legends, if any, in each case as may be provided by
the terms of any shareholder rights agreement adopted by the Company, as the
same may be amended from time to time.
ARTICLE 16
Miscellaneous Provisions
Section 16.01. Provisions Binding on Company's Successors. All the covenants,
stipulations, promises and agreements by the Company contained in this Indenture
shall bind its successors and assigns whether so expressed or not.
Section 16.02. Official Acts by Successor Corporation. Any act or proceeding by
any provision of this Indenture authorized or required to be done or performed
by any board, committee or officer of the Company shall and may be done and
performed with like force and effect by the like board, committee or officer of
any Person that shall at the time be the lawful sole successor of the Company.
Section 16.03. Addresses for Notices, Etc. Any notice or demand which by any
provision of this Indenture is required or permitted to be given or served by
the Trustee or by the holders of Notes on the Company shall be deemed to have
been sufficiently given or made, for all purposes, if given or served by being
deposited postage prepaid by registered or certified mail in a post office
letter box addressed (until another address is filed by the Company with the
Trustee) to SanDisk Corporation, 140 Caspian Court, Sunnyvale, California 94089,
Attention: Treasurer. Any notice, direction, request or demand hereunder to or
upon the Trustee shall be deemed to have been sufficiently given or made, for
all purposes, if given or served by being deposited, postage prepaid, by
registered or certified mail in a post office letter box addressed to the
Corporate Trust Office, which
office is, at the date as of which this Indenture is dated, located at 101
Barclay Street, 21W, New York, New York 10286.
The Trustee, by notice to the Company, may designate additional or different
addresses for subsequent notices or communications.
Any notice or communication mailed to a Noteholder shall be mailed to him by
first class mail, postage prepaid, at his address as it appears on the Note
register and shall be sufficiently given to him if so mailed within the time
prescribed.
Failure to mail a notice or communication to a Noteholder or any defect in it
shall not affect its sufficiency with respect to other Noteholders. If a notice
or communication is mailed in the manner provided above, it is duly given,
whether or not the addressee receives it.
Section 16.04. Governing Law. This Indenture and each Note shall be deemed to be
a contract made under the laws of the State of New York, and for all purposes
shall be construed in accordance with the laws of the State of New York, without
regard to conflicts of laws principles thereof.
Section 16.05. Evidence of Compliance with Conditions Precedent, Certificates to
Trustee. Upon any application or demand by the Company to the Trustee to take
any action under any of the provisions of this Indenture, the Company shall
furnish to the Trustee an Officers' Certificate stating that all conditions
precedent, if any, provided for in this Indenture relating to the proposed
action have been complied with, and an Opinion of Counsel stating that, in the
opinion of such counsel, all such conditions precedent have been complied with;
provided, however, that such Officers' Certificate and Opinion of Counsel shall
not be required in connection with the initial issuance of Notes hereunder.
Each certificate or opinion provided for in this Indenture and delivered to the
Trustee with respect to compliance with a condition or covenant provided for in
this Indenture shall include: (1) a statement that the person making such
certificate or opinion has read such covenant or condition; (2) a brief
statement as to the nature and scope of the examination or investigation upon
which the statement or opinion contained in such certificate or opinion is
based; (3) a statement that, in the opinion of such person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and (4) a statement as to whether or not, in the opinion of such
person, such condition or covenant has been complied with.
Section 16.06. Legal Holidays. In any case in which the date of maturity of
interest on or principal of the Notes or the date fixed for redemption of any
Note will not be a Business Day, then payment of such interest on or principal
of the Notes need not be made on such date, but may be made on the next
succeeding Business Day with the same force and effect as if made on the date of
maturity or the date fixed for redemption, and no interest shall accrue for the
period from and after such date.
Section 16.07. Trust Indenture Act. This Indenture is hereby made subject to,
and shall be governed by, the provisions of the Trust Indenture Act required to
be part of and to govern indentures qualified under the Trust Indenture Act;
provided that, unless otherwise required by law, notwithstanding the foregoing,
this Indenture and the Notes issued hereunder shall not be subject to the
provisions of
subsections (a)(1), (a)(2), and (a)(3) of Section 314 of the Trust Indenture Act
as now in effect or as hereafter amended or modified; provided further that this
Section 16.07 shall not require this Indenture or the Trustee to be qualified
under the Trust Indenture Act prior to the time such qualification is in fact
required under the terms of the Trust Indenture Act, nor shall it constitute any
admission or acknowledgment by any party to the Indenture that any such
qualification is required prior to the time such qualification is in fact
required under the terms of the Trust Indenture Act. If any provision hereof
limits, qualifies or conflicts with another provision hereof which is required
to be included in an indenture qualified under the Trust Indenture Act, such
required provision shall control.
Section 16.08. No Security Interest Created. Nothing in this Indenture or in the
Notes, expressed or implied, shall be construed to constitute a security
interest under the Uniform Commercial Code or similar legislation, as now or
hereafter enacted and in effect, in any jurisdiction in which property of the
Company or its subsidiaries is located.
Section 16.09. Benefits of Indenture. Nothing in this Indenture or in the Notes,
express or implied, shall give to any Person, other than the parties hereto, any
paying agent, any authenticating agent, any Note registrar and their successors
hereunder, the holders of Notes and the holders of Senior Indebtedness, any
benefit or any legal or equitable right, remedy or claim under this Indenture.
Section 16.10. Table of Contents, Headings, Etc. The table of contents and the
titles and headings of the Articles and Sections of this Indenture have been
inserted for convenience of reference only, are not to be considered a part
hereof, and shall in no way modify or restrict any of the terms or provisions
hereof.
Section 16.11. Authenticating Agent. The Trustee may appoint an authenticating
agent that shall be authorized to act on its behalf, and subject to its
direction, in the authentication and delivery of Notes in connection with the
original issuance thereof and transfers and exchanges of Notes hereunder,
including under Sections 2.04, 2.05, 2.06, 2.07, 3.03 and 3.05, as fully to all
intents and purposes as though the authenticating agent had been expressly
authorized by this Indenture and those Sections to authenticate and deliver
Notes. For all purposes of this Indenture, the authentication and delivery of
Notes by the authenticating agent shall be deemed to be authentication and
delivery of such Notes "by the Trustee" and a certificate of authentication
executed on behalf of the Trustee by an authenticating agent shall be deemed to
satisfy any requirement hereunder or in the Notes for the Trustee's certificate
of authentication. Such authenticating agent shall at all times be a Person
eligible to serve as trustee hereunder pursuant to Section 8.09.
Any corporation into which any authenticating agent may be merged or converted
or with which it may be consolidated, or any corporation resulting from any
merger, consolidation or conversion to which any authenticating agent shall be a
party, or any corporation succeeding to all or substantially all the corporate
trust business of any authenticating agent, shall be the successor of the
authenticating agent hereunder, if such successor corporation is otherwise
eligible under this Section 16.11, without the execution or filing of any paper
or any further act on the part of the parties hereto or the authenticating agent
or such successor corporation.
Any authenticating agent may at any time resign by giving written notice of
resignation to the Trustee and to the Company. The Trustee may at any time
terminate the agency of any authenticating agent by giving written notice of
termination to such authenticating agent and to the Company. Upon receiving such
a notice of resignation or upon such a termination, or in case at any time any
authenticating agent shall cease to be eligible under this Section, the Trustee
shall either promptly appoint a successor authenticating agent or itself assume
the duties and obligations of the former authenticating agent under this
Indenture and, upon such appointment of a successor authenticating agent, if
made, shall give written notice of such appointment of a successor
authenticating agent to the Company and shall mail notice of such appointment of
a successor authenticating agent to all holders of Notes as the names and
addresses of such holders appear on the Note register.
The Company agrees to pay to the authenticating agent from time to time such
reasonable compensation for its services as shall be agreed upon in writing
between the Company and the authenticating agent.
The provisions of Sections 8.02, 8.03, 8.04, 9.03 and this Section 16.11 shall
be applicable to any authenticating agent.
Section 16.12. Execution in Counterparts. This Indenture may be executed in any
number of counterparts, each of which shall be an original, but such
counterparts shall together constitute but one and the same instrument.
Section 16.13. Severability. In case any provision in this Indenture or in the
Notes shall be invalid, illegal or unenforceable, then (to the extent permitted
by law) the validity, legality and enforceability of the remaining provisions
shall not in any way be affected or impaired thereby.
The Bank of New York hereby accepts the trusts in this Indenture declared and
provided, upon the terms and conditions herein above set forth.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly
executed.
SANDISK CORPORATION
By: /s/ Frank Calderoni
-------------------
Name: Frank Calderoni
Title: Chief Financial Officer and Senior
Vice President of Finance and
Administration
By: /s/ Charles Van Orden
---------------------
Name: Charles Van Orden
Title: Vice President, Secretary and
General Counsel
THE BANK OF NEW YORK, as Trustee
By: /s/ Ming Shiang
---------------
Name: Ming Shiang
Title: Vice President
EXHIBIT A
Include only for Global Notes:
[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) (THE
"DEPOSITARY", WHICH TERM INCLUDES ANY SUCCESSOR DEPOSITARY FOR THE
CERTIFICATES) TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR IN SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITARY (AND ANY PAYMENT HEREIN IS MADE TO CEDE & CO. OR TO SUCH
OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITARY), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE &
CO., HAS AN INTEREST HEREIN.]
Include only for Notes that are Restricted Securities:
[THE NOTE EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS, AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED
STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, UNITED STATES PERSONS EXCEPT AS
SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE
HOLDER HEREOF OR OF ANY BENEFICIAL INTEREST HEREIN, (1) REPRESENTS THAT IT IS
(A) "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT), (B) AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE
501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT) ("INSTITUTIONAL ACCREDITED
INVESTOR") OR (C) A NON-U.S. PERSON; (2) AGREES THAT IT WILL NOT, PRIOR TO
EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THE NOTE EVIDENCED
HEREBY UNDER RULE 144(k) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION),
RESELL OR OTHERWISE TRANSFER THIS NOTE OR THE COMMON STOCK ISSUABLE UPON
CONVERSION OF THIS NOTE, OR ANY BENEFICIAL INTEREST HEREIN, EXCEPT (A) TO
SANDISK CORPORATION, OR ANY SUBSIDIARY THEREOF (OR THEIR RESPECTIVE SUCCESSORS),
(B) INSIDE THE UNITED STATES TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE
WITH RULE 144A UNDER THE SECURITIES ACT, (C) INSIDE THE UNITED STATES TO AN
INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE
BANK OF NEW YORK, AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS APPLICABLE), A SIGNED
LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE
RESTRICTIONS ON TRANSFER OF THE NOTES (THE FORM OF WHICH LETTER CAN BE OBTAINED
FROM SUCH TRUSTEE OR A SUCCESSOR TRUSTEE, AS APPLICABLE), (D) OUTSIDE THE UNITED
STATES IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT, (E) PURSUANT TO THE
EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF
AVAILABLE) OR (F) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED
EFFECTIVE UNDER THE SECURITIES ACT (AND WHICH CONTINUES TO BE EFFECTIVE AT THE
TIME OF SUCH TRANSFER); (3) PRIOR TO SUCH TRANSFER (OTHER THAN A TRANSFER
PURSUANT TO CLAUSES 2(A) OR 2(F) ABOVE), IT WILL FURNISH TO THE BANK OF NEW
YORK, AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS APPLICABLE) AND SANDISK CORPORATION
(OR ITS SUCCESSORS), SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS
THE TRUSTEE OR SANDISK CORPORATION (OR ITS SUCCESSORS) MAY REASONABLY REQUIRE TO
CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT;
AND (4) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE OR OF ANY
BENEFICIAL INTEREST HEREIN, IS TRANSFERRED (OTHER THAN A TRANSFEREE UNDER CLAUSE
1(F) ABOVE) A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN
CONNECTION WITH ANY TRANSFER OF THIS NOTE PRIOR TO THE EXPIRATION OF THE HOLDING
PERIOD APPLICABLE TO SALES OF THIS NOTE UNDER RULE 144(k) UNDER THE SECURITIES
ACT (OR ANY SUCCESSOR PROVISION), THE HOLDER MUST CHECK THE APPROPRIATE BOX SET
FORTH ON THE REVERSE HEREOF RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT
THIS CERTIFICATE TO THE BANK OF NEW YORK, AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS
APPLICABLE). THIS LEGEND WILL BE REMOVED UPON THE EARLIER OF THE TRANSFER OF THE
NOTES EVIDENCED HEREBY, OR ANY BENEFICIAL INTEREST THEREIN, PURSUANT TO CLAUSE
2(F) ABOVE OR UPON ANY TRANSFER OF THE NOTES EVIDENCED HEREBY, OR ANY BENEFICIAL
INTEREST THEREIN, UNDER RULE 144(k) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR
PROVISION). AS USED HEREIN, THE TERMS "UNITED STATES" AND "U.S. PERSON" HAVE THE
MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT. THE INDENTURE
CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF
THIS NOTE IN VIOLATION OF THE FOREGOING RESTRICTION.
SANDISK CORPORATION
4 1/2% CONVERTIBLE SUBORDINATED NOTE DUE 2006
CUSIP:
ISIN:
No. $
SanDisk Corporation, a corporation duly organized and validly existing under the
laws of the State of Delaware (herein called the "Company", which term includes
any successor corporation under the Indenture referred to on the reverse
hereof), for value received hereby promises to pay to or its
registered assigns, the principal sum of $ on November 15, 2006 at
the office or agency of the Company maintained for that purpose in accordance
with the terms of the Indenture, in such coin or currency of the United States
of America as at the time of payment shall be legal tender for the payment of
public and private debts, and to pay interest, semiannually on May 15 and
November 15 of each year, commencing May 15, 2002, on said principal sum at said
office or agency, in like coin or currency, at the rate per annum of 4 1/2 %,
from May 15 or November 15, as the case may be, next preceding the date of this
Note to which interest has been paid or duly provided for, unless the date
hereof is a date to which interest has been paid or duly provided for, in which
case from the date of this Note, or unless no interest has been paid or duly
provided for on the Notes, in which case from December 24, 2001, until payment
of said principal sum has been made or duly provided for. Notwithstanding the
foregoing, if the date hereof is after any May 1 or November 1, as the case may
be, and before the following May 15 or November 15, this Note shall bear
interest from such May 15 or November 15; provided that if the Company shall
default in the payment of interest due on such May 15 or November 15, then this
Note shall bear interest from the next preceding May 15 or November 15 to which
interest has been paid or duly provided for or, if no interest has been paid or
duly provided for on the Note, from December 24, 2001. Except as otherwise
provided in the Indenture, the interest payable on this Note pursuant to the
Indenture on any May 15 or November 15 will be paid to the Person entitled
thereto as it appears in the Note register at the close of business on the
record date, which shall be the May 1 or November 1 (whether or not a Business
Day) next preceding such May 15 or November 15, as provided in the Indenture;
provided that any such interest not punctually paid or duly provided for shall
be payable as provided in the Indenture. Interest may, at the option of the
Company, be paid either (i) by check mailed to the registered address of such
Person (provided that the holder of Notes with an aggregate principal amount in
excess of $2,000,000 shall, at the written election (timely made and containing
appropriate wire transfer information) of such holder, be paid by wire transfer
of immediately available funds) or (ii) by transfer to an account maintained by
such Person located in the United States; provided that payments to the
Depositary will be made by wire transfer of immediately available funds to the
account of the Depositary or its nominee.
Reference is made to the further provisions of this Note set forth on the
reverse hereof, including, without limitation, provisions subordinating the
payment of principal of and premium, if any, and interest on the Notes to the
prior payment in full of all Senior Indebtedness, as defined in the Indenture,
and provisions giving
the holder of this Note the right to convert this Note into Common Stock of the
Company on the terms and subject to the limitations referred to on the reverse
hereof and as more fully specified in the Indenture. Such further provisions
shall for all purposes have the same effect as though fully set forth at this
place.
This Note shall be deemed to be a contract made under the laws of the State of
New York, and for all purposes shall be construed in accordance with and
governed by the laws of the State of New York, without regard to conflicts of
laws principles thereof.
This Note shall not be valid or become obligatory for any purpose until the
certificate of authentication hereon shall have been manually signed by the
Trustee or a duly authorized authenticating agent under the Indenture.
IN WITNESS WHEREOF, the Company has caused this Note to be duly executed.
SANDISK CORPORATION
By:
Name:
Title:
Attest:
By:
Name:
Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes described in the within-named Indenture.
THE BANK OF NEW YORK, as Trustee
Dated:
By:
Authorized Signatory
,or
By:
As Authenticating Agent
(if different from Trustee)
FORM OF REVERSE OF NOTE
SANDISK CORPORATION
4 1/2% CONVERTIBLE SUBORDINATED NOTE DUE 2006
This Note is one of a duly authorized issue of Notes of the Company, designated
as its 4 1/2% Convertible Subordinated Notes due 2006 (herein called the
"Notes"), unlimited in aggregate principal amount, all issued or to be issued
under and pursuant to an Indenture dated as of December 24, 2001 (herein called
the "Indenture"), between the Company and The Bank of New York, as trustee
(herein called the "Trustee"), to which Indenture and all indentures
supplemental thereto reference is hereby made for a description of the rights,
limitations of rights, obligations, duties and immunities thereunder of the
Trustee, the Company and the holders of the Notes.
In case an Event of Default shall have occurred and be continuing, the principal
of, premium, if any, and accrued interest on all Notes may be declared by either
the Trustee or the holders of not less than 25% in aggregate principal amount of
the Notes then outstanding, and upon said declaration shall become, due and
payable, in the manner, with the effect and subject to the conditions provided
in the Indenture.
The Indenture contains provisions permitting the Company and the Trustee, with
the consent of the holders of not less than a majority in aggregate principal
amount of the Notes at the time outstanding, to execute supplemental indentures
adding any provisions to or changing in any manner or eliminating any of the
provisions of the Indenture or of any supplemental indenture or modifying in any
manner the rights of the holders of the Notes; provided that no such
supplemental indenture shall (i) extend the fixed maturity of any Note, or
reduce the rate or extend the time of payment of interest thereon, or reduce the
principal amount thereof or premium, if any, thereon, or reduce any amount
payable upon redemption thereof, or impair the right of any Noteholder to
institute suit for the payment thereof, or make the principal thereof or
interest or premium, if any, thereon payable in any coin or currency other than
that provided in the Notes, or modify the provisions of the Indenture with
respect to the subordination of the Notes in a manner adverse to the Noteholders
in any material respect, or change the obligation of the Company to redeem any
Note upon the happening of a Fundamental Change in a manner adverse to the
holder of the Notes, or impair the right to convert the Notes into Common Stock
subject to the terms set forth in the Indenture, including Section 15.06
thereof, without the consent of the holder of each Note so affected, or (ii)
modify any of the provisions of Section 11.02 or Section 7.07 thereof, except to
increase any such percentage or to provide that certain other provisions of the
Indenture cannot be modified or waived without the consent of the holder of each
Note so affected, or change any obligation of the Company to maintain an office
or agency in the places and for the purposes set forth in Section 5.01 thereof,
or reduce the aforesaid percentage of Notes, the holders of which are required
to consent to any such supplemental indenture, in each case, without the consent
of the holders of all Notes then outstanding.
Subject to the provisions of the Indenture, the holders of a majority in
aggregate principal amount of the Notes at the time outstanding may on behalf of
the holders of all of the Notes waive any past default or Event of Default under
the Indenture and its consequences except a default in the payment of interest
or any premium on, or the principal of, any of the Notes, or a failure by the
Company to convert any Notes into Common Stock of the Company, or a default in
the payment of the redemption price pursuant to Article 3 of the Indenture, or a
default in respect of a covenant or provisions of the Indenture which under
Article 11 of the Indenture cannot be modified without the consent of the
holders of each or all Notes then outstanding or affected thereby. Any such
consent or waiver by the holder of this Note (unless revoked as provided in the
Indenture) shall be conclusive and binding upon such holder and upon all future
holders and owners of this Note and any Notes which may be issued in exchange or
substitution hereof, irrespective of whether or not any notation thereof is made
upon this Note or such other Notes.
The indebtedness evidenced by the Notes is, to the extent and in the manner
provided in the Indenture, expressly subordinated and subject in right of
payment to the prior payment in full of all Senior Indebtedness of the Company,
whether outstanding at the date of the Indenture or thereafter incurred, and
this Note is issued subject to the provisions of the Indenture with respect to
such subordination. Each holder of this Note, by accepting the same, agrees to
and shall be bound by such provisions and authorizes the Trustee on its behalf
to take such action as may be necessary or appropriate to effectuate the
subordination so provided and appoints the Trustee his attorney-in-fact for such
purpose.
No reference herein to the Indenture and no provision of this Note or of the
Indenture shall alter or impair the obligation of the Company, which is absolute
and unconditional, to pay the principal of and any premium and interest on this
Note at the place, at the respective times, at the rate and in the coin or
currency herein prescribed.
Interest on the Notes shall be computed on the basis of a 360-day year of twelve
30-day months.
The Notes are issuable in fully registered form, without coupons, in
denominations of $1,000 principal amount and any multiple of $1,000. At the
office or agency of the Company referred to on the face hereof, and in the
manner and subject to the limitations provided in the Indenture, without payment
of any service charge but with payment of a sum sufficient to cover any tax,
assessment or other governmental charge that may be imposed in connection with
any registration or exchange of Notes, Notes may be exchanged for a like
aggregate principal amount of Notes of any other authorized denominations.
At any time on or after November 17, 2004, and prior to maturity, the Notes may
be redeemed at the option of the Company, in whole or in part, upon mailing a
notice of such redemption not less than 30 days but not more than 60 days before
the date fixed for redemption to the holders of Notes at their last registered
addresses, all as provided in the Indenture, at the following optional
redemption prices (expressed as percentages of the principal amount), together
in each case with accrued and unpaid interest to, but excluding, the date fixed
for redemption:
If redeemed during the period beginning November 17, 2004 and ending
on November 14, 2005, at a redemption price of 101.800%, if redeemed
during the 12-month period beginning November 15:
--------------------------------------------------
Year Redemption Price
--------------------------------------------------
2005 100.900%
--------------------------------------------------
and 100% if redeemed on or after November 15, 2006;
provided that if the date fixed for redemption is on a May 15 or November 15,
then the interest payable on such date shall be paid to the holder of record on
the preceding May 1 or November 1, respectively.
The Company may not give notice of any redemption of the Notes if a default in
the payment of interest or premium, if any, on the Notes has occurred and is
continuing.
The Notes are not subject to redemption through the operation of any sinking
fund.
If a Fundamental Change occurs at any time prior to maturity of the Notes, this
Note will be redeemable on the 30th day after notice thereof (the "Repurchase
Date") at the option of the holder of this Note at a redemption price equal to
100% of the principal amount thereof, together with accrued interest to (but
excluding) the date of redemption; provided that, if such Repurchase Date is a
May 15 or November 15, the interest payable on such date shall be paid to the
holder of record of this Note on the preceding May 1 or November 1,
respectively. The Notes will be redeemable in multiples of $1,000 principal
amount. The Company shall mail to all holders of record of the Notes a notice of
the occurrence of a Fundamental Change and of the redemption right arising as a
result thereof on or before the 10th day after the occurrence of such
Fundamental Change. For a Note to be so redeemed at the option of the holder,
the Company must receive at the office or agency of the Company maintained for
that purpose in accordance with the terms of the Indenture, such Note with the
form entitled "Option to Elect Repayment Upon a Fundamental Change" on the
reverse thereof duly completed, together with such Note, duly endorsed for
transfer, on or before the 30th day after the date of such notice of a
Fundamental Change (or if such 30th day is not a Business Day, the immediately
succeeding Business Day).
Subject to the provisions of the Indenture, the holder hereof has the right, at
its option, at any time after the original issuance of any Notes through the
close of business on the Business Day immediately preceding the final maturity
date of the Notes, or, as to all or any portion hereof called for redemption,
prior to the close of business on the Business Day immediately preceding the
date fixed for redemption (unless the Company shall default in payment due upon
redemption thereof), to convert each $1,000 principal amount of the Notes into
54.2535 shares of the Company's Common Stock (the "Conversion Rate"), as such
shares shall be constituted at the date of conversion and subject to adjustment
from time to time as provided in the Indenture, upon surrender of this Note,
together with a conversion notice as provided in the Indenture (the form
entitled "Conversion Notice" on the reverse hereof), to the Company at the
office or agency of the
Company maintained for that purpose in accordance with the terms of the
Indenture, or at the option of such holder, the Corporate Trust Office, and,
unless the shares issuable on conversion are to be issued in the same name as
this Note, duly endorsed by, or accompanied by instruments of transfer in form
satisfactory to the Company duly executed by, the holder or by his duly
authorized attorney.
No adjustment in respect of interest on any Note converted or dividends on any
shares issued upon conversion of such Note will be made upon any conversion
except as set forth in the next sentence. If this Note (or portion hereof) is
surrendered for conversion during the period from the close of business on any
record date for the payment of interest to the close of business on the Business
Day immediately preceding the following interest payment date and has not been
called for redemption by the Company on a redemption date that occurs during
such period, this Note (or portion hereof being converted) must be accompanied
by payment, in immediately available funds or other funds acceptable to the
Company, of an amount equal to the interest payable on such interest payment
date on the principal amount being converted; provided that no such payment
shall be required if there shall exist at the time of conversion a default in
the payment of interest on the Notes.
No fractional shares will be issued upon any conversion, but an adjustment and
payment in cash will be made, as provided in the Indenture, in respect of any
fraction of a share which would otherwise be issuable upon the surrender of any
Note or Notes for conversion.
A Note in respect of which a holder is exercising its right to require
redemption upon a Fundamental Change may be converted only if such holder
withdraws its election to exercise such right in accordance with the terms of
the Indenture. Any Notes called for redemption, unless surrendered for
conversion by the holders thereof on or before the close of business on the
Business Day preceding the date fixed for redemption, may be deemed to be
redeemed from the holders of such Notes for an amount equal to the applicable
redemption price, together with accrued but unpaid interest to (but excluding)
the date fixed for redemption, by one or more investment banks or other
purchasers who may agree with the Company (i) to purchase such Notes from the
holders thereof and convert them into shares of the Company's Common Stock and
(ii) to make payment for such Notes as aforesaid to the Trustee in trust for the
holders.
Upon due presentment for registration of transfer of this Note at the office or
agency of the Company maintained for that purpose in accordance with the terms
of the Indenture, a new Note or Notes of authorized denominations for an equal
aggregate principal amount will be issued to the transferee in exchange thereof;
subject to the limitations provided in the Indenture, without charge except for
any tax, assessment or other governmental charge imposed in connection
therewith.
The Company, the Trustee, any authenticating agent, any paying agent, any
conversion agent and any Note registrar may deem and treat the registered holder
hereof as the absolute owner of this Note (whether or not this Note shall be
overdue and notwithstanding any notation of ownership or other writing hereon
made by anyone other than the Company or any Note registrar) for the purpose of
receiving payment hereof, or on account hereof, for the conversion hereof and
for all other purposes, and neither the Company nor the Trustee nor any other
authenticating agent nor any paying agent nor other conversion agent nor any
Note registrar shall be affected by any notice to the contrary. All payments
made to or upon the order of such registered holder shall, to the extent of the
sum or sums paid, satisfy and discharge liability for monies payable on this
Note.
No recourse for the payment of the principal of or any premium or interest on
this Note, or for any claim based hereon or otherwise in respect hereof, and no
recourse under or upon any obligation, covenant or agreement of the Company in
the Indenture or any supplemental indenture or in any Note, or because of the
creation of any indebtedness represented thereby, shall be had against any
incorporator, stockholder, employee, agent, officer or director or subsidiary,
as such, past, present or future, of the Company or of any successor
corporation, either directly or through the Company or any successor
corporation, whether by virtue of any constitution, statute or rule of law or by
the enforcement of any assessment or penalty or otherwise, all such liability
being, by acceptance hereof and as part of the consideration for the issue
hereof, expressly waived and released.
This Note shall be deemed to be a contract made under the laws of New York, and
for all purposes shall be construed in accordance with the laws of New York,
without regard to conflicts of laws principles thereof.
Terms used in this Note and defined in the Indenture are used herein as therein
defined.
ABBREVIATIONS
The following abbreviations, when used in the inscription of the face of this
Note, shall be construed as though they were written out in full according to
applicable laws or regulations.
TEN COM - as tenants in common UNIF GIFT MIN ACT -___ Custodian ___
TEN ENT - as tenant by the entireties (Cust) (Minor)
JT TEN - as joint tenants with right
of survivorship and not as under Uniform Gifts to Minors Act
tenants in common
(State)
Additional abbreviations may also be used though not in the above list
CONVERSION NOTICE
TO: SANDISK CORPORATION
THE BANK OF NEW YORK
The undersigned registered owner of this Note hereby irrevocably exercises the
option to convert this Note, or the portion thereof (which is $1,000 or a
multiple thereof) below designated, into shares of Common Stock of SanDisk
Corporation in accordance with the terms of the Indenture referred to in this
Note, and directs that the shares issuable and deliverable upon such conversion,
together with any check in payment for fractional shares and any Notes
representing any unconverted principal amount hereof, be issued and delivered to
the registered holder hereof unless a different name has been indicated below.
If shares or any portion of this Note not converted are to be issued in the name
of a person other than the undersigned, the undersigned will provide the
appropriate information below and pay all transfer taxes payable with respect
thereto. Any amount required to be paid by the undersigned on account of
interest accompanies this Note.
Dated:
Signature(s)
Signature(s) must be guaranteed
by an "eligible guarantor
institution" meeting the
requirements of the Note
registrar, which requirements
include membership or
participation in the Security
Transfer Agent Medallion
Program ("STAMP") or such other
"signature guarantee program"
as may be determined by the
Note registrar in addition to,
or in substitution for, STAMP,
all in accordance with the
Securities Exchange Act of
1934, as amended.
Signature Guarantee
Fill in the registration of shares of Common Stock if to be issued, and Notes
if to be delivered, other than to and in the name of the registered holder:
(Name)
(Street Address)
(City, State and Zip Code)
Please print name and address
Principal amount to be converted
(if less than all):
$
Social Security or Other Taxpayer
Identification Number:
OPTION TO ELECT REPAYMENT
UPON A FUNDAMENTAL CHANGE
TO: SANDISK CORPORATION
THE BANK OF NEW YORK
The undersigned registered owner of this Note hereby irrevocably acknowledges
receipt of a notice from SanDisk Corporation (the "Company") as to the
occurrence of a Fundamental Change with respect to the Company and requests and
instructs the Company to repay the entire principal amount of this Note, or the
portion thereof (which is $1,000 or a multiple thereof) below designated, in
accordance with the terms of the Indenture referred to in this Note at the
price of 100% of such entire principal amount or portion thereof, together with
accrued interest to, but excluding, such repayment date, to the registered
holder hereof.
Dated:
Signature(s)
NOTICE: The above signatures
of the holder(s) hereof must correspond with the name as written upon the face
of the Note in every particular without alteration or enlargement or any change
whatever.
Principal amount to be repaid
(if less than all):
$
Social Security or Other
Taxpayer Identification Number
ASSIGNMENT
For value received ______________________________________________hereby sell(s)
assign(s) and transfer(s) unto ________________________________________ (Please
insert social security or other Taxpayer Identification Number of assignee) the
within Note, and hereby irrevocably constitutes and appoints
_________________________________________ attorney to transfer said Note on the
books of the Company, with full power of substitution in the premises
In connection with any transfer of the Note prior to the expiration of the
holding period applicable to sales thereof under Rule 144(k) under the
Securities Act (or any successor provision) (other than any transfer pursuant
to a registration statement that has been declared effective under the
Securities Act), the undersigned confirms that such Note is being transferred:
To SanDisk Corporation or a subsidiary thereof; or
Inside the United States to a "qualified institutional buyer" in
compliance with Rule 144A under the Securities Act of 1933, as
amended; or
Inside the United States to an "institutional accredited investor"
that prior to such transfer has furnished to the Bank of New York, as
Trustee (or a successor trustee, as applicable) a signed letter
containing certain representations and agreements relating to the
restrictions on transfer of the Notes (in the form obtained from such
Trustee or successor trustee, as applicable); or
Outside the United States in compliance with Rule 904 under the
Securities Act, as amended; or
Pursuant to and in compliance with Rule 144 under the Securities Act
of 1933, as amended; or
Pursuant to a Registration Statement which has been declared effective
under the Securities Act of 1933, as amended, and which continues to
be effective at the time of transfer;
and unless the Note has been transferred to SanDisk Corporation or a subsidiary
thereof box above is checked, the undersigned confirms that such Note is not
being transferred to an "affiliate" of the Company as defined in Rule 144 under
the Securities Act of 1933, as amended (an "Affiliate").
Dated:
Signature(s)
Signature(s) must be
guaranteed by an "eligible
guarantor institution"
meeting the requirements of
the Note registrar, which
requirements include
membership or participation
in the Security Transfer
Agent Medallion Program
("STAMP") or such other
"signature guarantee program"
as may be determined by the
Note registrar in addition
to, or in substitution for,
STAMP, all in accordance with
the Securities Exchange Act
of 1934, as
amended.
Signature Guarantee
NOTICE: The signature of the conversion notice, the option to elect repayment
upon a Fundamental Change or the assignment must correspond with the name as
written upon the face of the Note in every particular without alteration or
enlargement or any change whatever.