EXHIBIT 4.1
================================================================================
Zero Coupon Convertible Subordinated Debentures due 2018
Aspect Telecommunications Corporation, Issuer
------------------------------------
INDENTURE
Dated as of August 10, 1998
----------------------------------
State Street Bank and Trust Company of California, N.A.,
Trustee
================================================================================
CROSS REFERENCE TABLE*
TIA Indenture
Section Section
- ---------- ---------
310 (a)(1).............................................. 7.10
(a)(2).............................................. 7.10
(a)(3).............................................. N.A.**
(a)(4).............................................. N.A.
(b)................................................. 7.08; 7.10
(c)................................................. N.A.
3.11(a)................................................. 7.11
(b)................................................. 7.11
(c)................................................. N.A.
3.12(a)................................................. 2.05
(b)................................................. 12.03
(c)................................................. 12.03
(d)................................................. 7.06
3.13(a)................................................. 7.06
(b)(1).............................................. N.A.
(b)(2).............................................. 7.06
(c)................................................. 12.02
(d)................................................. 7.06
3.14(a)................................................. 4.02; 12.02
(b)................................................. N.A.
(c)(1).............................................. 12.04
(c)(2).............................................. 12.04
(c)(3).............................................. N.A.
(d)................................................. N.A.
(e)................................................. 12.05
(f)................................................. 4.03
3.15(a)................................................. 7.01
(b)................................................. 7.05; 12.02
(c)................................................. 7.01
(d)................................................. 7.01
(e)................................................. 6.11
3.16(a)(last sentence).................................. 2.08
(a)(1)(A)........................................... 6.05
(a)(1)(B)........................................... 6.04
(a)(2).............................................. N.A.
(b)................................................. 6.07
3.17(a)(1).............................................. 6.08
(a)(2).............................................. 6.09
(b)................................................. 2.04
3.18(a)................................................. 12.01
* Note: This Cross Reference Table shall not, for any purpose, be deemed
to be part of the Indenture
** Note: N.A. means Not Applicable
TABLE OF CONTENTS/1/
PAGE
----
ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE....................................................... 1
Section 1.01. Definitions....................................................................... 1
Section 1.02. Other Definitions................................................................. 8
Section 1.03. Incorporation by Reference of Trust Indenture Act................................. 8
Section 1.04. Rules of Construction............................................................. 9
ARTICLE 2 THE SECURITIES................................................................................... 9
Section 2.01. Form and Dating................................................................... 9
Section 2.02. Execution and Authentication...................................................... 10
Section 2.03. Registrar, Paying Agent and Conversion Agent...................................... 10
Section 2.04. Paying Agent to Hold Money and Securities in Trust................................ 11
Section 2.05. Holder Lists...................................................................... 11
Section 2.06. Exchange and Registration of Transfer of Securities; Restrictions on Transfers;
Depositary....................................................................... 11
Section 2.07. Replacement Securities............................................................ 18
Section 2.08. Outstanding Securities; Determinations of Holders' Action......................... 18
Section 2.09. Temporary Securities.............................................................. 19
Section 2.10. Cancellation...................................................................... 19
Section 2.11. Persons Deemed Owners............................................................. 20
ARTICLE 3 REDEMPTION AND PURCHASES......................................................................... 20
Section 3.01. Right to Redeem; Notices to Trustee............................................... 20
Section 3.02. Selection of Securities to be Redeemed............................................ 20
Section 3.03. Notice of Redemption.............................................................. 21
Section 3.04. Effect of Notice of Redemption.................................................... 22
Section 3.05. Deposit of Redemption Price....................................................... 22
Section 3.06. Securities Redeemed in Part....................................................... 22
Section 3.07. Conversion Arrangement on Call for Redemption..................................... 23
Section 3.08. Purchase of Securities at Option of the Holder.................................... 23
Section 3.09. Redemption at Option of the Holder upon a Fundamental Change...................... 29
Section 3.10. Effect of Purchase Notice or Fundamental Change Redemption Notice................. 30
Section 3.11. Deposit of Purchase Price or Fundamental Change Redemption Price.................. 31
Section 3.12. Securities Purchased in Part...................................................... 31
Section 3.13. Covenant to Comply with Securities Laws upon Purchase of Securities............... 31
Section 3.14. Repayment to the Company.......................................................... 31
- -------------------------
/1/ This Table of Contents shall not, for any purpose, be deemed to be part
of the Indenture.
-i-
TABLE OF CONTENTS
PAGE
----
ARTICLE 4 COVENANTS........................................................................................ 32
Section 4.01. Payment of Securities............................................................. 32
Section 4.02. Financial Information; SEC Reports................................................ 32
Section 4.03. Compliance Certificate............................................................ 33
Section 4.04. Further Instruments and Acts...................................................... 33
Section 4.05. Maintenance of Office or Agency................................................... 33
Section 4.06. Existence......................................................................... 34
Section 4.07. Maintenance of Properties......................................................... 34
Section 4.08. Payment of Taxes and Other Claims................................................. 34
ARTICLE 5 SUCCESSOR CORPORATION............................................................................ 35
Section 5.01. When the Company May Merge or Transfer Assets..................................... 35
ARTICLE 6 DEFAULTS AND REMEDIES............................................................................ 36
Section 6.01. Events of Default................................................................. 36
Section 6.02. Acceleration...................................................................... 37
Section 6.03. Other Remedies.................................................................... 37
Section 6.04. Waiver of Past Defaults........................................................... 37
Section 6.05. Control by Majority............................................................... 37
Section 6.06. Limitation on Suits............................................................... 38
Section 6.07. Rights of Holders to Receive Payment.............................................. 38
Section 6.08. Collection Suit by Trustee........................................................ 38
Section 6.09. Trustee May File Proofs of Claim.................................................. 38
Section 6.10. Priorities........................................................................ 39
Section 6.11. Undertaking for Costs............................................................. 40
Section 6.12. Waiver of Stay, Extension or Usury Laws........................................... 40
ARTICLE 7 TRUSTEE.......................................................................................... 41
Section 7.01. Duties of Trustee................................................................. 41
Section 7.02. Rights of Trustee................................................................. 42
Section 7.03. Individual Rights of Trustee...................................................... 42
Section 7.04. Trustee's Disclaimer.............................................................. 42
Section 7.05. Notice of Defaults................................................................ 43
Section 7.06. Reports by Trustee to Holders..................................................... 43
Section 7.07. Compensation and Indemnity........................................................ 43
Section 7.08. Replacement of Trustee............................................................ 44
-ii-
TABLE OF CONTENTS
PAGE
----
Section 7.09. Successor Trustee by Merger....................................................... 45
Section 7.10. Eligibility; Disqualification..................................................... 45
Section 7.11. Preferential Collection of Claims Against Company................................. 45
ARTICLE 8 DISCHARGE OF INDENTURE........................................................................... 45
Section 8.01. Discharge of Liability on Securities.............................................. 45
Section 8.02. Repayment to the Company.......................................................... 46
ARTICLE 9 AMENDMENTS....................................................................................... 46
Section 9.01. Without Consent of Holders........................................................ 46
Section 9.02. With Consent of Holders........................................................... 47
Section 9.03. Compliance with Trust Indenture Act............................................... 48
Section 9.04. Revocation and Effect of Consents, Waivers and Actions............................ 48
Section 9.05. Notation on or Exchange of Securities............................................. 48
Section 9.06. Trustee to Sign Supplemental Indentures........................................... 48
Section 9.07. Effect of Supplemental Indentures................................................. 48
ARTICLE 10 SUBORDINATION................................................................................... 48
Section 10.01. Agreement of Subordination........................................................ 48
Section 10.02. Payments to Holders............................................................... 49
Section 10.03. Subrogation of Securities......................................................... 52
Section 10.04. Authorization by Holders.......................................................... 53
Section 10.05. Notice to Trustee................................................................. 53
Section 10.06. Trustee's Relation to Senior Indebtedness......................................... 54
Section 10.07. No Impairment of Subordination.................................................... 54
Section 10.08. Reliance by Holders of Senior Indebtedness on Subordination Provisions............ 54
Section 10.09. Reinstatement of Subordination.................................................... 55
Section 10.10. Permitted Payments................................................................ 55
Section 10.11. Article Applicable to Paying Agents............................................... 55
Section 10.12. Treatment of Conversion Payments.................................................. 55
Section 10.13. Reliance on Judicial Order or Certificate of Liquidating Agent.................... 56
ARTICLE 11 CONVERSION...................................................................................... 56
Section 11.01. Conversion Privilege.............................................................. 56
Section 11.02. Conversion Procedure.............................................................. 56
Section 11.03. Fractional Shares................................................................. 57
Section 11.04. Taxes on Conversion............................................................... 57
-iii-
TABLE OF CONTENTS
PAGE
----
Section 11.05. Company to Provide Stock.......................................................... 58
Section 11.06. Adjustment for Change in Capital Stock............................................ 58
Section 11.07. Adjustment for Rights Issue....................................................... 59
Section 11.08. Adjustment for Other Distributions................................................ 59
Section 11.09. When Adjustment May be Deferred................................................... 62
Section 11.10. When No Adjustment Required....................................................... 63
Section 11.11. Notice of Adjustment.............................................................. 63
Section 11.12. Voluntary Increase................................................................ 63
Section 11.13. Notice of Certain Transactions.................................................... 63
Section 11.14. Effect of Reclassification, Consolidation, Merger or Sale......................... 64
Section 11.15. Company Determination Final....................................................... 64
Section 11.16. Trustee's Adjustment Disclaimer................................................... 64
Section 11.17. Simultaneous Adjustments.......................................................... 65
Section 11.18. Successive Adjustments............................................................ 65
Section 11.19. Rights Issued in Respect of Common Stock Issued Upon Conversion................... 65
Section 11.20. General Considerations............................................................ 66
ARTICLE 12 MISCELLANEOUS................................................................................... 66
Section 12.01. Trust Indenture Act............................................................... 66
Section 12.02. Notices........................................................................... 66
Section 12.03. Communication by Holders with other Holders....................................... 67
Section 12.04. Certificate and Opinion as to Conditions Precedent................................ 67
Section 12.05. Statements Required in Certificate or Opinion..................................... 68
Section 12.06. Separability Clause............................................................... 68
Section 12.07. Rules by Trustee, Paying Agent, Conversion Agent and Registrar.................... 68
Section 12.08. Governing Law..................................................................... 68
Section 12.09. No Recourse Against Others........................................................ 68
Section 12.10. Successors........................................................................ 68
Section 12.11. Multiple Originals................................................................ 68
EXHIBIT A--Form of Security
EXHIBIT B--Form of Institutional Accredited Investor letter
-iv-
INDENTURE, dated as of August 10, 1998, between Aspect Telecommunications
Corporation, a California corporation (the "Company"), and State Street Bank and
Trust Company of California, N.A., a national banking association organized and
existing under the laws of the United States of America (the "Trustee").
Each party agrees as follows for the benefit of the other parties and for the
equal and ratable benefit of the Holders of the Company's Zero Coupon
Convertible Subordinated Debentures due 2018:
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. DEFINITIONS.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control," 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.
"Applicable Price" means (i) in the event of a Fundamental Change in which
the holders of the Common Stock receive only cash, the amount of cash received
by the holder of one share of Common Stock and (ii) in the event of any other
Fundamental Change, the average of the last reported sale price for the Common
Stock (determined as set forth in the definition of Current Market Price) during
the ten Trading Days immediately prior to the record date for the determination
of the holders of Common Stock entitled to receive cash, securities, property or
other assets in connection with such Fundamental Change, or, if there is no such
record date, the date upon which the holders of Common Stock shall have the
right to receive such cash, securities, property or other assets in connection
with the Fundamental Change.
"Board of Directors" means either the board of directors of the Company or
any duly authorized committee of such board.
"Business Day" means each day of the year on which banking institutions are
not required or authorized to close in The City of New York or the city in which
the Corporate Trust Office is located.
"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 11.14, however, shares issuable upon conversion of the
Securities shall include only shares of Common Stock, par value of $.01 per
share, of the Company as such shares exist on the date of this Indenture or
shares of any class or classes resulting from any reclassification or
reclassifications thereof and which have no preference in respect of dividends
or of amounts payable in the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Company and which are not subject to redemption
by the Company; provided that if at any time there shall be more than one such
--------
resulting class, the shares of each such class then so issuable shall be
substantially in the proportion which the total number of shares of such class
resulting from all such reclassifications bears to the total number of shares of
all such classes resulting from all such reclassifications.
"Company" means the party named as the "Company" in the first paragraph of
this Indenture until a successor replaces it pursuant to the applicable
provisions of this Indenture and, thereafter, shall mean such successor. The
foregoing sentence shall likewise apply to any subsequent such successor or
successors.
"Company Request" or "Company Order" means a written request or order signed
in the name of the Company by its Chairman of the Board, a Vice Chairman, its
President or a Vice President, and by its Treasurer, an Assistant Treasurer, its
Secretary or an Assistant Secretary, and delivered to the Trustee.
"Conversion Rate" has the meaning specified in Section 11.01.
"Corporate Trust Office" means the principal office of the Trustee at which
at any particular time its corporate trust business shall be principally
administered, which office is, at the date as of which this Indenture is dated,
located at Library Tower, 633 West 5th Street, 12th Floor, Los Angeles,
California 90071, Attention: Corporate Trust Department (Aspect
Telecommunications Corporation - Zero Coupon Convertible Subordinated Debentures
due 2018).
"Current Market Price" per share of the Common Stock on any date of
determination means the average of the daily closing prices of the Common Stock
on the Nasdaq National Market for the five consecutive trading days ending on
and including such date of determination. The last reported sale price for each
day shall be (i) if the Common Stock is listed on the Nasdaq National Market,
the last reported sale price of Common Stock on the Nasdaq National Market, or
any similar system of automated dissemination of quotations of securities prices
then in common use, if so quoted, (ii) if the Common Stock is not listed or
admitted for trading as described in clause (i), the last reported sale price of
the Common Stock on the NYSE or if the Common Stock is listed or admitted for
trading on any other national securities exchange, the last sale price, or the
closing bid price if no sale occurred, of the Common Stock on the principal
securities exchange on which the Common Stock is listed, or (iii) if not quoted
or listed as described in clauses (i) or (ii), the mean between the high bid and
low asked quotations for Common Stock as reported by the National Quotation
Bureau Incorporated if at least two securities dealers have inserted both bid
and asked quotations for the Common Stock on at least five of the ten preceding
Trading Days. If none of the conditions set forth above is met, the last
reported sale price of Common Stock on any day or the average of such last
-2-
reported sale prices for any period shall be the fair market value of the Common
Stock as determined by a member firm of the NYSE selected by the Company.
"Custodian" shall mean State Street Bank and Trust Company of California,
N.A., as custodian with respect to the Securities in global form, or any
successor entity thereto.
"Default" means any event which is, or after notice or passage of time or
both would be, an Event of Default.
"Depositary" means, with respect to the Securities issuable or issued in
whole or in part in global form, the Person specified in Section 2.06 as the
Depositary with respect to the Securities, 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 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 such Senior Indebtedness to exercise the rights of Designated
Senior Indebtedness. If any payment made to any holder of any Designated Senior
Indebtedness or its Representative with respect to such Designated Senior
Indebtedness is rescinded or must otherwise be returned by such holder or
Representative upon the insolvency, bankruptcy or reorganization of the Company
or otherwise, the reinstated Indebtedness of the Company arising as a result of
such rescission or return shall constitute Designated Senior Indebtedness
effective as of the date of such rescission or return.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and the
rules and regulations of the SEC promulgated thereunder.
"Fundamental Change" means the occurrence of any transaction or event in
connection with which all or substantially all Common Stock shall be exchanged
for, converted into, acquired for or constitute solely the right to receive
(whether by means of an exchange offer, liquidation, tender offer,
consolidation, merger, combination, reclassification, recapitalization or
otherwise) consideration which is not all or substantially all common stock
listed (or, upon consummation of or immediately following such transaction or
event which will be listed) on a United States national securities exchange or
approved for quotation on the Nasdaq National Market or any similar United
States system of automated dissemination of quotations of securities prices.
"Holder" means a Person in whose name a Security is registered on the
Registrar's books.
"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,
-3-
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), (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 (i) required, in conformity with
generally accepted accounting principles, to be accounted for as capitalized
lease obligations on the balance sheet of such Person, or (ii) required, in
conformity with generally accepted accounting principles, to be accounted for as
an operating lease, provided either (A) such operating lease requires, at the
end of the term thereof, that such Person make any payment other than accrued
periodic rent in the event that such Person does not acquire the leased real
property and related fixtures subject to such lease, or (B) such Person has an
option to acquire the leased real property and related fixtures, whether such
option is exercisable at any time or under specific circumstances, (d) all
obligations of such Person (contingent or otherwise) with respect to an interest
rate swap, cap or collar agreement or other 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 (d) 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 Indenture, as amended or supplemented from time to
time in accordance with the terms hereof.
"Initial Purchasers" means Morgan Stanley & Co. Incorporated and Credit
Suisse First Boston Corporation.
"Institutional Accredited Investor" means an institutional "accredited
investor" within the meaning of Rule 501(a)(1), (2), (3) or (7) under the
Securities Act.
"Issue Date" of any Security means the date on which the Security was
originally issued or deemed issued as set forth on the face of the Security.
"Issue Price" of any Security means, in connection with the original issuance
of such Security, the initial issue price at which the Security is issued as set
forth on the face of the Security.
"Legal Holiday" is any day other than a Business Day. If any specified date
(including a date for giving notice) is a Legal Holiday, the action shall be
taken on the next succeeding date that is not a Legal Holiday, and to the extent
applicable no Original Issue Discount or interest, if any, shall accrue for the
intervening period.
-4-
"Liquidated Damages" shall have the meaning specified in the Registration
Rights Agreement.
"Nasdaq National Market" means the electronic inter-dealer quotation system
operated by Nasdaq Stock Market, Inc., a subsidiary of the National Association
of Securities Dealers, Inc.
"NYSE" means The New York Stock Exchange, Inc.
"Officer" means the Chairman of the Board, any Vice Chairman, the President,
any Vice President, the Treasurer or the Secretary or any Assistant Treasurer or
Assistant Secretary of the Company.
"Officers' Certificate" means a written certificate containing the
information specified in Sections 12.04 and 12.05, signed in the name of the
Company by its Chairman of the Board, a Vice Chairman, its President or a Vice
President, and by its Treasurer, an Assistant Treasurer, its Secretary or an
Assistant Secretary, and delivered to the Trustee.
"Opinion of Counsel" means a written opinion containing the information
specified in Sections 12.04 and 12.05, from legal counsel who is acceptable to
the Trustee. The counsel may be an employee of, or counsel to, the Company or
the Trustee.
"Original Issue Discount" of any Security means the difference between the
Issue Price and the Principal Amount of the Security as set forth on the face of
the Security. For purposes of this Indenture and the Securities, accrual of
Original Issue Discount shall be calculated on the basis of a 360 day year of
twelve 30 day months.
"Payment Blockage Notice" has the meaning specified in Section 10.02.
"Person" means any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization, or government or any agency or political subdivision thereof.
"Portal Market" means The Portal Market operated by the National Association
of Securities Dealers, Inc. or any successor thereto.
"Principal" or "Principal Amount" of a Security means the Principal Amount as
set forth on the face of such Security, or on Schedule A thereto in the case of
a Security in global form.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"Redemption Date" means a date specified for redemption of the Securities
(other than redemption upon a Fundamental Change at the option of the Holder) in
accordance with the terms of the Securities and Section 3.01 of this Indenture.
"Redemption Price" shall have the meaning set forth in paragraph 5 of the
Securities.
-5-
"Reference Market Price" shall initially mean $18 11/12 and in the event
of any adjustment to the Conversion Rate pursuant to Article 11, the Reference
Market Price shall be adjusted to equal the initial Reference Market Price
multiplied by a fraction the numerator of which is the Conversion Rate specified
in the form of Security attached hereto as Exhibit A (without regard to any
---------
adjustment thereto), and the denominator of which is the Conversion Rate
following such adjustment.
"Registration Rights Agreement" means that certain Registration Rights
Agreement, dated as of the date hereof, between the Company and the Initial
Purchasers.
"Representative" means the (a) indenture trustee or other trustee, agent or
representative for any 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.
"Rule 144A" means Rule 144A as promulgated under the Securities Act, or any
successor rule.
"Rule 144(k)" means Rule 144(k) as promulgated under the Securities Act, or
any successor rule.
"SEC" means the Securities and Exchange Commission.
"Securities" means the Zero Coupon Convertible Subordinated Debentures due
2018.
"Securities Act" means the Securities Act of 1933, as amended, and the rules
and regulations of the SEC promulgated thereunder.
"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), rent and end of term
payments payable on or in connection with, and, to the extent not included in
the foregoing, all amounts payable as fees, costs, expenses, liquidated damages,
indemnities, repurchase and other put obligations and other amounts to the
extent 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). Notwithstanding the foregoing,
the term Senior Indebtedness shall not include (i) Indebtedness evidenced by the
Securities, (ii) 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, (iii) accounts payable or other indebtedness to trade creditors created
or assumed by the Company in the ordinary course of business and (iv) any
particular Indebtedness in which the instrument creating or evidencing the same
or the assumption or guarantee thereof expressly provides that such
-6-
Indebtedness shall not be senior in right of payment to, or is pari passu with,
or is subordinated or junior to, the Securities. 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. If any payment made to any holder
of any Senior Indebtedness or its Representative with respect to such Senior
Indebtedness is rescinded or must otherwise be returned by such holder or
Representative upon the insolvency, bankruptcy or reorganization of the Company
or otherwise, the reinstated Indebtedness of the Company arising as a result of
such rescission or return shall constitute Senior Indebtedness effective as of
the date of such rescission or return.
"Significant Subsidiary" means, with respect to any Person, a Subsidiary of
such Person organized under the laws of the United States of America, any state
thereof, or the District of Columbia that would constitute a "significant
subsidiary" as such term is defined under Rule 1-02 of Regulation S-X of the
SEC.
"Stated Maturity", when used with respect to any Security, means the date
specified in such Security as the fixed date on which an amount equal to the
Principal of such Security is due and payable.
"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 entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by such
Person or one or more of the other subsidiaries of that Person (or a combination
thereof) and (ii) any partnership (a) the sole general partner or managing
general partner of which is such Person or a subsidiary of such Person or (b)
the only general partners of which are such Person or of one or more
subsidiaries of such Person (or any combination thereof).
"TIA" means the Trust Indenture Act of 1939, as amended, as in effect on the
date of this Indenture, except as provided in Section 9.03.
"Trading Day" means a day during which trading in securities generally occurs
on the Nasdaq National Market or, if the applicable security is not quoted on
the Nasdaq National Market, on the NYSE, or if the applicable security is not
listed on the NYSE, on the principal other national or regional securities
exchange on which the applicable security is then listed or, if the applicable
security is not listed on a national or regional securities exchange, on the
principal other market on which the applicable security is then traded.
"Trust Officer" means any officer of the Trustee assigned by the Trustee to
administer its corporate trust matters.
"Trustee" means the party named as the "Trustee" in the first paragraph of
this Indenture until a successor replaces it pursuant to the applicable
provisions of this Indenture and, thereafter, shall
-7-
mean such successor. The foregoing sentence shall likewise apply to any
subsequent such successor or successors.
"Voting Stock" means stock of any class or classes, however designated,
having ordinary voting power for the election of a majority of the board of
directors of a corporation, other than stock having such power only by reason of
the occurrence of a contingency.
SECTION 1.04. OTHER DEFINITIONS.
Defined in
Term Section
- -------------------------------------------------- ----------
"Bankruptcy Law".................................. 6.01
"Cash"............................................ 3.08(b)
"Company Notice".................................. 3.08(e)
"Company Notice Date"............................. 3.08(c)
"Conversion Agent"................................ 2.03
"Expiration Time"................................. 11.08(c)
"Event of Default"................................ 6.01
"Fundamental Change Redemption Date".............. 3.09(a)
"Fundamental Change Redemption Notice"............ 3.09(a)
"Fundamental Change Redemption Price"............. 3.09(a)
"Market Price".................................... 3.08(d)
"Notice of Default"............................... 6.01
"Over-allotment Option"........................... 2.02
"Paying Agent".................................... 2.03
"Purchase Date"................................... 3.08(a)
"Purchase Notice"................................. 3.08(a)
"Purchase Price".................................. 3.08(a)
"Purchased Shares"................................ 11.08(c)
"Registrar"....................................... 2.03
"Restricted Securities"........................... 2.06(d)
"Rights".......................................... 3.08(d)
"Rights Agreement"................................ 3.08(d)
"Sale Price"...................................... 3.08(d)
"Tender Expiration Time".......................... 11.08(d)
"Tender Purchased Shares"......................... 11.08(d)
SECTION 1.03. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT. Whenever
this Indenture refers to a provision of the TIA, the provision is incorporated
by reference in and made a part of this Indenture. The following TIA terms used
in this Indenture have the following meanings:
"Commission" means the SEC.
-8-
"Indenture Securities" means the Securities.
"Indenture Security Holder" means a Holder.
"Indenture to be Qualified" means this Indenture.
"Indenture Trustee" or "Institutional Trustee" means the Trustee.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rules have the
meanings assigned to them by such definitions.
SECTION 1.04. RULES OF CONSTRUCTION. Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned to
it in accordance with generally accepted accounting principles as in effect from
time to time;
(3) "or" is not exclusive;
(4) "including" means including, without limitation; and
(5) words in the singular include the plural, and words in the plural
include the singular.
ARTICLE 2
THE SECURITIES
SECTION 2.01. FORM AND DATING. The Securities and the Trustee's certificate
of authentication for the Securities shall be substantially in the form of
Exhibit A, which is a part of this Indenture. The Securities may have
- ---------
notations, legends or endorsements required by law, stock exchange rule or usage
(provided that any such notation, legend or endorsement required by usage is in
a form acceptable to the Company). The Company shall provide any such
notations, legends or endorsements to the Trustee in writing. Each Security
shall be dated the date of its authentication.
Any Security in global form shall represent such of the outstanding
Securities as shall be specified therein and shall provide that it shall
represent the aggregate amount of outstanding Securities from time to time
endorsed thereon and that the aggregate amount of outstanding Securities
represented thereby may from time to time be increased or reduced to reflect
transfers or exchanges permitted hereby. Any endorsement of a Security in
global form to reflect the amount of any increase or decrease in the amount of
outstanding Security 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 Security in accordance with this Indenture. Payment
of Principal
-9-
Amount, Issue Price, accrued Original Issue Discount, accrued Liquidated
Damages, if any, Redemption Price, Purchase Price, Fundamental Change Redemption
Price or interest, if any, on any Security in global form shall be made to the
Holder of such Security.
SECTION 2.02. EXECUTION AND AUTHENTICATION. The Securities shall be
executed on behalf of the Company by its Chairman of the Board, one of its Vice
Chairmen, its President or one of its Vice Presidents, and attested by its
Treasurer or Secretary or one of its Assistant Treasurers or one of its
Assistant Secretaries. The signature of any of these officers on the Securities
may be manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals who were
at any time the proper Officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of authentication of such Securities.
No Security shall be entitled to any benefit under this Indenture or be valid
or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein duly
executed by the Trustee by manual signature of an authorized officer, and such
certificate upon any Security shall be conclusive evidence, and the only
evidence, that such Security has been duly authenticated and delivered
hereunder.
The Trustee shall authenticate and deliver Securities for original issue in
an aggregate Principal Amount of $490,000,000 upon a Company Order without any
further action by the Company (or an aggregate Principal Amount not to exceed
$564,000,000 if the over-allotment option set forth in Section 2 of the Purchase
Agreement dated August 5, 1998 (as amended from time to time by the parties
thereto) by and between the Company and the Initial Purchasers is exercised in
full). The aggregate Principal Amount of Securities outstanding at any time may
not exceed the amount set forth in the foregoing sentence, except as provided in
Section 2.07.
SECTION 2.03. REGISTRAR, PAYING AGENT AND CONVERSION AGENT. The Company
shall maintain an office or agency where Securities may be presented for
registration of transfer or for exchange ("Registrar"), an office or agency
where Securities may be presented for purchase or payment ("Paying Agent") and
an office or agency where Securities may be presented for conversion into Common
Stock ("Conversion Agent"). The Registrar shall keep a register of the
Securities and of their transfer and exchange. The Company may have one or more
co-registrars, one or more additional paying agents and one or more additional
conversion agents. The term Paying Agent includes any additional paying agent.
The term Conversion Agent includes any additional conversion or agent, including
any named pursuant to Section 4.05.
The Company shall enter into an appropriate agency agreement with any
Registrar, Paying Agent, Conversion Agent or co-registrar (if not the Trustee or
an Affiliate of the Trustee). The agreement shall implement the provisions of
this Indenture that relate to such agent and the relevant Security. The Company
shall notify the Trustee of the name and address of any such agent. If the
Company fails to maintain a Registrar, Paying Agent or Conversion Agent, the
Trustee shall act as
-10-
such and shall be entitled to appropriate compensation therefor pursuant to
Section 7.07. The Company or an Affiliate of the Company may act as Paying
Agent, Registrar, Conversion Agent or co-registrar.
The Company initially appoints the Trustee as Registrar, Conversion Agent and
Paying Agent in connection with the Securities.
SECTION 2.04. PAYING AGENT TO HOLD MONEY AND SECURITIES IN TRUST. Except as
otherwise provided herein, prior to or on each due date of payments in respect
of any Security, the Company shall deposit with the Paying Agent a sum of money
or securities sufficient to make such payments when such payments are due. The
Company shall require the Paying Agent (if not the Trustee) to agree in writing
that the Paying Agent shall hold in trust for the benefit of Holders or the
Trustee all money and securities held by the Paying Agent for the making of
payments in respect of the Securities and shall notify the Trustee of any
default by the Company in making any such payment. At any time during the
continuance of any such default, the Paying Agent shall, upon the written
request of the Trustee, forthwith pay to the Trustee all money and securities so
held in trust. If the Company or an Affiliate of the Company acts as Paying
Agent, it shall segregate the money and securities held by it as Paying Agent
and hold it as a separate trust fund. The Company at any time may require the
Paying Agent to pay all money and securities held by it to the Trustee and to
account for any funds and securities disbursed by it. Upon doing so, the Paying
Agent shall have no further liability for such money or securities.
SECTION 2.05. HOLDER LISTS. The Trustee shall preserve in as current a form
as is reasonably practicable the most recent list available to it of the names
and addresses of Holders. If the Trustee is not the Registrar, the Company
shall cause to be furnished to the Trustee at least semiannually on February 10
and August 10 a listing of Holders dated within 15 days of the date on which the
list is furnished and at such other times as the Trustee may request in writing
a list, in such form and as of such date as the Trustee may reasonably require,
of the names and addresses of Holders.
SECTION 2.06. EXCHANGE AND REGISTRATION OF TRANSFER OF SECURITIES;
RESTRICTIONS ON TRANSFERS; DEPOSITARY.
(a) Upon surrender for registration of transfer of any Security at any office
or agency of the Company designated as Registrar or co-registrar pursuant to
Section 2.03 and satisfaction of the requirements for such transfer set forth in
this Section 2.06, the Company shall execute, and the Trustee shall authenticate
and deliver, in the name of the designated transferee or transferees, one or
more new Securities of any authorized denominations and of a like aggregate
Principal Amount and bearing such restrictive legends as may be required by this
Indenture.
Securities may be exchanged for a like aggregate Principal Amount of
Securities of other authorized denominations. Securities to be exchanged shall
be surrendered at any office or agency to be maintained by the Company
designated as Registrar or co-registrar pursuant to Section 2.03 and the Company
shall execute and register, and the Trustee shall authenticate and deliver in
exchange
-11-
therefor, the Security or Securities which the Holder making the exchange shall
be entitled to receive, bearing registration numbers not contemporaneously
outstanding.
All Securities presented for registration of transfer or for exchange into
like Securities, purchase, redemption or conversion into Common Stock or payment
shall (if so required by the Company, the Trustee, the Registrar or any co-
registrar) be duly endorsed by, or be accompanied by a written instrument or
instruments of transfer in form satisfactory to the Company and the Trustee,
duly executed by the Holder or such Holder's attorney duly authorized in
writing.
No service charge shall be charged to the Holder for any exchange for like
Securities or registration of transfer of Securities, but the Company may
require payment of a sum sufficient to cover any tax, assessments or other
governmental charges that may be imposed in connection therewith.
None of the Company, the Trustee, the Registrar or any co-registrar shall be
required to exchange for like Securities or register a transfer of (a) any
Securities for a period of 15 days next preceding any selection of Securities to
be redeemed, or (b) any Securities or portions thereof selected or called for
redemption, or (c) any Securities or portion thereof surrendered for conversion
into Common Stock, or (d) any Securities or portion thereof surrendered for
purchase or redemption (and not withdrawn) pursuant to Sections 3.08 or 3.09,
respectively.
All Securities issued upon any transfer or exchange for like Securities shall
be valid obligations of the Company, evidencing the same debt, and entitled to
the same benefits under this Indenture as the Securities surrendered upon such
exchange or transfer.
(b) So long as the Securities are eligible for book-entry settlement with the
Depositary (as defined below), or unless otherwise required by law, all
Securities that are so eligible may be represented by a Security in global form
registered in the name of the Depositary or the nominee of the Depositary,
except as otherwise specified below. The transfer and exchange of beneficial
interests in such Security in global form shall be effected through the
Depositary in accordance with this Indenture and the procedures of the
Depositary therefor.
Securities that upon initial issuance are beneficially owned by QIBs will be
represented by one or more Securities in global form. Transfers of interests in
a Security in global form will be made in accordance with the standing
instructions and procedures of the Depositary and its participants. The Trustee
shall make appropriate endorsements to reflect increases or decreases in the
Principal Amounts of such Securities in global form as set forth on the face of
the Security in global form to reflect any such transfers.
Except as provided below, beneficial owners of a Security in global form
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 Securities in global
form.
-12-
(c) So long as the Securities are eligible for book-entry settlement, or
unless otherwise required by law, upon any transfer of a definitive Security to
a QIB in accordance with Rule 144A and upon receipt of the definitive Security
or Securities being so transferred, together with a certification, substantially
in the form of the reverse of the Security, from the transferor that the
transfer is being made in compliance with Rule 144A (or other evidence
satisfactory to the Trustee), the Trustee shall make an endorsement on the
Security in global form to reflect an increase in the aggregate Principal Amount
of the Securities represented by the Security in global form, the Trustee shall
cancel such Security or Securities in certificated form in accordance with the
standing instructions and procedures of the Depositary and the aggregate
Principal Amount of Securities represented by the Security in global form will
be increased accordingly; provided that no definitive Security, or portion
--------
thereof, in respect of which the Company or an Affiliate of the Company held any
beneficial interest shall be included in such Security in global form until such
definitive Security is freely tradable in accordance with Rule 144(k); provided
--------
further that the Trustee shall issue Securities in definitive form upon any
- -------
transfer of a beneficial interest in any Security in global form to the Company
or any Affiliate of the Company.
Upon any sale or transfer of a Security to an Institutional Accredited
Investor (other than pursuant to a registration statement that has been declared
effective under the Securities Act), such Institutional Accredited Investor
shall, prior to such sale or transfer, furnish to the Company and/or the Trustee
a signed letter containing representations and agreements relating to
restrictions on transfer substantially in the form set forth in Exhibit B to
---------
this Indenture.
Any Security in global form 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, by the NYSE or by the National Association of Securities Dealers,
Inc. in order for the Securities to be tradeable on The Portal Market or as may
be required for the Securities 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 upon which the Securities 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 Securities are subject.
(d) Every Security that bears or is required under this Section 2.06(d) to
bear the legend set forth in this Section 2.06(d) (together with any Common
Stock issued upon conversion of the Securities and required to bear the legend
set forth in Section 2.06(e), collectively, the "Restricted Securities") shall
be subject to the restrictions on transfer set forth in this Section 2.06(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 Securityholder's acceptance
thereof, agrees to be bound by all such restrictions on transfer. As used in
Sections 2.06(d) and 2.06(e), the term "transfer" encompasses any sale, pledge,
transfer or other disposition whatsoever of any Restricted Security.
Until the expiration of the holding period applicable to sales thereof under
Rule 144(k), any certificate evidencing such Security (and all securities issued
in exchange therefor or substitution
-13-
thereof, other than Common Stock, if any, issued upon conversion therefor, which
shall bear the legend set forth in Section 2.06(e), if applicable) shall bear a
legend in substantially the following form, unless such Security 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 SECURITY 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 EXCEPT
AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE
HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B) IT IS AN
INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2),
(3) OR (7) UNDER THE SECURITIES ACT) ("INSTITUTIONAL ACCREDITED
INVESTOR"); (2) AGREES THAT IT WILL NOT, PRIOR TO 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), RESELL
OR OTHERWISE TRANSFER THE SECURITY EVIDENCED HEREBY OR THE COMMON STOCK
ISSUABLE UPON CONVERSION OF SUCH SECURITY EXCEPT (A) TO ASPECT
TELECOMMUNICATIONS CORPORATION OR ANY SUBSIDIARY THEREOF, (B) TO A
QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE
SECURITIES ACT, (C) TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO
SUCH TRANSFER, FURNISHES TO STATE STREET BANK AND TRUST COMPANY OF
CALIFORNIA, N.A., AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS APPLICABLE), A
SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING
TO THE RESTRICTIONS ON TRANSFER OF THE SECURITY EVIDENCED HEREBY (THE FORM
OF WHICH LETTER CAN BE OBTAINED FROM SUCH TRUSTEE OR A SUCCESSOR TRUSTEE,
AS APPLICABLE), (D) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED
BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR (E) 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
CLAUSE 2(E) ABOVE), IT WILL FURNISH TO STATE STREET BANK AND TRUST COMPANY
OF CALIFORNIA, N.A., AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS APPLICABLE),
SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS THE TRUSTEE
MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS
-14-
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 THE SECURITY EVIDENCED HEREBY
IS TRANSFERRED (OTHER THAN A TRANSFER PURSUANT TO CLAUSE 2(D) OR 2(E)
ABOVE) A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION
WITH ANY TRANSFER OF THE SECURITY EVIDENCED HEREBY PRIOR TO 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),
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
STATE STREET BANK AND TRUST COMPANY OF CALIFORNIA, N.A., AS TRUSTEE (OR A
SUCCESSOR TRUSTEE, AS APPLICABLE). THIS LEGEND WILL BE REMOVED UPON THE
TRANSFER OF THE SECURITY EVIDENCED HEREBY PURSUANT TO CLAUSE 2(D) OR
CLAUSE 2(E) ABOVE OR UPON ANY TRANSFER OF THE SECURITY EVIDENCED HEREBY
AFTER THE EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THE
DEBENTURE EVIDENCED HEREBY UNDER RULE 144(K) UNDER THE SECURITIES ACT (OR
ANY SUCCESSOR PROVISION).
Any Security (or security issued in exchange or substitution therefor) as to
which such restrictions on transfer shall have expired in accordance with their
terms or as to which the conditions for removal of the foregoing legend set
forth therein have been satisfied may, upon surrender of such Securities for
exchange to the Registrar in accordance with the provisions of this Section
2.06, be exchanged for a new Security or Securities, of like tenor and aggregate
principal amount, which shall not bear the restrictive legend required by this
Section 2.06(d).
Notwithstanding any other provisions of this Indenture (other than the
provisions set forth in this Section 2.06(d)), a Security in global form may not
be transferred as a whole except by the Depositary to a nominee of the
Depositary or by a nominee of the Depositary to the Depositary or another
nominee or 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 Securities in global form. Initially, a Security in global
form 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 Security in global form notifies the
Company that it is unwilling or unable to continue as Depositary for such
Security, the Company may appoint a successor Depositary with respect to such
Security. If a successor Depositary for the Security is
-15-
not appointed by the Company within 90 days after the Company receives such
notice, the Company will execute, and the Trustee, upon receipt of an Officers'
Certificate for authentication and delivery of Securities, will authenticate and
deliver, Securities in certificated form, in an aggregate Principal Amount equal
to the Principal Amount of the Security in global form, in exchange for such
Security in global form.
Securities in certificated form issued in exchange for all or a part of a
Security in global form pursuant to this Section 2.06 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 Securities in certificated form to the Persons in whose names such
Securities in certificated form are so registered.
At such time as all interests in a Security in global form have been
redeemed, converted, exchanged, repurchased or canceled for Securities in
certificated form, or transferred to a transferee who receives Securities in
certificated form, such Security in global form shall be, upon receipt thereof,
canceled by the Trustee in accordance with the standing procedures and
instructions existing between the Custodian and Depositary. At any time prior
to such cancellation, if any interest in a Security in global form is exchanged
for Securities in certificated form, redeemed, converted, exchanged, repurchased
by the Company or canceled, or transferred for part of a Security in global
form, the Principal Amount of such Security in global form shall, in accordance
with the standing procedures and instructions existing between the Custodian and
the Depositary, be reduced or increased, as the case may be, and an endorsement
shall be made on such Security in global form, 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), any stock certificate representing Common Stock issued upon
conversion of a Security 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 Securities 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 for the Common Stock:
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 EXCEPT
AS SET FORTH IN THE FOLLOWING SENTENCE. THE HOLDER HEREOF AGREES THAT
UNTIL THE EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THE
COMMON STOCK EVIDENCED HEREBY UNDER RULE 144(k) UNDER THE SECURITIES ACT
(OR ANY SUCCESSOR PROVISION), (1) IT WILL NOT RESELL OR OTHERWISE TRANSFER
THE COMMON STOCK
-16-
EVIDENCED HEREBY EXCEPT (A) TO ASPECT TELECOMMUNICATIONS CORPORATION OR
ANY SUBSIDIARY THEREOF, (B) TO A "QUALIFIED INSTITUTIONAL BUYER" (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN COMPLIANCE WITH RULE
144A, (C) 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 BOSTON EQUISERVE, L.P., AS TRANSFER AGENT (OR A
SUCCESSOR TRANSFER AGENT, AS APPLICABLE), 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 SUCCESSOR TRANSFER AGENT, AS
APPLICABLE), (D) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY
RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE), OR (E) 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
CLAUSE 1(E) ABOVE), IT WILL FURNISH TO BOSTON EQUISERVE, L.P., AS TRANSFER
AGENT (OR A SUCCESSOR TRANSFER AGENT, AS APPLICABLE), SUCH CERTIFICATIONS,
LEGAL OPINIONS OR OTHER INFORMATION AS THE TRANSFER AGENT MAY REASONABLE
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 SECURITY EVIDENCED HEREBY IS TRANSFERRED (OTHER THAN A
TRANSFER PURSUANT TO CLAUSE 1(D) OR 1(E) ABOVE) A NOTICE SUBSTANTIALLY TO
THE EFFECT OF THIS LEGEND. THIS LEGEND WILL BE REMOVED UPON THE EARLIER OR
THE TRANSFER OF THE COMMON STOCK EVIDENCED HEREBY PURSUANT TO CLAUSE 1(D)
OR 1(E) ABOVE OR UPON ANY TRANSFER OF THE COMMON STOCK EVIDENCED HEREBY
AFTER THE EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THE
COMMON STOCK EVIDENCED HEREBY UNDER RULE 144(k) UNDER THE SECURITIES ACT
(OR ANY SUCCESSOR PROVISION).
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 2.06(e).
-17-
(f) Any Security or Common Stock issued upon the conversion or exchange of a
Security that, prior to the expiration of the holding period applicable to sales
thereof under Rule 144(k), is purchased or owned by the Company or any Affiliate
thereof may not be resold by the Company or such Affiliate unless registered
under the Securities Act or resold pursuant to an exemption from the
registration requirements of the Securities Act in a transaction which results
in such Securities or Common Stock, as the case may be, no longer being
"restricted securities" (as defined under Rule 144).
SECTION 2.07. REPLACEMENT SECURITIES. If (a) any mutilated Security is
surrendered to the Trustee, or (b) the Company and the Trustee receive evidence
to their satisfaction of the destruction, loss or theft of any Security, and
there is delivered to the Company and the Trustee such security or indemnity as
may be required by them to save each of them harmless, then, in the absence of
notice to the Company or the Trustee that such Security has been acquired by a
bona fide purchaser, the Company shall execute and, upon its written request,
the Trustee shall authenticate and deliver, in exchange for any such mutilated
Security or in lieu of any such destroyed, lost or stolen Security, a new
Security of like tenor and Principal Amount, bearing a number not
contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has become or
is about to become due and payable, or is about to be purchased or redeemed by
the Company pursuant to Article 3 hereof, the Company in its discretion may,
instead of issuing a new Security, pay, purchase or redeem such Security, as the
case may be.
Upon the issuance of any new Securities under this Section 2.07, the Company
may, as a condition to such issuance, require the payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in relation
thereto and any other expenses (including the fees and expenses of the Trustee)
connected therewith.
Every new Security issued pursuant to this Section 2.07 in lieu of any
mutilated, destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Company, whether or not the mutilated
destroyed, lost or stolen Security shall be at any time enforceable by anyone,
and shall be entitled to all benefits of this Indenture equally and
proportionately with any and all other Securities duly issued hereunder.
The provisions of this Section 2.07 are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities.
SECTION 2.08. OUTSTANDING SECURITIES; DETERMINATIONS OF HOLDERS' ACTION.
Securities outstanding at any time are all the Securities authenticated by the
Trustee except for those canceled by it, those delivered to it for cancellation
and those described in this Section 2.08 as not outstanding. A Security does
not cease to be outstanding because the Company or an Affiliate thereof holds
the Security; provided, however, that in determining whether the Holders of the
-------- -------
requisite Principal Amount of Securities have given or concurred in any request,
demand,
-18-
authorization, direction, notice, consent or waiver hereunder, Securities owned
by the Company or any Affiliate of the Company shall be disregarded and deemed
not to be outstanding, except that, in determining whether the Trustee shall be
protected in relying upon any such request, demand, authorization, direction,
notice, consent or waiver, only Securities which the Trustee knows to be so
owned shall be so disregarded. Subject to the foregoing, only Securities
outstanding at the time of such determination shall be considered in any such
determination (including, without limitation, determinations pursuant to
Articles 6 and 9).
If a Security is replaced pursuant to Section 2.07, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Security is held by a bona fide purchaser.
If the Paying Agent holds, in accordance with this Indenture, on a Redemption
Date, or on the Business Day following a Purchase Date or a Fundamental Change
Redemption Date, or on Stated Maturity, money or securities, if permitted
hereunder, sufficient to pay Securities payable on that date, then on and after
that date such Securities shall cease to be outstanding and Original Issue
Discount and interest, if any, on such Securities shall cease to accrue;
provided, that if such Securities are to be redeemed, notice of such redemption
- --------
has been duly given pursuant to this Indenture or provision therefor
satisfactory to the Trustee has been made.
If a Security is converted in accordance with Article 11, then from and after
such conversion such Security shall cease to be outstanding and Original Issue
Discount and interest, if any, shall cease to accrue on such Security.
SECTION 2.09. TEMPORARY SECURITIES. Pending the preparation of definitive
Securities, the Company may execute, and upon Company Order the Trustee shall
authenticate and deliver, temporary Securities which are printed, lithographed,
typewritten, mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Securities in lieu of which they
are issued and with such appropriate insertions, omissions, substitutions and
other variations as the officers executing such Securities may determine, as
conclusively evidenced by their execution of such Securities.
If temporary Securities are issued, the Company shall cause definitive
Securities to be prepared without unreasonable delay. After the preparation of
definitive Securities, the temporary Securities shall be exchangeable for
definitive Securities upon surrender of the temporary Securities at the office
or agency of the Company designated for such purpose pursuant to Section 2.03,
without charge to the Holder. Upon surrender for cancellation of any one or
more temporary Securities, the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor a like Principal Amount of
definitive Securities of authorized denominations. Until so exchanged, the
temporary Securities shall in all respects be entitled to the same benefits
under this Indenture as definitive Securities.
SECTION 2.10. CANCELLATION. All Securities surrendered for payment,
purchase, conversion, redemption or registration of transfer or exchange for the
Securities shall, if surrendered to any Person other than the Trustee, be
delivered to the Trustee and shall be promptly canceled by it.
-19-
The Company may at any time deliver to the Trustee for cancellation any
Securities previously authenticated and delivered hereunder which the Company
may have acquired in any manner whatsoever, and all Securities so delivered
shall be promptly canceled by the Trustee. The Company may not issue new
Securities to replace Securities it has paid for or delivered to the Trustee for
cancellation or that any Holder has converted pursuant to Article 11. No
Securities shall be authenticated in lieu of or in exchange for any Securities
canceled as provided in this Section 2.10, except as expressly permitted by this
Indenture. All canceled Securities held by the Trustee shall be destroyed by the
Trustee and, following such destruction, the Trustee shall deliver a certificate
of destruction to the Company, unless the Company directs by the Company Order
that the Trustee deliver canceled Securities to the Company.
SECTION 2.11. PERSONS DEEMED OWNERS. Prior to due presentment of a Security
for registration of transfer, the Company, the Trustee and any agent of the
Company or the Trustee may treat the Person in whose name such Security is
registered as the owner of such Security for the purpose of receiving payment of
Principal Amount, Issue Price, accrued Original Issue Discount, accrued
Liquidated Damages, if any, Redemption Price, Purchase Price, Fundamental Change
Redemption Price and interest, if any, in respect thereof, for the purpose of
conversion and for all other purposes whatsoever, whether or not such Security
be overdue, and none of the Company, the Trustee or any agent of the Company or
the Trustee shall be affected by notice to the contrary.
ARTICLE 3
REDEMPTION AND PURCHASES
SECTION 3.01. RIGHT TO REDEEM; NOTICES TO TRUSTEE. The Company, at its
option, may redeem the Securities in accordance with the provisions of
paragraphs 5 and 7 of the Securities. If the Company elects to redeem
Securities pursuant to paragraph 5 of the Securities, it shall notify the
Trustee in writing of the Redemption Date, the Principal Amount of Securities to
be redeemed and the Redemption Price.
The Company shall give the notice to the Trustee provided for in this Section
3.01 (i) in the case of any redemption of fewer than all of the Securities, at
least 45 days before the Redemption Date and (ii) in the case of a redemption of
all of the Securities, no later than the date that the Company is required to
give notice to the Holders pursuant to Section 3.03, in each case unless a
shorter notice shall be satisfactory to the Trustee.
SECTION 3.02. SELECTION OF SECURITIES TO BE REDEEMED. If less than all the
Securities held in definitive form are to be redeemed pursuant to Section 3.01,
the Trustee shall select the definitive Securities to be redeemed pro rata or by
--- ----
lot or by a method the Trustee considers fair and appropriate (as long as such
method is not prohibited by the rules of any securities exchange or quotation
system on which the Securities are then listed or quoted). The Trustee shall
make the selection at least 35 days, but not more than 60 days, before the
Redemption Date from outstanding
-20-
definitive Securities not previously called for redemption. The Trustee may
select for redemption portions of the Principal Amount of Securities that have
denominations larger than $1,000. Securities and portions of them the Trustee
selects shall be in Principal Amounts of $1,000 or an integral multiple of
$1,000. Provisions of this Indenture that apply to definitive Securities called
for redemption also apply to portions of definitive Securities called for
redemption. The Trustee shall notify the Company promptly of the definitive
Securities or portions of definitive Securities to be redeemed.
Any interest in a Security held in global form by and registered in the name
of the Depositary or its nominee to be redeemed in whole or in part will be
redeemed in accordance with the procedures of the Depositary.
If any Security selected for partial redemption is converted in part before
termination of the conversion right with respect to the portion of the Security
so selected, the converted portion of such Security shall be deemed (so far as
may be) to be the portion selected for redemption. Securities which have been
converted during a selection of Securities to be redeemed may be treated by the
Trustee as outstanding for the purpose of such selection.
SECTION 3.03. NOTICE OF REDEMPTION. At least 30 days but not more than 60
days before a Redemption Date, the Company shall mail a notice of redemption by
first-class mail, postage prepaid, to each Holder of Securities to be redeemed.
The notice shall identify the Securities to be redeemed and shall state:
(1) the Redemption Date;
(2) the Redemption Price;
(3) the Conversion Rate;
(4) the name and address of the Paying Agent and Conversion Agent;
(5) that Securities called for redemption may be converted at any time before
the close of business on the last Trading Day prior to the Redemption Date;
(6) that Holders who want to convert Securities must satisfy the requirements
set forth in paragraph 9 of the Securities;
(7) that Securities called for redemption must be surrendered to the Paying
Agent to collect the Redemption Price;
(8) if fewer than all the outstanding Securities are to be redeemed, the
certificate number and Principal Amounts of the particular Securities to be
redeemed;
-21-
(9) that Original Issue Discount on Securities called for redemption will
cease to accrue on and after the Redemption Date; and
(10) the CUSIP number or numbers for the Securities.
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 Security designated for redemption as a whole or in
part shall not affect the validity of the proceedings for the redemption of any
other Security.
At the Company's request, the Trustee shall give the notice of redemption in
the Company's name and at the Company's expense.
SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION. Once notice of redemption is
given, pursuant to Section 3.03, Securities called for redemption become due and
payable on the Redemption Date and at the Redemption Price stated in the notice
except for Securities which are converted in accordance with the terms of this
Indenture.
Upon the later of the Redemption Date or the date such Securities are
surrendered to the Paying Agent, such Securities shall be paid at the Redemption
Price stated in the notice.
SECTION 3.05. DEPOSIT OF REDEMPTION PRICE. Prior to or on the Redemption
Date, the Company shall deposit with the Paying Agent (or if the Company or an
Affiliate of the Company is the Paying Agent, shall segregate and hold in trust)
money sufficient to pay the Redemption Price of all Securities to be redeemed on
that date other than Securities or portions of Securities called for redemption
which prior thereto have been delivered by the Company to the Trustee for
cancellation or have been converted into Common Stock, and on or after the
Redemption Date (unless the Company shall default in the payment of the
Securities at the Redemption Price), Original Issue Discount on the Securities
or portion of Securities called for redemption shall cease to accrue and such
Securities shall cease after the close of business on the Business Day
immediately preceding the Redemption Date to be convertible into Common Stock
and, except as provided in Section 8.02, to be entitled to any benefit or
security under this Indenture, and the Holders thereof shall have no right in
respect of such Securities except the right to receive the Redemption Price
thereof and unpaid interest to (but excluding) the Redemption Date. The Paying
Agent shall as promptly as practicable return to the Company any money, with
interest, if any, thereon, not required for that purpose because of conversion
of Securities. If such money is then held by the Company in trust and is not
required for such purpose it shall be discharged from such trust.
SECTION 3.06. SECURITIES REDEEMED IN PART. Upon surrender of a Security
that is redeemed in part, the Company shall execute and the Trustee shall
authenticate and deliver to the Holder a new Security in an authorized
denomination equal in Principal Amount to the unredeemed portion of the Security
surrendered.
-22-
SECTION 3.07. CONVERSION ARRANGEMENT ON CALL FOR REDEMPTION. In connection
with any redemption of Securities, the Company may arrange for the purchase and
conversion into Common Stock of any Securities called for redemption by an
agreement with one or more investment bankers or other purchasers to purchase
such Securities by paying to the Paying Agent in trust for the Holders, on or
before the close of business on the Redemption Date, an amount that, together
with any amounts deposited with the Paying Agent by the Company for the
redemption of the Securities, is not less than the Redemption Price to the
Redemption Date, of such Securities. Notwithstanding anything to the contrary
contained in this Article 3, the obligation of the Company to pay the Redemption
Price of such Securities 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, any Securities 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 11) surrendered
by such purchasers for conversion, all immediately prior to the close of
business on the Redemption Date, subject to payment of the above amount as
aforesaid. The Paying Agent shall hold and pay to the Holders whose Securities
are selected for redemption any such amount paid to it in the same manner as it
would money deposited with it by the Company for the redemption of Securities.
Without the Paying Agent's prior written consent, no arrangement between the
Company and such purchasers for the purchase and conversion of any Securities
shall increase or otherwise affect any of the powers, duties, responsibilities
or obligations of the Paying Agent as set forth in this Indenture, and the
Company agrees to indemnify the Paying Agent from, and hold it harmless against,
any loss, liability or expense arising out of or in connection with any such
arrangement for the purchase and conversion of any Securities between the
Company and such purchasers, including the costs and expenses incurred by the
Paying Agent in the defense of any claim or liability arising out of or in
connection with the exercise or performance of any of its powers, duties,
responsibilities or obligations under this Indenture.
SECTION 3.08. PURCHASE OF SECURITIES AT OPTION OF THE HOLDER.
(a) General. Securities shall be purchased by the Company pursuant to
-------
paragraph 6 of the Securities as of August 10, 2003, August 10, 2008 and August
10, 2013 (each, a "Purchase Date"), at the purchase price specified therein
(each, a "Purchase Price") at the option of the Holder thereof, upon:
(1) delivery to the Paying Agent by the Holder of a written notice of
purchase (a "Purchase Notice") at any time from the opening of business on the
date that is 20 Business Days prior to a Purchase Date until the close of
business on such Purchase Date, stating:
(A) the certificate number of the Security which the Holder will deliver
to be purchased;
(B) the portion of the Principal Amount of the Security which the Holder
will deliver to be purchased, which portion must be $1,000 in Principal Amount
or a multiple thereof;
-23-
(C) that such Security shall be purchased as of the Purchase Date
pursuant to the terms and conditions specified in paragraph 6 of the Securities
and in this Indenture; and
(D) if the Company elects, pursuant to a Company Notice, to pay the
Purchase Price to be paid as of such Purchase Date, in whole or in part, in
Common Stock but such portion of the Purchase Price shall ultimately be payable
to such Holder in Cash because any of the conditions to the payment of the
Purchase Price in Common Stock are not satisfied prior to or on the Purchase
Date, as set forth in Section 3.08(d), whether such Holder elects (x) to
withdraw such Purchase Notice as to some or all of the Securities to which such
Purchase Notice relates (stating the Principal Amount and certificate numbers of
the Securities as to which such withdrawal shall relate), or (y) to receive Cash
in respect of the entire Purchase Price for all Securities (or portions thereof)
to which such Purchase Notice relates; and
(2) delivery of such Security to the Paying Agent prior to, on or after the
Purchase Date (together with all necessary endorsements) at the offices of the
Paying Agent, such delivery being a condition to receipt by the Holder of the
Purchase Price therefor; provided, however, that such Purchase Price shall be so
-------- -------
paid pursuant to this Section 3.08 only if the Security so delivered to the
Paying Agent shall conform in all respects to the description thereof in the
related Purchase Notice.
If a Holder, in such Holder's Purchase Notice (and in any written notice of
withdrawal of a portion of such Holder's Securities previously submitted for
purchase pursuant to a Purchase Notice, the portion that remains subject to the
Purchase Notice), fails to indicate such Holder's choice with respect to the
election set forth in clause (D) of Section 3.08(a)(1), such Holder shall be
deemed to have elected to receive Cash in respect of the entire Purchase Price
for all Securities subject to such Purchase Notice in the circumstances set
forth in such clause (D).
The Company shall purchase from the Holder thereof, pursuant to this Section
3.08, a portion of a Security if the Principal Amount of such portion is $1,000
or an integral multiple of $1,000. Provisions of this Indenture that apply to
the purchase of all of a Security also apply to the purchase of such portion of
such Security.
Any purchase by the Company contemplated pursuant to the provisions of this
Section 3.08 shall be consummated by the delivery of the consideration to be
received by the Holder promptly following the later of the Purchase Date and the
time of delivery of the Security.
Notwithstanding anything herein to the contrary, any Holder delivering to the
Paying Agent the Purchase Notice contemplated by this Section 3.08(a) shall have
the right at any time prior to the close of business on the Purchase Date to
withdraw such Purchase Notice by delivery of a written notice of withdrawal to
the Paying Agent in accordance with Section 3.10.
The Paying Agent shall promptly notify the Company of the receipt by it of
any Purchase Notice or written notice of withdrawal thereof.
-24-
(b) Company's Right to Elect Manner of Payment of Purchase Price. The
------------------------------------------------------------
Company may elect with respect to any Purchase Date to pay the Purchase Price in
respect of the Securities to be purchased pursuant to Section 3.08(a) as of such
Purchase Date, in U.S. legal tender ("Cash") or Common Stock, or in any
combination of Cash and Common Stock, subject to the conditions set forth in
Sections 3.08(c) and (d). The Company shall designate, in the Company Notice
delivered pursuant to Section 3.08(e), whether the Company will purchase the
Securities for Cash or Common Stock, or, if a combination thereof, the
percentages of the Purchase Price of Securities in respect of which it will pay
in Cash and/or Common Stock; provided that the Company will pay Cash for
--------
fractional interests in shares of Common Stock. For purposes of determining the
existence of potential fractional interests, all Securities subject to purchase
by the Company held by a Holder shall be considered together (no matter how many
separate certificates are to be presented). Each Holder whose Securities are
purchased pursuant to this Section 3.08 shall receive the same percentage of
Cash and/or Common Stock in payment of the Purchase Price for such Securities,
except (i) as provided in Section 3.08(d) with regard to the payment of Cash in
lieu of fractional interests in Common Stock and (ii) in the event that the
Company is unable to purchase the Securities of a Holder or Holders for Common
Stock because any necessary qualifications or registrations of the Common Stock
under applicable federal or state securities laws cannot be obtained, the
Company may purchase the Securities of such Holder or Holders for Cash. The
Company may not change its election with respect to the consideration (or
components or percentages of components thereof) to be paid once the Company has
given its Company Notice to Holders except pursuant to this Section 3.08(b) or
Section 3.08(d).
At least two Business Days before the Company Notice Date (as defined in
Section 3.08(c)), the Company shall deliver an Officers' Certificate to the
Trustee specifying:
(i) the manner of payment selected by the Company,
(ii) the information required by Section 3.08(e),
(iii) if the Company elects to pay the Purchase Price, or a
specified percentage thereof, in Common Stock, that the conditions to such
manner of payment set forth in Section 3.08(d) have been or will be complied
with, and
(iv) whether the Company desires the Trustee to give the Company
Notice required by Section 3.08(e).
(c) Purchase with Cash. At the option of the Company, the Purchase Price of
------------------
Securities in respect of which a Purchase Notice pursuant to Section 3.08(a) has
been given, or a specified percentage thereof, may be paid by the Company with
Cash equal to the aggregate Purchase Price, or such specified percentage
thereof, as the case may be, of such Securities. If the Company elects to
purchase Securities with Cash, a Company Notice as provided in Section 3.08(e)
shall be sent to Holders (and to beneficial owners as required by applicable
law) not less than 20 Business Days prior to the Purchase Date (the "Company
Notice Date").
-25-
(d) Payment by Issuance of Common Stock. At the option of the Company, the
-----------------------------------
Purchase Price of Securities in respect of which a Purchase Notice pursuant to
Section 3.08(a) has been given, or a specified percentage thereof, may be paid
by the Company by the issuance of a number of shares of Common Stock equal to
the quotient obtained by dividing (i) the amount of Cash to which the Holders
would have been entitled had the Company elected to pay all or such specified
percentage, as the case may be, of the Purchase Price of such Securities in Cash
by (ii) the Market Price of a share of Common Stock, subject to the next
succeeding paragraph.
The Company will not issue a fractional share of Common Stock in payment of
the Purchase Price. Instead the Company will pay Cash for the current market
value of the fractional share. The current market value of a fraction of a
share shall be determined by multiplying the Market Price by such fraction and
rounding the product to the nearest whole cent. It is understood that if a
Holder elects to have more than one Security purchased, the number of shares of
Common Stock shall be based on the aggregate amount of Securities to be
purchased.
If the Company elects to purchase the Securities by the issuance of shares of
Common Stock, a Company Notice as provided in Section 3.08(e) shall be sent to
the Holders (and to beneficial owners as required by applicable law) not later
than the Company Notice Date.
The Company's right to exercise its election to purchase the Securities
pursuant to Section 3.08 through the issuance of shares of Common Stock shall be
conditioned upon:
(i) the Company having given timely Company Notice of election to
purchase all or a specified percentage of the Securities with Common Stock as
provided herein;
(ii) the registration of the shares of Common Stock to be issued in
respect of the payment of the specified percentage of the Purchase Price under
the Securities Act; unless the shares of Common Stock so issued can be freely
resold by the Holder (unless such Holder is the Company or an Affiliate of the
Company) receiving such shares without registration under the Securities Act;
(iii) any necessary qualification or registration under applicable state
securities laws or the availability of an exemption from such qualification and
registration; and
(iv) the receipt by the Trustee of an Officers' Certificate and an
Opinion of Counsel each stating that (A) the terms of the issuance of the Common
Stock are in conformity with this Indenture and (B) the shares of Common Stock
to be issued by the Company in payment of the specified percentage of the
Purchase Price in respect of Securities have been duly authorized and, when
issued and delivered pursuant to the terms of this Indenture in payment of the
specified percentage of the Purchase Price in respect of Securities, will be
validly issued, fully paid and nonassessable, and, in the case of such Officers'
Certificate, stating that conditions (i), (ii) and (iii) above have been
satisfied and, in the case of such Opinion of Counsel, stating that conditions
(ii) and (iii) above have been satisfied.
-26-
Such Officers' Certificate shall also set forth the number of shares of
Common Stock to be issued for each $1,000 Principal Amount of Securities and the
Sale Price of a share of Common Stock on each Trading Day during the period
during which the Market Price is calculated and ending on the Purchase Date.
The Company may elect to pay the Purchase Price (or any portion thereof) in
Common Stock only if the information necessary to calculate the Market Price is
reported in a daily newspaper of national circulation. If such conditions are
not satisfied with respect to a Holder or Holders prior to or on the Purchase
Date and the Company elected to purchase the Securities to be purchased as of
such Purchase Date pursuant to this Section 3.08 through the issuance of shares
of Common Stock, the Company shall pay the entire Purchase Price in respect of
such Securities of such Holder or Holders in Cash.
The "Market Price" means the average of the Sale Prices of the Common Stock
for the five Trading Day period ending on the third Business Day prior to the
applicable Purchase Date (if the third Business Day prior to the applicable
Purchase Date is a Trading Day or, if it is not a Trading Day, then on the last
Trading Day prior to such third Business Day), appropriately adjusted to take
into account the occurrence, during the period commencing on the first of such
Trading Days during such five Trading Day period and ending on such Purchase
Date, of any event described in Section 11.06, 11.07 or 11.08; subject, however,
to the conditions set forth in Sections 11.09 and 11.10. The "Sale Price" of
the Common Stock on any date means the closing per share sale price (or if no
closing sale price is reported the average of the bid and ask prices or, if more
than one, in either case, the average of the average bid and average ask prices)
on such date as reported in the composite transactions for the principal United
States securities exchange on which the Common Stock is traded or, if the Common
Stock is not listed on a United States national or regional stock exchange, as
reported by the Nasdaq National Market.
(e) Notice of Election. Company's notices of election to purchase with Cash
------------------
or Common Stock, or any combination thereof, shall be sent to the Holders (and
to beneficial owners as required by applicable law) in the manner provided in
Section 12.02 at the time specified in Section 3.08(c) or (d), as applicable
(each, a "Company Notice"). Such Company Notices shall state the manner of
payment elected and shall contain the following information:
In the event the Company has elected to pay a Purchase Price (or a specified
percentage thereof) with Common Stock, the Company Notice shall:
(1) state that each Holder will receive Common Stock with a Market Price
determined as of a specified date prior to the Purchase Date equal to such
specified percentage of the Purchase Price of the Securities held by such Holder
(except any Cash amount to be paid in lieu of fractional share); and
(2) set forth the method of calculating the Market Price and state that
because the Market Price of Common Stock will be determined prior to the
Purchase Date, the Holders will bear the market risk with respect to the value
of the Common Stock to be received from the date such Market Price is determined
to the Purchase Date.
-27-
In any case, each Company Notice shall include a form of Purchase Notice to
be completed by a Securityholder and shall state:
(i) the Purchase Price and Conversion Rate;
(ii) the name and address of the Paying Agent and the Conversion
Agent;
(iii) that Securities as to which a Purchase Notice has been
given may be converted only if the applicable Purchase Notice has been withdrawn
in accordance with the terms of this Indenture;
(iv) that Securities must be surrendered to the Paying Agent to
collect payment;
(v) that the Purchase Price for any Security as to which a
Purchase Notice has been given and not withdrawn will be paid promptly following
the later of the Purchase Date and the time of surrender of such Security as
described in (iv);
(vi) the procedures the Holder must follow under Section 3.08;
(vii) briefly, the conversion rights of the Securities; and
(viii) the procedures for withdrawing a Purchase Notice
(including, without limitation, for a conditional withdrawal pursuant to the
terms of Section 3.08 (a) (1) (D) or Section 3.10).
At the Company's request, the Trustee shall give the Company Notice in the
Company's name and at the Company's expense; provided, however, that, in all
cases, the text of the Company Notice shall be prepared by the Company.
(f) Covenants of the Company. All shares of Common Stock delivered upon
------------------------
conversion or purchase of the Securities shall be newly issued shares or
treasury shares, shall be fully paid and nonassessable and shall be free from
preemptive rights and free of any lien or adverse claim.
The Company shall use its best efforts to list or cause to have quoted all
such shares of Common Stock on each United States national securities exchange
or over-the-counter or other domestic market on which the Common Stock is then
listed or quoted.
(g) Procedure upon Purchase. On the Business Day following the Purchase
-----------------------
Date, the Company shall deposit with the Paying Agent Cash (in respect of a Cash
purchase under Section 3.08(c) or for fractional interests, as applicable), or
shares of Common Stock, or a combination thereof, as applicable, sufficient to
pay the aggregate Purchase Price in respect of the Securities to be purchased
pursuant to this Section 3.08. As soon as practicable after the Purchase Date,
the Company shall deliver to each Holder entitled to receive Common Stock,
through the
-28-
Paying Agent, a certificate for the number of full shares of Common Stock, as
applicable, issuable in payment of such Purchase Price and Cash in lieu of any
fractional interests. The Person in whose name the certificate for Common Stock
is registered shall be treated as a holder of record following the Purchase
Date. Subject to Section 3.08(d), no payment or adjustment will be made for
dividends on the Common Stock the record date for which occurred on or prior to
the Purchase Date.
(h) Taxes. If a Holder of a Security is paid in Common Stock, the Company
-----
shall pay any documentary, stamp or similar issue or transfer tax due on such
issue of shares of Common Stock. However, the Holder shall pay any such tax
which is due because the Holder requests the shares of Common Stock to be issued
in a name other than the Holder's name. The Paying Agent may refuse to deliver
the certificates representing the Common Stock being issued in a name other than
the Holder's name until the Paying Agent receives a sum sufficient to pay any
tax which will be due because the shares of Common Stock are to be issued in a
name other than the Holder's name. Nothing herein shall preclude any income tax
withholding required by law or regulations.
SECTION 3.09. REDEMPTION AT OPTION OF THE HOLDER UPON A FUNDAMENTAL CHANGE.
(a) If a Fundamental Change shall occur at any time prior to August 10, 2018,
each Holder of Securities shall have the right, at such Holder's option, to
require the Company to redeem any or all of Holder's Securities on the date that
is 45 days after the date of the Company's notice of such Fundamental Change
(the "Fundamental Change Repurchase Date") (or if such date is not a Business
Day, the next succeeding Business Day). The Securities will be redeemable in
integral multiples of $1,000 of Principal Amount. The Company shall redeem such
Securities at a price (the "Fundamental Change Redemption Price") equal to the
Issue Price plus accrued Original Issue Discount to the Fundamental Change
Redemption Date; provided that, if the Applicable Price in connection with the
--------
Fundamental Change is less than the Reference Market Price, the Fundamental
Change Redemption Price shall be a price equal to the foregoing Fundamental
Change Redemption Price multiplied by the fraction obtained by dividing the
Applicable Price by the Reference Market Price. No Securities may be redeemed
at the option of the Holders as a result of a Fundamental Change if there has
occurred and is continuing an Event of Default (other than a default in the
payment of the Fundamental Change Redemption Price with respect to such
Securities).
(b) The Company, or at its request (which must be received by the Trustee at
least three Business Days prior to the date the Trustee is requested to give
such notice as described below) the Trustee in the name of and at the expense of
the Company, shall mail to all Holders of record of the Securities a notice (a
"Fundamental Change Redemption Notice") of the occurrence of a Fundamental
Change and of the redemption right arising as a result thereof on or before the
tenth day after the occurrence of such Fundamental Change. The Company shall
promptly furnish the Trustee a copy of such notice.
(c) For a Security to be so redeemed at the option of the Holder, the Paying
Agent must receive such Security with the form entitled "Option to Elect
Redemption Upon a Fundamental Change" on the reverse thereof duly completed,
together with such Security duly endorsed for
-29-
transfer, on or before the 30th day after the date of such notice (or if such
30th day is not a Business Day, the immediately preceding Business Day). All
questions as to the validity, eligibility (including time of receipt) and
acceptance of any Security for redemption shall be determined by the Company,
whose determination shall be final and binding.
SECTION 3.10. EFFECT OF PURCHASE NOTICE OR FUNDAMENTAL CHANGE REDEMPTION
NOTICE. Upon receipt by the Company of the Purchase Notice or Fundamental Change
Redemption Notice specified in Section 3.08(a) or Section 3.09(b), as
applicable, the Holder of the Security in respect of which such Purchase Notice
or Fundamental Change Redemption Notice, as the case may be, was given shall
(unless such Purchase Notice or Fundamental Change Redemption Notice is
withdrawn as specified in the following two paragraphs) thereafter be entitled
to receive solely the Purchase Price or Fundamental Change Redemption Price, as
the case may be, with respect to such Security. Such Purchase Price or
Fundamental Change Redemption Price shall be paid to such Holder promptly
following the later of (x) the Purchase Date or the Fundamental Change
Redemption Date, as the case may be, with respect to such Security (provided the
conditions in Section 3.08(a) or Section 3.09(c), as applicable, have been
satisfied) and (y) the time of delivery of such Security to the Paying Agent by
the Holder thereof in the manner required by Section 3.08(a) or Section 3.09(c),
as applicable. Securities in respect of which a Purchase Notice or Fundamental
Change Redemption Notice, as the case may be, has been given by the Holder
thereof may not be converted for shares of Common Stock on or after the date of
the delivery of such Purchase Notice (or Fundamental Change Redemption Notice,
as the case may be), unless such Purchase Notice (or Fundamental Change
Redemption Notice, as the case may be) has first been validly withdrawn as
specified in the following two paragraphs.
A Purchase Notice or Fundamental Change Redemption Notice, as the case may
be, may be withdrawn by means of a written notice of withdrawal delivered to the
office of the Paying Agent at any time prior to the close of business on the
Purchase Date or the Fundamental Change Redemption Date, as the case may be, to
which it relates specifying:
(1) the certificate number of the Security in respect of which such notice of
withdrawal is being submitted,
(2) the Principal Amount of the Security with respect to which such notice of
withdrawal is being submitted, and
(3) the Principal Amount, if any, of such Security which remains subject to
the original Purchase Notice or Fundamental Change Redemption Notice, as the
case may be, and which has been or will be delivered for purchase or redemption
by the Company.
A written notice of withdrawal of a Purchase Notice may be in the form of (i)
a conditional withdrawal contained in a Purchase Notice pursuant to the terms of
Section 3.08(a)(1)(D) or (ii) a conditional withdrawal containing the
information set forth in Section 3.08(a)(1)(D) and the preceding paragraph and
contained in a written notice of withdrawal delivered to the Paying Agent as set
forth in the preceding paragraph.
-30-
There shall be no purchase of any Securities pursuant to Section 3.08 (other
than through the issuance of Common Stock in payment of the Purchase Price,
including Cash in lieu of any fractional shares) or redemption pursuant to
Section 3.09 if there has occurred (prior to, on or after, as the case may be,
the giving, by the Holders of such Securities, of the required Purchase Notice
or Fundamental Change Redemption Notice, as the case may be) and is continuing
an Event of Default (other than a default in the payment of the Purchase Price
or Fundamental Change Redemption Price, as the case may be, with respect to such
Securities).
SECTION 3.11. DEPOSIT OF PURCHASE PRICE OR FUNDAMENTAL CHANGE REDEMPTION
PRICE. On or before the Business Day following a Purchase Date or a Fundamental
Change Redemption Date, as the case may be, the Company shall deposit with the
Trustee or with the Paying Agent (or, if the Company or an Affiliate of the
Company is acting as the Paying Agent, shall segregate and hold in trust as
provided in Section 2.04) an amount of money and/or securities, if permitted
hereunder, sufficient to pay the aggregate Purchase Price or Fundamental Change
Redemption Price, as the case may be, of all the Securities or portions thereof
which are to be purchased as of such Purchase Date or Fundamental Change
Redemption Date, as the case may be.
SECTION 3.12. SECURITIES PURCHASED IN PART. Any Security that is to be
purchased or redeemed only in part shall be surrendered at the office of the
Paying Agent (with, if the Company or the Trustee so requires, due endorsement
by, or a written instrument of transfer in form satisfactory to the Company and
the Trustee duly executed by, the Holder thereof or such Holder's attorney duly
authorized in writing) and the Company shall execute and the Trustee shall
authenticate and deliver to the Holder of such Security, without service charge,
a new Security or Securities, of any authorized denomination as requested by
such Holder in aggregate Principal Amount equal to, and in exchange for, the
portion of the Principal Amount of the Security so surrendered which is not
purchased or redeemed.
SECTION 3.13. COVENANT TO COMPLY WITH SECURITIES LAWS UPON PURCHASE OF
SECURITIES. In connection with any purchase or redemption of Securities under
Section 3.08 or 3.09 hereof, the Company shall (i) comply with Rule 13e-4 (which
term, as used herein, includes any successor provision thereto) under the
Exchange Act, if applicable, (ii) file the related Schedule 13E-4 (or any
successor schedule, form or report) under the Exchange Act, if applicable, and
(iii) otherwise comply with all Federal and state securities laws so as to
permit the rights and obligations under Section 3.08 and 3.09 to be exercised in
the time and in the manner specified in Section 3.08 and 3.09.
SECTION 3.14. REPAYMENT TO THE COMPANY. The Trustee and the Paying Agent
shall return to the Company any cash or shares of Common Stock that remain
unclaimed as provided in paragraph 14 of the Securities, together with interest
or dividends, if any, thereon, held by them for the payment of a Purchase Price
or Fundamental Change Redemption Price, as the case may be; provided, however,
-------- -------
that to the extent that the aggregate amount of cash or shares of Common Stock
deposited by the Company pursuant to Section 3.11 exceeds the aggregate Purchase
Price or Fundamental Change
-31-
Redemption Price, as the case may be, of the Securities or portions thereof
which the Company is obligated to purchase as of the Purchase Date or
Fundamental Change Redemption Date, as the case may be, then promptly after the
Business Day following the Purchase Date or Fundamental Change Redemption Date,
as the case may be, the Trustee and the Paying Agent shall return any such
excess to the Company together with interest or dividends, if any, thereon.
ARTICLE 4
COVENANTS
SECTION 4.01. PAYMENT OF SECURITIES. The Company shall promptly pay or
cause to be paid all payments in respect of the Securities on the dates and in
the manner provided in the Securities or pursuant to this Indenture. Principal
Amount, Issue Price, accrued Original Issue Discount, accrued Liquidated
Damages, if any, Redemption Price, Purchase Price, Fundamental Change Redemption
Price and interest, if any, shall be considered paid on the applicable date due
or, in the case of a Purchase Price or Fundamental Change Redemption Price, on
the Business Day following the applicable Purchase Date or Fundamental Change
Redemption Date, as the case may be, if on such date the Trustee or the Paying
Agent holds, in accordance with this Indenture, money or securities, if
permitted hereunder, sufficient to pay all such amount then due.
The Company shall pay interest on overdue amounts at the rate set forth in
paragraph 1 of the Securities and it shall pay interest on overdue interest at
the same rate compounded semiannually (to the extent that the payment of such
interest shall be legally enforceable), which interest on overdue interest shall
accrue from the date such amounts became overdue and shall be in lieu of, and
not in addition to, the continued accrual of Original Issue Discount.
SECTION 4.02. FINANCIAL INFORMATION; SEC REPORTS. The Company will deliver
to the Trustee (a) as soon as available and in any event within 90 days after
the end of each fiscal year of the Company (i) a consolidated balance sheet of
the Company and its Subsidiaries as of the end of such fiscal year and the
related consolidated statements of operations, stockholders' equity and cash
flows for such fiscal year, all reported on by an independent public accountant
of nationally recognized standing and (ii) a report containing a management's
discussion and analysis of the financial condition and results of operations and
a description of the business and properties of the Company and (b) as soon as
available and in any event within 45 days after the end of each of the first
three quarters of each fiscal year of the Company (i) an unaudited consolidated
financial report for such quarter and (ii) a report containing a management's
discussion and analysis of the financial condition and results of operations of
the Company; provided that the foregoing shall not be required for any fiscal
--------
year or quarter, as the case may be, with respect to which the Company files or
expects to file with the Trustee an annual report or quarterly report, as the
case may be, pursuant to the third paragraph of this Section 4.02.
So long as the Securities or the Common Stock issued upon conversion of the
Securities are Restricted Securities, if the Company is not subject to either
Section 13 or 15(d) of the Exchange Act, the Company shall at the request of any
Holder (or holders of Common Stock issued upon
-32-
conversion of the Securities) provide to such Holder (or holders of such Common
Stock) and any prospective purchaser designated by such Holders (or holders of
such Common Stock), as the case may be, such information, if any, required by
Rule 144A(d)(4) under the Securities Act.
The Company shall file with the Trustee, within 15 days after it files such
annual and quarterly reports, information, documents and other reports with the
SEC, copies of its annual report and of the information, documents and other
reports (or copies of such portions of any of the foregoing as the SEC may by
rules and regulations prescribe) which the Company is required to file with the
SEC pursuant to Section 13 or 15(d) of the Exchange Act.
SECTION 4.03. COMPLIANCE CERTIFICATE. The Company shall deliver to the
Trustee, within 120 days after the end of each fiscal year of the Company, an
Officers' Certificate in which one of the two Officers signing such certificate
is either the principal executive officer, principal financial officer or
principal accounting officer of the Company, stating whether or not to the
knowledge of the signers 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 status thereof of which the signers may have knowledge.
The Company will deliver to the Trustee, forthwith upon becoming aware of any
Default in the performance or observance of any covenant, agreement or condition
contained in this Indenture, or 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 4.03 shall be delivered to
the Trustee at its Corporate Trust Office.
SECTION 4.04. FURTHER INSTRUMENTS AND ACTS. Upon request of the Trustee,
the respective Company will execute and deliver such further instruments and do
such further acts as may be reasonably necessary or proper to carry out more
effectively the purposes of this Indenture.
SECTION 4.05. MAINTENANCE OF OFFICE OR AGENCY. The Company will appoint in
the Borough of Manhattan, The City of New York, an office or agency where
Securities may be presented or surrendered for payment, where Securities may be
surrendered for registration of transfer, exchange, purchase, redemption or
conversion and where notices and demands to or upon the Company in respect of
the Securities and this Indenture may be served. The office or agency in the
Borough of Manhattan, the City of New York, shall be State Street Bank and Trust
Company, N.A., an Affiliate of the Trustee located at 61 Broadway, 15th Floor,
New York, New York 10006 (Attention: Corporate Trust Administration-Aspect
Telecommunications Corporation, Zero Coupon Convertible Subordinated Debentures
due 2018), and shall be the office or agency for all of the aforesaid purposes
unless the Company shall appoint some other office or agency for such purposes
and shall give prompt written notice to the Trustee of the location, and any
change in the location, of such other office or agency. If at any time the
Company shall fail to maintain any such
-33-
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.
The Company may also from time to time designate one or more other offices or
agencies where the Securities may be presented or surrendered for any or all
such purposes and may from time to time rescind such designations; provided,
however, that no such designation or rescission shall in any manner relieve the
Company of its obligation to maintain an office or agency in the Borough of
Manhattan, The City of New York, for such purposes.
SECTION 4.06. EXISTENCE. Subject to Article 5, 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, however, 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 Holders.
SECTION 4.07. 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, however, that nothing in this Section 4.07
-------- -------
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 Significant
Subsidiary and not disadvantageous in any material respect to the Holders.
SECTION 4.08. 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 Securities or with respect
to this Indenture; provided however, 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.
-34-
ARTICLE 5
SUCCESSOR CORPORATION
SECTION 5.0 WHEN THE COMPANY MAY MERGE OR TRANSFER ASSETS.
The Company shall not consolidate with or merge with or into any other Person
(other than in a merger or consolidation in which the Company is the surviving
Person) or convey, transfer or lease its properties and assets substantially as
an entirety to any Person, unless:
(i) the Person (if other than the Company) formed by such
consolidation or into which the Company is merged or the Person which acquires
by conveyance, transfer or lease the properties and assets of the Company
substantially as an entirety shall be a corporation, limited liability company,
partnership or trust organized and validly existing under the laws of the United
States or any State thereof or the District of Columbia, and shall expressly
assume by an indenture supplemental hereto, executed and delivered to the
Trustee in form reasonably satisfactory to the Trustee, the due and punctual
payment of the Principal Amount, Issue Price, accrued Original Issue Discount,
accrued Liquidated Damages, if any, Redemption Price, Purchase Price,
Fundamental Change Redemption Price or interest, if any, on the Securities,
according to their tenor, and the due and punctual performance of all of the
covenants and obligations of the Company under the Securities and this
Indenture, and shall have provided for conversion rights in accordance with this
Indenture;
(ii) immediately after giving effect to such transaction, no Default or
Event of Default shall have occurred and be continuing; and
(iii) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such consolidation,
merger, conveyance, transfer or lease and, if a supplemental indenture is
required in connection with such transaction, such supplemental indenture,
comply with this Article 5 and that all conditions precedent herein provided for
relating to such transaction have been satisfied.
The successor Person formed by such consolidation or into which the Company
is merged or the successor Person to which such conveyance, transfer or lease is
made shall succeed to, and be substituted for, and may exercise every right and
power of, the Company under this Indenture with the same effect as if such
successor had been named as the Company herein; and thereafter, except in the
case of a lease, the Company shall be discharged from all obligations and
covenants under this Indenture and the Securities.
-35-
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01. EVENTS OF DEFAULT. An "Event of Default" occurs if:
(1) the Company defaults in the payment of the Principal Amount, Issue
Price, accrued Original Issue Discount, accrued Liquidated Damages, if any,
Redemption Price, Purchase Price or a Fundamental Change Redemption Price on any
Security when the same becomes due and payable at its Stated Maturity, upon
redemption, upon declaration, when due for purchase by the Company or otherwise
(provided that in the case of a default in the payment of Liquidated Damages,
such default in payment of Liquidated Damages continues for a period of 30
days), whether or not such payment shall be prohibited by Article 10;
(2) the Company fails to comply with any of its agreements or covenants in
the Securities or this Indenture (other than those referred to in clause (1)
above) and such failure continues for 60 days after receipt by the Company of a
Notice of Default;
(3) a decree or order by a court having jurisdiction in the premises shall
have been entered adjudging the Company a bankrupt or insolvent, or approving as
properly filed a petition seeking reorganization of the Company under any
Bankruptcy Law, and such decree or order shall have continued undischarged and
unstayed for a period of 60 consecutive days; or a decree or order of a court
having jurisdiction in the premises of the appointment of a receiver or
liquidator or trustee or assignee in bankruptcy or insolvency of the Company or
of its property, or for the winding-up or liquidation of its affairs, shall have
been entered, and such decree or order shall have remained in force undischarged
and unstayed of a period of 60 consecutive days; or
(4) the Company shall institute proceedings to be adjudicated a voluntary
bankrupt, or shall consent to the filing of a bankruptcy proceeding against it,
or shall file a petition or answer or consent seeking reorganization under any
Bankruptcy Law, or shall consent to the filing of any such petition, or shall
consent to the appointment of a receiver or liquidator or trustee or assignee in
bankruptcy or insolvency of it or of its property or shall make an assignment
for the benefit of creditors, or shall admit in writing its inability to pay its
debts generally as they become due.
"Bankruptcy Law" means Title 11, United States Code, or any similar Federal
or state law for the relief of debtors.
A Default under clause (2) above is not an Event of Default until the Trustee
notifies the Company, or the Holders of at least 25% in aggregate Principal
Amount of the Securities at the time outstanding notify the Company and the
Trustee, of the Default and the Company does not cure such Default (and such
Default is not waived) within the time specified in clause (2) above after
actual receipt of such notice (a "Notice of Default"). Any such notice must
specify the Default, demand that it be remedied and state that such notice is a
Notice of Default.
-36-
SECTION 6.02. ACCELERATION. If an Event of Default (other than an Event of
Default specified in Section 6.01(3) or (4)) occurs and is continuing, the
Trustee by notice to the Company, or the Holders of at least 25% in aggregate
Principal Amount of the Securities at the time outstanding by notice to the
Company and the Trustee, may declare the Issue Price and accrued Original Issue
Discount to the date of declaration (and Liquidated Damages, if any) on all the
Securities to be immediately due and payable. Upon such a declaration, such
Issue Price and accrued Original Issue Discount shall become and be due and
payable immediately. If an Event of Default specified in Section 6.01(3) or (4)
occurs and is continuing, the Issue Price and accrued Original Issue Discount
(and Liquidated Damages, if any) on all the Securities shall become and be
immediately due and payable without any declaration or other act on the part of
the Trustee or any Holders. The Holders of a majority in aggregate Principal
Amount of the Securities at the time outstanding, by notice to the Company and
the Trustee (and without notice to any other Holder), may rescind an
acceleration and its consequences if the rescission would not conflict with any
judgment or decree and if all existing Events of Default have been cured or
waived except nonpayment of the Issue Price and accrued Original Issue Discount
(and Liquidated Damages, if any) that have become due solely as a result of
acceleration and if all amounts due to the Trustee under Section 7.07 have been
paid. No such rescission shall affect any subsequent or other Default or Event
of Default or impair any consequent right.
SECTION 6.03. OTHER REMEDIES. If an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy to collect the payment
of the Issue Price and accrued Original Issue Discount on the Securities or to
enforce the performance of any provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if the Trustee does not possess
any of the Securities or does not produce any of the Securities in the
proceeding. A delay or omission by the Trustee or any Holder in exercising any
right or remedy accruing upon an Event of Default shall not impair the right or
remedy or constitute a waiver of, or acquiescence in, the Event of Default. No
remedy is exclusive of any other remedy. All available remedies are cumulative.
SECTION 6.04. WAIVER OF PAST DEFAULTS. The Holders of a majority in
aggregate Principal Amount of the Securities at the time outstanding, by notice
to the Company and the Trustee (and without notice to any other Holder), may
waive an existing Default or Event of Default and its consequences except (1) an
Event of Default described in Section 6.01(l), (2) a Default in respect of a
provision that under Section 9.02 cannot be amended without the consent of each
Holder affected or (3) a Default that constitutes a failure to convert any
Security in accordance with the terms of Article 11. When a Default or Event of
Default is waived, it is deemed cured, but no such waiver shall extend to any
subsequent or other Default or Event of Default or impair any consequent right.
SECTION 6.05. CONTROL BY MAJORITY. The Holders of a majority in aggregate
Principal Amount of the Securities at the time outstanding may direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee or of exercising any trust or power conferred on the Trustee. However,
the Trustee may refuse to follow any direction that
-37-
conflicts with any law or this Indenture or that the Trustee determines in good
faith is unduly prejudicial to the rights of other Holders or would involve the
Trustee in personal liability unless the Trustee is offered indemnity
satisfactory to it.
SECTION 6.06. LIMITATION ON SUITS. A Holder may not pursue any remedy with
respect to this Indenture or the Securities unless:
(1) the Holder gives to the Company and the Trustee written notice stating
that an Event of Default is continuing;
(2) the Holders of at least 25% in aggregate Principal Amount of the
Securities at the time outstanding make a written request to the Trustee to
pursue the remedy;
(3) such Holder or Holders offer to the Trustee reasonable security or
indemnity against any loss, liability or expense satisfactory to the Trustee;
(4) the Trustee does not comply with the request within 60 days after
receipt of the notice, the request and the offer of security or indemnity; and
(5) the Holders of a majority in aggregate Principal Amount of the
Securities at the time outstanding do not give the Trustee a direction
inconsistent with the request during such 60 day period.
A Holder may not use this Indenture to prejudice the rights of any other
Holder or to obtain a preference or priority over any other Holder.
SECTION 6.07. RIGHTS OF HOLDERS TO RECEIVE PAYMENT. Notwithstanding any
other provision of this Indenture, but subject to Article 10, the right of any
Holder to receive payment of the Principal Amount, Issue Price, accrued Original
Issue Discount, Redemption Price, Purchase Price, Fundamental Change Redemption
Price or interest, if any, in respect of the Securities held by such Holder, on
or after the respective due dates expressed in the Securities or any date of
redemption and to convert the Securities in accordance with Article 11, or to
bring suit for the enforcement of any such payment on or after such respective
dates or the right to convert, shall not be impaired or affected adversely
without the consent of each such Holder.
SECTION 6.08. COLLECTION SUIT BY TRUSTEE. If an Event of Default described
in Section 6.01(1) occurs and is continuing, the Trustee may recover judgment in
its own name and as trustee of an express trust against the Company for the
whole amount owing with respect to the Securities and the amounts provided for
in Section 7.07.
SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM. In case of the pendency of
any receivership, insolvency, liquidation, bankruptcy, reorganization,
arrangement, adjustment, composition or other judicial proceeding relative to
the Company or any other obligor upon the Securities or the property of the
Company or of such other obligor or their creditors, the Trustee
-38-
(irrespective of whether the Principal Amount, Issue Price, accrued Original
Issue Discount, accrued Liquidated Damages, if any, Redemption Price, Purchase
Price, Fundamental Change Redemption Price or interest, if any, in respect of
the Securities shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Trustee shall have made
any demand on the Company for the payment of any such amount) shall be entitled
and empowered, by intervention in such proceeding or otherwise:
(a) to file and prove a claim for the whole amount of the Principal
Amount, Issue Price, accrued Original Issue Discount, accrued Liquidated
Damages, if any, Redemption Price, Purchase Price, Fundamental Change Redemption
Price or interest, if any, and to file such other papers or documents as may be
necessary or advisable in order to have the claims of the Trustee (including any
claim for the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel) and of the Holders allowed in such judicial
proceeding, and
(b) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
similar official in any such judicial proceeding is hereby authorized by each
Holder to make such payments to the Trustee and, in the event that the Trustee
shall consent to the making of such payments directly to the Holders, to pay the
Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 7.07.
If the Trustee does not file a claim or proof of debt in the form required in
such proceedings prior to 30 days before the expiration of the time to file such
claims or proofs, then any holder or holders of Senior Indebtedness or their
representative or representatives shall have the right to demand, sue for,
collect, receive and receipt for the payments and distributions in respect of
the Securities which are required to be paid or delivered to the holders of
Senior Indebtedness as provided in this Article and to file and prove all claims
therefor and to take all such other action in the name of the holders or
otherwise, as such holders of Senior Indebtedness or representative thereof may
determine to be necessary or appropriate for the enforcement of the provisions
of this Article.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof, or to authorize the Trustee to vote in
respect of the claims of any Holder in any such proceeding.
SECTION 6.10 PRIORITIES. If the Trustee collects any money pursuant to
this Article 6, it shall pay out the money in the following order:
First: to the Trustee for amounts due under Section 7.07;
-----
-39-
Second: to holders of Senior Indebtedness to the extent required by Article
------
10;
Third: to Holders for amounts due and unpaid on the Securities for the
-----
Principal Amount, Issue Price, accrued Original Issue Discount, accrued
Liquidated Damages, if any, Redemption Price, Purchase Price, Fundamental Change
Redemption Price or interest, if any, as the case may be, ratably, without
preference or priority of any kind, according to such amounts due and payable on
the Securities; and
Fourth: the balance, if any, to the Company.
------
The Trustee may fix a proposed record date and payment date for any payment
to Holders pursuant to this Section 6.10 and shall notify the Company in writing
with respect to such proposed record date and payment date. At least 15 days
before such record date, the Company (or the Trustee at the request of the
Company) shall mail to each Holder and the Trustee a notice that states the
record date, the payment date and amount to be paid.
SECTION 6.11. UNDERTAKING FOR COSTS. In any suit for the enforcement of
any right or remedy under this Indenture or in any suit against the Trustee for
any action taken or omitted by it as Trustee, a court in its discretion may
require the filing by any party litigant (other than the Trustee) in the suit of
an undertaking to pay the costs of the suit, and the court in its discretion may
assess reasonable costs, including reasonable attorneys' fees, against any party
litigant in the suit, having due regard to the merits and good faith of the
claims or defenses made by the party litigant. This Section 6.11 does not apply
to a suit by the Trustee, any suit by a Holder for the enforcement of the
payment of the Principal Amount, accrued Original Issue Discount, Redemption
Price, Purchase Price, Fundamental Change Redemption Price or interest, if any,
on or after the due date expressed in such Security or to any suit for the
enforcement of the right to convert the Security pursuant to Article 11, or a
suit by Holders of more than 10% in aggregate Principal Amount of the Securities
at the time outstanding.
SECTION 6.12. WAIVER OF STAY, EXTENSION OR USURY LAWS. The Company
covenants (to the extent that it may lawfully do so) that it will not at any
time insist upon, or plead, or in any manner whatsoever claim or take the
benefit or advantage of, any stay or extension law or any usury or other law
wherever enacted, now or at any time hereafter in force, which would prohibit or
forgive the Company from paying all or any portion of the Principal Amount,
Issue Price, accrued Original Issue Discount, accrued Liquidated Damages, if
any, Redemption Price, Purchase Price or Fundamental Change Redemption Price in
respect of Securities, or any interest on any such amounts, as contemplated
herein, or which may affect the covenants or the performance of this Indenture;
and the Company (to the extent that it may lawfully do so) hereby expressly
waives all benefit or advantage of any such laws and covenants that it will not
hinder, delay or impede the execution of any power herein granted to the
Trustee, but will suffer and permit the execution of every such power as though
no such law had been enacted.
-40-
ARTICLE 7
TRUSTEE
SECTION 7.0 DUTIES OF TRUSTEE.
(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise the rights and powers vested in it by this Indenture and use the
same degree of care and skill in its exercise as a prudent person would exercise
or use under the circumstances in the conduct of his or her own affairs.
(b) Except during the continuance of an Event of Default:
(1) the Trustee need perform only those duties that are specifically
set forth in this Indenture and no others; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon certificates or opinions furnished to the
Trustee and conforming to the requirements of this Indenture. However, the
Trustee shall examine the certificates and opinions to determine whether or not
they conform to the requirements of this Indenture.
This Section 7.01(b) shall be in lieu of Section 315(a) of the TIA and such
Section 315(a) is hereby expressly excluded from this Indenture, as permitted by
the TIA.
(c) The Trustee may not be relieved from liability for its own negligent
action, its own negligent failure to act or its own willful misconduct, except
that:
(1) this paragraph (c) does not limit the effect of paragraph (b)
of this Section 7.01;
(2) the Trustee shall not be liable for any error of judgment made in
good faith by a Trust Officer unless it is proved that the Trustee was negligent
in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction received by
it pursuant to Section 6.05.
Subparagraphs (c)(1),(2) and (3) shall be in lieu of Sections 315(d)(1),
315(d)(2) and 315(d)(3) of the TIA and such Sections 315(d)(1), 315(d)(2) and
315(d)(3) are hereby expressly excluded from this Indenture, as permitted by the
TIA.
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b), (c) and (e) of this Section 7.01.
-41-
(e) The Trustee may refuse to perform any duty or exercise any right or
power or extend or risk its own funds or otherwise incur any financial liability
unless it receives indemnity satisfactory to it against any loss, liability or
expense.
(f) Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law.
SECTION 7.02. RIGHTS OF TRUSTEE.
(a) The Trustee may rely on any document reasonably believed by it to be
genuine and to have been signed or presented by the proper Person. The Trustee
need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require a
Company Order, an Officers' Certificate or an Opinion of Counsel. The Trustee
shall not be liable for any action it takes or omits to take in good faith in
reliance on a Company Order, Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through agents and shall not be responsible for
the misconduct or negligence of any agent appointed with due care.
(d) Subject to the provisions of Section 7.01(c), the Trustee shall not be
liable for any action it takes or omits to take in good faith which it believes
to be authorized or within its rights or powers.
(e) The Trustee may consult with counsel selected by it and any advice or
Opinion of Counsel shall be full and complete authorization and protection in
respect of any action taken or suffered or omitted by it hereunder in good faith
and in accordance with such advice or Opinion of Counsel.
(f) The Trustee shall be under no obligation to exercise any of the rights
or powers vested in it by this Indenture, unless the Holders shall have offered
to the Trustee reasonable security or indemnity against the costs, expenses and
liabilities which may be incurred therein or thereby.
SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE. The Trustee in its individual
or any other capacity may become the owner or pledgee of Securities and may
otherwise deal with the Company or its Affiliates with the same rights it would
have if it were not Trustee. Any Paying Agent, Registrar, Conversion Agent or
co-registrar may do the same with the like rights. However, the Trustee must
comply with Sections 7.10 and 7.11.
SECTION 7.04. TRUSTEE'S DISCLAIMER. The Trustee makes no representation as
to the validity or adequacy of this Indenture or the Securities; it shall not be
accountable for Company's use of the proceeds from the Securities; and it shall
not be responsible for any statement in the
-42-
offering memorandum for the Securities or in this Indenture or the Securities
(other than its certificate of authentication), the acts of a prior Trustee
hereunder, or the determination as to which beneficial owners are entitled to
receive any notices hereunder.
SECTION 7.05. NOTICE OF DEFAULTS. If a Default occurs and is continuing
and if it is known to the Trustee, the Trustee shall give to each Holder notice
of the Default within 90 days after it occurs. Except in the case of a Default
described in Section 6.01(1), the Trustee may withhold the notice if and so long
as a committee of its Trust Officers in good faith determines that withholding
the notice is in the interests of Holders. The second sentence of this Section
7.05 shall be in lieu of the proviso to Section 315(b) of the TIA and such
provision is hereby expressly excluded from this Indenture, as permitted by the
TIA. The Trustee shall not give notice of a Default pursuant to Section 6.01(2)
until at least sixty days have passed since its occurrence.
SECTION 7.06. REPORTS BY TRUSTEE TO HOLDERS. Within 60 days after each May
1, beginning with the May 1 following the date of this Indenture, the Trustee
shall mail to each Holder a brief report dated as of such May 1 that complies
with TIA Section 313(a), if required by such Section 313(a). The Trustee also
shall comply with TIA Section 313(b).
A copy of each report at the time of its mailing to Holders shall be filed
with the SEC and each securities exchange on which the Securities are listed.
The Company agrees to notify the Trustee whenever the Securities become listed
on any securities exchange and of any delisting thereof.
SECTION 7.07. COMPENSATION AND INDEMNITY. The Company agrees:
(a) to pay to the Trustee from time to time reasonable compensation for
all services rendered by it hereunder (which compensation shall not be limited
by any provision of law in regard to the compensation of a trustee of an express
trust);
(b) to reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in accordance with
any provision of this Indenture (including the reasonable compensation and the
expense, advances and disbursements of its agents and counsel), except any such
expense, disbursement or advance as may be attributable to its negligence or bad
faith; and
(c) to indemnify the Trustee for, and to hold it harmless against, any
loss, liability or expense incurred without negligence or bad faith on its part,
arising out of or in connection with the acceptance or administration of this
trust, including the costs and expenses of defending itself against any claim or
liability in connection with the exercise or performance of any of its powers or
duties hereunder.
To secure the Company's payment obligations in this Section 7.07 the Trustee
shall have a lien prior to the Securities on all money or property held or
collected by the Trustee, except that held in trust to pay the Principal Amount,
Issue Price, accrued Original Issue Discount, accrued Liquidated
-43-
Damages, if any, Redemption Price, Purchase Price, Fundamental Change Redemption
Price or interest, if any, as the case may be, on particular Securities.
The Company's payment obligations pursuant to this Section 7.07 shall survive
the discharge of this Indenture. When the Trustee incurs expenses after the
occurrence of a Default specified in Section 6.01(3) or (4), the expenses are
intended to constitute expenses of administration under any Bankruptcy Law.
SECTION 7.0 REPLACEMENT OF TRUSTEE. The Trustee may resign by so
notifying the Company; provided, however, that no such resignation shall be
effective until a successor Trustee has accepted its appointment pursuant to
this Section 7.08. The Holders of a majority in aggregate Principal Amount of
the Securities at the time outstanding may remove the Trustee by so notifying
the Trustee and may appoint a successor Trustee. The Company shall remove the
Trustee if:
(1) the Trustee fails to comply with, or ceases to be eligible under,
Section 7.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or public officer takes charge or control of the Trustee or
its property or affairs; or
(4) the Trustee otherwise in the Company's reasonable judgement becomes
incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the office of
Trustee for any reason, the Company shall promptly appoint, by resolution of its
Board of Directors, a successor Trustee.
Every successor Trustee appointed hereunder shall execute, acknowledge and
deliver to the Company and to the retiring Trustee an instrument accepting such
appointment, and thereupon the resignation or removal of the retiring Trustee
shall become effective and such successor Trustee, without any further act, deed
or conveyance, shall become vested with all the rights, powers, trusts and
duties of the retiring Trustee; but, on the request of the Company or the
successor Trustee, such retiring Trustee shall, upon payment of its charges,
execute and deliver an instrument transferring to such successor Trustee all the
rights, powers and trusts of the retiring Trustee and shall duly assign,
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder, subject to the lien provided for in Section
7.07. Upon request of any such successor Trustee, the Company shall execute any
and all instruments for more fully and certainly vesting in and confirming to
such successor Trustee all such rights, powers and trusts. No successor Trustee
shall accept its appointment unless at the time of such acceptance such
successor Trustee shall be eligible under this Article.
If a successor Trustee does not take office within 30 days after the retiring
Trustee resigns or is removed, the retiring Trustee, the Company or the Holders
of a majority in aggregate Principal
-44-
Amount of the Securities at the time outstanding may petition any court of
competent jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any Holder may petition any
court of competent jurisdiction for the removal of the Trustee and the
appointment of a successor Trustee.
SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER. If the Trustee consolidates
with, merges or converts into, or transfers all or substantially all its
corporate trustee business (including the trust created by this Indenture) or
assets to, another corporation, the resulting, surviving or transferee
corporation without any further act shall be the successor Trustee hereunder,
provided such corporation shall be otherwise eligible under this Article,
- --------
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Securities shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Securities so authenticated with the same
effect as if such successor Trustee had itself authenticated such Securities.
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION. The Trustee shall at all
times satisfy the requirements of TIA Sections 310(a)(1) and 310(b). The
Trustee shall have a combined capital and surplus of at least $50,000,000 (or if
the Trustee 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) as
set forth in its most recent published annual report of conditions. Nothing
herein contained shall prevent the Trustee from filing with the SEC the
application referred to in the penultimate paragraph of TIA Section 310(b). If
at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section 7.10, it shall correct such ineligibility or resign
immediately in the manner and with the effect specified in this Article 7.
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY. The
Trustee shall comply with TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated therein.
ARTICLE 8
DISCHARGE OF INDENTURE
SECTION 8.01. DISCHARGE OF LIABILITY ON SECURITIES. When (i) the Company
delivers to the Trustee all outstanding Securities (other than Securities
replaced pursuant to Section 2.07) for cancellation or (ii) all outstanding
Securities have become due and payable and the Company deposits with the Trustee
Cash and/or securities, as permitted by the terms hereof, sufficient to pay at
Stated Maturity the Principal Amount of all outstanding Securities (other than
Securities replaced pursuant to Section 2.07), and if in either case the Company
pays all other sums payable hereunder by the Company, then this Indenture shall,
subject to Section 7.07, cease to be of further
-45-
effect. The Trustee shall join in the execution of a document prepared by the
Company acknowledging satisfaction and discharge of this Indenture on demand of
the Company accompanied by an Officers' Certificate and Opinion of Counsel and
at the cost and expense of the Company.
SECTION 8.02. REPAYMENT TO THE COMPANY. The Trustee and the Paying Agent
shall return to the Company upon written request any money or securities held by
them for the payment of any amount with respect to the Securities that remains
unclaimed for two years; provided, however, that the Trustee or such Paying
Agent, before being required to make any such return, shall, in the event that
the Securities are no longer held in global form, at the expense of the Company
cause to be published once in a newspaper of general circulation in The City of
New York or mail to each such Holder notice that such money or securities
remains unclaimed and that, after a date specified therein, which shall not be
less than 30 days from the date of such publication or mailing, any unclaimed
money or securities then remaining will be returned to the Company. After
return to the Company, Holders entitled to the money or securities must look to
the Company for payment as general creditors unless an applicable abandoned
property law designates another Person.
ARTICLE 9
AMENDMENTS
SECTION 9.01. WITHOUT CONSENT OF HOLDERS. The Company and the Trustee may
amend this Indenture and the Securities without the consent of any Holder:
(1) to cure any ambiguity or to correct or supplement any provision
contained herein or in any supplemental indenture which may be defective or
inconsistent with any other provision contained herein or in any supplemental
indenture, or to make such other provisions with regard to matters or questions
arising under this Indenture which shall not materially affect the interests of
the Holders;
(2) to comply with Article 5 or Section 11.14;
(3) to provide for uncertificated Securities in addition to certificated
Securities so long as such uncertificated Securities are in registered form for
purposes of the Internal Revenue Code of 1986, as amended;
(4) to make any change that does not adversely affect the right of any
Holder; or
(5) to make any change to comply with the TIA, or any amendment thereto,
or to comply with any requirement of the SEC in connection with the
qualification, if any, of the Indenture under the TIA.
-46-
SECTION 9.02 WITH CONSENT OF HOLDERS. The Company and the Trustee, with
the written consent of the Holders of at least a majority in aggregate Principal
Amount of the Securities at the time outstanding, may amend this Indenture or
the Securities. However, without the consent of each Holder affected, an
amendment or supplement to this Indenture or the Securities may not:
(1) make any change to the Principal Amount of Securities whose Holders
must consent to an amendment;
(2) make any change to the manner or rate of accrual in connection with
Original Issue Discount or interest, if any, reduce the rate of interest
referred to in paragraph 1 of the Securities or extend the time for payment of
Original Issue Discount or interest, if any, on any Security;
(3) reduce the Principal Amount or the Issue Price of or extend the Stated
Maturity of any Security;
(4) reduce the Redemption Price, Purchase Price or Fundamental Change
Redemption Price of any Security;
(5) make any Security payable in money or securities other than that
stated in the Security;
(6) make any change in Article 10 that adversely affects the rights of any
Securityholder;
(7) make any change in Section 6.04, Section 6.07 or this Section 9.02,
except to increase any such percentage;
(8) make any change that adversely affects the right to convert any
Security; or
(9) make any change that adversely affects the right to require the
Company to purchase the Securities, or the right to require the Company to
redeem the Securities upon a Fundamental Change, in accordance with the terms
thereof and this Indenture.
It shall not be necessary for the consent of the Holders under this Section
9.02 to approve the particular form of any proposed amendment, but it shall be
sufficient if such consent approves the substance thereof.
An amendment under this Section 9.02 or Section 9.01 may not make any change
that adversely affects the rights under Article 10 of any holder of Senior
Indebtedness then outstanding unless the requisite holders of such Senior
Indebtedness consent to such change pursuant to the terms of such Senior
Indebtedness.
After an amendment under this Section 9.02 becomes effective, the Company
shall mail to each Holder a notice briefly describing the amendment.
-47-
SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT. Every supplemental
indenture executed pursuant to this Article 9 shall comply with the TIA as then
in effect, if then required to so comply.
SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS, WAIVERS AND ACTIONS.
Until an amendment, waiver or other action becomes effective, a consent to it or
any other action by a Holder of a Security is a continuing consent by the Holder
and every subsequent Holder of that Security or portion of the Security that
evidences the same obligation as the consenting Holder's Security, even if
notation of the consent, waiver or action is not made on the Security. However,
any such Holder or subsequent Holder may revoke the consent, waiver or action as
to such Holder's Security or portion of the Security if the Trustee receives the
notice of revocation before the date the amendment, waiver or action becomes
effective. After an amendment, waiver or action becomes effective, it shall
bind every Holder.
SECTION 9.05. NOTATION ON OR EXCHANGE OF SECURITIES. Securities
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article 9 may, and shall if required by the Trustee, bear a
notation in form approved by the Trustee as to any matter provided for in such
supplemental indenture. If the Company shall so determine, new Securities so
modified as to conform, in the opinion of the Trustee and the Board of
Directors, to any such supplemental indenture may be prepared and executed by
the Company and authenticated and delivered by the Trustee in exchange for
outstanding Securities.
SECTION 9.06. TRUSTEE TO SIGN SUPPLEMENTAL INDENTURES. The Trustee shall
sign any supplemental indenture authorized pursuant to this Article 9 if the
amendment does not adversely affect the rights, duties, liabilities or
immunities of the Trustee. If it does, the Trustee may, but need not, sign such
supplemental indenture. In signing such amendment the Trustee shall be entitled
to receive, and (subject to the provisions of Section 7.01) shall be fully
protected in relying upon, an Officers' Certificate and an Opinion of Counsel
stating that such amendment is authorized or permitted by this Indenture.
SECTION 9.07. EFFECT OF SUPPLEMENTAL INDENTURES. Upon the execution of any
supplemental indenture under this Article 9, this Indenture shall be modified in
accordance therewith, and such supplemental indenture shall form a part of this
Indenture for all purposes; and every Holder of Securities theretofore or
thereafter authenticated and delivered hereunder shall be bound thereby.
ARTICLE 10
SUBORDINATION
SECTION 10.01. AGREEMENT OF SUBORDINATION. The Company covenants and agrees
for itself and its successors, and each Holder of Securities issued hereunder by
such Holder's acceptance thereof likewise covenants and agrees, that all
Securities shall be issued subject to the provisions of
-48-
this Article 10; and each Person holding any such Security whether upon original
issue or upon transfer or assignment thereof, accepts and agrees to be bound by
such provisions.
The payment of the Principal Amount, Issue Price, accrued Original Issue
Discount, accrued Liquidated Damages, if any, Redemption Price, Purchase Price,
Fundamental Change Redemption Price, interest and any other amounts payable, if
any, in respect of all Securities 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 in cash or other payment satisfactory to
the holders of Senior Indebtedness of all Senior Indebtedness of the Company,
whether outstanding at the date of this Indenture or thereafter incurred, or
thereafter created, assumed or guaranteed.
No provision of this Article 10 shall prevent the occurrence of any Default
or Event of Default hereunder.
SECTION 10.02. PAYMENTS TO HOLDERS. No payment shall be made with respect
to the payment of Principal Amount, Issue Price, accrued Liquidated Damages, if
any, accrued Original Issue Discount, Redemption Price, Purchase Price,
Fundamental Change Redemption Price, interest and any other amounts payable, if
any, on the Securities, except payments and distributions made by the Trustee as
permitted by Section 10.05, if:
(i) a default in any payment obligations in respect of
Senior Indebtedness occurs and is continuing, without regard to any applicable
period of grace (whether at maturity or at a date fixed for payment or by
declaration or otherwise); or
(ii) any other default occurs and is continuing with respect
to Designated Senior Indebtedness that permits the holders of such Designated
Senior Indebtedness as to which such default relates to accelerate its maturity
and the Trustee receives a notice of the default (a "Payment Blockage Notice")
from a holder of Designated Senior Indebtedness, or a Representative of
Designated Senior Indebtedness.
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 unless and until at least 365 days shall have elapsed
since the initial effectiveness of the immediately prior Payment Blockage
Notice. No nonpayment 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 unless such default shall have
been cured or waived for a period of not less than 90 days (it being
acknowledged that (x) any action of the Company or any of its Subsidiaries
occurring subsequent to delivery of a Payment Blockage Notice that would give
rise to any event of default pursuant to any provision of Senior Indebtedness
under which an event of default previously existed (or was continuing at the
time of delivery of such Payment Blockage Notice) shall constitute a new event
of default for this purpose and (y) any breach of a financial covenant giving
rise to a nonpayment default for a period ending subsequent to the date of
delivery of the respective Payment Blockage Notice shall constitute a new event
of default for this purpose.)
-49-
The Company may and shall resume payments on and distributions in respect
of the Securities upon the earlier of:
(1) in case of a default referred to in clause (i) above, the date upon
which the default is cured or waived in accordance with the terms of the
governing instrument or ceases to exist, or
(2) in the case of a default referred to in clause (ii) above, the date
upon which the default is cured, waived in accordance with the terms of the
governing instrument or ceases to exist or 179 days pass after the applicable
Payment Blockage Notice is received if the maturity of such Designated Senior
Indebtedness has not been accelerated,
unless this Article 10 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 or
bankruptcy of the Company, whether voluntary or involuntary or insolvency,
receivership or similar proceedings relating to the Company or its property, or
an assignment for the benefit of creditors or any marshaling of the Company's
assets or liabilities, all amounts due or to become due upon all Senior
Indebtedness of the Company shall first be paid in full in cash or other payment
satisfactory to the holders of such Senior Indebtedness before any payment is
made on account of the Principal Amount, Issue Price, accrued Original Issue
Discount, accrued Liquidated Damages, if any, Redemption Price, Purchase Price,
Fundamental Change Redemption Price, interest or any other amounts payable, if
any, in respect of the Securities (except payments made pursuant to Article 8
hereof from monies deposited with the Trustee pursuant thereto prior to the
happening of such dissolution or winding-up or liquidation or reorganization or
bankruptcy of the Company, whether voluntary or involuntary or insolvency,
receivership or similar proceedings relating to the Company or its property, or
an assignment of the benefit of creditors or any marshaling of the Company's
assets or liabilities), and upon any such dissolution or winding-up or
liquidation or reorganization or bankruptcy of Company, whether voluntary or
involuntary or insolvency, receivership or similar proceedings relating to the
Company or its property, or an assignment of the benefit of creditors or any
marshalling of the Company's assets or liabilities, 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 Securities or the
Trustee would be entitled, except for the provisions of this Article 10, 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 Securities or by the Trustee under this
Indenture if received by them or it, directly to the holders of Senior
Indebtedness of the Company as their interests may appear or their
representative or representatives, or to the trustee or trustees under any
indenture pursuant to which any instruments evidencing any such Senior
Indebtedness may have been issued, as their respective interests may appear to
the extent necessary to pay all such 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
-50-
holders of such Senior Indebtedness, before any payment or distribution is made
to the Holders of the Securities or to the Trustee.
In the event that any Securities are declared due and payable before their
Stated Maturity pursuant to Section 6.02, then and in such event the Company
shall promptly notify holders of its Senior Indebtedness of such acceleration.
The Company may not pay the Securities until 120 days have passed after such
acceleration occurs and may thereafter pay the Securities only to the extent
that this Article 10 permits the payment at that time.
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 10.02, shall
be received by the Trustee or the Holders of the Securities before all Senior
Indebtedness of the Company is paid in full 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 of the Company or their
representative or representatives, or to the trustee or trustees under any
indenture pursuant to which any instruments evidencing any such Senior
Indebtedness may have been issued, as their respective interests may appear, as
calculated by the Company, for application to the payment of all such Senior
Indebtedness remaining unpaid to the extent necessary to pay all such 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.
For purposes of this Article 10, 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 10 with respect to
the Securities to the payment of all Senior Indebtedness of the Company which
may at the time be outstanding; provided that (i) such Senior Indebtedness is
--------
assumed by the new corporation, if any, resulting from any such reorganization
or readjustment, and (ii) the rights of the holders of such Senior Indebtedness
(other than leases that 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 corporation upon the
terms and conditions provided for in Article 5 hereof shall not be deemed a
dissolution, winding-up, liquidation or reorganization for the purposes of this
Section 10.02 if such other corporation shall, as a part of such consolidation,
merger, conveyance or transfer, comply with the conditions stated in Article 5
hereof.
Nothing in this Section 10.02 shall apply to claims of, or payments to, the
Trustee under or pursuant to Section 7.07. This Section 10.02 shall be subject
to the further provisions of Section 10.05.
-51-
SECTION 10.03. SUBROGATION OF SECURITIES. Subject to the payment in full in
cash or other payment satisfactory to the holders of Senior Indebtedness of all
Senior Indebtedness of the Company, the rights of the Holders of the Securities
shall be subrogated to the rights of the holders of such Senior Indebtedness to
receive payments or distributions of cash, property or securities of the Company
applicable to such Senior Indebtedness until the Principal Amount, Issue Price,
accrued Original Issue Discount, accrued Liquidated Damages, if any, Redemption
Price, Purchase Price, Fundamental Change Redemption Price and interest, if any,
in respect of the Securities shall be paid in full; and, for the purposes of
such subrogation, no payments or distributions to the holders of such Senior
Indebtedness of any cash, property or securities to which the Holders of the
Securities or the Trustee would be entitled except for the provisions of this
Article 10, and no payment over pursuant to the provisions of this Article 10,
to or for the benefit of the holders of such Senior Indebtedness by Holders of
the Securities or the Trustee, shall, as between the Company, its creditors
other than holders of its Senior Indebtedness, and the Holders of the Securities
be deemed to be a payment by the Company to or on account of its 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 10, 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 Securities. It is understood that the provisions of
this Article 10 are and are intended solely for the purpose of defining the
relative rights of the Holders of the Securities, on the one hand, and the
holders of Senior Indebtedness, on the other hand.
Nothing contained in this Article 10 or elsewhere in this Indenture or in the
Securities is intended to or shall impair, as between the Company, its creditors
other than the holders of its Senior Indebtedness and the Holders of the
Securities, the obligation of the Company, which is absolute and unconditional,
to pay to the Holders of the Securities the Principal Amount, Issue Price,
accrued Original Issue Discount, accrued Liquidated Damages, if any, Redemption
Price, Purchase Price, Fundamental Change Redemption Price and interest, if any,
in respect of the Securities 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 Securities and creditors of the Company other than
the holders of its Senior Indebtedness, nor shall anything herein or therein
prevent the Trustee or the Holder of any Security from exercising all remedies
otherwise permitted by applicable law upon default under this Indenture, subject
to the rights, if any, under this Article 10 of the holders of Senior
Indebtedness in respect of cash, property or securities of the Company received
upon the exercise of any such remedy.
Upon any payment or distribution of assets of the Company referred to in this
Article 10, the Trustee, subject to the provisions of Section 7.01, and the
Holders of the Securities shall be entitled to rely upon any order or decree
made by any court of competent jurisdiction in which such dissolution, winding-
up, liquidation or reorganization proceedings are pending, or a certificate of
the receiver, trustee in bankruptcy, liquidating trustee, agent or other Person
making such payment or distribution, delivered to the Trustee, to the Holders of
the Securities for the purpose of ascertaining the Persons entitled to
participate in such distribution, the holders of the Senior Indebtedness and
other indebtedness of the Company, the amount thereof or payable thereon, the
-52-
amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article 10.
SECTION 10.04. AUTHORIZATION BY HOLDERS. Each Holder of a Security by such
Holder's acceptance thereof authorizes and directs the Trustee in his behalf to
take such action as may be necessary or appropriate to effectuate the
subordination provided in this Article 10 and appoints the Trustee such Holder's
attorney-in-fact for any and all such purposes.
SECTION 10.05. NOTICE TO TRUSTEE. The Company shall give prompt written
notice in a form of an Officers' Certificate to a Trust Officer of any fact
known to the Company which would prohibit the making of any payment of monies to
or by the Trustee or any Paying Agent in respect of the Securities pursuant to
the provisions of this Article 10, but failure to give such notice shall not
affect the subordination of the Securities to the Senior Indebtedness as
provided in this Article 10. Notwithstanding the provisions of this Article 10
or any other provision of this Indenture, the Trustee shall not be charged with
knowledge of the existence of any facts which would prohibit the making of any
payment of monies to or by the Trustee in respect of the Securities pursuant to
the provisions of this Article 10, unless and until a Trust Officer shall have
received written notice thereof at the Corporate Trust Office from the Company
(in the form of an Officers' Certificate) or a holder or holders of Senior
Indebtedness or a Representative or from any trustee therefor; and before the
receipt of any such written notice, the Trustee, subject to the provisions of
Section 7.01, shall be entitled in all respects to assume that no such facts
exist; provided that if on a date not fewer than two 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 Amount,
Issue Price, accrued Original Issue Discount, accrued Liquidated Damages, if
any, Redemption Price, Purchase Price, Fundamental Change Redemption Price,
interest or any other amounts payable, if any, in respect of any Security) the
Trustee shall not have received, with respect to such monies, the notice
provided for in this Section 10.05, then, anything herein contained to the
contrary notwithstanding, the Trustee shall have full power and authority to
receive such monies and to apply the same to the purpose for which they were
received, and shall not be affected by any notice to the contrary which may be
received by it on or after such prior date.
Notwithstanding anything to the contrary herein set forth, nothing shall
prevent any payment of amounts deposited with the Trustee pursuant to Section
8.01 so long as the Trustee had no notice that such amounts when so deposited
were prohibited pursuant to the provisions of Section 10.2.
The Trustee, subject to the provisions of Section 7.01, shall be entitled to
rely on the delivery to it of a written notice by a Person representing himself
to be a holder or a Representative of Designated Senior Indebtedness or a
Representative of Senior Indebtedness of the Company (or a trustee on behalf of
such holder) to establish that such notice has been given by a holder or a
Representative of Designated Senior Indebtedness or a Representative of such
Senior Indebtedness or a trustee on behalf of any such holder or holders. In
the event that the Trustee determines in good faith that further evidence is
required with respect to the right of any Person as a holder of
-53-
Senior Indebtedness of the Company to participate in any payment or distribution
pursuant to this Article 10, the Trustee may request such Person to furnish
evidence to the reasonable satisfaction of the Trustee as to the amount of such
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 10, and if such
evidence is not furnished the Trustee may defer any payment to such Person
pending judicial determination as to the right of such Person to receive such
payment.
SECTION 10.06. TRUSTEE'S RELATION TO SENIOR INDEBTEDNESS. The Trustee in
its individual capacity shall be entitled to all the rights set forth in this
Article 10 in respect of any Senior Indebtedness of the Company at any time held
by it, to the same extent as any other holder of such Senior Indebtedness, and
nothing 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 of the Company, the
Trustee undertakes to perform or to observe only such of its covenants and
obligations as are specifically set forth in this Article 10, and no implied
covenants or obligations with respect to the holders of such 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 of the
Company and, subject to the provisions of Section 7.01, the Trustee shall not be
liable to any holder of such Senior Indebtedness if it shall pay over or deliver
to Holders of Securities, the Company or any other Person money or assets to
which any holder of Senior Indebtedness of the Company shall be entitled by
virtue of this Article 10 or otherwise.
SECTION 10.07. NO IMPAIRMENT OF SUBORDINATION. No right of any present or
future holder of any Senior Indebtedness of the Company to enforce subordination
as herein provided shall at any time in any way be prejudiced or impaired by (i)
any amendment of or addition or supplement to any such Senior Indebtedness or
any instrument or agreement relating thereto (unless otherwise expressly
provided therein), or (ii) 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 the
instrument, regardless of any knowledge thereof which any such holder may have
or otherwise be charged with or (iii) a failure to act by any Holders of
Securities or the failure of such Holder to comply with this Indenture.
SECTION 10.08. RELIANCE BY HOLDERS OF SENIOR INDEBTEDNESS ON SUBORDINATION
PROVISIONS. Each Holder of Securities by such Holder's acceptance thereof,
acknowledges and agrees that the foregoing subordination provisions are, and are
intended to be, an inducement and a consideration to each holder of any Senior
Indebtedness of the Company, whether such Senior Indebtedness was created,
assumed or acquired before or after the issuance of the Securities, to acquire
and continue to hold, or to continue to hold, such Senior Indebtedness and such
holder of Senior Indebtedness shall be deemed conclusively to have relied on
such subordination provisions in acquiring and continuing to hold, or in
continuing to hold, such Senior Indebtedness, and no amendment or modification
of the provisions contained herein shall diminish the rights of such holder or
holders unless such holder or holders shall have agreed in writing thereto.
-54-
SECTION 10.09. REINSTATEMENT OF SUBORDINATION. If, at any time, all or part
of any payment of any Senior Indebtedness theretofore made by the Company or any
other Person is rescinded or must otherwise be returned by the holders of such
Senior Indebtedness for any reason whatsoever (including, without limitation,
the insolvency, bankruptcy or reorganization of the Company or such other
Person), these subordination provisions shall continue to be effective or be
reinstated, as the case may be, all as though such payment had not been made.
SECTION 10.10. PERMITTED PAYMENTS. Nothing contained in this Article 10 or
elsewhere in this Indenture, or in the Securities shall prevent (a) the Company
at any time, except under the conditions described in Section 10.02, from making
payments at any time of Principal Amount, Issue Price, accrued Original Issue
Discount, accrued Liquidated Damages, if any, Redemption Price, Purchase Price,
Fundamental Change Redemption Price or interest or any other amounts payable, if
any, in respect of the Securities, or from depositing with the Trustee or any
Paying Agent money for such payments, or (b) the application by the Trustee or
Paying Agent of any moneys deposited with it under this Indenture to the payment
of or on account of the Principal Amount, Issue Price, accrued Original Issue
Discount, accrued Liquidated Damages, if any, Redemption Price, Purchase Price,
Fundamental Change Redemption Price or interest or any other amounts payable, if
any, in respect of the Securities to the Holders of the Securities entitled
thereto to the beneficiaries thereof, if such payment would not have been
prohibited by the provisions of Section 10.02.
SECTION 10.11. 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 10 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 10 in addition to or
in place of the Trustee; provided, however, that the first paragraph of Section
-------- -------
10.05 shall not apply to the Company or any Affiliate of the Company if it or
such Affiliate acts as Paying Agent.
SECTION 10.12. TREATMENT OF CONVERSION PAYMENTS. Notwithstanding anything
in this Indenture to the contrary, neither the issuance and delivery of junior
securities upon conversion of the Securities in accordance with Article 11 nor
the payment of cash in lieu of fractional shares of Common Stock in accordance
with Article 11 shall be deemed to constitute a payment or distribution on
account of the Principal Amount, Issue Price, accrued Original Issue Discount,
accrued Liquidated Damages, if any, Redemption Price or Fundamental Change
Purchase Price or interest or any other amounts payable, if any, in respect of
the Securities. For the purposes of this paragraph, the term "junior
securities" means (a) shares of any stock of any class of the Company, (b)
securities of the Company which are subordinated in right of payment to all
Senior Indebtedness of the Company which 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 Securities are so subordinated as provided in this
Article 10, and (c) any securities into which the Securities become convertible
pursuant to Section 11.14 which are securities of a Person required to enter
into a supplemental indenture pursuant to such section (or Section 5.01) and are
either (x) shares of any stock of any class of such Person, or (y) securities of
such Person which are subordinated in right
-55-
of payment to all Senior Indebtedness of such Person which 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 Securities or, are so subordinated
as provided in this Article 10. Nothing contained in this Article or elsewhere
in this Indenture or in the Securities is intended to or shall impair, as among
the Company, its creditors other than the holders of Senior Indebtedness, and
the holders of the Securities, the right, which is absolute and unconditional,
of the holder of any Security to convert such Security in accordance with
Article 11.
SECTION 10.13. RELIANCE ON JUDICIAL ORDER OR CERTIFICATE OF LIQUIDATING
AGENT. Upon any payment or distribution of assets of the Company referred to in
this Article 10, the Trustee and the Holders of Securities 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 Holders of
Securities, 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 10.
ARTICLE 11
CONVERSION
SECTION 11.01. CONVERSION PRIVILEGE. A Holder of a Security may convert
such Security for Common Stock at any time during the period stated in paragraph
9 of the Securities. The number of shares of Common Stock issuable upon
conversion of a Security per $1,000 of Principal Amount thereof (the "Conversion
Rate") shall be that set forth in paragraph 9 in the Securities, subject to
adjustment as herein set forth.
A Holder may convert a portion of the Principal Amount of a Security if the
portion is $1,000 or an integral multiple of $1,000. Provisions of this
Indenture that apply to conversion of all of a Security also apply to conversion
of a portion of a Security.
SECTION 11.02. CONVERSION PROCEDURE. To convert a Security a Holder must
satisfy the requirements in paragraph 9 of the Securities. The date on which
the Holder of Securities satisfies all those requirements is the conversion date
(the "Conversion Date"). As soon as practicable after the Conversion Date the
Company shall deliver to the Holder, through the Conversion Agent, a certificate
for the number of full shares of Common Stock issuable upon the conversion and
Cash in lieu of any fractional share determined pursuant to Section 11.03. The
Person in whose name the certificate is registered shall be treated as the
stockholder of record on and after the Conversion Date; provided, however, that
-------- -------
no surrender of a Security on any date when the stock transfer books of the
Company shall be closed shall be effective to constitute the Person or Persons
entitled to
-56-
receive the shares of Common Stock upon such conversion as the record holder or
holders of such shares of Common Stock on such date, but such surrender shall be
effective to constitute the Person or Persons entitled to receive such shares of
Common Stock as the record holder or holders thereof for all purposes at the
close of business on the next succeeding day on which such stock transfer books
are open; such conversion shall be at the Conversion Rate in effect on the date
that such Security shall have been surrendered for conversion, as if the stock
transfer books of the Company had not been closed. Upon conversion of a
Security, such Person shall no longer be a Holder of such Security.
No payment on the Securities or adjustment of the Conversion Rate will be
made for dividends on or other distributions with respect to any Common Stock
except as provided in this Article 11. On conversion of a Security, that
portion of accrued Original Issue Discount attributable to the period from the
Issue Date of the Security to the Conversion Date with respect to the converted
Security shall not be canceled, extinguished or forfeited, but rather shall be
deemed to be paid in full to the Holder thereof through delivery of the Common
Stock (together with the Cash payment, if any, in lieu of fractional shares) in
exchange for the Security being converted pursuant to the provisions hereof.
If a Holder converts more than one Security at the same time, the number of
shares of Common Stock issuable upon the conversion shall be based on the total
Principal Amount of the Securities converted.
Upon surrender of a Security that is converted in part, the Company shall
execute, and the Trustee shall authenticate and deliver to the Holder, a new
Security in an authorized denomination equal in Principal Amount to the
unconverted portion of the Security surrendered.
If the last day on which a Security may be converted is a Legal Holiday in a
place where a Conversion Agent is located, the Security may be surrendered to
that Conversion Agent on the next succeeding day that it is not a Legal Holiday.
SECTION 11.03. FRACTIONAL SHARES. The Company will not issue a fractional
share of Common Stock upon conversion of a Security. Instead the Company will
deliver Cash for the current market value of the fractional share. The current
market value of a fractional share shall be determined to the nearest 1/10,000th
of a share by multiplying the last reported sale price (determined as set forth
in the definition of Current Market Price) on the last Trading Day prior to the
Conversion Date of a full share by the fractional amount and rounding the
product to the nearest whole cent.
SECTION 11.04. TAXES ON CONVERSION. If a Holder converts a Security, the
Company shall pay any documentary, stamp or similar issue or transfer tax due on
the issue of shares of Common Stock upon the conversion. However, the Holder
shall pay any such tax which is due because the Holder requests the shares to be
issued in a name other than the Holder's name. The Conversion Agent may refuse
to deliver the certificates representing the Common Stock being issued in a name
other than the Holder's name until the Conversion Agent receives a sum
sufficient to pay any tax
-57-
which will be due because the shares are to be issued in a name other than the
Holder's name. Nothing herein shall preclude any tax withholding required by law
or regulations.
SECTION 11.05. COMPANY TO PROVIDE STOCK. The Company shall, prior to
issuance of any Securities hereunder, and from time to time as may be necessary,
reserve out of its authorized but unissued Common Stock a sufficient number of
shares of Common Stock to permit the conversion of the Securities.
All shares of Common Stock delivered upon conversion of the Securities shall
be newly issued shares or treasury shares, shall be duly and validly issued and
fully paid and nonassessable and shall be free from preemptive rights and free
of any lien or adverse claim.
The Company covenants that if any shares of Common Stock to be provided for
the purpose of conversion of Securities hereunder require registration with or
approval of any governmental authority under any federal or state law before
such shares may be validly issued upon conversion, the Company will in good
faith and as expeditiously as possible 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
quoted or listed on the Nasdaq National Market or the NYSE or any other
automated quotation system or national securities exchange or the Company will,
if permitted by the rules of such automated quotation system or exchange, list
and keep listed, so long as the Common Stock shall be so listed on such
automated quotation system or exchange, all shares of Common Stock issuable upon
conversion of the Securities; provided, however, that if the rules of such
-------- -------
automated quotation system or exchange permit the Company to defer the listing
of such Common Stock until the first conversion of the Securities into Common
Stock in accordance with the provisions of this Indenture, the Company covenants
to list such Common Stock issuable upon conversion of the Securities in
accordance with the requirements of such automated quotation system or exchange
at such time.
SECTION 11.06. ADJUSTMENT FOR CHANGE IN CAPITAL STOCK. In case the Company
shall (i) pay a dividend, or make a distribution, in shares of its Common Stock,
on its Common Stock, (ii) subdivide its outstanding Common Stock into a greater
number of shares, or (iii) combine its outstanding Common Stock into a smaller
number of shares, the Conversion Rate in effect immediately prior thereto shall
be adjusted so that the holder of any Security thereafter surrendered for
conversion shall be entitled to receive the number of shares of Common Stock
which such Holder would have owned or have been entitled to receive after the
occurrence of any of the events described above had such Security been converted
immediately prior to the occurrence of such event. If any dividend or
distribution of the type described in clause (i) above is not so paid or made,
the Conversion Rate shall again be adjusted to the Conversion Rate which would
then be in effect if such dividend as distribution had not been declared. An
adjustment made pursuant to this Section 11.06 shall become effective
immediately after the record date in the case of a dividend and still shall
become effective immediately after the effective date in the case of a
subdivision or combination.
-58-
SECTION 11.07. ADJUSTMENT FOR RIGHTS ISSUE. In case the Company shall issue
rights or warrants to all holders of its Common Stock entitling them (for a
period expiring within 45 days after the record date mentioned below) to
subscribe for or purchase Common Stock at a price per share less than the
Current Market Price per share of Common Stock at the record date for the
determination of stockholders entitled to receive such rights or warrants, the
Conversion Rate in effect immediately prior thereto shall be adjusted so that
the same shall equal the Conversion Rate determined by multiplying the
Conversion Rate in effect immediately prior to the date of issuance of such
rights or warrants by a fraction of which the numerator shall be the number of
shares of Common Stock outstanding on the date of issuance of such rights or
warrants plus the number of additional shares of Common Stock offered to holders
of Common Stock for subscription or purchase, and of which the denominator shall
be the number of shares of Common Stock outstanding on the date of issuance of
such rights or warrants plus the number of shares of Common Stock which the
aggregate offering price of the total number of shares so offered would purchase
at such Current Market Price. Such adjustment shall be made successively
whenever any such rights or warrants are issued, and shall become effective
immediately after the opening of business on the day following the record date
for the determination of the 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 which 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 which would then be in effect if such record date 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 of such Common Stock, 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, the value
of such consideration, if other than Cash, to be determined by the Board of
Directors.
SECTION 11.08. ADJUSTMENT FOR OTHER DISTRIBUTIONS.
(a) In case the Company shall distribute to all holders of its Common Stock
(excluding any distribution in connection with the liquidation, dissolution or
winding up of the Company, whether voluntary or involuntary) any shares of any
class of capital stock of the Company (other than Common Stock), of evidences of
indebtedness of the Company or of assets (other than cash) or rights or warrants
to subscribe for or purchase any of its securities (excluding those referred to
in Section 11.07 hereof) (any of the foregoing hereinafter in this Section
11.08(a) called the "Distributed Securities"), then, the Conversion Rate shall
be adjusted so that the same shall equal the Conversion Rate determined by
multiplying the Conversion Rate in effect immediately prior to the date of such
distribution by a fraction of which the numerator shall be the Current Market
Price per share of the Common Stock on the record date mentioned below, and the
denominator shall be the Current Market Price per share of the Common Stock on
such record date less the fair market value on such record date (as determined
by the Board of Directors of the Company, whose determination shall be
conclusive, and described in a certificate filed with the Trustee) of the
-59-
Distributed Securities so distributed applicable to one share of Common Stock.
Such adjustment shall become effective immediately after the record date for the
determination of stockholders entitled to receive such distribution.
Notwithstanding the foregoing, in the event that the then fair market value (as
so determined) of the portion of the Distributed Securities so distributed
applicable to one share of Common Stock is equal to or greater than the Current
Market Price of the Common Stock on the record date, in lieu of the foregoing
adjustment, adequate provision shall be made so that each Holder shall have the
right to receive upon conversion the amount of Distributed Securities such
Holder would have received had such Holder converted each Security immediately
prior to such record date. In the event that such distribution is not so paid
or made, the Conversion Rate shall again be adjusted to the Conversion Rate
which would then be in effect if such distribution had not been declared. If
the Board of Directors determines the fair market value of any distribution for
purposes of this Section 11.08(a) 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 of
the Common Stock.
Notwithstanding the foregoing provisions of this Section 11.08(a), no
adjustment shall be made thereunder for any distribution of Distributed
Securities if the Company makes proper provision so that each Holder of a
Security who converts such Security (or any portion thereof) after the record
date for such distribution shall be entitled to receive upon such conversion, in
addition to the shares of Common Stock issuable upon such conversion, the amount
and kind of Distributed Securities that such Holder would have been entitled to
receive if such Holder had, immediately prior to such record date, converted
such Security for Common Stock; provided that, with respect to any Distributed
--------
Securities that are convertible, exchangeable or exercisable, the foregoing
provision shall only apply to the extent (and so long as) the Distributed
Securities receivable upon conversion of such Security would be convertible,
exchangeable or exercisable, as applicable, without any loss of rights or
privileges for a period of at least 60 days following conversion of such
Security.
(b) 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 such preceding quarterly dividend did not require any
adjustment of the Conversion Rate pursuant to this Section 11.08(b) (as adjusted
to reflect subdivisions or combinations of the Common Stock), and (B) 3.75% of
the average of the last reported sales price of the Common Stock (determined as
provided in the definition of Current Market Price) during the ten Trading Days
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, unless the Company elects to reserve such Cash for distribution to the
holders of the Securities upon the conversion of the Securities so that any such
holder converting Securities will receive upon such conversion in addition to
the shares of Common Stock to which such holder is entitled, the amount of Cash
which such holder would have received if such holder had, immediately prior to
the record date for such distribution of Cash, converted its Securities for
Common Stock, the Conversion Rate
-60-
shall be increased so that the same shall equal the Conversion Rate determined
by multiplying the Conversion Rate in effect immediately prior to the record
date by a fraction of which the numerator shall be such Current Market Price of
the Common Stock and the denominator shall be the Current Market Price of the
Common Stock on the record date less the amount of Cash so distributed (and not
excluded as provided above) applicable to one share of Common Stock, such
increase to be effective immediately prior to the opening of business on the day
following the record date; provided, however, that in the event that the
-------- -------
portion of the Cash so distributed applicable to one share of Common Stock is
equal to or greater than the Current Market Price of the Common Stock on the
record date, in lieu of the foregoing adjustment, adequate provision shall be
made so that each Holder shall have the right to receive upon conversion the
amount of Cash such Holder would have received had such Holder converted each
Security on the record date. If such dividend or distribution is not so paid or
made, the Conversion Rate shall again be adjusted to be the Conversion Rate
which 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
11.08(b) 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 11.08(b)
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.
(c) In case a tender or exchange offer made by the Company or any Subsidiary
of the Company for all or any portion of the Common Stock shall expire and such
tender or exchange offer shall involve the payment by the Company or such
Subsidiary 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 such Board of Directors at the last
time (the "Expiration Time") tenders or exchanges may be made pursuant to such
tender or exchange offer (as it shall have been amended)) that exceeds the
Current Market Price of the Common Stock on the Trading Day next succeeding the
Expiration Time, the Conversion Rate shall be increased so that the same shall
equal the Conversion Rate determined by multiplying the Conversion Rate in
effect immediately prior to the Expiration Time by a fraction of which the
numerator shall be the sum of (x) the fair market value (determined as
aforesaid) of the aggregate consideration payable to holders of Common Stock
based on the acceptance (up to any maximum specified in the terms of the tender
or exchange offer) of all shares of Common Stock 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) on the Expiration Time and the Current Market Price of the Common Stock
on the Trading Day next succeeding the Expiration Time, and the denominator
shall be the number of shares of Common Stock outstanding (including any
tendered or exchanged shares) on the Expiration Time multiplied by the Current
Market Price of the Common Stock on the Trading Day next succeeding the
Expiration Time, such increase to become effective immediately prior to the
opening of business on the day following the Expiration Time. In the event that
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
-61-
Conversion Rate shall again be adjusted to be the Conversion Rate which would
then be effect if such tender or exchange offer had not been made.
(d) In case of a tender or exchange offer by a Person other than the Company
or any Subsidiary for an amount which increases the offeror's ownership of
Common Stock to more than 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 at
the last time (the "Tender Expiration Time") tenders or exchanges may be made
pursuant to such tender or exchange offer (as it shall have been amended)) at
the Tender Expiration Time that exceeds the Current Market Price of the Common
Stock on the Trading Day next succeeding the Tender Expiration Time, and in
which, as of the Tender 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 Conversion Rate determined by multiplying the
Conversion Rate in effect immediately prior to the Tender Expiration Time by a
fraction of which the numerator shall be the sum of (x) the fair market value
(determined as aforesaid) of the aggregate consideration payable to holders of
Common Stock based on the acceptance (up to an maximum specified in the terms of
the tender or exchanged offer) of all shares of Common Stock validly tendered or
exchanged and not withdrawn as of the Tender Expiration Time (the shares deemed
so accepted, up to any such maximum, being referred to as the "Tender Purchased
Shares") and (y) the product of the number of shares of Common Stock outstanding
(less any Tender Purchased Shares) on the Tender Expiration Time and the Current
Market Price of the Common Stock on the Trading Day next succeeding the Tender
Expiration Time and the denominator shall be the number of shares of Common
Stock outstanding (including any tendered or exchanged shares) on the Tender
Expiration Time multiplied by the Current Market Price of the Common Stock on
the Trading Day next succeeding the Tender Expiration Time, such increase to
become effective immediately prior to the opening of business on the day
following the Tender Expiration Time. In the event that 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 which would then be in effect if such
tender or exchange offer had not been made. Notwithstanding the foregoing, the
adjustment described in this Section 11.08(d) shall not be made if, as of the
Tender 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 5.
SECTION 11.09. WHEN ADJUSTMENT MAY BE DEFERRED. No adjustment in the
Conversion Rate need be made unless the adjustment would require an increase or
decrease of at least 1% in the Conversion Rate. Any adjustments that are made
shall be carried forward and taken into account any subsequent adjustment.
All calculations under this Article 11 shall be made to the nearest cent or
to the nearest 1/10,000th of a share, as the case may be.
-62-
SECTION 11.10. WHEN NO ADJUSTMENT REQUIRED. No adjustment need be made for
rights to purchase Common Stock pursuant to a Company plan for reinvestment of
dividends or interest.
No adjustment need be made for a change in the par value or no par value of
the Common Stock.
To the extent the Securities become convertible into Cash, assets, property
or securities (other than capital stock of the Company), no adjustment need be
made thereafter as to the cash, assets, property or such securities. Interest
will not accrue on the Cash.
SECTION 11.11. NOTICE OF ADJUSTMENT. Whenever the Conversion Rate is
adjusted, the Company shall promptly mail to Holders a notice of the adjustment.
The Company shall file with the Trustee and the Conversion Agent such notice.
The certificate shall, absent manifest error, be conclusive evidence that the
adjustment is correct. Neither the Trustee nor any Conversion Agent shall be
under any duty or responsibility with respect to any such certificate except to
exhibit the same to any Holder desiring inspection thereof.
SECTION 11.12. VOLUNTARY INCREASE. The Company may make such increases in
the Conversion Rate, in addition to those required by Sections 11.06, 11.07 and
11.08, 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 may from time to time increase the
Conversion Rate by any amount for any period of time if the period is at least
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 so increased, the Company shall mail to Holders
and file with the Trustee and the Conversion Agent a notice of such increase.
The Company shall mail such notice at least 15 days before the date the
increased Conversion Rate takes effect. The notice shall state the increased
Conversion Rate and the period it will be in effect.
SECTION 11.13. NOTICE OF CERTAIN TRANSACTIONS. If:
(1) the Company makes any distribution or dividend that would require an
adjustment in the Conversion Rate pursuant to Section 11.06, 11.07 or 11.08; or
(2) the Company takes any action that would require a supplemental
indenture pursuant to Section 11.14; or
(3) there is a liquidation, dissolution or winding-up of the Company;
then the Company shall mail to Holders and file with the Trustee and the
Conversion Agent a notice stating the proposed record date for a dividend or
distribution or the proposed effective date of a subdivision, combination,
reclassification, consolidation, merger, sale, transfer, dissolution,
-63-
liquidation or winding-up. The Company shall file and mail the notice at least
15 days before such date. Failure to file or mail the notice or any defect in
it shall not affect the validity of the transaction.
SECTION 11.14. EFFECT OF RECLASSIFICATION, CONSOLIDATION, MERGER OR SALE.
If any of the following events occur, namely (i) any reclassification or change
of outstanding shares of Common Stock (other than a change in par value, or from
par value to no par value, or from no par value to par value, or as a result of
a subdivision or combination), (ii) any consolidation, merger or combination of
the Company with another corporation as a result of which holders of Common
Stock shall be entitled to receive stock, 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 the properties and assets of the Company as, or
substantially as, an entirety to any other corporation as a result of which
holders of Common Stock shall be entitled to receive stock, 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 corporation, as
the case may be, shall execute with the Trustee a supplemental indenture,
providing that each Security shall be convertible into the kind and amount of
shares of stock and other securities or property or assets (including Cash)
receivable upon such reclassification, change, consolidation, merger,
combination, sale or conveyance by a holder of a number of shares of Common
Stock issuable upon conversion of such Securities immediately prior to such
reclassification, change, consolidation, merger, combination, sale or
conveyance. 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.
The Company shall cause notice of the execution of such supplemental
indenture to be mailed to each Holder of Securities, at such Holder's address
appearing on the Security register provided for in Section 2.03 of this
Indenture.
The above provisions of this Section shall similarly apply to successive
reclassifications, consolidations, mergers, combinations, and sales.
If this Section applies, neither Section 11.06, 11.07 nor 11.08 applies.
SECTION 11.15. COMPANY DETERMINATION FINAL. Any determination that the
Company or the Board of Directors must make pursuant to Section 11.03, 11.06,
11.07, 11.08, 11.09, 11.10, 11.14 or 11.17 is conclusive.
SECTION 11.16. TRUSTEE'S ADJUSTMENT DISCLAIMER. The Trustee has no duty to
determine when an adjustment under this Article 11 should be made, how it should
be made or what it should be. The Trustee has no duty to determine whether a
supplemental indenture under Section 11.14 need be entered into or whether any
provisions of any supplemental indenture are correct. The Trustee shall not be
accountable for and makes no representation as to the validity or value of any
securities or assets issued upon conversion of Securities. The Trustee shall
not be responsible for the Company's failure to comply with this Article 11, and
shall not be deemed to have knowledge of any adjustment unless and until it
shall have received a notice of adjustment pursuant to
-64-
Section 11.11. Each Conversion Agent shall have the same protection under this
Section 11.16 as the Trustee.
SECTION 11.17. SIMULTANEOUS ADJUSTMENTS. In the event that this Article 11
requires adjustments to the Conversion Rate under more than one of Sections
11.06, 11.07, 11.08(a) or 11.08(b), and the record dates for the distributions
giving rise to such adjustments shall occur on the same date, then such
adjustments shall be made by applying, first, the provisions of Section
11.08(a), second, the provisions of Section 11.08(b), third the provisions of
Section 11.06 and, fourth, the provisions of Section 11.07.
SECTION 11.18. SUCCESSIVE ADJUSTMENTS. After an adjustment to the
Conversion Rate under this Article 11, any subsequent event requiring an
adjustment under this Article 11 shall cause an adjustment to the Conversion
Rate as so adjusted.
SECTION 11.19. RIGHTS ISSUED IN RESPECT OF COMMON STOCK ISSUED UPON
CONVERSION. Notwithstanding any other provision hereof, in the event that the
Company implements a stockholders' rights plan, such rights plan shall provide
that upon conversion of the Securities the Holders will receive, in addition to
the Common Stock issuable upon such conversion, such rights whether or not such
rights have separated from the Common Stock at the time of such conversion.
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 not be deemed distributed for purposes of Section 11.08(a) until the
occurrence of the earliest Trigger Event. In addition, in the event of any
distribution of rights or warrants, or any Trigger Event with respect thereto,
that shall have resulted in an adjustment to the Conversion Rate under Section
11.08(a), (1) in the case of any such rights or warrants which 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 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 any such rights or warrants all of which shall have expired
without exercise by any holder thereof, the Conversion Rate shall be readjusted
as if such issuance had not occurred.
-65-
SECTION 11.20 GENERAL CONSIDERATIONS. Whenever successive adjustments to
the Conversion Rate are called for pursuant to this Article 11, such adjustments
shall be made to the Current Market Price as may be necessary or appropriate to
effectuate the intent of this Article 11 and to avoid unjust or inequitable
results as determined in good faith by the Board of Directors.
ARTICLE 12
MISCELLANEOUS
SECTION 12.01. TRUST INDENTURE ACT. This Indenture is hereby made subject
to, and shall be governed by, the provisions of the TIA required to be part of
and to govern indentures qualified under the TIA; provided, however that this
-------- -------
Section 12.01 shall not require this Indenture or the Trustee to be qualified
under the TIA prior to the time such qualification is in fact required under the
terms of the TIA, nor shall it constitute any admission or acknowledgment by any
party that any such qualification is required prior to the time such
qualification is in fact required under the terms of the TIA. If any provision
hereof limits, qualifies or conflicts with another provision hereof which is
required to be included in an indenture qualified under the TIA, such required
provision shall control.
SECTION 12.02. NOTICES. Any request, demand, authorization, notice, waiver,
consent or communication shall be in writing and delivered in Person or mailed
by first class mail, postage prepaid, addressed as follows or transmitted by
facsimile transmission (confirmed by overnight courier) to the following
facsimile numbers:
if to the Company:
Aspect Telecommunications Corporation
1730 Fox Drive
San Jose, California 95131
Attn: Eric Keller
Telephone Number: (408) 325-2337
Facsimile Number: (408) 325-2261
-66-
if to the Trustee:
State Street Bank and Trust Company of California, N.A.
Library Tower
633 West 5th Street
12th Floor
Los Angeles, California 90071
(Attention: Corporate Trust Administration-Aspect Telecommunications
Corporation, Zero Coupon Convertible Subordinated Debentures due 2018)
Telephone Number: (213) 362-7373
Facsimile Number: (213) 362-7357
The Company or the Trustee by notice to the other may designate additional or
different addresses for subsequent notices or communications.
Any notice or communication given to a Holder shall be mailed to the Holder,
by first class mail, postage prepaid, at the Securityholder's address as it
appears on the registration books of the Registrar and shall be sufficiently
given if so mailed within the time prescribed.
Failure to mail a notice or communication to a Holder or any defect in it
shall not affect its sufficiency with respect to other Holders. If a notice or
communication is mailed in the manner provided above, it is duly given, whether
or not received by the addressee.
If the Company mails a notice or communication to the Holders, it shall mail
a copy to the Trustee and each Registrar, Paying Agent, Conversion Agent or co-
registrar.
SECTION 12.03. COMMUNICATION BY HOLDERS WITH OTHER HOLDERS. Holders may
communicate pursuant to TIA Section 312(b) with other Holders with respect to
their rights under this Indenture or the Securities. The Company, the Trustee,
the Registrar, the Paying Agent, the Conversion Agent and anyone else shall have
the protection of TIA Section 312(c).
SECTION 12.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT. Upon any
request or application by the Company to the Trustee to take any action under
this Indenture, the Company shall furnish to the Trustee:
(1) an Officers' Certificate stating that, in the opinion of the signers,
all conditions precedent, if any, provided for in this Indenture relating to the
proposed action have been complied with; and
(2) an Opinion of Counsel stating that, in the opinion of such counsel,
all such conditions precedent have been complied with.
-67-
SECTION 12.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION. Each
Officers' Certificate or Opinion of Counsel with respect to compliance with a
covenant or condition provided for in this Indenture shall include:
(1) a statement that each individual making such Officers' Certificate or
Opinion of Counsel has read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such Officers'
Certificate or Opinion of Counsel are based;
(3) a statement that, in the opinion of each such individual, he or she
has made such examination or investigation as is necessary to enable him or her
to express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(4) a statement that, in the opinion of such individual, such covenant or
condition has been complied with.
SECTION 12.06 SEPARABILITY CLAUSE. In case any provision in this Indenture
or in the Securities shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
SECTION 12.07 RULES BY TRUSTEE, PAYING AGENT, CONVERSION AGENT AND
REGISTRAR. The Trustee may make reasonable rules for action by or a meeting of
Holders. The Registrar, Conversion Agent and the Paying Agent may make
reasonable rules for their functions.
SECTION 12.08 GOVERNING LAW. THE LAWS OF THE STATE OF NEW YORK SHALL
GOVERN THIS INDENTURE AND THE SECURITIES, WITHOUT REGARD TO THE PRINCIPLES OF
CONFLICTS OF LAWS.
SECTION 12.09 NO RECOURSE AGAINST OTHERS. A director, officer, employee or
stockholder, as such, of the Company shall not have any liability for any
obligations of the Company under the Securities or this Indenture or for any
claim based on, in respect of or by reason of such obligations or their
creation. By accepting a Security, each Holder shall waive and release all such
liability. The waiver and release shall be part of the consideration for the
issue of the Securities.
SECTION 12.10 SUCCESSORS. All agreements of the Company in this Indenture
and the Securities shall bind its successor. All agreements of the Trustee in
this Indenture shall bind its successor.
SECTION 12.11 MULTIPLE ORIGINALS. The parties may sign any number of
copies of this Indenture. Each signed copy shall be an original, but all of
them together represent the same agreement. One signed copy is enough to prove
this Indenture.
-68-
IN WITNESS WHEREOF, the undersigned, being duly authorized, has executed this
Indenture on behalf of the respective parties hereto as of the date first
written above.
Aspect Telecommunications Corporation
By /s/ Eric J. Keller
-------------------------------------------
Title: Vice President, Finance and Chief
Financial Officer
State Street Bank and Trust Company of California, N.A.
By /s/ Mark Henson
-------------------------------------------
Authorized Signatory
-69-
EXHIBIT A
---------
[FORM OF FACE OF SECURITY]
FOR UNITED STATES FEDERAL INCOME TAX PURPOSES, THIS SECURITY BEARS ORIGINAL
ISSUE DISCOUNT. INFORMATION INCLUDING THE ISSUE PRICE, AMOUNT OF ORIGINAL ISSUE
DISCOUNT, THE ISSUE DATE, AND THE YIELD TO MATURITY WILL BE MADE AVAILABLE TO
HOLDERS UPON REQUEST TO ERIC KELLER, CHIEF FINANCIAL OFFICER OF THE COMPANY, AT
(408) 325-2337.
[FORM OF LEGEND FOR GLOBAL SECURITY]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC) , ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
THE SECURITY 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 EXCEPT AS SET
FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER (1)
REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE
144A UNDER THE SECURITIES ACT) OR (B) IT IS AN INSTITUTIONAL "ACCREDITED
INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2), (3) OR (7) UNDER THE SECURITIES
ACT) ("INSTITUTIONAL ACCREDITED INVESTOR"); (2) AGREES THAT IT WILL NOT, PRIOR
TO 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), RESELL OR OTHERWISE TRANSFER THE SECURITY EVIDENCED HEREBY OR THE
COMMON STOCK ISSUABLE UPON CONVERSION OF SUCH SECURITY EXCEPT (A) TO ASPECT
TELECOMMUNICATIONS CORPORATION OR ANY SUBSIDIARY THEREOF, (B) TO A QUALIFIED
INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C)
TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES
TO STATE STREET BANK AND TRUST COMPANY OF CALIFORNIA, N.A., AS TRUSTEE (OR A
SUCCESSOR TRUSTEE, AS APPLICABLE), A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THE
SECURITY EVIDENCED HEREBY (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM SUCH
TRUSTEE OR A SUCCESSOR TRUSTEE, AS APPLICABLE), (D) PURSUANT TO THE EXEMPTION
FROM
A-1
REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE)
OR (E) 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
CLAUSE 2(E) ABOVE), IT WILL FURNISH TO STATE STREET BANK AND TRUST COMPANY OF
CALIFORNIA, N.A., AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS APPLICABLE), SUCH
CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS THE TRUSTEE MAY
REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND (4) AGREES THAT IT WILL DELIVER TO EACH
PERSON TO WHOM THE SECURITY EVIDENCED HEREBY IS TRANSFERRED (OTHER THAN A
TRANSFER PURSUANT TO CLAUSE 2(D) OR 2(E) ABOVE) A NOTICE SUBSTANTIALLY TO THE
EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF THE SECURITY
EVIDENCED HEREBY PRIOR TO 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), 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 STATE STREET BANK AND TRUST COMPANY OF CALIFORNIA, N.A., AS
TRUSTEE (OR A SUCCESSOR TRUSTEE, AS APPLICABLE). THIS LEGEND WILL BE REMOVED
UPON THE TRANSFER OF THE SECURITY EVIDENCED HEREBY PURSUANT TO CLAUSE 2(D) OR
CLAUSE 2(E) ABOVE OR UPON ANY TRANSFER OF THE SECURITY EVIDENCED HEREBY AFTER
THE EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THE DEBENTURE
EVIDENCED HEREBY UNDER RULE 144(K) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR
PROVISION).
A-2
ASPECT TELECOMMUNICATIONS CORPORATION
ZERO COUPON CONVERTIBLE SUBORDINATED DEBENTURE DUE 2018
No.
Issue Date: August 10, 1998 Original Issue Discount: $693.44
Issue Price: $306.56 (for each $1,000 Principal Amount)
(for each $1,000 Principal Amount)
CUSIP:
Aspect Telecommunications Corporation, a California corporation, promises to
pay to or registered assigns, on August 10,
2018 [the Principal Amount of Dollars ($ )]./1/
This Security shall not bear interest except as specified on the other side
of this Security. Original Issue Discount will accrue as specified on the other
side of this Security. This Security is convertible as specified on the other
side of this Security.
Additional provisions of this Security are set forth on the other side of
this Security.
IN WITNESS WHEREOF, Aspect Telecommunications Corporation has caused this
instrument to be duly executed.
ASPECT TELECOMMUNICATIONS CORPORATION
By:
--------------------------------------
Title:
By:
--------------------------------------
Title:
Dated:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
STATE STREET BANK AND TRUST COMPANY OF CALIFORNIA, N.A.,
as Trustee, certifies that this is one of the Securities
referred to in the within-mentioned Indenture.
By
--------------------------------------
Authorized Signatory
- ------------------
/1/ The global Security will read instead: "The Principal Amount then shown
on Schedule A hereto."
A-3
[FORM OF REVERSE SIDE OF SECURITY]
ASPECT TELECOMMUNICATIONS CORPORATION
ZERO COUPON CONVERTIBLE SUBORDINATED DEBENTURE DUE 2018
1. INTEREST
This Security shall not bear interest, except that if the Principal Amount
hereof or any portion of such Principal Amount is not paid when due (whether
upon acceleration pursuant to Section 6.02 of the Indenture, upon the date set
for payment of the Redemption Price pursuant to paragraph 5 hereof, upon the
date set for payment of a Purchase Price or Fundamental Change Redemption Price
pursuant to paragraph 6 hereof or upon the Stated Maturity of this Security),
then in each such case the overdue amount shall bear interest at the rate of
6.00% per annum, compounded semiannually (to the extent that the payment of such
interest shall be legally enforceable), which interest shall accrue from the
date such overdue amount was due to the date payment of such amount, including
interest thereon, has been made or duly provided for. All such interest shall
be payable on demand. The accrual of such interest on overdue amounts shall be
in lieu of, and not in addition to, the continued accrual of Original Issue
Discount.
The Original Issue Discount (the difference between the Issue Price and the
Principal Amount of the Security) in the period during which a Security remains
outstanding, shall accrue at 6.00% per annum, on a semiannual bond equivalent
basis using a 360-day year composed of twelve 30-day months, commencing on the
Issue Date of this Security.
2. METHOD OF PAYMENT
Subject to the terms and conditions of the Indenture, the Company will make
payments in respect of the Securities to the Persons who are registered Holders
of Securities at the close of business on the Business Day preceding the
Redemption Date or Stated Maturity, as the case may be, or at the close of
business on a Purchase Date or Fundamental Change Redemption Date, as the case
may be. Holders must surrender Securities to the Paying Agent to collect such
payments in respect of the Securities. The Company will pay cash amounts in
money of the United States that at the time of payment is legal tender for
payment of public and private debts. However, the Company may make such cash
payments by check payable in such money.
3. PAYING AGENT, CONVERSION AGENT AND REGISTRAR
Initially, State Street Bank and Trust Company of California, N.A., a
national banking association organized under the laws of the United States of
America (the "Trustee"), will act as Paying Agent, Conversion Agent and
Registrar. The Company may appoint and change any Paying Agent, Conversion
Agent, Registrar or co-registrar without notice, other than notice to the
Trustee. The Company or any of its Subsidiaries or any of their Affiliates may
act as Paying Agent, Conversion Agent, Registrar or co-registrar.
4. INDENTURE
The Company issued the Securities under an Indenture (the "Indenture"), dated
as of August 10, 1998, between the Company and the Trustee. Capitalized terms
used herein and not defined herein have the meanings ascribed thereto in the
Indenture. The Securities are subject to all such terms, and Holders are
referred to the Indenture for a statement of those terms.
The Securities are general unsecured obligations of the Company limited to
$490,000,000 aggregate Principal Amount (subject to Sections 2.02 and 2.07 of
the Indenture). The Indenture does not limit other indebtedness of the Company,
secured or unsecured, including Senior Indebtedness of the Company.
5. REDEMPTION AT THE OPTION OF THE COMPANY
No sinking fund is provided for the Securities. The Securities are
redeemable as a whole, or from time to time in part, at any time at the option
of the Company at the Redemption Prices set forth below, provided that the
Securities are not redeemable prior to August 10, 2003.
The table below shows Redemption Prices of a Security per $1,000 Principal
Amount on the dates shown below and at Stated Maturity, which prices reflect
accrued Original Issue Discount calculated to each such date. The Redemption
Price of a Security redeemed between such dates would include an additional
amount reflecting the additional Original Issue Discount accrued since the next
preceding date in the table to the actual Redemption Date.
ACCRUED
ORIGINAL
ISSUE REDEMPTION
SECURITY DISCOUNT PRICE
REDEMPTION DATE ISSUE PRICE AT 6.00% (1) + (2)
- --------------- ----------- -------- -----------
August 10, 2003..... $306.56 $105.44 $ 412.00
August 10, 2004..... 306.56 130.53 437.09
August 10, 2005..... 306.56 157.14 463.70
August 10, 2006..... 306.56 185.38 491.94
August 10, 2007..... 306.56 215.34 521.90
August 10, 2008..... 306.56 247.13 553.69
August 10, 2009..... 306.56 280.85 587.41
August 10, 2010..... 306.56 316.62 623.18
August 10, 2011..... 306.56 354.57 661.13
August 10, 2012..... 306.56 394.83 701.39
August 10, 2013..... 306.56 437.55 744.11
August 10, 2014..... 306.56 482.86 789.42
August 10, 2015..... 306.56 530.94 837.50
August 10, 2016..... 306.56 581.94 888.50
August 10, 2017..... 306.56 636.05 942.61
At maturity......... 306.56 693.44 1,000.00
A-5
6. PURCHASE BY THE COMPANY AT THE OPTION OF THE HOLDER; REDEMPTION AT THE OPTION
OF THE HOLDER UPON A FUNDAMENTAL CHANGE
(a) Subject to the terms and conditions of the Indenture, the Company
shall become obligated to purchase, at the option of the Holder, the Securities
held by such Holder on the following Purchase Dates and at the following
Purchase Prices per $1,000 Principal Amount, upon delivery of a Purchase Notice
containing the information set forth in the Indenture, from the opening of
business on the date that is 20 Business Days prior to such Purchase Date until
the close of business on such Purchase Date and upon delivery of the Securities
to the Paying Agent by the Holder as set forth in the Indenture. Such Purchase
Prices may be paid, at the option of the Company, in cash or by the issuance and
delivery of shares of Common Stock of the Company, or in any combination
thereof.
PURCHASE DATE PURCHASE PRICE
----------------- --------------
August 10, 2003....................... $412.00
August 10, 2008....................... 553.69
August 10, 2013....................... 744.11
Securities in denominations larger than $1,000 of Principal Amount may be
purchased in part, but only in integral multiples of $1,000 of Principal Amount.
(b) At the option of the Holder and subject to the terms and conditions of
the Indenture, the Company shall become obligated to redeem the Securities held
by such Holder 45 days after the date of the Company's notice of a Fundamental
Change occurring on or prior to August 10, 2018 for a Fundamental Change
Redemption Price equal to the Issue Price plus accrued Original Issue Discount
to the Fundamental Change Redemption Date which Fundamental Change Redemption
Price shall be paid in cash; provided that if the Applicable Price in connection
--------
with the Fundamental Change is less than the Reference Market Price, the
Fundamental Change Redemption Price shall be equal to the Fundamental Change
Redemption Price multiplied by the fraction obtained by dividing the Applicable
Price by the Reference Market Price. Securities in denominations larger than
$1,000 of Principal Amount may be redeemed in part in connection with a
Fundamental Change, but only in integral multiples of $1,000 of Principal
Amount.
(c) Holders have the right to withdraw any Purchase Notice or Fundamental
Change Redemption Notice, as the case may be, by delivering to the Paying Agent
a written notice of withdrawal in accordance with the provisions of the
Indenture.
(d) If Cash (and/or securities if permitted under the Indenture)
sufficient to pay a Purchase Price or Fundamental Change Redemption Price, as
the case may be, of all Securities or portions thereof to be purchased as of the
Purchase Date or the Fundamental Change Redemption Date, as the case may be, is
deposited with the Paying Agent on the Business Day following the Purchase Date
or the Fundamental Change Redemption Date, as the case may be, Original Issue
Discount ceases to accrue on such Securities (or portions thereof) on and after
such date, and the Holder thereof shall have no other rights as such (other than
the right to receive the Purchase Price or Fundamental Change Redemption Price,
as the case may be, upon surrender of such Security).
A-6
7. NOTICE OF REDEMPTION AT THE OPTION OF THE COMPANY
Notice of redemption at the option of the Company will be mailed at least 30
days but not more than 60 days before the Redemption Date to each Holder of
Securities to be redeemed at the Holder's registered address. If money
sufficient to pay the Redemption Price of all Securities (or portions thereof)
to be redeemed on the Redemption Date is deposited with the Paying Agent prior
to or on the Redemption Date, on and after such date Original Issue Discount
ceases to accrue on such Securities or portions thereof. Securities in
denominations larger than $1,000 of Principal Amount may be redeemed in part but
only in multiples of $1,000 of Principal Amount.
8. SUBORDINATION
The Securities are subordinated to all existing and future Senior
Indebtedness of the Company. To the extent provided in the Indenture, Senior
Indebtedness of the Company must be paid before the Securities may be paid. The
Indenture does not limit the present or future amount of Senior Indebtedness
that the Company may have. The Company agrees, and each Securityholder by
accepting a Security agrees, to the subordination and authorizes the Trustee to
give it effect and appoints the Trustee as attorney-in-fact for such purpose.
9. CONVERSION
Subject to the next two succeeding sentences, a Holder of a Security may
convert this Security for Common Stock of the Company at any time after 90 days
following the latest date of original issuance of the Securities and prior to
maturity. If this Security is called for redemption, the Holder may convert it
at any time before the close of the last Trading Day prior to the Redemption
Date. A Security in respect of which a Holder has delivered a notice of
exercise of the option to require the Company to purchase such Security or to
redeem such Security in the event of a Fundamental Change may be converted only
if the notice of exercise is withdrawn in accordance with the terms of the
Indenture.
The initial Conversion Rate is 8.713 shares of Common Stock per $1,000
Principal Amount, subject to adjustment in certain events described in the
Indenture. The Company will deliver Cash or a check in lieu of any fractional
share of Common Stock.
To convert this Security a Holder must (1) complete and manually sign the
conversion notice on the back of this Security (or complete and manually sign a
facsimile of such notice) and deliver such notice to the Conversion Agent, (2)
surrender this Security to the Conversion Agent, (3) furnish appropriate
endorsements and transfer documents if required by the Conversion Agent, the
Company or the Trustee and (4) pay any transfer or similar tax, if required.
A Holder may convert a portion of this Security if the Principal Amount of
such portion is $1,000 or an integral multiple of $1,000. No payment or
adjustment will be made for dividends on the Common Stock except as provided in
the Indenture. On conversion of this Security, that portion of accrued Original
Issue Discount attributable to the period from the Issue Date to the Conversion
Date with respect to the converted portion of this Security shall not be
canceled, extinguished or forfeited, but rather shall be deemed to be paid in
full to the Holder thereof through the delivery of the Common
A-7
Stock (together with any cash payment in lieu of fractional shares) in exchange
for the portion of this Security being converted pursuant to the terms hereof.
10. CONVERSION ARRANGEMENT ON CALL FOR REDEMPTION
Any Securities called for redemption, unless surrendered for conversion
before the close of business on the last Trading Day prior to the Redemption
Date, may be deemed to be purchased from the Holders of such Securities at an
amount not less than the Redemption Price, by one or more investment bankers or
other purchasers who may agree with the Company to purchase such Securities from
the Holders, to convert them for Common Stock and to make payment for such
Securities to the Trustee in trust for such Holders.
11. REGISTRATION RIGHTS
The Holder of this Security and the Common Stock issuable upon conversion
thereof is entitled to the benefits of a Registration Rights Agreement (subject
to the provisions thereof), dated as of August 10, 1998, between the Company and
the Initial Purchasers.
12. DENOMINATIONS; TRANSFER; EXCHANGE
The Securities are in registered form, without coupons, in denominations of
$1,000 of Principal Amount and integral multiples of $1,000. A Holder may
transfer or convert Securities in accordance with the Indenture. The Registrar
may require a Holder, among other things, to furnish appropriate endorsements
and transfer documents and to pay any taxes and fees required by law or
permitted by the Indenture. The Registrar need not transfer or exchange any
Securities selected for redemption (except, in the case of a Security to be
redeemed in part, the portion of the Security not to be redeemed) or any
Securities in respect of which a Purchase Notice or Fundamental Change
Redemption Notice has been given and not withdrawn (except, in the case of a
Security to be purchased in part, the portion of the Security not to be
purchased) or any Securities for a period of 15 days before a selection of
Securities to be redeemed.
13. PERSONS DEEMED OWNERS
The registered Holder of this Security may be treated as the owner of this
Security for all purposes.
14. UNCLAIMED MONEY OR SECURITIES
The Trustee and the Paying Agent shall return to the Company upon written
request any money or securities held by them for the payment of any amount with
respect to the Securities that remains unclaimed for two years, provided,
however, that the Trustee or such Paying Agent, before being required to make
any such return, shall at the expense of the Company cause to be published once
in a newspaper of general circulation in The City of New York or mail to each
such Holder notice that such money or securities remains unclaimed and that,
after a date specified therein, which shall not be less than 30 days from the
date of such publication or mailing, any unclaimed money or securities then
remaining will be returned to the Company. After return to the Company, Holders
entitled to the money
A-8
or securities must look to the Company for payment as general creditors unless
an applicable abandoned property law designates another Person.
15. AMENDMENT; WAIVER
Subject to certain exceptions set forth in the Indenture, (i) the Indenture
or the Securities may be amended with the written consent of the Holders of at
least a majority in aggregate Principal Amount of the Securities at the time
outstanding and (ii) certain Defaults and Events of Defaults may be waived with
the written consent of the Holders of a majority in aggregate Principal Amount
of the Securities at the time outstanding. Subject to certain exceptions set
forth in the Indenture, without the consent of any Securityholder, the Company
and the Trustee may amend the Indenture or the Securities to cure any ambiguity,
defect or inconsistency, or to comply with Article 5 or Section 11.14 of the
Indenture, to provide for uncertificated Securities in addition to or in place
of certificated Securities or to make any change that does not adversely affect
the rights of any Holder or to comply with any requirement of the SEC in
connection with the qualification of the Indenture under the TIA.
16. DEFAULTS AND REMEDIES
Under the Indenture, Events of Default include (i) default in payment of the
Principal Amount, Issue Price, accrued Original Issue Discount, accrued
Liquidated Damages, if any, Redemption Price, Purchase Price or Fundamental
Change Redemption Price, as the case may be, in respect of the Securities when
the same becomes due and payable, provided that in the case of any failure to
pay Liquidated Damages, such failure to pay continues for a period of 30 days;
(ii) failure by the Company to comply with other agreements in the Indenture or
the Securities, subject to notice and lapse of time; and (iii) certain events of
bankruptcy or insolvency. If an Event of Default occurs and is continuing, the
Trustee, or the Holders of at least 25% in aggregate Principal Amount of the
Securities at the time outstanding, may declare all the Securities to be due and
payable immediately. Certain events of bankruptcy or insolvency are Events of
Default which will result in the Securities being declared due and payable
immediately upon the occurrence of such Events of Default.
Holders may not enforce the Indenture or the Securities except as provided in
the Indenture. The Trustee may refuse to enforce the Indenture or the
Securities unless it receives reasonable indemnity or security. Subject to
certain limitations, Holders of a majority in aggregate Principal Amount of the
Securities at the time outstanding may direct the Trustee in its exercise of any
trust or power. The Trustee may withhold from Holders notice of any continuing
Default (except a Default in payment of amounts specified in clause (i) above)
if it determines that withholding notice is in their interests.
17. TRUSTEE DEALINGS WITH THE COMPANY
The Trustee under the Indenture, in its individual or any other capacity, may
become the owner or pledgee of Securities and may otherwise deal with and
collect obligations owed to it by the Company or its Affiliates and may
otherwise deal with the Company or its Affiliates with the same rights it would
have if it were not Trustee.
A-9
18. NO RECOURSE AGAINST OTHERS
A director, officer, employee or stockholder, as such, of the Company shall
not have any liability for any obligations of the Company under the Securities
or the Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation. By accepting a Security, each Holder waives and
releases all such liability. The waiver and release are part of the
consideration for the issue of the Securities.
19. AUTHENTICATION
This Security shall not be valid until an authorized officer of the Trustee
manually signs the Trustee's Certificate of Authentication on the other side of
this Security.
20. ABBREVIATIONS
Customary abbreviations may be used in the name of a Securityholder or an
assignee, such as TEN COM (=tenants in common), TENANT (=tenants by the
entireties), JT TEN (=joint tenants with right of survivorship and not as
tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors
Act).
21. GOVERNING LAW
THE LAWS OF THE STATE OF NEW YORK SHALL GOVERN THE INDENTURE AND THIS
SECURITY.
The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture which has in it the text of this Security in
larger type. Requests may be made to:
Aspect Telecommunications Corporation
1730 Fox Drive
San Jose, California 95131
Attn: Chief Financial Officer
A-10
[FORM OF CONVERSION NOTICE]
CONVERSION NOTICE
To: Aspect Telecommunications Corporation
The undersigned registered holder of this Security hereby irrevocably
exercises the option to convert this Security, or portion hereof (which is
$1,000 principal amount or an integral multiple thereof) below designated, for
shares of Common Stock of Aspect Telecommunications Corporation in accordance
with the terms of the Indenture referred to in this Security, and directs that
the shares issuable and deliverable upon such conversion, together with any
check in payment for fractional shares and any Securities representing any
unconverted principal amount hereof, be issued and delivered to the registered
holder hereof unless a different name has been indicated below. If shares or
any portion of this Security not converted are to be issued in the name of a
Person other than the undersigned, the undersigned will pay all transfer taxes
payable with respect thereto.
Dated:
--------------------------------------
--------------------------------------
Signature(s)
Fill in for registration of shares if to be delivered,
and Securities if to be issued 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):
$___,000
-------------------------------------------
Social Security or Other Taxpayer
Identification Number
A-11
[FORM OF OPTION TO ELECT REDEMPTION
UPON A FUNDAMENTAL CHANGE]
To: Aspect Telecommunications Corporation
The undersigned registered holder of this Security hereby acknowledges
receipt of a notice from Aspect Telecommunications Corporation (the "Company")
as to the occurrence of a Fundamental Change with respect to the Company and
requests and instructs the Company to redeem this Security, or the portion
hereof (which is $1,000 Principal Amount or an integral multiple thereof) below
designated, in accordance with the terms of the Indenture referred to in this
Security.
Dated:
----------------
--------------------------------------
--------------------------------------
Signature(s)
Principal amount to be redeemed
(if less than all):
$____________
----------------------------------------
Social Security or Other Taxpayer
Identification Number
A-12
ASSIGNMENT
For value received ________________________ hereby sell(s), assign(s) and
transfer(s) unto _____________________ (Please insert social security or other
Taxpayer Identification Number of assignee) the within Security, and hereby
irrevocably constitutes and appoints ________________ attorney to transfer the
said Security on the books of the Company, with full power of substitution in
the premises.
In connection with any transfer of the Security within the period prior to
the expiration of the holding period applicable to sales thereof under Rule
144(k) (other than any transfer pursuant to a registration statement that has
been declared effective under the Securities Act), under the Securities Act (or
any successor provision), the undersigned confirms that such Security is being
transferred:
[_] To Aspect Telecommunications Corporation or a subsidiary thereof; or
[_] Pursuant to and in compliance with Rule 144A under the Securities Act of
1933, as amended; or
[_] To an Institutional Accredited Investor pursuant to and in compliance
with the Securities Act of 1933, as amended; or
[_] Pursuant to and in compliance with Rule 144 under the Securities Act of
1933, as amended;
and unless the box below is checked, the undersigned confirms that to its
knowledge such Security is not being transferred to an "affiliate" of the
Company as defined in Rule 144 under the Securities Act of 1933, as amended (an
"Affiliate").
[_] The transferee is an Affiliate of the Company.
Dated:
------------------
--------------------------------------
--------------------------------------
Signature(s)
Signature(s) must be guaranteed by an
eligible Guarantor Institution (a bank, a
stock broker, a savings and loan
association or a credit union) with
membership in an approved signature
guarantee program pursuant to Securities
and Exchange Commission Rule 17Ad-15) if
shares of Common Stock are to be issued,
or Securities to be delivered, other than
to or in the name of the registered
holder.
--------------------------------------
Signature Guarantee
NOTICE: The above signatures of the holder(s) hereof must correspond with the
name as written upon the face of the Security in every particular without
alteration or enlargement or any change whatever.
A-13
[FORM OF SCHEDULE FOR ENDORSEMENTS ON GLOBAL SECURITY
TO REFLECT CHANGES IN PRINCIPAL AMOUNT]
Schedule A
Changes to Principal Amount of Global Security
================================================================================
PRINCIPAL AMOUNT OF
SECURITIES BY WHICH THIS
GLOBAL SECURITY IS TO BE
REDUCED OR INCREASED, AND
REASON FOR REMAINING PRINCIPAL AMOUNT NOTATION
DATE REDUCTION OR INCREASE OF THIS GLOBAL SECURITY MADE BY
- ------- -------------------------- -------------------------- ---------
- ------- -------------------------- -------------------------- ---------
- ------- -------------------------- -------------------------- ---------
- ------- -------------------------- -------------------------- ---------
- ------- -------------------------- -------------------------- ---------
- ------- -------------------------- -------------------------- ---------
- ------- -------------------------- -------------------------- ---------
- ------- -------------------------- -------------------------- ---------
================================================================================
A-14
EXHIBIT B
---------
[FORM OF INSTITUTIONAL ACCREDITED INVESTOR LETTER]
Aspect Telecommunications Corporation
1730 Fox Drive
San Jose, California 95131
Ladies and Gentlemen:
We are delivering this letter in connection with an offering of Zero Coupon
Convertible Subordinated Debentures due 2018 (the "Debentures) which are
convertible into shares of Common Stock, $.01 par value (the "Common Stock"), of
Aspect Telecommunications Corporation (the "Company").
We hereby confirm that:
1. we are an "accredited investor" within the meaning of Rule
501(a)(1), (2) or (3) under the Securities Act of 1933 (the "Securities Act")
or an entity in which all of the equity owners are accredited investors
within the meaning of Rule 501(a)(1), (2) or (3) under the Securities Act (an
"Institutional Accredited Investor"):
2. (A) any purchase of Debentures by us will be for our own account or
for the account of one or more other Institutional Accredited Investors or as
fiduciary for the account of one or more trusts, each of which is an
"accredited investor" within the meaning of Rule 501(a)(7) under the
Securities Act and for each of which we exercise sole investment discretion
or (B) we are a "bank," within the meaning of Section 3(a)(2) of the
Securities Act, or a "savings and loan association" or other institution
described in Section 3(l)(5)(a) of the Securities Act that is acquiring
Debentures as fiduciary for the account of one or more institutions for which
we exercise sole investment discretion;
3. in the event that we purchase any Debentures, we will acquire
Debentures having a minimum principal amount of not less than $250,000 for
our own account or for any separate account for which we are acting;
4. we have such knowledge and experience in financial and business
matters that we are capable of evaluating the merits and risks of purchasing
the Debentures; and
5. we are not acquiring Debentures with a view to distribution thereof
or with any present intention of offering or selling Debentures or the Common
Stock issuable upon conversion thereof, except as permitted below; provided
that the disposition of our property and property of any accounts for which
we are acting as fiduciary shall remain at all times within our control.
We understand that the Debentures are being offered in a transaction not
involving any public offering within the United States within the meaning of the
Securities Act and that the Debentures and the shares of Common Stock issuable
upon conversion thereof have not been registered under the Securities
Act, and we agree, on our own behalf and on behalf of each account for which we
acquire any Debentures, that if in the future we decide to resell or otherwise
transfer such Debentures or the Common Stock issuable upon conversion thereof,
such Debentures or Common Stock may be resold or otherwise transferred only (i)
to the Company or any subsidiary thereof, or (ii) to a person who is a
"qualified institutional buyer" (as defined in Rule 144A under the Securities
Act) in a transaction meeting the requirements of Rule 144A, or (iii) to an
Institutional Accredited Investor that, prior to such transfer, furnishes to the
Trustee or transfer agent for such securities a signed letter containing certain
representations and agreements relating to the restrictions on transfer of such
securities (the form of which letter can be obtained from such Trustee or
transfer agent), or (iv) pursuant to the exemption from registration provided by
Rule 144 under the Securities Art (if applicable), or (v) pursuant to a
registration statement which has been declared effective under the Securities
Act (and which continues to be effective at the time of such transfer), and in
each case, in accordance with any applicable securities laws of any State of the
United States or any other applicable jurisdiction and in accordance with the
legends set forth on the Debentures or the Common Stock issuable upon conversion
thereof, as the case may be. We further agree to provide any person purchasing
any of the Debentures or the Common Stock issuable upon conversion thereof other
than pursuant to clause (v) above from us a notice advising such purchaser that
resales of such securities are restricted as stated herein. We understand that
the Trustee or transfer agent for the Debentures and the Common Stock will not
be required to accept for registration of transfer any Debentures or any shares
of Common Stock issued upon conversion of the Debentures except upon
presentation of evidence satisfactory to the Company that the foregoing
restrictions on transfer have been complied with. We further understand that any
Debentures and any certificates representing Common Stock will be in the form of
definitive physical certificates and that such certificates will bear a legend
reflecting the substance of this paragraph other than certificates representing
Common Stock transferred pursuant to clause (v) above.
We acknowledge that the Company, others and you will rely upon our
confirmations, acknowledgments and agreements set forth herein, and we agree to
notify you promptly in writing if any of our representations or warranties
herein ceases to be accurate and complete.
THIS LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
INTERNAL LAWS OF THE STATE OF NEW YORK
-------------------------------------------------------
(Name of Purchaser)
By:
----------------------------------------------------
Name:
Title:
Address: