Exhibit 4.3
EXECUTION COPY
--------------
RESMED INC.
4% Convertible Subordinated Notes
due 2006
__________________________________________________________
INDENTURE
Dated as of June 20, 2001
__________________________________________________________
AMERICAN STOCK TRANSFER &
TRUST COMPANY
TRUSTEE
__________________________________________________________
CROSS REFERENCE TABLE*
TIA Section Indenture Section
310(a)(1)............................................ 7.09
(a)(2)............................................ 7.09
(a)(3)............................................ N.A.
(a)(4)............................................ N.A.
(b).................................................. 7.08; 7.10
(c)............................................... N.A.
311(a)............................................... 7.13
(b)............................................... 7.13
(c)............................................... N.A.
312(a)............................................... 2.05
(b)............................................... 12.03
(c)............................................... 12.03
313(a)............................................... 7.14
(b)(1)............................................ N.A.
(b)(2)............................................ 7.14
(c)............................................... 12.02
(d)............................................... 7.14
314(a)............................................... 4.02; 4.03; 12.02
(b)............................................... N.A.
(c)(1)............................................ 12.04
(c)(2)............................................ 12.04
(c)(3)............................................ N.A.
(d)............................................... N.A.
(e)............................................... 12.05
(f)............................................... N.A.
315(a)............................................... 7.01
(b)............................................... 7.15; 12.02
(c)............................................... 7.01
(d)............................................... 7.01
(e)............................................... 6.11
316(a) (last sentence)............................... 2.08
(a)(1)(A)......................................... 6.05
(a)(1)(B)......................................... 6.04
(a)(2)............................................ N.A.
(b)............................................... 6.07
317(a)(1)............................................ 6.08
(a)(2)............................................ 6.09
(b)............................................... 2.04
318(a)............................................... 12.01
N.A. means Not Applicable.
_____________________
* Note: This Cross Reference Table shall not, for any purpose, be deemed to be
part of the Indenture.
TABLE OF CONTENTS*
Page
ARTICLE 1
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 1.01 Definitions....................................................... 1
SECTION 1.02 Other Definitions................................................. 11
SECTION 1.03 Incorporation by Reference of Trust Indenture Act................. 12
SECTION 1.04 Rules of Construction............................................. 12
SECTION 1.05 Acts of Holders................................................... 12
ARTICLE 2
THE NOTES
SECTION 2.01 Form and Dating................................................... 13
SECTION 2.03 Registrar, Paying Agent and Conversion Agent...................... 16
SECTION 2.04 Paying Agent to Hold Money and Notes in Trust..................... 16
SECTION 2.05 Noteholder Lists.................................................. 17
SECTION 2.06 Transfer and Exchange............................................. 17
SECTION 2.07 Replacement Notes................................................. 18
SECTION 2.08 Outstanding Notes; Determinations of Holders' Action.............. 19
SECTION 2.09 Temporary Notes................................................... 20
SECTION 2.10 Cancellation...................................................... 20
SECTION 2.11 Persons Deemed Owners............................................. 20
SECTION 2.12 Global Notes...................................................... 20
SECTION 2.13 CUSIP and ISIN Numbers............................................ 25
SECTION 2.14 Defaulted Interest................................................ 25
ARTICLE 3
REDEMPTION AND PURCHASES
SECTION 3.01 Provisional Redemption............................................ 25
SECTION 3.02 Optional Redemption............................................... 26
SECTION 3.03 Notice of Trustee................................................. 26
SECTION 3.04 Selection of Notes to be Redeemed................................. 27
SECTION 3.05 Notice of Redemption.............................................. 27
SECTION 3.06 Effect of Notice of Redemption.................................... 28
SECTION 3.07 Deposit of Redemption Price....................................... 28
SECTION 3.08 Notes Redeemed in Part............................................ 29
SECTION 3.09 Conversion Arrangement on Call for Redemption..................... 29
_____________________
* Note: This Table of Contents shall not, for any purpose, be deemed to be part
of the Indenture.
i
SECTION 3.10 Repurchase of Notes at Option of the Holder upon Change in Control........................... 30
SECTION 3.11 Effect of Change in Control Repurchase Notice................................................ 34
SECTION 3.12 Deposit of Change in Control Repurchase Price................................................ 35
SECTION 3.13 Notes Purchased in Part...................................................................... 35
SECTION 3.14 Covenant to Comply with Securities Laws upon Purchase of Notes............................... 35
SECTION 3.15 Repayment to the Company..................................................................... 35
ARTICLE 4
COVENANTS
SECTION 4.01 Payment of Principal, Premium, Interest on the Notes......................................... 35
SECTION 4.02 SEC and Other Reports........................................................................ 36
SECTION 4.03 Compliance Certificate....................................................................... 36
SECTION 4.04 Further Instruments and Acts................................................................. 36
SECTION 4.05 Maintenance of Office or Agency.............................................................. 36
SECTION 4.06 Delivery of Certain Information.............................................................. 37
ARTICLE 5
SUCCESSOR CORPORATION
SECTION 5.01 When Company May Merge or Transfer Assets.................................................... 37
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01 Events of Default............................................................................ 38
SECTION 6.02 Acceleration................................................................................. 40
SECTION 6.03 Other Remedies............................................................................... 40
SECTION 6.04 Waiver of Past Defaults...................................................................... 41
SECTION 6.05 Control by Majority.......................................................................... 41
SECTION 6.06 Limitation on Suits.......................................................................... 41
SECTION 6.07 Rights of Holders to Receive Payment......................................................... 41
SECTION 6.08 Collection Suit by Trustee................................................................... 42
SECTION 6.09 Trustee May File Proofs of Claim............................................................. 42
SECTION 6.10 Priorities................................................................................... 42
SECTION 6.11 Undertaking for Costs........................................................................ 43
SECTION 6.12 Waiver of Stay, Extension or Usury Laws...................................................... 43
ARTICLE 7
TRUSTEE
SECTION 7.01 Duties and Responsibilities of the Trustee; During Default; Prior to Default................. 43
SECTION 7.02 Certain Rights of the Trustee................................................................ 44
SECTION 7.03 Trustee Not Responsible for Recitals, Disposition of Notes or Application of Proceeds Thereof 46
SECTION 7.04 Trustee and Agents May Hold Notes; Collections, etc.......................................... 46
SECTION 7.05 Moneys Held by Trustee....................................................................... 46
ii
SECTION 7.06 Compensation and Indemnification of Trustee and Its Prior Claim.............................. 46
SECTION 7.07 Right of Trustee to Rely on Officers' Certificate, etc....................................... 47
SECTION 7.08 Conflicting Interests........................................................................ 47
SECTION 7.09 Persons Eligible for Appointment as Trustee.................................................. 47
SECTION 7.10 Resignation and Removal; Appointment of Successor Trustee.................................... 47
SECTION 7.11 Acceptance of Appointment by Successor Trustee............................................... 48
SECTION 7.12 Merger, Conversion, Consolidation or Succession to Business of Trustee....................... 49
SECTION 7.13 Preferential Collection of Claims Against the Company........................................ 49
SECTION 7.14 Reports by the Trustee....................................................................... 49
SECTION 7.15 Trustee to Give Notice of Default, But May Withhold in Certain Circumstances................. 50
ARTICLE 8
DISCHARGE OF INDENTURE
SECTION 8.01 Discharge of Liability on Notes.............................................................. 50
SECTION 8.02 Repayment of the Company..................................................................... 50
ARTICLE 9
AMENDMENTS
SECTION 9.01 Without Consent of Holders................................................................... 51
SECTION 9.02 With Consent of Holders...................................................................... 52
SECTION 9.03 Compliance with Trust Indenture Act.......................................................... 52
SECTION 9.04 Revocation and Effect of Consents, Waivers and Actions....................................... 52
SECTION 9.05 Notation on or Exchange of Notes............................................................. 53
SECTION 9.06 Trustee to Sign Supplemental Indentures...................................................... 53
SECTION 9.07 Effect of Supplemental Indentures............................................................ 53
ARTICLE 10
CONVERSION
SECTION 10.01 Conversion Right and Conversion Price....................................................... 53
SECTION 10.02 Exercise of Conversion Right................................................................ 54
SECTION 10.03 Fractions of Shares......................................................................... 54
SECTION 10.04 Adjustment of Conversion Price.............................................................. 55
SECTION 10.05 Notice of Adjustments of Conversion Price................................................... 64
SECTION 10.06 Notice Prior to Certain Actions............................................................. 64
SECTION 10.07 Company to Reserve Common Stock............................................................. 65
SECTION 10.08 Taxes on Conversions........................................................................ 65
SECTION 10.09 Covenant as to Common Stock................................................................. 65
SECTION 10.10 Cancellation of Converted Notes............................................................. 66
SECTION 10.11 Effect of Reclassification, Consolidation, Merger or Sale................................... 66
SECTION 10.12 Adjustment for Other Distributions.......................................................... 67
SECTION 10.13 Responsibility of Trustee for Conversion Provisions......................................... 68
iii
ARTICLE 11
SUBORDINATION
SECTION 11.01 Agreement to Subordinate...................................... 68
SECTION 11.02 Liquidation; Dissolution; Bankruptcy.......................... 68
SECTION 11.03 Default on Designated Senior Indebtedness..................... 69
SECTION 11.04 Acceleration of Notes......................................... 70
SECTION 11.05 When Distribution Must Be Paid Over........................... 70
SECTION 11.06 Notice by the Company......................................... 71
SECTION 11.07 Subrogation................................................... 71
SECTION 11.08 Relative Rights............................................... 71
SECTION 11.09 Subordination May Not Be Impaired by the Company.............. 71
SECTION 11.10 Distribution or Notice to Representative...................... 71
SECTION 11.11 Rights of Trustee and Paying Agent............................ 72
ARTICLE 12
MISCELLANEOUS
SECTION 12.01 Trust Indenture Act Controls.................................. 72
SECTION 12.02 Notices....................................................... 72
SECTION 12.03 Communication by Holders with Other Holders................... 73
SECTION 12.04 Certificate and Opinion as to Conditions Precedent............ 73
SECTION 12.05 Statements Required in Certificate or Opinion................. 73
SECTION 12.06 Separability Clause........................................... 74
SECTION 12.07 Rules by Trustee, Paying Agent, Conversion Agent and Registrar 74
SECTION 12.08 Legal Holidays................................................ 74
SECTION 12.09 GOVERNING LAW................................................. 74
SECTION 12.10 No Recourse Against Others.................................... 74
SECTION 12.11 Successors.................................................... 74
SECTION 12.12 Multiple Originals............................................ 74
EXHIBITS
--------
Exhibit A-1 Form of Face of Global Note
Exhibit A-2 Form of Certificated Note
Exhibit B-1 Transfer Certificate
Exhibit B-2 Form of Letter to Be Delivered by Accredited Investors
Exhibit B-3 Form of Letter to Be Delivered in Connection with Regulation S Transfers
iv
INDENTURE dated as of June 20, 2001 between RESMED INC., a Delaware
corporation (the "Company"), and AMERICAN STOCK TRANSFER & TRUST COMPANY, a New
York corporation with trust powers, as Trustee hereunder (the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the creation of an issue of its 4%
Convertible Subordinated Notes due 2006 (herein called the "Notes") of
substantially the tenor and amount hereinafter set forth, and to provide
therefor the Company has duly authorized the execution and delivery of this
Indenture.
All things necessary to make the Notes, when the Notes are executed by
the Company and authenticated and delivered hereunder, the valid obligations of
the Company, and to make this Indenture a valid agreement of the Company, in
accordance with their and its terms, have been done. Further, all things
necessary to duly authorize the issuance of the Common Stock of the Company
issuable upon the conversion of the Notes, and to duly reserve for issuance the
number of shares of Common Stock issuable upon such conversion, have been done.
This Indenture is subject to, and shall be governed by, the provisions
of the Trust Indenture Act of 1939, as amended, that are required to be a part
of and to govern indentures qualified under the Trust Indenture Act of 1939, as
amended.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Notes
by the Holders thereof, it is mutually covenanted and agreed, for the equal and
proportionate benefit of all Holders of the Notes, as follows:
ARTICLE 1
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 1.01 Definitions. For all purposes of this Indenture, except
-----------
as otherwise expressly provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;
(2) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with GAAP; and
(3) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
"Adjusted Interest Rate" means, with respect to any Reset Transaction,
----------------------
the rate per annum that is the arithmetic average of the rates quoted by two
Reference Dealers selected
1
by the Company or its successor as the rate at which interest on the Notes
should accrue so that the fair market value, expressed in dollars, of a Note
immediately after the later of:
(1) the public announcement of such Reset Transaction, or
(2) the public announcement of a change in dividend policy in
connection with such Reset Transaction
will equal the average Trading Price of a Note for the 20 Trading Days
preceding the date of public announcement of such Reset Transaction; provided
that the Adjusted Interest Rate shall not be less than 5% per annum.
"Affiliate" of any specified person means any other person directly or
---------
indirectly controlling or controlled by or under direct or indirect common
control with such specified person. For purposes of this definition, "control"
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 Procedures" means, with respect to any transfer or
---------------------
transaction involving a Global Note or beneficial interest therein, the rules
and procedures of the Depositary for such Note, in each case to the extent
applicable to such transaction and as in effect from time to time.
"Board of Directors" means either the board of directors of the
------------------
Company or any duly authorized committee of such board.
"Board Resolution" means a resolution duly adopted by the Board of
----------------
Directors, a copy of which, certified by the Secretary or an Assistant Secretary
of the Company to be in full force and effect on the date of such certification,
shall have been delivered to the Trustee.
"Business Day" means each day of the year other than a Saturday or a
------------
Sunday on which banking institutions are not required or authorized to close in
the City of New York.
"Capital Stock" of any corporation means any and all shares,
-------------
interests, rights to purchase, warrants, options, participations or other
equivalents of or interests in (however designated) stock issued by that
corporation.
"Certificated Notes" means Notes that are in the form of the Notes
------------------
attached hereto as Exhibit A-2.
"Closing Price" of any security on any date of determination means:
-------------
(1) the closing sale price (or, if no closing sale price is reported,
the last reported sale price) of such security on the New York Stock
Exchange on such date;
2
(2) if such security is not listed for trading on the New York Stock
Exchange on any such date, the closing sale price as reported in the
composite transactions for the principal U.S. securities exchange on which
such security is so listed;
(3) if such security is not so listed on a U.S. national or regional
securities exchange, the closing sale price as reported by the NASDAQ
National Market;
(4) if such security is not so reported, the last quoted bid price
for such security in the over-the-counter market as reported by the
National Quotation Bureau or similar organization; or
(5) if such bid price is not available, the average of the mid-point
of the last bid and ask prices of such security on such date from at least
three nationally recognized independent investment banking firms retained
for this purpose by the Company.
"Common Stock" means the Common Stock, par value $.004 per share, of
------------
the Company authorized at the date of this instrument as originally executed.
Subject to the provisions of Section 10.11, shares issuable on conversion or
repurchase of Notes shall include only shares of Common Stock or shares of any
class or classes of common stock resulting from any reclassification or
reclassifications thereof; provided, however, that if at any time there shall be
more than one such resulting class, the shares so issuable on conversion of
Notes shall include shares of all such classes, and the shares of each such
class then so issuable shall be substantially in the proportion which the total
number of shares of such class resulting from all such reclassifications bears
to the total number of shares of all such classes resulting from all such
reclassifications.
"common stock" means any stock of any class of capital stock 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 issuer.
"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 any two Officers.
"Conversion Agent" means any person authorized by the Company to
----------------
convert Notes in accordance with Article 10 hereof.
"Corporate Trust Office" means the principal office of the Trustee at
----------------------
which at any time its corporate trust business shall be administered, which
office at the date hereof is located at 59 Maiden Lane, New York, New York
10038, or such other address as the Trustee may designate from time to time by
notice to the Holders and the Company, or the principal corporate trust office
of any successor Trustee (or such other address as a successor Trustee may
designate from time to time by notice to the Holders and the Company).
3
"Default" means any event which is, or after notice or passage of time
-------
or both would be, an Event of Default.
"Designated Senior Indebtedness" means:
------------------------------
(1) all Senior Indebtedness under the Senior Loan Agreement; and
(2) any other Senior Indebtedness which, at the time of
determination, has an aggregate principal amount outstanding of at least
$20.0 million and that has been specifically designated in the instrument
evidencing such Senior Indebtedness as "Designated Senior Indebtedness" of
the Company.
"Dividend Yield" on any security for any period means the dividends
--------------
paid or proposed to be paid pursuant to an announced dividend policy on such
security for such period divided by, if with respect to dividends paid on such
security, the average Closing Price of such security during such period and, if
with respect to dividends proposed to be paid on such security, the Closing
Price of such security on the effective date of the related Reset Transaction.
"Dollar" or "U.S.$" means a dollar or other equivalent unit in such
------ -----
coin or currency of the United States as at the time shall be legal tender for
the payment of public and private debts.
"GAAP" means United States generally accepted accounting principles as
----
in effect from time to time.
"Global Notes" means Notes that are in the form of the Notes attached
------------
hereto as Exhibit A-1, and to the extent that such Notes are required to bear
the Legend required by Section 2.06(f), such Notes will be in the form of a 144A
Global Note or Regulation S Note.
"Guarantee" means a guarantee (other than by endorsement of negotiable
---------
instruments for collection in the ordinary course of business), direct or
indirect, in any manner (including, without limitation, letters of credit and
reimbursement agreements in respect thereof), of all or any part of any
Indebtedness.
"Holder" or "Noteholder" means a person in whose name a Note is
------ ----------
registered on the Registrar's books.
"Indebtedness" means, with respect to any person, without duplication:
------------
(1) all liabilities of such person for borrowed money (including
overdrafts) or for the deferred purchase price of property or services,
excluding any trade payables and other accrued current liabilities incurred
in the ordinary course of business, but including, without limitation, all
obligations, contingent or otherwise, of such person in connection with any
letters of credit and acceptances issued under letter of credit facilities,
acceptance facilities or other similar facilities;
(2) all obligations of such person evidenced by bonds, notes,
debentures or other similar instruments;
4
(3) indebtedness of such person created or arising under any
conditional sale or other title retention agreement with respect to
property acquired by such person (even if the rights and remedies of the
seller or lender under such agreement in the event of default are limited
to repossession or sale of such property), but excluding trade payables
arising in the ordinary course of business;
(4) all capitalized lease obligations of such person;
(5) all obligations of such person under or in respect of interest
rate agreements or currency agreements;
(6) all indebtedness referred to in (but not excluded from) the
preceding clauses of other persons and all dividends of other persons, the
payment of which is secured by (or for which the holder of such
indebtedness has an existing right, contingent or otherwise, to be secured
by) any Lien or with respect to property (including, without limitation,
accounts and contract rights) owned by such person, even though such person
has not assumed or become liable for the payment of such indebtedness (the
amount of such obligation being deemed to be the lesser of the value of
such property or asset or the amount of the obligation so secured);
(7) all guarantees by such person of indebtedness referred to in this
definition or of any other person;
(8) all Redeemable Capital Stock of such person valued at the greater
of its voluntary or involuntary maximum fixed repurchase price plus accrued
and unpaid dividends; and
(9) the present value of the obligation of such person as lessee for
net rental payments (excluding all amounts required to be paid on account
of maintenance and repairs, insurance, taxes, assessments, water, utilities
and similar charges to the extent included in such rental payments) during
the remaining term of the lease included in such sale and leaseback
transaction including any period for which such lease has been extended or
may, at the option of the lessor, be extended. Such present value shall be
calculated using a discount rate equal to the rate of interest implicit in
such transaction, determined in accordance with GAAP.
"Indenture" means this Indenture, as amended or supplemented from time
---------
to time in accordance with the terms hereof, including the provisions of the TIA
that are deemed to be a part hereof.
"Institutional Accredited Investor" means an institutional "accredited
---------------------------------
investor" as described in Rule 501(a)(1), (2), (3) or (7) under the Securities
Act.
"Interest Payment Date" means the Stated Maturity of an installment of
---------------------
interest on the Notes.
5
"Interest Rate" means (a) if a Reset Transaction has not occurred, 4%
-------------
per annum, or (b) following the occurrence of a Reset Transaction, the Adjusted
Interest Rate related to such Reset Transaction to, but not including the
effective date of any succeeding Reset Transaction.
"Issue Date" of any Note means the date on which the Note was
----------
originally issued or deemed issued as set forth on the face of the Note.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
----
charge, security interest or encumbrance of any kind in respect of such asset
given to secure Indebtedness, whether or not filed, recorded or otherwise
perfected under applicable law (including any conditional sale or other title
retention agreement, any lease in the nature thereof, any option or other
agreement to sell or give a security interest in and any filing of or agreement
to give any financing statement under the Uniform Commercial Code (or equivalent
statutes) of any jurisdiction with respect to any such lien, pledge, charge or
security interest).
"Notes" has the meaning ascribed to it in the first paragraph under
-----
the caption "Recitals of the Company".
"Officer" means the Chairman of the Board, the Vice Chairman, the
-------
Chief Executive Officer, the President, any Executive Vice President, any Senior
Vice 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 any two Officers, and delivered to the Trustee. An Officers'
Certificate given pursuant to Section 4.03 shall be signed by one authorized
financial or accounting Officer of the Company but need not contain the
information specified in Sections 12.04 and 12.05.
"144A Global Note" means a permanent Global Note in the form of the
----------------
Note attached hereto as Exhibit A-1, and that is deposited with and registered
in the name of the Depositary, representing Notes sold in reliance on Rule 144A
under the Securities Act.
"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.
"person" or "Person" means any individual, corporation, limited
------ ------
liability company, partnership, joint venture, association, joint-stock company,
trust, unincorporated organization, or government or any agency or political
subdivision thereof.
"principal" of a Note means the principal amount due on the Stated
---------
Maturity as set forth on the face of the Note.
"Redeemable Capital Stock" means any class of the Company's Capital
------------------------
Stock that, either by its terms, by the terms of any securities into which it is
convertible or exchangeable or by contract or otherwise, is, or upon the
happening of an event or passage of time would be, required to be redeemed
(whether by sinking fund or otherwise) prior to the date
6
that is 91 days after the final scheduled maturity of the Notes or is redeemable
at the option of the Holder thereof at any time prior to such date, or is
convertible into or exchangeable for debt securities at any time prior to such
date (unless it is convertible or exchangeable solely at the Company's option).
"Redemption Date" or "redemption date" means the date specified for
--------------- ---------------
redemption of the Notes in accordance with the terms of the Notes and this
Indenture.
"Redemption Price" or "redemption price" shall have the meaning set
---------------- ----------------
forth in paragraph 5 of the Notes.
"Reference Dealer" means a dealer engaged in the trading of
----------------
convertible securities.
"Regular Record Date" means, with respect to the interest payable on
-------------------
any Interest Payment Date, the close of business on June 5 or December 5
(whether or not a Business Day), as the case may be, next preceding such
Interest Payment Date.
"Regulation S" means Regulation S under the Securities Act or, if at
------------
any time after the execution of this Indenture such regulation is superceded or
no longer in effect, then any rule, regulation or statutory provision of like
intent successor thereto.
"Regulation S Note" means a permanent Global Note in the form attached
-----------------
hereto as Exhibit A-1, and that is deposited with and registered in the name of
the Depositary, representing Notes sold in reliance on Rule 903 of Regulation S
under the Securities Act.
"Reset Transaction" means a merger, consolidation or statutory share
-----------------
exchange to which the entity that is the issuer of the shares of common stock
into which the Notes are then convertible into is a party; a sale of all or
substantially all the assets of that entity; a recapitalization of those shares
of common stock; or a distribution described in Section 10.04(d) hereof; after
the effective date of which transaction or distribution the Notes would be
convertible into:
(1) shares of an entity the common stock of which had a Dividend
Yield for the four fiscal quarters of such entity immediately preceding the
public announcement of such transaction or distribution that was more than
2.5% higher than the Dividend Yield on the Common Stock (or other common
stock then issuable upon conversion of the Notes) for the four fiscal
quarters preceding the public announcement of such transaction or
distribution; or
(2) shares of an entity that announces a dividend policy prior to the
effective date of such transaction or distribution which policy, if
implemented, would result in a Dividend Yield on such entity's common stock
for the next four fiscal quarters that would result in such a 2.5%
increase.
"Restriction Termination Date" means, with respect to any Note, the
----------------------------
date that is two year after the later of:
7
(1) the Issue Date of the Note, or, in the case of Common Stock, the
Issue Date of the Note upon the conversion of which such Common Stock was
issued; and
(2) the last date on which the Company or any "affiliate," as defined
in Rule 144 (or successor provision) under the Securities Act, of the
Company was the owner of such Note or Common Stock.
"Responsible Officer" means, when used with respect to the Trustee,
-------------------
any officer within the corporate trust department of the Trustee, including any
vice president, assistant vice president, assistant secretary, assistant
treasurer, trust officer or any other officer of the Trustee who customarily
performs functions similar to those performed by the Persons who at the time
shall be such officers, respectively, or to whom any corporate trust matter is
referred because of such person's knowledge of and familiarity with the
particular subject.
"Restricted Note" means a Note required to bear the restrictive legend
---------------
set forth in the form of Note set forth in Exhibits A-1 and A-2 of this
Indenture.
"Rule 144A" means Rule 144A under the Securities Act (or any successor
---------
provision), as it may be amended from time to time.
"SEC" means the Securities and Exchange Commission.
---
"Securities Act" means the United States Securities Act of 1933 (or
--------------
any successor statute), as amended from time to time.
"Senior Loan Agreement" means the Amended and Restated Loan Agreement
---------------------
dated as of June 13, 2000, between the Company and Union Bank of California,
N.A., providing for a revolving credit facility, as such agreement may be
amended, renewed, extended, substituted, refinanced, restructured, replaced,
supplemented or otherwise modified from time to time, including without
limitation, any increase in the principal amount of debt thereunder.
"Senior Indebtedness" means:
-------------------
(1) all obligations of the Company, now or hereafter existing, under
or in respect of the Senior Loan Agreement and the document and instruments
executed in connection therewith, whether for principal, premium, if any,
interest (including interest accruing after the filing of, or which would
have accrued but for the filing of, a petition by or against the Company
under bankruptcy law, whether or not such interest is allowed as a claim
after such filing in any proceeding under such law) and other amounts due
in connection therewith (including, without limitation, any fees, premiums,
expenses, reimbursement obligations with respect to letters of credit and
indemnities), whether outstanding on the date of this Indenture or
thereafter created, incurred or assumed; and
(2) the principal of, premium, if any, and interest on all other
Indebtedness of the Company (other than the Notes), whether outstanding on
the date of this Indenture or thereafter created, incurred or assumed,
unless, in the case of any particular indebtedness, the instrument creating
or evidencing the same or pursuant to which the same is
8
outstanding expressly provides that such indebtedness shall not be senior
in right of payment to the Notes.
Notwithstanding the foregoing, "Senior Indebtedness" shall not
include:
(a) indebtedness evidenced by the Notes;
(b) indebtedness of the Company that by operation of law is
subordinate to any general unsecured obligations of the Company;
(c) any liability for federal, state or local taxes or other taxes,
owed or owing by the Company;
(d) accounts payable or other liabilities owed or owing by the Company
to trade creditors (including guarantees thereof or instruments evidencing
such liabilities);
(e) amounts owed by the Company for compensation to employees or for
services rendered to the Company;
(f) indebtedness of the Company to any subsidiary or any other
affiliate of the Company or any of such affiliate's subsidiaries;
(g) Capital Stock of the Company;
(h) indebtedness evidenced by any guarantee of any indebtedness
ranking equal or junior in right of payment to the Notes; and
(i) indebtedness which, when incurred and without respect to any
election under Section 1111(b) of Title 11 of the United States Code, is
without recourse to the Company.
"Significant Subsidiary" means a Subsidiary of the Company, including
----------------------
its Subsidiaries, which meets any of the following conditions:
(1) the Company's and its other Subsidiaries' investments in and
advances to the Subsidiary exceed 10 percent of the total assets of the
Company and its Subsidiaries consolidated as of the end of any two of the
three most recently completed fiscal years; or
(2) the Company's and its other Subsidiaries' proportionate share of
the total assets of the Subsidiary exceeds 10 percent of the total assets
of the Company and its Subsidiaries consolidated as of the end of any two
of the three most recently completed fiscal years; or
(3) the Company's and its other Subsidiaries' equity in the income
from continuing operations before income taxes, extraordinary items and
cumulative effect of a change in accounting principles of the Subsidiary
exceeds 10 percent of such income of the Company and its Subsidiaries
consolidated as of the end of any two of the three most recently completed
fiscal years.
9
"Stated Maturity", when used with respect to any Note or any
---------------
installment of interest thereon, means the date specified in such Note as the
fixed date on which the principal of such Note or such installment of interest
is due and payable.
"Subsidiary" means (i) a corporation, a majority of whose Capital
----------
Stock with voting power, under ordinary circumstances, to elect directors is, at
the date of determination, directly or indirectly owned by the Company, by one
or more Subsidiaries of the Company or by the Company and one or more
Subsidiaries of the Company, (ii) a partnership in which the Company or a
Subsidiary of the Company holds a majority interest in the equity capital or
profits of such partnership, or (iii) any other person (other than a
corporation) in which the Company, a Subsidiary of the Company or the Company
and one or more Subsidiaries of the Company, directly or indirectly, at the date
of determination, has (x) at least a majority ownership interest or (y) the
power to elect or direct the election of a majority of the directors or other
governing body of such person.
"TIA" means the Trust Indenture Act of 1939 as in effect on the date
---
of this Indenture, provided, however, that in the event the TIA is amended after
such date, TIA means, to the extent required by any such amendment, the TIA as
so amended.
"Trading Day" means a day during which trading in the Common Stock
-----------
generally occurs on the New York Stock Exchange or, if the Common Stock is not
listed on the New York Stock Exchange, on the principal other national or
regional securities exchange on which the Common Stock is then listed or, if the
Common Stock is not listed on a national or regional securities exchange, on the
National Association of Notes Dealers Automated Quotation System or, if the
Common Stock is not quoted on the National Association of Securities Dealers
Automated Quotation System, on the principal other market on which the Common
Stock is then traded.
"Trading Price" of a security on any date of determination means:
-------------
(1) the closing sale price (or, if no closing sale price is reported,
the last reported sale price) of such security (regular way) on the New
York Stock Exchange on such date;
(2) if such security is not listed for trading on the New York Stock
Exchange on any such date, the closing sale price as reported in the
composite transactions for the principal U.S. securities exchange on which
such security is so listed;
(3) if such security is not so listed on a U.S. national or regional
securities exchange, the closing sale price as reported by the Nasdaq
National Market;
(4) if such security is not so reported, the last price quoted by
Interactive Data Corporation for such security or, if Interactive Data
Corporation is not quoting such price, a similar quotation service selected
by the Company;
(5) if such security is not so quoted, the average of the mid-point
of the last bid and ask prices for such security from at least two dealers
recognized as market-makers for such security; or
10
(6) if such security is not so quoted, the average of the last bid
and ask prices for such security from the Reference Dealer.
"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 mean such
successor. The foregoing sentence shall likewise apply to any subsequent such
successor or successors.
"United States" means the United States of America (including the
-------------
States and the District of Columbia), its territories, its possessions and other
areas subject to its jurisdiction (its "possessions" including Puerto Rico, the
U.S. Virgin Islands, Guam, American Samoa, Wake Island and the Northern Mariana
Islands).
SECTION 1.02 Other Definitions.
-----------------
Defined in
Term Section
---- -------
"Act" ................................. 1.05(a)
"Agent Members" ....................... 2.12(f)
"Bankruptcy Law"....................... 6.01
"Change in Control".................... 3.10(a)
"Change in Control Repurchase Date".... 3.10(a)
"Change in Control Repurchase Notice".. 3.10(d)
"Change in Control Repurchase Price"... 3.10(a)
"Conversion Price"..................... 10.01
"Current Market Price"................. 10.04(g)
"Custodian"............................ 6.01
"Depositary"........................... 2.01(a)
"DTC".................................. 2.01(a)
"Event of Default"..................... 6.01
"Exchange Act"......................... 3.10(a)
"excluded securities".................. 10.04(d)
"Expiration Time"...................... 10.04(f)
"fair market value".................... 10.04(g)
"Institutional Accredited Investors"... 2.01(b)
"Legal Holiday"........................ 12.08
"Legend"............................... 2.06(f)
"Non-Electing Share"................... 10.11
"Non-Payment Default".................. 11.03(b)
"Notice of Default".................... 6.01
"Paying Agent"......................... 2.03
"Payment Blockage Period".............. 11.03(b)
"Payment Default"...................... 11.03(a)
"Purchased Shares"..................... 10.04(f)
"Permitted Junior Securities".......... 11.02
"QIB".................................. 2.01(a)
11
"Record Date".......................... 10.04(g)
"Reference Period"..................... 10.04(d)
"Registrar"............................ 2.03
"Rule 144A Information"................ 4.06
"Trigger Event"........................ 10.04(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.
"indenture Notes" means the Notes.
"indenture Note holder" means a Noteholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture Notes means the Company.
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 rule have the
meanings assigned to them by such definitions.
SECTION 1.04 Rules of Construction. Unless the context otherwise
---------------------
requires:
(a) a term has the meaning assigned to it;
(b) 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;
(c) "or" is not exclusive;
(d) "including" means including, without limitation; and
(e) words in the singular include the plural, and words in the plural
include the singular.
SECTION 1.05 Acts of Holders. (a) Any request, demand, authorization,
---------------
direction, notice, consent, waiver or other action provided by this Indenture to
be given or taken by Holders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Holders in person or
by their agent duly appointed in writing; and, except as herein otherwise
expressly provided, such action shall become effective when such instrument or
instruments are delivered to the Trustee and, where it is hereby expressly
required,
12
to the Company. Such instrument or instruments (and the action embodied therein
and evidenced thereby) are herein sometimes referred to as the "Act" of Holders
signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this Indenture and conclusive in favor of the Trustee and the
Company, if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to such officer the execution thereof.
Where such execution is by a signer acting in a capacity other than such
signer's individual capacity, such certificate or affidavit shall also
constitute sufficient proof of such signer's authority. The fact and date of the
execution of any such instrument or writing, or the authority of the Person
executing the same, may also be proved in any other manner which the Trustee
deems sufficient.
The ownership of Notes shall be proved by the register for the Notes
or by a certificate of the Registrar.
Any request, demand, authorization, direction, notice, consent, waiver
or other Act of the Holder of any Note shall bind every future Holder of the
same Note and the holder of every Note issued upon the registration of transfer
thereof or in exchange therefor or in lieu thereof in respect of anything done,
omitted or suffered to be done by the Trustee or the Company in reliance
thereon, whether or not notation of such action is made upon such Note.
If the Company shall solicit from the Holders any request, demand,
authorization, direction, notice, consent, waiver or other Act, the Company may,
at its option, by or pursuant to a resolution of the Board of Directors, fix in
advance a record date for the determination of Holders entitled to give such
request, demand, authorization, direction, notice, consent, waiver or other Act,
but the Company shall have no obligation to do so. If such a record date is
fixed, such request, demand, authorization, direction, notice, consent, waiver
or other Act may be given before or after such record date, but only the Holders
of record at the close of business on such record date shall be deemed to be
Holders for purposes of determining whether Holders of the requisite proportion
of outstanding Notes have authorized or agreed or consented to such request,
demand, authorization, direction, notice, consent, waiver or other Act, and for
that purpose the outstanding Notes shall be computed as of such record date;
provided that no such authorization, agreement or consent by the Holders on such
record date shall be deemed effective unless it shall become effective pursuant
to the provisions of this Indenture not later than six months after the record
date.
ARTICLE 2
THE NOTES
SECTION 2.01 Form and Dating. The Notes and the Trustee's certificate
---------------
of authentication to be borne by such Notes shall be substantially in the form
annexed hereto as Exhibits A-1 and A-2, which are incorporated in and made a
part of this Indenture. The terms
13
and provisions contained in the form of Note shall constitute, and are hereby
expressly made, a part of this Indenture and to the extent applicable, the
Company and the Trustee, by their execution and delivery of this Indenture,
expressly agree to such terms and provisions and to be bound thereby.
Any of the Notes may have such letters, numbers or other marks of
identification and such notations, legends and endorsements as the officers
executing the same may approve (execution thereof to be conclusive evidence of
such approval) and as are not inconsistent with the provisions of this
Indenture, or as may be required to comply with any law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any
securities exchange or automated quotation system on which the notes may be
listed or designated for issuance, or to conform to usage.
(a) Global Notes. Notes offered and sold within the United States to
------------
qualified institutional investors as defined in Rule 144A ("QIBs") in reliance
on Rule 144A shall be issued, initially in the form of a 144A Global Note, which
shall be deposited with the Trustee at its Corporate Trust Office, as custodian
for, and registered in the name of, The Depository Trust Company ("DTC") or the
nominee thereof (such depositary, or any successor thereto, and any such nominee
being hereinafter referred to as the "Depositary"), duly executed by the Company
and authenticated by the Trustee as hereinafter provided. The aggregate
principal amount of the 144A Global Notes may from time to time be increased or
decreased by adjustments made on the records of the Trustee and the Depositary
as hereinafter provided.
Notes offered and sold outside the United States in compliance with
Regulation S under the Securities Act shall be issued initially in the form of
one or more permanent global Notes in definitive fully registered form (the
"Regulation S Global Note," and together with the 144A Global Note, the "Global
Notes"), duly executed by the Company and authenticated by the Trustee as
hereinafter provided. Such Regulation S Global Notes shall be registered in the
name of the Depositary and deposited with the Trustee at its Corporate Trust
Office, as custodian for the Depositary, for credit to the respective accounts
at the Depositary of the depositories for Morgan Guaranty Trust Company of New
York, Brussels office, as operator of the Euroclear Clearance System
("Euroclear") or for Clearstream Banking ("Clearstream"), societe anonyme, in
turn for credit to the respective accounts of beneficial owners of the Notes
represented thereby in accordance with the rules thereof. The aggregate
principal amount of the Regulation S Global Note may from time to time be
increased or decreased by adjustments made on the records of the Note Registrar
and the Depositary as hereinafter provided.
(b) Global Notes in General. Each Global Note shall represent such of
-----------------------
the outstanding Notes as shall be specified therein and each shall provide that
it shall represent the aggregate amount of outstanding Notes from time to time
endorsed thereon and that the aggregate amount of outstanding Notes represented
thereby may from time to time be reduced or increased, as appropriate, to
reflect exchanges, redemptions and conversions.
Any adjustment of the aggregate principal amount of a Global Note to
reflect the amount of any increase or decrease in the amount of outstanding
Notes represented thereby shall be made by the Trustee in accordance with
instructions given by the Holder thereof as required by Section 2.12 hereof and
shall be made on the records of the Trustee and the Depositary.
14
(c) Book-Entry Provisions. This Section 2.01(c) shall apply only to
---------------------
Global Notes deposited with or on behalf of the Depositary.
The Company shall execute and the Trustee shall, in accordance with
this Section 2.01(c), authenticate and deliver initially one or more Global
Notes that (a) shall be registered in the name of the Depositary, (b) shall be
delivered by the Trustee to the Depositary or pursuant to the Depositary's
instructions and (c) shall bear legends substantially to the following effect:
"UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN
THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT
HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT
NOT IN PART, TO NOMINEES OF THE DEPOSITORY TRUST COMPANY OR TO A SUCCESSOR
THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS
GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE
RESTRICTIONS SET FORTH IN ARTICLE TWO OF THE INDENTURE REFERRED TO ON THE
REVERSE HEREOF."
(d) Restrictive Legends. Until the Restriction Termination Date, all
-------------------
Global Notes and all Certificated Notes shall bear the Legend, unless such Notes
have been transferred pursuant to a registration statement that has been
declared effective under the Securities Act. Until the Restriction Termination
Date, the Company covenants that any stock certificate representing shares of
Common Stock delivered by the Company upon conversion of any Notes will bear the
Legend, unless such shares have been sold pursuant to a registration statement
that has been declared effective under the Securities Act.
(e) Certificated Notes. Notes not issued as interests in the Global
------------------
Notes will be issued in certificated form substantially in the form of Exhibit
A-2 attached hereto.
SECTION 2.02 Execution and Authentication. The Notes shall be executed
----------------------------
on behalf of the Company by any Officer, under its corporate seal reproduced
thereon. The signature of the Officer on the Notes may be manual or facsimile.
Notes bearing the manual or facsimile signatures of individuals who
were at the time of the execution of the Notes the proper Officers of the
Company shall bind the Company,
15
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Notes or did not hold
such offices at the date of authentication of such Notes.
No Note shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Note a
certificate of authentication substantially in the form provided for herein duly
executed by the Trustee by manual signature of an authorized officer, and such
certificate upon any Note shall be conclusive evidence, and the only evidence,
that such Note has been duly authenticated and delivered hereunder.
The Trustee shall authenticate and deliver Notes for original issue in
an aggregate principal amount of up to $180,000,000 upon a Company Order without
any further action by the Company. The aggregate principal amount of Notes
outstanding at any time may not exceed the amount set forth in the foregoing
sentence, except as provided in Section 2.07.
The Notes shall be issued only in registered form without coupons and
only in denominations of $1,000 in principal amount and any integral multiple
thereof.
SECTION 2.03 Registrar, Paying Agent and Conversion Agent. The
--------------------------------------------
Company shall maintain an office or agency where Notes may be presented for
registration of transfer or for exchange ("Registrar"), an office or agency
where Notes may be presented for purchase or payment ("Paying Agent") and an
office or agency where Notes may be presented for conversion ("Conversion
Agent"). The Registrar shall keep a register of the Notes 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, including any named pursuant
to Section 4.05. The term Conversion Agent includes any additional conversion
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 (other than the
Trustee). The agreement shall implement the provisions of this Indenture that
relate to such agent. 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 such and shall be entitled
to appropriate compensation therefor pursuant to Section 7.06. The Company or
any Subsidiary or an Affiliate of either of them 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 Notes.
SECTION 2.04 Paying Agent to Hold Money and Notes in Trust. Except as
---------------------------------------------
otherwise provided herein, on or prior to each due date of payments in respect
of any Note, the Company shall deposit with the Paying Agent a sum of money (in
immediately available funds if deposited on the due date) or Common Stock
sufficient to make such payments when so becoming due. The Company shall require
each Paying Agent (other than the Trustee) to agree in writing that the Paying
Agent shall hold in trust for the benefit of Noteholders or the Trustee
16
all money and Common Stock held by the Paying Agent for the making of payments
in respect of the Notes 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 Common Stock so held in trust. If the
Company, a Subsidiary or an Affiliate of either of them acts as Paying Agent, it
shall segregate the money and Common Stock held by it as Paying Agent and hold
it as a separate trust fund. The Company at any time may require a Paying Agent
to pay all money and Common Stock held by it to the Trustee and to account for
any funds and Common Stock disbursed by it. Upon doing so, the Paying Agent
shall have no further liability for the money or Common Stock.
SECTION 2.05 Noteholder 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 Noteholders. If the Trustee is not the Registrar,
the Company shall cause to be furnished to the Trustee at least semiannually on
June 18 and December 18 a listing of Noteholders dated within 13 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 Noteholders.
SECTION 2.06 Transfer and Exchange. Subject to Section 2.12 hereof,
---------------------
(a) upon surrender for registration of transfer of any Note, together with a
written instrument of transfer satisfactory to the Registrar duly executed by
the Noteholder or such Noteholder's attorney duly authorized in writing, at the
office or agency of the company designated as Registrar or co-registrar pursuant
to Section 2.03, the Company shall execute, and the Trustee shall authenticate
and deliver, in the name of the designated transferee or transferees, one or
more new Notes of any authorized denomination or denominations, of a like
aggregate principal amount. The Company shall not charge a service charge for
any registration of transfer or exchange, but the Company may require payment of
a sum sufficient to pay all taxes, assessments or other governmental charges
that may be imposed in connection with the transfer or exchange of the Notes
from the Noteholder requesting such transfer or exchange.
At the option of the Holder, Notes may be exchanged for other Notes of
any authorized denomination or denominations, of a like aggregate principal
amount, upon surrender of the Notes to be exchanged, together with a written
instrument of transfer satisfactory to the Registrar duly executed by the
Noteholder or such Noteholder's attorney duly authorized in writing, at such
office or agency. Whenever any Notes are so surrendered for exchange, the
Company shall execute, and the Trustee shall authenticate and deliver, the Notes
which the Holder making the exchange is entitled to receive.
The Company shall not be required to make, and the Registrar need not
register, transfers or exchanges of Notes selected for redemption (except, in
the case of Notes to be redeemed in part, the portion thereof not to be
redeemed) or any Notes in respect of which a Change in Control Repurchase Notice
(as defined in Section 3.10(d)) has been given and not withdrawn by the Holder
thereof in accordance with the terms of this Indenture (except, in the case of
Notes to be purchased in part, the portion thereof not to be purchased) or any
Notes for a period of 15 days before the mailing of a notice of redemption of
Notes to be redeemed.
17
(b) Notwithstanding any provision to the contrary herein, so long as a
Global Note remains outstanding and is held by or on behalf of the Depositary,
transfers of a Global Note, in whole or in part, shall be made only in
accordance with Section 2.12 and this Section 2.06(b). Transfers of a Global
Note shall be limited to transfers of such Global Note in whole, or in part, to
nominees of the Depositary or to a successor of the Depositary or such
successor's nominee.
(c) Successive registrations and registrations of transfers and
exchanges as aforesaid may be made from time to time as desired, and each such
registration shall be noted on the register for the Notes.
(d) Any Registrar appointed pursuant to Section 2.03 hereof shall
provide to the Trustee such information as the Trustee may reasonably require in
connection with the delivery by such Registrar of Notes upon transfer or
exchange of Notes.
(e) No Registrar shall be required to make registrations of transfer
or exchange of Notes during any periods designated in the text of the Notes or
in this Indenture as periods during which such registration of transfers and
exchanges need not be made.
(f) If Notes are issued upon the transfer, exchange or replacement of
Notes subject to restrictions on transfer and bearing the legends set forth on
the form of Note attached hereto as Exhibits A-1 and A-2 setting forth such
restrictions (collectively, the "Legend"), or if a request is made to remove the
Legend on a Note, the Notes so issued shall bear the Legend, or the Legend shall
not be removed, as the case may be, unless there is delivered to the Company and
the Registrar such satisfactory evidence, which shall include an Opinion of
Counsel, as may be reasonably required by the Company and the Registrar, that
neither the Legend nor the restrictions on transfer set forth therein are
required to ensure that transfers thereof comply with the provisions of Rule
144A or Rule 144 or Regulation S under the Securities Act or that such Notes are
not "restricted" within the meaning of Rule 144 under the Securities Act. Upon
(i) provision of such satisfactory evidence, or (ii) notification by the Company
to the Trustee and Registrar of the sale of such Note pursuant to a registration
statement that is effective at the time of such sale, the Trustee, at the
written direction of the Company, shall authenticate and deliver a Note that
does not bear the Legend. If the Legend is removed from the face of a Note and
the Note is subsequently held by an Affiliate of the Company, the Legend shall
be reinstated.
SECTION 2.07 Replacement Notes. If (a) any mutilated Note 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 Note, and there
is delivered to the Company and the Trustee such Note 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 Note 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 Note or in
lieu of any such destroyed, lost or stolen Note, a new Note of like tenor and
principal amount, bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Note has become
or is about to become due and payable, or is about to be purchased by the
Company pursuant to Article 3
18
hereof, the Company in its discretion may, instead of issuing a new Note, pay or
purchase such Note, as the case may be.
Upon the issuance of any new Notes under this Section 2.07, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Note issued pursuant to this Section 2.07 in lieu of any
mutilated, destroyed, lost or stolen Note shall constitute an original
additional contractual obligation of the Company, whether or not the destroyed,
lost or stolen Note 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 Notes 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 Notes.
SECTION 2.08 Outstanding Notes; Determinations of Holders' Action.
----------------------------------------------------
Notes outstanding at any time are all the Notes authenticated by the Trustee
except for those cancelled by it or delivered to it for cancellation, those paid
pursuant to Section 2.07 and those described in this Section 2.08 as not
outstanding. A Note does not cease to be outstanding because the Company or an
Affiliate thereof holds the Note; provided, however, that in determining whether
the Holders of the requisite principal amount of the outstanding Notes have
given or concurred in any request, demand, authorization, direction, notice,
consent or waiver hereunder, Notes owned by the Company or any other obligor
upon the Notes or any Affiliate of the Company or such other obligor 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 Notes which a
Responsible Officer of the Trustee knows to be so owned shall be so disregarded.
Subject to the foregoing, only Notes 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 Note is replaced pursuant to Section 2.07, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note 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 the Change in Control
Repurchase Date, or on Stated Maturity, money or securities, if permitted
hereunder, sufficient to pay Notes payable on that date, then immediately after
such Redemption Date, Change in Control Repurchase Date or Stated Maturity, as
the case may be, such Notes shall cease to be outstanding and interest on such
Notes shall cease to accrue; provided that, if such Notes 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.
19
If a Note is converted in accordance with Article 10, then from and
after the time of conversion on the conversion date, such Note shall cease to be
outstanding and interest shall cease to accrue on such Note.
SECTION 2.09 Temporary Notes. Pending the preparation of definitive
---------------
Notes, the Company may execute, and upon Company Order the Trustee shall
authenticate and deliver, temporary Notes which are printed, lithographed,
typewritten, mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Notes in lieu of which they are
issued and with such appropriate insertions, omissions, substitutions and other
variations as the officers executing such Notes may determine, as conclusively
evidenced by their execution of such Notes.
If temporary Notes are issued, the Company will cause definitive Notes
to be prepared without unreasonable delay. After the preparation of definitive
Notes, the temporary Notes shall be exchangeable for definitive Notes upon
surrender of the temporary Notes 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 Notes the
Company shall execute and the Trustee shall authenticate and deliver in exchange
therefor a like principal amount of definitive Notes of authorized
denominations. Until so exchanged the temporary Notes shall in all respects be
entitled to the same benefits under this Indenture as definitive Notes.
SECTION 2.10 Cancellation. All Notes surrendered for payment, purchase
------------
by the Company pursuant to Article 3, conversion, redemption or registration of
transfer or exchange shall, if surrendered to any person other than the Trustee,
be delivered to the Trustee and shall be promptly cancelled by it. The Company
may at any time deliver to the Trustee for cancellation any Notes previously
authenticated and delivered hereunder which the Company may have acquired in any
manner whatsoever, and all Notes so delivered shall be promptly cancelled by the
Trustee. The Company may not issue new Notes to replace Notes it has paid or
delivered to the Trustee for cancellation or that any Holder has converted
pursuant to Article 10. No Notes shall be authenticated in lieu of or in
exchange for any Notes cancelled as provided in this Section 2.10, except as
expressly permitted by this Indenture. All cancelled Notes held by the Trustee
shall be destroyed by the Trustee and the Trustee shall deliver a certificate of
destruction to the Company.
SECTION 2.11 Persons Deemed Owners. Prior to due presentment of a Note
---------------------
for registration of transfer, the Company, the Trustee and any agent of the
Company or the Trustee may treat the Person in whose name such Note is
registered as the owner of such Note for the purpose of receiving payment of
principal of the Note or the payment of any Redemption Price or Change in
Control Repurchase Price in respect thereof, and interest thereon, for the
purpose of conversion and for all other purposes whatsoever, whether or not such
Note be overdue, and neither the Company, the Trustee nor any agent of the
Company or the Trustee shall be affected by notice to the contrary.
SECTION 2.12 Global Notes. (a) Notwithstanding any other provisions of
------------
this Indenture or the Notes, (A) transfers of a Global Note, in whole or in
part, shall be made only in accordance with Section 2.06 and Section 2.12(a)(i),
(B) transfer of a beneficial interest
20
in a Global Note for a Certificated Note shall comply with Section 2.06 and
Section 2.12(a)(ii) below, and (C) transfers of a Certificated Note shall comply
with Section 2.06 and Section 2.12(a)(iii) and (iv) below.
(i) Transfer of Global Note. A Global Note may not be transferred, in
whole or in part, to any Person other than the Depositary or a nominee or
any successor thereof, and no such transfer to any such other Person may be
registered; provided that this clause (i) shall not prohibit any transfer
of a Note that is issued in exchange for a Global Note but is not itself a
Global Note. No transfer of a Note to any Person shall be effective under
this Indenture or the Notes unless and until such Note has been registered
in the name of such Person. Nothing in this Section 2.12(a)(i) shall
prohibit or render ineffective any transfer of a beneficial interest in a
Global Note effected in accordance with the other provisions of this
Section 2.12(a).
(ii) Restrictions on Transfer of a Beneficial Interest in a Global
Note for a Certificated Note. A beneficial interest in a Global Note may
not be exchanged for a Certificated Note except upon satisfaction of the
requirements set forth below. Upon receipt by the Trustee of a transfer of
a beneficial interest in a Global Note in accordance with Applicable
Procedures for a Certificated Note in the form satisfactory to the Trustee,
together with:
(a) so long as the Notes are Restricted Notes, certification, in
the form set forth in Exhibit B-1, and, if requested by the Company or
the Registrar, certification in the form set forth in Exhibit B-2 or
Exhibit B-3, that such beneficial interest in the Global Note is being
transferred to an Institutional Accredited Investor or a non-"U.S.
person" within the meaning of Regulation S;
(b) written instructions to the Trustee to make, or direct the
Registrar to make, an adjustment on its books and records with respect
to such Global Note to reflect a decrease in the aggregate principal
amount of the Notes represented by the Global Note, such instructions
to contain information regarding the Depositary account to be credited
with such decrease; and
(c) if the Company or Registrar so requests, an opinion of
counsel or other evidence reasonably satisfactory to them as to the
compliance with the restrictions set forth in the Legend,
then the Trustee shall cause, or direct the Registrar to cause, in
accordance with the standing instructions and procedures existing between
the Depositary and the Registrar, the aggregate principal amount of Notes
represented by the Global Note to be decreased by the aggregate principal
amount of the Certificated Note to be issued, shall issue such Certificated
Note and shall debit or cause to be debited to the account of the Person
specified in such instructions a beneficial interest in the Global Note
equal to the principal amount of the Certificated Note so issued.
(iii) Transfer and Exchange of Certificated Notes. When Certificated
Notes are presented to the Registrar with a request:
21
(x) to register the transfer of such Certificated Notes; or
(y) to exchange such Certificated Notes for an equal principal
amount of Certificated Notes of other authorized denominations,
the Registrar shall register the transfer or make the exchange as requested
if its reasonable requirements for such transaction are met; provided,
however, that the Certificated Notes surrendered for transfer or exchange:
(a) shall be duly endorsed or accompanied by a written instrument
of transfer in form reasonably satisfactory to the Company and the
Registrar, duly executed by the Holder thereof or his attorney duly
authorized in writing; and
(b) so long as such Notes are Restricted Notes, such Notes are
being transferred or exchanged pursuant to an effective registration
statement under the Securities Act or pursuant to clause (A), (B) or
(C) below, and are accompanied by the following additional information
and documents, as applicable:
(A) if such Certificated Notes are being delivered to the
Registrar by a Holder for registration in the name of such
Holder, without transfer, a certification from such Holder to
that effect; or
(B) if such Certificated Notes are being transferred to the
Company, a certification to that effect; or
(C) if such Certificated Notes are being transferred
pursuant to an exemption from registration, (i) a certification
to that effect (in the form set forth in Exhibits B-1, and B-2 or
B-3, if applicable) and (ii) if the Company or Registrar so
requests, an opinion of counsel or other evidence reasonably
satisfactory to them as to the compliance with the restrictions
set forth in the Legend.
(iv) Restrictions on Transfer of a Certificated Note for a Beneficial
Interest in a Global Note. A Certificated Note may not be exchanged for a
beneficial interest in a Global Note except upon satisfaction of the
requirements set forth below.
Upon receipt by the Trustee of a Certificated Note, duly endorsed or
accompanied by appropriate instruments of transfer, in form satisfactory to
the Trustee, together with:
(a) so long as the Notes are Restricted Notes, certification, in
the form set forth in Exhibit B-1, that such Certificated Note is
being transferred to a Qualified Institutional Buyer in accordance
with Rule 144A or pursuant to an offshore transaction in accordance
with Rule 904 of Regulation S; and
(b) written instructions directing the Trustee to make, or to
direct the Registrar to make, an adjustment on its books and records
with respect to such Global Note to reflect an increase in the
aggregate principal amount of the Notes represented by the Global
Note, such instructions to contain information
22
regarding the Depositary account to be credited with such increase,
then the Trustee shall cancel such Certificated Note and cause, or
direct the Registrar to cause, in accordance with the standing
instructions and procedures existing between the Depositary and the
Registrar, the aggregate principal amount of Notes represented by the
Global Note to be increased by the aggregate principal amount of the
Certificated Note to be exchanged, and shall credit or cause to be
credited to the account of the Person specified in such instructions a
beneficial interest in the Global Note equal to the principal amount
of the Certificated Note so cancelled. If no Global Notes are then
outstanding, the Company shall issue and the Trustee shall
authenticate, upon written order of the Company in the form of an
Officers' Certificate, a new Global Note in the appropriate principal
amount.
(c) Subject to the succeeding paragraph, every Note shall be subject
to the restrictions on transfer provided in the Legend including the delivery of
an opinion of counsel, if so provided. Whenever any Restricted Note is presented
or surrendered for registration of transfer or for exchange for a Note
registered in a name other than that of the Holder, such Note must be
accompanied by a certificate in substantially the form set forth in Exhibit B-1,
dated the date of such surrender and signed by the Holder of such Note, as to
compliance with such restrictions on transfer. The Registrar shall not be
required to accept for such registration of transfer or exchange any Note not so
accompanied by a properly completed certificate.
(d) The restrictions imposed by the Legend upon the transferability
of any Note shall cease and terminate when such Note has been sold pursuant to
an effective registration statement under the Securities Act or transferred in
compliance with Rule 144 under the Securities Act (or any successor provision
thereto) or, if earlier, upon the expiration of the holding period applicable to
sales thereof under Rule 144(k) under the Securities Act (or any successor
provision). Any Note as to which such restrictions on transfer shall have
expired in accordance with their terms or shall have terminated may, upon a
surrender of such Note for exchange to the Registrar in accordance with the
provisions of this Section 2.12 (accompanied, in the event that such
restrictions on transfer have terminated by reason of a transfer in compliance
with Rule 144 or any successor provision, by an opinion of counsel having
substantial experience in practice under the Securities Act and otherwise
reasonably acceptable to the Company, addressed to the Company and in form
acceptable to the Company, to the effect that the transfer of such Note has been
made in compliance with Rule 144 or such successor provision), be exchanged for
a new Note, of like tenor and aggregate principal amount, which shall not bear
the restrictive Legend. The Company shall inform the Trustee of the effective
date of any registration statement registering the Notes under the Securities
Act. The Trustee shall not be liable for any action taken or omitted to be taken
by it in good faith in accordance with the aforementioned opinion of counsel or
registration statement.
(e) As used in the preceding two paragraphs of this Section 2.12, the
term "transfer" encompasses any sale, pledge, transfer, hypothecation or other
disposition of any Note.
(f) The provisions of clauses (1), (2), (3) and (4) below shall apply
only to Global Notes:
23
(1) Notwithstanding any other provisions of this Indenture or the
Notes, except as provided in Section 2.12(a)(ii), a Global Note shall not
be exchanged in whole or in part for a Note registered in the name of any
Person other than the Depositary or one or more nominees thereof, provided
that a Global Note may be exchanged for Notes registered in the names of
any person designated by the Depositary in the event that (i) the
Depositary has notified the Company that it is unwilling or unable to
continue as Depositary for such Global Note or such Depositary has ceased
to be a "clearing agency" registered under the Exchange Act, and a
successor Depositary is not appointed by the Company within 90 days or (ii)
an Event of Default has occurred and is continuing with respect to the
Notes. Any Global Note exchanged pursuant to clause (i) above shall be so
exchanged in whole and not in part, and any Global Note exchanged pursuant
to clause (ii) above may be exchanged in whole or from time to time in part
as directed by the Depositary. Any Note issued in exchange for a Global
Note or any portion thereof shall be a Global Note; provided that any such
Note so issued that is registered in the name of a Person other than the
Depositary or a nominee thereof shall not be a Global Note. In the event
that Notes in certificated form are issued in respect of beneficial
interests in a Regulation S Global Note at any time prior to one-year after
the Issue Date of this Indenture (other than in a transaction subject to
Rule 144A), the Company shall as promptly as practicable, institute
procedures, including appropriate certifications, reasonably designed to
ensure that any transfer of such certificated Notes prior to the end of
such one-year period is made only in accordance with the provisions of
Regulation S, pursuant to registration under the Securities Act or pursuant
to an exemption from such registration.
(2) Notes issued in exchange for a Global Note or any portion thereof
shall be issued in definitive, fully registered form, without interest
coupons, shall have an aggregate principal amount equal to that of such
Global Note or portion thereof to be so exchanged, shall be registered in
such names and be in such authorized denominations as the Depositary shall
designate and shall bear the applicable legends provided for herein. Any
Global Note to be exchanged in whole shall be surrendered by the Depositary
to the Trustee, as Registrar. With regard to any Global Note to be
exchanged in part, either such Global Note shall be so surrendered for
exchange or, if the Trustee is acting as custodian for the Depositary or
its nominee with respect to such Global Note, the principal amount thereof
shall be reduced, by an amount equal to the portion thereof to be so
exchanged, by means of an appropriate adjustment made on the records of the
Trustee. Upon any such surrender or adjustment, the Trustee shall
authenticate and deliver the Note issuable on such exchange to or upon the
order of the Depositary or an authorized representative thereof.
(3) Subject to the provisions of clause (5) below, the registered
Holder may grant proxies and otherwise authorize any Person, including
Agent Members (as defined below) and persons that may hold interests
through Agent Members, to take any action which a holder is entitled to
take under this Indenture or the Notes.
(4) In the event of the occurrence of any of the events specified in
clause (1) above, the Company will promptly make available to the Trustee a
reasonable supply of Certificated Notes in definitive, fully registered
form, without interest coupons.
24
(5) Neither any members of, or participants in, the Depositary
(collectively, the "Agent Members") nor any other Persons on whose behalf
Agent Members may act shall have any rights under this Indenture with
respect to any Global Note registered in the name of the Depositary or any
nominee thereof, or under any such Global Note, and the Depositary or such
nominee, as the case may be, may be treated by the Company, the Trustee and
any agent of the Company or the Trustee as the absolute owner and holder of
such Global Note for all purposes whatsoever. Notwithstanding the
foregoing, nothing herein shall prevent the Company, the Trustee or any
agent of the Company or the Trustee from giving effect to any written
certification, proxy or other authorization furnished by the Depositary or
such nominee, as the case may be, or impair, as between the Depositary, its
Agent Members and any other person on whose behalf an Agent Member may act,
the operation of customary practices of such Persons governing the exercise
of the rights of a holder of any Note.
SECTION 2.13 CUSIP and ISIN Numbers. The Company in issuing the Notes
----------------------
may use "CUSIP" and "ISIN" numbers (if then generally in use), and, if so, the
Trustee shall use "CUSIP" and "ISIN" numbers in notices of redemption as a
convenience to Holders; provided that any such notice may state that no
representation is made as to the correctness of such numbers either as printed
on the Notes or as contained in any notice of a redemption and that reliance may
be placed only on the other identification numbers printed on the Notes, and any
such redemption shall not be affected by any defect in or omission of such
numbers. The Company will promptly notify the Trustee of any change in the CUSIP
or "ISIN" numbers.
SECTION 2.14 Defaulted Interest. If the Company defaults in a payment
------------------
of interest on the Notes, it shall pay, or shall deposit with the Paying Agent
money in immediately available funds sufficient to pay, the defaulted interest,
plus (to the extent lawful) any interest payable on the defaulted interest, to
the Persons who are Holders on a subsequent special record date. A special
record date, as used in this Section 2.14 with respect to the payment of any
defaulted interest, shall mean the 15th day next preceding the date fixed by the
Company for the payment of defaulted interest, whether or not such day is a
Business Day. At least 15 days before the subsequent special record date, the
Company shall mail to each Holder and to the Trustee a notice that states the
subsequent special record date, the payment date and the amount of defaulted
interest to be paid.
ARTICLE 3
REDEMPTION AND PURCHASES
SECTION 3.01 Provisional Redemption.
-----------------------
Any time prior to June 20, 2004, the Company may, at its option,
redeem the Notes in whole or in part on any date from time to time, upon notice
as set forth in Section 3.05, at a redemption price equal to $1,000 per $1,000
principal amount of the Notes redeemed plus accrued and unpaid interest, if any
(such amount, together with the Make-Whole Payment described below, the
"Provisional Redemption Price"), to but excluding the date of redemption (the
"Provisional Redemption Date") if (i) the Closing Price of the Common Stock has
exceeded 150% of the Conversion Price (as defined in Article 10 and as such may
be adjusted from time to
25
time) then in effect for at least 20 Trading Days in any consecutive 30-Trading
Day period ending on the Trading Day prior to the date of mailing of the
provisional notice of redemption pursuant to Section 3.05 (the "Notice Date")
and (ii) a registration statement covering resales of the Notes and the Common
Stock issuable upon conversion thereof is effective and available for use and is
expected to remain effective for the 30 days following the Provisional
Redemption Date (such redemption, a "Provisional Redemption").
Upon any such Provisional Redemption, the Company shall make an
additional payment (the "Make-Whole Payment") in cash with respect to the Notes
called for redemption to Holders on the Notice Date in an amount equal to
$166.67 per $1,000 principal amount of the Notes less the amount of any interest
actually paid on such Notes prior to the Provisional Redemption Date. The
Company shall make the Make-Whole Payment on all Notes called for Provisional
Redemption, including those Notes converted into Common Stock between the Notice
Date and the Provisional Redemption Date.
SECTION 3.02 Optional Redemption.
--------------------
Except as set forth under Section 3.01, the Notes are not redeemable
prior to June 22, 2004. On and after June 22, 2004, the Company may, at its
option, redeem the Notes in whole at any time or in part from time to time, on
any date prior to maturity, upon notice as set forth in Section 3.05, at the
redemption price (expressed as percentages of the principal amount) set forth
below.
----------------------------------------------------------------------------
During the Twelve Months Commencing Redemption Price
----------------------------------- ----------------
----------------------------------------------------------------------------
June 22, 2004 through June 19, 2005 101.6%
----------------------------------------------------------------------------
Thereafter 100.8%
----------------------------------------------------------------------------
(the "Optional Redemption Price"), plus any interest accrued but not paid prior
to the Optional Redemption Date, if the Closing Price of the Common Stock has
exceeded 130% of the Conversion Price (as defined in Article 10 and as such may
be adjusted from time to time) then in effect for at least 20 Trading Days in
any consecutive 30-Trading Day period ending on the Trading Day prior to the
date of mailing of the notice of optional redemption pursuant to Section 3.05.
SECTION 3.03 Notice of Trustee.
------------------
If the Company elects to redeem Notes pursuant to the redemption
provisions of Section 3.01 or Section 3.02 hereof, it shall notify the Trustee
at least 20 days or 30 days, respectively, prior but not more than 60 days prior
to the Redemption Date of such intended Redemption Date, the principal amount of
Notes to be redeemed and the CUSIP numbers of the Notes to be redeemed.
26
SECTION 3.04 Selection of Notes to be Redeemed.
----------------------------------
If fewer than all the Notes are to be redeemed, the Trustee shall
select the particular Notes to be redeemed from the Outstanding Notes by a
method that complies with the requirements of any exchange on which the Notes
are listed, or, if the Notes are not listed on an exchange, on a pro rata basis
or by lot or in accordance with any other method of Trustee considers fair and
appropriate. Notes and portions thereof that the Trustee selects shall be in
principal amounts equal to $1,000 or any whole multiple thereof.
If any Note selected for partial redemption is converted in part
before termination of the conversion right with respect to the portion of the
Note so selected, the converted portion of such Note shall be deemed to be the
portion selected for redemption (provided, however, that the Holder of such Note
so converted and deemed redeemed shall not be entitled to any additional
interest payment as a result of such deemed redemption than such Holder would
have otherwise been entitled to receive upon conversion of such Note). Notes
which have been converted during a selection of Notes to be redeemed may be
treated by the Trustee as Outstanding for the purpose of such selection.
The Trustee shall promptly notify the Company and the Registrar in
writing of the Notes selected for redemption and, in the case of any Notes
selected for partial redemption, the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Notes shall relate, in
the case of any Notes redeemed or to be redeemed only in part, to the portion of
the principal amount of such Notes which has been or is to be redeemed.
SECTION 3.05 Notice of Redemption. Notice of redemption shall be given
--------------------
in the manner provided in Section 12.02 hereof to the Holders of Notes to be
redeemed. Such notice shall be given not less than 20 nor more than 60 days
prior to the Redemption Date for redemption pursuant to Section 3.01, and not
less than 30 nor more than 60 days prior to the Redemption Date for redemption
pursuant to Section 3.02.
All notices of redemption shall state:
(1) the Redemption Date;
(2) the Redemption Price and interest accrued and unpaid to the
Redemption Date, if any, and, with respect to Notes called for Provisional
Redemption, the Make-Whole Payment;
(3) if fewer than all the outstanding Notes are to be redeemed, the
aggregate principal amount of Notes to be redeemed and the aggregate
principal amount of Notes which will be outstanding after such partial
redemption;
(4) that on the Redemption Date the Redemption Price and interest
accrued and unpaid to the Redemption Date, if any, and, with respect to
Notes called for Provisional Redemption, the Make-Whole Payment, will
become due and payable upon each such
27
Note to be redeemed, and that interest thereon shall cease to accrue on and
after such date;
(5) the Conversion Price, the date on which the right to convert the
principal of the Notes to be redeemed will terminate and the places where
such Notes may be surrendered for conversion;
(6) the place or places where such Notes are to be surrendered for
payment of the Redemption Price and accrued and unpaid interest, if any;
and
(7) the CUSIP or ISIN number of the Notes.
The notice given shall specify the last date on which exchanges or
transfers of Notes may be made pursuant to Section 2.06 hereof, and shall
specify the serial numbers of Notes and the portions thereof called for
redemption.
Notice of redemption of Notes to be redeemed at the election of the
Company shall be given by the Company.
SECTION 3.06 Effect of Notice of Redemption.
-------------------------------
Notice of redemption having been given as provided in Section 3.05
hereof, the Notes so to be redeemed shall, on the Redemption Date, become due
and payable at the Redemption Price therein specified and from and after such
date (unless the Company shall default in the payment of the Redemption Price
and accrued and unpaid interest) such Notes shall cease to bear interest. Upon
surrender of any such Note for redemption in accordance with such notice, such
Note shall be paid by the Company at the Redemption Price plus accrued and
unpaid interest, if any; provided, however, that the installments of interest on
Notes whose Stated Maturity is prior to or on the Redemption Date shall be
payable to the Holders of such Notes, or one or more Predecessor Notes,
registered as such on the relevant Record Date according to their terms and the
provisions of Section 2.01 hereof and, with respect to a Provisional Redemption,
the Holder on the Notice Date of any Note converted into Common Stock between
the Notice Date and the Provisional Redemption Date shall have the right to
receive the Make-Whole Payment regardless of the conversion of such Note.
If any Note called for redemption shall not be so paid upon surrender
thereof for redemption, the principal and premium, if any, shall, until paid,
bear interest from the Redemption Date at the Interest Rate.
SECTION 3.07 Deposit of Redemption Price.
----------------------------
Prior to or on any Redemption Date, the Company shall deposit with the
Trustee or with a Paying Agent an amount of money sufficient to pay the
Redemption Price of all the Notes to be redeemed on that Redemption Date
(including, with respect to a Provisional Redemption, Make-Whole Payments due on
the Provisional Redemption Date with respect to the Notes), other than any Notes
called for redemption on that date which have been converted prior to the date
of such deposit (except with respect to a Provisional Redemption as provided in
Sections 3.01 and 3.06 hereof), and accrued and unpaid interest, if any, on such
Notes.
28
If any Note called for redemption is converted, any money deposited
with the Trustee or with a Paying Agent or so segregated and held in trust for
the redemption of such Note shall (subject to any right of the Holder of such
Note or any Predecessor Note to receive interest as provided in Section 4.01
hereof or Make-Whole Payments as provided in Section 3.01) be paid to the
Company on Company Request or, if then held by the Company, shall be discharged
from such trust.
SECTION 3.08 Notes Redeemed in Part.
-----------------------
Any Note which is to be redeemed only in part shall be surrendered at
an office or agency of the Company designated for that purpose pursuant to
Section 4.05 hereof (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 the Holder's
attorney duly authorized in writing), and the Company shall execute, and the
Trustee shall authenticate and deliver to the Holder of such Note without
service charge, a new Note or Notes of any authorized denomination as requested
by such Holder in aggregate principal amount equal to and in exchange for the
unredeemed portion of the principal of the Note so surrendered.
SECTION 3.09 Conversion Arrangement on Call for Redemption. In
---------------------------------------------
connection with any redemption of Notes, the Company may arrange for the
purchase and conversion of any Notes called for redemption by an agreement with
one or more investment banks or other purchasers to purchase such Notes by
paying to the Trustee in trust for the Noteholders, on or prior to 10:00 a.m.
New York City time on the Redemption Date, an amount that, together with any
amounts deposited with the Trustee by the Company for the redemption of such
Notes, is not less than the Redemption Price of such Notes. Notwithstanding
anything to the contrary contained in this Article 3, the obligation of the
Company to pay the Redemption Price of such Notes 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 Notes not duly surrendered
for conversion by the Holders thereof may, at the option of the Company, be
deemed, to the fullest extent permitted by law, acquired by such purchasers from
such Holders and (notwithstanding anything to the contrary contained in Article
10) surrendered by such purchasers for conversion, all as of immediately prior
to the close of business on the Redemption Date, subject to payment of the above
amount as aforesaid. The Trustee shall hold and pay to the Holders whose Notes
are selected for redemption any such amount paid to it for purchase and
conversion in the same manner as it would moneys deposited with it by the
Company for the redemption of Notes. Without the Trustee's prior written
consent, no arrangement between the Company and such purchasers for the purchase
and conversion of any Notes shall increase or otherwise affect any of the
powers, duties, responsibilities or obligations of the Trustee as set forth in
this Indenture, and the Company agrees to indemnify the Trustee 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
Notes between the Company and such purchasers, including the costs and expenses
incurred by the Trustee 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.
29
SECTION 3.10 Repurchase of Notes at Option of the Holder upon Change
-------------------------------------------------------
in Control. (a) If there shall have occurred a Change in Control, all or any
----------
portion of the Notes of any Holder equal to $1,000 or a whole multiple of
$1,000, not previously called for redemption, shall be repurchased by the
Company, at the option of such Holder, at a repurchase price equal to 100% of
the principal amount of the Notes to be repurchased, together with interest
accrued and unpaid to, but excluding, the repurchase date (the "Change in
Control Repurchase Price"), on the date (the "Change in Control Repurchase
Date") that is 45 Business Days after the Change in Control Repurchase Notice;
provided, however, that installments of interest on Notes whose Stated Maturity
is prior to or on the Change in Control Repurchase Date shall be payable to the
Holders of such Notes, or one or more predecessor Notes, registered as such on
the relevant Regular Record Date according to their terms.
Subject to the fulfillment by the Company of the conditions set forth
in Section 3.10(b) hereof, the Company may elect to pay the Change in Control
Repurchase Price by delivering the number of shares of Common Stock equal to (i)
the Change in Control Repurchase Price divided by (ii) 95% of the average of the
Closing Prices per share of Common Stock for the five consecutive Trading Days
immediately preceding and including the third Trading Day prior to the Change in
Control Repurchase Date.
Whenever in this Indenture (including Sections 2.01, 6.01(a) and 6.07
hereof) or Exhibit A-1 annexed hereto there is a reference, in any context, to
the principal of any Note as of any time, such reference shall be deemed to
include reference to the Change in Control Repurchase Price payable in respect
to such Note to the extent that such Change in Control Repurchase Price is, was
or would be so payable at such time, and express mention of the Change in
Control Repurchase Price in any provision of this Indenture shall not be
construed as excluding the Change in Control Repurchase Price in those
provisions of this Indenture when such express mention is not made; provided,
however, that, for the purposes of Article 11 hereof, such reference shall be
deemed to include reference to the Change in Control Repurchase Price only to
the extent the Change in Control Repurchase Price is payable in cash.
A "Change in Control" of the Company shall be deemed to have occurred
at such time as either of the following events shall occur:
(i) the acquisition by any person, including any syndicate or group
deemed to be a "person" under Section 13(d)(3) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), of beneficial ownership,
directly or indirectly, through a purchase, merger or other acquisition
transaction or series of transactions of shares of the Capital Stock of the
Company entitling that person to exercise 50% or more of the total voting
power of all shares of such Capital Stock entitled to vote generally in
elections of directors, other than any acquisition by the Company, any of
its subsidiaries or any of the employee benefit plans; or
(ii) any consolidation or merger of the Company with or into any other
person, any merger of another person into the Company, or any conveyance,
transfer, sale, lease or other disposition of all or substantially all of
the Company's properties and assets to another person, other than:
30
(A) any transaction (1) that does not result in any
reclassification, conversion, exchange or cancellation of outstanding
shares of the Company's capital stock and (2) pursuant to which
holders of the Capital Stock immediately prior to the transaction have
the entitlement to exercise, directly or indirectly, 50% or more of
the total voting power of all shares of the Capital Stock entitled to
vote generally in the election of directors of the continuing or
surviving person immediately after the transaction; or
(B) any merger solely for the purpose of changing the Company's
jurisdiction of incorporation and resulting in a reclassification,
conversion or exchange of outstanding shares of Common Stock solely
into shares of Common Stock of the surviving entity;
(iii) during any consecutive two-year period, individuals who at the
beginning of that two-year period constituted the board of directors of the
Company (together with any new directors whose election to the board of
directors of the Company, or whose nomination for election by the
stockholders of the Company, was approved by a vote of a majority of the
directors then still in office who were either directors at the beginning
of such period or whose elections or nominations for election were
previously so approved) cease for any reason to constitute a majority of
the board of directors of the Company then in office; or
(iv) the Company is liquidated or dissolved or a resolution is passed
by the Company's stockholders approving a plan of liquidation or
dissolution of the Company other than in a transaction which complies with
the provisions described in Article 5 of the Indenture.
Beneficial ownership shall be determined in accordance with Rule 13d-3
promulgated by the SEC under the Exchange Act. The term "person" shall include
any syndicate or group which would be deemed to be a "person" under Section
13(d)(3) of the Exchange Act.
(b) The following are conditions to the Company's election to pay for
the Change in Control Repurchase Price in Common Stock:
(i) The shares of Common Stock to be issued upon repurchase of Notes
hereunder:
(A) shall not require registration under any federal securities
law before such shares may be freely transferable without being
subject to any transfer restrictions under the Securities Act upon
repurchase or, if such registration is required, such registration
shall be completed and shall become effective prior to the Change in
Control Repurchase Date; and
(B) shall not require registration with, or approval of, any
governmental authority under any state law or any other federal law
before shares may be validly issued or delivered upon repurchase or if
such registration is required or such approval must be obtained, such
registration shall be completed or such approval shall be obtained
prior to the Change in Control Repurchase Date.
31
(ii) The shares of Common Stock to be listed upon repurchase of
Notes hereunder are, or shall have been, approved for listing on the Nasdaq
National Market or the New York Stock Exchange or listed on another
national securities exchange, in any case, prior to the Change in Control
Repurchase Date.
(iii) All shares of Common Stock which may be issued upon repurchase
of Notes will be issued out of the Company's authorized but unissued Common
Stock and will, upon issue, be duly and validly issued and fully paid and
nonassessable and free of any preemptive or similar rights.
(iv) If any of the conditions set forth in clauses (i) through (iii)
of this Section 3.08(b) are not satisfied in accordance with the terms
thereof, the Change in Control Repurchase Price shall be paid by the
Company only in cash.
(c) Unless the Company shall have theretofore called for redemption
all of the outstanding Notes, prior to or on the 30th day after the occurrence
of a Change in Control, the Company, or, at the written request and expense of
the Company prior to or on the 30th day after such occurrence, the Trustee,
shall give to all Noteholders, in the manner provided in Section 12.02 hereof,
notice of the occurrence of the Change in Control and of the repurchase right
set forth herein arising as a result thereof. The Company shall also deliver a
copy of such notice of a repurchase right to the Trustee. The notice shall
include a form of Change in Control Repurchase Notice (as defined in Section
3.10(d)) to be completed by the Noteholder and shall state:
(1) briefly, the events causing a Change in Control and the date of
such Change in Control;
(2) the date by which the Change in Control Repurchase Notice pursuant
to this Section 3.10 must be given;
(3) the Change in Control Repurchase Date;
(4) the Change in Control Repurchase Price;
(5) the name and address of the Paying Agent and the Conversion Agent;
(6) the Conversion Price and any adjustments thereto;
(7) that Notes as to which a Change in Control Repurchase Notice has
been given may be converted pursuant to Article 10 hereof only if the
Change in Control Repurchase Notice has been withdrawn in accordance with
the terms of this Indenture;
(8) that Notes must be surrendered to the Paying Agent to collect
payment;
(9) that the Change in Control Repurchase Price for any Note as to
which a Change in Control Repurchase Notice has been duly given and not
withdrawn will be paid promptly following the later of the Change in
Control Repurchase Date and the time of surrender of such Note as described
in (8) above;
32
(10) briefly, the procedures the Holder must follow to exercise rights
under this Section 3.08;
(11) briefly, the conversion rights of the Notes;
(12) the procedures for withdrawing a Change in Control Repurchase
Notice;
(13) that, unless the Company defaults in making payment of such
Redemption Price, interest on Notes called for redemption will cease to
accrue on and after the Redemption Date; and
(14) the CUSIP or ISIN number of the Notes.
(d) A Holder may exercise its rights specified in Section 3.10(a)
hereof upon delivery of a written notice of purchase (a "Change in Control
Repurchase Notice") to the Paying Agent at any time prior to the close of
business on the Change in Control Repurchase Date, stating:
(1) the certificate number of the Note which the Holder will deliver
to be purchased;
(2) the portion of the principal amount of the Note which the Holder
will deliver to be purchased, which portion must be $1,000 or an integral
multiple thereof; and
(3) that such Note shall be purchased pursuant to the terms and
conditions specified in paragraph 6 of the Notes.
The delivery of such Note to the Paying Agent prior to, on or after
the Change in Control Repurchase Date (together with all necessary endorsements)
at the offices of the Paying Agent shall be a condition to the receipt by the
Holder of the Change in Control Repurchase Price therefor; provided, however,
that such Change in Control Repurchase Price shall be so paid pursuant to this
Section 3.10 only if the Note so delivered to the Paying Agent shall conform in
all respects to the description thereof set forth in the related Change in
Control Repurchase Notice.
The Company shall purchase from the Holder thereof, pursuant to this
Section 3.10, a portion of a Note if the principal amount of such portion is
$1,000 or an integral multiple of $1,000. Provisions of this Indenture that
apply to the purchase of all of a Note also apply to the purchase of such
portion of such Note.
Any purchase by the Company contemplated pursuant to the provisions of
this Section 3.10 shall be consummated by the delivery of the consideration to
be received by the Holder promptly following the later of the Change in Control
Repurchase Date and the time of delivery of the Note to the Paying Agent in
accordance with this Section 3.10.
Notwithstanding anything herein to the contrary, any Holder delivering
to the Paying Agent the Change in Control Repurchase Notice contemplated by this
Section 3.10(d) shall have the right to withdraw such Change in Control
Repurchase Notice at any time prior to
33
the close of business on the Change in Control Repurchase Date by delivery of a
written notice of withdrawal to the Paying Agent in accordance with Section
3.11.
The Paying Agent shall promptly notify the Company of the receipt by
it of any Change in Control Repurchase Notice or written withdrawal thereof.
SECTION 3.11 Effect of Change in Control Repurchase Notice. Upon
---------------------------------------------
receipt by the Paying Agent of the Change in Control Repurchase Notice specified
in Section 3.10(d), the Holder of the Note in respect of which such Change in
Control Repurchase Notice was given shall (unless such Change in Control
Repurchase Notice is withdrawn as specified in the following two paragraphs)
thereafter be entitled to receive solely the Change in Control Repurchase Price
with respect to such Note. Such Change in Control Repurchase Price shall be paid
to such Holder, subject to receipts of funds and/or Notes by the Paying Agent,
promptly following the later of (x) the Change in Control Repurchase Date with
respect to such Note (provided the conditions in Section 3.10(d) have been
satisfied) and (y) the time of delivery of such Note to the Paying Agent by the
Holder thereof in the manner required by Section 3.10(d). Notes in respect of
which a Change in Control Repurchase Notice, has been given by the Holder
thereof may not be converted pursuant to Article 10 hereof on or after the date
of the delivery of such Change in Control Repurchase Notice unless such Change
in Control Repurchase Notice has first been validly withdrawn as specified in
the following two paragraphs.
A Change in Control Repurchase Notice may be withdrawn by means of a
written notice of withdrawal delivered to the office of the Paying Agent in
accordance with the Change in Control Repurchase Notice at any time prior to the
close of business on the Change in Control Repurchase Date specifying:
(1) the certificate number of the Note in respect of which such notice
of withdrawal is being submitted,
(2) the principal amount of the Note with respect to which such notice
of withdrawal is being submitted, and
(3) the principal amount, if any, of such Note which remains subject
to the original Change in Control Repurchase Notice and which has been or
will be delivered for purchase by the Company.
There shall be no repurchase of any Notes pursuant to Section 3.10 if
there has occurred (prior to, on or after, as the case may be, the giving, by
the Holders of such Notes, of the required Change in Control Repurchase Notice)
and is continuing an Event of Default (other than a default in the payment of
the Change in Control Repurchase Price with respect to such Notes). The Paying
Agent will promptly return to the respective Holders thereof any Notes (x) with
respect to which a Change in Control Repurchase Notice has been withdrawn in
compliance with this Indenture, or (y) held by it during the continuance of an
Event of Default (other than a default in the payment of the Change in Control
Repurchase Price with respect to such Notes) in which case, upon such return,
the Change in Control Repurchase Notice with respect thereto shall be deemed to
have been withdrawn.
34
SECTION 3.12 Deposit of Change in Control Repurchase Price. Prior to
---------------------------------------------
10:00 a.m. (New York City time) on the Business Day following the Change in
Control Repurchase Date the Company shall deposit with the Trustee or with the
Paying Agent (or, if the Company or a Subsidiary or an Affiliate of either of
them is acting as the Paying Agent, shall segregate and hold in trust as
provided in Section 2.04) an amount of money (in immediately available funds if
deposited on such Business Day) or Common Stock, if permitted hereunder,
sufficient to pay the aggregate Change in Control Repurchase Price of all the
Notes or portions thereof which are to be purchased as of the Change in Control
Repurchase Date.
SECTION 3.13 Notes Purchased in Part. Any Note which is to be
-----------------------
purchased only in part shall be surrendered at the office of the Paying Agent
(with, if the Company or the Trustee so requires, due endorsement by, or a
written instrument of transfer in form satisfactory to the Company and the
Trustee duly executed by, the Holder thereof or such Holder's attorney duly
authorized in writing) and the Company shall execute and the Trustee shall
authenticate and deliver to the Holder of such Note, without service charge, a
new Note or Notes, of any authorized denomination as requested by such Holder in
aggregate principal amount equal to, and in exchange for, the portion of the
principal amount of the Note so surrendered which is not purchased.
SECTION 3.14 Covenant to Comply with Securities Laws upon Purchase of
--------------------------------------------------------
Notes. In connection with any offer to purchase or repurchase of Notes under
-----
Section 3.10 hereof (provided that such offer or purchase constitutes an "issuer
tender offer" for purposes of Rule 13e-4 (which term, as used herein, includes
any successor provision thereto) under the Exchange Act at the time of such
offer or purchase), the Company shall (i) comply with Rule 13e-4, Rule 14e-1 and
any other tender offer rules under the Exchange Act which may then be
applicable, (ii) file the related Schedule 13E-3 (or any successor schedule,
form or report) or any other schedule required under the Exchange Act, and (iii)
otherwise comply with all federal and state securities laws so as to permit the
rights and obligations under Section 3.10 to be exercised in the time and in the
manner specified in Section 3.10.
SECTION 3.15 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 12 of the Notes, together with interest or
dividends, if any, thereon, held by them for the payment of the Change in
Control Repurchase Price; provided, however, that to the extent that the
aggregate amount of cash or shares of Common Stock deposited by the Company
pursuant to Section 3.12 exceeds the aggregate Change in Control Repurchase
Price of the Notes or portions thereof which the Company is obligated to
purchase as of the Change in Control Repurchase Date then promptly after the
Business Day following the Change in Control Repurchase Date the Trustee shall
return any such excess to the Company together with interest or dividends, if
any, thereon.
ARTICLE 4
COVENANTS
SECTION 4.01 Payment of Principal, Premium, Interest on the Notes. The
----------------------------------------------------
Company will duly and punctually pay the principal of and premium, if any, and
interest at the
35
Interest Rate in respect of the Notes in accordance with the terms of the Notes
and this Indenture. The Company will deposit or cause to be deposited with the
Trustee as directed by the Trustee, no later than the day of the Stated Maturity
of any Note or installment of interest, all payments so due. Principal amount,
Redemption Price, Change in Control Repurchase Price, and cash interest shall be
considered paid on the applicable date due if on such date (or, in the case of a
Change in Control Repurchase Price on the Business Day following the applicable
Change in Control Repurchase Date) the Trustee or the Paying Agent holds, in
accordance with this Indenture, money or Notes, if permitted hereunder,
sufficient to pay all such amounts then due.
The Company shall, to the extent permitted by law, pay cash interest
on overdue amounts at the rate per annum set forth in paragraph 1 of the Notes,
compounded semiannually, which interest shall accrue from the date such overdue
amount was originally 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.
SECTION 4.02 SEC and Other Reports. 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. If at any time the Company is not
subject to Section 13 or 15(d) of the Exchange Act, such reports shall be
provided at the times the Company would have been required to provide reports
had it continued to have been subject to such reporting requirements. The
Company also shall comply with the other provisions of TIA Section 314(a).
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
(beginning with the fiscal year ending on June 30, 2001) an Officers'
Certificate, stating whether or not to the best 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 they may have knowledge.
SECTION 4.04 Further Instruments and Acts. Upon request of the
----------------------------
Trustee, the 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
-------------------------------
maintain in the Borough of Manhattan, the City of New York, an office or agency
of the Trustee, Registrar, Paying Agent and Conversion Agent where Notes may be
presented or surrendered for payment, where Notes 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 Notes and this
Indenture may be served. The office of American Stock Transfer & Trust Company,
located at 59 Maiden Lane, New York, New York 10038, attention: Corporate Trust
Department, shall initially be such office or agency for all of the aforesaid
purposes. The Company shall give prompt written notice to the Trustee of the
location, and of any change in the location, of any such office or agency (other
than a change in the location of the office of the
36
Trustee). If at any time the Company shall fail to maintain any such required
office or agency or shall fail to furnish the Trustee with the address thereof,
such presentations, surrenders, notices and demands may be made or served at the
address of the Trustee set forth in Section 12.02.
The Company may also from time to time designate one or more other
offices or agencies where the Notes may be presented or surrendered for any or
all such purposes and may from time to time rescind such designations; 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 Delivery of Certain Information. At any time when the
-------------------------------
Company is not subject to Section 13 or 15(d) of the Exchange Act, upon the
request of a holder or any beneficial holder of Notes or shares of Common Stock
issued upon conversion thereof, the Company will promptly furnish or cause to be
furnished Rule 144A Information (as defined below) to such Holder or any
beneficial holder of Notes or holder of shares of Common Stock issued upon
conversion of Notes, or to a prospective purchaser of any such security
designated by any such holder, as the case may be, to the extent required to
permit compliance by such Holder or holder with Rule 144A under the Securities
Act in connection with the resale of any such security. "Rule 144A Information"
shall be such information as is specified pursuant to Rule 144A(d)(4) under the
Securities Act.
ARTICLE 5
SUCCESSOR CORPORATION
SECTION 5.01 When Company May Merge or Transfer Assets. The Company
-----------------------------------------
shall not consolidate with, merge with or into any other person or convey,
transfer or lease its properties and assets substantially as an entirety to any
person, unless:
(a) either (1) the Company shall be the continuing corporation or (2)
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 (i) shall be organized and validly existing under the laws of
the United States or any State thereof or the District of Columbia and (ii)
shall expressly assume, by an indenture supplemental hereto, executed and
delivered to the Trustee, in form satisfactory to the Trustee, all of the
obligations of the Company under the Notes and this Indenture;
(b) at the time of such transaction, no Event of Default and no event
which, after notice or lapse of time, would become an Event of Default,
shall have happened and be continuing; and
(c) 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.
37
For purposes of the foregoing, the transfer (by lease, assignment,
sale or otherwise) of the properties and assets of one or more Subsidiaries
(other than to the Company or another Subsidiary), which, if such assets were
owned by the Company, would constitute all or substantially all of the
properties and assets of the Company, shall be deemed to be the transfer of all
or substantially all of the properties and assets of the Company.
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 and obligations the Company may have under a supplemental
indenture pursuant to Section 10.11, the Company shall be discharged from all
obligations and covenants under this Indenture and the Notes. Subject to
Section 9.06, the Company, the Trustee and the successor person shall enter into
a supplemental indenture to evidence the succession and substitution of such
successor person and such discharge and release of the Company.
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01 Events of Default. An "Event of Default" occurs if:
-----------------
(1) the Company fails to pay when due the principal of or premium, if
any, on any of the Notes at maturity, upon redemption or exercise of a
repurchase right or otherwise, whether or not such payment is prohibited by
Article 11 of this Indenture;
(2) the Company fails to pay an installment of interest (including
liquidated damages, if any) on any of the Notes that continues for 30 days
after the date when due, whether or not such payment is prohibited by
Article 11 of this Indenture;
(3) the Company fails to deliver shares of Common Stock, together with
cash in lieu of fractional shares, when such Common Stock or cash in lieu
of fractional shares is required to be delivered upon conversion of a Note
and such failure continues for 10 days after such delivery date;
(4) the Company fails to perform or observe any other term, covenant
or agreement contained in the Notes or this Indenture for a period of 60
days after receipt by the Company of a Notice of Default (as defined in
this Section 6.01);
(5) (A) one or more defaults in the payment of principal of or
premium, if any, on any of the Company's Indebtedness aggregating $5.0
million or more, when the same becomes due and payable at the scheduled
maturity thereof, and such default or defaults shall have continued after
any applicable grace period and shall not have been cured or waived within
a 30-day period after the date of a Notice of Default or (B) any of the
Company's Indebtedness aggregating $5.0 million or more shall have been
accelerated or otherwise declared due and payable, or required to be
prepaid or repurchased (other than
38
by regularly scheduled required prepayment) prior to the scheduled maturity
thereof and such acceleration is not rescinded or annulled within a 30-day
period after a Notice of Default;
(6) the Company, or any Significant Subsidiary, or any Subsidiaries of
the Company which in the aggregate would constitute a Significant
Subsidiary pursuant to or under or within the meaning of any Bankruptcy
Law:
(A) commences a voluntary case or proceeding;
(B) consents to the entry of an order for relief against it in an
involuntary case or proceeding or the commencement of any case against
it;
(C) consents to the appointment of a Custodian of it or for any
substantial part of its property;
(D) makes a general assignment for the benefit of its creditors;
(E) files a petition in bankruptcy or answer or consent seeking
reorganization or relief; or
(F) consents to the filing of such a petition or the appointment
of or taking possession by a Custodian; and
(7) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(A) is for relief against the Company or any Significant
Subsidiary or any Subsidiaries of the Company which in the aggregate
would constitute a Significant Subsidiary in an involuntary case or
proceeding, or adjudicates the Company or any Significant Subsidiary
or any Subsidiaries of the Company which in the aggregate would
constitute a Significant Subsidiary insolvent or bankrupt;
(B) appoints a Custodian of the Company or any Significant
Subsidiary or any Subsidiaries of the Company which in the aggregate
would constitute a Significant Subsidiary or for any substantial part
of its or their properties; or
(C) orders the winding up or liquidation of the Company or any
Significant Subsidiary or any Subsidiaries of the Company which in the
aggregate would constitute a Significant Subsidiary;
and the order or decree remains unstayed and in effect for 60 days.
"Bankruptcy Law" means Title 11, United States Code, or any
similar federal or state law for the relief of debtors.
39
"Custodian" means any receiver, trustee, assignee, liquidator,
custodian or similar official under any Bankruptcy Law.
A Default under clause (4) or (5) 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 Notes at the time outstanding notify the
Company and the Trustee, of the Default and the Company does not cure such
Default (and such Default is not waived) within the time specified in clause (4)
or (5) above after actual receipt of such notice. Any such notice must specify
the Default, demand that it be remedied and state that such notice is a "Notice
of Default".
The Company will deliver to the Trustee, within five Business Days of
becoming aware of the occurrence of an Event of Default, written notice thereof.
In addition, the Company shall deliver to the Trustee, within 30 days after it
becomes aware of the occurrence thereof, written notice of any event which with
the lapse of time would become an Event of Default under clause (4) or (5)
above, its status and what action the Company is taking or proposes to take with
respect thereto.
SECTION 6.02 Acceleration. If an Event of Default (other than an Event
------------
of Default specified in Section 6.01(6) or (7)) occurs and is continuing, the
Trustee by notice to the Company, or the Holders of at least 25% in aggregate
principal amount of the Notes at the time outstanding by notice to the Company
and the Trustee, may declare the notes due and payable at their principal amount
together with accrued interest. Upon a declaration of acceleration, such
principal and accrued and unpaid interest to the date of payment shall be
immediately due and payable.
If an Event of Default specified in Section 6.01(6) or (7) above
occurs and is continuing, then the principal and the interest on all the Notes
shall become and be immediately due and payable without any declaration or other
act on the part of the Trustee or any Noteholders.
The Holders of a majority in aggregate principal amount of the Notes
at the time outstanding, by notice to the Trustee (and without notice to any
other Noteholder) may rescind or annul 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
principal and any accrued cash interest that have become due solely as a result
of acceleration and if all amounts due to the Trustee under Section 7.06 have
been paid. No such rescission shall affect any subsequent Default or impair any
right consequent thereto.
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 principal, the premium, if any, and any accrued cash interest on the
Notes or to enforce the performance of any provision of the Notes or this
Indenture.
The Trustee may maintain a proceeding even if the Trustee does not
possess any of the Notes or produce any of the Notes in the proceeding. A delay
or omission by the Trustee or any Noteholder in exercising any right or remedy
accruing upon an Event of Default shall not
40
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 Notes at the time outstanding, by notice to
the Trustee (and without notice to any other Noteholder), may waive an existing
Default and its consequences except (1) an Event of Default described in Section
6.01(1) or (2), (2) a Default in respect of a provision that under Section 9.02
cannot be amended without the consent of each Noteholder affected or (3) a
Default which constitutes a failure to convert any Note in accordance with the
terms of Article 10. When a Default is waived, it is deemed cured, but no such
waiver shall extend to any subsequent or other Default or impair any consequent
right. This Section 6.04 shall be in lieu of Section 316(a)1(B) of the TIA and
such Section 316(a)1(B) is hereby expressly excluded from this Indenture, as
permitted by the TIA.
SECTION 6.05 Control by Majority. The Holders of a majority in
-------------------
aggregate principal amount of the Notes 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 conflicts with law
or this Indenture or that the Trustee determines in good faith is unduly
prejudicial to the rights of other Noteholders or would involve the Trustee in
personal liability unless the Trustee is offered indemnity satisfactory to it
against loss, liability or expense. This Section 6.05 shall be in lieu of
Section 316(a)1(A) of the TIA and such Section 316(a)1(A) is hereby expressly
excluded from this Indenture, as permitted by the TIA.
SECTION 6.06 Limitation on Suits. A Noteholder may not pursue any
-------------------
remedy with respect to this Indenture or the Notes unless:
(1) the Holder gives to 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
Notes 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 satisfactory to the Trustee against any loss, liability or
expense;
(4) the Trustee does not comply with the request within 60 days after
receipt of such notice, request and offer of security or indemnity; and
(5) the Holders of a majority in aggregate principal amount of the
Notes at the time outstanding do not give the Trustee a direction
inconsistent with the request during such 60-day period.
A Noteholder may not use this Indenture to prejudice the rights of any
other Noteholder or to obtain a preference or priority over any other
Noteholder.
SECTION 6.07 Rights of Holders to Receive Payment. Notwithstanding any
------------------------------------
other provision of this Indenture, the right of any Holder to receive payment of
the principal
41
amount, premium, if any, plus Redemption Price, Change in Control Repurchase
Price or any accrued cash interest in respect of the Notes held by such Holder,
on or after the respective due dates expressed in the Notes or any Redemption
Date, and to convert the Notes in accordance with Article 10, 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 such Holder.
SECTION 6.08 Collection Suit by Trustee. If an Event of Default
-------------------------
described in Section 6.01(1) or (2) 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 Notes and the amounts
provided for in Section 7.06.
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 Notes or the property of the Company
or of such other obligor or their creditors, the Trustee (irrespective of
whether the principal amount, Redemption Price, Change in Control Repurchase
Price or any accrued cash interest in respect of the Notes shall then be due and
payable as therein expressed or by declaration or otherwise and irrespective of
whether the Trustee shall have made any demand 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, Redemption Price, Change in Control Repurchase Price or any accrued
cash interest 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 or any
other amounts due the Trustee under Section 7.06) 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 7.06.
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 Notes or
the rights of any Holder thereof, or to authorize the Trustee to vote in respect
of the claim of any Holder in any such proceeding.
SECTION 6.10 Priorities. If the Trustee collects any money pursuant to
----------
this Article 6, it shall pay out the money in the following order:
42
(1) to the Trustee for amounts due under Section 7.06;
(2) to Noteholders for amounts due and unpaid on the Notes for the
principal amount, Redemption Price, Change in Control Purchase Price or any
accrued cash interest as the case may be, ratably, without preference or
priority of any kind, according to such amounts due and payable on the
Notes; and
(3) the balance, if any, to the Company.
The Trustee may fix a record date and payment date for any payment to
Noteholders pursuant to this Section 6.10. At least 15 days before such record
date, the Trustee shall mail to each Noteholder and the Company a notice that
states the record date, the payment date and the 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 and expenses,
against any party litigant in the suit, having due regard to the merits and good
faith of the claims or defenses made by the party litigant. This Section 6.11
does not apply to a suit by the Trustee, a suit by a Holder pursuant to Section
6.07 or a suit by Holders of more than 10% in aggregate principal amount of the
Notes at the time outstanding. This Section 6.11 shall be in lieu of Section
315(e) of the TIA and such Section 315(e) is hereby expressly excluded from this
Indenture, as permitted by the TIA.
SECTION 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,
Redemption Price, Change in Control Repurchase Price or any accrued cash
interest in respect of Notes, or any interest on 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 law, and covenants that it will not
hinder, delay or impede the execution of any power herein granted to the
Trustee, but will suffer and permit the execution of every such power as though
no such law had been enacted.
ARTICLE 7
TRUSTEE
SECTION 7.01 Duties and Responsibilities of the Trustee; During
--------------------------------------------------
Default; Prior to Default. The Trustee, prior to the occurrence of an Event of
-------------------------
Default hereunder and after the curing or waiving of all such Events of Default
which may have occurred, undertakes to perform such duties and only such duties
as are specifically set forth in this Indenture. In case an
43
Event of Default hereunder has occurred (which has not been cured or waived),
the Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their exercise, as a
prudent man would exercise or use under the circumstances in the conduct of his
own affairs.
No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own willful misconduct, except that
(a) prior to the occurrence of an Event of Default hereunder and after
the curing or waiving of all such Events of Default which may have
occurred:
(i) the duties and obligations of the Trustee shall be
determined solely by the express provisions of this Indenture, and the
Trustee shall not be liable except for the performance of such duties
and obligations as are specifically set forth in this Indenture, and
no implied covenants or obligations shall be read into this Indenture
against the Trustee; and
(ii) in the absence of bad faith on the part of the Trustee, the
Trustee may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon any
statements, certificates or opinions furnished to the Trustee and
conforming to the requirements of this Indenture; but in the case of
any such statements, certificates or opinions which by any provision
hereof are specifically required to be furnished to the Trustee, the
Trustee shall be under a duty to examine the same to determine whether
or not they conform to the requirements of this Indenture;
(b) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer or Responsible Officers of the Trustee,
unless it shall be proved that the Trustee was negligent in ascertaining
the pertinent facts; and
(c) the Trustee shall not be liable with respect to any action taken
or omitted to be taken by it in good faith in accordance with the direction
of the Holders pursuant to Section 6.05 relating to the time, method and
place of conducting any proceeding for any remedy available to the Trustee,
or exercising any trust or power conferred upon the Trustee, under this
Indenture.
None of the provisions contained in this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur personal financial
liability in the performance of any of its duties or in the exercise of any of
its rights or powers, if there shall be reasonable ground for believing that the
repayment of such funds or adequate indemnity against such liability is not
reasonably assured to it.
The provisions of this Section 7.01 are in furtherance of and subject
to Sections 315 and 316 of the TIA.
SECTION 7.02 Certain Rights of the Trustee. In furtherance of and
-----------------------------
subject to the TIA and subject to Section 7.01:
44
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, Officers' Certificate or any
other certificate, statement, instrument, opinion, report, notice, request,
consent, order, bond, debenture, note, coupon, Note or other paper or
document believed by it to be genuine and to have been signed or presented
by the proper party or parties;
(b) any request, direction, order or demand of the Company mentioned
herein shall be sufficiently evidenced by an Officers' Certificate (unless
other evidence in respect thereof be herein specifically prescribed); and
any resolution of the Board of Directors may be evidenced to the Trustee by
a copy thereof certified by the secretary or an assistant secretary of the
Company;
(c) the Trustee may consult with counsel of its selection and any
advice or Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted to be taken
by it hereunder in good faith and in accordance with such advice or Opinion
of Counsel;
(d) the Trustee shall be under no obligation to exercise any of the
trusts or powers vested in it by this Indenture with the request, order or
direction of any of the Noteholders pursuant to the provisions of this
Indenture, unless such Noteholders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and
liabilities which might be incurred therein or thereby;
(e) the Trustee shall not be liable for any action taken or omitted by
it in good faith and believed by it to be authorized or within the
discretion, rights or powers conferred upon it by this Indenture;
(f) prior to the occurrence of an Event of Default hereunder and after
the curing or waiving of all such Events of Default, the Trustee shall not
be bound to make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, order, approval, appraisal, bond, debenture, note,
coupon, security, or other paper or document unless requested in writing to
do so by the Holders of not less than a majority in aggregate principal
amount of the Notes then outstanding; provided that, if the payment within
a reasonable time to the Trustee of the costs, expenses or liabilities
likely to be incurred by it in the making of such investigation is, in the
opinion of the Trustee, not reasonably assured to the Trustee by the
security afforded to it by the terms of this Indenture, the Trustee may
require reasonable indemnity against such expenses or liabilities as a
condition to proceeding; the reasonable expenses of every such
investigation shall be paid by the Company or, if paid by the Trustee or
any predecessor trustee, shall be repaid by the Company upon demand; and
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys not regularly in its employ and the Trustee shall not be
responsible for any misconduct or negligence on the part of any such agent
or attorney appointed with due care by it hereunder.
45
SECTION 7.03 Trustee Not Responsible for Recitals, Disposition of
----------------------------------------------------
Notes or Application of Proceeds Thereof. The recitals contained herein and in
----------------------------------------
the Notes, except the Trustee's certificates of authentication, shall be taken
as the statements of the Company, and the Trustee assumes no responsibility for
the correctness of the same. The Trustee makes no representation as to the
validity or sufficiency of this Indenture or of the Notes. The Trustee shall not
be accountable for the use or application by the Company of any of the Notes or
of the proceeds thereof.
SECTION 7.04 Trustee and Agents May Hold Notes; Collections, etc. The
---------------------------------------------------
Trustee or any agent of the Company or the Trustee, in its individual or any
other capacity, may become the owner or pledgee of Notes with the same rights it
would have if it were not the Trustee or such agent and, subject to Sections
7.08 and 7.13, if operative, may otherwise deal with the Company and receive,
collect, hold and retain collections from the Company with the same rights it
would have if it were not the Trustee or such agent.
SECTION 7.05 Moneys Held by Trustee. Subject to the provisions of
----------------------
Section 8.02 hereof, all moneys received by the Trustee shall, until used or
applied as herein provided, be held in trust for the purposes for which they
were received, but need not be segregated from other funds except to the extent
required by mandatory provisions of law. Neither the Trustee nor any agent of
the Company or the Trustee shall be under any liability for interest on any
moneys received by it hereunder.
SECTION 7.06 Compensation and Indemnification of Trustee and Its Prior
---------------------------------------------------------
Claim. The Company covenants and agrees to pay to the Trustee from time to time,
-----
and the Trustee shall be entitled to, such compensation (which shall not be
limited by any provision of law in regard to the compensation of a trustee of an
express trust) to be agreed to in writing by the Trustee and the Company, and
the Company covenants and agrees to pay or reimburse the Trustee and each
predecessor Trustee upon its request for all reasonable expenses, disbursements
and advances incurred or made by or on behalf of it in accordance with any of
the provisions of this Indenture (including (i) the reasonable compensation and
the expenses and disbursements of its counsel and of all agents and other
persons not regularly in its employ and (ii) interest at the prime rate on any
disbursements and advances made by the Trustee and not paid by the Company
within 5 days after receipt of an invoice for such disbursement or advance)
except any such expense, disbursement or advance as may arise from its
negligence or bad faith. The Company also covenants to indemnify the Trustee and
each predecessor 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
Indenture or the trusts hereunder and its duties hereunder, including the costs
and expenses of defending itself against or investigating any claim of liability
in the premises. The obligations of the Company under this Section 7.06 to
compensate and indemnify the Trustee and each predecessor Trustee and to pay or
reimburse the Trustee and each predecessor Trustee for expenses, disbursements
and advances shall constitute additional indebtedness hereunder and shall
survive the satisfaction and discharge of this Indenture. Such additional
indebtedness shall be a senior claim to that of the Notes upon all property and
funds held or collected by the Trustee as such, except funds held in trust for
the benefit of the Holders of particular Notes, and the Notes are hereby
effectively subordinated to such senior claim to such extent. The provisions of
this Section 7.06 shall survive the termination of this Indenture. When the
Trustee incurs expenses or renders services
46
in connection with an Event of Default specified in Section 6.01 or in
connection with Article Six hereof, the expenses (including the reasonable fees
and expenses of its counsel) and the compensation for services in connection
therewith are to constitute expenses of administration under any bankruptcy law.
SECTION 7.07 Right of Trustee to Rely on Officers' Certificate, etc.
-------------------------------------------------------
Subject to Sections 7.01 and 7.02, whenever in the administration of the trusts
of this Indenture the Trustee shall deem it necessary or desirable that a matter
be proved or established prior to taking or suffering or omitting any action
hereunder, such matter (unless other evidence in respect thereof be herein
specifically prescribed) may, in the absence of negligence or bad faith on the
part of the Trustee, be deemed to be conclusively proved and established by an
Officers' Certificate delivered to the Trustee, and such certificate, in the
absence of negligence or bad faith on the part of the Trustee, shall be full
warrant to the Trustee for any action taken, suffered or omitted by it under the
provisions of this Indenture upon the faith thereof.
SECTION 7.08 Conflicting Interests. If the Trustee has or shall
---------------------
acquire a conflicting interest within the meaning of the TIA, the Trustee shall
either eliminate such interest or resign, to the extent and in the manner
provided by, and subject to the provisions of, the TIA.
SECTION 7.09 Persons Eligible for Appointment as Trustee. The Trustee
-------------------------------------------
shall at all times be a corporation or banking association having a combined
capital and surplus of at least $10,000,000. If such corporation or banking
association publishes reports of condition at least annually, pursuant to law or
to the requirements of the aforesaid supervising or examining authority, then,
for the purposes of this Section 7.09, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published. In case at any time the
Trustee shall cease to be eligible in accordance with the provisions of this
Section 7.09, the Trustee shall resign immediately in the manner and with the
effect specified in Section 7.10.
SECTION 7.10 Resignation and Removal; Appointment of Successor
-------------------------------------------------
Trustee. (a) The Trustee, or any trustee or trustees hereafter appointed, may at
-------
any time resign with respect to one or more or all series of Notes by giving
written notice of resignation to the Company and by mailing notice thereof by
first class mail to the Holders of Notes at their last addresses as they shall
appear on the Note register. Upon receiving such notice of resignation, the
Company shall promptly appoint a successor trustee or trustees by written
instrument in duplicate, executed by authority of the Board of Directors, one
copy of which instrument shall be delivered to the resigning Trustee and one
copy to the successor trustee or trustees. If no successor trustee shall have
been so appointed and have accepted appointment within 30 days after the mailing
of such notice of resignation, the resigning trustee may petition any court of
competent jurisdiction for the appointment of a successor trustee, or any
Noteholder who has been a bona fide Holder of a Note for at least six months
may, subject to the provisions of Section 7.11, on behalf of himself and all
others similarly situated, petition any such court for the appointment of a
successor trustee. Such court may thereupon, after such notice, if any, as it
may deem proper and prescribe, appoint a successor trustee.
(b) In case at any time any of the following shall occur:
47
(i) the Trustee shall fail to comply with the provisions of
Section 7.08 with respect to any Notes after written request therefor
by the Company or by any Noteholder who has been a bona fide Holder of
a Note for at least six months; or
(ii) the Trustee shall cease to be eligible in accordance with
the provisions of Section 7.09 and shall fail to resign after written
request therefor by the Company or by any Noteholder; or
(iii) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent, or a receiver or liquidator of the
Trustee or of its property shall be appointed, or any public officer
shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or
liquidation; or
(iv) the Company shall determine that the Trustee has failed to
perform its obligations under this Indenture in any material respect;
then, in any such case, the Company may remove the Trustee and appoint a
successor trustee by written instrument, in duplicate, executed by order of the
Board of Directors of the Company, one copy of which instrument shall be
delivered to the Trustee so removed and one copy to the successor trustee, or,
subject to the provisions of Section 7.11, any Noteholder who has been a bona
fide Holder of a Note for at least six months may on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor trustee. Such court
may thereupon, after such notice, if any, as it may deem proper and prescribe,
remove the Trustee and appoint a successor trustee. If no successor trustee
shall have been appointed and have accepted appointment within 30 days after a
notice of removal has been given, the removed trustee may petition a court of
competent jurisdiction for the appointment of a successor trustee.
(c) The Holders of a majority in aggregate principal amount of the
Notes at the time outstanding may at any time remove the Trustee and appoint a
successor trustee by delivering to the Trustee so removed, to the successor
trustee so appointed and to the Company the evidence provided for in Section
1.05 of the action in that regard taken by the Noteholders.
(d) Any resignation or removal of the Trustee and any appointment of a
successor trustee pursuant to any of the provisions of this Section 7.10 shall
become effective upon acceptance of appointment by the successor trustee as
provided in Section 7.11.
SECTION 7.11 Acceptance of Appointment by Successor Trustee. Any
----------------------------------------------
successor trustee appointed as provided in Section 7.10 shall execute and
deliver to the Company and to its predecessor trustee an instrument accepting
such appointment hereunder, and thereupon the resignation or removal of the
predecessor trustee shall become effective and such successor trustee, without
any further act, deed or conveyance, shall become vested with all rights,
powers, duties and obligations of its predecessor hereunder, with like effect as
if originally named as trustee hereunder; but, nevertheless, on the written
request of the Company or of the successor trustee, upon payment of its charges
then unpaid, the trustee ceasing to act shall pay over to the successor trustee
all moneys at the time held by it hereunder and shall execute and deliver an
instrument transferring to such successor trustee all such rights, powers,
48
duties and obligations. Upon request of any such successor trustee, the Company
shall execute any and all instruments in writing for more fully and certainly
vesting in and confirming to such successor trustee all such rights and powers.
Any trustee ceasing to act shall, nevertheless, retain a prior claim upon all
property or funds held or collected by such trustee to secure any amounts then
due it pursuant to the provisions of Section 7.06.
No successor trustee shall accept appointment as provided in this
Section 7.11 unless at the time of such acceptance such successor trustee shall
be qualified under the provisions of Section 7.08 and eligible under the
provisions of Section 7.09.
Upon acceptance of appointment by any successor trustee as provided in
this Section 7.11, the Company shall mail notice thereof by first class mail to
the Holders of Notes at their last addresses as they shall appear in the
register. If the acceptance of appointment is substantially contemporaneous with
the resignation, then the notice called for by the preceding sentence may be
combined with the notice called for by Section 7.10. If the Company fails to
mail such notice within ten days after acceptance of appointment by the
successor trustee, the successor trustee shall cause such notice to be mailed at
the expense of the Company.
SECTION 7.12 Merger, Conversion, Consolidation or Succession to
--------------------------------------------------
Business of Trustee. Any corporation or banking association into which the
-------------------
Trustee may be merged or converted or with which it may be consolidated, or any
corporation or banking association resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any corporation or
banking association succeeding to all or substantially all of the corporate
trust business of the Trustee, shall be the successor of the Trustee hereunder,
provided that such corporation or banking association shall be qualified under
the provisions of Section 7.08 and eligible under the provisions of Section
7.09, without the execution or filing of any paper or any further act on the
part of any of the parties hereto, anything herein to the contrary
notwithstanding. In case at the time such successor to the Trustee shall succeed
to the trusts created by this Indenture any of the Notes shall have been
authenticated but not delivered, any such successor to the Trustee may adopt the
certificate of authentication of any predecessor Trustee and deliver such Notes
so authenticated; and, in case at that time any of the Notes shall not have been
authenticated, any successor to the Trustee may authenticate such Notes either
in the name of any predecessor hereunder or in the name of the successor
Trustee; and in all such cases such certificate shall have the full force and
effect that this Indenture provides for the certificate of authentication of the
Trustee; provided, that the right to adopt the certificate of authentication of
any predecessor Trustee or to authenticate Notes in the name of any predecessor
Trustee shall apply only to its successor or successors by merger, conversion or
consolidation.
SECTION 7.13 Preferential Collection of Claims Against the Company.
-----------------------------------------------------
The Trustee shall comply with the provisions of Section 311 of the TIA.
SECTION 7.14 Reports by the Trustee. (a) The Trustee shall transmit to
----------------------
Holders and other persons such reports concerning the Trustee and its actions
under this Indenture as may be required pursuant to the TIA on or before July 15
in each year that such report is required, such reports to be dated as of the
immediately preceding May 15.
49
(b) A copy of each such report shall, at the time of such transmission
to Noteholders, be furnished to the Company and be filed by the Trustee with
each stock exchange upon which the Notes are listed and also with the SEC. The
Company agrees to notify the Trustee when and as the Notes become admitted to
trading on any national securities exchange.
SECTION 7.15 Trustee to Give Notice of Default, But May Withhold in
------------------------------------------------------
Certain Circumstances. The Trustee shall transmit to the Noteholders, as the
---------------------
names and addresses of such Holders appear on the Note register, notice by mail
of all Defaults which have occurred, such notice to be transmitted within 90
days after the occurrence thereof, unless such defaults shall have been cured
before the giving of such notice; provided that, except in the case of Default
in the payment of the principal of, interest on, or other similar obligation
with respect to, any of the Notes, the Trustee shall be protected in withholding
such notice if and so long as the board of directors, the executive committee,
or a trust committee of directors or trustees and/or Responsible Officers of the
Trustee in good faith determines that the withholding of such notice is in the
best interests of the Noteholders.
ARTICLE 8
DISCHARGE OF INDENTURE
SECTION 8.01 Discharge of Liability on Notes. When (i) the Company
-------------------------------
delivers to the Trustee all outstanding Notes (other than Notes replaced
pursuant to Section 2.07) for cancellation or (ii) all outstanding Notes have
become due and payable and the Company deposits with the Trustee cash or, if
expressly permitted by the terms of the Notes, Common Stock sufficient to pay
all amounts due and owing on all outstanding Notes (other than Notes 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
7.06, cease to be of further effect. The Trustee shall join in the execution of
a document prepared by the Company acknowledging satisfaction and discharge of
this Indenture on demand of the Company accompanied by an Officers' Certificate
and Opinion of Counsel and at the cost and expense of the Company.
SECTION 8.02 Repayment of the Company. The Trustee and the Paying
------------------------
Agent shall return to the Company upon written request any money or securities
held by them for the payment of any amount with respect to the Notes that
remains unclaimed for two years, subject to applicable unclaimed property law.
After return to the Company, Holders entitled to the money or securities must
look to the Company for payment as general creditors unless an applicable
abandoned property law designates another person and the Trustee and the Paying
Agent shall have no further liability to the Noteholders with respect to such
money or securities for that period commencing after the return thereof.
50
ARTICLE 9
AMENDMENTS
SECTION 9.01 Without Consent of Holders. The Company and the Trustee
--------------------------
may amend this Indenture or the Notes without the consent of any Noteholder for
the purposes of, among other things:
(1) adding to the Company's covenants for the benefit of the Holders;
(2) surrendering any right or power conferred upon the Company;
(3) providing for conversion rights of Holders if any reclassification
or change of Common Stock or any consolidation, merger or sale of all or
substantially all of the Company's assets occurs;
(4) providing for the assumption of the Company's obligations to the
Holders in the case of a merger, consolidation, conveyance, transfer or
lease;
(5) reducing the Conversion Price, provided that the reduction will
not adversely affect the interests of Holders in any material respect;
(6) complying with the requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the TIA;
(7) making any changes or modifications to this Indenture necessary in
connection with the registration of the Notes under the Securities Act as
contemplated by the registration rights agreement, provided that this
action does not adversely affect the interests of the Holders in any
material respect;
(8) curing any ambiguity or correcting or supplementing any defective
provision contained in this Indenture; provided that such modification or
amendment does not, in the good faith opinion of the board of directors of
the Company and the Trustee, adversely affect the interests of the Holders
in any material respect;
(9) adding or modifying any other provisions which the Company and the
Trustee may deem necessary or desirable and which will not adversely affect
the interests of the Holders in any material respect;
(10) complying with Article 5;
(11) providing for uncertificated Notes in addition to the
Certificated Notes so long as such uncertificated Notes are in registered
form for purposes of the Internal Revenue Code of 1986, as amended; or
(12) adding to the Company's covenants or obligations under this
Indenture for the protection of the Holders or surrendering any right,
power or option conferred by this Indenture on the Company.
51
SECTION 9.02 With Consent of Holders. With the written consent of the
--------------------------
Holders of at least a majority in aggregate principal amount of the Notes at the
time outstanding, the Company and the Trustee may amend this Indenture or the
Notes. However, without the consent of each Noteholder affected, an amendment to
this Indenture or the Notes may not:
(1) change the maturity of the principal of or any installment of
interest on any Note (including any payment of liquidated damages);
(2) reduce the principal amount of, or any premium or interest on
(including any payment of liquidated damages), any Note;
(3) reduce the interest rate or interest (including liquidated
damages) on any Note;
(4) change the currency of payment of principle amount of, premium, if
any, or interest in any Note;
(5) impair the right to institute suit for the enforcement of any
payment on or with respect to, or conversion of, any Note;
(6) except as otherwise permitted or contemplated by provisions of
this Indenture concerning corporate reorganizations, adversely affect the
repurchase option of Holders upon a Change in Control or the conversion
rights of Holders;
(7) modify the subordination provisions of the Notes in a manner
adverse to the Holders; or
(8) reduce the percentage in aggregate principal amount of Notes
outstanding necessary to modify or amend this Indenture or to waive any
past default.
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.
After an amendment under this Section 9.02 becomes effective, the
Company shall mail to each Holder a notice briefly describing the amendment.
SECTION 9.03 Compliance with Trust Indenture Act. Every supplemental
-----------------------------------
indenture executed pursuant to this Article shall comply with the TIA.
SECTION 9.04 Revocation and Effect of Consents, Waivers and Actions.
------------------------------------------------------
Until an amendment, waiver or other action by Holders becomes effective, a
consent thereto by a Holder of a Note hereunder is a continuing consent by the
Holder and every subsequent Holder of that Note or portion of the Note that
evidences the same obligation as the consenting Holder's Note, even if notation
of the consent, waiver or action is not made on the Note. However, any such
Holder or subsequent Holder may revoke the consent, waiver or action as to such
Holder's Note or portion of the Note 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
Noteholder.
52
SECTION 9.05 Notation on or Exchange of Notes. Notes authenticated and
--------------------------------
delivered after the execution of any supplemental indenture pursuant to this
Article 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 Notes 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 Notes.
SECTION 9.06 Trustee to Sign Supplemental Indentures. The Trustee
---------------------------------------
shall sign any supplemental indenture authorized pursuant to this Article 9 if
the amendment contained therein 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 supplemental indenture
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, 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 Notes theretofore or
thereafter authenticated and delivered hereunder shall be bound thereby.
ARTICLE 10
CONVERSION
SECTION 10.01 Conversion Right and Conversion Price. Subject to and
-------------------------------------
upon compliance with the provisions of this Article, at the option of the Holder
thereof, any Note or any portion of the principal amount thereof which is $1,000
or an integral multiple of $1,000 may be converted at the principal amount
thereof, or of such portion thereof, into duly authorized, fully paid and
nonassessable shares of Common Stock, at the Conversion Price, determined as
hereinafter provided, in effect at the time of conversion. Such conversion right
shall expire at the close of business on June 20, 2006.
In case a Note or portion thereof is called for redemption, such
conversion right in respect of the Note or the portion so called, shall expire
at the close of business on the Business Day preceding the Redemption Date,
unless the Company defaults in making the payment due upon redemption. In the
case of a Change in Control for which the Holder exercises its repurchase right
with respect to a Note or portion thereof, such conversion right in respect of
the Note or portion thereof shall expire at the close of business on the
Business Day immediately preceding the Change in Control Repurchase Date.
The price at which shares of Common Stock shall be delivered upon
conversion (the "Conversion Price") shall be initially equal to $60.60 per share
of Common Stock. The Conversion Price shall be adjusted in certain instances as
provided in paragraphs (a), (b), (c), (d), (e), (f), (h) and (i) of Section
10.04 and Section 10.12 hereof.
53
SECTION 10.02 Exercise of Conversion Right. To exercise the conversion
----------------------------
right, the Holder of any Note to be converted shall surrender such Note duly
endorsed or assigned to the Company or in blank, at the office of any Conversion
Agent, accompanied by a duly signed conversion notice substantially in the form
attached to the Note to the Company stating that the Holder elects to convert
such Note or, if less than the entire principal amount thereof is to be
converted, the portion thereof to be converted.
Notes surrendered for conversion during the period from the close of
business on any Regular Record Date to the opening of business on the next
succeeding Interest Payment Date shall be accompanied by payment in New York
Clearing House funds or other funds acceptable to the Company of an amount equal
to the interest to be received on such Interest Payment Date on the principal
amount of Notes being surrendered for conversion.
Notes shall be deemed to have been converted immediately prior to the
close of business on the day of surrender of such Notes for conversion in
accordance with the foregoing provisions, and at such time the rights of the
Holders of such Notes as Holders shall cease, and the Person or Persons entitled
to receive the Common Stock issuable upon conversion shall be treated for all
purposes as the record holder or holders of such Common Stock at such time. As
promptly as practicable on or after the conversion date, the Company shall cause
to be issued and delivered to such Conversion Agent a certificate or
certificates for the number of full shares of Common Stock issuable upon
conversion, together with payment in lieu of any fraction of a share as provided
in Section 10.03 hereof.
In the case of any Note which is converted in part only, upon such
conversion the Company shall execute and the Trustee shall authenticate and
deliver to the Holder thereof, at the expense of the Company, a new Note or
Notes of authorized denominations in aggregate principal amount equal to the
unconverted portion of the principal amount of such Notes.
If shares of Common Stock to be issued upon conversion of a Restricted
Note, or securities to be issued upon conversion of a Restricted Note in part
only, are to be registered in a name other than that of the Holder of such
Restricted Note, such Holder must deliver to the Conversion Agent a certificate
in substantially the form set forth in the form of Note set forth in Exhibit A
annexed hereto, dated the date of surrender of such Restricted Note and signed
by such Holder, as to compliance with the restrictions on transfer applicable to
such Restricted Note. Neither the Trustee nor any Conversion Agent, Registrar
or Transfer Agent shall be required to register in a name other than that of the
Holder shares of Common Stock or Notes issued upon conversion of any such
Restricted Note not so accompanied by a properly completed certificate.
The Company hereby initially appoints the Trustee as the Conversion
Agent.
SECTION 10.03 Fractions of Shares. No fractional shares of Common
-------------------
Stock shall be issued upon conversion of any Note or Notes. If more than one
Note shall be surrendered for conversion at one time by the same Holder, the
number of full shares which shall be issued upon conversion thereof shall be
computed on the basis of the aggregate principal amount of the Notes (or
specified portions thereof) so surrendered. Instead of any fractional share of
Common Stock which would otherwise be issued upon conversion of any Note or
Notes (or specified portions thereof), the Company shall pay a cash adjustment
in respect of such
54
fraction (calculated to the nearest one-100th of a share) in an amount equal to
the same fraction of the quoted price of the Common Stock as of the Trading Day
preceding the date of conversion.
SECTION 10.04 Adjustment of Conversion Price. The Conversion Price
------------------------------
shall be subject to adjustments, calculated by the Company, from time to time as
follows:
(a) In case the Company shall hereafter pay a dividend or make a
distribution to all holders of the outstanding Common Stock in shares of
Common Stock, the Conversion Price in effect at the opening of business on
the date following the date fixed for the determination of stockholders
entitled to receive such dividend or other distribution shall be reduced by
multiplying such Conversion Price by a fraction:
(1) the numerator of which shall be the number of shares of
Common Stock outstanding at the close of business on the Record Date
(as defined in Section 10.4(g)) fixed for such determination, and
(2) the denominator of which shall be the sum of such number of
shares and the total number of shares constituting such dividend or
other distribution.
Such reduction shall become effective immediately after the opening of
business on the day following the Record Date. If any dividend or
distribution of the type described in this Section 10.04(a) is declared but
not so paid or made, the Conversion Price shall again be adjusted to the
Conversion Price which would then be in effect if such dividend or
distribution had not been declared.
(b) In case the outstanding shares of Common Stock shall be subdivided
into a greater number of shares of Common Stock, the Conversion Price in
effect at the opening of business on the day following the day upon which
such subdivision becomes effective shall be proportionately reduced, and
conversely, in case outstanding shares of Common Stock shall be combined
into a smaller number of shares of Common Stock, the Conversion Price in
effect at the opening of business on the day following the day upon which
such combination becomes effective shall be proportionately increased, such
reduction or increase, as the case may be, to become effective immediately
after the opening of business on the day following the day upon which such
subdivision or combination becomes effective.
(c) In case the Company shall issue rights or warrants (other than any
rights or warrants referred to in Section 10.04(d)) to all holders of its
outstanding shares of Common Stock entitling them to subscribe for or
purchase shares of Common Stock (or securities convertible into Common
Stock) at a price per share (or having a conversion price per share) less
than the Current Market Price (as defined in Section 10.04(g)) on the
Record Date fixed for the determination of stockholders entitled to receive
such rights or warrants, the Conversion Price shall be adjusted so that the
same shall equal the price determined by multiplying the Conversion Price
in effect at the opening of business on the date after such Record Date by
a fraction:
55
(1) the numerator of which shall be the number of shares of
Common Stock outstanding at the close of business on the Record Date
plus the number of shares which the aggregate offering price of the
total number of shares so offered for subscription or purchase (or the
aggregate conversion price of the convertible securities so offered)
would purchase at such Current Market Price, and
(2) the denominator of which shall be the number of shares of
Common Stock outstanding on the close of business on the Record Date
plus the total number of additional shares of Common Stock so offered
for subscription or purchase (or into which the convertible securities
so offered are convertible).
Such adjustment shall become effective immediately after the opening of
business on the day following the Record Date fixed for determination of
stockholders entitled to receive such rights or warrants. To the extent
that shares of Common Stock (or securities convertible into Common Stock)
are not delivered pursuant to such rights or warrants, upon the expiration
or termination of such rights or warrants the Conversion Price shall be
readjusted to the Conversion Price which would then be in effect had the
adjustments made upon the issuance of such rights or warrants been made on
the basis of the delivery of only the number of shares of Common Stock (or
securities convertible into Common Stock) actually delivered. In the event
that such rights or warrants are not so issued, the Conversion Price shall
again be adjusted to be the Conversion Price which would then be in effect
if such date fixed for the determination of stockholders entitled to
receive such rights or warrants had not been fixed. In determining whether
any rights or warrants entitle the holders to subscribe for or purchase
shares of Common Stock at less than such Current Market Price, and in
determining the aggregate offering price of such shares of Common Stock,
there shall be taken into account any consideration received for such
rights or warrants, the value of such consideration if other than cash, to
be determined by the Board of Directors.
(d) In case the Company shall, by dividend or otherwise, distribute to
all holders of its Common Stock shares of any class of capital stock of the
Company (other than any dividends or distributions to which Section
10.04(a) applies) or evidences of its indebtedness, cash or other assets,
including securities, but excluding (1) any rights or warrants referred to
in Section 10.04(c), (2) any dividends or distributions in connection with
a reclassification, change, merger, consolidation, statutory share
exchange, combination, sale or conveyance to which Section 10.11 hereof
applies and (3) dividends and distributions paid exclusively in cash (the
securities described in foregoing clauses (1), (2) and (3) hereinafter in
this Section 10.04(d) called the "excluded securities"), then, in each such
case, subject to the second succeeding paragraph of this Section 10.04(d),
the Conversion Price shall be adjusted so that the same shall be equal to
the price determined by multiplying the Conversion Price in effect
immediately prior to the close of business on the Record Date (as defined
in Section 10.04(g)) with respect to such distribution by a fraction:
(1) the numerator of which shall be the Current Market Price
(determined as provided in Section 10.04(g)) on such date less the
fair market value (as determined by the Board of Directors, whose
determination shall be
56
conclusive and set forth in a Board Resolution) on such date of the
portion of the securities so distributed (other than excluded
securities) applicable to one share of Common Stock (determined on the
basis of the number of shares of the Common Stock outstanding on the
Record Date), and
(2) the denominator of which shall be such Current Market Price.
Such reduction shall become effective immediately prior to the opening of
business on the day following the Record Date. However, in the event that
the then fair market value (as so determined) of the portion of the
securities so distributed (other than excluded securities) applicable to
one share of Common Stock is equal to or greater than the Current Market
Price on the Record Date, in lieu of the foregoing adjustment, adequate
provision shall be made so that each Holder shall have the right to receive
upon conversion of a Note (or any portion thereof) the amount of securities
so distributed (other than excluded securities) such Holder would have
received had such Holder converted such Note (or portion thereof)
immediately prior to such Record Date. In the event that such dividend or
distribution is not so paid or made, the Conversion Price shall again be
adjusted to be the Conversion Price which would then be in effect if such
dividend or distribution had not been declared.
If the Board of Directors determines the fair market value of any
distribution for purposes of this Section 10.04(d) by reference to the
actual or when issued trading market for any securities comprising all or
part of such distribution (other than excluded securities), it must in
doing so consider the prices in such market over the same period (the
"Reference Period") used in computing the Current Market Price pursuant to
Section 10.04(g) to the extent possible, unless the Board of Directors in a
Board Resolution determines in good faith that determining the fair market
value during the Reference Period would not be in the best interest of the
Holder.
Rights or warrants distributed by the Company to all holders of Common
Stock entitling the holders thereof to subscribe for or purchase shares of
the Company's capital stock (either initially or under certain
circumstances), which rights or warrants, until the occurrence of a
specified event or events ("Trigger Event"):
(i) are deemed to be transferred with such shares of Common
Stock;
(ii) are not exercisable; and
(iii) are also issued in respect of future issuances of Common
Stock,
shall be deemed not to have been distributed for purposes of this Section
10.04(d) (and no adjustment to the Conversion Price under this Section
10.04(d) will be required) until the occurrence of the earliest Trigger
Event. If such right or warrant is subject to subsequent events, upon the
occurrence of which such right or warrant shall become exercisable to
purchase different securities, evidences of indebtedness or other assets or
entitle the holder to purchase a different number or amount of the
foregoing or to purchase any of the foregoing at a different purchase
price, then the occurrence of each such event shall be deemed to be the
date of issuance and record date with respect to a new right or
57
warrant (and a termination or expiration of the existing right or warrant
without exercise by the holder thereof). In addition, in the event of any
distribution (or deemed distribution) of rights or warrants, or any Trigger
Event or other event (of the type described in the preceding sentence) with
respect thereto, that resulted in an adjustment to the Conversion Price
under this Section 10.04(d):
(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 Price 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
warrant (assuming such holder had retained such rights or warrants),
made to all holders of Common Stock as of the date of such redemption
or repurchase, and
(2) in the case of such rights or warrants all of which shall
have expired or been terminated without exercise, the Conversion Price
shall be readjusted as if such rights and warrants had never been
issued.
For purposes of this Section 10.04(d) and Sections 10.04(a), 10.04(b)
and 10.04(c), any dividend or distribution to which this Section 10.04(d)
is applicable that also includes shares of Common Stock, a subdivision or
combination of Common Stock to which Section 10.04(b) applies, or rights or
warrants to subscribe for or purchase shares of Common Stock to which
Section 10.04(c) applies (or any combination thereof), shall be deemed
instead to be:
(3) a dividend or distribution of the evidences of indebtedness,
assets, shares of capital stock, rights or warrants other than such
shares of Common Stock, such subdivision or combination or such rights
or warrants to which Sections 10.04(a), 10.04(b) and 10.04(c) apply,
respectively (and any Conversion Price reduction required by this
Section 10.04(d) with respect to such dividend or distribution shall
then be made), immediately followed by
(4) a dividend or distribution of such shares of Common Stock,
such subdivision or combination or such rights or warrants (and any
further Conversion Price reduction required by Sections 10.04(a),
10.04(b) and 10.04(c) with respect to such dividend or distribution
shall then be made), except:
(A) the Record Date of such dividend or distribution shall
be substituted as (x) "the date fixed for the determination of
stockholders entitled to receive such dividend or other
distribution", "Record Date fixed for such determinations" and
"Record Date" within the meaning of Section 10.04(a), (y) "the
day upon which such subdivision becomes effective" and "the day
upon which such combination becomes effective" within the meaning
of Section 10.04(b), and (z) as "the date fixed for the
determination of stockholders entitled to receive such rights or
warrants", "the Record Date fixed for the determination of the
stockholders entitled
58
to receive such rights or warrants" and such "Record Date" within
the meaning of Section 10.04(c), and
(B) any shares of Common Stock included in such dividend or
distribution shall not be deemed "outstanding at the close of
business on the date fixed for such determination" within the
meaning of Section 10.04(a) and any reduction or increase in the
number of shares of Common Stock resulting from such subdivision
or combination shall be disregarded in connection with such
dividend or distribution.
(e) In case the Company shall, by dividend or otherwise, distribute to
all holders of its Common Stock cash (excluding any cash that is
distributed upon a reclassification, change, merger, consolidation,
statutory share exchange, combination, sale or conveyance to which Section
10.11 hereof applies or as part of a distribution referred to in Section
10.04(d) hereof), in an aggregate amount that, combined together with: (1)
the aggregate amount of any other such distributions to all holders of
Common Stock made exclusively in cash within the 12 months preceding the
date of payment of such distribution, and in respect of which no adjustment
pursuant to this Section 10.04(e) has been made, and (2) the aggregate of
any cash plus the fair market value (as determined by the Board of
Directors, whose determination shall be conclusive and set forth in a Board
Resolution) of consideration payable in respect of any tender offer or
exchange offer by the Company or any of its subsidiaries for all or any
portion of the Common Stock concluded within the 12 months preceding the
date of such distribution, and in respect of which no adjustment pursuant
to Section 10.04(f) hereof has been made, exceeds 10% of the product of the
Current Market Price (determined as provided in Section 10.04(g)) on the
Record Date with respect to such distribution times the number of shares of
Common Stock outstanding on such date, then and in each such case,
immediately after the close of business on such date, the Conversion Price
shall be reduced so that the same shall equal the price determined by
multiplying the Conversion Price in effect immediately prior to the close
of business on such Record Date by a fraction:
(i) the numerator of which shall be equal to the Current Market
Price on the Record Date less an amount equal to the quotient of (x)
the excess of such combined amount over such 10% and (y) the number of
shares of Common Stock outstanding on the Record Date, and
(ii) the denominator of which shall be equal to the Current
Market Price on such date.
However, in the event that the then fair market value (as so determined) of
the portion of the securities so distributed (other than excluded
securities) applicable to one share of Common Stock is equal to or greater
than the Current Market Price on the Record Date, in lieu of the foregoing
adjustment, adequate provision shall be made so that each Holder shall have
the right to receive upon conversion of a Note (or any portion thereof) the
amount of cash such Holder would have received had such Holder converted
such Note (or portion thereof) immediately prior to such Record Date. In
the event that such dividend or distribution is not so paid or made, the
Conversion Price shall again be
59
adjusted to be the Conversion Price which would then be in effect if such
dividend or distribution had not been declared.
(f) In case a tender offer or exchange offer made by the Company or
any of its subsidiaries for all or any portion of the Common Stock shall
expire and such tender offer or exchange offer (as amended upon the
expiration thereof) shall require the payment to stockholders (based on the
acceptance (up to any maximum specified in the terms of the tender offer or
exchange offer) of Purchased Shares (as defined below)) of an aggregate
consideration having a fair market value (as determined by the Board of
Directors, whose determination shall be conclusive and set forth in a Board
Resolution) that combined together with:
(1) the aggregate of the cash plus the fair market value (as
determined by the Board of Directors, whose determination shall be
conclusive and set forth in a Board Resolution), as of the expiration
of such tender offer or exchange offer, of consideration payable in
respect of any other tender offers or exchange offers, by the Company
or any of its subsidiaries for all or any portion of the Common Stock
expiring within the 12 months preceding the expiration of such tender
offer or exchange offer and in respect of which no adjustment pursuant
to this Section 10.04(f) has been made, and
(2) the aggregate amount of any distributions to all holders of
the Company's Common Stock made exclusively in cash within 12 months
preceding the expiration of such tender offer or exchange offer and in
respect of which no adjustment pursuant to Section 10.04(e) has been
made, exceeds 10% of the product of the Current Market Price
(determined as provided in Section 10.04(g)) as of the last time (the
"Expiration Time") tenders or exchanges could have been made pursuant
to such tender offer or exchange offer (as it may be amended) times
the number of shares of Common Stock outstanding (including any
tendered shares or exchanged shares) on the Expiration Time, then, and
in each such case, immediately prior to the opening of business on the
day after the date of the Expiration Time, the Conversion Price shall
be adjusted so that the same shall equal the price determined by
multiplying the Conversion Price in effect immediately prior to close
of business on the date of the Expiration Time by a fraction:
(i) the numerator of which shall be the number of shares of
Common Stock outstanding (including any tendered or exchanged
shares) at the Expiration Time multiplied by the Current Market
Price of the Common Stock on the Trading Day next succeeding the
Expiration Time, and
(ii) the denominator shall be the sum of (x) the fair market
value (determined as aforesaid) of the aggregate consideration
payable to stockholders based on the acceptance (up to any
maximum specified in the terms of the tender offer or exchange
offer) of all shares validly tendered or exchanged and not
withdrawn as of the Expiration Time (the shares
60
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.
Such reduction (if any) shall 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 offer or exchange offer, but the Company is permanently prevented by
applicable law from effecting any such purchases or all such purchases are
rescinded, the Conversion Price shall again be adjusted to be the
Conversion Price which would then be in effect if such tender offer or
exchange offer had not been made. If the application of this Section
10.04(f) to any tender offer or exchange offer would result in an increase
in the Conversion Price, no adjustment shall be made for such tender offer
or exchange offer under this Section 10.04(f).
(g) For purposes of this Section 10.04, the following terms shall have
the meanings indicated:
(1) "Current Market Price" shall mean the average of the daily
Closing Prices per share of Common Stock for the ten consecutive
Trading Days immediately prior to the date in question; provided,
however, that if:
(i) the "ex" date (as hereinafter defined) for any event
(other than the issuance or distribution requiring such
computation) that requires an adjustment to the Conversion Price
pursuant to Section 10.04(a), (b), (c), (d), (e) or (f) occurs
during such ten consecutive Trading Days, the Closing Price for
each Trading Day prior to the "ex" date for such other event
shall be adjusted by multiplying such Closing Price by the same
fraction by which the Conversion Price is so required to be
adjusted as a result of such other event;
(ii) the "ex" date for any event (other than the issuance
or distribution requiring such computation) that requires an
adjustment to the Conversion Price pursuant to Section 10.04(a),
(b), (c), (d), (e) or (f) occurs on or after the "ex" date for
the issuance or distribution requiring such computation and prior
to the day in question, the Closing Price for each Trading Day on
and after the "ex" date for such other event shall be adjusted by
multiplying such Closing Price by the reciprocal of the fraction
by which the Conversion Price is so required to be adjusted as a
result of such other event; and
(iii) the "ex" date for the issuance or distribution
requiring such computation is prior to the day in question, after
taking into account any adjustment required pursuant to clause
(i) or (ii) of this proviso, the Closing Price for each Trading
Day on or after such "ex" date shall be adjusted by adding
thereto the amount of any cash and the fair market
61
value (as determined by the Board of Directors in a manner
consistent with any determination of such value for purposes of
Section 10.04(d) or (f), whose determination shall be conclusive
and set forth in a Board Resolution) of the evidences of
indebtedness, shares of capital stock or assets being distributed
applicable to one share of Common Stock as of the close of
business on the day before such "ex" date.
For purposes of any computation under Section 10.04(f), the Current Market
Price of the Common Stock on any date shall be deemed to be the average of
the daily Closing Prices per share of Common Stock for such day and the
next two succeeding Trading Days; provided, however, that if the "ex" date
for any event (other than the tender offer requiring such computation) that
requires an adjustment to the Conversion Price pursuant to Section
10.04(a), (b), (c), (d), (e) or (f) occurs on or after the Expiration Time
for the tender or exchange offer requiring such computation and prior to
the day in question, the Closing Price for each Trading Day on and after
the "ex" date for such other event shall be adjusted by multiplying such
Closing Price by the reciprocal of the fraction by which the Conversion
Price is so required to be adjusted as a result of such other event. For
purposes of this paragraph, the term "ex" date, when used:
(A) with respect to any issuance or distribution, means the first
date on which the Common Stock trades regular way on the relevant
exchange or in the relevant market from which the Closing Price was
obtained without the right to receive such issuance or distribution;
(B) with respect to any subdivision or combination of shares of
Common Stock, means the first date on which the Common Stock trades
regular way on such exchange or in such market after the time at which
such subdivision or combination becomes effective, and
(C) with respect to any tender or exchange offer, means the first
date on which the Common Stock trades regular way on such exchange or
in such market after the Expiration Time of such offer.
Notwithstanding the foregoing, whenever successive adjustments to the
Conversion Price are called for pursuant to this Section 10.04, such
adjustments shall be made to the Current Market Price as may be necessary
or appropriate to effectuate the intent of this Section 10.04 and to avoid
unjust or inequitable results as determined in good faith by the Board of
Directors.
(2) "fair market value" shall mean the amount which a willing
buyer would pay a willing seller in an arm's length transaction.
(3) "Record Date" shall mean, with respect to any dividend,
distribution or other transaction or event in which the holders of
Common Stock have the right to receive any cash, securities or other
property or in which the Common Stock (or other applicable security)
is exchanged for or converted into any combination of cash, securities
or other property, the date fixed for
62
determination of stockholders entitled to receive such cash,
securities or other property (whether such date is fixed by the Board
of Directors or by statute, contract or otherwise).
(h) The Company may make such reductions in the Conversion Price, in
addition to those required by Section 10.04(a), (b), (c), (d), (e) or (f),
as the Board of Directors considers to be advisable to avoid or diminish
any income tax to holders of Common Stock or rights to purchase Common
Stock resulting from any dividend or distribution of stock (or rights to
acquire stock) or from any event treated as such for income tax purposes.
To the extent permitted by applicable law, the Company from time to
time may reduce the Conversion Price by any amount for any period of time
if the period is at least 20 days and the reduction is irrevocable during
the period and the Board of Directors determines in good faith that such
reduction would be in the best interests of the Company, which
determination shall be conclusive and set forth in a Board Resolution.
Whenever the Conversion Price is reduced pursuant to the preceding
sentence, the Company shall mail to the Trustee and each Holder at the
address of such Holder as it appears in the Register a notice of the
reduction at least 15 days prior to the date the reduced Conversion Price
takes effect, and such notice shall state the reduced Conversion Price and
the period during which it will be in effect.
(i) No adjustment in the Conversion Price shall be required unless
such adjustment would require an increase or decrease of at least 1% in the
Conversion Price then in effect; provided, however, that any adjustments
which by reason of this Section 10.04(i) are not required to be made shall
be carried forward and taken into account in any subsequent adjustment. All
calculations under this Article 10 shall be made by the Company and shall
be made to the nearest cent or to the nearest one hundredth of a share, as
the case may be. No adjustment need be made for a change in the par value
or no par value of the Common Stock.
(j) In any case in which this Section 10.04 provides that an
adjustment shall become effective immediately after a Record Date for an
event, the Company may defer until the occurrence of such event (i) issuing
to the Holder of any Note converted after such Record Date and before the
occurrence of such event the additional shares of Common Stock issuable
upon such conversion by reason of the adjustment required by such event
over and above the Common Stock issuable upon such conversion before giving
effect to such adjustment and (ii) paying to such holder any amount in cash
in lieu of any fraction pursuant to Section 10.03 hereof.
(k) For purposes of this Section 10.04, the number of shares of Common
Stock at any time outstanding shall not include shares held in the treasury
of the Company but shall include shares issuable in respect of scrip
certificates issued in lieu of fractions of shares of Common Stock. The
Company will not pay any dividend or make any distribution on shares of
Common Stock held in the treasury of the Company.
63
(l) If the distribution date for the rights provided in the Company's
rights agreement, if any, occurs prior to the date a Note is converted, the
Holder of the Note who converts such Note after the distribution date is
not entitled to receive the rights that would otherwise be attached (but
for the date of conversion) to the shares of Common Stock received upon
such conversion; provided, however, that an adjustment shall be made to the
Conversion Price pursuant to Section 10.04(b) as if the rights were being
distributed to the common stockholders of the Company immediately prior to
such conversion. If such an adjustment is made and the rights are later
redeemed, invalidated or terminated, then a corresponding reversing
adjustment shall be made to the Conversion Price, on an equitable basis, to
take account of such event.
SECTION 10.05 Notice of Adjustments of Conversion Price. Whenever the
-----------------------------------------
Conversion Price is adjusted as herein provided (other than in the case of an
adjustment pursuant to the second paragraph of Section 10.04(h) for which the
notice required by such paragraph has been provided), the Company shall promptly
file with the Trustee and any Conversion Agent other than the Trustee an
Officers' Certificate setting forth the adjusted Conversion Price and showing in
reasonable detail the facts upon which such adjustment is based. Promptly after
delivery of such Officers' Certificate, the Company shall prepare a notice
stating that the Conversion Price has been adjusted and setting forth the
adjusted Conversion Price and the date on which each adjustment becomes
effective, and shall mail such notice to each Holder at the address of such
Holder as it appears in the Register within 20 days of the effective date of
such adjustment. Failure to deliver such notice shall not effect the legality or
validity of any such adjustment.
SECTION 10.06 Notice Prior to Certain Actions. In case at any time
-------------------------------
after the date hereof:
(1) the Company shall declare a dividend (or any other distribution)
on its Common Stock payable otherwise than in cash out of its capital
surplus or its consolidated retained earnings;
(2) the Company shall authorize the granting to the holders of its
Common Stock of rights or warrants to subscribe for or purchase any shares
of capital stock of any class (or of securities convertible into shares of
capital stock of any class) or of any other rights;
(3) there shall occur any reclassification of the Common Stock of the
Company (other than a subdivision or combination of its outstanding Common
Stock, a change in par value, a change from par value to no par value or a
change from no par value to par value), or any merger, consolidation,
statutory share exchange or combination to which the Company is a party and
for which approval of any shareholders of the Company is required, or the
sale, transfer or conveyance of all or substantially all of the assets of
the Company; or
(4) there shall occur the voluntary or involuntary dissolution,
liquidation or winding up of the Company;
64
the Company shall cause to be filed at each office or agency maintained for the
purpose of conversion of Notes pursuant to Section 4.03 hereof, and shall cause
to be provided to the Trustee and all Holders in accordance with Section 12.02
hereof, at least 20 days (or 10 days in any case specified in clause (1) or (2)
above) prior to the applicable record or effective date hereinafter specified, a
notice stating:
(A) the date on which a record is to be taken for the purpose of
such dividend, distribution, rights or warrants, or, if a record is
not to be taken, the date as of which the holders of Common Stock of
record to be entitled to such dividend, distribution, rights or
warrants are to be determined, or
(B) the date on which such reclassification, merger,
consolidation, statutory share exchange, combination, sale, transfer,
conveyance, dissolution, liquidation or winding up is expected to
become effective, and the date as of which it is expected that holders
of Common Stock of record shall be entitled to exchange their shares
of Common Stock for securities, cash or other property deliverable
upon such reclassification, merger, consolidation, statutory share
exchange, sale, transfer, dissolution, liquidation or winding up.
Neither the failure to give such notice nor any defect therein shall
affect the legality or validity of the proceedings or actions described in
clauses (1) through (4) of this Section 10.06.
SECTION 10.07 Company to Reserve Common Stock. The Company shall at
-------------------------------
all times use its best efforts to reserve and keep available, free from
preemptive rights, out of its authorized but unissued Common Stock, for the
purpose of effecting the conversion of Notes, the full number of shares of fully
paid and nonassessable Common Stock then issuable upon the conversion of all
Notes outstanding.
SECTION 10.08 Taxes on Conversions. Except as provided in the next
--------------------
sentence, the Company will pay any and all taxes (other than taxes on income)
and duties that may be payable in respect of the issue or delivery of shares of
Common Stock on conversion of Notes pursuant hereto. A Holder delivering a Note
for conversion shall be liable for and will be required to pay any tax or duty
which may be payable in respect of any transfer involved in the issue and
delivery of shares of Common Stock in a name other than that of the Holder of
the Note or Notes to be converted, and no such issue or delivery shall be made
unless the Person requesting such issue has paid to the Company the amount of
any such tax or duty, or has established to the satisfaction of the Company that
such tax or duty has been paid.
SECTION 10.09 Covenant as to Common Stock. The Company covenants that
---------------------------
all shares of Common Stock which may be issued upon conversion of Notes will
upon issue be fully paid and nonassessable and, except as provided in Section
10.08, the Company will pay all taxes, liens and charges with respect to the
issue thereof.
65
SECTION 10.10 Cancellation of Converted Notes. All Notes delivered
-------------------------------
for conversion shall be delivered to the Trustee to be canceled by or at the
direction of the Trustee, which shall dispose of the same as provided in Section
2.10.
SECTION 10.11 Effect of Reclassification, Consolidation, Merger or
----------------------------------------------------
Sale. If any of following events occur, namely:
----
(1) any reclassification or change of the 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),
(2) any merger, consolidation, statutory share exchange 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
(3) 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,
the Company or the successor or purchasing corporation, as the case may be,
shall execute with the Trustee a supplemental indenture (which shall comply with
the TIA as in force at the date of execution of such supplemental indenture if
such supplemental indenture is then required to so comply) providing that such
Note shall be convertible into the kind and amount of shares of stock and other
securities or property or assets (including cash) which such Holder would have
been entitled to receive upon such reclassification, change, merger,
consolidation, statutory share exchange, combination, sale or conveyance had
such Notes been converted into Common Stock immediately prior to such
reclassification, change, merger, consolidation, statutory share exchange,
combination, sale or conveyance assuming such holder of Common Stock did not
exercise its rights of election, if any, as to the kind or amount of securities,
cash or other property receivable upon such reclassification, change, merger,
consolidation, statutory share exchange, combination, sale or conveyance
(provided that, if the kind or amount of securities, cash or other property
receivable upon such reclassification, change, merger, consolidation, statutory
share exchange, combination, sale or conveyance is not the same for each share
of Common Stock in respect of which such rights of election shall not have been
exercised ("Non-Electing Share"), then for the purposes of this Section 10.11
the kind and amount of securities, cash or other property receivable upon such
reclassification, change, merger, consolidation, statutory share exchange,
combination, sale or conveyance for each Non-Electing Share shall be deemed to
be the kind and amount so receivable per share by a plurality of the Non-
Electing Shares). Such supplemental indenture shall provide for adjustments
which shall be as nearly equivalent as may be practicable to the adjustments
provided for in this Article 10. If, in the case of any such reclassification,
change, merger, consolidation, statutory share exchange, combination, sale or
conveyance, the stock or other securities and assets receivable thereupon by a
holder of shares of Common Stock includes shares of stock or other securities
and assets of a corporation other than the successor or purchasing corporation,
as the case may be, in such reclassification, change, merger, consolidation,
statutory share exchange, combination, sale or conveyance, then such
66
supplemental indenture shall also be executed by such other corporation and
shall contain such additional provisions to protect the interests of the Holders
of the Notes as the Board of Directors shall reasonably consider necessary by
reason of the foregoing, including to the extent practicable the provisions
providing for the repurchase rights set forth in Section 3.10 hereof.
The Company shall cause notice of the execution of such supplemental
indenture to be mailed to each Holder, at the address of such Holder as it
appears on the Register, within 20 days after execution thereof. Failure to
deliver such notice shall not affect the legality or validity of such
supplemental indenture.
The above provisions of this Section 10.11 shall similarly apply to
successive reclassifications, mergers, consolidations, statutory share
exchanges, combinations, sales and conveyances.
If this Section 10.11 applies to any event or occurrence, Section
10.04 hereof shall not apply.
SECTION 10.12 Adjustment for Other Distributions. If, after the Issue
----------------------------------
Date of the Securities, the Company pays a dividend or makes a distribution to
all holders of its Common Stock consisting of Capital Stock of any class or
series, or similar equity interests, of or relating to a Subsidiary or other
business unit of the Company, the Conversion Price shall be adjusted in
accordance with the formula:
P' = P x 1/(1 + F/M)
where:
P' = the adjusted Conversion Price.
P = the current Conversion Price.
M = the average of the Post-Distribution Prices of the Common Stock for
the 10 trading days commencing on and including the fifth trading day after the
date on which "ex-dividend trading" commences for such dividend or distribution
on the principal United States exchange or market which such securities are then
listed or quoted (the "Ex-Dividend Date").
F = the fair market value of the securities distributed in respect of each
share of Common Stock shall mean the number of securities distributed in respect
of each share of Common Stock multiplied by the average of the Post-Distribution
Prices of those securities distributed for the 10 trading days commencing on and
including the fifth trading day after the Ex-Dividend Date.
"Post-Distribution Price" of Capital Stock or any similar equity interest
on any date means the closing per unit sale price (or, if no closing sale price
is reported, the average of the bid and ask prices or, if more than one in
either case, the average of the average bid and the average ask prices) on such
date for trading of such units on a "when issued" basis without due bills (or
similar concept) as reported in the composite transactions for the principal
United States securities exchange on which such Capital Stock or equity interest
is traded or, if the Capital Stock or equity interest, as the case may be, is
not listed on a United States national or regional securities exchange, as
reported by the National Association of Securities Dealers Automated
67
Quotation System or by the National Quotation Bureau Incorporated; provided that
if on any date such units have not traded on a "when issued" basis, the Post-
Distribution Price shall be the closing per unit sale price (or, if no closing
sale price is reported, the average of the bid and ask prices or, if more than
one in either case, the average of the average bid and the average ask prices)
on such date for trading of such units on a "regular way" basis without due
bills (or similar concept) as reported in the composite transactions for the
principal United States securities exchange on which such Capital Stock or
equity interest is traded or, if the Capital Stock or equity interest, as the
case may be, is not listed on a United States national or regional securities
exchange, as reported by the National Association of Securities Dealers
Automated Quotation System or by the National Quotation Bureau Incorporated. In
the absence of such quotation, the Company shall be entitled to determine the
Post-Distribution Price on the basis of such quotations, which reflect the post-
distribution value of the Capital Stock or equity interests as it considers
appropriate.
SECTION 10.13 Responsibility of Trustee for Conversion Provisions.
---------------------------------------------------
The Trustee, subject to the provisions of Section 7.01 hereof, and any
Conversion Agent shall not at any time be under any duty or responsibility to
any Holder of Notes to determine whether any facts exist which may require any
adjustment of the Conversion Price, or with respect to the nature or intent of
any such adjustments when made, or with respect to the method employed, or
herein or in any supplemental indenture provided to be employed, in making the
same. Neither the Trustee, subject to the provisions of Section 7.01 hereof, nor
any Conversion Agent shall be accountable with respect to the validity or value
(of the kind or amount) of any Common Stock, or of any other securities or
property, which may at any time be issued or delivered upon the conversion of
any Note; and it or they do not make any representation with respect thereto.
Neither the Trustee, subject to the provisions of Section 7.01 hereof, nor any
Conversion Agent shall be responsible for any failure of the Company to make any
cash payment or to issue, transfer or deliver any shares of stock or share
certificates or other securities or property upon the surrender of any Note for
the purpose of conversion; and the Trustee, subject to the provisions of Section
7.01 hereof, and any Conversion Agent shall not be responsible or liable for any
failure of the Company to comply with any of the covenants of the Company
contained in this Article.
ARTICLE 11
SUBORDINATION
SECTION 11.01 Agreement to Subordinate. The Company agrees, and each
------------------------
Holder by accepting a Note agrees, that the Indebtedness, interest and other
obligations of any kind evidenced by the Notes and this Indenture are
subordinated in right of payment, to the extent and in the manner provided in
this Article 11, to the prior payment in full in cash or cash equivalents of all
Senior Indebtedness (whether outstanding on the date hereof or hereafter
created, incurred, assumed or guaranteed), and that the subordination is for the
benefit of the holders of Senior Indebtedness.
SECTION 11.02 Liquidation; Dissolution; Bankruptcy. In the event of
------------------------------------
any insolvency or bankruptcy case or proceeding, or any receivership,
liquidation, reorganization or other similar case or proceeding in connection
therewith, relating to the Company or to its assets, or any liquidation,
dissolution or other winding-up of the Company, whether voluntary or
68
involuntary, or any assignment for the benefit of creditors or other marshaling
of assets or liabilities of the Company (except in connection with the
consolidation or merger of the Company or its liquidation or dissolution
following the conveyance, transfer or lease of its properties and assets
substantially as an entirety upon the terms and conditions described in Article
5), the holders of Senior Indebtedness will be entitled to receive payment in
full of all Senior Indebtedness, or provision shall be made for such payment in
full, before the Noteholders will be entitled to receive any payment or
distribution of any kind or character (other than any payment or distribution in
the form of equity securities or subordinated securities of the Company or any
successor obligor that, in the case of any such subordinated securities, are
subordinated in right of payment to all Senior Indebtedness that may at the time
be outstanding to at least the same extent as the Notes are so subordinated
(such equity securities or subordinated securities hereinafter being "Permitted
Junior Securities")) on account of principal of, or premium, if any, or
additional interest, if any, or interest on the Notes; and any payment or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities (other than a payment or distribution in the form of
Permitted Junior Securities), by set-off or otherwise, to which the Noteholders
or the Trustee would be entitled but for the provisions of this Article 11 shall
be paid by the liquidating trustee or agent or other person making such payment
or distribution, whether a trustee in bankruptcy, a receiver or liquidating
trustee or otherwise, directly to the holders of Senior Indebtedness or their
representative or representatives ratably according to the aggregate amounts
remaining unpaid on account of the Senior Indebtedness to the extent necessary
to make payment in full of all Senior Indebtedness remaining unpaid, after
giving effect to any concurrent payment or distribution to the holders of such
Senior Indebtedness.
SECTION 11.03 Default on Designated Senior Indebtedness. (a) No
------------------------------------------
payment or distribution of any assets of the Company of any kind or character,
whether in cash, property or securities (other than Permitted Junior
Securities), may be made by or on behalf of the Company on account of principal
of, premium, if any, or interest on the Notes or on account of the purchase,
redemption or other acquisition of Notes upon the occurrence of any default in
payment (whether at Stated Maturity, upon scheduled installment, by acceleration
or otherwise) of principal of, premium, if any, or interest on Designated Senior
Indebtedness beyond any applicable grace period (a "Payment Default") until such
Payment Default shall have been cured or waived in writing or shall have ceased
to exist or such Designated Senior Indebtedness shall have been discharged or
paid in full in cash or cash equivalents.
(b) No payment or distribution of any assets of the Company of any
kind or character, whether in cash, property or securities (other than
Permitted Junior Securities), may be made by or on behalf of the Company on
account of principal of, premium, if any, or interest on the Notes or on
account of the purchase, redemption or other acquisition of Notes for the
period specified below (a "Payment Blockage Period") upon the occurrence of
any default or event of default with respect to any Designated Senior
Indebtedness other than any Payment Default pursuant to which the maturity
thereof may be accelerated (a "Non-Payment Default") and receipt by the
Trustee of written notice thereof from the trustee or other representative
of holders of Designated Senior Indebtedness.
The Payment Blockage Period will commence upon the date of receipt by
the Trustee of written notice from the trustee or such other representative of
the holders of the
69
Designated Senior Indebtedness in respect of which the Non-Payment Default
exists and shall end on the earliest of:
(i) 179 days thereafter (provided that any Designated Senior
Indebtedness as to which notice was given shall not theretofore have been
accelerated);
(ii) the date on which such Non-Payment Default is cured, waived or
ceases to exist;
(iii) the date on which such Designated Senior Indebtedness is
discharged or paid in full; or
(iv) the date on which such Payment Blockage Period shall have been
terminated by written notice to the Trustee or the Company from the trustee
or such other representative initiating such Payment Blockage Period,
after which the Company will resume making any and all required payments in
respect of the Notes, including any missed payments. In any event, not more
than one Payment Blockage Period may be commenced during any period of 365
consecutive days. No Non-Payment Default that existed or was continuing on the
date of the commencement of any Payment Blockage Period will be, or can be made,
the basis for the commencement of a subsequent Payment Blockage Period, unless
such Non-Payment Default has been cured or waived for a period of not less than
90 consecutive days subsequent to the commencement of such initial Payment
Blockage Period.
SECTION 11.04 Acceleration of Notes. If payment of the Notes is
---------------------
accelerated because of an Event of Default, the Company shall promptly notify
holders of Senior Indebtedness of the acceleration.
SECTION 11.05 When Distribution Must Be Paid Over. In the event that,
-----------------------------------
notwithstanding the provisions of Sections 11.02 and 11.03, any payment or
distribution of any kind or character, whether in cash, property or securities,
shall be received by the Trustee or any Noteholder which is prohibited by such
provisions, then and in such event such payment shall be held in trust for the
benefit of, and shall be paid over and delivered by such Trustee or Noteholder
to, the trustee or any other representative of holders of Senior Indebtedness,
as their interest may appear, for application to Senior Indebtedness remaining
unpaid until all such Senior Indebtedness has been paid in full in cash or cash
equivalents after giving effect to any concurrent distribution to or for the
holders of Senior Indebtedness.
With respect to the holders of Senior Indebtedness, the Trustee
undertakes to perform only such obligations on the part of the Trustee as are
specifically set forth in this Article 11, and no implied covenants or
obligations with respect to the holders of Senior Indebtedness shall be read
into this Indenture against the Trustee. The Trustee shall not be deemed to owe
any fiduciary duty to the holders of Senior Indebtedness, and shall not be
liable to any such holders if the Trustee shall pay over or distribute to or on
behalf of Noteholders or the Company or any other Person money or assets to
which any holders of Senior Indebtedness shall be entitled by virtue of this
Article 11, except if such payment is made as a result of the willful misconduct
or gross negligence of the Trustee.
70
SECTION 11.06 Notice by the Company. The Company shall promptly
---------------------
notify the Trustee and the Paying Agent of any facts known to the Company that
would cause a payment of any obligations with respect to the Notes to violate
this Article 11, but failure to give such notice shall not affect the
subordination of the Notes to the Senior Indebtedness as provided in this
Article 11.
SECTION 11.07 Subrogation. After all Senior Indebtedness is paid in
------------
full and until the Notes are paid in full, Noteholders shall be subrogated
(equally and ratably with all other Indebtedness that is equal in right of
payment to the Notes) to the rights of holders of Senior Indebtedness to receive
distributions applicable to Senior Indebtedness to the extent that distributions
otherwise payable to the Noteholders have been applied to the payment of Senior
Indebtedness. A distribution made under this Article 11 to holders of Senior
Indebtedness that otherwise would have been made to Noteholders is not, as
between the Company and Noteholders, a payment by the Company of the Notes.
SECTION 11.08 Relative Rights. This Article 11 defines the relative
---------------
rights of Holders and holders of Senior Indebtedness. Nothing in this Indenture
shall: (i) impair, as between the Company and Holders, the obligation of the
Company, which is absolute and unconditional, to pay principal of and interest
on the Notes in accordance with their terms; (ii) affect the relative rights of
Holders and creditors of Holdings other than their rights in relation to holders
of Senior Indebtedness; or (iii) prevent the Trustee or any Holder from
exercising its available remedies upon a Default or Event of Default, subject to
the rights of holders and owners of Senior Indebtedness to receive distributions
and payments otherwise payable to Holders of Notes. If the Company fails because
of this Article 11 to pay principal of or interest on a Note on the Stated
Maturity date, the failure is still a Default or Event of Default.
SECTION 11.09 Subordination May Not Be Impaired by the Company. No
------------------------------------------------
right of any holder of Senior Indebtedness to enforce the subordination of the
Indebtedness evidenced by the Notes shall be impaired by any act or failure to
act by the Company or any Holder or by the failure of the Company or any Holder
to comply with this Indenture.
Without in any way limiting the generality of this Section 11.09, the
holders of Senior Indebtedness may, at any time and from time to time, without
the consent of or notice to the Trustee or the Holders, without incurring
responsibility to the Trustee or the Holders and without impairing or releasing
the subordination provided in this Article 11 or the obligations hereunder of
the Holders to the holders of Senior Indebtedness, do any one or more of the
following: (a) change the manner, place or terms of payment or extend the time
of payment of, or renew or alter, Senior Indebtedness, the Senior Credit
Agreement or any instrument evidencing the same or any agreement under which
Senior Indebtedness is outstanding or secured; (b) sell, exchange, release,
foreclose against or otherwise deal with any property pledged, mortgaged or
otherwise securing Senior Indebtedness; (c) release any Person liable in any
manner for the collection of Senior Indebtedness; and (d) exercise or refrain
from exercising any rights against the Company, and Subsidiary thereof or any
other Person.
SECTION 11.10 Distribution or Notice to Representative. Whenever a
----------------------------------------
distribution is to be made or a notice given to holders of any Senior
Indebtedness, the distribution may be made and the notice given to their
representative.
71
Upon any payment or distribution of assets of the Company referred to
in this Article 11, the Trustee and the Holders of Notes shall be entitled to
rely upon any order or decree made by any court of competent jurisdiction or
upon any certificate of such representative(s) or of the liquidating trustee or
agent or other Person making any distribution to the Trustee or to the Holders
for the purpose of ascertaining the Persons entitled to participate in such
distribution, all holders of the 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
11.
SECTION 11.11 Rights of Trustee and Paying Agent. Notwithstanding the
----------------------------------
provisions of this Article 11 or any other provision of this Indenture, the
Trustee shall not be charged with knowledge of the existence of any facts that
would prohibit the making of any payment or distribution by the Trustee, and the
Trustee and the Paying Agent may continue to make payments on the Notes, unless
a Responsible Officer of the Trustee shall have received at its Corporate Trust
Office at least three Business Days prior to the date of such payment written
notice of facts that would cause the payment of any obligations with respect to
the Notes to violate this Article 11. Only the Company or representative may
give the notice. Nothing in this Article 11 shall impair the claims of, or
payments to, the Trustee under or pursuant to Section 7.06.
The Trustee in its individual or any other capacity may hold Senior
Indebtedness with the same rights it would have if it were not Trustee. Any
Agent may do the same with like rights.
ARTICLE 12
MISCELLANEOUS
SECTION 12.01 Trust Indenture Act Controls. If any provision of this
----------------------------
Indenture limits, qualifies, or conflicts with another provision which is
required to be included in this Indenture by the TIA, the required provision
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 guaranteed overnight courier) to the
following facsimile numbers:
if to the Company:
ResMed Inc.
14040 Danielson Street
Poway, CA 92064
Telephone No. (858) 746-2212
Facsimile No. (858) 746-2830
Attention: General Counsel
72
if to the Trustee:
American Stock Transfer & Trust Company
59 Maiden Lane
New York, New York 10038
Attention: Corporate Trust Department
Telephone No. (718) 921-8209
Facsimile No. (718) 331-1852
The Company or the Trustee by notice given to the other in the manner
provided above may designate additional or different addresses for subsequent
notices or communications.
Any notice or communication given to a Noteholder shall be mailed to
the Noteholder, by first-class mail, postage prepaid, at the Noteholder'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 Noteholder or any
defect in it shall not affect its sufficiency with respect to other Noteholders.
If a notice or communication is mailed in the manner provided above, it is duly
given, whether or not received by the addressee.
If the Company mails a notice or communication to the Noteholders, 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.
-------------------------------------------
Noteholders may communicate pursuant to TIA Section 312(b) with other
Noteholders with respect to their rights under this Indenture or the Notes. 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.
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 person making such Officers' Certificate or
Opinion of Counsel has read such covenant or condition;
73
(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 person, he has made
such examination or investigation as is necessary to enable such person 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 person, such covenant or
condition has been complied with.
SECTION 12.06 Separability Clause. In case any provision in this
-------------------
Indenture or in the Notes shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
SECTION 12.07 Rules by Trustee, Paying Agent, Conversion Agent and
----------------------------------------------------
Registrar. The Trustee may make reasonable rules for action by or a meeting of
---------
Noteholders. The Registrar, Conversion Agent and the Paying Agent may make
reasonable rules for their functions.
SECTION 12.08 Legal Holidays. A "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 day that is not
a Legal Holiday, and, if the action to be taken on such date is a payment in
respect of the Notes, no interest, if any, shall accrue for the intervening
period.
SECTION 12.09 GOVERNING LAW. THIS INDENTURE AND THE NOTES WILL BE
-------------
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.
SECTION 12.10 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 Notes or this Indenture or for any
claim based on, in respect of or by reason of such obligations or their
creation. By accepting a Note, each Noteholder shall waive and release all such
liability. The waiver and release shall be part of the consideration for the
issue of the Notes.
SECTION 12.11 Successors. All agreements of the Company in this
----------
Indenture and the Notes shall bind its successor. All agreements of the Trustee
in this Indenture shall bind its successor.
SECTION 12.12 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.
74
IN WITNESS WHEREOF, the undersigned, being duly authorized, have
executed this Indenture on behalf of the respective parties hereto as of the
date first above written.
RESMED INC.
By: /s/ Peter C. Farrell
---------------------------
Name: Peter C. Farrell
Title: Chairman of the Board,
President and Chief Executive officer
AMERICAN STOCK TRANSFER &
TRUST COMPANY, as Trustee
By: /s/ Herbert J. Lemmer
---------------------------
Name: Herbert J. Lemmer
Title: Vice President
EXHIBIT A-1
[FORM OF FACE OF GLOBAL NOTE]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT
NOT IN PART, TO NOMINEES OF THE DEPOSITORY TRUST COMPANY, OR TO A SUCCESSOR
THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL
NOTE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET
FORTH IN ARTICLE TWO OF THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.
THIS NOTE AND THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION OF THIS
NOTE HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"), OR ANY STATE OR FOREIGN SECURITIES LAWS. NEITHER THIS
NOTE, THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION OF THIS NOTE NOR ANY
INTEREST OR PARTICIPATION HEREIN OR THEREIN MAY BE REOFFERED, SOLD, ASSIGNED,
TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF WITHIN THE UNITED
STATES OR TO, OR FOR THE BENEFIT OF, U.S. PERSONS, IN THE ABSENCE OF SUCH
REGISTRATION UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO,
REGISTRATION.
THE HOLDER OF THIS NOTE, BY ITS ACCEPTANCE HEREOF (1) REPRESENTS THAT (A)
IT IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT, OR (B) IT IS NOT A "U.S. PERSON" AS DEFINED IN RULE 902 OF
REGULATION S AND IS ACQUIRING THIS NOTE AND THE SHARES OF COMMON STOCK ISSUABLE
UPON CONVERSION IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S; (2)
AGREES THAT IT WILL NOT PRIOR TO THE DATE THAT IS TWO YEARS AFTER THE LATER OF
THE INITIAL ISSUANCE OF THE NOTE EVIDENCED HEREBY AND THE LAST DATE ON WHICH
RESMED INC. (THE "COMPANY") OR ANY "AFFILIATE" (AS DEFINED IN RULE 144 UNDER THE
SECURITIES ACT) OF THE COMPANY WAS THE OWNER OF THE NOTE (THE "RESTRICTION
TERMINATION DATE") RESELL OR OTHERWISE TRANSFER THE NOTE EVIDENCED HEREBY OR THE
COMMON STOCK ISSUED UPON CONVERSION OF SUCH NOTE EXCEPT (A) TO THE COMPANY OR
ANY SUBSIDIARY THEREOF, (B)
A-1-1
FOR SO LONG AS THE NOTES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A INSIDE
THE UNITED STATES, TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT
OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN
THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (C) OUTSIDE THE UNITED
STATES IN AN OFFSHORE TRANSACTION COMPLYING WITH RULE 904 OF REGULATION S, (D)
PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM REGISTRATION PROVIDED 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); AND (3) AGREES THAT IT WILL DELIVER TO
EACH PERSON TO WHOM THE NOTE EVIDENCED HEREBY IS TRANSFERRED (OTHER THAN A
TRANSFER PURSUANT TO CLAUSE 2(E) ABOVE) A NOTICE SUBSTANTIALLY TO THE EFFECT OF
THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF THE NOTE EVIDENCED HEREBY BEFORE
THE RESTRICTION TERMINATION DATE (OTHER THAN A TRANSFER PURSUANT TO CLAUSE 2(E)
ABOVE), THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH IN A TRANSFER
CERTIFICATE RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS NOTE TO
AMERICAN STOCK TRANSFER & TRUST COMPANY, AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS
APPLICABLE). THE HOLDER MUST, PRIOR TO SUCH TRANSFER (OTHER THAN A TRANSFER
PURSUANT TO CLAUSE 2(E) ABOVE), FURNISH TO AMERICAN STOCK TRANSFER & TRUST
COMPANY, AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS APPLICABLE), SUCH
CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS THE COMPANY MAY
REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. THIS LEGEND WILL BE REMOVED UPON ANY
TRANSFER OF THE NOTE EVIDENCED HEREBY PURSUANT TO CLAUSE 2(E) ABOVE OR UPON OR
AFTER THE RESTRICTION TERMINATION DATE.
[THE FOREGOING LEGEND MAY BE REMOVED FROM THIS NOTE ON SATISFACTION OF THE
CONDITIONS SPECIFIED IN THE INDENTURE.]
A-1-2
RESMED INC.
4% Convertible Subordinated Notes due 2006
CUSIP NO. ________
[If the Note is a Regulation S Global Note, delete the reference to CUSIP NO.
and replace it with:
ISIN NO. _________
No.:
Issue Date:
RESMED INC., a Delaware corporation, promises to pay to Cede & Co. or
registered assigns, the principal sum of [_______________] DOLLARS
($[_____________]) on [______________], 2006.
This Note shall bear interest as specified on the other side of this Note.
This Note is convertible as specified on the other side of this Note.
Additional provisions of this Note are set forth on the other side of this
Note.
Dated: _____________ RESMED INC.
By______________________
Name:
Title:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
[_______________________________],
as Trustee, certifies that this
is one of the Notes referred
to in the within-mentioned Indenture (as
defined on the other side of this Note).
By_____________________________
Authorized Signatory
Dated:______________________
A-1-3
[FORM OF REVERSE SIDE OF NOTE]
4% Convertible Subordinated Note due 2006
Capitalized terms used herein but not defined shall have the meanings
assigned to them in the Indenture unless otherwise indicated.
1. Cash Interest.
The Company promises to pay interest at the Interest Rate in cash on the
principal amount of this Note at the rate per annum of 4%. The Company will pay
cash interest semiannually in arrears on June 20 and December 20 of each year
(each an "Interest Payment Date") to Holders of record at the close of business
on June 5 and December 5 (whether or not a business day) (each a "Regular Record
Date"), as the case may be, immediately preceding such Interest Payment Date.
Cash interest on the Notes will accrue from the most recent date to which
interest has been paid or duly provided or, if no interest has been paid, from
the Issue Date. Cash interest will be computed on the basis of a 360-day year
of twelve 30-day months. The Company shall pay cash interest on overdue
principal, or if shares of Common Stock (or cash in lieu of fractional shares)
in respect of a conversion of this Note in accordance with the terms of Article
10 of the Indenture are not delivered when due, at the rate borne by the Notes
plus 1% per annum, and it shall pay interest in cash on overdue installments of
cash interest at the same rate to the extent lawful. All such overdue cash
interest shall be payable on demand.
In accordance with the terms of the Registration Rights Agreement, during
the first 90 days following a Registration Default (as defined in the
Registration Rights Agreement), the Interest Rate borne by the Notes shall be
increased by 0.25% on:
(A) the later of (i) the 91/st/ day after the earliest date of original
issuance of any of the Notes and (ii) October 2, 2001, if the Shelf
Registration Statement is not filed with the SEC; or
(B) the 151/st/ day following the earliest date of original issuance of any
of the Notes, if the Shelf Registration Statement is not declared
effective; or
(C) the day after the fifth business day after the Shelf Registration
Statement, previously declared effective, ceases to be effective or fails
to be usable, if a post-effective amendment (or report filed with the
Exchange Act) that cures the Shelf Registration Statement is not filed
during such five Business Day period; or
(D) the day after the 45/th/ or 90/th/ day, as the case may be, of any period
that the prospectus contained in the Shelf Registration Statement has
been suspended, if such suspension has not been terminated.
From and after the 91/st/ day following such Registration Default, the Interest
Rate borne by the Notes shall be increased by 0.50%. In no event shall the
Interest Rate borne by the Notes be increased by more than 0.50%
A-1-4
Any amount of additional interest will be payable in cash semiannually, in
arrears, on each Interest Payment Date and will cease to accrue on the date the
Registration Default is cured. The Holder of this Security is entitled to the
benefits of the Registration Rights Agreement.
2. Method of Payment.
Subject to the terms and conditions of the Indenture, the Company will make
payments in respect of the principal of, premium, if any, and cash interest on
this Note and in respect of Redemption Prices and Change in Control Repurchase
Prices to Holders who surrender Notes to a Paying Agent to collect such payments
in respect of the Notes. 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. A holder of Notes with an aggregate principal amount in
excess of $5,000,000 will be paid by wire transfer in immediately available
funds at the election of such holder. Any payment required to be made on any
day that is not a Business Day will be made on the next succeeding Business Day.
3. Paying Agent, Conversion Agent and Registrar.
Initially, American Stock Transfer & Trust Company (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 except that the Company will maintain
at least one Paying Agent in the State of New York, City of New York, Borough of
Manhattan, which shall initially be an office or agency of 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 Notes under an Indenture dated as of June 20, 2001
(the Indenture"), between the Company and the Trustee. The terms of the Notes
include those stated in the Indenture and those made part of the Indenture by
reference to the Trust Indenture Act of 1939, as in effect from time to time
(the "TIA"). Capitalized terms used herein and not defined herein have the
meanings ascribed thereto in the Indenture. The Notes are subject to all such
terms, and Noteholders are referred to the Indenture and the TIA for a statement
of those terms.
The Notes are general unsecured obligations of the Company limited to
$180,000,000 aggregate principal amount (subject to Section 2.07 of the
Indenture). The Indenture does not limit other indebtedness of the Company,
secured or unsecured.
5. Provisional Redemption.
The Notes may be redeemed at the election of the Company, as a whole or
from time to time in part on any date, upon not less than 20 nor more than 60
days' notice, at any time prior to June 20, 2004, at a Redemption Price equal to
$1,000 per $1,000 principal amount of the Notes plus accrued and unpaid
interest, if any, to but excluding the Provisional Redemption Date if (i) the
Closing Price of the Common Stock has exceeded 150% of the Conversion Price (as
such may be adjusted from time to time) then in effect for at least 20 Trading
Days in any consecutive
A-1-5
30-Trading Day period ending on the Trading Day prior to the Notice Date and
(ii) a registration statement covering resales of the Notes and Common Stock
issuable upon the conversion thereof is effective and available for use and is
expected to remain effective for the 30 days following the Provisional
Redemption Date.
Upon any such Provisional Redemption, the Company shall make the Make-Whole
Payment with respect to the Notes called for redemption to Holders on the Notice
Date in an amount equal to $166.67 per $1,000 principal amount of the Notes,
less the amount of any interest actually paid on such Notes prior to the
Provisional Redemption Date. The Company shall make the Make-Whole Payment in
cash on all Notes called for Provisional Redemption, including those Notes
converted into Common Stock between the Notice Date and the Provisional
Redemption Date.
6. Optional Redemption.
Except as provided above, this Note is not redeemable prior to June 22,
2004. This Note may be redeemed in whole or in part, upon not less than 30 nor
more than 60 days' notice, at any time on or after June 22, 2004, at the option
of the Company, at the redemption price (expressed as percentages of the
principal amount) set forth below if redeemed during the periods below, plus any
interest accrued but not paid prior to the Optional Redemption Date, if the
Closing Price of the Common Stock has exceeded 130% of the Conversion Price (as
defined in Article 10 of the Indenture and as such may be adjusted from time to
time) then in effect for at least 20 Trading Days in any consecutive 30-Trading
Day period ending on the Trading Day prior to the date of mailing of the notice
of optional redemption pursuant to Section 3.05 of the Indenture.
-----------------------------------------------------------------------------------------------
During the Twelve Months Commencing Redemption Prices
----------------------------------- -----------------
-----------------------------------------------------------------------------------------------
June 22, 2004 through June 19, 2005 101.6%
-----------------------------------------------------------------------------------------------
Thereafter 100.8%
-----------------------------------------------------------------------------------------------
If fewer than all the Notes are to be redeemed, the Trustee shall select
the particular Notes to be redeemed from the Outstanding Notes by the methods as
provided in the Indenture. If any Note selected for partial redemption is
converted in part before termination of the conversion right with respect to the
portion of the Note so selected, the converted portion of such Note shall be
deemed to be the portion selected for redemption (provided, however, that the
Holder of such Note so converted and deemed redeemed shall not be entitled to
any additional interest payment as a result of such deemed redemption than such
Holder would have otherwise been entitled to receive upon conversion of such
Note). Notes which have been converted during a selection of Notes to be
redeemed may be treated by the Trustee as Outstanding for the purpose of such
selection.
On and after the Redemption Date, interest ceases to accrue on Notes or
portions of Notes called for redemption, unless the Company defaults in the
payment of the Redemption Price and accrued and unpaid interest.
A-1-6
Notice of redemption will be given by the Company to the Holders as
provided in the Indenture.
No sinking fund is provided for the Notes.
7. Repurchase by the Company at the Option of the Holder.
If a Change in Control occurs, the Holder, at the Holder's option, shall
have the right, in accordance with the provisions of the Indenture, to require
the Company to repurchase the Notes (or any portion of the principal amount
hereof that is at least $1,000 or an integral multiple thereof, provided that
the portion of the principal amount of this Note to be outstanding after such
repurchase is at least equal to $1,000) at the Change in Control Repurchase
Price in cash, plus any interest accrued and unpaid to the Change in Control
Repurchase Date.
Subject to the conditions provided in the Indenture, the Company may elect
to pay the Change in Control Repurchase Price by delivering a number of shares
of Common Stock equal to (i) the Change in Control Repurchase Price divided by
(ii) 95% of the average of the Closing Prices per share for the five consecutive
Trading Days immediately preceding and including the third Trading Day prior to
the Change in Control Repurchase Date.
No fractional shares of Common Stock will be issued upon repurchase of any
Notes. Instead of any fractional share of Common Stock which would otherwise be
issued upon conversion of such Notes, the Company shall pay a cash adjustment as
provided in the Indenture.
A Change in Control Repurchase Notice will be given by the Company to the
Holders as provided in the Indenture. To exercise a repurchase right, a Holder
must deliver to the Trustee a written notice as provided in the Indenture.
Holders have the right to withdraw any Change in Control Repurchase Notice
by delivering to the Paying Agent a written notice of withdrawal in accordance
with the provisions of the Indenture.
8. Notice of Redemption.
Notice of a provisional redemption will be mailed at least 30 days but not
more than 60 days before the Redemption Date to each Holder of Notes to be
redeemed at the Holder's registered address. Notice of an optional redemption
will be mailed at least 20 days but not more than 60 days before the Redemption
Date to each Holder of Notes to be redeemed at the Holder's registered address.
If money sufficient to pay the Redemption Price of all Notes (or portions
thereof) to be redeemed on the Redemption Date is deposited with the Paying
Agent prior to or on the Redemption Date, immediately after such Redemption Date
interest ceases to accrue on such Notes or portions thereof. Notes in
denominations larger than $1,000 of principal amount may be redeemed in part but
only in integral multiples of $1,000 of principal amount.
9. Conversion.
Subject to the next two succeeding sentences, a Holder of a Note may
convert it into Common Stock of the Company at any time before the close of
business on June 20, 2006. If the
A-1-7
Note is called for redemption, the Holder may convert it at any time before the
close of business on the Business Day preceding the Redemption Date. A Note in
respect of which a Holder has delivered a Change in Control Repurchase Notice
exercising the option of such Holder to require the Company to purchase such
Note may be converted only if such notice of exercise is withdrawn in accordance
with the terms of the Indenture.
The initial Conversion Price shall be initially equal to $60.60 per share
of Common Stock, subject to adjustment in certain events described in the
Indenture. The Company shall pay a cash adjustment as provided in the Indenture
in lieu of any fractional share of Common Stock.
To convert a Note, a Holder must (1) complete and manually sign the
conversion notice below (or complete and manually sign a facsimile of such
notice) and deliver such notice to the Conversion Agent, (2) surrender the Note
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.
10. Conversion Arrangement on Call for Redemption.
Any Notes called for redemption, unless surrendered for conversion before
the close of business on the Redemption Date, may be deemed to be purchased from
the Holders of such Notes 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 Notes from the Holders, to convert them into Common
Stock of the Company and to make payment for such Notes to the Trustee in trust
for such Holders.
11. Denominations; Transfer; Exchange.
The Notes are in fully registered form, without coupons, in denominations
of $1,000 of principal amount and integral multiples of $1,000. A Holder may
transfer or exchange Notes 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 Notes selected
for redemption (except, in the case of a Note to be redeemed in part, the
portion of the Note not to be redeemed) or any Notes in respect of which a
Change in Control Repurchase Notice has been given and not withdrawn (except, in
the case of a Note to be purchased in part, the portion of the Note not to be
purchased) or any Notes for a period of 15 days before the mailing of a notice
of redemption of Notes to be redeemed.
12. Persons Deemed Owners.
The registered Holder of this Note may be treated as the owner of this Note
for all purposes.
13. Unclaimed Money or Notes.
The Trustee and the Paying Agent shall return to the Company upon written
request any money or Notes held by them for the payment of any amount with
respect to the Notes that
A-1-8
remains unclaimed for two years, subject to applicable unclaimed property law.
After return to the Company, Holders entitled to the money or Notes must look to
the Company for payment as general creditors unless an applicable abandoned
property law designates another person.
14. Amendment; Waiver.
Subject to certain exceptions set forth in the Indenture, (i) the Indenture
or the Notes may be amended with the written consent of the Holders of at least
a majority in aggregate principal amount of the Notes at the time outstanding
and (ii) certain Defaults may be waived with the written consent of the Holders
of a majority in aggregate principal amount of the Notes at the time
outstanding. Subject to certain exceptions set forth in the Indenture, without
the consent of any Noteholder, the Company and the Trustee may amend the
Indenture or the Notes to cure any ambiguity, omission, defect or inconsistency,
or to comply with Article 5 of the Indenture, to provide for uncertificated
Notes in addition to or in place of certificated Notes or to make any change
that does not adversely affect the rights of any Noteholder, or to comply with
any requirement of the SEC in connection with the qualification of the Indenture
under the TIA.
15. Defaults and Remedies.
Under the Indenture, Events of Default include (1) the Company fails to pay
when due the principal of or premium, if any, on any of the Notes at maturity,
upon redemption or exercise of a repurchase right or otherwise, whether or not
such payment is prohibited by Article 11 of the Indenture; (2) the Company fails
to pay an installment of interest (including liquidated damages, if any) on any
of the Notes that continues for 30 days after the date when due, whether or not
such payment is prohibited by Article 11 of the Indenture; (3) the Company fails
to deliver shares of Common Stock, together with cash in lieu of fractional
shares, when such Common Stock or cash in lieu of fractional shares is required
to be delivered upon conversion of a Note and such failure continues for 10 days
after such delivery date; (4) the Company fails to perform or observe any other
term, covenant or agreement contained in the Notes or the Indenture for a period
of 60 days after written notice of such failure, requiring the Company to remedy
the same, shall have been given to the Company by the Trustee or to the Company
and the Trustee by the Holders of at least 25% in aggregate principal amount of
the Notes then outstanding; (5) (A) one or more defaults in the payment of
principal of or premium, if any, on any of the Company's Indebtedness
aggregating $5.0 million or more, when the same becomes due and payable at the
scheduled maturity thereof, and such default or defaults shall have continued
after any applicable grace period and shall not have been cured or waived within
a 30-day period after the date of notice of such default or (B) any of the
Company's Indebtedness aggregating $5.0 million or more shall have been
accelerated or otherwise declared due and payable, or required to be prepaid or
repurchased (other than by regularly scheduled required prepayment) prior to the
scheduled maturity thereof and such acceleration is not rescinded or annulled
within a 30-day period after the date of such acceleration; and (6) certain
events of bankruptcy, insolvency or reorganization with respect to the Company
or any Significant Subsidiary or any Subsidiaries of the Company which in the
aggregate would constitute a Significant Subsidiary. If an Event of Default
(other than an Event of Default specified in clause (6) or (7) of Section 6.01
of the Indenture) occurs and is continuing, the Trustee, or the Holders of at
least 25% in aggregate principal amount of the Notes at the time outstanding,
may declare all the Notes to be due and payable immediately. Certain events of
bankruptcy or insolvency are Events of Default which
A-1-9
will result in the Notes becoming due and payable immediately upon the
occurrence of such Events of Default.
Noteholders may not enforce the Indenture or the Notes except as provided
in the Indenture. The Trustee may refuse to enforce the Indenture or the Notes
unless it receives reasonable indemnity or security. Subject to certain
limitations, Holders of a majority in aggregate principal amount of the Notes at
the time outstanding may direct the Trustee in its exercise of any trust or
power. The Trustee may withhold from Noteholders notice of any continuing
Default (except a Default in payment of amounts specified in clause (1) or (2)
above) if it determines that withholding notice is in their interests.
16. Subordination
The payment of principal of, premium, if any, and interest on the Notes
will be subordinated in right of payment, as set forth in the Indenture, to the
prior payment in full in cash or cash equivalents of all Senior Indebtedness
whether outstanding on the date of the Indenture or thereafter incurred.
17. Trustee Dealings with the Company.
Subject to certain limitations imposed by the TIA, the Trustee under the
Indenture, in its individual or any other capacity, may become the owner or
pledgee of Notes 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.
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 Notes or the
Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation. By accepting a Note, each Noteholder waives and
releases all such liability. The waiver and release are part of the
consideration for the issue of the Notes.
19. Authentication.
This Note shall not be valid until an authorized signatory of the Trustee
manually signs the Trustee's Certificate of Authentication on the other side of
this Note.
20. Abbreviations.
Customary abbreviations may be used in the name of a Noteholder or an
assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entireties), JT TEN (=joint tenants with right of survivorship and not as
tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors
Act).
A-1-10
21. GOVERNING LAW.
THE INDENTURE AND THIS NOTE WILL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
--------------------
The Company will furnish to any Noteholder upon written request and without
charge a copy of the Indenture which has in it the text of this Note in larger
type. Requests may be made to:
ResMed Inc.
14040 Danielson Street
Poway, CA 92064
Attention: General Counsel
A-1-11
ASSIGNMENT FORM CONVERSION NOTICE
To assign this Note, fill in the form To convert this Note into Common
below: Stock of the Company, check the box:
I or we assign and transfer this Note
to [_]
_____________________________________
_____________________________________ To convert only part of this Note,
state the principal amount to be
(Insert assignee's soc. sec. or tax converted (which must be $1,000 or an
ID no.) integral multiple of $1,000):
____________________________________ $__________________________
____________________________________
____________________________________ If you want the stock certificate
(Print or type assignee's name, made out in another person's name,
address and zip code) fill in the form below:
and irrevocably appoint _____________________________________
_____________________ agent to _____________________________________
transfer this Note on the books of (Insert other person's sec. or tax ID
the Company. The agent may no.)
substitute another to act for him. _____________________________________
_____________________________________
_____________________________________
_____________________________________
(Print or type other person's name,
address and zip code)
_____________________________________________________________________________
Date: _________________ Your Signature:________________________________
_____________________________________________________________________________
(Sign exactly as your name appears on the other side of this Note)
A-1-12
EXHIBIT A-2
[Form of Certificated Note]
THIS NOTE AND THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION OF THIS
NOTE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER THIS NOTE, THE SHARES
OF COMMON STOCK ISSUABLE UPON CONVERSION OF THIS NOTE NOR ANY INTEREST OR
PARTICIPATION HEREIN OR THEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED,
PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION
OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION.
THE HOLDER OF THIS NOTE, BY ITS ACCEPTANCE HEREOF, AGREES TO OFFER, SELL,
OR OTHERWISE TRANSFER SUCH NOTE, PRIOR TO THE DATE (THE "RESALE RESTRICTION
TERMINATION DATE"), WHICH IS TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUE
DATE HEREOF AND THE LAST DATE ON WHICH RESMED INC. (THE "COMPANY") OR ANY
AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS NOTE (OR ANY PREDECESSOR OF SUCH
NOTE) ONLY (A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, (B) FOR SO LONG AS THIS
NOTE AND THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION OF THIS NOTE ARE
ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON IT REASONABLY BELIEVES IS
A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHICH NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN
RELIANCE ON RULE 144A, (C) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN
DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (D) IN AN OFFSHORE TRANSACTION IN
ACCORDANCE WITH RULE 904 OF REGULATION S UNDER THE SECURITIES ACT OR (E)
PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT, SUBJECT TO THE COMPANY'S AND THE TRUSTEE'S RIGHTS PRIOR TO
ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (C), (D) OR (E) TO REQUIRE
THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION
SATISFACTORY TO EACH OF THEM, AND IN EACH OF THE FOREGOING CASES, A CERTIFICATE
OF TRANSFER IN THE FORM APPEARING ON THE OTHER SIDE OF THIS NOTE IS COMPLETED
AND DELIVERED BY THE TRANSFEROR TO THE TRUSTEE. THIS LEGEND WILL BE REMOVED UPON
THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.
[THE FOREGOING LEGEND MAY BE REMOVED FROM THIS NOTE ON SATISFACTION OF THE
CONDITIONS SPECIFIED IN THE INDENTURE.]
A-2-1
RESMED INC.
4% Convertible Subordinated Notes due 2006
CUSIP NO. ________
[If the Note is a Regulation S Global Note, delete the reference to CUSIP NO.
and replace it with:
ISIN NO. _________
No.:
Issue Date:
RESMED INC., a Delaware corporation, promises to pay to Cede & Co. or
registered assigns, the principal sum of [___________] DOLLARS ($[__________])
on [______________], 2006.
This Note shall bear interest as specified on the other side of this Note.
This Note is convertible as specified on the other side of this Note.
Additional provisions of this Note are set forth on the other side of this
Note.
Dated: RESMED INC.
By________________________________
Name:
Title:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
[_____________________________],
as Trustee, certifies that this
is one of the Notes referred
to in the within-mentioned Indenture (as
defined on the other side of this Note).
By__________________________________
Authorized Signatory
Dated: _____________________________
A-2-2
EXHIBIT B-1
Transfer Certificate
In connection with any transfer of any of the Notes within the period prior
to the expiration of the holding period applicable to the sales thereof under
Rule 144(k) under the Securities Act of 1933, as amended (the "Securities Act")
(or any successor provision), the undersigned registered owner of this Note
hereby certifies with respect to $____________ principal amount of the above-
captioned Notes presented or surrendered on the date hereof (the "Surrendered
Notes") for registration of transfer, or for exchange or conversion where the
Notes issuable upon such exchange or conversion are to be registered in a name
other than that of the undersigned registered owner (each such transaction being
a "transfer"), that such transfer complies with the restrictive legend set forth
on the face of the Surrendered Notes for the reason checked below:
[_] A transfer of the Surrendered Notes is made to the Company or any
subsidiaries; or
[_] The transfer of the Surrendered Notes complies with Rule 144A under
the U.S. Securities Act of 1933, as amended (the "Securities Act");
or
[_] The transfer of the Surrendered Notes is to an institutional
accredited investor, as described in Rule 501(a)(1), (2), (3) or
(7) of Regulation D under the Securities Act; or
[_] The transfer of the Surrendered Notes is pursuant to an effective
registration statement under the Securities Act, or
[_] The transfer of the Surrendered Notes is pursuant to an offshore
transaction in accordance with Rule 904 of Regulation S under the
Securities Act; or
[_] The transfer of the Surrendered Notes is pursuant to another
available exemption from the registration requirement of the
Securities Act.
and unless the box below is checked, the undersigned confirms that, to the
undersigned's knowledge, such Notes are not being transferred to an "affiliate"
of the Company as defined in Rule 144 under the Securities Act (an "Affiliate").
[_] The transferee is an Affiliate of the Company.
DATE: ____________________ ___________________________________
Signature(s)
(If the registered owner is a corporation, partnership or
fiduciary, the title of the Person signing on behalf of
such registered owner must be stated.)
B-1-1
EXHIBIT B-2
Form of Letter to Be Delivered by Accredited Investors
ResMed Inc.
14040 Danielson Street
Poway, CA 92064
Attention: General Counsel
American Stock Transfer & Trust Company
59 Maiden Lane
New York, NY 10038
Attention: Corporate Trust Department
Telephone No. (718) 921-8209
Facsimile No. (718) 331-1852
Dear Ladies and Gentlemen:
We are delivering this letter in connection with the proposed transfer of
$_____________ principal amount of the 4% Convertible Subordinated Notes due
2006 (the "Notes") of ResMed Inc. (the "Company"), which are convertible into
shares of the Company's Common Stock, $0.04 par value per share (the "Common
Stock").
We hereby confirm that:
(i) we are an "accredited investor" within the meaning of Rule
501(a)(1), (2) or (3) under the Securities Act of 1933, as amended (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");
(ii) the purchase of Notes by us is 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(a)(5)(A) of the Securities Act that is acquiring
Notes fiduciary for the account of one or more institutions for which we
exercise sole investment discretion;
(iii) we have such knowledge and experience in financial and
business matters that we are capable of evaluating the merits and risks of
purchasing Notes; and
(iv) we are not acquiring Notes with a view to distribution
thereof or with any present intention of offering or selling Notes or the
Common Stock issuable upon conversion thereof, except as permitted below;
provided that the disposition of our
B-2-1
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 Notes were originally offered and sold in a
transaction not involving any public offering within the United States within
the meaning of the Securities Act and that the Notes and the shares of Common
Stock (the "Notes") 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 Notes, that if in the future we decide to
resell or otherwise transfer such Notes prior to the date (the "Resale
Restriction Termination Date") which is two years after the later of the
original issuance of the Notes and the last date on which the Company or an
affiliate of the Company was the owner of the Note, such Notes may be resold or
otherwise transferred only (i) to the Company or any subsidiary thereof, or (ii)
for as long as the Notes are eligible for resale pursuant to Rule 144A, to a
person it reasonably believes is a "qualified institutional buyer" (as defined
in Rule 144A under the Securities Act) that purchases for its own account or for
the account of a qualified institutional buyer to which notice is given that the
transfer is being made in reliance on Rule 144A, or (iii) to an Institutional
Accredited Investor that is acquiring the Note for its own account, or for the
account of such Institutional Accredited Investor for investment purposes and
not with a view to, or for offer or sale in connection with, any distribution in
violation of the Securities Act, or (iv) pursuant to another available exemption
from registration under the Securities Act (if applicable), or (v) pursuant to a
registration statement which has been declared effective under the Securities
Act 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 Notes. We further agree to provide
any person purchasing any of the Notes other than pursuant to clause (v) above
from us a notice advising such purchaser that resales of such Notes are
restricted as stated herein. We understand that the trustee or the transfer
agent, as the case may be, for the Notes will not be required to accept for
registration of transfer any Notes pursuant to (iii) or (iv) above except upon
presentation of evidence satisfactory to the Company that the foregoing
restrictions on transfer have been complied with. We further understand that any
Notes 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 Notes 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.
B-2-2
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:
B-2-3
EXHIBIT B-3
Form of Letter to Be Delivered in Connection With Regulation S Transfers
ResMed Inc.
14040 Danielson Street
Poway, CA 92064
Attention: General Counsel
American Stock Transfer & Trust Company
59 Maiden Lane
New York, NY 10038
Attention: Corporate Trust Department
Dear Ladies and Gentlemen:
We are delivering this letter of representation in connection with our
purchase of 4% Convertible Subordinated Debentures Due 2006 (the "Notes") of
ResMed Inc., as described in the Offering Memorandum relating to such offering.
We hereby confirm that:
1. we are not a "U.S. person" within the meaning of Rule 902(k) of
Regulation S under the United States Securities Act of 1933 (the
"Securities Act");
2. the Notes are not being purchased on behalf of or for the account
or benefit of a "U.S. person;"
3. we agree to resell such Notes only in accordance with the
provisions of Rules 901 through 905 of Regulation S, pursuant to
registration under the Securities Act, or pursuant to an
available exemption from registration consistent with the
requirements of the Indenture, including the requirement that
Debentures generally be held only as interests in the Global
Note; and
4. we agree not to engage in hedging transactions with regard to the
Notes unless in compliance with the Securities Act.
We acknowledge that you, the Company, the Transfer Agent for the Notes and
others will rely upon our representations set forth herein, and we agree to
notify you promptly in writing if any of our representations herein ceases to be
accurate and complete.
B-3-1
THIS LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK.
________________________________________
(Name of Purchaser)
By:____________________________
Name:
Title:
Address:
B-3-2