EXHIBIT 4.1
EXECUTION COPY
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PEREGRINE SYSTEMS, INC.
$287,500,000
5 1/2% CONVERTIBLE SUBORDINATED NOTES DUE 2007
INDENTURE
Dated as of November 14, 2000
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STATE STREET BANK AND TRUST COMPANY OF CALIFORNIA, N.A.
Trustee
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TABLE OF CONTENTS
ARTICLE I. definitions; trust indenture act..................................................1
Section 1.01 Definitions.................................................................1
Section 1.02 Other Definitions...........................................................5
Section 1.03 Incorporation by Reference of Trust Indenture Act...........................6
Section 1.04 Rules of Construction.......................................................6
ARTICLE II. The NOTES........................................................................7
Section 2.01 Form and Dating.............................................................7
Section 2.02 Execution and Authentication................................................9
Section 2.03 Registrar and Paying Agent..................................................9
Section 2.04 Paying Agent to Hold Money in Trust.........................................9
Section 2.05 Holder Lists...............................................................10
Section 2.06 Transfer and Exchange......................................................10
Section 2.07 Replacement Notes..........................................................14
Section 2.08 Outstanding Notes..........................................................15
Section 2.09 Treasury Notes.............................................................15
Section 2.10 Temporary Notes; Global Notes..............................................15
Section 2.11 Cancellation...............................................................16
Section 2.12 Defaulted Interest.........................................................16
Section 2.13 CUSIP NUMBERS..............................................................16
ARTICLE III. Redemption.....................................................................16
Section 3.01 Notices to Trustee.........................................................16
Section 3.02 Selection of Notes to Be Redeemed..........................................17
Section 3.03 Notice of Redemption.......................................................17
Section 3.04 Effect of Notice of Redemption.............................................18
Section 3.05 Deposit of Redemption Price................................................18
Section 3.06 Notes Redeemed in Part.....................................................18
Section 3.07 Optional Redemption........................................................18
Section 3.08 Mandatory Redemption.......................................................18
Section 3.09 Change in Control Offer....................................................18
ARTICLE IV. Covenants.......................................................................20
Section 4.01 Payment of Notes...........................................................20
Section 4.02 Rule 144A Information Requests.............................................21
Section 4.03 Compliance Certificate.....................................................21
Section 4.04 Stay, Extension and Usury Laws.............................................21
Section 4.05 Corporate Existence........................................................22
Section 4.06 Taxes......................................................................22
Section 4.07 Change in Control..........................................................22
Section 4.08 [Intentionally Omitted]....................................................22
Section 4.09 Special Interest...........................................................22
ARTICLE V. Conversion.......................................................................23
Section 5.01 Conversion Privilege.......................................................23
Section 5.02 Conversion Procedure.......................................................23
Section 5.03 Fractional Shares..........................................................24
Section 5.04 Taxes on Conversion........................................................24
Section 5.05 Company to Provide Stock...................................................24
Section 5.06 Adjustment of Conversion Price.............................................24
Section 5.07 No Adjustment..............................................................27
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Section 5.08 Other Adjustments..........................................................27
Section 5.09 Adjustments for Tax Purposes...............................................28
Section 5.10 Notice of Adjustment.......................................................28
Section 5.11 Notice of Certain Transactions.............................................28
Section 5.12 Effect of Reclassifications, Consolidations, Mergers or Sales
on Conversion Privilege...................................................28
Section 5.13 Trustee's Disclaimer.......................................................29
ARTICLE VI. Subordination...................................................................29
Section 6.01 Agreement to Subordinate and Ranking.......................................29
Section 6.02 No Payment on Notes if Designated Senior Debt in Default...................30
Section 6.03 Distribution on Acceleration of Notes; Dissolution and
Reorganization; Subrogation of Notes......................................30
Section 6.04 Reliance by Senior Debt on Subordination Provisions........................33
Section 6.05 No Waiver of Subordination Provisions......................................33
Section 6.06 Trustee's Relation to Senior Debt..........................................33
Section 6.07 Other Provisions Subject Hereto............................................34
ARTICLE VII. Successors.....................................................................34
Section 7.01 Limitation on Merger, Sale or Consolidation................................34
ARTICLE VIII. Defaults and Remedies.........................................................35
Section 8.01 Events of Default..........................................................35
Section 8.02 Acceleration...............................................................36
Section 8.03 Other Remedies.............................................................37
Section 8.04 Waiver of Past Defaults....................................................37
Section 8.05 Control by Majority........................................................37
Section 8.06 Limitation on Suits........................................................37
Section 8.07 Rights of Holders to Receive Payment.......................................38
Section 8.08 Collection Suit by Trustee.................................................38
Section 8.09 Trustee May File Proofs of Claim...........................................38
Section 8.10 Priorities.................................................................38
Section 8.11 Undertaking for Costs......................................................38
ARTICLE IX. Trustee.........................................................................39
Section 9.01 Duties of Trustee..........................................................39
Section 9.02 Rights of Trustee..........................................................39
Section 9.03 Individual Rights of Trustee...............................................40
Section 9.04 Trustee's Disclaimer.......................................................40
Section 9.05 Notice of Defaults.........................................................40
Section 9.06 Reports by Trustee to Holders..............................................40
Section 9.07 Compensation and Indemnity.................................................41
Section 9.08 Replacement of Trustee.....................................................41
Section 9.09 Successor Trustee by Merger, Etc...........................................42
Section 9.10 Eligibility; Disqualification..............................................42
Section 9.11 Preferential Collection of Claims Against Company..........................42
ARTICLE X. Discharge of Indenture...........................................................43
Section 10.01 Termination of Company's Obligations.......................................43
Section 10.02 Repayment to Company.......................................................43
ARTICLE XI. Amendments, Supplements and Waivers.............................................43
Section 11.01 Without Consent of Holders.................................................43
Section 11.02 With Consent of Holders....................................................44
Section 11.03 Compliance with Trust Indenture Act........................................44
Section 11.04 Revocation and Effect of Consents..........................................44
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Section 11.05 Notation on or Exchange of Notes...........................................45
Section 11.06 Trustee Protected..........................................................45
ARTICLE XII. Miscellaneous..................................................................45
Section 12.01 Trust Indenture Act Controls...............................................45
Section 12.02 Notices....................................................................45
Section 12.03 Communication by Holders with Other Holders................................46
Section 12.04 Certificate and Opinion as to Conditions Precedent.........................46
Section 12.05 Statements Required in Certificate or Opinion..............................46
Section 12.06 Rules by Trustee and Agents................................................47
Section 12.07 Legal Holidays.............................................................47
Section 12.08 No Recourse Against Others.................................................47
Section 12.09 Counterparts and Facsimile Signatures......................................47
Section 12.10 Variable Provisions........................................................47
Section 12.11 Governing Law, submission to jurisdiction..................................48
Section 12.12 No Adverse Interpretation of Other Agreements..............................48
Section 12.13 Successors.................................................................48
Section 12.14 Severability...............................................................48
Section 12.15 Table of Contents, Headings, Etc...........................................48
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INDENTURE, dated as of November 14, 2000, between Peregrine Systems,
Inc., a Delaware corporation (the "Company"), and State Street Bank and Trust
Company of California, N.A., a national banking association, as trustee (the
"Trustee").
Each party agrees as follows for the benefit of the other party and for
the equal and ratable benefit of the Holders (as defined in Section 1.01
hereof) of the Company's 5 1/2% Convertible Subordinated Notes due 2007 (the
"Notes"):
ARTICLE I.
DEFINITIONS; TRUST INDENTURE ACT
SECTION 1.01 DEFINITIONS.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition,
"control" (including, with correlative meanings, the terms "controlling,"
"controlled by" and "under common control with"), as used with respect to any
Person, shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of such Person,
whether through the ownership of voting securities, by agreement or otherwise.
"Agent" means any Registrar, Paying Agent or Conversion Agent.
"Board of Directors" means the Board of Directors of the Company or
any authorized committee of the Board of Directors.
"Board Resolution" means a duly authorized resolution of the Board
of Directors.
"Business Day" means any day that is not a Legal Holiday.
"Capital Stock" means any and all shares, interests, participations,
rights or other equivalents, however designated, of corporate stock,
including, without limitation, partnership interests.
"Change in Control" means the occurrence of one or more of the following
events: (i) the Company merges with or into any other person, any other
person merges into the Company, or the Company conveys, sells, transfers or
leases all or substantially all of its assets to another person, other than
any such transaction pursuant to which the holders of 50% or more of the
total voting power of all shares of the Company's capital stock entitled to
vote generally in elections of directors immediately prior to such
transaction have the entitlement to exercise, directly or indirectly, 50% or
more of the total voting power of all shares of capital stock entitled to
vote generally in the election of directors of the continuing or surviving
corporation immediately after such transaction; (ii) the approval by the
holders of capital stock of the Company of any plan or proposal for the
liquidation or dissolution of the Company (whether or not otherwise in
compliance with the provisions of this Indenture); (iii) any person or group
of related persons, as defined in Section 13(d) of the Securities Exchange
Act of 1934 (Exchange Act) (a "Group"), shall become the owner, directly or
indirectly, beneficially or of record, of shares representing more than 50%
of the aggregate ordinary voting power represented by the Company's issued
and outstanding voting stock of, or any successor to, all or substantially
all of the Company's assets; or (iv) the first day on which a majority of
the members of the Company's board of directors are not Continuing Directors.
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However, a Change in Control will not be deemed to have occurred if, in
the case of a merger or consolidation, all of the consideration, excluding
cash payments for fractional shares, in the merger or consolidation
constituting the Change in Control consists of common stock traded on a
United States national securities exchange or quoted on the Nasdaq National
Market (or which will be so traded or quoted when issued or exchanged in
connection with such Change in Control) and as a result of such transactions
the Notes become convertible solely into such common stock.
"Common Stock" means the common stock, par value $0.001 per share, of
the Company as the same exists at the date of the execution of this Indenture
or as such stock may be constituted from time to time.
"Company" means the party named as such above until a successor replaces
it in accordance with Article VII and thereafter means the successor.
"CONTINUING DIRECTOR" means, as of any date of determination, any member
of the Board of Directors who (i) was a member of such Board of Directors on
the Issuance Date or (ii) was nominated for election or elected to such Board
of Directors with the approval of a majority of the Continuing Directors who
were members of such Board of Directors at the time of such nomination or
election.
"Credit Agreement" means the credit agreement, dated as of July 30,
1999, by and among the Company, Bank of America, N.A., as Administrative
Agent, Banc of America Securities LLC, as Sole Lead Arranger and Sole Book
Manager and BankBoston, N.A., as Syndication Agent, as amended from time to
time, and all refundings, refinancings and replacements of any Credit
Agreement.
"Daily Market Price" means the price of a share of Common Stock on the
relevant date, determined (a) on the basis of the daily closing or last
reported sale price regular way of the Common Stock as reported on the Nasdaq
National Market, or if the Common Stock is not then listed on the Nasdaq
National Market, as reported on such national securities exchange upon which
the Common Stock is listed, or (b) if there is no such reported sale on the
day in question, on the basis of the average of the closing bid and asked
quotations regular way as so reported, or (c) if the Common Stock is not
listed on the Nasdaq National Market or on any national securities exchange,
on the basis of the average of the high bid and low asked quotations regular
way on the day in question in the over-the-counter market as reported by the
National Association of Securities Dealers Automated Quotation System, or if
not so quoted, as reported by National Quotation Bureau, Incorporated, or a
similar organization.
"Default" means any event that is, or with the passage of time or the
giving of notice or both would be, an Event of Default.
"Depositary" shall mean The Depository Trust Company, its nominees and
their respective successors.
"Designated Senior Debt" means (1) any Indebtedness outstanding under
the Credit Agreement and (2) the Company's obligations under any particular
Senior Debt in which the instrument creating or evidencing the same or the
assumption or Guarantee thereof, or related agreements or documents to which
the Company is a party, expressly provides that such indebtedness shall be
Designated Senior Debt for purposes of this Indenture. The instrument,
agreement or other document evidencing any Designated Senior Debt may place
limitations and conditions on the right of such Senior Debt to exercise the
rights of Designated Senior Debt pursuant Article VI hereof.
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"Excess Payment" means the excess of (A) the aggregate of the cash and
value of other consideration paid by the Company or any of its Subsidiaries with
respect to shares acquired in a tender offer or other negotiated transaction
over (B) the market value of such acquired shares after giving effect to the
completion of a tender offer or other negotiated transaction.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as approved by a significant segment of the accounting profession,
which are in effect on the Issuance Date and are applied on a consistent basis.
"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" means a Person in whose name a Note is registered in the register
referred to in Section 2.03.
"Indebtedness" means (i) all of the Company's indebtedness, obligations and
other liabilities, contingent or otherwise, for borrowed money, including (a)
overdrafts, foreign exchange contracts, currency exchange agreements, interest
rate protection agreements and any loans or advances from banks, whether or not
evidenced by notes or similar instruments, or (b) evidenced by bonds,
debentures, notes or similar instruments, whether or not the recourse of the
lender is to all of the Company's assets or to only a portion thereof, other
than any account payable or other accrued current liability or obligation
incurred in the ordinary course of business in connection with the obtaining of
materials or services; (ii) all of the Company's reimbursement obligations and
other liabilities, contingent or otherwise, with respect to letters of credit,
bank guarantees or banker's acceptances; (iii) all of the Company's obligations
and liabilities, contingent or otherwise, in respect of leases required, in
conformity with GAAP, to be accounted for as capitalized lease obligations on
the Company's balance sheet, or under other leases for facilities equipment or
related assets, whether or not capitalized, entered into or leased for financing
purposes, as determined by the Company; (iv) all of the Company's obligations
and other liabilities, contingent or otherwise, under any lease or related
document, including a purchase agreement, in connection with the lease of real
property or improvements (or any personal property included as part of any such
lease) which provides that the Company be contractually obligated to purchase or
cause a third party to purchase the leased property and thereby Guarantee a
residual value of leased property to the lessor and all of the Company's
obligations under such lease or related document to purchase or to cause a third
party to purchase the leased property (whether or not such lease transaction is
characterized as an operating lease or a capitalized lease in accordance with
GAAP); (v) all of the Company's obligations, contingent or otherwise, with
respect to an interest rate, currency or other swap, cap, floor or collar
agreement, hedge agreement, forward contract or other similar instrument or
agreement or foreign currency hedge, exchange, purchase or similar instrument or
agreement; (vi) all of the Company's direct or indirect Guarantees or similar
agreements to purchase or otherwise acquire or otherwise assure a creditor
against loss in respect of indebtedness, obligations or liabilities of another
person of the kind described in clauses (i) through (v); and (vii) any
indebtedness or other obligations described in clauses (i) through (vi) secured
by any mortgage, pledge, lien or other encumbrance existing on property which is
owned or held by the Company, regardless of whether the indebtedness or other
obligation secured thereby has been assumed by the Company.
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"Indenture" means this Indenture, as amended from time to time.
"Initial Purchasers" means Banc of America Securities LLC, Bear, Xxxxxxx &
Co. Inc. and Prudential Securities Incorporated.
"Interest Payment Date" means each semiannual interest payment date on May
15 and November 15 of each year commencing on May 15, 2001.
"Issuance Date" means the date on which the Notes are first
authenticated and issued.
"Nasdaq National Market" means the National Association of Securities
Dealers, Inc. Automated Quotation System National Market.
"Notes" has the meaning set forth in the preamble hereto.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"Officers' Certificate" means a certificate of the Company signed by the
Chairman of the Board, the President, the Chief Financial Officer, the Treasurer
or a Vice President of the Company.
"Opinion of Counsel" means a written opinion from legal counsel who is
reasonably acceptable to the Trustee. The counsel may be an employee of or
counsel to the Company or the Trustee.
"Permitted Junior Securities" means (a) shares of stock of any class of the
Company or (b) securities of the Company that are subordinated in right of
payment to all Senior Debt that may be outstanding at the time of issuance or
delivery of such securities to substantially the same extent as, or to a greater
extent than, the Notes are so subordinated pursuant to the terms of this
Indenture.
"Person" means any individual, corporation, partnership, joint venture,
association, joint stock company, trust, unincorporated organization, limited
liability company or government or any agency or political subdivision thereof.
"Purchase Agreement" means the Purchase Agreement, dated as of November 9,
2000, among the Company and the Initial Purchasers.
"Record Date" means each semiannual record date on May 1 and November 1 of
each year commencing on May 1, 2001.
"Registration Default" has the meaning set forth in the Registration Rights
Agreement.
"Registration Rights Agreement" means the Registration Rights Agreement
relating to the Notes and the underlying Common Stock, dated as of November 14,
2000, among the Company and the Initial Purchasers.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
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"Senior Debt" means the principal of, premium, if any, interest, including
all interest accruing subsequent to the commencement of any bankruptcy or
similar proceeding, whether or not a claim for post-petition interest is
allowable as a claim in any such proceeding, and rent payable on or in
connection with, and all fees, costs, expenses and other amounts accrued or due
on or in connection with, Indebtedness of the Company, whether outstanding on
the date of this Indenture or thereafter created, incurred, assumed, Guaranteed
or in effect Guaranteed by the Company, including all of the Company's
obligations under the Credit Agreement. Notwithstanding anything to the contrary
in the foregoing, Senior Debt shall not include (a) Indebtedness of or amounts
owed by the Company for compensation to employees, or for goods or materials
purchased or for services obtained in the ordinary course of business; (b) the
Company's Indebtedness to any of its Subsidiaries or (c) the Company's
Indebtedness that expressly provides that it shall not be senior in right of
payment to the Notes or expressly provides that it is on the same basis or
junior to the Notes.
"Shelf Registration Statement" shall have the meaning set forth in the
Registration Rights Agreement.
"Significant Subsidiary" means any Subsidiary of the Company that is a
"significant subsidiary" as defined in Rule 1-02(w) of Regulation S-X under the
Securities Act and the Exchange Act.
"Special Interest" has the meaning set forth in the Registration Rights
Agreement.
"Subsidiary" means any corporation, association or other business entity of
which more than 50% of the total voting power of shares of Capital Stock
entitled, without regard to the occurrence of any contingency, to vote in the
election of directors, managers or trustees thereof is at the time owned or
controlled, directly or indirectly, by any Person or one or more of the other
Subsidiaries of that Person or a combination thereof.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code xx.xx.
77aaa-77bbbb), as amended.
"Trustee" means the party named as such above until a successor replaces it
in accordance with the applicable provisions of this Indenture and thereafter
means the successor.
"Trust Officer" means any officer of the Trustee assigned by the Trustee to
administer its corporate trust matters.
SECTION 1.02 OTHER DEFINITIONS.
DEFINED
TERM IN SECTION
---- ----------
"Accredited Investor Restricted Notes"...... 2.01
"Agent Member".............................. 2.01
"Bankruptcy Law"............................ 8.01
"Change in Control Offer"................... 3.09
"Change in Control Payment"................. 4.07
"Clearstream"............................... 2.01
"Commencement Date"......................... 3.09
"Conversion Agent".......................... 2.03
"Conversion Date"........................... 5.02
"Conversion Price".......................... 5.01
"Conversion Shares"......................... 5.06
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"Custodian"................................. 8.01
"Distribution Date"......................... 5.06
"Distribution Record Date".................. 5.06
"Euroclear"................................. 2.01
"Event of Default".......................... 8.01
"Global Note"............................... 2.01
"Legal Holiday"............................. 12.08
"Non-Payment Default"....................... 6.02
"Offer Amount".............................. 3.09
"Officer"................................... 12.11
"Paying Agent".............................. 2.03
"Payment Blockage Notice"................... 6.02
"Payment Blockage Period"................... 6.02
"Payment Default"........................... 6.02
"Purchase Date"............................. 3.09
"QIBs"...................................... 2.01
"Regulation S".............................. 2.01
"Regulation S Global Note" ................. 2.01
"Registrar"................................. 2.03
"Restricted Notes".......................... 2.01
"Rights".................................... 5.06
"Rule 144A"................................. 2.01
"Rule 144A Global Note"..................... 2.01
"Tender Period"............................. 3.09
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:
"indenture securities" means the Notes;
"indenture security Holder" means a Holder of a Note;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee; and
"obligor" on the Notes means the Company or any other obligor on the
Notes.
All other terms used in this Indenture that are defined by the TIA, defined
by TIA reference to another statute or defined by SEC rule under the TIA have
the meanings so assigned to them.
SECTION 1.04 RULES OF CONSTRUCTION.
Unless the context otherwise requires:
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(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 GAAP consistently applied;
(c) "or" is not exclusive;
(d) words in the singular include the plural, and in the plural include the
singular;
(e) provisions apply to successive events and transactions;
(f) references to sections of or rules under the Securities Act shall be
deemed to include substitute, replacement or successor sections or rules adopted
by the SEC from time to time; and
(g) a reference to "$" or U.S. Dollars is to United States dollars.
ARTICLE II.
THE NOTES
SECTION 2.01 FORM AND DATING.
(a) General.
The Notes and the Trustee's certificate of authentication shall be
substantially in the form of Exhibit A hereto, which is hereby incorporated
by reference and expressly made a part of this Indenture. The Notes may have
notations, legends or endorsements required by law, stock exchange rule,
agreements to which the Company is subject, if any, or usage (provided that
any such notation, legend or endorsement is in a form acceptable to the
Company). The Company shall furnish any such legend not contained in Exhibit
A to the Trustee in writing. Each Note shall be dated the date of its
authentication. The Notes shall be in denominations of $1,000 and integral
multiples thereof. The terms and provisions of the Notes set forth in Exhibit
A are 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. However, to the
extent any provision of any Note conflicts with the express provisions of
this Indenture, the provisions of this Indenture shall govern and be
controlling.
(b) Global Notes.
The Notes are being offered and sold by the Company pursuant to the
Purchase Agreement.
Notes offered and sold in reliance on Regulation S under the
Securities Act ("Regulation S"), as provided in the Purchase Agreement, shall
be issued initially in the form of one or more permanent Global Notes in
definitive, fully registered form without interest coupons with the Global
Notes Legend and Restricted Notes Legend set forth in Exhibit A hereto (the
"Regulation S Global Note"), which shall be deposited on behalf of the
transferee of the Notes represented thereby with the Trustee, as custodian,
for the Depositary, and registered in the name of the Depositary or the
nominee of the Depositary for the accounts of designated agents holding on
behalf of the Euroclear System ("Euroclear") or Clearstream Banking
("Clearstream"), duly executed by the Company and authenticated by the
Trustee as hereinafter provided. 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 Trustee and the Depositary or its
nominee as hereinafter provided.
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Notes offered and sold to Qualified Institutional Buyers ("QIBs") in
reliance on Rule 144A under the Securities Act ("Rule 144A"), as provided in
the Purchase Agreement, shall be issued initially in the form of one or more
permanent Global Notes in definitive, fully registered form without interest
coupons with the Global Notes Legend and Restricted Notes Legend set forth in
Exhibit A hereto ("Rule 144A Global Note"), which shall be deposited on
behalf of the purchasers of the Notes represented thereby with the Trustee,
as custodian for the Depositary, and registered in the name of the Depositary
or a nominee of the Depositary, duly executed by the Company and
authenticated by the Trustee as hereinafter provided. The aggregate principal
amount of the Rule 144A Global Note may from time to time be increased or
decreased by adjustments made on the records of the Trustee and the
Depositary or its nominee as hereinafter provided.
(c) Book-Entry Provisions.
This Section 2.01(c) shall apply only to the Regulation S Global Note
and the Rule 144A Global Note issued in the form of one or more permanent
Global Notes (collectively, the "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 for such
Global Note or Global Notes or the nominee of such Depositary and (b) shall
be delivered by the Trustee to such Depositary or pursuant to such
Depositary's instructions or held by the Trustee as custodian for the
Depositary.
Members of, or participants in, the Depositary ("Agent Members")
shall have no rights under this Indenture with respect to any Global Note
held on their behalf by the Depositary or by the Trustee as the custodian of
the Depositary or under such Global Note, and the Depositary may be treated
by the Company, the Trustee and any agent of the Company or the Trustee as
the absolute owner of 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 impair, as between the Depositary and its Agent Members, the
operation of customary practices of such Depositary governing the exercise of
the rights of an owner of a beneficial interest in any Global Note.
(d) Certificated Notes.
Notes sold to "accredited investors" (as defined in Rule 501(a)(1),
(2), (3), (4), (5), (6) and (7) of Regulation D under the Securities Act)
shall be issued in the form of one or more certificated Notes (subject to a
minimum initial purchase of $100,000) in definitive, fully registered form
without interest coupons with the Restrictive Notes Legend set forth on
Exhibit A hereto ("Accredited Investor Restricted Notes"), which shall be
registered in the name of such Accredited Investor or its nominee, duly
executed by the Company and authenticated by the Trustee as hereinafter
provided. Such Accredited Investor Restricted Notes may not be exchanged for
a Global Note, or interest therein, at any time.
A Global Note is exchangeable for definitive notes in registered
certificated form if (1) DTC (a) notifies the Company that it is unwilling or
unable to continue as depositary for the Global Notes and the Company fails
to appoint a successor depositary or (b) has ceased to be a clearing agency
registered under the Exchange Act; (2) the Company, at its option, notifies
the Trustee in writing that it elects to cause the issuance of the
certificated Notes; or (3) there has occurred and is continuing a Default or
Event of Default with respect to the Notes. Any such certificated Notes
issued pursuant to this
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Section 2.01(d) shall bear the Restricted Notes Legend set forth in Exhibit A
hereto (the "Restricted Notes") unless otherwise provided in this Section
2.01(d) and Section 2.06(b) hereof.
After a transfer of any Notes during the period of the effectiveness
of a Shelf Registration Statement with respect to the Notes and pursuant
thereto, all requirements for Restricted Notes Legends on such Note will
cease to apply, and a certificated Note without a Restricted Notes Legend
will be available to the Holder of such Notes.
SECTION 2.02 EXECUTION AND AUTHENTICATION.
One Officer shall sign the Notes for the Company by manual or
facsimile signature.
If an Officer whose signature is on a Note no longer holds that
office at the time the Note is authenticated, the Note shall nevertheless be
valid.
A Note shall not be valid until authenticated by the manual signature
of an authorized officer of the Trustee. The signature shall be conclusive
evidence that the Note has been authenticated under this Indenture.
The Trustee shall, upon a written order of the Company signed by an
Officer, authenticate (1) Notes for original issue up to an aggregate
principal amount stated in Section 6 of the Notes. The aggregate principal
amount of Notes outstanding at any time may not exceed $287,500,000 except as
provided in Section 2.07.
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Notes. An authenticating agent may authenticate Notes
whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with Holders,
the Company or an Affiliate.
SECTION 2.03 REGISTRAR AND PAYING AGENT.
The Company shall maintain in the Borough of Manhattan, City of New
York, State of New York, (i) offices or agencies where the Notes may be
presented for registration of transfer or for exchange ("Registrar") (ii)
offices or agencies where the Notes may be presented for payment ("Paying
Agent") and (iii) offices or agencies where the Notes may be presented for
conversion ("Conversion Agent"). The Company initially designates State
Street Bank and Trust Company, N.A., an Affiliate of the Trustee, at its
corporate trust offices in the Borough of Manhattan, City of New York, State
of New York to act as Registrar, Paying Agent and Conversion Agent. The
Registrar shall keep a register of the Notes and of their transfer and
exchange. The Company may appoint one or more co-registrars, one or more
additional paying agents and one or more additional Conversion Agents in such
other locations as it shall determine. The term "Registrar" includes any
co-registrar, the term "Paying Agent" includes any additional paying agent
and the term "Conversion Agent" includes any additional conversion agent. The
Company may change any Paying Agent, Registrar or Conversion Agent without
prior notice to any Holder. The Company shall notify the Trustee of the name
and address of any Agent not a party to this Indenture. If the Company fails
to appoint or maintain another entity as Registrar, Paying Agent or
Conversion Agent, the Trustee shall act as such. The Company or any of its
Affiliates may act as Paying Agent, Registrar or Conversion Agent.
SECTION 2.04 PAYING AGENT TO HOLD MONEY IN TRUST.
9
The Company shall require each Paying Agent other than the Trustee to
agree in writing that the Paying Agent will hold in trust for the benefit of
Holders or the Trustee all money held by the Paying Agent for the payment of
principal or interest on the Notes, and will notify the Trustee of any
default by the Company in making any such payment. While any such default
continues, the Trustee may require a Paying Agent to pay all money held by it
to the Trustee and to account for any money disbursed by it. The Company at
any time may require a Paying Agent to pay all money held by it to the
Trustee. Upon payment over to the Trustee, the Paying Agent (if other than
the Company or an Affiliate of the Company) shall have no further liability
for the money. If the Company or an Affiliate of the Company acts as Paying
Agent, it shall segregate and hold in a separate trust fund for the benefit
of the Holders all money held by it as Paying Agent.
SECTION 2.05 HOLDER LISTS.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses
of Holders. If the Trustee is not the Registrar, the Company shall furnish to
the Trustee on or before each Interest Payment Date and at such other times
as the Trustee may request in writing a list in such form and as of such date
as the Trustee may reasonably require of the names and addresses of Holders.
SECTION 2.06 TRANSFER AND EXCHANGE.
Where Notes are presented to the Registrar or a co-registrar
with a request to register a transfer or to exchange them for an equal
principal amount of Notes of other denominations, the Registrar shall
register the transfer or make the exchange if its requirements for such
transactions are met. To permit registrations of transfers and exchanges,
the Company shall issue and the Trustee shall authenticate Notes at the
Registrar's request. No service charge shall be made to a Holder for any
registration of transfer or exchange (except as otherwise expressly
permitted herein), but the Company may require payment of a sum sufficient
to cover any transfer tax or similar governmental charge payable in
connection therewith (other than any such transfer tax or similar
governmental charge payable upon exchanges pursuant to Sections 2.10, 3.06
or 11.05 hereof).
The Company shall not be required (i) to issue, register the transfer
of or exchange any Note for a period beginning at the opening of business 15
days before the day of any selection of Notes to be redeemed under Section
3.02 hereof and ending at the close of business on the day of selection, or
(ii) to register the transfer, or exchange, of any Note so selected for
redemption in whole or in part, except the unredeemed portion of any Note
being redeemed in part.
(a) 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, or of
any beneficial interest therein, shall only be made in accordance with
Section 2.01(b) and this Section 2.06(a); PROVIDED, HOWEVER, that
beneficial interests in a Global Note may be transferred to Persons
who take delivery thereof in the form of a beneficial interest in the
same Global Note in accordance with the transfer restrictions set
forth in the Restricted Notes Legend and under the heading "Notice to
Investors; Transfer Restrictions" in the Company's Offering Memorandum
dated November 9, 2000.
(i) Except for transfers or exchanges made in accordance with
clauses (ii) through (iv) of this Section 2.06(a), transfers of a
Global Note shall be limited to transfers of such Global Note in
whole, but not in part, to nominees of the Depositary or to a
successor of the Depositary or such successor's nominee.
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(ii) RULE 144A GLOBAL NOTE TO REGULATION S GLOBAL NOTE. If
an owner of a beneficial interest in the Rule 144A Global Note
deposited with the Depositary or the Trustee as custodian for the
Depositary wishes at any time to transfer its interest in such
Rule 144A Global Note to a Person who is required to take
delivery thereof in the form of an interest in the Regulation S
Global Note, such owner may, subject to the rules and procedures
of the Depositary, exchange or cause the exchange of such
interest for an equivalent beneficial interest in the Regulation
S Global Note. Upon receipt by the principal Registrar of (1)
instructions given in accordance with the Depositary's procedures
from an Agent Member directing the principal Registrar to credit
or cause to be credited a beneficial interest in the Regulation S
Global Note in an amount equal to the beneficial interest in the
Rule 144A Global Note to be exchanged, (2) a written order given
in accordance with the Depositary's procedures containing
information regarding the participant account of the Depositary
and the Euroclear or Clearstream account to be credited with such
increase and (3) a certificate in the form of Exhibit B attached
hereto given by the Holder of such beneficial interest, then the
principal Registrar shall instruct the Depositary to reduce or
cause to be reduced the principal amount of the Rule 144A Global
Note and to increase or cause to be increased the principal
amount of the Regulation S Global Note by the aggregate principal
amount of the beneficial interest in the Rule 144A Global Note
equal to the beneficial interest in the Regulation S Global Note
to be exchanged or transferred, to credit or cause to be credited
to the account of the Person specified in such instructions a
beneficial interest in the Regulation S Global Note equal to the
reduction in the principal amount of the Rule 144A Global Note
and to debit or cause to be debited from the account of the
Person making such exchange or transfer the beneficial interest
in the Rule 144A Global Note that is being exchanged or
transferred.
(iii) REGULATION S GLOBAL NOTE TO RULE 144A GLOBAL NOTE. If
an owner of a beneficial interest in the Regulation S Global Note
deposited with the Depositary or with the Trustee as custodian
for the Depositary wishes at any time to transfer its interest in
such Regulation S Global Note to a Person who is required to take
delivery thereof in the form of an interest in the Rule 144A
Global Note, such Holder may, subject to the rules and procedures
of Euroclear or Clearstream, as the case may be, and the
Depositary, exchange or cause the exchange of such interest for
an equivalent beneficial interest in the Rule 144A Global Note.
Upon receipt by the principal Registrar of (1) instructions from
Euroclear or Clearstream, if applicable, and the Depositary,
directing the principal Registrar to credit or cause to be
credited a beneficial interest in the Rule 144A Global Note equal
to the beneficial interest in the Regulation S Global Note to be
exchanged or transferred, (2) a written order given in accordance
with the Depositary's procedures containing information regarding
the participant account of the Depositary and (3) a certificate
in the form of Exhibit C attached hereto given by the owner of
such beneficial interest, then Euroclear or Clearstream or the
principal Registrar, as the case may be, will instruct the
Depositary to reduce or cause to be reduced the Regulation S
Global Note and to increase or cause to be increased the
principal amount of the Rule 144A Global Note by the aggregate
principal amount of the beneficial interest in the Regulation S
Global Note to be exchanged or transferred, and the principal
Registrar shall instruct the Depositary, concurrently with such
reduction, to credit or cause to be credited to the account of
the Person specified in such instructions a beneficial interest
in the Rule 144A Global Note equal to the reduction in the
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principal amount of the Regulation S Global Note and to debit or
cause to be debited from the account of the Person making such
exchange or transfer the beneficial interest in the Regulation S
Global Note that is being exchanged or transferred.
(iv) GLOBAL NOTE TO RESTRICTED NOTE. If an owner of a
beneficial interest in a Global Note deposited with the
Depositary or with the Trustee as custodian for the Depositary
wishes at any time to transfer its interest in such Global Note
to a Person who is required to take delivery thereof in the form
of a Restricted Note, such owner may, subject to the rules and
procedures of Euroclear or Clearstream, if applicable, and the
Depositary, cause the exchange of such interest for one or more
Restricted Notes of any authorized denomination or denominations
and of the same aggregate principal amount. Upon receipt by the
principal Registrar of (1) instructions from Euroclear or
Clearstream, if applicable, and the Depositary directing the
principal Registrar to authenticate and deliver one or more
Restricted Notes of the same aggregate principal amount as the
beneficial interest in the Global Note to be exchanged, such
instructions to contain the name or names of the designated
transferee or transferees, the authorized denomination or
denominations of the Restricted Notes to be so issued and
appropriate delivery instructions, (2) a certificate in the form
of Exhibit D attached hereto given by the owner of such
beneficial interest to the effect set forth therein, (3) a
certificate in the form of Exhibit E attached hereto given by the
Person acquiring the Restricted Notes for which such interest is
being exchanged, to the effect set forth therein, and (4) such
other 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,
then Euroclear or Clearstream, if applicable, or the principal
Registrar, as the case may be, will instruct the Depositary to
reduce or cause to be reduced such Global Note by the aggregate
principal amount of the beneficial interest therein to be
exchanged and to debit or cause to be debited from the account of
the Person making such transfer the beneficial interest in the
Global Note that is being transferred, and concurrently with such
reduction and debit the Company shall execute, and the Trustee
shall authenticate and deliver, one or more Restricted Notes of
the same aggregate principal amount in accordance with the
instructions referred to above.
(v) RESTRICTED NOTE TO RESTRICTED NOTE. If a Holder of a
Restricted Note wishes at any time to transfer such Restricted
Note to a Person who is required to take delivery thereof in the
form of a Restricted Note, such Holder may, subject to the
restrictions on transfer set forth herein and in such Restricted
Note, cause the exchange of such Restricted Note for one or more
Restricted Notes of any authorized denomination or denominations
and of the same aggregate principal amount. Upon receipt by the
principal Registrar of (1) such Restricted Note, duly endorsed as
provided herein, (2) instructions from such Holder directing the
principal Registrar to authenticate and deliver one or more
Restricted Notes of the same aggregate principal amount as the
Restricted Note to be exchanged, such instructions to contain the
name or authorized denomination or denominations of the
Restricted Notes to be so issued and appropriate delivery
instructions, (3) a certificate from the Holder of the Restricted
Note to be exchanged in the form of Exhibit D attached hereto,
(4) a certificate in the form of Exhibit E attached hereto given
12
by the Person acquiring the Restricted Notes for which such
interest is being exchanged, to the effect set forth therein, and
(5) such other 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, then the Registrar shall cancel or cause to
be canceled such Restricted Note and concurrently therewith, the
Company shall execute, and the Trustee shall authenticate and
deliver, one or more Restricted Notes of the same aggregate
principal amount, in accordance with the instructions referred to
above.
(vi) RESTRICTED NOTE TO RULE 144A GLOBAL NOTE. If an owner
of a Restricted Note registered in the name of such owner wishes
at any time to transfer such Restricted Note to a Person who is
required to take delivery thereof in the form of an interest in
the Rule 144A Global Note, such Holder may, subject to the rules
and procedures of the Depositary, exchange or cause the exchange
of such Restricted Note for an equivalent beneficial interest in
the Rule 144A Global Note. Upon receipt by the principal
Registrar of (1) instructions from the Company, directing the
principal Registrar (A) to credit or cause to be credited a
beneficial interest in the Rule 144A Global Note equal to the
principal amount of the Restricted Note to be exchanged or
transferred and (B) to cancel such Restricted Note to be
exchanged or transferred, (2) a written order given in accordance
with the Depositary's procedures containing information regarding
the participant account of the Depositary and (3) a certificate
in the form of Exhibit C attached hereto given by the owner of
such Restricted Note, then the principal Registrar will instruct
the Trustee to cancel such Restricted Note and will instruct the
Depositary to increase or cause to be increased the principal
amount of the Rule 144A Global Note by the principal amount of
the Restricted Note to be exchanged or transferred, and the
principal Registrar shall instruct the Depositary, concurrently
with such cancellation of the Restricted Note, to credit or cause
to be credited to the account of the Person specified in such
instructions a beneficial interest in the Rule 144A Global Note
equal to the principal amount of the Restricted Note to be
canceled by the Trustee.
(vii) RESTRICTED NOTE TO REGULATION S GLOBAL NOTE. If an
owner of a Restricted Note registered in the name of such owner
wishes at any time to transfer such Restricted Note to a Person
who is required to take delivery thereof in the form of an
interest in the Regulation S Global Note, such owner may, subject
to the rules and procedures of the Euroclear or Clearstream, as
the case may be, exchange or cause the exchange of such
Restricted Note for an equivalent beneficial interest in the
Regulation S Global Note. Upon receipt by the principal Registrar
of (1) instructions from the Company, directing the principal
Registrar (A) to credit or cause to be credited a beneficial
interest in the Regulation S Global Note equal to the principal
amount of the Restricted Note to be exchanged or transferred and
(B) to cancel such Restricted Note to be exchanged or
transferred, (2) a written order given in accordance with the
Depositary's procedures containing information regarding the
participant account of the Euroclear or Clearstream account to be
credited with such increase and (3) a certificate in the form of
Exhibit B attached hereto given by the Holder of such Restricted
Note, then the principal Registrar will instruct the Trustee to
cancel such Restricted Note and will instruct the Depositary to
increase or cause to be increased the principal amount of the
Regulation S Global Note by the principal amount of the
13
Restricted Note to be exchanged or transferred, and the principal
Registrar shall instruct the Depositary, concurrently with such
cancellation of the Restricted Note, to credit or cause to be
credited to the account of the Person specified in such
instructions a beneficial interest in the Regulation S Global
Note equal to the principal amount of the Restricted Note to be
canceled by the Trustee.
(viii) OTHER EXCHANGES. In the event that a beneficial
interest in a Global Note is exchanged for a certificated Note in
definitive registered form pursuant to Section 2.10, prior to the
effectiveness of a Shelf Registration Statement with respect to
such Notes, such Notes may be exchanged only in accordance with
such procedures as are substantially consistent with the
provisions of clauses (ii) through (v) above (including the
certification requirements intended to ensure that such transfers
comply with Rule 144A, Rule 144, Regulation S or any other
available exemption from registration, as the case may be) and
such other procedures as may from time to time be adopted by the
Company.
(b) Except in connection with a Shelf Registration Statement contemplated
by and in accordance with the terms of the Registration Rights Agreement, if
Notes are issued upon the transfer, exchange or replacement of Notes bearing the
Restricted Notes Legend set forth in Exhibit A hereto, or if a request is made
to remove such Restricted Notes Legend on Notes, the Notes so issued shall bear
the Restricted Notes Legend, or the Restricted Notes Legend shall not be
removed, as the case may be, unless there is delivered to the Company such
satisfactory evidence, which may include an opinion of counsel licensed to
practice law in the State of New York, as may be reasonably required by the
Company, 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, Rule 144, Regulation S or any other available exemption from
registration under the Securities Act or, with respect to Restricted Notes, that
such Notes are not "restricted" within the meaning of Rule 144 under the
Securities Act. Upon provision of such satisfactory evidence, the Trustee, at
the direction of the Company, shall authenticate and deliver Notes that do not
bear the legend.
(c) Neither the Company nor the Trustee shall have any responsibility for
any actions taken or not taken by the Depositary and the Company shall have no
responsibility for any actions taken or not taken by the Trustee as agent or
custodian of the Depositary.
SECTION 2.07 REPLACEMENT NOTES.
If the Holder of a Note claims that the Note has been lost, destroyed
or wrongfully taken or if such Note is mutilated and is surrendered to the
Trustee, the Company shall issue and the Trustee shall authenticate a
replacement Note if the Trustee's and the Company's requirements are met. If
required by the Trustee or the Company, an indemnity bond must be
supplied by the Holder that is sufficient in the judgment of both to
protect the Company, the Trustee, any Agent or any authenticating agent
from any loss which any of them may suffer if a Note is replaced. The Company
may charge for its expenses in replacing a Note.
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 III hereof, the Company in its discretion may,
instead of issuing a new Note, pay or purchase such Note, as the case may be.
14
Every replacement Note is an additional obligation of the Company
and shall be entitled to all of the benefits of this Indenture
equally and proportionately with all other Notes duly issued hereunder.
SECTION 2.08 OUTSTANDING NOTES.
The Notes outstanding at any time are all the Notes authenticated by
the Trustee except for those canceled by it, those delivered to it for
cancellation, and those described in this Section as not outstanding.
If a Note is replaced, paid or purchased pursuant to Section 2.07
hereof, it ceases to be outstanding unless the Trustee receives proof
satisfactory to it that the replaced, paid or purchased Note is held by a
bona fide purchaser.
If the principal amount of any Note is considered paid under
Section 4.01 hereof, it ceases to be outstanding and interest on it ceases to
accrue.
Except as set forth in Section 2.09 hereof, a Note does not cease to
be outstanding because the Company or an Affiliate of the Company holds the
Note.
SECTION 2.09 TREASURY NOTES.
In determining whether the Holders of the required principal amount
of Notes have concurred in any direction, waiver or consent, Notes owned
by the Company or an Affiliate of the Company shall be considered as
though they are not outstanding, except that for the purposes of determining
whether the Trustee shall be protected in relying on any such direction,
waiver or consent, only Notes that the Trustee knows are so owned shall be
so disregarded.
SECTION 2.10 TEMPORARY NOTES; GLOBAL NOTES.
(a) Until definitive Notes are ready for delivery, the Company may prepare
and the Trustee shall authenticate temporary Notes. Temporary Notes shall be
substantially in the form of definitive Notes but may have variations that the
Company considers appropriate for temporary Notes. Without unreasonable delay,
the Company shall prepare and the Trustee shall authenticate definitive Notes in
exchange for temporary Notes. Holders of temporary Notes shall be entitled to
all of the benefits of this Indenture.
(b) A Global Note deposited with the Depositary or with the Trustee as
custodian for the Depositary pursuant to Section 2.01 shall be transferred to
the beneficial owners thereof in the form of certificated Notes only (i) in
accordance with Section 2.01(d), or (ii) if such transfer complies with Section
2.06 and (A) the Depositary notifies the Company that it is unwilling or unable
to continue as Depositary for such Global Note or if at any time such Depositary
ceases to be a "clearing agency" registered under the Exchange Act and a
successor Depositary is not appointed by the Company within 90 days after
receipt of such notice or after it becomes aware of such cessation or (B) an
Event of Default has occurred and is continuing.
(c) Any Global Note that is transferable to the beneficial owners thereof
in the form of certificated Notes pursuant to Section 2.01(d) or to this Section
2.10 shall be surrendered by the Depositary to the Trustee to be so transferred,
in whole or from time to time in part, without charge, and the Trustee shall
authenticate and deliver, upon such transfer of each portion of such Global
Note, an equal aggregate principal amount of Notes of authorized denominations
15
in the form of certificated Notes. Any portion of a Global Note transferred
pursuant to this Section 2.10 shall be executed, authenticated and
delivered only in denominations of $1,000 and any integral multiple thereof
and registered in such names as the Depositary shall direct. Any Note in
the form of certificated Notes delivered in exchange for an interest in the
Global Notes shall, except as otherwise provided by Section 2.06(b) bear
the Restricted Notes Legend set forth in Exhibit A hereto.
(d) The registered Holder of a Global Note may grant proxies
and otherwise authorize any Person, including Agent Members 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.
(e) In the event of the occurrence of either of the events
specified in Section 2.10(b), the Company will promptly make
available to the Trustee a reasonable supply of certificated
Notes in definitive, fully registered form without interest
coupons.
SECTION 2.11 CANCELLATION.
The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar, Paying Agent and Conversion Agent shall forward
to the Trustee any Notes surrendered to them for registration of transfer,
exchange or payment. The Trustee shall promptly cancel all Notes surrendered
for registration of transfer, exchange, payment, conversion, replacement or
cancellation and shall dispose of canceled Notes as the Company directs. The
Company may not issue new Notes to replace Notes that it has paid or that
have been delivered to the Trustee for cancellation.
SECTION 2.12 DEFAULTED INTEREST.
If the Company fails to make a payment of interest on the Notes,
it shall pay such defaulted interest plus any interest payable on the
defaulted interest, in any lawful manner. It may pay such defaulted
interest, plus any such interest payable on it, to the Persons who are
Holders on a subsequent special record date. The Company shall fix any
such record date and payment date, PROVIDED that no such record date shall
be less than 10 days prior to the related payment date for such defaulted
interest. At least 15 days before any such record date, the Company
shall mail to Holders a notice that states the special record date, the
related payment date and amount of such interest to be paid.
SECTION 2.13 CUSIP NUMBERS.
The Company in issuing the Notes may use "CUSIP" numbers (if then
generally in use), and, if so, the Trustee shall use "CUSIP" numbers in
notices of redemption and other notices as a convenience to holders of Notes;
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 or notice of a Change in Control
Offer and that reliance may be placed only on the other identification
numbers printed on the Notes, and any redemption or Change in Control Offer
shall not be affected by any defect in or omission of such numbers. The
Company will promptly notify the Trustee of any change in the "CUSIP" numbers.
ARTICLE III.
REDEMPTION
SECTION 3.01 NOTICES TO TRUSTEE.
16
If the Company elects to redeem Notes pursuant to the optional
redemption provisions of the Notes and Section 3.07 hereof, it shall notify
the Trustee of the redemption date and the principal amount of Notes to be
redeemed. The Company shall give the notice provided for in this Section 3.01
at least 45 days but no more than 60 days before the redemption date, unless
a shorter notice period shall be satisfactory to the Trustee. The Company may
not give notice of any redemption if the Company has defaulted in payment of
interest and the default is continuing.
SECTION 3.02 SELECTION OF NOTES TO BE REDEEMED.
If less than all of the Notes are to be redeemed at any time,
selection of Notes shall be made by the Trustee on a PRO RATA basis or by lot
or by a method that complies with the requirements of any exchange on which
the Notes are listed and that the Trustee considers fair and appropriate,
provided that no Notes of $1,000 or less shall be redeemed in part. The
Trustee shall make the selection not more than 60 days and not less than 30
days before the redemption date from Notes outstanding not previously called
for redemption. Notes and portions of Notes selected shall be in amounts of
$1,000 or integral multiples of $1,000. Provisions of this Indenture that
apply to Notes called for redemption also apply to portions of Notes called
for redemption. The Trustee shall notify the Company promptly of the Notes or
portions of Notes to be called for redemption.
If any Note selected for partial redemption is converted in part
after such selection, the converted portion of such Note shall be deemed (so
far as may be) to be the portion to be selected for redemption. The Notes (or
portions thereof) so selected shall be deemed duly selected for redemption
for all purposes hereunder, notwithstanding that any such Note is converted
in whole or in part before the mailing of the notice of redemption. Upon any
redemption of less than all the Notes, the Company and the Trustee may treat
as outstanding any Notes surrendered for conversion during the period 15 days
next preceding the mailing of a notice of redemption and need not treat as
outstanding any Note authenticated and delivered during such period in
exchange for the unconverted portion of any Note converted in part during
such period.
SECTION 3.03 NOTICE OF REDEMPTION.
At least 30 days but not more than 60 days before a redemption date,
the Company shall mail, by first class mail, a notice of redemption to each
Holder whose Notes are to be redeemed at its registered address. The notice
shall identify the Notes to be redeemed and shall state:
(a) the redemption date;
(b) the redemption price;
(c) if any Note is to be redeemed in part only, the portion of the
principal amount thereof redeemed, and that, after the redemption date,
upon surrender of such Note, a new Note in principal amount equal to the
unredeemed portion thereof shall be issued in the name of the Holder
thereof upon cancellation of the original Note;
(d) the name and address of the Paying Agent;
(e) that Notes called for redemption must be surrendered to the Paying
Agent to collect the redemption price plus accrued interest, if any;
17
(f) that interest on Notes called for redemption ceases to accrue on and
after the redemption date;
(g) the paragraph of the Notes pursuant to which the Notes called for
redemption are being redeemed; and
(h) the "CUSIP" number of the Notes to be redeemed.
Such notice shall also state the current Conversion Price and the date
on which the right to convert such Notes or portions thereof into Common
Stock of the Company will expire.
At the Company's request, the Trustee shall give notice of redemption in
the Company's name and at the Company's expense; PROVIDED that the Company shall
have delivered to the Trustee, at least 60 days prior to the redemption date, an
Officers' Certificate requesting that the Trustee give such notice and setting
forth the information to be stated in such notice, as provided in the preceding
paragraph.
SECTION 3.04 EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is mailed in accordance with Section 3.03 hereof,
Notes called for redemption become due and payable on the redemption date at the
price set forth in the Note. A notice of redemption may not be conditional.
SECTION 3.05 DEPOSIT OF REDEMPTION PRICE.
On or before the redemption date, the Company shall deposit with the
Trustee or with the Paying Agent money sufficient to pay the redemption price of
and accrued interest on all Notes to be redeemed on that date unless theretofore
converted into Common Stock pursuant to the provisions hereof. The Trustee or
the Paying Agent shall return to the Company any money not required for that
purpose.
SECTION 3.06 NOTES REDEEMED IN PART.
Upon surrender of a Note that is redeemed in part, the Company shall issue
and the Trustee shall authenticate for the Holder at the expense of the Company
a new Note equal in principal amount to the unredeemed portion of the Note
surrendered.
SECTION 3.07 OPTIONAL REDEMPTION.
The Company may redeem all or any portion of the Notes, upon the terms and
at the redemption prices set forth in the Notes. Any redemption pursuant to this
Section 3.07 shall be made pursuant to the provisions of Section 3.01 through
3.06 hereof.
SECTION 3.08 MANDATORY REDEMPTION
The Company shall not be required to make mandatory redemption payments or
sinking fund payments with respect to the Notes.
SECTION 3.09 CHANGE IN CONTROL OFFER.
18
(a) In the event that, pursuant to Section 4.07 hereof, the
Company shall commence an offer to all Holders of the Notes to
purchase Notes (the "Change in Control Offer"), the Company shall
follow the procedures in this Section 3.09.
(b) The Change in Control Offer shall remain open for a
period specified by the Company which shall be no less than 30
calendar days and no more than 60 calendar days following its
commencement (the "Commencement Date") (as determined in
accordance with Section 4.07 hereof), except to the extent that a
longer period is required by applicable law (the "Tender
Period"). Upon the expiration of the Tender Period (the "Purchase
Date"), the Company shall purchase the principal amount of all of
the Notes required to be purchased pursuant to Section 4.07
hereof (the "Offer Amount").
(c) If the Purchase Date is on or after an Record Date and
on or before the related Interest Payment Date, any accrued
interest shall be paid to the Person in whose name a Note is
registered at the close of business on such Record Date, and no
additional interest will be payable to Holders who tender Notes
pursuant to the Change in Control Offer.
(d) The Company shall provide the Trustee with notice of the
Change in Control Offer at least 10 days before the Commencement
Date.
(e) On or before the 15th day after the Change in Control,
the Company or the Trustee (at the expense of the Company) shall
send, by first class mail, a notice to each of the Holders, which
shall govern the terms of the Change in Control Offer and shall
state:
(i) that the Change in Control Offer is being made pursuant
to this Section 3.09 and Section 4.07 hereof, that all Notes
validly tendered will be accepted for payment and the length of
time the Change in Control Offer will remain open;
(ii) the purchase price (as determined in accordance with
Section 4.07 hereof) and the Purchase Date, and that all Notes
tendered will be accepted for payment;
(iii) that any Note or portion thereof not tendered or
accepted for payment will continue to accrue interest;
(iv) that, unless the Company defaults in the payment of the
purchase price, any Note or portion thereof accepted for payment
pursuant to the Change in Control Offer will cease to accrue
interest after the Purchase Date;
(v) that Holders electing to have a Note or portion thereof
purchased pursuant to any Change in Control Offer will be
required to surrender the Note, with the form entitled "Option of
Holder to Elect Purchase upon a Change in Control" on the reverse
of the Note completed, to the Paying Agent at the address
specified in the notice prior to the close of business on the
third Business Day preceding the Purchase Date;
(vi) that Holders will be entitled to withdraw their
election if the Paying Agent receives, not later than the close
of business on the second Business Day preceding the Purchase
Date, or such longer period as may be required by law, a letter
or facsimile transmission (receipt of which is confirmed and
promptly followed by a letter) setting forth the name of the
Holder, the principal amount of the Note or portion thereof the
Holder delivered for purchase and a statement that such Holder is
withdrawing his election to have the Note or portion thereof
purchased;
19
(vii) that Holders whose Notes were purchased only in part
will be issued new Notes equal in principal amount to the
unpurchased portion of the Notes surrendered, which unpurchased
portion shall be equal to $1000 or an integral multiple thereof
in principal amount; and
(viii) the "CUSIP" number of the Notes to be purchased.
(f) On or prior to the Purchase Date, the Company shall
irrevocably deposit with the Trustee or a Paying Agent in
immediately available funds an amount equal to the Offer Amount
to be held for payment in accordance with the terms of this
Section 3.09. On the Purchase Date, the Company shall, to the
extent lawful, (i) accept for payment the Notes or portions
thereof properly tendered pursuant to the Change in Control
Offer, (ii) deliver or cause the Depositary or Paying Agent to
deliver to the Trustee Notes so accepted and (iii) deliver to the
Trustee an Officers' Certificate stating such Notes or portions
thereof have been accepted for payment by the Company in
accordance with the terms of this Section 3.09. The Paying Agent
shall promptly (but in any case not later than ten (10) calendar
days after the Purchase Date) mail or deliver to each tendering
Holder, or, if any Holder requests in writing, wire transfer
immediately available funds to an account previously specified in
writing by such Holder to the Company and the Paying Agent, an
amount equal to the purchase price of the Notes tendered by such
Holder and accepted by the Company for purchase, and the Trustee
shall promptly authenticate and mail or deliver to such Holders a
new Note equal in principal amount to any unpurchased portion of
the Note surrendered. Any Notes not so accepted shall be promptly
mailed or delivered by or on behalf of the Company to the Holder
thereof. The Company will publicly announce in a newspaper of
general circulation the results of the Change in Control Offer on
or as soon as practicable after the Purchase Date.
(g) The Change in Control Offer shall be made by the Company
in compliance with all applicable provisions of the Exchange Act,
and all applicable tender offer rules promulgated thereunder, and
shall include all instructions and materials necessary to enable
such Holders to tender their Notes.
ARTICLE IV.
COVENANTS
SECTION 4.01 PAYMENT OF NOTES.
The Company shall pay the principal of, and premium, if any, and
interest on, the Notes on the dates and in the manner provided in the Notes.
Principal, premium, if any, and interest shall be considered paid on the date
due if the Paying Agent (other than the Company or an Affiliate of the
Company) holds on that date money designated for and sufficient to pay all
principal, premium, if any, and interest then due. To the extent lawful, the
Company shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on (i) overdue principal and premium, if
any, at the rate borne by the Notes, compounded semiannually; and (ii)
overdue installments of interest (without regard to any applicable grace
period) at the same rate, compounded semiannually.
20
Whenever in this Indenture or the Notes there is mentioned, in any
context, the payment of principal (and premium, if any), Offer Amount,
interest or any other amount payable under or with respect to any Note, such
mention shall be deemed to include mention of the payment of Special Interest
provided for in Section 2 of the Notes to the extent that, in such context,
Special Interest is, was or would be payable in respect thereof pursuant to
the provisions of Section 2 of the Notes, and express mention of the payment
of Special Interest (if applicable) in any provisions hereof shall not be
construed as excluding Special Interest in those provisions hereof where such
express mention is not made (if applicable).
SECTION 4.02 RULE 144A INFORMATION REQUESTS.
Until such time as the Notes are no longer "restricted securities"
within the meaning of Rule 144 under the Securities Act, unless such Notes
have been owned by an Affiliate of the Company, the Company shall furnish the
Holders or beneficial holders of the Notes or the holders of the Common Stock
into which the Notes are convertible and prospective purchasers or the Notes
or the Common Stock into which the Notes are convertible, upon such holder's
or purchaser's request, the information required under Rule 144A(d)(4) under
the Securities Act.
SECTION 4.03 COMPLIANCE CERTIFICATE.
The Company shall deliver to the Trustee, within 90 days after the
end of each fiscal year of the Company, an Officers' Certificate stating that
a review of the activities of the Company and its subsidiaries during the
preceding fiscal year has been made under the supervision of the signing
Officers with a view to determining whether the Company has kept, observed,
performed and fulfilled its obligations under, and complied with the
covenants and conditions contained in, this Indenture, and further stating,
as to each such Officer signing such certificate, that to the best of his
knowledge the Company has kept, observed, performed and fulfilled each and
every covenant, and complied with the covenants and conditions contained in
this Indenture and is not in default in the performance or observance of any
of the terms, provisions and conditions hereof (or, if a Default or Event of
Default shall have occurred, describing all such Defaults or Events of
Default of which he may have knowledge) and that to the best of his knowledge
no event has occurred and remains in existence by reason of which payments on
account of the principal or of interest, if any, on the Notes are prohibited.
One of the Officers signing such Officers' Certificate shall be
either the Company's principal executive officer, principal financial officer
or principal accounting officer.
The Company will, so long as any of the Notes are outstanding,
deliver to the Trustee forthwith upon becoming aware of any Default or Event
of Default, an Officers' Certificate specifying such Default or Event of
Default.
Immediately upon the occurrence of any Registration Default giving
rise to Special Interest or the cure of any such Registration Default, the
Company shall give the Trustee notice thereof and of the event giving rise to
such Registration Default or the cure of any such Registration Default (such
notice to be contained in an Officers' Certificate) and prior to receipt of
such Officers' Certificate the Trustee shall be entitled to assume that no
such Registration Default has occurred or been cured, as the case may be.
SECTION 4.04 STAY, EXTENSION AND USURY LAWS.
The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay, extension or usury law wherever
21
enacted, now or at any time hereafter in force, which may affect the
covenants or the performance of this Indenture; and the Company (to the
extent it may lawfully do so) hereby expressly waives all benefit or
advantage of any such law, and covenants that it will not, by resort to any
such law, hinder, delay or impede the execution of any power herein granted
to the Trustee, but will suffer and permit the execution of every such power
as though no such law had been enacted.
SECTION 4.05 CORPORATE EXISTENCE.
Subject to Article VII hereof, to the extent permitted by law the
Company will do or cause to be done all things necessary to preserve and keep in
full force and effect its corporate existence and the corporate, partnership or
other existence of each subsidiary of the Company in accordance with the
respective organizational documents of each subsidiary and the rights (charter
and statutory), licenses and franchises of the Company; provided, however, that
the Company shall not be required to preserve any such right, license or
franchise, or the corporate, partnership or other existence of any subsidiary,
if the preservation thereof is no longer desirable in the conduct of the
business of the Company and its subsidiaries taken as a whole.
SECTION 4.06 TAXES.
The Company shall, and shall cause each of its subsidiaries to, pay
prior to delinquency all material taxes, assessments and governmental levies,
except as contested in good faith and by appropriate proceedings.
SECTION 4.07 CHANGE IN CONTROL.
Upon the occurrence of a Change in Control, each Holder shall have the
right to require the Company to repurchase all or any part (equal to $1,000 or
an integral multiple thereof) of such Holder's Notes on a date fixed by the
Company that is no earlier than 30 nor later than 60 days from the date the
Company gives notice of the Change in Control. The Company shall be required to
make a Change in Control Offer for an amount of cash equal to 100% of the
principal amount of the Notes on the Purchase Date, plus accrued and unpaid
interest, if any to the Purchase Date (the "Change in Control Payment").
Notwithstanding the foregoing, the Company shall not be required to
make a Change in Control Offer if a third party makes an offer to purchase
the Notes in the manner, at the times and otherwise in compliance with the
requirements of Section 3.09 that the Company would otherwise be required to
make and that third party purchases all of the Notes validly tendered and not
withdrawn in such offer.
SECTION 4.08 [Intentionally Omitted].
SECTION 4.09 SPECIAL INTEREST.
If Special Interest is payable by the Company pursuant to Section 2 of
the Notes, the Company shall deliver to the Trustee a certificate to that effect
stating (i) the amount of such Special Interest that is payable and (ii) the
date on which such Special Interest is payable. Unless and until a Trust Officer
of the Trustee receives such a certificate, the Trustee may assume without
inquiry that no such Special Interest is payable. If the Company has paid
Special Interest directly to the persons entitled to it, the Company shall
deliver to the Trustee a certificate setting forth the particulars of such
payment.
22
ARTICLE V.
CONVERSION
SECTION 5.01 CONVERSION PRIVILEGE.
A Holder of a Note may convert it into fully paid and nonassessable
shares of Common Stock at any time after 90 days following the Issuance Date and
prior to maturity at the Conversion Price then in effect, except that, with
respect to any Note called for redemption, such conversion right shall terminate
at the close of business on the Business Day immediately preceding the
redemption date (unless the Company shall default in making the redemption
payment when it becomes due, in which case the conversion right shall terminate
on the date such default is cured). The number of shares of Common Stock
issuable upon conversion of a Note is determined by dividing the principal
amount of such Note by the conversion price in effect on the Conversion Date
(the "Conversion Price").
The initial Conversion Price is stated in Section 12 of the Notes and
is subject to adjustment as provided in this Article V.
A holder may convert a portion of a Note equal to any integral
multiple of $1,000. Provisions of this Indenture that apply to conversion of
all of a Note also apply to conversion of a portion of it.
SECTION 5.02 CONVERSION PROCEDURE.
To convert a Note, a Holder must satisfy the requirements in Section
12 of the Notes. The date on which the Holder satisfies all of those
requirements is the conversion date (the "Conversion Date"). As soon as
practicable after the Conversion Date, the Company shall deliver to the
Holder through the Conversion Agent a certificate for the number of whole
shares of Common Stock issuable upon the conversion and a check for any
fractional share determined pursuant to Section 5.03 hereof. The Person in
whose name the certificate is registered shall become the stockholder of
record on the Conversion Date and, as of such date, such Person's rights as a
Holder shall cease; PROVIDED, HOWEVER, that no surrender of a Note on any
date when the stock transfer books of the Company shall be closed shall be
effective to constitute the Person entitled to receive the shares of Common
Stock upon such conversion as the stockholder of record of such shares of
Common Stock on such date, but such surrender shall be effective to
constitute the Person entitled to receive such shares of Common Stock as the
stockholder of record thereof for all purposes at the close of business on
the next succeeding day on which such stock transfer books are open; PROVIDED
FURTHER, HOWEVER, that such conversion shall be at the Conversion Price in
effect on the date that such Note shall have been surrendered for conversion,
as if the stock transfer books of the Company had not been closed.
No payment or other adjustment for accrued interest or dividends on
any Common Stock issued upon conversion of the Notes. If any Notes are
converted during any period after any Record Date for the payment of an
installment of interest but before the next Interest Payment Date, interest
for such notes will be paid on the next Interest Payment Date,
notwithstanding such conversion, to the Holders of such Notes. Any Notes that
are, however, delivered to the Company for conversion after any Record Date
but before the next Interest Payment Date must, except as described in the
next sentence, be accompanied by a payment equal to the interest payable on
such Interest Payment Date on the principal amount of convertible notes being
converted. The payment to the Company described in the preceding sentence
shall not be required if, during that period between a Record Date and the
next Interest Payment Date, a conversion occurs on or after the date that the
Company has issued a redemption notice and prior to the date of redemption
stated in such notice. No fractional shares will be issued upon conversion,
but a cash adjustment will be made for any fractional shares.
23
If a holder converts more than one Note at the same time, the number
of whole shares of Common Stock issuable upon the conversion shall be based
on the total principal amount of Notes converted.
Upon surrender of a Note that is converted in part, the Trustee shall
authenticate for the holder a new Note equal in principal amount to the
unconverted portion of the Note surrendered.
SECTION 5.03 FRACTIONAL SHARES.
The Company will not issue fractional shares of Common Stock upon
conversion of a Note. In lieu thereof, the Company will pay an amount in cash
based upon the Daily Market Price of the Common Stock on the trading day
prior to the date of conversion.
SECTION 5.04 TAXES ON CONVERSION.
The issuance of certificates for shares of Common Stock upon the
conversion of any Note shall be made without charge to the converting Holder
for such certificates or for any tax in respect of the issuance of such
certificates, and such certificates shall be issued in the respective names
of, or in such names as may be directed by, the Holder or Holders of the
converted Note; PROVIDED, HOWEVER, that in the event that certificates for
shares of Common Stock are to be issued in a name other than the name of the
holder of the Note converted, such Note, when surrendered for conversion,
shall be accompanied by an instrument of transfer, in form satisfactory to
the Company, duly executed by the registered holder thereof or his duly
authorized attorney; and PROVIDED FURTHER, HOWEVER, that the Company shall
not be required to pay any tax which may be payable in respect of any
transfer involved in the issuance and delivery of any such certificates in a
name other than that of the holder of the converted Note, and the Company
shall not be required to issue or deliver such certificates unless or until
the Person or Persons requesting the issuance thereof shall have paid to the
Company the amount of such tax or shall have established to the satisfaction
of the Company that such tax has been paid or is not applicable.
SECTION 5.05 COMPANY TO PROVIDE STOCK.
The Company shall at all times reserve and keep available, free from
preemptive rights, out of its authorized but unissued Common Stock, solely
for the purpose of issuance upon conversion of Notes as herein provided, a
sufficient number of shares of Common Stock to permit the conversion of all
outstanding Notes for shares of Common Stock. All shares of Common Stock
which may be issued upon conversion of the Notes shall be duly authorized,
validly issued, fully paid and nonassessable when so issued. Shares of Common
Stock issuable upon conversion of a Restricted Note shall bear such
restrictive legends as the Company shall provide in accordance with
applicable law. If shares of Common Stock are to be issued upon conversion of
a Restricted Note and they are to be registered in a name other than that of
the holder of such Restricted Note, then the Person in whose name such shares
of Common Stock are to be registered must deliver to the Trustee a
certificate satisfactory to the Company and signed by such Person as to
compliance with the restrictions on transfer contained in such restrictive
legends.
SECTION 5.06 ADJUSTMENT OF CONVERSION PRICE.
The Conversion Price shall be subject to adjustment from time to time
as follows:
(a) In case the Company shall (1) pay a dividend in shares
of Common Stock to holders of Common Stock, (2) make a
24
distribution in shares of Common Stock to holders of Common
Stock, (3) subdivide its outstanding shares of Common Stock into
a greater number of shares of Common Stock or (4) combine its
outstanding shares of Common Stock into a smaller number of
shares of Common Stock, the Conversion Price in effect
immediately prior to such action shall be adjusted so that the
holder of any Note thereafter surrendered for conversion shall be
entitled to receive the number of shares of Common Stock which he
would have owned immediately following such action had such Notes
been converted immediately prior thereto. Any adjustment made
pursuant to this subsection (a) shall become effective
immediately after the Record Date in the case of a dividend or
distribution and shall become effective immediately after the
effective date in the case of a subdivision or combination.
(b) In case the Company shall issue rights or warrants to
substantially all holders of Common Stock entitling them (for a
period commencing no earlier than the Record Date for the
determination of holders of Common Stock entitled to receive such
rights or warrants and expiring not more than 45 days after such
Record Date) to subscribe for or purchase shares of Common Stock
(or securities convertible into Common Stock) at a price per
share less than the current market price (as determined pursuant
to subsection (f) below) of the Common Stock on such Record Date,
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 such Record Date by a fraction of
which the numerator shall be the number of shares of Common Stock
outstanding on such Record Date, plus the number of shares of
Common Stock which the aggregate offering price of the offered
shares of Common Stock (or the aggregate conversion price of the
convertible securities so offered) would purchase at such current
market price, and of which the denominator shall be the number of
shares of Common Stock outstanding on such Record Date plus the
number of additional shares of Common Stock offered (or into
which the convertible securities so offered are convertible).
Such adjustments shall become effective immediately after such
Record Date.
(c) In case the Company shall distribute to all holders of
Common Stock shares of capital stock of the Company other than
Common Stock, evidences of indebtedness or other assets (other
than cash dividends out of current or retained earnings), or
shall distribute to substantially all holders of Common Stock
rights or warrants to subscribe for securities (other than those
referred to in subsection (b) above), then in each such case 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 the date of such distribution by a
fraction of which the numerator shall be the current market price
(determined as provided in subsection (f) below) of the Common
Stock on the Record Date mentioned below less the then fair
market value (as determined by the Board of Directors, whose
determination shall be conclusive evidence of such fair market
value and described in a Board Resolution) of the portion of the
assets so distributed or of such subscription rights or warrants
applicable to one share of Common Stock, and of which the
denominator shall be such current market price of the Common
Stock. Such adjustment shall become effective immediately after
the Record Date for the determination of the holders of Common
Stock entitled to receive such distribution. Notwithstanding the
foregoing, in the event that the Company shall distribute rights
or warrants (other than those referred to in subsection (b)
above) ("Rights") pro rata to holders of Common Stock, the
Company may, in lieu of making any adjustment pursuant to this
Section 5.06, make proper provision so that each holder of a Note
who converts such Note (or any portion thereof) after the Record
Date for such distribution and prior to the expiration or
redemption of the Rights shall be entitled to receive upon such
conversion, in addition to the shares of Common Stock issuable
upon such conversion (the "Conversion SHARES"), a number of
Rights to be determined as follows: (i) if such conversion occurs
on or prior to the date for the distribution to the holders of
Rights of separate certificates evidencing such Rights (the
25
"Distribution Date"), the same number of Rights to which a holder
of a number of shares of Common Stock equal to the number of
Conversion Shares is entitled at the time of such conversion in
accordance with the terms and provisions of and applicable to the
Rights; and (ii) if such conversion occurs after the Distribution
Date, the same number of Rights to which a holder of the number
of shares of Common Stock into which the principal amount of the
Note so converted was convertible immediately prior to the
Distribution Date would have been entitled on the Distribution
Date in accordance with the terms and provisions of and
applicable to the Rights.
(d) In case the Company shall, by dividend or otherwise, at
any time distribute to all holders of its Common Stock cash
(including any distributions of cash out of current or retained
earnings of the Company but excluding any cash that is
distributed as part of a distribution requiring a Conversion
Price adjustment pursuant to paragraph (c) of this Section 5.06)
in an aggregate amount that, together with the sum of (x) the
aggregate amount of any other distributions to all holders of its
Common Stock made in cash plus (y) all Excess Payments, in each
case made within the 12 months preceding the date fixed for
determining the stockholders entitled to such distribution (the
"Distribution Record Date") and in respect of which no Conversion
Price adjustment pursuant to paragraphs (c) or (e) of this
Section 5.06 or this paragraph (d) has been made, exceeds 10% of
the product of the current market price per share (determined as
provided in paragraph (f) of this Section 5.06) of the Common
Stock on the Distribution Record Date times the number of shares
of Common Stock outstanding on the Distribution Record Date
(excluding shares held in the treasury of the Company), the
Conversion Price shall be reduced so that the same shall equal
the price determined by multiplying such Conversion Price in
effect immediately prior to the effectiveness of the Conversion
Price reduction contemplated by this paragraph (d) by a fraction
of which the numerator shall be the current market price per
share (determined as provided in paragraph (f) of this Section
5.06) of the Common Stock on the Distribution Record Date less
the amount of such cash and other consideration (including any
Excess Payments) so distributed applicable to one share (based on
the pro rata portion of the aggregate amount of such cash and
other consideration (including any Excess Payments), divided by
the shares of Common Stock outstanding on the Distribution Record
Date) of Common Stock and the denominator shall be such current
market price per share (determined as provided in paragraph (f)
of this Section 5.06) of the Common Stock on the Distribution
Record Date, such reduction to become effective immediately prior
to the opening of business on the day following the Distribution
Record Date.
(e) In case a tender offer or other negotiated transaction
made by the Company or any Subsidiary for all or any portion of
the Common Stock shall be consummated, if an Excess Payment is
made in respect of such tender offer or other negotiated
transaction and the amount of such Excess Payment, together with
the sum of (x) the aggregate amount of all Excess Payments plus
(y) the aggregate amount of all distributions to all holders of
the Common Stock made in cash (specifically including
distributions of cash out of retained earnings), in each case
made within the 12 months preceding the date of payment of such
current negotiated transaction consideration or expiration of
such current tender offer, as the case may be (the "Purchase
Date"), and as to which no adjustment pursuant to paragraph (c)
or paragraph (d) of this Section 5.06 or this paragraph (e) has
been made, exceeds 10% of the product of the current market price
per share (determined as provided in paragraph (f) of this
Section 5.06) of the Common Stock on the Purchase Date times the
number of shares of Common Stock outstanding (including any
tendered shares but excluding any shares held in the treasury of
the Company) on the Purchase Date, the Conversion Price shall be
reduced so that the same shall equal the price determined by
multiplying such Conversion Price in effect immediately prior to
26
the effectiveness of the Conversion Price reduction contemplated
by this paragraph (e) by a fraction of which the numerator shall
be the current market price per share (determined as provided in
paragraph (f) of this Section 5.06) of the Common Stock on the
Purchase Date less the amount of such Excess Payments and such
cash distributions, if any, applicable to one share (based on the
PRO RATA portion of the aggregate amount of such Excess Payments
and such cash distributions, divided by the shares of Common
Stock outstanding on the Purchase Date) of Common Stock and the
denominator shall be such current market price per share
(determined as provided in paragraph (f) of this Section 5.06) of
the Common Stock on the Purchase Date, such reduction to become
effective immediately prior to the opening of business on the day
following the Purchase Date.
(f) The current market price per share of Common Stock on
any date shall be deemed to be the average of the Daily Market
Prices for the shorter of (i) ten consecutive business days
ending on the last full trading day on the exchange or market
referred to in determining such Daily Market Prices prior to the
time of determination or (ii) the period commencing on the date
next succeeding the first public announcement of the issuance of
such rights or such warrants or such other distribution or such
negotiated transaction through such last full trading day on the
exchange or market referred to in determining such Daily Market
Prices prior to the time of determination.
(g) In any case in which this Section 5.06 shall require
that an adjustment be made immediately following a Record Date,
the Company may elect to defer (but only until five Business Days
following the filing by the Company with the Trustee of the
certificate described in Section 5.10 hereof) issuing to the
holder of any Note converted after such Record Date the shares of
Common Stock and other Capital Stock of the Company issuable upon
such conversion over and above the shares of Common Stock and
other Capital Stock of the Company issuable upon such conversion
only on the basis of the Conversion Price prior to adjustment;
and, in lieu of the shares the issuance of which is so deferred,
the Company shall issue or cause its transfer agents to issue due
bills or other appropriate evidence of the right to receive such
shares.
SECTION 5.07 NO ADJUSTMENT.
No adjustment in the Conversion Price shall be required
until cumulative adjustments amount to 1% or more of the
Conversion Price as last adjusted; PROVIDED, HOWEVER, that any
adjustments which by reason of this Section 5.07 are not required
to be made shall be carried forward and taken into account in any
subsequent adjustment. All calculations under this Article V
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
rights to purchase Common Stock pursuant to a Company plan for
reinvestment of dividends or interest. No adjustment need be made
for a change in the par value or no par value of the Common
Stock.
SECTION 5.08 OTHER ADJUSTMENTS.
(a) In the event that, as a result of an adjustment made
pursuant to Section 5.06 hereof, the holder of any Note
thereafter surrendered for conversion shall become entitled to
receive any shares of Capital Stock of the Company other than
shares of its Common Stock, thereafter the Conversion Price of
such other shares so receivable upon conversion of any Note shall
be subject to adjustment from time to time in a manner and on
terms as nearly equivalent as practicable to the provisions with
respect to Common Stock contained in this Article V.
(b) In the event that shares of Common Stock are not
delivered after the expiration of any of the rights or warrants
referred to in Section 5.06(b) and Section 5.06(c) hereof, the
27
Conversion Price shall be readjusted to the Conversion Price
which would otherwise be in effect had the adjustment made upon
the issuance of such rights or warrants been made on the basis of
delivery of only the number of shares of Common Stock actually
delivered.
SECTION 5.09 ADJUSTMENTS FOR TAX PURPOSES.
The Company may make such reductions in the Conversion
Price, in addition to those required by Section 5.06 hereof, as
it determines to be advisable in order that any stock dividend,
subdivision of shares, distribution or rights to purchase stock
or securities or distribution of securities convertible into or
exchangeable for stock made by the Company to its stockholders
will not be taxable to the recipients thereof.
SECTION 5.10 NOTICE OF ADJUSTMENT.
Whenever the Conversion Price is adjusted, the Company shall
promptly mail to Holders at the addresses appearing on the
Registrar's books a notice of the adjustment and file with the
Trustee an Officers' Certificate briefly stating the facts
requiring the adjustment and the manner of computing it. The
certificate shall be conclusive evidence of the correctness of
such adjustment. Unless and until a Trust Officer of the Trustee
shall receive written notice of an adjustment of the Conversion
Price, the Trustee may assume without inquiry that the Conversion
Price has not been adjusted and that the last Conversion Price of
which it has knowledge remains in effect.
SECTION 5.11 NOTICE OF CERTAIN TRANSACTIONS.
In the event that:
(1) the Company takes any action which would require an adjustment in
the Conversion Price;
(2) the Company takes any action that would require a supplemental
indenture pursuant to Section 5.12; or
(3) there is a dissolution or liquidation of the Company;
the Company shall mail to Holders at the addresses appearing on the
Registrar's books and the Trustee a notice stating the proposed record or
effective date, as the case may be, to permit a Holder of a Note to convert
such Note into shares of Common Stock prior to the Record Date for or the
effective date of the transaction in order to receive the rights, warrants,
securities or assets which a holder of shares of Common Stock on that date
may receive. The Company shall mail the notice at least 15 days before such
date; however, failure to mail such notice or any defect therein shall not
affect the validity of any transaction referred to in clause (1), (2) or (3)
of this Section 5.11.
SECTION 5.12 EFFECT OF RECLASSIFICATIONS, CONSOLIDATIONS, MERGERS OR SALES ON
CONVERSION PRIVILEGE.
If any of the following shall occur, namely: (i) any reclassification
or change of outstanding shares of Common Stock issuable upon conversion of
Notes (other than a change in par value, or from par value to no par value,
or from no par value to par value, or as a result of a subdivision or
combination), (ii) any consolidation or merger to which the Company is a
party other than a merger in which the Company is the continuing corporation
and which does not result in any reclassification of, or change (other than a
change in name, or par value, or from par value to no par value, or from no
par value to par value or as a result of a subdivision or combination) in,
outstanding shares of Common Stock
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or (iii) any sale or conveyance of all or substantially all of the property
or business of the Company as an entirety, then the Company, or such
successor or purchasing corporation, as the case may be, shall, as a
condition precedent to such reclassification, change, consolidation, merger,
sale or conveyance, execute and deliver to the Trustee a supplemental
indenture in form reasonably satisfactory to the Trustee providing that the
holder of each Note then outstanding shall have the right to convert such
Note into the kind and amount of shares of stock and other securities and
property (including cash) receivable upon such reclassification, change,
consolidation, merger, sale or conveyance by a holder of the number of shares
of Common Stock deliverable upon conversion of such Note immediately prior to
such reclassification, change, consolidation, merger, sale or conveyance.
Such supplemental indenture shall provide for adjustments of the Conversion
Price which shall be as nearly equivalent as may be practicable to the
adjustments of the Conversion Price provided for in this Article V. The
foregoing, however, shall not in any way affect the right a holder of a Note
may otherwise have, pursuant to clause (ii) of the last sentence of
subsection (c) of Section 5.06 hereof, to receive Rights upon conversion of a
Note. If, in the case of any such consolidation, merger, sale or conveyance,
the stock or other securities and property (including cash) receivable
thereupon by a holder of Common Stock includes shares of stock or other
securities and property of a corporation other than the successor or
purchasing corporation, as the case may be, in such consolidation, merger,
sale or conveyance, then such 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
of the Company shall reasonably consider necessary by reason of the
foregoing. The provision of this Section 5.12 shall similarly apply to
successive consolidations, mergers, sales or conveyances.
In the event the Company shall execute a supplemental indenture
pursuant to this Section 5.12, the Company shall promptly file with the
Trustee an Officers' Certificate briefly stating the reasons therefor, the
kind or amount of shares of stock or securities or property (including cash)
receivable by holders of the Notes upon the conversion of their Notes after
any such reclassification, change, consolidation, merger, sale or conveyance
and any adjustment to be made with respect thereto.
SECTION 5.13 TRUSTEE'S DISCLAIMER.
The Trustee has no duty to determine when an adjustment under this
Article V should be made, how it should be made or what such adjustment
should be, but may accept as conclusive evidence of the correctness of any
such adjustment, and shall be protected in relying upon, the Officers'
Certificate with respect thereto which the Company is obligated to file with
the Trustee pursuant to Section 5.10 hereof. The Trustee makes no
representation as to the validity or value of any securities or assets issued
upon conversion of Notes, and the Trustee shall not be responsible for the
Company's failure to comply with any provisions of this Article V.
The Trustee shall not be under any responsibility to determine the
correctness of any provisions contained in any supplemental indenture
executed pursuant to Section 5.12, but may accept as conclusive evidence of
the correctness thereof, and shall be protected in relying upon, the
Officers' Certificate with respect thereto which the Company is obligated to
file with the Trustee pursuant to Section 5.12 hereof.
ARTICLE VI.
SUBORDINATION
SECTION 6.01 AGREEMENT TO SUBORDINATE AND RANKING.
The Company, for itself and its successors, and each Holder, by its
acceptance of Notes, agree that the payment of the principal of or interest
on or any other amounts due on the Notes is subordinated in right of payment,
to
29
the extent and in the manner stated in this Article VI, to the prior payment
in full of all existing and future Senior Debt. The Notes shall rank PARI
PASSU with, and shall not be senior in right of payment to such other
Indebtedness of the Company whether outstanding on the date of this Indenture
or hereafter created, incurred, issued or Guaranteed by the Company, where
the instrument creating or evidencing such Indebtedness expressly provides
that such Indebtedness ranks PARI PASSU with the Notes.
SECTION 6.02 NO PAYMENT ON NOTES IF DESIGNATED SENIOR DEBT IN DEFAULT.
Anything in this Indenture to the contrary notwithstanding, no
payment on account of principal of or redemption of, interest on or other
amounts due on the Notes, and no redemption, purchase, or other acquisition
of the Notes, shall be made by or on behalf of the Company, except payments
comprised solely of Permitted Junior Securities, if (i) a default in the
payment of Designated Senior Debt occurs and is continuing beyond any
applicable period of grace (a "Payment Default"), or (ii) a default other
than a Payment Default on any Designated Senior Debt occurs and is continuing
that permits the holders of Designated Senior Debt to accelerate its
maturity, and the trustee receives notice of such default (a "Payment
Blockage Notice") from the Company or from any holders of Designated Senior
Debt or such holder's representative (a "Non-Payment Default"), but only for
the period (the "Payment Blockage Period") commencing on the date of receipt
of the Payment Blockage Notice and ending (unless earlier terminated by
notice given to the Trustee by the holders of such Designated Senior Debt)
(a) in the case of a Payment Default, upon the date on which such Payment
Default is cured or waived or ceases to exist, and (b) in the case of a
Non-Payment Default, the earliest of the date on which such Non-Payment
Default is cured or waived or ceases to exist or 180 days from the date
notice is received, if the maturity of the Designated Senior Debt has not
been accelerated. Upon termination of the Payment Blockage Period, payments
on account of principal of or interest on the Notes (other than, subject to
Section 6.03 hereof, amounts due and payable by reason of the acceleration of
the maturity of the Notes) and redemptions, purchases or other acquisitions
shall be made by or on behalf of the Company. Notwithstanding anything herein
to the contrary, (a) only one Payment Blockage Notice may be given with
respect to the same Non-Payment Default or any other Non-Payment Default on
the same issue of Designated Senior Debt existing or continuing at the time
of such Payment Blockage Notice may be given and (b) no new Payment Blockage
Period may be commenced by the holder or holders of Designated Senior Debt or
their representative or representatives, unless 360 consecutive days have
elapsed since the initial effectiveness of the immediately preceding Payment
Blockage Notice.
In the event that, notwithstanding the provisions of this Section
6.02, payments are made by or on behalf of the Company in contravention of
the provisions of this Section 6.02, such payments shall be held by the
Trustee, any Paying Agent or the holders, as applicable, in trust for the
benefit of, and shall be paid over to and delivered to, the holders of Senior
Debt or their representative or the trustee under the indenture or other
agreement (if any), pursuant to which any instruments evidencing any Senior
Debt may have been issued for application to the payment of all Senior Debt
ratably according to the aggregate amounts remaining unpaid to the extent
necessary to pay all Senior Debt in full in accordance with the terms of such
Senior Debt, after giving effect to any concurrent payment or distribution to
or for the holders of Senior Debt.
The Company shall give prompt written notice to the Trustee and any
Paying Agent of any default or event of default under any Senior Debt or
under any agreement pursuant to which any Senior Debt may have been issued.
SECTION 6.03 DISTRIBUTION ON ACCELERATION OF NOTES; DISSOLUTION AND
REORGANIZATION; SUBROGATION OF NOTES.
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(a) If the Notes are declared due and payable because of the
occurrence of an Event of Default, the Company or the Trustee shall give
prompt written notice to the holders of all Senior Debt or to the trustee(s)
for such Senior Debt of such acceleration.
(b) Upon (i) any acceleration of the principal amount due on the
Notes because of an Event of Default or (ii) any distribution of assets of
the Company upon any dissolution, winding up, liquidation or reorganization
of the Company (whether in bankruptcy, insolvency or receivership proceedings
or upon an assignment for the benefit of creditors or any other dissolution,
winding up, liquidation or reorganization of the Company):
(1) the holders of all Senior Debt shall first be entitled to
receive payment in full of the principal thereof, the interest thereon
and any other amounts due thereon before the Holders are entitled to
receive payment on account of the principal of or interest on or any
other amounts due on the Notes, except payments comprised solely of
Permitted Junior Securities;
(2) any payment or distribution of assets of the Company of any
kind or character, whether in cash, property or securities (other than
Permitted Junior Securities), to which the holders or the Trustee would
be entitled except for the provisions of this Article VI, shall be paid
by the liquidating trustee or agent or other Person making such a
payment or distribution, directly to the holders of Senior Debt (or
their representatives(s) or trustee(s) acting on their behalf), ratably
according to the aggregate amounts remaining unpaid on account of the
principal of or interest on and other amounts due on the Senior Debt
held or represented by each, to the extent necessary to make payment in
full of all Senior Debt remaining unpaid, after giving effect to any
concurrent payment or distribution to the holders of such Senior Debt;
and
(3) in the event that, notwithstanding the foregoing, any payment
or distribution of assets of the Company of any kind or character,
whether in cash, property or securities (other than payments comprised
solely of Permitted Junior Securities), shall be received by the Trustee
or the holders before all Senior Debt is paid in full, such payment or
distribution shall be held in trust for the benefit of, and be paid over
to upon request by a holder of the Senior Debt, the holders of the
Senior Debt remaining unpaid (or their representatives) or trustee(s)
acting on their behalf, ratably as aforesaid, for application to the
payment of such Senior Debt until all such Senior Debt shall have been
paid in full, after giving effect to any concurrent payment or
distribution to the holders of such Senior Debt.
Subject to the payment in full of all Senior Debt, the Holders shall
be subrogated to the rights of the holders of Senior Debt to receive payments
or distributions of cash, property or securities of the Company applicable to
the Senior Debt until the principal of and interest on the Notes shall be
paid in full and, for purposes of such subrogation, no such payments or
distributions to the holders of Senior Debt of cash, property or securities
which otherwise would have been payable or distributable to Holders shall, as
between the Company, its creditors other than the holders of Senior Debt, and
the Holders, be deemed to be a payment by the Company to or on account of the
Senior Debt, it being understood that the provisions of this Article VI are
and are intended solely for the purpose of defining the relative rights of
the Holders, on the one hand, and the holders of Senior Debt, on the other
hand.
Nothing contained in this Article VI or elsewhere in this Indenture
or in the Notes is intended to or shall (i) impair, as between the Company
and its creditors other than the holders of Senior Debt, the obligation of
the Company, which is absolute and unconditional, to pay to the Holders the
principal of and interest on the Notes as and when the same shall become due
and payable in accordance with the terms of the Notes or is intended to or
(ii) affect the relative rights of the Holders and creditors of the Company
other than holders
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of Senior Debt or, as between the Company and the Trustee, the obligations of
the Company to the Trustee, or (iii) prevent the Trustee or the Holders from
exercising all remedies otherwise permitted by applicable law upon default
under this Indenture, subject to the rights, if any, under this Article VI of
the holders of Senior Debt in respect of cash, property and securities of the
Company received upon the exercise of any such remedy.
Upon distribution of assets of the Company referred to in this
Article VI, the Trustee, subject to the provisions of Section 9.01 hereof,
and the Holders shall be entitled to rely upon a certificate 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, the holders of the Senior Debt
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 VI. The Trustee, however, shall not be
deemed to owe any fiduciary duty to the holders of Senior Debt. Nothing
contained in this Article VI or elsewhere in this Indenture, or in any of the
Notes, shall prevent the good faith application by the Trustee of any moneys
which were deposited with it hereunder, prior to its receipt of written
notice of facts which would prohibit such application, for the purpose of the
payment of or on account of the principal of or interest on, the Notes
unless, prior to the date on which such application is made by the Trustee,
the Trustee shall be charged with notice under Section 6.03(d) hereof of the
facts which would prohibit the making of such application.
(c) The provisions of this Article VI shall not be applicable to any
cash, properties or securities received by the Trustee or by any Holder when
received as a holder of Senior Debt and nothing in Section 9.11 hereof or
elsewhere in this Indenture shall deprive the Trustee or such Holder of any
of its rights as such holder.
(d) The Company shall give prompt written notice to the Trustee of any
fact known to the Company which would prohibit the making of any payment of
money to or by the Trustee in respect of the Notes pursuant to the provisions
of this Article VI. The Trustee, subject to the provisions of Section 9.01
hereof, shall be entitled to assume that no such fact exists unless the
Company or any holder of Senior Debt or any trustee therefor has given such
notice to the Trustee. Notwithstanding the provisions of this Article VI or
any other provisions of this Indenture, the Trustee shall not be charged with
knowledge of the existence of any fact which would prohibit the making of any
payment of monies to or by the Trustee in respect of the Notes pursuant to
the provisions in this Article VI, unless, and until three Business Days
after, the Trustee shall have received written notice thereof from the
Company or any Holder or holders of Senior Debt or from any trustee therefor;
and, prior to the receipt of any such written notice, the Trustee, subject to
the provisions of Section 9.01 hereof, shall be entitled in all respects
conclusively to assume that no such facts exist; PROVIDED that if on a date
not less than three Business Days immediately preceding the date upon which
by the terms hereof any such monies may become payable for any purpose
(including, without limitation, the principal of or interest on any Note),
the Trustee shall not have received with respect to such monies the notice
provided for in this Section 6.03(d), than anything herein contained to the
contrary notwithstanding, the Trustee shall have full power and authority to
receive such monies and to apply the same to the purpose for which they were
received, and shall not be affected by any notice to the contrary which may
be received by it on or after such prior date.
The Trustee shall be entitled to rely on the delivery to it of a
written notice by a Person representing himself to be a holder of Senior Debt
(or a trustee on behalf of such holder) to establish that such notice has
been given by a holder of Senior Debt (or a trustee on behalf of any such
holder or holders). In the event that the Trustee determines in good faith
that further evidence is required with respect to the right of any Person as
a holder of Senior Debt to participate in any payment or distribution
pursuant to this
32
Article VI, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of Senior Debt held
by such Person, the extent to which such Person is entitled to participate in
such payment or distribution and any other facts pertinent to the rights of
such Person under this Article VI, and, if such evidence is not furnished,
the Trustee may defer any payment to such Person pending judicial
determination as to the right of such Person to receive such payment; nor
shall the Trustee be charged with knowledge of the curing or waiving of any
default of the character specified in Section 6.02 hereof or that any event
or any condition preventing any payment in respect of the Notes shall have
ceased to exist, unless and until the Trustee shall have received an
Officers' Certificate to such effect.
(e) The provisions of this Section 6.03 applicable to the Trustee
shall also apply to any Paying Agent for the Company.
SECTION 6.04 RELIANCE BY SENIOR DEBT ON SUBORDINATION PROVISIONS.
Each Holder of any Note by his acceptance thereof acknowledges and
agrees that the foregoing subordination provisions are, and are intended to
be, an inducement and a consideration for each holder of any Senior Debt,
whether such Senior Debt was created or acquired before or after the issuance
of the Notes, to acquire and continue to hold, or to continue to hold, such
Senior Debt, and such holder of Senior Debt shall be deemed conclusively to
have relied on such subordination provisions in acquiring and continuing to
hold, or in continuing to hold, such Senior Debt. Notice of any default in
the payment of any Senior Debt, except as expressly stated in this Article
VI, and notice of acceptance of the provisions hereof are hereby expressly
waived. Except as otherwise expressly provided herein, no waiver, forbearance
or release by any holder of Senior Debt under such Senior Debt or under this
Article VI shall constitute a release of any of the obligations or
liabilities of the Trustee or Holders of the Notes provided in this Article
VI.
SECTION 6.05 NO WAIVER OF SUBORDINATION PROVISIONS.
Except as otherwise expressly provided herein, no right of any
present or future holder of any Senior Debt to enforce subordination as
herein provided shall at any time in any way be prejudiced or impaired by any
act or failure to act on the part of the Company or by any act or failure to
act, in good faith, by any such holder, or by any noncompliance by the
Company with the terms, provisions and covenants of this Indenture,
regardless of any knowledge thereof any such holder may have or be otherwise
charged with.
Without in any way limiting the generality of the foregoing paragraph,
the holders of Senior Debt may, at any time and from time to time, without the
consent of, or notice to, the Trustee or the Holders of the Notes, without
incurring responsibility to the Holders of the Notes and without impairing or
releasing the subordination provided in this Article VI or the obligations
hereunder of the Holders of the Notes to the holders of Senior Debt, do any one
or more of the following: (i) change the manner, place or terms of payment of,
or renew or alter, Senior Debt, or otherwise amend or supplement in any manner
Senior Debt or any instrument evidencing the same or any agreement under which
Senior Debt is outstanding; (ii) sell, exchange, release or otherwise dispose of
any property pledged, mortgaged or otherwise securing Senior Debt; (iii) release
any Person liable in any manner for the collection of Senior Debt; and (iv)
exercise or refrain from exercising any rights against the Company or any other
Person.
SECTION 6.06 TRUSTEE'S RELATION TO SENIOR DEBT.
33
The Trustee in its individual capacity shall be entitled to all the
rights set forth in this Article VI in respect of any Senior Debt at any time
held by it, to the same extent as any holder of Senior Debt, and nothing in
Section 9.11 hereof or elsewhere in this Indenture shall deprive the Trustee
of any of its rights as such holder.
With respect to the holders of Senior Debt, the Trustee undertakes to
perform or to observe only such of its covenants and obligation, as are
specifically set forth in this Article VI, and no implied covenants or
obligations with respect to the holders of Senior Debt shall be read into
this Indenture against the Trustee. The Trustee shall not owe any fiduciary
duty to the holders of Senior Debt but shall have only such obligations to
such holders as are expressly set forth in this Article VI.
Each Holder of a Note by his acceptance thereof authorizes and
directs the Trustee on his behalf to take such action as may be necessary or
appropriate to effectuate the subordination provided in this Article VI and
appoints the Trustee his attorney-in-fact for any and all such purposes,
including, in the event of any dissolution, winding up or liquidation or
reorganization under any applicable bankruptcy law of the Company (whether in
bankruptcy, insolvency or receivership proceedings or otherwise), the timely
filing of a claim for the unpaid balance of such Holder's Notes in the form
required in such proceedings and the causing of such claim to be approved. If
the Trustee does not file a claim or proof of debt in the form required in
such proceedings prior to 30 days before the expiration of the time to file
such claims or proofs, then any Holder or holders of Senior Debt or their
representative or representatives shall have the right to demand, xxx for,
collect, receive and receipt for the payments and distributions in respect of
the Notes which are required to be paid or delivered to the holders of Senior
Debt as provided in this Article VI and to file and prove all claims
therefore and to take all such other action in the name of the holders or
otherwise, as such holders of Senior Debt or representative thereof may
determine to be necessary or appropriate for the enforcement of the
provisions of this Article VI.
SECTION 6.07 OTHER PROVISIONS SUBJECT HERETO.
Expect as expressly stated in this Article VI, notwithstanding
anything contained in this Indenture to the contrary, all the provisions of
this Indenture and the Notes are subject to the provisions of this Article
VI. However, nothing in this Article VI shall apply to or adversely affect
the claims of, or payment, to, the Trustee pursuant to Section 9.07 hereof.
Notwithstanding the foregoing, the failure to make a payment on account of
principal of or interest on the Notes by reason of any provision of this
Article VI shall not be construed as preventing the occurrence of an Event of
Default under Section 8.01 hereof.
ARTICLE VII
SUCCESSORS
SECTION 7.01 LIMITATION ON MERGER, SALE OR CONSOLIDATION.
The Company may not, directly or indirectly, consolidate with or
merge with or into, or sell, lease or otherwise dispose of all or
substantially all of its assets, on a consolidated basis, whether in a single
transaction or a series of related transactions, to another person or group
of affiliated persons, unless:
(a) the Company is the resulting or surviving corporation,
or such successor, transferee or lessee, if other than the
Company, is a corporation organized under the laws of the United
States, any state thereof or the District of Columbia and
expressly assumes the Obligations of the Company under this
Indenture and the Notes by means of a supplemental indenture
entered into with the Trustee; and
34
(b) after giving effect to such transaction, no Default or
Event of Default shall have occurred and be continuing.
Upon any permitted consolidation, merger conveyance, transfer or
lease of the Company's properties and assets in accordance with the
foregoing, the successor corporation formed by such consolidation or into
which the Company is merged or 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 the Indenture with the same effect as if such
successor corporation had been named therein in the same manner as the
Company is named, and when a successor corporation duly assumes all of the
obligations of the Company pursuant hereto and pursuant to the Notes (except
in the case of a lease), the Company will be released from its obligations
and covenants under the Indenture and the Notes, except as to any obligations
or covenants that arise from or as a result of such transaction.
For purposes of the foregoing, the transfer, by lease, assignment,
sale or otherwise, of all or substantially all of the properties and assets
of one or more Subsidiaries, which properties and assets, if held by the
Company instead of such Subsidiary, would constitute all or substantially all
of the Company's properties and assets, shall be deemed to be the transfer
of all or substantially all of the Company's properties and assets.
ARTICLE VIII.
DEFAULTS AND REMEDIES
SECTION 8.01 EVENTS OF DEFAULT.
An "Event of Default" occurs if:
(a) the Company defaults in the payment of interest on any
Note when the same becomes due and payable and the Default
continues for a period of 30 days after the date due and payable;
(b) the Company defaults in the payment of the principal of
any Note when the same becomes due and payable at maturity, upon
optional redemption, in connection with a Change in Control
Offer, upon declaration or otherwise;
(c) the Company fails to observe or perform for a period of
30 days after notice any covenant or agreement contained in
Sections 4.07 and 7.01 hereof (other than, in the case of Section
4.07, a failure to purchase Notes in connection with a Change in
Control Offer) hereof;
(d) the Company fails to observe or perform any other
covenant or agreement contained in this Indenture or the Notes,
required by it to be performed and the Default continues for a
period of 60 days after notice from the Trustee to the Company or
from the Holders of 25% in aggregate principal amount of the then
outstanding Notes to the Company and the Trustee;
(e) the Company or any of its Subsidiaries fails to pay when
due principal or interest on Indebtedness for money borrowed by
the Company or its Subsidiaries, the principal amount of which
exceeds $20.0 million, or the acceleration of such Indebtedness,
that is not cured or withdrawn within 15 days after the date of
written notice from the Trustee to the Company or from Holders of
35
25% in the aggregate principal amount of the then outstanding
Notes to the Company and the Trustee;
(f) the Company or any of its Subsidiaries that is a
Significant Subsidiary or any group of two or more Subsidiaries
that, taken as a whole, would constitute a Significant Subsidiary
pursuant to or within the meaning of any Bankruptcy Law:
(i) commences a voluntary case;
(ii) consents to the entry of an order for relief against it
in an involuntary case in which it is the debtor;
(iii) consents to the appointment of a Custodian of it or
for all or substantially all of its property;
(iv) makes a general assignment for the benefit of its
creditors; or
(v) generally is unable to pay its debts as the same become
due; or
(g) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(i) is for relief against the Company or any of its
Subsidiaries that is a Significant Subsidiary or any group of two
or more Subsidiaries that, taken as a whole, would constitute a
Significant Subsidiary in an involuntary case;
(ii) appoints a Custodian of the Company or any of its
Subsidiaries that is a Significant Subsidiary or any group of two
or more Subsidiaries that, taken as a whole, would constitute a
Significant Subsidiary or for all or substantially all of its
property;
(iii) orders the liquidation of the Company or any of its
Subsidiaries that is a Significant Subsidiary or any group of two
or more Subsidiaries that, taken as a whole, would constitute a
Significant Subsidiary, and the order or decree remains unstayed
and in effect for 60 days.
The term "Bankruptcy Law" means Title 11, U.S. Code or any similar Federal,
state or foreign law for the relief of debtors or the protection of
creditors. The term "Custodian" means any receiver, trustee, assignee,
liquidator or similar official under any Bankruptcy Law.
SECTION 8.02 ACCELERATION.
If an Event of Default (other than an Event of Default specified in
clauses (f) or (g) of Section 8.01 hereof) occurs and is continuing, the
Trustee by notice to the Company, or the Holders of at least 25% in principal
amount of the then outstanding Notes by notice to the Company and the
Trustee, may declare all the Notes to be due and payable. Upon such
declaration, the principal of, premium, if any, and interest on the Notes
shall be due and payable immediately. If an Event of Default specified in
clause (f) or (g) of Section 8.01 hereof
36
occurs with respect to the Company, such an amount shall IPSO FACTO become
and be immediately due and payable without any declaration or other act on
the part of the Trustee or any Holder. In addition, if an Event of Default
specified in clause (f) or (g) of Section 8.01 hereof occurs with respect to
any Significant Subsidiary or Significant Subsidiaries of the Company, the
Trustee by notice to the Company, or Holders of at least 25% in principal
amount of the then outstanding Notes by notice to the Company and the
Trustee, may declare all the Notes due and payable.
SECTION 8.03 OTHER REMEDIES.
If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy to collect the payment of principal or 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 it does not possess any
of the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies
are cumulative to the extent permitted by law.
SECTION 8.04 WAIVER OF PAST DEFAULTS.
The Holders of a majority in principal amount of the then outstanding
Notes by written notice to the Trustee may on behalf of all of the Holders of
the Notes waive an existing Default or Event of Default and its consequences
except a continuing Default or Event of Default in the payment of the
principal of or interest on any Note. When a Default or Event of Default is
waived, it is cured and ceases; but no such waiver shall extend to any
subsequent or other Default or impair any right consequent thereon.
SECTION 8.05 CONTROL BY MAJORITY.
The Holders of a majority in principal amount of the then outstanding
Notes may direct the time, method and place of conducting any proceeding for
any remedy available to the Trustee or exercising any trust or power
conferred on it. However, the Trustee may refuse to follow any direction that
conflicts with law or this Indenture, is unduly prejudicial to the rights of
other Holders, or would involve the Trustee in personal liability.
SECTION 8.06 LIMITATION ON SUITS.
A Holder may pursue a remedy with respect to this Indenture or the
Notes only if:
(a) the Holder gives to the Trustee notice of a continuing
Event of Default;
(b) the Holders of at least 25% in principal amount of the
then outstanding Notes make a request to the Trustee to pursue
the remedy;
(c) such Holder or Holders offer to the Trustee indemnity
satisfactory to the Trustee against any loss, liability or
expense;
(d) the Trustee does not comply with the request within 60
days after receipt of the request and the offer of indemnity; and
(e) during such 60-day period the Holders of a majority in
principal amount of the then outstanding Notes do not give the
Trustee a direction inconsistent with the request.
37
A Holder may not use this Indenture to prejudice the rights of
another Holder or to obtain a preference or priority over another Holder.
SECTION 8.07 RIGHTS OF HOLDERS TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Indenture, the right of
any Holder of a Note to receive payment of principal, and interest on the
Note, on or after the respective due dates expressed in the Note, or to bring
suit for the enforcement of any such payment on or after such respective
dates, shall not be impaired or affected without the consent of the Holder
made pursuant to this Section 8.07.
SECTION 8.08 COLLECTION SUIT BY TRUSTEE.
If an Event of Default specified in Section 8.01(a) or (b), hereof
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
of principal and interest remaining unpaid on the Notes and interest on
overdue principal and interest and such further amount as shall be sufficient
to cover the costs and, to the extent lawful, expenses of collection,
including the reasonable compensation, expenses, disbursements and advances
of the Trustee, its agents and counsel.
SECTION 8.09 TRUSTEE MAY FILE PROOFS OF CLAIM.
The Trustee may file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee and the Holders allowed in any judicial proceedings relative to the
Company, its creditors or its property. Nothing contained herein 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 8.10 PRIORITIES.
If the Trustee collects any money pursuant to this Article, it shall pay
out the money in the following order:
First: to the Trustee for amounts due under Section 9.07 hereof;
Second: to the holders of Senior Debt to the extent required by
Article VI;
Third: to Holders for amounts due and unpaid on the Notes for
principal and interest (and Special Interest, if applicable),
ratably, without preference or priority of any kind, according to
the amounts due and payable on the Notes for principal and interest,
respectively; and
Fourth: to the Company.
The Trustee may fix a record date and payment date for any payment to
Holders made pursuant to this Section 8.10.
SECTION 8.11 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 a Trustee, a court in its discretion may require the filing by any
party
38
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party
litigant. This Section 8.11 does not apply to a suit by the Trustee, a suit
by a Holder pursuant to Section 8.07 hereof, or a suit by Holders of more
than 10% in principal amount of the then outstanding Notes.
ARTICLE IX.
TRUSTEE
SECTION 9.01 DUTIES OF TRUSTEE.
(a) If an Event of Default has occurred and is continuing,
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.
(b) Except during the continuance of an Event of Default:
(i) the Trustee need perform only those duties that are
specifically set forth in this Indenture and no others and (ii)
in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates
or opinions furnished to the Trustee and conforming to the
requirements of this Indenture. However, the Trustee shall
examine the certificates and opinions to determine whether or not
they conform to the requirements of this Indenture and to confirm
the correctness of all mathematical computations.
(c) The Trustee may not be relieved from liability for its
own negligent action, its own negligent failure to act, or its
own willful misconduct, except that: (i) this paragraph does not
limit the effect of paragraph (b) of this Section 9.01; (ii) the
Trustee shall not be liable for any error of judgment made in
good faith by a Trust Officer, unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts and
(iii) the Trustee shall not be liable with respect to any action
it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 8.05 hereof. (d)
Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b) and (c) of this Section
9.01.
(e) The Trustee may refuse to perform any duty or exercise
any right or power unless it receives indemnity satisfactory to
it against any loss, liability or expense.
(f) The Trustee shall not be liable for interest on any
money received by it except as the Trustee may agree in writing
with the Company. Money held in trust by the Trustee need not be
segregated from other funds except to the extent required by law.
SECTION 9.02 RIGHTS OF TRUSTEE.
(a) The Trustee may rely on any document believed by it to
be genuine and to have been signed or presented by the proper
Person. The Trustee need not investigate any fact or matter
stated in the document.
39
(b) Before the Trustee acts or refrains from acting, it may
require an Officers' Certificate or an Opinion of Counsel, or
both. The Trustee shall not be liable for any action it takes or
omits to take in good faith in reliance on such Officers'
Certificate or Opinion of Counsel.
(c) The Trustee may act through agents and shall not be
responsible for the misconduct or negligence of any agent
appointed with due care.
(d) The Trustee shall not be liable for any action it takes
or omits to take in good faith which it believes to be authorized
or within its rights or powers.
(e) The Trustee shall not be charged with knowledge of any
Event of Default under subsection (c), (d), (e) or (f) (and
subsection (a) or (b) if the Trustee does not act as Paying
Agent) of Section 8.01 or of the identity of any Significant
Subsidiary or of any group of two or more Subsidiaries that,
taken as a whole, would constitute a Significant Subsidiary
unless either (1) a Trust Officer of the Trustee assigned to its
corporate trust department shall have actual knowledge thereof,
or (2) the Trustee shall have received notice thereof in
accordance with Section 12.02 hereof from the Company or any
Holder.
SECTION 9.03 INDIVIDUAL RIGHTS OF TRUSTEE.
The Trustee in its individual or any other capacity may become the owner
or pledgee of Notes and may otherwise deal with the Company or an Affiliate with
the same rights it would have if it were not Trustee. Any Agent may do the same
with like rights. However, the Trustee is subject to Sections 9.10 and 9.11
hereof.
SECTION 9.04 TRUSTEE'S DISCLAIMER.
The Trustee makes no representation as to the validity or adequacy of
this Indenture or the Notes, it shall not be accountable for the Company's
use of the proceeds from the Notes, and it shall not be responsible for any
statement of the Company in the Indenture or any statement in the Notes other
than its authentication or for compliance by the Company with the
Registration Rights Agreement.
SECTION 9.05 NOTICE OF DEFAULTS.
If a Default or Event of Default occurs and is continuing and if it
is known to the Trustee, the Trustee shall mail to Holders a notice of the
Default or Event of Default within 90 days after it occurs. Except in the
case of a Default or Event of Default in payment on any Note, the Trustee may
withhold the notice if and so long as a committee of its Trust Officers in
good faith determines that withholding the notice is in the interests of
Holders.
SECTION 9.06 REPORTS BY TRUSTEE TO HOLDERS.
Within 60 days after the reporting date stated in Section 12.10, the
Trustee shall mail to Holders a brief report dated as of such reporting date
that complies with TIA Section 313(a) if and to the extent required by such
Section 313(a). The Trustee also shall comply with TIA Section 313(b)(2). The
Trustee shall also transmit by mail all reports as required by TIA Section
313(c).
40
A copy of each report at the time of its mailing to Holders shall be
filed with the SEC and each stock exchange on which the Notes are listed. The
Company shall notify the Trustee when the Notes are listed on any stock
exchange.
SECTION 9.07 COMPENSATION AND INDEMNITY.
The Company shall pay to the Trustee from time to time reasonable
compensation for its services hereunder. The Trustee's compensation shall not
be limited by any law on compensation of a trustee of an express trust. The
Company shall reimburse the Trustee upon request for all reasonable
disbursements, expenses and advances incurred or made by it. Such
disbursements and expenses xxx include the reasonable disbursements,
compensation and expenses of the Trustee's agents and counsel.
The Company shall indemnify the Trustee against any claims, demands,
expenses (including but not limited to reasonable compensation, fees,
disbursements and expenses of the Trustee's agents and counsel), losses,
damages or liabilities incurred by it, except as set forth in the next
paragraph, arising out of, related to, or in connection with the acceptance
or administration of this trust and its rights or duties hereunder, including
the reasonable costs and expenses, and the costs and expenses of enforcing
this Indenture (including this Section 9.07) against the Company and of
defending itself against any claim (whether asserted by the Company, or any
Holder or any other person) or liability in connection with the exercise or
performance of any of its powers or duties hereunder. The Trustee shall
notify the Company promptly of any claim for which it may seek indemnity. The
Company shall defend the claim and the Trustee shall cooperate in the
defense. The Trustee may have separate counsel and the Company shall pay the
reasonable fees, disbursements and expenses of such counsel. The Company need
not pay for any settlement made without its consent, which consent shall not
be unreasonably withheld.
The Company need not reimburse any expense or indemnify against any
loss or liability incurred by the Trustee through negligence or bad faith.
To secure the Company's payment obligations in this Section 9.07, the
Trustee shall have a lien prior to the Notes on all money or property held or
collected by the Trustee, except money or property held in trust to pay
principal and interest on particular Notes.
Without prejudice to any other rights available to the Trustee under
applicable law, when the Trustee incurs expenses or renders services after an
Event of Default specified in Section 8.01(f) or (g) hereof occurs, the
expenses and the compensation for the services are intended to constitute
expenses of administration under any Bankruptcy Law.
All amounts owing to the Trustee under this Section 9.07 shall be
payable by the Company in United States dollars.
SECTION 9.08 REPLACEMENT OF TRUSTEE.
A resignation or removal of the Trustee and appointment of a
successor Trustee shall become effective only upon the successor Trustee's
acceptance of appointment as provided in this Section 9.08.
The Trustee may resign by so notifying the Company. The Holders of a
majority in principal amount of the then outstanding Notes may remove the
Trustee by so notifying the Trustee and the Company. The Company may remove
the Trustee if:
41
(a) the Trustee fails to comply with Section 9.10 hereof,
unless the Trustee's duty to resign is stayed as provided in TIA
ss. 310(b);
(b) the Trustee is adjudged a bankrupt or an insolvent or an
order for relief is entered with respect to the Trustee under any
Bankruptcy Law;
(c) a Custodian or public officer takes charge of the
Trustee or its property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a
successor Trustee. Within one year after the successor Trustee takes office,
the Holders of a majority in principal amount of the then outstanding Notes
may appoint a successor Trustee to replace the successor Trustee appointed by
the Company.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or
the Holders of at least 10% in principal amount of the then outstanding Notes
may petition any court of competent jurisdiction for the appointment of a
successor Trustee.
If the Trustee fails to comply with Section 9.10 hereof, unless the
Trustee's duty to resign is stayed as provided in TIA ss. 310(b), any Holder
who has been a bona fide Holder of a Note for at least six months may
petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and
the successor Trustee shall have all the rights, powers and duties of the
Trustee under this Indenture. The successor Trustee shall mail a notice of
its succession to Holders. The retiring Trustee shall promptly transfer all
property held by it as Trustee to the successor Trustee, subject to the lien
provided for in Section 9.07 hereof. Notwithstanding replacement of the
Trustee pursuant to this Section 9.08 hereof, the Company's obligations under
Section 9.07 hereof shall continue for the benefit of the retiring trustee
with respect to expenses and liabilities incurred by it prior to such
replacement.
SECTION 9.09 SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Trustee consolidates, merges or converts into, or transfers all
or substantially all of its corporate trust business (including the
administration of this Indenture) to, another corporation, the successor
corporation without any further act shall be the successor Trustee.
SECTION 9.10 ELIGIBILITY; DISQUALIFICATION.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA Section 310(a)(1) and (5). The Trustee shall always have a
combined capital and surplus as stated in Section 12.10 hereof. The Trustee
is subject to TIA Section 310(b).
SECTION 9.11 PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
42
The Trustee is subject to TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated therein.
ARTICLE X.
DISCHARGE OF INDENTURE
SECTION 10.01 TERMINATION OF COMPANY'S OBLIGATIONS.
This Indenture shall cease to be of further effect (except that the
Company's obligations under Sections 9.07 and 10.02 hereof shall survive)
when all outstanding Notes theretofore authenticated and issued have been
delivered to the Trustee for cancellation and the Company has paid all sums
payable hereunder.
SECTION 10.02 REPAYMENT TO COMPANY.
The Trustee and the Paying Agent shall promptly pay to the Company
upon request any excess money or securities held by them at any time.
The Trustee and the Paying Agent shall pay to the Company upon
request any money held by them for the payment of principal or interest that
remains unclaimed for two years after the date upon which such payment shall
have become due; PROVIDED, HOWEVER, that the Company shall have first caused
notice of such payment to the Company to be mailed to each Holder entitled
thereto no less than 30 days prior to such payment. After payment to the
Company, the Trustee and the Paying Agent shall have no further liability
with respect to such money and Holders entitled to the money must look to the
Company for payment as general creditors unless any applicable abandoned
property law designates another Person.
ARTICLE XI.
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 11.01 WITHOUT CONSENT OF HOLDERS.
The Company and the Trustee may amend or supplement this Indenture or
the Notes without the consent of any Holder:
(a) to cure any ambiguity, omission, defect or
inconsistency;
(b) to provide for uncertificated Notes in addition to or in
place of certificated Notes;
(c) to comply with Sections 5.12 and 7.01 hereof;
(d) to reduce the conversion price;
(e) to make any other change that would provide any
additional rights or benefits to the Holders or that does not
adversely affect the legal rights hereunder of any such Holder;
or
(f) to comply with the requirements of the SEC in order to
maintain the qualification of this Indenture under the TIA.
43
SECTION 11.02 WITH CONSENT OF HOLDERS.
Subject to Section 8.07 hereof, the Company and the Trustee may amend
or supplement this Indenture or the Notes with the written consent of the
Holders of at least a majority in principal amount of the then outstanding
Notes. Subject to Sections 8.04 and 8.07 hereof, the Holders of a majority in
principal amount of the Notes then outstanding may also waive compliance in a
particular instance by the Company with any provision of this Indenture or
the Notes. However, without the consent of each Holder affected, an
amendment, supplement or waiver under this Section 11.02 may not:
(a) reduce the principal amount of Notes whose Holders must
consent to an amendment, supplement or waiver;
(b) reduce the principal of or change the fixed maturity of
any Note or alter the provisions of Section 7 of the Notes,
except for repurchases of the Notes pursuant to Section 3.09 of
this Indenture and Section 10 of the Notes;
(c) reduce the rate of or change the time for payment or
accrual of interest on any Note;
(d) waive a default in the payment of the principal of or
interest on any Note, except a rescission of acceleration of the
Notes by the Holders of at least a majority in aggregate
principal amount of the Notes and a waiver of the payment default
that resulted from such acceleration;
(e) make any Note payable in money other than that stated in
the Notes;
(f) make any change in Section 8.04 or 8.07 hereof;
(g) waive a redemption payment with respect to any Note;
(h) impair the right to convert the Notes into Common Stock;
(i) modify Article V or VI in a manner adverse to the
Holders of Notes; and
(j) make any change in the foregoing amendment and waiver
provisions of this Article XI.
To secure a consent of the Holders under this Section 11.02, it shall
not be necessary for the Holders to approve the particular form of any
proposed amendment, supplement or waiver, but it shall be sufficient if such
consent approves the substance thereof.
After an amendment, supplement or waiver under this Section 11.02
becomes effective, the Company shall mail to Holders a notice briefly
describing the amendment or waiver.
SECTION 11.03 COMPLIANCE WITH TRUST INDENTURE ACT.
Every amendment to this Indenture or the Notes shall be set forth in
a supplemental indenture that complies with the TIA as then in effect.
SECTION 11.04 REVOCATION AND EFFECT OF CONSENTS.
Until an amendment, supplement or waiver becomes effective, a consent
to it by a Holder of a Note is a continuing consent by the Holder and every
44
subsequent Holder of a Note or portion of a Note that evidences the same debt
as the consenting Holder's Note, even if notation of the consent is not made
on any Note. However, any such Holder or subsequent Holder may revoke the
consent as to his Note or portion of a Note if the Trustee receives the
notice of revocation before the date on which the Trustee receives an
Officers' Certificate certifying that the Holders of the requisite principal
amount of Notes have consented to the amendment, supplement or waiver.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Holders entitled to consent to any amendment,
supplement or waiver. If a record date is fixed, then notwithstanding the
provisions of the immediately preceding paragraph, those Persons who were
Holders at such record date (or their duly designated proxies), and only
those Persons, shall be entitled to consent to such amendment, supplement or
waiver or to revoke any consent previously given, whether or not such Persons
continue to be Holders after such record date. No consent shall be valid or
effective for more than 90 days after such record date unless consents from
Holders of the principal amount of Notes required hereunder for such
amendment or waiver to be effective shall have also been given and not
revoked within such 90-day period.
After an amendment, supplement or waiver becomes effective it shall
bind every Holder, unless it is of the type described in any of clauses (a)
through (j) of Section 11.02 hereof. In such case, the amendment or waiver
shall bind each Holder who has consented to it and every subsequent Holder
that evidences the same debt as the consenting Holder's Note.
SECTION 11.05 NOTATION ON OR EXCHANGE OF NOTES.
The Trustee may place an appropriate notation about an amendment or
waiver on any Note thereafter authenticated. The Company in exchange for all
Notes may issue and the Trustee shall authenticate new Notes that reflect the
amendment or waiver.
Failure to make such notation on a Note or to issue a new Note as
aforesaid shall not affect the validity and effect of such amendment or
waiver.
SECTION 11.06 TRUSTEE PROTECTED.
The Trustee shall sign all supplemental indentures, except that the
Trustee may, but need not, sign any supplemental indenture that adversely
affects its rights.
ARTICLE XII.
MISCELLANEOUS
SECTION 12.01 TRUST INDENTURE ACT CONTROLS.
This Indenture is subject to the provisions of the TIA that are
required to be incorporated into this Indenture (or, prior to the
registration of the Notes pursuant to the Registration Rights Agreement,
would be required to be incorporated into this Indenture if it were qualified
under the TIA), and shall, to the extent applicable, be governed by such
provisions. If any provision of this Indenture limits, qualifies, or
conflicts with another provision which is required (or would be so required)
to be incorporated in this Indenture by the TIA, the incorporated provision
shall control.
SECTION 12.02 NOTICES.
45
Any notice or communication by the Company or the Trustee to the
other is duly given if in writing and delivered in Person or mailed by first
class mail to the other's address stated in Section 12.10 hereof. The Company
or the Trustee by notice to the other may designate additional or different
addresses for subsequent notices or communications.
Any notice or communication to a Holder shall be mailed by first
class mail to his address shown on the register kept by the Registrar.
Failure to mail a notice or communication to a Holder or any defect in it
shall not affect its sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it.
If the Company mails a notice or communication to Holders, it shall
mail a copy to the Trustee and each Agent at the same time.
All other notices or communications shall be in writing.
In case by reason of the suspension of regular mail service, or by
reason of any other cause, it shall be impossible to mail any notice as
required by the Indenture, then such method of notification as shall be made
with the approval of the Trustee shall constitute a sufficient mailing of
such notice.
SECTION 12.03 COMMUNICATION BY HOLDERS WITH OTHER HOLDERS.
Holders may communicate pursuant to TIA Section 312(b) with other
Holders with respect to their rights under this Indenture or the Notes. The
Company, the Trustee, the Registrar 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:
(a) 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
(b) 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 certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than pursuant to
Section 4.03) shall include:
(a) a statement that the Person signing such certificate or
rendering such opinion has read such covenant or condition;
(b) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or
opinions contained in such certificate or opinion are based;
46
(c) a statement that, in the opinion of such Person, such
Person 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
(d) a statement as to whether or not, in the opinion of such
Person, such condition or covenant has been complied with.
SECTION 12.06 RULES BY TRUSTEE AND AGENTS.
The Trustee may make reasonable rules for action by, or a meeting of,
Holders. The Registrar or Paying Agent may make reasonable rules and set
reasonable requirements for its functions.
SECTION 12.07 LEGAL HOLIDAYS.
A "Legal Holiday" is a Saturday, a Sunday or a day on which banking
institutions in the State of New York are not required to be open. If a
payment date is a Legal Holiday at a place of payment, payment may be made at
that place on the next succeeding day that is not a Legal Holiday, and no
interest shall accrue for the intervening period. If any other operative date
for purposes of this Indenture shall occur on a Legal Holiday then for all
purposes the next succeeding day that is not a Legal Holiday shall be such
operative date.
SECTION 12.08 NO RECOURSE AGAINST OTHERS.
A director, officer, employee, incorporator or shareholder of the
Company, as such, 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. Each Holder by
accepting a Note waives and releases all such liability. The waiver and
release are part of the consideration for the issue of the Notes.
SECTION 12.09 COUNTERPARTS AND FACSIMILE SIGNATURES.
This Indenture may be executed by manual or facsimile signature in any
number of counterparts and by the parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement.
SECTION 12.10 VARIABLE PROVISIONS.
"Officer" means the Chairman of the Board, the President, any Vice
President, the Chief Financial Officer, the Treasurer, the Secretary, any
Assistant Treasurer or any Assistant Secretary of the Company.
The first certificate pursuant to Section 4.03 hereof shall be for
the fiscal year ended March 30, 200 .
The reporting date for Section 9.06 hereof is May 15, of each year.
The first reporting date is May 15, 2001.
The Trustee shall always have a combined capital and surplus of at
least $100,000,000 as set forth in its most recent published annual report of
condition.
47
The Company's address is:
Peregrine Systems, Inc.
0000 Xxxxxx Xxxxxx Xxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Attention: Chief Financial Officer
The Trustee's address is:
State Street Bank and Trust Company of California, N.A.
000 Xxxx 0xx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Corporate Trust Administration
Peregrine Systems, Inc. 5 1/2% Convertible Subordinated Notes due 2007)
SECTION 12.11 GOVERNING LAW, SUBMISSION TO JURISDICTION.
THE INTERNAL LAWS OF THE STATE OF NEW YORK SHALL GOVERN THIS
INDENTURE AND THE NOTES, WITHOUT REGARD TO THE CONFLICT OF LAWS PROVISIONS
THEREOF.
SECTION 12.12 NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret another indenture, loan or
debt agreement of the Company or an Affiliate. Any such indenture, loan or debt
agreement may not be used to interpret this Indenture.
SECTION 12.13 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 12.14 SEVERABILITY.
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 12.15 TABLE OF CONTENTS, HEADINGS, ETC.
The Table of Contents, Cross-Reference Table, and headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part hereof, and shall in no way
modify or restrict any of the terms or provisions hereof.
48
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, all as of the date first written above.
PEREGRINE SYSTEMS, INC., as Company
By: /s/ XXXX X. XXXXXX
---------------------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President and General Counsel
STATE STREET BANK AND TRUST COMPANY OF
CALIFORNIA, N.A., as Trustee
By: /s/ XXXX XXXXXX
---------------------------------------
Name: Xxxx Xxxxxx
Title: Assistant Vice President
49
EXHIBIT A
[FORM OF FACE OF NOTE]
[Global Notes Legend]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"),
NEW YORK, NEW YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC) ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC 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 THE
INDENTURE REFERRED TO ON THE REVERSE HEREOF.
[Restricted Notes Legend]
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"). THE HOLDER HEREOF, BY PURCHASING
THIS SECURITY, AGREES FOR THE BENEFIT OF THE COMPANY THAT THIS SECURITY MAY NOT
BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED (X) PRIOR TO THE EXPIRATION OF THE
HOLDING PERIOD UNDER RULE 144(k) (OR ANY SUCCESSOR THERETO) UNDER THE SECURITIES
ACT WHICH IS APPLICABLE TO THIS SECURITY OR (Y) BY ANY HOLDER THAT WAS AN
"AFFILIATE" (WITHIN THE MEANING OF RULE 144 UNDER THE SECURITIES ACT) OF THE
COMPANY AT ANY TIME DURING THE THREE MONTHS PRECEDING THE DATE OF SUCH TRANSFER,
IN EITHER CASE, OTHER THAN (1) TO THE COMPANY, (2) SO LONG AS THIS SECURITY IS
ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE
144A"), TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A, PURCHASING FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER (AS INDICATED BY
THE BOX CHECKED BY THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER APPLICABLE TO
THIS SECURITY, THE FORM OF WHICH MAY BE OBTAINED FROM THE COMPANY OR THE
TRUSTEE), (3) IN AN OFFSHORE TRANSACTION (AS DEFINED IN REGULATION S UNDER THE
SECURITIES ACT) IN ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT (AS
INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER
APPLICABLE TO THIS SECURITY, THE FORM OF WHICH MAY BE OBTAINED FROM THE COMPANY
OR THE TRANSFER AGENT), (4) TO AN INSTITUTION THAT IS AN "ACCREDITED INVESTOR"
AS DEFINED IN RULE 501 (a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT
("INSTITUTIONAL ACCREDITED INVESTOR") (AS INDICATED BY THE BOX CHECKED BY THE
TRANSFEROR ON THE CERTIFICATE OF TRANSFER APPLICABLE TO THIS SECURITY, THE FORM
OF WHICH MAY BE OBTAINED FROM THE COMPANY OR THE TRANSFER AGENT) THAT IS
ACQUIRING THIS SECURITY FOR INVESTMENT PURPOSES AND NOT FOR DISTRIBUTION, AND
THAT, PRIOR TO SUCH TRANSFER, DELIVERS TO THE COMPANY AND THE TRANSFER AGENT A
SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE
RESTRICTIONS ON TRANSFER OF THE SECURITY EVIDENCED HEREBY (THE FORM OF WHICH
LETTER MAY BE OBTAINED FROM THE COMPANY OR THE TRANSFER AGENT), (5) PURSUANT TO
AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 (IF
APPLICABLE) UNDER THE SECURITIES ACT (AS INDICATED BY THE BOX CHECKED BY THE
TRANSFEROR ON THE CERTIFICATE OF TRANSFER APPLICABLE TO THIS SECURITY, THE FORM
OF WHICH MAY BE OBTAINED FROM THE COMPANY OR THE TRANSFER AGENT) OR (6) PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH CASE IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES. PRIOR TO A TRANSFER OF THIS SECURITY (OTHER THAN A TRANSFER PURSUANT TO
CLAUSE (6) ABOVE), THE HOLDER OF THIS SECURITY MUST, PRIOR TO SUCH TRANSFER,
FURNISH TO THE COMPANY AND THE TRANSFER AGENT SUCH CERTIFICATES AND OTHER
INFORMATION AND, IN THE CASE OF A TRANSFER PURSUANT TO CLAUSE (5) ABOVE, A LEGAL
OPINION AS THEY MAY REASONABLY REQUIRE TO CONFIRM THAT ANY TRANSFER BY IT OF
THIS SECURITY COMPLIES WITH THE FOREGOING RESTRICTIONS. THE HOLDER HEREOF, BY
PURCHASING THIS SECURITY, REPRESENTS AND AGREES FOR THE BENEFIT OF THE COMPANY
THAT IT IS (1) AN INSTITUTION THAT IS AN "ACCREDITED INVESTOR" AS DEFINED IN
RULE 501 (a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT AND THAT IT IS HOLDING
THIS SECURITY FOR INVESTMENT PURPOSES AND NOT FOR DISTRIBUTION OR (2) NOT A U.S.
PERSON AND IS OUTSIDE THE UNITED STATES WITHIN THE MEANING OF (OR AN ACCOUNT
SATISFYING THE REQUIREMENTS OF PARAGRAPH (k)(2) OF RULE 902 UNDER) REGULATION S
UNDER THE SECURITIES ACT. IN ANY CASE THE HOLDER HEREOF WILL NOT, DIRECTLY OR
INDIRECTLY, ENGAGE IN ANY HEDGING TRANSACTION WITH REGARD TO THIS SECURITY OR
ANY COMMON STOCK ISSUABLE UPON CONVERSION OF THIS SECURITY EXCEPT AS PERMITTED
BY THE SECURITIES ACT.
No.
------------- $
--------------
CUSIP No.
-----------
5 1/2% CONVERTIBLE SUBORDINATED NOTE DUE 2007
Peregrine Systems, Inc.
Peregrine Systems, Inc., a Delaware corporation (the
"COMPANY"), promises to pay to _____________ or registered assigns, the
principal sum of _______________________ Dollars ($________), or such other
amount as is indicated on Schedule A hereof*, on November 15, 2007, subject to
the further provisions of this Note set forth on the reverse hereof which
further provisions shall for all purposes have the same effect as if set forth
at this place.
Interest Payment Dates: May 15 and November 15, commencing
May 15, 2001
Record Dates: May 1 and November 1
[REMAINDER OF PAGE INTENTIONALLY BLANK]
IN WITNESS WHEREOF, Peregrine Systems, Inc. has caused this
Note to be signed manually or by facsimile by one of its duly authorized
officers.
Dated:
---------------------------------
PEREGRINE SYSTEMS, INC.
By:
---------------------------------
Name:
Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the 5 1/2% Convertible Subordinated Notes due 2007 described in
the within-mentioned Indenture.
State Street Bank and Trust Company of California, National Association, as
Trustee
By:
------------------------------------------
Name:
Title:
----------------------------------
* Applicable to Global Notes only
[FORM OF REVERSE OF NOTE]
PEREGRINE SYSTEMS, INC.
5 1/2% Convertible Subordinated Note due 2007
1. INTEREST. PEREGRINE SYSTEMS, INC., a Delaware
corporation (the "COMPANY"), is the issuer of 5 1/2% Convertible Subordinated
Notes due 2007 (the "NOTES"). The Notes will accrue interest at a rate of 5 1/2%
per annum. The Company promises to pay interest on the Notes in cash
semiannually on each May 15 and November 15, commencing on May 15, 2001, to
Holders of record on the immediately preceding May 1 and November 1,
respectively. Interest on the Notes will accrue from the most recent date to
which interest has been paid, or if no interest has been paid, from November 14,
2000. Interest will be computed on the basis of a 360-day year of twelve 30-day
months. The Company will pay interest on overdue principal at the interest rate
borne by the Notes, compounded semiannually, and it shall pay interest on
overdue installments of interest (without regard to any applicable grace period)
at the same interest rate compounded semiannually.
2. REGISTRATION RIGHTS. The Holder of this Note is
entitled to the benefits of the Registration Rights Agreement, dated as of
November 14, 2000, among the Company, Banc of America Securities LLC, Bear,
Xxxxxxx & Co. Inc. and Prudential Securities Incorporated (the "REGISTRATION
RIGHTS AGREEMENT"). The Company will pay Special Interest (as defined in the
Registration Rights Agreement) to Holders of the Notes if: (a) the Shelf
Registration Statement (as defined in the Registration Rights Agreement) is not
filed with the SEC on or prior to 90 days after the Closing Date; (b) the Shelf
Registration Statement has not been declared effective by the SEC on or prior to
180 days after the Closing Date; or (c) the Shelf Registration Statement is
filed and declared effective but, during the Shelf Registration Period (as
defined in the Registration Rights Agreement), shall thereafter cease to be
effective or fail to be usable for its intended purpose or if the Company
suspends the use of the prospectus forming a part thereof; except under the
circumstances and for the time periods set forth in Section 3(c) of the
Registration Rights Agreement (each such event referred to in foregoing clauses
(a) through (c), a "REGISTRATION DEFAULT"), the Company will pay Special
Interest with respect to the Transfer Restricted Securities (as defined in the
Registration Rights Agreement) from and including the day following the
Registration Default to but excluding the day on which the Registration Default
has been cured, which shall accrue (x) in respect of the Notes, to each Holder
of Notes at the rate of an additional 0.5% per year of the principal amount of
the Notes held by such Holders; and (y) in respect of any shares of Common Stock
issued upon conversion of Notes, to each holder of such shares of Common Stock
at the rate of an additional 0.5% per year of the principal amount of the Notes
formerly held by such holder that were converted into such shares of Common
Stock. All accrued Special Interest shall be paid in arrears by the Company on
each Interest Payment Date by wire transfer of immediately available funds.
Following the cure of all Registration Defaults relating to any particular Note
or share of Common Stock issued upon conversion of Notes, the accrual of Special
Interest with respect to such Note or such share of Common Stock shall cease.
3. PAYMENTS. All payments made by the Company on this
Note shall be made without deduction or withholding for or on account of, any
and all present or future taxes, duties, assessments, or governmental charges of
whatever nature unless the deduction or withholding of such taxes, duties,
assessments or governmental charges is then required by law.
4. METHOD OF PAYMENT. The Company will pay interest on
the Notes (except with respect to defaulted interest, which may be paid at such
earlier date as specified in the Indenture) to the Persons who are registered
Holders of Notes at the close of business on the Record Date for the next
Interest Payment Date even though Notes are canceled after the Record Date and
on or before the Interest
1
Payment Date. Holders must surrender Notes to a Paying Agent to collect
principal and premium payments. The Company will pay principal, premium, if any,
interest and Special Interest, if any, 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 pay principal, premium, if any, interest and Special
Interest, if any, by check payable in such money. It may mail an interest or
Special Interest check to a Holder's address set forth in the register of
Holders. If a Holder who holds at least $5.0 million aggregate principal amount
of the Notes so requests, principal, premium, if any, interest and Special
Interest, if any, shall be paid by wire transfer of immediately available funds
to an account previously specified in writing by such Holder to the Company and
the Trustee.
5. PAYING AGENT, CONVERSION AGENT AND REGISTRAR. The
Trustee will act as Paying Agent, Conversion Agent and Registrar in the City of
New York, New York. The Company may change any Paying Agent, Conversion Agent or
Registrar without prior notice. The Company or any of its Affiliates may act in
any such capacity.
6. INDENTURE. The Company issued the Notes under an
Indenture, dated as of November 14, 2000 (the "INDENTURE"), between the Company
and State Street Bank and Trust Company of California, National Association, as
Trustee. The terms of the Notes include those stated in the Indenture and those
made part of the Indenture by the Trust Indenture Act of 1939 (15 U.S. Code
Sections 77aaa-77bbbb) (the "TIA") as in effect on the date of the Indenture.
The Notes are subject to, and qualified by, all such terms, certain of which are
summarized hereon, and Holders are referred to the Indenture and such Act for a
statement of such terms. The Notes are unsecured general obligations of the
Company limited to $287,500,000 in aggregate principal amount and subordinated
in right of payment to all existing and future Senior Debt of the Company.
7. OPTIONAL REDEMPTION. At any time on or after November
18, 2003, the Company may redeem any portion of the Notes, in whole or in part,
on at least 30 days but no more than 60 days' notice if the Daily Market Price
of the Common Stock for 20 trading days in a period of 30 consecutive trading
days ending on the day prior to the mailing of the notice of redemption exceeds
140% of the Conversion Price of the Notes (as determined based on the
then-effective Conversion Price), at the following prices (expressed as a
percentage of the principal amount), together with accrued and unpaid interest
to, but excluding, the redemption date:
Redemption Period Redemption Price
----------------- ----------------
November 18, 2003 through November 14, 2004................... 103.14%
November 15, 2004 through November 14, 2005................... 102.36%
November 15, 2005 through November 14, 2006................... 101.57%
November 15, 2006 through November 14, 2007................... 100.79%
and 100% of the principal amount on November 15, 2007.
In the event the Company redeems less than all of the
outstanding Notes, the Notes to be redeemed shall be selected by the Trustee in
accordance with Section 3.02 of the Indenture. In the event a portion of an
outstanding Note is selected for redemption and such Note is converted in part
after such selection, the converted portion of such Note shall be deemed (so far
as may be) to be the portion to be selected for redemption in accordance with
Section 3.02 of the Indenture. The Company may not give notice of any redemption
if the Company has defaulted in payment of interest and the default is
continuing.
2
8. NOTICE OF REDEMPTION. Notice of redemption will be
mailed at least 30 days but not more than 60 days before the redemption date to
each Holder of the Notes to be redeemed at such Holder's address of record. The
Notes in denominations larger than $1,000 may be redeemed in part but only in
integral multiples of $1,000. In the event of a redemption of less than all of
the Notes, the Notes will be chosen for redemption by the Trustee in accordance
with the Indenture. On and after the redemption date, interest ceases to accrue
on the Notes or portions of them called for redemption.
If this Note is redeemed subsequent to a Record Date with
respect to any Interest Payment Date specified above and on or prior to such
Interest Payment Date, then any accrued interest will be paid to the Person in
whose name this Note is registered at the close of business on such Record Date.
9. MANDATORY REDEMPTION. The Company will not be
required to make mandatory redemption or repurchase payments with respect to the
Notes. There are no sinking fund payments with respect to the Notes.
10. REPURCHASE AT OPTION OF HOLDER. If there is a Change
in Control, the Company shall be required to offer to purchase on the Purchase
Date all outstanding Notes at a purchase price equal to 100% of the aggregate
principal amount thereof, plus accrued and unpaid interest, if any, to the
Purchase Date. Holders of Notes that are subject to an offer to purchase will
receive a Change of Control Offer from the Company in accordance with Section
3.09 of the Indenture and may elect to have such Notes or portions thereof in
authorized denominations purchased by completing the form entitled "Option of
Holder to Elect Purchase" appearing below.
11. SUBORDINATION. The payment of the principal of,
interest on or any other amounts due on the Notes is subordinated in right of
payment to all existing and future Senior Debt of the Company, as described in
the Indenture. Each Holder, by accepting a Note, agrees to such subordination
and authorizes and directs the Trustee on its behalf to take such action as may
be necessary or appropriate to effectuate the subordination so provided and
appoints the Trustee as its attorney-in-fact for such purpose.
12. CONVERSION. The holder of any Note has the right,
exercisable at any time after 90 days following the Issuance Date and prior to
the close of business (New York time) on the date of the Note's maturity, to
convert the principal amount thereof (or any portion thereof that is an integral
multiple of $1,000) into shares of Common Stock at the initial Conversion Price
of $25.00 per share, subject to adjustment under certain circumstances as set
forth in the Indenture, except that if a Note is called for redemption, the
conversion right will terminate at the close of business on the Business Day
immediately preceding the date fixed for redemption (unless the Company shall
default in making the redemption payment when it becomes due, in which case the
conversion right shall terminate on the date such default is cured).
To convert a Note, a holder must (1) complete and sign a
conversion notice substantially in the form set forth below, (2) surrender the
Note to a Conversion Agent, (3) furnish appropriate endorsements or transfer
documents if required by the Registrar or Conversion Agent and (4) pay any
transfer or similar tax, if required. No payment or other adjustment for accrued
interest or dividends on any Common Stock issued upon conversion of the Notes.
If any Notes are converted during any period after any Record Date for the
payment of an installment of interest but before the next Interest Payment Date,
interest for such notes will be paid on the next Interest Payment Date,
notwithstanding such conversion, to the Holders of such Notes. Any Notes that
are, however, delivered to the Company for conversion after any Record Date but
before the next Interest Payment Date must, except as described in
3
the next sentence, be accompanied by a payment equal to the interest payable on
such Interest Payment Date on the principal amount of Notes being converted. The
payment to the Company described in the preceding sentence shall not be required
if, during that period between a Record Date and the next Interest Payment Date,
a conversion occurs on or after the date that the Company has issued a
redemption notice and prior to the date of redemption stated in such notice. No
fractional shares will be issued upon conversion, but a cash adjustment will be
made for any fractional shares.
A Note in respect of which a Holder has delivered an "Option
of Holder to Elect Purchase" form appearing below exercising the option of such
Holder to require the Company to purchase such Note may be converted only if the
notice of exercise is withdrawn as provided above and in accordance with the
terms of the Indenture. The above description of conversion of the Notes is
qualified by reference to, and is subject in its entirety by, the more complete
description thereof contained in the Indenture.
13. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in
registered form, without coupons, in denominations of $1,000 and integral
multiples of $1,000. The transfer of Notes may be registered, and Notes may be
exchanged, as provided in 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 exchange or register the transfer of any Note or portion of a
Note selected for redemption (except the unredeemed portion of any Note being
redeemed in part). Also, it need not exchange or register the transfer of any
Note for a period of 15 days before a selection of Notes to be redeemed.
14. PERSONS DEEMED OWNERS. The registered Holder of a
Note shall be treated as its owner for all purposes.
15. UNCLAIMED MONEY. If money for the payment of
principal or interest remains unclaimed for two years, the Trustee and the
Paying Agent shall pay the money back to the Company at its written request.
After that, Holders of Notes entitled to the money must look to the Company for
payment unless an abandoned property law designates another Person and all
liability of the Trustee and such Paying Agent with respect to such money shall
cease.
16. DEFAULTS AND REMEDIES. The Notes shall have the
Events of Default set forth in Section 8.01 of the Indenture. Subject to certain
limitations in the Indenture, if an Event of Default occurs and is continuing
(other than an Event of Default arising from certain events of bankruptcy,
insolvency or reorganization set forth in the Indenture), the Trustee by notice
to the Company or the Holders of at least 25% in aggregate principal amount of
the then outstanding Notes by notice to the Company and the Trustee may declare
all the Notes to be due and payable immediately. If an Event of Default arising
from certain events of bankruptcy, insolvency or reorganization set forth in the
Indenture occurs with respect to the Company, such principal of, premium, if
any, and interest on the Notes shall become and be due and payable immediately
without further action or notice. If an Event of Default arising from certain
events of bankruptcy, insolvency or reorganization set forth in the Indenture
occurs with respect to any Significant Subsidiary or Significant Subsidiaries of
the Company, the Trustee by notice to the Company or the Holders of at least 25%
in aggregate principal amount of the then outstanding Notes by notice to the
Company and the Trustee may declare all the Notes to be due and payable
immediately. The Holders of a majority in principal amount of the then
outstanding Notes by written notice to the Trustee may on behalf of all Holders
of the Notes waive an existing Default or Event of Default and its consequences
except a continuing Default or Event of Default in the payment of the principal
or interest on any Note. Holders may not enforce the Indenture or the Notes
except as provided in the Indenture. Subject to certain limitations set forth in
the Indenture, Holders of a majority in
4
principal amount of the then outstanding Notes issued under the Indenture may
direct the Trustee in its exercise of any trust or power. The Company must
furnish annually compliance certificates to the Trustee. The above description
of Events of Default and remedies is qualified by reference, and subject in its
entirety, to the more complete description thereof contained in the Indenture.
17. AMENDMENTS, SUPPLEMENTS AND WAIVERS. Subject to
certain exceptions set forth in the Indenture, the Indenture or the Notes may be
amended or supplemented with the consent of the Holders of at least a majority
in principal amount of the then outstanding Notes (including consents obtained
in connection with a tender offer or exchange offer for Notes), and any existing
default may be waived with the consent of the Holders of a majority in principal
amount of the then outstanding Notes. Without the consent of any Holder, the
Indenture or the Notes may be amended among other things, to cure any ambiguity,
defect or inconsistency, to provide for uncertificated Notes in addition to or
in place of certificated Notes, to provide for assumption of the Company's
obligations to Holders, to reduce the conversion price, to make any change that
does not adversely affect the rights of any Holder or to qualify the Indenture
under the TIA or to comply with the requirements of the SEC in order to maintain
the qualification of the Indenture under the TIA.
18. TRUSTEE DEALINGS WITH THE COMPANY. The Trustee, in
its individual or any other capacity may become the owner or pledgee of the
Notes and may otherwise deal with the Company or an Affiliate with the same
rights it would have, as if it were not Trustee, subject to certain limitations
set forth in the Indenture and in the TIA. Any Agent may do the same with like
rights.
19. NO RECOURSE AGAINST OTHERS. A director, officer,
employee, incorporator or shareholder of the Company, as such, 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. Each Holder of the Notes by accepting a Note
waives and releases all such liability. The waiver and release are part of the
consideration for the issue of the Notes.
20. GOVERNING LAW. THE INTERNAL LAWS OF THE STATE OF NEW
YORK SHALL GOVERN THE INDENTURE AND THE NOTES WITHOUT REGARD TO CONFLICT OF LAW
PROVISIONS THEREOF.
21. AUTHENTICATION. The Notes shall not be valid until
authenticated by the manual signature of an authorized officer of the Trustee or
an authenticating agent.
22. ABBREVIATIONS. Customary abbreviations may be used in
the name of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN
ENT (= tenants by the entireties), JT TEN (= joint tenants with right of
survivorship and not as tenants in common), CUST (= Custodian), and UGMA (=
Uniform Gifts to Minors Act).
The Company will furnish to any Holder of the Notes upon
written request and without charge a copy of the Indenture. Request may be made
to:
Peregrine Systems, Inc.
0000 Xxxxxx Xxxxxx Xxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Attention: Investor Relations
5
ASSIGNMENT FORM
To assign this Note, fill in the form below:
(I) or (we) assign and transfer this Note to
------------------------------------------
(INSERT ASSIGNEE'S SOCIAL SECURITY OR TAX I.D. NO.)
------------------------------------------
------------------------------------------
(PRINT OR TYPE ASSIGNEE'S NAME, ADDRESS AND ZIP CODE)
and irrevocably appoint _________________________________ agent to transfer this
Note on the books of the Company. The agent may substitute another to act for
him.
Your Signature:
-----------------------------------------------
(SIGN EXACTLY AS YOUR NAME APPEARS ON THE OTHER
SIDE OF THIS NOTE)
Date:
-------------------
Signature Guarantee: *
--------------------------------------------
In connection with any transfer of any of the Notes evidenced by this
certificate occurring prior to the date that is two years after the
later of the date of original issuance of such Notes and the last date,
if any, on which such Notes were owned by the Company or any Affiliate
of the Company, the undersigned confirms that such Notes are being
transferred:
CHECK ONE BOX BELOW
(1) / / to the Company or any subsidiary thereof,
(2) / / to a qualified institutional buyer in compliance with
Rule 144A under the Securities Act of 1933, as
amended,
(3) / / outside the United States in compliance with Rule 904
under the Securities Act of 1933, as amended,
(4) / / to an institutional "Accredited Investor" as defined
in Rule 401(a)(1), (2), (3) or (7) that is acquiring
theses Notes for investment purposes and not for
distribution,
(5) / / pursuant to the exemption from registration provided
by Rule 144 under the Securities Act of 1933, as
amended (if available), or
(6) / / pursuant to an effective registration statement under
the Securities Act of 1933, as amended.
------------------
* Signature must be guaranteed by a commercial bank, trust company or
member firm of the New York Stock Exchange.
--------------------------
Signature
Signature Guarantee*
------------------------------
Signature must be guaranteed
------------------------------------------------------------------
TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this Note
for its own account or an account with respect to which it exercises
sole investment discretion and that it and any such account is a
"qualified institutional buyer" within the meaning of Rule 144A under
the Securities Act of 1933, as amended, and is aware that the sale to
it is being made in reliance on Rule 144A and acknowledges that it has
received such information regarding the Company as the undersigned has
requested pursuant to Rule 144A or has determined not to request such
information and that it is aware that the transferor is relying upon
the undersigned's foregoing representations in order to claim the
exemption from registration provided by Rule 144A.
Date:
---------------------
--------------------------
* Signature must be guaranteed by a commercial bank, trust company or
member firm of the New York Stock Exchange.
NOTICE: To be executed by an executive officer
OPTION OF HOLDER TO ELECT PURCHASE
UPON A CHANGE IN CONTROL
If you want to elect to have this Note or a portion thereof repurchased
by the Company pursuant to Section 3.09 or 4.07 of the Indenture, check
the box: [ ]
If the purchase is in part, indicate the portion (in denominations of
$1,000 or any integral multiple thereof) to be purchased:
-----------------------
Your Signature:
-----------------------------------------------
(SIGN EXACTLY AS YOUR NAME APPEARS ON THE OTHER
SIDE OF THIS NOTE)
Date:
------------------------
Signature Guarantee:**/
---------------------
**/ Signature must be guaranteed by a commercial bank, trust company or
member firm of the New York Stock Exchange.
ELECTION TO CONVERT
To Peregrine Systems, Inc.:
The undersigned owner of this Note hereby irrevocably exercises the
option to convert this Note, or the portion below designated, into
Common Stock of Peregrine Systems, Inc. in accordance with the terms of
the Indenture referred to in this Note, and directs that the shares
issuable and deliverable upon conversion, together with any check in
payment for fractional shares, be issued in the name of and delivered
to the undersigned, unless a different name has been indicated in the
assignment below. If the shares are to be issued in the name of a
person other than the undersigned, the undersigned will pay all
transfer taxes payable with respect thereto.
Any holder of Notes, upon the exercise of its conversion rights in
accordance with the terms of the Indenture and the Note, agrees to be
bound by the terms of the Registration Rights Agreement relating to the
Common Stock issuable upon conversion of the Notes.
Date:
in whole
-----
Portions of Note to be converted ($1,000 or
integral multiples thereof): $
--------------
--------------------------------------------
Signature
Please Print or Typewrite Name and Address,
Including Zip Code, and Social Security or
Other Identifying Number
--------------------------------------------
--------------------------------------------
--------------------------------------------
Signature Guarantee: *
---------------------
---------------------
* Signature must be guaranteed by a commercial bank, trust company or
member firm of the New York Stock Exchange.
SCHEDULE A
SCHEDULE OF PRINCIPAL AMOUNT
The initial principal amount of this Global Note shall be $__________.
The following increases or decreases in the principal amount of this
Global Note have been made:
========================= ====================== ======================= ====================== ======================
Amount of decrease in Amount of increase Principal amount of Signature of Date of exchange
principal amount of in principal amount this Global Note authorized officer following such
this Global Note of this Global Note of Trustee or Notes decrease or increase
Custodian
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
========================= ====================== ======================= ====================== ======================