Exhibit 4.13
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INDENTURE
BETWEEN
INHALE THERAPEUTIC SYSTEMS, INC.,
AS ISSUER
AND
CHASE MANHATTAN BANK AND TRUST COMPANY,
NATIONAL ASSOCIATION
AS TRUSTEE
_____% CONVERTIBLE SUBORDINATED NOTES DUE 2007
DATED AS OF FEBRUARY 8, 2000
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CROSS-REFERENCE TABLE*
Trust Indenture Indenture
Act Section Section
----------- -------
310(a)(1)......................................................................................................5.11
(a)(2)................................................................................................5.11
(a)(3).................................................................................................n/a
(a)(4).................................................................................................n/a
(a)(5)................................................................................................5.11
(b)..............................................................................................5.3; 5.11
(c)....................................................................................................n/a
311(a) 5.12
(b)...................................................................................................5.12
(c)....................................................................................................n/a
312(a) 2.10
(b) ..................................................................................................14.3
(c)...................................................................................................14.3
313(a) 5.7
(b)(1).................................................................................................n/a
(b)(2).................................................................................................5.7
(c)..............................................................................................5.7; 14.2
(d)....................................................................................................5.7
314(a)(1), (2), (3).......................................................................................9.6; 14.6
(a)(4)......................................................................................9.6; 9.7; 14.6
(b)....................................................................................................n/a
(c)(1)................................................................................................14.5
(c)(2)................................................................................................14.5
(c)(3).................................................................................................n/a
(d)....................................................................................................n/a
(e)...................................................................................................14.6
(f)....................................................................................................n/a
315(a) ....................................................................................................5.1(a)
(b)..............................................................................................5.6; 14.2
(c).................................................................................................5.1(b)
(d).................................................................................................5.1(c)
(e)...................................................................................................4.14
316(a)(last sentence)..........................................................................................2.13
(a)(1)(A)..............................................................................................4.5
(a)(1)(B)..............................................................................................4.4
i.
(a)(2).................................................................................................n/a
(b)....................................................................................................4.7
(c)....................................................................................................7.4
317(a)(1).......................................................................................................4.8
(a)(2).................................................................................................4.9
(b)....................................................................................................2.5
318(a) 14.1
(b)....................................................................................................n/a
(c)...................................................................................................14.1
--------------------------------
"n/a" means not applicable.
*This Cross-Reference Table shall not, for any purpose, be deemed to be a part
of the Indenture.
ii.
TABLE OF CONTENTS
PAGE
Table of Contents
PAGE
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ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.1. Definitions.....................................................................................2
Section 1.2. Incorporation by Reference of Trust Indenture Act..............................................13
Section 1.3. Rules of Construction..........................................................................14
ARTICLE 2 THE SECURITIES
Section 2.1. Title and Terms................................................................................15
Section 2.2. Form of Securities.............................................................................16
Section 2.3. Legends........................................................................................17
Section 2.4. Execution, Authentication, Delivery and Dating.................................................22
Section 2.5. Registrar and Paying Agent.....................................................................22
Section 2.6. Paying Agent to Hold Assets in Trust...........................................................23
Section 2.7. General Provisions Relating to Transfer and Exchange...........................................23
Section 2.8. Book-Entry Provisions for the Global Securities................................................24
Section 2.9. Special Transfer Provisions....................................................................25
Section 2.10. Holder Lists...................................................................................27
Section 2.11. Persons Deemed Owners..........................................................................28
Section 2.12. Mutilated, Destroyed, Lost or Stolen Securities................................................28
Section 2.13. Treasury Securities............................................................................29
Section 2.14. Temporary Securities...........................................................................29
Section 2.15. Cancellation...................................................................................29
Section 2.16. CUSIP Numbers..................................................................................30
Section 2.17. Defaulted Interest.............................................................................30
ARTICLE 3 SATISFACTION AND DISCHARGE
Section 3.1. Satisfaction and Discharge of Indenture........................................................31
Section 3.2. Deposited Monies to be Held in Trust...........................................................32
Section 3.3. Return of Unclaimed Monies.....................................................................32
ARTICLE 4 DEFAULTS AND REMEDIES
Section 4.1. Events of Default..............................................................................33
Section 4.2. Acceleration of Maturity; Rescission and Annulment.............................................34
Section 4.3. Other Remedies.................................................................................35
Section 4.4. Waiver of Past Defaults........................................................................35
Section 4.5. Control by Majority............................................................................35
Section 4.6. Limitation on Suit.............................................................................36
Section 4.7. Unconditional Rights of Holders to Receive Payment and to Convert..............................36
iii.
TABLE OF CONTENTS
(CONTINUED)
PAGE
Section 4.8. Collection of Indebtedness and Suits for Enforcement by the Trustee............................37
Section 4.9. Trustee May File Proofs of Claim...............................................................37
Section 4.10. Restoration of Rights and Remedies.............................................................38
Section 4.11. Rights and Remedies Cumulative.................................................................38
Section 4.12. Delay or Omission Not Waiver...................................................................38
Section 4.13. Application of Money Collected.................................................................39
Section 4.14. Undertaking for Costs..........................................................................39
Section 4.15. Waiver of Stay or Extension Laws...............................................................39
ARTICLE 5 THE TRUSTEE
Section 5.1. Certain Duties and Responsibilities............................................................41
Section 5.2. Certain Rights of Trustee......................................................................42
Section 5.3. Individual Rights of Trustee...................................................................43
Section 5.4. Money Held in Trust............................................................................43
Section 5.5. Trustee's Disclaimer...........................................................................43
Section 5.6. Notice of Defaults.............................................................................44
Section 5.7. Reports by Trustee to Holders..................................................................44
Section 5.8. Compensation and Indemnification...............................................................44
Section 5.9. Replacement of Trustee.........................................................................45
Section 5.10. Successor Trustee by Merger, Etc...............................................................46
Section 5.11. Corporate Trustee Required; Eligibility........................................................46
Section 5.12. Collection of Claims Against the Company.......................................................46
ARTICLE 6 CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
Section 6.1. Company May Consolidate, Etc...................................................................47
Section 6.2. Successor Corporation Substituted..............................................................47
ARTICLE 7 AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 7.1. Without Consent of Holders of Securities.......................................................49
Section 7.2. With Consent of Holders of Securities..........................................................50
Section 7.3. Compliance with Trust Indenture Act............................................................51
Section 7.4. Revocation of Consents and Effect of Consents or Votes.........................................51
Section 7.5. Notation on or Exchange of Securities..........................................................51
Section 7.6. Trustee to Sign Amendment, Etc.................................................................52
ARTICLE 8 MEETING OF HOLDERS OF SECURITIES
Section 8.1. Purposes for Which Meetings May Be Called......................................................53
Section 8.2. Call Notice and Place of Meetings..............................................................53
Section 8.3. Persons Entitled to Vote at Meetings...........................................................53
Section 8.4. Quorum; Action.................................................................................53
IV.
TABLE OF CONTENTS
(CONTINUED)
PAGE
Section 8.5. Determination of Voting Rights; Conduct and Adjournment of Meetings............................54
Section 8.6. Counting Votes and Recording Action of Meetings................................................55
ARTICLE 9 COVENANTS
Section 9.1. Payment of Principal, Premium and Interest.....................................................56
Section 9.2. Maintenance of Offices or Agencies.............................................................56
Section 9.3. Corporate Existence............................................................................57
Section 9.4. Maintenance of Properties......................................................................57
Section 9.5. Payment of Taxes and Other Claims..............................................................57
Section 9.6. Reports........................................................................................57
Section 9.7. Compliance Certificate.........................................................................58
Section 9.8. Resale of Certain Securities...................................................................58
ARTICLE 10 REDEMPTION OF SECURITIES
Section 10.1. Provisional Redemption.........................................................................59
Section 10.2. Optional Redemption............................................................................59
Section 10.3. Notice to Trustee..............................................................................60
Section 10.4. Selection of Securities to Be Redeemed.........................................................60
Section 10.5. Notice of Redemption...........................................................................60
Section 10.6. Effect of Notice of Redemption.................................................................61
Section 10.7. Deposit of Redemption Price....................................................................61
Section 10.8. Securities Redeemed in Part....................................................................62
ARTICLE 11 REPURCHASE AT THE OPTION OF A HOLDER UPON A CHANGE OF CONTROL
Section 11.1. Repurchase Right...............................................................................63
Section 11.2. Conditions to the Company's Election to Pay the Repurchase Price in Common Stock...............63
Section 11.3. Notices; Method of Exercising Repurchase Right, Etc............................................64
ARTICLE 12 CONVERSION OF SECURITIES
Section 12.1. Conversion Right and Conversion Price..........................................................68
Section 12.2. Exercise of Conversion Right...................................................................68
Section 12.3. Fractions of Shares............................................................................69
Section 12.4. Adjustment of Conversion Price.................................................................69
Section 12.5. Notice of Adjustments of Conversion Price......................................................78
Section 12.6. Notice Prior to Certain Actions................................................................78
Section 12.7. Company to Reserve Common Stock................................................................79
Section 12.8. Taxes on Conversions...........................................................................79
Section 12.9. Covenant as to Common Stock....................................................................80
V.
TABLE OF CONTENTS
(CONTINUED)
PAGE
Section 12.10. Cancellation of Converted Securities...........................................................80
Section 12.11. Effect of Reclassification, Consolidation, Merger or Sale......................................80
Section 12.12. Responsibility of Trustee for Conversion Provisions............................................81
ARTICLE 13 SUBORDINATION
Section 13.1. Securities Subordinated to Senior Debt.........................................................83
Section 13.2. Subrogation....................................................................................85
Section 13.3. Obligation of the Company is Absolute and Unconditional........................................85
Section 13.4. Maturity of or Default on Senior Debt..........................................................85
Section 13.5. Payments on Securities Permitted...............................................................86
Section 13.6. Effectuation of Subordination by Trustee.......................................................86
Section 13.7. Knowledge of Trustee...........................................................................86
Section 13.8. Trustee's Relation to Senior Debt..............................................................87
Section 13.9. Rights of Holders of Senior Debt Not Impaired..................................................87
Section 13.10. Modification of Terms of Senior Debt...........................................................87
Section 13.11. Certain Conversions Not Deemed Payment.........................................................87
ARTICLE 14 OTHER PROVISIONS OF GENERAL APPLICATION
Section 14.1. Trust Indenture Act Controls...................................................................89
Section 14.2. Notices........................................................................................89
Section 14.3. Communication by Holders with Other Holders....................................................90
Section 14.4. Acts of Holders of Securities..................................................................90
Section 14.5. Certificate and Opinion as to Conditions Precedent.............................................91
Section 14.6. Statements Required in Certificate or Opinion..................................................91
Section 14.7. Effect of Headings and Table of Contents.......................................................92
Section 14.8. Successors and Assigns.........................................................................92
Section 14.9. Separability Clause............................................................................92
Section 14.10. Benefits of Indenture..........................................................................92
Section 14.11. Governing Law..................................................................................92
Section 14.12. Counterparts...................................................................................92
Section 14.13. Legal Holidays.................................................................................92
Section 14.14. Recourse Against Others........................................................................93
VI.
TABLE OF CONTENTS
(CONTINUED)
PAGE
EXHIBITS
EXHIBIT A: Form of Security A-1
vii.
An extra section break has been inserted above this paragraph. Do not delete
this section break if you plan to add text after the Table of
Contents/Authorities. Deleting this break will cause Table of
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Table of Contents/Authorities.
viii.
INDENTURE, dated as of February 8, 2000, between INHALE THERAPEUTIC
SYSTEMS, INC., a corporation duly organized and existing under the laws of the
State of Delaware, having its principal office at 000 Xxxxxxxxxx Xxxx, Xxx
Xxxxxx, Xxxxxxxxxx 00000 (the "Company"), and CHASE MANHATTAN BANK AND TRUST
COMPANY, NATIONAL ASSOCIATION, a national banking association, as Trustee (the
"Trustee"), having its principal corporate trust office at 000 Xxxxxxxxxx
Xxxxxx, Xxxxx 0000, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000.
RECITALS OF THE COMPANY
The Company has duly authorized the creation of an issue of its 5%
Convertible Subordinated Notes due 2007 (herein called the "Securities") of
substantially the tenor and amount hereinafter set forth, and to provide
therefor the Company has duly authorized the execution and delivery of this
Indenture.
All things necessary to make the Securities, when the Securities are
executed by the Company and authenticated and delivered hereunder and duly
issued by the Company, the valid obligations of the Company, and to make this
Indenture a valid agreement of the Company, in accordance with their and its
terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually covenanted and agreed, for the
equal and proportionate benefit of all Holders of the Securities, as follows:
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
SECTION 1.1 DEFINITIONS.
For all purposes of this Indenture and the Securities, the following
terms are defined as follows:
"Act", when used with respect to any Holder of a Security, has
the meaning specified in Section 14.4(a) hereof.
"Adjusted Interest Rate" means, with respect to any Reset
Transaction, the rate per annum that is the arithmetic average of the
rates quoted by two Reference Dealers selected by the Company or its
successor as the rate at which interest on the Securities should accrue
so that the fair market value, expressed in dollars, of a Security
immediately after the later of:
(1) the public announcement of such Reset Transaction;
or
(2) the public announcement of a change in dividend
policy in connection with such Reset Transaction,
will equal the average Trading Price of a Security for the 20 Trading Days
preceding the date of public announcement of such Reset Transaction; provided
that the Adjusted Interest Rate shall not be less than 5% per annum.
"Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified Person. For the purposes of
this definition, "control", when used with respect to any specified
Person, means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Bankruptcy Law" means Title 11 of the U.S. Code or any
similar federal or state law for the relief of debtors.
"Board of Directors" means either the board of directors of the
Company or any committee of that board empowered to act for it with
respect to this Indenture.
"Board Resolution" means a resolution duly adopted by the Board
of Directors, a copy of which, certified by the Secretary or an
Assistant Secretary of the Company to be in full force and effect on
the date of such certification, shall have been delivered to the
Trustee.
2
"Business Day", when used with respect to any Place of Payment
or Place of Conversion, means each Monday, Tuesday, Wednesday, Thursday
and Friday which is not a day on which banking institutions in that
Place of Payment or Place of Conversion, as the case may be, are
authorized or obligated by law to close.
"Change of Control" means the occurrence of any of the
following after the original issuance of the Securities:
(1) the acquisition by any person, including any
syndicate or group deemed to be a "person" under Section 13(d)(3) of
the Exchange Act, of beneficial ownership, directly or indirectly,
through a purchase, merger or other acquisition transaction or series
of transactions, of shares of capital stock of the Company entitling
such person to exercise 50% or more of the total voting power of all
shares of capital stock of the Company entitled to vote generally in
elections of directors, other than any such acquisition by the Company,
any subsidiary of the Company or any employee benefit plan of the
Company; or
(2) any consolidation or merger of the Company with
or into any other person, any merger of another person into the
Company, or any conveyance, transfer, sale, lease or other disposition
of all or substantially all of the properties and assets of the Company
to another person, other than (a) any such transaction (x) that does
not result in any reclassification, conversion, exchange or
cancellation of outstanding shares of capital stock of the Company and
(y) pursuant to which holders of capital stock of the Company
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 of the Company entitled to vote generally in
the election of directors of the continuing or surviving person
immediately after such transaction and (b) any merger which is effected
solely to change the jurisdiction of incorporation of the Company and
results in a reclassification, conversion or exchange of outstanding
shares of Common Stock solely into shares of common stock of the
surviving entity;
provided, however, that a Change of Control shall not be deemed to have occurred
if the closing sales price per share of the Common Stock for any five Trading
Days within the period of 10 consecutive Trading Days ending immediately after
the later of the Change of Control or the public announcement of the Change of
Control, in the case of a Change of Control under clause (1) above, or the
period of 10 consecutive Trading Days ending immediately before the Change of
Control, in the case of a Change of Control under clause (2) above, shall equal
or exceed 110% of the Conversion Price of the Securities in effect on each such
Trading Day. Beneficial ownership shall be determined in accordance with Rule
13d-3 promulgated by the SEC under the Exchange Act. The term "person" shall
include any syndicate or group which would be deemed to be a "person" under
Section 13(d)(3) of the Exchange Act.
"Chief Executive Officer" means any co-chief executive officer
of the Company.
"Closing Date" means February 8, 2000 or such later date on
which the Securities may be delivered pursuant to the Purchase
Agreement.
3
"Closing Price" of any security on any date of determination
means:
(1) the closing sale price (or, if no closing sale
price is reported, the last reported sale price) of such security on
the New York Stock Exchange on such date;
(2) if such security is not listed for trading on the
New York Stock Exchange on any such date, the closing sale price as
reported in the composite transactions for the principal U.S.
securities exchange on which such security is so listed;
(3) if such security is not so listed on a U.S.
national or regional securities exchange, the closing sale price as
reported by the NASDAQ National Market;
(4) if such security is not so reported, the last
quoted bid price for such security in the over-the-counter market as
reported by the National Quotation Bureau or similar organization; or
(5) if such bid price is not available, the average
of the mid-point of the last bid and ask prices of such security on
such date from at least three nationally recognized independent
investment banking firms retained for this purpose by the Company.
"Common Stock" means any stock of any class of the Company
which has no preference in respect of dividends or of amounts payable
in the event of any voluntary or involuntary liquidation, dissolution
or winding up of the Company and which is not subject to redemption by
the Company. However, subject to the provisions of Section 12.11
hereof, shares issuable on conversion of Securities shall include only
shares of the class designated as Common Stock, par value $0.0001 per
share, of the Company at the date of this Indenture or shares of any
class or classes resulting from any reclassification or
reclassifications thereof and which have no preference in respect of
dividends or of amounts payable in the event of any voluntary or
involuntary liquidation, dissolution or winding up of the Company and
which are not subject to redemption by the Company, provided that if at
any time there shall be more than one such resulting class, the shares
of each such class then so issuable shall be substantially in the
proportion which the total number of shares of such class resulting
from all such reclassifications bears to the total number of shares of
all such classes resulting from all such reclassifications.
"Company" means the corporation named as the "Company" in the
first paragraph of this instrument until a successor corporation shall
have become such pursuant to the applicable provisions of this
Indenture, and thereafter "Company" shall mean such successor
corporation.
"Company Notice" has the meaning specified in Section 11.3
hereof.
"Company Order" means a written order signed in the name of the
Company by both (1) the Chairman of the Board, the Chief Executive
Officer, the President or a Vice President and (2) so long as not the
same as the officer signing pursuant to clause (1), the
4
Chief Financial Officer, the Treasurer or the Secretary of the Company,
and delivered to the Trustee.
"Conversion Agent" means any Person authorized by the Company
to convert Securities in accordance with Article 12 hereof.
"Conversion Price" has the meaning specified in Section 12.1
hereof.
"Corporate Trust Office" means for purposes of presentation or
surrender of Securities for payment, registration, transfer, exchange
or conversion or for service of notices or demands upon the Company,
the office of the Trustee located in The City of New York at which at
any particular time its corporate trust business shall be administered
(which at the date of this Indenture is located at 00 Xxxxx Xxxxxx,
Xxxx 000, Xxxxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 10041), and for all other
purposes, the office of the Trustee located in the City of San
Francisco (which at the date of this Indenture is located at 000
Xxxxxxxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxxxxxxx, XX 94111).
"Corporation" means corporations, associations, limited
liability companies, companies and business trusts.
"Current Market Price" has the meaning set forth in Section
12.4(g).
"Custodian" means any receiver, trustee, assignee, liquidator,
sequestrator or similar official under any Bankruptcy Law.
"Default" means an event which is, or after notice or lapse of
time or both would be, an Event of Default.
"Default Exception" has the meaning specified in Section
4.1(d) hereof.
"Defaulted Interest" has the meaning specified in Section 2.17
hereof.
"Depositary" means The Depository Trust Company, its nominees
and their respective successors.
"Designated Senior Debt" means Senior Debt of the Company
which, at the date of determination, has an aggregate amount
outstanding of, or under which, at the date of determination, the
holders thereof are committed to lend up to, at least $25 million and
is specifically designated in the instrument, agreement or other
document evidencing or governing that Senior Debt as "Designated Senior
Debt" for purposes of this Indenture (provided that such instrument,
agreement or other document may place limitations and conditions on the
right of such Senior Debt to exercise the rights of Designated Senior
Debt).
"Dividend Yield" on any security for any period means the
dividends paid or proposed to be paid pursuant to an announced dividend
policy on such security for such period divided by, if with respect to
dividends paid on such security, the average Closing
5
Price of such security during such period and, if with respect to
dividends proposed to be paid on such security, the Closing Price of
such security on the effective date of the related Reset Transaction.
"Dollar," "U.S. Dollar" or "U.S. $" means a dollar or other
equivalent unit in such coin or currency of the United States as at the
time shall be legal tender for the payment of public and private debts.
"DTC Participants" has the meaning specified in Section 2.8
hereof.
"Event of Default" has the meaning specified in Section 4.1
hereof.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Expiration Time" has the meaning specified in Section 12.4(f)
hereof.
"Fair market value" has the meaning set forth in Section
12.4(g) hereof.
"Global Security" has the meaning specified in Section 2.2
hereof.
"Guarantee" means any obligation, contingent or otherwise, of
any Person, directly or indirectly guaranteeing any Indebtedness of any
other Person and any obligation, direct or indirect, contingent or
otherwise, of such Person:
(1) to purchase or pay (or advance or supply funds
for the purchase or payment of) such Indebtedness of such other Person
(whether arising by virtue of partnership arrangements, or by agreement
to keep-well, to purchase assets, goods, securities or services, to
take-or-pay, or maintain financial statement conditions or otherwise);
or
(2) entered into for purposes of assuring in any
other manner the obligee of such Indebtedness of the payment thereof or
to protect such obligee against loss in respect thereof (in whole or in
part);
provided, however, that the term "guarantee" will not include endorsements for
collection or deposit in the ordinary course of business. The term "guarantee"
used as a verb has a corresponding meaning.
"Holder", when used with respect to any Security, means the
Person in whose name the Security is registered in the Register.
"Indebtedness", when used with respect to any Person, and
without duplication means:
(1) all indebtedness, obligations and other
liabilities (contingent or otherwise) of such Person for borrowed money
(including obligations of the Company in respect of overdrafts, foreign
exchange contracts, currency exchange agreements, Interest
6
Rate Protection Agreements, and any loans or advances from banks,
whether or not evidenced by notes or similar instruments) or evidenced
by bonds, debentures, notes or other instruments for the payment of
money, or incurred in connection with the acquisition of any property,
services or assets (whether or not the recourse of the lender is to the
whole of the assets of such Person or to only a portion thereof), other
than any account payable or other accrued current liability or
obligation to trade creditors incurred in the ordinary course of
business in connection with the obtaining of materials or services;
(2) all reimbursement obligations and other
liabilities (contingent or otherwise) of such Person with respect to
letters of credit, bank guarantees, bankers' acceptances, surety bonds,
performance bonds or other guaranty of contractual performance;
(3) all obligations and liabilities (contingent or
otherwise) in respect of (a) leases of such Person required, in
conformity with generally accepted accounting principles, to be
accounted for as capitalized lease obligations on the balance sheet of
such Person and (b) any lease or related documents (including a
purchase agreement) in connection with the lease of real property which
provides that such Person is contractually obligated to purchase or
cause a third party to purchase the leased property and thereby
guarantee a minimum residual value of the leased property to the
landlord and the obligations of such Person under such lease or related
document to purchase or to cause a third party to purchase the leased
property;
(4) all obligations of such Person (contingent or
otherwise) with respect to an interest rate or other swap, cap or
collar agreement or other similar instrument or agreement or foreign
currency hedge, exchange, purchase or similar instrument or agreement;
(5) all direct or indirect guaranties or similar
agreements by such Person in respect of, and obligations or liabilities
(contingent or otherwise) of such Person to purchase or otherwise
acquire or otherwise assure a creditor against loss in respect of,
indebtedness, obligations or liabilities of another Person of the kind
described in clauses (1) through (4);
(6) any indebtedness or other obligations described
in clauses (1) through (4) secured by any mortgage, pledge, lien or
other encumbrance existing on property which is owned or held by such
Person, regardless of whether the indebtedness or other obligation
secured thereby shall have been assumed by such Person; and
(7) any and all deferrals, renewals, extensions and
refundings of, or amendments, modifications or supplements to, any
indebtedness, obligation or liability of the kind described in clauses
(1) through (6).
7
"Indenture" means this instrument as originally executed or as
it may from time to time be supplemented or amended by one or more
indentures supplemental hereto entered into pursuant to the applicable
provisions hereof.
"Initial Purchasers" mean Xxxxxxx Lynch, Pierce, Xxxxxx &
Xxxxx Incorporated, Deutsche Bank Securities Inc., Xxxxxx Brothers Inc.
and U.S. Bancorp Xxxxx Xxxxxxx Inc.
"Interest Payment Date" means each February 8 and August 8.
"Interest Rate" means, (a) if a Reset Transaction has not
occurred, 5% per annum, or (b) following the occurrence of a Reset
Transaction, the Adjusted Interest Rate related to such Reset
Transaction to, but not including the effective date of any succeeding
Reset Transaction.
"Interest Rate Protection Agreement" means, with respect to any
Person, any interest rate swap agreement, interest rate cap or collar
agreement or other financial agreement or arrangement designed to
protect such person against fluctuations in interest rates, as in
effect from time to time.
"Internal Revenue Code" means the Internal Revenue Code of
1986, as amended.
"Liquidated Damages" means all liquidated damages, if any,
payable pursuant to Section 3 of the Registration Rights Agreement.
"Maturity" means the date on which the principal of such
Security becomes due and payable as therein or herein provided, whether
at the Stated Maturity or by acceleration, conversion, call for
redemption, exercise of a Repurchase Right or otherwise.
"Nasdaq National Market" means the National Association of
Securities Dealers Automated Quotation National Market or any successor
national securities exchange or automated over-the-counter trading
market in the United States.
"Non-Electing Share" has the meaning specified in Section
12.11 hereof.
"Officer" of the Company means the Chairman of the Board, the
Chief Executive Officer, the President, the Chief Financial Officer,
the Treasurer, any Vice President or the Secretary of the Company.
"Officers' Certificate" means a certificate signed by both (1)
the Chairman of the Board, the Chief Executive Officer, the President
or a Vice President and (2) so long as not the same as the officer
signing pursuant to clause (1), the Chief Financial Officer or the
Secretary of the Company, and delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who
may be counsel to the Company (and may include directors or employees
of the Company) and which opinion is acceptable to the Trustee which
acceptance shall not be unreasonably withheld.
8
"Outstanding", when used with respect to Securities, means, as
of the date of determination, all Securities theretofore authenticated
and delivered under this Indenture, except Securities:
(1) previously canceled by the Trustee or delivered
to the Trustee for cancellation;
(2) for the payment or redemption of which money in
the necessary amount has been previously deposited with the Trustee or
any Paying Agent (other than the Company) in trust or set aside and
segregated in trust by the Company (if the Company shall act as its own
Paying Agent) for the Holders of such Securities, provided that if such
Securities are to be redeemed, notice of such redemption has been duly
given pursuant to this Indenture; and
(3) which have been paid, in exchange for or in lieu
of which other Securities have been authenticated and delivered
pursuant to this Indenture, other than any such Securities in respect
of which there shall have been presented to the Trustee proof
satisfactory to it that such Securities are held by a bona fide
purchaser in whose hands such Securities are valid obligations of the
Company.
"Paying Agent" has the meaning specified in Section 2.5 hereof.
"Payment Blockage Notice" has the meaning specified in Section
13.1(d) hereof.
"Person" means any individual, corporation, limited liability
company, partnership, joint venture, association, joint-stock company,
trust, estate, unincorporated organization or government or any agency
or political subdivision thereof.
"Physical Securities" has the meaning specified in Section 2.2
hereof.
"Place of Conversion" means any city in which any Conversion
Agent is located.
"Place of Payment" means any city in which any Paying Agent is
located.
"Predecessor Security" of any particular Security means every
previous Security evidencing all or a portion of the same debt as that
evidenced by such particular Security; and, for the purposes of this
definition, any Security authenticated and delivered under Section 2.12
hereof in exchange for or in lieu of a mutilated, destroyed, lost or
stolen Security shall be deemed to evidence the same debt as the
mutilated, destroyed, lost or stolen Security.
"Purchase Agreement" means the Purchase Agreement, dated
February 2, 2000, between the Company and the Initial Purchasers.
"QIB" means a "qualified institutional buyer" as defined in
Rule 144A.
9
"Quoted Price" of the Common Stock means the last reported sale
price of the Common Stock on the Nasdaq National Market, or, if the
Common Stock is listed on a national securities exchange, then on such
exchange, or if the Common Stock is not quoted on Nasdaq National
Market or listed on an exchange, the average of the last bid and asked
price on the National Association of Securities Dealers Automated
Quotation System.
"Record Date" means either a Regular Record Date or a Special
Record Date, as the case may be, provided that, for purposes of Section
12.4 hereof, Record Date has the meaning specified in 12.4(g) hereof.
"Redemption Date", when used with respect to any Security to be
redeemed, means the Optional Redemption Date in the event of an
Optional Redemption or the Provisional Redemption Date, in the event of
a Provisional Redemption, as the case may be.
"Redemption Price", when the Optional Redemption Price, in the
event of an Optional Redemption, or the Provisional Redemption Price,
in the event of a Provisional Redemption, as the case may be.
"Reference Dealer" means a dealer engaged in the trading of
convertible securities.
"Reference Period" has the meaning set forth in Section
12.4(d) hereof.
"Register" has the meaning specified in Section 2.5 hereof.
"Registrar" has the meaning specified in Section 2.5 hereof.
"Registration Rights Agreement" means the Registration Rights
Agreement dated as of February 8, 2000, between the Company and the
Initial Purchasers.
"Regular Record Date" for the interest on the Securities
(including Liquidated Damages, if any) payable means the January 24
(whether or not a Business Day) next preceding a February 8 Interest
Payment Date and the July 24 (whether or not a Business Day) next
preceding an August 8 Interest Payment Date.
"Repurchase Date" has the meaning specified in Section 11.1
hereof.
"Repurchase Price" has the meaning specified in Section 11.1
hereof.
"Repurchase Right" has the meaning specified in Section 11.1
hereof.
"Reset Transaction" means a merger, consolidation or statutory
share exchange to which the entity that is the issuer of the shares of
common stock into which the Securities are then convertible into is a
party, a sale of all or substantially all the assets of that entity, a
recapitalization of those shares of common stock or a distribution
described in
10
Section 12.4(d) hereof, after the effective date of which transaction
or distribution the Securities would be convertible into:
(1) shares of an entity the common stock of which had
a Dividend Yield for the four fiscal quarters of such entity
immediately preceding the public announcement of such transaction or
distribution that was more than 2.5% higher then the Dividend Yield on
the Common Stock (or other common stock then issuable upon conversion
of the Securities) for the four fiscal quarters preceding the public
announcement of such transaction or distribution, or
(2) shares of an entity that announces a dividend
policy prior to the effective date of such transaction or distribution
which policy, if implemented, would result in a Dividend Yield on such
entity's common stock for the next four fiscal quarters that would
result in such a 2.5% basis point increase.
"Responsible Officer", when used with respect to the Trustee,
means any officer of the Trustee, including any vice president,
assistant vice president, secretary, assistant secretary, the
treasurer, any assistant treasurer, the managing director or any other
officer of the Trustee customarily performing functions similar to
those performed by any of the above designated officers and also means,
with respect to a particular corporate trust matter, any other officer
to whom such matter is referred because of such officer's knowledge of
and familiarity with the particular subject.
"Restricted Securities" means the Securities defined as such
in Section 2.3 hereof.
"Restricted Securities Legend" has the meaning set forth in
Section 2.3(a) hereof.
"Rule 144" means Rule 144 under the Securities Act (including
any successor rule thereof), as the same may be amended from time to
time.
"Rule 144A" means Rule 144A as promulgated under the Securities
Act (including any successor rule thereof), as the same may be amended
from time to time.
"SEC" means the Securities and Exchange Commission.
"Securities" has the meaning ascribed to it in the first
paragraph under the caption "Recitals of the Company".
"Securities Act" means the Securities Act of 1933, as amended.
"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 termination payment with respect to 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
11
Indenture or thereafter created, incurred, assumed, guaranteed or in
effect guaranteed by the Company (including all deferrals, renewals,
extensions or refundings of, or amendments, modifications or
supplements to, the foregoing), unless in the case of any particular
Indebtedness the instrument creating or evidencing the same or the
assumption or guarantee thereof expressly provides that such
Indebtedness shall not be senior in right of payment to the Securities
or expressly provides that such Indebtedness is PARI PASSU or junior to
the Securities. The Securities shall not be senior in right of payment
to the outstanding 6 3/4 % Convertible Subordinated Debentures due 2006
(the "2006 Debentures") and shall rank PARI PASSU with the 2006
Debentures. The 2006 Debentures shall not be Senior Debt, as that term
is defined herein. Notwithstanding the foregoing, the term "Senior
Debt" shall include, without limitation, all Designated Senior Debt,
and shall not include Indebtedness of the Company to any Subsidiary.
"Significant Subsidiary" means any Subsidiary which is a
"significant subsidiary" within the meaning of Rule 405 under the
Securities Act.
"Special Record Date" for the payment of any Defaulted Interest
means a date fixed by the Trustee pursuant to Section 2.17 hereof.
"Stated Maturity" means the date specified in any Security as
the fixed date for the payment of principal on such Security or on
which an installment of interest (including Liquidated Damages, if any)
on such Security is due and payable.
"Subsidiary" means a corporation more than 50% of the
outstanding voting stock of which is owned, directly or indirectly, by
the Company or by one or more other Subsidiaries, or by the Company and
one or more other Subsidiaries. For the purposes of this definition
only, "voting stock" means stock which ordinarily has voting power for
the election of directors, whether at all times or only so long as no
senior class of stock has such voting power by reason of any
contingency.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code
Section 77aaa-77bbbb), as in effect on the date of this Indenture;
provided, however, that in the event the TIA is amended after such
date, "TIA" means, to the extent required by such amendment, the Trust
Indenture Act of 1939, as so amended, or any successor statute.
"Trading Day" means:
(1) if the applicable security is listed or admitted
for trading on the New York Stock Exchange or another national security
exchange, a day on which the New York Stock Exchange or such other
national security exchange is open for business;
(2) if the applicable security is quoted on the
Nasdaq National Market, a day on which trades may be made thereon; or
12
(3) if the applicable security is not so listed,
admitted for trading or quoted, any day other than a Saturday or Sunday
or a day on which banking institutions in the State of New York are
authorized or obligated by law or executive order to close.
"Trading Price" of a security on any date of determination
means:
(1) the closing sale price (or, if no closing sale
price is reported, the last reported sale price) of such security on
the New York Stock Exchange on such date;
(2) if such security is not listed for trading on the
New York Stock Exchange on any such date, the closing sale price as
reported in the composite transactions for the principal U.S.
securities exchange on which such security is so listed;
(3) if such security is not so listed on a U.S.
national or regional securities exchange, the closing sale price as
reported by the NASDAQ National Market;
(4) if such security is not so reported, the last
price quoted by Interactive Data Corporation for such security or, if
Interactive Data Corporation is not quoting such price, a similar
quotation service selected by the Company;
(5) if such security is not so quoted, the average of
the mid-point of the last bid and ask prices for such security from at
least two dealers recognized as market-makers for such security; or
(6) if such security is not so quoted, the average of
the last bid and ask prices for such security from a Reference Dealer.
"Transfer Agent" means any Person, which may be the Company,
authorized by the Company to exchange or register the transfer of
Securities.
"Trigger Event" has the meaning specified in Section 12.4(d)
hereof.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have
become such pursuant to the applicable provisions of this Indenture,
and thereafter "Trustee" shall mean such successor Trustee.
"U.S. Government Obligations" means: (1) direct obligations of
the United States of America for the payment of which the full faith
and credit of the United States of America is pledged or (2)
obligations of a person controlled or supervised by and acting as an
agency or instrumentality of the United States of America, the payment
of which is unconditionally guaranteed as a full faith and credit
obligation by the United States of America and which in either case,
are non-callable at the option of the issuer thereof.
"Vice President", when used with respect to the Company, means
any vice president, whether or not designated by a number or a word or
words added before or after the title "vice president".
13
SECTION 1.2 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 Securities;
"indenture security holder" means a Holder;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee; and
"obligor" on the Securities means the Company and any other obligor on
the indenture securities.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule have the
meanings assigned to them by such definitions.
SECTION 1.3 RULES OF CONSTRUCTION.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(1) the terms defined in this Article have the
meanings assigned to them in this Article and include the plural as
well as the singular;
(2) all accounting terms not otherwise defined herein
have the meanings assigned to them in accordance with accounting
principles generally accepted in the United States prevailing at the
time of any relevant computation hereunder; and
(3) the words "herein", "hereof" and "hereunder" and
other words of similar import refer to this Indenture as a whole and
not to any particular Article, Section or other subdivision.
14
ARTICLE 2
THE SECURITIES
SECTION 2.1 TITLE AND TERMS.
The Securities shall be known and designated as the "5% Convertible
Subordinated Notes due 2007"of the Company. The aggregate principal amount of
Securities which may be authenticated and delivered under this Indenture is
limited to $200,000,000 (or $230,000,000 if the over-allotment option set forth
in Section 2 of the Purchase Agreement is exercised in full), except for
securities authenticated and delivered upon registration of, transfer of, or in
exchange for, or in lieu of other Securities pursuant to Section 2.7, 2.8, 2.9,
2.12, 7.5, 10.8, 11.1 or 12.2 hereof. The Securities shall be issuable in
denominations of $1,000 or integral multiples thereof.
The Securities shall mature on February 8, 2007.
Interest shall accrue from February 8, 2000 at the Interest Rate until
the principal thereof is paid or made available for payment. Interest shall be
payable semiannually in arrears on February 8 and August 8 in each year,
commencing August 8, 2000.
Interest on the Securities shall be computed (i) for any full
semiannual period for which a particular Interest Rate is applicable on the
basis of a 360-day year of twelve 30-day months and (ii) for any period for
which a particular Interest Rate is applicable shorter than a full semiannual
period for which interest is calculated, on the basis of a 30-day month and, for
such periods of less than a month, the actual number of days elapsed over a
30-day month. For purposes of determining the Interest Rate, the Trustee may
assume that a Reset Transaction has not occurred unless the Trustee has received
an Officers' Certificate stating that a Reset Transaction has occurred and
specifying the Adjusted Interest Rate then in effect.
A Holder of any Security at the close of business on a Regular Record
Date shall be entitled to receive interest (including Liquidated Damages, if
any) on such Security on the corresponding Interest Payment Date. A Holder of
any Security which is converted after the close of business on a Regular Record
Date and prior to the corresponding Interest Payment Date (other than any
Security whose Maturity is prior to such Interest Payment Date) shall be
entitled to receive interest (including Liquidated Damages, if any) on the
principal amount of such Security, notwithstanding the conversion of such
Security prior to such Interest Payment Date. However, any such Holder which
surrenders any such Security for conversion during the period between the close
of business on such Regular Record Date and ending with the opening of business
on the corresponding Interest Payment Date shall be required to pay the Company
an amount equal to the interest (including Liquidated Damages, if any) on the
principal amount of such Security so converted, which is payable by the Company
to such Holder on such Interest Payment Date, at the time such Holder surrenders
such Security for conversion. Notwithstanding the foregoing, any such Holder
which surrenders for conversion any Security which has been called for
redemption by the Company in a notice of redemption given by the Company
pursuant to Section 10.5 hereof shall be entitled to receive (and retain) such
interest (including Liquidated Damages, if any) and need not pay the Company an
amount equal to the interest (including
15
Liquidated Damages, if any) on the principal amount of such Security so
converted at the time such Holder surrenders such Security for conversion.
Principal of, and premium, if any, and interest on, Global Securities
shall be payable to the Depositary in immediately available funds.
Principal and premium, if any, on Physical Securities shall be payable
at the office or agency of the Company maintained for such purpose, initially
the Corporate Trust Office of the Trustee. Interest on Physical Securities will
be payable by (i) U.S. Dollar check drawn on a bank in The City of New York
mailed to the address of the Person entitled thereto as such address shall
appear in the Register, or (ii) upon application to the Registrar not later than
the relevant Record Date by a Holder of an aggregate principal amount in excess
of $5,000,000, wire transfer in immediately available funds.
The Securities shall be redeemable at the option of the Company as
provided in Article 10 hereof.
The Securities shall have a Repurchase Right exercisable at the option
of Holders as provided in Article 11 hereof.
The Securities shall be convertible as provided in Article 12 hereof.
The Securities shall be subordinated in right of payment to Senior Debt
of the Company as provided in Article 13 hereof.
SECTION 2.2 FORM OF SECURITIES.
The Securities and the Trustee's certificate of authentication to be
borne by such Securities shall be substantially in the form annexed hereto as
Exhibit A, which is incorporated in and made a part of this Indenture. The terms
and provisions contained in the form of Security shall constitute, and are
hereby expressly made, a part of this Indenture and to the extent applicable,
the Company and the Trustee, by their execution and delivery of this Indenture,
expressly agree to such terms and provisions and to be bound thereby.
Any of the Securities may have such letters, numbers or other marks of
identification and such notations, legends and endorsements as the officers
executing the same may approve (execution thereof to be conclusive evidence of
such approval) and as are not inconsistent with the provisions of this
Indenture, or as may be required to comply with any law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any
securities exchange or automated quotation system on which the Securities may be
listed or designated for issuance, or to conform to usage.
The Securities will be offered and sold only to QIBs in reliance on
Rule 144A and shall be issued initially only in the form of one or more
permanent Global Securities (each, a "Global Security") in registered form
without interest coupons. The Global Securities shall be:
16
(1) duly executed by the Company and authenticated by
the Trustee as hereinafter provided;
(2) registered in the name of the Depositary (or its
nominee) for credit to the respective accounts of the Holders at the
Depositary; and
(3) deposited with the Trustee, as custodian for the
Depositary.
The Global Securities shall be substantially in the form of Security
set forth in Exhibit A annexed hereto (including the text and schedule called
for by footnotes 1 and 2 thereto). The aggregate principal amount of the Global
Securities may from time to time be increased or decreased by adjustments made
on the records of the Trustee, as custodian for the Depositary (or its nominee),
in accordance with the instructions given by the Holder thereof, as hereinafter
provided.
Securities issued in exchange for interests in the Global Securities
pursuant to Section 2.8(d) hereof shall be issued in the form of permanent
definitive Securities (the "Physical Securities") in registered form without
interest coupons. The Physical Securities shall be substantially in the form set
forth in Exhibit A annexed hereto.
The Securities shall be typed, printed, lithographed or engraved or
produced by any combination of these methods or may be produced in any other
manner permitted by the rules of any securities exchange on which the Securities
may be listed, all as determined by the Officers executing such Securities, as
evidenced by their execution of such Securities.
SECTION 2.3 LEGENDS.
(A) RESTRICTED SECURITIES LEGENDS.
Each Security issued hereunder shall, upon issuance, bear the legend
set forth in Section 2.3(a)(i) or Section 2.3(a)(ii) (each, a "Restricted
Securities Legend"), as the case may be, and such legend shall not be removed
except as provided in Section 2.3(a)(iii). Each Security that bears or is
required to bear the Restricted Securities Legend set forth in Section 2.3(a)(i)
(together with any Common Stock issued upon conversion of the Securities and
required to bear the Restricted Securities Legend set forth in Section
2.3(a)(ii), collectively, the "Restricted Securities") shall be subject to the
restrictions on transfer set forth in this Section 2.3(a) (including the
Restricted Securities Legend set forth below), and the Holder of each such
Restricted Security, by such Holder's acceptance thereof, shall be deemed to
have agreed to be bound by all such restrictions on transfer.
As used in Section 2.3(a), the term "transfer" encompasses any sale,
pledge, transfer or other disposition whatsoever of any Restricted Security.
(i) Restricted Securities Legend for Securities.
17
Except as provided in Section 2.3(a)(iii), until two years after the
original issuance date of any Security, any certificate evidencing such Security
(and all securities issued in exchange therefor or substitution thereof, other
than Common Stock, if any, issued upon conversion thereof which shall bear the
legend set forth in Section 2.3(a)(ii), if applicable) shall bear a Restricted
Securities Legend in substantially the following form:
THE SECURITY EVIDENCED BY THIS CERTIFICATE HAS NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR
ANY STATE SECURITIES LAWS, AND MAY NOT BE OFFERED OR SOLD WITHIN THE
UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS
EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ACQUISITION HEREOF,
THE HOLDER (1) REPRESENTS THAT IT IS A "QUALIFIED INSTITUTIONAL BUYER"
AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT; (2) AGREES THAT IT
WILL NOT WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THIS SECURITY
RESELL OR OTHERWISE TRANSFER THE SECURITY EVIDENCED HEREBY OR THE
COMMON STOCK ISSUABLE UPON CONVERSION OF SUCH SECURITY EXCEPT (A) TO
THE COMPANY OR ANY SUBSIDIARY THEREOF, (B) TO A QUALIFIED INSTITUTIONAL
BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C)
PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER
THE SECURITIES ACT (IF AVAILABLE) OR (D) PURSUANT TO A REGISTRATION
STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT
AND WHICH CONTINUES TO BE EFFECTIVE AT THE TIME OF SUCH TRANSFER; AND
(3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THE SECURITY
EVIDENCED HEREBY IS TRANSFERRED (OTHER THAN A TRANSFER PURSUANT TO
CLAUSE 2(D) ABOVE) A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.
IN CONNECTION WITH ANY TRANSFER OF THE SECURITY EVIDENCED HEREBY WITHIN
TWO YEARS AFTER THE ORIGINAL ISSUANCE OF SUCH SECURITY (OTHER THAN A
TRANSFER PURSUANT TO CLAUSE (2)(D) ABOVE), THE HOLDER MUST CHECK THE
APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF RELATING TO THE MANNER
OF SUCH TRANSFER AND SUBMIT THIS CERTIFICATE TO THE TRUSTEE (OR ANY
SUCCESSOR TRUSTEE, AS APPLICABLE). IF THE PROPOSED TRANSFER IS PURSUANT
TO CLAUSE (2)(C) ABOVE, THE HOLDER MUST, PRIOR TO SUCH TRANSFER,
FURNISH TO THE TRUSTEE (OR ANY SUCCESSOR TRUSTEE, AS APPLICABLE), SUCH
CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS THE COMPANY MAY
REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT
TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THIS LEGEND WILL BE
REMOVED UPON THE EARLIER OF THE TRANSFER OF THE SECURITY EVIDENCED
HEREBY PURSUANT TO CLAUSE (2)(D) ABOVE OR THE EXPIRATION OF TWO YEARS
FROM THE ORIGINAL ISSUANCE OF THE SECURITY EVIDENCED HEREBY.
18
AS USED HEREIN, THE TERMS "UNITED STATES" AND "U.S. PERSON" HAVE THE
MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.
(ii) Restricted Securities Legend for Common Stock Issued
Upon Conversion of the Securities.
Until two years after the original issuance date of any Security, any
stock certificate representing Common Stock issued upon conversion of such
Security shall bear a Restricted Securities Legend in substantially the
following form:
THE SECURITY EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS, AND MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED
STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS
SET FORTH IN THE FOLLOWING SENTENCE. THE HOLDER HEREOF AGREES THAT
UNTIL THE EXPIRATION OF TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THE
SECURITY UPON THE CONVERSION OF WHICH THE COMMON STOCK EVIDENCED HEREBY
WAS ISSUED, (1) IT WILL NOT RESELL OR OTHERWISE TRANSFER THE SECURITY
EXCEPT (A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, (B) PURSUANT TO
THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE
SECURITIES ACT (IF AVAILABLE) OR (C) PURSUANT TO A REGISTRATION
STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT
AND WHICH CONTINUES TO BE EFFECTIVE AT THE TIME OF SUCH TRANSFER; (2)
PRIOR TO ANY SUCH TRANSFER OTHER THAN A TRANSFER PURSUANT TO CLAUSE
1(C) ABOVE, IT WILL FURNISH TO SUCH TRANSFER AGENT (OR ANY SUCCESSOR
TRANSFER AGENT, AS APPLICABLE), SUCH CERTIFICATIONS, LEGAL OPINIONS OR
OTHER INFORMATION AS THE COMPANY MAY REASONABLY REQUIRE TO CONFIRM THAT
SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT; AND (3) IT WILL DELIVER TO EACH PERSON TO WHOM THE
COMMON STOCK EVIDENCED HEREBY IS TRANSFERRED (OTHER THAN A TRANSFER
PURSUANT TO A CLAUSE (1)(C) ABOVE) A NOTICE SUBSTANTIALLY TO THE EFFECT
OF THIS LEGEND. THIS LEGEND WILL BE REMOVED UPON THE EARLIER OF THE
TRANSFER OF THE COMMON STOCK EVIDENCED HEREBY PURSUANT TO CLAUSE (1)(C)
ABOVE OR THE EXPIRATION OF TWO YEARS FROM THE ORIGINAL ISSUANCE OF THE
SECURITY UPON THE CONVERSION OF WHICH THE COMMON STOCK EVIDENCED HEREBY
WAS ISSUED. AS USED HEREIN, THE TERMS "UNITED STATES" AND "U.S. PERSON"
HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES
ACT.
(iii) Removal of the Restricted Securities Legends.
19
Each Security or share of Common Stock issued upon conversion of such
Security shall bear the Restricted Securities Legend set forth in Section
2.3(a)(i) or 2.3(a)(ii), as the case may be, until the earlier of:
(A) two years after the original issuance
date of such Security;
(B) such Security or Common Stock has been
sold pursuant to a registration statement that has
been declared effective under the Securities Act (and
which continues to be effective at the time of such
sale); or
(C) such Common Stock has been issued upon
conversion of Securities that have been sold pursuant
to a registration statement that has been declared
effective under the Securities Act (and which
continues to be effective at the time of such sale).
The Holder must give notice thereof to the Trustee and any transfer agent for
the Common Stock, as applicable.
Notwithstanding the foregoing, the Restricted Securities Legend may
be removed if there is delivered to the Company such satisfactory evidence,
which may include an opinion of independent counsel, as may be reasonably
required by the Company that neither such legend nor the restrictions on
transfer set forth therein are required to ensure that transfers of such
Security will not violate the registration requirements of the Securities
Act. Upon provision of such satisfactory evidence, the Trustee, at the
written direction of the Company, shall authenticate and deliver in exchange
for such Securities another Security or Securities having an equal aggregate
principal amount that does not bear such legend. If the Restricted Securities
Legend has been removed from a Security as provided above, no other Security
issued in exchange for all or any part of such Security shall bear such
legend, unless the Company has reasonable cause to believe that such other
Security is a "restricted security" within the meaning of Rule 144 and
instructs the Trustee in writing to cause a Restricted Securities Legend to
appear thereon.
Any Security (or security issued in exchange or substitution thereof)
as to which such restrictions on transfer shall have expired in accordance with
their terms or as to which the conditions for removal of the Restricted
Securities Legend set forth in Section 2.3(a)(i) as set forth therein have been
satisfied may, upon surrender of such Security for exchange to the Registrar in
accordance with the provisions of Section 2.7 hereof, be exchanged for a new
Security or Securities, of like tenor and aggregate principal amount, which
shall not bear the Restricted Securities Legend required by Section 2.3(a)(i).
Any such Common Stock as to which such restrictions on transfer shall
have expired in accordance with their terms or as to which the conditions for
removal of the Restricted Securities Legend set forth in Section 2.3(a)(ii) as
set forth therein have been satisfied may, upon surrender of the certificates
representing such shares of Common Stock for exchange in accordance with the
procedures of the transfer agent for the Common Stock, be exchanged for a new
certificate or
20
certificates for a like aggregate number of shares of Common Stock, which shall
not bear the Restricted Securities Legend required by Section 2.3(a)(ii).
(b) GLOBAL SECURITY LEGEND.
Each Global Security shall also bear the following legend on the face
thereof:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY ("DTC") TO INHALE THERAPEUTIC SYSTEMS, INC. (OR ITS
SUCCESSOR) OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, CONVERSION OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
IN SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND
ANY PAYMENT HEREON 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 SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
SECTION 2.4 EXECUTION, AUTHENTICATION, DELIVERY AND DATING.
Two Officers shall execute the Securities on behalf of the Company by
manual or facsimile signature. If an Officer whose signature is on a Security no
longer holds that office at the time the Security is authenticated, the Security
shall be valid nevertheless.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Securities executed by the Company to
the Trustee for authentication, together with a Company Order for the
authentication and delivery of such Securities, and the Trustee in accordance
with such Company Order shall authenticate and deliver such Securities as in
this Indenture provided and not otherwise.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture, or
be valid or obligatory for any purpose, unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by or on behalf of the Trustee by manual signature, and such
certificate upon any Security shall be conclusive evidence, and the only
evidence, that such Security has been duly authenticated and delivered
hereunder.
The Trustee may appoint an authenticating agent or agents reasonably
acceptable to the Company with respect to the Securities. Unless limited by the
terms of such appointment, an authenticating agent may authenticate Securities
whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent.
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SECTION 2.5 REGISTRAR AND PAYING AGENT.
The Company shall maintain an office or agency where Securities may be
presented for registration of transfer or for exchange (the "Registrar") and an
office or agency where Securities may be presented for payment (the "Paying
Agent"). The Registrar shall keep a register of the Securities (the "Register")
and of their transfer and exchange. The Company may appoint one or more
co-Registrars and one or more additional Paying Agents for the Securities. The
term "Paying Agent" includes any additional paying agent and the term
"Registrar" includes any additional registrar. The Company may change any Paying
Agent or Registrar without prior notice to any Holder.
The Company will cause each Paying Agent (other than the Trustee) to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject to the provisions of this Section, that
such Paying Agent will:
(1) hold all sums held by it for the payment of the
principal of and premium, if any, or interest (including Liquidated
Damages, if any) on Securities in trust for the benefit of the Persons
entitled thereto until such sums shall be paid to such Persons or
otherwise disposed of as provided in this Indenture;
(2) give the Trustee notice of any Default by the
Company in the making of any payment of principal and premium, if any,
or interest (including Liquidated Damages, if any); and
(3) at any time during the continuance of any such
Default, upon the written request of the Trustee, forthwith pay to the
Trustee all sums so held in trust by such Paying Agent.
The Company shall give prompt written notice to the Trustee of the name
and address of any Agent who is not a party to this Indenture. If the Company
fails to appoint or maintain another entity as Registrar or Paying Agent, the
Trustee shall act as such. The Company or any Affiliate of the Company may act
as Paying Agent or Registrar; provided, however, that none of the Company, its
subsidiaries or the Affiliates of the foregoing shall act:
(i) as Paying Agent in connection with redemptions, offers
to purchase and discharges, as otherwise specified in this Indenture,
and
(ii)as Paying Agent or Registrar if a Default or Event of
Default has occurred and is continuing.
The Company hereby initially appoints the Trustee as Registrar and
Paying Agent for the Securities.
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SECTION 2.6 PAYING AGENT TO HOLD ASSETS IN TRUST.
Not later than 11:00 a.m. (New York City time) on each due date of the
principal, premium, if any, and interest (including Liquidated Damages, if any)
on any Securities, the Company shall deposit with one or more Paying Agents
money in immediately available funds sufficient to pay such principal, premium,
if any, and interest (including Liquidated Damages, if any) so becoming due. 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) shall have no further liability for the money so paid over to the
Trustee.
If the Company shall act as a Paying Agent, it shall, prior to or on
each due date of the principal of and premium, if any, or interest (including
Liquidated Damages, if any) on any of the Securities, segregate and hold in
trust for the benefit of the Holders a sum sufficient with monies held by all
other Paying Agents, to pay the principal and premium, if any, or interest
(including Liquidated Damages, if any) so becoming due until such sums shall be
paid to such Persons or otherwise disposed of as provided in this Indenture, and
shall promptly notify the Trustee of its action or failure to act.
SECTION 2.7 GENERAL PROVISIONS RELATING TO TRANSFER AND EXCHANGE.
The Securities are issuable only in registered form. A Holder may
transfer a Security only by written application to the Registrar stating the
name of the proposed transferee and otherwise complying with the terms of this
Indenture. No such transfer shall be effected until, and such transferee shall
succeed to the rights of a Holder only upon, final acceptance and registration
of the transfer by the Registrar in the Register. Furthermore, any Holder of a
Global Security shall, by acceptance of such Global Security, agree that
transfers of beneficial interests in such Global Security may be effected only
through a book-entry system maintained by the Holder of such Global Security (or
its agent) and that ownership of a beneficial interest in the Security shall be
required to be reflected in a book-entry. Notwithstanding the foregoing, in the
case of a Restricted Security, a beneficial interest in a Global Security being
transferred in reliance on an exemption from the registration requirements of
the Securities Act other than in accordance with Rule 144 and Rule 144A may only
be transferred for a Physical Security.
When Securities are presented to the Registrar with a request to
register the transfer or to exchange them for an equal aggregate principal
amount of Securities of other authorized denominations, the Registrar shall
register the transfer or make the exchange as requested if its requirements for
such transactions are met (including that such Securities are duly endorsed or
accompanied by a written instrument of transfer duly executed by the Holder
thereof or by an attorney who is authorized in writing to act on behalf of the
Holder). Subject to Section 2.4 hereof, to permit registrations of transfers and
exchanges, the Company shall execute and the Trustee shall authenticate
Securities at the Registrar's request. No service charge shall be made for any
registration of transfer or exchange or redemption of the Securities, 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 taxes or other similar governmental charge payable upon exchanges
pursuant to Section 2.14, 7.5 or 10.8 hereof).
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Neither the Company nor the Registrar shall be required to exchange or
register a transfer of any Securities:
(1) for a period of 15 Business Days prior to the day
of any selection of Securities for redemption under Article 10 hereof;
(2) so selected for redemption or, if a portion of
any Security is selected for redemption, such portion thereof selected
for redemption; or
(3) surrendered for conversion or, if a portion of
any Security is surrendered for conversion, such portion thereof
surrendered for conversion.
SECTION 2.8 BOOK-ENTRY PROVISIONS FOR THE GLOBAL SECURITIES.
(a) The Global Securities initially shall:
(i) be registered in the name of the Depositary (or a
nominee thereof);
(ii)be delivered to the Trustee as custodian for such
Depositary; and
(iii) bear the Restricted Securities Legend as set forth in
Section 2.3(a)(i) hereof.
Members of, or participants in, the Depositary ("DTC Participants")
shall have no rights under this Indenture with respect to any Global Security
held on their behalf by the Depositary, or the Trustee as its custodian, or
under such Global Security, and the Depositary may be treated by the Company,
the Trustee and any agent of the Company or the Trustee as the absolute owner of
such Global Security for all purposes whatsoever. Notwithstanding the foregoing,
nothing contained herein shall prevent the Company, the Trustee or any agent of
the Company or Trustee from giving effect to any written certification, proxy or
other authorization furnished by the Depositary or impair, as between the
Depositary and the DTC Participants, the operation of customary practices
governing the exercise of the rights of a Holder of any Security.
(b) The registered Holder of a Global Security may grant proxies and
otherwise authorize any Person, including DTC Participants and Persons that may
hold interests through DTC Participants, to take any action which a Holder is
entitled to take under this Indenture or the Securities.
(c) A Global Security may not be transferred, in whole or in part, to
any Person other than the Depositary (or a nominee thereof), and no such
transfer to any such other Person may be registered. Beneficial interests in a
Global Security may be transferred in accordance with the rules and procedures
of the Depositary and the provisions of Section 2.9 hereof.
(d) If at any time:
(i) the Depositary notifies the Company in writing that it
is no longer willing or able to continue to act as Depositary for the
Global Securities, or the Depositary ceases to
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be a "clearing agency" registered under the Exchange Act and a
successor depositary for the Global Securities is not appointed by the
Company within 90 days of such notice or cessation;
(ii) the Company, at its option, notifies the Trustee in
writing that it elects to cause the issuance of the Securities in
definitive form under this Indenture in exchange for all or any part of
the Securities represented by a Global Security or Global Securities;
or
(iii) an Event of Default has occurred and is continuing
and the Registrar has received a request from the Depositary for the
issuance of Physical Securities in exchange for such Global Security or
Global Securities,
the Depositary shall surrender such Global Security or Global Securities to the
Trustee for cancellation and the Company shall execute, and the Trustee, upon
receipt of an Officers' Certificate and Company Order for the authentication and
delivery of Securities, shall authenticate and deliver in exchange for such
Global Security or Global Securities, Physical Securities of like tenor as that
of the Global Securities in an aggregate principal amount equal to the aggregate
principal amount of such Global Security or Global Securities. Such Physical
Securities shall be registered in such names as the Depositary shall identify in
writing as the beneficial owners of the Securities represented by such Global
Security or Global Securities (or any nominee thereof).
Notwithstanding the foregoing, in connection with any transfer of
beneficial interests in a Global Security to beneficial owners pursuant to
Section 2.8(d) hereof, the Registrar shall reflect on its books and records the
date and a decrease in the principal amount of such Global Security in an amount
equal to the principal amount of the beneficial interest in such Global Security
to be transferred.
SECTION 2.9 SPECIAL TRANSFER PROVISIONS.
Unless a Security is transferred after the time period referred to in
Rule 144(k) under the Securities Act or otherwise sold pursuant to a
registration statement that has been declared effective under the Securities Act
(and which continues to be effective at the time of such sale), the following
provisions shall apply.
With respect to the registration of any proposed transfer of Securities
to a QIB:
(i) If the Securities to be transferred consist of an
interest in the Global Securities, the transfer of such interest may be
effected only through the book-entry system maintained by the
Depositary.
(ii)If the Securities to be transferred consist of Physical
Securities, the Registrar shall register the transfer if such transfer
is being made by a proposed transferor who has checked the box provided
for on the form of Security stating, or has otherwise advised the
Company and the Registrar in writing, that the sale has been made in
25
compliance with the provisions of Rule 144A to a transferee who has
signed the certification provided for on the form of Security stating
or has otherwise advised the Company and the Registrar in writing that:
(A) it is purchasing the Securities for its
own account or an account with respect to which it
exercises sole investment discretion, in each case
for investment and not with a view to distribution;
(B) it and any such account is a QIB within
the meaning of Rule 144A;
(C) it is aware that the sale to it is being
made in reliance on Rule 144A;
(D) it acknowledges that it has received
such information regarding the Company as it has
requested pursuant to Rule 144A or has determined not
to request such information; and
(E) it is aware that the transferor is
relying upon its foregoing representations in order
to claim the exemption from registration provided by
Rule 144A.
In addition, the Registrar shall reflect on its books and records the
date and an increase in the principal amount of the Global Securities in an
amount equal to the principal amount of the Physical Securities to be
transferred, and the Trustee shall cancel the Physical Securities so
transferred.
By its acceptance of any Security bearing the Restricted Securities
Legend, each Holder of such a Security acknowledges the restrictions on transfer
of such Security set forth in this Indenture and agrees that it will transfer
such Security only as provided in this Indenture. The Registrar shall not
register a transfer of any Security unless such transfer complies with the
restrictions on transfer of such Security set forth in this Indenture. The
Registrar shall be entitled to receive and rely on written instructions from the
Company verifying that such transfer complies with such restrictions on
transfer. In connection with any transfer of Securities, each Holder agrees by
its acceptance of the Securities to furnish the Registrar or the Company such
certifications, legal opinions or other information as either of them may
reasonably require to confirm that such transfer is being made pursuant to an
exemption from, or a transaction not subject to, the registration requirements
of the Securities Act; provided that the Registrar shall not be required to
determine (but may rely on a determination made by the Company with respect to)
the sufficiency of any such certifications, legal opinions or other information.
The Registrar shall retain copies of all letters, notices and other
written communications received pursuant to Section 2.8 hereof or this Section
2.9. The Company shall have the right to inspect and make copies of all such
letters, notices or other written communications at any reasonable time upon the
giving of reasonable written notice to the Registrar.
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SECTION 2.10 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 and shall otherwise comply with Section 312(a) of the TIA. If the
Trustee is not the Registrar, the Company shall furnish to the Trustee prior to
or on 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 relating to such
Interest Payment Date or request, as the case may be.
SECTION 2.11 PERSONS DEEMED OWNERS.
The Company, the Trustee and any agent of the Company or the Trustee
may treat the registered Holder of a Global Security as the absolute owner of
such Global Security for the purpose of receiving payment thereof or on account
thereof and for all other purposes whatsoever, whether or not such Security be
overdue, and notwithstanding any notice of ownership or writing thereon, or any
notice of previous loss or theft or other interest therein. The Company, the
Trustee and any agent of the Company or the Trustee may treat the Person in
whose name any Security is registered as the owner of such Security for the
purpose of receiving payment of principal of and premium, if any, and interest
(including Liquidated Damages, if any) on such Security and for all other
purposes whatsoever, whether or not such Security be overdue, and
notwithstanding any notice of ownership or writing thereon, or any notice of
previous loss or theft or other interest therein.
SECTION 2.12 MUTILATED, DESTROYED, LOST OR STOLEN SECURITIES.
If any mutilated Security is surrendered to the Trustee, the Company
shall execute and the Trustee shall authenticate and deliver in exchange
therefor a new Security of like tenor and principal amount and bearing a number
not contemporaneously outstanding.
If there is delivered to the Company and the Trustee
(1) evidence to their satisfaction of the destruction,
loss or theft of any Security, and
(2) such security or indemnity as may be required by
them to save each of them and any agent of either of them harmless,
then, in the absence of notice to the Company or the Trustee that such
Security has been acquired by a bona fide purchaser, the Company shall
execute and, upon request, the Trustee shall authenticate and deliver,
in lieu of any such destroyed, lost or stolen Security, a new Security
of like tenor and principal amount and bearing a number not
contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, the Company in its discretion, but
subject to any conversion rights, may, instead of issuing a new Security, pay
such Security, upon satisfaction of the condition set forth in the preceding
paragraph.
27
Upon the issuance of any new Security under this Section, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security issued pursuant to this Section in lieu of any
destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Security shall be at any time enforceable by anyone, and such new
Security shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Securities duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities.
SECTION 2.13 TREASURY SECURITIES.
In determining whether the Holders of the requisite principal amount of
Outstanding Securities are present at a meeting of Holders for quorum purposes
or have given any request, demand, authorization, direction, notice, consent or
waiver hereunder, Securities owned by the Company or any Affiliate of the
Company shall be disregarded and deemed not to be Outstanding, except that, in
determining whether the Trustee shall be protected in relying upon any such
determination as to the presence of a quorum or upon any such request, demand,
authorization, direction, notice, consent or waiver, only such Securities of
which the Trustee has received written notice and are so owned shall be so
disregarded.
SECTION 2.14 TEMPORARY SECURITIES.
Pending the preparation of Securities in definitive form, the Company
may execute and the Trustee shall, upon written request of the Company,
authenticate and deliver temporary Securities (printed or lithographed).
Temporary Securities shall be issuable in any authorized denomination, and
substantially in the form of the Securities in definitive form but with such
omissions, insertions and variations as may be appropriate for temporary
Securities, all as may be determined by the Company. Every such temporary
Security shall be executed by the Company and authenticated by the Trustee upon
the same conditions and in substantially the same manner, and with the same
effect, as the Securities in definitive form. Without unreasonable delay, the
Company will execute and deliver to the Trustee Securities in definitive form
(other than in the case of Securities in global form) and thereupon any or all
temporary Securities (other than any such Securities in global form) may be
surrendered in exchange therefor, at each office or agency maintained by the
Company pursuant to Section 9.2 and the Trustee shall authenticate and deliver
in exchange for such temporary Securities an equal aggregate principal amount of
Securities in definitive form. Such exchange shall be made by the Company at its
own expense and without any charge therefor. Until so exchanged, the temporary
Securities shall in all respects be entitled to the same benefits and subject to
the same limitations under this Indenture as Securities in definitive form
authenticated and delivered hereunder.
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SECTION 2.15 CANCELLATION.
All securities surrendered for payment, redemption, repurchase,
conversion, registration of transfer or exchange shall, if surrendered to any
Person other than the Trustee, be delivered to the Trustee. All Securities so
delivered shall be canceled promptly by the Trustee, and no Securities shall be
issued in lieu thereof except as expressly permitted by any of the provisions of
this Indenture. Upon written instructions of the Company, the Trustee shall
destroy canceled Securities and, after such destruction, shall deliver a
certificate of such destruction to the Company. If the Company shall acquire any
of the Securities, such acquisition shall not operate as a redemption or
satisfaction of the indebtedness represented by such Securities unless the same
are delivered to the Trustee for cancellation.
SECTION 2.16 CUSIP NUMBERS.
The Company in issuing the Securities may use "CUSIP" numbers (if then
generally in use), and the Trustee shall use CUSIP numbers in notices of
redemption or exchange as a convenience to Holders; provided that any such
notice shall state that no representation is made as to the correctness of such
numbers either as printed on the Securities or as contained in any such notice
and that reliance may be placed only on the other identification numbers printed
on the Securities, and any such redemption shall not be affected by any defect
in or omission of such numbers. The Company shall promptly notify the Trustee of
any change in the CUSIP numbers.
SECTION 2.17 DEFAULTED INTEREST.
If the Company fails to make a payment of interest (including
Liquidated Damages, if any) on any Security when due and payable ("Defaulted
Interest"), it shall pay such Defaulted Interest plus (to the extent lawful) any
interest payable on the Defaulted Interest, in any lawful manner. It may elect
to pay such Defaulted Interest, plus any such interest payable on it, to the
Persons who are Holders of such Securities on which the interest is due on a
subsequent Special Record Date. The Company shall notify the Trustee in writing
of the amount of Defaulted Interest proposed to be paid on each such Security.
The Company shall fix any such Special Record Date and payment date for such
payment. At least 15 days before any such Special Record Date, the Company shall
mail to Holders affected thereby a notice that states the Special Record Date,
the Interest Payment Date, and amount of such interest (and such Liquidated
Damages, if any) to be paid.
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ARTICLE 3
SATISFACTION AND DISCHARGE
SECTION 3.1 SATISFACTION AND DISCHARGE OF INDENTURE.
When:
(1) The Company shall deliver to the trustee for cancellation
all securities previously authenticated (other than any securities
which have been destroyed, lost or stolen and in lieu of, or in
substitution for which, other securities shall have been authenticated
and delivered) and not previously canceled, or
(2) all the securities not previously canceled or delivered to
the trustee for cancellation shall have become due and payable, or are
by their terms to become due and payable within one year or are to be
called for redemption within one year under arrangements satisfactory
to the Trustee for the giving of notice of redemption,
(A) the Company shall deposit with the Trustee, in
trust, cash in U.S. dollars and/or U.S. Government Obligations which
through the payment of interest and principal in respect thereof, in
accordance with their terms, will provide (and without reinvestment and
assuming no tax liability will be imposed on such Trustee), not later
than one day before the due date of any payment of money, an amount in
cash, sufficient, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification
thereof delivered to the Trustee, to pay principal of, premium, if any,
or interest (including Liquidated Damages, if any) on all of the
Securities (other than any Securities which shall have been mutilated,
destroyed, lost or stolen and in lieu of or in substitution for which
other Securities shall have been authenticated and delivered) not
previously canceled or delivered to the Trustee for cancellation, on
the dates such payments of principal, premium, if any, or interest
(including Liquidated Damages, if any) are due to such date of maturity
or redemption, as the case may be, and
(B) the Company shall have delivered to the Trustee
an Officers' Certificate and an Opinion of Counsel to the effect that
(x) the Company has received from, or there has been published by, the
Internal Revenue Service a ruling or (y) since the date of execution of
this Indenture, there has been a change in the applicable federal
income tax law, in the case of either clause (x) or (y) to the effect
that, and based thereon such Opinion of Counsel shall confirm that, the
Holders will not recognize income, gain or loss for federal income tax
purposes as a result of such deposit and discharge and will be subject
to federal income tax on the same amount and in the same manner and at
the same times as would have been the case if such deposit and
discharge had not occurred, and
30
if, in the case of either clause (1) or (2), the Company shall also pay or cause
to be paid all other sums payable hereunder by the Company, then this Indenture
shall cease to be of further effect (except as to:
(i) remaining rights of registration of transfer,
substitution and exchange and conversion of Securities,
(ii) rights hereunder of Holders to receive payments
of principal of and premium, if any, and interest (including
Liquidated Damages, if any) on, the Securities and the other
rights, duties and obligations of Holders, as beneficiaries
hereof with respect to the amounts, if any, so deposited with
the Trustee, and
(iii) the rights, obligations and immunities of the
Trustee hereunder),
and the Trustee, on demand of the Company accompanied by an Officers'
Certificate and an Opinion of Counsel and at the cost and expense of the
Company, shall execute proper instruments acknowledging satisfaction of and
discharging this Indenture; provided, however, the Company shall reimburse the
Trustee for all amounts due the Trustee under Section 5.8 hereof and for any
costs or expenses thereafter reasonably and properly incurred by the Trustee and
to compensate the Trustee for any services thereafter reasonably and properly
rendered by the Trustee in connection with this Indenture or the Securities.
SECTION 3.2 DEPOSITED MONIES TO BE HELD IN TRUST.
Subject to Section 3.3 hereof, all monies deposited with the Trustee
pursuant to Section 3.1 hereof shall be held in trust and applied by it to the
payment, notwithstanding the provisions of Article 13 hereof, either directly or
through any Paying Agent (including the Company if acting as its own Paying
Agent), to the Holders of the particular Securities for the payment or
redemption of which such monies have been deposited with the Trustee, of all
sums due and to become due thereon for principal, premium, if any, and interest
(including Liquidated Damages, if any). All monies deposited with the Trustee
pursuant to Section 3.1 hereof (and held by it or any Paying Agent) for the
payment of Securities subsequently converted shall be returned to the Company
upon request of the Company.
SECTION 3.3 RETURN OF UNCLAIMED MONIES.
The Trustee and the Paying Agent shall pay to the Company any money
held by them for the payment of principal or premium, if any, or interest
(including Liquidated Damages, if any) that remains unclaimed for two years
after the date upon which such payment shall have become due. After payment to
the Company, Holders entitled to the money must look to the Company for payment
as general creditors unless an applicable abandoned property law designates
another Person, and all liability of the Trustee and such Paying Agent with
respect to such money shall cease.
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ARTICLE 4
DEFAULTS AND REMEDIES
SECTION 4.1 EVENTS OF DEFAULT.
An "Event of Default" with respect to the Securities occurs when any of
the following occurs (whatever the reason for such Event of Default and whether
it shall be occasioned by the provisions of Article 13 hereof or be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(a) the Company defaults in the payment of the principal of or premium,
if any, on any of the Securities when it becomes due and payable at Maturity,
upon redemption or exercise of a Repurchase Right or otherwise, whether or not
such payment is prohibited by Article 13 hereof; or
(b) the Company defaults in the payment of interest (including
Liquidated Damages, if any) on any of the Securities when it becomes due and
payable and such default continues for a period of 30 days, whether or not such
payment is prohibited by Article 13 hereof; or
(c) the Company fails to perform or observe any other term, covenant or
agreement contained in the Securities or this Indenture and the default
continues for a period of 60 days after written notice of such failure,
requiring the Company to remedy the same, shall have been given to the Company
by the Trustee or to the Company and the Trustee by the Holders of at least 25%
in aggregate principal amount of the Outstanding Securities; or
(d) (i) the Company fails to make any payment by the end of the
applicable grace period, if any, after the maturity of any Indebtedness for
borrowed money in an amount in excess of $5,000,000 (provided that such failure
shall not constitute an Event of Default if (1) the Company determines, in good
faith, that a lessor under a lease described in clause (3)(a) of the definition
of Indebtedness breached a covenant under the lease and the Company has given
notice of the breach to the lessor and the Trustee and (2) as a result of the
breach, the Company withholds payment under the lease) (a "Default Exception"),
or (ii) there is an acceleration of any Indebtedness for borrowed money in an
amount in excess of $5,000,000 because of a default with respect to such
Indebtedness (other than a Default Exception) without such Indebtedness having
been discharged or such acceleration having been cured, waived, rescinded or
annulled, in the case of either (i) or (ii) above, for a period of 30 days after
written notice to the Company by the Trustee or to the Company and the Trustee
by Holders of at least 25% in aggregate principal amount of the Outstanding
Securities; or
(e) the entry by a court having jurisdiction in the premises of (i) a
decree or order for relief in respect of the Company in an involuntary case or
proceeding under any applicable U.S. federal or state bankruptcy, insolvency,
reorganization or other similar law or (ii) a decree or order adjudging the
Company a bankrupt or insolvent, or approving as properly filed a petition
seeking reorganization, arrangement, adjustment or composition of or in respect
of the Company
32
under any applicable U.S. federal or state law, or appointing a custodian,
receiver, liquidator, assignee, trustee, sequestrator or other similar official
of the Company or of any substantial part of its property, or ordering the
winding up or liquidation of its affairs, and the continuance of any such decree
or order for relief or any such other decree or order unstayed and in effect for
a period of 60 consecutive days; or
(f) the commencement by the Company of a voluntary case or proceeding
under any applicable U.S. federal or state bankruptcy, insolvency,
reorganization or other similar law or of any other case or proceeding to be
adjudicated a bankrupt or insolvent, or the consent by the Company to the entry
of a decree or order for relief in respect of the Company in an involuntary case
or proceeding under any applicable U.S. federal or state bankruptcy, insolvency,
reorganization or other similar law or to the commencement of any bankruptcy or
insolvency case or proceeding against the Company, or the filing by the Company
of a petition or answer or consent seeking reorganization or relief under any
applicable U.S. federal or state law, or the consent by the Company to the
filing of such petition or to the appointment of or the taking possession by a
custodian, receiver, liquidator, assignee, trustee, sequestrator or other
similar official of the Company or of any substantial part of its property, or
the making by the Company of an assignment for the benefit of creditors, or the
admission by the Company in writing of its inability to pay its debts generally
as they become due, or the taking of corporate action by the Company expressly
in furtherance of any such action.
SECTION 4.2 ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.
If an Event of Default with respect to Outstanding Securities (other
than an Event of Default specified in Section 4.1(e) or 4.1(f) hereof) occurs
and is continuing, the Trustee or the Holders of at least 25% in aggregate
principal amount of the Outstanding Securities, by written notice to the
Company, may declare due and payable 100% of the principal amount of all
Outstanding Securities plus any accrued and unpaid interest to the date of
payment. Upon a declaration of acceleration, such principal and accrued and
unpaid interest to the date of payment shall be immediately due and payable.
If an Event of Default specified in Section 4.1(e) or 4.1(f) hereof
occurs, all unpaid principal and accrued and unpaid interest (including
Liquidated Damages, if any) on the Outstanding Securities shall become and be
immediately due and payable, without any declaration or other act on the part of
the Trustee or any Holder.
The Holders of a majority in aggregate principal amount of the
Outstanding Securities by written notice to the Trustee may rescind and annul an
acceleration and its consequences if:
(1) all existing Events of Default, other than the
nonpayment of principal of or interest on the Securities which have
become due solely because of the acceleration, have been remedied,
cured or waived, and
(2) the rescission would not conflict with any
judgment or decree of a court of competent jurisdiction;
33
provided, however, that in the event such declaration of acceleration has been
made based on the existence of an Event of Default under Section 4.1(d) hereof
and such Event of Default has been remedied, cured or waived in accordance with
Section 4.1(d) hereof, then, without any further action by the Holders, such
declaration of acceleration shall be rescinded automatically and the
consequences of such declaration shall be annulled. No such rescission or
annulment shall affect any subsequent Default or impair any right consequent
thereon.
SECTION 4.3 OTHER REMEDIES.
If an Event of Default with respect to Outstanding Securities occurs
and is continuing, the Trustee may pursue any available remedy by proceeding at
law or in equity to collect the payment of principal of or interest on the
Securities or to enforce the performance of any provision of the Securities.
The Trustee may maintain a proceeding in which it may prosecute and
enforce all rights of action and claims under this Indenture or the Securities,
even if it does not possess any of the Securities or does not produce any of
them in the proceeding.
SECTION 4.4 WAIVER OF PAST DEFAULTS.
The Holders, either (a) through the written consent of not less than a
majority in aggregate principal amount of the Outstanding Securities, or (b) by
the adoption of a resolution, at a meeting of Holders of the Outstanding
Securities at which a quorum is present, by the Holders of at least a majority
in aggregate principal amount of the Outstanding Securities represented at such
meeting, may, on behalf of the Holders of all of the Securities, waive an
existing Default or Event of Default, except a Default or Event of Default:
(1) in the payment of the principal of or premium, if
any, or interest (including Liquidated Damages, if any) on any Security
(provided, however, that subject to Section 4.7 hereof, the Holders of
a majority in aggregate principal amount of the Outstanding Securities
may rescind an acceleration and its consequences, including any related
payment default that resulted from such acceleration); or
(2) in respect of a covenant or provision hereof
which, under Section 7.2 hereof, cannot be modified or amended without
the consent of the Holders of each Outstanding Security affected.
Upon any such waiver, such Default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; provided, however, that no such waiver shall extend
to any subsequent or other Default or impair any right consequent thereon.
SECTION 4.5 CONTROL BY MAJORITY.
The Holders of a majority in aggregate principal amount of the
Outstanding Securities (or such lesser amount as shall have acted as a meeting
pursuant to the provisions of this Indenture)
34
shall have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or exercising any trust or
power conferred on the Trustee. However, the Trustee may refuse to follow any
direction that:
(1) conflicts with any law or with this Indenture;
(2) the Trustee determines may be unduly prejudicial
to the rights of the Holders not joining therein, or
(3) may expose the Trustee to personal liability.
The Trustee may take any other action deemed proper by the Trustee which is not
inconsistent with such direction.
SECTION 4.6 LIMITATION ON SUIT.
No Holder of any Security shall have any right to pursue any remedy with respect
to this indenture or the Securities (including, instituting any proceeding,
judicial or otherwise, with respect to this Indenture or for the appointment of
a receiver or trustee) unless:
(1) such Holder has previously given written notice
to the Trustee of an Event of Default that is continuing;
(2) the Holders of at least 25% in aggregate
principal amount of the Outstanding Securities shall have made written
request to the Trustee to pursue the remedy;
(3) such Holder or Holders have offered to the
Trustee indemnity satisfactory to it against any costs, expenses and
liabilities incurred in complying with such request;
(4) the Trustee has failed to comply with the request
for 60 days after its receipt of such notice, request and offer of
indemnity; and
(5) during such 60-day period, no direction
inconsistent with such written request has been given to the Trustee by
the Holders of a majority in aggregate principal amount of the
Outstanding Securities (or such amount as shall have acted at a meeting
pursuant to the provisions of this Indenture);
provided, however, that no one or more of such Holders may use this Indenture to
prejudice the rights of another Holder or to obtain preference or priority over
another Holder.
SECTION 4.7 UNCONDITIONAL RIGHTS OF HOLDERS TO RECEIVE PAYMENT AND TO
CONVERT.
Notwithstanding any other provision in this Indenture, the Holder of
any Security shall have the right, which is absolute and unconditional, to
receive payment of the principal of and premium, if any, and interest (including
Liquidated Damages, if any) on such Security on the
35
Stated Maturity expressed in such Security (or, in the case of redemption, on
the Redemption Date, or in the case of the exercise of a Repurchase Right, on
the Repurchase Date) and to convert such Security in accordance with Article 12,
and to bring for the enforcement of any such payment on or after such respective
dates and right to convert, and such rights shall not be impaired or affected
without the consent of such Holder.
SECTION 4.8 COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY THE
TRUSTEE.
The Company covenants that if:
(1) a Default or Event of Default is made in the
payment of any interest (including Liquidated Damages, if any) on any
Security when such interest (including Liquidated Damages, if any)
becomes due and payable and such Default or Event of Default continues
for a period of 30 days, or
(2) a Default or Event of Default is made in the
payment of the principal of or premium, if any, on any Security at the
Maturity thereof,
the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities, the whole amount then due and payable (as expressed
therein or as a result of any acceleration effected pursuant to Section 4.2
hereof) on such Securities for principal and premium, if any, and interest
(including Liquidated Damages, if any) and, to the extent that payment of such
interest shall be legally enforceable, interest on any overdue principal and
premium, if any, and on any overdue interest (including Liquidated Damages, if
any), calculated using the Interest Rate, and, in addition thereto, such further
amount as shall be sufficient to cover the costs and expenses of collection,
including the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel.
If the Company fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, may
prosecute such proceeding to judgment or final decree and may enforce the same
against the Company and collect the moneys adjudged or decreed to be payable in
the manner provided by law out of the property of the Company, wherever
situated.
If an Event of Default occurs and is continuing, the Trustee may in its
discretion proceed to protect and enforce its rights and the rights of the
Holders of Securities by such appropriate judicial proceedings as the Trustee
shall deem most effectual to protect and enforce any such rights, whether for
the specific enforcement of any covenant or agreement in this Indenture or in
aid of the exercise of any power granted herein, or to enforce any other proper
remedy.
SECTION 4.9 TRUSTEE MAY FILE PROOFS OF CLAIM.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or the property of the Company or
its creditors, the Trustee (irrespective of whether the principal of the
Securities shall then be due and payable as therein expressed or by declaration
or
36
otherwise and irrespective of whether the Trustee shall have made any demand on
the Company for the payment of overdue principal or interest (including
Liquidated Damages, if any)) shall be entitled and empowered, by intervention in
such proceeding or otherwise,
(1) to file and prove a claim for the whole amount of
principal and premium, if any, and interest (including Liquidated
Damages, if any) owing and unpaid in respect of the Securities and to
file such other papers or documents as may be necessary or advisable in
order to have the claims of the Trustee (including any claim for the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel) and of the Holders of Securities
allowed in such judicial proceeding, and
(2) to collect and receive any moneys or other
property payable or deliverable on any such claim and to distribute the
same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceedings is hereby authorized by
each Holder of Securities to make such payments to the Trustee and, in the event
that the Trustee shall consent to the making of such payments directly to the
Holders of Securities, to pay to the Trustee any amount due to it for the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel and any other amounts due the Trustee under Section 5.8.
Nothing contained herein shall be deemed to authorize the Trustee to
authorize or consent to or accept, or adopt on behalf of any Holder of a
Security, any plan of reorganization, arrangement, adjustment or composition
affecting the Securities or the rights of any Holder thereof or to authorize the
Trustee to vote in respect of the claim of any Holder of a Security in any such
proceeding.
SECTION 4.10 RESTORATION OF RIGHTS AND REMEDIES.
If the Trustee or any Holder of a Security has instituted any
proceeding to enforce any right or remedy under this Indenture and such
proceeding has been discontinued or abandoned for any reason, or has been
determined adversely to the Trustee or to such Holder, then and in every such
case, subject to any determination in such proceeding, the Company, the Trustee
and the Holders of Securities shall be restored severally and respectively to
their former positions hereunder and thereafter all rights and remedies of the
Trustee and the Holders shall continue as though no such proceeding had been
instituted.
SECTION 4.11 RIGHTS AND REMEDIES CUMULATIVE.
Except as otherwise provided with respect to the replacement or payment
of mutilated, destroyed, lost or stolen Securities in the last paragraph of
Section 2.12, no right or remedy conferred in this Indenture upon or reserved to
the Trustee or to the Holders of Securities is intended to be exclusive of any
other right or remedy, and every right and remedy shall, to the extent permitted
by law, be cumulative and in addition to every other right and remedy given
hereunder or hereafter existing at law or in equity or otherwise. The assertion
or employment of
37
any right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
SECTION 4.12 DELAY OR OMISSION NOT WAIVER.
No delay or omission of the Trustee or of any Holder of any Security to
exercise any right or remedy accruing upon any Event of Default shall impair any
such right or remedy or constitute a waiver of any such Event of Default or any
acquiescence therein. Every right and remedy given by this Article or by law to
the Trustee or to the Holders of Securities may be exercised from time to time,
and as often as may be deemed expedient, by the Trustee or by the Holders of
Securities, as the case may be.
SECTION 4.13 APPLICATION OF MONEY COLLECTED.
Subject to Article 13, any money collected by the Trustee pursuant to
this Article shall be applied in the following order, at the date or dates fixed
by the Trustee and, in case of the distribution of such money on account of
principal or premium, if any, or interest (including Liquidated Damages, if
any), upon presentation of the Securities and the notation thereon of the
payment if only partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee;
SECOND: To the payment of the amounts then due and unpaid for
principal of and premium, if any, and interest (including Liquidated
Damages, if any) on the Securities and coupons in respect of which or
for the benefit of which such money has been collected, ratably,
without preference or priority of any kind, according to the amounts
due and payable on such Securities for principal and premium, if any,
and interest (including Liquidated Damages, if any), respectively; and
THIRD: Any remaining amounts shall be repaid to the Company.
SECTION 4.14 UNDERTAKING FOR COSTS.
All parties to this Indenture agree, and each Holder of any Security by
such Holder's acceptance thereof shall be deemed to have agreed, that any court
may in its discretion require, in any suit for the enforcement of any right or
remedy under this Indenture, or in any suit against the Trustee for any action
taken, suffered or omitted by it as Trustee, the filing by any party litigant in
such suit of an undertaking to pay the costs of such suit, and that such court
may in its discretion assess reasonable costs, including reasonable attorneys'
fees, against any party litigant in such suit, having due regard to the merits
and good faith of the claims or defenses made by such party litigant; but the
provisions of this Section shall not apply to any suit instituted by the
Company, to any suit instituted by the Trustee, to any suit instituted by any
Holder, or group of Holders, holding in the aggregate more than 10% in aggregate
principal amount of the Outstanding Securities, or to any suit instituted by any
Holder of any Security for the enforcement of the payment of the principal of or
premium, if any, or interest (including Liquidated Damages, if any) on any
Security on or after the Stated Maturity expressed in such
38
Security (or, in the case of redemption or exercise of a Repurchase Right, on or
after the Redemption Date) or for the enforcement of the right to convert any
Security in accordance with Article 12.
SECTION 4.15 WAIVER OF STAY OR EXTENSION LAWS.
The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, or plead, or in any manner whatsoever claim
to take the benefit or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it will not 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.
39
ARTICLE 5
THE TRUSTEE
SECTION 5.1 CERTAIN DUTIES AND RESPONSIBILITIES.
(a) Except during the continuance of an Event of Default,
(1) The Trustee undertakes to perform such duties and
only such duties as are specifically set forth in this Indenture or the
TIA, and no implied covenants or obligations shall be read into this
Indenture against the Trustee; and
(2) In the absence of bad faith on its part, the
Trustee may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements of
this Indenture; provided, however, that in the case of any such
certificates or opinions which by any provision hereof are specifically
required to be furnished to the Trustee, the Trustee shall examine the
certificates or opinions to determine whether or not, on their face,
they conform to the requirements to this Indenture (but need not
investigate or confirm the accuracy of any facts stated therein).
(b) In case an Event of Default actually known to a Responsible Officer
of the Trustee 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 person would exercise or use
under the circumstances in the conduct of such person's own affairs.
(c) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct, except that:
(1) This paragraph (c) shall not be construed to limit
the effect of paragraph (a) of this Section 5.1;
(2) The Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer, unless it shall
be proved that the Trustee was negligent in ascertaining the pertinent
facts; and
(3) The Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in good faith in
accordance with a direction received by it of the Holders of a majority
in principal amount of the Outstanding Securities (or such lesser
amount as shall have acted at a meeting pursuant to the provisions of
this Indenture) relating to the time, method and place of conducting
any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred upon the Trustee, under this Indenture.
40
(d) Whether or not herein expressly so provided, every provision of
this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this
Section 5.1.
(e) No provision of this Indenture shall require the Trustee to expend
or risk its own funds or otherwise incur any liability in the performance of any
of its duties hereunder, or in the exercise of any of its rights or powers. 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, cost or
expense (including, without limitation, reasonable fees of counsel).
(f) The Trustee shall not be obligated to pay interest on any money or
other assets received by it unless otherwise agreed in writing with the Company.
Assets held in trust by the Trustee need not be segregated from other funds
except to the extent required by law.
(g) The Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, coupon, other evidence of indebtedness or other paper or document, but the
Trustee, in its discretion, may make such further inquiry or investigation into
such facts or matters as it may see fit, and, if the Trustee shall determine to
make such further inquiry or investigation, it shall be entitled to examine the
books, records and premises of the Company, personally or by agent or attorney
at the sole cost of the Company and shall incur no liability or additional
liability of any kind by reason of such inquiry or investigation.
(h) The Trustee shall not be deemed to have notice or actual knowledge
of any Event of Default or a Registration Default (as such term is defined in
the Registration Rights Agreement) or the obligation of the Company to pay
Liquidated Damages unless a Responsible Officer of the Trustee has actual
knowledge thereof or unless written notice of any event which is in fact a
Default is received by the Trustee pursuant to Section 14.2 hereof, and such
notice references the Securities and this Indenture.
(i) The rights, privileges, protections, immunities and benefits given
to the Trustee hereunder, including, without limitation, its right to be
indemnified, are extended to, and shall be enforceable by, the Trustee in each
of its capacities hereunder, and each Paying Agent, authenticating agent,
Conversion Agent or Registrar acting hereunder.
SECTION 5.2 CERTAIN RIGHTS OF TRUSTEE.
Subject to the provisions of Section 5.1 hereof and subject to Section
315(a) through (d) of the TIA:
(1) 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.
41
(2) 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 the Officers' Certificate or
Opinion of Counsel
(3) The Trustee may act through attorneys and agents
and shall not be responsible for the misconduct or negligence of any
attorney or agent appointed with due care.
(4) The Trustee shall not be liable for any action
taken or omitted to be taken by it in good faith which it believed to
be authorized or within the discretion or rights or powers conferred
upon it by this Indenture, unless the Trustee's conduct constitutes
negligence.
(5) The Trustee may consult with counsel of its
selection and the advice of such counsel as to matters of law shall be
full and complete authorization and protection in respect of any action
taken, omitted or suffered by it hereunder in good faith and in
accordance with the advice or opinion of such counsel.
(6) Unless otherwise specifically provided in this
Indenture, any demand, request, direction or notice from the Company
shall be sufficient if signed by an Officer of the Company.
(7) The permissive rights of the Trustee to do things
enumerated in this Indenture shall not be construed as a duty unless so
specified herein.
SECTION 5.3 INDIVIDUAL RIGHTS OF TRUSTEE.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Securities and may otherwise deal with the Company or any
Affiliate of the Company with the same rights it would have if it were not
Trustee. However, in the event that the Trustee acquires any conflicting
interest (as such term is defined in Section 310(b) of the TIA), it must
eliminate such conflict within 90 days, apply to the SEC for permission to
continue as trustee (to the extent permitted under Section 310(b) of the TIA) or
resign. Any agent may do the same with like rights and duties. The Trustee is
also subject to Sections 5.11 and 5.12 hereof.
SECTION 5.4 MONEY HELD IN TRUST.
Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall be
under no liability for interest on any money received by it hereunder except as
otherwise expressly agreed with the Company.
SECTION 5.5 TRUSTEE'S DISCLAIMER.
The recitals contained herein and in the Securities (except for those
in the certificate of authentication) shall be taken as the statements of the
Company, and the Trustee assumes no
42
responsibility for their correctness. The Trustee makes no representations as to
the validity, sufficiency or priority of this Indenture or of the Securities.
The Trustee shall not be accountable for the use or application by the Company
of Securities or the proceeds thereof.
SECTION 5.6 NOTICE OF DEFAULTS.
Within 90 days after the occurrence of any Default or Event of Default
hereunder of which the Trustee has received written notice, the Trustee shall
give notice to Holders pursuant to Section 14.2 hereof, unless such Default or
Event of Default shall have been cured or waived; provided, however, that,
except in the case of a Default or Event of Default in the payment of the
principal of or premium, if any, or interest (including Liquidated Damages, if
any), or in the payment of any redemption or repurchase obligation on any
Security, the Trustee shall be protected in withholding such notice if and so
long as Responsible Officers of the Trustee in good faith determine that the
withholding of such notice is in the interest of the Holders.
SECTION 5.7 REPORTS BY TRUSTEE TO HOLDERS.
The Trustee shall transmit to Holders such reports concerning the
Trustee and its actions under this Indenture as may be required by Section 313
of the TIA at the times and in the manner provided by the TIA.
A copy of each report at the time of its mailing to Holders shall be
filed with the SEC, if required, and each stock exchange, if any, on which the
Securities are listed. The Company shall promptly notify the Trustee when the
Securities become listed on any stock exchange.
SECTION 5.8 COMPENSATION AND INDEMNIFICATION.
The Company covenants and agrees to pay to the Trustee from time to
time, and the Trustee shall be entitled to, reasonable compensation (which shall
not be limited by any provision of law in regard to the compensation of a
trustee of an express trust) and the Company covenants and agrees to pay or
reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by or on behalf of it in accordance
with any of the provisions of this Indenture (including the reasonable
compensation and the expenses and disbursements of its counsel and of all agents
and other persons not regularly in its employ), except to the extent that any
such expense, disbursement or advance is due to its negligence or bad faith.
When the Trustee incurs expenses or renders services in connection with an Event
of Default specified in Section 4.1 hereof, the expenses (including the
reasonable charges and expenses of its counsel) and the compensation for the
services are intended to constitute expenses of administration under any
bankruptcy law. The Company also covenants to indemnify the Trustee and its
officers, directors, employees and agents for, and to hold such Persons harmless
against, any loss, liability or expense incurred by them, arising out of or in
connection with the acceptance or administration of this Indenture or the trusts
hereunder or the performance of their duties hereunder, including the costs and
expenses of defending themselves against or investigating any claim of liability
in the premises, except to the extent that any such loss, liability or expense
was due to the negligence or willful misconduct of such Persons. The obligations
of the Company under this Section 5.8 to compensate and indemnify the Trustee
and
43
its officers, directors, employees and agents and to pay or reimburse such
Persons for expenses, disbursements and advances shall constitute additional
indebtedness hereunder and shall survive the satisfaction and discharge of this
Indenture or the earlier resignation or removal of the Trustee. Such additional
indebtedness shall be a senior claim to that of the Securities upon all property
and funds held or collected by the Trustee as such, except funds held in trust
for the benefit of the Holders of particular Securities, and the Securities are
hereby subordinated to such senior claim. "Trustee" for purposes of this Section
5.8 shall include any predecessor Trustee, but the negligence or willful
misconduct of any Trustee shall not affect the indemnification of any other
Trustee.
SECTION 5.9 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 5.9.
The Trustee may resign and be discharged from the trust hereby created
by so notifying the Company in writing. The Holders of at least a majority in
aggregate principal amount of Outstanding Securities may remove the Trustee by
so notifying the Trustee and the Company in writing. The Company must remove the
Trustee if:
(i) the Trustee fails to comply with Section 5.10
hereof or Section 310 of the TIA;
(ii) the Trustee becomes incapable of acting.
(iii) 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; or
(iv) a Custodian or public officer takes charge of
the Trustee or its property.
If the Trustee resigns or is removed or if a vacancy exists in the
office of the Trustee for any reason, the Company shall promptly appoint a
successor Trustee. The Trustee shall be entitled to payment of its fees and
reimbursement of its expenses while acting as Trustee. Within one year after the
successor Trustee takes office, the Holders of at least a majority in aggregate
principal amount of Outstanding Securities may appoint a successor Trustee to
replace the successor Trustee appointed by the Company.
Any Holder may petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor Trustee if the Trustee
fails to comply with Section 5.10 hereof.
If an instrument of acceptance by a successor Trustee shall not have
been delivered to the Trustee within 30 days after the giving of such notice of
resignation or removal, the resigning or
44
removed Trustee, as the case may be, may petition, at the expense of the
Company, any court of competent jurisdiction for the appointment of a successor
Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The Company shall mail a notice of the successor Trustee's
succession to the Holders. The retiring Trustee shall promptly transfer all
property held by it as Trustee to the successor Trustee. Notwithstanding
replacement of the Trustee pursuant to this Section 5.9, the Company's
obligations under Section 5.8 hereof shall continue for the benefit of the
retiring Trustee with respect to expenses, losses and liabilities incurred by it
prior to such replacement.
SECTION 5.10 SUCCESSOR TRUSTEE BY MERGER, ETC.
Subject to Section 5.11 hereof, if the Trustee consolidates with,
merges or converts into, or transfers or sells all or substantially all of its
corporate trust business to, another corporation or national banking
association, the successor entity without any further act shall be the successor
Trustee as to the Securities.
SECTION 5.11 CORPORATE TRUSTEE REQUIRED; ELIGIBILITY.
The Trustee shall at all times satisfy the requirements of Section
310(a)(1), (2) and (5) of the TIA. The Trustee shall at all times have (or, in
the case of a corporation included in a bank holding company system, the related
bank holding company shall at all times have), a combined capital and surplus of
at least $100 million as set forth in its (or its related bank holding
company's) most recent published annual report of condition. The Trustee is
subject to Section 310(b) of the TIA.
SECTION 5.12 COLLECTION OF CLAIMS AGAINST THE COMPANY.
The Trustee is subject to Section 311(a) of the TIA, excluding any
creditor relationship listed in Section 311(b) of the TIA. A Trustee who has
resigned or been removed shall be subject to Section 311(a) of the TIA to the
extent indicated therein.
45
ARTICLE 6
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 6.1 COMPANY MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS.
The Company shall not consolidate with or merge into any other Person
or convey, transfer or lease its properties and assets substantially as an
entirety to any Person, and the Company shall not permit any Person to
consolidate with or merge into the Company or convey, transfer or lease its
properties and assets substantially as an entirety to the Company, unless:
(1) in the event that the Company shall consolidate
with or merge into another Person or convey, transfer or lease its
properties and assets substantially as an entirety to any Person, the
Person formed by such consolidation or into which the Company is merged
or the Person which acquires by conveyance or transfer, or which
leases, the properties and assets of the Company substantially as an
entirety shall be a corporation, limited liability company, partnership
or trust organized and validly existing under the laws of the United
States of America, any State thereof or the District of Columbia and,
if the entity surviving such transaction or transferee entity is not
the Company, then such surviving or transferee entity shall expressly
assume, by an indenture supplemental hereto, executed and delivered to
the Trustee, in form satisfactory to the Trustee, the due and punctual
payment of the principal of and premium, if any and interest (including
Liquidated Damages, if any), on all the Securities and the performance
of every covenant of this Indenture on the party of the Company to be
performed or observed and shall have provided for conversion rights in
accordance with Section 12.11 hereof;
(2) at the time of consummation of such transaction,
no Event of Default, and no event which, after notice or lapse of time
or both, would become an Event of Default, shall have happened and be
continuing; and
(3) the Company shall have delivered to the Trustee
an Officers' Certificate and an Opinion of Counsel, each stating that
such consolidation, merger, conveyance, transfer or lease and, if a
supplemental indenture is required in connection with such transaction,
such supplemental indenture comply with this Article and that all
conditions precedent herein provided for relating to such transaction
have been complied with.
SECTION 6.2 SUCCESSOR CORPORATION SUBSTITUTED.
Upon any consolidation or merger by the Company with or into any other
corporation or any conveyance, transfer or lease of the properties and assets of
the Company substantially as an entirety to any Person, in accordance with
Section 6.1 hereof, 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 this Indenture with the same effect as if such
successor
46
corporation had been named as the Company herein, and thereafter, except in the
case of a lease to another Person, the predecessor corporation shall be relieved
of all obligations and covenants under this Indenture and the Securities.
47
ARTICLE 7
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 7.1 WITHOUT CONSENT OF HOLDERS OF SECURITIES.
Without the consent of any Holders of Securities, the Company, when
authorized by a Board Resolution, and the Trustee, at any time and from time to
time, may amend this Indenture and the Securities to:
(a) add to the covenants of the Company for the benefit of the Holders
of Securities;
(b) surrender any right or power herein conferred upon the Company;
(c) make provision with respect to the conversion rights of Holders of
Securities pursuant to Section 12.11 hereof;
(d) provide for the assumption of the Company's obligations to the
Holders of Securities in the case of a merger, consolidation, conveyance,
transfer or lease pursuant to Article 6 hereof;
(e) reduce the Conversion Price; provided, that such reduction in the
Conversion Price shall not adversely affect the interest of the Holders of
Securities (after taking into account tax and other consequences of such
reduction) in any material respect;
(f) comply with the requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the TIA;
(g) make any changes or modifications to this Indenture necessary in
connection with the registration of any Securities under the Securities Act as
contemplated in the Registration Rights Agreement, provided, that such action
pursuant to this clause (g) does not adversely affect the interests of the
Holders of Securities in any material respect;
(h) cure any ambiguity, to correct or supplement any provision herein
which may be inconsistent with any other provision herein or which is otherwise
defective, or to make any other provisions with respect to matters or questions
arising under this Indenture which the Company and the Trustee may deem
necessary or desirable and which shall not be inconsistent with the provisions
of this Indenture, provided, that such action pursuant to this clause (h) does
not adversely affect the interests of the Holders of Securities in any material
respect;
(i) add or modify any other provisions with respect to matters or
questions arising under this Indenture which the Company and the Trustee may
deem necessary or desirable and which shall not be inconsistent with the
provisions of this Indenture, provided, that such action pursuant to this clause
(i) does not adversely affect the interests of the Holders of Securities in any
material respect; or
48
(j) make provision for the establishment of a book-entry system, in
which Holders would have the option to participate, for the clearance and
settlement of transactions in Securities originally issued in definitive form.
SECTION 7.2 WITH CONSENT OF HOLDERS OF SECURITIES.
Except as provided below in this Section 7.2, this Indenture or the
Securities may be amended or supplemented, and noncompliance in any particular
instance with any provision of this Indenture or the Securities may be waived,
in each case (i) with the written consent of the Holders of at least a majority
in aggregate principal amount of the Outstanding Securities or (ii) by the
adoption of a resolution, at a meeting of Holders of the Outstanding Securities
at which a quorum is present, by the Holders of a majority in aggregate
principal amount of the Outstanding Securities represented at such meeting.
Without the written consent or the affirmative vote of each Holder of
Securities, an amendment or waiver under this Section 7.2 may not:
(a) change the Stated Maturity of the principal of, or any installment
of interest (including Liquidated Damages, if any) on, any Security;
(b) reduce the principal amount of, or premium, if any, on any
Security;
(c) reduce the Interest Rate or interest (including Liquidated Damages,
if any) on any Security;
(d) change the currency of payment of principal of, premium, if any, or
interest (including Liquidated Damages, if any) on any Security;
(e) impair the right of any Holder to institute suit for the
enforcement of any payment in or with respect to any Security;
(f) modify the obligation of the Company to maintain an office or
agency in The City of New York pursuant to Section 9.2 hereof;
(g) except as permitted by Section 12.11 hereof, adversely affect the
Repurchase Right or the right to convert any Security as provided in Article 12
hereof;
(h) modify the subordination provisions of the Securities in a manner
adverse to the Holders of Securities,
(i) modify any of the provisions of this Section, Section 4.4 or
Section 14.11, except to increase any percentage contained herein or therein or
to provide that certain other provisions of this Indenture cannot be modified or
waived without the consent of the Holder of each Outstanding Security affected
thereby; or
(j) reduce the requirements of Section 8.4 hereof for quorum or voting,
or reduce the percentage in aggregate principal amount of the Outstanding
Securities the consent of whose
49
Holders is required for any such supplemental indenture or the consent of whose
Holders is required for any waiver provided for in this Indenture.
It shall not be necessary for any Act of Holders of Securities under
this Section to approve the particular form of any proposal supplemental
indenture, but it shall be sufficient if such Act shall approve the substance
thereof.
SECTION 7.3 COMPLIANCE WITH TRUST INDENTURE ACT.
Every amendment to this Indenture or the Securities shall be set forth
in a supplemental indenture that complies with the TIA as then in effect.
SECTION 7.4 REVOCATION OF CONSENTS AND EFFECT OF CONSENTS OR VOTES.
Until an amendment, supplement or waiver becomes effective, a written
consent to it by a Holder is a continuing consent by the Holder and every
subsequent Holder of a Security or portion of a Security that evidences the same
debt as the consenting Holder's Security, even if notation of the consent is not
made on any Security; provided, however, that unless a record date shall have
been established, any such Holder or subsequent Holder may revoke the consent as
to its Security or portion of a Security if the Trustee receives written notice
of revocation before the date the amendment, supplement or waiver becomes
effective.
An amendment, supplement or waiver becomes effective on receipt by the
Trustee of written consents from or affirmative votes by, as the case may be,
the Holders of the requisite percentage of aggregate principal amount of the
Outstanding Securities, and thereafter shall bind every Holder of Securities;
provided, however, if the amendment, supplement or waiver makes a change
described in any of the clauses (a) through (j) of Section 7.2 hereof, the
amendment, supplement or waiver shall bind only each Holder of a Security which
has consented to it or voted for it, as the case may be, and every subsequent
Holder of a Security or portion of a Security that evidences the same
indebtedness as the Security of the consenting or affirmatively voting, as the
case may be, Holder.
SECTION 7.5 NOTATION ON OR EXCHANGE OF SECURITIES.
If an amendment, supplement or waiver changes the terms of a Security:
(a) the Trustee may require the Holder of a Security to deliver such
Securities to the Trustee, the Trustee may place an appropriate notation on the
Security about the changed terms and return it to the Holder and the Trustee may
place an appropriate notation on any Security thereafter authenticated; or
(b) if the Company or the Trustee so determines, the Company in
exchange for the Security shall issue and the Trustee shall authenticate a new
Security that reflects the changed terms.
50
Failure to make the appropriate notation or issue a new Security shall
not affect the validity and effect of such amendment, supplement or waiver.
SECTION 7.6 TRUSTEE TO SIGN AMENDMENT, ETC.
The Trustee shall sign any amendment authorized pursuant to this
Article 7 if the amendment does not adversely affect the rights, duties,
liabilities or immunities of the Trustee. If the amendment does adversely affect
the rights, duties, liabilities or immunities of the Trustee, the Trustee may
but need not sign it. In signing or refusing to sign such amendment, the Trustee
shall be entitled to receive and shall be fully protected in relying upon an
Officers' Certificate and an Opinion of Counsel as conclusive evidence that such
amendment is authorized or permitted by this Indenture.
51
ARTICLE 8
MEETING OF HOLDERS OF SECURITIES
SECTION 8.1 PURPOSES FOR WHICH MEETINGS MAY BE CALLED.
A meeting of Holders of Securities may be called at any time and from
time to time pursuant to this Article to make, give or take any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be made, given or taken by Holders of Securities.
SECTION 8.2 CALL NOTICE AND PLACE OF MEETINGS.
(a) The Trustee may at any time call a meeting of Holders of Securities
for any purpose specified in Section 8.1 hereof, to be held at such time and at
such place in The City of New York. Notice of every meeting of Holders of
Securities, setting forth the time and the place of such meeting and in general
terms the action proposed to be taken at such meeting, shall be given, in the
manner provided in Section 14.2 hereof, not less than 21 nor more than 180 days
prior to the date fixed for the meeting.
(b) In case at any time the Company, pursuant to a Board Resolution, or
the Holders of at least 10% in principal amount of the Outstanding Securities
shall have requested the Trustee to call a meeting of the Holders of Securities
for any purpose specified in Section 8.1 hereof, by written request setting
forth in reasonable detail the action proposed to be taken at the meeting, and
the Trustee shall not have made the first publication of the notice of such
meeting within 21 days after receipt of such request or shall not thereafter
proceed to cause the meeting to be held as provided herein, then the Company or
the Holders of Securities in the amount specified, as the case may be, may
determine the time and the place in The City of New York for such meeting and
may call such meeting for such purposes by giving notice thereof as provided in
paragraph (a) of this Section.
SECTION 8.3 PERSONS ENTITLED TO VOTE AT MEETINGS.
To be entitled to vote at any meeting of Holders of Securities, a
Person shall be (a) a Holder of one or more Outstanding Securities, or (b) a
Person appointed by an instrument in writing as proxy for a Holder or Holders of
one or more Outstanding Securities by such Holder or Holders. The only Persons
who shall be entitled to be present or to speak at any meeting of Holders shall
be the Persons entitled to vote at such meeting and their counsel, any
representatives of the Trustee and its counsel and any representatives of the
Company and its counsel.
SECTION 8.4 QUORUM; ACTION.
The Persons entitled to vote a majority in principal amount of the
Outstanding Securities shall constitute a quorum. In the absence of a quorum
within 30 minutes of the time appointed for any such meeting, the meeting shall,
if convened at the request of Holders of Securities, be
52
dissolved. In any other case, the meeting may be adjourned for a period of not
less than 10 days as determined by the chairman of the meeting prior to the
adjournment of such meeting. In the absence of a quorum at any such adjourned
meeting, such adjourned meeting may be further adjourned for a period of not
less than 10 days as determined by the chairman of the meeting prior to the
adjournment of such adjourned meeting. Notice of the reconvening of any
adjourned meeting shall be given as provided in Section 8.2(a) hereof, except
that such notice need be given only once and not less than five days prior to
the date on which the meeting is scheduled to be reconvened. Notice of the
reconvening of an adjourned meeting shall state expressly the percentage of the
principal amount of the Outstanding Securities which shall constitute a quorum.
Subject to the foregoing, at the reconvening of any meeting adjourned
for a lack of a quorum, the Persons entitled to vote 25% in principal amount of
the Outstanding Securities at the time shall constitute a quorum for the taking
of any action set forth in the notice of the original meeting.
At a meeting or an adjourned meeting duly reconvened and at which a
quorum is present as aforesaid, any resolution and all matters (except as
limited by the proviso to Section 7.2 hereof) shall be effectively passed and
decided if passed or decided by the Persons entitled to vote not less than a
majority in principal amount of Outstanding Securities represented and voting at
such meeting.
Any resolution passed or decisions taken at any meeting of Holders of
Securities duly held in accordance with this Section shall be binding on all the
Holders of Securities, whether or not present or represented at the meeting.
SECTION 8.5 DETERMINATION OF VOTING RIGHTS; CONDUCT AND ADJOURNMENT OF
MEETINGS.
(a) Notwithstanding any other provisions of this Indenture, the Trustee
may make such reasonable regulations as it may deem advisable for any meeting of
Holders of Securities in regard to proof of the holding of Securities and of the
appointment of proxies and in regard to the appointment and duties of inspectors
of votes, the submission and examination of proxies, certificates and other
evidence of the right to vote, and such other matters concerning the conduct of
the meeting as it shall deem appropriate. Except as otherwise permitted or
required by any such regulations, the holding of Securities shall be proved in
the manner specified in Section 1.3 hereof and the appointment of any proxy
shall be proved in the manner specified in Section 1.3 hereof. Such regulations
may provide that written instruments appointing proxies, regular on their face,
may be presumed valid and genuine without the proof specified in Section 1.3
hereof or other proof.
(b) The Trustee shall, by an instrument in writing, appoint a temporary
chairman (which may be the Trustee) of the meeting, unless the meeting shall
have been called by the Company or by Holders of Securities as provided in
Section 8.2(b) hereof, in which case the Company or the Holders of Securities
calling the meeting, as the case may be, shall in like manner appoint a
temporary chairman. A permanent chairman and a permanent secretary of the
53
meeting shall be elected by vote of the Persons entitled to vote a majority in
principal amount of the Outstanding Securities represented at the meeting.
(c) At any meeting each Holder of a Security or proxy shall be entitled
to one vote for each $1,000 principal amount of Securities held or represented
by him; provided, however, that no vote shall be cast or counted at any meeting
in respect of any Security challenged as not Outstanding and ruled by the
chairman of the meeting to be not Outstanding. The chairman of the meeting shall
have no right to vote, except as a Holder of a Security or proxy.
(d) Any meeting of Holders of Securities duly called pursuant to
Section 8.2 hereof at which a quorum is present may be adjourned from time to
time by Persons entitled to vote a majority in principal amount of the
Outstanding Securities represented at the meeting, and the meeting may be held
as so adjourned without further notice.
SECTION 8.6 COUNTING VOTES AND RECORDING ACTION OF MEETINGS.
The vote upon any resolution submitted to any meeting of Holders of
Securities shall be by written ballots on which shall be subscribed the
signatures of the Holders of Securities or of their representatives by proxy and
the principal amounts and serial numbers of the Outstanding Securities held or
represented by them. The permanent chairman of the meeting shall appoint two
inspectors of votes who shall count all votes cast at the meeting for or against
any resolution and who shall make and file with the secretary of the meeting
their verified written reports in duplicate of all votes cast at the meeting. A
record, at least in duplicate, of the proceedings of each meeting of Holders of
Securities shall be prepared by the secretary of the meeting and there shall be
attached to said record the original reports of the inspectors of votes on any
vote by ballot taken thereat and affidavits by one or more Persons having
knowledge of the facts setting forth a copy of the notice of the meeting and
showing that said notice was given as provided in Section 8.2 hereof and, if
applicable, Section 8.4 hereof. Each copy shall be signed and verified by the
affidavits of the permanent chairman and secretary of the meeting and one such
copy shall be delivered to the Company and another to the Trustee to be
preserved by the Trustee, the latter to have attached thereto the ballots voted
at the meeting. Any record so signed and verified shall be conclusive evidence
of the matters therein stated.
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ARTICLE 9
COVENANTS
SECTION 9.1 PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST.
The Company will duly and punctually pay the principal of and premium,
if any, and interest (including Liquidated Damages, if any) in respect of the
Securities in accordance with the terms of the Securities and this Indenture.
The Company will deposit or cause to be deposited with the Trustee as directed
by the Trustee, no later than the day of the Stated Maturity of any Security or
installment of interest (including Liquidated Damages, if any), all payments so
due.
SECTION 9.2 MAINTENANCE OF OFFICES OR AGENCIES.
The Company hereby appoints the Trustee's Corporate Trust Office as its
office in The City of New York, where Securities may be:
(i) presented or surrendered for payment;
(ii) surrendered for registration of transfer or
exchange;
(iii) surrendered for conversion;
and where notices and demands to or upon the Company in respect of the
Securities and this Indenture maybe served.
The Company may at any time and from time to time vary or terminate the
appointment of any such office or appoint any additional offices for any or all
of such purposes; provided, however, that until all of the Securities have been
delivered to the Trustee for cancellation, or moneys sufficient to pay the
principal of and premium, if any, and interest (including Liquidated Damages, if
any) on the Securities have been made available for payment and either paid or
returned to the Company pursuant to the provisions of Section 9.3 hereof, the
Company will maintain in The City of New York, an office or agency where
Securities may be presented or surrendered for payment, where Securities may be
surrendered for registration of transfer or exchange, where Securities may be
surrendered for conversion and where notices and demands to or upon the Company
in respect of the Securities and this Indenture may be served. The Company will
give prompt written notice to the Trustee, and notice to the Holders in
accordance with Section 14.2 hereof, of the appointment or termination of any
such agents and of the location and any change in the location of any such
office or agency.
If at any time the Company shall fail to maintain any such required
office or agency in The City of New York, or shall fail to furnish the Trustee
with the address thereof, presentations and surrenders may be made at, and
notices and demands may be served on, the Corporate Trust Office of the Trustee.
55
SECTION 9.3 CORPORATE EXISTENCE.
Subject to Article 6 hereof, the Company will do or cause to be done
all things necessary to preserve and keep in full force and effect its corporate
existence, rights (charter and statutory) and franchises; provided, however,
that the Company shall not be required to preserve any such right or franchise
if the Company determines that the preservation thereof is no longer desirable
in the conduct of the business of the Company and that the loss thereof is not
disadvantageous in any material respect to the Holders.
SECTION 9.4 MAINTENANCE OF PROPERTIES.
The Company will maintain and keep its properties and every part
thereof in such repair, working order and condition, and make or cause to be
made all such needful and proper repairs, renewals and replacements thereto, as
in the judgment of the Company are necessary in the interests of the Company;
provided, however, that nothing contained in this Section shall prevent the
Company from selling, abandoning or otherwise disposing of any of its properties
or discontinuing a part of its business from time to time if, in the judgment of
the Company, such sale, abandonment, disposition or discontinuance is advisable
and does not materially adversely affect the interests or business of the
Company.
SECTION 9.5 PAYMENT OF TAXES AND OTHER CLAIMS.
The Company will, and will cause any Significant Subsidiary to,
promptly pay and discharge or cause to be paid and discharged all material
taxes, assessments and governmental charges or levies lawfully imposed upon it
or upon its income or profits or upon any of its property, real or personal, or
upon any part thereof, as well as all material claims for labor, materials and
supplies which, if unpaid, might by law become a lien or charge upon its
property; provided, however, that neither the Company nor any Significant
Subsidiary shall be required to pay or discharge or cause to be paid or
discharged any such tax, assessment, charge, levy, or claim if the amount,
applicability or validity thereof shall currently be contested in good faith by
appropriate proceedings and if the Company or such Significant Subsidiary, as
the case may be, shall have set aside on its books reserves deemed by it
adequate with respect thereto.
SECTION 9.6 REPORTS.
(a) The Company shall deliver to the Trustee within 15 days after it
files them with the SEC copies of the annual reports and of the information,
documents, and other reports (or copies of such portions of any of the foregoing
as the SEC may by rules and regulations prescribe) which the Company is required
to file with the SEC pursuant to Section 13 or 15(d) of the Exchange Act;
provided, however, the Company shall not be required to deliver to the Trustee
any materials for which the Company has sought and received confidential
treatment by the SEC. The Company also shall comply with the other provisions of
Section 314(a) of the TIA.
(b) If at any time the Company is not subject to Section 13 or 15(d) of
the Exchange Act, upon the request of a Holder of a Security, the Company will
promptly furnish or cause to
56
be furnished to such Holder or to a prospective purchaser of such Security
designated by such Holder, as the case may be, the information, if any, required
to be delivered by it pursuant to Rule 144A(d)(4) under the Securities Act to
permit compliance with Rule 144A in connection with the resale of such Security;
provided, however, that the Company shall not be required to furnish such
information in connection with any request made on or after the date which is
two years from the later of the date such security was last acquired from the
Company or an "affiliate" of the Company.
SECTION 9.7 COMPLIANCE CERTIFICATE.
The Company shall deliver to the Trustee, within 120 days after the end
of each fiscal year of the Company, an Officers' Certificate stating that in the
course of the performance by the signers of their duties as Officers of the
Company, they would normally have knowledge of any failure by the Company to
comply with all conditions, or Default by the Company with respect to any
covenants, under this Indenture, and further stating whether or not they have
knowledge of any such failure or default and, if so, specifying each such
failure or Default and the nature thereof. In the event an Officer of the
Company comes to have actual knowledge of a Default, regardless of the date, the
Company shall deliver an Officers' Certificate to the Trustee specifying such
Default and the nature and status thereof.
SECTION 9.8 RESALE OF CERTAIN SECURITIES.
During the period of two years after the last date of original issuance
of any Securities, the Company shall not, and shall not permit any of its
"affiliates" (as defined under Rule 144 under the Securities Act) to, resell any
Securities, or shares of Common Stock issuable upon conversion of the
Securities, which constitute "restricted securities" under Rule 144, that are
acquired by any of them within the United States or to "U.S. persons" (as
defined in Regulation S) except pursuant to an effective registration statement
under the Securities Act or an applicable exemption therefrom. The Trustee shall
have no responsibility or liability in respect of the Company's performance of
its agreement in the preceding sentence.
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ARTICLE 10
REDEMPTION OF SECURITIES
SECTION 10.1 PROVISIONAL REDEMPTION.
Any time prior to February 8, 2003, the Company may, at its option,
redeem the Securities in whole or in part on any date from time to time, upon
notice as set forth in Section 10.5, at a redemption price equal to $1,000 per
$1,000 principal amount of the Securities redeemed plus accrued and unpaid
interest, if any (such amount, together with the Make-Whole Payment described
below, the "Provisional Redemption Price"), to but excluding the date of
redemption (the "Provisional Redemption Date") if (i) the Closing Price of the
Common Stock has exceeded 150% of the Conversion Price (as defined in Article 12
and as such may be adjusted from time to time) then in effect for at least 20
Trading Days in any consecutive 30-Trading Day period ending on the Trading Day
prior to the date of mailing of the provisional notice of redemption pursuant to
Section 10.5 (the "Notice Date"), and (ii) a registration statement covering
resales of the Securities and the Common Stock issuable upon conversion thereof
is effective and available for use and is expected to remain effective for the
30 days following the Provisional Redemption Date.
Upon any such Provisional Redemption, the Company shall make an
additional payment in cash (the "Make-Whole Payment") with respect to the
Securities called for redemption to holders on the Notice Date in an amount
equal to $137.93 per $1,000 principal amount of the Securities, less the amount
of any interest actually paid on such Securities prior to the Notice Date. The
Company shall make the Make-Whole Payment on all Securities called for
Provisional Redemption, including those Securities converted into Common Stock
between the Notice Date and the Provisional Redemption Date.
SECTION 10.2 OPTIONAL REDEMPTION.
Except as set forth under Section 10.1, the Securities are not
redeemable prior to February 8, 2003. On or after February 8 , 2003, the Company
may, at its option, redeem the Securities in whole at any time or in part from
time to time, on any date prior to maturity, upon notice as set forth in Section
10.5, at the redemption price (expressed as percentages of the principal amount)
set forth below if redeemed during the 12-month period beginning February 8 of
the years indicated and ending February 7 of the following year:
Redemption Price
----------------
2003................................................. 102.90%
2004................................................. 102.10%
2005................................................. 101.40%
2006................................................. 100.70%
58
("the Optional Redemption Price"), plus any interest accrued but not paid prior
to the Optional Redemption Date.
SECTION 10.3 NOTICE TO TRUSTEE.
If the Company elects to redeem Securities pursuant to the redemption
provisions of Section 10.1 or Section 10.2 hereof, it shall notify the Trustee
at least 30 days prior to the Redemption Date of such intended Redemption Date,
the principal amount of Securities to be redeemed and the CUSIP numbers of the
Securities to be redeemed.
SECTION 10.4 SELECTION OF SECURITIES TO BE REDEEMED.
If fewer than all the Securities are to be redeemed, the Trustee shall
select the particular Securities to be redeemed from the Outstanding Securities
by a method that complies with the requirements of any exchange on which the
Securities are listed, or, if the Securities are not listed on an exchange, on a
pro rata basis or by lot or in accordance with any other method the Trustee
considers fair and appropriate. Securities and portions thereof that the Trustee
selects shall be in amounts equal to the minimum authorized denominations for
Securities to be redeemed or any integral multiple thereof.
If any Security selected for partial redemption is converted in part
before termination of the conversion right with respect to the portion of the
Security so selected, the converted portion of such Security shall be deemed to
be the portion selected for redemption (provided, however, that the Holder of
such Security so converted and deemed redeemed shall not be entitled to any
additional interest payment as a result of such deemed redemption than such
Holder would have otherwise been entitled to receive upon conversion of such
Security). Securities which have been converted during a selection of Securities
to be redeemed may be treated by the Trustee as Outstanding for the purpose of
such selection.
The Trustee shall promptly notify the Company and the Registrar in
writing of the Securities selected for redemption and, in the case of any
Securities selected for partial redemption, the principal amount thereof to be
redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall relate,
in the case of any Securities redeemed or to be redeemed only in part, to the
portion of the principal amount of such Securities which has been or is to be
redeemed.
SECTION 10.5 NOTICE OF REDEMPTION.
Notice of redemption shall be given in the manner provided in Section
14.2 hereof to the Holders of Securities to be redeemed. Such notice shall be
given not less than 20 nor more than 60 days prior to the Redemption Date.
All notices of redemption shall state:
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(1) the Redemption Date;
(2) the Redemption Price and interest accrued and
unpaid to the Redemption Date, if any;
(3) if fewer than all the Outstanding Securities are
to be redeemed, the aggregate principal amount of Securities to be
redeemed and the aggregate principal amount of Securities which will be
outstanding after such partial redemption;
(4) that on the Redemption Date the Redemption Price
and interest accrued and unpaid to the Redemption Date, if any, will
become due and payable upon each such Security to be redeemed, and that
interest thereon shall cease to accrue on and after such date;
(5) the Conversion Price, the date on which the right
to convert the principal of the Securities to be redeemed will terminate
and the places where such Securities may be surrendered for conversion;
(6) the place or places where such Securities are to
be surrendered for payment of the Redemption Price and accrued and
unpaid interest, if any; and
(7) the CUSIP number of the Securities.
The notice given shall specify the last date on which exchanges or
transfers of Securities may be made pursuant to Section 2.7 hereof, and shall
specify the serial numbers of Securities and the portions thereof called for
redemption.
Notice of redemption of Securities to be redeemed at the election of
the Company shall be given by the Company or, at the Company's request, by the
Trustee in the name of and at the expense of the Company.
SECTION 10.6 EFFECT OF NOTICE OF REDEMPTION.
Notice of redemption having been given as provided in Section 10.5
hereof, the Securities so to be redeemed shall, on the Redemption Date, become
due and payable at the Redemption Price therein specified and from and after
such date (unless the Company shall default in the payment of the Redemption
Price and accrued and unpaid interest) such Securities shall cease to bear
interest. Upon surrender of any such Security for redemption in accordance with
such notice, such Security shall be paid by the Company at the Redemption Price;
provided, however, the installments of interest on Securities whose Stated
Maturity is prior to or on the Redemption Date shall be payable to the Holders
of such Securities, or one or more Predecessor Securities, registered as such on
the relevant Record Date according to their terms and the provisions of Section
2.7 hereof.
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If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal and premium, if any, shall,
until paid, bear interest from the Redemption Date at the Interest Rate.
SECTION 10.7 DEPOSIT OF REDEMPTION PRICE.
Prior to or on any Redemption Date, the Company shall deposit with the
Trustee or with a Paying Agent an amount of money sufficient to pay the
Redemption Price of all the Securities to be redeemed on that Redemption Date,
other than any Securities called for redemption on that date which have been
converted prior to the date of such deposit, and accrued and unpaid interest, if
any, on such Securities.
If any Security called for redemption is converted, any money deposited
with the Trustee or with a Paying Agent or so segregated and held in trust for
the redemption of such Security shall (subject to any right of the Holder of
such Security or any Predecessor Security to receive interest as provided in the
fourth to last paragraph of Section 2.1 hereof) be paid to the Company on
Company Request or, if then held by the Company, shall be discharged from such
trust.
SECTION 10.8 SECURITIES REDEEMED IN PART.
Any Security which is to be redeemed only in part shall be surrendered
at an office or agency of the Company designated for that purpose pursuant to
Section 9.2 hereof (with, if the Company or the Trustee so requires, due
endorsement by, or a written instrument of transfer in form satisfactory to the
Company and the Trustee duly executed by, the Holder thereof or the Holder's
attorney duly authorized in writing), and the Company shall execute, and the
Trustee shall authenticate and deliver to the Holder of such Security without
service charge, a new Security or Securities of any authorized denomination as
requested by such Holder in aggregate principal amount equal to and in exchange
for the unredeemed portion of the principal of the Security so surrendered.
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ARTICLE 11
REPURCHASE AT THE OPTION OF A HOLDER
UPON A CHANGE OF CONTROL
SECTION 11.1 REPURCHASE RIGHT.
In the event that a Change in Control shall occur, each Holder shall
have the right (the "Repurchase Right"), at the Holder's option, but subject to
the provisions of Section 11.2 hereof, to require the Company to repurchase, and
upon the exercise of such right the Company shall repurchase, all of such
Holder's Securities not theretofore called for redemption, or any portion of the
principal amount thereof that is equal to $1,000 or any integral multiple
thereof (provided that no single Security may be repurchased in part unless the
portion of the principal amount of such Security to be Outstanding after such
repurchase is equal to $1,000 or integral multiples thereof), on the date (the
"Repurchase Date") that is 45 days after the date of the Company Notice at a
purchase price equal to 100% of the principal amount of the Securities to be
repurchased (the "Repurchase Price"), plus interest accrued and unpaid to, but
excluding, the Repurchase Date; provided, however, that installments of interest
on Securities whose Stated Maturity is prior to or on the Repurchase Date shall
be payable to the Holders of such Securities, or one or more Predecessor
Securities, registered as such on the relevant Record Date according to their
terms and the provisions of Section 2.1 hereof.
Subject to the fulfillment by the Company of the conditions set forth
in Section 11.2 hereof, the Company may elect to pay the Repurchase Price by
delivering the number of shares of Common Stock equal to (i) the Repurchase
Price divided by (ii) 95% of the average of the Closing Prices per share of
Common Stock for the five consecutive Trading Days immediately preceding and
including the third Trading Day prior to the Repurchase Date.
Whenever in this Indenture (including Sections 2.2, 4.1(a) and 4.7
hereof) or Exhibit A annexed hereto there is a reference, in any context, to the
principal of any Security as of any time, such reference shall be deemed to
include reference to the Repurchase Price payable in respect to such Security to
the extent that such Repurchase Price is, was or would be so payable at such
time, and express mention of the Repurchase Price in any provision of this
Indenture shall not be construed as excluding the Repurchase Price in those
provisions of this Indenture when such express mention is not made; provided,
however, that, for the purposes of Article 13 hereof, such reference shall be
deemed to include reference to the Repurchase Price only to the extent the
Repurchase Price is payable in cash.
SECTION 11.2 CONDITIONS TO THE COMPANY'S ELECTION TO PAY THE REPURCHASE
PRICE IN COMMON STOCK.
(a) The shares of Common Stock to be issued upon repurchase of
Securities hereunder:
(i) shall not require registration under any federal
securities law before such shares may be freely transferable without
being subject to any transfer restrictions under
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the Securities Act upon repurchase or, if such registration is
required, such registration shall be completed and shall become
effective prior to the Repurchase Date; and
(ii) shall not require registration with, or approval of,
any governmental authority under any state law or any other federal law
before shares may be validly issued or delivered upon repurchase or if
such registration is required or such approval must be obtained, such
registration shall be completed or such approval shall be obtained
prior to the Repurchase Date.
(b) The shares of Common Stock to be listed upon repurchase of
Securities hereunder are, or shall have been, approved for listing on the Nasdaq
National Market or the New York Stock Exchange or listed on another national
securities exchange, in any case, prior to the Repurchase Date.
(c) All shares of Common Stock which may be issued upon repurchase of
Securities will be issued out of the Company's authorized but unissued Common
Stock and will, upon issue, be duly and validly issued and fully paid and
nonassessable and free of any preemptive or similar rights.
(d) If any of the conditions set forth in clauses (a) through (d) of
this Section 11.2 are not satisfied in accordance with the terms thereof, the
Repurchase Price shall be paid by the Company only in cash.
SECTION 11.3 NOTICES; METHOD OF EXERCISING REPURCHASE RIGHT, ETC.
(a) Unless the Company shall have theretofore called for redemption all
of the Outstanding Securities, prior to or on the 30th day after the occurrence
of a Change in Control, the Company, or, at the written request and expense of
the Company prior to or on the 30th day after such occurrence, the Trustee,
shall give to all Holders of Securities notice, in the manner provided in
Section 14.2 hereof, of the occurrence of the Change of Control and of the
Repurchase Right set forth herein arising as a result thereof (the "Company
Notice"). The Company shall also deliver a copy of such notice of a Repurchase
Right to the Trustee. Each notice of a Repurchase Right shall state:
(1) the Repurchase Date;
(2) the date by which the Repurchase Right must
exercised;
(3) the Repurchase Price and accrued and unpaid
interest, if any, and whether the Repurchase Price shall be paid by the
Company in cash or by delivery of shares of Common Stock;
(4) a description of the procedure which a Holder
must follow to exercise a Repurchase Right, and the place or places
where such Securities, are to be surrendered for payment of the
Repurchase Price and accrued and unpaid interest, if any;
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(5) that on the Repurchase Date the Repurchase Price
and accrued and unpaid interest, if any, will become due and payable
upon each such Security designated by the Holder to be repurchased, and
that interest thereon shall cease to accrue on and after said date;
(6) the Conversion Rate then in effect, the date on
which the right to convert the principal amount of the Securities to be
repurchased will terminate and the place where such Securities may be
surrendered for conversion, and
(7) the place or places where such Securities,
together with the Option to Elect Repayment Upon a Change of Control
certificate included in Exhibit A annexed hereto are to be delivered
for payment of the Repurchase Price and accrued and unpaid interest, if
any.
No failure of the Company to give the foregoing notices or defect
therein shall limit any Holder's right to exercise a Repurchase Right or affect
the validity of the proceedings for the repurchase of Securities.
If any of the foregoing provisions or other provisions of this Article
11 are inconsistent with applicable law, such law shall govern.
(b) To exercise a Repurchase Right, a Holder shall deliver to the
Trustee prior to or on the 30th day after the date of the Company Notice:
(1) written notice of the Holder's exercise of such
right, which notice shall set forth the name of the Holder,
the principal amount of the Securities to be repurchased (and,
if any Security is to be repurchased in part, the serial
number thereof, the portion of the principal amount thereof to
be repurchased) and a statement that an election to exercise
the Repurchase Right is being made thereby, and, in the event
that the Repurchase Price shall be paid in shares of Common
Stock, the name or names (with addresses) in which the
certificate or certificates for shares of Common Stock shall
be issued, and
(2) the Securities with respect to which the
Repurchase Right is being exercised.
Such written notice shall be irrevocable, except that the right of the Holder to
convert the Securities with respect to which the Repurchase Right is being
exercised shall continue until the close of business on the Business Day
immediately preceding the Repurchase Date.
(c) In the event a Repurchase Right shall be exercised in accordance
with the terms hereof, the Company shall pay or cause to be paid to the Trustee
the Repurchase Price in cash or shares of Common Stock, as provided above, for
payment to the Holder on the Repurchase Date or, if shares of Common Stock are
to be paid, as promptly after the Repurchase Date as practicable, together with
accrued and unpaid interest to the Repurchase Date payable in cash with respect
to the Securities as to which the Repurchase Right has been exercised; provided,
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however, that installments of interest that mature prior to or on the Repurchase
Date shall be payable in cash to the Holders of such Securities, or one or more
Predecessor Securities, registered as such at the close of business on the
relevant Regular Record Date.
(d) If any Security (or portion thereof) surrendered for repurchase
shall not be so paid on the Repurchase Date, the principal amount of such
Security (or portion thereof, as the case may be) shall, until paid, bear
interest to the extent permitted by applicable law from the Repurchase Date at
the Interest Rate, and each Security shall remain convertible into Common Stock
until the principal of such Security (or portion thereof, as the case may be)
shall have been paid or duly provided for.
(e) Any Security which is to be repurchased only in part shall be
surrendered to the Trustee (with, if the Company or the Trustee so requires, due
endorsement by, or a written instrument of transfer in form satisfactory to the
Company and the Trustee duly executed by the Holder thereof or his attorney duly
authorized in writing), and the Company shall execute, and the Trustee shall
authenticate and make available for delivery to the Holder of such Security
without service charge, a new Security or Securities, containing identical terms
and conditions, each in an authorized denomination in aggregate principal amount
equal to and in exchange for the unrepurchased portion of the principal of the
Security so surrendered.
(f) Any issuance of shares of Common Stock in respect of the Repurchase
Price shall be deemed to have been effected immediately prior to the close of
business on the Repurchase Date and the Person or Persons in whose name or names
any certificate or certificates for shares of Common Stock shall be issuable
upon such repurchase shall be deemed to have become on the Repurchase Date the
holder or holders of record of the shares represented thereby; provided,
however, that any surrender for repurchase on a date when the stock transfer
books of the Company shall be closed shall constitute the Person or Persons in
whose name or names the certificate or certificates for such shares are to be
issued as the record holder or holders thereof for all purposes at the opening
of business on the next succeeding day on which such stock transfer books are
open. No payment or adjustment shall be made for dividends or distributions on
any Common Stock issued upon repurchase of any Security declared prior to the
Repurchase Date.
(g) No fractions of shares of Common Stock shall be issued upon
repurchase of any Security or Securities. If more than one Security shall be
repurchased from the same Holder and the Repurchase Price shall be payable in
shares of Common Stock, the number of full shares which shall be issued upon
such repurchase shall be computed on the basis of the aggregate principal amount
of the Securities (or specified portions thereof) to be so repurchased. Instead
of any fractional share of Common Stock which would otherwise be issued on the
repurchase of any Security or Securities (or specified portions thereof), the
Company shall pay a cash adjustment in respect of such fraction (calculated to
the nearest one-100th of a share) in an amount equal to the same fraction of the
Quoted Price of the Common Stock as of the Trading Day preceding the Repurchase
Date.
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(h) Any issuance and delivery of certificates for shares of Common
Stock on repurchase of Securities shall be made without charge to the Holder of
Securities being repurchased for such certificates or for any tax or duty in
respect of the issuance or delivery of such certificates or the Securities
represented thereby; provided, however, that the Company shall not be required
to pay any tax or duty which may be payable in respect of (i) income of the
Holder or (ii) any transfer involved in the issuance or delivery of certificates
for shares of Common Stock in a name other than that of the Holder of the
Securities being repurchased, and no such issuance or delivery shall be made
unless the Persons requesting such issuance or delivery has paid to the Company
the amount of any such tax or duty or has established, to the satisfaction of
the Company, that such tax or duty has been paid.
(i) All Securities delivered for repurchase shall be delivered to the
Trustee to be canceled at the direction of the Trustee, which shall dispose of
the same as provided in Section 2.15 hereof.
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ARTICLE 12
CONVERSION OF SECURITIES
SECTION 12.1 CONVERSION RIGHT AND CONVERSION PRICE.
Subject to and upon compliance with the provisions of this Article, at
the option of the Holder thereof, any Security or any portion of the principal
amount thereof which is $1,000 or an integral multiple of $1,000 may be
converted at the principal amount thereof, or of such portion thereof, into duly
authorized, fully paid and nonassessable shares of Common Stock, at the
Conversion Price, determined as hereinafter provided, in effect at the time of
conversion. Such conversion right shall expire at the close of business on
February 8, 2007.
In case a Security or portion thereof is called for redemption, such
conversion right in respect of the Security or the portion so called, shall
expire at the close of business on the second Business Day preceding the
Redemption Date, unless the Company defaults in making the payment due upon
redemption. In the case of a Change of Control for which the Holder exercises
its Repurchase Right with respect to a Security or portion thereof, such
conversion right in respect of the Security or portion thereof shall expire at
the close of business on the Business Day immediately preceding the Repurchase
Date.
The price at which shares of Common Stock shall be delivered upon
conversion (the "Conversion Price") shall be initially equal to $76.71 per share
of Common Stock. The Conversion Price shall be adjusted in certain instances as
provided in paragraphs (a), (b), (c), (d), (e), (f), (h) and (1) of Section 12.4
hereof.
SECTION 12.2 EXERCISE OF CONVERSION RIGHT.
To exercise the conversion right, the Holder of any Security to be
converted shall surrender such Security duly endorsed or assigned to the Company
or in blank, at the office of any Conversion Agent, accompanied by a duly signed
conversion notice substantially in the form attached to the Security to the
Company stating that the Holder elects to convert such Security or, if less than
the entire principal amount thereof is to be converted, the portion thereof to
be converted.
Securities surrendered for conversion during the period from the close
of business on any Regular Record Date to the opening of business on the next
succeeding Interest Payment Date (except in the case of any Security whose
Maturity is prior to such Interest Payment Date) shall be accompanied by payment
in New York Clearing House funds or other funds acceptable to the Company of an
amount equal to the interest to be received on such Interest Payment Date on the
principal amount of Securities being surrendered for conversion.
Securities shall be deemed to have been converted immediately prior to
the close of business on the day of surrender of such Securities for conversion
in accordance with the foregoing provisions, and at such time the rights of the
Holders of such Securities as Holders shall cease, and the Person or Persons
entitled to receive the Common Stock issuable
67
upon conversion shall be treated for all purposes as the record holder or
holders of such Common Stock at such time. As promptly as practicable on or
after the conversion date, the Company shall cause to be issued and delivered
to such Conversion Agent a certificate or certificates for the number of full
shares of Common Stock issuable upon conversion, together with payment in
lieu of any fraction of a share as provided in Section 12.3 hereof.
In the case of any Security which is converted in part only, upon such
conversion the Company shall execute and the Trustee shall authenticate and
deliver to the Holder thereof, at the expense of the Company, a new Security or
Securities of authorized denominations in aggregate principal amount equal to
the unconverted portion of the principal amount of such Securities.
If shares of Common Stock to be issued upon conversion of a Restricted
Security, or Securities to be issued upon conversion of a Restricted Security in
part only, are to be registered in a name other than that of the Holder of such
Restricted Security, such Holder must deliver to the Conversion Agent a
certificate in substantially the form set forth in the form of Security set
forth in Exhibit A annexed hereto, dated the date of surrender of such
Restricted Security and signed by such Holder, as to compliance with the
restrictions on transfer applicable to such Restricted Security. Neither the
Trustee nor any Conversion Agent, Registrar or Transfer Agent shall be required
to register in a name other than that of the Holder shares of Common Stock or
Securities issued upon conversion of any such Restricted Security not so
accompanied by a properly completed certificate.
The Company hereby initially appoints the Trustee as the Conversion
Agent.
SECTION 12.3 FRACTIONS OF SHARES.
No fractional shares of Common Stock shall be issued upon conversion of
any Security or Securities. If more than one Security shall be surrendered for
conversion at one time by the same Holder, the number of full shares which shall
be issued upon conversion thereof shall be computed on the basis of the
aggregate principal amount of the Securities (or specified portions thereof) so
surrendered. Instead of any fractional share of Common Stock which would
otherwise be issued upon conversion of any Security or Securities (or specified
portions thereof), the Company shall pay a cash adjustment in respect of such
fraction (calculated to the nearest one-100th of a share) in an amount equal to
the same fraction of the Quoted Price of the Common Stock as of the Trading Day
preceding the date of conversion.
SECTION 12.4 ADJUSTMENT OF CONVERSION PRICE.
The Conversion Price shall be subject to adjustments, calculated by the
Company, from time to time as follows:
(a) In case the Company shall hereafter pay a dividend or make a
distribution to all holders of the outstanding Common Stock in shares of Common
Stock, the Conversion Price in effect at the opening of business on the date
following the date fixed for the determination of stockholders entitled to
receive such dividend or other distribution shall be reduced by multiplying such
Conversion Price by a fraction:
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(i) the numerator of which shall be the number of
shares of Common Stock outstanding at the close of business on
the Record Date (as defined in Section 12.4(g)) fixed for such
determination, and
(ii) the denominator of which shall be the sum of
such number of shares and the total number of shares
constituting such dividend or other distribution.
Such reduction shall become effective immediately after the opening of business
on the day following the Record Date. If any dividend or distribution of the
type described in this Section 12.4(a) is declared but not so paid or made, the
Conversion Price shall again be adjusted to the Conversion Price which would
then be in effect if such dividend or distribution had not been declared.
(b) In case the outstanding shares of Common Stock shall be subdivided
into a greater number of shares of Common Stock, the Conversion Price in effect
at the opening of business on the day following the day upon which such
subdivision becomes effective shall be proportionately reduced, and conversely,
in case outstanding shares of Common Stock shall be combined into a smaller
number of shares of Common Stock, the Conversion Price in effect at the opening
of business on the day following the day upon which such combination becomes
effective shall be proportionately increased, such reduction or increase, as the
case may be, to become effective immediately after the opening of business on
the day following the day upon which such subdivision or combination becomes
effective.
(c) In case the Company shall issue rights or warrants (other than any
rights or warrants referred to in Section 12.4(d)) to all holders of its
outstanding shares of Common Stock entitling them to subscribe for or purchase
shares of Common Stock (or securities convertible into Common Stock) at a price
per share (or having a conversion price per share) less than the Current Market
Price (as defined in Section 12.4(g)) on the Record Date fixed for the
determination of stockholders entitled to receive such rights or warrants, the
Conversion Price shall be adjusted so that the same shall equal the price
determined by multiplying the Conversion Price in effect at the opening of
business on the date after such Record Date by a fraction:
(i) the numerator of which shall be the number of
shares of Common Stock outstanding at the close of business on
the Record Date plus the number of shares which the aggregate
offering price of the total number of shares so offered for
subscription or purchase (or the aggregate conversion price of
the convertible securities so offered) would purchase at such
Current Market Price, and
(ii) the denominator of which shall be the number
of shares of Common Stock outstanding on the close of business
on the Record Date plus the total number of additional shares
of Common Stock so offered for subscription or purchase (or
into which the convertible securities so offered are
convertible).
Such adjustment shall become effective immediately after the opening of business
on the day following the Record Date fixed for determination of stockholders
entitled to receive such rights or warrants. To the extent that shares of Common
Stock (or securities convertible into Common
69
Stock) are not delivered pursuant to such rights or warrants, upon the
expiration or termination of such rights or warrants the Conversion Price shall
be readjusted to the Conversion Price which would then be in effect had the
adjustments made upon the issuance of such rights or warrants been made on the
basis of the delivery of only the number of shares of Common Stock (or
securities convertible into Common Stock) actually delivered. In the event that
such rights or warrants are not so issued, the Conversion Price shall again be
adjusted to be the Conversion Price which would then be in effect if such date
fixed for the determination of stockholders entitled to receive such rights or
warrants had not been fixed. In determining whether any rights or warrants
entitle the holders to subscribe for or purchase shares of Common Stock at less
than such Current Market Price, and in determining the aggregate offering price
of such shares of Common Stock, there shall be taken into account any
consideration received for such rights or warrants, the value of such
consideration if other than cash, to be determined by the Board of Directors.
(d) In case the Company shall, by dividend or otherwise, distribute to
all holders of its Common Stock shares of any class of capital stock of the
Company (other than any dividends or distributions to which Section 12.4(a)
applies) or evidences of its indebtedness, cash or other assets, including
securities, but excluding (1) any rights or warrants referred to in Section
12.4(c), (2) any stock, securities or other property or assets (including cash)
distributed in connection with a reclassification, change, merger,
consolidation, statutory share exchange, combination, sale or conveyance to
which Section 12.11 hereof applies and (3) dividends and distributions paid
exclusively in cash (the securities described in foregoing clauses (1), (2) and
(3) hereinafter in this Section 12.4(d) called the "securities"), then, in each
such case, subject to the second succeeding paragraph of this Section 12.4(d),
the Conversion Price shall be reduced so that the same shall be equal to the
price determined by multiplying the Conversion Price in effect immediately prior
to the close of business on the Record Date (as defined in Section 12.4(g)) with
respect to such distribution by a fraction:
(i) the numerator of which shall be the Current
Market Price (determined as provided in Section 12.4(g)) on
such date less the fair market value (as determined by the
Board of Directors, whose determination shall be conclusive
and set forth in a Board Resolution) on such date of the
portion of the securities so distributed applicable to one
share of Common Stock (determined on the basis of the number
of shares of the Common Stock outstanding on the Record Date),
and
(ii) the denominator of which shall be such Current
Market Price.
Such reduction shall become effective immediately prior to the opening of
business on the day following the Record Date. However, in the event that the
then fair market value (as so determined) of the portion of the securities so
distributed applicable to one share of Common Stock is equal to or greater than
the Current Market Price on the Record Date, in lieu of the foregoing
adjustment, adequate provision shall be made so that each Holder shall have the
right to receive upon conversion of a Security (or any portion thereof)
the amount of securities such Holder would have received had such Holder
converted such Security (or portion thereof)
70
immediately prior to such Record Date. In the event that such dividend or
distribution is not so paid or made, the Conversion Price shall again be
adjusted to be the Conversion Price which would then be in effect if such
dividend or distribution had not been declared.
If the Board of Directors determines the fair market value of any
distribution for purposes of this Section 12.4(d) by reference to the actual or
when issued trading market for any securities comprising all or part of such
distribution, it must in doing so consider the prices in such market over the
same period (the "Reference Period") used in computing the Current Market Price
pursuant to Section 12.4(g) to the extent possible, unless the Board of
Directors in a Board Resolution determines in good faith that determining the
fair market value during the Reference Period would not be in the best interest
of the Holder.
Rights or warrants distributed by the Company to all holders of Common
Stock entitling the holders thereof to subscribe for or purchase shares of the
Company's capital stock (either initially or under certain circumstances), which
rights or warrants, until the occurrence of a specified event or events
("Trigger Event"):
(iii) are deemed to be transferred with such shares of
Common Stock;
(iv) are not exercisable; and
(v) are also issued in respect of future issuances of
Common Stock,
shall be deemed not to have been distributed for purposes of this Section
12.4(d) (and no adjustment to the Conversion Price under this Section 12.4(d)
will be required) until the occurrence of the earliest Trigger Event. If such
right or warrant is subject to subsequent events, upon the occurrence of which
such right or warrant shall become exercisable to purchase different securities,
evidences of indebtedness or other assets or entitle the holder to purchase a
different number or amount of the foregoing or to purchase any of the foregoing
at a different purchase price, then the occurrence of each such event shall be
deemed to be the date of issuance and record date with respect to a new right or
warrant (and a termination or expiration of the existing right or warrant
without exercise by the holder thereof). In addition, in the event of any
distribution (or deemed distribution) of rights or warrants, or any Trigger
Event or other event (of the type described in the preceding sentence) with
respect thereto, that resulted in an adjustment to the Conversion Price under
this Section 12.4(d):
(1) in the case of any such rights or warrants which
shall all have been redeemed or repurchased without exercise
by any holders thereof, the Conversion Price shall be
readjusted upon such final redemption or repurchase to give
effect to such distribution or Trigger Event, as the case may
be, as though it were a cash distribution, equal to the per
share redemption or repurchase price received by a holder of
Common Stock with respect to such rights or warrant (assuming
such holder had retained such rights or warrants), made to all
holders of Common Stock as of the date of such redemption or
repurchase, and
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(2) in the case of such rights or warrants all of
which shall have expired or been terminated without exercise,
the Conversion Price shall be readjusted as if such rights and
warrants had never been issued.
For purposes of this Section 12.4(d) and Sections 12.4(a), 12.4(b) and
12.4(c), any dividend or distribution to which this Section 12.4(d) is
applicable that also includes shares of Common Stock, a subdivision or
combination of Common Stock to which Section 12.4(c) applies, or rights or
warrants to subscribe for or purchase shares of Common Stock to which Section
12.4(c) applies (or any combination thereof), shall be deemed instead to be:
(3) a dividend or distribution of the evidences of
indebtedness, assets, shares of capital stock, rights or warrants other
than such shares of Common Stock, such subdivision or combination or
such rights or warrants to which Sections 12.4(a), 12.4(b) and 12.4(c)
apply, respectively (and any Conversion Price reduction required by
this Section 12.4(d) with respect to such dividend or distribution
shall then be made), immediately followed by
(4) a dividend or distribution of such shares of
Common Stock, such subdivision or combination or such rights or
warrants (and any further Conversion Price reduction required by
Sections 12.4(a), 12.4(b) and 12.4(c) with respect to such dividend or
distribution shall then be made), except:
(A) the Record Date of such dividend or
distribution shall be substituted as (x) "the date fixed for
the determination of stockholders entitled to receive such
dividend or other distribution", "Record Date fixed for such
determinations" and "Record Date" within the meaning of
Section 12.4(a), (y) "the day upon which such subdivision
becomes effective" and "the day upon which such combination
becomes effective" within the meaning of Section 12.4(b), and
(z) as "the date fixed for the determination of stockholders
entitled to receive such rights or warrants", "the Record Date
fixed for the determination of the stockholders entitled to
receive such rights or warrants" and such "Record Date" within
the meaning of Section 12.4(c), and
(B) any shares of Common Stock included in
such dividend or distribution shall not be deemed "outstanding
at the close of business on the date fixed for such
determination" within the meaning of Section 12.4(a) and any
reduction or increase in the number of shares of Common Stock
resulting from such subdivision or combination shall be
disregarded in connection with such dividend or distribution..
(e) In case the Company shall, by dividend or otherwise, distribute to
all holders of its Common Stock cash (excluding any cash that is distributed
upon a reclassification, change, merger, consolidation, statutory share
exchange, combination, sale or conveyance to which Section 12.11 hereof applies
or as part of a distribution referred to in Section 12.4(d) hereof), in an
aggregate amount that, combined together with:
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(1) the aggregate amount of any other such
distributions to all holders of Common Stock made exclusively
in cash within the 12 months preceding the date of payment of
such distribution, and in respect of which no adjustment
pursuant to this Section 12.4(e) has been made, and
(2) the aggregate of any cash plus the fair market
value (as determined by the Board of Directors, whose
determination shall be conclusive and set forth in a Board
Resolution) of consideration payable in respect of any tender
offer by the Company or any of its subsidiaries for all or any
portion of the Common Stock concluded within the 12 months
preceding the date of such distribution, and in respect of
which no adjustment pursuant to Section 12.4(f) hereof has
been made,
exceeds 10% of the product of the Current Market Price (determined as provided
in Section 12.4(g)) on the Record Date with respect to such distribution times
the number of shares of Common Stock outstanding on such date, then and in each
such case, immediately after the close of business on such date, the Conversion
Price shall be reduced so that the same shall equal the price determined by
multiplying the Conversion Price in effect immediately prior to the close of
business on such Record Date by a fraction:
(i) the numerator of which shall be equal to the Current
Market Price on the Record Date less an amount equal to the quotient of
(x) the excess of such combined amount over such 10% and (y) the number
of shares of Common Stock outstanding on the Record Date, and
(ii) the denominator of which shall be equal to the Current
Market Price on such date.
However, in the event that the then fair market value (as so determined) of the
portion of the securities so distributed applicable to one share of Common Stock
is equal to or greater than the Current Market Price on the Record Date, in lieu
of the foregoing adjustment, adequate provision shall be made so that each
Holder shall have the right to receive upon conversion of a Security (or any
portion thereof) the amount of cash such Holder would have received had such
Holder converted such Security (or portion thereof) immediately prior to such
Record Date. In the event that such dividend or distribution is not so paid or
made, the Conversion Price shall again be adjusted to be the Conversion Price
which would then be in effect if such dividend or distribution had not been
declared.
(f) In case a tender offer made by the Company or any of its
subsidiaries for all or any portion of the Common Stock shall expire and such
tender offer (as amended upon the expiration thereof) shall require the payment
to stockholders (based on the acceptance (up to any maximum specified in the
terms of the tender offer) of Purchased Shares (as defined below)) of an
aggregate consideration having a fair market value (as determined by the Board
of Directors, whose determination shall be conclusive and set forth in a Board
Resolution) that combined together with:
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(1) the aggregate of the cash plus the fair market
value (as determined by the Board of Directors, whose
determination shall be conclusive and set forth in a Board
Resolution), as of the expiration of such tender offer, of
consideration payable in respect of any other tender offers,
by the Company or any of its subsidiaries for all or any
portion of the Common Stock expiring within the 12 months
preceding the expiration of such tender offer and in respect
of which no adjustment pursuant to this Section 12.4(f) has
been made, and
(2) the aggregate amount of any distributions to all
holders of the Company's Common Stock made exclusively in cash
within 12 months preceding the expiration of such tender offer
and in respect of which no adjustment pursuant to Section
12.4(e) has been made, exceeds 10% of the product of the
Current Market Price (determined as provided in Section
12.4(g)) as of the last time (the "Expiration Time") tenders
could have been made pursuant to such tender offer (as it may
be amended) times the number of shares of Common Stock
outstanding (including any tendered shares) on the Expiration
Time, then, and in each such case, immediately prior to the
opening of business on the day after the date of the
Expiration Time, the Conversion Price shall be adjusted so
that the same shall equal the price determined by multiplying
the Conversion Price in effect immediately prior to close of
business on the date of the Expiration Time by a fraction:
(i) the numerator of which shall be the number of
shares of Common Stock outstanding (including any tendered
shares) at the Expiration Time multiplied by the Current
Market Price of the Common Stock on the Trading Day next
succeeding the Expiration Time, and
(ii) the denominator shall be the sum of (x) the
fair market value (determined as aforesaid) of the aggregate
consideration payable to stockholders based on the acceptance
(up to any maximum specified in the terms of the tender offer)
of all shares validly tendered and not withdrawn as of the
Expiration Time (the shares deemed so accepted, up to any such
maximum, being referred to as the "Purchased Shares") and (y)
the product of the number of shares of Common Stock
outstanding (less any Purchased Shares) on the Expiration Time
and the Current Market Price of the Common Stock on the
Trading Day next succeeding the Expiration Time.
Such reduction (if any) shall become effective immediately prior to the opening
of business on the day following the Expiration Time. In the event that the
Company is obligated to purchase shares pursuant to any such tender offer, but
the Company is permanently prevented by applicable law from effecting any such
purchases or all such purchases are rescinded, the Conversion Price shall again
be adjusted to be the Conversion Price which would then be in effect if such
tender offer had not been made. If the application of this Section 12.4(f) to
any tender offer would result in an increase in the Conversion Price, no
adjustment shall be made for such tender offer under this Section 12.4(f).
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(g) For purposes of this Section 12.4, the following terms shall have
the meanings indicated:
(1) "Current Market Price" shall mean the average of
the daily Closing Prices per share of Common Stock for the ten
consecutive Trading Days immediately prior to the date in
question; provided, however, that if:
(i) the "ex" date (as hereinafter defined)
for any event (other than the issuance or
distribution requiring such computation) that
requires an adjustment to the Conversion Price
pursuant to Section 12.4(a), (b), (c), (d), (e) or
(f) occurs during such ten consecutive Trading Days,
the Closing Price for each Trading Day prior to the
"ex" date for such other event shall be adjusted by
multiplying such Closing Price by the same fraction
by which the Conversion Price is so required to be
adjusted as a result of such other event;
(ii) the "ex" date for any event (other
than the issuance or distribution requiring such
computation) that requires an adjustment to the
Conversion Price pursuant to Section 12.4(a), (b),
(c), (d), (e) or (f) occurs on or after the "ex" date
for the issuance or distribution requiring such
computation and prior to the day in question, the
Closing Price for each Trading Day on and after the
"ex" date for such other event shall be adjusted by
multiplying such Closing Price by the reciprocal of
the fraction by which the Conversion Price is so
required to be adjusted as a result of such other
event; and
(iii) the "ex" date for the issuance or
distribution requiring such computation is prior to
the day in question, after taking into account any
adjustment required pursuant to clause (i) or (ii) of
this proviso, the Closing Price for each Trading Day
on or after such "ex" date shall be adjusted by
adding thereto the amount of any cash and the fair
market value (as determined by the Board of Directors
in a manner consistent with any determination of such
value for purposes of Section 12.4(d) or (f), whose
determination shall be conclusive and set forth in a
Board Resolution) of the evidences of indebtedness,
shares of capital stock or assets being distributed
applicable to one share of Common Stock as of the
close of business on the day before such "ex" date.
For purposes of any computation under Section 12.4(f), the Current Market Price
of the Common Stock on any date shall be deemed to be the average of the daily
Closing Prices per share of Common Stock for such day and the next two
succeeding Trading Days; provided, however, that if the "ex" date for any event
(other than the tender offer requiring such computation) that requires an
adjustment to the Conversion Price pursuant to Section 12.4(a), (b), (c), (d),
(e) or (f) occurs on or after the Expiration Time for the tender or exchange
offer requiring such computation and prior to the day in question, the Closing
Price for each Trading Day on and after
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the "ex" date for such other event shall be adjusted by multiplying such Closing
Price by the reciprocal of the fraction by which the Conversion Price is so
required to be adjusted as a result of such other event. For purposes of this
paragraph, the term "ex" date, when used:
(A) with respect to any issuance or distribution,
means the first date on which the Common Stock trades regular
way on the relevant exchange or in the relevant market from
which the Closing Price was obtained without the right to
receive such issuance or distribution;
(B) with respect to any subdivision or combination of
shares of Common Stock, means the first date on which the
Common Stock trades regular way on such exchange or in such
market after the time at which such subdivision or combination
becomes effective, and
(C) with respect to any tender or exchange offer,
means the first date on which the Common Stock trades regular
way on such exchange or in such market after the Expiration
Time of such offer.
Notwithstanding the foregoing, whenever successive adjustments to the
Conversion Price are called for pursuant to this Section 12.4, such
adjustments shall be made to the Current Market Price as may be
necessary or appropriate to effectuate the intent of this Section 12.4
and to avoid unjust or inequitable results as determined in good faith
by the Board of Directors.
(1) "fair market value" shall mean the amount which a
willing buyer would pay a willing seller in an arm's length
transaction.
(2) "Record Date" shall mean, with respect to any
dividend, distribution or other transaction or event in which
the holders of Common Stock have the right to receive any
cash, securities or other property or in which the Common
Stock (or other applicable security) is exchanged for or
converted into any combination of cash, securities or other
property, the date fixed for determination of stockholders
entitled to receive such cash, securities or other property
(whether such date is fixed by the Board of Directors or by
statute, contract or otherwise).
(h) The Company may make such reductions in the Conversion Price, in
addition to those required by Sections 12.4(a), (b), (c), (d), (e) or (f), as
the Board of Directors considers to be advisable to avoid or diminish any income
tax to holders of Common Stock or rights to purchase Common Stock resulting from
any dividend or distribution of stock (or rights to acquire stock) or from any
event treated as such for income tax purposes.
To the extent permitted by applicable law, the Company from time to
time may reduce the Conversion Price by any amount for any period of time if the
period is at least 20 days and the reduction is irrevocable during the period
and the Board of Directors determines in good faith that such reduction would be
in the best interests of the Company, which determination shall be
76
conclusive and set forth in a Board Resolution. Whenever the Conversion Price is
reduced pursuant to the preceding sentence, the Company shall mail to the
Trustee and each Holder at the address of such Holder as it appears in the
Register a notice of the reduction at least 15 days prior to the date the
reduced Conversion Price takes effect, and such notice shall state the reduced
Conversion Price and the period during which it will be in effect.
(i) No adjustment in the Conversion Price shall be required unless such
adjustment would require an increase or decrease of at least 1% in such price;
provided, however, that any adjustments which by reason of this Section 12.4(i)
are not required to be made shall be carried forward and taken into account in
any subsequent adjustment. All calculations under this Article 12 shall be made
by the Company and shall be made to the nearest cent or to the nearest one
hundredth of a share, as the case may be. No adjustment need be made for a
change in the par value or no par value of the Common Stock.
(j) In any case in which this Section 12.4 provides that an adjustment
shall become effective immediately after a Record Date for an event, the Company
may defer until the occurrence of such event (i) issuing to the Holder of any
Security converted after such Record Date and before the occurrence of such
event the additional shares of Common Stock issuable upon such conversion by
reason of the adjustment required by such event over and above the Common Stock
issuable upon such conversion before giving effect to such adjustment and (ii)
paying to such holder any amount in cash in lieu of any fraction pursuant to
Section 12.3 hereof.
(k) For purposes of this Section 12.4, the number of shares of Common
Stock at any time outstanding shall not include shares held in the treasury of
the Company but shall include shares issuable in respect of scrip certificates
issued in lieu of fractions of shares of Common Stock. The Company will not pay
any dividend or make any distribution on shares of Common Stock held in the
treasury of the Company.
(l) If the distribution date for the rights provided in the Company's
rights agreement, if any, occurs prior to the date a Security is converted, the
Holder of the Security who converts such Security after the distribution date is
not entitled to receive the rights that would otherwise be attached (but for the
date of conversion) to the shares of Common Stock received upon such conversion;
provided, however, that an adjustment shall be made to the Conversion Price
pursuant to clause 12.4(b) as if the rights were being distributed to the common
stockholders of the Company immediately prior to such conversion. If such an
adjustment is made and the rights are later redeemed, invalidated or terminated,
then a corresponding reversing adjustment shall be made to the Conversion Price,
on an equitable basis, to take account of such event.
SECTION 12.5 NOTICE OF ADJUSTMENTS OF CONVERSION PRICE.
Whenever the Conversion Price is adjusted as herein provided (other
than in the case of an adjustment pursuant to the second paragraph of Section
12.4(h) for which the notice required by such paragraph has been provided), the
Company shall promptly file with the Trustee and any Conversion Agent other than
the Trustee an Officers' Certificate setting forth the adjusted Conversion Price
and showing in reasonable detail the facts upon which such adjustment is based.
Promptly after delivery of such Officers' Certificate, the Company shall prepare
a notice
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stating that the Conversion Price has been adjusted and setting forth the
adjusted Conversion Price and the date on which each adjustment becomes
effective, and shall mail such notice to each Holder at the address of such
Holder as it appears in the Register within 20 days of the effective date of
such adjustment. Failure to deliver such notice shall not effect the legality or
validity of any such adjustment.
SECTION 12.6 NOTICE PRIOR TO CERTAIN ACTIONS.
In case at any time after the date hereof:
(1) the Company shall declare a dividend (or any
other distribution) on its Common Stock payable otherwise than in cash
out of its capital surplus or its consolidated retained earnings;
(2) the Company shall authorize the granting to the
holders of its Common Stock of rights or warrants to subscribe for or
purchase any shares of capital stock of any class (or of securities
convertible into shares of capital stock of any class) or of any other
rights;
(3) there shall occur any reclassification of the
Common Stock of the Company (other than a subdivision or combination of
its outstanding Common Stock, a change in par value, a change from par
value to no par value or a change from no par value to par value), or
any merger, consolidation, statutory share exchange or combination to
which the Company is a party and for which approval of any shareholders
of the Company is required, or the sale, transfer or conveyance of all
or substantially all of the assets of the Company; or
(4) there shall occur the voluntary or involuntary
dissolution, liquidation or winding up of the Company;
the Company shall cause to be filed at each office or agency maintained for the
purpose of conversion of securities pursuant to Section 9.2 hereof, and shall
cause to be provided to the Trustee and all Holders in accordance with Section
14.2 hereof, at least 20 days (or 10 days in any case specified in clause (1) or
(2) above) prior to the applicable record or effective date hereinafter
specified, a notice stating:
(A) the date on which a record is to be
taken for the purpose of such dividend, distribution, rights
or warrants, or, if a record is not to be taken, the date as
of which the holders of Common Stock of record to be entitled
to such dividend, distribution, rights or warrants are to be
determined, or
(B) the date on which such reclassification,
merger, consolidation, statutory share exchange, combination,
sale, transfer, conveyance, dissolution, liquidation or
winding up is expected to become effective, and the date as of
which it is expected that holders of Common Stock of record
shall be entitled to exchange their shares of Common Stock for
securities, cash or other
78
property deliverable upon such reclassification, merger,
consolidation, statutory share exchange, sale, transfer,
dissolution, liquidation or winding up.
Neither the failure to give such notice nor any defect therein shall
affect the legality or validity of the proceedings or actions described in
clauses (1) through (4) of this Section 12.6.
SECTION 12.7 COMPANY TO RESERVE COMMON STOCK.
The Company shall at all times use its best efforts to reserve and keep
available, free from preemptive rights, out of its authorized but unissued
Common Stock, for the purpose of effecting the conversion of Securities, the
full number of shares of fully paid and nonassessable Common Stock then issuable
upon the conversion of all Outstanding Securities.
SECTION 12.8 TAXES ON CONVERSIONS.
Except as provided in the next sentence, the Company will pay any and
all taxes (other than taxes on income) and duties that may be payable in respect
of the issue or delivery of shares of Common Stock on conversion of Securities
pursuant hereto. A Holder delivering a Security for conversion shall be liable
for and will be required to pay any tax or duty which may be payable in respect
of any transfer involved in the issue and delivery of shares of Common Stock in
a name other than that of the Holder of the Security or Securities to be
converted, and no such issue or delivery shall be made unless the Person
requesting such issue has paid to the Company the amount of any such tax or
duty, or has established to the satisfaction of the Company that such tax or
duty has been paid.
SECTION 12.9 COVENANT AS TO COMMON STOCK.
The Company covenants that all shares of Common Stock which may be
issued upon conversion of Securities will upon issue be fully paid and
nonassessable and, except as provided in Section 12.8, the Company will pay all
taxes, liens and charges with respect to the issue thereof.
SECTION 12.10 CANCELLATION OF CONVERTED SECURITIES.
All Securities delivered for conversion shall be delivered to the
Trustee to be canceled by or at the direction of the Trustee, which shall
dispose of the same as provided in Section 2.9.
SECTION 12.11 EFFECT OF RECLASSIFICATION, CONSOLIDATION, MERGER OR
SALE.
If any of following events occur, namely:
(i) any reclassification or change of the
outstanding shares of Common Stock (other than a change in par
value, or from par value to no par value, or from no par value
to par value, or as a result of a subdivision or combination),
79
(ii) any merger, consolidation, statutory
share exchange or combination of the Company with another
corporation as a result of which holders of Common Stock shall
be entitled to receive stock, securities or other property or
assets (including cash) with respect to or in exchange for
such Common Stock or
(iii) any sale or conveyance of the
properties and assets of the Company as, or substantially as,
an entirety to any other corporation as a result of which
holders of Common Stock shall be entitled to receive stock,
securities or other property or assets (including cash) with
respect to or in exchange for such Common Stock,
the Company or the successor or purchasing corporation, as the case may be,
shall execute with the Trustee a supplemental indenture (which shall comply with
the TIA as in force at the date of execution of such supplemental indenture if
such supplemental indenture is then required to so comply) providing that such
Security shall be convertible into the kind and amount of shares of stock and
other securities or property or assets (including cash) which such Holder would
have been entitled to receive upon such reclassification, change, merger,
consolidation, statutory share exchange, combination, sale or conveyance had
such Securities been converted into Common Stock immediately prior to such
reclassification, change, merger, consolidation, statutory share exchange,
combination, sale or conveyance assuming such holder of Common Stock did not
exercise its rights of election, if any, as to the kind or amount of securities,
cash or other property receivable upon such merger, consolidation, statutory
share exchange, sale or conveyance (provided that, if the kind or amount of
securities, cash or other property receivable upon such merger, consolidation,
statutory share exchange, sale or conveyance is not the same for each share of
Common Stock in respect of which such rights of election shall not have been
exercised ("Non-Electing Share"), then for the purposes of this Section 12.11
the kind and amount of securities, cash or other property receivable upon such
merger, consolidation, statutory share exchange, sale or conveyance for each
Non-Electing Share shall be deemed to be the kind and amount so receivable per
share by a plurality of the Non-Electing Shares). Such supplemental indenture
shall provide for adjustments which shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Article 12. If, in the case
of any such reclassification, change, merger, consolidation, statutory share
exchange, combination, sale or conveyance, the stock or other securities and
assets receivable thereupon by a holder of shares of Common Stock includes
shares of stock or other securities and assets of a corporation other than the
successor or purchasing corporation, as the case may be, in such
reclassification, change, merger, consolidation, statutory share exchange,
combination, sale or conveyance, then such 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 Securities as the Board of
Directors shall reasonably consider necessary by reason of the foregoing,
including to the extent practicable the provisions providing for the Repurchase
Rights set forth in Article 13 hereof.
The Company shall cause notice of the execution of such supplemental
indenture to be mailed to each Holder, at the address of such Holder as it
appears on the Register, within 20 days
80
after execution thereof. Failure to deliver such notice shall not affect the
legality or validity of such supplemental indenture.
The above provisions of this Section shall similarly apply to
successive reclassifications, mergers, consolidations, statutory share
exchanges, combinations, sales and conveyances.
If this Section 12.11 applies to any event or occurrence, Section 12.4
hereof shall not apply.
SECTION 12.12 RESPONSIBILITY OF TRUSTEE FOR CONVERSION PROVISIONS.
The Trustee, subject to the provisions of Section 5.1 hereof, and any
Conversion Agent shall not at any time be under any duty or responsibility to
any Holder of Securities to determine whether any facts exist which may require
any adjustment of the Conversion Price, or with respect to the nature or intent
of any such adjustments when made, or with respect to the method employed, or
herein or in any supplemental indenture provided to be employed, in making the
same. Neither the Trustee, subject to the provisions of Section 5.1 hereof, nor
any Conversion Agent shall be accountable with respect to the validity or value
(of the kind or amount) of any Common Stock, or of any other securities or
property, which may at any time be issued or delivered upon the conversion of
any Security; and it or they do not make any representation with respect
thereto. Neither the Trustee, subject to the provisions of Section 5.1 hereof,
nor any Conversion Agent shall be responsible for any failure of the Company to
make any cash payment or to issue, transfer or deliver any shares of stock or
share certificates or other securities or property upon the surrender of any
Security for the purpose of conversion; and the Trustee, subject to the
provisions of Section 5.1 hereof, and any Conversion Agent shall not be
responsible or liable for any failure of the Company to comply with any of the
covenants of the Company contained in this Article.
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ARTICLE 13
SUBORDINATION
SECTION 13.1 SECURITIES SUBORDINATED TO SENIOR DEBT.
The Company covenants and agrees, and each Holder of Securities, by
such Holder's acceptance thereof, likewise covenants and agrees, that the
Indebtedness represented by the Securities and the payment of the principal of
and premium, if any, and interest (including Liquidated Damages, if any) on each
and all of the Securities is hereby expressly subordinated and junior, to the
extent and in the manner set forth and as set forth in this Section 13.1, in
right of payment to the prior payment in full of all Senior Debt.
(a) In the event of any distribution of assets of the Company upon any
dissolution, winding up, liquidation or reorganization of the Company, whether
in bankruptcy, insolvency, reorganization or receivership proceedings or upon an
assignment for the benefit of creditors or any other marshalling of the assets
and liabilities of the Company or otherwise, the holders of all Senior Debt
shall first be entitled to receive payment of the full amount due thereon in
respect of all such Senior Debt and all other amounts due or provision shall be
made for such amount in cash, or other payments satisfactory to the holders of
Senior Debt, before the Holders of any of the Securities are entitled to receive
any payment or distribution of any character, whether in cash, securities or
other property, on account of the principal of or premium, if any, or interest
(including Liquidated Damages, if any) on the Indebtedness evidenced by the
Securities.
(b) In the event of any acceleration of Maturity of the Securities
because of an Event of Default, unless the full amount due in respect of all
Senior Debt is paid in cash or other form of payment satisfactory to the holders
of Senior Debt, no payment shall be made by the Company with respect to the
principal of, premium, if any, or interest (including Liquidated Damages, if
any) on the Securities or to acquire any of the Securities (including any
redemption, conversion or cash repurchase pursuant to the exercise of the
Repurchase Right), and the Company shall give prompt written notice of such
acceleration to such holders of Senior Debt.
(c) In the event of and during the continuance of any default in
payment of the principal of or premium, if any, or interest on, rent or other
payment obligation in respect of, any Senior Debt, unless all such payments due
in respect of such Senior Debt have been paid in full in cash or other payments
satisfactory to the holders of Senior Debt, no payment shall be made by the
Company with respect to the principal of, premium, if any, or interest
(including Liquidated Damages, if any) on the Securities or to acquire any of
the Securities (including any redemption, conversion or cash repurchase pursuant
to the exercise of the Repurchase Right). The Company shall give prompt written
notice to the Trustee of any default under any Senior Debt or under any
agreement pursuant to which Senior Debt may have been issued.
(d) During the continuance of any event of default with respect to any
Designated Senior Debt, as such event of default is defined under any such
Designated Senior Debt or in any agreement pursuant to which any Designated
Senior Debt has been issued (other than a default in payment of the principal of
or premium, if any, or interest on, rent or other payment obligation in
82
respect of any Designated Senior Debt), permitting the holder or holders of such
Designated Senior Debt to accelerate the maturity thereof (or in the case of any
lease, permitting the landlord either to terminate the lease or to require the
Company to make an irrevocable offer to terminate the lease following an event
of default thereunder), no payment shall be made by the Company, directly or
indirectly, with respect to principal of, premium, if any, or interest
(including Liquidated Damages, if any) on the Securities for 179 days following
notice in writing (a "Payment Blockage Notice") to the Company, from any holder
or holders of such Designated Senior Debt or their representative or
representatives or the trustee or trustees under any indenture or under which
any instrument evidencing any such Designated Senior Debt may have been issued,
that such an event of default has occurred and is continuing, unless such event
of default has been cured or waived or such Designated Senior Debt has been paid
in full; provided, however, if the maturity of such Designated Senior Debt is
accelerated (or in the case of any lease, as a result of such event of default,
the landlord under the lease has given the Company notice of its intention to
terminate the lease or to require the Company to make an irrevocable offer to
terminate the lease), no payment may be made on the Securities until such
Designated Senior Debt has been paid in full in cash or other payment
satisfactory to the holders of such Designated Senior Debt or such acceleration
(or termination, in the case of a lease) has been cured or waived.
For purposes of this Section 13.1(d), such Payment Blockage Notice
shall be deemed to include notice of all other events of default under such
indenture or instrument which are continuing at the time of the event of default
specified in such Payment Blockage Notice. The provisions of this Section
13.1(d) shall apply only to one such Payment Blockage Notice given in any period
of 365 days with respect to any issue of Designated Senior Debt, and no such
continuing event of default that existed or was continuing on the date of
delivery of any Payment Blockage Notice shall be, or shall be made, the basis
for a subsequent Payment Blockage Notice.
(e) In the event that, notwithstanding the foregoing provisions of
Sections 13.1(a), 13.1(b), 13.1(c) and 13.1(d), any payment on account of
principal, premium, if any, or interest (including Liquidated Damages, if any)
on the Securities shall be made by or on behalf of the Company and received by
the Trustee, by any Holder or by any Paying Agent (or, if the Company is acting
as its own Paying Agent, money for any such payment shall be segregated and held
in trust):
(i) after the occurrence of an event specified in
Section 13.1(a) or 13.1(b), then, unless all Senior Debt is paid in
full in cash, or provision shall be made therefor,
(ii)after the happening of an event of default of the
type specified in Section 13.1(c) above, then, unless the amount of
such Senior Debt then due shall have been paid in full, or provision
made therefor or such event of default shall have been cured or waived,
or
(iii) after the happening of an event of default of
the type specified in Section 13.1(d) above and delivery of a Payment
Blockage Notice, then, unless such
83
event of default shall have been cured or waived or the 179-day period
specified in Section 13.1(d) shall have expired,
such payment (subject, in each case, to the provisions of Section 13.7 hereof)
shall be held in trust for the benefit of, and shall be immediately paid over
to, the holders of Designated Senior Debt (unless an event described in Section
13.1(a), (b) or (c) has occurred, in which case the payment shall be held in
trust for the benefit of, and shall be immediately paid over to all holders of
Senior Debt) or their representative or representatives or the trustee or
trustees under any indenture under which any instruments evidencing any of the
Designated Senior Debt or Senior Debt, as the case may be, may have been issued,
as their interests may appear.
SECTION 13.2 SUBROGATION.
Subject to the payment in full of all Senior Debt to which the
Indebtedness evidenced by the Securities is in the circumstances subordinated as
provided in Section 13.1 hereof, the Holders of the Securities shall be
subrogated to the rights of the holders of such Senior Debt to receive payments
or distributions of cash, property or securities of the Company applicable to
such Senior Debt until all amounts owing on the Securities shall be paid in
full, and, as between the Company, its creditors other than holders of such
Senior Debt, and the Holders of the Securities, no such payment or distribution
made to the holders of Senior Debt by virtue of this Article which otherwise
would have been made to the holders of the Securities shall be deemed to be a
payment by the Company on account of such Senior Debt, provided that the
provisions of this Article are and are intended solely for the purpose of
defining the relative rights of the Holders of the Securities, on the one hand,
and the holders of Senior Debt, on the other hand.
SECTION 13.3 OBLIGATION OF THE COMPANY IS ABSOLUTE AND UNCONDITIONAL.
Nothing contained in this Article or elsewhere in this Indenture or in
the Securities is intended to or shall impair, as between the Company, its
creditors other than the holders of Senior Debt, and the Holders of the
Securities, the obligation of the Company, which is absolute and unconditional,
to pay to the Holders of the Securities the principal of and premium, if any,
and interest (including Liquidated Damages, if any) on the Securities as and
when the same shall become due and payable in accordance with their terms, or is
intended to or shall affect the relative rights of the Holders of the Securities
and creditors of the Company other than the holders of Senior Debt, nor shall
anything contained herein or therein prevent the Trustee or the Holder of any
Security from exercising all remedies otherwise permitted by applicable law upon
default under this Indenture, subject to the rights, if any, under this Article
of the holders of Senior Debt in respect of cash, property or securities of the
Company received upon the exercise of any such remedy.
SECTION 13.4 MATURITY OF OR DEFAULT ON SENIOR DEBT.
Upon the maturity of any Senior Debt by lapse of time, acceleration or
otherwise, all principal of or premium, if any, or interest on, rent or other
payment obligations in respect of all such matured Senior Debt shall first be
paid in full, or such payment shall have been duly
84
provided for, before any payment on account of principal, or premium, if any, or
interest (including Liquidated Damages, if any) is made upon the Securities.
SECTION 13.5 PAYMENTS ON SECURITIES PERMITTED.
Except as expressly provided in this Article, nothing contained in this
Article shall affect the obligation of the Company to make, or prevent the
Company from making, payments of the principal of, or premium, if any, or
interest (including Liquidated Damages, if any) on the Securities in accordance
with the provisions hereof and thereof, or shall prevent the Trustee or any
Paying Agent from applying any moneys deposited with it hereunder to the payment
of the principal of, or premium, if any, or interest (including Liquidated
Damages, if any) on the Securities.
SECTION 13.6 EFFECTUATION OF SUBORDINATION BY TRUSTEE.
Each Holder of Securities, by such Holder's acceptance thereof,
authorizes and directs the Trustee on such Holder's behalf to take such action
as may be necessary or appropriate to effectuate the subordination provided in
this Article and appoints the Trustee such Holder's attorney-in-fact for any and
all such purposes.
Upon any payment or distribution of assets of the Company referred to
in this Article, the Trustee and the Holders of the Securities shall be entitled
to rely upon any order or decree made by any court of competent jurisdiction in
which any such dissolution, winding up, liquidation or reorganization proceeding
affecting the affairs of the Company is pending or upon a certificate of the
trustee in bankruptcy, receiver, assignee for the benefit of creditors,
liquidating trustee or agent or other Person making any payment or distribution,
delivered to the Trustee or to the Holders of the Securities, for the purpose of
ascertaining the Persons entitled to participate in such payment or
distribution, and as to other facts pertinent to the right of such Persons under
this Article, and if such evidence is not furnished, the Trustee may defer any
payment to such Persons pending judicial determination as to the right of such
Persons to receive such payment.
SECTION 13.7 KNOWLEDGE OF TRUSTEE.
Notwithstanding the provision of this Article or any other provisions
of this Indenture, the Trustee shall not be charged with knowledge of the
existence of any Senior Debt, of any default in payment of principal of,
premium, if any, or interest on, rent or other payment obligation in respect of
any Senior Debt, or of any facts which would prohibit the making of any payment
of moneys to or by the Trustee, or the taking of any other action by the
Trustee, unless a Responsible Officer of the Trustee having responsibility for
the administration of the trust established by this Indenture shall have
received written notice thereof from the Company, any Holder of Securities, any
Paying or Conversion Agent of the Company or the holder or representative of any
class of Senior Debt, and, prior to the receipt of any such written notice, the
Trustee shall be entitled in all respects to assume that no such default or
facts exist; provided, however, that unless on the third Business Day prior to
the date upon which by the terms hereof any such moneys may become payable for
any purpose the Trustee shall have received the notice provided for in this
Section 13.7, then, anything herein contained to the contrary
85
notwithstanding, the Trustee shall have full power and authority to receive such
moneys and 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 date.
SECTION 13.8 TRUSTEE'S RELATION TO SENIOR DEBT.
The Trustee shall be entitled to all the rights set forth in this
Article with respect to any Senior Debt at the time held by it, to the same
extent as any other holder of Senior Debt and nothing in this Indenture shall
deprive the Trustee of any of its rights as such holder.
Nothing contained in this Article shall apply to claims of or payments
to the Trustee under or pursuant to Section 5.8 hereof.
With respect to the holders of Senior Debt, the Trustee undertakes to
perform or to observe only such of its covenants and obligations as are
specifically set forth in this Article, 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 be deemed to owe any fiduciary duty
to the holders of Senior Debt and the Trustee shall not be liable to any holder
of Senior Debt if it shall pay over or deliver to Holders, the Company or any
other Person moneys or assets to which any holder of Senior Debt shall be
entitled by virtue of this Article or otherwise.
SECTION 13.9 RIGHTS OF HOLDERS OF SENIOR DEBT NOT IMPAIRED.
No right of any present or future holder of any Senior Debt to enforce
the subordination herein shall at any time or in any way be prejudiced or
impaired by any act or failure to act on the part of the Company 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.
SECTION 13.10 MODIFICATION OF TERMS OF SENIOR DEBT.
Any renewal or extension of the time of payment of any Senior Debt or
the exercise by the holders of Senior Debt of any of their rights under any
instrument creating or evidencing Senior Debt, including without limitation the
waiver of default thereunder, may be made or done all without notice to or
assent from the Holders of the Securities or the Trustee.
No compromise, alteration, amendment, modification, extension, renewal
or other change of, or waiver, consent or other action in respect of, any
liability or obligation under or in respect of, or of any of the terms,
covenants or conditions of any indenture or other instrument under which any
Senior Debt is outstanding or of such Senior Debt, whether or not such release
is in accordance with the provisions or any applicable document, shall in any
way alter or affect any of the provisions of this Article or of the Securities
relating to the subordination thereof.
SECTION 13.11 CERTAIN CONVERSIONS NOT DEEMED PAYMENT.
For the purposes of this Article 13 only:
86
(1) the issuance and delivery of junior securities
upon conversion of Securities in accordance with Article 12
hereof shall not be deemed to constitute a payment or
distribution on account of the principal of, premium, if any,
or interest (including Liquidated Damages, if any) on
Securities or on account of the purchase or other acquisition
of Securities, and
(2) the payment, issuance or delivery of cash (except
in satisfaction of fractional shares pursuant to Section 12.3
hereof), property or securities (other than junior securities)
upon conversion of a Security shall be deemed to constitute
payment on account of the principal of, premium, if any, or
interest (including Liquidated Damages, if any) on such
Security.
For the purposes of this Section 13.11, the term "junior securities" means:
(a) shares of any common stock of the Company or
(b) other 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 that, the Securities are so
subordinated as provided in this Article.
Nothing contained in this Article 13 or elsewhere in this Indenture or in the
Securities is intended to or shall impair, as among the Company, its creditors
(other than holders of Senior Debt) and the Holders of Securities, the right,
which is absolute and unconditional, of the Holder of any Security to convert
such Security in accordance with Article 12 hereof.
87
ARTICLE 14
OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 14.1 TRUST INDENTURE ACT CONTROLS.
This Indenture is subject to the provisions of the TIA which are
required to be part of this Indenture, and shall, to the extent applicable, be
governed by such provisions.
SECTION 14.2 NOTICES.
Any notice or communication to the Company or the Trustee is duly given
if in writing and delivered in person or mailed by first-class mail to the
address set forth below:
(a) if to the Company:
Inhale Therapeutic Systems, Inc.
000 Xxxxxxxxxx Xxxx
Xxx Xxxxxx, Xxxxxxxxxx
Attention: Xxxxxxx X. Xxxxx, Esq.
with a copy to:
Xxxxxx Godward LLP
0000 Xxxx Xxxx Xxxx
Xxxxxxxx #0, Xxxxx 000
Xxxxx Xxxx, Xxxxxxxxxx 00000
Attention: Xxxx X. Xxxxxxx, Esq.
(b) if to the Trustee:
Chase Manhattan Bank and Trust Company, National
Association
000 Xxxxxxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Corporate Trust Administration
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 such notice or
communication shall not affect its sufficiency with respect to other Holders.
88
If a notice or communication is mailed or sent in the manner provided
above within the time prescribed, it is duly given as of the date it is mailed,
whether or not the addressee receives it, except that notice to the Trustee
shall only be effective upon receipt thereof by the Trustee.
If the Company mails a notice or communication to Holders, it shall
mail a copy to the Trustee at the same time.
SECTION 14.3 COMMUNICATION BY HOLDERS WITH OTHER HOLDERS.
Holders may communicate pursuant to Section 312(b) of the TIA with
other Holders with respect to their rights under the Securities or this
Indenture. The Company, the Trustee, the Registrar and anyone else shall have
the protection of Section 312(c) of the TIA.
SECTION 14.4 ACTS OF HOLDERS OF SECURITIES.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Holders of Securities may be embodied in and evidenced by:
(1) one or more instruments of substantially similar tenor
signed by such Holders in person or by agent or proxy duly appointed in
writing;
(2) the record of Holders of Securities voting in favor
thereof, either in person or by proxies duly appointed in writing, at
any meeting of Holders of Securities duly called and held in accordance
with the provisions of Article 8; or
(3) a combination of such instruments and any such record.
Except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments or record or both are delivered to
the Trustee and, where it is hereby expressly required, to the Company. Such
instrument or instruments and record (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the "Act" of the Holders
of Securities signing such instrument or instruments and so voting at such
meeting. Proof of execution of any such instrument or of a writing appointing
any such agent or proxy, or of the holding by any Person of a Security, shall be
sufficient for any purpose of this Indenture and (subject to Section 5.1 hereof)
conclusive in favor of the Trustee and the Company if made in the manner
provided in this Section. The record of any meeting of Holders of Securities
shall be proved in the manner provided in Section 8.6 hereof.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be provided in any manner which the Trustee reasonably
deems sufficient.
(c) The principal amount and serial numbers of Securities held by any
Person, and the date of such Person holding the same, shall be proved by the
Register.
(d) Any request, demand, authorization, direction, notice, consent,
election, waiver or other Act of the Holders of any Security shall bind every
future Holder of the same Security and
89
the Holder of every Security issued upon the registration of transfer thereof or
in exchange therefor or in lieu thereof in respect of anything done, omitted or
suffered to be done by the Trustee or the Company in reliance thereon, whether
or not notation of such action is made upon such Security.
SECTION 14.5 CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon an Opinion of Counsel, unless such
officer knows, or in the exercise of reasonable care should know, that the
Opinion of Counsel with respect to the matters upon which such certificate or
opinion is based is erroneous. Any such Opinion of Counsel may be based, insofar
as it relates to factual matters, upon a certificate or representations by, an
officer or officers of the Company stating that the information with respect to
such factual matters is in the possession of the Company, unless such counsel
knows, or in the exercise of reasonable care should know, that the certificate
or representations with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Upon any application or request by the Company to the Trustee to take
any action under any provision of this Indenture, the Company shall furnish to
the Trustee an Officers' Certificate stating that all conditions precedent, if
any, provided for in this Indenture relating to the proposed action have been
complied with and an Opinion of Counsel stating that in the opinion of such
Counsel all such conditions precedent, if any, have been complied with, except
that in the case of any such application or request as to which the furnishing
of such documents is specifically required by any provision of this Indenture
relating to such particular application or request, no additional certificate or
opinion need be furnished.
SECTION 14.6 STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
Each certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture shall include:
(1) a statement that each individual signing such
certificate or opinion on behalf of the Company has read such covenant
or condition and the definitions herein relating thereto;
90
(2) 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;
(3) a statement that, in the opinion of each such
individual, he has made such examination or investigation as is
necessary to enable him to express an informed opinion as to whether or
not such covenant or condition has been complied with; and
(4) a statement as to whether, in the opinion of each
such individual, such condition or covenant has been complied with.
SECTION 14.7 EFFECT OF HEADINGS AND TABLE OF CONTENTS.
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
SECTION 14.8 SUCCESSORS AND ASSIGNS.
All covenants and agreements in this Indenture by the Company shall
bind its successors and assigns, whether so expressed or not.
SECTION 14.9 SEPARABILITY CLAUSE.
In case any provision in this Indenture or the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
SECTION 14.10 BENEFITS OF INDENTURE.
Nothing contained in this Indenture or in the Securities, express or
implied, shall give to any Person, other than the parties hereto and their
successors hereunder, the holders of Senior Debt and the Holders of Securities,
any benefit or legal or equitable right, remedy or claim under this Indenture.
SECTION 14.11 GOVERNING LAW.
THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 14.12 COUNTERPARTS.
This instrument may be executed in any number of counterparts, each of
which when so executed shall be deemed to be an original but all such
counterparts shall together constitute but one and the same instrument.
91
SECTION 14.13 LEGAL HOLIDAYS.
In any case where any Interest Payment Date, Redemption Date or Stated
Maturity of any Security or the last day on which a Holder of a Security has a
right to convert such Security shall not be a Business Day at any Place of
Payment or Place of Conversion, then (notwithstanding any other provision of
this Indenture or of the Securities) payment of interest (including Liquidated
Damages, if any) or principal or premium, if any, or conversion of the
Securities, need not be made at such Place of Payment or Place of Conversion on
such day, but may be made on the next succeeding Business Day at such Place of
Payment or Place of Conversion with the same force and effect as if made on the
Interest Payment Date or Redemption Date or at the Stated Maturity or on such
last day for conversion, provided, that in the case that payment is made on such
succeeding Business Day, no interest shall accrue on the amount so payable for
the period from and after such Interest Payment Date, Redemption Date or Stated
Maturity, as the case may be.
SECTION 14.14 RECOURSE AGAINST OTHERS.
No recourse for the payment of the principal of or premium, if any, or
interest (including Liquidated Damages, if any) on any Security, or for any
claim based thereon or otherwise in respect thereof, shall be had against any
incorporator, shareholder, officer or director, as such, past, present or
future, of the Company or of any successor corporation, whether by virtue of any
constitution, statute or rule of law or by the enforcement of any assessment or
penalty or otherwise, all such liability being, by the acceptance thereof and as
part of the consideration for the issue thereof, expressly waived and released.
92
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed all as of the day and year first above written.
INHALE THERAPEUTIC SYSTEMS, INC.
By:
----------------------------------
Name:
Title:
CHASE MANHATTAN BANK AND TRUST
COMPANY, NATIONAL ASSOCIATION
By:
----------------------------------
Name:
Title:
93
EXHIBIT A
FORM OF SECURITY
[FACE OF SECURITY]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY ("DTC") TO INHALE THERAPEUTIC SYSTEMS, INC. (OR ITS
SUCCESSOR) OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, CONVERSION OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
IN SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND
ANY PAYMENT HEREON 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 SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.(1)
THE SECURITY EVIDENCED BY THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS, AND MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO,
OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH IN THE
FOLLOWING SENTENCE. BY ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT IT IS
A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT; (2) AGREES THAT IT WILL NOT WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE OF
THIS SECURITY RESELL OR OTHERWISE TRANSFER THE SECURITY EVIDENCED HEREBY OR THE
COMMON STOCK ISSUABLE UPON CONVERSION OF SUCH SECURITY EXCEPT (A) TO THE COMPANY
OR ANY SUBSIDIARY THEREOF, (B) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE
WITH RULE 144A UNDER THE SECURITIES ACT, (C) PURSUANT TO THE EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR (D)
PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE
SECURITIES ACT AND WHICH CONTINUES TO BE EFFECTIVE AT THE TIME OF SUCH TRANSFER;
AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THE SECURITY
EVIDENCED HEREBY IS TRANSFERRED (OTHER THAN A TRANSFER PURSUANT TO CLAUSE 2(D)
ABOVE) A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH
ANY TRANSFER OF THE SECURITY EVIDENCED HEREBY WITHIN TWO YEARS AFTER THE
ORIGINAL ISSUANCE OF SUCH SECURITY (OTHER THAN A TRANSFER PURSUANT TO CLAUSE
(2)(D) ABOVE), THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE
REVERSE HEREOF RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS
CERTIFICATE TO THE TRUSTEE (OR ANY SUCCESSOR TRUSTEE, AS APPLICABLE). IF THE
PROPOSED TRANSFER IS
-------------------------
(1) This legend should be included only if the Security is issued in global form
94
PURSUANT TO CLAUSE (2)(C) ABOVE, THE HOLDER MUST, PRIOR TO SUCH TRANSFER,
FURNISH TO THE TRUSTEE (OR ANY SUCCESSOR TRUSTEE, AS APPLICABLE), SUCH
CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS THE COMPANY MAY
REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. THIS LEGEND WILL BE REMOVED UPON THE EARLIER
OF THE TRANSFER OF THE SECURITY EVIDENCED HEREBY PURSUANT TO CLAUSE (2)(D) ABOVE
OR THE EXPIRATION OF TWO YEARS FROM THE ORIGINAL ISSUANCE OF THE SECURITY
EVIDENCED HEREBY. AS USED HEREIN, THE TERMS "UNITED STATES" AND "U.S. PERSON"
HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.
A-2
INHALE THERAPEUTIC SYSTEMS, INC.
5% Convertible Subordinated Note due 2007
CUSIP NO. 457 191AD 6
No.________ $___________
INHALE THERAPEUTIC SYSTEMS, INC., a Delaware corporation (the
"Company", which term includes any successor corporation under the Indenture
hereinafter referred to), for value received, hereby promises to pay to ,
or its registered assigns, the principal sum of U.S. Dollars ($ )
on February 8, 2007.
Interest Payment Dates: February 8 and August 8, commencing
August 8, 2000
Regular Record Dates: January 24 and July 24
Reference is hereby made to the further provisions of this
Security set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
A-3
IN WITNESS WHEREOF, the Company has caused this Security to be
duly executed manually or by facsimile by its duly authorized officers.
Dated: February 8, 2000 INHALE THERAPEUTIC SYSTEMS, INC.
By:
----------------------------------
Name:
Title:
By:
---------------------------------
Name:
Title:
Trustee's Certificate of Authentication
This is one of the 5% Convertible Subordinated
Notes due 2007 described in the within-named
Indenture.
CHASE MANHATTAN BANK AND TRUST
COMPANY, NATIONAL ASSOCIATION,
as Trustee
By:
---------------------------
Authorized Signatory
Dated: __________, 2000
A-4
[REVERSE OF SECURITY]
INHALE THERAPEUTIC SYSTEMS, INC.
5% Convertible Subordinated Note due 2007
Capitalized terms used herein but not defined shall have the meanings
assigned to them in the Indenture referred to below unless otherwise indicated.
1. Principal and Interest.
Inhale Therapeutic Systems, Inc., a Delaware corporation (the
"Company") promises to pay interest on the principal amount of this Security at
the Interest Rate from the date of issuance until repayment at Maturity,
redemption or repurchase. The Company will pay interest on this Security
semiannually in arrears on February 8 and August 8 of each year (each an
"Interest Payment Date"), commencing August 8, 2000.
Interest on the Securities shall be computed (i) for any full
semiannual period for which a particular Interest Rate is applicable on the
basis of a 360-day year of twelve 30-day months and (ii) for any period for
which a particular Interest Rate is applicable shorter than a full semiannual
period for which interest is calculated, on the basis of a 30-day month and, for
such periods of less than a month, the actual number of days elapsed over a
30-day month.
A Holder of any Security at the close of business on a Regular Record
Date shall be entitled to receive interest on such Security on the corresponding
Interest Payment Date. A Holder of any Security which is converted after the
close of business on a Regular Record Date and prior to the corresponding
Interest Payment Date (other than any Security whose Maturity is prior to such
Interest Payment Date) shall be entitled to receive interest on the principal
amount of such Security, notwithstanding the conversion of such Security prior
to such Interest Payment Date. However, any such Holder which surrenders any
such Security for conversion during the period between the close of business on
such Regular Record Date and ending with the opening of business on the
corresponding Interest Payment Date shall be required to pay the Company an
amount equal to the interest on the principal amount of such Security so
converted, which is payable by the Company to such Holder on such Interest
Payment Date, at the time such Holder surrenders such Security for conversion.
Notwithstanding the foregoing, any such Holder which surrenders for conversion
any Security which has been called for redemption by the Company in a notice of
redemption given by the Company pursuant to Section 10.5 of the Indenture shall
be entitled to receive (and retain) such interest and need not pay the Company
an amount equal to the interest on the principal amount of such Security so
converted at the time such Holder surrenders such Security for conversion.
In accordance with the terms of the Resale Registration Rights
Agreement, dated February 8, 2000, between the Company and Xxxxxxx Xxxxx & Co.,
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated, Deutsche Bank Securities
Inc., Xxxxxx Brothers Inc. and U.S. Bancorp Xxxxx Xxxxxxx Inc., during the first
90 days following a Registration Default (as defined in the
A-5
Resale Registration Rights Agreement), the Interest Rate borne by the Securities
shall be increased by 0.25% on:
(A) May 9, 2000, if the shelf registration statement (the
"Shelf Registration Statement") is not filed prior to or on May 8,
2000;
(B) August 7, 2000, if the Shelf Registration Statement is not
declared effective by the Securities and Exchange Commission prior to
or on August 4, 2000;
(C) the day after the fifth Business Day after the Shelf
Registration Statement, previously declared effective, ceases to be
effective or fails to be usable, if a post-effective amendment (or
report filed pursuant to the Exchange Act) that cures the Shelf
Registration Statement is not filed with the Securities and Exchange
Commission during such five Business Day period; or
(D) the day following the 45th or 60th day, as the case may
be, of any period that the prospectus contained in the Shelf
Registration Statement has been suspended, if such suspension has not
been terminated.
From and after the 91st day following such Registration Default, the Interest
Rate borne by the Securities shall be increased by 0.50%. In no event shall the
Interest Rate borne by the Securities be increased by more than 0.50%.
Any amount of additional interest will be payable in cash semiannually,
in arrears, on each Interest Payment Date and will cease to accrue on the date
the Registration Default is cured. The Holder of this Security is entitled to
the benefits of the Resale Registration Rights Agreement.
2. Method of Payment.
Interest on any Security which is payable, and is punctually paid or
duly provided for, on any Interest Payment Date shall be paid to the person in
whose name that Security (or one or more Predecessor Securities) is registered
at the close of business on the Regular Record Date for such interest.
Principal of, and premium, if any, and interest on, Global Securities
will be payable to the Depositary in immediately available funds.
Principal and premium, if any, on Physical Securities will be payable
at the office or agency of the Company maintained for such purpose, initially
the Corporate Trust Office of the Trustee. Interest on Physical Securities will
be payable by (i) U.S. Dollar check drawn on a bank in The City of New York
mailed to the address of the Person entitled thereto as such address shall
appear in the Register, or (ii) upon application to the Registrar not later than
the relevant Record Date by a Holder of an aggregate principal amount in excess
of $5,000,000, wire transfer in immediately available funds.
A-6
3. Paying Agent and Registrar.
Initially, Chase Manhattan Bank and Trust Company, National
Association, the Trustee under the Indenture, will act as Paying Agent and
Registrar. The Company may change the Paying Agent or Registrar without notice
to any Holder.
4. Indenture.
The Company issued this Security under an Indenture, dated as of
February 8, 2000 (the "Indenture"), between the Company and Chase Manhattan Bank
and Trust Company, National Association, as trustee (the "Trustee"). The terms
of the Security include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939, as amended ("TIA").
This Security is subject to all such terms, and Holders are referred to the
Indenture and the TIA for a statement of all such terms. To the extent permitted
by applicable law, in the event of any inconsistency between the terms of this
Security and the terms of the Indenture, the terms of the Indenture shall
control.
5. Provisional Redemption.
The Securities may be redeemed at the election of the Company, as a
whole or from time to time in part or any date, at any time prior to February 8,
2003 (a "Provisional Redemption"), at a Redemption Price equal to $1,000 per
$1,000 principal amount of the Securities plus accrued and unpaid interest, if
any, to but excluding the date of redemption (the "Provisional Redemption Date")
if (i) the Closing Price of the Common Stock has exceeded 150% of the Conversion
Price (as may be adjusted from time to time) then in effect for at least 20
trading Days in any consecutive 30-Trading Day period ending on the Trading Day
prior to the date of mailing of the provisional notice of redemption upon not
less than 20 nor more than 60 days notice (the "Notice Date'), and (ii) a
registration statement covering resales of the Securities and Common Stock
issuable upon the conversion thereof is effective and available for use and is
expected to remain effective for the 30 days following the Provisional
Redemption Date.
Upon any such Provisional Redemption, the Company shall make an
additional payment in cash (the "Make-Whole Payment") to holders of the
Securities called for redemption, including those Securities converted into
Common Stock between the Notice Date and the Provisional Redemption Date, in an
amount equal to $137.93 per $1,000 principal amount of the Securities, less the
amount of any interest actually paid on the Securities before the Notice Date.
6. Optional Redemption.
Except as provided above, this Security is not redeemable prior to
February 8, 2003. This Security may be redeemed in whole or in part, upon not
less than 20 nor more than 60 days' notice, at any time on or after February 8,
2003, at the option of the Company, at the Redemption Prices (expressed as
percentages of the principal amount) set forth below, plus any interest accrued
but unpaid to the Redemption Date.
During the Twelve Months
A-7
Commencing Redemption Prices
---------- -----------------
February 8, 2003.............................................. 102.90%
February 8, 2004.............................................. 102.10%
February 8, 2005.............................................. 101.40%
February 8, 2006.............................................. 100.70%
Securities in original denominations larger than $1,000 may be redeemed
in part. If any Security selected for partial redemption is converted in part
before termination of the conversion right with respect to the portion of the
Security so selected, the converted portion of such Security shall be deemed to
be the portion selected for redemption (provided, however, that the Holder of
such Security so converted and deemed redeemed shall not be entitled to any
additional interest payment as a result of such deemed redemption than such
Holder would have otherwise been entitled to receive upon conversion of such
Security). Securities which have been converted during a selection of Securities
to be redeemed may be treated by the Trustee as Outstanding for the purpose of
such selection.
On and after the Redemption Date, interest ceases to accrue on
Securities or portions of Securities called for redemption, unless the Company
defaults in the payment of the Redemption Price.
Notice of redemption will be given by the Company to the Holders as
provided in the Indenture.
7. Repurchase Right Upon a Change of Control.
If a Change in Control occurs, the Holder of Securities, at the
Holder's option, shall have the right, in accordance with the provisions of the
Indenture, to require the Company to repurchase the Securities (or any portion
of the principal amount hereof that is at least $1,000 or an integral multiple
thereof, provided that the portion of the principal amount of this Security to
be Outstanding after such repurchase is at least equal to $1,000) at the
Repurchase Price in cash, plus any interest accrued and unpaid to the Repurchase
Date.
Subject to the conditions provided in the Indenture, the Company may
elect to pay the Repurchase Price by delivering a number of shares of Common
Stock equal to (i) the Repurchase Price divided by (ii) 95% of the average of
the Closing Prices per share for the five consecutive Trading Days immediately
preceding and including the third Trading Day prior to the Repurchase Date.
No fractional shares of Common Stock will be issued upon repurchase of
any Securities. Instead of any fractional share of Common Stock which would
otherwise be issued upon conversion of such Securities, the Company shall pay a
cash adjustment as provided in the Indenture.
A-8
A Company Notice will be given by the Company to the Holders as
provided in the Indenture. To exercise a repurchase Right, a Holder must deliver
to the Trustee a written notice as provided in the Indenture.
8. Conversion Rights.
Subject to and upon compliance with the provisions of the Indenture,
the Holder of Securities is entitled, at such Holder's option, at any time
before the close of business on February 8, 2007, to convert the Holder's
Securities (or any portion of the principal amount hereof which is $1,000 or an
integral multiple thereof), at the principal amount thereof or of such portion,
into duly authorized, fully paid and nonassessable shares of Common Stock of the
Company at the Conversion Price in effect at the time of conversion.
In the case of a Security (or a portion thereof) called for redemption,
such conversion right in respect of the Security (or such portion thereof) so
called, shall expire at the close of business on the second Business Day
preceding the Redemption Date, unless the Company defaults in making the payment
due upon redemption. In the case of a Change of Control for which the Holder
exercises its Repurchase Right with respect to a Security (or a portion
thereof), such conversion right in respect of the Security (or portion thereof)
shall expire at the close of business on the Business Day preceding the
Repurchase Date.
The Conversion Price shall be initially equal to $76.71 per share of
Common Stock. The Conversion Price shall be adjusted under certain circumstances
as provided in the Indenture.
To exercise the conversion right, the Holder must surrender the
Security (or portion thereof) duly endorsed or assigned to the Company or in
blank, at the office of the Conversion Agent, accompanied by a duly signed
conversion notice to the Company. Any Security surrendered for conversion during
the period from the close of business on any Regular Record Date to the opening
of business on the corresponding Interest Payment Date (other than any Security
whose Maturity is prior to such Interest Payment Date), shall also be
accompanied by payment in New York Clearing House funds or other funds
acceptable to the Company of an amount equal to the interest payable on such
Interest Payment Date on the principal amount of the Securities being
surrendered for conversion.
No fractional shares of Common Stock will be issued upon conversion of
any Securities. Instead of any fractional share of Common Stock which would
otherwise be issued upon conversion of such Securities, the Company shall pay a
cash adjustment as provided in the Indenture.
9. Subordination.
The Indebtedness evidenced by this Security is, to the extent and in
the manner provided in the Indenture, subordinated and subject in right of
payment to the prior payment in full of all amounts then due on all Senior Debt
of the Company, and this Security is issued subject to such provisions of the
Indenture with respect thereto. Each Holder of this Security, by accepting the
same, (a) agrees to and shall be bound by such provisions, (b) authorizes and
directs the Trustee
A-9
on such Holder's behalf to take such action as may be necessary or appropriate
to effectuate the subordination so provided and (c) appoints the Trustee such
Holder's attorney-in-fact for any and all such purposes.
10. Denominations; Transfer; Exchange.
The Securities are issuable in registered form, without coupons, in
denominations of $1,000 and integral multiples of $1,000 in excess thereof. A
Holder may register the transfer or exchange of Securities in accordance with
the Indenture. The Registrar may require a Holder, among other things, to
furnish appropriate endorsements and transfer documents and the Company may
require a Holder to pay any taxes and fees required by law or permitted by the
Indenture.
In the event of a redemption in part, the Company will not be required
(a) to register the transfer of, or exchange, Securities for a period of 15 days
immediately preceding the date notice is given identifying the serial numbers of
the Securities called for such redemption, or (b) to register the transfer of,
or exchange, any such Securities, or portion thereof, called for redemption.
In the event of redemption, conversion or repurchase of the Securities
in part only, a new Security or Securities for the unredeemed, unconverted or
unrepurchased portion thereof will be issued in the name of the Holder hereof.
11. Persons Deemed Owners.
The registered Holder of this Security shall be treated as its owner
for all purposes.
12. Unclaimed Money.
The Trustee and the Paying Agent shall pay to the Company any money
held by them for the payment of principal, premium, if any, or interest that
remains unclaimed for two years after the date upon which such payment shall
have become due. After payment to the Company, Holders entitled to the money
must look to the Company for payment as general creditors unless an applicable
abandoned property law designates another Person, and all liability of the
Trustee and such Paying Agent with respect to such money shall cease.
13. Discharge Prior to Redemption or Maturity.
Subject to certain conditions contained in the Indenture, the Company
may discharge its obligations under the Securities and the Indenture if (1) (a)
all of the Outstanding Securities shall become due and payable at their
scheduled Maturity within one year or (b) all of the Outstanding Securities are
scheduled for redemption within one year, and (2) the Company shall have
deposited with the Trustee money and/or U.S. Government Obligations sufficient
to pay the principal of, and premium, if any, and interest on, all of the
Outstanding Securities on the date of Maturity or redemption, as the case may
be.
A-10
14. Amendment; Supplement; Waiver.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities under the Indenture at
any time by the Company and the Trustee with the consent of the Holders of a
majority in aggregate principal amount of the Outstanding Securities (or such
lesser amount as shall have acted at a meeting pursuant to the provisions of the
Indenture). The Indenture also contains provisions permitting the Holders of
specified percentages in principal amount of the Securities at the time
Outstanding, on behalf of the Holders of all the Securities, to waive compliance
by the Company with certain provisions of the Indenture and certain past
defaults under the Indenture and their consequences. Any such consent or waiver
by the Holder of this Security shall be conclusive and binding upon such Holder
and upon all future Holders of this Security and of any Security issued upon
registration of transfer hereof or in exchange herefor or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Security or
such other Security.
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of and premium, if any, and
interest (including Liquidated Damages, if any) on this Security at the times,
places and rate, and in the coin or currency, herein prescribed or to convert
this Security (or pay cash in lieu of conversion) as provided in the Indenture.
15. Defaults and Remedies.
The Indenture provides that an Event of Default with respect to the
Securities occurs when any of the following occurs:
(a) the Company defaults in the payment of the principal of or
premium, if any, on any of the Securities when it becomes due and
payable at Maturity, upon redemption or exercise of a Repurchase Right
or otherwise, whether or not such payment is prohibited by the
subordination provisions of Article 13 of the Indenture;
(b) the Company defaults in the payment of interest on any of
the Securities when it becomes due and payable and such default
continues for a period of 30 days, whether or not such payment is
prohibited by the subordination provisions of Article 13 of the
Indenture;
(c) the Company fails to perform or observe any other term,
covenant or agreement contained in the Securities or the Indenture and
such default continues for a period of 60 days after written notice of
such failure is given as specified in the Indenture;
(d) (i) the Company fails to make any payment by the end of
the applicable grace period, if any, after the maturity of any
Indebtedness for borrowed money in an amount in excess of $5,000,000
(provided that such failure shall not constitute an Event of Default if
(1) the Company determines, in good faith, that a lessor under a lease
described in clause (3)(a) of the definition of Indebtedness set forth
in the
A-11
Indenture breached a covenant under the lease and the Company has given
notice of the breach to the lessor and the Trustee and (2) as a result
of the breach, the Company withholds payment under the lease) (a
"Default Exception"), or (ii) there is an acceleration of any
Indebtedness for borrowed money in an amount in excess of $5,000,000
because of a default with respect to such Indebtedness (other than a
Default Exception) without such Indebtedness having been discharged or
such acceleration having been cured, waived, rescinded or annulled, in
the case of either clause (i) or (ii) above, for a period of 30 days
after written notice is given to the Company as specified in the
Indenture; and
(e) there are certain events of bankruptcy, insolvency or
reorganization of the Company.
If an Event of Default shall occur and be continuing, the principal of
all the Securities may be declared due and payable in the manner and with the
effect provided in the Indenture.
16. Authentication.
This Security shall not be valid until the Trustee (or authenticating
agent) executes the certificate of authentication on the other side of this
Security.
17. 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 U/G/M/A (= Uniform Gifts to Minors
Act).
18. Additional Rights of Holders of Transfer Restricted Securities.
In addition to the rights provided to Holders under the Indenture,
Holders of Transfer Restricted Securities shall have all the rights set forth in
the Registration Rights Agreement.
19. CUSIP Numbers.
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company has caused CUSIP numbers to be
printed on this Security and the Trustee may use CUSIP numbers in notices of
redemption as a convenience to Holders. No representation is made as to the
accuracy of such numbers either as printed on this Security or as contained in
any notice of redemption and reliance may be placed only on the other
identification numbers placed thereon.
20. Governing Law.
The Indenture and this Security shall be governed by, and construed in
accordance with, the law of the State of New York.
A-12
21. Successor Corporation.
In the event a successor corporation assumes all the obligations of the
Company under this Security, pursuant to the terms hereof and of the Indenture,
the Company will be released from all such obligations.
A-13
ASSIGNMENT FORM
To assign this Security, fill in the form below and have your signature
guaranteed: (I) or (we) assign and transfer this Security to:
--------------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint_________________________________________________________
to transfer this Security on the books of the Company. The agent may substitute
another to act for him.
Dated:_____________________ Your Name:
---------------------------------------
(Print your name exactly as it appears
on the face of this Security)
Your Signature:
----------------------------------
(Sign exactly as your name appears
on the face of this Security)
Signature Guarantee*:
----------------------------
* PARTICIPANT IN A RECOGNIZED SIGNATURE GUARANTEE MEDALLION PROGRAM (OR
OTHER SIGNATURE GUARANTOR ACCEPTABLE TO THE TRUSTEE).
A-14
In connection with any transfer of this Security occurring prior to the date
which is the earlier of the end of the period referred to in Rule 144(k) under
the Securities Act, the undersigned confirms that without utilizing any general
solicitation or general advertising that:
[Check One]
[ ] (a) this Security is being transferred in compliance with the exemption from
registration under the Securities Act of 1933, as amended, provided by Rule 144A
thereunder.
or
[ ] (b) this Security is being transferred other than in accordance with (a)
above and documents are being furnished which comply with the conditions of
transfer set forth in this Security and the Indenture.
If none of the foregoing boxes is checked, the Trustee or other Registrar shall
not be obligated to register this Security in the name of any Person other than
the Holder hereof unless the conditions to any such transfer of registration set
forth herein and in Sections 2.7, 2.8 and 2.9 of the Indenture shall have been
satisfied.
Dated:______________ -------------------------------------------------
NOTICE: The signature to this assignment must
correspond with the name as written upon the face
of the within-mentioned instrument in every
particular, without alteration or any change
whatsoever.
Signature Guarantee:
-------------------------------------------------
Signature must be guaranteed by a participant in
a recognized signature guaranty medallion program
or other signature guarantor acceptable to the
Trustee.
A-15
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this
Security for its own account or an account with respect to which it exercises
sole investment discretion, in each case for investment and not with a view to
distribution, and that it and any such account is a "Qualified Institutional
Buyer" within the meaning of Rule 144A under the Securities Act of 1933 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.
Dated:_________________ -----------------------------------------------
NOTICE: To be executed by an executive officer
A-16
CONVERSION NOTICE
TO: INHALE THERAPEUTIC SYSTEMS, INC.
000 Xxxxxxxxxx Xxxx
Xxx Xxxxxx, Xxxxxxxxxx 00000
The undersigned registered owner of this Security hereby irrevocably
exercises the option to convert this Security, or the portion hereof (which is
$1,000 principal amount or an integral multiple thereof) below designated, into
shares of Common Stock in accordance with the terms of the Indenture referred to
in this Security, and directs that the shares issuable and deliverable upon such
conversion, together with any check in payment for fractional shares and any
Securities representing any unconverted principal amount hereof, be issued and
delivered to the registered holder hereof unless a different name has been
indicated below. If shares or any portion of this Security not converted are to
be issued in the name of a person other than the undersigned, the undersigned
will pay all transfer taxes payable with respect thereto. Any amount required to
be paid to the undersigned on account of interest (including Liquidated Damages,
if any) accompanies this Security.
Dated:_____________________ Your Name:
---------------------------------------
(Print your name exactly as it appears
on the face of this Security)
Your Signature:
----------------------------------
(Sign exactly as your name appears
on the face of this Security)
Signature Guarantee*:
----------------------------
Social Security or other Taxpayer
Identification Number:
---------------------------
Principal amount to be converted (if less than all): $
* PARTICIPANT IN A RECOGNIZED SIGNATURE GUARANTEE MEDALLION PROGRAM (OR
OTHER SIGNATURE GUARANTOR ACCEPTABLE TO THE TRUSTEE).
A-17
Fill in for registration of shares (if to be issued) and Securities (if to be
delivered) other than to and in the name of the registered holder:
---------------------------------------------
(Name)
---------------------------------------------
(Street Address)
---------------------------------------------
(City, State and Zip Code)
A-18
NOTICE OF EXERCISE OF REPURCHASE RIGHT
TO: INHALE THERAPEUTIC SYSTEMS, INC.
000 Xxxxxxxxxx Xxxx
Xxx Xxxxxx, Xxxxxxxxxx 00000
The undersigned registered owner of this Security hereby irrevocably
acknowledges receipt of a notice from Inhale Therapeutic Systems, Inc. (the
"Company") as to the occurrence of a Change of Control with respect to the
Company and requests and instructs the Company to repay the entire principal
amount of this Security, or the portion thereof (which is $1,000 principal
amount or an integral multiple thereof) below designated, in accordance with the
terms of the Indenture referred to in this Security, together with interest
(including Liquidated Damages, if any) accrued and unpaid to, but excluding,
such date, to the registered holder hereof, in cash.
Dated:_____________________ Your Name:
---------------------------------------
(Print your name exactly as it appears
on the face of this Security)
Your Signature:
----------------------------------
(Sign exactly as your name appears
on the face of this Security)
Signature Guarantee*:
----------------------------
Social Security or other Taxpayer
Identification Number:
---------------------------
Principal amount to be converted (if less than all): $
* PARTICIPANT IN A RECOGNIZED SIGNATURE GUARANTEE MEDALLION PROGRAM (OR
OTHER SIGNATURE GUARANTOR ACCEPTABLE TO THE TRUSTEE).
A-19
SCHEDULE OF EXCHANGES FOR PHYSICAL SECURITIES(2)
The following exchanges of a part of this Global Security for
Physical Securities have been made:
Date of Exchange Amount of decrease in Amount of increase in Principal Amount of this Signature of authorized
---------------- Principal Amount of this Principal Amount of this Global Security following of Trustee officer
Global Security Global Security such decrease (or -----------------------
------------------------ ------------------------ increase)
--------------------------
-------------------------
(2) This schedule should be included only if the Security is issued in
global form.
