EXHIBIT 4.2
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COMPUTER NETWORK TECHNOLOGY CORPORATION
Issuer
AND
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Trustee
INDENTURE
Dated as of ______________
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CROSS-REFERENCE TABLE*
Trust Indenture Act Section Indenture Section
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310(a)(1).................................................. 7.10
(a)(2).................................................. 7.10
(a)(3).................................................. N.A.
(a)(4).................................................. N.A.
(a)(5).................................................. 7.10
(b)..................................................... 7.9
(c)..................................................... N.A.
311(a)..................................................... 7.14
(b)..................................................... 7.14
(c)..................................................... N.A.
312(a)..................................................... 2.5(a); 5.1
(b)..................................................... 16.4
(c)..................................................... 16.4
313(a)..................................................... 7.2
(b)(1).................................................. N.A.
(b)(2).................................................. 7.2
(c)..................................................... 7.2
(d)..................................................... 7.2
314(a)..................................................... 4.8(a); 4.6
(b)..................................................... N.A.
(c)(1).................................................. 16.6
(c)(2).................................................. 16.6
(c)(3).................................................. N.A.
(d)..................................................... N.A.
(e)..................................................... 16.7
(f)..................................................... N.A.
315(a)..................................................... 7.1(b)
(b)..................................................... 6.8
(c)..................................................... 7.1(a)
(d)..................................................... 7.1(c)
(e)..................................................... 6.9
316(a)(last sentence)...................................... 8.4
(a)(1)(A)............................................... 6.7
(a)(1)(B)............................................... 6.7
(a)(2).................................................. N.A.
(b)..................................................... 6.4
(c)..................................................... 9.2
317(a)..................................................... 6.2
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(b)..................................................... 4.4
318(a)..................................................... 16.9; 16.10
N.A. means Not applicable.
..........................................................
* This Cross-Reference Table is not part of the Indenture.
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TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS..............................................................1
Section 1.1 Definitions................................................1
Section 1.2 Incorporation by Reference of Trust Indenture Act..........6
Section 1.3 Rules of Construction......................................7
ARTICLE II
ISSUE, DESCRIPTION, EXECUTION, REGISTRATION
AND EXCHANGE OF NOTES....................................................7
Section 2.1 Designation, Amount and Issue of Notes.....................7
Section 2.2 Form of Notes..............................................7
Section 2.3 Date and Denomination of Notes; Payments of Interest.......8
Section 2.4 Execution of Notes........................................10
Section 2.5 Exchange and Registration of Transfer of Notes;
Depositary................................................10
Section 2.6 Mutilated, Destroyed, Lost or Stolen Notes................13
Section 2.7 Temporary Notes...........................................14
Section 2.8 Cancellation of Notes Paid, Etc...........................14
Section 2.9 CUSIP Numbers.............................................14
ARTICLE III
REDEMPTION AND REPURCHASE OF NOTES......................................15
Section 3.1 Right of Redemption.......................................15
Section 3.2 Notice of Redemption; Selection of Notes..................15
Section 3.3 Payment of Notes Called for Redemption....................17
Section 3.4 Conversion Arrangement on Call for Redemption.............17
Section 3.5 Repurchase of Notes Upon a Change of Control..............18
ARTICLE IV
PARTICULAR COVENANTS OF THE COMPANY.....................................20
Section 4.1 Payment of Principal, Premium and Interest................20
Section 4.2 Maintenance of Office or Agency...........................20
Section 4.3 Appointments to Fill Vacancies in Trustee's Office........21
Section 4.4 Provisions as to Paying Agent.............................21
Section 4.5 Corporate Existence.......................................22
Section 4.6 Commission and Other Reports..............................22
Section 4.7 Stay, Extension and Usury Laws............................22
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Section 4.8 Compliance Statement; Notice of Defaults..................23
Section 4.9 Taxes.....................................................23
ARTICLE V
NOTEHOLDERS'LISTS.......................................................23
Section 5.1 Noteholders'Lists.........................................23
ARTICLE VI
DEFAULTS AND REMEDIES...................................................24
Section 6.1 Events of Default.........................................24
Section 6.2 Payments of Notes on Default; Suit Therefor...............25
Section 6.3 Application of Monies Collected by Trustee................27
Section 6.4 Proceedings by Noteholder.................................28
Section 6.5 Proceedings by Trustee....................................28
Section 6.6 Remedies Cumulative and Continuing........................29
Section 6.7 Direction of Proceedings and Waiver of Defaults by
Majority of Noteholders...................................29
Section 6.8 Notice of Defaults........................................29
Section 6.9 Undertaking to Pay Costs..................................29
ARTICLE VII
CONCERNING THE TRUSTEE..................................................30
Section 7.1 Duties and Responsibilities of Trustee....................30
Section 7.2 Reports by Trustee to Holders.............................31
Section 7.3 Reliance on Documents, Opinions, Etc......................31
Section 7.4 No Responsibility for Recitals, Etc.......................33
Section 7.5 Trustee, Paying Agents, Conversion Agents or Registrar
May Own Notes.............................................33
Section 7.6 Monies to Be Held in Trust................................33
Section 7.7 Compensation and Expenses of Trustee......................33
Section 7.8 Officers'Certificate as Evidence..........................33
Section 7.9 Conflicting Interests of Trustee..........................34
Section 7.10 Eligibility of Trustee....................................34
Section 7.11 Resignation or Removal of Trustee.........................34
Section 7.12 Acceptance by Successor Trustee...........................35
Section 7.13 Successor, by Merger, Etc.................................36
Section 7.14 Limitation on Rights of Trustee as Creditor...............36
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ARTICLE VIII
CONCERNING THE NOTEHOLDERS..............................................36
Section 8.1 Action by Noteholders.....................................36
Section 8.2 Proof of Execution by Noteholders.........................37
Section 8.3 Who Are Deemed Absolute Owners............................37
Section 8.4 Company-Owned Notes Disregarded...........................37
Section 8.5 Revocation of Consents, Future Holders Bound..............38
ARTICLE IX
NOTEHOLDERS'MEETINGS....................................................38
Section 9.1 Purposes for Which Meetings May be Called.................38
Section 9.2 Manner of Calling Meetings; Record Date...................38
Section 9.3 Call of Meeting by Company or Noteholders.................39
Section 9.4 Who May Attend and Vote at Meetings.......................39
Section 9.5 Manner of Voting at Meetings and Record To Be Kept........39
Section 9.6 Exercise of Rights of Trustee and Noteholders Not
To Be Hindered or Delayed.................................40
ARTICLE X
SUPPLEMENTAL INDENTURES.................................................40
Section 10.1 Supplemental Indentures Without Consent of Noteholders....40
Section 10.2 Supplemental Indentures With Consent of Noteholders.......42
Section 10.3 Effect of Supplemental Indentures.........................43
Section 10.4 Notation on Notes.........................................43
Section 10.5 Evidence of Compliance of Supplemental Indenture
To Be Furnished Trustee...................................43
ARTICLE XI
CONSOLIDATION, MERGER, SALE, CONVEYANCE,
TRANSFER AND LEASE......................................................43
Section 11.1 Company May Consolidate, Etc. on Certain Terms............43
Section 11.2 Successor Company To Be Substituted.......................44
Section 11.3 Opinion of Counsel To Be Given to Trustee.................44
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ARTICLE XII
SATISFACTION AND DISCHARGE OF INDENTURE;
UNCLAIMED MONIES........................................................44
Section 12.1 Legal Defeasance and Covenant Defeasance of the Notes.....44
Section 12.2 Termination of Obligations upon Cancellation of
the Notes.................................................46
Section 12.3 Survival of Certain Obligations...........................47
Section 12.4 Acknowledgment of Discharge by Trustee....................47
Section 12.5 Application of Trust Assets...............................47
Section 12.6 Repayment to the Company; Unclaimed Money.................47
Section 12.7 Reinstatement.............................................48
ARTICLE XIII
IMMUNITY OF INCORPORATORS, SHAREHOLDERS,
OFFICERS AND DIRECTORS..................................................48
Section 13.1 Indenture and Notes Solely Corporate Obligations..........48
ARTICLE XIV
CONVERSION OF NOTES.....................................................48
Section 14.1 Right to Convert..........................................48
Section 14.2 Exercise of Conversion Privilege; Issuance of Common
Stock on Conversion; No Adjustment for Interest
or Dividends..............................................49
Section 14.3 Cash Payments in Lieu of Fractional Shares................50
Section 14.4 Conversion Price..........................................51
Section 14.5 Adjustment of Conversion Price............................51
Section 14.6 Effect of Reclassification, Consolidation, Merger
or Sale...................................................58
Section 14.7 Taxes on Shares Issued....................................59
Section 14.8 Reservation of Shares; Shares to Be Fully Paid; Listing
of Common Stock..................59
Section 14.9 Responsibility of Trustee.................................60
Section 14.10 Notice to Holders Prior to Certain Actions................60
ARTICLE XV
SUBORDINATION............................................................61
Section 15.1 Agreement to Subordinate..................................61
Section 15.2 Certain Definitions.......................................61
Section 15.3 Liquidation; Dissolution; Bankruptcy......................62
Section 15.4 Default on Senior Indebtedness............................63
Section 15.5 When Distribution Must Be Paid Over.......................63
Section 15.6 Notice by Company.........................................64
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Section 15.7 Subrogation...............................................64
Section 15.8 Relative Rights...........................................64
Section 15.9 Subordination May Not Be Impaired by Company..............64
Section 15.10 Distribution or Notice to Representative..................65
Section 15.11 Rights of Trustee and Paying Agent........................65
Section 15.12 Authorization to Effect Subordination.....................66
Section 15.13 Conversions Not Deemed Payment............................66
Section 15.14 Amendments................................................66
ARTICLE XVI
MISCELLANEOUS PROVISIONS................................................66
Section 16.1 Provisions Binding on Company's Successors................66
Section 16.2 Official Acts by Successor Company........................66
Section 16.3 Addresses for Notices, Etc................................66
Section 16.4 Communications by Holders with Other Holders..............67
Section 16.5 Governing Law.............................................67
Section 16.6 Evidence of Compliance with Conditions Precedent;
Certificates to Trustee...................................67
Section 16.7 Legal Holidays............................................68
Section 16.8 No Security Interest Created..............................68
Section 16.9 Trust Indenture Act.......................................68
Section 16.10 Trust Indenture Act Controls..............................68
Section 16.11 Benefits of Indenture.....................................68
Section 16.12 Table of Contents, Headings, Etc..........................68
Section 16.13 Authenticating Agent......................................68
Section 16.14 Execution in Counterparts.................................69
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INDENTURE, dated as of _____________, ____, between COMPUTER NETWORK
TECHNOLOGY CORPORATION, a Minnesota corporation (the "Company"), and
_______________________, a ________ banking corporation with trust powers (the
"Trustee").
WHEREAS, for its lawful corporate purposes, the Company has duly authorized
the issuance of its Convertible Subordinated Notes with the title set forth on
Schedule I (the "Notes"), in the aggregate amount set forth on Schedule I, and
to provide the terms and conditions upon which the Notes are to be
authenticated, issued and delivered, the Company has duly authorized the
execution and delivery of this Indenture;
NOW, THEREFORE, in consideration of the terms and conditions hereof and of
the purchase and acceptance of the Notes by the holders thereof, the Company
agrees with the Trustee for the equal and proportionate benefit of the
respective holders from time to time of the Notes (except as otherwise provided
below) as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Definitions. The terms defined in this Section 1.1 (except as
otherwise expressly provided herein or unless the context otherwise requires)
for all purposes of this Indenture and of any indenture supplemental hereto,
shall have the respective meanings specified in this Section 1.1. The words
"herein," "hereof," "hereunder" and words of similar import refer to this
Indenture as a whole and not to any particular Article or Section.
Affiliate of any specified person shall mean any other person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified person. For the purpose 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.
Board of Directors shall mean the Board of Directors of the Company or a
committee of such Board of Directors duly authorized to act for it hereunder.
Board Resolution shall mean a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
Business Day shall mean a day, other than a Saturday, a Sunday or a day on
which the banking institutions in the State and City of New York or in the State
of Minnesota are authorized or obligated by law or executive order to close or a
day that is declared a national, New York or Minnesota state holiday.
Capital Stock of any person shall mean any and all shares, interests,
participations or other equivalents (however designated) of such person's
corporate stock or any and all
equivalent ownership interests in a person (other than a corporation) whether
now outstanding or issued after the date hereof.
Change of Control shall have the meaning specified in Section 3.5(d).
Change of Control Notice shall have the meaning specified in Section
3.5(b).
Change of Control Offer shall have the meaning specified in Section 3.5(a).
Change of Control Purchase Date shall have the meaning specified in Section
3.5(a).
Closing Price with respect to conversion of the Notes shall have the
meaning specified in Section 14.5(g).
Commission shall mean the Securities and Exchange Commission, as from time
to time constituted, created under the Exchange Act or, if at any time after the
execution of this instrument such Commission is not existing and performing the
duties now assigned to it under the Trust Indenture Act, the body performing
such duties at such time.
Common Stock shall mean any stock of any class of the Company that does not
have a 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 that is not subject to redemption by the Company. Subject to the
provisions of Section 14.6, however, shares issuable on conversion of Notes
shall include only shares of the class designated as common stock of the Company
at the date of this Indenture or shares of any class or classes resulting from
any reclassification or reclassifications thereof and that do not have a
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 that 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 that the total
number of shares of such class resulting from all such reclassification bears to
the total number of shares of all such classes resulting from all such
reclassifications.
Company shall mean Compute Network Technology Corporation, a Minnesota
corporation and, subject to the provisions of Article XI, shall include its
successors and assigns.
Conversion Price shall have the meaning specified in Section 14.4.
Corporate Trust Office of the Trustee, or other similar term, shall mean
the office of the Trustee at which at any particular time its corporate trust
business shall be principally administered, which office is, at the date as of
which this Indenture is dated, located at the address set forth on Schedule I.
Current Market Price with respect to conversion of the Notes shall have the
meaning specified in Section 14.5(g).
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Custodian shall mean the Trustee, as custodian with respect to the Notes in
global form, or any successor entity thereto.
Default shall mean any event that is, or after notice or passage of time,
or both, would be, an Event of Default.
Defaulted Interest shall have the meaning specified in Section 2.3.
Definitive Notes or in definitive form shall have the meanings specified in
Section 2.2, any reference to Notes "in definitive form" shall mean definitive
Notes, and any reference to securities "in definitive form" shall mean
definitive Notes or Common Stock as the context requires.
Depositary shall mean, with respect to the Notes issuable or issued in
whole or in part in global form, the person specified in Section 2.5(b) as the
Depositary with respect to the Notes, until a successor shall have been
appointed and become such pursuant to the applicable provisions of this
Indenture, and thereafter, "Depositary" shall mean or include such successor.
Designated Senior Indebtedness shall have the meaning specified in Section
15.2.
Employee Benefit Plan shall mean any "employee benefit plan" within the
meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended, that the Company maintains, contributes to or has any obligation to
or liability for.
Event of Default shall mean any event specified in Sections 6.1(a) through
(f).
Exchange Act shall mean the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
Fair market value with respect to conversion of the Notes shall have the
meaning specified in Section 14.5(g).
Fiscal Year means the annual period adopted by the Company as its fiscal
year for financial reporting and other purposes. The current fiscal year of the
Company is the annual period ending on December 31.
Global Note shall mean any and all Notes in global form.
Indenture shall mean this instrument as originally executed or, if amended
or supplemented as herein provided, as so amended or supplemented.
Make-Whole Payment shall have the meaning specified in Section 3.1(a).
Nonpayment Default shall have the meaning specified in Section 15.4(b).
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Note or Notes shall mean any Note or Notes, as the case may be,
authenticated and delivered under this Indenture.
Noteholder or holder as applied to any Note, or other similar terms (but
excluding the term "beneficial holder"), shall mean any person in whose name at
the time a particular Note is registered on the Note registrar's books.
Note register shall have the meaning specified in Section 2.5(a).
Notice Date shall have the meaning specified in Section 3.1(a).
Officers' Certificate when used with respect to the Company, shall mean a
certificate signed by the Chief Executive Officer, the President, the Chief
Operating Officer or the Chief Financial Officer and any Treasurer or Secretary
or any Assistant Treasurer or Assistant Secretary of the Company, that is
delivered to the Trustee. Each such certificate shall include the statements
provided for in Section 16.6 if and to the extent required by the provisions of
such Section.
Opinion of Counsel shall mean an opinion in writing signed by legal
counsel, who may be an employee of or counsel to the Company or other counsel
acceptable to the Trustee, that is delivered to the Trustee. Each such opinion
shall include the statements provided for in Section 16.6 if and to the extent
required by the provisions of such Section.
Outstanding with reference to Notes as of any particular time shall mean,
subject to the provisions of Section 8.4, all Notes authenticated and delivered
by the Trustee under this Indenture, except:
(a) Notes theretofore canceled by the Trustee or delivered to the
Trustee for cancellation;
(b) Notes, or portions thereof, for which monies in the necessary
amount shall have been deposited in trust with the Trustee for payment or
redemption; provided that if such Notes are to be redeemed prior to the
maturity thereof, notice of such redemption shall have been given pursuant
to Article III or provisions satisfactory to the Trustee shall have been
made for giving such notice;
(c) Notes paid pursuant to Section 2.6 hereof or Notes in lieu of or
in substitution for which other Notes shall have been authenticated and
delivered pursuant to the terms of Section 2.6, unless proof satisfactory
to the Trustee is presented that any such Notes are held by bona fide
holders in due course; and
(d) Notes converted into Common Stock pursuant to Article XIV and
Notes not deemed outstanding pursuant to Section 3.2.
Payment Blockage Notice shall have the meaning specified in Section
15.4(b).
Payment Default shall have the meaning specified in Section 15.4(a).
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Person shall mean an individual, a corporation, a limited liability
company, an association, a partnership, a joint venture, a joint stock company,
a trust, an unincorporated organization or a government or an agency or a
political subdivision thereof.
Predecessor Note of any particular Note shall mean every previous Note
evidencing all or a portion of the same debt as that evidenced by such
particular Note; and, for purposes of this definition, any Note authenticated
and delivered under Section 2.6 in lieu of a lost, destroyed or stolen Note
shall be deemed to evidence the same debt as the lost, destroyed or stolen Note.
Provisional Redemption shall have the meaning specified in Section 3.1(a).
Provisional Redemption Date shall have the meaning specified in Section
3.1(a).
Record Date with respect to conversion of the Notes shall have the meaning
specified in Section 14.5(g).
Representative shall have the meaning specified in Section 15.2.
Responsible Officer shall mean, with respect to the Trustee, an officer of
the Trustee assigned and duly authorized by the Trustee to administer its
corporate trust matters at the Corporate Trust Office of the Trustee.
Securities Act shall mean the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
Senior Indebtedness shall have the meaning specified in Section 15.2.
Subsidiary of any specified person shall mean (i) a corporation a majority
of whose Capital Stock with voting power under ordinary circumstances to elect
directors is at the time directly or indirectly owned by such person or (ii) any
other person (other than a corporation) in which such person or such person and
a subsidiary or subsidiaries of such person or a subsidiary or subsidiaries of
such person directly or indirectly, at the date of determination thereof, has at
least majority ownership.
Successor Company shall have the meaning specified in Section 11.1.
Trading Day shall have the meaning specified in Section 14.5(g).
Trust Indenture Act shall mean the Trust Indenture Act of 1939, as amended,
as it was in force on the date of execution of this Indenture, except as
provided in Sections 10.3 and 14.6; provided that if the Trust Indenture Act of
1939 is amended after the date hereof, the term "Trust Indenture Act" shall
mean, to the extent required by such amendment, the Trust Indenture Act of 1939
as so amended.
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Trustee shall mean U.S. Bank Trust National Association, its successors and
any corporation resulting from or surviving any consolidation or merger to which
it or its successors may be a party and any successor trustee at the time
serving as successor trustee hereunder.
U.S. Government Obligations shall mean securities that are (i) direct
obligations of the United States of America for the payment of which its full
faith and credit is pledged or (ii) obligations of a person controlled or
supervised by, and acting as an agency or instrumentality of, the United States
of America the timely payment of which is unconditionally guaranteed as a full
faith and credit obligation by the United States of America, which, in either
case, are not callable or redeemable at the option of the issuer thereof, and
shall also include a depository receipt issued by a bank or trust company as
custodian with respect to any such U.S. Government Obligation or a specific
payment of principal or interest on any such U.S. Government Obligation held by
such custodian for the account of the holder of such depository receipt;
provided that (except as required by law) such custodian is not authorized to
make any deduction from the amount payable to the holder of such depository
receipt from any amount received by such custodian in respect of the U.S.
Government Obligation or the specific payment of principal of or interest on the
U.S. Government Obligation evidenced by such depository receipt.
Voting Stock of any person shall mean stock of the class or classes
pursuant to which the holders thereof have the general voting power under
ordinary circumstances to elect at least a majority of the board of directors,
managers or trustees of such person (irrespective of whether or not at the time
stock of any other class or classes shall have or might have voting power by
reason of the happening of any contingency).
The definitions of certain other terms are as specified in Section 12.1.
Section 1.2 Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the Trust Indenture Act,
the provision is incorporated by reference in, and made a part of, this
Indenture.
The following Trust Indenture Act terms used in this Indenture have the
following meanings:
indenture securities means the Notes;
indenture security holder means a Noteholder;
indenture to be qualified means this Indenture;
indenture trustee or institutional trustee means the Trustee; and
obligor on the Notes means the Company and any successor obligor under the
Trust Indenture Act.
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All other terms used in this Indenture that are defined by the Trust
Indenture Act, defined by a Trust Indenture Act reference to another statute or
defined by Commission rule under the Trust Indenture Act have the meanings so
assigned to them.
Section 1.3 Rules of Construction.
Unless the context otherwise requires:
(a) a term has the meaning assigned to it;
(b) an accounting term not otherwise defined has the meaning assigned
to it in accordance with generally accepted accounting principles;
(c) "or" is not exclusive;
(d) provisions apply to successive events and transactions; and
(e) words in the singular include the plural, and in the plural
include the singular.
ARTICLE II
ISSUE, DESCRIPTION, EXECUTION, REGISTRATION
AND EXCHANGE OF NOTES
Section 2.1 Designation, Amount and Issue of Notes. The Notes shall have
the designation set forth on Schedule I. The Notes are not to exceed the
aggregate principal amount set forth on Schedule I upon the execution of this
Indenture, or from time to time thereafter, may be executed by the Company and
delivered to the Trustee for authentication, and the Trustee shall thereupon
authenticate and make available for delivery said Notes upon the written order
of the Company, signed by its (a) Chief Executive Officer, President, Chief
Operating Officer or Chief Financial Officer and (b) any Treasurer or Secretary
or any Assistant Secretary, without any further action by the Company hereunder.
Section 2.2 Form of Notes. (a) The Notes, including the form of Trustee's
certificate of authentication, shall be in the form annexed hereto as Exhibit A,
and any Notes represented by a global Note shall be in the form annexed hereto
as Exhibit B.
(b) Any global Note shall represent such of the outstanding Notes as shall
be specified therein and shall provide that it shall represent the aggregate
amount of outstanding Notes from time to time endorsed thereon and that the
aggregate amount of outstanding Notes represented thereby may from time to time
be increased or reduced to reflect transfers or exchanges permitted hereby. Any
endorsement of a global Note to reflect the amount of any increase or decrease
in the amount of outstanding Notes represented thereby shall be made by the
Trustee or the Custodian, at the direction of the Trustee, in such manner and
upon written instructions given by the holder of such Notes in accordance with
this Indenture. Payment of
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principal of and interest and premium, if any, on any global Note shall be made
in accordance with the provisions of Section 2.3.
(c) Any of the Notes may have such letters, numbers or other marks of
identification and such notations, legends and endorsements as the Company
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 stock
exchange on which the Notes may be listed, or to conform to usage.
Every global Note authenticated and delivered hereunder shall bear a legend
in substantially the following form, in capital letters and bold-face type:
THIS NOTE IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A
NOMINEE THEREOF. THIS NOTE MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A
SECURITY REGISTERED, AND NO TRANSFER OF THIS NOTE IN WHOLE OR IN PART MAY BE
REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE
THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.
If the Depositary is The Depository Trust Company, the global Note
authenticated and delivered hereunder shall also bear a legend in substantially
the following form, in capital letters and bold-face type:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED SIGNATORY OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE COMPANY OR ITS
AGENT FOR REGISTRATION OR TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO. , HAS AN INTEREST HEREIN.
The terms and provisions contained in the forms of Notes attached as
Exhibits A and B hereto shall constitute, and are hereby expressly made, a part
of this Indenture and to the extent applicable, the Company and the Trustee, by
their execution and delivery of this Indenture, expressly agree to such terms
and provisions and to be bound thereby.
Section 2.3 Date and Denomination of Notes; Payments of Interest. The Notes
shall be issuable in registered form without coupons in denominations of $1,000
principal amount and integral multiples thereof. Every Note shall be dated the
date of its authentication, shall bear interest from the dates set forth on
Schedule I and payable on the dates set forth on Schedule I
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("Interest Payment Date"), at the interest rate specified in the forms of Notes
attached as Exhibits A and B.
The person in whose name any Note (or its Predecessor Note) is registered
at the close of business on any record date with respect to any interest payment
date (including any Note that is converted after the record date and on or
before the interest payment date) shall be entitled to receive the interest
payable on such interest payment date notwithstanding the cancellation of such
Note upon any transfer, exchange or conversion subsequent to the record date and
prior to such interest payment date. Unless other arrangements are made,
interest will be paid by check mailed to the address of such person as it
appears on the Note register; provided that, with respect to any global Note or
any holder of Notes with an aggregate principal amount equal to or in excess of
$5,000,000, at the request (such request to include appropriate wire
instructions) of such holder in writing to the Trustee on or before the record
date preceding any interest payment date, interest on the global Note and such
holder's Notes, as applicable, shall be paid by wire transfer in immediately
available funds to an account in the continental United States and any such
request shall be deemed a continuing request unless and until revoked in
writing. The term "record date" with respect to any interest payment date shall
mean the dates specified as such on Schedule I.
None of the Company, the Trustee or any paying agent shall have any
responsibility or liability for any aspect of the records relating to or payment
made on account of beneficial ownership interests in the global Notes or for
maintaining, supervising or reviewing any records relating to such beneficial
ownership interests.
Interest on the Notes shall be computed on the basis of a 360-day year
composed of twelve 30-day months.
Any interest on any Note that is payable but is not punctually paid or duly
provided for on any applicable Interest Payment Date (herein called "Defaulted
Interest") shall cease to be payable to the Noteholder on the relevant record
date by virtue of his having been such Noteholder; and such Defaulted Interest
shall be paid by the Company, at its election in each case, as provided in
clause (a) or (b) below:
(a) The Company may elect to make payment of any Defaulted Interest to the
persons in whose names the Notes (or their respective Predecessor Notes) are
registered at the close of business on a special record date for the payment of
such Defaulted Interest, which shall be fixed in the following manner. The
Company shall notify the Trustee in writing of the amount of Defaulted Interest
to be paid on each Note and the date of the payment (which shall be not less
than 25 days after the receipt by the Trustee of such notice, unless the Trustee
shall consent to an earlier date) and, at the same time, the Company shall
deposit with the Trustee an amount of money equal to the aggregate amount to be
paid in respect of such Defaulted Interest or shall make arrangements
satisfactory to the Trustee for such deposit prior to the date of the proposed
payment, such money when deposited to be held in trust for the benefit of the
persons entitled to such Defaulted Interest as in this clause provided.
Thereupon, the Trustee shall fix a special record date for the payment of such
Defaulted Interest, which shall be not more than 15 days and not less than 10
days prior to the date of the payment and not less than 10 days after the
9
receipt by the Trustee of the notice of the proposed payment. The Trustee shall
promptly notify the Company of such special record date and, in the name and at
the expense of the Company, shall cause notice of the payment of such Defaulted
Interest and the special record date therefor to be mailed, first-class postage
prepaid, to each Noteholder at his address as it appears in the Note register,
not less than 10 days prior to such special record date. Notice of the proposed
payment of such Defaulted Interest and the special record date therefor having
been so mailed, such Defaulted Interest shall be paid to the persons in whose
names the Notes (or their respective Predecessor Notes) were registered at the
close of business on such special record date and shall no longer be payable
pursuant to the following clause (b).
(b) The Company may make payment of any Defaulted Interest in any other
lawful manner not inconsistent with the requirements of any securities exchange
on which the Notes may be listed, and upon such notice as may be required by
such exchange, if, after notice given by the Company to the Trustee of the
proposed payment pursuant to this clause, such manner of payment shall be deemed
practicable by the Trustee.
Section 2.4 Execution of Notes. The Notes shall be signed in the name and
on behalf of the Company by its Chief Executive Officer, President, Chief
Operating Officer or Chief Financial Officer and attested by the signature of
its Treasurer, Secretary or any of its Assistant Secretaries or Assistant
Treasurers (any of which signatures may be printed, engraved or otherwise
reproduced thereon, by facsimile or otherwise). Only such Notes as shall bear
thereon a certificate of authentication substantially in the form set forth on
the forms of Notes attached as Exhibits A and B hereto, manually executed by the
Trustee (or an authenticating agent appointed by the Trustee as provided by
Section 16.13), shall be entitled to the benefits of this Indenture or be valid
or obligatory for any purpose. Such certificate by the Trustee (or such an
authenticating agent) upon any Note executed by the Company shall be conclusive
evidence that the Note so authenticated has been duly authenticated and
delivered hereunder and that the holder is entitled to the benefits of this
Indenture.
In case any officer of the Company who shall have signed any of the Notes
shall cease to be such officer before the Notes so signed shall have been
authenticated and delivered by the Trustee, or disposed of by the Company, such
Notes nevertheless may be authenticated and delivered or disposed of as though
the person who signed such Notes had not ceased to be such officer of the
Company; and any Note may be signed on behalf of the Company by such persons as,
at the actual date of the execution of such Note, shall be the proper officers
of the Company, although at the date of the execution of this Indenture any such
person was not such an officer.
Section 2.5 Exchange and Registration of Transfer of Notes; Depositary.
(a) The Company shall cause to be kept at the Corporate Trust Office of the
Trustee a register (the register maintained in such office and in any other
office or agency of the Company designated pursuant to Section 4.2 being herein
sometimes collectively referred to as the "Note register") in which, subject to
such reasonable regulations as it may prescribe, the Company shall provide for
the registration of Notes and of transfers of Notes. Such Note register shall be
in written form or in any form capable of being converted into written form
within a reasonable period of time. The Trustee is hereby appointed "Note
registrar" for the
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purpose of registering Notes and transfers of Notes as herein provided. The
Company may appoint one or more co-registrars.
Upon surrender for registration of transfer of any Note to the Note
registrar or any co-registrar and satisfaction of the requirements for such
transfer set forth in this Section 2.5, the Company shall execute, and the
Trustee shall authenticate and make available for delivery, in the name of the
designated transferee or transferees, one or more new Notes of any authorized
denominations and of a like aggregate principal amount.
Notes may be exchanged for other Notes of any authorized denominations and
of a like aggregate principal amount, upon surrender of the Notes to be
exchanged at any such office or agency. Whenever any Notes are so surrendered
for exchange, the Company shall execute, and the Trustee shall authenticate and
make available for delivery, the Notes that the Noteholder making the exchange
is entitled to receive bearing certificate numbers not contemporaneously
outstanding.
All Notes presented or surrendered for registration of transfer or for
exchange shall (if so required by the Company, the Trustee, the Note registrar
or any co-registrar) be duly endorsed, or be accompanied by a written instrument
of transfer in form satisfactory to the Company, executed by the Noteholder
thereof or his attorney duly authorized in writing.
No service charge shall be charged to the Noteholder for any exchange or
registration of transfer of Notes, but the Company may require payment of a sum
sufficient to cover any tax, assessments or other governmental charges that may
be imposed in connection therewith.
None of the Company, the Trustee, the Note registrar or any co-registrar
shall be required to exchange or register a transfer of (i) any Notes for a
period of 15 days next preceding the mailing of a notice of redemption, (ii) any
Notes called for redemption or, if a portion of any Note is selected or called
for redemption, such portion thereof selected or called for redemption, (iii)
any Notes surrendered for conversion or, if a portion of any Note is surrendered
for conversion, such portion thereof surrendered for conversion or (iv) any
Notes surrendered for repurchase pursuant to Section 3.5 or, if a portion of any
Note is surrendered for repurchase pursuant to Section 3.5, such portion thereof
surrendered for repurchase pursuant to Section 3.5.
All Notes issued upon any transfer or exchange of Notes shall be the valid
obligations of the Company, evidencing the same debt and entitled to the same
benefits under this Indenture as the Notes surrendered upon such registration of
transfer or exchange.
(b) Each global Note authenticated under this Indenture shall be registered
in the name of the Depositary designated for such global Note or a nominee
thereof and delivered to such Depositary or a nominee thereof or custodian
therefor, and each such global Note shall constitute a single Note for all
purposes of this Indenture.
Notwithstanding any other provisions of this Indenture (other than the
provisions set forth in this Section 2.5(b)), a global Note may not be
transferred as a whole except by the Depositary to a nominee of the Depositary
or by a nominee of the Depositary to the Depositary or another
11
nominee of the Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary.
The Depositary shall be a clearing agency registered under the Exchange
Act.
The Company initially appoints The Depository Trust Company to act as
Depositary with respect to the global Notes. Initially, the global Notes shall
be issued to the Depositary, registered in the name of Cede & Co., as the
nominee of the Depositary, and deposited with the Trustee as Custodian for Cede
& Co.
Neither the Company nor the Trustee (or any registrar, paying agent or
conversion agent under this Indenture) shall have responsibility for the
performance by the Depositary or its participants or indirect participants of
their respective obligations under the rules and procedures governing their
operations.
If at any time the Depositary for the global Notes notifies the Company
that it is unwilling or unable to continue as Depositary for such Notes, the
Company may appoint a successor Depositary with respect to such Notes. If a
successor Depositary for the Notes is not appointed by the Company within 90
days after the Company receives such notice, the Company shall execute, and the
Trustee, upon receipt of an Officers' Certificate for the authentication and
delivery of Notes, shall authenticate and make available for delivery, Notes in
definitive form, in an aggregate principal amount equal to the principal amount
of the global Notes in exchange for such global Notes.
Definitive Notes issued in exchange for all or a part of a global Note
pursuant to this Section 2.5(b) shall be registered in such names and in such
authorized denominations as the Depositary, pursuant to instructions from its
direct or indirect participants or otherwise, shall instruct the Trustee. Upon
execution and authentication, the Trustee shall make available for delivery such
definitive Notes to the persons in whose names such definitive Notes are so
registered.
At such time as all interests in global Notes have been redeemed,
converted, repurchased or canceled, such global Notes shall be, upon receipt
thereof, canceled by the Trustee in accordance with standing procedures and
instructions existing between the Depositary and the Custodian. At any time
prior to such cancellation, if any interest in a global Note is exchanged for
definitive Notes, redeemed, repurchased, converted, canceled or transferred to a
transferee who receives definitive Notes therefor or any definitive Note is
exchanged or transferred for part of a global Note, the principal amount of such
global Note shall, in accordance with the standing procedures and instructions
existing between the Depositary and the Custodian, be reduced or increased, as
the case may be, and an endorsement shall be made on such global Note by the
Trustee or the Custodian, at the direction of the Trustee, to reflect such
reduction or increase.
The Company and the Trustee may for all purposes, including the making of
payments due on the Notes, deal with the Depositary as the authorized
representative of the Noteholders for the purposes of exercising the rights of
Noteholders hereunder. The rights of the owner of any beneficial interest in a
global Note shall be limited to those established by law and
12
agreements between such owner and depository participants; provided that no such
agreement shall give any rights to any person against the Company or the Trustee
without the written consent of the parties so affected. Multiple requests and
directions from and votes of, the Depositary as holder of notes in book entry
form with respect to any particular matter shall not be deemed inconsistent to
the extent they do not represent an amount of notes in excess of those held in
the name of the Depositary or its nominee.
Section 2.6 Mutilated, Destroyed, Lost or Stolen Notes. In case any Note
shall become mutilated or be destroyed, lost or stolen, the Company in its
discretion may execute, and upon its request, the Trustee or an authenticating
agent appointed by the Trustee shall authenticate and make available for
delivery a new Note bearing a number not contemporaneously outstanding in
exchange and substitution for the mutilated Note or in lieu of and in
substitution for the Note so destroyed, lost or stolen. The Company may charge
such applicant for the expenses of the Company in replacing a Note. In every
case the applicant for a substituted Note shall furnish to the Company, to the
Trustee and, if applicable, to such authenticating agent such security or
indemnity as may be required by them to save each of them harmless from any
loss, liability, cost or expense caused by or connected with such substitution,
and in every case of destruction, loss or theft, the applicant shall also
furnish to the Company, to the Trustee and, if applicable, to such
authenticating agent evidence to their satisfaction of the destruction, loss or
theft of such Note and of the ownership thereof.
The Trustee or such authenticating agent may authenticate any such
substituted Note and deliver the same upon the receipt of such security or
indemnity as the Trustee, the Company and, if applicable, such authenticating
agent may require. Upon the issuance of any substituted Note, 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 connected
therewith. In case any Note that has matured or is about to mature or has been
called for redemption or is about to be repurchased or converted into Common
Stock shall become mutilated or be destroyed, lost or stolen, the Company may,
instead of issuing a substitute Note, pay or authorize the payment of or convert
or authorize the conversion of the same (without surrender thereof, except in
the case of a mutilated Note), as the case may be, if the applicant for such
payment or conversion shall furnish to the Company, to the Trustee and, if
applicable, to such authenticating agent such security or indemnity as may be
required by them to save each of them harmless from any loss, liability, cost or
expense caused by or connected with such substitution, and in case of
destruction, loss or theft, evidence satisfactory to the Company, the Trustee
and, if applicable, any paying agent or conversion agent of the destruction,
loss or theft of such Note and of the ownership thereof.
Every substitute Note issued pursuant to the provisions of this Section 2.6
in lieu of any Note that is destroyed, lost or stolen shall constitute an
additional contractual obligation of the Company, whether or not the destroyed,
lost or stolen Note shall be enforceable by anyone, and shall be entitled to all
the benefits of (but shall be subject to all the limitations set forth in) this
Indenture equally and proportionately with any and all other Notes duly issued
hereunder. To the extent permitted by law, all Notes shall be held and owned
upon the express condition that the foregoing provisions are exclusive with
respect to the replacement or payment or conversion of mutilated, destroyed,
lost or stolen Notes and shall preclude any and all other rights or
13
remedies notwithstanding any law or statute existing or hereafter enacted to the
contrary with respect to the replacement or payment or conversion of negotiable
instruments or other securities without their surrender.
Section 2.7 Temporary Notes. Pending the preparation of definitive Notes,
the Company may execute and the Trustee or an authenticating agent appointed by
the Trustee shall, upon written request of the Company, authenticate and make
available for delivery temporary Notes (printed or lithographed). Temporary
Notes shall be issuable in any authorized denomination and shall be
substantially in the form of the definitive Notes but with such omissions,
insertions and variations as may be appropriate for temporary Notes, all as may
be determined by the Company. Every such temporary Note shall be executed by the
Company and authenticated by the Trustee or such authenticating agent upon the
same conditions and in substantially the same manner, and with the same effect,
as the definitive Notes. Without unreasonable delay the Company shall execute
and deliver to the Trustee or such authenticating agent definitive Notes (other
than in the case of Notes in global form) and thereupon any or all temporary
Notes (other than any such global Note) may be surrendered in exchange therefor,
at each office or agency maintained by the Company pursuant to Section 4.2 and
the Trustee or such authenticating agent shall authenticate and make available
for delivery in exchange for such temporary Notes an equal aggregate principal
amount of definitive Notes. Such exchange shall be made by the Company at its
own expense and without any charge therefor. Until so exchanged, the temporary
Notes shall in all respects be entitled to the same benefits and subject to the
same limitations under this Indenture as definitive Notes authenticated and
delivered hereunder.
Section 2.8 Cancellation of Notes Paid, Etc. All Notes surrendered for the
purpose of payment, redemption, repurchase, conversion, exchange or registration
of transfer shall, if surrendered to the Company, any paying agent, any Note
registrar or any conversion agent, be surrendered to the Trustee and promptly
canceled by it or, if surrendered directly to the Trustee, shall be promptly
canceled by it and no Notes shall be issued in lieu thereof except as expressly
permitted by any of the provisions of this Indenture. If required by the
Company, the Trustee shall return canceled Notes to the Company. If the Company
shall acquire any of the Notes, such acquisition shall not operate as a
redemption or satisfaction of the indebtedness represented by such Notes unless
and until the same are delivered to the Trustee for cancellation.
Section 2.9 CUSIP Numbers. The Company in issuing the Notes may use "CUSIP"
numbers (if then generally in use), and, if so, the Trustee shall use CUSIP
numbers in notices of redemption as a convenience to holders; provided that any
such notice may state that no representation is made as to the correctness of
such numbers either as printed on the Notes or as contained in any notice of a
redemption and that reliance may be placed only on the other identification
numbers printed on the Notes, and any such redemption shall not be affected by
any defect in or omission of such numbers. The Company shall promptly notify the
Trustee of any change in the CUSIP numbers.
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ARTICLE III
REDEMPTION AND REPURCHASE OF NOTES
Section 3.1 Right of Redemption.
(a) Provisional Redemption by the Company. The Notes may be redeemed by the
Company (a "Provisional Redemption"), in whole or in part, at any time prior to
the date set forth on Schedule I ("Early Redemption Date"), upon notice as set
forth in Section 3.2 of this Indenture, at a redemption price equal to $1,000
per $1,000 principal amount of Notes to be redeemed plus accrued and unpaid
interest, if any, to the date of redemption (the "Provisional Redemption Date")
if the closing price of the Common Stock shall have exceeded 150% of the
Conversion Price then in effect for at least 20 Trading Days within a period of
30 consecutive Trading Days ending on the Trading Day prior to the date of
mailing of the notice of redemption pursuant to Section 3.2 (the "Notice Date").
Upon any such Provisional Redemption, the Company shall make an additional
payment in cash (the "Make-Whole Payment") with respect to the Notes called for
Provisional Redemption to holders on the Notice Date in an amount per $1,000
principal amount of the Notes set forth on Schedule I, less the amount of any
interest actually paid on such Notes prior to the Notice Date. The Company shall
make the Make-Whole Payment on all Notes called for Provisional Redemption,
including any Notes converted into Common Stock pursuant to the terms hereof
after the Notice Date and prior to the Provisional Redemption Date.
(b) Optional Redemption by the Company. At any time on or after the dates
set forth on Schedule I ("Optional Redemption Date"), the Notes may be redeemed
at the Company's option, upon notice as set forth in Section 3.2, in whole at
any time or in part from time to time, at the optional redemption prices
(expressed as percentages of the principal amount), together with accrued and
unpaid interest to the date fixed for redemption, if redeemed on or after the
dates set forth on Schedule I.
Section 3.2 Notice of Redemption; Selection of Notes. In case the Company
shall desire to exercise the right to redeem all or, as the case may be, any
part of the Notes pursuant to Section 3.1, it shall fix a date for redemption
and, in the case of any redemption pursuant to Section 3.1, it or, at its
request accompanied by the proposed form of notice of redemption (which must be
received by the Trustee at least ten days prior to the date the Trustee is
requested to give notice as described below, unless a shorter period is agreed
to by the Trustee), the Trustee in the name of and at the expense of the
Company, shall mail or cause to be mailed a notice of such redemption at least
30 and not more than 60 days prior to the date fixed for redemption to the
holders of Notes so to be redeemed as a whole or in part at their last addresses
as the same appear on the Note register; provided that if the Company shall give
such notice, it shall also give such notice, and notice of the Notes to be
redeemed, to the Trustee. Such mailing shall be by first class mail. The notice,
if mailed in the manner herein provided, shall be conclusively presumed to have
been duly given, whether or not the holder receives such notice. In any case,
failure to give such notice by mail or any defect in the notice to the holder of
any Note designated for redemption as a whole or in part shall not affect the
validity of the proceedings for the redemption of any other Note.
15
Each such notice of redemption shall specify (a) the Notes to be redeemed
(including CUSIP numbers), (b) the aggregate principal amount of Notes to be
redeemed, (c) the date fixed for redemption, (d) the redemption price at which
Notes are to be redeemed, (e) the place or places of payment, (f) that payment
shall be made upon presentation and surrender of such Notes, (g) that interest
accrued to the date fixed for redemption and any Make-Whole Payment shall be
paid as specified in said notice and (h) that on and after said date, interest
thereon or on the portion thereof to be redeemed shall cease to accrue. Such
notice shall also state the current Conversion Price and the date on which the
right to convert such Notes or portions thereof into Common Stock shall expire.
If fewer than all the Notes are to be redeemed, the notice of redemption shall
identify the Notes to be redeemed. In case any Note is to be redeemed in part
only, the notice of redemption shall state the portion of the principal amount
thereof to be redeemed and shall state that on and after the date fixed for
redemption, upon surrender of such Note, a new Note or Notes in principal amount
equal to the unredeemed portion thereof shall be issued. Any such notice of
redemption must contain a specific statement by the Trustee that no
representation or warranty is being made as to the correctness of the CUSIP
number either as printed on the Notes or as contained in the notice of
redemption and that reliance may be placed only on the other identification
numbers printed on the Notes.
On or prior to the Business Day prior to the redemption date specified in
the notice of redemption given as provided in this Section 3.2, the Company
shall deposit with the Trustee or with one or more paying agents (or, if the
Company is acting as its own paying agent, set aside, segregate and hold in
trust as provided in Section 4.4) an amount of money sufficient to redeem on the
redemption date all the Notes so called for redemption (other than those
theretofore surrendered for conversion into Common Stock) at the appropriate
redemption price, together with accrued and unpaid interest to the date fixed
for redemption and any Make-Whole Payment. If any Note called for redemption is
converted pursuant hereto, any money deposited with the Trustee or any paying
agent or so segregated and held in trust for the redemption of such Note shall
be paid to the Company upon its request or, if then held by the Company, shall
be discharged from such trust.
If fewer than all the Notes are to be redeemed, the Company shall give the
Trustee written notice in the form of an Officers' Certificate not fewer than 45
days (or such shorter period of time as may be acceptable to the Trustee) prior
to the redemption date as to the aggregate principal amount of Notes to be
redeemed.
If fewer than all the Notes are to be redeemed, the Trustee shall select
the Notes or portions thereof to be redeemed (in principal amounts of $1,000 or
integral multiples thereof), by lot. If any Note selected for partial redemption
is converted in part after such selection, the converted portion of such Note
shall be deemed (so far as may be) to be the portion to be selected for
redemption. The Notes (or portions thereof) so selected shall be deemed duly
selected for redemption for all purposes hereof, notwithstanding that any such
Note is converted as a whole or in part before the mailing of the notice of
redemption.
Upon any redemption of less than all the Notes, the Company and the Trustee
may treat as outstanding any Notes surrendered for conversion during the period
of 15 days next preceding the mailing of a notice of redemption and need not
treat as outstanding any Note authenticated
16
and delivered during such period in exchange for the unconverted portion of any
Note converted in part during such period.
Section 3.3 Payment of Notes Called for Redemption. If notice of redemption
has been given as provided in Section 3.2, the Notes or portion of Notes with
respect to which such notice has been given shall, unless converted into Common
Stock pursuant to the terms hereof, become due and payable on the date and at
the place or places stated in such notice at the applicable redemption price,
together with interest thereon accrued to the date fixed for redemption and any
Make-Whole Payment, and on and after said date (unless the Company shall default
in the payment of such Notes at the redemption price, together with interest
thereon accrued to said date and any Make-Whole Payment), interest on the Notes
or portion of Notes so called for redemption shall cease to accrue, and such
Notes shall cease after the close of business on the Business Day next preceding
the date fixed for redemption to be convertible into Common Stock and, except as
provided in Sections 7.6 and 12.4, to be entitled to any benefit or security
under this Indenture, and the holders thereof shall have no right in respect of
such Notes except the right to receive the redemption price thereof and unpaid
interest thereon to the date fixed for redemption and any Make-Whole Payment. On
presentation and surrender of such Notes at the place of payment specified in
the notice, the said Notes or the specified portions thereof shall be paid and
redeemed by the Company at the applicable redemption price, together with
interest accrued thereon to the date fixed for redemption and any Make-Whole
Payment; provided that any semi-annual payment of interest becoming due on the
date fixed for redemption shall be payable to the holders of such Notes
registered as such on the relevant record date subject to the terms and
provisions of Section 2.3 hereof.
Upon presentation of any Note redeemed in part only, the Company shall
execute and the Trustee shall authenticate and make available for delivery to
the holder thereof, at the expense of the Company, a new Note or Notes, of
authorized denominations, in principal amount equal to the unredeemed portion of
the Notes so presented.
If any Note called for redemption shall not be so paid upon surrender
thereof for redemption, the principal and premium, if any, shall, until paid or
duly provided for, bear interest from the date fixed for redemption at the rate
borne by the Note and such Note shall remain convertible into Common Stock until
the principal and premium, if any, shall have been paid or duly provided for.
Section 3.4 Conversion Arrangement on Call for Redemption. In connection
with any redemption of Notes, the Company may arrange for the purchase and
conversion of any Notes by an agreement with one or more investment bankers or
other purchasers to purchase such Notes by paying to the Trustee in trust for
the Noteholders, on or prior to the Business Day prior to the date fixed for
redemption, an amount not less than the applicable redemption price, together
with interest accrued to the date fixed for redemption and any Make-Whole
Payment, of such Notes. Notwithstanding anything to the contrary contained in
this Article III, the obligation of the Company to pay the redemption price of
such Notes, together with interest accrued to the date fixed for redemption and
any Make-Whole Payment, shall be deemed to be satisfied and discharged to the
extent such amount is so paid by such purchasers. If such an agreement is
entered into, a copy of which shall be filed with the Trustee prior to the date
fixed for
17
redemption, any Notes not duly surrendered for conversion by the holders thereof
may, at the option of the Company, be deemed, to the fullest extent permitted by
law, acquired by such purchasers from such holders and (notwithstanding anything
to the contrary contained in Article XIV) surrendered by such purchasers for
conversion, all as of the time immediately prior to the close of business on the
date fixed for redemption (and the right to convert any such Notes shall be
deemed to have been extended through such time), subject to payment of the above
amount as aforesaid. At the direction of the Company, the Trustee shall hold and
dispose of any such amount paid to it in the same manner as it would monies
deposited with it by the Company for the redemption of Notes. Without the
Trustee's prior written consent, no arrangement between the Company and such
purchasers for the purchase and conversion of any Notes shall increase or
otherwise affect any of the powers, duties, responsibilities or obligations of
the Trustee as set forth in this Indenture, and the Company agrees to indemnify
the Trustee from, and hold it harmless against, any loss, liability or expense
arising out of or in connection with any such arrangement for the purchase and
conversion of any Notes between the Company and such purchasers including the
costs and expenses incurred by the Trustee in the defense of any claim or
liability arising out of or in connection with the exercise or performance of
any of its powers, duties, responsibilities or obligations under this Indenture.
Section 3.5 Repurchase of Notes Upon a Change of Control.
(a) If a Change of Control shall occur at any time, then each holder of
Notes shall have the right to require that the Company repurchase such holder's
Notes in whole or in part in integral multiples of $1,000 at a purchase price
(the "Change of Control Purchase Price") in cash equal to 100% of the principal
amount of such Notes, plus accrued and unpaid interest thereon, if any, to the
purchase date (the "Change of Control Purchase Date") pursuant to the offer
described in Section 3.5(b) (the "Change of Control Offer") and in accordance
with the other procedures set forth in this Indenture.
(b) Within 30 days following any Change of Control, the Company shall,
unless the Company shall have given each Noteholder notice of its irrevocable
intention to redeem all outstanding Notes as described in Section 3.1, notify
the Trustee thereof and give written notice (the "Change of Control Notice") of
such Change of Control to each holder of Notes, by first-class mail, postage
prepaid, at the Noteholder's address appearing in the Note register, stating,
among other things, (i) that a Change of Control has occurred, (ii) the Change
of Control Purchase Price, (iii) the Change of Control Purchase Date (which
shall be a Business Day no earlier than 30 days nor later than 60 days from the
date such notice is mailed, or such later date as is necessary to comply with
requirements under the Exchange Act), (iv) that any Note not tendered shall
continue to accrue interest and to have all of the benefits of this Indenture,
(v) that, unless the Company defaults in the payment of the Change of Control
Purchase Price, any Notes accepted for payment pursuant to the Change of Control
Offer shall cease to accrue interest after the Change of Control Purchase Date,
(vi) that Noteholders electing to have any Notes purchased pursuant to a Change
of Control Offer shall be required to surrender the Notes, with the form
entitled "Option of Noteholder to Elect Purchase" on the reverse of the Notes
completed, to the Company at the address specified in the notice prior to the
close of business on the third Business Day preceding the Change of Control
Purchase Date, (vii) that Noteholders shall be entitled to withdraw their
election if the Company receives, not later than the close of business on the
second Business Day preceding the Change of Control Purchase
18
Date, a telegram, telex, facsimile transmission or letter setting forth the name
of the Noteholder, the principal amount of Notes delivered for purchase, and a
statement that such Noteholder is withdrawing his election to have such Notes
purchased, and (viii) that Noteholders whose Notes are being purchased only in
part shall be issued new Notes equal in principal amount to the unpurchased
portion of the Notes surrendered, which unpurchased portion must be equal to
$1,000 in principal amount or an integral multiple thereof.
The Company shall comply with the requirements of Rule 13e-4 and 14e-1
under the Exchange Act and any other securities laws and regulations thereunder
to the extent such laws and regulations are applicable in connection with the
repurchase of the Notes in connection with a Change of Control.
(c) On or before the next Business Day prior to the Change of Control
Purchase Date, the Company shall deposit with the Trustee an amount equal to the
Change of Control Purchase Price in respect of all Notes or portions thereof to
be tendered on the Change of Control Purchase Date. On the Change of Control
Purchase Date, the Company shall, to the extent lawful, (i) accept for payment
Notes or portions thereof tendered pursuant to the Change of Control Offer, and
(ii) deliver or cause to be delivered to the Trustee the Notes so accepted
together with an Officers' Certificate stating the Notes or portions thereof
tendered to the Company. The Trustee shall promptly mail to each Noteholder of
Notes so accepted payment in an amount equal to the Change of Control Purchase
Price of such Notes, and the Trustee shall promptly authenticate and mail to
each Noteholder a new Note equal in principal amount to any unpurchased portion
of the Notes surrendered, if any; provided that each such new Note shall be in a
principal amount of $1,000 or an integral multiple thereof. The Company shall
publicly announce the results of the Change of Control Offer on or as soon as
practicable after the Change of Control Payment Date.
(d) The term "Change of Control" shall mean an event or series of events as
a result of which (i) any "person" or "group" (as such terms are used in
Sections 13(d) and 14(d) of the Exchange Act) acquires "beneficial ownership"
(as determined in accordance with Rule 13d-3 under the Exchange Act), directly
or indirectly, of shares representing more than 50% of the combined voting power
of the then outstanding Voting Stock, other than acquisitions by the Company,
the Company's subsidiaries or any Employee Benefit Plan or (ii) the Company
consolidates with or merges into any other person (other than a merger effected
solely for the purpose of changing the Company's jurisdiction of incorporation),
or conveys, transfers or leases all or substantially all of its assets
(determined on a consolidated basis) to any person, or any other person merges
into the Company, and, in the case of any such transaction, the outstanding
Common Stock of the Company is changed or exchanged as a result, unless the
shareholders of the Company immediately before such transaction own, directly or
indirectly, immediately following such transaction, greater than 50% of the
combined voting power of the outstanding voting securities of the person
resulting from such transaction in substantially the same proportion as their
ownership of the Voting Stock immediately before such transaction; provided that
a Change of Control shall not be deemed to have occurred if either (x) the
closing 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 (i) above) or ending immediately before
the Change of Control (in the case of a Change of Control
19
under clause (ii) above) shall equal or exceed 105% of the Conversion Price of
the Notes in effect on each such Trading Day, or (y) at least 90% of the
consideration (determined as of the date on which the Change of Control is
triggered and excluding cash payments for fractional shares) in the transaction
or transactions constituting the Change of Control consists of shares of common
stock traded on a national securities exchange or quoted on the Nasdaq National
Market and as a result of such transaction or transactions the Notes become
convertible solely into such common stock.
ARTICLE IV
PARTICULAR COVENANTS OF THE COMPANY
Section 4.1 Payment of Principal, Premium and Interest. The Company shall
duly and punctually pay or cause to be paid the principal of and premium, if
any, and interest on each of the Notes at the places, at the respective times
and in the manner provided herein and in the Notes. Each installment of interest
on the Notes due on any semi-annual interest payment date shall be payable (a)
in respect to Notes held of record by the Depositary or its nominee in same day
funds and (b) in respect of holders other than the Depositary or its nominee by
mailing checks for the interest payable to or upon the written order of the
holders of Notes entitled thereto as they shall appear on the Note register;
provided that, with respect to any holder of Notes with an aggregate principal
amount equal to or in excess of $5,000,000, at the request (such request to
include appropriate wire instructions) of such holder in writing to the Trustee,
interest on such holder's Notes shall be paid by wire transfer in immediately
available funds to an account in the continental United States of America and
any such request shall be deemed a continuing request unless and until revoked
in writing. An installment of principal or interest shall be considered paid on
the date due if the Trustee or paying agent (other than the Company, a
subsidiary of the Company or any Affiliate of any of them) holds on that date
money designated for and sufficient to pay the installment of principal or
interest and is not prohibited from paying such money to the holders of the
Notes pursuant to the terms of this Indenture.
Section 4.2 Maintenance of Office or Agency. The Company may from time to
time designate one or more offices or agencies where the Notes may be
surrendered for registration of transfer or exchange or for presentation for
payment or for conversion or redemption and where notices and demands to or upon
the Company in respect of the Notes and this Indenture may be served. The
Company shall give prompt written notice to the Trustee 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 office or agency or shall fail to furnish the
Trustee with the address thereof, such presentations, surrenders, notices and
demands may be made or served at the Corporate Trust Office of the Trustee.
The Company hereby initially designates the Trustee as paying agent, Note
registrar and conversion agent and the Corporate Trust Office of the Trustee as
the office or agency of the Company for the purposes set forth in the first
paragraph of this Section 4.2.
So long as the Trustee is the Note registrar, the Trustee agrees to mail,
or cause to be mailed, the notices set forth in Section 7.11(a) and the third
paragraph of Section 7.12.
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Section 4.3 Appointments to Fill Vacancies in Trustee's Office. The
Company, whenever necessary to avoid or fill a vacancy in the office of Trustee,
shall appoint, in the manner provided in Section 7.11, a Trustee, so that there
shall at all times be a Trustee hereunder.
Section 4.4 Provisions as to Paying Agent.
(a) If the Company shall appoint a paying agent other than the Trustee, or
if the Trustee shall appoint such a paying agent, the Company or the Trustee, as
the case may be, shall cause such paying agent to execute and deliver to the
Trustee an instrument in which such agent shall agree with the Trustee, subject
to the provisions of this Section 4.4:
(i) that it shall hold all sums held by it as such agent for the
payment of the principal of, premium, if any, or interest on the Notes
(whether such sums have been paid to it by the Company or by any other
obligor on the Notes) in trust for the benefit of the holders of the Notes;
(ii) that it shall give the Trustee notice of any failure by the
Company (or by any other obligor on the Notes) to make any payment of the
principal of, premium, if any, or interest on the Notes when the same shall
be due and payable; and
(iii) that at any time during the continuance of an Event of Default,
upon request of the Trustee, it shall forthwith pay to the Trustee all sums
so held in trust.
The Company shall, before each due date of the principal of, premium, if
any, or interest on the Notes, deposit with the paying agent a sum sufficient to
pay such principal, premium, if any, or interest, and (unless such paying agent
is the Trustee) the Company shall promptly notify the Trustee of any failure to
take such action.
(b) If the Company shall act as its own paying agent, it shall, on or
before each due date of the principal of, premium, if any, or interest or any
Make-Whole Payment on the Notes, set aside, segregate and hold in trust for the
benefit of the holders of the Notes a sum sufficient to pay such principal,
premium, if any, or interest so becoming due and shall notify the Trustee of any
failure to take such action and of any failure by the Company (or any other
obligor under the Notes) to make any payment of the principal of, premium, if
any, or interest or any Make-Whole Payment on the Notes when the same shall
become due and payable.
(c) Anything in this Section 4.4 to the contrary notwithstanding, the
Company may, at any time, for the purpose of obtaining a satisfaction and
discharge of this Indenture, or for any other reason, pay or cause to be paid to
the Trustee all sums held in trust by the Company or any paying agent hereunder
as required by this Section 4.4, such sums to be held by the Trustee upon the
trusts herein contained and upon such payment by the Company or any paying agent
to the Trustee, the Company or such paying agent shall be released from all
further liability with respect to such sums.
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(d) Anything in this Section 4.4 to the contrary notwithstanding, the
agreement to hold sums in trust as provided in this Section 4.4 is subject to
Sections 12.3 and 12.4.
Section 4.5 Corporate Existence. Subject to Article XI, the Company shall
do or cause to be done all things necessary to preserve and keep in full force
and effect (a) its corporate existence, and the corporate or other existence of
any subsidiary of the Company, in accordance with the respective organizational
documents (as the same may be amended from time to time) of the Company or any
such subsidiary and (b) the rights (charter and statutory), licenses and
franchises of the Company and its subsidiaries; provided that the Company shall
not be required to preserve any such right, license or franchise, or the
corporate or other existence of any of its subsidiaries if the Board of
Directors shall determine that the preservation thereof is no longer desirable
in the conduct of the business of the Company and its subsidiaries, taken as a
whole, and that the loss thereof is not materially adverse to the Noteholders.
Section 4.6 Commission and Other Reports. The Company shall deliver to the
Trustee and each Noteholder, within 10 days after it files the same with the
Commission, copies of all reports and information (or copies of such portions of
any of the foregoing as the Commission may by rules and regulations prescribe),
if any, that the Company is required to file with the Commission pursuant to
Section 13 or 15(d) of the Exchange Act; provided that in the case of annual
reports, information may be incorporated by reference and furnished to
Noteholders at the time and in the manner in which such information is required
to be furnished to the Company's common shareholders. The Company agrees to
continue to comply with the filing and reporting requirements of the Commission
as long as any of the Notes are outstanding; provided, that if the Company is
not subject to the filing and reporting requirements of the Commission at any
time, (a) the Company shall provide the Trustee and each Noteholder with the
reports and information (or copies of such portions of any of the foregoing as
the Commission may by rules and regulations prescribe) that are specified in
Section 13 or 15(d) of the Exchange Act as if the Company were subject to such
filing and reporting requirements, and (b) the Company shall provide copies of
such reports and information to any prospective holder of the Notes promptly
upon written request and payment of reasonable costs of duplication and
delivery. The record date to identify the Noteholders to whom such reports shall
be furnished shall be no longer than 60 days prior to the date on which such
reports are first mailed to the Noteholders on the Notes. The Company shall also
comply with the other provisions of the Trust Indenture Act Section 314(a).
Delivery of such reports, information and documents to the Trustee is for
informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
Section 4.7 Stay, Extension and Usury Laws. The Company (to the extent that
it may lawfully do so) shall not at any time insist upon, plead or in any manner
whatsoever claim or take the benefit or advantage of, any stay, extension or
usury law or other law that would prohibit or forgive the Company from paying
all or any portion of the principal of or interest on the Notes as contemplated
herein, wherever enacted, now or at any time hereafter in force, or
22
that may affect the covenants or the performance of this Indenture; and the
Company (to the extent it may lawfully do so) hereby expressly waives all
benefit or advantage of any such law, and covenants that it shall not, by resort
to any such law, hinder, delay or impede the execution of any power herein
granted to the Trustee, but shall suffer and permit the execution of every such
power as though no such law has been enacted.
Section 4.8 Compliance Statement; Notice of Defaults.
(a) In accordance with the provisions of Trust Indenture Act, the Company
shall deliver to the Trustee within 120 days after the end of each Fiscal Year
of the Company an Officers' Certificate stating whether or not to the best
knowledge of the signers thereof the Company is in compliance (without regard to
periods of grace or notice requirements) with all conditions and covenants under
this Indenture, and if the Company shall not be in compliance, specifying such
non-compliance and the nature and status thereof of which such signer may have
knowledge. The Company agrees to promptly notify the Trustee of any change in
the Fiscal Year.
(b) The Company shall file with the Trustee written notice of the
occurrence of any default or Event of Default within ten days of its becoming
aware of any such default or Event of Default.
Section 4.9 Taxes. The Company shall pay or discharge or cause to be paid
or discharged, before the same shall become delinquent, (a) all taxes,
assessments and governmental charges (including withholding taxes and any
penalties, interest and additions to taxes) levied or imposed upon the Company
or its subsidiaries or upon the income, profits or property of the Company or
any such subsidiary and (b) all lawful claims for labor, materials and supplies
that, if unpaid, might by law become a lien upon the property of the Company or
any such subsidiary; provided that the Company shall not be required to pay or
discharge or cause to be paid or discharged any such tax, assessment, charge or
claim whose amount, applicability or validity is being contested in good faith
by appropriate proceedings and for which disputed amounts adequate reserves have
been made.
ARTICLE V
NOTEHOLDERS' LISTS
Section 5.1 Noteholders' 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 of Notes and shall otherwise comply with Trust
Indenture Act Section 312(a). If the Trustee is not the Notes registrar, the
Company shall furnish or cause to be furnished to the Trustee on or before at
least seven Business Days preceding each interest payment date, redemption date,
purchase 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 reasonably may require of
the names and addresses of holders of Notes; and the Company shall otherwise
comply with Trust Indenture Act Section 312(a); provided however to the extent
there has been established a record date or special record date with respect to
such payment, any such list of holders shall be as of such record date or
special record date.
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ARTICLE VI
DEFAULTS AND REMEDIES
Section 6.1 Events of Default. In case one or more of the following Events
of Default (whatever the reason for such Event of Default and whether it shall
be voluntary or involuntary or be effected by operation of law or pursuant to
any judgment, decree or order of any court or any order, rule or regulation of
any administrative or governmental body) shall have occurred and be continuing:
(a) default in the payment of the principal of or premium, if any, on
the Notes when due at maturity, upon redemption or otherwise, including
failure by the Company to purchase the Notes when required under Section
3.5 (whether or not such payment shall be prohibited by Article XV of this
Indenture); or
(b) default in the payment of any installment of interest on the Notes
as and when the same shall become due and payable (whether or not such
payment shall be prohibited by Article XV of this Indenture), and
continuance of such default for a period of 30 days; or
(c) failure to provide a Change of Control Notice (whether or not such
Notice or payment pursuant to Section 3.5 shall be prohibited by Article XV
of this Indenture); or
(d) failure on the part of the Company to duly observe or perform any
other covenant on the part of the Company in this Indenture (other than a
default in the performance or breach of a covenant that is specifically
dealt with elsewhere in this Section 6.1) that continues for a period of 90
days after the date on which written notice of such failure, requiring the
Company to remedy the same, shall have been given to the Company by the
Trustee, or to the Company and a Responsible Officer of the Trustee by the
holders of at least 25% in aggregate principal amount of the Notes at the
time outstanding (determined in accordance with Section 8.4); or
(e) the Company shall commence a voluntary case or other proceeding
seeking liquidation, reorganization or other relief with respect to itself
or its debts under any bankruptcy, insolvency or other similar law now or
hereafter in effect, or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any substantial
part of its property, or shall consent to any such relief or to the
appointment of or taking possession by any such official in an involuntary
case or other proceeding commenced against it or shall make a general
assignment for the benefit of creditors or shall fail generally to pay its
debts as they become due; or
(f) an involuntary case or other proceeding shall be commenced against
the Company seeking liquidation, reorganization or other relief with
respect to it or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect or seeking the appointment of a
trustee, receiver, liquidator, custodian or other similar official of it or
any
24
substantial part of its property, and such involuntary case or other
proceeding shall remain undismissed and unstayed for a period of 60
consecutive days;
then, and in each and every such case (other than an Event of Default specified
in Section 6.1(e) or (f)), unless the principal of all of the Notes shall have
already become due and payable, either the Trustee or the holders of not less
than 25% in aggregate principal amount of the Notes then outstanding (determined
in accordance with Section 8.4), by notice in writing to the Company (and to the
Trustee if given by Noteholders), may declare the principal of and premium, if
any, on the Notes and the interest accrued thereon to be due and payable
immediately, and upon any such declaration the same shall become and shall be
immediately due and payable, anything in this Indenture or in the Notes
contained to the contrary notwithstanding. If an Event of Default specified in
Section 6.1(e) or (f) occurs and is continuing, the principal of all the Notes
and the interest accrued thereon shall be immediately due and payable. The
foregoing provision is subject to the conditions that if, at any time after the
principal of the Notes shall have been so declared due and payable, and before
any judgment or decree for the payment of the monies due shall have been
obtained or entered as hereinafter provided, the Company shall pay or shall
deposit with the Trustee a sum sufficient to pay all matured installments of
interest upon all Notes and the principal of and premium, if any, on any and all
Notes that shall have become due otherwise than by acceleration (with interest
on overdue installments of interest (to the extent that payment of such interest
is enforceable under applicable law) and on such principal and premium, if any,
at the rate borne by the Notes, to the date of such payment or deposit) and
amounts due to the Trustee pursuant to Section 7.7, and if any and all defaults
under this Indenture, other than the nonpayment of principal of, premium, if
any, and accrued interest on Notes that shall have become due by acceleration,
shall have been cured or waived pursuant to Section 6.7, then and in every such
case the holders of a majority in aggregate principal amount of the Notes then
outstanding, by written notice to the Company and to the Trustee, may waive all
defaults or Events of Default and rescind and annul such declaration and its
consequences; but no such waiver or rescission and annulment shall extend to or
shall affect any subsequent default or Event of Default, or shall impair any
right consequent thereto. The Company shall notify a Responsible Officer of the
Trustee, promptly upon becoming aware thereof, of any Event of Default.
In case the Trustee shall have proceeded to enforce any right under this
Indenture and such proceedings shall have been discontinued or abandoned because
of such waiver or rescission and annulment or for any other reason or shall have
been determined adversely to the Trustee, then and in every such case the
Company, the holders of Notes and the Trustee shall be restored respectively to
their several positions and rights hereunder, and all rights, remedies and
powers of the Company, the holders of Notes and the Trustee shall continue as
though no such proceeding had been taken.
Section 6.2 Payments of Notes on Default; Suit Therefor. The Company
covenants that (a) in case default shall be made in the payment of any
installment of interest upon any of the Notes as and when the same shall become
due and payable, and such default shall have continued for a period of 30 days,
or (b) in case default shall be made in the payment of the principal of or
premium, if any, on any of the Notes as and when the same shall have become due
and payable, whether at maturity of the Notes or in connection with any
redemption, by declaration or otherwise, then, upon demand of the Trustee, the
Company shall pay to the
25
Trustee, for the benefit of the holders of the Notes, the whole amount that then
shall have become due and payable on all such Notes for principal of, premium,
if any, or interest, or both, as the case may be, with interest upon the overdue
principal of, premium, if any, and (to the extent that payment of such interest
is enforceable under applicable law) upon the overdue installments of interest
at the rate borne by the Notes; and, in addition thereto, such further amount as
shall be sufficient to cover the costs and expenses of collection, including
reasonable compensation to the Trustee, its agents, attorneys and counsel, and
any expenses or liabilities incurred by the Trustee hereunder other than through
its negligence or bad faith. Until such demand by the Trustee, the Company may
pay the principal of and premium, if any, and interest on the Notes to the
registered holders, whether or not the Notes are overdue.
In case the Company shall fail forthwith to pay such amounts upon such
demand, the Trustee, in its own name and as trustee of an express trust, shall
be entitled and empowered to institute any actions or proceedings at law or in
equity for the collection of the sums so due and unpaid and may prosecute any
such action or proceeding to judgment or final decree, and may enforce any such
judgment or final decree against the Company or any other obligor on the Notes
and collect in the manner provided by law out of the property of the Company or
any other obligor on the Notes wherever situated the monies adjudged or decreed
to be payable.
In the case there shall be pending proceedings for the bankruptcy or for
the reorganization of the Company or any other obligor on the Notes under Title
11 of the United States Code or any other applicable law, or in case a receiver,
assignee or trustee in bankruptcy or reorganization, liquidator, sequestrator or
similar official shall have been appointed for or taken possession of the
Company or such other obligor, the property of the Company or such other
obligor, or in the case of any other judicial proceedings relative to the
Company or such other obligor upon the Notes, or to the creditors or property of
the Company or such other obligor, the Trustee, irrespective of whether the
principal of the Notes shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Trustee shall have made
any demand pursuant to the provisions of this Section 6.2, shall be entitled and
empowered, by intervention in such proceedings or otherwise, to file and prove a
claim or claims for the whole amount of principal, premium, if any, and interest
owing and unpaid in respect of the Notes and, in case of any judicial
proceedings, to file such proofs of claim and other papers or documents as may
be necessary or advisable in order to have the claims of the Trustee and of the
Noteholders allowed in such judicial proceedings relative to the Company or any
other obligor on the Notes, its or their creditors, or its or their property and
to collect and receive any monies or other property payable or deliverable on
any such claims and to distribute the same after the deduction of any amounts
due the Trustee under Section 7.7; and any receiver, assignee or trustee in
bankruptcy or reorganization, liquidator, custodian or similar official is
hereby authorized by each of the Noteholders to make such payments to the
Trustee and, in the event that the Trustee shall consent to the making of such
payments directly to the Noteholders, to pay to the Trustee any amount due it
for reasonable compensation, expenses, advances and disbursements, including
counsel fees incurred by it up to the date of such distribution. To the extent
that such payment of reasonable compensation, expenses, advances and
disbursements out of the estate in any such proceedings shall be denied for any
reason, payment of the same shall be secured by a lien on, and shall be paid out
of, any and all distributions, dividends, monies, securities and other property
that the holders of the Notes may
26
be entitled to receive in such proceedings, whether in liquidation or under any
plan of reorganization or arrangement or otherwise.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or adopt on behalf of any Noteholder any plan of
reorganization or arrangement affecting the Notes or the rights of any
Noteholder, or to authorize the Trustee to vote in respect of the claim of any
Noteholder in any such proceeding.
All rights of action and of asserting claims under this Indenture, or under
any of the Notes, may be enforced by the Trustee without the possession of any
of the Notes or the production thereof on any trial or other proceeding relative
thereto, and any such suit or proceeding instituted by the Trustee shall be
brought in its own name as trustee of an express trust, and any recovery of
judgment shall, after provision for the payment of the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, be
for the ratable benefit of the holders of the Notes.
In any proceedings brought by the Trustee (and in any proceedings involving
the interpretation of any provision of this Indenture to which the Trustee shall
be a party), the Trustee shall be held to represent all the holders of the
Notes, and it shall not be necessary to make any holders of the Notes parties to
any such proceedings.
Section 6.3 Application of Monies Collected by Trustee. Any monies
collected by the Trustee pursuant to this Article VI shall be applied in the
order following, at the date or dates fixed by the Trustee for the distribution
of such monies, upon presentation of the several Notes and stamping thereon the
payment, if only partially paid, and upon surrender thereof, if fully paid:
First: To the payment of all amounts due the Trustee under this
Indenture, including, without limitation Section 7.7;
Second: Subject to the provisions of Article XV, in case the principal
of the outstanding Notes shall not have become due and be unpaid, to the
payment of interest on the Notes in default in the order of the maturity of
the installments of such interest, with interest (to the extent that such
interest has been collected by the Trustee) upon the overdue installments
of interest at the rate borne by the Notes, such payments to be made
ratably to the persons entitled thereto; and
Third: Subject to the provisions of Article XV, in case the principal
of the outstanding Notes shall have become due, by declaration or
otherwise, and be unpaid, to the payment of the whole amount then due and
unpaid upon the Notes for principal, premium, if any, and interest, with
interest on the overdue principal and premium, if any, and (to the extent
that such interest has been collected by the Trustee) upon overdue
installments of interest at the rate borne by the Notes; and in case such
monies shall be insufficient to pay in full the whole amounts so due and
unpaid upon the Notes, then to the payment of such principal of, premium,
if any, and interest without preference or priority of principal and
premium, if any, over interest, or of interest over principal and premium,
if any, or of any
27
installment of interest over any other installment of interest, or of any
Note over any other Note, ratably to the aggregate of such principal and
premium, if any, and accrued and unpaid interest.
Section 6.4 Proceedings by Noteholder. No holder of any Note shall have any
right by virtue of or by availing of any provision of this Indenture to
institute any suit, action or proceeding in equity or at law upon or under or
with respect to this Indenture, or for the appointment of a receiver, trustee,
liquidator, custodian or other similar official, or for any other remedy
hereunder, unless such holder previously shall have given to the Trustee written
notice of an Event of Default and of the continuance thereof, as hereinbefore
provided, and unless also the holders of not less than 25% in aggregate
principal amount of the Notes then outstanding shall have made written request
upon the Trustee to institute such action, suit or proceeding in its own name as
Trustee hereunder and shall have offered to the Trustee such reasonable
indemnity as it may require against the costs, expenses and liabilities to be
incurred therein or thereby, and the Trustee for 60 days after its receipt of
such notice, request and offer of indemnity, shall have neglected or refused to
institute any such action, suit or proceeding, and no direction inconsistent
with such written request shall have been given to the Trustee pursuant to
Section 6.7; it being understood and intended, and being expressly covenanted by
the taker and holder of every Note with every other taker and holder and the
Trustee, that not one or more holders of Notes shall have any right in any
manner whatever by virtue of or by availing of any provision of this Indenture
to affect, disturb or prejudice the rights of any other holder of Notes, to
obtain or seek to obtain priority over or preference to any other such holder or
to enforce any right under this Indenture, except in the manner herein provided
and for the equal, ratable and common benefit of all holders of Notes (except as
otherwise provided herein). For the protection and enforcement of this Section
6.4, each and every Noteholder and the Trustee shall be entitled to such relief
as can be given either at law or in equity.
Notwithstanding any other provision of this Indenture and any provision of
any Note, the right of any holder of any Note to receive payment of the
principal of, premium, if any, and interest on such Note, on or after the
respective due dates expressed in such Note, or to institute suit for the
enforcement of any such payment on or after such respective dates against the
Company shall not be impaired or affected without the consent of such holder
except as otherwise set forth herein.
Anything in this Indenture or the Notes to the contrary notwithstanding,
the holder of any Note, without the consent of either the Trustee or the holder
of any other Note, in his own behalf and for his own benefit, may enforce, and
may institute and maintain any proceeding suitable to enforce, his rights of
conversion as provided herein.
Section 6.5 Proceedings by Trustee. In case of an Event of Default, the
Trustee may in its discretion proceed to protect and enforce the rights vested
in it by this Indenture by such appropriate judicial proceedings as the Trustee
shall deem most effectual to protect and enforce any of such rights, either by
suit in equity or by action at law or by proceeding in bankruptcy or otherwise,
whether for the specific enforcement of any covenant or agreement contained in
this Indenture or in aid of the exercise of any power granted in this Indenture
or to enforce any other legal or equitable right vested in the Trustee by this
Indenture or by law.
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Section 6.6 Remedies Cumulative and Continuing. Except as provided in
Section 2.6, all powers and remedies given by this Article VI to the Trustee or
to the Noteholders shall, to the extent permitted by law, be deemed cumulative
and not exclusive of such powers and remedies or of any other powers and
remedies available to the Trustee or the holders of the Notes, by judicial
proceedings or otherwise, to enforce the performance or observance of the
covenants and agreements contained in this Indenture, and no delay or omission
of the Trustee or of any holder of any of the Notes to exercise any right or
power accruing upon any default or Event of Default occurring and continuing as
aforesaid shall impair any such right or power or shall be construed to be a
waiver of any such default or any acquiescence therein; and, subject to the
provisions of Section 6.4, every power and remedy given by this Article VI or by
law to the Trustee or to the Noteholders may be exercised from time to time, and
as often as shall be deemed expedient, by the Trustee or by the Noteholders.
Section 6.7 Direction of Proceedings and Waiver of Defaults by Majority of
Noteholders. The holders of a majority in aggregate principal amount of the
Notes at the time outstanding (determined in accordance with Section 8.4) shall
have the right to direct the time, method and place of conducting any proceeding
for any remedy available to the Trustee or exercising any trust or power
conferred on the Trustee; provided that (a) such direction shall not be in
conflict with any rule of law or with this Indenture, (b) the Trustee may take
any other action deemed proper by the Trustee that is not inconsistent with such
direction and (c) such direction shall not in the estimation of the Trustee
involve it in personal liability. The holders of a majority in aggregate
principal amount of the Notes at the time outstanding (determined in accordance
with Section 8.4) may on behalf of the holders of all of the Notes waive any
past default or Event of Default hereunder and its consequences or waive
compliance with the provisions of the Indenture except (i) a default in the
payment of interest or premium, if any, on, or the principal of, the Notes, (ii)
a failure by the Company to convert any Notes into Common Stock or (iii) a
default in respect of a covenant or provisions hereof that under Article X
cannot be modified or amended without the consent of the holders of all Notes
then outstanding. Whenever any default or Event of Default hereunder shall have
been waived as permitted by this Section 6.7, said default or Event of Default
shall for all purposes of the Notes and this Indenture be deemed to have been
cured and to be not continuing and the Company, the Trustee and the holders of
the Notes shall be restored to their former positions and rights hereunder; but
no such waiver shall extend to any subsequent or other default or Event of
Default or impair any right consequent thereon.
Section 6.8 Notice of Defaults. The Trustee shall, within 90 days after the
occurrence of a default, mail to all Noteholders, as the names and addresses of
such holders appear upon the Note register, notice of all defaults known to a
Responsible Officer, unless such defaults shall have been cured or waived before
the giving of such notice; provided that, except in the case of default in the
payment of the principal of, premium, if any, or interest on any of the Notes,
the Trustee shall be protected in withholding such notice if and so long as a
trust committee of directors and/or Responsible Officers of the Trustee in good
faith determine that the withholding of such notice is in the interests of the
Noteholders.
Section 6.9 Undertaking to Pay Costs. All parties to this Indenture agree,
and each holder of any Note by his acceptance thereof shall be deemed to have
agreed, that any court may,
29
in its discretion, require, in any suit for the enforcement of any right or
remedy under this Indenture, or in any suit against the Trustee for any action
taken or omitted by it as Trustee, the filing by any party litigant in such suit
of an undertaking to pay the costs of such suit and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees and
expenses, against any party litigant in such suit, having due regard to the
merits and good faith of the claims or defenses made by such party litigant;
provided that the provisions of this Section 6.9 shall not apply to any suit
instituted by the Trustee, to any suit instituted by any Noteholder or group of
Noteholders holding in the aggregate more than 10% in principal amount of the
Notes at the time outstanding (determined in accordance with Section 8.4) or to
any suit instituted by any Noteholder for the enforcement of the payment of the
principal of, premium, if any, or interest on any Note on or after the due date
expressed in such Note or to any suit for the enforcement of the right to
convert any Note in accordance with the provisions of Article XIV.
ARTICLE VII
CONCERNING THE TRUSTEE
Section 7.1 Duties and Responsibilities of Trustee.
(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise the rights and powers vested in it by this Indenture and use the
same degree of care and skill in its exercise as a prudent person would exercise
or use under the circumstances in the conduct of such person's own affairs.
(b) Except during the continuance of an Event of Default:
(i) the Trustee need perform only those duties that are specifically
set forth in this Indenture and no others; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture; provided
that in the case of any such certificates or opinions that by any provision
hereof are specifically required to be furnished to the Trustee, the
Trustee shall be under a duty to examine the same to determine whether or
not they conform to the requirements of this Indenture (but need not
confirm or investigate the accuracy of mathematical calculations or other
facts stated therein).
(c) The Trustee may not be relieved from liability for its own negligent
action, its own negligent failure to act or its own willful misconduct, except
that:
(i) this paragraph (c) does not limit the effect of paragraph (b) of
this Section 7.1;
(ii) the Trustee shall not be liable for any error of judgment made in
good faith by an officer or officers of the Trustee unless it is proved
that the Trustee was negligent in ascertaining the pertinent facts; and
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(iii) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.7.
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b), (c) and (e) of this Section 7.1.
(e) The Trustee may refuse to perform any duty or exercise any right or
power or expend or risk its own funds or otherwise incur any financial liability
unless it receives indemnity satisfactory to it against any loss, liability or
expense.
Section 7.2 Reports by Trustee to Holders. Within 60 days after each
anniversary of the date set forth on Schedule I (the "Report Date") commencing
with the first Report Date following the date of this Indenture, the Trustee
shall, but only if required by the Trust Indenture Act, mail to each Noteholder
a brief report dated as of such May 15 that complies with Trust Indenture Act
Section 313(a). The Trustee also shall comply with Trust Indenture Act Sections
313(b) and 313(c).
The Company shall promptly notify the Trustee in writing if the Notes
become listed or delisted on any stock exchange or automatic quotation system.
A copy of each report at the time of its mailing to Noteholders shall be
mailed to the Company and, to the extent required by Section 4.6 hereof and of
the Trust Indenture Act Section 313(d), filed with the Commission and each stock
exchange, if any, on which the Notes are listed.
Section 7.3 Reliance on Documents, Opinions, Etc. Except as otherwise
provided in Section 7.1:
(a) The Trustee may rely and shall be protected in acting upon any
resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, order, bond, debenture, coupon or other paper or document
believed by it in good faith to be genuine and to have been signed or
presented by the proper party or parties;
(b) Any request, direction, order or demand of the Company mentioned
herein shall be sufficiently evidenced by an Officers' Certificate (unless
other evidence in respect thereof be herein specifically prescribed or
required by the Trust Indenture Act); and any resolution of the Board of
Directors may be evidenced to the Trustee by a copy thereof certified by
the Secretary or an Assistant Secretary of the Company;
(c) The Trustee may consult with counsel of its selection and any
advice or opinion of counsel shall be full and complete authorization and
protection in respect of any action taken or omitted by it hereunder in
good faith and in accordance with such advice or opinion of counsel;
(d) The Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys, and the Trustee shall
31
not be responsible for any misconduct or negligence on the part of any
agent or attorney appointed by it with due care hereunder; no Depositary,
Custodian or paying agent who is not the Trustee shall be deemed an agent
of the Trustee, and the Trustee (in its capacity as Trustee) shall not be
responsible for any act or omission by any such Depositary, Custodian or
paying agent;
(e) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by the Indenture at the request or direction
of any of the holders pursuant to this Indenture unless such holders have
offered the Trustee reasonable security or indemnity against the costs,
expenses and liabilities that would be incurred by it in compliance with
such request or direction.
(f) Subject to the provisions of Section 7.1(c), the Trustee shall not
be liable for any action it takes or omits to take in good faith that it
believes to be authorized or within its rights or powers;
(g) In connection with any request to transfer or exchange any Note,
the Trustee may request a direction (in the form of an Officers'
Certificate) from the Company and an Opinion of Counsel with respect to
compliance with any restrictions on transfer or exchange imposed by this
Indenture, the Securities Act, other applicable law or the rules and
regulations of any exchange on which the Notes or the Capital Stock may be
traded, and the Trustee may rely and shall be protected in acting upon such
direction and in accordance with such Officers' Certificate and Opinion of
Counsel;
(h) The Trustee may rely and shall be fully protected in acting upon
the determination and notice by the Company of the Conversion Price; and
(i) The Trustee shall not be deemed to have knowledge of any Event of
Default or other fact or event upon the occurrence of which it may be
required to take action hereunder unless one of its Responsible Officers
has actual knowledge thereof.
(j) The Trustee's privileges, protections and immunities from
liability and its rights to compensation and indemnification in connection
with the performance of its duties under this Indenture shall extend to the
Trustee when serving in the roles of paying agent, authenticating agent,
conversion agent and Note registrar, as well as to the Trustee's officers,
directors, employees and agents. Such privileges, protections, immunities
and rights to indemnification, together with the Trustee's right to
compensation, shall survive the Trustee's resignation or removal in any or
all of the capacities it may be serving hereunder and final payment of the
Notes.
(k) No recourse under or upon any obligation, covenant or agreement of
the Trustee in this Indenture or in any supplemental indenture shall be had
against any officer, director, employee or agent, as such, past, present or
future, of the Trustee or of any successor entity, either directly or
through the Trustee or any successor entity, whether by virtue of any
constitution, statute or rule of law, by the enforcement of any assessment
or penalty or otherwise, it being expressly understood that all such
liability is hereby expressly waived and released as a condition of, and as
consideration for, the execution of this Indenture.
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Section 7.4 No Responsibility for Recitals, Etc. The recitals contained
herein and in the Notes (except in the Trustee's certificate of authentication)
shall be taken as the statements of the Company, and the Trustee assumes no
responsibility for the correctness of the same. The Trustee makes no
representations as to the validity or sufficiency of this Indenture or of the
Notes. The Trustee shall not be accountable for the use or application by the
Company of any Notes or the proceeds of any Notes authenticated and delivered by
the Trustee in conformity with the provisions of this Indenture.
Section 7.5 Trustee, Paying Agents, Conversion Agents or Registrar May Own
Notes. The Trustee, any paying agent, any conversion agent or any Note
registrar, in its individual or any other capacity, may become the owner or
pledgee of Notes with the same rights it would have if it were not Trustee,
paying agent, conversion agent or Note registrar.
Section 7.6 Monies to Be Held in Trust. Subject to the provisions of
Section 12.4, all monies received by the Trustee shall, until used or applied as
herein provided, be held in trust for the purposes for which they were received.
Money held by the Trustee in trust hereunder need not be segregated from other
funds except to the extent required by law. The Trustee shall be under no
liability for interest on any money received by it hereunder except as may be
agreed to in writing from time to time by the Company and the Trustee.
Section 7.7 Compensation and Expenses of Trustee. The Company shall pay to
the Trustee from time to time, and the Trustee shall be entitled to, such
compensation as the Company and the Trustee shall from time to time agree in
writing, for all services rendered by it hereunder in any capacity (which shall
not be limited by any provision of law in regard to the compensation of a
trustee of an express trust), and the Company shall pay or reimburse the Trustee
upon its request for all reasonable expenses, disbursements and advances
incurred or made by the Trustee in accordance with any of the provisions of this
Indenture (including the reasonable fees and expenses of its counsel and of all
persons not regularly in its employ) except any such expense, disbursement or
advance as may arise from its negligence or bad faith. The Company also shall
indemnify each of the Trustee or any predecessor Trustee in any capacity under
this Indenture and its respective agents and any authenticating agent and their
respective officers, directors, employees and agents for, and to hold them
harmless against, any and all loss, liability, damage, claim or expense,
including taxes (other than taxes based on the income of the Trustee) and
reasonable counsel fees and expenses incurred without negligence or bad faith on
the part of the Trustee or any such other indemnified parties, as the case may
be, and arising out of or in connection with the acceptance or administration of
this trust or in any other capacity hereunder, including the costs and expenses
of defending themselves against any claim of liability in the premises. The
obligations of the Company under this Section 7.7 to compensate or indemnify the
Trustee and to pay or reimburse the Trustee for expenses, disbursements and
advances shall be secured by a lien prior to that of the Notes upon all property
and funds held or collected by the Trustee as such, except funds held in trust
for the benefit of the holders of particular Notes. The obligation of the
Company under this Section shall survive the satisfaction and discharge of this
Indenture.
Section 7.8 Officers' Certificate as Evidence. Except as otherwise provided
in Section 7.1, whenever in the administration of the provisions of this
Indenture the Trustee shall deem it
33
necessary or desirable that a matter be proved or established prior to taking or
omitting any action hereunder, such matter (unless other evidence in respect
thereof be herein specifically prescribed) may, in the absence of negligence or
bad faith on the part of the Trustee, be deemed to be conclusively proved and
established by an Officers' Certificate delivered to the Trustee, and such
Officers' Certificate, in the absence of negligence or bad faith on the part of
the Trustee, shall be full warrant to the Trustee for any action taken or
omitted by it under the provisions of this Indenture upon the faith thereof.
Section 7.9 Conflicting Interests of Trustee. In the event that the Trust
Indenture Act is applicable hereto, and if the Trustee has or shall acquire a
conflicting interest within the meaning of Trust Indenture Act Section 310(b)
and there exists an Event of Default hereunder (exclusive of any period of grace
or requirement of notice), the Trustee shall either eliminate such interest or
resign, to the extent and in the manner provided by, and subject to the
provisions of, the Trust Indenture Act and this Indenture.
Section 7.10 Eligibility of Trustee. There shall at all times be a Trustee
hereunder that shall be a person that satisfied the requirements of Trust
Indenture Act Section 310(a)(1) and Section 310(a)(5) and that has a combined
capital and surplus of at least $50,000,000 or be a part of a bank holding
company with a combined capital and surplus with at least $100,000,000 as set
forth in its most recent annual report of condition. If such person makes
available to the public reports of condition or audited financial statements at
least annually, then for the purposes of this Section 7.10, the combined capital
and surplus of such person shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition or audited financial
statements. If at any time the Trustee shall cease to be eligible in accordance
with the provisions of this Section, it shall resign immediately in the manner
and with the effect hereinafter specified in this Article VII.
Section 7.11 Resignation or Removal of Trustee.
(a) The Trustee may at any time resign by giving written notice of such
resignation to the Company; and the Company shall mail, or cause to be mailed,
notice thereof to the holders of Notes at their addresses as they shall appear
on the Note register. Upon receiving such notice of resignation, the Company
shall promptly appoint a successor trustee by written instrument, in duplicate,
executed by order of the Board of Directors, one copy of which instrument shall
be delivered to the resigning Trustee and one copy to the successor trustee.
(b) In case at any time any of the following shall occur:
(i) the Trustee shall fail to comply with Section 7.9 after written
request therefor by the Company or by any Noteholder who has been a bona
fide holder of a Note or Notes for at least six months; or
(ii) the Trustee shall cease to be eligible in accordance with the
provisions of Section 7.10 and shall fail to resign after written request
therefor by the Company or by any such Noteholder; or
34
(iii) the Trustee shall become incapable of acting, or shall be
adjudged a bankrupt or insolvent, or a receiver of the Trustee or of its
property shall be appointed, or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, the Company may remove the Trustee and appoint a
successor trustee by written instrument, in duplicate, executed by order of the
Board of Directors, one copy of which instrument shall be delivered to the
Trustee so removed and one copy to the successor trustee or any Noteholder who
has been a bona fide holder of a Note or Notes for at least six months may, on
behalf of himself and all others similarly situated, petition any court of
competent jurisdiction for the removal of the Trustee and the appointment of a
successor trustee. Such court may thereupon, after such notice, if any, as it
may deem proper and prescribe, remove the Trustee and appoint a successor
trustee.
(c) The holders of a majority in aggregate principal amount of the Notes at
the time outstanding may at any time remove the Trustee and nominate a successor
trustee, which shall be deemed appointed as successor trustee unless within ten
days after notice to the Company of such nomination the Company objects thereto,
in which case the Trustee so removed or any Noteholder, upon the terms and
conditions and otherwise as provided in the next paragraph, may petition any
court of competent jurisdiction for an appointment of a successor trustee.
If no successor trustee shall have been so appointed and have accepted
appointment within 60 days after removal or the mailing of such notice of
resignation to the Noteholders, the Trustee resigning or being removed may
petition any court of competent jurisdiction for the appointment of a successor
trustee, or, in the case of either resignation or removal, any Noteholder who
has been a bona fide holder of a Note or Notes for at least six months may, on
behalf of himself and all others similarly situated, petition any such court for
the appointment of a successor trustee. Such court may thereupon, after such
notice, if any, as it may deem proper and prescribe, appoint a successor
trustee.
(d) Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section 7.11 shall
become effective upon acceptance of appointment by the successor trustee as
provided in Section 7.12.
Section 7.12 Acceptance by Successor Trustee. Any successor trustee
appointed as provided in Section 7.11 shall execute, acknowledge and deliver to
the Company and to its predecessor trustee an instrument accepting such
appointment hereunder, and thereupon, the resignation or removal of the
predecessor trustee shall become effective and such successor trustee, without
any further act, deed or conveyance, shall become vested with all the rights,
powers, duties and obligations of its predecessor hereunder, with like effect as
if originally named as trustee herein; but on the written request of the Company
or of the successor trustee, the Trustee ceasing to act shall, upon payment of
any amounts then due it pursuant to the provisions of Section 7.7, execute and
deliver an instrument transferring to such successor trustee all the rights and
powers of the Trustee so ceasing to act. Upon request of any such successor
trustee, the Company shall execute any and all instruments in writing for more
fully
35
and certainly vesting in and confirming to such successor trustee all such
rights and powers. Any Trustee ceasing to act shall, nevertheless, retain a lien
upon all property and funds held or collected by such trustee as such, except
for funds held in trust for the benefit of holders of particular Notes, to
secure any amounts then due it pursuant to the provisions of Section 7.7.
No successor trustee shall accept appointment as provided in this Section
7.12 unless at the time of such acceptance such successor trustee shall be
qualified under the provisions of Section 7.9 and eligible under the provisions
of Section 7.10.
Upon acceptance of appointment by a successor trustee as provided in this
Section 7.12, the Company shall mail or cause to be mailed notice of the
succession of such Trustee hereunder to the holders of Notes at their addresses
as they shall appear on the Note register. If the Company fails to mail such
notice within ten days after acceptance of appointment by the successor trustee,
the successor trustee shall cause such notice to be mailed at the expense of the
Company.
Section 7.13 Successor, by Merger, Etc. Any corporation into which the
Trustee may be merged or converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or consolidation to which the
Trustee shall be a party, or any corporation succeeding to all or substantially
all of the corporate trust business of the Trustee, shall be the successor to
the Trustee hereunder without the execution or filing of any paper or any
further act on the part of any of the parties hereto; provided such corporation
shall be qualified under the provisions of Section 7.9 and eligible under the
provisions of Section 7.10.
Section 7.14 Limitation on Rights of Trustee as Creditor. If and when the
Trustee shall be or become a creditor of the Company (or any other obligor upon
the Notes) and the Trust Indenture Act is applicable hereto, the Trustee shall
be subject to the provisions of Trust Indenture Act Section 311(a) or, if
applicable, Trust Indenture Act Section 311(b) regarding the collection of the
claims against the Company (or any such other obligor).
ARTICLE VIII
CONCERNING THE NOTEHOLDERS
Section 8.1 Action by Noteholders. Whenever in this Indenture it is
provided that the holders of a specified percentage in aggregate principal
amount of the Notes may take any action (including the making of any demand or
request, the giving of any notice, consent or waiver or the taking of any other
action), the fact that at the time of taking any such action, the holders of
such specified percentage have joined therein may be evidenced (a) by any
instrument or any number of instruments of similar tenor executed by Noteholders
in person or by agent or proxy appointed in writing, (b) by the record of the
holders of Notes voting in favor thereof at any meeting of Noteholders duly
called and held in accordance with the provisions of Article IX or (c) by a
combination of such instrument or instruments and any such record of such a
meeting of Noteholders. Whenever the Company or the Trustee solicits the taking
of any action by the holders of the Notes, the Company or the Trustee may fix in
advance of such solicitation, a date as the record date for determining holders
entitled to take such action. The record date shall be not more than 15 days
prior to the date of commencement of solicitation of such action.
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Section 8.2 Proof of Execution by Noteholders. Subject to the provisions of
Sections 7.1, 7.2 and 9.5, proof of the execution of any instrument by a
Noteholder or by agent or proxy shall be sufficient if made in accordance with
such reasonable rules and regulations as may be prescribed by the Trustee or in
such manner as shall be satisfactory to the Trustee. The holding of Notes shall
be proved by the Note register or by a certificate of the Note registrar.
The record of any Noteholders' meeting shall be proved in the manner
provided in Section 9.5.
Section 8.3 Who Are Deemed Absolute Owners. The Company, the Trustee, any
paying agent, any conversion agent and any Note registrar may deem the person in
whose name such Note shall be registered upon the books of the Company to be,
and may treat such person as, the absolute owner of such Note (whether or not
such Note shall be overdue and notwithstanding any notation of ownership or
other writing thereon) for the purpose of receiving payment of or on account of
the principal of, premium, if any, and interest on such Note, for conversion of
such Note and for all other purposes; and neither the Company nor the Trustee
nor any paying agent nor any conversion agent nor any Note registrar shall be
affected by any notice to the contrary. All such payments so made to any holder
for the time being, or upon order of such holder, shall be valid and, to the
extent of the sum or sums so paid, effectual to satisfy and discharge the
liability for monies payable upon any such Note.
The Depositary shall be deemed to be the owner of any global Note for all
purposes, including receipt of notices to Noteholders and payment of principal
of, premium, if any, and interest on the Notes. None of the Company, the Trustee
(in its capacity as Trustee), any paying agent or the Note registrar (or
co-registrar) shall have any responsibility for any aspect of the records
relating to or payments made on account of beneficial interests of a global Note
or for maintaining, supervising or reviewing any records relating to such
beneficial ownership interests; provided that the foregoing shall not apply to
the Trustee or any other person acting in its capacity as Custodian.
Section 8.4 Company-Owned Notes Disregarded. In determining whether the
holders of the requisite aggregate principal amount of Notes have concurred in
any direction, consent, waiver or other action under this Indenture, Notes that
are owned by the Company or any other obligor on the Notes or by any person
directly or indirectly controlling or controlled by or under direct or indirect
common control with the Company or any other obligor on the Notes shall be
disregarded and deemed not to be outstanding for the purpose of any such
determination; provided that for the purposes of determining whether the Trustee
shall be protected in relying on any such direction, consent, waiver or other
action, only Notes that a Responsible Officer actually knows are so owned shall
be so disregarded. Notes so owned that have been pledged in good faith may be
regarded as outstanding for the purposes of this Section 8.4 if the pledgee
shall establish to the satisfaction of the Trustee the xxxxxxx'x right to vote
such Notes and that the pledgee is not the Company, any other obligor on the
Notes or a person directly or indirectly controlling or controlled by or under
direct or indirect common control with the Company or any such other obligor. In
the case of a dispute as to such right, any decision by the Trustee taken upon
the advice of counsel shall be full protection to the Trustee. Upon request of
the Trustee,
37
the Company shall furnish to the Trustee promptly an Officers' Certificate
listing and identifying all Notes, if any, known by the Company to be owned or
held by or for the account of any of the above described persons; and subject to
Section 7.1, the Trustee shall be entitled to accept such Officers' Certificate
as conclusive evidence of the facts therein set forth and of the fact that all
Notes not listed therein are outstanding for the purpose of any such
determination.
Section 8.5 Revocation of Consents, Future Holders Bound. At any time prior
to (but not after) the evidencing to the Trustee, as provided in Section 8.1, of
the taking of any action by the holders of the percentage in aggregate principal
amount of the Notes specified in this Indenture in connection with such action,
any holder of a Note that is shown by the evidence to be included in the Notes
the holders of which have consented to such action may, by filing written notice
with the Trustee at its Corporate Trust Office and upon proof of holding as
provided in Section 8.2, revoke such action so far as concerns such Note. Except
as aforesaid, any such action taken by the holder of any Note shall be
conclusive and binding upon such holder and upon all future holders and owners
of such Note and of any Notes issued in exchange or substitution therefor,
irrespective of whether any notation in regard thereto is made upon such Note or
any Note issued in exchange or substitution therefor.
ARTICLE IX
NOTEHOLDERS' MEETINGS
Section 9.1 Purposes for Which Meetings May be Called. A meeting of
Noteholders may be called at any time and from time to time pursuant to the
provisions of this Article IX for any of the following purposes:
(a) to give any notice to the Company or to the Trustee, or to give
any directions to the Trustee, or to consent to the waiving of any default
hereunder and its consequences, or to take any other action authorized to
be taken by Noteholders pursuant to any of the provisions of Article VI;
(b) to remove the Trustee and appoint a successor trustee pursuant to
the provisions of Article VII;
(c) to consent to the execution of an indenture or indentures
supplemental hereto pursuant to the provisions of Section 10.2; or
(d) to take any other action authorized to be taken by or on behalf of
the holders of any specified aggregate principal amount of the Notes under
any other provisions of this Indenture or under applicable law.
Section 9.2 Manner of Calling Meetings; Record Date. The Trustee may at any
time call a meeting of Noteholders to take any action specified in Section 9.1,
to be held at such time and at such place in the City of New York, State of New
York, as the Trustee shall determine. Notice of every meeting of the
Noteholders, setting forth the time and the place of such meeting and in general
terms the action proposed to be taken at such meeting, shall be mailed not less
than 30 nor more than 60 days prior to the date fixed for the meeting to such
Noteholders at their
38
addresses as such addresses appear in the Note register. For the purpose of
determining Noteholders entitled to notice of any meeting of Noteholders, the
Trustee shall fix in advance a date as the record date for such determination,
such date to be a Business Day not more than ten days prior to the date of the
mailing of such notice as hereinabove provided. Only persons in whose name any
Note shall be registered in the Note register at the close of business on a
record date fixed by the Trustee as aforesaid, or by the Company or the
Noteholders as provided in Section 9.3, shall be entitled to notice of the
meeting of Noteholders with respect to which such record date was so fixed.
Section 9.3 Call of Meeting by Company or Noteholders. In case at any time
the Company, pursuant to a resolution of its Board of Directors or the holders
of at least 10% in aggregate principal amount of the Notes then outstanding
shall have requested the Trustee to call a meeting of Noteholders to take any
action authorized in Section 9.1 by written request setting forth in reasonable
detail the action proposed to be taken at the meeting, and the Trustee shall not
have mailed notice of such meeting within 20 days after receipt of such request,
then the Company or the holders of Notes in the amount above specified, as the
case may be, may fix the record date with respect to, and determine the time and
the place for, such meeting and may call such meeting to take any action
authorized in Section 9.1, by mailing notice thereof as provided in Section 9.2.
The record date fixed as provided in the preceding sentence shall be set forth
in a written notice to the Trustee and shall be a Business Day not less than 15
nor more than 20 days after the date on which the original request is sent to
the Trustee.
Section 9.4 Who May Attend and Vote at Meetings. Only persons entitled to
receive notice of a meeting of Noteholders and their respective proxies duly
appointed by an instrument in writing shall be entitled to vote at such meeting.
The only persons who shall be entitled to be present or to speak at any meeting
of Noteholders shall be the persons entitled to vote at such meeting and their
counsel and any representatives of the Trustee and its counsel and any
representatives of the Company and its counsel. When a determination of
Noteholders entitled to vote at any meeting of Noteholders has been made as
provided in this Section 9.4, such determination shall apply to any adjournments
thereof.
Section 9.5 Manner of Voting at Meetings and Record To Be Kept. The vote
upon any resolution submitted to any meeting of Noteholders shall be by written
ballots on each of which shall be subscribed the signature of the Noteholder or
proxy casting such ballot and the identifying number or numbers of the Notes
held or represented in respect of which such ballot is cast. The chairman of the
meeting shall appoint two inspectors of votes who shall count all votes cast at
the meeting for or against any resolution and who shall make and file with the
secretary of the meeting their verified written reports in duplicate of all
votes cast at the meeting. A record in duplicate of the proceedings of each
meeting of Noteholders shall be prepared by the secretary of the meeting and
there shall be attached to said record the original reports of the inspectors of
votes on any vote by ballot taken thereat and affidavits by one or more persons
having knowledge of the facts setting forth a copy of the notice of the meeting
and showing that said notice was mailed as provided in Section 9.2. The record
shall show the identifying numbers of the Notes voting in favor of or against
any resolution. Each counterpart of such record shall be signed and verified by
the affidavits of the chairman and secretary of the meeting and one of the
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counterparts shall be delivered to the Company and the other to the Trustee to
be preserved by the Trustee.
Any counterpart record so signed and verified shall be conclusive evidence
of the matters therein stated and shall be the record referred to in clause (b)
of Section 8.1.
Section 9.6 Exercise of Rights of Trustee and Noteholders Not To Be
Hindered or Delayed. Nothing in this Article IX contained shall be deemed or
construed to authorize or permit, by reason of any call of a meeting of
Noteholders or any rights expressly or impliedly conferred hereunder to make
such call, any hindrance or delay in the exercise of any right or rights
conferred upon or reserved to the Trustee or to the Noteholders under any of the
provisions of this Indenture or of the Notes.
ARTICLE X
SUPPLEMENTAL INDENTURES
Section 10.1 Supplemental Indentures Without Consent of Noteholders. The
Company, when authorized by a Board Resolution, and the Trustee may from time to
time and at any time enter into an indenture or indentures supplemental hereto
for one or more of the following purposes:
(a) to make provision with respect to the conversion rights of the
holders of Notes pursuant to the requirements of Section 14.6;
(b) subject to Article XV, to convey, transfer, assign, mortgage or
pledge to the Trustee, as security for the Notes, any property or assets;
(c) to evidence the succession of another person to the Company, or
successive successions, and the assumption by the Successor Company of the
covenants, agreements and obligations of the Company pursuant to Article
XI;
(d) to add to the covenants of the Company such further covenants,
restrictions or conditions as the Board of Directors and the Trustee shall
consider to be for the benefit of the holders of Notes and to make the
occurrence, or the occurrence and continuance, of a default in any such
additional covenants, restrictions or conditions a default or an Event of
Default permitting the enforcement of all or any of the several remedies
provided in this Indenture; provided that in respect of any such additional
covenant, restriction or condition, such supplemental indenture may provide
for a particular period of grace after default (which period may be shorter
or longer than that allowed in the case of other defaults) or may provide
for an immediate enforcement upon such default or may limit the remedies
available to the Trustee upon such default;
(e) to provide for the issuance under this Indenture of Notes in
coupon form (including Notes registrable as to principal only) and to
provide for exchangeability of such Notes with the Notes issued hereunder
in fully registered form and to make all appropriate changes for such
purpose;
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(f) to cure any ambiguity or to correct or supplement any provision
contained herein or in any supplemental indenture that may be defective or
inconsistent with any other provision contained herein or in any
supplemental indenture, or to make such other provisions in regard to
matters or questions arising under this Indenture that shall not adversely
affect the interests of the holders of the Notes;
(g) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Notes; or
(h) to modify, eliminate or add to the provisions of this Indenture to
such extent necessary to effect the qualification of this Indenture under
the Trust Indenture Act (if applicable), or under any similar federal
statute hereafter enacted (if applicable).
In addition to the foregoing, prior to the issuance of any Notes hereunder,
the Company, when authorized by a Board Resolution, and the Trustee, may enter
into an indenture or indenture supplemental hereto, for the purposes of the
following:
(a) specifying the percentage of the principal amount at which notes
will be issued, and if other than the principal amount of those notes, the
portion of the principal amount payable upon declaration of acceleration of
the maturity of the notes;
(b) specifying the date or dates, or method of determining the date or
dates, on which the principal of the notes will be payable;
(c) specifying the rate or rates at which the notes will bear interest
and the method of computation of interest;
(d) specifying the rate or rates at which the notes may be converted
into our common stock;
(e) specifying the date or dates, or the method for determining the
date or dates, from which interest will accrue, the dates on which interest
will be payable, the regular record dates for interest payment dates; or
the method by which record dates may be determined, the persons to whom
interest will be payable, and the basis on which interest is to be
calculated if other than a 360-day year;
(f) specifying the period or periods within which, the price or prices
at which and the other terms and conditions upon which the notes may be
redeemed, in whole or part, at the option of the Company, if the Company is
to have such option;
(g) conforming the forms of Notes attached as Exhibits A and B hereto
to Notes authorized by a Board Resolution and set forth in a supplemental
indenture;
(h) provisions, if any, granting special rights to the Noteholders;
(i) specifying any deletions from, modifications of or additions to
the Events of Default, covenants of the Company, provisions related to
redemption or repurchase of the Notes set forth in Article III, provisions
related to consolidation, merger, sale, conveyance,
41
transfer and lease set forth in Article XI, provisions related to
conversion of the notes set forth in Article XIV and additional provisions
relating to the subordination provisions in Article XV;
(j) any other terms or modifications to the Indenture necessary to
reflect the terms of the notes described in any prospectus supplement
pursuant to which the Notes are offered; and
(k) any other provision not inconsistent with the terms of the
Indenture.
The Trustee is hereby authorized to join with the Company in the execution
of any such supplemental indenture, to make any further appropriate agreements
and stipulations that may be therein contained and to accept the conveyance,
transfer and assignment of any property thereunder, but the Trustee shall not be
obligated to, but may in its discretion, enter into any supplemental indenture
that affects the Trustee's own rights, duties, protections, privileges,
liabilities or immunities under this Indenture or otherwise.
Any supplemental indenture authorized by the provisions of this Section
10.1 may be executed by the Company and the Trustee without the consent of the
holders of any of the Notes at the time outstanding, notwithstanding any of the
provisions of Section 10.2.
Section 10.2 Supplemental Indentures With Consent of Noteholders. With the
consent (evidenced as provided in Article VIII) of the holders of not less than
a majority in aggregate principal amount of the Notes at the time outstanding,
the Company, when authorized by a Board Resolution and the Trustee may from time
to time and at any time enter into an indenture or indentures supplemental
hereto for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Indenture or any supplemental
indenture or of modifying in any manner the rights of the holders of the Notes;
provided that, without the consent of the holders of all Notes then outstanding,
no such supplemental indenture shall (a) extend the fixed maturity of any Note,
or reduce the rate or extend the time of payment of interest thereon, or reduce
the principal amount thereof or premium, if any, thereon or reduce any amount
payable on redemption thereof, alter the obligation of the Company to redeem the
Notes at the option of the holder upon the occurrence of a Change of Control or
impair or affect the right of any Noteholder to institute suit for the payment
thereof or make the principal thereof or interest or premium, if any, thereon
payable in any coin or currency other than that provided in the Notes, modify
the subordination provisions in a manner adverse to the holders of the Notes, or
impair the right to convert the Notes into Common Stock subject to the terms set
forth herein without the consent of the holder of each Note so affected or (b)
reduce the aforesaid percentage of Notes, the holders of which are required to
consent to any such supplemental indenture.
Upon the request of the Company, accompanied by a copy of a Board
Resolution certified by its Secretary or Assistant Secretary authorizing the
execution of any such supplemental indenture, and upon the filing with the
Trustee of evidence of the consent of Noteholders as aforesaid, the Trustee
shall join with the Company in the execution of such supplemental indenture
unless such supplemental indenture affects the Trustee's own rights, duties,
protections, privileges, liability or immunities under this Indenture or
otherwise, in which case the Trustee may in its discretion, but shall not be
obligated to, enter into such supplemental indenture.
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It shall not be necessary for the consent of the Noteholders under this
Section 10.2 to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such consent shall approve the
substance thereof.
Section 10.3 Effect of Supplemental Indentures. Any supplemental indenture
executed pursuant to the provisions of this Article X shall comply with the
Trust Indenture Act, as then in effect, if such supplemental indenture is then
required to so comply. Upon the execution of any supplemental indenture pursuant
to the provisions of this Article X, this Indenture shall be and be deemed to be
modified and amended in accordance therewith and the respective rights,
limitation of rights, obligations, duties and immunities under this Indenture of
the Trustee, the Company and the holders of Notes shall thereafter be
determined, exercised and enforced hereunder subject in all respects to such
modifications and amendments and all the terms and conditions of any such
supplemental indenture shall be and be deemed to be part of the terms and
conditions of this Indenture for any and all purposes.
Section 10.4 Notation on Notes. Notes authenticated and delivered after the
execution of any supplemental indenture pursuant to the provisions of this
Article X may bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture, but they need not do so. If the
Company or the Trustee shall determine to add such a notation, new Notes so
modified as to conform, in the opinion of the Trustee and the Board of
Directors, to any modification of this Indenture contained in any such
supplemental indenture may, at the Company's expense, be prepared and executed
by the Company, authenticated by the Trustee (or an authenticating agent duly
appointed by the Trustee pursuant to Section 16.13) and delivered in exchange
for the Notes then outstanding, upon surrender of such Notes then outstanding.
Section 10.5 Evidence of Compliance of Supplemental Indenture To Be
Furnished Trustee. The Trustee shall be furnished with and, subject to the
provisions of Sections 7.1 and 7.2, may rely upon an Officers' Certificate and
an Opinion of Counsel as conclusive evidence that any supplemental indenture
executed pursuant hereto complies with the requirements of this Article X.
ARTICLE XI
CONSOLIDATION, MERGER, SALE, CONVEYANCE,
TRANSFER AND LEASE
Section 11.1 Company May Consolidate, Etc. on Certain Terms. The Company
shall not consolidate with or merge with or into, or convey, transfer or lease
all or substantially all of its assets (determined on a consolidated basis),
whether in a single transaction or a series of related transactions, to any
person unless: (a) either the Company is the resulting, surviving or transferee
person (the "Successor Company") or the Successor Company is a person organized
and existing under the laws of the United States or any State thereof or the
District of Columbia, and the Successor Company (if not the Company) expressly
assumes by a supplemental indenture, executed and delivered to the Trustee, in
form satisfactory to the Trustee, all the obligations of the Company under this
Indenture and the Notes, including the rights pursuant to Article XIV hereof,
(b) immediately after giving effect to such transaction, no Event of Default
43
has happened and is continuing and (c) the Company delivers to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that such
consolidation, merger or transfer and such supplemental indenture (if any)
comply with this Indenture.
Section 11.2 Successor Company To Be Substituted. In case of any such
consolidation, merger, sale, conveyance, transfer or lease and upon the
assumption by the Successor Company, by supplemental indenture, executed and
delivered to the Trustee and satisfactory in form to the Trustee, of the due and
punctual payment of the principal of, premium, if any, and interest on all of
the Notes and the due and punctual performance of all of the covenants and
conditions of this Indenture to be performed by the Company, such Successor
Company shall succeed to and be substituted for the Company, with the same
effect as if it had been named herein as the party hereto. When a Surviving
Person duly assumes all the obligations of the Company pursuant to their
Indenture and the Notes, the predecessor shall be released from all such
obligations.
Section 11.3 Opinion of Counsel To Be Given to Trustee. The Trustee,
subject to Sections 7.1 and 7.2, shall receive an Officers' Certificate and an
Opinion of Counsel as conclusive evidence that any such consolidation, merger,
sale, conveyance, transfer or lease and any such assumption complies with the
provisions of this Article XI.
ARTICLE XII
SATISFACTION AND DISCHARGE OF INDENTURE;
UNCLAIMED MONIES
Section 12.1 Legal Defeasance and Covenant Defeasance of the Notes.
(a) The Company may, at its option by Board Resolution, at any time, with
respect to the Notes, elect to have either paragraph (b) or paragraph (c) below
be applied to the outstanding Notes upon compliance with the conditions set
forth in paragraph (d).
(b) Upon the Company's exercise under paragraph (a) of the option
applicable to this paragraph (b), the Company shall be deemed to have been
released and discharged from its obligations with respect to the outstanding
Notes on the date the conditions set forth below are satisfied (hereinafter,
"legal defeasance"). For this purpose, such legal defeasance means that the
Company shall be deemed to have paid and discharged the entire indebtedness
represented by the outstanding Notes, which shall thereafter be deemed to be
"outstanding" only for the purposes of the Sections of and matters under this
Indenture referred to in clauses (i) and (ii) below and to have satisfied all
its other obligations under such Notes and this Indenture insofar as such Notes
are concerned, except for the following, which shall survive until otherwise
terminated or discharged hereunder: (i) the rights of holders of outstanding
Notes to receive solely from the trust fund described in paragraph (d) below and
as more fully set forth in such paragraph, payments in respect of the principal
of, premium, if any, and interest on such Notes when such payments are due and
(ii) obligations listed in Section 12.3.
(c) Upon the Company's exercise under paragraph (a) of the option
applicable to this paragraph (c), the Company shall be released and discharged
from its obligations under any covenant contained in Sections 3.5, 4.6 and 4.9
and Article XI with respect to the
44
outstanding Notes on and after the date the conditions set forth in paragraph
(d) are satisfied (hereinafter, "covenant defeasance"), and the Notes shall
thereafter be deemed to be not "outstanding" for the purpose of any direction,
waiver, consent or declaration or act of Noteholders (and the consequences of
any thereof) in connection with such covenants, but shall continue to be deemed
"outstanding" for all other purposes hereunder. For this purpose, such covenant
defeasance means that, with respect to the outstanding Notes, the Company may
omit to comply with and shall have no liability in respect of any term,
condition or limitation set forth in any such covenant, whether directly or
indirectly, by reason of any reference elsewhere herein to any such covenant or
by reason of any reference in any such covenant to any other provision herein or
in any other document, and such omission to comply shall not constitute a
default or an Event of Default under Section 6.1, but, except as specified
above, the remainder of this Indenture and such Notes shall be unaffected
thereby.
(d) The following shall be the conditions to application of either
paragraph (b) or paragraph (c) above to the outstanding Notes:
(i) The Company shall have irrevocably deposited in trust with the
Trustee, pursuant to an irrevocable trust and security agreement in form
and substance satisfactory to the Trustee, cash or U.S. Government
Obligations maturing as to principal and interest at such times, or a
combination thereof, in such amounts as are sufficient, after giving
consideration of the reinvestment of such principal and interest and after
payment of all federal, state and local taxes or other charges or
assessments in respect thereof payable by the Trustee, in the opinion of a
nationally recognized firm of independent public accountants expressed in a
written certification thereof (in form and substance reasonably
satisfactory to the Trustee) delivered to the Trustee, to pay the principal
of, premium, if any, and interest on the outstanding Notes on the dates on
which any such payments are due and payable in accordance with the terms of
this Indenture and of the Notes;
(ii) (A) No Event of Default shall have occurred or be continuing on
the date of such deposit, and (B) no default or Event of Default under
Section 6.1(e) or 6.1(f) shall occur on or before the 123rd day after the
date of such deposit;
(iii) Such deposit shall not result in a default under this Indenture
or a breach or violation of, or constitute a default under, any other
instrument or agreement to which the Company is a party or by which it or
its property is bound;
(iv) In the case of a legal defeasance under paragraph (b) above, the
Company has delivered to the Trustee an Opinion of Counsel stating that (A)
the Company has received from, or there has been published by, the Internal
Revenue Service a ruling or (B) since the date of this Indenture, there has
been a change in the applicable federal income tax law, in either case to
the effect that, and based thereon such opinion shall confirm that, the
holders of the Notes shall not recognize income, gain or loss for federal
income tax purposes as a result of
45
such deposit, defeasance and discharge and shall be subject to federal
income tax on the same amounts and in the same manner and at the same times
as would have been the case if such deposit, defeasance and discharge had
not occurred; and, in the case of a covenant defeasance under paragraph (c)
above, the Company shall deliver to the Trustee an Officers' Certificate
and an Opinion of Counsel, in form and substance reasonably satisfactory to
the Trustee, to the effect that holders of the Notes shall not recognize
income, gain or loss for federal income tax purposes as a result of such
deposit and defeasance and shall be subject to federal income tax on the
same amounts, in the same manner and at the same times as would have been
the case if such deposit and defeasance had not occurred;
(v) The Company shall have delivered to the Trustee an Opinion of
Counsel, in form and substance reasonably satisfactory to the Trustee, to
the effect that, after the passage of 123 days following the deposit, the
trust funds shall not constitute a preferential transfer under Section
547(b) of Title 11 of the U.S. Code; and
(vi) The Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent
specified herein relating to the defeasance contemplated by this Section
12.1 have been complied with;
provided that no deposit under clause (i) shall be effective to terminate the
obligations of the Company under the Notes or this Indenture prior to the
passage of 123 days following such deposit.
Section 12.2 Termination of Obligations upon Cancellation of the Notes. In
addition to the Company's rights under Section 12.1, the Company may terminate
all of its obligations under this Indenture (subject to Section 12.3) when:
(a) (i) all Notes theretofore authenticated and delivered (other than Notes
that have been destroyed, lost or stolen and that have been replaced or paid as
provided in Section 2.6) have been delivered to the Trustee for cancellation,
and (ii) the Company has paid or caused to be paid all other sums payable
hereunder and under the Notes by the Company; or
(b) (i) the Notes not previously 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 under arrangements
satisfactory to the Trustee upon delivery of notice, (ii) the Company shall have
irrevocably deposited with the Trustee, as trust funds, cash, in an amount
sufficient to pay principal of and interest on the outstanding Notes, to
maturity or redemption, as the case may be, (iii) such deposit shall not result
in a breach or violation of, or constitute a default under, any agreement or
instrument pursuant to which the Company is a party or by which it or its
property is bound and (iv) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions related
to such defeasance have been complied with.
46
Section 12.3 Survival of Certain Obligations. Notwithstanding the
satisfaction and discharge of this Indenture and of the Notes referred to in
Section 12.1 or 12.2, the respective obligations of the Company and the Trustee
under Sections 2.3, 2.4, 2.5, 2.6, 3.1, 4.2, 5.1, 6.4, 6.9, 7.6, 7.7, 7.11,
12.5, 12.6, 12.7 and Article XIV shall survive until the Notes are no longer
Outstanding, and thereafter, the obligations of the Company and the Trustee
under Sections 6.9, 7.6, 7.7, 12.5, 12.6 and 12.7 shall survive. Nothing
contained in this Article XII shall abrogate any of the rights, obligations or
duties of the Trustee under this Indenture.
Section 12.4 Acknowledgment of Discharge by Trustee. Subject to Section
12.7, after (i) the conditions of Section 12.1 or 12.2 have been satisfied, (ii)
the Company has paid or caused to be paid all other sums payable hereunder by
the Company and (iii) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent referred to in clause (i) above relating to the satisfaction and
discharge of this Indenture have been complied with, the Trustee upon written
request shall acknowledge in writing the discharge of the Company's obligations
under this Indenture except for those surviving obligations specified in Section
12.3.
Section 12.5 Application of Trust Assets. The Trustee shall hold any cash
or U.S. Government Obligations deposited with it in the irrevocable trust
established pursuant to Section 12.1 or 12.2, as the case may be. The Trustee
shall apply the deposited cash or the U.S. Government Obligations, together with
earnings thereon in accordance with this Indenture and the terms of the
irrevocable trust agreement established pursuant to Section 12.1 or 12.2, as the
case may be, to the payment of principal of, premium, if any, and interest on
the Notes. The cash or U.S. Government Obligations so held in trust and
deposited with the Trustee in compliance with Section 12.1 or 12.2, as the case
may be, shall not be part of the trust estate under this Indenture, but shall
constitute a separate trust fund for the benefit of all holders entitled
thereto. Except as specifically provided herein, the Trustee shall not be
requested to invest any amounts held by it for the benefit of the holders or pay
interest on uninvested amounts to any holder.
The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the U.S. Government Obligations
deposited pursuant to Section 12.1 hereof or Section 12.2 hereof or the
principal and interest received in respect thereof other than any such tax, fee
or other charge which by law is for the account of the holders of outstanding
Notes.
Section 12.6 Repayment to the Company; Unclaimed Money. Subject to
applicable laws governing escheat of such property, and upon termination of the
trust established pursuant to Section 12.1 hereof or 12.2 hereof, as the case
may be, the Trustee shall promptly pay to the Company upon written request any
excess cash or U.S. Government Obligations held by it. Additionally, if amounts
for the payment of principal, premium, if any, or interest remains unclaimed for
two years, the Trustee shall pay such amounts back to the Company forthwith.
Thereafter, all liability of the Trustee with respect to such amounts shall
cease. After payment to the Company, holders entitled to such payment must look
to the Company for such payment as general creditors unless an applicable
abandoned property law designates another person.
47
Section 12.7 Reinstatement. If the Trustee is unable to apply any cash or
U.S. Government Obligations in accordance with Section 12.1 or 12.2 by reason of
any legal proceeding or by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, the Company's obligations under this Indenture and the Notes shall
be revived and reinstated as though no deposit had occurred pursuant to Section
12.1 or 12.2 until such time as the Trustee is permitted to apply all such cash
or U.S. Government Obligations in accordance with Section 12.1 or 12.2, as the
case may be; provided that if the Company makes any payment of principal of,
premium, if any, or interest on any Notes following the reinstatement of its
obligations, the Company shall be subrogated to the rights of the holders of
such Notes to receive such payment from the amounts held by the Trustee.
ARTICLE XIII
IMMUNITY OF INCORPORATORS, SHAREHOLDERS,
OFFICERS AND DIRECTORS
Section 13.1 Indenture and Notes Solely Corporate Obligations. No recourse
for the payment of the principal of, or premium, if any, or interest on any
Note, or for any claim based thereon or otherwise in respect thereof, and no
recourse under or upon any obligation, covenant or agreement of the Company in
this Indenture or in any supplemental indenture or in any Note, or because of
the creation of any indebtedness represented thereby, shall be had against any
incorporator, shareholder, officer or director, as such, past, present or
future, of the Company or of any successor entity, either directly or through
the Company or any successor entity, whether by virtue of any constitution,
statute or rule of law, or by the enforcement of any assessment or penalty or
otherwise; it being expressly understood that all such liability is hereby
expressly waived and released as a condition of, and as a consideration for, the
execution of this Indenture and the issuance of the Notes.
ARTICLE XIV
CONVERSION OF NOTES
Section 14.1 Right to Convert. Subject to and upon compliance with the
provisions of this Indenture, the holder of any Note shall have the right, at
the option of such holder, at any time through the close of business on the
Business Day immediately preceding the maturity date (except that, with respect
to any Note or portion of a Note that shall be called for redemption or
delivered for repurchase, such right shall terminate immediately prior to the
close of business on the last Business Day before the date fixed for redemption
of such Note or portion of a Note unless the Company shall default in payment
due upon redemption thereof) to convert the principal amount of any such Note,
or any portion of such principal amount that is $1,000 or an integral multiple
thereof, into that number of fully paid and nonassessable shares of Common Stock
(as such shares shall then be constituted) obtained by dividing the aggregate
principal amount of the Notes or portion thereof surrendered for conversion by
the Conversion Price in effect at such time rounded to the nearest 1/100,000th
of a share (with .0000005 being rolled upward), by surrender of the Note so to
be converted in whole or in part in the manner provided in Section 14.2. A
holder of Notes is not entitled to any rights of a holder of Common Stock
48
until such holder has converted such holder's Notes to Common Stock and only to
the extent such Notes are deemed to have been converted to Common Stock under
this Article XIV.
Section 14.2 Exercise of Conversion Privilege; Issuance of Common Stock on
Conversion; No Adjustment for Interest or Dividends. In order to exercise the
conversion privilege with respect to any Note in definitive form, the holder of
any such Note to be converted in whole or in part shall surrender such Note,
duly endorsed, at an office or agency maintained by the Company pursuant to
Section 4.2, accompanied by the funds, if any, required by the penultimate
paragraph of this Section 14.2, and shall give written notice of conversion in
the form provided on the form of Note (or such other notice that is acceptable
to the Company) to the office or agency that the holder elects to convert such
Note or the portion thereof specified in said notice. Such notice shall also
state the name or names (with address) in which the certificate or certificates
for shares of Common Stock that shall be issuable on such conversion shall be
issued and shall be accompanied by transfer taxes, if required pursuant to
Section 14.7. Each such Note surrendered for conversion shall, unless the shares
issuable on conversion are to be issued in the name of the holder of such Note
as it appears on the Note register, be duly endorsed by, or be accompanied by
instruments of transfer in form satisfactory to the Company duly executed by,
the holder or his duly authorized attorney.
In order to exercise the conversion privilege with respect to any interest
in a global Note, the beneficial holder must complete the appropriate
instruction form for conversion pursuant to the Depositary's book-entry
conversion program and follow the other procedures set forth in such program.
As promptly as practicable after satisfaction of the requirements for
conversion set forth above, subject to compliance with any restrictions on
transfer if shares issuable on conversion are to be issued in a name other than
that of the Noteholder (as if such transfer were a transfer of the Note or Notes
(or portion thereof) so converted), the Company shall issue and shall deliver to
such holder at the office or agency maintained by the Company for such purpose
pursuant to Section 4.2, a certificate or certificates for the number of full
shares issuable upon the conversion of such Note (or portion thereof) in
accordance with the provisions of this Article XIV and a check or cash in
respect of any fractional interest in respect of a share of Common Stock arising
upon such conversion, as provided in Section 14.3. In case any Note of a
denomination greater than $1,000 shall be surrendered for partial conversion,
and subject to Section 2.3, the Company shall execute and the Trustee shall
authenticate and make available for delivery to the holder of the Note so
surrendered, without charge to him, a new Note or Notes in authorized
denominations in an aggregate principal amount equal to the unconverted portion
of the surrendered Note.
Each conversion shall be deemed to have been effected as to any such Note
(or portion thereof) on the date on which the requirements set forth above in
this Section 14.2 have been satisfied as to such Note (or portion thereof), and
the person in whose name any certificate or certificates for shares of Common
Stock shall be issuable upon such conversion shall be deemed to have become on
said date the holder of record of the shares represented thereby; provided that
any such surrender on any date when the stock transfer books of the Company
shall be closed shall constitute the person in whose name the certificates are
to be issued as the record holder
49
thereof for all purposes on the next succeeding day on which such stock transfer
books are open, but such conversion shall be at the Conversion Price in effect
on the date upon which such Note shall have been surrendered.
Any Note or portion thereof surrendered for conversion during the period
from the close of business on the record date for any interest payment date
through the opening of business on the next succeeding interest payment date
shall (unless such Note or portion thereof being converted shall have been
called for redemption on a date during the period from the close of business on
or after any record date to the close of business on the corresponding payment
date) be accompanied by payment, in funds acceptable to the Company, of an
amount equal to the interest otherwise payable on such interest payment date on
the principal amount being converted; provided that no such payment need be made
if there shall exist at the time of conversion an Event of Default under
subsection (a) or (b) of Section 6.1 hereof. An amount equal to such payment
shall be paid by the Company on such interest payment date to the holder of such
Note at the close of business on such record date; provided that if the Company
shall default in the payment of interest on such interest payment date, such
amount shall be paid to the person who made such required payment. The interest
payment with respect to a Note called for redemption on a date during the period
from the close of business on or after any record date to the close of business
on the Business Day following the corresponding payment date shall be payable on
the corresponding interest payment date to the registered Noteholder at the
close of business on that record date (notwithstanding the conversion of such
Note before the corresponding interest payment date) and a Noteholder who elects
to convert need not include funds equal to the interest paid. Except as provided
above in this Section 14.2, no adjustment shall be made for interest accrued on
any Note converted or for dividends on any shares issued upon the conversion of
such Note as provided in this Article XIV.
Upon the conversion of an interest in a global Note, the Trustee, or the
Custodian at the direction of the Trustee, shall make a notation on such global
Note as to the reduction in the principal amount represented thereby.
Section 14.3 Cash Payments in Lieu of Fractional Shares. No fractional
shares of Common Stock or scrip representing fractional shares shall be issued
upon conversion of Notes. If more than one Note shall be surrendered for
conversion at one time by the same holder, the number of fully paid and
non-assessable shares of Common Stock issuable upon conversion of a Note shall
be determined by dividing the aggregate principal amount of the Note or portion
thereof surrendered for conversion by the Conversion Price in effect at such
time. The aggregate number of shares of Common Stock issuable upon conversion
shall be rounded to the nearest 1/100,000th of a share (with .0000005 being
rolled upward). If any fractional share of stock would be issuable upon the
conversion of any Note or Notes, the Company shall make an adjustment therefor
in cash at the current market value thereof. The current market value of a share
of Common Stock shall be determined by multiplying the fractional share by the
Closing Price on the Trading Day immediately preceding the date on which the
Notes (or specified portions thereof) are deemed to have been converted.
50
Section 14.4 Conversion Price. The Conversion Price shall be as specified
in the forms of Notes (herein called the "Conversion Price") attached as
Exhibits A and B hereto, subject to adjustment as provided in this Article XIV.
Section 14.5 Adjustment of Conversion Price. The Conversion Price shall be
adjusted from time to time by the Company as follows:
(a) In case the Company shall (i) pay a dividend or make a
distribution on its Common Stock in shares of its Common Stock, (ii)
subdivide or split its outstanding Common Stock into a greater number of
shares, (iii) combine its outstanding Common Stock into a smaller number of
shares or (iv) issue any shares of Capital Stock by reclassification of its
Common Stock, the Conversion Price in effect immediately prior thereto
shall be adjusted so that the Noteholder of any Notes thereafter
surrendered for conversion shall be entitled to receive the number of
shares of Common Stock or other shares of Capital Stock of the Company that
such Noteholder would have owned or have been entitled to receive after the
occurrence of any of the events described above had such Notes been
surrendered for conversion immediately prior to the occurrence of such
event or the Record Date therefor, whichever is earlier. An adjustment made
pursuant to this subsection (a) shall become effective immediately after
the close of business on the Record Date for determination of shareholders
entitled to receive such dividend or distribution in the case of a dividend
or distribution (except as provided in Section 14.5(k)) and shall become
effective immediately after the close of business on the effective date in
the case of a subdivision, split, combination or reclassification. Any
shares of Common Stock issuable in payment of a dividend shall be deemed to
have been issued immediately prior to the close of business on the Record
Date for such dividend for purposes of calculating the number of
outstanding shares of Common Stock under Sections 14.5(b) and (c).
(b) In case the Company shall issue rights, options or warrants to all
holders of its outstanding shares of Common Stock entitling them (for a
period expiring within 45 days after the date fixed for determination of
shareholders entitled to receive such rights, options or warrants) to
subscribe for or purchase shares of Common Stock at a price per share less
than the Current Market Price on the Record Date fixed for determination of
shareholders entitled to receive such rights, options 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 day after the Record Date by a fraction 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 that the
aggregate offering price of the total number of shares so offered would
purchase at such Current Market Price, and 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. Such adjustment shall
become effective immediately after the opening of business on the day
following the Record Date fixed for determination of shareholders entitled
to receive such rights, options or warrants. To the extent that shares of
Common Stock are not delivered after the expiration or termination of such
rights, options or warrants, the Conversion Price shall be readjusted to
the Conversion Price that would then be in effect had the adjustments made
upon the issuance of such rights, options or warrants been made on the
basis of delivery of only the number of shares of Common Stock actually
delivered. In the event that such rights, options or warrants are not so
issued, the Conversion Price shall again be adjusted to be the Conversion
51
Price that would then be in effect if such date fixed for the determination
of shareholders entitled to receive such rights, options or warrants had
not been fixed. In determining whether any rights, options 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 all consideration received for such rights, options or warrants,
the value of such consideration, if other than cash, to be determined by
the Board of Directors.
(c) In case outstanding shares of Common Stock shall be subdivided
into a greater number of shares of Common Stock, the Conversion 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.
(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 14.5(a)
applies) or evidences of its indebtedness or assets (including securities,
but excluding any rights, options or warrants referred to in Section
14.5(b), and excluding any dividend or distribution (i) in connection with
the liquidation, dissolution or winding-up of the Company, whether
voluntary or involuntary, (ii) exclusively in cash or (iii) referred to in
Section 14.5(a) (any of the foregoing hereinafter in this Section 14.5(d)
called the "Securities")), then, in each such case, 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 with respect to such distribution by a
fraction of which the numerator shall be the Current Market Price on such
date less the fair market value (as determined by the Board of Directors,
whose determination shall be conclusive and described in a Board
Resolution) on such date of the portion of the Securities so distributed
applicable to one share of Common Stock and the denominator shall be such
Current Market Price, such reduction to become effective immediately prior
to the opening of business on the day following the Record Date; provided
that in the event the then fair market value (as so determined) of the
portion of the Securities so distributed applicable to one share of Common
Stock is equal to or greater than the Current Market Price on the Record
Date, in lieu of the foregoing adjustment, adequate provision shall be made
so that each Noteholder shall have the right to receive upon conversion the
amount of Securities such holder would have received had such holder
converted each Note on such 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 that would then be in effect if such
dividend or distribution had not been declared. If the Board of Directors
determines the fair market value of any distribution for purposes of this
Section 14.5(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 used in
computing the Current Market Price pursuant to Section 14.5(g) to the
extent possible.
52
Notwithstanding the foregoing provisions of this Section 14.5(d), no
adjustment shall be made hereunder for any distribution of Securities if
the Company makes proper provision so that each Noteholder who converts a
Note (or any portion thereof) after the Record Date for determination of
shareholders entitled to receive such distribution shall be entitled to
receive upon such conversion, in addition to the shares of Common Stock
issuable upon such conversion, the amount and kind of Securities that such
holder would have been entitled to receive if such holder had, immediately
prior to such Record Date, converted such Note into Common Stock; provided
that, with respect to any Securities that are convertible, exchangeable or
exercisable, the foregoing provision shall only apply to the extent (and so
long as) the Securities receivable upon conversion of such Note would be
convertible, exchangeable or exercisable, as applicable, without any loss
of rights or privileges for a period of at least 60 days following
conversion of such Note.
Rights, options 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 specified
circumstances), which rights, options or warrants, until the occurrence of
a specified event or events (the "Trigger Event") (i) are deemed to be
transferred with such shares of Common Stock, (ii) are not exercisable and
(iii) are also issued in respect of future issuances of Common Stock, shall
not be deemed distributed for purposes of this Section 14.5(d) (and no
adjustment to the Conversion Price under this Section 14.5(d) shall be
required) until the occurrence of the earliest Trigger Event. In addition,
in the event of any distribution of rights, options or warrants, or any
Trigger Event with respect thereto, that shall have resulted in an
adjustment to the Conversion Price under this Section 14.5(d), (1) in the
case of any such rights, options or warrants that 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, options or warrants (assuming such holder had
retained such rights, options or warrants), made to all holders of Common
Stock as of the date of such redemption or repurchase, and (2) in the case
of such rights, options or warrants all of which shall have expired or been
terminated without exercise by any holder thereof, the Conversion Price
shall be readjusted as if such issuance had not occurred.
For purposes of this Section 14.5(d) and Sections 14.5(a) and (b), any
dividend or distribution to which this Section 14.5(d) is applicable that
also includes shares of Common Stock, or rights, options or warrants to
subscribe for or purchase shares of Common Stock (or both), shall be deemed
instead to be (i) a dividend or distribution of the evidences of
indebtedness, assets or shares of Capital Stock other than such shares of
Common Stock or rights, options or warrants (and any Conversion Price
reduction required by this Section 14.5(d) with respect to such dividend or
distribution shall then be made) immediately followed by (ii) a dividend or
distribution of such shares of Common Stock or such rights, options or
warrants (and any further Conversion Price reduction required by Sections
14.5(a) and (b) with respect to such dividend or distribution shall then be
made) except (1) the Record Date of such dividend or distribution shall be
substituted as "the date fixed for the determination of shareholders
entitled to receive such dividend or distribution" and "the date fixed for
such determination" within the meaning of Sections 14.5(a) and (b) and (2)
any shares of Common Stock included in such
53
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 14.5(a).
(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 merger or consolidation to which Section 14.6 applies or
as part of a distribution referred to in Section 14.5(d) for which an
adjustment to the Conversion Price is provided therein) in an aggregate
amount that, together with (i) the aggregate amount of any other such
distributions to all holders of its 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 14.5(e) has
been made, and (ii) the aggregate of any cash plus the fair market value
(as determined by the Board of Directors, whose determination shall be
conclusive and described 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 payment of such distribution, and in respect of which
no adjustment pursuant to Section 14.5(f) has been made, exceeds 20.0% of
the product of the Current Market Price (determined as provided in Section
14.5(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,
unless the Company elects to reserve such cash for distribution to the
holders of the Notes upon the conversion of the Notes so that any such
holder converting Notes shall receive upon such conversion, in addition to
the shares of Common Stock to which such holder is entitled, the amount of
cash (without any adjustment for interest) that such holder would have
received if such holder had, immediately prior to the Record Date for such
distribution of cash, converted its Notes into Common Stock, 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 date by a fraction (1) 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 20.0%
and (y) the number of shares of Common Stock outstanding on the Record Date
and (2) the denominator of which shall be equal to the Current Market Price
on such date; provided that in the event the portion of the cash so
distributed applicable to one share of Common Stock is equal to or greater
than the Current Market Price of the Common Stock on the Record Date, in
lieu of the foregoing adjustment, adequate provision shall be made so that
each Noteholder shall have the right to receive upon conversion the amount
of cash (without interest) such holder would have received had such holder
converted each Note on the 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 that 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 shareholders (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 described in a Board Resolution) that combined together with
(1) the aggregate of the cash plus the fair market value (as determined by
the Board of Directors, whose determination shall be conclusive and
described in a Board Resolution), as
54
of the expiration of such tender offer, of consideration payable in respect
of any other tender offer, 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 14.5(f) has been made, and (ii) 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 14.5(e) has been made, exceeds 20.0% of the product of
the Current Market Price 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 the close of business on the date of the
Expiration Time by a fraction of which the numerator shall be the number of
shares of Common Stock outstanding (including any tendered shares) on the
Expiration Time multiplied by the Current Market Price of the Common Stock
on the Trading Day next succeeding the Expiration Time and the denominator
shall be the sum of (1) the fair market value (determined as aforesaid) of
the aggregate consideration payable to shareholders 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 (2) 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 to become effective
immediately prior to the opening of business on the day following the
Expiration Time. In the event that the Company is obligated to purchase
shares pursuant to any such tender 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 that would then be in effect if such tender offer had
not been made.
(g) For purposes of this Section 14.5, the following terms shall have
the meaning indicated:
(i) "Closing Price" with respect to any securities on any day
shall mean the closing sale price regular way on such day or, in case
no such sale takes place on such day, the average of the reported
closing bid and asked prices, regular way, in each case on the New
York Stock Exchange, or, if such security is not listed or admitted to
trading on such Exchange, on the principal national security exchange
or quotation system on which such security is quoted or listed or
admitted to trading, or, if not quoted or listed or admitted to
trading on any national securities exchange or quotation system, the
average of the closing bid and asked prices of such security on the
over-the-counter market on the day in question as reported by the
National Quotation Bureau Incorporated, or a similar generally
accepted reporting service, or if not so available, in such manner as
furnished by any New York Stock Exchange member firm selected from
time to time by the Board of Directors for that purpose, or a price
determined in good
55
faith by the Board of Directors, whose determination shall be
conclusive and described in a Board Resolution.
(ii) "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 that
(1) if the "ex" date (as hereinafter defined) for any event (other
than the issuance or distribution or other event requiring such
computation) that requires an adjustment to the Conversion Price
pursuant to Section 14.5(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, (2) if the "ex" date for any event (other than the
issuance, distribution or other event requiring such computation) that
requires an adjustment to the Conversion Price pursuant to Section
14.5(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 (3) if the "ex" date for the issuance,
distribution or other event requiring such computation is prior to the
day in question, after taking into account any adjustment required
pursuant to clause (1) or (2) 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 14.5(d) or (f),
whose determination shall be conclusive and described 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 14.5(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 that if the
"ex" date for any event (other than the tender or exchange offer
requiring such computation) that requires an adjustment to the
Conversion Price pursuant to Section 14.5(a), (b), (c), (d), (e) or
(f) occurs on or after the Expiration Time for the tender or exchange
offer requiring such computation and prior to the day in question, the
Closing Price for each Trading Day on and after the "ex" date for such
other event shall be adjusted by multiplying such Closing Price by the
reciprocal of the fraction by which the Conversion Price is so
required to be adjusted as a result of such other event. For purposes
of this paragraph, the term "ex" date, (x) when used with respect to
any issuance or distribution, means the first date on which the Common
Stock trades regular way on the relevant exchange or in the relevant
market from which the Closing Price was obtained without the right to
receive such issuance or distribution, (y) when used with respect to
any subdivision or combination of shares of Common Stock, means the
first date on which the Common Stock trades
56
regular way on such exchange or in such market after the time at which
such subdivision or combination becomes effective and (z) when used
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 of such offer. Notwithstanding the
foregoing, whenever successive adjustments to the Conversion Price are
called for pursuant to this Section 14.5, such adjustments shall be
made to the Current Market Price as may be necessary or appropriate to
effectuate the intent of this Section 14.5 and to avoid unjust or
inequitable results as determined in good faith by the Board of
Directors.
(iii) "Fair market value" shall mean the amount that a willing
buyer would pay a willing seller in an arm's-length transaction.
(iv) "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 shareholders
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).
(v) "Trading Day" shall mean (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
or (2) if the applicable security is quoted on the Nasdaq National
Market, a day on which trades may be made thereon or (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.
(h) The Company may make such reductions in the Conversion Price, in
addition to those required by Sections 14.5(a), (b), (c), (d), (e) and (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 Business Days, the reduction is irrevocable during
the period and the Board of Directors shall have made a determination that
such reduction would be in the best interests of the Company, which
determination shall be conclusive and described in a Board Resolution.
Whenever the Conversion Price is reduced pursuant to the preceding
sentence, the Company shall mail to the Trustee and all holders of record
of the Notes 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 it shall be in effect.
57
(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 that any adjustments that by reason of this Section
14.5(i) are not required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations under this Article
XIV shall be made by the Company and shall be made to the nearest 1/100,000
(with 0.0000005 being rolled upward).
No adjustment need be made for a change in the par value, or to or
from no par value, of the Common Stock.
To the extent the Notes become convertible into cash, assets, property
or securities (other than Common Stock of the Company), no adjustment need
be made thereafter as to the cash, assets, property or such securities
(except as such securities may otherwise by their terms provide), and
interest shall not accrue on such cash.
(j) Whenever the Conversion Price is adjusted as herein provided, the
Company shall promptly file with the Trustee and any conversion agent other
than the Trustee an Officers' Certificate setting forth the Conversion
Price both before and after such adjustment and setting forth in reasonable
detail the facts upon which such adjustment is based. Promptly after
delivery of such certificate, the Company shall prepare a notice of such
adjustment of the Conversion Price setting forth the adjusted Conversion
Price and the date on which each adjustment becomes effective and shall
mail such notice of such adjustment of the Conversion Price to the holder
of each Note at his last address appearing on the Note register provided
for in Section 2.5, within 20 days after execution thereof. Failure to
deliver such notice shall not affect the legality or validity of any such
adjustment.
(k) In any case in which this Section 14.5 provides that an adjustment
shall become effective immediately after a Record Date for an event, the
Company may defer until the occurrence of such event (i) issuing to the
holder of any Note converted after such Record Date and before the
occurrence of such event the additional shares of Common Stock issuable
upon such conversion by reason of the adjustment required by such event
over and above the Common Stock issuable upon such conversion before giving
effect to such adjustment and (ii) paying to such holder any amount in cash
in lieu of any fraction pursuant to Section 14.3.
Section 14.6 Effect of Reclassification, Consolidation, Merger or Sale. If
any of the following events occur, namely (a) any reclassification or change of
outstanding shares of Common Stock (other than a change in par value, or to or
from no par value, as a result of a subdivision or combination), (b) any
consolidation, merger or combination of the Company with another person as a
result of which holders of Common Stock shall be entitled to receive stock,
securities or other property or assets (including cash) with respect to or in
exchange for such Common Stock or (c) any sale or conveyance of the properties
and assets of the Company as, or substantially as, an entirety (determined on a
consolidated basis) to any other person as a result of which holders of Common
Stock shall be entitled to receive stock, securities or other property or assets
(including cash) with respect to or in exchange for such Common Stock, then the
Company or the successor or purchasing person, as the case may be, shall execute
with the Trustee a supplemental indenture (which shall comply with the Trust
Indenture Act as in force at the date of execution of such supplemental
indenture if such supplemental indenture is then
58
required to so comply) providing that each Note then outstanding shall, without
the consent of the holder thereof, be convertible only into the kind and amount
of shares of stock and other securities or property or assets (including cash)
receivable upon such reclassification, change, consolidation, merger,
combination, sale or conveyance by a holder of a number of shares of Common
Stock issuable upon conversion of such Notes (assuming, for such purposes, a
sufficient number of authorized shares of Common Stock available to convert all
such Notes) immediately prior to such reclassification, change, consolidation,
merger, combination, sale or conveyance, assuming such holder of Common Stock
did not exercise his rights of election, if any, as to the kind or amount of
securities, cash or other property receivable upon such reclassification,
change, consolidation, merger, combination, sale or conveyance (provided that,
if the kind or amount of securities, cash or other property receivable upon such
reclassification, change, consolidation, merger, combination, sale or conveyance
is not the same for each share of Common Stock in respect of which such rights
of election shall not have been exercised ("non-electing share"), then for the
purposes of this Section 14.6 the kind and amount of securities, cash or other
property receivable upon such reclassification, change, consolidation, merger,
combination, sale or conveyance for each non-electing share shall be deemed to
be the kind and amount so receivable per share by a plurality of the
non-electing shares). Such supplemental indenture shall provide for adjustments
that shall be as nearly equivalent as may be practicable to the adjustments
provided for in this Article XIV.
The Company shall cause notice of the execution of such supplemental
indenture to be mailed to each holder of Notes, at his address appearing on the
Note register provided for in Section 2.5, within 20 days after execution
thereof. Failure to deliver such notice shall not affect the legality or
validity of such supplemental indenture.
The above provisions of this Section 14.6 shall similarly apply to
successive reclassifications, changes, consolidations, mergers, combinations,
sales and conveyances.
Section 14.7 Taxes on Shares Issued. The issuance of stock certificates on
conversions of Notes shall be made without charge to the converting Noteholder
for any transfer or similar tax in respect of the issue thereof. The Company
shall not, however, be required to pay any tax that may be payable in respect of
any transfer involved in the issue and delivery of stock in any name other than
that of the holder of any Note converted, and the Company shall not be required
to issue or deliver any such stock certificate unless and until the person or
persons requesting the issuance thereof shall have paid to the Company the
amount of such tax or shall have established to the satisfaction of the Company
that such tax has been paid.
Section 14.8 Reservation of Shares; Shares to Be Fully Paid; Listing of
Common Stock. The Company shall provide, free from preemptive rights, out of its
authorized but unissued shares or shares held in treasury, sufficient shares to
provide for the conversion of the Notes from time to time as such Notes are
presented for conversion.
Before taking any action that would cause an adjustment reducing the
Conversion Price below the then par value, if any, of the shares of Common Stock
issuable upon conversion of the Notes, the Company shall take all corporate
action that may, in the opinion of its counsel, be
59
necessary in order that the Company may validly and legally issue shares of such
Common Stock at such adjusted Conversion Price.
The Company covenants that all shares of Common Stock that may be issued
upon conversion of Notes shall, upon issuance, be fully paid and nonassessable
by the Company and free from all taxes, liens and charges with respect to the
issuance thereof.
The Company further covenants that it shall, if permitted by the rules of
the Nasdaq National Market and each securities exchange upon which the Common
Stock is listed or quoted, list and keep listed or have and keep quoted, so long
as the Common Stock shall be so listed or quoted on such market and exchange or
exchanges, all Common Stock issuable upon conversion of the Notes.
Section 14.9 Responsibility of Trustee. The Trustee and any other
conversion agent shall not at any time be under any duty or responsibility to
any holder of Notes to determine whether any facts exist that may require any
adjustment of the Conversion Price, or with respect to the nature or extent or
calculation of any such adjustment when made, or with respect to the method
employed, or herein or in any supplemental indenture provided to be employed, in
making the same. The Trustee and any other conversion agent shall not be
accountable with respect to the validity or value (or the kind or amount) of any
shares of Common Stock, or of any securities or property, that may at any time
be issued or delivered upon the conversion of any Note; and the Trustee and any
other conversion agent make no representations with respect thereto. Subject to
the provisions of Section 7.1, neither the Trustee nor any conversion agent
shall be responsible for any failure of the Company to issue, transfer or
deliver any shares of Common Stock or stock certificates or other securities or
property or cash upon the surrender of any Note for the purpose of conversion or
to comply with any of the duties, responsibilities or covenants of the Company
contained in this Article XIV. Without limiting the generality of the foregoing,
neither the Trustee nor any conversion agent shall be under any responsibility
to determine whether a supplemental indenture under Section 14.6 needs to be
entered into or the correctness of any provisions contained in any supplemental
indenture entered into pursuant to Section 14.6 relating either to the kind or
amount of shares of stock or securities or property (including cash) receivable
by Noteholders upon the conversion of their Notes after any event referred to in
such Section 14.6 or to any adjustment to be made with respect thereto, but,
subject to the provisions of Section 7.1, may accept as conclusive evidence of
the correctness of any such provisions, and shall be protected in relying upon,
the Officers' Certificate (which the Company shall be obligated to file with the
Trustee prior to the execution of any such supplemental indenture) with respect
thereto.
Section 14.10 Notice to Holders Prior to Certain Actions. If:
(a) the Company makes any distribution or dividend that would require
an adjustment in the Conversion Price pursuant to Section 14.5; or
(b) the Company takes any action that would require a supplemental
indenture pursuant to Section 14.6; or
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(c) there shall occur the voluntary or involuntary dissolution,
liquidation or winding-up of the Company,
the Company shall cause to be filed with the Trustee and to be mailed to each
holder of Notes at his address appearing on the Note register, as promptly as
possible but in any event at least 15 days prior to the applicable date
hereinafter specified, a notice stating (i) the date on which a record is to be
taken for the purpose of such dividend, distribution, rights, options 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,
options or warrants are to be determined or (ii) the date on which such
reclassification, change, consolidation, merger, sale, conveyance, transfer,
dissolution, liquidation or winding-up is expected to become effective or occur
and the date as of which it is expected that holders of record of Common Stock
shall be entitled to exchange their Common Stock for securities or other
property deliverable upon such reclassification, change, consolidation, merger,
sale, conveyance, 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 referenced in clauses (a) through (c) of this
Section 14.10.
ARTICLE XV
SUBORDINATION
Section 15.1 Agreement to Subordinate. The Company agrees, and each
Noteholder by accepting a Note agrees, that the indebtedness evidenced by the
Notes is subordinated in right of payment, to the extent and in the manner
provided in this Article XV, to the prior payment in full of all Senior
Indebtedness and that the subordination is for the benefit of the holders of
Senior Indebtedness.
Section 15.2 Certain Definitions. For purposes of this Article XV, the
following terms shall have the meaning indicated:
(a) "Designated Senior Indebtedness" shall mean the Company's
obligations under Senior Indebtedness in which the instrument creating or
evidencing the same or the assumption or guarantee thereof, or related
agreements or instruments to which the Company is a party, expressly
provides that such indebtedness shall be "Designated Senior Indebtedness"
for purposes hereof, provided that such instrument, agreement or other
document may place limitations on the right of such Senior Indebtedness to
exercise the rights of Designated Senior Indebtedness.
(b) "Representative" shall mean the indenture trustee or other
trustee, agent or representative for the Designated Senior Indebtedness.
(c) "Senior Indebtedness" with respect to the Notes means the
principal of, premium, if any, and interest on, and any fees, costs,
expenses and any other amounts (including indemnity payments) related to
the following, whether outstanding on the date hereof or hereafter incurred
or created: (i) indebtedness, matured or unmatured, whether or not
contingent,
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of the Company for money borrowed evidenced by notes or other written
obligations, (ii) any interest rate contract, interest rate swap agreement
or other similar agreement or arrangement designed to protect the Company
or any of its subsidiaries against fluctuations in interest rates, (iii)
indebtedness, matured or unmatured, whether or not contingent, of the
Company evidenced by notes, debentures, bonds or similar instruments or
bankers acceptances, letters of credit or similar facilities (or
reimbursement agreements in respect thereof), (iv) obligations of the
Company as lessee under capitalized leases and under leases of property
made as part of any sale and leaseback transactions, (v) indebtedness of
others of any of the kinds described in the preceding clauses (i) through
(iv) assumed or guaranteed by the Company, (vi) renewals, extensions,
modifications, amendments, and refundings of, and indebtedness and
obligations of a successor person issued in exchange for or in replacement
of, indebtedness or obligations of the kinds described in the preceding
clauses (i) through (v), unless the agreement pursuant to which any such
indebtedness described in clauses (i) through (v) is created, issued,
assumed or guaranteed expressly provides that such indebtedness is not
senior or superior in right of payment to the Notes; provided that the
following shall not constitute Senior Indebtedness: (1) any indebtedness or
obligation of the Company in respect of the Notes, (2) any indebtedness of
the Company to any of its subsidiaries or other Affiliates; (3) any
indebtedness that is subordinated or junior in any respect to any other
indebtedness of the Company; and (4) any indebtedness incurred for the
purchase of goods or materials in the ordinary course of business.
For the purposes of this Indenture, Senior Indebtedness shall not be deemed
to have been paid in full until the holders of the Senior Indebtedness shall
have indefeasibly received payment in full in cash of all Senior Indebtedness;
provided that if any holder of Senior Indebtedness agrees to accept payment in
full of such Senior Indebtedness for consideration other than cash, such holder
shall be deemed to have indefeasibly received payment in full of such Senior
Indebtedness. The provisions of this Article XV shall continue to be effective
or be reinstated, as the case may be, if at any time any payment of any of the
Senior Indebtedness is rescinded or must otherwise be returned by any holder of
Senior Indebtedness upon the insolvency, bankruptcy or organization of the
Company or otherwise, all as though such payment had not been made.
A distribution may consist of cash, securities or other property, by
set-off or otherwise.
Section 15.3 Liquidation; Dissolution; Bankruptcy. Upon any distribution to
creditors of the Company in a liquidation or dissolution of the Company or in a
bankruptcy, reorganization, insolvency, receivership or similar proceeding
relating to the Company or its property, in an assignment for the benefit of
creditors or any marshalling of the Company's assets and liabilities, (a)
holders of Senior Indebtedness shall be entitled to receive payment in full of
all amounts due or to become due thereon before Noteholders shall be entitled to
receive any payment with respect to the principal of, premium, if any, or
interest on the Notes (except that Noteholders may receive securities that are
subordinated to at least the same extent as the Notes to Senior Indebtedness and
any securities issued in exchange for Senior Indebtedness) and (b) until all
Senior Indebtedness (as provided in clause (a) above) is paid in full, any
distribution to which Noteholders would be entitled but for this Article shall
be made to holders of Senior Indebtedness (except that Noteholders may receive
securities that are subordinated to at least the same extent as the Notes to
Senior Indebtedness and any securities issued in exchange for Senior
Indebtedness), as their interests may appear.
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Section 15.4 Default on Senior Indebtedness. The Company may not make any
payment upon or in respect of the Notes (except in such subordinated securities)
and may not acquire from the Trustee or any Noteholder any Note for cash or
property (other than securities that are subordinated to at least the same
extent as the Note to Senior Indebtedness and any securities issued in exchange
for Senior Indebtedness) until all Senior Indebtedness has been paid in full if:
(a) a default in the payment of the principal of, premium, if any, or
interest on, including a default under any repurchase or redemption
obligation with respect to, Senior Indebtedness occurs and is continuing
beyond any applicable period of grace (a "Payment Default"); or
(b) a default, other than a Payment Default, on Designated Senior
Indebtedness occurs and is continuing that permits holders of the Senior
Indebtedness as to which such default relates to accelerate its maturity (a
"Nonpayment Default") and the Trustee receives a notice of the default (a
"Payment Blockage Notice") from the Representative. No Nonpayment Default
that existed or was continuing on the date of delivery of any such Payment
Blockage Notice to the Trustee shall be, or be made, the basis for a
subsequent Payment Blockage Notice. No new period of payment blockage may
be commenced within 360 days after the receipt by the Trustee of any prior
Payment Blockage Notice.
The Company may and shall resume payments on and distributions in
respect of the Notes and may acquire them upon the earlier of:
(i) in the case of a Payment Default, upon the date on which the
default is cured or waived, or
(ii) in the case of a Nonpayment Default, 179 days after the date
on which the applicable Payment Blockage Notice is received (or
sooner, if such default is cured or waived), unless the maturity of
such Senior Indebtedness has been accelerated,
if this Article XV otherwise permits the payment, distribution or acquisition at
the time of such payment or acquisition.
Section 15.5 When Distribution Must Be Paid Over. Subject to the provisions
of Section 15.11, if the Trustee (or paying agent if other than the Trustee) or
any Noteholder receives any payment of principal of, premium, if any, or
interest with respect to the Notes at a time when such payment is prohibited by
Section 15.3 or 15.4 hereof, such payment shall be held by the Trustee (or
paying agent if other than the Trustee) or such Noteholder, in trust for the
benefit of, and immediately shall be paid over and delivered, upon written
request, to the holders of Senior Indebtedness as their interests may appear or
their Representative under the indenture or other agreement (if any) pursuant to
which Senior Indebtedness may have been issued, as their respective interests
may appear, for application to the payment of all Senior Indebtedness remaining
unpaid to the extent necessary to pay all Senior Indebtedness in full in
accordance
63
with its terms, after giving effect to any concurrent payment or distribution to
or for the holders of Senior Indebtedness.
With respect to the holders of Senior Indebtedness, the Trustee undertakes
to perform only such obligations on the part of the Trustee as are specifically
set forth in this Article XV, and no implied covenants or obligations with
respect to the holders of Senior Indebtedness shall be read into this Indenture
against the Trustee. The Trustee shall not be deemed to owe any fiduciary duty
to the holders of Senior Indebtedness. The Trustee shall not be liable to any
such holders of Senior Indebtedness if the Trustee shall pay over or distribute
to or on behalf of Noteholders or the Company or any other person money or
assets to which any holders of Senior Indebtedness shall be entitled by virtue
of this Article XV.
Section 15.6 Notice by Company. The Company shall promptly notify the
Trustee and the paying agent of any facts known to the Company that would cause
a payment of any principal or interest with respect to the Notes to violate this
Article XV, but failure to give such notice shall not affect the subordination
of the Notes to the Senior Indebtedness as provided in this Article XV.
Section 15.7 Subrogation. After all Senior Indebtedness is paid in full and
until the Notes are paid in full, Noteholders shall be subrogated (equally and
ratably with all other Indebtedness pari passu with the Notes) to the rights of
holders of Senior Indebtedness to receive distributions applicable to Senior
Indebtedness to the extent that distributions otherwise payable to the
Noteholders have been applied to the payment of Senior Indebtedness. A
distribution made under this Article XV to holders of Senior Indebtedness that
otherwise would have been made to Noteholders is not, as between the Company and
Noteholders, a payment by the Company on the Notes.
Section 15.8 Relative Rights. This Article XV defines the relative rights
of Noteholders and holders of Senior Indebtedness. Nothing in this Indenture
shall:
(a) impair, as between the Company and the Noteholders, the obligation
of the Company, which is absolute and unconditional, to pay principal of,
premium, if any, and interest on the Notes in accordance with their terms;
(b) affect the relative rights of Noteholders and creditors of the
Company other than their rights in relation to holders of Senior
Indebtedness; or
(c) prevent the Trustee or any Noteholder from exercising its
available remedies upon a default or Event of Default, subject to the
rights of holders and owners of Senior Indebtedness to receive
distributions and payments otherwise payable to Noteholders.
If the Company fails because of this Article XV to pay principal of,
premium, if any, or interest on a Note on the due date, the failure is still a
default or Event of Default.
Section 15.9 Subordination May Not Be Impaired by Company. No right of any
holder of Senior Indebtedness to enforce the subordination of the indebtedness
evidenced by the Notes
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shall be impaired by any act or failure to act by the Company or any holder of
Notes or by the failure of the Company or any holder of Notes to comply with
this Indenture.
Section 15.10 Distribution or Notice to Representative. Whenever a
distribution is to be made or a notice given to holders of Senior Indebtedness,
the distribution may be made and the notice given to their Representative.
Upon any payment or distribution of assets of the Company referred to in
this Article XV, the Trustee and the Noteholders shall be entitled to rely upon
any order or decree made by any court of competent jurisdiction or upon any
certificate of such Representative or of the liquidating trustee or agent or
other person making any distribution to the Trustee or to the Noteholders for
the purpose of ascertaining the persons entitled to participate in such
distribution, the holders of the Senior Indebtedness and other indebtedness of
the Company, the amount thereof or payable thereon, the amount or amounts paid
or distributed thereon and all other facts pertinent thereto or to this Article
XV.
Section 15.11 Rights of Trustee and Paying Agent. Notwithstanding the
provisions of this Article XV or any other provision of this Indenture, the
Trustee shall not be charged with knowledge of the existence of any facts that
would prohibit the making of any payment or distribution by the Trustee, and the
Trustee and the paying agent may continue to make payments on the Notes, unless
a Responsible Officer shall have received at the Corporate Trust Office of the
Trustee at least three Business Days prior to the date of such payment written
notice of facts that would cause the payment of any principal, premium, if any,
and interest with respect to the Notes to violate this Article XV. Only the
Company or a Representative may give the notice. Nothing in this Article XV
shall impair the claims of, or payments to, the Trustee under or pursuant to
this Indenture, including, without limitation, Section 7.7 hereof.
The Trustee shall be entitled to rely on the delivery to it of a written
notice by a person representing such person to be a holder of Senior
Indebtedness (or a trustee or agent on behalf of such holder) to establish that
such notice has been given by a holder of Senior Indebtedness (or a trustee or
agent on behalf of any such holder). In the event that the Trustee determines in
good faith that further evidence is required with respect to the right of any
person as a holder of Senior Indebtedness to participate in any payment or
distribution pursuant to this Article XV, the Trustee may request such person to
furnish evidence to the reasonable satisfaction of the Trustee as to the amount
of Senior Indebtedness held by such person, the extent to which such person is
entitled to participate in such payment or distribution and any other facts
pertinent to the rights of such person under this Article XV, and if such
evidence is not furnished, the Trustee may defer any payment which it may be
required to make for the benefit of such person pursuant to the terms of this
Indenture pending judicial determination as to the rights of such person to
receive such payment.
The Trustee in its individual or any other capacity may hold Senior
Indebtedness with the same rights it would have if it were not Trustee. Any
paying agent, any authenticating agent, any conversion agent, any Note registrar
and their successors may do the same with like rights.
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Section 15.12 Authorization to Effect Subordination. Each holder of a Note
by the holder's acceptance thereof authorizes and directs the Trustee on the
holder's behalf to take such action as may be necessary or appropriate to effect
subordination as provided in this Article XV and appoints the Trustee to act as
the holder's attorney-in-fact for any and all such purposes. Without limiting
the foregoing, each Representative is hereby irrevocably authorized and
empowered (in its own name or in the name of the Noteholders or the Trustee or
otherwise), but shall have no obligation, to demand, xxx for, collect and
receive every payment or distribution referred to in Section 15.3 above and give
acquittance therefor and to file claims and proofs of claim and take such other
action as it may deem necessary or advisable for the exercise or enforcement of
any of the rights or interests of the holders or owners of the Senior
Indebtedness hereunder; provided that for purposes of this Section 15.12 holders
or owners of Senior Indebtedness may act only through such Representative.
Section 15.13 Conversions Not Deemed Payment. For the purposes of this
Article XV only, the issuance and delivery of Common Stock upon conversion of
the Notes in accordance with Article XIV shall not be deemed to constitute a
payment or distribution on account of the principal of or interest on the Notes
or on account of the purchase or other acquisition of Notes. Nothing contained
in this Article or elsewhere in this Indenture or in the Notes is intended to or
shall impair, as among the Company, its creditors other than holders of Senior
Indebtedness and the holders, the right, which is absolute and unconditional, of
the holder of any Note to convert such Note in accordance with Article XIV.
Section 15.14 Amendments. The provisions of this Article XV shall not be
amended or modified without the written consent of the holders of Senior
Indebtedness.
ARTICLE XVI
MISCELLANEOUS PROVISIONS
Section 16.1 Provisions Binding on Company's Successors. All the covenants,
stipulations, promises and agreements in this Indenture made by the Company
shall bind its successors and assigns whether so expressed or not.
Section 16.2 Official Acts by Successor Company. Any act or proceeding by
any provision of this Indenture authorized or required to be done or performed
by any board (including the Board of Directors), committee or officer of the
Company shall and may be done and performed with like force and effect by the
like board, committee or officer of any corporation that shall at the time be
the lawful sole successor of the Company.
Section 16.3 Addresses for Notices, Etc. Any notice or demand that by any
provision of this Indenture is required or permitted to be given or served by
the Trustee or by the holders of Notes on the Company shall be deemed to have
been sufficiently given or made, for all purposes if given or served by being
sent by prepaid overnight delivery or being deposited postage prepaid by
registered or certified mail in a post office letter box addressed (until
another address is filed by the Company with the Trustee) to Computer Network
Technology Corporation, 000 Xxxxx Xxxxxxx 000, Xxxxx 000, Xxxxxxxxxxx, Xxxxxxxxx
00000, Attention: Chief Executive Officer with a copy to Xxxxxxx, Street and
Deinard Professional Association, 000 Xxxxx Xxxxx Xxxxxx,
00
Xxxxx 0000, Xxxxxxxxxxx, Xxxxxxxxx 00000, Attention: Xxxxxx X. Xxxxxxx, Esq. Any
notice, direction, request or demand hereunder to or upon the Trustee shall be
deemed to have been sufficiently given or made, for all purposes, if given or
served by being sent by prepaid overnight delivery or being deposited postage
prepaid by registered or certified mail in a post office letter box addressed to
the Corporate Trust Office of the Trustee.
The Trustee, by notice to the Company, may designate additional or
different addresses for subsequent notices or communications.
Any notice or communication mailed to a Noteholder shall be mailed to him
by first class mail, postage prepaid, at the address of such Noteholder as it
appears on the Note register and shall be sufficiently given to such Noteholder
if so mailed within the time prescribed.
Failure to mail a notice or communication to a Noteholder or any defect in
it shall not affect its sufficiency with respect to other Noteholders. If a
notice or communication is mailed in the manner provided above, it is duly
given, whether or not the addressee receives it.
Section 16.4 Communications by Holders with Other Holders. Noteholders may
communicate pursuant to Trust Indenture Act Section 312(b) with other
Noteholders with respect to their rights under this Indenture or the Notes. The
Company, the Trustee, the Note registrar and any other person shall have the
protection of Trust Indenture Act Section 312(c).
Section 16.5 Governing Law. This Indenture and each Note shall be deemed to
be a contract made under the substantive laws of New York and for all purposes
shall be construed in accordance with the substantive laws of New York without
regard to conflicts of laws principles thereof.
Section 16.6 Evidence of Compliance with Conditions Precedent; Certificates
to Trustee. Upon any application or demand by the Company to the Trustee to take
any action under any of the provisions of this Indenture, including those
actions set forth in Trust Indenture Act Section 314(c), the Company shall
furnish to the Trustee an Officers' Certificate stating that all conditions
precedent, if any, provided for in this Indenture relating to the proposed
action have been complied with, and an Opinion of Counsel stating that, in the
Opinion of such Counsel, all such conditions precedent have been complied with.
Each certificate or opinion provided for in this Indenture and delivered to
the Trustee with respect to compliance with a condition or covenant provided for
in this Indenture shall include: (a) a statement that the person making such
certificate or opinion has read such covenant or condition, (b) a brief
statement as to the nature and scope of the examination or investigation upon
which the statement or opinion contained in such certificate or opinion is
based, (c) a statement that, in the opinion of such person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with and (d) a statement as to whether or not, in the opinion of such
person, such condition or covenant has been complied with.
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Section 16.7 Legal Holidays. In any case where any interest payment date,
date fixed for redemption, stated maturity or Change of Control Purchase Date of
any Note or the last date on which a Noteholder has the right to convert his
Notes shall not be a Business Day, then (notwithstanding any other provision of
this Indenture or of the Notes) payment of interest or principal (and premium,
if any) or conversion of the Notes need not be made on such date, but may be
made on the next succeeding Business Day with the same force and effect as if
made on the interest payment date, date fixed for redemption, Change of Control
Purchase Date, or at the stated maturity, or on such last day for conversion;
provided that no interest shall accrue for the period from and after such
interest payment date, date fixed for redemption, Change of Control Purchase
Date or stated maturity, as the case may be.
Section 16.8 No Security Interest Created. Nothing in this Indenture or in
the Notes, expressed or implied (other than the lien granted to the Trustee
pursuant to Section 7.7), shall be construed to constitute a security interest
under the Uniform Commercial Code or similar legislation, as now or hereafter
enacted and in effect, in any jurisdiction where property of the Company or its
subsidiaries is located.
Section 16.9 Trust Indenture Act. This Indenture is hereby made subject to,
and shall be governed by, the provisions of the Trust Indenture Act required to
be part of and to govern indentures qualified under the Trust Indenture Act.
Section 16.10 Trust Indenture Act Controls. If any provision of this
Indenture limits, qualifies, or conflicts with the duties imposed by operation
of the Trust Indenture Act, the imposed duties, upon qualification of this
Indenture under the Trust Indenture Act, shall control.
Section 16.11 Benefits of Indenture. Nothing in this Indenture or in the
Notes, expressed or implied, shall give to any person, other than the parties
hereto, any paying agent, any authenticating agent, any conversion agent, any
Note registrar and their successors hereunder and the holders of Notes, any
benefit or any legal or equitable right, remedy or claim under this Indenture.
Section 16.12 Table of Contents, Headings, Etc. The table of contents and
the titles and headings of the articles and sections of this Indenture have been
inserted for convenience of reference only, are not to be considered a part
hereof, and shall in no way modify or restrict any of the terms or provisions
hereof.
Section 16.13 Authenticating Agent. The Trustee may appoint an
authenticating agent that shall be authorized to act on its behalf and subject
to its direction in the authentication and delivery of Notes in connection with
the original issuance thereof and transfers and exchanges of Notes hereunder,
including under Sections 2.4, 2.5, 2.6, 2.7 and 3.3, as fully to all intents and
purposes as though the authenticating agent had been expressly authorized by
this Indenture and those Sections to authenticate and deliver Notes. For all
purposes of this Indenture, the authentication and delivery of Notes by the
authenticating agent shall be deemed to be authentication and delivery of such
Notes "by the Trustee" and a certificate of authentication executed on behalf of
the Trustee by an authenticating agent shall be deemed to satisfy any
requirement hereunder or in the Notes for the Trustee's certificate of
authentication. Such
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authenticating agent shall at all times be a person eligible to serve as Trustee
hereunder pursuant to Section 7.10.
Any corporation into which any authenticating agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, consolidation or conversion to which any authenticating agent
shall be a party, or any corporation succeeding to the corporate trust business
of any authenticating agent, shall be the successor of the authenticating agent
hereunder, if such successor company is otherwise eligible under this Section,
without the execution or filing of any paper or any further act on the part of
the parties hereto or the authenticating agent or such successor company.
Any authenticating agent may at any time resign by giving written notice of
resignation to the Trustee and to the Company. The Trustee may at any time
terminate the agency of any authenticating agent by giving written notice of
termination to such authenticating agent and to the Company. Upon receiving such
a notice of resignation or upon such a termination, or in case at any time any
authenticating agent shall cease to be eligible under this Section, the Trustee
shall promptly appoint a successor authenticating agent (which may be the
Trustee), shall give written notice of such appointment to the Company and shall
mail notice of such appointment to all holders of Notes as the names and
addresses of such holders appear on the Note register.
The Company agrees to pay to the authenticating agent from time to time
reasonable compensation for its services.
The provisions of Sections 7.3, 7.4, 7.5, 8.3 and this Section 16.13 shall
be applicable to any authenticating agent.
Section 16.14 Execution in Counterparts. This Indenture may be executed in
any number of counterparts, each of which shall be an original, but such
counterparts shall together constitute but one and the same instrument.
U.S. Bank Trust National Association hereby accepts the trusts in this
Indenture declared and provided, upon the terms and conditions hereinabove set
forth.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly signed and attested, all as of the date first written above.
COMPUTER NETWORK TECHNOLOGY CORPORATION
By:
------------------------------------
Name:
Title:
Attest:
----------------------------------
69
-------------------------------------
, as Trustee
By:
----------------------------------
Name:
Title:
By:
----------------------------------
Name:
Title:
70
SCHEDULE I TO INDENTURE DATED ______________
Recital and Section 2.1 terms:
------------------------------
Title of Convertible Subordinated Notes:
Aggregate Principal Amount:
Definition Terms:
-----------------
Address of Corporate Trust Office:
Section 2.3 terms:
------------------
Date from which interest first accrues:
Dates on which interest is payable ("Interest Payment Date"):
Record Date:
Section 3.1(a) terms:
---------------------
Early Redemption Date:
Make Whole Payment, per $1,000 principal amount of notes, less
interest:
Section 3.1(b) terms:
---------------------
Optional Redemption Date:
If Redeemed Redemption
or after Price
---------- ----------
---------- ----------
---------- ----------
Section 7.2 terms:
------------------
Report Date:
S-1
EXHIBIT A - FORM OF DEFINITIVE NOTE
FACE OF NOTE
No. A-1 $__________________________
CUSIP No. [_______________]
COMPUTER NETWORK TECHNOLOGY CORPORATION
[Title of Note set forth in Schedule I]
COMPUTER NETWORK TECHNOLOGY CORPORATION, a corporation duly organized and
validly existing under the laws of the State of Minnesota (the "Company"), which
term includes any Successor Company under the Indenture referred to on the
reverse hereof, for value received hereby promises to pay to ___________
________________, or registered assigns, the principal sum of
______________________________________ Dollars on ____________, at the Corporate
Trust Office of the Trustee or at the option of the holder of this Note, at any
other office or agency of the Company maintained for that purpose pursuant to
the Indenture, in such coin or currency of the United States of America as at
the time of payment shall be legal tender for the payment of public and private
debts, and to pay interest, [semi-annually, or other method set forth on
Schedule I] on ____________ and ____________ [interest payment dates or terms
set forth on Schedule I] of each year, commencing _______________, on said
principal sum at said office or agency, in like coin or currency, at ____% per
annum from ______________ or ______________, as the case may be, next preceding
the date of this Note to which interest has been paid or duly provided for,
unless the date hereof is a date to which interest has been paid or duly
provided for, in which case from the date of this Note, or unless no interest
has been paid or duly provided for on the Notes, in which case from __________
[date from which interest accrues set forth in Schedule I], until payment of
said principal sum has been made or duly provided for; provided that if the
Company shall default in the payment of interest due on such _____________ or
___________, then this Note shall bear interest from the next preceding
____________ or ____________ to which interest has been paid or duly provided
for or, if no interest has been paid or duly provided for on such Note, from
__________. The interest so payable on any ____________ or __________ will be
paid to the person in whose name this Note (or one or more Predecessor Notes) is
registered at the close of business on the record date, which shall be the
___________ or __________ [set forth Record Payment Date on Schedule I] (whether
or not a Business Day) next preceding such ____________ or ____________,
respectively; provided that any such interest not punctually paid or duly
provided for shall be payable as provided in the Indenture. Interest shall be
paid by check mailed to the registered holder at the registered address of such
person unless other arrangements are made in accordance with the provisions of
the Indenture.
Reference is made to the further provisions of this Note set forth on the
reverse hereof, including, without limitation, provisions giving the holder of
this Note the right to convert this Note into Common Stock of the Company on the
terms and subject to the limitations referred to on the reverse hereof and as
more fully specified in the Indenture. Such further provisions shall for all
purposes have the same effect as though fully set forth at this place.
A-1
This Note shall be deemed to be a contract made under the laws of the State
of New York, and for all purposes shall be construed in accordance with and
governed by the laws of said State, without regard to conflicts of laws
principles thereof.
This Note shall not be valid or become obligatory for any purpose until the
certificate of authentication hereon shall have been manually signed by the
Trustee, or a duly authorized authenticating agent under the Indenture.
IN WITNESS WHEREOF, the Company has caused this Note to be duly executed
under its corporate seal.
COMPUTER NETWORK TECHNOLOGY
CORPORATION
By:
----------------------------------
Name:
Title:
Attest:
----------------------------------
Secretary
[FORM OF CERTIFICATE OF AUTHENTICATION]
CERTIFICATE OF AUTHENTICATION
Dated:
This Note is one of the Notes described in the within-named Indenture.
__________________________, as Trustee
By:
-----------------------------------
Authorized Signatory
A-2
[FORM OF REVERSE OF NOTE]
COMPUTER NETWORK TECHNOLOGY CORPORATION
[Title of Note Set Forth on Schedule I]
This Note is one of a duly authorized issue of Notes of the Company,
designated as its [title of Note set forth on Schedule I] (herein called the
"Notes"), limited to the aggregate principal amount of [Aggregate Principal
Amount set forth in Schedule I] (which may be increased to $___________ if the
underwriters' overallotment option issued in connection with the public offering
of the Notes is exercised in full) all issued or to be issued under and pursuant
to an Indenture dated as of ______________ (the "Indenture"), between the
Company and ______________________, as trustee (the "Trustee"), to which
Indenture and all indentures supplemental thereto reference is hereby made for a
complete description of the rights, limitations of rights, obligations, duties
and immunities thereunder of the Trustee, the Company and the holders of the
Notes. Each Note is subject to, and qualified by, all such terms as set forth in
the Indenture certain of which are summarized hereon and each holder of a Note
is referred to the corresponding provisions of the Indenture for a complete
statement of such terms. To the extent that there is any inconsistency between
the summary provisions set forth in the Notes and the Indenture, the provisions
of the Indenture shall govern. Capitalized terms used but not defined in this
Note shall have the meanings ascribed to them in the Indenture.
In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal of, premium, if any, and accrued
interest on all Notes may be declared, and upon said declaration shall become,
due and payable, in the manner, with the effect and subject to the conditions
provided in the Indenture.
The payment of principal of, premium, if any, and interest on the Notes
will, to the extent set forth in the Indenture, be subordinated in right of
payment to the prior payment in full of all Senior Indebtedness (as defined in
the Indenture). Upon any distribution to creditors of the Company in a
liquidation or dissolution of the Company or in a bankruptcy, reorganization,
insolvency, receivership or similar proceeding related to the Company or its
property, in an assignment for the benefit of creditors or any marshalling of
the Company's assets and liabilities, the holders of all Senior Indebtedness
will first be entitled to receive payments in full of all amounts due or to
become due thereon before the holders of the Notes will be entitled to receive
any payment in respect of the principal of, premium, if any, or interest on the
Notes (except that holders of Notes may receive securities that are subordinated
at least to the same extent as the Notes to Senior Indebtedness and any
securities issued in exchange for Senior Indebtedness).
The Company also may not make any payment upon or in respect of the Notes
(except in such subordinated securities) if (a) a default in the payment of the
principal of, premium, if any, or interest on Senior Indebtedness occurs and is
continuing beyond any applicable period of grace; or (b) any other default
occurs and is continuing with respect to Designated Senior Indebtedness that
permits holders of the Designated Senior Indebtedness as to which such default
relates to accelerate its maturity and the Trustee receives a notice of such
default (a "Payment Blockage Notice") from the Representative. Payments on the
Notes may and shall be resumed
A-3
(i) in the case of a Payment Default, upon the date on which such default is
cured or waived; or (ii) in the case of a Nonpayment Default, 179 days after the
date on which the applicable Payment Blockage Notice is received, unless the
maturity of any Senior Indebtedness has been accelerated. No new period of
payment blockage may be commenced within 360 days after the receipt by the
Trustee of any prior Payment Blockage Notice. No Nonpayment Default that existed
or was continuing on the date of delivery of any Payment Blockage Notice to the
Trustee shall be, or be made, the basis for a subsequent Payment Blockage Notice
unless such default shall have been cured or waived.
In the event that the Trustee (or paying agent if other than the Trustee)
or any holder of the Notes receives any payment of principal or interest with
respect to the Notes at a time when such payment is prohibited under the
Indenture, such payment shall be held in trust for the benefit of, and shall be
paid over and delivered to, the holders of Senior Indebtedness or their
representative as their respective interests may appear. After all Senior
Indebtedness is paid in full and until the Notes are paid in full, the holders
of the Notes shall be subrogated (equally and ratably with all other
Indebtedness pari passu with the Notes) to the rights of holders of Senior
Indebtedness to receive distributions applicable to Senior Indebtedness to the
extent that distributions otherwise payable to the holders of the Notes have
been applied to the payment of Senior Indebtedness.
The Indenture contains provisions permitting the Company and the Trustee,
with the consent of the holders of not less than a majority in aggregate
principal amount of the Notes at the time outstanding, evidenced as in the
Indenture provided, to execute supplemental indentures adding any provisions to
or changing in any manner or eliminating any of the provisions of the Indenture
or of any supplemental indenture or modifying in any manner the rights of the
holders of the Notes; provided that no such supplemental indenture shall (i)
extend the fixed maturity of any Note, or reduce the rate or extend the time of
payment of interest thereon, or reduce the principal amount thereof or premium,
if any, thereon, or reduce any amount payable on redemption thereof, alter the
obligation of the Company to repurchase the Notes at the option of the holders
upon the occurrence of a Change of Control or impair or affect the right of any
Note holder to institute suit for the payment thereof, or make the principal
thereof or interest or premium, if any, thereon payable in any coin or currency
other than that provided in the Notes, modify the subordination provisions in a
manner adverse to the holders of the Notes, or impair the right to convert the
Notes into Common Stock subject to the terms set forth in the Indenture without
the consent of the holder of each Note so affected; or (ii) reduce the aforesaid
percentage of Notes, the holders of which are required to consent to any such
supplemental indenture, without the consent of the holders of all Notes then
outstanding. The Indenture also provides that, prior to any declaration
accelerating the maturity of the Notes, the holders of a majority in aggregate
principal amount of the Notes at the time outstanding may on behalf of the
holders of all of the Notes waive any past default or Event of Default under the
Indenture and its consequences except a default in the payment of interest or
any premium on or the principal of any of the Notes, a failure by the Company to
convert any Notes into Common Stock of the Company or a default in respect of a
covenant or provision of the Indenture that under Article X thereof cannot be
modified or amended without the consent of the holders of all Notes then
outstanding. Any such consent or waiver by the holder of this Note (unless
revoked as provided in the Indenture) shall be conclusive and binding upon such
holder and upon all future holders
A-4
and owners of this Note and any Notes that may be issued in exchange or
substitution hereof, irrespective of whether or not any notation thereof is made
upon this Note or such other Notes.
No reference herein to the Indenture and no provision of this Note or of
the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and any premium and interest
on this Note at the place, at the respective times, at the rate and in the coin
or currency herein prescribed.
Interest on the Notes shall be computed on the basis of a 360-day year
composed of twelve 30-day months.
The Notes are issuable in registered form without coupons in denominations
of $1,000 principal amount and integral multiples thereof. At the Corporate
Trust Office of the Trustee, and in the manner and subject to the limitations
provided in the Indenture, without payment of any service charge but with
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any registration or exchange of Notes, Notes
may be exchanged for a like aggregate principal amount of Notes of other
authorized denominations.
No sinking fund is provided for the Notes.
The Notes are subject to Provisional Redemption by the Company, in whole or
in part, at any time prior to ____________ [set forth Early Redemption Date],
upon notice as set forth in Section 3.2 of the Indenture, at a redemption price
equal to $1,000 per $1,000 principal amount of Notes to be redeemed plus accrued
and unpaid interest, if any, to the Provisional Redemption Date if the closing
price of the Common Stock shall have exceeded 150% of the Conversion Price then
in effect for at least 20 Trading Days within a period of 30 consecutive Trading
Days ending on the Trading Day prior to the Notice Date. Upon any such
Provisional Redemption, the Company shall make a Make-Whole Payment with respect
to the Notes called for Provisional Redemption to holders on the Notice Date in
an amount equal to $______ [set forth Make Whole Payment] per $1,000 principal
amount of Notes, less the amount of any interest actually paid on such Notes
prior to the Notice Date. The Company shall make the Make-Whole Payment on all
Notes called for Provisional Redemption, including any Notes converted into
Common Stock pursuant to the terms of the Indenture after the Notice Date and
prior to the Provisional Redemption Date.
The Notes are also subject to redemption at the option of the Company at
any time on or after _______________ [set forth Optional Redemption Date], in
whole or in part, upon not less than 30 or more than 60 days' notice to the
holders of the Notes prior to the redemption date at the following optional
redemption prices (expressed as percentages of the principal amount), together
with accrued and unpaid interest to the date fixed for redemption, if redeemed
on or after:
A-5
Date Redemption Price
---- ----------------
----------- ------%
----------- ------%
[set forth terms specified on Schedule I]
If a Change of Control (as defined in the Indenture) shall occur at any
time, then each holder of Notes shall have the right to require that the Company
repurchase such holder's Notes in whole or in part in integral multiples of
$1,000, at a purchase price in cash in an amount equal to 100% of the principal
amount of such Notes, plus accrued and unpaid interest, if any, to the
repurchase date pursuant to an offer to be made by the Company and in accordance
with the procedures set forth in the Indenture.
Subject to the provisions of the Indenture, the holder hereof has the
right, at its option, at any time prior to the close of business on the Business
Day immediately preceding __________, or, as to all or any portion hereof called
for redemption, immediately prior to the close of business on the Business Day
immediately preceding the date fixed for redemption (unless the Company shall
default in payment due upon redemption thereof), to convert the principal hereof
or any portion of such principal that is $1,000 or an integral multiple thereof,
into that number of fully paid and non-assessable shares of Company's Common
Stock, as said shares shall be constituted at the date of conversion, obtained
by dividing the principal amount of this Note or portion thereof to be converted
by the Conversion Price of $_____ or such Conversion Price as adjusted from time
to time as provided in the Indenture, which conversion shall be effected by
surrender of this Note, together with a conversion notice as provided in the
Indenture, to the Corporate Trust Office of the Trustee or at the option of the
holder of this Note, at any other office or agency of the Company maintained for
that purpose pursuant to the Indenture, and, unless the shares issuable on
conversion are to be issued in the same name as this Note, duly endorsed by, or
accompanied by instruments of transfer in form satisfactory to the Company duly
executed by, the holder or by his duly authorized attorney. No adjustment in
respect of interest or dividends will be made upon any conversion; provided that
if this Note shall be surrendered for conversion during the period from the
close of business on any record date for the payment of interest through the
opening of business on the next succeeding interest payment date, this Note
(unless it or the portion being converted shall have been called for redemption
on a date during the period from the close of business on or after any record
date to the close of business on the business day following the corresponding
payment date) on a date during the period from the close of business on or after
any record date to the close of business on the business day following the
corresponding payment date must be accompanied by an amount, in funds acceptable
to the Company, equal to the interest payable on such interest payment date on
the principal amount being converted. The interest payment with respect to a
Note called for redemption will be payable on the corresponding interest payment
date to the registered holder of a Note at the close of business on that record
date (notwithstanding the conversion of such Note before the corresponding
interest payment date) and a Note holder who elects to convert need not include
funds equal to the interest paid. No fractional shares will be issued upon any
conversion, but an adjustment in cash will be made, as provided in the
Indenture, in respect of any fraction of a share that would otherwise be
issuable upon the surrender of any Note or Notes for conversion.
A-6
Upon due presentment for registration of transfer of this Note at the
Corporate Trust Office of the Trustee or at the option of the holder of this
Note, at any other office or agency of the Company maintained for that purpose
pursuant to the Indenture, a new Note or Notes of authorized denominations for
an equal aggregate principal amount will be issued to the transferee in exchange
thereof, subject to the conditions and limitations provided in the Indenture,
without charge except for any tax or other governmental charge imposed in
connection therewith.
The Company, the Trustee, any authenticating agent, any paying agent, any
conversion agent and any Note registrar may deem and treat the registered holder
hereof as the absolute owner of this Note (whether or not this Note shall be
overdue and notwithstanding any notation of ownership or other writing hereon
made by anyone other than the Company or any Note registrar), for the purpose of
receiving payment hereof, or on account hereof, for the conversion hereof and
for all other purposes, and neither the Company nor the Trustee nor any other
authenticating agent nor any paying agent nor any other conversion agent nor any
Note registrar shall be affected by any notice to the contrary. All payments
made to or upon the order of such registered holder shall, to the extent of the
sum or sums paid, satisfy and discharge liability for monies payable on this
Note.
No recourse for the payment of the principal of or any premium or interest
on this Note, or for any claim based hereon or otherwise in respect hereof, and
no recourse under or upon any obligation, covenant or agreement of the Company
in the Indenture or any indenture supplemental thereto or in any Note, or
because of the creation of any indebtedness represented thereby, shall be had
against any incorporator, stockholder, officer or director, as such, past,
present or future, of the Company or of any Successor Company, either directly
or through the Company or any Successor Company, 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 hereof and as
part of the consideration for the issue hereof, expressly waived and released.
A-7
ABBREVIATIONS
The following abbreviations, when used in the inscription of the face of
this Note, shall be construed as though they were written out in full according
to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT -
TEN ENT - as tenants by the Custodian
entireties ---------------------------
(Cust)
JT TEN - as joint tenants with right under
of survivorship and not as ---------------------------
tenants in common (Minor)
Uniform Gifts to
Minors Act
---------------------------
(State)
Additional abbreviations may also be used
though not in the above list.
A-8
[FORM OF CONVERSION NOTICE]
CONVERSION NOTICE
To: COMPUTER NETWORK TECHNOLOGY CORPORATION
The undersigned registered owner of this Note hereby irrevocably exercises
the option to convert this Note, or the portion hereof (which is $1,000
principal amount or an integral multiple thereof) below designated, into shares
of Common Stock of the Company in accordance with the terms of the Indenture
referred to in this Note, and directs that the shares issuable and deliverable
upon such conversion, together with any check in payment for fractional shares
and any Notes representing any unconverted principal amount hereof, be issued
and delivered to the registered holder hereof unless a different name has been
indicated below. If shares or any portion of this Note not converted are to be
issued in the name of a person other than the undersigned, the undersigned will
check the appropriate box below and pay all transfer taxes payable with respect
thereto. Any amount required to be paid to the undersigned on account of
interest accompanies this Note.
Dated: __________________
_____________________________________
_____________________________________
Signature(s)
Signature(s) must be guaranteed by an eligible Guarantor Institution (banks,
stock brokers, savings and loan associations and credit unions) with membership
in an approved signature guarantee medallion program pursuant to Securities and
Exchange Commission Rule 17Ad-15 if shares of Common Stock are to be issued, or
Notes are to be delivered, other than to and in the name of the registered
holder.
_____________________________________
Signature Guarantee
Fill in for registration of shares if to be issued, and Notes if to be
delivered, other than to and in the name of the registered holder:
_____________________________________
(Name)
_____________________________________
(Xxxxxx Xxxxxxx)
_____________________________________
(City, State and Zip Code)
Please print name and address
Principal amount to be converted
(if less than all) $______________
_____________________________________
Social Security or other Taxpayer
Identification Number
A-9
[FORM OF OPTION TO ELECT REPAYMENT
UPON A CHANGE OF CONTROL]
To: COMPUTER NETWORK TECHNOLOGY CORPORATION
The undersigned registered owner of this Note hereby irrevocably
acknowledges receipt of a notice from Computer Network Technology Corporation
(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 Note, 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 Note, together with accrued interest to such
date, to the registered holder hereof.
Dated: __________________
_____________________________________
_____________________________________
Signature(s)
_____________________________________
Social Security or Other Taxpayer
Identification Number
Principal amount to be repaid
(if less than all): $______________
A-10
[FORM OF ASSIGNMENT]
For value received _____________________________ hereby sell(s), assign(s)
and transfer(s) unto _________________________ (Please insert social security or
other identifying number of assignee) the within Note, and hereby irrevocably
constitutes and appoints ________________________________ attorney to transfer
the said Note on the books of the Company, with full power of substitution in
the premises.
Dated:_______________________________
_____________________________________
_____________________________________
Signature(s)
Signature(s) must be guaranteed by an eligible Guarantor
Institution (banks, stock brokers, savings and loan
associations and credit unions) with membership in an
approved signature guarantee medallion program pursuant to
Securities and Exchange Commission Rule 17Ad-15.
_____________________________________
Signature Guarantee
NOTICE: The signature on the conversion notice, the option to elect
payment upon a Change of Control or the assignment must correspond with
the name as written upon the face of the Note in every particular
without alteration or enlargement or any change whatever.
A-11
EXHIBIT B - FORM OF GLOBAL NOTE
FACE OF NOTE
No. B-_ $__________________
CUSIP No. [_______]
COMPUTER NETWORK TECHNOLOGY CORPORATION
[Title of Note set forth on Schedule I]
THIS NOTE IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A
NOMINEE THEREOF. THIS NOTE MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A
SECURITY REGISTERED, AND NO TRANSFER OF THIS NOTE IN WHOLE OR IN PART MAY BE
REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE
THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED SIGNATORY OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE COMPUTER
NETWORK TECHNOLOGY CORPORATION (THE "COMPANY") OR ITS AGENT FOR REGISTRATION OR
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF [CEDE & CO.] OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO [CEDE & CO.] OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, [CEDE & CO.], HAS AN INTEREST
HEREIN.
COMPUTER NETWORK TECHNOLOGY CORPORATION, a corporation duly organized and
validly existing under the laws of the State of Minnesota (the "Company"), which
term includes any Successor Company under the Indenture referred to on the
reverse hereof, for value received hereby promises to pay to [CEDE & CO.], or
registered assigns, the principal sum of ____________ MILLION DOLLARS
($___________) (subject to adjustment as set forth in the next paragraph hereof)
on _____________, at the Corporate Trust Office of the Trustee or at the option
of the holder of this Global Note, at any other office of agency or the Company
maintained for that purpose pursuant to the Indenture, in such coin or currency
of the United States of America as at the time of payment shall be legal tender
for the payment of public and
B-1
private debts, and to pay interest, _________ [semi-annually or other method set
forth on Schedule I] on __________ and ___________ [interest payment date or
terms set forth on Schedule I] of each year, commencing _____________, on said
principal sum at said office or agency, in like coin or currency, at ______% per
annum from _________ or __________, as the case may be, next preceding the date
of this Global Note to which interest has been paid or duly provided for, unless
the date hereof is a date to which interest has been paid or duly provided for,
in which case from the date of this Global Note, or unless no interest has been
paid or duly provided for on the Notes, in which case from ___________ [date
from which interest first accrues set forth on Schedule I], until payment of
said principal sum has been made or duly provided for; provided that if the
Company shall default in the payment of interest due on such ___________ or
___________, then this Global Note shall bear interest from the next preceding
___________ or __________, to which interest has been paid or duly provided for
or, if no interest has been paid or duly provided for on such Note, from
_________. The interest so payable on any ___________ or ___________ will be
paid to the person in whose name this Global Note (or one or more Predecessor
Notes) is registered at the close of business on the record date, which shall be
the __________ [set forth record payment date on Schedule I] or __________
(whether or not a Business Day) next preceding such __________ or _________,
respectively; provided that any such interest not punctually paid or duly
provided for shall be payable as provided in the Indenture. Interest shall be
paid by wire transfer in immediately available funds to the account in the
continental United States designated by the holder of this Global Note in
accordance with the provisions of the Indenture.
The aggregate principal amount of this Global Note represented hereby may
from time to time be reduced or increased to reflect exchanges of a part of this
Global Note for definitive Notes or conversions, redemptions or repurchases of a
part of this Global Note or cancellations of a part of this Global Note or
transfers of interests in the definitive Notes in return for a part of this
Global Note or transfers of a part of this Global Note effected by delivery of
interests in definitive Notes, in each case, and in any such case, by means of
notations on the Schedule of Exchanges, Conversions, Redemptions, Repurchases,
Cancellations and Transfers on the last page hereof. Notwithstanding any
provision of this Global Note to the contrary, (i) exchanges or transfers of a
part of this Global Note for interests in the definitive Notes; (ii) exchanges
or transfers of interests in the definitive Notes in return for a part of this
Global Note; (iii) conversions, redemptions or repurchases of a part of this
Global Note; or (iv) cancellations of a part of this Global Note may be effected
without the surrendering of this Global Note; provided that appropriate
notations on the Schedule of Exchanges, Conversions, Redemptions, Repurchases,
Cancellations and Transfers are made by the Trustee, or the Custodian at the
direction of the Trustee, to reflect the appropriate reduction or increase, as
the case may be, in the aggregate principal amount of this Global Note resulting
therefrom or as a consequence thereof.
Reference is made to the further provisions of this Global Note set forth
on the reverse hereof, including, without limitation, provisions giving the
holder of this Global Note the right to convert this Global Note into Common
Stock of the Company on the terms and subject to the limitations referred to on
the reverse hereof and as more fully specified in the Indenture. Such further
provisions shall for all purposes have the same effect as though fully set forth
at this place.
B-2
This Global Note shall be deemed to be a contract made under the laws of
the State of New York, and for all purposes shall be construed in accordance
with and governed by the laws of said State, without regard to conflicts of laws
principles thereof.
This Global Note shall not be valid or become obligatory for any purpose
until the certificate of authentication hereon shall have been manually signed
by the Trustee or a duly authorized authenticating agent under the Indenture.
IN WITNESS WHEREOF, the Company has caused this Global Note to be duly
executed under its corporate seal.
COMPUTER NETWORK TECHNOLOGY
CORPORATION
By:
-----------------------------------
Name:
Title:
Attest:
-------------------------------
Secretary
[FORM OF CERTIFICATE OF AUTHENTICATION]
CERTIFICATE OF AUTHENTICATION
Dated:
This Note is one of the Notes described in the within-named Indenture.
_________________________, as Trustee
By:
-----------------------------------
Authorized Signatory
B-3
REVERSE OF GLOBAL NOTE
[Title of Note set forth on Schedule I]
This Global Note is one of a duly authorized issue of Notes of the Company,
designated as its [Title of Note Set Forth on Schedule I] (herein called the
"Notes"), in the aggregate principal amount of $___________, all issued or to be
issued under and pursuant to an Indenture dated as of ____________ (the
"Indenture"), between the Company and ______________________, as trustee (the
"Trustee"), to which Indenture and all indentures supplemental thereto reference
is hereby made for a complete description of the rights, limitations of rights,
obligations, duties and immunities thereunder of the Trustee, the Company and
the holders of the Notes. Each Note is subject to, and qualified by, all such
terms as set forth in the Indenture certain of which are summarized hereon and
each holder of a Note is referred to the corresponding provisions of the
Indenture for a complete statement of such terms. To the extent that there is
any inconsistency between the summary provisions set forth in the Notes and the
Indenture, the provisions of the Indenture shall govern. Capitalized terms used
but not defined in this Note shall have the meanings ascribed to them in the
Indenture.
In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal of, premium, if any, and accrued
interest on all Notes may be declared, and upon said declaration shall become,
due and payable, in the manner, with the effect and subject to the conditions
provided in the Indenture.
The payment of principal of, premium, if any, and interest on the Notes
will, to the extent set forth in the Indenture, be subordinated in right of
payment to the prior payment in full of all Senior Indebtedness (as defined in
the Indenture). Upon any distribution to creditors of the Company in a
liquidation or dissolution of the Company or in a bankruptcy, reorganization,
insolvency, receivership or similar proceeding related to the Company or its
property, in an assignment for the benefit of creditors or any marshalling of
the Company's assets and liabilities, the holders of all Senior Indebtedness
will first be entitled to receive payment in full of all amounts due or to
become due thereon before the holders of the Notes will be entitled to receive
any payment in respect of the principal of, premium, if any, or interest on the
Notes (except that holders of Notes may receive securities that are subordinated
at least to the same extent as the Notes to Senior Indebtedness and any
securities issued in exchange for Senior Indebtedness).
The Company also may not make any payment upon or in respect of the Notes
(except in such subordinated securities) if (a) a default in the payment of the
principal of, premium, if any, or interest on Senior Indebtedness occurs and is
continuing beyond any applicable period of grace; or (b) any other default
occurs and is continuing with respect to Designated Senior Indebtedness that
permits holders of the Designated Senior Indebtedness as to which such default
relates to accelerate its maturity and the Trustee receives a notice of such
default (a "Payment Blockage Notice") from the Representative. Payments on the
Notes may and shall be resumed (i) in the case of a Payment Default, upon the
date on which such default is cured or waived; or (ii) in the case of a
Nonpayment Default, 179 days after the date on which the applicable Payment
Blockage Notice is received, unless the maturity of any Senior Indebtedness has
been
B-4
accelerated. No new period of payment blockage may be commenced within 360 days
after the receipt by the Trustee of any prior Payment Blockage Notice. No
Nonpayment Default that existed or was continuing on the date of delivery of any
Payment Blockage Notice to the Trustee shall be, or be made, the basis for a
subsequent Payment Blockage Notice unless such default shall have been cured or
waived.
In the event that the Trustee (or paying agent if other than the Trustee)
or any holder of the Notes receives any payment of principal or interest with
respect to the Notes at a time when such payment is prohibited under the
Indenture, such payment shall be held in trust for the benefit of, and shall be
paid over and delivered to, the holders of Senior Indebtedness or their
representative as their respective interests may appear. After all Senior
Indebtedness is paid in full and until the Notes are paid in full, the holders
of the Notes shall be subrogated (equally and ratably with all other
Indebtedness pari passu with the Notes) to the rights of holders of Senior
Indebtedness to receive distributions applicable to Senior Indebtedness to the
extent that distributions otherwise payable to the holders of the Notes have
been applied to the payment of Senior Indebtedness.
The Indenture contains provisions permitting the Company and the Trustee,
with the consent of the holders of not less than a majority in aggregate
principal amount of the Notes at the time outstanding, evidenced as in the
Indenture provided, to execute supplemental indentures adding any provisions to
or changing in any manner or eliminating any of the provisions of the Indenture
or of any supplemental indenture or modifying in any manner the rights of the
holders of the Notes; provided that no such supplemental indenture shall: (i)
extend the fixed maturity of any Note, or reduce the rate or extend the time of
payment of interest thereon, or reduce the principal amount thereof or premium,
if any, thereon, or reduce any amount payable on redemption thereof, alter the
obligation of the Company to repurchase the Notes at the option of the holders
upon the occurrence of a Change of Control or impair or affect the right of any
Note holder to institute suit for the payment thereof, or make the principal
thereof or interest or premium, if any, thereon payable in any coin or currency
other than that provided in the Notes, modify the subordination provisions in a
manner adverse to the holders of the Notes, or impair the right to convert the
Notes into Common Stock subject to the terms set forth in the Indenture without
the consent of the holder of each Note so affected; or (ii) reduce the aforesaid
percentage of Notes, the holders of which are required to consent to any such
supplemental indenture, without the consent of the holders of all Notes then
outstanding. The Indenture also provides that, prior to any declaration
accelerating the maturity of the Notes, the holders of a majority in aggregate
principal amount of the Notes at the time outstanding may on behalf of the
holders of all of the Notes waive any past default or Event of Default under the
Indenture and its consequences except a default in the payment of interest or
any premium on or the principal of any of the Notes, a failure by the Company to
convert any Notes into Common Stock of the Company or a default in respect of a
covenant or provision of the Indenture that under Article X thereof cannot be
modified or amended without the consent of the holders of all Notes then
outstanding. Any such consent or waiver by the holder of this Global Note
(unless revoked as provided in the Indenture) shall be conclusive and binding
upon such holder and upon all future holders and owners of this Global Note and
any Notes that may be issued in exchange or substitution hereof, irrespective of
whether or not any notation thereof is made upon this Global Note or such other
Notes.
B-5
No reference herein to the Indenture and no provision of this Global Note
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of and any premium and
interest on this Global Note at the place, at the respective times, at the rate
and in the coin or currency herein prescribed.
Interest on the Notes shall be computed on the basis of a 360-day year
composed of twelve 30-day months.
The Notes are issuable in registered form without coupons in denominations
of $1,000 principal amount and integral multiples thereof. At the Corporate
Trust Office of the Trustee and in the manner and subject to the limitations
provided in the Indenture, without payment of any service charge but with
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any registration or exchange of Notes, Notes
may be exchanged for a like aggregate principal amount of Notes of other
authorized denominations.
No sinking fund is provided for the Notes.
The Notes are subject to Provisional Redemption by the Company, in whole or
in part, at any time prior to __________ [set forth Early Redemption Date], upon
notice as set forth in Section 3.2 of the Indenture, at a redemption price equal
to $1,000 per $1,000 principal amount of Notes to be redeemed plus accrued and
unpaid interest, if any, to the Provisional Redemption Date if the closing price
of the Common Stock shall have exceeded 150% of the Conversion Price then in
effect for at least 20 Trading Days within a period of 30 consecutive Trading
Days ending on the Trading Day prior to the Notice Date. Upon any such
Provisional Redemption, the Company shall make a Make-Whole Payment with respect
to the Notes called for Provisional Redemption to holders on the Notice Date in
an amount equal to $______ [set forth Make Whole Payment] per $1,000 principal
amount of Notes, less the amount of any interest actually paid on such Notes
prior to the Notice Date. The Company shall make the Make-Whole Payment on all
Notes called for Provisional Redemption, including any Notes converted into
Common Stock pursuant to the terms of the Indenture after the Notice Date and
prior to the Provisional Redemption Date.
The Notes are also subject to redemption at the option of the Company at
any time on or after ______________ [set forth optional redemption date], in
whole or in part, upon not less than 30 or more than 60 days' notice to the
holders of the Notes prior to the redemption date at the following optional
redemption prices (expressed as percentages of the principal amount), together
with accrued and unpaid interest to the date fixed for redemption, if redeemed
on or after:
Date Redemption Price
---- ----------------
--------------- [------]%
--------------- [------]%
[set forth terms specified on Schedule I]
B-6
If a Change of Control (as defined in the Indenture) shall occur at any
time, then each holder of Notes shall have the right to require that the Company
repurchase such holder's Notes in whole or in part in integral multiples of
$1,000, at a purchase price in cash in an amount equal to 100% of the principal
amount of such Notes, plus accrued and unpaid interest, if any, to the
repurchase date pursuant to an offer to be made by the Company and in accordance
with the procedures set forth in the Indenture.
Subject to the provisions of the Indenture, the holder hereof has the
right, at its option, at any time prior to the close of business on the Business
Day immediately preceding __________, or, as to all or any portion hereof called
for redemption, immediately prior to the close of business on the Business Day
immediately preceding the date fixed for redemption (unless the Company shall
default in payment due upon redemption thereof), to convert the principal hereof
or any portion of such principal that is $1,000 or an integral multiple thereof,
into that number of fully paid and non-assessable shares of Company's Common
Stock, as said shares shall be constituted at the date of conversion, obtained
by dividing the principal amount of this Global Note or portion thereof to be
converted by the Conversion Price of $____ or such Conversion Price as adjusted
from time to time as provided in the Indenture, which conversion shall be
effected either by surrender of this Global Note, together with a conversion
notice as provided in the Indenture, to the Corporate Trust Office of the
Trustee or without surrendering of this Global Note, by appropriate notations on
the Schedule of Exchanges, Conversions, Redemptions, Repurchases, Cancellations
and Transfers made by the Trustee, or the Custodian at the direction of the
Trustee, to reflect the appropriate reduction in the aggregate principal amount
of this Global Note resulting therefrom. No adjustment in respect of interest or
dividends will be made upon any conversion; provided that if this Global Note
shall be surrendered for conversion during the period from the close of business
on any record date for the payment of interest and through the opening of
business on the next succeeding interest payment date, this Global Note (unless
it or the portion being converted shall have been called for redemption on a
date during the period from the close of business on or after any record date to
the close of business on the business day following the corresponding payment
date) on a date during the period from the close of business on or after any
record date to the close of business on the business day following the
corresponding payment date must be accompanied by an amount, in funds acceptable
to the Company, equal to the interest payable on such interest payment date on
the principal amount being converted. The interest payment with respect to a
Note called for redemption will be payable on the corresponding interest payment
date to the registered holder of such Note at the close of business on that
record date (notwithstanding the conversion of such Note before the
corresponding interest payment date) and a note holder who elects to convert
need not include funds equal to the interest paid. No fractional shares will be
issued upon any conversion, but an adjustment in cash will be made, as provided
in the Indenture, in respect of any fraction of a share that would otherwise be
issuable upon the surrender of any Note or Notes for conversion.
Upon due presentment for registration of transfer of this Global Note at
the Corporate Trust Office of the Trustee, or at the option of the holder of
this Global Note, at any other office or agency of the Company maintained for
that purpose pursuant to the Indenture, a new Global Note or Global Notes of
authorized denominations for an equal aggregate principal amount will
B-7
be issued to the transferee in exchange thereof, subject to the conditions and
limitations provided in the Indenture, without charge except for any tax or
other governmental charge imposed in connection therewith.
The Company, the Trustee, any authenticating agent, any paying agent, any
conversion agent and any Note registrar may deem and treat the registered holder
hereof as the absolute owner of this Global Note (whether or not this Global
Note shall be overdue and notwithstanding any notation of ownership or other
writing hereon made by anyone other than the Company or any Note registrar), for
the purpose of receiving payment hereof, or on account hereof, for the
conversion hereof and for all other purposes, and neither the Company nor the
Trustee nor any other authenticating agent nor any paying agent nor any other
conversion agent nor any Note registrar shall be affected by any notice to the
contrary. All payments made to or upon the order of such registered holder
shall, to the extent of the sum or sums paid, satisfy and discharge liability
for monies payable on this Global Note.
No recourse for the payment of the principal of or any premium or interest
on this Global Note, or for any claim based hereon or otherwise in respect
hereof, and no recourse under or upon any obligation, covenant or agreement of
the Company in the Indenture or any indenture supplemental thereto or in any
Note, or because of the creation of any indebtedness represented thereby, shall
be had against any incorporator, stockholder, officer or director, as such,
past, present or future, of the Company or of any Successor Company, either
directly or through the Company or any Successor Company, 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 hereof and
as part of the consideration for the issue hereof, expressly waived and
released.
B-8
ABBREVIATIONS
The following abbreviations, when used in the inscription of the face of
this Note, shall be construed as though they were written out in full according
to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT -
TEN ENT - as tenants by the Custodian
entireties ---------------------------
(Cust)
JT TEN - as joint tenants with right under
of survivorship and not as ---------------------------
tenants in common (Minor)
Uniform Gifts to
Minors Act
---------------------------
(State)
Additional abbreviations may also be used
though not in the above list.
B-9
[FORM OF CONVERSION NOTICE]
CONVERSION NOTICE
To: COMPUTER NETWORK TECHNOLOGY CORPORATION
The undersigned registered owner of this Global Note hereby irrevocably
exercises the option to convert this Global Note, 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 Global Note, and directs that the shares issuable and
deliverable upon such conversion, together with any check in payment for
fractional shares and any Notes representing any unconverted principal amount
hereof, be issued and delivered to the registered holder hereof unless a
different name has been indicated below. If shares or any portion of this Global
Note not converted are to be issued in the name of a person other than the
undersigned, the undersigned will check the appropriate box below and pay all
transfer taxes payable with respect thereto. Any amount required to be paid to
the undersigned on account of interest accompanies this Global Note.
Dated:_______________________
______________________________________
______________________________________
Signature(s)
Signature(s) must be guaranteed by an eligible Guarantor
Institution (banks, stock brokers, savings and loan
associations and credit unions) with membership in an
approved signature guarantee medallion program pursuant to
Securities and Exchange Commission Rule 17Ad-15 if shares of
Common Stock are to be issued, or Notes are to be delivered,
other than to and in the name of the registered holder.
___________________________________
Signature Guarantee
Fill in for registration of shares
if to be issued, and Notes if to be
delivered, other than to and in the
name of the registered holder:
___________________________________
(Name)
___________________________________
(Xxxxxx Xxxxxxx)
___________________________________
(City, State and Zip Code)
Please print name and address
Principal amount to be converted
(if less than all) $_____________
___________________________________
B-10
Social Security or other Taxpayer
Identification Number
B-11
[FORM OF OPTION TO ELECT REPAYMENT
UPON A CHANGE OF CONTROL]
To: COMPUTER NETWORK TECHNOLOGY CORPORATION
The undersigned registered owner of this Global Note hereby irrevocably
acknowledges receipt of a notice from Computer Network Technology Corporation
(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 Global Note, 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 Global Note, together with accrued
interest to such date, to the registered holder hereof.
Dated:_______________________
______________________________________
______________________________________
Signature(s)
______________________________________
Social Security or Other Taxpayer
Identification Number
Principal amount to be repaid
(if less than all): $_____________
B-12
[FORM OF ASSIGNMENT]
For value received ________________ hereby sell(s), assign(s) and
transfer(s) unto __________ (please insert social security or other identifying
number of assignee) the within Note, and hereby irrevocably constitutes and
appoints _________________ attorney to transfer the said Note on the books of
the Company, with full power of substitution in the premises.
Dated:_______________________
______________________________________
______________________________________
Signature(s)
Signature(s) must be guaranteed by an eligible Guarantor
Institution (banks, stock brokers, savings and loan
associations and credit unions) with membership in an
approved signature guarantee medallion program pursuant to
Securities and Exchange Commission Rule 17Ad-15.
________________________________
Signature Guarantee
NOTICE: The signature on the conversion notice, the option to elect
payment upon a Change of Control or the assignment must correspond with
the name as written upon the face of the Note in every particular
without alteration or enlargement or any change whatever.
B-13
SCHEDULE OF EXCHANGES, CONVERSIONS, REDEMPTIONS, REPURCHASES,
CANCELLATIONS AND TRANSFERS
The initial principal amount of this Global Note is U.S. $__________. The
following additions to principal, redemptions, repurchases, exchanges of a part
of this Global Note or definitive Notes and conversions into Common Stock have
been made:
----------------------------------------------------------------------------------------------------------------------
Principal Amount
Date of Addition Redeemed,
to Principal, Repurchased, Remaining Principal
Redemption, Principal Amount Exchanged for Amount
Repurchase, Added on Exchange Interest in Definitive Outstanding Notation Made by
Exchange or of Interest in Notes or Converted following such or on behalf of
Conversion Definitive Notes into Common Stock Transaction the Trustee
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B-14
