Exhibit 4.2
================================================================================
TRANSWITCH CORPORATION
And
U.S. BANK NATIONAL ASSOCIATION
as Trustee
INDENTURE
----------
Dated as of September __, 2003
----------
5.45% Convertible Plus Cash NotesSM due 2007
================================================================================
TRANSWITCH CORPORATION
Reconciliation and tie between Trust Indenture Act
of 1939 and Indenture, dated as of September __, 2003
Trust Indenture
Act Section Indenture Section
Section 310 (a)(1) ................................ 5.10
(a)(2) ................................ 5.10
(b) ................................ 5.03, 5.06
Section 311 ................................ 5.12
Section 312 (a) ................................ 6.04
Section 312 (c) ................................ 6.01
Section 313 (a) ................................ 6.02
Section 313 (c) ................................ 1.01 "Outstanding",
5.05, 6.02, 6.03(c)
Section 314 (a)(1-3) ................................ 6.03
(a)(4) ................................ 9.06
(c)(1) ................................ 1.02
(c)(2) ................................ 1.02
(e) ................................ 1.02
Section 315 (a)(2) ................................ 5.02
(b) ................................ 5.02(h), 5.05
(c) ................................ 5.01
(d) ................................ 5.01
(e) ................................ 4.15
Section 316 (a) (last
sentence) ................................ 1.01 "Outstanding"
(a)(1)(A) ................................ 4.12
(a)(1)(B) ................................ 4.13
(b) ................................ 4.08
(c) ................................ 1.04(d)(i)
Section 317 (a)(1) ................................ 4.03
(a)(2) ................................ 4.04
(b) ................................ 9.03
Section 318 (a) ................................ 1.11
----------
Note: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Indenture.
TABLE OF CONTENTS
Page
----
ARTICLE 1 Definitions and Other Provisions of General Application.............1
SECTION 1.01. Definitions..................................................1
SECTION 1.02. Compliance Certificates and Opinions.........................9
SECTION 1.03. Form of Documents Delivered to Trustee......................10
SECTION 1.04. Acts of Holders.............................................10
SECTION 1.05. Notices, Etc. to Trustee and Company........................12
SECTION 1.06. Notice to Holders; Waiver...................................12
SECTION 1.07. Effect of Headings and Table of Contents....................13
SECTION 1.08. Successors and Assigns......................................13
SECTION 1.09. Separability Clause.........................................13
SECTION 1.10. Benefits of Indenture.......................................13
SECTION 1.11. Governing Law...............................................13
SECTION 1.12. Legal Holiday...............................................13
SECTION 1.13. Personal Immunity from Liability for Incorporators,
Stockholders, Etc...........................................14
SECTION 1.14. Conflict with Trust Indenture Act...........................14
SECTION 1.15. Execution in Counterparts...................................14
ARTICLE 2 Note Forms.........................................................14
SECTION 2.01. Forms of Notes..............................................14
SECTION 2.02. Form of Trustee's Certificate of Authentication.............14
SECTION 2.03. Notes Issuable in Global Form...............................15
ARTICLE 3 The Notes..........................................................16
SECTION 3.01. Title and Term..............................................16
SECTION 3.02. Denominations...............................................16
SECTION 3.03. Execution, Authentication, Delivery and Dating..............16
SECTION 3.04. Registration, Registration of Transfer and Exchange.........17
SECTION 3.05. Mutilated, Destroyed, Lost and Stolen Notes.................19
SECTION 3.06. Payment of Interest; Interest Rights Preserved..............19
SECTION 3.07. Persons Deemed Owners.......................................21
SECTION 3.08. Cancellation................................................22
SECTION 3.09. Computation of Interest.....................................22
SECTION 3.10. CUSIP Numbers...............................................22
ARTICLE 4 Remedies...........................................................22
SECTION 4.01. Events of Default...........................................22
SECTION 4.02. Acceleration of Maturity; Rescission and Annulment..........24
SECTION 4.03. Collection of Indebtedness and Suits for Enforcement
by Trustee..................................................25
SECTION 4.04. Trustee May File Proofs of Claim............................26
-ii-
SECTION 4.05. Trustee May Enforce Claims Without Possession of Notes......26
SECTION 4.06. Application of Money Collected..............................27
SECTION 4.07. Limitation on Suits.........................................27
SECTION 4.08. Unconditional Right of Holders to Receive Principal,
Premium, If Any, and Interest...............................28
SECTION 4.09. Restoration of Rights and Remedies..........................28
SECTION 4.10. Rights and Remedies Cumulative..............................28
SECTION 4.11. Delay or Omission Not Waiver................................28
SECTION 4.12. Control by Holders of Notes.................................28
SECTION 4.13. Waiver of Past Defaults.....................................29
SECTION 4.14. Waiver of Usury, Stay or Extension Laws.....................29
SECTION 4.15. Undertaking for Costs.......................................29
ARTICLE 5 The Trustee........................................................30
SECTION 5.01. General.....................................................30
SECTION 5.02. Certain Rights of Trustee...................................30
SECTION 5.03. Individual Rights of Trustee................................32
SECTION 5.04. Trustee's Disclaimer........................................32
SECTION 5.05. Notice of Default...........................................32
SECTION 5.06. Conflicting Interests of Trustee............................32
SECTION 5.07. Compensation and Indemnity..................................32
SECTION 5.08. Replacement of Trustee......................................33
SECTION 5.09. Successor Trustee by Merger, Etc............................34
SECTION 5.10. Eligibility.................................................34
SECTION 5.11. Money Held in Trust.........................................34
SECTION 5.12. Preferential Collection of Claims...........................35
SECTION 5.13. Trustee's Application for Instructions from
the Company.................................................35
ARTICLE 6 Holders' Lists And Reports By Trustee And Company..................35
SECTION 6.01. Disclosure of Names and Addresses of Holders................35
SECTION 6.02. Reports by Trustee..........................................35
SECTION 6.03. Reports by Company..........................................35
SECTION 6.04. Company to Furnish Trustee Names and Addresses
of Holders..................................................36
ARTICLE 7 Consolidation, Merger, Sale, Lease Or Conveyance...................36
SECTION 7.01. Consolidations and Mergers of Company and Sales,
Leases and Conveyances Permitted Subject to
Certain Conditions..........................................36
SECTION 7.02. Rights and Duties of Successor Corporation..................37
SECTION 7.03. Officers' Certificate and Opinion of Counsel................37
ARTICLE 8 Supplemental Indentures............................................38
SECTION 8.01. Supplemental Indentures Without Consent of Holders..........38
SECTION 8.02. Supplemental Indentures with Consent of Holders.............39
SECTION 8.03. Execution of Supplemental Indenture.........................39
-iii-
SECTION 8.04. Effect of Supplemental Indentures...........................40
SECTION 8.05. Conformity with Trust Indenture Act.........................40
SECTION 8.06. Reference in Notes to Supplemental Indentures...............40
ARTICLE 9 Covenants..........................................................40
SECTION 9.01. Payment of Principal, Premium, If Any, and Interest.........40
SECTION 9.02. Maintenance of Office or Agency.............................40
SECTION 9.03. Money for Notes Payments to Be Held in Trust................41
SECTION 9.04. Existence...................................................42
SECTION 9.05. Payment of Taxes and Other Claims...........................42
SECTION 9.06. Statement as to Compliance; Notice of Default...............42
SECTION 9.07. Prohibition on Private Transactions Involving
Existing Notes..............................................43
SECTION 9.08. Waiver of Certain Covenants.................................43
ARTICLE 10 Redemption Of Notes................................................43
SECTION 10.01. Optional Redemption by the Company..........................43
SECTION 10.02. Election to Redeem; Notice to Trustee.......................43
SECTION 10.03. Selection by Trustee of Notes to Be Redeemed................43
SECTION 10.04. Notice of Redemption........................................44
SECTION 10.05. Deposit of Redemption Price.................................45
SECTION 10.06. Notes Payable on Redemption Date............................45
SECTION 10.07. Notes Redeemed in Part......................................46
ARTICLE 11 Repurchase At Option Of Holders Upon Change In Control.............46
SECTION 11.01. Right to Require Repurchase.................................46
SECTION 11.02. Notices; Method of Exercising Repurchase Right, Etc.........46
SECTION 11.03. Certain Definitions.........................................49
SECTION 11.04. Change in Control...........................................49
ARTICLE 12 Conversion.........................................................50
SECTION 12.01. Voluntary Conversion Privilege and Conversion
Consideration...............................................50
SECTION 12.02. Exercise of Conversion Privilege............................52
SECTION 12.03. Fractional Shares...........................................53
SECTION 12.04. Adjustment of Conversion Consideration......................54
SECTION 12.05. Notice of Adjustments.......................................65
SECTION 12.06. Notice of Certain Corporate Action..........................65
SECTION 12.07. Company's Obligation Regarding Common Stock.................66
SECTION 12.08. Taxes on Conversions........................................67
SECTION 12.09. Covenant as to Common Stock.................................67
SECTION 12.10. Cancellation of Converted Notes.............................67
SECTION 12.11. Provisions in Case of Reclassification, Consolidation,
Merger or Sale of Assets....................................67
SECTION 12.12. Auto-Conversion by the Company..............................68
SECTION 12.13. Notification to Trustee.....................................71
-iv-
SECTION 12.14. Company's Obligation........................................72
SIGNATURES
EXHIBIT A - FORM OF NOTE
-v-
INDENTURE, dated as of September __, 2003, between TRANSWITCH CORPORATION,
a Delaware corporation (the "Company"), having its principal xxxxxx xx Xxxxx
Xxxxxxxxxx Xxxxx, Xxxxxxx, Xxxxxxxxxxx 00000 and U.S. Bank National Association,
a national banking association, as Trustee hereunder (the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the issue of its 5.45% Convertible Plus
Cash NotesSM due 2007 (the "Notes") in an aggregate original principal amount
not to exceed $114,143,000, and to provide for such issuance, the Company has
duly authorized the execution and delivery of this Indenture.
Upon qualification of this Indenture under the Trust Indenture Act of 1939,
as amended (the "TIA"), it shall be subject to the provisions of the TIA that
are deemed to be incorporated into this Indenture and shall, to the extent
applicable, be governed by such provisions.
All things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Notes by
the holders thereof, it is mutually covenanted and agreed, for the equal and
proportionate benefit of all the holders of the Notes, as follows:
ARTICLE 1
Definitions and Other Provisions of General Application
SECTION 1.01. Definitions. For all purposes of this Indenture, except as
otherwise expressly provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular, and
references to he or him or she or her are intended to be gender neutral;
(2) all other terms used herein which are defined in the TIA, either
directly or by reference therein, have the meanings assigned to them therein;
(3) the word "including" means "including without limitation," and
(4) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
"Act," when used with respect to any Holder, has the meaning specified in
Section 1.04.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Agent Members" has the meaning specified in Section 2.03.
"Authorized Newspaper" means a newspaper, printed in the English language
or in an official language of the country of publication, customarily published
on each Business Day, whether or not published on Saturdays, Sundays or
holidays, and of general circulation in each place in connection with which the
term is used or in the financial community of each such place. Whenever
successive publications are required to be made in Authorized Newspapers, the
successive publications may be made in the same or in different Authorized
Newspapers in the same city meeting the foregoing requirements and in each case
on any Business Day. "Auto-Conversion" means either a Cash Auto-Conversion as
defined in 12.12(a) or a Stock Auto-Conversion as defined in 12.12(d), as
applicable.
"Auto-Conversion Date" has the meaning specified in Section 12.12(a).
"Auto-Conversion Notice" means either a Cash Auto-Conversion Notice as
defined in Section 12.12(a) or a Stock Auto-Conversion Notice as defined in
Section 12.12(f).
"Auto-Conversion Price" has the meaning specified in Section 12.12(a). The
Auto-Conversion Price is subject to appropriate adjustment upon certain events
as described in Section 12.04.
"Average Sale Price" has the meaning specified in Section 12.04.
"Bankruptcy Law" has the meaning specified in Section 4.01.
"Base Shares" has the meaning specified in Section 12.01.
"Board of Directors" means the board of directors of the Company, the executive
committee of that board or any committee of that board duly authorized to act
hereunder.
"Board Resolution" means 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" means each Monday, Tuesday, Wednesday, Thursday and Friday
which is not a day on which banking institutions in the City of New York or a
city in which the Corporate Trust Office is located or, when used with respect
to any Place of Payment, such Place of Payment, are authorized or obligated by
law, regulation or executive order to close.
-2-
"Cash Auto-Conversion" has the meaning specified in Section 12.12(a).
"Cash Auto-Conversion Notice" has the meaning specified in Section
12.12(b).
"Change in Control" has the meaning specified in Section 11.04.
"Change in Control Purchase Notice" has the meaning specified in Section
11.02.
"close of business" means 5:00 p.m. (New York City time).
"Closing Price" has the meaning specified in Section 12.03.
"Commencement Date" has the meaning specified in Section 12.04.
"Commission" means the Securities and Exchange Commission, as from time to
time constituted, created under the Securities Exchange Act of 1934, or, if at
any time after execution of this instrument such Commission is not existing and
performing substantially the duties now assigned to it under the TIA, then the
body performing such duties on such date.
"Common Stock" means the common stock of the Company, $0.001 par value, as
it exists on the date of this Indenture and any shares of any class or classes
of capital stock of the Company resulting from any reclassification or
reclassifications thereof.
"Company" means the Person named as the "Company" in the first paragraph of
this Indenture until a successor corporation shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Company" shall mean
such successor corporation.
"Company Notice" has the meaning specified in Section 11.02.
"Company Request" and "Company Order" mean, respectively, a written request
or order signed in the name of the Company by the Chairman of the Board of
Directors, the Chief Executive Officer, the President, the Chief Financial
Officer or a Vice President of the Company and any of the foregoing or any
Assistant Vice President, the Treasurer, an Assistant Treasurer, the Secretary
or an Assistant Secretary of the Company, and delivered to the Trustee.
"conversion," when used with reference to the Notes, shall mean and include
each of a voluntary conversion or an Auto-Conversion.
"Conversion Agent" means any Person authorized by the Company pursuant to
Section 9.02 to convert Notes in accordance with Article 12.
"Conversion Consideration" has the meaning specified in Section 12.01.
"Conversion Date" has the meaning specified in Section 12.02.
-3-
"Corporate Trust Office" means the office of the Trustee at which, at any
particular time, its corporate trust business as it relates to this Indenture
shall be principally administered and as to which notice to that effect has been
delivered to the Company and the Holders in accordance with the provisions
hereof, which office at the date hereof is located at U.S. Bank National
Association, Xxx Xxxxxxx Xxxxxx, Xxxxx Xxxxx, Xxxxxx, XX 00000 Attention:
Corporate Trust Services/Chi C. Ma.
"Current Event" has the meaning specified in Section 12.04.
"Custodian" means U.S. Bank National Association with respect to the Notes
in global form, or any successor entity thereto.
"corporation" means a corporation, association, partnership, company
(including limited liability company), joint-stock company or business trust.
"daily volume-weighted average price" has the meaning specified in Section
12.03.
"Default" means any event that is, or after notice or passage of time or
both would be, an Event of Default.
"Defaulted Interest" has the meaning specified in Section 3.06.
"Dollar" or "$" means a dollar or other equivalent unit in such coin or
currency of the United States of America as at the time shall be legal tender
for the payment of public and private debts.
"DTC" means The Depository Trust Company.
"Event of Default" has the meaning specified in Section 4.01.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder.
"Ex-Dividend Time" has the meaning specified in Section 12.04.
"Existing Notes" shall mean the 4 1/2% Convertible Notes due 2005 issued
pursuant to the Existing Note Indenture.
"Existing Note Indenture" shall mean that certain Indenture, dated as of
September 12, 2000, between the Company and State Street Bank and Trust Company.
"Expiration Time" has the meaning specified in Section 12.04.
"Government Obligations" means 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
payment of which is unconditionally guaranteed as a full faith and credit
obligation by the United States of America, which is not callable or redeemable
at the option of the issuer
-4-
thereof, and shall also include a depository receipt issued by a bank or trust
company as custodian with respect to any such Government Obligation or a
specific payment of interest on or principal of any such Government Obligation
held by such custodian for the account of the holder of a 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 the custodian in respect of the Government
Obligation or the specific payment of interest on or principal of the Government
Obligation evidenced by such depository receipt.
"Holder" means the Person in whose name a Note is registered in the Note
Register.
"Indemnities" has the meaning specified in Section 5.07.
"Indenture" means this instrument as originally executed or as it may from
time to time be supplemented or amended by one or more indentures supplemental
hereto entered into pursuant to the applicable provisions hereof.
"Interest Payment Date" has the meaning specified in Section 3.06.
"Make-Whole Payment" means the interest to be paid or provided for by the
Company upon an Auto-Conversion in an amount equal to two (2) full years of
interest on the principal amount of the Notes so converted, less any interest
paid or provided for on the principal amount of such Notes so Auto-Converted
prior to the Auto-Conversion Date; provided, however, in no event shall the
Make-Whole Payment, if any, be less than an amount equal to one (1) full year of
interest on the Notes. For purposes of this definition, interest shall be
computed on the basis of 365 days elapsed over a 360-day year. By way of
illustration, "two (2) full years of interest" on a principal amount equal to
$1,000 is $110.51 ($1,000 x (730/360) x 5.45%).
"Material Adverse Effect" has the meaning specified in Section 9.04.
"Maturity" means the date on which the principal of the Notes becomes due
and payable as therein or herein provided, whether at the Stated Maturity or
upon voluntary conversion or Auto-Conversion or by declaration of acceleration,
notice of redemption, notice of option to elect repayment or otherwise.
"Nasdaq" shall mean The Nasdaq National Market or, if the Common Stock of
the Company is quoted on The Nasdaq SmallCap Market at the time in issue, The
Nasdaq SmallCap Market.
"Note" or "Notes" means any Note or Notes, as the case may be, issued,
authenticated and delivered under this Indenture.
"Note Register" has the meaning specified in Section 3.04.
"Note Registrar" has the meaning specified in Section 3.04.
"Notice of Default" has the meaning specified in Section 4.01.
-5-
"Officers' Certificate" means a certificate signed by the Chairman of the
Board of Directors, the President or a Vice President and by any of the
foregoing or the Treasurer, an Assistant Treasurer, the Secretary or an
Assistant Secretary of the Company, and delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be counsel
for the Company or who may be an employee of or other counsel for the Company
and who shall be reasonably satisfactory to the Trustee.
"Optional Redemption" has the meaning specified in Section 10.01.
"Other Event" has the meaning specified in Section 12.04.
"Outstanding," when used with respect to Notes, means, as of the date of
determination, all Notes theretofore authenticated and delivered under this
Indenture, except:
(i) Notes theretofore canceled by the Trustee or delivered to the
Trustee for cancellation;
(ii) Notes, or portions thereof, for whose payment or redemption
or repayment at the option of the Holder, money in the necessary
amount has been theretofore deposited with the Trustee or any Paying
Agent (other than the Company) in trust or set aside and segregated in
trust by the Company (if the Company shall act as its own Paying
Agent) for the Holders of such Notes; provided that, if such Notes are
to be redeemed, notice of such redemption has been duly given pursuant
to this Indenture or provision therefor satisfactory to the Trustee
has been made;
(iii) Notes that have been paid pursuant to Section 3.05 or in
exchange for or in lieu of which other Notes have been authenticated
and delivered pursuant to this Indenture, other than any such Notes in
respect of which there shall have been presented to the Trustee proof
satisfactory to it that such Notes are held by a bona fide purchaser
in whose hands such Notes are valid obligations of the Company; and
(iv) Notes voluntarily converted or Auto-Converted pursuant to or
in accordance with this Indenture;
provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Notes have given any request, demand,
authorization, direction, notice, consent or waiver hereunder or are present at
a meeting of Holders for quorum purposes, and for the purpose of making the
calculations required by TIA Section 313, Notes owned by the Company or any
other obligor upon the Notes under a supplemental indenture entered into in
accordance herewith or any Affiliate of the Company or of such other obligor
shall be disregarded and deemed not to be Outstanding, except that, in
determining whether the Trustee shall be protected in making such calculation or
in relying upon any such request, demand, authorization, direction, notice,
consent or waiver, only Notes that the Trustee knows to be so owned shall be so
disregarded. Notes so owned
-6-
that have been pledged in good faith may be regarded as Outstanding if the
pledgee establishes to the satisfaction of the Trustee the pledgee's right so to
act with respect to such Notes and that the pledgee is not the Company or any
other obligor upon the Notes under a supplemental indenture entered into in
accordance herewith or any Affiliate of the Company or of such other obligor.
"Paying Agent" means any Person (including the Company) authorized by the
Company to pay the principal of (and premium, if any) or interest on any Notes
on behalf of the Company.
"Person" means any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization or government or any agency or political subdivision thereof.
"Place of Payment" means the place or places where the principal of (and
premium, if any), interest on and the Redemption Prices and the Repurchase Price
with respect to the Notes are payable as specified by Section 9.02.
"Plus Cash Amount" has the meaning specified in Section 12.01.
"Plus Cash Shares" has the meaning specified in Section 12.01.
"Predecessor Note" means, with respect to any Note, every previous Note
evidencing all or a portion of the same debt as that evidenced by such Note;
and, for the purposes of this definition, any Note authenticated and delivered
under Section 3.05 in exchange for or in lieu of a mutilated, destroyed, lost or
stolen Note shall be deemed to evidence the same debt as the mutilated,
destroyed, lost or stolen Note.
"Purchased Shares" has the meaning specified in Section 12.04.
"Redeemable Capital Stock" has the meaning specified in Section 11.04.
"Redemption Date," when used with respect to any Note to be redeemed, in
whole or in part, means the date fixed for such redemption by or pursuant to
this Indenture.
"Redemption Price," means the Optional Redemption Price as specified in
Section 10.01.
"Reference Date" has the meaning specified in Section 12.04.
"Regular Record Date" for the interest payable on any Interest Payment Date
on the Notes means the date specified for that purpose as contemplated by
Section 3.06, whether or not a Business Day.
"Repurchase Date" has the meaning specified in Section 11.01.
"Repurchase Price" has the meaning specified in Section 11.01.
"Repurchase Event" has the meaning specified in Section 11.03.
-7-
"Responsible Officer," when used with respect to the Trustee, means any
senior vice president, any vice president, any assistant vice president, any
assistant secretary, or other officer of the Trustee working in its Corporate
Trust division, or any other officer of the Trustee working in its Corporate
Trust Division and customarily performing functions similar to those performed
by any of the above designated officers and also means, with respect to a
particular corporate trust matter, any other officer to whom such matter is
referred because of his knowledge of and familiarity with the particular
subject.
"Securities Act" shall mean the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
"Significant Subsidiary" means any Subsidiary that is a "significant
subsidiary" (as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated
under the Securities Act) of the Company.
"Special Record Date" for the payment of any Defaulted Interest on the
Notes means a date fixed by the Trustee pursuant to Section 3.06.
"Stated Maturity" means the date specified in the Notes as the fixed date
on which the principal of, or interest on, such Notes is due and payable.
"Stock Auto-Conversion" has the meaning specified in Section 12.12(d).
"Stock Auto-Conversion Notice" has the meaning specified in Section
12.12(f).
"Stock Substitution Notice" has the meaning specified in Section 12.12(d).
"Stock Substitution Period" has the meaning specified in Section 12.12(e).
"Stock Substitution Period Commencement Date" has the meaning specified in
Section 12.12(e).
"Stock Substitution Price" has the meaning specified in Section 12.12(g).
"Stock Substitution Reference Price" has the meaning specified in Section
12.12(d).
"Subsidiary" means a corporation a majority of the outstanding voting
securities of which is owned, directly or indirectly, by the Company or by one
or more other Subsidiaries of the Company, or by the Company and one or more
other Subsidiaries. For the purposes of this definition, "voting securities"
means shares, interests, participations or other equivalents of corporate stock,
partnership or limited liability company interests or any other participation,
right or other interest in the nature of an equity interest that ordinarily have
voting power for the election of directors, managers or trustees, whether at all
times or only so long as no senior class of equity interest has such voting
power by reason of any contingency.
"Threshold Price" means $[____], as adjusted as provided for in Section
12.04.
-8-
"Time of Determination" has the meaning specified in Section 12.04.
"Trading Day" has the meaning specified in Section 12.03.
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939, and
the rules and regulations promulgated thereunder, as in force on the date this
Indenture is qualified thereunder; provided, however, that in the event the
Trust Indenture Act of 1939 or such rules and regulations are amended after such
date, "Trust Indenture Act" means, to the extent required by any such amendment,
the Trust Indenture Act of 1939 and such rules and regulations as so amended.
"Trustee" means the Person named as the "Trustee" in the first paragraph of
this Indenture until a successor Trustee shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Trustee" shall mean or
include each Person who is then a Trustee hereunder.
"United States" means the United States of America (including the states
and the District of Columbia), its territories, its possessions and other areas
subject to its jurisdiction.
"Valuation Days" has the meaning specified in Section 12.12(e).
SECTION 1.02. Compliance Certificates and Opinions. Upon any application or
request by the Company to the Trustee to take any action under any provision of
this Indenture, the Company shall furnish to the Trustee an Officers'
Certificate stating that all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with and an Opinion
of Counsel stating that in the opinion of such counsel all such conditions
precedent, if any, have been complied with, except that in the case of any such
application or request as to which the furnishing of such documents is
specifically required by any provision of this Indenture relating to such
particular application or request, no additional certificate or opinion need be
furnished.
Every certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture shall include:
(a) a statement that each individual signing such certificate or
opinion has read such condition or covenant and the definitions herein relating
thereto;
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of each such individual, he has
made such examination or investigation as is necessary to enable him to express
an informed opinion as to whether or not such condition or covenant has been
complied with; and
(d) a statement as to whether, in the opinion of each such individual,
such condition or covenant has been complied with.
-9-
SECTION 1.03. Form of Documents Delivered to Trustee. In any case where
several matters are required to be certified by, or covered by an opinion of,
any specified Person, it is not necessary that all such matters be certified by,
or covered by the opinion of, only one such Person, or that they be so certified
or covered by only one document, but one such Person may certify or give an
opinion as to some matters and one or more other such Persons as to other
matters, and any such Person may certify or give an opinion as to such matters
in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon an Opinion of Counsel, or a
certificate or representations by counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the opinion, certificate or
representations with respect to the matters upon which such certificate or
opinion is based are erroneous. Any such Opinion of Counsel or certificate or
representations may be based, insofar as it relates to factual matters, upon a
certificate or opinion of, or representations by, an officer or officers of the
Company stating that the information as to such factual matters is in the
possession of the Company, unless such counsel knows that the certificate or
opinion or representations as to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 1.04. Acts of Holders. (a) Any request, demand, authorization,
direction, notice, consent, waiver or other action provided by this Indenture to
be given or taken by Holders of the Outstanding Notes may be embodied in and
evidenced by one or more instruments of substantially similar tenor signed by
such Holders in person or by agents duly appointed in writing. Except as herein
otherwise expressly provided, such action shall become effective when such
instrument or instruments are delivered to the Trustee and, where it is hereby
expressly required, to the Company. Such instrument or instruments (and the
action embodied therein and evidenced thereby) are herein sometimes referred to
as the "Act" of the Holders signing such instrument or instruments. Proof of
execution of any such instrument or of a writing appointing any such agent, or
of the holding by any Person of a Note, shall be sufficient for any purpose of
this Indenture and conclusive in favor of the Trustee and the Company and any
agent of the Trustee or the Company, if made in the manner provided in this
Section 1.04.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness to such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other reasonable manner which the Trustee deems sufficient.
(c) The ownership of the Notes shall be proved by the Note Register.
-10-
(d) (i) If the Company shall solicit from the Holders any request,
demand, authorization, direction, notice, consent, waiver or other Act, the
Company may, at its option, in or pursuant to a Board Resolution, fix in advance
a record date for the determination of Holders entitled to effect such request,
demand, authorization, direction, notice, consent, waiver or other Act, but the
Company shall have no obligation to do so; provided that the Company shall not
be entitled to set a record date for, and the provisions of this paragraph shall
not apply with respect to, the giving or making of any notice, declaration,
request or direction referred to in clause 1.04(d)(iii) below. Notwithstanding
TIA Section 316(c), such record date shall be the record date specified in or
pursuant to such Board Resolution, which shall be a date not earlier than the
date 30 days prior to the first solicitation of Holders generally in connection
therewith and not later than the date such solicitation is completed. If such a
record date is fixed, such request, demand, authorization, direction, notice,
consent, waiver or other Act may be effected before or after such record date,
but only the Holders of record at the close of business on such record date
shall be deemed to be Holders for the purposes of determining whether Holders of
the requisite proportion of Outstanding Notes have authorized or agreed or
consented to such request, demand, authorization, direction, notice, consent,
waiver or other Act, and for that purpose the Outstanding Notes shall be
computed as of such record date; provided that no such authorization, agreement
or consent by the Holders on such record date shall be deemed effective unless
it shall become effective pursuant to the provisions of this Indenture not later
than eleven months after the record date.
(ii) Subject to clause 1.04(d)(iii) below, in the absence of any
such record date fixed by the Company, regardless as to whether any
solicitation of the Holders is occurring on behalf of the Company or
any Holder, the Trustee may, at its option, fix in advance a record
date for the determination of such Holders entitled to give such
request, demand, authorization, direction, notice, consent, waiver or
other Act, but the Trustee shall have no obligation to do so. Any such
record date shall be a date not more than 30 days prior to the first
solicitation of Holders generally in connection therewith and no later
than the date of such solicitation.
(iii) The Trustee may set any day as a record date for the
purpose of determining the Holders of Outstanding Notes entitled to
join in the giving or making of (A) any notice of default, (B) any
declaration of acceleration referred to in Section 4.02, (C) any
request to institute proceedings referred to in Section 4.07(b), or
(D) any direction referred to in Section 4.12, and may also set an
expiration date by which the relevant Act must be taken. If any record
date is set pursuant to this paragraph, the Holders of Outstanding
Notes on such record date, and no other Holders, shall be entitled to
join in such notice, declaration, request or direction, whether or not
such Holders remain Holders after such record date; provided that no
such Act shall be effective hereunder unless taken on or prior to any
applicable expiration date by Holders of the requisite principal
amount of Outstanding Notes on such record date. Nothing in this
paragraph shall be construed to prevent the Trustee from setting a new
record date for any action (whereupon the record date previously set
shall automatically and without any action by any Person be canceled
and of no effect), nor shall anything in this paragraph be construed
to render ineffective any Act taken by Holders of the requisite
principal amount of Outstanding Notes on the date such Act is taken.
Promptly after any record date is set pursuant to this
-11-
paragraph, the Trustee, at the Company's expense, shall cause notice
of such record date, the proposed Act by Holders and the applicable
expiration date to be given to the Company in writing and to each
Holder of Outstanding Notes in the manner set forth in Section 1.06.
(e) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Note shall bind every future Holder of
the same Note and the Holder of every Note issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done, omitted or suffered to be done by the Trustee, any Note
Registrar, any Paying Agent, any Conversion Agent or the Company in reliance
thereon, whether or not notation of such action is made upon such Note.
SECTION 1.05. Notices, Etc. to Trustee and Company. Any request, demand,
authorization, direction, notice, consent, waiver or other Act of Holders or
other notice or communication provided or permitted by this Indenture to be made
upon, given or furnished to, or filed with:
(a) the Trustee by any Holder or by the Company shall be sufficient
for every purpose hereunder if made, given, furnished or filed in writing to or
with the Trustee, delivered in person, mailed by first class mail, postage
prepaid, or sent by facsimile or overnight courier, at its address as follows:
if mailed by first class mail, to U.S. Bank National Association, Corporate
Trust Services, X.X. Xxx 000, Xxxxxx, XX 00000-0000, Attention: TranSwitch
Corporation 5.45% Convertible Plus Cash NotesSM due 2007, or if sent by other
means to U.S. Bank National Association, Corporate Trust Services, Xxx Xxxxxxx
Xxxxxx, 0xx Xxxxx, Xxxxxx, XX 00000, Attention: TranSwitch Corporation 5.45%
Convertible Plus Cash NotesSM due 2007 (facsimile: 617-603-6683), or to such
other address or facsimile number as the Trustee may designate by written notice
from time to time; provided that notices or other communications to the Trustee
shall only be deemed given when actually received by the Trustee,
(b) the Company by the Trustee or by any Holder shall be sufficient
for every purpose hereunder (unless otherwise herein expressly provided) if in
writing and delivered in person, mailed by first class mail, postage prepaid, or
sent by facsimile or overnight courier, to the Company addressed to it at the
address of its principal office specified in the first paragraph of this
Indenture; provided that the Company may, by notice furnished in writing to the
Trustee, designate additional or different addresses for subsequent notices or
communications by the Company; and further provided that notices or other
communications to the Company shall only be deemed given when actually received
by the Company.
SECTION 1.06. Notice to Holders; Waiver. Where this Indenture provides for
notice of any event to Holders by the Company or the Trustee, such notice shall
be sufficiently given (unless otherwise herein expressly provided) if in writing
and deposited in the mail, first-class postage prepaid, to each such Holder
affected by such event, at his address as it appears in the Note Register, not
later than the latest date, and not earlier than the earliest date, prescribed
for the giving of such notice. Such notice shall be deemed to have been given
when such notice is mailed. In any case where notice to Holders is given by
mail, neither the failure to mail such notice, nor any defect in any notice so
mailed, to any particular Holder shall affect the sufficiency of such notice
with
-12-
respect to other Holders given as provided herein. Any notice deposited in the
mail to a Holder in the manner herein prescribed shall be conclusively deemed to
have been received by such Holder, whether or not such Holder actually receives
such notice.
If by reason of the suspension of or irregularities in regular mail service
or by reason of any other cause or circumstance it shall be impracticable to
give such notice by mail, then such notification to Holders as shall be made
with the approval of the Trustee shall constitute a sufficient notification to
such Holders for every purpose hereunder.
Any request, demand, authorization, direction, notice, consent, waiver or
other Act required or permitted under this Indenture shall be in the English
language, except that any published notice may be in an official language of the
country of publication.
Where this Indenture provides for notice in any manner, such notice may be
waived in writing by the Person entitled to receive such notice, either before
or after the event, and such waiver shall be the equivalent of such notice.
Waivers of notice by Holders shall be filed with the Trustee, but such filing
shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver.
SECTION 1.07. Effect of Headings and Table of Contents. The Article and
Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.
SECTION 1.08. Successors and Assigns. All covenants and agreements in this
Indenture by the Company shall bind its successors and assigns, whether so
expressed or not.
SECTION 1.09. Separability Clause. In case any provision in this Indenture
or in any Note shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
SECTION 1.10. Benefits of Indenture. Nothing in this Indenture or in the
Notes, express or implied, shall give to any Person, other than the parties
hereto, any Note Registrar, any Paying Agent, any Conversion Agent and their
successors hereunder and the Holders any benefit or any legal or equitable
right, remedy or claim under this Indenture.
SECTION 1.11. Governing Law. This Indenture and the Notes shall be governed
by and construed in accordance with the law of the State of New York without
regard to conflict of laws principles.
SECTION 1.12. Legal Holiday. In any case where any Interest Payment Date,
Redemption Date, Repurchase Date, Conversion Date, Auto-Conversion Date, Stated
Maturity or Maturity of any Note or the last date on which a Holder has the
right to convert his Notes shall not be a Business Day at any Place of Payment,
then (notwithstanding any other provision of this Indenture or any Note),
payment of Redemption Price, Repurchase Price, Make-Whole Payment amount,
interest or principal (and premium, if any), or voluntary conversion or
Auto-Conversion of
-13-
the Notes, need not be made at such Place of Payment on such date, but may be
made on the next succeeding Business Day at such Place of Payment with the same
force and effect as if made on the Interest Payment Date, Redemption Date,
Repurchase Date, Conversion Date, Auto-Conversion Date or at the Stated Maturity
or Maturity or on such last day for voluntary conversion or Auto-Conversion;
provided that no interest shall accrue on the amount so payable for the period
from and after such Interest Payment Date, Redemption Date, Repurchase Date,
Conversion Date, Auto-Conversion Date, Stated Maturity or Maturity or on such
last day for voluntary conversion or Auto-Conversion, as the case may be.
SECTION 1.13. Personal Immunity from Liability for Incorporators,
Stockholders, Etc. No recourse shall be had for the payment of the principal of
or premium, if any, or interest, if any, on any Note, or for any claim based
thereon, or otherwise in respect of any Note, or based on or in respect of this
Indenture or any indenture supplemental hereto, against any incorporator, or
against any past, present or future stockholder, director or officer, as such,
of the Company or of any successor corporation, whether by virtue of any
constitution, statute or rule of law, or by the enforcement of any assessment or
penalty or otherwise, all such liability being expressly waived and released as
a condition of, and as consideration for, the execution of this Indenture and
the issue of Notes.
SECTION 1.14. Conflict with Trust Indenture Act. If any provision hereof
limits, qualifies or conflicts with a provision of the TIA that is required
under such Act to be a part of and govern this Indenture, the latter provision
shall control. If any provision of this Indenture modifies or excludes any
provision of the TIA that may be so modified or excluded, the latter provision
shall be deemed to apply to this Indenture as so modified or to be excluded, as
the case may be. To the extent that any provision of a Note conflicts with a
provision in this Indenture, the provision of this Indenture shall control.
SECTION 1.15. 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.
ARTICLE 2
Note Forms
SECTION 2.01. Forms of Notes. The Notes shall be in substantially the form
of Exhibit A hereto, and shall have notations, legends or endorsements required
by law, stock exchange rule or usage or as otherwise indicated in Exhibit A
hereto.
SECTION 2.02. Form of Trustee's Certificate of Authentication. The
Trustee's certificate of authentication shall be in substantially the following
form:
This is one of the Notes described in the within-mentioned Indenture.
DATED: U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By:
-------------------------------------
Authorized Signatory
-14-
SECTION 2.03. Notes Issuable in Global Form. Except as otherwise provided
in this Section 2.03 or in Section 3.04, the Notes shall be issuable only in
global form and deposited with the Trustee, at its Corporate Trust Office (or
such other location as it may determine from time to time for such purpose), as
custodian for the depositary or the nominees thereof, and registered in the name
of the depositary or the nominees thereof, and any such Note shall represent
such of the Outstanding Notes as shall be set forth in the books and records of
the Trustee and may provide that it shall represent the aggregate amount of
Outstanding Notes from time to time as adjusted in the books and records of the
Trustee, and that the aggregate amount of Outstanding Notes represented thereby
may from time to time be increased or decreased to reflect exchanges.
Notwithstanding anything to the contrary contained herein, each of the
Company's and any Holder's obligations or exercise of any right or procedure
described herein shall be made in accordance with and subject to the procedures
of the Trustee and the depository or the nominees thereof. Members of, or
participants in, the depositary ("Agent Members") shall have no rights under
this Indenture with respect to any Note in global form held on their behalf by
the depositary or by the Trustee as the custodian of the depositary or under
such Note in global form, and the depositary may be treated by the Company, the
Trustee and any agent of the Company or the Trustee as the absolute owner of
such Note for all purposes whatsoever. Notwithstanding the foregoing, nothing
herein shall prevent the Company, the Trustee or any agent of the Company or the
Trustee from giving effect to any written certification, proxy or other
authorization furnished by the depositary or impair, as between the depositary
and its Agent Members, the operation of customary practices of such depositary
governing the exercise of the rights of a holder of a beneficial interest in any
Note held in global form.
Any adjustment of the aggregate amount of Outstanding Notes represented by
a Note in global form to reflect the amount, or any increase or decrease in the
amount, of Outstanding Notes represented thereby shall be made by the Trustee in
such manner and upon instructions given by such Person or Persons as shall be
specified therein or in the Company Order to be delivered to the Trustee
pursuant to Section 3.03. Subject to the provisions of Section 3.03, the Trustee
shall, if required, deliver and redeliver any Note in global form in the manner
and upon instructions given by the Person or Persons specified therein or in the
applicable Company Order. If a Company Order pursuant to Section 3.03 has been,
or simultaneously is, delivered, any instructions by the Company with respect to
endorsement or delivery or redelivery of a Note in global form shall be in
writing but need not comply with Section 1.02 and need not be accompanied by an
Opinion of Counsel.
The provisions of the last sentence of Section 3.03 shall apply to any Note
represented by a Note in global form if such Note was never issued and sold by
the Company and the Company delivers to the Trustee the Note in global form
together with written instructions (which need not comply with Section 1.02 and
need not be accompanied by an Opinion of Counsel) with regard to the reduction
in the principal amount of Notes represented thereby, together with the written
statement contemplated by the last sentence of Section 3.03.
Notwithstanding the provisions of Section 3.07, payment of principal of and
any premium and interest on any Note in global form shall be made to the Person
or Persons specified in such Note.
All Notes issued in global form shall bear the following legend:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW YORK, NEW YORK, TO
THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND
ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR 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,
-15-
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL BECAUSE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT
NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE.
ARTICLE 3
The Notes
SECTION 3.01. Title and Term. The Notes shall be and are hereby authorized
to be designated as "5.45% Convertible Plus Cash NotesSM due 2007," limited in
aggregate original principal amount up to $114,143,000. The Notes shall mature
and the principal thereof shall be due and payable, together with all accrued
and unpaid interest thereon, on September 30, 2007. The Notes shall be
convertible into shares of Common Stock as set forth herein.
SECTION 3.02. Denominations. The Notes shall be issuable in denominations
of $1,000 and any integral multiple thereof.
SECTION 3.03. Execution, Authentication, Delivery and Dating. The Notes
shall be executed on behalf of the Company by the Chief Executive Officer, the
Chief Financial Officer, the Treasurer, the President or a Vice President of the
Company. The signature of any of these individuals on the Notes may be a manual
or facsimile signature of such authorized officer and may be imprinted or
otherwise reproduced on the Notes.
Notes bearing the manual or facsimile signatures of an individual who was
at any time the proper officer of the Company shall bind the Company,
notwithstanding that such individual shall have ceased to hold such office prior
to the authentication and delivery of such Notes or did not hold such office at
the date of such Notes.
At any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Notes, executed by the Company, to the
Trustee for authentication, together with a Company Order for the authentication
and delivery of such Notes, and the Trustee in accordance with the Company Order
shall authenticate and deliver such Notes.
Each Note shall be dated the date of its authentication.
No Note shall be entitled to any benefit under this Indenture or be valid
or obligatory for any purpose unless there appears on such Note a certificate of
authentication substantially in the form provided for in Section 2.02, duly
executed by the Trustee by manual signature of an authorized signatory, and such
certificate upon any Note shall be conclusive evidence, and the only evidence,
that such Note has been duly authenticated and delivered hereunder and is
entitled to the benefits of this Indenture. Notwithstanding the foregoing, if
any Note shall have been authenticated and delivered hereunder but never issued
and sold by the Company, and the Company shall deliver such
-16-
Note to the Trustee for cancellation as provided in Section 3.08 together with a
written statement (which need not comply with Section 1.02 and need not be
accompanied by an Opinion of Counsel) stating that such Note has never been
issued and sold by the Company, for all purposes of this Indenture, such Note
shall be deemed not to have been authenticated and delivered hereunder and shall
never be entitled to the benefits of this Indenture.
SECTION 3.04. Registration, Registration of Transfer and Exchange.
(a) The Company shall cause to be kept at the Corporate Trust Office
of the Trustee or in any office or agency of the Company in a Place of Payment a
register for the Notes (the "Note Register") in which, subject to such
reasonable regulations as it may prescribe, the Company shall provide for the
registration of the Notes and of transfers of the Notes. The Note Register shall
be in written form or any other form capable of being converted into written
form within a reasonable time. The Trustee, at its Corporate Trust Office, is
hereby appointed "Note Registrar" for the purpose of registering the Notes and
transfers of the Notes on such Note Register as herein provided. In the event
that the Trustee shall cease to be Note Registrar, it shall have the right to
examine the Note Register at all reasonable times.
Subject to the provisions of this Section 3.04 and except as otherwise
provided in any Note, including any legend thereon, upon surrender for
registration of transfer of any Note at any office or agency of the Company in a
Place of Payment, the Company shall execute, and the Trustee shall authenticate
and deliver, in the name of the designated transferee or transferees, one or
more new Notes, of any authorized denominations and of a like aggregate
principal amount, bearing a number not contemporaneously outstanding, and
containing identical terms and provisions.
Subject to the provisions of this Section 3.04, at the option of the
Holder, the Notes may be exchanged for other Notes, of any authorized
denomination or denominations and of a like aggregate principal amount,
containing identical terms and provisions, upon surrender of the Notes to be
exchanged at any such office or agency. Whenever any such Notes are so
surrendered for exchange, the Company shall execute, and the Trustee shall
authenticate and deliver, the Notes that the Holder making the exchange is
entitled to receive.
Notwithstanding the foregoing, any global Note shall be exchangeable only
as provided in this paragraph. The depositary for the global Notes shall be DTC,
and the global Notes may be transferred, in whole but not in part, only to a
nominee of DTC, or by a nominee of DTC to DTC, or to a successor to DTC for such
global Note selected or approved by the Company or to a nominee of such
successor to DTC. If at any time DTC notifies the Company that it is unwilling
or unable to continue as depositary for the applicable global Note or Notes or
if at any time DTC ceases to be a clearing agency registered under the Exchange
Act, if so required by applicable law or regulation, the Company shall appoint a
successor depositary with respect to such global Note or Notes. If (x) a
successor depositary for such global Note or Notes is not appointed by the
Company within 90 days after the Company receives such notice or becomes aware
of such unwillingness, inability or ineligibility, or (y) a Default or an Event
of Default has occurred and is continuing, or (z) the Company, in its sole
discretion, executes and delivers to the Trustee and the Note Registrar an
Officers' Certificate stating that definitive Notes may be issued in exchange
for interests in a global
-17-
Note or Notes, then the Company shall execute, and the Trustee shall
authenticate and deliver, definitive Notes of like rank, tenor and terms in
definitive form, registered in such names as DTC shall direct and bearing such
legends as the Company shall specify in writing, in an aggregate principal
amount equal to the principal amount of such global Note or Notes. If a Note is
issued in exchange for any portion of a global Note after the close of business
at the office or agency where such exchange occurs on (i) any Regular Record
Date and before the opening of business at such office or agency on the relevant
Interest Payment Date or (ii) any Special Record Date and before the opening of
business at such office or agency on the related proposed date for payment of
Defaulted Interest, interest or Defaulted Interest, as the case may be, shall
not be payable on such Interest Payment Date or proposed date for payment, as
the case may be, in respect of such Note, but will be payable on such Interest
Payment Date or proposed date for payment, as the case may be, only to the
Person to whom interest in respect of such portion of such global Note is
payable in accordance with the provisions of this Indenture.
All Notes issued upon any registration of 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.
Every Note presented or surrendered for registration of transfer or for
exchange or redemption shall (if so required by the Company or the Note
Registrar) be duly endorsed, or be accompanied by a written instrument of
transfer, in form satisfactory to the Company and the Note Registrar, duly
executed by the Holder thereof or his attorney duly authorized in writing.
No service charge shall be made to a Holder for any registration of
transfer or exchange of Notes, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Notes, other than
exchanges pursuant to Section 10.07 or 11.02(h) not involving any transfer.
The Company or the Trustee, as applicable, shall not be required (i) to
issue, register the transfer of or exchange any Note during a period beginning
at the opening of business 15 days before the date of the mailing of a notice of
redemption with respect to the Notes to be redeemed under Section 10.03 and
ending at the close of business on the day of the mailing of the relevant notice
of redemption, or (ii) to register the transfer of or exchange any Note so
selected for redemption in whole or in part, except, in the case of any Note to
be redeemed in part, the portion thereof not to be redeemed, or (iii) to issue,
register the transfer of or exchange any Note that has been surrendered for
repayment at the option of the Holder, except the portion, if any, of such Note
not to be so repaid.
(b) At such time as all interests in the global Note have been
redeemed, converted, canceled, repurchased or transferred, the global Note shall
be, upon receipt thereof, canceled by the Trustee in accordance with standing
procedures and instructions existing between the depositary and the Custodian.
-18-
SECTION 3.05. Mutilated, Destroyed, Lost and Stolen Notes. If any mutilated
Note is surrendered to the Trustee or the Company, together with such security
or indemnity as may be required by the Company or the Trustee to save each of
them or any agent of either of them harmless, the Company shall, at the relevant
Holder's expense, execute and the Trustee shall authenticate and deliver in
exchange therefor a new Note of the same principal amount, containing identical
terms and provisions and bearing a number not contemporaneously outstanding.
If there shall be delivered to the Company and to the Trustee (i) evidence
to their satisfaction of the destruction, loss or theft of any Note and (ii)
such security or indemnity as may be required by them to save each of them and
any agent of either of them harmless, then, in the absence of notice to the
Company or the Trustee that such Note has been acquired by a bona fide
purchaser, the Company, at the relevant Holder's expense, shall execute, and
upon the Company's request the Trustee shall authenticate and deliver, in lieu
of any such destroyed, lost or stolen Note, a new Note of the same principal
amount, containing identical terms and provisions and bearing a number not
contemporaneously outstanding, appertaining to such destroyed, lost or stolen
Note.
Notwithstanding the provisions of the previous two paragraphs, in case any
such mutilated, destroyed, lost or stolen Note has become or is about to become
due and payable, the Company in its discretion may, instead of issuing a new
Note, pay such Note.
Upon the issuance of any new Note under this Section, the Company may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (including
the fees and expenses of the Trustee) connected therewith.
Every new Note issued pursuant to this Section in lieu of any mutilated,
destroyed, lost or stolen Note, shall constitute an original additional
contractual obligation of the Company, whether or not the mutilated, destroyed,
lost or stolen Note shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Notes duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Notes.
SECTION 3.06. Payment of Interest; Interest Rights Preserved. Except as
otherwise provided herein, interest on any Note that is payable, and is
punctually paid or duly provided for, semi-annually on any March 31 and
September 30 of each year (each such date, an "Interest Payment Date"), shall be
paid or duly provided for commencing March 31, 2004 to the Person in whose name
that Note (or one or more Predecessor Notes) is registered at the close of
business on the Regular Record Date for such interest at the office or agency of
the Company maintained for such purpose pursuant to Section 9.02; provided,
however, that each installment of interest on any Note may at the Company's
option be paid or provided for by (i) mailing a check for such interest, payable
to or upon the written order of the Person entitled thereto pursuant to Section
3.07, to the address of such Person as it appears on the Note Register or (ii)
if the Trustee shall have received
-19-
written bank wire instructions prior to the Regular Record Date for such
payment, transfer to an account maintained by the payee located inside the
United States; provided, however, that payments to the depositary shall be made
by wire transfer of immediately available funds to the account of the depositary
or its nominee. The term "Regular Record Date" with respect to any Interest
Payment Date shall mean the March 15 or September 15 preceding March 31 or
September 30, respectively.
Notwithstanding the foregoing or anything to the contrary contained herein,
interest may be paid or duly provided for in shares of the Company's Common
Stock, solely at the Company's option; provided, however, that the Company shall
not make any payment of interest in shares of Common Stock unless the daily
volume-weighted average price of the Common Stock for the ten (10) Trading Days
ending on and including the second Trading Day immediately preceding the
applicable Interest Payment Date equals or exceeds the Threshold Price. If the
Company elects to make any payment of or provision for interest in shares of its
Common Stock, the shares to be delivered will be valued at 95% of the simple
average of the daily volume-weighted average price of the Common Stock for the
ten (10) Trading Days ending on and including the second Trading Day immediately
preceding the applicable Interest Payment Date. The Company shall provide the
Trustee and the Holders with notice of its intention to pay interest in Common
Stock not later than 12:00 noon (New York City time) on the Trading Day
immediately preceding the applicable Interest Payment Date. The Company shall
not issue fractional shares of Common Stock or any scrip representing fractional
shares of Common Stock upon such payment of interest. If any fractional share of
Common Stock otherwise would be issuable upon the payment of or provision for
interest, the Company, at its option, may either make an adjustment therefore in
cash at the current market value thereof to the Holder of the Notes or round the
fractional shares up to the nearest whole share, provided that if such Holder
holds more than one Note the number of full shares that shall be issuable upon
the payment of or provision for interest shall be computed on the basis of the
aggregate principal amount (and the aggregate interest amount payable thereon)
of all of the Notes held by such Holder. For these purposes, the current market
value of a share of Common Stock shall be the Closing Price on the first Trading
Day immediately preceding the applicable Interest Payment Date and such Closing
Price shall be determined as provided in Section 12.03. The Threshold Price and
any calculation or determination in respect of the simple average of the daily
volume-weighted average price of the Common Stock shall be adjusted as provided
for in Section 12.04.
Any interest on any Note that is payable, but is not punctually paid or
duly provided for, on any Interest Payment Date (herein called "Defaulted
Interest") shall forthwith cease to be payable to the registered Holder thereof
on the relevant Regular Record Date by virtue of having been such Holder, and
such Defaulted Interest may be paid by the Company, at its election in each
case, as provided in clause 3.06(a) or 3.06(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
proposed to be paid on each Note and the date of the proposed payment (which
shall not be less than 30 days after such notice is received by the Trustee) and
at the same time the
-20-
Company shall deposit with the Trustee an amount of money equal to the aggregate
amount proposed to be paid in respect of such Defaulted Interest or shall make
arrangements satisfactory to the Trustee for such deposit on or 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 Company 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 proposed payment. The Company shall
promptly notify the Trustee of such Special Record Date and, in the name and at
the expense of the Company, the Trustee shall cause notice of the proposed
payment of such Defaulted Interest and the Special Record Date therefor to be
mailed, first-class postage prepaid, to each Holder of Notes at his address as
it appears in the Note Register not less than 10 days prior to such Special
Record Date. The Trustee may, in its discretion, in the name and at the expense
of the Company, cause a similar notice to be published at least once in an
Authorized Newspaper in each Place of Payment, but such publications shall not
be a condition precedent to the establishment of such Special Record Date.
Notice of the proposed payment of such Defaulted Interest and the Special Record
Date therefor having been mailed as aforesaid, such Defaulted Interest shall be
paid to the Persons in whose names the Notes (or their respective Predecessor
Notes) are 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 on the Notes in
any other lawful manner not inconsistent with the requirements of any securities
exchange on which such 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.
(c) Subject to the foregoing provisions of this Section, each Note
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Note shall carry the rights to interest accrued and
unpaid, and to accrue, which were carried by such other Note.
SECTION 3.07. Persons Deemed Owners. Prior to due presentment of a Note for
registration of transfer, the Company, the Trustee and any agent of the Company
or the Trustee may treat the Person in whose name such Note is registered as the
owner of such Note for the purpose of receiving payment of principal of (and
premium, if any), and (subject to Sections 3.04 and 3.06) interest on, such Note
and for all other purposes whatsoever, whether or not such Note is overdue, and
neither the Company, the Trustee nor any agent of the Company or the Trustee
shall be affected by notice to the contrary.
None of the Company, the Trustee, any Paying Agent or the Note Registrar
shall have any responsibility or liability for any aspect of the records
relating to or payments made on account of beneficial ownership interests of a
Note in global form or for maintaining, supervising or reviewing any records
relating to such beneficial ownership interests.
Notwithstanding the foregoing, with respect to any global Note, nothing
herein shall prevent the Company, the Trustee, or any agent of the Company or
the Trustee, from giving effect to any written certification, proxy or other
authorization furnished by any depositary, as a Holder, with
-21-
respect to such global Note or impair, as between such depositary and owners of
beneficial interests in such global Note, the operation of customary practices
governing the exercise of the rights of such depositary (or its nominee) as a
Holder of such global Note.
SECTION 3.08. Cancellation. All Notes surrendered for payment, redemption,
repayment at the option of the Holder, repurchase, voluntary conversion,
Auto-Conversion or registration of transfer or exchange shall, if surrendered to
any Person other than the Trustee, be delivered to the Trustee, and any such
Notes surrendered directly to the Trustee for any such purpose shall be promptly
canceled by it. The Company may at any time deliver to the Trustee for
cancellation any Notes previously authenticated and delivered hereunder that the
Company may have acquired in any manner whatsoever, and may deliver to the
Trustee (or to any other Person for delivery to the Trustee) for cancellation
any Notes previously authenticated hereunder that the Company has not issued and
sold, and all Notes so delivered shall be promptly canceled by the Trustee. If
the Company shall so acquire any of the Notes, however, such acquisition shall
not operate as a redemption or satisfaction of the indebtedness represented by
such Notes unless and until the same are surrendered to the Trustee for
cancellation. No Notes shall be authenticated in lieu of or in exchange for any
Notes canceled as provided in this Section, except as expressly permitted by
this Indenture. Canceled Notes held by the Trustee shall be destroyed by the
Trustee and the Trustee shall deliver a certificate of such destruction to the
Company, unless by a Company Order the Company directs their return to it.
SECTION 3.09. Computation of Interest. Interest on the Notes shall be
computed on the basis of a 360-day year consisting of twelve 30-day months.
SECTION 3.10. CUSIP Numbers. The Company in issuing the Notes shall use
"CUSIP" numbers, and the Trustee shall use CUSIP numbers in notices of
redemption as a convenience to Holders; provided however, 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 applicable to the Notes.
ARTICLE 4
Remedies
SECTION 4.01. Events of Default. "Event of Default," wherever used herein
with respect to the Notes, means any one of the following events (whatever the
reason for such Event of Default and whether or not 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):
(a) default in the payment of any interest upon any Note, when such
interest becomes due and payable, and continuance of such default for a period
of 30 days; or
-22-
(b) default in the payment of (i) the principal of (or premium, if
any, on) any Note when it becomes due and payable at its Maturity, or (ii) the
Redemption Price with respect to any Note when it becomes due and payable; or
(c) default in the payment of the Repurchase Price in respect of any
Note on the Repurchase Date therefor (whether or not a Person other than the
Company has offered to repurchase Outstanding Notes as contemplated by Section
11.02(j)); or
(d) failure by the Company to give the Company Notice in accordance
with Section 11.02(a) to all Holders of Outstanding Notes and to the Trustee; or
(e) failure by the Company to deliver the Base Shares, the Plus Cash
Amount, the Plus Cash Shares or the Make-Whole Payment, together with cash or
stock in lieu of fractional shares, in each case, as applicable, required to be
delivered following voluntary conversion or Auto-Conversion, as the case may be,
of a Note and continuation of such default for a period of 10 days; or
(f) default in the performance, or breach, of any covenant or warranty
of the Company in this Indenture with respect to any Note (other than a covenant
or warranty a default in whose performance or whose breach is elsewhere in this
Section specifically dealt with) and continuance of such default or breach for a
period of 60 days after there has been given, by registered or certified mail,
to the Company by the Trustee or to the Company and the Trustee by the Holders
of at least 25% in principal amount of the Outstanding Notes a written notice
specifying such default or breach and requiring it to be remedied and stating
that such notice is a "Notice of Default" hereunder; or
(g) a default under any bonds, debentures, notes or other evidences of
indebtedness for money borrowed of the Company or under any mortgages,
indentures or instruments under which there may be issued or by which there may
be secured or evidenced any indebtedness for money borrowed by the Company,
whether such indebtedness now exists or shall hereafter be created, which
indebtedness, individually or in the aggregate, has a principal amount
outstanding in excess of $10,000,000, which default shall have resulted in such
indebtedness becoming or being declared due and payable prior to the date on
which it would otherwise have become due and payable, without such indebtedness
having been discharged, or such acceleration having been rescinded or annulled,
within a period of 60 days after there shall have been given, by registered or
certified mail, to the Company by the Trustee or to the Company and the Trustee
by the Holders of at least 25% in principal amount of the Notes then
Outstanding, a written notice specifying such default and requiring the Company
to cause such indebtedness to be discharged or cause such acceleration to be
rescinded or annulled and stating that such notice is a "Notice of Default"
hereunder (unless such default has been cured or waived); or
(h) the Company or any Significant Subsidiary pursuant to or within
the meaning of any Bankruptcy Law:
(i) commences a voluntary case,
-23-
(ii) consents to the entry of an order for relief against it in
an involuntary case,
(iii) consents to the appointment of a Custodian of it or for all
or substantially all of its property, or
(iv) makes a general assignment for the benefit of its creditors;
or
(i) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(i) is for relief against the Company or any Significant
Subsidiary in an involuntary case,
(ii) appoints a Custodian of the Company or any Significant
Subsidiary or for all or substantially all of the property of any of
them, or
(iii) orders the winding up or liquidation of the Company or any
Significant Subsidiary,
and the order or decree remains unstayed and in effect for 60 days.
As used in this Section 4.01 only, the term "Bankruptcy Law" means title
11, U.S. Code or any similar Federal or State law for the relief of debtors and
the term "Custodian" means any receiver, trustee, assignee, liquidator or other
similar official under any Bankruptcy Law.
SECTION 4.02. Acceleration of Maturity; Rescission and Annulment. If an
Event of Default with respect to Notes at the time Outstanding occurs and is
continuing, then and in every such case the Trustee, or the Holders of not less
than 25% in principal amount of the Outstanding Notes, may declare the principal
of all the Notes, and accrued interest thereon to the date of such declaration,
to be due and payable immediately, by a notice in writing to the Company (and to
the Trustee if given by the Holders), and upon any such declaration such
principal shall become immediately due and payable. If an Event of Default
specified in Section 4.01(h) or Section 4.01(i) occurs, the principal of, and
accrued interest on, all the Notes shall automatically, and without any
declaration or other action on the part of the Trustee or any Holder, become
immediately due and payable.
At any time after such a declaration of acceleration with respect to the
Notes has been made and before a judgment or decree for payment of the money due
has been obtained by the Trustee as hereinafter provided in this Article, the
Holders of a majority in principal amount of the Outstanding Notes, by written
notice to the Company and the Trustee, may rescind and annul such declaration
and its consequences if:
(a) the Company has paid or deposited with the Trustee a sum
sufficient to pay:
(i) all overdue installments of interest on all Outstanding
Notes,
-24-
(ii) the principal of (and premium, if any, on) any Outstanding
Notes that have become due otherwise than by reason of such
declaration of acceleration and interest thereon at the rate or rates
borne by or provided for in such Notes,
(iii) to the extent that payment of such interest is lawful,
interest upon overdue installments of interest at the rate or rates
borne by or provided for in such Notes, and
(iv) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel; and
(b) all Events of Default with respect to the Notes, other than the
nonpayment of the principal of (or premium, if any) or interest on Notes which
have become due solely by reason of such declaration of acceleration, have been
cured or waived as provided in Section 4.13.
No such rescission shall affect any subsequent Default or Event of Default
or impair any right in respect thereof.
SECTION 4.03. Collection of Indebtedness and Suits for Enforcement by
Trustee. The Company covenants that if:
(a) default is made in the payment of any installment of interest on
any Note when such interest becomes due and payable and such default continues
for a period of 30 days, or
(b) default is made in the payment of the principal of (or premium, if
any, on) any Note at its Maturity, then the Company shall, upon demand of the
Trustee, pay to the Trustee, for the benefit of the Holders of such Notes, the
whole amount then due and payable on such Notes for principal (and premium, if
any) and interest, with interest upon any overdue principal (and premium, if
any) and, to the extent that payment of such interest shall be legally
enforceable, upon any overdue installments of interest, at the rate or rates
borne by or provided for in such Notes, and, in addition thereto, such further
amount as shall be sufficient to cover the costs and expenses of collection,
including the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel.
If the Company fails to pay such amounts forthwith upon such demand, the
Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, and may
prosecute such proceeding to judgment or final decree, and may enforce the same
against the Company or any other obligor upon such Notes under a supplemental
indenture entered into in accordance herewith and collect the moneys adjudged or
decreed to be payable in the manner provided by law out of the property of the
Company or any other such obligor upon such Notes, wherever situated.
-25-
If an Event of Default occurs and is continuing, the Trustee may in its
discretion proceed to protect and enforce its rights and the rights of the
Holders of Notes by such appropriate judicial proceedings as the Trustee shall
deem most effectual to protect and enforce any such rights, whether for the
specific enforcement of any covenant or agreement in this Indenture or in aid of
the exercise of any power granted herein, or to enforce any other proper remedy.
SECTION 4.04. Trustee May File Proofs of Claim. In case of the pendency of
any receivership, insolvency, liquidation, bankruptcy, reorganization,
arrangement, adjustment, composition or other judicial proceeding relative to
the Company or any other obligor upon the Notes under a supplemental indenture
entered into in accordance herewith or the property of the Company or of such
other obligor or the Company's, or any such other obligor's, creditors, the
Trustee (irrespective of whether the principal of the Notes shall then be due
and payable as therein expressed or by acceleration or otherwise and
irrespective of whether the Trustee shall have made any demand on the Company
for the payment of overdue principal, premium, if any, or interest) shall be
entitled and empowered, by intervention in such proceeding or otherwise:
(a) to file and prove a claim for the whole amount, or such lesser
amount as may be provided for in the Notes, of principal (and premium, if any)
and interest, owing and unpaid in respect of the Notes and to file such other
papers or documents as may be necessary or advisable in order to have the claims
of the Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and of the
Holders allowed in such judicial proceeding, and
(b) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same; and any custodian,
receiver, assignee, trustee, liquidator, sequestrator (or other similar
official) in any such judicial proceeding is hereby directed by each Holder to
make such payments to the Trustee, and in the event that the Trustee shall
request or consent to the making of such payments directly to the Holders, to
pay to the Trustee any amount due to it for the reasonable compensation,
expenses, disbursements and advances of the Trustee and any predecessor Trustee,
their agents and counsel, and any other amounts due the Trustee or any
predecessor Trustee under Section 5.07.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder of a Note,
any plan of reorganization, arrangement, adjustment or composition affecting the
Notes or the rights of any Holder thereof, or to authorize the Trustee to vote
in respect of the claim of any Holder of a Note in any such proceeding; provided
however, that the Trustee may, on behalf of the Holders, vote for the election
of a trustee in bankruptcy or similar official and be a member of a creditors'
or other similar committee.
SECTION 4.05. Trustee May Enforce Claims Without Possession of Notes. All rights
of action and claims under this Indenture or any of the Notes may be prosecuted
and enforced by the Trustee without the possession of any of the Notes or the
production thereof in any proceeding relating thereto, and any such 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
-26-
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 respect of which such judgment has been recovered.
SECTION 4.06. Application of Money Collected. Any money collected by the
Trustee pursuant to this Article shall be applied in the following order, at the
date or dates fixed by the Trustee and, in case of the distribution of such
money on account of principal (or premium, if any) or interest, upon
presentation of the Notes, or both, as the case may be, and the notation thereon
of the payment if only partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee and any predecessor
Trustee under Section 5.07;
SECOND: To the payment of the amounts then due and unpaid upon the Notes
for principal (and premium, if any) and interest payable, and any other amounts
due and payable under this Indenture or under the Notes in respect of which or
for the benefit of which such money has been collected, ratably, without
preference or priority of any kind, according to the aggregate amounts due and
payable on such Notes for principal (and premium, if any) and, interest,
respectively; and
THIRD: To the payment of the remainder, if any, to the Company.
SECTION 4.07. Limitation on Suits. No Holder of any Note shall have any right to
institute any proceeding, judicial or otherwise, with respect to this Indenture,
or for the appointment of a receiver or trustee, or for any other remedy
hereunder, unless:
(a) such Holder has previously given written notice to the Trustee of a
continuing Event of Default with respect to the Notes;
(b) the Holders of not less than 25% in principal amount of the Outstanding
Notes shall have made written request to the Trustee to institute proceedings in
respect of such Event of Default in its own name as Trustee hereunder;
(c) such Holder or Holders have offered to the Trustee security or
indemnity reasonably satisfactory to the Trustee against the costs, expenses and
liabilities to be incurred in compliance with such request;
(d) the Trustee for 60 days after its receipt of such notice, request and
offer of security or indemnity has failed to institute any such proceeding; and
(e) no direction inconsistent with such written request has been given to
the Trustee during such 60-day period by the Holders of a majority in principal
amount of the Outstanding Notes;
-27-
it being understood and intended that no one or more of such Holders 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 of such Holders, or to obtain or to seek to obtain priority or preference
over any other of such Holders or to enforce any right under this Indenture,
except in the manner herein provided and for the equal and ratable benefit of
all such Holders.
SECTION 4.08. Unconditional Right of Holders to Receive Principal, Premium, If
Any, and Interest. Notwithstanding any other provision in this Indenture, the
Holder of any Note shall have the right, which is absolute and unconditional, to
receive payment of the principal of, and premium, if any, including the
Redemption Price pursuant to Article 10, the Repurchase Price pursuant to
Article 11 and (subject to Sections 3.04 and 3.06) interest on such Note on the
respective due dates expressed in such Note (or, in the case of redemption or
repurchase, on the Redemption Date or Repurchase Date, as the case may be) and
to convert such Note in accordance with the provisions of this Indenture and to
institute suit for the enforcement of any such payment and right to convert, and
such rights shall not be impaired or adversely affected without the consent of
such Holder.
SECTION 4.09. Restoration of Rights and Remedies. If the Trustee or any
Holder of a Note has instituted any proceeding to enforce any right or remedy
under this Indenture and such proceeding has been discontinued or abandoned for
any reason, or has been determined adversely to the Trustee or to such Holder,
then and in every such case, the Company, the Trustee and the Holders of Notes
shall, subject to any determination in such proceeding, be restored severally
and respectively to their former positions hereunder and thereafter all rights
and remedies of the Trustee and the Holders shall continue as though no such
proceeding had been instituted.
SECTION 4.10. Rights and Remedies Cumulative. Except as otherwise provided
with respect to the replacement or payment of mutilated, destroyed, lost or
stolen Notes in the last paragraph of Section 3.05, no right or remedy herein
conferred upon or reserved to the Trustee or to the Holders of Notes is intended
to be exclusive of any other right or remedy, and every right and remedy shall,
to the extent permitted by law, be cumulative and in addition to every other
right and remedy given hereunder or now or hereafter existing at law or in
equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
SECTION 4.11. Delay or Omission Not Waiver. No delay or omission of the
Trustee or of any Holder of any Note to exercise any right or remedy accruing
upon any Event of Default shall impair any such right or remedy or constitute a
waiver of any such Event of Default or an acquiescence therein. Every right and
remedy given by this Article or by law to the Trustee or to the Holders may be
exercised from time to time, and as often as may be deemed expedient, by the
Trustee or by the Holders of Notes, as the case may be.
SECTION 4.12. Control by Holders of Notes. The Holders of not less than a
majority in principal amount of the Outstanding Notes shall have the right to
direct the time, method and
-28-
place of conducting any proceeding for any remedy available to the Trustee or
exercising any trust or power conferred on the Trustee with respect to the
Notes, 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) the Trustee need
not take any action that might involve it in personal liability or be unduly
prejudicial to the Holders of Notes not joining therein.
SECTION 4.13. Waiver of Past Defaults. The Holders of not less than a majority
in principal amount of the Outstanding Notes may on behalf of the Holders of all
the Notes waive any past Default or Event of Default hereunder with respect to
such Notes and its consequences, except a Default or Event of Default:
(a) in the payment of the principal of (or premium, if any) or interest on
any Note;
(b) in respect of the conversion by the Company of any Note;
(c) in the payment of the Redemption Price pursuant to Article 10;
(d) in the payment of the Repurchase Price pursuant to Article 11;
(e) in respect of a covenant or provision hereof that under Article 8
cannot be modified or amended without the consent of the Holder of each
Outstanding Note affected; or
(f) in respect of a covenant or provision hereof for the personal
protection or benefit of the Trustee, without the consent of the Trustee.
Upon any such waiver, such Default or Event of Default shall cease to
exist, and any Event of Default arising from any such Default shall be deemed to
have been cured, for every purpose of this Indenture; but no such waiver shall
extend to any subsequent or other Default or Event of Default or impair any
right consequent thereon.
SECTION 4.14. Waiver of Usury, Stay or Extension Laws. The Company covenants (to
the extent that it may lawfully do so) that it shall not at any time insist
upon, or plead, or in any manner whatsoever claim or take the benefit or
advantage of, any usury, stay or extension law wherever enacted, now or at any
time hereafter in force, which may affect the covenants or the performance of
this Indenture; and the Company (to the extent that it may lawfully do so)
hereby expressly waives all benefit or advantage of any such law, and covenants
that it shall not hinder, delay or impede the execution of any power herein
granted to the Trustee, but will suffer and permit the execution of every such
power as though no such law had been enacted.
SECTION 4.15. Undertaking for 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 in
-29-
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,
against any party litigant in such suit having due regard to the merits and good
faith of the claims or defenses made by such party litigant; but the provisions
of this Section shall not apply to any suit instituted by the Trustee, to any
suit instituted by any Holder, or group of Holders, holding in the aggregate
more than 10% in principal amount of the Outstanding Notes, or to any suit
instituted by any Holder for the enforcement of the payment of the principal of
(or premium, if any) or interest on any Note on or after the respective Stated
Maturities expressed in such Note (or, in the case of redemption or repurchase,
on or after the Redemption Date or the Repurchase Date, respectively), or the
right to convert any Note in accordance with Article 12.
ARTICLE 5
The Trustee
SECTION 5.01. General. The Trustee, prior to the occurrence of an Event of
Default known to a Responsible Officer of the Trustee and after the curing of
all Events of Default that may have occurred, undertakes to perform such duties
and only such duties as are specifically set forth in this Indenture. In case an
Event of Default has occurred (that has not been cured or waived) and is known
to a Responsible Officer of the Trustee, the Trustee shall exercise such of the
rights and powers vested in it by this Indenture, and use the same degree of
care and skill in their exercise, as a prudent man would exercise or use under
the circumstances in the conduct of his own affairs.
No provision of this Indenture shall be construed to relieve the Trustee
from liability for its own negligent action, its own negligent failure to act,
its own willful misconduct, its own recklessness or its own bad faith.
SECTION 5.02. Certain Rights of Trustee. Subject to TIA Sections 315(a)
through (d):
(a) the Trustee may rely, and shall be protected in acting or refraining
from acting, upon any resolution, certificate, statement, instrument, facsimile
transmission, opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or document
believed by it to be genuine and to have been signed, made or presented by the
proper person, and may accept and rely upon the same as conclusive evidence of
the truth and accuracy of the statements and opinions contained therein. The
Trustee need not investigate any fact or matter stated in any such document;
(b) before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel, which shall conform to Section
1.02. The Trustee shall not be liable for any action it takes or omits to take
in good faith in reliance on such certificate or opinion;
(c) the Trustee may consult with counsel, and the written advice of such
counsel shall be full and complete authorization and protection with respect to
any action taken, suffered or omitted by it hereunder in good faith and in
reliance thereon, and may act through its attorneys and
-30-
agents and shall not be responsible for the misconduct or negligence of any
attorney or agent appointed with due care;
(d) the Trustee shall be under no obligation to exercise any of the rights
or powers vested in it by this Indenture at the request or direction of any of
the Holders, unless such Holders shall have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities that might be
incurred by it in complying with such request or direction;
(e) 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 or for any action it takes or omits to take in accordance with the
written direction of the Holders of a majority in principal amount of the
Outstanding Notes relating to the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any trust or
power conferred upon the Trustee, under this Indenture;
(f) whenever in the administration of this Indenture the Trustee shall deem
it desirable that a matter be proved or established prior to taking, suffering
or omitting any action hereunder, the Trustee (unless other evidence be herein
specifically prescribed) may, in the absence of bad faith on its part, rely upon
an Officers' Certificate;
(g) the Trustee shall not be bound to make any investigation into the facts
or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document, but the
Trustee, in its discretion, may make such further inquiry or investigation into
such facts or matters as it may see fit, and, if the Trustee shall determine to
make such further inquiry or investigation, it shall be entitled to examine the
books, records and premises of the Company personally or by agent or attorney;
(h) the Trustee shall not be required to take notice or be deemed to have
notice of any Default or Event of Default unless the Trustee be specifically
notified of such Default or Event of Default in writing by the Company or any
Holder, and in the absence of such notice the Trustee may conclusively assume
that there is no Default or event of Default; provided that if the Trustee is
acting as Paying Agent, the Trustee shall be required to take and be deemed to
have notice of its failure to receive payments of interest or principal
hereunder;
(i) the Trustee shall have no responsibility with respect to any
information in any offering memorandum or other disclosure material distributed
with respect to the Notes, and the Trustee shall have no responsibility for
compliance with securities laws in connection with the issuance and sale,
resale, transfer or exchange of the Notes;
(j) in the event the Trustee shall receive inconsistent or conflicting
requests and security or indemnity from two or more groups of Holders, each
representing at least 25% (but less than 50%) of the aggregate principal amount
of the Notes then Outstanding, the Trustee shall act in accordance with
instructions received by the Holders of the greater percentage thereof;
-31-
(k) except as otherwise expressly provided by the provisions of this
Indenture, the Trustee shall not be obligated, and may not be required to give
or furnish any notice, demand, report, request, reply, statement, advice or
opinion to any Holder or to the Company or any other Person, and the Trustee
shall not incur any liability for its failure or refusal to give or furnish the
same unless obligated or required to do so by the express provisions hereof;
(l) the Trustee shall not be required to give any bond or surety with
respect to the performance of its duties or the exercise of its powers under
this Indenture; and
(m) any permissive power or authority granted to the Trustee shall not be
construed to be a duty.
SECTION 5.03. Individual Rights of Trustee. The Trustee, any Paying Agent,
Note Registrar or any other agent of the Company, in its individual or any other
capacity, may become the owner or pledgee of Notes and may otherwise deal with
the Company, its Subsidiaries or its Affiliates with the same rights it would
have if it were not the Trustee, Paying Agent, Note Registrar or such other
agent. Any registrar, co-registrar, paying agent, conversion agent or
authenticating agent may do the same with like rights. However, upon
qualification of this Indenture under the TIA, the Trustee shall be subject to
TIA Sections 310(b) and 311.
SECTION 5.04. Trustee's Disclaimer. The Trustee (i) makes no representation
as to the validity or adequacy of this Indenture, the Notes or the offering
documents relating to the Notes, (ii) shall not be accountable for the Company's
use or application of the proceeds from the Notes and (iii) shall not be
responsible for any statement in the Notes other than its certificate of
authentication.
SECTION 5.05. Notice of Default. If any Event of Default occurs
and is continuing and if a Responsible Officer of the Trustee has actual
knowledge of such Event of Default, the Trustee shall mail to each Holder in the
manner and to the extent provided in TIA Section 313(c) notice of the Event of
Default within 90 days after it occurs, unless such Event of Default has been
cured or waived; provided, however, that, except in the case of a Default in the
payment of the principal of (or premium, if any) or interest on any Note, the
Trustee shall be protected in withholding such notice if and so long as
Responsible Officers of the Trustee in good faith determine that the withholding
of such notice is in the interests of the Holders of the Notes.
SECTION 5.06. Conflicting Interests of Trustee. If the Trustee has or shall
acquire a conflicting interest within the meaning of the TIA, the Trustee shall
either eliminate such interest or resign, to the extent and in the manner
provided by, and subject to the provisions of, the TIA and this Indenture.
SECTION 5.07. Compensation and Indemnity. The Company shall pay to the
Trustee such compensation as shall be agreed upon in writing for its services.
The compensation of the Trustee shall not be limited by any law on compensation
of a trustee of an express trust. The Company shall reimburse the Trustee upon
request for all reasonable out-of-pocket expenses, disbursements and advances
incurred or made by the Trustee in accordance with this Indenture.
-32-
Such expenses shall include the reasonable compensation, expenses, disbursements
and advances of the Trustee's agents and counsel.
The Company shall indemnify and hold harmless the Trustee and its
directors, agents and employees (including officers) (collectively the
"Indemnitees") against any and all losses, liabilities, obligations, damages,
penalties, fines, judgments, actions, suits, proceedings, reasonable costs and
expenses (including reasonable fees and disbursements of counsel) of any kind
whatsoever that may be incurred by or imposed on the Indemnitees or any of them
arising out of or in connection with the acceptance or administration of the
Trustee's duties under this Indenture; provided, however, that the Company need
not reimburse any expense or indemnify against any loss, obligation, damage,
penalty, fine, judgment, action, suit, proceeding, reasonable cost or expense
(including reasonable fees and disbursements of counsel) of any kind whatsoever
that may be incurred by Indemnitees or any of them which results from the
negligence or willful misconduct of the Indemnitees or any of them. The Trustee
shall notify the Company promptly of any claim for which it may seek indemnity.
Failure by the Trustee to so notify the Company shall not relieve the Company of
its obligations hereunder, unless the Company is materially prejudiced thereby.
The Company shall defend the claim, and the Trustee shall cooperate in the
defense. Unless otherwise set forth herein, the Indemnitees or any of them, may
have separate counsel and the Company shall pay the reasonable fees and expenses
of such counsel. The Company need not pay for any settlement made without its
consent, which consent shall not be unreasonably withheld. The provisions of
this Section 5.07 shall survive the termination of this Indenture and the
resignation or removal of the Trustee for any reason, including any termination
under any bankruptcy law.
To secure the Company's payment obligations in this Section 5.07, the
Trustee shall have a lien prior to the Notes on all money or property held or
collected by the Trustee, in its capacity as Trustee, except money or property
held in trust to pay principal of, premium, if any, and interest on particular
Notes.
If the Trustee incurs expenses or renders services after the occurrence of
an Event of Default specified in Section 4.01(h) or Section 4.01(i), such
expenses, and the compensation due to the Trustee for such services, are
intended to constitute expenses of administration under Title 11 of the United
States Bankruptcy Code or any applicable federal or state law for the relief of
debtors.
SECTION 5.08. Replacement of Trustee. A resignation or removal of the
Trustee and appointment of a successor Trustee shall become effective only upon
the successor Trustee's acceptance of appointment as provided in this Section
5.08.
The Trustee may resign at any time by so notifying the Company in writing
at least thirty days prior to the date of the proposed resignation. The Holders
of a majority in principal amount of the Outstanding Notes may at any time, by
written notice to the Trustee and the Company, remove the Trustee and, with the
prior consent of the Company, appoint a successor Trustee. The Company may
remove the Trustee if: (i) the Trustee is no longer eligible under Section 5.10;
(ii) the Trustee is adjudged a bankrupt or an insolvent; (iii) a receiver or
other public officer takes charge of the Trustee or its property; or (iv) the
Trustee becomes incapable of acting.
-33-
If the Trustee is removed without the concurrent appointment by the Holders
of a successor Trustee, if the Trustee resigns, or if a vacancy exists in the
office of Trustee for any other reason, the Company shall promptly appoint a
successor Trustee. If no successor Trustee has delivered its written acceptance
required by the next succeeding paragraph of this Section 5.08 within thirty
days after the retiring Trustee delivers notice of its resignation or is
removed, or after the occurrence of a vacancy in the office of Trustee for any
other reason, the retiring Trustee, the Company or the Holders of a majority in
principal amount of the Outstanding Notes may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the Company. Immediately after the delivery of
such written acceptance, subject to the lien provided in Section 5.07, (i) the
retiring Trustee shall transfer all property held by it as Trustee to the
successor Trustee, (ii) the resignation or removal of the retiring Trustee shall
become effective and (iii) the successor Trustee shall have all the rights,
powers and duties of the Trustee under this Indenture. A successor Trustee shall
mail notice of its succession to each Holder.
If the Trustee is no longer eligible under Section 5.10, any Holder who
satisfies the requirements of TIA Section 310(b) may petition any court of
competent jurisdiction for the removal of the Trustee and the appointment of a
successor Trustee.
The Company shall give notice of any resignation and any removal of the
Trustee and each appointment of a successor Trustee to all Holders. Each notice
shall include the name of the successor Trustee and the address of its Corporate
Trust Office.
Notwithstanding replacement of the Trustee pursuant to this Section 5.08,
the Company's obligations under Section 5.07 shall continue for the benefit of
the retiring Trustee.
SECTION 5.09. Successor Trustee by Merger, Etc. If the Trustee consolidates
with, merges or converts into, or transfers all or substantially all of its
corporate trust business (including the administration of this Indenture) to,
another corporation or national banking association, the resulting, surviving or
transferee corporation or national banking association, without any further act,
shall be the successor Trustee with the same effect as if the successor Trustee
had been named as the Trustee herein.
SECTION 5.10. Eligibility. This Indenture shall always have a Trustee who
satisfies the requirements of TIA Section 310(a)(1). The Trustee (or the bank
holding company to which the Trustee is a member) shall have a combined capital
and surplus of at least $25 million as set forth in its most recent published
annual report of condition.
SECTION 5.11. Money Held in Trust. Subject to the provisions of Section
9.03, 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. The
Trustee shall not be liable for interest on any money received by it except as
the Trustee may agree with the Company. Money held in trust by the Trustee need
not be segregated from other funds except to the extent required by law.
-34-
SECTION 5.12. Preferential Collection of Claims. If and when the Trustee
shall be or become a creditor of the Company (or any other obligor upon the
Notes under a supplemental indenture entered into in accordance herewith), the
Trustee shall be subject to the provisions of the Trust Indenture Act regarding
the collection of the claims against the Company (or any such other obligor).
SECTION 5.13. Trustee's Application for Instructions from the Company. Any
application by the Trustee for written instructions from the Company (other than
with regard to any action proposed to be taken or omitted to be taken by the
Trustee that affects the rights of the Holders) may, at the option of the
Trustee, set forth in writing any action proposed to be taken or omitted by the
Trustee under this Indenture and the date on and/or after which such action
shall be taken or such omission shall be effective. The Trustee shall not be
liable for any action taken by, or omission of, the Trustee in accordance with a
proposal included in such application on or after the date specified in such
application (which date shall not be less than ten Business Days after the date
any officer of the Company actually receives such application, unless any such
officer shall have consented in writing to any earlier date) unless prior to
taking any such action (or the effective date in the case of an omission), the
Trustee shall have received written instructions in response to such application
specifying the action to be taken or omitted.
ARTICLE 6
Holders' Lists And Reports By Trustee And Company
SECTION 6.01. Disclosure of Names and Addresses of Holders. Every Holder of
Notes, by receiving and holding the same, agrees with the Company and the
Trustee that none of the Company, the Trustee, any Paying Agent or any Note
Registrar, shall be held accountable by reason of the disclosure of any
information as to the names and addresses of the Holders of Notes in accordance
with TIA Section 312, regardless of the source from which such information was
derived, and that the Trustee shall not be held accountable by reason of mailing
any material pursuant to a request made under TIA Section 312(b).
SECTION 6.02. Reports by Trustee. Within 60 days after October 15 of each
year, commencing with the first October 15 to occur after the qualification of
this Indenture, the Trustee shall transmit by mail to all Holders of Notes as
provided in TIA Section 313(c), if required by TIA Section 313(a), a brief
report dated as of such October 15. A copy of each such report shall at the time
of such transmission to Holders be filed by the Trustee with the Company.
SECTION 6.03. Reports by Company. The Company shall:
(a) file with the Trustee, within 15 days after the Company is required to
file the same with the Commission, copies of the annual reports and of the
information, documents and other reports (or copies of such portions of any of
the foregoing as the Commission may from time to time by rules and regulations
prescribe) that the Company may be required to file with the Commission pursuant
to Sections 13(a) or 13(b) or Section 15(d) of the Exchange Act; or, if the
Company is not required to file information, documents or reports pursuant to
any of such Sections, then it shall file with the Trustee, in accordance with
rules and regulations prescribed from time to time by the
-35-
Commission, such of the supplementary and periodic information, documents and
reports that may be required pursuant to Section 13 of the Exchange Act in
respect of a security listed and registered on a national securities exchange as
may be prescribed from time to time in such rules and regulations;
(b) file with the Trustee and the Commission, in accordance with rules and
regulations prescribed from time to time by the Commission, such additional
information, documents and reports with respect to compliance by the Company
with the conditions and covenants of this Indenture as may be required from time
to time by such rules and regulations; and
(c) file with the Trustee and the Commission, if applicable, and transmit
by mail to the Holders, within thirty days after the filing thereof with the
Trustee, in the manner and to the extent provided in TIA Section 313(c), such
summaries of any information, documents and reports required to be filed by the
Company pursuant to paragraphs (1) and (2) of this Section as may be required by
rules and regulations prescribed from time to time by the Commission and sell
other information as may be required pursuant to the TIA, at the time and in the
manner provided pursuant to such Act.
SECTION 6.04. Company to Furnish Trustee Names and Addresses of Holders.
(a) The Company shall furnish or cause to be furnished to the Trustee:
(i) semiannually, not later than 10 days after the Regular Record Date
for the payment of interest on the Notes, a list, in such form as the
Trustee may reasonably require, of the names and addresses of the Holders
as of such Regular Record Date; and
(ii) at such other times as the Trustee may request in writing, within
30 days after the receipt by the Company of any such request, a list of
similar form and content as of a date not more than 15 days prior to the
time such list is furnished,
provided, however, that, so long as the Trustee is the Note Registrar,
no such list shall be required to be furnished. (b) The Company shall
provide the Trustee with at least thirty days' prior notice of any change
in location of its principal executive offices or other principal place of
business.
ARTICLE 7
Consolidation, Merger, Sale, Lease Or Conveyance
SECTION 7.01. Consolidations and Mergers of Company and Sales, Leases and
Conveyances Permitted Subject to Certain Conditions. The Company may consolidate
with, or sell, lease, transfer, convey or otherwise dispose of all or
substantially all of its assets to, or merge with or into any other Person,
provided however, that in any such case, (1) either the Company shall be the
-36-
continuing corporation, or the Person (if other than the Company) formed by such
consolidation or into which the Company is merged or the Person (if other than a
Subsidiary of the Company) that acquires or leases the Company's assets
substantially as an entirety is a corporation, partnership, limited liability
company or trust organized and existing under the laws of any United States
jurisdiction and expressly assumes the due and punctual payment of the principal
of (and premium, if any) and any interest payable pursuant to this Indenture on
all of the Notes, according to their tenor, and the due and punctual performance
and observance of all of the covenants and conditions of this Indenture to be
performed by the Company and shall have provided for conversion rights, as
appropriately adjusted, if applicable, in accordance with the provisions of
Article 12 hereof, by supplemental indenture, complying with Article 8 hereof,
satisfactory to the Trustee, executed and delivered to the Trustee by such
corporation and (2) immediately after giving effect to such transaction, no
Default or Event of Default, shall have occurred and be continuing. For purposes
of the foregoing, the transfer (by lease, assignment, sale or otherwise) of the
properties and assets of one or more Subsidiaries (other than to the Company or
another Subsidiary), which, if such assets were owned by the Company, would
constitute all or substantially all of the properties and assets of the Company,
shall be deemed to be the transfer of all or substantially all of the properties
and assets of the Company.
SECTION 7.02. Rights and Duties of Successor Corporation. In case of any
such consolidation, merger, sale, lease, conveyance or other disposition and
upon any such assumption by the successor Person, such successor Person shall
succeed to and be substituted for the Company, with the same effect as if it had
been named herein as the party of the first part, and the predecessor
corporation, except in the event of a lease, shall be relieved of any further
obligation under this Indenture and the Notes. Such successor Person thereupon
may cause to be signed, and may issue either in its own name or in the name of
the Company, any or all of the Notes issuable hereunder that theretofore shall
not have been signed by the Company and delivered to the Trustee; and, upon the
order of such successor Person, instead of the Company, and subject to all the
terms, conditions and limitations in this Indenture prescribed, the Trustee
shall authenticate and shall deliver any Notes that previously shall have been
signed and delivered by the officers of the Company to the Trustee for
authentication, and any Notes that such successor Person thereafter shall cause
to be signed and delivered to the Trustee for that purpose. All the Notes so
issued shall in all respects have the same legal rank and benefit under this
Indenture as the Notes theretofore or thereafter issued in accordance with the
terms of this Indenture as though all of such Notes had been issued at the date
of the execution hereof.
In case of any such consolidation, merger, sale, lease, conveyance or other
disposition, such changes in phraseology and form (but not in substance) may be
made in the Notes thereafter to be issued as may be appropriate.
Section 7.03. Officers' Certificate and Opinion of Counsel. Any
consolidation, merger, sale, lease, transfer, conveyance or other disposition
permitted under Section 7.01 is also subject to the condition that the Trustee
receive an Officers' Certificate and an Opinion of Counsel to the effect that
any such consolidation, merger, sale, lease, transfer, conveyance or other
disposition complies with the provisions of this Article. Such opinion of
counsel shall state that any
-37-
supplemental indenture executed and delivered by a successor Person pursuant to
this Article 7 constitutes the legal, valid and binding obligation of such
successor Person, subject to customary and appropriate exceptions.
ARTICLE 8
Supplemental Indentures
Section 8.01. Supplemental Indentures Without Consent of Holders. Without
the consent of any Holders of Notes, the Company, when authorized by or pursuant
to a Board Resolution, and the Trustee, at any time and from time to time, may
enter into one or more indentures supplemental hereto, in form satisfactory to
the Trustee, for any of the following purposes:
(a) to evidence the succession of another Person to the Company and the
assumption by any such successor of the covenants of the Company contained
herein and the Notes issued hereunder;
(b) to add to the covenants of the Company for the equal and ratable
benefit of the Holders or to surrender any right, power or option herein
conferred upon the Company;
(c) to add any Events of Default for the benefit of the Holders proposed by
the Company in a Company Request and, in respect of any such additional Event of
Default, 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 Event of Default, or may limit the remedies available to the Trustee upon
such Event of Default or limit the right of the Holders of a majority in
aggregate principal amount of those Notes to which such additional Events of
Default apply to waive such default, all as set forth in the Company Request;
(d) to evidence and provide for the acceptance of appointment hereunder by a
successor Trustee and to add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the administration
of the trusts hereunder by more than one Trustee;
(e) to cure any ambiguity or to correct or supplement any provision herein
that may be defective or inconsistent with any other provision herein; provided
such provisions shall not adversely affect the interests of the Holders of Notes
in any material respect;
(f) to make any change that does not adversely affect the rights of any
Holder of Notes or to surrender any right, power or option conferred on the
Company hereunder;
(g) to make any change to comply with any requirement of the Commission in
connection with the qualification of the Indenture under TIA; or
-38-
(h) to provide for the issuance of uncertificated Notes in addition to or
in place of certificated Notes; provided, however that the uncertificated Notes
are issued in registered form for purposes of Section 163(f) of the Internal
Revenue Code of 1986.
The Company and the Trustee may not enter into a supplemental indenture
pursuant to this Section 8.01 if such supplemental indenture modifies in any
respect any Event of Default relating to any covenant in this Indenture in
effect immediately prior to the time such supplemental indenture becomes
effective.
Section 8.02. Supplemental Indentures with Consent of Holders. With the
consent of the Holders of not less than a majority in principal amount of the
Outstanding Notes affected by such supplemental indenture, by Act of said
Holders delivered to the Company and the Trustee, the Company, when authorized
by or pursuant to a Board Resolution, and the Trustee may 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 of modifying in any manner the rights of the Holders;
provided, however, that no such supplemental indenture shall, without the
consent of the Holder of each Outstanding Note affected thereby:
(a) reduce the principal amount, Repurchase Price or Redemption Price with
respect to any Note, or extend the Stated Maturity of any Note or alter the
manner of payment or rate of interest on any Note or make any Note (including
any Redemption Price or Repurchase Price in respect of such Note) payable in
money or Notes other than that stated in the Note;
(b) reduce the percentage in principal amount of the Outstanding Notes the
consent of whose Holders is required for any such supplemental indenture or the
consent of whose Holders is required for any waiver with respect to Notes (or
for any waiver of compliance with certain provisions of this Indenture or
certain Defaults or Events of Default and their consequences);
(c) make any change that adversely affects the right to convert any Note;
(d) modify the provisions of the Indenture relating to the ranking of the
Notes in a manner adverse to the Holders of the Notes; or
(e) impair the right to institute suit for the enforcement of any payment
with respect to, or conversion of, the Notes.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
Section 8.03. Execution of Supplemental Indenture. In executing, or
accepting the additional trusts created by, any supplemental indenture permitted
by this Article or the modification thereby of the trusts created by this
Indenture, the Trustee shall be entitled to receive, and (subject to Article 5)
shall be fully protected in relying upon, an Opinion of Counsel stating that (i)
the execution of such supplemental indenture is authorized or permitted by this
Indenture, (ii) all
-39-
conditions precedent to its execution and delivery have been complied with, and
(iii) such supplemental indenture constitutes the valid and binding obligation
of the Company. The Trustee may, but shall not be obligated to, enter into any
such supplemental indenture that affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
Section 8.04. Effect of Supplemental Indentures. Upon the execution of any
supplemental indenture under this Article, this Indenture shall be modified in
accordance therewith, and such supplemental indenture shall form a part of this
Indenture for all purposes; and every Holder of Notes theretofore or thereafter
authenticated and delivered hereunder shall be bound thereby.
Section 8.05. Conformity with Trust Indenture Act. Every supplemental
indenture executed pursuant to this Article shall conform to the requirements of
the Trust Indenture Act as then in effect.
Section 8.06. Reference in Notes to Supplemental Indentures. Notes
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article may, and shall, if required by the Trustee, bear a
notation in form approved by the Trustee as to any matter provided for in such
supplemental indenture. If the Company shall so determine, new Notes so modified
as to conform, in the opinion of the Trustee and the Company, to any such
supplemental indenture may be prepared and executed by the Company and
authenticated and delivered by the Trustee in exchange for Outstanding Notes.
ARTICLE 9
COVENANTS
Section 9.01. Payment of Principal, Premium, If Any, and Interest. The
Company covenants and agrees for the benefit of the Holders of Notes that it
shall duly and punctually pay the principal of (and premium, if any), interest
on, and the Repurchase Price, the Redemption Price with respect to, the Notes in
accordance with the terms of the Notes and this Indenture. At the option of the
Company, all payments of principal with respect to any Note may be paid by check
to the registered Holder of the Note or other Person entitled thereto against
surrender of such Note. The conversion of any Notes pursuant to Article 12
hereof, together with the making of any payments required to be made in
accordance with the terms of the Notes and this Indenture, shall satisfy the
Company's obligations under this Section 9.01 with respect to such Notes.
Section 9.02. Maintenance of Office or Agency. The Company shall maintain a
Place of Payment for the Notes in the Borough of Manhattan, The City of New
York, which shall be an office or agency where the Notes may be presented or
surrendered for payment or conversion, exchange or redemption, where the Notes
may be surrendered for registration of transfer or exchange and where notices
and demands to or upon the Company in respect of the Notes and this Indenture
may be served. The Company initially designates U.S. Bank National Association,
U.S. Bank Trust New York, 000 Xxxx Xxxxxx, Xxxxx 0000, Xxx Xxxx, XX 00000 as
such an office or agency of the Company, unless and until the Company shall
designate and maintain some other office or agency for one or more of such
purposes. The Company shall give prompt written notice to
-40-
the Trustee of the location, and any change in the location, of each such office
or agency. If at any time the Company shall fail to maintain any such required
office or agency or shall fail to furnish the Trustee with the address thereof,
such presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Trustee, and the Company hereby appoints the
Trustee its agent to receive all such presentations, surrenders, notices and
demands.
The Company may from time to time designate one or more other offices or
agencies (in or outside of The City of New York) where the Notes may be
presented or surrendered for any or all of such purposes, and may from time to
time rescind such designations; provided, however, that no such designation or
rescission shall in any manner relieve the Company of its obligation to maintain
an office or agency in accordance with the requirements set forth above for such
purposes. The Company shall give prompt written notice to the Trustee of any
such designation or rescission and of any change in the location of any such
other office or agency.
Section 9.03. Money for Notes Payments to Be Held in Trust. If the Company
shall at any time act as its own Paying Agent with respect to any Notes, it
shall, on or before each due date of the principal of (and premium, if any), or
interest on, the Notes, segregate and hold in trust for the benefit of the
Persons entitled thereto a sum sufficient to pay the principal (and premium, if
any) or interest so becoming due until such sums shall be paid to such Persons
or otherwise disposed of as herein provided, and shall promptly notify the
Trustee of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents for the Notes, it
shall, before each due date of the principal of (and premium, if any), or
interest on, the Notes, deposit with a Paying Agent a sum sufficient to pay the
principal (and premium, if any) or interest, so becoming due, such sum to be
held in trust for the benefit of the Persons entitled to such principal, premium
or interest and (unless such Paying Agent is the Trustee) the Company shall
promptly notify the Trustee of its action or failure so to act.
The Company shall cause each Paying Agent other than the Trustee to execute
and deliver to the Trustee an instrument pursuant to which such Paying Agent
shall agree with the Trustee, subject to the provisions of this Section, that
such Paying Agent shall:
(a) hold all sums held by it for the payment of principal of (and premium,
if any,) or interest on the Notes, in trust for the benefit of the Persons
entitled thereto, until such sums shall be paid to such Persons or otherwise
disposed of as herein provided;
(b) give the Trustee notice of any default by the Company (or any other
obligor upon the Notes under a supplemental indenture entered into in accordance
herewith) in the making of any such payment of principal (and premium, if any)
or interest; and
(c) at any time during the continuance of any such default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so held in
trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture or for any other purpose, pay, or by Company
Order direct any Paying Agent to pay,
-41-
to the Trustee all sums held in trust by the Company or such Paying Agent, such
sums to be held by the Trustee upon the same trusts as those upon which such
sums were held by the Company or such Paying Agent; and, upon such payment by
any Paying Agent to the Trustee, such Paying Agent shall be released from all
further liability with respect to such sums.
Any money deposited with the Trustee or any Paying Agent, or then held by
the Company, in trust for the payment of the principal of (and premium, if any)
or interest on any Note and remaining unclaimed for two years after such
principal (and premium, if any) or interest has become due and payable shall be
paid to the Company upon Company Request or (if then held by the Company) shall
be discharged from such trust; and the Holder of such Note shall thereafter, as
an unsecured general creditor, look only to the Company for payment of such
principal of (and premium, if any) or interest on any Note, without interest
thereon, and all liability of the Trustee or such Paying Agent with respect to
such trust money, and all liability of the Company as trustee thereof, shall
thereupon cease; provided, however, that the Trustee or such Paying Agent,
before being required to make any such repayment, may at the expense of the
Company cause to be published once, in an Authorized Newspaper, notice that such
money remains unclaimed and that, after a date specified therein, which shall
not be less than 30 days from the date of such publication, any unclaimed
balance of such money then remaining shall be repaid to the Company.
Section 9.04. Existence. Subject to Article 7, the Company shall do or
cause to be done all things necessary to preserve and keep in full force and
effect the corporate existence of the Company and its Subsidiaries, and their
respective rights (charter and statutory) and franchises, except to the extent
that the Board of Directors shall determine that the failure to do so would not
have a material adverse effect on the business, assets, financial condition or
results of operation of the Company (a "Material Adverse Effect"); provided,
however, that the Company shall not be required to preserve any right or
franchise 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
that the loss thereof is not disadvantageous in any material respect to the
Holders.
Section 9.05. Payment of Taxes and Other Claims. The Company shall pay or
discharge, or cause to be paid or discharged, before the same shall become
delinquent, (1) all taxes, assessments and governmental charges levied or
imposed upon it or any Subsidiary or upon the income, profits or property of the
Company or any Subsidiary, and (2) all lawful claims for labor, materials and
supplies which, if unpaid, might by law become a lien upon the property of the
Company or any Subsidiary and have a Material Adverse Effect; provided, however,
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, the amount,
applicability or validity of which is being contested in good faith by
appropriate proceedings.
Section 9.06. Statement as to Compliance; Notice of Default. The Company
shall deliver to the Trustee, within 120 days after the end of each fiscal year
of the Company, a certificate from the Company's Chief Executive Officer, Chief
Financial Officer or principal accounting officer as to his or her knowledge of
the Company's compliance with all terms, conditions and provisions under this
Indenture and, in the event of any noncompliance, specifying such noncompliance
and the
-42-
nature and status thereof. As of the date hereof, the Company's fiscal year ends
on December 31. For purposes of this Section 9.06, such compliance shall be
determined without regard to any period of grace or requirement of notice under
this Indenture. The Company, within five Business Days of becoming aware of the
occurrence of any Default or Event of Default, shall deliver written notice to
the Trustee of the occurrence thereof.
Section 9.07. Prohibition on Private Transactions Involving Existing Notes.
For the eighteen month period commencing on the date hereof and expiring on
March [ ], 2005, so long as any Notes remain outstanding during such
eighteen-month period, the Company covenants that it shall not engage in any
private or open-market repurchases, debt-for-equity swaps, or similar
transactions with respect to the Existing Notes.
Section 9.08. Waiver of Certain Covenants. The Company may omit in any
particular instance to comply with any term, provision or condition set forth in
Section 9.04, 9.05, or 9.07 if, before the time for such compliance, the Holders
of at least a majority in principal amount of the Outstanding Notes, by Act of
such Holders, either waive such compliance in such instance or generally waive
compliance with such covenant or condition, but no such waiver shall extend to
or affect such covenant or condition except to the extent so expressly waived,
and, until such waiver shall become effective, the obligations of the Company
and the duties of the Trustee in respect of any such term, provision or
condition shall remain in full force and effect.
ARTICLE 10
REDEMPTION OF NOTES
Section 10.01. Optional Redemption by the Company. The Notes may be
redeemed at the election of the Company, as a whole or from time to time in
part, at any time after September [ ], 2005 and prior to maturity (an "Optional
Redemption"), upon notice as set forth in Section 10.04, at a redemption price
equal to 100% of the principal amount so redeemed, together with accrued and
unpaid interest on the principal amount so redeemed, if any, up to but excluding
the date fixed for redemption (the "Optional Redemption Price").
Section 10.02. Election to Redeem; Notice to Trustee. The election of the
Company to redeem any Notes shall be evidenced by a Board Resolution. In case of
any redemption at the election of the Company of all or any part of the Notes
pursuant to Section 10.01, the Company shall, at least 15 days prior to the
giving of the notice of redemption in Section 10.04 to the Holders (unless a
shorter notice shall be satisfactory to the Trustee), notify the Trustee of the
Redemption Date and of the principal amount of Notes to be redeemed. In the case
of any redemption of Notes prior to the expiration of any restriction on such
redemption provided in the terms of such Notes or elsewhere in this Indenture,
the Company shall furnish the Trustee with an Officers' Certificate evidencing
compliance with all such restrictions.
Section 10.03. Selection by Trustee of Notes to Be Redeemed. If less than
all the Notes are to be redeemed, the particular Notes to be redeemed shall be
selected not more than 60 days and not less than 30 days prior to the Redemption
Date by the Trustee, from the Outstanding Notes not previously called for
redemption, by lot, pro rata or any other method that complies with
-43-
the requirements of any exchange on which the Notes are listed or quoted and
that the Trustee shall deem fair and appropriate.
If any Note selected for partial redemption is converted in part before
termination of the voluntary conversion right with respect to the portion of the
Note so selected, the converted portion of such Note shall be deemed, solely for
purposes of determining the aggregate principal amount of the Notes to be
redeemed, to be the portion selected for redemption (provided, however, that the
Holder of such Note so converted and deemed redeemed shall not be entitled to
any interest payment as a result of such deemed redemption except for such
interest payment as such Holder would have otherwise been entitled to receive
upon voluntary conversion of such Note). Notes that have been voluntarily
converted during a selection of Notes to be redeemed may be treated by the
Trustee as Outstanding for the purpose of such selection.
Notes in denominations of $1,000 may only be redeemed in whole. The Trustee
may select for redemption portions (equal to $1,000 or any integral multiple
thereof) of the principal of Notes that have denominations larger than $1,000.
The Trustee shall promptly notify the Company and the Note Registrar (if
other than itself) in writing of the Notes selected for redemption and, in the
case of any Notes selected for partial redemption, the principal amount thereof
to be redeemed.
For all purposes of this Indenture, unless the context otherwise requires,
all provisions relating to the redemption of Notes shall relate, in the case of
any Note redeemed or to be redeemed only in part, to the portion of the
principal amount of such Note which has been or is to be redeemed.
Section 10.04. Notice of Redemption. Notice of redemption shall be given in
the manner provided in Section 1.06, at least 30 days, but not more than 60
days, prior to the Redemption Date; provided, that failure to give such notice
in the manner herein provided to the Holder of any Note designated for
redemption as a whole or in part, or any defect in the notice to any such
Holder, shall not affect the validity of the proceedings for the redemption of
any other such Note or portion thereof.
All notices of redemption shall state:
(a) the Redemption Date;
(b) the Redemption Price;
(c) if less than all Outstanding Notes are to be redeemed, the
identification (and, in the case of partial redemption, the principal amount) of
the particular Notes to be redeemed;
(d) if any Note is to be redeemed in part only, the portion of the
principal amount of such Note to be redeemed, and the notice that relates to
such Note shall state that on and after the Redemption Date, upon surrender of
such Note, the Holder shall receive, without a charge, a new Note or Notes of
authorized denominations for the principal amount thereof remaining unredeemed;
-44-
(e) that on the Redemption Date, the Redemption Price shall become due and
payable upon each such Note, or the portion thereof, to be redeemed;
(f) that the interest on the Note or the portion of the principal amount of
the Note to be redeemed accrued to, but excluding, the Redemption Date will be
paid as specified in such notice and that on and after the Redemption Date,
interest thereon or on the portion thereof to be redeemed will cease to accrue;
(g) the Place or Places of Payment where such Notes are to be surrendered
for payment of the Redemption Price;
(h) that Notes called for redemption must be presented and surrendered to
the Paying Agent to collect the redemption price;
(i) the then current Conversion Consideration;
(j) that the Notes called for redemption may be converted for the
Conversion Consideration at any time before the close of business on the last
Business Day prior to the Redemption Date;
(k) the CUSIP number of such Note, if any; and
(l) that a Holder of Notes who desires to voluntarily convert Notes must
satisfy the requirements for voluntary conversion contained in such Notes.
Notice of redemption of Notes to be redeemed shall be given by the Company
or, at the Company's request, by the Trustee in the name and at the expense of
the Company.
Section 10.05. Deposit of Redemption Price. Not later than 11:00 a.m. New
York City time on the Redemption Date, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its own Paying
Agent, segregate and hold in trust as provided in Section 9.03) an amount of
money sufficient to pay, on the Redemption Date, the Redemption Price of all the
Notes or portions thereof that are to be redeemed on that date, other than Notes
or portions thereof called for redemption on that date that have been delivered
by the Company to the Trustee for cancellation or have been converted. Upon
written request, the Trustee or the Paying Agent, as the case may be, shall
return to the Company no later than five Business Days after such request any
money not required to pay such Redemption Price.
Section 10.06. Notes Payable on Redemption Date. Notice of redemption
having been given as aforesaid, the Notes so to be redeemed shall, on the
Redemption Date, become due and payable at the Redemption Price therein
specified, and from and after such date (unless the Company shall default in the
payment of the Redemption Price) such Notes shall cease to bear interest. Upon
surrender of any such Note for redemption in accordance with said notice, such
Note shall be paid by the Company at the Redemption Price.
-45-
If any Note called for redemption shall not be so paid upon surrender
thereof for redemption, the Redemption Price, shall, until paid, bear interest
from the Redemption Date at the rate borne by the Note and such Note shall
remain convertible into Common Stock until the Redemption Price, and any such
accrued interest, shall have been paid or duly provided for.
Section 10.07. Notes Redeemed in Part. Any Note that is to be redeemed only
in part (pursuant to the provisions of this Article) shall be surrendered at a
Place of Payment therefor (with, if the Company or the Trustee so requires, due
endorsement by, or a written instrument of transfer in form satisfactory to the
Company and the Trustee duly executed by, the Holder thereof or his attorney
duly authorized in writing) and the Company shall execute and the Trustee shall
authenticate and deliver to the Holder of such Note without service charge a new
Note or Notes, of any authorized denomination as requested by such Holder in
aggregate principal amount equal to and in exchange for the unredeemed portion
of the principal of the Note so surrendered.
ARTICLE 11
REPURCHASE AT OPTION OF HOLDERS UPON CHANGE IN CONTROL
Section 11.01. Right to Require Repurchase. If, at any time prior to
September 30, 2007 there shall occur a Repurchase Event, then each Holder shall
have the right, at such Holder's option, to require the Company to repurchase
all of such Holder's Notes, or any portion thereof (in principal amounts of
$1,000 or integral multiples thereof), on the date (the "Repurchase Date") that
is forty-five (45) Business Days after the date of the occurrence of a
Repurchase Event at a price equal to 100% of the principal amount of Notes such
Holder elects to require the Company to repurchase, together with accrued and
unpaid interest on such principal amount, if any, up to but excluding the
repurchase date (the "Repurchase Price").
Section 11.02. Notices; Method of Exercising Repurchase Right, Etc. (a)
Unless the Company shall have theretofore called for redemption all of the
Outstanding Notes, on or before the date that is 30 Business Days after the
occurrence of a Repurchase Event, the Company shall give notice to all Holders
of Outstanding Notes and to the Trustee (the "Company Notice") of the occurrence
of the Repurchase Event and of the repurchase right set forth herein arising as
a result thereof.
Each Company Notice shall state:
(i) the date of such Change in Control and, briefly, the events
causing such Change in Control;
(ii) the date by which the Change in Control Purchase Notice (as
defined below) must be delivered;
(iii) the Repurchase Date;
(iv) the Repurchase Price;
-46-
(v) a description of the procedure that a Holder must follow to
exercise a repurchase right;
(vi) the procedures for withdrawing a Change in Control Purchase
Notice;
(vii) the place or places where such Notes are to be surrendered for
payment of the Repurchase Price or for conversion; (viii) briefly, the
conversion rights of Holders of Notes;
(ix) the Conversion Consideration and any adjustments thereto; and
(x) that Holders who want to convert Notes must satisfy the
requirements set forth in the Notes.
Promptly after giving the Company Notice to the Holders of Outstanding
Notes and to the Trustee, the Company shall cause a copy of the Company Notice
to be published in The Wall Street Journal or another daily newspaper of
national circulation and will also post such notice on the Company's website.
(b) [Intentionally Omitted]
(c) To exercise a repurchase right, a Holder must deliver to the Trustee or
at the office or agency maintained by the Company for such purpose in the
Borough of Manhattan, The City of New York pursuant to Section 9.02, prior to
the close of business on or before the Repurchase Date, (i) written notice of
the Holder's exercise of such right (the "Change in Control Purchase Notice"),
which notice shall set forth (A) the name of the Holder, (B) the certificate
numbers of the Notes with respect to which the repurchase right is being
exercised, (C) the principal amount of the Notes to be repurchased (and, if any
Note is to be repurchased in part, the portion of the principal amount thereof
to be repurchased, which shall be in integral multiples of $1,000) and (D) a
statement that an election to exercise the repurchase right is being made
thereby pursuant to the applicable provisions of the Notes and (ii) surrender
the Notes subject to the Change in Control Purchase Notice.
(d) On or prior to the Repurchase Date the Company shall deposit with the
Trustee or with the Paying Agent (or, if the Company is acting as its own Paying
Agent, segregate and hold in trust as provided in Section 9.03) an amount of
money sufficient to pay the Repurchase Price of the Notes that are to be repaid
on the Repurchase Date. On the Repurchase Date, the Trustee, a Paying Agent (or,
if the Company is acting as its own Paying Agent, the Company) shall repurchase
all such Notes validly tendered prior to such date.
(e) In the event that a Holder has previously delivered a Change in Control
Purchase Notice, but failed to surrender the Note with respect to which such
Change in Control Purchase Notice relates, then so long as the Trustee or the
Paying Agent holds (or, if the Company is acting as its own Paying Agent, the
Company segregates and holds in trust as provided in Section 9.03)
-47-
money sufficient to pay the Repurchase Price in respect of such Note, then such
Note shall cease to be Outstanding for the purposes of this Indenture on the
Repurchase Date and all rights of the Holder thereof other than the right to
receive the Repurchase Price shall terminate.
(f) All Notes delivered for repurchase shall be delivered to the Trustee to
be canceled in accordance with the provisions of Section 3.08.
(g) If any Note (or portion thereof) surrendered for repurchase shall not
have been repurchased on the Business Day following the Repurchase Date, the
Repurchase Price in respect of such Note shall, until paid, bear interest from
the Business Day following the Repurchase Date at the rate borne by the Note and
such Note shall remain convertible into Common Stock until the Repurchase Price
and any such accrued interest shall have been paid or duly provided for.
(h) Any Note that is to be repurchased only in part shall be surrendered to
the Trustee or any such Paying Agent (or if the Company is acting as its own
Paying Agent, the Company) and the Company shall execute, and the Trustee shall
authenticate and deliver to the Holder of such Note without service charge, a
new Note or Notes, containing identical terms and conditions, each in an
authorized denomination in aggregate principal amount equal to and in exchange
for the portion of the principal of the Note so surrendered that was not
repurchased.
(i) Any Holder that has delivered a Change in Control Purchase Notice shall
have the right to withdraw such notice by delivery of a written notice of
withdrawal to the Trustee or any such Paying Agent prior to the close of
business on the Repurchase Date. The notice of withdrawal shall state the
principal amount and the certificate numbers of the Notes as to which the
withdrawal notice relates and the principal amount, if any, that remains subject
to the Change in Control Purchase Notice. A Note in respect of which a Holder
has exercised its right to require repurchase upon a Change in Control may
thereafter be converted into Common Stock only if, and at such time as, such
Holder withdraws its Change in Control Purchase Notice in accordance with the
preceding sentence.
(j) Notwithstanding anything to the contrary in this Section 11.02, the
Company shall not be required to give the Company Notice following the
occurrence of a Change in Control if, in the manner, at the time and otherwise
in compliance with the requirements set forth herein regarding the Company's
obligation to offer to repurchase the Outstanding Notes following the occurrence
of a Change in Control, (A) another Person makes an offer to repurchase the
Outstanding Notes by giving a notice containing the information set forth in
clauses (i) through (x) of Section 11.02 (a) to the Holders of all Outstanding
Notes and to the Trustee, (B) such Person repurchases all Outstanding Notes
validly tendered and not withdrawn, and (C) such Person makes all payments with
respect thereto. This Section 11.02(j) shall not relieve the Company of any of
its obligations under this Indenture or any Note; provided, however, that if
another Person makes the offer to repurchase Outstanding Notes as set forth in
this Section, the Company shall not be obligated to give the Company Notice.
(k) Absent, and except to the extent of, the Trustee's receipt of a Company
Notice of a Change in Control, the Trustee shall not be under any duty to
determine or monitor whether a Change in Control has occurred, from time to
time.
-48-
Section 11.03. Certain Definitions. For purposes of this Article 11:
(a) the terms "beneficial owner" and "beneficial ownership" shall be
determined in accordance with Rules 13d-3 and 13d-5 promulgated by the
Commission pursuant to the Exchange Act, except that a Person shall be deemed to
have "beneficial ownership" of all securities that such Person has the right to
acquire, whether such right is exercisable immediately or only after the passage
of time;
(b) the term "Person" shall include any syndicate or group that would be
deemed to be a "person" under Section 13(d)(3) or Section 14(d)(2) of the
Exchange Act; and
(c) the term "Repurchase Event" means a Change in Control.
Section 11.04. Change in Control. A "Change in Control" shall be deemed to
have occurred at such time after the original issuance of the Notes as:
(a) any Person acquires the beneficial ownership, directly or indirectly,
through a purchase, merger or other acquisition transaction (other than a
transaction described in (b) below), of more than 50% of the total voting power
of the total outstanding voting stock of the Company other than an acquisition
by the Company, any of its Subsidiaries or any of its employee benefit plans;
(b) the Company shall consolidate with, or merge with or into, another
Person or convey, transfer, lease or otherwise dispose of all or substantially
all of its assets to any Person, or any Person consolidates with or merges with
or into the Company, in any such event pursuant to a transaction in which the
Company's outstanding voting stock is converted into or exchanged for cash,
securities or other property, other than any such transactions where:
(i) the Company's voting stock is not converted or exchanged at all
(except to the extent necessary to reflect a change in the Company's
jurisdiction of incorporation) or is converted into or exchanged for voting
stock (other than Redeemable Capital Stock) of the surviving or transferee
corporation, and
(ii) immediately after such transaction, no Person, other than one or
more Persons who were the beneficial owner, directly or indirectly, of more
than 50% of the total voting power of all of the Company's voting stock
immediately before such transaction, is the beneficial owner, directly or
indirectly, of more than 50% of the total outstanding voting stock of the
surviving or transferee corporation;
(c) during any consecutive two-year period, individuals who at the
beginning of such period constituted the Board of Directors (but not a committee
thereof), together with any new directors whose election to such Board of
Directors (but not a committee thereof), or whose nomination for election by the
Company's stockholders, was approved by a vote of a majority of the directors
then still in office who were either directors at the beginning of such period
or whose election or nomination for election was previously so approved, cease
for any reason to constitute a majority of the Board of Directors (but not a
committee thereof) then in office; or
-49-
(d) a special resolution is passed by the Company's stockholders approving
a plan of liquidation or dissolution of the Company (other than in a transaction
that complies with the provisions described in Article 7), and no additional
approvals of the Company's stockholders are required under applicable law to
cause such a liquidation or dissolution.
"Redeemable Capital Stock" means any class or series of capital stock that,
either by its terms, by the terms of any security into which it is convertible
or exchangeable or by contract or otherwise, is, or upon the happening of an
event or passage of time would be, required to be redeemed prior to the Stated
Maturity of the Notes or is redeemable at the option of the holder thereof at
any time prior to such Stated Maturity, or is convertible into or exchangeable
for debt securities at any time prior to such Stated Maturity; provided,
however, that Redeemable Capital Stock shall not include any Common Stock which
the holder may cause the Company to repurchase or redeem upon termination of
such holder's employment.
ARTICLE 12
CONVERSION
Section 12.01. Voluntary Conversion Privilege and Conversion Consideration.
(a) Subject to and upon compliance with the provisions of this Article 12,
at the option of the Holder thereof, any Note or any portion of the principal
amount thereof that is $1,000 or an integral multiple of $1,000 may be
voluntarily converted, except as otherwise provided herein, at any time after
original issuance thereof and prior to the close of business on September 30,
2007 into (i) that number of fully-paid and non-assessable shares of the
Company's Common Stock as is equal to [__] (the "Base Shares"), plus (ii)
$[____] (the "Plus Cash Amount") for each $1,000 principal amount of Notes so
converted.
Upon the election of any Holder to voluntarily convert any Notes, the
Company, at its sole option, may pay the Plus Cash Amount in cash or shares of
Common Stock (the "Plus Cash Shares"); provided, however, that the Company shall
not make any payment of the Plus Cash Amount in Plus Cash Shares unless the
daily volume-weighted average price of the Common Stock for the ten (10) Trading
Days ending on and including the second Trading Day immediately preceding the
Conversion Date (as defined below) equals or exceeds the Threshold Price. The
Common Stock deliverable upon voluntary conversion (whether in respect of Base
Shares or Plus Cash Shares, as applicable) and any cash delivered in respect of
the Plus Cash Amount are hereinafter referred to in the aggregate as the
"Conversion Consideration." If the Company elects to pay the Plus Cash Amount in
Plus Cash Shares, the Plus Cash Shares will be valued at 95% of the simple
average of the daily volume-weighted average price of the Common Stock for the
ten (10) Trading Days ending on and including the second Trading Day immediately
preceding the Conversion Date, provided that if the Company has delivered an
Auto-Conversion Notice (as defined below) the Plus Cash Shares will be valued in
the manner set forth in Section 12.01(d) below. The number of Base Shares and
any calculation or determination in respect of the simple average of the daily
volume-weighted average price of the Common Stock shall be adjusted as provided
for in Section 12.04.
-50-
(b) In case a Note or portion thereof has previously been called for
redemption at the election of the Company, such voluntary conversion right in
respect of the Note or portion so called shall expire at the close of business,
New York City time, on the last Business Day prior to the Redemption Date,
unless the Company defaults in making the payment due upon redemption. In case a
Note or portion thereof is the subject of an Auto-Conversion Notice issued as
provided in Section 12.12 below, such voluntary conversion right in respect of
such Note or such portion shall expire at the close of business, New York City
time, on the last Business Day prior to the Auto-Conversion Date, unless the
Company defaults in making the payment due upon Auto-Conversion.
(c) A Note in respect of which a Holder has delivered a Change in Control
Purchase Notice (as defined in Article 11 hereof) exercising the option of such
Holder to require the Company to purchase such Note may be voluntarily converted
only if such notice and the Note is withdrawn by a written notice of withdrawal
delivered by the Holder to the Trustee or any Paying Agent prior to the close of
business on the Repurchase Date, in accordance with the terms of this Indenture.
(d) From and after the delivery by the Company of any Auto-Conversion
Notice with respect to any Notes or any portion of the Notes, Holders shall be
entitled to voluntarily convert such Notes or such portion until the close of
business, New York City time, on the last Business Day prior to the
Auto-Conversion Date, provided that, if in connection with any such voluntary
conversion the Company elects to pay the Plus Cash Amount in Plus Cash Shares,
the Plus Cash Shares delivered will be valued with respect to any Note or any
portion of the principal amount thereof:
(1) if the Holder elects to voluntarily convert before the
Auto-Conversion Date and the Company has issued a Stock
Auto-Conversion Notice, at the Stock Substitution Price (as defined in
Section 12.12(g) below), provided, however, in the case of this
Section 12.01(d)(1), the Company may not pay the Plus Cash Amount in
Plus Cash Shares unless the daily volume-weighted average price for
the ten (10) Trading Days ending on and including the second Trading
Day immediately preceding the Conversion Date equals or exceeds the
Threshold Price;
(2) if the Holder elects to voluntarily convert before the
Auto-Conversion Date and the Company has issued a Cash Auto-Conversion
Notice, at 95% of the simple average of the daily volume-weighted
average price of the Common Stock for the ten (10) Trading Days ending
on and including the second Trading Day immediately preceding the
Conversion Date, provided, however, in the case of this Section
12.01(d)(2), the Company may not pay the Plus Cash Amount in Plus Cash
Shares unless the daily volume-weighted average price for the ten (10)
Trading Days ending on and including the second Trading Day immediately
preceding the Conversion Date equals or exceeds the Threshold Price; or
(3) if the Holder elects to voluntarily convert after the
Auto-Conversion Date, unless and until a subsequent Auto-Conversion
Notice, if any, has been delivered pursuant to Section 12.12 hereof, at
95% of the simple average of the daily volume-weighted average price of
the Common Stock for the ten (10) Trading Days ending on and including
the second
-51-
Trading Day immediately preceding the Conversion Date, provided,
however, in the case of this Section 12.01(d)(3), the Company may not
pay the Plus Cash Amount in Plus Cash Shares unless the daily
volume-weighted average price for the ten (10) Trading Days ending on
and including the second Trading Day immediately preceding the
Conversion Date equals or exceeds the Threshold Price.
Section 12.02. Exercise of Conversion Privilege. In order to exercise the
voluntary conversion privilege with respect to any Note in definitive form, the
Holder of any Note to be converted shall surrender such Note, duly endorsed or
assigned to the Company or in blank, at any office or agency maintained by the
Company pursuant to Section 9.02, accompanied by (a) written notice to the
Company in substantially the form of the conversion notice attached to the form
of Note attached as Exhibit A hereto at such office or agency that the Holder
elects to voluntarily convert such Note or, if less than the entire principal
amount thereof is to be converted, the portion thereof to be converted, (b) the
funds, if any, required by this Section 12.02, and (c) if shares or any portion
of such Note not to be converted are to be issued in the name of a Person other
than the Holder thereof, the name of the Person in which to issue such shares
and the transfer taxes, if any, required to be paid by the Holder pursuant to
Section 12.08.
In order to exercise the voluntary conversion privilege with respect to any
interest in a global Note, the beneficial owner must also complete, or cause to
be completed, the appropriate instruction form for conversion pursuant to the
depositary's book-entry conversion program, deliver, or cause to be delivered,
by book-entry delivery, an interest in such global Note, furnish appropriate
endorsements and transfer documents if required by the Company or the Trustee or
other agent, and pay the funds, if any, required by this Section 12.02 and any
transfer taxes if required pursuant to Section 12.08.
As promptly as practicable after satisfaction of the requirements for
voluntary conversion set forth above (the date on which such requirements are
satisfied being referred to herein as the "Conversion Date"), but in no event
later than three Trading Days after the Conversion Date, 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 Holder (as if such transfer were a
transfer of the Note or Notes (or portion thereof) so converted), the Company
shall issue and deliver to such Holder a certificate or certificates for the
number of full shares of Common Stock issuable upon the voluntary conversion of
such Note or portion thereof in accordance with the provisions of this Article
12 (including any Plus Cash Shares, if applicable) and a check or cash in
respect of the Plus Cash Amount, if applicable, and any payment in respect of a
share of Common Stock arising upon such voluntary conversion, as applicable, as
provided in Section 12.03. In case any Note of a denomination greater than
$1,000 shall be surrendered for partial voluntary conversion, and subject to
Article 2, the Company shall execute, and the Trustee shall authenticate and
deliver to the Holder of the Note so surrendered, without charge, a new Note or
Notes in authorized denominations in an aggregate principal amount equal to the
unconverted portion of the surrendered Note.
Each voluntary 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 12.02 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 voluntary conversion shall be
-52-
deemed to have become on said date the holder of record of the shares
represented thereby; provided however 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
thereof for all purposes on the next succeeding day on which such stock transfer
books are open, but such voluntary conversion shall be for the Conversion
Consideration in effect on the date upon which such Note shall be surrendered.
Any Note or portion thereof surrendered for voluntary conversion during the
period from the close of business on the record date for any interest payment
date to the close of business on the Business Day immediately preceding the
following interest payment date that has not been called for redemption during
such period, shall be accompanied by cash payment, in immediately available
funds or other 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 however that no such payment need be made to the
extent any overdue interest shall exist at the time of voluntary conversion with
respect to any such Note or portion thereof. For the avoidance of doubt, the
Company's right to make payment of any interest otherwise payable in shares of
its Common Stock pursuant to Section 3.06 shall not be affected by the Holder's
obligation to deliver cash payment as described in the previous sentence.
On voluntary conversion of a Note, that portion of accrued and unpaid
interest, if any, remaining unpaid on such conversion shall not be cancelled,
extinguished or forfeited, but rather shall be deemed to be paid in full to the
Holder thereof through delivery of the Base Shares and Plus Cash Amount
(together with the cash or stock payment, if any, in lieu of fractional shares)
in exchange for the Note being converted pursuant to the provisions hereof.
Except as provided above in this Section 12.02, no payment or other adjustment
shall be made for interest accrued on any Note converted or for dividends on any
shares issued upon the voluntary conversion of such Note as provided in this
Article.
Upon the voluntary conversion of an interest in a global Note, the Trustee
(or other conversion agent appointed by the Company), shall make a notation on
such global Note as to the reduction in the principal amount represented
thereby. The Company shall notify the Trustee in writing of any voluntary
conversions of Notes effected through any Conversion Agent other than the
Trustee.
Section 12.03. Fractional Shares. No fractional shares of Common Stock
shall be issued upon voluntary conversion of Notes (whether in connection with
the settlement of Base Shares or Plus Cash Shares, as the case may be). If more
than one Note shall be surrendered for voluntary conversion at one time by the
same Holder, the number of full shares that shall be issuable upon voluntary
conversion thereof shall be computed on the basis of the aggregate principal
amount of the Notes (or specified portions thereof) so surrendered. Subject to
Section 12.12(k), instead of any fractional share of Common Stock that would
otherwise be issuable upon voluntary conversion of any Note (or specified
portions thereof), the Company shall either, at its sole option, (i) pay a cash
adjustment in respect of such fraction in an amount equal to the same fraction
of the Closing Price per share of the Common Stock at the close of business on
the Trading Day immediately preceding
-53-
such day, or (ii) issue an additional whole share in lieu of any fractional
share that would otherwise be issuable upon voluntary conversion of such Note.
"Trading Day" shall mean each day on which the primary securities exchange
or quotation system or over-the-counter market that is used to determine the
volume-weighted average price is open for trading or quotation.
"Closing Price" of a single share of Common Stock on any Trading Day shall
mean the closing sale price per share for the Common Stock (or if no closing
sale price is reported, the average of the bid and ask prices) on such Trading
Day on the principal United States national securities exchange on which the
Common Stock is traded or, if the Common Stock is not listed on a United States
national securities exchange, as reported by the Nasdaq, or, if the Common Stock
is not listed on the Nasdaq, the principal United States regional securities
exchange on which the Common Stock is traded or, if the Common Stock is not
listed on a United States regional stock exchange, as reported by the principal
over-the-counter market on which the Common Stock is traded, including the Over
the Counter Bulletin Board (the "OTCBB") or the National Quotation Service
Bureau (commonly known as the "Pink Sheets") or successor markets.
"daily volume-weighted average price" of a single share of Common Stock on
any Trading Day shall mean the daily volume-weighted average price per share for
the Common Stock on such Trading Day on the principal United States national
securities exchange on which the Common Stock is traded or, if the Common Stock
is not listed on a United States national securities exchange, as reported by
the Nasdaq, or, if the Common Stock is not listed on the Nasdaq, the principal
United States regional securities exchange on which the Common Stock is traded
or, if the Common Stock is not listed on a United States regional stock
exchange, as reported by the principal over-the-counter market on which the
Common Stock is traded, including the OTCBB or the National Quotation Service
Bureau or successor markets, in any event, as reported by the Bloomberg L.P. or
such other nationally recognized information source satisfactory to the Trustee.
Section 12.04. Adjustment of Conversion Consideration.
(a) If the Company shall, after the date hereof, pay or make a dividend or
other distribution on its Common Stock exclusively in Common Stock, then, in any
such event:
(i) the number of Base Shares each Holder, upon voluntary conversion
or Auto-Conversion, shall be entitled to receive shall be increased to
equal the number of shares of Common Stock it would have been entitled to
receive with respect to such Base Shares (prior to any such adjustment)
with respect to such dividend or other distribution if such Note had been
converted immediately prior to the earlier of the date of such dividend or
distribution or the record date with respect thereto, such adjustment to
become effective upon the opening of business on the earlier of the date
next following the date of such dividend or distribution, the date next
following the record date with respect thereto or the "ex" date (as
hereinafter defined) with respect thereto;
-54-
(ii) each of the Auto-Conversion Price and the Threshold Price shall
be reduced by multiplying such price by a fraction, the numerator of which
shall be the number of shares of Common Stock outstanding on the earlier of
the date of such dividend or distribution or the record date with respect
thereto, and the denominator of which shall be the sum of such number of
shares and the total number of shares constituting such dividend or other
distribution, such reduction to become effective upon the opening of
business on the earlier of the date next following the date of such
dividend or distribution, the date next following the record date with
respect thereto or the "ex" date with respect thereto; and
(iii) when making any calculation of the simple average of the daily
volume-weighted average price, or the simple average of the Closing Price,
of the Common Stock, the daily volume-weighted average price or the Closing
Price, as applicable, of the Common Stock on each day prior to the earlier
of the date of such dividend or distribution, the record date with respect
thereto or the "ex" date with respect thereto shall be reduced by
multiplying such price by a fraction, the numerator of which shall be the
number of shares of Common Stock outstanding on the earlier of the date of
such dividend or distribution or the record date with respect thereto, and
the denominator of which shall be the sum of such number of shares and the
total number of shares constituting such dividend or other distribution.
(b) In case the outstanding shares of Common Stock shall be subdivided or
split into a greater number of shares of Common Stock or combined into a smaller
number of shares of Common Stock, then, in any such event:
(i) the number of Base Shares payable on a voluntary conversion or
Auto-Conversion in effect at the opening of business on the day next
following the day upon which such subdivision, split or combination becomes
effective shall be proportionately adjusted (i.e., the number of Base
Shares payable on a voluntary conversion or Auto-Conversion shall be
proportionately increased in connection with any subdivision or split and
proportionately decreased in connection with any combination), any such
adjustment to become effective upon the opening of business on the earlier
of the day next following the day upon which such subdivision, split or
combination becomes effective or the "ex" date with respect to such
subdivision, split or combination;
(ii) the Auto-Conversion Price and the Threshold Price in effect at
the opening of business on the earlier of the day next following the day
upon which such subdivision, split or combination becomes effective or the
"ex" date with respect to such subdivision, split or combination shall be
proportionately adjusted (i.e., the Auto-Conversion Price and the Threshold
Price shall be proportionately decreased in connection with any subdivision
or split and proportionately increased in connection with any combination),
any such adjustment to become effective upon the opening of business on the
earlier of the day next following the day upon which such subdivision,
split or combination
-55-
becomes effective or the "ex" date with respect to such subdivision, split
or combination; and
(iii) when making any calculation of the simple average of the daily
volume-weighted average price, or the simple average of the Closing Price,
of the Common Stock, the daily volume-weighted average price or the Closing
Price, as applicable, of the Common Stock on each day prior to the earlier
of the day upon which such subdivision, split or combination becomes
effective or the "ex" date with respect to such subdivision, split or
combination shall be proportionately adjusted (i.e., proportionately
decreased in connection with any subdivision or split and proportionately
increased in connection with any combination).
(c) In case the Company shall pay or make a dividend or other distribution
on its Common Stock consisting exclusively of, or shall otherwise issue to all
holders of its Common Stock, rights, warrants or options entitling the holders
thereof, for a period not exceeding 45 days, to subscribe for or purchase shares
of Common Stock at a price per share less than the current market price per
share (determined as provided in Section 12.04(g)) of the Common Stock on the
date fixed for the determination of stockholders entitled to receive such
rights, warrants or options, then, in any such event:
(i) the number of Base Shares payable on a voluntary conversion or
Auto-Conversion in effect at the opening of business on the day next
following the date fixed for such determination shall be increased by
multiplying such number by a fraction, the numerator of which shall be the
number of shares of Common Stock outstanding at the close of business on
the date fixed for such determination plus the number of shares of Common
Stock so offered for subscription or purchase, and the denominator of which
shall be the number of shares of Common Stock outstanding at the close of
business on the date fixed for such determination plus the number of shares
of Common Stock which the aggregate price of the total number of shares so
offered would purchase at the current market price per share (determined as
provided in Section 12.04(g)), such increase to become effective
immediately after the opening of business on the earlier of the day next
following the date fixed for such determination or the "ex" date with
respect to such dividend or distribution;
(ii) the Auto-Conversion Price and the Threshold Price shall be
decreased by multiplying such number or price by a fraction, the numerator
of which shall be the number of shares of Common Stock outstanding at the
close of business on the date fixed for such determination plus the number
of shares of Common Stock which the aggregate price of the total number of
shares so offered would purchase at the current market price per share
(determined as provided in Section 12.04(g)), and the denominator of which
shall be the number of shares of Common Stock outstanding at the close of
business on the date fixed for such determination plus the number of shares
of Common Stock so offered for subscription or purchase, such decrease to
become effective immediately after
-56-
the opening of business on the earlier of the day next following the date
fixed for such determination or the "ex" date with respect to such dividend
or distribution; and
(iii) when making any calculation of the simple average of the daily
volume-weighted average price, or the simple average of the Closing Price,
of the Common Stock, the daily volume-weighted average price or the Closing
Price, as applicable. of the Common Stock on each day prior to the earlier
of the date fixed for such determination or the "ex" date with respect to
such dividend or distribution shall be decreased by multiplying such price
by a fraction, the numerator of which shall the number of shares of Common
Stock outstanding at the close of business on the date fixed for such
determination plus the number of shares of Common Stock which the aggregate
price of the total number of shares so offered would purchase at the
current market price per share (determined as provided in Section
12.04(g)), and the denominator of which shall be the number of shares of
Common Stock outstanding at the close of business on the date fixed for
such determination plus the number of shares of Common Stock so offered for
subscription or purchase.
(d) In case the Company shall, by dividend or otherwise, distribute to all
holders of its Common Stock evidences of its indebtedness, shares of any class
of capital stock, securities, cash or assets (excluding any rights, warrants or
options referred to in Section 12.04(c), any dividend or distribution paid
exclusively in cash and any dividend or distribution referred to in Section
12.04(a)), then, in any such event:
(i) the number of Base Shares payable on a voluntary conversion or
Auto-Conversion shall be increased by multiplying such number in effect
immediately prior to the earlier of such distribution or the determination
of stockholders entitled to receive such distribution by a fraction, the
numerator of which shall be the current market price per share (determined
as provided in Section 12.04(g)) and the denominator of which shall be such
current market price less the fair market value (as determined in good
faith by the Board of Directors, whose determination shall be conclusive
and described in a Board Resolution), on the date of such effectiveness, of
the portion of the evidences of indebtedness, shares of capital stock,
securities, cash and assets so distributed applicable to one share of
Common Stock, such adjustment to become effective immediately prior to the
opening of business on the day next following the earlier of (A) the later
of (1) the date fixed for the payment of such distribution and (2) the date
20 days after the notice relating to such distribution is given pursuant to
Section 12.06 (such later date of (1) and (2) being referred to as the
"Reference Date") or (B) the "ex" date with respect to such distribution;
(ii) the Auto-Conversion Price and the Threshold Price shall be
decreased by multiplying such price in effect immediately prior to the
earlier of such distribution or the determination of stockholders entitled
to receive such distribution by a fraction, the numerator of which shall be
the current market price per share (determined as provided in Section
12.04(g)) less the fair market value (as determined in good faith by the
Board of
-57-
Directors, whose determination shall be conclusive and described in a Board
Resolution), on the date of such effectiveness, of the portion of the
evidences of indebtedness, shares of capital stock, securities, cash and
assets so distributed applicable to one share of Common Stock, and the
denominator of which shall be such current market price, such adjustment to
become effective immediately prior to the opening of business on the
earlier of the day next following the Reference Date or the "ex" date with
respect to such distribution; and
(iii) when making any calculation of the simple average of the daily
volume-weighted average price, or the simple average of the Closing Price,
of the Common Stock, the daily volume-weighted average price or the Closing
Price, as applicable, of the Common Stock on each day preceding the earlier
of the Reference Date or the "ex" date with respect to such distribution
shall be adjusted by multiplying such price by a fraction, the numerator of
which shall be the current market price per share (determined as provided
in Section 12.04(g)) less the fair market value (as determined in good
faith by the Board of Directors, whose determination shall be conclusive
and described in a Board Resolution), on the date of such effectiveness, of
the portion of the evidences of indebtedness, shares of capital stock,
securities, cash and assets so distributed applicable to one share of
Common Stock, and the denominator of which shall be such current market
price.
The provisions of this Section 12.04(d) shall not be applicable to an event
covered by Section 12.04(k). For purposes of this Section 12.04(d) and Sections
12.04(a) and 12.04(c), any dividend or distribution for which an adjustment is
being made pursuant to this Section 12.04(d) that also includes shares of Common
Stock or rights, warrants or options to subscribe for or purchase shares of
Common Stock shall be deemed instead to be (A) a dividend or distribution of the
evidences of indebtedness, cash, property, shares of capital stock or securities
other than such shares of Common Stock or such rights, warrants or options
(making any adjustment to the number of Base Shares payable on a voluntary
conversion or Auto-Conversion, the Auto-Conversion Price, the Threshold Price
and any calculation of a simple average of daily volume-weighted average prices,
or the simple average of the Closing Price, of a share of Common Stock required
by this Section 12.04(d)) immediately followed by (B) a dividend or distribution
of such shares of Common Stock or such rights (making any further adjustment to
the number of Base Shares payable on a voluntary conversion or Auto-Conversion,
the Auto-Conversion Price, the Threshold Price and any calculation of a simple
average of daily volume-weighted average prices, or the simple average of the
Closing Price, of a share of Common Stock required by Sections 12.04(a) or
12.04(c)), except (1) the record date of such dividend or distribution as
defined in this Section 12.04(d) shall be substituted as "the date fixed for the
determination of stockholders entitled to receive such dividend or other
distributions," "the date fixed for the determination of stockholders entitled
to receive such rights, warrants or options" and "the date fixed for such
determination" within the meaning of Sections 12.04(a) and 12.04(c) and (2) any
shares of Common Stock included in such dividend or distribution shall not be
deemed "outstanding at the close of business on the date fixed for such
determination" within the meaning of this 12.04(d).
-58-
(e) In case the Company shall, by dividend or otherwise, make a
distribution to all holders of its Common Stock exclusively in cash in an
aggregate amount that, together with (i) the aggregate amount of any other
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 to the number of Base Shares payable on a voluntary
conversion or Auto-Conversion, the Auto-Conversion Price, the Threshold Price
and any calculation of a simple average of daily volume-weighted average prices,
or the simple average of the Closing Price, of a share of Common Stock pursuant
to this Section 12.04(e) has been made and (ii) the aggregate of any cash plus
the fair market value (as determined in good faith by the Board of Directors,
whose determination shall be conclusive and described in a Board Resolution), as
of the expiration of the tender or exchange offer referred to below, of
consideration payable in respect of any tender or exchange offer by the Company
or a Subsidiary 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 to the number of Base Shares payable on a voluntary
conversion or Auto-Conversion, the Auto-Conversion Price, the Threshold Price
and any calculation of a simple average of daily volume-weighted average prices,
or the simple average of the Closing Price, of a share of Common Stock pursuant
to this Section 12.04(e) has been made, exceeds 1% of the product of the current
market price per share (determined as provided in Section 12.04(g)) of the
Common Stock as of the Trading Day immediately preceding the record date fixed
for stockholders entitled to receive such distribution multiplied by the number
of shares of Common Stock outstanding on such record date, then, in any such
event:
(i) the number of Base Shares payable on a voluntary conversion or
Auto-Conversion shall be increased so that the same shall equal the number
determined by multiplying such number in effect immediately prior to the
close of business on the date fixed for the determination of the
stockholders of record entitled to such distribution by a fraction of which
(i) the denominator shall be the current market price per share (determined
as provided in Section 12.04(g)) on such date less an amount equal to the
quotient of (x) the excess of such combined amount over such 10% and (y)
the number of shares of Common Stock outstanding on the record date and
(ii) the numerator shall be equal to the current market price on such date,
such adjustment to become effective immediately prior to the opening of
business on the earlier of the day following the record date fixed for the
payment of such distribution or the "ex" date with respect to such
distribution;
(ii) the Auto-Conversion Price and the Threshold Price shall be
decreased so that the same shall equal the price determined by multiplying
such number or price in effect immediately prior to the close of business
on the date fixed for the determination of the stockholders of record
entitled to such distribution by a fraction of which (i) the numerator
shall be the current market price per share (determined as provided in
Section 12.04(g)) on such date less an amount equal to the quotient of (x)
the excess of such combined amount over such 10% and (y) the number of
shares of Common Stock outstanding on the record date, and (ii) the
denominator shall be equal to the current market price on such date, such
adjustment to become effective (A) with respect to the
-59-
Auto-Conversion Price, immediately prior to the opening of business on the
day next following the record date fixed for the payment of such
distribution, and (B) with respect to the Threshold Price, immediately
prior to the opening of business on the earlier of the day next following
the record date fixed for the payment of such distribution or the "ex" date
with respect to such distribution; and
(iii) when making any calculation of the simple average of the daily
volume-weighted average price, or the simple average of the Closing Price,
of the Common Stock, the daily volume-weighted average price or the Closing
Price, as applicable, of the Common Stock on each day prior to the earlier
of the record date fixed for the payment of such distribution or the "ex"
date with respect to such distribution shall be decreased so that the same
shall equal the price determined by multiplying such price by a fraction of
which (i) the numerator shall be the current market price per share
(determined as provided in Section 12.04(g)) on such date less an amount
equal to the quotient of (x) the excess of such combined amount over such
10% and (y) the number of shares of Common Stock outstanding on the record
date, and (ii) the denominator shall be equal to the current market price
on such date.
(f) In case a successful tender or exchange offer, other than an odd lot
offer, made by the Company or any Subsidiary for all or any portion of the
Common Stock shall involve an aggregate consideration having a fair market value
(as determined in good faith by the Board of Directors, whose determination
shall be conclusive and described in a Board Resolution) at the last time (the
"Expiration Time") tenders or exchanges may be made pursuant to such tender or
exchange offer (as it may be amended) that, together with (i) the aggregate of
the cash plus the fair market value (as determined in good faith by the Board of
Directors, whose determination shall be conclusive and described in a Board
Resolution), as of the expiration of the tender or exchange offer, of
consideration payable in respect of any other tender or exchange offer by the
Company or a Subsidiary for all or any portion of the Common Stock concluded
within the preceding 12 months and in respect of which no adjustment to the
number of Base Shares payable on a voluntary conversion or Auto-Conversion, the
Auto-Conversion Price, the Threshold Price and any calculation of a simple
average of daily volume-weighted average prices, or the simple average of the
Closing Price, of a share of Common Stock pursuant to this Section 12.04(f) has
been made and (ii) the aggregate amount of any distributions to all holders of
the Common Stock made exclusively in cash within the preceding 12 months and in
respect of which no adjustment to the number of Base Shares payable on a
voluntary conversion or Auto-Conversion, the Auto-Conversion Price, the
Threshold Price and any calculation of a simple average of daily volume-weighted
average prices, or the simple average of the Closing Price, of a share of Common
Stock pursuant to Section 12.04(e) has been made, exceeds 10% of the product of
the current market price per share (determined as provided in Section 12.04(g))
of the Common Stock outstanding (including any tendered shares) on the
Expiration Time multiplied by the number of shares of Common Stock outstanding
(including any tendered shares) as of the Expiration Time, then, in each case:
(i) the number of Base Shares payable on a voluntary conversion or
Auto-Conversion, shall be increased by multiplying such number in effect
immediately prior to
-60-
the Expiration Time by a fraction of which (i) the denominator shall be (x)
the product of the current market price per share (determined as provided
in Section 12.04(g)) of the Common Stock on the Trading Day next succeeding
the Expiration Time multiplied by the number of shares of Common Stock
outstanding (including any tendered or exchanged shares) at the Expiration
Time minus (y) the fair market value (determined as aforesaid) of the
aggregate consideration payable to stockholders based on the acceptance (up
to any maximum specified in the terms of the tender or exchange offer) of
all shares validly tendered or exchanged and not withdrawn as of the
Expiration Time (the shares deemed so accepted, up to any such maximum,
being referred to as the "Purchased Shares") and (ii) the numerator shall
be the product of (x) such current market price per share (determined in
accordance with Section 12.04(g)) on the Trading Day next succeeding the
Expiration Time multiplied by (y) such number of outstanding shares at the
Expiration Time less the number of Purchased Shares, such increase to
become effective immediately prior to the opening of business on the
earlier of the day following the Expiration Time or the "ex" date with
respect to such tender or exchange;
(ii) the Auto-Conversion Price and the Threshold Price shall be
decreased by multiplying such price by a fraction of which (i) the
denominator shall be the product of (x) the current market price per share
(determined in accordance with Section 12.04(g)) on the Trading Day next
succeeding the Expiration Time multiplied by (y) such number of outstanding
shares at the Expiration Time less the number of Purchased Shares and (ii)
the numerator shall be (x) the product of the current market price per
share (determined as provided in Section 12.04(g)) of the Common Stock on
the Trading Day next succeeding the Expiration Time multiplied by the
number of shares of Common Stock outstanding (including any tendered or
exchanged shares) at the Expiration Time minus (y) the fair market value
(determined as aforesaid) of the aggregate consideration payable to
stockholders based on the acceptance of the Purchased Shares, such decrease
to become effective (A) with respect to the Auto-Conversion Price,
immediately prior to the opening of business on the day following the
Expiration Time, and (B) with respect to the Threshold Price, immediately
prior to the opening of business on the earlier of the day following the
Expiration Time or the "ex" date with respect to such tender or exchange;
and
(iii) when making any calculation of the simple average of the daily
volume-weighted average price, or the simple average of the Closing Price,
of the Common Stock, the daily volume-weighted average price or the Closing
Price, as applicable, of the Common Stock on each day prior to the earlier
of the Expiration Time or the "ex" date with respect to such tender or
exchange shall be adjusted by multiplying such price by a fraction of which
(i) the denominator shall be the product of (x) such current market price
per share (determined in accordance with Section 12.04(g)) on the Trading
Day next succeeding the Expiration Time multiplied by (y) such number of
outstanding shares at the Expiration Time less the number of Purchased
Shares and (ii) the numerator shall be (x) the product of the current
market price per share (determined as provided in Section 12.04(g)) of the
Common Stock on the Trading Day next succeeding the
-61-
Expiration Time multiplied by the number of shares of Common Stock
outstanding (including any tendered or exchanged shares) at the Expiration
Time minus (y) the fair market value (determined as aforesaid) of the
aggregate consideration payable to stockholders based on the acceptance of
the Purchased Shares.
(g) For the purpose of any computation under Sections 12.04(c), (d) and
(e), the current market price per share of Common Stock on any date in question
shall be deemed to be the average of the daily Closing Prices per share of
Common Stock for the ten consecutive Trading Days immediately prior to the date
in question; provided, however, that
(1) if the "ex" date (as hereinafter defined) for any event (other
than the issuance or distribution requiring such computation) that requires
an adjustment to the number of Base Shares payable on a voluntary
conversion or Auto-Conversion, the Auto-Conversion Price, the Threshold
Price or any calculation of a simple average of daily volume-weighted
average prices, or the simple average of the Closing Prices, of a share of
Common Stock, as applicable, pursuant to Section 12.04(a), (b), (c), (d),
(e) or (f) ("Other Event") occurs on or after the tenth Trading Day prior
to the date in question and prior to the "ex" date for the issuance or
distribution requiring such computation (the "Current Event"), 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 reciprocal of
the fraction by which the number of Base Shares payable on a voluntary
conversion or Auto-Conversion is so required to be adjusted as a result of
such Other Event,
(2) if the "ex" date for any Other Event occurs after the "ex" date
for the Current Event and on or prior to the date in question, 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 fraction by
which the number of Base Shares payable on a voluntary conversion or
Auto-Conversion is so required to be adjusted as a result of such Other
Event,
(3) if the "ex" date for any Other Event occurs on the "ex" date for
the Current Event, one of those events shall be deemed for purposes of
clauses (1) and (2) of this proviso to have an "ex" date occurring prior to
the "ex" date for the Other Event, and
(4) if the "ex" date for the Current Event is on or after the tenth
Trading Day prior to the date in question and prior to the date in
question, after taking into account any adjustment required pursuant to
clause (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 on the date in question (as determined in
good faith by the Board of Directors in a manner consistent with any
determination of such value for purposes of Section 12.04(d) or (e), whose
determination shall be conclusive and described in a Board Resolution) of
the portion of the rights, warrants, options, evidences of indebtedness,
shares of capital stock, securities, cash or property being distributed
applicable to one share of Common Stock.
-62-
For the purpose of any computation under Section 12.04(f), the current market
price per share of Common Stock on any date in question shall be deemed to be
the average of the daily Closing Prices for the five consecutive Trading Days
selected by the Company commencing on or after the latest (the "Commencement
Date") of (A) the date 20 Trading Days before the date in question, (B) the date
of commencement of the tender or exchange offer requiring such computation and
(C) the date of the last amendment, if any, of such tender or exchange offer
involving a change in the maximum number of shares for which tenders are sought
or a change in the consideration offered, and ending not later than the Trading
Day next succeeding the Expiration Time of such tender or exchange offer (or, if
such Expiration Time occurs before the close of trading on a Trading Day, not
later than the Trading Day during which the Expiration Time occurs); provided,
however, that if the "ex" date for any Other Event (other than the tender or
exchange offer requiring such computation) occurs on or after the Commencement
Date and on or prior to the Trading Day next succeeding the Expiration Time for
the tender or exchange offer requiring such computation, 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 reciprocal of the same fraction by
which the number of Base Shares payable on a voluntary conversion or
Auto-Conversion 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
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 Time
of such tender or exchange offer.
(h) In addition to those required by paragraphs (a), (b), (c), (d), (e) and
(f) of this Section 12.04, to the extent permitted by applicable law, the
Company from time to time may increase the number of Base Shares and the Plus
Cash Amount payable on a voluntary conversion or Auto-Conversion, as applicable,
by any amount for any period of time if the period is at least twenty (20) days
and the Board of Directors shall have made a determination that such increase
would be in the best interests of the Company, which determination shall be
conclusive. Whenever the number of Base Shares and the Plus Cash Amount payable
on a voluntary conversion or Auto-Conversion, as applicable, is increased
pursuant to the preceding sentence, the Company shall give notice of the
increase to the Holders of Notes in the manner provided in Section 1.05 at least
fifteen (15) days prior to the date the increased number takes effect, and such
notice shall state the increased number of Base Shares and the increased Plus
Cash Amount and the period during which it will be in effect.
(i) No adjustment in the number of Base Shares payable on a voluntary
conversion or Auto-Conversion, the Auto-Conversion Price, the Threshold Price or
any calculation of a simple average of daily volume-weighted average prices, or
the simple average of the Closing Prices, of a share of Common Stock shall be
required unless such adjustment would require an increase or decrease of at
least 1% in such number or price; provided, however, that any adjustments, which
by
-63-
reason of this Section 12.04(i) are not required to be made, shall be carried
forward and taken into account in any subsequent adjustment.
(j) Each adjustment made pursuant to this Section 12.04 shall be carried
forward and taken into account in any subsequent adjustment pursuant to this
Section 12.04.
(k) In the event that the Company distributes assets, debt securities,
rights, warrants or options (other than those referred to in Section 12.04(c))
pro rata to holders of Common Stock, and the fair market value of the portion of
assets, debt securities, rights, warrants or options applicable to one share of
Common Stock distributed to holders of Common Stock exceeds the Average Sale
Price (as defined below) per share of Common Stock, or such Average Sale Price
exceeds such fair market value by less than $1.00, then so long as any such
assets, debt securities, rights, options or warrants have not expired or been
redeemed by the Company, the Company shall make proper provision so that the
Holder of any Note upon voluntary conversion or Auto-Conversion, rather than
being entitled to an adjustment in the number of Base Shares will be entitled to
receive upon such voluntary conversion or Auto-Conversion, in addition to the
Plus Cash Amount and the shares of Common Stock otherwise issuable upon
voluntary conversion or Auto-Conversion, the kind and amount of assets, debt
securities, rights, warrants and options such Holder would have received had
such Holder converted its Note immediately prior to the date of determination of
the holders entitled to such distribution, assuming for such purposes that the
Plus Cash Amount was paid in cash.
"Average Sale Price" means the average of the Closing Prices of the Common
Stock for the shorter of (i) 30 consecutive Trading Days ending on the last full
Trading Day prior to the Time of Determination (as defined below) with respect
to the rights, options, warrants or distribution in respect of which the Average
Sale Price is being calculated, or (ii) the period (x) commencing on the date
next succeeding the first public announcement of (a) the issuance of rights,
options or warrants or (b) the distribution, in each case, in respect of which
the Average Sale Price is being calculated and (y) proceeding through the last
full Trading Day prior to the Time of Determination with respect to the rights,
options, warrants or distribution in respect of which the Average Sale Price is
being calculated, or (iii) the period, if any, (x) commencing on the date next
succeeding the Ex-Dividend Time (as defined below) with respect to the next
preceding (a) issuance of rights, warrants or options or (b) distribution, in
each case, for which an adjustment is required by the provisions of Section
12.04(c) or Section 12.04(j) and (y) proceeding through the last full Trading
Day prior to the Time of Determination with respect to the rights, options,
warrants, or distribution in respect of which the Average Sale Price is being
calculated. If the Ex-Dividend Time (or in the case of a subdivision,
combination or reclassification, the effective date with respect thereto) with
respect to a dividend, subdivision, combination or reclassification to which
Section 12.04(a), (b) or (c) applies occurs during the period applicable for
calculating "Average Sale Price" pursuant to the definition in the preceding
sentence, "Average Sale Price" shall be calculated for such period in a manner
determined in good faith by the Board of Directors to reflect the impact of such
dividend, subdivision, combination or reclassification on the Closing Price of
the Common Stock during such period.
-64-
"Time of Determination" means the time and date of the earlier of (i) the
determination of stockholders entitled to receive rights, warrants or options or
a distribution, in each case, to which this Section 12.04 applies and (ii) the
time ("Ex-Dividend Time") immediately prior to the commencement of "ex-dividend"
trading for such rights, options, warrants or distribution on the New York Stock
Exchange or such other national or regional exchange or market on which the
shares of Common Stock are listed or quoted.
Section 12.05. Notice of Adjustments. Whenever the number of Base Shares
payable on a voluntary conversion or Auto-Conversion, the Auto-Conversion Price,
the Threshold Price or any calculation of a simple average of daily
volume-weighted average prices, or the simple average of the Closing Prices, of
a share of Common Stock is adjusted as herein provided, the Company shall
compute the adjusted number of Base Shares payable on a voluntary conversion or
Auto-Conversion, the Auto-Conversion Price, the Threshold Price or calculation
of a simple average of daily volume-weighted average prices of a share of Common
Stock in accordance with Section 12.04 and shall prepare a certificate signed by
the Chief Financial Officer of the Company setting forth the adjusted number of
Base Shares payable on a voluntary conversion or Auto-Conversion, the
Auto-Conversion Price, the Threshold Price or calculation of a simple average of
daily volume-weighted average prices, or the simple average of the Closing
Prices, of a share of Common Stock and showing in reasonable detail the facts
upon which such adjustment is based, and such certificate shall forthwith be
filed (with a copy to the Trustee or the Conversion Agent) at each office or
agency maintained for the purpose of conversion of Notes pursuant to Section
9.02; and the Company shall forthwith cause a notice setting forth the adjusted
number of Base Shares payable on a voluntary conversion or Auto-Conversion, the
Auto-Conversion Price or the Threshold Price, to be mailed, first class postage
prepaid, to each Holder of Notes at its address appearing on the Note Register.
Unless and until the Trustee (and the Conversion Agent, as the case may be)
shall receive such notice, the Trustee (and the Conversion Agent, as the case
may be) may assume without inquiry that the number of Base Shares payable on a
voluntary conversion or Auto-Conversion, the Auto-Conversion Price, the
Threshold Price or any calculation of a simple average of daily volume-weighted
average prices, or the simple average of the Closing Prices, of a share of
Common Stock have not been, and are not required to be, adjusted and that the
last number of Base Shares payable on a voluntary conversion or Auto-Conversion,
the Auto-Conversion Price, the Threshold Price or calculation of a simple
average of daily volume-weighted average prices, or the simple average of the
Closing Prices, of a share of Common Stock of which it has written notice
remains in effect.
Section 12.06. Notice of Certain Corporate Action. In case:
(a) the Company shall declare a dividend (or any other distribution) on its
Common Stock that would require an adjustment to the number of Base Shares
payable on a voluntary conversion or Auto-Conversion, the Auto-Conversion Price,
the Threshold Price or any calculation of a simple average of daily
volume-weighted average prices, or the simple average of the Closing Prices, of
a share of Common Stock pursuant to Section 12.04(d) or 12.04(e); or
-65-
(b) the Company shall authorize the granting to all holders of its Common
Stock of rights, warrants or options to subscribe for or purchase any shares of
capital stock of any class or of any other rights (excluding rights distributed
pursuant to any stockholder rights plan); or
(c) of any reclassification of the Common Stock of the Company (other than
a subdivision or combination of its outstanding shares of Common Stock), or of
any consolidation or merger to which the Company is a party and for which
approval of any stockholders of the Company is required, or of the sale or
transfer of all or substantially all of the assets of the Company; or
(d) of the voluntary or involuntary dissolution, liquidation or winding up
of the Company; or
(e) the Company or any Subsidiary of the Company shall commence a tender or
exchange offer for all or a portion of the Company's outstanding shares of
Common Stock (or shall amend any such tender or exchange offer);
then the Company shall cause to be filed at each office or agency
maintained for the purpose of conversion of Notes pursuant to Section 9.02, and
shall cause to be mailed to all Holders at their last addresses as they shall
appear in the Note Register, at least 20 days (or 10 days in any case specified
in clause 12.06(a) or 12.06(b) above) prior to the applicable record, effective
or expiration date hereinafter specified, a notice stating (x) the date on which
a record is to be taken for the purpose of such dividend, distribution or
granting of rights, warrants or options, 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, warrants or options are to be determined, or (y)
the date on which such reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding up is expected to become effective, and the
date as of which it is expected that holders of Common Stock of record shall be
entitled to exchange their shares of Common Stock for securities, cash or other
property deliverable upon such reclassification, consolidation, merger, sale,
transfer, dissolution, liquidation or winding up, or (z) the date on which such
tender offer commenced, the date on which such tender offer is scheduled to
expire unless extended, the consideration offered and the other material terms
thereof (or the material terms of any amendment thereto).
Section 12.07. Company's Obligation Regarding Common Stock. The Company
shall at all times reserve and keep available, free from preemptive rights, out
of its authorized but unissued Common Stock, solely for the purpose of effecting
the conversion of Notes, the whole number of shares of Common Stock then
issuable upon the conversion in full of all Outstanding Notes.
The Company covenants that if any shares of Common Stock to be provided for
the purpose of conversion of Notes hereunder require registration with or
approval of any governmental authority under any federal or state law before
such shares may be validly issued upon conversion, the Company shall in good
faith and as expeditiously as practicable endeavor to secure such registration
or approval, as the case may be.
-66-
The Company further covenants that so long as the Common Stock shall be
listed or quoted on the New York Stock Exchange, the Nasdaq, or any other
national securities exchange, the Company shall, if permitted by the rules of
such exchange, list and keep listed so long as the Common Stock shall be so
listed on such market or exchange, all Common Stock issuable upon conversion of
the Notes.
Section 12.08. Taxes on Conversions. The Company shall pay any and all
stamp, documentary or issuance taxes that may be payable in respect of the issue
or delivery of shares of Common Stock on conversion of Notes pursuant hereto,
but shall not pay any taxes measured by net income or otherwise imposed on
Holders in connection with a conversion. 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 shares of Common Stock in a name other than that of
the Holder of the Note or Notes to be converted, and no such issue or delivery
shall be made unless and until the Person requesting such issue has paid to the
Company the amount of any such tax, or has established to the satisfaction of
the Company that such tax has been paid.
Section 12.09. Covenant as to Common Stock. The Company covenants that all
shares of Common Stock that may be issued upon conversion of Notes shall upon
issue be newly issued (and not treasury shares) and shall be duly authorized,
validly issued, fully paid and nonassessable and, except as provided in Section
12.08, the Company shall pay all taxes, liens and charges with respect to the
issue thereof.
Section 12.10. Cancellation of Converted Notes. All Notes delivered for
conversion shall be delivered to the Trustee to be cancelled by or at the
direction of the Trustee, which shall dispose of the same as provided in Section
3.08.
Section 12.11. Provisions in Case of Reclassification, Consolidation,
Merger or Sale of Assets. In the event that the Company shall be a party to any
transaction (including any (i) recapitalization or reclassification of the
Common Stock (other than a change in par value, or from par value to no par
value, or from no par value to par value, or as a result of a subdivision or
combination of the Common Stock), (ii) any consolidation of the Company with, or
merger of the Company into, any other person, any merger of another person into
the Company (other than a merger that does not result in a reclassification,
conversion, exchange or cancellation of outstanding shares of Common Stock of
the Company), (iii) any sale, lease, transfer, conveyance or other disposition
of all or substantially all of the assets of the Company or (iv) any compulsory
share exchange) pursuant to which the Common Stock is converted into the right
to receive other securities, cash or other property, then lawful provision shall
be made as part of the terms of such transaction to the Base Shares and Plus
Cash Amount payable upon conversion such that the Holder of any Note upon such
conversion will receive upon conversion (subject to funds being legally
available for such purpose under applicable law at the time of such conversion)
only the kind and amount of securities, cash and other property receivable upon
such transaction by a holder of a number of shares of Common Stock equal to the
number of Base Shares into which such Note might have been converted immediately
prior to such transaction, together with the Plus Cash Amount. The Company or
the Person formed by such consolidation or resulting from such merger or that
-67-
acquired such assets or that acquired the Company's shares of Common Stock, as
the case may be, shall execute and deliver to the Trustee a supplemental
indenture, satisfactory to the Trustee, establishing such rights. Such
supplemental indenture shall provide for adjustments that, for events subsequent
to the effective date of such supplemental indenture, shall be as nearly
equivalent as may be practicable to the adjustments provided for in this
Article. The above provisions of this Section 12.11 shall similarly apply to
successive transactions of the foregoing type.
Section 12.12. Auto-Conversion by the Company.
(a) Subject to the terms and conditions of this Section 12.12, the Company
may elect, at its sole option, to automatically convert (a "Cash
Auto-Conversion") all of the Notes or any portion of the principal amount
thereof that is $1,000 or an integral multiple of $1,000, into the Base Shares
and Plus Cash Amount and pay the Plus Cash Amount in cash, at any time prior to
Maturity; provided that the Closing Price of the Company's Common Stock exceeds
$[ ] per share (the "Auto-Conversion Price") for any 20 Trading Days during any
consecutive 25 Trading Day period, ending within one Trading Day prior to the
date of any Auto-Conversion Notice (as defined below) provided by the Company;
and further provided that the Company shall not carry out a Cash Auto-Conversion
during any Stock Substitution Period.
In the event that the date on which all or any portion of the Notes are
auto-converted (the "Auto-Conversion Date") occurs prior to September [ ], 2005,
the Company will also pay or provide for the Make-Whole Payment in cash on the
Auto-Conversion Date.
(b) Unless the Company shall have previously called for redemption all of
the outstanding Notes, the Company or, at the request and expense of the
Company, the Trustee, shall give to all Holders of Notes notice (the "Cash
Auto-Conversion Notice") of a Cash Auto-Conversion seven calendar days prior to
the Auto-Conversion Date, provided that if the seventh calendar day is not a
Trading Day the Auto-Conversion Date shall be the next Trading Day. The Company
shall also deliver a copy of such Cash Auto-Conversion Notice to the Trustee.
(c) Each Cash Auto-Conversion Notice shall state:
(i) the Auto-Conversion Date;
(ii) the place or places where such Notes are to be surrendered for
Cash Auto-Conversion, if any;
(iii) the number of Base Shares and Plus Cash Amount then in effect;
(iv) the Make-Whole Payment amount, if any; and
(v) the CUSIP number of such Notes, if any.
(d) Subject to the terms and conditions of this Section 12.12, the Company
may elect, at its sole option, to automatically convert (a "Stock
Auto-Conversion") all of the Notes or any
-68-
portion of the principal amount thereof that is $1,000 or an integral multiple
of $1,000, into the Base Shares and the Plus Cash Amount and pay the Plus Cash
Amount in Plus Cash Shares. If the Company so elects to effect a Stock
Auto-Conversion, the Company or, at the request and expense of the Company, the
Trustee, shall give to all Holders of Notes notice (a "Stock Substitution
Notice") of a Stock Auto-Conversion with a copy of such Stock Substitution
Notice to be filed with the Commission as an exhibit to a current report on Form
8-K. The Stock Substitution Notice must specify:
(i) a stock price as selected by the Company, which must be equal to
or greater than the Auto-Conversion Price (the "Stock Substitution
Reference Price");
(ii) the percentage of the principal amount of the outstanding Notes
that the Company must convert if the conditions described in Section
12.12(e) are met; and
(iii) the CUSIP number of such Notes, if any.
(e) Beginning on and including the Stock Substitution Period Commencement
Date, as defined below, the Company cannot withdraw or modify the Stock
Substitution Notice until the Closing Price of the Company's shares of Common
Stock for any 20 Trading Days during any consecutive 25 Trading Day period is
less than the applicable Stock Substitution Reference Price and only as
permitted in this Section 12.12. The period during which a Stock Substitution
Notice cannot be withdrawn or modified is the "Stock Substitution Period." The
first Trading Day (after the Company has given a Stock Substitution Notice) on
which the Closing Price of the Company's shares of Common Stock is greater than
the Stock Substitution Reference Price is the "Stock Substitution Period
Commencement Date."
During any Stock Substitution Period, if the Closing Price of the Company's
shares of Common Stock for any 20 Trading Days during any consecutive 25 Trading
Day period exceeds the Stock Substitution Reference Price, which 20 Trading Days
are referred to as the "Valuation Days," the Company must:
(i) convert the percentage specified in the Stock Substitution Notice
of the principal amount of the outstanding Notes and each $1,000 principal
amount of Notes so converted shall be converted into Base Shares and the
Plus Cash Amount (with any remaining amount less than $1,000 paid as
specified in Section 12.12(k)) on the Auto-Conversion Date, which date
shall be seven calendar days after the Company issues a Stock
Auto-Conversion Notice (as defined below), provided that if the seventh
calendar day is not a Trading Day, the Auto-Conversion Date shall be the
next Trading Day;
(ii) pay the aggregate Plus Cash Amount owing pursuant to clause (i)
above in Plus Cash Shares as described in Section 12.12(g); and
(iii) pay the Make-Whole Payment, if any, in cash.
-69-
(f) No later than the next Trading Day immediately following the 20th
Valuation Day, the Company will notify the Holders of the conversion of the
Notes into the shares of the Company's Common Stock and the substitution of Plus
Cash Shares for the Plus Cash Amount (the "Stock Auto-Conversion Notice"). The
Stock Auto-Conversion Notice shall state:
(i) the Auto-Conversion Date selected by the Company pursuant to
12.12(e)(i);
(ii) the place or places where such Notes are the be surrendered for
Stock Auto-Conversion, if any;
(iii) the number of Base Shares and Plus Cash Shares then in effect;
(iv) the Make-Whole Payment amount, if any; and
(v) the CUSIP number of such Notes, if any.
(g) If the Company elects to pay all or any part of the Plus Cash Amount in
Plus Cash Shares, the shares to be delivered will be valued at 95% of the simple
average of the Closing Price of the Company's shares of Common Stock for each of
the 20 Valuation Days (the "Stock Substitution Price").
(h) For the avoidance of doubt, the Company may elect to carryout a Cash
Auto-Conversion at any time after the issuance of a Stock Substitution Notice
and prior to the Stock Substitution Period Commencement Date, including with
respect to that percentage of Plus Cash Notes referenced in such Stock
Substitution Notice.
After the Stock Substitution Period Commencement Date, the Company shall
not withdraw or modify the Stock Substitution Notice until the Closing Price of
the Company's shares of Common Stock for any 20 Trading Days during any
consecutive 25 Trading Days is less than the Stock Substitution Reference Price
then in effect.
Any notice of the Company's withdrawal or modification will be effective
upon the Company's filing of such notice with the Trustee, which notification
the Company must also file with the Commission by the close of business of the
next Business Day as an exhibit to a current report on Form 8-K.
(i) Prior to the Stock Substitution Period Commencement Date, the Company
may withdraw or modify the Stock Substitution Notice at any time.
(j) Except as provided elsewhere in this Section 12.12, in connection with
any Auto-Conversion of any Note or portion thereof, that portion of accrued and
unpaid interest, if any, remaining unpaid on such conversion shall not be
cancelled, extinguished or forfeited, but rather shall be deemed to be paid in
full to the Holder thereof through delivery of the Base Shares, Plus Cash Amount
and any Make-Whole Payment (together with the cash or stock payment, if any, in
lieu of fractional shares) in exchange for the Note or portion thereof being
Auto-Converted. Except as
-70-
provided elsewhere in this Section 12.12, no payment or other adjustment shall
be made for interest accrued on any Note or portion thereof Auto-Converted or
for dividends on any shares issued upon the Auto-Conversion of such Note or
portion thereof as provided in this Article. Notwithstanding the foregoing, the
Holder shall receive the regular interest payment payable to Holders on a
regular record date for such interest payment in connection with any
Auto-Conversion effected on or after such record date and prior to the interest
payment date.
(k) In the event of any Auto-Conversion, the Company shall issue and
deliver a certificate or certificates for the number of shares of Common Stock
issuable upon Auto-Conversion of the Notes along with any cash or stock due in
respect of the Plus Cash Amount or any fractional shares of Common Stock
otherwise issuable upon Auto-Conversion as provided in Section 12.03 hereof for
issuance and payment to the Holder as promptly after the Auto-Conversion Date as
practicable in accordance with the provisions of this Article 12. In the event
of a Stock Auto-Conversion, instead of any fractional share of Common Stock that
would otherwise be issuable upon Auto-Conversion of any Note, the Company shall
issue an additional whole share in lieu of any such fractional share (determined
with reference to the aggregate principal amount of all of the Notes held by
such Holder).
(l) All Notes subject to any Auto-Conversion shall be delivered to the
Trustee to be canceled at the direction of the Trustee, which shall dispose of
the same as provided in Section 3.08 hereof.
(m) Any Auto-Conversion of less than all of the Notes then outstanding will
be made pro rata with reference to the aggregate principal amount of Notes held
by each Holder of Notes relative to the aggregate principal amount of Notes held
by all Holders of Notes, in each case as of the Auto-Conversion Date.
(n) Promptly after the Auto-Conversion Date, the Company will provide
notice to all Holders of outstanding Notes stating the aggregate principal
amount of Plus Cash Notes that were Auto-Converted and describing the aggregate
consideration paid therefore. A copy of that notice will be promptly filed with
the Commission as an exhibit to a current report on Form 8-K.
(o) If any provision of this Section 12.12 are inconsistent with applicable
law at the time of such Auto-Conversion, such law shall govern.
Section 12.13. Notification to Trustee. If the Company is obligated to pay
any Make-Whole Payment upon Auto-Conversion pursuant to Section 12.12(a), it
shall deliver to the Trustee a certificate setting forth the amount of interest
actually paid or provided for by the Company with respect to the affected Notes
prior to the Auto-Conversion Date. Unless and until the Trustee shall receive
such certificate, it shall not be charged with knowledge of the facts required
by this Section 12.13 to be set forth therein. In no event will the Trustee be
required to inquire into or verify the information required to be set forth in
such certificate, other than the amount of interest actually paid by the Trustee
as paying agent with respect to the affected Notes. The Trustee need not inquire
into or confirm any amount of interest "provided for" by the Company, unless
such amount has actually been delivered to the Trustee as paying agent and is
being held by the Trustee as paying agent pending distribution to the affected
holders.
-71-
Section 12.14. Company's Obligation. All calculations, adjustments,
conversions and other determinations under this Article 12 shall be the sole
responsibility and obligation of the Company. The Trustee (a) shall have no
obligation to review, verify, challenge or contest any such calculation,
adjustment, conversion or other determination and (b) shall not be liable for
any default or error by the Company under this Article 12.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed all as of the day and year first above written.
TRANSWITCH CORPORATION
By:
--------------------------------------------------
Name:
------------------------------------------------
Title:
-----------------------------------------------
U.S. BANK NATIONAL
ASSOCIATION, as
Trustee By: Name:
Title:
-72-
[If in global form, insert legend set forth in Section 2.03]
EXHIBIT A
TRANSWITCH CORPORATION
5.45% CONVERTIBLE PLUS CASH NOTESM DUE 2007
No. $
CUSIP NO.
TRANSWITCH CORPORATION, a corporation duly organized and existing under the
laws of the State of Delaware (herein called the "Company," which term includes
any successor entity under the Indenture referred to on the reverse hereof), for
value received, hereby promises to pay to ___________, or registered assigns,
the principal sum of _____________________________ ($____________) at the office
or agency of the Company referred to below, on September 30, 2007 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 on
said principal sum semiannually on March 31 and September 30 of each year,
commencing March 31, 2004 (each an "Interest Payment Date") and beginning to
accrue as of the date this Note is first issued, at said office or agency, in
like coin or currency, at the rate of 5.45% per annum, until the principal
hereof is paid or made available for payment. The interest so payable, and
punctually paid or duly provided for, on any Interest Payment Date shall, as
provided in such Indenture, 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
Regular Record Date for such interest, which shall be the March 15 or September
15 (whether or not a Business Day), as the case may be, next preceding such
Interest Payment Date. Any such interest not so punctually paid or duly provided
for shall forthwith cease to be payable to the Holder on such Regular Record
Date and may either be paid to the Person in whose name this Note (or one or
more Predecessor Notes) is registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest to be fixed by the
Trustee, notice whereof shall be given to Holders of Notes not less than 10 days
prior to such Special Record Date, or be paid at any time 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, all as more fully provided in said Indenture.
The Company may elect, solely at the Company's option, to pay interest in
shares of the Company's Common Stock, provided however that the Company shall
not make any payment of interest in shares of Common Stock unless the daily
volume-weighted average price of the Common Stock for the ten (10) Trading Days
ending on and including the second Trading Day immediately preceding the
Interest Payment Date equals or exceeds the Threshold Price (as defined in the
Indenture) per share of Common Stock. If the Company elects to make any payment
of interest in shares of Common Stock, the shares to be delivered will be valued
at 95% of the simple average of the daily volume-weighted average price of the
Common Stock for the ten (10) Trading Days ending
A-1
on and including the second Trading Day immediately preceding the Interest
Payment Date, as described in the Indenture.
Except as otherwise described in the Indenture, payment of the principal
of, premium, if any, and interest on this Note shall be made at the office or
agency of the Company maintained for such purpose, which initially shall be the
Corporate Trust Office of the Trustee referred to on the reverse side hereof, in
such coin or currency of the United States of America as at the time of payment
is legal tender for payment of public and private debts, provided that the
Company may make such payment either by (i) mailing a check in the amount of
such payment, payable to or upon the written order of the Person entitled
thereto pursuant to Section 3.07 of the Indenture (as defined therein) or (ii)
transfer to an account maintained by the payee located inside the United States.
Reference is hereby made to the further provisions of this Note set forth
on the reverse hereof, which further provisions shall for all purposes have the
same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof by manual signature, this Note shall
not be entitled to any benefit under the Indenture or be valid or obligatory for
any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
DATED: ______________, 2003 TRANSWITCH CORPORATION
By:
-----------------------------------
Name:
------------------------------
Title:
-----------------------------
Attest:
By:
-----------------------------------
Name:
------------------------------
Title:
-----------------------------
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes referred to in the within-mentioned Indenture.
DATED: ________________, 2003 U.S. Bank National Association, as Trustee
By:
-----------------------------------
Authorized Signatory
A-2
FORM OF REVERSE OF NOTE
TranSwitch Corporation
5.45% CONVERTIBLE PLUS CASH NOTESM DUE 2007
This Note is one of a duly authorized issue of Notes of the Company
designated as its 5.45% Convertible Plus Cash NotesSM due 2007 (herein called
the "Notes"), limited in aggregate original principal amount to $114,143,000 as
adjusted from time to time on the books and records of the Trustee, which may be
issued under an Indenture, dated as of September __, 2003 (the "Indenture"),
between the Company and U.S. Bank National Association, as Trustee for the
Holders of Notes issued under said Indenture (herein called the "Trustee", which
term includes any successor trustee under the Indenture), to which Indenture and
all indentures supplemental thereto reference is hereby made for a statement of
the respective rights, limitations of rights, duties and immunities thereunder
of the Company, the Trustee and the Holders of the Notes and of the terms upon
which the Notes are, and are to be, authenticated and delivered.
Subject to and upon compliance with the provisions of the Indenture, the
Holder of this Note is entitled, at its option, at any time on or before
maturity of the Notes, or in case this Note or a portion hereof is called for
redemption or is the subject of an Auto-Conversion Notice, then in respect of
this Note or such portion hereof until and including, but (unless the Company
defaults in making the payment due upon redemption, repurchase or
auto-conversion) not after, the close of business on the Business Day
immediately preceding the Redemption Date, Repurchase Date or Auto-Conversion
Date, as the case may be, to convert this Note (or any portion of the principal
amount hereof which is U.S. $1,000 or an integral multiple thereof), at the
principal amount hereof, or of such portion, into (i) that number of fully-paid
and non-assessable shares of the Company's Common Stock as is equal to [ ] (the
"Base Shares") plus (ii) $[ ] cash (the "Plus Cash Amount").
At the Company's sole option, it may pay or provide for the Plus Cash
Amount deliverable upon voluntary conversion in shares of Common Stock (the
"Plus Cash Shares"); provided, however, that the Company shall not make any
payment of the Plus Cash Amount in Plus Cash Shares unless the daily
volume-weighted average price of the Common Stock for the ten (10) Trading Days
ending on and including the second Trading Day immediately preceding the
Conversion Date (as defined in the Indenture) equals or exceeds the Threshold
Price per share of Common Stock. The Common Stock deliverable upon voluntary
conversion (whether in respect of Base Shares or Plus Cash Shares, as
applicable) and any cash delivered in respect of the Plus Cash Amount are
hereafter referred to in the aggregate as the "Conversion Consideration." If the
Company elects to pay the Plus Cash Amount in Plus Cash Shares, the Plus Cash
Shares will be valued at 95% of the simple average of the daily volume-weighted
average price of the Common Stock for the ten (10) Trading Days ending on and
including the second Trading Day immediately preceding the Conversion Date,
provided that if the Company has delivered an Auto-Conversion Notice (as defined
in the Indenture) the Plus Cash Shares will be valued in the manner set forth
below. The number of Base Shares and any calculation or determination in respect
of the simple average of the daily volume-weighted average price of the Common
Stock shall be adjusted as provided for in Article 12 of the Indenture.
A-3
From and after delivery by the Company of any Auto-Conversion Notice with
respect to this Note or any portion of this Note, the Holder shall be entitled
to voluntarily convert this Note or any portion of the principal amount hereof
until the close of business, New York City time, on the last Business Day prior
to the Auto-Conversion Date, provided that, if in connection with any such
voluntary conversion the Company elects to pay the Plus Cash Amount in Plus Cash
Shares, the Plus Cash Shares delivered will be valued:
(1) if the Holder elects to voluntarily convert before the Auto-Conversion
Date (as defined below) and the Company has issued a Stock Auto-Conversion
Notice (as defined below), at the Stock Substitution Price (as defined below),
provided, however, that the Company may not pay the Plus Cash Amount in Plus
Cash Shares unless the daily volume-weighted average price for the ten (10)
Trading Days ending on and including the second Trading Day immediately
preceding the Conversion Date equals or exceeds the Threshold Price;
(2) if the Holder elects to voluntarily convert before the Auto-Conversion
Date and the Company has issued a Cash Auto-Conversion Notice (as defined
below), at 95% of the simple average of the daily volume-weighted average price
of the Common Stock for the ten (10) Trading Days ending on and including the
second Trading Day immediately preceding the Conversion Date, provided, however,
that the Company may not pay the Plus Cash Amount in Plus Cash Shares unless the
daily volume-weighted average price for the ten (10) Trading Days ending on and
including the second Trading Day immediately preceding the Conversion Date
equals or exceeds the Threshold Price; or
(3) if the Holder elects to voluntarily convert after the Auto-Conversion
Date, unless and until a subsequent Auto-Conversion Notice, if any, has been
delivered, at 95% of the simple average of the daily volume-weighted average
price of the Common Stock for the ten (10) Trading Days ending on and including
the second Trading Day immediately preceding the Conversion Date, provided,
however, that the Company may not pay the Plus Cash Amount in Plus Cash Shares
unless the daily volume-weighted average price for the ten (10) Trading Days
ending on and including the second Trading Day immediately preceding the
Conversion Date equals or exceeds the Threshold Price.
Holders shall receive the Conversion Consideration after surrender of this
Note, duly endorsed or assigned to the Company or in blank, to the Company at
its office or agency maintained for such purpose, accompanied by the conversion
notice hereon executed by the Holder hereof evidencing such Holder's election to
convert this Note, or if less than the entire principal amount hereof is to be
converted, the portion hereof to be converted, and, in case such surrender shall
be made during the period from the close of business on any Regular Record Date
to the opening of business on the corresponding Interest Payment Date (unless
this Note or the portion hereof being converted has been called for redemption
on a Redemption Date within such period between and including such Regular
Record Date and such Interest Payment Date), also accompanied by payment in
funds acceptable to the Company of an amount equal to the interest payable on
such Interest Payment Date on the principal amount of this Note then being
converted. Subject to the aforesaid requirement for payment of interest and, in
the case of a conversion after the close of business on
A-4
any Regular Record Date and on or before the corresponding Interest Payment
Date, to the right of the Holder of this Note (or any Predecessor Note) of
record at such Regular Record Date to receive an installment of interest (even
if the Note has been called for redemption on a Redemption Date within such
period), no payment or adjustment is to be made on conversion for interest
accrued hereon or for dividends on the Common Stock issued on conversion.
No fractions of shares or scrip representing fractions of shares will be
issued on voluntary conversion, but instead of any fractional interest the
Company shall pay a cash adjustment or a whole share in lieu of a fractional
share (determined with reference to the aggregate principal amount so
surrendered by such Holder) as provided in Article 12 of the Indenture. In
addition, the Indenture provides that in case of certain reclassifications,
consolidations, mergers, sales or transfers of assets or other transactions
pursuant to which the Common Stock is converted into the right to receive other
securities, cash or other property, the conversion privilege shall be
appropriately modified.
The Company may elect, at its sole option, from time to time as provided in
the Indenture, to automatically convert (an "Auto-Conversion") the Notes or any
portion of the principal amount thereof that is $1,000 or an integral multiple
of $1,000 into the Base Shares and the Plus Cash Amount, provided that the
Closing Price of the Company's Common Stock exceeds $[ ] per share (the
"Auto-Conversion Price") for any twenty (20) Trading Days during a any
consecutive twenty-five (25) day Trading Day period, ending within one (1)
Trading Day prior to the date of any notification for auto-conversion provided
by the Company (the "Auto-Conversion Notice"). In the event that the date on
which all or any portion of the Notes will be auto-converted (the
"Auto-Conversion Date") occurs prior to September [ ], 2005, the Company will
also pay or provide for the Make-Whole Payment (as defined in the Indenture) on
the Auto-Conversion Date.
If the Company, in respect of an Auto-Conversion, elects to pay all or any
part of the Plus Cash Amount in shares of its Common Stock, the Company must
first issue a notice stating a stock substitution reference price (the "Stock
Substitution Reference Price"), and if the Closing Price of the Company's Common
Stock is above that price for any twenty (20) Trading Days out of any
consecutive twenty-five (25) Trading Day period, then the subject Notes will be
Auto-Converted and the Plus Cash Amount will be paid in shares of Common Stock
valued at 95% of the simple average of the Closing Prices for the twenty (20)
days that the Closing Price of the Company's Common Stock exceeded the Stock
Substitution Reference Price, all in accordance with the provisions of Article
12 of the Indenture.
No fractions of shares or scrip representing fractions of shares will be
issued on Auto-Conversion, but instead of any fractional interest the Company
shall pay a cash adjustment or a whole share in lieu of a fractional share
(determined with reference to the aggregate principal amount so surrendered by
such Holder) as provided in Article 12 of the Indenture.
A-5
The Notes (other than those Notes that have been converted in accordance
with the terms of the Indenture) are subject to redemption at the option of the
Company upon not less than 30 days' or more than 60 days' notice by mail, as a
whole or from time to time in part, at any time after September [ ], 2005 at a
redemption price equal to 100% of the principal amount so redeemed together, in
the case of any such redemption, with accrued interest to (but excluding) the
Redemption Date (subject to the right of holders of record on the Regular Record
Date to receive interest on the related Interest Payment Date). Any redemption
of Notes must be in integral multiples of $1,000.
If fewer than all of the Notes are to be redeemed, the Trustee shall select
the Notes to be redeemed in principal amounts at maturity of $1,000 or integral
multiples thereof by lot, pro rata or by any other method that complies with the
requirements of any exchange on which the Notes are listed or quoted and that
the Trustee considers fair and appropriate. If a portion of a Holder's Notes is
selected for partial redemption and that holder converts a portion of those
Notes prior to the redemption, the converted portion shall be deemed, solely for
purposes of determining the aggregate principal amount of the Notes to be
redeemed by the Company, to be of the portion selected for redemption.
In certain circumstances involving a Repurchase Event, each Holder shall
have the right to require the Company to repurchase all or part of its Notes at
a repurchase price equal to 100% of the principal amount thereof, together with
accrued and unpaid interest through the Repurchase Date (subject to the right of
holders of record on the Regular Record Date to receive interest on the related
Interest Payment Date). The repurchase price shall be paid in cash.
The Notes do not have the benefit of any sinking fund.
In the event of redemption, conversion or repurchase of this Note in part
only, a new Note or Notes for the unredeemed, unconverted or unrepurchased
portion hereof shall be issued in the name of the Holder hereof upon the
cancellation hereof.
If an Event of Default shall occur and be continuing, the principal of all
the Notes may be declared due and payable in the manner and with the effect
provided in Article 4 of the Indenture.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Notes under the Indenture at any
time by the Company and the Trustee with (or, in the limited circumstances set
forth in the Indenture, without) the consent of the Holders of a majority in
aggregate principal amount of the Notes at the time Outstanding. The Indenture
also contains provisions permitting the Holders of a majority in aggregate
principal amount of the Notes at the time Outstanding, on behalf of the Holders
of all the Notes, to waive compliance by the Company with certain provisions of
the Indenture and certain past defaults under the Indenture and their
consequences. Any such consent or waiver by the Holder of this Note shall be
conclusive and binding upon such Holder and upon all future Holders of this Note
and of any Note issued upon the registration of transfer hereof or in exchange
herefor or in lieu hereof, whether or not notation of such consent or waiver is
made upon this Note.
A-6
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, premium, if any, and
interest on this Note at the times, place and rate, and in the coin or currency,
herein prescribed or to convert this Note as provided in the Indenture.
As provided in the Indenture and subject to certain limitations therein set
forth, the transfer of this Note is registrable in the Note Register, upon
surrender of this Note for registration of transfer at the Corporate Trust
Office duly endorsed by, or accompanied by a written instrument of transfer in
form satisfactory to the Company and the Note Registrar duly executed by, the
Holder hereof or his attorney duly authorized in writing, and thereupon one or
more new Notes, of authorized denominations and for the same aggregate principal
amount, will be issued to the designated transferee or transferees.
The Notes are issuable only in registered form without coupons in
denominations of $1,000 and any integral multiple thereof.
No service charge shall be made to a Holder for any such registration of
transfer or exchange, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Note for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name this Note is registered as the owner hereof for all
purposes and neither the Company, the Trustee nor any such agent shall be
affected by notice to the contrary.
Interest on this Note will accrue from the most recent date to which
interest has been paid, or if no interest has been paid, from September [ ],
2003. Interest shall be computed on the basis of a 360-day year of twelve 30-day
months. In the event that any date on which interest is payable on the Notes is
not a Business Day, then payment of interest payable on such date will be made
on the next succeeding day which is a Business Day (and without any interest or
other payment in respect of any such delay).
All terms used in this Note which are defined in the Indenture shall have
the meanings assigned to them in the Indenture.
THE INDENTURE AND THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF
LAWS PRINCIPLES.
A-7
FORM OF TRANSFER NOTICE
FOR VALUE RECEIVED, the undersigned registered holder hereby sell(s),
assign(s) and transfer(s) unto
Insert Taxpayer Identification No.
_________________________________________________________________________
Please print or typewrite name and address including zip code of assignee
_________________________________________________________________________
the within Note and all rights thereunder, hereby irrevocably constituting
and appointing _______________________________________ attorney to transfer
said Note on the books of the Company with full power of substitution
in the premises.
A-8
CONVERSION NOTICE
To: TRANSWITCH CORPORATION
The undersigned Holder of this Note hereby irrevocably exercises the option
to convert this Note, or the portion hereof (which is $1,000 or an integral
multiple thereof) below designated, at any time following the date of original
issuance thereof, into shares of Common Stock plus cash in accordance with the
terms of the Indenture referred to in this Note, and directs that the shares
issuable and deliverable upon conversion, together with any check in payment for
a fractional share and/or the plus cash amount, as applicable, and any Note
representing any unconverted principal amount hereof, be issued and delivered to
the registered owner hereof unless a different name has been provided 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 pay all transfer taxes
payable with respect thereto and is delivering herewith a certificate in proper
form certifying that the applicable restrictions on transfer have been complied
with. Any amount required to be paid by the undersigned on account of interest
accompanies this Note.
Dated: By:
---------------------
Signature of Registered Holder*
If shares or Notes are to be registered in Principal amount to be converted
the name of a Person other than the Holder, (if less than all): $___,000
please print such Person's name and address:
-------------------------------------------
Name
-------------------------------------------
Social Security or Taxpayer Identification
Number
-------------------------------------------
Street Address
-------------------------------------------
City, State and Zip Code
* 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 delivered, or unconverted Notes are to be issued, other than to and in the
name of the registered owner.
1
ELECTION OF HOLDER TO REQUIRE REPURCHASE
(1) Pursuant to Article 11 of the Indenture, the undersigned hereby elects
to have this Note repurchased by the Company.
(2) The undersigned hereby directs the Trustee or the Company to pay it or
______________ an amount in cash equal to 100% of the principal amount to be
repurchased (as set forth below), plus interest accrued to the Repurchase Date,
as provided in the Indenture.
Dated:
_____________________________
_____________________________
Signature(s)
Signature(s) must be guaranteed by an Eligible Guarantor Institution with
membership in an approved signature guarantee program pursuant to Rule 17Ad-15
under the Securities Exchange Act of 1934.
______________________________
Signature Guaranteed
Principal amount to be repurchased (at least
U.S. $1,000 or an integral multiple of $1,000
in excess thereof): ___________________
Remaining principal amount following such
repurchase (not less than U.S. $1,000):
__________________
NOTICE: The signature to the foregoing Election must correspond to the Name as
written upon the face of this Note in every particular, without alteration or
any change whatsoever.
