EXHIBIT 4.1
ALKERMES, INC.
as Issuer
AND
State Street Bank and Trust Company
as Trustee
INDENTURE
Dated as of December__, 2002
6.52% Convertible Senior Subordinated Notes due 2009
TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS..........................................................2
Section 1.1 Definitions.....................................................2
ARTICLE II ISSUE, DESCRIPTION, EXECUTION, REGISTRATION AND EXCHANGE OF NOTES...8
Section 2.1 Designation, Amount and Issue of Notes..........................8
Section 2.2 Form of Notes...................................................9
Section 2.3 Date and Denomination of Notes; Payments of Interest; Cash
Payments in Lieu of Fractional Shares.......................10
Section 2.4 Execution of Notes.............................................12
Section 2.5 Exchange and Registration of Transfer of Notes; Restrictions
on Transfer; Depositary.....................................12
Section 2.6 Mutilated, Destroyed, Lost or Stolen Notes.....................14
Section 2.7 Temporary Notes................................................15
Section 2.8 Cancellation of Notes Paid, Etc................................16
Section 2.9 CUSIP Numbers..................................................16
Section 2.10 Transfer of Interests in Global Notes.........................16
ARTICLE III REDEMPTION OF NOTES...............................................16
Section 3.1 Optional Redemption; Redemption Prices.........................16
Section 3.2 Notice of Redemption; Selection of Notes.......................16
Section 3.3 Payment of Notes Called for Redemption.........................18
Section 3.4 Conversion Arrangement on Call for Redemption..................18
ARTICLE IV SUBORDINATION OF NOTES.............................................19
Section 4.1 Agreement of Subordination.....................................19
Section 4.2 Payments to Noteholders........................................20
Section 4.3 Bankruptcy and Dissolution, Etc................................21
Section 4.4 Subrogation of Notes...........................................22
Section 4.5 Authorization by Noteholders...................................23
Section 4.6 Notice to Trustee..............................................23
Section 4.7 Trustee's Relation to Senior Indebtedness......................24
Section 4.8 No Impairment of Subordination.................................25
Section 4.9 Certain Conversions, Interest Payments and Repurchases in
Common Stock Deemed Payment.................................25
Section 4.10 Article Applicable to Paying Agents...........................25
ARTICLE V PARTICULAR COVENANTS OF THE COMPANY.................................26
Section 5.1 Payment of Principal, Premium and Interest.....................26
Section 5.2 Maintenance of Office or Agency................................26
Section 5.3 Appointments to Fill Vacancies in Trustee's Office.............27
Section 5.4 Provisions as to Paying Agent..................................27
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Section 5.5 Existence......................................................28
Section 5.6 Prohibition on Private Transactions Involving Existing Notes...28
Section 5.7 Stay, Extension and Usury Laws.................................28
Section 5.8 Compliance Certificate.........................................28
Section 5.9 Further Instruments and Acts...................................28
ARTICLE VI NOTEHOLDERS' LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE......29
Section 6.1 Noteholders' Lists.............................................29
Section 6.2 Preservation and Disclosure of Lists...........................29
Section 6.3 Reports by Trustee.............................................29
Section 6.4 Reports by Company.............................................30
ARTICLE VII DEFAULTS AND REMEDIES.............................................30
Section 7.1 Events of Default..............................................30
Section 7.2 Payments of Notes on Default; Suit Therefor....................33
Section 7.3 Application of Monies Collected by Trustee.....................34
Section 7.4 Proceedings by Noteholder......................................35
Section 7.5 Proceedings by Trustee.........................................36
Section 7.6 Remedies Cumulative and Continuing.............................36
Section 7.7 Direction of Proceedings and Waiver of Defaults by Majority of
Noteholders.................................................36
Section 7.8 Notice of Defaults.............................................37
Section 7.9 Undertaking to Pay Costs.......................................37
Section 7.10 Delay or Omission Not Waiver..................................37
ARTICLE VIII CONCERNING THE TRUSTEE...........................................37
Section 8.1 Duties and Responsibilities of Trustee.........................37
Section 8.2 Reliance on Documents, Opinions, Etc., except as otherwise
provided in Section 8.1.....................................38
Section 8.3 No Responsibility for Recitals, Etc............................40
Section 8.4 Trustee, Paying Agents, Conversion Agents or Registrar May Own
Notes.......................................................40
Section 8.5 Monies to Be Held in Trust.....................................40
Section 8.6 Compensation and Expenses of Trustee...........................40
Section 8.7 Officers' Certificate as Evidence..............................41
Section 8.8 Conflicting Interests of Trustee...............................41
Section 8.9 Eligibility of Trustee.........................................41
Section 8.10 Resignation or Removal of Trustee.............................41
Section 8.11 Acceptance by Successor Trustee...............................42
Section 8.12 Succession by Merger, Etc.....................................43
Section 8.13 Limitation on Rights of Trustee as Creditor...................43
ARTICLE IX CONCERNING THE NOTEHOLDERS.........................................44
Section 9.1 Action by Noteholders..........................................44
Section 9.2 Proof of Execution by Noteholders..............................44
Section 9.3 Who Are Deemed Absolute Owners.................................44
Section 9.4 Company-Owned Notes Disregarded................................44
Section 9.5 Revocation of Consents; Future Holders Bound...................45
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ARTICLE X NOTEHOLDERS' MEETINGS...............................................45
Section 10.1 Purpose of Meetings...........................................45
Section 10.2 Call of Meetings by Trustee...................................46
Section 10.3 Call of Meetings by Company or Noteholders....................46
Section 10.4 Qualifications for Voting.....................................46
Section 10.5 Regulations...................................................46
Section 10.6 Voting........................................................47
Section 10.7 No Delay of Rights by Meeting.................................47
ARTICLE XI SUPPLEMENTAL INDENTURES............................................48
Section 11.1 Supplemental Indentures Without Consent of Noteholders........48
Section 11.2 Supplemental Indentures With Consent of Noteholders...........49
Section 11.3 Effect of Supplemental Indentures.............................49
Section 11.4 Revocation and Effect of Consents.............................50
Section 11.5 Notation on Notes.............................................50
Section 11.6 Evidence of Compliance of Supplemental Indenture to Be
Furnished Trustee...........................................50
ARTICLE XII CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE.................51
Section 12.1 Company May Consolidate, Etc. on Certain Terms................51
Section 12.2 Successor Corporation to Be Substituted.......................51
Section 12.3 Opinion of Counsel to Be Given Trustee........................52
ARTICLE XIII SATISFACTION AND DISCHARGE OF INDENTURE..........................52
Section 13.1 Discharge of Indenture........................................52
Section 13.2 Deposited Monies to Be Held in Trust by Trustee...............53
Section 13.3 Paying Agent to Repay Monies Held.............................53
Section 13.4 Return of Unclaimed Monies....................................53
Section 13.5 Reinstatement.................................................53
ARTICLE XIV IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS...54
Section 14.1 Indenture and Notes Solely Corporate Obligations..............54
ARTICLE XV CONVERSION OF NOTES................................................54
Section 15.1 Right to Convert..............................................54
Section 15.2 Exercise of Conversion Privilege; Issuance of Common Stock on
Conversion; No Adjustment for Interest or Dividends.........55
Section 15.3 Cash Payments in Lieu of Fractional Shares....................56
Section 15.4 Conversion Price..............................................56
Section 15.5 Adjustment of Conversion Price................................56
Section 15.6 Effect of Reclassification, Consolidation, Merger or Sale.....66
Section 15.7 Taxes on Shares Issued........................................67
Section 15.8 Reservation of Shares; Shares to Be Fully Paid; Listing of
Common Stock................................................67
Section 15.9 Responsibility of Trustee.....................................67
Section 15.10 Notice to Holders Prior to Certain Actions...................68
Section 15.11 Automatic Conversion by the Company..........................68
Section 15.12 Voluntary Conversion During First Two Years..................69
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Section 15.13 Restrictions on Company's Ability to Pay any Make-Whole
Interest Payment in Common Stock............................70
Section 15.14 Notification to Trustee......................................71
ARTICLE XVI REPURCHASE UPON A REPURCHASE EVENT................................71
Section 16.1 Repurchase Right..............................................71
Section 16.2 Notices; Method of Exercising Repurchase Right, Etc...........72
Section 16.3 Conditions to the Company's Election to Pay the Repurchase
Price in Common Stock.......................................74
Section 16.4 Certain Definitions...........................................75
ARTICLE XVII MISCELLANEOUS PROVISIONS.........................................76
Section 17.1 Provisions Binding on Company's Successors....................76
Section 17.2 Official Acts by Successor Corporation........................76
Section 17.3 Addresses for Notices, Etc....................................76
SECTION 17.4 GOVERNING LAW.................................................77
Section 17.5 Evidence of Compliance with Conditions Precedent;
Certificates to Trustee.....................................77
Section 17.6 Legal Holidays................................................77
Section 17.7 No Note Interest Created......................................78
Section 17.8 Trust Indenture Act...........................................78
Section 17.9 Benefits of Indenture.........................................78
Section 17.10 Table of Contents, Headings, Etc.............................78
Section 17.11 Authenticating Agent.........................................78
Section 17.12 Execution in Counterparts....................................79
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INDENTURE dated as of December __, 2002 between Alkermes, Inc., a
Pennsylvania corporation as issuer (hereinafter sometimes called the "Company",
as more fully set forth in Section 1.1), and State Street Bank and Trust
Company, a trust company organized under the laws of the Commonwealth of
Massachusetts as trustee (hereinafter sometimes called the "Trustee", as more
fully set forth in Section 1.1).
W I T N E S S E T H:
WHEREAS, for its lawful corporate purposes, the Company has duly authorized
the issue of its 6.52% Convertible Senior Subordinated Notes due 2009
(hereinafter sometimes called the "Notes"), in an aggregate principal amount not
to exceed $165,000,000 and in order to provide the terms and conditions upon
which the Notes are to be authenticated, issued and delivered, the Company has
duly authorized the execution and delivery of this Indenture; and
WHEREAS, the Notes, the certificate of authentication to be borne by the
Notes, a form of assignment, a form of option to elect repayment upon a
Repurchase Event (as defined herein), a form of conversion notice and a
certificate of transfer to be borne by the Notes are to be substantially in the
forms hereinafter provided for; and
WHEREAS, all acts and things necessary to make the Notes, when executed by
the Company and authenticated and delivered by the Trustee or a duly authorized
authenticating agent, as in this Indenture provided, the valid, binding and
legal obligations of the Company, and to constitute these presents a valid
agreement according to its terms, have been done and performed, and the
execution of this Indenture and the issue hereunder of the Notes have in all
respects been duly authorized.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
That in order to declare the terms and conditions upon which the Notes are,
and are to be, authenticated, issued and delivered, and in consideration of the
premises and of the purchase and acceptance of the Notes by the holders thereof,
the Company covenants and agrees with the Trustee for the equal and
proportionate benefit of the respective holders from time to time of the Notes
(except as otherwise provided below), as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Definitions. The terms defined in this Section 1.1 (except as
herein otherwise expressly provided or unless the context otherwise requires)
for all purposes of this Indenture and of any indenture supplemental hereto
shall have the respective meanings specified in this Section 1.1. All other
terms used in this Indenture, which are defined in the Trust Indenture Act or
which are by reference therein defined in the Securities Act (except as herein
otherwise expressly provided or unless the context otherwise requires) shall
have the meanings assigned to such terms in said Trust Indenture Act and in said
Securities Act as in force at the date of the execution of this Indenture. The
words "herein," "hereof," "hereunder," and words of similar import refer to this
Indenture as a whole and not to any particular Article, Section or other
Subdivision. The terms defined in this Article include the plural as well as the
singular.
Affiliate: The term "Affiliate" of any specified person shall mean any
other person directly or indirectly controlling or controlled by or under direct
or indirect common control with such specified person. For the purposes of this
definition, "control," when used with respect to any specified person means the
power to direct or cause the direction of the management and policies of such
person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
Automatic Conversion: The term "Automatic Conversion" shall have the
meaning specified in Section 15.11(a).
Automatic Conversion Date: The term "Automatic Conversion Date" shall have
the meaning specified in Section 15.11(a).
Board of Directors: The term "Board of Directors" shall mean the Board of
Directors of the Company or a committee of such Board duly authorized to act for
it hereunder.
Board Resolution: The term "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, or duly authorized committee thereof (to
the extent permitted by applicable law), and to be in full force and effect on
the date of such certification, and delivered to the Trustee.
Business Day: The term "Business Day" means each Monday, Tuesday,
Wednesday, Thursday and Friday which is not a day on which the banking
institutions in The City of New York or the city in which the Corporate Trust
Office is located are authorized or obligated by law or executive order to close
or be closed.
Change in Control: The term "Change in Control" shall have the meaning
specified in Section 16.4.
close of business: The term "close of business" means 5:00 p.m. (New York
City time).
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Commission: The term "Commission" shall mean the Securities and Exchange
Commission.
Common Stock: The term "Common Stock" shall mean any stock of any class of
the Company which has no preference in respect of dividends or of amounts
payable in the event of any voluntary or involuntary liquidation, dissolution or
winding up of the Company and which is not subject to redemption by the Company.
Subject to the provisions of Section 15.6, however, shares issuable on
conversion of Notes shall include only shares of the class designated as common
stock of the Company at the date of this Indenture or shares of any class or
classes resulting from any reclassification or reclassifications thereof and
which have no preference in respect of dividends or of amounts payable in the
event of any voluntary or involuntary liquidation, dissolution or winding up of
the Company and which are not subject to redemption by the Company; provided
that if at any time there shall be more than one such resulting class, the
shares of each such class then so issuable shall be substantially in the
proportion which the total number of shares of such class resulting from all
such reclassifications bears to the total number of shares of all such classes
resulting from all such reclassifications.
Company: The term "Company" shall mean Alkermes, Inc., a Pennsylvania
corporation, and subject to the provisions of Article XII, shall include its
successors and assigns.
Company Notice: The term "Company Notice" shall have the meaning specified
in Section 16.2.
Conversion Price: The term "Conversion Price" shall have the meaning
specified in Section 15.4.
Corporate Trust Office: The term "Corporate Trust Office," or other similar
term, shall mean the office of the Trustee at which at any particular time its
corporate trust business shall be principally administered, which office is, at
the date as of which this Indenture is dated, located at 00 Xxxxxxxx, 00xx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Corporate Trust Department
(Alkermes, Inc. 6.52% Convertible Senior Subordinated Notes due 2009).
Custodian: The term "Custodian" means State Street Bank and Trust
Company with respect to the Notes in global form, or any successor entity
thereto.
default: The term "default" shall mean any event that is, or after notice
or passage of time, or both, would be, an Event of Default.
Defaulted Interest: The term "Defaulted Interest" shall have the meaning
specified in Section 2.3.
Depositary: The term "Depositary" means, with respect to the Notes issuable
or issued in whole or in part in global form, the person specified in Section
2.5(b) as the Depositary with respect to such Notes, until a successor shall
have been appointed and become such pursuant to the applicable provisions of
this Indenture, and thereafter, "Depositary" shall mean or include such
successor.
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Designated Senior Indebtedness: The term "Designated Senior Indebtedness"
means (i) the Company's obligations in respect of money now or hereafter
borrowed from Fleet National Bank or any commercial bank and (ii) the Company's
obligations under any particular Senior Indebtedness in which the instrument
creating or evidencing the same or the assumption or guarantee thereof (or
related agreements or documents to which the Company is a party) expressly
provides that such Senior Indebtedness shall be "Designated Senior Indebtedness"
for purposes of this Indenture (provided that such instrument, agreement or
other document may place limitations and conditions on the right of such Senior
Indebtedness to exercise the rights of Designated Senior Indebtedness).
Event of Default: The term "Event of Default" shall mean any event
specified in Section 7.1, continued for the period of time, if any, and after
the giving of notice, if any, therein designated.
Exchange Act: The term "Exchange Act" means the Securities Exchange Act of
1934, as amended, and the rules and regulations promulgated thereunder.
Existing Notes: The term "Existing Notes" means the 3 3/4% Convertible
Subordinated Notes due 2007.
Existing Notes Indenture: The term "Existing Notes Indenture" shall mean
that Indenture, dated as of February 18, 2000, between the Company and State
Street Bank and Trust Company.
Expiration Time: The term "Expiration Time" shall have the meaning
specified in Section 15.5(f)or 15.5(g).
Global Note: The term "Global Note" shall have the meaning specified in
Section 2.2(a).
Indebtedness: The term "Indebtedness" shall mean any obligations of, or
guaranteed or assumed by, the Company or any Significant Subsidiary for borrowed
money.
Indenture: The term "Indenture" shall mean this instrument as originally
executed or, if amended or supplemented as herein provided, as so amended or
supplemented.
Make-Whole Interest Payment: The term "Make-Whole Interest Payment" shall
mean the additional interest to be paid by the Company upon an Automatic
Conversion or upon a Voluntary Conversion, as the case may be, in an amount
equal to two full years of interest on the Notes, less any interest paid or
provided for on the Notes prior to such Automatic Conversion or Voluntary
Conversion, as the case may be. The Company may, at its option, pay the
Make-Whole Interest Payment in cash or in Common Stock. In the event that the
Company elects to pay the Make-Whole Interest Payment in Common Stock, the
shares of Common Stock will be valued at 90% of the average Closing Price (as
defined in Section 15.5(h)) for each of the five Trading Days ( as defined in
Section 15.5(h)) immediately preceding the second Trading Day prior to the
Automatic Conversion Date or Voluntary Conversion Date (as defined in Section
15.11 or Section 15.12, as applicable).
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Note or Notes: The terms "Note" or "Notes" shall mean any Note or Notes, as
the case may be, issued, authenticated and delivered under this Indenture.
Noteholder or holder: The terms "Noteholder" or "holder" as applied to any
Note, or other similar terms (but excluding the term "beneficial holder"), shall
mean any person in whose name at the time a particular Note is registered on the
Note register.
Note registrar: The term "Note registrar" shall have the meaning specified
in Section 2.5(a).
Note register: The term "Note register" shall have the meaning specified in
Section 2.5.
Officers' Certificate: The term "Officers' Certificate", when used with
respect to the Company, shall mean a certificate signed by (a) one of the
President, the Chief Executive Officer, any Executive or Senior Vice President
or any Vice President (whether or not designated by a number or numbers or word
added before or after the title "Vice President") and (b) by one of the
Treasurer or any Assistant Treasurer, Secretary or any Assistant Secretary or
Controller of the Company, which is delivered to the Trustee. Each such
certificate shall include the statements provided for in Section 17.5 if and to
the extent required by the provisions of such Section.
Opinion of Counsel: The term "Opinion of Counsel" shall mean an opinion in
writing signed by legal counsel, who may be an employee of or counsel to the
Company, or other counsel acceptable to the Trustee, which is delivered to the
Trustee. Each such opinion shall include the statements provided for in Section
17.5 if and to the extent required by the provisions of such Section.
outstanding: The term "outstanding," when used with reference to Notes,
shall, subject to the provisions of Section 9.4, mean, as of any particular
time, all Notes authenticated and delivered by the Trustee under this Indenture,
except:
(a) Notes theretofore canceled by the Trustee or delivered to the Trustee
for cancellation;
(b) Notes, or portions thereof, for the payment, or redemption of which
monies in the necessary amount shall have been deposited in trust with the
Trustee or with any paying agent (other than the Company) or shall have been set
aside and segregated in trust by the Company (if the Company shall act as its
own paying agent); provided that if such Notes are to be redeemed, as the case
may be, prior to the maturity thereof, notice of such redemption shall have been
given as provided in Section 3.2, or provision satisfactory to the Trustee shall
have been made for giving such notice;
(c) Notes in lieu of which, or in substitution for which, other Notes shall
have been authenticated and delivered pursuant to the terms of Section 2.6
unless proof satisfactory to the Trustee is presented that any such Notes are
held by bona fide holders in due course; and
(d) Notes converted into Common Stock pursuant to Article XV and Notes
deemed not outstanding pursuant to Section 3.2.
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Payment Blockage Notice: The term "Payment Blockage Notice" shall have the
meaning specified in Section 4.2(b).
Person: The term "Person" shall mean an individual, a corporation, a
limited liability company, an association, a partnership, an individual, a joint
venture, a joint stock company, a trust, an unincorporated organization or a
government or an agency or a political subdivision thereof.
Predecessor Note: The term "Predecessor Note" of any particular Note shall
mean every previous Note evidencing all or a portion of the same debt as that
evidenced by such particular Note; and, for the purposes of this definition, any
Note authenticated and delivered under Section 2.6 in lieu of a lost, destroyed
or stolen Note shall be deemed to evidence the same debt as the lost, destroyed
or stolen Note that it replaces.
Purchased Shares: The term "Purchased Shares" shall have the meaning
specified in Sections 15.5(f) and 15.5(g).
record date: The term "record date" shall have the meaning specified in
Section 2.3.
Repurchase Event: The term "Repurchase Event" shall have the meaning
specified in Section 16.4.
Repurchase Price: The term "Repurchase Price" has the meaning specified in
Section 16.1.
Responsible Officer: The term "Responsible Officer", when used with respect
to the Trustee, shall mean an officer of the Trustee in the Corporate Trust
Office assigned and duly authorized by the Trustee to administer its obligations
under this Indenture.
Securities Act: The term "Securities Act" means the Securities Act of 1933,
as amended, and the rules and regulations promulgated thereunder.
Senior Indebtedness: The term "Senior Indebtedness" means the principal of,
premium, if any, interest on (including any interest accruing after the filing
of a petition by or against the Company under any bankruptcy law, whether or not
allowed as a claim after such filing in any proceeding under such bankruptcy
law) and any other payment due pursuant to, any of the following, whether
outstanding on the date of this Indenture or thereafter incurred or created:
(a) all indebtedness of the Company for money borrowed that is evidenced by
notes, debentures, bonds or other securities (including, but not limited to,
those which are convertible or exchangeable for securities of the Company);
(b) all indebtedness of the Company due and owing with respect to letters
of credit, bank guarantees or bankers' acceptances (including, but not limited
to, reimbursement obligations with respect thereto);
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(c) all indebtedness or other obligations of the Company due and owing with
respect to interest rate and currency swap agreements, cap, floor and collar
agreements, currency spot and forward contracts and other similar agreements and
arrangements;
(d) all indebtedness consisting of commitment or standby fees due and
payable to lending institutions with respect to credit facilities or letters of
credit available to the Company;
(e) all obligations of the Company under leases required or permitted to be
capitalized under generally accepted accounting principles;
(f) all indebtedness or obligations of others of the kinds described in any
of the preceding clauses (a), (b), (c), (d) or (e) assumed by or guaranteed in
any manner by the Company or in effect guaranteed (directly or indirectly) by
the Company through an agreement to purchase, contingent or otherwise, and all
obligations of the Company under any such guarantee or other arrangements; and
(g) all renewals, extensions, refundings, deferrals, amendments or
modifications of indebtedness or obligations of the kinds described in any of
the preceding clauses (a), (b), (c), (d), (e) or (f);
unless in the case of any particular indebtedness, obligation, renewal,
extension, refunding, amendment, modification or supplement, the instrument or
other document creating or evidencing the same or the assumption or guarantee of
the same expressly provides that such indebtedness, obligation, renewal,
extension, refunding, amendment, modification or supplement is subordinate to,
or is not superior to, or is pari passu with, the Notes; provided that Senior
Indebtedness shall not include (i) any indebtedness of any kind of the Company
to any Subsidiary of the Company, a majority of the voting stock of which is
owned, directly or indirectly, by the Company, (ii) indebtedness for trade
payables or constituting the deferred purchase price of assets or services
incurred in the ordinary course of business, or (iii) the Notes, except as
provided herein with respect to the Existing Notes or the Existing Notes.
For the purposes of this definition of Senior Indebtedness under this
Indenture, the Notes issued under this Indenture shall be "Senior Indebtedness"
(as defined in the Existing Notes Indenture) for purposes of the Existing Notes
Indenture and the Existing Notes, and in furtherance thereof, the Company agrees
that nothing contained in this Indenture or in the definition of Senior
Indebtedness under this Indenture is meant to or shall be construed to expressly
provide that the Notes issued under this Indenture are not senior to the
Existing Notes.
Significant Subsidiary: The term "Significant Subsidiary" means, with
respect to any person, a Subsidiary of such person that would constitute a
"significant subsidiary" as such term is defined under Rule 1-02 of Regulation
S-X of the Commission.
Subsidiary: The term "Subsidiary" means a corporation more than 50% of the
outstanding voting stock of which is owned, directly or indirectly, by the
Company or by one or more other Subsidiaries, or by the Company and one or more
other Subsidiaries. For the purposes of this definition, "voting stock" means
stock which ordinarily has voting power for the
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election of directors, whether at all times or only so long as no senior
class of stock has such voting power by reason of any contingency.
Trading Day: The term "Trading Day" has the meaning specified in Section
15.5(h)(5).
Trigger Event: The term "Trigger Event" shall have the meaning specified in
Section 15.5(d).
Trust Indenture Act: The term "Trust Indenture Act" shall mean the Trust
Indenture Act of 1939, as amended, as it was in force at the date of execution
of this Indenture, except as provided in Sections 11.3 and 15.6; provided,
however, that in the event the Trust Indenture Act of 1939 is amended after the
date hereof, the term "Trust Indenture Act" shall mean, to the extent required
by such amendment, the Trust Indenture Act of 1939 as so amended.
Trustee: The term "Trustee" shall mean State Street Bank and Trust Company,
and its successors and any corporation resulting from or surviving any
consolidation or merger to which it or its successors may be a party and any
successor trustee at the time serving as successor trustee hereunder.
Voluntary Conversion: The term "Voluntary Conversion" shall have the
meaning specified in Section 15.12(a).
Voluntary Conversion Date: The term "Voluntary Conversion Date" shall have
the meaning specified in Section 15.12(a).
The definitions of certain other terms are as specified in Article XV and
Article XVI.
ARTICLE II
ISSUE, DESCRIPTION, EXECUTION, REGISTRATION AND EXCHANGE
OF NOTES
Section 2.1 Designation, Amount and Issue of Notes. The Notes shall be
designated as "6.52% Convertible Senior Subordinated Notes due 2009." Notes not
to exceed the aggregate principal amount of $165,000,000 upon the execution of
this Indenture, or (except pursuant to Sections 2.5, 2.6, 3.3, 15.2 and 16.2)
from time to time thereafter, may be executed by the Company and delivered to
the Trustee for authentication, and the Trustee shall thereupon authenticate and
deliver said Notes upon the written order of the Company, signed by the
Company's (a) President, Executive or Senior Vice President or any Vice
President (whether or not designated by a number or numbers or word or words
added before or after the title "Vice President") and (b) Treasurer or Assistant
Treasurer or its Secretary or any Assistant Secretary, without any further
action by the Company hereunder, provided, however, that said Notes may not be
executed, delivered or authenticated unless and until the Trustee shall have
received an Officers' Certificate and opinion of counsel.
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Section 2.2 Form of Notes. The Notes and the Trustee's certificate of
authentication to be borne by such Notes shall be substantially in the form set
forth in Exhibit A, which is incorporated in and made a part of this Indenture.
Any of the Notes may have such letters, numbers or other marks of
identification and such notations, legends and endorsements as the officers
executing the same may approve (execution thereof to be conclusive evidence of
such approval) and as are not inconsistent with the provisions of this
Indenture, or as may be required to comply with any law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any
securities exchange or automated quotation system on which the Notes may be
listed or designated for issuance, or to conform to usage.
(a) Global Notes. Notes shall be issued initially in the form of one or
more Global Notes in definitive, fully registered form without interest coupons,
which shall be deposited on behalf of the holders of the Notes represented
thereby with the Trustee, at its office at 00 Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx,
Xxx Xxxx 00000, Attention: Corporate Trust Department (Alkermes, Inc. 6.52%
Convertible Senior Subordinated Notes due 2009), as Custodian for the
Depositary, and registered in the name of the Depositary or a nominee of the
Depositary, duly executed by the Company and authenticated by the Trustee as
hereinafter provided. The aggregate principal amount of the Global Note may from
time to time be increased or decreased by adjustments made on the records of the
Trustee and the Depositary or its nominee as hereinafter provided.
Each Global Note shall represent such of the outstanding Notes as shall be
specified therein and each shall provide that it shall represent the aggregate
amount of outstanding Notes from time to time endorsed thereon and that the
aggregate amount of outstanding Notes represented thereby may from time to time
be reduced or increased, as appropriate, to reflect exchanges and redemptions.
Any endorsement of a Global Note to reflect the amount of any increase or
decrease in the amount of outstanding Notes represented thereby shall be made by
the Trustee or the Custodian, at the direction of the Trustee, in accordance
with instructions given by the holder thereof as required by Section 2.5 hereof.
(b) Book-Entry Provisions. This Section 2.2(b) shall apply only to the
Global Notes(s) deposited with or on behalf of the Depositary. The Company shall
execute and the Trustee shall, in accordance with this Section 2.2(b),
authenticate and deliver initially one or more Global Notes that (a) shall be
registered in the name of the Depositary or nominee of the Depositary and (b)
shall be delivered by the Trustee to such Depositary or pursuant to such
Depositary's instructions or held by the Trustee as Custodian for the Depositary
pursuant to a FAST Balance Certificate Agreement between the Depositary and the
Trustee.
Members of, or participants in, the Depositary ("Agent Members") shall have
no rights under this Indenture with respect to any Global Note held on their
behalf by the Depositary or by the Trustee as the Custodian of the Depositary or
under such Global Note, and the Depositary may be treated by the Company, the
Trustee and any agent of the Company or the Trustee as the absolute owner of
such Global Note for all purposes whatsoever. Notwithstanding the foregoing,
nothing herein shall prevent the Company, the Trustee or any agent of the
Company or the Trustee from giving effect to any written certification, proxy or
other authorization furnished by
9
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 Global Note.
(c) Certificated Notes. Except as provided in Section 2.5(c), owners of
beneficial interests in Global Notes will not be entitled to receive physical
delivery of certificated Notes.
Section 2.3 Date and Denomination of Notes; Payments of Interest; Cash
Payments in Lieu of Fractional Shares. The Notes shall be issuable in registered
form without coupons in denominations of $1,000 principal amount and integral
multiples thereof. Every Note shall be dated the date of its authentication, and
shall bear interest from the applicable date and accrued interest shall be
payable semiannually on June and December , of each year, commencing June , 2003
as specified on the face of the form of Note, attached as Exhibit A hereto.
The person in whose name any Note (or its Predecessor Note) is registered
at the close of business on any record date with respect to any interest payment
date (including any Note that is converted after the record date and on or
before the interest payment date) shall be entitled to receive the interest
payable on such interest payment date notwithstanding the cancellation of such
Note upon any transfer, exchange or conversion subsequent to the record date and
on or prior to such interest payment date; provided that, in the case of any
Note, or portion thereof, called for redemption pursuant to Article III on a
redemption date, or repurchased by the Company pursuant to Article XVI on a
repurchase date, during the period from the close of business on the record date
to the close of business on the Business Day next preceding the following
interest payment date, interest shall not be paid to the person in whose name
the Note, or portion thereof, is registered on the close of business on such
record date, and the Company shall have no obligation to pay interest on such
Note or portion thereof except to the extent required to be paid upon such
redemption or repurchase in accordance with Article III or Article XVI. Interest
may, at the option of the Company, be paid by check mailed to the address of
such person on the Note registry; provided that, with respect to any holder of
Notes with an aggregate principal amount equal to or in excess of $2,000,000, at
the request of such holder in writing to the Company, interest on such holder's
Notes shall be paid by wire transfer in immediately available funds in
accordance with the wire transfer instruction supplied by such holder from time
to time to the Trustee and paying agent (if different from Trustee) at least two
days prior to the applicable record date. The term "record date" with respect to
any interest payment date shall mean the June or December immediately
preceding said June or December , respectively.
Interest may be payable in cash or Common Stock at the Company's option. If
the Company elects to pay interest in Common Stock instead of cash, the shares
of Common Stock to be delivered will be valued at 90% of the average of the
Closing Price (as defined in Section 15.5(h)) for each of the five Trading Days
(as defined in Section 15.5(h)) immediately preceding the second Trading Day
prior to the applicable interest payment date. The Company shall provide the
holders with notice of its election to pay interest in Common Stock instead of
cash no later than the record date prior to such 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 interest, the Company, at its option, may make an adjustment
10
therefor 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. 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 day on which
accrued interest shall become payable and such Closing Price shall be determined
as provided in Section 15.5(h).
Interest on the Notes shall be computed on the basis of a 360-day year
comprised of twelve 30-day months.
Any interest on any Note which is payable, but is not punctually paid or
duly provided for, on any said June or December (herein called "Defaulted
Interest") shall forthwith cease to be payable to the Noteholder on the relevant
record date by virtue of his having been such Noteholder; and such Defaulted
Interest shall be paid by the Company, at its election in each case, as provided
in clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest to the
persons in whose names the Notes (or their respective Predecessor Notes) are
registered at the close of business on a special record date for the payment of
such Defaulted Interest, which shall be fixed in the following manner. The
Company shall notify the Trustee in writing of the amount of Defaulted Interest
to be paid on each Note and the date of the payment (which shall be not less
than twenty-five (25) days after the receipt by the Trustee of such notice,
unless the Trustee shall consent to an earlier date), and at the same time the
Company shall deposit with the Trustee an amount of money equal to the aggregate
amount to be paid in respect of such Defaulted Interest or shall make
arrangements satisfactory to the Trustee for such deposit prior to the date of
the proposed payment, such money when deposited to be held in trust for the
benefit of the persons entitled to such Defaulted Interest as in this clause
provided. Thereupon the Trustee shall fix a special record date for the payment
of such Defaulted Interest which shall be not more than fifteen (15) days and
not less than ten (10) days prior to the date of the proposed payment and not
less than ten (10) days after the receipt by the Trustee of the notice of the
proposed payment. The Trustee shall promptly notify the Company of such special
record date and, in the name and at the expense of the Company, shall cause
notice of the proposed payment of such Defaulted Interest and the special record
date therefor to be mailed, first-class postage prepaid, to each Noteholder as
of such special record date at his address as it appears in the Note register,
not less than ten (10) days prior to such special record date. Notice of the
proposed payment of such Defaulted Interest and the special record date therefor
having been so mailed, such Defaulted Interest shall be paid to the persons in
whose names the Notes (or their respective Predecessor Notes) were registered at
the close of business on such special record date and shall no longer be payable
pursuant to the following clause (2).
(2) The Company may make payment of any Defaulted Interest in any other
lawful manner not inconsistent with the requirements of any securities exchange
or automated quotation system on which the Notes may be listed or designated for
issuance, and upon such notice as may be required by such exchange or automated
quotation system, if, after notice given by the Company to the Trustee of the
proposed payment
11
pursuant to this clause, such manner of payment shall be deemed
practicable by the Trustee.
Section 2.4 Execution of Notes. The Notes shall be signed in the name and
on behalf of the Company by the facsimile signature of its President, its Chief
Executive Officer, any of its Executive or Senior Vice Presidents, or any of its
Vice Presidents (whether or not designated by a number or numbers or word or
words added before or after the title "Vice President") and attested by the
facsimile signature of its Secretary or any of its Assistant Secretaries (which
may be printed, engraved or otherwise reproduced thereon, by facsimile or
otherwise). Only such Notes as shall bear thereon a certificate of
authentication substantially in the form set forth on the form of Note attached
as Exhibit A hereto, manually executed by the Trustee (or an authenticating
agent appointed by the Trustee as provided by Section 17.11), shall be entitled
to the benefits of this Indenture or be valid or obligatory for any purpose.
Such certificate by the Trustee (or such an authenticating agent) upon any Note
executed by the Company shall be conclusive evidence that the Note so
authenticated has been duly authenticated and delivered hereunder and that the
holder is entitled to the benefits of this Indenture.
In case any officer of the Company who shall have signed any of the Notes
shall cease to be such officer before the Notes so signed shall have been
authenticated and delivered by the Trustee, or disposed of by the Company, such
Notes nevertheless may be authenticated and delivered or disposed of as though
the person who signed such Notes had not ceased to be such officer of the
Company; and any Note may be signed on behalf of the Company by such persons as,
at the actual date of the execution of such Note, shall be the proper officers
of the Company, although at the date of the execution of this Indenture any such
person was not such an officer.
Section 2.5 Exchange and Registration of Transfer of Notes; Restrictions on
Transfer; Depositary.
(a) The Company shall cause to be kept at the Corporate Trust Office a
register (the register maintained in such office and in any other office or
agency of the Company designated pursuant to Section 5.2 being herein sometimes
collectively referred to as the "Note register") in which, subject to such
reasonable regulations as it may prescribe, the Company shall provide for the
registration of Notes and of transfers of Notes. Such register shall be in
written form or in any form capable of being converted into written form within
a reasonable period of time. The Trustee is hereby appointed "Note registrar"
for the purpose of registering Notes and transfers of Notes as herein provided.
The Company may appoint one or more co-registrars in accordance with Section
5.2.
Upon surrender for registration of transfer of any Note to the Note
registrar or any co-registrar, and satisfaction of the requirements for such
transfer set forth in this Section 2.5, the Company shall execute, and the
Trustee shall authenticate and 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 and bearing such restrictive legends as may be
required by this Indenture.
Notes may be exchanged for other Notes of any authorized denominations and
of a like aggregate principal amount, upon surrender of the Notes to be
exchanged at any such office or
12
agency. Whenever any Notes are so surrendered for exchange, the Company shall
execute, and the Trustee shall authenticate and deliver, the Notes which the
Noteholder making the exchange is entitled to receive, bearing registration
numbers not contemporaneously outstanding.
All Notes presented or surrendered for registration of transfer or for
exchange shall (if so required by the Company, the Trustee, the Note registrar
or any co-registrar) be duly endorsed, or be accompanied by a written instrument
or instruments of transfer in form satisfactory to the Company and duly
executed, by the Noteholder thereof or his attorney-in-fact duly authorized in
writing.
No service charge shall be charged to the Noteholder for any exchange or
registration of transfer of Notes, but the Company may require payment of a sum
sufficient to cover any tax, assessments or other governmental charges that may
be imposed in connection therewith.
None of the Company, the Trustee, the Note registrar or any co-registrar
shall be required to exchange or register a transfer of (a) any Notes for a
period of fifteen (15) days next preceding any selection of Notes to be redeemed
or (b) any Notes called for redemption or, if a portion of any Note is selected
or called for redemption, such portion thereof selected or called for redemption
or (c) any Notes surrendered for conversion or, if a portion of any Note is
surrendered for conversion, such portion thereof surrendered for conversion or
(d) any Notes, or a portion of any Note, surrendered for repurchase (and not
withdrawn) in connection with a Repurchase Event.
All Notes issued upon any transfer or exchange of Notes in accordance with
this Indenture shall be the valid obligations of the Company, evidencing the
same debt, and entitled to the same benefits under this Indenture as the Notes
surrendered upon such registration of transfer or exchange.
(b) Restrictions on Transfer and Exchange of Global Notes. The transfer and
exchange of Global Notes or beneficial interests therein shall be effected
through the Depositary, in accordance with this Indenture and the procedures of
the Depositary therefor. Notwithstanding the aforementioned, a Global Note may
not be transferred as a whole except by the Depositary to a nominee of the
Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary.
The Depositary shall be a clearing agency registered under the Exchange
Act. The Company initially appoints The Depository Trust Company to act as
Depositary with respect to the Global Note. Initially, the Global Note shall be
issued to the Depositary, registered in the name of Cede & Co., as the nominee
of the Depositary, and deposited with the Trustee as custodian for Cede & Co.
(c) Authentication of Certificated Note in Absence of Depositary. If at any
time: the Depositary for the Global Note notifies the Company that it is
unwilling or unable to continue as Depositary for such Global Note and a
successor Depositary for the Global Note is not appointed by the Company within
90 days after delivery of such notice; or an Event of Default has occurred and
is continuing then the Company shall execute, and the Trustee shall, upon
receipt
13
of an authentication order in accordance with Section 2.4 hereof, authenticate
and deliver, certificated Notes in an aggregate principal amount equal to
the principal amount of the Global Note in exchange for such Global Note
and upon delivery of the Global Note to the Trustee the Global Note shall
be canceled.
If a Note in certificated form is issued in exchange for any portion of a
Global Note after the close of business on any record date at the office or
agency where such exchange occurs and before the opening of business at such
office or agency on the next succeeding interest payment date, interest will not
be payable on such interest payment date in respect of such certificated Note,
but will be payable on such interest payment date only with respect to the
exchanged portion of the Global Note in accordance with the provisions of this
Indenture.
Definitive Notes issued in exchange for all or a part of the Global Note
pursuant to this Section 2.5(c) shall be registered in such names and in such
authorized denominations as the Depositary, pursuant to instructions from its
direct or indirect participants or otherwise, shall instruct the Trustee. Upon
execution and authentication, the Trustee shall deliver such definitive Notes to
the persons in whose names such definitive Notes are so registered.
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. At any time
prior to such cancellation, if any interest in the Global Note is exchanged for
definitive Notes, redeemed, converted, canceled, repurchased or transferred to a
transferee who receives definitive Notes therefore or any definitive Note is
exchanged or transferred for part of the Global Note, the principal amount of
the Global Note shall, in accordance with the standing procedures and
instructions existing between the Depositary and the Custodian, be appropriately
reduced or increased, as the case may be, and an endorsement shall be made on
the Global Note, by the Trustee or the Custodian, at the direction of the
Trustee, to reflect such reduction or increase.
In the event of the occurrence of either of the events specified in this
Section, the Company will promptly make available to the Trustee a reasonable
supply of certificated Notes in definitive, fully registered form without
interest coupons.
Section 2.6 Mutilated, Destroyed, Lost or Stolen Notes. In case any Note
shall become mutilated or be destroyed, lost or stolen, the Company in its
discretion may execute, and upon its request the Trustee or an authenticating
agent appointed by the Trustee shall authenticate and deliver, a new Note,
bearing a number not contemporaneously outstanding, in exchange and substitution
for the mutilated Note, or in lieu of and in substitution for the Note so
destroyed, lost or stolen. In every case the applicant for a substituted Note
shall furnish to the Company, to the Trustee and, if applicable, to such
authenticating agent such security or indemnity as may be required by them to
save each of them harmless from any loss, liability, cost or expense caused by
or connected with such substitution, and, in every case of destruction, loss or
theft, the applicant shall also furnish to the Company, to the Trustee and, if
applicable, to such authenticating agent evidence to their satisfaction of the
destruction, loss or theft of such Note and of the ownership thereof.
14
The Trustee or such authenticating agent may authenticate any such
substituted Note and deliver the same upon the receipt of such security or
indemnity as the Trustee, the Company and, if applicable, such authenticating
agent may require. Upon the issuance of any substituted Note, the Company may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses connected
therewith. In case any Note which has matured or is about to mature or has been
called for redemption or is about to be converted into Common Stock shall become
mutilated or be destroyed, lost or stolen, the Company may, instead of issuing a
substitute Note, pay or authorize the payment of or convert or authorize the
conversion of the same (without surrender thereof except in the case of a
mutilated Note), as the case may be, if the applicant for such payment or
conversion shall furnish to the Company, to the Trustee and, if applicable, to
such authenticating agent such security or indemnity as may be required by them
to save each of them harmless for any loss, liability, cost or expense caused by
or connected with such substitution, and, in case of destruction, loss or theft,
evidence satisfactory to the Company, the Trustee and, if applicable, any paying
agent or conversion agent of the destruction, loss or theft of such Note and of
the ownership thereof.
Every substitute Note issued pursuant to the provisions of this Section 2.6
by virtue of the fact that any Note is destroyed, lost or stolen shall
constitute an additional contractual obligation of the Company, whether or not
the destroyed, lost or stolen Note shall be found at any time, and shall be
entitled to all the benefits of (but shall be subject to all the limitations set
forth in) this Indenture equally and proportionately with any and all other
Notes duly issued hereunder. To the extent permitted by law, all Notes shall be
held and owned upon the express condition that the foregoing provisions are
exclusive with respect to the replacement or payment or conversion of mutilated,
destroyed, lost or stolen Notes and shall preclude any and all other rights or
remedies notwithstanding any law or statute existing or hereafter enacted to the
contrary with respect to the replacement or payment or conversion of negotiable
instruments or other securities without their surrender.
Section 2.7 Temporary Notes. Pending the preparation of definitive Notes,
the Company may execute and the Trustee or an authenticating agent appointed by
the Trustee shall, upon written request of the Company, authenticate and deliver
temporary Notes (printed or lithographed). Temporary Notes shall be issuable in
any authorized denomination, and substantially in the form of the definitive
Notes but with such omissions, insertions and variations as may be appropriate
for temporary Notes, all as may be determined by the Company. Every such
temporary Note shall be executed by the Company and authenticated by the Trustee
or such authenticating agent upon the same conditions and in substantially the
same manner, and with the same effect, as the definitive Notes. Without
unreasonable delay the Company will execute and deliver to the Trustee or such
authenticating agent definitive Notes (other than in the case of Notes in global
form) and thereupon any or all temporary Notes (other than any the Global Note)
may be surrendered in exchange therefor, at each office or agency maintained by
the Company pursuant to Section 5.2 and the Trustee or such authenticating agent
shall authenticate and deliver in exchange for such temporary Notes an equal
aggregate principal amount of definitive Notes. Such exchange shall be made by
the Company at its own expense and without any charge therefor. Until so
exchanged, the temporary Notes shall in all respects be entitled to the same
benefits and subject to the same limitations under this Indenture as definitive
Notes authenticated and delivered hereunder.
15
Section 2.8 Cancellation of Notes Paid, Etc. All Notes surrendered for the
purpose of payment, redemption, repurchase, conversion, exchange or registration
of transfer, shall, if surrendered to the Company or any paying agent or any
Note registrar or any conversion agent, be surrendered to the Trustee and
promptly canceled by it, or, if surrendered to the Trustee, shall be promptly
canceled by it, and no Notes shall be issued in lieu thereof except as expressly
permitted by any of the provisions of this Indenture. Upon written instructions
of the Company, the Trustee shall destroy canceled Notes and, after such
destruction, shall deliver a certificate of such destruction to the Company. If
the Company shall acquire any of the Notes, such acquisition shall not operate
as a redemption or satisfaction of the indebtedness represented by such Notes
unless and until the same are delivered to the Trustee for cancellation.
Section 2.9 CUSIP Numbers. The Company in issuing the Notes may use "CUSIP"
numbers (if then generally in use), and, if so, the trustee shall use "CUSIP"
numbers in notices of redemption and Company Notices as a convenience to holders
of the Notes; provided, that any such notice may state that no representation is
made as to the correctness of such numbers either as printed on the Notes or as
contained in any notice of a redemption or Company Notice and that reliance may
be placed only on the other identification numbers printed on the Notes, and any
redemption or offer to purchase pursuant to Article XVI shall not be affected by
any defect in or omission of such numbers. The Company will promptly notify the
Trustee of any change in the "CUSIP" numbers.
Section 2.10 Transfer of Interests in Global Notes. The registered holder
of a Global Note may grant proxies and otherwise authorize any person, including
Agent Members and persons that may hold interests through Agent Members, to take
any action which a holder is entitled to take under this Indenture or the Note.
ARTICLE III
REDEMPTION OF NOTES
Section 3.1 Optional Redemption; Redemption Prices. The Company may, at its
option, redeem all or from time to time any part of the Notes on any date prior
to maturity, upon notice as set forth in Section 3.2, and at the optional
redemption prices set forth in the form of Note attached as Exhibit A hereto,
together with accrued interest, if any, to, but excluding, the date fixed for
redemption, provided, however, that no such redemption shall be effected before
January 1, 2005.
Section 3.2 Notice of Redemption; Selection of Notes. In case the Company
shall desire to exercise the right to redeem all or, as the case may be, any
part of the Notes pursuant to Section 3.1, it shall fix a date for redemption,
and it, or at its request (which must be received by the Trustee at least ten
(10) Business Days prior to the date the Trustee is requested to give notice as
described below unless a shorter period is agreed to by the Trustee), the
Trustee in the name of and at the expense of the Company, shall mail or cause to
be mailed a notice of such redemption at least twenty (20) Trading Days and not
more than sixty (60) Trading Days prior to the date fixed for a redemption to
the holders of Notes to be redeemed as a whole or in part at their last
addresses as the same appear on the Note register (provided that if the Company
shall
16
give such notice, it shall also give such notice, and notice of the Notes
to be redeemed, to the Trustee). Such mailing shall be by first class mail. The
notice if mailed in the manner herein provided shall be conclusively presumed to
have been duly given, whether or not the holder receives such notice. In any
case, failure to give such notice by mail or any defect in the notice to the
holder of any Note designated for redemption as a whole or in part shall not
affect the validity of the proceedings for the redemption of any other Note.
Each such notice of redemption shall specify the aggregate principal amount
of Notes to be redeemed, the date fixed for redemption, the redemption price at
which Notes are to be redeemed, the place or places of payment, that payment
will be made upon presentation and surrender of such Notes, that interest
accrued to, but excluding, the date fixed for redemption will be paid as
specified in said notice, and that on and after said date interest thereon or on
the portion thereof to be redeemed will cease to accrue. Such notice shall also
state the current Conversion Price and the date on which the right to convert
such Notes or portions thereof into Common Stock will expire. If fewer than all
the Notes are to be redeemed, the notice of redemption shall identify the Notes
to be redeemed. In case any Note is to be redeemed in part only, the notice of
redemption shall state the portion of the principal amount thereof to be
redeemed and shall state that on and after the date fixed for redemption, upon
surrender of such Note, a new Note or Notes in principal amount equal to the
unredeemed portion thereof will be issued.
On or prior to the redemption date specified in the notice of
redemption given as provided in this Section, the Company will deposit with the
Trustee or with one or more paying agents (or, if the Company is acting as its
own paying agent, set aside, segregate and hold in trust as provided in Section
5.4) an amount of money sufficient to redeem on the redemption date all the
Notes (or portions thereof) so called for redemption (other than those
theretofore surrendered for conversion into Common Stock) at the appropriate
redemption price, together with accrued interest to, but excluding, the date
fixed for redemption; provided that if such payment is made on the redemption
date it must be received by the Trustee or paying agent, as the case may be, by
10:00 a.m. New York City time, on such date. If any Note called for redemption
is converted pursuant hereto, any money deposited with the Trustee or any paying
agent or so segregated and held in trust for the redemption of such Note shall
be paid to the Company upon its request, or, if then held by the Company shall
be discharged from such trust.
If fewer than all the Notes are to be redeemed, the Company will give the
Trustee written notice in the form of an Officers' Certificate not fewer than
thirty-five (35) days (or such shorter period of time as may be acceptable to
the Trustee) prior to the redemption date as to the aggregate principal amount
of Notes to be redeemed. If fewer than all the Notes are to be redeemed, the
Trustee shall select the Notes or portions thereof to be redeemed (in principal
amounts of $1,000 or integral multiples thereof), by lot, or by a method the
Trustee considers fair and appropriate (as long as such method is not prohibited
by the rules of any United States national securities exchange or of an
established automated over-the-counter trading market in the United States on
which the Notes are then listed). If any Note selected for partial redemption is
converted in part after such selection, the converted portion of such Note shall
be deemed (so far as is possible) to be the portion to be selected for
redemption. The Notes (or portions thereof) so selected shall be deemed duly
selected for redemption for all purposes hereof, notwithstanding
17
that any such Note is converted as a whole or in part before the mailing of
the notice of redemption.
Upon any redemption of less than all Notes, the Company and the Trustee may
(but need not) treat as outstanding any Notes surrendered for conversion during
the period of fifteen (15) days next preceding the mailing of a notice of
redemption and may (but need not) treat as not outstanding any Note
authenticated and delivered during such period in exchange for the unconverted
portion of any Note converted in part during such period.
Section 3.3 Payment of Notes Called for Redemption. If notice of redemption
has been given as provided in Section 3.2, the Notes or portion of Notes with
respect to which such notice has been given shall, unless converted into Common
Stock pursuant to the terms hereof, become due and payable on the date and at
the place or places stated in such notice at the applicable redemption price,
together with interest accrued to, but excluding, the date fixed for redemption,
and on and after said date (unless the Company shall default in the payment of
such Notes at the redemption price, together with interest accrued to, but
excluding, said date) interest on the Notes or portion of Notes so called for
redemption shall cease to accrue and such Notes shall cease after the close of
business on the Business Day next preceding the date fixed for redemption to be
convertible into Common Stock and, except as provided in Sections 8.5 and 13.4,
to be entitled to any benefit or security under this Indenture, and the holders
thereof shall have no right in respect of such Notes except the right to receive
the redemption price thereof and unpaid interest to, but excluding, the date
fixed for redemption. On presentation and surrender of such Notes at a place of
payment in said notice specified, the said Notes or the specified portions
thereof to be redeemed shall be paid and redeemed by the Company at the
applicable redemption price, together with interest accrued thereon to, but
excluding, the date fixed for redemption; provided that, if the applicable
redemption date is an interest payment date, the semi-annual payment of interest
becoming due on such date shall be payable to the holders of such Notes
registered as such on the relevant record date subject to the terms and
provisions of Section 2.3 hereof.
Upon presentation of any Note redeemed in part only, the Company shall
execute and the Trustee shall authenticate and deliver to the holder thereof, at
the expense of the Company, a new Note or Notes, of authorized denominations, in
principal amount equal to the unredeemed portion of the Notes so presented.
Notwithstanding the foregoing, the Trustee shall not redeem any Notes or
mail any notice of optional redemption during the continuance of a default in
payment of interest or premium on the Notes or of any Event of Default of which,
in the case of any Event of Default other than under Section 7.1(a), (b) or (d),
a Responsible Officer of the Trustee has knowledge. If any Note called for
redemption shall not be so paid upon surrender thereof for redemption, the
principal and premium, if any, shall, until paid or duly provided for, bear
interest from the date fixed for redemption at the rate borne by the Note and
such Note shall remain convertible into Common Stock until the principal and
premium, if any, shall have been paid or duly provided for.
Section 3.4 Conversion Arrangement on Call for Redemption. In connection
with any redemption of Notes, the Company may arrange for the purchase and
conversion of any Notes not converted prior to the expiration of such conversion
right by an agreement with one or more
18
investment bankers or other purchasers to purchase such Notes by paying to the
Trustee in trust for the Noteholders, on or before the date fixed for
redemption, an amount not less than the applicable redemption price, together
with interest accrued to the date fixed for redemption, of such Notes.
Notwithstanding anything to the contrary contained in this Article III, the
obligation of the Company to pay the redemption price of such Notes, together
with interest accrued to, but excluding, the date fixed for redemption, shall be
deemed to be satisfied and discharged to the extent such amount is so paid by
such purchasers. If such an agreement is entered into, a copy of which,
certified as true and correct by the Secretary or Assistant Secretary of the
Company will be filed with the Trustee prior to the date fixed for redemption,
any Notes not duly surrendered for conversion by the holders thereof may, at the
option of the Company, be deemed, to the fullest extent permitted by law,
acquired by such purchasers from such holders and (notwithstanding anything to
the contrary contained in Article XV) surrendered by such purchasers for
conversion, all as of immediately prior to the close of business on the date
fixed for redemption (and the right to convert any such Notes shall be deemed to
have been extended through such time), subject to payment of the above amount as
aforesaid. At the direction of the Company, the Trustee shall hold and dispose
of any such amount paid to it in the same manner as it would monies deposited
with it by the Company for the redemption of Notes. Without the Trustee's prior
written consent, no arrangement between the Company and such purchasers for the
purchase and conversion of any Notes shall increase or otherwise affect any of
the powers, duties, responsibilities or obligations of the Trustee as set forth
in this Indenture, and the Company agrees to indemnify the Trustee from, and
hold it harmless against, any loss, liability or expense arising out of or in
connection with any such arrangement for the purchase and conversion of any
Notes between the Company and such purchasers, including the costs and expenses
incurred by the Trustee in the defense of any claim or liability arising out of
or in connection with the exercise or performance of any of its powers, duties,
responsibilities or obligations under this Indenture.
ARTICLE IV
SUBORDINATION OF NOTES
Section 4.1 Agreement of Subordination. The Company, for itself and its
successors, covenants and agrees, and each holder of Notes issued hereunder by
his acceptance thereof likewise covenants and agrees, that all Notes shall be
issued subject to the provisions of this Article IV; and each person holding any
Note, whether upon original issue or upon transfer, assignment or exchange
thereof, accepts and agrees to be bound by such provisions.
The payment of the principal of, premium, if any, and interest on all Notes
(including, but not limited to, the redemption price or repurchase price with
respect to the Notes to be redeemed or repurchased, as provided in this
Indenture) issued hereunder shall, to the extent and in the manner hereinafter
set forth, be subordinated to the prior payment in full, in cash or in such
other form of payment as may be acceptable to the holders of Senior
Indebtedness, of all Senior Indebtedness, whether outstanding at the date of
this Indenture or thereafter incurred or created.
19
The Notes issued under this Indenture shall be "Senior Indebtedness" (as
such term is defined in the Existing Notes Indenture) for purposes of the
Existing Notes Indenture and the Existing Notes, and in furtherance thereof, the
Company agrees that nothing contained in this Indenture or in the definition of
Senior Indebtedness under this Indenture is meant or shall be construed to
expressly provide that the Notes issued under this Indenture are not senior to
the Existing Notes.
No provision of this Article IV shall prevent the occurrence of any default
or Event of Default hereunder.
Section 4.2 Payments to Noteholders. No payment (including pursuant to any
redemption or repurchase of Notes) shall be made with respect to the principal
of, or premium, if any, or interest on the Notes, except payments and
distributions made by the Trustee as permitted by Section 4.6, if at the time of
such payment:
(a) a default in the payment of principal, premium, if any, or interest or
other payment due on Senior Indebtedness occurs and is continuing beyond any
applicable period of grace; or
(b) any other default occurs and is continuing with respect to Designated
Senior Indebtedness that then permits holders of the Designated Senior
Indebtedness as to which such default related to accelerate its maturity and the
Trustee and the Company receive a notice of such default (a "Payment Blockage
Notice") from a representative of Designated Senior Indebtedness or a holder of
Designated Senior Indebtedness or the Company.
The Company may and shall resume payments on the Notes (1) in the case of a
payment default, on the date upon which such default is cured or waived or
ceases to exist, and (2) in the case of a nonpayment default with respect to
Designated Senior Indebtedness, on the earlier of the date on which the
nonpayment default is cured or waived or ceases to exist or 179 days pass after
the date on which the applicable Payment Blockage Notice is received.
No new period of payment blockage may be commenced pursuant to a Payment
Blockage Notice unless (A) at least 365 days shall have elapsed since the first
day of effectiveness of the immediately prior Payment Blockage Notice and (B)
all scheduled payments of principal, premium, if any, and interest on the Notes
that have come due have been paid in full in cash, or in such other form of
payment as may be acceptable to the holders of the Notes or the Trustee or the
Noteholders shall not have begun proceedings to enforce the right of the
Noteholders to receive payment. No default (whether or not such default is on
the same issue of Designated Senior Indebtedness) that existed or was continuing
on the date of delivery of any Payment Blockage Notice to the Trustee shall be,
or be made, the basis for a subsequent Payment Blockage Notice.
In addition, in the event of any acceleration of the Notes because of an
Event of Default, no payment or distribution (including with respect to any
redemption or repurchase of the Notes) shall be made to the Trustee or any
holder of Notes with respect to the principal of, premium, if any, or interest
on the Notes, except payments and distributions made by the Trustee as permitted
by Section 4.6, until all Senior Indebtedness has been paid in full in cash or
other payment
20
satisfactory to the holders of Senior Indebtedness or such acceleration is
rescinded in accordance with the terms of this Indenture. If payment of the
Notes is accelerated because of an Event of Default, the Company shall promptly
notify holders of Senior Indebtedness of the acceleration.
Notwithstanding the foregoing, in the event that the Trustee or any holder
of Notes receives any payment or distribution of assets of the Company of any
kind in contravention of any term of this Indenture, whether in cash, property
or securities, including, without limitation, by way of setoff or otherwise,
before all Senior Indebtedness is paid in full, in cash or such other form of
payment as may be acceptable to the holders of Senior Indebtedness, then such
payment or distribution shall be held by the recipient or recipients in trust
for the benefit of, and shall immediately be paid over or delivered to, the
holders of Senior Indebtedness or their respective representative or
representatives, or to the trustee or trustees under any indenture pursuant to
which any instruments evidencing any Senior Indebtedness may have been issued,
as their respective interests may appear, as calculated by the Company, for
application to the payment of all Senior Indebtedness remaining unpaid to the
extent necessary to make payment in full, in cash or such other form of payment
as may be acceptable to the holders of Senior Indebtedness, of all Senior
Indebtedness remaining unpaid, after giving effect to any concurrent payment or
distribution, or provision therefor, to or for the holders of such Senior
Indebtedness.
Nothing in this Section 4.2 shall apply to claims of, or payments to, the
Trustee pursuant to Section 8.6. This Section 4.2 shall be subject to the
further provisions of Section 4.6.
Section 4.3 Bankruptcy and Dissolution, Etc. Upon any payment by the
Company, or distribution of assets of the Company of any kind or character,
whether in cash, property or securities, to creditors upon any dissolution,
winding-up, liquidation or reorganization of the Company, whether voluntary or
involuntary or in bankruptcy, insolvency, receivership or other proceedings, all
amounts due or to become due upon all Senior Indebtedness shall first be paid in
full, in cash or in such other form of payment as may be acceptable to the
holders of Senior Indebtedness, before any payment is made on account of the
principal or premium, if any, and interest on the Notes (except payments made
pursuant to Article XIII from monies deposited with the Trustee pursuant thereto
prior to the happening of such dissolution, winding-up, liquidation or
reorganization or bankruptcy, insolvency, receivership or other such
proceedings); and upon any such dissolution, winding-up, liquidation or
reorganization or bankruptcy, insolvency, receivership or other such
proceedings, any payment by the Company, or distribution of assets of the
Company of any kind or character, whether in cash, property or securities, to
which the holders of the Notes or the Trustee under this Indenture would be
entitled, except for the provisions of this Article IV, shall (except as
aforesaid) be paid by the Company or by any receiver, trustee in bankruptcy,
liquidating trustee, agent or other person making such payment or distribution,
or by the holders of the Notes or by the Trustee under this Indenture if
received by them or it, directly to the holders of Senior Indebtedness (pro rata
to such holders on the basis of the respective amounts of Senior Indebtedness
held by such holders, or as otherwise required by law or a court order) or their
respective representative or representatives, or to the trustee or trustees
under any indenture pursuant to which any instruments evidencing any Senior
Indebtedness may have been issued, as their respective interests may appear, to
the extent necessary to pay all Senior Indebtedness in full in cash or in such
other form of payment as may be acceptable to the holders of Senior Indebtedness
after giving effect to any concurrent payment
21
or distribution to or for the holders of Senior Indebtedness, before any payment
or distribution is made to the holders of the Notes or to the Trustee under this
Indenture.
Notwithstanding the foregoing, in the event that the Trustee or any holder
of Notes receives any payment or distribution of assets of the Company of any
kind in contravention of any term of this Indenture, whether in cash, property
or securities, including, without limitation, by way of setoff or otherwise,
before all Senior Indebtedness is paid in full, in cash or such other form of
payment as may be acceptable to the holders of Senior Indebtedness, then such
payment or distribution shall be held by the recipient or recipients in trust
for the benefit of, and shall immediately be paid over or delivered to, the
holders of Senior Indebtedness or their respective representative or
representatives, or to the trustee or trustees under any indenture pursuant to
which any instruments evidencing any Senior Indebtedness may have been issued,
as their respective interests may appear, as calculated by the Company, for
application to the payment of all Senior Indebtedness remaining unpaid to the
extent necessary to make payment in full, in cash or such other form of payment
as may be acceptable to the holders of Senior Indebtedness, of all Senior
Indebtedness remaining unpaid, after giving effect to any concurrent payment or
distribution, or provision therefor, to or for the holders of such Senior
Indebtedness.
For purposes of Section 4.2 hereof and this Section 4.3, the words "cash,
property or securities" shall not be deemed to include shares of stock of the
Company as reorganized or readjusted, or securities of the Company or any other
corporation provided for by a plan of reorganization or readjustment, the
payment of which is subordinated (at least to the extent provided in this
Article IV with respect to the Notes) to the payment of all Senior Indebtedness
which may at the time be outstanding; provided that (i) the Senior Indebtedness
is assumed by the new corporation, if any, resulting from such reorganization or
adjustment, and (ii) the rights of the holders of Senior Indebtedness (other
than leases which are not assumed by the Company or by the new corporation, as
the case may be) are not, without the consent of such holders, altered by such
reorganization or readjustment. The consolidation of the Company with, or the
merger of the Company into, another corporation or the liquidation or
dissolution of the Company following the conveyance or transfer of its property
as an entirety, or substantially as an entirety, to another corporation upon the
terms and conditions provided for in Article XII shall not be deemed a
dissolution, winding-up, liquidation or reorganization for the purposes of this
Section 4.3 if such other corporation shall, as a part of such consolidation,
merger, conveyance or transfer, comply with the conditions stated in Article
XII.
Nothing in this Section 4.3 shall apply to claims of, or payments to, the
Trustee under or pursuant to Section 8.6. This Section 4.3 shall be subject to
the further provisions of Section 4.6.
Section 4.4 Subrogation of Notes. Subject to the payment in full in cash or
in such other form of payment as may be acceptable to the holders of Senior
Indebtedness of all Senior Indebtedness, the rights of the holders of the Notes
shall be subrogated to the extent of the payments or distributions made to the
holders of such Senior Indebtedness pursuant to the provisions of this Article
IV (equally and ratably with the holders of all indebtedness of the Company
which by its express terms is subordinated to other indebtedness of the Company
to substantially the same extent as the Notes are subordinated and is entitled
to like rights of subrogation) to the rights of the holders of Senior
Indebtedness to receive payments or distributions of cash, property or
securities of the Company applicable to the Senior Indebtedness
22
until the principal of, and premium, if any, and interest on the Notes shall be
paid in full; and, for the purposes of such subrogation, no payments or
distributions to the holders of the Senior Indebtedness of any cash, property or
securities to which the holders of the Notes or the Trustee would be entitled
except for the provisions of this Article IV, and no payment over pursuant to
the provisions of this Article IV, to or for the benefit of the holders of
Senior Indebtedness by holders of the Notes or the Trustee, shall, as between
the Company, its creditors other than holders of Senior Indebtedness, and the
holders of the Notes, be deemed to be a payment by the Company to or on account
of the Senior Indebtedness; and no payments or distributions of cash, property
or securities to or for the benefit of the holders of the Notes pursuant to the
subrogation provisions of this Article IV, which would otherwise have been paid
to the holders of Senior Indebtedness shall be deemed to be a payment by the
Company to or for the account of the Notes. It is understood that the provisions
of this Article IV are and are intended solely for the purposes of defining the
relative rights of the holders of the Notes, on the one hand, and the holders of
the Senior Indebtedness, on the other hand.
Nothing contained in this Article IV or elsewhere in this Indenture or in
the Notes is intended to or shall impair, as among the Company, its creditors
other than the holders of Senior Indebtedness, and the holders of the Notes, the
obligation of the Company, which is absolute and unconditional, to pay to the
holders of the Notes the principal of, and premium, if any, and interest on the
Notes as and when the same shall become due and payable in accordance with their
terms, or is intended to or shall affect the relative rights of the holders of
the Notes and creditors of the Company other than the holders of the Senior
Indebtedness, nor shall anything herein or therein prevent the Trustee or the
holder of any Note from exercising all remedies otherwise permitted by
applicable law upon default under this Indenture, subject to the rights, if any,
under this Article IV of the holders of Senior Indebtedness in respect of cash,
property or securities of the Company received upon the exercise of any such
remedy.
Upon any payment or distribution of assets of the Company referred to in
this Article IV, the Trustee, subject to the provisions of Section 8.1, and the
holders of the Notes shall be entitled to rely upon any order or decree made by
any court of competent jurisdiction in which such bankruptcy, dissolution,
winding-up, liquidation or reorganization proceedings are pending, or a
certificate of the receiver, trustee in bankruptcy, liquidating trustee, agent
or other person making such payment or distribution, delivered to the Trustee or
to the holders of the Notes, for the purpose of ascertaining the persons
entitled to participate in such distribution, the holders of the Senior
Indebtedness and other indebtedness of the Company, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all other
facts pertinent thereto or to this Article IV.
Section 4.5 Authorization by Noteholders. Each holder of a Note by his
acceptance thereof authorizes and directs the Trustee on his behalf to take such
action as may be necessary or appropriate to effectuate the subordination
provided in this Article IV and appoints the Trustee his attorney-in-fact for
any and all such purposes.
Section 4.6 Notice to Trustee. The Company shall give written notice to the
Trustee of the issuance of any Designated Senior Indebtedness. In addition, the
Company shall give prompt written notice in the form of an Officers' Certificate
to a Responsible Officer of the Trustee and to any paying agent of any fact
known to the Company which would prohibit the making of any
23
payment of monies to or by the Trustee or any paying agent in respect of the
Notes pursuant to the provisions of this Article IV. Notwithstanding the
provisions of this Article IV or any other provision of this Indenture, the
Trustee shall not be charged with knowledge of the existence of any Senior
Indebtedness or of any default or Event of Default with respect to any Senior
Indebtedness or of any other facts which would prohibit the making of any
payment of monies to or by the Trustee in respect of the Notes pursuant to the
provisions of this Article IV, unless and until a Responsible Officer of the
Trustee shall have received written notice thereof at the Corporate Trust Office
from the Company (in the form of an Officers' Certificate) or a holder or
holders of Senior Indebtedness or from any trustee thereof who shall have been
certified by the Company or otherwise established to the reasonable satisfaction
of the Trustee to be such holder or trustee; and before the receipt of any such
written notice, the Trustee, subject to the provisions of Section 8.1, shall be
entitled in all respects to assume that no such facts exist; provided that if on
a date at least two (2) Business Days prior to the date upon which by the terms
hereof any such monies may become payable for any purpose (including, without
limitation, the payment of the principal of, or premium, if any, or interest on
any Note), the Trustee shall not have received with respect to such monies the
notice provided for in this Section 4.6, then, anything herein contained to the
contrary notwithstanding, the Trustee shall have full power and authority to
receive such monies and to apply the same to the purpose for which they were
received, and shall not be affected by any notice to the contrary which may be
received by it on or after such prior date.
Notwithstanding anything to the contrary hereinbefore set forth, nothing
shall prevent (a) any payment by the Company or the Trustee to the Noteholders
of amounts in connection with a redemption of Notes if (i) notice of such
redemption has been given to the Noteholders pursuant to Article III prior to
the receipt by the Trustee of written notice as aforesaid, and (ii) such notice
of redemption is given not earlier than sixty (60) days before the redemption
date, (b) any payment by the Company or the Trustee to the Noteholders of
amounts in connection with a repurchase of Notes if (i) notice of such
repurchase has been given pursuant to Article XVI prior to the receipt by the
Trustee of written notice as aforesaid, and (ii) such notice of repurchase is
given not earlier than forty (40) days before the repurchase date, or (c) any
payment by the Trustee to the Noteholders of monies deposited with it pursuant
to Section 13.1.
The Trustee, subject to the provisions of Section 8.1, shall be entitled to
rely on the delivery to it of a written notice by a person representing himself
to be a holder of Senior Indebtedness (or a trustee on behalf of such holder) to
establish that such notice has been given by a holder of Senior Indebtedness or
a trustee on behalf of any such holder or holders. In the event that the Trustee
determines in good faith that further evidence is required with respect to the
right of any person as a holder of Senior Indebtedness to participate in any
payment or distribution pursuant to this Article IV, the Trustee may request
such person to furnish evidence to the reasonable satisfaction of the Trustee as
to the amount of Senior Indebtedness held by such person, the extent to which
such person is entitled to participate in such payment or distribution and any
other facts pertinent to the rights of such person under this Article IV, and if
such evidence is not furnished the Trustee may defer any payment to such person
pending judicial determination as to the right of such person to receive such
payment.
Section 4.7 Trustee's Relation to Senior Indebtedness. The Trustee and any
agent of the Company or the Trustee in its individual capacity shall be entitled
to all the rights set forth in this
24
Article IV in respect of any Senior Indebtedness at any time held by it, to the
same extent as any other holder of Senior Indebtedness, and nothing in Section
8.13 or elsewhere in this Indenture shall deprive the Trustee or any such agent
of any of its rights as such holder. Nothing in this Article IV shall apply to
claims of, or payments to, the Trustee under or pursuant to Section 8.6.
With respect to the holders of Senior Indebtedness, the Trustee undertakes
to perform or to observe only such of its covenants and obligations as are
specifically set forth in this Article IV, and no implied covenants or
obligations with respect to the holders of Senior Indebtedness shall be read
into this Indenture against the Trustee. The Trustee shall not be deemed to owe
any fiduciary duty to the holders of Senior Indebtedness and, subject to the
provisions of Section 4.2 and Section 8.1, the Trustee shall not be liable to
any holder of Senior Indebtedness if it shall pay over or deliver to holders of
Notes, the Company or any other person money or assets to which any holder of
Senior Indebtedness shall be entitled by virtue of this Article IV or otherwise.
Section 4.8 No Impairment of Subordination. No right of any present or
future holder of any Senior Indebtedness to enforce subordination as herein
provided shall at any time in any way be prejudiced or impaired by any act or
failure to act on the part of the Company or by any act or failure to act, in
good faith, by any such holder, or by any noncompliance by the Company with the
terms, provisions and covenants of this Indenture, regardless of any knowledge
thereof which any such holder may have or otherwise be charged with.
Section 4.9 Certain Conversions, Interest Payments and Repurchases in
Common Stock Deemed Payment. For the purposes of this Article IV only, (1) the
issuance and delivery of junior securities upon (i) conversion of Notes in
accordance with Article XV, (ii) upon the payment of interest in accordance with
Section 2.3 or (iii) upon the payment of any Make-Whole Interest Payment in
Common Stock in accordance with Section 15.11 or Section 5.12, in each case in
the manner specified in such respective Sections, shall not be deemed to
constitute a payment or distribution on account of the principal of (or premium,
if any) or interest on Notes or on account of the purchase or other acquisition
of Notes, and will therefore not be subject to the subordination provisions of
this Article IV, and (2) the payment, issuance or delivery of cash (excluding
cash paid for fractional shares upon conversion of a Note, property or
securities (other than junior securities) upon conversion shall be deemed to
constitute payment on account of the principal of such Note. For the purposes of
this Section, the term "junior securities" means (a) shares of any stock of any
class of the Company and (b) securities of the Company which are subordinated in
right of payment to all Senior Indebtedness which may be outstanding at the time
of issuance or delivery of such securities to substantially the same extent as,
or to a greater extent than, the Notes are so subordinated as provided in this
Article VI. Nothing contained in this Article or elsewhere in this Indenture or
in the Notes is intended to or shall impair, as among the Company, its creditors
other than holders of Senior Indebtedness and the holders of the Notes, the
right, which is absolute and unconditional, of the holder of any Note to convert
such Note in accordance with Article XV.
Section 4.10 Article Applicable to Paying Agents. If at any time any paying
agent other than the Trustee shall have been appointed by the Company and be
then acting hereunder, the term Trustee as used in this Article IV shall (unless
the context shall otherwise require) be construed as extending to and including
such paying agent within its meaning as fully for all
25
intents and purposes as if such paying agent were named in this Article in
addition to or in place of the Trustee; provided, however, that Section 4.5
shall not apply to the Company or any Affiliate of the Company if it or such
Affiliate acts as paying agent.
ARTICLE V
PARTICULAR COVENANTS OF THE COMPANY
Section 5.1 Payment of Principal, Premium and Interest. The Company
covenants and agrees that it will duly and punctually pay or cause to be paid
the principal of and premium, if any, and interest on each of the Notes at the
places, at the respective times and in the manner provided herein and in the
Notes. Each installment of interest on the Notes due on any semi-annual interest
payment date may be paid by mailing checks for the interest payable to or upon
the written order of the holders of Notes entitled thereto as they shall appear
on the registry books of the Company, provided that, with respect to any holder
of Notes with an aggregate principal amount equal to or in excess of $2,000,000,
at the request of such holder in writing to the Company, interest on such
holder's Notes shall be paid by wire transfer in immediately available funds in
accordance with the wire transfer instructions supplied by such holder from time
to time to the Trustee and paying agent (if different from Trustee) at least two
days prior to the applicable record date.
Section 5.2 Maintenance of Office or Agency. The Company will maintain in
the Borough of Manhattan, The City of New York, an office or agency where the
Notes may be surrendered for registration of transfer or exchange or for
presentation for payment or for conversion, redemption or repurchase and where
notices and demands to or upon the Company in respect of the Notes and this
Indenture may be served. The Company will give prompt written notice to the
Trustee of the location, and any change in the location, of such office or
agency not designated or appointed by the Trustee. If at any time the Company
shall fail to maintain any such required office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the Corporate Trust Office or the
office or agency of the Trustee in the Borough of Manhattan, The City of New
York.
The Company may also from time to time designate one or more other offices
or agencies where the Notes may be presented or surrendered for any or all such
purposes and may from time to time rescind such designations; provided that no
such designation or rescission shall in any manner relieve the Company of its
obligation to maintain an office or agency in the Borough of Manhattan, The City
of New York, for such purposes. The Company will 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.
The Company hereby initially designates the Trustee as paying agent, Note
registrar, Custodian and conversion agent and the Corporate Trust Office and the
office or agency of the Trustee in the Borough of Manhattan, The City of New
York (which initially shall be State Street Bank and Trust Company, N.A., an
Affiliate of the Trustee located at 00 Xxxxxxxx, 00xx Xxxxx,
00
Xxx Xxxx, Xxx Xxxx 10006) as one such office or agency of the Company for each
of the aforesaid purposes.
So long as the Trustee is the Note registrar, the Trustee agrees to mail,
or cause to be mailed, the notices set forth in Section 8.10(a) and the third
paragraph of Section 8.11.
Section 5.3 Appointments to Fill Vacancies in Trustee's Office. The
Company, whenever necessary to avoid or fill a vacancy in the office of Trustee,
will appoint, in the manner provided in Section 8.10, a Trustee, so that there
shall at all times be a Trustee hereunder.
Section 5.4 Provisions as to Paying Agent.
(a) If the Company shall appoint a paying agent other than the Trustee or
if the Trustee shall appoint such a paying agent, it will cause such paying
agent to execute and deliver to the Trustee an instrument in which such agent
shall agree with the Trustee, subject to the provisions of this Section 5.4:
(1) that it will hold all sums held by it as such agent for the
payment of the principal of and premium, if any, or interest on the Notes
(whether such sums have been paid to it by the Company or by any other
obligor on the Notes) in trust for the benefit of the holders of the Notes;
(2) that it will give the Trustee notice of any failure by the Company
(or by any other obligor on the Notes) to make any payment of the principal
of and premium, if any, or interest on the Notes when the same shall be due
and payable; and
(3) that at any time during the continuance of an Event of Default,
upon request of the Trustee, it will forthwith pay to the Trustee all sums
so held in trust.
The Company shall, on or before each due date of the principal of, premium,
if any, or interest on the Notes, deposit with the paying agent a sum sufficient
to pay such principal, premium, if any, or interest, and (unless such paying
agent is the Trustee) the Company will promptly notify the Trustee of any
failure to take such action, provided that if such deposit is made on the due
date, such deposit must be received by the paying agent by 10:00 a.m., New York
City time, on such date.
(b) If the Company shall act as its own paying agent, it will, on or before
each due date of the principal of, premium, if any, or interest on the Notes,
set aside, segregate and hold in trust for the benefit of the holders of the
Notes a sum sufficient to pay such principal, premium, if any, or interest so
becoming due and will notify the Trustee of any failure to take such action and
of any failure by the Company (or any other obligor under the Notes) to make any
payment of the principal of, premium, if any, or interest on the Notes when the
same shall become due and payable.
(c) Anything in this Section 5.4 to the contrary notwithstanding, the
Company may, at any time, for the purpose of obtaining a satisfaction and
discharge of this Indenture, or for any other reason, pay or cause to be paid to
the Trustee all sums held in trust by the Company or any paying agent hereunder
as required by this Section 5.4, such sums to be held by the Trustee upon
27
the trusts herein contained and upon such payment by the Company or any paying
agent to the Trustee, the Company or such paying agent shall be released from
all further liability with respect to such sums.
(d) Anything in this Section 5.4 to the contrary notwithstanding, the
agreement to hold sums in trust as provided in this Section 5.4 is subject to
Sections 13.3 and 13.4.
Section 5.5 Existence. Subject to Article XII, the Company will do or cause
to be done all things necessary to preserve and keep in full force and effect
its corporate existence.
Section 5.6 Prohibition on Private Transactions Involving Existing Notes.
For a period of two years following the issuance of the Notes, and as long as
the Notes remain outstanding during such two-year period, the Company covenants
that it shall not engage in any private repurchases, debt-for-equity swaps, or
similar transactions with respect to the Existing Notes.
The holders of a majority in principal amount of the Notes may approve the
release or waiver of the Company's compliance with the prohibitions set forth in
this Section 5.6. Any such approval may be obtained in accordance with the
provisions of Section 9.1 hereof.
Section 5.7 Stay, Extension and Usury Laws. The Company covenants (to the
extent that it may lawfully do so) that it shall not at any time insist upon,
plead, or in any manner whatsoever claim or take the benefit or advantage of,
any stay, extension or usury law or other law which would prohibit or forgive
the Company from paying all or any portion of the principal of or interest on
the Notes as contemplated herein, wherever enacted, now or at any time hereafter
in force, or which may affect the covenants or the performance of this
Indenture; and the Company (to the extent it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and covenants that it
will not, by resort to any such law, hinder, delay or impede the execution of
any power herein granted to the Trustee, but will suffer and permit the
execution of every such power as though no such law has been enacted.
Section 5.8 Compliance Certificate. The Company shall deliver to the
Trustee within 120 days after the end of each fiscal year of the Company
(beginning with the fiscal year ending on March 31, 2003) an Officers'
Certificate stating whether or not to the best of their knowledge the signers
know of any default or Event of Default that occurred during such period. If
they do, such Officers' Certificate shall describe the default or Event of
Default and its status.
Section 5.9 Further Instruments and Acts. Upon request of the Trustee, the
Company will execute and deliver such further instruments and do such further
acts as may be reasonably necessary or proper to carry out more effectively the
purposes of this Indenture.
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ARTICLE VI
NOTEHOLDERS' LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE
Section 6.1 Noteholders' Lists. The Company covenants and agrees that it
will furnish or cause to be furnished to the Trustee, semi-annually, not more
than fifteen (15) days after each December and June in each year beginning
with June , 2003, and at such other times as the Trustee may request in
writing, within thirty (30) days after receipt by the Company of any such
request (or such lesser time as the Trustee may reasonably request in order to
enable it to timely provide any notice to be provided by it hereunder), a list
in such form as the Trustee may reasonably require of the names and addresses of
the holders of Notes as of a date not more than fifteen (15) days (or such other
date as the Trustee may reasonably request in order to so provide any such
notices) prior to the time such information is furnished, except that no such
list need be furnished so long as the Trustee is acting as Note registrar.
Section 6.2 Preservation and Disclosure of Lists.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, all information as to the names and addresses of the holders of
Notes contained in the most recent list furnished to it as provided in Section
6.1 or maintained by the Trustee in its capacity as Note registrar, if so
acting. The Trustee may destroy any list furnished to it as provided in Section
6.1 upon receipt of a new list so furnished.
(b) The rights of Noteholders to communicate with other holders of Notes
with respect to their rights under this Indenture or under the Notes and the
corresponding rights and duties of the Trustee, shall be as provided by the
Trust Indenture Act.
(c) Every Noteholder, by receiving and holding the same, agrees with the
Company and the Trustee that neither the Company nor the Trustee nor any agent
of either of them shall be held accountable by reason of any disclosure of
information as to names and addresses of holders of Notes made pursuant to the
Trust Indenture Act.
Section 6.3 Reports by Trustee.
(a) After this Indenture has been qualified under the Trust Indenture Act,
the Trustee shall transmit to holders of Notes such reports concerning the
Trustee and its actions under this Indenture as may be required pursuant to the
Trust Indenture Act at the times and in the manner provided pursuant thereto.
(b) A copy of such report shall, at the time of such transmission to
holders of Notes, be filed by the Trustee with each stock exchange and automated
quotation system upon which the Notes are listed and with the Company. The
Company will notify the Trustee when the
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Notes are listed on any stock exchange or automated quotation system and when
any such listing is discontinued.
Section 6.4 Reports by Company.
(a) After this Indenture has been qualified under the Trust Indenture Act,
the Company shall file with the Trustee and the Commission, and transmit to
holders of Notes, such information, documents and other reports and such
summaries thereof, as may be required pursuant to the Trust Indenture Act at the
times and in the manner provided pursuant to such Act; provided that any such
information, documents or reports required to be filed with the Commission
pursuant to Section 13 or 15(d) of the Exchange Act shall be filed with the
Trustee within 15 days after the same is so required to be filed with the
Commission.
(b) The Company will deliver to the Trustee (a) as soon as available and in
any event within ninety (90) days (or such shorter period as the information
specified in (a)(i) and (ii) is required to be filed with the Commission)) after
the end of each fiscal year of the Company (i) a consolidated balance sheet of
the Company and its Subsidiaries as of the end of such fiscal year and the
related consolidated statements of operations, stockholders' equity and cash
flows for such fiscal year, all reported on by an independent public accountant
of nationally recognized standing and (ii) a report containing a management's
discussion and analysis of the financial condition and results of operations and
a description of the business and properties of the Company and (b) as soon as
available and in any event within forty-five (45) days (or such shorter period
as the information specified in (b)(i) and (ii) is required to either be filed
with or furnished to the Commission) after the end of each of the first three
quarters of each fiscal year of the Company (i) an unaudited consolidated
interim financial statements as specified in Regulation S-X of the rules and
regulations of the Commission and (ii) a report containing a management's
discussion and analysis of the financial condition and results of operations of
the Company for such quarter; provided that the foregoing statements and reports
shall not be required for any fiscal year or quarter, as the case may be, with
respect to which the Company files or expects to file with the Trustee an annual
report or quarterly report, as the case may be, pursuant to the preceding
paragraph of this Section 6.4. Notwithstanding anything to the contrary in this
Indenture, the Company will provide to the trustee the report specified in this
Section. The Trustee shall have no liability as regards the substance of the
information provided by the Company or its agents pursuant to this Section 6.4.
ARTICLE VII
DEFAULTS AND REMEDIES
Section 7.1 Events of Default. In case one or more of the following Events
of Default (whatever the reason for such Event of Default and whether it shall
be voluntary or involuntary or be effected by operation of law or pursuant to
any judgment, decree or order of any court or any order, rule or regulation of
any administrative or governmental body) shall have occurred and be continuing:
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(a) default in the payment of the principal of and premium, if any, on any
of the Notes as and when the same shall become due and payable either at
maturity or in connection with any redemption, by declaration or otherwise,
whether or not such payment is prohibited by the provisions of Article IV; or
(b) default for thirty (30) days in the payment of any installment of
interest or upon any of the Notes as and when the same shall become due and
payable, whether or not such payment is prohibited by the provisions of Article
IV; or
(c) failure on the part of the Company duly to observe or perform any other
of the covenants on the part of the Company in the Notes or in this Indenture
(other than a covenant default in whose performance or whose breach is elsewhere
in this Section specifically dealt with) and the continuance of such failure for
a period of forty-five (45) days after the date on which written notice of such
failure, requiring the Company to remedy the same, shall have been given to the
Company by the Trustee, or to the Company and a Responsible Officer of the
Trustee by the holders of at least 25% in aggregate principal amount of the
outstanding Notes at the time outstanding determined in accordance with Section
9.4; or
(d) default in the payment of the Repurchase Price in respect of any Note
on the repurchase date therefor in accordance with the provisions of Article
XVI, whether or not such payment in cash of the Repurchase Price is prohibited
by the provisions of Article IV; or
(e) failure on the part of the Company to provide a written notice of a
Repurchase Event in accordance with Section 16.2; or
(f) failure on the part of the Company or any Significant Subsidiary to
make any payment at maturity, including any applicable grace period, in respect
of Indebtedness of, or guaranteed or assumed by, the Company or any Significant
Subsidiary, in a principal amount then outstanding in excess of U.S. $7,500,000,
and the continuance of such failure for a period of thirty (30) 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 not less than 25% in
aggregate principal amount of the Notes then outstanding, a written notice
specifying such default and requiring the Company to cause such default to be
cured or waived and stating that such notice is a "Notice of Default" hereunder;
or
(g) default on the part of the Company or any Significant Subsidiary with
respect to any Indebtedness of, or guaranteed or assumed by, the Company or any
Significant Subsidiary, which default results in the acceleration of
Indebtedness in a principal amount then outstanding in excess of U.S.$7,500,000,
and such Indebtedness shall not have been discharged or such acceleration shall
not have been rescinded or annulled for a period of thirty (30) 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 not less than 25% in
aggregate 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 default to be cured or waived or such acceleration
to be rescinded or annulled and stating that such notice is a "Notice of
Default" hereunder; or
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(h) the Company or any Significant Subsidiary shall commence a voluntary
case or other proceeding seeking liquidation, reorganization or other relief
with respect to itself or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, or shall consent to any such relief or to the
appointment of or taking possession by any such official in an involuntary case
or other proceeding commenced against it, or shall make a general assignment for
the benefit of creditors, or shall fail generally to pay its debts as they
become due; or
(i) an involuntary case or other proceeding shall be commenced against the
Company or any Significant Subsidiary seeking liquidation, reorganization or
other relief with respect to it or its debts under any bankruptcy, insolvency or
other similar law now or hereafter in effect or seeking the appointment of a
trustee, receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, and such involuntary case or other proceeding
shall remain undismissed and unstayed for a period of ninety (90) consecutive
days;
then, and in each and every such case (other than an Event of Default specified
in Section 7.1(h) or 7.1(i) with respect to the Company), unless the principal
of all of the Notes shall have already become due and payable, either the
Trustee or the holders of not less than 25% in aggregate principal amount of the
Notes then outstanding hereunder determined in accordance with Section 9.4, by
notice in writing to the Company (and to the Trustee if given by Noteholders),
may declare the principal of and premium, if any, on all the Notes and the
interest accrued thereon to be due and payable immediately, and upon any such
declaration the same shall become and shall be immediately due and payable,
anything in this Indenture or in the Notes contained to the contrary
notwithstanding. If an Event of Default specified in Section 7.1(h) or 7.1(i)
occurs and is continuing with respect to the Company, the principal of all the
Notes and the interest accrued thereon shall be immediately due and payable.
This provision, however, is subject to the conditions that if, at any time after
the principal of the Notes shall have been so declared due and payable, and
before any judgment or decree for the payment of the monies due shall have been
obtained or entered as hereinafter provided, the Company shall pay or shall
deposit with the Trustee a sum sufficient to pay all matured installments of
interest upon all Notes and the principal of and premium, if any, on any and all
Notes which shall have become due otherwise than by acceleration (with interest
on overdue installments of interest (to the extent that payment of such interest
is enforceable under applicable law) and on such principal and premium, if any,
at the rate borne by the Notes, to the date of such payment or deposit) and
amounts due to the Trustee pursuant to Section 8.6, and if any and all defaults
under this Indenture, other than the nonpayment of principal of and premium, if
any, and accrued interest on Notes which shall have become due by acceleration,
shall have been cured or waived pursuant to Section 7.7, then and in every such
case the holders of a majority in aggregate principal amount of the Notes then
outstanding, by written notice to the Company and to the Trustee, may waive all
defaults or Events of Default and rescind and annul such declaration and its
consequences; but no such waiver or rescission and annulment shall extend to or
shall affect any subsequent default or Event of Default, or shall impair any
right consequent thereon. The Company shall notify the Responsible Officer of
the Trustee, promptly upon becoming aware thereof, of any default or Event of
Default and shall deliver to the Trustee a statement specifying such default or
Event of Default and the action the Company has taken, is taking or proposes to
take with respect thereto.
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In case the Trustee shall have proceeded to enforce any right under
this Indenture and such proceedings shall have been discontinued or abandoned
because of such waiver or rescission and annulment or for any other reason or
shall have been determined adversely to the Trustee, then and in every such case
the Company, the holders of Notes, and the Trustee shall be restored
respectively to their several positions and rights hereunder, and all rights,
remedies and powers of the Company, the holders of Notes, and the Trustee shall
continue as though no such proceeding had been instituted.
Section 7.2 Payments of Notes on Default; Suit Therefor. The Company
covenants that (a) in case default shall be made in the payment by the Company
of any installment of interest upon any of the Notes as and when the same shall
become due and payable, and such default shall have continued for a period of
thirty (30) days, or (b) in case default shall be made in the payment of the
principal of or premium, if any, on any of the Notes as and when the same shall
have become due and payable, whether at maturity of the Notes or in connection
with any redemption or repurchase, by declaration under this Indenture or
otherwise, then, upon demand of the Trustee, the Company will pay to the
Trustee, for the benefit of the holders of the Notes, the whole amount that then
shall have become due and payable on all such Notes for principal and premium,
if any, or interest, or both, as the case may be, with interest upon the overdue
principal and premium, if any, and (to the extent that payment of such interest
is enforceable under applicable law) upon the overdue installments of interest
at the rate borne by the Notes; and, in addition thereto, such further amount as
shall be sufficient to cover the costs and expenses of collection, including
reasonable compensation to the Trustee, its agents, attorneys and counsel, and
any expenses or liabilities incurred by the Trustee hereunder other than through
its negligence or bad faith. Until such demand by the Trustee, the Company may
pay the principal of and premium, if any, and interest on the Notes to the
registered holders, whether or not the Notes are overdue.
In case the Company shall fail forthwith to pay such amounts upon such
demand, the Trustee, in its own name and as trustee of an express trust, shall
be entitled and empowered to institute any actions or proceedings at law or in
equity for the collection of the sums so due and unpaid, and may prosecute any
such action or proceeding to judgment or final decree, and may enforce any such
judgment or final decree against the Company or any other obligor on the Notes
and collect in the manner provided by law out of the property of the Company or
any other obligor on the Notes wherever situated the monies adjudged or decreed
to be payable.
In the case there shall be pending proceedings for the bankruptcy or for
the reorganization of the Company or any other obligor on the Notes under Title
11 of the United States Code, or any other applicable law, or in case a
receiver, assignee or trustee in bankruptcy or reorganization, liquidator,
sequestrator or similar official shall have been appointed for or taken
possession of the Company or such other obligor, the property of the Company or
such other obligor, or in the case of any other judicial proceedings relative to
the Company or such other obligor upon the Notes, or to the creditors or
property of the Company or such other obligor, the Trustee, irrespective of
whether the principal of the Notes shall then be due and payable as therein
expressed or by declaration or otherwise and irrespective of whether the Trustee
shall have made any demand pursuant to the provisions of this Section 7.2, shall
be entitled and empowered, by intervention in such proceedings or otherwise, to
file and prove a claim or claims for the whole amount of principal, premium, if
any, and interest owing and
33
unpaid in respect of the Notes, and, in case of any judicial proceedings, to
file such proofs of claim and other papers or documents and to take such other
actions as it may deem necessary or advisable in order to have the claims of the
Trustee and of the Noteholders allowed in such judicial proceedings relative to
the Company or any other obligor on the Notes, its or their creditors, or its or
their property, and to collect and receive any monies or other property payable
or deliverable on any such claims, and to distribute the same after the
deduction of any amounts due the Trustee under Section 8.6; and any receiver,
assignee or trustee in bankruptcy or reorganization, liquidator, custodian or
similar official is hereby authorized by each of the Noteholders to make such
payments to the Trustee, and, in the event that the Trustee shall consent to the
making of such payments directly to the Noteholders, to pay to the Trustee any
amount due it for reasonable compensation, expenses, advances and disbursements,
including agents and counsel fees incurred by it up to the date of such
distribution. To the extent that such payment of reasonable compensation,
expenses, advances and disbursements out of the estate in any such proceedings
shall be denied for any reason, payment of the same shall be secured by a lien
on, and shall be paid out of, any and all distributions, dividends, monies,
securities and other property which the holders of the Notes may be entitled to
receive in such proceedings, whether in liquidation or under any plan of
reorganization or arrangement or otherwise.
All rights of action and of asserting claims under this Indenture, or under
any of the Notes, may be enforced by the Trustee without the possession of any
of the Notes, or the production thereof on any trial or other proceeding
relative thereto, and any such suit or proceeding instituted by the Trustee
shall be brought in its own name as trustee of an express trust, and any
recovery of judgment shall, after provision for the payment of the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, be for the ratable benefit of the holders of the Notes.
In any proceedings brought by the Trustee (and in any proceedings involving
the interpretation of any provision of this Indenture to which the Trustee shall
be a party) the Trustee shall be held to represent all the holders of the Notes,
and it shall not be necessary to make any holders of the Notes parties to any
such proceedings.
Section 7.3 Application of Monies Collected by Trustee. Any monies
collected by the Trustee pursuant to this Article VII shall be applied in the
order following, at the date or dates fixed by the Trustee for the distribution
of such monies, upon presentation of the several Notes, and stamping thereon the
payment, if only partially paid, and upon surrender thereof, if fully paid:
First: To the payment of all amounts due the Trustee under Section
8.6;
Second: Subject to the provisions of Article IV, in case the principal
of the outstanding Notes shall not have become due and be unpaid, to the
payment of interest on the Notes in default in the order of the maturity of
the installments of such interest, with interest (to the extent that such
interest has been collected by the Trustee) upon the overdue installments
of interest at the rate borne by the Notes, such payments to be made
ratably to the persons entitled thereto;
34
Third: Subject to the provisions of Article IV, in case the principal
of the outstanding Notes shall have become due, by declaration or
otherwise, and be unpaid, to the payment of the whole amount then owing and
unpaid upon the Notes for principal and premium, if any, and interest, with
interest on the overdue principal and premium, if any, and (to the extent
that such interest has been collected by the Trustee) upon overdue
installments of interest at the rate borne by the Notes; and in case such
monies shall be insufficient to pay in full the whole amounts so due and
unpaid upon the Notes, then to the payment of such principal and premium,
if any, and interest without preference or priority of principal and
premium, if any, over interest, or of interest over principal and premium,
if any, or of any installment of interest over any other installment of
interest, or of any Note over any other Note, ratably to the aggregate of
such principal and premium, if any, and accrued and unpaid interest; and
Fourth: Subject to the provisions of Article IV, to the payment of the
remainder, if any, to the Company or any other person lawfully entitled
thereto.
Section 7.4 Proceedings by Noteholder. No holder of any Note shall have any
right by virtue of or by availing of any provision of this Indenture to
institute any suit, action or proceeding in equity or at law upon or under or
with respect to this Indenture, or for the appointment of a receiver, trustee,
liquidator, custodian or other similar official, or for any other remedy
hereunder, unless such holder previously shall have given to the Trustee written
notice of an Event of Default and of the continuance thereof, as hereinbefore
provided, and unless also the holders of not less than 25% in aggregate
principal amount of the Notes then outstanding shall have made written request
upon the Trustee to institute such action, suit or proceeding in its own name as
Trustee hereunder and shall have offered to the Trustee such indemnity as may be
reasonably satisfactory to the Trustee against the costs, expenses and
liabilities to be incurred therein or thereby, and the Trustee for sixty (60)
days after its receipt of such notice, request and offer of indemnity, shall
have neglected or refused to institute any such action, suit or proceeding and
no direction inconsistent with such written request shall have been given to the
Trustee pursuant to Section 7.7; it being understood and intended, and being
expressly covenanted by the taker and holder of every Note with every other
taker and holder and the Trustee, that no one or more holders of Notes shall
have any right in any manner whatever by virtue of or by availing of any
provision of this Indenture to affect, disturb or prejudice the rights of any
other holder of Notes, or to obtain or seek to obtain priority over or
preference to any other such holder, or to enforce any right under this
Indenture, except in the manner herein provided and for the equal, ratable and
common benefit of all holders of Notes (except as otherwise provided herein).
For the protection and enforcement of this Section 7.4, each and every
Noteholder and the Trustee shall be entitled to such relief as can be given
either at law or in equity.
Notwithstanding any other provision of this Indenture and any provision of
any Note, the right of any holder of any Note to receive payment of the
principal of and premium, if any, and interest on such Note, on or after the
respective due dates expressed in such Note, or to institute suit for the
enforcement of any such payment on or after such respective dates against the
Company shall not be impaired or affected without the consent of such holder.
Anything in this Indenture or the Notes to the contrary notwithstanding,
the holder of any Note, without the consent of either the Trustee or the holder
of any other Note, in his own behalf
35
and for his own benefit, may enforce, and may institute and maintain any
proceeding suitable to enforce, his rights of conversion as provided herein.
Section 7.5 Proceedings by Trustee. In case of an Event of Default the
Trustee may in its discretion proceed to protect and enforce the rights vested
in it by this Indenture by such appropriate judicial proceedings as the Trustee
shall deem most effectual to protect and enforce any of such rights, either by
suit in equity or by action at law or by proceeding in bankruptcy or otherwise,
whether for the specific enforcement of any covenant or agreement contained in
this Indenture or in aid of the exercise of any power granted in this Indenture,
or to enforce any other legal or equitable right vested in the Trustee by this
Indenture or by law.
Section 7.6 Remedies Cumulative and Continuing. Except as provided in the
last paragraph of Section 2.6, all powers and remedies given by this Article VII
to the Trustee or to the Noteholders shall, to the extent permitted by law, be
deemed cumulative and not exclusive of any thereof or of any other powers and
remedies available to the Trustee or the holders of the Notes, by judicial
proceedings or otherwise, to enforce the performance or observance of the
covenants and agreements contained in this Indenture, and no delay or omission
of the Trustee or of any holder of any of the Notes to exercise any right or
power accruing upon any default or Event of Default occurring and continuing as
aforesaid shall impair any such right or power, or shall be construed to be a
waiver of any such default or any acquiescence therein; and, subject to the
provisions of Section 7.4, every power and remedy given by this Article VII or
by law to the Trustee or to the Noteholders may be exercised from time to time,
and as often as shall be deemed expedient, by the Trustee or by the Noteholders.
Section 7.7 Direction of Proceedings and Waiver of Defaults by Majority of
Noteholders. The holders of a majority in aggregate principal amount of the
Notes at the time outstanding determined in accordance with Section 9.4 shall
have the right to direct the time, method, and place of conducting any
proceeding for any remedy available to the Trustee or exercising any trust or
power conferred on the Trustee; provided, however, that (a) such direction shall
not be in conflict with any rule of law or with this Indenture, and (b) the
Trustee may take any other action deemed proper by the Trustee which is not
inconsistent with such direction. The holders of a majority in aggregate
principal amount of the Notes at the time outstanding determined in accordance
with Section 9.4 may on behalf of the holders of all of the Notes waive any past
default or Event of Default hereunder and its consequences except (i) a default
in the payment of interest or premium, if any, on, or the principal of, the
Notes when due, (ii) a failure by the Company to convert any Notes into Common
Stock or (iii) a default in respect of a covenant or provisions hereof which
under Article XI cannot be modified or amended without the consent of the
holders of all Notes then outstanding. Upon any such waiver the Company, the
Trustee and the holders of the Notes shall be restored to their former positions
and rights hereunder; but no such waiver shall extend to any subsequent or other
default or Event of Default or impair any right consequent thereon. Whenever any
default or Event of Default hereunder shall have been waived as permitted by
this Section 7.7, said default or Event of Default shall for all purposes of the
Notes and this Indenture be deemed to have been cured and to be not continuing;
but no such waiver shall extend to any subsequent or other default or Event of
Default or impair any right consequent thereon.
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Section 7.8 Notice of Defaults. The Trustee shall, within ninety (90) days
after the occurrence of a default, mail to all Noteholders, as the names and
addresses of such holders appear upon the Note register, notice of all defaults
known to a Responsible Officer, unless such defaults shall have been cured or
waived before the giving of such notice; and provided that, except in the case
of default in the payment of the principal of, or premium, if any, or interest
on any of the Notes, including without limiting the generality of the foregoing
any default in the payment of any Repurchase Price or in the payment of any
amount due in connection with any redemption of Notes, then in any such event
the Trustee shall be protected in withholding such notice if and so long as a
trust committee of directors and/or Responsible Officers of the Trustee in good
faith determine that the withholding of such notice is in the best interests of
the Noteholders.
Section 7.9 Undertaking to Pay Costs. All parties to this Indenture agree,
and each holder of any Note by his acceptance thereof shall be deemed to have
agreed, that any court may, in its discretion, require, in any suit for the
enforcement of any right or remedy under this Indenture, or in any suit against
the Trustee for any action taken or omitted by it as Trustee, the filing by any
party litigant in such suit of an undertaking to pay the costs of such suit and
that such court may in its discretion assess reasonable costs, including
reasonable attorneys' fees, against any party litigant in such suit, having due
regard to the merits and good faith of the claims or defenses made by such party
litigant; provided that the provisions of this Section 7.9 shall not apply to
any suit instituted by the Trustee, to any suit instituted by any Noteholder, or
group of Noteholders, holding in the aggregate more than 10% in principal amount
of the Notes at the time outstanding determined in accordance with Section 9.4,
or to any suit instituted by any Noteholder for the enforcement of the payment
of the principal of or premium, if any, or interest on any Note (including, but
not limited to, the redemption price or repurchase price with respect to the
Notes being redeemed or repurchased as provided in this Indenture) on or after
the due date expressed in such Note or to any suit for the enforcement of the
right to convert any Note in accordance with the provisions of Article XV.
Section 7.10 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 any acquiescence therein. Every right and
remedy given by this Article or by law to the Trustee or to the holders of Notes
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.
ARTICLE VIII
CONCERNING THE TRUSTEE
Section 8.1 Duties and Responsibilities of Trustee. The Trustee, prior to
the occurrence of an Event of Default and after the curing or waiver of all
Events of Default which may have occurred, undertakes to perform such duties and
only such duties as are specifically set forth in this Indenture. In case an
Event of Default has occurred (which has not been cured or waived) the Trustee
shall exercise such of the rights and powers vested in it by this Indenture, and
use the
37
same degree of care and skill in their exercise, as a prudent person would
exercise or use under the circumstances in the conduct of such person's own
affairs.
No provision of this Indenture shall be construed to relieve the Trustee
from liability for its own negligent action, its own negligent failure to act or
its own willful misconduct, except that
(a) prior to the occurrence of an Event of Default and after the curing or
waiving of all Events of Default which may have occurred:
(1) the duties and obligations of the Trustee shall be determined
solely by the express provisions of this Indenture and, after it has been
qualified thereunder, the Trust Indenture Act, and the Trustee shall not be
liable except for the performance of such duties and obligations as are
specifically set forth in this Indenture and no implied covenants or
obligations shall be read into this Indenture and the Trust Indenture Act
against the Trustee; and
(2) in the absence of bad faith and willful misconduct on the part of
the Trustee, the Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein, upon any
certificates or opinions furnished to the Trustee and conforming to the
requirements of this Indenture; but, in the case of any such certificates
or opinions which by any provisions hereof are specifically required to be
furnished to the Trustee, the Trustee shall be under a duty to examine the
same to determine whether or not they conform to the requirements of this
Indenture;
(b) the Trustee shall not be liable for any error of judgment made in good
faith by a Responsible Officer or Officers of the Trustee, unless it shall be
established that the Trustee was negligent in ascertaining the pertinent facts;
(c) the Trustee shall not be liable to any Noteholder with respect to any
action taken or omitted to be taken by it in good faith in accordance with the
direction of the holders of not less than a majority in principal amount of the
Notes at the time outstanding determined as provided in Section 9.4 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; and
(d) whether or not therein provided, every provision of this Indenture
relating to the conduct or affecting the liability of, or affording protection
to, the Trustee shall be subject to the provisions of this Section.
None of the provisions contained in this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur personal financial
liability in the performance of any of its duties or in the exercise of any of
its rights or powers, if there is reasonable ground for believing that the
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.
Section 8.2 Reliance on Documents, Opinions, Etc., except as otherwise
provided in Section 8.1:
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(a) the Trustee may rely and shall be protected in acting upon any
resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, order, bond, note, coupon or other paper or document believed
by it in good faith to be genuine and to have been signed or presented by the
proper party or parties;
(b) any request, direction, order or demand of the Company mentioned herein
shall be sufficiently evidenced by an Officers' Certificate (unless other
evidence in respect thereof be herein specifically prescribed); and any
resolution of the Board of Directors may be evidenced to the Trustee by a copy
thereof certified by the Secretary or an Assistant Secretary of the Company;
(c) the Trustee may consult with counsel and any advice of such counsel or
Opinion of Counsel shall be full and complete authorization and protection in
respect of any action taken or omitted by it hereunder in good faith and in
accordance with such advice or Opinion of Counsel;
(d) the Trustee shall be under no obligation to exercise any of the rights
or powers vested in it by this Indenture at the request, order or direction of
any of the Noteholders pursuant to the provisions of this Indenture, unless such
Noteholders shall have offered to the Trustee reasonable security or indemnity
against the costs, expenses and liabilities which may be incurred therein or
thereby;
(e) 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 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; provided, however, that if
the payment within a reasonable time to the Trustee of the costs, expenses or
liabilities likely to be incurred by it in the making of such investigation is,
in the opinion of the Trustee, not reasonably assured to the Trustee by the
security afforded to it by the terms of this Indenture, the Trustee may require
indemnity reasonably satisfactory to the Trustee from the Noteholders against
such expenses or liability as a condition to so proceeding; the reasonable
expenses of every such examination shall be paid by the Company or, if paid by
the Trustee or any predecessor Trustee, shall be repaid by the Company upon
demand; and
(f) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed by it with due care
hereunder.
In no event shall the Trustee be liable for any consequential loss or damage of
any kind whatsoever (including but not limited to lost profits), even if the
Trustee has been advised of the likelihood of such loss or damage and regardless
of the form of action other than through the Trustee's willful misconduct or
gross negligence.
39
Section 8.3 No Responsibility for Recitals, Etc. The recitals contained
herein and in the Notes (except in the Trustee's certificate of authentication)
shall be taken as the statements of the Company, and the Trustee assumes no
responsibility for the correctness of the same. The Trustee makes no
representations as to the validity or sufficiency of this Indenture or of the
Notes. The Trustee shall not be accountable for the use or application by the
Company of any Notes or the proceeds of any Notes authenticated and delivered by
the Trustee in conformity with the provisions of this Indenture.
Section 8.4 Trustee, Paying Agents, Conversion Agents or Registrar May Own
Notes. The Trustee, any paying agent, any conversion agent or Note registrar, in
its individual or any other capacity, may become the owner or pledgee of Notes
with the same rights it would have if it were not Trustee, paying agent,
conversion agent or Note registrar.
Section 8.5 Monies to Be Held in Trust. Subject to the provisions of
Section 13.4, all monies received by the Trustee shall, until used or applied as
herein provided, be held in trust for the purposes for which they were received.
Money held by the Trustee in trust hereunder need not be segregated from other
funds except to the extent required by law. The Trustee shall be under no
liability for interest on any money received by it hereunder except as may be
agreed from time to time by the Company and the Trustee.
Section 8.6 Compensation and Expenses of Trustee. The Company covenants and
agrees to pay to the Trustee from time to time, and the Trustee shall be
entitled to, reasonable compensation for all services rendered by it hereunder
in any capacity (which shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust), and the Company will pay or
reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances reasonably incurred or made by the Trustee in
accordance with any of the provisions of this Indenture (including the
reasonable compensation and the expenses and disbursements of its agents and
counsel and of all persons not regularly in its employ) except any such expense,
disbursement or advance as may arise from its negligence, willful misconduct or
bad faith. The Company also covenants to indemnify the Trustee in any capacity
under this Indenture and its agents and any authenticating agent for, and to
hold them harmless against, any loss, liability or expense incurred without
negligence, willful misconduct or bad faith on the part of the Trustee or such
agent or authenticating agent, as the case may be, and arising out of or in
connection with the acceptance or administration of this trust or in any other
capacity hereunder, including the costs and expenses of defending themselves
against any claim of liability in the premises. The obligations of the Company
under this Section 8.6 to compensate or indemnify the Trustee and to pay or
reimburse the Trustee for expenses, disbursements and advances shall be secured
by a lien prior to that of the Notes upon all property and funds held or
collected by the Trustee as such, except, subject to the effect of Sections 4.3
and 7.6, funds held in trust herewith for the benefit of the holders of
particular Notes prior to the date of the accrual of such unpaid compensation or
indemnifiable claim. The obligation of the Company under this Section shall
survive the satisfaction and discharge of this Indenture. The indemnification
provided in this Section 8.6 shall extend to the officers, directors, agents and
employees of the Trustee.
When the Trustee and its agents and any authenticating agent incur expenses
or render services after an Event of Default specified in Section 7.1(h) or (i)
occurs, the expenses and the
40
compensation for the services are intended to constitute expenses of
administration under any bankruptcy, insolvency or similar laws.
Section 8.7 Officers' Certificate as Evidence. Except as otherwise provided
in Section 8.1, whenever in the administration of the provisions of this
Indenture the Trustee shall deem it necessary or desirable that a matter be
proved or established prior to taking or omitting any action hereunder, such
matter (unless other evidence in respect thereof be herein specifically
prescribed) may, in the absence of negligence, willful misconduct, recklessness
and bad faith on the part of the Trustee, be deemed to be conclusively proved
and established by an Officers' Certificate delivered to the Trustee, and such
Officers' Certificate, in the absence of negligence, willful misconduct,
recklessness and bad faith on the part of the Trustee, shall be full warrant to
the Trustee for any action taken or omitted by it under the provisions of this
Indenture upon the faith thereof.
Section 8.8 Conflicting Interests of Trustee. After qualification under the
Trust Indenture Act, if the Trustee has or shall acquire a conflicting interest
within the meaning of the Trust Indenture Act, the Trustee shall either
eliminate such interest or resign, to the extent and in the manner provided by,
and subject to the provisions of, the Trust Indenture Act and this Indenture.
Section 8.9 Eligibility of Trustee. There shall at all times be a Trustee
hereunder which shall be a person that is eligible pursuant to the Trust
Indenture Act to act as such and has a combined capital and surplus (together
with its corporate parent) of at least $50,000,000. If such person publishes
reports of condition at least annually, pursuant to law or to the requirements
of any supervising or examining authority, then for the purposes of this
Section, the combined capital and surplus of such person shall be deemed to be
its combined capital and surplus as set forth in its most recent report of
condition so published. If at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section, it shall resign immediately in
the manner and with the effect hereinafter specified in this Article.
Section 8.10 Resignation or Removal of Trustee.
(a) The Trustee may at any time resign by giving written notice of such
resignation to the Company and by mailing notice thereof to the holders of Notes
at their addresses as they shall appear on the Note register. Upon receiving
such notice of resignation, the Company shall promptly appoint a successor
trustee by written instrument, in duplicate, executed by order of the Board of
Directors, one copy of which instrument shall be delivered to the resigning
Trustee and one copy to the successor trustee. If no successor trustee shall
have been so appointed and have accepted appointment sixty (60) days after the
mailing of such notice of resignation to the Noteholders, the resigning Trustee
may petition any court of competent jurisdiction for the appointment of a
successor trustee, or any Noteholder who has been a bona fide holder of a Note
or Notes for at least six months may, subject to the provisions of Section 7.9,
on behalf of himself and all others similarly situated, petition any such court
for the appointment of a successor trustee. Such court may thereupon, after such
notice, if any, as it may deem proper and prescribe, appoint a successor
trustee.
(b) In case at any time any of the following shall occur:
41
(1) the Trustee shall fail to comply with Section 8.8 within a
reasonable time after written request therefor by the Company or by any
Noteholder who has been a bona fide holder of a Note or Notes for at least
six months, or
(2) the Trustee shall cease to be eligible in accordance with the
provisions of Section 8.9 and shall fail to resign after written request
therefor by the Company or by any such Noteholder, or
(3) the Trustee shall become incapable of acting, or shall be adjudged
a bankrupt or insolvent, or a receiver of the Trustee or of its property
shall be appointed, or any public officer shall take charge or control of
the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, the Company may by a Board resolution remove the
Trustee and appoint a successor trustee by written instrument, in
duplicate, executed by order of the Board of Directors, one copy of which
instrument shall be delivered to the Trustee so removed and one copy to the
successor trustee, or, subject to the provisions of Section 7.9, any
Noteholder who has been a bona fide holder of a Note or Notes for at least
six months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor trustee. Such court may thereupon, after
such notice, if any, as it may deem proper and prescribe, remove the
Trustee and appoint a successor trustee.
(c) The holders of a majority in aggregate principal amount of the Notes at
the time outstanding may at any time remove the Trustee and nominate a successor
trustee which shall be deemed appointed as successor trustee unless within ten
(10) days after notice to the Company of such nomination the Company objects
thereto, in which case the Trustee so removed or any Noteholder, upon the terms
and conditions and otherwise as in Section 8.10(a) provided, may petition any
court of competent jurisdiction for an appointment of a successor trustee.
(d) Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section 8.10 shall
become effective upon acceptance of appointment by the successor trustee as
provided in Section 8.11.
Section 8.11 Acceptance by Successor Trustee. Any successor trustee
appointed as provided in Section 8.10 shall execute, acknowledge and deliver to
the Company and to its predecessor trustee an instrument accepting such
appointment hereunder, and thereupon the resignation or removal of the
predecessor trustee shall become effective and such successor trustee, without
any further act, deed or conveyance, shall become vested with all the rights,
powers, duties and obligations of its predecessor hereunder, with like effect as
if originally named as trustee herein; but, nevertheless, on the written request
of the Company or of the successor trustee, the trustee ceasing to act shall,
upon payment of any amounts then due it pursuant to the provisions of Section
8.6, execute and deliver an instrument transferring to such successor trustee
all the rights and powers of the trustee so ceasing to act. Upon request of any
such successor trustee, the Company shall execute any and all instruments in
writing for more fully and certainly vesting in and confirming to such successor
trustee all such rights and powers. Any trustee ceasing to act shall,
nevertheless, retain a lien upon all property and funds held or
42
collected by such trustee as such, except for funds held in trust for the
benefit of holders of particular Notes, to secure any amounts then due it
pursuant to the provisions of Section 8.6.
No successor trustee shall accept appointment as provided in this Section
8.11 unless at the time of such acceptance such successor trustee shall be
qualified under the provisions of Section 8.8 and be eligible under the
provisions of Section 8.9.
Upon acceptance of appointment by a successor trustee as provided in this
Section 8.11, each of the Company and the former trustee shall mail or cause to
be mailed notice of the succession of such trustee hereunder to the holders of
Notes at their addresses as they shall appear on the Note register. If the
Company fails to mail such notice within ten (10) days after acceptance of
appointment by the successor trustee, the successor trustee shall cause such
notice to be mailed at the expense of the Company.
Section 8.12 Succession by Merger, Etc. Any corporation or other entity
into which the Trustee may be merged or converted or with which it may be
consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any corporation or other
entity succeeding to all or substantially all of the corporate trust business of
the Trustee (including the administration of this Indenture), shall be the
successor to the Trustee hereunder without the execution or filing of any paper
or any further act on the part of any of the parties hereto, provided that in
the case of any corporation succeeding to all or substantially all of the
corporate trust business of the Trustee such corporation shall be qualified
under the provisions of Section 8.8 and eligible under the provisions of Section
8.9.
In case at the time such successor to the Trustee shall succeed to the
trusts created by this Indenture, any of the Notes shall have been authenticated
but not delivered, any such successor to the Trustee may adopt the certificate
of authentication of any predecessor trustee or authenticating agent appointed
by such predecessor trustee, and deliver such Notes so authenticated; and in
case at that time any of the Notes shall not have been authenticated, any
successor to the Trustee or an authenticating agent appointed by such successor
trustee may authenticate such Notes either in the name of any predecessor
trustee hereunder or in the name of the successor trustee; and in all such cases
such certificates shall have the full force which it is anywhere in the Notes or
in this Indenture provided that the certificate of the Trustee shall have;
provided, however, that the right to adopt the certificate of authentication of
any predecessor Trustee or to authenticate Notes in the name of any predecessor
Trustee shall apply only to its successor or successors by merger, conversion or
consolidation.
Section 8.13 Limitation on Rights of Trustee as Creditor. If and when the
Trustee shall be or become a creditor of the Company (or any other obligor upon
the Notes), after qualification under the Trust Indenture Act, 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).
43
ARTICLE IX
CONCERNING THE NOTEHOLDERS
Section 9.1 Action by Noteholders. Whenever in this Indenture it is
provided that the holders of a specified percentage in aggregate principal
amount of the Notes may take any action (including the making of any demand or
request, the giving of any notice, consent or waiver or the taking of any other
action), the fact that at the time of taking any such action, the holders of
such specified percentage have joined therein may be evidenced (a) by any
instrument or any number of instruments of similar tenor executed by Noteholders
in person or by agent or proxy appointed in writing, or (b) by the record of the
holders of Notes voting in favor thereof at any meeting of Noteholders duly
called and held in accordance with the provisions of Article X, or (c) by a
combination of such instrument or instruments and any such record of such a
meeting of Noteholders. Whenever the Company or the Trustee solicits the taking
of any action by the holders of the Notes, the Company or the Trustee may fix in
advance of such solicitation, a date as the record date for determining holders
entitled to take such action. The record date shall be not more than fifteen
(15) days prior to the date of commencement of solicitation of such action.
Section 9.2 Proof of Execution by Noteholders. Subject to the provisions of
Sections 8.1, 8.2 and 10.5, proof of the execution of any instrument by a
Noteholder or his agent or proxy shall be sufficient if made in accordance with
such reasonable rules and regulations as may be prescribed by the Trustee or in
such manner as shall be satisfactory to the Trustee. The holding of Notes shall
be proved by the Note register or by a certificate of the Note registrar. The
record of any Noteholders' meeting shall be proved in the manner provided in
Section 10.6.
Section 9.3 Who Are Deemed Absolute Owners. The Company, the Trustee, any
authenticating agent, any paying agent, any conversion agent and any Note
registrar may deem the person in whose name such Note shall be registered upon
the Note register to be, and may treat him as, the absolute owner of such Note
(whether or not such Note shall be overdue and notwithstanding any notation of
ownership or other writing thereon) for the purpose of receiving payment of or
on account of the principal of, premium, if any, and interest on such Note, for
conversion of such Note and for all other purposes; and neither the Company nor
the Trustee nor any paying agent nor any conversion agent nor any Note registrar
shall be affected by any notice to the contrary. All such payments so made to
any holder for the time being, or upon his order, shall be valid, and, to the
extent of the sum or sums so paid, effectual to satisfy and discharge the
liability for monies payable upon any such Note.
Section 9.4 Company-Owned Notes Disregarded. In determining whether the
holders of the requisite aggregate principal amount of Notes have concurred in
any direction, consent, waiver or other action under this Indenture, Notes which
are owned by the Company or any other obligor on the Notes or by any person
directly or indirectly controlling or controlled by or under direct or indirect
common control with the Company or any other obligor on the Notes shall be
disregarded and deemed not to be outstanding for the purpose of any such
determination; provided that for the purposes of determining whether the Trustee
shall be protected in relying on any such direction, consent, waiver or other
action only Notes which a Responsible Officer knows are so owned shall be so
disregarded. Notes so owned which have been pledged in good
44
faith may be regarded as outstanding for the purposes of this Section 9.4 if the
pledgee shall establish to the satisfaction of the Trustee the pledgee's right
to vote such Notes and that the pledgee is not the Company, any other obligor on
the Notes or a person directly or indirectly controlling or controlled by or
under direct or indirect common control with the Company or any such other
obligor. In the case of a dispute as to such right, any decision by the Trustee
taken upon the advice of counsel shall be full protection to the Trustee. Upon
request of the Trustee, the Company shall furnish to the Trustee promptly an
Officers' Certificate listing and identifying all Notes, if any, known by the
Company to be owned or held by or for the account of any of the above described
persons; and, subject to Section 8.1, the Trustee shall be entitled to accept
such Officers' Certificate as conclusive evidence of the facts therein set forth
and of the fact that all Notes not listed therein are outstanding for the
purpose of any such determination.
Section 9.5 Revocation of Consents; Future Holders Bound. At any time prior
to (but not after) the evidencing to the Trustee, as provided in Section 9.1, of
the taking of any action by the holders of the percentage in aggregate principal
amount of the Notes specified in this Indenture in connection with such action,
any holder of a Note which is shown by the evidence to be included in the Notes
the holders of which have consented to such action may, by filing written notice
with the Trustee at its Corporate Trust Office and upon proof of holding as
provided in Section 9.2, revoke such action so far as concerns such Note. Except
as aforesaid, any such action taken by the holder of any Note shall be
conclusive and binding upon such holder and upon all future holders and owners
of such Note and of any Notes issued in exchange or substitution therefor,
irrespective of whether any notation in regard thereto is made upon such Note or
any Note issued in exchange or substitution therefor.
ARTICLE X
NOTEHOLDERS' MEETINGS
Section 10.1 Purpose of Meetings. A meeting of Noteholders may be called at
any time and from time to time pursuant to the provisions of this Article X for
any of the following purposes:
(a) to give any notice to the Company or to the Trustee or to give any
directions to the Trustee permitted under this Indenture, or to consent to the
waiving of any default or Event of Default hereunder and its consequences, or to
take any other action authorized to be taken by Noteholders pursuant to any of
the provisions of Article VII;
(b) to remove the Trustee and nominate a successor trustee pursuant to
the provisions of Article VIII;
(c) to consent to the execution of an indenture or indentures
supplemental hereto pursuant to the provisions of Section 11.2;
45
(d) to take any other action authorized to be taken by or on behalf of
the holders of any specified aggregate principal amount of the Notes under any
other provision of this Indenture or under applicable law; or
(e) to take any other action authorized by this Indenture or under
applicable law.
Section 10.2 Call of Meetings by Trustee. The Trustee may at any time call
a meeting of Noteholders to take any action specified in Section 10.1, to be
held at such time and at such place in the Borough of Manhattan, The City of New
York, as the Trustee shall determine. Notice of every meeting of the
Noteholders, setting forth the time and the place of such meeting and in general
terms the action proposed to be taken at such meeting and the establishment of
any record date pursuant to Section 9.1, shall be mailed to holders of Notes at
their addresses as they shall appear on the Note register. Such notice shall
also be mailed to the Company. Such notices shall be mailed not less than twenty
(20) nor more than ninety (90) days prior to the date fixed for the meeting.
Any meeting of Noteholders shall be valid without notice if the holders of
all Notes then outstanding are present in person or by proxy or if notice is
waived before or after the meeting by the holders of all Notes outstanding, and
if the Company and the Trustee are either present by duly authorized
representatives or have, before or after the meeting, waived notice.
Section 10.3 Call of Meetings by Company or Noteholders. In case at any
time the Company, pursuant to a resolution of its Board of Directors, or the
holders of at least 10% in aggregate principal amount of the Notes then
outstanding, shall have requested the Trustee to call a meeting of Noteholders,
by written request setting forth in reasonable detail the action proposed to be
taken at the meeting, and the Trustee shall not have mailed the notice of such
meeting within twenty (20) days after receipt of such request, then the Company
or such Noteholders may determine the time and the place for such meeting and
may call such meeting to take any action authorized in Section 10.1, by mailing
notice thereof as provided in Section 10.2.
Section 10.4 Qualifications for Voting. To be entitled to vote at any
meeting of Noteholders a person shall (a) be a holder of one or more Notes on
the record date pertaining to such meeting or (b) be a person appointed by an
instrument in writing as proxy by a holder of one or more Notes. The only
persons who shall be entitled to be present or to speak at any meeting of
Noteholders shall be the persons entitled to vote at such meeting and their
counsel and any representatives of the Trustee and its counsel and any
representatives of the Company and its counsel.
Section 10.5 Regulations. Notwithstanding any other provisions of this
Indenture, the Trustee may make such reasonable regulations as it may deem
advisable for any meeting of Noteholders, in regard to proof of the holding of
Notes and of the appointment of proxies, and in regard to the appointment and
duties of inspectors of votes, the submission and examination of proxies,
certificates and other evidence of the right to vote, and such other matters
concerning the conduct of the meeting as it shall think fit.
46
The Trustee shall, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called by the
Company or by Noteholders as provided in Section 10.3, in which case the Company
or the Noteholders calling the meeting, as the case may be, shall in like manner
appoint a temporary chairman. A permanent chairman and a permanent secretary of
the meeting shall be elected by vote of the holders of a majority in principal
amount of the Notes represented at the meeting and entitled to vote at the
meeting.
Subject to the provisions of Section 9.4, at any meeting each Noteholder or
proxyholder shall be entitled to one vote for each $1,000 principal amount of
Notes held or represented by him; provided, however, that no vote shall be cast
or counted at any meeting in respect of any Note challenged as not outstanding
and ruled by the chairman of the meeting to be not outstanding. The chairman of
the meeting shall have no right to vote other than by virtue of Notes held by
him or instruments in writing as aforesaid duly designating him as the proxy to
vote on behalf of other Noteholders. Any meeting of Noteholders duly called
pursuant to the provisions of Section 10.2 or 10.3 may be adjourned from time to
time by the holders of a majority of the aggregate principal amount of Notes
represented at the meeting, whether or not constituting a quorum, and the
meeting may be held as so adjourned without further notice.
Section 10.6 Voting. The vote upon any resolution submitted to any meeting
of Noteholders shall be by written ballot on which shall be subscribed the
signatures of the holders of Notes or of their representatives by proxy and the
principal amount of the Notes held or represented by them. The permanent
chairman of the meeting shall appoint two inspectors of votes who shall count
all votes cast at the meeting for or against any resolution and who shall make
and file with the secretary of the meeting their verified written reports in
duplicate of all votes cast at the meeting. A record in duplicate of the
proceedings of each meeting of Noteholders shall be prepared by the secretary of
the meeting and there shall be attached to said record the original reports of
the inspectors of votes on any vote by ballot taken thereat and affidavits by
one or more persons having knowledge of the facts setting forth a copy of the
notice of the meeting and showing that said notice was mailed as provided in
Section 10.2. The record shall show the principal amount of the Notes voting in
favor of or against any resolution. The record shall be signed and verified by
the affidavits of the permanent chairman and secretary of the meeting and one of
the duplicates shall be delivered to the Company and the other to the Trustee to
be preserved by the Trustee, the latter to have attached thereto the ballots
voted at the meeting.
Any record so signed and verified shall be conclusive evidence of the
matters therein stated.
Section 10.7 No Delay of Rights by Meeting. Nothing in this Article X
contained shall be deemed or construed to authorize or permit, by reason of any
call of a meeting of Noteholders or any rights expressly or impliedly conferred
hereunder to make such call, any hindrance or delay in the exercise of any right
or rights conferred upon or reserved to the Trustee or to the Noteholders under
any of the provisions of this Indenture or of the Notes.
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ARTICLE XI
SUPPLEMENTAL INDENTURES
Section 11.1 Supplemental Indentures Without Consent of Noteholders. The
Company, when authorized by the resolutions of the Board of Directors, and the
Trustee may from time to time and at any time enter into an indenture or
indentures supplemental hereto for one or more of the following purposes:
(a) to make provision with respect to the conversion rights of the
holders of Notes pursuant to the requirements of Section 15.6;
(b) subject to Article IV, to convey, transfer, assign, mortgage or
pledge to the Trustee as security for the Notes, any property or assets;
(c) to evidence the succession of another corporation to the Company,
or successive successions, and the assumption by the successor corporation of
the covenants, agreements and obligations of the Company pursuant to Article
XII;
(d) to add to the covenants of the Company such further covenants,
restrictions or conditions for the benefit of the holders of Notes, and to make
the occurrence, or the occurrence and continuance, of a default in any such
additional covenants, restrictions or conditions a default or an Event of
Default permitting the enforcement of all or any of the several remedies
provided in this Indenture as herein set forth; provided, however, that in
respect of any such additional covenant, restriction or condition such
supplemental indenture may provide for a particular period of grace after
default (which period may be shorter or longer than that allowed in the case of
other defaults) or may provide for an immediate enforcement upon such default or
may limit the remedies available to the Trustee upon such default;
(e) to provide for the issuance under this Indenture of Notes in coupon
form (including Notes registrable as to principal only) and to provide for
exchangeability of such Notes with the Notes issued hereunder in fully
registered form and to make all appropriate changes for such purpose;
(f) to cure any ambiguity or to correct or supplement any provision
contained herein or in any supplemental indenture which may be defective or
inconsistent with any other provision contained herein or in any supplemental
indenture, or to make such other provisions in regard to matters or questions
arising under this Indenture which shall not materially adversely affect the
interests of the holders of the Notes;
(g) to evidence and provide for the acceptance of appointment hereunder
by a successor Trustee with respect to the Notes; or
(h) to modify, eliminate or add to the provisions of this Indenture to
such extent as shall be necessary to effect the qualifications of this Indenture
under the Trust Indenture Act, or under any similar federal statute hereafter
enacted.
48
The Trustee is hereby authorized to join with the Company in the execution
of any such supplemental indenture, to make any further appropriate agreements
and stipulations which may be therein contained and to accept the conveyance,
transfer and assignment of any property thereunder, but the Trustee shall not be
obligated to, but may in its discretion, enter into any supplemental indenture
which affects the Trustee's own rights, duties or immunities under this
Indenture or otherwise.
Any supplemental indenture authorized by the provisions of this Section
11.1 may be executed by the Company and the Trustee without the consent of the
holders of any of the Notes at the time outstanding, notwithstanding any of the
provisions of Section 11.2.
Section 11.2 Supplemental Indentures With Consent of Noteholders. With the
consent (evidenced as provided in Article IX) of the holders of not less than a
majority in aggregate principal amount of the Notes at the time outstanding
(determined in accordance with Section 9.4), the Company, when authorized by the
resolutions of the Board of Directors, and the Trustee may from time to time and
at any time enter into an indenture or indentures supplemental hereto for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of this Indenture or any supplemental indenture or of
modifying in any manner the rights of the holders of the Notes; provided,
however, that no such supplemental indenture shall (i) extend the fixed maturity
of any Note, or reduce the rate or extend the time of payment of interest
thereon, or reduce the principal amount thereof or premium, if any, thereon, or
reduce any amount payable on redemption or repurchase thereof, impair, or change
in any respect adverse to the holder of Notes, the obligation of the Company to
repurchase any Note at the option of the holder upon the happening of a
Repurchase Event, or impair or adversely affect the right of any Noteholder to
institute suit for the payment thereof, or change the currency in which the
Notes are payable, or impair or change in any respect adverse to the Noteholders
the right to convert the Notes into Common Stock subject to the terms set forth
herein, including Section 15.6, or modify the provisions of this Indenture with
respect to the subordination of the Notes in a manner adverse to the
Noteholders, without the consent of the holder of each Note so affected, or (ii)
reduce the aforesaid percentage of Notes, the holders of which are required to
consent to any such supplemental indenture, without the consent of the holders
of all Notes then outstanding.
Upon the request of the Company, accompanied by a copy of the Board
Resolutions authorizing the execution of any such supplemental indenture, and
upon the filing with the Trustee of evidence of the consent of Noteholders as
aforesaid, the Trustee shall join with the Company in the execution of such
supplemental indenture unless such supplemental indenture affects the Trustee's
own rights, duties or immunities under this Indenture or otherwise, in which
case the Trustee may in is discretion, but shall not be obligated to, enter into
such supplemental indenture.
It shall not be necessary for the consent of the Noteholders under this
Section 11.2 to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such consent shall approve the
substance thereof.
Section 11.3 Effect of Supplemental Indentures. Any supplemental indenture
executed pursuant to the provisions of this Article XI shall comply with the
Trust Indenture Act, as then in
49
effect. Upon the execution of any supplemental indenture pursuant to the
provisions of this Article XI, this Indenture shall be and be deemed to be
modified and amended in accordance therewith and the respective rights,
limitation of rights, obligations, duties and immunities under this Indenture of
the Trustee, the Company and the holders of Notes shall thereafter be
determined, exercised and enforced hereunder subject in all respects to such
modifications and amendments and all the terms and conditions of any such
supplemental indenture shall be and be deemed to be part of the terms and
conditions of this Indenture for any and all purposes.
Section 11.4 Revocation and Effect of Consents. Until an amendment,
supplement or waiver becomes effective, a consent to it by a Noteholder is a
continuing consent by the Noteholder and every subsequent Noteholder of a Note
or portion of a Note that evidences the same debt as the consenting Noteholder's
Note, even if notation of the consent is not made on any Note. However, any such
Noteholder or subsequent Noteholder may revoke the consent as to such
Noteholder's Note or portion of a Note if the Trustee receives the notice of
revocation before the date on which the Trustee receives an Officers'
Certificate certifying that the Noteholders of the requisite principal amount of
Notes have consented to the amendment, supplement or waiver.
The Company may, but shall not be obligated to, fix a record date for the
purpose of determining the Noteholders entitled to consent to any amendment,
supplement or waiver. If a record date is fixed, then notwithstanding the
provisions of the immediately preceding paragraph, those persons who were
Noteholders at such record date (or their duly designated proxies), and only
those persons, shall be entitled to consent to such amendment, supplement or
waiver or to revoke any consent previously given, whether or not such persons
continue to be Noteholders after such record date. No consent shall be valid or
effective for more than 90 days after such record date unless consents from
Noteholders of the principal amount of Notes required hereunder or such
amendment or waiver to be effective shall have also been given and not revoked
within such 90-day period.
After an amendment, supplement or waiver becomes effective it shall bind
every Noteholder, unless it is of the type described in clause (i) of Section
11.2 hereof. In such case, the amendment or waiver shall bind each Noteholder
who has consented to it and every subsequent Noteholder of a Note or portion of
a Note that evidences the same debt as the consenting Noteholder's Note.
Section 11.5 Notation on Notes. Notes authenticated and delivered after the
execution of any supplemental indenture pursuant to the provisions of this
Article XI may bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company or the Trustee shall
so determine, new Notes so modified as to conform, in the opinion of the Trustee
and the Board of Directors, to any modification of this Indenture contained in
any such supplemental indenture may, at the Company's expense, be prepared and
executed by the Company, authenticated by the Trustee (or an authenticating
agent duly appointed by the Trustee pursuant to Section 17.11) and delivered in
exchange for the Notes then outstanding, upon surrender of such Notes then
outstanding.
Section 11.6 Evidence of Compliance of Supplemental Indenture to Be
Furnished Trustee. The Trustee, subject to the provisions of Sections 8.1 and
8.2, may receive an Officers'
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Certificate and an Opinion of Counsel as conclusive evidence that any
supplemental indenture executed pursuant hereto complies with the requirements
of this Article XI.
ARTICLE XII
CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE
Section 12.1 Company May Consolidate, Etc. on Certain Terms. The Company
shall not, directly or indirectly, consolidate with or merge with or into any
other Person or sell, lease, convey or transfer all its properties and assets
substantially as an entirety, whether in a single transaction or a series of
related transactions, to any Person or group of affiliated Persons unless:
(a) either (i) in the case of a merger or consolidation that does not
involve a transfer of all or substantially all of the Company's properties and
assets, the Company is the surviving entity or (ii) in case the Company shall
consolidate with or merge into another Person or sell, lease, convey or transfer
all its properties and assets substantially as an entirety, whether in a single
transaction or a series of related transactions, to any Person, the Person
formed by such consolidation or into which the Company is merged, or the Person
which acquires by sale, conveyance or transfer, or which leases the properties
and assets of the Company substantially as an entirety, shall be a corporation,
limited liability company, partnership or trust, shall be organized and validly
existing under the laws of the United States of America, any state thereof or
the District of Columbia and shall expressly assume, by an indenture
supplemental hereto, executed and delivered to the Trustee, in form satisfactory
to the Trustee, the due and punctual payment of the principal of, premium, if
any, and interest on all of the Notes as applicable, and the performance or
observance of every covenant of this Indenture on the part of the Company to be
performed or observed and shall have provided for the applicable conversion
rights set forth in Section 15.6 and the repurchase rights set forth in Article
XVI;
(b) immediately after giving effect to such transaction, no Event of
Default, and no event that after notice or lapse of time or both, would become
an Event of Default, shall have happened and be continuing; and
(c) the Company has delivered to the Trustee an Officers Certificate
and an Opinion of Counsel, each stating that such consolidation, merger,
conveyance, transfer or lease and, if a supplemental indenture is required in
connection with such transaction, such supplemental indenture comply with this
Article and that all conditions precedent herein provided for relating to such
transaction have been complied with, together with any documents required under
Article IX.
Section 12.2 Successor Corporation to Be Substituted. In case of any such
consolidation, merger, sale, conveyance or lease in accordance with Section
12.1, and, where required in accordance with Section 12.1(a) upon the assumption
by the successor corporation, by supplemental indenture, executed and delivered
to the Trustee and satisfactory in form to the Trustee, of the due and punctual
payment of the principal of and premium, if any, and interest on all of the
Notes and the due and punctual performance of all of the covenants and
conditions of
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this Indenture to be performed by the Company, such successor corporation,
limited liability company, partnership or trust 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. Such successor corporation thereupon may cause
to be signed, and may issue either in its own name or in the name of Alkermes,
Inc. any or all of the Notes issuable hereunder which theretofore shall not have
been signed by the Company and delivered to the Trustee; and, upon the order of
such successor corporation instead of the Company and subject to all the terms,
conditions and limitations in this Indenture prescribed, the Trustee shall
authenticate and shall deliver, or cause to be authenticated and delivered, any
Notes which previously shall have been signed and delivered by the officers of
the Company to the Trustee for authentication, and any Notes which such
successor corporation 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 the event
of any such consolidation, merger, sale, conveyance or lease, the person named
as the "Company" in the first paragraph of this Indenture or any successor which
shall thereafter have become such in the manner prescribed in this Article XII
may be dissolved, wound up and liquidated at any time thereafter and such person
shall be released from its liabilities as obligor and maker of the Notes and
from its obligations under this Indenture.
In case of any such consolidation, merger, sale, conveyance or lease, 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 12.3 Opinion of Counsel to Be Given Trustee. The Trustee, subject
to Sections 8.1 and 8.2, shall receive an Officers' Certificate and an Opinion
of Counsel as conclusive evidence that any such consolidation, merger, sale,
conveyance or lease and any such assumption complies with the provisions of this
Article XII.
ARTICLE XIII
SATISFACTION AND DISCHARGE OF INDENTURE
Section 13.1 Discharge of Indenture. When (a) the Company shall deliver to
the Trustee for cancellation all Notes theretofore authenticated (other than any
Notes which have been destroyed, lost or stolen and in lieu of or in
substitution for which other Notes shall have been authenticated and delivered)
and not theretofore canceled, or (b) all the Notes not theretofore canceled or
delivered to the Trustee for cancellation shall have become due and payable, or
are by their terms to become due and payable within one year or are to be called
for redemption within one year under arrangements satisfactory to the Trustee
for the giving of notice of redemption, and the Company shall deposit with the
Trustee, in trust, funds sufficient to pay at maturity or upon redemption of all
of the Notes (other than any Notes which shall have been mutilated, destroyed,
lost or stolen and in lieu of or in substitution for which other Notes shall
52
have been authenticated and delivered) not theretofore canceled or delivered to
the Trustee for cancellation, including principal and premium, if any, and
interest due or to become due to such date of maturity or redemption date, as
the case may be, and if in either case the Company shall also pay or cause to be
paid all other sums payable hereunder by the Company, then this Indenture shall
cease to be of further effect (except as to (i) remaining rights of registration
of transfer, substitution and exchange and conversion of Notes, (ii) rights
hereunder of Noteholders to receive payments of principal of and premium, if
any, and interest on, the Notes and the other rights, duties and obligations of
Noteholders, as beneficiaries hereof with respect to the amounts, if any, so
deposited with the Trustee and (iii) the rights, obligations and immunities of
the Trustee hereunder), and the Trustee, on demand of the Company accompanied by
an Officers' Certificate and an Opinion of Counsel as required by Section 17.5
and at the cost and expense of the Company, shall execute proper instruments
acknowledging satisfaction of and discharging this Indenture; the Company,
however, hereby agreeing to reimburse the Trustee for any costs or expenses
thereafter reasonably and properly incurred by the Trustee and to compensate the
Trustee for any services thereafter reasonably and properly rendered by the
Trustee in connection with this Indenture or the Notes.
Section 13.2 Deposited Monies to Be Held in Trust by Trustee. Subject to
Section 13.4, all monies deposited with the Trustee pursuant to Section 13.1
shall be held in trust and applied by it to the payment, notwithstanding the
provisions of Article IV, either directly or through any paying agent (including
the Company if acting as its own paying agent), to the holders of the particular
Notes for the payment or redemption of which such monies have been deposited
with the Trustee, of all sums due and to become due thereon for principal and
interest and premium, if any.
Section 13.3 Paying Agent to Repay Monies Held. Upon the satisfaction and
discharge of this Indenture, all monies then held by any paying agent of the
Notes (other than the Trustee) shall, upon demand of the Company, be repaid to
it or paid to the Trustee, and thereupon such paying agent shall be released
from all further liability with respect to such monies.
Section 13.4 Return of Unclaimed Monies. Subject to the requirements of
applicable law, any monies deposited with or paid to the Trustee for payment of
the principal of, premium, if any, or interest on Notes and not applied but
remaining unclaimed by the holders of Notes for two years after the date upon
which the principal of, premium, if any, or interest on such Notes, as the case
may be, shall have become due and payable, shall be repaid to the Company by the
Trustee on demand and all liability of the Trustee shall thereupon cease with
respect to such monies; and the holder of any of the Notes shall thereafter look
only to the Company for any payment which such holder may be entitled to collect
unless an applicable abandoned property law designates another person.
Section 13.5 Reinstatement. If (i) the Trustee or the paying agent is
unable to apply any money in accordance with Section 13.2 by reason of any order
or judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application and (ii) the holders of at least a
majority in principal amount of the then outstanding Notes so request by written
notice to the Trustee, the Company's obligations under this Indenture and the
Notes shall be revived and reinstated as though no deposit had occurred pursuant
to Section 13.1 until such time as the Trustee or the paying agent is permitted
to apply all such money in accordance
53
with Section 13.2; provided, however, that if the Company makes any payment of
interest on or principal of any Note following the reinstatement of its
obligations, the Company shall be subrogated to the rights of the holders of
such Notes to receive such payment from the money held by the Trustee or paying
agent.
ARTICLE XIV
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS
Section 14.1 Indenture and Notes Solely Corporate Obligations. No recourse
for the payment of the principal or of premium, if any, or interest on any Note,
or for any claim based thereon or otherwise in respect thereof, and no recourse
under or upon any obligation, covenant or agreement of the Company in this
Indenture or in any supplemental indenture or in any Note or for any claim based
thereon shall be had against any incorporator, stockholder, employee, agent,
officer or director or Subsidiary, as such, past, present or future, of the
Company or of any successor corporation, either directly or through the Company
or 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; it
being expressly understood that all such liability is hereby expressly waived
and released as a condition of, and as a consideration for, the execution of
this Indenture and the issue of the Notes; provided, however, that this Section
14.1 is not intended in any way to be inconsistent with Section 14 of the
Securities Act and Section 29(a) of the Exchange Act.
ARTICLE XV
CONVERSION OF NOTES
Section 15.1 Right to Convert. Subject to and upon compliance with the
provisions of this Indenture, the holder of any Note shall have the right, at
his option, at any time following the date of original issuance of the Notes and
prior to the close of business on December 31, 2009 (except that, with respect
to any Note or portion of a Note which shall be called for redemption, such
right shall terminate, except as provided in the fifth paragraph of Section 15.2
and Section 3.4, at the close of business on the Business Day immediately
preceding the date fixed for redemption of such Note or portion of a Note unless
the Company shall default in payment due upon redemption thereof) to convert the
principal amount of any such Note, or any portion of such principal amount which
is $1,000 or an integral multiple thereof, into that number of fully paid and
non-assessable shares of Common Stock (as such shares shall then be constituted)
obtained by dividing the principal amount of the Note or portion thereof
surrendered for conversion by the Conversion Price in effect at such time, by
surrender of the Note so to be converted in whole or in part in the manner
provided in Section 15.2. A holder of Notes is not entitled to any rights of a
holder of Common Stock until such holder has converted his Notes to Common
Stock, and only to the extent such Notes are deemed to have been converted to
Common Stock under this Article XV. A Note with respect to which a holder has
delivered a
54
notice in accordance with Section 16.2 regarding such holder's election to
require the Company to repurchase such holder's Notes following the occurrence
of a Repurchase Event may be converted in accordance with this Article XV only
if such holder withdraws such notice by delivering a written notice of
withdrawal to the Company prior to the close of business on last Business Day
prior to the day fixed for repurchase.
Section 15.2 Exercise of Conversion Privilege; Issuance of Common Stock on
Conversion; No Adjustment for Interest or Dividends. In order to exercise the
conversion privilege with respect to any Note in definitive form, the holder of
any such Note to be converted in whole or in part shall surrender such Note,
duly endorsed, at an office or agency maintained by the Company pursuant to
Section 5.2, accompanied by the funds, if any, required by the fifth paragraph
of this Section 15.2, and shall give written notice of conversion in the form
provided on the Notes (or such other notice which is acceptable to the Company)
to the office or agency that the holder elects to convert such Note or such
portion thereof specified in said notice. Such notice shall also state the name
or names (with address) in which the certificate or certificates for shares of
Common Stock which shall be issuable on such conversion shall be issued, and
shall be accompanied by transfer taxes, if required pursuant to Section 15.7.
Each such Note surrendered for conversion shall, unless the shares issuable on
conversion are to be issued in the same name as the registration of such Note,
be duly endorsed by, or be accompanied by instruments of transfer in form
satisfactory to the Company duly executed by, the holder or his duly authorized
attorney.
In order to exercise the conversion privilege with respect to any interest
in the Global Note, the beneficial holder must complete the appropriate
instruction form for conversion pursuant to the Depositary's book-entry
conversion program, deliver by book-entry delivery an interest in the Global
Note, furnish appropriate endorsements and transfer documents if required by the
Company or the Trustee or conversion agent, and pay the funds, if any, required
by the fifth paragraph of this Section 15.2 and any transfer taxes, if required
pursuant to Section 15.7.
As promptly as practicable after satisfaction of the requirements for
conversion set forth above, but no later than three Business 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
Noteholder (as if such transfer were a transfer of the Note or Notes (or portion
thereof) so converted), the Company shall issue and shall deliver to such holder
at the office or agency maintained by the Company for such purpose pursuant to
Section 5.2, a certificate or certificates for the number of full shares of
Common Stock issuable upon the conversion of such Note or portion thereof in
accordance with the provisions of this Article and a check or cash in respect of
any fractional interest in respect of a share of Common Stock arising upon such
conversion, as provided in Section 15.3 (which payment, if any, shall be paid no
later than five Business Days after satisfaction of the requirements for
conversion set forth above). In case any Note of a denomination greater than
$1,000 shall be surrendered for partial conversion, and subject to Section 2.3,
the Company shall execute and the Trustee shall authenticate and deliver to the
holder of the Note so surrendered, without charge to him, a new Note or Notes in
authorized denominations in an aggregate principal amount equal to the
unconverted portion of the surrendered Note.
55
Each conversion shall be deemed to have been effected as to any such Note
(or portion thereof) on the date on which the requirements set forth above in
this Section 15.2 have been satisfied as to such Note (or portion thereof), and
the person in whose name any certificate or certificates for shares of Common
Stock shall be issuable upon such conversion shall be deemed to have become on
said date the holder of record of the shares represented thereby; provided,
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
conversion shall be at the Conversion Price in effect on the date upon which
such Note shall be surrendered.
Any Note or portion thereof surrendered for conversion during the period
from the close of business on the record date for any interest payment date
through the close of business on the Business Day immediately preceding such
interest payment date shall (unless such Note or portion thereof being converted
shall have been called for redemption pursuant to a redemption notice mailed to
the Noteholders in accordance with Section 3.2) be accompanied by payment, in
New York Clearing House 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 if there shall exist at the time of conversion a default in the
payment of interest on the Notes. Except as provided above in this Section 15.2,
no adjustment shall be made for interest accrued on any Note converted or for
dividends on any shares issued upon the conversion of such Note as provided in
this Article.
Upon the conversion of an interest in the Global Note, the Trustee, or the
Custodian at the direction of the Trustee, shall make a notation on the Global
Note as to the reduction in the principal amount represented thereby.
Section 15.3 Cash Payments in Lieu of Fractional Shares. No fractional
shares of Common Stock or scrip representing fractional shares shall be issued
upon conversion of Notes. If more than one Note shall be surrendered for
conversion at one time by the same holder, the number of full shares which shall
be issuable upon conversion shall be computed on the basis of the aggregate
principal amount of the Notes (or specified portions thereof to the extent
permitted hereby) so surrendered for conversion. If any fractional share of
stock otherwise would be issuable upon the conversion of any Note or Notes, the
Company shall make an adjustment therefor in cash at the current market value
thereof to the holder of Notes. The current market value of a share of Common
Stock shall be the Closing Price on the first Trading Day immediately preceding
the day on which the Notes (or specified portions thereof) are deemed to have
been converted and such Closing Price shall be determined as provided in Section
15.5(h)(1).
Section 15.4 Conversion Price. The conversion price shall be as specified
in the form of Note (herein called the "Conversion Price") attached as Exhibit A
hereto, subject to adjustment as provided in this Article XV.
Section 15.5 Adjustment of Conversion Price. The Conversion Price shall be
adjusted from time to time by the Company as follows:
56
(a) In case the Company shall hereafter pay a dividend or make a
distribution to all holders of the outstanding Common Stock in shares of Common
Stock, the Conversion Price in effect at the opening of business on the date
following the date fixed for the determination of stockholders entitled to
receive such dividend or other distribution shall be reduced by multiplying such
Conversion Price by a fraction of which the numerator shall be the number of
shares of Common Stock outstanding at the close of business on the record date
(as defined in Section 15.5(h)(4)) fixed for such determination and the
denominator 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 immediately after the opening of business on the day following
the record date. If any dividend or distribution of the type described in this
Section 15.5(a) is declared but not so paid or made, the Conversion Price shall
again be adjusted to the Conversion Price which would then be in effect if such
dividend or distribution had not been declared.
(b) In case the Company shall issue rights or warrants to all holders
of its outstanding shares of Common Stock entitling them (for a period expiring
within forty-five (45) days after the date fixed for the determination of
stockholders entitled to receive such rights or warrants) to subscribe for or
purchase shares of Common Stock at a price per share less than the Current
Market Price (as defined in Section 15.5(h)(2)) on the record date fixed for the
determination of stockholders entitled to receive such rights or warrants, the
Conversion Price shall be adjusted so that the same shall equal the price
determined by multiplying the Conversion Price in effect at the opening of
business on the date after such record date by a fraction of which the numerator
shall be the number of shares of Common Stock outstanding at the close of
business on the record date plus the number of shares which the aggregate
offering price of the total number of shares so offered for subscription or
purchase would purchase at such Current Market Price, and of which the
denominator shall be the number of shares of Common Stock outstanding on the
close of business on the record date plus the total number of additional shares
of Common Stock so offered for subscription or purchase. Such adjustment shall
become effective immediately after the opening of business on the day following
the record date fixed for determination of stockholders entitled to receive such
rights or warrants. To the extent that shares of Common Stock are not delivered
pursuant to such rights or warrants, upon the expiration or termination of such
rights or warrants the Conversion Price shall be readjusted to the Conversion
Price which would then be in effect had the adjustments made upon the issuance
of such rights or warrants been made on the basis of delivery of only the number
of shares of Common Stock actually delivered. In the event that such rights or
warrants are not so issued, the Conversion Price shall again be adjusted to be
the Conversion Price which would then be in effect if such date fixed for the
determination of stockholders entitled to receive such rights or warrants had
not been fixed. In determining whether any rights or warrants entitle the
holders to subscribe for or purchase shares of Common Stock at less than such
Current Market Price, and in determining the aggregate offering price of such
shares of Common Stock, there shall be taken into account any consideration
received for such rights or warrants, the value of such consideration, if other
than cash, to be determined by the Board of Directors.
(c) In case the outstanding shares of Common Stock shall be split or
subdivided into a greater number of shares of Common Stock, the Conversion Price
in effect at the opening of business on the day following the day upon which
such subdivision becomes effective shall be proportionately reduced, and
conversely, in case outstanding shares of Common Stock shall be
57
combined into a smaller number of shares of Common Stock, the Conversion Price
in effect at the opening of business on the day following the day upon which
such combination becomes effective shall be proportionately increased, such
reduction or increase, as the case may be, to become effective immediately after
the opening of business on the day following the day upon which such subdivision
or combination becomes effective.
(d) In case the Company shall, by dividend or otherwise, distribute to
all holders of its Common Stock shares of any class of capital stock of the
Company (other than any dividends or distributions to which Section 15.5(a)
applies) or evidences of its indebtedness, cash or other assets (including
securities, but excluding (1) any rights or warrants referred to in Section
15.5(b) and, (2) dividends and distributions (A) in connection with the
liquidation, dissolution or winding up of the Company or paid (B) exclusively in
cash and (3) any capital stock, evidences of indebtedness, cash or assets
distributed upon a merger or consolidation to which Section 15.6 applies) (the
foregoing hereinafter in this Section 15.5(d) called the "Securities")), unless
the Company elects to reserve such Securities for distribution to the
Noteholders upon conversion of the Notes so that any such holder converting
Notes will receive upon such conversion, in addition to the shares of Common
Stock to which such holder is entitled, the amount and kind of such Securities
which such holder would have received if such holder had converted its Notes
into Common Stock immediately prior to the record date (as defined in Section
15.5(h)(4) for such distribution of the Notes) then, in each such case, the
Conversion Price shall be reduced so that the same shall be equal to the price
determined by multiplying the Conversion Price in effect immediately prior to
the close of business on the record date (as defined in Section 15.5(h)(4)) with
respect to such distribution by a fraction of which the numerator shall be the
Current Market Price (determined as provided in Section 15.5(h)(2)) on such date
less the fair market value (as determined by the Board of Directors, whose
determination shall be conclusive and described in a Board Resolution) on such
date of the portion of the Securities so distributed applicable to one share of
Common Stock and the denominator shall be such Current Market Price, such
reduction to become effective immediately prior to the opening of business on
the day following the record date; provided, however, that in the event the then
fair market value (as so determined) of the portion of the Securities so
distributed applicable to one share of Common Stock is equal to or greater than
the Current Market Price on the record date, in lieu of the foregoing
adjustment, adequate provision shall be made so that each Noteholder shall have
the right to receive upon conversion of a Note (or any portion thereof) the
amount of Securities such holder would have received had such holder converted
such Note (or portion thereof) immediately prior to such record date. In the
event that such dividend or distribution is not so paid or made, the Conversion
Price shall again be adjusted to be the Conversion Price which would then be in
effect if such dividend or distribution had not been declared. If the Board of
Directors determines the fair market value of any distribution for purposes of
this Section 15.5(d) by reference to the actual or when issued trading market
for any securities comprising all or part of such distribution, it must in doing
so consider the prices in such market over the same period (the "Reference
Period") used in computing the Current Market Price pursuant to Section
15.5(h)(2) to the extent possible, unless the Board of Directors in a board
resolution determines in good faith that determining the fair market value
during the Reference Period would not be in the best interest of the Noteholder.
In the event that the Company implements a stockholder rights plan, such
rights plan shall provide that upon conversion of the Notes the holders will
receive, in addition to the
58
Common Stock issuable upon such conversion, the rights issued under such rights
plan (notwithstanding the occurrence of an event causing such rights to separate
from the Common Stock at or prior to the time of conversion). Any distribution
of rights or warrants pursuant to a stockholder rights plan complying with the
requirements set forth in the immediately preceding sentence of this paragraph
shall not constitute a distribution of rights or warrants for the purposes of
this Section 15.5(d).
Rights or warrants distributed by the Company to all holders of Common
Stock entitling the holders thereof to subscribe for or purchase shares of the
Company's capital stock (either initially or under certain circumstances), which
rights or warrants, until the occurrence of a specified event or events
("Trigger Event"): (i) are deemed to be transferred with such shares of Common
Stock; (ii) are not exercisable; and (iii) are also issued in respect of future
issuances of Common Stock, shall be deemed not to have been distributed for
purposes of this Section 15.5(d) (and no adjustment to the Conversion Price
under this Section 15.5(d) will be required) until the occurrence of the
earliest Trigger Event. If such right or warrant is subject to subsequent
events, upon the occurrence of which such right or warrant shall become
exercisable to purchase different securities, evidences of indebtedness or other
assets or entitle the holder to purchase a different number or amount of the
foregoing or to purchase any of the foregoing at a different purchase price,
then the occurrence of each such event shall be deemed to be the date of
issuance and record date with respect to a new right or warrant (and a
termination or expiration of the existing right or warrant without exercise by
the holder thereof). In addition, in the event of any distribution (or deemed
distribution) of rights or warrants, or any Trigger Event or other event (of the
type described in the preceding sentence) with respect thereto, that resulted in
an adjustment to the Conversion Price under this Section 15.5(d), (1) in the
case of any such rights or warrants which shall all have been redeemed or
repurchased without exercise by any holders thereof, the Conversion Price shall
be readjusted upon such final redemption or repurchase to give effect to such
distribution or Trigger Event, as the case may be, as though it were a cash
distribution, equal to the per share redemption or repurchase price received by
a holder of Common Stock with respect to such rights or warrants (assuming such
holder had retained such rights or warrants), made to all holders of Common
Stock as of the date of such redemption or repurchase, and (2) in the case of
such rights or warrants all of which shall have expired or been terminated
without exercise, the Conversion Price shall be readjusted as if such rights and
warrants had never been issued.
For purposes of this Section 15.5(d) and Sections 15.5(a) and (b), any
dividend or distribution to which this Section 15.5(d) is applicable that also
includes shares of Common Stock, or rights or warrants to subscribe for or
purchase shares of Common Stock to which Section 15.5(b) applies (or both),
shall be deemed instead to be (1) a dividend or distribution of the evidences of
indebtedness, assets, shares of capital stock, rights or warrants other than
such shares of Common Stock or rights or warrants to which Section 15.5(b)
applies (and any Conversion Price reduction required by this Section 15.5(d)
with respect to such dividend or distribution shall then be made) immediately
followed by (2) a dividend or distribution of such shares of Common Stock or
such rights or warrants (and any further Conversion Price reduction required by
Sections 15.5(a) and (b) with respect to such dividend or distribution shall
then be made, except (A) the record date of such dividend or distribution shall
be substituted as "the date fixed for the determination of stockholders entitled
to receive such dividend or other distribution", "record date fixed for such
determination" and "record date" within the meaning of
59
Section 15.5(a) and as "the date fixed for the determination of stockholders
entitled to receive such rights or warrants", "the record date fixed for the
determination of the stockholders entitled to receive such rights or warrants"
and "such record date" within the meaning of Section 15.5(b) and (B) any shares
of Common Stock included in such dividend or distribution shall not be deemed
"outstanding at the close of business on the date fixed for such determination"
within the meaning of Section 15.5(a).
(e) In case the Company shall, by dividend or otherwise, distribute to
all holders of its Common Stock cash (excluding any cash that is distributed
upon a merger or consolidation to which Section 15.6 applies or as part of a
distribution referred to in Section 15.5(d)), in an aggregate amount that,
combined together with (1) the aggregate amount of any other such distributions
to all holders of its Common Stock made exclusively in cash within the twelve
(12) months preceding the date of payment of such distribution, and in respect
of which no adjustment pursuant to this Section 15.5(e) has been made, and (2)
the aggregate of any cash plus the fair market value (as determined by the Board
of Directors, whose determination shall be conclusive and described in a Board
Resolution) of consideration payable in respect of any tender offer by the
Company or any of its Subsidiaries for all or any portion of the Common Stock
concluded within the twelve (12) months preceding the date of payment of such
distribution, and in respect of which no adjustment pursuant to Section 15.5(f)
has been made, exceeds 10% of the product of the Current Market Price
(determined as provided in Section 15.5(h)(2)) on the record date with respect
to such distribution times the number of shares of Common Stock outstanding on
such date, then, and in each such case, immediately after the close of business
on such date, the Conversion Price shall be reduced so that the same shall equal
the price determined by multiplying the Conversion Price in effect immediately
prior to the close of business on such record date by a fraction (i) the
numerator of which shall be equal to the Current Market Price on the record date
less an amount equal to the quotient of (x) the excess of such combined amount
over such 10% and (y) the number of shares of Common Stock outstanding on the
record date and (ii) the denominator of which shall be equal to the Current
Market Price on such date; provided, however, that in the event the portion of
the cash so distributed applicable to one share of Common Stock is equal to or
greater than the Current Market Price of the Common Stock on the record date, in
lieu of the foregoing adjustment, adequate provision shall be made so that each
Noteholder shall have the right to receive upon conversion of a Note (or any
portion thereof) the amount of cash such holder would have received had such
holder converted such Note (or portion thereof) immediately prior to such record
date. In the event that such dividend or distribution is not so paid or made,
the Conversion Price shall again be adjusted to be the Conversion Price which
would then be in effect if such dividend or distribution had not been declared.
Any cash distribution to all holders of Common Stock as to which the Company
makes the election permitted by Section 15.5(n) and as to which the Company has
complied with the requirements of such Section shall be treated as not having
been made for all purposes of this Section 15.5(e)).
(f) In case a tender offer made by the Company or any Subsidiary for
all or any portion of the Common Stock shall expire and such tender offer (as
amended upon the expiration thereof) shall require the payment to shareholders
(based on the acceptance (up to any maximum specified in the terms of the tender
offer) of Purchased Shares (as defined below)) of an aggregate consideration
having a fair market value (as determined by the Board of Directors, whose
determination shall be conclusive and described in a Board
60
Resolution) that combined together with (1) the aggregate of the cash plus the
fair market value (as determined by the Board of Directors, whose determination
shall be conclusive and described in a Board Resolution), as of the expiration
of such tender offer, of consideration payable in respect of any other tender
offers, by the Company or any of its Subsidiaries for all or any portion of the
Common Stock expiring within the twelve (12) months preceding the expiration of
such tender offer and in respect of which no adjustment pursuant to this Section
15.5(f) has been made and (2) the aggregate amount of any distributions to all
holders of the Company's Common Stock made exclusively in cash within twelve
(12) months preceding the expiration of such tender offer and in respect of
which no adjustment pursuant to Section 15.5(e) has been made, exceeds 10% of
the product of the Current Market Price (determined as provided in Section
15.5(h)(2)) as of the last time (the "Expiration Time") tenders could have been
made pursuant to such tender offer (as it may be amended) times the number of
shares of Common Stock outstanding (including any tendered shares) on the
Expiration Time, then, and in each such case, immediately prior to the opening
of business on the day after the date of the Expiration Time, the Conversion
Price shall be adjusted so that the same shall equal the price determined by
multiplying the Conversion Price in effect immediately prior to close of
business on the date of the Expiration Time by a fraction of which the numerator
shall be the number of shares of Common Stock outstanding (including any
tendered shares) on the Expiration Time multiplied by the Current Market Price
of the Common Stock on the Trading Day next succeeding the Expiration Time and
the denominator shall be the sum of (x) the fair market value (determined as
aforesaid) of the aggregate consideration payable to stockholders based on the
acceptance (up to any maximum specified in the terms of the tender offer) of all
shares validly tendered and not withdrawn as of the Expiration Time (the shares
deemed so accepted, up to any such maximum, being referred to as the "Purchased
Shares") and (y) the product of the number of shares of Common Stock outstanding
(less any Purchased Shares) on the Expiration Time and the Current Market Price
of the Common Stock on the Trading Day next succeeding the Expiration Time, such
reduction (if any) to become effective immediately prior to the opening of
business on the day following the Expiration Time. In the event that the Company
is obligated to purchase shares pursuant to any such tender offer, but the
Company is permanently prevented by applicable law from effecting any such
purchases or all such purchases are rescinded, the Conversion Price shall again
be adjusted to be the Conversion Price which would then be in effect if such
tender offer had not been made. If the application of this Section 15.5(f) to
any tender offer would result in an increase in the Conversion Price, no
adjustment shall be made for such tender offer under this Section 15.5(f). Any
cash distribution to all holders of Common Stock as to which the Company has
made the election permitted by Section 15.5(n) and as to which the Company has
complied with the requirements of such Section shall be treated as not having
been made for all purposes of this Section 15.5(f).
(g) In case of a tender or exchange offer made by a person other than
the Company or any Subsidiary for an amount which increases the offeror's
ownership of Common Stock to more than 25% of the Common Stock outstanding and
shall involve the payment by such person of consideration per share of Common
Stock having a fair market value (as determined by the Board of Directors),
whose determination shall be conclusive, and described in a resolution of the
Board of Directors at the last time (the "Expiration Time") tenders or exchanges
may be made pursuant to such tender or exchange offer (as it shall have been
amended) that exceeds the Current Market Price of the Common Stock on the
Trading Day next succeeding the Expiration Time, and in which, as of the
Expiration Time the Board of Directors is not recommending
61
rejection of the offer, the Conversion Price shall be reduced so that the same
shall equal the price determined by multiplying the Conversion Price in effect
immediately prior to the Expiration Time by a fraction of which the numerator
shall be the number of shares of Common Stock outstanding (including any
tendered or exchanged shares) on the Expiration Time multiplied by the current
Market Price of the Common Stock on the Trading Day next succeeding the
Expiration Time and the denominator shall be the sum of (x) the fair market
value (determined as aforesaid) of the aggregate consideration payable to
stockholders based on the acceptance (up to any maximum specified in the terms
of the tender 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 (y) the
product of the number of shares of Common Stock outstanding (less any Purchased
Shares) on the Expiration Time and the Current Market Price of the Common Stock
on the Trading Day next succeeding the Expiration Time, such reduction to become
effective immediately prior to the opening of business on the day following the
Expiration Time. In the event that such person is obligated to purchase shares
pursuant to any such tender or exchange offer, but such person is permanently
prevented by applicable law from effecting any such purchases or all such
purchases are rescinded, the Conversion Price shall again be adjusted to be the
Conversion Price which would then be in effect if such tender or exchange offer
had not been made. Notwithstanding the foregoing, the adjustment described in
this Section 15.5(g) shall not be made if, as of the Expiration Time, the
offering documents with respect to such offer disclose a plan or intention to
cause the Company to engage in any transaction described in Article XII.
(h) For purposes of this Indenture, the following terms shall have the
meaning indicated:
(1) "Closing Price" with respect to any securities on any day
shall mean the closing sale price regular way on such day or, in case no
such sale takes place on such day, the average of the reported closing bid
and asked prices, regular way, in each case on the Nasdaq National Market
or New York Stock Exchange, as applicable, or, if such security is not
listed or admitted to trading on such Nasdaq National Market or New York
Stock Exchange, on the principal national security exchange or quotation
system on which such security is quoted or listed or admitted to trading,
or, if not quoted or listed or admitted to trading on any national
securities exchange or quotation system, the average of the closing bid and
asked prices of such security on the over-the-counter market on the day in
question as reported by the National Quotation Bureau Incorporated, or a
similar generally accepted reporting service, or if not so available, in
such manner as furnished by any New York Stock Exchange member firm
selected from time to time by the Board of Directors for that purpose, or a
price determined in good faith by the Board of Directors, whose
determination shall be conclusive and described in a Board Resolution.
(2) "Current Market Price" shall mean the average of the daily
Closing Prices per share of Common Stock for the ten (10) 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 Conversion Price pursuant to Section 15.5(a), (b),
(c), (d), (e), (f) or (g) occurs during such ten (10) consecutive Trading
Days, the Closing Price for each Trading Day prior to the "ex" date for
such
62
other event shall be adjusted by multiplying such Closing Price by the same
fraction by which the Conversion Price is so required to be adjusted as a
result of such other event, (2) if the "ex" date for any event (other than
the issuance or distribution requiring such computation) that requires an
adjustment to the Conversion Price pursuant to Section 15.5(a), (b), (c),
(d), (e), (f) or (g) occurs on or after the "ex" date for the issuance or
distribution requiring such computation and prior to the day in question,
the Closing Price for each Trading Day on and after the "ex" date for such
other event shall be adjusted by multiplying such Closing Price by the
reciprocal of the fraction by which the Conversion Price is so required to
be adjusted as a result of such other event, and (3) if the "ex" date for
the issuance or distribution requiring such computation is prior to the day
in question, after taking into account any adjustment required pursuant to
clause (1) or (2) of this proviso, the Closing Price for each Trading Day
on or after such "ex" date shall be adjusted by adding thereto the amount
of any cash and the fair market value (as determined by the Board of
Directors in a manner consistent with any determination of such value for
purposes of Section 15.5(d), (f) or (g), whose determination shall be
conclusive and described in a Board Resolution) of the evidences of
indebtedness, shares of capital stock or assets being distributed
applicable to one share of Common Stock as of the close of business on the
day before such "ex" date. For purposes of any computation under Sections
15.5(f) or (g), the Current Market Price of the Common Stock on any date
shall be deemed to be the average of the daily Closing Prices per share of
Common Stock for such day and the next two succeeding Trading Days;
provided, however, that if the "ex" date for any event (other than the
tender offer requiring such computation) that requires an adjustment to the
Conversion Price pursuant to Section 15.5(a), (b), (c), (d), (e), (f) and
(g) occurs on or after the Expiration Time for the tender or exchange offer
requiring such computation and prior to the day in question, the Closing
Price for each Trading Day on and after the "ex" date for such other event
shall be adjusted by multiplying such Closing Price by the reciprocal of
the fraction by which the Conversion Price is so required to be adjusted as
a result of such other event. For purposes of this paragraph, the term "ex"
date, (1) 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, (2)
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 (3) 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 offer. Notwithstanding the foregoing, whenever
successive adjustments to the Conversion Price are called for pursuant to
this Section 15.5, such adjustments shall be made to the Current Market
Price as may be necessary or appropriate to effectuate the intent of this
Section 15.5 and to avoid unjust or inequitable results as determined in
good faith by the Board of Directors.
(3) "fair market value" shall mean the amount which a willing
buyer would pay a willing seller in an arm's length transaction.
63
(4) "record date" shall mean, with respect to any dividend,
distribution or other transaction or event in which the holders of Common
Stock have the right to receive any cash, securities or other property or
in which the Common Stock (or other applicable security) is exchanged for
or converted into any combination of cash, securities or other property,
the date fixed for determination of stockholders entitled to receive such
cash, securities or other property (whether such date is fixed by the Board
of Directors or by statute, contract or otherwise).
(5) "Trading Day" shall mean (x) if the applicable security is
listed or admitted for trading on the New York Stock Exchange or another
national security exchange, a day on which the New York Stock Exchange or
another national security exchange is open for business or (y) if the
applicable security is quoted on the Nasdaq National Market, a day on which
trades may be made thereon or (z) if the applicable security is not so
listed, admitted for trading or quoted, any day other than a Saturday or
Sunday or a day on which banking institutions in the State of New York are
authorized or obligated by law or executive order to close.
(i) The Company may make such reductions in the Conversion Price, in
addition to those required by Sections 15.5(a), (b), (c), (d), (e), (f) and (g),
as the Board of Directors considers to be advisable to avoid or diminish any
income tax to holders of Common Stock or rights to purchase Common Stock
resulting from any dividend or distribution of stock (or rights to acquire
stock) or from any event treated as such for income tax purposes.
To the extent permitted by applicable law, the Company from time to time
may reduce the Conversion Price by any amount for any period of time if the
period is at least twenty (20) days, the reduction is irrevocable during the
period and the Board of Directors shall have made a determination that such
reduction would be in the best interests of the Company, which determination
shall be conclusive and described in a Board Resolution. Whenever the Conversion
Price is reduced pursuant to the preceding sentence, the Company shall mail to
the holder of each Note at his last address appearing on the Note register
provided for in Section 2.5(a) a notice of the reduction at least fifteen (15)
days prior to the date the reduced Conversion Price takes effect, and such
notice shall state the reduced Conversion Price and the period during which it
will be in effect.
(j) No adjustment in the Conversion Price shall be required unless such
adjustment would require an increase or decrease of at least 1% in such price;
provided, however, that any adjustments which by reason of this Section 15.5(j)
are not required to be made shall be carried forward and taken into account in
any subsequent adjustment. All calculations under this Article XV shall be made
by the Company and shall be made to the nearest cent or to the nearest one
hundredth of a share, as the case may be. No adjustment need be made for a
change in the par value or no par value of the Common Stock.
(k) Whenever the Conversion Price is adjusted as herein provided, the
Company shall promptly file with the Trustee, and any conversion agent other
than the Trustee, an Officers' Certificate setting forth the Conversion Price
after such adjustment and setting forth a brief statement of the facts requiring
such adjustment. Unless and until a Responsible Officer of the Trustee shall
have received such Officers' Certificate, the Trustee shall not be deemed to
have
64
knowledge of any adjustment of the Conversion Price and may assume without
inquiry that the last Conversion Price of which it has knowledge remains in
effect. Promptly after delivery of such certificate, the Company shall prepare a
notice of such adjustment of the Conversion Price setting forth the adjusted
Conversion Price and the date on which each adjustment becomes effective and
shall mail such notice of such adjustment of the Conversion Price to the holder
of each Note at his last address appearing on the Note register provided for in
Section 2.5(a), within twenty (20) days of the effective date of such
adjustment. Failure to deliver such notice shall not effect the legality or
validity of any such adjustment.
(l) In any case in which this Section 15.5 provides that an adjustment
shall become effective immediately after a record date for an event, the Company
may defer until the occurrence of such event (i) issuing to the holder of any
Note converted after such record date and before the occurrence of such event
the additional shares of Common Stock issuable upon such conversion by reason of
the adjustment required by such event over and above the Common Stock issuable
upon such conversion before giving effect to such adjustment and (ii) paying to
such holder any amount in cash in lieu of any fraction pursuant to Section 15.3.
(m) For purposes of this Section 15.5, the number of shares of Common
Stock at any time outstanding shall not include shares held in the treasury of
the Company but shall include shares issuable in respect of scrip certificates
issued in lieu of fractions of shares of Common Stock. The Company will not pay
any dividend or make any distribution on shares of Common Stock held in the
treasury of the Company.
(n) In lieu of making any adjustment to the Conversion Price pursuant
to Section 15.5(e), the Company may elect to reserve an amount of cash for
distribution to the holders of the Notes upon the conversion of the Notes so
that any such holder converting Notes will receive upon such conversion, in
addition to the shares of Common Stock and other items to which such holder is
entitled, the full amount of cash which such holder would have received if such
holder had, immediately prior to the record date for such distribution of cash,
converted its Notes into Common Stock, together with any interest accrued with
respect to such amount, in accordance with this Section 15.5(n). The Company may
make such election by providing an Officers' Certificate to the Trustee to such
effect on or prior to the payment date for any such distribution and depositing
with the Trustee on or prior to such date an amount of cash equal to the
aggregate amount the holders of the Notes would have received if such holders
had, immediately prior to the record date for such distribution, converted all
of the Notes into Common Stock. Any such funds so deposited by the Company with
the Trustee shall be invested by the Trustee in marketable obligations issued or
fully guaranteed by the United States government with a maturity not more than
three (3) months from the date of issuance. Upon conversion of Notes by a
holder, the holder will be entitled to receive, in addition to the Common Stock
issuable upon conversion, an amount of cash equal to the amount such holder
would have received if such holder had, immediately prior to the record date for
such distribution, converted its Note into Common Stock, along with such
holder's pro rata share of any accrued interest earned as a consequence of the
investment of such funds. Promptly after making an election pursuant to this
Section 15.5(n), the Company shall give or shall cause to be given notice to all
Noteholders of such election, which notice shall state the amount of cash per
$1,000 principal amount of Notes such holders shall be entitled to receive
(excluding interest) upon conversion of the Notes as a consequence of the
Company having made such election.
65
Section 15.6 Effect of Reclassification, Consolidation, Merger or Sale. If
any of the following events occur, namely (i) any reclassification or change of
the outstanding shares of Common Stock (other than a change in par value, or
from par value to no par value, or from no par value to par value, or as a
result of a subdivision or combination), (ii) any consolidation, merger or
combination of the Company with another corporation as a result of which holders
of Common Stock shall be entitled to receive stock, securities or other property
or assets (including cash) with respect to or in exchange for such Common Stock,
or (iii) any sale or conveyance of the properties and assets of the Company as,
or substantially as, an entirety to any other corporation as a result of which
holders of Common Stock shall be entitled to receive stock, securities or other
property or assets (including cash) with respect to or in exchange for such
Common Stock, then the Company or the successor or purchasing corporation, as
the case may be, shall execute with the Trustee a supplemental indenture (which
shall comply with the Trust Indenture Act as in force at the date of execution
of such supplemental indenture if such supplemental indenture is then required
to so comply) providing that such Note shall be convertible into the kind and
amount of shares of stock and other securities or property or assets (including
cash) receivable upon such reclassification, change, consolidation, merger,
combination, sale or conveyance by a holder of a number of shares of Common
Stock issuable upon conversion of such Notes (assuming, for such purposes, a
sufficient number of authorized shares of Common Stock available to convert all
such Notes) immediately prior to such reclassification, change, consolidation,
merger, combination, sale or conveyance assuming such holder of Common Stock did
not exercise his rights of election, if any, as to the kind or amount of
securities, cash or other property receivable upon such consolidation, merger,
statutory exchange, sale or conveyance (provided that, if the kind or amount of
securities, cash or other property receivable upon such consolidation, merger,
statutory exchange, sale or conveyance is not the same for each share of Common
Stock in respect of which such rights of election shall not have been exercised
("non-electing share"), then for the purposes of this Section 15.6 the kind and
amount of securities, cash or other property receivable upon such consolidation,
merger, statutory exchange, sale or conveyance for each non-electing share shall
be deemed to be the kind and amount so receivable per share by a plurality of
the non-electing shares). Such supplemental indenture shall provide for
adjustments which shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Article. If, in the case of any such
reclassification, change, consolidation, merger, combination, sale or
conveyance, the stock or other securities and assets receivable thereupon by a
holder of shares of Common Stock include shares of stock or other securities and
assets of a corporation other than the successor or purchasing corporation, as
the case may be, in such reclassification, change, consolidation, merger,
combination, sale or conveyance, then such supplemental indenture shall also be
executed by such other corporation and shall contain such additional provisions
to protect the interests of the holders of the Notes as the Board of Directors
shall reasonably consider necessary by reason of the foregoing, including to the
extent practicable the provisions providing for the repurchase rights set forth
in Article XVI herein.
The Company shall cause notice of the execution of such supplemental
indenture to be mailed to each holder of Notes, at his address appearing on the
Note register provided for in Section 2.5(a) of this Indenture, within twenty
(20) days after execution thereof. Failure to deliver such notice shall not
affect the legality or validity of such supplemental indenture.
66
The above provisions of this Section shall similarly apply to successive
reclassifications, changes, consolidations, mergers, combinations, sales and
conveyances.
If this Section 15.6 applies to any event or occurrence, Section 15.5 shall
not apply.
Section 15.7 Taxes on Shares Issued. The issue of stock certificates on
conversions of Notes shall be made without charge to the converting Noteholder
for any tax in respect of the issue thereof. The Company shall not, however, be
required to pay any tax which may be payable in respect of any transfer involved
in the issue and delivery of stock in any name other than that of the holder of
any Note converted, and the Company shall not be required to issue or deliver
any such stock certificate unless and until the person or persons requesting the
issue thereof shall have paid to the Company the amount of such tax or shall
have established to the satisfaction of the Company that such tax has been paid.
Section 15.8 Reservation of Shares; Shares to Be Fully Paid; Listing of
Common Stock. The Company shall provide, free from preemptive rights, out of its
authorized but unissued shares or shares held in treasury, sufficient shares to
provide for the conversion of the Notes from time to time as such Notes are
presented for conversion.
Before taking any action which would cause an adjustment reducing the
Conversion Price below the then par value, if any, of the shares of Common Stock
issuable upon conversion of the Notes, the Company will take all corporate
action which may, in the opinion of its counsel, be necessary in order that the
Company may validly and legally issue shares of such Common Stock at such
adjusted Conversion Price.
The Company covenants that all shares of Common Stock issued upon
conversion of Notes will be fully paid and non-assessable by the Company and
free from all taxes, liens and charges with respect to the issue thereof.
The Company further covenants that if at any time the Common Stock shall be
listed on any other national securities exchange or automated quotation system
the Company will, if permitted and required by the rules of such exchange or
automated quotation system, list and keep listed, so long as the Common Stock
shall be so listed on such exchange or automated quotation system, all Common
Stock issuable upon conversion of the Notes.
Section 15.9 Responsibility of Trustee. The Trustee and any other
conversion agent shall not at any time be under any duty or responsibility to
any holder of Notes to determine whether any facts exist which may require any
adjustment of the Conversion Price, or with respect to the nature or extent or
calculation of any such adjustment when made, or with respect to the method
employed, or herein or in any supplemental indenture provided to be employed, in
making the same. The Trustee and any other conversion agent shall not be
accountable with respect to the validity or value (or the kind or amount) of any
shares of Common Stock, or of any securities or property, which may at any time
be issued or delivered upon the conversion of any Note; and the Trustee and any
other conversion agent make no representations with respect thereto. Subject to
the provisions of Section 8.1, neither the Trustee nor any conversion agent
shall be responsible for any failure of the Company to issue, transfer or
deliver any shares of Common Stock or stock certificates or other securities or
property or cash upon the surrender of
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any note for the purpose of conversion or to comply with any of the duties,
responsibilities or covenants of the Company contained in this Article. Without
limiting the generality of the foregoing, neither the Trustee nor any conversion
agent shall be under any responsibility to determine the correctness of any
provisions contained in any supplemental indenture entered into pursuant to
Section 15.6 relating either to the kind or amount of shares of stock or
securities or property (including cash) receivable by Noteholders upon the
conversion of their Notes after any event referred to in such Section 15.6 or to
any adjustment to be made with respect thereto, but, subject to the provisions
of Section 8.1, may accept as conclusive evidence of the correctness of any such
provisions, and shall be protected in relying upon, the Officers' Certificate
(which the Company shall be obligated to file with the Trustee prior to the
execution of any such supplemental indenture) with respect thereto.
Section 15.10 Notice to Holders Prior to Certain Actions. In case:
(a) the Company shall declare a dividend (or any other distribution) on
its Common Stock (that would require an adjustment in the Conversion Price
pursuant to Section 15.5); or
(b) the Company shall authorize the granting to the holders of its
Common Stock of rights or warrants to subscribe for or purchase any share of any
class or any other rights or warrants; or
(c) of any reclassification of the Common Stock of the Company (other
than a subdivision or combination of its outstanding Common Stock, or a change
in par value, or from par value to no par value, or from no par value to par
value), or of any consolidation or merger to which the Company is a party and
for which approval of any shareholders 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;
the Company shall cause to be filed with the Trustee and to be mailed to each
holder of Notes at his address appearing on the Note register, provided for in
Section 2.5(a) of this Indenture, as promptly as possible but in any event at
least fifteen days prior to the applicable 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 rights or warrants, or, if a record is not to be
taken, the date as of which the holders of Common Stock of record to be entitled
to such dividend, distribution or rights 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 or occur,
and the date as of which it is expected that holders of Common Stock of record
shall be entitled to exchange their Common Stock for securities or other
property deliverable upon such reclassification, consolidation, merger, sale,
transfer, dissolution, liquidation or winding-up. Failure to give such notice,
or any defect therein, shall not affect the legality or validity of such
dividend, distribution, reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding-up.
Section 15.11 Automatic Conversion by the Company.
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(a) The Company may elect to automatically convert the Notes (an
"Automatic Conversion") at any time prior to Maturity if the Closing Market
Price of the Company's Common Stock has exceeded 150% of the Conversion Price
for at least 20 Trading Days during a 30-day Trading Day period, ending within
five Trading Days prior to the date of the Automatic Conversion Notice (as
defined below). In the event that the date on which the Notes will be
automatically converted (the "Automatic Conversion Date") occurs on or prior to
December , 2004, the Company will pay the Make-Whole Interest Payment on the
date selected for Automatic Conversion (the "Automatic Conversion Date").
(b) Unless the Company shall have theretofore 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 "Automatic
Conversion Notice") of the Automatic Conversion not more than thirty (30) days
but not less than twenty (20) days prior to the Automatic Conversion Date. The
Company shall also deliver a copy of such Automatic Conversion Notice to the
Trustee.
(c) Each Automatic Conversion Notice shall state:
(1) the Automatic Conversion Date,
(2) whether the Make-Whole Interest Payment, if any, shall be
paid by the Company and, if so, if it shall be paid in cash or by delivery
of shares of Common Stock,
(3) the place or places where such Notes are to be surrendered
for conversion and accrued and unpaid Make-Whole Interest Payment, if any,
and
(4) the Conversion Price then in effect.
(d) In the event of an Automatic Conversion, the Company shall issue
and deliver a certificate or certificates for the number of full shares of
Common Stock issuable upon conversion of the Notes and the Make-Whole Interest
Payment, if any, due on such Notes along with any cash in respect of any
fractional shares of Common Stock otherwise issuable upon conversion or in the
event that the Company elects to pay Make-Whole Interest Payment, if any, in
Common Stock instead of cash, for payment to the holder as promptly after the
Automatic Conversion Date, as practicable in accordance with the provisions of
this Article XV, but in no event later than the close of business of the next
succeeding third Business Day following such Automatic Conversion Date.
(e) All Notes subject to the Automatic 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 2.8 hereof.
(f) If any of the foregoing provisions or other provisions of this
Section 15.11 are inconsistent with applicable law at the time of such Automatic
Conversion, such law shall govern.
Section 15.12 Voluntary Conversion During First Two Years.
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(a) If a holder elects to voluntarily convert its Notes as provided in
this Article XV prior to December , 2004 and prior to the date of any
Automatic Conversion Notice (each, a "Voluntary Conversion"), the Company will
pay the applicable Make-Whole Interest Payment to such holder on the date
selected for such Voluntary Conversion (the "Voluntary Conversion Date"). In
such event, the Company will notify any applicable holder whether the Make-Whole
Interest Payment, if any, shall be paid by the Company in cash or by delivery of
shares of Common Stock.
(b) In the event of a Voluntary Conversion the Company shall issue and
deliver a certificate or certificates for the number of full shares of Common
Stock issuable upon conversion of the Notes and the Make-Whole Interest Payment,
if any, due on such Notes along with any cash in respect of any fractional
shares of Common Stock otherwise issuable upon conversion or in the event that
the Company elects to pay Make-Whole Interest Payment, if any, on Common Stock
instead of cash, for payment to the holder as promptly after the Voluntary
Conversion Date, as practicable in accordance with the provisions of this
Article XV, but in no event later than the close of business of the next
succeeding third Business Day following such Voluntary Conversion Date.
Section 15.13 Restrictions on Company's Ability to Pay any Make-Whole
Interest Payment in Common Stock. If any of the following conditions are present
at the time of an Automatic Conversion or Voluntary Conversion as contemplated
by Section 15.11 or Section 15.12, as applicable, the Make-Whole Interest
Payment shall be paid only in cash:
(a) In the event any shares of Common Stock to be issued for the
payment of Make-Whole Interest Payment on the Notes hereunder (i) require
registration under any U.S. federal securities law before such shares of Common
Stock may be freely transferable without being subject to any transfer
restrictions under the Securities Act upon an Automatic Conversion Date or
Voluntary Conversion Date, as the case may be, and if such registration is not
completed or does not become effective prior to the Automatic Conversion Date or
Voluntary Conversion Date, as the case may be, and/or (ii) require registration
with or approval of any governmental authority under any state law or any other
federal law before such shares may be validly issued or delivered upon an
Automatic Conversion Date or Voluntary Conversion Date, as the case may be, and
if such registration is not completed or does not become effective or such
approval is not obtained prior to the Automatic Conversion Date or Voluntary
Conversion Date, as applicable;
(b) In the event the shares of Common Stock are not approved for
listing on the New York Stock Exchange, the American Stock Exchange (the "Amex")
or for quotation on the Nasdaq Stock Market (the "Nasdaq") prior to the
Automatic Conversion Date or Voluntary Conversion Date, as applicable; and
(c) In the event all shares of Common Stock which may be issued with
respect to the payment of Make-Whole Interest Payment on the Notes cannot be
issued out of the Company's authorized but unissued Common Stock and will, upon
issue, be duly and validly issued and fully paid and non-assessable and free of
any preemptive rights.
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If all of the conditions set forth in this Section 15.12 are not satisfied in
accordance with the terms thereof, the interest required to be paid or duly
provided for by the Company pursuant to this Section shall be paid by the
Company only in cash.
Section 15.14 Notification to Trustee. If the Company is obligated to pay
any Make-Whole Interest Payment upon Automatic Conversion pursuant to Section
15.11(b) or upon a Voluntary Conversion pursuant to Section 15.12, it shall
deliver to the Trustee a certificate setting forth (i) the amount of interest
actually paid or provided for by the Company with respect to the affected Notes
prior to the Automatic Conversion Date or the holder's Voluntary Conversion
Date, as applicable, and (ii) if such Make-Whole Interest Payment upon Automatic
Conversion or upon a Voluntary Conversion, as applicable, is payable in Common
Stock, the number of shares of Common Stock which is equal to the Make-Whole
Interest Payment, valued at 90% of the average of the Closing Price for each of
the five (5) Trading Days through and including the second Trading Day
immediately preceding the Automatic Conversion Date or Voluntary Conversion
Date, as applicable. Unless and until the Trustee shall receive such
certificate, it shall not be charged with knowledge of the facts required by
this Section 15.14 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.
ARTICLE XVI
REPURCHASE UPON A REPURCHASE EVENT
Section 16.1 Repurchase Right. If, at any time prior to December , 2009
there shall occur a Repurchase Event, then each Noteholder 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
(40) calendar days after the date of the Company Notice (as defined in Section
16.2(b) below) of such Repurchase Event (or, if such 40th day is not a Business
Day, the next succeeding Business Day). Such repurchase shall be made in cash at
a price equal to 105% of the principal amount of Notes such holder elects to
require the Company to repurchase, together with accrued and unpaid interest, if
any, up to but excluding the repurchase date (the "Repurchase Price") (or, at
the option of the Company, by delivery of Common Stock in accordance with the
provisions of Section 16.3) provided, however, that if such Repurchase Date is
June or December , then the
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interest payable on such date shall be paid to the holder of record of the Note
on the next preceding June or December , respectively. No Notes may be
redeemed at the option of holders upon a Repurchase Event if there has occurred
and is continuing an Event of Default, other than a default in the payment of
the Repurchase Price with respect to such Notes on the Repurchase Date.
Section 16.2 Notices; Method of Exercising Repurchase Right, Etc.
(a) Reserved.
(b) Unless the Company shall have theretofore called for redemption all
of the outstanding Notes, on or before the fifteenth (15th) calendar day after
the occurrence of a Repurchase Event, the Company or, at the written request of
the Company, the Trustee, shall mail to all holders of record of the Notes a
notice (the "Company Notice") in the form as prepared by the Company of the
occurrence of the Repurchase Event and of the repurchase right set forth herein
arising as a result thereof. The Company shall also deliver a copy of such
Company Notice to the Trustee and cause a copy of such Company Notice, or a
summary of the information contained therein, to be published once in a
newspaper of general circulation in The City of New York. The Company Notice
shall contain the following information:
(1) the repurchase date;
(2) the date by which the repurchase right must be exercised;
(3) the last date by which the election to require repurchase,
if submitted, must be revoked;
(4) the Repurchase Price and whether the Repurchase Price shall
be payable in cash or Common Stock and, if payable in Common Stock, the
method of calculating the amount of the Common Stock to be delivered upon
the repurchase as provided in Section 16.3(a);
(5) a description of the procedure which a holder must follow to
exercise a repurchase right;
(6) the Conversion Price then in effect, the date on which the
right to convert the principal amount of the Notes to be repurchased will
terminate and the place or places where Notes may be surrendered for
conversion; and
(7) the CUSIP numbers of the Notes.
No failure of the Company to give the foregoing notices or defect therein
shall limit any holder's right to exercise a repurchase right or affect the
validity of the proceedings for the repurchase of Notes.
If any of the foregoing provisions are inconsistent with applicable law,
such law shall govern.
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(c) To exercise a repurchase right, a holder shall deliver to the
Trustee on or before the thirty-fifth (35th) day after the Company Notice was
delivered (i) written notice to the Company (or agent designated by the Company
for such purpose) of the holder's exercise of such right, which notice shall set
forth the name of the holder, the principal amount of the Notes to be
repurchased, a statement that an election to exercise the repurchase right is
being made thereby, and, in the event that the Repurchase Price shall be paid in
shares of Common Stock, the name or names (with addresses) in which the
certificate or certificates for shares of Common Stock shall be issued, and (ii)
the Notes with respect to which the repurchase right is being exercised, duly
endorsed for transfer to the Company. Election of repurchase by a holder shall
be revocable at any time prior to, but excluding, the repurchase date, by
delivering written notice to that effect to the Trustee prior to the close of
business on the Business Day prior to the repurchase date.
(d) If the Company fails to repurchase on the repurchase date any Notes
(or portions thereof) as to which the repurchase right has been properly
exercised, then the principal of such Notes shall, until paid, bear interest to
the extent permitted by applicable law from the repurchase date at the rate
borne by the Note and each such Note shall be convertible into Common Stock in
accordance with this Indenture (without giving effect to Section 16.2(b)) until
the principal of such Note shall have been paid or duly provided for.
(e) Any Note which is to be repurchased only in part shall be
surrendered to the Trustee duly endorsed for transfer to the Company and
accompanied by appropriate evidence of genuineness and authority 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, containing identical terms and conditions,
of any authorized denomination as requested by such holder in aggregate
principal amount equal to and in exchange for the unrepurchased portion of the
principal of the Note so surrendered.
(f) On or prior to the repurchase 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 5.4) the
Repurchase Price in cash for payment to the holder on the repurchase date;
provided that if payment is to be made in cash, such cash payment is made on the
repurchase date it must be received by the Trustee or paying agent, as the case
may be, by 10:00 a.m., New York City time, on such date; provided further that
if the Repurchase Price is to be paid in shares of Common Stock, such shares of
Common Stock are to be paid as promptly after the repurchase date as
practicable.
(g) Any issuance of shares of Common Stock in respect of the Repurchase
Price shall be deemed to have been effected immediately prior to the close of
business on the repurchase date and the person or persons in whose name or names
any certificate or certificates for shares of Common Stock shall be issuable
upon such repurchase shall be deemed to have become on the repurchase date the
holder or holders of record of the shares represented thereby; provided,
however, that any surrender for repurchase on a date when the stock transfer
books of the Company shall be closed shall constitute the person or persons in
whose name or names the certificate or certificates for such shares are to be
issued as the record holder or holders thereof for all purposes at the opening
of business on the next succeeding day on which such stock
73
transfer books are open. No payment or adjustment shall be made for dividends or
distributions on any Common Stock issued upon repurchase of any Note declared
prior to the repurchase date.
(h) No fractions of shares shall be issued upon repurchase of Notes. If
more than one Note shall be repurchased from the same holder and the Repurchase
Price shall be payable in shares of Common Stock, the number of full shares
which shall be issuable upon such repurchase shall be computed on the basis of
the aggregate principal amount of the Notes so repurchased. Instead of any
fractional share of Common Stock which would otherwise be issuable on the
repurchase of any Note or Notes, the Company will deliver to the applicable
holder its check for the current market value of such fractional share. The
current market value of a fraction of a share is determined by multiplying the
current market price of a full share by the fraction, and rounding the result to
the nearest cent. For purposes of this Section, the current market price of a
share of Common Stock is the Closing Price of the Common Stock on the Trading
Day immediately preceding the repurchase date.
(i) Any issuance and delivery of certificates for shares of Common
Stock on repurchase of Notes shall be made without charge to the holder of Notes
being repurchased for such certificates or for any tax or duty in respect of the
issuance or delivery of such certificates or the securities represented thereby;
provided, however, that the Company shall not be required to pay any tax or duty
which may be payable in respect of (i) income of the holder or (ii) any transfer
involved in the issuance or delivery of certificates for shares of Common Stock
in a name other than that of the holder of the Notes being repurchased, and no
such issuance or delivery shall be made unless and until the person requesting
such issuance or delivery has paid to the Company the amount of any such tax or
duty or has established, to the satisfaction of the Company, that such tax or
duty has been paid.
(j) All Notes delivered for repurchase shall be delivered to the
Trustee to be canceled in accordance with the provisions of Section 2.8.
Section 16.3 Conditions to the Company's Election to Pay the Repurchase
Price in Common Stock. The Company may elect to pay the Repurchase Price by
delivery of shares of Common Stock pursuant to Section 16.1 if and only if the
following conditions shall have been satisfied:
(a) the shares of Common Stock deliverable in payment of the Repurchase
Price shall have a fair market value as of the repurchase date of not less than
the Repurchase Price. For purposes of Section 16.1 and this Section 16.3, the
fair market value of shares of Common Stock shall be determined by the Company
and shall be equal to 95% of the average of the Closing Price of the Common
Stock for each of the five consecutive Trading Days immediately preceding the
second Trading Day prior to the Repurchase Date;
(b) the Repurchase Price shall be paid only in cash in the event any
shares of Common Stock to be issued upon repurchase of Notes hereunder (i)
require registration under any federal securities law before such shares may be
freely transferable without being subject to any transfer restrictions under the
Securities Act upon repurchase and if such registration is not completed or does
not become effective prior to the repurchase date, and/or (ii) require
registration with or approval of any governmental authority under any state law
or any other
74
federal law before such shares may be validly issued or delivered upon
repurchase and if such registration is not completed or does not become
effective or such approval is not obtained prior to the repurchase date;
(c) payment of the Repurchase Price may not be made in Common Stock
unless such stock is, or shall have been, or approved for quotation on the
Nasdaq National Market or listed on a national securities exchange, in either
case, prior to the repurchase date; and
(d) all shares of Common Stock which may be issued upon repurchase of
the Notes will be issued out of the Company's authorized but unissued Common
Stock and, will upon issue, be duly and validly issued and fully paid and
non-assessable and free of any preemptive rights.
If all of the conditions set forth in this Section 16.3 are not satisfied
in accordance with the terms thereof, the Repurchase Price shall be paid by the
Company only in cash.
Section 16.4 Certain Definitions. For purposes of this Article XVI:
(a) the term "beneficial owner" shall be determined in accordance with
Rule 13d-3 and 13d-5, as in effect on the date of the original execution of this
Indenture, promulgated by the Commission pursuant to the Exchange Act;
(b) the term "person" or "group" shall include any syndicate or group
which would be deemed to be a "person" under Section 13(d) and 14(d) of the
Exchange Act as in effect on the date of the original execution of this
Indenture;
(c) the term "Continuing Director" means at any date a member of the
Company's Board of Directors (i) who was a member of such board on November 5,
2002 or (ii) who was nominated or elected by at least a majority of the
directors who were Continuing Directors at the time of such nomination or
election or whose election to the Company's Board of Directors was recommended
or endorsed by at least a majority of the directors who were Continuing
Directors at the time of such nomination or election or such lesser number
comprising a majority of a nominating committee comprised of our independent
directors if authority for such nominations or elections has been delegated to a
nominating committee whose authority and composition have been approved by at
least a majority of the directors who were continuing directors at the time such
committee was formed. (Under this definition, if the Board of Directors of the
Company as of the date of this Indenture were to approve a new director or
directors and then resign, no Change in Control would occur even though the
current Board of Directors would thereafter cease to be in office);
(d) the term "Repurchase Event" means a Change in Control or a
Termination of Trading;
(e) a "Change in Control" shall be deemed to have occurred when: (i)
any "person" or "group" (as such terms are used in Sections 13(d) and 14(d) of
the Exchange Act) is or becomes the "beneficial owner" (as defined in Rules
13-d3 and 13-d5 under the Exchange Act) of shares representing more than 50% of
the combined voting power of the then outstanding securities entitled to vote
generally in elections of directors of the Company (the "Voting Stock"); (ii)
approval by stockholders of the Company of any plan or proposal for the
liquidation,
75
dissolution or winding up of the Company; (iii) the Company (A) consolidates
with, merges into or participates in a share exchange with any other corporation
partnership or limited liability company or any other corporation partnership or
limited liability company merges into the Company, and in the case of any such
merger, consolidation or share exchange, the outstanding Common Stock of the
Company is changed or exchanged into other assets or securities as a result, or
(B) conveys, transfers or leases all or substantially all of its assets to any
person; or (iv) any time Continuing Directors do not constitute a majority of
the Board of Directors of the Company (or, if applicable, a successor
corporation to the Company); provided that a Change in Control shall not be
deemed to have occurred if either (x) the Closing Price (as defined in Section
15.5(h)(1) hereof) of the Common Stock for any five (5) Trading Days during the
ten (10) Trading Days immediately preceding the Change in Control is at least
equal to 105% of the Conversion Price in effect on the date on which the Change
in Control occurs or (y) in the event of a transaction specified in (i) or (iii)
(A) above, if the stockholders of the Company immediately before such
transaction constituting the Change in Control own, directly or indirectly,
immediately following such transaction, at least 51% of the combined voting
power of the outstanding voting securities resulting from such Change in Control
in substantially the same proportion as their ownership of the voting stock
immediately before such transaction, or (z) in the case of a transaction
specified in (iii) above constituting a Change in Control, all of the
consideration (excluding cash payments for fractional shares) in such merger or
consolidation constituting the Change in Control consists of common stock traded
on a United States national securities exchange or quoted on the Nasdaq National
Market (or which will be so traded or quoted when issued or exchanged in
connection with such Change in Control) and as a result of such transaction or
transactions such Notes become convertible solely into such common stock; and
(f) a "Termination of Trading" shall have occurred if the Common Stock
(or other common stock into which the Notes are then convertible) is neither
listed for trading on a United States national securities exchange nor approved
for trading on an established automated over-the-counter trading market in the
United States.
ARTICLE XVII
MISCELLANEOUS PROVISIONS
Section 17.1 Provisions Binding on Company's Successors. All the covenants,
stipulations, promises and agreements of the Company in this Indenture contained
shall bind its successors and assigns whether so expressed or not.
Section 17.2 Official Acts by Successor Corporation. Any act or proceeding
by any provision of this Indenture authorized or required to be done or
performed by any board, committee or officer of the Company shall and may be
done and performed with like force and effect by the like board, committee or
officer of any corporation that shall at the time be the lawful sole successor
of the Company.
Section 17.3 Addresses for Notices, Etc. Any notice or demand which by any
provision of this Indenture is required or permitted to be given or served by
the Trustee or by the holders of Notes on the Company shall be deemed to have
been sufficiently given or made, for all purposes
76
if given or served by being deposited postage prepaid by registered or certified
mail in a post office letter box addressed (until another address is filed by
the Company with the Trustee) to Alkermes, Inc., 00 Xxxxxx Xxxxxx, Xxxxxxxxx, XX
00000-0000, Attention: Chief Financial Officer. Any notice, direction, request
or demand hereunder to or upon the Trustee shall be deemed to have been
sufficiently given or made, for all purposes, if given or served by being
deposited postage prepaid by registered or certified mail in a post office
letter box addressed to the Corporate Trust Office.
The Trustee, by notice to the Company, may designate additional or
different addresses for subsequent notices or communications.
Any notice or communication mailed to a Noteholder shall be mailed to him
by first class mail, postage prepaid, at his address as it appears on the Note
register and shall be sufficiently given to him if so mailed within the time
prescribed.
Failure to mail a notice or communication to a Noteholder or any defect in
it shall not affect its sufficiency with respect to other Noteholders. If a
notice or communication is mailed in the manner provided above, it is duly
given, whether or not the addressee receives it.
SECTION 17.4 GOVERNING LAW. THIS INDENTURE AND EACH NOTE SHALL BE DEEMED TO
BE A CONTRACT MADE UNDER THE LAWS OF NEW YORK, AND FOR ALL PURPOSES SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAWS OF NEW YORK (WITHOUT REGARD TO THE
CONFLICT OF LAWS PROVISIONS THEREOF).
Section 17.5 Evidence of Compliance with Conditions Precedent; Certificates
to Trustee. Upon any application or demand by the Company to the Trustee to take
any action under any of the provisions of this Indenture, the Company shall
furnish to the Trustee an Officers' Certificate stating that all conditions
precedent, if any, provided for in this Indenture relating to the proposed
action have been complied with, and an Opinion of Counsel stating that, in the
opinion of such counsel, all such conditions precedent have been complied with.
Each certificate or opinion provided for by or on behalf of the Company in
this Indenture and delivered to the Trustee with respect to compliance with a
condition or covenant provided for in this Indenture shall include (1) a
statement that the person making such certificate or opinion has read such
covenant or condition; (2) a brief statement as to the nature and scope of the
examination or investigation upon which the statement or opinion contained in
such certificate or opinion is based; (3) a statement that, in the opinion of
such person, he has made such examination or investigation as is necessary to
enable him to express an informed opinion as to whether or not such covenant or
condition has been complied with; and (4) a statement as to whether or not, in
the opinion of such person, such condition or covenant has been complied with.
Section 17.6 Legal Holidays. In any case where the date of maturity or
interest on or principal of the Notes or the date fixed for redemption of any
Note will not be a Business Day, then payment of such interest on or principal
of the Notes need not be made on such date, but may be made on the next
succeeding Business Day with the same force and effect as if made on
77
the date of maturity or the date fixed for redemption, and no interest shall
accrue for the period from and after such date.
Section 17.7 No Note Interest Created. Nothing in this Indenture or in the
Notes, expressed or implied, shall be construed to constitute a security
interest under the Uniform Commercial Code or similar legislation, as now or
hereafter enacted and in effect, in any jurisdiction.
Section 17.8 Trust Indenture Act. This Indenture is hereby made subject to,
and shall be governed by, the provisions of the Trust Indenture Act required to
be part of and to govern indentures qualified under the Trust Indenture Act;
provided, however, that, unless otherwise required by law, notwithstanding the
foregoing, this Indenture and the Notes issued hereunder shall not be subject to
the provisions of subsections (a)(1), (a)(2), and (a)(3) of Section 314 of the
Trust Indenture Act as now in effect as hereafter amended or modified; provided
further that this Section 17.8 shall not require that this Indenture or the
Trustee be qualified under the Trust Indenture Act prior to the time such
qualification is in fact required under the terms of the Trust Indenture Act,
nor shall it constitute any admission or acknowledgment by any party hereto that
any such qualification is required prior to the time such qualification is in
fact required under the terms of the Trust Indenture Act. If any provision
hereof limits, qualifies or conflicts with another provision hereof which is
required to be included in an indenture qualified under the Trust Indenture Act,
such required provision shall control.
Section 17.9 Benefits of Indenture. Nothing in this Indenture or in the
Notes, expressed or implied, shall give to any person, other than the parties
hereto, any paying agent, any authenticating agent, any Note registrar and their
successors hereunder, the holders of Notes and the holders of Senior
Indebtedness, any benefit or any legal or equitable right, remedy or claim under
this Indenture.
Section 17.10 Table of Contents, Headings, Etc. The table of contents and
the titles and headings of the articles and sections of this Indenture have been
inserted for convenience of reference only, are not to be considered a part
hereof, and shall in no way modify or restrict any of the terms or provisions
hereof.
Section 17.11 Authenticating Agent. The Trustee may appoint an
authenticating agent which shall be authorized to act on its behalf and subject
to its direction in the authentication and delivery of Notes in connection with
the original issuance thereof and transfers and exchanges of Notes hereunder,
including under Sections 2.4, 2.5, 2.6, 2.7 and 3.3, as fully to all intents and
purposes as though the authenticating agent had been expressly authorized by
this Indenture and those Sections to authenticate and deliver Notes. For all
purposes of this Indenture, the authentication and delivery of Notes by the
authenticating agent shall be deemed to be authentication and delivery of such
Notes "by the Trustee" and a certificate of authentication executed on behalf of
the Trustee by an authenticating agent shall be deemed to satisfy any
requirement hereunder or in the Notes for the Trustee's certificate of
authentication. Such
78
authenticating agent shall at all times be a person eligible to serve as trustee
hereunder pursuant to Section 8.9.
Any corporation into which any authenticating agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, consolidation or conversion to which any authenticating agent
shall be a party, or any corporation succeeding to the corporate trust business
of any authenticating agent, shall be the successor of the authenticating agent
hereunder, if such successor corporation is otherwise eligible under this
Section, without the execution or filing of any paper or any further act on the
part of the parties hereto or the authenticating agent or such successor
corporation.
Any authenticating agent may at any time resign by giving written notice of
resignation to the Trustee and to the Company. The Trustee may at any time
terminate the agency of any authenticating agent by giving written notice of
termination to such authenticating agent and to the Company. Upon receiving such
a notice of resignation or upon such a termination, or in case at any time any
authenticating agent shall cease to be eligible under this Section, the Trustee
shall promptly appoint a successor authenticating agent (which may be the
Trustee), shall give written notice of such appointment to the Company and shall
mail notice of such appointment to all holders of Notes as the names and
addresses of such holders appear on the Note register.
The Trustee agrees to pay to the authenticating agent from time to time
reasonable compensation for its services (to the extent pre-approved by the
Company in writing), and the Trustee shall be entitled to be reimbursed for such
pre-approved payments, subject to Section 8.6.
The provisions of Sections 8.2, 8.3, 8.4, 9.3 and this Section 17.11 shall
be applicable to any authenticating agent.
Section 17.12 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.
State Street Bank and Trust Company hereby accepts the trusts in this
Indenture declared and provided, upon the terms and conditions hereinabove set
forth.
79
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly signed, and their respective corporate seals to be hereunto affixed and
attested, all as of the date first written above.
ALKERMES, INC.
By:
-----------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President, Chief
Financial Officer and
Treasurer
Attest:
-----------------------------
Name:
Title:
[seal]
STATE STREET BANK AND TRUST
COMPANY
as Trustee
By:
-----------------------------
Name:
Title:
80
FACE OF NOTE
GLOBAL SECURITIES 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 SUCH NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO SUCH ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC) ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS
THE REGISTERED OWNED HEREOF HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT
NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S
NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO
TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE
REFERRED TO ON THE REVERSE HEREOF.
A-1
No. Cusip No.
ALKERMES, INC.
6.52% CONVERTIBLE SENIOR SUBORDINATED NOTE
DUE 2009
Alkermes, Inc., a corporation duly organized and validly existing under the
laws of the Commonwealth of Pennsylvania (the "Company," which term includes any
successor corporation under the Indenture referred to on the reverse side
hereof), for value received promises to pay to Cede & Co. or registered assigns,
the principal sum indicated on Schedule A hereof on December 31, 2009, and to
pay interest thereon in the manner set forth on the reverse hereof accruing from
December , 2002 at the rate of 6.52% per annum.
Interest Payment Dates: June 30 and December 31, commencing June 30, 2003
Record Dates: June 15 and December 15
Reference is hereby made to the further provisions of this Note set forth
on the reverse hereof, including, without limitation, provisions subordinating
the payment of principal of and premium, if any, and interest on this Note to
the prior payment in full of all Senior Indebtedness as defined in the Indenture
and provisions giving the holder of this Note the right to convert this Note
into Common Stock of the Company on the terms and subject to the limitations
referred to on the reverse side hereof and as more fully specified in the
Indenture. Such further provisions shall for all purposes have the same effect
as if set forth at this place.
THIS NOTE SHALL BE DEEMED TO BE A CONTRACT MADE UNDER THE LAWS OF THE STATE
OF NEW YORK, AND FOR ALL PURPOSES SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAWS OF SAID STATE.
This Note shall not be valid or become obligatory for any purpose until the
certificate of authentication hereon shall have been manually signed by the
Trustee or a duly authorized authenticating agent under the Indenture.
A-2
IN WITNESS WHEREOF, Alkermes, Inc. has caused this Note to be signed
manually or by facsimile by its duly authorized officers.
Dated:
---------------------
ALKERMES, INC.
By:
---------------------------
By:
---------------------------
[Seal]
TRUSTEE'S CERTIFICATE
OF AUTHENTICATION
This is one of the 6.52% Convertible Senior Subordinated Notes due December ,
2009 described in the within-mentioned Indenture.
STATE STREET BANK AND TRUST COMPANY,
as Trustee
By:
---------------------------
Authorized Signatory
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ALKERMES, INC.
6.52% CONVERTIBLE SENIOR SUBORDINATED NOTE DUE DECEMBER 31, 2009
1. Interest. Alkermes, Inc., a corporation duly organized and validly
existing under the laws of the Commonwealth of Pennsylvania (the "Company" which
term includes any successor corporation under the Indenture referred to on the
reverse hereof), is the issuer of this 6.52% Convertible Senior Subordinated
Note due December 31, 2009 (the "Note"). The Company promises to pay interest on
the Note in cash or in Common Stock, at the option of the Company, semiannually
on each June 30 and December 31, commencing on June 30, 2003, to holders of
record on the immediately preceding June 15 and December 15.
In the event that the Company elects to pay interest in the Company's Common
Stock, such Common Stock will be valued at 90% of the average of the Closing
Price for each of the five Trading Days immediately preceding the second Trading
Day prior to the applicable interest payment date.
Interest on the Note will accrue from the most recent date to which interest
has been paid, or if no interest has been paid, from December , 2002. Interest
will be computed on the basis of a 360-day year of twelve 30-day months.
2. Method of Payment. The Company will pay interest on the Note (except
defaulted interest) to the person who is registered holder of the Note entitled
to such payments at the close of business on the record date for the next
interest payment date even though the Note is canceled after the record date and
on or before the interest payment date. The Noteholder hereof must surrender the
Note to a Paying Agent to collect principal payments. The Company will pay
principal and interest in money of the United States that at the time of payment
is legal tender for payment of public and private debts. However, the Company
may pay principal and interest by check payable in such money. It may mail an
interest check to the registered address of the person entitled to thereto;
provided further that, with respect to the holder of the Note with an aggregate
principal amount equal to or in excess of $2 million, at the request of such
holder in writing to the Company, interest on the Note shall be paid by wire
transfer in immediately available funds in accordance with the wire instruction
supplied by such holder to the Trustee and Paying Agent (if different from the
Trustee).
3. Paying Agent and Registrar. The Trustee will act as Paying Agent,
Registrar and Conversion Agent. The Company may change any Paying Agent,
Registrar, co-registrar or Conversion Agent without prior notice. The Company or
any of its Affiliates may act in any such capacity.
4. Indenture. The Company issued the Notes under an Indenture, dated as of
December , 2002 (the "Indenture"), between the Company and State Street Bank
and Trust Company, as Trustee. The terms of this Note include those stated in
the Indenture (which is incorporated hereby as though fully set forth herein)
and those made part of the Indenture by the Trust
A-4
Indenture Act of 1939 (15 U.S. Code Sections 77aaa-77bbbb) as in effect on the
date of the Indenture. The Note is subject to, and ratified by, all such terms,
certain of which are summarized herein, and Noteholder is referred to the
Indenture and such Act for a statement of such terms. The Note is an unsecured
obligation of the Company limited to (except as otherwise provided in the
Indenture) up to an aggregate principal amount of $165,000,000 and is
subordinated in right of payment to all existing and future Senior Indebtedness
of the Company as provided in the Indenture. The Indenture does not limit the
ability of the Company or any of its Subsidiaries to incur indebtedness or to
grant security interests or liens in respect of their assets. Any holder of this
Note shall be deemed to have agreed to and be bound by all the terms and
conditions contained in the Indenture applicable to a holder of a Note. All
capitalized terms herein that are not otherwise defined shall have the meaning
ascribed thereto in the Indenture.
5. Optional Redemption. The Note is not subject to redemption at the
Company's option prior to January 1, 2005. On such date and thereafter, the
Note will be subject to redemption from time to time on any date prior to
maturity at the option of the Company, in whole or in part (in any integral
multiple of $1,000), upon not less than twenty (20) nor more than sixty (60)
days' notice by mail prior to the redemption date at the following redemption
price (expressed as a percentage of the principal amount set forth below):
REDEMPTION
PERIOD PRICE
------ ----------
January 1, 2005 to December 30, 2005................... 104.657%
December 31, 2005 to December 30, 2006................. 103.726%
December 31, 2006 to December 30, 2007................. 102.794%
December 31, 2007 to December 30, 2008................. 101.863%
December 31, 2008 to December 30, 2009................. 100.931%
December 31, 2009 (maturity)........................... 100.000%
in each case together with accrued and unpaid interest up to but not including
the redemption date (subject to the right of holder of record on the relevant
record date to receive interest due on an interest payment date). Unless the
Company defaults in making such redemption payment, or the Paying Agent is
prohibited from making such payment pursuant to the Indenture, interest will
cease to accrue on the Note or portions of it called for redemption on and
after the redemption date.
6. Notice of Redemption. Notice of redemption will be mailed at least
twenty (20) days but not more than sixty (60) days before the redemption date to
the holder of this Note to be redeemed at its address of record. Any portion of
this Note in denominations larger than $1,000 may be redeemed in part but only
in integral multiples of $1,000. In the event less than all of the Note is to be
redeemed, the Trustee will choose the Notes for redemption in accordance with
the Indenture. If this Note is redeemed subsequent to a record date with respect
to any interest payment date specified above and on or prior to such interest
payment date, then any accrued interest payable on such interest payment date
will be paid to the person in whose name this Note is registered at the close of
business on such record date.
A-5
7. Mandatory Redemption. The Company will not be required to make mandatory
redemption payments with respect to the Note. There are no sinking fund
payments with respect to the Note.
8. Repurchase at Option of Holder. If at any time prior to the maturity
date there shall occur a Repurchase Event, then the Noteholder will have the
right, at its option, to require the Company to repurchase this Note or any
portion thereof (in principal amounts of $1,000 or integral multiples thereof)
at a repurchase price equal to 105% of the principal amount of the Note
submitted to the Company for repurchase, plus accrued and unpaid interest to but
excluding the repurchase date. If this Note is subject to a Repurchase Event, a
notice of the Repurchase Event will be mailed to the holder from the Company.
The Company will be required to repurchase all or any portion of the Note
tendered by the holder on a date that is forty (40) days after the Company mails
the notice on the Repurchase Event to the holder. The Noteholder has the right
to withdraw its election by delivering a written notice of withdrawal to the
Paying Agent in accordance with the terms of the Indenture. The Company may pay
the repurchase price in cash or Common Stock, at its option. If the Company
elects to pay the repurchase price in Common Stock, the Company will deliver
that number of shares of Common Stock valued at 95% of the average of the
closing price for each of the five Trading Days immediately preceding the
second Trading Day prior to the repurchase date.
9. Subordination. The payment of the principal of, premium, if any,
interest on, or any other amounts due on the Note is subordinated in right of
payment to all existing and future Senior Indebtedness of the Company, as
described in the Indenture. The Noteholder, by accepting this Note, agrees to
such subordination and authorizes and directs the Trustee on its behalf to take
such action as may be necessary or appropriate to effectuate the subordination
so provided and appoints the Trustee as its attorney-in-fact for such purpose.
10. Conversion. The holder of this Note has the right at any time prior to
the close of business (New York time) on a redemption date or maturity date, to
convert the principal amount hereof (or any portion hereof that is an integral
multiple of $1,000) into shares of Common Stock at the initial Conversion Price
of $ , which is equal to a 17-1/2% premium over the simple average of the
daily volume weighted average price of the Common Stock for each of the
five Trading Days immediately preceding the third Trading Day prior to the
expiration of the exchange offer, subject to adjustment under certain
circumstances as more fully described in the Indenture, except that if the Note
is called for redemption, the conversion right will terminate at the close of
business on the Business Day immediately preceding the date fixed for
redemption.
To convert this Note, the holder must (1) complete and sign a notice of election
to convert substantially in the form set forth below, (2) surrender the Note to
the Conversion Agent, (3) furnish appropriate endorsements or transfer documents
if required by the Registrar or Conversion Agent and (4) pay any transfer or
similar tax, if required. Upon conversion, no adjustment or payment will be made
for interest or dividends, but if the Noteholder surrenders the Note for
conversion after the close of business on the record date for the payment of an
installment of interest and prior to the opening of business on the next
interest payment date, then, notwithstanding such conversion, the interest
payable on such interest payment date will be paid to the registered holder of
the Note on such record date. In such event, this Note, when surrendered for
conversion, must be accompanied by payment in funds acceptable to the
A-6
Company of an amount equal to the interest payable on such interest payment date
on the portion so converted. The number of shares of Common Stock issuable upon
conversion of this Note is determined by dividing the principal amount of the
Note converted by the Conversion Price in effect on the Conversion Date. No
fractional shares will be issued upon conversion but a cash adjustment will be
made for any fractional interest.
The portion of this Note in respect of which the holder has delivered an "Option
of Noteholder to Elect Purchase" form appearing below exercising the option of
the holder to require the Company to purchase such portion of this Note may be
converted only if the notice of exercise is withdrawn as provided above and in
accordance with the terms of the Indenture. The above description of conversion
of the Note is qualified by reference to, and is subject in its entirety by, the
more complete description thereof contained in the Indenture.
11. Automatic Conversion by Company. If at any time the Closing Price of the
Company's Common Stock exceeds 150% of the Conversion Price for at least 20
Trading Days during a 30-day Trading Day period ending within five Trading Days
prior to the notice of Automatic Conversion, the Company may elect to
automatically convert the Note pursuant to the terms of the Indenture. In the
event that the date that the Note will be automatically converted occurs on or
prior to December , 2004, the Company will pay to the holder the Make-Whole
Interest Payment in cash or, at the Company's option, in Common Stock, equal to
two full years of interest on the Note, less any interest actually paid or
provided for on the Note. If the Company elects to pay the Make-Whole Interest
Payment, if any, on the Note in Common Stock, the shares of Common Stock will be
valued at 90% of the average of the Closing Price for each of the five Trading
Days immediately preceding the second Trading Day prior to date of Automatic
Conversion.
12. Voluntary Conversion by Holder. If the holder elects to voluntarily
convert this Note, or any portion hereof (in integral multiples of $1,000) at
any time on or prior to December , 2004, the holder will receive a
Make-Whole Interest Payment upon conversion so long as the Company has not
previously mailed an Automatic Conversion Notice to holders. In the event that
the Company elects to pay Make-Whole Interest Payment, if any, on the Note in
Common Stock upon a voluntary conversion, the shares of Common Stock will be
valued at 90% of the average of the Closing Price for the five Trading Days
immediately preceding the second Trading Day prior to the Voluntary Conversion
Date less interest actually paid or provided for with respect to the Note prior
to the date of such Voluntary Conversion.
13. Denominations, Transfer, Exchange. The Note is in global form, without
coupons, in denominations of $1,000 and integral multiples of $1,000. The
transfer of the Note may be registered, and the Note may be exchanged, as
provided in the Indenture. The Registrar may require the Noteholder, among other
things, to furnish appropriate endorsements and transfer documents and to pay
any taxes and fees required by law or permitted by the Indenture. The Registrar
need not exchange or register the transfer of the Note or portion of the Note
selected for redemption (except the unredeemed portion of the Note being
redeemed in part). Also, the Registrar need not exchange or register the
transfer of the Note for a period of 15 days before a selection of the Notes to
be redeemed.
A-7
14. Defaults and Remedies. The Note shall have the Events of Default as set
forth in Section 8.1 of the Indenture. Subject to certain limitations in the
Indenture, if an Event of Default occurs and is continuing, the Trustee by
notice to the Company or the Noteholders of at least 25% in aggregate principal
amount of the then outstanding Notes by notice to the Company and the Trustee
may declare all the Notes to be due and payable immediately, except that in the
case of an Event of Default arising from certain events of bankruptcy or
insolvency, all unpaid principal, interest accrued on the Notes shall become due
and payable immediately without further action or notice.
The Noteholders of a majority in principal amount of the Notes then outstanding
by written notice to the Trustee may rescind an acceleration and its
consequences if the rescission would not conflict with any judgment or decree
and if all existing Events of Default have been cured or waived except
nonpayment of principal or interest that has become due solely because of the
acceleration. Noteholders may not enforce the Indenture or the Notes except as
provided in the Indenture. Subject to certain limitations, Noteholders of a
majority in principal amount of the then outstanding Notes issued under the
Indenture may direct the Trustee in its exercise of any trust or power. The
Company must furnish compliance certificates to the Trustee annually. The above
description of Events of Default and remedies is qualified by reference to, and
subject in its entirety by, the more complete description thereof contained in
the Indenture.
15. Amendments, Supplements and Waivers. Subject to certain exceptions, the
Indenture or the Notes may be amended or supplemented with the consent of the
Noteholders of at least a majority in principal amount of the then outstanding
Notes (including consents obtained in connection with a tender offer or exchange
offer for Notes), and any existing default may be waived with the consent of the
Noteholders of a majority in principal amount of the then outstanding Notes
including consents obtained in connection with a tender offer or exchange offer
for Notes. Without the consent of any Noteholder, the Indenture or the Notes may
be amended, among other things, to cure any ambiguity, defect or inconsistency,
to provide for assumption of the Company's obligations to Noteholders, to make
any change that does not adversely affect the rights of any Noteholder, to
qualify the Indenture under the TIA, and to comply with the requirements of the
Commission in order to maintain the qualification of the Indenture under the
TIA.
16. Trustee Dealings with the Company. The Trustee, in its individual or any
other capacity, may become the owner or pledgee of Notes and may otherwise deal
with the Company or an Affiliate with the same rights it would have if it were
not Trustee, subject to certain limitations provided for in the Indenture and in
the TIA. Any Agent may do the same with like rights.
A-8
17. No Recourse Against Others. A director, officer, employee or
stockholder, as such, of the Company shall not have any liability for any
obligations of the Company under the Note or the Indenture or for any claim
based on, in respect of or by reason of such obligations. The Noteholder, by
accepting this Note, waives and releases all such liability. The waiver and
release are part of the consideration for the issue of the Note.
18. Authentication. The Note shall not be valid until authenticated by the
manual signature of an authorized officer of the Trustee or an authenticating
agent.
19. Abbreviations. Customary abbreviations may be used in the name of a
Noteholder or an assignee, such as: TEN COM (for tenants in common), TEN ENT
(for tenants by the entireties), JT TEN (for joint tenants with right of
survivorship and not as tenants in common), CUST (for Custodian), and U/G/M/A
(for Uniform Gifts to Minors Act).
A-9
TO BE ATTACHED TO GLOBAL NOTE
SCHEDULE A
The initial principal amount at maturity of this Global Note shall be
$000,000,000. The following increases or decreases in the principal amount of
this Global Note have been made:
------------ ------------------------- ---------------------------- --------------------------- --------------------------
SIGNATURE OF
PRINCIPAL AMOUNT OF AUTHORIZED
THIS GLOBAL OFFICER OF
AMOUNT OF INCREASE AMOUNT OF DECREASE IN NOTE FOLLOWING TRUSTEE OR
DATE IN PRINCIPAL AMOUNT OF PRINCIPAL AMOUNT OF SUCH DECREASE OR SECURITIES
MADE THIS GLOBAL NOTE THIS GLOBAL NOTE INCREASE CUSTODIAN
------------ ------------------------- ---------------------------- --------------------------- --------------------------
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A-10
OPTION OF NOTEHOLDER TO ELECT PURCHASE
If you want to elect to have this Note or a portion thereof repurchased by the
Company pursuant to Section 16.2 of the Indenture, check the box: [ ]
If the purchase is in part, indicate the portion (in denominations of $1,000 or
any integral multiple thereof) to be purchased: __________
Your Signature: ________________________________________________________________
(Sign exactly as your name appears on the other side of this Note)
Date: _______________
Signature Guarantee:(1) ______________________________________________________
--------
(1) Signature must be guaranteed by a commercial bank, trust company or member
firm of the New York Stock Exchange.
A-11
ELECTION TO CONVERT
To: Alkermes, Inc.
The undersigned owner of $________ in principal amount of Alkermes, Inc.'s 6.52%
Convertible Senior Subordinated Notes due December 31, 2009 (the "Note") hereby
irrevocably exercises the option to convert the Note, or the portion below
designated, into Common Stock of Alkermes, Inc. in accordance with the terms of
the Indenture referred to in the Note, and directs that the shares issuable and
deliverable upon conversion, together with any check in payment for fractional
shares, be issued in the name of and delivered to the undersigned, unless a
different name has been indicated in the assignment below. If shares are to be
issued in the name of a person other than the undersigned, the undersigned will
pay all transfer taxes payable with respect thereto.
Date:
Amount of Note to
be converted ($1,000 or integral
multiples thereof);
$
-----------------
Signature (for conversion only)
----------------------------
Please Print or
Typewrite Name and
Address, Including
Zip Code, and
Social Security or
Other Identifying
Number:
----------------------------
----------------------------
----------------------------
----------------------------
----------------------------
----------------------------
Signature Guarantee(2)
--------
(2) Signature must be guaranteed by a commercial bank, trust company or member
firm of the New York Stock Exchange.
A-12
